California-Cupertino-10201 Torre Avenue Lease - TST Torre LLC and Portal Software Inc.
LEASE
TST TORRE, L.L.C.,
a Delaware limited liability company,
Landlord
and
PORTAL SOFTWARE, INC.,
a Delaware corporation,
Tenant
for
10201 Torre Avenue
Cupertino, California
September _____, 1999
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LEASE
THIS LEASE is made as of the ____ day of September, 1999 ("Effective
Date"), between TST TORRE, L.L.C. ("Landlord"), a Delaware limited liability
company, having an office c/o Tishman Speyer Properties, L.P. 520 Madison
Avenue, New York, New York 10022 and Portal Software, Inc., ("Tenant"), a
Delaware corporation, having an office at 20883 Stevens Creek Boulevard,
Cupertino, CA 95014
Landlord and Tenant hereby covenant and agree as follows:
ARTICLE 1
BASIC LEASE PROVISIONS
PREMISES The first (1st), second (2nd), and third (3rd) floors of
the Building, as more particularly shown on Exhibits A-1
through A-3, inclusive.
BUILDING The building, fixtures, equipment and other improvements
and appurtenances now located or hereafter erected,
located or placed upon the land known as 10201 Torre
Avenue in Cupertino, California.
REAL PROPERTY The Building, together with the plot of land upon which
it stands.
SCHEDULED November 1, 1999
DELIVERY DATE
DELIVERY GRACE December 1, 1999
PERIOD EXPIRATION
DATE
SCHEDULED RENT May 1, 2000
COMMENCEMENT DATE
SCHEDULED May 1, 2000
COMMENCEMENT DATE:
EXPIRATION DATE December 31, 2010; provided, however, that promptly
following the determination of the date which is the
"Expiration Date" as defined in that certain Lease dated
as of June 25, 1999, by and between TST CUPERTINO,
L.L.C., a Delaware limited liability company, as
landlord, and Tenant, as tenant, concerning
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Cupertino City Center V ("CCCV Lease"), if such
determination ever occurs, Landlord and Tenant shall
amend this Lease to conform the Expiration Date hereunder
with the Expiration Date of the CCCV Lease; or the last
day of any renewal or extended term, if the Term of this
Lease shall have been extended in accordance with any
express provision hereof.
TERM The period commencing on the Commencement Date and ending
on the Expiration Date.
PERMITTED USES Executive and general office use for the transaction of
Tenant's business, related training, software research
and development activities and storage or distribution of
materials incidental thereto, but excluding any
Prohibited Use (as hereinafter defined).
TENANT'S One hundred percent (100%).
PROPORTIONATE SHARE
AGREED AREA OF 93,218 rentable square feet.
BUILDING
AGREED AREA OF 93,218 rentable square feet allocated as follows:
PREMISES
Floor 1 - 29,191 rentable square feet
Floor 2 - 31,834 rentable square feet
Floor 3 - 32,193 rentable square feet
FIXED RENT (i) $2,824,505.40 per annum ($235,375.45 per month)
($2.525 per rentable square foot of the Premises ("RSF")
per month) for the period commencing on the Commencement
Date and ending on the day preceding the first
anniversary of the Commencement Date, both dates
inclusive; (ii) $2,909,240.52 per annum ($242,436.71 per
month) ($2.601 per RSF per month) for the period
commencing on the first (1st) anniversary of the
Commencement Date and ending on the day preceding the
second (2nd) anniversary of the Commencement Date, both
dates inclusive; (iii) $2,996,517.72 per annum
($249,709.81 per month) ($2.679 per RSF per month) for
the period commencing on the second (2nd) anniversary of
the Commencement Date and ending on the day preceding the
third (3rd) anniversary of the Commencement Date, both
dates inclusive; (iv) $3,086,413.20 per annum
($257,201.10 per month) ($2.759 per RSF per month) for
the period commencing on the third (3rd) anniversary of
the Commencement Date and ending on the day preceding the
fourth (4th) anniversary of the Commencement Date, both
dates
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inclusive; (v) $3,179,005.56 per annum ($264,917.13 per
month) ($2.842 per RSF per month) for the period
commencing on the fourth (4th) anniversary of the
Commencement Date and ending on the day preceding the
fifth (5th) anniversary of the Commencement Date, both
dates inclusive; (vi) $3,274,375.68 per annum
($272,864.64 per month) ($2.927 per RSF per month) for
the period commencing on the fifth (5th) anniversary of
the Commencement Date and ending on the day preceding the
sixth (6th) anniversary of the Commencement Date, both
dates inclusive; (vii) $3,372,606.96 per annum
($281,050.58 per month) ($3.015 per RSF per month) for
the period commencing on the sixth (6th) anniversary of
the Commencement Date and ending on the day preceding the
seventh (7th) anniversary of the Commencement Date, both
dates inclusive; (viii) $3,473,785.20 per annum
($289,482.10 per month) ($3.105 per RSF per month) for
the period commencing on the seventh (7th) anniversary of
the Commencement Date and ending on the day preceding the
eighth (8th) anniversary of the Commencement Date, both
dates inclusive; (ix) $3,577,998.72 per annum
($298,166.56 per month) ($3.199 per RSF per month) for
the period commencing on the eighth (8th) anniversary of
the Commencement Date and ending on the day preceding the
ninth (9th) anniversary of the Commencement Date; (x)
$3,685,338.72 per annum ($307,111.56 per month) ($3.295
per RSF per month) for the period commencing on the ninth
(9th) anniversary of the Commencement Date and ending on
the day preceding the tenth (10th) anniversary of the
Commencement Date, both dates inclusive, and (xi)
$3,795,898.92 per annum ($316,324.91 per month) ($3.393
per RSF per month) for the period commencing on the tenth
(10th) anniversary of the Commencement Date and ending on
the Expiration Date, both dates inclusive.
ADDITIONAL RENT All sums other than Fixed Rent payable by Tenant to
Landlord under this Lease, including Tenant's Tax
Payment, Tenant's Operating Payment, late charges,
overtime or excess service charges, and interest and
other costs related to Tenant's failure to perform any of
its obligations under this Lease.
RENT Fixed Rent and Additional Rent, collectively.
INTEREST RATE The lesser of (i) two percent (2%) per annum above the
then current Base Rate charged by Citibank, N.A. or its
successor, or (ii) the maximum rate permitted by
applicable law.
SECURITY DEPOSIT $3,000,000.00, as adjusted pursuant to Article 33 below.
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LANDLORD'S BROKER Cornish & Carey Commercial
TENANT'S BROKER C.B. Richard Ellis, Inc.
LANDLORD'S AGENT Tishman Speyer Properties, L.P. or any other person
designated at any time and from time to time by Landlord
as Landlord's Agent and their successors and assigns.
All capitalized terms used in the Lease text without definition are
defined in Exhibit B.
ARTICLE 2
PREMISES, TERM, RENT
Section 2.1 Lease of Premises. Subject to the terms of this Lease,
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Landlord leases to Tenant and Tenant leases from Landlord the Premises for the
Term. In addition, Landlord grants to Tenant the right to use, on a non-
exclusive basis, together with Landlord and Landlord's agents, contractors and
employees, other Building common elements and common facilities including,
without limitation, the Building elevators, roof and the Building Surface Lot
(as hereinafter defined) (collectively, the "Common Areas"). No member of the
general public shall be afforded any rights of use or access to the Common
Areas.
Section 2.2 Commencement Date. Upon the Effective Date, the terms and
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provisions hereof shall be fully binding on Landlord and Tenant prior to the
occurrence of the Commencement Date (as hereinafter defined). The Term of this
Lease shall commence on that date (the "Commencement Date") which is the earlier
of (i) the "Scheduled Commencement Date" as specified in Article 1, and (ii) the
date Tenant commences the conduct of business from the Premises (other than
pursuant to Section 2.8 below). Tenant's obligation to commence the payment of
Fixed Rent shall commence on that date (the "Rent Commencement Date") which is
the later of (i) the "Scheduled Rent Commencement Date" specified in Article 1,
as such date may be extended for Landlord Delays (as defined in the Workletter
Agreement attached hereto as Exhibit D (the "Workletter Agreement")), and (ii)
if Landlord does not tender possession of the Premises to Tenant on or before
the "Delivery Grace Period Expiration Date" specified in Article 1, then, the
date which is the same number of days following the Scheduled Rent Commencement
Date as the date of Landlord's tender of possession of the Premises to Tenant
("Delivery Date") is following the Delivery Grace Period Expiration Date. Unless
sooner terminated as hereinafter provided, the Term shall end on the "Expiration
Date" specified in Article 1. If Landlord does not tender possession of the
Premises to Tenant on or before the "Scheduled Delivery Date" specified in
Article 1 for any reason whatsoever, Landlord shall not be liable for any damage
thereby, and, except as otherwise provided herein, this Lease shall not be void
or voidable thereby.
Section 2.3 Payment of Rent. Tenant shall pay to Landlord, without
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notice or demand, and without any set-off, counterclaim, abatement or deduction
whatsoever, except as may be expressly set forth in this Lease, in lawful money
of the United States by wire transfer of
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funds to Landlord's account, as designated by Landlord, or by check drawn upon a
bank approved by Landlord, (i) Fixed Rent in equal monthly installments, in
advance, on the first (1st) day of each calendar month during the Term,
commencing on the Rent Commencement Date, and (ii) Additional Rent, at the times
and in the manner set forth in this Lease. Landlord hereby approves the Bank of
Boston as Tenant's commercial bank.
Section 2.4 First Month's Rent. [Intentionally Deleted]
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Section 2.5 Interest. If Tenant shall fail to pay any installment or
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other payment of Rent within five (5) days following the date when due, interest
shall accrue on such installment or payment as a late charge, from the date such
installment or payment became due until the date paid at the Interest Rate. In
addition to such interest, if any amount is not paid within ten (10) days after
same is due, a late charge equal to two percent (2%) of such amount shall be
assessed (provided, however, that no interest shall accrue on any such late
charge), which late charge Tenant hereby agrees is a reasonable estimate of the
damages Landlord shall suffer as a result of Tenant's late payment, which
damages include Landlord's additional administrative and other costs associated
with such late payment. The parties agree that it would be impracticable and
extremely difficult to fix Landlord's actual damages in such event. Such
interest and late charges are separate and cumulative and are in addition to and
shall not diminish or represent a substitute for any or all of Landlord's rights
or remedies under any other provision of this Lease. Notwithstanding the
foregoing, on the first two (2) occasions during each twelve (12) consecutive
months during the Term, Landlord shall give Tenant written notice of any amount
not received when due and Tenant shall have five (5) Business Days after receipt
of such notice within which to pay the delinquent amount and thereby avoid
imposition of any late charge or interest with respect to such delinquency.
Section 2.6 Parking. Tenant shall be allocated for the use of Tenant
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and Tenant's employees, customers, service suppliers or other invitees
(collectively, "Tenant's Invitees") within the parking area located adjacent to
the Building ("Parking Area"), three and 26/100ths (3.26) parking spaces per one
thousand (1,000) rentable square feet that Tenant occupies in the Premises, on a
non-exclusive basis without fee or charge to Tenant except for Tenant's
Proportionate Share of any Operating Expenses and Taxes with respect to such
Parking Area, which share with respect to the CCCV Spaces (as hereinafter
defined) shall be the portion of operating expenses and taxes allocated by the
fee owner of the CCCV Spaces to Tenant's use rights respecting such CCCV Spaces
provided under this Section 2.6. As more particularly described on the Site Plan
attached hereto as Exhibit "A-4", the Parking Area consists of (a) two hundred
twenty-one (221) surface spaces in a surface lot located on the Real Property
adjacent to the Building (the "Building Surface Lot"), (b) twenty-six (26)
surface spaces located on a surface lot in the location as shown by cross-
hatching on the Site Plan as to which Landlord is the owner and holder of a non-
exclusive easement (the "Parcel 2 Spaces"), and (c) fifty-seven (57) spaces
located in the lower level of Cupertino City Center V 10200 DeAnza Boulevard, as
to which Landlord is the owner and holder of a non-exclusive easement ("CCCV
Spaces"). Nothing contained herein shall be deemed to impose any liability upon
Landlord for personal injury or theft, for damage to any motor vehicle, or for
loss of property from within any motor vehicle, which is suffered by Tenant or
any of Tenant's Invitees in connection with their use of such Parking Area
except when caused by Landlord's gross negligence or willful misconduct. In
order to assure the proper and efficient operation and maintenance of the
Parking Area, Tenant
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agrees to comply with the Parking Rules and Regulations attached hereto as
Exhibit C as such may be amended from time to time (and such other parking rules
as may be promulgated by the fee owners of those portions of the Parking Area
described in clauses (b) and (c) above), and shall use diligent efforts to cause
each of Tenant's Invitees to comply with such Parking Rules and Regulations. The
rights of Tenant and Tenant's Invitees shall at all times be subject to the
rights of Landlord and other parties permitted to use the Parking Area to use
the same in common with Tenant and Tenant's Invitees. Landlord shall enforce all
Parking Rules and Regulations in a reasonable and nondiscriminatory manner, and
consistent with the manner in which owners of other comparable office buildings
in Cupertino, California enforce similar parking rules and regulations.
Section 2.7 Ownership of Real Property. Tenant understands and
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acknowledges that as of the Effective Date Landlord is not the fee owner of the
Real Property. Landlord hereby represents and warrants to Tenant that pursuant
to the terms and provisions of that certain Agreement for Exchange and Purchase
and Escrow Instructions, dated September 22, 1998 (as amended), by and between
Symantec Corporation and TST Development, L.L.C. (Landlord's predecessor-in-
interest), Landlord possesses the contractual right to acquire the Real Property
at a closing which is scheduled to occur on the Scheduled Delivery Date.
Landlord shall use its commercially reasonable efforts to complete the purchase
of the Real Property on the Scheduled Delivery Date, or as soon thereafter as is
reasonably possible, and shall advise Tenant in writing upon the occurrence of
the same. If Landlord fails, or is otherwise unable, to complete the acquisition
of the Real Property on or before February 28, 2000, then Tenant, upon not less
than ten (10) Business Days' prior notice to Landlord shall have the right, as
its sole and exclusive remedy, to terminate this Lease, unless within such ten-
(10-) Business-Day period Landlord advises Tenant it has completed such
purchase. Upon any such termination, Landlord shall return to Tenant any
Security Deposit and thereupon Landlord and Tenant shall be released from any
further duties, obligations or liabilities hereunder.
Section 2.8 Interim Occupancy. From and after the Delivery Date,
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Tenant shall have the right, upon prior written notice to Landlord, to use all
or any portion of the Premises on an interim basis prior to Tenant's
commencement of construction, provided that Tenant shall cease such interim
occupancy if Landlord determines, in its reasonable judgment, that any such
interim occupancy is interfering with the performance of Landlord's Work. Any
such interim occupancy of the Premises shall be upon all of the terms and
conditions of this Lease, except that Tenant shall not be obligated to make any
payments of Fixed Rent. During any such period of interim occupancy and
regardless of the amount of the Premises so used by Tenant, Tenant shall
reimburse Landlord for the amount of electricity, water and other utility
charges, security and cleaning costs incurred by Landlord during such period,
pro rated on a daily basis for each day Tenant is in occupancy, for purposes
other than construction of the Improvements. In addition, during any such period
of interim occupancy, Tenant shall reimburse Landlord for the amount of Taxes
and insurance costs incurred by Landlord during such period, based upon the
amount of the Premises so used by Tenant (as determined on a floor-by-floor
basis) pro rated on a daily basis for each day Tenant is in occupancy, for
purposes other than construction of the Improvements.
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ARTICLE 3
USE AND OCCUPANCY
Section 3.1 (a) Permitted Uses. Tenant shall use and occupy the
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Premises for the Permitted Uses and for no other purpose. Tenant shall not use
or occupy or permit the use or occupancy of any part of the Premises in a manner
constituting a Prohibited Use. If Tenant uses the Premises for a purpose which
constitutes a Prohibited Use or violates any Requirement, or which causes the
Building to be in violation of any Requirement, then Tenant shall promptly
discontinue such use upon notice of such violation. Tenant's failure to
discontinue such use as soon as commercially reasonably possible shall be a
material default hereunder and Landlord shall have the right, without Tenant
having any further period in which to cure, (i) to terminate this Lease
immediately, and (ii) to exercise any and all rights and remedies available to
Landlord at law or in equity.
(b) Licenses and Permits. Tenant, at its expense,
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shall procure and at all times maintain and comply with the terms and conditions
of all licenses and permits required for the lawful conduct of the Permitted
Uses in the Premises. Landlord shall procure and maintain any licenses and
permits required for the lawful operation of the Building Systems or the Parking
Facility, the cost of which shall be included in Operating Expenses.
ARTICLE 4
CONDITION OF THE PREMISES
Section 4.1 Condition. Tenant has inspected the Premises and agrees
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(a) to accept possession of the Premises in a "broom clean" condition free of
debris, but otherwise in its "as is" condition existing on the Delivery Date,
(b) that neither Landlord nor Landlord's agents have made any representations or
warranties with respect to the Premises or the Building except as expressly set
forth in this Lease (including the exhibits hereto), and (c) except for the
construction of Landlord's Work (as defined in the Workletter Agreement),
Landlord has no obligation to perform any work, supply any materials, incur any
expense or make any alterations or improvements to the Premises to prepare the
Premises for Tenant's occupancy. The terms and conditions of the construction of
the Improvements (as defined in the Workletter Agreement) are set forth in the
Workletter Agreement. Tenant's occupancy of the Premises on the Delivery Date
shall be deemed to be acceptance of Landlord's tender of possession thereof and
shall be conclusive evidence, as against Tenant, that Tenant has accepted
possession of the Premises in its then current condition. Without affecting such
acceptance of possession of the Premises by Tenant on the Delivery Date,
Landlord shall perform, or cause to be performed, Landlord's Work in accordance
with the Workletter Agreement concurrently with Tenant's construction of the
Improvements. In addition, in accordance with the terms and provisions of
Section 7.1 below, Landlord shall be responsible for the correction of any
latent or patent defects in the Landlord Repair Areas (as hereinafter defined)
at any time during this Term of the Lease or any extension thereof. No provision
of this Section 4.1 shall diminish Landlord's obligations under Section 7.1
below.
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ARTICLE 5
ALTERATIONS
Section 5.1 Tenant's Alterations. Tenant shall not make any
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alterations, additions or other physical changes in or about the Premises
(collectively, "Alterations") (other than decorative Alterations such as
painting, wall coverings and floor coverings and the installation of voice
and/or data cabling (collectively, "Decorative Alterations")) without Landlord's
prior consent, which consent shall not be unreasonably withheld or delayed.
Provided that the cost of performing such Alterations (exclusive of Decorative
Alterations) is less than Fifty Thousand Dollars ($50,000.00) per incident and
not more than One Hundred Thousand Dollars ($100,000.00) per year in the
aggregate, Tenant may make such Alterations without Landlord's prior consent;
provided such Alterations (i) are non-structural and do not affect any Building
System, (ii) are performed only by Landlord's designated contractors or by
contractors or mechanics approved by Landlord to perform such Alterations, (iii)
affect only the Premises and are not visible from outside of the Premises, (iv)
do not affect the certificate of occupancy issued for the Building or the
Premises, (v) do not adversely affect any service furnished by Landlord to
Tenant or to any other tenant of the Building and (vi) do not violate any
Requirement or cause the Premises or the Building to be non-compliant with any
Requirement.
(b) Plans and Specifications. Prior to making any Alterations
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which require Landlord's consent, Tenant, at its expense, shall (i) submit to
Landlord for its written approval, detailed plans and specifications (including
layout, architectural, mechanical, electrical, plumbing, sprinkler and
structural drawings) of each proposed Alteration, and with respect to any
Alteration affecting any Building System, Tenant shall submit proof that the
Alteration has been designed by, or reviewed and approved by, Landlord's
designated engineer for the affected Building System; (ii) furnish to Landlord
duplicate original policies or certificates of worker's compensation (covering
all persons to be employed by Tenant, and Tenant's contractors and
subcontractors in connection with such Alteration) and comprehensive public
liability (including property damage coverage) insurance and Builder's Risk
coverage (issued on a completed value basis) all in such form, with such
companies, for such periods and in such amounts as Landlord may reasonably
require, naming Landlord, Landlord's managing agent, and their respective
employees and agents, any Lessor and any Mortgagee as additional insureds and
(iii) with respect to any Alterations individually costing at least Five Hundred
Thousand Dollars ($500,000.00), furnish to Landlord such other evidence of
Tenant's ability to complete and to fully pay for such Alterations (which may
include a requirement that Tenant obtain payment and performance bonds) as is
reasonably satisfactory to Landlord. Prior to making any and all Alterations,
Tenant, at its expense, shall obtain all permits, approvals and certificates
required by any Governmental Authorities and deliver copies thereof to Landlord.
In no event shall Tenant be required to post any payment or performance bonds in
connection with the performance of any Decorative Alterations. If Landlord does
not respond in writing within ten (10) Business Days of receipt of Tenant's
plans and specifications, stating with specificity its reasons therefor, Tenant
shall deliver a second notice to Landlord, stating in bold type on the first
page thereof "URGENT - DELAY NOTICE," which notice may be delivered by facsimile
to Landlord at 650-969-3873 and at 212-935-8235 and as otherwise set forth in
Article 27, and if Landlord fails to respond within five (5) days thereafter,
Landlord's consent shall be deemed given. Upon Tenant's request, Landlord shall
reasonably cooperate with Tenant in obtaining any
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permits, approvals or certificates required to be obtained by Tenant in
connection with any permitted Alteration (if the provisions of the applicable
Requirement require that Landlord join in such application), provided Landlord
shall incur no cost, expense or liability in connection therewith.
(c) Governmental Approvals. Upon completion of any
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Alterations, Tenant, at its expense, shall promptly obtain certificates of final
approval of such Alterations required by any Governmental Authority and shall
furnish Landlord with copies thereof, together with "as-built" plans and
specifications for such Alterations.
Section 5.2 Manner and Quality of Alterations. All Alterations shall
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be performed (a) in a good and workmanlike manner and free from defects, (b) in
accordance with the plans and specifications, and by contractors approved by
Landlord, (c) under the supervision of a licensed architect reasonably
satisfactory to Landlord, and (d) in compliance with all Requirements, the terms
of this Lease, all procedures and regulations then prescribed by Landlord for
coordinating all work performed in the Building and the Rules and Regulations.
All materials and equipment to be used in the Premises shall be of first quality
and at least equal to the standards applicable to comparable office buildings
located in Cupertino, California, and no such materials or equipment (other than
Tenant's Property) shall be subject to any lien or other encumbrance.
Section 5.3 Removal of Tenant's Property. Tenant's Property shall be
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and remain the property of Tenant and Tenant may remove the same at any time on
or before the Expiration Date. On or prior to the Expiration Date, Tenant shall,
unless otherwise directed by Landlord, at Tenant's expense, remove any Specialty
Alteration designated in writing by Landlord to be removed at the time consent
thereto was granted and close up any slab penetrations in the Premises. At least
ten (10) Business Days prior to commencing the closing of any such slab
penetrations, Tenant shall notify Landlord of its intention to effect such
closings. Tenant shall repair and restore, in a good and workmanlike manner, any
damage to the Premises or the Building caused by Tenant's removal of any
Specialty Alterations or Tenant's Property or by the closing of any slab
penetrations, and upon default thereof after the expiration of applicable notice
and cure periods, Tenant shall reimburse Landlord, on demand, for Landlord's
cost of repairing and restoring such damage. Any Specialty Alterations or
Tenant's Property which Tenant is required by the terms of this Lease to remove
and is not so removed by the Expiration Date or the earlier termination of this
Lease shall be deemed abandoned and Landlord may remove and dispose of same, and
repair and restore any damage caused thereby, at Tenant's cost and without
accountability to Tenant. Tenant shall not be required to remove any of the
Improvements or any subsequent Alterations unless, in either case, the same
constitute Specialty Alterations which Landlord advises Tenant must be removed
at the time consent thereto was granted. In no event shall Tenant be required to
remove any telephone or data cabling. If requested by Tenant prior to the
installation of any component of the Improvements or of any Alterations,
Landlord will notify Tenant whether (i) any such component of the Improvements
or any such Alterations, or any material component thereof (including, without
limitation, any oversized or exposed conduit) not expressly included within the
definition of Specialty Alterations is considered by Landlord to be such and
(ii) Landlord will waive any requirement that Tenant remove the same upon the
expiration or earlier termination of this Lease. This Section 5.3 shall survive
the expiration or earlier termination of this Lease.
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Section 5.4 Mechanic's Liens. Tenant, at its expense, shall
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discharge any lien or charge filed against the Premises or the Real Property in
connection with any work claimed or determined in good faith by Landlord to have
been done by or on behalf of, or materials claimed or determined in good faith
by Landlord to have been furnished to, Tenant, within ten (10) days after
Tenant's receipt of notice thereof by payment, filing the bond required by law
or otherwise in accordance with law.
Section 5.5 Labor Relations. Tenant shall not employ, or permit the
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employment of, any contractor, mechanic or laborer, or permit any materials to
be delivered to or used in the Premises if Landlord reasonably determines that
any such employment, delivery or use causes or is reasonably anticipated to
cause material and adverse interference or labor conflict with other
contractors, mechanics or laborers engaged in the construction, maintenance or
operation of the Building by Landlord, Tenant or, if Tenant is not then the sole
occupant of the Building, others. In the event of such interference or conflict,
upon Landlord's request, Tenant shall cause all contractors, mechanics or
laborers causing such interference or conflict to leave the Building
immediately.
Section 5.6 Tenant's Costs. Tenant shall pay promptly to Landlord or
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its designee, upon demand, with respect to any Alterations individually costing
less than Fifty Thousand Dollars ($50,000.00) and/or which are not performed at
Tenant's request by Landlord, all out-of-pocket costs actually and reasonably
incurred by Landlord in connection with Tenant's Alterations, including costs
incurred in connection with (i) Landlord's review of the Alterations (including
review of requests for approval thereof) and (ii) the provision of Building
personnel during the performance of any Alteration required by trade union
policy or otherwise, to operate elevators or otherwise to facilitate Tenant's
Alterations and as requested by Tenant. In addition, if Tenant's Alterations
shall cost more than Fifty Thousand Dollars ($50,000.00) and which will be
performed by Landlord at Tenant's request, Tenant shall pay to Landlord or its
designee, upon demand, an administrative fee in respect of the performance of
such Alterations and the scheduling of Building equipment, facilities and
personnel in connection therewith in an amount equal to three percent (3%) of
the total "hard costs" of any such Alterations, where "hard costs" means all
costs of constructing such Alterations excluding architectural and engineering
fees, inspection and testing costs, legal and accounting costs, permit fees and
premiums for any builder's risk insurance. The terms and provisions of this
Section 5.6 shall not apply to the Improvements. Tenant's reimbursement and
payment obligations concerning the Improvements are set forth in the Workletter
Agreement.
Section 5.7 Tenant's Equipment. Tenant shall not move any heavy
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machinery, heavy equipment, freight, bulky matter or fixtures (collectively,
"Equipment") into or out of the Building without Landlord's prior consent and
payment to Landlord of any costs incurred by Landlord in connection therewith.
If such Equipment requires special handling, Tenant agrees (a) to employ only
persons holding a Master Rigger's License to perform such work, (b) all work
performed in connection therewith shall comply with all applicable Requirements
and (c) such work shall be done only during hours designated by Landlord. Tenant
shall indemnify and hold Landlord harmless from and against all damages
sustained by persons or property and all monies paid out by Landlord in
settlement of any claims or judgments (including all expenses and attorneys'
fees incurred in connection therewith) and all costs
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incurred in repairing any damage to the Building or appurtenances. The
agreements set forth in this Section 5.7 shall survive the expiration or earlier
termination of this Lease.
Section 5.8 Legal Compliance. The approval of plans or
----------------
specifications, or consent by Landlord to the making of any Alterations, does
not constitute Landlord's agreement or representation that such plans,
specifications or Alterations comply with any Requirements or the certificate of
occupancy issued for the Building. Landlord shall have no liability to Tenant or
any other party in connection with Landlord's approval of any plans and
specifications for any Alterations, or Landlord's consent to Tenant's performing
any Alterations. If as the result of any Alterations made by or on behalf of
Tenant, Landlord is required to make any alterations or improvements to any part
of the Building in order to comply with any Requirements, whether or not in or
near the Premises, Tenant shall pay all costs and expenses incurred by Landlord
in connection with such alterations or improvements.
ARTICLE 6
FLOOR LOAD
Section 6.1 Floor Load. Tenant shall not place a load upon any floor
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of the Premises that exceeds fifty (50) pounds per square foot "live load"
without Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed with respect to any proposed
request for consent which is accompanied by the determination of a licensed
structural engineer, reasonably satisfactory to Landlord, that the load Tenant
intends to place upon the floor of the Premises will not impair the structural
integrity of the Building. Landlord reserves the right to reasonably designate
the position of all Equipment which Tenant wishes to place within the Premises,
and to place limitations on the weight thereof.
ARTICLE 7
REPAIRS
Section 7.1 Landlord's Repair and Maintenance. Landlord shall
---------------------------------
operate, maintain and, except as provided in Section 7.2 hereof, make all
necessary repairs (both structural and nonstructural) to (i) the Building
Systems, (ii) the Common Areas, (iii) structural elements of Building floors,
exterior walls and interior load-bearing walls, and (iv) exterior window glass,
all in conformance with standards generally applicable to office buildings of
comparable age and quality in Cupertino, California, and (v) to the Premises if
caused by the active negligence or willful misconduct of Landlord or its
employees, agents or contractors. Those elements of the Building as described in
clauses (i) through (iv) above are collectively referred to as the "Landlord
Repair Areas".
