MENLO OAKS CORPORATE CENTER
STANDARD BUSINESS LEASE
(4200 BOHANNON DRIVE)
BASIC LEASE INFORMATION
| August 18 , 1998 | Landlord: | MENLO OAKS PARTNERS, L.P., a Delaware limited partnership | Landlords Address: | 4400 Bohannon Drive Suite 260 Menlo Park, CA 94025 Attn: Mr. J. Marty Brill, Jr. Phone: (650) 329-9030 Fax: (640) 329-0129 |
Tenant: | E*TRADE GROUP, INC., a Delaware corporation | Tenants Address: | Before Commencement Date: | 2400 Geng Road Palo Alto, CA 94303 Attn: Vice President of Corporate Services Phone: (650) 842-2500 Fax: (650) 842-2552 |
After Commencement Date: | 4500 Bohannon Drive Menlo Park, CA 94025 Attn: Vice President of Corporate Services |
Premises: | Approximately forty-six thousand two hundred fifty-five (46,255) rentable square feet of space in the Building, as more particularly shown on Exhibit A attached hereto. | Building: | That certain office building located within the Project, commonly known as 4200 Bohannon Drive, consisting of approximately forty-six thousand two hundred fifty-five (46,255) rentable square feet of space. | Lot: | That certain real property located within the Project on which the Building is located, as more particularly described in Exhibit B, attached hereto. | Phase: | A portion of the Project, consisting of the Lot, all of the improvements located thereon and all appurtenances thereto. The Phase includes approximately ninety-two thousand eight hundred sixty-nine (92,869) rentable square feet of space in two (2) buildings located thereon (including the Building). | Project: | That certain business office park located in Menlo Park, California, comprised of three (3) separate phases and seven (7) office buildings and including approximately three hundred seventy-four thousand one hundred thirty-nine (374,139) rentable square feet of space. The Project is commonly known as Menlo Oaks Corporate Center. |
| Term: | Ten (10) years | Commencement Date: | The earlier of (i) the date on which Tenant commences its business operations in the Premises or (ii) November 15, 1998. | Base Rent (Initial): | One Hundred Forty-Five Thousand Seven Hundred Three and 25/100 Dollars ($145,703.25) per month, subject to adjustment pursuant to Section 4.2 | Security Deposit: | One Hundred Ninety-Eight Thousand Five Hundred Seventy-Eight and 96/100 Dollars ($198,578.96) | Tenants Building Percentage Share: | One hundred percent (100%) | Tenants Phase Percentage Share: | Forty-nine and 807/1000ths percent (49.807%) | Tenants Project Percentage Share: | Twelve and 46/100 percent (12.46%) | Default Percentage: | One hundred twenty-five percent (125%) | Permitted Use: | For general office purposes, software research and development, data processing and incidental uses thereto and no other use whatsoever. | Business Hours: | Twenty-four (24) hours a day; seven (7) days a week | Non-Exclusive Parking: | Forty-nine and 807/1000ths percent (49.807%) of the available parking spaces in the Phase. The Phase includes approximately 414 parking spaces. | Tenant Improvements:Base Allowance: | Two Hundred Thirty-One Thousand Two Hundred Seventy-Five Dollars ($231,275.00) | Additional Allowance: | Four Hundred Sixty-Two Thousand Five Hundred Fifty Dollars ($462,550.00) | Adjustment for Overage: | Monthly Base Rent shall be increased One and One-Half Cents ($0.015) for each Dollar of Additional Allowance provided by Landlord. | Brokers: | Landlords Broker: | None | Tenants Broker: | Tory Corporate Real Estate Advisors, Inc. (dba The Staubach Company) | Exhibits: | Exhibit ADiagram of Premises Exhibit BLegal Description of Lot Exhibit CWork Letter Exhibit DCommencement Date Memorandum Exhibit ERules and Regulations Exhibit F4400 Bohannon Expansion Option Space Exhibit GLandlords Sign Criteria |
MENLO OAKS CORPORATE CENTERSTANDARD BUSINESS LEASE
THIS MENLO OAKS CORPORATE CENTER STANDARD BUSINESS LEASE (this Lease), dated as of this 18th day of August, 1998 (the Effective Date), is entered into by and between MENLO OAKS PARTNERS, L.P., a Delaware limited partnership (Landlord), and E*Trade Group, Inc., a Delaware corporation (Tenant), on the terms and conditions set forth below.
1. DEFINITIONS. The following terms shall have the meanings set forth below:
1.1. Building. The term Building shall have the meaning set forth in the Basic Lease Information.
1.2. Building Common Areas. The Areas and facilities within the Building provided and designated by Landlord for the general use, convenience or benefit of Tenant and other tenants and occupants of the Building (e.g., common stairwells, stairways, hallways, shafts, elevators, restrooms, janitorial telephone and electrical closets, pipes, ducts, conduits, wires and appurtenant fixtures servicing the Building).
1.3. Commencement Date. The term Commencement Date shall have the meaning set forth in Section 3.
1.4. Common Areas. The term Common Areas shall mean the Building Common Areas, the Phase Common Areas and the Project Common Areas.
1.5. Lot. The term Lot shall mean the land upon which the Building is located, as more particularly described in Exhibit B, attached hereto.
1.6. Phase. The term Phase have the meaning set forth in the Basic Lease Information.
1.7. Phase Common Areas. The areas and facilities within the Phase provided and designated by Landlord for the general use, convenience or benefit of Tenant and other tenants and occupants of the Phase (e.g., uncovered and unreserved parking areas, walkways and accessways).
1.8. Premises. The term Premises shall have the meaning set forth in the Basic Lease Information.
1.9. Project. The term Project shall have the meaning set forth in the Basic Lease Information.
1.10. Project Common Areas. The term Project Common Areas shall mean the areas and facilities within the Project provided and designated by Landlord for the general use, convenience or benefit of Tenant and other tenants and occupants of the Project (e.g., walkways, traffic aisles, accessways, utilities and communications conduits and facilities).
1.11. Rentable Area. The term Rentable Area shall mean the rentable area of the Premises, Building, Phase and Project as reasonably determined by Landlord. The parties agree that for all purposes under this Lease, the Rentable Area of the Premises, Building, Phase and Project shall be deemed to be the number of rentable square feet identified in the Basic Lease Information.
1.12. Tenants Building Percentage Share. The term Tenants Building Percentage Share shall mean the percentage specified in the Basic Lease Information. If the Rentable Area of the Premises or the Rentable Area of the Building is changed, then Tenants Building Percentage Share shall be adjusted to a percentage equal to the Rentable Area of the Premises divided by the Rentable Area of the Building.
1.13. Tenants Phase Percentage Share. The term Tenants Phase Percentage Share shall mean the percentage specified in the Basic Lease Information. If the Rentable Area of the Premises or the Rentable Area of the Phase is changed, then Tenants Phase Percentage Share shall be adjusted to a percentage equal to the Rentable Area of the Premises divided by the Rentable Area of the Phase.
1.14. Tenants Project Percentage Share. The term Tenants Project Percentage Share shall mean the percentage specified in the Basic Lease Information. If the Rentable Area of the Premises or the Rentable Area of the Project is changed, then Tenants Percentage Project Share shall be adjusted to a percentage equal to the Rentable Area of the Premises divided by the Rentable Area of the Project.
1.15. Term. The term Term shall have the meaning described in Section 3.
2. PREMISES.
2.1. Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, together with the right in common to use the Common Areas, for the Term.
2.2. Condition Upon Delivery. Tenant acknowledges that it has had an opportunity to thoroughly inspect the Premises and, subject to Landlords obligations under Section 8.1, Tenant accepts the Premises in its existing as is condition, with all faults and defects and without any representation or warranty of any kind, express or implied.
2.3. Reserved Rights. Landlord reserves the right to do the following from time to time:
(a) Changes. To install, use, maintain, repair, replace and relocate pipes, ducts, shafts, conduits, wires, appurtenant meters and mechanical, electrical and plumbing equipment and appurtenant facilities for service to other parts of the Building, Phase or Project above the ceiling surfaces, below the floor surfaces and within the walls of the Premises and in the central core areas of the Building and in the Building Common Areas, and to install, use, maintain, repair, replace and relocate any pipes, ducts, shafts, conduits, wires, appurtenant meters and mechanical, electrical and plumbing equipment and appurtenant facilities servicing the Premises, which are located either in the Premises or elsewhere outside of the Premises;
(b) Boundary Changes. To change the boundary lines of the Lot or the Project;
(c) Facility Changes. To alter or relocate the Common Areas or any facility within the Project;
(d) Parking. To designate and/or redesignate specific parking spaces in the Phase or the Project for the exclusive or non-exclusive use of specific tenants in the Phase or the Project;
(e) Services. To install, use, maintain, repair, replace, restore or relocate public or private facilities for communications and utilities on or under the Building, Phase and/or Project; and
(f) Other. To perform such other acts and make such other changes in, to or with respect to the Common Areas, Building, Phase and/or Project as Landlord may reasonably deem appropriate.
2.4. Work Letter. Landlord and Tenant shall each perform the work required to be performed by it as described in the Work Letter attached hereto as Exhibit C. Landlord and Tenant shall each perform such work in accordance with the terms and conditions contained therein.
3. TERM
3.1. Commencement of Term. The term of this Lease (the Term) shall be for the period of time specified in the Basic Lease Information unless sooner terminated as hereinafter provided. The Term shall commence on the Commencement Date and shall continue in full force and effect for the period specified as the Term or until this Lease is terminated as otherwise provided herein.
3.2. Commencement Date Memorandum. Following the date on which Landlord delivers possession of the Premises to Tenant or the Commencement Date, Landlord may prepare and deliver to Tenant a commencement date memorandum (the Commencement Date Memorandum) in the form of Exhibit D, attached hereto, subject to such changes in the form as may be required to insure the accuracy thereof. The Commencement Date Memorandum shall certify the date on which Landlord delivered possession of the Premises to Tenant and the dates upon which the Term commences and expires. Tenants failure to execute and deliver to Landlord the Commencement Date Memorandum within five (5) days after Tenants receipt of the Commencement Date Memorandum shall be conclusive upon Tenant as to the matters set forth in the Commencement Date Memorandum.
4. RENT
4.1. Base Rent. The monthly base rent (Base Rent) shall be the amount set forth in the Basic Lease Information, subject to adjustment pursuant to Section 4.2. Tenant shall pay the Base Rent to Landlord in advance upon the first day of each calendar month of the Term, at Landlords address or at such other place designated by Landlord in a notice to Tenant, without any prior demand therefor and without any deduction, abatement or setoff whatsoever. If the Term shall commence or end on a day other than the first day of a calendar month, then Tenant
shall pay, on the Commencement Date and first day of the last calendar month, a pro rata portion of the Base Rent, prorated on a per diem basis, with respect to the portions of the fractional calendar month included in the Term. Concurrently with executing this Lease, Tenant shall pay to Landlord the Base Rent due for the first full calendar month during the Term along with the Security Deposit as provided in Section 4.5 below.
4.2. Adjustment to Base Rent. The Base Rent shall be adjusted as provided in the Rider attached hereto and incorporated herein by reference.
4.3. Additional Rent. All charges required to be paid by Tenant hereunder, including payments for insurance, Impositions, Operating Expenses and any other amounts payable hereunder, shall be considered additional rent (Additional Rent) for the purposes of this Lease, and Tenant shall pay Additional Rent to Landlord upon written demand by Landlord or otherwise as provided in this Lease. The term Rent shall mean Base Rent and Additional Rent.
4.4. Late Payment. If any installment of Rent is not paid, Tenant shall pay to Landlord a late payment charge equal to five percent (5%) of the amount of such delinquent payment of Rent in addition to the installment of Rent then owing, regardless of whether or not a notice of default or notice of termination has been given by Landlord. This provision shall not relieve Tenant from payment of Rent at the time and in the manner herein specified.
4.5. Interest. In addition to the imposition of a late payment charge pursuant to Section 4.3 above, any Rent that is not paid due shall bear interest from the date due until the date paid at the rate (the Interest Rate) that is the lesser of twelve percent (12%) per annum or the maximum rate permitted by law. Landlords acceptance of any interest payments on any past due Rent shall not constitute a waiver by Landlord of Tenants default with respect to the amount of Rent past due or prevent Landlord from exercising any of the rights and remedies available to Landlord under this Lease or at law.
4.6. Security Deposit. Upon executing this Lease, Tenant shall deliver to Landlord cash (the Security Deposit) in the amount specified as the Security Deposit in the Basic Lease Information. The Security Deposit shall secure the performance of all of Tenants obligations under this Lease, including Tenants obligation to pay Rent and other monetary amounts, to maintain the Premises and repair damages thereto, and to surrender the Premises to Landlord upon termination of this Lease in the condition required pursuant to Section 8 below, Landlord may use and commingle the Security Deposit with other funds of Landlord. If Tenant fails to perform Tenants obligations hereunder, Landlord may, but without any obligation to do so, apply all or any portion of the Security Deposit towards fulfillment of Tenants unperformed obligations. If Landlord does so apply all or any portion of the Security D eposit, Tenant, upon written demand by Landlord, shall immediately pay to Landlord a sufficient amount in cash to restore the Security Deposit to the full original amount. Tenants failure to pay to Landlord a sufficient amount in cash to restore the Security Deposit to its original amount within five (5) days after receipt of such demand shall constitute an Event of Default. Tenant shall not be entitled to interest on the Security Deposit. Within thirty (30) days after the expiration or earlier termination of this Lease, if Tenant has then performed all of Tenants obligations hereunder, Landlord shall return the Security Deposit to Tenant. If Landlord sells or otherwise transfers Landlords rights or interest under this Lease, Landlord deliver the Security Deposit to the transferee, whereupon Landlord shall be released from any further liability to Tenant with respect to the Security Deposit.
5. IMPOSITIONS
5.1. Tenants Obligations. Tenant shall pay to Landlord, as Additional Rent, Tenants Phase Percentage Share of Impositions for the Phase during each year of the Term (prorated for any partial calendar year during the Term).
5.2. Definition of Impositions. The term Impositions shall include all transit charges, housing fund assessments, real estate taxes and all other taxes relating to the Premises, Building, Lot and Phase of every kind and nature whatsoever, including any supplemental real estate taxes attributable to any period during the Term; all taxes which may be levied in lieu of real estate taxes; and all assessments, assessment bonds, levies, fees, penalties (if a result of Tenants delinquency) and other governmental charges (including, but not limited to, charges for parking, traffic and any storm drainage/flood control facilities, studies and improvements, water and sewer service studies and improvements, and fire services studies and improvements); and all amounts necessary to be expended because of governmental orders, whether general or special, ordinary or extraordinary, unforeseen as well as foreseen, of any kind and nature for public improvements, services, benefits or any other purpose, which are assessed, based upon the
use or occupancy of the Premises, Building, Lot and/or Phase, or levied, confirmed, imposed or become a lien upon the Premises, Building, Lot and/or Phase, or become payable during the Term, and which are attributable to any period within the Term.
5.3. Limitation. Nothing contained in this Lease shall require Tenant to pay any franchise, estate, inheritance, succession or transfer tax of Landlord, or any income, profits or revenue tax or charge upon the net income of Landlord from all sources; provided, however, that if at any time during the Term under the laws of the United States Government or the State of California, or any political subdivision thereof, a tax or excise on rent, or any other tax however described, is levied or assessed by any such political body against Landlord on account of Rent, or any portion thereof, Tenant shall pay one hundred percent (100%) of any said tax or excise as Additional Rent.
5.4. Installment Election. In the case of any Impositions which may be evidenced by improvement or other bonds or which may be paid in annual or other periodic installments, Landlord shall elect to cause such bonds to be issued or such assessment to be paid in installments over the maximum period permitted by law.
5.5. Estimate of Tenants Share of Impositions. Prior to the commencement of each calendar year during the Term, or as soon thereafter as reasonably practicable, Landlord shall notify Tenant in writing of Landlords estimate of the amount of Impositions which will be payable by Tenant for the ensuing calendar year. On or before the first day of each month during the ensuing calendar year, Tenant shall pay to Landlord in advance, one-twelfth (1/12th) of the estimated amount; provided, however, if Landlord fails to notify Tenant of the estimated amount of Tenants share of Impositions for the ensuing calendar year prior to the end of the current calendar year, Tenant shall be required to continue to pay to Landlord each month in advance Tenants estimated share of Impositions on the basis of the amount due for the immediately prior month until ten (10) days after Landlord notifies Tenant of the estimat ed amount of Tenants share of Impositions for the ensuing calendar year. If at any time it appears to Landlord that Tenants share of Impositions payable for the current calendar year will vary from Landlords estimate, Landlord may give notice to Tenant of Landlords revised estimate for the year, and subsequent payments by Tenant for the year shall be based on the revised estimate.
