California-Santa Clara-3515-3585 Monroe Drive Sublease - Apple Computer Inc. and NVIDIA Corp.
SUBLEASE
This Sublease, dated April 2, 1998, for reference purposes only, is made by
and between Apple Computer, Inc., a California corporation (the "Sublessor"),
and NVidia, a Delaware corporation, (the "Sublessee"), with respect to the
following facts:
A. Sublessor is the tenant under that certain Lease (the "Master Lease")
dated June 1, 1988, amended by that certain Memorandum of Lease dated June 1,
1988, First Amendment to Lease dated May 31, 1989, that certain Second Amendment
to Lease dated November 9, 1989, that certain Third Amendment to Lease dated
February 8, 1995, that certain Fourth Amendment to Lease dated March 29, 1995,
that certain Fifth Amendment to Lease dated June 20, 1995, and that certain
Sixth Amendment to Lease dated December 22, 1995, of approximately 218,816
square feet of space located at 3515, 3535 and 3585 Monroe Drive, Santa Clara,
Santa Clara County, State of California (the "Premises"), which Master Lease was
executed by MPJ, a California general partnership, as Landlord (hereinafter the
"Master Lessor"), and Sublessor as Tenant. The Master Lease is attached hereto
as Exhibit A and, subject to the terms hereof, is incorporated herein.
B. Sublessee desires to sublease a portion of the Premises, consisting of
approximately eighty-eight thousand nine hundred thirty-six (88,936) square
feet, commonly known as 3535 Monroe Drive, Santa Clara, California, and shown
hatched on the floor plan attached as Exhibit B (the "Sublease Premises"), on
the terms and conditions set forth below.
NOW, THEREFORE, for good and valuable consideration, the parties agree
as follows:
1. Premises Sublessor hereby subleases the Sublease Premises to
--------
Sublessee, and Sublessee hereby subleases the Sublease Premises from Sublessor,
for the term, at the rental and upon all the conditions set forth herein.
2. Term.
----
2.1 Term. The term of this Sublease shall be for a period commencing
----
on the later of (a) June 1, 1998 or (b) the date that the written consent of
Master Lessor to this Sublease has been obtained (the "Commencement Date").
Subject to the terms hereof, this Sublease shall expire on December 31, 2002,
unless the Master Lease is sooner terminated, which termination shall occur
without liability on the part of Sublessor unless such termination resulted
solely from a default of Sublessor thereunder.
2.2 Delay in Commencement. Notwithstanding the provisions of
---------------------
paragraph 2.1, above, if for any reason Sublessor cannot deliver possession of
the Demised Premises to Sublessee on the Commencement Date, Sublessor shall not
be subject to any liability on account of said failure to deliver, nor shall
such failure affect the validity of this Sublease or the obligations of
Sublessee hereunder or extend the term hereof, but in such event, Sublessee
shall not be obligated to pay rent for the Sublease Premises until possession of
the Sublease Premises is tendered to Sublessee, provided the delay is not
attributable to Sublessee. If the Commencement Date is delayed as a result of
any act or omission of Sublessee, its agents, employees or contractors, the
Commencement Date shall be deemed to be the date the Commencement Date would
have occurred if no Sublessee delay or delays had occurred.
Notwithstanding the provisions of paragraph 2.2, if Sublessor has not
delivered the Sublease Premises to Sublessee in the condition required
hereunder, free of occupants and tenants, on or before July 1, 1998, Sublessee
shall have the right thereafter, until such possession is
1.
<PAGE>
delivered to Sublessee to cancel this Sublease on not less than ten (10) days
prior written notice to Sublessor; if Sublessor delivers the Premises to
Sublessee within period, Sublessee shall accept possession of the Premises. Upon
such cancellation, Sublessor shall return to Sublessee all sums theretofore
deposited by Sublessee with Sublessor and neither party shall have any further
liability or obligation to the other.
3. Rent.
----
3.1 Base Monthly Rent. Beginning on the Commencement Date,
-----------------
Sublessee shall pay to Sublessor during the term of this Sublease the following
amounts as "Base Monthly Rent":
Months Rent/SF/Mo Rent/Mo
------ ---------- --------
Months 1 through 12 $1.25 NNN $111,170
Months 13 through 24 $1.70 NNN $151,191
Months 25 through 36 $1.75 NNN $155,638
Months 37 through 48 $1.80 NNN $160,085
Months 49 through 55 $1.85 NNN $164,532
Full Base Monthly Rent is due and shall be paid in advance in equal
installments on or before the first day of each calendar month in lawful money
of the United States without notice or demand and without any set off,
deduction, abatement or offset whatsoever except as otherwise provided herein.
Base Monthly Rent for any partial month during the Sublease term shall be
prorated based on the actual number of days in the partial month. Sublessor and
Sublessee agree to execute a Confirmation of Commencement Date Agreement in the
form attached as Exhibit C, confirming the date this Sublease commences and the
dates on which Base Monthly Rent increases during the Sublease term.
3.2 Payment of First Month's Base Monthly Rent. Concurrently
------------------------------------------
with Sublessee's execution of this Sublease, Sublessee shall deposit with
Sublessor the sum of One Hundred Eleven Thousand One Hundred Seventy and 00/100
Dollars ($111,170.00) as payment of the first month's Base Monthly Rent.
3.3 Additional Rent. All monies other than Base Monthly Rent
----------------
required to be paid by Sublessee under this Sublease, including, without
limitation, the furniture price (as defined in paragraph 14 and Exhibit F), all
operating expenses, taxes, insurance, maintenance and other expenses and charges
of every kind and nature arising in connection with the Sublease Premises, this
Sublease or the Master Lease (including, without limitation, all amounts payable
under the Master Lease as described in Sections 3.4, 4, 6, 7, and 11) shall be
deemed "Additional Rent" payable by Sublessee to Sublessor in accordance with
the terms of this Sublease and the Master Lease. Base Monthly Rent and
Additional Rent shall be referred to collectively herein as "Rent." For
purposes of this Sublease, Sublessee's Pro Rata Share, as defined in Section 3.4
of the Master Lease, shall be 88,936/275,264 or 32.31%. Rent shall be paid by
Sublessee to Sublessor at the address stated herein or at such other address as
may be designated by Sublessor. Notwithstanding the foregoing, Sublessor shall
have the right to direct Sublessee to pay Rent directly to Master Lessor, and
Master Lessor shall credit such amounts to the Rent due for the Sublease
Premises pursuant to the Master Lease.
3.4 No Rental Adjustment. The parties agree that any statement
--------------------
of square footage set forth in the Sublease is an approximation which Sublessor
and Sublessee agree is reasonable and the rental based thereon and Tenant's Pro
Rata Share as set forth in paragraph 3.3. is not subject to revisions if the
actual square footage is more or less.
Sublessor agrees to make timely payments of rent and any other sums
due
2.
<PAGE>
thereunder and to faithfully and fully perform all of its obligations under the
Master Lease to the end that the Master Lease shall not be terminated to the
default of Sublessor thereunder.
Notwithstanding anything herein to the contrary, Sublessor shall
promptly provide Sublessee with a copy of any written notice received by
Sublessor of any default of Sublessor under the Master Lease, which default is
continuing after the expiration of any applicable grace period provided therefor
in the Master Lease ("Sublessor's Default"). From and after Sublessor's
Default, Sublessee shall have the right, but not the obligation, to pay any and
all Base Rent and Additional Rent accruing from and after the date of such
Default, and perform all its obligations hereunder to Master Lessor without
being liable to Lessor for such payments or performance. If Master Lease
terminates due to Sublessor's default of its obligations thereunder, Sublessee
may request Master Lessor to execute and deliver to Sublessee a nondisturbance
agreement. Upon receipt thereof, Sublessee shall attorn to Master Lessor and
recognize Master Lessor as Lessor under this Lease, and Master Lessor shall
agree in writing to be bound by the terms of this Sublease.
4. Security Deposit.
----------------
4.1 Concurrently with Sublessee's execution of this Sublease,
Sublessee shall deposit with Sublessor the sum of Two Hundred Twenty-Two
Thousand Three Hundred Forty and 00/100 Dollars ($222,340.00) which shall be
held by Sublessor as security for the faithful performance of all of the terms
of this Sublease. If Sublessee fails to pay Rent or otherwise defaults with
respect to any provision of this Sublease, then Sublessor may draw upon, use,
apply or retain all or any portion of the security deposit after applicable
notice and cure periods for the payment of any Rent or other charge in default,
for the payment of any other sum which Sublessor has become obligated to pay by
reason of Sublessess's default, or to compensate Sublessor for any loss or
damage which Sublessor has suffered thereby. If Sublessor so uses or applies all
or any portion of the security deposit, then Sublessee, within fifteen (15) days
after demand therefore, shall deposit cash with Sublessor in the amount required
to restore to the full amount stated above. Upon the expiration of this
Sublease, if Sublessee is not in default, Sublessor shall return to Sublessee so
much of the security deposit as has not been applied by Sublessor pursuant to
this Paragraph 4, or which is not otherwise required to cure Sublessee's
defaults.
5. Use of Premises. The Demised Premises shall be used and occupied
---------------
solely for the purposes set forth in Section 5.1 of the Master Lease.
5.1. Condition of Demised Premises; Repairs. Subject to the
--------------------------------------
provisions of Paragraph 5.2 below, Sublessor has not agreed to make any
alterations, repairs or improvements to the Sublease Premises, and by taking
possession of the Sublease Premises, Sublessee shall conclusively be deemed to
have accepted the Sublease Premises in their "as-is" then existing condition
excluding latent defects, subject to all applicable zoning, municipal, county
and state laws, ordinances and regulations governing or regulating the use or
occupancy of the Sublease Premises. Sublessee acknowledges that neither
Sublessor nor its agents has made any representations or warranties with respect
to the condition of the Sublease Premises or as to the suitability of the
Sublease Premises for the conduct of Sublessee's business. In particular,
Sublessor makes no representation with respect to compliance of the Sublease
Premises or the Complex with the Americans With Disabilities Act of 1990
("ADA"), compliance with which shall be the sole responsibility of Sublessee.
5.2 Repairs. Sublessor shall have no obligation whatsoever to make
-------
or pay the cost of any alterations, improvements or repairs to the Sublease
Premises, including, without limitation, any improvement or repair required to
comply with any law, regulation, building code or ordinance (including the ADA).
Notwithstanding the foregoing, if Master Lessor shall fail to perform its
obligations in accordance with the terms of the Master Lease, Sublessor, upon
receipt
3.
<PAGE>
of written notice from Sublessee, shall diligently attempt to enforce all
obligations of Master Lessor under the Master Lease (without requiring Sublessor
to spend more than a nominal sum, which nominal sum shall be limited to all
costs associated with the preparation of and transmittal to Master Lessor of
documentation from Sublessor or Sublessor's attorneys detailing the obligations
to be performed by Master Lessor under the Master Lease). If, after receipt of
written request from Sublessee, Sublessor shall fail or refuse to take action
for the enforcement of Sublessor's rights against Master Lessor with respect to
the Sublease Premises ("Action"), and provided that Sublessor as Tenant under
the Master Lease shall be conferred upon and assigned to Sublessee, and
Sublessee shall be subrogated to such rights to the extent that the same shall
apply to the Sublease Premises. If any such Action against Master Lessor in
Sublessee's name shall be barred by reason of lack of privity, nonassignability
or otherwise, Sublessee may take such Action in Sublessor's name; provided that
Sublessee has obtained the prior written consent of Sublessor, which consent
shall not be unreasonably withheld, and, provided further, that Sublessee shall
indemnify, protect, defend by counsel reasonably satisfactory to Sublessor and
hold Sublessor harmless from and against any and all liability, loss, claims,
demands, suits, penalties or damage (including, without being limited to,
reasonable attorneys' fees and expenses) which Sublessor may incur or suffer by
reason of such Action, except for any such liability, loss, claims, demands,
suits, penalties or damage which Sublessor may incur or suffer by reason of
Sublessor's negligent acts or omissions.
5.3 Alterations. Sublessee's rights to make alterations to the
-----------
Sublease Premises is subject to the provisions of Section 7.3 of the Master
Lease. Unless otherwise agreed to in writing by Master Lessor, at the
expiration or earlier termination of this Sublease, Sublessee shall (i) remove
all alterations, additions and improvements to the Sublease Premises made by
Sublessee or its contractors, (ii) restore the Sublease Premises to their
original condition prior to making such alterations, additions and improvements,
and (iii) repair all damage caused in removing such alterations, additions and
improvements. Sublessee agrees that the indemnification provisions of Section
10 of the Master Lease shall be deemed to include all claims, damages, costs,
expenses and the like therein described which arise out of any alterations,
additions or other improvements to the Sublease Premises made by Sublessee or
its contractors.
6. Master Lease Provisions.
-----------------------
6.1 Performance of Master Lease Provisions. Sublessee acknowledges
--------------------------------------
and agrees that this Sublease shall be subject and subordinate to the Master
Lease, and neither Sublessee nor Sublessor shall not cause or permit any
violation of any term thereof. Sublessee hereby expressly assumes and agrees to
perform and comply with, for the benefit of Sublessor and Master Lessor, each
and every obligation of Sublessor as Tenant under the Master Lease which relates
to the Demised Premises to the extent incorporated herein. Sublessor agrees
that it shall perform all of its obligations under the Master Lease which have
not been assumed by Sublessee, such that the Master Lease shall not be
terminated due to the default of Sublessor during the term of this Sublease.
Sublessor shall indemnify, defend, and hold Sublessee harmless from and against
any liability, less, damages, actions, proceedings or expenses (including but
not limited to attorney's fees and consultant's fees) arising or resulting from
or in connection with a breach of this obligation.
6.2 Incorporation By Reference. The terms and conditions of this
--------------------------
Sublease shall include all of the provisions of the Master Lease, which are
incorporated into this Sublease as if fully set forth, except that:
(i) each reference in such incorporated Sections to "Lease"
shall be deemed a reference to "Sublease."
(ii) each reference to "Landlord" and "Tenant" shall be deemed
4.
<PAGE>
a reference to "Sublessor" and "Sublessee," respectively, except as otherwise
provided herein.
(iii) with respect to work, services, repairs, provision of
insurance, restoration, or the performance of any other obligation of Master
Lessor under the Master Lease including, without limitation, Section 7.1
(Maintenance and Repairs); Section 7.2G and Section 7.3D (Capital Improvements);
Section 10.1 (Landlord's Indemnification); Section 11.2 (Landlord's Insurance);
Section 12 (Damage or Destruction); Section 13 (Condemnation); Section 18.1
(Outside Area); and Section 18.2 (Outside Area Expenses); the sole obligation of
Sublessor shall be as set forth in paragraph 5.2 above. Sublessor shall provide
to Sublessee copies of all notices given to Sublessor by Master Lessor which are
relevant to this Sublease promptly following receipt thereof, including but not
limited to any notice of Sublessor's default or breach of its obligations under
the Master Lease.
(iv) except as expressly provided herein, with respect to any
obligation of Sublessee to be performed under this Sublease, wherever the Master
Lease grants to Sublessee a specified number of days to perform its obligations
under the Master Lease, Sublessee shall have one-half of the number of days
granted in the Master Lease (rounded up) to perform the obligation, including,
without limitation, curing any defaults. In addition, the reference in Section
4.1(b) to ten days shall be twenty (20) days; the reference in Section 4.2(b) to
ten (10) days shall be twenty (20) days; the reference in Section 4.4 to ten
(10) days shall be twenty (20) days; the reference in Section 7.3A to five (5)
days shall be ten (10) days, the reference to thirty (30) days shall be forty-
five (45) days, the reference to one hundred twenty (120) days shall be one
hundred thirty-five (135) days, and the reference to ten (10 business days shall
be twenty (20) business days; the reference in Section 9 to ten (10 business
days shall be twenty (20) business days; the references in Section 14.1B and
14.1C to fifteen (15) days shall be thirty (30) days; and the references in
Section 16.3 to thirty (30) days shall be forty-five (45) days.
(v) with respect to any approval required to be obtained from
the "Landlord" under the Master Lease, such consent must be obtained from both
Master Lessor and Sublessor and the approval of Sublessor may be withheld if
Master Lessor's consent is not obtained.
(vi) the following provisions are not incorporated into this
Sublease, or are incorporated as modified herein: Sections 1, 2, 3.1, 3.2, 3.3;
the last full paragraph of Section 3.4; the second paragraph of Section 5.1; the
second sentence of Section 7.2F; the proviso in the first sentence of Section
7.3A; the reference to "Landlord" in the first sentence of Section 6.3 shall
apply only to the Master Lessor; the word "negligence" in the last sentence of
Section 10.2 is replaced with the phrase "gross negligence;" the termination
rights of Tenant set forth in Section 12 shall apply only with respect to the
Sublease Premises; the proviso in the first sentence of Section 15.1; the
reference to "one percent (1%)" in Section 16.2B shall be "five percent (5%);"
Section 17; the first sentence of the second paragraph of Section 18.1; the
reference to "Landlord" in the third sentence of Section 18.2 shall apply only
to the Master Lessor; Section 19; the fourth sentence in Section 20.3C; the
proviso in the second sentence of Section 20.11; the addresses set forth in
Section 20.16 are replaced with the addresses set forth below in Paragraph 13.4
of this Sublease; Section 20.18; Section 21; Sections 22B through 22F; Exhibits
A and B; and all amendments to the Master Lease described in Recital A above.
7. Right to Cure. If Sublessee fails to pay any sum of money to Sublessor
-------------
or to Master Lessor, or fails, within any applicable grace periods provided for
therein, or to perform any other act on its part to be performed hereunder, then
Sublessor may, but shall not be obligated to make such payment or perform such
act. All such sums paid and all costs and expenses of performing any such act
shall be deemed additional rent payable by Sublessee to Sublessor upon demand,
together with interest thereon at the interest rate described in Section 20.14
of the Master Lease.
5.
<PAGE>
8. Insurance, Sublessee agrees to carry the insurance coverage described
---------
in Section 11.1 of the Master Lease during the term of this Sublease. Sublessee
shall name Sublessor as an additional insured under the required insurance
policies. Prior to occupancy of the Sublease Premises, Sublessee shall deliver
a certificate of insurance evidencing the above to Sublessor and Master Lessor.
9. Assignment and Subletting.
-------------------------
9.1 Restriction on Assignment and Subletting. Sublessee shall not
----------------------------------------
assign, sublease, transfer or encumber this Sublease or any interest therein or
grant any license, concession or other right of occupancy of the Sublease
Premises or any portion thereof or otherwise permit the use of the Sublease
Premises or any portion thereof by any party other than Sublessee (any of which
events is hereinafter called a "Transfer") without the prior written consent of
the Master Lessor pursuant to Section 14 of the Master Lease and the Sublessor,
which consent of Sublessor shall not be unreasonably withheld or delayed.
Sublessor's consent shall be considered reasonably withheld if (i) the proposed
transferee is determined by Sublessor to not be financially sound applying
generally accepted accounting principles in making such determination; (ii)
Sublessee is in default; or (iii) any portion of the Sublease Premises would
become subject to additional or different governmental laws or regulations as a
consequence of the proposed Transfer and/or the proposed transferee's use and
occupancy of the Sublease Premises and or which impose significant financial
burden on Sublessor as a result thereof. Sublessee acknowledges that the
foregoing is not intended to be an exclusive list of the reasons for which
Sublessor may reasonably withhold its consent to a proposed Transfer. Any
attempted Transfer in violation of the terms of this Paragraph 9 shall, at
Sublessor's option, be void. Consent by Sublessor to one or more Transfers
shall not operate as a waiver of Sublessor's rights as to any subsequent
Transfers. Notwithstanding the foregoing, Sublessee shall be permitted the
rights of assignment or subletting described in Section 14.1E of the Master
Lease provided that (i) Sublessee gives written notice to Sublessor at least
thirty (30) days prior to such proposed transfer together with such information
as shall establish that the proposed Transfer qualifies for the exemption set
forth in Section 14.1E; (ii) the proposed transferee delivers to Sublessor
concurrent with any such assignment or subletting an assumption agreement
whereby the proposed transferee assumes and agrees to perform, observe and abide
by the terms, conditions, obligations and provisions of the Sublease; and (iii)
in the case of a proposed Transfer to an affiliate, the entity status is not
established as a subterfuge in an attempt to avoid the provisions of this
Sublease respecting assignment and subletting.
9.2 Required Notice. If Sublessee requests Sublessor's consent to a
---------------
Transfer, Sublessee, together with such request, shall provide Sublessor with
the name of the proposed transferee and the nature of the business of the
proposed transferee, the term, use, rental rate and all other material terms and
conditions of the proposed Transfer, including, without limitation, a copy of
the proposed assignment, sublease or other contractual documents and evidence
satisfactory to Sublessor that the proposed transferee is financially sound.
Notwithstanding Sublessor's agreement to act reasonably under subparagraph 9.1
above, Sublessor may, within thirty (30) days after its receipt of all
information and documentation required herein consent to or reasonably refuse to
consent to such Transfer in writing. In the event Sublessor consents to any
such Transfer, the Transfer and consent thereto shall be in a form reasonably
approved by Sublessor, and Sublessee shall bear all actual costs and expenses
incurred by Sublessor in connection with the review and approval of such
assignment or sublease documentation.
9.3 Bonus Rent. If Sublessor consents to any Transfer pursuant to
----------
this Paragraph 9, Sublessee may, within one hundred twenty (120) days
thereafter, enter into such assignment or sublease of the Sublease Premises or
portion thereof upon the terms and conditions set forth in the notice furnished
to Sublessee pursuant to subparagraph 9.2 above. However, one
6.
<PAGE>
hundred percent (100%) of any rent or other consideration for the first year of
the Sublease and fifty percent (50%) of any rent or other consideration for the
remainder of the Sublease realized by Sublessee under any such assignment or
sublease (the "Transfer Consideration") in excess of the Base Monthly Rent and
Additional Rent payable hereunder (or the amount thereof proportionate to the
portion of the Sublease Premises subject to such sublease or assignment) shall
be paid to Sublessor, after deducting therefrom all actual costs and reasonable
expenses incurred by Sublessee to effect the transfer including but not limited
to rent concessions, advertising costs any customary brokers' commissions and
reasonable attorneys' fees in connection with such assignment or sublease
amortized on a straight line basis (without interest) over the term of the
sublease or assignment. Sublessee hereby covenants and agrees to promptly pay to
Sublessor the Transfer Consideration as and when received by Sublessee, but in
no event more than ten (10) days after receipt thereof.
9.4 Effect of Transfer. Any Transfer consented to by Sublessor in
------------------
accordance with this Paragraph 9 shall be only for the use permitted by Section
5.1 of the Master Lease and for no other purpose. In no event shall any
Transfer release or relieve Sublessee or any Guarantor from any obligations
under this Sublease.
10. Sublessor's Representations, Warranties and Covenants. Sublessor
-----------------------------------------------------
hereby represents and warrants to Sublessee that as of the commencement of the
Sublease (i) that the document attached as Exhibit A to this Agreement is a
true, correct and complete copy of the Master Lease, and that the Master Lease
represents the entire agreement between Sublessor and Master Lessor with respect
to the lease of the Sublease Premises, (ii) that, to the best knowledge Of
Sublessor, there is no default, or any condition which with the passage of time
or the giving of notice, or both, would constitute a default, on the part of
either party to the Master Lease, (iii) Sublessor has not assigned, encumbered
or otherwise transferred any interest of Tenant under the Master Lease with
respect to the Sublease Premises, (iv) the Expiration Date of the Master Lease
is December 31, 2002, and (v) there are no third party consents required with
respect to this lease transaction other than the consent of Master Lessor; and
Sublessor has duly authorized this lease transaction.
