\n 8\/1\/01-7\/31\/02 $327,888.58
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n At the end of the 12th month after
\n the actual Lease Commencement Date
\n and at the end of each 12 month
\n period thereafter (until the Lease
\n Expiration Date), Base Monthly Rent
\n shall be increased at a rate of 3.5%
\n per annum compounded
\n annually.<\/p>\n
Permitted Use: General Office, research and
\n development, marketing, sales,
\n manufacturing, distribution,
\n warehouse and other related lawful
\n uses.<\/p>\n
Exhibits: The term “Exhibits” shall mean the
\n Exhibits of this Lease which are
\n described as follows:<\/p>\n
Exhibit “A” — Site Plan showing the
\n Property, the Outside Areas and
\n delineating the Building in which
\n the Leased Premises are to be
\n located.<\/p>\n
Exhibit “B” — Work Letter<\/p>\n
Exhibit “C” — Lease Commencement
\n Date Certificate<\/p>\n
Exhibit “D” — Form of Tenant
\n Estoppel Certificate<\/p>\n
Exhibit “E” — Form of Letter of
\n Credit<\/p>\n
Exhibit “F” — Form of Landlord
\n Waiver<\/p>\n
2
\n 4<\/p>\n
ARTICLE 2<\/p>\n
LEASED PREMISES, TERM AND POSSESSION<\/p>\n
2.1 DEMISE OF LEASED PREMISES. Landlord hereby leases to Tenant and Tenant
\nhereby leases from Landlord, for the Lease Term and upon the terms and subject
\nto the conditions of this Lease, that certain interior space described in
\nArticle 1 as the Leased Premises, reserving and excepting to Landlord the right
\nto fifty percent (50%) of all assignment consideration and excess rentals as
\nprovided in Article 7 below. Tenant’s lease of the Leased Premises, together
\nwith the appurtenant right to use the Outside Areas as described in Paragraph
\n2.2 below, shall be conditioned upon and be subject to the continuing compliance
\nby Tenant with (i) all the terms and conditions of this Lease, (ii) all Laws
\ngoverning the use of the Leased Premises and the Property, (iii) all Private
\nRestrictions, easements and other matters now of public record respecting the
\nuse of the Leased Premises and Property, and (iv) all reasonable rules and
\nregulations from time to time established by Landlord.<\/p>\n
2.2 RIGHT TO USE OUTSIDE AREAS. As an appurtenant right to Tenant’s right to the
\nuse and occupancy of the Leased Premises, Tenant shall have the right to use the
\nOutside Areas in conjunction with its use of the Leased Premises solely for the
\npurposes for which they were designated and intended and for no other purposes
\nwhatsoever. Tenant’s right to so use the Outside Areas shall be subject to the
\nlimitations on such use as set forth in Article 1 and shall terminate
\nconcurrently with any termination of this Lease.<\/p>\n
2.3 LEASE COMMENCEMENT DATE AND LEASE TERM. Subject to Paragraph 2.4 below, the
\nterm of this Lease shall begin, and the Lease Commencement Date shall be deemed
\nto have occurred on the Intended Commencement Date, subject to Paragraph 2.4
\nbelow. The term of this Lease shall in all events end on the Lease Expiration
\nDate (as set forth in Article 1). The Lease Term shall be that period of time
\ncommencing on the Lease Commencement Date and ending on the Lease Expiration
\nDate (the “Lease Term”). In the event the actual Lease Commencement Date is
\ndifferent than the Intended Commencement Date, Landlord and Tenant agree to
\nexecute a Lease Commencement Date Certificate in the form attached as Exhibit C
\nsetting forth the actual Lease Commencement Date and the Lease Expiration Date
\n(such that the length of the Lease Term is the same as set forth in Article 1)
\nand an adjustment to the schedule of Base Monthly Rent to reflect the change in
\nthe Lease Commencement Date and Lease Expiration Date.<\/p>\n
2.4 DELIVERY OF POSSESSION. Landlord shall deliver to Tenant possession of the
\nLeased Premises upon Substantial Completion of the Tenant Improvements as that
\nterm is defined in the Work Letter attached hereto as Exhibit B and made a part
\nof this Lease (the “Work Letter”). The date that the Leased Premises are so
\ndelivered to the Tenant shall be deemed the “Delivery Date.” If Landlord is
\nunable to so deliver possession of the Leased Premises to Tenant in the agreed
\ncondition on or before the Intended Delivery Date, Landlord shall have until the
\ndate that is thirty (30) days after the Intended Delivery Date (the “Delivery
\nGrace Period”) to deliver the Leased Premises. Additionally, the Delivery Grace
\nPeriod above set forth shall be extended for such number of days as Landlord may
\nbe delayed in delivering possession of the Leased Premises to Tenant by reason
\nof Force Majeure or the action or inaction of Tenant. If Landlord is unable to
\ndeliver possession of the Leased Premises in the agreed condition to Tenant
\nwithin the Delivery Grace Period (including any extension thereof by reason of
\nForce Majeure or the actions or inactions of Tenant), then Tenant shall receive
\nas its sole remedy a credit of two (2) days of free rent for each day that the
\nLeased Premises are not delivered to Tenant after expiration of the Delivery
\nGrace Period (including any extension thereof by reason of Force Majeure or the
\nactions or inactions of Tenant), which free rent shall apply to the first month
\nin which Base Monthly Rent is due. If Landlord is unable to deliver possession
\nof the Leased Premises in the agreed condition to Tenant within sixty (60) days
\nafter the expiration of the Delivery Grace Period (including any extension
\nthereof by reason of Force Majeure or the actions or inactions of Tenant),
\nTenant may choose, as its sole remedy, to terminate this Lease, and in the event
\nof such termination Landlord shall not be liable in damages to Tenant for any
\ndelay. Tenant may not terminate this Lease at any time after the date Landlord
\nnotifies Tenant that the Leased Premises have been put into the agreed condition
\nand are available for delivery to Tenant, unless Landlord’s notice is not given
\nin good faith. Tenant may occupy the Leased Premises commencing on the Delivery
\nDate for the Permitted Use, and for purposes of installing furniture, fixtures
\nand equipment, provided that Tenant shall be responsible for Additional Rent
\nduring such period and Tenant shall comply with all other provisions of this
\nLease (other than the payment of Base Monthly Rent).<\/p>\n
2.5 PERFORMANCE OF TENANT IMPROVEMENTS; ACCEPTANCE OF POSSESSION. Landlord
\nshall, pursuant to the Work Letter, perform the work and make the installations
\nin the Leased Premises substantially as set forth in the Work Letter (such work
\nand installations hereinafter referred to as the “Tenant Improvements”). It is
\nagreed that by occupying the Leased Premises, Tenant formally accepts same and
\nacknowledges that the Leased Premises are in the condition called for hereunder,
\nsubject to reasonable punchlist items and latent defects specified by Tenant to
\nLandlord in writing within ten (10) days of such occupancy.<\/p>\n
2.6 SURRENDER OF POSSESSION. Immediately prior to the expiration or upon the
\nsooner termination of this Lease, Tenant shall remove all of Tenant’s signs from
\nthe exterior of the Building and shall remove all of Tenant’s equipment, trade
\nfixtures, furniture, supplies, wall decorations and other personal property from
\nwithin the Leased Premises, the Building and the Outside Areas, and shall vacate
\nand surrender the Leased Premises, the Building, the Outside Areas and the
\nProperty to Landlord in the same condition, broom clean, as existed at the Lease
\nCommencement Date, damage by casualty or condemnation (which events shall be
\ngoverned by Articles 10 and 11) and reasonable wear and tear excepted. Except
\nfor such reasonable wear and tear, Tenant shall (i) repair all damage to the
\nLeased Premises, the exterior of the Building and the Outside Areas caused by
\nTenant’s removal of Tenant’s property, (ii) patch and refinish, to Landlord’s
\nreasonable satisfaction, all penetrations made by Tenant or its employees to the
\nroof, floor, interior or exterior walls or ceiling of the Leased Premises and
\nthe Building, whether<\/p>\n
3
\n 5<\/p>\n
such penetrations were made with Landlord’s approval or not, (iii) repair or
\nreplace all stained or damaged ceiling tiles, wall coverings and floor coverings
\nto the reasonable satisfaction of Landlord, (iv) repair all damage caused by
\nTenant to the exterior surface of the Building and the paved surfaces of the
\nOutside Areas and, where necessary, replace or resurface same. Additionally, to
\nthe extent that Landlord shall have notified or is deemed to have notified
\nTenant in writing at the time the improvements were completed that it desired to
\nhave certain improvements made by Tenant or at the request of Tenant removed at
\nthe expiration or sooner termination of the Lease, Tenant shall, upon the
\nexpiration or sooner termination of the Lease, remove any such improvements
\nconstructed or installed by Landlord or Tenant and repair all damage caused by
\nsuch removal; provided however, Tenant shall not be required to remove the
\nTenant Improvements installed pursuant to the Work Letter. If the Leased
\nPremises, the Building, the Outside Areas and the Property are not surrendered
\nto Landlord in the condition required by this paragraph at the expiration or
\nsooner termination of this Lease, Landlord may, at Tenant’s expense, so remove
\nTenant’s signs, property and\/or improvements not so removed and make such
\nrepairs and replacements not so made or hire, at Tenant’s expense, independent
\ncontractors to perform such work. Tenant shall be liable to Landlord for all
\ncosts incurred by Landlord in returning the Leased Premises, the Building and
\nthe Outside Areas to the required condition, together with interest on all costs
\nso incurred from the date paid by Landlord at the then maximum rate of interest
\nnot prohibited or made usurious by law until paid. Tenant shall pay to Landlord
\nthe amount of all costs so incurred plus such interest thereon, within ten (10)
\ndays of Landlord’s billing Tenant for same. Tenant shall indemnify Landlord
\nagainst loss or liability resulting from delay by Tenant in surrendering the
\nLeased Premises, including, without limitation, any claims made by any
\nsucceeding Tenant or any losses to Landlord with respect to lost opportunities
\nto lease to succeeding tenants.<\/p>\n
ARTICLE 3<\/p>\n
RENT, LATE CHARGES AND SECURITY DEPOSITS<\/p>\n
3.1 BASE MONTHLY RENT. Commencing on the Lease Commencement Date (as determined
\npursuant to Paragraph 2.3 above) and continuing throughout the Lease Term,
\nTenant shall pay to Landlord, without prior demand therefor, in advance on the
\nfirst day of each calendar month, the amount set forth as “Base Monthly Rent” in
\nArticle 1 (the “Base Monthly Rent”).<\/p>\n
3.2 ADDITIONAL RENT. Commencing on the Lease Commencement Date (as determined
\npursuant to Paragraph 2.3 above) and continuing throughout the Lease Term, in
\naddition to the Base Monthly Rent and to the extent not required by Landlord to
\nbe contracted for and paid directly by Tenant, Tenant shall pay to Landlord as
\nadditional rent (the “Additional Rent”) the following amounts:<\/p>\n
(a)An amount equal to all Property Operating Expenses (as defined in
\nArticle 13) incurred by Landlord. Payment shall be made by whichever of the
\nfollowing methods (or combination of methods) is (are) from time to time
\ndesignated by Landlord:<\/p>\n
(i) Landlord may forward invoices or bills for such expenses to
\nTenant, and Tenant shall, no later than thirty (30) days following receipt of
\nany such invoices or bills, pay such invoices or bills and deliver satisfactory
\nevidence of such payment to Landlord, and\/or<\/p>\n
(ii) Landlord may bill to Tenant, on a periodic basis not more
\nfrequently than monthly, the amount of such expenses (or group of expenses) as
\npaid or incurred by Landlord, and Tenant shall pay to Landlord the amount of
\nsuch expenses within thirty (30) days after receipt of a written bill therefor
\nfrom Landlord, and\/or<\/p>\n
(iii) Landlord may deliver to Tenant Landlord’s reasonable
\nestimate of any given expense (such as Landlord’s Insurance Costs or Real
\nProperty Taxes), or group of expenses, which it anticipates will be paid or
\nincurred for the ensuing calendar or fiscal year, as Landlord may determine, and
\nTenant shall pay to Landlord an amount equal to the estimated amount of such
\nexpenses for such year in equal monthly installments during such year with the
\ninstallments of Base Monthly Rent.<\/p>\n
Landlord reserves the right to change from time to time the methods of billing
\nTenant for any given expense or group of expenses or the periodic basis on which
\nsuch expenses are billed.<\/p>\n
(b) Landlord’s share of the consideration received by Tenant upon
\ncertain assignments and sublettings as required by Article 7.<\/p>\n
(c) Any legal fees and costs that Tenant is obligated to pay or
\nreimburse to Landlord pursuant to Article 13; and<\/p>\n
(d) Any other charges or reimbursements due Landlord from Tenant
\npursuant to the terms of this Lease.<\/p>\n
Notwithstanding the foregoing, Landlord may elect by thirty (30) days prior
\nwritten notice to Tenant (provided such written notice is received by Tenant at
\nleast thirty (30) days prior to delinquency) to have Tenant pay Real Property
\nTaxes or any portion thereof directly to the applicable taxing authority, in
\nwhich case Tenant shall make such payments and deliver satisfactory evidence of
\npayment to Landlord no later than ten (10) days before such Real Property Taxes
\nbecome delinquent.<\/p>\n
Tenant may cause an audit of Landlord’s books and records to determine the
\naccuracy of Landlord’s billings for Property Operating Expenses under this
\nLease, provided Tenant commences such audit within sixty (60) days after
\nTenant’s receipt of the year-end statement described in Section 3.3 above
\nsetting forth the annual reconciliation of<\/p>\n
4
\n 6<\/p>\n
the Property Operating Expenses or any change in estimated monthly expenses
\nunder Section 3.2(a)(iii) above. If such audit reveals that the actual Property
\nOperating Expenses for any given year were less than the amount that Tenant paid
\nfor Property Operating Expenses for any such year, then Landlord shall pay to
\nTenant the excess. If such audit reveals a discrepancy of more than three (3%)
\npercent of the actual amount of any Property Operating Expenses charges, then
\nLandlord shall pay the cost of the audit.<\/p>\n
Additionally, Tenant shall have the right, by appropriate proceedings, to
\nprotest or contest any assessment, reassessment or allocation of Real Property
\nTaxes or any change therein or any application of any Law to the Leased Premises
\nor Tenant’s use thereof. Landlord will reasonably cooperate with Tenant in the
\ncontest or proceedings. If Tenant does not pay the Real Property Taxes when due
\nwhich are the subject of such protest or contest, Tenant shall post a bond in
\nlieu thereof in an amount reasonably determined by Landlord but not less than
\none hundred twenty-five percent (125%) of the amount demanded by the taxing
\nauthorities which holds Landlord and the Property harmless from any damage
\narising out of the contest and ensuring the payment of any judgment that may be
\nrendered. With respect to any contest of Real Property Taxes or Laws conducted
\nby Tenant, Tenant shall hold Landlord and the Property harmless from any damage
\narising out of such protest or contest and shall pay any judgment that may be
\nrendered in connection with such contest or protest. Any protest or contest
\nconducted by Tenant under this paragraph shall be at Tenant’s expense and if
\ninterest or late charges become payable as a result of such contest or protest,
\nTenant shall pay the same. Tenant shall receive a proportionate share of any
\nrefund applicable to the Lease Term based on the amount of Real Property Taxes
\npaid by Tenant as Tenant’s Property Share (if the refund is applicable to the
\nland) or Tenant’s Expense Share (if the refund is applicable to the Building or
\nother improvements in the Outside Areas).<\/p>\n
3.3 YEAR-END ADJUSTMENTS. If Landlord shall have elected to bill Tenant for the
\nProperty Operating Expenses (or any group of such expenses) on an estimated
\nbasis in accordance with the provisions of Paragraph 3.2(a)(iii) above, Landlord
\nshall furnish to Tenant within three months following the end of the applicable
\ncalendar or fiscal year, as the case may be, a statement setting forth (i) the
\namount of such expenses paid or incurred during the just ended calendar or
\nfiscal year, as appropriate, and (ii) the amount that Tenant has paid to
\nLandlord for credit against such expenses for such period. If Tenant shall have
\npaid more than its obligation for such expenses for the stated period, Landlord
\nshall, at its election, either (i) credit the amount of such overpayment toward
\nthe next ensuing payment or payments of Additional Rent that would otherwise be
\ndue or (ii) refund in cash to Tenant the amount of such overpayment within
\nthirty (30) days after it has been conclusively determined by Landlord that an
\noverpayment has been made by Tenant. If such year-end statement shall show that
\nTenant did not pay its obligation for such expenses in full, then Tenant shall
\npay to Landlord the amount of such underpayment within ten days from Landlord’s
\nbilling of same to Tenant. The provisions of this Paragraph shall survive the
\nexpiration or sooner termination of this Lease.<\/p>\n
3.4 LATE CHARGE, AND INTEREST ON RENT IN DEFAULT. Tenant acknowledges that the
\nlate payment by Tenant of any monthly installment of Base Monthly Rent or any
\nAdditional Rent will cause Landlord to incur certain costs and expenses not
\ncontemplated under this Lease, the exact amounts of which are extremely
\ndifficult or impractical to fix. Such costs and expenses will include without
\nlimitation, administration and collection costs and processing and accounting
\nexpenses. Therefor, if any installment of Base Monthly Rent is not received by
\nLandlord from Tenant when the same becomes due, Tenant shall immediately pay to
\nLandlord a late charge in an amount equal to the amount set forth in Article 1
\nas the “Late Charge Amount,” and if any Additional Rent is not received by
\nLandlord when the same becomes due, Tenant shall immediately pay to Landlord a
\nlate charge in an amount equal to 5% of the Additional Rent not so paid;
\nprovided, however, that once but only once in any twelve (12) month period
\nduring the Lease Term, Tenant shall be entitled to written notice of non-receipt
\nof Base Monthly Rent or Additional Rent from Landlord, and Tenant shall not be
\nliable for any Late Charge Amount or other late charge hereunder if such
\ninstallment of Base Monthly Rent or Additional Rent is received by Landlord
\nwithin ten (10) days after Tenant’s receipt of such notice from Landlord.
\nLandlord and Tenant agree that this late charge represents a reasonable estimate
\nof such costs and expenses and is fair compensation to Landlord for the
\nanticipated loss Landlord would suffer by reason of Tenant’s failure to make
\ntimely payment. In no event shall this provision for a late charge be deemed to
\ngrant to Tenant a grace period or extension of time within which to pay any
\nrental installment or prevent Landlord from exercising any right or remedy
\navailable to Landlord upon Tenant’s failure to pay each rental installment due
\nunder this Lease when due, including the right to terminate this Lease. If any
\nrent remains delinquent for a period in excess of 10 calendar days, then, in
\naddition to such late charge, Tenant shall pay to Landlord interest on any rent
\nthat is not so paid from said tenth day at the then maximum rate of interest not
\nprohibited or made usurious by Law until paid.<\/p>\n
3.5 PAYMENT OF RENT. Except as specifically provided otherwise in this Lease,
\nall rent shall be paid in lawful money of the United States, without any
\nabatement, reduction or offset for any reason whatsoever, to Landlord at such
\naddress as Landlord may designate from time to time. Tenant’s obligation to pay
\nBase Monthly Rent and all Additional Rent shall be appropriately prorated at the
\ncommencement and expiration of the Lease Term. The failure by Tenant to pay any
\nAdditional Rent as required pursuant to this Lease when due shall be treated the
\nsame as a failure by Tenant to pay Base Monthly Rent when due, and Landlord
\nshall have the same rights and remedies against Tenant as Landlord would have
\nhad Tenant failed to pay the Base Monthly Rent when due.<\/p>\n
3.6 PREPAID RENT. Tenant shall, within ten (10) days following execution of this
\nLease, pay to Landlord the amount set forth in Article 1 as “First Month’s
\nPrepaid Rent” as prepayment of rent for credit against the first payment of Base
\nMonthly Rent due hereunder.<\/p>\n
3.7 SECURITY DEPOSIT.<\/p>\n
(a) Tenant, within ten (10) days following execution of this Lease,
\nshall deposit with Landlord the amount set forth in Article 1 as the “Security
\nDeposit” as security for the performance by Tenant of the terms of this Lease to
\nbe performed by Tenant, and not as prepayment of rent. Upon the commencement of
\nthe second year of the Lease<\/p>\n
5
\n 7<\/p>\n
Term, and at the commencement of each subsequent year, provided that Tenant is
\nnot then in default (and has never been in default beyond any applicable notice
\nand cure periods) in its payment of Base Monthly Rent or Additional Rent, the
\namount of the Security Deposit shall be reduced by twenty percent (20%) of the
\noutstanding amount. In the event (i) Tenant becomes a publicly traded company
\nand (ii) Tenant reports net profits for three (3) consecutive quarters (as shown
\non its quarterly financial statements prepared in accordance with generally
\naccepted accounting principles), and provided that Tenant is not then in default
\n(and has never been in default beyond any applicable notice and cure periods) in
\nits payment of Base Monthly Rent or Additional Rent, the Security Deposit shall
\nbe returned to Tenant and thereafter no Security Deposit will be required. In
\nthe event (1) Tenant becomes a publicly traded company and maintains a market
\ncapitalization of Two Billion Dollars ($2,000,000,000) for two consecutive
\nquarters and (2) quarterly revenues exceed Twenty Five Million Dollars
\n($25,000,000) for two consecutive quarters (as shown on its quarterly financial
\nstatements prepared in accordance with generally accepted accounting
\nprinciples), and provided that Tenant is not then in default (and has never been
\nin default beyond any applicable notice and cure periods) in its payment of Base
\nMonthly Rent or Additional Rent, the Security Deposit shall be reduced by an
\namount equal to fifty percent (50%) of the original amount.<\/p>\n
(b) Landlord may apply such portion or portions of the Security Deposit
\nas are reasonably necessary for the following purposes: (i) to remedy any
\ndefault by Tenant in the payment of Base Monthly Rent or Additional Rent or a
\nlate charge or interest on defaulted rent, or any other monetary payment
\nobligation of Tenant under this Lease; (ii) to repair damage to the Leased
\nPremises, the Building or the Outside Areas caused or permitted to occur by
\nTenant; (iii) to clean and restore and repair the Leased Premises, the Building
\nor the Outside Areas following their surrender to Landlord if not surrendered in
\nthe condition required pursuant to the provisions of Article 2, and (iv) to
\nremedy any other default of Tenant to the extent permitted by Law including,
\nwithout limitation, paying in full on Tenant’s behalf any sums claimed by
\nmaterialmen or contractors of Tenant to be owing to them by Tenant for work done
\nor improvements made at Tenant’s request to the Leased Premises. In this regard,
\nTenant hereby waives any restriction on the uses to which the Security Deposit
\nmay be applied as contained in Section 1950.7(c) of the California Civil Code
\nand\/or any successor statute. In the event the Security Deposit or any portion
\nthereof is so used, Tenant shall pay to Landlord, promptly upon demand, an
\namount in cash sufficient to restore the Security Deposit to the full original
\nsum or shall replenish the letter of credit, if applicable. Landlord shall not
\nbe deemed a trustee of the Security Deposit. Landlord may use the Security
\nDeposit in Landlord’s ordinary business and shall not be required to segregate
\nit from Landlord’s general accounts. Tenant shall not be entitled to any
\ninterest on any cash Security Deposit held by Landlord. If Landlord transfers
\nthe Building or the Property during the Lease Term, Landlord may pay the
\nSecurity Deposit to any subsequent owner in conformity with the provisions of
\nSection 1950.7 of the California Civil Code and\/or any successor statute, in
\nwhich event the transferring landlord shall be released from all liability for
\nthe return of the Security Deposit. Tenant specifically grants to Landlord (and
\nTenant hereby waives the provisions of California Civil Code Section 1950.7 to
\nthe contrary) a period of ninety days following a surrender of the Leased
\nPremises by Tenant to Landlord within which to inspect the Leased Premises, make
\nrequired restorations and repairs, receive and verify workmen’s billings
\ntherefor, and prepare a final accounting with respect to the Security Deposit.
