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CIRCLE STAR LEASE AGREEMENT
by and between
CIRCLE STAR CENTER ASSOCIATES, L.P.
("Landlord")
and
NETWORK COMPUTER, INC.
("Tenant")
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TABLE OF CONTENTS
PARAGRAPH DESCRIPTION PAGE
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BASIC LEASE INFORMATION .................................................v
1. Occupancy and Use .................................................1
2. Terms and Possession ..............................................1
3. Rent; Rent Adjustments; Additional Charges for Expenses
and Taxes .........................................................2
(A) Monthly Base Rent .............................................2
(B) Adjustments in Base Rent ......................................2
(C) Additional Charges for Expenses and Taxes .....................2
(1) Definitions of Additional Charges: ............................2
(A) "Tax Year" ....................................................2
(B) "Tenant's Share" ..............................................2
(C) "Real Estate Taxes" ...........................................2
(D) "Expenses" ....................................................3
(E) "Expense Year" ................................................4
(2) Payment of Real Estate Taxes: .................................4
(3) Payment of Expenses: ..........................................4
(4) Other: ........................................................4
(5) Audit: ........................................................4
(D) Late Charges ..................................................5
4. Restrictions on Use ...............................................5
5. Compliance with Laws ..............................................5
6. Additional Alterations.............................................6
7. Repair and Maintenance ............................................6
8. Liens .............................................................7
9. Assignment and Subletting .........................................7
10. Insurance and Indemnification .....................................9
11. Waiver of Subrogation ............................................10
12. Services and Utilities ...........................................10
13. Tenant's Certificates ............................................11
14. Holding over .....................................................11
15. Subordination ....................................................12
16. Rules and Regulations ............................................12
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17. Re-entry by Landlord .............................................12
18. Insolvency or Bankruptcy .........................................13
19. Default ..........................................................13
20. Damage by Fire, Etc ..............................................14
21. Eminent Domain ...................................................14
22. Sale by Landlord .................................................15
23. Right of Landlord to Perform .....................................15
24. Surrender of Premises ............................................15
25. Waiver ...........................................................15
26. Notices ..........................................................15
27. Taxes Payable by Tenant ..........................................16
28. Abandonment ......................................................16
29. Successors and Assigns ...........................................16
30. Attorney's Fees ..................................................16
31. Light and Air ....................................................16
32. Security Deposit .................................................16
33. Corporate Authority; Financial Information .......................17
34. Parking ..........................................................18
35. Miscellaneous.....................................................18
36. Tenant's Remedies ................................................18
37. Real Estate Brokers ..............................................18
38. Lease Effective Date .............................................18
39. Hazardous Substance Liability ....................................18
40. Arbitration of Disputes ..........................................19
41. Signage ..........................................................19
42. Option to Renew ..................................................19
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43. Rent During Extension Term .......................................19
44. Second Building...................................................20
Exhibit "A" Premises
Exhibit "B" Work Letter
Exhibit "B-I" Landlord's Plans
Exhibit "B-2" Minimum Information Required
Exhibit "C" Rules and Regulations
Exhibit "D" Form of Tenant Estoppel Certificate
Exhibit "E" Encumbrances
Exhibit "F" Form of Letter of Credit
Exhibit "G" Second Building
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BASIC LEASE INFORMATION
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Lease Date: April 27 1999
LANDLORD: CIRCLE STAR CENTER ASSOCIATES, L.P.
a California limited partnership
Managing Agent: THE MOZART DEVELOPMENT COMPANY
Landlord's and Managing Agent's Address:
c/o THE MOZART DEVELOPMENT COMPANY
1068 East Meadow Circle
Palo Alto, CA 94303
TENANT: NETWORK COMPUTER, INC.
a Delaware Corporation
Tenant's Address: Prior to Occupancy: After Commencement Date:
1000 Bridge Parkway at the Premises
Redwood Shores, CA 94065 Attn: Chief Financial Officer
Building: Two Circle Star Way, San Carlos, California
Suite: 100, 300, and 400
Rentable Area
of the Premises: First Floor: 24,696; Third Floor: 26,561; Fourth Floor:
26,561; Total: 77,818
Rentable Area
of the Building: 102,997 square feet
Tenant's Use
of the Premises: General Office and Administration, research and
development; hardware and software labs, and incidental
uses including demonstration rooms and multi-purpose
rooms.
Lease Term: Ten (10) years
Option to Terminate: See paragraph 2(e)
Scheduled
Commencement Date: August 1, 1999
Scheduled
Expiration Date: July 31, 2009
Tenant Allowance: $1,945,450 ($25 psf x 77,818 sf).
Additional Allowance: $389,090 ($5 psf x 77,818 sf).
Tenant's Plan
Delivery Date: April 21, 1999
Outside Delivery Date: December 31, 1999
Monthly Base Rent: $2.60 per Rentable Square Foot of the Rentable Area of
the Premises, provided, however, the Monthly Base Rent
for the first month (in respect of the Initial Premises)
shall be waived. The term "Initial Premises" shall mean
the premises described on Exhibit "A" prior to the
effect of any increase in the Premises that results from
an election of Tenant to lease any First Right
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Space pursuant to Paragraph 45.
Base Rent Adjustment: On each anniversary, of the Commencement Date the
Monthly Base Rent shall increase by three percent (3%)
over the Monthly Base Rent applicable to the month
immediately prior to the applicable anniversary. (Note:
there is also an initial adjustment to Monthly Base Rent
required by Paragraph 3(b)(i)).
Tenant's Share of
Expenses and Taxes
("Additional Charges"): 75.55%
Security Deposit: See Paragraph 32.
Guarantor of Lease: Oracle Corporation, a Delaware corporation
Broker: Cornish & Carey Commercial (Landlord & Tenant)
Broker's Fee or
Commission, If Any,
Paid By: Landlord
The foregoing Basic Lease Information is hereby incorporated into and made a
part of this Lease. Each reference in this Lease to any of the Basic Lease
Information shall mean the respective information hereinabove set forth and
shall be construed to incorporate all of the terms provided under the particular
paragraph pertaining to such information. In the event of any conflict between
any Basic Lease Information and the Lease, the latter shall control.
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LANDLORD:
CIRCLE STAR CENTER ASSOCIATES, L.P.
a California limited partnership
By: M-D Ventures, Inc.
Its: General Partner
By: /s/ Steve Dostart
-----------------------------
Steve Dostart
Its: Vice President
TENANT:
NETWORK COMPUTER, INC.
A Delaware corporation By:
By: /s/ Mitchell Kertzman
-----------------------------------
Mitchell Kertzman
Its: CEO & President
By: /s/ Nancy J. Hilker
-----------------------------------
Nancy J. Hilker
Its: Vice President & Chief
Financial Officer
vi
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into as of April 27, 1999, by and
between CIRCLE STAR CENTER ASSOCIATES, L.P., a California limited partnership,
(herein called "Landlord"), and NETWORK COMPUTER, INC., a Delaware corporation,
(herein called "Tenant").
Upon and subject to the terms, covenants and conditions hereinafter set
forth, Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
those premises (the "Premises") comprising the area substantially as
crosshatched on the attached Exhibit "A", in the building (hereinafter referred
to as the "Building") specified in the Basic Lease Information attached hereto.
The number of square feet designated as Rentable Area of the Premises on the
Basic Lease Information may include portions of the Building Common Area
attributed to the Premises and not located within the area outlined on Exhibit
A. Tenant acknowledges that the number of square feet of Rentable Area of the
Premises and the Building has been determined according to the measurement
standard described in the letter of Kenneth Rodriguez Associates dated September
18, 1998. The Building is located on land on which Landlord intends to develop
two buildings as an integrated project (the "Project"). The term "Common Area"
shall mean all areas and facilities within the Project that are not designated
by Landlord for the exclusive use of Tenant or any other tenant or other
occupant of the Project, including the parking areas, access and perimeter
roads, pedestrian sidewalks, landscaped areas, trash enclosures, recreation
areas and the like.
1. OCCUPANCY AND USE. Tenant may use and occupy the Premises for the
purpose specified in the Basic Lease Information and for no other use or purpose
without the prior written consent of Landlord. Landlord shall have the right to
grant or withhold consent to a proposed change of use in its sole discretion.
Tenant shall be entitled to the benefit on a nonexelusive basis of (i) the
Building Common Areas with other occupants of the Building, and (ii) to the
extent and for so long as Landlord continues to own the Project, the Project
Common Areas with other occupants of the Project in accordance with the Rules
and Regulations established by Landlord from time to time. Provided, however,
that if Landlord sells a portion of the Project, Landlord shall assure to Tenant
that Tenant's rights to access and parking are assured through a Reciprocal
Easement Agreement or other like mechanism. Notwithstanding the above, Tenant
understands and agrees that (a) a Declaration of Covenants, Conditions and
Restrictions made as of June 24, 1997 by and between Mozad, L.P.. a California
limited partnership and Homestead Village Inc., a Maryland corporation
("CC&R's"). (b) the Lease between Mozad, L.P. as Lessor and Circle Star Center
Associates, L.P. as Lessee dated as of October 15. 1997 ("Ground Lease") and (c)
a Conditional Use Permit, Office Complex, 1717 Industrial Road, San Carlos, CA
94070, effective date June 12, 1997, may encumber the Land and Project and that
Tenant's Occupancy and Use of the Premises may be restricted by such
encumbrances. If necessary, Tenant shall execute such documents as are
reasonably necessary to cause this Lease to become subordinate to such
encumbrances (see the attached Exhibit "E", Encumbrances).
2. TERM AND POSSESSION; OPTION TO TERMINATE.
(a) The term of this Lease (the "Term") shall be for the period
specified in the Basic Lease Information (or until sooner terminated as herein
provided), subject extension pursuant to Paragraph 42 and/or Paragraph
45(c)(3)(E). Subject to Tenant's termination right set forth below in this
Paragraph, if Landlord, for any reason whatsoever, cannot deliver possession of
the Premises in the condition required under this Lease (including the
Substantial Completion of the Tenant Improvements), with all governmental
permits required for the occupancy of the Premises, to Tenant on the date
specified in the Basic Lease Information for the commencement of the Term, this
Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for
any loss or damage resulting therefrom. In that event, however, the Term of the
Lease shall not commence until such commencement date as is determined pursuant
to Exhibit B. In such event, the scheduled commencement date and scheduled
expiration date shall be adjusted accordingly. Payment of Rent and Additional
Charges by Tenant due to delay in delivery of the Premises caused by Tenant
shall also be governed by Exhibit B hereof. Notwithstanding the provisions above
and of Exhibit B, if the delivery of the Premises is delayed beyond Outside
Delivery Date, as set forth in the Basic Lease Information, Tenant shall have
the right to terminate this Lease by notifying Landlord in writing of its intent
to do so no later than ten (10) business days after the Outside Delivery Date.
The Outside Delivery Date shall be extended one day for each day of
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delay caused by (i) Tenant Delays as more particularly set forth in Exhibit B
hereof and (ii) acts of God or the elements, acts of the Government, labor
disturbances of any character, a shortage of material or labor, or other causes
beyond the reasonable control of Landlord for a period up to sixty (60) days
(any of the foregoing, "Force Majeure"). The dates upon which the Term shall
actually commence and terminate pursuant to this Paragraph 2(a) are herein
called the "Commencement Date" and the "Expiration Date," respectively.
(b) Completion of the improvements to the Premises and Building
shall be governed by the terms and conditions of the separate work letter ("Work
Letter"), attached hereto as Exhibit "B".
(c) The Premises shall be deemed "delivered" and the Term shall
commence as defined in Exhibit B.
(d) Tenant shall, no later than thirty (30) days after Substantial
Completion of the Tenant Improvements, occupy a portion of the Premises or
deliver a letter to Landlord confirming that possession of the Premises has been
tendered to and accepted by Tenant and that Tenant, by virtue of such
acceptance, is in occupancy of the Premises. Time is of essence. This
subparagraph 2(d) shall not be construed as an obligation of Tenant to
continuously occupy the Premises.
(e) Tenant shall have the option to terminate this Lease with
respect to not less than all of the Initial Premises effective upon the end of
the eighth anniversary of the Commencement Date (subject to the extension of
this period pursuant to Paragraph 45(e)(3)(C)) if, and only if, Tenant provides
written notice to Landlord no less than twenty (20) months prior to the
effective date of such termination. This option to terminate shall not be
exercisable from and after Tenant's exercise of its option to renew pursuant to
Paragraph 42 below. As a condition to Tenant's termination of this Lease
pursuant to this subparagraph (e), Tenant shall pay the unamortized portion of
the Additional Allowance applicable to the Initial Premises as of the date of
such termination based upon amortization over the period commencing on the first
day of the second month of the Term and ending on the Expiration Date, with the
return of nine percent (9%) per annum. In the event Tenant exercises its option
to terminate pursuant to this paragraph, effective upon such termination all of
its rights to occupy the Initial Premises and the portions of the Project
associated therewith shall terminate including but not limited to its right to
building signage pursuant to the second sentence of Paragraph 41 and its right
to use the roof top for an Antenna pursuant to Paragraph 44.
3. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(a) Monthly Base Rent.
(i) Payment of Base Rent. Commencing on the Commencement Date
(but subject to the waiver in clause (ii) below), Tenant shall pay to Landlord
throughout the Term an amount equal to the Monthly Base Rent rate specified in
the Basic Lease Information as adjusted pursuant to Paragraph 3(b), multiplied
by the Rentable Area of the Premises, as specified in the Basic Lease
Information ("Base Rent"), which sum shall be payable by Tenant in equal monthly
installments on, or, at Tenant's election, before, the first day of each month,
in advance, in lawful money of the United States (without any prior demand
therefor and without deduction or offset whatsoever, except as expressly
provided for in Paragraphs 20 & 21) to Landlord or its managing agent at the
address specified in the Basic Lease Information or to such other firm or to
such other place as Landlord or its Managing Agent, may from time to time
designate in writing. Tenant shall pay to Landlord all charges and other amounts
whatsoever as provided in this Lease ("Additional Charges") at the place where
the Base Rent is payable, and Landlord shall have the same remedies for a
default in the payment of Additional Charges as for a default in the payment of
Base Rent. As used herein, the term "Rent" shall include all Base Rent and
Additional Charges (including, without limitation. Additional Charges for Real
Estate Taxes and Expenses pursuant to Paragraph 3(c) below, and Additional
Charges pursuant to Paragraphs 7(b), 8. 10(d) and 23). If the Commencement Date
should occur on a day other than the first day of a calendar month, or the
Expiration Date should occur on a day other than the last day of a calendar
month, then the Rent and Additional Charges for such fractional month shall be
prorated on a daily basis.
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(ii) Partial Waiver of Monthly Base Rent. Landlord shall waive
the Monthly Base Rent for the first month (in respect of the Initial Premises)
of the Term.
(b) Adjustments in Monthly Base Rent.
(i) Adjustment for Additional Allowance. Effective as of the
first day of the second month of the Term, the initial Monthly Base Rent shall
be increased by $12.73 per $1,000 of the Additional Allowance drawn by Tenant
pursuant to the Work Letter.
(ii) Annual Adjustment. The Monthly Base Rent under Paragraph
3(a) (excluding the amount payable pursuant to Paragraph 3(b)(i)), shall be
adjusted as provided in the Basic Lease Information under the "Base Rent
Adjustment".
(c) Additional Charges for Expenses and Taxes.
(1) Definitions of Additional Charges: For purposes of this
Paragraph 3(c), the following terms shall have the meanings hereinafter set
forth:
(A) "Tax Year" shall mean each twelve (12) consecutive
month period commencing January 1st of the calendar year during which the
Commencement Date of this Lease occurs, provided that Landlord, upon
notice to Tenant, may change the Tax Year from time to time to any other
twelve (12) consecutive month period and, in the event of any such change,
Tenant's Share of Real Estate Taxes (as hereinafter defined) shall be
equitably adjusted for the Tax Years involved in any such change.
(B) "Tenant's Share" shall mean the percentage figure so
specified in the Basic Lease Information.
(C) "Real Estate Taxes" shall mean all taxes,
assessments and charges levied upon or with respect to the Project or any
personal property of Landlord used in the operation of thereof, or
Landlord's interest in the Project or such personal property. Real Estate
Taxes shall include, without limitation, all general real property taxes
and general and special assessments, charges, fees or assessments for
transit, housing, police, fire or other governmental services or purported
benefits to the Building (provided, however, that any refunds of Real
Estate Taxes paid by Tenant (as part of Tenant's Share of Real Estate
Taxes) shall be credited against Tenant's further obligation to pay Real
Estate Taxes during the Term, or paid to Tenant if received after
expiration of the Term), service payments in lieu of taxes, and any tax,
fee or excise on the act of entering into this Lease, or any other lease
of space in the Building, or on the use or occupancy of the Building or
any part thereof, or on the rent payable under any lease or in connection
with the business of renting space in the Building, that are now or
hereafter levied or assessed against Landlord by the United States of
America, the State of California, or any political subdivision, public
corporation, district or any other political or public entity, and shall
also include any other tax, fee or other excise, however described, that
may be levied or assessed as a substitute for, or as an addition to, in
whole or in part, any other Real Estate Taxes, whether or not now
customary or in the contemplation of the parties on the date of this
Lease. Real Estate Taxes shall not include franchise, transfer,
inheritance or capital stock taxes, gift or estate taxes, any assessments
in excess of the amount which would be payable if such tax or assessment
expense were paid in installments over the longest permitted term, any
increases in taxes due to the improvement of the Project for the sole use
of other occupants, or income taxes measured by the net income of Landlord
from all sources unless, due to a change in the method of taxation, any of
such taxes is levied or assessed against Landlord as a substitute for, in
whole or in part, any other tax that would otherwise constitute a Real
Estate Tax. Additionally, Real Estate Taxes shall not include any
assessments or like charges to pay for any remediation of contamination
from any Hazardous Substance (which are not the liability of Tenant
pursuant to Paragraph 39 hereof). Real Estate Taxes shall also include
reasonable legal fees, costs and disbursements incurred in connection with
proceedings to contest, determine or reduce Real Estate Taxes: provided
that such fees, costs and disbursements do not
3
exceed the actual savings in Real Estate Taxes obtained by Tenant over the
Term Of the Lease. If any assessments are levied on the Project, Tenant
shall have no obligation to pay more than that amount of annual
installments of principal and interest that would become due during the
Lease Term had Landlord elected to pay the assessment in installment
payments, even if Landlord pays the assessment in full. From and after
commencement of construction of the Second Building (as defined in
Paragraph 45 below) Real Estate Taxes shall be adjusted so as to exclude
any taxes attributable to the construction of such Second Building during
the period of construction thereof. Upon completion of construction of the
Second Building, Real Estate Taxes shall include only the Building's Share
(as defined below) thereof.
(D) "Expenses" shall mean the total costs and expenses
reasonably paid or incurred by Landlord in connection with the management,
operation, maintenance and repair of the Building, including, without
limitation (i) the cost of air conditioning, electricity, steam, heating,
mechanical, ventilating, elevator systems and all other utilities and the
cost of supplies and equipment and maintenance and service contracts in
connection therewith; (ii) the cost of repairs and general maintenance and
cleaning; (iii) the cost of fire, extended coverage, boiler, sprinkler,
public liability, property damage, rent, earthquake (if Landlord
determines that it is available at commercially reasonable rates) and
other insurance obtained by Landlord in connection with the Project, all
including, without limitation, insurance premiums and any deductible
amounts paid by Landlord; (iv) fees, charges and other costs, including
management fees, consulting fees, legal fees (which are allowed elsewhere
in the Lease) and accounting fees of all independent contractors engaged
by Landlord directly related to the operation of the Building or
reasonably charged by Landlord if Landlord performs management services in
connection with the Building, (though the management fee shall not exceed
the cap noted in the following paragraph); (v) the cost of any capital
improvements made to the Building after the Commencement Date (a) as a
labor saving device or to effect other economies in the operation or
maintenance of the Building (from which a reasonable person would
anticipate that savings would actually result), (b) to repair or replace
capital items which are no longer capable of providing the services
required of them, or (c) that are made to the Building after the date of
this Lease and are required under any Laws (as defined in Paragraph 5),
where such capital improvements were not required under any such Laws to
be completed with respect to the Building prior to the date the Lease was
executed, and the cost of any such capital improvements incurred during
any calendar year, shall be amortized over the useful life (but not more
than ten years) of the capital item in question as determined in
accordance with generally accepted accounting principles ("GAAP"),
together with interest on the unamortized balance at (x) the rate paid by
Landlord on funds borrowed for the purpose of constructing such capital
improvements; or (y) if paid from Landlord's own funds, 10% per annum;
provided, however, the first $.24 per square foot of the Rentable Area of
the Premises of such cost of capital improvements may be included in
Expenses even if such amount exceeds the foregoing amortization and any
remaining balance of the cost of such capital improvements shall be
amortized in accordance with the foregoing (such amortization to commence
in the year following the year in which the $.24 was taken as an expense
item); and (vi) any other reasonable expenses of any other kind whatsoever
reasonably incurred in managing, operating, maintaining and repairing the
Building, including, but not limited to, costs incurred pursuant to the
Encumbrances identified in Exhibit "E" and the Building's Share of Project
Common Expenses. "Project Common Expenses" shall mean any expenses
reasonably paid or incurred by Landlord in connection with the management,
operation, maintenance and repair of the Project Common Areas in the
Project and any other Expenses reasonably paid or incurred by Landlord for
the benefit of the Project as a whole, including, but not limited to, the
cost of maintaining the parking lot and facilities and landscaping.
"Building's Share" shall mean the pro rata portion of all Project Common
Expenses based on the amount of gross floor area of the Building as a
portion of the gross floor area of all applicable buildings in the
Project, all as reasonably determined by Landlord. Any "deductible"
amounts relating to capital improvements required to be paid by Tenant
hereunder in connection with any casualty policy carried by Landlord shall
be amortized over the useful life of the restoration work in accordance
with GAAP; provided, however, such amounts shall no longer constitute
Expenses from and after the date upon which Monthly Base Rent is adjusted
to fair market rental pursuant to the terms and conditions of this Lease.
