California-Sunnyvale-805/809 Eleventh Avenue Lease - Ariba Inc. and NetScreen Technologies Inc.
ARIBA PLAZA
SUBLEASE
Between
ARIBA, INC.
a Delaware corporation
as
SUBLANDLORD
and
NETSCREEN TECHNOLOGIES, INC.
a Delaware corporation
as
SUBTENANT
for
PREMISES
at
805 Eleventh Avenue
and
809 Eleventh Avenue
Sunnyvale, California 94089
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BASIC SUBLEASE INFORMATION
1. Sublease Date: October 18, 2002.
2. Sublandlord: Ariba, Inc., a Delaware corporation.
3. Subtenant: NetScreen Technologies, Inc., a Delaware corporation.
4. Master Landlord: Moffett Park Drive LLC, a California limited liability
company.
5. Project: Ariba Plaza, 1111 Lockheed Martin Way, Sunnyvale, California
(building addresses on Eleventh Avenue).
6. Rentable Area of Project: 715,998 square feet.
7. Premises: The Building Three Premises and the Building Four Premises, as
determined from time to time (subject to Paragraph 40).
8. Sublandlord's Server Room: That portion of the first floor of Building
Three designated as "Ariba Server Room" on Exhibit B, constituting 2,165
square feet.
9. Fourth Floor Expansion Space: That portion of the fourth floor of Building
Three designated as such on Exhibit B, constituting 21,860 rentable square
feet.
10. Building Three Premises:
Sublease Commencement Date through Fourth Floor Expansion Date: the entire
second and third floors of Building Three, and that portion of the first
floor of Building Three other than Sublandlord's Server Room, and that
portion of the fourth floor of Building Three other than the Fourth Floor
Expansion Space, constituting 151,057 rentable square feet;
Fourth Floor Expansion Date through Expiration Date: the entire second,
third and fourth floors of Building Three, and that portion of the first
floor of Building Three other than Sublandlord's Server Room, constituting
172,917 rentable square feet;
11. Building Four Premises: subject to potential expansion in accordance with
Paragraph 40, that portion of the first floor of Building Four designated
by crosshatching on Exhibit B ("Subtenant's Shipping Area"), constituting
4,707 rentable square feet.
12. Rentable Area of Premises (subject to Paragraph 40):
Sublease Commencement Date through
Fourth Floor Expansion Date: 155,764 rentable square feet.
Fourth Floor Expansion Date through
Expiration Date: 177,624 rentable square feet.
13. Sublease Commencement Date: November 1, 2002, subject to the provisions of
Paragraph 2.2 below.
14. Base Rent Inducement Period: Rent Commencement Date through the third
monthly anniversary of the Rent Commencement Date.
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15. Fourth Floor Expansion Date: The earlier of (i) February 14, 2004, or (ii)
the date Subtenant occupies all or any portion of the Fourth Floor
Expansion Space.
16. Sublease Expiration Date: May 13, 2008, subject to the provisions of
Paragraph 2.2 below.
17. Rent Commencement Date: February 14, 2003, subject to the provisions of
Paragraph 3.1 below .
18. Monthly Base Rent:
Rent Commencement Through Base Rent
Inducement Period: $ 0
Base Rent Inducement Period expiration
through Fourth Floor Expansion Date: $ 230,531
Fourth Floor Expansion Date through
Sublease Expiration Date: $ 262,884
19. Subtenant's Project Share:
Sublease Commencement Date through Fourth
Floor Expansion Date 21.75%.
Fourth Floor Expansion Date through
Sublease Expiration Date: 24.81%.
Subtenant's Building Share:
Building Three 100.00%
Building Four (subject to Paragraph 40) 0%
20. Security Deposit: the Security Deposit shall initially be an amount equal
to the Monthly Base Rent following the Base Rent Inducement Period times
three (3), or $691,593, to be increased to an amount equal to the Monthly
Base Rent following the Fourth Floor Expansion Date times three (3), or
$788,652, prior to the Fourth Floor Expansion Date; provided, that the
Security Deposit shall by subject to increase to two (2) times the then
current Security Deposit amount in accordance with Paragraph 4. The
Security Deposit shall also be subject to increase upon expansion of the
Premises, in accordance with Paragraph 40.
21. Sublandlord's Address:
Payment of Rent: 807 Eleventh Avenue
Sunnyvale, California, 94089
Attn: Real Estate Manager
Notices: 807 Eleventh Avenue
Sunnyvale, California, 94089
Attn: General Counsel
(650) 390-1377 Facsimile
and a copy to:
807 Eleventh Avenue
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Sunnyvale, California, 94089
Attn: Real Estate Manager
(650) 390-1315 Facsimile
22. Subtenant's Address for Notices:
Prior to Sublease Commencement Date:
350 Oakmead Parkway
Sunnyvale, CA 94085
Attn: General Counsel
(408) 730-6760 Facsimile
and a copy to:
350 Oakmead Parkway
Sunnyvale, CA 94085
Attn: Vice President of Operations
(408) 730-6760 Facsimile
As of Sublease Commencement Date:
805 Eleventh Avenue
Sunnyvale, CA 94089
Attn: General Counsel
(650)_____________Facsimile
and a copy to:
805 Eleventh Avenue
Sunnyvale, CA 94089
Attn: Vice President of Operations
(650)_____________Facsimile
23. Brokers: Cornish & Carey Commercial and Cushman and Wakefield
(Sublandlord's Broker) and The Staubach Company (Subtenant's Broker).
The Basic Sublease Information set forth above is made a part of the
Sublease. In the event of conflict between the Basic Sublease Information
and another provision of the Sublease, the latter shall control.
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TABLE OF CONTENTS
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PARAGRAPH PAGE
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1. Sublease of Premises................................................................... 1
1.1. Sublease......................................................................... 1
1.2. Common Areas - Definition........................................................ 1
1.3. Common Areas - Subtenant's Rights................................................ 2
1.4. Rules and Regulations............................................................ 2
1.5. Common Areas - Changes........................................................... 2
1.6. Parking.......................................................................... 3
1.7. Furniture........................................................................ 3
1.8. Sublandlord's Server Room........................................................ 5
1.9. MPOE Room........................................................................ 5
1.10. Subtenant's Shipping Area........................................................ 6
1.11. Amenity Areas.................................................................... 6
2. Term................................................................................... 6
2.1. Term............................................................................. 6
2.2. Delay in Delivery................................................................ 6
2.3. Subtenant Compliance............................................................. 6
3. Rent................................................................................... 7
3.1. Base Rent........................................................................ 7
3.2. Shared Expenses.................................................................. 7
3.3. Generally........................................................................11
3.4. Late Payment.....................................................................11
4. Security Deposit.......................................................................12
5. Use....................................................................................13
5.1. Use..............................................................................13
5.2. Hazardous Materials..............................................................13
5.3. Subtenant's Compliance with Applicable Requirements..............................15
5.4. Inspection; Compliance...........................................................15
6. Delivery of Possession.................................................................15
6.1. Condition........................................................................15
6.2. Compliance.......................................................................16
6.3. Acknowledgements.................................................................17
6.4. Subtenant's Work.................................................................17
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7. Utilities and Services.................................................................17
7.1. Standard Utilities and Services..................................................17
7.2. Telecommunications...............................................................19
7.3. Utility Additions................................................................21
7.4. Security.........................................................................21
7.5. Building Three...................................................................22
8. Maintenance and Repairs; Utility Installations, Trade Fixtures and Alterations.........22
8.1. Sublandlord's Obligations........................................................22
8.2. Subtenant's Obligations..........................................................23
8.3. Utility Installations; Trade Fixtures; Alterations...............................23
8.4. Ownership; Removal; Surrender; and Restoration...................................24
9. Insurance; Waiver; Subrogation.........................................................25
9.1. Cost of Sublandlord's Insurance..................................................25
9.2. Subtenant's Insurance............................................................25
9.3. Insurance Policies...............................................................25
9.4. Failure of Subtenant to Purchase and Maintain Insurance..........................26
9.5. Additional Insureds and Coverage.................................................26
9.6. Waiver of Subrogation............................................................26
9.7. No Representation of Adequate Coverage...........................................26
9.8. Furniture Casualty Loss..........................................................27
10. Limitation of Liability and Indemnity..................................................27
11. Property Taxes.........................................................................28
11.1. Payment of Taxes.................................................................28
11.2. Additional Improvements..........................................................28
11.3. Personal Property Taxes..........................................................28
12. Assignment and Subletting..............................................................28
12.1. Generally........................................................................28
12.2. Notice...........................................................................28
12.3. Sublandlord's Election...........................................................29
12.4. Sublandlord's Discretion; Factors................................................29
12.5. Bonus Rent.......................................................................30
12.6. Encumbrances.....................................................................30
12.7. Merger; Attornment...............................................................30
12.8. Sublandlord's Costs..............................................................31
12.9. Affiliates.......................................................................31
13. Default; Breach; Remedies..............................................................31
13.1. Default; Breach..................................................................31
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13.2. Remedies.........................................................................32
13.3. Inducement Recapture.............................................................33
13.4. Breach by Sublandlord............................................................33
14. Damage or Destruction; Condemnation....................................................34
15. Brokerage Fees.........................................................................34
16. Estoppel Certificates..................................................................34
17. Definition of Sublandlord..............................................................35
18. Severability...........................................................................35
19. Days...................................................................................35
20. Limitation on Liability................................................................35
21. Time of Essence........................................................................35
22. No Prior or Other Agreements...........................................................36
23. Notices................................................................................36
23.1. Notice Requirements..............................................................36
23.2. Date of Notice...................................................................36
23.3. Notices from Master Landlord.....................................................36
24. Waivers................................................................................36
25. No Right To Holdover...................................................................36
26. Cumulative Remedies....................................................................36
27. Covenants and Conditions; Construction of Agreement....................................37
28. Binding Effect; Choice of Law..........................................................37
29. Subordination; Attornment; Non-Disturbance.............................................37
29.1. Subordination....................................................................37
29.2. Attornment.......................................................................37
30. Master Lease Provisions................................................................37
30.1. Sublease Subordinate.............................................................37
30.2. Cooperation With Subtenant.......................................................39
30.3. Sublandlord Representations......................................................39
30.4. Modification.....................................................................39
30.5. Sublease Consent and Non-Disturbance Agreement...................................40
30.6. Multiple New Master Leases.......................................................40
30.7. Conflict.........................................................................40
31. Attorneys' Fees........................................................................40
32. Sublandlord's Access to Premises.......................................................41
32.1. Generally........................................................................41
32.2. Subtenant's Waiver...............................................................41
32.3. Method of Entry..................................................................41
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33. Auctions...............................................................................41
34. Signs..................................................................................41
35. [intentionally Omitted]................................................................42
36. Consents...............................................................................42
37. Quiet Possession.......................................................................42
38. Options................................................................................42
38.1. Definition.......................................................................42
38.2. Multiple Options.................................................................42
38.3. Master Lease Options.............................................................42
38.4. Effect of Default on Options.....................................................42
39. Options to Extend Term.................................................................43
40. Rights to Expand.......................................................................44
40.1. Right of First Refusal...........................................................44
40.2. Offer Right......................................................................45
40.3. Generally........................................................................46
41. [intentionally omitted]................................................................46
42. Reservations...........................................................................46
43. Performance Under Protest..............................................................46
44. Authority..............................................................................46
45. Amendments.............................................................................47
46. Exhibits...............................................................................47
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SUBLEASE
This Sublease is made and entered into as of the 18 day of October, 2002
("Effective Date"), by and between Ariba, Inc., a Delaware corporation
("Sublandlord"), and NetScreen Technologies, Inc., a Delaware corporation
("Subtenant").
R E C I T A L S
A. Sublandlord, as tenant, and Moffett Park Drive LLC, a California
limited liability company ("Master Landlord"), as landlord, previously entered
into the Technology Corners Triple Net Multiple Building Lease dated March 15,
2000, as amended by letter agreement dated September 11, 2000, and by a First
Amendment to Lease dated January 12, 2001 (collectively, the "Master Lease"), a
copy of which is attached hereto as Exhibit A and incorporated herein by this
reference. Under the Master Lease, Master Landlord leases to Sublandlord certain
premises located at 1111 Lockheed Martin Way in Sunnyvale, California, including
four (4) free standing, four-story office and research and development
buildings, and one (1) amenity building (collectively, the "Buildings") and
other improvements including a parking structure (collectively the "Project").
The four office and research development buildings are commonly known as: 803
Eleventh Avenue ("Building One"), 807 Eleventh Avenue ("Building Two"), 805
Eleventh Avenue ("Building Three"), and 809 Eleventh Avenue ("Building Four").
The amenity building ("Amenity Building") is currently used as a fitness center.
References in this Sublease to a "Building" shall refer to Buildings One, Two,
Three and Four, and the Amenities Building, individually, and references in this
Sublease to the "Buildings" shall refer to Buildings One, Two, Three and Four,
and the Amenities Building, collectively, unless otherwise expressly stated.
B. Sublandlord wishes to sublease to Subtenant, and Subtenant desires
to sublease from Sublandlord, on the terms and conditions set forth herein, the
Premises, as defined in the Basic Lease Information.
C. Capitalized terms used herein without definition shall have the
same meaning as in the Master Lease.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Sublandlord and Subtenant agree as follows:
A G R E E M E N T
1. SUBLEASE OF PREMISES
1.1. SUBLEASE. Sublandlord hereby subleases and demises to Subtenant,
and Subtenant hereby accepts from Sublandlord, on the terms and conditions
hereinafter set forth, the Premises. The Premises are depicted on Exhibit B,
which is attached hereto and incorporated herein by this reference. Sublandlord
and Subtenant conclusively agree, for purposes of this Sublease, that the
Premises contain the number of rentable square feet stated in the Basic Lease
Information.
1.2. COMMON AREAS - DEFINITION. The term "Common Areas" includes both
"Project Common Area" and "Building Common Area." "Project Common Area" is
defined as all areas and facilities outside the Buildings and within the
exterior boundary line of the Project, including parking areas, passenger and
other loading and unloading areas, trash areas, roadways, walkways, driveways
and landscaped areas that are provided and reasonably designated by the
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Sublandlord from time to time for the general non-exclusive use of Sublandlord,
Subtenant and other tenants of the Project and their respective employees,
suppliers, shippers, customers, contractors and invitees. "Building Common Area"
is defined as all areas and facilities inside a building that are provided and
reasonably designated by the Sublandlord from time to time for the general
non-exclusive use of the tenants of such building and their respective
employees, suppliers, shippers, customers, contractors and invitees, including
stairways, elevators, lobbies and other areas which may be so provided and
reasonably designated by Sublandlord.
1.3. COMMON AREAS - SUBTENANT'S RIGHTS. Sublandlord grants to Subtenant,
for the benefit of Subtenant and its employees, suppliers, shippers,
contractors, customers and invitees, during the term of this Sublease and all
extensions thereto, the right to use, in common with others entitled to such
use, the Project Common Areas as they exist from time to time, subject to any
rights, powers, and privileges reserved by (i) Master Landlord under the Master
Lease and (ii) Sublandlord under the terms hereof or under the terms of any
rules and regulations or restrictions governing the use of the Project.
Sublandlord also grants to Subtenant, for the benefit of Subtenant and its
employees, suppliers, shippers, contractors, customers and invitees, during the
term of this Sublease and all extensions thereto, the right to use, in common
with other tenants of such Building, the Building Common Areas as they exist
from time to time in any Building in which Subtenant occupies space, subject to
any rights, powers, and privileges reserved by (i) Master Landlord under the
Master Lease and (ii) Sublandlord under the terms hereof or under the terms of
any rules and regulations or restrictions governing the use of the Project.
Notwithstanding the foregoing, the parties agree that:
(i) as to Building Three, there is no Building
Common Area for purposes of this Lease because Subtenant is taking the
entire space with the exception of 2,165 rentable square feet being
retained by Sublandlord as Sublandlord's Server Room. Sublandlord's rights
regarding access to and use of Sublandlord's Server Room shall be as
provided in Paragraph 1.8, below; and
(ii) as to Building Four, since Subtenant will not
use the lobby, stairs, or elevators due to Subtenant's direct exterior
access to the Subtenant's Shipping Area, the parties agree that the only
Building Common Area is the loading dock staging area, as depicted on
Exhibit B, the use of which is to be shared by all of the tenants of the
Project. This is subject to change in the event Subtenant takes any other
space in Building Four, either pursuant to Subtenant's rights under
Paragraph 40 below or otherwise.
1.4. RULES AND REGULATIONS. Sublandlord shall have the right, from time
to time, to establish, modify, amend and enforce reasonable rules and
regulations ("Sublandlord's Rules and Regulations") for the management, safety,
care, and cleanliness of the Buildings and the remainder of the Project, the
parking and unloading of vehicles and the preservation of good order, as well as
for the convenience of other occupants or tenants of the Buildings and the
Project and their invitees. A copy of the current Sublandlord's Rules and
Regulations are attached to this Sublease as Exhibit C and incorporated herein
by this reference. Subtenant agrees to abide by and conform to all such
Sublandlord's Rules and Regulations, and the Rules and Regulations adopted from
time to time by Master Landlord under the Master Lease ("Master Landlord's Rules
and Regulations"), and to cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Sublandlord shall not be
responsible to Subtenant for the non-compliance with said rules and regulations
by other tenants of the Project. Any enforcement of said rules and regulations
by Sublandlord shall be on a non-discriminatory basis. In the event of conflict
between the provisions of this Sublease and Sublandlord's Rules and Regulations,
the provisions of this Sublease shall prevail. In the event of conflict between
Master Landlord's Rules and Regulations and Sublandlord's Rules and Regulations,
Master Landlord's Rules and Regulations shall prevail.
1.5. COMMON AREAS - CHANGES. Sublandlord shall have the right, in
Sublandlord's sole discretion, from time to time; provided that Subtenant
nonetheless shall have reasonable access to parking and the Premises at all
times:
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(a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, passenger and other loading and
unloading areas, ingress, egress, direction of traffic, landscaped areas,
walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the Project
to be a part of the Common Areas (but only if and to the extent the Common Areas
are so expanded by Master Landlord pursuant to its rights under the Master
Lease) so long as any change in the size of the Common Areas shall be reflected
equitably in the calculation of Operating Expenses herein, and provided that in
such a case Subtenant's Project Share of Operating Expenses shall not be
increased without the consent of Subtenant, in Subtenant's reasonable
discretion;
(d) To add additional buildings and improvements to the Common
Areas so long as any changes made to the Project pursuant to this Subparagraph
1.5 (d) shall be at Sublandlord's sole cost, unless otherwise mutually agreed by
the parties, and any change in the size of the Common Areas shall be reflected
equitably in the calculation of Operating Expenses herein, and provided that in
such a case Subtenant's Project Share of Operating Expenses shall not be
increased without the consent of Subtenant, in Subtenant's reasonable
discretion;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project, or any portion thereof; and
(f) To do and perform such other acts or work and make such other
changes in, to or with respect to the Common Areas and Project as Sublandlord
may, in the exercise of reasonable business judgment, deem to be appropriate.
1.6. PARKING. Subtenant shall have the right, at no additional cost, to
the non-exclusive use of three (3) parking spaces for each 1,000 square feet of
rentable area of the Premises in the areas of the Project designated by
Sublandlord for parking. Sublandlord reserves the right to equitably modify
rights granted under this Paragraph if obligated to do so by the Master Lease or
applicable governmental regulations, or in the event of construction, natural
disaster, or other similar reasonable circumstances. Subtenant shall not use
more parking spaces than permitted herein. Subtenant shall not park any vehicles
larger than full-size passenger automobiles, sport utility vehicles or pick-up
trucks, herein called "Permitted Size Vehicles." Sublandlord may regulate the
loading and unloading of vehicles by adopting and amending Rules and Regulations
for the Project. No vehicles other than Permitted Size Vehicles may be parked in
the Common Area without the prior written permission of Sublandlord. Subtenant
shall have the right to mark (by striping and/or signage) not more than ten (10)
parking spaces in the area designated "Visitor Parking" on Exhibit B for
non-exclusive visitor parking, provided that (i) Sublandlord shall have no
obligation to enforce the use of such spaces for such purpose, (ii) such spaces
shall not be marked to indicate that they are for the exclusive use of Subtenant
or its visitors, and (iii) such right shall be subject to the prior written
approval of Master Landlord.
(a) Subtenant shall not permit or allow any vehicles that belong
to or are controlled by Subtenant or Subtenant's employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Sublandlord for such activities.
(b) Subtenant shall not service or store any vehicles in the
Common Areas.
(c) If Subtenant permits or allows any of the prohibited
activities described in this Paragraph 1.6, then Sublandlord shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove or tow away the vehicle involved and charge the cost to
Subtenant, which cost shall be immediately payable upon demand by Sublandlord.
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1.7. FURNITURE.
(a) Building Three shall be delivered to Subtenant with the
Furniture included for Subtenant's use during the Sublease term, in accordance
with and subject to the terms and conditions of this Paragraph and all other
applicable provisions of this Sublease. The "Furniture" is defined as the
furniture, fixtures, equipment and other personal property described on Exhibit
D attached hereto and incorporated herein by this reference. Sublandlord shall
deliver the Furniture to Subtenant AS IS and Subtenant agrees that it takes
possession of the Furniture without relying on any representation or warranty by
Sublandlord as to the condition of the Furniture or its operability. SUBLANDLORD
DISCLAIMS, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL WARRANTIES AND
CONDITIONS, EXPRESS OR IMPLIED OR STATUTORY, AS TO ANY MATTER WHATSOEVER,
INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE. Sublandlord assumes no responsibility for providing
additional maintenance for the Furniture. Subtenant acknowledges that any change
in the current installation or configuration and any maintenance of the
Furniture may require an investment of time and resources to complete, and such
efforts shall not serve to excuse Subtenant from the performance of any of its
obligations under this Sublease. Subtenant conclusively agrees that for purposes
of this Sublease, the total number of cubicle systems provided to Subtenant is
as described in Exhibit D. Within thirty (30) days of the Sublease Commencement
Date, Subtenant shall be given an opportunity to verify inventory as compared to
Exhibit D. In the event that a discrepancy is identified in the Furniture
inventory, Subtenant shall notify Sublandlord, and the parties shall cooperate
reasonably with each other to make any appropriate corrections. In no event
shall Sublandlord have any liability, nor shall Subtenant have any remedy
against Sublandlord, for any liability, claim, loss, damage or expense caused
directly or indirectly by the Furniture or any deficiency or defect thereof or
the maintenance or repair thereof.
(b) Except as otherwise expressly provided herein, Subtenant shall
not have, or at any time acquire, any right, title or interest in the Furniture
except the right to possession and use as provided for in this Sublease.
Sublandlord shall have the right to place and maintain on the exterior or
interior of each item of Furniture an inscription identifying Sublandlord's
ownership of the Furniture. Subtenant shall not remove, obscure, deface or
obliterate the inscription or permit any other person to do so. Subtenant shall
keep the Furniture and all right, title, and interest free and clear of all
liens, charges, and encumbrances caused by Subtenant.
(c) Subtenant shall use the Furniture in a reasonably careful and
proper manner and shall not permit any Furniture to be used in violation of any
applicable federal, state, or local statute, law, ordinance, rule, or regulation
relating to the possession, use or maintenance of the Furniture. Subtenant shall
use only manufacturer authorized service providers to reconfigure, reassemble,
disassemble, repair and maintain the Furniture. Subtenant agrees to reimburse
Sublandlord for all damage to the Furniture arising from misuse or negligent
acts by Subtenant, its employees and its agents. If any Furniture covered by
this Sublease is damaged, lost, stolen or destroyed, or if any Furniture is
damaged as a result of its use, maintenance or possession, Subtenant shall
promptly notify Sublandlord of the occurrence and shall file all necessary
reports, including those required by law and those required by insurers of the
Furniture. Subtenant agrees to use the Furniture solely for business purposes
consistent with all use requirements and restrictions under the Sublease.
Subject to Paragraph 1.7(d), Subtenant shall return the Furniture to Sublandlord
in accordance with the provisions of Paragraph 8.4(c) below.
(d) Provided that (A) (i) Subtenant properly exercises both
options to extend the Term described in Paragraph 39 below, (ii) the term of the
Master Lease has not been extended beyond its current expiration date, and (iii)
Subtenant is not in default under this Sublease at the time of exercise of the
option, or (B) a "Recognition Event" (as defined in that certain Recognition
Agreement by and between Sublandlord, Subtenant and Master landlord entered into
or to be entered into pursuant to Paragraph 30.5), then Subtenant shall have the
option to purchase the Furniture at its "fair market value" (defined below) in
accordance with this paragraph. Such option shall be exercisable (A) no later
than nine (9) months, nor earlier than eleven (11) months, prior to the
expiration of the second option period, or (B) within ninety (90) days after the
occurrence of the Recognition Event, time being of the essence, by giving
written notice of exercise to Sublandlord. The parties agree to determine fair
market value in a manner consistent with that described in Paragraph 39 for
determining Fair Market Rental Rate; provided that, for purposes of the
arbitration procedure (should that procedure become necessary), the
qualifications for the arbitrators shall be that they are individuals of
substantial experience with respect to transactions involving office furniture
and equipment in Santa Clara County and that they do not have any ongoing
business relationship with the party selecting such person. Upon reaching the
determination of the Furniture's fair market value, Subtenant shall
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pay the fair market value amount to Sublandlord, who in exchange for such
payment shall provide to Subtenant a bill of sale for the Furniture upon
expiration of the Sublease or following the Recognition Event. For purposes of
this option, "fair market value" shall be defined as the amount that a willing
buyer would pay and a willing seller would accept in an arm's length transaction
under comparable circumstances.
(e) During the first six (6) months of the Term, provided
Subtenant is not in Default hereunder, Subtenant shall have a one-time right
("Removal Right") to require Sublandlord to remove designated Furniture items
("Unwanted Furniture") from the Subleased Premises. The Removal Right shall be
effective as of the Sublease Commencement Date and shall expire on the six (6)
month anniversary of the Sublease Commencement Date ("Removal Right Term"). The
Removal Right may be exercised by Subtenant's delivering to Sublandlord written
notice of the exercise ("Exercise Notice"), prior to the end of the Removal
Right Term. The Exercise Notice shall specify a three-week period ("Removal
Period") which is not less than seven (7) days nor more than thirty (30) days
following the date of the Exercise Notice in which Sublandlord is to perform the
requested removal of the Unwanted Furniture. The Exercise Notice shall be
accompanied by a clearly-defined list of the items of Unwanted Furniture. The
Removal Right shall only be exercisable one time. Sublandlord shall select the
timing and sequence for removal of the Unwanted Furniture during the Removal
Period and shall communicate such information to Subtenant prior to the Removal
Period. Subtenant shall provide all necessary access to the Subleased Premises
to permit Sublandlord to perform removal. Prior to removal, Subtenant shall
completely disconnect and detach the Unwanted Furniture from all other Furniture
and property in the Subleased Premises and from the Subleased Premises itself.
Any Furniture that remains attached or connected in any way (including, by way
of example only, connected wiring and cabling) shall not be removed until
Subtenant disconnects and detaches the same, and if such disconnection is not
completed before Sublandlord has removed the balance of the Unwanted Furniture,
then Sublandlord's removal obligation shall automatically terminate with respect
to such items. At the time of removal by Sublandlord, all Unwanted Furniture
shall be in the same condition as provided to Subtenant. Following removal of
each item of Unwanted Furniture from the Subleased Premises, such items shall be
effectively deleted from the Furniture listed on Exhibit D. Promptly following
the Removal Period, Sublandlord shall provide to Subtenant a modified Furniture
list, labeled Exhibit D-1, which shall reflect such deletion and shall be
attached to the Sublease and replace Exhibit D; provided that the failure to
provide such an Exhibit D-1 shall not affect the validity of these provisions.
Following removal of items of Unwanted Furniture, Subtenant shall have no
further rights under Paragraph 1.7(d) (option to purchase) with respect to such
items.
1.8. SUBLANDLORD'S SERVER ROOM. The Premises shall not include, and
Sublandlord reserves for its own use, Sublandlord's Server Room as defined in
the Basic Lease Information. Sublandlord shall have access at all times to
Sublandlord's Server Room through the Building Three lobby and the corridor
leading from the lobby to the entrance to Sublandlord's Server Room. Subtenant
shall provide Sublandlord with any and all access cards, codes, and/or passwords
necessary for unfettered access to Sublandlord's Server Room. Sublandlord shall
not share in any Building Three Building Expenses, as defined in Paragraph 3.2
below, other than Sublandlord's share of the Server Room Electricity Cost. The
term "Server Room Electricity Cost" shall mean the cost of the electricity
provided to the Server Area (as defined in Exhibit I) through the existing
uninterrupted power supply located in Sublandlord's Server Room, which shall be
separately metered in accordance with the Work Letter attached hereto as Exhibit
I. Sublandlord's share of the Server Room Electricity Cost shall be equal to the
percentage of the total square feet of "Potential Cabinet Space" in the Server
Area that is located in Sublandlord's Server Room. The term "Potential Cabinet
Space" shall mean the square foot measurement of the floor area which is
available for installing server cabinets given the server rack fixture
infrastructure in the Server Area from time to time. Sublandlord and Subtenant
agree that based on the configuration of the Server Area following completion of
Sublandlord's Work in accordance with the Work Letter, Sublandlord's share of
the Server Room Electricity Cost shall be forty-one percent (41%).
1.9. MPOE ROOM. In addition to Sublandlord's Server Room, Sublandlord
shall also have access at all times to the main point of entry room ("MPOE
Room") located on the first floor of Building Three in the location designated
on the Building Three floor plans attached hereto as Exhibit B. Sublandlord
shall give Subtenant as much advance notice as is reasonably possible prior to
access to the MPOE Room. Sublandlord shall be accompanied either by a NetScreen
representative or security guard during access to the MPOE Room, provided that
such requirement shall not be used as a basis for preventing or restricting
Sublandlord's access.
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1.10. SUBTENANT'S SHIPPING AREA. In connection with Subtenant's
subleasing of Subtenant's Shipping Area, Subtenant shall have the non-exclusive
right to use the loading dock and adjacent staging area, as those areas are
identified on the floor plan of the first floor of Building Four attached hereto
as Exhibit B. Use of the loading dock and staging area will be subject to
reasonable rules and regulations adopted by Sublandlord.
1.11. AMENITY AREAS. The term "Amenity Areas" is defined as those
portions of the Project consisting of the Amenity Building, which contains
15,660 rentable square feet, and the space in Building Four occupied by a
cafeteria, which contains 21,510 rentable square feet. The Amenity Areas are
available for use by Subtenant as provided in the Cafeteria Provisions and the
Fitness Center Provisions contained in Exhibits E and F respectively, attached
to this Sublease.
2. TERM.
2.1. TERM. The term of this Sublease ("Term") shall commence on the
Sublease Commencement Date identified in the Basic Sublease Information (the
"Sublease Commencement Date") and shall expire on the Sublease Expiration Date
identified in the Basic Sublease Information (the "Expiration Date"), subject to
change in accordance with Paragraph 2.2 below. Sublandlord shall deliver
possession of the Premises, other than the Fourth Floor Expansion Space and
Subtenant's Server Room (see Work Letter attached as Exhibit I), to Subtenant on
the Sublease Commencement Date in the condition required under Paragraph 6.1
below. Sublandlord shall deliver possession of the Fourth Floor Expansion Space
to Subtenant on the earlier of (i) February 14, 2004, or (ii) within thirty (30)
days following receipt of written notice from Subtenant requesting possession.
Sublandlord shall deliver possession of Subtenant's Server Room to Subtenant in
accordance with Article II of the Work Letter. After the occurrence of the
Sublease Commencement Date, Sublandlord shall provide to Subtenant a Sublease
Commencement Date Memorandum in the form attached to this Sublease as Exhibit G,
which Memorandum Subtenant shall promptly execute and deliver to Sublandlord.
Subtenant shall have no rights in any portion of the Premises or the Project
prior to the Sublease Commencement Date, unless expressly provided otherwise in
this Sublease.
2.2. DELAY IN DELIVERY. Sublandlord shall not be subject to any
liability for its failure to deliver possession of the Premises by the scheduled
Sublease Commencement Date or any other particular date, nor shall such failure
affect the validity of this Sublease or affect the Sublease Expiration Date;
provided, however, that:
(1) The Sublease Commencement Date shall be the day Sublandlord
tenders possession of the Premises to Subtenant
(2) If Sublandlord fails to deliver possession of the Premises to
Subtenant on or before November 14, 2002, solely for reasons within the
reasonable control of Sublandlord, then for each day that elapses between
November 14, 2002, and the date possession is tendered, the Expiration Date
shall be extended by one day; and
(3) If Sublandlord fails to deliver possession of the Premises to
Subtenant on or before February 1, 2003, Subtenant may, at its option, by notice
to Sublandlord in writing within ten (10) days after such date, cancel this
Sublease. If such written notice is not received by Sublandlord within said
10-day period, Subtenant's right to cancel shall terminate. This termination
right shall be of no force or effect, however, in the event of any delay beyond
Sublandlord's reasonable control.
For purposes of this Paragraph 2.2, obtaining the Master Landlord's consent to
this Sublease shall not be considered to be within the reasonable control of
Sublandlord. All references to the Premises in this Paragraph 2.2 shall exclude
the Fourth Floor Expansion Space and Subtenant's Server Room.
2.3. SUBTENANT COMPLIANCE. Sublandlord shall not be required to tender
possession of the Premises (excluding the Fourth Floor Expansion Space and
Subtenant's Server Room) to Subtenant until Subtenant complies with its
obligation to provide (i) the evidence of insurance required hereunder and (ii)
the Security Deposit required under
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Paragraph 4. Pending delivery of such evidence, Subtenant shall be required to
perform all of its obligations under this Sublease from and after the date
Sublandlord was otherwise prepared to tender possession, including the payment
of Rent, notwithstanding Sublandlord's election to withhold possession pending
receipt of such evidence of insurance and/or the Security Deposit. Further, if
Subtenant is required to perform any other express conditions prior to or
concurrent with the Sublease Commencement Date, the Sublease Commencement Date
shall occur but Sublandlord may elect to withhold possession until such
conditions are satisfied.
3. RENT.
3.1. BASE RENT. Subtenant shall pay to Sublandlord monthly base rent
("Base Rent") in the amount shown in the Basic Sublease Information. Base Rent
shall be payable for the period beginning on the "Rent Commencement Date" shown
in the Basic Sublease Information and continuing throughout the remainder of the
Term. Base Rent is due and payable in advance on the first day of each calendar
month; provided, however, that Base Rent for the fourth (4th) full month shall
be due at the time of Subtenant's execution and delivery of this Sublease. Base
Rent is payable without notice or demand. Base Rent for any period during the
Term which is less than one full calendar month shall be prorated based on the
actual number of days in the calendar month involved. Notwithstanding the
foregoing, if Sublandlord fails to deliver possession of the initial Premises
(other than the Server Area identified in Exhibit I hereto) to Subtenant on or
before November 14, 2002, solely for reasons within the reasonable control of
Sublandlord, then for each day that elapses between November 14, 2002, and the
date possession is tendered, the Rent Commencement Date shall be extended by one
day. For purposes of this Paragraph 3.1, obtaining the Master Landlord's consent
to this Sublease shall not be considered to be within the reasonable control of
Sublandlord.
3.2. SHARED EXPENSES. In addition to Base Rent, commencing on the Rent
Commencement Date and continuing throughout the entire remaining Term, Subtenant
shall pay to Sublandlord: (i) Subtenant's Project Share of all Project Operating
Expenses and all Master Lease Expenses, and (ii) Subtenant's Building Share of
all Building Expenses, in accordance with the following provisions. The term
Operating Expense shall refer to both Project Operating Expenses and Building
Expenses, except as otherwise expressly provided.
(a) "Subtenant's Project Share" is defined as the percentage
determined by dividing the rentable square feet of the Premises by the total
rentable square feet of the Project. Sublandlord and Subtenant conclusively
agree that the Subtenant's Project Share shall be the percentage set forth in
the Basic Sublease Information (subject to increase in accordance with Paragraph
40).
(b) "Subtenant's Building Share" with respect to a given Building
is defined as the percentage determined by dividing the rentable square feet of
the Premises contained in the Building by the total rentable square feet of the
Project. Notwithstanding the foregoing, Sublandlord and Subtenant conclusively
agree that with respect to Building Three, Subtenant's Building Share is one
hundred percent (100%), and unless and until Subtenant occupies all or a portion
of an Expansion Space (as defined in Paragraph 40) in Building Four Subtenant's
Building Share of Building Four is zero percent (0%).
(c) "Building Expenses" is defined, for purposes of this Sublease,
to include all costs incurred by Sublandlord in the management, operation,
repair, maintenance and replacement of Buildings One, Two, Three and Four
(including Building Common Areas, but not including the Amenity Area in Building
Four containing the Cafeteria), including without limitation, the following:
utilities and services provided by Sublandlord pursuant to Paragraph 7;
maintenance and repairs performed by Sublandlord pursuant to Paragraph 8,
including repair and maintenance of Building mechanical systems (HVAC, plumbing
and electrical); roof repairs & maintenance (to the extent not performed by
Master Landlord); fire, life safety systems, including sprinkler system and fire
monitoring; window repairs; capital improvements and replacements; and a
management fee of three percent (3%) of Building Expenses.
(d) "Master Lease Expenses" is defined, for purposes of this
Sublease, to include all amounts paid or payable by Sublandlord under the Master
Lease (including without limitation all real estate taxes, assessments, fees and
other
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impositions in accordance with the provisions of Article IX, insurance premiums
in accordance with the provisions of Article VII, operating charges,
maintenance, repair and replacement costs and expenses in accordance with the
provisions of Article VI, landscaping (including irrigation), parking lot and
garage maintenance and repairs (including striping and sweeping), exterior pest
control, roof maintenance and repairs, window washing, capital improvements and
replacements, and a Management Fee), excepting therefrom Base Rent (as that term
is defined in the Master Lease), the costs incurred by Sublandlord for the
Tenant Improvements (as that term is defined in the Master Lease), and amounts
incurred as a result of default by Sublandlord not caused by Subtenant.
(e) "Project Operating Expenses" is defined, for purposes of this
Sublease, to include all costs incurred by Sublandlord in the management,
operation, repair, maintenance and replacement of the Project (including the
Common Areas and the Amenity Areas) in the exercise of its reasonable
discretion, to the extent not included in Master Lease Expenses or Building
Expenses, including the following:
(i) The operation, repair, replacement and maintenance
in neat, clean, safe, good order and condition, of the Project (except to the
extent Master Landlord is responsible for the Outside Areas under the Master
Lease, the costs for which are passed through to Subtenant as Master Lease
Expenses), including but not limited to, the following:
(aa) The Project Common Areas and Amenity Areas
including their surfaces, coverings, decorative items, carpets, drapes and
window coverings, and including parking areas, loading and unloading areas,
trash areas, roadways, sidewalks, walkways, stairways, parkways, driveways,
landscaped areas, striping, bumpers, irrigation systems, lighting
facilities, building exteriors and roof, fences and gates;
(bb) All Project heating, ventilation, air
conditioning, plumbing, electrical systems, back-up generators (including
maintenance & repairs, routine testing, and permits for diesel storage
onsite), life safety equipment, telecommunication and other equipment used
in common by, or for the benefit of, lessees or occupants of the Project,
including elevators and escalators, tenant directories, fire detection
systems including sprinkler systems maintenance and repair.
(ii) Common Area trash disposal, and general Project
security systems and security guards;
(iii) Any other service or utilities to be provided by
Sublandlord that is elsewhere in this Sublease stated to be an "Operating
Expense";
(iv) The cost of the premiums for liability and
property insurance policies to be maintained by Sublandlord under this Sublease
and the Master Lease;
(v) The cost of water, sewer, gas, electricity, and
other utilities and services to the Project (e.g., lighting for the the parking
lot, garage, cafe, fitness center, and other exterior areas);
(vi) Costs in connection with the Moffett Park
Transportation Demand Management Plan (see Master Lease Section 5.07);
(vii) Labor, salaries, and applicable fringe benefits
and costs, materials, supplies and tools, used in maintaining and/or cleaning
the Project, including salaries and supplies of facilities staff such as the
helpdesk and handyman;
(viii) All costs associated with general tenant services
made available to all subtenants of the Project, except as otherwise provided in
this Sublease;
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(ix) accounting and a management fee of three percent
(3%) of actual Project Operating Expenses;
(x) The cost of any Capital Expenditure (defined in
Paragraph 6.2) to the Project not payable by Subtenant under the provisions of
Paragraph 6.2 below or by other subtenants of the Project, provided that such
cost shall be amortized over the useful life (as determined by Sublandlord in
its sole discretion) of each such replacement item (including interest on the
unamortized balance at the Agreed Rate as defined in Section 17.02 of the Master
Lease) over the remaining term of the Sublease, which cost would be payable in
equal monthly installments during that time period;
(xi) Replacements of equipment or improvements, as
amortized over the useful life of such replacement item (including interest on
the unamortized balance at the Agreed Rate), over the remaining term of the
Sublease, which cost would be payable in equal monthly installments during that
time period;
(xii) Cafeteria operations, including without limitation
all cleaning, janitorial services and associated supplies, purchases and repair
and maintenance of equipment, repairs and maintenance of windows and building
mechanical systems (e.g., HVAC, plumbing, electrical), utilities and services;
and
(xiii) Fitness Center operations, including without
limitation all cleaning, janitorial services and associated supplies, purchases
and repair and maintenance of equipment (including AV system equipment), repairs
and maintenance of windows and building mechanical systems (e.g., HVAC,
plumbing, electrical), utilities and services.
Notwithstanding anything to the contrary contained herein, the
following items shall be excluded from Operating Expenses:
(1) Costs associated with the operation of the
business of the ownership or entity which constitutes "Sublandlord", as
distinguished from the costs of building operations for the benefit of the
Project and its tenants as a whole;
(2) Depreciation;
(3) Real estate brokers' leasing commissions, and
advertising expenses incurred in connection with the subleasing of the
Project;
(4) Costs for which Sublandlord is reimbursed by
its insurance carrier or any subtenant's insurance carrier;
(5) Costs for all repairs, replacements, items
and/or services for which Subtenant or any other subtenant in the Project
reimburses Sublandlord;
(6) Costs incurred by Sublandlord for services
which Sublandlord provides selectively to one or more subtenants (other
than Subtenant, which costs shall be billed directly to Subtenant) without
reimbursement;
(7) Sums payable as a result of Sublandlord's
default under any of its obligations under the Master Lease or this
Sublease (except to the extent such default is a result of Subtenant's
default under this Sublease); and
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(8) Master Lease Expenses (provided that the
exclusion of Master Lease Expenses from Operating Expenses shall not affect
Subtenant's obligation to pay Master Lease Expenses as set forth herein).
In the calculation of any expenses hereunder, it is understood that no expense
shall be recovered more than once. Sublandlord's reasonable application of this
Paragraph 3.2 in allocating expenses among the various expense categories shall
be binding, provided that Sublandlord shall be consistent in its treatment of
expenses among subtenants of the Project. In addition, to the extent that
Sublandlord can avoid incurring any expense described hereunder by enforcing
available warranties or the like, Sublandlord agrees to make commercially
reasonable efforts to do so. Sublandlord shall use commercially reasonable
efforts to effect an equitable proration of bills for services rendered to the
Project. Sublandlord agrees to keep books and records showing the Operating
Expenses in accordance with generally accepted accounting principles
consistently maintained on a year-to-year basis.
(f) Gross-Up. If the occupancy of the Project during any part of
the term of this Sublease is less than 100 percent, Sublandlord shall make an
appropriate adjustment of the variable components of Operating Expenses and
Master Lease Expenses for that period, as reasonably determined by Sublandlord
using sound accounting and management principles, to determine the amount of
Operating Expenses and Master Lease Expenses that would have been incurred had
the Project been 100 percent occupied. This amount shall be considered to have
been the amount of Operating Expenses and Master Lease Expenses for that period.
For purposes of this provision, "variable components" include only those
component expenses that are affected by variations in occupancy levels.
(g) Payment. Subtenant shall pay Subtenant's Project Share of
Operating Expenses and Master Lease Expenses (Operating Expenses and Master
Lease Expenses being collectively defined as "Sublease Expenses") for all
Sublease Expenses reasonably allocable, in Sublandlord's opinion, to the period
beginning with the Rent Commencement Date and continuing throughout the entire
Term. Sublease Expenses shall be due and payable ten (10) days after a
reasonably detailed calculation of Subtenant's Project Share of such expenses is
presented to Subtenant by Sublandlord, which Sublandlord may present at
intervals no more frequently than monthly ("Monthly Expense Statement");
provided that, with regard to Master Lease Expenses, Sublandlord shall not be
required to provide more information than has been offered to Sublandlord. At
Sublandlord's and/or Master Landlord's (pursuant to the Master Lease) option,
however, an amount may be estimated by Sublandlord from time to time of
Subtenant's Project Share of annual Sublease Expenses and the same shall be
payable monthly or quarterly, as Sublandlord shall designate, during each
calendar year of the Sublease term, on the same day as the Base Rent is due
hereunder. In the event that Subtenant pays Sublandlord's and/or Master
Landlord's estimate of Subtenant's Project Share of Sublease Expenses as
aforesaid, Sublandlord shall deliver to Subtenant within one hundred twenty
(120) days after the expiration of each calendar year a reasonably detailed
statement (as described above) showing Subtenant's Project Share of the actual
Sublease Expenses incurred during the preceding year ("Annual Expense
Statement"); provided that, with regard to Master Lease Expenses, Sublandlord
shall not be required to provide more information than has been offered to
Sublandlord. If Sublandlord elects to estimate Sublease Expenses as set forth
above and if Subtenant's payments under this Paragraph 3.2(g) during said
preceding calendar year exceed Subtenant's Project Share as indicated on said
Annual Expense Statement, Subtenant shall be entitled to credit the amount of
such overpayment against Subtenant's Project Share of Sublease Expenses next
falling due, or if the Sublease term has expired, Sublandlord shall deliver a
cash refund to Subtenant with the Annual Expense Statement. If Subtenant's
payments under this paragraph during said preceding calendar year were less than
Subtenant's Project Share as indicated on said Annual Expense Statement,
Subtenant shall pay to Sublandlord the amount of the deficiency within ten (10)
days after delivery by Sublandlord to Subtenant of said Annual Expense
Statement. All determinations of Sublease Expenses shall be made by Sublandlord
in accordance with sound accounting and management principles and shall be
binding on Subtenant for the purpose of initial payment; provided, however, that
Subtenant shall have the right to object in good faith to Sublandlord's
determinations of Sublease Expenses in accordance with the procedure in
Paragraph 3.2(h) and seek a credit (or refund after the term expires) of
correctly disputed amounts.
(h) Audit. On Subtenant's written request given not more than
sixty (60) days after Subtenant's receipt of a Monthly Expense Statement or an
Annual Expense Statement, and provided that Subtenant is not then in default
under
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this Sublease beyond the applicable cure period provided in this Sublease and
that Subtenant has paid all amounts required to be paid under the applicable
Monthly Expense Statement or Annual Expense Statement (reserving the right to
recover any excess payments in accordance with this Paragraph 3.2(h)), then
Sublandlord shall provide Subtenant with a reasonable opportunity to review the
books and records supporting such determination of Sublease Expenses in the
office of Sublandlord, or Sublandlord's agent, during business hours.
Sublandlord shall provide this opportunity to inspect within twenty (20) days of
Subtenant's written request.
