SHORELINE TECHNOLOGY PARK
MOUNTAIN VIEW CALIFORNIA
OFFICE LEASE AGREEMENT
BETWEEN
EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a Delaware limited liability company
("LANDLORD")
AND
COMMTOUCH SOFTWARE, INC., a California corporation
("TENANT")
TABLE OF CONTENTS
I. Basic Lease Information ............................................. 1
II. Lease Grant ......................................................... 3
III. Possession .......................................................... 3
IV. Rent ................................................................ 4
V. Compliance with Laws; Use ........................................... 8
VI. Security Deposit .................................................... 8
VII. Services to be Furnished by Landlord ................................ 8
VIII. Leasehold Improvements .............................................. 9
IX. Repairs, Maintenance and Alterations ................................ 9
X. Use of Utility Services by Tenant ................................... 11
XI. Entry by Landlord ................................................... 12
XII. Assignment and Subletting ........................................... 12
XIII. Liens ............................................................... 13
XIV. Indemnity and Waiver of Claims ...................................... 14
XV. Insurance ........................................................... 14
XVI. Subrogation ......................................................... 15
XVII. Casualty Damage ..................................................... 15
XVIII. Condemnation ........................................................ 15
XIX. Events of Default ................................................... 16
XX. Remedies ............................................................ 16
XXI. Limitation of Liability ............................................. 18
XXII. No Waiver ........................................................... 18
XXIII. Quiet Enjoyment ..................................................... 18
XXIV. Relocation .......................................................... 18
XXV. Holding Over ........................................................ 18
XXVI. Subordination to Mortgages; Estoppel Certificate .................... 19
XXVII. Attorneys' Fees ..................................................... 19
XXVIII. Notice .............................................................. 19
XXIX. Excepted Rights ..................................................... 19
XXX. Surrender of Premises ............................................... 20
XXXI. Miscellaneous ....................................................... 20
XXXII. Entire Agreement .................................................... 22
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OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT (the "Lease") is made and entered into as
of the 28th day of October 1999, by and between EOP-SHORELINE TECHNOLOGY PARK,
L.L.C., a Delaware limited liability company ("Landlord") and COMMTOUCH
SOFTWARE, INC., a California corporation ("Tenant").
I. Basic Lease Information.
A. "Building" shall mean the building located at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
B. "Premises" shall mean the area shown on Exhibit A-1 to this
Lease. The "Rentable Square Footage of the Premises" is deemed
to be 71,404 square feet.
C. "Rentable Square Footage of the Building" is deemed to be
71,404 square feet. Landlord and Tenant stipulate that the
Premises include all of the floors in their entirety, all
corridors and restroom facilities located in the Building and
accordingly, all such full floors shall be considered part of
the Premises. Landlord and Tenant further stipulate and agree
that the Rentable Square Footage of the Building and the
Rentable Square Footage of the Premises are correct and shall
not be remeasured.
D. "Base Rent":
Annual Rate
Per Square Annual Monthly
Period Foot Base Rent Base Rent
---------------- ------ ------------- -----------
3/1/00 - 2/28/01 $34.20 $2,442,016.80 $203,501.40
3/1/01 - 2/28/02 $35.40 $2,527,701.60 $210,641.80
3/1/02 - 2/28/03 $36.60 $2,613,386.40 $217,782.20
3/1/03 - 2/29/04 $37.80 $2,699,071.20 $224,922.60
3/1/04 - 2/28/05 $39.00 $2,784,756.00 $232,063.00
3/1/05 - 2/28/06 $40.20 $2,870,440.80 $239,203.40
3/1/06 - 5/14/07 $41.40 $2,956,125.60 $246,343.80
Notwithstanding the above schedule of Base Rent to the
contrary, as long as Tenant is not in default, Tenant shall be
entitled to (i) an abatement of Base Rent in the amount of
$6,783.38 per day for 75 consecutive days of the Term
beginning with the Commencement Date (the "Abatement Period")
for a total amount of $508,753.50 (the "Abated Base Rent") of
Base Rent abated during the Abatement Period; and (ii) an
abatement of 75 consecutive days of Expenses and Taxes (as
hereinafter defined) (the "Abated Expenses and Taxes") for the
Abatement Period. In the event of a monetary or material
non-monetary default by Tenant which occurs at any time during
the Term and extends beyond any applicable notice and cure
period provided herein, all Abated Base Rent and Abated
Expenses and Taxes shall immediately become due and payable.