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Notwithstanding anything to the contrary herein contained, Expenses shall
not include, and in no event shall Tenant have any obligation to pay for
pursuant to this Paragraph 3 or Paragraph 7(b), (aa) the initial
construction cost of the Project or real property on which the Building is
located; (bb) the cost of providing tenant improvements, renovations,
painting or redecorating (other than in Common Areas) to Tenant or any
other tenant; (cc) any Base Monthly Rental or Percentage Rental payable
pursuant to the Ground Lease and/or debt service (including, but without
limitation, interest, principal and any impound payments) required to be
made on any mortgage or deed of trust recorded with respect to the
Building and/or the real property on which the Building is located other
than debt service and financing charges imposed pursuant to Paragraph
3(c)(l)(D)(v) above; (dd) the cost of special services, goods or materials
provided to any tenant; (ee) depreciation; (ff) the portion of a
management fee paid to Landlord or affiliate in excess of three percent (3
%) of Base Rent and Additional Charges (excluding the management fee);
(gg) the portion of a management fee paid in excess of two percent (2%) of
Base Rent and Additional Charges (excluding the management fee) if Tenant
manages all services (eg. janitorial, HVAC, security, etc.) in respect of
its Premises; (hh) costs occasioned by Landlord's fraud or willful
misconduct under applicable laws; (ii) costs for which Landlord has a
right of reimbursement from others (jj) costs to correct any construction
or design defects in the original construction of the Premises, the
Building or the Project; (kk) costs arising from a disproportionate use of
any utility or service supplied by Landlord to any other occupant of the
Building; (ll) repairs, replacement and upgrades to the structural
elements of the Building (including foundation, floor slabs, exterior
wails and roof structure); (mm) environmental pollution remediation
related costs in connection with the remediation of the Project including
costs for which Landlord has indemnified Tenant pursuant to Paragraph 39,
except any such costs incurred as the result of Tenant's use of the
Premises; (nn) advertising or promotional costs; (oo) leasing
commissions; (pp) except as provided in Paragraph 20, costs occasioned by
casualties or by the exercise of the power of eminent domain (other than
deductible amounts under insurance policies which shall be included as an
Expense); and (qq) legal costs incurred in connection with negotiations or
disputes with any other occupant (or prospective occupant) of the Project.
In the event that the Building or the Project is not at least ninety-five
percent (95.%) occupied during any fiscal year of the Term as determined
by Landlord, an adjustment shall be made in computing the Expenses and/or
the Project Common Expenses, as applicable, for such year so that Expenses
and/or Project Common Expenses, as applicable, which vary with occupancy
shall be computed as though the Building or Project, as applicable, had
been ninety-five percent (95 %) occupied provided, however, that in no
event shall Landlord be entitled to collect in excess of one hundred
percent (100%) of the total Expenses from all of the tenants in the
Building including Tenant. All costs and expenses shall be determined in
accordance with generally accepted accounting principles which shall be
consistently applied (with accruals appropriate to Landlord's business).
Expenses shall not include specific costs incurred for the account of,
separately billed to specific tenants.
(E) "Expense Year" shall mean each twelve (12)
consecutive month period commencing January 1 of the calendar year during
which the Commencement Date of the Lease occurs, provided that Landlord,
upon notice to Tenant, may change the Expense Year from time to time to
any other twelve (12) consecutive month period, and, in the event of any
such change, Tenant's Share of Expenses shall be equitably adjusted for
the Expense Years involved in any such change.
(2) Payment of Real Estate Taxes: Commencing on the
Commencement Date, unless otherwise provided for in Paragraph 3 (a), Tenant
shall pay to Landlord as Additional Charges one-twelfth (1/12th) of Tenant's
Share of Real Estate Taxes fairly allocable to the Building as reasonably
determined by Landlord for each Tax Year on or before the first day of each
month during such Tax Year, in advance, in an amount reasonably estimated by
Landlord and billed by Landlord to Tenant, and Landlord shall have the right
initially to determine monthly estimates and to revise such estimates from time
to time. With reasonable promptness after Landlord has received the tax bills
for any Tax Year, Landlord shall furnish Tenant with a statement (herein called
"Landlord's Tax Statement") setting forth the amount of Real Estate Taxes for
such Tax Year, and Tenant's Share thereof. If the actual Tenant's Share of Real
Estate Taxes for such Tax Year exceed the estimated Real Estate Taxes paid by
Tenant for such Tax Year, Tenant shall pay to Landlord the difference between
the amount paid by Tenant and the actual Real Estate Taxes within twenty (20)
days after the receipt of Landlord's Tax Statement, and if the total amount paid
by Tenant for any such Tax Year shall exceed
5
the actual Tenant's Share of Real Estate Taxes for such Tax Year, such excess
shall be credited against the next installment of Real Estate Taxes due from
Tenant to Landlord hereunder. If it has been determined that Tenant has overpaid
Real Estate Taxes during the last year of the Lease Term, then Landlord shall
reimburse Tenant for such overage on or before the twentieth (20th) day
following the Expiration Date. Upon Tenant's written request, Landlord will
provide an explanation of any allocation of taxes made by Landlord among
different parts of the Project.
(3) Payment of Expenses: Commencing on the Commencement Date,
unless otherwise provided for in Paragraph 3(a), Tenant shall pay to Landlord as
Additional Charges one-twelfth (1/12th) of Tenant's Share of the Expenses for
each Expense Year on or before the first day of each month of such Expense Year,
in advance, in an amount reasonably estimated by Landlord and billed by Landlord
to Tenant, and Landlord shall have the right initially to determine monthly
estimates and to revise such estimates from time to time. With reasonable
promptness after the expiration of each Expense Year, Landlord shall furnish
Tenant with a statement (herein called "Landlord's Expense Statement"), setting
forth in reasonable detail the Expenses for such Expense Year and Tenant's Share
thereof. If the actual Expenses for such Expense Year exceed the estimated
Expenses paid by Tenant for such Expense Year, Tenant shall pay to Landlord the
difference between the amount paid by Tenant and the actual Tenant's Share of
Expenses within twenty (20) days after the receipt of Landlord's Expense
Statement, and if the total amount paid by Tenant for any such Expense Year
shall exceed the actual Tenant's Share of Expenses for such Expense Year, such
excess shall be credited against the next installment of the estimated Expenses
due from Tenant to Landlord hereunder or if the Term has ended it shall be
returned to Tenant within twenty (20) days. Any utility rebates for the Project
which Landlord receives for payments made by Tenant (as part of Tenant's Share
of Expenses) shall be forwarded to Tenant so long as such rebate is received
within one year following the Expiration Date or sooner termination of the
Lease. If it has been determined that Tenant has overpaid Expenses during the
last year of the Lease Term (including rebates of utilities applicable to
Tenant), then Landlord shall reimburse Tenant for such overage on or before the
twentieth (20th) day following the Expiration Date. Upon Tenant's written
request, Landlord will explain any "gross-up" of expenses and the allocation of
any particular item of expense among different parts of the Project.
(4) Other: To the extent any item of Real Estate Taxes or
Expenses is payable by Landlord in advance of the period to which it is
applicable (e.g. insurance and tax escrows required by Landlord's Lender), or to
the extent that prepayment is customary for the service or matter, Landlord may
(i) include such items in Landlord's estimate for periods prior to the date such
item is to be paid by Landlord and (ii) to the extent Landlord has not collected
the full amount of such item prior to the date such item is to be paid by
Landlord, Landlord may include the balance of such full amount in a revised
monthly estimate for Additional Charges. If the Commencement Date or Expiration
Date shall occur on a date other than the first day of a Tax Year and/or Expense
Year, Tenant's share of Real Estate Taxes and Expenses, for the Tax Year and/or
Expense Year in which the Commencement Date occurs shall be prorated.
(5) Audit: Within twelve (12) months after receipt of any
Expense Statement or Tax Statement from Landlord, Tenant shall have the right to
examine Landlord's books and records, copies of which shall be maintained in the
San Francisco, Bay Area, relating to such Expense Statements and Tax Statements,
or cause an independent audit thereof to be conducted by an accounting firm to
be selected by Tenant and subject to the reasonable approval of Landlord, If the
audit conclusively proves that Tenant has overpaid either Expenses or Real
Estate Taxes, then Landlord shall promptly reimburse Tenant for such overage,
and if such overage exceeds five percent (5%) of the actual amount of Expenses
or Real Estate Taxes paid by Landlord for the Tax or Expense Year covered by
such audit, then Landlord shall bear the reasonable cost of such audit, up to a
maximum cost of $10,000. If Tenant fails to object to any such Expense Statement
or Tax Statement or request an independent audit thereof within such twelve (12)
month period, such Expense Statement and/or Tax Statement shall be final and
shall not be subject to any audit, challenge or adjustment.
(d) Late Charges. Tenant recognizes that late payment of any Base
Rent or Additional Charges will result in administrative expenses to Landlord,
the extent of which additional expense is extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if any Base Rent or
Additional Charges remain unpaid three (3) days after such amount is due, the
amount of such unpaid Base Rent or
6
Additional Charges shall be increased by a late charge to be paid to Landlord by
Tenant in an amount equal to four percent (4%) of the amount of the delinquent
Base Rent or Additional Charges. Tenant shall be excused once each twelve (12)
month period of the Term from the application of a late fee to any Base Rent or
Additional Charge which became delinquent without a prior written invoice or
other notice of Landlord of such delinquency: provided, however, the late fee
shall nevertheless be payable if Tenant does not cure the delinquency within ten
(10) days after written notice from Landlord. In addition, any outstanding Base
Rent, Additional Charges, late charges and other outstanding amounts shall
accrue interest at an annualized rate of the lesser of (i) the greater of, 10%
or The Federal Reserve Discount Rate plus 5%, or (ii) the maximum rate permitted
by law (the "Default Rate"), until paid to Landlord. Tenant agrees that such
amount is a reasonable estimate of the loss and expense to be suffered by
Landlord as a result of such late payment by Tenant and may be charged by
Landlord to defray such loss and expense. The provisions of this Paragraph 3(d)
in no way relieve Tenant of the obligation to pay Rent or Additional Charges on
or before the date on which they are due, nor do the terms of this Paragraph
3(d) in any way affect Landlord's remedies pursuant to Paragraph 19 in the event
any Base Rent or Additional Charges are unpaid after the date due.
4. RESTRICTIONS ON USE. Tenant shall not do or permit anything to be done
in or about the Premises which will unreasonably obstruct or interfere with the
rights of other tenants or occupants of the Building or the Project or injure or
annoy them, nor use or allow the Premises to be used for any unlawful purpose,
nor shall Tenant cause or maintain or permit any nuisance in, on or about the
Premises. Tenant shall not commit or suffer the commission of any waste in, on
or about the Premises.
5. COMPLIANCE WITH LAWS.
(a) Tenant's Compliance Obligations. Tenant shall not use the
Premises or permit anything to be done in or about the Premises which will in
any way conflict with any present and future laws, statutes, ordinances,
resolutions, regulations, proclamations, orders or decrees of any municipal,
county, state or federal government or other governmental or regulatory
authority with jurisdiction over the Project, or any portion thereof, whether
currently in effect or adopted in the future and whether or not in the
contemplation of the parties hereto (collectively, "Laws"), and Tenant shall
promptly, at its sole expense, maintain the Premises, any Alterations (as
defined in Paragraph 6 below) permitted hereunder and Tenant's use and
operations thereon in strict compliance at all times with all Laws. "Laws" shall
include, without limitation, all Laws relating to health and safety (including,
without limitation, the California Occupational Safety and Health Act of 1973 an
the California Safe Drinking Water and Toxic Enforcement Act of 1986, including
posting and delivery of notices required by such Laws with respect to the
Premises) and disabled accessibility (including, without limitation, the
Americans with Disabilities Act, 42 U.S.C. Paragraph 12101 et seq.), Hazardous
Substances, and all present and future life safety, fire, sprinkler, seismic
retrofit, building code and municipal code requirements' provided however, that
Tenant's obligation to comply with Laws relating to Hazardous Substances is
subject to the terms and conditions of Paragraph 39, and Tenant shall not be
responsible for compliance with clean-up provisions of any Laws with respect to
Hazardous Substances except to the extent of any release caused by the Tenant
Parties or otherwise included in Tenant's indemnity contained in Paragraph 39.
Notwithstanding the foregoing, Landlord, and not Tenant, shall be responsible
for correcting any condition at the Premises which is in violation of applicable
Laws on or prior to the Commencement Date, except to the extent such condition
is caused by the acts or omissions of the Tenant Parties or such violation
results from Tenant's use of the Premises in a manner other than as permitted
trader this Lease. Notwithstanding the first sentence of this Paragraph 5(a),
Tenant shall not be required to make any alterations to the Premises in order to
comply with Laws unless the requirement that such alterations be made is
triggered by any of the following (or, if such requirement results from the
cumulative effect of any of the following when added to other acts, omissions,
negligence or events, to the extent such alterations are required by any of the
following): (i) the installation, use or operation of any Alterations, or any of
Tenant's trade fixtures or personal property; (ii) the acts, omissions or
negligence of Tenant, or any of its servants, employees, contractors, agents or
licensees; or (iii) the particular use or particular occupancy or manner of use
or occupancy of the Premises by Tenant, or any of its servants, employees,
contractors, agents or licensees (as opposed to the use of the Premises for
general office use). Any alterations that are Tenant's responsibility pursuant
to this Paragraph 5 shall be made in accordance with Paragraph 6 below. The
parties acknowledge and agree that Tenant's obligation to comply with all Laws
as provided in this paragraph (subject to the limitations contained herein) is a
material part of the bargained-for
7
consideration under this Lease. Tenant's obligations under this Paragraph and
under Paragraph 7(c) below shall include, without limitation, the responsibility
of Tenant to make substantial or structural repairs and alterations to the
Premises to the extent provided above, regardless of, among other factors, the
relationship of the cost of curative action to the Rent under this Lease, the
length of the then remaining Term hereof, the relative benefit of the repairs to
Tenant or Landlord, the degree to which the curative action may interfere with
Tenant's use or enjoyment of the Premises, and the likelihood that the parties
contemplated the particular Law involved.
(b) Insurance Requirements. Tenant shall not do or permit anything
to be done in or about the Premises or bring or keep anything therein which will
in any way increase the rate of any insurance upon the Project or any of its
contents (unless Tenant agrees to pay for such increase) or cause a cancellation
of any insurance on the Project or otherwise violate any requirements,
guidelines, conditions, rules or orders with respect to such insurance. Tenant
shall at its sole cost and expense promptly comply with the requirements of the
ISO, board of fire underwriters, or other similar body now or hereafter
constituted relating to or affecting Tenant's use or occupancy of the Project
(other than in situations where compliance involves repair, maintenance or
replacement of items that Landlord is expressly required to repair, maintain or
replace under this Lease).
(c) No Limitation on Obligations. The provisions of this Paragraph 5
shall in no way limit Tenant's maintenance, repair and replacement obligations
under Paragraph 7 or Tenant's obligation to pay Expenses under Paragraph 3(c).
The judgment of any court of competent jurisdiction or the admission of Tenant
in an action against Tenant, whether Landlord is a party thereto or not, that
Tenant has so violated any such Law shall be conclusive of such violation as
between Landlord and Tenant.
6. ADDITIONAL ALTERATIONS. Tenant shall not make or suffer to be made any
additional alterations, additions or improvements ("Alterations") in, on or to
the Premises or any part thereof without the prior written consent of Landlord.
Landlord shall not unreasonably delay its processing of Tenant's written request
for such request. Tenant's written request for consent shall contain the
following language in bold print: "This request is made pursuant to Paragraph 6
of the Lease and requires a response within a reasonable time". Any alterations
in, on or to the Premises, except for Tenant's movable furniture and equipment
(including the telephone system, security system, demountable partitions,
secretarial stations, cubicles, cabinets or shelving systems and kitchen
equipment, except to the extent paid for with the Tenant Improvement Allowance
or Additional Allowance), shall be the property of Tenant during the Term and
shall become Landlord's property at the end of the Term without compensation to
Tenant. Landlord shall not unreasonably withhold its consent to Alterations that
(i) do not materially affect the structure of the Building or its electrical,
plumbing, HVAC. security or other systems, (ii) are not visible from the
exterior of the Premises, (iii) are consistent with Tenant's permitted use
hereunder, and (iv) do not adversely affect the value or marketability of
Landlord's reversionary interest upon termination or expiration of this Lease.
In the event Landlord consents to the making of any Alterations by Tenant, the
same shall be made by Tenant, at Tenant's sole cost and expense, in accordance
with plans and specifications reasonably approved by Landlord, and any
contractor or person selected by Tenant to make the same must first be
reasonably approved in writing by landlord. Upon the expiration or sooner
termination of the Term, Tenant shall upon demand by Landlord, at Landlord's
election either (x) at Tenant's sole cost and expense, forthwith and with all
due diligence remove any Alterations made by or for the account of Tenant,
designated by Landlord to be removed (provided, however, that upon the written
request of Tenant prior to installation of such Alterations, Landlord shall
advise Tenant at that time whether or not such Alterations must be removed upon
the expiration or sooner termination of this Lease), and restore the Premises to
its original condition as of the Commencement Date, subject to normal wear and
tear and the rights and obligations of Tenant concerning casualty damage
pursuant to Paragraph 20 or (y) pay Landlord the reasonable estimated cost
thereof; provided, however, if Tenant wishes to proceed pursuant to clause (x)
it may do so if it completes all such work prior to the expiration or
termination of the Term.
Notwithstanding the foregoing Tenant shall be permitted to make Alterations
without Landlord's prior written consent if all of the following conditions are
met:
(A) The Alterations meet the conditions specified in clauses
(i)-(iii) above;
8
(B) Tenant provides Landlord at least twenty (20) days prior written
notice of the commencement of construction of such Alterations
together with the plans and specifications for such Alterations;
(C) Such Alterations are constructed by Devcon Construction;
(D) Such Alterations are consistent with the floor plan of the floor
of the Premises being altered; and
(E) The total cost of such Alterations when taken together with all
Alterations constructed by Tenant in reliance upon this provision
(allowing construction without Landlord's prior written approval)
over the prior 24 months, does not exceed $50,000.
7. REPAIR AND MAINTENANCE.
(a) Landlord shall be responsible for the following repair,
replacement and maintenance obligations: (i) maintenance and repair of the
exterior of the Building, roof (including roof membrane) and structural portions
of the Building, (ii) repairs, replacement, and maintenance of the Building
systems, including, without limitation, electrical, mechanical, HVAC and
plumbing and all controls appurtenant thereto, (iii) repairs, replacement and
maintenance of any elevators in the Building, (iv) repair, replacement and
maintenance of Common Areas, (v) alterations to the Premises required under
applicable Laws to the extent not the responsibility of Tenant pursuant to
Paragraph 5 or 6 hereof, (vi) any repair, maintenance or improvements which
could be treated as a "capital expenditure" under generally accepted accounting
principles, (vii) any repair, maintenance or improvements which are a result of
casualty or the exercise of the power of eminent domain which are Landlord's
responsibility under Paragraph 20 or 21, (viii) repairs and replacements of
lighting equipment (including light bulbs), (ix) any repair, maintenance or
improvements which are required as a consequence of construction defects in
Landlord's work or the Tenant Improvements, (x) any repair, maintenance or
improvements for which Landlord has a right of reimbursement from others. As
part of Landlord's maintenance of the building systems, Landlord shall implement
and carry out throughout the term of this Lease an ongoing program of regular
and preventative maintenance of all building systems (such program to include
the periodic replacement of HVAC filters in accordance with manufacturers'
specifications and the monitoring of HVAC systems settings (i.e., percentage of
outside air to ensure compliance with the specifications of the equipment
manufacturers and the design of the HVAC system)) and shall in any event cause
the Building HVAC system and indoor air quality of the Common Areas within the
Building and the Premises to meet for the entire term of this Lease the
standards set forth in Standard 62-1989 ("Ventilation for Acceptable Indoor Air
Quality"), including both the requirements of the Ventilation Rate Procedure and
Indoor Air Quality Procedure and the maintenance requirements, recommendations
and guidelines contained therein, promulgated by the American Society of
Heating, Refrigerating and Air Conditioning Engineers ("ASHRAE"), and any
applicable laws, ordinances, rules air regulations now in effect or thereafter
promulgated by any governmental authority having jurisdiction over the Building
or persons occupying or working in the Building relating to office building
indoor air quality (collectively, the "Indoor air Quality Standard"). Landlord
shall make available to Tenant Landlord's records evidencing such maintenance
efforts by Landlord, and Landlord shall cooperate with Tenant's efforts to
monitor and to maintain the Indoor Air Quality Standard in the Premises. Tenant
shall have the right, from time to time, to test the air quality within the
Premises; if at any time air within the Premises or a portion thereof is
determined to contain carbon dioxide in excess of 1,000 parts per million (PPM)
(or such lesser amount as may then violate the applicable Indoor Air Quality
Standard), at Tenant's request, Landlord will promptly make such adjustments or
alterations to the ventilation system serving the Premises as are reasonably
necessary to be performed which will increase ventilation in the Premises such
that carbon dioxide levels in the Premises are in compliance with the Indoor Air
Quality Standard. Notwithstanding the foregoing, Tenant shall be responsible for
Tenant's Share of the costs described in this paragraph to the extent such costs
are properly included in Expenses.
(b) Tenant shall maintain and repair the interior portion of the
Premises and any Alterations installed by or on behalf of Tenant within the
Premises, however, excluding any portions thereof which are structural in nature
or which are the obligation of Landlord under Paragraph 7(a) (subject to
Paragraphs 5 and
9
7(c)). Tenant shall be responsible for the expense of installation, operation,
and maintenance of its telephone and other communications cabling from the point
of entry into the Building to the Premises and throughout the Premises' though
Landlord shall have the right to perform such work on behalf of Tenant in Common
Areas. Tenant hereby waives and releases its right to make repairs at Landlord's
expense under Paragraphs 1941 and 1942 of the California Civil Code or under any
similar law, statute or ordinance now or hereafter in effect. In addition,
Tenant hereby waives and releases its right to terminate this Lease under
Paragraph 1932(1) of the California Civil Code or under any similar law statute
or ordinance now or hereafter in effect. If Tenant fails after thirty (30) days'
written notice by Landlord to proceed with due diligence to make repairs
required to be made by Tenant, the same may be made by Landlord at the expense
of Tenant and the expenses thereof incurred by Landlord shall be reimbursed
(with interest at the Default Rate from the date Landlord incurs such cost) as
Additional Charges within thirty (30) days after submission of a bill or
statement therefor.
(c) The purpose of Paragraph 7(a) and 7(b) is to define the
obligations of Landlord and Tenant to perform various repair and maintenance
functions; the allocation of the costs therefor are covered under this Paragraph
7(e) and Paragraph 3. Tenant shall bear the full cost of repairs or maintenance
interior or exterior, structural or otherwise, to preserve the Premises and the
Building in good working order and condition, arising out of (i) the existence,
installation, use or operation of any Alterations, or any of Tenant's trade
fixtures or personal property; (ii) the moving of Tenant's property or fixtures
in or out of the Building or Project or in and about the Premises; or (iii)
except to the extent any claims arising from any of the foregoing are reimbursed
by insurance carried by Landlord, are covered by the waiver of subrogation in
Paragraph 11 or are otherwise provided for in Paragraph 20, the acts, omissions
or negligence of Tenant, or any of its servants, employees, contractors, agents,
visitors, or licensees, or the particular use or particular occupancy or manner
of use or occupancy of the Premises by Tenant or any such person (as opposed to
general office use). Any Alterations required with respect to Tenant's
responsibilities pursuant to this Paragraph 7(c) shall be made in accordance
with Paragraph 6.
(d) Except to the extent any claims arising from any of the
foregoing are reimbursed by rental abatement insurance carried by Landlord, are
covered by the waiver of subrogation in Paragraph 11 or are otherwise provided
for in Paragraph 20, there shall be no abatement of Rent with respect to, and
except for Landlord's active negligence or willful misconduct, Landlord shall
not be liable for any injury to or interference with Tenant's business arising
from, any repairs, maintenance, alteration or improvement in or to any portion
of the Building, including the Premises, or in or to the fixtures, appurtenances
and equipment therein.