Section 7.2 Tenant's Repair and Maintenance. Subject to the
-------------------------------
provisions of Article 13 hereof, Tenant shall promptly, at its expense and in
compliance with Article 5 of this Lease, (a) make all nonstructural repairs to
the Premises and the fixtures, equipment and appurtenances therein as and when
needed to preserve the Premises in good working order and condition, except for
reasonable wear and tear and damage for which Tenant is not responsible,
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and (b) replace scratched or damaged doors, signs and glass (other than exterior
window glass) in and about the Premises. Without limiting the foregoing, all
damage to the Premises or to any other part of the Building (including exterior
window glass), or to any fixtures, equipment, sprinkler system and/or
appurtenances thereof, whether requiring structural or nonstructural repairs,
caused by or resulting from any act, omission, neglect or improper conduct of,
or Alterations made by, or the moving of Tenant's fixtures, furniture or
equipment into, within or out of the Premises by, Tenant or Tenant's agents,
contractors, subcontractors, employees, invitees or licensees (collectively, a
"Tenant Party"), and all damage to any portion of the Building's Systems
existing in the Premises, shall be repaired at Tenant's expense; provided,
however, that Tenant shall not be charged for any damage to the Building to the
extent that (A) the cost of repairing such damage is covered by the "all-risk"
insurance maintained by Landlord pursuant to Section 12.3 below or is recovered
by Landlord through Tenant's Operating Payment (as hereinafter defined) or (B)
such damage is caused by the active negligence or willful misconduct of Landlord
or Landlord's agents, contractors or employees. Such repairs shall be made by
(i) Tenant, at Tenant's expense, if the required repairs are nonstructural in
nature and do not affect any Building System and/or if any damaged portion of
the sprinkler system is contained within the Premises, or (ii) Landlord, at
Tenant's expense, if the required repairs are structural in nature, involve
replacement of exterior window glass (if such damage is so caused by any Tenant
Party) or affect any Building System or any portion of the sprinkler system not
contained within the Premises. All Tenant repairs shall be of a quality at least
equal to the original work or construction utilizing new construction materials
and shall be made in accordance with this Lease. Tenant shall give Landlord
prompt notice of any defective condition of which Tenant is aware in any
Building System located in, servicing or passing through the Premises. If Tenant
fails after ten (10) days' notice (or such shorter period as may be required in
an emergency) to proceed with due diligence to make any repairs required to be
made by Tenant, Landlord may make such repairs and all costs and expenses
incurred by Landlord on account thereof, plus interest thereon at the Interest
Rate, shall be paid by Tenant within ten (10) days after Landlord delivers to
Tenant an invoice therefor. Tenant hereby waives any and all rights under and
benefits of Subsection 1 of Section 1931, and Sections 1941 and 1942, of the
California Civil Code and any similar law, statute or ordinance now or hereafter
in effect.
Section 7.3 Vermin. Tenant shall, at its expense, cause the Premises
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to be exterminated, from time to time as Landlord may reasonably direct or
whenever there is evidence of infestation to Landlord's reasonable satisfaction,
by licensed exterminators approved by Landlord.
Section 7.4 Interruptions Due to Repairs. Landlord reserves the
----------------------------
right to make all changes, alterations, additions, improvements, repairs or
replacements to the Building, including the Building Systems which provide
services to Tenant, as Landlord deems necessary or desirable, provided that in
no event shall the level of any building service decrease in any material
respect from the level required of Landlord in this Lease as a result thereof
(other than temporary changes in the level of such services during the
performance of any such work by Landlord). Landlord shall use reasonable efforts
to minimize interference with Tenant's use and occupancy of the Premises during
the making of such repairs, alterations, additions, improvements, repairs or
replacements, provided that Landlord shall have no obligation to employ
contractors or labor at overtime or other premium pay rates or to incur any
other overtime costs or additional expenses whatsoever. Except as otherwise
provided in this Lease,
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there shall be no Rent abatement or allowance to Tenant for a diminution of
rental value, no actual or constructive eviction of Tenant, in whole or in part,
no relief from any of Tenant's other obligations under this Lease, and no
liability on the part of Landlord by reason of inconvenience, annoyance or
injury to business arising from Landlord, Tenant or others making, or failing to
make, any repairs, alterations, additions or improvements in or to any portion
of the Building or the Premises, or in or to fixtures, appurtenances or
equipment therein. Notwithstanding any contrary provision of this Lease, if
Tenant is prevented from using for the conduct of its business, and does not use
for the conduct of its business, the Premises or any material portion thereof,
for ten (10) consecutive Business Days (the "Eligibility Period") as a result of
(i) any construction, repair, maintenance or alteration performed by Landlord
after the Commencement Date and not necessitated by the negligence or willful
misconduct of any Tenant Party, or (ii) the failure in any material respect of
Landlord or its agents or contractors to provide to the Premises any of the
utilities and services required to be provided under this Lease (including
Articles 11 and 16 below) and not caused by the negligence or willful misconduct
of any Tenant Party or otherwise due to the occurrence of a casualty or
condemnation, (iii) any failure to provide access to the Premises and not caused
by the negligence or willful misconduct of any Tenant Party or otherwise due to
the occurrence of a casualty or condemnation, or (iv) because of the presence of
Hazardous Materials in, on or around the Building, the Premises or the Real
Property which were not caused or introduced by any Tenant Party and which
Hazardous Materials pose a material and significant health risk to occupants of
the Premises, then, in any and all such events, Tenant's obligation to pay Fixed
Rent, Tenant's Operating Payment and Tenant's Tax Payment shall be abated or
reduced, as the case may be, from and after the first (1st) day following the
last day of the Eligibility Period and continuing for such time that Tenant
continues to be so prevented from using for the conduct of its business, and
does not so use for the conduct of its business, the Premises or a material
portion thereof, in the proportion that the rentable square feet of the portion
of the Premises that Tenant is prevented from using, and does not so use, bears
to the total rentable square feet of the Premises. For purposes of this Section
7.4, Tenant shall not be deemed to have used the Premises for the conduct of its
business as a result of the presence of limited numbers of employees of Tenant
who are present within the Premises performing activities such as securing the
Premises, removing files and computers and engaging in other limited commercial
activities.
ARTICLE 8
TAXES AND OPERATING EXPENSES
Section 8.1 Definitions. For the purposes of this Article 8, the
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following terms shall have the meanings set forth below:
(a) "Assessed Valuation" shall mean the amount for which the
Real Property is assessed by the County Assessor of Santa Clara for the purpose
of imposition of Taxes.
(b) "Operating Expenses" shall mean the aggregate of all costs
and expenses (and taxes, if any, thereon) paid or incurred by or on behalf of
Landlord (whether directly or through independent contractors) in connection
with the operation, repair, maintenance and administration of the Building and
the Real Property, such as: (i) insurance
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premiums, (ii) the cost of electricity, gas, water, air conditioning and other
fuel and utilities, (iii) attorneys' fees and disbursements and auditing,
management and other professional fees and expenses, (iv) the cost to implement
any Transportation Demand Management measures required by the City of Cupertino,
and (v) any capital improvement as described in items (1) or (2) below which
shall be installed by Landlord in the Building. Such improvements shall be
amortized on a straight-line basis over the useful life thereof as reasonably
determined by Landlord in accordance with GAAP (as hereinafter defined) (with
interest accruing on the unamortized portion thereof at the Base Rate in effect
at the time such improvements are substantially completed per annum), and the
amount included in Operating Expenses in any calendar year of the Term (until
such improvement has been fully amortized) shall be equal to the annual
amortized amount. A capital improvement shall be included in Operating Expenses
only if it either (1) results in a reduction in Operating Expenses (as for
example, a labor-saving improvement), provided, the amount included in Operating
Expenses in any calendar year of the Term shall not exceed an amount equal to
the savings resulting from the installation and operation of such improvement,
and/or (2) is made during any calendar year of the Term in compliance with
Requirements (but excluding compliance with the terms and provisions of any
Requirement in effect on the Commencement Date with respect to the Landlord
Compliance Items (as defined in the Workletter Agreement), it being understood
that Landlord's cost of complying with any such existing Requirement with
respect to the Landlord Compliance Items (but not the cost of complying with any
material modifications of any such existing Requirement with respect to the
Landlord Compliance Items occurring after the Commencement Date) is not to be
included in Operating Expenses). Operating Expenses shall not include any
Excluded Expenses.
(c) "Statement" shall mean a statement setting forth (1) the
Taxes payable for the applicable calendar year, or (2) the Operating Expenses
payable for the preceding calendar year.
(d) "Taxes" shall mean (i) all real estate taxes, assessments,
sewer and water rents, rates and charges and other governmental levies,
impositions or charges, whether general, special, ordinary, extraordinary,
foreseen or unforeseen, which may be assessed, levied or imposed upon all or any
part of the Real Property, and (ii) all expenses (including reasonable
attorneys' fees and disbursements and experts' and other witnesses' fees)
incurred in contesting any of the foregoing or the Assessed Valuation of all or
any part of the Real Property to the extent the prosecution of such contest was
commercially reasonable. Taxes shall not include (x) interest or penalties
incurred by Landlord as a result of Landlord's late payment of Taxes, except for
interest payable in connection with the installment payment of assessments
pursuant to the next sentence, (y) any franchise, net income, excess profits,
gift, capital stock, inheritance, succession or estate taxes imposed upon
Landlord or (2) any surcharges imposed by any Governmental Authority upon the
Real Property respecting cleanup or remediation of Hazardous Materials and
characterized as a tax. If Landlord elects to prepay any assessment or to pay
any assessment in fewer annual installments than the maximum number permitted by
law, then for the purposes of this Article 8, (i) such assessment shall be
deemed to have been divided and to be payable in the maximum number of
installments permitted by law, and (ii) there shall be deemed included in Taxes
for each calendar year of the Term the installments of such assessment that
would have become payable during such calendar year, together with interest that
would have become payable during such calendar year on such installments and on
all such installments
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thereafter, as provided by law, all as if such assessment had been so divided.
If at any time the methods of taxation prevailing on the date hereof shall be
altered so that in lieu of or as an addition to the whole or any part of Taxes,
there shall be assessed, levied or imposed (1) a tax, assessment, levy,
imposition or charge based on the income or rents received from the Real
Property whether or not wholly or partially as a capital levy or otherwise, (2)
a tax, assessment, levy, imposition or charge measured by or based in whole or
in part upon all or any part of the Real Property and imposed upon Landlord, (3)
a license fee measured by the rents, or (4) any other tax, assessment, levy,
imposition, charge or license fee however described or imposed, then all such
taxes, assessments, levies, impositions, charges or license fees or the part
thereof so measured or based shall be deemed to be Taxes, provided that any tax,
assessment, levy, imposition or charge imposed on income from the Real Property
shall be calculated as if the Real Property were the only asset of Landlord.
Section 8.2 (a) Tenant's Tax Payment. During each calendar year of
--------------------
the Term, or portion thereof, Tenant shall pay to Landlord Tenant's
Proportionate Share of the amount of Taxes payable or incurred by Landlord
during such calendar year ("Tenant's Tax Payment"). On or about the start of
each calendar year of the Term, Landlord shall furnish to Tenant a Statement of
the Taxes. Tenant shall pay Tenant's Tax Payment to Landlord, in monthly
installments, on the first day of each month during each calendar year, an
amount equal to one twelfth of Tenant's Tax Payment due for each calendar year.
If there is any increase or decrease in Taxes payable for any calendar year,
whether levied during or after such calendar year, Landlord may furnish a
revised Statement for such calendar year, Tenant's Tax Payment for such calendar
year shall be adjusted and, within ten (10) Business Days after Tenant's receipt
of such revised Statement (a) with respect to any increase in Taxes payable for
such calendar year, Tenant shall pay such increase in Tenant's Tax Payment to
Landlord, or (b) with respect to any decrease in Taxes payable for such calendar
year, Landlord shall credit such decrease in Tenant's Tax Payment against the
next installment of Rent payable by Tenant or, to the extent any such credit is
determined and/or received by Landlord following the expiration or earlier
termination of the Term for reasons other than following an Event of Default,
the amount thereof shall be paid to Tenant. If, during the Term, Landlord elects
to collect Tenant's Tax Payments, in full or in installments on any date or
dates other than as presently required, then following Landlord's notice to
Tenant, Tenant's Tax Payments shall be correspondingly revised. Any rebates,
discounts or like items actually received by Landlord shall be credited to
reduce the amount of the Taxes.
(b) If the applicable real estate tax fiscal year is changed,
Taxes for such fiscal year shall be apportioned on the basis of the number of
days in such fiscal year included in the particular calendar year for the
purpose of making the computations under this Section.
(c) Only Landlord shall be eligible to institute proceedings to
reduce the Assessed Valuation of the Real Property and the filing of any such
proceeding by Tenant without Landlord's prior written consent shall constitute
an Event of Default. Upon Tenant's request and provided it is commercially
reasonable to do so, Landlord shall institute all appropriate proceedings to
seek a reduction of the Assessed Valuation of the Real Property and to otherwise
contest the amount, validity or applicability of any Taxes. In any such case, or
if any such proceedings are prosecuted at other than Tenant's request, Tenant's
Tax Payment shall include Tenant's Proportionate Share of the cost reasonably
incurred by Landlord in initiating and
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prosecuting such proceedings in good faith, to the extent such costs have not
been recovered by Landlord through Tenant's Operating Payment. If Landlord
receives a refund of Taxes for any calendar year of the Term, Landlord shall, at
its election, either pay to Tenant, or credit against subsequent payments of
Rent due hereunder, an amount equal to Tenant's Proportionate Share of the
refund, net of any expenses incurred by Landlord in achieving such refund, which
amount shall not exceed Tenant's Tax Payment paid for such calendar year;
provided, however, that Landlord shall pay to Tenant the portion of Tenant's
Proportionate Share of any such refund that exceeds the amount of the then
monthly installment of Fixed Rent hereunder. Except as otherwise expressly
provided in this Lease, Landlord shall not be obligated to file any application
or institute any proceeding seeking a reduction in Taxes or the Assessed
Valuation.
(d) Tenant shall be obligated to make Tenant's Tax Payment
regardless of whether Tenant may be exempt from the payment of any taxes by
reason of Tenant's diplomatic or other tax exempt status.
(e) If the Commencement Date is a date other than January 1, then
the amount of Taxes payable by Tenant during the month and year in which the
Term of this Lease commences shall be apportioned on the basis of the number of
days in the period from the Commencement Date to December 31 shall bear to the
total number of days in such calendar year. If the Expiration Date shall occur
on a date other than December 31, any Additional Rent payable by Tenant to
Landlord under this Section 8.2 for the calendar year in which such Expiration
Date occurs shall be apportioned on the basis of the number of days in the
period from January 1 to the Expiration Date shall bear to the total number of
days in such calendar year. In the event of the expiration or earlier
termination of this Lease, any Additional Rent under this Section 8.2 shall be
paid or adjusted within thirty (30) days after submission of the Statement. The
rights and obligations of Landlord and Tenant under the provisions of this
Section 8.2 with respect to any Additional Rent shall survive the expiration or
earlier termination of this Lease.
(f) Tenant shall be responsible for any applicable occupancy or
rent tax now in effect or hereafter enacted and, if payable by Landlord, Tenant
shall promptly pay such amounts to Landlord, upon Landlord's demand, as
Additional Rent.
Section 8.3 Tenant's Operating Payment. (a) Tenant shall pay to
--------------------------
Landlord Tenant's Proportionate Share of Operating Expenses paid or incurred by
Landlord during each calendar year of the Term ("Tenant's Operating Payment").
For each calendar year of the Term, Landlord shall furnish to Tenant a written
statement setting forth Landlord's good faith reasonable estimate of Tenant's
Operating Payment for such calendar year, based upon such year's budget. Tenant
shall pay to Landlord on the first day of each month during such calendar year
an amount equal to one-twelfth of Landlord's estimate of Tenant's Operating
Payment for such calendar year. If, however, Landlord shall furnish any such
estimate for a calendar year subsequent to the commencement thereof, then (a)
until the first day of the month following the month in which such estimate is
furnished to Tenant, Tenant shall pay to Landlord on the first day of each month
an amount equal to the monthly sum payable by Tenant to Landlord under this
Section 8.3 during the last month of the preceding calendar year, (b) promptly
after such estimate is furnished to Tenant or together therewith, Landlord shall
give notice to Tenant stating whether the installments of Tenant's Operating
Payment previously made for such calendar year
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were greater or less than the installments of Tenant's Operating Payment to be
made for such calendar year in accordance with such estimate, and (i) if there
shall be a deficiency, Tenant shall pay the amount thereof within ten (10)
Business Days after demand therefor, or (ii) if there shall have been an
overpayment, Landlord shall credit the amount thereof against subsequent
payments of Rent due hereunder or, to the extent any such credit is determined
following the expiration or earlier termination of the Term for reasons other
than following an Event of Default, the amount thereof shall be paid to Tenant,
and (c) on the first day of the month following the month in which such estimate
is furnished to Tenant, and on the first day of each month thereafter throughout
the remainder of such calendar year, Tenant shall pay to Landlord an amount
equal to one-twelfth of Tenant's Operating Payment shown on such estimate.
(b) On or before May 1st of each calendar year of the Term,
Landlord shall furnish to Tenant a Statement for the immediately preceding
calendar year. Each such Statement shall be accompanied by a computation of
Operating Expenses for the Building prepared by Landlord's managing agent. If
the Statement shall show that the sums paid by Tenant under Section 8.3(a)
exceeded the actual amount of Tenant's Operating Payment for such calendar year,
Landlord shall credit the amount of such excess against subsequent payments of
Rent due hereunder. If the Statement for such calendar year shall show that the
sums so paid by Tenant were less than Tenant's Operating Payment for such
calendar year, Tenant shall pay the amount of such deficiency within ten (10)
Business Days after Tenant's receipt of the Statement.
(c) If the Commencement Date is a date other than January 1, then
the amount of Operating Expenses payable by Tenant during the month and year in
which the Term of this Lease commences shall be apportioned on the basis of the
number of days in the period from the Commencement Date to December 31 shall
bear to the total number of days in such calendar year. If the Expiration Date
shall occur on a date other than December 31, any Additional Rent under this
Section 8.3 for the calendar year in which such Expiration Date shall occur
shall be apportioned on the basis of the number of days in the period from
January 1 to the Expiration Date. Upon the expiration or earlier termination of
this Lease, any Additional Rent under this Article 8 shall be paid or adjusted
within thirty (30) days after submission of the Statement. The rights and
obligations of Landlord and Tenant under the provisions of this Section 8.3 with
respect to any Additional Rent shall survive the expiration or earlier
termination of this Lease.
Section 8.4 Accounting Methods.
------------------
The determination by Landlord of the amount of Operating Expenses and
Taxes incurred by Landlord shall be made on an accrual basis, consistently
applied.
Section 8.5 Non-Waiver; Disputes. (a) Landlord's failure to render
--------------------
any Statement on a timely basis with respect to any calendar year shall not
prejudice Landlord's right to thereafter render a Statement with respect to such
calendar year or any subsequent calendar year, nor shall the rendering of a
Statement prejudice Landlord's right to thereafter render a corrected Statement
for that calendar year.
(b) Each Statement sent to Tenant shall be conclusively binding
upon Tenant unless Tenant shall (i) within thirty (30) days after such Statement
is sent, pay to Landlord the amount set forth in such Statement, without
prejudice to Tenant's right to dispute
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such Statement, and (ii) within ninety (90) days after such Statement is sent,
send a written notice to Landlord objecting to such Statement and specifying the
reasons that such Statement is claimed to be incorrect. Tenant agrees that
Tenant will not employ, in connection with any dispute under this Lease, any
person who is to be compensated in whole or in part, on a contingency fee basis.
If the parties are unable to resolve any dispute as to the correctness of such
Statement within 30 days following such notice of objection, either party may
refer the issues raised to an independent firm of certified public accountants
which is a so-called "Big-Five" public accounting firm selected by Landlord and
reasonably acceptable to Tenant, and the decision of such accountants shall be
conclusively binding upon Landlord and Tenant. Landlord shall not unreasonably
withhold its consent to a proposal received from Tenant that such audit be
performed by a regional accounting firm with demonstrable experience in the
appropriate accounting procedures and practices respecting the operation,
maintenance, repair and administration of commercial office buildings. In
connection therewith, Tenant and such accountants shall execute and deliver to
Landlord a confidentiality agreement, in form and substance reasonably
satisfactory to Landlord, whereby such parties agree not to disclose to any
third party any of the information obtained in connection with such review.
Tenant shall pay the fees and expenses relating to such procedure, unless such
accountants shall determine that Landlord overstated Operating Expenses by more
than three percent (3%) for such Comparison Year, as finally determined, in
which case Landlord shall pay such fees and expenses. If such audit reveals that
Landlord has over-charged or under-charged Tenant, then within thirty (30) days
after the results of such audit are made available to Landlord, Landlord or
Tenant, as applicable, shall reimburse to the other party the amount of such
over-charge or under-charge, as the case may be, together with interest thereon
at the Base Rate calculated from the end of the year to which such Statement
relates until the date of such reimbursement.
Section 8.6 Net Lease. This Lease is designed as a "net lease," and
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the provisions in this Lease for payment by Tenant of its share of Operating
Expenses and Taxes are intended to pass on to Tenant and reimburse Landlord for
Tenant's Proportionate Share of all costs and expenses incurred in connection
with the management, operation, maintenance or repair of the Building except as
otherwise expressly herein provided.
ARTICLE 9
REQUIREMENTS OF LAW
Section 9.1 (a) Tenant's Compliance. Except as otherwise provided
-------------------
in this Lease, Tenant, at its expense, shall comply (or cause to be complied)
with all Requirements applicable to the Premises, regardless of whether imposed
by their terms upon Landlord or Tenant. All repairs and alterations to the
Premises, whether structural or nonstructural, ordinary or extraordinary,
required to be made to cause the Premises to comply with any Requirements and
which arise as a result of (i) the specific manner and nature of Tenant's use or
occupancy of the Premises, as distinct from general office use, (ii) Alterations
made by Tenant in the Premises or (iii) a breach by Tenant of any provisions of
this Lease, shall be made by Tenant, at Tenant's expense and in compliance with
Article 5, if such repairs or alterations are nonstructural and do not affect
any Building System, or by Landlord, at Tenant's expense, if such repairs or
alterations are structural or affect any Building System. If Tenant obtains
knowledge of any
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failure to comply with any Requirements applicable to the Premises, Tenant shall
give Landlord prompt written notice thereof.
(b) Hazardous Materials. Tenant shall not cause, nor permit any
-------------------
other Tenant Party to cause, (i) any Hazardous Materials to be brought into the
Building, (ii) the storage or use of Hazardous Materials in any manner not
permitted by any Requirements, or (iii) the escape, disposal or release of any
Hazardous Materials within or in the vicinity of the Building. Nothing herein
shall be deemed to prevent Tenant's use of any Hazardous Materials customarily
used in the ordinary course of office work, provided such use is in accordance
with all Requirements. Tenant shall be responsible, at its expense, for all
matters directly or indirectly based on, arising or resulting from the actual or
alleged presence of Hazardous Materials in the Premises or in the Building which
is caused by any Tenant Party. Tenant shall provide to Landlord copies of all
communications received by Tenant with respect to any Requirements relating to
Hazardous Materials, and/or any claims made in connection therewith. Landlord or
its agents may perform environmental inspections of the Premises at any time
subject to the provisions of Article 17 hereof. The covenants contained in this
Subsection shall survive the expiration or earlier termination of this Lease.
(c) Landlord's Compliance. Landlord shall comply with (or cause
---------------------
to be complied with) all Requirements applicable to the Building (including the
Premises) which are not the obligation of Tenant hereunder or pursuant to the
Workletter Agreement, to the extent that non-compliance would materially impair
Tenant's use and occupancy of the Premises and Tenant's ability to conduct its
business in the Premises for office use; and, except with respect to
Requirements which are in effect as of the Commencement Date applicable to the
Landlord Compliance Items (but not excepting any subsequent material
modifications thereto), the cost thereof shall be included in Operating Expenses
pursuant to Section 8.1(e) of this Lease.
(d) Landlord's Insurance. Tenant shall not cause, nor shall
--------------------
Tenant permit any other Tenant Party to cause, any action or condition that
would (i) violate applicable rules, regulations and guidelines of the Fire
Department, Fire Insurance Rating Organization or any other authority having
jurisdiction over the Building, (ii) cause an increase in the premiums of fire
insurance then covering the Building over that payable with respect to
comparable first-class office buildings or (iii) result in insurance companies
of good standing refusing to insure the Building or any property therein in
amounts and against risks as reasonably determined by Landlord. If the fire
insurance premiums increase as a result of Tenant's failure to comply with the
provisions of this Article 9, Tenant shall promptly cure such failure and shall
reimburse Landlord, as Additional Rent, for the increased fire insurance
premiums paid by Landlord as a result of such failure by Tenant. In any action
or proceeding to which Landlord and Tenant are parties, a schedule or "make up"
of rates for the Building or the Premises issued by the appropriate Fire
Insurance Rating Organization, or other body fixing such fire insurance rates,
shall be conclusive evidence of the fire insurance rates then applicable to the
Building.
Section 9.2 Fire Alarm System; Sprinklers. Tenant shall extend, add
-----------------------------
to and modify the fire-alarm and life-safety and sprinkler systems in the
Premises, utilizing Landlord-approved contractors, in accordance with this
Lease, the Rules and Regulations and all Requirements, if and to the extent such
system has not been installed in the Premises prior to the Commencement Date. If
the Fire Insurance Rating Organization or any Governmental Authority
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or any of Landlord's insurers requires or recommends any modifications and/or
Alterations be made or any additional equipment be supplied in connection with
the sprinkler system or fire alarm and life-safety system serving the Building
or the Premises by reason of Tenant's business, or the location of the
partitions, trade fixtures, or other contents of the Premises, Landlord (to the
extent outside of the Premises) or Tenant (to the extent within the Premises)
shall make such modifications and/or Alterations, and supply such additional
equipment, in either case at Tenant's expense.
ARTICLE 10
SUBORDINATION
Section 10.1 Subordination and Attornment. (a) Landlord represents
----------------------------
that, as of the Effective Date, there are no existing Superior Leases and no
existing Mortgages. Provided any such Mortgagee or Lessor has executed and
delivered a Nondisturbance Agreement (as hereinafter defined), this Lease shall
be subject and subordinate to any Mortgages and Superior Leases hereafter
entered into by Landlord, and, at the request of any Mortgagee or Lessor, Tenant
shall attorn to such Mortgagee or Lessor, its successors in interest or any
purchaser in a foreclosure sale.
(b) If a Lessor or Mortgagee or any other person or entity shall
succeed to the rights of Landlord under this Lease, whether through possession
or foreclosure action or the delivery of a new lease or deed, then at the
request of the successor landlord and upon such successor landlord's written
agreement to accept Tenant's attornment and to recognize Tenant's interest under
this Lease, Tenant shall be deemed to have attorned to and recognized such
successor landlord as Landlord under this Lease. The provisions of this Article
are self-operative and require no further instruments to give effect hereto;
provided, however, that Tenant shall promptly execute and deliver any instrument
that such successor landlord may reasonably request (i) evidencing such
attornment, (ii) setting forth the terms and conditions of Tenant's tenancy, and
(iii) containing such other terms and conditions as may be required by such
Mortgagee or Lessor, provided such terms and conditions do not materially
increase Tenant's obligations or materially and adversely affect the rights of
Tenant under this Lease. Upon such attornment this Lease shall continue in full
force and effect as a direct lease between such successor landlord and Tenant
upon all of the terms, conditions and covenants set forth in this Lease except
that such successor landlord shall not be:
(i) liable for any act or omission of Landlord (except to
the extent such act or omission continues beyond the date when such successor
landlord succeeds to Landlord's interest and Tenant gives notice of such act or
omission);
(ii) subject to any defense, claim, counterclaim, set-off
or offsets which Tenant may have against Landlord;
(iii) bound by any prepayment of more than one month's
Rent to any prior landlord;
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(iv) bound by any obligation to make any payment to
Tenant which was required to be made prior to the time such successor landlord
succeeded to Landlord's interest;
(v) bound by any obligation to perform any work or to
make improvements to the Premises except for (x) repairs and maintenance
required to be made by Landlord under this Lease, and (y) repairs to the
Premises as a result of damage by fire or other casualty or a partial
condemnation pursuant to the provisions of this Lease, but only to the extent
that such repairs can reasonably be made from the net proceeds of any insurance
or condemnation awards, respectively, actually made available to such successor
landlord;
(vi) bound by any modification, amendment or renewal of
this Lease made without successor landlord's consent;
(vii) liable for the repayment of any security deposit or
surrender of any letter of credit, unless and until such security deposit
actually is paid or such letter of credit is actually delivered to such
successor landlord; or
(viii) liable for the payment of any unfunded tenant
improvement allowance, refurbishment allowance or similar obligation.
Section 10.2 Mortgage or Superior Lease Defaults. Tenant shall not
-----------------------------------
cause a default under any Superior Lease or Mortgage, or omit to do anything
that Tenant is obligated to do under the terms of this Lease so as to cause
Landlord to be in default thereunder. Any Mortgagee may elect that this Lease
shall have priority over the Mortgage that it holds and, upon notification to
Tenant by such Mortgagee, this Lease shall be deemed to have priority over such
Mortgage, regardless of the date of this Lease. In connection with any financing
of the Real Property, the Building or of the interest of the lessee under any
Superior Lease, Tenant shall consent to any reasonable modifications of this
Lease requested by any lending institution, provided such modifications do not
materially increase the obligations, or materially and adversely affect the
rights, of Tenant under this Lease.
Section 10.3 Tenant's Termination Right. As long as any Superior
--------------------------
Lease or Mortgage shall exist, Tenant shall not seek to terminate this Lease by
reason of any act or omission of Landlord (a) until Tenant shall have given
notice of such act or omission to all Lessors and/or Mortgagees, and (b) until a
reasonable period of time (not to exceed an additional thirty (30) days beyond
the grace period otherwise afforded Landlord) shall have elapsed following the
giving of notice of such default and the expiration of any applicable notice or
grace periods (unless such act or omission is not capable of being remedied
within a reasonable period of time), during which period such Lessors and/or
Mortgagees shall have the right, but not the obligation, to remedy such act or
omission and thereafter diligently proceed to so remedy such act or obligation.
If any Lessor or Mortgagee elects to remedy such act or omission of Landlord,
Tenant shall not seek to terminate this Lease so long as such Lessor or
Mortgagee is proceeding with reasonable diligence to effect such remedy.
Section 10.4 Provisions. The provisions of this Article shall (a)
----------
inure to the benefit of Landlord, any future owner of the Building or the Real
Property, Lessor or Mortgagee
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and any sublessor thereof and (b) apply notwithstanding that, as a matter of
law, this Lease may terminate upon the termination of any such Superior Lease or
Mortgage.
Section 10.5 Non-Disturbance Agreements. Notwithstanding any
--------------------------
contrary provision of this Article 10, a condition precedent to the
subordination of this Lease to any future Mortgage or Superior Lease is that
such future Mortgagee or Lessor shall execute and deliver to Tenant a then
commercially-reasonable non-disturbance and attornment agreement in the form
prescribed by such Mortgagee or Lessor ("Nondisturbance Agreement"). Any such
Nondisturbance Agreement shall provide that, so long as no Event of Default is
continuing under this Lease, no foreclosure of any such Mortgage and no
termination of any such Superior Lease shall disturb Tenant's right of
possession hereunder, and that such future Mortgagee or Lessor, or their
respective successors in interest (including, without limitation, foreclosure
sale purchasers) shall recognize and be bound by this Lease, subject only to the
limitations in Section 10.1(b)(i) through (viii).