Within fifteen (15) days following Subtenant's inspection,
Subtenant and Sublandlord shall concurrently be provided with any audit report
prepared in connection with such inspection, and Subtenant shall advise
Sublandlord if Subtenant disputes the Sublease Expenses or Subtenant's Project
Share of them as set forth in the applicable Monthly Expense Statement or Annual
Expense Statement. Thereafter, if Sublandlord ascertains that an error has been
made, Subtenant's sole remedy shall be for the parties to make such appropriate
payments or reimbursements, as the case may be, including interest on any such
amount at the Agreed Rate, to each other as are determined to be owing, provided
that any reimbursements payable by Sublandlord to Subtenant may, at
Sublandlord's option, instead be credited against the Base Rent next coming due
under this Sublease unless the Sublease term has expired, in which event
Sublandlord shall refund the appropriate amount to Subtenant. If Subtenant fails
to make a written request to review Sublandlord's books and records within sixty
(60) days of receipt of a Monthly Expense Statement or Annual Expense Statement
as described above, then Subtenant shall have no further right to conduct such a
review or to dispute any Sublease Expense set forth in such Monthly Expense
Statement or Annual Expense Statement, as applicable.
Subtenant shall keep any information gained from its review of
Sublandlord's records confidential and shall not disclose it to any other party,
except as required by law. If requested by Sublandlord, Subtenant shall require
its employees or agents reviewing Sublandlord's records to sign a
confidentiality agreement as a condition of Sublandlord providing Subtenant the
opportunity to inspect under this Paragraph 3.2(h). Notwithstanding anything in
this Paragraph 3.2(h) to the contrary, with regard to Master Lease Expenses,
Sublandlord shall not be required to provide more information to Subtenant than
is offered to Sublandlord.
3.3. GENERALLY. All monetary obligations of Subtenant under this
Sublease shall be deemed rent and shall be referred to herein as "Rent". Rent is
payable without any setoff, deduction, abatement, or offset whatsoever, except
as otherwise expressly provided herein. Acceptance of a payment which is less
than the amount then due shall not be a waiver of Sublandlord's rights to the
balance of such Rent, regardless of Sublandlord's endorsement of any check so
stating. Rent is payable in lawful money of the United States and shall, unless
otherwise provided herein, be paid to Sublandlord at: Ariba, Inc., at the
address shown in the Basic Sublease Information above; or at such other place as
Sublandlord may specify from time to time by written notice to Subtenant.
3.4. LATE PAYMENT. If Subtenant shall fail to pay any Rent so that it is
received within five (5) days (or ten (10) days in the case of Sublease Expenses
only) of the date when payment is due, such unpaid amount shall bear interest
from the due date to the date of payment at the lower of the following rates:
(i) the Agreed Rate and (ii) the maximum rate allowed by applicable usury law.
Subtenant acknowledges that late payment of Rent will cause Sublandlord to incur
costs not contemplated by this Sublease, the exact amounts of which are
extremely difficult and impracticable to fix. Such costs include, without
limitation, processing and accounting charges, and late charges which may be
imposed on Sublandlord by the terms of the Master Lease. Therefore, if any
installment or other payment of Rent due from Subtenant is not received by
Sublandlord within five (5) days of the date when payment is due, Subtenant
shall pay to Sublandlord an additional sum of five percent (5%) of the amount of
the installment. The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Sublandlord will incur by reason of late
payment by Subtenant. Late charges are due and payable on the day incurred and
interest shall accrue on such late charges as described above until payment of
the late charge is made. Acceptance of any interest or late charge shall not
constitute a waiver of Subtenant's default with respect to the overdue amount,
or prevent Sublandlord from exercising any of the other rights and remedies
available to Sublandlord. Subtenant shall further pay to Sublandlord the sum of
Five Hundred Dollars ($500) for any check from Subtenant to Sublandlord which is
returned or not honored by the bank on which it is drawn, which sum the parties
agree is a fair and reasonable estimate of the cost to Sublandlord of handling
such returned or dishonored check
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and the acceptance of which shall not constitute a waiver of Subtenant's default
with respect to the returned or dishonored payment, or prevent Sublandlord from
exercising any of the other rights and remedies available to Sublandlord.
4. SECURITY DEPOSIT. To secure the faithful performance by Subtenant of
all the covenants, conditions and agreements in this Sublease set forth and
contained on the part of Subtenant to be fulfilled, kept, observed and performed
including, but not by way of limitation, such covenants and agreements in this
Sublease which become applicable upon the termination of the same by re-entry or
otherwise, Subtenant shall deposit with Sublandlord a security deposit (the
"Security Deposit"). The initial Security Deposit, in the amount shown in the
Basic Sublease Information, shall be payable within ten (10) business days
following the execution of this Sublease by both parties, and shall be increased
to the amount shown in the Basic Sublease Information prior to the Fourth Floor
Expansion Date.
The Security Deposit may be in the form of cash or an irrevocable standby
letter of credit, as described below. Subtenant agrees that: (a) the Security
Deposit or any portion thereof may be applied to the curing of any Breach under
this Sublease that may exist at the time of application, including any Rent
owing at the end of the Sublease term, without prejudice to any other remedy or
remedies which Sublandlord may have on account thereof; (b) upon such
application Subtenant shall pay to Sublandlord on demand in cash the amount so
applied to restore the Security Deposit to its full amount; (c) should the
Master Lease be assigned by Sublandlord, the Security Deposit or any portion
thereof not previously applied shall be turned over (or assigned) to
Sublandlord's assignee, Sublandlord shall have no further liability with respect
to the Security Deposit and/or its application or return; (d) Sublandlord or its
successor shall not be obligated to hold the Security Deposit as a separate
fund, but on the contrary may commingle the same with its other funds; (e) the
sum deposited or the portion thereof not previously applied shall be returned to
Subtenant without interest following the expiration of the Term of this Sublease
or any renewal or extension thereof, except to the extent reasonably required to
cure any Breach by Subtenant of any of its obligations hereunder (including
without limitation the obligation to return the Premises and the Furniture in
the condition required by this Sublease) and provided that Subtenant has vacated
the Premises and surrendered possession thereof to Sublandlord at the expiration
of the Term or any extension or renewal thereof as provided herein; (f) in the
event that Sublandlord terminates this Sublease or Subtenant's right to
possession by reason of a Breach by Subtenant, Sublandlord may apply the
Security Deposit against damages suffered to the date of such termination and/or
may retain the Security Deposit to apply against such damages as may be suffered
or shall accrue thereafter by reason of Subtenant's Breach; (g) in the event any
bankruptcy, insolvency, reorganization or other creditor-debtor proceedings
shall be instituted by or against Subtenant, or its successors or assigns, the
Security Deposit shall be deemed to be applied first to the payment of any Rent
due Sublandlord for all periods prior to the institution of such proceedings,
and the balance, if any, of the Security Deposit may be retained or paid to
Sublandlord in partial liquidation of Sublandlord's damages.
If Subtenant elects to deposit the Security Deposit by a letter of credit,
such letter of credit shall be an irrevocable, unconditional, standby letter of
credit in a form substantially similar to the form attached hereto as Exhibit H
and incorporated herein (such letter of credit, together with any renewal or
replacement letters of credit delivered or to be delivered by Subtenant under
this Paragraph, shall be referred to herein collectively as the "Letter of
Credit"). The Letter of Credit shall be issued by a national money center bank
with an office in San Francisco, California (the "Issuer"). The final form of
the Letter of Credit, the identity of the Issuer, and the form of any
replacement Letter of Credit shall be acceptable to Sublandlord in its
reasonable discretion. The Letter of Credit shall be for an initial term of not
less than twelve (12) months and shall be maintained in force at all times from
issuance through sixty (60) days following the expiration or earlier termination
of this Sublease. If Subtenant fails at least thirty (30) days prior to the
expiration date of an outstanding Letter of Credit to (i) renew the Letter of
Credit or (ii) deliver to Sublandlord either a replacement Letter of Credit or
cash in the full amount of the Security Deposit required hereunder, such failure
shall be a default under this Sublease (without the requirement of notice)
entitling Sublandlord, in addition to its other remedies, to draw down all or
part of the current Letter of Credit. In the event of such a draw, Sublandlord
shall hold and/or apply the proceeds of the Letter of Credit as a cash Security
Deposit. Sublandlord shall have the right, upon a transfer or assignment of its
rights as landlord under this Sublease, to assign or transfer the Letter of
Credit to such transferee or assignee or to require Subtenant to deliver a
replacement Letter of Credit designating Sublandlord's successor as the
beneficiary, at Sublandlord's sole cost and expense. No draw under the Letter of
Credit shall be deemed a waiver of, or be deemed to
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have cured, any Default by Subtenant under any provision of this Sublease except
to the extent directly applied to cure such Default(s).
Notwithstanding anything herein to the contrary, if either of the following
circumstances arises during the Sublease Term then, within ten business days
following notice from Sublandlord, Subtenant shall increase the amount of the
Security Deposit to an amount equal to two (2) times the then current Security
Deposit amount; provided that if either such circumstance arises prior to the
Fourth Floor Expansion Date, then the Security Deposit increase required to
occur prior to the Fourth Floor Expansion Date (described above) shall be to an
amount twice the amount otherwise required. For purposes of the following
provisions, the term "Financial Report" shall mean any financial statements or
other financial reports of Subtenant (either prepared on a consolidated or
non-consolidated basis) filed with any (i) quarterly report on SEC Form 10-Q,
(ii) annual report filed on SEC Form 10-K, (iii) registration statement filed
under the Securities Act of 1933, or any other filing under the Securities
Exchange Act of 1934, including any current reports on SEC Form 8-K, and any
amendments thereto, or (iv) reports required to be filed with any exchange where
Subtenant's securities are traded.
(1) the aggregate of Subtenant's cash and cash equivalents (as
determined in accordance with accounting principles generally accepted in the
United States of America (USA GAAP)), including without limitation, short-term
and long-term investments that Subtenant has the right to convert immediately
into cash without limitation or other restrictions (collectively, "Subtenant's
Total Available Cash"), as reported in Subtenant's balance sheet contained in
its applicable Financial Report, is less than $100,000,000 at the end of any
fiscal quarter of Subtenant ending during the Sublease Term; or
(2) Subtenant's operations for any fiscal quarter ending during
the Sublease Term result in a Quarterly Cash Burn Rate (as defined below) that,
when projected over the next succeeding eight fiscal quarters, reasonably
demonstrates that the aggregate amount of Subtenant's Total Available Cash as of
the end of such fiscal quarter is less than the amount required to fund
Subtenant's operations during the full period of such eight fiscal quarters at
that Quarterly Cash Burn Rate without Subtenant obtaining additional cash or
other working capital. For the purposes of this Sublease, Subtenant's Quarterly
Cash Burn Rate for any given fiscal quarter shall be calculated by subtracting
Subtenant's Total Available Cash at the end of that fiscal quarter from
Subtenant's Total Available Cash at the end of the fiscal quarter immediately
preceding that quarter.
5. USE.
5.1. USE. Subtenant shall use the Premises for those uses permitted
under the Master Lease ("Agreed Use"), and for no other purpose, without the
prior written consent of Sublandlord (which consent may be withheld in
Sublandlord's reasonable discretion) and the Master Landlord (which consent may
be withheld by Master Landlord pursuant to the terms of Section 5.01 of the
Master Lease). Subtenant's use of the Premises shall be subject to all of the
terms and conditions of the Master Lease relating to use.
5.2. HAZARDOUS MATERIALS.
(a) Reportable Uses Require Consent. The term "Hazardous
Materials" as used in this Sublease shall be defined as in subsection 17.22(a)
of the Master Lease. Subtenant shall not engage in any activity in or on the
Premises which constitutes a Reportable Use (as defined below) of any Hazardous
Materials without the express prior written consent of Sublandlord and timely
compliance at Subtenant's expense with all Applicable Requirements as defined in
Paragraph 5.3. "Reportable Use" shall mean (i) the installation or use of any
above or below ground storage tank, (ii) the generation, possession, storage,
use, transportation, or disposal of any Hazardous Materials that requires a
permit from, or with respect to which a report, notice, registration or business
plan is required to be filed with, any governmental authority, and/or (iii) the
presence at the Premises of any Hazardous Materials with respect to which any
Applicable Requirements requires that a notice be given to persons entering or
occupying the Premises or neighboring properties. Notwithstanding the foregoing,
subject to consent of Master Landlord and in compliance with all Applicable
Requirements Subtenant may use and/or store any ordinary
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and customary materials reasonably required to be used in the normal course of
the Agreed Use, so long as such use is not a Reportable Use and such use does
not expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose Sublandlord to any liability therefor. In
addition, Sublandlord may condition its consent to any Reportable Use upon
receiving written consent of Master Landlord and such additional assurances as
Sublandlord reasonably deems necessary to protect itself, the public, the
Premises and/or the environment against damage, contamination, injury and/or
liability, including, but not limited to, the installation (and removal on or
before Sublease expiration or termination) of protective modifications (such as
concrete encasements) and/or increasing the Security Deposit.
(b) Duty to Inform Sublandlord. If Subtenant knows, or has
reasonable cause to believe, that any Hazardous Materials have come to be
located in, on, under or about the Premises, other than as previously consented
to by Sublandlord, Subtenant shall immediately give written notice of such fact
to Sublandlord, and provide Sublandlord with a copy of any report, notice, claim
or other documentation which it has concerning the presence of such Hazardous
Materials.
(c) Subtenant Remediation. Subtenant shall not cause or permit any
Hazardous Materials to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system). To the
extent that any contamination in violation of Environmental Laws (as defined in
Section 17.22(a) of the Master Lease) was caused or materially contributed to by
Subtenant, its agents, employees, invitees, vendors, contractors, guests or
visitors, or results from any Hazardous Materials brought onto the Premises
during the term of this Sublease by or for Subtenant or any third party,
Subtenant shall promptly, at Subtenant's expense, take all investigatory and/or
remedial action reasonably recommended, whether or not formally ordered or
required, for (i) the cleanup of such contamination, and (ii) the maintenance,
security and/or monitoring of the Premises or neighboring properties with
respect to such contamination.
(d) Indemnification. Subtenant shall indemnify, defend and hold
Sublandlord and Master Landlord, their agents, employees, Lenders (as defined
with respect to Sublandlord in Paragraph 29.1 of the Sublease and as used by
Master Landlord in the Master Lease), and ground lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or involving any Hazardous Materials brought onto the Project during the term
(and any extension thereof) of this Sublease in violation of Environmental Laws
or Master Lease by Subtenant, its agents, employees, invitees, vendors,
contractors, guests or visitors. Subtenant's obligations shall include, but are
not limited to, the effects of any contamination or injury to person, property
or the environment created or suffered by Subtenant, and the cost of
investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Sublease. No termination,
cancellation or release agreement entered into by Sublandlord and Subtenant
shall release Subtenant from its obligations under this Sublease with respect to
Hazardous Materials, unless specifically so agreed by Sublandlord in writing at
the time of such agreement.
Sublandlord shall indemnify, defend and hold Subtenant, its agents and
employees, harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, claims, expenses, penalties, and attorneys' and
consultants' fees arising out of or involving any Hazardous Materials brought
onto the Project during the term (and any extension thereof) of this Sublease in
violation of Environmental Laws or Master Lease by Sublandlord, its agents,
employees, invitees, vendors, contractors, guests or visitors. Sublandlord's
obligations shall include, but are not limited to, the effects of any
contamination or injury to person, property or the environment created or
suffered by Sublandlord, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of
this Sublease. No termination, cancellation or release agreement entered into by
Sublandlord and Subtenant shall release Sublandlord from its obligations under
this Sublease with respect to Hazardous Materials, unless specifically so agreed
by Subtenant in writing at the time of such agreement.
(e) Disclosure. Sublandlord represents that to the best of
Sublandlord's knowledge it has provided Subtenant with a description of the
Hazardous Materials on or beneath the Project as of the date of the Master
Lease, contained in the reports listed on Exhibit I to the Master Lease (the
Master Lease and all of its exhibits being Exhibit A to this Sublease) and such
further documents listed on Exhibit L attached to this Sublease (collectively,
the "Environmental Reports"). Subtenant acknowledges that it has received all of
the Environmental Reports and that in providing the
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Environmental Reports, Sublandlord has satisfied its obligations of disclosure
pursuant to California Health & Safety Code Section 25359.7 which requires:
"Any owner of nonresidential real property who knows, or
has reasonable cause to believe, that any release of
hazardous substances has come to be located on or beneath
that real property shall, prior to the sale, lease or
rental of the real property by that owner, give written
notice of that condition to the buyer, lessee or renter
of the real property."
5.3. SUBTENANT'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise expressly provided in this Sublease, Subtenant shall, at Subtenant's
sole expense, fully, diligently and in a timely manner, comply with all
applicable laws, covenants or restrictions of record, regulations, ordinances,
and building codes ("Applicable Requirements"), the requirements of any
applicable fire insurance underwriter or rating bureau, and the recommendations
of Sublandlord's engineers and/or consultants of which Subtenant has been
notified in writing which relate in any manner to the Premises or the Agreed Use
of the Premises, without regard to whether said requirements are now in effect
or become effective later. Subtenant shall, within 10 days after receipt of
Sublandlord's written request, provide Sublandlord with copies of all permits
and other documents, and other information evidencing Subtenant's compliance
with any Applicable Requirements specified by Sublandlord, and shall immediately
upon receipt, notify Sublandlord in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Subtenant or the
Premises to comply with any Applicable Requirements.
Subtenant shall have no obligations whatsoever with respect to any
Hazardous Materials on or beneath the Project as of the Sublease Commencement
Date, whether known or not known as of the Sublease Commencement Date, except to
the extent an affirmative act of Subtenant or its agents, employees, invitees,
vendors, contractors, guests, or visitors, exacerbates or aggravates such
existing Hazardous Material condition.
5.4. INSPECTION; COMPLIANCE. Sublandlord and any of Sublandlord's
Lenders (as defined in Paragraph 29.1) and consultants of which Subtenant has
been notified in writing shall have the right to enter into Premises at any
time, in the case of an emergency, and otherwise at reasonable times and upon
reasonable notice accompanied by an employee of Subtenant and in compliance with
Subtenant's reasonable security requirements, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Subtenant with this
Sublease. The cost of any such inspections shall be paid by Sublandlord, unless
a violation of Applicable Requirements or a contamination caused or materially
contributed to by Subtenant, its agents, employees, invitees, vendors,
contractors, guests or visitors, is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority based on a belief
of the existence of such contamination. In such case, Subtenant shall upon
request reimburse Sublandlord for the cost of such inspection, so long as such
inspection is reasonably related to the violation or contamination.
6. DELIVERY OF POSSESSION.
6.1. CONDITION. Subject to Paragraph 6.2 below, Sublandlord shall tender
possession of the Premises to Subtenant broom clean and free of debris.
Sublandlord represents that the Premises' roof, structural components,
elevators, heating, ventilation and air conditioning ("HVAC"), plumbing and
electrical systems, and the parking areas and Common Area lighting, are
operational and in good condition and comply with the Applicable Requirements as
of the Sublease Commencement Date, except as disclosed in the Architectural and
Engineering Site Investigation Reports for Ariba Buildings 3 and 4 dated January
18, 2002 and February 8, 2002, respectively, prepared by Rumsey Engineers and
Facilicorp (the "Site Reports"), which Subtenant acknowledges receiving a copy
of. Except as expressly provided in this Sublease, Sublandlord specifically
disclaims any and all representations and warranties, express or implied, oral
or written, associated with the Premises, including but not limited to those
concerning habitability, safety, suitability or fitness for Subtenant's intended
purposes. Except for those items described in the Site Reports, in the event
that any components of the Premises' roof, structural components, elevators,
heating, ventilation and air conditioning ("HVAC"),
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plumbing and electrical systems are not operational and in good condition or do
not comply with the Applicable Requirements as of the Sublease Commencement Date
("Non-conforming Matter"), then Sublandlord shall have no liability except as
follows:
(a) Sublandlord agrees to use commercially reasonable efforts to
enforce its rights against third parties, including the Master Landlord,
insurance carriers and contractors involved with construction of the Project,
for the repair of such Non-conforming Matter.
(b) To the extent that the cost of repairing or correcting any
Non-conforming Matter is not paid by a third party (including Master Landlord),
such cost shall be treated as follows: Up to a cumulative $1 Million, the cost
shall be a Building Expense and Subtenant shall bear sole responsibility for
such cost. For cumulative costs exceeding $1 Million up to $5 Million, fifty
percent (50%) of the portion of the cost over $1 Million shall be a Building
Expense, with the remaining 50% to be paid by Sublandlord. If the cumulative
costs to repair Non-conforming Matters exceed $5 Million, then Sublandlord and
Subtenant shall each have the right to elect to pay the portion of the cost over
$5 Million, and if neither party elects to pay such costs, then either party may
elect to terminate this Sublease upon ninety (90) days advance written notice to
the other party.
6.2. COMPLIANCE. Sublandlord makes no representation or warranty
whatsoever with respect to compliance of the Premises with the Applicable
Requirements except as expressly provided herein. If Subtenant knows, or has
reasonable cause to believe, that any violation of an Applicable Requirement
exists, Subtenant shall immediately give written notice of such fact to
Sublandlord, and provide Sublandlord with a copy of any report, notice, claim or
other documentation which it has concerning such violation or possible
violation. With respect to any violation of the Applicable Requirements
currently in effect which are not Non-conforming Matters addressed by Paragraph
6.1, Subtenant shall be responsible for all costs of bringing the Premises into
compliance. Subject to allocation of costs as set forth below, performance of
the work necessary to bring the Premises into compliance shall be the
responsibility of Subtenant if Sublandlord so elects. Subtenant is responsible
for determining whether or not the Applicable Requirements, and especially the
zoning, are appropriate for Subtenant's intended use, and acknowledges that past
uses of the Premises may no longer be allowed. If the Applicable Requirements
are hereafter changed so as to require during the term of this Sublease the
construction of an addition to or an alteration of the Project, the remediation
of any Hazardous Materials not known as of the Sublease Commencement Date (if
the responsibility of Sublandlord under the Master Lease but not caused by
Sublandlord), or the reinforcement or other physical modification of the Project
("Capital Expenditure"), then Sublandlord and Subtenant shall allocate the cost
of such work as follows:
(a) Subject to Paragraph 6.2(c) below, if such Capital
Expenditures are required as a result of the specific and unique use of the
Premises by Subtenant as compared with uses by tenants in general, Subtenant
shall be fully responsible for the cost thereof (except for any Capital
Expenditures not actually required as a result of Subtenant changing such
specific and unique use).
(b) If such Capital Expenditure is not the result of the specific
and unique use of the Premises by Subtenant (such as, governmentally mandated
seismic modifications), then Sublandlord and Subtenant shall allocate the
obligation to pay for the portion of such costs reasonably attributable to the
Premises, amortized over the remaining term of the Master Lease (including
interest on the unamortized balance as is then reasonable in the judgment of
Sublandlord's accountants).
(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Subtenant as a result of an actual or proposed change in use from that
contemplated as of the date of execution of this Sublease, change in intensity
of use from that contemplated as of the date of execution of this Sublease, or
modification to the Premises then, and in that event, Subtenant shall be fully
responsible for the cost thereof, and Subtenant shall not have any right to
terminate this Sublease.
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6.3. ACKNOWLEDGEMENTS. Subtenant acknowledges that Subtenant has made
such investigation as it deems necessary with reference to the physical
condition of the Property and assumes all responsibility therefor (except as
expressly provided in Paragraph 6.1 and 6.2) as the same relate to its occupancy
of the Premises, and Sublandlord has not made any oral or written
representations or warranties with respect to said matters other than as set
forth in this Sublease.
6.4. SUBTENANT'S WORK. Upon receiving possession of the Premises,
Subtenant shall be allowed to construct, at its sole cost and expense, certain
additions, alterations and improvements in the Premises ("Subtenant's Work") on
the terms and conditions contained in the Work Letter attached hereto as Exhibit
I.
7. UTILITIES AND SERVICES.
7.1. STANDARD UTILITIES AND SERVICES. Subject to applicable government
rules, regulations, and guidelines and the rules or actions of the utility
furnishing the service, and except as provided in Paragraph 7.5 below,
Sublandlord shall provide the utilities and services described in this Paragraph
7.1 on all days during the term of this Sublease, unless otherwise stated in
this Sublease. The cost of all utilities and services described in this
Paragraph 7 shall be reimbursed to Sublandlord as Building Expenses or Project
Operating Expenses, as applicable, except as otherwise expressly provided.
(a) Heating and Air-Conditioning; Building Hours; Subtenant
Access. Subject to Paragraph 7.1(g) below, Sublandlord shall provide heating and
air-conditioning when necessary for normal comfort for normal office use in the
Premises, at the hours and times selected by Subtenant in its reasonable
discretion, provided that in the event that Subtenant requires heating and/or
air-conditioning on a frequency substantially in excess of normal business
hours, such excess use shall be treated as overstandard use as set forth in
Paragraph 7.1(f) hereof. Sublandlord shall provide access to the lobby of any
multi-tenant Buildings occupied by Subtenant (not including Building Three, in
which Sublandlord retains possession of Sublandlord's Server Room but for which
Subtenant controls the lobby area) for use by Subtenant's invitees on Mondays
through Fridays from 8 a.m. through 5 p.m., excluding Holidays ("Building
Hours"). Subtenant shall have access to the Building Three Premises twenty-four
(24) hours per day, seven (7) days per week, and access to Subtenant's Shipping
Area during Building Hours; provided, however, that if Subtenant constructs a
wall ("Shipping Area Wall") to segregate the space being retained by Sublandlord
adjacent to Subtenant's Shipping Area from outside access, then Subtenant shall
have access to Subtenant's Shipping Area twenty-four (24) hours per day, seven
(7) days per week upon completion of construction of the Shipping Area Wall. The
location for construction of the Shipping Area Wall is indicated by a dotted
line on Exhibit B. The Shipping Area Wall shall prevent any and all outside
access to Sublandlord's retained area, except through a door of at least 60-inch
by 8-foot size to be constructed where indicated on Exhibit B and which door
shall be completely controlled by Sublandlord upon completion. The Shipping Area
Wall shall be constructed to Sublandlord's sole satisfaction, at Subtenant's
sole cost, in accordance with all Sublease requirements.
(b) Electricity and Gas. Sublandlord shall provide gas and
electricity for lighting and power in the Premises twenty-four (24) hours per
day, seven (7) days per week, if:
(i) The connected electrical load for lighting does not
exceed an average of one (1) watt per square foot of the Premises during the
Building Hours on a monthly basis; and
(ii) The connected electrical load (encompassing HVAC and
office "plug load" meaning the electrical receptacles/outlets where Subtenant
may run electrical office equipment and machinery) for all other power purposes
does not exceed an average of seven (7) watts per square foot of the Premises
during Building Hours on a monthly basis.
Except as exists in the Premises as of the Sublease Date, or as mutually agreed
in writing by the parties, electricity for Subtenant's lighting and other power
purposes shall be at approximately one-hundred and ten (110) volt, and no
electrical receptacle/outlet in the Premises for the supply of power shall
require a current capacity exceeding 110 volts AC/twenty (20) amperes; provided
that with respect to Subtenant's Server Room and the lab areas to be built as
indicated on Subtenant's Conceptual Plans attached to the Work Letter (Exhibit
I), electricity for Subtenant's lighting and other power
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purposes shall be at approximately two hundred and eight (208) volt, and no
electrical receptacle/outlet for the supply of power shall require a current
capacity exceeding 208 volts AC/twenty (20) amperes. Subtenant shall replace
lamps, starters, and ballasts for all Building-standard and
non-Building-standard lighting fixtures within the Premises with parts and
equipment of the same make and model and at Subtenant's expense. Sublandlord
expressly reserves the right to select the electricity providers for the
Buildings and/or the Project.
(c) Water; Trash Disposal. Sublandlord shall provide water from
the regular Building outlets for drinking, lavatory, and toilet purposes.
Sublandlord shall provide regular trash disposal.
(d) Janitorial Services. Sublandlord shall provide janitorial
services in and about the Premises on Mondays through Fridays, except on
Holidays, to a standard consistent with other Class A office buildings in the
general vicinity of the Project. Sublandlord shall not be required to provide
janitorial services to above-standard improvements installed by Subtenant in the
Premises. Subtenant may procure additional janitorial services for the Premises,
provided that such services shall be procured solely from Sublandlord's
designated janitorial service, under a separate contract directly between
Subtenant and such janitorial service, at Subtenant's sole and exclusive cost.
(e) Elevator. Sublandlord shall provide elevator service for the
use of Subtenant in Buildings in which it occupies space on the second or higher
floor 24 hours a day, 7 days a week, year-round (except for non-operation for
maintenance and safety purposes). Subtenant shall not use the elevators to
access areas of the Buildings occupied by other tenants and Sublandlord reserves
the right to take appropriate measures to restrict such access. Subtenant shall
release Sublandlord and shall indemnify, protect, defend, and hold Sublandlord
harmless from all liabilities, claims, costs, expenses, and damages arising
therefrom or in connection with Subtenant's use and the use of its employees,
contractors, suppliers, customers, and invitees.
(f) Overstandard Subtenant Use. Except with respect to the
Building Three Premises, Subtenant shall not, without Sublandlord's prior
written consent, use heat-generating machines, machines other than normal
fractional horsepower office machines, or equipment or lighting other than
building standard lights in the Premises that may affect the temperature
otherwise maintained by the air-conditioning system or increase the water
normally furnished to the Premises by Sublandlord under this Paragraph.
Furthermore, Subtenant shall not use any machines or equipment where such use is
in violation of the Master Lease.
If such consent is given, Sublandlord shall have the right to
install supplementary air-conditioning units or other facilities in the
Premises, including supplementary or additional metering devices. On billing by
Sublandlord, Subtenant shall pay the cost for such supplementary facilities,
including the cost of (a) installation, operation, and maintenance; (b)
increased wear and tear on existing equipment; and (c) other similar charges.
If Subtenant uses water, electricity, heat, or
air-conditioning in excess of that agreed upon under this Paragraph (as a
result, for example, of extended hours of operation, heavier use of duplicating,
computer, telecommunications, or other equipment in excess of the normal use for
general office uses in the Project, or a density of workers in excess of the
normal density (which the parties agree is one person per 250 square feet of
rentable space) for general office uses in the Project) Subtenant shall pay to
Sublandlord, on billing, the cost of (a) the excess service; (b) installation,
operation, and maintenance of equipment installed to supply the excess service;
and (c) increased wear and tear on existing equipment caused by Subtenant's
excess consumption. Sublandlord may install devices to separately meter any
increased use or reasonably and equitably estimate the cost of such increased
use. On demand, Subtenant shall pay the increased cost directly to Sublandlord,
including the cost of the additional metering devices.
Subtenant's use of electricity shall never exceed the capacity
of the feeders serving the Premises or the risers or wiring installation. If
heat, ventilation, or air-conditioning are used on the Premises during hours
other than those for which Sublandlord is obligated to supply such utilities
under this Paragraph, Sublandlord shall supply such utilities to Subtenant at an
hourly cost to Subtenant as Sublandlord shall from time to time establish.
Amounts payable by Subtenant to Sublandlord under this Paragraph 7.7 for use of
additional utilities shall be payable in their entirety by
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Subtenant upon invoicing by Sublandlord and are excluded from Operating
Expenses.
(g) Interruption of Utilities. Subtenant agrees that Sublandlord
shall not be liable for damages, by abatement of Rent or otherwise, for failure
to furnish or delay in furnishing any utility or service (including telephone
and telecommunication services) or for diminution in the quality or quantity of
any utility or service when the failure, delay, or diminution is entirely or
partially caused by:
(i) Breakage, repairs, replacements, or improvements,
provided repairs, replacements and improvements are undertaken in a
reasonable time and manner;
(ii) Strike, lockout, or other labor trouble;
(iii) Inability to secure electricity, gas, water, or other
fuel at the Building;
(iv) Accident or casualty;
(v) Act or default of Subtenant or other parties; or
(vi) Any other cause beyond Sublandlord's reasonable
control.
Such failure, delay, or diminution shall not be considered to constitute an
eviction or a disturbance of Subtenant's use and possession of the Premises or
relieve Subtenant from paying Rent or performing any of its obligations under
this Sublease.
Sublandlord shall not be liable under any circumstances for a loss of or
injury to property, for personal injury or death, or for injury to or
interference with Subtenant's business, including loss of profits through, in
connection with, or incidental to a failure to furnish any of the utilities or
services under this Paragraph 7, unless such failure is caused by Sublandlord's
active negligence or willful misconduct. Sublandlord may comply with mandatory
or voluntary controls or guidelines promulgated by any government entity
relating to the use or conservation of energy, water, gas, light, or electricity
or the reduction of automobile or other emissions without creating any liability
of Sublandlord to Subtenant under this Sublease as long as compliance with
voluntary controls or guidelines does not materially and unreasonably interfere
with Subtenant's use of the Premises.
(h) Utility Providers. Sublandlord may, in Sublandlord's sole and
absolute discretion, at any time and from time to time, contract, or require
Subtenant to contract, for utility services (including generation, transmission,
or delivery of the utility service) with utility service providers of
Sublandlord's choosing, subject to Subtenant's right to select its
telecommunications providers. Subtenant shall fully cooperate with Sublandlord
and any utility service provider selected by Sublandlord. Subtenant shall permit
Sublandlord and the utility service provider to have reasonable access (subject
to the provisions of Paragraph 32) to the Premises and the utility equipment
serving the Premises, including lines, feeders, risers, wiring, pipes, and
meters. Subtenant shall either pay or reimburse Sublandlord for its share of
costs associated with any change of utility service, including the cost of any
new utility equipment, within ten (10) days after Sublandlord's written demand
for payment or reimbursement. Under no circumstances shall Sublandlord be
responsible or liable for any loss, damage, or expense that Subtenant may incur
as a result of any change of utility service, including any change that makes
the utility supplied less suitable for Subtenant's needs, or for any failure,
interference, or defect in any utility service. No such change, failure,
interference, or defect shall constitute an actual or constructive eviction of
Subtenant, or entitle Subtenant to any abatement of Rent, or relieve Subtenant
from any of Subtenant's obligations under this Sublease. Sublandlord agrees to
consider any input received from Subtenant in good faith with regard to changes
in utility service.
7.2. TELECOMMUNICATIONS. Neither Subtenant nor its contractors,
representatives, or service providers shall, without Sublandlord's prior written
consent (which consent shall not be unreasonably withheld), install, maintain,
operate, alter, repair, or replace any wire, cable, conduit, antenna, satellite
dish or other facility or equipment for use in connection
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with any telephone, television, telecommunications, computer, Internet, or other
communications or electronic systems, services or equipment (which systems,
services, and equipment are referred to collectively as "Telecommunications
Equipment") in, on, or about any Building or the roofs or exterior walls.
Without limiting the generality of the foregoing, Sublandlord shall have the
right to limit the number of carriers, vendors, or other operators providing
Telecommunications Equipment in or to the Project, as deemed reasonably
necessary or appropriate by Sublandlord for the orderly and efficient management
and operation of the Project. Any determination made by Sublandlord under this
Paragraph shall be made in accordance with Sublandlord's sole discretion,
provided, however, that with regard to any request by Subtenant to install
Telecommunications Equipment on the roof of a Building, Subtenant agrees that
Sublandlord may, without limitation, condition its consent on (i) Subtenant's
payment of rent for Subtenant's use of such roof space, at a per square foot
rate equivalent to Base Rent per square foot of the Premises , and (ii) the
installation by Subtenant, at its sole cost and expense, of a structural
platform and/or access walkway to protect the roof from damage from the
placement of and access to such Telecommunications Equipment. Sublandlord may
also require (i) that any such work on or involving the roof (and including,
without limitation, any roof penetrations approved by Sublandlord) be performed,
at Subtenant's cost, by a contractor designated or approved by Sublandlord; (ii)
Subtenant's obtaining and paying for all costs associated with obtaining proper
clearances for personnel involved in erecting, operating, or maintaining such
Telecommunications Equipment from the Department of the Air Force or Onizuka Air
Station; (iii) Subtenant's obtaining Onizuka Air Station approval to erect any
Radio Frequency Emitters, antenna towers, or antenna arrays so as to avoid radio
frequency interference; (iv) Subtenant's compliance with any additional
requirement of the Department of the Air Force and/or Onizuka Air Station; and
(v) proper evidence of compliance with all requirements of the Master Lease. In
addition, if Sublandlord determines that the riser or telecommunications closet
space in a Building is inadequate to accommodate any Telecommunications
Equipment proposed by Subtenant along with the existing and/or future needs of
other occupants and users of the Building and/or the Project, Sublandlord may
condition Sublandlord's approval of Subtenant's Telecommunications Equipment on
the construction of additional riser or telecommunications closet space as
designated by Sublandlord at Subtenant's expense.
Any installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment by or for Subtenant shall be subject to all of the
requirements and provisions of this Sublease and the Master Lease, and shall not
interfere with the operation (including, without limitation, transmissions, or
reception) of any other Telecommunications Equipment located in the Project.
Subtenant acknowledges that there is limited space and facilities in the
Buildings to accommodate Telecommunications Equipment, and agrees to reasonably
cooperate with Sublandlord and with other providers and users of
Telecommunications Equipment to share the available space and facilities and to
coordinate the efficient collocation of Telecommunications Equipment in the
Project. Access to and use of space within conduit, utility closets, risers,
raceways, switching rooms, the roof, and other facilities in the Buildings for
the installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment shall be subject to Sublandlord's reasonable
approval and to such rules and regulations as may be promulgated by Sublandlord
from time to time. Subtenant shall repair any damage caused by Subtenant's
installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment, and shall indemnify, protect, defend, and hold
Sublandlord harmless from all liabilities, claims, costs, expenses, and damages
arising therefrom or in connection therewith, including, without limitation: (i)
any claims by other tenants of the Project or other third parties that
Subtenant's installation, maintenance, operation, alteration, repair, or
replacement of Telecommunications Equipment has caused interference or
interruption with the operation of other Telecommunications Equipment; and (ii)
any voiding of or other effect that Subtenant's installation, maintenance,
operation, alteration, repair, or replacement of Telecommunications Equipment
may have on any warranty with respect to the roof or other portions of the
Project. Sublandlord shall not be liable for any damage to or interference with
Subtenant's business or any loss of income from it, or for loss of or damage to
Subtenant's Telecommunications Equipment caused by or resulting from any damage
to or interference with Subtenant's Telecommunications Equipment, or the
operation of it, including without limitation, damage, or interference caused by
or resulting from the installation, maintenance, operation, alteration, repair,
or replacement of other Telecommunications Equipment in the Project, whether by
or for Sublandlord, other tenants of the Project, or other third parties, and
Subtenant waives all claims against Sublandlord for it, except that Sublandlord
shall indemnify, protect, defend, and hold Subtenant harmless from all
liabilities, claims, costs, expenses, and damages (excluding lost profits and
other consequential damages) to the extent arising out of or in connection with
the active negligence or willful acts of Sublandlord or its
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agents, employees, or representatives. Sublandlord's approval of Subtenant's
installation of any Telecommunications Equipment shall not constitute a
representation that any such Telecommunications Equipment will function
effectively in or on the Building.
7.3. UTILITY ADDITIONS. Sublandlord reserves the right to install new or
additional utility facilities throughout the Project for the benefit of
Sublandlord or Subtenant, or any other tenant of the Project, including without
limitation such utilities as plumbing, electrical systems, security systems,
communication systems, and fire protection and detection systems.
7.4. SECURITY.
(a) Common/Amenity Areas. Sublandlord shall contract with a third
party security company ("Security Company") for twenty-four (24) hour manned
security services for the Common Areas and the Amenity Areas, at such levels of
protection, in such a manner, and at such times as consistent with the level of
security provided at other Class A campus/office building projects in the City
of Sunnyvale, the cost of which shall be included in Project Operating Expenses
or Building Expenses, as applicable. Such services may include: guard patrol,
stationing of a security officer in multi-tenant Building lobbies during
Building Hours, monitoring of the access control system, issuing and programming
access control cards, rotation and storage of closed circuit television tapes,
and coordination of responses to fire and medical emergencies.
(b) Premises. Sublandlord shall contract for a base level of
security services as follows: (i) guard service provided by the Security Company
selected and hired by Sublandlord to manage Project security, and (ii) the
security equipment serving the Premises, including the control of access
thereto, as part of the integrated Project security system ("Security System"),
which system will be centrally-operated by the Security Company and includes
monitoring of the access control system, issuing and programming access control
cards, rotation and storage of closed circuit television tapes. Such Security
System shall allow for Subtenant to control access to the Premises in its sole
discretion, subject to Paragraph 32 and Master Landlord's rights under the
Master Lease. Sublandlord makes no representation that the base level of
security services specified are adequate to protect Subtenant's property,
business operations or persons in the Premises.
Subtenant shall be required to comply with and shall cause Subtenant's
employees, agents, independent contractors, guests and invitees to comply with
all procedures and policies required by the Security Company or Sublandlord in
connection with Project security of which Subtenant is provided written notice.
Subtenant acknowledges that the security protection provided to the Premises by
the Security Company is by its nature a shared service for the benefit of all
Project tenants and that Premises security may be adversely impacted as a result
of simultaneous fire and medical emergencies taking place in separate areas of
the Project, and that Subtenant shall have no claim for reduction of payments
required under this Paragraph 7.12 or any other sort of claim in connection with
any such circumstance.
(c) Additional Security Services. Subtenant may obtain additional
security services for the Premises, provided that such services shall be
obtained solely from the Security Company engaged by Sublandlord for Project
security, under a separate contract directly between Subtenant and Security
Company, at Subtenant's sole and exclusive cost.
(d) No Warranty; Indemnity and Release. Sublandlord makes no
warranty or representation of any kind whatsoever with regard to the Security
Company or the Security System or the services provided under this Paragraph
7.4, including without limitation their quality, adequacy, efficacy or
appropriateness. Provided Sublandlord has contracted with a third party security
company for services as provided in Paragraphs 7.4(a) and (b), Subtenant hereby
releases Sublandlord, Sublandlord's lenders, partners, members, property
management company (if other than Sublandlord), agents, directors, officers,
employees, representatives, contractors (specifically excluding Security
Company), successors and assigns and each of their respective partners, members,
directors, heirs, employees, representatives, agents, contractors, heirs,
successors and assigns, Master Landlord, any ground lessor, partners and
Lenders, from and against any and all liabilities, claims, liens, damages,
demands, penalties, costs, losses, judgments, charges and expenses (including
reasonable attorneys' and consultants' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision) of any kind arising from or in anyway related to,
directly or indirectly, involving, or in
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connection with the Security System as provided to Subtenant under this
Paragraph 7.4, or the security services as provided to Subtenant by the Security
Company under this Paragraph 7.4.
7.5. BUILDING THREE.
Notwithstanding the other provisions of this Paragraph 7, Subtenant shall
be fully responsible and shall directly contract with third party providers as
necessary for the following services in connection with Building Three:
(a) Janitorial Services. Subtenant shall provide janitorial
services in and about the Building Three Premises (including carpet cleaning) to
a standard consistent with other Class A office buildings in the general
vicinity of the Project. Subtenant shall procure such janitorial services for
the Building Three Premises from Sublandlord's designated janitorial service,
under a separate contract directly between Subtenant and such janitorial
service.
(b) Electricity and Gas. Subtenant shall directly contract with
third party providers for the provision of electricity and gas services to the
Building Three Premises. With respect to electrical services:
The connected electrical load for lighting shall not exceed an
average of one (1) watt per square foot of the Premises during the Building
Hours on a monthly basis.
The connected electrical load (encompassing HVAC and office
"plug load" meaning the electrical receptacles/outlets where Subtenant may run
electrical office equipment and machinery) for all other power purposes does not
exceed an average of seven (7) watts per square foot of the Premises during
Building Hours on a monthly basis.
Except as exists in the Building Three Premises as of the
Sublease Date, or as mutually agreed by the parties, electricity for Subtenant's
lighting and other power purposes shall be at approximately one-hundred and ten
(110) volt, and no electrical receptacle/outlet in the Premises for the supply
of power shall require a current capacity exceeding 110 volts AC/twenty (20)
amperes. Subtenant shall replace lamps, starters, and ballasts for all
Building-standard and non-Building-standard lighting fixtures within the
Building Three Premises with parts and equipment of the same make and model and
at Subtenant's expense.
Subtenant's use of electricity shall never exceed the capacity
of the feeders serving the Building Three Premises or the risers or wiring
installation.
(c) Water; Trash Disposal. Subtenant shall directly contract with
third party providers for the provision of domestic water from the regular
Building Three outlets for drinking, lavatory, and toilet purposes and for the
Building Three fire line. Subtenant shall directly contract with third party
providers for regular trash disposal for Building Three.
(d) Elevators. Subtenant shall provide maintenance and repair of
the Building Three elevators and shall obtain and maintain all permits necessary
therefor.
(e) Interior Pest Control. Subtenant shall directly contract with
third party providers for interior pest control services for Building Three.
8. MAINTENANCE AND REPAIRS; UTILITY INSTALLATIONS, TRADE FIXTURES AND
ALTERATIONS.
8.1. SUBLANDLORD'S OBLIGATIONS. In accordance with the Master Lease, and
except as otherwise provided herein, Sublandlord shall keep the Project, and
Common Areas (except to the extent Master Landlord is responsible for
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the Outside Areas under the Master Lease), in good condition and repair;
provided, however, Sublandlord shall not be obligated to paint, repair, or
replace wall coverings, or to repair or replace any improvements that are not
ordinarily a part of the Buildings or are above then Building standards, and
provided that Subtenant shall maintain the Premises in good condition and
repair, ordinary wear and tear excepted. For all purposes under this Sublease,
improvements that are in existence as of the date of the execution of this
Sublease shall be considered ordinarily a part of the Buildings and not above
Building standards. Except for costs made the sole responsibility of Subtenant
under other provisions of this Sublease, the costs pertaining to Sublandlord's
obligations under this Paragraph 8.1 are Operating Expenses. Except as otherwise
specifically provided herein, there shall be no abatement of rent or liability
to Subtenant on account of any injury or interference with Subtenant's business
with respect to any improvements, alterations or repairs made by Sublandlord to
the Project or any part thereof, except as may be caused by the active
negligence or willful misconduct of Sublandlord. Subtenant expressly waives the
benefits of any statute now or hereafter in effect which would otherwise afford
Subtenant the right to make repairs at Sublandlord's expense or to terminate
this Sublease because of Sublandlord's failure to keep the Premises in good
order, condition and repair.
8.2. SUBTENANT'S OBLIGATIONS. Notwithstanding the designation of the
costs of Sublandlord's obligation to keep the Premises in good condition and
repair as Operating Expenses, Subtenant shall be solely responsible for payment
of the cost therefor to Sublandlord as additional rent for that portion of the
cost of any maintenance and repair of the Premises, or any equipment (wherever
located) that serves only Subtenant or the Premises, to the extent such cost is
attributable to causes beyond normal wear and tear. Subtenant shall , at its
sole cost, maintain and repair the Building Three Premises building mechanical
systems (except the HVAC system), including without limitation, the plumbing
system and the electrical and lighting system, the elevators, the windows and
plate glass, in good order, condition and repair. Subtenant shall retain a
licensed elevator repair and maintenance contractor to maintain and repair the
elevator. Subtenant's shall also be required to keep the interior of the
Premises in good order, condition and repair, including without limitation (i)
routine repair and maintenance (including minor changes to electrical, minor
painting, and minor interior repairs and maintenance on such items as ceiling
tiles and door handles, plumbing repair, light bulb replacement, and overhead
screen repairs), (ii) sole responsibility for painting, repair, and replacement
of wall coverings and window coverings (window coverings must meet the
requirements of Exhibit C attached to the Master Lease), and (iii) repair and
replacement of Subtenant Owned Alterations. Subtenant shall perform minor
(tenant improvements) modifications, e.g., installation of additional security
card readers and moving air conditioning vents. Sublandlord may, at its option,
upon reasonable notice, elect to have Subtenant perform any particular such
maintenance or repairs the cost of which is Subtenant's sole responsibility
hereunder. Subtenant shall be responsible for all ordinary expenses in
connection with the use of the Furniture during the term of this Sublease,
including the cost of keeping the Furniture in good condition and repair,
ordinary wear and tear excepted. Rent under this Sublease shall not be prorated
or abated while any item of Furniture is being serviced or repaired. Sublandlord
shall not be under any liability or obligation in any manner to provide service,
maintenance, repairs or parts for the Furniture. At the reasonable request of
Sublandlord, Subtenant shall furnish proof of Furniture maintenance to the
reasonable satisfaction of Sublandlord. Subtenant may not materially alter or
modify the Furniture without the prior written consent of Sublandlord, which
consent may be granted or withheld at Sublandlord's reasonable discretion. Any
part installed in connection with maintenance service or which cannot be removed
without damaging the Furniture shall become the property of Sublandlord.