The payment by Tenant of the Abated Base Rent and the Abated
Expenses and Taxes in the event of a default shall not limit
or affect any of Landlord's other rights, pursuant to this
Lease or at law or in equity. During the Abatement Period,
only Base Rent and Expenses and Taxes shall be abated, and all
Additional Rent and other costs and charges specified in this
Lease shall remain as due and payable pursuant to the
provisions of this Lease. In the event that Tenant
substantially completes all of the Initial Alterations (as
defined in Exhibit D of this Lease) prior to the last day of
the Abatement Period, this paragraph shall expire and Tenant
shall commence paying Base Rent in accordance with the above
Base Rent schedule and Expenses and Taxes in accordance with
Article IV of this Lease commencing with the day after the
date all of the Initial Alterations are substantially
completed. For purposes of this paragraph, the Initial
Alterations in the Premises shall be deemed substantially
completed on the date that, in Landlord's reasonable judgment,
all Initial Alterations have been performed, other than any
details of construction, mechanical adjustment or any other
similar matter, the noncompletion of which does not materially
interfere with Tenant's use of the Premises.
E. "Tenant's Pro Rata Share": 100%.
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F. "Term": A period of 84 months and 75 days. The Term shall
commence on March 1, 2000 (the "Commencement Date") and,
unless terminated early or extended in accordance with this
Lease, end on May 14, 2007 (the "Termination Date").
G. Tenant allowance(s): $357,020.00 as more fully described on
Exhibit D of this Lease.
H. "Security Deposit": $1,100,000.00. The Security Deposit shall
be in the form of an irrevocable letter of credit (the "Letter
of Credit"), which Letter of Credit shall: (a) be in the
amount of $1,100,000.00; (b) be issued on the form attached
hereto as Exhibit G; (c) name Landlord as its beneficiary; (d)
be drawn on an FDIC insured financial institution satisfactory
to Landlord; (e) be delivered to Landlord upon execution of
this Lease, and (f) expire no earlier than 90 days after the
Termination Date of this Lease.
I. "Guarantor(s)": As of the date of this Lease, there are no
Guarantors.
J. "Broker(s)": Cornish & ▇▇▇▇▇ Commercial and Colliers
International.
K. "Permitted Use": Office, research and development,
manufacturing, storage and other legal uses as permitted by
local zoning laws applicable to the Premises and otherwise
permitted by the Governing Documents (as that term is defined
in Article XXXI.M. below).
L. "Notice Addresses.
Tenant:
On and after the Commencement Date, notices shall be sent to
Tenant at the Premises. Prior to the Commencement Date,
notices shall be sent to Tenant at the following address:
▇▇▇▇ ▇▇▇▇▇-CommTouch Software
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone #: ▇▇▇-▇▇▇-▇▇▇▇
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
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Landlord: With a copy to:
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EOP-SHORELINE TECHNOLOGY Equity Office Properties Trust
PARK, L.L.C. Two North Riverside Plaza
c/o Equity Office Properties Suite 2200
Trust ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
4 Palo Alto Square Attention: Regional Counsel -
3000 El Camino Real, Suite ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Building Manager
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Rent (defined in Section IV.A) is payable to the order of
Equity Office Properties at the following address: EOP
Operating Limited Partnership, as agent for EOP-Shoreline
Technology Park, Dept. #8824, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
M. "Business Day(s)" are Monday through Friday of each week,
exclusive of New Year's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day ("Holidays").
Landlord may designate additional Holidays, provided that the
additional Holidays are commonly recognized by other office
buildings in the area where the Building is located.
N. "Landlord Work" means the work, if any, that Landlord is
obligated to perform in the Premises pursuant to a separate
work letter agreement (the "Work Letter"), if any, attached as
Exhibit D. If a Work Letter is not attached to this Lease or
if an attached Work Letter does not require Landlord to
perform any work, the occurrence of the Commencement Date
shall not be conditioned upon the performance of work by
Landlord and, accordingly, Section lll.A. shall not be
applicable to the determination of the Commencement Date.
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0. "Law(s)" means all applicable statutes, codes, ordinances,
orders, rules and regulations of any municipal or governmental
entity.