ARTICLE 11
SERVICES
Section 11.1 Elevators. Landlord, at its expense, shall provide
---------
passenger elevator service to the Premises at all times.
Section 11.2 Heating, Ventilation and Air Conditioning. (a) Landlord
-----------------------------------------
shall furnish to the Premises heating, ventilation and air-conditioning ("HVAC")
in accordance with the standards set forth in Exhibit E on all Business Days
from 8:00 a.m. to 6:00 p.m. and from 8:00 a.m. to 1:00 p.m. on Saturdays.
Landlord, at its expense, shall repair and maintain the HVAC System (as
hereinafter defined) in good working order, provided repairs required as a
result of the negligence or willful misconduct of Tenant, its agents or
employees, shall be performed at Tenant's expense. Landlord shall have access to
all air-cooling, fan, ventilating and machine rooms and electrical closets and
all other mechanical installations of Landlord (collectively, "Mechanical
Installations"), and Tenant shall not construct partitions or other obstructions
which may interfere with Landlord's access thereto or the moving of Landlord's
equipment to and from the Mechanical Installations. Neither Tenant, nor its
agents, employees or contractors shall at any time enter the Mechanical
Installations or tamper with, adjust, or otherwise affect such Mechanical
Installations.
(b) Landlord shall not be responsible if the normal operation of the
Building System providing HVAC to the Premises (the "HVAC System") shall fail to
provide cooled or heated air, as the case may be, in accordance with the
specifications set forth in Exhibit E (the "Design Standards") by reason of (i)
any machinery or equipment installed by or on behalf of Tenant or any person
claiming through or under Tenant, which shall have an electrical load in excess
of the average electrical load and human occupancy factors for the HVAC System
as designed, as the case may be, (ii) any rearrangement of partitioning or other
Alterations (including the Improvements) made or performed by or on behalf of
Tenant or any person claiming through or under Tenant or (iii) any failure by
Tenant to install, if missing, blinds or shades on all windows, which blinds and
shades are subject to Landlord's approval, or to keep all of the operable
windows in the Premises closed. In addition, Tenant acknowledges
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that the HVAC System may be unable to conform to the Design Standards in
circumstances where Tenant and its employees fail to lower window blinds when
necessary because of the sun's position. Tenant at all times shall cooperate
fully with Landlord and shall abide by the rules and regulations which Landlord
may reasonably prescribe for the proper functioning and protection of the HVAC
System.
Section 11.3 Overtime HVAC. Landlord shall not be required to
-------------
furnish any HVAC service during periods other than for the hours and days set
forth in Section 11.2 hereof ("Overtime Periods") unless Tenant delivers notice
to Landlord's property management office requesting such services at least
twenty-four (24) hours prior to the time at which such services are to be
provided, but Landlord shall use reasonable efforts (without obligation to incur
any additional cost) to arrange such service on such shorter notice as Tenant
shall provide. If HVAC is furnished to the Premises during Overtime Periods,
then the direct utility costs incurred by Landlord thereby shall be includable
within Operating Expenses, but Tenant shall not be obligated to reimburse
Landlord for any increased depreciation to the HVAC System resulting thereby.
Section 11.4 Cleaning. Landlord shall cause the Premises (excluding
--------
any portions thereof used for the storage, preparation, service or consumption
of food or beverages) to be cleaned, substantially in accordance with the
standards set forth in Exhibit F. Any areas of the Premises requiring additional
cleaning such as areas used for preparation or consumption of food, shall be
cleaned, at Tenant's expense, by Landlord's employees or Landlord's contractor,
at rates which shall be competitive with rates of other cleaning contractors
providing services to first-class office buildings in Cupertino, California.
Landlord and its cleaning contractor and their respective employees shall have
access to the Premises at all times except between 8:00 A.M. and 5:30 P.M. on
Business Days.
Section 11.5 Water. Landlord, at Landlord's expense, shall, subject
-----
to Unavoidable Delays, provide at all times to the Premises hot and cold water
for drinking, cleaning, break-room kitchen and lavatory purposes. If Tenant
requires or uses water or steam for any additional purposes, Landlord shall use
its commercially reasonable efforts (subject to any Requirements which may limit
water use) to supply the same. Tenant shall pay for the reasonable charges of
Landlord for the water furnished based upon actual cost. Tenant shall pay also
to Landlord Landlord's reasonable charge for any required pumping or heating
thereof, and any sewer rent, tax and/or charge now or hereafter assessed or
imposed upon the Premises or the Real Property pursuant to any Requirement.
Section 11.6 Refuse and Rubbish Removal. Landlord shall provide
--------------------------
refuse and rubbish removal services at the Premises for ordinary office refuse
and rubbish pursuant to regulations reasonably established by Landlord. Tenant
shall pay to Landlord, within 10 Business Days of receipt of an invoice
therefor, Landlord's reasonable charge for such removal to the extent that the
refuse generated by Tenant exceeds the refuse and rubbish customarily generated
by executive and general office tenants. Tenant shall not dispose of any refuse
and rubbish in the public areas of the Building, and if Tenant does so, Tenant
shall be liable for Landlord's reasonable charge for such removal. Tenant shall
cause its employees, agents, contractors and business visitors to observe such
additional rules and regulations regarding rubbish removal and/or recycling as
Landlord may, from time to time, reasonably impose.
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Section 11.7 Service Interruptions. Landlord reserves the right
---------------------
to suspend any service when necessary, by reason of Unavoidable Delays,
accidents or emergencies, or for repairs, alterations or improvements which, in
Landlord's reasonable judgment, are necessary or appropriate until such
Unavoidable Delay, accident or emergency shall cease or such repairs,
alterations or improvements are completed and Landlord shall not be liable for
any interruption, curtailment or failure to supply services. Landlord shall use
reasonable efforts to restore such service, remedy such situation and minimize
any interference with Tenant's business, provided that Landlord shall have no
obligation to employ contractors or labor at overtime or other premium pay
rates, or to incur any other overtime costs or additional expenses whatsoever.
The exercise of any such right or the exercise of any such right or the
occurrence of any such failure by Landlord shall not constitute an actual or
constructive eviction, in whole or in part, entitle Tenant to any compensation,
abatement or diminution of Rent, relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Landlord or its agents by reason
of inconvenience to Tenant, or interruption of Tenant's business, or otherwise.
In case of any interruption in the services called for under this Article 11
which continues beyond the Eligibility Period, Tenant shall have the rights set
forth in Section 7.4 above.
Section 11.8 Non-essential Service Contractors. If Tenant reasonably
---------------------------------
believes that the contractor selected by Landlord for the provision of
landscaping, janitorial, refuse removal or security services for the Premises
(any such service, a "Non-essential Service") is not performing any such Non-
essential Service consistent with the standards of other first-class office
buildings comparable to the Building, or is providing such services at a cost
which exceeds that then being charged in Santa Clara County by other comparable
service providers performing comparable services, or poses a threat to any
Tenant Party through suspected intentional misconduct or is reasonably suspected
by Tenant to have committed acts of theft or vandalism within the Premises, then
Tenant shall so notify Landlord in writing. If, after Landlord has been afforded
a reasonable opportunity to correct any such reported service deficiency, Tenant
reasonably believes that such deficiency has not been corrected, then Tenant
shall have the right, following thirty (30) days' written notice to Landlord, to
engage directly, at Tenant's sole cost and expense, an alternate service
provider for such purportedly deficient Non-essential Service. In any such
event, Landlord shall terminate the services of the contractor previously
providing such Non-essential Service and Operating Expenses shall, henceforth,
exclude any charge respecting such Non-essential Service; provided, however,
that (a) Tenant shall promptly provide to Landlord copies of all invoices from
such alternate Non-essential Service provider and (b) all such invoiced costs
shall be included by Landlord in "Operating Expenses" solely for the purpose of
determining the amount of the Management Fee (as defined in Exhibit B). In
addition, provided that Portal Software, Inc., or a Related Entity (as
hereinafter defined) is the sole tenant of the Building, Landlord shall
reasonably consider any request by Tenant that Landlord utilize the services of
a different Non-essential Service provider. Nothing set forth in this Section
11.8 shall be deemed to limit or abridge Tenant's right to arrange for the
provision of other auxiliary services to the Premises such as the presence of
day porters, maids, flower services or snack suppliers.
Section 11.9 Emergency Generator. From and after the date
-------------------
Landlord tenders possession of the Premises to Tenant through the Term of this
Lease, and any renewals or extensions thereof, but only for so long as Portal
Software, Inc., or a Related Entity is the sole tenant of the Building, Landlord
shall grant to Tenant the exclusive right (but not the obligation)
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to (i) use the existing emergency generator and any and all related existing
switching gear located in the Building's emergency generator plant (the
"Emergency Generator") and (ii) allocate the use of the electrical capacity of
such Emergency Generator between the Premises and those certain premises
occupied by Tenant pursuant to the CCCV Lease (the "CCCV Premises") at Tenant's
discretion. Landlord agrees to cooperate with Tenant, at Tenant's sole cost and
expense, with Tenant's efforts, conducted at Tenant's sole cost and expense, to
(y) obtain access rights ("Transmission Easement") across any real property
owned or controlled by third parties located between the Premises and the CCCV
Premises and (z) construct any and all conduits, cabling and junction boxes or
other electrical apparatus necessary to link the Premises with the CCCV Premises
for purposes of transmitting backup power from the Emergency Generator
("Transmission Facilities"), all of which Transmission Facilities shall be
installed pursuant to the terms of Article 5 and are hereby deemed to be
Alterations that affect a Building System; provided that, as Landlord's sole
contribution toward the cost of installing the Transmission Facilities, if
Tenant so installs the Transmission Facilities, Landlord shall grant to Tenant a
credit against the Review Fee payable by Tenant pursuant to Section 1(g) of the
Workletter Agreement, which credit shall be in the amount of Seventeen Thousand
Dollars ($17,000.00). Landlord hereby disclaims any responsibility whatsoever
for the condition of the Emergency Generator or its fitness or suitability for
Tenant's use or intended purpose and Tenant shall accept the Emergency Generator
in its "as is" condition with all faults, including any deferred maintenance
and, except to the extent caused by the active negligence or willful misconduct
of Landlord or Landlord's Agent, but subject in all cases to the provisions of
Section 31.18 of this Lease, Tenant hereby assumes all risks arising from
Tenant's use of the Emergency Generator. Tenant acknowledges that Landlord makes
no representation nor warranty concerning Tenant's ability to obtain the
Transmission Easement or any approvals from Governmental Authorities necessary
to construct the Transmission Facilities. If Tenant so elects to use the
Emergency Generator, Tenant shall be solely responsible for performing any
maintenance or repair to the Emergency Generator which may be necessary or
required to address any deferred maintenance or otherwise necessary to bring the
Emergency Generator up to proper running order in compliance with all
Requirements. In addition to the foregoing, during any such periods as Tenant
elects to so utilize the Emergency Generator, Tenant shall also be responsible
for performing, or causing to be performed, at Tenant's sole cost and expense,
(1) weekly testing of the Emergency Generator; (2) periodic replenishing of any
fuel consumed by the Emergency Generator during any periods in which it is run;
and (3) any and all inspections, maintenance or repairs to the Emergency
Generator necessary to keep it in proper running order consistent with standards
applicable to office buildings located in Cupertino, California comparable to
the Building.
ARTICLE 12
INSURANCE; PROPERTY LOSS OR DAMAGE; REIMBURSEMENT
Section 12.1 Tenant's Insurance. (a) Tenant, at its expense,
------------------
shall obtain and keep in full force and effect during the Term:
(i) a policy of commercial general liability insurance on an
occurrence basis against claims for personal injury, death and/or property
damage occurring in or
25
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about the Premises or the Building, under which Tenant is named as the insured
and Landlord, Landlord's managing agent and any Lessors and any Mortgagees whose
names shall have been furnished by Landlord to Tenant from time to time are
named as additional insureds, which insurance shall provide primary coverage
without contribution from any other insurance carried by or for the benefit of
Landlord, Landlord's managing agent or any Lessors or Mortgagees named as
additional insureds, and Tenant agrees to obtain blanket broad-form contractual
liability coverage to insure its indemnity obligations set forth in Article 30
hereof. The minimum limits of liability shall be a combined single limit with
respect to each occurrence in an amount of not less than Five Million Dollars
($5,000,000.00), provided, however, that Landlord shall retain the right to
require Tenant to increase such coverage on no more than two (2) occasions
during the initial Term of this Lease to that amount of insurance which in
Landlord's reasonable judgment is then being customarily required by landlords
for similar office space in first-class buildings in Cupertino, California or is
otherwise required by any Lessor or Mortgagee. The deductible or self insured
retention for such policy shall in no event exceed Ten Thousand Dollars
($10,000.00) at any time. If the aggregate limit applying to the Premises is
reduced by the payment of a claim or establishment of a reserve equal to or
greater than 50% of the annual aggregate, Tenant shall immediately arrange to
have the aggregate limit restored by endorsement to the existing policy or the
purchase of an additional insurance policy unless, in Landlord's reasonable
judgment, Tenant maintains sufficient excess liability insurance to satisfy the
liability requirements of this Lease without the reinstatement of the aggregate
limit;
(ii) insurance against loss or damage by fire, and such other
risks and hazards as are insurable under then available standard forms of "all
risk" property insurance policies with extended coverage, insuring Tenant's
Property, and all Specialty Alterations for the full insurable value thereof or
replacement cost value thereof, having a deductible amount, if any, as
reasonably determined by Landlord;
(iii) during the performance of any Alteration, until
completion thereof, Builder's risk insurance on an "all risk" basis and on a
completed value form including a Permission to Complete and Occupy endorsement,
for full replacement value covering the interest of Landlord and Tenant (and
their respective contractors and subcontractors), any Mortgagee and any Lessor
in all work incorporated in the Building and all materials and equipment in or
about the Premises;
(iv) Workers' Compensation Insurance, as required by law;
(v) such other insurance as is customarily required to be
carried by tenants in first-class office buildings in Cupertino, California and
in such amounts as Landlord, any Mortgagee and/or any Lessor may reasonably
require from time to time.
Tenant hereby acknowledges and agrees that, if Tenant elects not to carry
business interruption insurance, then, to the fullest extent permitted by law,
Tenant forever waives and releases Landlord from any claims or liability arising
from or in connection with damage or injury to Tenant's business, which damage
or injury would have been covered by business interruption insurance if such
policy had been obtained.
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(b) All insurance required to be carried by Tenant pursuant
to the terms of this Lease (i) shall contain a provision that (x) other than
those customary exclusions found in customary forms of commercial general
liability policies, no act or omission of Tenant shall affect or limit the
obligation of the insurance company to pay the amount of any loss sustained, (y)
the policy shall be noncancellable and/or no material change in coverage shall
be made thereto unless Landlord, Lessors and Mortgagees shall have received 30
days' prior notice of the same, by certified mail, return receipt requested, and
(z) Tenant shall be solely responsible for the payment of all premiums under
such policies and Landlord, Lessors and Mortgagees shall have no obligation for
the payment thereof, and (ii) shall be effected under valid and enforceable
policies issued by reputable and independent insurers permitted to do business
in the State of California and rated in Best's Insurance Guide, or any successor
thereto (or if there be none, an organization having a national reputation) as
having a "Best's Rating" of "A-" and a "Financial Size Category" of at least "X"
or, if such ratings are not then in effect, the equivalent thereof or such other
financial rating as Landlord may at any time consider appropriate.
(c) On or prior to the Commencement Date, Tenant shall
deliver to Landlord appropriate policies of insurance, including evidence of
waivers of subrogation required to be carried by each party pursuant to this
Article 12. Evidence of each renewal or replacement of a policy shall be
delivered by Tenant to Landlord at least 10 days prior to the expiration of such
policy. In lieu of the policy of insurance required to be delivered to Landlord
pursuant to this Article (the "Policy"), Tenant may deliver to Landlord a
certification from Tenant's insurance company (on the form currently designated
"Acord 27", or the equivalent, rather than on the form currently designated
"Acord 25-S", or the equivalent) which shall be binding on Tenant's insurance
company, and which shall expressly provide that such certification (i) conveys
to Landlord and any other named insured and/or additional insureds thereunder
(the "Insured Parties") all the rights and privileges afforded under the Policy
as primary insurance, and (ii) contains an unconditional obligation of the
insurance company to advise all Insured Parties in writing by certified mail,
return receipt requested, at least 30 days in advance of any termination or
change to the Policy that would affect the interest of any of the Insured
Parties.
Section 12.2 Waiver of Subrogation. Landlord and Tenant shall each
---------------------
procure an appropriate clause in or endorsement to any property insurance
covering the Premises, the Building and personal property, fixtures and
equipment located therein, wherein the insurance companies shall waive
subrogation or consent to a waiver of right of recovery, and Landlord and Tenant
agree not to make any claim against, or seek to recover from, the other for any
loss or damage to its property or the property of others resulting from fire or
other hazards to the extent covered by such property insurance; provided,
however, that the release, discharge, exoneration and covenant not to sue
contained herein shall be limited by and coextensive with the terms and
provisions of the waiver of subrogation or waiver of right of recovery. Tenant
acknowledges that Landlord shall not carry insurance on, and shall not be
responsible for, (i) damage to any Specialty Alterations, (ii) Tenant's
Property, and (iii) any loss suffered by Tenant due to interruption of Tenant's
business.
Section 12.3 Landlord's Insurance. Landlord shall, from and after
--------------------
the Effective Date and until the Expiration Date, maintain in effect the
following insurance: (i) fire and "all risk" insurance providing coverage in the
event of fire, vandalism, malicious mischief
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and all other risks normally covered by "all risk" policies in the area of the
Building, covering the Building (excluding the property required to be insured
by Tenant pursuant to Section 12.1) in an amount not less than ninety-
deductibles which as of the Effective Date is Twenty-Five Thousand Dollars
($25,000.00) but is subject to periodic change over the Term) of the Building
excluding foundations, footings and other below-grade structural elements; and
(ii) commercial general liability insurance or the equivalent in the amount of
at least Five Million Dollars ($5,000,000.00), against claims of bodily injury,
personal injury or property damage arising out of Landlord's operations, assumed
liabilities, contractual liabilities, or use of the Building and Common Areas.
Such insurance may be carried under blanket or umbrella insurance policies. Upon
written request from Tenant, but no more than one (1) time during any calendar
year, Landlord shall provide Tenant with evidence that Landlord is carrying the
insurance Landlord is required to maintain pursuant to this Section 12.3.
ARTICLE 13
DESTRUCTION - FIRE OR OTHER CAUSE
Section 13.1 Restoration. If the Premises are damaged by
-----------
fire or other casualty, or if the Building is damaged such that Tenant is
deprived of reasonable access to the Premises or Tenant's use of any portion of
the Premises is materially impaired, Tenant shall give prompt notice thereof to
Landlord, and the damage shall be repaired by Landlord, at its expense, to
substantially the condition of the Premises prior to the damage, subject to the
provisions of any Mortgage or Superior Lease, but Landlord shall have no
obligation to repair or restore (i) Tenant's Property or (ii) any Specialty
Alterations. Until such time as the restoration of the Premises is substantially
completed, Fixed Rent, Tenant's Operating Payment and Tenant's Tax Payment shall
be reduced in the proportion by which the area of the part of the Premises which
is inaccessible, or the use of which has been so impaired, and is not used by
Tenant bears to the total area of the Premises.
Section 13.2 Landlord's Termination Right. Notwithstanding anything
----------------------------
to the contrary contained in Section 13.1, if (i) the Premises are totally
damaged or are rendered wholly untenantable, or if the Building shall be so
damaged that, in Landlord's opinion, substantial alteration, demolition, or
reconstruction of the Building shall be required (whether or not the Premises
are so damaged or rendered untenantable) and the estimated period for the repair
or restoration of the Premises or the Building set forth in the Restoration
Notice (as hereinafter defined) is more than twelve (12) months from the date of
such damage or (ii) under the provisions of any Mortgage or Superior Lease,
Landlord shall be unable so to restore the Premises or Tenant's reasonable
access to the Premises, then in either such event, Landlord may, not later than
sixty (60) days following the date of the damage, give Tenant a notice
terminating this Lease. If this Lease is so terminated, (a) the Term shall
expire upon the thirtieth (30th) day after such notice is given, (b) Tenant
shall vacate the Premises and surrender the same to Landlord, (c) Tenant's
liability for Rent shall cease as of the date of the damage, and (d) any prepaid
Rent for any period after the date of the damage shall be refunded by Landlord
to Tenant.
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Section 13.3 Tenant's Termination Right. If the Premises are totally
--------------------------
damaged and are thereby rendered wholly untenantable, or if the Building shall
be so damaged that Tenant is deprived of reasonable access to the Premises, or
Tenant's use of any portion of the Premises is materially impaired, Landlord
shall, within sixty (60) days following the date of the damage, cause a
contractor or architect selected by Landlord to give notice (the "Restoration
Notice") to Tenant of the date by which such contractor or architect estimates
the restoration of the Premises or the Building, as applicable, shall be
Substantially Completed. If (i) such date, as set forth the Restoration Notice,
is more than twelve (12) months from the date of such damage and if Landlord has
not elected to terminate this Lease pursuant to Section 13.2, then Tenant shall
have the right to terminate this Lease by giving notice to Landlord not later
than thirty (30) days following Tenant's receipt of the Restoration Notice or
(ii) Landlord elects not to terminate this Lease pursuant to Section 13.2, but
fails to Substantially Complete the repair or restoration of the Premises or the
Building, as applicable, within twelve (12) months from the date of damage or
destruction, Tenant, upon not less than thirty (30) days' prior written notice,
may elect to terminate this Lease (either such notice in (i) or (ii), a
"Termination Notice"). If Tenant delivers to Landlord a Termination Notice,
unless, with respect to a Termination Notice delivered pursuant to clause (ii)
of the preceding sentence, Landlord within such thirty-(30-) day period
Substantially Completes such repair or restoration or delivers a letter from its
general contractor indicating that such work will be Substantially Completed
within (90) days of the date of such Termination Notice, this Lease shall be
deemed to have terminated as of the date of the giving of the Termination
Notice, in the manner set forth in the second sentence of Section 13.2. Upon any
such termination of this Lease, Tenant shall vacate the Premises and remove all
of its furniture, fixtures, equipment and personal property as quickly as
commercially reasonably possible.
Section 13.4 Final 12 Months. Notwithstanding anything set forth
---------------
to the contrary in this Article 13, in the event that any damage rendering the
Premises wholly untenantable occurs during the final twelve (12) months of the
Term, either Landlord or Tenant may terminate this Lease by notice to the other
party within thirty (30) days after the occurrence of such damage and this Lease
shall expire on the thirtieth (30th) day after the date of such notice unless
Tenant has the then-exercisable right under Article 34 of this Lease to extend
the Term and exercises such right within thirty (30) days following the date of
such damage or destruction. For purposes of this Section 13.4, the Premises
shall be deemed wholly untenantable if due to such damage, Tenant shall be
precluded from using more than fifty percent (50%) of the Premises for the
conduct of its business and Tenant's inability to so use the Premises is
reasonably expected to continue until the Expiration Date.
Section 13.5 Waivers. Tenant hereby waives the provisions of
-------
Section 1932, subdivision 2, and Landlord and Tenant hereby waive the provisions
of Section 1933, subdivision 4, of the California Civil Code, and any similar
law, statute or ordinance now or hereafter in effect.
Section 13.6 Inability to Collect. Notwithstanding any of the
--------------------
foregoing provisions of this Article 13, if and for so long as by reason of any
action or inaction by any Tenant Party, Landlord or any Mortgagee or Lessor is
unable to collect all of the insurance proceeds (including rent insurance
proceeds) applicable to damage or destruction of the Premises or the Building,
then, without prejudice to any other remedies that may be available against
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Tenant, there shall be no abatement of Rent and Landlord shall have no
obligation to restore the Premises.
Section 13.7 Landlord's Liability. Any Building employee to whom
--------------------
any property shall be entrusted by or on behalf of Tenant shall be deemed to be
acting as Tenant's agent with respect to such property and neither Landlord nor
its agents shall be liable for any damage to such property, or for the loss of
or damage to any property of Tenant by theft or otherwise. None of Landlord, its
agents, any Mortgagee or Lessor shall liable for any injury or damage to persons
or property or interruption of Tenant's business resulting from fire or other
casualty, any damage caused by other tenants or persons in the Building or by
construction of any private, public or quasi-public work, or any latent defect
in the Premises or in the Building (except that Landlord shall be required to
repair the same to the extent provided in Article 5). No penalty shall accrue
for delays which may arise by reason of adjustment of fire insurance on the part
of Landlord or Tenant, or for delay on account of "labor troubles" or any other
cause beyond Landlord's control arising from any repair or restoration of any
portion of the Premises or of the Building, provided that Landlord shall use
reasonable efforts to minimize interference with Tenant's use and occupancy of
the Premises during the performance of any such repair or restoration, provided
further that Landlord shall have no obligation to employ contractors or labor at
overtime or other premium pay rates or to incur any other overtime costs or
additional expenses whatsoever. Nothing in this Section 13.7 shall affect any
right of Landlord to the indemnity from Tenant to which Landlord may be entitled
under Article 30 in order to recoup for payments made to compensate for losses
of third parties.
Section 13.8 Windows. If at any time any windows of the Premises
-------
are temporarily closed, darkened or covered over by reason of repairs,
maintenance, alterations or improvements to the Building, or any of such windows
are permanently closed, darkened or covered over due to any Requirement,
Landlord shall not be liable for any damage Tenant may sustain and Tenant shall
not be entitled to any compensation or abatement of any Rent, nor shall the same
release Tenant from its obligations hereunder or constitute an actual or
constructive eviction.
Section 13.9 Insurance Shortfall. Notwithstanding any other
-------------------
provision of this Article 13, if Landlord is otherwise obligated to repair or
restore the Premises and/or the Building hereunder, but, for any reason
whatsoever, the estimated cost of such repair or restoration, as reasonably
determined by Landlord (the "Estimated Restoration Cost"), exceeds the insurance
proceeds available to Landlord for such repair or restoration (the "Shortfall")
then, unless Tenant undertakes to fund such entire Shortfall in accordance with
this Section 13.9, Landlord may terminate this Lease by notice to Tenant, which
termination shall be in the manner provided in the last sentence of Section
13.2. If Tenant elects to fund such Shortfall, then such Shortfall shall be
funded in the same manner as the Total Construction Cost (as defined in the
Workletter Agreement) is to be funded pursuant to the Workletter Agreement, and
shall be disbursed on a pro rata basis with such insurance proceeds to pay for
the actual costs of such repair or restoration ("Actual Restoration Cost").
Promptly following the determination of any variance between the Actual
Restoration Cost and the Estimated Restoration Cost or any revision to the
anticipated insurance proceeds, Tenant shall fund any additional Shortfall
caused thereby or be refunded any excess payments previously made by Tenant.
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ARTICLE 14
EMINENT DOMAIN
Section 14.1 (a) Total Taking. If all or substantially all of the
------------
Real Property, the Building or the Premises shall be acquired or condemned for
any public or quasi-public purpose, this Lease shall terminate and the Term
shall end as of the date of the vesting of title, with the same effect as if
such date were the Expiration Date, and Rent shall be prorated and adjusted as
of such date.
(b) Partial Taking. If only a part of the Real Property, the
--------------
Building or the Premises shall be acquired or condemned then, except as
hereinafter provided in this Article 14, this Lease and the Term shall continue
in full force and effect, provided that from and after the date of the vesting
of title, the Rent and Tenant's Proportionate Share shall be modified to reflect
the reduction of the Premises and/or the Building as a result of such
acquisition or condemnation.
(c) Landlord's Termination Right. Landlord may give to Tenant,
----------------------------
within sixty (60) days following the date upon which Landlord receives notice
that all or a portion of the Real Property, the Building or the Premises has
been acquired or condemned, a notice of termination of this Lease with respect
to such portion of the Premises acquired or condemned.
(d) Tenant's Termination Right. If the part of the Real Property
--------------------------
so acquired or condemned consists of more than one (1) floor of the Building, or
if, by reason of such acquisition or condemnation, Tenant no longer has
reasonable means of access to the Premises, Tenant may terminate this Lease by
notice to Landlord given within thirty (30) days following the date upon which
Tenant received notice of such acquisition or condemnation. If Tenant so
notifies Landlord, this Lease shall end and expire upon the thirtieth (30th) day
following the giving of such notice. If a part of the Premises shall be so
acquired or condemned and this Lease and the Term shall not be terminated in
accordance with this Section 14.1 Landlord, at Landlord's expense, but without
requiring Landlord to spend more than it collects as an award, shall, subject to
the provisions of any Mortgage or Superior Lease, restore that part of the
Premises not so acquired or condemned to a self-contained rental unit
substantially equivalent (with respect to character, quality, appearance and
services) to that which existed immediately prior to such acquisition or
condemnation, excluding Tenant's Property and/or Specialty Alterations.
(e) Apportionment of Rent. Upon any termination of this
---------------------
Lease pursuant to the provisions of this Article 14, Rent shall be apportioned
as of, and shall be paid or refunded up to and including, the date of such
termination.
Section 14.2 Awards. Upon any acquisition or condemnation
------
of all or any part of the Real Property, Landlord shall receive the entire award
for any such acquisition or condemnation, and Tenant shall have no claim against
Landlord or the condemning authority for the value of any unexpired portion of
the Term, Tenant's Alterations or improvements; and Tenant hereby assigns to
Landlord all of its right in and to such award. Nothing contained in this
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Article 14 shall be deemed to prevent Tenant from making a separate claim in any
condemnation proceedings for the then value of any Tenant's Property or
Specialty Alteration included in such taking and for any moving expenses,
provided any such award is in addition to, and does not result in a reduction
of, the award made to Landlord.
Section 14.3 Temporary Taking. If all or any part of the Premises
----------------
is acquired or condemned temporarily during the Term for any public or quasi-
public use or purpose, Tenant shall give prompt notice to Landlord and the Term
shall not be reduced or affected in any way and Tenant shall continue to pay all
Rent payable by Tenant without reduction or abatement and to perform all of its
other obligations under this Lease, except to the extent prevented from doing so
by the condemning authority, and Tenant shall be entitled to receive any award
or payment from the condemning authority for such use, which shall be received,
held and applied by Tenant as a trust fund for payment of the Rent falling due.
Section 14.4 Waiver. To the extent it is inconsistent with
------
the above, each party hereto hereby waives the provisions of Section 1265.130 of
the California Code of Civil Procedure allowing either party to petition a court
to terminate this Lease in the event of a partial taking of the Premises.