\nIn no event shall the Security Deposit or any portion thereof, be considered
\nprepaid rent. Notwithstanding the foregoing, in lieu of a cash Security Deposit,
\nTenant may deliver to Landlord a clean, unconditional, irrevocable, transferable
\nletter of credit in the full amount of the Security Deposit required pursuant to
\nArticle 1 hereof (the “Letter of Credit”) in form and issued by a financial
\ninstitution (“Issuer”) satisfactory to Landlord in its sole discretion,
\nsubstantially in the form attached as Exhibit E. The Letter of Credit shall
\npermit partial draws, and provide that draws thereunder will be honored upon
\nreceipt by Issuer of a written statement signed by Landlord or its authorized
\nagent stating that Landlord is entitled to draw down on the Letter of Credit
\npursuant to the terms of the Lease. The Letter of Credit shall have an
\nexpiration period of one (1) year but shall automatically renew by its terms
\nunless affirmatively cancelled by either Issuer or Tenant, in which case Issuer
\nmust provide Landlord 30 days’ prior written notice of such expiration or
\ncancellation. Any amount drawn under the Letter of Credit shall be held or used
\nby Landlord in accordance with this Section 3.7. If the amount of the Letter of
\nCredit is reduced in accordance with the terms of this Lease, Tenant shall have
\nthe right to replace the existing Letter of Credit with another Letter of Credit
\nat the reduced amount. If the Tenant fails to renew or replace the Letter of
\nCredit as required under this Lease at least thirty (30) days before its stated
\nexpiration date, Landlord may draw upon the entire amount of the Letter of
\nCredit, provided that if Landlord so draws on the Letter of Credit, so long as
\nTenant is not otherwise in default, Landlord shall deliver the amount so drawn
\nto Tenant upon Tenant’s delivery to Landlord of a new Letter of Credit in the
\namount then required, provided that Tenant makes such delivery within ten (10)
\ndays of Landlord’s draw.<\/p>\n
(c) In the event Mathilda Associates LLC transfers or sells its interest
\nin the Property to person any entity other than an institutional buyer (a
\n“Non-Institutional Buyer”), Tenant shall have the right to require that the
\nSecurity Deposit be held by the lender, if any, providing the financing for such
\nNon-Institutional Buyer to acquire the Property, or be held in an escrow account
\ncontrolled by such Non-Institutional Buyer, which account shall be subject to
\nescrow instructions specifying that (1) Landlord shall only have the right to
\ndraw on the Letter of Credit to the extent the Landlord is entitled to pursuant
\nto this Section 3.7, (2) Landlord shall deliver a statement to the escrow holder
\nprior to any draw down, certifying that Landlord is entitled to draw on the
\nLetter of Credit pursuant to this Section 3.7, and (3) that within ninety (90)
\ndays after expiration of this Lease, the escrow holder shall release the Letter
\nto Credit to Tenant consistent with the terms of this Lease. For purposes
\nhereof, the term “institutional buyer” shall include, without limitation, life
\ninsurance companies, banks, pension funds, pension fund advisors, opportunity
\nfunds, hedge funds, private owners who directly or indirectly own more than
\n$200,000,000 of real estate, or real estate investment trusts.<\/p>\n
6
\n 8<\/p>\n
ARTICLE 4<\/p>\n
USE OF LEASED PREMISES AND OUTSIDE AREA<\/p>\n
4.1 PERMITTED USE. Tenant shall be entitled to use the Leased Premises solely
\nfor the “Permitted Use” as set forth in Article 1 and for no other purpose
\nwhatsoever. Tenant shall have the right to vacate the Leased Premises at any
\ntime during the Term of this Lease, provided Tenant maintains the Leased
\nPremises in the same condition as if fully occupied and as otherwise required by
\nthe terms of this Lease. Tenant shall have the right to use the Outside Areas in
\nconjunction with its Permitted Use of the Leased Premises solely for the
\npurposes for which they were designed and intended and for no other purposes
\nwhatsoever.<\/p>\n
4.2 GENERAL LIMITATIONS ON USE. Tenant shall not do or permit anything to be
\ndone in or about the Leased Premises, the Building, the Outside Areas or the
\nProperty which does or could (i) jeopardize the structural integrity of the
\nBuilding or (ii) cause damage to any part of the Leased Premises, the Building,
\nthe Outside Areas or the Property. Tenant shall not operate any equipment within
\nthe Leased Premises which does or could (i) injure, vibrate or shake the Leased
\nPremises or the Building, (ii) damage, overload or impair the efficient
\noperation of any electrical, plumbing, heating, ventilating or air conditioning
\nsystems within or servicing the Leased Premises or the Building, or (iii) damage
\nor impair the efficient operation of the sprinkler system (if any) within or
\nservicing the Leased Premises or the Building. Tenant shall not (i) install any
\nequipment or antennas on or make any penetrations of the exterior walls or roof
\nof the Building or (ii) affix any equipment or make any penetrations or cuts in
\nthe floors, ceiling or walls of the Leased Premises, without Landlord’s prior
\nwritten consent, which consent shall not be unreasonably withheld; provided,
\nhowever, that it shall be reasonable for Landlord to withhold its consent if
\nTenant’s proposed installations or penetrations impact the structural integrity
\nof the Building. Any installations, penetrations or cuts in the interior or
\nexterior walls, roof, floor or ceiling of the Building will be subject to
\nTenant’s restoration obligations set forth in Section 2.6. Tenant shall not
\nplace any loads upon the floors, walls, ceiling or roof systems which could
\nendanger the structural integrity of the Building or damage its floors,
\nfoundations or supporting structural components. Tenant shall not place any
\nexplosive, flammable or harmful fluids or other waste materials in the drainage
\nsystems of the Leased Premises, the Building, the Outside Areas or the Property.
\nTenant shall not drain or discharge any fluids in the landscaped areas or across
\nthe paved areas of the Property. Tenant shall not use any of the Outside Areas
\nfor the storage of its materials, supplies, inventory or equipment and all such
\nmaterials, supplies, inventory or equipment shall at all times be stored within
\nthe Leased Premises. Tenant shall not commit nor permit to be committed any
\nwaste in or about the Leased Premises, the Building, the Outside Areas or the
\nProperty.<\/p>\n
4.3 NOISE AND EMISSIONS. All noise generated by Tenant in its use of the Leased
\nPremises shall be confined or muffled so that it does not interfere with the
\nbusinesses of or annoy the occupants and\/or users of adjacent properties. All
\ndust, fumes, odors and other emissions generated by Tenant’s use of the Leased
\nPremises shall be sufficiently dissipated in accordance with sound environmental
\npractice and exhausted from the Leased Premises in such a manner so as not to
\ninterfere with the businesses of or annoy the occupants and\/or users of adjacent
\nproperties, or cause any damage to the Leased Premises, the Building, the
\nOutside Areas or the Property or any component part thereof or the property of
\nadjacent property owners.<\/p>\n
4.4 TRASH DISPOSAL. Tenant shall provide trash bins or other adequate garbage
\ndisposal facilities within the trash enclosure areas provided or permitted by
\nLandlord outside the Leased Premises sufficient for the interim disposal of all
\nof its trash, garbage and waste. All such trash, garbage and waste temporarily
\nstored in such areas shall be stored in such a manner so that it is not visible
\nfrom outside of such areas, and Tenant shall cause such trash, garbage and waste
\nto be regularly removed from the Property. Tenant shall keep the Leased Premises
\nin a clean, safe and neat condition and keep the Outside Areas (except the trash
\nenclosure areas) free and clear of all of Tenant’s trash, garbage, waste and\/or
\nboxes, pallets and containers containing same at all times.<\/p>\n
4.5 PARKING. Tenant shall have the non-exclusive use of its proportionate share
\n(calculated using the same method as Tenant’s Expense Share) of parking spaces
\nlocated in the Outside Areas (which, subject to any transportation management
\nrequirements of the City of Sunnyvale, shall be no less than 3.6 spaces per
\n1,000 rentable square feet in the Leased Premises). During construction of the
\n1184 Building (as defined in Article 16), Tenant shall have the non-exclusive
\nuse of all parking areas located on the Property, subject to Landlord’s use
\nthereof for construction activities. Notwithstanding the foregoing, Tenant shall
\nhave exclusive use of the thirty (30) parking spaces directly in front of the
\nfront door to the Leased Premises. Tenant shall not, at any time, park or permit
\nto be parked any recreational vehicles, inoperative vehicles or equipment in the
\nOutside Areas or on any portion of the Property. Tenant agrees to assume
\nresponsibility for compliance by its employees and invitees with the parking
\nprovisions contained herein. If Tenant or its employees park any vehicle within
\nthe Property in violation of these provisions, then Landlord may, upon prior
\nwritten notice to Tenant giving Tenant one (1) day (or any applicable statutory
\nnotice period, if longer than one (1) day) to remove such vehicle(s). Landlord
\nreserves the right to grant easements and access rights to others for use of the
\nparking areas on the Property, provided that such grants do not materially
\ninterfere with Tenant’s use of the parking areas.<\/p>\n
4.6 SIGNS. Other than business identification signs allowed pursuant to this
\nSection 4.6, Tenant shall not place or install on or within any portion of the
\nLeased Premises, the exterior of the Building, the Outside Areas or the Property
\nany sign, advertisement, banner, placard, or picture which is visible from the
\nexterior of the Leased Premises. Subject to Landlord’s prior written consent,
\nwhich shall not be unreasonably withheld, and subject to approval by the City of
\nSunnyvale, Tenant shall have the right to install an illuminated business
\nidentification sign on the Building. Landlord shall cooperate with Tenant’s
\nefforts to obtain approval from the City of Sunnyvale for an illuminated sign.
\nAny such sign shall be installed at Tenant’s sole cost and expense and only in
\nstrict compliance with Landlord’s approval (which shall not be unreasonably
\nwithheld), and all Laws and all requirements of the City of Sunnyvale, using a
\nperson approved by Landlord to install same. Subject to Landlord’s prior written
\nconsent,<\/p>\n
7
\n 9<\/p>\n
which shall not be unreasonably withheld, and subject to approval by the City of
\nSunnyvale of the installation of no less than two (2) monument signs for the
\nProperty, Tenant shall have the right to its own business identification
\nmonument sign on the Property, in a location which indicates that such sign
\nbelongs to the Building (or, if Tenant occupies all buildings on the Property,
\nTenant shall have the exclusive right to all such monument signs), to be
\ninstalled by Landlord at its sole cost and expense. In the event the City of
\nSunnyvale only approves the installation of one (1) monument sign for the
\nProperty, Tenant shall have the right to place its business identification
\nsignage on the top of said monument sign, which monument sign shall be installed
\nby Landlord, at its sole cost and expense. Such monument sign shall comply with
\nall requirements imposed by the City of Sunnyvale. Landlord may remove any signs
\n(which have not been approved in writing by Landlord), advertisements, banners,
\nplacards or pictures so placed by Tenant on or within the Leased Premises, the
\nexterior of the Building, the Outside Areas or the Property and charge to Tenant
\nthe cost of such removal, together with any costs incurred by Landlord to repair
\nany damage caused thereby, including any cost incurred to restore the surface
\n(upon which such sign was so affixed) to its original condition. Notwithstanding
\nanything to the contrary contained herein, Tenant shall remove all of Tenant’s
\nsigns, repair any damage caused thereby, and restore the surface upon which the
\nsign was affixed to its original condition, all to Landlord’s reasonable
\nsatisfaction, upon the termination of this Lease.<\/p>\n
4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS. Tenant shall abide by and
\nshall promptly observe and comply with, at its sole cost and expense, all Laws
\nand Private Restrictions respecting the use and occupancy of the Leased
\nPremises, the Building, the Outside Areas or the Property including, without
\nlimitation, all Laws governing the use and\/or disposal of Hazardous Materials
\n(except that Tenant shall not be responsible for any Hazardous Materials at the
\nLeased Premises, the Building, the Outside Areas or the Property prior to the
\nDelivery Date), and shall defend with competent counsel, indemnify and hold
\nLandlord harmless from any claims, damages or liability resulting from Tenant’s
\nfailure to so abide, observe, or comply. Tenant’s obligations hereunder shall
\nsurvive the expiration or sooner termination of this Lease.<\/p>\n
4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS. With respect to any insurance
\npolicies required or permitted to be carried by Landlord in accordance with the
\nprovision of this Lease, copies of which have been or will, upon Tenant’s
\nwritten request therefor, be provided to Tenant, Tenant shall not conduct nor
\npermit any other person to conduct any activities nor keep, store or use (or
\nallow any other person to keep, store or use) any item or thing within the
\nLeased Premises, the Building, the Outside Areas or the Property which (i) is
\nprohibited under the terms of any such policies, (ii) could result in the
\ntermination of the coverage afforded under any of such policies, (iii) could
\ngive to the insurance carrier the right to cancel any of such policies, or (iv)
\ncould cause an increase in the rates (over standard rates) charged for the
\ncoverage afforded under any of such policies. Tenant shall comply with all
\nrequirements of any insurance company, insurance underwriter, or Board of Fire
\nUnderwriters which are necessary to maintain, at standard rates, the insurance
\ncoverages carried by either Landlord or Tenant pursuant to this Lease.<\/p>\n
4.9 LANDLORD’S RIGHT TO ENTER. Landlord and its agents shall have the right to
\nenter the Leased Premises during normal business hours after giving Tenant
\nreasonable notice and subject to Tenant’s reasonable security measures for the
\npurpose of (i) inspecting the same; (ii) showing the Leased Premises to
\nprospective purchasers, mortgagees or tenants; (iii) making necessary
\nalterations, additions or repairs; and (iv) performing any of Tenant’s
\nobligations when Tenant has failed to do so. Landlord shall have the right to
\nenter the Leased Premises during normal business hours (or as otherwise agreed),
\nsubject to Tenant’s reasonable security measures, for purposes of supplying any
\nmaintenance or services agreed to be supplied by Landlord. Landlord shall have
\nthe right to enter the Outside Areas during normal business hours for purposes
\nof (i) inspecting the exterior of the Building and the Outside Areas; (ii)
\nposting notices of nonresponsibility (and for such purposes Tenant shall provide
\nLandlord at least thirty days’ prior written notice of any work to be performed
\non the Leased Premises); and (iii) supplying any services to be provided by
\nLandlord. Any entry into the Leased Premises or the Outside Areas obtained by
\nLandlord in accordance with this paragraph shall not under any circumstances be
\nconstrued or deemed to be a forcible or unlawful entry into, or a detainer of,
\nthe Leased Premises, or an eviction, actual or constructive of Tenant from the
\nLeased Premises or any portion thereof. In exercising its rights under this
\nSection 4.9, Landlord shall use commercially reasonable efforts to minimize
\ninterference with Tenant’s use of the Leased Premises and the Outside Areas.<\/p>\n
4.10 USE OF OUTSIDE AREAS. Tenant, in its use of the Outside Areas, shall at all
\ntimes keep the Outside Areas in a safe condition free and clear of all
\nmaterials, equipment, debris, trash (except within existing enclosed trash
\nareas), inoperable vehicles, and other items which are not specifically
\npermitted by Landlord to be stored or located thereon by Tenant. If, in the
\nopinion of Landlord, unauthorized persons are using any of the Outside Areas by
\nreason of, or under claim of, the express or implied authority or consent of
\nTenant, then Tenant, upon demand of Landlord, shall restrain, to the fullest
\nextent then allowed by Law, such unauthorized use, and shall initiate such
\nappropriate proceedings as may be required to so restrain such use. Landlord
\nreserves the right to grant easements and access rights to others for use of the
\nOutside Areas and shall not be liable to Tenant for any diminution in Tenant’s
\nright to use the Outside Areas as a result; provided, however, that other than
\nfor construction of the 1184 Building and other requirements under the Use
\nPermit, of which the Tenant has knowledge and which the Tenant recognizes will
\nbe taking place during the Lease Term, Landlord shall not exercise its rights
\npursuant to this Section 4.10 in a manner which materially and adversely affects
\nTenant’s ability to use the Leased Premises and the Outside Areas for the
\nPermitted Use or materially and adversely affects Tenant’s parking rights.<\/p>\n
4.11 ENVIRONMENTAL PROTECTION. Tenant’s obligations under this Section 4.11
\nshall survive the expiration or termination of this Lease.<\/p>\n
(a) As used herein, the term “Hazardous Materials” shall mean any toxic
\nor hazardous substance, material or waste or any pollutant or infectious or
\nradioactive material, including but not limited to those substances, materials
\nor wastes regulated now or in the future under any of the following statutes or
\nregulations and any and all of those substances included within the definitions
\nof “hazardous substances,” “hazardous materials,” “hazardous waste,” “hazardous
\nchemical substance or mixture,” “imminently hazardous chemical substance or
\nmixture,” “toxic<\/p>\n
8
\n 10<\/p>\n
substances,” “hazardous air pollutant,” “toxic pollutant,” or “solid waste” in
\nthe (a) Comprehensive Environmental Response, Compensation and Liability Act of
\n1990 (“CERCLA” or “Superfund”), as amended by the Superfund Amendments and
\nReauthorization Act of 1986 (“SARA”), 42 U.S.C. Section 9601 et seq., (b)
\nResource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. Section 6901
\net seq., (c) Federal Water Pollution Control Act (“FSPCA”), 33 U.S.C. Section
\n1251 et seq., (d) Clean Air Act (“CAA”), 42 U.S.C. Section 7401 et seq., (e)
\nToxic Substances Control Act (“TSCA”), 14 U.S.C. Section 2601 et seq., (f)
\nHazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., (g)
\nCarpenter-Presley-Tanner Hazardous Substance Account Act (“California
\nSuperfund”), Cal. Health & Safety Code Section 25300 et seq., (h) California
\nHazardous Waste Control Act, Cal. Health & Safety code Section 25100 et seq.,
\n(i) Porter-Cologne Water Quality Control Act (“Porter-Cologne Act”), Cal. Water
\nCode Section 13000 et seq., (j) Hazardous Waste Disposal Land Use Law, Cal.
\nHealth & Safety codes Section 25220 et seq., (k) Safe Drinking Water and Toxic
\nEnforcement Act of 1986 (“Proposition 65”), Cal. Health & Safety code Section
\n25249.5 et seq., (l) Hazardous Substances Underground Storage Tank Law, Cal.
\nHealth & Safety code Section 25280 et seq., (m) Air Resources Law, Cal. Health & Safety Code Section 39000 et seq., and (n) regulations promulgated pursuant to
\nsaid laws or any replacement thereof, or as similar terms are defined in the
\nfederal, state and local laws, statutes, regulations, orders or rules. Hazardous
\nMaterials shall also mean any and all other biohazardous wastes and substances,
\nmaterials and wastes which are, or in the future become, regulated under
\napplicable Laws for the protection of health or the environment, or which are
\nclassified as hazardous or toxic substances, materials or wastes, pollutants or
\ncontaminants, as defined, listed or regulated by any federal, state or local
\nlaw, regulation or order or by common law decision, including, without
\nlimitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and
\nother chlorinated solvents, (ii) any petroleum products or fractions thereof,
\n(iii) asbestos, (iv) polychlorinted biphenyls, (v) flammable explosives, (vi)
\nurea formaldehyde, (vii) radioactive materials and waste, and (viii) materials
\nand wastes that are harmful to or may threaten human health, ecology or the
\nenvironment.<\/p>\n
(b) Notwithstanding anything to the contrary in this Lease, Tenant, at
\nits sole cost, shall comply with all Laws relating to the storage, use and
\ndisposal of Hazardous Materials by Tenant, its subtenants, their respective
\nagents, employees, contractors or invitees (collectively, the “Tenant Parties”).
\nTenant shall not store, use or dispose of any Hazardous Materials except for
\nthose Hazardous Materials listed in a Hazardous Materials management plan
\n(“HMMP”) which Tenant shall deliver to Landlord upon execution of this Lease and
\nupdate at least annually with Landlord (“Permitted Materials”) which may be
\nused, stored and disposed of provided (i) such Permitted Materials are used,
\nstored, transported, and disposed of in strict compliance with applicable laws,
\n(ii) such Permitted Materials shall be limited to the materials listed on and
\nmay be used only in the quantities specified in the HMMP, and (iii) Tenant shall
\nprovide Landlord with copies of all material safety data sheets and other
\ndocumentation required under applicable Laws in connection with Tenant’s use of
\nPermitted Materials as and when such documentation is provided to any regulatory
\nauthority having jurisdiction, in no event shall Tenant cause or permit to be
\ndischarged into the plumbing or sewage system of the Building or onto the land
\nunderlying or adjacent to the Building any Hazardous Materials. Tenant shall be
\nsolely responsible for and shall defend, indemnify, and hold Landlord and its
\nagents harmless from and against all claims, costs and liabilities, including
\nattorneys’ fees and costs, arising out of or in connection with Tenant’s
\nstorage, use and\/or disposal of Hazardous Materials. If the presence of
\nHazardous Materials on the Leased Premises caused or permitted by Tenant results
\nin contamination or deterioration of water or soil, then Tenant shall promptly
\ntake any and all action necessary to clean up such contamination as required by
\nLaw, but the foregoing shall in no event be deemed to constitute permission by
\nLandlord to allow the presence of such Hazardous Materials. At any time prior to
\nthe expiration of the Lease Term if Tenant has a reasonable basis to suspect
\nthat there has been any release or the presence of Hazardous Materials in the
\nground or ground water on the Leased Premises which did not exist upon
\ncommencement of the Lease Term, Tenant shall have the right to conduct
\nappropriate tests of water and soil and to deliver to Landlord the results of
\nsuch tests to demonstrate that no contamination in excess of permitted levels
\nhas occurred as a result of Tenant’s use of the Leased Premises. Tenant shall
\nfurther be solely responsible for, and shall defend, indemnify, and hold
\nLandlord and its agents harmless from and against all claims, costs and
\nliabilities, including attorneys’ fees and costs, arising out of or in
\nconnection with any removal, cleanup and restoration work and materials required
\nhereunder to return the Leased Premises and any other property of whatever
\nnature to their condition existing prior to the appearance of the Hazardous
\nMaterials, to the extent such removal, cleanup and restoration work is required
\nby Law.<\/p>\n
(c) Upon termination or expiration of the Lease, Tenant at its sole
\nexpense shall cause all Hazardous Materials placed in or about the Leased
\nPremises, the Building and\/or the Property by any Tenant Parties, and all
\ninstallations (whether interior or exterior) made by or on behalf of Tenant
\nrelating to the storage, use, disposal or transportation of Hazardous Materials
\nto be removed from the property and transported for use, storage or disposal in
\naccordance and compliance with all Laws and other requirements respecting
\nHazardous Materials used or permitted to be used by Tenant. Tenant shall apply
\nfor and shall obtain from all appropriate regulatory authorities (including any
\napplicable fire department or regional water quality control board) all permits,
\napprovals and clearances necessary for the closure of the Property and shall
\ntake all other actions as may be required to complete the closure of the
\nBuilding and the Property. In addition, prior to vacating the Leased Premises,
\nTenant shall undertake and submit to Landlord an environmental site assessment
\nfrom an environmental consulting company reasonably acceptable to Landlord which
\nsite assessment shall evidence Tenant’s compliance with this Paragraph 4.11.<\/p>\n
(d) At any time prior to expiration of the Lease term, subject to
\nreasonable prior notice (not less than forty-eight (48) hours) and Tenant’s
\nreasonable security requirements and provided such activities do not
\nunreasonably interfere with the conduct of Tenant’s business at the Leased
\nPremises, Landlord shall have the right to enter in and upon the Property,
\nBuilding and Leased Premises in order to conduct appropriate tests of water and
\nsoil to determine whether levels of any Hazardous Materials in excess of legally
\npermissible levels has occurred as a result of any Tenant Parties’ use thereof.