11. Amendments to Master Lease. Sublessor agrees that it shall not,
--------------------------
without the prior written consent of Sublessee, which consent shall not be
unreasonably withheld or delayed, enter into any amendment to the Master Lease
which prevents or materially adversely affects the use by Sublessee of the
Sublease Premises in accordance with the terms of this Sublease, materially
increases the obligations of Sublessee under this Sublease or materially
decreases Sublessee's rights under this Sublease.
12. Miscellaneous
-------------
12.1 Attorney's Fees. If either Sublessor or Sublessee brings any
---------------
action or proceeding, whether legal, equitable or administrative, to enforce
rights and obligations under this Sublease, or to declare rights hereunder, the
prevailing party in any such action or proceeding shall be entitled to recover
from the other party reasonable attorneys' fees and costs of suit, in addition
to any other relief allowed by the court.
12.2 Brokers. The parties agree that they have dealt with no real
-------
estate broker in connection with this Sublease other than Cornish and Carey, and
they agree to indemnify and hold each other harmless from and against any damage
or expense incurred by reason of any other broker claiming a right to any
commission or compensation as a result of its dealings with the indemnifying
party.
12.3 Authority to Execute. Sublessee and Sublessor each represent
--------------------
and warrant to the other that the person(s) executing this Sublease on behalf of
each party is (are) duly
7.
<PAGE>
authorized to execute and deliver this Sublease on that party's behalf.
12.4 Notices. Any notice required or permitted to be given under
-------
this Sublease, including any change of address for purpose of giving notice,
shall be in writing, and shall be given as provided in Section 20.16 of the
Master Lease. For purposes of this Sublease, the addresses of the parties are
set forth below:
Sublessor
---------
Apple Computer, Inc.
One Infinite Loop
Mail Stop 35-AOK
Cupertino, CA 95014
Attention: Real Estate Department
With copies of default notices only to:
------------------------
Apple Computer, Inc.
One Infinite Loop
Cupertino, CA 95014
Attention: General Counsel/esm
Sublessee
---------
NVidia
3535 Monroe Street
Santa Clara, CA 95051
12.5 Incorporation of Prior Agreements. This Sublease incorporates
---------------------------------
all agreements of the parties with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, whether oral
or written.
12.6 Modifications, This Sublease may be modified or amended only by
-------------
an instrument in writing, executed by both parties in interest hereunder.
12.7 Governing Law; Severability. This Sublease shall be governed by
---------------------------
and construed in accordance with the laws of the State of California. If any
term or provision of this Sublease is found by a court of competent jurisdiction
to be void or unenforceable, such term or provision shall be deemed severed from
the remainder of the terms and provisions of this Sublease, and said remainder
shall remain in full force and effect, according to its terms, to the extent
permitted by law.
12.8 Parking. Subject to the provisions of Section 18.1 of the
-------
Master Lease, Sublessee shall have the non-exclusive right at no additional
cost, to use all parking spaces located in the Outside Area as outlined in red
on Exhibit D attached hereto.
12.9 Hazardous Materials. Attached hereto as Exhibit E is an
-------------------
environmental report prepared by Kennedy/Jenks Consultants with respect to the
Sublease Premises. Other than the information contained in such reports,
Sublessor represents and warrants that it has not received any written notice of
the release or disposal of any Hazardous Materials on or about the Sublease
Premises in violation of any Hazardous Materials Laws. Sublessor represents and
warrants that it has not released or disposed of any Hazardous Materials on or
about the Sublease Premises in violation of Hazardous Materials Laws. Except as
otherwise provided herein and except for the foregoing representation, Sublessor
makes no representation or warranty of any kind whatsoever with respect to any
Hazardous Materials on or about the Premises.
8.
<PAGE>
12.10 Signage. Sublessee's signage rights shall be subject to the
-------
provisions of Section 20.12 of the Master Lease, as amended hereby.
12.11 Subordination; Nondisturbance Agreement. Prior to the
---------------------------------------
Commencement Date, Sublessor shall request from Master Lessor, a nondisturbance
agreement from Master Lessor's lender which is reasonably acceptable to
Sublessee, and shall use reasonable efforts to obtain the same from Master
Lessor; provided, however, Sublessee's receipt of a non-disturbance agreement
from Master Lessor's lender shall not be a condition of this Sublease.
12.12 Exhibits. Subject to the terms hereof, all exhibits attached
---------
hereto are incorporated herein.
13. Landlord's Lien. Notwithstanding anything herein to the contrary,
---------------
but subject to any rights Sublessor may have under Exhibit C, Sublessor waives
any and all rights, title and interest Sublessor now has, or hereafter may have,
whether statutory or otherwise, to Sublessee's inventory, equipment,
furnishings, trade fixtures, books, and records, personal property, tenant
improvements paid for by Sublessee located at the Premises (singly and/or
collectively, the "Collateral"). Sublessor acknowledges that Sublessor has no
lien, right, claim, interest or title in or to the Collateral. Sublessor
further agrees that Sublessee shall have the right, at its discretion, to
mortgage, pledge, hypothecate or grant a security interest in the arrangement
related to the conduct of Sublessee's business at the Premises. The Collateral
shall not become the property of Sublessor and may be removed by Sublessee or at
any time and from time to time during the entire term of this Lease. Sublessee
shall promptly repair any damage caused by the removal of such property, whether
effected by Sublessee.
14. Furniture Purchase. Concurrently herewith, Sublessor agrees to sell
------------------
223 cubicle work stations to include files and chairs and existing white board
(collectively the "Furniture") subject to the terms set forth in the attached
Exhibit F ("Furniture") to the Sublease. Sublessor acknowledges that the
agreement to sell the Furniture to Sublessee on the terms and conditions set
forth herein is a material inducement for Sublessee to enter into this Sublease
and the consummation of such sale on the terms and conditions reasonable
satisfactory to Sublessee shall be condition of this transaction.
15. Effectiveness; Consent of Master Landlord. This Sublease shall be of
-----------------------------------------
no force or effect unless and until the Master Lessor has executed and delivered
to Sublessee and Sublessor a fully executed consent to this Sublease, which the
Parties will pursue promptly and in good faith.
9.
<PAGE>
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease on
the dates set forth below, to be effective as of the date first set forth above.
SUBLESSOR: SUBLESSEE:
APPLE COMPUTER, INC. NVIDIA, INC.
By: By:
-------------------------------- --------------------------------
Its: Its:
------------------------------- -------------------------------
Date: Date:
------------------------------ ------------------------------
<PAGE>
LESSOR'S CONSENT
Subject to the conditions listed below, MPJ, a California general partnership
("Lessor"), hereby consents to the forgoing Sublease between Apple Computer,
Inc., a California corporation ("Sublessor"), and NVidia, a Delaware corporation
("Sublessee"), dated April 2, 1998 (the "Sublease").
The foregoing consent of Lessor is subject to the following conditions:
1. This Consent shall not relieve Sublessor of any liability or obligations
under the Master Lease and Sublessor shall continue to remain liable under
the Master Lease as a principal obligor and not as a surety.
2. This Consent shall not be deemed to be a consent to any future sublease and
any further subletting of the Premises shall require the prior written
consent of Lessor.
3. This Consent shall not be deemed to be a consent to any construction of any
tenant improvements other than Sublessee's Improvements as set forth in
Exhibit G of the Sublease, which Improvements neither Tenant under the
Master Lease, nor Sublessee shall have any restoration obligations to the
Premises and neither party shall be required to remove such Improvements at
the termination of the Sublease or Master Lease. Exhibit G plans are
attached and initialed by the parties, and made a part hereof.
4. Except as provided herein, this Consent shall not alter or amend any term
of provision of the Master Lease, all of which shall remain unamended and
in full force and effect.
5. Lessor shall be provided a Certificate of Insurance evidencing Sublessee's
coverage under the terms of the Lease, naming MPJ and South Bay Development
as additional insured.
6. Notwithstanding anything in the Sublease to the contrary, Lessor does not
agree to execute and deliver a nondisturbance agreement and does not agree
that it will be bound by the terms of the Sublease if the Master Lease
terminates.
7. Master Lessor represents and warrants to Sublessee that it is not aware of
any defaults on the part of Sublessor, and there are no defaults on the
part of Master Lessor at the time of execution hereof.
<PAGE>
IN WITNESS WHEREOF, Landlord has executed this Consent on the date set forth
opposite of its signatures
MPJ, a California General Partnership
Dated: By:
---------------------- --------------------------------------
James D. Mair, General Partner
By:
--------------------------------------
W. Leslie Pelio, General Partner
By:
--------------------------------------
William F. Jury, General Partner
The foregoing conditions to Lessor's Consents are hereby accepted.
"SUBLESSEE"
NVidia, a Delaware corporation
By:
--------------------------------------
Print:
----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
"SUBLESSOR"
Apple Computer, Inc., a California corporation
By:
--------------------------------------
Print:
----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
<PAGE>
EXHIBIT A
MASTER LEASE
------------
<PAGE>
EXHIBIT A
SIXTH AMENDMENT TO LEASE
------------------------
THIS SIXTH AMENDMENT TO LEASE (the "Amendment") is made and entered into as
of December 22, 1995 by and between MPJ, a California general partnership
("Landlord"), and a APPLE COMPTER, INC., a California corporation ("Tenant"),
with reference to the following facts.
RECITALS
--------
A. Tenant and Landlord entered into a certain lease agreement dated June
1, 1988, amended by that certain Memorandum of Lease dated June 1, 1998; First
Amendment to Lease dated May 31, 1989, that certain Second Amendment to Lease
dated November 9, 1989, that certain Third Amendment to Lease dated February 8,
1995, that certain Fourth Amendment to Lease dated March 29, 1995, and that
certain Fifth Amendment to Lease dated June 20, 1995 (as amended, the "Lease"),
pursuant to which Tenant leases from Landlord certain premises described in the
Lease (the "Premises") and located in the building known as the Lawrence
Business Center in Santa Clara, California (the "Building").
B. In order to facilitate the making of a loan from Connecticut General
Life Insurance Company to Landlord to finance the Building, Landlord and Tenant
wish to amend paragraph ten (10) of Fourth Amendment to the Lease in certain
respects set forth below to provide for the disposition of the lease termination
fee provided for in the Lease.
AGREEMENT
---------
In consideration of the recitals set forth above and the covenants
contained herein, Landlord and Tenant hereby agree as follows:
1. Lease Termination Notice. Paragraph 10(a) of the Fourth Amendment to
------------------------
Lease is hereby amended by adding the following language at the end of the
paragraph: "Tenant and Landlord further agree to promptly give Lender written
notice of any election by Tenant to exercise any option to terminate the Lease
prior to its stated expiration date. The notice address for Lender is
Connecticut General Life Insurance Company, 900 Cottage Grove Road, Bloomfield,
CT, 06002, Attention: Real Estate Investment."
2. Lease Termination Fee. Paragraph 10(b) of the Fourth Amendment to
---------------------
Lease is here by amended by adding the following language to the end of the
paragraph: "Landlord and Tenant hereby further agree that any payment due and
payable by Tenant to Landlord under the Lease as consideration, fee or penalty
for any option of Tenant under the Lease to terminate the Lease prior to its
stated expiration date (a "Termination Fee") shall be paid by Tenant directly to
an escrow account established and controlled solely by Connecticut General Life
Insurance Company ("Lender") in accordance with such instructions as Lender
shall deliver to Tenant or Landlord. Tenant agrees that it will not make any
payment of any such Termination Fee under the Lease, or any portion thereof,
directly to Landlord without prior written consent from Lender, and Landlord
agrees that it will neither accept nor request any payment of any such
Termination Fee directly from Tenant without prior written consent from Lender."
3. Third-Party Beneficiary. Tenant and Landlord hereby acknowledge and
-----------------------
agree that Lender (and any of its successors or assigns), is a third-party
beneficiary of the provisions of this Amendment.
4. No Other Modifications. Except as specifically set forth in this
----------------------
Amendment, all provisions of the Lease shall remain in full force and effect.
<PAGE>
5. Authority. Each of the persons executing this instrument on behalf of
---------
a party hereto does hereby covenant and warrant that such party is a duly
authorized and existing entity, that such party has full right and authority to
fulfill each of its responsibilities and obligations hereunder, and that each
and all of the persons signing on behalf of such party are authorized to do so.
Upon any party's request, any other party hereto will provide the requesting
party with evidence reasonably satisfactory to the requesting party confirming
the foregoing covenants and warranties.
6. Successors and Assigns. All provisions of this instrument will be
----------------------
binding upon and inure to the benefit of, the parties hereto, their successors
and assigns.
7. General Provisions. (a) No waiver by any party of any of the
------------------
provisions of this Amendment will be effective unless in writing and signed by
an authorized representative of the party making such waiver, and then only to
the extent expressly provided in such written waiver. (b) Time is of the
essence. (c) This Amendment will be governed by California law. (d) The captions
preceding the sections of this instrument have been inserted for convenience of
reference and such captions in no way define or limit the scope or intent of any
provision hereof. (e) This Amendment may be executed in separate counterparts,
each of which, when taken together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
TENANT:
------
APPLE COMPUTER, INC.
A California corporation
By: /s/ Robert A.Hecox
----------------------------
Robert A. Hecox
Director, Real Estate
----------------------------
Its_________________________
LANDLORD:
--------
MJP, a California general partnership
/s/ James D. Mair
By ----------------------------
James D. Mair
General Partner
/s/ William F. Jury
By ----------------------------
William F. Jury
General Partner
/s/ W. Leslie Pelio
By _________________________
W. Leslie Pelio
General Partner
<PAGE>
FIFTH AMENDMENT TO LEASE
This Fifth Amendment to Lease is made and entered into as of June 20, 1995,
by and between MPJ, a California general partnership ("Landlord") and APPLE
COMPUTER, INC., a California corporation ("Tenant") with reference to the
following facts, understandings and intentions:
A. Landlord and Tenant entered into a Lease Agreement dated as of June 1,
1988 covering certain premises located in the City of Santa Clara, California
(the "Original Lease"). The Original Lease was amended by a First Amendment to
Lease dated as of May 31, 1989 (the "First Amendment"), by a Second Amendment to
Lease dated as of November 9, 1989 (the "Second Amendment"), by a Third
Amendment to Lease dated as of February 8, 1995 (the "Third Amendment") and by a
Fourth Amendment to Lease dated as of March 29, 1995 (the "Fourth Amendment").
The Original Lease as amended by the First Amendment, Second Amendment, Third
Amendment and Fourth Amendment is hereinafter referred to as the "Lease".
B. The parties desire to amend the Lease by, among other things, deleting
Building A from the Premises covered by Lease effective as of June 20, 1995.
NOW, THEREFORE, Landlord and Tenant hereby agree that the Lease is amended
as follows:
1. Effective as of June 20, 1995, Building A (as shown on the Site Plan
attached to the Original Lease as EXHIBIT "A") is deleted from the Premises
covered by the Lease. Accordingly, from and after June 1, 1995, the Premises
shall include only Buildings B, C and D. Landlord hereby accepts Building A in
its "as-is" condition including the building's roof and operating systems.
Tenant shall have no further responsibility or liability for any repairs,
replacement or restorations to Building A. In addition, Landlord and Tenant
expressly agree that the items listed on the inspection report prepared by
Therma for National Semiconductor dated May 1995 for 3565 Monroe, Santa Clara,
California ( a copy of which report is attached hereto as EXHIBIT "A") are not
the responsibility of Tenant and Tenant shall have no responsibility for repairs
or have any liability for any cost for those items listed in this report.
2. Notwithstanding the deletion of Building A from the Premises effective
as of June 20, 1995, Tenant shall pay to Landlord the Base Monthly Rent and
Additional Rent applicable to Building A for the entire month of June, 1995.
Landlord hereby acknowledges receipt of such payment.
3. On or before June 30, 1995, Tenant shall pay to Landlord,
1
<PAGE>
as a lease termination payment and in addition to all other amounts due under
the Lease, the sum of ______________________.
4. Landlord and Tenant acknowledge and agree that the Base Monthly Rent
for Buildings B, C & D payable by Tenant to Landlord pursuant to Section 3.1 of
the Lease during the period July 1, 1995 through December 31, 1995, shall be the
sum of
5. Notwithstanding the actual date on which Building A is deleted from
the Premises, Landlord and Tenant agree that effective as of July 1, 1995,
Tenant's Pro Rata Share as defined in Section 3.4 of the Lease, shall be:
218,816/275,264 or 79.49%
6. The first sentence of the second grammatical paragraph of Section 18.1
of the Lease is deleted in its entirety and the following language is
substituted in lieu thereof:
Tenant shall have the exclusive right to use all
parking spaces located in the Outside Area except for the
parking spaces located in the portion of the Outside Area
highlighted on Exhibit "B" attached hereto and made a part
hereof (the "Excluded Area"). The parking area in the
Excluded Area shall be for the exclusive use of the lessee
of Building A and its employees and invitees. Tenant shall
not park or permit its employees or invitees to park in the
parking spaces located in the Excluded Area.
7. Tenant shall modify any of its existing signs to delete any reference
to "3565" or "3865 Monroe". A new monument sign may be constructed by Landlord
or the new lessee of Building A provided the monument sign is constructed to the
left of the existing transformer, as Building A is faced from Monroe Street.
8. Except as modified herein, the Lease shall remain unamended and in full
force and effect.
[DOCUMENT CONTINUES]
2
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this Fourth Amendment
to Lease as of the day and year first above-written.
LENDER: TENANT:
MPJ, APPLE COMPUTER, INC.,
a California general a California corporation
partnership
/s/ James D. Mair /s/ Robert A. Hecox
By: --------------------------- By: ------------------------
JAMES D. MAIR
Its: General Partner Name:_______________________
---------------------------
Robert A. Hecox
Title: Director, Real Estate
6/16/95
/s/ William F. Jury ---------------------
By: ---------------------------
WILLIAM F. JURY
Its: General Partner
---------------------------
/s/ W. Leslie Pelio
By: ---------------------------
W. LESLIE PELIO
Its: General Partner
---------------------------
3
<PAGE>
EXHIBIT "A"
--------------------------------------------------------------------------------
[LETTERHEAD OF THERMA APPEARS HERE]
--------------------------------------------------------------------------------
Attention: Eric Bergtraun
From our recent inspection we make the following recommendations:
AC-1
----
Replace filters, belt, leaking first stage sight glass, supply fan motor
bearings; adjust and properly set power exhaust dampers, economizer and inlet
vane actuators; clean condenser coil, condensate pan, and pipe condensate drain
P-trap to drain:
...................................................................... $1,963.73
Air Handler 1
-------------
Replace filter and reglue insulation on fan access panel:............. $91.51
Condensing Unit 1
-----------------
Operating normally at this time.
AC-2
----
Replace filters, belts, exhaust fan motor pulley, supply fan motor bearings,
exhaust fan motor bearings; rewire morning warmup (currently disconnected);
verify operation*; adjust inlet vanes for proper operation; clean condensate
pan; resecure condensate piping; clean condenser coils and compartment. First
stage refrigerant circuit low on charge. Need to locate leak, repair and
recharge with refrigerant. Oil is noted around liquid line solenoid valve. May
need to be replaced (to be determined at completion of leak repairs):
.................................................................... $2,964.43**
AC-3
----
Replace belts and filters; clean condensate pan, condenser coils; resupport
condensate piping; replace two leaking compressor oil sight glasses; verify
operation*:
.................................................................... $1,427.30
AC-4
----
Replace belts, filters, supply fan shaft bearings, motor bearings, first and
second stage oil sight glasses; adjust inlet vanes. First stage refrigeration
circuit has no charge. Need to locate leak, repair and recharge with
refrigerant**; replace liquid line filter drier:
.................................................................... $2,899.77
<PAGE>
National Semiconductor/Apple 1
Inspection Report
3565 Monroe, Santa Clara
May 1995
--------------------------------------------------------------------------------
AC-6
----
Replace belt, filter, supply fan shaft bearings, clean and degrease compressors:
...................................................................... $997.24
AC-7
Replace filters, reconnect economizer*, verify operation:............. $ 489.60
AC-8
----
Replace filters and belt:............................................. $69.39
BOILER 1
--------
Resecure loose pipe insulation; clean burner pan and compartment; lag down
boiler pump: ......................................................... $352.03
EF-1
----
Replace belt and motor bearing:....................................... $ 521.25
EF-3
----
Operating normally at this time.
EF-4
----
Replace motor......................................................... $ 659.99
EF-5
----
Operating normally at this time.
EF-6
----
No power to motor. Visually appears to be okay--will need power in order to
check.
EF-7
----
Replace motor......................................................... $609.05
EF-8
----
No power to motor--cannot verify operation.
<PAGE>
National Semiconductor/Apple 1
Inspection Report
3565 Monroe, Santa Clara
May I995
--------------------------------------------------------------------------------
EF-9
----
Replace motor:.......................................................... $609.05
EF-10
-----
No power to motor. Visually appears to be okay--will need power in order to
check.
EF-11
-----
Was used for chamber. No longer in building. Need to resecure exhaust stack:
........................................................................ $148.00
EF-13
-----
Replace motor:.......................................................... $609.05
EF-14
-----
No power to motor. Visually appears okay.
EF-15
-----
Operating normally at this time.
EF-16
-----
Replace motor:.......................................................... $609.05
EF-17
-----
Replace motor:.......................................................... $609.05
AIR STATION
-----------
Degrease and clean air compressor, tighten all fittings, clean air tank auto
drain, reconnect drain piping, remove and plug leaking manual
drain:.................................................................. $375.26
Note: Air compressor is oversized for application.
TIME CLOCK PANEL
----------------
Replace four burned out indicator lights:............................... $180.33
EXHAUST DUCT
------------
Need to cap duct where fan was removed:................................. $251.08
<PAGE>
National Semiconductor/Apple 1
Inspection Report
3565 Monroe, Santa Clara
May 1995
--------------------------------------------------------------------------------
FUME HOOD EXHAUST
-----------------
Replace belt:.......................................................... $41.29
In general there is miscellaneous abandoned electrical on roof for removed
equipment.
Materials will need to be ordered. Please allow 3-5 days for availability upon
authorization.
* Should further repairs be diagnosed as needed, they will be quoted as
discovered.
** Refrigerant leak repairs do not include replacement of components except as
noted. Should a component be diagnosed as needed, it will be quoted.
If you have any questions or I can be of assistance, please give me a call.
Sincerely,
/s/ Diana Rossi
Diana Rossi:
Authorized by: __________________________________ Date: ________________
P.O. #: ________________________
<PAGE>
[MAP OF MONROE STREET BUILDINGS APPEARS HERE]
EXHIBIT B
<PAGE>
FOURTH AMENDMENT TO LEASE
This Fourth Amendment to Lease is made and entered into as of March 29,
1995, by and between MPJ, a California general partnership ("Landlord") and
APPLE COMPUTER, INC., a California corporation ("Tenant") with reference to the
following facts, understandings and intentions:
A. Landlord and Tenant entered into a Lease Agreement dated as of June 1,
1988 covering certain premises located in the City of Santa Clara, California
(the "Original Lease"). The Original Lease was amended by a First Amendment to
Lease dated as of May 31, 1989 (the "First Amendment"), by a Second Amendment to
Lease dated as of November 9, 1989 (the "Second Amendment") and a Third
Amendment to Lease dated as of February 8, 1995 (the "Third Amendment"). The
Original Lease as amended by the First Amendment, Second Amendment and Third
Amendment is hereinafter referred to as the "Lease".