5.6. Annual Adjustment. Within one hundred twenty (120) days after the close of each calendar year during the Term, or as soon after the one hundred twenty (120) day period as reasonably practicable, Landlord shall deliver to Tenant a statement of the adjustment to the Impositions for the prior calendar year. If, on the basis of the statement, Tenant owes an amount that is less than the estimated payments for the prior calendar year previously made by Tenant, Landlord shall apply the excess to the next payment of Impositions due. If, on the basis of the statement, Tenant owes an amount that is more than the amount of the estimated payments made by Tenant for the prior calendar year, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the statement. The year end statement shall be binding upon Tenant unless Tenant notifies Landlord in writing of any objection thereto within thirty (30) da ys after Tenants receipt of the year end statement. In addition, if, after the end of any calendar year or any annual adjustment of Impositions for a calendar year, any Impositions are assessed or levied against the Premises, Building or Phase that are attributable to any period within the Term (e.g., supplemental taxes or escaped taxes), Landlord shall notify Tenant of its share of such additional Impositions and Tenant shall pay such amount to Landlord within ten (10) days after Landlords written request therefor.
5.7. Personal Property Taxes. Tenant shall pay or cause to be paid, not less than ten (10) days prior to delinquency, any and all taxes and assessments levied upon all of Tenants trade fixtures, inventories and other personal property in, on or about the Premises. When possible, Tenant shall cause Tenants personal property to be assessed and billed separately from the real or personal property of Landlord.
5.8. Taxes on Tenant Improvements. Notwithstanding any other provision hereof, Tenant shall pay to Landlord the full amount of any increase in Impositions during the Term resulting from any and all alterations and tenant improvements of any kind whatsoever placed in, on or about or made to the Premises, Building, Phase or Project for the benefit of, at the request of, or by Tenant.
6. INSURANCE
6.1. Landlord. Landlord shall maintain Special Form property insurance (or its equivalent if Special Form property insurance is not available) including vandalism and malicious mischief coverage for the full replacement cost of the Building (but excluding any equipment, fixtures, alterations, improvements, additions or personal property of Tenant or any alterations, additions or improvements made by or at the request of Tenant to the
Premises, other than those tenant improvements owned by Landlord). Such property insurance shall include endorsements for sprinkler leakage, inflation, building ordinance coverage and such other endorsements as selected by Landlord, together with rental value insurance against loss of Rent for a period of twelve (12) months commencing on the date of loss. Landlord may also carry such other insurance as Landlord may deem prudent or advisable, including, without limitation, liability insurance and hazardous materials, earthquake/volcanic action, flood and/or surface water, boiler and machinery comprehensive coverages in such amounts, with such deductibles and upon such terms as Landlord shall determine. Upon Tenants written request, Landlord shall deliver to Tenant certificates evidencing the coverage required under this Section 6.1. Landlord, either directly or through its agent, may maintain any of the insurance required to be maintained by Landlord pursuant to this Section 6.1 under on e or more blanket policies, insuring other parties and/or other locations, so long as the amounts and coverages required under this Section 6.1 are not diminished as a result thereof.
6.2. Tenant. Tenant shall, at Tenants expense, obtain and keep in force at all times the following insurance:
(a) Commercial General Liability Insurance (Occurrence Form). A policy of commercial general liability insurance (occurrence form) having a combined single limit of not less than, providing coverage for, among other things, blanket contractual liability, premises, products/completed operations and personal and advertising injury coverage;
(b) Automobile Liability Insurance. Comprehensive automobile liability insurance having a combined single limit of not less than Five Million Dollars ($5,000,000.00) per occurrence, and insuring Tenant against liability for claims arising out of ownership, maintenance or use of any owned, hired, borrowed or non-owned automobiles;
(c) Workers Compensation and Employers Liability Insurance. Workers compensation insurance having limits not less than those required by state statute and federal statute, if applicable, and covering all persons employed by Tenant in the conduct of its operations on the Premises (including the all states endorsement and, if applicable, the volunteers endorsement), together with employers liability insurance coverage in the amount of at least Five Million Dollars ($5,000,000.00);
(d) Property Insurance. Special Form property insurance (or its equivalent if Special Form property insurance is not available), including vandalism and malicious mischief, boiler and machinery comprehensive form, if applicable, and endorsement for earthquake sprinkler damage, each covering damage to or loss of Tenants personal property, fixtures and equipment, including electronic data processing equipment (EDP Equipment), media and extra expense, and all alterations, additions and improvements made by or at the request of Tenant to the Premises other than those tenant improvements owned by Landlord. EDP Equipment, media and extra expense shall be covered for perils insured against in the so-called EDP Form. If the property of Tenants invitees is to be kept in the Premises, warehousers legal liability or bailee customers insur ance for the full replacement cost of such property;
(e) Business Insurance. Business insurance in an amount not less than the annual Base Rent and Additional Rent payable by Tenant hereunder for the then current calendar year, and
(f) Additional Insurance. Any such other insurance as Landlord or Landlords lender may reasonably require.
6.3. General.
(a) Insurance Companies. Insurance required to be maintained by Tenant shall be written by companies licensed to do business in California and having a General Policyholders Rating of at least A:X or better (or such higher rating as may be required by a lender having a lien on the Lot) as set forth in the most current issue of Bests Insurance Guide or Bests Key Rating Guide.
(b) Increased Coverage. Landlord, upon written notice to Tenant, may require Tenant to increase the amount of any insurance coverage maintained by Tenant under this Section 6 to the amount of insurance coverage that landlords of similar buildings located in Menlo Park and Palo Alto customarily require tenants to maintain.
(c) Certificates of Insurance. Tenant shall deliver to Landlord certificates of insurance with the additional insured endorsement and the primary insurance endorsement(s) attached for all insurance required to be maintained by Tenant, no later than seven (7) days prior to the Commencement Date or such earlier date that Tenant takes possession of the Premises. Tenant shall, at least thirty (30) days prior to expiration of the policy, furnish Landlord with certificates of renewal or binders thereof. Each certificate shall expressly provide that such policies shall not be cancelable or otherwise subject to modification except after thirty (30) days prior written notice to the parties named as additional insureds in this Lease. If Tenant fails to maintain any insurance required in this Lease, Tenant shall be liable for all losses and cost resulting from said failure.
(d) Additional Insureds. Landlord, any property management company of Landlord for the Premises and any designated by Landlord shall be named as additional insurers under all of the policies required to be maintained by Tenant under this Section 6. The policies required to be maintained by Tenant under this Section 6 shall provide for severability of interest.
(e) Primary Coverage. All insurance to be maintained by Tenant shall be primary, without right of contribution from Landlords insurance. Any umbrella liability policy or excess liability policy (which shall be in following form) shall provide that if the underlying aggregate is exhausted, the excess coverage will drop down as primary insurance. The limits of insurance maintained by Tenant shall not limit Tenants liability under this Lease.
(f) Waiver of Subrogation. Landlord and Tenant waive any right to recover against the other for damages covered by insurance or which would have been covered by insurance had the applicable party maintained the insurance required to be maintained by that party under the terms of this Lease. This provision is intended to waive fully, and for the benefit of Landlord or Tenant, as applicable, any rights and/or claims which might give rise to a right of subrogation in favor of any insurance carrier. The coverages obtained by Landlord and Tenant pursuant to this Lease shall include, without limitation, waiver of subrogation endorsements.
6.4. Tenants Indemnity. Tenant shall indemnify, protect and defend by counsel reasonably satisfactory to Landlord and hold harmless Landlord and Landlord s officers, directors, shareholders, employees, partners, members, lenders and successors and assigns (collectively, the Indemnified Parties and each, an Indemnified Party) from and against any and all claims, demands, causes of action, judgments, losses, costs, liabilities, damages (including punitive and consequential damages) and expenses, including attorneys fees and costs (collectively, Claims) arising from any cause whatsoever in the Premises, including Claims caused in whole or in part by the act, omission or negligence of the Indemnified Party (but excluding Claims caused by an Indemnified Partys willful or criminal misconduct). In addition, Tenant shall further indemnify, protect and defend by counsel r easonably satisfactory to Landlord and hold harmless the Indemnified Parties from and against any and all Claims arising from (i) Tenants use or occupancy of the Premises, the conduct of Tenants business or any activity, work or things done, permitted or suffered by Tenant in or about the Premises, (ii) any breach or default in the performance of any obligation on Tenants part to be performed under the terms of this Lease, and/or (iii) any acts, omissions or negligence of Tenant or any of Tenants agents, contractors, employees or invitees. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property in, upon or about the Premises arising from any cause; and Tenant hereby waives all claims in respect thereof against Landlord. The provisions of this Section 6.4 shall survive the expiration or earlier termination of this Lease.
6.5. Exemption of Landlord from Liability. Neither Landlord nor any other Indemnified Party shall be liable to Tenant for any injury to Tenants business or loss of income therefrom, loss or damage to property, or injury or death to any persons, including any loss, damage or injury attributable in whole or in part to the act, omission or negligence of any Indemnified Party (but excluding any loss, damage or injury to the extent caused by the willful or criminal misconduct of such Indemnified Party, whether such loss, damage or injury is caused by fire, steam, electricity, gas, water or rain, or from the breakage, leakage or other defects of sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, and whether said loss, damage or injury results from conditions arising upon the Premises, or from other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to Tenant, As a material part of Landlords consideration in exchange for entering into this Lease, Tenant assumes all risk of such loss, damage and injury.
7. OPERATING EXPENSES
7.1. Operating Expenses. Tenant shall pay to Landlord, as Additional Rent during each year of the Term (prorated or any partial calendar year during the Term), (i) Tenants Building Percentage Share of all Operating Expenses attributable to the ownership, operation, repair and/or maintenance of the Building, (ii) Phase Percentage Share of all Operating Expenses attributable to the ownership, operation, repair and/or maintenance of the Phase and (iii) Tenants Project Percentage Share of all Operating Expenses attributable to the ownership, operation, repair and/or maintenance of the Project, each as determined by Landlord. Landlord shall not collect any Operating Expense from Tenant more than once.
7.2. Definition of Operating Expenses. The term Operating Expenses shall include all expenses and costs of every kind and nature which Landlord shall pay or become obligated to pay because of or in connection with the ownership, operation, repair and/or maintenance of the Building, Phase and/or Project, the surrounding property, and the supporting facilities, including, without limitation, (i) premiums for insurance maintained by Landlord pursuant to this Lease and all costs incidental thereto, (ii) wages, salaries and related expenses and benefits of all employees engaged in operation, maintenance and security of the Building, Phase and/or Project; (iii) costs for all supplies, materials and rental equipment used in the operation of the Building, Phase and/or Project; (iv) all maintenance, janitorial, security and service costs; (v) all management fees; (vi) legal and accounting expenses, including t he cost of audits; (vii) costs for repairs, replacements, uninsured damage or deductibles on property insurance, and general maintenance of the Building, Phase and Project, including service areas, elevators, mechanical rooms, exterior surfaces and all component parts thereof (but excluding any repairs or replacements paid for out of insurance proceeds or by other parties and alterations attributable solely to tenants of the Building other than Tenant); (viii) the cost of any capital improvements made to the Building, Phase or Project, amortized over such reasonable period as Landlord shall determine, together with interest upon the unamortized balance at the or such other higher rate as may have been paid by Landlord on funds borrowed for the purpose of constructing the capital improvements; (ix)all charges for heat, water, gas, electricity, sewer, air conditioning, emergency telephone service, trash removal and other utilities used or supplied to the Building, Phase and/or Project (and not separately meter ed and billed to individual tenants); and (x) all business license, permit and inspection fees.
7.3. Prorated Expenses. Any Operating Expenses attributable to a period which falls only partially within the Term shall be prorated between Landlord and Tenant so that Tenant shall pay only that proportion thereof attributable to the period that falls within the Term.
7.4. Payment at End of Term. Any amount payable by Tenant which would not otherwise be due until after the termination of this Lease, shall, if the exact amount is uncertain at the time that this Lease terminates, be paid by Tenant to Landlord upon such termination in an amount to be estimated by Landlord with an adjustment to be made once the exact amount is known.
7.5. Estimates of Tenants Share of Operating Expense. Prior to the commencement of each calendar year during the Term, or as soon thereafter as is reasonably practicable, Landlord shall notify Tenant in writing of Landlords estimate of the amount of Operating Expenses which will be payable by Tenant for the ensuing calendar year. On or before the first day of each month during the ensuing calendar year Tenant shall pay to Landlord, in advance, one-twelfth (1/12) of the estimated amount; provided however, if Landlord fails to notify Tenant of the estimated amount of Tenants share of Operating Expenses for the ensuing calendar year prior to the end of the current calendar year, Tenant shall be required to continue to pay to Landlord each month in advance Tenants estimated share of Operating Expenses on the basis of the amount due for the immediately prior month until ten (10) days after Landlord not ifies Tenant of the estimated amount of Tenants share of Operating Expenses for the ensuing calendar year. If at any time it appears to Landlord that Tenants share of Operating Expenses payable for the current calendar year will vary from Landlords estimate, Landlord may give notice to Tenant of Landlords revised estimate for the calendar year, and subsequent payments by Tenant for the calendar year shall be based on the revised estimate.
7.6. Annual Adjustment. Within one hundred twenty (120) days after the close of each calendar year during the Term, or as soon after the one hundred twenty (120) day period as practicable, Landlord shall deliver to Tenant a statement of the adjustment to the Operating Expenses for the prior calendar year. If, on the basis of the statement, Tenant owes an amount that is less than the estimated payments for the prior calendar year previously made by Tenant, Landlord shall apply the excess to the next payment of Operating Expenses due. If, on the basis of the statement, Tenant owes an amount that is more than the amount of estimated payments made by the Tenant for
the prior calendar year, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the statement. The year end statement shall be binding upon Tenant unless Tenant notifies Landlord in writing of any objection thereto within ninety (90) days after Tenants receipt of the year end statement. In addition, if, after the end of any calendar year or any annual adjustment of Operating Expenses for a calendar year, Operating Expenses are incurred or billed to Landlord that are attributable to any period within the Term (e.g., sewer district flow fees), Landlord shall notify Tenant of its share of such additional Operating Expenses and Tenant shall pay such amount to Landlord within ten (10) days after Landlords written request therefor.
7.7. Less Than Full Occupancy. In the event the Building, Phase or Project are not fully occupied during any year of the Term, an adjustment shall be made in computing Operating Expenses for such year so that the same shall be computed for such year as though the Building, Phase and Project had been fully occupied during such year.
7.8. Special Services.
(a) Utilities. In the event Landlord provides additional utilities, heating, air conditioning, trash removal and/or cleaning services to Tenant beyond such standard services related to the operation and management similar business office parks located in Menlo Park/Palo Alto areas, or at times other than during Business Hours (as defined in the Basic Lease Information), Tenant shall pay Landlords reasonable charge for such special services as Additional Rent. Any cleaning of lunchrooms, cafeterias, conference rooms, etc., shall be on a special services basis (except with respect to the removal of trash from trash receptacles or cleaning incidental to normal cleaning).
(b) Meters. Landlord shall have the right, at Tenants sole cost and expense, to install separate metering for electricity, water or gas to the Premises or to separately charge Tenant for any quantity of such utilities consumed by Tenant beyond the amounts customarily consumed by tenants in the Project as reasonably determined by Landlord. Landlord may also charge Tenant for costs of sanitary sewer or trash removal occasioned by Tenants excessive consumption of such services. All such charges shall be reasonably determined by Landlord and promptly paid by Tenant to Landlord as Additional Rent.
8. REPAIRS AND MAINTENANCE
8.1. Landlord Repairs and Maintenance. Landlord shall maintain those portions of the Building, Lot, Phase and Project that are owned by Landlord and not leased to tenants in the Project or required to be maintained by any tenants in the Project consistent with the standards applied by landlords of similar Class A business office parks located in the Menlo Park and Palo Alto areas.