\nLandlord shall furnish copies of all such test results and reports to Tenant
\nand, at Tenant’s option and cost, shall permit split sampling for testing and
\nanalysis by Tenant. Such testing shall be at Tenant’s expense if Landlord has a
\nreasonable basis for suspecting and confirms the presence of Hazardous<\/p>\n
9
\n 11<\/p>\n
Materials in the soil or surface or ground water in, on, under, or about the
\nProperty, the Building or the Leased Premises, which has been caused by or
\nresulted from the activities of any Tenant Parties.<\/p>\n
(e) Landlord may voluntarily cooperate in a reasonable manner with the
\nefforts of all governmental agencies in reducing actual or potential
\nenvironmental damage. Tenant shall not be entitled to terminate this Lease or to
\nany reduction in or abatement of rent by reason of such compliance or
\ncooperation. Tenant agrees at all times to cooperate fully with the requirements
\nand recommendations of governmental agencies regulating, or otherwise involved
\nin, the protection of the environment.<\/p>\n
4.12 RULES AND REGULATIONS. In the event Juniper Networks, Inc. is no longer the
\nsole tenant of the Building, Landlord shall have the right from time to time to
\nestablish reasonable rules and regulations and\/or amendments or additions
\nthereto respecting the use of the Leased Premises and the Outside Areas for the
\ncare and orderly management of the Property. Upon delivery to Tenant of a copy
\nof such rules and regulations or any amendments or additions thereto, Tenant
\nshall comply with such rules and regulations. A violation by Tenant of any of
\nsuch rules and regulations shall constitute a default by Tenant under this
\nLease. If there is a conflict between the rules and regulations and any of the
\nprovisions of this Lease, the provisions of this Lease shall prevail. Landlord
\nshall not be responsible or liable to Tenant for the violation of such rules and
\nregulations by any other tenant of the Property.<\/p>\n
4.13 RESERVATIONS. Landlord reserves the right from time to time to grant,
\nwithout the consent or joinder of Tenant, such easements, rights of way and
\ndedications that Landlord deems necessary, and to cause the recordation of
\nparcel maps and covenants, conditions and restrictions, so long as such
\neasements, rights of way, dedications and covenants, conditions and restrictions
\ndo not materially and adversely affect the use of the Leased Premises by Tenant,
\nmaterially and adversely affect Tenant’s parking rights, and do not prohibit any
\nPermitted Use. Tenant agrees to execute any documents reasonably request by
\nLandlord to effectuate any such easement rights, dedications, maps or covenants,
\nconditions and restrictions.<\/p>\n
ARTICLE 5<\/p>\n
REPAIRS, MAINTENANCE, SERVICES AND UTILITIES<\/p>\n
5.1 REPAIR AND MAINTENANCE. Except in the case of damage to or destruction of
\nthe Leased Premises, the Building, the Outside Areas or the Property caused by
\nan act of God or other peril, in which case the provisions of Article 10 shall
\ncontrol, the parties shall have the following obligations and responsibilities
\nwith respect to the repair and maintenance of the Leased Premises, the Building,
\nthe Outside Areas, and the Property.<\/p>\n
(a) TENANT’S OBLIGATIONS. Tenant shall, at all times during the Lease
\nTerm and at its sole cost and expense, regularly clean and continuously keep and
\nmaintain in good order, condition and repair the Leased Premises and every part
\nthereof including, without limiting the generality of the foregoing, (i) all
\ninterior walls, floors and ceilings, (ii) all windows, doors and skylights,
\n(iii) all electrical wiring, conduits, connectors and fixtures, (iv) all
\nplumbing, pipes, sinks, toilets, faucets and drains, (v) all lighting fixtures,
\nbulbs and lamps and all heating, ventilating and air conditioning equipment, and
\n(vi) all entranceways to the Leased Premises. Tenant shall hire, at Tenant’s
\nsole cost and expense, a licensed heating, ventilating and air conditioning
\ncontractor to regularly and periodically (not less frequently than every three
\nmonths) inspect and perform required maintenance on the heating, ventilating and
\nair conditioning equipment and systems serving the Leased Premises. Tenant shall
\nhire, at Tenant’s sole cost and expense, a licensed roofing contractor to
\nregularly and periodically (not less frequently than semi-annually) inspect and
\nperform required maintenance on the roof of the Building. If Tenant shall be in
\ndefault of its obligations to maintain the heating, ventilating and air
\nconditioning equipment and systems or roof, Landlord may, at its election,
\ncontract in its own name for such regular and periodic inspections and
\nmaintenance of the heating, ventilating and air conditioning equipment and
\nsystems and\/or roof, and charge to Tenant, as Additional Rent, the cost thereof.
\nTenant shall, at its sole cost and expense, repair all damage to the Leased
\nPremises, the Building, the Outside Areas or the Property caused by the
\nactivities of Tenant, its employees, invitees or contractors promptly following
\nwritten notice from Landlord to so repair such damages (subject to Section 9.3
\nof this Lease). If Tenant shall fail to perform the required maintenance or fail
\nto make repairs required of it pursuant to this paragraph within a reasonable
\nperiod of time following notice from Landlord to do so, then Landlord may, at
\nits election and without waiving any other remedy it may otherwise have under
\nthis Lease or at law, perform such maintenance or make such repairs and charge
\nto Tenant, as Additional Rent, the costs so incurred by Landlord for same. All
\nglass within or a part of the Leased Premises, both interior and exterior, is at
\nthe sole risk of Tenant and any broken glass shall promptly be replaced by
\nTenant at Tenant’s expense with glass of the same kind, size and quality.
\nNotwithstanding the foregoing, in the event that, due to normal wear and tear
\n(and not due to other factors, including, without limitation, Tenant’s misuse,
\noveruse or Tenant’s alterations, improvements or modifications to the Leased
\nPremises, the Outside Areas or the Building), Tenant would be required by this
\nSection 5.1(a) to make a repair or replacement that would be considered a
\n“capital improvement” as determined in accordance with generally accepted
\naccounting principles, Landlord shall make such repair or replacement and charge
\nto Tenant, as Additional Rent, the cost thereof (provided that the cost of such
\nrepair or replacement shall be amortized over its useful life and only the
\namortizing portion of such cost shall be included in Additional Rent on a
\nmonthly basis).<\/p>\n
(b) LANDLORD’S OBLIGATION. Landlord shall at its sole cost and expense,
\nat all times during the Lease Term, maintain in good condition and repair the
\nfoundation, the footings, the roof screen, the roof screen penetrations, the
\nroof structure, load-bearing and exterior walls of the Building. Landlord shall,
\nat all times during the Lease Term, regularly and continuously keep and maintain
\nin good order and repair and in a clean and safe condition the Outside Areas,
\nand charge to Tenant, as Additional Rent, the cost thereof. Landlord shall
\nregularly and periodically sweep and clean the driveways and parking areas, and
\ncharge to Tenant, as Additional Rent, the cost thereof.<\/p>\n
10
\n 12<\/p>\n
5.2 UTILITIES. Tenant shall arrange at its sole cost and expense and in its own
\nname, for the supply of gas and electricity to the Leased Premises. In the event
\nthat such services are not separately metered, Tenant shall, at its sole
\nexpense, cause such meters to be installed. Landlord shall maintain the water
\nmeter(s) in its own name; provided, however, that if at any time during the
\nLease Term Landlord shall require Tenant to put the water service in Tenant’s
\nname, Tenant shall do so at Tenant’s sole cost. Tenant shall be responsible for
\ndetermining if the local supplier of water, gas and electricity can supply the
\nneeds of Tenant and whether or not the existing water, gas and electrical
\ndistribution systems within the Building and the Leased Premises are adequate
\nfor Tenant’s needs. Tenant shall be responsible for determining if the existing
\nsanitary and storm sewer systems now servicing the Leased Premises and the
\nProperty are adequate for Tenant’s needs. Tenant shall pay all charges for
\nwater, gas, electricity and storm and sanitary sewer services as so supplied to
\nthe Leased Premises, irrespective of whether or not the services are maintained
\nin Landlord’s or Tenant’s name.<\/p>\n
5.3 SECURITY. Tenant acknowledges that Landlord has not undertaken any duty
\nwhatsoever to provide security for the Leased Premises, the Building, the
\nOutside Areas or the Property and, accordingly, Landlord is not responsible for
\nthe security of same or the protection of Tenant’s property or Tenant’s
\nemployees, invitees or contractors. To the extent Tenant determines that such
\nsecurity or protection services are advisable or necessary, Tenant shall arrange
\nfor and pay the costs of providing same.<\/p>\n
5.4 ENERGY AND RESOURCE CONSUMPTION. Landlord may voluntarily cooperate in a
\nreasonable manner with the efforts of governmental agencies and\/or utility
\nsuppliers in reducing energy or other resource consumption within the Property.
\nTenant shall not be entitled to terminate this Lease or to any reduction in or
\nabatement of rent by reason of such compliance or cooperation. Tenant agrees at
\nall times to cooperate fully with Landlord and to abide by all reasonable rules
\nestablished by Landlord (i) in order to maximize the efficient operation of the
\nelectrical, heating, ventilating and air conditioning systems and all other
\nenergy or other resource consumption systems with the Property and\/or (ii) in
\norder to comply with the requirements and recommendations of utility suppliers
\nand governmental agencies regulating the consumption of energy and\/or other
\nresources.<\/p>\n
5.5 LIMITATION OF LANDLORD’S LIABILITY. Landlord shall not be liable to Tenant
\nfor injury to Tenant, its employees, agents, invitees or contractors, damage to
\nTenant’s property or loss of Tenant’s business or profits, nor shall Tenant be
\nentitled to terminate this Lease or to any reduction in or abatement of rent by
\nreason of (i) Landlord’s failure to provide security services or systems within
\nthe Property for the protection of the Leased Premises, the Building or the
\nOutside Areas, or the protection of Tenant’s property or Tenant’s employees,
\ninvitees, agents or contractors, or (ii) Landlord’s failure to perform any
\nmaintenance or repairs to the Leased Premises, the Building, the Outside Areas
\nor the Property until Tenant shall have first notified Landlord, in writing, of
\nthe need for such maintenance or repairs, and then only after Landlord shall
\nhave had a reasonable period of time following its receipt of such notice within
\nwhich to perform such maintenance or repairs, or (iii) any failure,
\ninterruption, rationing or other curtailment in the supply of water, electric
\ncurrent, gas or other utility service to the Leased Premises, the Building, the
\nOutside Areas or the Property from whatever cause (other than to the extent
\ncaused by Landlord’s active negligence or willful misconduct), or (iv) the
\nunauthorized intrusion or entry into the Leased Premises by third parties (other
\nthan Landlord).<\/p>\n
ARTICLE 6<\/p>\n
ALTERATIONS AND IMPROVEMENTS<\/p>\n
6.1 BY TENANT. Tenant shall not make any alterations to or modifications of the
\nLeased Premises or construct any improvements within the Leased Premises until
\nLandlord shall have first approved, in writing, the plans and specifications
\ntherefor, which approval shall not be unreasonably withheld or delayed.
\nLandlord’s approval shall be deemed given if not denied by Landlord in a written
\nnotice to Tenant delivered within fifteen (15) days following receipt of
\nTenant’s written request. Tenant’s written request shall also contain a request
\nfor Landlord to elect whether or not it will require Tenant to remove the
\nsubject alterations, modifications or improvements at the expiration or earlier
\ntermination of this Lease. If such additional request is not included, Landlord
\nmay make such election at the expiration or earlier termination of this Lease
\n(and for purposes of Tenant’s removal obligations set forth in Section 2.6
\nabove, Landlord shall be deemed to have made the election at the time the
\nalterations, modifications or improvements were completed). Notwithstanding the
\nforegoing, Tenant shall have the right, at its sole cost and expense, subject to
\nthe prior written approval of Landlord (which approval shall not be unreasonably
\nwithheld or delayed) to construct a covered open walkway between the Building
\nand the 1194 Building and Tenant shall not be required to remove such walkway
\nupon the termination of this Lease. All modifications, alterations or
\nimprovements, once approved by Landlord, shall be made, constructed or installed
\nby Tenant at Tenant’s expense (including all permit fees and governmental
\ncharges related thereto), using a licensed contractor first approved by
\nLandlord, in substantial compliance with the Landlord-approved plans and
\nspecifications therefor. All work undertaken by Tenant shall be done in
\naccordance with all Laws and in a good and workmanlike manner using new
\nmaterials of good quality. Tenant shall not commence the making of any such
\nmodifications or alterations or the construction of any such improvements until
\n(i) all required governmental approvals and permits shall have been obtained,
\n(ii) all requirements regarding insurance imposed by this Lease have been
\nsatisfied, (iii) Tenant shall have given Landlord at least five business days
\nprior written notice of its intention to commence such work so that Landlord may
\npost and file notices of non-responsibility, and (iv) if requested by Landlord,
\nTenant shall have obtained contingent liability and broad form builder’s risk
\ninsurance in an amount satisfactory to Landlord in its reasonable discretion to
\ncover any perils relating to the proposed work not covered by insurance carried
\nby Tenant pursuant to Article 9. In no event shall Tenant make any modification,
\nalterations or improvements whatsoever to the Outside Areas or the exterior or
\nstructural components of the Building including, without limitation, any cuts or
\npenetrations in the floor, roof or exterior walls of the Leased Premises (except
\nto the extent Tenant has obtained Landlord’s approval pursuant to Section 4.2).
\nAs used in this Article, the term “modifications, alterations and\/or
\nimprovements” shall include, without limitation, the installation of additional
\nelectrical outlets, overhead lighting<\/p>\n
11
\n 13<\/p>\n
fixtures, drains, sinks, partitions, doorways, or the like. Notwithstanding the
\nforegoing, Tenant, without Landlord’s prior written consent, shall be permitted
\nto make non-structural alterations to the Building, provided that: (a) such
\nalterations do not exceed $20,000 individually, (b) Tenant shall timely provide
\nLandlord the notice required pursuant to Paragraph 4.9 above, (c) Tenant shall
\nnotify Landlord in writing within thirty (30) days of completion of the
\nalteration and deliver to Landlord a set of the plans and specifications
\ntherefor, either “as built” or marked to show construction changes made, and (d)
\nTenant shall, upon Landlord’s request, remove the alteration at the termination
\nof the Lease and restore the Leased Premises to their condition prior to such
\nalteration.<\/p>\n
6.2 OWNERSHIP OF IMPROVEMENTS. All modifications, alterations and improvements
\nmade or added to the Leased Premises by Tenant (other than Tenant’s inventory,
\nequipment, movable furniture, wall decorations and trade fixtures) shall be
\ndeemed real property and a part of the Leased Premises, but shall remain the
\nproperty of Tenant during the Lease. Any such modifications, alterations or
\nimprovements, once completed, shall not be altered or removed from the Leased
\nPremises during the Lease Term without Landlord’s written approval first
\nobtained in accordance with the provisions of Paragraph 6.1 above. At the
\nexpiration or sooner termination of this Lease, all such modifications,
\nalterations and improvements other than Tenant’s inventory, equipment, movable
\nfurniture, wall decorations and trade fixtures, shall automatically become the
\nproperty of Landlord and shall be surrendered to Landlord as part of the Leased
\nPremises as required pursuant to Article 2, unless Landlord shall require Tenant
\nto remove any of such modifications, alterations or improvements in accordance
\nwith the provisions of Article 2, in which case Tenant shall so remove same.
\nLandlord shall have no obligations to reimburse Tenant for all or any portion of
\nthe cost or value of any such modifications, alterations or improvements so
\nsurrendered to Landlord. All modifications, alterations or improvements which
\nare installed or constructed on or attached to the Leased Premises by Landlord
\nand\/or at Landlord’s expense shall be deemed real property and a part of the
\nLeased Premises and shall be property of Landlord. All lighting, plumbing,
\nelectrical, heating, ventilating and air conditioning fixtures, partitioning,
\nwindow coverings, wall coverings and floor coverings installed by Tenant shall
\nbe deemed improvements to the Leased Premises and not trade fixtures of Tenant.
\nLandlord shall have no lien or interest whatsoever in any of Tenant’s property
\nor equipment located in the Leased Premises or elsewhere, and Landlord waives
\nany such liens and interests and Landlord hereby agrees to execute a Landlord
\nWaiver with respect thereto in favor of any lender or equipment lessor of Tenant
\nstrictly in the form attached as Exhibit F.<\/p>\n
6.3 ALTERATIONS REQUIRED BY LAW. Tenant shall make all modifications,
\nalterations and improvements to the Leased Premises, at its sole cost, that are
\nrequired by any Law because of (i) Tenant’s use or occupancy of the Leased
\nPremises, the Building, the Outside Areas or the Property, (ii) Tenant’s
\napplication for any permit or governmental approval, or (iii) Tenant’s making of
\nany modifications, alterations or improvements to or within the Leased Premises.
\nIf Landlord shall, at any time during the Lease Term, be required by any
\ngovernmental authority to make any modifications, alterations or improvements to
\nthe Building or the Property, the cost incurred by Landlord in making such
\nmodifications, alterations or improvements, including interest at a rate equal
\nto the greater of (a) 12%, or (b) the sum of that rate quoted by Wells Fargo
\nBank, N.T. & S.A. from time to time as its prime rate, plus two percent (2%)
\n(“Wells Prime Plus Two”) (but in no event more than the maximum interest rate
\npermitted by law), shall be amortized by Landlord over the useful life of such
\nmodifications, alterations or improvements, as determined in accordance with
\ngenerally accepted accounting principles, and the monthly amortized cost of such
\nmodifications, alterations and improvements as so amortized shall be considered
\na Property Maintenance Cost.<\/p>\n
6.4 LIENS. Tenant shall keep the Property and every part thereof free from any
\nlien, and shall pay when due all bills arising out of any work performed,
\nmaterials furnished, or obligations incurred by Tenant, its agents, employees or
\ncontractors relating to the Property. If any such claim of lien is recorded
\nagainst Tenant’s interest in this Lease, the Property or any part thereof,
\nTenant shall bond against, discharge or otherwise cause such lien to be entirely
\nreleased within ten days after the same has been recorded. Tenant’s failure to
\ndo so shall be conclusively deemed a material default under the terms of this
\nLease.<\/p>\n
ARTICLE 7<\/p>\n
ASSIGNMENT AND SUBLETTING BY TENANT<\/p>\n
7.1 BY TENANT. Tenant shall not sublet the Leased Premises or any portion
\nthereof or assign its interest in this Lease, whether voluntarily or by
\noperation of Law, without Landlord’s prior written consent which shall not be
\nunreasonably withheld. Any attempted subletting or assignment without Landlord’s
\nprior written consent, at Landlord’s election, shall constitute a default by
\nTenant under the terms of this Lease. The acceptance of rent by Landlord from
\nany person or entity other than Tenant, or the acceptance of rent by Landlord
\nfrom Tenant with knowledge of a violation of the provisions of this paragraph,
\nshall not be deemed to be a waiver by Landlord of any provision of this Article
\nor this Lease or to be a consent to any subletting by Tenant or any assignment
\nof Tenant’s interest in this Lease. Without limiting the circumstances in which
\nit may be reasonable for Landlord to withhold its consent to an assignment or
\nsubletting, Landlord and Tenant acknowledge that it shall be reasonable for
\nLandlord to withhold its consent in the following instances:<\/p>\n
(a) the proposed assignee or sublessee is a governmental agency;<\/p>\n
(b) in Landlord’s reasonable judgment, the use of the Leased Premises by
\nthe proposed assignee or sublessee would involve occupancy by other than a
\nPermitted Use as set forth in Article 1, would entail any alterations which
\nwould lessen the value of the leasehold improvements in the Leased Premises, or
\nwould require increased services by Landlord;<\/p>\n
(c) in Landlord’s reasonable judgment, the financial worth of the
\nproposed assignee is less than that of Tenant or does not meet the credit
\nstandards applied by Landlord at the time of the proposed assignment;<\/p>\n
12
\n 14<\/p>\n
(d) the proposed assignee or sublessee (or any of its affiliates) has
\nbeen in material default under a lease, has been in litigation with a previous
\nlandlord due to a default under a lease, or in the ten years prior to the
\nassignment or sublease has filed for bankruptcy protection, has been the subject
\nof an involuntary bankruptcy, or has been adjudged insolvent;<\/p>\n
(e) Landlord has experienced a previous default by or is in litigation
\nwith the proposed assignee or sublessee;<\/p>\n
(f) in Landlord’s reasonable judgment, the Leased Premises, or the
\nrelevant part thereof, will be used in a manner that will violate any negative
\ncovenant as to use contained in this Lease;<\/p>\n
(g) the use of the Leased Premises by the proposed assignee or sublessee
\nwill violate any applicable law, ordinance or regulation;<\/p>\n
(h) the proposed assignment or sublease fails to include all of the
\nterms and provisions required to be included therein pursuant to this Article 7;<\/p>\n
(i) Tenant is in default of any obligation of Tenant under this Lease,
\nor Tenant has defaulted on any of its payment obligations under this Lease on
\nthree or more occasions during the 12 months preceding the date that Tenant
\nshall request consent; or<\/p>\n
(j) in the case of a subletting of less than the entire Leased Premises,
\nif the subletting would result in the division of any floor of the Building into
\nmore than two subleased parcels or would require improvements to be made outside
\nof the Leased Premises.<\/p>\n
7.2 MERGER, REORGANIZATION, OR SALE OF ASSETS. Each of the following shall be
\ndeemed a voluntary assignment of Tenant’s interest in this Lease: (a)
\ndissolution, merger, consolidation or other reorganization of Tenant; or (b) at
\nany time that the capital stock of Tenant is not publicly traded on a recognized
\nexchange, the sale or transfer in one or more transactions to one or more
\nrelated parties of a controlling percentage of the capital stock of Tenant; or
\n(c) or the sale or transfer of all or substantially all of the assets of Tenant.