B. The parties desire to amend the Third Amendment in its entirety and
replace it with this Fourth Amendment.
C. The term of the Lease is currently scheduled to end on December 31,
1995.
D. The parties desire to amend the Lease by, among other things,
extending the term of the Lease for seven (7) years, and deleting Building A
from the Premises covered by Lease effective as of January 1, 1996.
NOW, THEREFORE, Landlord and Tenant hereby agree that the Lease is amended
as follows:
1. The Third Amendment is deleted in its entirety and shall no longer
have any force or effect. This Fourth Amendment supersedes and replaces the
Third Amendment.
2. The term of the Lease is hereby extended for an additional period of
seven (7) years beginning on January 1, 1996 and ending on December 31, 2002.
3. Effective as of January 1, 1996, Building A (as shown on the Site Plan
attached to the Original Lease as Exhibit "A") is deleted from the Premises
covered by the Lease. Accordingly, from and after January 1, 1996, the Premises
shall include only Buildings B, C and D. The Lease shall remain in full force
and effect with respect to Building A through and including December 31, 1995.
On or before December 31, 1995, Tenant shall surrender Building A to Landlord in
the condition required by Section 7.2.D of the Original Lease and Paragraphs 7
and 8 of the First Amendment.
1
<PAGE>
4. The Base Monthly Rent payable by Tenant to Landlord pursuant to
Section 3.1 of the Lease during the period January 1, 1996 through December 31,
2002, shall be the following respective sums during the following respective
time periods:
TIME PERIOD BASE MONTHLY RENT
----------- -----------------
1/01/96 - 6/30/98
7/01/98 - 12/31/2000
1/01/2001 - 12/31/2002
5. Effective as of January 1, 1996, Tenant's Pro Rata Share as defined in
Section 3.4 of the Lease, shall be:
218,816/275,264 or 79.49%
6. Section 17.1 of the Lease is deleted in its entirety.
7. The first sentence of the second grammatical paragraph of Section 18.1
of the Lease is deleted and the following language is substituted in lieu
thereof:
Tenant shall have the nonexclusive right to use
seventy-nine percent (79%) of all parking spaces
located in the Outside Area. If Landlord or Tenant
requests, Landlord shall designate Seventy-nine
percent (79%) of the parking spaces located in the
Outside Area for Tenant's exclusive use.
8. Section 19 of the Lease is deleted in its entirety.
9. The first and second grammatical paragraphs of Section 6 of the Second
Amendment are amended in their entirety to read as follows:
Tenant is hereby granted one additional option to
extend the term of this Lease for one period of three
(3) years (the "Second Option Term"), such extension
to be on the same terms and conditions as the initial
term, except for the Base Monthly Rent which shall be
determined as provided below. It shall be a condition
precedent to the exercise of the Second Option Term
that Tenant shall not be in default under this Lease
at the time of exercise of such Second Option. If
Tenant elects to exercise the Second Option, Tenant
shall exercise said Second Option only by written
notice delivered to Landlord not later than June 30,
2002. There shall be no further options to extend the
term of this Lease at
2
<PAGE>
the end of the Second Option Term.
The Base Monthly Rent payable during the Second
Option Term shall be (i) the greater of ninety-two
(92%) of the fair market rental for the premises, or
(ii)
10. At any time on or after January 1, 2000, Tenant shall have the right
to terminate this Lease only by doing all of the following:
(a) Giving Landlord, at any time on or after January 1, 1999 but at
least twelve (12) months prior to Tenant's desired early termination date,
written notice ("Tenant's Early Termination Notice") stating that Tenant elects
to terminate the term of this Lease pursuant to this Paragraph l0 and specifying
Tenant's desired early termination date (the "Early Termination Date"), which
date must be at least twelve (12) months following Landlord's receipt of
Tenant's Early Termination Notice and shall in no event be earlier than January
1, 2000; and
(b) Paying to Landlord, concurrently with the Early Termination Date,
a cash sum equal to ___________ of all of the Base Monthly Rent and Additional
Rent that would have been payable under the Lease from and after the Early
Termination Date through December 31, 2002 discounted to its then present
value at a discount rate equal to the Bank of America Reference Rate in effect
at the time of the Early Termination Date. (For purposes of determining the
Additional Rent that would have been payable after the Early Termination Date,
it shall be assumed that the Additional Rent would have increased after the
Early Termination Date at the rate of three percent (3%) per year). This
payment shall be in addition to, and shall not be credited against, the Base
Monthly Rent and Additional Rent due under this Lease prior to the Early
Termination Date.
During the twelve (12) month or more period of time between the date Tenant
exercises its early termination right and the Early Termination Date, Tenant
shall continue to be obligated to perform all of its obligations under the
Lease, including payment of all Base Monthly Rent and Additional Rent accruing
through and including the Early Termination Date.
11. Except as modified herein, the Lease shall remain unamended and in
full force and effect.
[DOCUMENT CONTINUES]
3
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this Fourth Amendment
to Lease as of the day and year first above-written.
LENDER: TENANT:
MPJ, APPLE COMPUTER, INC.,
a California general a California corporation
partnership
By: /s/ James D. Mair By: /s/ Joseph A. Graziano
--------------------------- ---------------------------------
JAMES D. MAIR
Its: General Partner Name: JOSEPH A. GRAZIANO
-------------------------- -------------------------------
By: /s/ W. Leslie Pelio Title: Executive Vice President and
Chief Financial Officer
--------------------------- ------------------------------
W. LESLIE PELIO 4/4/95
------------------------------
Its: General Partner
--------------------------
By: /s/ William F. Jury
---------------------------
WILLIAM F. JURY
Its: General Partner
--------------------------
4
<PAGE>
THIRD AMENDMENT TO LEASE
This Third Amendment to Lease is made and entered into as of February 8,
1995, by and between MPJ, a California general partnership ("Landlord") and
APPLE COMPUTER, INC., a California corporation ("Tenant") with reference to the
following facts, understandings and intentions:
A. Landlord and Tenant entered into a Lease Agreement dated as of June l,
1988 covering certain premises located in the City of Santa Clara, California
(the "Original Lease"). The Original Lease was amended by a First Amendment to
Lease dated as of May 31, 1989 (the "First Amendment") and by a Second Amendment
to Lease dated as of November 9, 1989 (the "Second Amendment"). The Original
Lease as amended by the First Amendment and Second Amendment is hereinafter
referred to as the "Lease".
B. The term of the Lease is currently scheduled to end on December 31,
1995.
C. The parties desire to amend the Lease by, among other things,
extending the term of the Lease for seven (7) years, and deleting Buildings A
and D from the Premises covered by Lease effective as of January 1, 1996.
NOW, THEREFORE, Landlord and Tenant hereby agree that the Lease is amended
as follows:
1. The term of the Lease is hereby extended for an additional period of
seven (7) years beginning on January 1, 1996 and ending on December 31, 2002.
2. Effective as of January 1, 1996, Buildings A and D (as shown on the
Site Plan attached to the Original Lease as Exhibit "A") are deleted from the
Premises covered by the Lease. Accordingly, from and after January 1, 1996, the
Premises shall include only Buildings B and C. The Lease shall remain in full
force and effect with respect to Buildings A and D through and including
December 31, 1995. On or before December 31, 1995, Tenant shall surrender
Buildings A and D to Landlord in the condition required by Section 7.2.D of the
Original Lease and Paragraphs 7 and 8 of the First Amendment.
3. The Base Monthly Rent payable by Tenant to Landlord pursuant to
Section 3.1 of the Lease during the period January 1, 1996 through December 31,
2002, shall be the following respective sums during the following respective
time periods:
1
<PAGE>
TIME PERIOD BASE MONTHLY RENT
----------- -----------------
1/01/96 - 6/30/98
7/01/98 - 12/31/2000
1/01/2001 - 12/31/2002
4. Effective as of January 1, 1996, Tenant's Pro Rata Share as defined in
Section 3.4 of the Lease, shall be:
166,352/275,264 or 60.43%
5. Section 17.1 of the Lease is deleted in its entirety.
6. The first sentence of the second grammatical paragraph of Section 18.1
of the Lease is deleted and the following language is substituted in lieu
thereof:
Tenant shall have the nonexclusive right to use
sixty percent (60%) of all parking spaces located in
the Outside Area. If Landlord or Tenant requests,
Landlord shall designate sixty percent (60%) of the
parking spaces located in the Outside Area for
Tenant's exclusive use.
7. Section 19 of the Lease is deleted in its entirety.
8. The first and second grammatical paragraphs of Section 6 of the Second
Amendment are amended in their entirety to read as follows:
Tenant is hereby granted one additional option to
extend the term of this Lease for one period of three
(3) years (the "Second Option Term"), such extension
to be on the same terms and conditions as the initial
term, except for the Base Monthly Rent which shall be
determined as provided below. It shall be a condition
precedent to the exercise of the Second Option Term
that Tenant shall not be in default under this Lease
at the time of exercise of such Second Option. If
Tenant elects to exercise the Second Option, Tenant
shall exercise said Second Option only by written
notice delivered to Landlord not later than June 30,
2002. There shall be no further options to extend the
term of this Lease at the end of the Second Option
Term.
The Base Monthly Rent payable during the Second
Option Term shall be (i) the greater of the fair
market rental for
2
<PAGE>
the premises, or (ii)
9. At any time on or after January 1, 2000, Tenant shall have the right
to terminate this Lease only by doing all of the following:
(a) Giving Landlord, at any time on or after January 1, 1999 but at
least twelve (12) months prior to Tenant's desired early termination date,
written notice ("Tenant's Early Termination Notice") stating that Tenant elects
to terminate the term of this Lease pursuant to this Paragraph 9 and specifying
Tenant's desired early termination date (the "Early Termination Date"), which
date must be at least twelve (12) months following Landlord's receipt of
Tenant's Early Termination Notice and shall in no event be earlier than January
1, 2000; and
(b) Paying to Landlord, concurrently with the Early Termination Date,
a cash sum equal to ___________ of all of the Base Monthly Rent and Additional
Rent that would have been payable under the Lease from and after the Early
Termination Date through December 31, 2002 discounted to its then present value
at a discount rate equal to the Bank of America Reference Rate in effect at the
time of the Early Termination Date. (For purposes of determining the Additional
Rent that would have been payable after the Early Termination Date, it shall be
assumed that the Additional Rent would have increased, after the Early
Termination Date at the rate of three percent (3%) per year). This payment shall
be in addition to, and shall not be credited against, the Base Monthly Rent and
Additional Rent due under this Lease prior to the Early Termination Date.
During the twelve (12) month or more period of time between the date Tenant
exercises its early termination right and the Early Termination Date, Tenant
shall continue to be obligated to perform all of its obligations under the
Lease, including payment of all Base Monthly Rent and Additional Rent accruing
through and including the Early Termination Date.
10. If Landlord from time to time shall receive a bona fide proposal or
letter of intent (the "Third Party Proposal") from a third party to lease (i)
all or any portion of Building D, or (ii) all or any portion of Building D
together with all or any portion of Building A, and if Landlord is willing to
accept such Third Party Proposal, Landlord shall notify Tenant in writing
("Landlord's Offer Notice") of the following basic business terms on which the
Landlord is willing to lease such space (collectively referred to herein as
"Basic Business Terms"):
(a) The description of the space to be leased (the "Offered Space");
3
<PAGE>
(b) The term of the proposed lease;
(c) The rent for the initial term or the formula to be used to
determine such rent;
(d) Any option or options to extend (including the rent to be charged
during the extension periods);
(e) The contribution, if any, Landlord is willing to make toward the
cost of any tenant improvements; and
(f) Any other material business terms Landlord elects to specify.
Provided that (i) Tenant is not in default under this Lease, (ii) this
Lease is in full force and effect, and (iii) Tenant has not assigned this Lease
to an unaffiliated third party and is in physical occupancy of at least seventy-
five percent (75%) of the area of the Premises, then Tenant shall have the
right, for a period of ten (10) business days after Tenant's receipt of
Landlord's Offer Notice, to lease the Offered Space on the Basic Business Terms
contained in Landlord's Offer Notice and otherwise on the terms and conditions
contained in this Lease, by giving written notice of such election prior to the
expiration of such ten (10) business day period. Upon the giving of such notice,
Tenant shall become obligated to lease the Offered Space and Landlord shall be
obligated to lease the Offered Space to Tenant on the Basic Business Terms
contained in Landlord's Offer Notice and otherwise on the terms and conditions
of this Lease. Landlord and Tenant shall promptly execute an amendment to this
Lease reflecting (i) the addition of the Offered Space as part of the Premises
and (ii) the Basic Business Terms applicable to the Offered Space. (The parties
understand that the term of the Lease as it applies to the Offered Space may be
longer or shorter than the term of the Lease with respect to the remainder of
the Premises).
If Tenant does not deliver to Landlord its written election to lease the
Offered Space, within said ten (10) business day election period, or if Tenant
does not execute and deliver to Tenant the Amendment to Lease within ten (10)
business days after Tenant's receipt thereof, then Landlord shall thereafter
have the right, for a period of six (6) months, to lease the Offered Space to
any third party on substantially the same Basis Business Terms as are set forth
in Landlord's Offer Notice and on such form of lease as Landlord chooses. If the
monetary terms of a third party lease (i.e., rent and Landlord's tenant
improvement contribution) do not deviate by more than five percent (5%) from
those Basic Business Terms specified in Landlord's Offer Notice, the Basic
Business Terms of third party lease shall be deemed substantially the same as
the Basic Business Terms specified in Landlord's Offer Notice. If Landlord does
not enter into a lease with a third party within said six (6) month period,
Tenant's rights under this Paragraph 10
4
<PAGE>
shall revive.
The provisions of this Paragraph 10 shall terminate upon (i) the expiration
or earlier termination of this Lease, or (ii) any assignment by Tenant of its
interest in this Lease to any unaffiliated third party or the subletting by
Tenant of twenty-five percent (25%) or more of the Premises, or (iii) Tenant's
failure to exercise its right of first refusal to lease granted herein at its
first opportunity to do so (unless Landlord does not enter into a lease with a
third party within the six (6) month period described above).
11. Except as modified herein, the Lease shall remain unamended and in
full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Third Amendment
to Lease as of the day and year first above written.
LANDLORD: TENANT:
MPJ, APPLE COMPUTER, INC.,
a California general a California corporation
partnership
By: /s/ James D. Mair By: /s/ Joseph A. Graziano
-------------------------- --------------------------------
JAMES D. MAIR
Its: General Partner Name: JOSEPH A. GRAZIANO
------------------------- ------------------------------
By: /s/ William F. Jury Title: Executive Vice President and
Chief Financial Officer
-------------------------- -----------------------------
WILLIAM F. JURY 2-27-95
-----------------------------
Its: General Partner
-------------------------
By: /s/ W. Leslie Pelio
--------------------------
W. LESLIE PELIO
Its: General Partner
-------------------------
5
<PAGE>
SECOND AMENDMENT TO LEASE
-------------------------
This Second Amendment to Lease is made and entered into as of November 9, 1989
by and between MPJ, a California general partnership (hereinafter "Landlord"),
and APPLE COMPUTER, INC., a California corporation (hereinafter "Tenant"),
whereby both parties agree to amend the Lease as follows:
1. The additional premises of 3515 and 3525 Monroe Street, Santa Clara,
California will be added to the lease premises which are presently occupied
by Altera Corporation and should be added at the termination date of Altera
Corporation's lease and its vacancy of the premises, which is anticipated
to be March 1, 1990. With the addition of this space, the Tenant's Pro Rata
Share, as defined In Paragraph 3.4 of the Lease, shall be One Hundred
Percent (100%) and the Outside Area, as defined in Paragraph 18, shall be
amended to One Hundred Percent (100%) of the total Outside Area. Tenant
shall accept the additional premises on an "as is" basis and Landlord shall
not be obligated to pay for additional tenant improvements.
2. The additional rent for the expanded space shall be
from the termination date through June 30, 1991 _________
July 1, 1991 through December 31, 1992.
3. Tenant hereby exercises its Option to Extend, pursuant to Paragraph 17 of
the Lease, for the period January 1, 1993 through December 31, 1995
(hereinafter "Option Term"), except for rent.
4. The monthly installment of rent during the Option Term shall be
5. This Second Amendment supersedes any provisions contained in Paragraph 19
of the Lease.
6. Tenant is hereby granted one additional option to extend the term of this
Lease for one period of three (3) years (the "Second Option Term"), such
extension to be on the same terms and conditions as the initial term,
except for the Base Monthly Rent which shall be determined as provided
below. It shall be a condition precedent to the exercise of the Second
Option Term that Tenant shall not be in default under this Lease at the
time of exercise of such Second Option. If Tenant elects to exercise the
Second Option, Tenant shall exercise said Second Option only by written
notice delivered to Landlord at least one hundred and twenty (120) days
prior to the expiration of the Option Term of this Lease. There shall be no
further options to extend the term of this Lease at the end of the Second
Option Term.
Monthly installment of base rent payable during the Second Option Term
shall be (i) the
the fair market rental for the premises, or (ii)
month.
Promptly following the exercise of the Second Option by Tenant, the parties
shall endeavor to agree upon the Fair Market Rental of the Premises as of
the first day of the Second Option Term in question. In determining the
Fair Market Rental for the Premises, the Premises shall be compared only to
buildings of a similar quality and size and with similar improvements and
amenities in the Santa Clara/Cupertino area. If, within fifteen (15) days
after exercise of any Second Option, the parties cannot agree upon the Fair
Market Rental for the Premises as of the first day of the Second Option
Term in question, the parties shall submit the matter to binding appraisal
in accordance with the following procedures:
(i) Within thirty (30) days after exercise of the Second Option, the
parties shall either jointly appoint an appraiser for the purpose of
determining Fair Market Rental, or failing that, separately appoint a
disinterested appraiser. No person shall be appointed an appraiser
unless he has at least five (5) years experience in appraising major
office and R&D properties in the Santa Clara/Cupertino area and is a
member of a recognized society of real estate appraisers.
(ii) If, within thirty (30) days after their appointment, the two
appraisers agree on the Fair Market Rental for the Premises as of the
first day of the Second Option Term in question, that value shall be
binding and conclusive upon the parties. If the two appraisers thus
appointed cannot so agree, they shall appoint a third disinterested
appraiser having like qualifications. If, within thirty (30) days
after the appointment of the third appraiser, a majority of the
appraisers agree on the Fair Market Rental of the Premises as of the
first day of the Second Option
<PAGE>
Term in question, that value shall be binding and conclusive upon the
parties. If, within thirty (30) days after the appointment of the
third appraiser, a majority of the appraisers cannot so agree, the
three appraisers shall each submit their independent appraisals to
the parties; the appraisal farthest from the median of the three
appraisals shall be disregarded, and the mean average of the
remaining two appraisals shall be deemed the Fair Market Rental of
the Premises as of the first day of the Second Option Term in
question, and shall be binding and conclusive upon the parties.
(iii) Each party shall pay the fees and expenses of the appraiser appointed
by it and shall share equally the fees and expenses of the third
appraiser.
(iv) If the two appraisers appointed by the parties cannot agree on the
appointment of the third appraiser, they shall give notice of such
failure to the parties. If the parties fail to agree upon the
selection of a third appraiser within ten (10) days after the
appraisers give such notice, either of the parties may, upon notice
to the other, apply for such appointment to the presiding judge of
the Superior Court of Santa Clara County, California.
All other terms and conditions of the Lease shall remain the same.
LANDLORD: MPJ, a California TENANT: APPLE COMPUTER, INC., a
general partnership California corporation
By: /s/ James D. Mair By: /s/ Joseph A. Graziano
-------------------------- --------------------------------
James D. Mair JOSEPH A. GRAZIANO
Its: General Partner Its: Sr. Vice President
and Chief Financial Officer
------------------------- -------------------------------
Date: 11-20-89 Date: 11-17-89
------------------------ ------------------------------
<PAGE>
AMENDMENT TO LEASE
(Microwave Dish)
THIS FIRST AMENDMENT TO LEASE ("Amendment") is made as of May 31, 1989, by
and between MPJ, a California general partnership ("Landlord") and APPLE
COMPUTER, INC., a California corporation ("Tenant").
RECITALS
--------
A. Landlord and Tenant entered into a certain lease (the "Lease"), dated
for reference purposes June 1, 1988, of three (3) buildings located at 3565
Monroe Avenue, Santa Clara, California ("Monroe 1"), 3585 Monroe Avenue, Santa
Clara, California ("Monroe 2"), and 3535 Monroe Avenue, Santa Clara, California
("Monroe 3"), (collectively, the "Premises").
B. Tenant has requested the right to install microwave antenna dishes on
the roofs of the Premises.
C. Landlord and Tenant have agreed to amend the Lease to provide for such
microwave antenna dishes, in accordance with the terms and conditions of this
Amendment.
NOW THEREFORE, in consideration of the foregoing recitals and the mutual
covenants provided herein, the parties hereto agree as follows:
1. Unless otherwise indicated, all capitalized terms shall have the
meaning set forth in the Lease.
2. Landlord hereby grants to Tenant for the term of the Lease, as it may
be extended, the right, at Tenant's cost, to install, maintain, operate,
replace, repair and remove (collectively, "Construct" or the "Construction")
microwave antenna dishes together with all cable, wiring, conduits and related
equipment, (collectively, "Antenna"), on the roof ("Roof") of the Premises, such
microwave antenna dishes to be located as shown on Exhibit A attached hereto and
---------
incorporated herein.
3. Tenant agrees to indemnify and hold Landlord harmless from any claim
resulting from property damage or personal injury arising in connection with the
Construction and not covered by the insurance required to be carried by Tenant
under the Lease. Tenant agrees to carry insurance to cover such liability and
property damage. In no event, however, shall Tenant be liable for consequential
damages or for any damage to the Roof or Premises or injury caused by any person
or entity other
1
<PAGE>
than Tenant, its agents, employees or contractors.
4. Tenant is not obligated to pay any additional rent in connection with
the Antenna.
5. Landlord shall allow Tenant, at Tenant's cost, to hook-up the Antenna
to the Premises' electrical system.
6. The Antenna shall at all times remain the property of Tenant and
Tenant shall have the right to remove it at any time, subject to the terms and
conditions of this Amendment.
7. Tenant shall remove the Antenna at the expiration or earlier
termination of the Lease.
8. Tenant shall repair any damage caused to the Roof in connection with
any such installation and removal to the condition of the Roof immediately prior
to such damage, subject to damage caused by casualty or condemnation.
9. Tenant and its agents, employees and contractors shall have reasonable
access to the Roof to carry out the Construction.
10. Except as otherwise provided herein, the Lease shall remain in full
force and effect.
The parties hereto have entered into this Amendment effective as of the
date first above written:
LANDLORD: TENANT:
-------- ------
MPJ APPLE COMPUTER, INC.,
a, California general partnership a California corporation
By: /s/ James D. Mair By: /s/ Robert Hecox
------------------------- ---------------------------
ROBERT A. HECOX
Its: General Partner Its: Real Estate Manager
------------------------ --------------------------
2
<PAGE>
EXHIBIT B
MICROWAVE SITE SURVEY
MONICA SCHRADLE (408) 974-6304
--------------------------------------------------------------------
NAME PHONE
APPLE COMPUTER 3585 MONROE
------------------------------------------------------
ADDRESS
SANTA CLARA CA.