8.2. Tenant Repairs and Maintenance. Tenant, at Tenants sole cost and expense, shall at all times during the Term keep, maintain and preserve the Premises and all parts, components, systems, fixtures, hardware and finishes of and in the Premises in a first class, clean, safe and sanitary order, condition and repair, excepting only insured casualty to the extent of the insurance proceeds received by Landlord. Tenant shall comply with all applicable manufacturers specifications and recommendations and best industry practices in connection with cleaning, protecting, servicing, maintaining and repairing the Premises and all of the parts, components, systems, fixtures, hardware and finishes in the Premises in order to preserve and achieve the maximum aesthetic and economically serviceable life of the Premises and the improvements contained therein. All repairs, replacements and restorations made by Tenant shall be performed promptly as required, in a good and workmanlike manner, employing materials of equal or better quality, serviceability and utility to those items or parts being replaced, with surface finishes (including color, texture and general appearance) comparable and compatible with adjacent surfaces, to the reasonable satisfaction of Landlord and in compliance with all applicable federal, state or local laws, ordinances, regulations and orders and the requirements of any insurer of the Building. Tenant shall, at Tenants own expense, immediately replace all glass in the Premises that may be broken during the Term with glass at least equal to the specification and quality of the glass being replaced. Upon expiration of the Term, Tenant shall surrender the Premises to Landlord in the same condition as received, reasonable wear and tear, damage by fire or other insured casualty to the extent of insurance proceeds received by Landlord excepted. The term reasonable wear and tear as used herein shall mean wear and tear which manifests itself solely through normal intensity of use and passage of time consistent with the employment of commercially prudent measures to protect finishes and components from damage and excessive wear, the application of regular and appropriate preventative maintenance practices and procedures, routine cleaning and servicing, waxing, polishing, adjusting, repair, refurbishment and replacement at a standard of appearance and utility and as often as appropriate for Class A corporate and professional office occupancies in the Palo Alto/Menlo Park office market. The term reasonable wear and tear
would thus encompass the natural fading of painted surfaces, fabric and materials over time, and carpet wear caused by normal foot traffic. The term reasonable wear and tear shall not include any damage or deterioration that could have been prevented by Tenants employment of ordinary prudence, care and diligence in the occupancy and use of the Premises and the performance of all of its obligations under this Lease. Items not considered reasonable wear and tear hereunder include the following for which Tenant shall bear the obligation for repair and restoration (except to the extent caused by the gross negligence or willful misconduct of Landlord or its employees or agents), (i) excessively soiled, stained, worn or marked surfaces or finishes; (ii) damage, including holes in building surfaces (e.g., cabinets, doors, walls, ceilings and floors) caused by the installation or removal of Tenants trade fixtures, furnishings, decorations, equipment, alterations, utility inst a llations, security systems, communications systems (including cabling, wiring and conduits), displays and signs; (iii) damage to any component, fixture, hardware, system or component part thereof within the Premises, and any such damage to the Building, Phase or Project, caused by Tenant or its agents, contractors or employees, and not fully recovered by Landlord from insurance proceeds. Tenant shall not commit or allow any waste or damage to be committed on any portion of the Premises, Building, Phase or Project.
8.3. Failure to Maintain, Repair or Restore. The timely performance by Tenant of Tenants duties to maintain, repair and restore the Premises is essential to the preservation of Landlords property value and the security interests of Landlords mortgagee. If, upon expiration of the Term, Tenant has failed to fully perform its obligations under this Section 8 or Sections 9 or 11.2, Landlord shall have the right, but not the obligation, to perform any obligation of Tenant (notice to Tenant) as provided in Section 19.16 hereof, and Tenant shall reimburse Landlord for all costs incurred by Landlord related thereto (including overtime or premium time labor charges as determined by Landlord in its sole discretion). Tenant shall pay to Landlord all costs, fees and penalties owing, due, paid or payable by Landlord to any lender or mortgagee as a result of Tenants failure to perform its obligations under this Section 8 or Sections 9 or 11.2, and any fees, penalties, loss, costs, expenses or liabilities whether paid or accrued by Landlord as a result of Landlords failure to timely deliver all or a portion of the Premises for occupancy by one or more successor or replacement tenants to the extent such failure is due to Tenants failure to perform hereunder. In addition, if Tenant fails to fully perform its obligations pursuant to this Section 13 or Sections 9 or 11.2 by the end of the Term, then for each day required by Landlord to perform such obligations (or each day that would reasonably be required by Landlord to perform such obligations if Landlord elected to do so), Tenant shall pay to Landlord as liquidated damages an amount equal to one thirtieth (1/30th) of the product of (i) the Default Percentage (as stated in the Basic Lease Information) and (ii) the monthly Rent due under this Lease during the last month of the Term (hereinafter referred to as the Liquidated Damages Amount). The Liquidated Damages Amount is intended to compensated Landlord for any loss of rent incurred by Landlord during the period of time required by Landlord to perform Tenants unperformed obligations under this Section 8 and Sections 9 and 11.2 (or that would reasonably be required by Landlord to perform such obligations had Landlord elected to do so). Landlord and Tenant agree that Landlords actual damages for loss of rents or opportunity as a result of Tenants failure to complete its obligations pursuant to this Section 8 and Sections 9 and 11.2 would be difficult or impossible to determine because, inter alia, where a tenant has failed to perform such obligations, it is difficult for a landlord effectively to market that tenants premises to prospective tenants, and the Liquidated Damages Amount is the best estimate of the amount of damages Landlord would suffer in the nature of loss of rent or opportunity for any such failure by Tenant. Nothing contained in this paragraph shall l imit Landlords other remedies pursuant to this Lease or by law with respect to losses other than loss of rent or opportunity, or waive or affect any of Tenants indemnity obligations under this Lease and Landlords rights to enforce those indemnity obligations. The payment of the Liquidated Damages Amount as liquidated damages is not intended as a forfeiture or penalty within the meaning of California Civil Code Section 3275 or 3369, but is intended to constitute liquidated damages to Landlord pursuant to California Civil Code Section 1671.
8.4. Inspection of Premises. Landlord and Landlords agents, at all reasonable times, may enter the Premises to perform any construction related to the Premises, Building or Phase, to inspect, clean or repair the same, to inspect the performance by Tenant of the terms and conditions contained in this Lease, to affix reasonable signs and displays, to show the Premises to prospective purchasers, tenants and lenders, to post notices of non-responsibility and similar notices, and for all other purposes as Landlord shall reasonably deem necessary.
8.5. Liens. Tenant shall promptly pay and discharge all claims for work or labor done, supplies furnished or services rendered on behalf of Tenant and shall keep the Premises, Building, Phase and Project free and clear of all mechanics and materialmens liens in connection therewith. Landlord shall have the right to post or keep posted on the Premises, or in the immediate vicinity thereof, any notices of nonresponsibility for any construction, alteration or repair of the Premises by Tenant. If any such lien is filed, Landlord may, but shall not be required to,
take such action or pay such amount as may be necessary to remove such lien; and, Tenant shall pay to Landlord as Additional Rent any such amounts expended by Landlord within five (5) days after Tenant receives Landlords written request for payment.
9. FIXTURES, PERSONAL PROPERTY AND ALTERATIONS
9.1. Fixtures and Personal Property. Tenant, at Tenants sole cost and expense, may install any necessary trade fixtures, equipment and furniture in the Premises, provided that such items are installed and are removable without affecting the structural integrity, character or utility of the Building. Landlord reserves the right to approve or disapprove of any curtains, draperies, shades, paint or other interior improvements that are visible from outside the Premises on wholly aesthetic grounds. Such improvements or replacement items must be submitted for Landlords written approval prior to installation, or Landlord may remove or replace such items at Tenants sole cost and expense. The trade fixtures, equipment and furniture shall remain Tenants property and shall be removed by Tenant prior to the expiration of this Lease. If Tenant fails to remove Tenants trade fixtures, equipment and furnitu re prior to the termination of this Lease, Landlord may keep and use the foregoing items or remove and dispose any or all of those items at Tenants expense, and cause Tenants trade fixtures, equipment and furniture to be stored or sold in accordance with applicable law. Prior to expiration of the Term or earlier termination of this Lease, Tenant shall repair, at Tenants sole cost and expense, all damage caused to the Building or Premises as a result of the installation, operation, use or removal of Tenants trade fixtures, equipment, furniture, or unauthorized improvements and replacements, and restore the Building and the Premises to their condition at the commencement of the Term.
9.2. Alterations. Tenant shall deliver to Landlord full and complete plans and specifications of all such alterations, additions or improvements, and no such work shall be commenced by Tenant until Landlord has given its written approval thereof. Landlord does not expressly or implicitly covenant or warrant that any plans or specifications submitted by Tenant are safe or that the same comply with any applicable laws, ordinances, etc. Further, Tenant shall indemnify and hold harmless Landlord from any loss, cost or expense, including attorneys fees and costs, incurred by Landlord as a result of any defects in design, materials or workmanship resulting from Tenants alterations, additions or improvements to the Premises. All other alterations, additions and improvements shall remain the property of Tenant until termination of this Lease, at which time they shall be and become the property of Landlord. All altera tions, additions, improvements, repairs and restoration by Tenant hereinafter required or permitted shall be done in a good and workmanlike manner, incorporating materials of quality equal to or better than those replaced, with finishes comparable to and compatible with adjacent finishes within the Premises and the Building and in compliance with all applicable laws, ordinances, bylaws, regulations and orders of any federal, state, county, municipal or other public authority and of the insurers of the Building. In addition, all of Tenants alterations, additions and improvements shall be constructed in such a manner so as to (i) not unreasonably disturb or otherwise interfere with the use and occupancy of any other tenant of the Building, Phase or Project, (ii) protect by appropriate means and measures all components of the Premises, Building, Phase and Project from soiling or damage associated with Tenants work, and (iii) not impose any additional expense or delay upon Landlord in the constructio n of improvements to, or maintenance or operation of, the Building, Phase and/or Project. Tenant shall, reimburse Landlord for reviewing and approving or disapproving plans and specifications for any alterations proposed by Tenant. Tenant shall require that any contractors used by Tenant carry a commercial liability insurance policy covering bodily injury in the amounts of Two Million Dollars ($2,000,000.00) per person and Two Million Dollars ($2,000,000.00) per occurrence, and covering property damage in the amount of Two Million Dollars ($2,000,000.00). Landlord may increase the amount of insurance coverage required pursuant to this Section to reflect inflation, industry cost and recovery experience over time. Landlord may require proof of such insurance prior to commencement of any work on the Premises.
10. USE AND COMPLIANCE WITH LAWS
10.1. General Use and Compliance with Laws. Tenant shall only use the Premises for the Permitted Use (as set forth in the Basic Lease Information) and for no other use whatsoever without the prior written consent of Landlord. Tenant, at Tenants sole cost and expense, shall comply with all of the requirements of any recorded covenants, conditions and restrictions, and any requirements of municipal, county, state, federal and other applicable governmental authorities, now in force, or which may hereafter be in force, pertaining to the Premises, Building, Phase, and/or Project, including any occupancy permit for the Premises, and secure any necessary permits therefor. Tenant, in Tenants use and occupancy of the Premises, shall not subject the Premises to any use which would tend
to damage any portion thereof, nor overload the common facilities of the Building, Phase or Project to the detriment of other tenants enjoyment thereof.
10.2. Signs. Tenant shall not install any sign in or on the Premises, Building, Phase or Project without the prior written consent of Landlord, which consent may be withheld in Landlords sole and absolute discretion. Any sign placed by or erected by Landlord for the benefit of Tenant in or on the Premises, Building, Phase or Project shall be installed at Tenants sole cost and expense and, except in the interior of the Premises, shall contain only Tenants name, or the name of any affiliate of Tenant actually occupying the Premises, and no advertising matter. No such sign shall be erected until Tenant has obtained Landlords prior written approval of the location, material, size, design and content thereof and all necessary governmental and other permit and approvals therefor. Landlord shall have the right, in Landlords sole and absolute discretion, to object to any sign proposed by Tenant. Ten ant shall remove all of Tenants signs prior to the expiration of the Term or earlier termination of this Lease and shall return the Premises, Building, Phase and Project to their condition existing immediately prior to the placement or erection of said sign or signs. If Tenant places or installs any monument or exterior signs in or on the Building, Phase and/or Project, and at any time thereafter Tenant less than fifty percent (50%) of the original Rentable Area of the Premises (as a result of Tenant having assigned its interest in this Lease, Tenant shall immediately remove all such signs and restore the area of the Building, Phase and/or Project where Tenants signs were previously located to their condition prior to Tenants installation or placement of such signs.
10.3. Parking Access. In addition to the general obligation of Tenant to comply with laws and without limitation thereof, Landlord shall not be liable to Tenant nor shall this Lease be affected if any parking privileges appurtenant to the Premises are impaired by reason of any moratorium, initiative, referendum, statute, regulation or other governmental decree or action which could in any manner prevent or limit the parking rights of Tenant hereunder. Any governmental charges or surcharges or other monetary obligations imposed relative to parking rights with respect to the Premises, Building, Phase or Project shall be considered as Impositions and shall be payable by Tenant under the provisions of Section 5. Tenant is allocated the use of a percentage of the parking spaces contained in the Phase on a non-exclusive basis as provided in the Basic Lease Information. Tenant shall not permit any on street parking, unauthorize d parking upon private property, or parking in excess of Tenants allocation by Tenants employees, agents or invitees.
10.4. Floor Load. Tenant shall not place a load upon any floor of the Premises which exceeds the load per square foot which such floor is designed to carry.
11. HAZARDOUS MATERIALS.
11.1. Definitions.
(a) Hazardous Materials. The term Hazardous Materials shall mean any substance that: (A) now or in the future is regulated or governed by, requires investigation or remediation under, or is defined as a hazardous waste, hazardous substance, pollutant or contaminant under any governmental statute, code, ordinance, regulation, rule or order, and any amendment thereto, including the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. § 9601 et seq., and the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., or (B) is toxic, explosive, corrosive, flammable, radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline, diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs), asbestos, radon and urea formaldehyde foam insulation.
(b) Environmental Requirements. The term Environmental Requirements shall mean all present and future federal, state and local laws, ordinances, orders, permits, licenses, approvals, authorizations and other requirements of any kind applicable to Hazardous Materials.
(c) Environmental Losses. The term Environmental Losses shall mean all costs and expenses, damages, including foreseeable and unforeseeable consequential damages, fines and penalties incurred in connection with any violation of and compliance with Environmental Requirements, and all losses of any kind attributable to the diminution of value, loss of use or adverse effect on the marketability or use of any portion of the Premises, Building, Phase or Project.
11.2. Tenants Covenants. Tenant shall not use, install, handle, generate, store, dispose, discharge, release, abate or transport any Hazardous Materials on or about the Premises, Building, Phase or Project without Landlords prior written consent, which consent may be granted, denied or conditioned upon compliance with
Landlords requirements, all in Landlords sole and absolute discretion. Notwithstanding the foregoing, Tenant may use and store at the Premises normal quantities of those Hazardous Materials customarily used in the conduct of general office activities, such as copier fluids and cleaning supplies (Permitted Hazardous Materials) without Landlords prior written consent, provided that Tenants use, storage and disposal of all Hazardous Materials shall at all times comply with all Environmental Requirements. At the expiration or termination of this Lease, Tenant shall promptly remove from the Premises, Building, Phase and Project all Hazardous Materials used, installed, handled, generated, stored, disposed, discharged, released, abated or transported by Tenant on or under the Premises, Building, Phase or Project. Tenant shall keep Landlord fully and promptly informed of Tenants use, installation, handling, generation, storage, disposal, discharge, release, a batement or transportation of any Hazardous Materials other than Permitted Hazardous Materials. Tenant shall be responsible and liable for compliance with all of the provisions of this Section 11 by Tenants agents, employees, contractors, licensees, assignees, sublessees, transferees, representatives, guests, customers, invitees and visitors, and all of Tenants obligations under this Section 11 (including its indemnification obligations under Section 11.5 below) shall survive the expiration or termination of this Lease.
11.3. Compliance. Tenant shall, at Tenants sole cost and expense, promptly take all actions required by any governmental agency or entity in connection with or as a result of Tenants use, installation, handling, generation, storage, disposal, discharge, release, abatement or transportation of any Hazardous Materials on or about the Premises, Building, Phase or Project, including inspecting and testing, performing all cleanup, removal and remediation work required with respect to those Hazardous Materials, complying with all closure requirements and post-closure monitoring, and filing all required reports or plans. All of the foregoing work shall be performed in a good, safe and workmanlike manner by consultants qualified and licensed to undertake such work and in a manner that will not unreasonably interfere with any other tenants quiet enjoyment of the Building, Phase and/or Project or Landlords use, operation, leasing and sale of the Project or any portion thereof. Tenant shall deliver to Landlord, prior to delivery to any governmental agency, or promptly after receipt from any governmental agency, copies of all permits, manifests, closure or remedial action plans, notices and all other documents relating to Tenants use, installation, handling, generation, storage, disposal, discharge, release, abatement or transport of any of Hazardous Materials on or about the Premises, Building, Phase or Project. If any lien attaches to the Premises, Building, Phase or Project in connection with or as a result of Tenants use, installation, handling, generation, storage, disposal, discharge, release, abatement or transport of any Hazardous Materials, and Tenant does not cause the same to be released, by payment, bonding or otherwise, within ten (10) days after the attachment thereof, Landlord shall have the right, but not the obligation, to cause the lien to be released and any sums expended by Landlo rd in connection therewith shall be payable by Tenant on demand.