\nThe phrase “controlling percentage” means the ownership of and the right to vote
\nstock possessing more than fifty percent of the total combined voting power of
\nall classes of Tenant’s capital stock issued, outstanding and entitled to vote
\nfor the election of directors. If Tenant is a partnership, a withdrawal or
\nchange, voluntary, involuntary or by operation of Law, of any general partner,
\nor the dissolution of the partnership, shall be deemed a voluntary assignment of
\nTenant’s interest in this Lease. Notwithstanding the foregoing, Tenant (or any
\nPermitted Assignee, as defined herein) may, without Landlord’s prior written
\nconsent and without being subject to any of the provisions of this Article 7,
\nincluding without limitation, Landlord’s right to recapture any portion of the
\nLeased Premises, sublet the Leased Premises or assign this Lease to
\n(individually, a “Permitted Assignee,” collectively, “Permitted Assignees”): (i)
\na subsidiary, affiliate, division, corporation or joint venture controlling,
\ncontrolled by or under common control with Tenant; or (ii) a successor
\ncorporation related to Tenant by merger, consolidation, nonbankruptcy
\nreorganization, or government action; or (iii) a purchaser of all or
\nsubstantially all of the assets of Tenant; provided that either (1) Tenant shall
\nremain primarily liable under the Lease (except in the event it is not the
\nsurviving entity in the merger) or (2) that any Permitted Assignee under (i),
\n(ii) or (iii) above has a net worth equal to or greater than Tenant and does not
\nhave any contingent or off-balance sheet liabilities that make it less credit
\nworthy than Tenant. In the event any proposed assignee or subtenant under (i),
\n(ii) or (iii) above has a net worth less than Tenant or has contingent or
\noff-balance sheet liabilities that make it less credit worthy than Tenant,
\nLandlord’s consent (pursuant to Section 7.1 above) shall be required and all of
\nthe terms and conditions of this Article 7 shall apply, except that Landlord
\nshall not be entitled to terminate this Lease pursuant to Section 7.3, and
\nLandlord shall not be entitled to any assignment consideration or excess rentals
\npursuant to Section 7.5 of this Lease. If any proposed assignee or subtenant
\nunder (i), (ii) or (iii) above does not qualify as a Permitted Assignee because
\nit has a net worth which is less than Tenant or has contingent or off-balance
\nsheet liabilities that make it less creditworthy than Tenant, then in the event
\nLandlord nevertheless consents (pursuant to the provisions of Section 7.1 above)
\nto such proposed assignee or subtenant, such proposed assignee or subtenant
\nshall constitute a Permitted Assignee under this Lease.<\/p>\n
7.3 LANDLORD’S ELECTION. If Tenant shall desire to assign its interest under the
\nLease or to sublet the Leased Premises, Tenant must first notify Landlord, in
\nwriting, of its intent to so assign or sublet, at least thirty (30) days in
\nadvance of the date it intends to so assign its interest in this Lease or sublet
\nthe Leased Premises but not sooner than one hundred eighty days in advance of
\nsuch date, specifying in detail the terms of such proposed assignment or
\nsubletting, including the name of the proposed assignee or sublessee, the
\nproperty assignee’s or sublessee’s intended use of the Leased Premises, current
\nfinancial statements (including a balance sheet, income statement and statement
\nof cash flow, all prepared in accordance with generally accepted accounting
\nprinciples) of such proposed assignee or sublessee, the form of documents to be
\nused in effectuating such assignment or subletting and such other information as
\nLandlord may reasonably request. Landlord shall have a period of ten (10)
\nbusiness days following receipt of such notice and the required information
\nwithin which to do one of the following: (i) consent to such requested
\nassignment or subletting subject to Tenant’s compliance with the conditions set
\nforth in Paragraph 7.4 below, or (ii) refuse to so consent to such requested
\nassignment or subletting, provided that such consent shall not be unreasonably
\nrefused, or (iii) in the case of an assignment of this Lease or sublet of 100%
\nof the Leased Premises, terminate this Lease. During such ten (10) business day
\nperiod, Tenant covenants and agrees to supply to Landlord, upon request, all
\nnecessary or relevant information which Landlord may reasonably request
\nrespecting such proposed assignment or subletting and\/or the proposed assignee
\nor sublessee. Notwithstanding the foregoing, if Landlord elects to terminate the
\nLease as provided herein, Landlord shall notify Tenant thereof during such ten
\n(10) business day period and Tenant shall have ten (10) business days thereafter
\nto either (i) accept Landlord’s termination or (ii) rescind its request for
\nconsent to the assignment or subletting, in which case the Lease shall continue
\nin full force and effect between Tenant and Landlord.<\/p>\n
13
\n 15<\/p>\n
7.4 CONDITIONS TO LANDLORD’S CONSENT. If Landlord elects to consent, or shall
\nhave been ordered to so consent by a court of competent jurisdiction, to such
\nrequested assignment or subletting, such consent shall be expressly conditioned
\nupon the occurrence of each of the conditions below set forth, and any purported
\nassignment or subletting made or ordered prior to the full and complete
\nsatisfaction of each of the following conditions shall be void and, at the
\nelection of Landlord, which election may be exercised at any time following such
\na purported assignment or subletting but prior to the satisfaction of each of
\nthe stated conditions, shall constitute a material default by Tenant under this
\nLease until cured by satisfying in full each such condition by the assignee or
\nsublessee. The conditions are as follows:<\/p>\n
(a) Landlord having approved in form and substance the assignment or
\nsublease agreement and any ancillary documents, which approval shall not be
\nunreasonably withheld by Landlord if the requirements of this Article 7 are
\notherwise complied with.<\/p>\n
(b) Each such sublessee or assignee having agreed, in writing
\nsatisfactory to Landlord and its counsel and for the benefit of Landlord, to
\nassume, to be bound by, and to perform the obligations of this Lease to be
\nperformed by Tenant which relate to space being subleased.<\/p>\n
(c) Tenant having fully and completely performed all of its obligations
\nunder the terms of this Lease through and including the date of such assignment
\nor subletting.<\/p>\n
(d) Tenant having reimbursed to Landlord all reasonable costs and
\nreasonable attorneys’ fees incurred by Landlord in conjunction with the
\nprocessing and documentation of any such requested subletting or assignment.<\/p>\n
(e) Tenant having delivered to Landlord a complete and fully-executed
\nduplicate original of such sublease agreement or assignment agreement (as
\napplicable) and all related agreements.<\/p>\n
(f) Tenant having paid, or having agreed in writing to pay as to future
\npayments, to Landlord fifty percent (50%) of all assignment consideration or
\nexcess rentals to be paid to Tenant or to any other on Tenant’s behalf or for
\nTenant’s benefit for such assignment or subletting as follows:<\/p>\n
(i) If Tenant assigns its interest under this Lease and if all
\nor a portion of the consideration for such assignment is to be paid by the
\nassignee at the time of the assignment, that Tenant shall have paid to Landlord
\nand Landlord shall have received an amount equal to fifty percent (50%) of the
\nassignment consideration so paid or to be paid (whichever is the greater) at the
\ntime of the assignment by the assignee; or<\/p>\n
(ii) If Tenant assigns its interest under this Lease and if
\nTenant is to receive all or a portion of the consideration for such assignment
\nin future installments, that Tenant and Tenant’s assignee shall have entered
\ninto a written agreement with and for the benefit of Landlord satisfactory to
\nLandlord and its counsel whereby Tenant and Tenant’s assignee jointly agree to
\npay to Landlord an amount equal to fifty percent (50%) of all such future
\nassignment consideration installments to be paid by such assignee as and when
\nsuch assignment consideration is so paid.<\/p>\n
(iii) If Tenant subleases the Leased Premises, that Tenant and
\nTenant’s sublessee shall have entered into a written agreement with and for the
\nbenefit of Landlord satisfactory to Landlord and its counsel whereby Tenant and
\nTenant’s sublessee jointly agree to pay to Landlord fifty percent (50%) of all
\nexcess rentals to be paid by such sublessee as and when such excess rentals are
\nso paid.<\/p>\n
7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED. For purposes of this
\nArticle, including any amendment to this Article by way of addendum or other
\nwriting, the term “assignment consideration” shall mean all consideration to be
\npaid by the assignee to Tenant or to any other party on Tenant’s behalf or for
\nTenant’s benefit as consideration for such assignment, after deduction for
\nreasonable leasing commissions and reasonable legal fees incurred by Tenant in
\nconnection with such assignment and, during the first six (6) years of the Lease
\nTerm, the cost of tenant improvements made by Tenant at Tenant’s sole cost and
\nexpense to prepare the Leased Premises for the assignee, but without deduction
\nfor any other costs or expenses, and the term “excess rentals” shall mean all
\nconsideration to be paid by the sublessee to Tenant or to any other party on
\nTenant’s behalf or for Tenant’s benefit for the sublease of the Leased Premises
\nin excess of the rent due to Landlord under the terms of this Lease for the same
\nperiod, after deduction for reasonable leasing commissions and reasonable legal
\nfees incurred by Tenant in connection with such sublease and, during the first
\nsix (6) years of the Lease Term, the cost of tenant improvements made by Tenant
\nat Tenant’s sole cost and expense to prepare the Leased Premises for the
\nsubtenant, but without deduction for any other costs or expenses. Tenant agrees
\nthat the portion of any assignment consideration and\/or excess rentals arising
\nfrom any assignment or subletting by Tenant which is to be paid to Landlord
\npursuant to this Article now is and shall then be the property of Landlord and
\nnot the property of Tenant.<\/p>\n
7.6 PAYMENTS. All payments required by this Article to be made to Landlord shall
\nbe made in cash in full as and when they become due. At the time Tenant,
\nTenant’s assignee or sublessee makes each such payment to Landlord, Tenant or
\nTenant’s assignee or sublessee, as the case may be, shall deliver to Landlord an
\nitemized statement in reasonable detail showing the method by which the amount
\ndue Landlord was calculated and certified by the party making such payment as
\ntrue and correct.<\/p>\n
7.7 GOOD FAITH. The rights granted to Tenant by this Article are granted in
\nconsideration of Tenant’s express covenant that all pertinent allocations which
\nare made by Tenant between the rental value of the Leased Premises and the value
\nof any of Tenant’s personal property which may be conveyed or leased generally
\nconcurrently with and which may reasonably be considered a part of the same
\ntransaction as the permitted assignment or subletting<\/p>\n
14
\n 16<\/p>\n
shall be made fairly, honestly and in good faith. If Tenant shall breach this
\ncovenant, Landlord may immediately declare Tenant to be in default under the
\nterms of this Lease and terminate this Lease and\/or exercise any other rights
\nand remedies Landlord would have under the terms of this Lease in the case of a
\nmaterial default by Tenant under this Lease.<\/p>\n
7.8 EFFECT OF LANDLORD’S CONSENT. No subletting or assignment, even with the
\nconsent of Landlord, shall relieve Tenant of its personal and primary obligation
\nto pay rent and to perform all of the other obligations to be performed by
\nTenant hereunder. Consent by Landlord to one or more assignments of Tenant’s
\ninterest in this Lease or to one or more sublettings of the Leased Premises
\nshall not be deemed to be a consent to any subsequent assignment or subletting.
\nIf Landlord shall have been ordered by a court of competent jurisdiction to
\nconsent to a requested assignment or subletting, or such an assignment or
\nsubletting shall have been ordered by a court of competent jurisdiction over the
\nobjection of Landlord, such assignment or subletting shall not be binding
\nbetween the assignee (or sublessee) and Landlord until such time as all
\nconditions set forth in Paragraph 7.4 above have been fully satisfied (to the
\nextent not then satisfied) by the assignee or sublessee, including, without
\nlimitation, the payment to Landlord of all agreed assignment considerations
\nand\/or excess rentals then due Landlord.<\/p>\n
ARTICLE 8<\/p>\n
LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY<\/p>\n
8.1 LIMITATION ON LANDLORD’S LIABILITY AND RELEASE. Landlord shall not be liable
\nto Tenant for, and Tenant hereby releases Landlord and its partners, principals,
\nmembers, officers, agents, employees, lenders, attorneys, and consultants from,
\nany and all liability, whether in contract, tort or on any other basis, for any
\ninjury to or any damage sustained by Tenant, Tenant’s agents, employees,
\ncontractors or invitees, any damage to Tenant’s property, or any loss to
\nTenant’s business, loss of Tenant’s profits or other financial loss of Tenant
\nresulting from or attributable to the condition of, the management of, the
\nrepair or maintenance of, the protection of, the supply of services or utilities
\nto, the damage in or destruction of the Leased Premises, the Building, the
\nProperty or the Outside Areas, including without limitation (i) the failure,
\ninterruption, rationing or other curtailment or cessation in the supply of
\nelectricity, water, gas or other utility service to the Property, the Building
\nor the Leased Premises; (ii) the vandalism or forcible entry into the Building
\nor the Leased Premises; (iii) the penetration of water into or onto any portion
\nof the Leased Premises; (iv) the failure to provide security and\/or adequate
\nlighting in or about the Property, the Building or the Leased Premises, (v) the
\nexistence of any design or construction defects within the Property, the
\nBuilding or the Leased Premises; (vi) the failure of any mechanical systems to
\nfunction properly (such as the HVAC systems); (vii) the blockage of access to
\nany portion of the Property, the Building or the Leased Premises, except that
\nTenant does not so release Landlord from such liability to the extent such
\ndamage was proximately caused by Landlord’s active negligence, willful
\nmisconduct, or Landlord’s failure to perform an obligation expressly undertaken
\npursuant to this Lease after a reasonable period of time shall have lapsed
\nfollowing receipt of written notice from Tenant to so perform such obligation.
\nIn this regard, Tenant acknowledges that it is fully apprised of the provisions
\nof Law relating to releases, and particularly to those provisions contained in
\nSection 1542 of the California Civil Code which reads as follows:<\/p>\n
“A general release does not extend to claims which the creditor does not
\n know or suspect to exist in his favor at the time of executing the
\n release, which if known by him must have materially affected his
\n settlement with the debtor.”<\/p>\n
Notwithstanding such statutory provision, and for the purpose of implementing a
\nfull and complete release and discharge, Tenant hereby (i) waives the benefit of
\nsuch statutory provision and (ii) acknowledges that, subject to the exceptions
\nspecifically set forth herein, the release and discharge set forth in this
\nparagraph is a full and complete settlement and release and discharge of all
\nclaims and is intended to include in its effect, without limitation, all claims
\nwhich Tenant, as of the date hereof, does not know of or suspect to exist in its
\nfavor.<\/p>\n
8.2 TENANT’S INDEMNIFICATION OF LANDLORD. Tenant shall defend with competent
\ncounsel satisfactory to Landlord any claims made or legal actions filed or
\nthreatened against Landlord with respect to the violation of any Law, or the
\ndeath, bodily injury, personal injury, property damage, or interference with
\ncontractual or property rights suffered by any third party, occurring within the
\nLeased Premises or resulting from Tenant’s use or occupancy of the Leased
\nPremises, the Building or the Outside Areas, or resulting from Tenant’s
\nactivities in or about the Leased Premises, the Building, the Outside Areas or
\nthe Property, and Tenant shall indemnify and hold Landlord, Landlord’s partners,
\nprincipals, members, employees, agents and contractors harmless from any loss
\nliability, penalties, or expense whatsoever (including any loss attributable to
\nvacant space which otherwise would have been leased, but for such activities)
\nresulting therefrom, except to the extent proximately caused by the active
\nnegligence or willful misconduct of Landlord or Landlord’s failure to perform an
\nobligation expressly undertaken pursuant to this Lease after a reasonable period
\nof time shall have lapsed following receipt of written notice from Tenant to so
\nperform such obligation. This indemnity agreement shall survive the expiration
\nor sooner termination of this Lease.<\/p>\n
ARTICLE 9<\/p>\n
INSURANCE<\/p>\n
9.1 TENANT’S INSURANCE. Tenant shall maintain insurance complying with all of
\nthe following:<\/p>\n
(a) Tenant shall procure, pay for and keep in full force and effect, at
\nall times during the Lease Term, the following:<\/p>\n
15
\n 17<\/p>\n
(i) Comprehensive general liability insurance insuring Tenant
\nagainst liability for personal injury, bodily injury, death and damage to
\nproperty occurring within the Leased Premises, or resulting from Tenant’s use or
\noccupancy of the Leased Premises, the Building, the Outside Areas or the
\nProperty, or resulting from Tenant’s activities in or about the Leased Premises
\nor the Property, with coverage in an amount equal to Tenant’s Required Liability
\nCoverage (as set forth in Article 1), which insurance shall contain a “broad
\nform liability” endorsement insuring Tenant’s performance of Tenant’s
\nobligations to indemnify Landlord as contained in this Lease.<\/p>\n
(ii) Fire and property damage insurance in so-called “fire and
\nextended coverage” form insuring Tenant against loss from physical damage to
\nTenant’s personal property, inventory, trade fixtures and improvements within
\nthe Leased Premises with coverage for the full actual replacement cost thereof;<\/p>\n
(iii) Plate glass insurance, at actual replacement cost;<\/p>\n
(iv) Pressure vessel insurance, if applicable;<\/p>\n
(v) Workers’ compensation insurance and any other employee
\nbenefit insurance sufficient to comply with all laws; and<\/p>\n
(vi) With respect to making of alterations or the construction
\nof improvements or the like undertaken by Tenant, contingent liability and
\nbuilder’s risk insurance, in an amount and with coverage reasonably satisfactory
\nto Landlord.<\/p>\n
(b) Each policy of liability insurance required to be carried by Tenant
\npursuant to this paragraph or actually carried by Tenant with respect to the
\nLeased Premises or the Property: (i) shall, except with respect to insurance
\nrequired by subparagraph (a)(vi) above, name Landlord, and such others as are
\ndesignated by Landlord, as additional insureds; (ii) shall be primary insurance
\nproviding that the insurer shall be liable for the full amount of the loss, up
\nto and including the total amount of liability set forth in the declaration of
\ncoverage, without the right of contribution from or prior payment by any other
\ninsurance coverage of Landlord; (iii) shall be in a form satisfactory to
\nLandlord; (iv) shall be carried with companies reasonably acceptable to Landlord
\nwith Best’s ratings of at least A and XI; (v) shall provide that such policy
\nshall not be subject to cancellation, lapse or change except after at least
\nthirty days prior written notice to Landlord, and (vi) shall contain a so-called
\n“severability” or “cross liability” endorsement. Each policy of property
\ninsurance maintained by Tenant with respect to the Leased Premises or the
\nProperty or any property therein (i) shall provide that such policy shall not be
\nsubject to cancellation, lapse or change except after at least thirty days prior
\nwritten notice to Landlord and (ii) shall contain a waiver and\/or a permission
\nto waive by the insurer of any right of subrogation against Landlord, its
\npartners, principals, members, officers, employees, agents and contractors,
\nwhich might arise by reason of any payment under such policy or by reason of any
\nact or omission of Landlord, its partners, principals, members, officers,
\nemployees, agents and contractors.<\/p>\n
(c) Prior to the time Tenant or any of its contractors enters the Leased
\nPremises, Tenant shall deliver to Landlord, with respect to each policy of
\ninsurance required to be carried by Tenant pursuant to this Article, a copy of
\nsuch policy (appropriately authenticated by the insurer as having been issued,
\npremium paid) or a certificate of the insurer certifying in form satisfactory to
\nLandlord that a policy has been issued, premium paid, providing the coverage
\nrequired by this Paragraph and containing the provisions specified herein. With
\nrespect to each renewal or replacement of any such insurance, the requirements
\nof this Paragraph must be complied with not less than thirty days prior to the
\nexpiration or cancellation of the policies being renewed or replaced. Landlord
\nmay, at any time and from time to time, inspect and\/or copy any and all
\ninsurance policies required to be carried by Tenant pursuant to this Article. If
\nLandlord’s Lender, insurance broker, advisor or counsel reasonably determines at
\nany time that the amount of coverage set forth in Paragraph 9.1(a) for any
\npolicy of insurance Tenant is required to carry pursuant to this Article is not
\nadequate, then Tenant shall increase the amount of coverage for such insurance
\nto such greater amount as Landlord’s Lender, insurance broker, advisor or
\ncounsel reasonably deems adequate.<\/p>\n
9.2 LANDLORD’S INSURANCE. With respect to insurance maintained by Landlord:<\/p>\n
(a) Landlord shall maintain, as the minimum coverage required of it by
\nthis Lease, fire and property damage insurance in so-called “fire and extended
\ncoverage” form insuring Landlord (and such others as Landlord may designate)
\nagainst loss from physical damage to the Building with coverage of not less than
\none hundred percent (100%) of the full actual replacement cost thereof and
\nagainst loss of rents for a period of not less than six months. Such fire and
\nproperty damage insurance, at Landlord’s election but without any requirements
\non Landlord’s behalf to do so, (i) may be written in so-called “all risk” form,
\nexcluding only those perils commonly excluded from such coverage by Landlord’s
\nthen property damage insurer; (ii) may provide coverage for physical damage to
\nthe improvements so insured for up to the entire full actual replacement cost
\nthereof; (iii) may be endorsed to cover loss or damage caused by any additional
\nperils against which Landlord may elect to insure, including earthquake and\/or
\nflood; and\/or (iv) may provide coverage for loss of rents for a period of up to
\ntwelve months. Landlord shall not be required to cause such insurance to cover
\nany of Tenant’s personal property, inventory, and trade fixtures, or any
\nmodifications, alterations or improvements made or constructed by Tenant to or
\nwithin the Leased Premises. Landlord shall use commercially reasonable efforts
\nto obtain such insurance at competitive rates.<\/p>\n
(b) Landlord shall maintain comprehensive general liability insurance
\ninsuring Landlord (and such others as are designated by Landlord) against
\nliability for personal injury, bodily injury, death, and damage to property
\noccurring in, on or about, or resulting from the use or occupancy of the
\nProperty, or any portion thereof, with combined single limit coverage of at
\nleast Three Million Dollars ($3,000,000). Landlord may carry such greater<\/p>\n
16
\n 18<\/p>\n
coverage as Landlord or Landlord’s Lender, insurance broker, advisor or counsel
\nmay from time to time determine is reasonably necessary for the adequate
\nprotection of Landlord and the Property.<\/p>\n
(c) Landlord may maintain any other insurance which in the opinion of
\nits insurance broker, advisor or legal counsel is prudent in carry under the
\ngiven circumstances, provided such insurance is commonly carried by owners of
\nproperty similarly situated and operating under similar circumstances.<\/p>\n
9.3 MUTUAL WAIVER OF SUBROGATION. Landlord hereby releases Tenant, and Tenant
\nhereby releases Landlord and its respective partners, principals, members,
\nofficers, agents, employees and servants, from any and all liability for loss,
\ndamage or injury to the property of the other in or about the Leased Premises or
\nthe Property which is caused by or results from a peril or event or happening
\nwhich is covered by insurance actually carried and in force at the time of the
\nloss by the party sustaining such loss; provided, however, that such waiver
\nshall be effective only to the extent permitted by the insurance covering such
\nloss and to the extent such insurance is not prejudiced thereby.<\/p>\n
ARTICLE 10<\/p>\n
DAMAGE TO LEASED PREMISES<\/p>\n
10.1 LANDLORD’S DUTY TO RESTORE. If the Leased Premises, the Building or the
\nOutside Area are damaged by any peril after the Effective Date of this Lease,
\nLandlord shall restore the same, as and when required by this paragraph, unless
\nthis Lease is terminated by Landlord pursuant to Paragraph 10.3 or by Tenant
\npursuant to Paragraph 10.4. If this Lease is not so terminated, then upon the
\nissuance of all necessary governmental permits, Landlord shall commence and
\ndiligently prosecute to completion the restoration of the Leased Premises, the
\nBuilding or the Outside Area, as the case may be, to the extent then allowed by
\nlaw, to substantially the same condition in which it existed as of the Lease
\nCommencement Date. Landlord’s obligation to restore shall be limited to the
\nimprovements constructed by Landlord. Landlord shall have no obligation to
\nrestore any Improvements made by Tenant to the Leased Premises or any of
\nTenant’s personal property, inventory or trade fixtures. Upon completion of the
\nrestoration by Landlord, Tenant shall forthwith replace or fully repair all of
\nTenant’s personal property, inventory, trade fixtures and other improvements
\nconstructed by Tenant to like or similar conditions as existed at the time
\nimmediately prior to such damage or destruction.<\/p>\n
10.2 INSURANCE PROCEEDS. All insurance proceeds available from the fire and
\nproperty damage insurance carried by Landlord shall be paid to and become the
\nproperty of Landlord. If this Lease is terminated pursuant to either Paragraph
\n10.3 or 10.4, all insurance proceeds available from insurance carried by Tenant
\nwhich cover loss of property that is Landlord’s property or would become
\nLandlord’s property on termination of this Lease shall be paid to and become the
\nproperty of Landlord, and the remainder of such proceeds shall be paid to and
\nbecome the property of Tenant. If this Lease is not terminated pursuant to
\neither Paragraph 10.3 or 10.4, all insurance proceeds available from insurance
\ncarried by Tenant which cover loss to property that is Landlord’s property shall
\nbe paid to and become the property of Landlord, and all proceeds available from
\nsuch insurance which cover loss to property which would only become the property
\nof Landlord upon the termination of this Lease shall be paid to and remain the
\nproperty of Tenant. The determination of Landlord’s property and Tenant’s
\nproperty shall be made pursuant to Paragraph 6.2.<\/p>\n
10.3 LANDLORD’S RIGHT TO TERMINATE. Landlord shall have the option to terminate
\nthis Lease in the event any of the following occurs, which option may be
\nexercised only by delivery to Tenant of a written notice of election to
\nterminate within thirty days after the date of such damage or destruction:<\/p>\n
(a) The Building is damaged by any peril covered by valid and
\ncollectible insurance actually carried by Landlord and in force at the time of
\nsuch damage or destruction or by any peril which would have been covered by the
\ninsurance Landlord is required to maintain pursuant to Section 9.2 (an “Insured
\nPeril”) to such an extent that the estimated cost to restore the Building
\nexceeds the lesser of (i) the insurance proceeds available from insurance
\nactually carried by Landlord (or which Landlord was required to carry pursuant
\nto Section 9.2(a) hereof) plus the amount of any deductible (up to a maximum
\namount of five percent (5%) of the replacement cost of the Building), plus any
\namount that the Tenant agrees in writing to contribute towards restoration, or
\n(ii) fifty percent of the then actual replacement cost of the Building;<\/p>\n
(b) The Building is damaged by an uninsured peril, which peril Landlord
\nwas not required to insure against pursuant to the provisions of Article 9 of
\nthis Lease, provided, however, that, subject to the requirements of the holder