ARTICLE 15
ASSIGNMENT AND SUBLETTING
Section 15.1 (a) No Assignment or Subletting. Except as expressly
---------------------------
set forth herein, Tenant shall not assign, mortgage, pledge, encumber, or
otherwise transfer this Lease, whether by operation of law or otherwise, and
shall not sublet (or underlet), or permit, or suffer the Premises or any part
thereof to be used or occupied by others (whether for desk space, mailing
privileges or otherwise), without Landlord's prior consent in each instance. Any
assignment, sublease, mortgage, pledge, encumbrance or transfer in contravention
of the provisions of this Article 15 shall be void.
(b) Collection of Rent. If, without Landlord's consent when
------------------
required under this Article 15, this Lease is assigned, or any part of the
Premises is sublet or occupied by anyone other than Tenant or this Lease or the
Premises or any of Tenant's Property is encumbered (by operation of law or
otherwise), Landlord may collect rent from the assignee, subtenant or occupant,
and apply the net amount collected to the Rent herein reserved. No such
collection shall be deemed a waiver of the provisions of this Article 15, an
acceptance of the assignee, subtenant or occupant as tenant, or a release of
Tenant from the performance of Tenant's covenants hereunder. Tenant shall remain
fully liable for the obligations under this Lease.
(c) Further Assignment/Subletting. Landlord's consent to any
-----------------------------
assignment or subletting shall not relieve Tenant from the obligation to obtain
Landlord's express consent to any further assignment or subletting. Except for a
person or entity who acquired an interest in the Premises directly from the
initial Tenant named herein in accordance with this Article 15, no subtenant
shall be permitted to assign or encumber its sublease or further
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sublet any portion of its sublet space, or otherwise suffer or permit any
portion of the sublet space to be used or occupied by others.
Section 15.2 Tenant's Notice. If Tenant desires to assign this
---------------
Lease or sublet all or any portion of the Premises in a transaction for which
Landlord's consent is required hereunder, Tenant shall give notice thereof to
Landlord, which shall be accompanied by (a) with respect to an assignment of
this Lease, the date Tenant desires the assignment to be effective, and (b) with
respect to a sublet of all or a part of the Premises, (i) the material business
terms on which Tenant would sublet such premises, and (ii) a description of the
portion of the Premises to be sublet. Such notice shall be deemed an offer from
Tenant to Landlord whereby Landlord (or Landlord's designee) shall be granted
the right, at Landlord's option, (1) with respect to a sublease for a term
expiring no earlier than six (6) months prior to the Expiration Date, to
terminate this Lease with respect to such space as Tenant proposes to sublease
(the "Partial Space"), upon the terms and conditions hereinafter set forth, or
(2) if the proposed transaction is an assignment of this Lease, to terminate
this Lease. Such option may be exercised by notice from Landlord to Tenant
within ten (10) Business Days after Landlord's receipt of Tenant's notice;
provided, however, that Landlord shall have no such option to terminate this
Lease with respect to any such proposed subletting unless on the date of such
proposed transaction Tenant is occupying less than fifty percent (50%) of the
rentable area of the Premises.
Section 15.3 Landlord's Termination. If Landlord exercises its
----------------------
option, if any, to terminate all or a portion of this Lease pursuant to Section
15.2, (a) this Lease shall end and expire with respect to all or a portion of
the Premises, as the case may be, on the date that such assignment or sublease
was to commence, (b) Rent shall be apportioned, paid or refunded as of such
date, (c) the then amount of the Security Deposit shall be reduced to an amount
equal to the product of (x) the then amount of the Security Deposit and (y) a
ratio, the numerator of which is the number of RSF in the remaining portion of
the Premises and the denominator of which is the number of RSF in the Premises
immediately prior to Landlord's exercise of such option, (d) Tenant, upon
Landlord's request, shall enter into an amendment of this Lease ratifying and
confirming such total or partial termination, and setting forth any appropriate
modifications to the terms and provisions hereof, and (e) Landlord shall be free
to lease the Premises (or any part thereof) to Tenant's prospective assignee or
subtenant; provided, however, that (i) in the event of any such total
termination respecting a proposed assignment, Landlord shall pay to Tenant a
cancellation fee in an amount equal to the amount Tenant would otherwise have
been entitled to receive pursuant to Section 15.7(a) hereof if such assignment
transaction as described in such Tenant notice had been completed and (ii) in
the event of any such partial termination respecting a proposed subletting,
Landlord shall pay to Tenant an amount equivalent the portion of net subleasing
profits, determined in the manner provided for in Section 15.7(b) hereof, that
otherwise would have been retained by Tenant if Landlord had not so exercised
such option to terminate, which payment shall be made by Landlord in the same
manner that Tenant would have been obligated to pay to Landlord Landlord's
portion of such subleasing profits pursuant to such Section 15.7(b).
Section 15.4 Conditions to Assignment/Subletting. (a) If Landlord
-----------------------------------
consent to the proposed assignment or subletting shall not be unreasonably
withheld or delayed. Such consent shall be granted or declined, as the case may
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be, within ten (10) Business Days after Landlord's receipt of (i) a true and
complete statement reasonably detailing the identity of the proposed assignee or
subtenant, the nature of its business and its proposed use of the Premises, (ii)
current financial information with respect to the proposed assignee or
subtenant, including its most recent financial statements, and (iii) any other
information Landlord may reasonably request, provided that:
(A) in Landlord's reasonable judgment, the proposed assignee or
subtenant is engaged in a business or activity, and the Premises will be used in
a manner, which (1) is in keeping with the then standards of the Building, (2)
limits the use of the Premises to general and executive offices, and (3) does
not violate any restrictions set forth in this Lease, any Mortgage or Superior
Lease;
(B) the proposed assignee or subtenant is a reputable person or
entity of good character with sufficient financial means to perform all of its
obligations under this Lease or the sublease, as the case may be, and Landlord
has been furnished with reasonable proof thereof;
(C) the form of the proposed sublease or instrument of assignment
shall be reasonably satisfactory to Landlord and shall comply with the
provisions of this Article 15;
(D) there shall be not more than five (5) subtenants in each floor
of the Premises;
(E) the aggregate consideration to be paid by the proposed
subtenant under the terms of the proposed sublease shall not be less than
seventy-five percent (75%) of the then current market rent for the Premises (the
"Market Sub-rent") determined as though the Premises were vacant and taking into
account (x) the length of the term of the proposed sublease, (y) any rent
concessions granted to subtenant, and (z) the cost of any alterations being
performed for the sublessee; provided, however, the provisions of this
Subsection 15.4(a)(E) shall cease to apply if after a period of sixty (60) days
Tenant is unable to consummate a sublease transaction for an amount at least
equal to the Market Subrent;
(F) Tenant shall, upon demand, reimburse Landlord for all expenses
reasonably incurred by Landlord in connection with such assignment or sublease,
including any investigations as to the acceptability of the proposed assignee or
subtenant and all legal costs reasonably incurred in connection with the
granting of any requested consent, which investigation and legal costs shall not
exceed the aggregate amount of Two Thousand Five Hundred Dollars ($2,500.00)
("Expense Limit"); provided, however, that such Expense Limit shall not apply to
any assignment or sublease in connection with the bankruptcy or reorganization
of Tenant or that involves an amendment to this Lease, and all costs reasonably
incurred in reviewing any plans and specifications for Alterations proposed to
be made in connection therewith;
(G) the proposed subtenant or assignee shall not be entitled,
directly or indirectly, to diplomatic or sovereign immunity, regardless of
whether the
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proposed assignee or subtenant agrees to waive such diplomatic or sovereign
immunity, and shall be subject to the service of process in, and the
jurisdiction of the courts of, the County of Santa Clara and State of
California; and
(H) in Landlord's reasonable judgment, the proposed assignee or
subtenant shall not be of a type or character, or engaged in a business or
activity, or owned or controlled by or identified with any entity, which may
result in protests or civil disorders or commotions at, or other disruptions of
the normal business activities in, the Building.
(b) With respect to each and every subletting and/or assignment
authorized by Landlord under the provisions of this Lease, it is further agreed
that:
(i) the form of the proposed assignment or sublease shall be
reasonably satisfactory to Landlord and shall comply with the provisions of this
Article ;
(ii) no sublease shall be for a term ending later than one day prior
to the Expiration Date of this Lease;
(iii) no sublease shall be delivered to any subtenant, and no
subtenant shall take possession of any part of the Premises, until an executed
counterpart of such sublease has been delivered to Landlord and approved in
writing by Landlord as provided in Section 15.4(a);
(iv) if an Event of Default shall occur at any time prior to the
effective date of such assignment or subletting and be continuing and yet
uncured on the date that would otherwise be such effective date, then Landlord's
consent thereto, if previously granted, shall be immediately deemed revoked
without further notice to Tenant, and any such deemed unconsented to assignment
or subletting shall constitute a further Event of Default hereunder; and
(v) each sublease shall be subject and subordinate to this Lease and
to the matters to which this Lease is or shall be subordinate, it being the
intention of Landlord and Tenant that Tenant shall assume and be liable to
Landlord for any and all acts and omissions of all subtenants and anyone
claiming under or through any subtenants which, if performed or omitted by
Tenant, would be a default under this Lease; and Tenant and each subtenant shall
be deemed to have agreed that upon the occurrence and during the continuation of
an Event of Default hereunder, Tenant has hereby assigned to Landlord, and
Landlord may, at its option, accept such assignment of, all right, title and
interest of Tenant as sublandlord under such sublease, together with all
modifications, extensions and renewals thereof then in effect and such subtenant
shall, at Landlord's option, attorn to Landlord pursuant to the then executory
provisions of such sublease, except that Landlord shall not be (A) liable for
any previous act or omission of Tenant under such sublease, (B) subject to any
counterclaim, offset or defense not expressly provided in such sublease, which
theretofore accrued to such subtenant against Tenant, (C) bound by any previous
modification of such sublease not consented to by Landlord or by any prepayment
of more than one month's rent, (D) bound to return such subtenant's security
deposit, if any, except to the extent Landlord shall receive actual possession
of such deposit and
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such subtenant shall be entitled to the return of all or any portion of such
deposit under the terms of its sublease, or (E) obligated to make any payment to
or on behalf of such subtenant, or to perform any work in the subleased space or
the Building, or in any way to prepare the subleased space for occupancy, beyond
Landlord's obligations under this Lease. The provisions of this Section
15.4(b)(v) shall be self-operative, and no further instrument shall be required
to give effect to this provision, provided that the subtenant shall execute and
deliver to Landlord any instruments Landlord may reasonably request to evidence
and confirm such subordination and attornment.
Section 15.5 Binding on Tenant; Indemnification of Landlord.
----------------------------------------------
Each sublease pursuant to this Article 15 shall be subject to all of the
covenants, terms and conditions of this Lease. Notwithstanding any assignment or
subletting or any acceptance of Rent by Landlord from any assignee or subtenant,
Tenant shall remain fully liable for the payment of all Rent due and for the
performance of all the covenants, terms and conditions contained in this Lease
on Tenant's part to be observed and performed, and any default under any term,
covenant or condition of this Lease by any subtenant or assignee or anyone
claiming under or through any subtenant or assignee shall be deemed to be a
default under this Lease by Tenant. Tenant shall indemnify, defend, protect and
hold harmless Landlord from and against any and all losses, liabilities, damages
and expenses (including reasonable attorneys' fees and disbursements) resulting
from any claims that may be made against Landlord by the proposed assignee or
subtenant or anyone claiming under or through any subtenant or by any brokers or
other persons claiming a commission or similar compensation in connection with
the proposed assignment or sublease, irrespective of whether Landlord shall give
or decline to give its consent to any proposed assignment or sublease, or if
Landlord shall exercise any of its options under this Article 15.
Section 15.6 Tenant's Failure to Complete. If Landlord consents to
----------------------------
a proposed assignment or sublease and Tenant fails to execute and deliver to
Landlord such assignment or sublease within ninety (90) days after the giving of
such consent, then Tenant shall again comply with all of the provisions and
conditions of Section 15.2 hereof before assigning this Lease or subletting all
or part of the Premises.
Section 15.7 Profits. If Tenant shall enter into any
-------
assignment or sublease permitted hereunder or consented to by Landlord, Tenant
shall, within sixty (60) days of Landlord's consent to such assignment or
sublease, deliver to Landlord a complete list of Tenant's reasonable third-party
brokerage fees, legal fees and architectural fees paid or to be paid in
connection with such transaction, together with a list of all of Tenant's
Property to be transferred to such assignee or sublessee. Tenant shall deliver
to Landlord evidence of the payment of such fees promptly after the same are
paid. In consideration of such assignment or subletting, Tenant shall pay to
Landlord:
(a) In the case of an assignment, on the effective date of the
assignment, an amount equal to fifty percent (50%) of all sums and other
consideration paid to Tenant by the assignee for or by reason of such assignment
(including sums paid for the sale or rental of Tenant's Property, less, in the
case of a sale thereof, the then fair market value thereof, as reasonably
determined by Landlord) after first deducting Tenant's reasonable third-party
brokerage fees, legal fees and architectural fees and the reasonable costs of
any additional tenant
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improvements made by Tenant, all as incurred in connection with such transaction
and an amount equal to the unamortized balance of the Agreed TI Costs (as
hereinafter defined). For purposes of this Section 15.7, the term "Agreed TI
Costs" shall mean an amount equal to the lesser of (i) the cost of the
Improvements paid for by Tenant pursuant to the Workletter Agreement or (ii) the
product of (x) the number of RSF in the Premises and (y) Seventeen and 50/100ths
Dollars ($17.50), which amount shall be amortized over the remaining portion of
the Term (exclusive of any Renewal Term (as hereinafter defined)) with interest
thereon at a per annum rate equal to eight percent (8%); or
(b) in the case of a sublease, fifty percent (50%) of any
consideration payable under the sublease to Tenant by the subtenant which
exceeds on a per square foot basis the Fixed Rent and Additional Rent accruing
during the term of the sublease in respect of the subleased space (together with
any sums paid for the sale or rental of Tenant's Property, less, in the case of
the sale thereof, the then fair market value thereof, as reasonably determined
by Landlord) after first deducting Tenant's reasonable third-party brokerage
fees, legal fees and architectural fees and the reasonable costs of any
additional tenant improvements made by Tenant, all as incurred in connection
with such transaction, and an amount equal to the Agreed TI Costs, which amount
shall be allocated, if such sublease is for less than the entire Premises, on a
pro rata basis, to the rentable area of such subleased space and, if such
sublease is less than the entire Premises, the actual cost incurred by Tenant in
separately demising the subleased space (collectively, "Tenant's Costs"). The
sums payable under this clause shall be paid by Tenant to Landlord as and when
paid by the subtenant to Tenant commencing at such time as Tenant has first
recovered all of Tenant's Costs.
Section 15.8 (a) Transfers. If Tenant is a corporation, the
---------
transfer (by one or more transfers) of a majority of the stock of Tenant shall
be deemed a voluntary assignment of this Lease; provided, however, that the
provisions of this Article 15 shall not apply to the transfer of shares of stock
of Tenant if and so long as Tenant is publicly traded on a nationally recognized
stock exchange including, without limitation, the NASDAQ Stock Market. For
purposes of this Section 15.8 the term "transfers" shall be deemed to include
the issuance of new stock which results in a majority of the stock of Tenant
being held by a person or entity which does not hold a majority of the stock of
Tenant on the date hereof. If Tenant is a partnership, the transfer (by one or
more transfers) of a majority interest in the partnership shall be deemed a
voluntary assignment of this Lease. If Tenant is a limited liability company,
trust, or any other legal entity, the transfer (by one or more transfers) of a
majority of the beneficial ownership interests in such entity, however
characterized, shall be deemed a voluntary assignment of this Lease. The
provisions of Section 15.1 shall not apply to transactions with a corporation
into or with which Tenant is merged or consolidated or to which substantially
all of Tenant's assets are transferred so long as (i) such transfer was made for
a legitimate independent business purpose and not for the purpose of
transferring this Lease, (ii) if at the time of any such transfer either (A) the
successor to Tenant has a net worth computed in accordance with generally
accepted accounting principles at least equal to the greater of (1) the net
worth of Tenant immediately prior to such merger, consolidation or transfer, and
(2) the net worth of the original Tenant on the date of this Lease, or (B) the
successor to Tenant has a total market capitalization of at least Three Billion
Three Hundred Million Dollars ($3,300,000,000.00), and (iii) proof satisfactory
to Landlord of such net worth is delivered to Landlord at least ten (10) days
prior to the effective date of any such transaction. Tenant may also, upon prior
notice to but without the necessity of the consent
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of Landlord, permit any corporation or other business entity which controls, is
controlled by, or is under common control with the original Tenant (a "Related
Entity") to sublet all or part of the Premises for any Permitted Use, provided
the Related Entity is in Landlord's reasonable judgment of a character and
engaged in a business which is in keeping with the standards for the Building
and the occupancy thereof. Such sublease shall not be deemed to vest in any such
Related Entity any right or interest in this Lease or the Premises nor shall it
relieve, release, impair or discharge any of Tenant's obligations hereunder. For
the purposes hereof, "control" shall be deemed to mean ownership of not less
than fifty percent (50%) of all of the voting stock of such corporation or not
less than fifty percent (50%) of all of the legal and equitable interest in any
other business entity if Tenant is not a corporation.
(b) Applicability. The limitations set forth in this
-------------
Section 15.8 shall apply to subtenant(s), assignee(s) and guarantor(s) of this
Lease, if any, and any transfer by any such entity in violation of this Section
15.8 shall be a transfer in violation of Section 15.1.
(c) Modifications, Takeover Agreements. Any modification,
----------------------------------
amendment or extension of a sublease and/or any other agreement by which a
landlord of a building other than the Building agrees to assume the obligations
of Tenant under this Lease shall be deemed a sublease for the purposes of
Section 15.1 hereof.
Section 15.9 Assumption of Obligations. Any assignment or transfer,
-------------------------
whether made with Landlord's consent or without Landlord's consent, if and to
the extent permitted hereunder, shall not be effective unless and until the
assignee executes, acknowledges and delivers to Landlord an agreement in form
and substance satisfactory to Landlord whereby the assignee (a) assumes Tenant's
obligations under this Lease and (b) agrees that, notwithstanding such
assignment or transfer, the provisions of Section 15.1 hereof shall be binding
upon it in respect of all future assignments and transfers.
Section 15.10 Tenant's Liability. The joint and several liability
------------------
of Tenant and any successors-in-interest of Tenant and the due performance of
Tenant's obligations under this Lease shall not be discharged, released or
impaired by any agreement or stipulation made by Landlord, or any grantee or
assignee of Landlord, extending the time, or modifying any of the terms and
provisions of this Lease, or by any waiver or failure of Landlord, or any
grantee or assignee of Landlord, to enforce any of the terms and provisions of
this Lease.
Section 15.11 Listings in Building Directory. The listing of any
------------------------------
name other than that of Tenant on the doors of the Premises, the Building
directory or elsewhere shall not vest any right or interest in this Lease or in
the Premises, nor be deemed to constitute Landlord's consent to any assignment
or transfer of this Lease or to any sublease of the Premises or to the use or
occupancy thereof by others. Any such listing shall constitute a privilege
revocable in Landlord's discretion by notice to Tenant.
Section 15.12 Lease Disaffirmance or Rejection. If at any time after
--------------------------------
an assignment by Tenant named herein, this Lease is not affirmed or rejected in
any proceeding of the types described in Section 18.1(f) hereof or any similar
proceeding, or upon a termination of this Lease due to any such proceeding,
Tenant named herein, upon request of Landlord given after such disaffirmance,
rejection or termination (and actual notice thereof to Landlord in the
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event of a disaffirmance or rejection or in the event of termination other than
by act of Landlord), shall (a) pay to Landlord all Rent and other charges due
and owing by the assignee to Landlord under this Lease to and including the date
of such disaffirmance, rejection or termination, and (b) as "tenant," enter into
a new lease of the Premises with Landlord for a term commencing on the effective
date of such disaffirmance, rejection or termination and ending on the
Expiration Date, unless sooner terminated in accordance therewith, at the same
Rent and upon the then executory terms, covenants and conditions contained in
this Lease, except that (i) the rights of Tenant named herein under the new
lease shall be subject to the possessory rights of the assignee under this Lease
and the possessory rights of any persons claiming through or under such assignee
or by virtue of any statute or of any order of any court, (ii) such new lease
shall require all defaults existing under this Lease to be cured by Tenant named
herein with due diligence, and (iii) such new lease shall require Tenant named
herein to pay all Rent which, had this Lease not been so disaffirmed, rejected
or terminated, would have become due under the provisions of this Lease after
the date of such disaffirmance, rejection or termination with respect to any
period prior thereto. If Tenant named herein defaults in its obligations to
enter into such new lease for a period of ten (10) days after Landlord's
request, then, in addition to all other rights and remedies by reason of
default, either at law or in equity, Landlord shall have the same rights and
remedies against Tenant named herein as if it had entered into such new lease
and such new lease had thereafter been terminated as of the commencement date
thereof by reason of Tenant's default thereunder.
Section 15.13 Space Sharing Arrangements. Notwithstanding any
--------------------------
contrary provision of this Lease, Tenant may allow employees of companies to
whom Tenant is providing products or services, or with which Tenant is
collaborating in the development or provision of products or services, to work
in the Premises without Landlord's consent (but with contemporaneous written
notice thereof to Landlord of the identities of such persons working at the
Premises) and without being deemed to have sublet any portion of the Premises,
so long as (A) such employees do not occupy more than twenty-five percent (25%)
of the rentable area of the Premises, in the aggregate, at any one time, and
such space is not separately demised from the space occupied by Tenant and (B)
the number of such employees does not exceed twenty-five percent (25%) of the
total number of persons regularly occupying the Premises.
Section 15.14 Arbitration. If Tenant believes that Landlord
-----------
has unreasonably withheld its consent to any proposed assignment or subletting
hereunder, then Tenant may (but is not obligated to) submit such dispute to
expedited arbitration pursuant to Section 31.20 below.
ARTICLE 16
ELECTRICITY
Section 16.1 Electricity. Subject to any Requirements or any
-----------
public utility rules or regulations governing energy consumption, Landlord shall
make or cause to be made, customary arrangements with public utilities and/or
public agencies to furnish electric current to the Premises for Tenant's use in
amounts sufficient for normal lighting by overhead fluorescent fixtures and for
normal use of computers, workstations, photocopying machines in reasonable
numbers, facsimile machines, typewriters, electronic telecommunications and
computer network equipment customary for general office use and other office
machines of comparable electrical
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consumption, but not including electricity required for special lighting or any
other item of equipment which (singly) consumes more than one and 50/100 (1.50)
kilowatt per hour at rated capacity or requires a voltage other than one hundred
twenty (120) volts single phase ("High Consumption Equipment"). If any tax is
imposed upon Landlord's receipts from the sale or resale of electricity to
Tenant, the amount of such tax shall be paid by Tenant if and to the extent
permitted by law. The electricity to be provided to the Premises under this
Article 16 shall be furnished by a reputable supplier selected by Landlord;
provided, however, at Tenant's request, Landlord shall consult with Tenant
regarding switching to other electricity service providers who provide
electricity at lower rates, and also shall consult with Tenant regarding the
methods of contracting for such electricity to maximize savings resulting from
time-of-use metering or other variable pricing models to the extent that it is
technically feasible to do so. If Landlord, at Tenant's request, changes energy
suppliers, all fees, credits, discounts and rebates received in connection
therewith shall be applied against Operating Expenses. Notwithstanding anything
set forth in this Section 16.1 to the contrary, Tenant shall have the right to
install High Consumption Equipment which is within the design criteria of the
Building, as reasonably determined by Landlord.
Section 16.2 Excess Electricity. Tenant shall at all times comply
------------------
with the rules and regulations of the utility company supplying electricity to
the Building. Tenant shall not use any electrical equipment which, in Landlord's
reasonable judgment, would exceed the capacity of the electrical equipment
serving the Premises. If Landlord reasonably determines that Tenant's electrical
requirements necessitate installation of any additional risers, feeders or other
electrical distribution equipment (collectively, "Electrical Equipment") and,
promptly following Landlord's written notice to Tenant of any such
determination, Tenant fails to curtail its electrical requirements sufficiently
to prevent the necessity of Landlord's installing any such Electrical Equipment,
or if Tenant provides Landlord with evidence reasonably satisfactory to Landlord
of Tenant's need for excess electricity and requests that additional Electrical
Equipment be installed, Landlord shall, at Tenant's expense, install such
additional Electrical Equipment, provided that Landlord, in its sole judgment,
considering the potential needs of present and future Building tenants and of
the Building itself, determines that (a) such installation is practicable and
necessary, (b) such additional Electrical Equipment is permissible under
applicable Requirements, and (c) the installation of such Electrical Equipment
will not cause permanent damage or injury to the Building or the Premises, cause
or create a dangerous or hazardous condition, entail excessive or unreasonable
alterations, or exceed the limits of the switchgear or other facilities serving
the Building, or require power in excess of that available from the public
utility serving the Building. Any costs incurred by Landlord in connection
therewith shall be paid by Tenant within ten (10) days after the rendition of a
bill therefor. Tenant shall not make or perform, or permit the making or
performance of, any Alterations to wiring installations or other electrical
facilities in or serving the Premises or make any additions to the office
equipment or other appliances in the Premises which utilize electrical energy
(other than ordinary small office equipment) without the prior consent of
Landlord, in each instance, and in compliance with this Lease.
Section 16.3 Service Disruption. Except as otherwise provided in
------------------
Section 7.4, Landlord shall not be liable in any way to Tenant for any failure,
defect or interruption of, or change in the supply, character and/or quantity of
electric service furnished to the Premises for any reason except if attributable
to the gross negligence or willful misconduct of Landlord or the
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failure by Landlord to pay any amounts owing to the utility company or other
electrical energy supplier, nor shall there be any allowance to Tenant for
diminution of rental value, nor shall the same constitute an actual or
constructive eviction of Tenant, in whole or part, or relieve Tenant from any of
its Lease obligations, and no liability shall arise on the part of Landlord by
reason of inconvenience, annoyance or injury to business whether electricity is
provided by public or private utility or by any electricity generation system
owned and operated by Landlord. Landlord shall use reasonable efforts to
minimize interference with Tenant's use and occupancy of the Premises as a
result of any such failure, defect or interruption of, or change in the supply,
character and/or quantity of, electric service, provided that Landlord shall
have no obligation to employ contractors or labor at overtime or other premium
pay rates or to incur any other overtime costs or additional expenses
whatsoever.
Section 16.4 Discontinuance of Service. Provided that in all cases a
-------------------------
reasonable substitute energy supplier is available for Tenant to contract with
directly, Landlord reserves the right to discontinue furnishing electricity to
Tenant in the Premises on not less than fifteen (15) days notice to Tenant. If
Landlord exercises such right, or is compelled to discontinue furnishing
electricity to Tenant, this Lease shall continue in full force and effect and
shall be unaffected thereby, except that from and after the effective date of
such discontinuance, Landlord shall not be obligated to furnish electricity to
Tenant hereunder. If Landlord so discontinues furnishing electricity, Tenant
shall arrange to obtain electricity directly from any utility company and other
energy supplier serving the Premises to the extent that the same is available,
suitable and safe for such purposes. All equipment which may be required to
obtain electricity of substantially the same quantity, quality and character
shall be installed by Landlord at the sole cost and expense of (a) Landlord, if
Landlord voluntarily discontinues such service, or (b) Tenant, if Landlord is
compelled to discontinue such service by the public utility or pursuant to
applicable Requirements or if such discontinuance arises out of the acts or
omissions or otherwise at the request of Tenant. Landlord shall not voluntarily
discontinue furnishing electricity to Tenant until Tenant is able to receive
electricity directly from the public utility or other company servicing the
Building, unless the public utility or other company is not prepared to furnish
electricity to the Premises on the date required as a result of Tenant's delay
or negligence in arranging for service or Tenant's refusal to provide the
utility company with a deposit or other security requested by the utility
company or Tenant's refusal to take any other action requested by the utility
company.
ARTICLE 17
ACCESS TO PREMISES
Section 17.1 Landlord's Access. (a) Tenant shall permit Landlord,
-----------------
Landlord's agents and public utility service providers servicing the Building to
erect, use and maintain concealed ducts, pipes and conduits in and through the
Premises provided such use does not cause the usable area of the Premises to be
reduced beyond a de minimis amount. Landlord shall promptly repair any damage to
the Premises or Tenant's Property caused by any work performed pursuant to this
Article 17.
(b) Landlord, any Lessor or Mortgagee and any other party
designated by Landlord and their respective agents shall have the right to enter
the Premises at all reasonable
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times, upon reasonable written notice except in the case of emergency, to
examine the Premises, to show the Premises to prospective purchasers, Mortgagees
or Lessors of the Building and their respective agents and representatives or
others, to make such repairs, alterations or additions to the Premises or the
Building conducted in a manner so as to minimize disruption to Tenant's business
(i) as Landlord may deem necessary or appropriate, (ii) which Landlord may elect
to perform following Tenant's failure to perform, or (iii) to comply with any
Requirements, and Landlord shall be allowed to take all material into the
Premises that may be required for the performance of such work without the same
constituting an actual or constructive eviction of Tenant in whole or in part
and without any abatement of Rent.
(c) All parts (except surfaces facing the interior of the
Premises) of all walls, windows and doors bounding the Premises (including
exterior Building walls, exterior core corridor walls, and doors and entrances
other than doors and entrances solely connecting areas within the Premises), all
balconies, terraces and roofs adjacent to the Premises, all space in or adjacent
to the Premises used for shafts, stacks, stairways, mail chutes, conduits and
other mechanical facilities, Building Systems and Building facilities are not
part of the Premises, and Landlord shall have the use thereof and access thereto
through the Premises for the purposes of Building operation, maintenance,
alteration and repair.
Section 17.2 Final 12 Months. [Intentionally Deleted]
---------------
Section 17.3 Alterations to Building; Building Name Changes.
----------------------------------------------
Landlord has the right at any time to (a) change the name, number or designation
by which the Building is commonly known, and (b) alter the Building to change
the arrangement or location of entrances or passageways, doors and doorways, and
corridors, elevators, stairs, toilets, or other public parts of the Building
without any such acts constituting an actual or constructive eviction and
without incurring any liability to Tenant, so long as such changes do not
deprive Tenant of access to the Premises. So long as Tenant is in occupancy of
at least fifty percent (50%) of the rentable area of the Building, Landlord
shall not change the name of the Building to that of any competitor of Tenant.