---------------------------------- ----------------
CITY STATE ZIP
DATE REQUESTED 4/19/89 AM 9:30 PM
---------------- --------- --------------
COMPLETED 5/2/89 AM PM 1:00
---------------------------------------------- ---
LEGEND (SHOW IN SKETCH)
[SKETCH APPEARS HERE]
[FLOOR PLAN OF MICROWAVE SITE SURVEY APPEARS HERE]
ii
<PAGE>
[LETTERHEAD OF LANCE INDUSTRIES APPEARS HERE]
EXHIBIT B
The undisputed leader in MDS/ITFS reception dedicated to the manufacture of FINE
QUALITY reception products for over 30 years.
MICROWAVE 3 FT., 4 FT. OR 6 FT. DISH PARABOLICS - SECTION PARABOLICS FOR MDS
2150 TO 2162 MHZ OR NEW ITFS/MMDS - 2500-2690 MHZ
________________________________________________________________________________
3 Ft., 4 Ft. or 6 Ft. DISH PARABOLICS
Rugged dishes for Highest Gain - lowest
wind loading. Vertical or Horizontal
polarization with Dual Mode - Multi
channel capability in 45 degrees mount
position.
Protected against corrosion.
[PHOTO OF FEATURES: [PHOTO OF
MODEL 28 . MDS to ITFS Multi Channel - simple dipole MODEL 72
MICROWAVE change MICROWAVE
DISH PARABOLIC . Horizontal or Vertical Polarization DISH PARABOLIC
APPEARS HERE] . Dual or Multi Channel Polarization - 45 APPEARS HERE]
degrees mounting
. 4 to 8 Channel Ready
. Lowest Wind Loading
. Electronically Welded Pressure Tested Dipole
. All models include RG8 Cable with N Connector
. Focus adjustable for gain control
(except 6 Ft.)
. Compatible with all down converters
<TABLE>
<CAPTION>
SPECIFICATIONS MDS 2150-2162 MHz ITFS/MMDS 2500-2690 MHz
---------------------------------------------------- ----------------------------------------------------
<S> <C> <C> <C> <S> <C> <C> <C>
DISH SIZE 3 Ft. 4 Ft. 6 Ft. DISH SIZE 3 Ft. 4 Ft. 6 Ft.
---------------------------------------------------- ----------------------------------------------------
MDS MODEL 2128 2132 2172 ITFS/MMDS MODEL 2528 2532 2572
---------------------------------------------------- ----------------------------------------------------
FRONT-TO-BACK RATIO 25dB 30dB 36dB FRONT-TO-BACK RATIO 25dB 30dB 36dB
---------------------------------------------------- ----------------------------------------------------
IMPEDANCE 50 ohms 50 ohms 50 ohms IMPEDANCE 50 ohms 50 ohms 50 ohms
---------------------------------------------------- ----------------------------------------------------
BEAM WIDTH 10 degrees 10 degrees 8 degrees BEAM WIDTH 10 degrees 10 degrees 8 degrees
---------------------------------------------------- ----------------------------------------------------
</TABLE>
________________________________________________________________________________
SECTION PARABOLICS FEATURES:
The original high performance . Horizontal or Vertical
MDS unit. Wire formed closed Polarization
loop design for maximum . Dual or Multi Channel
strength with lowest wind Polarization - 45 degrees
loading. Mounts easily for mounting
Vertical or Horizontal . Lowest Wind Loading
polarization, and Dual Mode- . Electronically Welded
45 degrees Mounting provides Pressure Tested Dipole
Multi channel operation. . Includes RG8 Cable with N
[PHOTO OF Connector
MODEL 24 Des. Pats. 2269009, 268343 . Focus adjustable for gain
MICROWAVE Lic. under U.S. Pat. 4259143 control
SECTION Other Pats. Pending . Compatible with all down
PARABOLIC converters
APPEARS HERE]
SPECIFICATIONS
<TABLE>
<CAPTION>
<S> <C>
MDS 2150-2162 MHz ITFS/MMDS 2500-2690 MHz
---------------------------- -----------------------------
MDS MODEL 2124 ITFS/MMDS MODEL 2524
---------------------------- -----------------------------
FRONT-TO-BACK RATIO 20dB FRONT-TO-BACK RATIO 20dB
---------------------------- -----------------------------
IMPEDANCE 50 ohms IMPEDANCE 50 ohms
---------------------------- -----------------------------
BEAM WIDTH 20 BEAM WIDTH 20
---------------------------- -----------------------------
</TABLE>
________________________________________________________________________________
Independent test range results: Gain figures, Polar Patterns
------------------ and VSWRS available upon request.
CONVERSION KIT
All existing Lance
MDS Units in field
use will receive [CHART OF FREQUENCY/CHANNEL DESIGNATION APPEARS HERE]
ITFS/MDS channels
with a dipole
conversion kit.
Information avail-
able on request.
------------------
[LETTERHEAD OF LANCE INDUSTRIES APPEARS HERE]
iii
<PAGE>
[LETTERHEAD OF LANCE INDUSTRIES APPEARS HERE]
MICROWAVE SECTION PARABOLICS -
CORNER REFLECTOR "THE ANGLE" FOR
MDS 2150-2162 MHz OR NEW ITFS/MMDS
2500-2690 MHz
--------------------------------------------------------------------------------
SECTION PARABOLICS: Two models for Urban-Suburban
Reception, with even lower wind loading but with the
maximum reflector screen effect due to the unique
[PHOTO OF MODEL 21 formed wire closed loop design. Easy Horizontal or
MICROWAVE SECTION Vertical Mounting, with quick changeover to 45
PARABOLIC APPEARS degrees Dual Mode Mounting (requires only 2 bolts),
HERE] for Multi Channel reception.
SPECIFICATIONS
<TABLE>
<CAPTION>
MDS 2150-2162 MHz ITFS/MMDS 2500-2690 MHz
------------------------------------- --------------------------------------
<S> <C> <S> <C>
MDS MODEL 2121 ITFS/MMDS MODEL 2521
------------------------------------- --------------------------------------
FRONT-TO-BACK RATIO 20dB FRONT-TO-BACK RATIO 20dB
------------------------------------- --------------------------------------
IMPEDANCE 50 ohms IMPEDANCE 50 ohms
------------------------------------- --------------------------------------
BEAM WIDTH 20 degrees BEAM WIDTH 20 degrees
------------------------------------- --------------------------------------
</TABLE>
[PHOTO OF MODEL 18 Both units are built with the same attention to
MICROWAVE SECTION detail as all other Lance MDS Units. Electronically
PARABOLIC APPEARS welded pressure tested dipole. Compatability with
HERE] all down converters. Simple Dipole change for
MDS/ITFS operation, includes RG8 Cable with N
Connector.
SPECIFICATIONS
<TABLE>
<CAPTION>
MDS 2150-2162 MHz ITFS/MMDS 2500-2690 MHz
------------------------------------- --------------------------------------
<S> <C> <S> <C>
MDS MODEL 2118 ITFS/MMDS MODEL 2518
------------------------------------- --------------------------------------
FRONT-TO-BACK RATIO 20dB FRONT-TO-BACK RATIO 20dB
------------------------------------- --------------------------------------
IMPEDANCE 50 ohms IMPEDANCE 50 ohms
------------------------------------- --------------------------------------
BEAM WIDTH 25 degrees BEAM WIDTH 25 degrees
------------------------------------- --------------------------------------
</TABLE>
--------------------------------------------------------------------------------
[PHOTO OF MODEL 12 "THE ANGLE" Precision Stamped Aluminum forms the
MICROWAVE SECTION ANGLES' REFLECTOR for signal control - minimizes
PARABOLIC APPEARS unwanted "bounce" signals (ghosting) and creates the
HERE] ANGLES' High Front to Back Ratio.
SPECIFICATIONS
<TABLE>
<CAPTION>
MDS 2150-2162 MHz ITFS/MMDS 2500-2690 MHz
------------------------------------- --------------------------------------
<S> <C> <S> <C>
MDS MODEL 2112 ITFS/MMDS MODEL 2512
------------------------------------- --------------------------------------
FRONT-TO-BACK RATIO 20dB FRONT-TO-BACK RATIO 20dB
------------------------------------- --------------------------------------
IMPEDANCE 50 ohms IMPEDANCE 50 ohms
------------------------------------- --------------------------------------
BEAM WIDTH 35 degrees BEAM WIDTH 35 degrees
------------------------------------- --------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Shipping Information MDS/ITFS Units
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MDS MODEL 2112 2118 2121 2124 2128
------------------------------------------------------------------------------------------------------------------------------------
ITFS/MMDS MODEL 2512 2518 2521 2524 2528
------------------------------------------------------------------------------------------------------------------------------------
Weight, ea. 1.75 lbs. 3.5 lbs. 5 lbs. 7.5 lbs. 10.0 lbs.
------------------------------------------------------------------------------------------------------------------------------------
Std. Pack 10 10 10 5 5
------------------------------------------------------------------------------------------------------------------------------------
Carton Size 21 1/2 x 19 x 13 1/2 21 1/2 x 19 x 13 1/2 35 x 18 3/4 x 16 35 x 27 x 12 3/4 38 x 37 1/8 x 13 3/4
------------------------------------------------------------------------------------------------------------------------------------
Shipping Wt., Ctn. 20 lbs. 38 lbs. 56 lbs. 43 lbs. 59 lbs.
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
---------------------------------------------------------------
<S> <C> <C>
MDS MODEL 2132 2172
---------------------------------------------------------------
ITFS/MMDS MODEL 2532 2572
---------------------------------------------------------------
Weight, ea. 16.0 lbs. 40.5 lbs.
---------------------------------------------------------------
Std. Pack 3 1
---------------------------------------------------------------
Carton Size 50 3/4 x 48 x 16 74 x 38 x 13 3/4
---------------------------------------------------------------
Shipping Wt., Ctn. 59 lbs. 52 lbs.
---------------------------------------------------------------
</TABLE>
Specifications subject to change without notice.
Des. Pats. 269009, 268343 Lic. under U.S. Pat. 4259143 Other Pats. Pending
[LETTERHEAD OF LANCE INDUSTRIES APPEARS HERE]
iv
<PAGE>
Santa Clara Land Title Co. 9911628
Accommodation Only
Accommodation No. Sp 9-1646-LZ Recorded at the request of
SANTA CLARA LAND TITLE CO.
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO: 8:00
NOV 14 1988 A.M.
Wilson, Sonsini, Goodrich & Rosati
Two Palo Alto Square, Suite 900 LAURIE KANE, Recorder
Palo Alto, California 94306 Santa Clara County, Official Records
Attn: Real Estate Department/SLW K754 Page 1507
--------------------------------------------------------------------------------
MEMORANDUM OF LEASE
-------------------
This Memorandum of Lease ("Memorandum") is entered into as of June 1, 1988,
by and between MPJ, a California general partnership ("Landlord"), and APPLE
COMPUTER, INC., a California corporation ("Tenant").
Landlord and Tenant hereby state the following for recording:
1. Landlord leases to Tenant, and Tenant hereby leases from Landlord, a
portion of that certain real property located in the City of Santa Clara, County
of Santa Clara, more particularly described on Exhibit A attached hereto upon
the terms and conditions contained in that certain lease agreement dated for
reference purposes June 1, 1988 between Landlord and Tenant ("Lease").
2. The Lease shall be for a term beginning on the Commencement Date as
that term is defined in the Lease and terminating December 31, 1992, subject to
one option to renew for an additional three years pursuant to Section 17 of the
Lease.
3. This Memorandum shall incorporate herein all of the terms and
provisions of the Lease as though fully set forth herein.
4. This Memorandum is solely for recording purposes and shall not be
construed to alter, modify, amend or supplement the Lease of which this is a
memorandum. If there is any inconsistency between this Memorandum and the
Lease, the Lease shall prevail.
LANDLORD: TENANT:
MPJ, a California APPLE COMPUTER, INC.,
general partnership a California corporation
By: [SIGNATURE ILLEGIBLE] By: /s/ Robert A. Hecox
--------------------------- ---------------------------
Robert A. Hecox
Its: General Partner Its: Real Estate Manager
-------------------------- --------------------------
<PAGE>
EXHIBIT "A"
K754 Page 1508
The land referred to herein is described as follows:
All that certain real property situate in the City of Santa Clara, County of
Santa Clara, State of California, being a portion of that certain 24.740 acre
parcel as shown on the certain Record of Survey filed in Book 447 of Maps at
Page 33, Santa Clara County Records, described as follows:
BEGINNING at the Northwest corner of said 24.740 acre parcel; thence from said
POINT OF BEGINNING, along the Northerly line of said 24.740 acre parcel N. 89
degrees 25' 00" E. 995.17 ft.; thence leaving said Northerly line S. 0 degrees
10' 00" W. 705.02 ft. to a point in the Southerly line of said 24.740 acre
parcel; thence along said Southerly line the following courses; S. 89 degrees
25' 00" W. 181.82 ft; South 2..00 ft.; and S. 89 degrees 25' 00" W. 760.70 ft.;
thence leaving said Southerly line, along a tangent curve to the right with a
radius of 50.00 ft., through a central angle of 90 degrees 34' 33" for an arc
length of 79.04 ft. to a point in the Westerly line of said 24.740 acre parcel;
thence along said Westerly line N. 0 degrees 00' 27" W. 656.49 ft. to the POINT
OF BEGINNING.
EXHIBIT "A"
<PAGE>
K754 Page 1509
STATE OF CALIFORNIA )
) ss.
COUNTY OF Santa Clara )
On this 8th day of November, in the year 1988, before me, the undersigned,
a Notary Public in and for said State, personally appeared James D. Mair,
personally known to me, to be the person who executed the within instrument as
one of the 3 General partners, on behalf of MPJ, the partnership therein named,
and acknowledged to me that the partnership executed it.
WITNESS my hand and official seal.
[SEAL APPEARS HERE]
/s/ Linda M. Vincent
_________________________
Notary Public
STATE OF CALIFORNIA )
) ss.
COUNTY OF SANTA CLARA )
On this 12th day of September, in the year 1988, before me, the
undersigned, a Notary Public in and for said State, personally appeared Robert
Hecox , personally known to me, to be the person who executed the within
instrument as Manager Real Estate, on behalf of Apple Computer, Inc., the
corporation therein named, and acknowledged to me that such corporation executed
the within instrument pursuant to its bylaws or to a resolution of its board of
directors.
WITNESS my hand and official seal.
/s/ Marla K. Summers
_________________________
Notary Public
[SEAL APPEARS HERE]
<PAGE>
LEASE AGREEMENT
---------------
This Lease is made and entered into as of June 1, 1988, by and between MPJ,
a California general partnership (hereinafter "Landlord") and APPLE COMPUTER,
INC., a California corporation (hereinafter "Tenant"). For and in consideration
of the rental and of the covenants and agreements hereinafter set forth to be
kept and performed by Tenant, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises hereinafter described for the term, at the
rental and subject to and upon all of the terms, covenants and agreements
hereinafter set forth.
1. PREMISES.
--------
1.1 Description. Landlord hereby leases to Tenant and Tenant hereby
-----------
rents from Landlord those certain premises (the "Premises") located in the City
of Santa Clara, County of Santa Clara, described and consisting of the
following:
A. Those certain buildings known as Building A,
Building B and Building C as shown on the site
plan (the "Site Plan") attached hereto as Exhibit
"A", which buildings contain a total of
approximately 222,800 sq. ft. of floor space with
Building A containing approximately 56,448 sq.
ft. of floor space, Building B containing
approximately 77,416 sq. ft. of floor space, and
Building C containing approximately 88,936 sq.
ft. of floor space (collectively, the
"Buildings"); and
B. The improvements to be constructed in the
Buildings by Tenant with the Improvement
Allowance provided by Landlord pursuant to the
provisions of Exhibit "B" attached hereto (the
"Improvements").
The Premises are located on a larger parcel of real property (the "Parcel") on
which are located a total of four (4) buildings together with driveways, parking
areas and landscaped areas, all as shown on the Site Plan (the "Complex").
Landlord acknowledges that the calculation of the number of square feet
stated in this Section 1.1 for each Building reflects a measurement of the
respective Buildings from outside wall to outside wall including the inset area
at each entryway and the inset area for glazing but excluding truck dock areas
and roof overhangs. In the event that Tenant reasonably determines that the
<PAGE>
actual number of square feet contained in any of the Buildings is less than the
number of square feet indicated in this Section 1.1, using the referenced method
of measurement, Tenant shall be entitled to an equitable adjustment of the Base
Monthly Rent stated in Section 3.1 at the rate of Seventy-Seven and One-Half
Cents ($0.775) per square foot.
1.2 Work of Improvement. Landlord shall deliver the Premises to
-------------------
Tenant in their existing condition, and broom-clean. Landlord shall not be
required to remodel or otherwise construct any improvements or make any
alterations to the Premises. Tenant acknowledges and understands that the
Premises were previously occupied by another lessee. Any alterations, additions
or improvements to the Premises required or desired by Tenant shall be
constructed by Tenant at its sole cost and expense, subject to the provisions of
Exhibit "B" and Section 7.3.
2. Term.
----
2.l Term. The term of this Lease shall commence, as to each of the
----
Buildings, on the following respective Commencement Dates:
Building Commencement Date
-------- -----------------
A July 15, 1988
B October 1, 1988
C January 1, 1989
The term of this Lease shall end four (4) years following the Commencement Date
for Building C, unless sooner terminated pursuant to the provisions of this
Lease.
2.2 Occupancy. Landlord shall permit Tenant to enter each of the
---------
Buildings on the following respective dates, for the purpose of commencing
Tenant's desired remodeling:
Building Occupancy Date
-------- -----------------
A June 1, 1988
B August 1, 1988
C October 1, 1988
On the Occupancy Date for each Building, Landlord shall deliver possession of
such Building to Tenant broom-clean, with all electrical and mechanical
equipment and utility systems servicing such Building in good operating order,
reasonable wear and tear
-2-
<PAGE>
excepted. Within thirty (30) days after the Occupancy Date for each Building,
Tenant shall prepare a "punchlist" of corrective work that must be done by
Landlord to complete its delivery obligation.
Tenant acknowledges that the existing lessee has the right to extend its
scheduled vacancy date for Buildings B and C for up to twenty (20) days beyond
the above-referenced Occupancy Dates for Buildings B and C. If the existing
lessee exercises such right, then the Occupancy Date and Commencement Date for
Building B and/or Building C, as the case may be, shall be extended one (1) day
for each day that vacancy of the Building in question by the existing lessee is
delayed beyond the above-referenced scheduled Occupancy Date for such Building.
Landlord represents that it has negotiated and intends to execute with the
existing lessee, either at or shortly after executing this Lease, an agreement
terminating the tenancy of said lessee, which termination shall be effective on
or before the Occupancy Dates stated in this Section 2.2, as such Occupancy
Dates may be postponed pursuant to the following paragraph.
If for any reason Landlord cannot deliver possession of each Building on
the scheduled Occupancy Date for such Building, Land-lord shall not be subject
to any liability therefor, nor shall such failure affect the validity of this
Lease or the obligations of Tenant hereunder, but in such case the Commencement
Date for the Building in question shall be extended one (1) day for each day
that Landlord's delivery of possession was delayed beyond the scheduled
Occupancy Date, and, if such inability to deliver possession is the result of
the refusal of the existing lessee to surrender possession of such Building(s),
Landlord shall promptly exercise all rights and remedies available at law or in
equity to evict such lessee.
If the Occupancy Date has not occurred for any reason, other than the
default of Tenant, within ninety (90) days of the scheduled Occupancy Date
stated in Section 2.2, Tenant may terminate this Lease as to any such Building
whose Occupancy Date
-3-
<PAGE>
has been so delayed by written notice to Landlord, whereupon any monies
previously paid by Tenant to Landlord with respect to such Building shall be
reimbursed to Tenant, together with interest thereon from the date of
termination until paid at the interest rate stated in Section 20.14.
3. RENT.
----
3.1 Base Monthly Rent.
-----------------
Tenant's occupancy of any portion of the Premises prior to the
Commencement Date for such portion shall be subject to all of the provisions of
this Lease, including, without limitation, the provisions of Paragraphs 10 and
11; provided, however, that Tenant shall not be obligated to pay any Base
Monthly Rent or Additional Rent under this Lease until the Commencement Date for
the Building in question. Tenant's obligation to pay rent for each Building
shall commence on the Commencement Date for such Building, whether or not Tenant
has completed its remodeling for such Building.
Beginning on the Commencement Date for each Building and continuing through
the term of this Lease, Tenant shall pay to Landlord as Base Monthly Rent for
the Premises, the following respective sums for each Building, subject, however,
to adjustment as provided in Sections 1.1, 3.2 and 3.3 below:
Building Base Monthly Rent
-------- -----------------
A _______________
B _______________
C _______________
Total ===============
All Base Monthly Rent shall be paid in advance on the first day of each calendar
month of the term of the Lease, without deduction, offset, prior notice or
demand, in lawful money of the United States. If the Commencement Date is not
the first day of a month, or if the Lease termination date is not the last day
of the month, a prorated Base Monthly Rent shall be paid at the then current
rate for the fractional month during which the Lease commences and/or
terminates.
-4-
<PAGE>
Within two (2) weeks following Tenant's execution of this lease, Tenant
shall pay to Landlord the sum, as advance rent to be applied
towards the Base Monthly Rents first accruing under this Lease.
3.2 Rental Adjustment. The Base Monthly Rent for each Building as
-----------------
specified in Section 3.1 above shall be increased in accordance with the
following formula to the extent Landlord disburses to Tenant the Improvement
Allowance for such Building pursuant to Exhibit "B": for each dollar of
Improvement Allowance disbursed up to and including Five Dollars ($5.00) per
square foot, the Base Monthly Rent shall be increased by One Cent ($.0l) per
square foot per month. For every dollar of Improvement Allowance over Five
Dollars ($5.00) per square foot, the Base Monthly Rent shall be increased by One
and Six-Tenths Cents ($.016) per square foot per month. For example, if Ten
Dollars ($10.00) per square foot of Improvement Allowance is disbursed for
Building A, the Base Monthly Rent for Building A shall be increased by the sum
of Seven Thousand Three Hundred Thirty-Eight Dollars and Twenty-Four cents
($7,338.24).
3.3 Rental During Option Term. If Tenant exercises the option to
-------------------------
extend the Lease Term pursuant to Section 17 below, then commencing on the first
day of the Option Term, the Base Monthly Rent shall be increased to a sum equal
to the total of:
(a Dollars plus (b) a sum equal to One Hundred Seventy-Two
fraction, the numerator of which is the New Index and the denominator
of which is the Initial Index; provided, however, that in no event shall the
monthly installment of Base Monthly Rent during the Option Term be more than
Monthly Rent during the Option Term be less than
-5-
<PAGE>
____________________________________________________________________ plus one
For purposes of adjusting the Base Monthly Rent as provided in this Lease,
the following definitions shall apply:
(i) "Index" means the Consumer Price Index for All Urban Consumers
(all items) as published by United States Department of Labor,
Bureau of Labor Statistics for the San Francisco/Oakland/San
Jose Metropolitan Area (1982-1984=100 Base);
(ii) "Initial Index" means the Index last published prior to the
Building A Commencement Date of this Lease; and
(iii) "New Index" means the Index last published prior to the first
day of the Option Term.