\nof any deed of trust encumbering the Property, Landlord shall not have the right
\nto terminate this Lease if Tenant notifies Landlord, within thirty (30) days
\nafter Tenant receives Landlord’s written notice of termination pursuant to this
\nSection 10.3, that Tenant will pay for the cost of restoration of the Leased
\nPremises, in excess of any insurance proceeds to be received by Landlord.<\/p>\n
(c) The Building is damaged by any peril and, because of the laws then
\nin force, the Building (i) cannot be restored at reasonable cost or (ii) if
\nrestored, cannot be used for the same use being made thereof before such damage.<\/p>\n
10.4 TENANT’S RIGHT TO TERMINATE. If the Leased Premises, the Building or the
\nOutside Area are damaged by any peril and Landlord does not elect to terminate
\nthis Lease or is not entitled to terminate this Lease pursuant to this Article,
\nthen as soon as reasonably practicable, Landlord shall furnish Tenant with the
\nwritten opinion of Landlord’s architect or construction consultant as to when
\nthe restoration work required of Landlord may be complete. Tenant shall have the
\noption to terminate this Lease in the event any of the following occurs, which
\noption may be exercised only by delivery to Landlord of a written notice of
\nelection to terminate within seven days after Tenant receives from Landlord the
\nestimate of the time needed to complete such restoration:<\/p>\n
17
\n 19<\/p>\n
(a) If the time estimated to substantially complete the restoration
\nexceeds nine (9) months from and after the date the architect’s or construction
\nconsultant’s written opinion is delivered; or<\/p>\n
(b) If the damage occurred within twelve months of the last day of the
\nLease Term and the time estimated to substantially complete the restoration
\nexceeds one hundred eighty days from and after the date such restoration is
\ncommenced.<\/p>\n
10.5 TENANT’S WAIVER. Landlord and Tenant agree that the provisions of Paragraph
\n10.4 above, captioned “Tenant’s Right To Terminate”, are intended to supersede
\nand replace the provisions contained in California Civil Code, Section 1932,
\nSubdivision 2, and California Civil Code, Section 1934, and accordingly, Tenant
\nhereby waives the provisions of such Civil Code Sections and the provisions of
\nany successor Civil Code Sections or similar laws hereinafter enacted.<\/p>\n
10.6 ABATEMENT OF RENT. In the event of damage to the Leased Premises which does
\nnot result in the termination of this Lease, the Base Monthly Rent (and any
\nAdditional Rent) shall be temporarily abated during the period of restoration in
\nproportion in the degree to which Tenant’s use of the Leased Premises is
\nimpaired by such damage.<\/p>\n
ARTICLE 11<\/p>\n
CONDEMNATION<\/p>\n
11.1 TENANT’S RIGHT TO TERMINATE. Except as otherwise provided in Paragraph 11.4
\nbelow regarding temporary takings, Tenant shall have the option to terminate
\nthis Lease if, as a result of any taking, (i) all of the Leased Premises is
\ntaken, or (ii) twenty-five percent (25%) or more of the Leased Premises is taken
\nand the part of the Leased Premises that remains cannot, within a reasonable
\nperiod of time, be made reasonably suitable for the continued operation of
\nTenant’s business, or (iii) or a portion of the Outside Area is taken such that
\nthe parking available to Tenant is reduced by more than twenty percent (20%),
\nand the Landlord does not, within a reasonable period of time, provide
\nalternative parking arrangements within a reasonable walking distance of the
\nLeased Premises. Tenant must exercise such option within a reasonable period of
\ntime, to be effective on the later to occur of (i) the date that possession of
\nthat portion of the Leased Premises that is condemned is taken by the condemnor
\nor (ii) the date Tenant vacated the Leased Premises.<\/p>\n
11.2 LANDLORD’S RIGHT TO TERMINATE. Except as otherwise provided in Paragraph
\n11.4 below regarding temporary takings, Landlord shall have the option to
\nterminate this Lease if, as a result of any taking, (i) all of the Leased
\nPremises is taken, (ii) twenty-five percent (25%) or more of the Leased Premises
\nis taken and the part of the Leased Premises that remains cannot, within a
\nreasonable period of time, be made reasonably suitable for the continued
\noperation of Tenant’s business, or (iii) because of the laws then in force, the
\nLeased Premises may not be used for the same use being made before such taking,
\nwhether or not restored as required by Paragraph 11.3 below. Any such option to
\nterminate by Landlord must be exercised within a reasonable period of time, to
\nbe effective as of the date possession is taken by the condemnor.<\/p>\n
11.3 RESTORATION. If any part of the Leased Premises or the Building is taken
\nand this Lease is not terminated, then Landlord shall, to the extent not
\nprohibited by laws then in force, repair any damage occasioned thereby to the
\nremainder thereof to a condition reasonably suitable for Tenant’s continued
\noperations and otherwise, to the extent practicable, in the manner and to the
\nextent provided in Paragraph 10.1.<\/p>\n
11.4 TEMPORARY TAKING. If a portion of the Leased Premises is temporarily taken
\nfor a period of one year or less and such period does not extend beyond the
\nLease Expiration Date, this Lease shall remain in effect. If any portion of the
\nLeased Premises is temporarily taken for a period which exceeds one year or
\nwhich extends beyond the Lease Expiration Date, then the rights of Landlord and
\nTenant shall be determined in accordance with Paragraphs 11.1 and 11.2 above.<\/p>\n
11.5 DIVISION OF CONDEMNATION AWARD. Any award made for any taking of the
\nProperty, the Building, or the Leased Premises, or any portion thereof, shall
\nbelong to and be paid to Landlord, and Tenant hereby assigns to Landlord all of
\nits right, title and interest in any such award; provided, however, that Tenant
\nshall be entitled to receive any portion of the award that is made specifically
\n(i) for the taking of personal property, inventory or trade fixtures belonging
\nto Tenant, (ii) for the interruption of Tenant’s business or its moving costs,
\nor (iii) for the value of any leasehold improvements installed and paid for by
\nTenant. The rights of Landlord and Tenant regarding any condemnation shall be
\ndetermined as provided in this Article, and each party hereby waives the
\nprovisions of Section 1265.130 of the California Code of Civil Procedure, and
\nthe provisions of any similar law hereinafter enacted, allowing either party to
\npetition the Supreme Court to terminate this Lease and\/or otherwise allocate
\ncondemnation awards between Landlord and Tenant in the event of a taking of the
\nLeased Premises.<\/p>\n
11.6 ABATEMENT OF RENT. In the event of a taking of the Leased Premises which
\ndoes not result in a termination of this Lease (other than a temporary taking),
\nthen, as of the date possession is taken by the condemning authority, the Base
\nMonthly Rent shall be reduced in the same proportion that the area of that part
\nof the Leased Premises so taken (less any addition to the area of the Leased
\nPremises by reason of any reconstruction) bears to the area of the Leased
\nPremises immediately prior to such taking.<\/p>\n
11.7 TAKING DEFINED. The term “taking” or “taken” as used in this Article 11
\nshall mean any transfer or conveyance of all or any portion of the Property to a
\npublic or quasi-public agency or other entity having the power of eminent domain
\npursuant to or as a result of the exercise of such power by such an agency,
\nincluding any inverse<\/p>\n
18
\n 20<\/p>\n
condemnation and\/or any sale or transfer by Landlord of all or any portion of
\nthe Property to such an agency under threat of condemnation or the exercise of
\nsuch power.<\/p>\n
ARTICLE 12<\/p>\n
DEFAULT AND REMEDIES<\/p>\n
12.1 EVENTS OF TENANT’S DEFAULT. Tenant shall be in default of its obligations
\nunder this Lease if any of the following events occur:<\/p>\n
(a) Tenant shall have failed to pay Base Monthly Rent or any Additional
\nRent within three (3) days after notice from Landlord that such rent is past due
\nprovided, however, that such notice shall be concurrent with, and not in
\naddition to, any notice required by applicable Laws; or<\/p>\n
(b) Tenant shall have done or permitted to be done any act, use or thing
\nin its use, occupancy or possession of the Leased Premises or the Building or
\nthe Outside Areas which is prohibited by the terms of this Lease or Tenant shall
\nhave failed to perform any term, covenant or condition of this Lease (except
\nthose requiring the payment of Base Monthly Rent or Additional Rent, which
\nfailures shall be governed by subparagraph (a) above) within thirty (30) days
\nafter written notice from Landlord to Tenant specifying the nature of such
\nfailure and requesting Tenant to perform same or within such longer period as is
\nreasonably required in the event such default is curable but not within such
\nthirty (30) day period, provided such cure is promptly commenced within such
\nthirty (30) day period and is thereafter diligently prosecuted to completion; or<\/p>\n
(c) Tenant shall have sublet the Leased Premises or assigned or
\nencumbered its interest in this Lease in violation of the provisions contained
\nin Article 7, whether voluntarily or by operation of law; or<\/p>\n
(d) Tenant shall have abandoned the Leased Premises; or<\/p>\n
(e) Tenant or any Guarantor of this Lease shall have permitted or
\nsuffered the sequestration or attachment of, or execution on, or the appointment
\nof a custodian or receiver with respect to, all or any substantial part of the
\nproperty or assets of Tenant (or such Guarantor) or any property or asset
\nessential to the conduct of Tenant’s (or such Guarantor’s) business, and Tenant
\n(or such Guarantor) shall have failed to obtain a return or release of the same
\nwithin thirty days thereafter, or prior to sale pursuant to such sequestration,
\nattachment or levy, whichever is earlier; or<\/p>\n
(f) Tenant or any Guarantor of this Lease shall have made a general
\nassignment of all or a substantial part of its assets for the benefit of its
\ncreditors; or<\/p>\n
(g) Tenant or any Guarantor of this Lease shall have allowed (or sought)
\nto have entered against it a decree or order which: (i) grants or constitutes an
\norder for relief, appointment of a trustee, or condemnation or a reorganization
\nplan under the bankruptcy laws of the United States; (ii) approves as properly
\nfiled a petition seeking liquidation or reorganization under said bankruptcy
\nlaws or any other debtor’s relief law or similar statute of the United States or
\nany state thereof; or (iii) otherwise directs the winding up or liquidation of
\nTenant; provided, however, if any decree or order was entered without Tenant’s
\nconsent or over Tenant’s objection, Landlord may not terminate this Lease
\npursuant to this Subparagraph if such decree or order is rescinded or reversed
\nwithin thirty days after its original entry; or<\/p>\n
(h) Tenant or any Guarantor of this Lease shall have availed itself of
\nthe protection of any debtor’s relief law, moratorium law or other similar law
\nwhich does not require the prior entry of a decree or order.<\/p>\n
(i) Tenant shall be in default of its obligations under any other Lease
\nbetween Landlord and Tenant.<\/p>\n
12.2 LANDLORD’S REMEDIES. In the event of any default by Tenant, and without
\nlimiting Landlord’s right to indemnification as provided in Article 8.2,
\nLandlord shall have the following remedies, in addition to all other rights and
\nremedies provided by law or otherwise provided in this Lease, to which Landlord
\nmay resort cumulatively, or in the alternative:<\/p>\n
(a) Landlord may, at Landlord’s election, keep this Lease in effect and
\nenforce, by an action at law or in equity, all of its rights and remedies under
\nthis Lease including, without limitation, (i) the right to recover the rent and
\nother sums as they become due by appropriate legal action, (ii) the right to
\nmake payments required by Tenant, or perform Tenant’s obligations and be
\nreimbursed by Tenant for the cost thereof with interest at the then maximum rate
\nof interest not prohibited by law from the date the sum is paid by Landlord
\nuntil Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive
\nrelief and specific performance to prevent Tenant from violating the terms of
\nthis Lease and\/or to compel Tenant to perform its obligations under this Lease,
\nas the case may be.<\/p>\n
(b) Landlord may, at Landlord’s election, terminate this Lease by giving
\nTenant written notice of termination, in which event this Lease shall terminate
\non the date set forth for termination in such notice, in which event Tenant
\nshall immediately surrender the Leased Premises to Landlord, and if Tenant fails
\nto do so, Landlord may, without prejudice to any other remedy which it may have
\nfor possession or arrearages in rent, enter upon and take possession of the
\nLeased Premises and expel or remove Tenant and any other person who may be
\noccupying the Leased Premises or any part thereof, without being liable for
\nprosecution or any claim or damages therefor. Any termination under this
\nsubparagraph shall not relieve Tenant from its obligation to pay to Landlord all
\nBase Monthly Rent and Additional Rent then or thereafter due, or any other sums
\ndue or thereafter accruing to Landlord, or from<\/p>\n
19
\n 21<\/p>\n
any claim against Tenant for damages previously accrued or then or thereafter
\naccruing. In no event shall any one or more of the following actions by
\nLandlord, in the absence of a written election by Landlord to terminate this
\nLease constitute a termination of this Lease:<\/p>\n
(i) Appointment of a receiver or keeper in order to protect
\nLandlord’s interest hereunder;<\/p>\n
(ii) Consent to any subletting of the Leased Premises or
\nassignment of this Lease by Tenant, whether pursuant to the provisions hereof or
\notherwise; or<\/p>\n
(iii) Any action taken by Landlord or its partners, principals,
\nmembers, officers, agents, employees, or servants, which is intended to mitigate
\nthe adverse effects of any breach of this Lease by Tenant, including, without
\nlimitation, any action taken to maintain and preserve the Leased Premises on any
\naction taken to relet the Leased Premises or any portion thereof for the account
\nat Tenant and in the name of Tenant.<\/p>\n
(c) In the event Tenant breaches this Lease and abandons the Leased
\nPremises, Landlord may terminate this Lease, but this Lease shall not terminate
\nunless Landlord gives Tenant written notice of termination. If Landlord does not
\nterminate this Lease by giving written notice of termination, Landlord may
\nenforce all its rights and remedies under this Lease, including the right and
\nremedies provided by California Civil Code Section 1951.4 (“lessor may continue
\nlease in effect after lessee’s breach and abandonment and recover rent as it
\nbecomes due, if lessee has right to sublet or assign, subject only to reasonable
\nlimitations”), as in effect on the Effective Date of this Lease.<\/p>\n
(d) In the event Landlord terminates this Lease, Landlord shall be
\nentitled, at Landlord’s election, to the rights and remedies provided in
\nCalifornia Civil Code Section 1951.2, as in effect on the Effective Date of this
\nLease. For purposes of computing damages pursuant to Section 1951.2, an interest
\nrate equal to the maximum rate of interest then not prohibited by law shall be
\nused where permitted. Such damages shall include, without limitation:<\/p>\n
(i) The worth at the time of the award of the unpaid rent which
\nhad been earned at the time of termination;<\/p>\n
(ii) The worth at the time of award of the amount by which the
\nunpaid rent for the balance of the term after the time of award exceeds the
\namount of such rental loss that Tenant proves could be reasonably avoided,
\ncomputed by discounting such amount at the discount rate of the Federal Reserve
\nBank of San Francisco, at the time of award plus one percent; and<\/p>\n
(iii) Any other amount necessary to compensate Landlord for all
\ndetriment proximately caused by Tenant’s failure to perform Tenant’s obligations
\nunder this Lease, or which in the ordinary course of things would be likely to
\nresult therefrom, including without limitation, the following: (i) expenses for
\ncleaning, repairing or restoring the Leased Premises, (ii) expenses for
\naltering, remodeling or otherwise improving the Leased Premises for the purpose
\nof reletting, including removal of existing leasehold improvements and\/or
\ninstallation of additional leasehold improvements (regardless of how the same is
\nfunded, including reduction of rent, a direct payment or allowance to a new
\ntenant, or otherwise), (iii) broker’s fees allocable to the remainder of the
\nterm of this Lease, advertising costs and other expenses of reletting the Leased
\nPremises; (iv) costs of carrying and maintaining the Leased Premises, such as
\ntaxes, insurance premiums, utility charges and security precautions, (v)
\nexpenses incurred in removing, disposing of and\/or storing any of Tenant’s
\npersonal property, inventory or trade fixtures remaining therein; (vi)
\nreasonable attorney’s fees, expert witness fees, court costs and other
\nreasonable expenses incurred by Landlord (but not limited to taxable costs) in
\nretaking possession of the Leased Premises, establishing damages hereunder, and
\nreleasing the Leased Premises; and (vii) any other expenses, costs or damages
\notherwise incurred or suffered as a result of Tenant’s default.<\/p>\n
12.3 LANDLORD’S DEFAULT AND TENANT’S REMEDIES. In the event Landlord fails to
\nperform its obligations under this Lease, Landlord shall nevertheless not be in
\ndefault under the terms of this Lease until such time as Tenant shall have first
\ngiven Landlord written notice specifying the nature of such failure to perform
\nits obligations, and then only after Landlord shall have had thirty (30) days
\nfollowing its receipt of such notice within which to perform such obligations;
\nprovided that, if longer than thirty (30) days is reasonably required in order
\nto perform such obligations, Landlord shall have such longer period. In the
\nevent of Landlord’s default as above set forth, then, and only then, Tenant may
\nthen proceed in equity or at law to compel Landlord to perform its obligations
\nand\/or to recover damages proximately caused by such failure to perform (except
\nas and to the extent Tenant has waived its right to damages as provided in this
\nLease).<\/p>\n
12.4 LIMITATION OF TENANT’S RECOURSE. If Landlord is a corporation, trust,
\npartnership, joint venture, limited liability company, unincorporated
\nassociation, or other form of business entity, Tenant agrees that (i) the
\nobligations of Landlord under this Lease shall not constitute personal
\nobligations of the officers, directors, trustees, partners, joint venturers,
\nmembers, owners, stockholders, or other principals of such business entity, and
\n(ii) Tenant shall have recourse only to the property of such corporation, trust,
\npartnership, joint venture, limited liability company, unincorporated
\nassociation, or other form of business entity for the satisfaction of such
\nobligations and not against the assets of such officers, directors, trustees,
\npartners, joint venturers, members, owners, stockholders or principals.
\nAdditionally, if Landlord is a partnership or limited liability company, then
\nTenant covenants and agrees:<\/p>\n
(a) No partner or member of Landlord shall be sued or named as a party
\nin any suit or action brought by Tenant with respect to any alleged breach of
\nthis Lease (except to the extent necessary to secure jurisdiction over the
\npartnership and then only for that sole purpose);<\/p>\n
20
\n 22<\/p>\n
(b) No service of process shall be made against any partner or member of
\nLandlord except for the sole purpose of securing jurisdiction over the
\npartnership; and<\/p>\n
(c) No writ of execution will ever be levied against the assets of any
\npartner or member of Landlord other than to the extent of his or her interest in
\nthe assets of the partnership or limited liability company constituting
\nLandlord.<\/p>\n
Tenant further agrees that each of the foregoing covenants and agreements shall
\nbe enforceable by Landlord and by any partner or member of Landlord and shall be
\napplicable to any actual or alleged misrepresentation or nondisclosure made
\nregarding this Lease or the Leased Premises or any actual or alleged failure,
\ndefault or breach of any covenant or agreement either expressly or implicitly
\ncontained in this Lease or imposed by statute or at common law.<\/p>\n
12.5 TENANT’S WAIVER. Landlord and Tenant agree that the provisions of Paragraph
\n12.3 above are intended to supersede and replace the provisions of California
\nCivil Code Sections 1932(1), 1941 and 1942, and accordingly, Tenant hereby
\nwaives the provisions of California Civil Code Sections 1932(1), 1941 and 1942
\nand\/or any similar or successor law regarding Tenant’s right to terminate this
\nLease or to make repairs and deduct the expenses of such repairs from the rent
\ndue under this Lease.<\/p>\n
ARTICLE 13<\/p>\n
GENERAL PROVISIONS<\/p>\n
13.1 TAXES ON TENANT’S PROPERTY. Tenant shall pay before delinquency any and all
\ntaxes, assessments, license fees, use fees, permit fees and public charges of
\nwhatever nature or description levied, assessed or imposed against Tenant or
\nLandlord by a governmental agency arising out of, caused by reason of or based
\nupon Tenant’s estate in this Lease, Tenant’s ownership of property, improvements
\nmade by Tenant to the Leased Premises or the Outside Areas, improvements made by
\nLandlord for Tenant’s use within the Leased Premises or the Outside Areas,
\nTenant’s use (or estimated use) of public facilities or services or Tenant’s
\nconsumption (or estimated consumption) of public utilities, energy, water or
\nother resources (collectively, “Tenant’s Interest”). Upon demand by Landlord,
\nTenant shall furnish Landlord with satisfactory evidence of these payments. If
\nany such taxes, assessments, fees or public charges are levied against Landlord,
\nLandlord’s property, the Building or the Property, or if the assessed value of
\nthe Building or the Property is increased by the inclusion therein of a value
\nplaced upon Tenant’s Interest, regardless of the validity thereof, Landlord
\nshall have the right to require Tenant to pay such taxes, and if not paid and
\nsatisfactory evidence of payment delivered to Landlord at least ten days prior
\nto delinquency, then Landlord shall have the right to pay such taxes on Tenant’s
\nbehalf and to invoice Tenant for the same. Tenant shall, within the earlier to
\noccur of (a) thirty (30) days of the date it receives an invoice from Landlord
\nsetting forth the amount of such taxes, assessments, fees, or public charge so
\nlevied, or (b) the due date of such invoice, pay to Landlord, as Additional
\nRent, the amount set forth in such invoice. Failure by Tenant to pay the amount
\nso invoiced within such time period shall be conclusively deemed a default by
\nTenant under this Lease. Tenant shall have the right to bring suit in any court
\nof competent jurisdiction to recover from the taxing authority the amount of any
\nsuch taxes, assessments, fees or public charges so paid.<\/p>\n
13.2 HOLDING OVER. This Lease shall terminate without further notice on the
\nLease Expiration Date (as set forth in Article 1). Any holding over by Tenant
\nafter expiration of the Lease Term shall neither constitute a renewal nor
\nextension of this Lease nor give Tenant any rights in or to the Leased Premises
\nexcept as expressly provided in this Paragraph. Any such holding over to which
\nLandlord has consented shall be construed to be a tenancy from month to month,
\non the same terms and conditions herein specified insofar as applicable, except
\nthat the Base Monthly Rent shall be increased to an amount equal to one hundred
\nfifty percent (150%) of the Base Monthly Rent payable during the last full month
\nimmediately preceding such holding over. Tenant acknowledges that if Tenant
\nholds over without Landlord’s consent, such holding over may compromise or
\notherwise affect Landlord’s ability to enter into new leases with prospective
\ntenants regarding the Leased Premises. Therefore, if Tenant fails to surrender
\nthe Leased Premises upon the expiration or termination of this Lease, in
\naddition to any other liabilities to Landlord accruing therefrom, Tenant shall
\nprotect, defend, indemnify and hold Landlord harmless from and against all
\nclaims resulting from such failure, including, without limiting the foregoing,
\nany claims made by any succeeding tenant founded upon such failure to surrender,
\nand any losses suffered by Landlord, including lost profits, resulting from such
\nfailure to surrender.<\/p>\n
13.3 SUBORDINATION TO MORTGAGES. This Lease is subject to and subordinate to all
\nground leases, mortgages and deeds of trust which affect the Building or the
\nProperty and which are of public record as of the Effective Date of this Lease,
\nand to all renewals, modifications, consolidations, replacements and extensions
\nthereof. However, if the lessor under any such ground lease or any lender
\nholding any such mortgage or deed of trust shall advise Landlord that it desires
\nor requires this Lease to be made prior and superior thereto, then, upon written
\nrequest of Landlord to Tenant, Tenant shall promptly execute, acknowledge and
\ndeliver any and all customary or reasonable documents or instruments which
\nLandlord and such lessor or lender deems necessary or desirable to make this
\nLease prior thereto. Tenant hereby consents to Landlord’s ground leasing the
\nland underlying the Building or the Property and\/or encumbering the Building or
\nthe Property as security for future loans on such terms as Landlord shall
\ndesire, all of which future ground leases, mortgages or deeds of trust shall be
\nsubject to and subordinate to this Lease. However, if any lessor under any such
\nfuture ground lease or any lender holding such future mortgage or deed of trust
\nshall desire or require that this Lease be made subject to and subordinate to
\nsuch future ground lease, mortgage or deed of trust, then Tenant agrees, within
\nten (10) days after Landlord’s written request therefor, to execute, acknowledge
\nand deliver to Landlord any and all documents or instruments reasonably
\nrequested by Landlord or by such lessor or lender as may be necessary or proper
\nto assure the subordination of this Lease to such future ground lease, mortgage
\nor deed of trust, but only if such lessor or lender agrees to recognize Tenant’s
\nrights under this Lease and agrees not<\/p>\n
21
\n 23<\/p>\n
to disturb Tenant’s quiet possession of the Leased Premises so long as Tenant is
\nnot in default under this Lease. If Landlord assigns the Lease as security for a
\nloan, Tenant agrees to execute such documents as are reasonably requested by the
\nlender and to provide reasonable provisions in the Lease protecting such
\nlender’s security interest which are customarily required by institutional
\nlenders making loans secured by a deed of trust provided that such documents do
\nnot materially increase Tenant’s obligations under this Lease.<\/p>\n
13.4 TENANT’S ATTORNMENT UPON FORECLOSURE. Tenant shall, upon request, attorn
\n(i) to any purchaser of the Building or the Property at any foreclosure sale or
\nprivate sale conducted pursuant to any security instruments encumbering the
\nBuilding or the Property, (ii) to any grantee or transferee designated in any
\ndeed given in lieu of foreclosure of any security interest encumbering the
\nBuilding or the Property, or (iii) to the lessor under an underlying ground
\nlease of the land underlying the Building or the Property, should such ground
\nlease be terminated; provided that such purchaser, grantee or lessor recognizes
\nTenant’s rights under this Lease.<\/p>\n
13.5 MORTGAGEE PROTECTION. In the event of any default on the part of Landlord,
\nTenant will give notice by registered mail to any Lender or lessor under any
\nunderlying ground lease who shall have requested, in writing, to Tenant that it
\nbe provided with such notice, and Tenant shall offer such Lender or lessor a
\nreasonable opportunity to cure the default, including time to obtain possession
\nof the Leased Premises by power of sale or judicial foreclosure or other
\nappropriate legal proceedings if reasonably necessary to effect a cure.<\/p>\n
13.6 ESTOPPEL CERTIFICATE. Tenant will, following any request by Landlord,
\npromptly execute and deliver to Landlord an estoppel certificate substantially
\nin form attached as Exhibit B, (i) certifying that this Lease is unmodified and
\nin full force and effect, or, if modified, stating the nature of such
\nmodification and certifying that this Lease, as so modified, is in full force
\nand effect, (ii) stating the date to which the rent and other charges are paid
\nin advance, if any, (iii) acknowledging that there are not, to Tenant’s
\nknowledge, any uncured defaults on the part of Landlord hereunder, or specifying
\nsuch defaults if any are claimed, and (iv) certifying such other information
\nabout this Lease as may be reasonably requested by Landlord, its Lender or
\nprospective lenders, investors or purchasers of the Building or the Property.