8.3. UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) Definitions. The term "Utility Installations" refers to all
floor and window coverings, air lines, power panels, electrical distribution,
security and fire protection systems, communication systems, lighting fixtures,
HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade
Fixtures" shall mean Subtenant's machinery and equipment that can be removed
without doing material damage to the Premises. The term "Alterations" shall mean
any modification of the improvements, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. "Subtenant Owned Alterations and/or
Utility Installations" are defined as Alterations and/or Utility Installations
made by Subtenant that are not yet owned by Sublandlord pursuant to Paragraph
8.4(a).
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(b) Consent. Subtenant shall not make any Alterations or Utility
Installations to the Premises without Sublandlord's prior written consent (which
consent shall not be unreasonably withheld or delayed) and the prior written
consent of Master Landlord if and as required under the Master Lease, provided
that Sublandlord's consent shall not be required for Alterations and Utility
Installations meeting the criteria in Master Lease Section 6.03 under which
Master Landlord's consent is not required. Sublandlord may, as a precondition to
granting such approval, require Subtenant to utilize a contractor and architect
reasonably approved by Sublandlord and to follow applicable requirements set by
the Department of the Air Force and/or Onizuka Air Station. Any Alterations or
Utility Installations that Subtenant shall desire to make and which require the
consent of the Sublandlord shall be presented to Sublandlord in written form
with detailed plans. Consent shall be deemed conditioned upon Subtenant's: (i)
acquiring all applicable governmental permits, (ii) furnishing Sublandlord with
copies of both the permits and the plans and specifications prior to
commencement of the work, (iii) compliance with all conditions of said permits
and other Applicable Requirements in a prompt and expeditious manner, and (iv)
acceptance of responsibility for and payment of all costs and expenses
associated with any approved Alterations or Utility Installations. Any
Alterations or Utility Installations shall be performed in a workmanlike manner
with good and sufficient materials. Subtenant shall promptly upon completion
furnish Sublandlord with as-built plans and specifications. For work which costs
an amount in excess of one month's Base Rent, Sublandlord may condition its
consent upon Subtenant providing a lien and completion bond acceptable to
Sublandlord in Sublandlord's sole discretion.
(c) Indemnification. Subtenant shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for
Subtenant at or for use on the Premises, which claims are or may be secured by
any mechanic's or materialman's lien against the Premises or any interest
therein. Subtenant shall give Sublandlord not less than 10 days notice prior to
the commencement of any work in, on or about the Premises, and Sublandlord shall
have the right to post notices of non-responsibility. If Subtenant shall contest
the validity of any such lien, claim or demand, then Subtenant shall, at its
sole expense defend and protect itself, Sublandlord and the Premises against the
same and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof. If Sublandlord shall require, Subtenant
shall furnish a surety bond in an amount equal to 150% of the amount of such
contested lien, claim or demand, indemnifying Sublandlord against liability for
the same. If Sublandlord elects to participate in any such action, Subtenant
shall pay Sublandlord's attorneys' fees and costs. Prior to the commencement of
any work on the Premises, Subtenant shall provide Sublandlord with evidence that
Subtenant carries "Builder's All Risk" insurance in an amount approved by
Sublandlord covering such construction, and such other insurance as Sublandlord
may require, it being understood and agreed that all of such construction shall
be insured by Subtenant pursuant to Paragraph 9 of this Sublease immediately
upon completion thereof.
8.4. OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) Ownership. Subject to Sublandlord's right to require removal
or elect ownership as hereinafter provided, all Alterations and Utility
Installations made by Subtenant shall be the property of Subtenant, but
considered a part of the Premises. Sublandlord may, at any time, elect in
writing to be the owner of all or any specified part of the Subtenant Owned
Alterations and Utility Installations. Unless otherwise instructed per Paragraph
8.4(b) hereof, all Subtenant Owned Alterations and Utility Installations shall,
at the expiration or termination of this Sublease, become the property of
Sublandlord and be surrendered by Subtenant with the Premises. Notwithstanding
the foregoing, if any Alterations or Utility Installations made by Subtenant
constitute trade fixtures, such trade fixtures shall remain the property of
Subtenant and shall be removed by the expiration or termination of this
Sublease.
(b) Removal. By delivery to Subtenant of written notice from
Sublandlord not earlier than 90 and not later than 30 days prior to the end of
the term of this Sublease, Sublandlord may require that any or all Subtenant
Owned Alterations or Utility Installations be removed by the expiration or
termination of this Sublease.
(c) Surrender; Restoration. Subject to Paragraph 14, Subtenant
shall surrender the Premises no later than the date of the expiration of this
Sublease, or the date of an earlier termination of this Sublease if applicable,
with all of the improvements, parts and surfaces thereof broom clean and free of
debris, and in good operating order, condition and state of repair, ordinary
wear and tear excepted. "Ordinary wear and tear" shall not include any damage or
deterioration that would
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have been prevented by good maintenance practice. Subtenant shall repair any
damage occasioned by the installation, maintenance or removal of Trade Fixtures,
Subtenant Owned Alterations and/or Utility Installations, furnishings, and
equipment. Subtenant shall also comply with the requirements of Subparagraph
5.2(c) herein. Trade Fixtures shall remain the property of Subtenant and shall
be removed by Subtenant. The failure by Subtenant to timely vacate the Premises
pursuant to this Paragraph 8.4(c) without the express written consent of
Sublandlord shall constitute a holdover under the provisions of Paragraph 25
below. Without limitation of the foregoing, subject to the provisions of
Paragraph 1.7 and the security interests contemplated therein, upon the
expiration or earlier termination of this Sublease, Subtenant shall at once
surrender and deliver up to Sublandlord the Furniture with the Premises. At the
time of such return to Sublandlord, the Furniture shall be in good condition and
repair, ordinary wear and tear excepted. Subtenant acknowledges and agrees that
Subtenant's rights pursuant to this Paragraph 8 shall be subject to the rights
of Master Landlord under the Master Lease (including without limitation Sections
6.03 and 17.09) and Subtenant agrees to comply with any requirements imposed
pursuant to the Master Lease, including without limitation the right of Master
Landlord to require removal of, or to take ownership of, any alterations,
additions and improvements made to the Premises by Subtenant.
9. INSURANCE; WAIVER; SUBROGATION.
9.1. COST OF SUBLANDLORD'S INSURANCE. The cost of the premiums for the
insurance policies required to be carried by Sublandlord pursuant Article VII of
the Master Lease shall be a Project Operating Expense.
9.2. SUBTENANT'S INSURANCE. Subtenant shall maintain in full force and
effect at all times during the term of this Sublease, at Subtenant's sole cost
and expense, for the protection of Subtenant and Sublandlord, as their interests
may appear, policies of insurance issued by a carrier or carriers reasonably
acceptable to Sublandlord and its lender which afford the following coverages:
(i) worker's compensation and employer's liability, as required by law; (ii)
commercial general liability insurance (occurrence form) providing coverage
against any and all claims for host liquor liability, bodily injury and property
damage (including but not limited to personal property, whether leased or owned,
Trade Fixtures, Subtenant Owned Alterations and Utility Installations) occurring
in, on or about the Premises arising out of Subtenant's and Subtenant's
employees, directors, officers, agents, partners, members, lenders, suppliers,
shippers, contractors, customers, invitees, successors and assigns' use or
occupancy of the Premises. Such insurance shall include coverage for blanket
contractual liability, fire damage, premises, personal injury, completed
operations and products liability. Such insurance shall have a combined single
limit of not less than Two Million Dollars ($2,000,000) per occurrence with a
Four Million Dollar ($4,000,000) aggregate limit and excess/umbrella insurance
in the amount of Eight Million Dollars ($8,000,000). If Subtenant has other
locations which it owns or leases, the policy shall include an aggregate limit
per location endorsement; (iii) comprehensive automobile liability insurance
with a combined single limit of at least $2,000,000 per occurrence for claims
arising out of any company-owned automobiles or other automobile used in the
conduct of company business; (iv) "all risk" or "special form or equivalent"
property insurance, including without limitation, sprinkler leakage, covering
damage to or loss of any of Subtenant's Property located in, on or about the
Premises, and in addition, coverage for business interruption of Subtenant,
together with, if the property of any of Subtenant's invitees, vendors or
customers is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
such parties and located in the Premises. Such insurance shall be written on a
replacement cost basis (without deduction for depreciation) in an amount equal
to one hundred percent (100%) of the full replacement value of the aggregate of
the items referred to in this clause (iv); and (v) such other insurance or
higher limits of liability as is then customarily required for similar types of
buildings within the general vicinity of the Project or as may be required by
Master Landlord or any lender of Master Landlord or Sublandlord. Subtenant shall
also maintain, at its own expense, property damage insurance relating to the
Furniture, insuring against such risks as are customarily insured against on the
type of furniture leased hereunder by businesses in which Subtenant is engaged
in such amount, in such form, and with insurers satisfactory to Sublandlord;
provided, however, that the amount of insurance against damage or loss shall not
be less than the full replacement value of the Furniture. The furniture property
damage policy shall name Sublandlord and Subtenant as loss payees as their
interests may appear.
9.3. INSURANCE POLICIES. Insurance required to be maintained by
Subtenant shall be written by companies (i) licensed to do business in the State
of California, (ii) domiciled in the United States of America, and (iii) having
a
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"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by Master Landlord or a lender having a lien on the Premises) as set
forth in the most current issue of "A.M. Best's Rating Guides." Any deductible
amounts under any of the insurance policies required hereunder shall not exceed
Five Thousand Dollars ($5,000). Prior to occupancy and as a condition precedent
of delivery of possession, Subtenant shall deliver to Sublandlord certificates
of insurance for all insurance required to be maintained by Subtenant hereunder
at the time of execution of this Sublease by Subtenant. Subtenant shall, prior
to expiration of each policy, furnish Sublandlord with certificates of renewal
or "binders" thereof. Each certificate shall expressly provide that such
policies shall not be cancelable or otherwise subject to reduction in coverage
except after thirty (30) days prior written notice to the parties named as
additional insureds as required in this Sublease (except for cancellation for
nonpayment of premium, in which event cancellation shall not take effect until
at least ten (10) days' notice has been given to Sublandlord). Subtenant shall
have the right to provide insurance coverage which it is obligated to carry
pursuant to the terms of this Sublease under a blanket insurance policy,
provided such blanket policy expressly affords coverage for the Premises and for
Sublandlord as required by this Sublease.
9.4. FAILURE OF SUBTENANT TO PURCHASE AND MAINTAIN INSURANCE. If
Subtenant fails to obtain and maintain the insurance required herein throughout
the term of this Sublease, Sublandlord may, but without obligation to do so,
purchase the necessary insurance and pay the premiums therefor. If Sublandlord
so elects to purchase such insurance, Subtenant shall promptly pay to
Sublandlord as Rent, the amount so paid by Sublandlord, upon Sublandlord's
demand therefor. In addition, Sublandlord may recover from Subtenant and
Subtenant agrees to pay, as Rent, any and all losses, damages, expenses and
costs which Sublandlord may sustain or incur by reason of Subtenant's failure to
obtain and maintain such insurance.
9.5. ADDITIONAL INSUREDS AND COVERAGE. Each of Sublandlord and Master
Landlord, and at Sublandlord's request from time to time, Sublandlord's property
management company (if any) and Lenders shall be named as additional insureds or
loss payees (as applicable) under all of the policies required in Paragraph
9.2(ii)-(v) and with respect to the Subtenant Alterations. Additionally, all of
such policies shall provide for severability of interest. All insurance to be
maintained by Subtenant shall, except for workers' compensation and employer's
liability insurance, be primary, without right of contribution from insurance
maintained by Sublandlord. Any umbrella/excess liability policy (which shall be
in "following form") shall provide that if the underlying aggregate is
exhausted, the excess coverage will drop down as primary insurance. The limits
of insurance maintained by Subtenant shall not limit Subtenant's liability under
this Sublease. It is the parties' intention that the insurance to be procured
and maintained by Subtenant as required herein shall provide coverage for any
and all damage or injury arising from or related to Subtenant's operations of
its business and/or Subtenant's or Subtenant's employees, directors, officers,
agents, partners, members, lenders, suppliers, shippers, contractors, customers,
invitees, successors and assigns' use of the Premises and any of the areas
within the Project. Notwithstanding anything to the contrary contained herein,
to the extent Sublandlord's cost of maintaining insurance with respect to any
Buildings within the Project is increased as a result of Subtenant's acts,
omissions, Alterations, improvements, use or occupancy of the Premises,
Subtenant shall pay one hundred percent (100%) of, and for, each such increase
as Rent.
9.6. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary in
this Sublease, Sublandlord and Subtenant hereby mutually waive their respective
rights of recovery against each other for any loss of, or damage to, either
parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect by this Sublease or the Master Lease,
or in effect regardless of any requirements, at the time of such loss or damage.
Each party shall obtain any special endorsements, if required by its insurer,
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier.
9.7. NO REPRESENTATION OF ADEQUATE COVERAGE. Sublandlord makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Subtenant's property, business operations or
obligations under this Sublease.
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9.8. FURNITURE CASUALTY LOSS. Without limitation of the foregoing
provisions of this Article 9, until the Furniture (i) is surrendered to
Sublandlord with the Premises, (ii) is removed by Sublandlord pursuant to
Paragraph 1.7,or (iii) becomes the property of Subtenant pursuant to the option
provided in Paragraph 1.7, Subtenant shall bear the entire risk of theft or
destruction of, or damage to, the Furniture ("Furniture Casualty Loss"). The
condemnation, seizure, or requisition of title or use of any item(s) of
Furniture shall not constitute a Furniture Casualty Loss, and in such event,
Sublandlord shall be entitled to any award in connection with such condemnation,
seizure, or requisition of title or use, and Subtenant shall have no further
liability with respect to such item(s) of Furniture. No Furniture Casualty Loss
shall relieve Subtenant from its obligations to pay Rent hereunder. So long as
Subtenant is not then in Breach hereunder, the proceeds of any insurance payable
with respect to the Furniture shall be applied towards repair or replacement of
the Furniture. If a Breach does exist hereunder, Sublandlord shall have the
option to apply the proceeds of any insurance payable with respect to the
Furniture either towards repair or replacement of the Furniture or towards
Subtenant's obligations hereunder, and in the latter event, Subtenant shall have
no further liability with respect to such item(s) of Furniture. Subtenant hereby
appoints Sublandlord as Subtenant's attorney-in-fact to make claim for, receive
payment of, and execute and endorse all documents, checks or drafts issued with
respect to any Furniture Casualty Loss under any insurance policy covering the
Furniture.
10. LIMITATION OF LIABILITY AND INDEMNITY.
(a) Except to the extent of damage resulting from the active
negligence or willful misconduct of only Sublandlord or its Indemnitees (defined
below), or Sublandlord's material default of the provisions of this Sublease
beyond any applicable cure period, Subtenant agrees to protect, defend (with
counsel reasonably acceptable to Sublandlord) and hold Sublandlord and
Sublandlord's lenders, partners, members, property management company, agents,
directors, officers, employees, representatives, contractors (except as provided
in Subparagraph 7.12(d) herein), successors and assigns and each of their
respective partners, members, directors, heirs, employees, representatives,
agents, contractors, heirs, successors and assigns (collectively, the
"Indemnitees") harmless and indemnify the Indemnitees from and against all
liabilities (including any liability for injury to person or property of
Subtenant, Subtenant's employees, directors, officers, agents, partners,
members, lenders, suppliers, shippers, contractors, customers, invitees,
successors and assigns' or third party persons), damages, demands, penalties,
costs, losses, judgments, charges and expenses (including reasonable attorneys'
fees, costs of court and expenses necessary in the prosecution or defense of any
litigation including the enforcement of this provision) (collectively, "Claims")
arising from or in any way related to, directly or indirectly, (i) Subtenant's
and Subtenant's employees, agents, invitees, guests, representatives and
contractors (collectively, "Subtenant's Representatives") use or operation of
the Premises, Security System, Furniture, security services, janitorial
services, electrical systems, fire detection and prevention systems, alterations
or additions to the Premises, Subtenant's property (whether leased or owned or
held in bailment), and other portions of the Project, (ii) the conduct of
Subtenant's business at the Premises, (iii) any activity, work or thing done,
permitted or suffered by Subtenant in or about the Premises, and/or (v)
Subtenant's failure to perform any covenant or obligation of Subtenant under
this Sublease. Subtenant agrees that the obligations of Subtenant herein shall
survive the expiration or earlier termination of this Sublease.
(b) Except to the extent of damage resulting from the active
negligence or willful misconduct of only Sublandlord or its Indemnitees, or
Sublandlord's default of the provisions of this Sublease or the Master Lease
beyond any applicable cure periods, Subtenant agrees that neither Sublandlord
nor any of the Indemnitees shall at any time or to any extent whatsoever be
liable, responsible or in any way accountable for any loss, liability, injury,
death or damage to persons or property which at any time may be suffered or
sustained by Subtenant or by any person(s) whomsoever who may at any time be
using, occupying or visiting the Premises, Security System or any other portion
of the Project, including, but not limited to, any acts, errors or omissions of
any other tenants or occupants of the Project. Subtenant shall not, in any event
or circumstance, be permitted to offset or otherwise credit against any payments
of Rent required herein for matters for which Sublandlord may be liable
hereunder. Sublandlord and its authorized representatives shall not be liable
for any interference with light or air.
(c) Further, Subtenant and Sublandlord agree that neither party
shall be liable for any indirect, consequential, incidental or special damages
suffered or incurred by the other party or such party's lenders, partners,
members, property management company, agents, directors, officers, employees,
representatives, contractors, successors and assigns, provided however, that
nothing in this sentence shall be construed to limit the remedies and damages
that are otherwise
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available to Sublandlord pursuant to Sections 13.2(a) or 13.2(b) of this
Sublease. The provisions of this Subparagraph 10(c) shall supercede any
conflicting provisions of this Sublease, including the Work Letter (Exhibit I).
The parties specifically agree that the provisions of this Subparagraph 10(c)
shall apply to any liability under the Work Letter.
11. PROPERTY TAXES.
11.1. PAYMENT OF TAXES. Sublandlord shall pay the "real property taxes"
described in Article IX of the Master Lease, as well as any other taxes for
which Sublandlord is responsible pursuant to Master Lease Section 9.01, and any
such amounts shall be included in the calculation of Master Lease Expenses under
Paragraph 3.2.
11.2. ADDITIONAL IMPROVEMENTS. Notwithstanding Paragraph 11.1 hereof,
Subtenant shall, however, pay to Sublandlord the entirety of any increase in
real property taxes if assessed solely by reason of Alterations, Trade Fixtures
or Utility Installations placed upon the Premises by Subtenant or at Subtenant's
request.
11.3. PERSONAL PROPERTY TAXES. Subtenant shall pay prior to delinquency
all taxes assessed against and levied upon the Furniture, Subtenant Owned
Alterations and Utility Installations, Trade Fixtures, furnishings, equipment
and all personal property of Subtenant contained in the Premises. When possible,
Subtenant shall cause its Subtenant Owned Alterations and Utility Installations,
Trade Fixtures, furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of the Project. If any of
Subtenant's said property shall be assessed with the real property of the
Project, Subtenant shall pay Sublandlord the taxes attributable to Subtenant's
property within 10 days after receipt of a written statement setting forth the
taxes applicable to Subtenant's property. Taxes attributable to the Furniture
shall be the sole responsibility of Subtenant and shall be due and payable by
Subtenant within 10 days of receipt of a written invoice.
12. ASSIGNMENT AND SUBLETTING. Except as expressly permitted in Paragraph
12.9 below, Subtenant shall not, either voluntarily or involuntarily or by
operation of law, assign, sublet, mortgage or otherwise encumber all or any
portion of its interest in this Sublease or in the Premises or permit the
Premises to be used and occupied by anyone other than Subtenant or Subtenant's
employees without (i) obtaining the prior written consent of Sublandlord, which
consent shall not be unreasonably withheld, conditioned or delayed, subject to
the provisions of this Paragraph 12, and (ii) full compliance with all
applicable Master Lease restrictions. In the event of any such attempted
assignment, subletting, mortgage or other encumbrance without such consent or
without compliance with all applicable Master Lease restrictions, Sublandlord
may, at its option, do either or both of the following: (i) void such attempted
assignment, subletting, mortgage or other encumbrance, or (ii) declare Subtenant
in material Breach under Paragraph 13.
12.1. GENERALLY. No assignment, subletting, mortgage or other encumbrance
of Subtenant's interest in this Sublease shall relieve Subtenant of its
obligation to pay the rent and to perform all of the other obligations to be
performed by Subtenant hereunder. In this connection, any such assignment,
sublease or encumbrance shall expressly provide that it is subject to the terms
and provisions of this Sublease. The acceptance of rent by Sublandlord from any
other person shall not be deemed to be a waiver by Sublandlord of any provision
of this Sublease or to be a consent to any subletting, assignment, mortgage or
other encumbrance. Consent to one sublease, assignment, mortgage or other
encumbrance shall not be deemed to constitute consent to any subsequent
attempted subletting, assignment, mortgage or other encumbrance. If Subtenant is
a corporation which is not required under the Securities Exchange Act of 1934 to
file periodic informational reports with the Securities and Exchange Commission,
or is an unincorporated association or partnership, the transfer, assignment or
hypothecation of any stock or interest in such corporation, association or
partnership in the aggregate of fifty percent (50%) or more shall be deemed an
assignment within the meaning of this Paragraph 12.
12.2. NOTICE. If Subtenant desires at any time to assign this Sublease or
to sublet the Premises or any portion thereof for the Term, it shall first
notify Sublandlord of its desire to do so at least thirty (30) days but not more
than ninety (90) days prior to the date Subtenant desires the assignment or
sublease to be effective. At that time, Subtenant shall submit in writing to
Sublandlord (i) the name of the proposed subtenant or assignee; (ii) the nature
of the proposed
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subtenant's or assignee's business to be carried on in the Premises together
with a detailed description of the proposed subtenant's or assignee's business
experience and duration of the current enterprise; (iii) whether the number of
square feet in the rentable area of the Premises per person which are proposed
by the subtenant or assignee to occupy the Premises would be in compliance with
fire and safety regulations; (iv) the terms and provisions of the proposed
sublease or assignments and the proposed effective date thereof; and (v) such
financial information as Sublandlord may request concerning the proposed
subtenant or assignee (which information shall be requested within ten (10) days
following receipt of Subtenant's notice and which information shall be provided
within ten (10) days following Sublandlord's request). The submission pursuant
to clause (iv) shall include a copy of any agreement, escrow instructions or
other document which contains or memorializes the terms and provisions of the
transaction for which Sublandlord's consent is required. Similarly, if Subtenant
desires to mortgage or encumber its interest in this Sublease, Subtenant shall
first supply to Sublandlord in writing such information as to such transaction
as may be requested by Sublandlord.
12.3. SUBLANDLORD'S ELECTION. At any time within thirty (30) days after
Sublandlord's receipt of the last of the information specified in Paragraph
12.2, above, Sublandlord may by written notice to Subtenant elect to disapprove
of such assignment or sublease.. If Sublandlord does not disapprove the proposed
subletting or assignment in writing within said thirty (30) day period,
Subtenant may within ninety (90) days after the expiration of said thirty (30)
day period enter into a valid assignment or sublease of the Premises or portion
thereof, upon the terms and conditions set forth in the information furnished by
Subtenant to Sublandlord pursuant to Paragraph 12.2 above. It is provided,
however, that any material change in such terms shall be subject to
Sublandlord's consent as provided in this Paragraph. Subtenant shall, at
Subtenant's own cost and expense, discharge in full any commissions which may be
due and owing as the result of any proposed assignment or subletting.
12.4. SUBLANDLORD'S DISCRETION; Factors. Sublandlord shall have the right
to approve or disapprove any proposed assignee or subtenant. In exercising such
right of approval or disapproval, Sublandlord shall be entitled to take into
account any fact or factor which Sublandlord reasonably deems relevant to such
decision, including but not limited to the following, all of which are agreed by
Subtenant to be reasonable factors for Sublandlord's consideration:
(a) The financial strength and business experience of the proposed
assignee or subtenant, including, but not limited to, the adequacy of its
working capital to pay all expenses anticipated in connection with any proposed
remodeling of the Premises.
(b) The proposed use of the Premises by such proposed assignee or
subtenant and the compatibility of such proposed use within the quality and
nature of the other uses in the Building. The foregoing may include an analysis
by Sublandlord of the number and persons per square foot (as described above)
proposed by the subtenant or assignee to occupy the Premises, it being
understood and agreed that Sublandlord may disapprove a subtenant or assignee
which represents an unreasonable increase in population levels.
(c) Any adverse impact, including a greater intensity of use of
any Building, mechanical, electrical or plumbing facilities or any other
services or facilities of the Project, which may result from the occupancy of
the Premises by the proposed subtenant or assignee.
(d) Whether there exists any default by Subtenant pursuant to this
Sublease or any non-payment or non-performance by Subtenant under this Sublease
which, with the passage of time and/or the giving of notice, would constitute a
default under this Sublease.
(e) The business reputation, character, history and nature of the
business of the proposed assignee or subtenant.
(f) Whether the proposed assignee or subtenant is a person with
whom Sublandlord is actively negotiating for space in the Project, it being
understood and agreed that Sublandlord may disapprove a subletting or assignment
to such potential direct tenant.
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(g) Whether the proposed assignee or subtenant is a governmental
entity or agency, it being understood and agreed that Sublandlord may disapprove
the proposed subletting or assignment as being inconsistent with the character
of the building.
(h) Any possibility that such assignment or subletting could
trigger the Master Landlord's rights of recapture under Paragraph 11.06 of the
Master Lease, except assignment or subletting specifically excluded from
recapture pursuant to Master Landlord's consent to this Sublease or separate
written agreement between Master Landlord and Subtenant.
(i) Whether the proposed sublease is for less than an entire floor
of a Building or includes a portion of the Premises that is less than an entire
floor of a Building.
Moreover, Sublandlord shall be entitled to be reasonably satisfied that
each and every covenant, condition or obligation imposed upon Subtenant by this
Sublease and each and every right, remedy or benefit afforded Sublandlord by
this Sublease is not impaired or diminished by such assignment or subletting.
Sublandlord and Subtenant acknowledge that the express standards and provisions
set forth in this Sublease dealing with assignment and subletting, including
those set forth in this Paragraph 12.4, have been freely negotiated and are
reasonable at the date hereof taking into account Subtenant's proposed use of
the Premises and the nature and quality of the building. Moreover, approval of
any assignment of Subtenant's interest shall, whether or not expressly so
stated, be conditioned upon such assignee assuming in writing all obligations of
Subtenant hereunder.
12.5. BONUS RENT. As a condition to Sublandlord's consent to an
assignment or subletting, Sublandlord shall be entitled to receive, in the case
of a subletting, fifty percent (50%) of all rent (however denominated and paid)
payable by the subtenant to Subtenant, less reasonable leasing commissions and
other reasonable costs incurred in connection with the assignment or subletting
(subject to Sublandlord's reasonable approval), including the costs and expenses
of Sublandlord and/or Master Landlord required to be paid by Subtenant
hereunder, in excess of that payable by Subtenant to Sublandlord pursuant to the
other provisions of this Sublease with respect to the portion of the Premises
being sublet and, in the case of an assignment, fifty percent (50%) of all
consideration given, directly or indirectly, by the assignee to Subtenant, in
connection with such assignment. For the purposes of this Paragraph 12.5, the
term "rent" shall mean all consideration paid or given, directly or indirectly,
for the use of the Premises or any portion thereof. The term "consideration"
shall mean and include money, services, property or any other thing of value
such as payment of costs, cancellation of indebtedness, discounts, rebates, free
or abated rent, bonuses, and similar inducements. The terms "sublet" and
"sublease" and their variants shall include a sublease as to which Subtenant is
sublessor and any sub-sublease or other sub-subtenancy, irrespective of the
number of tenancies and tenancy levels between the ultimate occupant and
Sublandlord, as to which Subtenant receives any consideration, as defined in
this Paragraph. Any rent or other consideration which is to be passed through to
Sublandlord by Subtenant pursuant to this Paragraph shall be paid to Sublandlord
promptly upon receipt by Subtenant and shall be paid in cash, irrespective of
the form in which received by Subtenant from any subtenant or assignee. In the
event that any rent or other consideration received by Subtenant from a
subtenant or assignee is in a form other than cash, then for purposes of
calculating the share of excess rents to which Sublandlord is entitled
hereunder, the parties shall take into account the fair value of such
consideration.
12.6. ENCUMBRANCES. Subtenant understands and acknowledges that, should
Subtenant propose to encumber or hypothecate its interest in this Sublease,
Sublandlord may reasonably refuse to consent thereto and may reasonably
condition such consent. In no event may Subtenant encumber or hypothecate its
interest in this Sublease until and unless Subtenant shall first have received
the written consent of Sublandlord. In the event that Sublandlord consents to
any proposed encumbrance or hypothecation by Subtenant, the person or entity
receiving a lien upon or security interest in Subtenant's interest in this
Sublease shall not be entitled to transfer such interest except in compliance
with the provisions of this Paragraph 12.
12.7. MERGER; ATTORNMENT. The voluntary or other surrender of this
Sublease by Subtenant or a mutual cancellation hereof shall not work a merger,
and shall, at the option of Sublandlord, terminate all or any existing subleases
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or subtenancies or shall operate as an assignment to Sublandlord of such
subleases or subtenancies. Any sub-sublease of the Premises shall be subject and
subordinate to the provisions of this Sublease, shall not extend beyond the term
of this Sublease, and shall provide that the sub-sublessee shall attorn to
Sublandlord, at Sublandlord's sole option, in the event of the termination of
this Sublease.
12.8. SUBLANDLORD'S COSTS. Subtenant shall reimburse Sublandlord, on
demand, for all out-of-pocket costs and expenses incurred by Sublandlord in
connection with any proposed assignment or subleasing by Subtenant, including
reasonable attorneys' fees and any costs and expenses payable to Master Landlord
under the Master Lease, which amounts shall be included in the transaction costs
Subtenant may recover in determining the portion of excess rents payable to
Sublandlord pursuant to Paragraph 12.5.
12.9. AFFILIATES. Notwithstanding anything to the contrary contained in
this Paragraph 12, but subject to all Master Lease restrictions and requirements
including Master Landlord's consent, Subtenant may assign this Sublease, or
sublet all or a portion of the Premises, without receipt of Sublandlord's
consent and without the requirement of sharing consideration with Sublandlord
pursuant to Paragraph 12.5, to an "Affiliate" of Subtenant. "Affiliate" shall be
defined to be any entity which controls, is controlled by, or is under common
control with Subtenant or which acquires all or substantially all of Subtenant's
stock or assets or which results from the merger or consolidation of Subtenant
with another entity, so long as such transaction was not entered into as a
subterfuge to avoid the obligations and restrictions of this Sublease and
provided that the purported assignee is not a "competitor" of Sublandlord. In
connection with any assignment of the type described in this Paragraph 12.9:
(a) The assignee shall, within ten (10) business days after
receipt of written request from Sublandlord, execute and deliver to Sublandlord
a written assignment of the obligations of Subtenant pursuant to this Sublease
accruing from and after the effective date of the assignment and in form and
substance reasonably satisfactory to Sublandlord.
(b) No such assignment shall release Subtenant from any of the
obligations of the subtenant hereunder, whether accruing prior to or subsequent
to the effective date of such transaction.
(c) No such assignment shall be accompanied by a change in use
from that permitted under this Sublease.
(d) Within ten (10) days after the effective date of such
assignment, Subtenant shall notify Sublandlord in writing of such occurrence,
the effective date thereof, the name of the assignee, any addition or change in
the addresses for notice pursuant to this Sublease and the facts which bring
such transaction within the scope of this Paragraph 12.9.
(e) Subtenant agrees to reimburse Sublandlord for Sublandlord's
reasonable out-of-pocket costs (including amounts payable to Master Landlord
under the Master Lease) and attorneys' fees incurred in connection with the
review, processing and documentation of any such transaction. For purposes of
the foregoing definition of Affiliate, an entity is a "competitor" of
Sublandlord if the entity owns, operates, maintains, or controls, or
participates significantly (in the reasonable opinion of Sublandlord) in the
ownership, management, control, operation, or profits of any business in
competition with the business of Sublandlord. For purposes of the foregoing
definitions of "Affiliate" and "competitor", "control" means the direct or
indirect ownership of more than fifty percent (50%) of the voting securities of
an entity or possession of the right to vote more than fifty percent (50%) of
the voting interest in the ordinary direction of the entity's affairs
13. DEFAULT; BREACH; REMEDIES.
13.1. DEFAULT; BREACH. A "Default" is defined as a failure by the
Subtenant to comply with or perform any of the terms, covenants, conditions or
rules and regulations under this Sublease. A "Breach" is defined as the
occurrence of one or more of the following Defaults, and the failure of
Subtenant to cure such Default within any applicable grace
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period, unless Sublandlord is legally prevented from issuing a notice of
Default, in which event no grace period shall apply:
(a) The abandonment of the Premises.
(b) The failure of Subtenant to make any payment of Rent or any
Security Deposit required to be made by Subtenant hereunder when due, to provide
reasonable evidence of insurance or surety bond, or to fulfill any obligation
under this Sublease which endangers or threatens life or property, where such
failure continues for a period of five (5) business days following written
notice to Subtenant with respect to payments of Base Rent, and ten (10) days
with respect to Operating Expenses and Master Lease Expenses and Security
Deposit.
(c) The failure by Subtenant to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the rescission of an
unauthorized assignment or subletting, (iii) an Estoppel Certificate, (iv) a
requested subordination, (v) any document requested under Paragraph 7.11
(utility additions) and/or Paragraph 42 (easements), or (vii) any other
documentation or information which Sublandlord may reasonably require of
Subtenant under the terms of this Sublease, where any such failure continues for
a period of 10 days following written notice to Subtenant.
(d) A Default by Subtenant as to the terms, covenants, conditions
or provisions of this Sublease, or of the rules and regulations adopted under
Paragraph 1.4 hereof, other than those described in subparagraphs 13.1 (a), (b)
or (c), above, where such Default continues for a period of 30 days after
written notice; provided, however, that if the nature of Subtenant's Default is
such that more than 30 days are reasonably required for its cure, then it shall
not be deemed to be a Breach if Subtenant commences such cure within said 30 day
period and thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making
of any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "Debtor" as defined in 11 U.S.C. Section 101 or any successor statute
thereto (unless, in the case of a petition filed against Subtenant, the same is
dismissed within 60 days); (iii) the appointment of a trustee or receiver to
take possession of substantially all of Subtenant's assets located at the
Premises or of Subtenant's interest in this Sublease, where possession is not
restored to Subtenant within 30 days; or (iv) the attachment, execution or other
judicial seizure of substantially all of Subtenant's assets located at the
Premises or of Subtenant's interest in this Sublease, where such seizure is not
discharged within 30 days; provided, however, in the event that any provision of
this subparagraph (e) is contrary to any applicable law, such provision shall be
of no force or effect, and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of Subtenant or of
any guarantor given to Sublandlord was materially false.
(g) The failure to comply with Subtenant's obligations under the
written Consent to Sublease under which Master Landlord consents to this
Sublease following the expiration of any applicable cure period provided for
therein.
13.2. REMEDIES. If Subtenant fails to perform any of its affirmative
duties or obligations, within the applicable grace period (if any) under
Paragraph 13.1 (or in case of an emergency, without prior notice, but with
notice promptly thereafter), Sublandlord may, at its option, perform such duty
or obligation on Subtenant's behalf, including but not limited to the obtaining
of reasonably required bonds, insurance policies, or governmental licenses,
permits or approvals. The costs and expenses of any such performance by
Sublandlord shall be due and payable by Subtenant upon receipt of invoice
therefor. If any check given to Sublandlord by Subtenant shall not be honored by
the bank upon which it is drawn, Sublandlord, at its option, may require all
future payments to be made by Subtenant to be by cashier's check. In the event
of a Breach, Sublandlord may, with or without further notice or demand, and
without limiting Sublandlord in the exercise of any right or remedy which
Sublandlord may have by reason of such Breach:
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(a) Terminate Subtenant's right to possession of the Premises by
any lawful means, in which case this Sublease shall terminate and Subtenant
shall immediately surrender possession to Sublandlord. In such event Sublandlord
shall be entitled to recover from Subtenant: (i) the unpaid Rent which had been
earned at the time of termination; (ii) the worth at the time of award of the
amount by which the unpaid rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss that the
Subtenant proves could have been reasonably avoided; (iii) 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 rental loss that the
Subtenant proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Sublandlord for all the detriment proximately caused by
the Subtenant's failure to perform its obligations under this Sublease or which
in the ordinary course of things would be likely to result therefrom, including
but not limited to the cost of recovering possession of the Premises, expenses
of reletting, including necessary renovation and alteration of the Premises,
reasonable attorneys' fees, and that portion of any leasing commission paid by
Sublandlord in connection with this Sublease applicable to the unexpired term of
this Sublease. The worth at the time of award of the amount referred to in
provision (iii) of the immediately preceding sentence shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of the
District within which the Premises are located at the time of award plus one
percent. Efforts by Sublandlord to mitigate damages caused by Subtenant's Breach
of this Sublease shall not waive Sublandlord's right to recover damages under
Paragraph 12. If termination of this Sublease is obtained through the
provisional remedy of unlawful detainer, Sublandlord shall have the right to
recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Sublandlord may reserve the right to recover all or any part thereof
in a separate suit. If a notice and grace period required under Paragraph 13.1
was not previously given, a notice to pay rent or quit, or to perform or quit
given to Subtenant under the unlawful detainer statute shall also constitute the
notice required by Paragraph 13.1. In such case, the applicable grace period
required by Paragraph 13.1 and the unlawful detainer statute shall run
concurrently, and the failure of Subtenant to cure the Default within the
greater of the two such grace periods shall constitute both an unlawful detainer
and a Breach of this Sublease entitling Sublandlord to the remedies provided for
in this Sublease and/or by said statute.
(b) Continue the Sublease and Subtenant's right to possession and
recover the Rent as it becomes due, in which event Subtenant may sublet or
assign, subject only to reasonable limitations. Acts of maintenance, efforts to
relet, and/or the appointment of a receiver to protect the Sublandlord's
interests, shall not constitute a termination of the Subtenant's right to
possession.
(c) Pursue any other remedy now or hereafter available under the
laws or judicial decisions of the state wherein the Premises are located. The
expiration or termination of this Sublease and/or the termination of Subtenant's
right to possession shall not relieve Subtenant from liability under any
indemnity provisions of this Sublease as to matters occurring or accruing during
the term hereof or by reason of Subtenant's occupancy of the Premises.
With respect to the Furniture, to the extent permitted by applicable law,
Subtenant hereby waives any and all rights and remedies conferred upon a lessee
by Section 10508 through 10522 of the California Commercial Code. To the extent
permitted by applicable law, Subtenant also hereby waives any rights now or
hereafter conferred by statute or otherwise which may require Sublandlord to
sell, lease, or otherwise use any Furniture in mitigation of Sublandlord's
damages under the terms of this Sublease or which may otherwise limit or modify
any of Sublandlord's rights or remedies under this Sublease. Any action by
Subtenant against Sublandlord for any default by Sublandlord under this Sublease
with respect to the Furniture shall be commenced within one year after any such
cause of action accrues.
13.3. INDUCEMENT RECAPTURE. Sublandlord's agreement to the waiver of Base
Rent during the Base Rent Inducement Period shall be deemed conditioned upon
Subtenant's full and faithful performance of all of the terms, covenants and
conditions of this Sublease. Upon termination of this Sublease for Breach by
Subtenant, any such Inducement Provision shall automatically be deemed deleted
from this Sublease and of no further force or effect, and Sublandlord shall be
entitled to recover, as part of its damages under Paragraph 13.2(a)(i), the
amount of Base Rent that would have been payable by Subtenant during the Base
Rent Inducement Period.
13.4. BREACH BY SUBLANDLORD.
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(a) Notice of Breach. Sublandlord shall not be deemed in breach of
this Sublease unless Sublandlord fails within a reasonable time to perform an
obligation required to be performed by Sublandlord. For purposes of this
Paragraph, a reasonable time shall in no event be more than 30 days after
receipt by Sublandlord of written notice specifying wherein such obligation of
Sublandlord has not been performed; provided, however, that if the nature of
Sublandlord's obligation is such that more than 30 days are reasonably required
for its performance, then Sublandlord shall not be in breach if performance is
commenced within such 30 day period and thereafter diligently pursued to
completion, and provided further that in the event of emergency a shorter cure
period shall apply as is reasonably appropriate under the circumstances.
Subtenant shall provide a courtesy copy of any notices of default delivered to
Sublandlord to any Lender whose name and address shall have been furnished
Subtenant in writing for such purpose .
(b) Performance by Subtenant on Behalf of Sublandlord. In the
event that neither Sublandlord nor Lender cures said breach within 30 days after
receipt of said notice, or if having commenced said cure they do not diligently
pursue it to completion, then Subtenant may elect to cure said breach at
Subtenant's expense and offset from Rent an amount equal to the greater of one
month's Base Rent or the Security Deposit, and to pay an excess of such expense
under protest, reserving Subtenant's right to reimbursement from Sublandlord.
Subtenant shall document the cost of said cure and supply said documentation to
Sublandlord.
14. DAMAGE OR DESTRUCTION; CONDEMNATION. Notwithstanding anything in this
Sublease to the contrary, in the event of a fire or other casualty affecting the
Project or the Premises, or of a taking of all or a part of the Project or
Premises under the power of eminent domain, Sublandlord shall not be required to
obtain the consent of Subtenant in order to exercise any right which may have
the effect of terminating the Master Lease. In the event Sublandlord is
entitled, under the Master Lease, to a rent abatement as a result of a fire or
other casualty or as a result of a taking under the power of eminent domain,
then Subtenant shall be entitled to "Subtenant's Abatement Share" (defined
below) of such rent abatement unless the effect on the Premises of such fire or
other casualty or such taking shall be substantially disproportionate to the
amount of the abatement, in which event the parties shall equitably adjust the
abatement as between themselves, based on the relative impact of the fire or
other casualty, or the taking, as the case may be. "Subtenant's Abatement Share"
is defined, for purposes of this Sublease, as the percentage determined by
dividing the affected rentable area of the Premises by the affected rentable
area of the Project. If the Master Lease imposes on Sublandlord the obligation
to repair or restore leasehold improvements or alterations, Subtenant shall be
responsible for repair or restoration of leasehold improvements or alterations
made by Subtenant. Subtenant shall make any insurance proceeds resulting from
the loss which Sublandlord is obligated to repair or restore available to
Sublandlord and shall permit Sublandlord to enter the Premises to perform the
same, subject to such conditions as Subtenant may reasonably impose.
15. BROKERAGE FEES. Each party warrants to the other that it has had no
dealings with any broker or agent in connection with this Sublease other than
Cushman and Wakefield ("CW") and Cornish & Carey Commercial ("C&C") as brokers
for Sublandlord, and The Staubach Company ("TSC") as broker for Subtenant.
Sublandlord shall pay CW a commission pursuant to a written agreement dated
March 21, 2001, and shall pay C&C a commission pursuant to a separate written
agreement dated June 26, 2002, which commissions are to be shared with TSC
pursuant to agreements between C&C and CW, on the one hand, and TSC on the other
hand. No other commissions shall be payable in connection with this transaction.
Each party covenants to hold harmless and indemnify the other party from and
against any and all costs (including reasonable attorneys' fees), expense or
liability for any compensation, commissions and charges claimed by any other
broker or other agent with respect to this Sublease or the negotiation thereof
on behalf of such indemnifying party.
16. ESTOPPEL CERTIFICATES.
(a) Subtenant shall within ten (10) days after written notice from
Sublandlord execute, acknowledge and deliver to Sublandlord a statement in
writing in form substantially similar to the form of estoppel certificate
attached hereto as Exhibit J and incorporated herein by this reference
("Estoppel Certificate"), plus such additional information, confirmation and/or
statements as may be reasonably requested by Sublandlord.
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(b) If Subtenant shall fail to execute or deliver the Estoppel
Certificate within such ten (10) day period, Sublandlord may execute an Estoppel
Certificate stating that: (i) the Sublease is in full force and effect without
modification except as may be represented in good faith, using reasonable
business judgment, by Sublandlord, (ii) there are no uncured defaults in
Sublandlord's performance, and (iii) not more than one (1) month's rent has been
paid in advance. Prospective purchasers and encumbrances may rely upon
Sublandlord's Estoppel Certificate, and Subtenant shall be estopped from denying
the truth of the facts contained in said Estoppel Certificate.
(c) If Sublandlord acquires an ownership interest in the Premises
and desires to finance, refinance, or sell the Premises, or any part thereof, or
if Sublandlord desires to assign, pledge, or hypothecate Sublandlord's leasehold
interest pursuant to the Master Lease, or if Sublandlord desires to finance,
refinance, sell, assign, pledge, or hypothecate Sublandlord's interest in the
Furniture or any part thereof, then Subtenant shall deliver to any potential
lender, purchaser, recipient of such pledge or hypothecation, or assignee
designated by Sublandlord such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Subtenant's
financial statements for the past three (3) years. All such financial statements
shall be received by Sublandlord and such lender or purchaser in confidence and
shall be used only for the purposes herein set forth.
17. DEFINITION OF SUBLANDLORD. The term "Sublandlord" as used herein shall
mean the holder at the time in question of Lessee's (as defined in the Master
Lease) interest in the Master Lease. In the event of a transfer of Sublandlord's
title or interest in the Master Lease, Sublandlord shall deliver to the
transferee or assignee (in cash or by credit) any unused Security Deposit held
by Sublandlord. Upon such transfer or assignment and delivery of the Security
Deposit, as aforesaid, and the assumption in writing by such transferee or
assignee of Sublandlord's obligations accruing under this Sublease after such
transfer or assignment, the prior Sublandlord shall be relieved of all liability
with respect to the obligations and/or covenants under this Sublease to be
performed by the Sublandlord that accrue after such transfer or assignment.
Subject to the foregoing, the obligations and/or covenants in this Sublease to
be performed by the Sublandlord shall be binding only upon the Sublandlord as
hereinabove defined. Notwithstanding the above, and subject to the provisions of
Paragraph 20 below, the original Sublandlord under this Sublease, and all
subsequent holders of the Sublandlord's interest in this Sublease shall remain
liable and responsible with regard to the potential duties and liabilities of
Sublandlord pertaining to Hazardous Materials as outlined in Paragraph 5.2 above
18. SEVERABILITY. The invalidity of any provision of this Sublease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. DAYS. Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Sublease shall mean and refer to calendar days.