8. LIENS. Tenant shall keep the Premises free from any liens arising out
of any work performed, material furnished or obligations incurred by Tenant. In
the event that Tenant shall not, within thirty (30) days after Tenant receives
actual notice of the imposition of any such lien, cause the same to be released
of record by payment or posting of a proper bond, Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but not
the obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All such sums
paid by Landlord and all expenses incurred by it in connection therewith shall
be considered Additional Charges and shall be payable to it by Tenant on demand
with interest at the Default Rate. Landlord shall have the right at all times to
post and keep posted on the Premises any notices permitted or required by law,
or which Landlord shall deem proper, for the protection of Landlord, the
Premises, the Building and any other party having an interest therein, from
mechanics' and materialmen's liens, and Tenant shall give notice to Landlord at
least five (5) business days' prior notice of commencement of any construction
on the Premises.
9. ASSIGNMENT AND SUBLETTING.
(a) Tenant shall not directly or indirectly, voluntarily or by
operation of law, sell, assign, encumber, pledge or otherwise transfer or
hypothecate all or any part of the Premises or Tenant's leasehold estate
hereunder (collectively, "Assignment"), or permit the Premises to be occupied by
anyone other than Tenant or sublet the Premises or any portion thereof
(collectively, "Sublease"), without Landlord's prior written consent in each
instance, which consent shall not be unreasonably withheld or delayed by
Landlord. Without otherwise limiting the criteria upon which Landlord may
withhold its consent to any proposed Sublease or Assignment, if Landlord
withholds its consent where either (i) the creditworthiness of the proposed
Sublessee or
10
Assignee (given to financial obligations of the proposed Sublease or Assignment)
is not reasonably acceptable to Landlord or, (ii) the proposed Sublessee's or
Assignee's use of the Premises is not in compliance with the allowed Tenant's
Use of the Premises as described in the Basic Lease Information, such
withholding of consent shall be presumptively reasonable. If Landlord consents
to the Sublease or Assignment, Tenant may thereafter enter into a valid Sublease
or Assignment upon the terms and condition set forth in this Paragraph 9.
Notwithstanding anything to the contrary herein, unless and until the Guaranty
of this Lease by Oracle Corporation terminates pursuant to Paragraph 22(a)
thereof, Landlord shall have no obligation to consent to any Sublease or
Assignment or to respond to any request by Tenant for approval thereto, unless
and until Landlord receives written approval by Oracle Corporation of the
proposed Sublease or Assignment executed by an Authorized Officer of Oracle
Corporation which includes the identity of the proposed sublessee or assignee,
in substantially the following form:
Oracle Corporation, as Guarantor of the obligations of the
tenant under that certain Lease dated April ___, 1999 by and
between Circle Star Center Associates, L.P. as Landlord, and
Network Computer, Inc. as Tenant, for the benefit of Landlord
hereby approves the proposed [sublease or assignment] of
[describe the portion of Premises subleased and term of
sublease or the entire Premises and entire term if an
assignment] to [identify proposed sublessee or assignee].
Oracle Corporation hereby confirms to Landlord and its
successors and assigns that the Guaranty by Oracle Corporation
of the obligations under the above mentioned Lease shall
remain in full force and effect notwithstanding the proposed
[sublease or assignment].
Oracle Corporation
__________________
By: ______________
Its: _____________
The term "Authorized Officer" shall have the meaning given in Paragraph 45
below. The above referenced approval of Oracle Corporation shall be accompanied
by an incumbency certificate signed by the Secretary or Assistant Secretary of
Oracle Corporation certifying that the person signing the above referenced
approval on behalf of Oracle Corporation is a corporate officer of Oracle
Corporation holding one of the offices constituting an Authorized Officer.
(b) If Tenant desires at any time to enter into an Assignment of
this Lease or a Sublease of the Premises or any portion thereof, it shall first
give written notice to Landlord of its desire to do so, which notice shall
contain (i) the name of the proposed assignee, subtenant or occupant; (ii) the
name of the proposed assignee's, subtenant, or occupant's business to be carried
on in the Premises; (iii) the terms and provisions of the proposed Assignment or
Sublease; (iv) such financial information as Landlord may reasonably request
concerning the proposed assignee, subtenant or occupant; and (v) the following
language in bold print: "This request is made pursuant to Paragraph 9(b) of the
Lease and requires a response within fifteen (15) days from the date of this
notice".
(c) At any time within fifteen (15) days after Landlord's receipt of
the notice specified in Paragraph 9(b), Landlord may by written notice to Tenant
elect to (i) consent to the Sublease or Assignment or (ii) disapprove the
Sublease or Assignment.
11
If Landlord consents to the Sublease or Assignment within said
fifteen (15) day period, Tenant may thereafter within one hundred twenty (120)
days after Landlord's consent, but not later than the expiration of said one
hundred twenty (120) days, enter into such Assignment or Sublease of the
Premises or portion thereof upon the terms and conditions set forth in the
notice furnished by Tenant to Landlord pursuant to Paragraph 9(b). However,
during any period of time in which Tenant directly occupies less than
seventy-five percent (75 %) of the Premises (regardless of whether such
occupancy threshold is not met at the time the Sublease is entered into or at
any time during the term of such Sublease), fifty percent (50%) of any rent or
other consideration realized by Tenant under any such Sublease in excess of the
Base Rent and Additional Charges payable hereunder (or the amount thereof
proportionate to the portion of the Premises subject to such Sublease) shall be
paid to Landlord ("Bonus Rent"), after first deducting from such excess the
unamortized costs of any portion of the Tenant Improvements paid for by Tenant
(and not from the Tenant Improvement Allowance or Additional Allowance) or costs
reasonably incurred for tenant improvements installed by Tenant to obtain the
Sublease in question, each of which are installed in that portion of the
Premises which is the subject of the Sublease and which unamortized costs shall
be amortized on a straight line basis (without interest) over the term of the
Sublease in equal installments, and after deducting therefrom any customary
brokers' commissions that Tenant has incurred in connection with such Sublease
amortized on a straight line basis (without interest) over the term of the
Sublease.
(d) No consent by Landlord to any Assignment or Sublease by Tenant
shall relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether arising before or after the Assignment or Sublease. The consent
by Landlord to any Assignment or Sublease shall not relieve Tenant from the
obligation to obtain Landlord's express written consent to any other Assignment
or Sublease. Any Assignment or Sublease that is not in compliance with this
Paragraph 9 shall be void and, at the option of Landlord, shall constitute a
material default by Tenant under this Lease. The acceptance of Base Rent or
Additional Charges by Landlord from a proposed assignee or sublessee shall not
constitute the consent to such Assignment or Sublease by Landlord.
(e) The following shall be deemed a voluntary assignment of Tenant's
interest in this Lease: (i) any dissolution, merger, consolidation, or other
reorganization of Tenant; and (ii) if the capital stock of Tenant is not
publicly traded, the sale or transfer to one person or entity stock possessing
more than fifty percent (50%) of the total combined voting power of all classes
of Tenant's stock issued, outstanding and entitled to vote for the election of
directors. Notwithstanding anything to the contrary contained in this Paragraph
9, Tenant may enter into any of the following transfers (a "Permitted Transfer")
without Landlord's prior written consent: (1) Tenant may assign its interest in
the Lease to a corporation which results from a merger, consolidation or other
reorganization, so long as the surviving corporation has a net worth immediately
following such transaction that is equal to or greater than the net worth of
Tenant as of the date immediately prior to such transaction; and (2) Tenant may
assign this Lease to a corporation which purchases or otherwise acquires all or
substantially all of the assets of Tenant, so long as such acquiring corporation
has a net worth immediately following such transaction that is equal to or
greater than the net worth of Tenant as of the date immediately prior to such
transaction.
(f) No Assignment shall be binding on Landlord unless the assignee
or Tenant shall deliver to Landlord a counterpart of the Assignment in form that
contains a covenant of assumption by the assignee satisfactory in substance and
form to Landlord, consistent with the requirements of this Paragraph 9(f), but
the failure or refusal of the assignee to execute such instrument of assumption
shall not release or discharge the assignee from its liability hereunder. No
Sublease shall be binding on Landlord unless Landlord shall agree in writing
following termination of this Lease to recognize such Sublessee and such
Sublessee agrees in writing to attorn to Landlord on the terms and conditions of
the sublease (including the obligations under this Lease to the extent that they
relate to the portion of the Premises subleased).
(g) Tenant shall have the right, without Landlord's consent but with
written notice to Landlord at least ten (10) days prior thereto, to enter into
an Assignment of Tenant's interest in the Lease or a Sublease of all or any
portion of the Premises to an Affiliate (as defined below) of Tenant, provided
that in connection with an Assignment that is not a sublease, (i) the Affiliate
delivers to Landlord concurrent with such Assignment a written notice of the
Assignment and an assumption agreement whereby the Affiliate assumes and agrees
to
12
perform, observe and abide by the terms, conditions, obligations, and provisions
of this Lease; and (ii) the entity remains an Affiliate throughout the term of
this Lease (and the assumption agreement shall contain provisions consistent
with the provisions of this subparagraph allowing Landlord to terminate this
Lease at such time as the entity is no longer an Affiliate of the original
Tenant). If this Lease is assigned to an Affiliate and thereafter any
circumstance occurs which causes such assignee to no longer be an Affiliate of
the original Tenant, Tenant shall give written notice thereof to Landlord, which
notice, to become effective, shall refer to Landlord's right to terminate this
Lease pursuant to this subparagraph ("Affiliation Termination Notice").
Following occurrence of the circumstance giving rise to the discontinuation of
such assignee being an Affiliate ("Affiliate Termination") of the original
Tenant, Landlord shall be entitled to terminate this Lease unless Landlord has
given its prior written consent to such circumstance, which consent shall not be
unreasonably withheld by Landlord so long as such assignee (after giving effect
to such circumstance) has financial strength (as demonstrated by audited
financial statements) equal to or greater than the original Tenant (including
its net worth) as of the date of execution of this Lease, or the original Tenant
executes a guaranty in usual form reasonably acceptable to Landlord (however,
this does not imply that Tenant would be released without such guaranty). No
Sublease or Assignment by Tenant made pursuant to this Paragraph shall relieve
Tenant of Tenant's obligations under this Lease. As used in this paragraph, the
term "Affiliate" shall mean and collectively refer to a corporation or other
entity which controls, is controlled by or is under common control with Tenant,
by means of an ownership of either (aa) more than fifty percent (50%) of the
outstanding voting shares of stock or partnership or other ownership interests,
or (bb) stock, or partnership or other ownership interests, which provide the
right to control the operations, transactions and activities of the applicable
entity.
(h) Notwithstanding anything to the contrary herein (x) Guarantor is
hereby approved in respect of an Assignment or Sublease by Tenant to Guarantor
regardless of whether Guarantor is an Affiliate of Tenant at the time and (y) in
connection with an Assignment to Guarantor, Guarantor shall assume all of
Tenant's obligations tinder this Lease. Upon such assumption by Guarantor any
security held by Landlord in respect to the portion of the Premises which is the
subject of the Assignment or Sublease assumed by Guarantor, shall be released by
Landlord.
10. INSURANCE AND INDEMNIFICATION.
(a) Except to the extent caused by the negligence or willful
misconduct of Tenant Parties (as defined in Paragraph 10(c) below) or Tenant's
breach of this Lease, Landlord shall indemnify and hold Tenant harmless from and
defend Tenant against any and all claims or liability for any injury or damage
to any person or property including any reasonable attorney's fees (but
excluding any consequential damages or loss of business) occurring in, on, or
about the Project to the extent such injury or damage is caused by the
negligence or willful misconduct of Landlord, its agents, servants, contractors,
employees (collectively, including Landlord, "Landlord Parties") or Landlord's
breach of this Lease.
(b) Landlord shall not be liable to Tenant, and Tenant hereby waives
all claims against Landlord Parties for any injury or damage to any person or
property in or about the Premises by or from any cause whatsoever (other than
the negligence or willful misconduct of Landlord Parties, including Landlord's
negligence or willful misconduct as related to construction or property
management), and without limiting the generality of the foregoing, whether
caused by water leakage of any character from the roof, walls, basement, or
other portion of the Premises or the Building, or caused by gas, fire, oil,
electricity, or any cause whatsoever, in, on, or about the Premises, the
Building or any part thereof (other than that caused by the negligence or
willful misconduct of Landlord Parties). Tenant acknowledges that any casualty
insurance carried by Landlord will not cover loss of income to Tenant or damage
to the alterations in the Premises installed by Tenant or Tenant's personal
property located within the Premises. Tenant shall be required to maintain the
insurance described in Subparagraph 10(d) below during the Term.
(c) Except to the extent caused by the negligence or willful
misconduct of Landlord Parties or Landlord's breach of this Lease, Tenant shall
indemnify and hold Landlord harmless from and defend Landlord against any and
all claims or liability for any injury or damage to any person or property
whatsoever: (i) occurring in or on the Premises; or (ii) occurring in, on, or
about any other portion of the Project to the extent such injury or damage shall
be caused by the negligence or willful misconduct by Tenant, its agents,
servants,
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employees, or invitees (collectively, including Tenant, "Tenant Parties").
Tenant further agrees to indemnify and hold Landlord harmless from, and defend
Landlord against, any and all claims, losses, or liabilities (including damage
to Landlord's property) arising from (x) any breach of this Lease by Tenant
and/or (y) the conduct of any work or business of Tenant Parties in or about the
Project and/or (z) any matter referred to in Paragraph i0(g). This Paragraph 10
does not govern liability for Hazardous Substances, which subject is governed by
Paragraph 39 of the Lease concerning Hazardous Substance liability.
(d) Tenant shall procure at its cost and expense and keep in effect
during the Term the following insurance: (i) commercial general liability
insurance including contractual liability with a minimum combined single limit
of liability of Three Million Dollars ($3,000,000). Such insurance shall name
Landlord as an additional insured, shall specifically include the liability
assumed hereunder by Tenant, and shall provide that it is primary insurance, and
not excess over or contributory with any other valid, existing, and applicable
insurance in force for or on behalf of Landlord, and shall provide that Landlord
shall receive thirty (30) days' written notice from the insurer prior to any
cancellation or change of coverage; (ii) "all risk" property insurance
(including, without limitation, boiler and machinery (if applicable); sprinkler
damage, vandalism and malicious mischief) on all leasehold improvements
installed in the Premises by Tenant at its expense (if any), and on all Tenant's
personal property. Such insurance shall be an amount equal to full replacement
cost of the aggregate of the foregoing and shall provide coverage comparable to
the coverage in the standard ISO All Risk form, when such form is supplemented
with the coverages required above; (iii) worker's compensation insurance; and
(iv) such other insurance as may be required by the law. Tenant shall deliver
policies of such insurance or certificates thereof to Landlord on or before the
Commencement Date, and thereafter at least thirty (30) days before the
expiration dates of expiring policies; and, in the event Tenant shall fail to
procure such insurance, or to deliver such policies or certificates, Landlord
may, at its option, procure same for the account of Tenant, and the cost thereof
shall be paid to Landlord as Additional Charges within five (5) days after
delivery to Tenant of bills therefor.
(e) The provisions of this paragraph l0 shall survive the expiration
or termination of this Lease with respect to any claims or liability occurring
prior to such expiration or termination.
(f) Landlord shall maintain insurance on the Project against fire
and risks covered by "all risk" (excluding earthquake and flood, though
Landlord, at its option, may include this coverage) on a 100% of "replacement
cost" basis (though reasonable deductibles may be included under such coverage).
Landlord's insurance shall also cover the improvements installed by Landlord
prior to the commencement of the Term, shall have a building ordinance
provision, and shall provide for rental interruption insurance covering a period
of twelve (12) full months. In no event shall Landlord be deemed a co-insurer
under such policy. Landlord shall also maintain contractual liability coverage
(or with contractual liability endorsement) on an occurrence basis in amounts
not less than Three Million Dollars ($3,000,000) per occurrence with respect to
bodily injury or death and property damage. Notwithstanding the foregoing
obligations of Landlord to carry insurance, Landlord may modify the foregoing
coverages if and to the extent it is commercially reasonable to do so.
(g) Tenant acknowledges that even if Landlord installs and operated
security cameras or other security equipment and/or provides any other services
that could be construed as being intended to enhance security, Landlord shall
have no obligation to Tenant or to any of Tenant's employees, customers or
invitees for any damage, claim, loss or liability related to any claim that
Landlord had a duty to provide security or that the equipment or services
provided by Landlord were inadequate, inoperative or otherwise failed to provide
adequate security. Any such claim made against Landlord by any employee,
customer or invitee of Tenant shall be included within Tenant's obligation of
indemnity and defense set forth in subparagraph (c) above.
11. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary in
this Lease, the parties hereto release each other and their respective agents,
employees, successors, assignees and subtenants from all liability for injury to
any person or damage to any property that is caused by or results from a risk
(i) which is actually insured against, to the extent of receipt of payment under
such policy (unless the failure to receive payment under any such policy results
from a failure of the insured party to comply with or observe the terms and
conditions of the insurance policy covering such liability, in which event, such
release shall not be so limited), (ii) which is required to be insured against
under this Lease, or (iii) which would normally be covered
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by the standard form of "all risk-extended coverage" casualty insurance, without
regard to the negligence or willful misconduct of the entity so released.
Landlord and Tenant shall each obtain from their respective insurers under all
policies of fire, theft, and other property insurance maintained by either of
them at any time during the Term insuring or covering the Project or any portion
thereof of its contents therein, a waiver of all rights of subrogation which the
insurer of one party might otherwise, if at all, have against the other party,
and Landlord and Tenant shall each indemnify the other against any loss or
expense, including reasonable attorneys' fees, resulting from the failure to
obtain such waiver.
12. SERVICES AND UTILITIES.
(a) Landlord shall provide the maintenance and repairs described in
paragraph 7(a), except for damage occasioned by the act of Tenant, in which
case, but in any event subject to the terms of Paragraph 11 above, such damage
shall be repaired by Landlord at Tenant's expense.
(b) Subject to the provisions elsewhere herein contained and to the
rules and regulations of the Building, Landlord agrees to furnish to the
premises during ordinary business hours of generally recognized business days,
to be determined by Landlord (but exclusive, in any event, of Saturdays, Sundays
and legal holidays), hot and cold water and electricity suitable for the
intended use of the Premises, heat and air conditioning required in Landlord's
judgment for the comfortable use and occupation of the Premises, janitorial
services during the times and in the manner that such services are, in
landlord's judgment, customarily furnished in comparable office buildings in the
immediate market area, and elevator service (if the Building has an elevator)
which shall mean service either by non-attended automatic elevators or elevators
with attendants, or both, at the option of the Landlord. Notwithstanding the
above, except in the case of emergencies, utilities to the Building and elevator
service shall be provided every day. At Tenant's request, Landlord shall provide
additional or after hours heating or air conditioning and Tenant shall pay to
Landlord a reasonable charge for such services as determined by Landlord (not to
exceed Landlord's actual costs, which costs do not include depreciation). Tenant
agrees at all times to cooperate fully with Landlord and to abide by all the
regulations and requirements which Landlord may prescribe for the proper
functioning and protection of the heating, ventilating and air conditioning
system. Wherever heat generating machines, excess lighting or equipment are used
in the Premises which affect the temperature otherwise maintained by the air
conditioning system, Landlord reserves the right to install supplementary air
conditioning units in the Premises, and the cost thereof, including the cost of
installation and the cost of operation and maintenance thereof, shall be paid by
Tenant to Landlord upon demand by Landlord. To the extent Tenant requires water,
electricity, heat, air conditioning or other services in portions of the
Premises which are not metered separately from other tenants of the Project and
in amounts in excess of amounts delivered to such other tenants of the Project
as reasonably determined by Landlord, Tenant shall pay to Landlord a reasonable
charge for such excess amounts as determined by Landlord. Landlord shall make
available to Tenant reasonable documentation supporting its charges for such
excess services.
(c) Tenant will not without the written consent of Landlord, which
consent shall not be unreasonably withheld or delayed, use any apparatus or
device in the Premises which, when used, puts an excessive load on the Building
or its structure or systems, including, without limitation, electronic data
processing machines, punch card machines and machines using excess lighting or
voltage in excess of the amount for which the Building is designed, which will
in any way materially increase the amount of gas, electricity or water usually
furnished or supplied for use of the Premises as general office space; nor
connect with electric current, except through existing electrical, outlets in
the Premises, or water pipes or gas outlets, any apparatus or device for the
purposes of using gas, electrical current or water. If Tenant shall require
water or electrical current or any other resource in excess of that usually
furnished or supplied for use of the Premises as general office space, Tenant
shall first obtain the consent of Landlord, which Landlord may refuse, to the
use thereof, and Landlord may cause a special meter to be installed in the
Premises so as to measure the amount of water, electric current or other
resource consumed for any such other use. The cost of any such meters and of
installation, maintenance an repair thereof shall be paid for by Tenant, and
Tenant agrees to pay Landlord promptly upon demand by Landlord for all such
water, electric current or other resource consumed, as shown by said meters, at
the rates charged by the local public utility, furnishing the same, plus any
additional expense incurred in keeping account of the water, electric current or
other resource so consumed.
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(d) Landlord shall not be in default hereunder, nor be deemed to
have evicted Tenant, nor be liable for any damages directly or indirectly
resulting from, nor shall the rental herein reserved be abated by reason of (i)
the installation, use or interruption of use of any equipment in connection with
the foregoing utilities and services; (ii) failure to furnish or delay in
furnishing any services to be provided by Landlord when such failure or delay is
caused by Force Majeure, or by the making of repairs or improvements to the
Premises or to the Building (unless such failure or delay is caused by
Landlord's negligence or willful misconduct); or (iii) the limitation,
curtailment, rationing or restriction on use of water, electricity, gas or any
other form of energy, or any other service or utility whatsoever serving the
Premises, the Building or the Project. Furthermore, Landlord shall be entitled
to cooperate with the mandatory requirements of national, state or local
governmental agencies or utilities suppliers in connection with reducing energy
or other resources consumption. If the Premises become unsuitable for Tenant's
use as a consequence of cessation of gas and electric utilities or other
services provided to the Premises resulting from a casualty covered by
Landlord's insurance, then Tenant's Base Rent and Additional Charges shall abate
during the period of time in which Tenant cannot occupy the Premises for
Tenant's use, but only to the extent of rental abatement insurance proceeds
received by Landlord. Landlord shall use reasonable diligence to make such
repairs as may be required to lines, cables, wires, pipes equipment or machinery
within the Project to provide restoration of the services Landlord is
responsible for providing under this Paragraph 12 and, where the cessation or
interruption of such services has occurred due to circumstances or conditions
beyond Project boundaries, to cause the same to be restored, by diligent
application or request to the provider thereof. In no event shall any mortgagee
or beneficiary under any mortgage or deed of trust on all or any portion of the
Project, the Building, or the land on which all or any portion of the Project is
located (any such mortgagee or beneficiary, a "Mortgagee") be or become liable
for any default of Landlord under this Paragraph 12.
13. TENANT'S CERTIFICATES. Tenant, at any time and from time to time,
within ten (10) days from receipt of written notice from Landlord, will execute,
acknowledge and deliver to Landlord and, at Landlord's request, to any
prospective tenant, purchaser, ground or underlying lessor or Mortgagee or any
other party acquiring an interest in Landlord, a certificate of Tenant
substantially in the form attached as Exhibit "D" and also containing any other
information that may reasonably be required by any of such persons. It is
intended that any such certificate of Tenant delivered pursuant to this
Paragraph 13 may be relied upon by Landlord and any prospective tenant,
purchaser, ground or underlying lessor or Mortgagee, or such other party. If
requested by Tenant, Landlord shall provide Tenant with a similar certificate.
14. HOLDING OVER. If Tenant (directly or through any successor-in-interest
of Tenant) remains in possession of any or all of the Premises after the
expiration or termination of this Lease with the consent of Landlord, such
continued possession shall be construed to be a tenancy from month to month at
one hundred twenty-five percent (125%) of the Monthly Base Rent herein specified
(and shall be increased in accordance with Paragraph 4(b) [Adjustments in Base
Rent]), together with an amount estimated by Landlord for the monthly Additional
Charges payable under this Lease, and shall otherwise be on the terms and
conditions herein specified so far as applicable. If Tenant (directly or through
any successor-in-interest of Tenant) remains in possession of all or any portion
of the Premises after the expiration or termination of this Lease without the
consent of Landlord, Tenant's continued possession shall be on the basis of a
tenancy at the sufferance of Landlord. In such event, Tenant shall continue to
comply with or perform all the terms and obligations of Tenant under this Lease,
except that the Monthly Base Rent during Tenant's holding over shall be the
greater of the then-fair market rent for the Premises (as reasonably determined
by Landlord) or one hundred fifty percent (150%) of the Monthly Base Rent and
Additional Charges payable in the last full month prior to the termination
hereof (and shall be increased in accordance with Paragraph 4(b) [Adjustments in
Base Rent]). In addition to Rent. Tenant shall pay Landlord for all damages
proximately caused by reason of the Tenant's retention of possession. Landlord's
acceptance of Rent after the termination of this Lease shall not constitute a
renewal of this Lease, and nothing contained in this provision shall be deemed
to waive Landlord's right of reentry or any other right hereunder or at law.
Tenant acknowledges that, in Landlord's marketing and re-leasing efforts for the
Premises, Landlord is relying on Tenant's vacation of the Premises on the
Expiration Date. Accordingly, Tenant shall indemnify, defend and hold Landlord
harmless from and against all claims, liabilities, losses, costs, expenses and
damages arising or resulting directly or indirectly from Tenant's failure to
timely surrender the Premises, including (i) any loss, cost or damages suffered
by any prospective tenant of all or any part of the Premises, and (ii)
Landlord's damages as a result of such prospective tenant rescinding or refusing
to
16
enter into the prospective lease of all or any portion of the Premises by reason
of such failure of Tenant to timely surrender the Premises.
15. SUBORDINATION.
(a) Without the necessity of any additional document being executed
by Tenant for the purpose of effecting a subordination, this Lease shall be
subject and subordinate at all times to: (i) the Encumbrances and all ground
leases or underlying leases which may now exist or hereafter be executed
affecting the Building or the land upon which the Building is situated or both;
(ii) any CC&R's, currently in effect or that Landlord may enter into in the
future, that affect the Building or the Common Areas and (iii) the lien of any
mortgage or deed of trust which may now exist or hereafter be executed in any
amount for which the Building, land, ground leases or underlying leases, or
Landlord's interest or estate in any of said items, is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. In the event that any ground lease or underlying lease
terminates for any reason or any mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason, Tenant shall,
notwithstanding any subordination, attorn to and become the Tenant of the
successor in interest to Landlord at the option of such successor in interest.
Notwithstanding anything to the contrary contained herein (but subject to
subparagraph 15(b) below), this Lease shall not be subject or subordinate to any
ground or underlying lease or to any lien, mortgage, deed of trust or other
security interest affecting the Premises, unless the ground lessor, lender or
other holder of the interest to which this lease would be subordinated executes
a reasonable recognition and non-disturbance agreement which provides that
Tenant shall be entitled to continue in possession of the Premises on the terms
and conditions of this Lease if and for so long as Tenant fully performs all of
its obligations hereunder. Tenant covenants and agrees to execute and deliver
upon demand by Landlord and in the form requested by Landlord and reasonably
acceptable to Tenant, any customary additional documents evidencing the priority
or subordination of this Lease with respect to any such ground leases or
underlying leases or the lien of any such mortgage or deed of trust. Tenant
shall execute, deliver and record any such documents within twenty (20) days
after Landlord's written request.
(b) Notwithstanding the provisions of subparagraph 15(a) above to
the contrary, specifically with regard to the Ground Lease (as defined in
Exhibit "E"), this Lease shall be subject to and subordinate to the terms,
covenants and conditions of the Ground Lease and the rights of the Lessor (as
defined in the Ground Lease), without the requirement that the Lessor enter into
a separate recognition and non-disturbance agreement as contemplated by
subparagraph 15(a), provided that Landlord and Tenant agree to the following
conditions as required by Article 25 of the Ground Lease:
(1) Upon any termination or surrender of the Ground Lease,
this Lease shall continue in full force and effect and the Tenant (defined as
"sublessee" in the Ground Lease) shall attorn to, or, at the option of Lessor
(as defined in the Ground Lease), enter into a direct lease on identical terms
(i.e. the terms of this Lease) with, Lessor;
(2) Lessor shall not be bound by any prepayment of rent
hereunder; and
(3) Tenant and Landlord agree that this Lease is an arm's
length transaction between Landlord (defined as "Lessee" in the Ground Lease)
and Tenant (defined as "the subtenant" in the Ground Lease), and that Tenant is
not an Affiliate (as defined in the Ground Lease) of Landlord.
16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
the rules and regulations attached to this Lease as Exhibit "C" and all
reasonable modifications thereof and additions thereto from time to time put
into effect by Landlord. Landlord shall not be responsible for the
nonperformance by any other Tenant or occupant of the Building or the Project of
any said roles and regulations. In the event of an express and direct conflict
between the terms, covenants, agreements and conditions of this Lease and those
set forth in the roles and regulations, as modified and amended from time to
time by Landlord, this Lease shall control.
17
17. RE-ENTRY BY LANDLORD. Landlord reserves and shall at all reasonable
times, upon reasonable prior notice (except in the case of an emergency), and
subject to Tenant's reasonable security precautions and the right of Tenant to
accompany Landlord at all times, have the right to re-enter the Premises to
inspect the same, to supply janitor service and any other service to be provided
by Landlord to Tenant hereunder (unless Tenant is supplying such service), to
show the Premises to prospective purchasers, Mortgagees or tenants (as to
prospective tenants, only during the last twelve (12) months of the Lease Term),
to post notices of nonresponsibility or as otherwise required or allowed by this
Lease or by law, and to alter, improve or repair the Premises and any portion of
the Building and may for that purpose erect, use, and maintain scaffolding,
pipes, conduits, and other necessary structures in and through the Premises
where reasonably required by the character of the work to be performed. Landlord
shall not be liable in any manner for any inconvenience, disturbance, loss of
business, nuisance or other damage arising from Landlord's entry and acts
pursuant to this Paragraph and Tenant shall not be entitled to an abatement or
reduction of Base Rent or Additional Charges if Landlord exercises any rights
reserved in this paragraph. Tenant hereby waives any claim for damages for any
injury or inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby, except for Landlord's negligence or willful misconduct. For each of the
aforesaid purposes, Landlord shall at all times have and retain a key with which
to un-lock all of the doors in, upon and about the Premises, excluding Tenant's
vaults and safes, or special security areas (designated in advance), and
Landlord shall have the right to use any and all means which Landlord may deem
necessary or proper to open said doors in an emergency, in order to obtain entry
to any portion of the Premises, and any entry to the Premises, or portion
thereof obtained by Landlord by any of said means, or otherwise, shall not under
any emergency circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an eviction, actual or
constructive, of Tenant from the Premises or any portions thereof. Landlord
shall use best efforts during re-entry to not unreasonably interfere with
Tenant's use of the Premises or its business conducted therein. Tenant
acknowledges that the first floor telephone equipment room provides third party
access to the electronic sign equipment that operates the sign facing Highway
101 and that Landlord retains the right to access to such facilities at all
times without notice. Tenant acknowledges that it has no right hereunder to use
of such electronic sign.
18. INSOLVENCY OR BANKRUPTCY. The appointment of a receiver to take
possession of all or substantially all of the assets of Tenant, or an assignment
of Tenant for the benefit of creditors, or any action taken or suffered by
Tenant under any insolvency, bankruptcy, reorganization or other debtor relief
proceedings, whether now existing or hereafter amended or enacted (collectively
"Insolvency Proceeding"), shall at Landlord's option constitute a breach of this
Lease by Tenant unless a petition in bankruptcy, or receiver attachment, or
other remedy pursued by a third party is discharged within sixty (60) days. Upon
the happening of any such event or at any time thereafter, this Lease shall
terminate five (5) days after written notice of termination from Landlord to
Tenant. In no event shall this Lease be assigned or assignable by operation of
law or by voluntary or involuntary bankruptcy proceedings or otherwise and in no
event shall this Lease or any rights or privileges hereunder be an asset of
Tenant under any bankruptcy, insolvency, reorganization or other debtor relief
proceedings.
19. DEFAULT.
(a) The failure to perform or honor any covenant, condition or
representation made under this Lease shall constitute a "default" hereunder by
Tenant upon expiration of the appropriate grace or cure period hereinafter
provided. Tenant shall have a period of three (3) days from the date of written
notice from Landlord (which notice shall be in lieu of and not in addition to
the notice required by Section 1161 of the California Code of Civil Procedure)
within which to cure any failure to pay Base Rent or Additional Charges;
provided, however, that Landlord shall not be required to provide such notice
more than four times during any two (2) year period during the Term with respect
to non-payment of Base Rent or Additional Charges, the fifth such non-payment
constituting default without requirement of notice. Tenant shall have a period
of thirty (30) days from the date of written notice from Landlord within which
to cure any other curable failure to perform any obligation under this Lease:
provided, however, that with respect to any curable failure to perform other
than the payment of Base Rent or Additional Charges that cannot reasonably be
cured within thirty (30) days, the cure period shall be extended if Tenant
commences to cure within thirty (30) days from Landlord's notice and continues
to prosecute diligently the curing thereof. Notwithstanding the foregoing, (i)
if a different cure
18
period is specified elsewhere in this Lease or the Work Letter with respect to
any specific obligation of Tenant, such specific cure period shall apply with
respect to a failure of such obligation; and (ii) the foregoing cure rights
shall not extend the specified time for compliance with any required delivery,
approval or performance obligation of Tenant under the Work Letter. Upon a
default of this Lease by Tenant, Landlord shall have the following rights and
remedies in addition to any other rights or remedies available to Landlord at
law or in equity:
(1) The rights and remedies provided by California Civil Code,
Section 1951.2, including but not limited to, recovery of the worth at the time
of award of the amount by which the unpaid Base Rent and Additional Charges for
the balance of the Term after the time of award exceeds the amount of rental
loss for the same period that the Tenant proves could be reasonably avoided, as
computed pursuant to subsection (b) of said Section 1951.2;
(2) The rights and remedies provided by California Civil Code,
Section 1951.4, that allows Landlord to continue this Lease in effect and to
enforce all of its rights and remedies under this Lease, including the right to
recover Base Rent and Additional Charges as they become due, for so long as
Landlord does not terminate Tenant's right to possession; provided, however, if
Landlord elects to exercise its remedies described in this Paragraph 19(a)(ii)
and landlord does not terminate this Lease, and if Tenant requests Landlord's
consent to an assignment of this Lease or a sublease of the Premises at such
time as Tenant is in default, Landlord shall not unreasonably withhold its
consent to such assignment or sublease. Acts of maintenance or preservation,
efforts to relet the Premises or the appointment of a receiver upon Landlord's
initiative to protect its interest under this Lease shall not constitute a
termination of Tenant's rights to possession;
(3) The right to terminate this Lease by giving notice to
Tenant in accordance with applicable law;
(4) If Landlord elects to terminate this Lease, the right and
power to enter the Premises and remove therefrom all persons and property and,
to store such property in a public warehouse or elsewhere at the cost of and for
the account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law.
(b) Landlord shall have a period of thirty (30) days from the date
of written notice from Tenant within which to cure any default by Landlord under
this Lease; provided, however, that with respect to any default that cannot
reasonably be cured within thirty (30) days, the default shall not be deemed to
be uncured if Landlord commences to cure within thirty (30) days from Tenant's
notice and continues to prosecute diligently the curing thereof. Tenant agrees
to give any Mortgagee, by registered or certified mail, a copy of any Notice of
Default served upon the Landlord, provided that prior to such notice Tenant has
been notified in writing, (by way of Notice of Assignment of Rents and Leases,
or otherwise) of the address of such Mortgagee. Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the Mortgagee shall have an additional thirty (30) days
(provided that Tenant notifies Mortgagee concurrently with Tenant's notice to
Landlord at the beginning of Landlord's thirty (30) day period; otherwise
Mortgagee shall have sixty days from the date on which it is noticed) within
which to cure such default or if such default cannot be cured within that time,
then the cure period shall be extended for such additional time as may be
necessary to cure such default shall be granted if within such applicable period
Mortgagee has commenced and continues to prosecute diligently the cure of such
default (including, but not limited to, commencement of foreclosure proceedings,
if necessary to effect such cure).
20. DAMAGE BY FIRE, ETC. If the Premises or the Building are damaged by
fire or other casualty. Landlord shall forthwith repair the same, provided that
such repairs can be made within two hundred seventy (270) days after the date of
such damage under the laws and regulations of the federal, state and local
governmental authorities having jurisdiction thereof. In such event, this Lease
shall remain in full force and effect except that Tenant shall be entitled to a
proportionate reduction of Base Rent and Additional Charges while such repairs
to be made hereunder by Landlord are being made. Such reduction of rent, if any,
shall be based upon the greater of (i) the proportion that the area of the
Premises rendered untenantable by such damage
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bears to the total area of the Premises; or (ii) the extent to which such damage
and the making of such repairs by Landlord shall interfere with the business
carried on by Tenant in the Premises, where clause (ii) is limited to the extent
of rental abatement insurance allowed by Landlord's casualty insurance policy.
Within twenty (20) days after the date of such damage, Landlord shall notify
Tenant of the approximate date by which Landlord believes that it can complete
the repair of such damage ("Estimated Damage Completion Date") (including such
dates for each floor of the Premises if the completion thereof will occur on
different dates) and the date by which Landlord would need to commence
construction ("Estimated Construction Commencement Date") in order to complete
repairs by the Estimated Damage Completion Date and Landlord's determination
thereof shall be binding on Tenant. If Landlord's Estimated Damage Completion
Date is more than two hundred seventy (270) days from the date of such damage,
Landlord shall have the option within thirty (30) days after the date of such
damage either to: (i) notify Tenant of Landlord's intention to repair such
damage and diligently prosecute such repairs, in which event (subject to
Tenant's right to terminate specified below) this Lease shall continue in full
force and effect and the Base Rent and Additional Charges shall be reduced as
provided herein; or (ii) notify Tenant of Landlord's election to terminate this
Lease as of a date specified in such notice, which date shall not be less than
thirty (30) days nor more than sixty (60) days after notice is given; provided,
however, in the event the damage giving rise to such right to terminate this
Lease by Landlord is the result of damage in only one of the two buildings in
the Project, Landlord's right to terminate this Lease shall only apply to the
portion of the Premises, if any, in such building, and in such event the Lease
shall remain in full force and effect with respect to the balance of the
Premises and the Base Rent and Tenant's Share shall be appropriately adjusted to
reflect the portion of the Premises, if any, with respect to which this Lease is
terminated. In the event that such notice to terminate is given by Landlord,
this Lease shall terminate on the date specified in such notice. In the event
that Landlord notifies Tenant that Landlord's Estimated Damage Completion Date
is more than two hundred seventy days (270) days following the date of the
damage, Tenant shall have a right to terminate the Lease in respect of all
floors of the Premises to which Landlord's notice applies ("Affected Premises
Portion") within fifteen (15) days following receipt of Landlord's notice, by
providing Landlord with written notice of its election to do so. In such event
(and also in the event Landlord terminates the lease pursuant to the immediately
preceding sentence), Tenant shall have no liability in respect of the portion of
the Premises with respect to which the Lease was terminated, for payment of the
deductible under Landlord's insurance relating to such damage. In case of
termination by either event, the Base Rent and Additional Charges shall be
reduced by a proportionate amount based upon the extent to which such damage
interfered with the business carried on by Tenant in the Premises, and Tenant
shall pay such reduced Base Rent and Additional Charges up to the date of
termination. Landlord agrees to refund to Tenant any Base Rent and Additional
Charges previously paid in respect of a portion of the Premises with respect to
which the Lease has terminated, for any period of time subsequent to such date
of such termination. In the event the Lease is terminated in respect of only a
portion of the Premises leaving the Lease in effect with respect to the balance
of the Premises the Base Rent and Tenant's Share shall be appropriately
adjusted. If, and to the extent, neither Landlord nor Tenant have terminated
this Lease pursuant to the provisions set forth above, and the construction of
the repairs has not commenced within ninety (90) days of the Estimated
Construction Commencement Date, Tenant shall have the additional right to
terminate this Lease in respect of the Affected Premises Portion during the
first five (5) business days of each calendar month following the end of such
period until such time as construction of the repairs has commenced, by notice
to Landlord (the "Damage Termination Notice"), effective as of a date set forth
in the Damage Termination Notice (the "Damage Termination Date"), which Damage
Termination Date shall be no earlier than thirty (30) days or later than sixty
(60) days following the date of such Damage Termination Notice. At any time,
from time to time, after the date occurring sixty (60) days after the date of
the damage, Tenant may request that Landlord inform Tenant of Landlord's
reasonable opinion of the date of completion of the repairs and Landlord shall
respond to such request in reasonable detail within five (5) business days
following receipt of such request. The repairs to be made hereunder by Landlord
shall not include, and Landlord shall not be required to repair, any damage by
fire or other cause to the property of Tenant or any repairs or replacements of
any paneling, decorations, railings, floor coverings or any alterations,
additions, fixtures or improvements installed on the Premises by or at the
expense of Tenant (excluding the initial Tenant Improvements constructed by
Landlord). Tenant hereby waives the provisions of Section 1932.2, and Section
1933.4, of the Civil Code of California. Notwithstanding anything contained
herein to the contrary, if a Major Casualty occurs with respect to any portion
of the Building, and the net insurance proceeds obtained as a result of such
casualty are ninety percent (90%) or a lesser percentage of the cost of
restoration, rebuilding or replacement, then Landlord shall not be obligated to
undertake such restoration, rebuilding or replacement
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unless Landlord elects to do so in writing. For the purpose of this Lease, a
"Major Casualty" shall mean a casualty that renders unusable twenty percent
(20%) or more of the Net Rentable Area of the Building or which materially
adversely affects the use of such Building.
21. EMINENT DOMAIN. If any part over 15% of the Premises shall be taken or
appropriated under the power of eminent domain or conveyed in lieu thereof,
Tenant shall have the right to terminate this Lease at its option. If any part
of the Building shall be taken or appropriated under power of eminent domain or
conveyed in lieu thereof and such taking is so extensive that it renders the
remaining portion of the Building unsuitable for the use being made of the
Building on the date immediately preceding such taking, Landlord may terminate
this Lease at its option. In either of such events, Landlord shall receive (and
Tenant shall assign to Landlord upon demand from Landlord) any income, rent,
award or any interest therein which may be paid in connection with the exercise
of such power of eminent domain, and Tenant shall have no claim against Landlord
for any part of sum paid by virtue of such proceedings, whether or not
attributable to the value of the unexpired term of this Lease except that Tenant
shall be entitled to petition the condemning authority for the following: (i)
the then unamortized cost of any Alterations or tenant improvements paid for by
Tenant from its own funds (as opposed to any allowance provided by Landlord);
(ii) the value of Tenant's trade fixtures; (iii) Tenant's relocation costs; (iv)
Tenant's goodwill, loss of business and business interruption; and (v) one-half
of the amount which is the lesser of (a) the bonus value of this lease, or (b)
the amount of the award in excess of the sum of amounts payable to Landlord's
ground lessor (if any) and any holder of a mortgage or other third party lien
encumbering Landlord's ground lease estate or fee simple ownership in the
Property. If a part of the Premises shall be so taken or appropriated or
conveyed and neither party hereto shall elect to terminate this Lease and the
Premises have been damaged as a consequence of such partial taking or
appropriation or conveyance, Landlord shall restore the Premises continuing
under this Lease at Landlord's cost and expense; provided, however, that
Landlord shall not be required to repair or restore any injury or damage to the
property of Tenant or to make any repairs or restoration of any Alterations
installed on the Premises by or at the expense of Tenant. Thereafter, the Base
Rent and Additional Charges to be paid under this Lease for the remainder of the
Term shall be proportionately reduced, such that thereafter the amounts to be
paid by Tenant shall be in the ratio that they are of the portion of the
Premises not so taken bears to the total area of the Premises prior to such
taking. Notwithstanding anything to the contrary contained in this Paragraph 21,
if the temporary use or occupancy of any part of the Premises shall be taken or
appropriated under power of eminent domain during the Term, this Lease shall be
and remain unaffected by such taking or appropriation and Tenant shall continue
to pay in full all Base Rent and Additional Charges payable hereunder by Tenant
during the Term; in the event of any such temporary appropriation or taking,
Tenant shall be entitled to receive that portion of any award which represents
compensation for the use of or occupancy of the Premises during the Term, and
Landlord shall be entitled to receive that portion of any award which represents
the cost of restoration of the Premises and the use and occupancy of the
Premises after the end of the Term. If such temporary taking is for a period
longer than two hundred and seventy (270) days and unreasonably interferes with
Tenant's use of the Premises or the Project Common Areas, then Tenant shall have
the right to terminate the Lease. Landlord and Tenant understand and agree that
the provisions of this Paragraph 21 are intended to govern fully the rights and
obligations of the parties in the event of a Taking of all or any portion of the
Premises. Accordingly, the parties each hereby waives any right to terminate
this Lease in whole or in part under Sections 1265.120 and 1265.130 of the
California Code of Civil Procedure or under any similar Law now or hereafter in
effect.
22. SALE BY LANDLORD. If Landlord sells or otherwise conveys its interest
in the Premises, Landlord shall be relieved of its obligations under the Lease
from and after the date of sale or conveyance (including the obligations of
Landlord under Paragraph 39), only when Landlord transfers any security deposit
of Tenant to its successor and the successor assumes in writing the obligations
to be performed by Landlord on and after the effective date of the transfer
(including the obligations of Landlord under Paragraph 39), whereupon Tenant
shall attorn to such successor.
23. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of Base Rent
or Additional Charges. If Tenant shall default in the payment of any sum of
money, other than Base Rent or Additional Charges, required to be paid by it
hereunder or shall fail to perform any other act on its part to be performed
hereunder, and such failure shall continue for the applicable
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cure period provided in Paragraph 19 (except in the event of emergency, when no
cure period shall be required), Landlord may, but shall not be obligated so to
do, and without waiving or releasing Tenant from any obligations of Tenant, make
any such payment or perform any such act on Tenant's part to be made or
performed as provided in this Lease. All sums so paid by Landlord and all
necessary incidental costs together with interest thereon at the Default Rate,
from the date of such payment by Landlord shall be payable as Additional Charges
to Landlord on demand.
24. SURRENDER OF PREMISES.
(a) At the end of the Term or any renewal thereof or other sooner
termination of this Lease, Tenant will peaceably deliver to Landlord possession
of the Premises, together with all improvements or additions upon or belonging
to Landlord, by whomsoever made, in the same condition as received, or first
installed, subject to the terms of Paragraphs 39 & 21 and the rights and
obligation of Tenant concerning casualty damage pursuant to Paragraph 20, damage
by fire, earthquake, Act of God, ordinary wear and tear, Hazardous Substances
(other than those for which Tenant is indemnifying Landlord pursuant to
Paragraph 39) or the elements alone excepted. Tenant may, upon the termination
of this Lease, remove all movable furniture and equipment belonging to Tenant,
at Tenant's sole cost, provided that Tenant repairs any damage caused by such
removal. Property not so removed shall be deemed abandoned by Tenant, and title
to the same shall thereupon pass to Landlord. Upon request by Landlord, and
unless otherwise agreed to in writing by Landlord, Tenant shall remove, at
Tenant's sole cost, any or all Alterations to the Premises installed by or at
the expense of Tenant and all movable furniture and equipment belonging to
Tenant which may be left by Tenant and repair any damage resulting from such
removal.
(b) The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not work a merger, and shall, at the option
of Landlord, terminate all or any existing subleases or subtenancies, or may, at
the option of Landlord, operate as an assignment to it of any or all such
subleases or subtenancies.
25. WAIVER. If either Landlord or Tenant waives the performance of any
term, covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein. Furthermore, the acceptance of Base Rent
or Additional Charges by Landlord shall not constitute a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, regardless of
Landlord's knowledge of such preceding breach at the time Landlord accepted such
Base Rent or Additional Charges. Failure by Landlord to enforce any of the
terms, covenants or conditions of this Lease for any length of time shall not be
deemed to waive or to decrease the right of Landlord to insist thereafter upon
strict performance by Tenant. Waiver by Landlord of any term, covenant or
condition contained in this Lease may only be made by a written document signed
by Landlord.
26. NOTICES. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be effective only if rendered or
given in writing, sent by certified mail, return receipt requested, reputable
overnight carrier, or delivered personally, (i) to Tenant (A) at Tenant's
address set forth in the Basic Lease Information, if sent prior to Tenant's
taking possession of the Premises. or (B) at the Premises if sent subsequent to
Tenant's taking possession of the Premises, or (C) at any place where Tenant may
be found if sent subsequent to Tenant's vacating, deserting, abandoning or
surrendering the Premises; or (ii) to Landlord at Landlord's address set forth
in the Basic Lease Information; or (iii) to such other address as either
Landlord or Tenant may designate as its new address for such purpose by notice
given to the other in accordance with the provisions of this Paragraph 26.
If and for so long as Oracle Corporation is a Guarantor of the obligations of
Tenant under this Lease any notice sent to Tenant shall be given to Oracle
Corporation in writing in the manner described above with respect to notices to
Tenant.
Any such bill, statement, notice, demand, request or other communication shall
be deemed to have been rendered or given on the date the return receipt
indicates delivery of or refusal of delivery if sent by certified
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mail, the day upon which recipient accepts and signs for delivery from a
reputable overnight carrier, or on the date a reputable overnight carrier
indicates refusal of delivery, or upon the date personal delivery is made. If
Tenant is notified in writing of the identity and address of any Mortgagee or
ground or underlying lessor, Tenant shall give to such Mortgagee or ground or
underlying lessor notice of any default by Landlord under the terms of this
Lease in writing sent by registered or certified mail, and such Mortgagee or
ground or underlying lessor shall be given the opportunity to cure such default
(as defined in Paragraph 19(b)) prior to Tenant exercising any remedy available
to it.
27. TAXES PAYABLE BY TENANT. At least ten (10) days prior to delinquency
Tenant shall pay all taxes levied or assessed upon Tenant's equipment,
furniture, fixtures and other personal property located in or about the
Premises. If the assessed value of Landlord's property is increased by the
inclusion therein of a value placed upon Tenant's equipment, furniture, fixtures
or other personal property, Tenant shall pay to Landlord, upon written demand,
the taxes so levied against Landlord, or the proportion thereof resulting from
said increase in assessment.
28. ABANDONMENT. Tenant shall not abandon the Premises and cease
performing its financial and maintenance obligations under this Lease at any
time during the Term, and if Tenant shall abandon and cease performing its
financial and maintenance obligations under this Lease, or surrender the
Premises or be dispossessed by process of law, or otherwise, any personal
property belonging to Tenant and left on the Premises shall, at the option of
Landlord, be deemed to be abandoned and title thereto shall thereupon pass to
Landlord. Notwithstanding anything to contrary contained herein, Tenant shall
not be allowed to vacate the Premises if such would result in a termination of
Landlord's insurance. Upon Tenant's request, Landlord will ask its insurer if
such vacation of the Premises would result in termination of its current
insurance policy. For purposes of this Paragraph 28, the Tenant shall not be
deemed to have abandoned the Premises solely because the Tenant is not occupying
the Premises.
29. SUCCESSORS AND ASSIGNS. Subject to the provisions of Paragraph 9, the
terms, covenants and conditions contained herein shall be binding upon and inure
to the benefit of the parties hereto and their respective legal and personal
representatives, successors and assigns.
30. ATTORNEY'S FEES. If Tenant or Landlord brings any action for any
relief against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of Base Rent or Additional
Charges or possession of the Premises, the losing party shall pay to the
prevailing party a reasonable sum for attorney's fees, which shall be deemed to
have accrued on the commencement of such action and shall be paid whether or not
the action is prosecuted to judgment.
31. LIGHT AND AIR. Tenant covenants and agrees that no diminution of
light, air or view by any structure which may hereafter be erected (whether or
not by Landlord) shall entitle Tenant to any reduction of rent under this Lease,
result in any liability of Landlord to Tenant, or in any other way affect this
Lease or Tenant's obligations hereunder.
32. SECURITY DEPOSIT.
(a) Letter of Credit. Concurrently with Tenant's execution of this
Lease, Guarantor shall deliver to Landlord its Guaranty of Tenant's obligations
hereunder. Such Guaranty provides for the termination of the Guaranty when
certain criteria have been met including the deposit with Landlord of a letter
of credit meeting the requirements of this Paragraph 32. Concurrently with
Landlord's written confirmation of termination of the Guaranty, Tenant shall
deliver to Landlord an unconditional, irrevocable, transferable letter of
credit, in an amount equal to the "Required Amount" (defined below) issued by a
financial institution acceptable to Landlord in the form attached hereto as
Exhibit "F", with an original term of no less than one year and automatic
extensions through the end of the Term of this Lease and sixty (60) days
thereafter (the "Letter of Credit"). Landlord shall not unreasonably withhold
its approval of such a financial institution if it is a national bank with
office in the San Francisco Bay Area (including an office allowing the Letter of
Credit to be presented to and paid by such office) with assets in excess of
twenty billion dollars. The term "Required Amount" shall mean a sum reasonably
determined by Landlord as of the date the Letter of Credit is delivered
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hereunder to be the amount of ten (10) months Base Rent plus Additional Charges.
Tenant shall keep the Letter of Credit, at its expense, in full force and effect
until the sixtieth (60th) day after the Expiration Date or other termination of
this Lease, to insure the faithful performance by Tenant of all of the
covenants, terms and conditions of this Lease, including, without limitation,
Tenant's obligations to repair, replace or maintain the Premises and Tenant's
obligations under the Work Letter; provided, however, at any time during the
term that Landlord holds cash as a security deposit hereunder in the amount of
the Letter of Credit, Tenant shall not be in default hereunder for failing to
maintain the Letter of Credit. Landlord shall be entitled to draw the full
amount of the Letter of Credit (i) at any time Tenant is in "default" (as
defined in Paragraph 19(a)), (ii) at any time an event has occurred which, with
the passage of time or giving of notice or both, would constitute a default,
where Landlord is prevented from, or delayed in, giving such notice because of
an Insolvency Proceeding or (iii) on or after thirty (30) days prior to the
expiration of the Letter of Credit. The Letter of Credit shall provide for full
payment to Landlord, upon presentation of the following to the issuer of the
Letter of Credit (x) a letter signed by an authorized agent of Landlord stating
that Landlord is entitled to draw the Letter of Credit and (y) the original
Letter of Credit. In the event of such payment to Landlord, Landlord shall hold
the funds so obtained as the security deposit required under this Lease. Any
unused portion of the funds so obtained by landlord shall be returned to Tenant
upon replacement of the Letter of Credit or deposit of cash security in the full
amount required as the face amount of the Letter of Credit hereunder. If
Landlord uses any portion of the Letter of Credit, or the cash security deposit
resulting from a draw on the Letter of Credit, to cure any default by Tenant
hereunder, Tenant shall replenish the security deposit to the original amount
within ten (10) days of notice from Landlord. Tenant's failure to do so shall
become be a material breach of this Lease. Landlord shall keep any cash security
funds separate from its general funds, and shall invest such cash security at
Tenant's reasonable direction, and any interest actually earned by Landlord on
such cash security shall be paid to Tenant quarterly. If an event of default
occurs under this Lease or the Work Letter (including, without limitation, any
default by Tenant with respect to its payment and performance obligations under
the Work Letter), or if Tenant is the subject of an Insolvency Proceeding,
Landlord may present its written demand for payment of the entire face amount of
the Letter of Credit and the funds so obtained shall become due and payable to
Landlord. Landlord may retain such funds to the extent required to compensate
Landlord for damages incurred, or to reimburse Landlord as provided herein, in
connection with any such default, and any remaining funds shall be held as a
cash security deposit. Without limiting the foregoing, in the event of a default
in Tenant's obligations to complete or pay for the Tenant Improvements in
accordance with the Work Letter, Landlord may use the security deposit to
complete and/or pay for the Tenant Improvements to the extent of Tenant's
obligations as contemplated by the Work Letter. Landlord shall be entitled to
assign the Letter of Credit and its rights thereto in connection with an
assignment of this Lease to its Lender as security for the obligations of
Landlord to such lender. Tenant shall cooperate with Landlord in connection with
any modifications of the Letter of Credit that may be reasonably requested in
connection with such assignment.
(b) Annual Reduction of Letter of Credit. Tenant shall be entitled
to reduce the Letter of Credit on the sixth through tenth anniversaries of the
Commencement Date in the amount of one-fifth (l/5th) of the initial balance, so
long as (i) Tenant is not in default (and no event has occurred which, with the
passage of time or giving of notice or both, would constitute a default) under
the Lease on such anniversary date, and (ii) Landlord has not delivered a notice
of Tenant's failure to perform any of its monetary obligations hereunder during
the previous six months, regardless of whether such failure was cured by Tenant
within any applicable grace or cure period; provided, however, that any such
notice of failure to perform relating to a non-monetary failure to perform which
was disputed, in good faith, by Tenant and ultimately determined (by agreement
of the parties, arbitration or judicial action) not to be a violation of this
Lease shall not be considered for purposes of determining whether such condition
has been met.
(c) Return of Letter of Credit. The Letter of Credit shall be
returned to Tenant if, at any time after the fifth anniversary of the
Commencement Date, Tenant (A) can establish to Landlord's reasonable
satisfaction that as of the end of any fiscal year of Tenant following the fifth
anniversary of the Commencement Date, Tenant has (i) had revenues for eight
consecutive quarters in excess of an annual rate of $75,000,000 "Revenue
Criteria", (ii) Market Capitalization of an average of $750,000,000 over the
proceeding twelve months, and (iii) cash and cash equivalents ("Cash Criteria")
(including up to twenty five percent (25%) of which may be comprised of the
amount Tenant would receive from a factor, without recourse, in respect of
current ninety day or less accounts receivables (which are not and shall not be
pledged or factored), certified to
24
Landlord by an independent third party factor) in excess of Forty Million
Dollars ($40,000,000), all as determined in accordance with GAAP and as
reflected on certified, audited financial statements; and (b) is not in default
(and no event has occurred which, with the passage of time or giving of notice
or both, would constitute a default) under the Lease as of the date the Letter
of Credit is returned to Tenant. The term "Market Capitalization" shall mean the
average daily closing price of a class of Tenant's stock which is publicly
traded multiplied by the number of shares of Tenant's stock that is held by
shareholders who may freely trade such stock.
(d) Conversion of Deposit to Loan. Landlord and Tenant acknowledge
and agree that, if Tenant defaults under this Lease and Landlord elects to
pursue its remedies under California Civil Code Section 1951.2 or under this
Lease to terminate this Lease (any such event, a "Landlord Action"), (i)
Landlord will incur certain damages, costs and expenses, including, without
limitation, marketing costs, commissions, relocation costs, tenant improvement
costs (but limited to costs for improvements consistent with the level of finish
and build out of Tenant's Improvement), and carrying costs in connection with
releasing the Premises, in addition to the other damages, costs and expenses
Landlord may incur as a result of such default and/or other defaults under this
Lease (all of the foregoing collectively, "Default Damages"); (ii) Landlord has
no assurance of a source of funds to cover such Default Damages other than the
proceeds of the Letter of Credit (or cash collateral); and (iii) the proceeds of
the Letter of Credit (or cash collateral) should be available to Landlord to
apply to Default Damages, even if the amount thereof exceeds that amount to
which Landlord is ultimately determined to be entitled under this Lease and
pursuant to applicable law. Accordingly, at Landlord's sole election, Landlord
shall be entitled to draw the full amount of the Letter of Credit (or the full
amount of cash collateral shall be released to Landlord) which is then existing
(after any previous application of funds by Landlord and/or replenishment by
Tenant pursuant to Paragraph 32(a) above), simultaneously with commencement of a
Landlord Action or at any time thereafter. All proceeds thereof in excess of
amounts applied (pursuant to Paragraph 32(a)) to Default Damages incurred by
Landlord prior to commencement of the Landlord Action shall be deemed a loan
from Tenant to Landlord (the "Default Loan"). The Default Loan shall be
unsecured and shall not bear interest, and repayment thereof shall be limited to
the terms and conditions set forth in this paragraph. Any sums to which Landlord
from time to time becomes entitled hereunder and pursuant to law as a result of
Tenant's default and any previous defaults of the Lease, to which the Letter of
Credit (or cash collateral) has not previously been applied pursuant to
Paragraph 32(a), shall be offset against the principal balance of the Loan. The
amount of the Default Loan remaining, if any, after such offset shall be
referred to herein as the "Excess Amount". The Excess Amount shall be payable by
Landlord to Tenant from, and only from, first any proceeds from the Letter of
Credit (or cash collateral) which have not been applied to Default Damages
incurred by Landlord after the same are finally determined (the "Remaining
Proceeds"), and then Excess Rent. The Remaining Proceeds shall be paid by
Landlord to Tenant promptly upon final determination after the entire Premises
are leased to a third party or parties. If Tenant disputes the amount of
Remaining Proceeds paid by Landlord, Tenant may submit such dispute to
arbitration in accordance with Paragraph 40 [Arbitration of Disputes] of this
Lease. "Excess Rent" shall mean the amount by which (x) rent received by
Landlord (from the tenant or tenants leasing all or any portion of the Premises
after Tenant's default) in any month exceeds (y) the amount of rent that would
have been payable under this Lease for such month if this Lease had not been
terminated. Landlord shall pay Tenant one-half of the Excess Rent until the
earlier of (A) the date the Excess Amount is fully repaid or (B) the date that
would have been the Expiration Date (excluding any Renewal Term) of this Lease.
Any remaining balance of the Default Loan on such date shall be deemed forgiven.
If the Default Loan is insufficient to cover all Default Damages, Tenant shall
pay Landlord any such shortfall immediately upon demand by Landlord, and
Landlord shall have all rights and remedies available at law or elsewhere in the
Lease with respect to such shortfall.
33. CORPORATE AUTHORITY; FINANCIAL INFORMATION. If Tenant signs as a
corporation each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing
corporation, that Tenant has and is qualified to do business in California, that
the corporation has full right and authority to enter into this Lease, and that
each and both of the persons signing on behalf of the corporation were
authorized to do so. Upon Landlord's request, Tenant shall provide Landlord with
evidence reasonably satisfactory to Landlord confirming the foregoing covenants
and warranties. Tenant hereby further covenants and warrants to Landlord that
all financial information and other descriptive information regarding Tenant's
business, which has been or shall be furnished to Landlord, is to
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Tenant's best knowledge accurate and complete at the time of delivery to
Landlord.
34. PARKING. Tenant shall have the right to use the Building's parking
spaces in common with other tenants or occupants of the Building, if any,
subject to the Encumbrances and the rules and regulations of Landlord for such
parking facilities which may be established or altered by Landlord at any time
or from time to time during the term. Landlord represents and warrants to Tenant
that the number of parking spaces initially constructed by Landlord in
connection with the Project shall be equal to or greater than the minimum number
required by the City of San Carlos and that Landlord will not thereafter
voluntarily reduce the number of parking spaces available to the Project below
such minimum number except as may be required by law or in connection with
condemnation. Landlord shall not voluntarily agree to an amendment or
modification or waiver of provisions of the CC&Rs in a manner that reduces or
impairs the parking available to the Project except as may be required by law or
in connection with condemnation. Tenant acknowledges that the parking structure
is not scheduled to be completed by the Scheduled Commencement Date. Neither
Tenant nor any of its employees, visitors or invitees shall have an obligation
to pay for parking in the parking structure or otherwise on the Project.
Landlord will operate a valet parking service from 8:30 a.m. to 5:30 p.m. Monday
through Friday excluding holidays from the date Tenant first takes possession of
the Initial Premises (for the operation of its business) through the date the
parking structure is completed and available for use.
35. MISCELLANEOUS.
(a) The term "Premises" wherever it appears herein includes and
shall be deemed or taken to include (except where such meaning would be clearly
repugnant to the context) the office space demised and improvements now or at
any time hereafter comprising or built in the space hereby demised. The
paragraph headings herein are for convenience of reference and shall in no way
define, increase, limit or describe the scope or intent of any provision of this
Lease. The term "Landlord" shall include Landlord and its successors and
assigns. In any ease where this Lease is signed by more than one person, the
obligations hereunder shall be joint and several. The term "Tenant" or any
pronoun used in place thereof shall indicate and include the masculine or
feminine, the singular or plural number, individuals, firms or corporations, and
their and each of their respective successors, executors, administrators, and
permitted assigns, according to the context hereof.
(b) Time is of the essence of this Lease and all of its provisions.
This Lease shall in all respects be governed by the laws of the State of
California. This Lease, together with its exhibits, contains all the agreements
of the parties hereto and supersedes any previous negotiations. There have been
no representations made by the Landlord or understandings made between the
parties other than those set forth in this Lease and its exhibits. This Lease
may not be modified except by a written instrument by the parties hereto.
(c) If for any reason whatsoever any of the provisions hereof shall
be unenforceable or ineffective, all of the other provisions shall be and remain
in full force and effect.
(d) Upon Tenant paying the Base Rent and Additional Charges and
performing all of Tenant's obligations under this Lease, Tenant may peacefully
and quietly enjoy the Premises during the Term as against all persons or
entities lawfully claiming by or through Landlord; subject, however, to the
provisions of this Lease.
36. TENANT'S REMEDIES. If any default hereunder by Landlord is not cured
within the applicable cure period provided in Subparagraph 19(b), Tenant's
exclusive remedies shall be an action for specific performance or action for
actual damages. Tenant hereby waives the benefit of any laws granting it (A) the
right to perform Landlord's obligation, or (B) the right to terminate this Lease
or withhold Rent on account of any Landlord default. Tenant shall look solely to
Landlord's interest in the Project for the recovery of any judgment from
Landlord. Landlord, or if Landlord is a partnership, its partners whether
general or limited, or if Landlord is a corporation, its directors, officers or
shareholders, shall never be personally liable for any such judgment. Any lien
obtained to enforce such judgment and any levy of execution thereon shall be
subject and subordinate to any mortgage or deed of trust (excluding any mortgage
or deed of trust which was created as part of an effort to defraud creditors,
i.e., a fraudulent conveyance); provided, however that any such judgement
26
and any such levy of execution thereon shall not be subject or subordinated to
any mortgage or deed of trust that shall have been created or recorded in the
official records of Santa Clara County after the date of the judgement giving
rise to such lien. Landlord's interest in the Project shall include any
insurance proceeds received by Landlord which are not controlled by Landlord's
lender and any proceeds of the Security Deposit under this Lease that are then
held by Landlord.
37. REAL ESTATE BROKERS. Each party represents that it has not had
dealings with any real estate broker, finder or other person with respect to
this Lease in any manner, except for any broker named in the Basic Lease
Information, whose fees or commission, if earned, shall be paid as provided in
the Basic Lease Information. Each party shall hold harmless the other party from
all damages resulting from any claims that may be asserted against the other
party by any other broker, finder or other person with whom the other party has
or purportedly has dealt.
38. LEASE EFFECTIVE DATE. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.
39. HAZARDOUS SUBSTANCE LIABILITY. Tenant has received from Landlord a
copy of the following reports (the "Environmental Reports"); "Phase I and II
Environmental Assessment Report, Circle Star Theater Property, 1717 Industrial
Way, San Carlos, California, January 31, 1997" prepared by McLaren/Hart
Environmental Engineering Corporation. Except as noted in the Environmental
Reports, Landlord represents and warrants that to the best of its knowledge, the
Premises and Project are presently free of asbestos, toxic waste, underground
storage tanks and other Hazardous Substances in amounts exceeding legally
established maximum thresholds. Additionally, except as noted in the
Environmental Reports, Landlord represents that it has received no written
notice of any violation or claimed violation with respect to the presence of
toxic or Hazardous Substances on, in or under the Project or of any pending or
contemplated investigation or other action relating thereto.
(a) Definition of Hazardous Substances. For the purpose of this
Lease, "Hazardous Substances" shall be defined, collectively, as oil, flammable
explosives, asbestos, radioactive materials, hazardous wastes, toxic or
contaminated substances or similar materials, including, without limitation, any
substances which are "hazardous substances," "hazardous wastes," "hazardous
materials" or "toxic substances" under applicable environmental laws, ordinance
or regulation.
(b) Tenant Indemnity. Tenant releases Landlord from any liability
for, waives all claims against Landlord and shall indemnify, defend and hold
harmless Landlord, its employees, partners, agents, subsidiaries and affiliate
organizations against any and all claims, suits, loss, costs (including costs of
investigation, clean up, monitoring, restoration and reasonably attorney fees),
damage or liability, whether foreseeable or unforeseeable, by reason of property
damage (including diminution in the value of the property of Landlord), personal
injury or death directly arising from or related to Hazardous Substances
released, manufactured, discharged, disposed, used or stored on, in, or under
the Property or Premises during the initial Term and any extensions of this
Lease by Tenant or its employees, agents, sublessees, assignees or contractors.
The provisions of this Tenant Indemnity regarding Hazardous Substances shall
survive the termination of the Lease.
(e) Landlord Indemnity. Landlord releases Tenant from any liability
for, waives all claims against Tenant and shall indemnify, defend and hold
harmless Tenant, its officers, employees, and agents to the extent of Landlord's
interest in the Project, against any and all actions by any governmental agency
for clean up of Hazardous Substances on or under the Property, including costs
of legal proceedings, investigation, clean up, monitoring, and restoration,
including reasonable attorney fees, if, and to the extent, arising from the
presence of Hazardous Substances on, in or under the Property or Premises,
except to the extent caused by the release, disposal, use or storage of
Hazardous Substances in, on or about the Premises by Tenant, its employees,
agents, sublessees, assignees, or contractors. The provisions of this Landlord
Indemnity regarding Hazardous Substances shall survive the termination of the
Lease.
27
Tenant has informed Landlord, that except for very immaterial amounts of toxic
materials incidental to its office use (e.g. copier toner). Tenant will not use
and Hazardous Substances in material amounts within the Building and shall
comply with any applicable laws to the extent that it does,
40. ARBITRATION OF DISPUTES.
ANY CONTROVERSY OR CLAIM ARISING OUT OF THIS LEASE OR A BREACH OF
THIS LEASE SOLELY BETWEEN LANDLORD AND TENANT RELATING TO A MONETARY DEFAULT IN
AN AMOUNT OF LESS THAN TWENTY-FIVE THOUSAND DOLLARS ($25,000), BUT NOT INCLUDING
A DEFAULT WITH RESPECT TO THE TIMELY PAYMENT OF BASE RENT AND ADDITIONAL
CHARGES, SHALL BE SETTLED BY ARBITRATION BEFORE THE JUDICIAL ARBITRATION
MEDIATION SERVICE (JAMS) IN ACCORDANCE WITH THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION, AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S)
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION.
NOTICE: BY INITIALLY IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION TO NEUTRAL ARBITRATION.
Consent to neutral arbitration by: /s/ [ILLEGIBLE] (Landlord):
/s/ [ILLEGIBLE] (Tenant).
41. SIGNAGE. Tenant shall be allowed to use a proportional share (based on
square footage) of the main lobby directory and the monument sign located at the
Project's entry off of Industrial Road, as well as building standard signage at
the lobby on Tenant's floor as well as Tenant's main entry door. In addition
Tenant shall be entitled to one sign each on the northeast (ie. the glass
curtain wall adjacent to the Highway 101 freeway frontage) and northwest (ie.
the pre-cast concrete panel visible from the southbound lanes of Highway 101)
sides of the Building, such signs (in the aggregate) to comprise no more than
one half of the square footage of such exterior building surface signage allowed
in respect of the Project by the City of San Carlos. Such signage shall be in
conformity with standards provided by Landlord, and subject to approval by
Landlord. All signage shall be at Tenant's expense. Landlord shall work with
Tenant to obtain approval of the applicable governmental authorities for
construction of (i) signage on top of the Building and (ii) monument signage at
the main entry to the Project. Such signage shall be subject to the reasonable
approval of Landlord as well as all applicable governmental authorities.
42. OPTION TO RENEW. Upon condition that (i) no event of default is
continuing under this Lease at the time of exercise or at the commencement of
the option term, and (ii) Tenant or its affiliate continues to physically occupy
at least fifty percent (50%) of the Premises, then Tenant shall have the right
to extend the Term for one (1) period of six (6) years ("Extension Term(s)")
following the initial Expiration Date, by giving written notice ("Exercise
Notice") to Landlord at least eighteen (18) months prior to the Expiration of
the Term.
43. RENT DURING EXTENSION TERM. The Monthly Base Rent during the six (6)
year Extension Term shall be the greater of the average Monthly Base Rent
{excluding adjustments pursuant to Paragraph 3(b)(i)) paid during the initial
Term or the Fair Market Rental Value for the Premises as of the
28
commencement of the option term, as determined below:
(a) Within thirty (30) days after receipt of Tenant's Exercise
Notice, Landlord shall notify Tenant of Landlord's estimate of the Fair Market
Rental Value for the Premises, as determined below, for determining Monthly Base
Rent during the ensuing Extension Term; provided, however, if Tenant's Exercise
Notice is given more than eighteen (18) months before the Expiration Date,
Landlord's estimate of Fair Market Rental Value may, but need not be given more
than eighteen (18) months before the Expiration Date. Within fifteen (15) days
after receipt of such notice from Landlord, Tenant shall notify Landlord in
writing that it (i) agrees with such rental rate or (it) disagrees with such
rental rate. No response shall constitute agreement. In the event that Tenant
disagrees with Landlord's estimate of Fair Market Rental Value for the Premises,
then the parties shall meet and endeavor to agree within fifteen (15) days after
Landlord receives Tenant's notice described in the immediately preceding
sentence. If the parties cannot agree upon the Fair Market Rental Value within
said fifteen (15) day period, then the parties shall submit the matter to
binding appraisal in accordance with the following procedure except that in any
event neither party shall be obligated to start such procedure sooner than
eighteen (18) months before the expiration of the Lease Term. Within fifteen
(15) days of the conclusion of the period during which the two parties fail to
agree (but not sooner than eighteen (18) months before the expiration of the
Lease Term), the parties shall either (i) jointly appoint an appraiser for this
purpose or (ii) failing this joint action, each separately designate a
disinterested appraiser. No person shall be appointed or designated an appraiser
unless such person has at least five (5) years experience in appraising major
commercial property in San Mateo County and is a member of a recognized society
of real estate appraisers. If within thirty (30) days after the appointment, the
two appraisers reach agreement on the Fair Market Rental Value for the Premises,
that value shall be binding and conclusive upon the parties. If the two
appraisers thus appointed cannot reach agreement on the Fair Market Rental Value
for the Premises within thirty (30) days after their appointment, then the
appraisers thus appointed shall appoint a third disinterested appraiser having
like qualifications within five (5) days. If within thirty (30) days after the
appointment of the third appraiser a majority of the appraisers agree on the
Fair Market Rental Value of the Premises, that value shall be binding. and
conclusive upon the parties. If within thirty (30) days after the appointment of
the third appraiser a majority of the appraisers cannot reach agreement on the
Fair Market Rental Value for the Premises, then the three appraisers shall each
simultaneously submit their independent appraisal to the parties, the appraisal
farthest from the median of the three appraisals shall be disregarded, and the
mean average of the remaining two appraisals shall be deemed to be the Fair
Market Rental Value for the Premises and shall be binding and conclusive upon
the parties. Each party shall pay the fees and expenses of the appraiser
appointed by it and shall share equally the fees and expenses of the third
appraiser. If the two appraisers appointed by the parties cannot agree on the
appointment of the third appraiser, they or either of them shall give notice of
such failure to agree to the parties and if the parties fail to agree upon the
selection of such third appraiser within ten (10) days after the appraisers
appointed by the parties give such notice, then either of the parties, upon
notice to the other party, may request such appointment by the American
Arbitration Association or, on it failure, refusal or inability to act, may
apply for such appointment to the presiding judge of the Superior Court of San
Mateo County, California.
(b) Wherever used throughout this Paragraph (Rent during Extension
Term) the term "Fair Market Rental Value" shall mean the fair market rental
value of the Premises, using as a guide the rate of monthly base rent which
would be charged during the Extension Term (including periodic increases during
the Extension Term, if any) in the Mid-Peninsula area for comparable high image,
Class A office space in comparable condition, of comparable quality, as of the
time that the Extension Term commences, with appropriate adjustments regarding
taxes, insurance and operating expenses as necessary to insure comparability to
this Lease, as the case may be, and also taking into consideration amount and
type of parking, location, leasehold improvements, proposed term of lease,
amount of space leased, extent of service provided or to be provided, and any
other relevant terms or conditions (including consideration of whether or not
the monthly base rent is fixed).
(c) In the event of a failure, refusal or inability of any appraiser
to act, his successor shall be appointed by the party who originally appointed
him, but in the case of the third appraiser, his successor shall be appointed in
the same manner as provided for appointment of the third appraiser.
29
(d) The appraisers shall render their appraisals in writing with
counterpart copies to Landlord and Tenant. The appraisers shall have no power to
modify the provisions of this Lease.
(e) To the extent that binding appraisal has not been completed
prior to the expiration of any preceding period for which Monthly Base Rent has
been determined, Tenant shall pay Monthly Base Rent at the rate estimated by
Landlord, with an adjustment to be made once Fair Market Rental Value is
ultimately determined by binding appraisal.
(f) From and after the commencement of the Extension Term, all of
the other terms, covenants and conditions of the Lease shall also apply;
provided, however, that Tenant shall have no further rights to extend the Term.
44. SATELLITE ANTENNA. During the Term, Tenant shall have the
non-exclusive right, subject to relevant regulatory approvals, availability of
space within the roofscreen and Landlord's consent, such consent not to be
unreasonably withheld or delayed, to install a satellite antenna ("Antenna")
within the roofscreen on the roof of the Building in a location satisfactory to
both Landlord and Tenant. Without otherwise limiting the criteria upon which
Landlord may withhold its consent to any proposed Antenna, if Landlord withholds
its consent due to concerns regarding the appearance of the Antenna or the
impact on structural aspects of the Building, such withholding of consent shall
be presumptively reasonable. Tenant shall not be charged any rent for roof
space. Prior to submitting any plans to the City of San Carlos or proceeding
with any installation of an Antenna, Tenant shall submit to Landlord elevations
and specifications for the Antenna. Tenant shall install any approved Antenna at
its sole expense and shall be responsible for any damage caused by the
installation of the Antenna or related to the Antenna. At the end of the Term,
Tenant shall remove the Antenna from its location and repair any damage caused
by such removal.
45. SECOND BUILDING.
(a) Prior to September 1, 1999, for so long as Tenant is not in
default hereunder, Landlord shall not execute a letter of intent or Lease with
another tenant for any portion of the Second Building. The term "Second
Building" shall mean the improvements proposed to be built by Landlord as part
of the Project and more fully described on Exhibit "G"; the Second Building is
commonly known as One Circle Star Way. From and after September 1, 1999 through
October 31, 2000, Tenant shall have the rights described in this Paragraph
("First Right of Offer") to lease the First Right Space (defined below). During
the period of time commencing on September 1, 1999, Landlord shall be free to
negotiate and enter into letters of intent or leases with other parties for all
or any portion of the First Right Space, provided that Landlord shall provide
Tenant with a written "Offer Notice" if Landlord believes that a letter of
intent that it receives from, or submits to, another party is likely to result
in a letter of intent acceptable to Landlord. If such letter of intent is for
the lease of less than the entire Second Building, the Offer Notice will
indicate which portion of the First Right Space the letter of intent covers.
Tenant shall have seven (7) business days (ending at 5:00 p.m. on such seventh
business day) after receipt of the Offer Notice ("Offer Notice Deadline") to
deliver to Landlord the Tenant's Election Notice electing to lease the space
described in the Offer Notice on the terms and conditions set forth in Paragraph
45(c). If Tenant does not deliver to Landlord its Tenant Election Notice within
such seven (7) business day period, Landlord shall be entitled to complete the
transaction with the party with whom Landlord is negotiating or, within one
hundred twenty (120) days following the Offer Notice Deadline, with any other
tenant for the space described in the Offer Notice. The "Tenant Election Notice"
a letter notifying Landlord of Tenant's unconditional election to exercise its
option to lease the space described in the Offer Notice executed by Tenant. To
be effective, the Tenant's Election Notice must contain the following additional
paragraph and be signed by an Authorized Officer of Oracle Corporation:
Oracle Corporation, as Guarantor of the obligations of the
Tenant under that certain Lease dated April __, 1999 by and
between Circle Star Center Associates, L.P. as Landlord and
Network Computer, Inc. as Tenant, hereby agrees that the
additional obligations of Network Computer, Inc. associated
with the foregoing election to lease additional
30
space from Landlord is approved by Oracle Corporation pursuant
to Oracle Corporation's guaranty of the obligations of Network
Computer, Inc. under such Lease.
Oracle Corporation
By: ______________
Its: _____________
An "Authorized Officer" shall mean the President or any Executive
Vice-President, Vice-President or Assistant Vice-President, Treasurer or
Assistant Treasurer of Oracle Corporation. In order for the Tenant Election
Notice to be effective, it must be accompanied by an incumbency certificate
signed by the Secretary or Assistant Secretary of Oracle Corporation certifying
that the person signing the Tenant's Election Notice on behalf of Oracle
Corporation is a corporate officer of Oracle Corporation holding one of the
offices specified above. Unless Tenant's Election Notice meets all of the
foregoing requirements and is delivered to Landlord within the seven (7)
business day period specified above, such document shall be ineffective and may
be disregarded by Landlord.
(b) Notwithstanding anything to the contrary herein, Tenant's rights
under this Paragraph 45 shall not apply to the third or fourth floor of the
Second Building in the event that Landlord elects to lease such space to
Centraal Corporation (or its Affiliates). In the event that Centraal Corporation
(or it Affiliates) leases both the third and fourth floors of the Second
Building, then Centraal Corporation (and its Affiliates) shall be required to
vacate the second floor of the Building and the Second Floor of the Building
shall be subject to Tenant's First Right of Offer under the terms and
conditions of this Paragraph 45; provided, however, there shall be no Tenant
Improvement Allowance for the second floor of the Building except such amount as
is required to a ceiling grid with ceiling tiles and install lighting and HVAC
ducting consistent with the initial space leased by Tenant in the Building, but
in no event shall such Tenant Improvement Allowance exceed $7 per rentable
square feet of space located on the second floor of the Building. The term
"First Right Space" shall mean the Second Building (subject to the right of
Landlord to lease portions thereof to Centraal Corporation (or its Affiliates)
in accordance with the foregoing) and the second floor of the Building if, and
when, Centraal Corporation leases both the third and fourth floors of the Second
Building.
(c) Terms of Lease of First Right Space.
(1) Rent. The Base Rent for the First Right Space leased by
Tenant pursuant to this Paragraph 45 shall be based on a Rentable Area of the
Second Building and 25,179 square feet for the second floor of the Building.
Landlord's architect shall determine the Rentable Area of the Second Building
and each floor thereof, and shall certify such Rentable Area in writing to
Landlord and Tenant. The computations called for in the prior two sentences to
be made by Landlord's architect shall be carried out in a manner consistent with
the computations for the Building and so that the total Rentable Square Feet for
all of the floors of the Second Building shall be the sum of the aggregate
Rentable Area of the Building. The initial Base Rent for each First Right Space
shall be the Monthly Base Rent specified on the Basic Lease information subject
to the adjustment pursuant to Paragraph 3(b)(i) for the Additional Allowance
applicable to the First Right Space but at a rate and for the period described
in Paragraph 45(c)(2) below.
(2) Rent Commencement and Expiration Date. If Tenant elects to
lease all or part of the First Right Space pursuant to this Paragraph 45, the
date Rent shall commence for each First Right Space (the "First Right Space Rent
Commencement Date") shall be a date which is the sum of (i) the number of weeks
of Tenant's Plan Approval Period (defined below) plus (ii) Landlord's
Construction Period (defined below), following the date of Tenant's notice
pursuant to Paragraph 45(a), as extended by the number of days in excess of
three (3) business days that it takes Landlord to review and comment upon any
plans submitted by Tenant to Landlord pursuant to the
31
Work Letter. The term "Tenant's Plan Approval Period" shall mean forty-two (42)
days. The term "Landlord's Construction Period" shall mean the following time
periods depending upon the number of floors that the First Right Space
comprises:
Number of Floors Landlord's Construction Period
---------------- ------------------------------
1 6 Weeks
2 8 Weeks
3 10 Weeks
The above described Landlord's Construction Periods are estimates of the time
period between the date Tenant has completed Tenant's Plans and obtained
Landlord's approval and processed building permits in respect of the Tenant's
Improvements for the First Right Space, on the one hand, and the date Landlord
achieves Substantial Completion of the Tenant Improvements (excluding any Tenant
Delay), on the other hand. The Rent payable by Tenant in respect of any First
Right Space shall be abated for the number of days, if any, that it takes
Landlord to achieve Substantial Completion in excess of the applicable
Landlord's Construction Period (as reasonably increased if Tenant's proposed
improvements are of a character as will require a longer construction period
than the character of the improvements to be constructed in respect of the
Initial Premises), excluding from such period, Tenant Delays.
Landlord and Tenant acknowledge that until the Tenant Improvements in respect of
any First Right Space are completed it will not be possible to compute the
adjustment to Monthly Base Rent attributable to the Additional Allowance.
Accordingly, Landlord and Tenant agree that upon Substantial Completion of such
Tenant Improvements, Landlord shall deliver written notice to Tenant of its
calculation of the adjustment to Monthly Base Rent in respect of the Additional
Allowance. The Monthly Base Rent shall be increased by an amount equal to the
sum determined by amortizing the amount of the Additional Allowance on a
straight line basis at 9% per annum over the period from the date of such
Substantial Completion through a date ten (10) years following the applicable
First Right Space Rent Commencement Date ("Amortization Ending Date").
There shall be no Outside Delivery Date in respect of any First Right Space.
(3) Lease Terms. If Tenant leases any First Right Space
pursuant to this Paragraph 45, in addition to the terms set forth in clauses (1)
and (2) above, this Lease shall automatically be modified to provide as follows:
(A) Both the Initial Premises and the First Right Space
shall be part of the "Premises" under this Lease, such that the term "Premises"
as used in this Lease shall refer collectively to both the Initial Premises and
the First Right Space;
(B) Tenant's Share of Real Estate Taxes and Expenses
shall be adjusted to reflect the increased Rentable Area of the Premises, based
on the ratio of the Rentable Area of the collective Premises to the total
Rentable Area of the Project;
(C) Tenant's right to terminate this Lease pursuant to
Paragraph 2(e) shall be modified by extending the effective date of such
termination to the eighth anniversary of the last First Right Space Rent
Commencement Date (with a corresponding adjustment to the date by which notice
of the exercise of such termination option must be given by Tenant) and such
right to terminate shall apply only to all (and not less than all) of the
portion of the Initial Premises and shall not be applicable to any First Right
Space;
32
(D) Tenant's lease of the First Right Space shall be on
the same terms and conditions as in effect for the Premises from time to time,
except as expressly provided in this Paragraph 45;
(E) The Expiration Date applicable to the Initial
Premises and the First Right Space shall be the date which is ten (10) years
following the last First Right Space Rent Commencement Date. The Base Rent in
respect of any portion of the Initial Premises for the period of the initial
Term (excluding any extension of the Term pursuant to Paragraph 42) in excess of
ten (10) years shall be adjusted by reducing the Base Rent for such excess
period by the amount of the adjustment for the Additional Allowance provided for
in Paragraph 3(b)(i) in respect of the Initial Premises. The Base Rent in
respect of any First Right Space for the period of the initial Term (excluding
any extension of the Term pursuant to Paragraph 42) beyond the Amortization
Ending Date in respect of such First Right Space shall be adjusted by reducing
the Base Rent for such excess period by the amount of the adjustment for the
Additional Allowance provided for in Paragraph 45(c)(2);
(F) All references to percentage of destruction or
taking in Paragraph 20 [Damage by Fire, Etc.] and Paragraph 21 [Eminent Domain]
shall be deemed to mean each of the Building and Second Building separately;
(G) Landlord shall provide the same Base Building
Improvements as provided for the Building (and conduit between the Building and
the Second Building and a covered walk way from the side of the Second Building
nearest the parking garage to the parking garage, subject to receiving all
necessary applicable approvals, which Landlord will use its best efforts to
obtain) together with a Tenant Improvement Allowance (increased by 3 % on each
anniversary of the Commencement Date for the Initial Premises that occurs prior
to the Effective Date of Tenant's written exercise of its right to lease the
First Right Space pursuant to this Paragraph 45) and Additional Allowance in the
same amounts per Rentable Square Foot as shown in the Basic Lease Information
with respect to the initial Premises (except as provided in Paragraph
45(b) above;
(H) The Required Amount of the letter of credit required
pursuant to Paragraph 32(a) and the "Market Capitalization", "Revenue Criteria"
and "Cash Criteria" requirements for the return of the letter of credit pursuant
to Paragraph 32(c) shall be adjusted to the following amounts based upon the
number of additional floors leased by Tenant pursuant to this Paragraph 45 ("M"
means million and "B" means billion):
Additional Number of
Additional Months of Base Rent Market Revenue Cash
Floors plus Additional Charges Capitalization Criteria Criteria
------ ----------------------- -------------- -------- --------
1 12 $850M $100M $65M
2 13 $950M $100M $75M
3 14 $1.1B $125M $85M
4 15 $1.25B $150M $95M
The parties shall execute a written confirmation of the addition of the Second
Building and the foregoing terms and conditions within thirty (30) days after
either party's request, provided that failure to execute such confirmation shall
not affect the automatic modification of the Lease as provided in this Paragraph
45(c).
(1) In the event Tenant leases two floors in the Second
Building, Tenant shall be entitled to one sign on the Second Building similar to
the two signs on the Building to
33
which Tenant is entitled pursuant to Paragraph 41, subject to the terms,
conditions and limitations thereof.
(d) No Brokers. Neither party has had any contact or dealings
regarding the Second Building through any licensed real estate broker or other
person who may claim a right to a commission or finder's fee as a procuring
cause of any lease that might be entered into with respect to the Second
Building as contemplated by this Paragraph 45 or otherwise, except for the
broker named in the Basic Lease Information, whose fees or commission, if
earned, shall be paid by Landlord in accordance with a separate agreement with
Landlord. If any other broker or finder makes a claim for a commission or
finder's fee based upon any such contact, dealings, or communications, the party
through whom the broker or finder makes his claim shall be responsible for such
commission or fee, and all costs and expenses (including reasonable attorneys'
fees) incurred by the other party in defending against such claim.
34
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
LANDLORD:
CIRCLE STAR CENTER ASSOCIATES, L.P.
a California limited partnership
By: M-D Ventures, Inc.
Its: General Partner
By: /s/ Steve Dostart
-----------------------------------
Steve Dostart
Its: Vice President
TENANT:
NETWORK COMPUTER, INC.
A Delaware corporation
By: /s/ Mitchell Kertzman
------------------------------------
Mitchell Kertzman
Its: CEO & President
By: /s/ Nancy J. Hilker
------------------------------------
Nancy J. Hilker
Its: Vice President & Chief Financial
Officer
35
1st Floor
[FLOOR PLAN OMITTED]
Exhibit "A"
Page 1 of 2
3rd/ 4th Floor
[FLOOR PLAN OMITTED]
Exhibit "A"
Page 2 of 2
EXHIBIT "B"
--------------------------------------------------------------------------------
WORK LETTER
1. Base Building: Landlord shall furnish and install the office building,
as defined in the plans listed in the attached Exhibit B-l, "Landlord's Plans,"
at Landlord's expense ("Base Building").
2. Tenant's Plans: Landlord approves Tenant's use of the architectural
firm known as Ehrlich-Rominger ("Tenant's Architect"). On or before April 1,
1999 Tenant shall submit preliminary plans and specifications including
specifications for finishes for Tenant's proposed tenant improvements
("Preliminary Plans"). Landlord shall have three (3) business days to review and
comment upon, or approve, Tenant's Preliminary Plans, and Landlord's approval
shall not be reasonably withheld or delayed so long as Tenant's Preliminary
Plans are consistent with the Basic Standards as defined below. As part of
Landlord's review of Tenant's Preliminary Plans, Landlord will notify Tenant of
those items, if any, which are "long lead time" items (i.e., items which cannot
reasonably be delivered to the job site early enough to maintain the approved
construction schedule without substantial overtime work), specifying in such
notice the delay in Substantial Completion of the Premises which will be caused
by selection of such items ("Long Lead Time Items"), so long as Tenant's
Preliminary Plans specify sufficient detail (e.g., finishes, materials, etc.) to
allow Landlord to make such determination. Thereafter, in the preparation of the
final Tenant's Plans, Tenant shall have the right to replace such Long Lead Time
Items with other specified items that would not be considered Long Lead Time
Items. On or before Tenant's Plan Delivery Date, as specified in the Basic Lease
Information, Tenant shall submit plans and specifications for Tenant's proposed
tenant improvements within the Premises consistent with Tenant's Preliminary
Plans as approved by Landlord ("Tenant's Plans"). Tenant's Plans shall include
all such information required to prepare construction drawings sufficient to
allow Landlord's contractor to bid and construct said improvements, including
but not limited to those items in Exhibit B-2, "Minimum Information Required."
Such plans shall be subject to Landlord's approval, which shall not be
unreasonably withheld so long as the tenant improvements contemplated therein
are generally generic with drop ceilings throughout, perimeter private offices
around at least 25 % of the perimeter of the floor plate, and otherwise
reasonably comparable to the improvements existing at Tenant's existing premises
at 1000 Bridge Parkway ("Basic Standards"). Landlord's contractor shall prepare
complete mechanical, electrical, plumbing, and other engineering plans for the
installation of the heating, ventilating, air conditioning, electrical and
plumbing to be installed in the Premises, on a design/build basis, and the costs
charged by Landlord's contractor for such services shall be included in the
scope of work by Landlord's contractor for the Tenant Improvements and in the
cost estimate described in paragraph 5 below. The engineering fees for plumbing
and fire sprinkler work shall be competitively bid as design/build with
engineered drawings to be included in Landlord's contractor's scope of work for
the Tenant Improvements.
3. Tenant Improvements: Landlord shall cause Landlord's contractor to
construct, at Tenant's expense, subject to the Tenant Allowance as noted below,
the additional work in addition to the Base Building to complete the Premises
("Tenant Improvements") as required by the plans and specifications approved by
Landlord and Tenant pursuant to this Work Letter. The quantities,
EXHIBIT "B"
1
character and manner of installation of all of the foregoing work shall be
subject to the limitations imposed by any applicable regulations, laws,
ordinance, codes and rules.
4. Tenant's Expense: The cost of the Tenant Improvements, as well as space
planning and preparing the working drawings (including Tenant's Plans) for the
Tenant Improvements or any change to the original instruction and/or plans and
specifications shall be paid by Tenant; provided, however, that Landlord shall
provide to Tenant an allowance of the amount specified in the Basic Lease
Information as the "Tenant Allowance". The Tenant Allowance may be applied
toward the following items in respect of the Tenant Improvements: Architectural
and engineering fees, space planning, building permits or other governmental
fees, cost of labor materials and other charges included in the construction
contract for construction of Tenant Improvements. The cost of the Tenant
Improvements to be paid from the Tenant Allowance or by Tenant shall not include
the following (which shall be Landlord's responsibility): (a) costs attributable
to improvements installed outside the demising walls of the Premises; (b) costs
for improvements which are not shown on or described in the Tenant's Plans as
finally approved by Landlord, other than changes required by the City of San
Carlos or other governmental authorities in connection with their review of
Tenant's Plans or issuance of permits, changes necessitated by Tenant Delays (as
defined below), or changes that are requested or approved by Tenant; (c)
attorneys' fees incurred in connection with negotiation of construction
contracts, and attorneys' fees, experts' fees and other costs in connection with
disputes with third parties related to the Tenant Improvements, except to the
extent such disputes result from Tenant's acts or omissions; (d) interest and
other costs incurred by Landlord to finance Landlord's construction costs; (e)
costs incurred as a consequence of delay (other than Tenant Delays),
construction defects or default by Landlord's contractor; (f) costs recoverable
by Landlord upon account of warranties and insurance; (g) restoration costs in
excess of insurance proceeds as a consequence of casualties; (h) penalties and
late charges attributable to Landlord's failure to pay construction costs; (i)
costs to bring the Base Building into compliance with applicable laws and
restrictions at the time building permits are issued for the Tenant
Improvements, including, without limitation, the Americans with Disabilities Act
and environmental law, except to the extent such laws and restrictions are only
triggered by Tenant's acts, improvements or particular use of the Premises; (j)
wages, labor and overhead for overtime and premium time, unless required due to
Tenant Delays; (k) offsite construction management or other general construction
overhead costs incurred by Landlord; and (l) a General Contractor's fee in
excess of that contemplated in Paragraph 5 below. Upon the approval by Landlord
and Tenant of the Landlord's contractor's cost estimate in accordance with
Paragraph 5 below, Tenant shall provide Landlord with a detailed breakdown of
the final costs to be incurred or which have been incurred in connection with
the design and construction of the Tenant Improvements (the "Final Costs").
Prior to the commencement of construction of the Tenant Improvements, Tenant
shall supply Landlord with cash in an amount (the "Over-Allowance Amount") equal
to the difference between the amount of the Final Costs and the Tenant Allowance
(less any portion thereof already disbursed by Landlord, on or before the
commencement of construction of the Tenant Improvements). Interest actually
accrued on the Over-Allowance Amount shall be credited to Tenant and disbursed
with the Over-Allowance Amount. The Over-Allowance Amount shall be disbursed by
Landlord pro rata with the Tenant Allowance as costs are incurred for Tenant
Improvements. Any amounts payable by Tenant under this Work Letter which are in
excess of the Tenant Allowance and Over-Allowance Amount deposited with Landlord
shall be paid by Tenant to Landlord within twenty (20) days of receipt of an
invoice from Landlord. Landlord shall keep full and detailed accounts and shall
exercise such control as may be necessary for the proper financial
EXHIBIT "B"
2
management of the construction of the Tenant Improvements and disbursement of
the Tenant Allowance and Over-Allowance Amount. Tenant and Tenant's
representative shall be afforded access, from time to time, upon advance written
or oral notice to Landlord, to Landlord's records, books, correspondence,
instructions, drawings, receipts, invoices, agreements (including, without
limitation, subcontracts and purchase orders), vouchers and other data relating
to the Tenant Improvements and the disbursement of the Tenant Allowance and
Over-Allowance Amount for the purpose of reviewing, auditing and/or copying such
material. Landlord shall, on not less than a monthly basis on or before the
tenth (10th) day of each month, deliver to Tenant a statement showing in
complete detail (itemized by contractor, subcontractor, vendors, consultants,
etc.) all monies paid out or costs incurred by the Landlord in connection with
the Tenant Improvements and the disbursement of the Tenant Allowance and the
Over-Allowance Amount, during the period commencing on the first day of each
month preceding the then current month and ending on the last day of said
preceding month, together with such supporting documentation as may be
reasonably required by Tenant.
In addition, the Tenant Improvements shall include window shades meeting the
following specifications: Hunter Douglas 8 Mil Atlantis Mini-Blinds; Color: 190
Bright Aluminum.
5. Cost Estimate: Upon receipt of Tenant's Plans, Landlord shall obtain a
cost estimate for the Tenant Improvements from Landlord's contractor, such cost
estimate to include such detail as may be reasonably requested by Tenant.
Landlord shall require that its general contractor secure independent sealed
bids from three (3) unionized subcontractors mutually acceptable to Landlord and
Tenant for each trade whose costs are in excess of five percent (5 %) of the
total cost estimate. All bids shall be submitted to Landlord and Tenant
simultaneously; at Tenant's request, Landlord and Tenant shall open the bids
together at the offices of the Landlord's general contractor. Landlord agrees to
permit Tenant to designate that the lowest bidding subcontractor be selected.
The General Contractor's fee shall be calculated on a "cost plus a fee" basis
where the fee for overhead and profit is four percent (4 %) of cost and the
amount charged for general conditions and supervision is approved by Tenant,
such approval not to be unreasonably withheld. Tenant shall not be charged any
fee for Landlord's oversight of the construction of Tenant's Improvements. If
the cost estimate exceeds the Tenant Allowance, the cost estimate shall be
submitted to Tenant. Tenant shall approve or disapprove such estimate within
seven (7) days. Failure to disapprove within such period shall constitute
approval. If disapproved, Tenant shall provide new sufficient instruction within
such seven (7) days for the revision of plans and cost estimates for approval by
Landlord. Tenant shall be obligated to approve the cost estimate if the cost is
within the Tenant Allowance or any greater budget approved by Tenant. If the
cost estimate is in excess of the Tenant Allowance or such greater budget,
Tenant shall provide new sufficient instruction which will reduce the cost
estimate for the Tenant Improvements to a level acceptable to Tenant and within
any allowance provided by Landlord within ten (10) days after receipt of the
cost estimate. In the event that, after receiving Tenant's approval of the cost
estimate based upon Tenant's Plans as approved by Landlord and Tenant, changes
to such plans are requested by any governmental agency or building inspector in
order to obtain any required permits or to proceed with the construction of the
Tenant Improvements, Tenant shall promptly respond to such governmental request
and cause such request to be withdrawn or Tenant's Plans to be revised to comply
with such request; and if such revision causes an increase in the cost of the
Tenant Improvements such increase shall be made by a change order approved by
Tenant. Any delay in achieving Substantial Completion resulting from Tenant's
response to such governmental request or
EXHIBIT "B"
3
approving such change order shall be a Tenant Delay provided for in Paragraph 9
below.
6. Construction of Tenant Improvements: After Tenant's approval of the
cost estimate for Tenant's Plans, Landlord shall administer and diligently
prosecute the construction of Tenant Improvements in accordance with Tenant's
Plans; provided, however, that Landlord shall not be required to install any
Tenant Improvements which do not conform to the plans and specifications for the
Base Building, or do not conform to any applicable regulations, laws,
ordinances, codes and rules; such conformity shall be the obligation of Tenant
(other than mechanical, electrical, plumbing and engineering components of the
Tenant Improvements that are design/build by Landlord's contractor, the
conformity of which with Landlord's Plans and applicable laws shall be the
obligation of Landlord). After the cost estimate has been approved by Landlord
and Tenant as provided above, neither party shall have the right to require
extra work or change orders with respect to the construction of the Tenant
Improvements without the prior written consent of the other, which consent shall
not be unreasonably withheld or delayed. All change orders shall specify any
change in the cost estimate as a consequence of the change order. All Tenant
Improvements shall be constructed by Landlord's contractor, which shall be a
reputable, unionized general contractor, subject to approval by Tenant which
approval shall not be unreasonably withheld, who will complete the work in a
good and workmanlike manner and in accordance with the approved Tenant's Plans
and relevant laws and codes. Subject to the limitation on the General
Contractor's fee imposed by Paragraph 5, Tenant approves the use of Devcon
Construction, the General Contractor for the Base Building, as the General
Contractor for the Tenant Improvements.
Tenant shall be entitled to receive copies of all of the general contractor's
progress payment request.
7. Tenant's Contractors: Cable TV connections, telephone, data and
audio-visual equipment and wiring, office equipment and computer wiring, and
furniture and security equipment shall be installed by Tenant's contractors and
shall conform with Landlord's contractor's schedule and work of installation and
shall be handled in such a manner as to maintain harmonious labor relations and
as not to interfere with or delay the work of Landlord's contractors. To the
extent that any such improvements furnished and installed by Tenant's
contractors cause Landlord's contractor to be dependent upon the work of
Tenant's contractors in order for Landlord's contractor to complete its work,
any resulting delays in Landlord's contractor's work shall be "Tenant Delays"
(as defined in Paragraph 9 below). Tenant's contractors, subcontractors and
labor shall be subject to approval by Landlord which approval shall not be
unreasonably withheld or delayed and shall be subject to the reasonable
administrative supervision of Landlord's general contractor and reasonable rules
of the site. Contractors and subcontractors engaged by Tenant shall employ
laborers and means to insure, so far as may be possible, the progress of the
work without interruption on account of strikes, work stoppage or similar causes
for delay. Landlord shall give access and entry to the Leased Premises to
Tenant's contractors as may be reasonably necessary during the course of
construction of the Tenant Improvements, and at various points during
construction as each floor progresses, subject to the requirements of this
Paragraph 7; provided, however, that if such entry is prior to the first day of
the Term such entry shall be subject to all of the terms and conditions of this
Lease except payment of Rent and Additional Charges and Tenant shall not be
allowed to commence business in the Premises.
8. Substantial Completion/Punch List: "Substantial Completion" shall be
defined as when Landlord's contractor has substantially completed all work to be
performed by Landlord in
EXHIBIT "B"
4
accordance with Tenant's Plans, subject only to (i) the completion or correction
of items on a punch list to be prepared jointly by Landlord, Tenant and their
respective architects which do not substantially interfere with Tenant's use or
occupancy of the Premises (the "Punchlist"), (ii) a certificate of occupancy, or
its equivalent, for the Premises having been obtained, (iii) all utilities
having been turned on and available for use, (iv) all Building common areas
having been substantially completed, and (v) Tenant having reasonable access to
the Premises and use of parking to the extent required by the Lease. The items
on the Punchlist shall be completed by Landlord's contractor promptly using
commercially reasonable efforts.
Landlord agrees to include a provision in its construction contract with it's
general contractor requiring retention of one hundred fifty percent (150%) of
the estimated amount of the cost to complete the items on the Punchlist until
the Punchlist is fully completed.
9. Tenant Delays: "Tenant Delays" shall be defined as those delays caused
in achieving Substantial Completion due to: (a) Tenant's failure to submit (i)
Tenant's Plans, (ii) approval of the cost estimates, or (iii) sufficient
instruction to change Tenant's Plans as a result of disapproval of a cost
estimate on or before the dates or time periods called for; (b) Tenant's
change(s) in plans and specifications after said dates that actually delay
construction, but only to the extent that Tenant received prior written notice
from the Landlord of the amount of delay associated with the changes before the
changes were finally approved and authorized by Tenant; (c) Tenant's request for
Long Lead Time Items; (d) any delays caused by Tenant's contractors as set forth
in Paragraph 7, including, without limitation, strikes, work stoppage or similar
delay caused by labor disharmony between Tenant's contractors and Landlord's
contractor, and delays caused by Landlord's contractor's dependence on any work
clone by Tenant's contractors; or (e) other delays caused by Tenant in
construction; provided, however, no Tenant Delay shall be deemed to have
occurred unless and until Landlord has given written notice to Tenant specifying
any action or inaction which Landlord is aware of and that may cause a Tenant
Delay. If Tenant does not take appropriate measures within one (1) business day
after Tenant's receipt of such notice to prevent such action or inaction from
occurring, then a Tenant Delay, as set forth in such notice, shall be deemed to
have occurred commencing as of the date Tenant received such notice and
continuing for the number of days the Substantial Completion of the Premises was
in fact delayed as a direct result of such action or inaction; provided,
further, that no such notice shall be required in order for Tenant Delay to be
deemed to have occurred if such delay results from Tenant's failure to perform
any obligation within a specific date or time period.
10. Commencement Date: The Premises shall be deemed completed and
possession delivered and Tenant shall accept the Premises upon Substantial
Completion. Notwithstanding anything to the contrary in the Lease, effective
upon delivery of the Premises to Tenant, Landlord does hereby warrant that, (a)
the construction (as opposed to the design which is Tenant's responsibility) of
the Tenant Improvements was performed in accordance with all rules, regulations,
codes, statutes, ordinances, and laws of all applicable governmental and
quasi-governmental authorities and in a good and workman-like manner, (b) all
materials and equipment installed therein was new and otherwise of good quality,
(c) the electrical, plumbing, and mechanical systems servicing the Premises are
in working order and in good condition, and (d) the Base Building is in good
condition and water tight. The foregoing warranties shall automatically expire
one year after Substantial Completion. Tenant's obligation under the Lease to
pay Rent and Additional Charges
EXHIBIT "B"
5
shall commence upon the later of (i) the Scheduled Commencement Date, as
specified in the Basic Lease Information, or (ii) Substantial Completion. If
Landlord shall be delayed in substantial completion as a result of Tenant
Delays, then the Commencement Date, and Tenant's obligation to begin paying Base
Rent and Additional Charges, shall be adjusted to reflect what the Commencement
Date would have been if there had been no Tenant Delays. Notwithstanding the
foregoing, if Tenant Delays occur and, as a result thereof, Landlord reasonably
anticipates that Substantial Completion will not occur on or before the
Scheduled Commencement Date, then at Landlord's sole election and in addition to
any other remedies that may be available to Landlord under the Lease or at law
or in equity, at Landlord's written request Tenant shall commence payment of
Base Rent and Additional Charges on the date one month following the Scheduled
Commencement Date. If Landlord makes such election, then the installment of Base
Rent, and any installments of any components of Additional Charges, that are
first due after Substantial Completion occurs shall be adjusted to reflect the
actual Commencement Date. Landlord's election, as set forth above, shall not
constitute a waiver of any default by Tenant or any other remedy available to
Landlord as a result thereof, to the extent the circumstances giving rise to a
Tenant Delay constitute a default by Tenant hereunder or under the Lease. Within
seven (7) days after written request of Landlord, Tenant agrees to give Landlord
a letter confirming the Commencement Date and certifying that Tenant has
accepted delivery of the Premises and that the condition of the Premises
complies with Landlord's obligations hereunder.
EXHIBIT "B"
6
EXHIBIT "B-1"
--------------------------------------------------------------------------------
LANDLORD'S PLANS
The plans and specifications related to Two Circle Star Way as drawn or
assembled by Kenneth Rodrigues & Partners, Inc. as called out below:
GENERAL
A0.0 COVER SHEET 1/22/98
A0.1 GENERAL INFORMATION SHEET/ 1/22/98
TITLE 24 ENERGY COMPLIANCE
CIVIL
C0.2 STORM WATER POLLUTION PREVENTION PLAN
C0.1 LAYOUT AND PAVING PLAN 11/14/97
C1.2 LAYOUT AND PAVING PLAN 12/19/97
C2.1 GRADING PLAN 11/14/97
C2.2 GRADING PLAN 11/14/97
C3.1 UTILITY PLAN 11/14/97
C3.2 UTILITY PLAN 11/14/97
C4.1 DETAILS 11/14/97
C4.2 DETAILS 11/14/97
C4.3 DETAILS 12/19/97
ARCHITECTURAL
A2.1 BUILDING ONE FIRST FLOOR PLAN 2/26/98
A2.2 BUILDING ONE SECOND FLOOR PLAN 1/22/98
A2.3 BUILDING ONE THIRD FLOOR PLAN 1/22/98
A2.4 BUILDING ONE FOURTH FLOOR PLAN 1/22/98
A2.5 ENLARGED CORE PLAN 1/22/98
A2.6 ENLARGED BATHROOM PLANS 1/22/98
A3.1 BUILDING ONE ROOF PLAN 1/22/98
A4.1 BUILDING ONE ELEVATIONS 2/26/98
A4.2 BUILDING ONE ELEVATIONS 1/22/98
A5.1 BUILDING SECTION 1/22/98
A5.2 TYPICAL WALL SECTIONS 1/22/98
A7.1 REFLECTED CEILING PLANS 3/5/97
A7.2 ENLARGED STAIR PLANS AND SECTIONS 1/22/98
A7.3 ENLARGED ELEVATOR PLANS AND SECTIONS 1/22/98
A7.4 DOOR AND HARDWARE SCHEDULE/ROOM 3/11/98
FINISH SCHEDULE
A8.1 EXTERIOR DETAILS 1/22/98
A8.2 DOOR/WINDOW DETAILS 1/22/98
A8.3 ROOF DETAILS 1/22/98
A9.1 WALL TYPES 1/22/98
A9.2 INTERIOR DETAILS 1/22/98
EXHIBIT "B-1"
1
A9.3 UL ASSEMBLIES 11/14/97
STRUCTURAL
S0.1 GENERAL NOTES 10/6/97
S2.1 BUILDING ONE FOUNDATION/FIRST 10/6/97
FLOOR FRAMING PLAN
S2.2 BUILDING ONE 2ND FLR. FRAMING PLAN 10/6/97
S2.3 BUILDING ONE 3RD FLR. FRAMING PLAN 10/6/97
S2.4 BUILDING ONE 4TH FLR. FRAMING PLAN 10/6/97
S2.5 BUILDING ONE ROOF FRAMING PLAN 10/6/97
S2.5A BUILDING ONE ROOF SCREEN/SLAB 10/6/97
REINFORCING PLAN
S3.1 TYPICAL CONCRETE DETAILS 7/23/97
S3.2 CONCRETE DETAILS NO. 1 10/6/97
S3.3 CONCRETE DETAILS NO. 2 10/6/97
S3.4 CONCRETE DETAILS NO. 3 10/6/97
S5.1 TYPICAL METAL DECK DETAILS NO. 1 10/6/97
S5.2 TYPICAL METAL DECK DETAILS NO. 2 10/6/97
S5.3 TYPICAL STEEL DETAILS 10/6/97
S5.4 COLUMN SCHEDULE AND DETAILS 10/6/97
S5.5 BRACED FRAME ELEVATIONS AND DETAILS 10/6/97
S5.6 STEEL DETAILS NO. 1 10/6/97
S5.7 STEEL DETAILS NO. 2 10/6/97
S9.1 PRECAST PANEL SUPPORT PLAN 10/6/97
S9.2 PRECAST PANEL SUPPORT PLAN 7/30/97
S9.3 PRECAST PANEL SUPPORT DETAILS 10/6/97
LANDSCAPE
L-1 PHASE ONE NOTES AND LEGEND 2/6/98
L-2 PHASE ONE LAYOUT AND GRADING PLAN 2/6/98
L-3 PHASE ONE PLATING PLAN 2/6/98
L-4 PHASE ONE IRRIGATION 2/6/98
L-5 PHASE ONE DETAILS 7/28/97
L-6 PHASE ONE DETAILS 11/26/97
L-7 PHASE ONE DETAILS 2/6/98
MECHANICAL
AC0.01 TITLE 24, DRAWING SCHEDULE, MANDATORY 3/10/98
MEASURES, AND GENERAL NOTES 3/10/98
AC0.02 EQUIPMENT SCHEDULE 3/10/98
AC1.01 FIRST FLOOR HVAC PLAN 3/10/98
AC1.02 SECOND FLOOR HVAC PLAN 3/10/98
AC1.03 THIRD FLOOR HVAC PLAN 3/10/98
AC1.04 FOURTH FLOOR HVAC PLAN 3/10/98
AC1.05 ROOF PLAN 3/10/98
AC1.06 ROOF COORDINATION PLAN 3/10/98
AC2.01 PIPING SCHEMATICS AND DETAILS 3/10/98
EXHIBIT "B-1"
2
AC7.01 WIRING AND CONTROLS 3/10/98
ELECTRICAL
CIR-E0 COVER SHEET 7/23/97
CIR-SE1 SITE LIGHTING PLAN 7/23/97
CIR-SE2 SITE LIGHTING PLAN 7/23/97
CIR-E1 FIRST FLOOR LIGHTING PLAN 7/23/97
CIR-E2 SECOND FLOOR LIGHTING PLAN 7/23/97
CIR-E3 THIRD FLOOR LIGHTING PLAN 7/23/97
CIR-E4 FOURTH FLOOR LIGHTING PLAN 7/23/97
CIR-E5 FIRST FLOOR POWER PLAN 7/23/97
CIR-E6 SECOND FLOOR POWER PLAN 7/23/97
CIR-E7 THIRD FLOOR POWER PLAN 7/23/97
CIR-E8 FOURTH FLOOR POWER PLAN 7/23/97
CIR-E9 FIRST FLOOR MECHANICAL PLAN 7/23/97
CIR-E10 SECOND FLOOR MECHANICAL PLAN 7/23/97
CIR-E11 THIRD FLOOR MECHANICAL PLAN 7/23/97
CIR-E12 FOURTH FLOOR MECHANICAL PLAN 7/23/97
CIR-E13 ROOF MECHANICAL PLAN 7/23/97
CIR-E14 SINGLE LINE DIAGRAM 11/24/97
CIR-E15 PANEL SCHEDULES 7/23/97
CIR-E16 PANEL SCHEDULES 7/23/97
CIR-E17 TITLE 24 7/23/97
PLUMBING
P1A 1ST FLOOR BELOW GRADE 12/18/97
P1B 1ST FLOOR ABOVE GRADE 12/18/97
P2 2ND FLOOR 12/18/97
P3 3RD FLOOR 12/18/97
P4 4TH FLOOR 12/18/97
P5 ROOF PLAN 12/18/97
FIRE ALARM SYSTEM
FA-1 FIRST FLOOR BUILDING ONE 12/5/97
FA-2 SECOND FLOOR BUILDING ONE 12/5/97
FA-3 THIRD FLOOR BUILDING ONE 12/5/97
FA-4 FOURTH FLOOR BUILDING ONE 12/5/97
FA-5 ROOF PLAN BUILDING ONE 12/5/97
EXHIBIT "B-1"
3
EXHIBIT "B-2"
--------------------------------------------------------------------------------
MINIMUM INFORMATION REQUIRED
FLOOR PLANS INDICATING:
1. Location and type of all partitions;
2. Location and type of all doors. Indicate hardware and provide keying
schedule;
3. Location and type of glass partitions, windows and doors. Indicate
framing if not Building Standard;
4. Location of telephone equipment room;
5. Indicate critical dimensions necessary for construction;
6. Location of all Building Standard electrical items (outlets,
switches, telephone outlets). Building Standard lighting will be
subject to approval by Landlord's architect and contractor;
7. Location and type of all non-Building Standard electrical items,
including lighting.