If the Index is changed or the base year is altered from that used as of the
Commencement Date of this Lease, the Index shall be converted in accordance with
the conversion factor published by United States Department of Labor, Bureau of
Labor Statistics, to obtain the same results which would have been obtained had
the Index or the base year not been changed. If no conversion factor is
available, or if the Index is otherwise changed, revised or discontinued for any
reason, there shall be substituted in lieu thereof, and the term Index shall
thereafter refer to the most nearly comparable official price index of the
United States Government in order to obtain substantially the same result for
any adjustment required by this Lease as would have been obtained had the Index
not been changed, revised or discontinued.
3.4 Additional Rent. Commencing on the Commencement Date for each
---------------
Building, and continuing throughout the Lease term, Tenant shall pay within
thirty (30) days of receipt of billing therefor, as additional rent (i) all
utilities as required by Section 6.1, (ii) Tenant's Pro Rata Share of real
property taxes as
-6-
<PAGE>
required by Section 4.1, (iii) Tenant's Pro Rata Share of the property insurance
premiums as required by Section 11.2, (iv) Tenant's Pro Rata Share of Outside
Area Expenses as required by Section 18, and (v) all other sums and charges
payable by Tenant pursuant to the terms of this Lease (hereinafter collectively
referred to as "Additional Rent"). The Additional Rent shall be paid in
addition to the Base Monthly Rent. In the event of nonpayment by Tenant of the
Additional Rent, Landlord shall have all the rights and remedies with respect
thereto as Landlord has for the nonpayment of the Base Monthly Rent.
As used in this Lease, and provided that the Commencement Date for each
Building occurs in the sequence stated in Section 2.1, the term "Tenant's Pro
Rata Share" shall mean the following fractions during the following time
periods:
<TABLE>
<CAPTION>
TIME PERIOD TENANT'S PRO RATA SHARE
----------------------------------- -----------------------
<S> <C>
From the Building A
Commencement Date until the 56,448
-------
Building B Commencement Date 275,264
From the Building B Commencement
Date until the Building C 133,864
-------
Commencement Date 275,264
After the Building C Commencement 222,800
-------
Date 275,264
</TABLE>
Landlord acknowledges that the calculation of the number of square feet
comprising the four (4) buildings in the Complex reflected in this Section 3.4
is consistent with the method stated in Section 1.1, and, if Tenant reasonably
determines that such calculation is inaccurate, Tenant shall be entitled to an
equitable adjustment of Tenant's Pro Rata Share.
3.5 Late Charges. Tenant acknowledges that late payment by Tenant to
------------
Landlord of the Base Monthly Rent and other sums due hereunder may cause
Landlord 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 Landlord by the terms of any mortgage or deed of trust covering the
Premises. Accordingly, in the event Tenant fails to
-7-
<PAGE>
pay any installment of Base Monthly Rent and/or other sums due hereunder within
ten (10) days after Tenant receives written notice that said rent or other sum
has not been paid when due, Tenant shall pay to Landlord, as Additional Rent, a
late charge equal to six percent (6%) of such overdue amount. The parties agree
that such late charge represents a fair and reasonable estimate of the cost
Landlord will incur by reason of late payment by Tenant. Acceptance of such
late charge by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of its other rights and remedies granted under this Lease.
4. TAXATION.
--------
4.1 Real Property Taxes. Tenant shall pay to Landlord, as additional
-------------------
rent, Tenant's Pro Rata Share of all real property taxes which, during the term
of this Lease, are levied, assessed or imposed upon or against the Premises, the
Parcel and the Complex. Tenant shall pay its Pro Rata Share of such taxes to
Landlord on or before the later of (a) ten days after receipt of billing (which
shall include a copy of the tax collector's statement) or (b) ten days prior to
the delinquency date of such taxes. In the event any such real property taxes
cover any period of time prior to commencement or after the expiration of the
term of this Lease, Tenant's share of such taxes shall be equitably prorated to
cover only the period of time within the fiscal tax year during which the Lease
is in effect.
As used in this Lease, the term "real property tax" shall include any form
of assessment, levy, penalty or tax (other than inheritance, estate, net income
or franchise taxes) imposed by any authority having the direct or indirect power
to tax, including any city, county, state or federal government or any school,
agricultural, lighting, drainage or other improvement district thereof,
including, without limitation, any tax:
A. Upon, allocable to, or measured by the Premises or the Parcel or
the rental payable hereunder, including without limitation, any gross income tax
or excise tax levied by the state,
-8-
<PAGE>
any political subdivision thereof, city or federal government with respect to
the receipt of such rental; or
B. Upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises or any portion thereof; or
C. Upon or measured by the value of Tenant's personal property,
equipment or fixtures located in the premises; or
D. Upon this transaction or any document to which Tenant is a
party creating or transferring an interest or an estate in the Premises.
E. Notwithstanding the foregoing, in the event Landlord sells
or otherwise transfers the Premises or any portion thereof, Tenant shall have no
obligation, during the initial term of the Lease, to pay that portion, as
reasonably determined by Landlord based upon the county tax assessor's tax
statement for the Premises, of the real property taxes attributable to a
reassessment following such sale. This Section 4.1(E) shall be inapplicable
during the Option Term.
4.2 Personal Property Taxes. Tenant shall pay prior to delinquency
-----------------------
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment and all other personal property of Tenant contained in the Premises or
elsewhere. When possible, Tenant shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Landlord.
If any of Tenant's personal property shall be assessed with landlord's real
property, Tenant shall pay to Landlord the taxes attributable to Tenant on or
before the later of (a) ten (10) days after receipt of a written statement
setting forth the taxes applicable to Tenant's property, which statement shall
include a copy of the tax collector's statement, or (b) ten (10) days prior to
delinquency date of said taxes.
-9-
<PAGE>
4.3 Assessments. To the best of Landlord's knowledge, no special
-----------
assessments in addition to those shown on the property tax bill for the Premises
for the 1987-88 fiscal year will be imposed on the Premises during the term of
this Lease, except as disclosed in writing to Tenant. If any assessments are
levied against the Premises after the Commencement Date for any of the
Buildings, Landlord may elect to either pay the assessment in full or allow the
assessment to go to bond. If Landlord pays the assessment in full, Tenant shall
pay to Landlord each time payment of real property taxes is made, a sum equal to
that which would have been payable (as both principal and interest) had Landlord
allowed the assessment to go to bond.
4.4 Right to Contest. If Landlord receives any notice of assessment
-----------------
or reassessment, or notice of any imposition of new real property taxes,
Landlord shall provide Tenant with a copy of such notice within fifteen (15)
days after Landlord's receipt thereof. In the event Tenant desires in good
faith to contest or otherwise review by appropriate legal or administrative
proceedings the imposition of any such real property tax, Tenant shall, at least
ten (10) days prior to the delinquency of such real property tax, give Landlord
written notice of its intention to do so. Tenant may withhold payment of the
real property tax being contested if, but only if, both (i) non-payment is
permitted during the pendency of such proceedings without the foreclosure of any
tax lien or the imposition of any fine or penalty, and (ii) Tenant further
furnishes Landlord with a bond satisfactory to Landlord sufficient to protect
Landlord's interest in the Premises. Any such contest shall be prosecuted to
completion (whether or not this Lease shall have expired or terminated in the
interim) and shall be conducted without delay and solely at Tenant's expense.
Tenant shall protect and indemnify Landlord against any and all expenses or
damages resulting from such contest or other proceeding. At the request of
Tenant, Landlord shall join in any contest or other proceedings which Tenant may
desire to bring pursuant to this Section. Tenant shall pay all of Landlord's
expenses arising out
-10-
<PAGE>
of such joinder. Within ten (10) days after the final determination of the
amount due from Tenant with respect to the real property tax contested, Tenant
shall pay the amount so determined to be due, together with all costs, expenses
and interest, whether or not this Lease shall have then expired or terminated.
5. USE.
---
5.1 Use. The Premises shall be used and occupied by Tenant for only
---
the following purposes and for no other purpose whatsoever without obtaining the
prior written consent of Landlord: office, light warehouse, distribution,
engineering, research and development, product testing, incidental training and
any other legal uses for Tenant's business as the same may exist from time to
time. This lease shall be subject to all applicable zoning ordinances and to
any municipal, county and state laws and regulations governing and regulating
the use of the Premises. Tenant acknowledges that neither Landlord nor
Landlord's agent has made any representation or warranty as to the suitability
of the Premises for the conduct of Tenant's business.
Notwithstanding the foregoing, Landlord represents that it has no knowledge
of any laws, statutes, ordinances, or governmental rules, regulations or
requirements ("Laws") or of any covenants, conditions, restrictions or
encumbrances ("CC&Rs") which would currently prevent or substantially interfere
with the Premises being used for the above-described uses. Landlord
acknowledges that the Premises are currently in the MP (Planned Industrial)
zoning classification established by the City of Santa Clara, and that the uses
that may be made of the Premises pursuant to this Section are permitted to be
made under zoning regulations which govern the use of the Premises.
5.2 Uses Prohibited.
---------------
A. Tenant shall not do or permit anything to be done in or
about the Premises which will increase the existing rate of insurance upon the
Premises (unless Tenant shall pay any increased premium as a result of such use
or acts) or cause the
-11-
<PAGE>
cancellation of any insurance policy covering the premises or the Parcel, nor
shall Tenant sell or permit to be kept, used or sold in or upon the Premises or
the Outside Area, any articles which may be prohibited by a standard form
policy of fire insurance.
B. Tenant shall not do or permit anything to be done in or upon
the Premises or the Outside Area, which will in any way obstruct or interfere
with the rights of other tenants or occupants of the Parcel or injure or annoy
them or use or allow the Premises to be used for any unlawful or objectionable
purpose nor shall Tenant cause, maintain or permit any nuisance in or upon the
Premises, or the Outside Area. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises or the Outside Area and Tenant shall
keep the Premises in a clean, attractive condition, free of any objectionable
noises, odors or dust.
C. Tenant shall not use the Premises or the Outside Area, or
permit anything to be in or about the Premises or Outside Area which will in any
way conflict with any Laws, statute, zoning restriction, ordinance, governmental
rule, regulation, or requirements now in force or which may hereafter be enacted
or promulgated. Tenant shall at its sole cost and expense promptly comply with
all laws, statutes, ordinances and governmental rules, regulations and
requirements now in force or which may hereafter be in force and with
requirements of any board or fire underwriters or other similar body
("Underwriter's Requirement") now or hereafter constituted relating to or
affecting the condition, use or occupancy of the Premises. The judgment of any
court of competent jurisdiction or the admission of Tenant in any action against
Tenant, whether Landlord is a party thereto or not, that Tenant has violated any
law, statute, ordinance or governmental rule, regulation or requirement, shall
be conclusive of that fact as between Landlord and Tenant.
6. UTILITIES AND WASTE DISPOSAL.
----------------------------
6.1 Utilities. Commencing on the Commencement Date for each
---------
Building, Tenant shall pay as additional rent, prior to delinquency, for all
water, gas, heat, light, power, telephone,
-12-
<PAGE>
sewage, air conditioning and ventilating, scavenger, janitorial, and all other
materials and utilities supplied to the Premises and all taxes and surcharges
thereon.
6.2 Waste Disposal. Tenant shall store its waste either inside the
--------------
Premises or in its own dumpsters located within outside trash enclosures located
in the Outside Area.
6.3 Interference with Use of the Premises. In the event of a
-------------------------------------
material interference with Tenant's use of the leased Premises as a consequence
of the cessation of utility service caused by the negligence or willful
misconduct of Landlord or its agents, contractors, employees or invitees, Tenant
shall be entitled to an abatement of Base Monthly Rent to the extent of the
interference with Tenant's use of the leased Premises, if such cessation of
utility service and consequent material interference persists for a continuous
period of two (2) business days or more. Any abatement of Base Monthly Rent
shall commence with the first business day after the beginning of the cessation
of utility service and shall continue until that date on which the utility
service is restored.
7. MAINTENANCE AND REPAIRS, ALTERATIONS AND ADDITIONS.
---------------------------------------------------
7.1 Landlord's Obligations. Subject to the provisions of Section 12
----------------------
and except for damage caused by any negligent or intentional act or omission of
Tenant and Tenant's agents, employees or invitees, which damage is not covered
by the type of insurance to be maintained pursuant to Section 11.2 hereof,
Landlord, at Landlord's expense, shall keep in good order, condition and repair
the foundations, exterior walls and exterior roofs (including roof membranes) of
the Premises. Landlord shall not, however, be obligated to paint such exterior,
nor shall Landlord be required to maintain the interior surface of exterior
walls, ceilings or doors. Landlord shall have no obligation to make repairs
under this Section 7.1 until a reasonable time after receipt of written notice
of the need for such repairs. Tenant expressly waives the benefits of any
statute now or hereafter in effect which would otherwise afford Tenant the right
to make repairs at Landlord's expense or to terminate this Lease because of
-13-
<PAGE>
Landlord's failure to keep the Premises in good order, condition and repair.
If, within thirty (30) days after notice from Tenant, Landlord fails to commence
making repairs which are the obligation of Landlord under this Section 7.1,
Tenant shall have the right to make such repairs and charge Landlord for the
reasonable cost thereof. In such event, Landlord shall reimburse Tenant for the
cost of such repairs within thirty (30) days after receipt of billing from
Tenant.
7.2 Tenant's Obligations.
--------------------
A. Subject to the provisions of Sections 12 and 7.1, Tenant, at
Tenant's expense, shall maintain in good order, condition and repair the
Premises and every part thereof, including but not limited to floors, ceilings,
windows, doors, skylights, interior walls, and the interior surfaces of the
exterior walls, plumbing, heating, air conditioning and ventilating equipment,
electrical and lighting facilities and equipment to the Premises including
circuit breakers and exterior lighting attached to the Premises. Said
maintenance shall include, without limitation, a periodic agreement with a
reputable and licensed heating and air conditioning service company which
provides for service to the HVAC equipment at least as often as every ninety
(90) days if Tenant's use of the Premises is limited to normal business hours
(8:00 a.m. to 6:00 p.m.); if Tenant's use extends beyond normal business hours,
such service shall be as often as may be required by Landlord. If Tenant does
not provide Landlord with a copy of any such required maintenance contract
within thirty (30) days after written request from Landlord, Landlord may elect,
at its option, to keep and maintain the heating and air conditioning systems in
the Premises, and in such event Tenant shall pay to Landlord upon demand the
full cost of such maintenance and repairs to such systems.
B. All glass, both interior and exterior, is at the sole risk
of Tenant, and any broken glass shall promptly be replaced by Tenant at Tenant's
expense with glass of the same kind, size and quality according to the current
local code.
-14-
<PAGE>
C. In the event the Premises are damaged due to an attempted
burglary or forcible entry into the Premises, Tenant shall be responsible for
any ensuing damage to the Premises.
D. Upon the expiration or earlier termination for this Lease,
Tenant shall surrender the Premises in the same condition as received, broom
clean, ordinary wear and tear, damage by fire, earthquake, acts of God, or
condemnation alone excepted. Tenant, at its sole cost and expense, agrees to
repair any damage to the Premises caused by or in connection with the removal of
any articles of personal property, business or trade fixtures, machinery,
equipment or furniture, including without limitation thereto, repairing the
floor and patching and painting the walls where required by Landlord to
Landlord's reasonable satisfaction. Tenant shall indemnify Landlord against any
loss or liability resulting from delay by Tenant in so surrendering the
Premises, including without limitation, any claims made by any succeeding Tenant
founded on such delay.
E. In the event Tenant fails to perform Tenant's obligations
under this Section 7, Landlord shall give Tenant written notice to do such acts
as are reasonably required to maintain the Premises. If Tenant fails to do the
work and diligently prosecute it to completion, then Landlord shall have the
right (but not the obligation) to do such acts and expend such funds at the
expense of Tenant as are reasonably required to perform such work. Any amount
so expended by Landlord shall be paid by Tenant within thirty (30) days after
demand with interest at ten percent (10%) per annum form the date of such work.
Landlord shall have no liability to Tenant for any damage, inconvenience, or
interference with the use of the Premises as a result of performing any such
work.
F. Tenant shall have the benefit of all warranties available to
Landlord which would reduce the cost of performing the obligations of Tenant
pursuant to Section 7.2. Landlord warrants to Tenant that all of the
improvements existing on the Premises as of the Occupancy Date shall have been
constructed in good and
-15-
<PAGE>
workmanlike manner in accordance with all Laws, Underwriter's Requirements and
the plans and specifications therefor. Tenant shall not be responsible for the
cost of maintenance or repair to the Premises or any portion thereof to the
extent such maintenance or repair is necessary as a result of the negligent act
or omission of Landlord or its agents, employees, contractors or invitees.
G. If Tenant becomes obligated pursuant to Section 7.2(a) to
perform any item of repair to the plumbing, heating, air conditioning and
ventilating equipment, or electrical and lighting facilities and equipment,
which would, under generally accepted accounting principles, properly be
considered a capital improvement to the Premises, the cost of which exceeds
Twenty-Five Thousand Dollars ($25,000), then Landlord and Tenant shall share the
initial cost of such capital improvement as follows: (i) Tenant shall pay the
first Twenty-Five Thousand Dollars ($25,000) of such initial cost; (ii) Tenant
shall pay a share of the remaining cost, in the same proportion that the number
of years remaining in the Lease term bears to ten (10) years, determined by
amortizing such cost over ten (10) years on a straight line basis; and (iii)
Landlord shall pay, within sixty (60) days of written notice from Tenant setting
forth the amount to be paid by Landlord, the remaining share of the initial
cost. In the event that Tenant exercises its option to extend the term of this
Lease pursuant to Section 17, Tenant will again pay to Landlord, within sixty
(60) days of the commencement of the Option Term, a share of the cost of such
capital improvement in excess of Twenty-Five Thousand Dollars ($25,000), in the
proportion that the number of years then remaining in the Lease term bears to
ten (10) years.
7.3 Leasehold Improvements.
-----------------------
A. Tenant shall not construct any leasehold improvements or
otherwise alter the leased Premises without Landlord's prior written approval
of the plans and specifications therefor, which approval shall not be
unreasonably withheld; provided, however that Tenant shall have the right to
make interior
-16-
<PAGE>
nonstructural alterations to the Premises which do not exceed Twenty-Five
Thousand Dollars ($25,000) in cost, without obtaining Landlord's prior written
approval. All such leasehold improvements shall be installed by Tenant at
Tenant's expense by a licensed contractor in compliance with the approved plans
and specifications therefor and in strict accordance with all Laws. All such
construction shall be done in a good and workmanlike manner using new materials
of good quality. Tenant shall not commence construction of any leasehold
improvements until (1) all required governmental approvals and permits shall
have been obtained; (2) all requirements regarding insurance imposed by this
Lease have been satisfied; and (3) Tenant shall have given Landlord at least
five (5) days prior written notice of its intention to commence such
construction. All leasehold improvements constructed by Tenant (except those
constructed with the Improvement Allowance pursuant to Exhibit B") shall remain
the property of Tenant during the Lease term but shall not be damaged, altered
or removed from the Premises. At the expiration or sooner termination of the
Lease term, all leasehold improvements shall be surrendered to Landlord as a
part of the realty and shall then become Landlord's property, and Landlord shall
have no obligation to reimburse Tenant for all or any portion for the value or
cost thereof; however, Landlord may, at its option, require Tenant to remove any
leasehold improvements in which case Tenant shall so remove such leasehold
improvements prior to the expiration or sooner termination of the Lease term.
Upon request, within thirty (30) days of Tenant's application for consent
to such leasehold improvements or no later than one hundred twenty (120) days
before the expiration of the Lease term, Landlord shall advise Tenant in writing
whether it reserves the right to require Tenant to remove any leasehold
improvements from the Premises upon termination of the Lease. In the event that
Landlord does not so designate any such leasehold improvements within the time
stated, Tenant shall not be required to remove such leasehold improvements from
the Premises. Notwithstanding the
-17-
<PAGE>
provisions of this Section 7.3(A), those leasehold improvements installed in the
Premises at Tenant's expense (except those constructed with the Improvement
Allowance pursuant to Exhibit "B" or which replace leasehold improvements
existing as of the Occupancy Date) shall remain the property of Tenant following
the expiration or sooner termination of the Lease Term, and Tenant shall not be
required to surrender such leasehold improvements to Landlord.
Within ten (10) business days after demand therefor from Tenant, Landlord
shall execute and deliver a lien waiver or other document in form customarily
required by any supplier, lessor or lender in connection with the installation
in the Premises of Tenant's personal property or trade fixtures, pursuant to
which Landlord shall waive any right it may have or acquire with respect to such
property. Landlord reserves the right to approve the form of any lien waiver it
is required to execute and to make reasonable modifications to any such form.
B. Alterations Required by Law. Tenant shall, at its sole
---------------------------
cost, make any alteration, addition or change of any sort, whether structural or
otherwise, to the Premises that is required by Law because of (1) Tenant's use
or change of use of the Premises, (2) Tenant's application for a new permit or
governmental approval, or (3) Tenant's construction or installation of any
leasehold improvements or trade fixtures.
C. In the event Tenant is required by any Law or Underwriter's
Requirement to make any capital improvement to the Premises, Tenant shall have
the right to contest or otherwise review by appropriate legal or administrative
proceedings the application of such Law or Underwriter's Requirement. If Tenant
desires to so contest or cause the review of such Law or Underwriter's
Requirement, Tenant shall give Landlord written notice of its intention to do so
and may conduct such contest or other review so long as it pays all costs, and
compliance therewith may be held in abeyance pending completion of such
proceedings. If required by Landlord, Tenant shall obtain and furnish Landlord
with
-18-
<PAGE>
an appropriate bond or other security sufficient to protect Landlord from
Tenant's failure to comply with such Law or Underwriter's Requirement during the
pendency of such proceedings. Tenant shall protect and indemnify Landlord
against any and all expenses or damages resulting from such contest or other
proceeding.
D. If any capital improvement is required to be made to the
Premises in order to comply with any Law or Underwriter's Requirement and if
Tenant is not obligated to make such capital improvement pursuant to Section
7.3(B), then the following shall apply:
(i) Landlord shall construct such capital improvement at its
sole cost and expense in accordance with the applicable Law
or Underwriter's Requirement.
(ii) All reasonable costs paid by Landlord to construct such
required capital improvement (including financing costs)
shall be amortized over the useful life of such
improvement with interest on the unamortized balance at the
then prevailing market rate Landlord would pay if it
borrowed funds to permanently finance such improvement from
an institutional lender following completion. Landlord
shall notify Tenant of its determination of the appropriate
amortization schedule based upon the foregoing and the
monthly amortization payment that must be made to amortize
such costs, and shall provide Tenant with the information
upon which such determination is made. Such determination
shall be subject to the approval of Tenant. As Additional
Rent, Tenant shall pay an amount equal to such monthly
amortization payment for each month after such capital
improvement is completed until the expiration of the term
of
-19-
<PAGE>
this Lease. The Additional Rent described by this Section
shall not be subject to the adjustment required to be made
to the Base Monthly Rent payable during the Option Term
pursuant to Section 3.3 hereof.
8. ENTRY BY LANDLORD. Landlord and Landlord's agent shall have the right
-----------------
at reasonable times and upon reasonable written notice to Tenant, of not less
then twenty-four (24) hours, except in an emergency, and subject to Tenant's
security requirements, to enter the Premises to inspect the same or to maintain
and repair, make alterations or additions to the Premises or any portion
thereof, to the extent permitted or required by this Lease, or to show the
Premises to prospective purchasers and lenders or, during the last six (6)
months of the Lease term, to prospective tenants. Landlord may, at any time,
place on or about the Premises any ordinary "For Sale" signs; Landlord may at
any time during the last ninety (90) days of the term of the Lease place on or
about the Premises any ordinary "For Lease" signs. Tenant hereby waives claim
for abatement of rent or for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises, and any other loss occasioned thereby, provided that Landlord
shall have used all reasonable efforts to minimize such injury, inconvenience,
interference or loss.