20. LIMITATION ON LIABILITY. Subject to the provisions of Paragraph 17
above and only if Sublandlord acquires an ownership interest in the Premises,
the obligations of Sublandlord under this Sublease shall not constitute personal
obligations of Sublandlord, or its employees, directors, officers, shareholders,
or its successors and assigns or their respective heirs, and Subtenant shall
look to Sublandlord's interest in the Premises, and to no other assets of
Sublandlord, for the satisfaction of any liability of Sublandlord with respect
to this Sublease, and shall not seek recourse against the individual employees,
directors, officers, shareholders, successors and assigns of Sublandlord, or any
of their personal assets or those of their heirs for such satisfaction. In the
event that Sublandlord has only a leasehold interest in the Premises, the
obligations of Sublandlord under this Sublease shall not constitute personal
obligations of Sublandlord's employees, directors, officers, shareholders, or
Sublandlord's successors and assigns or their respective heirs, and Subtenant
shall look to Sublandlord for the satisfaction of any liability of Sublandlord
with respect to this Sublease, and shall not seek recourse against the
individual employees, directors, officers, shareholders, successors and assigns
of Sublandlord, or any of their personal assets or those of their heirs for such
satisfaction.
21. TIME OF ESSENCE. Time is of the essence with respect to the performance
of all obligations to be performed or observed by the Parties under this
Sublease.
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22. NO PRIOR OR OTHER AGREEMENTS. This Sublease is a complete integration
and contains all agreements between the Parties with respect to any matter
mentioned herein, and no other prior or contemporaneous agreement or
understanding shall be effective.
23. NOTICES.
23.1. NOTICE REQUIREMENTS. Except as otherwise provided herein, all
notices required or permitted by this Sublease or applicable law shall be in
writing and may be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service Express Mail or
other nationally-recognized overnight courier, with postage prepaid and shall be
deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted in the Basic Sublease Information above shall be that
Party's address for delivery or mailing of notices. Either Party may by written
notice to the other specify a different address for notice. An informational
copy of all notices given by either Party shall be sent via facsimile to the
facsimile number provided for the other Party. A copy of all notices to
Sublandlord shall be concurrently transmitted to such party or parties at such
addresses as Sublandlord may from time to time hereafter designate in writing.
23.2. DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given forty-eight (48) hours after
the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the Postal Service or courier. If notice is received
after 5:00 p.m. Pacific Time on a business day or on a Saturday, Sunday or legal
holiday, it shall be deemed received on the next business day.
23.3 NOTICES FROM MASTER LANDLORD.
Each party shall provide to the other party a copy of any notice or demand
received from or delivered to Master Landlord as soon as practicable thereafter,
but preferably within forty-eight (48) hours of receiving, and concurrently upon
delivering, such notice or demand. Notwithstanding the foregoing, Sublandlord
shall only be required to provide copies of any notices or demand affecting the
Premises or those affecting the interests of all subtenants in the Project.
24. WAIVERS.
No term, covenant or condition hereof shall be deemed waived, except by
written consent of the party against whom the waiver is claimed, and any waiver
of a breach of any term, covenant or condition hereof shall not be deemed a
waiver of any other term, covenant or condition hereof, or of any subsequent
breach of the same or of any other term, covenant or condition hereof.
Sublandlord's consent to, or approval of, any act shall not be deemed to render
unnecessary the obtaining of Sublandlord's consent to, or approval of, any
subsequent or similar act by Subtenant, or be construed as the basis of an
estoppel to enforce the provision or provisions of this Sublease requiring such
consent. The acceptance of Rent by Sublandlord shall not be a waiver of any
Default or Breach by Subtenant. Any payment by Subtenant may be accepted by
Sublandlord on account of moneys or damages due Sublandlord, notwithstanding any
qualifying statements or conditions made by Subtenant in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Sublandlord at or before
the time of deposit of such payment.
25. NO RIGHT TO HOLDOVER. Subtenant has no right to retain possession of
the Premises or any part thereof beyond the expiration or termination of this
Sublease. In the event that Subtenant holds over, then the Base Rent shall be
increased to one hundred fifty percent (150%) of the Base Rent applicable
immediately preceding the expiration or termination. Nothing contained herein
shall be construed as consent by Sublandlord to any holding over by Subtenant.
26. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
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27. COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT. All provisions of
this Sublease to be observed or performed by Subtenant are both covenants and
conditions. In construing this Sublease, all headings and titles are for the
convenience of the Parties only and shall not be considered a part of this
Sublease. Whenever required by the context, the singular shall include the
plural and vice versa. This Sublease shall not be construed as if prepared by
one of the Parties, but rather according to its fair meaning as a whole, as if
both Parties had prepared it.
28. BINDING EFFECT; CHOICE OF LAW. This Sublease shall be binding upon the
parties, their personal representatives, successors and assigns and be governed
by the laws of the State of California. Any litigation between the Parties
hereto concerning this Sublease shall be initiated in the county in which the
Premises are located.
29. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
29.1. SUBORDINATION. This Sublease and any Option granted hereby shall be
subject and subordinate to any leasehold financing or other hypothecation or
security device (collectively, "Security Device"), now or hereafter placed upon
the Master Lease and/or this Sublease, to any and all advances made on the
security thereof, and to all renewals, modifications, and extensions thereof;
provided, however, that the holder of any such Security Devices (in this
Sublease together referred to as "Lender") shall have executed a reasonable
subordination, non-disturbance and attornment agreement ("SNDA") under which the
Lender agrees that, subject to Lender's standard conditions, this Sublease and
Subtenant's possession and rights hereunder shall not be disturbed by the Lender
or anyone claiming under or through such a Lender. Subtenant agrees that a
Lender shall have no liability or obligation to perform any of the obligations
of Sublandlord under this Sublease except as stated in the applicable SNDA. Any
Lender may elect to have this Sublease and/or any Option granted hereby superior
to the lien of its Security Device by giving written notice thereof to
Subtenant, whereupon this Sublease and such Options shall be deemed prior to
such Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.
29.2. ATTORNMENT. In the event that Sublandlord transfers its leasehold
interest in the Premises, (i) Subtenant shall attorn to such transferee, and
upon request, enter into a new lease, containing all of the terms and provisions
of this Sublease, with such new owner for the remainder of the term hereof, or,
at the election of such transferee, this Sublease shall automatically become a
new sublease between Subtenant and such transferee, upon all of the terms and
conditions hereof, for the remainder of the term hereof, and (ii) Sublandlord
shall thereafter be relieved of any further obligations hereunder (excluding
obligations accrued as of the date of such transfer) and such transferee shall
assume all of Sublandlord's obligations hereunder, except that such transferee
shall not: (a) be liable for any act or omission of any prior Sublandlord or
with respect to events occurring prior to transfer; (b) be subject to any
offsets or defenses which Subtenant might have against any prior Sublandlord,
(c) be bound by prepayment of more than one month's rent, or (d) be liable for
the return of any security deposit paid to any prior Sublandlord not actually
received by the transferee.
30. MASTER LEASE PROVISIONS.
30.1. SUBLEASE SUBORDINATE. This Sublease and all the rights of parties
hereunder are subject and subordinate to the Master Lease. In the event the
Master Lease is terminated for any reason other than a Recognition Event, then,
on the date of such termination, subject to Master Landlord's written agreement
to the contrary, this Sublease automatically shall terminate and be of no
further force or effect, and the parties hereto shall be relieved of any
liability thereafter accruing, except for liabilities of that parties that by
the terms of this Sublease shall survive expiration or earlier termination.
Notwithstanding the foregoing, in the event of the rejection by Master Landlord
of the Master Lease which is approved, consented to or authorized by a
bankruptcy court in a bankruptcy proceeding, then so long as Sublandlord has not
elected (under Section 365(h)(1)(A) of the Bankruptcy Code or successor statute)
to treat such rejection as a termination of the Master Lease and remains in
possession of the Premises, Sublandlord agrees to recognize the estate of
Subtenant under this Sublease and this Sublease shall continue, except to the
extent restricted by court order or other legal restraint. Each party agrees
that it will not, by its act or omission to act, cause a default under the
Master Lease which would lead to the termination of the Master Lease by Master
Landlord. In furtherance of the foregoing, the parties hereby confirm, each to
the other, that as time is of the essence it is not practical in this Sublease
agreement to enumerate all of
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the rights and obligations of the various parties under the Master Lease and
specifically to allocate those rights and obligations in this Sublease
agreement. Accordingly, in order to afford to Subtenant the benefits of this
Sublease and of those provisions of the Master Lease which by their nature are
intended to benefit the party in possession of the Premises, and in order to
protect Sublandlord against a default by Subtenant which might cause a default
or event of default by Sublandlord under the Master Lease:
(a) Except for obligations delegated to Subtenant pursuant to
Paragraph 7.5 and Paragraph 8.2, Sublandlord shall perform its covenants and
obligations under the Master Lease which do not require for their performance
possession of the Premises and which are not otherwise to be performed hereunder
by Subtenant on behalf of Sublandlord. For example, Sublandlord shall at all
times keep in full force and effect all insurance required of Sublandlord as
tenant under the Master Lease.
(b) Except as otherwise expressly provided herein, from and after
the Sublease Commencement Date, Subtenant shall perform all affirmative
covenants and shall refrain from performing any act which is prohibited by the
negative covenants of the Master Lease, where the obligation to perform or
refrain from performing is by its nature imposed upon the party in possession of
the Premises. If practicable, Subtenant shall perform affirmative covenants
which are also covenants of Sublandlord under the Master Lease at least five (5)
days prior to the date when Sublandlord's performance is required under the
Master Lease. If Subtenant fails to comply with any of the obligations of the
preceding sentence, and does not cure within the applicable cure period, then
Sublandlord shall have the right to enter the Premises (in accordance with the
requirements of Paragraph 32 below) to cure any default by Subtenant under this
Paragraph.
In particular, and without limiting the foregoing, Subtenant shall
fulfill, at Subtenant's sole cost and expense (including reimbursement of costs
included as Operating Expenses), all obligations imposed on occupants of the
Project in connection with the Moffett Park Transportation Demand Management
Plan described in Section 5.07 of the Master Lease and made part of the Master
Lease as Exhibit M, including any amendments or revisions thereto (the
"Transportation Plan"). Subtenant acknowledges that the Transportation Plan
applies to the occupants of the Project as a group rather than individually;
Subtenant and Sublandlord agree to reasonably cooperate and coordinate efforts
with each other and other Project occupants in order to effectively and
efficiently carry out the Transportation Plan. Sublandlord agrees to coordinate
Transportation Plan compliance efforts on behalf of the Project, either itself
or through its designee, and Subtenant shall cooperate with same. For purposes
of this Paragraph 30.1, Sublandlord or its designee shall have the have the
right, in its sole discretion, to determine what constitutes "obligations
imposed on occupants of the Project in connection with the Transportation Plan"
as that phrase applies to Subtenant; provided, that, no greater obligations may
be imposed on Subtenant than on other Project occupants (including Sublandlord)
under like circumstances, and provided that Subtenant shall be reasonably
notified of obligations not included in the Master Lease or this Sublease.
(c) Sublandlord hereby grants to Subtenant the right to receive
all of the services with respect to the Premises which are to be provided by
Master Landlord under the Master Lease. Sublandlord shall have no responsibility
for or be liable to Subtenant for any default, failure or delay on the part of
Master Landlord in the performance or observance by Master Landlord of any of
its obligations under the Master Lease, nor shall such default by Master
Landlord affect this Sublease or waive or defer the performance of any of
Subtenant's obligations hereunder except to the extent that such default by
Master Landlord excuses performance by Sublandlord, under the Master Lease. In
the event of Master Landlord's failure to perform its obligations under the
Master Lease that inure to the benefit of Subtenant hereunder, Sublandlord
shall, after written request from Subtenant, take such steps as Sublandlord
determines to be commercially reasonable to secure Master Landlord's performance
of such obligations, provided (i) Subtenant pays, on demand, all reasonable
costs and expenses of Sublandlord associated therewith, and (ii) Subtenant is
not in Breach under this Sublease.
Subtenant acknowledges that it has been provided with a copy of the Master
Lease and that it has reviewed and analyzed all of its provisions, including the
Exhibits thereto, and that Subtenant is familiar with all of said provisions.
Notwithstanding anything in this Sublease to the contrary, (i) the obligations
of the parties under this Sublease shall not include acts for which Master
Landlord is solely responsible under the Master Lease and (ii) Subtenant's
rights under this Sublease shall not include any rights (vis a vis the Master
Landlord) not granted to Sublandlord as "Lessee" under the
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Master Lease nor any rights that are in violation of the provisions of the
Master Lease, except as specifically granted by Master Landlord. Subtenant
agrees to promptly notify Sublandlord of any default of Master Landlord under
the Master Lease of which Subtenant becomes aware.
If the termination of the Master Lease (and the resulting termination of
this Sublease) occurs, Sublandlord shall have no liability therefor to Subtenant
unless such termination results from Sublandlord's breach of the Master Lease or
this Sublease.
Notwithstanding anything to the contrary in this Sublease, Sublandlord
shall not be required to fulfill any obligation if unable to perform through no
fault of Sublandlord. Subtenant agrees that it will not take or permit any
action or fail to perform or observe any obligation, which causes an event of
default under the Master Lease and/or causes the Master Lease to be terminated
or forfeited, and Subtenant shall indemnify, defend, protect and hold harmless
Sublandlord from and against any and all claims, demands, suits, costs,
expenses, damages and liabilities, including reasonable attorneys' fees, arising
by reason of any act or omission on the part of the indemnifying party which is
in breach of this Paragraph.
30.2. COOPERATION WITH SUBTENANT. Sublandlord agrees to use commercially
reasonable efforts to cooperate with Subtenant in (1) obtaining for Subtenant
Master Landlord's consent to any action for which the Master Lease requires
Master Landlord's consent, and (2) delivering any notice to Master Landlord as
required by any provision of the Master Lease, including, without limitation,
forwarding (as soon as practicable after Sublandlord's receipt) any request made
by Subtenant to Master Landlord for consent or approval, and providing Master
Landlord with all information required (or that Master Landlord may reasonably
request) regarding any such request. The fact that Master Landlord has consented
to an action of Subtenant shall not in any way limit or restrict any right of
Sublandlord to withhold Sublandlord's consent to such action. Sublandlord shall
have no liability to Subtenant by reason of Master Landlord's refusal to consent
to any action of Subtenant.
30.3. SUBLANDLORD REPRESENTATIONS. Sublandlord hereby represents and
warrants that, at the time of Sublandlord's execution of this Sublease, (i) the
document attached as Exhibit A to this Sublease is a complete copy of the Master
Lease and that the Master Lease and the Additional Agreements represent the
entire agreement between Sublandlord and Master Landlord with respect to the
lease of the Premises, (ii) the Master Lease is in full force and effect, (iii)
Sublandlord is not in default under the Master Lease beyond any applicable
notice and cure period, and (iv) except as provided in the Additional
Agreements, Sublandlord has not assigned, encumbered or otherwise transferred
any interest in the Premises. The "Additional Agreements" shall mean the
following agreements, all of which Subtenant acknowledges having received copies
of and reviewed: Subordination, Acknowledgment of Lease Assignment,
Nondisturbance and Attornment Agreement and Estoppel Certificate (Lease to Deed
of Trust) between KeyBank National Association and Ariba, Inc., dated June 28,
2000; Subordination, Acknowledgment of Lease Assignment, Nondisturbance and
Attornment Agreement and Estoppel Certificate (Lease to Junior Deed of Trust)
between Lehman Ali, Inc. and Ariba, Inc. dated July 13, 2000; Letter from Jay
Paul Company regarding Tenant Improvements dated September 11, 2000;
Subordination, Acknowledgment of Lease Assignment, Nondisturbance and Attornment
Agreement and Estoppel Certificate among Ariba, Inc., Bank of America and
Moffett Park Drive LLC dated October 25, 2000; First Amendment to Lease between
Moffett Park Drive LLC, as Lessor, and Ariba, Inc., as Lessee, dated January 12,
2001; Tri-Party Agreement between Ariba, Inc. and KeyBank National Association,
dated February 14, 2001; Subordination, Acknowledgment of Lease Assignment,
Nondisturbance and Attornment Agreement and Estoppel Certificate between Lowe
Northwest Investor Properties I, L.L.C., and Ariba, Inc., dated April 30, 2002;
and five (5) executed Memoranda of Commencement of Lease Term dated March __,
2001, March __, 2001, March 30, 2001, April 24, 2001, and April 24, 2001,
respectively (Master Lease Exhibits E-1, E-2, E-3, E-4 and E-5).
30.4. MODIFICATION. Subject to Paragraph 30.6, Sublandlord shall neither
amend nor modify the Master Lease in such a way that will materially adversely
affect Subtenant's interest in this Sublease or increase Subtenant's
obligations, costs, or expenses, without the prior written consent of Subtenant,
which consent shall not be unreasonably withheld, conditioned or deferred.
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30.5. SUBLEASE CONSENT AND NON-DISTURBANCE AGREEMENT. The parties
acknowledges that, under the terms of the Master Lease, this Sublease requires
the prior written consent of Master Landlord. In accordance with this Master
Lease requirement, Subtenant shall have no right to use or occupy the Premises
prior to such time as Master Landlord provides its written consent to this
Sublease. Sublandlord and Subtenant each agree to use reasonable efforts to
obtain Master Landlord's consent and a non-disturbance agreement, and to provide
any information that Master Landlord may reasonably request. Sublandlord and
Subtenant acknowledge and agree that this Sublease is expressly conditioned upon
obtaining Master Landlord's prior written consent to this Sublease and
non-disturbance agreement in such form as is mutually agreeable to the parties
in their sole discretion. Until such time as Master Landlord has executed and
delivered a sublease consent and a non-disturbance agreement reasonably
acceptable to Sublandlord and Subtenant, Sublandlord and Subtenant shall each
have the right, by written notice to the other party, to terminate this
Sublease.
Sublandlord shall provide written notice to Master Landlord after the
occurrence of any of the following: (a) the exercise of the extension option
under this Sublease; (b) the occurrence of any holding over by Subtenant after
the expiration or prior termination of this Sublease; (c) the termination of
this Sublease. Sublandlord shall also provide to Master Landlord an
informational copy of any default notice given to Subtenant at the time it is
served.
Subtenant shall provide written notice to Master Landlord after the
occurrence of any of the following: (a) the exercise of the extension option
under this Sublease; or (b) any request by Subtenant to make alterations or
additions or to make other improvements to this Sublease Premises together with
copies of all notices, plans or other documents provided to Sublandlord or its
representatives in connection therewith. Subtenant shall also provide to Master
Landlord an informational copy of any default notice given to Sublandlord at the
time it is served.
30.6. MULTIPLE NEW MASTER LEASES. Master Landlord subdivided the land
underneath the Project into five legal parcels, with the result that each
Building is located on a separate legal parcel. Sublandlord shall have the
right, in its sole discretion, to agree to an amendment of the Master Lease, and
Subtenant agrees to concurrently enter into a new sublease or subleases on
substantially the same terms as this Sublease (including rights to Project
Common Areas and Amenity Areas) in which Subtenant agrees to accept reasonable
property restrictions placed in connection with the reparcelization; provided,
however, that the rights granted to Subtenant with respect to the Premises, the
Project Common Areas and the Amenity Areas shall not be affected. The procedure
for entering into such new sublease agreements shall be as follows: Sublandlord
shall give Sublessee notice of the amendment of the Master Lease, and,
thereafter, Sublandlord and Sublessee shall use reasonable good faith efforts to
agree upon, execute and deliver a new sublease agreement or agreements, which
sublease agreement(s) shall be, cumulatively, substantially similar to this
Sublease. The effectiveness of such new sublease shall be subject to and
conditioned upon delivery to Subtenant of a consent to sublease and
non-disturbance/recognition agreement in substantially the same form as was
delivered pursuant to Paragraph 30.5 in connection with the execution of this
Sublease. Sublandlord shall be entitled to retain any benefit conferred on or
granted to Sublandlord by virtue of the foregoing activities; Sublandlord and
Subtenant shall each bear their own costs in connection with the same.
30.7. CONFLICT. As between Sublandlord and Subtenant, in the event of a
conflict between the provisions of this Sublease and the provisions of the
Master Lease, the provisions of this Sublease shall control.
31. ATTORNEYS' FEES. If either Party brings an action or proceeding
involving the Premises whether founded in tort, contract or equity, or to
declare rights hereunder, the Prevailing Party (as hereafter defined) in any
such proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys' fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term, "Prevailing Party" shall include, without limitation, a
Party who substantially obtains or defeats the relief sought, as the case may
be, whether by compromise, settlement, judgment, or the abandonment by the other
Party of its claim or defense. The attorneys' fees award shall not be computed
in accordance with any court fee schedule, but shall be such as to fully
reimburse all attorneys' fees reasonably incurred. In addition, Sublandlord
shall be entitled to attorneys' fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach.
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32. SUBLANDLORD'S ACCESS TO PREMISES.
32.1. GENERALLY. In addition to Sublandlord's access rights to
Sublandlord's Server Room and MPOE Room, as provided in Paragraph 1.8 and
Paragraph 1.9 above, Sublandlord and Sublandlord's agents shall have the right
to enter the Premises at any time, in the case of an emergency, and otherwise
during business hours upon reasonable notice by telephone or electronic mail to
Subtenant's designated contact for the purpose of inspecting the Premises;
showing the Premises to prospective purchasers, lenders, or prospective tenants
(during the last six (6) months of the term hereof) and realtors; making such
repairs to the Premises as Sublandlord may deem necessary or desirable or that
Subtenant fails to perform; to access security and HVAC controls and network
connections for security and HVAC; and such other purposes as Sublandlord may
deem reasonably necessary or desirable, including but not limited to proper
functioning of Project security systems and climate control. Sublandlord shall
be accompanied by an employee of Subtenant (if required by Subtenant) during
non-emergency entries, and use reasonable efforts to be accompanied by a
security guard during emergency entries, and shall comply with all reasonable
security requirements of Subtenant which have been made known to Sublandlord in
writing prior to all such entries. Master Landlord and/or Sublandlord may at any
time place on the Premises any ordinary "For Sale" signs and may during the last
6 months of the term hereof place on the Premises any ordinary "For Lease"
signs. Subject to any approval rights of Master Landlord, Subtenant may at any
time place on the Premises any ordinary "For Lease" sign. Notwithstanding any
other provision of this Paragraph 32, Sublandlord may enter the Premises at any
time to take possession due to any Breach of this Sublease, subject to
applicable law.
32.2. SUBTENANT'S WAIVER. Sublandlord may enter the Premises without the
abatement of Rent and may take steps to accomplish the stated purposes.
Subtenant waives any claims for damages caused by Sublandlord's entry, including
damage claims for: (i) injuries; (ii) inconvenience to or interference with
Subtenant's business; (iii) lost profits; (iv) loss of occupancy or quiet
enjoyment of the Premises. During such entry Sublandlord shall accord reasonable
care to Subtenant's property and comply with Subtenant's reasonable security
measures which have been made known to Sublandlord in advance, in writing.
32.3. METHOD OF ENTRY. For entry as permitted by this Paragraph 32,
Sublandlord shall at all times have a key or, if applicable, a card key with
which to unlock all the doors in the Premises, and have access at all times to
such a key or card key through the Security Company. Sublandlord shall provide
Subtenant, and update as necessary, a list of employees holding such a key or
card key. In an emergency situation, Sublandlord shall have the right to use any
means that Sublandlord considers proper to open the doors in and to the
Premises. Any such entry into the Premises by Sublandlord shall not be
considered a forcible or unlawful entry into, or a detainer of, the Premises or
an actual or constructive eviction of Subtenant from any portion of the
Premises, so long as during such non-emergency entry Sublandlord shall accord
reasonable care to Subtenant's property and comply with Subtenant's reasonable
security measures which have been made known to Sublandlord through prior
written notice.
33. AUCTIONS. Subtenant shall not conduct, nor permit to be conducted, any
auction upon the Premises without Sublandlord's prior written consent.
Sublandlord shall not be obligated to exercise any standard of reasonableness in
determining whether to permit an auction.
34. SIGNS. Except as provided in this Paragraph 34, Subtenant shall not
place any sign upon the Project without Sublandlord's prior written consent.
Subtenant shall be permitted, at Subtenant's sole cost and expense, to install
and maintain signage on the face of Project-standard monuments in the Project as
well as directory signage in the lobby of Building Three. So long as Subtenant
occupies three full floors of Building Three and is not in Breach under this
Sublease, Subtenant shall have the exclusive right to install and maintain a
sign on the exterior of Building Three, at Subtenant's sole cost and expense. In
addition, should Subtenant at any point during the Term occupy the entire
second, third, and fourth floors of Building Four and the "B4 F1 Signage
Occupancy Area" on the first floor of Building Four as shown on Exhibit B, then
so long as Subtenant occupies such space and is not in Breach under this
Sublease, Subtenant shall have the exclusive right to install and maintain a
sign on the exterior of Building Four, at Subtenant's sole cost and expense. All
exterior building signage shall comply with the Site Signage Plan attached
hereto as Exhibit K. All signs are subject to Master Landlord's prior written
consent as provided in the Master Lease and all other applicable restrictions
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and requirements contained therein, shall comply in all regards with this
Paragraph 34 and with all Applicable Requirements.
35. [intentionally omitted]
36. CONSENTS. Except as otherwise provided herein, wherever in this
Sublease the consent of a Party is required to an act by or for the other Party,
such consent shall not be unreasonably withheld or delayed. Sublandlord's actual
reasonable costs and expenses (including but not limited to architects',
attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Subtenant for any Sublandlord
consent, including but not limited to consents to an assignment, a subletting or
the presence or use of any Hazardous Materials, shall be paid by Subtenant upon
receipt of an invoice and supporting documentation therefor. Sublandlord's
consent to any act, assignment or subletting shall not constitute an
acknowledgment that no Default or Breach by Subtenant of this Sublease exists,
nor shall such consent be deemed a waiver of any then existing Default or
Breach, except as may be otherwise specifically stated in writing by Sublandlord
at the time of such consent. The failure to specify herein any particular
condition to Sublandlord's consent shall not preclude the imposition by
Sublandlord at the time of consent of such further or other conditions as are
then reasonable with reference to the particular matter for which consent is
being given. In the event that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons for such
determination, the determining party shall furnish its reasons in writing and in
reasonable detail within 10 business days following such request.
37. QUIET POSSESSION. Subject to payment by Subtenant of the Rent and
performance of all of the covenants, conditions and provisions on Subtenant's
part to be observed and performed under this Sublease, Subtenant shall have
quiet possession and quiet enjoyment of the Premises during the term hereof.
38. OPTIONS. If Subtenant is granted an option, as defined below, then the
following provisions shall apply.
38.1. DEFINITION. "Option" shall mean: (a) the right to extend the term
of or renew this Sublease or to extend or renew any lease or sublease that
Subtenant has on other property of Sublandlord (b) the right of first refusal or
first offer to lease or sublease either the Premises or other portions of the
Project or other property of Sublandlord; (c) the right to purchase or the right
of first refusal to purchase the Premises or other property of Sublandlord.
38.2. MULTIPLE OPTIONS. In the event that Subtenant has any multiple
Options to extend or renew this Sublease, a later Option cannot be exercised
unless the prior Options have been validly exercised.
38.3. MASTER LEASE OPTIONS.
"Master Lease Option" shall mean: (a) the right to extend the term of or
renew the Master Lease or to extend or renew any lease or sublease that
Sublandlord has on other property of Master Landlord, (b) the right of first
refusal or first offer to lease or sublease either the Premises or other
property of Master Landlord; (c) the right to purchase or the right of first
refusal to purchase the Premises or other property of Master Landlord. Subtenant
shall have no right whatsoever in any Master Lease Option and Sublandlord shall
have the sole and absolute discretion regarding its exercise of its Master Lease
Options.
38.4. EFFECT OF DEFAULT ON OPTIONS.
(a) Subtenant shall have no right to exercise an Option: (i)
during the time Subtenant is in Breach of this Sublease, or (ii) in the event
that Subtenant has been given three (3) or more valid notices of separate,
material Default, whether or not the Defaults are cured, during the 12 month
period immediately preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Subtenant's inability to exercise
an Option because of the provisions of Paragraph 38.5(a) above.
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(c) Sublandlord shall have the right to have an Option terminate
and be of no further force or effect, notwithstanding Subtenant's due and timely
exercise of the Option, if, after such exercise and prior to the commencement of
the extended term, (i) Sublandlord gives to Subtenant 3 or more valid notices of
separate, material Default, whether or not the Defaults are cured, or (ii)
Subtenant commits a Breach of this Sublease.
39. OPTIONS TO EXTEND TERM.
(a) Subtenant shall have two (2) options to extend the Term of
this Sublease upon all of the terms and conditions contained herein, except that
the Base Rent for the renewal terms shall be ninety-five percent (95%) of the
"Fair Market Rental Rate" (as defined below) for the applicable period. The
first Option shall be to extend the Term for twenty-four (24) months, and is
referred to as the "First Renewal Option." The second Option shall be to further
extend the Term to January 24, 2013, and is referred to as the "Second Renewal
Option." The First Renewal Option and the Second Renewal Option are collectively
referred to as the "Renewal Options."
(b) Subtenant shall provide binding written notice to Sublandlord
of Subtenant's exercise of either of said Renewal Options ("Subtenant's Renewal
Notice") no later than nine (9) months, nor earlier than twelve (12) months,
prior to the expiration of the then-current Term. Within thirty (30) days after
receipt of Subtenant's Renewal Notice, Sublandlord will advise Subtenant of
Sublandlord's estimate of the Fair Market Rental Rate. If Subtenant agrees with
Sublandlord's estimate, or if Subtenant fails to respond to Sublandlord's
estimate of Fair Market Rental Rate within thirty (30) days after receipt
thereof, Sublandlord's estimate shall be binding. If Subtenant does so respond
and offers a different Fair Market Rental Rate, and if the parties are unable to
agree upon the Fair Market Rental Rate within thirty (30) days after such
response by Subtenant (the "Negotiation Period"), then such dispute shall be
settled by arbitration as described below.
(c) If Sublandlord and Subtenant are unable to agree upon the Fair
Market Rental Rate within the Negotiation Period, then the dispute shall proceed
to arbitration. The arbitration procedure shall commence when either party
submits the matter to arbitration. Not later than ten (10) days after the
arbitration procedure has commenced, each party shall appoint an arbitrator and
notify the other party of such appointment by identifying the appointee. Each
party hereto agrees to select as its respective appointee a licensed real estate
broker, who is an individual of substantial experience with respect to office
building ownership, management and marketing in Santa Clara County, which person
shall not be regularly employed or have been retained during the last two (2)
years as a consultant by the party selecting such person. Neither party may
consult directly or indirectly with any arbitrator regarding the Fair Market
Rental Rate prior to appointment, or after appointment, outside the presence of
the other party.
The arbitration shall be conducted under the provisions of the commercial
arbitration rules of the American Arbitration Association. Not later than (10)
days after both arbitrators are appointed, each party shall separately, but
simultaneously, submit in a sealed envelope to each arbitrator their separate
suggested Fair Market Rental Rate and shall provide a copy of such submission to
the other party. The two (2) selected arbitrators, after reviewing such
submissions, shall determine whether Sublandlord's or Subtenant's estimate of
the Fair Market Rental Rate is closer to the actual Fair Market Rental Rate for
the Premises. If both arbitrators agree that one of said declared estimates is
closer to the actual Fair Market Rental Rate, they shall declare that estimate
to be the Fair Market Rental Rate, and their decision shall be final and binding
upon the parties.
If the two (2) selected arbitrators are unable to agree that one of the
declared estimates is closer to the actual Fair Market Rental Rate, within
thirty (30) days after receipt of Sublandlord's and Subtenant's submitted
estimates, then the arbitrators shall inform the parties. Unless the parties
shall both otherwise then direct, said arbitrators shall select a third
arbitrator, not later than ten (10) days after the expiration of said thirty
(30) day period. If no arbitrator is selected within such ten (10) day period,
either party may immediately petition a court with appropriate jurisdiction to
appoint such third arbitrator. The third arbitrator shall meet the
qualifications and restrictions set forth above for the initial arbitrators, and
shall conduct an arbitration pursuant to the commercial arbitration rules of the
American Arbitration Association. The third arbitrator's decision shall be final
and binding as to which estimate (as between Sublandlord's and Subtenant's) of
the Fair Market Rental Rate is closer to the actual Fair Market Rental Rate.
Such third arbitrator shall make a decision not later than thirty (30) days
after
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appointment.
Each party shall be responsible for the costs, charges and/or fees of its
respective appointee, and the parties shall share equally in the costs, charges
and/or fees of the third arbitrator. The decision of the arbitrator(s) may be
entered in any court having jurisdiction thereof.
(d) The term "Fair Market Rental Rate" shall mean the annual
amount per rentable square foot that a willing, comparable, non-equity,
non-renewal, non-expansion new tenant would pay and a willing, comparable
landlord would accept at arm's length, giving appropriate consideration to
annual rental rates per rentable square foot, the credit strength of Subtenant,
the type of escalation clauses (including, but without limitation, operating
expense, real estate taxes, CPI), the extent of liability under the escalation
clauses (e.g., whether determined on a "net lease" basis or by increases over a
particular base year or base dollar amount), tenant improvement allowance,
abatement provisions reflecting free rent and/or no rent during the period of
construction or any other period during the lease term, brokerage commissions,
if any, length of lease term, size and location of Premises being leased, and
other generally applicable terms and conditions of tenancy for the space in
question.
(e) Following exercise by Subtenant of a Renewal Option and
determination of the Base Rent for the respective option period, at the request
of either party hereto and within thirty (30) days after such request,
Sublandlord and Subtenant shall enter into a supplement to this Sublease
confirming the terms, conditions and provisions applicable to the related
Renewal Period as determined in accordance herewith.
40. RIGHTS TO EXPAND. Subject to the Master Landlord Rights (defined below)
and the terms and conditions of this Section 40, Subtenant shall have the Right
of First Refusal and Offer Right described below (collectively, "Expansion
Rights").
40.1. RIGHT OF FIRST REFUSAL. During the Term of this Sublease, Subtenant
shall have a right of first refusal ("Right of First Refusal") to sublease the
second, third and fourth floors of Building Four ("B4 ROFR Space") as portions
thereof become available from time to time, on the same terms and conditions
that Sublandlord is prepared to accept from any third party. When Sublandlord
receives an offer to sublease space in the Project which includes any portion of
the B4 ROFR Space (the entire space subject of the offer being defined as the
"ROFR Space") from a third party which Sublandlord desires to accept,
Sublandlord shall notify Subtenant in writing of the terms and conditions of
such offer, and Subtenant shall thereafter have five (5) business days from
receipt of such notice in which to accept or reject that offer by written notice
to Sublandlord. If Subtenant rejects or fails to accept the offer in writing
within that time, then Sublandlord shall be free to sublease the ROFR Space to
the third party on substantially similar terms and conditions to those offered
to Subtenant in the foregoing manner. The Right of First Refusal shall apply
only with respect to:
(a) the entire ROFR Space, including any space outside the B4 ROFR
Space, and may not be exercised with respect to only a portion of the ROFR
Space; and
(b) the entire term proposed in the third party offer, provided
that (i) if the proposed initial term (excluding any options to extend) would
expire prior to expiration of the Term, then the term for the ROFR Space shall
be extended to be coterminous with the Term (including any extension thereof
pursuant to (x) a previously-exercised, valid Renewal Option, or (y) if
Subtenant has not previously exercised a Renewal Option, Subtenant may exercise
any available Renewal Option concurrently with its acceptance of Sublandlord's
offer, whether or not the time for exercise has occurred pursuant to Paragraph
39) and (ii) if more than thirty (30) months remain on the Term (including any
extension thereof pursuant to previously-exercised, valid Renewal Options)
following the commencement date specified in the offer, Subtenant shall have the
right to limit the term stated in the offer to be coterminous with the Term.
No extension or renewal rights included in the third party offer shall be
included in an ROFR Space sublease to Subtenant; provided that with respect to
any ROFR Space with a term coterminous with the Term, Subtenant shall have
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the right to extend the term pursuant to the terms and conditions of any
unexercised Renewal Options under Paragraph 39 of this Sublease.
If Subtenant has validly exercised a Right of First Refusal pursuant to
this Paragraph 40, then the ROFR Space shall be included in the Premises
hereunder, subject to all the agreements, terms and conditions of this Sublease,
with the following exceptions and modifications:
(i) The terms and conditions of the third party offer,
with any modifications with respect to the term as described above, shall govern
with respect to the ROFR Space and shall control in the event of inconsistency
with the provisions of this Sublease;
(ii) The rentable area of the Premises shall be increased
by the rentable area of the ROFR Space;
(iii) Subtenant's Project Share, Subtenant's allotment of
parking spaces, and the amount of the Security Deposit shall be increased
proportionately to reflect the rentable area of the ROFR Space; and
(iv) Subtenant shall take the ROFR Space on an "as is"
basis, provided that if the terms of the third party offer include any tenant
improvement package, such tenant improvement package shall be provided (on an
equal dollar value basis rather than the same improvements).
40.2. OFFER RIGHT. Subtenant acknowledges the existence of a sublease
agreement between Sublandlord and a third party, Interwoven, Inc. ("Interwoven
Sublease"), under which Interwoven already holds a subleasehold interest in the
third and fourth floors of Building Four ("Interwoven B4 Space"), for a term of
forty-eight (48) months beginning on August 1, 2003, with an option to extend
the term for an additional sixty-four (64) months and twenty-four (24) days. In
addition to the Right of First Refusal, Subtenant shall have a one-time right
("Offer Right") to expand the Premises to include all or any portion of the
Interwoven B4 Space, on the following terms and conditions.
In the event Interwoven's subleasehold interest with respect to all or any
portion ("Terminated Portion") of the Interwoven B4 Space terminates at any time
within the first twelve (12) months following the Sublease Commencement Date (as
defined herein), and provided that upon such termination becoming effective
Sublandlord has not received an offer from a third party to sublease all or a
portion of the Interwoven B4 Space which Sublandlord desires to accept, then
Sublandlord shall provide a written offer ("Offer Notice") to Subtenant to
sublease the Terminated Portion of the Interwoven B4 Space on the same terms and
conditions as this Sublease, except for the following:
(a) Base Rent shall be payable at the same rate per rentable
square foot as is payable as Base Rent by Sublandlord under the Master Lease
during the same time period;
(b) The rentable area of the Premises shall be increased by the
rentable area of the Terminated Portion of the Interwoven B4 Space;
(c) Subtenant's Project Share, Subtenant's allotment of parking
spaces, and the amount of the Security Deposit shall be increased
proportionately to reflect the rentable area of the Terminated Portion of the
Interwoven B4 Space; and
(d) Subtenant shall take the Terminated Portion of the Interwoven
B4 Space on an "as is" basis
Subtenant shall have five (5) business days after receipt of the Offer
Notice in which to exercise the Offer Right by written notice to Sublandlord. If
Subtenant rejects or fails to accept the offer in writing within that time, then
(i) the Offer Right shall terminate and become null and void and (ii)
Sublandlord shall be free to occupy for its own use, or to sublease to any third
party, all or any portion of the Interwoven B4 Space, subject to the Right of
First Refusal set forth in
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Paragraph 40.1.
40.3. GENERALLY. No subleasing of any ROFR Space or Interwoven B4 Space
(collectively, "Expansion Space") pursuant to an Expansion Right will be
effective without the prior written consent of Master Landlord, as required
under the Master Lease. Each Expansion Right shall be further subject to Master
Landlord's recapture rights under Section 11.06 of the Master Lease.
Collectively, the consent requirement and recapture rights are defined as the
"Master Landlord Rights".
It shall be a condition to Subtenant's right to exercise an Expansion Right
under this Paragraph 40 that, at the time Subtenant notifies Sublandlord of the
exercise of such Expansion Right, (i) there remains at least twelve (12) months
on the Term of this Sublease (including (x) any extension thereof pursuant to
previously-exercised, valid Renewal Options or (y) if Subtenant has not
previously exercised a Renewal Option, Subtenant may exercise any available
Renewal Option concurrently with its acceptance of Sublandlord's offer, whether
or not the time for exercise has occurred pursuant to Paragraph 39), (ii)
Subtenant is not in Breach under this Sublease, and (iii) neither this Sublease
nor Subtenant's right of possession shall have been terminated and this Sublease
shall then be in full force and effect. After Subtenant validly exercises an
Expansion Right, the parties shall execute an amendment to this Sublease adding
the Expansion Space, promptly after Sublandlord shall prepare the same,
confirming the subleasing of such Expansion Space to Subtenant; provided that if
Sublandlord reasonably determines that a new sublease is necessary or
appropriate for the Expansion Space, the parties shall execute the same promptly
after preparation by Sublandlord. An otherwise valid exercise of an Expansion
Right shall be fully effective, whether or not such confirmatory documentation
is executed.
If Subtenant shall exercise an Expansion Right granted in this Sublease,
Sublandlord does not guarantee that the Expansion Space will be available on the
commencement date for the sublease thereof if the then existing occupants of the
Expansion Space shall holdover, or for any other reason beyond Sublandlord's
reasonable control. In that event, Subtenant's sole recourse shall be that the
rent with respect to the Expansion Space shall be abated until Sublandlord
delivers possession of the same to Subtenant. Subtenant's exercise of that
Expansion Right shall not operate to cure any Default by Subtenant of any of the
terms or provisions in this Sublease, nor to extinguish or impair any rights or
remedies of Sublandlord arising by virtue of such Default.
Each and all Expansion Rights may not be exercised by any sublessee of
Subtenant for all or any portion of the Premises. Under no circumstances
whatsoever shall a subtenant (other than Subtenant) under a sublease of the
Premises or any portion thereof have any right to exercise an Expansion Right
granted in this Sublease.
41. [intentionally omitted]
42. RESERVATIONS. Subtenant agrees that Sublandlord and/or Master Landlord,
as the case may be, shall have the right: (i) to grant, without the consent or
joinder of Subtenant, such easements, rights and dedications that Sublandlord
deems necessary, (ii) to cause the recordation of parcel maps and restrictions,
and (iii) to create and/or install new utility raceways, so long as such
easements, rights, dedications, maps, restrictions, and utility raceways do not
unreasonably interfere with the use (including access and parking rights) of the
Premises by Subtenant. Subtenant agrees to sign any documents reasonably
requested by Sublandlord and/or Master Landlord to effectuate such rights.
43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay.
44. AUTHORITY. Each individual executing this Sublease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Sublease on its behalf. Each party shall, within 30 days after
request,
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deliver to the other party satisfactory evidence of such authority. This
Sublease may be executed and delivered in one or more counterparts, each of
which when so executed and delivered will be deemed to be an original and all of
which taken together will constitute but one and the same instrument, and
facsimile copies of the signatures set forth below will be deemed to be original
signatures for all purposes.
45. AMENDMENTS. This Sublease may be modified only in writing, signed by
the Parties in interest at the time of the modification. As long as they do not
materially change Subtenant's obligations, costs, or expenses hereunder,
Subtenant agrees to make such reasonable non-monetary modifications to this
Sublease as may be reasonably required by a Lender in connection with the
obtaining of normal financing or refinancing of the Premises.
46. EXHIBITS. Attached hereto are the following exhibits, which constitute
a part of this Sublease:
Exhibit A: Master Lease
Exhibit B: Premises
Exhibit C: Sublandlord's Rules and Regulations
Exhibit D: Furniture
Exhibit E: Cafeteria Access Provisions
Exhibit F: Fitness Center Access Provisions
Exhibit G: Commencement Date Memorandum
Exhibit H: Letter of Credit Form
Exhibit I: Work Letter
Exhibit J: Estoppel Certificate
Exhibit K: Site Signage Plan
Exhibit L: Environmental Documents
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IN WITNESS WHEREOF, Sublandlord and Subtenant have duly executed this
Sublease as of the day and year first above written.
SUBLANDLORD:
Ariba, Inc.,
a Delaware corporation
By: /s/ Michael Fancher
Its: VP & Corporate Controller
SUBTENANT:
NetScreen Technologies, Inc.,
a Delaware corporation
By: /s/ Remo Canessa
Its: CFO
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BROKER EXECUTION
By signing below, the indicated real estate broker or agent is not being
made a party hereto but is signifying its agreement with the provisions hereof
concerning brokerage. This Broker Execution may be executed and delivered in one
or more counterparts, each of which when so executed and delivered will be
deemed to be an original and all of which taken together will constitute but one
and the same instrument, and facsimile copies of the signatures set forth below
will be deemed to be original signatures for all purposes.
SUBLANDLORD'S BROKER: ADDRESS:
Cornish & Carey Commercial 2804 Mission College Boulevard, Suite 120
Santa Clara, California 95054
By: /s/ Phil Mahoney
Phil Mahoney
Its: EVP
Cushman and Wakefield
By: /s/ Hernan H. Santos
--------------------
Its: Senior Director
SUBTENANT'S BROKER: ADDRESS:
The Staubach Company 900 Hansen Way, Suite 250
Palo Alto, California 94304
By: /s/ Rich Branning
Rich Branning
Its: Ex VP
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Exhibit A
TECHNOLOGY CORNERS
TRIPLE NET MULTIPLE BUILDING LEASE
Between
MOFFETT PARK DRIVE LLC
a California limited liability company
as
LESSOR
and
ARIBA, INC.
a Delaware corporation
as
LESSEE
for
PREMISES
at
1111 Lockheed Martin Way
Sunnyvale, California 94089
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ARTICLE I
PARTIES
Section 1.01. Parties. This Lease, dated for reference purposes, and
effective as of March 15, 2000, is made by and between MOFFETT PARK DRIVE LLC, a
California limited liability company, or assignee, ("Lessor") and ARIBA, INC., a
Delaware corporation ("Lessee").
ARTICLE II
PREMISES
Section 2.01. Demise of Premises. Lessor hereby leases to Lessee and
Lessee leases from Lessor for the term, at the rental, and upon all of the terms
and conditions set forth herein, Premises consisting of four free standing, four
story office and research and development buildings (shown as Buildings "One,
"Two," "Three," and "Four" on Exhibit "A" hereto) and one ancillary building to
be used for such service and/or food purposes such as fitness spa, a day care,
dry cleaners and cafeteria for the benefit of Lessee's employees as determined
by Lessee but subject to Lessor's consent which shall not be unreasonably
withheld and subject to Lessor determining that it can obtain all City permit
and approval requirements pertaining to same ("Amenity Building") (collectively
"Buildings") to be constructed by Lessor on real property situated in the City
of Sunnyvale, County of Santa Clara, State of California and commonly known as
1111 Lockheed Martin Way, Sunnyvale, California (the "Property"). Each office
and research and development Building will consist of approximately one hundred
seventy five thousand (175,000) rentable square feet and the Amenity Building of
approximately fifteen thousand (15,000) rentable square feet, as more
particularly described and depicted herein in Exhibit "A" for a total of seven
hundred fifteen thousand (715,000) rentable square feet. The actual rentable
square footage of the Buildings (the "Rentable Area") will be determined and
certified by Lessor's architect by a method described as "dripline," whereby the
measurement encompasses the outermost perimeter of each constructed building,
including every projection thereof and all area beneath each such projection,
whether or not enclosed, with no deduction for any inward deviation of structure
and with the measurement being made floor by floor, beginning from the top of
the Building. The Buildings, including the Amenity Building, and appurtenances
described herein, the Property, and all other improvements to be built on the
Property including a parking structure are together designated as the "Project."
Each Building for which the Delivery Date as provided in Section 3.01(b) (or any
earlier deemed Delivery Date as provided in Section 4.01) has occurred, and
those portions of the Project (other than the Buildings) as to which possession
has been tendered to Lessee following substantial completion of all improvements
to be constructed thereon by Lessor, shall collectively be referred to herein as
the "Premises."