P. "Normal Business Hours" for the Building are 8 A.M. to 5 P.M.
on Business Days.
Q. "Property" means the Building and the parcel(s) of land on
which it is located and, at Landlord's discretion, the
Building's parking area and other improvements serving the
Building, if any, and the parcel(s) of land on which they are
located.
R. "Project" shall mean the development located on approximately
51.83 acres commonly described as Shoreline Technology Park,
which includes the Building, the Property, as well as other
buildings and property as outlined on Exhibit A-2 attached
hereto and incorporated herein.
S. "Rentable Square Footage of the Project" is deemed to be
726,508 square feet.
II. Lease Grant.
Landlord leases the Premises to Tenant and Tenant leases the Premises
from Landlord, together with the right in common with others to use any portions
of the Project that are designated by Landlord for the common use of tenants and
others, such as sidewalks, unreserved parking areas, common corridors, elevator
foyers, restrooms, vending areas, lobby areas, artificial lakes, walkways, water
amenities, landscaping, plaza, roads, driveways, and recreation areas
(collectively, the "Common Areas"), including but not limited to that certain
recreation area (the "Recreational Area") which is maintained by Landlord in the
location and configuration shown on Exhibit A-3 attached hereto. Notwithstanding
the foregoing to the contrary, Tenant's right to use the Recreational Area shall
be subject to the right of the City of Mountain View ("City") to require that a
portion of the Recreational Area be paved and used for parking purposes at a
time to be determined at the discretion of the City. The area to be used for
parking purposes is indicated as "Potential Parking Area" on Exhibit A-3. If the
City requires the parking, Tenant shall have the non-exclusive right to use the
parking spaces created thereby.
III. Possession.
A. Intentionally Omitted.
B. Subject to Landlord's obligation, if any, to perform Landlord
Work and Landlord's obligations under Section IX.B., the
Premises are accepted by Tenant in "as is" condition and
configuration. By taking possession of the Premises, Tenant
agrees that the Premises are in good order and satisfactory
condition, and that there are no representations or warranties
by Landlord regarding the condition of the Premises or the
Building. If Landlord is delayed delivering possession of the
Premises or any other space due to the holdover or unlawful
possession of such space by any party, Landlord shall use
reasonable efforts to obtain possession of the space. In such
event, the Commencement Date shall be postponed until the date
Landlord delivers possession of the Premises to Tenant free
from occupancy by any party, and the Termination Date, at the
option of Landlord, may be postponed by an equal number of
days. In the event the Commencement Date is so postponed,
Landlord and Tenant shall enter into a commencement letter
agreement in the form attached as Exhibit C. Notwithstanding
the foregoing, if there have been no delays caused by Tenant,
and Landlord has not tendered possession of the Premises to
Tenant by July 1, 2000 (the "Outside Possession Date"),
Tenant, as its sole remedy, may terminate this Lease by giving
Landlord written notice of termination on or before the
earlier to occur of: (i) 5 Business Days after the Outside
Possession Date; and (ii) the Commencement Date. In such
event, this Lease shall be deemed null and void and of no
further force and effect and Landlord shall promptly refund
any Prepaid Rental and Security Deposit previously advanced by
Tenant under this Lease and, so long as Tenant has not
previously defaulted under any of its obligations under the
Work Letter, the parties hereto shall have no further
responsibilities or obligations to each other with respect to
this Lease. Landlord and Tenant acknowledge and agree that:
(i) the determination of the Commencement Date shall take into
consideration the effect of any delays by
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Tenant; and (ii) the Outside Possession Date shall be
postponed by the number of days the Commencement Date is
delayed due to events of Force Majeure. Notwithstanding
anything herein to the contrary, if Landlord determines that
it will be unable to tender possession of the Premises to
Tenant, Landlord shall have the right to provide Tenant with
written notice (the "Outside Extension Notice") of such
inability, which Outside Extension Notice shall set forth the
date on which Landlord reasonably believes that the
Commencement Date will occur. Upon receipt of the Outside
Extension Notice, Tenant shall have the right to terminate
this Lease by providing written notice of termination to
Landlord within 5 Business Days after the date of the Outside
Extension Notice. In the event that Tenant does not terminate
this Lease within such 5 Business Day period, the Outside
Possession Date shall automatically be amended to be the date
set forth in Landlord's Outside Extension Notice.