9. LIENS. Tenant shall keep the Premises and the Parcel free from any
-----
liens arising out for work performed, materials furnished or obligations
incurred by Tenant and shall indemnify, hold harmless and defend Landlord from
any liens and encumbrances arising out of any work performed or materials
furnished by or at the direction of Tenant. In the event that Tenant shall not,
within thirty (30) days following receipt of notice of the imposition of any
such liens, cause such lien to be released of record by payment or posting of a
proper bond, Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause the same to be
released by
-20-
<PAGE>
such means as it shall deem proper, including payment of the claim giving rise
to such lien. All such sums paid by Landlord and all expenses incurred by it
in connection therewith including attorneys' fees and costs shall be payable to
Landlord by Tenant within thirty (30) days of demand with interest at the rate
of ten percent (10%) per annum. Landlord shall have the right at all times to
post and keep posted on the Premises any notices permitted or required by law,
or which Landlord shall deem proper, for the protection of Landlord and the
Premises, and any other party having an interest therein, from mechanics' and
material persons' liens and Tenant shall give to Landlord at least ten (10)
business days prior written notice of the expected date of commencement of any
work relating to alterations or additions to the Premises.
10. INDEMNITY.
---------
10.1 Indemnity. Tenant shall indemnify and hold Landlord harmless
---------
from and against any and all claims of liability for any injury or damage to any
person or property arising from Tenant's use of the Premises, or from the
conduct of Tenant's business, or from any activity, work or thing done,
permitted or suffered by Tenant in or upon the Premises or the Outside Area.
Subject to the provisions of Section 11.3, entitled Waiver of Subrogation,
Tenant shall further indemnify and hold Landlord harmless from and against any
and all claims arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under this Lease, or arising from
any negligence of Tenant or Tenant's agents, contractors or employees, and from
and against all costs, attorneys' fees, expenses and liabilities incurred in the
defense of any such claim, or any action or proceeding brought thereon. In the
event any action or proceeding is brought against Landlord by reason of such
claim, Tenant upon notice from Landlord shall defend same at Tenant's expense.
Notwithstanding anything to the contrary in the Lease, Tenant shall neither
release Landlord from, nor indemnify Landlord with respect to: (i) the
negligence or willful misconduct of Landlord,
-21-
<PAGE>
the other occupants of the Complex, or their respective agents, employees,
contractors or invitees; or (ii) a breach of Landlord's obligations or
representations under this Lease. Landlord shall indemnify and hold harmless
Tenant from all damages, liabilities, judgments, actions, attorneys' fees,
consultants' fees, costs and expenses arising from the negligence or willful
misconduct of Landlord or its employees, agents contractors or invitees, or the
breach of Landlord's obligations or representations under this Lease.
10.2 Exemption of Landlord from Liability. Landlord shall not be
------------------------------------
liable for injury to Tenant's business or loss of income therefrom or for damage
which may be sustained by the person, goods, wares, merchandise or property of
Tenant, its employees, invitees, customers, agents or contractors or any other
person in or about the Premises, caused by or resulting from fire, steam,
electricity, gas, water or rain, which may leak or flow from or into any part of
the Premises, or from the breakage, leakage, obstruction or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures of the same, whether the said damage or injury results from conditions
arising upon the Premises or from other sources or places and regardless of
whether the cause of such damage or injury or the means of repairing the same is
inaccessible to Tenant. Landlord shall not be liable for any damages arising
from any act or neglect of any other tenant, if any, of the Parcel. The
provisions of this Paragraph 10.2 shall not apply to or in the event of any
damage or injury caused by the willful misconduct or negligence of Landlord, its
agents or employees.
11. INSURANCE.
---------
11.1 Liability Insurance. Tenant shall, at its own expense, maintain
-------------------
in full force and effect during the Lease Term the following insurance:
A. Tenant shall maintain a policy or policies of comprehensive
general liability insurance, including fire and property damage carried with a
company or companies satisfactory to
-22-
<PAGE>
Landlord, which will insure Tenant and Landlord (and such others as are
designated by Landlord) against liability for personal injury, bodily injury,
death, and damage to property occurring in or about, or resulting from any
occurrence in or about, the Premises with combined single limit coverage of not
less than Three Million Dollars ($3,000,000.00). Such comprehensive general
liability insurance shall be extended to include "blanket contractual liability"
endorsement insuring Tenant's performance of Tenant's obligation to indemnify
Landlord contained in Section 10.1 and all of the other broadened liability
features normally contained in an extended liability endorsement. If Landlord's
lender, insurance advisor or counsel reasonably determines at any time that the
amount of such coverage is not adequate and provided such increase is reasonably
approved by Tenant, Tenant shall increase such coverage to such amount as
Landlord's lender, insurance advisor or counsel reasonably deems adequate. The
limits of such insurance shall not limit the liability of Tenant. Tenant shall
deliver to Landlord certificates of insurance evidencing the existence and
amounts of such insurance naming Landlord as an additional insured. In the
event Tenant fails to procure and maintain such insurance, Landlord may (but
shall not be required to) procure same at Tenant's expense after ten (10) days
prior written notice. No such policy shall be cancellable or subject to
reduction of coverage or other modification except after thirty (30) days prior
written notice to Landlord by the insurer. All such policies shall be written
as primary policies, not contributing with and not in excess of coverage which
Landlord may carry. Tenant shall, within twenty (20) days prior to the
expiration of such policies, furnish Landlord with renewals or binders or
Landlord may order such insurance and charge the cost to Tenant, which amount
shall be payable by Tenant upon demand. Tenant shall have the right to provide
such insurance coverage pursuant to blanket policies obtained by Tenant provided
such blanket policies expressly afford coverage to the Premises and to Landlord
as required by this Lease.
-23-
<PAGE>
11.2 Property Insurance. Landlord shall, at Tenant's expense, procure
------------------
and maintain at all times during the term of this Lease a policy or policies of
insurance covering loss or damage to the Premises in the amount of the full
replacement value thereof and loss of rental income (for a maximum of twelve
(12) months) thereof, providing protection against all perils included within
the classification of fire, extended coverage, vandalism, malicious mischief,
sprinkler leakage and special extended peril (all-risk) (and, if required by
Landlord's lender, flood and earthquake). Landlord shall not be required to
cause such insurance to cover any of Tenant's personal property, inventory,
trade fixtures or any modifications, alterations, or improvements made or
constructed by Tenant to or within the Premises. During the term of this Lease,
Tenant shall pay to Landlord, as additional rent, the amount of the premium for
the insurance required under this Section 11.2 within ten (10) days after
receipt by Tenant of a copy of the premium statement or other reasonably
satisfactory evidence of the amount due, which shall include the method of
calculation of Tenant's share thereof if the insurance covers improvements other
than the Premises. If the term of this Lease does not expire concurrently with
the expiration of the period covered by the insurance Tenant's liability for
such premium shall be prorated on an annual basis.
Tenant shall not be obligated to pay the cost of earthquake insurance to
the extent it exceeds a commercially reasonable rate. If the cost of earthquake
insurance exceeds a commercially reasonable rate, Tenant shall nonetheless
continue to pay an amount equal to a commercially reasonable rate for such
earthquake insurance so long as such insurance is carried by Landlord. For
purposes hereof, a "commercially reasonable rate" for earthquake insurance
shall mean any rate that is within the range of the then current cost of
earthquake coverage which is then being paid by Prime Owners (defined below) of
industrial buildings in Santa Clara County containing more than 50,000 square
feet that were built after 1976 or which is being reimbursed or paid by tenants
occupying, under triple net leases, such buildings. Prime Owners
-24-
<PAGE>
shall be any entity whose individual real property holdings exceed Twenty-Five
Million Dollars ($25,000,000) in fair market value who fit into the following
categories: (i) institutional investors such as pension funds, insurance
companies, and syndications where partnership interests were offered pursuant to
a registered public offering; and (ii) industrial developers and their
affiliated partnerships (e.g., Lincoln Property Company, Trammel Crow,
Peery/Arrillaga, the Koll Company). Notwithstanding the foregoing: (i) in the
event that it is not the prevailing practice, because of the excessive cost of
earthquake insurance coverage, for Prime Owners of industrial buildings in Santa
Clara County containing more than 50,000 square feet that were built after 1976
to pay, or tenants occupying such buildings under triple net leases to
reimburse, the cost of earthquake insurance coverage, the rate paid by the
remaining Prime Owners or reimbursed by their tenants shall not be deemed to
establish a commercially reasonable rate, and (ii) an annual rate of earthquake
insurance coverage of Ten Dollars ($10) per One Thousand Dollars ($1,000) of
replacement cost is acknowledged by the parties to be at the high end of the
range of commercially reasonable rates for earthquake insurance as of the date
of this Lease.
Landlord shall maintain, at its sole cost and expense, a policy or policies
of comprehensive general liability insurance insuring Landlord (and such others
as are designated by Landlord) against liability for personal injury, bodily
injury, death, and damage to property occurring or resulting from an occurrence
in, on or about the Premises, with combined single limit coverage of not less
than Three Million Dollars ($3,000,000), or such greater coverage as Landlord
may from time to time determine is reasonably necessary for its protection.
11.3 Waiver of Subrogation. Landlord and Tenant each hereby waive any
---------------------
and all rights of recovery against the other, and against the officers,
partners, employees, agents and representatives of the other, on account of
loss or damage to such waiving party's property or the property of others under
its control to the
-25-
<PAGE>
extent that such injury, loss or damage is insured against under any insurance
policy in force at the time of such loss or damage. Landlord and Tenant agree
to notify the insurance carrier or carriers under any such policy that the
foregoing mutual waiver of subrogation is contained in this Lease.
12. DAMAGE OR DESTRUCTION.
---------------------
A. If any one or more of the Buildings that are part of the Premises
are damaged by any peril, then Landlord shall restore the damage to such
Building(s), except to the extent that this Lease is terminated either in its
entirety or in part by Landlord pursuant to Section 12B hereof or by Tenant
pursuant to Section 12C hereof. If this Lease is not so terminated either in
its entirety or in part, all proceeds of the insurance carried pursuant to
Section 11.2 shall be paid to Landlord and shall be used for the restoration of
the damage. The party who has obtained and is then carrying such insurance
shall be responsible for paying any "deductible" amount that is excluded from
coverage. Upon receipt of such insurance proceeds and the issuance of all
necessary governmental approvals, Landlord shall commence and diligently
prosecute to completion the restoration of the Building(s) to substantially the
same condition existing immediately prior to such damage. However, if Landlord
commences such restoration but has not substantially completed such restoration
within two hundred forty (240) days after the date of such damage, then Tenant
shall have the option to terminate this Lease as to the Building(s) so damaged
on the following terms: (i) within thirty (30) days after the expiration of such
two hundred forty (240) day period, Tenant shall notify Landlord as to whether
or not it elects to exercise its option to terminate this Lease; and (ii) if
Tenant makes such election and the restoration is not substantially completed
within thirty (30) days after Landlord's receipt of such notice of election from
Tenant, then this Lease shall terminate as to the Building(s) so damaged and not
restored.
B. Landlord shall have the following options to terminate this
Lease as to the Building(s) damaged, which may be exer-
-26-
<PAGE>
cised only by delivery to Tenant of a written notice of election to terminate
within thirty (30) days after the date the damage occurs:
(1) In the event any one of the Buildings is damaged by a peril
that is not covered by the insurance carried pursuant to Section 11.2, and the
cost to restore the damage exceeds five percent (5%) of the then replacement
cost of the Building so damaged, Landlord shall have the option to terminate
this Lease in part as to the Building so damaged. Notwithstanding the foregoing,
if Landlord so partially terminates this Lease, Tenant may within fifteen (15)
days after receipt of Landlord's notice of termination agree to pay the cost to
restore the damage to the extent it exceeds five percent (5%) of the then
replacement cost of the Building so damaged, in which case this Lease shall not
be so partially terminated and Landlord shall proceed to restore the damage
following receipt of Tenant's contribution toward the cost of restoration.
(2) In the event any one of the Buildings is damaged by any
peril, whether or not covered by the insurance carried pursuant to Section 11.2,
during the last year of the Lease term (as it may be extended) to such an extent
that the estimated cost to restore exceeds an amount equal to six (6) times the
then Base Monthly Rent allocable to the Building(s) so damaged, then Landlord
shall have the option to terminate this Lease in part as to the Building(s) so
damaged. Notwithstanding the foregoing, Landlord may not so terminate this
Lease pursuant to this subparagraph if Tenant, at the time of such damage, has
an express written option to further extend the Lease Term and Tenant exercises
such option to so further extend the Lease Term within fifteen (15) days
following Landlord's exercise of its option to terminate.
C. If any one or more of the Buildings is damaged by any peril and
Landlord does not elect to terminate this Lease as to the Building(s) so damaged
or is not entitled to terminate this Lease pursuant to Section 12B, then as soon
as reasonably practicable, Landlord shall furnish Tenant with the written
opinion of Landlord's architect or construction consultant as to when the
-27-
<PAGE>
restoration work required of Landlord may be completed and the estimated cost of
such restoration work. Tenant shall have the following options to terminate
this Lease, either in whole or in part, which may be exercised only by delivery
to Landlord of a written notice of election to terminate within fifteen (15)
days after Tenant receives from Landlord the estimate of the time needed to
complete such restoration:
(1) Tenant may terminate this Lease as to any one or more of the
Building(s) so damaged, if the damage is caused by a peril not covered by the
insurance carried pursuant to Section 11.2 and the cost to restore the damaged
Building exceeds five percent (5%) of the then replacement cost thereof.
Notwithstanding the foregoing, if Tenant elects to exercise such option to
terminate, Landlord may within fifteen (15) days after receipt of Tenant's
notice of termination agree to pay the entire cost of restoration, in which case
such option to terminate shall be of no further force and effect and Landlord
shall proceed to restore the damage.
(2) Tenant may terminate this Lease as to any one or more of the
Building(s) so damaged, if any Building is damaged by a peril (whether or not
covered by the insurance required to be carried pursuant to Section 11.2) during
the last year of the Lease term and (i) such damage affects more than twenty
percent (20%) of the building area within the Building that would be affected by
Tenant's exercise of its option to terminate, and (ii) such damage cannot be
substantially restored within sixty (60) days following the date of such damage.
(3) Tenant may terminate this Lease as to any one or more of the
Building(s) affected by the damage, in the event any Building is damaged by any
peril (whether or not covered by the insurance required to be carried pursuant
to Section 11.2) and the restoration cannot be completed by Landlord within two
hundred seventy (270) days after the date of such damage.
D. If this Lease is terminated in whole or in part by the proper
exercise of an option to terminate granted to Landlord or Tenant by this Lease,
then (i) this Lease shall terminate as to
-28-
<PAGE>
the Building(s) affected by the termination fifteen (15) days after the date the
option to terminate is properly exercised, (ii) the Base Monthly Rent and all
other charges due hereunder shall be prorated as of the date of termination, and
(iii) neither Landlord nor Tenant shall have any further rights or obligations
under this Lease with respect to that part of the Premises affected by such
termination except for those that have accrued prior to the date of termination.
In addition to the foregoing, in the event this Lease is terminated in part as
to one or more Buildings, then the following shall apply:
(1) Tenant's Pro Rata Share shall be adjusted by subtracting from
the numerator of the fraction set forth in Section 3.4 the number of square feet
contained within the Building(s) as to which this Lease is terminated.
(2) The then Base Monthly Rent shall be reduced by an amount
proportionately equal to the reduction in the number of square feet of the
Premises thereafter covered by this Lease.
E. Landlord's obligation (should it elect or be obligated to repair
or rebuild) shall be limited to the basic Buildings and the leasehold
improvements paid for with the Improvement Allowance and installed pursuant to
Exhibit "B". Tenant shall at its own expense forthwith replace or fully repair
all trade fixtures, equipment and leasehold improvements other than those paid
for with the Improvement Allowance and installed pursuant to Exhibit "B". All
insurance shall be made available to Landlord to permit it to discharge its
obligations under this lease regarding restoration; provided, however, that
Tenant shall receive proceeds payable under the insurance carried pursuant to
Section 11.2, to the extent any proceeds remain after deducting that portion
attributable to the shell of the Building(s), the leasehold improvements
existing as of the Occupancy Date for such Building(s) and the leasehold
improvements installed with the Improvement Allowance, that are fairly allocable
to the leasehold improvements installed at the expense of Tenant.
-29-
<PAGE>
F. In the event of any damage to the Premises which does not result
in a termination of this Lease, in whole or in part, the Base Monthly Rent and
other sums payable hereunder shall be temporarily abated proportionately with
the degree to which Tenant's use of the Premises is impaired by such damage
(based upon the ratio of building area rendered unusable to the total building
area), commencing from the date of such damage or destruction and continuing
during the period required by Landlord to complete its restoration of the
Premises. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of the use of the Premises, damage to Tenant's personal
property or any inconvenience occasioned by such damage or restoration. Tenant
hereby waives the provisions of Section 1932, Subdivision 2, and Section 1933,
Subdivision 4, of the California Civil Code, and the provisions of any similar
law hereafter enacted.
G. In the event that Landlord becomes obligated to restore damage to
the Premises caused by a peril not covered by the insurance carried pursuant to
Section 11.2, then the following shall apply:
(1) Landlord shall restore such damage at its sole cost and
expense.
(2) The cost of restoring such uninsured loss shall be treated
in the same manner as the construction by Landlord of a capital improvement
required by future Law, as provided in Section 7.3(b), so that the cost of
restoration is amortized over the useful life of the restoration, and as
additional rent, Tenant shall pay an amount equal to the monthly amortization
payment required to so amortize the cost of such restoration for each month
after the restoration is completed until (i) the expiration of the initial Lease
term if the uninsured loss occurs during the initial Lease term, or (ii) the
expiration of the then current Option Period if the uninsured loss occurs during
such Option Period.
(3) Notwithstanding the foregoing, if Tenant elects to terminate
this Lease pursuant to Section 12C(l) because of damage not covered by
insurance, and if Landlord elects to pay the
-30-
<PAGE>
cost of restoration pursuant to such Section to avoid such termination, then
the additional rent required to be paid pursuant to subparagraph (2) above shall
be based only on the lesser of (i) the actual cost of restoration, or (ii) ten
percent (10%) of the then replacement cost of the Building(s) damaged. The rent
shall not be increased as a result of restoration costs paid by Landlord for
uninsured loss in excess of ten percent (10%) of the then replacement cost of
the Building(s) damaged.
13. CONDEMNATION.
------------
13.1 Definition of Terms. For the purposes of this Lease, the term
-------------------
(1) "Taking" means a taking of the Premises or damage to the Premises related to
the exercise of the power of eminent domain and includes a voluntary conveyance,
in lieu of court proceedings, to any agency, authority, public utility, person
or corporate entity empowered to condemn property; (2) "Total Taking" means the
taking of the entire Premises or so much of the Premises as to prevent or
substantially impair the use thereof by Tenant for the uses herein specified;
(3) "Partial Taking" means the taking of only a portion of the Premises which
does not constitute a Total Taking; (4) "Date of Taking" means the date upon
which the title to the Premises, or a portion thereof, passes to and vests in
the condemnor or the effective date of any order for possession if issued prior
to the date title vests in the condemnor; and (5) "Award" means the amount of
any award made, consideration paid, or damages ordered as a result of a Taking.
13.2 Rights. The parties agree that in the event of a Taking all
------
rights between them or in and to an Award shall be as set forth herein and
Tenant shall have no right to any Award except as set forth herein.
13.3 Total Taking. In the event of a Total Taking during the term
------------
hereof (1) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the Premises shall cease and be terminated as of the Date of
Taking; (2) Landlord shall refund to Tenant any prepaid rent; (3) Tenant shall
pay to Landlord any rent or charges due Landlord under the Lease, each prorated
as
-31-
<PAGE>
of the Date of Taking; (4) Tenant shall receive from the Award those portions of
the Award attributable to trade fixtures and moving expenses of Tenant; and (5)
the remainder of the Award shall be paid to and be the property of Landlord.
Notwithstanding the provisions of Section 13.3, Tenant shall be entitled to that
portion of any Award attributable to the leasehold improvements which Tenant
would be entitled to remove from the Premises.
13.4 Partial Taking. In the event of a Partial Taking during the term
--------------
hereof (1) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the portion of the Premises taken shall cease and terminate as
of the Date of Taking; (2) from and after the Date of Taking the Base Monthly
Rent shall be an amount equal to the product obtained by multiplying the Base
Monthly Rent immediately prior to the Taking by the quotient obtained by
dividing the number of square feet of floor area contained in the Premises after
the Taking by the number of square feet of floor area contained in the Premises
prior to the Taking; (3) Tenant shall receive from the Award the portions of
the Award attributable to trade fixtures of Tenant; and (4) the remainder of the
Award shall be paid to and be the property of Landlord.
14. ASSIGNMENT AND SUBLETTING.
-------------------------
14.1 Transfer. The following provisions shall apply to any
--------
assignment, subletting or other transfer by Tenant or any subtenant or assignee
or other successor in interest of the original Tenant (collectively referred to
in this paragraph as "Tenant"):
A. Tenant shall not do any of the following (collectively
referred to herein as a "Transfer"), whether voluntarily, involuntarily, or by
operation of law, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld: (i) assign or otherwise transfer its
interest in this Lease or in the Premises; (ii) sublet all or any part of the
Premises or allow it to be sublet, occupied or used by any person or entity
other than Tenant; (iii) transfer any right appurtenant to this Lease or the
Premises; or (iv) mortgage, pledge,
-32-
<PAGE>
hypothecate or encumber this Lease. Any attempt to Transfer without Landlord's
consent shall constitute a default by Tenant and shall be voidable at Landlord's
option. Landlord's consent to any one Transfer shall not constitute a waiver of
the provisions of this paragraph 14.1 as to any subsequent transfer nor a
consent to any subsequent Transfer. No Transfer, even with the consent of
Landlord, shall relieve Tenant of its personal and primary obligation to pay the
rent and to perform all of the other obligations to be performed by Tenant
hereunder. The acceptance of rent by Landlord from any person shall not be
deemed to be a waiver by Landlord of any provision of this Lease nor to be a
consent to any Transfer.
B. Tenant shall give Landlord at least fifteen (15) days prior
written notice of its desire to Transfer and of the proposed terms of such
Transfer, which notice shall include: (i) the name and legal composition of the
proposed transferee; (ii) the nature of the proposed transferee's business to be
carried on in the Premises; (iii) the basic terms and provisions of the proposed
sublease, assignment or other transfer, including, without limitation, all
consideration to be given on account of the Transfer; and (iv) a financial
statement or other reasonable financial information that Landlord may request
concerning the proposed transferee. Tenant's notice shall not be deemed to have
been served or given until such time as Tenant has provided Landlord with all
information reasonably requested by Landlord pursuant to this subparagraph (b).
Tenant shall immediately notify Landlord of any modifications to the proposed
terms of such Transfer.
C. In the event that Tenant seeks to make any Transfer, Landlord
shall have the right to withhold its consent to such Transfer, as permitted
pursuant to subparagraph (a) above, or to exercise any of the rights set forth
in this subparagraph (c) by giving written notice of its election within fifteen
(15) days after Tenant's notice of intent to transfer has been deemed given to
Landlord. The following rights are in addition to Landlord's right to withhold
its consent to any transfer and may be exercised
-33-
<PAGE>
by Landlord at its sole discretion without limiting Landlord in the exercise of
any other right or remedy which Landlord may have:
(1) Landlord may elect to permit Tenant to so assign the Lease
or sublease such part of the Premises on the terms and conditions contained in
Tenant's notice, in which event Tenant may do so, without being released of its
liability for the performance of all of its obligations under the Lease.
D. Tenant expressly agrees that the provisions of this paragraph
14.1 are not unreasonable standards or conditions for purposes of Section 1951.4
of the California Civil Code, as amended from time to time.
E. Notwithstanding anything to the contrary in this Section 14,
Tenant may enter into any of the following transactions, so long as it first
notifies Landlord in writing of its intent to do so and provides Landlord with a
copy of the instrument implementing such Transfer, without the prior consent of
Landlord: (i) any Transfer to a corporation which controls, is controlled by, or
is under common control with Tenant (with "control" meaning ownership of more
than fifty percent (50%) of the stock or beneficial interest); (ii) an
assignment of the Lease in connection with the sale of all or substantially all
of the assets of Tenant; (iii) a Transfer made in connection with a merger,
consolidation or other non-bankruptcy reorganization of Tenant or a Transfer of
stock ownership in Tenant.
14.2 Attorneys' Fees. Tenant shall pay Landlord's reasonable
---------------
attorneys' fees not to exceed Five Hundred Dollars ($500.00) incurred in
connection with Landlord's review of the proposed assignment, sublease or
transfer.
15. SUBORDINATION.
-------------
15.1 Subordination. This Lease at Landlord's option shall be subject
-------------
and subordinate to all ground or underlying leases which now exist affecting the
Premises or the Parcel, or both, and to the lien of any mortgages or deeds of
trust in any amount or amounts whatsoever which now exist against the Premises
and/or the Parcel, or on or against Landlord's interest or estate therein or
-34-
<PAGE>
on or against any ground or underlying lease, without the necessity of the
execution and delivery of any further instruments on the part of Tenant to
confirm such subordination; provided, however, that Landlord shall use all
reasonable efforts to obtain within sixty (60) days from the date hereof a
recognition and nondisturbance agreement whereby the lessor under any such
ground or underlying lease and holder of any mortgage or deed of trust shall
agree that, so long as Tenant is not in default hereunder, this Lease shall
remain in full force and effect notwithstanding the termination of any such
lease or foreclosure of such mortgage or deed of trust. If any mortgagee,
trustee or ground lessor shall elect to have this Lease prior to the lien of its
mortgage, deed of trust or ground lease, and shall give written notice thereof
to Tenant, this Lease shall be deemed prior to such mortgage, deed of trust or
ground lease, whether this Lease is dated prior or subsequent to the date of
said mortgage, deed of trust or ground lease or the date of the recording
thereof.
15.2 Subordination Agreements. Tenant covenants and agrees to
------------------------
promptly execute and deliver upon demand without charge therefor, any instrument
or instruments of subordination necessary to subordinate this Lease to any
future ground or underlying leases and/or to the lien of any future mortgage or
deed of trust in any amount or amounts whatsoever which may hereafter be placed
by Landlord on or against the Premises and/or the Parcel, or on or against
Landlord's interest or estate therein or on or against any ground or underlying
lease; provided, however, Tenant shall not be required to execute and deliver
any such subordination agreement unless the lender consents in writing to the
Lease and agrees in writing that in the event of foreclosure of the mortgage, or
in the event the lender comes into possession or acquires title to the Premises
as a result of the foreclosure of its mortgage or the notes secured thereby, or
as a result of any other means, the lender agrees that the Lease shall not be
terminated and that lender shall recognize Tenant and further agrees that Tenant
shall not be disturbed in its possession of the Premises for any reason
-35-
<PAGE>
other than one which would entitle the Landlord to terminate the Lease under its
terms or that would cause, without any further action by Landlord, the
termination of the Lease or would entitle Landlord to dispossess the Tenant from
the Premises.
15.3 Quiet Enjoyment. Landlord covenants and agrees with Tenant that
---------------
upon Tenant paying rent and other monetary sums due under the Lease and
performing its covenants and conditions, Tenant shall and may peaceably and
quietly have, hold and enjoy the Premises for the Term, subject however to the
term of the Lease and of any of the ground leases, mortgages or deeds of trust
described above.
15.4 Attornment. In the event any proceedings are brought for default
----------
under any ground or underlying lease or in the event of foreclosure or the
exercise of the power of sale under any mortgage or deed of trust made by
Landlord covering the Premises, Tenant shall attorn to the purchaser upon any
such foreclosure or sale and recognize such purchaser as the Landlord under this
Lease; provided said purchaser expressly agrees in writing to be bound by the
terms of the Lease.
16. DEFAULT; REMEDIES.
-----------------
16.1 Default. The occurrence of any of the following shall constitute
-------
a material default and breach of this Lease by Tenant:
A. Any failure by Tenant to pay the rent or any other monetary
sums required to be paid hereunder (where such failure continues for seven (7)
days after written notice thereof by Landlord to Tenant);
B. The abandonment of the Premises by Tenant;
C. A failure by Tenant to observe and perform any other
provisions of this Lease to be observed or performed by Tenant, where such
failure continues for twenty (20) days after written notice thereof by Landlord
to Tenant; provided, however, that if the nature of such default is such that
the same cannot reasonably be cured within such twenty (20) day period, Tenant
shall not be deemed to be in default if Tenant shall within such
-36-
<PAGE>
period commence such cure and thereafter diligently prosecute the same to
completion;
D. The making by Tenant of any general assignment for the
benefit of creditors;
E. A court makes or enters any decree or order with respect to
Tenant or Tenant submits to or seeks a decree or order (or petition or pleading
is filed in connection therewith) which (i) grants or constitutes (or seeks) an
order for relief, appointment of a trustee or confirmation of a reorganization
plan under the Bankruptcy Laws of the United States; (ii) approves as properly
filed (or seeks such approval of) a petition seeking liquidations or
reorganization under said Bankruptcy Laws or any other debtor's relief law or
statute of the United States or any state thereof; (iii) otherwise directs (or
seeks) the winding up or liquidation of Tenant; provided, however, that if any
such petition, decree or order is not voluntarily filed or made by Tenant, that
Tenant shall not be in default until such petition, decree or order remains
undischarged for a period of sixty (60) days.
16.2 Remedies. In the event of any such material default or breach by
--------
Tenant, Landlord may at any time thereafter, with or without notice and demand
and without limiting Landlord in the exercise of any right or remedy at law or
in equity which Landlord may have by reason of such default or breach:
A. Maintain this Lease in full force and effect and recover the
rent and other monetary charges as they become due, without terminating Tenant's
right to possession, irrespective of whether Tenant shall have abandoned the
Premises. In the event Landlord elects to not terminate the Lease, Landlord
shall have the right to attempt to re-let the Premises at such rent and upon
such conditions and for such a term, and to do all acts necessary to maintain or
preserve the Premises as Landlord deems reasonable and necessary without being
deemed to have elected to terminate the Lease including removal of all persons
and property from the Premises; such property may be removed and stored in a
public
-37-
<PAGE>
warehouse or elsewhere at the cost of and for the account of Tenant. In the
event any such re-letting occurs, this Lease shall terminate automatically upon
the new Tenant taking possession of the Premises.
B. Terminate Tenant's right to possession by any lawful means,
in which case this Lease shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. In the event Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant's
default including without limitation thereto, the following: (i) the worth at
the time of award of any unpaid rent which had been earned at the time of such
termination; plus (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 Tenant proves could have been
reasonably avoided; plus (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 Tenant proves could be reasonably
avoided; plus (iv) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom; plus (v) at Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by
applicable state law. Upon any such re-entry Landlord shall have the right to
make any reasonable repairs, alterations or modifications to the Premises, which
Landlord in its sole discretion deems reasonable and necessary. As used in
clauses (i) and (ii) above, the "worth at the time of award" is computed by
allowing interest at the rate specified in Paragraph 20.14 from the date of
default. As used in clause (iii), the "worth at time of award" is computed by
discounting such amount at the discount rate of the U.S. Federal Reserve Bank at
the time of award plus one percent (1%). The term "rent", as used in this
Section 16, shall be deemed to be and to mean the rent to be paid pursuant to
Sec-
-38-
<PAGE>
tion 3 and all other monetary sums required to be paid by Tenant pursuant to the
terms of this Lease.
16.3 Default by Landlord. Landlord shall not be in default unless
-------------------
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord 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
Tenant in writing, specifying wherein Landlord has failed to perform such
obligation, provided however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance, then Landlord
shall not be in default if Landlord commences performance within such thirty-day
period and thereafter diligently prosecutes the same to completion.
17. OPTIONS
-------
17.1 Options to Extend. Tenant is hereby granted one option to extend
-----------------
the term of this Lease for one period of three (3) years (the "Option Term"),
such extension to be on the same terms and conditions as the initial term,
except for the Base Monthly Rent which shall be determined as provided in
Paragraph 3.4 above. It shall be a condition precedent to the exercise of the
option that Tenant shall not be in default under this Lease at the time of
exercise of such option. If Tenant elects to exercise the option, Tenant shall
exercise said option only by written notice delivered to Landlord at least
ninety (90) days prior to the expiration of the initial term of this Lease.
There shall be no further options to extend the term of this lease at the end of
the Option Term.
18. OUTSIDE AREA.
------------
18.1 Use of Outside Area. The term "Outside Area" as used in this
-------------------
Lease shall mean the driveways, walkways, parking areas, landscaped areas, and
all other areas on the Parcel which are outside of a building. Subject to the
terms and conditions of this Lease and such rules and regulations as Landlord
may from time to prescribe, which shall be subject to the reasonable approval of
Tenant, Tenant's employees, invitees and customers shall, in common
-39-
<PAGE>
with other occupants of the Parcel, and their respective employees, invitees and
customers, and others entitled to the use thereof, have the non-exclusive right
to use the access roads, parking areas, driveways, and walkways which are
provided and designated by Landlord for the general use and convenience of the
occupants of the Parcel. Landlord reserves the right from time to time to make
changes in the shapes, size, location, amount and extent of the Outside Area.
Landlord further reserves the right to promulgate such reasonable rules and
regulations relating to the use of the Outside Area and any part or parts
thereof, as Landlord may deem appropriate for the best interest of the occupants
of the Parcel. The approved rules and regulations shall be binding upon Tenant
upon delivery of a copy of them to Tenant, and Tenant shall abide by them and
cooperate in their observance. Such rules and regulations may be amended by
Landlord from time to time, with or without advance notice, and all amendments
shall be effective upon delivery of a copy to Tenant.
Tenant shall have the nonexclusive right to use all parking spaces located
in the Outside Area as outlined in red on Exhibit "A". Tenant shall not park or
permit the parking of Tenant's vehicles or trucks or the vehicles or trucks of
Tenant's employees, invitees, customers, suppliers or others, in any other
portion of the Outside Area not designated by Landlord for such use by Tenant.
Tenant shall not abandon any inoperative vehicles or equipment on any portion of
the Outside Area. Tenant shall make no alterations, improvements or additions
to the Outside Area.
Landlord shall operate, manage, maintain, and repair the Outside Area in
good order, condition and repair. Such maintenance and repair shall include
parking lot sweeping, landscaping services, maintenance or repair or fountains,
landscape irrigation systems, paving, sidewalks, fences and lighting. The
manner in which the Outside Area shall be maintained and the expenditures for
such maintenance shall be at the discretion of Landlord. Landlord's cost of
such repair, maintenance, operation and management shall be referred to herein
as "Outside Area Expenses." Tenant
-40-
<PAGE>
shall pay to Landlord its share of such Outside Area Expenses as provided in
Paragraph 18.2 below.
18.2 Outside Area Expenses. Tenant shall pay to Landlord, as
---------------------
Additional Rent, within thirty (30) days after receipt of billing but not more
often than once each calendar month, Tenant's Pro Rata Share of the Outside Area
Expenses. Tenant acknowledges and agrees that the Outside Area Expenses shall
include an additional five percent (5%) of the actual expenditures in order to
compensate Landlord for accounting and processing services. Tenant shall have
the right to inspect the supporting records of Landlord with respect to the
Outside Area Expenses. Notwithstanding anything contained in this Section 18,
the term "Outside Area Expenses" shall not include, nor shall Tenant have any
obligation to pay, any of the following: (i) depreciation on real property,
interest expense or rent due pursuant to any underlying ground leases; (ii) the
cost to correct any defective design or construction of the Outside Area; (iii)
the cost to correct or repair damage to the Outside Areas to the extent it is
required to be covered by insurance pursuant to Section 11.2 of the Lease or is
covered by any warranty; (iv) the cost of any repair required or resulting from
the negligence of Landlord, its agents or contractors or (v) any fee or
compensation for management or administration of the Premises in addition to the
referenced fee for accounting and processing services. Landlord shall use all
reasonable efforts to obtain services and materials to be provided hereunder at
the fair market value which would be charged by an independent third party
providing such service or material.
19. EXPANSION. Provided Tenant is not in default under this Lease and
---------
provided that this Lease is in full force and effect and provided further that
Tenant has not assigned this Lease, then Tenant shall have the following rights
to lease, at the termination of the existing lease (including, all extension
options) to Altera Semiconductor, Inc. ("Altera"), the space in Building D
presently leased to Altera. Tenant further acknowledges that Altera has an
option to extend the term of its existing lease.
-41-
<PAGE>
A. Before listing or advertising Building D to prospective tenants
or purchasers, Landlord shall first notify Tenant of the availability of
Building D and shall present the first offer to lease Building D to Tenant.
B. After presentation of Landlord's offer, and provided that
Landlord and Tenant are unable to reach agreement, following good faith
negotiations, as to the terms and conditions under which the parties would be
willing to enter into a lease of Building D, Tenant shall have a right of first
refusal to lease Building D as set forth herein. If Landlord proposes to lease
a space in Building D (the "Available Space") to a prospective tenant and if
Altera has failed to exercise any right of first refusal it may have as to the
Available Space, then Landlord shall notify Tenant in writing of the following
basic business terms upon which the Landlord is willing to lease such space
(collectively referred to herein as the "Basic Business Terms"): (i) the
description of the Available Space; (ii) the term of the Lease; (iii) the tenant
improvements Landlord is willing to construct or that it will require to be
constructed and the contribution Landlord is willing to make to pay for such
tenant improvements; (iv) the rent for initial term or the formula to be used to
determine such rent (including, if applicable) free rent, Tenant's share of
taxes, assessments, operating expenses, insurance costs and the like; (v) any
option or options to extend (including the rent to be charged during the
extension periods); and (vi) any other material business term Landlord elects to
specify.
C. If Tenant, within ten (10) business days after receipt of
Landlord's notice, delivers to Landlord its written agreement to lease the
Available Space on the Basic Business Terms stated in Landlord's Notice, the
Landlord shall lease to Tenant and Tenant shall lease from Landlord the
Available Space on the terms and conditions in Landlord's Notice (the "Second
Lease") provided, however, that this Lease shall be modified to include, and the
Second Lease shall include, a cross-default provision providing
-42-
<PAGE>
that Tenant will be in default under both the Second Lease and this Lease, if it
is in default under either Lease.
D. If Tenant does not deliver to Landlord its written agreement to
the Second Lease on the terms contained in Landlord's notice within said ten
(10) business day period, then Landlord shall thereafter have the right to lease
the Available space on the same Basic business Terms set forth in Landlord's
notice and on such form of Lease, as Landlord chooses; provided, however, that
Landlord may make any changes to such form of lease at the request of any
prospective tenant to induce it to lease such space from Landlord so long as
Landlord does not change the Basic Business Terms set forth in Landlord's
notice.
E. The provisions of this paragraph shall terminate upon (i) the
expiration or earlier termination of this Lease; or (ii) any assignment by
Tenant of its interest in this Lease or the subletting by Tenant of
substantially all of the Premises for substantially all of the remainder of the
Lease Term; or (iii) as to any particular space, Tenant's failure to exercise
its right of refusal granted herein as to such space at its first opportunity to
do so.
F. Provided that Tenant shall have exercised its option to lease
Building D, Landlord shall, at least one hundred twenty (120) days before the
renewal date for the insurance carried by Landlord pursuant to Section 11.2,
provide Tenant with a statement identifying the material terms of such insurance
coverage, including the premiums payable, coverage limits and deductibles
required. In the event that Tenant reasonably determines that Tenant can
maintain such insurance at a cost to Tenant of at least five percent (5%) less
than the cost to Tenant of reimbursing the cost of maintaining such coverage to
Landlord, then Tenant shall be entitled to notify Landlord, no more than thirty
(30) days following receipt of Landlord's statement, that Tenant intends to
maintain such insurance. Tenant shall thereafter maintain the insurance
required by Section 11.2 hereof, in conformance with consistent requirements
imposed from time to time by the holders of
-43-
<PAGE>
mortgages or deeds of trust of the Premises, including, if required, delivery to
such parties of reasonably satisfactory evidence of the maintenance of such
coverage.
20. MISCELLANEOUS.
-------------
20.1 Estoppel Certificate.
--------------------
A. Tenant shall at any time upon not less than ten (10)
business days' prior written notice from Landlord execute, acknowledge and
deliver to Landlord a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying 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, (ii) acknowledging that there are not, to Tenant's knowledge,
any uncured defaults on the part of Landlord hereunder, or specifying such
defaults if any are claimed, and (iii) certifying, to the best of Tenant's
knowledge, such other information and facts concerning this lease as may be
reasonably requested by a lender making a loan to Landlord to be secured by a
deed of trust or mortgage covering the Premises or a purchaser of the Premises
from Landlord. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises.
B. Tenant's failure to deliver such statement within such time
shall be conclusive upon Tenant (i) that this Lease is in full force and effect
without modification except as may be represented by Landlord, (ii) that there
are no uncured defaults in Landlord's performance, and (iii) that not more than
one month's rent has been paid in advance.
20.2 Transfer of Landlord's Interest. In the event of a sale or
-------------------------------
conveyance by Landlord of Landlord's interest in the Premises other than a
transfer for security purposes only, Landlord shall be relieved from and after
the date specified in such notice of transfer of all obligations and liabilities
accruing thereafter on the part of the Landlord, provided that any funds in the
hands of Landlord at the time of transfer in which Tenant has an
-44-
<PAGE>
interest, shall be delivered to the successor of Landlord. This Lease shall not
be affected by any such sale and Tenant agrees to attorn to the purchaser or
assignee provided all of Landlord's obligations hereunder accruing after the
date of transfer are assumed in writing by the transferee.
20.3 Captions; Attachments; Defined Terms.
------------------------------------
A. The captions of the paragraphs of this Lease are for
convenience only and shall not be deemed to be relevant in resolving any
question of interpretation or construction of any section of this Lease.
B. Exhibits attached here to, and addenda and schedules
initialed by the parties, are deemed by attachment to constitute part of this
Lease and are incorporated herein.
C. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. Words used in neuter gender include
the masculine and feminine and words in the masculine and feminine gender
include the neuter If there be more than one Landlord or Tenant, the obligations
hereunder imposed upon Landlord or Tenant shall be joint and several. If the
Tenants are husband and wife, the obligations shall extend individually to their
sole and separate property as well as to their community property. The term
"Landlord" shall mean only the owner or owners at the time in question of the
fee title. The obligations contained in this Lease to be performed by Landlord
shall be binding on Landlord's successors and assigns only during their
respective periods of ownership.
20.4 Entire Agreement. This instrument along with any exhibits and
-----------------
attachments hereto constitutes the entire agreement between Landlord and Tenant
relative to the Premises and this Agreement and the exhibits and attachments may
be altered, amended or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant agree hereby that all prior or
contemporaneous oral agreements between and among themselves and their agents or
representatives relative to the leasing of the Premises are merged in or revoked
by this Agreement.
-45-
<PAGE>
20.5 Severability. If any term or provision of this Lease shall, to
------------
any extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term and provision of the Lease shall be valid and enforceable to the
fullest extent permitted by law.
20.6 Costs of Suit.
-------------
A. If Tenant or Landlord shall bring any action for any relief
against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of rent or possession of the
Premises, the losing party shall pay the successful party a reasonable sum for
attorneys' fees which shall be deemed to have accrued on the commencement of
such action and shall be paid whether or not such action is prosecuted to
judgment.
B. Should Landlord, without fault on Landlord's part, be made a
party to any litigation instituted by Tenant or by a third party against Tenant,
or by or against any person holding under or using the Premises by license of
Tenant, or for the foreclosure of any lien for labor or material furnished to or
for Tenant or any such other person or otherwise arising out of or resulting
from any act or transaction of Tenant or of any such other person, Tenant
covenants to save and hold Landlord harmless from any judgment rendered against
Landlord or the Premises or any part thereof, and all costs and expenses
incurred by Landlord or in connection with such litigation, including reasonable
attorneys' fees paid by Landlord to attorneys approved by Tenant.
20.7 Time; Joint and Several Liability. Time is of the essence of
---------------------------------
this Lease and each and every provision hereof, except as to the conditions
relating to the delivery of possession of the Premises to Tenant. All the terms,
covenants and conditions contained in this Lease to be performed by either party
shall consist of more than one person or organization, shall be deemed to be
joint and several, and all rights and remedies of the parties
-46-
<PAGE>
shall be cumulative and non-exclusive of another remedy at law or in equity.
20.8 Binding Effect; Choice of Law. The parties hereto agree that all
-----------------------------
the provisions hereof are to be construed as both covenants and conditions as
though the words importing such covenants and conditions were used in each
separate paragraph hereof; subject to any provision hereof restricting
assignment or subletting by Tenant and subject to Section 20.2, all of the
provisions hereof shall bind and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and assigns. This
Lease shall be governed by the laws of the State of California.
20.9 Waiver. No covenant, term or condition or the breach thereof,
------
shall be deemed waived, except by written consent of the party against whom the
waiver is claimed, and any waiver or the breach of any covenant, term or
condition shall not be deemed to be a waiver of any preceding or succeeding
breach of the same or any other covenant, term or condition.
20.10 Surrender of Premises. The voluntary or other surrender of this
---------------------
Lease by Tenant, or a mutual cancellation thereof shall not work a merger, and
shall, at the option of the Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of Landlord operate as an assignment to it
or any or all such subleases or subtenancies.
20.11 Holding Over. This Lease shall terminate without further notice
------------
at the expiration of the Lease Term. Any holding over by Tenant after expiration
shall not constitute a renewal or extension or give Tenant any rights in or to
the Premises except as expressly provided in this Lease; provided, however, that
in the event Tenant notifies Landlord in writing at least ninety (90) days
before the expiration of the Lease term, Tenant shall be entitled to a one-time
thirty (30) day extension of the expiration of the Lease term. Any holding over
after the expiration with or without the expressed or implied consent of
Landlord shall be construed to be a tenancy from month to month, at one hundred
percent (100%) of
-47-
<PAGE>
the monthly rent for the last month of the Lease Term during the first ninety
(90) days of such holding over, and thereafter at one hundred twenty-five
percent (125%) of such rent, and shall otherwise be on the terms and conditions
herein specified insofar as applicable.
20.12 Signs. Tenant shall not place any sign upon the Premises or the
-----
Outside Area without Landlord's prior written consent. Landlord hereby consents,
subject to compliance with requirements of the City of Santa Clara and to the
reasonable approval of Landlord of plans and specifications therefor, to the
erection of monument signs at such locations as Tenant shall reasonably require
and to the placement of identifying logos on the Building(s) constituting the
leased Premises. Following the expiration of the Lease term, Tenant shall remove
such logos from the Building(s) and shall restore the facade of the Building to
its condition existing prior to their erection. Obtaining permits for Tenant
signs as may be required by any governmental agency shall be the responsibility
of Tenant.