Section 2.02. Outside Area. During the Lease Term, Lessee shall have the
right to use the Outside Area defined herein surrounding the Buildings. Lessor
reserves the right to modify the Outside Area, including reducing the size or
changing the configuration and elements thereof in its sole discretion and to
close or restrict access from time-to-time for repair, maintenance or to prevent
a dedication thereof, provided that Lessee nonetheless shall have access to
parking and the Premises (including all Buildings) at all times. Lessor further
reserves the right to
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establish, repeal and amend from time-to-time rules and regulations for the use
of the Outside Area and to grant reciprocal easements or other rights to use the
Outside Area to owners of other property, which shall not unreasonably interfere
with use or enjoyment of the Premises.
Section 2.03. Parking. Lessor shall provide Lessee with parking as
required by the City of Sunnyvale at the Premises. In the event Lessor elects or
is required by any law to limit or control parking at the Premises, whether by
validation of parking tickets or any other method of assessment, Lessee agrees
to participate in such validation or assessment program under such reasonable
rules and regulations as are from time-to-time established by Lessor.
Section 2.04. Construction.
(a) Government Approvals. Lessor shall diligently pursue obtaining
governmental approval of a Site Plan and Buildings designs and elevations with
respect to the development of the Premises, copies of which are attached hereto
as Exhibit "A." The parties acknowledge and agree that the final footprint and
elevations of the Buildings may vary from those attached as Exhibit "A" because
the plans and specifications will undergo a plancheck process with the City of
Sunnyvale and Lessor will make such revisions as are required or are otherwise
deemed necessary or appropriate by Lessor, provided however, that nothing herein
shall be deemed to relieve Lessor from the duty to develop the Buildings
substantially in compliance with Exhibit "A".
(b) Construction of Building Shells. Lessor, utilizing Rudolph & Sletten
(or such alternate as Lessor in its sole discretion may select) as general
contractor ("General Contractor"), shall construct the "Building Shell" (as
defined in the attached Exhibit "D") for each Building in accordance with (i)
plans and specifications to be attached as Exhibit "B" and (ii) all existing
applicable municipal, local, state and federal laws, statutes, rules,
regulations and ordinances: Lessor shall pay all costs of constructing the
Building Shells. Lessor and Lessee acknowledge and agree that the definition of
"Building Shell" includes all required landscaping and site improvements for the
Project as set forth in plans approved by the Lessor and the City of Sunnyvale.
(c) Construction of Tenant Improvements. All improvements not included
within the scope of the Building Shells shall be deemed "Tenant Improvements."
Lessor, using the General Contractor, shall construct the Tenant Improvements
and Lessee shall pay all costs associated with same.
(d) Tenant Improvement Plans and Cost Estimate. Lessee shall work with
Lessee's architect to develop interior schematic drawings and Lessee shall
approve final interior schematic drawings for the Tenant Improvements for all
Buildings and obtain Lessor's approval thereof (which approval shall not be
unreasonably withheld or delayed) no later than May 15, 2000. Lessee shall work
with Lessor's architect to develop working drawings outlining, among other
things, Lessee's wall layout, detailed electrical, plumbing and air conditioning
requirements and finishes ("Working Drawings") and Lessee shall approve final
Working Drawings for the Buildings on or before July 1, 2000 for Building Three
and the Amenity Building, July 21, 2000 for Building Four, August 5, 2000 for
Building Two and September 8, 2000 for Building One. The cost of the interior
schematic drawings and Working Drawings shall
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be a Tenant Improvement cost and Lessor agrees that Lessor's architect's fees
shall not vary materially from the range of fees charged for similar work for
similar tenant improvements under similar time constraints by architects of
similar ability, experience and expertise in the Silicon Valley community. Based
on this information, Lessor shall cause the General Contractor to prepare and
deliver to Lessee a budget for the Tenant Improvements ("Budget"). Lessee shall
approve the Budget (or modify the same with Lessor's consent), in writing,
within ten (10) business days thereafter. The Working Drawings and Budget must
be approved by Lessor in writing and be of quality equal to or greater than the
Interior Specifications standards set forth in Exhibit "C." Once the Budget is
approved, Lessor shall enter into a guaranteed maximum price contract with the
General Contractor for the construction of the Tenant Improvements consistent
with the approved Budget. A Lessee representative may attend construction
meetings between Lessor and its General Contractor concerning Tenant
Improvements, but nothing herein shall either (i) create or imply a duty on the
part of Lessor to notify Lessee of such meetings, or (ii) invalidate or
otherwise affect in any manner anything which takes place at or as a result of
any such meeting which Lessee's representative fails to attend, whether or not
it had notice of same.
(e) Construction Plans. The complete, detailed plans and specifications
for the construction of the Shell Buildings shall be attached as Exhibit "B" and
incorporated into this Lease. Attached as Exhibit "C" to this Lease is a Work
Letter Agreement for Tenant Improvements, and Exhibit "D," Cost Responsibilities
of Lessor and Lessee, which together with this Section 2.04, describe the
planning and payment responsibilities of Lessor and Lessee with respect to the
construction of the Building Shells and Tenant Improvements at the Premises. All
approved Tenant Improvements shall be constructed in accordance with a
construction schedule approved by Lessor and no portion of any Building shall
remain unimproved.
(f) Tenant Improvement Costs. Lessor shall provide to Lessee semi-improved
"cold" shell facilities as described in Exhibit "D" attached. Lessor shall cause
the General Contractor to construct the Tenant Improvements outlined in Exhibit
"D," as further outlined in the Tenant Improvement Work Letter attached as
Exhibit "C" and Lessee shall pay all costs and expenses of same. Subcontracts
for all Tenant Improvement Work shall be obtained by a sealed competitive bid
process (involving at least two qualified bidders) wherever practical and as to
work done without such process, Lessor or the General Contractor shall provide
reasonable assurance to Lessee that the cost and expense of same is competitive
in the industry for first-class workmanship and materials. Lessor shall use good
faith efforts (and instruct the General Contractor to do same) to keep Lessee
generally informed as to all aspects of the pricing, bidding, contracting and
construction processes with respect to the Tenant Improvements.
(g) Payment for Tenant Improvements. Within six (6) months after execution
of this Lease by both parties, Lessee shall deposit with Lessor an
unconditional, irrevocable standby letter of credit in the amount of Fourteen
Million, Three Hundred Thousand Dollars ($14,300,000), with Lessor as
beneficiary and providing for payment on presentation of Lessor's draft(s) on
sight, without documents, drawable in whole or in part on a money center bank in
San Francisco acceptable to Lessor with a twelve (12) month term and in all
other ways in form acceptable to Lessor, with, in all cases, Lessor's approval
being in its sole discretion. Within ten (10) business days after the Budget is
approved by Lessor and Lessee, Lessee shall deposit cash in an amount equal to
twenty-five (25%) percent of the amount budgeted for Tenant Improvements
(together with the cost of any Tenant Improvements already made) with Lessor's
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construction lender to be held in an interest bearing escrow account. Said
construction lender shall issue payments from said account pursuant to the
construction contract for the Tenant Improvements until the account is
exhausted, whereupon any remaining payments shall be made 100% directly by
Lessee. Lessor shall manage the construction of the Tenant Improvements for a
supervision fee of 3% of the Budget (as the same may change by agreement of the
parties) due and payable in nine equal monthly installments beginning on the
first day of the calendar month following the calendar month in which the Budget
is first approved. Lessor may draw down on the letters of credit in whole or in
part and in such amounts as it deems appropriate in its sole discretion if
Lessee fails to comply with any of its obligations under this Lease including,
without limitation, full and timely payments of amounts due under the
construction contract for Tenant Improvements. Lessor shall return the aforesaid
letter of credit upon the lien free completion of Tenant Improvements, payment
of all amounts due to the General Contractor for the Tenant Improvements,
acceptance of same by Lessee and commencement of payment of rent as to all
Buildings, provided that if those events have not occurred prior to expiration
of the letter of credit, Lessor shall be entitled to draw on said letter of
credit in an amount equal to any amount then outstanding with respect to the
construction or installation of Tenant Improvements or for any other amount then
due or unpaid under this Lease.
(h) Lessee's Fixturing Period. Lessor shall provide Lessee access to each
Building during the thirty (30) day period prior to the Delivery Date for such
Building ("Lessee's Fixturing Period") for the purpose of installing furnishings
and equipment, e.g. security system, furniture system and phone and data system,
provided, that Lessee and Lessee's employees and contractors shall at all times
avoid interfering with Lessor's ongoing work to bring the Premises to a
substantially completed condition. Except for payment of Base Rent, all terms
and provisions of this Lease shall apply during Lessee's Fixturing Period,
including, without limitation, Lessee's indemnity and other obligations set
forth in Sections 7.07., 7.08. and 17.22. hereof and payment of Additional Rent
pursuant to Section 4.05 hereof.
ARTICLE III
TERM
Section 3.01. Lease Term.
(a) Commencement Date. The term of this Lease ("Lease Term") shall be for
at least twelve (12) years beginning on the earlier of (i) the date Lessee first
occupies any part of any Building (other than by the fixturing activities
authorized under Section 2.04.(h) or conducts business at the Premises or (ii)
the date a Certificate of Occupancy first is issued affecting any Building (the
"Commencement Date") provided that, (i) for each day of delay by Lessee in
failing to approve the interior schematic drawings or the Working Drawings when
required under Section 2.04(d), (ii) for each day of delay by Lessee in failing
to approve the Budget, in writing, within seven (7) days after delivery by the
General Contractor as provided in Section 2.04(d), or (iii)) for each day of
delay caused by any changes to the approved Working Drawings requested by Lessee
or (iv)) for each day that any other act or omission by Lessee causes the
construction schedule for Tenant Improvements to be delayed (collectively
"Lessee Delay"), the Commencement Date shall occur one (1) day in advance of the
date of issuance of the first Certificate of Occupancy for each day of delay
provided that Lessor shall give Lessee written notice of any such Lessee Delay
described in clause (iii), or (iv) within seven (7)
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business days after commencement of the alleged delay. For example, if seven (7)
days of Lessee Delay causes the date of issuance of the Certificate of Occupancy
to occur on January 8, 2001 rather than January 1, 2001, the Commencement Date
shall be January 1, 2001 for all purposes, including payment of Base Rent and
Additional Rent. The Lease Term shall expire, unless sooner terminated or
extended as provided herein, on the date which completes twelve (12) years after
the Commencement Date ("Expiration Date"). The parties shall execute a
"Memorandum of Commencement of Lease Term" when the Commencement Date becomes
known, which shall include a certification of the actual Rentable Area of the
Buildings determined by the methodology described in Section 2.01. and the
actual monthly installments of Base Rent to be paid pursuant to Section 4.01.,
and shall be substantially in the form attached hereto as Exhibit "E."
Certificate of Occupancy means a document so titled or its equivalent,
signifying that the Building in question can be legally occupied.
(b) Scheduled Delivery Dates. Lessor shall use commercially reasonable
efforts to cause Certificates of Occupancy to be issued for Building Three no
later than January 25, 2001, ("First Scheduled Delivery Date"); then February
15, 2001 for Building Four; March 8, 2001 for Building Two; and March 29, 2001
for Building One and March 29, 2001 for the Amenity Building. If a Certificate
of Occupancy is not issued for any one or more Buildings on or before its
Scheduled Delivery Date, this failure shall not affect the validity of this
Lease or the obligations of Lessee under it. If the Commencement Date is
adjusted for delay from any cause, the Expiration Date shall be likewise
adjusted for a like period. It is understood and agreed that the Amenity
Building may be delayed by the particular permitting, planning and finishing
needs of the use(s) desired by Lessee. The actual delivery date for each
Building shall be the date on which Lessor tenders possession of the Building to
Lessee after a Certificate of Occupancy is issued for such Building ("Delivery
Date").
(c) Termination in Event of Delay. If for any reason Lessor is unable to
cause the issuance of a Certificate of Occupancy for any Building, on or before
the date which is one hundred eighty (180) days after the Scheduled Delivery
Date for such Building (for a reason other than Lessee Delay or delay excused
under Section 17.21.), Lessee, at its sole election, may terminate this Lease
upon giving notice within ten (10) days thereafter. Failure to give such notice
within said time period constitutes an irrevocable waiver of the foregoing right
to terminate under this Section 3.01 (c).
(d) Occupancy. Lessee shall commence occupancy of each Building no later
than thirty (30) days after its Delivery Date.
Section 3.02. Option to Extend.
(a) Exercise. Lessee is given one (1) option to extend the Lease Term
("Option to Extend") for a five (5) year period ("Extended Term") following the
date on which the initial Lease Term would otherwise expire, which option may be
exercised only by written notice ("Option Notice") from Lessee to Lessor given
not less than twelve (12) months prior to the Expiration Date of the initial
Lease Term ("Option Exercise Date"); provided, however, if Lessee is in material
default under this Lease (after written notice and beyond the expiration of any
applicable notice period) on the Option Exercise Date or on any day thereafter
on or before the last day of the initial Lease Term, the Option Notice shall be
totally ineffective) and this
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Lease shall expire on the last day of the initial Lease Term, if not sooner
terminated in accordance with the terms of this Lease.
(b) Extended Term Rent. In the event Lessee exercises its Option to Extend
set forth herein, all the terms and conditions of this Lease shall continue to
apply except that the Base Rent payable by Lessee during the Option Term shall
be equal to one hundred percent (100%) of Fair Market Rent (defined below), as
determined under subparagraph (c) below. A "Fair Market Rent" shall mean the
effective rate being charged (including periodic adjustments thereto as
applicable during the period of the Extended Term), for comparable space in
similar buildings in the vicinity, i.e. of a similar age and quality considering
any recent renovations or modernization, and floor plate size or, if such
comparable space is not available, adjustments shall be made in the
determination of Fair Market Rent to reflect the age and quality of the
Buildings and Premises as contrasted to other buildings used for comparison
purposes, with similar amenities, taking into consideration: size, location,
floor level, leasehold improvements or allowances provided or to be provided,
term of the lease, extent of services to be provided, the time that the
particular rate under consideration became or is to become effective, and any
other relevant terms or conditions applicable to both new and renewing tenants,
but in no event less than the monthly Base Rent prevailing during the last year
of the initial Lease Term and without any downward adjustment in rent for the
Amenity Building which shall be deemed to be of identical Fair Market Rent value
as the four office and research and development Buildings.
(c) Determination of Fair Market Rent.
(i) Negotiation. If Lessee so exercises the Option to Extend in a
timely manner, the parties shall then meet in good faith to negotiate the Base
Rent for the Premises for the Extended Term, during the first thirty (30) days
after the date of the delivery by Lessee of the Option Notice (the "Negotiation
Period"). If, during the Negotiation Period, the parties agree on the Base Rent
applicable to the Premises for the Extended Term, then such agreed amount shall
be the Base Rent payable by Lessee during the Extended Term.
(ii) Arbitration. In the event that the parties are unable to agree
on the Base Rent for the Premises within the Negotiation Period, then within ten
(10) days after the expiration of the Negotiation Period, each party shall
separately designate to the other in writing an appraiser to make this
determination. Each appraiser designated shall be a member of MAI and shall have
at least ten (10) years experience in appraising commercial real property in
Santa Clara County. The failure of either party to appoint an appraiser within
the time allowed shall be deemed equivalent to appointing the appraiser
appointed by the other party, who shall then determine the Fair Market Rent for
the Premises for the Extended Term. Within five (5) business days of their
appointment, the two designated appraisers shall jointly designate a third
similarly qualified appraiser. Within thirty (30) days after their appointment,
each of the two appointed appraisers shall submit to the third appraiser a
sealed envelope containing such appointed appraiser's good faith determination
of the Fair Market Rent for the Premises for the Extended Term; concurrently
with such delivery, each such appraiser shall deliver a copy of his or her
determination to the other appraiser. The third appraiser shall within ten (10)
days following receipt of such submissions, then determine which of the two
appraisers' determinations most closely reflects Fair Market Rent as defined
above. The determination most closely reflecting the third appraiser's
determination shall be the Base Rent for the Premises
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during the Extended Term; the third appraiser shall have no rights to adjust,
amend or otherwise alter the determinations made by the appraiser selected by
the parties, but must select one or the other of such appraisers' submissions.
The determination by such third appraiser shall be final and binding upon the
parties. Said third appraiser shall, upon selecting the determination which most
closely resembles Fair Market Rent, concurrently notify both parties hereto. The
parties shall share the appraisal expenses equally. If the Extended Term begins
prior to the determination of Fair Market Rent, Lessee shall pay monthly
installments of Base Rent equal to one hundred ten percent (110%) of the monthly
installment of Base Rent in effect for the last year of the initial Lease Term
(in lieu of "holdover rent" payable under Section 17.09(b)). Once a
determination is made, any over payment or under payment shall be reimbursed as
a credit against, or paid by adding to, the monthly installment of Base Rent
next falling due.
Section 3.03. Financing Contingency. Notwithstanding any other provision
hereof it is understood and agreed that this Lease may be terminated by Lessor
on five (5) days advance written notice to Lessee if Lessor determines that it
is unable to obtain financing of the Project on terms and conditions
satisfactory to Lessor in its sole discretion, provided, that if Lessor has not
exercised its right to terminate under this Section 3.03 on or before March 31,
2000, it shall be deemed to have waived such right and this provision shall
automatically expire and become null and void.
ARTICLE IV
RENT: TRIPLE NET LEASE
Section 4.01. Base Rent. Subject to adjustment of Rentable Area pursuant
to Section 2.01(a) and concomitant adjustment to Base Rent, Lessee shall pay to
Lessor as Base Rent an initial monthly installment of Three Dollars ($3.00) per
square foot of Rentable Area of the Premises as determined under Section 2.01.,
in advance, on the first day of each calendar month of the Lease Term,
commencing on the Commencement Date. Base Rent for any period during the Lease
Term which is for less than one month shall be a pro rata portion of the monthly
installment (based on the actual days in that month). It is expected that Base
Rent will be calculated initially on the first Building on its Delivery Date and
that it will be increased by the Rentable Area of each other Building as of the
Delivery Date for such Building (or as to each Building, such earlier deemed
Delivery Date as may result from Lessee Delay with respect to such Building,
calculated in the same manner as the advancement of the Commencement Date is
calculated, i.e. advanced by one day for each day of delay in completion of the
subject Building caused by Lessee Delay).
Section 4.02. Rent Adjustment. The Base Rent set forth in Section 4.01.
above shall be adjusted upward by an annual compounded increase of four percent
(4%), as of the first day of the thirteenth (13th) full calendar month following
the Commencement Date and as of the first day of every thirteenth (13th)
calendar month thereafter during the Lease Term, as shown on Exhibit "E"
attached hereto.
Section 4.03. Advance Rental. Lessee shall pay to Lessor upon execution
hereof an advance payment equal to one month of estimated Base Rent for all
Buildings in the sum of Two Million One Hundred Forty-Five Thousand Dollars and
no Cents ($2,145,000.00), subject to
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being adjusted upon final measurement of each of the Buildings on or before the
Delivery Date for such Building, said payment to be applied to the first monthly
installments of Base Rent (and Base Rent for the following months, to the extent
this advance payment exceeds the first monthly installments of Base Rent as a
result of said final measurement of the Buildings). If the Commencement Date is
other than the first day of a calendar month, the first installment of Base Rent
shall be paid on the first day of the calendar month immediately succeeding the
Commencement Date and shall include pro rata payment for the calendar month in
which the Commencement Date occurs, less credit for the advance payment.
Section 4.04. Absolute Triple Net Lease.
(a) This Lease is what is commonly called a "Absolute Triple Net Lease,"
it being understood that Lessor shall receive the Base Rent set forth in Section
4.01. free and clear of any and all expenses, costs, impositions, taxes,
assessments, liens or charges of any nature whatsoever. Lessee shall pay all
rent in lawful money of the United States of America to Lessor at the notice
address stated herein or to such other persons or at such other places as Lessor
may designate in writing on or before the due date specified for same without
prior demand, set-off or deduction of any nature whatsoever. It is the intention
of the parties hereto that this Lease shall not be terminable for any reason by
Lessee, and that except as herein expressly provided in Articles III, VIII and
XIII, concerning delay, destruction and condemnation, Lessee shall in no event
be entitled to any abatement of or reduction in rent payable under this Lease.
Any present or future law to the contrary shall not alter this agreement of the
parties.
(b) To the extent not paid pursuant to other provisions of this Lease, and
at Lessor's sole election, Lessor may submit invoices and Lessee shall pay
Additional Rent in monthly installments on the first day of each month in
advance in an amount to be estimated by Lessor, based on Lessor's experience in
managing office/research and development projects. Within ninety (90) days
following the end of the period used by Lessor in estimating Additional Rent,
Lessor shall furnish to Lessee a statement (hereinafter referred to as "Lessor's
Statement") of the actual amount of Lessee's proportionate share of such
Additional Rent, or Lessor shall remit or credit to Lessee, as the case may be,
the difference between the estimated amounts paid by Lessee and the actual
amount of Lessee's Additional Rent for such period as shown by such statement.
Monthly installments for the ensuing year shall be adjusted upward or downward
as set forth in Lessor's Statement.
Section 4.05. Additional Rent. In addition to the Base Rent reserved by
Section 4.01., Lessee shall pay (with respect to the Premises), as Additional
Rent, all taxes, assessments, fees and other impositions in accordance with the
provisions of Article IX, insurance premiums in accordance with the provisions
of Article VII, operating charges, maintenance, repair and replacement costs and
expenses in accordance with the provisions of Article VI and any other charges,
costs and expenses (including appropriate reserves therefor) which are
contemplated or which may arise under any provision of this Lease during the
Lease Term, plus a Management Fee to Lessor equal to 3% of the Base Rent. The
Management Fee is due and payable, in advance, with each installment of Base
Rent. All of such charges, costs, expenses, Management Fee and all other amounts
payable by Lessee hereunder, shall constitute Additional Rent, and upon the
failure of Lessee to pay any of such charges, costs or expenses, Lessor shall
have the
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same rights and remedies as otherwise provided in this Lease for the failure of
Lessee to pay Base Rent. Notwithstanding any other provision of this Lease,
Additional Rent shall not include: (i) depreciation, interest, or amortization
on mortgages or ground lease payments, (ii) legal fees incurred in negotiating
and enforcing tenant leases, (iii) real estate brokers' leasing commissions,
(iv) initial improvements to tenant spaces, or alterations thereto requested by
tenants, (v) costs of any items to the extent Lessor receives reimbursement for
same from insurance proceeds or a third party, (vi) interest, principal,
depreciation, attorney fees, costs of environmental investigations or reports,
points, fees, and other lender costs and closing costs on any mortgage or
mortgages, ground lease payments, or other debt instrument encumbering any
portion of the Property, (vii) costs of (a) partnership or corporate accounting
and legal matters; defending or prosecuting any lawsuit with any mortgagee,
lender, ground lessor, broker, tenant, occupant, or prospective tenant or
occupant; selling or syndicating any of Lessor's interest in the Property; and
disputes between Lessor and Lessor's property manager; (b) the salaries of
management personnel who are not directly related to the Property and primarily
engaged in the operation, maintenance, and repair of the Property, except to the
extent that those costs and expenses are included in the management fees; (c)
wages, salaries, and other compensation paid to any executive employee of Lessor
or Lessor's property manager above the grade of building manager for the
Property; (viii) costs incurred because any Building or Outside Areas violate
any valid, applicable building code, regulation, or law in effect and as
interpreted by government authorities before the date on which this Lease is
signed for fines, penalties, interest, and the costs of repairs, replacements,
alterations, or improvements necessary to make any Building or Outside Areas
comply with applicable past laws in effect and as interpreted by government
authorities before the date on which this Lease is signed, such as sprinkler
installation or requirements under the Americans With Disabilities Act of 1990
(42 USC Sections 12101-12213); (ix) costs of initial construction of the
Buildings and other improvements to the Property; (x) charitable or political
contributions made by Lessor.
Section 4.06. Security Deposit. Within five (5) business days after the
date on which this Lease is executed by Lessee and Lessor, Lessee shall deposit
with Lessor a Security Deposit equal to twelve (12) months of Base Rent
estimated in the amount of Twenty Five Million Seven Hundred Forty Thousand
Dollars and no Cents ($25,740,000.00) in the form of cash or an unconditional,
irrevocable standby letter of credit, with Lessor as beneficiary and providing
for payment on presentation of Lessor's drafts on sight without documents and
drawable in whole or in part on a money center bank in San Francisco approved by
Lessor and otherwise in a form acceptable to Lessor, all in its sole discretion,
with a term of at least twelve (12) months and with a term during the last year
of the Lease Term which includes at least one full month following the
Expiration Date (the "Security Deposit"). The Security Deposit shall be held by
Lessor as security for the faithful performance by Lessee of all of the terms,
covenants, and conditions of this Lease applicable to Lessee. If Lessee defaults
with respect to any provision of this Lease, including but not limited to, the
provisions relating to the construction of Tenant Improvements and the condition
of the Premises upon Lease Termination, Lessor may (but shall not be required
to) use, apply or retain all or any part of the Security Deposit for the payment
of any amount which Lessor may spend by reason of Lessee's default or to
compensate Lessor for any loss or damage which Lessor may suffer by reason of
Lessee's default and if all or any part of the Security Deposit is in the form a
of a letter of credit, Lessor may draw on all or any part of same and thereafter
retain any unapplied portion as a cash Security Deposit. If any portion of the
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Security Deposit is so used or applied, Lessee Shall, within ten (10) days after
written demand therefor, deposit cash with Lessor in an amount sufficient to
restore the Security Deposit to its original amount. Lessee's failure to do so
shall be a material default and breach of this Lease by Lessee. The rights of
Lessor pursuant to this Section 4.06. are in addition to any rights which Lessor
may have pursuant to Article XII below. If Lessee fully and faithfully performs
every provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned (without interest) to Lessee (or, at Lessor's
option, to the last assignee of Lessee's interests hereunder) at Lease
expiration or termination and after Lessee has vacated the Premises. Lessor
shall not be required to keep the Security Deposit separate from Lessor's
general funds or be deemed a trustee of same. If the Security Deposit is in
whole or in part in the form of a Letter of Credit, failure of Lessee to deliver
a replacement Letter of Credit to Lessor at least forty-five (45) business days
prior to the expiration date of any current Letter of Credit shall constitute a
separate default entitling Lessor to draw down immediately and entirely on the
current Letter of Credit and the proceeds shall constitute a cash Security
Deposit. The amount of the Security Deposit shall be reduced to a cash amount
equal to three months of Base Rent at the rate scheduled for the final year of
the initial Lease Term, in cash, upon Lessee's achievement of four (4)
consecutive calendar quarters of an annualized run rate of $750,000,000.00 in
revenue and $100,000,000.00 in net income.
ARTICLE V
USE
Section 5.01. Permitted Use and Limitations on Use. The Premises shall be
used and occupied only for office, research and development, together with such
ancillary uses which do not cause excessive wear of the Premises or increase the
potential liability of Lessor, and for no other use, without Lessor's prior
written consent. Lessee shall not use, suffer or permit the use of the Premises
in any manner that will tend to create waste, nuisance or unlawful acts. In no
event shall it be unreasonable for Lessor to withhold its consent as to uses
which it determines would tend to increase materially the wear of the Premises
or any part thereof or increase the potential liability of Lessor or decrease
the marketability, financability, leasability or value of the Premises. Lessee
shall not do anything in or about the Premises which will (i) cause structural
injury to any Building, or (ii) cause damage to any part of any Building except
to the extent reasonably necessary for the installation of Lessee's trade
fixtures and Lessee's Alterations, and then only in a manner which has been
first approved by Lessor in writing. Lessee shall not operate any equipment
within the Premises which will (i) materially damage any Building or the Outside
Area, (ii) overload existing electrical systems or other mechanical equipment
servicing any Building, (iii) impair the efficient operation of the sprinkler
system or the heating, ventilating or air conditioning ("HVAC") equipment within
or servicing any Building, or (iv) damage, overload or corrode the sanitary
sewer system. Lessee shall not attach, hang or suspend anything from the
ceiling, roof, walls or columns of any Building or set any load on the floor in
excess of the load limits for which such items are designed nor operate hard
wheel forklifts within the Premises. Any dust, fumes, or waste products
generated by Lessee's use of the Premises shall be contained and disposed so
that they do not (i) create an unreasonable fire or health hazard, (ii) damage
the Premises, or (iii) result in the violation of any law. Except as approved by
Lessor, Lessee shall not change the exterior of any Building, or install any
equipment or antennas on or make any penetrations of the exterior or roof of any
Building.
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Lessee shall not conduct on any portion of the Premises any sale of any kind,
including any public or private auction, fire sale, going-out-of-business sale,
distress sale or other liquidation sale. No materials, supplies, tanks or
containers, equipment, finished products or semifinished products, raw
materials, inoperable vehicles or articles of any nature shall be stored upon or
permitted to remain within the Outside Areas of the Premises except in fully
fenced and screened areas outside the Buildings which have been designed for
such purpose and have been approved in writing by Lessor for such use by Lessee.
Section 5.02. Compliance with Law.
(a) Lessor shall deliver: each Building to Lessee free of violations of
any covenants or restrictions of record, or any applicable-law, building code,
regulation or ordinance in effect on the date of delivery, including without
limitation, the Americans with Disability Act.
(b) Except as provided in Section 5.02.(a), Lessee shall, at Lessee's cost
and expense, comply promptly with all statutes, ordinances, codes, rules,
regulations and orders, and all covenants and restrictions of record, and
requirements applicable to the Premises and Lessee's use and occupancy of same
in effect during any part of the Lease Term, whether the same are presently
foreseeable or not, and without regard to the cost or expense of compliance.
(c) By executing this Lease, Lessee acknowledges that it has reviewed and
satisfied itself as to its compliance, or intended compliance with the
applicable zoning and permit laws, hazardous materials and waste requirements,
and all other statutes, laws, or ordinances relevant to the uses stated in
Section 5.01., above.
Section 5.03. Condition of Premises at Delivery of Possession. Subject to
all of the terms of this Lease for the construction of Tenant Improvements.
Lessor shall deliver each Building to Lessee with the plumbing, lighting,
heating, ventilating, air conditioning, gas, electrical, and sprinkler systems
and loading doors as set forth in Exhibit "D" in proper operating condition and
built substantially in accordance with the approved plans therefor, and in a
workmanlike manner. Except as otherwise provided in this Lease, Lessee hereby
accepts the Premises in their condition existing as of the Commencement Date,
subject to all applicable zoning, municipal, county and state laws, ordinances
and regulations governing and regulating the use and condition of the Premises,
and any covenants or restrictions, liens, encumbrances and title exceptions of
record, and accepts this Lease subject thereto and to all matters disclosed
thereby and by any exhibits attached hereto. Lessee acknowledges that neither
Lessor nor any agent of Lessor has made any representation or warranty as to the
present or future suitability of the Premises for the conduct of Lessee's
business.
Section 5.04. Defective Condition at Commencement Date. In the event that
it is determined, and Lessee notifies Lessor in writing, as to each Building
within one year after delivery of such Building to Tenant, that any of the
obligations of Lessor set forth in Section 5.02.(a) or Section 5.03.(a) were not
performed with respect to such Building, then it shall be the obligation of
Lessor, and the sole right and remedy of Lessee, after receipt of written notice
from Lessee setting forth with specificity the nature of the failed performance,
to promptly, within a reasonable time and at Lessor's sole cost, correct same.
Lessee's failure to give such written
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notice to Lessor within each such one year period shall constitute a conclusive
presumption that Lessor has complied with all of Lessor's obligations under the
foregoing Sections 5.02. and 5.03., and any required correction after that date
shall be performed by Lessee, at its sole cost and expense except for those
express obligations of Lessor under Section 6.01 (b). As each Building is
delivered, Lessor shall promptly assign to Lessee all of Lessor's contractor's
and manufacturer's guarantees, warranties and causes of action with respect to
the subject Building except those pertaining to Lessor obligations which could
arise under this Section 5.04. and at the end of each one year period described
above of the Lease Term, Lessor shall promptly assign to Lessee all of Lessor's
remaining contractor's and/or manufacturer's guarantees, warranties, and causes
of action with respect to the subject Building except those pertaining to Lessor
obligations which could arise under Section 6.01 (b).
Section 5.05. Building Security. Lessee acknowledges and agrees that it
assumes sole responsibility for security at the Premises for its agents,
employees, invitees, licensees, contractors, guests and visitors and will
provide such systems and personnel for same including, without limitation, the
Outside Area as it deems necessary or appropriate and at its sole cost and
expense. Lessee acknowledges and agrees that Lessor does not intend to provide
any security system or security personnel at the Premises, including, without
limitation, at the Outside Areas.
Section 5.06. Rules and Regulations. Lessor may from time-to-time
promulgate reasonable and nondiscriminatory rules and regulations applicable for
the care and orderly management of the Premises. Such rules and regulations
shall be binding upon Lessee upon delivery of a copy thereof to Lessee, and
Lessee agrees to abide by such rules and regulations. A copy of the initial
Rules and Regulations is attached hereto as Exhibit "L." If there is a conflict
between the rules and regulations and any of the provisions of this Lease, the
provisions of this Lease shall prevail. Lessor shall not be responsible for the
violation of any such rules and regulations by any person, including, without
limitation, Lessee or its employees, agents, invitees, licensees, guests,
visitors or contractors.
Section 5.07. Moffett Park TDM Plan. Lessee has reviewed and analyzed the
Moffett Park Transportation Demand Management Plan (a copy of which is attached
hereto as Exhibit M), and understands that it is obligated to comply fully and
timely with same (and any revisions, supplements or successor plans thereto) at
Lessee's sole cost and expense to achieve the specified goal, and that failure
to do so will (i) constitute a material default hereunder, and (ii) expose
Lessor to possible penalties and damages to which Lessee's indemnity obligations
under this Lease shall apply, provided, that, Lessee shall have no obligation
with respect to the construction of the Light Rail Station and Lessor shall, at
its own cost and expense comply with the obligation to (i) design and designate
parking spaces for exclusive use of carpools and vanpools, (ii) install bicycle
racks and lockers, (iii) install a carpool/vanpool/shuttle pickup area, and (iv)
install pedestrian, bike circulation links, perimeter walking and jogging paths,
and meditation gardens and seating areas required under Part II of the TDM Plan,
as well as any other site improvement work (i.e. with respect to the Project
exterior but not to the Buildings), required by amendment to the TDM Plan prior
to the Commencement Date. Lessor shall construct shower and clothing lockers
required under the TDM Plan (and any other interior improvements required by
amendment to the TDM Plan) at Lessee cost and expense as part of the Tenant
Improvements.
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ARTICLE VI
MAINTENANCE, REPAIRS AND ALTERATIONS
Section 6.01. Maintenance of Premises.
(a) Throughout the Lease Term (except as provided in 6.01.(b)), Lessee, at
its sole cost and expense, shall keep, maintain, repair and replace the Premises
and all improvements and appurtenances in or serving the Premises, including,
without limitation, all interior and exterior-walls, all doors and windows, all
roof membranes, all elevators and stairways, all wall surfaces and floor
coverings, all Tenant Improvements and alterations, additions and improvements
installed during the Lease Term, all sewer, plumbing, electrical, lighting,
heating, ventilation and cooling systems, fire sprinklers, fire safety and
security systems, fixtures and appliances and all wiring and glazing, in the
same good order, condition and repair as they are in on the Commencement Date,
or any later date of installation, reasonable wear excepted, provided that wear
which could be prevented by first class maintenance shall not be deemed
reasonable.
(b) Lessor, at its sole cost and expense, shall repair defects in the
exterior walls (including all exterior glass which is damaged by structural
defects in such exterior walls), supporting pillars, structural walls, roof
structure and foundations of the Buildings and sewer storm drainage and plumbing
systems outside the Buildings but within the Project, provided that the need for
repair is not caused by Lessee, in which event Lessor shall repair same and
Lessee shall reimburse Lessor for the cost and expense of same except to the
extent of insurance proceeds received for same. Lessor shall replace the roof
membrane of each Building, the parking lot surface, landscaping, drainage,
irrigation, sprinkler systems as well as sewer and plumbing systems outside the
Buildings when the useful life of each has expired, and Lessee shall pay that
portion of the cost of each replacement, together with annual interest at the
Agreed Rate which shall be amortized over the useful life of each such
replacement applicable to the balance of the Lease Term, in equal monthly
installments due and payable with installments of Base Rent. Lessee shall give
Lessor written notice of any need of repairs which are the obligation of Lessor
hereunder and Lessor shall have a reasonable time to perform same. Should Lessor
default as provided in Section 12.03 with respect to its obligation to make any
of the repairs assumed by it hereunder, Lessee shall have the right to perform
such repairs and Lessor agrees that within thirty (30) days after written demand
accompanied by detailed invoice(s), it shall pay to Lessee the cost of any such
repairs together with accrued interest from the date of Lessee's payment at the
Agreed Rate. Lessor shall not be liable to Lessee, its employees, invitees, or
licensees for any damage to person or property, and Lessee's sole right and
remedy shall be the performance of said repairs by Lessee with right of
reimbursement from Lessor of the reasonable fair market cost of said repairs,
not exceeding the sum actually expended by Lessee, together with accrued
interest from the date of Lessee's payment at the Agreed Rate, provided that
nothing herein shall be deemed to create a right of setoff or withholding by
Lessee of Base Rent or Additional Rent or any other amounts due herein. Lessee
hereby expressly waives all rights under and benefits of Sections 1941 and 1942
of the California Civil Code or under any similar law, statute or ordinance now
or hereafter in effect to make repairs and offset
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the cost of same against rent or to withhold or delay any payment of rent or any
other of its obligations hereunder as a result of any default by Lessor under
this Section 6.01(b).
(c) Lessee agrees to keep the Premises, both inside and out, clean and in
sanitary condition as required by the health, sanitary and police ordinances and
regulations of any political subdivision having jurisdiction and to remove all
trash and debris which may be found in or around the Premises. Lessee further
agrees to keep the interior surfaces of each Building, including, without
limitation, windows, floors, walls, doors, showcases and fixtures, clean and
neat in appearance.
(d) If Lessee refuses or neglects to commence such repairs and/or
maintenance for which Lessee is responsible under this Article VI within a
thirty (30) day period (or as soon as practical and in no event later than ten
(10) days if the failure to initiate the repair threatens to cause further
damage to the Premises) after written notice from Lessor and thereafter
diligently prosecute the same to completion, then Lessor may (i) enter the
Premises (except in an emergency, upon at least twenty-four (24) hours advanced
written notice) during Lessor's business hours and cause such repairs and/or
maintenance to be made and shall not be responsible to Lessee for any loss or
damage occasioned thereby and Lessee agrees that upon demand, it shall pay to
Lessor the reasonable cost of any such repairs, not exceeding the sum actually
expended by Lessor, together with accrued interest from the date of Lessor's
payment at the Agreed Rate, and (ii) elect to enter into a maintenance contract
at a market rate for first-rate maintenance with a third party for the
performance of all or a part of Lessee's maintenance obligations, whereupon,
Lessee shall be relieved from its obligations to perform those maintenance
obligations expressly covered by such maintenance contract, and Lessee shall
bear the entire cost of such maintenance contract which shall be due and paid in
advance, as Additional Rent, on a monthly basis with Lessee's Base Rent
payments.
Section 6.02. Maintenance of Outside Areas. Subject to 6.01.(c) and
subject to Lessee paying the cost and expense for same pursuant to Section 4.05,
Lessor shall maintain, repair and replace all improvements on the Property and
outside of the Buildings, including, without limitation, landscaping, sidewalks,
walkways, driveways, curbs, parking lots (including striping), parking
structure, sprinkler systems, lighting (per City of Sunnyvale requirements), and
surface water drainage systems ("Outside Areas").
Section 6.03. Alterations, Additions and Improvements. No alterations,
additions, or improvements ("Alterations") shall be made to the Premises by
Lessee without the prior written consent of Lessor which Lessor will not
unreasonably withhold, provided, however, that Lessee may make Alterations which
do not affect any Building system, exterior appearance, structural components or
structural integrity and which do not exceed, with respect to each Building,
collectively Fifty Thousand Dollars ($50,000) in cost within any twelve (12)
month period, without Lessor's prior written consent. As a condition to Lessor's
obligation to consider any request for consent hereunder, Lessee shall pay
Lessor upon demand for the reasonable costs and expenses of consultants,
engineers, architects and others for reviewing plans and specifications and for
monitoring the construction of any proposed Alterations. Lessor may require
Lessee to remove any such Alterations at the expiration or termination of the
Lease Term and to restore the Premises to their prior condition by written
notice given on or before the earlier of (i) the
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expiration of the Lease Term, or (ii) thirty (30) days after termination of the
Lease, or (iii) thirty (30) days after a written request from Lessee for such
notice from Lessor provided, that, if Lessee requests same from Lessor, Lessor
will notify Lessee within five (5) business days after receipt of Lessee's
request and a copy of all plans and specifications for the proposed Alteration
whether it will require removal. All Alterations to be made to the Premises
shall be made under the supervision of a competent, California licensed
architect and/or competent California licensed structural engineer (each of whom
has been reasonably approved by Lessor and such approval will not be
unreasonably withheld) and shall be made in accordance with plans and
specifications which have been furnished to and approved by Lessor in writing
prior to commencement of work. All Alterations shall be designed, constructed
and installed at the sole cost and expense of Lessee by California licensed
architects, engineers, and contractors approved by Lessor, in compliance with
all applicable law, and in good and workmanlike manner. Any Alteration except
furniture and trade fixtures, shall become the property of Lessor at the
expiration, or sooner termination of the Lease, unless Lessor directs otherwise,
provided that Lessee shall retain title to all furniture and trade fixtures
placed on the Premises. All heating, lighting, electrical, air conditioning,
full height partitioning (but not moveable, free standing cubicle-type
partitions which do not extend to the ceiling or connect to Building walls),
drapery and carpeting installations made by Lessee together with all property
that has become an integral part of the Premises, shall be and become the
property of Lessor upon the expiration, or sooner termination of the Lease, and
shall not be deemed trade fixtures. Within sixty (60) days after completion of
any Alteration, Lessee shall provide Lessor with a complete set of "as built"
plans for same.
Section 6.04. Covenant Against Liens. Lessee shall not allow any liens
arising from any act or omission of Lessee to exist, attach to, be placed on, or
encumber Lessor's or Lessee's interest in the Premises or any part thereof, or
any portion thereof, by operation of law or otherwise. Lessee shall not suffer
or permit any lien of mechanics, material suppliers, or others to be placed
against the Premises or any portion thereof with respect to work or services
performed or claimed to have been performed for Lessee or materials furnished or
claimed to have been furnished to Lessee or the Premises. Lessor has the right
at all times to post and keep posted on the Premises any notice that it
considers necessary for protection from such liens. At least seven (7) days
before beginning construction of any Alteration, Lessee shall give Lessor
written notice of the expected commencement date of that construction to permit
Lessor to post and record a notice of nonresponsibility. If any such lien
attaches or Lessee receives notice of any such lien, Lessee shall cause the lien
to be promptly released and removed of record. Despite any other provision of
this Lease, if the lien is not released and removed within twenty (20) days
after Lessor delivers notice of the lien to Lessee, Lessor may immediately take
all action necessary to release and remove the lien, without any duty to
investigate the validity of it. All expenses (including reasonable attorney fees
and the cost of any bond) incurred by Lessor in connection with a lien incurred
by Lessee or its removal shall be considered Additional Rent under this Lease
and be immediately due and payable by Lessee.
Section 6.05 Reimbursable Capital Expenditures. Except for items of
capital expenditures which are to be made at Lessor's sole cost and expense
pursuant to the first sentence of Section 6.01 (b) above, capital expenditures,
together with interest thereon at the Agreed Rate, for any replacement item at
the Premises for which Lessor is responsible hereunder
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made by Lessor in excess of One Hundred thousand Dollars ($100,000.00) during
the Lease Term shall be amortized over the remaining Lease Term for the useful
life of such replacement item with the numerator being the number of months
remaining in the Lease Term and the denominator being the number of months of
the useful life of the improvements as determined by Lessor in its sole
discretion. Lessee shall be obligated for such amortized portion of any such
expenditure in equal monthly installments due and payable with each installment
of Base Rent during the Lease Term.
ARTICLE VII
INSURANCE
Section 7.01. Property/Rental Insurance for Premises. At all times during
the Lease Term, Lessor shall keep the Premises insured against loss or damage by
fire and those risks normally included in the term "all risk," including,
without limitation, coverage for (i) earthquake and earthquake sprinkler
leakage, (ii) flood, (iii) loss of rents and extra expense for eighteen (18)
months, including scheduled rent increases, (iv) boiler and machinery, (v)
Tenant Improvements, and (vi) fire damage legal liability form, including waiver
of subrogation. Any deductibles shall be paid by Lessee. The amount of such
insurance shall not be less than 100% of replacement cost. Insurance shall
include a Building Ordinance and Increased Cost of Construction Endorsement
insuring the increased cost of reconstructing the Premises incurred due to the
need to comply with applicable statutes, ordinances and requirements of all
municipal, state and federal authorities now in force, which or may be in force
hereafter. Any recovery received from said insurance policy shall be paid to
Lessor and thereafter applied by Lessor to the reconstruction of the Premises in
accordance with the provisions of Article VIII below. Lessee, in addition to the
rent and other charges provided herein, shall reimburse Lessor for the cost of
the premiums for all such insurance covering the Premises in accordance with
Article IV. Such reimbursement and shall be made within (15) days of Lessor's
delivery of a copy of Lessor's statement therefor. Lessee shall pay to Lessor
any deductible (subject to the above conditions) owing within fifteen (15) days
after delivery of notice from Lessor of the amount owing. To the extent
commercially available, Lessor's insurance shall have a deductible not greater
than fifteen percent (15%) for earthquake and five percent (5%) for the basic
"all risk" coverage.
Section 7.02. Property Insurance for Fixtures and Inventory. At all times
during the Lease Term, Lessee shall, at its sole expense, maintain insurance
with "all risk, coverage on any fixtures, furnishings, merchandise, equipment or
personal property in or on the Premises, whether in place as of the date hereof
or installed hereafter. The amount of such insurance shall not be less than one
hundred percent (100%) of the replacement cost thereof, and Lessor shall not
have any responsibility nor pay any cost for maintaining any types of such
insurance. Lessee shall pay all deductibles.
Section 7.03. Lessor's Liability Insurance. At all times during the Lease
Term, Lessor shall maintain a policy of policies of comprehensive general
liability insurance naming Lessor (and such others as designated by Lessor)
against liability for bodily injury, property damage on our about the Premises,
with combined single limit coverage in an amount determined by Lessor in its
sole discretion and which amount is presently in excess of Thirty Million
Dollars
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($30,000,000.00). Lessee, in addition to the rent and other charges provided
herein, agrees to pay to Lessor the premiums for all such insurance. The
insurance premiums shall be paid in accordance with Article IV, within (15) days
of Lessor's delivery of a copy of Lessor's statement therefore.
Section 7.04. Liability Insurance Carried by Lessee. At all times during
the Lease Term (and any holdover period) Lessee shall obtain and keep in force a
commercial general liability policy of insurance protecting Lessee, Lessor and
any Lender(s) whose names are provided to Lessee as Additional Insureds against
claims from bodily injury, personal injury and property damage based upon
involving or arising out of ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be on an
occurrence basis providing a single limit coverage in amount of not less than
Ten Million Dollars ($10,000,000) per occurrence with an Additional Lessors or
Premises Endorsements and containing an "Amendment of the Pollution Exclusion
Endorsement" for damage caused by heat, smoke, fumes from a hostile fire. The
limits of said insurance required by this Lease as carried by Lessee shall not,
however limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All insurance to be carried by the Lessee shall be primary to and not
contributory with, any similar insurance carried by Lessor whose insurance shall
be considered excess insurance only.