8. Location and type of equipment that will require special electrical
requirements. Provide manufacturer's specifications for use and
operation;
9. Location, weight per square foot, and description of any
exceptionally heavy equipment or filing system exceeding 50 lbs. psf
live load;
10. Requirements for special air conditioning or ventilation;
11. Type and color of floor covering;
12. Location, type, and color of wall covering;
13. Locations, type and color of; Building Standard and non-Building
Standard paint or finishes;
14. Location and type of plumbing;
15. Location and type of kitchen equipment.
EXHIBIT "B-2"
1
DETAILS SHOWING:
1. All millwork with verified dimensions (such dimensions to be
verified by Landlord's contractor in the field) and dimensions of
all equipment to be built in;
2. Corridor entrance;
3. Bracing or support of special walls, glass partitions, etc., if
desired.
EXHIBIT "B-2"
2
EXHIBIT "C"
--------------------------------------------------------------------------------
RULES AND REGULATIONS
1. Sidewalks, halls, passages, exits, entrances, elevators, escalators and
stairways shall not be obstructed by Tenant or used by Tenant for any purpose
other than for ingress to and egress from the Premises. The halls, passages,
exits, entrances, elevators and stairways are not for the use of the general
public and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence, in the judgment of Landlord, shall
be prejudicial to the safety, character, reputation and interests of the
Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom Tenant normally deals in
the ordinary course of Tenant's business unless such persons are engaged in
illegal activities. Tenant, and Tenant's employees or invitees, shall not go
upon the roof of the Building, except as authorized by Landlord.
2. No sign, placard, picture, name, advertisement or notice visible from
the exterior of the Premises shall be inscribed, painted, affixed, installed or
otherwise displayed by Tenant either on the Premises or any part of the Building
without the prior written consent of Landlord, and Landlord shall have the right
to remove any such sign, placard, picture, name, advertisement or notice without
notice to and at the expense of Tenant.
If Landlord shall have given such consent to Tenant at any time,
whether before or after the execution of the Lease, such consent shall not in
any way operate as a waiver or release of any of the provisions hereof or of the
Lease, and shall be deemed to relate only to the particular sign, placard,
picture, name, advertisement or notice so consented to by Landlord and shall not
be construed as dispensing with the necessity of obtaining the specific written
consent of Landlord with respect to any other such sign, placard, picture, name,
advertisement or notice. All approved signs or lettering on doors and walls
shall be printed, painted, affixed or inscribed at the expense of Tenant by a
person approved by Landlord.
3. The bulletin board or directory of the Building will be provided
exclusively for the display of the name and location of tenants (including
subtenants) only and Landlord reserves the right to exclude any other names
therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung or placed
in, or used in connection with, any window, door or patio on the Premises
without the prior written consent of Landlord. In any event with the prior
written consent of Landlord, all such items shall be installed inboard of
Landlord's window coverings and shall not in any way be visible from the
exterior of the Building. No articles shall be placed or kept on the window
sills so as to be visible from the exterior of the Building. No articles shall
be placed against glass partitions or doors which might appear unsightly from
outside the Building.
5. Landlord reserves the right to exclude from the Building between the
hours of 6:00 p.m. and 8:00 a.m. and at all hours on Saturdays, Sundays and
holidays all persons who do not possess a building access card provided by
Landlord or who are not accompanied by Tenant's employees. Landlord will furnish
access cards to persons for whom Tenant requests the same in writing. Tenant
shall be responsible for all persons from who it requests access cards and shall
be liable to Landlord for all
EXHIBIT "C"
1
acts of such persons. Landlord shall in no case be liable for damages for error
with regard to the admission to or exclusion from the Building of any person.
During the continuance of any invasion, mob, riot, public excitement
or other circumstance rendering such action advisable in Landlord's opinion,
Landlord reserves the right to prevent access to the Building by closing the
doors, or otherwise, for the safety of tenants and protection of the Building
and property in the Building.
6. Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises unless otherwise agreed to by
Landlord in writing. Except with the written consent of Landlord, no person or
persons other than those approved by Landlord shall be permitted to enter the
Building for the purpose of cleaning the same. Tenant shall not cause any
unnecessary labor by reason of Tenant's carelessness or indifference in the
preservation of good order and cleanliness of the Premises. Landlord shall not
in any way be responsible to Tenant for any loss of property on the Premises,
however occurring, or for any damage done to the effects of Tenant by the
janitor or any other employee or any other person.
7. Tenant shall not obtain for use upon the Premises ice, drinking water,
food, beverage, towel or other similar services except through facilities
approved in writing by Landlord and under regulations fixed by Landlord, or
accept barbering or bootblacking services in the Premises except from persons
authorized by Landlord. Tenant may have a Lunchroom/Break room in the Premises
that has a refrigerator and microwave.
8. Tenant shall see that the doors of the Premises are closed and securely
locked and must observe strict care and caution that all water faucets or water
apparatus are entirely shut off before Tenant or its employees leave such
Premises, and that all utilities shall likewise be carefully shut off, so as to
prevent waste or damage. On multiple-tenancy floors, all tenants shall keep the
door or doors to the Building corridors closed at all times except for ingress
and egress.
9. As more specifically provided in the Lease, Tenant shall not waste
electricity, water or air conditioning and agrees to cooperate fully with
Landlord to assure the most effective operation of the Building's heating and
air conditioning, and shall refrain from attempting to adjust any controls other
than room thermostats installed for Tenant's use.
10. Tenant shall not alter any lock or access device or install a new or
additional lock or access device or any bolt on any door of the Premises without
the prior written consent of Landlord. If Landlord shall give its consent,
Tenant shall in each case furnish Landlord with a key for any such lock.
11. Tenant shall not make or have made additional copies of any keys or
access devices provided by Landlord. Tenant, upon the termination of the
tenancy, shall deliver to Landlord all the keys or access devices for the
Building, offices, rooms and toilet rooms which shall have been furnished to
Tenant or which Tenant shall have had made. In the event of the loss of any keys
or access devices so furnished by Landlord, Tenant shall pay Landlord therefor.
12. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind
EXHIBIT "C"
2
whatsoever shall be thrown therein, and the expense of any breakage, stoppage or
damage resulting from the violation of this rule by Tenant or Tenant's employees
or invitees shall be borne by Tenant.
13. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline or inflammable or combustible fluid or material other than
limited quantities necessary for the operation or maintenance of office or
office equipment. Tenant shall not use any method of heating or air conditioning
other than supplied by Landlord.
14. Tenant shall not use, keep or permit to be used or kept in the
Premises any foul or noxious gas or substance or permit or suffer the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors and/or vibrations or
interfere in any way with other tenants or those having business therein, nor
shall any animals or birds be brought or kept in or about the Premises or the
Building.
15. No cooking shall be done or permitted by Tenant on the Premises
(except that use by the Tenant of Underwriter's Laboratory approved equipment
for the preparation of coffee, tea, hot chocolate and similar beverages for
Tenant and its employees shall be permitted, provided that such equipment and
use are in accordance with all applicable federal, state and city laws, codes,
ordinances, rules and regulations), nor shall Premises be used for lodging. See
Paragraph 7.
16. Except with the prior written consent of Landlord, Tenant shall not
sell, or permit the sale, at retail, of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise in or on the Premises, nor
shall Tenant carry on, or permit or allow any employee or other person to carry
on, the business of stenography, typewriting or any similar business in or from
the Premises for the service or accommodation of occupants of any other portion
of the Building, nor shall the Premises be used for the storage of merchandise
(other than incidental merchandise that Tenant may have on hand from time to
time) or for manufacturing of any kind, or the business of a public barber shop
or beauty parlor, nor shall the Premises be used for any improper, immoral or
objectionable purpose, or any business or activity other than that specifically
provided for in Tenant's Lease.
17. If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain and comply with Landlord's reasonable
instructions in their installation.
18. Landlord will direct electricians as to where and how telephone,
telegraph and electrical wires are to be introduced or installed. No boring or
cutting for wires will be allowed without the prior written consent of Landlord.
The location of burglar alarms, telephones, call boxes and other office
equipment affixed to the Premises shall be subject to the written approval of
Landlord, which shall not be unreasonably withheld.
19. Tenant shall not install any radio or television antenna (not
including the satellite antenna referred to in Paragraph 44 of the Lease),
loudspeaker or any other device on the exterior walls or the roof of the
Building. Tenant shall not interfere with radio or television broadcasting or
reception from or in the Building or elsewhere.
20. Tenant shall not lay linoleum, tile, carpet or any other floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved in writing by Landlord.
EXHIBIT "C"
3
The expense of repairing any damage resulting from a violation of this rule by
Tenant or Tenant's contractors, employees or invitees or the removal of any
floor covering shall be borne by Tenant.
21. The freight elevator shall be available for use by all tenants in the
Building, subject to such reasonable scheduling as Landlord in its discretion
shall deem appropriate. No furniture, freight, equipment, materials, supplies,
packages, merchandise or other property will be received in the Building or
carried up or down the elevators except between such hours and in such elevators
as shall be designed by Landlord.
Landlord shall have the right to prescribe the weight, size, and
position of all safes, furniture or other heavy equipment brought into the
Building. Safes or other heavy objects shall, if considered necessary by
Landlord, stand on wood strips of such thickness as determined by Landlord to be
necessary to properly distribute the weight thereof. Landlord will not be
responsible for loss of or damage to any such safe, equipment or property from
any cause, and all damage done to the Building by moving or maintaining any such
safe, equipment or other property shall be repaired at the expense of Tenant.
Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building shall be placed and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord.
22. Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Tenant shall not mark, use double-sided adhesive tape
on, or drive nails, screw or drill into, the partitions, woodwork or plaster or
in any way deface the Premises or any part thereof, without repairing any
resulting damage. Tenant may hang pictures on walls in the Premises. Any damage
to the walls caused by molley bolts, or like hanging materials, will be repaired
by Tenant.
23. There shall not be used in any space, or in the public areas of the
Building, either by Tenant or others, any hand trucks except those equipped with
rubber tires and side guards or such other material-handling equipment as
Landlord may approve. No other vehicles of any kind shall be brought by Tenant
into or kept in or about the Premises.
24. Tenant shall store all trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in the
jurisdiction in which the Premises is located, without violation of any law or
ordinance governing such disposal. All trash, garbage and refuse disposal shall
be made only through entryways and elevators provided for such purposes and at
such times as Landlord shall designate.
25. Canvassing, soliciting, distribution of handbills or any other written
material and peddling in the Building are prohibited, and Tenant shall cooperate
to prevent the same. Tenant shall not make room-to-room solicitation of business
from other tenants in the Building.
EXHIBIT "C"
4
26. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name and address of the Building.
27. Landlord reserves the right to exclude or expel from the Building any
person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the rules or regulations of the
Building.
28. Without the prior written consent of Landlord, Tenant shall not use
the name of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address. Tenant may Use Project's name on
its stationery and business cards.
29. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
30. Tenant assumes any and all responsibility for protecting the Premises
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed, unless caused by the gross negligence or
willful misconduct of Landlord, its agents, servants, or employees ("Landlord
Parties").
31. The requirements of Tenant will be attended to only upon application
at the office of the Building by an authorized individual. Employees of Landlord
shall not perform any work or do anything outside of their regular duties unless
under special instructions from Landlord, and no employees will admit any person
(Tenant or otherwise) to any office without specific instructions from Landlord.
32. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any such
Rules and Regulations against any or all tenants of the Building.
33. Landlord reserves the right to make such other and reasonable rules
and regulations as in its judgment may from time to time be needed for safety
and security, for care and cleanliness of the Building and for the preservation
of good order therein. Tenant agrees to abide by all such Rules and Regulations
hereinafter stated and any additional rules and regulations which are adopted.
No new Rule or Regulation shall be designed to discriminate solely against
Tenant.
34. Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents, clients, customers,
invitees and guests.
35. Unless otherwise defined, terms used in these Rules and Regulations
shall have the same meaning as in the Lease.
EXHIBIT "C"
5
EXHIBIT "D"
--------------------------------------------------------------------------------
FORM OF TENANT ESTOPPEL CERTIFICATE
TO: _________________________________, or Assignee ("Lender"), and/or whom else
it may concern:
THIS IS TO CERTIFY THAT:
1. The undersigned is the lessee ("Tenant") under that certain lease dated
________________, 19 __, ("Lease"), by and between
___________________________________________ as lessor ("Landlord") and
________________________________________ as Tenant, covering those certain
premises commonly known and designated as ________________________________
___ ("Premises").
2. The Lease has not been modified, changed, altered, assigned, supplemented
or amended in any respect (except as indicated below; if none, state
"none"). To the best of Tenant's knowledge, the Lease is not in default
and is valid and in full force and effect on the date hereof. The Lease is
the only Lease or agreement between the Tenant and the Landlord affecting
or relating to the Premises. The Lease represents the entire agreement
between the Landlord and the Tenant with respect to the Premises.
______________.
3. The Tenant is not entitled to, and has made no agreement(s) with the
Landlord or its agents or employees concerning free rent, partial rent,
rebate of rent payments, credit or offset or deduction in rent, or any
other type of rental concession, including, without limitation, lease
support payments or lease buy-outs (except as indicated below; if none,
state "none"). ___________________________________________________________
_________________________________________________________________________.
4. The Tenant has accepted and now occupies the Premises, and is and has been
open for business since ______________, 19 ____. The Lease term began
____________________, 19 ___. The termination date of the present term of
the Lease, excluding unexercised renewals, is ________________________,
19____.
5. The Tenant has paid rent for the Premises for the period up to and
including ______________ __, 19 ____. The fixed minimum rent and any
additional rent (including the Tenant's share of tax increases and cost of
living increases) payable by the Tenant presently is $ ____________ per
month. No such rent has been paid more than two (2) months in advance of
its due date, except as indicated below (if none, state "none"). The
Tenant's security deposit is $ ________
_________________________________________________________________________.
6. To the best of Tenant's knowledge, no event has occurred and no condition
exists which, with the giving notice or the lapse of time or both, will
constitute a default under the Lease. To the
EXHIBIT "D"
1
best of Tenant's knowledge, the Tenant has no existing defenses or offsets
against the enforcement of this Lease by the Landlord, except
______________________________.
7. The Tenant has received or will receive payment or credit for tenant
improvement work in the total amount of $ ______________________________
(or if other than cash, describe below; if none, state "none"). To the
best of Tenant's knowledge, all conditions under this Lease to be
performed to date by the Landlord have been satisfied. All required
contributions by the Landlord to the Tenant on account of the Tenant's
tenant improvements have been received by the Tenant, except _____________
_________________________________________________________________________.
8. The Lease contains, and the Tenant has, no outstanding options or rights
of first refusal to purchase the Premises or any part thereof or all or
any part of the real property of which the Premises are a part.
9. No actions, whether voluntary or otherwise, are pending against the Tenant
or any general partner of the Tenant under the bankruptcy laws of the
United States or any state thereof.
10. The Tenant has not sublet the Premises to any sublessee and has not
assigned any of its rights under the Lease, except as indicated below (if
none, state "none"). No one except the Tenant and its employees occupies
the Premises. _____________________________________ ______________.
11. The address for notices to be sent to the Tenant is as set forth in the
Lease.
12. Except as otherwise provided in the Lease, the Premises have not been used
and the Tenant does not plan to use the Premises for any activities which,
directly or indirectly, involve the use, generation, treatment, storage,
transportation or disposal of any petroleum product or any toxic or
hazardous chemical, material, substance, pollutant or waste.
13. (INCLUDE THIS PARAGRAPH FOR LOAN TRANSACTIONS.) The Tenant acknowledges
that all the interest of the Landlord in and to the Lease is being duly
assigned to Lender, and that pursuant to the terms thereof, all rent
payments under the Lease shall continue to be paid to the Landlord in
accordance with the terms of the Lease unless and until the Tenant is
notified otherwise in writing by Lender or its successors or assigns.
It is particularly noted that:
(a) Under the provisions of this assignment, the Lease cannot be
terminated (either directly or by the exercise of any option which
could lead to termination) or modified in any of its terms, or
consent be given to the release of any party having liability
thereon, without the prior written consent of Lender or it
successors or assigns, and without such consent, no rent may be
collected or accepted more than two (2) months in advance.
(b) The interest of the Landlord in the Lease has been assigned to
Lender for the purposes specified in the assignment. Lender, or its
successors or assigns, assumes no duty, liability or obligation
whatsoever under the Lease or any extension or renewal thereof.
EXHIBIT "D"
2
(c) Any notices sent to Lender or its affiliates should be sent by
registered mail and addressed as follows: _________________________.
14. Tenant agrees to give any Mortgagee and/or Trust Deed Holders
("Mortgagee"), by registered mail, a copy of any notice of default served
upon the Landlord, provided that prior to such notice Tenant has been
notified in writing (by way of Notice of Assignment of Rents and Leases,
or otherwise), of the address of such Mortgagee. Tenant further agrees
that if Landlord shall have failed to cure such default within the time
provided for in this Lease, then the Mortgagee shall have an additional
sixty (60) days within which to cure such default of it such default
cannot be cured within that time, then such additional time as may be
necessary to cure such default shall be granted if within such sixty (60)
days Mortgagee has commenced and is diligently pursuing the remedies
necessary to cure such default (including, but not limited to,
commencement of foreclosure proceedings, if necessary to effect such
cure), in which event the Lease shall not be terminated while such
remedies are being so diligently pursued.
15. This certification is made to induce Lender to make certain fundings,
knowing that Lender relies upon the truth of this certification in
disbursing said funds.
16. The undersigned is authorized to execute this Tenant Estoppel Certificate
on behalf of the Tenant.
DATED THIS ____________________ DAY OF __________________, 19________.
________________________________________
(Tenant)
By: ____________________________________
Its:________________________________
Date:
EXHIBIT "D"
3
The undersigned hereby certifies that the certifications set forth above are
true as of the date hereof.
________________________________________
(Owner/Landlord)
By: ____________________________________
Its:________________________________
Date:
EXHIBIT "D"
4
EXHIBIT "E"
--------------------------------------------------------------------------------
ENCUMBRANCES
1. Ground Lease: That certain Lease between Mozad, L.P., as Lessor and
Circle Star Center Associates, L.P., as Lessee, dated
October 15, 1997.
2. C,C&R's: "Declaration of Covenants, Conditions and Restrictions"
dated June 24, 1997 by and between Mozad, L.P. and
Homestead Village Incorporated.
3. Other: "Approved Conditional Use Permit - Office Complex, 1717
Industrial Road, San Carlos, CA 94070" effective date
June 12, 1997.
EXHIBIT "E"
1
FORM OF LETTER OF CREDIT
DATE: ____________________
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER: _________________
BENEFICIARY APPLICANT
_____________________________________ ___________________________________
_____________________________________ ___________________________________
_____________________________________ ___________________________________
_____________________________________ ___________________________________
ATTN:________________________________ ___________________________________
AMOUNT: $__________________________
EXPIRATION:________________________
We hereby establish in your favor our irrevocable standby letter of credit
no. ___________ which is available with [bank] by payment against presentation
of the original of this letter of credit and your draft at sight drawn on
[bank].
This letter of credit shall be deemed automatically extended without
amendment for periods of one (1) year unless at least 30 (thirty) days prior to
the then current expiration date, we notify you by registered mail or overnight
courier service at the above address, that we elect not to renew this letter of
credit.
This letter of credit is transferable. Transfer of this letter of credit
is subject to our receipt of our standard form of beneficiary's instructions
regarding the transfer accompanied by the original letter of credit and
amendment(s) if any. Costs or expenses of such transfer shall be for the account
of the beneficiary.
We hereby agree with the beneficiary that the draft drawn under and in
compliance with the terms of this letter of credit will be duly honored upon
presentation, as specified herein.
This letter of credit is subject to the uniform customs and practice for
documentary letter of credit (1993 revision) international chamber of commerce
publication no. 500 and engaged us pursuant to the terms therein.
EXHIBIT "F"
Exhibit "G"
Description of Second Building: The Second Building is the same size and a
mirror image of the Building and will be located as set forth on Schedule 1
attached hereto and incorporated herein by reference.
EXHIBIT "G"
[MAP OMITTED]
SCHEDULE 1 TO
EXHIBIT "G"
Two Circle Star Way (San Carlos, CA) Lease Agreement - Circle Star Center Associates LP and Network Computer Inc.
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