11.4. Landlords Rights. Landlord shall have the right, but not the obligation, to enter the Premises upon forty-eight (48) hours, prior written notice to Tenant, except in instances in which Landlord, in its reasonable discretion, deems an emergency or a breach by Tenant of the terms and conditions of this Section 11 to exist in which no prior notice shall be required, (i) to confirm Tenants compliance with the provisions of this Section 11, and (ii) to perform Tenants obligations under this Section 11 if Tenant has failed to do so or commence to do so within five (5) days after written notice to Tenant. Landlord shall also have the right to engage qualified Hazardous Materials consultants to inspect the Premises, Building, Phase and/or Project and review Tenants use, installation, handling, generation, storage, disposal, discharge, release, abatement or transport of any Hazardous Materials, inclu ding review of all permits, reports, plans and other documents, the costs of which shall be reimbursed by Tenant to Landlord on demand. Tenant shall pay to Landlord on demand the all costs incurred by Landlord in performing Tenants obligations under this Section 11. Landlord shall not be responsible for any interference caused by Landlords entry on the Premises.
11.5. Tenants Indemnification. Tenant agrees to indemnify, protect and defend with counsel acceptable to Landlord and hold harmless Landlord, its partners or members, and its or their partners, members, directors, officers, shareholders, employees and agents from all Environmental Losses and all other claims, actions, losses, damages, liabilities, costs and expenses of every kind, including attorneys, experts and consultants fees and costs, that are incurred at any time and arising from or in connection with Tenants use, installation, handling, generation, storage, disposal, discharge, release, abatement or transport of any Hazardous Materials at or about the Premises, Building, Phase and Project, or Tenants failure to comply in full with all Environmental Requirements with respect to the Premises, Building, Phase and Project.
12. DAMAGE AND DESTRUCTION
12.1. Obligation to Rebuild.
12.2. Right to Terminate. Landlord shall have the option to terminate this Lease if the Premises or the Building is destroyed or damaged by fire or other casualty, regardless of whether the casualty is insured against under this Lease, if Landlord reasonably determines that (i) there are insufficient insurance proceeds to pay all of the costs of the repair or restoration or (ii) the repair or restoration of the cannot be completed within days after the date of the casualty. If Landlord elects to exercise the right to terminate this Lease as a result of a casualty, Landlord shall exercise the right by giving Tenant written notice of its election to terminate this Lease within forty-five (45) days after the date of the casualty, in which event this Lease shall terminate fifteen ( 15) days after the date of the notice.
12.3. Limited Obligation to Repair. Landlords obligation, should Landlord elect or be obligated to repair or rebuild, shall be limited to the shell of the Building and any tenant improvements owned by Landlord. Tenant, at its sole cost and expense, shall replace or fully repair all trade fixtures and equipment owned by Tenant in the Premises and all improvements, additions and alterations constructed by or at the request of Tenant in the Premises (other than any tenant improvements owned by Landlord) and existing at the time of the damage or destruction.
12.4. Abatement of Rent. In the event of any damage or destruction to the Premises that is not caused by Tenants negligence or the negligence of Tenants agents, employees or invitees, the Base Rent shall be temporarily abated proportionately to the degree the Premises are rendered untenantable as a result of the damage or destruction, but only to the extent of any proceeds received by Landlord from rental abatement insurance. Such abatement shall commence on the date of the damage or destruction and continue through the period required by Landlord to substantially complete the repair and restoration of the Premises or until such time as the Premises are tenantable for the operation of Tenants business, whichever is earlier. Except for the rent abatement provided above, Tenant shall not be entitled to any compensation or damages from Landlord for loss of the use of the Premises, damage to Tenants p ersonal property or any inconvenience occasioned by any damage, repair or restoration.
12.5. Damage Near End of Term and Extensive Damage. In addition to right to terminate this Lease under Section 12.2, shall have the right to terminate this Lease upon thirty (30) days prior written notice to if the Premises or Building is substantially destroyed or damaged during the last twelve (12) months of the Term. in writing of its election to terminate this Lease under this Section 12.5, if at all, within forty-five (45) days after Landlord determines that the Premises or Building has been substantially destroyed. If to terminate this Lease, the repair of the Premises or Building shall be governed by Sections 12.1 and 12. 3.
12.6. Insurance Proceeds. If this Lease is terminated, Landlord may keep all the insurance proceeds resulting from the damage, except for those proceeds that specifically insured Tenants personal property and trade fixtures (if any).
12.7. Waiver. With respect to any destruction which Landlord is obligated to repair or elects to repair under the terms of this Section 12, Tenant waives all of its rights to terminate this Lease pursuant to rights presently or hereafter accorded by law to tenants, including the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4, of the California Civil Code.
13. EMINENT DOMAIN
13.1. Total Consideration. If the whole of the Premises is acquired or condemned by eminent domain, inversely condemned or sold in lieu of condemnation, for any public or quasi-public use or purpose (Condemned), then this Lease shall terminate as of the date of title vesting in such proceeding, and Rent shall be adjusted as of the date of such termination. Tenant shall immediately notify Landlord of any such occurrence.
13.2. Partial Condemnation. If any portion of the Premises is Condemned, and such partial condemnation renders the Premises unusable for the business of Tenant, as reasonably determined by Landlord, or if a substantial portion of the Building is Condemned, as reasonably determined by Landlord, then this Lease shall terminate as of the date of title vesting in such proceeding and Rent shall be adjusted as of the date of termination. If such condemnation is not sufficiently extensive to render the Premises unusable for the business of Tenant, as reasonably determined by, then Landlord shall promptly restore the Premises to a condition comparable to its
condition immediately prior to such condemnation less the portion thereof lost in such condemnation, and this Lease shall continue in full force and effect, except that after the date of title vesting the Base Rent shall be proportionately reduced as reasonably determined by Landlord. Notwithstanding the foregoing, in restoring the Premises to their original condition, Landlord shall not be required to expend an amount greater than the product of (i) Tenants Building Percentage Share and (ii) the total amount of any condemnation proceeds for the Building received by Landlord. If any parking areas are Condemned, Landlord has the option, but not the obligation, to supply Tenant with other parking areas.
13.3. Landlords Award. If the Premises are wholly or partially Condemned, then, subject to the provision of Section 13.4 below, Landlord shall be entitled to the entire award paid in connection with such condemnation, and Tenant waives any right or claim to any part thereof from Landlord or the condemning authority.
13.4. Tenants Award. Tenant shall have the right to claim and recover from the condemning authority, but not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenants own right on account of any and all costs which Tenant might incur in moving Tenants merchandise, furniture, fixtures, leasehold improvements and equipment to a new location.
13.5. Temporary Condemnation. If the whole or any part of the Premises shall be Condemned for any temporary public or quasi-public use or purpose, this Lease shall remain in effect and Tenant shall be entitled to receive for itself such portion or portions of any award made for such use with respect to the period of the taking which is within the Term. If a temporary condemnation remains in force at the expiration or earlier termination of this Lease, Tenant shall pay to Landlord an amount equal to the reasonable cost of performing any obligations required of Tenant by this Lease with respect to the surrender of the Premises, including, without limitation, repairs and maintenance, and upon such payment Tenant shall be excused from any such obligations. If a temporary condemnation is for an established period which extends beyond the Term and such temporary condemnation renders the Premises unusable for the business of Tenant, as reasonably determined by this Lease shall terminate as of the date of occupancy by the condemning authority, and the damages shall be as provided in Sections 13.3 and 13.4 and Rent shall be adjusted as of the date of occupancy.
13.6. Notice and Execution. Landlord shall notify Tenant in writing immediately upon service of process in connection with any condemnation or potential condemnation. Tenant shall immediately execute and deliver to Landlord all instruments that may be required to effectuate the provisions of this Section 13.
14. DEFAULT
14.1. Events of Default. The occurrence of any of the following events shall constitute an Event of Default on the part of Tenant with or without notice from Landlord:
(a) Abandonment. Tenants abandonment of the Premises;
(b) Payment. Tenants failure to pay any installment of Base Rent, Additional Rent or other sums due and payable hereunder by the date such payment is due;
(c) Performance. Tenants failure to perform any of Tenants covenants, agreements or obligations under this Lease (other than a failure to pay Rent or other sums), which default has not been cured within thirty (30) days after written notice thereof from Landlord;
(d) Assignment. A general assignment by Tenant for the benefit of its creditors;
(e) Bankruptcy. The commencement of a case or proceeding by Tenant or any of Tenants creditors seeking the rehabilitation, liquidation or reorganization of Tenant under any law relating to bankruptcy, insolvency or other relief of debtors;
(f) Receivership. The appointment of a receiver or other custodian to take possession of all or substantially all of Tenants assets or this leasehold;
(g) Insolvency, Dissolution, Etc. Tenant shall become insolvent or unable to pay its debts, or shall fail generally to pay its debts as they become due; or any court shall enter a decree or order directing the winding up or liquidation of Tenant or of all or substantially all of its assets; or Tenant shall take any action toward the dissolution or winding up of its affairs or the cessation or suspension of its use of the Premises;
(h) Attachment. The attachment, execution or other judicial seizure of all or substantially all of Tenants assets or this leasehold;
(i) Failure to Comply. Tenants failure to comply with the provisions contained in Sections 16.1 and 16.3; and
An Event of Default shall constitute a default by Tenant under this Lease. In addition, any notice required to be given by Landlord under this Lease shall be in lieu of, and not in addition to, any notice required under Section 1161 of the California Civil Code of Procedure. Tenant shall pay to Landlord the amount of Two Hundred Fifty Dollars ($250.00) for each notice of default given to Tenant under this Lease, which amount is the amount the parties reasonably estimate will compensate Landlord for the cost of giving such notice of default.
14.2. Landlords Remedies. Upon an Event of Default, Landlord shall have the following remedies, in addition to all other rights and remedies provided by law, equity, statute or otherwise provided in this Lease, to which Landlord may resort cumulatively or in the alternative:
(a) Continue Lease. Landlord may continue this Lease in full force and effect, and this Lease shall continue in full force and effect so long as Landlord does not terminate Tenants right to possession, and Landlord shall have the right to collect Rent when due. In such event, Landlord shall have the remedy described in California Civil Code Section 1951.4 (Landlord may continue this Lease in effect after Tenants breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations), or any successor statute.
(b) Terminate Lease. Landlord may terminate Tenants right to possession of the Premises at any time by giving written notice to that effect. Upon termination of this Lease, Landlord shall have the right, at Tenants sole cost and expense, to remove all of Tenants personal property from the Premises and store Tenants personal property on Tenants behalf. Landlord shall have the right to recover from Tenant: (1) the worth at the time of award of unpaid Rent and other sums due and payable which had been earned at the time of termination; plus (2) the worth at the time of award of the amount by which the unpaid Rent and other sums due and payable which would have been payable after termination until the time of award exceeds the amount of the Rent loss that Tenant proves could have been reasonably avoided; plus (3) the worth at the time of award of the amount by which the unpaid Rent and other sums due and payable for the balance of the Term after the time of award exceeds the amount of the Rent loss that Tenant proves could be reasonably avoided; plus (4) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenants failure to perform Tenants obligations under this Lease, or which, in the ordinary course of things, would be likely to result therefrom.
(c) Definition. The worth at the time of award of the amounts referred to in Subsections 14.2(b)(1), (2) and (3) is defined in California Civil Code Section 1951.2.
(e) Cumulative. Each right and remedy of Landlord provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. The exercise or beginning of the exercise by Landlord of any one or more of the rights or remedies provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise, shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise.
(f) No Waiver. Landlords failure to insist upon the strict performance of any term hereof or to exercise any right or remedy upon a default by Tenant under this Lease shall not constitute a waiver of any such term or default. In addition, Landlords acceptance of Rent shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent accepted, regardless of Landlords knowledge of such preceding breach at the time Landlord accepts such Rent. Efforts by Landlord to mitigate the damages caused by Tenants breach of this Lease shall not be construed to be a waiver of Landlords right to recover damages under this Section 14. Nothing in this Section 14 affects the right of Landlord to indemnification by Tenant in accordance with the terms of this Lease for any liability arising prior to the termination of this Lease for personal injuries or property damage.
15. ASSIGNMENT AND SUBLETTING
15.1. Assignment and Subletting; Prohibition. Tenant shall not assign, mortgage, pledge or otherwise transfer this Lease, in whole or in part (each hereinafter referred to as an assignment), nor sublet or permit
occupancy by any party other than Tenant of all or any part of the Premises (each hereinafter referred to as a sublet or subletting), without the prior written consent of Landlord in each instance, which consent shall not be unreasonably withheld. No assignment or subletting by Tenant shall relieve Tenant of any obligation under this Lease, including Tenants obligation to pay Base Rent and Additional Rent hereunder. Any purported assignment or subletting contrary to the provisions of this Lease without Landlords prior written consent shall be void. The consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity for obtaining Landlords consent to any subsequent assignment or subletting. Landlord may consent to any subsequent assignment or subletting, or any amendment to or modification of this Lease with the assignees of Tenant, without notifying Tenant or any successor of Tenant, and without obtaining its or thei r consent thereto, and such action shall not relieve Tenant or any successor of Tenant of any liability under this Lease. As Additional Rent hereunder, Tenant shall reimburse Landlord for all reasonable legal fees and other expenses incurred by Landlord in connection with any request by Tenant for consent to an assignment or subletting.
15.2. Information to be Furnished. If Tenant desires at any time to assign its interest in this Lease or sublet the Premises, Tenant shall first notify Landlord of its desire to do so and shall submit in writing to Landlord: (i) the name of the proposed assignee or subtenant; (ii) the nature of the proposed assignees or subtenants business to be conducted in the Premises; (iii) the terms and provisions of the proposed assignment or sublease, including the date upon which the assignment shall be effective or the commencement date of the sublease (hereinafter referred to as the Transfer Effective Date) and a copy of the proposed form of assignment or sublease; and (iv) such financial information, including financial statements, and other information as Landlord may reasonably request concerning the proposed assignee or subtenant.
15.3. Landlords Election. At any time within days after Landlords receipt of the information specified in Section 15.2, Landlord may, by written notice to Tenant, elect to (i) terminate this Lease as to the space in the Premises that Tenant proposes to sublet; (ii) terminate this Lease as to entire Premises (available only if Tenant proposes to assign all of its interest in this Lease), (iii) consent to the proposed assignment or subletting by Tenant; or (iv) withhold its consent to the proposed assignment or subletting by Tenant.
15.4. Termination. If Landlord elects to terminate this Lease with respect to all or a portion of the Premises pursuant to Section 15.3(i) or (ii) above, this Lease shall terminate effective as of the Transfer Effective Date.
15.5. Withholding Consent. Without limiting other situations in which it may be reasonable for Landlord to withhold its consent to any proposed assignment or sublease, Landlord and Tenant agree that it shall be reasonable for Landlord to withhold its consent in any one (1) or more of the following situations: (1) in Landlords reasonable judgment, the proposed subtenant or assignee or the proposed use of the Premises would detract from the status of the Building as a first-class office building, generate vehicle or foot traffic, parking or occupancy density materially in excess of the amount customary for the Building or the Project or result in a materially greater use of the elevator, janitorial, security or other Building services (e.g., HVAC, trash disposal and sanitary sewer flows) than is customary for the Project; (2) in Landlords reasonable judgment, the creditworthiness of the proposed subtenant or as signee does not meet the credit standards applied by Landlord in considering other tenants for the lease of space in the Project on comparable terms, or Tenant has failed to provide Landlord with reasonable proof of the creditworthiness of the proposed subtenant or assignee; (4) the proposed assignee or subtenant is a governmental entity, agency or department or the United States Post Office; or (5) the proposed subtenant or assignee is a then existing or prospective tenant of the Project. If Landlord fails to elect either of the alternatives within the day period referenced in Section 15.3, it shall be deemed that Landlord has refused its consent to the proposed assignment or sublease.