Section 7.05. Lessee to Furnish Proof of Insurance. Lessee shall furnish
to Lessor prior to the Commencement Date, and at least thirty (30) days prior to
the expiration date of any policy, certificates indicating that the property
insurance and liability insurance required to be maintained by Lessee is in full
force and effect for the twelve (12) month period following such expiration
date; that Lessor has been named as an additional insured to the extent of
contractual liability assumed in Section 7.07. "Indemnification" and Section
7.08. "Lessor as Party Defendant"; and that all such policies will not be
canceled unless thirty (30) days prior written notice of the proposed
cancellation has been given to Lessor. The insurance shall be with insurers
approved by Lessor, provided, however, that such approval shall not be
unreasonably withheld so long as Lessee's insurance carrier has a Best's
Insurance Guide rating not less than A+ VIII. Lessor shall furnish to Lessee,
prior to the Commencement Date, and at least ten (10) days prior to the
expiration date of any policy, or if later in each case, within ten (10)
business days after receipt of a written request for same, certificates
indicating that the property insurance and liability insurance required to be
maintained by Lessor is in full force and effect for the twelve (12) month
period following such expiration date.
Section 7.06. Mutual Waiver of Claims and Subrogation Rights. Lessor and
Lessee hereby release and relieve the other, and waive their entire claim of
recovery for loss or damage to property arising out of or incident to fire,
lightning, and the other perils included in a standard "all risk" insurance
policy when such property constitutes the Premises, or is in, on or about the
Premises, whether or not such loss or damage is due to the negligence of Lessor
or Lessee, or their respective agents, employees, guests, licensees, invitees,
or contractors. Lessee and Lessor waive all rights of subrogation against each
other on behalf of, and shall obtain a waiver of all subrogation rights from,
all property and casualty insurers referenced above.
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Section 7.07. Indemnification and Exculpation.
(a) Except as otherwise provided in Section 7.07.(b), Lessee shall
indemnify and hold Lessor free and harmless from any and all liability, claims,
loss, damages, causes of action (whether in tort or contract, law or equity, or
otherwise), expenses, charges, assessments, fines, and penalties of any kind,
including without limitation, reasonable attorney fees, expert witness fees and
costs, arising by reason of the death or injury of any person, including any
person who is an employee, agent, invitee, licensee, permittee, visitor, guest
or contractor of Lessee, or by reason of damage to or destruction of any
property, including property owned by Lessee or any person who is an employee,
agent, invitee, permitee, visitor, or contractor of Lessee, caused or allegedly
caused (1) while that person or property is in or about the Premises; (2) by
some condition of the Premises; (3) by some act or omission by Lessee or its
agent, employee, licensee, invitee, guest, visitor or contractor or any person
in, adjacent, on, or about the Premises with the permission, consent or
sufferance of Lessee; (4) by any matter connected to or arising out of Lessee's
occupation or use of the Premises, or any breach or default in timely observance
or performance of any obligation on Lessee's part to be observed or performed
under this Lease.
(b) Notwithstanding the provisions of Section 7.07.(a) of this Lease,
Lessee's duty to indemnify and hold Lessor harmless shall not apply to any
liability, claims, loss or damages to the extent caused solely by Lessor's
active negligence or willful acts of misconduct.
(c) Lessee hereby waives all claims against Lessor for damages to goods,
wares and merchandise and all other personal property in, on, or about the
Premises and for injury or death to persons in, on, or about the Premises from
any cause arising at any time to the fullest extent permitted by law and in no
event shall Lessor be liable for lost profits or other consequential damages
arising from any cause or for any damage which is or could be covered by the
insurance Lessee is required to carry under this Lease.
Section 7.08. Lessor as Party Defendant. If by reason of an act or
omission of Lessee or any of its employees, agents, invitees, licensee,
visitors, guests or contractors, Lessor is made a party defendant or a
cross-defendant to any action involving the Premises or this Lease, Lessee shall
hold harmless and indemnify Lessor from all liability or claims of liability,
including all damages, attorney fees and costs of suit.
ARTICLE VIII
DAMAGE OR DESTRUCTION
Section 8.01. Destruction of the Premises.
(a) In the event of a partial destruction of the Premises during the Lease
Term from any cause, Lessor, upon receipt of, and to the extent of, insurance
proceeds paid in connection with such casualty, shall forthwith repair the same,
provided the repairs can be made within a reasonable time under state, federal,
county and municipal applicable law, but such partial destruction shall in no
way annul or void this Lease, (except as provided in Section 8.01.(b) below)
provided that Lessee shall be entitled to a proportionate credit for rent equal
to the payment of rental income insurance received by Lessor. Lessor shall use
diligence in making
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such repairs within a reasonable time period, acts of God, strikes and delays
beyond Lessor's control excepted, in which instance the time period shall be
extended accordingly, and this Lease shall remain in full force and effect, with
the rent to be proportionately reduced as provided in this Section. If the
Premises are damaged by any peril within twelve (12) months prior to the last
day of the Lease Term and, in the reasonable opinion of the Lessor's architect
or construction consultant, the restoration of the Premises cannot be
substantially completed within ninety (90) days after the date of such damage
and such damage renders unusable more than thirty percent (30%) of the Premises,
Lessor may terminate this Lease on sixty (60) days written notice to Lessee.
(b) If the Premises are damaged or destroyed by any cause to the extent of
more than fifty percent (50%) of the total Rentable Area of all office/research
and development Buildings which are then part of the Premises during the Lease
Term, Lessor shall notify Lessee within sixty (60) days after such damage or
destruction whether it will repair the same within twelve (12) months (subject
to force majeure) from the date of such notice and if Lessor states that it will
not repair within said twelve (12) months (subject to force majeure) this Lease
shall terminate ten (10) business days after Lessor gives its notice. In the
event Lessor elects to repair, Lessor shall commence repairs within a reasonable
time and diligently proceed to complete such repairs, in each instance subject
to force majeure delays. In the event of termination, Lessor shall pay to Lessee
all insurance proceeds, if any, received by Lessor as a result of the damage or
destruction to the extent allocable to unamortized Tenant Improvements or other
Alterations installed in the damaged Buildings at Lessee's sole cost and
expense, using an amortization schedule of equal monthly installments over the
first sixty (60) months following the delivery of each damaged Building, but
only to the extent such payment will not violate the terms and conditions of any
trust deed recorded against the Project or Premises or constitute a default
thereunder.
Section 8.02. Waiver of Civil Code Remedies. Lessee hereby expressly
waives any rights to terminate this Lease upon damage or destruction to the
Premises, including without limitation any rights pursuant to the provisions of
Section 1932, Subdivision 2 and Section 1933, Subdivision 4, of the California
Civil Code, as amended from time-to-time, and the provisions of any similar law
hereinafter enacted.
Section 8.03. No Abatement of Rentals. The Rentals and other charges due
under this Lease shall not be reduced or abated by reason of any damage or
destruction to the Premises (except to the extent of proceeds received by Lessor
from the rental loss insurance), and Lessor shall be entitled to all proceeds of
the insurance maintained pursuant to Section 7.01. above during the period of
rebuilding pursuant to Section 8.01.(a) above, or if the Lease is terminated
pursuant to Section 8.01.(a) above. Lessee shall have no claim against Lessor,
including, without limitation, for compensation for inconvenience or loss of
business, profits or goodwill during any period of repair or reconstruction.
Section 8.04. Liability for Personal Property. In no event shall Lessor
have any liability for, nor shall it be required to repair or restore, any
injury or damage to Lessee's personal property or to any other personal property
or to Alterations in or upon the Premises by Lessee.
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ARTICLE IX
REAL PROPERTY TAXES
Section 9.01. Payment of Taxes. Lessee shall pay the real property tax,
including any escaped or supplemental tax and any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license, fee,
charge, excise or imposition ("real property tax"), imposed, assessed or levied
on or with respect to the Premises by any Federal, State, County, City or other
political subdivision or public authority having the direct or indirect power to
tax, including any improvement district thereof or any community facilities
district, as against any legal or equitable interest of Lessor in the Premises
or against the Premises or any part thereof applicable to the Premises for a
period of time included within the Lease Term. All such payments shall be made
at least ten (10) days prior to the delinquency date for such payment or ten
(10) days after Lessee's receipt of the tax bill, whichever is later.
Notwithstanding the foregoing, Lessee shall not be required to pay any net
income taxes, franchise taxes, or any succession or inheritance taxes of Lessor.
If any anytime during the Lease Term, the State of California or any political
subdivision of the state, including any county, city, city and county, public
corporation, district, or any other political entity or public corporation of
this state, levies or assesses against Lessor a tax, fee, charge or imposition,
excise on rents under the Lease, the square footage of the Premises, the act of
entering into this Lease, or the occupancy of Lessee, or levies or assesses
against Lessor any other tax, fee, or excise, however described, including,
without limitation, a so-called value added, business license, transit,
commuter, environmental or energy tax fee, charge or excise or imposition
related to the Premises as a direct substitution in whole or in part for, or in
addition to, any real property taxes on the Premises, Lessee shall pay ten (10)
days before delinquency or ten (10) days after receipt of the tax bill,
whichever is later, that tax, fee, charge, excise or imposition.
Section 9.02. Pro Ration for Partial Years. If any such taxes paid by
Lessee shall cover any period prior to the Commencement Date or after the
Expiration Date of the Lease Term, Lessee's share of such taxes shall be
equitably prorated to cover only the period of time within the tax fiscal year
during which this Lease shall be in effect, and Lessor shall reimburse Lessee to
any extent required. If Lessee shall fail to pay any such taxes, Lessor shall
have the right to pay the same in which case Lessee shall repay such amount to
Lessor within ten (10) days after written demand, together with interest at the
Agreed Rate.
Section 9.03. Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes imposed, assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises or elsewhere at the
Project. When possible, Lessee shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Lessor.
(b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee
within ten (10) days after receipt of a written statement setting forth the
taxes applicable to Lessee's property.
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(c) If Lessee shall fail to pay any such taxes, Lessor shall have the
right to pay the same, in which case Lessee shall repay such amount to Lessor
with Lessee's next rent installment together with interest at the Agreed Rate.
ARTICLE X
UTILITIES
Section 10.01. Lessee to Pay. Lessee shall pay prior to delinquency and
throughout the Lease Term, all charges for water, gas, heating, cooling, sewer,
telephone, electricity, garbage, air conditioning and ventilation, janitorial
service, landscaping and all other materials and utilities supplied to the
Premises. The disruption, failure, lack or shortage of any service or utility
due to any cause whatsoever shall not affect any obligation of Lessee hereunder,
and Lessee shall faithfully keep and observe all the terms, conditions and
covenants of this Lease and pay all rent due hereunder, all without diminution,
credit or deduction.
ARTICLE XI
ASSIGNMENT AND SUBLETTING
Section 11.01. Lessor's Consent Required. Except as provided in Section
11.02, Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet, license or otherwise transfer or encumber all or any part of
Lessee's interest in this Lease or in the Premises or any part thereof, without
Lessor's prior written consent which Lessor shall not unreasonably withhold or
delay. Lessor shall respond in writing to Lessee's request for consent hereunder
in a timely manner and any attempted assignment, transfer, mortgage,
encumbrance, subletting or licensing without such consent shall be void, and
shall constitute a breach of this Lease. By way of example, but not limitation,
reasonable grounds for denying consent include: (i) poor credit history or
insufficient financial strength of transferee, (ii) transferee's intended use of
the Premises is inconsistent with the permitted use or will materially and
adversely affect Lessor's interest. Lessee shall reimburse Lessor upon demand
for Lessor's reasonable costs and expenses (including attorneys' fees, architect
fees and engineering fees) involved in renewing any request for consent whether
or not consent is granted.
Section 11.02. Lessee Affiliates. Without the approval of Lessor, Lessee
may assign or sublet the Premises, or any portion thereof, to any corporation
which controls, is controlled by, or is under common control with Lessee, or to
any corporation resulting from the merger or consolidation with Lessee, or to
any person or entity which acquires all, or substantially all of the assets of
Lessee as a going concern of the business that is being conducted on the
Premises ("Affiliates"), provided that said assignee or sublessee assumes, in
full, the obligations of Lessee under this Lease and provided further that the
use to which the Premises will be put does not materially change and provided
further, Lessee shall provide Lessor at least ten (10) business days advance
written notice of any such assignment or sublease, including fully executed
assignment or sublease documents and evidence that the transaction is of a type
described in this Section 11.02. Any such assignment or sublease shall not, in
any way, affect or limit the liability of Lessee under the terms of this Lease.
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Section 11.03. No Release of Lessee. Regardless of Lessor's consent, no
subletting or assignment shall release Lessee of Lessee's obligation or alter
the primary liability of Lessee to pay the rent and to perform all other
obligations to be performed by Lessee hereunder. The acceptance of rent by
Lessor from any other person shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Lessee or
any successor of Lessee, in the performance of any of the terms hereof, Lessor
may proceed directly against Lessee without the necessity of exhausting remedies
against said assignee.
Section 11.04. Excess Rent. In the event Lessor shall consent to a
sublease or an assignment, Lessee shall pay to Lessor with its regularly
scheduled Base Rent payments, fifty percent (50%) of all sums and the fair
market value of all consideration collected or received by Lessee from a
sublessee or assignee which are in excess of the Base Rent and Additional Rent
due and payable with respect to the subject space pursuant to Article IV for the
time period encompassed by the sublease or assignment term, after first
deducting reasonable leasing commissions, provided that this provision shall not
apply to consideration for the first twelve (12) months of the first sublease of
any space within any office/research development Building (and not to any
subsequent sublease of such space) so long as such sublease is for at least
twenty four (24) months and that the consideration for the second and any
subsequent twelve (12) month period of such sublease (including extension
options) is not less than the consideration for the first twelve (12) months.
Section 11.05. No Impairment of Security. Lessee's written request to
Lessor for consent to an assignment or subletting or other form of transfer
shall be accompanied by (a) the name and legal composition of the proposed
transferee; (b) the nature of the proposed transferee's business to be carried
on in the Premises; (c) the terms and provisions of the proposed transfer
agreement; and (d) such financial and other reasonable information as Lessor may
request concerning the proposed transferee.
Section 11.06. Lessor's Recapture Rights.
(a) Lessor's Recapture Rights. Notwithstanding any other provision of this
Article 11, in the event that Lessee proposes to sublease or assign or otherwise
transfer any interest in this Lease or the Premises or any part thereof
affecting (collectively with all other such subleases, assignments, or transfers
then in effect) more than sixty percent (60%) of the square footage of the total
Rentable Area of the four (4) office/research and development Buildings
("Recapture Space"), then Lessor shall have the option to recapture the
Recapture Space by written notice to Lessee ("Recapture Notice") given within
ten (10) business days after Lessor receives any notice of such proposed
assignment or sublease or other transfer ("Transfer Notice"). A timely Recapture
Notice terminates this Lease for the Recapture Space, effective as of the date
specified in the Transfer Notice. If Lessor declines or fails timely to deliver
a Recapture Notice, Lessor shall have no further right under this Section 11.06
to the Recapture Space unless it becomes available again after such transfer by
Lessee or unless Lessee proposes another such transfer. For purposes of this
Section 11.05, the Rentable Area of the Amenity Building shall not be utilized
in the calculation of Recapture Space. This Section 11.06 shall not apply to the
sublease of space or assignment of this Lease to an Affiliate as defined in
Section 11.02 above.
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(b) Consequences of Recapture. To determine the new Base Rent under this
Lease if Lessor recaptures the Recapture Space, the then current Base Rent
(immediately before Lessor's recapture) under the Lease shall be multiplied by a
fraction, numerator of which is the square feet of the Rentable Area retained by
Lessee after Lessor's recapture and the denominator of which is the total square
feet of the Rentable Area before Lessor's recapture. The Additional Rent, to the
extent that it is calculated on the basis of the square feet within the affected
Building, shall be reduced to reflect Lessee's proportionate share based on the
square feet of the Building retained by Lessee after Lessor's recapture. This
Lease as so amended shall continue thereafter in full force and effect. Either
party may require written confirmation of the amendments to this Lease
necessitated by Lessor's recapture of the Recapture Space. If Lessor recaptures
the Recapture Space, Lessor shall, at Lessor's sole expense, construct, paint,
and furnish any partitions required to segregate the Recapture Space from the
remaining Premises retained by Lessee.
ARTICLE XII
DEFAULTS; REMEDIES
Section 12.01. Defaults. The occurrence of any one or more of the
following events shall constitute a material default and breach of this Lease by
Lessee:
(a) The abandonment of the Premises by Lessee or the commission of waste
at the Premises or the making of an assignment or subletting in violation of
Article XI, provided however, abandonment shall be considered to not occur if
the Premises are maintained and occupied to the extent necessary to maintain the
insurance on each and every portion of the Premises;
(b) The failure by Lessee to make any payment of rent or any other payment
required to be made by Lessee hereunder, as and when due, if such failure
continues for a period of five (5) business days after written notice thereof
from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to
Pay Rent or Quit in the form required by applicable Unlawful Detainer statutes
such Notice shall constitute the notice required by this paragraph, provided
that the cure period stated in the Notice shall be five (5) business days rather
than the statutory three (3) days;
(c) Lessee's failure to provide, (i) any instrument or assurance as
required by Section 7.05, or (ii) estoppel certificate as required by Section
15.01, or (iii) any document which Lessee is obligated to provide under Section
17.13 subordinating this Lease to a Lender's deed of trust if such failure
continues for five (5) business days after written notice of the failure from
Lessor to Lessee. In the event Lessor serves Lessee with a Notice to Perform
Covenant or Quit in the form required by applicable Unlawful Detainer Statutes,
such Notice shall constitute the notice required by this paragraph, provided
that the cure period stated in the Notice shall be five (5) business days rather
than the statutory three (3) days;
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(d) The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Lessee,
other than described in paragraph (a) (b) or (c) above, if such failure
continues for a period of ten (10) days after written notice thereof from Lessor
to Lessee; provided, however, that if the nature of Lessee's default is such
that more than ten (10) days are reasonably required for its cure, then Lessee
shall not be deemed to be in default if Lessee commences such cure within said
ten (10) day period and thereafter diligently prosecutes such cure to
completion;
(e) (i) The making by Lessee of any general arrangement or assignment for
the benefit of creditors; (ii) the filing by Lessee of a voluntary petition in
bankruptcy under Title 11 U.S.C. or the filing of an involuntary petition
against Lessee which remains uncontested for a period of sixty (60) days; (iii)
the appointment of a trustee or receiver to take possession of substantially all
of Lessee's assets located at the Premises or of Lessee's interest in this
Lease; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, provided, however, in the event that any provisions of
this Section 12.01(e) is contrary to any applicable law, such provision shall be
of no force or effect;
(f) The discovery by Lessor that any financial statement given to Lessor
by Lessee, or any guarantor of Lessee's obligations hereunder, was materially
false;
(g) The failure by Lessee to timely observe and perform any obligation
under the City of Sunnyvale TDM Plan or any successor or similar plan or
requirement if such failure continues for five (5) business days (or if longer,
any cure period provided by the City of Sunnyvale before it levies any penalty,
fines or taxes or any other action adverse to Lessor) after written notice of
the failure from Lessor to Lessee;
(h) The failure by Lessee to deposit timely any letters of credit or to
fail to timely pay the General Contractor for costs of Tenant Improvements as
required by Sections 2.04(g) if such failure continues for five (5) business
days after written notice of the failure from Lessor to Lessee.
Section 12.02. Remedies. In the event of any such material default and
breach by Lessee, Lessor may at any time thereafter, and without limiting Lessor
in the exercise of any right or remedy which Lessor may have by reason of such
default and breach:
(a) Terminate Lessee's right to possession of the Premises by any lawful
means including by way of unlawful detainer (and without any further notice if a
notice in compliance with the unlawful detainer statutes and in compliance with
paragraphs (b), (c) (d) (g) or (h) of Section 12.01 above has already been
given), in which case this Lease shall terminate and Lessee shall immediately
surrender possession of the Premises to Lessor. In such event Lessor shall be
entitled to recover from Lessee all damages incurred by Lessor by reason of
Lessee's default including, but not limited to, (i) the cost of recovering
possession of the Premises including reasonable attorneys' fees related thereto;
(ii) the worth at the time of the award of any unpaid rent that had been earned
at the time of the termination, to be computed by allowing interest at the
Agreed Rate but in no case greater than the maximum amount of interest permitted
by law,
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(iii) the worth at the time of the award of the amount by which the unpaid rent
that would have been earned between the time of the termination and the time of
the award exceeds the amount of unpaid rent that Lessee proves could reasonably
have been avoided, to be computed by allowing interest at the Agreed Rate but in
no case greater than the maximum amount of interest permitted by law, (iv) the
worth at the time of the award of the amount by which the unpaid rent for the
balance of the Lease Term after the time of the award exceeds the amount of
unpaid rent that Lessee proves could reasonably have been avoided, to be
computed by discounting that amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of the award plus one per cent (1%), (v) any
other amount necessary to compensate Lessor for all the detriment proximately
caused by Lessee's failure to perform obligations under this Lease, including
brokerage commissions and advertising expenses, expenses of remodeling the
Premises for a new tenant (whether for the same or a different use), and any
special concessions made to obtain a new tenant, and (vi) any other amounts, in
addition to or in lieu of those listed above, that may be permitted by
applicable law.
(b) Maintain Lessee's right to possession as provided in Civil Code
Section 1951.4 in which case this Lease shall continue in effect whether or not
Lessee shall have abandoned the Premises. In such event Lessor shall be entitled
to enforce all of Lessor's rights and remedies under this Lease, including the
right to recover the rent as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the State of California. Unpaid amounts of rent
and other unpaid monetary obligations of Lessee under the terms of this Lease
shall bear interest from the date due at the Agreed Rate.
Section 12.03. Default by Lessor. Lessor shall not be in default under
this Lease unless Lessor fails to perform obligations required of Lessor within
a reasonable time, but in no event later than thirty (30) days after written
notice by Lessee to Lessor and to the holder of any first mortgage or deed of
trust covering the Premises whose name and address shall have theretofore been
furnished to Lessee in writing, specifying that Lessor has failed to perform
such obligation; provided, however, that if the nature of Lessor's obligation is
such that more than thirty (30) days are required for performance then Lessor
shall not be in default if Lessor commences performance within such thirty (30)
day period and thereafter diligently prosecutes the same to completion. In the
event Lessor does not commence performance within the thirty (30) day period
provided herein, Lessee may perform such obligation and will be reimbursed for
its expenses by Lessor together with interest thereon at the Agreed Rate
provided, however, that if the parties are in dispute as to what constitutes
Lessor's obligations under this Lease, any such dispute shall be resolved by
arbitration in a manner identical to that provided in Section 8.02 above. Lessee
waives any right to terminate this Lease or to vacate the Premises on Lessor's
default under this Lease. Lessee's sole remedy on Lessor's default is an action
for damages or injunctive or declaratory relief. Notwithstanding the foregoing,
nothing herein shall be deemed applicable in the event of Lessor's delay in
delivery of the Premises. In that situation, all rights and remedies shall be
determined under Section 3.01 above.
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Section 12.04. Late Charges. Lessee hereby acknowledges that late payment
by Lessee to Lessor of rent and other sums due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Lessor by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designated agent within five (5) days
after such amount is due and owing, Lessee shall pay to Lessor a late charge
equal to five percent (5%) of such overdue amount. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Lessor
will incur by reason of late payment by Lessee. Acceptance of such late charge
by Lessor shall in no event constitute a waiver of Lessee's default with respect
to such overdue amount, nor prevent Lessor from exercising any of the other
rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for three (3) consecutive
installments of rent, then rent shall automatically become due and payable
quarterly in advance, rather than monthly, notwithstanding Section 4.01 or any
other provision of this Lease to the contrary.
ARTICLE XIII
CONDEMNATION OF PREMISES
Section 13.01. Total Condemnation. If the entire Premises, whether by
exercise of governmental power or the sale or transfer by Lessor to any
condemnor under threat of condemnation or while proceedings for condemnation are
pending, at any time during the Lease Term, shall be taken by condemnation such
that there does not remain a portion suitable for occupation, this Lease shall
then terminate as of the date transfer of possession is required. Upon such
condemnation, all rent shall be paid up to the date transfer of possession is
required, and Lessee shall have no claim against Lessor or the award for the
value of the unexpired portion of this Lease Term.
Section 13.02. Partial Condemnation. If any portion of the Premises is
taken by condemnation during the Lease Term, whether by exercise of governmental
power or the sale for transfer by Lessor to an condemnor under threat of
condemnation or while proceedings for condemnation are pending, this Lease shall
remain in full force and effect except that in the event a partial taking leaves
the Premises unfit for the conduct of the business of Lessee, then Lessee shall
have the right to terminate this Lease effective upon the date transfer of
possession is required. Moreover, Lessor shall have the right to terminate this
Lease effective on the date transfer of possession is required if more than
thirty-three percent (33%) of the total square footage of the Premises is taken
by condemnation. Lessee and Lessor may elect to exercise their respective rights
to terminate this Lease pursuant to this Section by serving written notice to
the other within thirty (30) days after receipt of notice of condemnation. All
rent shall be paid up to the date of termination, and Lessee shall have no claim
against Lessor for the value of any unexpired portion of the Lease Term. If this
Lease shall not be canceled, the rent after such partial taking shall be that
percentage of the adjusted base rent specified herein, equal to the percentage
which the square footage of the untaken part of the Premises, immediately after
the taking, bears to the square footage of the entire Premises immediately
before the taking. If Lessee's continued use of the Premises requires
alterations and repair by reason of a partial
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taking, all such alterations and repair shall be made by Lessee at Lessee's
expense. Lessee waives all rights it may have under California Code of Civil
Procedure Section 1265.130 or otherwise, to terminate this Lease based on
partial condemnation.
Section 13.03. Award to Lessee. In the event of any condemnation, whether
total or partial, Lessee shall have the right to claim and recover from the
condemning authority such compensation as may be separately awarded or
recoverable by Lessee for loss of its business fixtures, or equipment belonging
to Lessee immediately prior to the condemnation. The balance of any condemnation
award shall belong to Lessor (including, without limitation, any amount
attributable to any excess of the market value of the Premises for the remainder
of the Lease Term over the then present value of the rent payable for the
remainder of the Lease Term) and Lessee shall have no further right to recover
from Lessor or the condemning authority for any claims arising out of such
taking. Except as provided below, in connection with a condemnation: (a) Lessor
shall be entitled to receive all compensation and anything of value awarded,
paid, or received in settlement or otherwise ("Award"); and (b) Lessee
irrevocably assigns and transfers to Lessor all rights to and interests in the
Award and fully releases and relinquishes any claim to, right to make a claim
on, or interest in the Award. Notwithstanding the foregoing, Lessee shall have
the right to make a separate claim in the condemnation proceeding for: (a)
reasonable removal and relocation costs for any leasehold improvements that
Lessee has the right to remove and elects to remove (if condemnor approves of
the removal), (b) loss of goodwill, (c) relocation costs under Government Code
section 7262, the claim for which Lessee may pursue by separate action
independent of this Lease, but (d) only to the extent that any of the foregoing
does not reduce the amount of the Award payable to Lessor. Lessee shall also be
entitled to receive, if the Award expressly provides for same, an amount equal
to the unamortized cost of the Tenant Improvements or other Alterations
installed in any condemned Building at Lessee's sole cost and expense, using an
amortization schedule of equal monthly amounts for the first sixty (60) months
following the Delivery Date (or deemed Delivery Date) for such Building, but
only to the extent such payment will not violate the terms and conditions of any
trust deed recorded against the Project or Premises or constitute a default
thereunder.
ARTICLE XIV
ENTRY BY LESSOR
Section 14.01. Entry by Lessor Permitted. Lessee shall permit Lessor and
its employees, agents and contractors to enter the Premises and all parts
thereof (i) upon forty-eight (48) hours notice (or without notice in an
emergency), including, without limitation, the Building and all parts thereof at
all reasonable times for any of the following purposes: to inspect the Premises;
to maintain the Premises; to make such repairs to the Premises as Lessor is
obligated or may elect to make; to make repairs, alterations or additions to any
other portion of the Premises, and (ii) upon twenty-four (24) hours notice to
show the Premises and post "To Lease" signs for the purposes of reletting during
the last twelve (12) months of the Lease Term (provided that Lessee has failed
to exercise its option to extend) or extended Lease Term to show the Premises as
part of a prospective sale by Lessor or to post notices of nonresponsibility.
With respect to any such entry which is not an emergency entry, Lessor agrees
not to unreasonably disturb Lessee's use or enjoyment of the Premises, and to
minimize disruption to Lessee as much
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as reasonably practical, Lessor shall have such right of entry without any
rebate of rent to Lessee for any loss of occupancy or quiet enjoyment of the
Premises hereby occasioned.
ARTICLE XV
ESTOPPEL CERTIFICATE
Section 15.01. Estoppel Certificate.
(a) Each party ("Certifying Party") shall at any time upon not less than
fifteen (15) days' prior written notice from the other execute, acknowledge and
deliver to the other a statement in writing (i) certifying, if true, that this
Lease is unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying, if true, that this Lease, as so
modified, is in full force and effect) and the date to which the rent and other
charges are paid in advance, if any, and (ii) acknowledging, if true, that there
are not, to Certifying Party's knowledge, any uncured defaults on the part of
the other party, or specifying such defaults if any are claimed. Any such
statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises.
(b) Each party's failure to deliver such statement within such time shall
be conclusive upon such party (i) that this Lease is in full force and effect,
without modification except as may be represented by the other party on the
notice, (ii) that there are no uncured defaults in the other party's
performance, and (iii) that not more than one month's rent has been paid in
advance.
ARTICLE XVI
LESSOR'S LIABILITY
Section 16.01. Limitations on Lessor's Liability. The term "Lessor" as
used herein shall mean only the owner or owners at the time in question of the
fee title of the Premises. In the event of any transfer of such title or
interest, Lessor herein named (and in case of any subsequent transfers then the
grantor) shall be relieved from and after the date of such transfer of all
liability as respects Lessor's obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during their
respective periods of ownership. For any breach of this Lease by Lessor, the
liability of Lessor (including all persons and entities that comprise Lessor,
and any successor Lessor) and any recourse by Lessee against Lessor shall be
limited to the interest of Lessor, and Lessor's successors in interest, in and
to the Premises. On behalf of itself and all persons claiming by, through, or
under Lessee, Lessee expressly waives and releases Lessor and each member, agent
and employee of Lessor from any personal liability for breach of this Lease.
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ARTICLE XVII
GENERAL PROVISIONS
Section 17.01. Severability. The invalidity of any provision of this Lease
as determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
Section 17.02. Agreed Rate Interest on Past-Due Obligations. Except as
expressly herein provided, any amount due to either party not paid when due
shall bear interest at the Bank of America prime rate plus one percent (1%)
("Agreed Rate"). Payment of such interest shall not excuse or cure any default
by Lessee under this Lease. Despite any other provision of this Lease, the total
liability for interest payments shall not exceed the limits, if any, imposed by
the usury laws of the State of California. Any interest paid in excess of those
limits shall be refunded to the payor by application of the amount of excess
interest paid against any sums outstanding in any order that payee requires. If
the amount of excess interest paid exceeds the sums outstanding, the portion
exceeding those sums shall be refunded in cash to the payor by the payee. To
ascertain whether any interest payable exceeds the limits imposed, any
nonprincipal payment (including late charges) shall be considered to the extent
permitted by law to be an expense or a fee, premium, or penalty rather than
interest.
Section 17.03. Time of Essence. Time is of the essence in the performance
of all obligations under this Lease.
Section 17.04. Additional Rent. Any monetary obligations of Lessee to
Lessor under the terms of this Lease shall be deemed to be Additional Rent and
Lessor shall have all the rights and remedies for the nonpayment of same as it
would have for nonpayment of Base Rent, except that the one year requirement of
Code of Civil Procedure Section 1161(2) shall apply only to scheduled
installments of Base Rent and not to any Additional Rent. All references to
"rent" (except specific references to either Base Rent or Additional Rent) shall
mean Base Rent and Additional Rent.
Section 17.05. Incorporation of Prior Agreements, Amendments and Exhibits.
This Lease (including Exhibits A, B, C, D, E, F, G, H, I, J, K, L, M and N
contains all agreements of the parties with respect to any matter mentioned
herein. No prior agreement or understanding pertaining to any such matter shall
be effective. This Lease may be modified in writing only, signed by the parties
in interest at the time of the modification. Except as otherwise stated in this
Lease, Lessee hereby acknowledges that neither the Lessor nor any employees or
agents of the Lessor has made any oral or written warranties or representations
to Lessee relative to the condition or use by Lessee of said Premises and Lessee
acknowledges that Lessee assumes all responsibility regarding the Occupational
Safety Health Act, the legal use and adaptability of the Premises and the
compliance thereof with all applicable laws and regulations in effect during the
Lease Term except as otherwise specifically stated in this Lease. Neither party
has been induced to enter into this Lease by, and neither party is relying on,
any representation or warranty outside those expressly set forth in this Lease.
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Section 17.06. Notices.
(a) Written Notice. Any notice required or permitted to be given hereunder
shall be in writing and shall be given by a method described in paragraph (b)
below and shall be addressed to Lessee or to Lessor at the addresses noted
below, next to the signature of the respective parties, as the case may be.
Either party may by notice to the other specify a different address for notice
purposes. A copy of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time-to-time hereafter designate by notice to
Lessee, but delay or failure of delivery to such person shall not affect the
validity of the delivery to Lessor or Lessee.
(b) Methods of Delivery:
(i) When personally delivered to the recipient, notice is effective
on delivery. Delivery to the person apparently designated to receive deliveries
at the subject address is personally delivered if made during business hours
(e.g. receptionist).
(ii) When mailed by certified mail with return receipt requested,
notice is effective on receipt if delivery is confirmed by a return receipt.
(iii) When delivery by overnight delivery Federal
Express/Airborne/United Parcel Service/DHL WorldWide Express with charges
prepaid or charged to the sender's account, notice is effective on delivery if
delivery is confirmed by the delivery service.
(c) Refused, Unclaimed or Undeliverable Notices. Any correctly addressed
notice that is refused, unclaimed, or undeliverable because of an act or
omission of the party to be notified shall be considered to be effective as of
the first date that the notice was refused, unclaimed, or considered
undeliverable by the postal authorities, messenger, or overnight delivery
service.
Section 17.07. Waivers. No waiver of any provision hereof shall be deemed
a waiver of any other provision hereof or of any subsequent breach of the same
or any other provisions. Any consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of consent to or approval of any
subsequent act. The acceptance of rent hereunder by Lessor shall not be a waiver
of any preceding breach by Lessee of any provision hereof, other than the
failure of Lessee to pay the particular rent so accepted, regardless of Lessor's
knowledge of such preceding breach at the time of acceptance of such rent.
Section 17.08. Recording. Either Lessor or Lessee shall, upon request of
the other, execute, acknowledge and deliver to the other a "short form"
memorandum of this Lease for recording purposes, provided that Lessee shall also
simultaneously execute in recordable form and deliver to Lessor a Quit Claim
Deed as to its leasehold and any other interest in the Premises and hereby
authorizes Lessor to date and record the same only upon the expiration or sooner
termination of this Lease.
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Section 17.09. Surrender of Possession; Holding Over.
(a) At the expiration of the Lease, Lessee agrees to deliver up and
surrender to Lessor possession of the Premises and all improvements thereon
broom clean and, in as good order and condition as when possession was taken by
Lessee, excepting only ordinary wear and tear (wear and tear which could have
been avoided by first class maintenance practices and in accordance with
industry standards shall not be deemed "ordinary"). Upon expiration or sooner
termination of this Lease, Lessor may reenter the Premises and remove all
persons and property therefrom. If Lessee shall fail to remove any personal
property which it is entitled or obligated to remove from the Premises upon the
expiration or sooner termination of this Lease, for any cause whatsoever,
Lessor, at its option, may remove the same and store or dispose of them, and
Lessee agrees to pay to Lessor on demand any and all expenses incurred in such
removal and in making the Premises free from all dirt, litter, debris and
obstruction, including all storage and insurance charges. If the Premises are
not surrendered at the end of the Lease Term, Lessee shall indemnify Lessor
against loss or liability resulting from delay by Lessee in so surrendering the
Premises, including, without limitation, actual damages for lost rent and with
respect to any claims of a successor occupant.
(b) If Lessee, with Lessor's prior written consent, remains in possession
of the Premises after expiration of the Lease Term and if Lessor and Lessee have
not executed an express written agreement as to such holding over, then such
occupancy shall be a tenancy from month to month at a monthly Base Rent
equivalent to 125% (for the first three months of holdover) and thereafter 150%
of the monthly rental in effect immediately prior to such expiration, such
payments to be made as herein provided for Base Rent. In the event of such
holding over, all of the terms of this Lease, including the payment of
Additional Rent all charges owing hereunder other than rent shall remain in
force and effect on said month to month basis.
Section 17.10. Cumulative Remedies. No remedy or election hereunder by
Lessor shall be deemed exclusive but shall, wherever possible, be cumulative
with all other remedies at law or in equity, provided that notice and cure
periods set forth in Article XII are intended to extend and modify statutory
notice provisions to the extent expressly stated in Section 12.01.
Section 17.11. Covenants and Conditions. Each provision of this Lease to
be observed or performed by Lessee shall be deemed both a covenant and a
condition.
Section 17.12. Binding Effect; Choice of Law. Subject to any provisions
hereof restricting assignment or subletting by Lessee and subject to the
provisions of Article XVI, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State of California and any legal or equitable action or proceeding
brought with respect to the Lease or the Premises shall be brought in Santa
Clara County, California.
Section 17.13. Lease to be Subordinate. Lessee agrees that this Lease is
and shall be, at all times, subject and subordinate to the lien of any mortgage
or other encumbrances which Lessor may create during the Lease Term against the
Premises including all renewals, replacements and extensions thereof provided,
however, that regardless of any default under any
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such mortgage or encumbrance or any sale of the Premises under such mortgage, so
long as Lessee timely performs all covenants and conditions of this Lease and
continues to make all timely payments hereunder, this Lease and Lessee's
possession and rights hereunder shall not be disturbed by the mortgagee or
anyone claiming under or through such mortgagee. Lessee shall execute any
documents subordinating this Lease within ten (10) days after delivery of same
by Lessor so long as the Lender agrees therein that this Lease will not be
terminated if Lessee is not in default following a foreclosure, including,
without limitation, any Subordination Non-Disturbance and Attornment Agreement
("SNDA") which is substantially in the form attached hereto as Exhibit "F."
Lessor shall also utilize its commercially reasonable efforts to obtain a
non-disturbance agreement from any existing lender.
Section 17.14. Attorneys' Fees. If either party herein brings an action to
enforce the terms hereof or to declare rights hereunder, the prevailing party in
any such action, on trial or appeal, shall be entitled to recover its reasonable
attorneys' fees, expert witness fees and costs as fixed by the Court.
Section 17.15. Signs. Lessee shall not place any sign upon the exterior of
any Building without Lessor's prior written consent, which consent shall not be
unreasonably withheld and which consent is hereby given to the signage described
in Exhibit "G" hereto. Lessee, at its sole cost and expense, after obtaining
Lessor's prior written consent, shall install, maintain and remove prior to
expiration of this Lease (or within ten (10) days after any earlier termination
of this Lease) all signage in full compliance with (i) all applicable law,
statutes, ordinances and regulations and (ii) all provisions of this Lease
concerning Alterations.
Section 17.16. Merger. The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, or a termination by Lessor, shall not
work a merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.
Section 17.17. Guarantor. [Intentionally Omitted] [Exhibit H]
Section 17.18. Quiet Possession. Upon Lessee timely paying the rent for
the Premises and timely observing and performing all of the covenants,
conditions and provisions on Lessee's part to be observed and performed
hereunder, Lessee shall have quiet possession of the Premises for the entire
Lease Term, subject to all of the provisions of this Lease.
Section 17.19. Easements. Lessor reserves to itself the right, from
time-to-time, to grant such easements, rights and dedications that Lessor deems
necessary or desirable, and to cause the recordation of Parcel Maps and
restrictions, so long as such easements, rights, dedications, Maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee shall sign any of the aforementioned or other documents, and take
such other actions, which are reasonably necessary or appropriate to accomplish
such granting and recordation, upon request of Lessor, and failure to do so
within ten (10) business days of a written request to do so shall constitute a
material breach of this Lease.
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Section 17.20. Authority. Each individual executing this Lease on behalf
of a corporation, limited liability company or partnership represents and
warrants that he or she is duly authorized to execute and deliver this Lease on
behalf of such entity in accordance with a duly adopted resolution of the
governing group of the entity empowered to grant such authority, and that this
Lease is binding upon said entity in accordance with its terms. Each party shall
provide the other with a certified copy of its resolution within ten (10) days
after execution hereof, but failure to do so shall in no manner (i) be evidence
of the absence of authority or (ii) affect the representation or warranty. It is
understood that this Lease shall not be binding on Lessor unless and until
Lessor shall have executed same and delivered a fully executed copy of this to
Lessee.
Section 17.21. Force Majeure Delays. In any case where either party hereto
is required to do any act (other than the payment of money), delays caused by or
resulting from Acts of God or Nature, war, civil commotion, fire, flood or other
casualty, labor difficulties, shortages of labor or materials or equipment,
unplanned delays in governmental permitting or approval process, government
regulations, unusually severe weather, or other causes beyond such party's
reasonable control the time during which act shall be completed, shall be deemed
to be extended by the period of such delay, whether such time be designated by a
fixed date, a fixed time or "a reasonable time."
Section 17.22. Hazardous Materials.
(a) Definition of Hazardous Materials and Environmental Laws. "Hazardous
Materials" means any (a) substance, product, waste or other material of any
nature whatsoever which is or becomes listed regulated or addressed pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. sections 9601, et seq. ("CERCLA"); the Hazardous Materials Transportation
Act ("HMTA") 49 U.S.C. section 1801, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. section 6901, et seq. ("RCRA"); the Toxic Substances
Control Act, 15 U.S.C. sections 2601, et seq. ("TSCA"); the Clean Water Act, 33
U.S.C. sections 1251, et seq.; the California Hazardous Waste Control Act,
Health and Safety Code sections 25100, et seq.; the California Hazardous
Substances Account Act, Health and Safety Code sections 26300, et seq.; the
California Safe Drinking Water and Toxic Enforcement Act, Health and Safety Code
sections 25249.5, et seq.; California Health and Safety Code sections 25280, et
seq.; (Underground Storage of Hazardous Substances); the California Hazardous
Waste Management Act, Health and Safety Code sections 25170.1, et seq.;
California Health and Safety Code sections 25501. et seq. (Hazardous Materials
Response Plans and Inventory); or the Porter-Cologne Water Quality Control Act,
California Water Code sections 13000, et seq., all as amended, or any other
federal, state or local statute, law, ordinance, resolution, code, rule,
regulation, order or decree regulating, relating to or imposing liability
(including, but not limited to, response, removal and remediation costs) or
standards of conduct or performance concerning any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereafter may be in effect
(collectively, "Environmental Laws"); (b) any substance, product, waste or other
material of any nature whatsoever whose presence in and of itself may give rise
to liability under any of the above statutes or under any statutory or common
law theory based on negligence, trespass, intentional tort, nuisance, strict or
absolute liability or under any reported decisions of a state or federal court,
(c) petroleum or crude oil, including but
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not limited to petroleum and petroleum products contained within regularly
operated motor vehicles and (d) asbestos.
(b) Lessor's Representations and Disclosures. Lessor represents that it
has provided Lessee with a description of the Hazardous Materials on or beneath
the Property as of the date hereof, attached hereto as Exhibit I and
incorporated herein by reference. Lessee acknowledges that in providing the
attached Exhibit I, Lessor has satisfied its obligations of disclosure pursuant
to California Health & Safety Code Section 25359.7 which requires:
"Any owner of nonresidential real property who knows, or has reasonable
cause to believe, that any release of hazardous substances has come to be
located on or beneath that real property shall, prior to the sale, lease or
rental of the real property by that owner, give written notice of that condition
to the buyer, lessee or renter of the real property."
(c) Use of Hazardous Materials. Lessee shall not cause or permit any
Hazardous Materials to be brought upon, kept or used in, on or about the
Property by Lessee, its agents, employees, contractors, licensee, guests,
visitors or invitees without the prior written consent of Lessor. Lessor shall
not unreasonably withhold such consent so long as Lessee demonstrates to
Lessor's reasonable satisfaction that such Hazardous Materials are necessary or
useful to Lessee's business and will be used, kept and stored in a manner that
complies with all applicable Environmental Laws. Lessee shall, at all times,
use, keep, store, handle, transport, treat or dispose all such Hazardous
Materials in or about the Property in compliance with all applicable
Environmental Laws. Lessee shall remove all Hazardous Materials used or brought
onto the Property during the Lease Term from the Property prior to the
expiration or earlier termination of the lease.
(d) Use of Property. Lessee shall not use the Property in any manner that
could cause or contribute to the migration or release of any existing
contamination and shall not interfere with response actions taken on or around
the Property.
(e) Lessee's and Lessor's Environmental Indemnity. Lessee agrees to
indemnify and hold Lessor harmless from any liabilities, losses, claims,
damages, penalties, fines, attorney fees, expert fees, court costs, remediation
costs, investigation costs, or other expenses resulting from or arising out of
the use, storage, treatment, transportation, release, presence, generation, or
disposal of Hazardous Materials on, from or about the Property, and/or
subsurface or ground water, after the Commencement Date from an act or omission
of Lessee (or Lessee's successor), its agents, employees, invitees, vendors,
contractors, guests or visitors. Lessor agrees to indemnify and hold Lessee
harmless from any liabilities, losses, claims, damages, penalties, fines,
attorney fees, expert fees, court costs, remediation costs, investigation costs,
or other expenses resulting from or arising out of the use, storage, treatment,
transportation, release, presence, generation, or disposal of Hazardous
Materials on, from or about the Property, and/or subsurface or ground water,
prior to the Commencement Date from an act or omission of Lessor (or Lessor's
predecessor), its agents, employees, invitees, vendors, contractors, guests or
visitors.
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(f) Lessee's Obligation to Promptly Remediate. If the presence of
Hazardous Materials on the Premises after the Commencement Date results from an
act or omission of Lessee (or Lessee's successors), its agents, employees,
invitees, vendors, contractors, guests, or visitors results in contamination or
deterioration of the Property or any water or soil beneath the Property, Lessee
shall promptly take all action necessary or appropriate to investigate and
remedy that contamination, at its sole cost and expense, provided that Lessor's
approval of such action shall first be obtained. Lessor's approval shall not be
unreasonably withheld.
(g) Notification. Lessor and Lessee each agree to promptly notify the
other of any communication received from any governmental entity concerning
Hazardous Materials or the violation of Environmental Laws that relate to the
Property.
Section 17.23. Modifications Required by Lessor's Lender. If any lender of
Lessor requires a modification of this Lease that will not increase Lessee's
cost or expense or materially and adversely change Lessee's rights and
obligations, this Lease shall be so modified and Lessee shall execute whatever
documents are required by such lender and deliver them to Lessor within ten (10)
days after the request.
Section 17.24. Brokers. Lessor and Lessee each represents to the other
that it has had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, except for the real estate brokers or agents
identified on the signature page hereof ("Brokers") and that they know of no
other real estate broker or agent who is entitled to a commission or finder's
fee in connection with this Lease. Each party shall indemnify, protect, defend,
and hold harmless the other party against all claims, demands, losses,
liabilities, lawsuits, judgments, and costs and expenses (including reasonable
attorney fees) for any leasing commission, finder's fee, or equivalent
compensation alleged to be owning on account of the indemnifying party's
dealings with any real estate broker or agent other than the Brokers. The terms
of this Section 17.24 shall survive the expiration or earlier termination of the
Lease Term.
Section 17.25. Right of First Offer to Lease Adjacent Project.