If Landlord should change the name of the Building on one (1) or more occasions
during the Term, then Landlord shall reimburse Tenant for all out-of-pocket
stationery and printing costs reasonably incurred by Tenant in connection with
the second (2nd) and any subsequent such name changes.
ARTICLE 18
DEFAULT
Section 18.1 Tenant's Defaults. Each of the following events
-----------------
shall be an "Event of Default" hereunder:
(a) Tenant fails to pay when due any installment of Fixed Rent
and such default shall continue for five (5) Business Days after notice of such
default is given to Tenant, or failure to pay when due of any other item of Rent
and such default shall continue for seven (7) Business Days after notice of such
default is given to Tenant, except that if Landlord shall have given two (2)
such notices of default in the payment of any Rent in any twelve- (12-) month
period, Tenant shall not be entitled to any further notice of its delinquency in
the payment of any
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Rent or an extended period in which to make payment until such time as twelve
(12) consecutive months shall have elapsed without Tenant having failed to make
any such payment when due, and the occurrence of any default in the payment of
any Rent within such twelve- (12-) month period after the giving of two (2) such
notices shall constitute an Event of Default; or
(b) Tenant fails to observe or perform any other term, covenant
or condition of this Lease to be observed or performed by Tenant and if such
failure continues for more than twenty (20) days after notice by Landlord to
Tenant of such default, or if such default is of such a nature that it cannot be
completely remedied within twenty (20) days, failure by Tenant to commence to
remedy such failure within said twenty (20) days, and thereafter diligently
prosecute to completion all steps necessary to remedy such default, provided the
same is completed within ninety (90) days or as soon thereafter as is
commercially practicable unless Tenant's failure to cure such default within
such ninety-(90-) day period would constitute a default under any Mortgage or
Superior Lease; or
(c) [Intentionally deleted]
(d) Tenant's interest in this Lease shall devolve upon or pass to
any person, whether by operation of law or otherwise, except as expressly
permitted under Article 15 hereof; or
(e) Tenant generally does not, or is unable to, or admits in
writing its inability to, pay its debts as they become due; or
(f) Tenant files a voluntary petition in bankruptcy or
insolvency, or is adjudicated a bankrupt or insolvent, or files any petition or
answer seeking any reorganization, liquidation, dissolution or similar relief
under any present or future federal bankruptcy act or any other present or
future applicable federal, state or other statute or law, or makes an assignment
for the benefit of creditors or seeks or consents to or acquiesces in the
appointment of any trustee, receiver, liquidator or other similar official for
Tenant or for all or any part of Tenant's property; or
(g) if, within sixty (60) days after the commencement of any
proceeding against Tenant, whether by the filing of a petition or otherwise,
seeking bankruptcy, insolvency, reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the present or
any future federal bankruptcy act or any other present or future applicable
federal, state or other statute or law, such proceeding shall not have been
dismissed, or if, within sixty (60) days after the appointment of any trustee,
receiver, liquidator or other similar official for Tenant or for all or any part
of Tenant's property, without the consent or acquiescence of Tenant, as the case
may be, such appointment shall not have been vacated or otherwise discharged, or
if any lien, execution or attachment or other similar filing shall be made or
issued against Tenant or any of Tenant's property pursuant to which the Premises
shall be taken or occupied or attempted to be taken or occupied by someone other
than Tenant.
Section 18.2 Tenant's Liability. If, at any time, (a) Tenant
------------------
shall be comprised of two or more persons, (b) Tenant's obligations under this
Lease shall have been guaranteed by any person other than Tenant, or (c)
Tenant's interest in this Lease shall have been assigned, the
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word "Tenant," as used in Section 18.1 (e), (f) and (g), shall be deemed to mean
any one or more of the persons primarily or secondarily liable for Tenant's
obligations under this Lease. Any monies received by Landlord from or on behalf
of Tenant during the pendency of any proceeding of the types referred to in this
Article shall be deemed paid as compensation for the use and occupancy of the
Premises and the acceptance of any such compensation by Landlord shall not be
deemed an acceptance of Rent or a waiver on the part of Landlord of any rights
under this Lease.
ARTICLE 19
REMEDIES AND DAMAGES
Section 19.1 Landlord's Remedies. If any Event of Default occurs
-------------------
under this Lease as provided in Section 18.1, Landlord, at Landlord's option,
and without limiting Landlord in the exercise of any other right or remedy
Landlord may have on account of such Event of Default, and without any further
demand or notice, may terminate this Lease and/or, to the extent permitted by
law, remove all persons and property from the Premises, which property shall be
stored by Landlord at a warehouse or elsewhere at the risk, expense and for the
account of Tenant.
(a) If Landlord elects to terminate this Lease as provided in
Section 19.1, pursuant to Section 1951.2 of the California Civil Code, Landlord
shall be entitled to recover from Tenant the aggregate of:
(i) The worth at the time of award of the unpaid Rent and
charges equivalent to Rent earned as of the date of the termination hereof;
(ii) The worth at the time of award of the amount by which the
unpaid Rent and charges equivalent to Rent which would have been earned after
the date of termination hereof until the time of award exceeds the amount of
such rental loss that Tenant proves could have been reasonably avoided;
(iii) The worth at the time of award of the amount by which the
unpaid Rent and charges equivalent to Rent for the balance of the Term after the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided;
(iv) Any other amount necessary to compensate Landlord for 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; and
(v) Any other amount which Landlord may hereafter be permitted
to recover from Tenant to compensate Landlord for the detriment caused by
Tenant's default.
For the purposes of this Section 19.1(a), the "time of award" shall mean the
date upon which the judgment in any action brought by Landlord against Tenant by
reason of such Event of Default is entered or such earlier date as the court may
determine; the "worth at the time of
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award" of the amounts referred to in Sections 19.1(a)(i) and 19.1(a)(ii) shall
be computed by allowing interest at the Interest Rate, but not less than the
legal rate; and the "worth at the time of award" of the amount referred to in
Section 19.1(a)(iii) shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%) per annum. Tenant agrees that such charges shall be
recoverable by Landlord under California Code of Civil Procedure Section 1174(b)
or any similar, successor or related provision of law. Further, Tenant hereby
waives the provisions of California Code of Civil Procedure Section 1174(c) and
California Civil Code Section 1951.7 or any other similar, successor or related
provision of law providing for Tenant's right to satisfy any judgment in order
to prevent a forfeiture of this Lease or requiring Landlord to deliver written
notice to Tenant of any reletting of the Premises.
Section 19.2 (a) Notwithstanding anything to the contrary set forth
herein, Landlord's reentry to perform acts of maintenance or preservation of, or
in connection with efforts to relet, the Premises, or any portion thereof, or
the appointment of a receiver upon Landlord's initiative to protect Landlord's
interest under this Lease shall not terminate Tenant's right to possession of
the Premises or any portion thereof and, until Landlord does elect to terminate
this Lease, this Lease shall continue in full force and Landlord may pursue all
its remedies hereunder including, without limitation, the right to recover from
Tenant as they become due hereunder all Rent and other charges required to be
paid by Tenant under the terms of this Lease.
(b) Nothing in this Article 19 shall be deemed to affect
Landlord's right to indemnification, under the indemnification clause or clauses
contained in this Lease, for claims or liability arising from events occurring
prior to the termination of this Lease.
(c) In the event of any Event of Default by Tenant as set forth
above, then in addition to any other remedies available to Landlord at law or in
equity or under this Lease, Landlord shall have the right to bring an action or
actions from time to time against Tenant, in any court of competent
jurisdiction, for all Rent and other sums due or becoming due under this Lease,
including all damages and costs proximately caused thereby, notwithstanding
Tenant's abandonment or vacation of the Premises or other acts of Tenant, as
permitted by Section 1951.4 of the California Civil Code or any successor,
related or similar provision of law. Such remedy may be exercised by Landlord
without prejudice to its right thereafter to terminate this Lease in accordance
with the other provisions contained in this Article 19.
Section 19.3 In the event of an Event of Default by Tenant and
Tenant's abandonment of the Premises or if Landlord shall elect to reenter or
shall take possession of the Premises pursuant to any legal proceeding or
pursuant to any notice provided by law, and, so long as an Event of Default is
continuing, until Landlord elects to terminate this Lease, Landlord may, from
time to time, without terminating this Lease, recover all Rent as it becomes due
pursuant to Section 19.2(a) and/or relet the Premises or any part thereof for
the account of and on behalf of Tenant, on any terms, for any term (whether or
not longer than the Term), and at any rental as Landlord in its reasonable
discretion may deem advisable, and Landlord may make any alterations and repairs
to the Premises in connection therewith. Tenant hereby irrevocably constitutes
and appoints Landlord as its attorney-in-fact, which appointment shall be deemed
coupled with an interest and shall be irrevocable, for purposes of reletting the
Premises pursuant
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to the immediately preceding sentence. In the event that Landlord shall elect to
so relet the Premises on behalf of Tenant, then rentals received by Landlord
from such reletting shall be applied:
(a) First, to reimburse Landlord for the costs and expenses of
such reletting (including, without limitation, costs and expenses of retaking or
repossessing the Premises, removing persons and property therefrom, securing new
tenants, and, if Landlord shall maintain and operate the Premises, the costs
thereof) and necessary or reasonable alterations.
(b) Second, to the payment of any indebtedness of Tenant to
Landlord other than Fixed Rent, Additional Rent and other sums due and unpaid
hereunder.
(c) Third, to the payment of Fixed Rent, Additional Rent and
other sums due and unpaid hereunder, and the residue, if any, shall be held by
Landlord and applied in payment of other or future obligations of Tenant to
Landlord as the same may become due and payable.
Should the rentals received from such reletting, when applied in the manner and
order indicated above, at any time be less than the total amount owing from
Tenant pursuant to this Lease, then Tenant shall pay such deficiency to
Landlord, and if Tenant does not pay such deficiency within five (5) days of
Tenant's receipt of written notice thereof, Landlord may bring an action against
Tenant for recovery of such deficiency or pursue its other remedies hereunder or
under California Civil Code Section 1951.8, California Code of Civil Procedure
Section 1161 et seq., or any similar, successor or related provision of law.
Section 19.4 (a) All rights, powers and remedies of Landlord
hereunder and under any other agreement now or hereafter in force between
Landlord and Tenant shall be cumulative and not alternative and shall be in
addition to all rights, powers and remedies given to Landlord at law or in
equity. The exercise of any one or more of such rights or remedies shall not
impair Landlord's right to exercise any other right or remedy including, without
limitation, any and all rights and remedies of Landlord under California Civil
Code Section 1951.8, California Code of Civil Procedure Section 1161 et seq., or
any similar, successor or related provision of law.
(b) If, after Tenant's abandonment of the Premises, Tenant leaves
behind any items of personal property, then Landlord shall store such property
at a warehouse or any other location at the risk, expense and for the account of
Tenant, and such property shall be released only upon Tenant's payment of such
charges, together with moving and other costs relating thereto and all other
sums due and owing under this Lease. If Tenant does not reclaim such property
within the period permitted by law, Landlord may sell such property in
accordance with law and apply the proceeds of such sale to any sums due and
owing hereunder, or retain said property, granting Tenant credit against sums
due and owing hereunder for the reasonable value of such property.
(c) To the extent permitted by law, Tenant hereby waives all
provisions of, and protections under, any decisions, statutes, rules,
regulations and other laws of the State of
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California to the extent same are inconsistent and in conflict with specific
terms and provisions hereof.
Section 19.5 Default Interest; Other Rights of Landlord. Any Rent
------------------------------------------
or damages payable under this Lease and not paid when due shall bear interest at
the Interest Rate from the due date until paid, and the interest shall be deemed
Additional Rent. If Tenant fails to pay any Additional Rent when due, Landlord,
in addition to any other right or remedy, shall have the same rights and
remedies as in the case of a default by Tenant in the payment of Fixed Rent. If
Tenant is in arrears in the payment of Rent, Tenant waives Tenant's right, if
any, to designate the items against which any payments made by Tenant are to be
credited, and Landlord may apply any payments made by Tenant to any items
Landlord sees fit, regardless of any request by Tenant. Landlord reserves the
right, without liability to Tenant and without constituting any claim of
constructive eviction, to suspend furnishing or rendering to Tenant any
property, material, labor, utility or other service, whenever Landlord is
obligated to furnish or render the same at the expense of Tenant, in the event
that (but only for so long as) an Event of Default by Tenant is continuing
hereunder.
ARTICLE 20
LANDLORD'S RIGHT TO CURE; FEES AND EXPENSES
If Tenant defaults in the performance of its obligations under this
Lease, Landlord, without thereby waiving such default, may perform such
obligation for the account and at the expense of Tenant: (a) immediately or at
any time thereafter, and without notice, in the case of emergency creating a
risk of imminent harm to persons or property or in the case the default (i) will
result in a material violation of any Requirement, or (ii) will result in a
cancellation of any insurance policy maintained by Landlord, and (b) in any
other case if an Event of Default exists and Landlord gives notice of Landlord's
intention so to perform the defaulted obligation. As soon as reasonably
possible following Landlord's commencement of any action pursuant to clause (a)
above, Landlord shall advise Tenant in writing of the initiation by Landlord of
any such actions. All costs and expenses incurred by Landlord in connection
with any such performance by it for the account of Tenant and all costs and
expenses, including reasonable counsel fees and disbursements, incurred by
Landlord in any action or proceeding (including any unlawful detainer
proceeding) brought by Landlord to enforce any obligation of Tenant under this
Lease and/or right of Landlord in or to the Premises, shall be paid by Tenant to
Landlord on demand, with interest thereon at the Interest Rate from the date
incurred by Landlord. Except as expressly provided to the contrary in this
Lease, all costs and expenses which, pursuant to this Lease (including the Rules
and Regulations) are incurred by Landlord and payable to Landlord by Tenant, and
all charges, amounts and sums payable to Landlord by Tenant for any property,
material, labor, utility or other services which, pursuant to this Lease or at
the request and for the account of Tenant, are provided, furnished or rendered
by Landlord, shall become due and payable by Tenant to Landlord in accordance
with the terms of the bills rendered by Landlord to Tenant.
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ARTICLE 21
NO REPRESENTATIONS BY LANDLORD; LANDLORD'S APPROVAL
Section 21.1 No Representations. Except as expressly set forth
------------------
herein, Landlord and Landlord's agents have made no warranties, representations,
statements or promises with respect to the Building, the Real Property or the
Premises and no rights, easements or licenses are acquired by Tenant by
implication or otherwise. This Lease contains the entire agreement between the
parties and all understandings and agreements previously made between Landlord
and Tenant are merged in this Lease, which alone fully and completely expresses
their agreement. Tenant is entering into this Lease after full investigation and
is not relying upon any statement or representation made by Landlord not
embodied in this Lease.
Section 21.2 Written Approval. All references in this Lease to
----------------
the consent or approval or Landlord mean the written consent or approval of
Landlord, duly executed by Landlord.
Section 21.3 No Money Damages. Wherever in this Lease Landlord's
----------------
consent or approval is required, Landlord hereby acknowledges its duty to act in
each such case consistent with a covenant of good faith and fair dealing (but
Landlord shall not otherwise be subject to a "reasonableness" standard where
Landlord has reserved its right to act in its sole discretion). If Landlord
refuses to grant such consent or approval, whether or not Landlord expressly
agreed that such consent or approval would not be unreasonably withheld, Tenant
shall not make, and Tenant hereby waives, any claim for money damages (including
any claim by way of set-off, counterclaim or defense) based upon Tenant's claim
or assertion that Landlord unreasonably withheld or delayed its consent or
approval. Tenant's sole remedy shall be an action or proceeding to enforce such
provision, by specific performance, injunction or declaratory judgment.
Notwithstanding the foregoing, Tenant's waiver set forth in the second sentence
of this Section 21.3 shall not apply to any final non-appealable judgment that
Tenant obtains from a court of competent jurisdiction that Landlord acted in bad
faith in making its determination to withhold its consent or approval.
Section 21.4 Vibrations. Tenant recognizes and acknowledges
----------
that the operation of the Building equipment may cause minimal amounts of
vibration or noise which may be transmitted throughout the Premises. Beyond
using its commercially reasonable efforts to reasonably minimize any such
vibration or noise, Landlord shall have no obligation to reduce such vibration
or noise beyond that which is customary in comparable first-class office
buildings of similar age and construction.
Section 21.5 Light and Air.
-------------
Tenant covenants and agrees that no diminution of light, air or view
by any structure which may hereafter be erected (whether or not by Landlord)
shall entitle Tenant to any reduction of Rent under this Lease, result in any
liability of Landlord to Tenant, or in any other way affect this Lease or
Tenant's obligations.
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ARTICLE 22
END OF TERM
Section 22.1 Expiration. Upon the expiration or other termination of
----------
this Lease, Tenant shall quit and surrender the Premises to Landlord vacant,
broom clean and in good order and condition, ordinary wear and tear, repairs and
damage for which Tenant is not responsible under the terms of this Lease
excepted, and Tenant shall remove all of Tenant's Property and Tenant's
Alterations as may be required pursuant to Article 5 of this Lease. The
foregoing obligation shall survive the expiration or sooner termination of the
Term.
Section 22.2 Holdover Rent. Landlord and Tenant recognize that the
-------------
damage to Landlord resulting from any failure by Tenant to timely surrender
possession of the Premises may be substantial, may exceed the amount of the Rent
theretofore payable hereunder, and will be impossible to accurately measure.
Tenant therefore agrees that if possession of the Premises is not surrendered to
Landlord within twenty-four (24) hours after the Expiration Date or sooner
termination of the Term, in addition to any other rights or remedies Landlord
may have hereunder or at law, Tenant shall (a) pay to Landlord for each month
during which Tenant holds over in the Premises after the Expiration Date or
sooner termination of the Term, in addition to all Additional Rent, (i) for the
first month, a sum equal to one hundred twenty-five percent (125%) of the Fixed
Rent payable under this Lease for the last full calendar month of the Term
("Final Fixed Rent"), for the next two (2) months of any such holdover, one
hundred fifty percent (150%) of such Final Fixed Rent and, thereafter, two
hundred percent (200%) of such Final Fixed Rent, (b) be liable to Landlord for
(i) any payment or rent concession which Landlord may be required to make to any
tenant obtained by Landlord for all or any part of the Premises (a "New Tenant")
in order to induce such New Tenant not to terminate its lease by reason of the
holding-over by Tenant, and (ii) the loss of the benefit of the bargain if any
New Tenant shall terminate its lease by reason of the holding-over by Tenant,
and (c) indemnify Landlord against all claims for damages by any New Tenant. All
such holdover rent shall be determined based upon the number of calendar days
during any month such holdover occurs and the actual number of calendar days in
any such month in which Tenant's holding-over continues. No holding-over by
Tenant, nor the payment to Landlord of the amounts specified above, shall
operate to extend the Term hereof. Nothing herein contained shall be deemed to
permit Tenant to retain possession of the Premises after the Expiration Date or
sooner termination of this Lease, and no acceptance by Landlord of payments from
Tenant after the Expiration Date or sooner termination of the Term shall be
deemed to be other than on account of the amount to be paid by Tenant in
accordance with the provisions of this Article 22. All of Tenant's obligations
under this Article shall survive the expiration or earlier termination of the
Term of this Lease.
ARTICLE 23
QUIET ENJOYMENT
Provided this Lease is in full force and effect and no Event of
Default then exists, Tenant may peaceably and quietly enjoy the Premises without
hindrance by Landlord or any person lawfully claiming through or under Landlord,
subject to the terms and conditions of this Lease and to all Superior Leases and
Mortgages.
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ARTICLE 24
NO SURRENDER; NO WAIVER
Section 24.1 No Surrender or Release. No act or thing done by
-----------------------
Landlord or Landlord's agents or employees during the Term shall be deemed an
acceptance of a surrender of the Premises, and no provision of this Lease shall
be deemed to have been waived by Landlord, unless such waiver is in writing and
is signed by Landlord, and any such waiver shall be effective only for the
specific purpose and in the specific instance in which given. If Tenant at any
time desires to have Landlord sublet the Premises for Tenant's account, Landlord
or Landlord's agents are authorized to receive Tenant's keys to the Premises for
such purpose without releasing Tenant from any of the obligations under this
Lease, and Tenant hereby relieves Landlord of any liability for loss of or
damage to any of Tenant's effects in connection with such subletting.
Section 24.2 No Waiver. The failure of either party to seek redress
---------
for violation of, or to insist upon the strict performance of, any covenant or
condition of this Lease, or any of the Rules and Regulations, shall not be
construed as a waiver or relinquishment for the future performance of such
obligations of this Lease or the Rules and Regulations, or of the right to
exercise such election but the same shall continue and remain in full force and
effect with respect to any subsequent breach, act or omission. The receipt by
Landlord of any Rent payable pursuant to this Lease or any other sums with
knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. No payment by Tenant or receipt by Landlord of a lesser
amount than the monthly Fixed Rent or Additional Rent herein stipulated shall be
deemed to be other than a payment on account of the earliest stipulated Fixed
Rent or Additional Rent, or as Landlord may elect to apply such payment, nor
shall any endorsement or statement on any check or any letter accompanying any
check or payment as Fixed Rent or Additional Rent 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 Fixed Rent or Additional Rent or
pursue any other remedy provided in this Lease. The existence of a right of
renewal or extension of this Lease, or the exercise of such right, shall not
limit Landlord's right to terminate this Lease in accordance with the terms
hereof, or create any option for further extension or renewal of this Lease.
ARTICLE 25
WAIVER OF TRIAL BY JURY
THE PARTIES HEREBY AGREE THAT THIS LEASE CONSTITUTES A WRITTEN CONSENT
TO WAIVER OF TRIAL BY JURY PURSUANT TO THE PROVISIONS OF CALIFORNIA CODE OF
CIVIL PROCEDURE SECTION 631 AND EACH PARTY DOES HEREBY CONSTITUTE AND APPOINT
THE OTHER PARTY ITS TRUE AND LAWFUL ATTORNEY-IN-FACT, WHICH APPOINTMENT IS
COUPLED WITH AN INTEREST, AND EACH PARTY DOES HEREBY AUTHORIZE AND EMPOWER THE
OTHER PARTY, IN THE NAME, PLACE AND STEAD OF SUCH PARTY, TO FILE THIS LEASE WITH
THE CLERK OR JUDGE OF ANY COURT OF COMPETENT
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JURISDICTION AS A STATUTORY WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY.
LANDLORD'S INITIALS: _____ TENANT'S INITIALS: _____
If Landlord commences any summary proceeding against Tenant, Tenant
will not interpose any counterclaim of any nature or description in any such
proceeding (unless failure to impose such counterclaim would preclude Tenant
from asserting in a separate action the claim which is the subject of such
counterclaim), and will not seek to consolidate such proceeding with any other
action which may have been or will be brought in any other court by Tenant.
This Article 25 shall survive the expiration or earlier termination of this
Lease.
ARTICLE 26
INABILITY TO PERFORM
This Lease and the obligations of the parties hereunder (including the
obligation of Tenant to pay Rent and to perform all of the other covenants and
agreements of Tenant hereunder) shall not be affected, impaired or excused by
any Unavoidable Delays except as otherwise expressly set forth herein. Each
party shall use reasonable efforts to promptly notify the other of any
Unavoidable Delay which prevents such party from fulfilling any of its
obligations under this Lease. Notwithstanding the foregoing, no Unavoidable
Delay shall excuse the timely performance of any obligation under this Lease
which is to be performed or discharged by the payment of money.
ARTICLE 27
NOTICES
Except as otherwise expressly provided in this Lease, consents,
notices, demands, requests, approvals or other communications given under this
Lease shall be in writing and shall be deemed sufficiently given or rendered if
delivered by hand (provided a signed receipt is obtained) or if sent by
registered or certified mail (return receipt requested) or by a nationally
recognized overnight delivery service making receipted deliveries, addressed as
follows:
if to Tenant, (a) at Tenant's address set forth on the first page of
this Lease, Attn: Sr. Director, Operations and Attention: General Counsel, if
mailed prior to Tenant's taking possession of the Premises, or (b) at the
Building, Attn: Sr. Director, Operations and Attention: General Counsel, if
mailed subsequent to Tenant's taking possession of the Premises, or
if to Landlord, at Landlord's address set forth on the first page of
this Lease, Attn: Chief Financial Officer, and with copies to (v) Tishman Speyer
Properties L.P., 444
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Castro Street, Suite 520, Mountain View, CA 94041, Attn: Property Manager -CO
(w) Tishman Speyer Properties L.P., 520 Madison Avenue, New York, New York
10022, Attn: General Counsel, (x) Tishman Speyer Properties L.P., 520 Madison
Avenue, New York, New York 10022, Attn: Head of Management Department and (y)
any Mortgagee or Lessor which shall have requested copies of notices, by notice
given to Tenant in accordance with the provisions of this Article 27 at the
address designated by such Mortgagee or Lessor;
or to such other address(es) as either Landlord or Tenant or any Mortgagee or
Lessor may designate as its new address(es) for such purpose by notice given to
the other in accordance with the provisions of this Article 27. Any such
approval, consent, notice, demand, request or other communication shall be
deemed to have been given on the date of receipted delivery or refusal to accept
delivery or three (3) Business Days after it shall have been mailed as provided
in this Article 27, whichever is earlier.
ARTICLE 28
RULES AND REGULATIONS
Tenant and Tenant's contractors, employees, agents, visitors and
licensees shall observe and comply with the Rules and Regulations, as reasonably
supplemented or reasonably amended from time to time, provided, that in case of
any conflict or inconsistency between the provisions of this Lease and any of
the Rules and Regulations as originally promulgated or as so supplemented or so
amended from time to time, the provisions of this Lease shall control. Landlord
reserves the right, from time to time, so to adopt additional Rules and
Regulations and so to amend the Rules and Regulations then in effect.
ARTICLE 29
BROKER
Section 29.1 Broker Representations. Landlord has retained
----------------------
Landlord's Broker as leasing agent in connection with this Lease and Landlord
will be solely responsible for any fee that may be payable to Landlord's Broker.
Landlord agrees to pay a commission to Tenant's Broker pursuant to a separate
agreement. Each of Landlord and Tenant represents and warrants to the other that
it has not dealt with any broker in connection with this Lease other than
Landlord's Agent, Landlord's Broker and Tenant's Broker and that to the best of
its knowledge and belief, no other broker, finder or like entity procured or
negotiated this Lease or is entitled to any fee or commission in connection
herewith. The execution and delivery of this Lease by each party shall be
conclusive evidence that each party has relied upon the foregoing
representations and warranties.
Section 29.2 Indemnity. Each of Landlord and Tenant shall indemnify,
---------
defend, protect and hold the other party harmless from and against any and all
costs expenses, claims and liabilities (including reasonable attorneys' fees and
disbursements) which the indemnified party may incur by reason of any claim of
or liability to any broker, finder or like agent (other than Landlord's Agent,
Landlord's Broker and Tenant's Broker) arising out of any dealings claimed
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to have occurred between the indemnifying party and the claimant in connection
with this Lease, and/or the above representation being false. Landlord shall
indemnify, defend, protect and hold Tenant harmless from any claim of or
liability to Landlord's Agent or Landlord's Broker respecting any fee or
commission relating to this Lease. The provisions of this Article 29 shall
survive the expiration or earlier termination of the Term of this Lease.
ARTICLE 30
INDEMNITY
Section 30.1 (a) Tenant's Indemnity. Tenant shall not do or permit
------------------
to be done any act or thing upon the Premises or the Building which may subject
Landlord to any liability or responsibility for injury, damages to persons or
property or to any liability by reason of any violation of law or of any
Requirement, and shall exercise such control over the Premises as to fully
protect Landlord against any such liability. Tenant shall indemnify, defend,
protect and hold harmless each of the Indemnitees from and against any and all
Losses (as defined in subsection (c) hereof), resulting from any claims (i)
against Indemnitees to the extent arising from any act, omission or negligence
of Tenant, its contractors, licensees, agents, servants, employees, invitees or
visitors and (ii) against the Indemnitees arising from any accident, injury or
damage whatsoever caused to any person or to the property of any person and
occurring during or (if Tenant shall continue to use and occupy the Premises),
after the expiration of the Term, in the Premises, except to the extent that any
such accident, injury or damage results from the active negligence or willful
misconduct of Landlord or its contractors, agents or employees.
(b) Landlord's Indemnity. Landlord shall indemnify, defend and
--------------------
hold harmless Tenant from and against all claims against Tenant arising from any
accident, injury or damage whatsoever caused to any person or the property of
any person in or about the common or public areas of the Building (specifically
excluding the Premises) to the extent attributable to the gross negligence or
willful misconduct of Landlord or its employees or agents.
(c) Indemnity Inclusions. For purposes of this Article 30, the
--------------------
term "Losses" means any and all losses, liabilities, damages, claims, judgments,
fines, suits, demands, costs, interest and expenses of any kind or nature
(including reasonable attorneys' fees and disbursements) incurred in connection
with any claim, proceeding or judgment and the defense thereof, and including
all costs of repairing any damage to the Premises or the Building or the
appurtenances of any of the foregoing to which a particular indemnity and hold
harmless agreement applies.
Section 30.2 Defense and Settlement. If any claim, action or
----------------------
proceeding is made or brought against any Indemnitee, then upon demand by an
Indemnitee, Tenant, at its sole cost and expense, shall resist or defend such
claim, action or proceeding in the Indemnitee's name (if necessary), by
attorneys approved by the Indemnitee, which approval shall not be unreasonably
withheld. Attorneys for Tenant's insurer shall hereby be deemed approved for
purposes of this Section 30.2. Notwithstanding anything herein contained to the
contrary, Tenant may direct the Indemnitee to settle any claim, suit or other
proceeding provided that (a) such settlement shall involve no obligation on the
part of the Indemnitee other than the payment of money, (b) any payments to be
made pursuant to such settlement shall be paid in full exclusively
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by Tenant at the time such settlement is reached, (c) such settlement shall not
require the Indemnitee to admit any liability, and (d) the Indemnitee shall have
received an unconditional release from the other parties to such claim, suit or
other proceeding. The provisions of this Article 30 shall survive the expiration
or earlier termination of this Lease.
ARTICLE 31
MISCELLANEOUS
Section 31.1 Delivery. This Lease shall not be binding upon Landlord
--------
or Tenant unless and until Landlord shall have executed and delivered a fully
executed copy of this Lease to Tenant.
Section 31.2 Transfer of Real Property. Landlord's obligations under
-------------------------
this Lease shall not be binding upon the Landlord named herein after the sale,
conveyance, assignment or transfer (collectively a "Transfer") by such Landlord
(or upon any subsequent landlord after the Transfer by such subsequent landlord)
of its interest in the Building or the Real Property, as the case may be, and in
the event of any such Transfer, Landlord (and any such subsequent Landlord)
shall be entirely freed and relieved of all covenants and obligations of
Landlord hereunder, and the transferee of Landlord's interest (or that of such
subsequent Landlord) in the Building or the Real Property, as the case may be,
shall be deemed to have assumed all obligations under this Lease.