15.6. Bonus Rental. If, in connection with any assignment or sublease, Tenant receives rent or other consideration, either initially or over the term of the assignment or sublease, in excess of the Rent called for hereunder, or in case of the sublease of a portion of the Premises, in excess of such Rent fairly allocable to such portion, Tenant shall pay to Landlord, as Additional Rent hereunder, fifty percent (50%) of the excess of each such payment of Rent or other consideration received by Tenant promptly after Tenants receipt of such Rent or other consideration. To the extent that a subtenant or assignee pays costs or expenses normally paid by a landlord in connection with a lease of commercial office property located in Menlo Park or Palo Alto, or a sublandlord in connection with a sublease of office space in Menlo Park or Palo Alto, or the subtenant purchases goods or services from sublandlord or an affiliate of sublandlord for an amount in excess of the fair market value for such goods or
services, such costs incurred or amounts expended shall be deemed to be other consideration for purposes of calculating excess Rent due to Landlord hereunder.
15.7. Scope. The prohibition against assigning or subletting contained in this Section 15 shall be construed to include a prohibition against any assignment or subletting by operation of law. If this Lease is assigned, or if the underlying beneficial interest of Tenant is transferred, or if the Premises or any part thereof is sublet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, subtenant or occupant and apply the net amount collected to the Rent due herein and apportion any excess rent so collected in accordance with the terms of Section 15.6, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of the provisions regarding assignment and subletting, or the acceptance of the assignee, subtenant or occupant as tenant, or a release of Tenant from the further performance, by Tenant of covenants on the part of Tenant herein contained. No assignment or su bletting shall affect the continuing primary liability of Tenant (which, following assignment, shall be joint and several with the assignee), and Tenant shall not be released from performing any of the terms, covenants and conditions of this Lease.
15.8. Executed Counterparts. No sublease or assignment shall be valid, nor shall any subtenant or assignee take possession of the Premises, until a fully executed counterpart of the sublease or assignment has been delivered to Landlord and Landlord, Tenant and the applicable assignee or subtenant have entered into a consent to assignment or sublease in a form acceptable to Landlord.
15.9. Transfer of a Majority Interest. If Tenant is a non-publicly traded corporation, the transfer (as a consequence of a single transaction or any number of separate transactions) of fifty percent (50%) or more or of a controlling interest or the beneficial ownership interest of the voting stock of Tenant issued and outstanding as of the Effective Date shall constitute an assignment hereunder for which Landlords prior written consent is required. If Tenant is a partnership, limited liability company, trust or an unincorporated association, the transfer of a controlling or majority interest therein shall constitute an assignment hereunder for which Landlords prior written consent is required.
15.10. Indemnity. If Landlord reasonably withholds its consent to any proposed assignment or sublease, Tenant shall indemnify, protect, defend and hold harmless Landlord against and from any and all loss, liability, damages, costs and expenses (including attorneys fees and disbursements) resulting from any claims that may be made against Landlord by the proposed assignee or sublessee or by any brokers or any persons claiming a commission or similar compensation in connection with the proposed assignment or sublease. Notwithstanding any contrary provision of law, including, without limitation, California Civil Code Section 1995.310, the provisions of which Tenant hereby waives, Tenant shall have no right to terminate this Lease, in the event Landlord is determined to have unreasonably withheld or delayed its consent to a proposed sublease or assignment.
15.11. Waiver. Notwithstanding any assignment or sublease, or any indulgences, waivers or extensions of time granted by Landlord to any assignee or sublessee, or failure by Landlord to take action against any assignee or sublessee, Tenant waives notice of any default of any assignee or sublessee and agrees that Landlord may, at its option, proceed against Tenant without having taken action against or joined such assignee or subleases, except that Tenant shall have the benefit of any indulgences, waivers and extensions of time granted to any such assignee or sublessee.
15.12. Release. Whenever Landlord conveys its interest in the Phase and/or Building, Landlord shall be automatically released from the further performance of covenants on the part of Landlord herein contained, and from any and all further liability, obligations, costs and expenses, demands, causes of action, claims or judgments arising from or growing out of, or connected with this Lease after the effective date of said release. The effective date of Tenants release shall be the date the assignee executes an assumption agreement pursuant to which the assignee expressly agrees to assume all of Landlords obligations, duties, responsibilities and liabilities with respect to this Lease. If requested, Tenant shall execute a form of release and such other documentation as may be required to further effect the provisions of this Section 15.
16. ESTOPPEL, ATTORNMENT AND SUBORDINATION
16.1. Estoppel. Within ten (10) days after Landlords written request, Tenant shall execute and deliver to Landlord, in recordable form, a certificate to Landlord and any existing or proposed mortgagee or purchaser certifying, among other things, (i) that this Lease is unmodified and in full force and effect or, if modified, stating the nature of the modification and certifying that this Lease, as so modified, is in full force and effect, (ii) the date to
which the Rent and other charges have been paid in advance, if any; (iii) that to Tenants knowledge, there are no uncured defaults on the part of Landlord or Tenant under this Lease, or if there are uncured defaults on the part of Landlord or Tenant, stating the nature of the uncured defaults; (iv) that Tenant has no right to purchase, option or right of first refusal to purchase all or any portion of the Building, Phase or Project; and (v) any other statement or provision reasonably requested by Landlord or any existing or proposed mortgagee or prospective purchaser. Any such certificate may be relied upon by Landlord and any mortgagee, beneficiary, ground or underlying lessor, purchaser or prospective purchaser or mortgagee of the Project, Phase and/or Building or any interest therein. Tenants failure to timely deliver said statement shall be conclusive upon Tenant that: (i) this Lease is in full force and effect, without modification except as may be represented by Landlord; (i i) there are no uncured defaults in Landlords performance and Tenant has no right of offset, counterclaim or deduction against Rent hereunder; (iii) Tenant has no right to purchase, option or right of first refusal to purchase all or any portion of the Building, Phase or Project, and (iv) no more than one months Base Rent has been paid in advance. In addition, Tenant hereby irrevocably appoints Landlord as its agent and attorney-in-fact to execute, acknowledge and deliver any such certificate in the name of and on behalf of Tenant if Tenant fails to execute, acknowledge and deliver any such certificate within ten (10) days after Landlords written request therefor.
16.2. Attornment. In the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under any mortgage or deed of trust made by Landlord or its successors or assigns that encumbers the Phase or the Building, or any part thereof, or in the event of a termination of any ground lease, if any, Tenant, if so requested, shall attorn to the purchaser upon such foreclosure or sale or upon any grant of a deed in lieu of foreclosure and recognize such purchaser as Landlord under this Lease.
16.3. Subordination. This Lease is subject and subordinate to all ground and underlying leases, mortgages and deeds of trust which now or may hereafter encumber the Phase, Building or Premises, and to all renewals, modifications, consolidations, replacements and extensions thereof. Within ten (10) days after Landlords written request therefor, Tenant shall execute any and all documents required by Landlord, the lessor under any ground or underlying lease (Lessor), or the holder or holders of any mortgage or deed of trust (Holder), in order to make this Lease subordinate to the lien of any lease, mortgage or deed of trust, as the case may be. In addition, if Lessor or Holder desires to make this Lease prior and superior to the ground lease, mortgage or deed of trust, then, within seven (7) days after Landlords written request, Tenant shall execute, have acknowledged and deliver to Landl ord any and all documents or instruments, in the form presented to Tenant, which Landlord, Lessor or Holder deems necessary or desirable to make this Lease prior and superior to the lease, mortgage or deed of trust.
17. NOTICES. All notices required to be given hereunder shall be in writing and given by United States registered or certified mail, postage prepaid, return receipt requested; personal delivery; electronic mail (e.g., facsimile); or any commercial overnight courier service (e.g., FedEx); and sent to the appropriate address indicated in the Basic Lease Information or at such other place or places as either Landlord or Tenant may, from time to time, respectively, designate in a written notice given to the other. Notices that are sent by electronic mail shall be deemed to have been given upon receipt. Notices which are mailed shall be deemed to have been given when seventy-two (72) hours have elapsed after the notice was deposited in the United States mail, registered or certified, postage prepaid, addressed to the party to be served. Notices that are sent by commercial overnight courier shall be deemed to have been given on the next business day after the notice was del ivered to the commercial overnight courier.
18. SUCCESSORS BOUND. This Lease and each of the covenants and conditions contained herein shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors, legal representatives and assigns, subject to the provisions hereof. Whenever in this Lease a reference is made to Landlord, such reference shall be deemed to refer to the person in whom the interest of Landlord shall be vested, and Landlord shall have no obligation hereunder as to any claim arising after the transfer of its interest in the Premises. Any successor or assignee of Tenant who accepts an assignment or the benefit of this Lease and enters into possession or enjoyment hereunder shall thereby assume and agree to perform and be bound by the covenants and conditions contained in this Lease. Nothing contained herein shall be deemed in any manner to give a right of assignment to Tenant without the written consent of Landlord.
19. MISCELLANEOUS
19.1. Waiver. No waiver of any default or breach of any covenant by either party hereunder shall be implied from any omission by either party to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and said
waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term or condition contained herein by either party shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by either party to or of any act by the other party shall not be deemed to waive or render unnecessary a partys consent or approval to or of any subsequent similar acts.
19.2. Easements. Landlord reserves the right to grant easements on the Phase and dedicate for public and private use portions thereof without Tenants consent; provided, however, that no such grant or dedication shall materially interfere with Tenants use of the Premises. From time to time, and upon Landlords demand, Tenant shall execute, acknowledge and deliver to Landlord, in accordance with Landlords instructions, any and all documents, instruments, maps or plats necessary to effectuate Tenants covenants hereunder.
19.4. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlords right to recover the balance of such Rent or pursue any other remedy provided in this Lease.
19.5. Limitation of Landlords Liability. The obligations of Landlord under this Lease do not constitute personal obligations of the individual partners, members, directors, officers or shareholders of Landlord, and Tenant shall look solely to the real estate that and to no other assets of Landlord for satisfaction of any liability in respect of this Lease and will not seek recourse against the individual partners, members, directors, officers or shareholders of Landlord or any of their personal assets for such satisfaction.
19.6. Time. Time is of the essence of every provision hereof.
19.7. Attorneys Fees. In any action or proceeding which Landlord or Tenant brings against the other party in order to enforce its respective rights hereunder or by reason of the other party failing to comply with all of its obligations hereunder, whether for declaratory or other relief, the unsuccessful party therein agrees to pay all costs incurred by the prevailing party therein, including reasonable attorneys fees, to be fixed by the court, and said costs and attorneys fees shall be made a part of the judgment in said action. A party shall be deemed to have prevailed in any action (without limiting the definition of prevailing party) if such action is dismissed upon the payment by the other party of the amounts allegedly due or the performance of obligations which were allegedly not performed, or if such party obtains substantially the relief sought by such party in the action, regardless or whether such action is prosecuted to judgment.
19.8. Captions and Section Numbers. The captions, section numbers and table of contents appearing in this Lease are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or intent or such sections or sections of this Lease nor in any way affect this Lease.
19.9. Severability. If any term, covenant, condition or provision of this Lease, or the application thereof to any person or circumstance, shall, to any extent, be held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, covenants, conditions or provisions of this Lease, or the application thereof to any person or circumstance, shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
19.10. Applicable Law. This Lease, and the rights and obligations of the parties hereto, shall be construed and enforced in accordance with the laws of the State of California.
19.11. Submission of Lease. The submission of this document for examination and negotiation does not constitute an offer to lease, or a reservation of or option for leasing the Premises. This document shall become effective and binding only upon execution and delivery hereof by Landlord and Tenant. No act or omission of any employee or agent of Landlord or of Landlords broker or agent shall alter, change or modify any of the provisions in this Lease.
19.12. Holding Over. Should Tenant, or any of its successors in interest, hold over in the Premises, or any part thereof, after the expiration of the Term unless otherwise agreed to in writing, such holding over shall constitute and be construed as tenancy from month-to-month only, at a monthly rent equal to the greater of (i) the Base Rent owed during the final year of the Term, as the same may have been extended, together with the Additional Rent due under this Lease, or (ii) fair market rent for the Premises, as reasonably determined by Landlord. The inclusion of the preceding sentence shall not be construed as Landlords permission for Tenant to
hold over. In addition, Tenant shall indemnify, protect, defend and hold harmless Landlord for all losses, expenses and damages, including any consequential damages incurred by Landlord, as a result of Tenant failing to surrender the Premises to Landlord and vacate the Premises by the end of the Term.
19.13. Rules and Regulations. At all times during the Term, Tenant shall comply with the rules and regulations for the Building, Phase and Project set forth in Exhibit D, attached hereto, and all amendments as Landlord may reasonably adopt.
19.14. No Nuisance. Tenant shall conduct its business and control its agents, employees, invitees and visitors in such a manner as not to create any nuisance, or interfere with, annoy or disturb any other tenant in the Building, Phase or Project, or Landlord in its operation of the Building, Phase and Project.
19.15. Broker. Tenant warrants that it has had no dealings with any real estate broker or agent other than the broker(s) referenced in the Basic Lease Information (Broker) in connection with the negotiation of this Lease, and that it knows of no other real estate broker or agent who is entitled to any commission or finders fee in connection with this Lease. Tenant agrees to indemnify, protect, defend and hold harmless Landlord from and against any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation, attorneys fees and costs) with respect to any leasing commission or equivalent compensation alleged to be owing on account of Tenants dealings with any real estate broker or agent other than Broker.
19.16. Landlords Right to Perform. Upon Tenants failure to perform any obligation of Tenant hereunder, including without limitation, payment of Tenants insurance premiums, charges of contractors who have supplied materials or labor to the Premises, etc., Landlord shall have the right to perform such obligation of Tenant on behalf of Tenant and/or to make payment on behalf of Tenant to such parties. Tenant shall reimburse Landlord for the reasonable cost of Landlords performing such obligation on Tenants behalf, including reimbursement of any amounts that may be expended by Landlord, plus interest at the Interest Rate.
19.17. Nonliability. Landlord shall not be in default hereunder or be liable for any damages directly or indirectly resulting from, nor shall the rental herein reserved be abated by reason of, (i) the interruption of use of the Premises as a result of the installation of any equipment in connection with the use, operation or maintenance of the Premises, Building, Phase and/or Project, (ii) any failure to furnish or delay in furnishing any services required to be provided by Landlord when such failure or delay is caused by accident or any condition beyond the reasonable control of Landlord or by the making of necessary repairs or improvements to the Premises, Building, Phase or Project, or (iii) the limitation, curtailment, rationing or restriction on use of water or electricity, gas or any other form of energy or any other service or utility whatsoever serving the Premises, Building, Phase or Project. Landlord shall use reasonable efforts to remedy any interruption in the furnishing of such services.
19.18. Financial Statements. Within ten (10) days after Landlords written request, Tenant shall deliver to Landlord Tenants most current quarterly and annual financial statements audited by Tenants certified public accountant or, if audited financial statements are not available, Tenant shall deliver to Landlord, Tenants financial statements certified to be true and correct by Tenants chief financial officer. Tenants annual financial statements shall not be dated more than twelve (12) months prior to the date of Landlords request.
19.19. Entire Agreement. This Lease sets forth all covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Premises, Building, Phase and Project, and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between Landlord and Tenant other than as are herein set forth. Except as otherwise provided in this Lease, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by Landlord and Tenant.
19.20. Addendum. The Addendum attached hereto is incorporated herein by reference. If no Addendum, state none in the following space: .
IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above-written.
| Tenant | |||
| /t | |||
| /tr>
MENLO OAKS PARTNERS L.P., Delaware limited partnership |
E*TRADE GROUP, INC. a Delaware corporation |
| /t | |||
| /tr>
By: AM Limited Partners, a California limited partnership, its General Partner |
| By: | /s/ Len Purkis | ||
| /t | |||
| /tr> | Name: Len Purkis Its: EVP & COO |
| /t | |||
| /tr>
By: Amarok Menlo, Inc., a California corporation, its General Partner |
| By: | /s/ Kathy Levinson | ||
| /t | |||
| /tr> | Name: Kathy Levinson Its: President & COO |
| By: | /s/ J. Marty Brill, Jr. | ||
| /t | |||
| /tr> | Name: J. Marty Brill, Jr. Its: President |
ADDENDUM TO MENLO OAKS CORPORATE CENTER LEASE(4200 Bohannon Drive)
THIS ADDENDUM TO MENLO OAKS CORPORATE CENTER LEASE (this Addendum) is entered into by and between Menlo Oaks Partners, L.P., a Delaware limited partnership (Landlord ), and E*TRADE GROUP, INC., a Delaware corporation (Tenant). This Addendum is made a part of that certain Menlo Oaks Corporate Center Lease (the Lease), entered into between Landlord and Tenant concurrently herewith, pursuant to which Landlord leases to Tenant that certain building commonly known as 4200 Bohannon Drive, located in Menlo Park, California. Capitalized terms used herein and not defined herein shall have the meanings set forth in the Lease.