(a) If Lessor enters into a Purchase and Sale Agreement to purchase
certain real property which is adjacent to the Project and which is depicted on
Exhibit "N" hereto and on which Lessor desires to develop an additional
office/research and development project "Adjacent Project," Lessee shall have a
right of first offer ("Right of First Offer") to lease the Adjacent Project
subject to paragraphs (b) through (g) below.
(b) This Section 17.25 shall automatically and permanently become null and
void if at the time Lessor enters into the aforesaid Purchase and Sale Agreement
or at the time Lessee exercises the Right of First Offer: (i) this Lease is not
in full force and effect, (ii) Lessee is in default beyond any expressly notice
and cure period provided under this Lease, and (iii) Lessee's then current
financial condition, as revealed by its most recent financial statements (which
shall include quarterly and annual financial statements, including income
statements, balance sheets, and cash flow statements), fail to demonstrate that
either: (1) Lessee's net worth is at least equal to its net worth at the time
this Lease was signed; or (2) Lessee meets other financial criteria acceptable
to Lessor in its sole discretion.
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(c) If Lessee is not in default beyond any express notice and cure period
provided under this Lease when Lessor enters into said Purchase and Sale
Agreement or at the time Lessee exercises its Right of First Offer, Lessor shall
not lease the Adjacent Project to another lessee unless and until Lessor has
first offered it to Lessee in writing (the "Offer Notice") and either (i) Lessee
rejects such offer or (ii) a period of five (5) business days has elapsed from
the date that Lessor has delivered the Offer Notice to Lessee, without Lessee
having notified Lessor in writing of its acceptance of such Offer Notice,
delivered a signed Lease and supplied Lessor with current financial statements
pursuant to Section 17.25 (b), whichever event occurs first. The Offer Notice
shall contain the following information: (a) a general description of the number
of buildings to be built and the approximate rentable square feet of each, (b)
the date on which the Lessor expects the lease term to commence, (c) the base
rent. There shall be attached to the Offer Notice a form of written Lease
containing such other terms and conditions upon which Lessor wishes to lease the
Adjacent Project.
(d) If Lessee timely delivers to Lessor, in accordance with the conditions
of this Section 17.25, written notice of Lessee's acceptance of the Offer Notice
together with a signed Lease (without modification of any kind) and Lessee's
financial statements and Lessor determines pursuant to Section 17.25(b) that
Lessee meets all of the conditions provided in this Section 17.25, then Lessee
shall be deemed to have duly exercised its right hereunder and Lessor shall
execute the Lease.
(e) If Lessee declines or fails to duly and timely accept the Offer Notice
and to return same with the signed Lease and financial statements as provided in
Section 17.25(d), or fails to meet all of the conditions provided in Section
17.25(b), this Section 17.25 shall automatically become null and void and have
no further force and effect and Lessor shall thereafter be free to lease the
Adjacent Project in portions or in its entirety to any tenant at any time
without regard to the restrictions in this Section 17.25 and on whatever terms
and conditions Lessor may decide in its sole discretion, without again complying
with all the provisions of this Section 17.25.
(f) This Right of First Offer is personal to the Lessee signing this Lease
and shall become null and void upon the occurrence of an assignment of the Lease
or a sublet of all or more than fifty percent (50%) of the Rentable Area of the
Premises for the remainder of the Lease Term other than to an Affiliate of said
Lessee.
(g) This Right of First Offer shall become null and void upon the
occurrence of any transfer of title to the Premises or Project by Lessor,
including without limitation, by foreclosure or otherwise.
Section 17.26. Right of First Offer to Purchase Premises. Should Lessor
determine at any time during the Lease Term that it intends to sell the
Premises, and Lessee is not then in default beyond any express notice and cure
period provided under this Lease, it shall notify Lessee of the terms and
conditions on which it wishes to sell in the form of a Purchase and Sale
Agreement which shall have terms and conditions sufficient to constitute a
binding contract (once signed by both parties) to accomplish the purchase and
sale and which terms and conditions shall otherwise be in the sole discretion of
Lessor. If Lessee does not sign and hand-
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deliver the signed Purchase and Sale Agreement to Lessor (without modification
of any kind) within five (5) business days after Lessor delivers same to Lessee,
or if Lessee fails to provide with said signed Purchase and Sale Agreement
financial statements demonstrating that Lessee's net worth is at least equal to
its net worth at the time this Lease is executed, or if Lessee fails to timely
perform all of its obligations under the Purchase and Sale Agreement or the
escrow established thereunder is terminated for any reason, this Section 17.26
shall automatically become null and void and have no further force and effect
and Lessor shall thereafter be free to sell the Premises or Project in portions
or in its entirety to any buyer at any time without regard to the restrictions
in this Section 17.26 and on whatever terms and conditions Lessor may decide in
its sole discretion, without again complying with any of the provisions of this
Section 17.26. This Right of First Offer is personal to the Lessee signing this
Lease and shall become null and void upon the occurrence of an assignment of the
Lease or a sublet of all or more than fifty percent (50%) of the Premises for
the remainder of the Lease Term other than to an Affiliate of said Lessee. This
Right of First Offer shall become null and void upon the occurrence of any
transfer of title to the Premises or Project by Lessor, including without
limitation, by foreclosure or otherwise. This Right of First Offer shall be
subordinate to the lien of any deed of trust recorded against the Project or
Premises at any time. This Right of First Offer shall not apply with respect to
any transfer of title or other interest in the Project or Premises to an entity
which is an "Affiliate" of Lessor (as that Lessor is used herein Section 11.02
to describe entity relationships of Lessee) or to Lehman Brothers or any entity
related to Lehman Brothers.
Section 17.27 List of Exhibits.
Ref. Page
EXHIBIT A: Real Property Legal Description,
Site Plan, and Building Elevations
EXHIBIT B: Plans and Specifications for Shell Buildings
EXHIBIT C: Work Letter Agreement for Tenant.
Improvements and Interior Specification Standards
EXHIBIT D: Cost Responsibilities of Lessor and Lessee
EXHIBIT E: Memorandum of Commencement of Lease
Term and Schedule of Base Rent
EXHIBIT F: SNDA
EXHIBIT G: Signage Exhibit
EXHIBIT H: Guaranty of Lease [Intentionally Omitted]
EXHIBIT I: Hazardous Materials Disclosure
EXHIBIT J: [Intentionally omitted]
EXHIBIT K: [Intentionally omitted]
EXHIBIT L: Rules and Regulations
EXHIBIT M: Moffett Park TDM Plan
EXHIBIT N: Adjacent Project
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LESSOR AND LESSEE EACH HAS CAREFULLY READ AND HAS REVIEWED THIS LEASE AND BEEN
ADVISED BY LEGAL COUNSEL OF ITS OWN CHOOSING AS TO EACH TERM AND PROVISION
CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOWS ITS INFORMED AND
VOLUNTARY CONSENT THERETO. EACH PARTY HEREBY AGREE THAT, AT THE TIME THIS LEASE
IS EXECUTED, THE TERMS AND CONDITIONS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
Executed at San Jose, California, as of the reference date.
LESSOR: ADDRESS:
MOFFET PARK DRIVE LLC, c/o Jay Paul Company
a California limited liability 353 Sacramento Street, Suite 1740
company San Francisco, California 94111
By: GATEWAY LAND COMPANY, INC.
A California corporation,
Managing Member With a copy to:
By: Thomas G. Perkins, Esq.
----------------------------------- 99 Almaden Blvd., 8th Floor
Jay Paul, President San Jose, CA 95113
Telephone: 408/993-9911
Facsimile: 408-286.3312
LESSEE: ADDRESS:
ARIBA, INC.
a Delaware corporation
1565 Charleston Road
Mountain View, CA 94041
By: /s/ Edward P. Kinsey ATTN: Chief Financial Officer
-----------------------------------
Edward P. Kinsey 1111 Lockheed Martin Way
(Type or print name) Sunnyvale, CA 94089
Its: Edward P. Kinsey
----------------------------------
Vice President- Finance
Chief Financial Officer (After Commencement Date)
Copies to:
Ariba - Real Estate Dept. and
Ariba - Legal Dept.
1111 Lockheed Martin Way
Sunnyvale, CA 94089
38
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BROKER EXECUTION
By signing below, the indicated real estate broker or agent is not being
made a party hereto but is signifying its agreement with the provisions hereof
concerning brokerage.
LESSOR's BROKER: ADDRESS:
Cornish & Carey Commercial 2804 Mission College Boulevard
Suite 120
Santa Clara, California 95054
By:
---------------------------
Phil Mahoney
(Type or print name)
Its: Executive Vice President
-------------------------
LESSEE's BROKER: ADDRESS:
Cushman & Wakefield 2055 Gateway Place, Suite 550
San Jose, California 95110
By:
---------------------------
John McMann
(Type or print name)
Its: Associate Director
39
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EXHIBIT B
PREMISES
[Graphic of Premises Appears Here.]
EXHIBIT B
<PAGE>
EXHIBIT C
SUBLANDLORD'S RULES AND REGULATIONS
A. General Rules and Regulations. The following rules and regulations govern
the use of the Buildings and the Project Common Areas. Subtenant will be bound
by such rules and regulations in addition to all rules and regulations imposed
under the terms of the Master Lease, and agrees to cause Subtenant's employees,
subtenants, assignees, contractors, suppliers, customers, and invitees to
observe the same.
1. Except with respect to the interior of Building Three, which shall be
exempt only so long as Subtenant does not violate any Applicable Requirements
and does not interfere with Sublandlord's access rights as provided in the
Sublease, Subtenant shall not in any way obstruct the sidewalks, halls,
elevators, stairways, entry passages, pedestrian passageways, driveways,
entrances and exits to the Project or the Buildings, and they shall use the same
only as passageways to and from their respective work areas.
2. Any sash doors, sashes, windows, glass doors, lights, and skylights
that reflect or admit light into any Building shall not be covered or obstructed
by the Subtenant. Water closets, urinals and wash basins shall not be used for
any purpose other than those for which they were constructed, and no rubbish,
newspapers, food or other substance of any kind shall be thrown into them.
Subtenant shall not mark, drive nails, screw or drill into, paint or in any way
deface the exterior walls, roof, foundations, bearing walls or pillars without
the prior written consent of the Sublandlord, which consent may be withheld in
Sublandlord's sole discretion. The expense of repairing any breakage, stoppage
or damage resulting from a violation of this rule shall be borne by Subtenant.
Cleaning of equipment of any type is prohibited.
3. No awning or shade shall be affixed or installed over or in the windows
or the exterior of the Premises except with the consent of the Sublandlord,
which may be withheld in Sublandlord's discretion.
4. No boring or cutting for wires shall be allowed, except with the
consent of the Sublandlord, which may be withheld in Sublandlord's discretion.
5. Subtenant shall not do anything in the Premises, or bring or keep
anything therein, which will in any way increase or tend to increase the risk of
fire or the rate of fire insurance or which shall conflict with the regulations
of the fire department or the law or with any insurance policy on the Premises
or any part thereof, or with any rules or regulations established by any
administrative body or official having jurisdiction, and it shall not use any
machinery therein, even though its installation may have been permitted, which
may cause any unreasonable noise, jar or tremor to the floors or walls, or which
by its weight might injure the floors of the Premises.
6. Sublandlord may reasonably limit weight, size and position of all
safes, fixtures and other equipment used in the Premises. If Subtenant shall
require extra heavy equipment, Subtenant shall notify Sublandlord of such fact
and shall pay the cost of structural bracing to accommodate it. All damage done
to the Premises or Project by installing, removing or maintaining extra heavy
equipment shall be repaired at the expense of the Subtenant.
7. Subtenant and Subtenant's officers, agents and employees shall not make
nor permit any loud, unusual or improper noises nor interfere in any way with
other Subtenants or those having business with them, nor bring into or keep
within the Project any animal or bird (except seeing-eye dogs) or any bicycle or
other vehicle, except such vehicle as Sublandlord may from time to time permit.
8. No machinery of any kind will be allowed in the Premises without the
written consent of Sublandlord. This shall not apply, however, to customary
office equipment or trade fixtures or package handling equipment.
9. Except with respect to Building Three, which shall be exempt only so
long as Subtenant does not restrict access to generators, trash areas and fire
lanes, all freight must be moved into, within and out of the Project only
EXHIBIT C
1
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during such hours and according to such reasonable regulations as may be posted
from time to time by Sublandlord. Subtenant shall not overload the elevators
beyond the specified capacity limits of the elevator being used.
10. No aerial or satellite dish or similar device shall be erected on the
roof or exterior walls of the Premise, or on the grounds, without in each
instance, the written consent of Sublandlord. Any aerial so installed without
such written consent shall be subject to removal without notice at any time.
Sublandlord may withhold consent in its sole discretion. Subtenant will not
interfere with radio or television broadcasting or reception from or in the
Project or elsewhere.
11. All garbage, including wet garbage, refuse or trash shall be placed by
the Subtenant in the receptacles appropriate for that purpose and only at
locations prescribed by the Sublandlord.
12. Subtenant shall not burn any trash or garbage at any time in or about
the Premises or any area of the Project.
13. Subtenant shall observe all security regulations issued by Sublandlord
and comply with instructions and/or directions of the duly authorized security
personnel for the protection of the Project and all tenants therein.
14. Any requirements of the Subtenant will be considered only upon written
application to Sublandlord and Sublandlord's address set forth in the Sublease.
However, for minor day to day repairs and emergency repairs, Subtenant may call
Sublandlord for such repairs or other service via Sublandlord's emergency
hotline for immediate service. Such requirement must promptly be filed under
written application as set forth above as soon as possible thereafter.
15. No waiver of any rule or regulation of Sublandlord shall be effective
unless expressed in writing and signed by Sublandlord or its authorized agent.
16. Sublandlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Sublandlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of the law or rules and regulations of the Project. Sublandlord will in all
cases retain the right to control and prevent access thereto of all persons
whose presence in the reasonable judgement of Sublandlord would be prejudicial
to the safety character, reputation, and interest of the Project and its
tenants, provided that nothing herein contained will be constructed to prevent
such access to persons with whom any Subtenant normally deals in the ordinary
course of its business, unless such persons are engaged in illegal or unlawful
activities. No Subtenant and no employee or invitee of any Subtenant will go
upon the roof of the Building, except as may be necessary to install, repair
and/or maintain an antenna or dish satellite installed in accordance with the
terms of the Sublease.
17. Except with respect to Building Three, Sublandlord specifically
reserves to itself or to any person or firm it selects, (i) the right to place
in and upon the Project, coin-operated machines for the sale of cigarettes,
candy and other merchandise or service, and (ii) the revenue resulting
therefrom.
18. Except as specifically provided in the Sublease to which these Rules
and Regulations are attached, no sign, placard, picture, advertisement, name or
notice may be installed or displayed on any part of the outside or the inside of
any Building or the Project without the prior written consent of the
Sublandlord. Sublandlord will have the right to remove, at Subtenant's expense
and without notice, any sign installed or displayed in violation of this rule.
All approved signs or lettering on doors and walls are to be printed, painted,
affixed, or inscribed at the expense of the Subtenant and under direction of
Sublandlord by a person or company designated or approved by Sublandlord.
19. If Sublandlord objects in writing to any curtains, blinds, shades,
screens or hanging plants or other similar attached or used in connection with
any window or door of the Premises, are placed on any windowsill, which is
visible from the exterior of the Premises, Subtenant will immediately
discontinue such use. Subtenant agrees not to place anything against or near
glass partitions or doors or windows, which may appear unsightly from outside
the Premises including from within any interior common areas.
EXHIBIT C
2
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20. Sublandlord expressly reserves the right to absolutely prohibit
solicitation, canvassing, distribution of handbills, or any other written
material, peddling, sales, and, except with respect to Building Three so long as
Subtenant does not display products, goods, wares or similar items in the
windows of Building Three, displays or products, goods, and wares, in all
portions of the Project except as may be expressly permitted under the Sublease.
However, Subtenant shall be allowed to use an outside catering vendor to cater
Subtenant's own, internal events. Sublandlord reserves the right to prohibit,
restrict and regulate the use of common areas of the Project and Building by
invitees of Subtenants providing services to Subtenants on a periodic or daily
basis including food and beverage vendors. Such restrictions may include
limitations on time, place, manner and duration of access to a Subtenant's
Premises for such purposes. Without the limiting of the foregoing, Sublandlord
may require that such parties use service elevators, halls, passageways and
stairways for such purposes to preserve access within the Building for
Subtenants and the general public.
21. Subtenant shall not host any organized events or social gatherings in
the Common Areas without providing at least two weeks' prior written notice to
Sublandlord and without receiving the written consent of Sublandlord and, at
Sublandlord's discretion, Master Landlord. Sublandlord may condition its
approval on certain requirements including but not limited to the provision by
Subtenant of certificates of insurance from itself and/or any third party
vendors associated with such event, submission of an increased security deposit,
and a release from liability.
22. Sublandlord reserves the right to exclude from any Building unless that
person is known to be person or employee in charge of the Building, or had a
pass or is properly identified. Subtenant will be responsible for all persons
for whom it requests and will be liable to Sublandlord for all acts of such
persons. Sublandlord will not be liable for damages for any error with regard to
the admission to or exclusion from any Building of any person. Sublandlord
reserves the right to prevent access to the Building in case of invasion, mob,
riot, public excitement, or other commotion by closing the doors or by other
appropriate action.
23. The directories of the Buildings and the Project will be provided
exclusively for the display of the name and location of Sublandlord and
Subtenants only and Sublandlord reserves the right to exclude any other names
therefrom.
24. Subtenant will not cause any unnecessary labor by carelessness or
indifference to the good order and cleanliness of the Premises.
25. No rekeying of doors in the Premises shall be made without complying
with the requirements of Sublandlord's master key program for the Project,
including the requirement that any rekeying be consistent with the master key
associated with such program and held by Sublandlord and the Security Company.
Upon rekeying of any doors, Subtenant shall deliver to Sublandlord a copy of
such keys. Subtenant, upon the termination of its tenancy, will deliver to
Sublandlord all the keys to all doors which have been furnished to Subtenant or
rekeyed by Subtenant, and in the event of loss of any keys so furnished by
Sublandlord, will pay Sublandlord therefor.
26. Except with respect to Building Three, Freight elevator(s) will be
available for use by all tenants in the building, subject to such reasonable
scheduling as Sublandlord, in its discretion, deems appropriate. Except with
respect to Building Three, no equipment, furniture, materials, packages,
supplies, merchandise or other property will be received in the building or
carried in the elevators except between such hours and in such elevators as may
be designated by Sublandlord. Except as otherwise agreed between Subtenant and
Sublandlord, and except with respect to Building Three, Subtenant's initial move
in and subsequent deliveries of bulky items, such as furniture, safes, and
similar items will, unless otherwise agreed in writing by Sublandlord, be made
during the hours of 5:30 p.m. and 7:30 a.m., or on Saturday or Sunday. Except
with respect to Building Three, deliveries during normal office hours shall be
limited to normal office supplies and other small items. No deliveries will be
made which impede or interfere with other Subtenants of the operation of the
Building.
27. Subtenant will not use or keep in the Premises any kerosene, gasoline
or inflammable or combustible fluid or material other than those limited
quantities necessary for the operation or maintenance of office equipment.
Subtenant will not use or permit to be used in the Premises any foul or noxious
gas or substance, or permit or allow
EXHIBIT C
3
<PAGE>
the Premises to be occupied or used in a manner offensive or objectionable to
Sublandlord or other occupants of the Building by reason of odors or vibrations,
nor will Subtenant bring into or keep in or about the Premises any pets or other
animals (except seeing-eye dogs).
28. Subtenant will not use any method of heating or air conditioning other
than that supplied by Sublandlord without Sublandlord's prior written consent.
29. Subtenant will not waste electricity, water or air conditioning and
agrees to cooperate fully with Sublandlord to assure the most effective
operation of the Building's heating and air conditioning and to comply with any
governmental energy-saving rules, law or regulations of which Subtenant has
actual notice, and will refrain from attempting to adjust controls.
30. Without the written consent of Sublandlord, Subtenant will not use the
name of the Building or the Project in connection with or in promoting or
advertising the business of Subtenant except as Subtenant's address.
31. Subtenant will close and lock the doors of its Premises and entirely
shut off all water faucets or other water apparatus, and lighting or gas before
Subtenant and its employees leave the Premises. Subtenant will be responsible
for any damage or injuries sustained by other Subtenants or occupants of the
Building or by Sublandlord for noncompliance with this rule.
32. Subtenant will not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Sublandlord's prior written consent, which consent Sublandlord may
withhold in its sole and absolute discretion.
33. Sublandlord reserves the right to direct electricians as to where and
how telephones and telegraph wires are to be introduced to the Premises.
Subtenant will not cut or bore holes for wires. Subtenant will not affix any
floor covering to the floor of the Premises in any manner except as approved by
Sublandlord. Subtenant shall repair any damage resulting from noncompliance with
this rule.
34. Subtenant will store all its trash and garbage within its Premises or
in other facilities provided by Sublandlord. Subtenant will not place in any
trash box or receptacle any material, which cannot be disposed of in the
ordinary and customary manner of trash and garbage disposal. All garbage and
refuse disposal is to be made in accordance with directions issued from time to
time by Sublandlord.
35. The Premises will not be used for lodging or for manufacturing of any
kind, nor shall the Premises be used for any improper, immoral or objectionable
purpose. No cooking will be done or permitted on the Premises without
Sublandlord's consent, except the use by Subtenant of approved equipment for
brewing coffee, tea, hot chocolate and similar beverages shall be permitted, and
the use of a microwave oven for employees use will be permitted, provided that
such equipment and use is in accordance with all applicable federal, state,
county and city laws, codes, ordinances, rules and regulations.
36. Neither Subtenant nor any of its employees, agents, customers and
invitees may use in any space or in the Common Areas of the Building or the
Project any hand truck except those equipped with rubber tires and side guards
or such other material-handling equipment as Sublandlord may approve. Subtenant
will not bring any other vehicles of any kind into the Building, including
bicycles.
EXHIBIT C
4
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37. Subtenant agrees to comply with all safety, fire protection and
evacuation procedures established by Sublandlord or any governmental agency.
38. So long as Sublandlord complies with its obligations under the Sublease
regarding security, Subtenant assumes any and all responsibility for protecting
its Premises from theft, robbery and pilferage, which includes keeping doors
locked and other means of entry to the Premises closed.
39. To the extend Sublandlord reasonably deems it necessary to exercise
exclusive control over any portions of the Common Areas for the mutual benefit
of the Subtenants in the Building or the Project, Sublandlord may do so subject
to reasonable, non-discriminatory additional rules and regulations.
40. Smoking is not allowed in the Building. You must be at least forty (40)
feet from any entry to the Building. Sublandlord may require Subtenant and any
of its employees, agents, clients, customers, invitees and guests who desire to
smoke, to smoke within designated smoking areas within the Project.
41. Employees of Sublandlord will not perform any work or do anything
outside of their regular duties unless under special instructions from
Sublandlord, and no employee of Sublandlord will admit any person (Subtenant or
otherwise) to any office without specific instructions from Sublandlord.
42. Subtenant shall not store any property, temporarily or permanently, in
the Common Areas. Any such storage shall be permitted only by the prior written
consent of Sublandlord, which consent may be revoked at any time. In the event
that any unauthorized storage shall occur, Sublandlord shall have the right,
without notice, in addition to such other rights and remedies that it may have,
to remove the property and charge the cost to Subtenant, which cost shall be
immediately payable upon demand by Sublandlord.
43. These Rules and Regulations are in addition to, and will not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Sublease. Sublandlord may waive any
one or more of these Rules and Regulations for the benefit of Subtenant or any
other Subtenant, but no such waiver by Sublandlord will be construed as a waiver
of such Rules and Regulations in favor of Subtenant or any other Subtenant, nor
prevent Sublandlord from thereafter enforcing any such Rules and Regulations
against any or all of the Subtenants of the Project.
44. Sublandlord reserved the right at any time to change or rescind any one
or more of these rules and regulations or make such other and further reasonable
rules and regulations as in Sublandlord's judgment may from time to time be
necessary for the operation, management, safety, care and cleanliness of the
Project and the Premises, and for the preservation of good order therein, as
well as for the convenience of the other occupants and tenants of the Project.
Sublandlord shall not be responsible to Subtenant or the any other person for
the non-observance or violation of the rules and regulations by any other tenant
or other person. Subtenant shall be deemed to have read these rules, and have
agreed to abide by them as a condition to its occupancy of the Premises.
45. Subtenant shall abide by any additional rules or regulations which are
ordered or requested by any governmental or military authority.
46. In the event of any conflict between these rules and regulations, or
any further or modified rules and regulations from time to time issued by
Sublandlord, and the Sublease provisions, the Sublease provisions shall govern
and control.
EXHIBIT C
5
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B. Parking Rules and Regulations. The following rules and regulations govern
the use of the parking facilities, which serve the Project. Subtenant will
be bound by such rules and regulations and agrees to cause its employees,
subtenants, assignees, contractors, suppliers, customers and invitees to
observe the same:
1. Subtenant will not permit or allow any vehicles that belong to or are
controlled by Subtenant or Subtenant's employees, subtenants, customers or
invitees to be loaded, unloaded or parked in areas other than those designated
by Sublandlord for such activities. No vehicles are to be parked in the parking
areas other than normally sized passenger automobiles, motorcycles and pick-up
trucks. No extended term storage of vehicles is permitted. Vehicles leaking any
substance other than water are prohibited and may be towed by Sublandlord
without prior notice.
2. Vehicles must be parked entirely within painted stall lines of a single
parking stall.
3. All directional signs and arrows must be observed.
4. The speed limit within all parking areas shall be five (5) miles per
hour.
5. Parking is prohibited: (a) in areas not striped for parking; (b) in
aisles or on ramps; (c) where "no parking" signs are posted; (d) in
cross-hatched areas; and (e) in such other areas as may be designated from time
to time by Sublandlord or Sublandlord's parking operator.
6. Sublandlord reserves the right, without cost or liability to
Sublandlord, to tow any vehicle if such vehicle's audio theft alarm system
remains engaged for an unreasonable period of time or if such vehicle has been
abandoned.
7. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.
8. Sublandlord may refuse to permit any person to park in the parking
facilities who violates these rules with unreasonable frequency, and any
violation of these rules shall subject the violator's car to removal, at such
car owner's expense. Subtenant agrees to use its best efforts to acquaint its
employees, subtenants, assignees, contractors, suppliers, customers and invitees
with these parking provisions, rules and regulations.
9. Parking stickers, access cards or any other device or form of
identification supplied by Sublandlord as a condition of use of the parking
facilities shall remain the property of Sublandlord. Parking identification
devices, if utilized by Sublandlord, must be displayed as requested any may not
be mutilated in any manner. The serial number of the parking identification
device may not be obliterated. Parking identification devices, if any are not
transferable and any device in the possession of an unauthorized holder will be
void. Sublandlord reserves the right to refuse to issue monthly stickers or
other parking identification devices to Subtenant or any of its agents,
employees or representatives who willfully refuse to comply with these rules and
regulations and all posted or unposted city, state or federal ordinances, laws
or agreements.
10. Loss or theft of parking identification devices or access cards must be
reported to the management office in the Project immediately, and a lost or
stolen report must be filed by the Subtenant or user of such parking
identification device or access card at the time. Sublandlord has the right to
exclude any vehicle from the parking facilities that does not have a parking
identification device or valid access card. Any parking identification device or
access card, which is reported lost or stolen, and which is subsequently found
in the possession of an unauthorized person will be confiscated and the illegal
holder will be subject to prosecution.
11. All damage or loss claimed to be the responsibility of Sublandlord must
be reported, itemized in writing and delivered to the management office located
within the Project within ten (10) business days after any claimed damage or
loss occurs. Any claim not so made is waived. Sublandlord is not responsible for
damage by water or fire, or for the acts or omissions of others, or for articles
left in vehicles. In any event, the total liability of Sublandlord, if any, is
limited to Two Hundred Fifty Dollars ($250.00) for all damages or loss to any
car. Sublandlord is not responsible for loss of use.
EXHIBIT C
6
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12. The parking operators, managers or attendants are not authorized to
make or allow any exceptions to these rules and regulations made by the parking
operators, managers or attendants without the express written consent of
Sublandlord will not be deemed to have been approved by Sublandlord.
13. Sublandlord reserves the right, without cost or liability to
Sublandlord, to tow any vehicle, which is used or parked in violation of these
rules and regulations.
14. Sublandlord reserves the right from time to time to modify and/or adopt
such other reasonable and non-discriminatory rules and regulations for the
parking facilities as it deems necessary for the operation of the parking
facilities.
15. In the event of any conflict between these rules and regulations, or
any further or modified rules and regulations from time to time issued by
Sublandlord, and the Sublease provisions, the Sublease provisions shall govern
and control.
EXHIBIT C
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EXHIBIT D
FURNITURE
Ariba Building 3 Existing Furniture Inventory
<TABLE>
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Code Area/Item Product Floor 1 Floor 2 Floor 3 Floor 4
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<S> <C> <C> <C> <C> <C> <C>
Offices (10 x 12)
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Desk U configuration Herman Miller - AO-2 22 22 28 28
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Workstations (8 x 8)
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L configuration Herman Miller - AO-2 90 118 168 155
------------------------------------------------------------------------------------------------------------------------------------
Hoteling Station 7 11 11
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double - bullpen 6
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C-1B Desk Chairs Herman Miller - Aeron 123 140 196 183
------------------------------------------------------------------------------------------------------------------------------------
C-9 Side Chairs Keilhauer - Also 143 160 222 209
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
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Med. Conference Rooms
------------------------------------------------------------------------------------------------------------------------------------
CT-2B Table Reform 3 2 2 2
------------------------------------------------------------------------------------------------------------------------------------
Small/Medium Conference Rooms
------------------------------------------------------------------------------------------------------------------------------------
CT-14 Table Reform 4 5 4
------------------------------------------------------------------------------------------------------------------------------------
Small Conference Rooms
------------------------------------------------------------------------------------------------------------------------------------
CT-17 Table Reform 3 2 4 4
---------------------------------------------------------------------------------------------------------------------------------
CT-19A Teaming Table Reform 0 16 16
---------------------------------------------------------------------------------------------------------------------------------
CT-19B Teaming Table Reform 8 0 6 6
------------------------------------------------------------------------------------------------------------------------------------
CR-1 Credenzas large Westcoast 3 6 7 6
----------------------------------------------------------------------------------------------------------------------------------
CR-2 Credenzas small Westcoast 3 4 4 4
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Conference Chairs
------------------------------------------------------------------------------------------------------------------------------------
C2D/F Keilhauer 36 75 122 116
------------------------------------------------------------------------------------------------------------------------------------
C2E Keilhauer 0 0 0
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------------------------------------------------------------------------------------------------------------------------------------
Telephone Rooms Hoteling
------------------------------------------------------------------------------------------------------------------------------------
C-5A Chairs Keilhauer - Also 4 7 11 11
------------------------------------------------------------------------------------------------------------------------------------
Pedestals AO-2 4 7 11 11
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------------------------------------------------------------------------------------------------------------------------------------
Kitchens
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T-1A Tables West Coast - Metal Top 4 8 7 7
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C-8 Chairs Altek - Baba / wood 14 32 28 28
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S-1 Stools Altek - Baba / wood 5 10 6 6
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------------------------------------------------------------------------------------------------------------------------------------
Lounge/Conference (2 rooms)
------------------------------------------------------------------------------------------------------------------------------------
T15 Tables ICF Twofold 1 2 2 2
------------------------------------------------------------------------------------------------------------------------------------
L12A Chairs ICF Multiplicity 6 6 6 6
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L12B Chairs ICF Multiplicity 6 6 6
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Lounges (2 rooms)
------------------------------------------------------------------------------------------------------------------------------------
L-14A Sofa ICF Cinema 0 2 0
------------------------------------------------------------------------------------------------------------------------------------
L-14B Sofa ICF Cinema 1 0 2
------------------------------------------------------------------------------------------------------------------------------------
L-13A Lounge Chairs ICF Cinema 8 0 12 0
------------------------------------------------------------------------------------------------------------------------------------
L-13B Lounge Chairs ICF Cinema 16 0 12
------------------------------------------------------------------------------------------------------------------------------------
L-15 Ottomans ICF Cinema 3 6 3 3
------------------------------------------------------------------------------------------------------------------------------------
T-16 Occasional Tables ICF 2 0 4 4
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T-17 Occasional Tables ICF 1 0 3 3
------------------------------------------------------------------------------------------------------------------------------------
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Executive Lounge Area
------------------------------------------------------------------------------------------------------------------------------------
L-7 Lounge Chairs 0 4 4
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Open Areas/Files + Storage
------------------------------------------------------------------------------------------------------------------------------------
F-2 File Cabinet Meridian - 2600 Series 5 12 14 13
------------------------------------------------------------------------------------------------------------------------------------
SC-1 Storage Cabinet 5 4 6 5
------------------------------------------------------------------------------------------------------------------------------------
F-7 Mobile Pedestal Herman Miller 7 11 11
------------------------------------------------------------------------------------------------------------------------------------
M-1 Markerboard Greensteel 25 32 32
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------------------------------------------------------------------------------------------------------------------------------------
Training Area
------------------------------------------------------------------------------------------------------------------------------------
T-19 Training Table Howe 27 0 0
------------------------------------------------------------------------------------------------------------------------------------
T-20 Training Instructor Table Howe 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Main Reception/Lobby
------------------------------------------------------------------------------------------------------------------------------------
C-18 Desk Chair Herman Miller - Aeron 1 0
------------------------------------------------------------------------------------------------------------------------------------
F-4 Pedestal File Meridian - 1600 Series 1 0
------------------------------------------------------------------------------------------------------------------------------------
Lounge Seating 8 0
------------------------------------------------------------------------------------------------------------------------------------
Occasional Tables 2 0
------------------------------------------------------------------------------------------------------------------------------------
Area Rug (1 per bldg) 1 0
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
EXHIBIT D
<PAGE>
EXHIBIT E
CAFETERIA PROVISIONS
The following Cafeteria Provisions ("Cafeteria Provisions") are made a part
of the Sublease dated October 18, 2002, (the "Sublease") between Ariba, Inc.
("Sublandlord") and NetScreen Technologies, Inc. ("Subtenant") for premises at
805 and 809 Eleventh Avenue, Sunnyvale, California, to which these Cafeteria
Provisions are attached as Exhibit E. These Cafeteria Provisions contain certain
terms and conditions pertaining to the use and operation of the cafeteria
("Cafeteria") located on the first floor of Building Four of the Project. Any
conflict between these Cafeteria Provisions and the remainder of the Sublease
shall be controlled by these Cafeteria Provisions. Except as otherwise defined
herein, capitalized terms used in these Cafeteria Provisions have the same
meaning as in the Sublease.
1. LICENSE TO ACCESS. Sublandlord hereby grants to Subtenant a
non-exclusive license to allow its employees and invitees ("Users") to use the
Cafeteria during the Sublease Term, subject to and in accordance with the terms
and conditions of these Cafeteria Provisions.
2. CAFETERIA FEES. In consideration for the license granted hereunder,
beginning on the Rent Commencement Date and continuing throughout the Sublease
Term, Subtenant shall pay to Sublandlord, as additional rent under the Sublease,
the following fees (collectively, "Cafeteria Fees"):
(a) Cafeteria Base Fee. Subtenant shall pay monthly, in advance
together with Base Rent, an amount ("Cafeteria Base Fee") equal to Base
Rent multiplied by three point one seven percent (3.17%) ("Cafeteria Load
Factor"). The Cafeteria Load Factor represents the ratio of the square feet
of the Cafeteria over the total rentable square feet of the Project (not
including the Fitness Center and the Cafeteria) (21,510/(715,998-37,170));
and
(b) Cafeteria Expense Fee. In addition to the Cafeteria Base Fee,
Subtenant shall pay to Sublandlord, together with each Sublease Expense
payment, an amount equal to the Sublease Expense payment multiplied by the
Cafeteria Load Factor ("Cafeteria Expense Fee"). Sublandlord will include a
separate line item for this amount on each Sublease Expense invoice given
pursuant to Paragraph 3.2(f) of the Sublease. In calculating the Cafeteria
Expense Fee, Sublandlord reserves the right to proportionally increase
Subtenant's Project Share with respect to Sublease Expenses relating to the
Cafeteria if, in Sublandlord's reasonable determination, the number of
Subtenant's Users, and/or the intensity of use by Subtenant's Users, is
substantially greater in proportion to other users of the Cafeteria than
reflected in the unadjusted Subtenant's Project Share figure.
3. USERS. All Users shall use the Cafeteria subject to the rules and
regulations attached hereto as Attachment A and incorporated herein by this
reference, and any other rules and regulations promulgated by Sublandlord or the
Cafeteria Operator (defined below). Ariba shall have the right, in its sole
discretion, to determine who will be entitled to use the Cafeteria in addition
to the Users and to determine what access and use fees, if any, will be paid by
such additional users. Ariba may limit the total number of users to reflect an
appropriate use occupancy of the Cafeteria.
4. CAFETERIA OPERATION.
(A) Sublandlord agrees to operate the Cafeteria throughout
the Sublease Term in substantially the same manner as the Cafeteria is currently
being operated. However, in addition to the rights stated in subparagraphs (B)
and (C) below, Sublandlord reserves the right to change or adjust
EXHIBIT E
<PAGE>
operational matters regarding the Cafeteria, including without limitation the
hours of operation (provided, however, that the Cafeteria shall be open at least
during the hours of 11:30 a.m. through 1:30 p.m. on business days unless
otherwise approved by Subtenant, in Subtenant's sole discretion) and meal
service, the identity and duties of the operator of the Cafeteria, menu
selection, and prices.
(B) Sublandlord shall have the sole right to select, hire
and terminate third party operators to run the Cafeteria ("Cafeteria Operator").
The current Cafeteria Operator is ARAMARK Services, Inc. Sublandlord and the
Cafeteria Operator shall have the exclusive control and management of the
Cafeteria and shall have the right, from time to time, to establish, amend and
enforce reasonable rules and regulations for the management, safety, care, and
cleanliness of the Cafeteria and the preservation of good order in the
Cafeteria, as well as for the convenience of users of the Cafeteria, including
but not limited to requiring the following of all Users: (i) reading, completing
and/or signing standard documents presented by Sublandlord and/or Cafeteria
Operator to the User, such as an information sheet; (ii) payment of fees that
are in addition to the Cafeteria Fees for special services or events; and (iii)
cooperating with Cafeteria Operator in its completion of tasks delegated to the
Cafeteria Operator by Sublandlord, such as obtaining a waiver/release from Users
and management of the card-key/badge access control system for the Cafeteria.
Compliance with such rules and regulations shall be, where so decided by
Sublandlord or the Cafeteria Operator, a condition precedent to gaining access
to the Cafeteria. Subtenant agrees to abide by and conform to all such rules and
regulations, and to cause Registered Users to so abide and conform. Sublandlord
shall not be responsible to Subtenant for the non-compliance with any of the
rules and regulations by any other users of the Cafeteria or any other parties,
except employees of Sublandlord and their guests. Signing of a standard form,
provided by Sublandlord, for the benefit of Sublandlord and Master Landlord and
the officers, directors, shareholders, employees, agents, representatives,
attorneys, lenders, predecessors, successors or assigns of each, releasing
Sublandlord, Master Landlord, the Cafeteria Operator and the officers,
directors, shareholders, employees, agents, representatives, attorneys, lenders,
predecessors, successors or assigns of each, from any and all liability in
connection with the use of the Cafeteria (except, as to each of said persons to
the extent of damage resulting from the gross negligence or willful misconduct
of such person or any of its officers, director, shareholders, employees,
agents, representatives, attorneys, predecessors, successors or assigns) shall
be a condition precedent to the use of the Cafeteria for each of the Users.
(C) Sublandlord shall have the right, in Sublandlord's
sole discretion, from time to time, without abatement, offset or deduction of
the Cafeteria Fees, to: (i) make changes to the Cafeteria, including, without
limitation, changes in services and products sold, design and layout and in
number and type of equipment, and the making of additions and alterations; (ii)
close temporarily any or all of the Cafeteria or close permanently a
non-material portion of the Cafeteria for maintenance purposes or for purposes
of making the changes described in clause (C)(i) above; (iii) replace the
Cafeteria Operator with another company or perform such services itself; and
(iv) do and perform such other acts and make such other changes in, to, or with
respect to the Cafeteria as Sublandlord may, in the exercise of reasonable
business judgment, deem to be appropriate; provided, however, that if
Sublandlord temporarily or permanently closes any or all of the Cafeteria (due
to a cause other than the act or omission of Subtenant, its officers, directors,
shareholders, employees, agents, representatives, attorneys, lenders,
predecessors, successors or assigns, or any Users) so that Users may not use the
Cafeteria for a period of more than fourteen (14) consecutive calendar days,
Subtenant will not be obligated to pay the Cafeteria Fees for the period of such
closure. No interference with or interruption of Subtenant's use of the
Cafeteria shall affect Subtenant's obligations under the Sublease or these
Cafeteria Provisions, including without limitation the obligation to pay the
Cafeteria Fees hereunder, except as expressly provided to the contrary. The
foregoing notwithstanding, if Sublandlord permanently closes a non-material
portion of the Cafeteria as provided above, the Cafeteria Load Factor shall be
reduced to reflect the total rentable square feet contained in the Cafeteria
after such closure.
EXHIBIT E
<PAGE>
5. CATERING. NetScreen agrees to use commercially reasonable efforts
to use the Cafeteria Operator as the provider for catering events to NetScreen
which are conducted in or about the Premises or Project unless otherwise
consented to by Ariba, which consent shall not to be unreasonably withheld or
delayed; provided, however, that such consent shall not be required for any
catering event that is beyond the capability of the Cafeteria Operator.
6. RELEASE. Except to the extent of damage resulting from the active
negligence or willful misconduct of Sublandlord, or any of its officers,
directors, shareholders, employees, agents, representatives, attorneys,
predecessors, successors or assigns, Subtenant hereby acknowledges and agrees
that the use of the Cafeteria by its Users shall be at the sole risk of
Subtenant and such Users. Subtenant, for itself and its successors and assigns,
hereby irrevocably and unconditionally releases and discharges Sublandlord,
Master Landlord and the officers, directors, shareholders, employees, agents,
representatives, attorneys, lenders, predecessors, successors and assigns of
each from any and all claims, damages, demands, liabilities, costs, expenses,
liens, judgments, actions and causes of action of every kind and nature
whatsoever, whether known or unknown, which Subtenant may at anytime hereafter
have, own or hold arising out of, based upon or in any way relating to the
Cafeteria, except, as to each of said persons, to the extent caused by the
active negligence or willful misconduct of such person or any of its officers,
directors, shareholders, employees, agents, representatives, attorneys,
predecessors, successors or assigns.
Except to the extent caused by the active negligence or willful misconduct of
Sublandlord, Subtenant shall and hereby agrees to fully indemnify and hold
harmless Sublandlord, Master Landlord, Cafeteria Operator and the officers,
directors, shareholders, employees, agents, representatives, attorneys, lenders,
predecessors, successors and assigns of each from and against any and all
losses, liabilities, damages, judgments, causes of action, awards, costs and/or
expenses (including attorney's fees) arising out of or in any way relating to
the use of the Cafeteria by Subtenant, Subtenant's Users, and/or any other
persons obtaining access to the Cafeteria through the Subtenant (except, as to
each of said persons to the extent of damage resulting from the active
negligence or willful misconduct of such person or any of its officers,
directors, shareholders, employees, agents, representatives, attorneys,
predecessors, successors or assigns).
7. INSURANCE. As a condition to the granting of the license herein and
prior to Subtenant's use of the Cafeteria, Subtenant shall deliver to
Sublandlord a certificate or endorsement from Subtenant's insurance carrier
indicating that the insurance required to be carried by Subtenant under the
Sublease is in effect and that it covers Subtenant and its Users in connection
with the use of the Cafeteria.
8. TERMINATION. Upon the expiration or earlier termination of the
Sublease, all rights to access and use the Cafeteria granted to Subtenant
hereunder shall immediately cease and be terminated.
9. TRANSFERABILITY. The license granted under these Cafeteria
Provisions may not be assigned or otherwise transferred separately from
Subtenant's interest under the Sublease. The license granted under these
Cafeteria Provisions may be assigned to any assignee of this Sublease that holds
all of the rights and obligations of the subtenant hereunder, and Subtenant may
permit its subtenants to use the Cafeteria in accordance with the terms of these
Cafeteria Provisions.
EXHIBIT E
<PAGE>
ATTACHMENT A
CAFETERIA RULES AND REGULATIONS
1. The Cafeteria is for the exclusive use of tenants and subtenants of the
Project and their respective employees only.
2. There will be a maximum of number persons (to be determined) allowed in the
Cafeteria at any one time.
3. Everyone is to wear appropriate clothing. This will include shoes and shirt
at all times.
4. There is to be no smoking at any time in the Cafeteria.
5. These Rules and Regulations are subject to change at any time by Ariba upon
written notice to NetScreen or upon posting of such revised Rules and
Regulations in a conspicuous area in the Cafeteria. Revised Rules and
Regulations will be posted in the Cafeteria.
6. These Rules and Regulations incorporate by reference the Rules and
Regulations referenced in the Sublease to the extent such Rules and
Regulations pertain to the usage of the Cafeteria.
EXHIBIT E
<PAGE>
EXHIBIT F
FITNESS CENTER PROVISIONS
The following Fitness Center Provisions ("Fitness Center Provisions") are
made a part of the Sublease dated October 18, 2002, (the "Sublease") between
Ariba, Inc. ("Sublandlord") and NetScreen Technologies, Inc. ("Subtenant") for
premises at 805 and 809 Eleventh Avenue, Sunnyvale, California, to which these
Fitness Center Provisions are attached as Exhibit F. These Fitness Center
Provisions contain certain terms and conditions pertaining to the use and
operation of the fitness center ("Fitness Center") located in the Amenity
Building of the Project. Any conflict between these Fitness Center Provisions
and the remainder of the Sublease shall be controlled by these Fitness Center
Provisions. Except as otherwise defined herein, capitalized terms used in these
Fitness Center Provisions have the same meaning as in the Sublease.
1. LICENSE TO ACCESS. Sublandlord hereby grants to Subtenant a
non-exclusive license to designate up to the "Permitted Maximum" of "Registered
Users" to have access to and to use the Fitness Center during the Sublease Term,
subject to and in accordance with the terms and conditions of these Fitness
Center Provisions. For purposes of these Fitness Center Provisions, at any
particular time the term "Permitted Maximum" shall be equal to five and one-half
(5.5) for every one thousand (1,000) total rentable square feet of the Premises,
and the term "Registered Users" shall mean current employees of Subtenant that
are registered in accordance with the provisions of Paragraph 3 below.
2. FITNESS CENTER FEES. In consideration for the license granted
hereunder, beginning on the Rent Commencement Date and continuing throughout the
Sublease Term, Subtenant shall pay to Sublandlord, as additional rent under the
Sublease, the following fees (collectively, "Fitness Center Fees"):
(a) Fitness Center Base Fee. Subtenant shall pay monthly, in
advance together with Base Rent, an amount ("Fitness Center Base Fee")
equal to Base Rent multiplied by two point three one percent (2.31%)
("Fitness Center Load Factor"). The Fitness Center Load Factor represents
the ratio of the square feet of in the Fitness Center over the total
rentable square feet of the Project (not including the Fitness Center or
the Cafeteria) (15,660/(715,998-37,170)); and
(b) Fitness Center Expense Fee. In addition to the Fitness Center
Base Fee, Subtenant shall pay to Sublandlord, together with each Sublease
Expense payment, an amount equal to the Sublease Expense payment multiplied
by the Fitness Center Load Factor ("Fitness Center Expense Fee").