Section 31.3 Limitation on Liability. The liability of Landlord for
-----------------------
Landlord's obligations under this Lease shall be limited to Landlord's interest
in the Real Property or any interest of Landlord in any net insurance claims,
condemnation awards, sales proceeds or rents, all as attributable to Landlord's
interest in the Real Property, and Tenant shall not look to any other property
or assets of Landlord or the property or assets of any partner, shareholder,
director, officer, principal, employee or agent, directly and indirectly, of
Landlord (collectively, the "Parties") in seeking either to enforce Landlord's
obligations under this Lease or to satisfy a judgment for Landlord's failure to
perform such obligations; and none of the Parties shall be personally liable for
the performance of Landlord's obligations under this Lease.
Section 31.4 Rent. Notwithstanding anything to the contrary
----
contained in this Lease, all amounts payable by Tenant to or on behalf of
Landlord under this Lease, whether or not expressly denominated Fixed Rent,
Tenant's Tax Payment, Tenant's Operating Payment, Additional Rent or Rent, shall
constitute rent for the purposes of Section 502(b)(6) of the United States
Bankruptcy Code.
Section 31.5 Entire Document. This Lease (including any Schedules
---------------
and Exhibits referred to herein and all supplementary agreements provided for
herein) contains the entire agreement between the parties and all prior
negotiations and agreements are merged into this Lease. All of the Schedules and
Exhibits attached hereto are incorporated in and made a part of this Lease,
provided that in the event of any inconsistency between the terms and provisions
of this Lease and the terms and provisions of the Schedules and Exhibits hereto,
the terms and provisions of this Lease shall control. All Article and Section
references set forth herein shall,
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unless the context otherwise requires, be deemed references to the Article s and
Sections of this Lease.
Section 31.6 Governing Law. This Lease shall be governed in all
-------------
respects by the laws of the State of California.
Section 31.7 Unenforceability. If any provision of this Lease, or
----------------
its application to any person or circumstance, shall ever be held to be invalid
or unenforceable, then in each such event the remainder of this Lease or the
application of such provision to any other person or any other circumstance
(other than those as to which it shall be invalid or unenforceable) shall not be
thereby affected, and each provision hereof shall remain valid and enforceable
to the fullest extent permitted by law.
Section 31.8 Lease Disputes. (a) Except as expressly provided to
--------------
the contrary in this Lease, Landlord and Tenant agree that all disputes arising,
directly or indirectly, out of or relating to this Lease, and all actions to
enforce this Lease, shall be dealt with and adjudicated in the state courts of
the State of California or the United States District Court for the Northern
District of California and for that purpose each of Landlord and Tenant hereby
expressly and irrevocably submits itself to the jurisdiction of such courts. So
far as is permitted under applicable law, this consent to personal jurisdiction
shall be self-operative and no further instrument or action, other than service
of process in one of the manners specified in this Lease, or as otherwise
permitted by law, shall be necessary in order to confer jurisdiction upon it in
any such court.
(b) To the extent that Tenant has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
Tenant irrevocably waives such immunity in respect of its obligations under this
Lease.
Section 31.9 Landlord's Agent. Unless Landlord shall render written
----------------
notice to Tenant to the contrary, Tishman Speyer Properties, L.P. is authorized
to act as Landlord's agent in connection with the performance of this Lease, and
Tenant shall direct all correspondence and requests to, and shall be entitled to
rely upon correspondence received from, Tishman Speyer Properties, L.P., as
agent for the Landlord in accordance with Article 27. Tenant acknowledges that
Tishman Speyer Properties, L.P. is acting solely as agent for Landlord in
connection with the foregoing; and neither Tishman Speyer Properties, L.P. nor
any of its direct or indirect partners, officers, shareholders, directors,
employees, principals, agents or representatives shall have any liability to
Tenant in connection with the performance of this Lease, and Tenant waives any
and all claims against any and all of such parties arising out of, or in any way
connected with, this Lease, the Building or the Real Property.
Section 31.10 Estoppel. Within fifteen (15) days following request
--------
from Landlord, any Mortgagee or any Lessor, Tenant shall deliver to Landlord a
written statement executed and acknowledged by Tenant, in form satisfactory to
Landlord, (a) stating the Commencement Date and the Expiration Date, and that
this Lease is then in full force and effect and has not been modified (or if
modified, setting forth all modifications), (b) setting forth the
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date to which the Fixed Rent and any Additional Rent have been paid, together
with the amount of monthly Fixed Rent then payable, (c) stating whether or not,
to the best of Tenant's knowledge, Landlord is in default under this Lease, and,
if Landlord is in default, setting forth the specific nature of all such
defaults, (d) stating the amount of the Security Deposit, if any, under this
Lease, (e) stating whether there are any subleases or assignments affecting the
Premises, (f) stating the address of Tenant to which all notices and
communication under the Lease shall be sent, and (g) responding to any other
matters reasonably requested by Landlord, such Mortgagee or such Lessor. Tenant
acknowledges that any statement delivered pursuant to this Section 31.10 may be
relied upon by any purchaser or owner of the Real Property or the Building, or
all or any portion of Landlord's interest in the Real Property or the Building
or any Superior Lease, or by any Mortgagee, or assignee thereof or by any
Lessor, or assignee thereof.
Section 31.11 Certain Interpretational Rules. For purposes of this
------------------------------
Lease, whenever the words "include", "includes", or "including" are used, they
shall be deemed to be followed by the words "without limitation" and, whenever
the circumstances or the context requires, the singular shall be construed as
the plural, the masculine shall be construed as the feminine and/or the neuter
and vice versa. This Lease shall be interpreted and enforced without the aid of
any canon, custom or rule of law requiring or suggesting construction against
the party drafting or causing the drafting of the provision in question.
Section 31.12 Captions. The captions in this Lease are inserted only
--------
as a matter of convenience and for reference and in no way define, limit or
describe the scope of this Lease or the intent of any provision hereof.
Section 31.13 Parties Bound. The terms, covenants, conditions and
-------------
agreements contained in this Lease shall bind and inure to the benefit of
Landlord and Tenant and, except as otherwise provided in this Lease, to their
respective legal representatives, successors, and assigns.
Section 31.14 Memorandum of Lease. This Lease shall not be recorded;
-------------------
however, at Landlord's request, Landlord and Tenant shall promptly execute,
acknowledge and deliver a memorandum with respect to this Lease sufficient for
recording and Landlord may record the Memorandum.
Section 31.15 Counterparts. This Lease may be executed in two or
------------
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument.
Section 31.16 Rooftop Communications Equipment. During the Term of
--------------------------------
this Lease (and any renewals or extensions thereof), Tenant shall have the
right, without payment of any fee or charge therefor, to install and operate
microwave transmitter-receivers or satellite dishes (each, a "Satellite Dish")
of a weight, height and width reasonably acceptable to Landlord and as
reasonably necessary for Tenant's use of the Premises and conduct of its
business therein. Landlord shall not withhold its consent to the installation of
a Satellite Dish reasonably comparable to those installed on buildings in
Cupertino, California that are comparable to the Building. Tenant's rights
pursuant to this Section 31.16 may not be assigned
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independent of this Lease or sublet other than to a subtenant in occupancy of,
and conducting business operations within, the Premises and are subject to the
following:
(a) The precise location of any Satellite Dish shall be as
approved by Landlord in its reasonable discretion within ten (10) days following
receipt of Tenant's request to install such Satellite Dish on the roof of the
Building.
(b) Tenant shall pay any federal, state and local taxes
applicable to the installation and use of any Satellite Dish and Tenant shall
procure, maintain and pay for and obtain all fees, permits and governmental
agency licenses necessary in connection with the installation, maintenance and
operation of such Satellite Dish; provided, however, that Landlord shall
reasonably cooperate with the efforts of Tenant in connection with any
governmental application or filing required thereby.
(c) Tenant shall be permitted, at its expense, but without
separate charge other than any charges permitted to be imposed by Landlord under
Article 5 hereof, to install, modify, alter, repair, maintain, operate and
replace in one (1) existing chaseway of the Building in an area in the core of
the Building one (1) non-dedicated conduit for its cabling use (and the use of
the cables contained therein connecting to the Building's roof for operation of
Tenant's Satellite Dish(es)). All installations required in connection with any
Satellite Dish shall be made by means of conduits, wires or cables that will
pass through existing openings in the walls or roof decks of the Building, and
all cables and wires located on the roof of the Building used in connection with
any Satellite Dish shall be covered by rust-proof conduits and attachments. In
no event shall any of Tenant's installations be made through the roof surface or
membrane of the Building without the prior written consent of Landlord, which
consent may be withheld in Landlord's sole and absolute discretion. The
installation of any Satellite Dish shall be subject to Landlord's review and
approval and shall conform to the engineering standards commonly used for
installing similar microwave and satellite dishes on comparable buildings.
(d) Tenant, at its sole cost and expense, shall comply with all
present and future laws and with any reasonable requirements of any applicable
fire rating bureau relating to the maintenance, use, installation and operation
of any Satellite Dish. Tenant shall install, maintain and operate all of its
equipment used in connection with any Satellite Dish in conformity with all laws
and all regulations of all government agencies having jurisdiction over the
installation, use and operation of such Satellite Dish, including, without
limitation, the Federal Aviation Administration and the Federal Communications
Commission; provided, however, that if compliance with such laws or regulations
would require a change in the size, configuration or location of any Satellite
Dish, such changes shall be subject to Landlord's prior written consent in
accordance with subsection (a) above.
(e) Prior to the expiration or earlier termination of the Term of
this Lease, Tenant shall remove any and all Satellite Dishes and all wires and
cables used in connection with such Satellite Dish(es), and shall restore and
repair all damage to the Building occasioned by the installation, maintenance or
removal of such Satellite Dish(es). If Tenant fails to timely complete such
removal, restoration and repair, all sums incurred by Landlord to complete such
work shall be paid by Tenant to Landlord upon demand.
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(f) Landlord makes no representations or warranties whatsoever
with respect to the fitness or suitability of the Building for the installation,
maintenance and operation of any Satellite Dish, including, without limitation,
with respect to the quality and clarity of any receptions and transmissions to
or from any Satellite Dish and the presence of any interference with such
signals, whether emanating from the Building or otherwise.
(g) Tenant must contact the manager of the Building prior to the
date Tenant proposes to install any Satellite Dish on the roof of the Building
in order to make arrangements for the movement of any materials needed in
connection with the installation of such Satellite Dish.
(h) Tenant shall provide adequate maintenance personnel in order
to ensure the safe operation of any Satellite Dish. In addition, Tenant shall
install, maintain and operate all of its equipment used in connection with any
Satellite Dish in a fashion and manner so as not to interfere with the use and
operation of any: (i) other television or radio equipment in the Building; (ii)
present or future electronic control system for any of the Building Systems or
the operation of the elevators in the Building; (iii) other transmitting,
receiving or master television, telecommunications or microwave antenna
equipment currently located on the roof of the Building; or (iv) any radio
communication system now used by Landlord. In addition, Tenant shall use its
commercially reasonable efforts to ensure that Tenant will not interfere with
any equipment installed by Landlord in the future. Landlord shall use its
commercially reasonable efforts to ensure that Tenant's equipment will not be
unreasonably interfered with.
Section 31.17 Roof Deck. Landlord agrees that, following Landlord's
---------
completion of Landlord's Work, Tenant may, at Tenant's election and at Tenant's
sole cost and expense, reinstall the Roof Deck (as defined in Schedule 1 to the
Workletter Agreement) subject to the requirements of Article 5. Upon any such
reinstallation, the Roof Deck shall be deemed to be a portion of the Common
Areas. Tenant shall not use the Roof Deck in any manner that could adversely
affect the integrity of the roof membrane, and Tenant shall take reasonable
precautions to prevent membrane punctures by sharp objects. Landlord understands
and acknowledges that, if Tenant so elects to reinstall the Roof Deck, Tenant
intends to place on the Roof Deck chairs, tables, planters and other personal
property (collectively, the "Roof Deck Furniture"). In connection therewith,
Tenant shall not install any Roof Deck Furniture which is visible from the
street below without Landlord's consent, which consent shall not be unreasonably
withheld. Tenant agrees that any use of the Roof Deck shall be at Tenant's sole
risk. Tenant shall, at Tenant's sole cost and expense, take all precautions
necessary to prevent any objects from falling off of, or being thrown from, the
Roof Deck, including, without limitation, implementing all safety measures
reasonably requested by Landlord. Except to the extent caused by its gross
negligence or willful misconduct, Landlord shall have no liability to Tenant for
any loss, cost, claim, liability or expense arising out of Tenant's use of the
Roof Deck, and Tenant shall reimburse Landlord for and protect, indemnify,
defend, and hold Landlord harmless from and against any and all claims,
liability, damage or loss arising out of any injury to or death of any person or
damage to or destruction of property attributable to or resulting from the use
of the Roof Deck by Tenant or any Tenant Party.
Section 31.18 Limitation on Damages. Except as otherwise provided in
---------------------
Section 1951.2 of the California Civil Code and in Section 22.2 of this Lease
and notwithstanding any
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provision of this Lease other than such Section 22.2 to the contrary, in no
event shall Landlord or Tenant be liable or responsible for any indirect,
consequential, punitive or exemplary damages.
Section 31.19 Expedited Arbitration. In connection with any dispute
---------------------
between Landlord and Tenant pursuant to Section 15.14 hereof, Landlord and
Tenant agree that: (a) upon the request of Tenant, the dispute shall be
submitted to the AAA for disposition pursuant to the "Expedited Procedures of
the Association" of the AAA; (b) the decision of the AAA shall be final and all
actions necessary to implement the decision of the AAA shall be undertaken as
soon as possible, but in no event later than ten (10) Business Days after the
rendering of such decision; (c) all fees payable to the AAA for services
rendered in connection with the resolution of the dispute shall be paid by the
party suffering the adverse decision of the AAA. For purposes of this Section
31.19, the phrase "Expedited Procedures of the Association" shall mean those
procedures set forth in paragraphs 53 through 57 of that certain booklet
published by the Association and titled "Commercial Arbitration Rules," as
amended and effective on November 1, 1993.
ARTICLE 32
TAX STATUS OF BENEFICIAL OWNERS
Tenant recognizes and acknowledges that Landlord and/or certain
beneficial owners of Landlord may from time to time qualify as real estate
investment trusts pursuant to Sections 856 et seq. of the Code or as entities
described in Section 511(a)(2) of the Code, and that avoiding (a) the loss of
such status, (b) the receipt of any income derived under any provision of this
Lease that does not constitute "rents from real property" (in the case of real
estate investment trusts) or that constitutes "unrelated business taxable
income" (in the case of entities described in Section 511(a)(2) of the Code),
and (c) the imposition of penalty or similar taxes (each an "Adverse Event") is
of material concern to Landlord and such beneficial owners. In the event that
this Lease or any document contemplated hereby could, in the opinion of counsel
to Landlord, result in or cause an Adverse Event, Tenant agrees to cooperate
with Landlord in negotiating an amendment or modification thereof and shall at
the request of Landlord execute and deliver such documents reasonably required
to effect such amendment or modification. Any amendment or modification pursuant
to this Article 32 shall be structured so that the economic results to Landlord
and Tenant shall be substantially similar to those set forth in this Lease
without regard to such amendment or modification. Without limiting any of
Landlord's other rights under this Article 32, Landlord may waive the receipt of
any amount payable to Landlord hereunder and such waiver shall constitute an
amendment or modification of this Lease with respect to such payment.
ARTICLE 33
SECURITY DEPOSIT
Section 33.1 Security Deposit. Tenant shall deposit the Security
----------------
Deposit with Landlord upon the execution of this Lease in cash as security for
the faithful performance and
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observance by Tenant of the terms, covenants and conditions of this Lease,
including the surrender of possession of the Premises to Landlord as herein
provided.
Section 33.2 Letter of Credit. In lieu of a cash deposit, Tenant may
----------------
deliver the Security Deposit to Landlord in the form of a clean, irrevocable,
non-documentary and unconditional letter of credit (the "Letter of Credit")
issued by and drawable upon (i) Bank of Boston or (ii) any commercial bank,
trust company, national banking association or savings and loan association with
offices for banking purposes in San Francisco, California, satisfactory to
Landlord (the "Issuing Bank"), which has outstanding unsecured, uninsured and
unguaranteed indebtedness, or shall have issued a letter of credit or other
credit facility that constitutes the primary security for any outstanding
indebtedness (which is otherwise uninsured and unguaranteed), that is then
rated, without regard to qualification of such rating by symbols such as "+" or
"-" or numerical notation, "Aa" or better by Moody's Investors Service and "AA"
or better by Standard & Poor's Rating Service, and has combined capital, surplus
and undivided profits of not less than Five Hundred Million Dollars
($500,000,000.00). Such Letter of Credit shall (a) name Landlord as beneficiary,
(b) be in the amount of the Security Deposit, (c) have a term of not less than
one year, (d) permit multiple drawings, (e) be fully transferable by Landlord
without the payment of any fees or charges by Landlord, and (f) otherwise be in
form and content satisfactory to Landlord. If upon any transfer of the Letter of
Credit, any fees or charges shall be so imposed, then such fees or charges shall
be payable solely by Tenant and the Letter of Credit shall so specify. The
Letter of Credit shall provide that it shall be deemed automatically renewed,
without amendment, for consecutive periods of one year each thereafter during
the Term unless the Issuing Bank sends a notice (the "Non-Renewal Notice") to
Landlord by certified mail, return receipt requested, not less than forty-five
(45) days next preceding the then expiration date of the Letter of Credit
stating that the Issuing Bank has elected not to renew the Letter of Credit.
Landlord shall have the right, upon receipt of the Non-Renewal Notice, to draw
the full amount of the Letter of Credit, by sight draft on the Issuing Bank, and
shall thereafter hold or apply the cash proceeds of the Letter of Credit
pursuant to the terms of this Article 33 until Tenant delivers to Landlord a
substitute Letter of Credit which meets the requirements of this Section 33.2.
The Issuing Bank shall agree with all drawers, endorsers and bona fide holders
that drafts drawn under and in compliance with the terms of the Letter of Credit
will be duly honored upon presentation to the Issuing Bank at an office location
in San Francisco, California, or with respect to the Bank of Boston, any of its
offices in the States of California or New York. The Letter of Credit shall be
subject in all respects to the Uniform Customs and Practice for Documentary
Credits (1993 revision), International Chamber of Commerce Publication No. 500.
Section 33.3 Application of Security. If (a) an Event of Default by
-----------------------
Tenant occurs in the payment or performance of any of the terms, covenants or
conditions of this Lease, including the payment of Rent, or any payment default
following Tenant's bankruptcy as to which no notice or cure is required, or (b)
Landlord receives a Non-Renewal Notice and Tenant does not provide a substitute
Letter of Credit satisfying the requirements of Section 33.2 within ten (10)
Business Days following the date of such Non-Renewal Notice, Landlord may apply
or retain the whole or any part of the cash Security Deposit or may notify the
Issuing Bank and thereupon receive all or such portion of the Security Deposit
represented by the Letter of Credit as is then, and so long as such Event of
Default is continuing, thereafter needed for the uses hereinbelow authorized,
and use, apply, or retain the whole or any part of such proceeds, as the case
may be, to the extent required for the payment of any Fixed Rent or any other
sum as to
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which Tenant is in default including (a) any sum which Landlord may expend or
may be required to expend by reason of Tenant's default, and/or (b) any damages
or Deficiency to which Landlord is entitled pursuant to this Lease or applicable
Requirements, whether such damages or Deficiency accrues before or after summary
proceedings or other reentry by Landlord. If Landlord applies or retains any
part of the Security Deposit, Tenant, upon demand, shall deposit with Landlord
the amount so applied or retained so that Landlord shall have the full Security
Deposit on hand at all times during the Term. If Tenant shall fully and
faithfully comply with all of the terms, covenants and conditions of this Lease,
the Security Deposit (or so much thereof as remains after Landlord has been
adequately compensated for damages due to Tenant's failure to comply fully with
the terms, covenants and conditions of this Lease) shall be returned to Tenant
after the Expiration Date and after delivery of possession of the Premises to
Landlord in the manner required by this Lease. Tenant expressly agrees that
Tenant shall have no right to apply any portion of the Security Deposit against
any of Tenant's obligations to pay Rent hereunder.
Section 33.4 Transfer. (a) Upon a sale of the Real Property or the
--------
Building or a leasing of the Building, or any financing of Landlord's interest
therein, Landlord shall have the right to transfer the cash Security Deposit or
the Letter of Credit, as applicable, to the vendee, lessee or lender. With
respect to the Letter of Credit, within five (5) days after notice of such sale,
leasing or financing, Tenant, at its sole cost, shall arrange for the transfer
of the Letter of Credit to the new landlord or the lender, as designated by
Landlord in the foregoing notice or have the Letter of Credit reissued in the
name of the new landlord or the lender. Tenant shall look solely to the new
landlord or lender for the return of such cash Security Deposit or Letter of
Credit and the provisions hereof shall apply to every transfer or assignment
made of the Security Deposit to a new landlord. Tenant shall not assign or
encumber or attempt to assign or encumber the cash Security Deposit or Letter of
Credit and neither Landlord nor its successors or assigns shall be bound by any
such action or attempted assignment, or encumbrance.
Section 33.5 Reduction in Security Deposit Amount.
------------------------------------
(a) Definitions. For purposes of this Section 33.5, the
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following terms shall have the meanings set forth below:
(i) "Audited Financial Statements" means unqualified
(except for a qualification for a change in accounting principles with which the
opining CPA concurs) audited financial statements of Tenant as of the end of,
and for the, applicable Measurement Year, certified by any of the "Big Five"
firms of independent certified public accountants or any other firm of
independent certified public accountants of recognized standing selected by
Tenant but acceptable to Landlord ("CPA").
(ii) "Cash Flow From Operations" means, with respect to any
Measurement Year, cash flow from operating activities as set forth in the Tenant
Financial Report and determined in accordance with GAAP, including, without
limitation, the requirements of Financial Accounting Standards Board Statement
No. 95, as amended, but adjusted to exclude any such cash flows arising from
extraordinary or non-recurring items.
(iii) "Financial Milestones" means that (A) as of the
applicable Measurement Date, Tenant has Working Capital of at least Thirty
Million Dollars
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($30,000,000.00) and (B) during the applicable Measurement Year, Tenant has
achieved (1) Net Sales of at least One Hundred Million Dollars ($100,000,000.00)
and (2) Cash Flow From Operations that is greater than Zero (0).
(iv) "GAAP" means generally accepted accounting principles,
consistently applied.
(v) "Measurement Date" means the last day of the
applicable Measurement Year.
(vi) "Measurement Year" means Tenant's most recent
four-(4-) quarter fiscal period ending prior to the applicable Reduction Date.
(vii) "Milestones" means the Financial Milestones and the
Secondary Milestones, collectively.
(viii) "Net Sales" means, with respect to any Measurement
Year, aggregate gross revenues from the sale of Tenant's products or merchandise
or the provision of services by Tenant in connection with Tenant's business, but
deducting or excluding therefrom, as applicable: (A) appropriate allowances for
(1) merchandise returns by customers, (2) uncollectible accounts receivable and
(3) anticipated direct or indirect refunds, rebates, discounts or other credits
or sales price reductions to customers; (B) interest, service, finance or sales
carrying charges paid by customers for extension of credit on sales where not
included in the merchandise sales price; and (C) revenues from sales, not in the
ordinary course of Tenant's business, of fixtures, machinery or equipment; all
as determined in accordance with GAAP.
(ix) "Reduction Date" means the first (1st) anniversary of
the Commencement Date and each anniversary of the Commencement Date thereafter.
(x) "Reduction Increment" means an amount equal to the
lesser of (a) fifteen percent (15.00%) of the initial amount of the Security
Deposit or (b) the excess of the then amount of the Security Deposit over the
Reduction Limit.
(xi) "Reduction Limit" means One Million Four Hundred Fifty
Thousand Dollars ($1,450,000.00).
(xii) "Secondary Milestones" means that (A) as of the
applicable Measurement Date, Tenant has Working Capital of at least Fifty
Million Dollars ($50,000,000.00) and (B) during the applicable Measurement Year,
Tenant has achieved (1) Net Sales of at least Two Hundred Fifty Million Dollars
($250,000,000.00) and (2) Cash Flow From Operations of at least Thirty Million
Dollars ($30,000,000.00).
(xiii) "Secondary Reduction Increment" means an amount equal
to the lesser of (a) twenty-five percent (25.00%) of the initial amount of the
Security Deposit or (b) the excess of the then amount of the Security Deposit
over the Reduction Limit.
(xiv) "Tenant Financial Report" means a report package
consisting of: (A) a certificate of Tenant setting forth each component of the
applicable
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Milestones and, with respect to any such component that is not set forth on the
face of the Audited Financial Statements, a supporting schedule showing, in
reasonable detail, the calculation thereof, certified by the principal financial
officer of Tenant as fairly presenting the amounts of all components of the
applicable Milestones in accordance with this Article 33, together with copies
of (B) the applicable Audited Financial Statements.
(xv) "Working Capital" means the excess of current assets
over current liabilities of Tenant, as such terms are defined by, and determined
in accordance with, GAAP.
(b) Reduction Procedure. Following each Reduction Date, Tenant
shall deliver to Landlord a Tenant Financial Report and, provided that Tenant
has satisfied each of the applicable Financial Milestones or, as the case may
be, each of the Secondary Milestones, as of the Measurement Date and with
respect to the Measurement Year and, provided further that both (A) no Event of
Default has occurred and is continuing as of the date that is ten (10) Business
Days following the date upon which Landlord receives such Tenant Financial
Report ("Release Date") and (B) no Event of Default described in Section 18.1(a)
hereof has occurred on three (3) or more occasions during the portion of the
Term preceding such Release Date, then, for each such Reduction Date until the
amount of the Security Deposit has been reduced to the Reduction Limit, if
Tenant has so satisfied the applicable Financial Milestones, the Security
Deposit shall be reduced effective as of the Release Date by the Reduction
Increment, unless Tenant has so satisfied the applicable Secondary Milestones,
in which event the Security Deposit shall be reduced by the Secondary Reduction
Increment. Promptly following any such Release Date, Landlord shall provide
written notice to Tenant of any such permitted reduction in the amount of the
Security Deposit and (i) if Tenant has posted the Security Deposit in cash,
Landlord shall deliver a check payable to the order of Tenant in the amount of
the Reduction Increment or the Secondary Reduction Increment, as the case may
be, together with such notice or (ii) if Tenant has delivered to Landlord the
Security Deposit in the form of a Letter of Credit, then, from and after
Tenant's receipt of such Landlord notice, Tenant shall be authorized to deliver
a substitute or amended Letter of Credit to Landlord satisfying the requirements
set forth in Section 33.2 above and in an amount equal to the Security Deposit
as reduced by such Reduction Increment or Secondary Reduction Increment, as the
case may be, and Landlord shall exchange the prior Letter of Credit for the
substitute Letter of Credit in cooperation with the Issuing Bank.
ARTICLE 34
RENEWAL TERM
Section 34.1 Renewal Term. Tenant shall have the right to renew the
------------
Term for all of the Premises for one (1) renewal term of five (5) years
("Renewal Term") which shall commence on the day following the expiration of the
initial Term and end on the fifth (5th) anniversary of the originally-scheduled
Expiration Date, unless the Renewal Term shall sooner terminate pursuant to any
of the terms of this Lease or otherwise. The Renewal Term shall commence only if
(a) Tenant shall have notified Landlord in writing of Tenant's exercise of such
renewal right (the "Exercise Notice") not later than fourteen (14) months prior
to the Expiration Date, (b) at the time of the exercise of such right and
immediately prior to the Expiration Date, no Event of Default shall have
occurred and be continuing hereunder, and (c) Tenant and/or a
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Related Entity shall be in occupancy of at least sixty-six percent (66%) of the
rentable area of the Premises at the time such Exercise Notice is given. Time is
of the essence with respect to the giving of the Exercise Notice of Tenant's
exercise of such renewal option. The Renewal Term shall be upon all of the
agreements, terms, covenants and conditions hereof binding upon Tenant, except
that the Fixed Rent (as defined in Section 1.1) shall be determined as provided
in Section 34.2 and Tenant shall have no further right to renew the Term. Upon
the commencement of the Renewal Term, (A) the Renewal Term shall be added to and
become part of the Term (but shall not be considered part of the initial Term),
(B) any reference to "this Lease", to the "Term", the "term of this Lease" or
any similar expression shall be deemed to include the Renewal Term, and (C) the
expiration of the Renewal Term shall become the Expiration Date.
Section 34.2 Renewal Term Rent. If the Term shall be renewed as
-----------------
provided in Section 34.1, the annual Fixed Rent payable during the Renewal Term
shall be equal to one hundred percent (100%) of the annual fair market rental
value of the Premises (the "Fair Market Value") as of the day immediately
following the originally-scheduled Expiration Date. For purposes hereof, the
"Fair Market Value" shall mean the rent at which tenants, as of the commencement
of the Renewal Term, will be leasing non-sublease space on a "triple-net" basis
comparable in size, location and quality to the Premises, for a comparable term,
and considering all other factors relevant to the determination of Fair Market
Value, which comparable space is located in first-class office buildings
comparable to the Building in Cupertino, California. Within thirty (30) days
following Landlord's receipt of the Exercise Notice, Landlord shall advise
Tenant in writing of Landlord's determination of Fair Market Value (the "Rent
Notice"). Within thirty (30) days of Tenant's receipt of Landlord's Rent Notice,
Tenant shall advise Landlord in writing whether Tenant accepts Landlord's
determination of Fair Market Value, elects to rescind Tenant's exercise of the
renewal option or elects to have the determination of Fair Market Value be
resolved by arbitration as provided in Section 34.3 hereof. Tenant's failure to
so advise Landlord of its election within such thirty-(30-) day period shall
constitute Tenant's acceptance of Landlord's determination of Fair Market Value.
If Tenant timely elects to rescind its exercise of the renewal option, the Term
of this Lease shall end on the Expiration Date. If the Fixed Rent payable during
the Renewal Term has not been determined prior to the commencement thereof,
Tenant shall pay Fixed Rent in an amount equal to the Fair Market Value for the
Premises as determined by Landlord (the "Interim Rent"). Upon final
determination of the Fixed Rent for the Renewal Term, Tenant shall commence
paying such Fixed Rent as so determined, and within ten (10) days after such
determination Tenant shall pay any deficiency in prior payments of Fixed Rent
or, if the Fixed Rent as so determined shall be less than the Interim Rent,
Tenant shall be entitled to a credit against the next succeeding installments of
Fixed Rent in an amount equal to the difference between each installment of
Interim Rent and the Fixed Rent as so determined which should have been paid for
such installment until the total amount of the over payment has been recouped.
Section 34.3 Arbitration. If Tenant shall dispute Landlord's
-----------
determination of Fair Market Value pursuant to Section 34.2, Tenant shall give
notice to Landlord of such dispute within ten (10) days of Tenant's receipt of
Landlord's determination, and such dispute shall be determined by a single
arbitrator appointed in accordance with the American Arbitration Association
Real Estate Valuation Arbitration Proceeding Rules. The arbitrator shall be
impartial and shall have not less than ten (10) years' experience in the County
of Santa Clara in a calling related to the leasing of commercial office space in
office buildings comparable to the
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Building, and the fees of the arbitrator shall be shared equally by Landlord and
Tenant. Within fifteen (15) days following the appointment of the arbitrator,
Landlord and Tenant shall attend a hearing before the arbitrator at which each
party shall submit a report setting forth its determination of the Fair Market
Value of the Premises for the Renewal Term, together with such information on
comparable rentals and such other evidence as such party shall deem relevant.
The arbitrator shall, within thirty (30) days following such hearing and
submission of evidence, render his or her decision by selecting the
determination of Fair Market Value submitted by either Landlord or Tenant which,
in the judgment of the arbitrator, most nearly reflects the Fair Market Value of
the Premises for the Renewal Term. The arbitrator shall have no power or
authority to select any Fair Market Value other than a Fair Market Value
submitted by Landlord or Tenant, and the decision of the arbitrator shall be
final and binding upon Landlord and Tenant.
ARTICLE 35
SIGNAGE
Section 35.1 Exterior Signage. Subject to the provisions of this
----------------
Article 35, Tenant shall have the right, in accordance with this Article 35, and
subject to (i) Landlord's prior review and approval, which shall not be
unreasonably withheld, conditioned or delayed, (ii) the receipt by Tenant of all
necessary governmental approvals therefor and (ii) the compliance of any such
signage with all Requirements to construct, install, maintain, repair and
replace signs and other identifying materials containing the Tenant Name (as
hereinafter defined) in, on or about the Premises.
(a) Monument Signage.
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(i) Subject to the provisions of this Section 35.1(a),
Tenant shall have the right to replace any or all of the three (3) existing
monument signs located on the Real Property each with a corresponding
replacement monument sign in the same location exclusively bearing the Tenant
Name (collectively, the "Monument Signs").
(ii) The Monument Signs (A) shall be consistent with the
quality and appearance of the Building, (B) shall be subject to receipt by
Tenant of all governmental permits and approvals required therefor and (C) if
desired to be illuminated by Tenant, shall be illuminated with such lighting and
at such times as shall be reasonably approved in advance by Landlord and Tenant.
Notwithstanding the foregoing, in the event Tenant is unable to obtain any such
approval or permit after exercise of its commercially reasonable efforts, Tenant
may, at Tenant's sole cost and expense, require that (X) the parties make such
reasonable changes and/or modifications to the location and/or any other
characteristic of each Monument Sign which may have adversely affected Tenant's
ability to obtain such approval or permit, and (Y) notwithstanding any such
disapproval, Tenant may exercise any rights of appeal or rehearing available,
resubmit Tenant's application therefor with the changes or modifications
described in clause (X) above and/or at reasonable intervals after any prior
disapproval, resubmit its application for such permit or approval (with or
without changes).
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(iii) For purposes of this Article 35, "Tenant Name" means
Portal Software and any other legal name or trade name by which Tenant or its
products may be known. As part of the Tenant Name, Tenant may include any logo
commonly associated with Tenant or its products.
(iv) Each Monument Sign may be designed to include up to
three (3) identification bands. Tenant may assign its rights to the Monument
Signs to any permitted assignee of this Lease or transfer a right to use one or
more of such identification bands to any subtenant in occupancy of at least one
(1) entire floor of the Building, in either case subject to Landlord's approval,
not to be unreasonably withheld, of any Tenant Name to be placed on any such
Monument Sign other than as defined in Section 35.1(a)(iii). Tenant may not
design and install a Monument Sign containing more than such three (3)
identification bands without the prior written consent of Landlord, which
consent may be withheld in Landlord's sole discretion.
Section 35.2 Miscellaneous.
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(a) The size and quantity of all of Tenant's identifying language
shall be consistent with the tenant identity signage programs of first class
office buildings in Cupertino, California comparable to the Building, shall be
in keeping with the overall character of the Building's architecture and
construction materials, and shall be otherwise subject to Landlord's prior
review and approval in accordance with Section 35.1.
(b) Tenant shall be solely responsible for all costs and expenses
relating to the design, permitting (including receipt of all necessary
electrical, building and other permits and/or approvals), fabrication,
installation, operation and all on-going maintenance and repair of any and all
signage installed by Tenant in accordance with the terms and provisions of this
Article 35, together with all electrical equipment related thereto.
[BALANCE OF THIS PAGE INTENTIONALLY BLANK]
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Section 35.3 Restoration of the Building. At the expiration or
---------------------------
earlier termination of the Term of this Lease, Tenant shall, at its sole cost
and expense, remove any displays of the Tenant Name or other insignia, and
restore the areas of the Building where such identifying materials were located.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.
LANDLORD: TENANT:
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TST TORRE, L.L.C., a Delaware PORTAL SOFTWARE, INC.,
limited liability company a Delaware corporation
By: ___________________________ By:______________________________________
Name: ___________________________ Name: Jack L. Acosta
Its: ___________________________ Its: Vice President and Chief
Financial Officer
By:______________________________________
Name: Mitchell Gaynor
Its: General Counsel and Secretary
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EXHIBIT A
FLOOR PLANS
[See attached copies of the Floor Plans for each of the First (1st) through
Third (3rd) Floors, inclusive, of the Building which comprise, respectively,
EXHIBIT A-1 through EXHIBIT A-3]
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EXHIBIT A-4
SITE PLAN OF PARKING AREAS
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EXHIBIT B
DEFINITIONS
Base Rate: The annual rate of interest publicly announced from time
---------
to time by Citibank, N.A., or its successor, in New York, New York as its "base
rate" (or such other term as may be used by Citibank, N.A., from time to time,
for the rate presently referred to as its "base rate").
Building System: The mechanical, electrical, plumbing, sanitary,
---------------
sprinkler, heating, ventilation and air conditioning, security, life-safety,
elevator and other service systems or facilities of the Building up to the point
of localized distribution to the Premises (excluding, however, supplemental HVAC
systems of tenants (including Tenant), sprinklers and the horizontal
distribution systems within and servicing the Premises and by which mechanical,
electrical, plumbing, sanitary, heating, ventilating and air conditioning,
security, life-safety and other service systems are distributed from the base
Building risers, feeders, panelboards, etc. for provision of such services to
the Premises).
Business Days: All days, excluding Saturdays, Sundays and all days
-------------
observed by either the State in which the Building is located, the Federal
Government or the labor unions servicing the Building as legal holidays.
Code: The Internal Revenue Code of 1986, as amended, and the
----
regulations promulgated thereunder.
Cost Per Kilowatt Hour: (a) The total cost for electricity incurred
----------------------
by Landlord to service the Building during a particular billing period
(including energy charges, demand charges, surcharges, time-of-day charges, fuel
adjustment charges, rate adjustment charges, taxes, rebates and any other
factors used by the public utility company in computing its charges to
Landlord), divided by (b) the total kilowatt hours purchased by Landlord to
provide electricity to the Building during such period.
Deficiency: The difference between (a) the Fixed Rent and Additional
----------
Rent for the period which otherwise would have constituted the unexpired portion
of the Term (assuming the Additional Rent for each year thereof to be the same
as was payable for the year immediately preceding such termination or re-entry),
and (b) the net amount, if any, of rents collected under any reletting effected
pursuant to the provisions of the Lease for any part of such period (after first
deducting from such rents all expenses incurred by Landlord in connection with
the termination of this Lease, Landlord's re-entry upon the Premises and such
reletting, including repossession costs, brokerage commissions, attorneys' fees
and disbursements, and alteration costs).
Excluded Expenses: (a) Taxes; (b) franchise or income taxes imposed
-----------------
upon Landlord; (c) mortgage amortization and interest; (d) leasing commissions;
(e) the cost of tenant installations and decorations incurred in connection with
preparing space for any Building tenant, including workletters and concessions;
(f) ground rent, if any; (g) management
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fees exceeding an amount (the "Management Fee") equal to three percent (3%) of
the sum of (A) Fixed Rent due under this Lease, (B) the aggregate of all
Operating Expenses excluding the Management Fee and (C) Taxes; (h) wages,
salaries and benefits paid to any persons above the grade of Building Manager;
(i) legal and accounting fees, judgments and other costs relating to (A)
disputes with tenants, prospective tenants or other occupants of the Building,
(B) disputes with purchasers, prospective purchasers, Mortgagees or prospective
Mortgagees, Lessors or prospective Lessors of the Building or the Real Property
or any part of either, or (C) negotiations of leases, contracts of sale or
mortgages; (j) costs of services provided to other tenants of the Building on a
"rent-inclusion" basis which are not provided to Tenant on such basis; (k) costs
that are reimbursed out of insurance, warranty or condemnation proceeds, or
which are reimbursable by Tenant or other tenants other than pursuant to an
expense escalation clause; (l) costs in the nature of penalties or fines; (m)
costs for services, supplies or repairs paid to any related entity in excess of
costs that would be payable in an "arm's length" or unrelated situation; (n)
allowances, concessions or other costs and expenses of improving or decorating
any demised or demisable space in the Building; (o) consulting, brokerage,
appraisal, advertising and promotional fees and expenses in connection with the
leasing, financing or sale of the Building; (p) the costs of installing,
operating and maintaining a specialty improvement or an improvement other than
for general office use, including a cafeteria, lodging or private dining
facility, or an athletic, luncheon or recreational club; (q) any costs or
expenses (including fines, interest, penalties and legal fees) arising out of
Landlord's failure to timely pay Operating Expenses or Taxes; (r) costs incurred
in connection with the removal, encapsulation or other treatment of any
Hazardous Materials other than with respect to any Hazardous Materials
introduced into the Premises and/or the Building by Tenant or its employees,
agents or contractors, and (s) the cost of capital improvements other than those
expressly included in Operating Expenses pursuant to Section 8.1 of this Lease;
(t) capitalized costs incurred in correcting defects in, or significant design
errors relating to, the initial design or construction of the Building; (u) the
wages and benefits of any employee who does not devote substantially all of his
or her employed time to the operation and management of the Building or Real
Property unless such wages and benefits are prorated to reflect time spent on
operating and managing the Real Property vis-a-vis time spent on matters
unrelated to operating and managing the Real Property; (v) charitable and
political contributions or membership fees; (w) any costs expressly excluded
from Operating Expenses elsewhere in this Lease; (x) costs or expenses arising
from the active negligence or willful misconduct of Landlord or Landlord's
agents, servants or employees or from the breach by Landlord of any of its
obligations under this Lease; (y) except for any amortization or depreciation
charges expressly provided for in this Lease as includable in Operating
Expenses, depreciation charges or contributions to capital replacement reserves;
(z) except for costs and expenses incurred for maintenance and repair of objects
of art on or about the Real Property for which Landlord is responsible, costs
for any sculptures, paintings, furniture or other objects of art; (aa) charges
to reserves for uncollectible accounts; (ab) costs and expenses associated with
the operation of the entity that is Landlord including associated accounting and
legal fees, costs concerning disputes with Landlord's Agent or Landlord's other
agents and employees, and general corporate and administrative expenses (other
than travel and related expenses reasonably incurred by persons responsible for
the operation, management and repair of the Building who are based outside of
the San Francisco Bay Area); (ac) costs incurred to correct any "Year 2000"
software problems in any Building Systems; (ad) the amount of any deductible
carried by Landlord under insurance policies respecting the Building which
exceed One Hundred Fifty
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Thousand Dollars ($150,000.00) or, with respect to earthquake insurance, five
percent (5%) of the replacement value of the Building; and (ac) any parking rent
charged by the owner of the Parcel 2 Spaces.
Governmental Authority (Authorities): The United States of America,
------------------------------------
the City of Cupertino, County of Santa Clara, or State of California, or any
political subdivision, agency, department, commission, board, bureau or
instrumentality of any of the foregoing, now existing or hereafter created,
having jurisdiction over the Real Property or any portion thereof or the curbs,
sidewalks, and areas adjacent thereto.
Hazardous Materials: Any substances, materials or wastes currently or
-------------------
in the future deemed or defined in any Requirement as "hazardous substances,"
"toxic substances," "contaminants," "pollutants" or words of similar import.
HVAC Systems: The Building System designed to provide heating,
------------
ventilation and air conditioning.
Indemnitees: Landlord, Landlord's Agent, each Mortgagee and Lessor,
-----------
and each of their respective direct or indirect partners, officers,
shareholders, directors, members, trustees, beneficiaries, employees,
principals, contractors, licensees, invitees, servants, agents, or
representatives.
Lessor: A lessor under a Superior Lease.
------
Mortgage(s): Any mortgage, trust indenture or other financing
-----------
document which may now or hereafter affect the Premises, the Real Property, the
Building or any Superior Lease and the leasehold interest created thereby, and
all renewals, extensions, supplements, amendments, modifications, consolidations
and replacements thereof or thereto, substitutions therefor, and advances made
thereunder.
Mortgagee(s): Any mortgagee, trustee or other holder of a Mortgage.
------------
Prohibited Use: Any use or occupancy of the Premises that in
--------------
Landlord's reasonable judgment would: (a) cause damage to the Building, the
Premises or any equipment, facilities or other systems therein; (b) impair the
appearance of the Building; (c) interfere with the efficient and economical
maintenance, operation and repair of the Premises or the Building or the
equipment, facilities or systems thereof; (d) adversely affect any service
provided to, and/or the use and occupancy by, any Building tenant or occupants;
(e) violate the certificate of occupancy issued for the Premises or the Building
or (f) adversely affect the image of the Building as a first-class office
location in Cupertino, California. Prohibited Use also includes the use of any
part of the Premises for: (i) a restaurant or bar (other than one (1) full-scale
cafeteria for use by Tenant's employees and invitees, provided such cafeteria is
not open to the general public and is constructed in accordance with the
Workletter Agreement or Article 5 hereof and which Tenant hereby acknowledges
shall, in either event, constitute a Specialty Alteration); (ii) the
preparation, consumption, storage, manufacture or sale of food or beverages
(except in connection with vending machines and/or warming kitchens or break
rooms installed for the use of Tenant's employees only), liquor, tobacco or
drugs; (iii) the business of photocopying, multilith or offset printing (except
photocopying in connection with Tenant's own business);
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(iv) a typing or stenography business; (v) a school or classroom (other than a
training facility for Tenant's customers and invitees); (vi) lodging or
sleeping; (vii) the operation of retail facilities (meaning a business whose
primary patronage arises from the generalized solicitation of the general public
to visit Tenant's offices in person without a prior appointment) of a savings
and loan association or retail facilities of any financial, lending, securities
brokerage or investment activity; (viii) a payroll office; (ix) a barber, beauty
or manicure shop; (x) an employment agency, executive search firm or similar
enterprise; (xi) offices of any Governmental Authority, any foreign government,
the United Nations, or any agency or department of the foregoing; (xii) the
manufacture, retail sale, storage of merchandise or auction of merchandise,
goods or property of any kind to the general public which could reasonably be
expected to create a volume of pedestrian traffic substantially in excess of
that normally encountered in the Premises; (xiii) the rendering of medical,
dental or other therapeutic or diagnostic services; or (xiv) any illegal
purposes or any activity constituting a nuisance.
Requirements: All present and future laws, rules, orders, ordinances,
------------
regulations, statutes, requirements, codes and executive orders, extraordinary
and ordinary of (i) all Governmental Authorities, including the Americans With
Disabilities Act, 42 U.S.C. (S)12,101 (et seq.), and any law of like import, and
all rules, regulations and government orders with respect thereto, and any of
the foregoing relating to Hazardous Materials, environmental matters, public
health and safety matters, (ii) any applicable fire rating bureau or other body
exercising similar functions, affecting the Real Property or the maintenance,
use or occupation thereof, or any street, avenue or sidewalk comprising a part
of or in front thereof or any vault in or under the same and (iii) all
requirements of all insurance bodies affecting the Premises.
Rules and Regulations: The rules and regulations annexed to and made
---------------------
a part of this Lease as Exhibit G, as they may be modified from time to time by
Landlord.
Specialty Alterations: Alterations consisting of kitchens, pantries,
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executive bathrooms, raised computer floors, computer installations, safe
deposit boxes, vaults, libraries or file rooms requiring reinforcement of
floors, internal staircases, conveyors, dumbwaiters, and other Alterations of a
similar character.
Substantial Completion: As to any construction performed by any party
----------------------
in the Premises, including any Alterations (but not the Improvements),
"Substantial Completion" or "Substantially Completed" means that such work has
been completed, as reasonably determined by Landlord's architect, in accordance
with (a) the provisions of this Lease applicable thereto, (b) the plans and
specifications for such work, and (c) all applicable Requirements, except for
minor details of construction, decoration and mechanical adjustments, if any,
the noncompletion of which does not materially interfere with Tenant's use of
the Premises.
Superior Lease(s): Any ground or underlying lease of the Real
-----------------
Property or any part thereof heretofore or hereafter made by Landlord and all
renewals, extensions, supplements, amendments, modifications, consolidations,
and replacements thereof.
Tenant's Property: Tenant's movable fixtures and movable partitions,
-----------------
telephone and other equipment, computer systems, trade fixtures, furniture,
furnishings, and other items of personal property which are removable without
material damage to the Premises or Building.
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Unavoidable Delays: Any inability to fulfill or delay in fulfilling
------------------
any obligations of a party under this Lease expressly or impliedly to be
performed by a party (including inability to make or delay in making any
repairs, additions, alterations, improvements or decorations or Landlord's
inability to supply or delay in supplying any equipment or fixtures), if such
party's inability or delay is due to or arises by reason of strikes, labor
troubles or by accident, or by any cause whatsoever reasonably beyond such
party's control, including laws, governmental preemption in connection with a
national emergency, Requirements or shortages, or unavailability of labor, fuel,
steam, water, electricity or materials, or delays caused by others, mechanical
breakdown, acts of God, enemy action, civil commotion, fire or other casualty.
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EXHIBIT C
PARKING RULES AND REGULATIONS
1. Tenant shall not store or permit Tenant's Invitees to store any
automobiles in the Parking Area without the prior written consent of Landlord.
Except for emergency repairs, neither Tenant nor any Tenant Invitee shall not
perform any work on any automobiles while located in the Parking Area. If it is
necessary for Tenant or a Tenant Invitee to leave an automobile in the Parking
Area overnight, Tenant shall provide Landlord with prior notice thereof,
designating the license plate number and model of such automobile.
2. Cars must be parked entirely within the stall lines painted on
the floor, and only compact cars may be parked in areas reserved for compact
cars.
3. All directional signs and arrows must be observed.
4. The speed limit shall be five (5) miles per hour.
5. Parking spaces reserved for handicapped parking must be used only
by vehicles properly designated.
6. Parking is prohibited in all areas not expressly designated for
parking, including, without limitation:
a. in areas not striped for parking;
b. in aisles;
c. where "no parking" signs are posted;
d. on ramps;
e. in loading zones;
f. in cross-hatched areas; and
g. in such other areas as may be designated by Landlord, its
agents, lessees or licensees.
7. Parking stickers, key cards or any other devices or forms of
identification or entry supplied by Landlord shall remain the property of
Landlord. Such parking identification devices must be displayed as requested,
and any device in the possession of an unauthorized holder will be void.
8. Parking Area managers and attendants are not authorized to make
or allow any exceptions to these Parking Rules and Regulations.
9. Every person visiting the Parking Area is required to park and
lock his/her own car.
10. Loss or theft of parking identification, key cards or other such
devices must be reported to Landlord and to any Parking Area manager
immediately. Any parking
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devices reported lost or stolen found on any authorized car will be confiscated,
and the illegal holder will be subject to prosecution. Lost or stolen devices
found by Tenant must be reported to the office of the garage immediately.
11. Washing, waxing, cleaning or servicing any vehicle by Tenant or
any Tenant Invitee is prohibited. Parking spaces may be used only for parking
automobiles.
12. NO LIABILITY. TENANT ACKNOWLEDGES AND AGREES THAT, TO THE
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FULLEST EXTENT PERMITTED BY LAW, LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY LOSS
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OR DAMAGE TO TENANT OR ANY TENANT INVITEE OR TO TENANT'S OR ANY TENANT INVITEE'S
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PROPERTY (INCLUDING, WITHOUT LIMITATIONS, ANY LOSS OR DAMAGE TO TENANT'S OR ANY
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TENANT INVITEE'S AUTOMOBILE OR THE CONTENTS THEREOF DUE TO THEFT, VANDALISM OR
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ACCIDENT) ARISING FROM OR RELATED TO TENANT'S OR ANY TENANT INVITEE'S USE OF THE
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PARKING AREA OR WHETHER OR NOT SUCH LOSS OR DAMAGE RESULTS FROM LANDLORD'S
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ACTIVE NEGLIGENCE OR NEGLIGENT OMISSION, BUT EXCLUDING LANDLORD'S GROSS
--------------------------------------------------------------------------------
NEGLIGENCE OR WILLFUL MISCONDUCT OR ANY FAILURE BY LANDLORD TO MAINTAIN AND
--------------------------------------------------------------------------------
REPAIR THE LANDLORD REPAIR AREAS.
---------------------------------
13. Release of Liability. Without limiting the provisions of
Paragraph 12 above and except where caused by the gross negligence or willful
misconduct of Landlord or any failure by Landlord to maintain and repair the
Landlord Repair Areas, Tenant hereby voluntarily releases, discharges, waives
and relinquishes any and all actions or causes of action for personal injury or
property damage occurring to Tenant or any Tenant Invitee arising as a result of
parking in the Parking Area, or any activities incidental thereto, wherever or
however the same may occur, and further agrees that Tenant will not prosecute
any claim for personal injury or property damage against Landlord or any of its
officers, agents, servants or employees for any said causes of action. It is the
intention of Tenant by this instrument to exempt and relieve Landlord from
liability for personal injury or property damage caused by negligence; provided
that nothing set forth herein shall be construed to impose upon Tenant any
liability or responsibility for claims made by third parties (and not a Tenant
Invitee) with respect to the Parking Facility in circumstances where neither
Tenant nor any Tenant Invitee was responsible therefor.
14. The garage management reserves the right to refuse the issuance
of monthly stickers or other parking identification devices to Tenant or and
Tenant Invitee who willfully refuses to comply with the above Parking Rules and
Regulations or any City, State or Federal ordinance, law or agreement.
15. Neither Tenant nor any Tenant Invitee shall load or unload in
areas other than those designated by Landlord for such activities.
16. Tenant, any Tenant Invitee and unauthorized users parked in
prohibited areas are subject to towing at their own expense.
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EXHIBIT D
WORKLETTER AGREEMENT
This Workletter Agreement (the "Agreement") is an exhibit to that
certain Lease (the "Lease"), dated as of the date hereof, between TST Cupertino,
L.L.C. ("Landlord"), and Portal Software, Inc. ("Tenant"), wherein Tenant is
leasing certain office space (the "Premises") at 10201 Torre Avenue (the
"Building"), in Cupertino, California, as more particularly described in the
Lease. Unless otherwise defined herein, any defined term used in this Agreement
has the meaning set forth in the Lease. In consideration of the parties
entering into the Lease and of the mutual promises and covenants herein
contained, Landlord and Tenant hereby agree as follows:
1. Proposed and Final Plans.
(a) Prior to commencement of any work within the Premises, Tenant
shall cause to be prepared and delivered to Landlord, for Landlord's approval,
the following proposed drawings ("Proposed Plans") for all improvements Tenant
desires to complete or have completed in the Premises (the "Improvements"):
(i) Architectural drawings (consisting of floor
construction plan, ceiling lighting and layout, power, and telephone plan).
(ii) Mechanical drawings (consisting of HVAC, electrical,
telephone, and plumbing).
(iii) Finish schedule (consisting of wall finishes and floor
finishes and miscellaneous details).
(b) All architectural drawings shall be prepared at Tenant's sole
cost and expense by a licensed architect designated by Tenant and approved by
Landlord, which approval shall not be unreasonably withheld, whom Tenant shall
employ. Tenant shall deliver one set of reproducible architectural drawings to
Landlord. All mechanical drawings shall be prepared at Tenant's sole cost and
expense by a licensed engineer designated by Tenant and approved by Landlord,
which approval shall not be unreasonably withheld, whom Tenant shall employ.
(c) Within five (5) days after Landlord's receipt of the
architectural drawings, Landlord shall advise Tenant of any changes or
additional information required to obtain Landlord's approval.
(d) Within five (5) days after receipt of mechanical drawings,
Landlord shall advise Tenant of any changes required to obtain Landlord's
approval.
(e) If Landlord disapproves of, or requests additional
information regarding the Proposed Plans, Tenant shall, within five (5) days
thereafter (or such longer period as may be reasonably required as a result of
the nature or extent of Landlord's comments, but in no event more than ten (10)
days), revise the Proposed Plans disapproved by Landlord and resubmit such plans
to Landlord or otherwise provide such additional information to Landlord.
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Landlord shall, within ten (10) days after receipt of Tenant's revised plans,
advise Tenant of any additional changes which may be required to obtain
Landlord's approval. If Landlord disapproves the revised plans specifying the
reason therefor, or requests further additional information, Tenant shall,
within five (5) days (or such longer period as may be reasonably required as a
result of the nature or extent of Landlord's comments, but in no event more than
ten (10) days) of receipt of Landlord's required changes, revise such plans and
resubmit them to Landlord or deliver to Landlord such further information as
Landlord has requested. Landlord shall, again within five (5) days after receipt
of Tenant's revised plans, advise Tenant of further changes, if any, required
for Landlord's approval. This process shall continue until Landlord has approved
Tenant's revised Proposed Plans. "Final Plans" shall mean the Proposed Plans, as
revised, which have been approved by Landlord and Tenant in writing. Landlord
agrees not to withhold its approval unreasonably.
(f) All Proposed Plans and Final Plans shall comply with all
applicable Requirements. Neither review nor approval by Landlord of any Proposed
Plans and resulting Final Plans shall constitute a representation or warranty by
Landlord that such plans either (i) are complete or suitable for their intended
purpose, or (ii) comply with applicable Requirements, it being expressly agreed
by Tenant that Landlord assumes no responsibility or liability whatsoever to
Tenant or to any other person or entity for such completeness, suitability or
compliance. No changes in the Final Plans shall be made without Landlord's prior
written approval, which shall not be unreasonably withheld, conditioned or
delayed with respect to any such proposed changes that are non-structural, do
not adversely affect any Building System, do not involve construction that would
be visible from outside the Premises or would affect the certificate of
occupancy for the Building.
(g) Promptly following Landlord's approval of the Final Plans and
receipt of Landlord's invoice therefor, but in no event prior to the Delivery
Date, Tenant shall (A) reimburse to Landlord the actual third-party costs
reasonably incurred by Landlord to approve all plans, specifications and
materials submitted pursuant to this Section 1 and (B) pay to Landlord a fee
(the "Review Fee") in the amount of Twenty-Five Thousand Dollars ($25,000.00) to
compensate Landlord for Landlord's review of the Proposed Plans.
2. Landlord's Work. Concurrently with Tenant's planning and
construction of the Improvements, Landlord shall, at Landlord's sole cost and
expense, complete the work described on Schedule 1 attached hereto and
incorporated herein ("Landlord's Work"). Landlord agrees to use reasonable
efforts to complete all such Landlord's Work at the Building or in the Premises,
as applicable, on or before the Scheduled Commencement Date, subject to
Unavoidable Delays, including, without limitation, any delay caused by Tenant or
Tenant's Contractors (as hereinafter defined).
3. Performance of the Improvements.
(a) Filing of Final Plans, Permits. Tenant, at its sole cost and
expense, shall file the Final Plans with the governmental agencies having
jurisdiction over the Improvements. Tenant shall furnish Landlord with copies of
all documents submitted to all such governmental agencies and of all
authorizations to commence work and all permits for the Improvements issued by
such governmental agencies. Tenant shall not commence the
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Improvements until the required governmental authorizations for such work are
obtained and delivered to Landlord; provided, however, that Tenant may commence
demolition within the Premises once Landlord has approved Tenant's demolition
plans (which approval shall not be unreasonably withheld, delayed or
conditioned) and Tenant has in hand any necessary permits or approvals from the
City of Cupertino with respect to such demolition.
(b) Landlord Approval of Contractors. Following Landlord's
approval of the Final Plans, Tenant shall enter into a contract ("Construction
Contract") for construction of the Improvements with a general contractor
acceptable to Landlord (the "Contractor"). The Construction Contract shall
contain the indemnity of the Contractor to Landlord and Landlord's Agent,
substantially in the same manner as Tenant's indemnity as provided in Section
5(j) below and shall otherwise be subject to Landlord's prior approval, which
approval shall not be unreasonably withheld, delayed or conditioned.
(c) Tenant's Contractor. The Contractor shall be responsible for
all required construction, management and supervision, including bidding by
subcontractors for the various components of the work of the Improvements.
Tenant shall submit to Landlord not less than ten (10) days prior to
commencement of construction the following information and items:
(i) The names and addresses of the subcontractors
(collectively, together with the Contractor, the "Tenant's Contractors") Tenant
intends to employ in the construction of the Improvements; provided that Tenant
shall not be required to advise Landlord in advance of the identity of those
subcontractors performing work within the Premises for a contract amount
reasonably anticipated to be less than Fifty Thousand Dollars ($50,000.00).
Landlord shall have the right to disapprove any of Tenant's Contractors,
provided that Landlord's approval shall not be unreasonably withheld, and Tenant
shall employ, as Tenant's Contractors, only those persons or entities approved
by Landlord. All contractors and subcontractors engaged by or on behalf of
Tenant for the Premises shall be licensed contractors, possessing good labor
relations, capable of performing quality workmanship and working in harmony with
Landlord's contractors and subcontractors and with other contractors and
subcontractors on the job site. All work by Tenant's Contractors shall be
coordinated with Landlord's completion of Landlord's Work, as delineated on
Landlord's proposed schedule for performance of Landlord's Work, which shall be
furnished to Tenant as soon as reasonably possible following the Effective Date,
but in any event by November 1, 1999.