Section 1.3:
On page 1, line 2, in place of the deleted language, insert the Basic Lease Information.
Section 2.3(d):
On page 2, line 2, after the word Project, insert ; provided, however, Landlord shall not designate any parking spaces in the area located between the Building and the 4500 Bohannon Building (defined herein) for the exclusive use of any tenant in the Project other than Tenant so long as Tenant occupies at least ninety percent (90%) of the rentable square feet in the Building and the 4500 Bohannon Building.
Section 2.3:
At the end of this Section, insert Landlord shall use commercially reasonable efforts in exercising its rights under this Section 2.3 so as not to materially impair Tenants access to or use of the Premises.
Section 2.5:
At the end of Section 2.4, insert the following Section:
2.5 Parking. Tenant shall have the right to use up to forty-nine and 807/1000ths percent (49.807%) of the available parking spaces in the Phase on a non-exclusive basis. The Phase includes approximately four hundred fourteen (414) parking spaces. At Tenants written request, Landlord shall designate up to six (6) of the parking spaces allocated for Tenants use and located near the Building as visitor parking.
Section 3.3:
At the end of Section 3.2, insert the following Section:
3.3 Delivery of Possession. Landlord shall deliver possession of the Premises to Tenant within one (1) business day after the Effective Date, in a broom clean condition with all building systems in working order and the roof in water-tight condition.
Section 4.4:
On page 3, line 1, in place of the deleted language, insert within three (3) business days after Tenants receipt of written notice from Landlord that such installment of Rent is past due.
Section 4.5:
On page 3, line 2, in place of the deleted word, insert within three (3) business days after Tenants receipt of written notice from Landlord that such installment of Rent is past.
Section 4.6:
On page 4, line 3, in place of the deleted word, insert will.
On page 4, line 4, after the word transferee, insert or the transferee will assume in writing Landlords obligation to return the Security Deposit to Tenant in accordance with the terms of this Lease.
Section 5.6:
At the end of this Section, insert Landlord shall furnish Tenant with copies of tax bills for the prior calendar year within ten (10) days after Tenants written request.
Section 6.1:
On page 5, line 9, after the word action, insert covering the Building, the Tenant Improvements and all other improvements made by Tenant to the Premises (if available at commercially reasonable rates).
Section 6.2(a):
On page 5, line 2, in place of the deleted language, insert Five Million Dollars ($5,000,000.00) per occurrence and Ten Million Dollars ($10,000,000.00) aggregate.
On page 5, line 5, after the word coverage, add a period and insert Tenant may satisfy the insurance requirement pursuant to this Section 6.2 (a) in combination with an umbrella policy.
Section 6.2(b):
On page 5, line 1, before the word Comprehensive, insert Solely with respect to the Project.
On page 5, line 4, after the word automobiles, add a period and insert Tenant may satisfy the insurance requirement pursuant to this Section 6.2(b) in combination with an umbrella policy.
Section 6.2 (c):
On page 5, line 5, after the amount ($5,000,000), insert in the state of California. Tenant may satisfy the insurance requirement with respect to the employers liability insurance in combination with an umbrella policy.
Section 6.2 (d):
On page 6, line 6, in place of the deleted language, add a period and insert Tenant shall maintain full replacement cost property insurance with respect to all of the alterations, improvements and additions made by Tenant in the Premises or the Building (including the Tenant Improvement Work). Tenants property insurance with respect to such alterations, improvements and additions shall provide that all claims made thereunder shall be adjusted by Landlord and all proceeds payable thereunder shall be paid to Landlord. Tenant shall maintain, at a minimum, actual value insurance with respect to the EDP Equipment.
Section 6.2(e):
On page 6, line 1, in place of the first deletion, insert Interruption.
On page 6, line 1, in place of the second deletion, insert interruption.
Section 6.3 (d):
On page 6, line 2, in place of the deleted language, insert mortgagee, ground lessee, partner, agent or affiliate of Landlord.
On page 6, line 3, after the word Section 6, insert , except workers compensation insurance and business interruption insurance.
Section 6.3 (f):
On page 7, line 1, after the word The, insert property insurance.
Section 6.4:
On page 7, line 2, in place of the deleted word, insert property manager.
On page 7, line 8, after the word misconduct, insert or Environmental Losses (defined in Section 11.1) not covered by Sections 11.3 and 11.5 of this Lease.
On page 7, line 15, after the word cause, insert excluding any loss, damage or injury to the extent caused by the willful or criminal misconduct of any Indemnified Party.
Section 6.5:
On page 7, line 8, in place of the deleted language, insert or Building.
Section 7.2:
On page 7, line 8, after the word fees, insert (not to exceed in any year three percent (3%) of the annual Base Rent due for such year).
On page 8, line 1, in place of the deleted language, insert rate equal to the Prime Rate plus one percent (1%) (with the term Prime Rate defined as the reference rate (or its equivalent) announced publicly in San Francisco, California, from time to time by Wells Fargo Bank, N.A. or, if Wells Fargo Bank, N.A. ceased to exist, the largest bank, in terms of assets, headquartered in California).
At the end of this Section, insert Notwithstanding anything to the contrary contained in this Lease, Operating Expenses chargeable to Tenant shall not include the following:
1. The cost of any capital repairs, replacements and/or improvements made to the structural portions of the Building or the Phase, including the structural walls of the Building, the Building foundation and the structural portions of the roof (but excluding the roof membrane);
2. The cost of providing any service direct to and paid directly by any other tenant of the Project (excluding such tenants share of Operating Expenses);
3. The cost of any items for which Landlord is reimbursed by insurance proceeds, condemnation awards, a tenant of the Project or otherwise (excluding any payment by a tenant of that tenants share of Operating Expenses), to the extent so reimbursed;
4. Any real estate brokerage commission or other costs incurred in procuring tenants, or any fee in lieu of commission;
5. Payments of principal or interest on mortgages or ground lease payments (if any);
6. Costs incurred by Landlord due to the violation by Landlord or any tenant of the terms and conditions of any lease of space in the Building, Phase or Project, or any law, code, regulation, ordinance or the like (except to the extent attributable to Tenants acts or omissions);
7. Landlords general corporate overhead and general and administrative expenses;
8. Any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord (other than in the parking facility for the Phase or the Project); and
9. Costs incurred to (i) comply with laws relating to the removal of any Hazardous Material (as that term is defined in Section 11) of such nature that a federal, state or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state and under the conditions that the Hazardous Material then existed in or on the Building, Phase or Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto, and (ii) remove, remedy, contain or treat any Hazardous Material which is brought onto the Building, Phase or Project after the date hereof by Landlord or any other tenant of the Project, and which is of such a nature, at that time, that a federal, state or municipal governmental authority, if it then had knowledge of the presence of such Hazardous Material, in the state and under the conditions that it then existed in or o n the Building, Phase or Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto.
Section 7.8 (a):
At the end of this Section, insert Tenant shall arrange and provide for its own janitorial services in the Building.
Section 7.8 (b):
At the end of this Section, insert Landlord represents to Tenant that the Building is separately metered for electricity, gas and water.
Section 7.9:
At the end of Section 7.8, add the following Section:
7.9 Tenants Audit Rights. Tenant shall have ninety (90) days after Tenant receives the year end statement of the adjustment to the Operating Expenses for the prior calendar year to notify Landlord in writing of Tenants desire to conduct, at Tenants sole cost and expense, an audit of Landlords books and records relating to the prior calendar year. Any such audit must be conducted by Tenant or its agent during regular business hours at the offices of Landlord or the offices of Landlords designated agent and must be completed within one hundred fifty (150) days after Tenant receives the applicable year end statement. The person or entity performing the audit or review of Landlords books and records on Tenants behalf or at Tenants request may not be compensated for the audit or review on a contingency fee basis. If Landlord objects to the findings of Tenants audit, Landlord and Tenant shall attempt to resolve their disagreement concerning the amount of Tenants proportionate share of
Operating Expenses within the next thirty (30) days. If Landlord and Tenant are unable to agree upon the amount of Tenants proportionate share of Operating Expenses (after Tenant has completed its audit), the parties shall submit the matter to binding arbitration before a single neutral arbitrator having experience in real estate valuation, property management or accounting or, alternatively, the arbitrator may be a retired judge or justice of a California Superior Court or Court of Appeal. The matter shall be decided by arbitration in accordance with the applicable arbitration statutes and the then existing Commercial Arbitration Rules of the American Arbitration Association. Any party may initiate the arbitration procedure by delivering a written notice of demand for arbitration to the other party. Within thirty (30) days after the other partys receipt of written notice of demand for arbitration, the parties shall attempt to select a qualified arbitrator who is acceptable to all parties. If the parties are unable to agree upon an arbitrator who is acceptable to all parties, either party may request the American Arbitration Association to appoint the arbitrator in accordance with its Commercial Arbitration Rules. The provisions of California Code of Civil Procedure Section 1283.05 or its successor section(s) are incorporated in and made a part of this Lease with respect to any arbitration requested in accordance with the provisions contained in this Section. Depositions may be taken and discovery may be obtained in any arbitration proceeding requested pursuant to this Section in accordance with the provisions of California Code of Civil Procedure Section 1283.05 or its successor section(s). Arbitration hearing(s) shall be conducted in Santa Clara County California. Any relevant evidence, including hearsay, shall be admitted by the arbitrator if it is the sort of evidence upon which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the admiss ibility of such evidence in a court of law; however, the arbitrator shall apply California law relating to privileges and work product. In rendering his or her award, the arbitrator shall set forth the reasons for his or her decision. The fees and expenses of the arbitrator shall be paid in the manner allocated by the arbitrator. This agreement to arbitrate any dispute concerning the findings of Tenants audit shall be specifically enforceable under the prevailing arbitration law. Judgment on the award rendered by the arbitration may be entered in any court having jurisdiction thereof. If, subsequent to Tenants audit, the parties determine that Landlord has overstated Tenants percentage share of the Operating Expenses by more than five percent (5%) during the applicable calendar year, Landlord shall reimburse Tenant for the reasonable cost of the audit.
Section 8.1:
At the end of this Section, insert Specifically, Landlord shall maintain the structural portions of the Building, including the structural elements of the walls, floor slabs and roof; the heating, ventilating and air conditioning system in the Building (the Building HVAC); the elevator; the plumbing and electrical systems in the Common Areas (with Tenant maintaining the plumbing and electrical systems in the Premises); the Common Area parking lots in the Phase; the exterior of the Building, including the exterior glass; and the foundation. If the existing Building HVAC breaks or malfunctions during the Term, then, to the extent it is commercially reasonable to do so, Landlord shall repair the existing Building HVAC as opposed to replacing the existing Building HVAC. Landlord shall notify Tenant in writing prior to replacing the existing Building HVAC. Landlord shall be responsible for ensuring that the Building HVAC and the ele vators are in working order on January 1, 2000.
Section 8.2:
On page 9, line 4, after the word Landlord, insert and those items or components of the Building that Landlord is obligated to repair pursuant to Section 8.1.
On page 9, line 14, after the word all, insert interior.
At the end of this Section, insert Tenant is responsible for the proper maintenance and servicing of fire extinguishers and fire protection equipment in the Premises. Notwithstanding anything to the contrary contained in this Section, Tenant shall not be required to remove any of the Tenant Improvements (defined in the Work Letter) constructed by Tenant as part of the Tenant Improvement Work (defined in the Work Letter).
Section 8.3:
On page 10, line 3, in place of the deleted language, insert upon three (3) business days prior written.
On page 10, line 11, after the word Term,, insert and Tenant fails to perform such obligations within three (3) business days after written notice to Tenant,.
Section 8.4:
On page 10, line 1, after the word times, insert after prior notice to Tenant (except in the event of an emergency whereupon no prior notice is required).
On page 10, line 4, after the word tenants, insert (during the last fifteen (15) months during the Term).
On page 10, line 5, in place of the deleted language, insert Tenant at all times shall maintain personnel on the Premises twenty-four (24) hours a day who are authorized to provide Landlord access to the Premises in accordance with the provisions of this Section 8.4.
Section 8.5:
On page 10, line 6, after the word lien, insert if Tenant does not post a bond sufficient to remove the lien in accordance with California law within twenty (20) days after Tenant is notified of the existence of the lien.
Section 9.2:
On page 11, line 1, in place of the deleted language, insert Tenant shall not make or allow to be made any alterations, additions or improvements to the Premises, either at the inception of this Lease or subsequently during the Term, without obtaining the prior written consent of Landlord. Landlord shall not unreasonably withhold its consent to any non-structural alterations, additions or improvements provided that the proposed non-structural alterations, additions or improvements do not require changes or modifications to the Building systems and are consistent with the use of the Premises as first class office space as reasonably determined by Landlord. Landlord shall have the right to withhold its consent to all other alterations, additions or improvements in Landlords sole and absolute discretion. Landlord shall respond to any request by Tenant to make any alteration, addition or improvement to the Premises within ten (10) busin ess days after Landlords receipt of Tenants written request.
On page 11, line 23, in place of the second deletion, insert all reasonable third-party costs incurred by Landlord in.
On page 11, line 25, after the first occurrence of the word Tenant, insert ; provided, however, Landlord shall not charge Tenant for costs incurred by Landlord in reviewing Tenants plans for the Tenant Improvement Work (as defined in the Work Letter).
At the end of this Section, insert Notwithstanding anything to the contrary contained in this Lease, Tenant shall have the right, without the consent of, but with notice to, Landlord, to make nonstructural alterations within the Premises costing, in the aggregate, less than Twenty-Five Thousand Dollars ($25,000.00) in any twelve (12) month period, provided that the non-structural alterations proposed by Tenant do not (i) diminish the use of the Premises as first class office space as reasonably determined by Landlord and (ii) affect the structure of the Building or the Building systems. Tenant shall provide Landlord with as built drawings of any such alterations. If requested in writing by Tenant at the time Tenant requests Landlords consent to any proposed alteration, addition or improvement (or, if Landlords consent is not required, at the time Tenant notifies Landlord of any proposed alteration, addition or improvement), Lan dlord shall notify Tenant as to whether Tenant will be required to remove the proposed alteration, addition or improvement and restore the Premises to its original condition at the end of the Term.
Section 10.2:
On page 12, line 8, in place of the deleted word, insert leases.
On page 12, line 9, in place of the deleted language, insert or Tenants lease as to all or a portion of the Premises being terminated.
On page 12, line 12, at the end of the sentence, insert The provisions of this Section shall not pertain to any interior signage of Tenant that is not visible from the outside of the Premises.
At the end of this Section, insert Notwithstanding anything to the contrary contained in this Section, Tenant shall have the right to install (i) a directional sign on the existing directional signs located within the Phase Common Areas, (ii) a sign on the entry wall adjacent to the main entrance of the Building (Entry Wall Signs), and (iii) a sign on the exterior of the Building facing Highway 101 (but only if Tenant has not installed exterior signage
on the 4500 Bohannon Building (defined in Section 27) facing Highway 101). Tenants right to install the signage referenced in the preceding sentence is subject to Landlords prior review and approval of Tenants proposed signage, including the size, color, design and exact proposed location of Tenants signage, which approval shall not be unreasonably withheld provided that the signage is in accordance with Landlords written sign criteria. A copy of Landlords written sign criteria is attached hereto as Exhibit G. Landlord approves in advance text reading E*TRADE on Tenants Building signage so long as the text is black in color; provided, however, the text on Tenants monument signs in the Phase and Tenants Entry Wall Signs may contain the colors contained in Tenants current logo. Tenant Shall obtain all of the necessary governmental permits and approvals required to install Tenants signs in the Project and all of Tenants signs shall comply with all laws, ordinances and regulations and any of the conditions, covenants and restrictions recorded against the Phase.
Section 11.5:
On page 13, line 5, after the word Tenants, insert and Tenants employees, agents, representatives and contractors.
Section 12.1:
On page 14, line 1, in place of the deleted language, insert If the Premises and/or the Building are damaged or destroyed, then, subject to the provisions of this Section 12 and provided that neither party terminates this Lease pursuant to this Section 12, (i) Landlord shall promptly and diligently repair or restore the Premises and/or the Building (excluding the Tenant Improvements and all other alterations, additions and improvements made by Tenant to the Premises) and (ii) Tenant shall promptly and diligently repair or restore all of the Tenant Improvements and all other alterations, additions and improvements made by Tenant to the Premises.
Section 12.2:
On page 14, line 4, in place of the deleted language, insert portions of the Premises or the Building which Landlord is obligated to repair.
On page 14, line 5, in place of the deleted number, insert two hundred seventy (270).