20.13 Reasonable Consent. Except as limited elsewhere in this Lease,
------------------
wherever in this Lease Landlord or Tenant is required to give consent or
approval to any action on the part of the other, such consent or approval shall
not be unreasonably withheld. In the event of failure to give any such consent,
the other party shall be entitled to specific performance at law and shall have
such other remedies to it under this Lease, but in no event shall Landlord or
Tenant be responsible in monetary damages for failure to give consent unless
said failure is withheld maliciously or in bad faith.
20.14 Interest on Past Due Obligations. Any amount due to Landlord not
--------------------------------
paid when due shall bear interest from the due date at a per annum rate equal to
three percent (3%) in excess of the then existing Bank of America prime rate, or
the maximum rate permitted by law, whichever is less.
20.15 Recording. Tenant shall not record this Lease without Landlord's
---------
prior written consent. Either party shall, upon
-48-
<PAGE>
request of the other, execute, acknowledged and deliver to the other a "short
form" memorandum of this Lease for recording purposes.
20.16 Notices. All notices or demands of any kind required or desired
-------
to be given by Landlord or Tenant hereunder shall be in writing and shall be
effective upon receipt or rejection at the addresses set forth below:
Landlord: MPJ
511 Division Street
Campbell, CA 95008
Attn: James D. Mair
Copy to: W. Leslie Pelio
560 Division Street
Campbell, CA 95008
Tenant: Apple Computer, Inc.
20525 Mariani Avenue, MS:16-0
Cupertino, CA 95014
Attn: Real Estate Dept.
Either party may change its address for notice by giving written notice to the
other party in accordance with the provisions of this paragraph.
20.17 Corporate Authority. If Tenant is a corporation, each
-------------------
individual executing this Lease on behalf of said corporation represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf
of said corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the Bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.
20.18 Partnership Authority. Each individual executing this Lease on
---------------------
behalf of Landlord represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of the Landlord and that this Lease is binding
upon Landlord in accordance with its terms.
21. BROKERAGE COMMISSIONS. Landlord and Tenant represent that they have
---------------------
not had any dealings with any real estate brokers or salesmen or incurred any
obligations for the payment of real estate brokerage commissions or finder's
fees which would be earned or due and payable by reason of the execution of this
Lease other than to Cornish & Carey Commercial Real Estate and Grubb & Ellis
Company
-49-
<PAGE>
(the "Brokers"). Landlord shall pay any commission due to the Brokers.
22. HAZARDOUS MATERIALS. Landlord and Tenant agree as follows with
-------------------
respect to the existence or use of "Hazardous Material" (as defined below) on
the Premises:
A. Tenant shall be entitled to cause such inspections, soils and
groundwater tests, and other evaluations to be made of the Premises as Tenant
deems necessary regarding (i) the presence and use of Hazardous Materials in or
about the Premises, and (ii) the potential for exposure of Tenant's employees
and other persons to any Hazardous Materials used and stored by previous
occupants in or about the Premises. To facilitate assigning responsibility for
the presence of any Hazardous Materials on the Premises, Tenant shall use its
best efforts to take all samples of soil and groundwater necessary in the course
of its inspection and evaluation before the Commencement Date as to each
Building, and shall thereafter cause the evaluation of such samples to be
conducted as promptly as reasonably possible.
B. Landlord hereby makes the following warranties and
representations to Tenant, each of which is made to the best of Landlord's
knowledge as of the date of this Lease:
(1) Any handling, transportation, storage, treatment, disposal,
release or use of Hazardous Materials that has occurred on the Premises prior to
the date hereof has been in compliance with all Hazardous Materials Laws.
(2) The Premises are, and Landlord's operations concerning the
Premises are, as of the date of this Lease, in compliance with all Hazardous
Materials Laws.
(3) The soil and groundwater on or under the Premises are free
of Hazardous Materials in amounts which would (i) violate any Hazardous
Materials Laws to the extent that any governmental entity could require either
Landlord or Tenant to take any remedial action with respect to such Hazardous
Materials, or (ii) pose a substantial risk of impairing the health of any
-50-
<PAGE>
person on or about the Premises (including, without limitation, Tenant's
employees, agents or invitees).
(4) Neither the Premises nor any improvements thereon or
personal property contained therein contains PCBs or asbestos.
(5) No litigation has been brought or threatened, nor any
settlements reached with any governmental or private party, concerning the
actual or alleged presence of Hazardous Materials on or about the Premises or
any disposal, release or threatened release of Hazardous Materials in or about
the Premises prior to the date of this Lease.
C. Landlord warrants and represents to Tenant that it has received
no notice of (i) any violation, or alleged violation, of any Hazardous Material
Law that has not been corrected to the satisfaction of the appropriate
authority, (ii) any pending claims relating to the presence of Hazardous
Material on the Premises, or (iii) any pending investigation by any governmental
agency concerning the Premises relating to Hazardous Materials. Landlord is not
aware of any reports, studies or other written evidence of any investigation of
the Premises to determine the presence of Hazardous Materials. Each party shall
deliver to the other copies of any report, study or other written evidence of
any such investigation which comes into the possession of such party. Tenant
shall notify Landlord in writing of all Hazardous Materials (except in
incidental quantities) which Tenant brings onto the premises.
D. Any handling, transportation, storage, treatment, disposal or use
of Hazardous Materials by Tenant in or about the Premises shall strictly comply
with all applicable Hazardous Materials Laws and shall be conducted in a manner
which will not impair the health of any person on or about the Complex.
E. Landlord at its sole expense shall remove from the Premises all
Hazardous Materials and all facilities and equipment existing as of the
Occupancy Date for each Building, whose removal is deemed necessary by an
independent, qualified consultant chosen by Tenant in order (i) to avoid a
violation at any time of
-51-
<PAGE>
Hazardous Materials Laws, (ii) to eliminate a substantial risk of impairing the
health of any person or about the Premises (including, without limitation,
Landlord's or Tenant's employees, agents or invitees), or (iii) to satisfy the
reasonably anticipated requirements of a financial institution which would be
imposed as a precondition to such financial institution's acquiring a security
or other interest in the Premises. All such facilities and equipment shall be
decommissioned in accordance with applicable Hazardous Materials Laws and proper
decommissioning shall be evidenced only by delivery to Tenant of reasonably
satisfactory evidence of such fact.
F. Landlord shall indemnify, defend upon demand with counsel
reasonably acceptable to Tenant, and hold harmless Tenant from and against any
and all (i) liabilities, judgments, interest, penalties, fines, monetary
sanctions, attorneys' fees, experts' fees, and court costs resulting from any
claim, demand, order or requirement of any governmental agency with jurisdiction
or any claim or demand brought or threatened by any party other than the parties
to this Lease, and (ii) reasonably incurred remediation costs, investigation
costs and related expenses which result from or arise in any manner whatsoever
out of:
(1) The breach of any warranty or inaccuracy of any
representation by Landlord or the failure of Landlord to perform any obligation
of Landlord contained in this Section 22;
(2) The presence of Hazardous Materials, as of the Occupancy
Date for each Building, as may be disclosed by the inspections, soils and
groundwater tests, other evaluations performed by Tenant, or otherwise disclosed
or discovered, in amounts which exceed the minimum action levels or other
standards imposed by Hazardous Materials Laws applicable at any time during the
Lease term in or under the Premises or in the soil or groundwater underneath the
Premises;
(3) Use, storage, release or disposal of Hazardous Materials on
or about the Promises by any party other than Tenant,
-52-
<PAGE>
or its agents, employees or contractors, after the Occupancy Date for each
Building;
(4) The exposure of any person to a Hazardous Material stored,
used or disposed of by any party other than Tenant in or about the Premises
after the Occupancy Date for each Building.
G. Tenant shall indemnify, defend upon demand with counsel
reasonably acceptable to Landlord, and hold harmless Landlord from and against
any and all liabilities, judgments, interest, penalties, fines, monetary
sanctions, attorneys' fees, experts' fees and court costs resulting from any
claim, demand, order or requirement of any governmental agency with jurisdiction
or any claim or demand brought or threatened by any party other than the parties
to this Lease, and (ii) reasonably incurred remediation costs, investigation
costs and other related expenses which result from or arise in any manner
whatsoever out of the following:
(1) The use, storage, release or disposal of Hazardous Materials
on or about the Premises by Tenant, its agents, employees, or contractors after
the date hereof;
(2) The exposure of any person to a Hazardous Material stored,
used, released or disposed of by Tenant, its agents, employees, or contractors
in or about the Premises after the date hereof.
H. As used herein, the term "Hazardous Materials" means any
substance, material or waste which is or becomes regulated by any local
governmental authority, the State of California, or the United States
Government. The term "Hazardous Materials" includes, without limitation, any
material or substance which is (i) defined as a "hazardous waste", "extremely
hazardous waste", or "restricted hazardous waste" under Sections 25115, 25117 or
15122.7, or listed pursuant to Section 25140 of the California Health and Safety
Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a
"hazardous substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8
-53-
<PAGE>
(Carpenter-Presley-Tanner Hazardous Substances Account Act), (iii) defined as a
"hazardous material", "hazardous substance", or "hazardous waste" under Section
25501 of the California Health and Safety Code, Division 20, Chapter 6.95
(Hazardous Materials Release, Response, Plans and Inventory), (iv) defined as a
"hazardous substance" under Section 25281 of the California Health and Safety
Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances),
(v) petroleum, (vi) asbestos, (vii) listed under Article 9 or defined as
"hazardous" or "extremely hazardous" pursuant to Article II of Title 22 of the
California Administrative Code, Division 4, Chapter 20, (viii) designated as a
"hazardous substance" pursuant to Section 311 of the Federal Water Pollution
Control Act, 33 U.S.C. 1251 et seq. or listed pursuant to Section 307 of the
Federal Water Pollution Control Act (33 U.S.C. 1317), (ix) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C. 6901 et seq., (x) defined as a "hazardous substance"
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensations, and Liability Act, 42 U.S.C. 9601 et seq., or (xi) regulated
under the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.
I. Landlord and Tenant shall each give written notice to the other
as soon as reasonably practicable of (i) any communication received from any
governmental authority concerning Hazardous Material which relates to the
Premises and (ii) any contamination of the Premises by Hazardous Materials which
constitutes a violation of any Hazardous Material Law.
J. The obligations of Landlord and Tenant under this Section 22
shall survive the expiration or earlier termination of this Lease.
K. The rights and obligations of Landlord and Tenant with respect to
issues relating to Hazardous Material are exclusively established by this
Section 22. In the event of any inconsistency between any other part of this
Lease and this Section 22, the terms of this Section 22 shall control.
-54-
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the date
and year first above written.
LANDLORD: TENANT:
MPJ, a California APPLE COMPUTER, INC.,
general partnership a California corporation
By: /s/ James D. Mair By: /s/ Del Yocam
----------------------- ---------------------------
Del Yocam, Executive Vice
Title: General Partner President and Chief
-------------------- Operating Officer
By: /s/ W. Leslie Pelio
-----------------------
Title: General Partner
--------------------
-55-
<PAGE>
EXHIBIT "B"
-----------
IMPROVEMENTS
------------
1. The Premises shall be delivered to Tenant in their present condition.
Landlord shall not be required to construct, furnish or install any work,
alterations, additions or improvements to the Premises.
2. Tenant, at its expense, shall construct, furnish or install all
improvements, equipment or fixtures within the Premises that are necessary for
Tenant's occupancy and use of the Premises (hereinafter referred to as "Tenant's
Work"). Tenant's Work shall be in conformity with plans submitted to and
approved by Landlord and shall be performed all in accordance with the following
provisions:
A. Tenant shall cause all plans, drawings and specifications for
Tenant's Work, whether preliminary or final, to be prepared by licensed
architects and, where appropriate, mechanical, electrical and structural
engineers. Tenant shall cause all plans, drawings and specifications for
Tenant's Work to be prepared in strict compliance with all applicable
governmental laws, ordinances, codes and regulations.
B. Tenant shall prepare and submit to Landlord for its approval,
which approval shall be given or refused within seven (7) days after submission
of such drawings and if not refused within such time shall be deemed given, as
to design, two sets of fully dimensioned scaled preliminary drawings of the
Premises and Tenant's proposed work therein.
C. Following approval of Tenant's preliminary drawings by Landlord,
Tenant shall prepare final plans and specifications for Tenant's Work in
conformity with such approved preliminary drawings, and shall furnish two copies
of such final plans and specifications to Landlord for its determination as to
the conformity with approved preliminary drawings and for its approval as to any
matters not shown in the approved preliminary drawings. Landlord shall approve
or disapprove such final plans and specifications within seven (7) days
following receipt of the same
-56-
<PAGE>
and in the event of disapproval, Tenant shall promptly revise and resubmit such
final plans and specifications as required by Landlord.
D. After approval of final plans and specifications by Landlord,
Tenant shall at its sole cost, obtain all required building permits and other
governmental approvals necessary to commence Tenant's Work. Immediately
following the issuance of the building permits and other governmental approval,
Tenant shall proceed forthwith to commence and complete performance of Tenant's
Work. Tenant's contractors and subcontractors shall be acceptable to and
approved by Landlord. Any damage to the Building of which the Premises are a
part caused by Tenant or its contractors or subcontractors in connection with
the performance of Tenant's Work shall be repaired at Tenant's expense.
E. Any changes in Tenant's Work from the final plans and
specifications approved by Landlord shall be subject to Landlord's approval, and
Tenant shall pay all costs incurred by Landlord in reviewing any requested
change.
F. Upon completion of Tenant's Work, Tenant shall furnish to
Landlord for its permanent files one reproducible set of "as built" drawings
showing Tenant's Work as constructed or installed in the Premises.
3. If Tenant is not in default under this Lease and the Lease is in full
force and effect, Landlord shall make available to Tenant the sum of Five
Hundred Sixty-Four Thousand Four Hundred Eighty Dollars ($564,480.00) towards
the cost of Tenant's Work in Building A, the sum of Seven Hundred Seventy-Four
Thousand One Hundred Sixty Dollars ($774,166.00) towards the cost of Tenant's
Work in Building B, and Eight Hundred Eighty-Nine Thousand Three Hundred Sixty
Dollars ($889,360.00) towards the cost of Tenant's Work in Building C, in
accordance with the terms and conditions of this Paragraph 3 (the "Improvement
Allowance"). In the event that Tenant elects not to apply the entire amount of
the Improvement Allowance designated for a particular Building in the
improvement of that building, Tenant shall be entitled to apply the Improvement
-57-
<PAGE>
Allowance to the remaining Building, providing that Tenant shall apply a minimum
amount of the Improvement Allowance to each Building equal to the product of
Five Dollars ($5.00) and the number of square feet comprising such Building, and
further provided that the Improvement Allowance shall be applied to general
purpose improvements. Upon the Commencement Date for each Building, on Tenant's
request, Landlord shall reimburse Tenant up to the foregoing dollar sums, for
the cost of Tenant's Work, provided that Tenant shall furnish Landlord:
A. A statement from Tenant's architect certifying that the final
plans and specifications were prepared in compliance with applicable Laws and,
to the best of the architect's knowledge, that the Tenant's Work has been
completed in compliance with the approved final plans and specifications;
B. An itemized statement of such costs, certified as correct by
Tenant;
C. Copies of paid invoices evidencing that all work for which
reimbursement is requested has been paid for in full by Tenant;
D. Unconditional mechanic's lien releases from Tenant's general
contractors, suppliers, materialmen and all subcontractors who have done work or
supplied materials to the Premises; and
E. An estoppel certificate executed by Tenant as described in
Paragraph 20.1 of the Lease.
Landlord's reimbursement obligation shall apply to any portion of the cost
of Tenant's Work as to which Tenant fulfills its obligations in this paragraph
3. In the event that payment for any portion of the Tenant's Work is the
subject of a good faith dispute, Landlord shall be entitled to withhold from the
amount which would otherwise be reimbursable to Tenant a sum equal to one and
one-half (1-1/2) times the amount in dispute. Landlord shall hold such withheld
sums in an interest-bearing account and shall pay the sums so withheld to Tenant
upon Tenant's compliance with this paragraph 3, together with the interest so
earned.
-58-
<PAGE>
In the event that any lien is recorded against Landlord's interest in the
Complex as a result of construction performed for Tenant pursuant to this
Exhibit B, Landlord shall be entitled to require Tenant to cause such lien to be
released of record as provided in Section 9 of the Lease and, in the event that
Tenant pays or bonds over such lien, and provided Tenant has complied with the
provisions of this paragraph 3, Landlord shall release to Tenant the sums
withheld.
4. Provided that Tenant has complied with its obligations pursuant to
paragraph 3, if Landlord does not reimburse the full amount of the Improvement
Allowance to tenant when due, Tenant shall be entitled, among its other rights
or remedies, to offset against Base Monthly Rent, the amount of the Improvement
Allowance due, together with interest at the rate stated in Section 20.14.
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
-59-
<PAGE>
EXHIBIT B
SUBLEASED PREMISES
------------------
<PAGE>
EXHIBIT C
CONFIRMATION OF COMMENCEMENT DATE AGREEMENT
-------------------------------------------
THIS CONFIRMATION OF COMMENCEMENT DATE AGREEMENT is entered into by and
between Apple Computer, Inc., a California corporation ("Sublessor") and NVidia,
a Delaware corporation ("Sublessee") with respect to the following facts:
A. Sublessor and Sublessee entered into a Sublease dated as of April 2, 1998
with respect to those certain premises commonly known as 3535 Monroe Drive,
Santa Clara, California (the "Subleased Premises").
B. Because the master landlord, MPJ, a California general partnership, was
required to consent to the Sublease, the commencement date of the Subleased was
not fixed. The parties hereto desire to set forth herein the commencement date
of the Sublease and such other matters as may pertain thereto.
NOW, THEREFORE, the parties agree as follows:
1. The term of the Sublease commenced on ________________, 1998, and
will expire on December 31, 2002. Sublessee has accepted full and complete
possession of the Subleased Premises. All of Sublessor's obligations which have
accrued prior to the date hereof have been performed.
2. The Base Monthly Rent owing under Paragraph 3.1 of the Sublease is as
follows:
Insert Dates in lieu of months 1-12 insert Base Monthly Rent
Insert Dates in lieu of months 13-24 insert Base Monthly Rent
Insert Dates in lieu of months 25-36 insert Base Monthly Rent
Insert Dates in lieu of months 37-48 insert Base Monthly Rent
Insert Dates in lieu of months 49-55 insert Base Monthly Rent
3. All other terms and conditions of the Sublease shall remain unmodified
and in full force and effect.
APPLE COMPUTER, INC. NVIDIA
a California corporation a Delaware corporation
By: By:
------------------------------- -------------------------------
Its: Its:
------------------------------ -----------------------------
Date: Date:
----------------------------- -----------------------------
<PAGE>
EXHIBIT D
PARKING
-------
<PAGE>
EXHIBIT E
ENVIRONMENTAL REPORT
--------------------
<PAGE>
EXHIBIT F
TERMS OF FURNITURE PURCHASE
---------------------------
1. Purchase of Furniture. The total purchase price for the Furniture is
---------------------
Three Hundred Fifty Six Thousand Eight Hundred Dollars ($356,800.00) which
includes the California state tax (together, the "Furniture Price"). Upon
execution of this Sublease, Sublessee agrees to purchase the furniture as
itemized on the attached Schedule A (the "Initial Furniture"). Upon execution
of the Sublease, Sublessee shall pay to Sublessor a deposit in the amount of
Fifty Six Thousand Eight Hundred Dollars ($56,800.00) which will be applied to
the purchase price of the Furniture. Commencing on the Commencement Date of the
Sublease, Sublessee shall pay to Sublessor in twelve (12) equal monthly
installments (without interest) of Twenty Five Thousand Dollars ($25,000.00)
concurrently with Base Monthly Rent. The final installment of the Furniture
Price shall be due and payable on May 31, 1999.
2. Title to Furniture.
------------------
2.1 Furniture. Upon Sublessee's payment to Sublessor of the entire
---------
remaining balance of the Furniture Price, Sublessor agrees to convey legal title
to the Furniture itemized on the attached Schedule A (the "Furniture"), by bill
of sale reasonably acceptable to Sublessee. Such conveyance shall be without
representation or warranty whatsoever, except that Sublessor shall warrant that
it holds legal title to the Remaining Furniture and that such Remaining
Furniture is free and clear of all encumbrances created by or through Sublessor.
2.3 Sublease Termination. In the event that this Sublease terminates
--------------------
due to a default by Sublessee which was not cured within any applicable grace
period, Sublessee's right to acquire title to any furniture for which a bill of
sale has not been given by Sublessor in accordance with paragraphs 2.1 or 2.2
above (or for which Sublessee is not otherwise entitled to pursuant to the terms
thereof) shall terminate concurrently therewith. Upon such termination,
Sublessor shall be entitled to retain all Furniture Payments made to the date of
the termination and shall maintain full legal title to the Furniture for which a
bill of sale has not been given by Sublessor in accordance with paragraphs 2.1
or 2.2 above (or for which Sublessee is not otherwise entitled to pursuant to
the terms thereof). For example, if the Furniture Price allocable to the
Initial Furniture is fully paid and the Sublease terminates after some payments
of the Furniture Price allocable to the Remaining Furniture have already been
made to Sublessor, Sublessee shall have no right whatsoever to claim title to
any portion of the Remaining Furniture or to obtain any refund of such payments.
In the event of a termination of the Sublease due to a casualty or condemnation
as set forth in Sections 12 and 13 of the Master Lease, respectively, Sublessee
may acquire legal title to that portion of the Furniture for which full payment
of the Furniture Price has not yet been paid by making full payment to Sublessor
prior to the date of termination. If Sublessee fails to pay the outstanding
balance of the Furniture Price by such termination date, Sublessor shall be
entitled to retain all Furniture Payments made to the date of the Termination
and shall maintain full legal title to the Furniture for which a bill of sale
has not been given by Sublessor in accordance with paragraphs 2.1 or 2.2 above
(or for which Sublessee is not otherwise entitled to pursuant to the terms
thereof).
3. Maintenance and Repair of Furniture. The Furniture is currently
-----------------------------------
located in the Sublease Premises. By entering into this Sublease, Sublessee
accepts the Furniture in its current condition, "as-is", and without
representation or warranty of any kind. Sublessee shall not remove from the
Sublease Premises the Furniture for which Sublessee has not yet received a bill
of sale from Sublessor until the entire Furniture Price has been paid in full to
Sublessor. Prior to payment of the entire Furniture Price to Sublessor,
Sublessee shall maintain in good condition and repair that portion of the
Furniture for which Sublessee has not yet received a bill of sale from
Sublessor. Upon expiration of the Sublease term or any earlier termination of
this Sublease, if Sublessee has
<PAGE>
failed to pay the entire Furniture Price to Sublessor as provided herein,
Sublessee shall surrender the Furniture for which Sublessee has not yet received
a bill of sale in accordance with paragraphs 2.1 or 2.2 above (or for which
Sublessee is not otherwise entitled to pursuant to the terms thereof) in the
same condition as that Furniture is in on the Commencement Date, normal wear and
tear excepted.
<PAGE>
EXHIBIT G
SUBLESSEE'S TENANT IMPROVEMENTS
-------------------------------