\nTenant’s failure to execute and deliver such estoppel certificate within ten
\ndays after Landlord’s request therefor shall be a material default by Tenant
\nunder this Lease, and Landlord shall have all of the rights and remedies
\navailable to Landlord as Landlord would otherwise have in the case of any other
\nmaterial default by Tenant, including the right to terminate this Lease and sue
\nfor damages proximately caused thereby, it being agreed and understood by Tenant
\nthat Tenant’s failure to so deliver such estoppel certificate in a timely manner
\ncould result in Landlord being unable to perform committed obligations to other
\nthird parties which were made by Landlord in reliance upon this covenant of
\nTenant. Landlord and Tenant intend that any statement delivered pursuant to this
\nparagraph may be relied upon by any Lender or purchaser or prospective Lender or
\npurchaser of the Building, the Property, or any interest in them.<\/p>\n
13.7 TENANT’S FINANCIAL INFORMATION. Tenant shall, within ten business days
\nafter Landlord’s request therefor, deliver to Landlord a copy of Tenant’s (and
\nany guarantor’s) current financial statements (including a balance sheet, income
\nstatement and statement of cash flow, all prepared in accordance with generally
\naccepted accounting principles) and any such other information reasonably
\nrequested by Landlord regarding Tenant’s financial condition. Landlord shall be
\nentitled to disclose such financial statements or other information to its
\nLender, to any present or prospective principal of or investor in Landlord, or
\nto any prospective Lender or purchaser of the Building, the Property, or any
\nportion thereof or interest therein. Any such financial statement or other
\ninformation which is marked “confidential” or “company secrets” (or is otherwise
\nsimilarly marked by Tenant) shall be confidential and shall not be disclosed by
\nLandlord to any third party except as specifically provided in this paragraph
\nand then only if the person to whom disclosure is made first agrees to be bound
\nby the requirements of this Section 13.7, unless the same becomes a part of the
\npublic domain without the fault of Landlord.<\/p>\n
13.8 TRANSFER BY LANDLORD. Landlord and its successors in interest shall have
\nthe right to transfer their interest in the Building, the Property, or any
\nportion thereof at any time and to any person or entity. In the event of any
\nsuch transfer, the Landlord originally named herein (and in the case of any
\nsubsequent transfer, the transferor), from the date of such transfer, (i) shall
\nbe automatically relieved, without any further act by any person or entity, of
\nall liability for the performance of the obligations of the Landlord hereunder
\nwhich may accrue after the date of such transfer so long as the Security Deposit
\n(or the remaining amount of such Security Deposit after deductions made in
\naccordance with Section 3.7 of this Lease) is transferred to the transferee (or
\nreturned to the Tenant) and the transferee has agreed to assume and perform all
\nsuch obligations which may accrue after the date of such transfer and (ii) shall
\nbe relieved of all liability for the performance of the obligations of the
\nLandlord hereunder which have accrued before the date of transfer if its
\ntransferee agrees to assume and perform all such prior obligations of the
\nLandlord hereunder. Tenant shall attorn to any such transferee. After the date
\nof any such transfer, the term “Landlord” as used herein shall mean the
\ntransferee of such interest in the Building or the Property.<\/p>\n
13.9 FORCE MAJEURE. The obligations of each of the parties under this Lease
\n(other than the obligations to pay money) shall be temporarily excused if such
\nparty is prevented or delayed in performing such obligations by reason of any
\nstrikes, lockouts or labor disputes; government restrictions, regulations,
\ncontrols, action or inaction; civil commotion; or extraordinary weather, fire or
\nother acts of God.<\/p>\n
13.10 NOTICES. Any notice required or permitted to be given under this Lease
\nshall be in writing and (i) personally delivered, (ii) sent by United States
\nmail, registered or certified mail, postage prepaid, return receipt requested,
\n(iii) sent by Federal Express or similar nationally recognized overnight courier
\nservice, or (iv) transmitted by facsimile with a hard copy sent within one (1)
\nbusiness day by any of the foregoing means, and in all cases addressed as
\nfollows, and such notice shall be deemed to have been given upon the date of
\nactual receipt or delivery (or refusal to accept delivery) at the address
\nspecified below (or such other addresses as may be specified by notice in the
\nforegoing manner) as indicated on the return receipt or air bill:<\/p>\n
22
\n 24<\/p>\n
IF TO LANDLORD: Mathilda Associates LLC
\n c\/o Menlo Equities LLC
\n 525 University Avenue
\n Suite 100
\n Palo Alto, California 94301
\n Attention: Henry Bullock\/Richard Holmstrom<\/p>\n
with a copy to Beacon Capital Partners Inc.
\n One Federal Street, 26th Floor
\n Boston, Massachusetts 02110
\n Attention: General Counsel<\/p>\n
and to: Cooley Godward LLP
\n One Maritime Plaza
\n 20th Floor
\n San Francisco, California 94111
\n Attention: Paul Churchill<\/p>\n
IF TO TENANT: Prior to May 1, 2000:<\/p>\n
Juniper Networks, Inc.
\n 385 Ravendale Drive
\n Mountain View, California 94043<\/p>\n
After May 1, 2000:<\/p>\n
1194 Mathilda Avenue
\n Sunnyvale, California 94089
\n Attention: General Counsel<\/p>\n
with a copy to: Wilson Sonsini Goodrich & Rosati
\n 650 Page Mill Road
\n Palo Alto, California 94304
\n Attention: Bradford C. O’Brien<\/p>\n
Any notice given in accordance with the foregoing shall be deemed received upon
\nactual receipt or refusal to accept delivery.<\/p>\n
13.11 ATTORNEYS’ FEES. In the event any party shall bring any action,
\narbitration proceeding or legal proceeding alleging a breach of any provision of
\nthis Lease, to recover rent, to terminate this Lease, or to enforce, protect,
\ndetermine or establish any term or covenant of this Lease or rights or duties
\nhereunder of either party, the prevailing party shall be entitled to recover
\nfrom the non-prevailing party as a part of such action or proceeding, or in a
\nseparate action for that purpose brought within one year from the determination
\nof such proceeding, reasonable attorneys’ fees, expert witness fees, court costs
\nand other reasonable expenses incurred by the prevailing party.<\/p>\n
13.12 DEFINITIONS. Any term that is given a special meaning by any provision in
\nthis Lease shall, unless otherwise specifically stated, have such meaning
\nwherever used in this Lease or in any Addenda or amendment hereto. In addition
\nto the terms defined in Article 1, the following terms shall have the following
\nmeanings:<\/p>\n
(a) REAL PROPERTY TAXES. The term “Real Property Tax” or “Real Property
\nTaxes” shall each mean the sum of Tenant’s Property Share (as to the land
\ncomponent of the Property) and Tenant’s Expense Share (as to the Building and
\nother improvements in the Outside Areas) of (i) all taxes, assessments, levies
\nand other charges of any kind or nature whatsoever, general and special,
\nforeseen and unforeseen (including all instruments of principal and interest
\nrequired to pay any general or special assessments for public improvements and
\nany increases resulting from reassessments caused by any change in ownership or
\nnew construction), now or hereafter imposed by any governmental or
\nquasi-governmental authority or special district having the direct or indirect
\npower to tax or levy assessments, which are levied or assessed for whatever
\nreason against the Property or any portion thereof, or Landlord’s interest
\nherein, or the fixtures, equipment and other property of Landlord that is an
\nintegral part of the Property and located thereon, or Landlord’s business of
\nowning, leasing or managing the Property or the gross receipts, income or
\nrentals from the Property, (ii) all charges, levies or fees imposed by any
\ngovernmental authority against Landlord by reason of or based upon the use of or
\nnumber of parking spaces within the Property, the amount of public services or
\npublic utilities used or consumed (e.g. water, gas, electricity, sewage or waste
\nwater disposal) at the Property, the number of person employed by tenants of the
\nProperty, the size (whether measured in area, volume, number of tenants or
\nwhatever) or the value of the Property, or the type of use or uses conducted
\nwithin the Property, and all costs and fees (including attorneys’ fees)
\nreasonably incurred by Landlord in contesting any Real Property Tax and in
\nnegotiating with public authorities as to any Real Property Tax. If, at any time
\nduring the Lease Term, the taxation or assessment of the Property prevailing as
\nof the Effective Date of this Lease shall be altered so that in lieu of or in
\naddition to any the Real Property Tax described above there shall be levied,
\nawarded or imposed (whether by reason of a change in the method of taxation or
\nassessment, creation of a new tax or charge, or any other cause) an alternate,
\nsubstitute, or additional use or charge (i) on the value, size, use or occupancy
\nof the Property or Landlord’s interest therein or (ii) on or measured by the
\ngross receipts, income or rentals from the Property, or on Landlord’s business
\nof owning, leasing or managing the Property or (iii) computed in any manner with
\nrespect to the operation of the Property, then any such tax or charge, however
\ndesignated, shall be included within the meaning of the terms “Real Property
\nTax” or “Real Property Taxes” for purposes of this Lease. If any<\/p>\n
23
\n 25<\/p>\n
Real Property Tax is partly based upon property or rents unrelated to the
\nProperty, then only that part of such Real Property Tax that is fairly allocable
\nto the Property shall be included within the meaning of the terms “Real Property
\nTax” or “Real Property Taxes.” Notwithstanding the foregoing, the terms “Real
\nProperty Tax” or “Real Property Taxes” shall not include estate, inheritance,
\ntransfer, gift or franchise taxes of Landlord or the federal or state income tax
\nimposed on Landlord’s income from all sources.<\/p>\n
(b) LANDLORD’S INSURANCE COSTS. The term “Landlord’s Insurance Costs”
\nshall mean Tenant’s Expense Share of the costs to Landlord to carry and maintain
\nthe policies of fire and property damage insurance for the Building and Tenant’s
\nProperty Share of the costs to Landlord to carry and maintain the policies of
\nfire and property damage insurance on the Property and general liability and any
\nother insurance required or permitted to be carried by Landlord pursuant to
\nArticle 9, together with any deductible amounts paid by Landlord upon the
\noccurrence of any insured casualty or loss. Any deductible amount in excess of
\ntwenty five (25%) of the total casualty shall be amortized over the useful life
\nof the repair or replacement required to restore the Property after such
\ncasualty, and the amortized portion shall be included on a monthly basis in
\nLandlord’s Insurance Costs. Notwithstanding the foregoing, Landlord’s Insurance
\nCosts shall not include the cost of any course of construction insurance carried
\nby Landlord for the construction of the 1184 Building. Notwithstanding the
\nforegoing, if Tenant terminates this Lease pursuant to Section 10.4 hereof,
\nTenant shall not be required to pay for any insurance deductibles as part of
\nLandlord’s Insurance Costs or otherwise.<\/p>\n
(c) PROPERTY MAINTENANCE COSTS. The term “Property Maintenance Costs”
\nshall mean Tenant’s Property Share of all costs and expenses (except Landlord’s
\nInsurance Costs and Real Property Taxes) paid or incurred by Landlord in
\nprotecting, operating, maintaining, repairing and preserving the Property and
\nall parts thereof, including without limitation, (i) market rate professional
\nmanagement fees of no more than two percent (2%) of Base Monthly Rent, (ii) the
\namortizing portion of any costs incurred by Landlord in the making of any
\nmodifications, alterations or improvements required by any governmental
\nauthority as set forth in Article 6, which are so amortized during the Lease
\nTerm, (iii) any and all on-going operation or maintenance costs imposed on the
\nProperty by or through any development agreement, use permit, site development
\nagreement, traffic mitigation plan, entitlement, or Private Restrictions
\n(including but not limited to shuttle and emergency transportation), and (iv)
\nsuch other costs as may be paid or incurred with respect to operating,
\nmaintaining, and preserving the Property, repairing and resurfacing paved areas,
\nand repairing and replacing, when necessary, electrical, plumbing, heating,
\nventilating and air conditioning systems serving the Building, provided that the
\ncost of any capital improvement shall be amortized over the useful life of such
\nimprovement and the amortizing portion of the cost shall be included in Property
\nMaintenance Costs. If any costs and expenses are partly based upon property or
\nrents unrelated to the Property, then only that part of such Property
\nMaintenance Costs that is fairly allocable to the Property shall be included
\nwithin the meaning of the terms “Property Maintenance Costs.” Notwithstanding
\nthe foregoing provisions of this Section 13.12(c), the following are
\nspecifically excluded from the definition of Property Maintenance Costs and
\nTenant shall have no obligation to pay directly or reimburse Landlord for all or
\nany portion of the following except to the extent any of the foregoing are
\ncaused by the actions or inactions of Tenant, or result from the failure of
\nTenant to comply with the terms of the Lease: (a) costs of development or
\nconstruction on the Property (other than on-going operation or maintenance costs
\nas set forth in (iii) above); (b) the costs to repair or replace the structural
\nportions of the Building or other buildings on the Property, including, without
\nlimitation, the foundation, footings, roof structure, roof screens, roof screen
\npenetrations, and load bearing and exterior walls of the Building or any other
\nbuilding located on the Property; (c) depreciation, amortization or other
\nexpense reserves; (d) interest, charges and fees incurred on debt, payments on
\nmortgages and rent under ground leases; (e) costs and expenses for which Tenant
\nreimburses Landlord directly or which Tenant pays directly to a third person or
\ncosts for which Landlord has a right of reimbursement from others; (f) costs
\noccasioned by the active negligence or willful misconduct of Landlord or any
\nother occupant of the Property or violations of Law by Landlord or any other
\noccupant of the Property, (g) or costs to correct any construction defect in the
\nLeased Premises, the Building or the Property; or (h) capital costs incurred to
\nbring the Building or the Property into compliance with the Use Permit, any
\nCC&R’s, underwriter’s requirements, or Laws applicable to the Leased Premises,
\nthe Building or the Property at the time the building permit for the Base
\nBuilding (as defined in the Work Letter) is issued.<\/p>\n
(d) PROPERTY OPERATING EXPENSES. The term “Property Operating Expenses”
\nshall mean and include all Real Property Taxes, plus all Landlord’s Insurance
\nCosts, plus all Property Maintenance Costs.<\/p>\n
(e) LAW. The term “Law” shall mean any judicial decisions and any
\nstatute, constitution, ordinance, resolution, regulation, rule, administrative
\norder, or other requirements of any municipal, county, state, federal, or other
\ngovernmental agency or authority having jurisdiction over the parties to this
\nLease, the Leased Premises, the Building or the Property, or any of them, in
\neffect either at the Effective Date of this Lease or at any time during the
\nLease Term, including, without limitation, any regulation, order, or policy of
\nany quasi-official entity or body (e.g. a board of fire examiners or a public
\nutility or special district).<\/p>\n
(f) LENDER. The term “Lender” shall mean the holder of any promissory
\nnote or other evidence of indebtedness secured by the Property or any portion
\nthereof.<\/p>\n
(g) PRIVATE RESTRICTIONS. The term “Private Restrictions” shall mean (as
\nthey may exist from time to time) any and all covenants, conditions and
\nrestrictions, private agreements, easements, and any other recorded documents or
\ninstruments affecting the use of the Property, the Building, the Leased
\nPremises, or the Outside Areas.<\/p>\n
(h) RENT. The term “Rent” shall mean collectively Base Monthly Rent and
\nall Additional Rent.<\/p>\n
13.13 GENERAL WAIVERS. One party’s consent to or approval of any act by the
\nother party requiring the first party’s consent or approval shall not be deemed
\nto waive or render unnecessary the first party’s consent to or approval of any
\nsubsequent similar act by the other party. No waiver of any provision hereof, or
\nany waiver of any<\/p>\n
24
\n 26<\/p>\n
breach of any provision hereof, shall be effective unless in writing and signed
\nby the waiving party. The receipt by Landlord of any rent or payment with or
\nwithout knowledge of the breach of any other provision hereof shall not be
\ndeemed a waiver of any such breach. No waiver of any provision of this Lease
\nshall be deemed a continuing waiver unless such waiver specifically states so in
\nwriting and is signed by both Landlord and Tenant. No delay or omission in the
\nexercise of any right or remedy accruing to either party upon any breach by the
\nother party under this Lease shall impair such right or remedy or be construed
\nas a waiver of any such breach theretofore or thereafter occurring. The waiver
\nby either party of any breach of any provision of this Lease shall not be deemed
\nto be a waiver of any subsequent breach of the same or any other provisions
\nherein contained.<\/p>\n
13.14 MISCELLANEOUS. Should any provisions of this Lease prove to be invalid or
\nillegal, such invalidity or illegality shall in no way affect, impair or
\ninvalidate any other provisions hereof, and such remaining provisions shall
\nremain in full force and effect. Time is of the essence with respect to the
\nperformance of every provision of this Lease in which time of performance is a
\nfactor. Any copy of this Lease which is executed by the parties shall be deemed
\nan original for all purposes. This Lease shall, subject to the provisions
\nregarding assignment, apply to and bind the respective heirs, successors,
\nexecutors, administrators and assigns of Landlord and Tenant. The term “party”
\nshall mean Landlord or Tenant as the context implies. If Tenant consists of more
\nthan one person or entity, then all members of Tenant shall be jointly and
\nseverally liable hereunder. This Lease shall be construed and enforced in
\naccordance with the Laws of the State in which the Leased Premises are located.
\nThe captions in this Lease are for convenience only and shall not be construed
\nin the construction or interpretation of any provision hereof. When the context
\nof this Lease requires, the neuter gender includes the masculine, the feminine,
\na partnership, corporation, limited liability company, joint venture, or other
\nform of business entity, and the singular includes the plural. The terms “must,”
\n“shall,” “will,” and “agree” are mandatory. The term “may” is permissive. When a
\nparty is required to do something by this Lease, it shall do so at its sole cost
\nand expense without right of reimbursement from the other party unless specific
\nprovision is made therefor. Where Landlord’s consent is required hereunder, the
\nconsent of any Lender shall also be required. Landlord and Tenant shall both be
\ndeemed to have drafted this Lease, and the rule of construction that a document
\nis to be construed against the drafting party shall not be employed in the
\nconstruction or interpretation of this Lease. Where Tenant is obligated not to
\nperform any act or is not permitted to perform any act, Tenant is also obligated
\nto restrain any others reasonably within its control, including agents,
\ninvitees, contractors, subcontractors and employees, from performing such act.
\nLandlord shall not become or be deemed a partner or a joint venturer with Tenant
\nby reason of any of the provisions of this Lease.<\/p>\n
13.15 COOPERATION. Notwithstanding anything to the contrary contained herein,
\nTenant consents to and agrees to fully cooperate with Landlord and Landlord’s
\nagents, employees and contractors in Landlord’s efforts, if any, to improve the
\nProperty with an additional building and divide the Property into separate legal
\nparcels, which efforts may include, without limitation, the elimination of
\nlandscaping, the restriping or reconfiguration of the parking areas, application
\nfor building permits and other development approvals, parcelization of the
\nProperty and construction of buildings. Tenant agrees to execute such documents
\nand take such actions as reasonably necessary to assist Landlord with such
\nefforts and actions. Tenant agrees that such efforts and actions of Landlord
\nshall not constitute constructive eviction of Tenant from the Property or Leased
\nPremises. Following any parcelization of the Property, Landlord and Tenant agree
\nto amend this Lease to conform the descriptions of the Property, Site Plan, and
\nOutside Areas, and, subject to Section 4.5, the parking areas contained herein
\nto the parcelization and reconfiguration. Landlord agrees to minimize the
\ndisruption of Tenant’s use of the Leased Premises, the Building, the Outside
\nAreas and the Property to the extent reasonable, given Landlord’s efforts and
\nactions described herein. Specifically, during construction of the 1184
\nBuilding, Landlord shall cause all construction trucks to enter the Property
\nfrom the drive furthest from the Building on 5th Avenue and all grading on the
\nProperty for construction of the Building and the 1184 Building (other than
\ngrading for landscaping) shall be done at the same time.<\/p>\n
ARTICLE 14<\/p>\n
CORPORATE AUTHORITY
\n BROKERS AND ENTIRE AGREEMENT<\/p>\n
14.1 CORPORATE AUTHORITY. If Tenant is a corporation, each individual executing
\nthis Lease on behalf of such corporation represents and warrants that Tenant is
\nvalidly formed and duly authorized and existing, that Tenant is qualified to do
\nbusiness in the State in which the Leased Premises are located, that Tenant has
\nthe full right and legal authority to enter into this Lease, and that he or she
\nis duly authorized to execute and deliver this Lease on behalf of Tenant in
\naccordance with its terms. Tenant shall, within thirty days after execution of
\nthis Lease, deliver to Landlord a certified copy of the resolution of its board
\nof directors authorizing or ratifying the execution of this Lease and if Tenant
\nfails to do so, Landlord at its sole election may elect to terminate this Lease.<\/p>\n
14.2 BROKERAGE COMMISSIONS. Tenant represents, warrants and agrees that it has
\nnot had any dealings with any real estate broker(s), leasing agent(s), finder(s)
\nor salesmen, other than the Brokers (as named in Article 1) with respect to the
\nlease by it of the Leased Premises pursuant to this Lease, and that it will
\nassume all obligations and responsibility with respect to the payment of such
\nBrokers, and that it will indemnify, defend with competent counsel, and hold
\nLandlord harmless from any liability for the payment of any real estate
\nbrokerage commissions, leasing commissions or finder’s fees claimed by any other
\nreal estate broker(s), leasing agent(s), finder(s), or salesmen to be earned or
\ndue and payable by reason of Tenant’s agreement or promise (implied or
\notherwise) to pay (or to have Landlord pay) such a commission or finder’s fee by
\nreason of its leasing the Leased Premises pursuant to this Lease.<\/p>\n
14.3 ENTIRE AGREEMENT. This Lease and the Exhibits (as described in Article 1),
\nwhich Exhibits are by this reference incorporated herein, constitute the entire
\nagreement between the parties, and there are no other agreements, understandings
\nor representations between the parties relating to the lease by Landlord of the
\nLeased<\/p>\n
25
\n 27<\/p>\n
Premises to Tenant, except as expressed herein. No subsequent changes,
\nmodifications or additions to this Lease shall be binding upon the parties
\nunless in writing and signed by both Landlord and Tenant.<\/p>\n
14.4 LANDLORD’S REPRESENTATIONS. Tenant acknowledges that neither Landlord nor
\nany of its agents made any representations or warranties respecting the
\nProperty, the Building or the Leased Premises, upon which Tenant relied in
\nentering into the Lease, which are not expressly set forth in this Lease. Tenant
\nfurther acknowledges that neither Landlord nor any of its agents made any
\nrepresentations as to (i) whether the Leased Premises may be used for Tenant’s
\nintended use under existing Law, or (ii) the suitability of the Leased Premises
\nfor the conduct of Tenant’s business, or (iii) the exact square footage of the
\nLeased Premises, and that Tenant relies solely upon its own investigations with
\nrespect to such matters. Tenant expressly waives any and all claims for damage
\nby reason of any statement, representation, warranty, promise or other agreement
\nof Landlord or Landlord’s agent(s), if any, not contained in this Lease or in
\nany Exhibit attached hereto.<\/p>\n
ARTICLE 15<\/p>\n
OPTIONS TO EXTEND<\/p>\n
15.1 So long as Juniper Networks, Inc. (or a Permitted Assignee) is the Tenant
\nhereunder, and subject to the condition set forth in clause (b) below, Tenant
\nshall have two options to extend the term of this Lease with respect to the
\nentirety of the Leased Premises, the first for a period of five (5) years from
\nthe expiration of the last year of the Lease Term (the “First Extension
\nPeriod”), and the second (the “Second Extension Period”) for a period of five
\n(5) years from the expiration of the First Extension Period, subject to the
\nfollowing conditions:<\/p>\n
(a) Each option to extend shall be exercised, if at all, by notice of
\nexercise given to Landlord by Tenant not more than twelve (12) months nor less
\nthan nine (9) months prior to the expiration of the last year of the Lease Term
\nor the expiration of the First Extension Period, as applicable;<\/p>\n
(b) Anything herein to the contrary notwithstanding, if Tenant is in
\ndefault under any of the material terms, covenants or conditions of this Lease,
\neither at the time Tenant exercises either extension option or on the
\ncommencement date of the First Extension Period or the Second Extension Period,
\nas applicable, Landlord shall have, in addition to all of Landlord’s other
\nrights and remedies provided in this Lease, the right to terminate such
\noption(s) to extend upon notice to Tenant.<\/p>\n
15.2 In the event the applicable option is exercised in a timely fashion, the
\nLease shall be extended for the term of the applicable extension period upon all
\nof the terms and conditions of this Lease, provided that the Base Monthly Rent
\nfor each extension period shall be the “Fair Market Rent” for the Leased
\nPremises, determined as set forth below, with annual increases as determined as
\npart of the process set forth below.<\/p>\n
15.3 Within 30 days after receipt of Tenant’s notice of exercise, Landlord shall
\nnotify Tenant in writing of Landlord’s estimate of the Base Monthly Rent for the
\nfirst year of the applicable extension period, and Landlord’s estimate of annual
\nincreases. For purposes hereof, “Fair Market Rent” shall mean collectively, (1)
\nBase Monthly Rent for the first year of the applicable extension period and (2)
\nthe annual increases determined at the time Base Monthly Rent for the first year
\nis determined. Within 30 days after receipt of such notice from Landlord, Tenant
\nshall have the right either to (i) accept Landlord’s estimate of Fair Market
\nRent or (ii) elect to arbitrate Landlord’s estimate of Fair Market Rent, such
\narbitration to be conducted pursuant to the provisions hereof. Failure on the
\npart of Tenant to require arbitration of Fair Market Rent within such 30-day
\nperiod shall constitute acceptance of the Fair Market Rent for the applicable
\nextension period as calculated by Landlord. If Tenant elects arbitration, the
\narbitration shall be concluded within 90 days after the date of Tenant’s
\nelection, subject to extension for an additional 30-day period if a third
\narbitrator is required and does not act in a timely manner. To the extent that
\narbitration has not been completed prior to the expiration of any preceding
\nperiod for which Base Monthly Rent has been determined, Tenant shall pay Base
\nMonthly Rent at the rate calculated by Landlord, with the potential for an
\nadjustment to be made once Fair Market Rent is ultimately determined by
\narbitration.<\/p>\n
15.4 In the event of arbitration, the judgment or the award rendered in any such
\narbitration may be entered in any court having jurisdiction and shall be final
\nand binding between the parties. The arbitration shall be conducted and
\ndetermined in the City and County of San Francisco in accordance with the then
\nprevailing rules of the American Arbitration Association or its successor for
\narbitration of commercial disputes except to the extent that the procedures
\nmandated by such rules shall be modified as follows:<\/p>\n
(a) Tenant shall make demand for arbitration in writing within 30 days
\nafter service of Landlord’s determination of Fair Market Rent given under
\nParagraph 15.3 above, specifying therein the name and address of the person to
\nact as the arbitrator on its behalf. The arbitrator shall be qualified as a real
\nestate appraiser familiar with the Fair Market Rent of similar industrial,
\nresearch and development, or office space in the Silicon Valley area who would
\nqualify as an expert witness over objection to give opinion testimony addressed
\nto the issue in a court of competent jurisdiction. Failure on the part of Tenant
\nto make a proper demand in a timely manner for such arbitration shall constitute
\na waiver of the right thereto. Within 15 days after the service of the demand
\nfor arbitration, Landlord shall give notice to Tenant, specifying the name and
\naddress of the person designated by Landlord to act as arbitrator on its behalf
\nwho shall be similarly qualified. If Landlord fails to notify Tenant of the
\nappointment of its arbitrator, within or by the time above specified, then the
\narbitrator appointed by Tenant shall be the arbitrator to determine the issue.<\/p>\n
(b) In the event that two arbitrators are chosen pursuant to Paragraph
\n15.4(a) above, the arbitrators so chosen shall, within 15 days after the second
\narbitrator is appointed determine the Fair Market Rent. If the two arbitrators
\nshall be unable to agree upon a determination of Fair Market Rent within such
\n15-day period, they,<\/p>\n
26
\n 28<\/p>\n
themselves, shall appoint a third arbitrator, who shall be a competent and
\nimpartial person with qualifications similar to those required of the first two
\narbitrators pursuant to Paragraph 15.4(a). In the event they are unable to agree
\nupon such appointment within seven days after expiration of such 15-day period,
\nthe third arbitrator shall be selected by the parties themselves, if they can
\nagree thereon, within a further period of 15 days. If the parties do not so
\nagree, then either party, on behalf of both, may request appointment of such a
\nqualified person by the then Chief Judge of the United States District Court
\nhaving jurisdiction over the County of Santa Clara, acting in his private and
\nnot in his official capacity, and the other party shall not raise any question
\nas to such Judge’s full power and jurisdiction to entertain the application for
\nand make the appointment. The three arbitrators shall decide the dispute if it
\nhas not previously been resolved by following the procedure set forth below.<\/p>\n
(c) Where an issue cannot be resolved by agreement between the two
\narbitrators selected by Landlord and Tenant or settlement between the parties
\nduring the course of arbitration, the issue shall be resolved by the three
\narbitrators within 15 days of the appointment of the third arbitrator in
\naccordance with the following procedure. The arbitrator selected by each of the
\nparties shall state in writing his determination of the Fair Market Rent
\nsupported by the reasons therefor with counterpart copies to each party. The
\narbitrators shall arrange for a simultaneous exchange of such proposed
\nresolutions. The role of the third arbitrator shall be to select which of the
\ntwo proposed resolutions most closely approximates his determination of Fair
\nMarket Rent. The third arbitrator shall have no right to propose a middle ground
\nor any modification of either of the two proposed resolutions. The resolution he
\nchooses as most closely approximating his determination shall constitute the
\ndecision of the arbitrators and be final and binding upon the parties.<\/p>\n
(d) In the event of a failure, refusal or inability of any arbitrator to
\nact, his successor shall be appointed by him, but in the case of the third
\narbitrator, his successor shall be appointed in the same manner as provided for
\nappointment of the third arbitrator. The arbitrators shall decide the issue
\nwithin 15 days after the appointment of the third arbitrator. Any decision in
\nwhich the arbitrator appointed by Landlord and the arbitrator appointed by
\nTenant concur shall be binding and conclusive upon the parties. Each party shall
\npay the fee and expenses of its respective arbitrator and both shall share the
\nfee and expenses of the third arbitrator, if any, and the attorneys’ fees and
\nexpenses of counsel for the respective parties and of witnesses shall be paid by
\nthe respective party engaging such counsel or calling such witnesses.<\/p>\n
(e) The arbitrators shall have the right to consult experts and
\ncompetent authorities to obtain factual information or evidence pertaining to a
\ndetermination of Fair Market Rent, but any such consultation shall be made in
\nthe presence of both parties with full right on their part to cross-examine. The
\narbitrators shall render their decision and award in writing with counterpart
\ncopies to each party. The arbitrators shall have no power to modify the
\nprovisions of this Lease.<\/p>\n
ARTICLE 16<\/p>\n
TELEPHONE SERVICE<\/p>\n
Notwithstanding any other provision of this Lease to the contrary:<\/p>\n
(a) So long as the entirety of the Building is leased to Tenant:<\/p>\n
(i) Landlord shall have no responsibility for providing to
\nTenant any telephone equipment, including wiring, within the Leased Premises or
\nfor providing telephone service or connections from the utility to the Leased
\nPremises; and<\/p>\n
(ii) Landlord makes no warranty as to the quality, continuity or
\navailability of the telecommunications services in the Building, and Tenant
\nhereby waives any claim against Landlord for any actual or consequential damages
\n(including damages for loss of business) in the event Tenant’s
\ntelecommunications services in any way are interrupted, damaged or rendered less
\neffective, except to the extent caused by the grossly negligent or willful act
\nor omission by Landlord, its agents or employees. Tenant accepts the telephone
\nequipment (including, without limitation, the INC, as defined below) in its
\n“AS-IS” condition, and Tenant shall be solely responsible for contracting with a
\nreliable third party vendor to assume responsibility for the maintenance and
\nrepair thereof (which contract shall contain provisions requiring such vendor to
\ninspect the INC periodically (the frequency of such inspections to be determined
\nby such vendor based on its experience and professional judgment), and requiring
\nsuch vendor to meet local and federal requirements for telecommunications
\nmaterial and workmanship). Landlord shall not be liable to Tenant and Tenant
\nwaives all claims against Landlord whatsoever, whether for personal injury,
\nproperty damage, loss of use of the Leased Premises, or otherwise, due to the
\ninterruption or failure of telephone services to the Leased Premises. Tenant
\nhereby holds Landlord harmless and agrees to indemnify, protect and defend
\nLandlord from and against any liability for any damage, loss or expense due to
\nany failure or interruption of telephone service to the Leased Premises for any
\nreason. Tenant agrees to obtain loss of rental insurance adequate to cover any
\ndamage, loss or expense occasioned by the interruption of telephone service.<\/p>\n
(b) At such time as the entirety of the Building is no longer leased to
\nTenant, Landlord shall in its sole discretion have the right, by written notice
\nto Tenant, to elect to assume limited responsibility for INC, as provided below,
\nand upon such assumption of responsibility by Landlord, this subparagraph (b)
\nshall apply prospectively.<\/p>\n
(i) Landlord shall provide Tenant access to such quantity of
\npairs in the Building intra-building network cable (“INC”) as is determined to
\nbe available by Landlord in its reasonable discretion. Tenant’s access to the
\nINC shall be solely by arrangements made by Tenant, as Tenant may elect,
\ndirectly with Pacific Bell or Landlord (or such vendor as Landlord may
\ndesignate), and Tenant shall pay all reasonable charges as may be imposed in
\nconnection therewith. Pacific Bell’s charges shall be deemed to be reasonable.
\nSubject to the foregoing,<\/p>\n
27
\n 29<\/p>\n
Landlord shall have no responsibility for providing to Tenant any telephone
\nequipment, including wiring, within the Leased Premises or for providing
\ntelephone service or connections from the utility to the Leased Premises, except
\nas required by law.<\/p>\n
(ii) Tenant shall not alter, modify, add to or disturb any
\ntelephone wiring in the Leased Premises or elsewhere in the Building without the
\nLandlord’s prior written consent, which consent shall not be unreasonably
\nwithheld. Tenant shall be liable to Landlord for any damage to the telephone
\nwiring in the Building due to the act, negligent or otherwise, of Tenant or any
\nemployee, contractor or other agent of Tenant. Tenant shall have no access to
\nthe telephone closets within the Building, except in the manner and under
\nprocedures established by Landlord. Tenant shall promptly notify Landlord of any
\nactual or suspected failure of telephone service to the Leased Premises.<\/p>\n
(iii) All costs incurred by Landlord for the installation,
\nmaintenance, repair and replacement of telephone wiring in the Building shall be
\na Property Maintenance Cost.<\/p>\n
(iv) Landlord makes no warranty as to the quality, continuity or
\navailability of the telecommunications services in the Building, and Tenant
\nhereby waives any claim against Landlord for any actual or consequential damages
\n(including damages for loss of business) in the event Tenant’s
\ntelecommunications services in any way are interrupted, damaged or rendered less
\neffective, except to the extent caused by the grossly negligent or willful act
\nor omission by Landlord, its agents or employees. Tenant acknowledges that
\nLandlord meets its duty of care to Tenant with respect to the Building INC by
\ncontracting with a reliable third party vendor to assume responsibility for the
\nmaintenance and repair thereof (which contract shall contain provisions
\nrequiring such vendor to inspect the INC periodically (the frequency of such
\ninspections to be determined by such vendor based on its experience and
\nprofessional judgment), and requiring such vendor to meet local and federal
\nrequirements for telecommunications material and workmanship). Subject to the
\nforegoing, Landlord shall not be liable to Tenant and Tenant waives all claims
\nagainst Landlord whatsoever, whether for personal injury, property damage, loss
\nof use of the Leased Premises, or otherwise, due to the interruption or failure
\nof telephone services to the Leased Premises. Tenant hereby holds Landlord
\nharmless and agrees to indemnify, protect and defend Landlord from and against
\nany liability for any damage, loss or expense due to any failure or interruption
\nof telephone service to the Leased Premises for any reason. Tenant agrees to
\nobtain loss of rental insurance adequate to cover any damage, loss or expense
\noccasioned by the interruption of telephone service.<\/p>\n
28
\n 30<\/p>\n
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
\nthe respective dates below set forth with the intent to be legally bound thereby
\nas of the Effective Date of this Lease first above set forth.<\/p>\n
LANDLORD:<\/p>\n
MATHILDA ASSOCIATES LLC,
\n a California limited liability
\n company<\/p>\n
By: Menlo Equities LLC, a California
\n limited liability company, Manager<\/p>\n
Dated: By: Diamant Investments LLC,
\n —————————– a Delaware limited liability
\n company, Member<\/p>\n
By:
\n ———————————
\n Richard J. Holmstrom, Manager<\/p>\n
TENANT:<\/p>\n
JUNIPER NETWORKS, INC.,
\n a Delaware corporation<\/p>\n
Dated: By:
\n —————————– ———————————
\n Title:
\n ——————————<\/p>\n
Dated: By:
\n —————————– ———————————
\n Title:
\n ——————————<\/p>\n
29
\n 31<\/p>\n
EXHIBIT A<\/p>\n
SITE PLAN<\/p>\n
(To be attached)<\/p>\n
1
\n 32<\/p>\n
EXHIBIT B<\/p>\n
WORK LETTER<\/p>\n
THIS WORK LETTER, dated February ___, 2000, is entered into by and
\nbetween MATHILDA ASSOCIATES LLC (“Landlord”), and JUNIPER NETWORKS, INC., a
\nDelaware corporation (“Tenant”). On or about the date hereof, Landlord and
\nTenant entered into that certain Lease (the “Lease”) for certain premises (the
\n“Leased Premises”) commonly known as 1184 Mathilda Avenue, Sunnyvale,
\nCalifornia. This Work Letter sets forth the agreement of Landlord and Tenant
\nwith respect to the improvements to be constructed in the Leased Premises. All
\ndefined terms used herein shall have the meaning set forth in the Lease, unless
\notherwise defined in this Work Letter.<\/p>\n
1. CONSTRUCTION OF TENANT IMPROVEMENTS. Landlord shall, through a general
\ncontractor to be selected pursuant to Paragraph 4 of this Work Letter, furnish
\nand install within the Building, substantially in accordance with the Work
\nLetter, certain items of general construction as described herein (the “Tenant
\nImprovements”). The quantities, character and manner of installation of all of
\nthe Tenant Improvements shall be subject to the limitations imposed by any
\napplicable governmental regulations relating to conservation of energy and by
\napplicable building codes and regulations. In addition, Tenant agrees that the
\nTenant Improvements shall not require Landlord to perform work which would (i)
\nrequire changes to structural components of the Building or the exterior design
\nof the Building; (ii) be incompatible with the Base Building Plans (defined
\nbelow) or the use permit to be issued by the City of Sunnyvale (the “Use
\nPermit”); or (iii) delay the completion of the Tenant Improvements beyond the
\nIntended Delivery Date.<\/p>\n
2. BASE BUILDING PLANS. Robinson Mills + Williams (the “Architect”) has prepared
\nbuilding plans and specifications on behalf of Landlord described as Mathilda
\nResearch Centre “Reissues for Building Permit” plans dated September 23, 1999
\n(“Base Building Plans”) which have been approved by Tenant prior to the date
\nhereof. Landlord hereby agrees to construct the Base Building in accordance with
\nthe Base Building Plans and the cost thereof shall not be deducted from the
\nTenant Improvement Allowance.<\/p>\n
3. PREPARATION AND APPROVAL OF SPACE PLAN. Commencing on full execution of the
\nLease, Tenant shall make its representatives available to meet with the
\nArchitect in order to begin the programming process. The Tenant shall work with
\nthe Architect to complete the programming and preliminary design for Architect’s
\npreparation of space plans (the “Space Plans”). Such Space Plans shall be
\napproved by Tenant and submitted for Landlord’s review no later than June 1,
\n2000. Within five (5) business days after Landlord receives the Space Plans,
\nLandlord shall either approve or disapprove the Space Plans. In such event, the
\nArchitect shall make the minimum changes necessary in order to correct any
\ndesign problems identified by the Landlord and shall submit to Landlord and
\nTenant revised Space Plans, which Landlord and Tenant shall approve or
\ndisapprove within two (2) business days after receipt of the revised Space
\nPlans. This procedure shall be repeated until the Space Plans are finally
\napproved by Landlord and Tenant.<\/p>\n
4. SELECTION OF CONTRACTOR. Landlord’s contractor shall be the contractor
\nselected pursuant to a procedure whereby the Space Plans are submitted to three
\n(3) contractors (one of which shall be LE Wentz), selected by Landlord and
\napproved by Tenant, who are requested to each submit a proposal containing the
\ncontractor’s fee and general conditions for construction of the improvements
\ndesignated on the Space Plans. Landlord and Tenant shall jointly open and review
\nthe fees and general conditions and the qualifications of each contractor, and
\nshall select the contractor reasonably acceptable to both Landlord and Tenant
\n(“Contractor”). Landlord and Contractor shall enter into a construction contract
\n(the “Construction Contract”) consistent with the terms of the bid to construct
\nthe Tenant Improvements. The Construction Contract shall require that all
\nsubtrades be competitively bid with at least three (3) subcontractors. Tenant
\nshall have the right to propose subcontractors to be used by the Contractor.
\nSubcontracts shall be awarded to the lowest qualified bidder, unless otherwise
\nagreed by Landlord and Tenant.<\/p>\n
5. DESIGN DEVELOPMENT. As soon as possible after Landlord’s approval of the
\nSpace Plans, Tenant shall commence working with the Architect to determine
\nTenant’s design specifications and requirements, such that the Architect can
\nincorporate such specifications and requirements into plans (the “Design
\nDevelopment Plans”) no later than August 1, 2000. The Design Development Plans
\nshall include all specifications necessary for the design-build mechanical\/HVAC,
\nelectrical, plumbing, and telecom\/cabling subcontractors to complete working
\ndrawings.. Within five (5) business days Landlord receives the Design
\nDevelopment Plans, Landlord shall either approve or disapprove the Design
\nDevelopment Plans. In such event, the Architect shall make the minimum changes
\nnecessary in order to correct any design problems identified by the Landlord and
\nshall submit to Landlord and Tenant revised Design Development Plans, which
\nLandlord and Tenant shall approve or disapprove within two (2) business days
\nafter receipt of the revised Design Development Plans. This procedure shall be
\nrepeated until the Design Development Plans are finally approved by Landlord and
\nTenant.<\/p>\n
6. APPROVAL OF WORKING DRAWINGS.<\/p>\n
(a) After approval of the Design Development Plans and selection of the
\nContractor, the Architect shall prepare complete and coordinated architectural
\nplans and specifications required for the construction of the Tenant
\nImprovements in conformance with such Space Plans (the “Working Drawings”), and
\nto prepare drawings and specifications for Changes (as defined below), if any,
\nrequested or required pursuant to Paragraph 8 below.<\/p>\n
(b) Landlord shall submit the completed and coordinated Working Drawings
\nto Tenant for Tenant’s approval. Tenant will provide written approval of the
\nWorking Drawings within five (5) business days after such submission. If Tenant
\ndisapproves any part of the submission, the disapproval shall include written
\ninstructions<\/p>\n
1
\n 33<\/p>\n
adequate for the Architect to revise the Working Drawings. Such revisions shall
\nbe subject to Landlord’s approval, which shall not be unreasonably withheld.
\nTenant will finally approve the revised Working Drawings within five (5)
\nbusiness days after submission thereof to Tenant. If Tenant’s instructions
\nnecessitate (i) revisions to the Working Drawings (as originally submitted)
\nwhich do not conform with the Design Development Plans, or (ii) a change of
\nscope relative to the Space Plans, the costs incurred by Landlord as a result of
\nsuch instructions (including, without limitation, the cost of revising the
\nWorking Drawings) shall be promptly borne and paid by Tenant upon demand by
\nLandlord.<\/p>\n
(c) If Tenant fails to approve the Working Drawings within the
\napplicable periods set forth in subparagraph 5(b) above, then (A) Landlord shall
\nnot be obligated to commence construction of the Tenant Improvements, (B) Tenant
\nshall be responsible for any resulting delay, and the cost of such delay, in
\nLandlord’s completion of the Tenant Improvements and delivery of the Leased
\nPremises, and (C) any such delay shall be deemed a Tenant Delay (as defined
\nbelow).<\/p>\n
7. COST OF TENANT IMPROVEMENTS. Unless specified otherwise herein, Landlord
\nshall bear and pay the cost of the Tenant Improvements (which cost shall
\ninclude, without limitation, the costs of construction, the cost of permits and
\npermit expediting, and all architectural and engineering services obtained by
\nLandlord in connection with the Tenant Improvements, the Contractor’s fees,
\nLandlord’s fee for construction administration in an amount equal to the amount
\ncharged by any construction manager retained by Landlord (the “Construction
\nManager”) up to a maximum of $6,121,750 (the “Tenant Improvement Allowance”).
\nThe Tenant Improvement Allowance shall be utilized only for building
\nimprovements to the Building (and Tenant’s architect fees), and not for signage,
\nfurniture costs, any third party consulting or contracting fees, any
\ntelecom\/cabling costs, or any other purpose. Tenant shall bear and pay the cost
\nof the Tenant Improvements (including but not limited to all of the foregoing
\nfees and costs) in excess of the Tenant Improvement Allowance, if any. The cost
\nof the Tenant Improvements shall exclude the cost of furniture, fixtures and
\ninventory and other items of Tenant’s Work (as defined below). Notwithstanding
\nthe foregoing, the Tenant Improvement Allowance shall not be used for (and
\nTenant shall have no responsibility for) the following costs except to the
\nextent any of the foregoing are caused by Tenant, are due to Tenant Delays or
\nresult from the failure of Tenant to comply with the terms of the Lease or this
\nWork Letter: (1) Property Maintenance Costs prior to the Delivery Date; (2)
\ncharges for overtime, except to the extent approved by Tenant; (3) costs to
\ncorrect construction defects; (4) costs incurred to enforce contracts or cure
\ncontractor or subcontractor defaults (including legal fees); or (5) principal or
\ninterest on construction loan obtained by Landlord for construction of the
\nTenant Improvements.<\/p>\n
8. CHANGES.<\/p>\n
(a) Any request by Tenant for a change in the Tenant Improvements after
\napproval of the Final Plans (a “Change”) shall be accompanied by all information
\nnecessary to clearly identify and explain the proposed Change. As soon as
\npracticable after receipt of such an Estimate Request form, Landlord shall
\nnotify Tenant of the estimated cost of such Change as well as the estimated
\nincrease in construction time caused by the Change, if any. Tenant shall approve
\nin writing such estimates within two (2) business days after receipt of
\nLandlord’s notice. Upon receipt of such written request, Landlord shall be
\nauthorized to cause the Contractor to proceed with the implementation of the
\nrequested Change.<\/p>\n
(b) The increased cost and time, as determined by Landlord, of all
\nChanges, including the cost of architectural and engineering services required
\nto revise the Working Drawings to reflect such Changes, the Contractor’s
\noverhead and fee, and Landlord’s fee for construction administration services,
\nshall be treated as costs of the Tenant Improvements, and shall be as determined
\nby Landlord upon completion of the Tenant Improvements, subject only to
\nLandlord’s furnishing to Tenant appropriate back-up information from the
\nContractor concerning the increased costs and increased construction time.<\/p>\n
9. TENANT’S WORK. Landlord and Tenant acknowledge and agree that certain work
\nrequired for Tenant’s occupancy of the Leased Premises, including but not
\nlimited to the procurement and installation of furniture, fixtures, equipment,
\nartwork and interior signage are beyond the scope of the Tenant Improvements and
\nshall be performed by Tenant or its contractors at Tenant’s sole cost and
\nexpense. All such work (“Tenant’s Work”) shall be subject to Landlord’s prior
\nwritten approval. Tenant shall adopt a construction schedule for Tenant’s Work
\nin conformance with the Contractor’s schedule, and shall perform Tenant’s Work
\nin such a way as not to hinder or delay the operations of Landlord or the
\nContractor in the Building. Any costs incurred by Landlord as a result of any
\ninterference with Landlord’s operations by Tenant or its contractors shall be
\npromptly paid by Tenant to Landlord upon demand. Landlord shall make all
\nreasonable efforts to notify Tenant of any such interference of which Landlord
\nhas actual knowledge, but failure to provide such notice shall in no way limit
\nLandlord’s right to demand payment for such costs. Tenant’s contractors shall be
\nsubject to Landlord’s prior written approval, and to the administrative
\nsupervision of the Contractor. Tenant’s Work shall comply with all of the
\nfollowing requirements:<\/p>\n
(a) Tenant’s Work shall not proceed until Landlord has approved in
\nwriting: (i) Tenant’s contractors, (ii) proof of the amount and coverage of
\npublic liability and property damage insurance carried by Tenant’s contractors
\nin the form of an endorsed insurance certificate naming Landlord, the
\nContractor, and the agents of Landlord and the Contractor as additional
\ninsureds, in an amount not less than two million dollars, and (iii) complete and
\ndetailed plans and specifications for Tenant’s Work.<\/p>\n
(b) Tenant’s Work shall be performed in conformity with a valid permit
\nwhen required, a copy of which shall be furnished to Landlord before such work
\nis commenced. In any event, all Tenant’s Work shall comply with all applicable
\nlaws, codes and ordinances of any governmental entity having jurisdiction over
\nthe Building.<\/p>\n
2
\n 34<\/p>\n
Landlord shall have no responsibility for Tenant’s failure to comply with such
\napplicable laws. Any and all delay in obtaining a certificate of occupancy due
\nto Tenant’s vendors is the responsibility of Tenant and shall be a Tenant Delay.<\/p>\n
(c) In connection with Tenant’s Work (e.g., delivering or installing
\nfurniture or equipment to the second floor of the Leased Premises), Tenant or
\nits contractors shall arrange for any necessary hoisting or elevator service
\nwith Landlord and shall pay such reasonable costs for such services as may be
\ncharged by Landlord.<\/p>\n
(d) Tenant shall promptly pay Landlord upon demand for any extra expense
\nincurred by Landlord by reason of faulty work done by Tenant or its contractors,
\nby reason of damage to existing work caused by Tenant or its contractors, or by
\nreason of inadequate cleanup by Tenant or its contractors.<\/p>\n
10. COMPLETION; TENANT DELAY.<\/p>\n
(a) As used herein, the term “Substantial Completion of the Tenant
\nImprovements” shall be deemed to mean the date when all of the following shall
\nhave occurred: (i) Landlord shall have delivered to Tenant a certificate of
\noccupancy issued by the City of Sunnyvale for the Leased Premises, or Tenant may
\nlegally occupy the Leased Premises for the operation of its business without
\nviolating any law or regulation or voiding or adversely affecting its insurance
\ncoverage, whether pursuant to a temporary certificate of occupancy or otherwise;
\nand (ii) Landlord shall have substantially completed construction of the Base
\nBuilding substantially in accordance with the Base Building Plans and all Tenant
\nImprovements substantially in accordance with the Final Plans, subject only to
\nthe completion of reasonable punch list items, which, in the absence of manifest
\nerror, shall be established by a certificate executed by Landlord’s architect
\ncertifying that such state of completion has been achieved. Without limiting the
\ngenerality of the foregoing, “Substantial Completion of the Tenant Improvements”
\nshall not be deemed to have been achieved unless and until (i) the building
\nsystems, including roof, plumbing, HVAC, sprinkler, electrical (including panels
\nand outlets), doors (both personnel and shipping), lighting, ceiling tiles, and
\nwindow coverings are in good working order, (ii) the interior and exterior of
\nthe Building are in compliance with all applicable Laws, (iii) all debris and
\nclutter has been removed from the Leased Premises and final cleanup completed,
\n(iv) exterior windows are washed inside and out, and (v) parking lot and
\nlandscaping are in good condition and free of debris, clutter and all
\nconstruction equipment. After substantial completion of the Tenant Improvements
\nand delivery of the Leased Premises to Tenant, Landlord and Tenant shall execute
\na Lease Commencement Date Certificate in the form attached as Exhibit “C” to the
\nLease.<\/p>\n
(b) If Landlord shall be delayed in substantially completing the Tenant
\nImprovements as a result of:<\/p>\n
(i) Tenant’s failure to furnish the information, instructions
\nand plans required in paragraph 3 or approve the Working Drawings, within the
\napplicable time periods specified in paragraph 5; or<\/p>\n
(ii) Any changes in the scope of the Tenant Improvements from
\nthat set forth in the Space Plans, or any Changes to the Final Plans requested
\nby Tenant after approval thereof pursuant to paragraph 7; or<\/p>\n
(iii) Any interruption or interference in Landlord’s
\nconstruction of the Tenant Improvements caused by Tenant, its contractors or its
\nvendors; or<\/p>\n
(iv) Tenant’s failure to timely pay any amounts which Tenant is
\nobligated to pay under this Work Letter; or<\/p>\n
(v) Any other act, neglect, failure or omission of Tenant, its
\nagents, employees or contractors (items (i) through (v) above being collectively
\nreferred to as “Tenant Delays”);<\/p>\n
then the date upon which the payment of rental under the Lease, shall commence
\nshall be advanced by the cumulative duration of such Tenant Delays.<\/p>\n
11. CONSTRUCTION WARRANTY. Landlord shall construct the Tenant Improvements
\nsubstantially in accordance with this Work Letter and the Final Plans, all Laws
\nand Private Restrictions, and in a good and workmanlike manner, and all
\nmaterials and equipment furnished will substantially conform to said plans and
\nshall be new and otherwise of good quality. Landlord’s Contractor and
\nsubcontractors shall be responsible for the correction of defects in design,
\nworkmanship, materials and equipment supplied, and the cost of correction shall
\nnot be charged against the Tenant Improvement Allowance or be a Property
\nMaintenance Expense.<\/p>\n
12. OWNERSHIP OF TENANT IMPROVEMENTS. All of the Tenant Improvements which are
\nconstructed with the Tenant Improvement Allowance shall become the property of
\nLandlord upon installation and shall not be removed or altered by Tenant, except
\nto the extent permitted by the Lease. Any part of the Tenant Improvements which
\nare constructed by Landlord with funds of Tenant shall become the property of
\nTenant upon installation and Tenant shall have the right to depreciate and claim
\nand collect investment tax credits in such improvements; provided, however, that
\n(i) Tenant shall not remove or alter such improvements except in accordance with
\nthe terms of the Lease; (ii) such improvements shall be surrendered to Landlord,
\nand title to such improvements shall vest in Landlord, at the expiration or
\nearlier termination of the Lease Term; and (iii) in no event shall Landlord have
\nany obligation to pay Tenant for the cost or value of such improvements. As soon
\nas reasonably practicable, Landlord and Tenant shall agree in writing which of
\nsuch improvements are to be constructed using the Tenant Improvement Allowance
\n(and therefore are Landlord’s property) and which of them are to be installed
\nwith Tenant’s funds (and therefore are Tenant’s property) during the Lease Term.<\/p>\n
3
\n 35<\/p>\n
13. DESIGNATION OF AGENT. Tenant hereby designates and appoints Nova Partners
\n(“Agent”) as its agent to act on its behalf with respect to its duties and
\nobligations under this Work Letter. For the purposes of this appointment,
\nAgent’s authority shall specifically include, but in no way be limited to, the
\nfollowing: (i) the approval of the Design Development Plans, (ii) the submission
\nof any Changes, (iii) the delivery of any Estimate Requests, (iv) the approval
\nof any Landlord responses to Estimate Requests, (v) the approval of all costs
\nand time, including architectural and engineering services, required to revise
\nthe Working Drawings to reflect any Changes, (v) the authorization of any
\novertime, and (vi) the authority to execute and deliver to Landlord any written
\nauthorizations requested by Landlord in connection with the construction of the
\nTenant Improvements. Tenant expressly acknowledges that this Appointment is made
\nwith the knowledge that Landlord and it affiliates will rely on the authority
\ngranted to Agent herein. Accordingly, Landlord shall be deemed a third party
\nbeneficiary of this Appointment. Tenant further acknowledges that the authority
\nhereby conferred will continue in full force and effect until Landlord shall
\nreceive notice in writing, signed by the Tenant, of the revocation of the
\nauthority herein granted. Such revocation shall be effective only as to actions
\ntaken by the Agent subsequent to receipt by Landlord of such notice. Tenant
\nagrees to indemnify, defend and hold Landlord harmless from any and all claims,
\nliabilities, losses, damages, costs and expenses, including without limitation,
\nall reasonable attorneys’ fees, asserted against or suffered by Landlord
\nresulting from Landlord’s reliance on this appointment.<\/p>\n
IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter
\nas of the respective dates set forth below.<\/p>\n
LANDLORD:<\/p>\n
MATHILDA ASSOCIATES LLC,
\n a California limited liability
\n company<\/p>\n
By: Menlo Equities LLC, a California
\n limited liability company, Manager<\/p>\n
Dated: By: Diamant Investments LLC,
\n —————————– a Delaware limited liability
\n company, Member<\/p>\n
By:
\n ———————————
\n Richard J. Holmstrom, Manager<\/p>\n
TENANT:<\/p>\n
JUNIPER NETWORKS, INC.,
\n a Delaware corporation<\/p>\n
Dated: By:
\n —————————– ———————————
\n Title:
\n ——————————<\/p>\n
Dated: By:
\n —————————– ———————————
\n Title:
\n ——————————<\/p>\n
4
\n 36<\/p>\n
EXHIBIT C<\/p>\n
LEASE COMMENCEMENT DATE CERTIFICATE<\/p>\n
This Lease Commencement Date Certificate is entered into by Landlord and Tenant
\npursuant to the Work Letter attached as Exhibit B to the Lease.<\/p>\n
1. (a) Landlord: Mathilda Associates LLC, a California
\n limited liability company
\n (b) Tenant: Juniper Networks, Inc., a Delaware corporation
\n (c) Lease: Lease dated February ___, 2000 between
\n Landlord and Tenant.
\n (d) Leased Premises: 1184 Mathilda Avenue, Sunnyvale, California<\/p>\n
2. CONFIRMATION OF LEASE COMMENCEMENT.<\/p>\n
Landlord and Tenant confirm that the Lease Commencement Date is
\n____________ and the Expiration Date is ______________ and that Article 1 of the
\nLease is amended accordingly.<\/p>\n
Landlord and Tenant have executed this Lease Commencement Date
\nCertificate as of the dates set forth below.<\/p>\n
LANDLORD:<\/p>\n
MATHILDA ASSOCIATES LLC,
\n a California limited liability company<\/p>\n
By: Menlo Equities LLC, a California
\n limited liability company<\/p>\n
Dated: By: Member
\n —————————– —————————–<\/p>\n
TENANT:<\/p>\n
JUNIPER NETWORKS, INC.,
\n a Delaware corporation<\/p>\n
Dated: By:
\n —————————– ———————————
\n Title:
\n ——————————<\/p>\n
Dated: By:
\n —————————– ———————————
\n Title:
\n ——————————<\/p>\n
1
\n 37<\/p>\n
EXHIBIT D<\/p>\n
FORM OF ESTOPPEL CERTIFICATE<\/p>\n
——————, —–<\/p>\n
————————-<\/p>\n
————————-<\/p>\n
————————-<\/p>\n
————————-<\/p>\n
Re 1184 Mathilda Avenue
\n Sunnyvale, California<\/p>\n
Ladies and Gentlemen:<\/p>\n
Reference is made to that certain Lease, dated as of February ___, 2000, between
\nMATHILDA ASSOCIATES LLC, a California limited liability company (“Landlord”),
\nand the undersigned (herein referred to as the “Lease”). A copy of the Lease
\n[and all amendment thereto] is[are] attached hereto as EXHIBIT A. At the request
\nof Landlord in connection with [ State reasons for request for estoppel
\ncertificate ], the undersigned hereby certifies to Landlord and to [ State names
\nof other parties requiring certification ] and each of your respective
\nsuccessors and assigns as follows:<\/p>\n
1. The undersigned is the tenant under the Lease.<\/p>\n
2. The Lease is in full force and effect and has not been amended,
\nmodified, supplemented or superseded except as indicated in Exhibit A.<\/p>\n
3. There is no defense, offset, claim or counterclaim by or in favor of
\nthe undersigned against Landlord under the Lease or against the obligations of
\nthe undersigned under the Lease. The undersigned has no renewal, extension or
\nexpansion option, no right of first offer or right of first refusal and no other
\nsimilar right to renew or extend the term of the Lease or expand the property
\ndemised thereunder except as may be expressly set forth in the Lease.<\/p>\n
4. The undersigned is not aware of any default now existing of the
\nundersigned or of Landlord under the Lease, nor of any event which with notice
\nor the passage of time or both would constitute a default of the undersigned or
\nof Landlord under the Lease except ____________________________________________.<\/p>\n
5. The undersigned has not received notice of a prior transfer,
\nassignment, hypothecation or pledge by Landlord of any of Landlord’s interest in
\nthe Lease.<\/p>\n
6. The monthly rent due under the Lease is $____________ and has been
\npaid through __________________, and all additional rent due and payable under
\nthe Lease has been paid through __________________.<\/p>\n
7. The term of the Lease commenced on __________________, and expires on
\n___________________, unless sooner terminated pursuant to the provisions of the
\nLease. Landlord has performed all work required by the Lease for the
\nundersigned’s initial occupancy of the demised property.<\/p>\n
8. The undersigned has deposited the sum of $____________ with Landlord
\nas security for the performance of its obligations as tenant under the Lease,
\nand no portion of such deposit has been applied by Landlord to any obligation
\nunder the Lease.<\/p>\n
9. Except as set forth in the Lease, there is no free rent period
\npending, nor is Tenant entitled to any Landlord’s contribution.<\/p>\n
The above certifications are made to Landlord and Lender knowing that Landlord
\nand Lender will rely thereon in accepting an assignment of the Lease.<\/p>\n
Very truly yours,<\/p>\n
JUNIPER NETWORKS, INC., a Delaware corporation<\/p>\n
By:
\n ——————————–
\nName:
\n ——————————
\nTitle:
\n —————————–<\/p>\n
1
\n 38<\/p>\n
EXHIBIT E<\/p>\n
FORM OF LETTER OF CREDIT<\/p>\n
Date: ____________________, 2000<\/p>\n
Irrevocable Standby Letter of Credit Number: ____________<\/p>\n
Beneficiary: Applicant:<\/p>\n
Mathilda Associates LLC Juniper Networks, Inc.
\n525 University Avenue, Suite 100 __________________________________
\nPalo Alto, California 94301 __________________________________
\n ___________________________________
\n ___________________________________<\/p>\n
Amount:<\/p>\n
USD $ 1,000,000
\n (FOUR MILLION THREE HUNDRED
\n TWENTY-NINE THOUSAND FOUR HUNDRED
\n FIFTY AND 00\/100 U.S. DOLLARS)<\/p>\n
Expiration: _______________________<\/p>\n
We hereby establish our Irrevocable Standby Letter of Credit No. _______________
\nin your favor for the account of ______________________________________________,
\n____________________________, on behalf of _____________________________________
\n______________________________________________________, available for drawings
\nfor up to an aggregate amount of U.S. $ 4,329,450.00 (FOUR MILLION THREE HUNDRED
\nTWENTY-NINE THOUSAND FOUR HUNDRED FIFTY AND 00\/100 U.S. DOLLARS). This Letter of
\nCredit is available by payment upon your draft drawn at sight on us, submitted
\nat the office of ____________________________________________________________,
\nAttention: Letter of Credit Services, and expires at our close of business on
\nthe expiration date or any automatically extended expiration date as hereinafter
\nset forth.<\/p>\n
This Letter of Credit shall expire on ________________________, but such
\nexpiration date shall be automatically extended for a period of one (1) year on
\n______________________ and on each successive expiration date, unless at least
\nsixty (60) days before the current expiration date we notify you by overnight
\ncourier that this Letter of Credit is not extended beyond the current expiration
\ndate. In the event you are so notified, any unused portion of the Letter of
\nCredit shall be available upon presentation of a sight draft by Mathilda
\nAssociates LLC, within the current expiration date.<\/p>\n
We give our undertaking to the Beneficiary that sums drawn under and in
\ncompliance with the terms of this Letter of Credit will be duly honored by our
\nbank on presentation of drawings in accordance with the terms of this credit.<\/p>\n
This Letter of Credit is transferable by the Beneficiary. Transfer of this
\nLetter of Credit is subject to our consent and receipt of Beneficiary’s
\ninstructions in the form attached hereto as Exhibit A accompanied by the
\noriginal Letter of Credit and amendment(s) if any. Cost or expenses of such
\ntransfer shall be for the account of the Beneficiary.<\/p>\n
This Letter of Credit is subject to the Uniform Customs and Practices for
\nDocumentary Credits (1993 Revision) International Chamber of Commerce
\nPublication No. 500 and engages us to the terms herein.<\/p>\n
Yours very truly,<\/p>\n
Authorized Signature
\n Letter of Credit Services
\n ( )
\n —– ——————<\/p>\n
1.
\n 39<\/p>\n
EXHIBIT A<\/p>\n
——————————————–<\/p>\n
——————————————–<\/p>\n
——————————————–<\/p>\n
——————————————–
\nAttention: Letter of Credit Services<\/p>\n
Re: Irrevocable Letter of Credit No. ______________<\/p>\n
Dear Sirs:<\/p>\n
The undersigned acknowledges receipt of your advice No.
\n____________________ of a credit issued in our favor, the terms of which are
\nsatisfactory. We now return the original advice of the said credit with all
\namendments and extensions, if any, and hereby irrevocably transfer the said
\ncredit and all amendments and extensions thereof, if any, to:<\/p>\n
——————————————
\n [Name of Transferee]<\/p>\n
——————————————
\n [Address]<\/p>\n
You are to inform the transferee of this transfer and such transferee
\nshall have sole rights as beneficiary under the credit, including any
\namendments, extension or increases thereof, without notice to or further assent
\nfrom us.<\/p>\n
Yours very truly,<\/p>\n
By:
\n ———————————
\n (The above signature with title as
\n stated with that on file with us and
\n is authorized for execution of this
\n instrument.)<\/p>\n
————————————
\n (Bank)<\/p>\n
2.<\/p>\n
40<\/p>\n
EXHIBIT F<\/p>\n
FORM OF LANDLORD WAIVER<\/p>\n
THIS LANDLORD WAIVER (this “Waiver”) dated _______________, 2____ is
\nentered into by and between MATHILDA ASSOCIATES LLC, a California limited
\nliability company (“Landlord”) and ___________________ (“Secured Party”).<\/p>\n
RECITALS<\/p>\n
WHEREAS, Landlord is the owner and landlord of the premises described as
\n1184 Mathilda Avenue, Sunnyvale, California (the “Property”); and<\/p>\n
WHEREAS, Landlord and Juniper Networks, Inc. (“Tenant”) have entered
\ninto that certain lease dated February ___, 2000 (as previously and\/or hereafter
\namended, the “Real Property Lease”) pursuant to which Tenant has leased
\napproximately 144,315 square feet of space at the Property (the “Premises”); and<\/p>\n
WHEREAS, Tenant has entered into an equipment lease and\/or financing
\nagreement pursuant to which Tenant has granted a security interest in the
\npersonal property described on Schedule 1 attached hereto (the “Personal
\nProperty”) to Secured Party under that certain [Equipment Lease and\/or Financing
\nAgreement] between Tenant and Secured Party dated __________ (the “Financing
\nAgreement”); and<\/p>\n
WHEREAS, Secured Party and Landlord desire to establish their respective
\nrights regarding the Personal Property and Secured Party’s access to the
\nPremises;<\/p>\n
AGREEMENT<\/p>\n
NOW, THEREFORE, in consideration of the above Recitals and for other
\ngood and valuable consideration, the receipt and adequacy of which are hereby
\nacknowledged, the parties hereto agree as follows:<\/p>\n
1. During the term of the Real Property Lease, and subject to Landlord’s
\ninterest in the Personal Property, if any, at the expiration or earlier
\ntermination of the Real Property Lease, the Personal Property shall remain
\npersonal property and severable from the Premises and shall not become part of
\nthe Premises or construed as a fixture at the Premises to the extent that the
\nTenant Improvement Allowance (as defined in the Real Property Lease) has not
\nbeen utilized to pay for the Personal Property or the financing thereof.<\/p>\n
2. So long as Tenant occupies the Premises and is not in default under
\nthe Real Property Lease, Secured Party may enter the Premises at any time or
\nfrom time to time upon reasonable written notice to Landlord and in compliance
\nwith the terms of the Financing Agreement for purposes of inspecting and\/or
\nremoving any and all of the Personal Property in the exercise of its rights and
\nremedies arising from the Financing Agreement. In the event of a default by
\nTenant under the Real Property Lease, Secured Party shall obtain Landlord’s
\nprior written consent prior to entering the Premises.<\/p>\n
3. Landlord shall notify Secured Party in the event the Personal
\nProperty remains at the Premises after either (i) Tenant is evicted from the
\nPremises or (ii) Tenant abandons (as opposed to vacates) the Premises prior to
\nthe expiration of the Real Property Lease. Secured Party shall have 15 days to
\nremove the Personal Property from the Premises after notification of such action
\nfrom Landlord. If Secured Party has not removed the Personal Property within
\nsuch 15 day period, Landlord shall have all rights regarding the Personal
\nProperty accorded to it by law and\/or pursuant to the Real Property Lease and
\nSecured Party shall have no further rights regarding such Personal Property.
\nAfter Tenant has abandoned or been evicted from the Premises, Secured Party
\nshall be liable for holdover rent for the total amount of time the Personal
\nProperty remains at the Premises after such eviction or abandonment. For
\npurposes hereof, “holdover rent” shall mean 200% of the rent in effect under the
\nReal Property Lease for the period immediately prior to such vacation or
\neviction.<\/p>\n
4. If Secured Party exercises its right to remove the Personal Property
\nfrom the Premises as provided herein, Secured Party shall repair any damage to
\nthe Premises caused by such removal. Landlord shall have the right to require
\nSecured Party to post a bond acceptable to Landlord to cover the potential cost
\nof such repair prior to removing any such Personal Property.<\/p>\n
5. No auction or sale of the Personal Property shall be conducted by
\nSecured Party from the Premises without Landlord’s prior written consent, which
\nconsent Landlord may withhold in Landlord’s sole and absolute discretion.<\/p>\n
6. This waiver shall be binding upon the heirs, administrators,
\nexecutors, successors and assigns of the Landlord, and shall inure to the
\nbenefit of the successors and assigns of the Secured Party.<\/p>\n
1.<\/p>\n
41<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed, sealed and
\ndelivered this Waiver this __________ day of ________________, 2____.<\/p>\n
MATHILDA ASSOCIATES LLC,
\n a California limited liability
\n company<\/p>\n
By: Menlo Equities LLC, a California
\n limited liability company<\/p>\n
By: Member
\n ———————–<\/p>\n
SECURED PARTY:<\/p>\n
By:
\n ———————————
\n Title:
\n ——————————<\/p>\n
By:
\n ———————————
\n Title:
\n ——————————<\/p>\n
2.<\/p>\n
42<\/p>\n
SCHEDULE 1<\/p>\n
PERSONAL PROPERTY<\/p>\n
3.<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7951],"corporate_contracts_industries":[9509],"corporate_contracts_types":[9583,9579],"class_list":["post-41773","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-juniper-networks-inc","corporate_contracts_industries-technology__networking","corporate_contracts_types-land__ca","corporate_contracts_types-land"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41773"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41773"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41773"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}