On page 14, line 8, after the word notice., insert the following:
In addition, Tenant shall have the right to terminate this Lease upon thirty (30) days prior written notice to Landlord if the Premises or the Building is destroyed or damaged by fire or other casualty and either (i) Landlord reasonably determines that the repair or restoration of the portion of the Premises or the Building which Landlord is obligated to repair or restore cannot be completed within two hundred seventy (270) days from after the date of the casualty or (ii) Landlord fails to substantially complete the repair or restoration of the portion of the Premises or the Building which Landlord is obligated to repair or restore by the two hundred seventieth (270th) day from after the date of the casualty (hereinafter referred to as the Outside Completion Date). The Outside Completion Date shall be extended for an additional ninety (90) days in the event Landlord fails to substantially complete the repair or restoratio n of the portion of the Premises or the Building which Landlord is obligated to repair or restore for any reason not within Landlords reasonable control, including, without limitation, inclement weather, labor disputes, or any default by Landlords contractor or architect under their agreement with Landlord with respect to the repair or restoration of the Premises or the Building). In addition, the Outside Completion Date shall be extended one day for each day that Landlord is delayed in completing the repair or restoration work due to any interference by Tenant or Tenants contractors with Landlords repair or restoration work. Tenant shall exercise its right to terminate this Lease pursuant to subsection (i) above, if at all, by written notice to Landlord within thirty (30) days after Landlord notifies Tenant of Landlords estimate of the time required to complete the repair or restoration of the portion of the Premises or the Building which Landlord is obligated to repair or rest ore. Tenant shall exercise its right to terminate this Lease pursuant to subsection (ii) above, if at all, by written notice to Landlord within ten (10) days after the expiration of the Outside Completion Date. Notwithstanding the foregoing, if at any time Landlord reasonably determines that Landlord cannot substantially complete the repair or restoration of the Premises by the Outside Completion Date, Landlord shall notify Tenant in writing and Tenant shall have ten (10) days from the date Tenant receives such written notice in which to terminate this Lease by written notice to Landlord.
If neither party exercises its right to terminate this Lease, then (i) Landlord shall promptly commence the process of obtaining all of the necessary permits and approvals for the repair or restoration of the portion of the Premises or the Building which Landlord is obligated to repair or restore as soon as reasonably practicable, and
thereafter prosecute the repair or restoration of the Premises or the Building diligently to completion, and (ii) Tenant shall promptly commence the process of obtaining all of the necessary permits and approvals for the repair or restoration of the Tenant Improvements and any other alterations, additional or improvements made by Tenant to the Premises as soon as reasonably practicable, and thereafter prosecute the repair or restoration of the Tenant Improvements and other improvements to completion. Tenant shall not interfere with Landlords repair and restoration work and may commence Tenants repair or restoration work in the Premises only to the extent that Tenants work does not interfere with Landlords repair or restoration work.
At the end of this Section, insert Notwithstanding the foregoing, if Landlord elects to terminate this Lease as a result of there being insufficient insurance proceeds to pay for all of the costs of the repair or restoration, Tenant shall have the right to vitiate Landlords termination by (i) notifying Landlord in writing within thirty (30) days after Landlord notifies Tenant of its election to terminate this Lease of Tenants election to pay for the difference between the cost of restoring the Premises or the Building, as applicable, and the amount of the insurance proceeds available to Landlord for the repair or restoration of the Premises or the Building, and (ii) delivering to Landlord within thirty (30) days after Tenant notifies Landlord of its election to pay for any shortfall in insurance proceeds an amount equal to the difference between the cost of repairing or restoring the Premises or the Building, as reasonably esti mated by Landlord, and the amount of insurance proceeds available to Landlord for the repair or restoration of the Premises or the Building, as applicable.
Section 12.3:
At the end of this Section, insert If Landlord receives any proceeds from either Landlords or Tenants insurance carrier attributable to the cost of repairing or restoring the Tenant Improvements or any other alterations, additions or improvements made by Tenant in the Premises that are not owned by Landlord, then Landlord shall reimburse Tenant out of those proceeds an amount equal to the amount expended by Tenant in repairing or restoring the alterations, additions or improvements in the Premises. Notwithstanding the foregoing, if either party terminates this Lease as a result of a casualty or for any other reason, all of the insurance proceeds with respect to the Tenant Improvements and any other alterations, additions or improvements made by Tenant to the Premises shall belong to Landlord.
Section 12.5:
On page 14, line 1, in place of the deleted word, insert Landlords and Tenants
On page 14, line 2, in place of the deleted word, insert either party.
On page 14, line 3, in place of the deleted word, insert the other party.
On page 14, line 4, in place of the deleted language, insert The party electing to terminate this Lease shall notify the other party.
On page 14, line 6, in place of the deleted language, insert neither party elects.
Section 13.2:
On page 15, line 6, in place of the deleted language, insert Tenant.
Section 13.4:
On page 15, line 2, after the word right, insert such as.
Section 13.5:
On page 15, line 9, in place of the deleted word, insert Tenant.
Section 14.1 (c):
On page 16, line 3, after the word Landlord, insert ; provided, however, if such default cannot be cured within thirty (30) days, Tenant shall not be in default of this Lease so long as Tenant has commenced such cure within the thirty (30) day period and is diligently pursuing the cure to completion (but in no event longer than ninety (90) days from the date Landlord notifies Tenant of the default).
Section 14.1 (j):
At the end of Section 14.1(i), add the following Section:
(j) 4500 Bohannon Lease. An Event of Default (as that term is defined in the 4500 Bohannon Lease) on the part of the tenant under the 4500 Bohannon Lease.
Section 14. l:
On page 16, in the last sentence in this Section, after the word Lease, insert if the notice of default was drafted for Landlord by Landlords attorneys.
Section 15.1:
On page 17, line 5, after the word withheld, insert or delayed.
At the end of this Section, insert Notwithstanding anything to the contrary contained in Section 15. t, Tenant shall have the right to assign this Lease or sublet all or a portion of the Premises without Landlords consent (but with thirty (30) days prior written notice to Landlord) to (i) an Affiliate or (ii) any entity resulting from a merger or consolidation with Tenant (each hereinafter referred to as a Permitted Assignee). For purposes of this Section 15, an Affiliate is defined as (i) an entity that directly or indirectly controls, is controlled by or is under common control with Tenant or (ii) an entity at least a majority of whose economic interest is owned by Tenant; and control means the power to direct the management of such entity through voting rights, ownership or contractual obligations. No assignment or subletting by Tenant shall relieve Tenant of any obligation under this Leas e, including Tenants obligation to pay Base Rent and Additional Rent hereunder.
Section 15.3:
On page 17, line 1, in place of the deleted number, insert ten (10) business.
On page 17, line 3, after the word sublet, insert if the term of such sublet is for greater than five (5) years or ends during the last year of the Term or the proposed sublessee is an existing tenant or subtenant in the Project.
At the end of this Section, insert Notwithstanding anything to the contrary contained in Section 15.3, Landlord shall not have the right to terminate this Lease as to all or any portion of the Premises pursuant to the terms and conditions contained in this Section 15.3 in connection with an assignment by Tenant of its interest in this Lease to a Permitted Assignee or Tenants sublease of all or a portion of the Premises to a Permitted Assignee.
Section 15.5:
On page 18, line 15, after the word Project., insert For purposes of this Section 15.5, the term prospective tenant shall mean any prospective lessee of space in the portion of the Project owned by Landlord with whom or which Landlord has been in contact concerning the prospective lessees interest in the space within thirty (30) of Tenants contact with such prospective lessee or the date on which Tenant requests Landlords consent to the proposed sublease or assignment.
On page 18, line 16, in place of the deleted number, insert ten (10) business.
Section 15.6:
On page 18, line 10, after the word Alto,, insert and Tenant is not entitled to deduct those costs pursuant to this Section 15.6 prior to calculating the amount of any excess rent or other consideration payable to Landlord in accordance with the terms of this Section 15.6,
At the end of this Section, insert Notwithstanding anything to the contrary contained in Section 15.6, in calculating the amount of the excess rent or other consideration due to Landlord in connection with any assignment or sublease by Tenant, Tenant shall be entitled to deduct from the total amount of rent or other consideration paid to Tenant (prior to determining Landlords share of any excess rent or other consideration) the total amount of (i) any attorneys fees and brokerage commissions paid by Tenant in connection with the assignment or sublease and (ii) the cost of installing a demising wall in connection with the partitioning of the Premises for multiple occupancy. In addition, further notwithstanding anything to the contrary contained in Section 15.6, Landlord shall not be entitled to
any excess rent or consideration in connection with Tenants assignment of its interest in this Lease to a Permitted Assignee or Tenants sublease of all or a portion of the Premises to a Permitted Assignee.
Section 15.12:
On page 19, line 4, after the word release, insert ; provided, however, Landlord shall be released from its obligation to refund the Security Deposit to Landlord in accordance with the terms of this Lease only if Landlord delivers the Security Deposit to the transferee or the transferee assumes in writing liability for returning the Security Deposit to Tenant in accordance with the terms of this Lease.
Section 15.13:
At the end of Section 15.12, add the following Sections
15.13. Additional Space. During the Term, Tenant shall not sublease (as a sublessee) any additional space within the Project or take an assignment of any lease of additional space within the Project which would result in Tenant having subleased or, as a result of one or more assignments, leased in the aggregate more than fifty (50,000) rentable square feet of space in the Project without Landlords prior written consent, which may be withheld by Landlord in its sole and absolute discretion. Notwithstanding the foregoing, if Tenant (i) exercises its option pursuant to Section 26 and leases the 4400 Bohannon Expansion Option Space and (ii) exercises its option under the 4500 Bohannon Lease and leases all of the First Expansion Option Space (defined in the 4500 Bohannon Lease), then, from the later of the commencement of Tenants lease of the 4400 Bohannon Expansion Option Space or the commencement of Tenants lease of a ny increment of the First Expansion Option Space, Tenant shall not occupy or sublease any additional space in the Project, as a result of one or more assignment or sublease of, in the aggregate, more than thirty thousand (30,000) rentable square feet of space without Landlords prior written consent, which may be withheld by Landlord in its sole and absolute discretion.
15.14 Landlord Estoppel Certificate. Within ten (10) days after Tenants written request, Landlord shall execute and deliver to Landlord, in recordable form, a certificate to Tenant certifying, among other things, (i) that this Lease is unmodified and in full force and effect or, if modified, stating the nature of the modification and certifying that this Lease, as so modified, is in full force and effect, (ii) the date to which the Rent and other charges have been paid in advance, if any; and (iii) that to Landlords actual knowledge, there are no uncured defaults on the part of Tenant under this Lease, or if there are uncured defaults on the part of Tenant, stating the nature of the uncured defaults. Any such certificate may be relied upon by Tenant.
Section. 16.1:
On page 20, line 9, after the number ten (10), insert business.
Section 16.3:
At the end of this Section, insert Tenants obligations under this Lease are conditioned upon Tenants receipt of an executed nondisturbance agreement from all current mortgagees (as of the date of this Lease) whose liens are secured by the Phase within sixty (60) days after the date of this Lease. The nondisturbance agreement, among other things, shall provide that Tenants possession of the Premises shall not be disturbed in the event of a foreclosure so long as Tenant is not in default under this Lease, and that this Lease shall remain in full force and effect, without materially increasing Tenants obligations and duties under this Lease or materially diminishing Tenants rights and privileges under this Lease. Tenant shall subordinate Tenants interest in the Premises, Building and Phase and this Lease to any future mortgagee or ground lessor provided that such mortgagee or ground lessor agrees to provide Tenant with a nondisturbance agreement on the terms set forth above.
Section 19.5:
On page 21, line 3, in place of the deleted language, insert constitutes the Phase.
Section 19.12:
On page 22, line 3, in place of the deleted word, insert one hundred fifty percent (150%) of.
On page 22, line 7, after the word addition,, insert if Tenant fails to vacate and surrender the Premises to Landlord after the end of the Term within ten (10) days after written notice from Landlord.
Section 19.15:
At the end of this Section, insert Landlord shall pay to Tenants Broker a leasing commission in connection with this Lease in accordance with the terms and conditions set forth in a separate written agreement entered into between Landlord and Tenants Broker.
Section 19.17:
At the end of this Section, insert Notwithstanding anything to the contrary contained in this Section, if in the event of any interruption in utilities or services to the Premises that (i) substantially interferes with Tenants use of the Premises for Tenants business, as reasonably determined by Tenant, for more than five (5) continuous days, and (ii) are not the result of Tenants negligence or willful misconduct, the Rent due under this Lease shall abate (but only to the extent of any proceeds received by Landlord from rental abatement insurance) for each successive day that the interruption continues until the utilities or services are restored.
Sections 20 26:
The following Sections are incorporated into the Lease:
20. Early Entry. Upon the execution and delivery of this Lease, Tenant may, at Tenants sole risk and cost, enter upon the Premises prior to the Commencement Date for the purposes of performing Tenants Work (as defined in the Work Letter) subject to Tenant complying with each of the following terms and conditions during such early entry period: (i) Tenant shall comply with all of the terms and conditions contained in this Lease, except for Tenants obligation to pay Base Rent, Impositions and Operating Expenses; (ii) Tenant shall indemnify, protect, defend and hold harmless Landlord and all other Indemnified Parties from all claims and losses, and exempt Landlord and the other Indemnified Parties from any liability, all as more particularly provided in Sections 6.4 and 6.5; (iii) Tenant shall comply with all of the requirements contained in this Lease with respect to the type and amounts of insurance required to be maintained by Tenant and provide Landlord wi th evidence satisfactory to Landlord that Tenant has obtained such insurance; and (iv) Tenant shall pay for all utility services supplied to the Premises and/or used by Tenant.
21. Adjustments to Base Rent. The monthly Base Rent shall be increased on each anniversary of the Commencement Date during the Term by an amount equal to three and one-half percent (3.5%) of the amount of the then existing monthly Base Rent.
25. Extension Options
25.1 Options to Extend. Tenant shall have two (2) options to extend the Term for a period of five (5) years each (hereinafter referred to as the First Extension Term and Second Extension Term, respectively, and each, an Extension Term), provided that at the time Tenants Extension Notice (defined below) is given and at the time the Extension Term is to commence (i) no Event of Default by Tenant exists and (ii) E-Trade Group, Inc. or a Permitted Assignee of E-Trade Group, Inc. is in occupancy of at least ninety percent (90%) of the Building, the 4500 Bohannon Building and any other space leased to Tenant pursuant to this Lease or the 4500 Bohannon Lease. Tenant shall exercise such option, if at all, by written notice (Tenants Extension Notice) to Landlord not later than fifteen (15) months, nor earlier than eighteen (18) months, prior to the expiration of the original Te rm (as such Term may be extended pursuant to Section 26) or the First Extension Term, as the case may be. Tenant may exercise its option to extend the Term for an Extension Term only if Tenant concurrently exercises its right to extend the term of the 4500 Bohannon Lease for an equal period of time in accordance with the terms and conditions contained therein. Tenants failure to deliver Tenants Extension Notice to Landlord in a timely manner shall be deemed a waiver of Tenants option to extend the Term and Tenants extension option, and any future option to extend the Term, shall lapse and be of no force or effect.
25.2 Exercise of Option.
(a) First Extension Term. If Tenant exercises its extension option for the First Extension Term, the Term shall be extended for an additional period of five (5) years on all of the terms and conditions of this Lease, except (i) Tenants options to further extend the Term shall be reduced in number by one, (ii) Landlord shall not be required to pay to Tenant any tenant improvement allowance or inducement and (iii) the monthly Base Rent for the first year of the First Extension Term shall be the greater of (A) the Initial Fair Market Rent prevailing at the commencement of the First Extension Term or (B) the monthly Base Rent in effect at the end
of the original Term. The Base Rent due during the First Extension Term shall be increased annually by the Average Annual Percentage (defined below), if any.
(b) Second Extension Term. If Tenant exercises its extension option for the Second Extension Term, the Term shall be extended for an additional period of five (5) years on all of the terms and conditions of this Lease, except (i) Tenant shall have no further options to extend the Term of this Lease, (ii) Landlord shall not be required to pay to Tenant any tenant improvement allowance or inducement and (iii) the monthly Base Rent for the first year of the Second Extension Term shall be the greater of (A) the Initial Fair Market Rent prevailing at the commencement of the Second Extension Term or (B) the monthly Base Rent in effect at the end of the First Extension Term. The Base Rent due during the Second Extension Term shall be increased annually by the Average Annual Percentage, if any.