(ii) The scheduled commencement date of construction, the
estimated date of completion of construction work, fixturing work, and date of
occupancy of the Premises by Tenant.
(iii) Itemized statement of estimated construction cost,
including permits and fees, architectural, engineering, and contracting fees
("Estimated Total Construction Cost").
(iv) Certified copies of insurance policies or certificates
of insurance as hereinafter described. Tenant shall not permit Tenant's
Contractors to commence work until the required insurance has been obtained and
certified copies of policies or certificates have been delivered to Landlord.
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(d) Access to Premises. Tenant, its employees, designers,
contractors and workmen shall have access to and primary use of the Premises
prior to the Commencement Date to construct the Improvements, provided that
Tenant and its employees, agents, contractors, and suppliers only access the
Premises in such a manner so as not to unreasonably interfere with the
completion of Landlord's Work by Landlord or Landlord's contractors. If at any
time such entry shall cause, or in Landlord's reasonable judgment threaten to
cause, such disharmony or interference, Landlord shall advise Tenant of
Landlord's concerns, and Tenant shall use its commercially reasonable efforts to
eliminate such disharmony or interference.
(e) Landlord's Right to Perform. Landlord shall have the right,
but not the obligation, to perform, on behalf of and for the account of Tenant,
subject to reimbursement by Tenant, any of the Improvements which Landlord
reasonably deems necessary to be done on an emergency basis.
(f) Landlord Delay. As used herein, the term "Landlord Delay"
shall mean any delay in substantially completing construction of the
Improvements by May 1, 2000 which is due to any act or omission of Landlord
(wrongful, negligent or otherwise), its agents or contractors (including acts or
omissions while acting as agent or contractor for Tenant). The term "Landlord
Delay" shall include, but shall not be limited to, any: (i) delay in the giving
of authorizations or approvals by Landlord within the prescribed time period (it
being understood that it shall not be a Landlord Delay if Landlord, within any
prescribed time period, reasonably withholds its consent or refuses to grant its
consent where the granting of such consent was not subject to an express
standard of reasonableness); (ii) delay attributable to the acts or failures to
act, whether willful or negligent, of Landlord, its agents or contractors, where
such acts or failures to act delay the substantial completion of the
Improvements; and (iii) delay attributable to the unreasonable interference of
Landlord, its agents or contractors with the design of the Improvements or the
failure or refusal of any such party to permit Tenant, its agents or
contractors, access to and use of the Building or any Building facilities or
services after the Delivery Date, which access and use are required for the
orderly and continuous performance of the work necessary for Tenant to
substantially complete the Improvements. Tenant shall be responsible for
documenting all asserted Landlord Delays, which documentation shall be available
to Landlord upon request. Tenant shall use its good faith efforts to advise
Landlord within one (1) Business Day of the occurrence of any event constituting
Landlord Delays. Notwithstanding the foregoing, no Landlord Delay shall be
deemed to have occurred unless and until Tenant has provided notice to Landlord
(the "Delay Notice") within five (5) days of the occurrence of the alleged
Landlord Delay, specifying the action or inaction by Landlord that Tenant
contends constitutes the Landlord Delay. If such action or inaction is not cured
by Landlord within two (2) Business Days of receipt of such Delay Notice (the
"Grace Period"), than a Landlord Delay, as set forth in such Delay Notice, shall
be deemed to have occurred commencing as of the expiration of the Grace Period;
provided that there shall be no Grace Period in circumstances where Landlord is
obligated under the terms hereof to grant its consent or approval within a
prescribed period of time and Landlord fails to advise Tenant of its consent or
rejection within such period. Notwithstanding the foregoing, nothing set forth
in this Section 3, shall be deemed a waiver of Landlord's right, by any means
available pursuant to the terms of the Lease or applicable law, to dispute
whether the facts as described by Tenant in the Delay Notice constitute a
Landlord Delay.
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4. Payment of Total Construction Cost. Prior to commencement of
construction of the Improvements, Tenant shall (i) enter into a guaranteed
maximum price amendment (the "GMP Amendment") to the Construction Contract,
providing for a guaranteed maximum price for construction of the Improvements
("GMAX Price") and progress payments and (ii) provide to Landlord a revised
itemized statement of the Estimated Total Construction Cost based upon such GMAX
Price and estimates of the other components thereof as reasonably determined by
Tenant. Tenant shall timely make all payments to the Contractor as and when
required under the terms of the Construction Contract and the GMP Amendment.
5. Miscellaneous.
(a) Use of Premises. Tenant agrees that, in connection with the
Improvements and its use of the Premises prior to the Commencement Date, Tenant
shall have those duties and obligations with respect thereto that it has
pursuant to the Lease during the Term, except the obligation for payment of
Fixed Rent, Tenant's Tax Payment and Tenant's Operating Payment and further
agrees that Landlord shall not be liable in any way for injury, loss, or damage
which may occur to any of the Improvements or installations made in the
Premises, or to any personal property placed therein, the same being at Tenant's
sole risk. In addition, Tenant shall not be obligated to reimburse Landlord for
any electricity, water, gas or other utilities consumed at the Premises by
Tenant's Contractors.
(b) No Other Landlord Work. Except as expressly set forth
herein, Landlord has no other agreement with Tenant and Landlord has no other
obligation to do any other work or pay any amounts with respect to the Premises.
Any other work in the Premises which may be permitted by Landlord pursuant to
the terms and conditions of the Lease shall be done at Tenant's sole cost and
expense and in accordance with the terms and conditions of the Lease.
(c) Limited Application. This Agreement shall not be deemed
applicable to any additional space added to the original Premises at any time or
from time to time, whether by any options under the Lease or otherwise, or to
any portion of the original Premises or any additions thereto in the event of a
renewal or extension of the initial term of the Lease, whether by any options
under the Lease or otherwise, unless expressly so provided in the Lease or any
amendment or supplement thereto.
(d) Payment Default. The failure by Tenant to pay any monies due
Landlord pursuant to this Agreement within the time period herein stated shall
be deemed an Event of Default under the terms of the Lease and for which
Landlord shall be entitled to exercise all remedies available to Landlord for
nonpayment of Rent. All late payments shall bear interest pursuant to Section
2.6 of the Lease.
(e) Building Upgrades. Tenant hereby acknowledges and agrees
that the Improvements shall include, without limitation, the following items for
the Building, each of which shall be subject to Landlord's reasonable approval
with respect thereto: (1) upgrading of the main Building lobby, including,
without limitation, installation of a new lobby desk, (2) upgrading of all
Building restrooms and (3) a card-key secured building-access system. In
addition, if required by the City of Cupertino in connection with the
construction of the
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Improvements, Tenant shall be required, at its sole cost and expense, for
performing any and all modifications to the Building, including, without
limitation, any Building System, necessary to bring the Building into compliance
with all Requirements in effect on the Commencement Date (including the
Americans With Disabilities Act, 42 U.S.C. (S) 12,101 et seq.), but specifically
excluding any such modifications (i) to the structural elements of the Building
floors, exterior walls and interior load bearing walls and/or (ii) that involve
the removal, encapsulation or other treatment of Hazardous Materials ((i) and
(ii) collectively, the "Landlord Compliance Items").
(f) Warranties. Upon completion of the Improvements, Tenant
shall provide Landlord with copies of all warranties of at least one (1) year
duration on all components of the Improvements.
(g) Protection of Building. Tenant will take all reasonable and
customary precautionary steps to protect its facilities and the facilities of
others affected by the Improvements and properly to police same and Landlord
shall have no responsibility for any loss by theft or otherwise. Tenant shall at
all times keep the Premises and adjacent areas free from accumulations of waste
materials or rubbish caused by its suppliers, contractors or workmen. Landlord
may require daily clean-up if required for fire prevention and life safety
reasons or applicable laws and reserves the right to do clean-up at the expense
of Tenant if Tenant fails to comply with Landlord's cleanup requirements. At the
completion of the Improvements, Tenant's Contractors shall forthwith remove all
rubbish and all tools, equipment and surplus materials from and about the
Premises and Building. Any damage caused by Tenant's Contractors to any portion
of the Building or to any property of Landlord shall be repaired forthwith after
written notice from Landlord to its condition prior to such damage by Tenant at
Tenant's expense.
(h) Compliance by all Tenant Contractors. Tenant shall impose and
enforce all terms hereof on Tenant's Contractors and Tenant's designers,
architects and engineers. Landlord shall have the right (after first making
reasonable efforts to contact telephonically Tenant or its construction
representative, CB Richard Ellis, Inc. or any other representative appointed by
Tenant, regarding such concerns) to order Tenant or any of Tenant's Contractors,
designers, architects or engineers who willfully violate the provisions of this
Agreement to cease work and remove himself or itself and his or its equipment
and employees from the Building.
(i) Accidents, Notice to Landlord. Tenant's Contractors shall
assume responsibility for the prevention of accidents to its agents and
employees and shall take all reasonable safety precautions with respect to the
work to be performed and shall comply with all reasonable safety measures
initiated by the Landlord and with all applicable laws, ordinances, rules,
regulations and orders of any public authority for the safety of persons or
property. Tenant shall advise the Tenant's Contractors to report to Landlord any
injury to any of its agents or employees and shall furnish Landlord a copy of
the accident report filed with its insurance carrier within three (3) days of
its occurrence.
(j) Required Insurance. Tenant shall cause Tenant's Contractors
to secure, pay for, and maintain during the performance of the construction of
the Improvements, insurance in the following minimum coverages and limits of
liability:
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(i) Workmen's Compensation and Employer's Liability
Insurance as required by law.
(ii) With respect to (A) the General Contractor, Commercial
General Liability Insurance (including Owner's and Contractors' Protective
Liability) in an amount not less than Two Million Dollars ($2,000,000) per
occurrence, whether involving bodily injury liability (or death resulting
therefrom) or property damage liability or a combination thereof with a minimum
aggregate limit of Two Million Dollars ($2,000,000), and with umbrella coverage
with limits not less than Ten Million Dollars ($10,000,000); (B) all other of
Tenant's Contractors, Commercial General Liability Insurance (including Owners'
and Contractors' Protective Liability) in an amount not less than One Million
Dollars ($1,000,000) per occurrence, whether including bodily injury liability
(or death resulting therefrom) or property damage liability or a combination
thereof. Such insurance shall provide for explosion and collapse, completed
operations coverage with a two-year extension after completion of the work, and
broad form blanket contractual liability coverage and shall insure Tenant's
Contractors against any and all claims for bodily injury, including death
resulting therefrom and damage to the property of others and arising from its
operations under the contracts whether such operations are performed by Tenant's
Contractors, or by anyone directly or indirectly employed by any of them.
(iii) Comprehensive Automobile Liability Insurance,
including the ownership, maintenance, and operation of any automotive equipment,
owned, hired, or non-owned in an amount not less than Five Hundred Thousand
Dollars ($500,000) for each person in one accident, and One Million Dollars
($1,000,000) for injuries sustained by two or more persons in any one accident
and property damage liability in an amount not less than One Million Dollars
($1,000,000) for each accident. Such insurance shall insure Tenant's Contractors
against any and all claims for bodily injury, including death resulting
therefrom, and damage to the property of others arising from its operations
under the contracts, whether such operations are performed by Tenant's
Contractors, or by anyone directly or indirectly employed by any of them.
(iv) "All-risk" builder's risk insurance upon the entire
Improvements to the full insurance value thereof. Such insurance shall include
the interest of Landlord and Tenant (and their respective contractors and
subcontractors of any tier to the extent of any insurable interest therein) in
the Improvements and shall insure against the perils of fire and extended
coverage and shall include "all-risk" builder's risk insurance for physical loss
or damage including, without duplication of coverage, theft, vandalism, and
malicious mischief. If portions of the Improvements are stored off the site of
the Building or in transit to such site are not covered under such "all-risk"
builder's risk insurance, then Tenant shall effect and maintain similar property
insurance on such portions of the Improvements. Any loss insured under such
"all-risk" builder's risk insurance is to be adjusted with Landlord and Tenant
and made payable to Landlord as trustee for the insureds, as their interest may
appear, subject to the agreement reached by such parties in interest, or in the
absence of any such agreement, then in accordance with a final, nonappealable
order of a court of competent jurisdiction. If after such loss no other special
agreement is made, the decision to replace or not replace any such damaged the
Improvements shall be made in accordance with the terms and provisions of the
Lease including, without limitation, this Agreement. The waiver of subrogation
provisions contained in the Lease shall apply to the "all-risk" builder's risk
insurance policy to be obtained by Tenant pursuant to this paragraph.
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All policies (except the workmen's compensation policy) shall be
endorsed to include as additional named insureds Landlord and its officers,
employees, and agents, Landlord's contractors, Landlord's architect, and such
additional persons as Landlord may designate. Such endorsements shall also
provide that all additional insured parties shall be given thirty (30) days'
prior written notice of any reduction, cancellation, or nonrenewal of coverage
by certified mail, return receipt requested (except that ten (10) days' notice
shall be sufficient in the case of cancellation for nonpayment of premium) and
shall provide that the insurance coverage afforded to the additional insured
parties thereunder shall be primary to any insurance carried independently by
such additional insured parties. At Tenant's request, Landlord shall furnish a
list of names and addresses of parties to be named as additional insureds. The
insurance policies required hereunder shall be considered as the primary
insurance and shall not call into contribution any insurance then maintained by
Landlord. Additionally, where applicable, such policy shall contain a
crossliability and severability or interest clause.
To the fullest extent permitted by law, Tenant and Landlord (and its
contractors) shall indemnify and hold harmless the other party, its officers,
agents and employees, from and against all claims, damages, liabilities, losses
and expenses of whatever nature, including but not limited to reasonable
attorneys' fees, the cost of any repairs to the Premises or Building
necessitated by activities of the indemnifying party's contractors, bodily
injury to persons or damage to property of the indemnified party, its employees,
agents, invitees, licensees, or others, arising out of or resulting from the
performance of work by the indemnifying party or its contractors. The foregoing
indemnity shall be in addition to the insurance requirements set forth above and
shall not be in discharge or substitution of the same, and shall not be limited
in any way by any limitations on the amount or type of damages, compensation or
benefits payable by or for Tenant's Contractors under Workers' or Workmen's
Compensation Acts, Disability Benefit Acts or other Employee Benefit Acts.
(k) Quality of Work. The Improvements shall be constructed in a
first-class workmanlike manner using only good grades of material and in
compliance with the Final Plans, and all Requirements.
(l) "As-Built" Plans. Upon completion of the Improvements,
Tenant shall furnish Landlord with "as built" plans for the Premises, final
waivers of lien for the Improvements, a detailed breakdown of the costs of the
Improvements (which may be in the form of an owner's affidavit) and evidence of
payment reasonably satisfactory to Landlord, and an occupancy permit for the
Premises.
(m) Mechanics' Liens. Tenant shall not permit any of the
Tenant's Contractors to place any lien upon the Building, and if any such lien
is placed upon the Building, Tenant shall within ten (10) days of notice
thereof, cause such lien to be discharged of record, by bonding or otherwise. If
Tenant shall fail to cause any such lien to be discharged, Landlord shall have
the right to have such lien discharged and Landlord's expense in so doing,
including bond premiums, reasonable legal fees and filing fees, shall be
immediately due and payable by Tenant.
(n) Exculpation. Neither Landlord's Agent nor the members or
partners compromising Landlord or Landlord's Agent, nor the shareholders (nor
any of the partners comprising same), directors, officers, or shareholders of
any of the foregoing (collectively, the
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"Parties") shall be liable for the performance of Landlord's obligations under
this Agreement. Tenant shall look solely to Landlord to enforce Landlord's
obligations hereunder and shall not seek any damages against any of the Parties.
The liability of Landlord for Landlord's obligations under this Agreement shall
not exceed and shall be limited to Landlord's interest in the Building and
Tenant shall not look to the property or assets of any of the Parties in seeking
either to enforce Landlord's obligations under this Agreement or to satisfy a
judgment for Landlord's failure to perform such obligations. Upon a sale of the
Building by Landlord, Tenant shall look solely to the buyer to enforce its
rights under this Agreement, and, if and to the extent such buyer has not
assumed Landlord's duties, obligations and liabilities hereunder, Tenant may
only look to the actual cash proceeds received by Landlord in connection with
such sale in seeking to satisfy a judgment for Landlord's failure to perform its
obligations under this Agreement.
(o) Measurements. Tenant shall be solely responsible to
determine at the site all dimensions of the Premises and the Building which
affect any work to be performed by Tenant hereunder.
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Schedule 1
to
Workletter Agreement
LANDLORD'S WORK
---------------
Landlord shall perform the following work at the Building or in the
Premises, as applicable:
1. The existing HVAC System shall be rehabilitated on the
following basis:
(a) Disconnect the third floor trunk ductwork from the existing
central built-up dx systems.
(b) Remove existing pressure dependent VAV and specially adapted VAV
terminal zoning units, existing low pressure ductwork downstream of VAV units
and supply air diffusers connected thereto.
(c) Install two nominal 60-ton rooftop packaged water cooled dx air
handling units to provide cooling air supply for the third floor. Replace the
central spine portion of the third floor main supply air trunk ductwork and
connect to the new rooftop package units. Recondition existing supply air branch
ductwork. Install new supplemental branch duct mains, two per side.
(d) Reconfigure the existing central built-up dx systems to provide
cooling air supply for only the first and second floors. Remove portions of the
existing supply air risers and replace with enlarged ductwork.
(e) Replace the central spine portion of the first and second
floor(s) main supply air trunk ductwork and connect to the new cooling supply
air risers. Recondition existing supply air branch ductwork. Install new
supplemental branch duct mains, two per side per floor
(f) Clean, recondition and maintain existing central built-up dx
system equipment, controls and actuators to ensure optimal operation.
(g) Access to plenum space for existing ductwork and terminal unit
removal and installation of new ductwork shall be by selective demolition of
portions of existing ceiling systems. Replacement of ceiling tile and grid shall
be Tenant Improvement Scope.
(h) The existing heating system utilizing perimeter fan coil units
with hot water heating coils will remain as-is. Fan coil unit coils and ductwork
shall be cleaned.
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(i) The existing condenser water piping system and cooling tower will
remain as-is, except for disconnecting the two second floor self-contained water
cooled dx units and for pipe modifications to serve the two new rooftop packaged
water cooled dx units. This system may be used (Tenant Improvement Scope) for
condenser water supply for 7/24 supplemental cooling systems.
(j) With the exception of partial replacement of portions of trunk
duct supply air mains and installation of supplemental branch supply air mains,
the existing air distribution system will remain as-is.
(k) Tenant Improvement Scope will require the addition of pressure
independent VAV terminal units, pneumatic controls, downstream ductwork, supply
diffusers, etc. as may be necessary to accommodate tenant cooling criteria
utilizing upgraded cooling system capacity.
(l) The existing nominal 25 ton rooftop packaged dx air handling unit
serving the existing third floor computer room will remain in place. Other
existing small packaged units shall be removed.
2. Remove the existing party deck located on the Building roof
(the "Roof Deck") and repair, resurface or replace those portions of the roof
membranes and/or roof coatings in need of such repair or replacement, all as
reasonably determined by Landlord
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EXHIBIT E
HVAC SPECIFICATIONS
The Building HVAC System serving the Premises is designed (at a
minimum) to maintain average temperatures within the Premises during the hours
of 8:00 a.m. to 6:00 p.m. on Business Days of (i) not less than 68 degrees F.
during the heating season when the outdoor temperature is 34 degrees F. or more
and (ii) not more than 78 degrees F. and 50% humidity + 5% during the cooling
season, when the outdoor temperatures are at 85 degrees F. dry bulb and 66
degrees F. wet bulb, with, in the case of clauses (i) and (ii), a population
load per floor of not more than one person per 150 square feet of useable area,
other than in dining and other special use areas per floor for all purposes, and
shades fully drawn and closed, including lighting and power, and to provide at
least .15 CFM of outside ventilation per square foot of rentable area. Use of
the Premises, or any part thereof, in a manner exceeding the foregoing design
conditions or rearrangement of partitioning after the initial preparation of the
Premises which interferes with normal operation of the air-conditioning service
in the Premises may require changes in the air-conditioning system serving the
Premises.
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EXHIBIT F
CLEANING SPECIFICATIONS
GENERAL CLEANING
----------------
NIGHTLY
General Offices:
---------------
1. All hard surfaced flooring to be swept using approved dustdown
preparation.
2. Carpet sweep all carpets, moving only light furniture (desks, file
cabinets, etc. not to be moved).
3. Hand dust and wipe clean all furniture, fixtures and window sills.
4. Empty all waste receptacles and remove wastepaper.
5. Wash and sanitize all Building water fountains and coolers.
6. Sweep all private stairways.
7. Hand dust and sweep all Building elevators.
Lavatories:
----------
1. Sweep and wash all floors, using proper disinfectants.
2. Wash and polish all mirrors, shelves, bright work and enameled
surfaces.
3. Wash and disinfect all basins, bowls and urinals.
4. Wash all toilet seats.
5. Hand dust and clean all partitions, tile walls, dispensers and
receptacles in lavatories and restrooms.
6. Empty paper receptacles, fill receptacles from tenant supply and
remove wastepaper.
7. Fill toilet tissue holders from Tenant supply and fill sanitary napkin
dispenser from Tenant supply.
8. Empty and clean sanitary disposal receptacles.
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WEEKLY
1. Vacuum all carpeting and rugs.
2. Dust all door louvers and other ventilating louvers within a person's
normal reach.
3. Wipe clean all brass and other bright work.
QUARTERLY
High dust premises complete including the following:
1. Dust all pictures, frames, charts, graphs and similar wall hangings
not reached in nightly cleaning.
2. Dust all vertical surfaces, such as walls, partitions, doors and other
surfaces not reached in nightly cleaning.
3. Dust all venetian and horizontal blinds.
4. Wash the interior and exterior of all windows.
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EXHIBIT G
RULES AND REGULATIONS
1. No awnings or other projections shall be attached to the outside
walls of the Building. No curtains, blinds, shades, screens or other
obstructions shall be attached to or hung in or used in connection with any
exterior window or entry door of the Premises, without the prior written consent
of Landlord.
2. No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed to any part of the outside of the
Premises or Building or on the inside of the Premises if the same can be seen
from the outside of the Premises without the prior written consent of Landlord.
Lettering on doors, if and when approved by Landlord, shall be inscribed,
painted or affixed for Tenant in a size, color and style acceptable to Landlord.
3. The grills, louvers, skylights, windows and doors that reflect or
admit light and/or air into the Premises, halls, passageways or other public
places in the Building shall not be covered or obstructed by Tenant, nor shall
any bottles, parcels or other article be placed on the window sills, radiators
or convectors so as to be visible from the exterior of the Building.
4. Landlord shall have the right to prohibit any advertising by any
Tenant which, in Landlord's opinion, tends to impair the reputation of the
Building or its desirability as a Building for offices, and upon written notice
from Landlord, Tenant shall refrain from or discontinue such advertising.
5. The sidewalks, entrances, passages, courts, elevators,
vestibules, stairways, corridors or halls shall not be obstructed or encumbered
by any Tenant or used for any purposed other than ingress of egress to and from
the Premises and for delivery of merchandise and equipment in a prompt and
efficient manner, using elevators and passageways designated for such delivery
by Landlord.
6. Except in those areas designated by Tenant as "security areas,"
all locks or bolts of any kind shall be operable by the Grand Master Key. No
locks shall be placed upon any of the doors or windows by Tenant, nor shall any
changes be made in locks or the mechanism thereof which shall make such locks
inoperable by said Grand Master Key. Tenant shall, upon the termination of its
tenancy, turn over to Landlord all keys of stores, offices and toilet rooms,
either furnished to or otherwise procured by Tenant and in the event of the loss
of any keys furnished by Landlord, Tenant shall pay to Landlord the cost
thereof.
7. Tenant shall keep the entrance door to the Premises closed at all
times.
8. Except in connection with Tenant's initial move-in to the
Premises which may occur at such times as Tenant may reasonably require, all
removal or the carrying in or out of any freight, furniture, package boxes,
crates or any other object or matter of any description must take place other
than during the hours of 8:00 a.m. and 6:00 p.m. on Business Days and in such
elevators as Landlord or its Agent may reasonably determine from time to time;
provided that the provisions of this Section 8 shall not be deemed to apply to
Tenant so long as the sole occupant
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of the Building is Portal Software, Inc. or a Related Entity, or in any case to
the receipt or dispatch by Tenant during ordinary business hours of packages
from a recognized courier service such as Federal Express, United Parcel or DHL.
9. There shall not be used in any space or in the public halls of
the Building, either by Tenant or by jobbers or any others in the moving or
delivery or receipt of safes, freight, furniture, packages, boxes, crates,
paper, office material or any other matter or thing, any hand trucks except
those equipped with rubber tires, side guards and such other safeguards as
Landlord requires.
10. None of Tenant's employees, visitors or contractors shall be
permitted to have access to the Building's roof, mechanical, electrical or
telephone rooms without permission from Landlord.
11. Tenant shall not make or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them.
12. If Tenant elects to lay floor tile, or other similar floor
covering so that the same shall come in direct contact with the floor of the
Premises, an interlining of builder's deadening felt shall be first affixed to
the floor by a paste or other material, soluble in water; the use of cement or
other similar adhesive material being expressly prohibited.
13. Neither Tenant nor any of Tenant's servants, employees, agents,
visitors or licensees shall at any time bring or keep upon the Premises any
hazardous material, inflammable, combustible or explosive fluid, chemical or
substance except such minimal quantities that are incidental to normal office
occupancy.
14. Tenant shall not use or keep, or permit to be used or kept, any
hazardous or toxic materials or any foul or noxious gas or substance in the
Premises or permit or suffer the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by
reason of noise, odors, vibrations or interfere in any way with other tenants or
those having business therein.
15. Tenant shall not cause or permit any odors of cooking or other
processes or any unusual or objectionable odors to emanate from the demised
Premises which would annoy other tenants or create a public or private nuisance.
16. [Intentionally Deleted]
17. Tenant may, at its sole cost and expense and subject to
compliance with all applicable requirements of the Lease, install and maintain
vending machines for the exclusive use by Tenant, its officers, employees and
business guests, provided that each machine, where necessary, shall have a
waterproof pan thereunder and be connected to a drain.
18. Tenant shall not employ any person or persons other than the
janitor of Landlord for the purpose of cleaning the Premises, unless otherwise
agreed to by Landlord in writing or as permitted by Section 11.8 of the Lease.
Tenant shall not cause any unnecessary
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labor by reason of such Tenant's carelessness or indifference in the
preservation of good order and cleanliness. Tenant shall not clean or permit the
cleaning of any window in the Premises from the outside, in violation of any
requirements.
19. Tenant shall store all its trash, garbage and recyclables within
its Premises. No material shall be disposed of which may result in a violation
of any law or ordinance governing such disposal. All garbage and refuse disposal
shall be made only though entry ways and elevators provided for such purposes
and at such times as Landlord shall designate. Tenant shall use the Building's
hauler.
20. Tenant shall, at its expense, provide artificial light for the
employees of Landlord while doing janitor service or other cleaning, and in
making repairs or alterations in the Premises.
21. Except for the normal hanging of pictures on the interior walls
of the Premises or the installation of millwork or wall coverings, Tenant shall
not maliciously mark, paint, drill into or in any way deface any part of the
Premises or the Building. No boring, cutting or stringing of wires shall be
permitted, except with prior written consent of Landlord, and as Landlord may
direct.
22. The water and wash closets, electrical closets, mechanical rooms,
fire stairs and other plumbing fixtures shall not be used for any purposes other
than those for which they were constructed and no sweepings, rubbish, rags,
acids or other substances shall be deposited therein. All damages resulting from
any misuse of the fixtures shall be borne by Tenant where its servants,
employees, agents, visitors or licensees shall have caused the same, other than
wear and tear.
23. Tenant, before closing and leaving the Premises at any time,
shall see that all lights, water, faucets, etc. are turned out. All entranced
doors in the Premises shall be left locked by Tenant when the Premises are not
in use.
24. No animals of any kind (except for seeing eye dogs) shall be
brought into or kept by any Tenant in or about the Premises or the Building.
25. Canvassing, soliciting and peddling in the Building is prohibited
and each Tenant shall cooperate to prevent the same.
26. The Premises shall not be used for lodging or sleeping or for any
immoral or illegal purposes.
27. The Premises shall not be used for manufacturing (other than
software manufacturing), for the storage of merchandise, or for the sale of
merchandise, goods or property of any kind at auction or otherwise, except as
specifically permitted by the Lease.
28. Tenant shall not occupy or permit any portion of the Premises to
be occupied as an office for a public stenographer or public typist or for the
possession, storage, manufacture or sale of narcotics in any form or as a barber
or manicure shop or as an employment bureau.
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Tenant shall not engage or pay any employees on the Premises, except those
actually working for such Tenant on said Premises, nor advertise for labor
giving an address at said Premises.
29. Tenant shall not accept barbering or bootblacking services in the
Premises, from any company or persons not approved by Landlord, which approval
shall not be unreasonably withheld, and at hours and under regulations other
than as reasonably fixed by Landlord.
30. The requirements of Tenant will be attended to only upon written
application at the office of the Building (or by a telephone request by an
authorized employee of Tenant), except in the event of any emergency condition.
Employees of Landlord or Landlord's Agent shall not perform any work or do
anything outside of the regular duties, unless under special instructions from
of office of Landlord or in response to an emergency condition.
31. Tenant shall be responsible for the delivery and pick up of all
mail from the United States Post Office.
32. Landlord reserves the right to exclude from the Building between
the hours of 6 p.m. and 8 a.m. and at all hours on Saturdays, Sundays and
holidays observed by the Building all persons who do not present a pass to the
Building signed or approved by Landlord, which approval shall not be
unreasonably withheld. Tenant shall be responsible for all persons for whom a
pass shall be issued at the request of Tenant and shall be liable to Landlord
for all acts of such persons.
33. Tenant shall not invite to the Premises, or permit the visit of,
persons in such number or under such conditions as to interfere with the use and
enjoyment of any of the plazas, entrances, corridors, elevators and other
facilities of the Building by other tenants.
34. Landlord may waive any one or more of these Rules and Regulations
for the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
or any other tenant or tenants, nor prevent Landlord from thereafter enforcing
any such Rules and Regulations against any or all of the tenants of the
Building.
35. Landlord shall not be responsible to Tenant or to any other
person for the non-observance or violation of these Rules and Regulations by any
other tenant or other person. Tenant shall be deemed to have read Rules and
Regulations and to have agreed to abide by them as a condition to its occupancy
of the Premises.
36. These Rules and Regulations are in addition to, and shall not be
constructed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease.
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