Sublandlord will include a separate line item for this amount on each
Sublease Expense invoice given pursuant to Paragraph 3.2(f) of the
Sublease. In calculating the Fitness Center Expense Fee, Sublandlord
reserves the right to proportionally increase Subtenant's Project Share
with respect to Sublease Expenses relating to the Fitness Center if, in
Sublandlord's reasonable determination, the number of Subtenant's
Registered Users, and/or the intensity of use by Subtenant's Registered
Users, is substantially greater in proportion to other users of the Fitness
Center than reflected in the unadjusted Subtenant's Project Share figure.
3. REGISTERED USERS. Use of the Fitness Center under this Sublease
shall be limited to those employees of Subtenant who have been registered in
accordance with the rules and procedures stated in Attachment A attached hereto
and incorporated herein by this reference. Prior to accessing or using the
Fitness Center, Subtenant shall comply with the rules and procedures for
registering all Registered Users. Subtenant may remove any User from Subtenant's
list of Registered Users by written notice to Sublandlord. All Registered Users
shall use the Fitness Center subject to the rules and regulations
EXHIBIT F
<PAGE>
attached hereto as Attachment B and incorporated herein by this reference, and
any other rules and regulations promulgated by Sublandlord or the Fitness Center
Operator (defined below). Sublandlord shall have the right, in its sole
discretion, to determine who will be entitled to use the Fitness Center in
addition to Subtenant's Registered Users and to determine what access and use
fees, if any, will be paid by such additional users. Sublandlord may limit the
number of total users to reflect an appropriate use occupancy of the Fitness
Center.
4. FITNESS CENTER OPERATION.
(A) Sublandlord agrees to operate the Fitness Center throughout
the Sublease Term in substantially the same manner as the Fitness Center is
currently being operated. However, in addition to the rights stated in
subparagraphs (B) and (C) below, Sublandlord reserves the right to change or
adjust operational matters regarding the Fitness Center, including without
limitation the hours of operation (provided, however, that the Fitness Center
shall be open at least during the hours of 6:00 a.m. through 8:00 p.m., Monday
through Friday unless otherwise approved by Subtenant, in Subtenant's sole
discretion), the identity and duties of the operator of the Fitness Center, the
layout and equipment brands and selection, and the occurrence, duration and
frequency of classes.
(B) Sublandlord shall have the sole right to select, hire and
terminate third party operators to run the Fitness Center ("Fitness Center
Operator"). The current Fitness Center Operator is Club One, Inc. Sublandlord
and the Fitness Center Operator shall have the exclusive control and management
of the Fitness Center and shall have the right, from time to time, to establish,
amend and enforce reasonable rules and regulations for the management, safety,
care, and cleanliness of the Fitness Center and the preservation of good order
in the Fitness Center, as well as for the convenience of users of the Fitness
Center, including but not limited to requiring the following of all Registered
Users: (i) reading, completing and/or signing standard documents presented by
Sublandlord and/or Fitness Center Operator to the User, such as an information
sheet; (ii) payment of fees that are in addition to the Fitness Center Fees,
such as fees for exercise classes, massage and other instructional activity; and
(iii) cooperating with Fitness Center Operator in its completion of tasks
delegated to the Fitness Center Operator by Sublandlord, such as obtaining a
waiver/release from Registered Users and management of the card-key/badge access
control system for the Fitness Center. Compliance with such rules and
regulations shall be, where so decided by Sublandlord or the Fitness Center
Operator, a condition precedent to gaining access to the Fitness Center.
Subtenant agrees to abide by and conform to all such rules and regulations, and
to cause Registered Users to so abide and conform. Sublandlord shall not be
responsible to Subtenant for the non-compliance with any of the rules and
regulations by any other users of the Fitness Center or any other parties,
except employees of Sublandlord and their guests. Signing of a standard form,
provided by Sublandlord, for the benefit of Sublandlord and Master Landlord and
the officers, directors, shareholders, employees, agents, representatives,
attorneys, lenders, predecessors, successors or assigns of each, releasing
Sublandlord, Master Landlord, the Fitness Center Operator and the officers,
directors, shareholders, employees, agents, representatives, attorneys, lenders,
predecessors, successors or assigns of each, from any and all liability in
connection with the use of the Fitness Center (except, as to each of said
persons to the extent of damage resulting from the gross negligence or willful
misconduct of such person or any of its officers, director, shareholders,
employees, agents, representatives, attorneys, predecessors, successors or
assigns) shall be a condition precedent to the use of the Fitness Center for
each of the Registered Users.
(C) Sublandlord shall have the right, in Sublandlord's sole
discretion, from time to time, without abatement, offset or deduction of the
Fitness Center Fees, to: (i) make changes to the Fitness Center, including,
without limitation, changes in services, design and layout and in number and
type of equipment, and the making of additions and alterations; (ii) close
temporarily any or all of the Fitness Center or close permanently a non-material
portion of the Fitness Center for maintenance
EXHIBIT F
<PAGE>
purposes or for purposes of making the changes described in clause (C)(i),
above; (iii) replace the Fitness Center Operator with another company or perform
such services itself; and (iv) do and perform such other acts and make such
other changes in, to, or with respect to the Fitness Center as Sublandlord may,
in the exercise of reasonable business judgment, deem to be appropriate;
provided, however, that if Sublandlord temporarily or permanently closes any or
all of the Fitness Center (due to a cause other than the act or omission of
Subtenant, its officers, directors, shareholders, employees, agents,
representatives, attorneys, lenders, predecessors, successors or assigns, or any
Registered Users) so that Registered Users may not use the Fitness Center for a
period of more than fourteen (14) consecutive calendar days, Subtenant will not
be obligated to pay the Fitness Center Fees for the period of such closure. No
interference with or interruption of Subtenant's use of the Fitness Center shall
affect Subtenant's obligations under the Sublease or these Fitness Center
Provisions, including without limitation the obligation to pay the Fitness
Center Fees hereunder, except as expressly provided to the contrary. The
foregoing notwithstanding, if Sublandlord permanently closes a non-material
portion of the Fitness Center as provided above, the Fitness Center Load Factor
shall be reduced to reflect the total rentable square feet contained in the
Amenity Building after such closure.
5. RELEASE. Except to the extent of damage resulting from the active
negligence or willful misconduct of Sublandlord, or any of their officers,
directors, shareholders, employees, agents, representatives, attorneys,
predecessors, successors or assigns, Subtenant hereby acknowledges and agrees
that the use of the Fitness Center by its Registered Users shall be at the sole
risk of Subtenant and such Registered Users. Subtenant, for itself and its
successors and assigns, hereby irrevocably and unconditionally releases and
discharges Sublandlord, Master Landlord and the officers, directors,
shareholders, employees, agents, representatives, attorneys, lenders,
predecessors, successors and assigns of each from any and all claims, damages,
demands, liabilities, costs, expenses, liens, judgments, actions and causes of
action of every kind and nature whatsoever, whether known or unknown, which
Subtenant may at anytime hereafter have, own or hold arising out of, based upon
or in any way relating to the Fitness Center, except, as to each of said
persons, to the extent caused by the active negligence or willful misconduct of
such person or any of its officers, directors, shareholders, employees, agents,
representatives, attorneys, predecessors, successors or assigns.
Except to the extent caused by the active negligence or willful misconduct of
Sublandlord, Subtenant shall and hereby agrees to fully indemnify and hold
harmless Sublandlord, Master Landlord, Fitness Center Operator and the officers,
directors, shareholders, employees, agents, representatives, attorneys, lenders,
predecessors, successors and assigns of each from and against any and all
losses, liabilities, damages, judgments, causes of action, awards, costs and/or
expenses (including attorney's fees) arising out of or in any way relating to
the use of the Fitness Center by Subtenant, Subtenant's Registered Users, and/or
any other persons obtaining access to the Fitness Center through the Subtenant
(except, as to each of said persons to the extent of damage resulting from the
active negligence or willful misconduct of such person or any of its officers,
directors, shareholders, employees, agents, representatives, attorneys,
predecessors, successors or assigns).
6. INSURANCE. As a condition to the granting of the license herein and
prior to Subtenant's use of the Fitness Center, Subtenant shall deliver to
Sublandlord a certificate or endorsement from Subtenant's insurance carrier
indicating that the insurance required to be carried by Subtenant under the
Sublease is in effect and that it covers Subtenant and its Registered Users in
connection with the use of the Fitness Center.
7. TERMINATION. Upon the expiration or earlier termination of the
Sublease, all rights to access and use the Fitness Center granted to Subtenant
hereunder shall immediately cease and be terminated.
EXHIBIT F
<PAGE>
8. TRANSFERABILITY. The license granted under these Fitness Center
Provisions may not be assigned or otherwise transferred separately from
Subtenant's interest under the Sublease. The license granted under these Fitness
Center Provisions may be assigned to any assignee of this Sublease that holds
all of the rights and obligations of the subtenant hereunder, and Subtenant may
permit its subtenants to use the Fitness Center in accordance with the terms of
these Fitness Center Provisions.
EXHIBIT F
<PAGE>
ATTACHMENT A
REGISTRATION PROCESS
In order to become a Registered User, each employee of Subtenant must complete
and sign the following paperwork ("Registration Materials"), which may be
obtained from the Fitness Center Operator during the hours in which the Fitness
Center Operator staffs the Fitness Center:
1. Assumption of Risk and Release of Liability Agreement;
2. Information sheet; and
3. Any other required paperwork.
Upon receipt of an employee's signed and completed Registration Materials,
Ariba will use reasonable efforts to activate such employee's badge within three
(3) business days such that the badge will enable such employee to gain access
to the Fitness Center.
EXHIBIT F
<PAGE>
ATTACHMENT B
FITNESS CENTER RULES AND REGULATIONS
1. The Fitness Center is for the exclusive use of tenants and subtenants of
the Project and their respective employees or authorized guests only.
2. There will be a maximum of number persons (to be determined) allowed in the
Fitness Center at any one time.
3. Use of lockers are on a first come first use basis, and lockers shall only
be used for the duration of the Registered Users workout. Any locker keys
must be returned to front desk or removed from the appropriate locker and
the contents of such locker removed immediately after your workout. Failure
to do so could cause a loss of Fitness Center privileges. Loss of a key
will result in an additional fee.
4. Everyone is to wear appropriate clothing. This will include shoes and shirt
at all times.
5. Everyone using the Fitness Center must first read and sign an Assumption of
Risk and Release of Liability Agreement.
6. Please be sure to wipe off all equipment after use.
7. There is to be no smoking, eating, or drinking at any time while using the
Fitness Center.
8. These Rules and Regulations are subject to change at any time by
Sublandlord upon written notice to Subtenant or upon posting of such
revised Rules and Regulations in a conspicuous area in the Fitness Center.
Revised Rules and Regulations will be posted in the Fitness Center.
9. These Rules and Regulations incorporate by reference the Rules and
Regulations referenced in the Sublease to the extent such Rules and
Regulations pertain to the usage of the Fitness Center.
EXHIBIT F
<PAGE>
EXHIBIT G
COMMENCEMENT DATE MEMORANDUM
807 Eleventh Avenue
Sunnyvale, California 94089
Attn: General Counsel
Dear Sir or Madam,
With reference to that certain Sublease ("Sublease") dated October __,
2002, by and between Ariba, Inc., a Delaware corporation ("Sublandlord"), and
NetScreen Technologies, Inc., a Delaware corporation ("Subtenant"), for certain
premises located at 805 Eleventh Avenue and 809 Eleventh Avenue, Sunnyvale,
California (the "Premises"), in accordance with Paragraph 2.1 of the Sublease,
Subenant acknowledges and certifies to Sublandlord as follows:
1. The "Sublease Commencement Date" occurred on ______________, 2002;
2. Subtenant has accepted and is currently in possession of the Premises
(excluding the Fourth Floor Expansion Space and Subtenant's
Server Room);
3. The "Rent Commencement Date" is ______________, 2003; and
4. The "Expiration Date" of the Sublease is ______________, 2008.
Each person executing this Memorandum certifies that he or she is
authorized to do so on behalf of and as the act of Subtenant.
SUBTENANT
NetScreen Technologies, Inc.,
a Delaware corporation
By:
---------------------------
Print Name:
---------------------------
Title:
---------------------------
By:
---------------------------
Print Name:
---------------------------
Title:
---------------------------
EXHIBIT G
<PAGE>
EXHIBIT H
LETTER OF CREDIT FORM
ANNEX "A" TO APPLICATION AND
AGREEMENT FOR STANDBY LETTER OF
CREDIT DATED OCTOBER __, 2002
WELLS FARGO BANK, N.A.
TRADE SERVICES DIVISION, NORTHERN CALIFORNIA
525 MARKET STREET, 25TH FLOOR
SAN FRANCISCO, CALIFORNIA 94105
CONTACT PHONE: 1-800-798-2815 (OPTION NO. 1)
IRREVOCABLE LETTER OF CREDIT
Ariba, Inc. Letter of Credit No. _________
807 Eleventh Avenue Date: October __, 2002
Sunnyvale, CA 94089
Attention: Real Estate Manager
Ladies and Gentlemen:
At the request and for the account of NetScreen Technologies, Inc. whose
address is 350 Oakmead Parkway, Sunnyvale, CA 94085, we hereby establish our
Irrevocable Letter of Credit in favor of Ariba, Inc., as Beneficiary, in the
amount of Six Hundred Ninety One Thousand Five Hundred Ninety Three and NO/100
United States Dollars (US$691,593.00), available with us at our above-specified
office by payment of Beneficiary's draft(s) drawn on us at sight, in the form of
Exhibit A (which forms an integral part of this Irrevocable Letter of Credit)
attached hereto, with the instructions in brackets therein complied with.
"Beneficiary" as used in this Irrevocable Letter of Credit shall mean Ariba,
Inc., or any person who becomes a beneficiary hereof pursuant to a transfer
accomplished under the provisions of this Irrevocable Letter of Credit.
Each draft must be accompanied by (1) the original of this Letter of Credit
for our endorsement on this Letter of Credit of our payment of such draft, and
(2) a signed and dated statement worded in either of the formats I or II below:
I.
"I am an authorized officer or authorized representative of the Beneficiary
of Wells Fargo Bank, N.A. Letter of Credit number NZS________
.("Beneficiary"). I hereby certify that NetScreen Technologies, Inc., has
(i) failed to timely perform or observe an obligation under the Sublease by
and between NetScreen Technologies, Inc., as the Subtenant and Ariba, Inc.
as the Sublessor, dated October ___, 2002, with respect to those certain
EXHIBIT H
<PAGE>
Premises located at 805 Eleventh Avenue and 809 Eleventh Avenue in the City
of Sunnyvale, California, as more particularly described in the Sublease,
as such Sublease may have been amended, restated or replaced from time to
time, and (ii) Beneficiary is now entitled to draw on Wells Fargo Bank,
N.A. Letter of Credit No. _________."
or
II. :
"I am an authorized officer or authorized representative of the Beneficiary
of Wells Fargo Bank, N.A. Letter of Credit number NZS________
("Beneficiary"). I hereby certify that less than thirty (30) days remains
prior to the expiration of Wells Fargo Bank, N.A. Letter of Credit No.
_____ (the "Letter of Credit"), and (i) Beneficiary has received a
non-renewal notice under the Letter of Credit and (ii) NetScreen
Technologies, Inc. has not provided Beneficiary with a substitute letter of
credit or cash as permitted for a replacement of the Letter of Credit as
provided for in the Sublease by and between NetScreen Technologies, Inc.,
as the Subtenant and Ariba, Inc. as the Sublessor, dated October __, 2002,
with respect to those certain Premises located at 805 Eleventh Avenue and
809 Eleventh Avenue in the City of Sunnyvale, California that are more
particularly described in the Sublease, as such Sublease may have been
amended, restated or replaced from time to time."
We agree that we will not inquire as to the accuracy of any statement
worded as quoted in I or II above presented to us under this Letter of Credit.
We also agree that, with respect to our obligation to pay a drawing which
conforms to the requirements of this Letter of Credit, such obligation will not,
except that any such obligation may be altered by any law or regulation or court
order, be affected by any dispute between the Applicant and the Beneficiary
regarding the content or accuracy of any statement presented with such drawing.
Partial and multiple drawings are permitted under this Letter of Credit.
Each draft must be marked "Drawn under Wells Fargo Bank, N.A. Letter of
Credit No. ______."
Except as stated in this Letter of Credit, our undertaking in this Letter
of Credit is not subject to any condition or qualification. Our obligation under
this Letter of Credit will be our individual obligation in no way contingent
upon reimbursement with respect thereto.
If any instructions accompanying a drawing under this Letter of Credit
request that payment is to be made by transfer to an account with us or at
another bank, we and/or such other bank may rely on an account number specified
in such instructions even if the number identifies a person or entity different
from the intended payee.
This Letter of Credit is transferable one or more times, but in each
instance to a single transferee and only in the full amount available to be
drawn under the Letter of Credit at the time of such transfer. Any such transfer
may be effected only through ourselves and only upon presentation to us at our
above-specified office of a duly executed instrument of transfer in the
EXHIBIT H
<PAGE>
format attached hereto as Exhibit B (which forms an integral part of this
Irrevocable Letter of Credit), together with the original of this Letter of
Credit Any transfer of this Letter of Credit may not change the place of
expiration of this Letter of Credit from our above-specified office. Each
transfer shall be evidenced by our endorsement on the reverse of the original of
this Letter of Credit, and we shall deliver the original of this Letter of
Credit so endorsed to the transferee. All charges in connection with any
transfer shall be for the account of NetScreen Technologies, Inc.
This Letter of Credit expires at our above office on February 28, 2003, but
shall be automatically extended, without written amendment, to February 28 in
each succeeding calendar year up to and including, but not beyond, February 28,
2008, unless we have sent written notice to Beneficiary at the address above (or
at such other address specified in a duly executed instrument of transfer) by
registered mail or express courier that we elect not to renew this Letter of
Credit beyond the date specified in such notice (the "Expiration Date") which
Expiration Date will be February 28, 2003, or any subsequent February 28
occurring before February 28, 2009 and be at least thirty (30) calendar days
after the date we send you such notice.
This Letter of Credit is subject to the Uniform Customs and Practice For
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and engages us in accordance therewith.
Very truly yours
WELLS FARGO BANK, N.A.
BY:
-----------------------------
(AUTHORIZED SIGNATURE)
EXHIBIT H
<PAGE>
Exhibit A
Wells Fargo Bank, N.A.
Letter of Credit No. _________
================================================================================
SAN FRANCISCO, CALIFORNIA [insert date]
AT SIGHT PAY TO THE ORDER OF [insert Beneficiary name] US$ [insert amount in
numbers]
[insert amount in words] U.S. DOLLARS
DRAWN UNDER WELLS FARGO BANK, N.A. LETTER OF CREDIT NO. _______________
THIS SIGHT DRAFT IS ACCOMPANIED BY THE ORIGINAL LETTER OF CREDIT AND WRITTEN
CERTIFICATION OF AN OFFICER OF BENEFICIARY AS REQUIRED BY THE LETTER OF CREDIT.
TO: WELLS FARGO BANK, N.A. [insert Beneficiary name]
ADDRESS: TRADE SERVICES DIVISION, N. CALIFORNIA
525 MARKET STREET, 25TH FLOOR
SAN FRANCISCO, CA 94105 [insert signature]
AUTHORIZED SIGNATURE
================================================================================
[insert Beneficiary name and insert signature on the back of the draft as an
endorsement]
EXHIBIT H
<PAGE>
Exhibit B
Wells Fargo Bank, N.A.
Letter of Credit No. _________
================================================================================
Date: _______________
Wells Fargo Bank, N.A.
Trade Services Division, Northern California
525 Market Street, 25th Floor
San Francisco, California 94105
Subject: Your Letter of Credit No. _________
Ladies and Gentlemen:
For value received, we hereby irrevocably assign and transfer all our
rights under the above-captioned Letter of Credit, as heretofore and hereafter
amended, extended or increased, to:
---------------------------
[insert name of transferee]
---------------------------
---------------------------
[insert address]
By this transfer, all of our rights in the Letter of Credit are transferred
to the transferee, and the transferee shall have sole rights as beneficiary
under the Letter of Credit, including sole rights relating to any amendments,
whether increases or extensions or other amendments, and whether now existing or
hereafter made. You are hereby irrevocably instructed to advise future
amendment(s) of the Letter of Credit to the transferee without our consent or
notice to us.
Enclosed are the original Letter of Credit and the original of all
amendments to this date. Please notify the transferee of this transfer and of
the terms and conditions of the Letter of Credit as transferred. this transfer
will not become effective until the transferee is so notified.
Very truly yours,
[insert name of transferor]
By:
------------------------------
Name:
--------------------------
Title:
--------------------------
Signature of Transferor Authenticated
[insert name of bank]
By:
------------------------------
Name:
---------------------------
Title:
--------------------------
================================================================================
EXHIBIT H
<PAGE>
================================================================================
end format
================================================================================
Agreed to and accepted by:
----------------------------
APPLICANT
----------------------------
AUTHORIZED SIGNATURE
EXHIBIT H
<PAGE>
EXHIBIT I
WORK LETTER
This Work Letter Agreement ("Agreement") is made a part of the Sublease
("Sublease") dated October 18, 2002, by and between Ariba, Inc., a Delaware
corporation ("Sublandlord") and NetScreen Technologies, Inc., a Delaware
corporation ("Subtenant") for premises at 805 and 809 Eleventh Avenue,
Sunnyvale, California, to which this Agreement is attached as Exhibit I.
A. Subtenant, at Subtenant's sole cost and expense, will be
constructing certain alterations, additions and improvements ("Subtenant's
Work") in Subtenant's Shipping Area and in the Building Three Premises. Attached
to this Agreement as Attachment 1 are conceptual plans showing Subtenant's Work
("Subtenant's Work Conceptual Plans").
B. Sublandlord, at Subtenant's sole cost and expense, will be
constructing certain alterations, additions and improvements ("Sublandlord's
Work") in the server area on the first floor of Building Three outlined on
Attachment 2 to this Agreement ("Server Area"), which attachment contains
conceptual plans showing Sublandlord's Work ("Sublandlord's Work Conceptual
Plans"). Some of the construction of Sublandlord's Work will take place after
the Sublease Commencement Date and Sublandlord shall retain possession of the
Server Area until completion of Sublandlord's Work, as further described below.
C. This Agreement describes the terms and conditions applicable to the
design and construction of Subtenant's Work and Sublandlord's Work. Capitalized
terms used herein without definition shall have the same meaning as in the
Sublease. The provisions of this Agreement shall supercede any conflicting
provisions of the Sublease.
In consideration of the mutual covenants contained in this Agreement and in
the Sublease, Sublandlord and Subtenant hereby agree as follows:
I. SUBTENANT'S WORK
1. Generally. At Subtenant's sole cost and expense, including payment
on demand of (i) all related out-of-pocket costs incurred by Sublandlord and
(ii) all related costs to which Master Landlord is entitled under the Master
Lease, Subtenant shall perform the design and construction of Subtenant's Work
in conformance with the Approved Plans described below. Sublandlord shall not
charge any oversight fees or supervisory fees for time spent by Ariba personnel
pertaining to Subtenant's Work. Subtenant's Work and the construction thereof
shall comply in all respects with the terms and conditions of the Master Lease
and the Sublease, provided that this Agreement shall control in the event of a
conflict between this Agreement and the Sublease. Nothing in this Agreement
shall be construed to in any way to limit the rights of Master Landlord under
the Master Lease and the requirement that Subtenant's Work and the construction
thereof shall comply in all respects with the terms and conditions of the Master
Lease. By way of example only, all approvals of Sublandlord described in or
pursuant to this Agreement are expressly conditioned on Master Landlord's
explicit, unconditional, written approval of the matter approved by Sublandlord.
Sublandlord shall have no responsibility with regard to Master Landlord's
approval except as expressly provided in this Agreement.
EXHIBIT I
<PAGE>
2. Preparation of Preliminary and Final Plans.
(a) Preliminary Plans. Sublandlord has approved the Subtenant's
Work Conceptual Plans. Based on the Subtenant's Work Conceptual Plans and in
conformance therewith, Subtenant shall prepare preliminary design drawings and
specifications for Subtenant's Work ("Preliminary Plans"), and shall deliver
such Preliminary Plans to Sublandlord for approval. Sublandlord acknowledges and
approves Subtenant's use of Reel Grobman to prepare the Preliminary Plans and
Final Plans (defined below). All specifications for Subtenant's Work shall be in
accordance with the Interior Specification Standards attached to the Work Letter
(Exhibit C to the Master Lease) as Schedule One, except as otherwise approved in
writing by Sublandlord and Master Landlord in their sole discretion upon written
request by Subtenant.
(b) Revision of Preliminary Plans. Within five (5) business days
after the actual receipt of the Preliminary Plans by Sublandlord, Sublandlord
shall either (i) approve, in writing, the Preliminary Plans or (ii) inform
Subtenant in writing of Sublandlord's specific objections to such Preliminary
Plans, which objections must be reasonable. If Sublandlord does not provide such
a writing within five (5) business days after actual receipt of Subtenant's
Preliminary Plans, then the Preliminary Plans shall be deemed to be approved by
Sublandlord. In the event that Sublandlord has specific objections, the parties
shall reach agreement as to what revisions should be made as soon as reasonably
practicable.
(c) Final Plans. Once an agreement has been reached regarding
revisions to the Preliminary Plans, Subtenant shall prepare final plans and
specifications and working drawings ("Final Plans") for Subtenant's Work. Within
five (5) business days after receipt of the Final Plans by Sublandlord,
Sublandlord shall either (i) approve, in writing, the Final Plans or (ii) inform
Subtenant in writing of Sublandlord's specific objections to such Final Plans,
which objections must be reasonable. If Sublandlord does not provide such a
writing within five (5) business days after actual receipt of Subtenant's Final
Plans, then the Final Plans shall be deemed to be approved by Sublandlord. In
the event that Sublandlord has specific objections, the parties shall reach
agreement regarding changes to the Final Plans as soon as is reasonably
practicable.
(d) Sublandlord and Master Landlord Approvals. Sublandlord's
approval of Subtenant's Work Conceptual Plans, Preliminary Plans and/or the
Final Plans shall in no way be deemed (i) a determination that Subtenant's Work
complies with applicable laws, regulations, ordinances or codes, or (ii) an
implied warranty of the adequacy or sufficiency of the design or quality of any
items shown therein. Sublandlord makes no representation or warranty whatsoever
with regard to the probability of approval of Subtenant's Work, the Subtenant's
Work Conceptual Plans, Preliminary Plans, or Final Plans by Master Landlord or
any governmental authority. Sublandlord shall reasonably cooperate with
Subtenant to obtain Master Landlord's approval and, when requested by Subtenant,
shall sign any documents required to enable Subtenant to obtain a building
permit and whatever authorizations are reasonably required to proceed with
Subtenant's Work. Sublandlord shall not be deemed to have waived its right to
approve or disapprove the Final Plans if Sublandlord has not approved the Final
Plans at the time it signs such documents.
(e) Governmental Approvals. Subtenant shall cause the Final Plans
to be submitted to the appropriate governmental authorities for approval. If the
governmental authorities require any changes, Sublandlord and Subtenant shall
reasonably cooperate to incorporate such changes into the Final Plans, and
neither party shall unreasonably withhold or delay its approval of such changes.
Once all required approvals of the Final Plans have been obtained from
Sublandlord, Master Landlord and all appropriate governmental authorities, the
Final Plans shall be deemed the "Approved Plans".
EXHIBIT I
<PAGE>
3. Construction.
(a) Generally. Sublandlord acknowledges and approves Subtenant's
use of SC Builders as the general contractor for construction of Subtenant's
Work. Subtenant shall cause SC Builders (or any replacement general contractor,
which shall be subject to Sublandlord's reasonable written approval)
("Subtenant's General Contractor") to construct Subtenant's Work using
well-trained, adequately supervised workers, in a good and workmanlike manner,
free from design, material, and workmanship defects in accordance with the
Approved Plans and all Applicable Requirements. Subtenant shall promptly remedy
all violations of this obligation at Subtenant's sole cost and expense.
Subtenant shall request and obtain from Subtenant's General Contractor a written
commitment for completing construction of Subtenant's Work in accordance with
the Approved Plans. Sublandlord's approval of Subtenant's General Contractor as
the general contractor for construction of Subtenant's Work is and shall be
conditioned on Subtenant's General Contractor status as a union contractor,
which Subtenant hereby represents is true and correct. All subcontractors,
laborers, materialmen, and suppliers shall conduct their activities in and
around the Premises, Buildings and Project in a harmonious relationship with all
other subcontractors, laborers, materialmen and suppliers at the Premises,
Buildings and Project, and, if necessary, union labor shall be employed to
achieve such harmonious relations. Subtenant shall obtain Sublandlord's prior
written consent to each such subcontractor. Sublandord will respond in writing
to Subtenant's request for consent within five (5) business days from
Sublandlord's receipt of Subtenant's written request. Subtenant shall not use
any area outside the Building Three Premises for construction staging or other
construction-related purposes other than the area depicted on Attachment 1 as
"staging area," the use of which shall be limited to construction staging
activities and subject to Sublandlord's reasonable restrictions and rules.
(b) Change Orders. No change or modification to the Approved
Plans or Subtenant's Work pursuant thereto ("Change Order") may be made by
Subtenant without the prior written consent of Sublandlord, which consent shall
not be unreasonably withheld or delayed. Sublandlord will respond in writing to
Subtenant's submission of all requests for Sublandlord approval of Change Orders
for Sublandlord approval within two (2) business days from Sublandlord's actual
receipt with respect to Change Orders having a cost of Two Thousand Dollars
($2,000) or less and within five (5) business days from Sublandlord's actual
receipt for all other Change Orders. All requests for Change Orders shall be
made in writing. Once approved in writing by Sublandlord and all required
approvals of Master Landlord and governmental authorities have been obtained,
such Change Orders shall become a part of the Approved Plans.
(c) Removal of Subtenant's Work. The rights and obligations of
the parties with respect to the removal of Subtenant's Work and restoration of
the Premises shall be governed by Paragraph 8 of the Sublease.
(d) Insurance.
i. General Coverages. Subtenant's General Contractor and
each subcontractor of Subtenant's General Contractor shall carry worker's
compensation insurance covering all of its respective employees, and shall also
carry commercial general liability insurance, including property damage, all
with limits, in form and with companies as are required to be carried by
Subtenant as set forth in Paragraph 9 of the Sublease.
ii. Special Coverages. Subtenant shall carry "Builder's
All Risk" insurance in an amount approved by Sublandlord covering the
construction of Subtenant's Work, and such other insurance as Sublandlord may
require, it being understood and agreed that Subtenant's Work shall be insured
by Subtenant pursuant to Paragraph 9 of the Sublease immediately upon completion
thereof. Such insurance shall be in amounts and shall include such extended
coverage endorsements as may be reasonably required by Sublandlord including,
but not limited to, the requirement that Subtenant's General Contractor and/or
any or all of its subcontractors shall carry excess liability and Products and
Completed Operation Coverage
EXHIBIT I
<PAGE>
insurance, each in amounts not less than $1,000,000 per incident, $2,000,000 in
aggregate, and in form and with companies as are required to be carried by
Subtenant as set forth in Paragraph 9 of the Sublease.
iii. General Terms. Certificates for all insurance carried
pursuant to this Section I.3(d) shall be delivered to Sublandlord before the
commencement of construction of Subtenant's Work and before any contractor's
equipment is moved onto the site. All such policies of insurance must contain a
provision that the company writing said policy will give Sublandlord thirty (30)
days' prior written notice of any cancellation or lapse of the effective date or
any reduction in the amounts of such insurance. In the event that Subtenant's
Work is damaged by any cause during the course of the construction thereof,
Subtenant shall immediately repair the same at Subtenant's sole cost and
expense. Subtenant's General Contractor and all of its subcontractors shall each
maintain all of the foregoing insurance coverage in force until Subtenant's Work
is fully completed and accepted by Sublandlord. All policies carried under this
Section I.3(d) shall insure Master Landlord, Sublandlord and Subtenant, as their
interests may appear, as well as Subtenant's General Contractor. All insurance,
except Workers' Compensation, maintained by Subtenant's General Contractor and
each of its subcontractors shall preclude subrogation claims by the insurer
against anyone insured thereunder. Such insurance shall provide that it is
primary insurance with respect to the Sublandlord and that any other insurance
maintained by Sublandlord is excess and noncontributing with the insurance
required hereunder. The requirements for the foregoing insurance shall not
derogate from the provisions for indemnification of Sublandlord by Subtenant
under the Sublease or Section I.3(e) of this Agreement.
(e) Indemnity. Subtenant's indemnity as set forth in Paragraph 10
of the Sublease (including any limitations or restrictions set forth therein)
shall apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to any act or omission of Subtenant or
Subtenant's contractors, subcontractors, laborers, materialmen, suppliers and
design professionals and other hirees, or anyone directly or indirectly employed
by any of them, or in connection with Subtenant's non-payment of any amount
arising out of Subtenant's Work and/or Subtenant's disapproval of all or any
portion of any request for payment. Such indemnity by Subtenant, as set forth in
Paragraph 10 of the Sublease, shall also apply with respect to any and all
costs, losses, damages, injuries and liabilities related in any way to
Sublandlord's and Master Landlord's performance of any ministerial acts
reasonably necessary (i) to permit Subtenant to complete Subtenant's Work, and
(ii) to enable Subtenant to obtain any building permit or certificate of
occupancy for the Premises.
(f) Requirements of Subtenant's General Contractor. Subtenant
shall cause Subtenant's General Contractor to provide an express written
warranty that Subtenant's Work shall be free from any defects in workmanship and
materials for a period of not less than one (1) year from the date of completion
thereof, such that Subtenant's General Contractor is responsible for the
replacement or repair, without additional charge, of all work done or furnished
in accordance with its contract that shall become defective within one (1) year
after completion of Subtenant's Work. Said warranty shall require Subtenant's
General Contractor to pay for all additional expenses and damages incurred in
connection with such replacement or repair, including without limitation any
damage or disturbance to the Premises, Buildings, or Common Areas caused
thereby. Subtenant covenants to enforce any contractor guarantees and warranties
for the benefit of Sublandlord where Sublandlord's interests may appear and, if
necessary to give Sublandlord the full benefit of such protection, shall give to
Sublandlord any assignment or other assurances which may be necessary to effect
a right of direct enforcement.
(g) Assumption of the Risk. Subtenant accepts, assumes and shall
be solely responsible for all risks for the construction and installation of
Subtenant's Work other than for risks resulting from the active negligence or
willful misconduct of Sublandlord or Sublandlord's employees, agents,
contractors or subcontractors.
EXHIBIT I
<PAGE>
(h) As Built Plans. Within sixty (60) days following the
substantial completion of Subtenant's Work, Subtenant shall provide Sublandlord
and Master Landlord with a set of "as built" plans, drawings and specifications
for Subtenant's Work.
II. SUBLANDLORD'S WORK.
1. Generally. Sublandlord shall perform the design and construction of
Sublandlord's Work in conformance with the Sublandlord's Work Conceptual Plans,
the cost and expense of which shall be Subtenant's responsibility in accordance
with Section II.3 below. Sublandlord's Work includes the creation of separate
server rooms for Sublandlord and Subtenant in the Server Area ("Sublandlord's
Server Room" and "Subtenant's Server Room", respectively). Sublandlord's Server
Room will contain 2,165 rentable square feet; Subtenant's Server Room shall
occupy the remainder of the Server Area. Sublandlord's Work includes
installation of a telephone rack for Sublandlord (in addition to the existing
telephone rack located in the Subtenant portion of the Server Area) and of a
separate meter to monitor power consumption from the existing UPS
(uninterruptible power supply) located in the Sublandlord portion of the Server
Area. Sublandlord's Work also includes installation of a new door to the Server
Area (or multiple doors to the extent required by law) and any fixturing and
other work deemed appropriate or necessary by Sublandlord, including any
requirements of Master Landlord or governmental authority, for conversion of the
Server Area into Sublandlord's Server Room and Subtenant's Server Room.
Notwithstanding anything in the Sublease to the contrary, Sublandlord will
retain possession of the entire Server Area, including the Subtenant's Server
Room portion, until Sublandlord's Work is Substantially Completed (defined
below).
2. Construction.
(a) General Contractor. Sublandlord and Subtenant have agreed on
the use of Teladata for design and project management services for Sublandlord's
Work, and SC Builders as Sublandlord's general contractor for construction of
Sublandlord's Work. Work by Subtenant in Subtenant's Server Room following
delivery of possession thereof to Subtenant shall be designed and managed by
Teladata and constructed by SC Builders, under Subtenant's own contracts
directly with Teladata and SC Builders.
(b) Substantial Completion. Sublandlord shall Substantially
Complete Sublandlord's Work and deliver possession of Subtenant's Server Room to
Subtenant by the sixtieth (60th) day following the Sublease Commencement Date
("Scheduled Completion Date"). "Substantial Completion" of Sublandlord's Work
shall occur upon the completion of construction of Sublandlord's Work in
substantial conformance with the Sublandlord's Work Conceptual Plans, with the
exception of any punch list items. If Substantial Completion is delayed as a
consequence of an Excusable Delay (defined below), then the Scheduled Completion
Date shall be advanced in time by the number of days that the Substantial
Completion is delayed as a consequence of the Excusable Delay. "Excusable Delay"
means any actual delay in the Substantial Completion of Sublandlord's Work
beyond the reasonable control of Sublandlord, including but not limited to the
following causes: (i) Subtenant's failure to fulfill any obligation under this
Agreement; (ii) changes requested by Subtenant that Sublandlord agrees to make;
(iii) unavailability or unusually long lead-time for delivery of materials,
components, or finishes; (iv) a willful or negligent act or omission of
Subtenant or a representative, agent, employee or contractor of Subtenant that
interferes with the progress of the work; or (v) delays in obtaining approvals
of Master Landlord and any governmental authority.
(c) Access; Staging Area. Sublandlord and Sublandlord's
representatives shall have all necessary access to the Server Area for purposes
of construction of Sublandlord's Work. Sublandlord shall also have the right to
share use of the "staging area" depicted on Attachment 1 with Subtenant, for
construction staging purposes. Subtenant shall not be allowed access to the
Server Area during the period of construction except with Sublandlord's express
permission, accompanied by a representative of Sublandlord.
EXHIBIT I
<PAGE>
(c) Changes. In the event Sublandlord desires a change to
Subtenant's Work that in Sublandlord's reasonable determination constitutes a
substantial modification to the Sublandlord's Work Conceptual Plans, Sublandlord
shall not make such change without Subtenant's consent, which consent shall not
be unreasonably withheld or delayed (with response time greater than three (3)
business days automatically deemed an unreasonable delay). Subtenant may not
withhold its approval of any change to Sublandlord's Work required to obtain any
required construction permit or otherwise required by any governmental authority
or Master Landlord.
3. Costs. Subtenant shall bear all costs incurred in connection with
the design and construction of Sublandlord's Work, including without limitation
all related costs to which Master Landlord is entitled under the Master Lease
and Teladata's project management fee, fees for materials, and other fees
incurred in association with Teladata's performance. Subtenant shall pay such
costs within fifteen (15) days of receipt of Sublandlord's invoice. Sublandlord
may bill Subtenant in installments or in a lump sum. All sums owing by Subtenant
and not paid as agreed shall bear interest, and Subtenant shall be assessed a
late charge, in accordance with Paragraph 3.4 of the Sublease.
III. GENERAL TERMS.
1. No Partnership. Nothing in this Agreement shall cause Sublandlord
and Subtenant to be partners or joint venturers.
2. Representatives. Subtenant has designated Charley Clark and Robert
Bradley as its sole representative(s) with respect to the matters set forth in
this Agreement, who, until further notice to Sublandlord, shall have full
authority and responsibility to act on behalf of Subtenant as required in this
Agreement. Sublandlord has designated Steve Payne and Ron Hearon as its sole
representative(s) with respect to the matters set forth in this Agreement, who,
until further notice to Subtenant, shall have full authority (excepting
signature authority) and responsibility to act on behalf of Sublandlord as
required in this Agreement.
SUBLANDLORD: SUBTENANT:
ARIBA, INC., NETSCREEN TECHNOLOGIES, INC.,
a Delaware corporation a Delaware corporation
By: /s/ Michael Fancher By: /s/ Remo Canessa
Title: VP & Coprorate Controller Title: CFO
Date: October 18, 2002 Date: October 18, 2002
EXHIBIT I
<PAGE>
ATTACHMENT 1
Subtenant's Work Conceptual Plans
[Graphic of Subtenant's Work Conceptual Plans Appears Here.]
EXHIBIT I
<PAGE>
ATTACHMENT 2
Sublandlord's Work Conceptual Plans
[Graphic of Sublandlord's Work Conceptual Plans Appears Here.]
EXHIBIT I
<PAGE>
EXHIBIT J
ESTOPPEL CERTIFICATE
TO: _______________________
RE: Sublease ("Sublease") dated ___________________, by and between___________
_______________________________________________________________________________,
as Sublandlord, and _______________________________________________________
as Subtenant, concerning the real property known as:____________________________
________________________________________________________________________________
________________________________________________________________________________
("Premises"), which Sublease was amended________________________________________
(it will be presumed no amendments exist unless they are specified above).
Subtenant hereby certifies as follows:
1. True copies of the above-referenced Sublease as amended are
attached hereto marked Exhibit "1" (Attach a copy of Sublease and all
amendments.)
2. The Sublease term commenced on ___________________ and expires on
__________________.
3. The current monthly Base Rent and most recent monthly Subtenant's
Project Share of Operating Expense and Master Lease Expenses are
as follows
<TABLE>
<CAPTION>
AMOUNT DAY OF MONTH DUE PAID UP THROUGH
------ ---------------- ----------------
<S> <C> <C> <C>
BASE RENT $
________________ ________________ ________________
OPERATING EXPENSES $
________________ ________________ ________________
MASTER LEASE
EXPENSES $
________________ ________________ ________________
</TABLE>
No Base Rent, Operating Expenses or Master Lease Expenses have been prepaid
except as reflected in the Sublease.
4. The current amount of security deposit held by Sublandlord is
$_________________.
5. The Sublease has not been modified, orally or in writing, since its
execution, except as hereinabove identified. The Sublease is in full force and
effect and contains the entire agreement between Sublandlord and Subtenant,
except (if there are no exceptions, write "NONE"):______________________________
________________________________________________________________________________
________________________________________________________________________________
6. The improvements and space required to be provided by Sublandlord
have been furnished and completed in all respects to the satisfaction of
Subtenant, and all promises of an inducement nature by Sublandlord have been
fulfilled except (if there are no exceptions, write "NONE"):____________________
________________________________________________________________________________
________________________________________________________________________________
EXHIBIT J
1
<PAGE>
7. Subtenant has no knowledge of any uncured defaults by Sublandlord
or Subtenant under the Sublease, except (if there are no exceptions, write
"NONE"):________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
8. There are no disputes between Sublandlord and Subtenant concerning
the Sublease, the Premises or the improvements therein or thereon, except (if
there are no exceptions, write "NONE"):_________________________________________
________________________________________________________________________________
________________________________________________________________________________
8. Subtenant is in full and complete possession of the Premises and
has not assigned or sublet any portion of the Premises, except (if there are no
exceptions, write "NONE"):______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
9. Subtenant has no knowledge of any prior sale, transfer, assignment
or encumbrance of the Sublandlord's interest in the Sublease, except (if there
are no exceptions, write "NONE"):_______________________________________________
________________________________________________________________________________
________________________________________________________________________________
10. Subtenant has made no alterations or additions to the Premises,
except (if there are no exceptions, write "NONE"):
________________________________________________________________________________
If alterations or additions have been made by Subtenant, Subtenant represents
that to its knowledge, all such alterations and additions were done in
accordance with the terms of the Sublease and in compliance with all applicable
laws, rules and regulations, except (if there are no exceptions, write "NONE"):
________________________________________________________________________________
________________________________________________________________________________
11. Subtenant is not currently the subject of a bankruptcy proceeding
and to its knowledge Sublandlord is not involved in such a proceeding, except
(if there are no exceptions, write "NONE"):_____________________________________
________________________________________________________________________________
________________________________________________________________________________
12. Subtenant is aware that buyers, lenders and others will rely upon
the statements made in this Estoppel Certificate, and has therefore adjusted the
language hereof as necessary to make it an accurate statement of the current
facts concerning the Sublease. If no such adjustments have been made, said
parties may rely upon the statements in this form as printed.
13. Additional items (if there are no additional items, write "NONE"):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
DATE: ___________________________
(Fill in date of execution)
EXHIBIT J
2
<PAGE>
___________________________________________
___________________________________________
By:
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Name Printed:
------------------------------
Title:
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EXHIBIT J
3
<PAGE>
EXHIBIT "1"
TO ESTOPPEL CERTIFICATE
(Attach a copy of Sublease and any amendments.)
EXHIBIT J
4
<PAGE>
EXHIBIT K
SITE SIGNAGE PLAN
[Graphic of Site Signage Plan Appears Here.]
EXHIBIT L
<PAGE>
EXHIBIT L
ENVIRONMENTAL DOCUMENTS
1. Letter from Major Ronald E. Thompson, Jr., Department of the Air Force,
dated February 11, 2000 to the Major Ronald E. Thompson, Jr., Onizuka Air
Station, and the Department of Community Development re: Moffett Park Drive
APN 110-02-067, with the 738 EIS Engineering Report, dated 13-17 January
2000, prepared by Air Force Materiel Command and identified as 738
EIS-EMC-00-02.
2. Letter from Mr. Peter Polson, Ph.D. Consultant, dated January 12, 2000 to
Mr. Tim Hennessey of Jay Paul Company re: Moffett Park Development
3. Memorandum from Jeff Lawson, Esq., Silicon Valley Law Group, dated June 28,
2001 to Tom Smith, Interwoven re: Interwoven/Ariba Sublease, Technology
Corners, Radiation Hazard Issue
4. Letter from Phillip L. Fitzwater, R.G., R.E.A., Iris Environmental dated
May 18, 2000 to Mr. Steve Morse of the California Regional Water Quality
Control Board re: RWQCB Closure Concurrence for Two Soil Areas, Former
Lockheed Martin Building 104, Sunnyvale, CA (See, Items 9, 10 and11 for
attachments to letter)
5. Letter from Lawrence P. Kolb, California Regional Water Quality Control
Board, dated May 24, 2000 to Mr. Phillip L. Fitzwater, R.G., R.E.A. of Iris
Environmental re: Review and Concurrence with "Addendum to Post-Closure
Report (April 7, 2000), Lockheed Martin Space Systems Company, Building
104, Sunnyvale, CA"
6. Letter from Stewart McGee, Hazardous Materials Inspector, Fire &
Environmental Services, Bureau of Special Operations, Department of Public
Safety for the City of Sunnyvale, California dated March 21, 2000 to Mr.
Allen Lund of Lockheed Martin Corporation, Missiles and Space re: Remedial
Measures for Impacted Soils at Former Building 104 Facility, dated March
17, 2000
7. Letter from Stewart McGee, Hazardous Materials Inspector, Fire &
Environmental Services, Bureau of Special Operations, Department of Public
Safety for the City of Sunnyvale, California dated April 11, 2000 to Mr.
Allen Lund of Lockheed Martin Corporation, Missiles and Space re:
McLaren/Hart "Addendum to Post-Closure Report of Lockheed Martin Space
Systems Company, Building 104, Sunnyvale, CA" dated April 7, 2000
8. Addendum to Post-Closure Report of Lockheed Martin Space Systems Company
Building 104, Sunnyvale, California dated April 7, 2000; prepared by
McLaren/Hart, Inc. located at 1320 Harbor Bay Parkway, Suite 100, Alameda,
California 94502
EXHIBIT L