(c) Real Estate Commission. Tenant shall be responsible for all brokerage costs and/or finders fees associated with Tenants exercise of its option to extend the Term made by parties claiming through Tenant. Landlord shall be responsible for all brokerage costs and/or finders fees associated with Tenants exercise of its option to extend the Term made by parties claiming through Landlord.
25.3 Determination of Fair Market Rent.
(a) Agreement on Rent. For the purposes of this Section, the Initial Fair Market Rent means the monthly base rent (i.e., rent other than operating expenses, taxes and insurance premiums), expected to prevail as of the commencement of an Extension Term for the first year of that Extension Term with respect to leases of office space within buildings located in the Designated Area (defined as the Menlo Park and Palo Alto areas other than the Sand Hill Road area, Stanford Research Park and the Palo Alto central business district) of a quality and with interior improvements, parking, site amenities, building systems, location, identity and access all comparable to that of the Premises, for a term equal to the Extension Term. The term Average Annual Percentage shall mean the avera ge annual percentage increase in the monthly base rent (i.e., rent other than operating expenses, taxes and insurance premiums) expected to prevail as of the commencement of that particular Extension Term with respect to leases of office space within buildings located in the Designated Area of a quality and with interior improvements, parking, site amenities, building systems, location, identity and access all comparable to that of the Premises, for a term equal to the Extension Term). Within fifteen (15) days after Landlords receipt of Tenants Extension Notice, by written notice to Tenant (Landlords Rent Notice), Landlord shall advise Tenant as to Landlords determination of the Initial Fair Market Rent and Average Annual Percentage. If Tenant disagrees with Landlords determination, Tenant shall advise Landlord as to Tenants determination of Initial Fair Market Rent and Average Annual Percentage by written notice (Tenants Rent Notice) within f ifteen (15) days after Tenants receipt of Landlords Rent Notice. If Tenant fails to deliver Tenants Rent Notice to Tenant within the time period provided above, Tenant shall be bound by Landlords determination of the Initial Fair Market Rent and Average Annual Percentage as set forth in Landlords Rent Notice. If Tenant shall timely deliver to Landlord Tenants Rent Notice, Landlord and Tenant shall attempt in good faith to reach agreement as to the Initial Fair Market Rent and Average Annual Percentage within fifteen (15) days after Landlords receipt of Tenants Rent Notice.
(b) Selection of Appraisers. If Landlord and Tenant are unable to agree as to the amount of the Initial Fair Market Rent and Average Annual Percentage within the aforementioned fifteen (15) day period as evidenced by a written amendment to this Lease executed by them, then, within ten (10)days after the expiration of the fifteen (15) day period, Landlord and Tenant shall each, at its sole cost and by giving notice to the other party, appoint a competent and disinterested real estate appraiser with membership in the Appraisal Institute and M.A.I. designation and with at least five (5) years full-time commercial appraisal experience in the Menlo Park and Palo Alto areas to determine the Initial Fair Market Rent and Average Annual Percentage. If either Landlord or Tenant does not appoint an appraiser within ten (10) days after the other party has given notice of the name of its appraiser, the single appraiser appointed shall be the sole appraiser and shall determine the Initial Fair Market Rent and Average Annual Percentage. If Landlord and Tenant as stated in this Section appoint two (2) appraisers, they shall attempt to select a third appraiser meeting the qualifications stated in this Section within ten (10) days. If they are unable to agree on the third appraiser, either Landlord or Tenant, by giving ten (10) days notice to the other party, can apply to the then president of the real estate board of the county in which the Building is located, or to the Presiding Judge of the Superior Court of the county in which the Building is located, for the selection of a third appraiser who meets the qualifications stated in this paragraph. Landlord and Tenant each shall bear one-half (1/2) of the cost of appointing the third appraiser and of paying the third appraisers fee. The third
appraiser, however selected, shall be a person who has not previously acted in any capacity for either Landlord or Tenant.
(c) Value Determined By Three (3) Appraisers. The appraisers shall determine the Initial Fair Market Rent and Average Annual Percentage by using the Market Comparison Approach with the relevant market being office buildings located in the Designated Area. Within thirty (30) days after the selection of the third appraiser, Landlords appraiser shall arrange for the simultaneous delivery to Landlord of written appraisals from each of the appraisers and the three (3) appraisals shall be added together and their total divided by three (3); the resulting quotients shall be the Initial Fair Market Rent and Average Annual Percentage. If, however, the low appraisal and/or the high appraisal of either the Initial Fair Market Rent or the Average Annual Percentage are/is more than ten percent (10%) lower and/or higher than the middle appraisal, the low appraisal and/or the high appraisal shall be disregarded. If only one (1) appraisal is disregarded, the remaining two (2) appraisals shall be added together and their total divided by two (2); the resulting quotients shall be the Initial Fair Market Rent and Average Annual Percentage. If both the low appraisal and the high appraisal of either the Initial Fair Market Rent or the Average Annual Percentage are disregarded as stated in this Section, the middle appraisal shall be the Initial Fair Market Rent or Average Annual Percentage, as applicable.
25.4 Notice to Landlord and Tenant. After the monthly Base Rent for an Extension Term has been set, Landlord and Tenant immediately shall execute an amendment to the Lease stating the monthly Base Rent.
26. Option to Expand.
26.1 Expansion Option Provided that (i) no Event of Default by Tenant exists under the terms of this Lease at the time Tenant exercises its option to expand the Premises or at the time Tenant is to commence occupancy of the space in question, (ii) E-Trade Group, Inc. or a Permitted Assignee occupies at least ninety percent (90%) of the Building, the 4500 Bohannon Building and all other space leased to Tenant pursuant to this Lease and the 4500 Bohannon Lease, and (iii) Tenant has a financial net worth of at least Five Hundred Million Dollars ($500,000,000.00) at the time Tenant exercises its Expansion Option or otherwise delivers to Landlord the additional security deposit required pursuant to Section 26.6 below, Tenant shall have the option (the Expansion Option) to lease the space (the 4400 Bohannon Expansion Option Space) listed on Exhibit F, attached hereto, upon the terms and conditions cont ained in this Section 26.
26.2 Exercise of Expansion Option. Tenant shall exercise the Expansion Option by written notice to Landlord no earlier June 1, 1999 and no later than August 31, 1999.
Notwithstanding the foregoing, if the tenant that currently leases the 4400 Bohannon Expansion Option Space defaults on its obligations under its lease and Landlord either terminates the existing tenants lease or enters into a lease termination agreement with the existing tenant (in lieu of bringing an unlawful detainer action against the existing tenant) which results in the 4400 Bohannon Expansion Option Space becoming available for lease prior to August 31, 2000 (hereinafter referred to as an Early Termination Event), then Tenant shall exercise its Expansion Option to lease the 4400 Bohannon Expansion Option Space (if at all) within forty-five (45) days after Landlord notifies Tenant in writing of the date that the 4400 Bohannon Expansion Option Space has become or will become available for lease; provided, however, in no event will Tenant be required to exercise its Expansion Option more than twelve (12) months prior to the date the 4400 Bohannon Expansion Option Space b ecomes available for lease. If Tenant fails to exercise the Expansion Option with respect to the 4400 Bohannon Expansion Option Space within the time period provided above, the Expansion Option shall expire, and Tenant and Landlord shall have no further rights or obligations under this Section with respect to the 4400 Bohannon Expansion Option Space.
26.3 Terms of Lease. Landlord shall lease the 4400 Bohannon Expansion Option Space to Tenant on all the same terms and conditions contained in this Lease except (i) Landlord shall not be required to pay to Tenant any tenant improvement allowance or inducement, (ii) the term of Tenants lease of the 4400 Bohannon Expansion Option Space shall be for ten (10) years, commencing on the date on which Landlord delivers to possession of the 4400 Bohannon Expansion Option Space to Tenant (subject to extension pursuant to Section 26.5), (iii) Tenant may not place or install exterior signage on the building in which the 4400 Bohannon Expansion Option Space is located, (iv) Tenant shall deliver to Landlord concurrently with Tenants execution of an amendment to this Lease to include the 4400 Bohannon Expansion Option Space or Tenants execution of a new lease for the 4400 Bohannon Expansion Option Space (which Tenant shall execute within thirty (30) days after Tenant exercises its Expansion Option and receives the proposed amendment or lease from Landlord) a security deposit for the 4400 Bohannon Expansion Option Space in an amount equal to the last monthly installment of Base Rent due for the 4400
Bohannon Expansion Option Space, (v) the monthly Base Rent per rentable square foot for the 4400 Bohannon Expansion Option Space shall be an amount equal to monthly Base Rent per rentable square foot of the existing Premises in effect at the commencement of the term of the 4400 Bohannon Expansion Option Space, less (1) the amount of the monthly Base Rent per rentable square foot attributable to the Additional Allowance (if any) and (2) the amount of the monthly Base Rent per rentable square foot attributable to the Base Allowance (which the parties agree to be an amount equal to Seven and One-Half Cents ($0.075) per rentable square foot, increased by three and one-half percent (3.5%) per annum beginning on the Commencement Date and ending on the commencement date of the term of the 4400 Bohannon Expansion Space), subject to further increases thereafter in the same percentages and on the same dates as the remainder of the Premises pursuant to Section 4.2, and (vi) Tenant shall lease the 4400 B ohannon Expansion Option Space in its as is condition, except Landlord shall deliver the 4400 Bohannon Expansion Option Space to Tenant in broom clean condition, with building systems in good working condition and the roof in water right condition.
26.4 Delivery of 4400 Bohannon Expansion Option Space. If Tenant exercises its Expansion Option, Landlord shall use commercially reasonable efforts to deliver possession of the 4400 Bohannon Expansion Option Space to Tenant within five (5) days after Landlord recovers possession of the 4400 Bohannon Expansion Option Space. Tenants obligation to pay Rent to Landlord for the 4400 Bohannon Expansion Option Space shall commence on the forty- fifth (45th) day after Landlord delivers possession of the 4400 Bohannon Expansion Option Space to Tenant; provided, however, if Landlord delivers possession of the 4400 Bohannon Expansion Option Space to Tenant prior to August 31, 2000, Tenants obligation to pay Rent to Landlord for the 4400 Bohannon Expansion Option Space shall commence on the forty-fifth (45th) day after Landlord delivers possession of the 4400 Bohannon Expansion Option Space to Tenant; provided, however, if Landlord delivers possession of the 4400 Bohannon Expansion Option Space to Tenant prior to August 31, 2000 as a result of an Early Termination Event, Tenants obligation to pay Rent to Landlord for the 4400 Bohannon Expansion Option Space shall commence on the sixtieth (60th) day after Landlord delivers possession of the 4400 Bohannon Expansion Option Space to Tenant.
26.5 Extension of Term. If Tenant exercises its option under the 4500 Bohannon Lease to lease an increment of First Expansion Option Space (defined therein) or Tenant exercises its option under this Lease to lease the 4400 Bohannon Expansion Option Space, the Term with respect to the Premises, any increment of First Expansion Option Space for which Tenant has exercised its expansion option and the 4400 Bohannon Expansion Option Space (provided that Tenant has exercised its Expansion Option with respect to such space) shall be extended until the tenth (10th) year after the latest commencement date of Tenants lease of any increment of First Expansion Option Space (for which Tenant has exercised its expansion option) or Tenants lease of the 4400 Bohannon Expansion Option Space.
26.6 Additional Security Deposit.
(a) Amount. If Tenant does not have a financial net worth of at least Five Hundred Million Dollars ($500,000,000.00) at the time Tenant exercises its Expansion Option, Tenant may still exercise its Expansion Option provided that Tenant delivers to Landlord concurrently with Tenants execution of an amendment to this Lease to include the 4400 Bohannon Expansion Option Space as part of the Preemies or Tenants execution of a new lease for the 4400 Bohannon Expansion Option Space (which shall occur no later than thirty (30) days after Tenants execution of its Expansion Option), an additional security deposit (the Additional Security Deposit) in an amount equal to the difference between (i) Forty-Five Dollars ($45.00) per rentable square foot of the 4400 Bohannon Expansion Option Space and (ii) the amount of the security deposit due with respect to the 4400 Bohannon Expansion Option Space pursuant to Section 26.3. If Tenants financial net worth falls below Five Hundred Million Dollars ($500,000,000.00) at any time after Tenant exercises its Expansion Option, then Tenant shall deliver to Landlord within twenty (20) days after Landlords written request the Additional Security Deposit. Alternatively. if Tenants financial net worth increases to Five Hundred Million Dollars ($500,000.000.00) or more at any time after Tenant has delivered to Landlord the Additional Security Deposit, then, within twenty (20) days after Tenants written request, Landlord shall return the Additional Security Deposit to Tenant or credit the Additional Security Deposit against the next installment of Rent due under this Lease.
(b) Additional Remedy. If Tenants financial net worth falls below Five Hundred Million Dollars ($500,000.000.00) at any time after Tenant exercises its Expansion Option, but prior to Tenants lease of the 4400 Bohannon Expansion Option Space, and Tenant fails to deliver to Landlord the Additional Security Deposit required pursuant to Section 26.6(a), then, in additional to all other remedies available to Landlord under this Lease, Landlord may vitiate Tenant s exercise of its Expansion Option by written notice to Tenant and elect not to lease
the 4400 Bohannon Expansion Option Space to Tenant (whereupon Tenant shall have no further rights to lease the 4400 Bohannon Expansion Option Space).
(c) Letter of Credit. In lieu of a cash security deposit, Tenant may deliver to Landlord as the Additional Security Deposit an irrevocable standby letter of credit (the Letter of Credit) naming Landlord as beneficiary, in the amount of the Additional Security Deposit. The Letter of Credit shall be issued by a major national bank located in San Francisco or a regional bank located in the San Francisco Bay Area (Bank) reasonably satisfactory to Landlord and shall be upon such terms and conditions as Landlord may reasonably require. The Letter of Credit shall allow draws by Landlord upon sight draft accompanied by a statement from Landlord that it is entitled to draw upon the Letter of Credit and shall contain terms which allow Landlord to make partial and multiple draws up to the face amount of the Letter of Credit. If Tenant has not delivered to Landlord at least thirty (30) days prior to the expiration of the original Letter of Credit (or any renewal letter of credit) a renewal or extension thereof, Landlord shall have the right to draw down the entire amount of original Letter of credit (or renewal thereof) and retain the proceeds thereof as the security deposit. If and when Tenant would be entitled to request that Landlord return the security deposit to Tenant or apply the security deposit towards Tenants obligation to pay Rent, Landlord shall, at Tenants request, return to Tenant any Letter of Credit delivered to Landlord pursuant to this paragraph.
27 4500 Bohannon Lease. Concurrently with the execution of this Lease, Landlord and Tenant are entering into that certain lease (the 4500 Bohannon Lease) pursuant to which Landlord is leasing to Tenant approximately sixty-two thousand nine hundred twenty (62,920) rentable square feet of space in that certain building (the 4500 Bohannon Building) located in the Project. The obligations of Landlord and Tenant under this Lease are expressly conditioned upon Landlord and Tenant entering into the 4500 Bohannon Lease.
IN WITNESS WHEREOF, the parties have executed this Addendum as of the date set forth below.
| LandlordMENLO OAKS PARTNERS L.P., a Delaware limited partnership | |||
| By: | AM Limited Partners, a California limited partnership, its General Partner | ||
| /t | |||
| /tr> |
| By: | Amarok Menlo, Inc., a California corporation, its General Partner | ||
| /t | |||
| /tr> |
| By: | /s/: J. Marty Brill, Jr. | |
| Name: J. Marty Brill, Jr. Its: President | ||
| /t | ||
| /tr> |
| TenantE*TRADE GROUP, INC., a Delaware corporation | |||
| By: | /s/: Len Purkis | ||
| HR noshade align=center width=100% size=2> | |||
| Name: Len Purkis Its: EVP & CFO |
| By: | /s/: Kathy Levinson | |
| Name: Kathy Levinson Its: President & COO | ||
| /t | ||
| /tr> |
Exhibit A
[FLOORPLAN APPEARS HERE]
Exhibit B
LEGAL DESCRIPTION
That certain real property situated in the City of Menlo Park , County of San Mateo, State of California, more particularly described as follows:
Parcel 1 of that Parcel map recorded December 28, 1984 in Book 55
of maps at page 52-53, San Mateo County Records.
Exhibit A
[FLOOR PLAN APPEARS HERE]
EXHIBIT C
WORK LETTER
(4200 Bohannon Drive)
This Work Letter sets forth Landlords and Tenants responsibilities, respectively, for the construction of certain tenant improvements in the Premises.
1. Defined Terms. Unless provided to the contrary herein, the following defined terms shall have the meanings set forth below and the remaining defined terms shall have the meanings set forth in the Lease:
Landlords Representative: