California-Redwood City-Seaport Centre Lease - Metropolitan Life Insurance Co. and Phone.com Inc.
LEASE
BETWEEN
METROPOLITAN LIFE INSURANCE COMPANY (LANDLORD)
AND
PHONE.COM, INC. (TENANT)
SEAPORT CENTRE
Redwood City, California
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE ONE - BASIC LEASE PROVISIONS......................................... 1
1.01 BASIC LEASE PROVISIONS................................ 1
1.02 ENUMERATION OF EXHIBITS & RIDER(S).................... 3
1.03 DEFINITIONS........................................... 3
ARTICLE TWO - PREMISES, TERM, FAILURE TO GIVE POSSESSION, COMMON AREAS AND
PARKING........................................................ 6
2.01 LEASE OF PREMISES..................................... 6
2.02 TERM.................................................. 7
2.03 FAILURE TO GIVE POSSESSION............................ 7
2.04 AREA OF PREMISES...................................... 7
2.05 CONDITION OF PREMISES................................. 7
2.06 COMMON AREAS & PARKING................................ 7
ARTICLE THREE - RENT......................................................... 7
ARTICLE FOUR - OPERATING EXPENSES RENT ADJUSTMENTS AND PAYMENTS.............. 8
4.01 TENANTS SHARE OF OPERATING EXPENSES................... 8
4.02 RENT ADJUSTMENTS...................................... 8
4.03 STATEMENT OF LANDLORD................................. 9
4.04 BOOKS AND RECORDS..................................... 9
4.05 TENANT OR LEASE SPECIFIC TAXES........................ 9
ARTICLE FIVE - SECURITY DEPOSIT.............................................. 9
ARTICLE SIX - UTILITIES & SERVICES........................................... 10
6.01 LANDLORD'S GENERAL SERVICES........................... 10
6.02 TENANT TO OBTAIN & PAY DIRECTLY....................... 10
6.03 TELEPHONE SERVICES.................................... 10
6.04 FAILURE OR INTERRUPTION OF UTILITY OR SERVICE......... 11
6.05 CHOICE OF SERVICE PROVIDER............................ 11
6.06 SIGNAGE............................................... 11
ARTICLE SEVEN - POSSESSION, USE AND CONDITION OF PREMISES.................... 12
7.01 POSSESSION AND USE OF PREMISES........................ 12
7.02 HAZARDOUSMATERIAL..................................... 12
7.03 LANDLORD ACCESS TO PREMISES; APPROVALS................ 14
7.04 QUIET ENJOYMENT....................................... 14
ARTICLE EIGHT - MAINTENANCE.................................................. 15
8.01 LANDLORD'S MAINTENANCE................................ 15
8.02 TENANT'S MAINTENANCE.................................. 15
ARTICLE NINE -ALTERATIONS AND IMPROVEMENTS................................... 15
9.01 TENANT ALTERATIONS.................................... 15
9.02 LIENS................................................. 16
ARTICLE TEN - ASSIGNMENT AND SUBLETTING...................................... 16
10.01 ASSIGNMENT AND SUBLETTING............................. 16
10.02 RECAPTURE............................................. 18
10.03 EXCESS RENT........................................... 18
10.04 TENANT LIABILITY...................................... 18
10.05 ASSUMPTION AND ATTORNMENT............................. 18
ARTICLE ELEVEN - DEFAULT AND REMEDIES........................................ 18
11.01 EVENTS OF DEFAULT..................................... 18
11.02 LANDLORD'S REMEDIES................................... 19
11.03 ATTORNEY'S FEES....................................... 20
11.04 BANKRUPTCY............................................ 21
11.05 LANDLORD'S DEFAULT.................................... 21
ARTICLE TWELVE - SURRENDER OF PREMISES....................................... 21
12.01 IN GENERAL............................................ 21
12.02 LANDLORD'S RIGHTS..................................... 22
ARTICLE THIRTEEN - HOLDING OVER.............................................. 22
i
<PAGE>
ARTICLE FOURTEEN - DAMAGE BY FIRE OR OTHER CASUALTY.......................... 22
14.01 SUBSTANTIAL UNTENANTABILITY........................... 22
14.02 INSUBSTANTIAL UNTENANTABILITY......................... 23
14.03 RENT ABATEMENT........................................ 23
14.04 WAIVER OF STATUTORY REMEDIES.......................... 23
ARTICLE FIFTEEN - EMINENT DOMAIN............................................. 23
15.01 TAKING OF WHOLE OR SUBSTANTIAL PART................... 23
15.02 TAKING OF PART........................................ 24
15.03 COMPENSATION.......................................... 24
ARTICLE SIXTEEN - INSURANCE.................................................. 24
16.01 TENANT'S INSURANCE.................................... 24
16.02 FORM OF POLICIES...................................... 24
16.03 LANDLORD'S INSURANCE.................................. 25
16.04 WAIVER OF SUBROGATION................................. 25
16.05 NOTICE OF CASUALTY.................................... 26
ARTICLE SEVENTEEN - WAIVER OF CLAIMS AND INDEMNITY........................... 26
17.01 WAIVER OF CLAIMS...................................... 26
17.02 INDEMNITY BY TENANT................................... 26
ARTICLE EIGHTEEN - RULES AND REGULATIONS..................................... 27
18.01 RULES................................................. 27
18.02 ENFORCEMENT........................................... 27
ARTICLE NINETEEN - LANDLORD'S RESERVED RIGHTS................................ 27
ARTICLE TWENTY - ESTOPPEL CERTIFICATE........................................ 27
20.01 IN GENERAL............................................ 27
20.02 ENFORCEMENT........................................... 28
ARTICLE TWENTY-ONE - RELOCATION OF TENANT.................................... 28
ARTICLE TWENTY-TWO - REAL ESTATE BROKERS..................................... 28
ARTICLE TWENTY-THREE - MORTGAGEE PROTECTION.................................. 28
23.01 SUBORDINATION AND ATTORNMENT.......................... 28
23.02 MORTGAGEE PROTECTION.................................. 29
ARTICLE TWENTY-FOUR - NOTICES................................................ 29
ARTICLE TWENTY-FIVE - EXERCISE FACILITY...................................... 30
ARTICLE TWENTY-SIX - MISCELLANEOUS........................................... 30
26.01 LATE CHARGES.......................................... 30
26.02 NO JURY TRIAL; VENUE; JURISDICTION.................... 30
26.03 DEFAULT UNDER OTHER LEASE............................. 30
26.04 OPTION................................................ 31
26.05 TENANT AUTHORITY...................................... 31
26.06 ENTIRE AGREEMENT...................................... 31
26.07 MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE........ 31
26.08 EXCULPATION........................................... 31
26.09 ACCORD AND SATISFACTION............................... 31
26.10 LANDLORD'S OBLIGAT1ONS ON SALE OF BUILDING............ 31
26.11 BINDING EFFECT........................................ 31
26.12 CAPTIONS.............................................. 31
26.13 T1ME; APPLICABLE LAW; CONSTRUCTION.................... 31
26.14 ABANDONMENT........................................... 32
26.15 LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES........... 32
26.16 SECURITY SYSTEM....................................... 32
26.17 NO LIGHT, AIR OR VIEW EASEMENTS....................... 32
26.18 RECORDATION........................................... 32
26.19 SURVIVAL.............................................. 32
26.20 RIDERS................................................ 33
ii
<PAGE>
LEASE
ARTICLE ONE
BASIC LEASE PROVISIONS
1.01 BASIC LEASE PROVISIONS
In the event of any conflict between these Basic Lease Provisions and any other
Lease provision, such other Lease provision shall control.
(1) BUILDING AND ADDRESS:
The Premises is comprised of two parts, respectively the Penobscot Space
and the Saginaw Space, described below, located in parts of the 2 Buildings
described below, subject to provisions of Rider 2:
As to the Penobscot Space:
-------------------------
Building Number 12, located in Phase II ("Tenant's Phase" shall refer to
each respective Phase of the Project in which the Premises are located) of
Seaport Centre
As to the Saginaw Space:
-----------------------
Building Number 1, located in Phase I ("Tenant's Phase" shall refer to each
respective Phase of the Project in which the Premises are located) of
Seaport Centre
(2) LANDLORD AND ADDRESS:
Metropolitan Life Insurance Company,
a New York corporation
Notices to Landlord shall be addressed:
Metropolitan Life Insurance Company
c/o Seaport Centre Manager
701 Chesapeake Drive
Redwood City, CA 94063
with copies to the following:
Until February 29, 2000:
-----------------------
Metropolitan Life Insurance Company
101 Lincoln Centre Drive, Suite 600
Foster City, CA 94404
Attention: EIM Manager
and
After February 29, 2000:
-----------------------
Metropolitan Life Insurance Company
400 South El Camino Real, Eighth Floor
San Mateo, CA 94402
Attention: EIM Manager
(3) TENANT AND CURRENT ADDRESS
(a) Name: Phone.com, Inc. (sometimes referred to herein
as "Phone.com")
(b) State of incorporation: Delaware
Notices to Tenant shall be addressed:
Phone.com, Inc
800 Chesapeake Drive
Redwood City, CA 94063
Attention: Real Estate and Facilities
(4) DATE OF LEASE: as of January 21, 2000
(5) LEASE TERM: As defined and described in Section 1.03 below and Section 3 of
Rider 2.
(6) COMMENCEMENT DATE: The Commencement Date shall be determined separately for
each of the Penobscot Space and the Saginaw Space, as specified in Section
3 of Rider 2.
1
<PAGE>
(7) PROJECTED EXPIRATION DATE: The date which is 5 years after the later of the
Commencement Date for the Penobscot Space or the Commencement Date for the
Saginaw Space.
(8) MONTHLY BASE RENT: For the Premises is the combined Monthly Base Rent for
each of the Saginaw Space and the Penobscot Space, as and when due as set
forth in this Lease. In light of the different provisions with respect to
delivery and the Commencement Date of the Penobscot Space set forth in
Rider 2, the amount of Monthly Base Rent for each space is set forth
separately below.
Saginaw Space (initial monthly installment for the Saginaw Space due upon
Tenant's execution):
Period from Commencement Date MONTHLY Monthly Rate Per Square
-------------------------------- ------- -----------------------
of Space to Expiration Date (ED) Foot of Rentable Area
-------------------------------- -----------------------
Months 0l - 12 $74,802.50 $2.500
Months 13 - 24 $77,794.60 $2.600
Months 25 - 36 $80,906.38 $2.704
Months 37 - 48 $84,142.64 $2.812
Months 49 - ED $87,508.34 $2.925
Penobscot Space (initial monthly installment for the Penobscot Space due upon
Tenant's execution, subject to Section 3 of Rider 2):
Period from Commencement Date MONTHLY Monthly Rate Per Square
----------------------------- ------- -----------------------
of Space to Expiration Date (ED) Foot of Rentable Area
-------------------------------- -----------------------
Months 0l - 12 $46,280.00 $2.500
Months 13 - 24 $48,131.20 $2.600
Months 25 - 36 $50,056.45 $2.704
Months 37 - 48 $52,058.71 $2.812
Months 49 - ED $54,141.05 $2.925
(9) RENT ADJUSTMENT DEPOSIT (initial monthly rate, until further notice): At
the beginning of the Term, unless and until the Commencement Date has
occurred for the Penobscot Space in addition to the Saginaw Space, the Rent
Adjustment Deposit payable by Tenant shall be only for that space for which
the Commencement Date has occurred, and for such purposes, it is agreed
that the Rent Adjustment Deposit (at the initial monthly rate) shall be
allocated between the spaces at the rate of $0.44 per square foot of
Rentable Area of such space per month.
(10) RENTABLE AREA OF THE PREMISES:
For the Penobscot Space: 18,512 square feet
For the Saginaw Space: 29,921 square feet
Premises (both spaces) 48,433 square feet
(11) RENTABLE AREA OF THE BUILDING:
For the Penobscot Space -- Building 12: 82,320 square feet
For the Saginaw Space -- Building I: 61 338 square feet
(12) RENTABLE AREA OF THE PHASE:
For the Penobscot Space -- Phase II: 235,620 square feet
For the Saginaw Space -- Phase I: 301,824 square feet
(13) RENTABLE AREA OF THE PROJECT: 537,444 square feet
(14) SECURITY DEPOSIT: Eight Hundred and Forty-nine Thousand Eight Hundred and
Ninety-six Dollars and Thirty-six Cents ($849,896.36) due upon Tenant's
execution, subject to Sections 3 and 7 of Rider 2.
(15) SUITE NUMBER &/OR ADDRESS OF PREMISES:
For the Penobscot Space: 595 Penobscot Drive, Redwood City, CA 94063
For the Saginaw Space: 101 Saginaw Drive, Redwood City, CA 94063
(16) TENANTS SHARE:
For the Penobscot Space:
-----------------------
Tenants Building Share: 22.49%
Tenants Phase Share: 07.86%
Tenants Project Share: 03.44%
2
<PAGE>
For the Saginaw Space:
---------------------
Tenant's Building Share. 48.78%
Tenant's Phase Share: 09.91%
Tenant's Project Share: 05.57%
(17) TENANT'S USE OF PREMISES: General office use and software research and
development.
(18) PARKING SPACES: 160. Such number is for the Premises (including both the
Penobscot Space and the Saginaw Space); however, unless and until the
Delivery Date has occurred for the Penobscot Space in addition to the
Saginaw Space, the number of parking spaces shall be only the number
allocable to the space for which the Delivery Date has occurred, and for
such purposes, it is agreed that the parking spaces shall be allocated
between the spaces as follows:
99 for the Saginaw Space
61 for the Penobscot Space
(19) BROKERS:
Landlord's Broker Cornish and Carey Commercial
Tenant's Broker: Wayne Mascia Associates
1.02 ENUMERATION OF EXHIBITS & RIDER(S)
The Exhibits and Rider(s) set forth below and attached to this Lease are
incorporated in this Lease by this reference:
EXHIBIT A Plan of Premises
---------
EXHIBIT B Workletter Agreement (intentionally omitted)
---------
EXHIBIT C Site Plan of Project
---------
EXHIBIT D Form of Subordination, Nondisturbance and Attornment
---------
EXHIBIT E Antenna; Roof Space & Cable Path
---------
RIDER 1 Commencement Date Agreement
RIDER 2 Additional Provisions
1 .03 DEFINITIONS
For purposes hereof, the following terms shall have the following meanings:
ADJUSTMENT YEAR: The applicable calendar year or any portion thereof after the
Commencement Date of this Lease for which a Rent Adjustment computation is being
made.
AFFILIATE: As defined in Section 10.01(f).
BUILDING: Each building in which the Premises is located, as specified in
Section 1.01(1).
BUILDING OPERATING EXPENSES: Those Operating Expenses described in Section 4.01.
COMMENCEMENT DATE: The Commencement Date shall be determined separately for each
of the Penobscot Space and the Saginaw Space, as described in Section 1.01(6)
above and Section 3 of Rider 2.
COMMON AREAS: All areas of the Project made available by Landlord from time to
time for the general common use or benefit of the tenants of the Building or
Project, and their employees and invitees, or the public, as such areas
currently exist and as they may be changed from time to time.
DECORATION: Tenant Alterations which do not require a building permit and which
do not affect the facade or roof of the Building, or involve any of the
structural elements of the Building, or involve any of the Building's systems,
including its electrical, mechanical, plumbing, security, heating, ventilating,
air-conditioning, communication, and fire and life safety systems.
DEFAULT RATE: Two (2) percentage points above the rate then most recently
announced by Bank of America N.T.& S.A. at its San Francisco main office as its
corporate base lending rate, from time to time announced, but in no event higher
than the maximum rate permitted by Law.
DELIVERY DATE: The date for Landlord's delivery to Tenant of possession of the
Premises, if different from the Commencement Date, as provided in Rider 2.
ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or generation
of any Hazardous Material or pertaining to environmental conditions on, under or
about the Premises or any part of the Project, including the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended
3
<PAGE>
(42 U.S.C. Section 9601 et seq.), and the Resource Conservation and Recovery Act
-- ---
of 1976, as amended (42 U.S.C. Section 6901 et seq.).
-- ---
EXPIRATION DATE: The date specified in Section 1.01(7) unless changed by
operation of Article Two or Rider 2.
FORCE MAJEURE: Any accident, casualty, act of God, war or civil commotion,
strike or labor troubles, or any cause whatsoever beyond the reasonable control
of Landlord, including water shortages, energy shortages or governmental
preemption in connection with an act of God, a national emergency, or by reason
of Law, or by reason of the conditions of supply and demand which have been or
are affected by act of God, war or other emergency.
HAZARDOUS MATERIAL: Such substances, material and wastes which are or become
regulated under any Environmental Law; or which are classified as hazardous or
toxic or medical waste or biohazardous waste under any Environmental Law; and
explosives, firearms and ammunition, flammable material, radioactive material,
asbestos, polychlorinated biphenyls and petroleum and its byproducts.
INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of the
Property, the property manager and the leasing manager for the Property and
their respective directors, officers, agents and employees.
LAND: The parcel(s) of real estate on which the Building and Project are
located.
LANDLORD WORK: The construction or installation of improvements to be furnished
by Landlord, if any, specifically described in Rider 2 attached hereto.
LAWS OR LAW: All laws, ordinances, rules, regulations, other requirements,
orders, rulings or decisions adopted or made by any governmental body, agency,
department or judicial authority having jurisdiction over the Property, the
Premises or Tenant's activities at the Premises and any covenants, conditions or
restrictions of record which affect the Property.
LEASE: This instrument and all exhibits and riders attached hereto, as may be
amended from time to time.
LEASE YEAR: The twelve month period beginning on the first day of the first
month following the Commencement Date (unless the Commencement Date is the first
day of a calendar month in which case beginning on the Commencement Date), and
each subsequent twelve month, or shorter, period until the Expiration Date.
MONTHLY BASE RENT: The monthly rent specified in Section 1.01(8).
MORTGAGEE: Any holder of a mortgage, deed of trust or other security instrument
encumbering the Property.
NATIONAL HOLIDAYS: New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and other holidays recognized by the Landlord
and the janitorial and other unions servicing the Building in accordance with
their contracts.
OPERATING EXPENSES: All Taxes, costs, expenses and disbursements of every kind
and nature which Landlord shall pay or become obligated to pay in connection
with the ownership, management, operation, maintenance, replacement and repair
of the Property (including the amortized portion of any capital expenditure or
improvement, together with interest thereon, expenses of changing utility
service providers, and any dues, assessments and other expenses pursuant to any
covenants, conditions and restrictions, or any reciprocal easements, or any
owner's association now or hereafter affecting the Project). Operating Expenses
shall be allocated among the categories of Project Operating Expenses, Building
Operating Expenses or Phase Operating Expenses as provided in Article Four. If
any Operating Expense, though paid in one year, relates to more than one
calendar year, at the option of Landlord such expense may be proportionately
allocated among such related calendar years. Operating Expenses shall include
the following, by way of illustration only and not limitation: (1) all Taxes;
(2) all insurance premiums and other costs (including deductibles), including
the cost of rental insurance; (3) all license, permit and inspection fees; (4)
all costs of utilities, fuels and related services, including water, sewer,
light, telephone, power and steam connection, service and related charges; (5)
all costs to repair, maintain and operate heating, ventilating and air
conditioning systems, including preventive maintenance; (6) all janitorial,
landscaping and security services; (7) all wages, salaries, payroll taxes,
fringe benefits and other labor costs, including the cost of workers'
compensation and disability insurance; (8) all costs of operation, maintenance
and repair of all parking facilities and other common areas; (9) all supplies,
materials, equipment and tools; (10) dues, assessments and other expenses
pursuant to any covenants, conditions and restrictions, or any reciprocal
easements, or any owner's association now or hereafter affecting the Project;
(11) modifications to the Building or the Project occasioned by Laws now or
hereafter in effect; (12) the total charges of any independent contractors
employed in the care, operation, maintenance, repair, leasing and cleaning of
the Project, including landscaping, roof maintenance, and repair, maintenance
and monitoring of life-safety systems, plumbing systems, electrical wiring and
Project signage; (13) the cost of accounting services necessary to compute the
rents and charges payable by tenants at the Project; (14) exterior window and
4
<PAGE>
exterior wall cleaning and painting; (15) managerial and administrative
expenses; (16) all costs in connection with the exercise facility at the
Project; (17) all costs and expenses related to Landlord's retention of
consultants in connection with the routine review, inspection, testing,
monitoring, analysis and control of Hazardous Material, and retention of
consultants in connection with the clean-up of Hazardous Material (to the extent
not recoverable from a particular tenant of the Project), and all costs and
expenses related to the implementation of recommendations made by such
consultants concerning the use, generation, storage, manufacture, production,
storage, release, discharge, disposal or clean-up of Hazardous Material on,
under or about the Premises or the Project (to the extent not recoverable from a
particular tenant of the Project); (18) all capital improvements made for the
purpose of reducing or controlling other Operating Expenses, and all other
capital expenditures, but only as amortized over such reasonable period as
Landlord shall determine, together with interest thereon (not to exceed market
rates); (19) all property management costs and fees, including all costs in
connection with the Project property management office; and (20) all fees or
other charges incurred in conjunction with voluntary or involuntary membership
in any energy conservation, air quality, environmental, traffic management or
similar organizations. Operating Expenses shall not include: (a) costs of
alterations of space to be occupied by new or existing tenants of the Project;
(b) depreciation charges; (c) interest and principal payments on loans (except
for loans for capital expenditures or improvements which Landlord is allowed to
include in Operating Expenses as provided above); (d) ground rental payments;
(e) real estate brokerage and leasing commissions; (f) advertising and marketing
expenses; (g) costs of Landlord reimbursed by insurance proceeds; (h) expenses
incurred in negotiating leases of other tenants in the Project or enforcing
lease obligations of other tenants in the Project; (i) Landlord's or Landlord's
property manager's corporate general overhead or corporate general
administrative expenses; (j) costs of large scale cleanup, removal and/or
remediation of Hazardous Materials to the extent of the presence, if any, of
such Hazardous Materials in, on or under the Real Property as of the Delivery
Date; (k) costs for sculpture, paintings or other art objects; (l) penalties,
fines, late payment charges or interest incurred as a result of Landlord's
failure to make any payment before it becomes delinquent and subject to such
penalties, fines, charges or interest; (m) costs of capital improvements, if
any, Landlord was required by Law to make, but failed to make, prior to the date
of execution of this Lease, and (n) capital improvements to expand the Project.
PHASE: Phase means any individual Phase of the Project, as more particularly
described in the definition of Project.
PHASE OPERATING EXPENSES: Those Operating Expenses described in Section 4.01.
PREMISES: The Premises is comprised of two parts, respectively the Penobscot
Space and the Saginaw Space, located in the two (2) Buildings, at the addresses
and as otherwise described in Section 1.01 above and depicted on Exhibit A
---------
attached hereto.
PROJECT or PROPERTY: As of the date hereof, the Project is known as Seaport
Centre and consists of those buildings (including the Building) whose general
location is shown on the Site Plan of the Project attached as Exhibit C, located
---------
in Redwood City, California, associated vehicular and parking areas, landscaping
and improvements, together with the Land, any associated interests in real
property, and the personal property, fixtures, machinery, equipment, systems and
apparatus located in or used in conjunction with any of the foregoing. The
Project may also be referred to as the Property. As of the date hereof, the
Project is divided into Phase I and Phase II, which are generally designated on
Exhibit C, each of which may individually be referred to as a Phase. Landlord
---------
reserves the right from time to time to add or remove buildings, areas and
improvements to or from a Phase or the Project, or to add or remove a Phase to
or from the Project. In the event of any such addition or removal which affects
Rentable Area of the Project or a Phase, Landlord shall make a corresponding
recalculation and adjustment of any affected Rentable Area and Tenant's Share.
PROJECT OPERATING EXPENSES: Those Operating Expenses described in Section 4.01.
REAL PROPERTY: The Property excluding any personal property.
RENT: Collectively, Monthly Base Rent, Rent Adjustments and Rent Adjustment
Deposits, and all other charges, payments, late fees or other amounts required
to be paid by Tenant under this Lease.
RENT ADJUSTMENT: Any amounts owed by Tenant for payment of Operating Expenses.
The Rent Adjustments shall be determined and paid as provided In Article Four.
RENT ADJUSTMENT DEPOSIT: An amount equal to Landlord's estimate of the Rent
Adjustment attributable to each month of the applicable Adjustment Year. On or
before the Commencement Date and the beginning of each subsequent Adjustment
Year or with Landlord's Statement (defined in Article Four), Landlord may
estimate and notify Tenant in writing of its estimate of Operating Expenses,
including Project Operating Expenses, Building Operating Expenses and Phase
Operating Expenses, and Tenants Share of each, for the applicable Adjustment
Year. The Rent Adjustment Deposit applicable for the calendar year in which the
Commencement Date occurs shall be the amount, if any, specified in Section
1.01(9). Nothing contained herein shall be construed to limit the right of
Landlord from time to lime during any calendar year to revise its estimates of
Operating Expenses and to notify Tenant in writing thereof and of revision by
prospective adjustments in Tenants Rent Adjustment Deposit payable over the
remainder of such year. The
5
<PAGE>
last estimate by Landlord shall remain in effect as the applicable Rent
Adjustment Deposit unless and until Landlord notifies Tenant in writing of a
change.
RENTABLE AREA OF THE BUILDING: The amount of square footage set forth in Section
1.01(11)
RENTABLE AREA OF THE PHASE: The amount of square footage set forth in Section
1.01(12)
RENTABLE AREA OF THE PREMISES: The amount of square footage set forth in Section
1.01(10).
RENTABLE AREA OF THE PROJECT: The amount of square footage set forth in Section
1.01(13), which represents the sum of the rentable area of all space intended
for occupancy in the Project.
SECURITY DEPOSIT: The funds specified in Section 1.01(14), if any, deposited by
Tenant with Landlord as security for Tenant's performance of its obligations
under this Lease.
SUBSTANTIALLY COMPLETE: The completion of the Landlord Work or Tenant Work, as
the case may be, except for minor insubstantial details of construction,
decoration or mechanical adjustments which remain to be done.
TAXES: All federal, state and local governmental taxes, assessments (including
assessment bonds) and charges of every kind or nature, whether general, special,
ordinary or extraordinary, which Landlord shall pay or become obligated to pay
because of or in connection with the ownership, leasing, management, control or
operation of the Property or any of its components (including any personal
property used in connection therewith), which may also include any rental or
similar taxes levied in lieu of or in addition to general real and/or personal
property taxes. For purposes hereof, Taxes for any year shall be Taxes which are
assessed for any period of such year, whether or not such Taxes are billed and
payable in a subsequent calendar year. There shall be included in Taxes for any
year the amount of all fees, costs and expenses (including reasonable attorneys'
fees) paid by Landlord during such year in seeking or obtaining any refund or
reduction of Taxes. Taxes for any year shall be reduced by the net amount of any
tax refund received by Landlord attributable to such year. If a special
assessment payable in installments is levied against any part of the Property,
Taxes for any year shall include only the installment of such assessment and any
interest payable or paid during such year. Taxes shall not include any transfer
taxes, federal or state inheritance, general income, gift or estate taxes,
except that if a change occurs in the method of taxation resulting in whole or
in part in the substitution of any such taxes, or any other assessment, for any
Taxes as above defined, such substituted taxes or assessments shall be included
in the Taxes.
TENANT ADDITIONS: Collectively, Tenant Work and Tenant Alterations.
TENANT ALTERATIONS: Any alterations, improvements, additions, installations or
construction in or to the Premises or any Real Property systems serving the
Premises done or caused to be done by Tenant after the date hereof, whether
prior to or after the Commencement Date (including Tenant Work, but excluding
Landlord Work).
TENANT WORK: All work installed or furnished to the Premises by Tenant in
connection with Tenant's initial occupancy pursuant to Rider 2.
TENANT'S BUILDING SHARE: The share as specified in Section 1.01(16) and Section
4.01.
TENANT'S PHASE: The Phase in which the Premises is located, as indicated in
Section 1.01(1).
TENANT'S PHASE SHARE: The share as specified in Section 1 .01(16) and Section
4.01.
TENANT'S PROJECT SHARE: The share as specified in Section 1.01(16) and Section
4.01.
TENANT'S SHARE: Shall mean collectively, Tenant's respective shares of the
respective categories of Operating Expenses, as provided in Section 1.01(16) and
Section 4.01.
TERM: The term of this Lease commencing on the Commencement Date (determined
separately as to each of the Penobscot Space and the Saginaw Space parts of the
Premises) and expiring on the Expiration Date.
TERMINATION DATE: The Expiration Date or such earlier date as this Lease
terminates or Tenant's right to possession of the Premises terminates.
WORKLETTER: (intentionally omitted)
ARTICLE TWO
PREMISES, TERM, FAILURE TO GIVE POSSESSION, COMMON AREAS AND PARKING
2.01 LEASE OF PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises for the Term and upon the terms, covenants and conditions provided in
this Lease.
6
<PAGE>
2.02 TERM
The Commencement Date shall be the respective dates determined as described in
Section 1.01(6) and Section 3 of Rider 2.
2.03 FAILURE TO GIVE POSSESSION
(intentionally omitted; see Rider 2)
2.04 AREA OF PREMISES
Landlord and Tenant agree that for all purposes of this Lease the Rentable Area
of the Premises, the Rentable Area of the Building, the Rentable Area of the
Phase and the Rentable Area of the Project as set forth in Article One are
controlling, and are not subject to revision after the date of this Lease,
except as otherwise provided herein.
2.05 CONDITION OF PREMISES
(intentionally omitted; see Rider 2)
2.06 COMMON AREAS & PARKING
(a) Right to Use Common Areas. Tenant shall have the non-exclusive right,
-------------------------
in common with others, to the use of any common entrances, ramps, drives and
similar access and service ways and other Common Areas in the Project. The
rights of Tenant hereunder in and to the Common Areas shall at all times be
subject to the rights of Landlord and other tenants and owners in the Project
who use the same in common with Tenant, and it shall be the duty of Tenant to
keep all the Common Areas free and clear of any obstructions created or
permitted by Tenant or resulting from Tenants operations. Tenant shall not use
the Common Areas or common facilities of the Building or the Project, including
the Building's electrical room, parking lot or trash enclosures, for storage
purposes. Nothing herein shall affect the right of Landlord at any time to
remove any persons not authorized to use the Common Areas or common facilities
from such areas or facilities or to prevent their use by unauthorized persons.
(b) Changes in Common Areas. Landlord reserves the right, at any time and
-----------------------
from time to time to (i) make alterations in or additions to the Common Areas or
common facilities of the Project, including constructing new buildings or
changing the location, size, shape or number of the driveways, entrances,
parking spaces, parking areas, loading and unloading areas, landscape areas and
walkways, (ii) designate property to be included in or eliminate property from
the Common Areas or common facilities of the Project, (iii) close temporarily
any of the Common Areas or common facilities of the Project for maintenance
purposes, and (4) use the Common Areas and common facilities of the Project
while engaged in making alterations in or additions and repairs to the Project;
provided, however, that reasonable access to the Premises and parking at or near
the Project remains available.
(c) Parking. During the Term, Tenant shall have the right to use the
-------
number of Parking Spaces specified in Section 1.01(18) for parking on an
unassigned basis in the parking lots adjacent to the Premises, provided however,
two of such allotted spaces in front of each of the Penobscot Space and the
Saginaw Space shall be marked "Phone.com Visitors". Such parking right shall be
at no additional fee during the initial 5 year Term. Tenant acknowledges and
agrees that the parking spaces in the Project's parking facility may include a
mixture of spaces for compact vehicles as well as full-size passenger
automobiles, and that Tenant shall not use parking spaces for vehicles larger
than the striped size of the parking spaces. Tenant shall not park any vehicles
at the Project overnight except on an occasional basis and in no event any
longer than forty-eight (48) hours. Tenant shall comply with any and all parking
rules and regulations if and as from time to time established by Landlord.
Tenant shall not allow any vehicles using Tenants parking privileges to be
parked, loaded or unloaded except in accordance with this Section, including in
the areas and in the manner designated by Landlord for such activities. If any
vehicle is using the parking or loading areas contrary to any provision of this
Section, Landlord shall have the right, in addition to all other rights and
remedies of Landlord under this Lease, to remove or tow away the vehicle without
prior notice to Tenant, and the cost thereof shall be paid to Landlord within
ten (10) days after notice from Landlord to Tenant.
ARTICLE THREE
RENT
Tenant agrees to pay to Landlord at the first office specified in Section
1.01(2), or to such other persons, or at such other places designated by
Landlord, without any prior demand therefor in immediately available funds and
without any deduction or offset whatsoever, Rent, including Monthly Base Rent
and Rent Adjustments in accordance with Article Four, during the Term. Monthly
Base Rent shall be paid monthly in advance on the first day of each month of the
Term, except that the first installment of Monthly Base Rent shall be paid by
Tenant to Landlord concurrently with execution of this Lease. Monthly Base Rent
shall be prorated for partial months within the Term. Unpaid Rent shall bear
interest at the Default Rate from the date due until paid. Tenant's covenant to
pay Rent shall be independent of every other covenant in this Lease.
7
<PAGE>
ARTICLE FOUR
OPERATING EXPENSES, RENT ADJUSTMENTS AND PAYMENTS
4.01 TENANT'S SHARE OF OPERATING EXPENSES
Tenant shall pay Tenant's Share of Operating Expenses in the respective shares
of the respective categories of Operating Expenses as set forth below.
(a) Tenant's Project Share of Project Operating Expenses, which is
the percentage obtained by dividing the rentable square footage of the
Premises for the building(s) in which the Premises is located by the
rentable square footage of the Project and as of the date hereof equals the
percentage set forth in Section 1.01(16);
(b) Tenant's Building Share of Building Operating Expenses, which is
the percentage obtained by dividing the rentable square footage of the
Premises respectively for each building in which the Premises is located by
the total rentable square footage of such building and as of the date
hereof equals the percentage set forth in Section 1.01(16);
(c) Tenant's Phase Share of Phase Operating Expenses, which is the
percentage obtained by dividing the aggregate rentable square footage of
the Premises located in Tenant's Phase by the total rentable square footage
of Tenant's Phase and as of the date hereof equals the percentage set forth
in Section 1.01(16);
(d) Project Operating Expenses shall mean all Operating Expenses that
are not included as Phase Operating Expenses (defined below) and that are
not either Building Operating Expenses or operating expenses directly and
separately identifiable to the operation, maintenance or repair of any
other building located in the Project, but Project Operating Expenses
includes operating expenses allocable to any areas of the Building or any
other building during such time as such areas are made available by
Landlord for the general common use or benefit of all tenants of the
Project, and their employees and invitees, or the public, as such areas
currently exist and as they may be changed from time to time;
(e) Building Operating Expenses shall mean Operating Expanses that
are directly and separately identifiable to each building in which the
Premises or part thereof is located;
(f) Phase Operating Expenses shall mean Operating Expenses that
Landlord may allocate to a Phase as directly and separately identifiable to
all buildings located in the Phase (including but not limited to the
Building) and may include Project Operating Expenses that are separately
identifiable to a Phase;
(g) Landlord shall equitably allocate a particular item or portion of
Operating Expenses as any one of Project Operating Expenses, Building
Operating Expenses or Phase Operating Expenses; however, in no event shall
any portion of Building Operating Expenses, Project Operating Expenses or
Phase Operating Expenses be assessed or counted against Tenant more than
once; and
(h) Notwithstanding anything to the contrary contained in this
Section 4.01, as to each specific category of Operating Expense which one
or more tenants of the Building either pays directly to third parties or
specifically reimburses to Landlord (for example, separately contracted
janitorial services or property taxes directly reimbursed to Landlord),
then, on a category by category basis, the amount of Operating Expanses for
the affected period shall be adjusted as follows: (1) all such tenant
payments with respect to such category of expense and all of Landlords
costs reimbursable thereby shall be excluded from Operating Expanses and
Tenants Building Share, Tenants Phase Share or Tenants Project Share, as
the case may be, for such category of Operating Expanse shall be adjusted
by excluding the square footage of all such tenants, and (2) if Tenant pays
or directly reimburses Landlord for such category of Operating Expense,
such category of Operating Expense shall be excluded from the determination
of Operating Expenses for the purposes of this Lease.
4.02 RENT ADJUSTMENTS
Tenant shall pay to Landlord Rent Adjustments with respect to each Adjustment
Year as follows:
(a) The Rent Adjustment Deposit representing Tenant's Share of
Landlord's reasonable estimate of Operating Expenses, as described in
Section 4.01, for the applicable Adjustment Year (or portion thereof)
monthly during the Term with the payment of Monthly Base Rent, except the
first installment which shall be paid by Tenant to Landlord within five (5)
days after the Commencement Date has occurred respectively as to each of
the Saginaw Space and the Penobscot Space; and
(b) Any Rent Adjustments due in excess of the Rent Adjustment
Deposits in accordance with Section 4.02.
8
<PAGE>
4.03 STATEMENT OF LANDLORD
Within one hundred twenty (120) days after the end of each calendar year or as
soon thereafter as reasonably possible, Landlord will furnish Tenant a statement
("Landlord's Statement") showing the following:
(a) Operating Expenses for the last Adjustment Year showing in
reasonable detail the actual Operating Expenses categorized among Project
Operating Expenses, Building Operating Expenses and Phase Operating
Expenses for such period and Tenant's Share of each as described in Section
4.01 above;
(b) The amount of Rent Adjustments due Landlord for the last
Adjustment Year, less credit for Rent Adjustment Deposits paid, if any; and
(c) Any change in the Rent Adjustment Deposit due monthly in the
current Adjustment Year, including the amount or revised amount due for
months preceding any such change pursuant to Landlord's Statement
Tenant shall pay to Landlord within thirty (30) days after receipt of such
statement any amounts for Rent Adjustments then due in accordance with
Landlord's Statement Any amounts due from Landlord to Tenant pursuant to this
Section shall be credited to the Rent Adjustment Deposit next coming due, or
refunded to Tenant if the Term has already expired provided Tenant is not in
default hereunder. No interest or penalties shall accrue on any amounts which
Landlord is obligated to credit or refund to Tenant by reason of this Section
4.02. Landlord's failure to deliver Landlord's Statement or to compute the
amount of the Rent Adjustments shall not constitute a waiver by Landlord of its
right to deliver such items nor constitute a waiver or release of Tenant's
obligations to pay such amounts. The Rent Adjustment Deposit shall be credited
against Rent Adjustments due for the applicable Adjustment Year. During the last
complete calendar year or during any partial calendar year in which the Lease
terminates, Landlord may include in the Rent Adjustment Deposit its estimate of
Rent Adjustments which may not be finally determined until after the termination
of this Lease. Tenant's obligation to pay Rent Adjustments survives the
expiration or termination of the Lease. Notwithstanding the foregoing, in no
event shall the sum of Monthly Base Rent and the Rent Adjustments be less than
the Monthly Base Rent payable.
4.04 BOOKS AND RECORDS
Landlord shall maintain books and records showing Operating Expenses and Taxes
in accordance with sound accounting and management practices, consistently
applied. The Tenant or its representative (which representative shall be a
certified public accountant licensed to do business in the state in which the
Property is located and whose primary business is certified public accounting)
shall have the right, for a period of sixty (60) days following the date upon
which Landlord's Statement is delivered to Tenant, to examine the Landlord's
books and records with respect to the items in the foregoing statement of
Operating Expenses and Taxes during normal business hours, upon written notice,
delivered at least three (3) business days in advance. If Tenant does not object
in writing to Landlord's Statement within ninety (90) days of Tenant's receipt
thereof, specifying the nature of the item in dispute and the reasons therefor,
then Landlord's Statement shall be considered final and accepted by Tenant. Any
amount due to the Landlord as shown on Landlord's Statement, whether or not
disputed by Tenant as provided herein shall be paid by Tenant when due as
provided above, without prejudice to any such written exception.
4.05 TENANT OR LEASE SPECIFIC TAXES
In addition to Monthly Base Rent, Rent Adjustments, Rent Adjustment Deposits and
other charges to be paid by Tenant, Tenant shall pay to Landlord, upon demand,
any and all taxes payable by Landlord (other than federal or state inheritance,
general income, gift or estate taxes) whether or not now customary or within the
contemplation of the parties hereto: (a) upon, allocable to, or measured by the
Rent payable hereunder, including any gross receipts tax or excise tax levied by
any governmental or taxing body with respect to the receipt of such rent; 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 the measured value of Tenant's personal
property or trade fixtures located in the Premises or in any storeroom or any
other place in the Premises or the Property, or the areas used in connection
with the operation of the Property, it being the intention of Landlord and
Tenant that, to the extent possible, Tenant shall cause such taxes on personal
property or trade fixtures to be billed to and paid directly by Tenant; (d)
resulting from Tenant Work or Tenant Alterations to the Premises, whether title
thereto is in Landlord or Tenant; or (e) upon this transaction. Taxes paid by
Tenant or other tenants of the Project pursuant to this Section 4.05 shall not
be included in any computation of Taxes as part of Operating Expenses.
ARTICLE FIVE
SECURITY DEPOSIT
Tenant concurrently with the execution of this Lease shall pay to Landlord in
immediately available funds the Security Deposit The Security Deposit may be
applied by Landlord to cure, in whole or part, any Default of Tenant under this
Lease, and upon notice by Landlord of such application, Tenant shall replenish
the Security Deposit in full by paying to Landlord within ten (10) days of
demand the amount so applied.
9
<PAGE>
Landlord's application of the Security Deposit shall not constitute a waiver of
Tenant's default to the extent that the Security Deposit does not fully
compensate Landlord for all losses, damages, costs and expanses incurred by
Landlord in connection with such default and shall not prejudice any other
rights or remedies available to Landlord under this Lease or by Law. Landlord
shall not pay any interest on the Security Deposit Landlord shall not be
required to keep the Security Deposit separate from its general accounts. The
Security Deposit shall not be deemed an advance payment of Rent, nor a measure
of damages for any default by Tenant under this Lease, nor shall it be a bar or
defense of any action which Landlord may at any time commence against Tenant In
the absence of evidence satisfactory to Landlord of an assignment of the right
to receive the Security Deposit or the remaining balance thereof, Landlord may
return the Security Deposit to the original Tenant, regardless of one or more
assignments of this Lease. Upon the transfer of Landlord's interest under this
Lease, Landlord's obligation to Tenant with respect to the Security Deposit
shall terminate upon transfer to the transferee of the Security Deposit, or any
balance thereof. If Tenant shall fully and faithfully comply with all the terms,
provisions, covenants, and conditions of this Lease, the Security Deposit, or
any balance thereof, shall be returned to Tenant within thirty (30) days after
Landlord recovers possession of the Premises. Tenant hereby waives any and all
rights of Tenant under the provisions of Section 1950.7 of the California Civil
Code or other Law regarding security deposits.
ARTICLE SIX
UTILITIES & SERVICES
6.01 LANDLORD'S GENERAL SERVICES
Landlord shall provide maintenance and services as provided in Article Eight
6.02 TENANT TO OBTAIN & PAY DIRECTLY
(a) Tenant shall be responsible for and shall pay promptly all charges for
gas, electricity, sewer, heat, light, power, telephone, refuse pickup (to be
performed on a regularly scheduled basis so that accumulated refuse does not
exceed the capacity of Tenant's refuse bins), janitorial service and all other
utilities, materials and services furnished directly to or used by Tenant in, on
or about the Premises, together with all taxes thereon. Tenant shall contract
directly with the providing companies for such utilities and services.
(b) Notwithstanding any provision of the Lease to the contrary, without,
in each instance, the prior written consent of Landlord, as more particularly
provided in Article Nine, Tenant shall not (i) make any alterations or additions
to the electric or gas equipment or systems or other Building systems. Tenant's
use of electric current shall at no time exceed the capacity of the wiring,
feeders and risers providing electric current to the Premises or the Building.
The consent of Landlord to the installation of electric equipment shall not
relieve Tenant from the obligation to limit usage of electricity to no more than
such capacity.
6.03 TELEPHONE SERVICES
All telegraph, telephone, and communication connections which Tenant may desire
outside the Premises shall be subject to Landlord's prior written approval, in
Landlord's sole discretion, and the location of all wires and the work in
connection therewith shall be performed by contractors reasonably approved by
Landlord and shall be subject to the direction of Landlord, except that such
approval is not required as to Tenant's choice of service provider or telephone
equipment serving Tenant exclusively (including cabling) within the Premises and
from the Premises in a route designated by Landlord to any telephone cabinet or
panel provided for Tenant's connection to the telephone cable serving the
Building, so long as Tenant's service provider and equipment do not require
connections different than or additional to those to the telephone cabinet or
panel provided. As to any such connections or work outside the Premises
requiring Landlord's approval, Landlord reserves the right to designate and
control the entity or entities providing telephone or other communication cable
installation, removal, repair and maintenance outside the Premises and to
restrict and control access to telephone cabinets or panels. In the event
Landlord designates a particular vendor or vendors to provide such cable
installation, removal, repair and maintenance for the Building, Tenant agrees to
abide by and participate in such program. Tenant shall be responsible for and
shall pay all costs incurred in connection with the installation of telephone
cables and communication wiring in the Premises, including any hook-up, access
and maintenance fees related to the installation of such wires and cables in the
Premises and the commencement of service therein, and the maintenance thereafter
of such wire and cables; and there shall be included in Operating Expenses for
the Building all installation, removal, hook-up or maintenance costs incurred by
Landlord in connection with telephone cables and communication wiring serving
the Building which are not allocable to any individual users of such service but
are allocable to the Building generally. If Tenant fails to maintain all
telephone cables and communication wiring in the Premises serving Tenant
exclusively, and such failure affects or interferes with the operation or
maintenance of any other telephone cables or communication wiring serving the
Building, if upon notice to Tenant (which may be verbal if Landlord believes an
emergency situation exists) Tenant fails to act immediately to perform such
repairs, restorations or alterations necessary in order to eliminate any such
interference, then Landlord may by verbal notice require Tenant to shut down the
equipment, wiring or cables believed to be causing the interference, and if not
so shut down, then upon further verbal notice Landlord (or any vendor hired by
Landlord) may enter into and upon the Premises forthwith and perform such
repairs, restorations or alterations as Landlord deems necessary in order to
eliminate any such interference (and Landlord may recover from Tenant all of
Landlord's costs in connection therewith). No later than the Termination Date,
10
<PAGE>
Tenant agrees to remove all telephone cables and communication wiring installed
by Tenant for and during Tenant's occupancy, which Landlord shall request Tenant
to remove. Tenant agrees that neither Landlord nor any of its agents or
employees shall be liable to Tenant, or any of Tenant's employees, agents,
customers or invitees or anyone claiming through, by or under Tenant, for any
damages, injuries, losses, expenses, claims or causes of action because of any
interruption, diminution, delay or discontinuance at any time for any reason in
the furnishing of any telephone or other communication service to the Premises
and the Building.
6.04 FAILURE OR INTERRUPTION OF UTILITY OR SERVICE
To the extent that any equipment or machinery furnished or maintained by
Landlord outside the Premises is used in the delivery of utilities directly
obtained by Tenant pursuant to Section 6.02 and breaks down or ceases to
function properly, Landlord shall use reasonable diligence to repair same
promptly. Except if Landlord believes an emergency situation exists, Landlord
shall provide Tenant at least twenty-four (24) hours prior written notice (x) of
any work by Landlord on any such equipment or machinery if an interruption of
utilities or service to Tenant is scheduled as part of such work or (y) if
Landlord schedules an interruption of utilities or service supplied by Landlord
which are not directly obtained by Tenant In the event of any failure, stoppage
or interruption of, or change in, any utilities or services supplied by Landlord
which are not directly obtained by Tenant, Landlord shall use reasonable
diligence to have service promptly resumed. In any event covered by the
preceding sentences, if the cause of any such failure, stoppage or interruption
of, or change in, utilities or services is within the control of a public
utility, other public or quasi-public entity, or utility provider outside
Landlord's control, notification to such utility or entity of such failure,
stoppage or interruption and request to remedy the same shall constitute
"reasonable diligence" by Landlord to have service promptly resumed.
Notwithstanding any other provision of this Section to the contrary, in the
event of any failure, stoppage or interruption of, or change in, any utility or
other service furnished to the Premises or the Project resulting from any cause,
including changes in service provider or Landlords compliance with any voluntary
or similar governmental or business guidelines now or hereafter published or any
requirements now or hereafter established by any governmental agency, board or
bureau having jurisdiction over the operation of the Property: (a) Landlord
shall not be liable for, and Tenant shall not be entitled to, any abatement or
reduction of Rent, except as expressly provided below; (b) no such failure,
stoppage, or interruption of any such utility or service shall constitute an
eviction of Tenant or relieve Tenant of the obligation to perform any covenant
or agreement of this Lease to be performed by Tenant, (c) Landlord shall not be
in breach of this Lease nor be liable to Tenant for damages or otherwise.
Notwithstanding any provision of this Article Six to the contrary, in the event
and to the extent that Tenant is prevented from using the Penobscot Space or the
Saginaw Space or both for seven (7) consecutive days after Tenant has given
Landlord written notice of such condition (the "Eligibility Period") as a result
of Landlord's failure to provide access to the Premises or utilities or services
which Landlord is obligated to provide, but excluding any period occupancy is
prevented to the extent caused by any of the following:
(i) any act or omission of Tenant, any assignee, any subtenant or any
other occupant of the Premises, or
(ii) request by Tenant or any assignee that Landlord make a decoration,
alteration, improvement or addition, or
(iii) Force Majeure,
then Monthly Base Rent and Rent Adjustments shall be abated (prorated to the
extent of square footage
Tenant is so prevented from using) for the period Tenant is so prevented from
using the applicable space, commencing as of the first day after the Eligibility
Period and continuing for such time that Tenant is prevented from using the
applicable space.
6.05 CHOICE OF SERVICE PROVIDER
Tenant acknowledges that Landlord may, at Landlord's sole option, to the extent
permitted by applicable law, elect to change, from time to time, the company or
companies which provide services (including electrical service, gas service,
water, telephone and technical services) to the Property, the Premises and/or
its occupants. Notwithstanding anything to the contrary set forth in this Lease,
Tenant acknowledges that Landlord has not and doss not make any representations
or warranties concerning the identity or identities of the company or companies
which provide services to the Property and the Premises or its occupants and
Tenant acknowledges that the choice of service providers and matters concerning
the engagement and termination thereof shall be solely that of Landlord. The
foregoing provision is not intended to modify, amend, change or otherwise
derogate any provision of this Lease concerning the nature or type of service to
be provided or any specific information concerning the amount thereof to be
provided. Tenant agrees to cooperate with Landlord and each of its service
providers in connection with any change in service or provider.
6.06 SIGNAGE
Tenant shall not install any signage within the Project or the Building, or any
signage within or on the Premises which is visible from the exterior, without
obtaining the prior written approval of Landlord, and Tenant shall be
responsible for procurement, installation, maintenance and removal of any such
signage installed by Tenant, and all costs in connection therewith. Any such
signage shall comply with Landlord's current Project signage criteria and all
Laws. Subject to the foregoing provisions, including Landlord's prior
11
<PAGE>
written approval of the particular proposed signage, Tenant shall have the right
to identification signage at the main entry door to each of the Saginaw Space
and the Penobscot Space.
ARTICLE SEVEN
POSSESSION, USE AND CONDITION OF PREMISES
7.01 POSSESSION AND USE OF PREMISES
(a) Tenant shall occupy and use the Premises only for the uses specified
in Section 1.01(17) to conduct Tenant's business. Tenant shall not occupy or use
the Premises (or permit the use or occupancy of the Premises) for any purpose or
in any manner which: (1) is unlawful or in violation of any Law or Environmental
Law; (2) may be dangerous to persons or property or which may increase the cost
of, or invalidate, any policy of insurance carried on the Building or covering
its operations; (3) is contrary to or prohibited by the terms and conditions of
this Lease or the rules and regulations as provided in Article Eighteen; (4)
contrary to or prohibited by the articles, bylaws or rules of any owner's
association affecting the Project; (5) would obstruct or interfere with the
rights of other tenants or occupants of the Building or the Project, or injure
or annoy them, or would create or continue a nuisance; or (6) would constitute
any waste in or upon the Premises or Project.
(b) Landlord and Tenant acknowledge that the Americans With Disabilities
Act of 1990 (42 U.S.C. (S)12101 et seq.) and regulations and guidelines
promulgated thereunder, as all of the same may be amended and supplemented from
time to time (collectively referred to herein as the "ADA") establish
requirements for business operations, accessibility and barrier removal, and
that such requirements may or may not apply to the Premises, the Building and
the Project depending on, among other things: (1) whether Tenant's business is
deemed a "public accommodation" or "commercial facility", (2) whether such
requirements are "readily achievable", and (3) whether a given alteration
affects a "primary function area" or triggers "path of travel" requirements. The
parties hereby agree that (a) Landlord shall be responsible for ADA Title III
compliance in the Common Areas, except as provided below, (b) Tenant shall be
responsible for ADA Title III compliance in the Premises, including any
leasehold improvements or other work to be performed in the Premises under or in
connection with this Lease, (c) Landlord may perform, or require that Tenant
perform, and Tenant shall be responsible for the cost of, ADA Title III "path of
travel" requirements triggered by Tenant Additions in the Premises, and (d)
Landlord may perform, or require Tenant to perform, and Tenant shall be
responsible for the cost of, ADA Title III compliance in the Common Areas
necessitated by the Building being deemed to be a "public accommodation" instead
of a "commercial facility" as a result of Tenant's use of the Premises. Tenant
shall be solely responsible for requirements under Title I of the ADA relating
to Tenant's employees.
(c) Landlord and Tenant agree to cooperate and use commercially reasonable
efforts to participate in traffic management programs generally applicable to
businesses located in or about the area and Tenant shall encourage and support
van and car pooling by, and staggered and flexible working hours for, its office
workers and service employees to the extent reasonably permitted by the
requirements of Tenant's business. Neither this Section or any other provision
of this Lease is intended to or shall create any rights or benefits in any other
person, firm, company, governmental entity or the public.
(d) Tenant agrees to cooperate with Landlord and to comply with any and
all guidelines or controls concerning energy management imposed upon Landlord by
federal or state governmental organizations or by any energy conservation
association to which Landlord is a party or which is applicable to the Building.
7.02 HAZARDOUS MATERIAL
(a) Tenant shall not use, generate, manufacture, produce, store, release,
discharge, or dispose of, on, under or about the Premises or any part of the
Project, or transport to or from the Premises or any part of the Project, any
Hazardous Material or allow its employees, agents, contractors, licensees,
invitees or any other person or entity to do so. The foregoing covenant shall
not extend to insignificant amounts of substances typically found or used in
general office applications so long as (i) such substances are maintained only
in such quantities as are reasonably necessary for Tenant's operations in the
Premises, (ii) such substances are used strictly in accordance with the
manufacturers' instructions therefor and all applicable laws, (iii) such
substances are not disposed of in or about the Building or the Project in a
manner which would constitute a release or discharge thereof, and (iv) all such
substances are removed from the Building and the Project by Tenant upon the
expiration or earlier termination of this Lease. Tenant shall, within thirty
(30) days after demand therefor, provide to Landlord a written list identifying
any Hazardous Material then maintained by Tenant in the Building, the use of
each such Hazardous Material so maintained by Tenant together with written
certification by Tenant stating, in substance, that neither Tenant nor any
person for whom Tenant is responsible has released or discharged any Hazardous
Material in or about the Building or the Project. Landlord's right of entry
pursuant to Section 7.03 of this Lease shall include the right to enter and
inspect the Premises for violations of Tenant's covenants herein.
(b) Hazardous Material shall include by way of illustration, and without
limiting the generality of the definition of Hazardous Material in Section 1.03,
the following: (i) those substances included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances" or "solid
waste" under all present and future federal, state and local laws (whether under
common law, statute, rule, regulation or
12
<PAGE>
otherwise) relating to the protection of human health or the environment,
including California Senate Bill 245 (Statutes of 1987, Chapter 1302), the Safe
Drinking Water and Toxic Enforcement Act of 1986 (commonly known as Proposition
65) and the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation
-- ---
and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., and the Hazardous
-- ---
Materials Transportation Act, 49 U.S.C. Sections 1801 , et seq., all as
-- ---
heretofore and hereafter amended, or in any regulations promulgated pursuant to
said laws; (ii) those substances defined as "hazardous wastes" in Section 25117
of the California Health & Safety Code or as "hazardous substances" in Section
25316 of the California Health & Safety Code, or in any regulations promulgated
pursuant to said laws; (iii) those substances listed in the United States
Department of Transportation Table (49 CFR 172.101 and amendments thereto) or
designated by the Environmental Protection Agency (or any successor agency) as
hazardous substances (see, e.g 40 CFR Part 302 and amendments thereto); (iv)
--- ----
such other substances, materials and wastes which are or become regulated under
applicable local, state or federal law or by the United States government or
which are or become classified as hazardous or toxic under federal, state or
local laws or regulations, including California Health & Safety Code, Division
20, and Title 26 of the California Code of Regulations; and (v) any material,
waste or substance which contains petroleum, asbestos or polychlorinated
biphenyls, is designated as a "hazardous substance" pursuant to Section 311 of
the Clean Water Act of 1977, 33 U.S.C. Sections 1251, et seq. (33 U.S.C. (S)
------
1321), is listed pursuant to Section 307 of the Clean Water Act of 1977 (33
U.S.C. (S) 1317), or contains any flammable, explosive or radioactive material.
(c) To the extent permitted by Law, Tenant hereby indemnifies, and agrees
to protect, defend and hold the Indemnitees harmless, against any and all
actions, claims, demands, liability, costs and expenses, including attorneys'
fees and expenses for the defense thereof, arising out of any and all of (i) the
introduction into the Project by Tenant, its employees, agents, contractors,
licensees, invitees or any other person or entity for whom Tenant is responsible
(collectively, "Tenant's Agents") of any Hazardous Material, (ii) the usage by
Tenant or Tenant's Agents of Hazardous Material in or about the Project, (iii)
the discharge or release in or about the Project by Tenant or Tenant's Agents of
any Hazardous Material, (iv) any injury to or death of persons or damage to or
destruction of property resulting from the use by Tenant or Tenants Agents of
Hazardous Material in or about the Project, and (v) any failure of Tenant or
Tenant's Agents to observe the covenants of this Section 7.02. In case of any
action or proceeding brought against the Indemnitees by reason of any such
claim, upon notice from Landlord, Tenant covenants to defend such action or
proceeding by counsel chosen by Landlord, in Landlord's sole discretion.
Landlord reserves the right to settle, compromise or dispose of any and all
actions, claims and demands related to the foregoing indemnity. Provided
however, the foregoing two sentences shall not apply, and the following special
provisions shall apply provided that Tenant is Phone.com, and such special
provisions are personal to Phone.com and an Affiliate which is an assignee of
the Lease which has satisfied the requirements of Subsections 10.01(e) and (U of
this Lease, and shall not apply to any subtenant or any other assignee of this
Lease:
(i) In case of any action or proceeding brought against the Indemnitees by
reason of any such claim, upon notice from Landlord, Tenant covenants to
defend such action or proceeding by counsel chosen in accordance with the
procedure set forth in the following sentences of this item (i). Tenant
shall propose to Landlord in writing three choices for counsel to defend
the action or proceeding in question. If any or all of the three are not
acceptable to Landlord, Landlord shall advise Tenant in writing. The
foregoing process shall continue until Tenant and Landlord have agreed upon
mutually acceptable counsel. Notwithstanding any provision of the preceding
three sentences to the contrary, so long as the claim, demand, suit,
proceeding or action and defense thereof, in the aggregate against all
defendants, is fully covered by Tenant's applicable insurance coverage and
fully defended by Tenant's insurer, Landlord will not exercise its right to
disapprove defense counsel. Counsel chosen by Tenant (or Tenant's insurer)
under the applicable procedure above shall provide Landlord and any
separate counsel of Landlord's choice with full information regarding the
matter and shall cooperate with Landlord and such counsel in connection
with such defense, So long as Tenant is actively defending the claim,
demand, suit or action through counsel chosen in accordance with either
procedure above, if Landlord retains separate counsel, Landlord will pay
the fees and expenses of such separate counsel except those payable in
connection with review of, objection to or response to any discovery
against Landlord and objection to, preparation for and defense of
depositions against Landlord, which shall be payable by Tenant
(ii) so long as Tenant is actively defending the claim, demand, suit or
action through counsel chosen in accordance with the procedure above, then
Landlord will not settle, compromise or dispose of such claim, demand or
action without Tenant's prior written consent, which shall not be
unreasonably withheld or delayed.
(d) Tenant acknowledges that the sewer piping at the Project is made of
ABS plastic. Accordingly, without Landlord's prior written consent, which may be
given or withheld in Landlord's sole discretion, only ordinary domestic sewage
is permitted to be put into the drains at the Premises. UNDER NO CIRCUMSTANCES
SHALL Tenant EVER DEPOSIT ANY ESTERS OR KETONES (USUALLY FOUND IN SOLVENTS TO
CLEAN UP PETROLEUM PRODUCTS) IN THE DRAINS AT THE PREMISES. If Tenant desires to
put any substances other than ordinary domestic sewage into the drains, it shall
first submit to Landlord a complete description of each such substance,
including its chemical composition, and a sample of such substance suitable for
laboratory testing. Landlord shall promptly determine whether or not the
substance can be deposited into the drains and its determination shall be
absolutely binding on Tenant
13
<PAGE>
Upon demand, Tenant shall reimburse Landlord for expenses incurred by Landlord
in making such determination. If any substances not so approved hereunder are
deposited in the drains in Tenant's Premises, Tenant shall be liable to Landlord
for all damages resulting therefrom, including but not limited to all costs and
expenses incurred by Landlord in repairing or replacing the piping so damaged.
(e) Upon any violation of any of the foregoing covenants, in addition to
all remedies available to a landlord against the defaulting tenant, including
but not limited to those set forth in Article Eleven of this Lease, Tenant
expressly agrees that upon any such violation Landlord may, at its option (i)
immediately terminate this Lease by giving written notice to Tenant of such
termination, or (ii) continue this Lease in effect until compliance by Tenant
with its clean-up and removal covenant (notwithstanding the expiration of the
Term). No action by Landlord hereunder shall impair the obligations of Tenant
pursuant to this Section 7.02.
(f) If any Hazardous Material is released, discharged or disposed of on or
about the Premises or the Building in violation of Environmental Law such that
use of either or both the Penobscot Space, the Saginaw Space or both is
prohibited by applicable governmental authority, and such release, discharge or
disposal was not caused by Tenant or its employees, agents, contractors,
licensees or invitees, then to the extent Tenant is so prevented from using
such space for more than seven (7) consecutive days after Tenant has given
Landlord written notice of such condition (the "Eligibility Period"), then
Monthly Base Rent and Rent Adjustments shall be abated (prorated to the extent
of square footage Tenant is so prevented from using) for the period Tenant is so
prevented from using the applicable space, commencing as of the first day after
the Eligibility Period and continuing for such time that Tenant is prevented
from using the applicable space.
7.03 LANDLORD ACCESS TO PREMISES; APPROVALS
(a) Tenant shall permit Landlord to erect, use and maintain pipes, ducts,
wiring and conduits in and through the Premises, so long as Tenant's use, layout
or design of the Premises is not materially affected or altered. Landlord or
Landlord's agents shall have the right to enter upon the Premises in the event
of an emergency, or upon reasonable prior notice to Tenant to inspect the
Premises, to perform janitorial and other services (if any), to conduct safety
and other testing in the Premises and to make such repairs, alterations,
improvements or additions to the Premises or the Building or other parts of the
Property as Landlord may deem necessary or desirable (Including all alterations,
improvements and additions in connection with a change in service provider or
providers). For any such entry, Tenant may provide a representative of Tenant to
accompany Landlord or its agents, but providing such representative shall not
delay any such entry from when it otherwise would be permissible or apply in the
event of an emergency. Janitorial and cleaning services (if any) shall be
performed after normal business hours. Any entry or work by Landlord may be
during normal business hours and Landlord shall use reasonable efforts to ensure
that any entry or work shall not materially interfere with Tenant's occupancy of
the Premises.
(b) If Tenant shall not be personally present to permit an entry into the
Premises when for any reason an entry therein shall be necessary or permissible,
Landlord (or Landlord's agents), after giving Tenant such prior notice required
under this Lease in the applicable circumstances (unless Landlord believes an
emergency situation exists), whether or not Tenant or an employee was present to
receive such written or verbal notice, may enter the Premises without rendering
Landlord or its agents liable therefor, and without relieving Tenant of any
obligations under this Lease.
(c) Upon reasonable prior notice to Tenant, Landlord may enter the
Premises for the purpose of conducting such inspections, tests and studies as
Landlord may deem desirable or necessary to confirm Tenant's compliance with all
Laws and Environmental Laws or for other purposes necessary in Landlord's
reasonable judgment to ensure the sound condition of the Property and the
systems serving the Property. Landlord's rights under this Section 7.03 (c) are
for Landlord's own protection only, and Landlord has not, and shall not be
deemed to have assumed, any responsibility to Tenant or any other party as a
result of the exercise or non-exercise of such rights, for compliance with Laws
or Environmental Laws or for the accuracy or sufficiency of any item or the
quality or suitability of any item for its intended use.
(d) Landlord may do any of the foregoing, or undertake any of the
inspection or work described in the preceding paragraphs without such action
constituting an actual or constructive eviction of Tenant, in whole or in part,
or giving rise to an abatement of Rent by reason of loss or interruption of
business of the Tenant, or otherwise.
(e) The review, approval or consent of Landlord with respect to any item
required or permitted under this Lease is for Landlord's own protection only,
and Landlord has not, and shall not be deemed to have assumed, any
responsibility to Tenant or any other party, as a result of the exercise or non-
exercise of such rights, for compliance with Laws or Environmental Laws or for
the accuracy or sufficiency of any item or the quality or suitability of any
item for its intended use.
7.04 QUIET ENJOYMENT
Landlord covenants, in lieu of any implied covenant of quiet possession or quiet
enjoyment, that so long as Tenant is in compliance with the covenants and
conditions set forth in this Lease, Tenant shall have the right to quiet
enjoyment of the Premises without hindrance or interference from Landlord or
those claiming through Landlord, and subject to the covenants and conditions set
forth in the Lease and to the rights of any Mortgagee or ground lessor.
14
<PAGE>
ARTICLE EIGHT
MAINTENANCE
8.01 LANDLORD'S MAINTENANCE
Subject to Article Fourteen and Section 8.02, Landlord shall maintain the
structural portions of the Building, the roof, exterior walls and exterior
doors, foundation, and under slab standard sewer system of the Building in good,
clean and safe condition, and shall use reasonable efforts, through Landlord's
program of regularly scheduled preventive maintenance, to keep the Building's
standard heating, ventilation and air conditioning ("HVAC") equipment in
reasonably good order and condition. Notwithstanding the foregoing, Landlord
shall have no responsibility to repair the Building's standard heating,
ventilation and air conditioning equipment exclusively serving the Premises, and
all such repairs shall be performed by Tenant pursuant to the terms of Section
8.02. Landlord shall also (a) maintain the landscaping, parking facilities and
other Common Areas of the Project in good condition and repair, and (b) wash the
outside of exterior windows at intervals reasonably determined by Landlord.
Except as provided in Article Fourteen and Article Fifteen, there shall be no
abatement of rent, no allowance to Tenant for diminution of rental value and no
liability of Landlord by reason of inconvenience, annoyance or any injury to or
interference with Tenant's business arising from the making of or the failure to
make any repairs, alterations or improvements in or to any portion of the
Project or in or to any fixtures, appurtenances or equipment therein. Tenant
waives the right to make repairs at Landlord's expense under any law, statute or
ordinance now or hereafter in effect
8.02 TENANTS MAINTENANCE
Subject to the provisions of Article Fourteen, Tenant shall, at Tenant's sole
cost and expense, make all repairs to the Premises and fixtures therein which
Landlord is not required to make pursuant to Section 8.01, including repairs to
the interior walls, ceilings and windows of the Premises, the interior doors,
Tenant's signage, and the electrical, life-safety, plumbing and heating,
ventilation and air conditioning systems located within or exclusively serving
the Premises and shall maintain the Premises, the fixtures and utilities systems
therein, and the area of all garbage enclosures outside and serving the
Premises, in a good, clean and safe condition. Tenant shall deliver to Landlord
a copy of any maintenance contract entered into by Tenant with respect to the
Premises. Tenant shall also, at Tenant's expense, keep any non-standard heating,
ventilating and air conditioning equipment and other non-standard equipment in
the Building in good condition and repair, using contractors approved in
advance, in writing, by Landlord. Notwithstanding Section 8.01 above, but
subject to the waivers set forth in Section 16.04, Tenant will pay for any
repairs to the Building or the Project which are caused by any negligence, or by
any willful and wrongful act, of Tenant or its assignees, subtenants or
employees, or of the respective agents of any of the foregoing persons, or of
any other persons permitted in the Building or elsewhere in the Project by
Tenant or any of them. Tenant will maintain the Premises, and will leave the
Premises upon termination of this Lease, in a safe, clean, neat and sanitary
condition.
ARTICLE NINE
ALTERATIONS AND IMPROVEMENTS
9.01 TENANT ALTERATIONS
(a) The following provisions shall apply to the completion of any Tenant
Alterations:
(1) Tenant shall not, except as provided herein, without the prior
written consent of Landlord, which consent shall not be unreasonably
withheld or delayed, make or cause to be made any Tenant Alterations in or
to the Premises or any Property systems serving the Premises. Prior to
making any Tenant Alterations, Tenant shall give Landlord ten (10) days
prior written notice (or such earlier notice as would be necessary pursuant
to applicable Law)to permit Landlord sufficient time to post appropriate
notices of non-responsibility. Subject to all other requirements of this
Article Nine, Tenant may undertake Decoration work without Landlord's prior
written consent Tenant shall furnish Landlord with the names and addresses
of all contractors and subcontractors and copies of all contracts, All
Tenant Alterations which may cause noise, vibration or other disturbance to
any other tenant(s) of the Building shall be completed at such time and
in such manner as Landlord may from time to time designate, and only by
contractors or mechanics approved by Landlord, which approval shall not be
unreasonably withheld, provided, however, that Landlord may, in its sole
discretion, specify the engineers and contractors to perform all work
relating to the Building's systems (including the mechanical, heating,
plumbing, security, ventilating, air conditioning, electrical,
communication and the fire and life safety systems in the Building). The
contractors, mechanics and engineers who may be used are further limited to
those whose work will not cause or threaten to cause disharmony or
interference with Landlord or other tenants in the Building and their
respective agents and contractors performing work in or about the Building.
Landlord may further condition its consent upon Tenant furnishing to
Landlord and Landlord approving prior to the commencement of any work or
delivery of materials to the Premises related to the Tenant Alterations
such of the following as specified by Landlord: architectural plans and
specifications, opinions from Landlord's engineers stating that the Tenant
Alterations will not in any way adversely affect the Building's systems,
necessary permits and licenses, certificates of insurance, and such other
documents in such form reasonably requested by Landlord. Landlord may, in
the exercise of
15
<PAGE>
reasonable judgment, request that Tenant provide Landlord with appropriate
evidence of Tenant's ability to complete and pay for the completion of the
Tenant Alterations such as a performance bond or letter of credit. Upon
completion of the Tenant Alterations, Tenant shall deliver to Landlord an
as-built mylar and digitized (if available) set of plans and specifications
for the Tenant Alterations.
(2) Tenant shall pay the cost of all Tenant Alterations and the cost
of decorating the Premises and any work to the Property occasioned thereby.
In connection with completion of any Tenant Alterations, Tenant shall pay
Landlord a construction fee and all elevator and hoisting charges at
Landlord's then standard rate.
(3) Tenant agrees to complete all Tenant Alterations (i) in
accordance with all Laws, Environmental Laws, all requirements of
applicable insurance companies and in accordance with Landlord's standard
construction rules and regulations, and (ii) in a good and workmanlike
manner with the use of good grades of materials. Tenant shall notify
Landlord immediately if Tenant receives any notice of violation of any Law
in connection with completion of any Tenant Alterations and shall
immediately take such steps as are necessary to remedy such violation. In
no event shall such supervision or right to supervise by Landlord nor shall
any approvals given by Landlord under this Lease constitute any warranty by
Landlord to Tenant of the adequacy of the design, workmanship or quality of
such work or materials for Tenant's intended use or of compliance with the
requirements of Section 9.01(a)(3)(i) and (ii) above or impose any
liability upon Landlord in connection with the performance of such work.
(b) All Tenant Additions to the Premises whether installed by Landlord or
Tenant, shall without compensation or credit to Tenant, become part of the
Premises and the property of Landlord at the time of their installation and
shall remain in the Premises, unless pursuant to Article Twelve, Tenant may
remove them or is required to remove them at Landlord's request.
9.02 LIENS
Tenant shall not permit any lien or claim for lien of any mechanic, laborer or
supplier or any other lien to be filed against the Building, the Land, the
Premises, or any other part of the Property arising out of work performed, or
alleged to have been performed by, or at the direction of, or on behalf of
Tenant. If any such lien or claim for lien is filed, Tenant shall within ten
(10) days of receiving notice of such lien or claim (a) have such lien or claim
for lien released of record or (b) deliver to Landlord a bond in form, content,
amount, and issued by surety, satisfactory to Landlord, indemnifying,
protecting, defending and holding harmless the Indemnitees against all costs and
liabilities resulting from such lien or claim for lien and the foreclosure or
attempted foreclosure thereof. If Tenant fails to take any of the above actions,
Landlord, in addition to its rights and remedies under Article Eleven, without
investigating the validity of such lien or claim for lien, may pay or discharge
the same and Tenant shall, as payment of additional Rent hereunder, reimburse
Landlord upon demand for the amount so paid by Landlord, including Landlord's
expenses and attorneys' fees.
ARTICLE TEN
ASSIGNMENT AND SUBLETTING
10.01 ASSIGNMENT AND SUBLETTING
(a) Without the prior written consent of Landlord, which may be withheld
in Landlord's sole discretion, Tenant may not sublease, assign, mortgage,
pledge, hypothecate or otherwise transfer or permit the transfer of this Lease
or the encumbering of Tenant's interest therein in whole or in part, by
operation of Law or otherwise or permit the use or occupancy of the Premises, or
any part thereof, by anyone other than Tenant, provided, however, if Landlord
chooses not to recapture the space proposed to be subleased or assigned as
provided in Section 10.02, Landlord shall not unreasonably withhold its consent
to a subletting or assignment under this Section 10.01. Tenant agrees that the
provisions governing sublease and assignment set forth in this Article Ten shall
be deemed to be reasonable. If Tenant desires to enter into any sublease of the
Premises or assignment of this. Lease, Tenant shall deliver written notice
thereof to Landlord ("Tenant's Notice"), together with the identity of the
proposed subtenant or assignee and the proposed principal terms thereof and
financial and other information sufficient for Landlord to make an informed
judgment with respect to such proposed subtenant or assignee at least thirty-
five (35) days prior to the commencement date of the term of the proposed
sublease or assignment. If Tenant proposes to sublease less than all of the
Rentable Area of the Premises, the space proposed to be sublet and the space
retained by Tenant must each be a marketable unit as reasonably determined by
Landlord and otherwise in compliance with all Laws. Landlord shall notify Tenant
in writing of its approval or disapproval of the proposed sublease or assignment
or its decision to exercise its rights under Section 10.02 within fifteen (15)
days after receipt of Tenant's Notice (and all required information). In no
event may Tenant sublease any portion of the Premises or assign the Lease to any
other tenant of the Project if Landlord has for lease, is then marketing for
lease or will have for lease within a time frame that is acceptable to the
proposed subtenant or assignee space of approximately the size sought by such
prospective subtenant or assignee. Tenant shall submit for Landlord's approval
(which approval shall not be unreasonably withheld) any advertising which Tenant
or its agents intend to use with respect to the space proposed to be sublet.
16
<PAGE>
(b) With respect to Landlord's consent to an assignment or sublease,
Landlord may take into consideration any factors which Landlord may reasonably
deem relevant, and the reasons for which Landlord's denial shall be deemed to be
reasonable shall include, without limitation, the following:
(i) the business reputation or creditworthiness of any proposed
subtenant or assignee is not acceptable to Landlord consistent with the
standards then being applied by Landlord respecting other prospective
occupants of the Project; or
(ii) in Landlord's reasonable judgment the proposed assignee or subtenant
would diminish the value or reputation of the Building or Landlord; or
(iii) any proposed assignee's or subtenant's use of the Premises would
violate Section 7.01 of the Lease or would violate the provisions of any
other leases of tenants in the Project;
(iv) the proposed assignee or subtenant is either a governmental agency,
a school or similar operation, or a medical related practice; or
(v) the proposed subtenant or assignee is a bona fide prospective tenant
of Landlord in the Project as demonstrated by a written proposal dated
within ninety (90) days prior to the date of Tenant's request; or
(vi) the proposed subtenant or assignee would materially increase the
estimated pedestrian and vehicular traffic to and from the Premises and the
Building.
In no event shall Landlord be obligated to consider a consent to any proposed
assignment of the Lease which would assign less than the entire Premises. In
the event Landlord wrongfully withholds its consent to any proposed sublease of
the Premises or assignment of the Lease, Tenant's sole and exclusive remedy
therefor shall be to seek specific performance of Landlord's obligations to
consent to such sublease or assignment.
(c) Any sublease or assignment shall be expressly subject to the terms
and conditions of this Lease. Any subtenant or assignee shall execute such
documents as Landlord may reasonably require to evidence such subtenant or
assignee's assumption of the obligations and liabilities of Tenant under this
Lease. Tenant shall deliver to Landlord a copy of all agreements executed by
Tenant and the proposed subtenant and assignee with respect to the Premises.
Landlord's approval of a sublease, assignment, hypothecation, transfer or third
party use or occupancy shall not constitute a waiver of Tenant's obligation to
obtain Landlord's consent to further assignments or subleases, hypothecations,
transfers or third party use or occupancy.
(d) For purposes of this Article Ten, an assignment shall be deemed to
include a change in the majority control of Tenant, resulting from any
transfer, sale or assignment of shares of stock or membership interests of
Tenant occurring by operation of Law or otherwise, and includes any merger,
acquisition, consideration or reorganization, except as otherwise provided in
this Subsection. Nothwithstanding any provision of this Section to the
contrary, an assignment for purposes of this Article does not include any
transfer of control of the stock or membership interests of Tenant through (i)
any public offering of shares of stock in Tenant in accordance with applicable
State and Federal law, rules, regulations and orders if thereafter the stock
shall be listed and publicly traded through the New York Stock Exchange,
American Stock Exchange or Pacific Stock Exchange, or listed and publicly traded
through the NASDAQ national market and its price listed at least daily in the
Wall Street Journal; or (ii) public sale of such stock effected through such
-------------------
Exchanges or the NASDAQ national market. If Tenant is a partnership, any change
of a sole general partner of Tenant or in those partners of Tenant holding more
than thirty-three percent (33%) of the partnership interests in Tenant shall be
deemed to be an assignment.
(e) Nothwithstanding anything to the contrary in Sections 10.01(a) and
10.02, but subject to Section 10.03, Tenant shall have the right, without the
prior written consent of Landlord, to assign this Lease to an Affiliate (defined
below) or to sublease the Premises or any part thereof to an Affiliate provided
that (i) Landlord receives thirty (30) days prior written notice of an
assignment or sublease; (ii) the Affiliate's net worth is not less than Tenant's
net worth immediately prior to the assignment or subletting (except with respect
to any sublease or subleases in the aggregate for less than half of the then
Rentable Area of the Premises); (iii) the Affiliate has proven experience in the
Operation of a first-class business of a type consistent with the use of the
building; (iv) the Affiliate assumes (except in the event of a sublease) in
writing satisfactory to Landlord all of Tenant's obligations and liability under
this Lease and delivers to Landlord a proposed assumption no later than five (5)
business days prior to the effective date of the assignment and a fully executed
original of such assumption no later than the effective date; (v) Landlord
receives no later than the effective date a fully executed copy of an assignment
or sublease agreement between tenant and the Affiliate; and (vi) promptly after
Landlord's written request, Tenant and the Affiliate provide such reasonable
documents or information which Landlord reasonably requests for the purpose of
substantiating whether or not the assignment or sublease is to an Affiliate.
(f) For purposes of this Lease, Affiliate shall mean any Person (as
defined below) which: (i) is controlled by, controls, or is under common control
with Tenant; or (ii) is the corporation or other entity (the "Successor")
resulting from a merger, consolidation or non-bankruptcy reorganization with
Tenant; or (iii)
17
<PAGE>
purchases substantially all the assets of Tenant as a going concern. The word
Person means an individual, corporation, limited liability company, partnership,
trust, firm or other entity. For purposes of this definition, the word
"control," shall mean, with respect to a Person that is a corporation or a
limited liability company, the right to exercise, directly or indirectly, more
than fifty percent (50%) of the voting rights attributable to the shares or
membership interests of the controlled Person and, with respect to a Person that
is not a corporation, the possession, directly or indirectly, of the power at
all times to direct or cause the direction of the management of the controlled
Person.
10.02 RECAPTURE
Except for (i) a deemed assignment under Section 10.01(d), or (ii) a sublease or
assignment satisfying the requirements of Sections 10.01(e) and (f), or (iii) a
sublease of the Penobscot Space if executed by Tenant and the subtenant within
six (6) months after the Delivery Date of the Penobscot Space for a sublease
term no longer than two (2) years, Landlord shall have the option to exclude
from the Premises covered by this Lease ("recapture"), the space proposed to be
sublet or subject to the assignment, effective as of the proposed commencement
date of such sublease or assignment. If Landlord elects to recapture, Tenant
shall surrender possession of the space proposed to be subleased or subject to
the assignment to Landlord on the effective date of recapture of such space from
the Premises, such date being the Termination Date for such space. Effective as
of the date of recapture of any portion of the Premises pursuant to this
section, the Monthly Base Rent, Rentable Area of the Premises and Tenant's Share
shall be adjusted accordingly.
10.03 EXCESS RENT
Tenant shall pay Landlord on the first day of each month during the term of the
sublease or assignment, seventy-five percent (75%) of the amount by which the
sum of all rent and other consideration (direct or indirect) due from the
subtenant or assignee for such month exceeds: (i) that portion of the Monthly
Base Rent and Rent Adjustments due under this Lease for said month which is
allocable to the space sublet or assigned; and (ii) the following costs and
expenses for the subletting or assignment of such space: (1) brokerage
commissions and attorneys' fees and expenses, (2) the actual costs paid in
making any improvements or substitutions in the Premises required by any
sublease or assignment; and (3) "free rent" periods, costs of any inducements or
concessions given to subtenant or assignee, moving costs, and other amounts in
respect of such subtenant's or assignee's other leases or occupancy
arrangements. All such costs and expenses shall be amortized over the term of
the sublease or assignment pursuant to sound accounting principles.
10.04 TENANT LIABILITY
In the event of any sublease or assignment, whether or not with Landlord's
consent, Tenant shall not be released or discharged from any liability, whether
past, present or future, under this Lease, including any liability arising from
the exercise of any renewal or expansion option, to the extent such exercise is
expressly permitted by Landlord. Tenant's liability shall remain primary, and in
the event of default by any subtenant, assignee or successor of Tenant in
performance or observance of any of the covenants or conditions of this Lease,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against said subtenant, assignee or successor. After any assignment,
Landlord may consent to subsequent assignments or subletting of this Lease, or
amendments or modifications of this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto, and such action shall not relieve Tenant or any successor of
Tenant of liability under this Lease. If Landlord grants consent to such
sublease or assignment, Tenant shall pay all reasonable attorneys' fees and
expenses incurred by Landlord with respect to such assignment or sublease. In
addition, if Tenant has any options to extend the term of this Lease or to add
other space to the Premises, such options shall not be available to any
subtenant or assignee, directly or indirectly without Landlord's express written
consent, which may be withheld in Landlord's sole discretion.
10.05 ASSUMPTION AND ATTORNMENT
If Tenant shall assign this Lease as permitted herein, the assignee shall
expressly assume all of the obligations of Tenant hereunder in a written
instrument satisfactory to Landlord and furnished to Landlord not later than
five (5) business days prior to the effective date of the assignment. If Tenant
shall sublease the Premises as permitted herein, Tenant shall, at Landlord's
option, within fifteen (15) days following any request by Landlord, obtain and
furnish to Landlord the written agreement of such subtenant to the effect that
the subtenant will attorn to Landlord and will pay all subrent directly to
Landlord upon a Default by Tenant.
ARTICLE ELEVEN
DEFAULT AND REMEDIES
11.01 EVENTS OF DEFAULT
The occurrence or existence of any one or more of the following shall constitute
a "Default" by Tenant under this Lease:
(i) Tenant fails to pay any installment or other payment of Rent
including Rent Adjustment Deposits or Rent Adjustments within three (3)
days after the date when due;
18
<PAGE>
(ii) Tenant fails to observe or perform any of the other covenants,
conditions or provisions of this Lease or the Workletter and fails to cure
such default within fifteen (15) days after written notice thereof to
Tenant, unless the default involves a hazardous condition, which shall be
cured forthwith or unless the failure to perform is a Default for which
this Lease specifies there is no cure or grace period, provided however,
if the default is one to which the fifteen (15) day cure period applies
and of such nature that it cannot reasonably be cured within fifteen (15)
days, Tenant shall be in Default if Tenant either fails to commence to
cure such default within fifteen (15) days or fails diligently to
prosecute such cure to completion or in any event fails to complete such
cure within sixty (60) days after such written notice from Landlord;
(iii) the interest of Tenant in this Lease is levied upon under
execution or other legal process;
(iv) a petition is filed by or against Tenant to declare Tenant
bankrupt or seeking a plan of reorganization or arrangement under any
Chapter of the Bankruptcy Act, or any amendment, replacement or
substitution therefor, or to delay payment of, reduce or modify Tenant's
debts, which in the case of an involuntary action is not discharged within
thirty (30) days;
(v) Tenant is declared insolvent by Law or any assignment of
Tenant's property is made for the benefit of creditors;
(vi) a receiver is appointed for Tenant or Tenant's property, which
appointment is not discharged within thirty (30) days;
(vii) any action taken by or against Tenant to reorganize or modify
Tenant's capital structure in a materially adverse way which in the case
of an involuntary action is not discharged within thirty (30) days;
(viii) upon the dissolution of Tenant without assumption of this Lease
by a permitted assignee in accordance with the provisions of Article Ten;
or
(ix) upon the third occurrence within any Lease Year that Tenant
fails to pay Rent when due or has breached a particular covenant of this
Lease (whether or not such failure or breach is thereafter cured within
any stated cure or grace period or statutory period).
11.02 LANDLORD'S REMEDIES
(a) A Default shall constitute a breach of the Lease for which Landlord
shall have the rights and remedies set forth in this Section 11.02 and all other
rights and remedies set forth in this Lease or now or hereafter allowed by Law,
whether legal or equitable, and all rights and remedies of Landlord shall be
cumulative and none shall exclude any other right or remedy.
(b) With respect to a Default, at any time Landlord may terminate Tenant's
right to possession by written notice to Tenant stating such election. Any
written notice required pursuant to Section 11.01 shall constitute notice of
unlawful detainer pursuant to California Code of Civil Procedure Section 1161
if, at Landlord's sole discretion, it states Landlord's election that Tenant's
right to possession is terminated after expiration of any period required by Law
or any longer period required by Section 11.01. Upon the expiration of the
period stated in Landlord's written notice of termination (and unless such
notice provides an option to cure within such period and Tenant cures the
Default within such period), Tenants right to possession shall terminate and
this Lease shall terminate, and Tenant shall remain liable as hereinafter
provided. Upon such termination in writing of Tenant's right to possession,
Landlord shall have the right, subject to applicable Law, to re-enter the
Premises and dispossess Tenant and the legal representatives of Tenant and all
other occupants of the Premises by unlawful detainer or other summary
proceedings, or otherwise as permitted by Law, regain possession of the Premises
and remove their property (including their trade fixtures, personal property and
those Tenant Additions which Tenant is required or permitted to remove under
Article Twelve), but Landlord shall not be obligated to effect such removal, and
such property may, at Landlord's option, be stored elsewhere, sold or otherwise
dealt with as permitted by Law, at the risk of, expense of and for the account
of Tenant, and the proceeds of any sale shall be applied pursuant to Law.
Landlord shall in no event be responsible for the value, preservation or
safekeeping of any such property. Tenant hereby waives all claims for damages
that may be caused by Landlord's removing or storing Tenants personal property
pursuant to this Section or Section 12.01, and Tenant hereby indemnifies, and
agrees to defend, protect and hold harmless, the Indemnitees from any and all
loss, claims, demands, actions, expenses, liability and cost (including
attorneys' fees and expenses) arising out of or in any way related to such
removal or storage. Upon such written termination of Tenant's right to
possession and this Lease, Landlord shall have the right to recover damages for
Tenant's Default as provided herein or by Law, including the following damages
provided by California Civil Code Section 1951.2:
(1) the worth at the time of award of the unpaid Rent which had
been earned at the time of termination;
19
<PAGE>
(2) the worth at the time of award of the amount by which the unpaid
Rent which would have been earned after termination until the time of
award exceeds the amount of such Rent loss that Tenant proves could
reasonably have been avoided;
(3) the worth at the time of award of the amount by which the unpaid
Rent for the balance of the term of this Lease after the time of award
exceeds the amount of such Rent loss that Tenant proves could be
reasonably avoided; and
(4) 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. The word "rent" as used in this
Section 11.02 shall have the same meaning as the defined term Rent in this
Lease. The "worth at the time of award" of the amount referred to in
clauses (1) and (2) above is computed by allowing interest at the Default
Rate. The worth at the time of award of the amount referred to in clause
(3) above is computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%). For the purpose of determining unpaid Rent under clause (3)
above, the monthly Rent reserved in this Lease shall be deemed to be the
sum of the Monthly Base Rent, and monthly Storage Space Rent, if any, and
the amounts last payable by Tenant as Rent Adjustments for the calendar
year in which Landlord terminated this Lease as provided hereinabove.
(c) Even if Tenant is in Default and/or has abandoned the Premises, this
Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession by written notice as provided in Section 11.02(b)
above, and Landlord may enforce all its rights and remedies under this Lease,
including the right to recover Rent as it becomes due under this Lease. In such
event, Landlord shall have all of the rights and remedies of a landlord under
California Civil Code Section 1951.4 (lessor may continue Lease in effect after
Tenant's Default and abandonment and recover Rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable limitations), or
any successor statute. During such time as Tenant is in Default, if Landlord has
not terminated this Lease by written notice and if Tenant requests Landlord's
consent to an assignment of this Lease or a sublease of the Premises, subject to
Landlord's option to recapture pursuant to Section 10.02, Landlord shall not
unreasonably withhold its consent to such assignment or sublease. Tenant
acknowledges and agrees that the provisions of Article Ten shall be deemed to
constitute reasonable limitations of Tenant's right to assign or sublet. Tenant
acknowledges and agrees that in the absence of written notice pursuant to
Section 11.02(b) above terminating Tenant's right to possession, no other act of
Landlord shall constitute a termination of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises, including acts of maintenance
or preservation or efforts to relet the Premises or the appointment of a
receiver upon initiative of Landlord to protect Landlord's interest under this
Lease or the withholding of consent to a subletting or assignment, or
terminating a subletting or assignment, if in accordance with other provisions
of this Lease.
(d) In the event that Landlord seeks an injunction with respect to a
breach or threatened breach by Tenant of any of the covenants, conditions or
provisions of this Lease, Tenant agrees to pay the premium for any bond required
in connection with such injunction.
(e) Tenant hereby waives any and all rights to relief from forfeiture,
redemption or reinstatement granted by Law (including California Civil Code of
Procedure Sections 1174 and 1179) in the event of Tenant being evicted or
dispossessed for any cause or in the event of Landlord obtaining possession of
the Premises by reason of Tenant's Default or otherwise;
(f) When this Lease requires giving or service of a notice, that notice
shall replace rather than supplement any equivalent or similar statutory notice,
including any equivalent or similar notices required by California Code of Civil
Procedure Section 1161 or any similar or successor statute. When a statute
requires service of a notice in a particular manner, service of that notice (or
a similar notice required by this Lease) in the manner required by Article
Twenty-four shall replace and satisfy the statutory service-of-notice
procedures, including those required by Code of Civil Procedure section 1162 or
any similar or successor statute.
(g) The voluntary or other surrender or termination of this Lease, or a
mutual termination or cancellation thereof, shall not work a merger and shall
terminate all or any existing assignments, subleases, subtenancies or
occupancies permitted by Tenant, except if and as otherwise specified in writing
by Landlord.
(h) No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant, and no exercise by Landlord of its rights
pursuant to Section 26.15 to perform any duty which Tenant fails timely to
perform, shall impair any right or remedy or be construed as a waiver. No
provision of this Lease shall be deemed waived by Landlord unless such waiver is
in a writing signed by Landlord. The waiver by Landlord of any breach of any
provision of this Lease shall not be deemed a waiver of any subsequent breach of
the same or any other provision of this Lease.
11.03 ATTORNEY'S FEES
In the event any party brings any suit or other proceeding with respect to the
subject matter or enforcement of this Lease, the prevailing party (as determined
by the court, agency or other authority before which such
20
<PAGE>
suit or proceeding is commenced) shall, in addition to such other relief as may
be awarded, be entitled to recover reasonable attorneys' fees, expenses and
costs of investigation as actually incurred, including court costs, expert
witness fees, costs and expenses of investigation, and all reasonable attorneys'
fees, costs and expenses in any such suit or proceeding (including in any action
or participation in or in connection with any case or proceeding under the
Bankruptcy Code, 11 United States Code Sections 101 et seq., or any successor
statutes, in establishing or enforcing the right to indemnification, in
appellate proceedings, or in connection with the enforcement or collection of
any judgment obtained in any such suit or proceeding).
11.04 BANKRUPTCY
The following provisions shall apply in the event of the bankruptcy or
insolvency of Tenant:
(a) In connection with any proceeding under Chapter 7 of the Bankruptcy
Code where the trustee of Tenant elects to assume this Lease for the purposes of
assigning it, such election or assignment, may only be made upon compliance with
the provisions of (b) and (c) below, which conditions Landlord and Tenant
acknowledge to be commercially reasonable. In the event the trustee elects to
reject this Lease then Landlord shall immediately be entitled to possession of
the Premises without further obligation to Tenant or the trustee.
(b) Any election to assume this Lease under Chapter 11 or 13 of the
Bankruptcy Code by Tenant as debtor-in-possession or by Tenant's trustee (the
"Electing Party") must provide for:
The Electing Party to cure or provide to Landlord adequate assurance that
it will cure all monetary defaults under this Lease within fifteen (15)
days from the date of assumption and it will cure all nonmonetary defaults
under this Lease within thirty (30) days from the date of assumption.
Landlord and Tenant acknowledge such condition to be commercially
reasonable.
(c) If the Electing Party has assumed this Lease or elects to assign
Tenant's interest under this Lease to any other person, such interest may be
assigned only if the intended assignee has provided adequate assurance of future
performance (as herein defined), of all of the obligations imposed on Tenant
under this Lease.
For the purposes hereof, "adequate assurance of future performance" means
that Landlord has ascertained that each of the following conditions has
been satisfied:
(i) The assignee has submitted a current financial statement,
certified by its chief financial officer, which shows a net worth and
working capital in amounts sufficient to assure the future performance by
the assignee of Tenant's obligations under this Lease; and
(ii) Landlord has obtained consents or waivers from any third parties
which may be required under a lease, mortgage, financing arrangement, or
other agreement by which Landlord is bound, to enable Landlord to permit
such assignment.
(d) Landlord's acceptance of rent or any other payment from any trustee,
receiver, assignee, person, or other entity will not be deemed to have waived,
or waive, the requirement of Landlord's consent, Landlord's right to terminate
this Lease for any transfer of Tenant's interest under this Lease without such
consent, or Landlord's claim for any amount of Rent due from Tenant.
11.05 LANDLORD'S DEFAULT
Landlord shall be in default hereunder in the event Landlord has not begun and
pursued with reasonable diligence the cure of any failure of Landlord to meet
its obligations hereunder within thirty (30) days after the receipt by Landlord
of written notice from Tenant of the alleged failure to perform. In no event
shall Tenant have the right to terminate or rescind this Lease as a result of
Landlord's default as to any covenant or agreement contained in this Lease.
Tenant hereby waives such remedies of termination and rescission and hereby
agrees that Tenant's remedies for default hereunder and for breach of any
promise or inducement shall be limited to a suit for damages and/or injunction.
In addition, Tenant hereby covenants that, prior to the exercise of any such
remedies, it will give Mortgagee notice and a reasonable time to cure any
default by Landlord.
ARTICLE TWELVE
SURRENDER OF PREMISES
12.01 IN GENERAL
Upon the Termination Date, Tenant shall surrender and vacate the Premises
immediately and deliver possession thereof to Landlord in a clean and good
condition, ordinary wear and tear, and damage caused by Landlord or casualty
(subject to Tenant's obligations pursuant to Article Sixteen) excepted. Tenant
shall deliver to Landlord all keys to the Premises. Tenant shall remove from the
Premises all movable personal property of Tenant and Tenant's trade fixtures,
including, subject to Section 6.04, cabling for any of the foregoing. Tenant
shall be entitled to remove such Tenant Additions which at the time of their
installation Landlord and Tenant agreed may be removed by Tenant. Tenant shall
also remove, as required by Landlord:
21
<PAGE>
(a) any Tenant Alterations containing Hazardous Material, if any, and (b) any
other Tenant Alterations except for those Landlord approves without
contemporaneous notice to Tenant identifying which, if any, such improvements
must be removed. Provided however, Landlord shall be required at the time of
approval to so notify Tenant that removal is required only if at the time Tenant
requests such approval, Tenant's request also specifies in all capital letters
that Landlord must identify any Tenant Alterations which Landlord will require
Tenant to remove and refers to this Section of the Lease, and if Tenant fails to
so specify, then Landlord has the right to require removal by Tenant on or about
the Termination Date. Provided, however, regardless of whether or not Landlord
gives Tenant notice of required removal at the time of approval, in any event
(i) Tenant shall repair all damage resulting from removal of any of Tenant's
property, furnishings or Tenant Additions; (ii) Tenant shall close all floor,
ceiling and roof openings created by Tenant; (iii) if any of the Tenant
Additions which were installed by Tenant involved the lowering of ceilings,
raising of floors or the installation of specialized wall or floor coverings or
lights, then Tenant shall also be obligated to return such surfaces to their
condition prior to the commencement of this Lease, and (iv) Tenant shall also be
required to close any staircases or other openings between floors created by
Tenant.
12.02 LANDLORD'S RIGHTS
All property which may be removed from the Premises by Landlord shall be
conclusively presumed to have been abandoned by Tenant and Landlord may deal
with such property as provided in Section 11.02(b), including the waiver and
indemnity obligations provided in that Section. Tenant shall also reimburse
Landlord for all costs and expenses incurred by Landlord in removing any of
Tenant Additions and in restoring the Premises to the condition required by this
Lease at the Termination Date.
ARTICLE THIRTEEN
HOLDING OVER
Tenant shall pay Landlord the greater of (i) one hundred and fifty percent
(150%) of the monthly Rent payable for the month immediately preceding the
holding over (including increases for Rent Adjustments which Landlord may
reasonably estimate) or, (ii) one hundred and fifty percent (150%) of the fair
market rental value of the Premises as reasonably determined by Landlord for
each month or portion thereof that Tenant retains possession of the Premises, or
any portion thereof, after the Termination Date (without reduction for any
partial month that Tenant retains possession). Tenant shall also pay all damages
sustained by Landlord by reason of such retention of possession. The provisions
of this Article shall not constitute a waiver by Landlord of any re-entry rights
of Landlord and Tenant's continued occupancy of the Premises shall be as a
tenancy in sufferance.
ARTICLE FOURTEEN
DAMAGE BY FIRE OR OTHER CASUALTY
14.01 SUBSTANTIAL UNTENANTABILITY
(a) If any fire or other casualty (whether insured or uninsured) renders
all or a substantial portion of the Premises or either Building in which the
Premises is located untenantable, Landlord shall, with reasonable promptness
after the occurrence of such damage, reasonably estimate the length of time that
will be required to substantially complete the repair and restoration and shall
by notice advise Tenant of such estimate ("Landlord's Notice"). If Landlord
estimates that the amount of time required to substantially complete such repair
and restoration will exceed one hundred eighty (180) days from the date such
damage occurred, then Landlord, or Tenant if all or a substantial portion of the
Premises is rendered untenantable, shall have the right to terminate this Lease
as of the date of such damage upon giving written notice to the other at any
time within twenty (20) days after delivery of Landlord's Notice, provided that
if Landlord so chooses, Landlord's Notice may also constitute such notice of
termination, provided however, in the event the above-described damage or
destruction affects only one of the two (2) Buildings in which the Premises is
located, then Landlord or Tenant shall be entitled to terminate this Lease only
with respect to the part of the Premises (either the Penobscot Space or the
Saginaw Space) in the Building so affected, and the Lease shall continue in full
force and effect to the extent of the remainder, if any, of the Premises.
(b) In the event that the Building is damaged or destroyed to the extent
of more than twenty-five percent (25%) of its replacement cost or to any extent
if no insurance proceeds or insufficient insurance proceeds are receivable by
Landlord, or if the buildings at the Project shall be damaged to the extent of
fifty percent (50%) or more of the replacement value or to any extent if no
insurance proceeds or insufficient insurance proceeds are receivable by
Landlord, and regardless of whether or not the Premises be damaged, Landlord may
elect by written notice to Tenant given within thirty (30) days after the
occurrence of the casualty to terminate this Lease in lieu of so restoring the
Premises, in which event this Lease shall terminate as of the date specified in
Landlord's notice. Provided however, in the event the above-described damage or
destruction to the Building affects only one of the two (2) Buildings in which
the Premises is located and in the event that Landlord is not entitled or elects
not to terminate this Lease by reason of damage to the Project as described
above, then Landlord shall be entitled to terminate this Lease only with respect
to the part of the Premises (either the Penobscot Premises or the Saginaw
Premises) in the Building so affected, and the Lease shall continue in full
force and effect to the extent of the remainder, if any, of the Premises.
22
<PAGE>
(c) Unless this Lease is terminated as provided in the preceding
Subsections 14.01 (a) and (b), Landlord shall proceed with reasonable promptness
to repair and restore the Premises to its condition as existed prior to such
casualty, subject to reasonable delays for insurance adjustments and Force
Majeure delays, and also subject to zoning Laws and building codes then in
effect. Landlord shall have no liability to Tenant, and Tenant shall not be
entitled to terminate this Lease if such repairs and restoration are not in fact
completed within the time period estimated by Landlord so long as Landlord shall
proceed with reasonable diligence to complete such repairs and restoration.
(d) Tenant acknowledges that Landlord shall be entitled to the full
proceeds of any insurance coverage, whether carried by Landlord or Tenant, for
damages to the Premises, except for those proceeds of Tenant's insurance of its
own personal property and equipment which would be removable by Tenant at the
Termination Date. All such insurance proceeds shall be payable to Landlord
whether or not the Premises are to be repaired and restored, provided, however,
if this Lease is not terminated and the parties proceed to repair and restore
Tenant Additions at Tenant's cost, to the extent Landlord received proceeds of
Tenant's insurance covering Tenant Additions, such proceeds shall be applied to
reimburse Tenant for its cost of repairing and restoring Tenant Additions.
(e) Notwithstanding anything in this Article Fourteen to the contrary: (i)
Landlord shall have no duty pursuant to this Section to repair or restore any
portion of any Tenant Additions or to expend for any repair or restoration of
the Premises or Building amounts in excess of insurance proceeds paid to
Landlord and available for repair or restoration; and (ii) Tenant shall not have
the right to terminate this Lease pursuant to this Section if any damage or
destruction was caused by the act or neglect of Tenant, its agent or employees.
Whether or not the Lease is terminated pursuant to this Article Fourteen, in no
event shall Tenant be entitled to any compensation or damages for loss of the
use of the whole or any part of the Premises or for any inconvenience or
annoyance occasioned by any such damage, destruction, rebuilding or restoration
of the Premises or the Building or access thereto.
(f) Any repair or restoration of the Premises performed by Tenant shall be
in accordance with the provisions of Article Nine hereof.
14.02 INSUBSTANTIAL UNTENANTABILITY
Unless this Lease is terminated as provided in the preceding Subsections 14.01
(a) and (b), then Landlord shall proceed to repair and restore the Building or
the Premises other than Tenant Additions, with reasonable promptness, unless
such damage is to the Premises and occurs during the last six (6) months of the
Term, in which event either Tenant or Landlord shall have the right to terminate
this Lease as of the date of such casualty by giving written notice thereof to
the other within twenty (20) days after the date of such casualty.
Notwithstanding the foregoing, Landlord's obligation to repair shall be limited
in accordance with the provisions of Section 14.01 above.
14.03 RENT ABATEMENT
Except for the negligence or willful act of Tenant or its agents, employees,
contractors or invitees, if all or any part of the Premises are rendered
untenantable by fire or other casualty and this Lease is not terminated, Monthly
Base Rent and Rent Adjustments shall abate for that part of the Premises which
is untenantable on a per diem basis from the date of the casualty until (i)
Landlord has Substantially Completed the repair and restoration work in the
Premises which it is required to perform, provided, that as a result of such
casualty, Tenant does not occupy the portion of the Premises which is
untenantable during such period; and (ii) Tenant has substantially completed the
repair and restoration work in the Premises which it is required to perform,
provided, that as a result of such casualty, Tenant does not occupy the portion
of the Premises which is untenantable during such period and provided further
that the time allowed for Tenant's substantial completion shall not exceed
thirty (30) days after the date Landlord Substantially Completes the repair and
restoration work which Landlord is required to perform.
14.04 WAIVER OF STATUTORY REMEDIES
The provisions of this Lease, including this Article Fourteen, constitute an
express agreement between Landlord and Tenant with respect to any and all damage
to, or destruction of, the Premises or the Property or any part of either, and
any Law, including Sections 1932(2), 1933(4), 1941 and 1942 of the California
Civil Code, with respect to any rights or obligations concerning damage or
destruction shall have no application to this Lease or to any damage to or
destruction of all or any part of the Premises or the Property or any part of
either, and are hereby waived.
ARTICLE FIFTEEN
EMINENT DOMAIN
15.01 TAKING OF WHOLE OR SUBSTANTIAL PART
In the event the whole or any substantial part of the Building or of the
Premises is taken or condemned by any competent authority for any public use or
purpose (including a deed given in lieu of condemnation) and is thereby rendered
untenantable, this Lease shall terminate as of the date title vests in such
authority or any earlier date on which possession is required to be surrendered
to such authority, and Monthly Base Rent and
23
<PAGE>
Rent Adjustments shall be apportioned as of the Termination Date. Further, if at
least twenty-five percent (25%) of the rentable area of the Project is taken or
condemned by any competent authority for any public use or purpose (including a
deed given in lieu of condemnation), and regardless of whether or not the
Premises be so taken or condemned, Landlord may elect by written notice to
Tenant to terminate this Lease as of the date title vests in such authority or
any earlier date on which possession is required to be surrendered to such
authority, and Monthly Base Rent and Rent Adjustments shall be apportioned as of
the Termination Date. Landlord may, without any obligation to Tenant, agree to
sell or convey to the taking authority the Premises, the Building, Tenant's
Phase, the Project or any portion thereof sought by the taking authority, free
from this Lease and the right of Tenant hereunder, without first requiring that
any action or proceeding be instituted or, if instituted, pursued to a judgment.
Notwithstanding anything to the contrary herein set forth, in the event the
taking of the Building or Premises is temporary (for less than the remaining
term of the Lease), Landlord may elect either (i) to terminate this Lease or
(ii) permit Tenant to receive the entire award attributable to the Premises in
which case Tenant shall continue to pay Rent and this Lease shall not terminate.
15.02 TAKING OF PART
In the event a part of the Building or the Premises is taken or condemned by any
competent authority (or a deed is delivered in lieu of condemnation) and this
Lease is not terminated, the Lease shall be amended to reduce or increase, as
the case may be, the Monthly Base Rent and Tenant's Share to reflect the
Rentable Area of the Premises or Building, as the case may be, remaining after
any such taking or condemnation. Landlord, upon receipt and to the extent of the
award in condemnation (or proceeds of sale) shall make necessary repairs and
restorations to the Premises (exclusive of Tenant Additions) and to the Building
to the extent necessary to constitute the portion of the Building not so taken
or condemned as a complete architectural and economically efficient unit.
Notwithstanding the foregoing, if as a result of any taking, or a governmental
order that the grade of any street or alley adjacent to the Building is to be
changed and such taking or change of grade makes it necessary or desirable to
substantially remodel or restore the Building or prevents the economical
operation of the Building, Landlord shall have the right to terminate this Lease
upon ninety (90) days prior written notice to Tenant.
15.03 COMPENSATION
Landlord shall be entitled to receive the entire award (or sale proceeds) from
any such taking, condemnation or sale without any payment to Tenant, and Tenant
hereby assigns to Landlord Tenant's interest, if any, in such award; provided,
however, Tenant shall have the right separately to pursue against the condemning
authority a separate award in respect of the loss, if any, to Tenant Additions
paid for by Tenant without any credit or allowance from Landlord, for fixtures
or personal property of Tenant, or for relocation or business interruption
expenses or loss of goodwill, if any, so long as there is no diminution of
Landlord's award as a result.
ARTICLE SIXTEEN
INSURANCE
16.01 TENANT'S INSURANCE
Tenant, at Tenant's expense, agrees to maintain in force, with a company or
companies acceptable to Landlord, during the Term: (a) Commercial General
Liability Insurance on a primary basis and without any right of contribution
from any insurance carried by Landlord covering the Premises on an occurrence
basis against all claims for personal injury, bodily injury, death and property
damage, including contractual liability covering the indemnification provisions
in this Lease. Such insurance shall be for such limits that are reasonably
required by Landlord from time to time but not less than a combined single limit
of Five Million and No/100 Dollars ($5,000,000.00); (b) Workers' Compensation
and Employers' Liability Insurance to the extent required by and in accordance
with the Laws of the State of California; (c) "All Risks" property insurance in
an amount adequate to cover the full replacement cost of all Tenant Additions to
the Premises, equipment, installations, fixtures and contents of the Premises in
the event of loss; (d) In the event a motor vehicle is to be used by Tenant in
connection with its business operation from the Premises, Comprehensive
Automobile Liability Insurance coverage with limits of not less than Three
Million and No/100 Dollars ($3,000,000.00) combined single limit coverage
against bodily injury liability and property damage liability arising out of the
use by or on behalf of Tenant, its agents and employees in connection with this
Lease, of any owned, non-owned or hired motor vehicles; and (e) such other
insurance or coverages as Landlord reasonably requires.
16.02 FORM OF POLICIES
Each policy referred to in 16.01 shall satisfy the following requirements. Each
policy shall (i) name Landlord and the Indemnitees as additional insureds except
Workers' Compensation and Employers' Liability Insurance and except that the
Landlord (and any Mortgage and ground lessor upon written notice to Tenant)
shall be named loss payees of the "All Risks" Insurance (which "All Risks"
proceeds shall be held or released by Landlord as provided in Section 14.01(d)
above), (ii) be issued by one or more responsible insurance companies licensed
to do business in the State of California reasonably satisfactory to Landlord,
(iii) where applicable, provide for deductible amounts satisfactory to Landlord
and not permit co-insurance, (iv) shall provide that such insurance may not be
canceled or amended without thirty (30) days' prior written notice to
24
<PAGE>
the Landlord, and (v) each policy of "All-Risks" property insurance shall
provide that the policy shall not be invalidated should the insured waive in
writing prior to a loss, any or all rights of recovery against any other party
for losses covered by such policies. Tenant shall deliver to Landlord,
certificates of insurance and at Landlord's request, copies of all policies and
renewals thereof to be maintained by Tenant hereunder, not less than ten (10)
days prior to the Commencement Date and not less than ten (10) days prior to the
expiration date of each policy.
16.03 LANDLORD'S INSURANCE
Landlord agrees to purchase and keep in full force and effect during the Term
hereof, including any extensions or renewals thereof, insurance under policies
issued by insurers of recognized responsibility, qualified to do business in the
State of California on the Building in amounts not less than the greater of
eighty (80%) percent of the then full replacement cost (without depreciation) of
the Building (above foundations and excluding Tenant Additions to the Premises)
or an amount sufficient to prevent Landlord from becoming a co-insurer under the
terms of the applicable policies, against fire and such other risks as may be
included in standard forms of all risk coverage insurance reasonably available
from time to time. Landlord agrees to maintain in force during the Term,
Commercial General Liability Insurance covering the Building and the Common
Areas on an occurrence basis against all claims for personal injury, bodily
injury, death and property damage. Such insurance shall be for a combined single
limit of Five Million and No/100 Dollars ($5,000,000.00). Neither Landlord's
obligation to carry such insurance nor the carrying of such insurance shall be
deemed to be an indemnity by Landlord with respect to any claim, liability,
loss, cost or expense due, in whole or in part, to Tenant's negligent acts or
omissions or willful misconduct. Without obligation to do so, Landlord may, in
its sole discretion from time to time, carry insurance in amounts greater and/or
for coverage additional to the coverage and amounts set forth above.
16.04 WAIVER OF SUBROGATION
(a) Landlord agrees that, if obtainable at no, or minimal, additional
cost, and so long as the same is permitted under the laws of the State of
California, it will include in its "All Risks" policies appropriate clauses
pursuant to which the insurance companies (i) waive all right of subrogation
against Tenant with respect to losses payable under such policies and/or (ii)
agree that such policies shall not be invalidated should the insured waive in
writing prior to a loss any or all right of recovery against any party for
losses covered by such policies.
(b) Tenant agrees to include, if obtainable at no, or minimal, additional
cost, and so long as the same is permitted under the laws of the State of
California, in its "All Risks" insurance policy or policies on Tenant Additions
to the Premises, whether or not removable, and on Tenant's furniture,
furnishings, fixtures and other property removable by Tenant under the
provisions of this Lease appropriate clauses pursuant to which the insurance
company or companies (i) waive the right of subrogation against Landlord and/or
any tenant of space in the Building with respect to losses payable under such
policy or policies and/or (ii) agree that such policy or policies shall not be
invalidated should the insured waive in writing prior to a loss any or all right
of recovery against any party for losses covered by such policy or policies. If
Tenant is unable to obtain in such policy or policies either of the clauses
described in the preceding sentence, Tenant shall, if legally possible and
without necessitating a change in insurance carriers, have Landlord named in
such policy or policies as an additional insured. If Landlord shall be named as
an additional insured in accordance with the foregoing, Landlord agrees to
endorse promptly to the order of Tenant, without recourse, any check, draft, or
order for the payment of money representing the proceeds of any such policy or
representing any other payment growing out of or connected with said policies,
and Landlord does hereby irrevocably waive any and all rights in and to such
proceeds and payments.
(c) Provided that Landlord's right of full recovery under its policy or
policies aforesaid is not adversely affected or prejudiced thereby, Landlord
hereby waives any and all right of recovery which it might otherwise have
against Tenant, its servants, agents and employees, for loss or damage occurring
to the Real Property and the fixtures, appurtenances and equipment therein,
except Tenant Additions, to the extent the same is covered by Landlord's
insurance, notwithstanding that such loss or damage may result from the
negligence or fault of Tenant, its servants, agents or employees. Provided that
Tenant's right of full recovery under its aforesaid policy or policies is not
adversely affected or prejudiced thereby, Tenant hereby waives any and all right
of recovery which it might otherwise have against Landlord, its servants, and
employees and against every other tenant in the Real Property who shall have
executed a similar waiver as set forth in this Section 16.04 (c) for loss or
damage to Tenant Additions, whether or not removable, and to Tenant's furniture,
furnishings, fixtures and other property removable by Tenant under the
provisions hereof to the extent the same is covered or coverable by Tenant's
insurance required under this Lease, notwithstanding that such loss or damage
may result from the negligence or fault of Landlord, its servants, agents or
employees, or such other tenant and the servants, agents or employees thereof.
(d) Landlord and Tenant hereby agree to advise the other promptly if the
clauses to be included in their respective insurance policies pursuant to
subparagraphs (a) and (b) above cannot be obtained on the terms hereinbefore
provided and thereafter to furnish the other with a certificate of insurance or
copy of such policies showing the naming of the other as an additional insured,
as aforesaid. Landlord and Tenant hereby also agree to notify the other promptly
of any cancellation or change of the terms of any such policy which would affect
such clauses or naming. All such policies which name both Landlord and Tenant as
additional
25
<PAGE>
insureds shall, to the extent obtainable, contain agreements by the insurers to
the effect that no act or omission of any additional insured will invalidate the
policy as to the other additional insureds.
16.05 NOTICE OF CASUALTY
Tenant shall give Landlord notice in case of a fire or accident in the Premises
promptly after Tenant is aware of such event.
ARTICLE SEVENTEEN
WAIVER OF CLAIMS AND INDEMNITY
17.01 WAIVER OF CLAIMS
To the extent permitted by Law, Tenant releases the Indemnitees from, and waives
all claims for, damage to person or property sustained by the Tenant or any
occupant of the Premises or the Property resulting directly or indirectly from
any existing or future condition, defect, matter or thing in and about the
Premises or the Property or any part of either or any equipment or appurtenance
therein, or resulting from any accident in or about the Premises or the
Property, or resulting directly or indirectly from any act or neglect of any
tenant or occupant of the Property or of any other person, including Landlord's
agents and servants, except to the extent caused by the gross negligence or by
the willful and wrongful act of any of the Indemnitees, but the foregoing
exception is subject to and shall not diminish any waivers by Tenant or Landlord
or their respective insurers in effect in accordance with Section 16.04. To the
extent permitted by Law, Tenant hereby waives any consequential damages,
compensation or claims for inconvenience or loss of business, rents, or profits
as a result of such injury or damage, whether or not caused by the gross
negligence or willful and wrongful act of any of the Indemnitees. If any such
damage, whether to the Premises or the Property or any part of either, or
whether to Landlord or to other tenants in the Property, results from any act or
neglect of Tenant, its employees, servants, agents, contractors, invitees or
customers, Tenant shall be liable therefor and Landlord may, at Landlord's
option, repair such damage and Tenant shall, upon demand by Landlord, as payment
of additional Rent hereunder, reimburse Landlord within thirty (30) days of
demand for the total cost of such repairs, in excess of amounts, if any, paid to
Landlord under insurance covering such damages. Tenant shall not be liable for
any such damage caused by its acts or neglect if Landlord or a tenant has
recovered the full amount of the damage from proceeds of insurance policies and
the insurance company has waived its right of subrogation against Tenant.
17.02 INDEMNITY BY TENANT
To the extent permitted by Law, Tenant hereby indemnifies, and agrees to
protect, defend and hold the Indemnitees harmless, against any and all actions,
claims, demands, liability, costs and expenses, including attorneys' fees and
expenses for the defense thereof, arising from Tenant's occupancy of the
Premises, from the undertaking of any Tenant Additions or repairs to the
Premises, from the conduct of Tenant's business on the Premises, or from any
breach or default on the part of Tenant in the performance of any covenant or
agreement on the part of Tenant to be performed pursuant to the terms of this
Lease, or from any willful act or negligence of Tenant, its agents, contractors,
servants, employees, customers or invitees, in or about the Premises or the
Property or any part of either. In case of any action or proceeding brought
against the Indemnitees by reason of any such claim, upon notice from Landlord,
Tenant covenants to defend such action or proceeding by counsel chosen by
Landlord, in Landlord's sole discretion. Landlord reserves the right to settle,
compromise or dispose of any and all actions, claims and demands related to the
foregoing indemnity. Provided however, the foregoing two sentences shall not
apply, and the following special provisions shall apply provided that Tenant is
Phone.com, and such special provisions are personal to Phone.com and an
Affiliate which is an assignee of the Lease which has satisfied the requirements
of Subsections 10.01(e) and (f) of this Lease, and shall not apply to any
subtenant or any other assignee of this Lease:
(i) In case of any action or proceeding brought against the Indemnitees by
reason of any such claim, upon notice from Landlord, Tenant covenants to
defend such action or proceeding by counsel chosen in accordance with the
procedure set forth in the following sentences of this item (i). Tenant
shall propose to Landlord in writing three choices for counsel to defend
the action or proceeding in question. If any or all of the three are not
acceptable to Landlord, Landlord shall advise Tenant in writing. The
foregoing process shall continue until Tenant and Landlord have agreed
upon mutually acceptable counsel. Notwithstanding any provision of the
preceding three sentences to the contrary, so long as the claim, demand,
suit, proceeding or action and defense thereof, in the aggregate against
all defendants, is fully covered by Tenant's applicable insurance coverage
and fully defended by Tenant's insurer, Landlord will not exercise its
right to disapprove defense counsel. Counsel chosen by Tenant (or Tenant's
insurer) under the applicable procedure above shall provide Landlord and
any separate counsel of Landlord's choice with the full information
regarding the matter and shall cooperate with Landlord and such counsel in
connection with such defense. So long as Tenant is actively defending the
claim, demand, suit or action through counsel chosen in accordance with
either procedure above, if Landlord retains separate counsel, Landlord
will pay the fees and expenses of such separate counsel except those
payable in connection with review of, objection to or response to any
discovery against Landlord and objection to, preparation for and defense
of depositions against Landlord, which shall be payable by Tenant.
26
<PAGE>
(ii) so long as Tenant is actively defending the claim, demand, suit or
action through counsel chosen in accordance with the procedure above, then
Landlord will not settle, compromise or dispose of such claim, demand or
action without Tenant's prior written consent, which shall not be
unreasonably withheld or delayed.
The foregoing indemnity shall not operate to relieve any of the Indemnitees of
liability to the extent its share of liability is caused by its gross negligence
or by its willful and wrongful act. Further, the foregoing indemnity and
exception are subject to and shall not diminish any waivers by Tenant or
Landlord or their respective insurers in effect in accordance with Section
16.04.
ARTICLE EIGHTEEN
RULES AND REGULATIONS
18.01 RULES
To the extent the same do not conflict with the provisions of this Lease, Tenant
agrees for itself and for its subtenants, employees, agents, and invitees to
comply with all rules and regulations for use of the Premises, the Building, the
Phase and the Project imposed by Landlord, as the same may be reasonably revised
from time to time, including the following: (a) Tenant shall comply with all of
the requirements of Landlord's emergency response plan, as the same may be
amended from time to time; and (b) Tenant shall not place any furniture,
furnishings, fixtures or equipment in the Premises in a manner so as to obstruct
the windows of the Premises to cause the Building, in Landlord's good faith
determination, to appear unsightly from the exterior. Such rules and regulations
are and shall be imposed for the cleanliness, good appearance, proper
maintenance, good order and reasonable use of the Premises, the Building, the
Phase and the Project and as may be necessary for the enjoyment of the Building
and the Project by all tenants and their clients, customers, and employees.
18.02 ENFORCEMENT
Nothing in this Lease shall be construed to impose upon the Landlord any duty or
obligation to enforce the rules and regulations as set forth above or as
hereafter adopted, or the terms, covenants or conditions of any other lease as
against any other tenant, and the Landlord shall not be liable to the Tenant for
violation of the same by any other tenant, its servants, employees, agents,
visitors or licensees. Landlord shall use reasonable efforts to enforce the
rules and regulations of the Building in a uniform and non-discriminatory
manner.
ARTICLE NINETEEN
LANDLORD'S RESERVED RIGHTS
Landlord shall have the following rights exercisable without notice to Tenant
and without liability to Tenant for damage or injury to persons, property or
business and without being deemed an eviction or disturbance of Tenant's use or
possession of the Premises or giving rise to any claim for offset or abatement
of Rent: (1) to change the Building's name or street address upon thirty (30)
days' prior written notice to Tenant; (2) to install, affix and maintain all
signs on the exterior and/or interior of the Building; (3) to approve prior to
installation, all types of signs, window shades, blinds, drapes, awnings or
other similar items, and all internal lighting that may be visible from the
exterior of the Premises; (4) upon reasonable notice to Tenant, to display the
Premises to prospective purchasers at reasonable hours at any time during the
Term and to prospective tenants at reasonable hours during the last twelve (12)
months of the Term; (5) to grant to any party the exclusive right to conduct any
business or render any service in or to the Building, provided such exclusive
right shall not operate to prohibit Tenant from using the Premises for the
purpose permitted hereunder; (6) to change the arrangement and/or location of
entrances or passageways, doors and doorways, corridors, elevators, stairs,
washrooms or public portions of the Building, and to close entrances, doors,
corridors, elevators or other facilities, provided that such action shall not
materially and adversely interfere with Tenant's access to the Premises or the
Building; (7) to have access for Landlord and other tenants of the Building to
any mail chutes and boxes located in or on the Premises as required by any
applicable rules of the United States Post Office; and (8) to close the Building
after Standard Operating Hours, except that Tenant and its employees and
invitees shall be entitled to admission at all times, under such regulations as
Landlord prescribes for security purposes.
ARTICLE TWENTY
ESTOPPEL CERTIFICATE
20.01 IN GENERAL
Within fifteen (15) days after request therefor by Landlord, Mortgagee or any
prospective mortgagee or owner, Tenant agrees as directed in such request to
execute an Estoppel Certificate in recordable form, binding upon Tenant,
certifying (i) that this Lease is unmodified and in full force and effect (or if
there have been modifications, a description of such modifications and that this
Lease as modified is in full force and effect); (ii) the dates to which Rent has
been paid; (iii) that Tenant is in the possession of the Premises if that is
the case; (iv) to Tenant's knowledge, that Landlord is not in default under this
lease, or, if Tenant believes Landlord is in default, the nature thereof in
detail; (v) that Tenant has no offsets or defenses to the
27
<PAGE>
performance of its obligations under this Lease (or if Tenant believes there are
any offsets or defenses, a full and complete explanation thereof); (vi) that the
Premises have been completed in accordance with the terms and provisions hereof,
that Tenant has accepted the Premises and the condition thereof and of all
improvements thereto and has no claims against Landlord or any other party with
respect thereto; (vii) that if an assignment of rents or leases has been served
upon the Tenant by a Mortgagee, Tenant will acknowledge receipt thereof and
agree to be bound by the provisions thereof; (viii) that Tenant will give to the
Mortgagee copies of all notices required or permitted to be given by Tenant to
Landlord; and (ix) to any other information reasonably requested.
20.02 ENFORCEMENT
In the event that Tenant fails to deliver an Estoppel Certificate, then such
failure shall be a Default for which there shall be no cure or grace period. In
addition to any other remedy available to Landlord, Landlord may impose a charge
equal to $500.00 for each day that Tenant fails to deliver an Estoppel
Certificate and Tenant shall be deemed to have irrevocably appointed Landlord as
Tenants attorney-in-fact to execute and deliver such Estoppel Certificate.
ARTICLE TWENTY-ONE
RELOCATION OF TENANT
(Intentionally omitted.)
ARTICLE TWENTY-TWO
REAL ESTATE BROKERS
Tenant represents that, except for the broker(s) listed in Section 1.01(19),
Tenant has not dealt with any real estate broker, sales person, or finder in
connection with this Lease, and no such person initiated or participated in the
negotiation of this Lease, or showed the Premises to Tenant. Tenant hereby
agrees to indemnify, protect, defend and hold Landlord and the Indemnitees,
harmless from and against any and all liabilities and claims for commissions and
fees arising out of a breach of the foregoing representation. Landlord agrees
to pay any commission to which Landlord's Broker listed in Section 1.01(19) is
entitled in connection with this Lease pursuant to Landlord's written agreement
with such broker. Landlord and Tenant agree that any commission payable to
Tenant's Broker shall be paid by Tenant except to the extent Tenant's Broker and
Landlord's Broker have entered into a separate agreement between themselves to
share the commission paid to Landlord's Broker by Landlord.
ARTICLE TWENTY-THREE
MORTGAGEE PROTECTION
23.01 SUBORDINATION AND ATTORNMENT
(a) Subject to Section 23.01(b) hereof, this Lease is and shall be
expressly subject and subordinate at all times to (i) any ground or underlying
lease of the Real Property, now or hereafter existing, and all amendments,
extensions, renewals and modifications to any such lease, and (ii) the lien of
any mortgage or trust deed now or hereafter encumbering fee title to the Real
Property and/or the leasehold estate under any such lease, and all amendments,
extensions, renewals, replacements and modifications of such mortgage or trust
deed and/or the obligation secured thereby, unless such ground lease or ground
lessor, or mortgage, trust deed or Mortgagee, expressly provides or elects that
the Lease shall be superior to such lease or mortgage or trust deed. If any such
mortgage or trust deed is foreclosed (including any sale of the Real Property
pursuant to a power of sale), or if any such lease is terminated, upon request
of the Mortgagee or ground lessor, as the case may be, Tenant shall attorn to
the purchaser at the foreclosure sale or to the ground lessor under such lease,
as the case may be, provided, however, that such purchaser or ground lessor
shall not be (i) bound by any payment of Rent for more than one month in advance
except payments in the nature of security for the performance by Tenant of its
obligations under this Lease; (ii) subject to any offset, defense or damages
arising out of a default of any obligations of any preceding Landlord; or (iii)
bound by any amendment or modification of this Lease made without the written
consent of the Mortgagee or ground lessor; or (iv) liable for any security
deposits not actually received in cash by such purchaser or ground lessor. This
subordination shall be self-operative and no further certificate or instrument
of subordination need be required by any such Mortgagee or ground lessor. In
confirmation of such subordination, however, Tenant shall execute promptly any
reasonable certificate or instrument that Landlord, Mortgagee or ground lessor
may request. Tenant hereby constitutes Landlord as Tenant's attorney-in-fact to
execute such certificate or instrument for and on behalf of Tenant upon Tenant's
failure to do so within twenty (20) days of a request to do so. Upon request by
such successor in interest, Tenant shall execute and deliver reasonable
instruments confirming the attornment provided for herein.
(b) Notwithstanding any provision of this Lease to the contrary, provided
that: (i) Tenant pays any fees and costs associated with requesting a
nondisturbance agreement, (ii) executes and delivers a subordination,
nondisturbance and attornment agreement substantially in the form of Exhibit D
hereto, with such changes thereto an any lessor under a ground or underlying
lease or mortgagee or beneficiary may reasonably require ("Nondisturbance
Agreement") and complies with the provisions thereof, and (iii) Tenant is not in
default under this Lease after notice and expiration of any applicable cure
period, no termination of any ground lease or underlying lease and no
foreclosure, sale pursuant to power of sale or conveyance by
28
<PAGE>
deed in lieu of foreclosure shall affect Tenant's rights under this Lease,
except to the extent provided by such Nondisturbance Agreement. If Tenant fails
to execute and deliver any Nondisturbance Agreement within fifteen (15) days of
a request therefor from Landlord, Tenant hereby constitutes Landlord as Tenant's
attorney-in-fact to execute and deliver such instrument. Landlord's inability to
obtain the signature of any such lessor or Mortgagee on any such Nondisturbance
Agreement shall not constitute a default by Landlord under this Lease, but so
long as default by Tenant under this Lease is not the reason for Landlord's
inability to obtain such signature, any such lessor or Mortgagee shall be deemed
to have elected that this Lease be superior to the lease, mortgage or deed of
trust in question, and Tenant shall, at the request of such lessor, mortgagee or
beneficiary (or purchaser at any sale pursuant to the mortgage or deed of
trust), attorn to any such party or enter into a new lease with such party (as
Landlord) for the balance of the Term then remaining hereunder upon the same
terms and conditions as those herein, provided, however, that such party shall
not be (i) bound by any payment of Rent for more than one month in advance
except payments in the nature of security for the performance by Tenant of its
obligations under this Lease; (ii) subject to any offset, defense or damages
arising out of a default of any obligations of any preceding Landlord, provided
however, that such party shall be obligated to cure any default that is
continuing as of the date such party acquires title to the Premises within a
reasonable period after the date Tenant delivers written notice of such default
to such party; or (iii) bound by any amendment or modification of this Lease
made without the written consent of the Mortgagee or ground lessor; or (iv)
liable for any security deposits not actually received in cash by such purchaser
or ground lessor. Upon request by such successor in interest, Tenant shall
execute and deliver reasonable instruments confirming the attornment provided
for herein.
23.02 MORTGAGEE PROTECTION
Tenant agrees to give any Mortgagee or ground lessor, by registered or certified
mail, a copy of any notice of default served upon the Landlord by Tenant,
provided that prior to such notice Tenant has received notice (by way of service
on Tenant of a copy of an assignment of rents and leases, or otherwise) of the
address of such Mortgagee or ground lessor. Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the Mortgagee or ground lessor shall have an additional thirty
(30) days after receipt of notice thereof within which to cure such default or
if such default cannot be cured within that time, then such additional notice
time as may be necessary, if, within such thirty (30) days, any Mortgagee or
ground lessor has commenced and is diligently pursuing the remedies necessary to
cure such default (including commencement of foreclosure proceedings or other
proceedings to acquire possession of the Real Property, if necessary to effect
such cure). Such period of time shall be extended by any period within which
such Mortgagee or ground lessor is prevented from commencing or pursuing such
foreclosure proceedings or other proceedings to acquire possession of the Real
Property by reason of Landlord's bankruptcy. Until the time allowed as aforesaid
for Mortgagee or ground lessor to cure such defaults has expired without cure,
Tenant shall have no right to, and shall not, terminate this Lease on account of
default. This Lease may not be modified or amended so as to reduce the Rent or
shorten the Term, or so as to adversely affect in any other respect to any
material extent the rights of the Landlord, nor shall this Lease be canceled or
surrendered, without the prior written consent, in each instance, of the ground
lessor or the Mortgagee.
ARTICLE TWENTY-FOUR
NOTICES
(a) All notices, demands or requests provided for or permitted to be given
pursuant to this Lease must be in writing and shall be personally delivered,
sent by Federal Express or other reputable overnight courier service, or mailed
by first class, registered or certified United States mail, return receipt
requested, postage prepaid.
(b) All notices, demands or requests to be sent pursuant to this Lease
shall be deemed to have been properly given or served by delivering or sending
the same in accordance with this Section, addressed to the parties hereto at
their respective addresses listed in Sections 1.01 (2) and (3).
(c) Notices, demands or requests sent by mail or overnight courier service
as described above shall be effective upon deposit in the mail or with such
courier service. However, the time period in which a response to any such
notice, demand or request must be given shall commence to run from (i) in the
case of delivery by mail, the date of receipt on the return receipt of the
notice, demand or request by the addressee thereof, or (ii) in the case of
delivery by Federal Express or other overnight courier service, the date of
acceptance of delivery by an employee, officer, director or partner of Landlord
or Tenant. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given, as indicated by advice
from Federal Express or other overnight courier service or by mail return
receipt, shall be deemed to be receipt of notice, demand or request sent.
Notices may also be served by personal service upon any officer, director or
partner of Landlord or Tenant, and shall be effective upon such service.
(d) By giving to the other party at least thirty (30) days written notice
thereof, either party shall have the right form time to time during the time
during the term or this Lease to change their respective addresses for notices,
statements, demands and requests, provided such new address shall be within the
United States of America.
29
<PAGE>
ARTICLE TWENTY.1FIVE
EXERCISE FACILITY
Tenant agrees to inform all employees of Tenant of the following: (i) the
exercise facility is available for the use of the employees of tenants of the
Project only and for no other person; (ii) use of the facility is at the risk of
Tenant or Tenant's employees, and all users must sign a release; (iii) the
facility is unsupervised; and (iv) users of the facility must report any needed
equipment maintenance or any unsafe conditions to the Landlord immediately.
Landlord may discontinue providing such facility at Landlord's sole option at
any time without incurring any liability. As a condition to the use of the
exercise facility, Tenant and each of Tenant's employees that uses the exercise
facility shall first sign a written release in form and substance acceptable to
Landlord. Landlord may change the rules and/or hours of the exercise facility at
any time, and Landlord reserves the right to deny access to the exercise
facility to anyone due to misuse of the facility or noncompliance with rules and
regulations of the facility.
ARTICLE TWENTY-SIX
MISCELLANEOUS
26.01 LATE CHARGES
(a) All payments required hereunder (other than the Monthly Base Rent,
Rent Adjustments, and Rent Adjustment Deposits, which shall be due as
hereinbefore provided, and the late charge described in Subsection (b) below,
which shall be due when provided without notice or demand) to Landlord shall be
paid within ten (10) days after Landlord's demand therefor. All such amounts
(including Monthly Base Rent, Rent Adjustments, and Rent Adjustment Deposits,
but excluding the late charge) not paid when due shall bear interest from the
date due until the date paid at the Default Rate in effect on the date such
payment was due.
(b) In the event Tenant is more than five (5) days late in paying any
installment of Rent due under this Lease, Tenant shall pay Landlord a late
charge equal to five percent (5%) of the delinquent installment of Rent.
Notwithstanding the foregoing, with respect only to the first occasion of late
payment within the first year after the date of this Lease, the late charge
shall not be payable unless the payment in question is not received within five
(5) days after written notice from Landlord. The parties agree that (i) such
delinquency will cause Landlord to incur costs and expenses not contemplated
herein, the exact amount of which will be difficult to calculate, including the
cost and expense that will be incurred by Landlord in processing each delinquent
payment of rent by Tenant, and (ii) the amount of such late charge represents a
reasonable estimate of such costs and expenses and that such late charge shall
be paid to Landlord for each delinquent payment in addition to all Rent
otherwise due hereunder. The parties further agree that the payment of late
charges and the payment of interest provided for in subparagraph (a) above are
distinct and separate from one another in that the payment of interest is to
compensate Landlord for its inability to use the money improperly withheld by
Tenant, while the payment of late charges is to compensate Landlord for its
additional administrative expenses in handling and processing delinquent
payments.
(c) Payment of interest at the Default Rate and/or of late charges shall
not excuse or cure any default by Tenant under this Lease, nor shall the
foregoing provisions of this Article or any such payments prevent Landlord from
exercising any right or remedy available to Landlord upon Tenant's failure to
pay Rent when due, including the right to terminate this Lease.
26.02 NO JURY TRIAL; VENUE; JURISDICTION
Each party hereto (which includes any assignee, successor, heir or personal
representative of a party) shall not seek a jury trial, hereby waives trial by
jury, and hereby further waives any objection to venue in the County in which
the Project is located, and agrees and consents to personal jurisdiction of the
courts of the State of California, in any action or proceeding or counterclaim
brought by any party hereto against the other on any matter whatsoever arising
out of or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Premises, or any claim of injury or
damage, or the enforcement of any remedy under any statute, emergency or
otherwise, whether any of the foregoing is based on this Lease or on tort law.
No party will seek to consolidate any such action in which a jury has been
waived with any other action in which a jury trial cannot or has not been
waived. It is the intention of the parties that these provisions shall be
subject to no exceptions. By execution of this Lease the parties agree that this
provision may be filed by any party hereto with the clerk or judge before whom
any action is instituted, which filing shall constitute the written consent to a
waiver of jury trial pursuant to and in accordance with Section 631 of the
California Code of Civil Procedure. No party has in any way agreed with or
represented to any other Party that the provisions of this Section will not be
fully enforced in all instances. The provisions of this Section shall survive
the expiration or earlier termination of this Lease.
26.03 DEFAULT UNDER OTHER LEASE
It shall be a Default under this Lease if Tenant holding any other lease with
Landlord for premises in the Project defaults under such lease and as a result
thereof such lease is terminated or terminable.
30
<PAGE>
26.04 OPTION
This Lease shall not become effective as a lease or otherwise until executed and
delivered by both Landlord and Tenant. The submission of the Lease to Tenant
does not constitute a reservation of or option for the Premises, but when
executed by Tenant and delivered to Landlord, the Lease shall constitute an
irrevocable offer by Tenant in effect for fifteen (15) days to lease the
Premises on the terms and conditions herein contained.
26.05 TENANT AUTHORITY
Tenant represents and warrants to Landlord that it has full authority and power
to enter into and perform its obligations under this Lease, that the person
executing this Lease is fully empowered to do so, and that no consent or
authorization is necessary from any third party. Landlord may request that
Tenant provide Landlord evidence of Tenant's authority.
26.06 ENTIRE AGREEMENT
This Lease, the Exhibits and Riders attached hereto contain the entire agreement
between Landlord and Tenant concerning the Premises and there are no other
agreements, either oral or written, and no other representations or statements,
either oral or written, on which Tenant has relied. This Lease shall not be
modified except by a writing executed by Landlord and Tenant.
26.07 MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE
If Mortgagee of Landlord requires a modification of this Lease which shall not
result in any increased cost or expense to Tenant or in any other substantial
and adverse change in the rights and obligations of Tenant hereunder, then
Tenant agrees that the Lease may be so modified.
26.08 EXCULPATION
Tenant agrees, on its behalf and on behalf of its successors and assigns, that
any liability or obligation of Landlord in connection with this Lease shall only
be enforced against Landlord's equity interest in the Property up to a maximum
of Five Million Dollars ($5,000,000.00) and in no event against any other assets
of the Landlord, or Landlord's officers or directors or partners, and that any
liability of Landlord with respect to this Lease shall be so limited and Tenant
shall not be entitled to any judgment in excess of such amount.
26.09 ACCORD AND SATISFACTION
No payment by Tenant or receipt by Landlord of a lesser amount than any
installment or payment of Rent due shall be deemed to be other than on account
of the amount due, and no endorsement or statement on any check or any letter
accompanying any check or payment of Rent shall be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or payment of Rent
or pursue any other remedies available to Landlord. No receipt of money by
Landlord from Tenant after the termination of this Lease or Tenant's right of
possession of the Premises shall reinstate, continue or extend the Term. Receipt
or acceptance of payment from anyone other than Tenant, including an assignee of
Tenant, is not a waiver of any breach of Article Ten, and Landlord may accept
such payment on account of the amount due without prejudice to Landlord's right
to pursue any remedies available to Landlord.
26.10 LANDLORD'S OBLIGATIONS ON SALE OF BUILDING
In the event of any sale or other transfer of the Building, Landlord shall be
entirely freed and relieved of all agreements and obligations of Landlord
hereunder accruing or to be performed after the date of such sale or transfer,
and any remaining liability of Landlord with respect to this Lease shall be
limited to Five Million Dollars ($5,000,000.00) and Tenant shall not be entitled
to any judgment in excess of such amount.
26.11 BINDING EFFECT
Subject to the provisions of Article Ten, this Lease shall be binding upon and
inure to the benefit of Landlord and Tenant and their respective heirs, legal
representatives, successors and permitted assigns.
26.12 CAPTIONS
The Article and Section captions in this Lease are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the scope or
intent of such Articles and Sections.
26.13 TIME; APPLICABLE LAW; CONSTRUCTION
Time is of the essence of this Lease and each and all of its provisions. This
Lease shall be constructed in accordance with the Laws of the State of
California. If more than one person signs this Lease as Tenant, the obligations
hereunder imposed shall be joint and several. If any term, convenant or
condition of this Lease or the application thereof to any person or circumstance
shall, to any extent, be invalid or unenforceable, the
31
<PAGE>
remainder of this Lease, or the application of such term, covenant or condition
to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each item, covenant or
condition of this Lease shall be valid and be enforced to the fullest extent
permitted by Law. Wherever the term "including" or "includes" is used in this
Lease, it shall have the same meaning as if followed by the phrase "but not
limited to". The language in all parts of this Lease shall be construed
according to its normal and usual meaning and not strictly for or against either
Landlord or Tenant.
26.14 ABANDONMENT
In the event Tenant vacates or abandons the Premises but is otherwise in
compliance with all the terms, covenants and conditions of this Lease, Landlord
shall (i) have the right to enter into the Premises in order to show the space
to prospective tenants, (ii) have the right to reduce the services provided to
Tenant pursuant to the terms of this Lease to such levels as Landlord reasonably
determines to be adequate services for an unoccupied premises and (iii) during
the last six (6) months of the Term, have the right to prepare the Premises for
occupancy by another tenant upon the end of the Term. Tenant expressly
acknowledges that in the absence of written notice pursuant to Section 11.02(b)
or pursuant to California Civil Code Section 1951.3 terminating Tenant's right
to possession, none of the foregoing acts of Landlord or any other act of
Landlord shall constitute a termination of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises, and the Lease shall continue
in effect.
26.15 LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES
If Tenant fails timely to perform any of its duties under this Lease, Landlord
shall have the right (but not the obligation), to perform such duty on behalf
and at the expense of Tenant upon reasonable prior notice to Tenant, except in
the event of an emergency, and all sums expended or expenses incurred by
Landlord in performing such duty shall be deemed to be additional Rent under
this Lease and shall be due and payable upon demand by Landlord.
26.16 SECURITY SYSTEM
Landlord shall not be obligated to provide or maintain any security patrol or
security system. Landlord shall not be responsible for the quality of any such
patrol or system which may be provided hereunder or for damage or injury to
Tenant, its employees, invitees or others due to the failure, action or inaction
of such patrol or system.
26.17 NO LIGHT, AIR OR VIEW EASEMENTS
Any diminution or shutting off of light, air or view by any structure which may
be erected on lands of or adjacent to the Project shall in no way affect this
Lease or impose any liability on Landlord.
26.18 RECORDATION
Neither this Lease, nor any notice nor memorandum regarding the terms hereof,
shall be recorded by Tenant. Any such unauthorized recording shall be a Default
for which there shall be no cure or grace period. Tenant agrees to execute and
acknowledge, at the request of Landlord, a memorandum of this Lease, in
recordable form.
26.19 SURVIVAL
The waivers of the right of jury trial, the other waivers of claims or rights,
the releases and the obligations of Tenant under this Lease to indemnify,
protect, defend and hold harmless Landlord and/or Indemnitees shall survive the
expiration or termination of this Lease, and so shall all other obligations or
agreements of Landlord or Tenant which by their terms survive expiration or
termination of the Lease.
32
<PAGE>
26.20 RIDERS
All Riders attached hereto and executed both by Landlord and Tenant shall be
deemed to be a part hereof and hereby incorporated herein.
IN WITNESS WHEREOF, this Lease has been executed as of the date set forth in
Section 1.01(4) hereof.
TENANT: LANDLORD:
------- --------
Phone.com, Inc., Metropolitan Life Insurance Company,
a Delaware corporation a New York corporation
By /s/ Alan Black By illegible
------------------------------- ----------------------------------------
ALAN BLACK illegible
------------------------------- ----------------------------------------
Print name Print name
Its CFO Its Vice-President
------------------------------ ---------------------------------------
(Chairman of Board, President
or Vice President)
By /s/ Linda Speer
-------------------------------
LINDA SPEER
-------------------------------
Print name
Its VICE PRESIDENT OF FINANCE
------------------------------
(Secretary, Assistant
Secretary, CFO or Assistant
Treasurer)
33
<PAGE>
EXHIBIT A
PLAN OF PREMISES
Exhibit A - Page 1
<PAGE>
[FLOOR PLAN OF PREMISES (BUILDING 1-101 SAGINAW) APPEARS HERE]
<PAGE>
[FLOOR PLAN OF PREMISES (BUILDING 12-595 PENOBSCOT) APPEARS HERE]
<PAGE>
EXHIBIT B
WORKLETTER AGREEMENT
(intentionally ornitted)
Exhibit B - Page 1
<PAGE>
EXHIBIT C
SITE PLAN OF PROJECT
[MAP]
------------------------------
Legend: Phase I: Buildings 1-8
* two-story building Phase II: Buildings 9-12, 27
(D) dock door Phase III: Buildings 14-26 Not Part of "Project"
------------------------------
Exhibit C - Page 1
<PAGE>
EXHIBIT D
FORM OF SUBORDINATION, NONDISTURBANCE & ATTORNMENT AGREEMENT
------------------------------
RECORDING REQUESTED
BY AND WHEN
RECORDED RETURN TO:
, Esq.
-------------------
-------------------
-------------------
-------------------
------------------------------
SUBORDINATION,
NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE IN THE PROPERTY
BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF
SOME OTHER OR LATER SECURITY INSTRUMENT.
DEFINED TERMS
================================================================================
Execution Date:
--------------------------------------------------------------------------------
Beneficiary & Address:
Attn.:
with a copy to:
--------------------------------------------------------------------------------
Tenant & Address:
--------------------------------------------------------------------------------
Landlord & Address:
--------------------------------------------------------------------------------
Loan: A first mortgage loan in the original principal amount of $
from Beneficiary to Landlord.
--------------------------------------------------------------------------------
Note: A Promissory Note executed by Landlord in favor of Beneficiary in the
amount of the Loan dated as of
--------------------------------------------------------------------------------
Deed of Trust: A Deed of Trust, Security Agreement and Fixture Filing dated as
of executed by Landlord, to as Trustee, for the
benefit of Beneficiary securing repayment of the Note to be recorded in the
records of the County in which the Property is located.
--------------------------------------------------------------------------------
Lease and Lease Date: The lease entered into by Landlord and Tenant dated as
of covering the Premises.
[Add amendments]
--------------------------------------------------------------------------------
Property: [Property Name]
[Street Address 1]
[City, State, Zip]
The Property is more particularly described on Exhibit A.
---------
================================================================================
Exhibit D - Page 1
<PAGE>
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (the
"Agreement') is made by and among Tenant, Landlord, and Beneficiary and affects
the Property described in Exhibit A. Certain terms used in this Agreement are
---------
defined in the Defined Terms. This Agreement is entered into as of the Execution
Date with reference to the following facts:
A. Landlord and Tenant have entered into the Lease covering certain
space in the improvements located in and upon the Property (the "Premises").
B. Beneficiary has made or is making the Loan to Landlord evidenced by
the Note. The Note is secured, among other documents, by the Deed of Trust.
C. Landlord, Tenant and Beneficiary all wish to subordinate the Lease
to the lien of the Deed of Trust.
D. Tenant has requested that Beneficiary agree not to disturb Tenant's
rights in the Premises pursuant to the Lease in the event Beneficiary forecloses
the Deed of Trust, or Beneficiary or a third party acquires the Property
pursuant to the trustee's power of sale contained in the Deed of Trust or
receives a transfer of the Property by a conveyance in lieu of foreclosure of
the Property (collectively, a "Foreclosure Sale") but only if Tenant is not then
in default after notice and expiration of any applicable cure period under the
Lease and Tenant attorns to Beneficiary or a third party purchaser at the
Foreclosure Sale (a "Foreclosure Purchaser").
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows:
1. Subordination. The Lease and the leasehold estate created by
-------------
the Lease and all of Tenant's rights under the Lease are and shall remain
subordinate to the Deed of Trust and the lien of the Deed of Trust, to all
rights of Beneficiary under the Deed of Trust and to all renewals, amendments,
modifications and extensions of the Deed of Trust.
2. Acknowledgments by Tenant. Tenant agrees that (a) Tenant has
-------------------------
notice that the Lease and the rent and all other sums due under the Lease have
been or are to be assigned to Beneficiary as security for the Loan. In the event
that Beneficiary notifies Tenant of a default under the Deed of Trust and
requests Tenant to pay its rent and all other sums due under the Lease to
Beneficiary, Tenant shall pay such sums directly to Beneficiary or as
Beneficiary may otherwise request and Tenant shall be entitled to full credit
under the Lease for any rent and other sums paid to Beneficiary. (b) Tenant
shall send a copy of any notice of default under the Lease to Beneficiary at the
same time Tenant sends such notice to Landlord. (c) This Agreement satisfies any
condition or requirement in the Lease relating to the granting of a
nondisturbance agreement.
3. Foreclosure and Sale. In the event of a Foreclosure Sale,
--------------------
(a) So long as Tenant complies with this Agreement and is not in
default under any of the provisions of the Lease after notice and
expiration of any applicable cure period, the Lease shall continue in full
force and effect as a direct lease between Beneficiary and Tenant, and
Beneficiary will not disturb the possession of Tenant, subject to this
Agreement. Tenant agrees to attorn to and accept Beneficiary as landlord
under the Lease and to be bound by and perform all of the obligations
imposed by the Lease. Upon Beneficiary's acquisition of title to the
Property, Beneficiary will perform all of the obligations imposed on the
Landlord by the Lease except as set forth in this Agreement; provided,
however that Beneficiary shall not be: (i) liable for any act or omission
of a prior landlord (including Landlord), provided however, that
Beneficiary shall be obligated to cure any default that is continuing as of
the date Beneficiary acquires title to the Premises within a reasonable
period after the date Tenant delivers written notice of such default to
Beneficiary; or (ii) subject to any offsets or defenses that Tenant might
have against any prior landlord (including Landlord); or (iii) bound by any
rent or additional rent which Tenant might have paid in advance to any
prior landlord (including Landlord) for a period in excess of one month or
by any security deposit, cleaning deposit or other sum that Tenant may have
paid in advance to any prior landlord (including Landlord) unless received
by Beneficiary; or (iv) bound by any amendment, modification, assignment or
termination of the Lease made without the written consent of Beneficiary;
(v) obligated or liable with respect to any representations, warranties or
indemnities contained in the Lease; or (vi) liable to Tenant or any other
party for any conflict between the provisions of the Lease and the
provisions of any other lease affecting the Property which is not entered
into by Beneficiary.
(b) Upon the written request of Beneficiary after a Foreclosure
Sale, the parties shall execute a lease of the Premises upon the same
provisions as contained in the Lease between Landlord and Tenant, except as
set forth in this Agreement, for the unexpired term of the Lease.
4. Subordination and Release of Purchase Options. Tenant represents
---------------------------------------------
that it has no right or option of any nature to purchase the Property or any
portion of the Property or any interest in the Borrower. To the extent Tenant
has or acquires any such right or option, these rights or options are
Exhibit D - Page 2
<PAGE>
acknowledged to be subject and subordinate to the Mortgage and are waived and
released as to Beneficiary and any Foreclosure Purchaser.
5. Acknowledgment by Landlord. In the event of a default under the Deed
--------------------------
of Trust, at the election of Beneficiary, Tenant shall and is directed to pay
all rent and all other sums due under the Lease to Beneficiary, and Tenant shall
be entitled to full credit under the Lease for any rent and other sums paid to
Beneficiary.
6. Construction of Improvements. Beneficiary shall not have any
----------------------------
obligation or incur any liability with respect to the completion of the
improvements in which the Premises are located at the commencement of the term
of the Lease, provided that Beneficiary shall be obligated to pay any unpaid
Landlord's Maximum Contribution, if any, then owing to Tenant.
7. Notice. All notices under this Agreement shall be deemed to have been
------
properly given if delivered by overnight courier service or mailed by United
States certified mail, with return receipt requested, postage prepaid to the
party receiving the notice at its address set forth in the Defined Terms (or
at such other address as shall be given in writing by such party to the other
parties) and shall be deemed complete upon receipt or refusal of delivery.
8. Miscellaneous. Beneficiary shall not be subject to any provision of
-------------
the Lease that is inconsistent with this Agreement. Nothing contained in this
Agreement shall be construed to derogate from or in any way impair or affect the
lien or the provisions of the Deed of Trust. This Agreement shall be governed by
and construed in accordance with the laws of the State of in which the Property
is located.
9. Liability and Successors and Assigns. In the event that Beneficiary
------------------------------------
acquires title to the Premises or the Property, Beneficiary shall have no
obligation nor incur any liability beyond Beneficiary's then equity interest in
the Property but in no event in excess of Five Million Dollars ($5,000,000), and
Tenant shall look solely to such equity interest for the payment and performance
of any obligations imposed upon Beneficiary under this Agreement or under the
Lease. This Agreement shall run with the land and shall inure to the benefit of
the parties and, their respective successors and permitted assigns including a
Foreclosure Purchaser. If a Foreclosure Purchaser acquires the Property or if
Beneficiary assigns or transfers its interest in the Note and Deed of Trust or
the Property, all obligations and liabilities of Beneficiary under this
Agreement shall terminate and be the responsibility of the Foreclosure Purchaser
or other party to whom Beneficiary's interest is assigned or transferred. The
interest of Tenant under this Agreement may not be assigned or transferred
except in connection with an assignment of its interest in the Lease which has
been consented to by Beneficiary, except an assignment which the Lease permits
without the prior written consent of Landlord.
IN WITNESS WHEREOF, the parties have executed this Subordination,
Nondisturbance and Attornment Agreement as of the Execution Date.
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT CONTAINS
PROVISIONS WHICH ALLOW THE PERSON OBLIGATED ON THE LEASE TO OBTAIN A
LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN
IMPROVEMENT OF THE PROPERTY.
IT IS RECOMMENDED THAT THE PARTIES CONSULT WITH THEIR ATTORNEYS PRIOR TO THE
EXECUTION OF THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT.
BENEFICIARY:
---------------------------------,
a
--------------------------------
By
-------------------------------
Its
-------------------------------
TENANT:
---------------------------------,
a
--------------------------------
By
-------------------------------
Its
-------------------------------
LANDLORD:
---------------------------------,
a
--------------------------------
By
-------------------------------
Its
-------------------------------
Exhibit D - Page 3
<PAGE>
EXHIBIT A OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
PROPERTY DESCRIPTION
Exhibit D - Page 4
<PAGE>
State of
------------
County of
------------
On , 2000 before me, , personally appeared
------------- -------------------
, personally known to me (or proved to me on the basis of
-------------------
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
------------------------------
**********************************
State of
-----------
County of
-----------
On , 2000 before me, , personally appeared
------------- -------------------
, personally known to me (or proved to me on the basis of
-------------------
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
------------------------------
************************************
State of
-----------
County of
-----------
On , 2000 before me, , personally appeared
------------- -------------------
, personally known to me (or proved to me on the basis of
-------------------
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
------------------------------
Exhibit D - Page 5
<PAGE>
EXHIBIT E
---------
ANTENNA; ROOF SPACE; CABLE PATH
"Antenna" or "Antennas" means only one (1), or two (2) if Tenant exercises its
option for a second, receive-only micro dish style satellite antenna(s) and
mounting structure, and the design, size and features of each are subject to
approval in writing by Landlord prior to installation of the respective Antenna.
Tenant may not have more than one (1) Antenna on each Building respectively
housing the Penobscot Space and the Saginaw Space.
"Roof Space" means the space and dimensions thereof to be designated and
approved in writing by Landlord prior to installation.
The "Cable Path" route shall be located in the particular location and manner
approved in writing by Landlord prior to installation.
Exhibit E - Page 1
<PAGE>
RIDER 1
COMMENCEMENT DATE AGREEMENT
Metropolitan Life Insurance Company, a New York corporation ("Landlord"), and
Phone.com, Inc., a Delaware corporation ("Tenant"), have entered into a certain
Lease dated as of January 21, 2000 (the "Lease").
--
WHEREAS, Landlord and Tenant wish to confirm and memorialize the Commencement
Date and Expiration Date of the Lease as provided for in Section 2.02(b) of the
Lease;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and in the Lease, Landlord and Tenant agree as follows:
1. Unless otherwise defined herein, all capitalized terms shall have the
same meaning ascribed to them in the Lease.
2. The Commencement Date of the Lease is as follows:
as to the Penobscot Space; and
------------
as to the Saginaw Space.
------------
3. The Expiration Date of the Lease is .
-------------
4. Tenant hereby confirms the following:
(a) That it has accepted possession of the premises pursuant to the
terms of the Lease;
(b) That the Landlord Work, if any, is Substantially Complete; and
(c) That the Lease is in full force and effect.
5. Except as expressly modified hereby, all terms and provisions of the
Lease are hereby ratified and confirmed and shall remain in full force and
effect and binding on the parties hereto.
6. The Lease and this Commencement Date Agreement contain all of the terms,
covenants, conditions and agreements between the Landlord and the Tenant
relating to the subject matter herein. No prior other agreements or
understandings pertaining to such matters are valid or of any force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Commencement Date
Agreement and such execution and delivery have been duly authorized.
TENANT LANDLORD
------ --------
Phone.com, Inc., Metropolitan Life Insurance Company,
a Delaware corporation a New York corporation
By By
--------------------------- --------------------------
--------------------------- --------------------------
Print name Print name
Its Its
-------------------------- -------------------------
(Chairman of Board, President
or Vice President)
By
---------------------------
---------------------------
Print name
Its
--------------------------
(Secretary, Assistant Secretary,
CFO or Assistant Treasurer)
Rider 1 - Page 1 of 1
<PAGE>
RIDER 2
ADDITIONAL PROVISIONS
This Rider 2 ("Rider") is attached to and a part of a certain Lease dated as
of January 21, 2000, executed concurrently herewith by Metropolitan Life
--
Insurance Company, a New York corporation, as Landlord, and Phone.com, Inc. a
Delaware corporation (for purposes of this Rider, "Phone.com"), as Tenant, for
the Premises as described therein (the "Lease").
SECTION 1. DEFINED TERMS; FORCE AND EFFECT
Capitalized terms used in this Rider shall have the same meanings set forth in
the Lease except as otherwise specified herein and except for terms capitalized
in the ordinary course of punctuation. This Rider forms a part of the Lease.
Without limiting the generality of the foregoing, any default by any party
hereunder shall have the same force and effect as a default under the Lease.
Should any inconsistency arise between this Rider and any other provision of the
Lease as to the specific matters which are the subject of this Rider, the terms
and conditions of this Rider shall control.
SECTION 2. (intentionally omitted)
SECTION 3. PREMISES LEASED "AS-IS"; DELIVERY; COMMENCEMENT DATE; AND
CONSTRUCTION
3.1. AS-IS; Delivery; Commencement Date. Notwithstanding any provision of
----------------------------------
the Lease to the contrary:
(a) AS-IS. Except to the extent of Landlord's Maximum Contribution
-----
described below, Landlord shall deliver the Premises to Tenant in its AS IS
condition, without any express or implied representations or warranties of any
kind by Landlord, its brokers, manager or agents, or the employees of any of
them regarding the Premises; and Landlord shall not have any obligation to
construct or install any tenant improvements or alterations or to pay for any
such construction or installation.
(b) Delivery & Commencement Date. Landlord may deliver the Premises in
----------------------------
separate components of the Saginaw Space and the Penobscot Space, and certain
different conditions, terms and provisions apply respectively to the Saginaw
Space and the Penobscot Space, as more particularly provided in this Rider 2 and
elsewhere in this Lease.
(1) With respect to each of the Saginaw Space and the Penobscot
Space, the date Landlord delivers to Tenant each respective space is referred to
herein as the "Delivery Date" of the respective space. Possession of such space
will be adequately tendered to Tenant by Landlord either delivering the keys (or
other means of access) to Tenant or Tenant's Broker, or by Landlord giving
written notice that the keys (or other means of access) to the Premises are
available for Tenant or its representative to pick up at the office of Landlord
or of the Property Manager of the Building.
(2) Landlord shall tender to Tenant possession of the Saginaw
Space within two (2) business days after the date Landlord executes this Lease.
(3) Tenant acknowledges that (i) the Penobscot Space is under a
pre-existing lease to Rotary Rocket Company ("Rotary"); (ii) that Landlord will
make good faith efforts, at no out-of-pocket cost to Landlord, to enter into and
obtain a legally binding written agreement with Rotary modifying Rotary's pre-
existing lease of the Penobscot Space to provide for Rotary's surrender of
possession of the Penobscot Space and termination of Rotary's rights to the
Penobscot Space, satisfactory in all respects in form and substance to Landlord,
in Landlord's sole discretion (the "Rotary Termination Agreement"), but Landlord
shall not be obligated and have no liability hereunder if it does not obtain the
Rotary Termination Agreement or otherwise recover possession of the Penobscot
Space in form and substance satisfactory to Landlord, in Landlord's sole
discretion. Landlord shall tender to Tenant possession (as described above) of
the Penobscot Space within a reasonable time after the date Landlord recovers
possession of such space.
(4) Tenant's possession of the Saginaw Space and/or the Penobscot
Space, as applicable, from the Delivery Date to the Commencement Date may be
referred to as the Interim Term for each respective space, and is to provide
some time for purposes of design and construction of Tenant Work, fixturing and
moving as to the respective space. Upon tender to Tenant of possession of such
space, such space shall become subject to all of the terms, covenants and
conditions of this Lease, including for example, insurance, indemnity and
amounts payable under this Lease, except that Monthly Base Rent, Rent Adjustment
Deposits and Rent Adjustments shall not be payable by Tenant and the initial
Term shall not commence until the separate Commencement Date for each of the
Penobscot Space and the Saginaw Space. The Commencement Date shall be determined
separately for each of the Penobscot Space and the Saginaw Space, as follows:
thirty (30) days after the Delivery Date of the Penobscot Space and forty-five
(45) days after the Delivery Date of the Saginaw Space.
(c) Delay in Delivery. If Landlord does not obtain and tender
-----------------
possession of the Saginaw Space and the Penobscot Space, as applicable, on or
before the dates set forth above for each by reason of the following: (i) the
holding over or retention of possession of any tenant, tenants or occupants, or
Rider 2 - Page 1 of 9
<PAGE>
(ii) for any other reason, then Landlord shall not be subject to any liability
for the failure to give possession on said date. Under such circumstances the
Commencement Date as to each of the Penobscot Space and the Saginaw Space shall
be determined as provided in Section 3.1(b) of this Rider. No such failure to
give possession shall affect the validity of this Lease or the obligations of
the Tenant hereunder, provided however, if the Delivery Date of the Penobscot
Space has not occurred on or before one hundred and twenty (120) days after the
date Landlord executes this Lease, then the Penobscot Space shall not become
part of the Premises, Tenant shall have no further obligation to lease the
Penobscot Space, Landlord shall have no obligation to deliver or lease the
Penobscot Space to Tenant, and this Lease shall continue in full force and
effect with only the Saginaw Space as the Premises, the Expiration Date shall be
the date which is 5 years after the Commencement Date of the Saginaw Space, and
within one hundred and fifty (150) days after the date Landlord executes this
Lease: (x) Landlord shall refund the initial monthly installment of Monthly Base
Rent in the amount of Forty-six Thousand Two Hundred and Eighty Dollars
($46,280.00) paid by Tenant for the Penobscot Space, and (y) the Security
Deposit shall be reduced from the amount of Eight Hundred and Forty-nine
Thousand Eight Hundred and Ninety-six Dollars and Thirty-six Cents ($849,896.36)
to a new total of Five Hundred and Twenty-five Thousand and Fifty Dollars and
Six Cents ($525,050.06), and Landlord shall refund to Tenant Three Hundred and
Twenty-four Thousand, Eight Hundred and Forty-six Dollars and Thirty Cents
($324,846.30) of the funds previously held by Landlord as part of the Security
Deposit. Within thirty (30) days following the later to occur of the
Commencement Date for the Saginaw Space and the Commencement Date for the
Penobscot Space, respectively, Landlord and Tenant shall enter into an agreement
(which is attached to this Lease as Rider 1) confirming the Commencement Date
-------
for each space, as applicable, and the Expiration Date. If Tenant fails to enter
into such agreement, then the Commencement Date for each respective space shall
be the date designated by Landlord in such agreement
3.2 Landlord Work. Notwithstanding any provision of the Lease to the
-------------
contrary, there is no Landlord Work required under this Lease.
3.3. Tenant Work Generally. Landlord and Tenant acknowledge and agree that
---------------------
notwithstanding any provisions of the Lease to the contrary: (a) Tenant shall be
responsible for all design, demolition, repair, remodeling, improvement or
alteration in connection with its initial occupancy, which for purposes of this
Lease is referred to as the Tenant Work; (b) all Tenant Work, if any, shall be
done as Tenant Alterations within the meaning of Article Nine of the Lease,
subject to and in compliance with all conditions and provisions of the Lease
applicable to Tenant Alterations, except as otherwise expressly provided in this
Rider; (c) Tenant's selection of Tenant's space planner and/or architect and
Tenant's selection of contractor(s) shall be subject to Landlord's prior written
approval, which shall not unreasonably be withheld, except that Landlord may in
its sole discretion specify or approve the engineers and contractors to perform
work relating to the Building's systems; (d) the plans and specifications for
all Tenant Work shall be subject to Landlord's review and prior written
approval, which shall not unreasonably be withheld, and in the event of
disapproval, Landlord shall specify the reasonable grounds therefor; and
Landlord will give Tenant notice of such approval or disapproval no later than
ten (10) business days after receipt of Tenant's initial submissions, major
revisions and major change orders, and no later than five (5) business days with
respect to required revisions and change orders; (e) Tenant shall not be
required to provide a letter of credit or a completion and lien indemnity bond
for the Tenant Work; (f) such work (including all design, plan review, obtaining
all approvals and permits, and construction) shall be at Tenant's sole cost and
expense (subject to reimbursement to the extent of Landlord's Maximum
Contribution), including delivery to Landlord of plans and specifications of
such Tenant Work (including, upon completion, as-built mylar and digitzied (if
available) sets of plans and specifications) to the extent such work is more
than recarpeting and/or repainting, and (g) Tenant shall pay Landlord a fee
("Construction Monitoring Fee") for monitoring such design, construction and
work by Tenant, which shall not exceed one and one-half percent (1.5%) of all
"hard costs" of the Tenant Work. The design and performance of Tenant Work may
(at Tenant's election) be done separately for each of the Saginaw Space and the
Penobscot Space, and in such event this Section 3 applies to and governs each
separate part of such Tenant Work, and shall apply separately to each of the
Saginaw Space and Penobscot Space in the same way as if each were a separate job
or separate Tenant Work.
3.4. Design & Construction Responsibility for any Tenant Work. Tenant shall
--------------------------------------------------------
be responsible for the suitability for the Tenant's needs and business of the
design and function of all Tenant Work and for its construction in compliance
with all Law as applicable and as interpreted at the time of construction of the
Tenant Work, including all building codes and the ADA (as defined in the Lease).
In the event that this Lease or any improvements or alterations in connection
herewith triggers any upgrades or modifications of existing improvements in the
Premises to comply with Law, Tenant shall also be responsible for such upgrades
and modifications (subject to reimbursement to the extent of Landlord's Maximum
Contribution. Tenant, through its architects and/or space planners ("Tenant's
Architect"), shall prepare all architectural plans and specifications, and
engineering plans and specifications, for the real property improvements to be
constructed by Tenant in the Premises in sufficient detail to be submitted to
Landlord for approval, to the extent required pursuant to Article Nine of the
Lease, and to be submitted by Tenant for governmental approvals and building
permits and to serve as the detailed construction drawings and specifications
for the contractor, and shall include, among other things, all partitions,
doors, heating, ventilating and air conditioning installation and distribution,
ceiling systems, light fixtures, plumbing installations, electrical
installations and outlets, telephone installations and outlets, any other
installations required by Tenant, fire and life-safety systems, wall finishes
and floor coverings, whether to be newly installed or requiring changes from the
as-is condition of the Premises as of the date of execution of the Lease. Tenant
shall be
Rider 2 - Page 2 of 9
<PAGE>
responsible for the oversight, supervision and construction of all Tenant Work
in compliance with this Lease, including compliance with all Law as applicable
and as interpreted at the time of construction, including all building codes and
the ADA.
3.5. Landlord's Maximum Contribution: Amount; Reimbursable Costs & Payment.
---------------------------------------------------------------------
Landlord's Maximum Contribution means the amount or amounts, as applicable,
described below to reimburse Tenant for the actual costs of design, engineering,
plan review, obtaining all approvals and permits, and construction of Tenant
Work respectively in each of the Saginaw Space and Penobscot Space, and shall be
payable as provided below: (a) up to a maximum of Two Hundred and Nine Thousand,
Four Hundred and Forty-seven Dollars ($209,447.00) only for Tenant Work in the
Saginaw Space, and (b) up to a maximum of Ninety-two Thousand Five Hundred and
Sixty Dollars ($92,560.00) only for Tenant Work in the Penobscot Space, and if
Landlord does not deliver the Penobscot Space and it does not become part of the
Premises as described above, then Tenant has no right or claim with respect to
this Penobscot Space portion of the Landlord's Maximum Contribution. In no event
shall the Landlord's Maximum Contribution be used to reimburse any costs of
designing, procuring or installing in the Premises any trade fixtures, movable
equipment, furniture, furnishings, telephone equipment, cabling for any of the
foregoing, or other personal property (collectively "Personal Property" for
purposes of this Rider), and the cost of such Personal Property shall be paid by
Tenant. Landlord's Maximum Contribution shall be paid to Tenant within 30 days
after the later of final completion of the Tenant Work in the respective Saginaw
Space or Penobscot Space and Landlord's receipt of (i) a certificate of
occupancy (if applicable), (ii) final as-built plans and specifications,
including as-built mylar and digitzied (if available) sets of plans and
specifications, (iii) full, final, unconditional lien releases, and (iv)
reasonable substantiation of costs incurred by Tenant with respect to such
Tenant Work. Tenant must prior to expiration of nine (9) months after the
Commencement Date of the respective space submit written application with the
items required above for disbursement or reimbursement for any reimbursable
costs out of the Landlord's Maximum Contribution, and to the extent of any funds
for which application has not been made prior to that date or if and to the
extent that the reimbursable costs of the Tenant Work in the respective space
are less than the amount of Landlord's Maximum Contribution for such space, then
Landlord shall retain the unapplied or unused balance of the Landlord's Maximum
Contribution for such space and shall have no obligation or liability to Tenant
with respect to such excess.
SECTION 4. OPTION TO EXTEND.
(a) Landlord hereby grants Tenant a single option to extend the initial
Term of the Lease for an additional period of five (5) years (such period may be
referred to as the "Option Term"), as to the entire Premises as it may then
exist, upon and subject to the terms and conditions of this Section (the "Option
To Extend"), and provided that at the time of exercise of such right: (i) Tenant
or an Affiliate which is an assignee of the Lease which has satisfied the
requirements of Subsections 10.01(e) and (f) of this Lease must be in occupancy
of the entire Premises, except for sublease(s) in the aggregate not in excess of
fifty percent (50%) of the Premises to Affiliate(s) which have satisfied the
requirements of Subsections 10.01(e) and (f) of this Lease; and (ii) there has
been no material adverse change in Tenant's financial position from such
position as of the date of execution of the Lease, as certified by Tenant's
independent certified public accountants and as supported by Tenant's certified
financial statements, copies of which shall be delivered to Landlord with
Tenant's written notice exercising its right hereunder.
(b) Tenant's election (the "Election Notice") to exercise the Option To
Extend must be given to Landlord in writing no earlier than the date which is
fifteen (15) months before the Expiration Date and no later than the date which
is twelve (12) months before the Expiration Date. If Tenant either fails or
elects not to exercise its Option to Extend by not timely giving its Election
Notice, then the Option to Extend shall be null and void.
(c) The Option Term shall commence immediately after the expiration of the
initial Term of the Lease. Tenant's leasing of the Premises during the Option
Term shall be upon and subject to the same terms and conditions contained in
the Lease except that (i) the Monthly Base Rent shall be amended to an amount to
equal the "Option Term Rent", defined and determined in the manner set forth in
the immediately following Subsection (and otherwise, Tenant shall continue to
pay Rent Adjustments and other charges pursuant to the Lease and Tenant shall
continue to pay directly the utility or service provider for all utilities or
services which Tenant is to obtain directly pursuant to other provisions of the
Lease); (ii) Tenant shall accept the Premises in its "AS-IS" condition without
any obligation of Landlord to repaint, remodel, repair, improve or alter the
Premises or to provide Tenant any allowance therefor; and (iii) there shall be
no further option or right to extend the term of the Lease. If Tenant timely and
properly exercises the Option To Extend, references in the Lease to the Term
shall be deemed to mean the initial Term as extended by the Option Term unless
the context clearly requires otherwise.
(d) The Option Term Rent shall mean the greater of (i) the Monthly Base
Rent payable by Tenant under this Lease calculated at the rate applicable for
the last full month of the initial Term ("Preceding Rent") (during the Option
Term, Tenant shall continue to pay Rent Adjustments and other charges pursuant
to the Lease and Tenant shall continue to pay directly the utility or service
provider for all utilities or services which Tenant is to obtain directly
pursuant to other provisions of the Lease, but such amounts shall not be counted
as part of the Preceding Rent as used herein) or (ii) the "Prevailing Market
Rent". As used herein Prevailing Market Rent shall mean the rent and all other
monetary payments, escalations and triple net payables by Tenant, including
consumer price increases, that Landlord could obtain from a third party desiring
to lease the Premises for a term equal to the Option
Rider 2 - Page 3 of 9
<PAGE>
Term and commencing when the Option Term is to commence under market leasing
conditions, and taking into account the following: the size, location and floor
levels of the Premises, the type and quality of tenant improvements; age and
location of the Project, quality of construction of the Project, services to be
provided by Landlord or by tenant; the rent, all other monetary payments and
escalations obtainable for new leases of space comparable to the Premises in the
Project and in comparable buildings in the mid-Peninsula area, and other factors
that would be relevant to such a third party in determining what such party
would be willing to pay therefor, provided, however, that Prevailing Market Rent
shall be determined without reduction or adjustment for "Tenant Concessions" (as
defined below), if any, being offered to prospective new tenants of comparable
space. For purposes of the preceding sentence, the term "Tenant Concessions"
shall include, without limitation, so-called free rent, tenant improvement
allowances and work, moving allowances, and lease takeovers. The determination
of Prevailing Market Rent based upon the foregoing criteria shall be made by
Landlord, in the good faith exercise of Landlord's business judgment. Within
thirty (30) days after Tenant's exercise of the Option To Extend, Landlord shall
notify Tenant of Landlord's determination of Option Term Rent for the Premises.
If Landlord's determination of Prevailing Market Rent is greater than the
Preceding Rent, and if Tenant, in Tenant's sole discretion, disagrees with the
amount of Prevailing Market Rent determined by Landlord, Tenant may elect to
revoke and rescind the exercise of the option by giving written notice thereof
to Landlord within thirty (30) days after notice of Landlord's determination of
Prevailing Market Rent.
(e) This Option to Extend is personal to Phone.com and may not be used by,
and shall not be transferable or assignable (voluntarily or involuntarily) to
any person or entity other than an Affiliate which is an assignee of the Lease
which has satisfied the requirements of Subsections 10.01(e) and (f) of this
Lease, and such Affiliate may exercise the right without Tenant joining in or
consenting to such exercise, and notwithstanding any provision of the Lease to
the contrary, Tenant shall remain liable for all obligations under the Lease,
including those resulting from any such exercise with the same force and effect
as if Tenant had joined in such exercise.
(f) Upon the occurrence of any of the following events, Landlord shall
have the option, exercisable at any time prior to commencement of the Option
Term, to terminate all of the provisions of this Section with respect to the
Option to Extend, with the effect of canceling and voiding any prior or
subsequent exercise so this Option to Extend is of no force or effect:
(i) Tenant's failure to timely exercise the Option to Extend in
accordance with the provisions of this Section.
(ii) The existence at the time Tenant exercises the Option to Extend
or at the commencement of the Option Term of any Default on the part of Tenant
under the Lease.
(iii) Tenant's third default under the Lease prior to the commencement
of the Option Term, notwithstanding that all such defaults may subsequently be
cured.
In the event of Landlord's termination of the Option to Extend by reason of
Tenant's Default pursuant to Subsection 4(f)(ii) of this Rider, Tenant shall
reimburse Landlord for all costs and expenses Landlord incurs in connection with
Tenant's exercise of the Option to Extend, including costs and expenses with
respect to any brokerage commissions and attorneys' fees, and with respect to
the design, construction or making of any tenant improvements, repairs or
renovation or with respect to any payment of all or part of any allowance for
any of the foregoing .
(g) Without limiting the generality of any provision of the Lease, time
shall be of the essence with respect to all of the provisions of this Section.
SECTION 5. MONUMENT SIGNAGE.
(a) Grant of Right. Notwithstanding any provision of Section 6.06 of the
--------------
Lease to the contrary, so long as Tenant is in continuous operation at and
occupancy of at least fifty percent (50%) of the entire Premises, Tenant shall
have the right to place Tenant identification on one line of one existing,
exterior monument sign for each of the two (2) Buildings in which the Premises
are located, subject to the terms and conditions set forth in this Section
("Exterior Sign Right").
(b) General Conditions & Requirements. The size, type, style, materials,
---------------------------------
color, method of installation and exact location of the sign, and the contractor
for and all work in connection with the sign, contemplated by this Section shall
(i) be subject to Tenant's compliance with all applicable laws, regulations and
ordinances and with any covenants, conditions and restrictions of record which
affect the Property; (ii) be subject to Tenant's compliance with all
requirements of Landlord's current Project signage criteria at the time of
installation; (iii) be consistent with the design of the Building and the
Project; (iv) be further subject to Landlord's prior written consent. Tenant
shall, at its sole cost and expense, procure, install, maintain and remove such
sign.
(c) Removal & Restoration. Upon the expiration or termination of the
---------------------
Exterior Sign Right, but in no event later than the expiration of the Term or
earlier termination of the Lease, Tenant shall, at its sole cost and expense,
remove such sign and shall repair and restore the area in which the sign was
located to its condition prior to installation of such sign.
Rider 2 - Page 4 of 9
<PAGE>
(d) Right Personal. The Exterior Sign Right under this Section is personal
--------------
to Phone.com and may not be used by, and shall not be transferable or assignable
(voluntarily or involuntarily) to any person or entity other than an assignee
of the Lease which has satisfied the requirements of Article Ten of this Lease.
SECTION 6. ROOF ANTENNA.
(a) Grant of License. Landlord hereby grants Tenant the option for a non-
----------------
exclusive license (the "License") to install, operate, maintain and use the
Equipment (defined below) upon and subject to the terms and conditions described
in this Section, and Tenant hereby accepts from Landlord said option and
license.
(b) Permitted Use; Equipment; Location. The use permitted by this license
----------------------------------
is solely to install, operate, maintain and use, for the sole purpose of
reception of communication and data signals, the following:
(i) a maximum of two antennas (not more than one (1) Antenna on each
Building, respectively housing the Penobscot Space and the Saginaw Space), as
defined in Exhibit E hereto (as applicable, the "Antenna" or "Antennas") on the
---------
open space of the roof (the "Roof") of the Building in the particular location
described on Exhibit E hereto (the "Roof Space"); and
---------
(ii) connections for the Antenna(s) for (x) electrical wiring to the
Building's existing electrical supply and (y) cable or similar connection
necessary to connect the Antenna(s) with Tenant's related equipment located in
the Premises. The routes or paths for such connections shall be through the
Building's existing risers, conduits and shafts, subject to reasonable space
limitations and Landlord's requirements for use of such areas, and in all events
subject to Landlord's approval of location, plans and installation pursuant to
other provisions of this License (such routes or paths are collectively referred
to as the "Cable Path" and all such electrical and other connections are
referred to collectively as "Connections"). The Antenna(s) and Connections are
collectively referred to as the "Equipment".
(c) Exercise. Tenant may exercise this option for one Antenna or two
--------
Antennas, and if Tenant first exercises this option for only one Antenna, Tenant
may thereafter exercise the option for a second Antenna. In no event shall this
option allow Tenant more than two Antennas. Tenant shall exercise this option,
(for either or both Antennas) if at all, by Tenant giving Landlord written
notice at least ninety (90) days prior to the desired installation date.
(d) Term. The term of the License shall commence upon the date of exercise
----
of the option as to each respective Antenna and shall terminate upon the earlier
of (i) the date of expiration or earlier termination of the Lease Term or of
Tenant's right to possession of the Premises; (ii) the date on which any Law
requires the removal or prohibits the use of the Equipment; (iii) at Landlord's
option, as an additional remedy hereunder, exercisable by written notice to
Tenant in the event that the Equipment or manner of installation is not in
compliance with the provisions hereof; or (iv) as provided in Subsection (f)
below. Except as otherwise provided in this Lease, this License shall not be
revocable and shall continue for the full term, unless sooner terminated as
otherwise provided in this Section. Notwithstanding any provision of this
License to the contrary, Tenant shall have the right to terminate this License,
as to either or both Antennas, prior to the expiration or termination of the
Lease upon Tenant's giving Landlord not less than thirty (30) days prior written
notice. If such notice specifies Tenant is terminating this License as to only
one specified Antenna, then all rights hereunder with respect to the specified
Antenna shall be thereby terminated, but Tenant shall retain any unexercised
right to a second Antenna or if the second Antenna is then in place, this
License shall continue for that single Antenna pursuant to all other terms and
conditions hereof. If Tenant's notice does not specify that the termination is
only as to one Antenna, it shall be deemed to terminate all rights of Tenant
under this License as to both Antennas.
(e) License Non-Exclusive. Tenant acknowledges and agrees that Landlord
---------------------
has previously granted others rights to use the Roof or other areas of the
Building or the Project for antennas or other equipment for the reception or
transmission of data or other signals, and that the rights granted to Tenant
pursuant to this License are expressly subject and subordinate to the rights
previously granted to others, whether or not such others have exercised such
rights as of the date of the Lease, and the Equipment shall not interfere with
any antennas and equipment now or hereafter installed pursuant to any such
rights on the Roof or at the Project. Tenant further acknowledges and agrees
that Landlord shall have the right hereafter to grant rights to third parties to
use the Roof or other space at the Building or Project for, among other things,
antennas or other devices for the reception or transmission of communication,
data or other signals.
(f) Interference. Without limiting the generality of any other provision
------------
hereof, Tenant agrees that the installation, maintenance and operation of the
Equipment shall not cause any electrical, electromagnetic, radio frequency or
other interference. If, in the sole judgment of Landlord, any electrical,
electromagnetic, radio frequency or other interference shall result from the
operation of any of Tenant's Equipment, Tenant agrees that Landlord may, at
Landlord's option, shut down Tenant's equipment upon not less than four (4)
hours prior verbal notice to Tenant; provided, however that if an emergency
situation exists, which Landlord reasonably determines in its sole discretion to
be attributable to Tenant's equipment, Landlord may immediately notify Tenant
verbally, who shall act immediately to remedy the emergency situation. Should
Tenant fail to so remedy said emergency situation, Landlord may then act to shut
down Tenant's Site Equipment. Tenant shall indemnify and defend Landlord and
hold it harmless from all
Rider 2 - Page 5 of 9
<PAGE>
expenses, costs, damages, loss, claims or other liabilities arising out of said
shutdown. Tenant agrees to cease operations with regard to satellite dish
reception (except for intermittent testing on a schedule approved by Landlord)
until the interference has been corrected to the satisfaction of Landlord. If
such interference has not been corrected within 60 days, Landlord may, at its
sole option, either terminate this License forthwith, or may require that Tenant
immediately remove from the Antenna Site the specific item of Site Equipment
causing such interference, in which latter case the Monthly License Fee shall be
reduced by the portion of the fee applicable to such equipment for the remainder
of the Term and all other terms and conditions of this License shall remain in
full force and effect.
(g) Condition; Services; Risk of Loss; Access.
-----------------------------------------
(1) Tenant shall accept the Roof Space and Cable Path in its
condition and "as-built" configuration existing on the date or dates of exercise
of the option or options, as applicable. Landlord has made no representations or
promise as to the suitability or effectiveness of any part of the Roof for
Tenant's proposed use, or as to any governmental requirements applicable to
Tenant's proposed use, or as to the condition of (or alteration or improvement
of) the Roof Space or the Cable Path unless and except as expressly set forth
herein.
(2) Tenant may connect to and use the Building's existing electrical
supply, but Tenant shall be responsible for the cost of supplying electricity to
the Equipment, including without limitation, electricity usage, installation,
maintenance and repair of any Connections and of any separate meter required by
Landlord. Electric usage shall be determined, at Landlord's option, either (a)
by meter installed by Landlord at Tenant's sole cost and expense, or (b) by
Landlord's reasonable estimate. Tenant shall pay Landlord monthly, within
fifteen (15) days of being billed therefor, for all electricity used in
connection with the operation of the Equipment.
(3) Landlord is not obligated to furnish any security for the Roof
Space or Cable Path. Tenant assumes full responsibility for protecting from
theft or damage the Equipment and any other tools or equipment that Tenant may
use in connection with the installation, repair or maintenance of the Equipment,
assumes all risk of theft, loss or damage, waives any claim with respect thereto
against Landlord and its property manager (and the employees, owners, partners
and agents of each), and hereby indemnifies and agrees to hold harmless and
defend such parties from any claims, losses, liabilities, damages or expenses
arising out of the foregoing, including without limitation, subrogation claims
by Tenant's insurers.
(4) Landlord shall allow Tenant reasonable access to the Roof Space
and Cable Path for the purposes of installation, maintenance and repair of the
Equipment during normal business hours of the Building upon Tenant's reasonable
advance request, subject to reasonable rules and restrictions of Landlord.
(h) Plans; Installation & Maintenance. Tenant or Tenant's employees,
---------------------------------
agents or contractors, subject to Landlord's prior written approval, shall
install and maintain the Equipment at Tenant's sole cost and expense. The
Equipment and work related to its installation ("Installation Work") shall be
subject to (i) obtaining Landlord's prior written approval of plans and
specifications, which approval shall not be unreasonably withheld, and Tenant
acknowledges and agrees that, without limiting the generality of the foregoing,
it shall be reasonable for Landlord to disapprove any Antenna if it does not
have a non-penetrating mast mount design, if it exceeds Roof load limitations,
or if it exceeds the height of the Roof parapet; and (ii) all additional
requirements that apply with respect to alterations by Tenant to the Premises
under the Lease. The plans and specifications for the Equipment shall include,
without limitation, Antenna and mounting structure design and size, floor and
power load requirements, cabling installations, the means of affixing or
mounting the Antenna(s), and the means of connecting the Antenna(s) to the
Building's electrical system and to the Premises. Tenant shall deliver to
Landlord such additional information as may be requested by Landlord from time
to time. Installation Work shall be completed in accordance with the foregoing
and in a good and workmanlike manner in cooperation with Landlord. All labor
used by Tenant or any of Tenant's agents or contractors shall be compatible with
then existing labor in the Building. Tenant shall notify Landlord of the date of
substantial completion of any installation of the Equipment. Tenant shall keep
its Equipment, the Roof Space, Cable Path and the areas immediately surrounding
same neat and clean. With respect to all operations with respect to the
Antenna(s), Tenant shall conduct its business and control its agents, employees
and invitees in such manner as not to create any nuisance, or interfere with,
annoy or disturb any other licensee or tenant of the Building or Landlord in its
operation of the Building (including the Roof Space and Cable Path). Landlord
shall have no obligation to license, maintain, operate or safeguard the Site
Equipment.
(i) Roof Damage. Any damage to the Roof or any other portion of the
-----------
Building resulting from the installation, operation, maintenance or removal of
the Equipment, including without limitation, leakage, water damage or damage to
the roof membrane, shall be repaired by Landlord at Tenant's sole cost and
expense. Tenant shall reimburse Landlord for any costs and expenses so incurred
by Landlord within thirty (30) days after Landlord's written request therefor.
Tenant shall, at Tenant's sole cost and expense, provide protection to the roof
membrane as Landlord may deem necessary so that such membrane is not damaged by
personnel in connection with installation, operation, maintenance or removal.
(j) Compliance With Laws. Tenant, at its sole cost and expense, shall
--------------------
comply with all local, state and federal Laws, regulations and governmental
authority requirements applicable to the installation, maintenance and operation
of the Equipment. Tenant, at its sole cost and expense, shall be responsible for
Rider 2 - Page 6 of 9
<PAGE>
obtaining, if required, any building permits, and any licenses or permits which
may be required by the Federal Communication Commission (FCC), the Federal
Aviation Administration (FAA) or any other governmental authority having
jurisdiction over the Equipment or the Building. If necessary, Landlord agrees
reasonably to cooperate with Tenant at Tenant's sole cost and expense, to obtain
any appropriate licenses or permits. Without limiting the generality of the
foregoing, if required by any such governmental authority, or by Landlord,
Tenant shall (a) paint the dish portion of the Antenna, and (b) install a
waterproof label on the Antenna specifying the name, address and phone number of
the Tenant and the name and phone number of a contact in an emergency.
(k) Destruction/Condemnation. In the event the Roof is damaged to such a
------------------------
degree that the Antenna can no longer be operated or the Roof Space is taken by
power of eminent domain. Tenant may immediately terminate its rights hereunder
by providing written notice to Landlord. In the event of such a casualty or
condemnation and provided that the Lease has been terminated because of such
casualty or condemnation pursuant to the provisions therein, this License may
also be terminated by Landlord simultaneous with the Lease termination,
otherwise any damage to the Roof shall be repaired by Landlord, subject to all
provisions of and limitations of the Lease.
(l) Termination; Equipment As Property of Tenant. Upon the expiration or
--------------------------------------------
sooner termination of this License, Tenant shall immediately cease using the
Roof Space and Cable Path. Tenant shall, at its own cost and expense,
immediately remove the Equipment and shall restore the Roof Space and areas
affected by the cabling installations to the condition in which they were found
prior to the installation of the Equipment, reasonable wear and damage by
casualty excepted. The Equipment shall be considered personal property of
Tenant. Provided, however, if Tenant fails timely to remove the Equipment, it
shall be deemed abandoned and may be claimed by Landlord or removed and disposed
of by Landlord at Tenant's expense.
(m) Temporary Removal Of Antenna. Tenant, at its sole expense, shall
----------------------------
remove or relocate the Equipment on a temporary basis and upon ten (10) days
written notice from Landlord at any time Landlord determines such removal or
relocation is reasonably necessary or appropriate for the expeditious repair,
replacement, alteration, improvement or additions to or of the Roof or any area
of the Cable Path, or to access any such areas for Building needs.
(n) General Provisions; Rent; Default; Landlord Access; Liability;
--------------------------------------------------------------
Indemnification. Tenant and Landlord acknowledge and agree that the Roof Space
---------------
is not a part of the Premises, but agree that except as otherwise provided in
this Lease this License shall be upon and subject to the same conditions,
covenants and terms contained in the Lease as apply with respect to the
Premises, including without limitation, those pertaining to any act or omission
in connection with Tenant's use, compliance with Laws, rent, utilities, repairs,
alterations, default, indemnification and waiver of claims of the Lease, as
fully as if the Roof Space and Cable Path were part of the Premises and as if
the use under this License and all acts or omissions with respect to this
License occurred in the Premises, provided that notwithstanding any provision of
the Lease or of the foregoing to the contrary, Landlord and Tenant agree as
follows: (i) for this License Tenant shall pay Landlord, as additional rent
under the Lease in the same manner and at the same time as required for payments
of Monthly Base Rent, commencing upon the date of exercise of the option as to
each respective Antenna and continuing for the term of this License for the
respective Antenna the amount per Antenna per month ("Antenna Rent") determined
as follows: the rate per Antenna per month of the term of this License for the
respective Antenna shall be Two Hundred and Fifty Dollars ($250.00) per month
for the first year after the execution date of this Amendment, and for each year
thereafter the rate shall increase by four percent (4%) annually, on a
cumulative basis, which rate will increase regardless of whether or when Tenant
exercises its option to install an Antenna; (ii) any default by Tenant or
Landlord under any condition, term or covenant of this License shall be deemed a
default by such party under the Lease, subject to the same rights and remedies
of the parties with respect to, and with the same effect as, a default under
other provisions of the Lease; (iii) any restriction (if any) on Landlord's
access and entry to the Premises set forth in the Lease shall not apply to the
Roof Space, and Landlord shall have full and unrestricted access over and to all
areas of the Roof, and others having equipment or installations on the Roof
shall have full and unrestricted access over and to the areas of the Roof on
which such equipment or installations are located; (iv) if the real estate taxes
or insurance premiums for the Building are increased as a result of the
installation of the Equipment, then Tenant shall pay its share of any such
increase directly attributable to such installation upon notice from Landlord,
which notice shall include evidence of such increase; and (v) Tenant shall
insure the Equipment under Tenant's liability and casualty insurance policies
required under the Lease and provide Landlord with proof of same.
(o) License Personal. The Equipment shall be solely for the use of Tenant.
----------------
Tenant is specifically prohibited from selling, reselling, or distributing
services associated with the Equipment to a third party. This License is
personal to Phone.com and shall not be transferable or assignable, whether
voluntarily or involuntarily, whether by operation of law or otherwise, either
in connection with an assignment of the Lease, or a sublease of all or part of
the Premises, or otherwise to any person or entity other than an Affiliate which
is an assignee of the Lease which has satisfied the requirements of Subsections
10.01(e) and (f) of this Lease, and such Affiliate may exercise the right
without Tenant joining in or consenting to such exercise, and notwithstanding
any provision of the Lease to the contrary, Tenant shall remain liable for all
obligations under the Lease, including those resulting from any such exercise
with the same force and effect as if Tenant had joined in such exercise.
Provided however, so long as Tenant or an Affiliate meeting the requirements
above exercises the option and performs all obligations of Tenant with respect
to this right,
Rider 2 - Page 7 of 9
<PAGE>
then Tenant or such Affiliate may allow any other Affiliate to use the
Equipment, provided further that such use is merely incidental to the use of the
space in the applicable Building. Any purported transfer or assignment of this
License except as expressly provided above shall be void and a material default
under this Lease.
SECTION 7. PENOBSCOT SPACE OPTION
(a) If Landlord does not deliver the Penobscot Space within the time
period provided in Section 3 of Rider 2 and if it thereafter becomes available
in the year 2000, Tenant shall have a one time option to lease the Penobscot
Space (which right applies only to lease of all such space) upon and subject to
the terms and conditions of this Section (the "Penobscot Option"). Landlord
shall give Tenant written notice ("Landlord's Notice") if such space becomes
available or of the approximate date Landlord reasonably estimates it will
become available, and of the Monthly Base Rent for the Penobscot Space
(determined as provided below). This Penobscot Option is exercisable by written
notice from Tenant to Landlord ("Election Notice") no later than ten (10) days
after Landlord's Notice to Tenant ("Election Notice Period").
(b) If Tenant timely exercises this Penobscot Option, the terms and
conditions applicable to lease of the Penobscot Space shall be the same as set
forth in this Lease (including, for example, those with respect to Rent
Adjustments, Tenant's Share, Delivery Date, Commencement Date and other
provisions of Rider 2), with the following exceptions and clarifications:
(1) The Monthly Base Rent for the Penobscot Space shall be an amount
equal to ninety-five percent (95%) of the monthly base rent which would be
payable at prevailing market, including consumer price increases, that Landlord
could obtain from a third party desiring to lease the Penobscot Space for a term
equal to that for the Penobscot Space and commencing at the time of the
Penobscot Space Commencement Date under market leasing conditions, and taking
into account the following: the size, location and floor levels of the Penobscot
Space; the type and quality of tenant improvements; age and location of the
Project; quality of construction of the Project; services to be provided by
Landlord or by tenant; the rent, all other monetary payments and escalations
obtainable for new leases of space comparable to the Penobscot Space in the
Project and in comparable buildings in the mid-Peninsula area, and other factors
that would be relevant to such a third party in determining what such party
would be willing to pay therefor, and further taking into account that all other
terms and conditions remain as provided in this Lease, including for example,
the Landlord's Maximum Contribution applicable to the Penobscot Space, the
payment by Tenant of Rent Adjustments and other charges pursuant to the Lease
and payment by Tenant directly to the utility or service provider for all
utilities or services which Tenant is to obtain directly pursuant to other
provisions of the Lease. The determination of the prevailing market rate for
such monthly base rent shall be based upon the foregoing criteria and shall be
made by Landlord, in the good faith exercise of Landlord's business judgment.
(2) The Security Deposit shall be increased by an amount equal to the
Monthly Base Rent for the final 6 months of the Penobscot Term.
(3) Those provisions in the third sentence of Section 3.1(c) as to
the consequences of non-delivery of the Penobscot Space within 120 days after
Landlord's execution of this Lease shall no longer apply.
(4) The Expiration Date, for the combined Premises of both the
Penobscot Space and the Saginaw Space, shall be the date which is five (5) years
after the Commencement Date for the Penobscot Space.
(c) If Tenant either (i) fails or elects not to exercise this Penobscot
Option by not giving its Election Notice within the Election Notice Period, or
(ii) if Tenant gives Tenant's Election Notice but does not execute an amendment
to this Lease (providing for addition of the Penobscot Space to the Premises on
the terms and conditions described herein) prepared by Landlord within five (5)
business days after Landlord gives Tenant a draft thereof, or (iii) if Tenant
does not pay at the time Tenant executes such amendment the required increase in
the Security Deposit and first installment of Monthly Base Rent for the
Penobscot Space, then in any such event the Penobscot Option shall be null and
void, and at any time thereafter Landlord shall be free to lease and/or
otherwise grant options or rights to such space on any terms and conditions
whatsoever free and clear of this Penobscot Option.
(d) This Penobscot Option is personal to Phone.com and may not be used by,
and shall not be transferable or assignable (voluntarily or involuntarily) to
any person or entity other than an Affiliate which is an assignee of the Lease
which has satisfied the requirements of Subsections 10.01(e) and (f) of this
Lease, and such Affiliate may exercise the right without Tenant joining in or
consenting to such exercise, and notwithstanding any provision of the Lease to
the contrary, Tenant shall remain liable for all obligations under the Lease,
including those resulting from any such exercise with the same force and effect
as if Tenant had joined in such exercise.
Rider 2 - Page 8 of 9
<PAGE>
(e) Without limiting the generality of any provision of the Lease, time
shall be of the essence with respect to all of the provisions of this Section.
IN WITNESS WHEREOF, the parties hereto have executed this Rider 2 as of the
date first set forth in the Lease.
TENANT: LANDLORD:
------ --------
Phone.com, Inc., Metropolitian Life Insurance Company,
a Delaware corporation a New York corporation
By /s/ ALAN BLACK By /s/ [ILLEGIBLE]
----------------------------- -------------------------------
Alan Black [ILLEGIBLE]
----------------------------- -------------------------------
Print name Print name
Its CFO Its Vice President
---------------------------- -------------------------------
(Chairman of Board, President or
Vice President)
By /s/ LINDA SPEER
-----------------------------
Linda Speer
-----------------------------
Print name
Its Vice President of Finance
-----------------------------
(Secretary, Assistant Secretary,
CFO or Assistant Treasurer)
Rider 2 - Page 9 of 9