C. If Tenant takes possession of the Premises before the
Commencement Date, such possession shall be subject to the
terms and conditions of this Lease and Tenant shall pay Rent
(defined in Section IV.A.) to Landlord for each day of
possession before the Commencement Date. However, except for
the cost of services requested by Tenant (e.g. freight
elevator usage), Tenant shall not be required to pay Rent for
any days of possession before the Commencement Date during
which Tenant, with the approval of Landlord, is in possession
of the Premises for the sole purpose of performing
improvements or installing furniture, equipment or other
personal property.
IV. Rent.
A. Payments. As consideration for this Lease, Tenant shall pay
Landlord, without any setoff or deduction, the total amount of
Base Rent and Additional Rent due for the Term. "Additional
Rent" means all sums (exclusive of Base Rent) that Tenant is
required to pay Landlord. Additional Rent and Base Rent are
sometimes collectively referred to as "Rent". Tenant shall pay
and be liable for all rental, sales and use taxes (but
excluding income taxes), if any, imposed upon or measured by
Rent under applicable Law. Base Rent and recurring monthly
charges of Additional Rent shall be due and payable in advance
on the first day of each calendar month without notice or
demand, provided that the installment of Base Rent for the 4th
full calendar month of the Term shall be payable upon the
execution of this Lease by Tenant. All other items of Rent
shall be due and payable by Tenant on or before 30 days after
billing by Landlord. All payments of Rent shall be by good and
sufficient check or by other means (such as automatic debit or
electronic transfer) acceptable to Landlord. If Tenant fails
to pay any item or installment of Rent when due, Tenant shall
pay Landlord an administration fee equal to 5% of the past due
Rent, provided that Tenant shall be entitled to a grace period
of 5 days after receipt of written notice from Landlord for
the first 2 late payments of Rent in a given calendar year. If
the Term commences on a day other than the first day of a
calendar month or terminates on a day other than the last day
of a calendar month, the monthly Base Rent and Tenant's Pro
Rata Share of Expenses (defined in Section IV.C.) and Taxes
(defined in Section IV.D.) for the month shall be prorated
based on the number of days in such calendar month. Landlord's
acceptance of less than the correct amount of Rent shall be
considered a payment on account of the earliest Rent due. No
endorsement or statement on a check or letter accompanying a
check or payment shall be considered an accord and
satisfaction, and either party may accept the check or payment
without prejudice to that party's right to recover the balance
or pursue other available remedies. Tenant's covenant to pay
Rent is independent of every other covenant in this Lease.
B. Payment of Tenant's Pro Rata Share of Expenses and Taxes.
Tenant shall pay Tenant's Pro Rata Share of the total amount
of Expenses (defined in Section IV.C.) and Taxes (defined in
Section IV.D) for each calendar year during the Term. Landlord
shall provide Tenant with a good faith estimate of the total
amount of Expenses and Taxes for each calendar year during the
Term. On or before the first day of each month, Tenant shall
pay to Landlord a monthly installment equal to one-twelfth of
Tenant's Pro Rata Share of Landlord's estimate of the total
amount of Expenses and Taxes. If Landlord determines that its
good faith estimate was incorrect by a material amount,
Landlord may provide Tenant with a revised estimate. After its
receipt of the revised estimate, Tenant's
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monthly payments shall be based upon the revised estimate. If
Landlord does not provide Tenant with an estimate of the total
amount of Expenses and Taxes by January 1 of a calendar year,
Tenant shall continue to pay monthly installments based on the
previous year's estimate until Landlord provides Tenant with
the new estimate. Upon delivery of the new estimate, an
adjustment shall be made for any month for which Tenant paid
monthly installments based on the previous year's estimate.
Tenant shall pay Landlord the amount of any underpayment
within 30 days after receipt of the new estimate. Any
overpayment shall be refunded to Tenant within 30 days or
credited against the next due future installment(s) of
Additional Rent.
As soon as is practical following the end of each calendar
year, Landlord shall furnish Tenant with a statement of the
actual amount of Expenses and Taxes for the prior calendar
year and Tenant's Pro Rata Share of the actual amount of
Expenses and Taxes for the prior calendar year. If the
estimated amount of Expenses and Taxes for the prior calendar
year is more than the actual amount of Expenses and Taxes for
the prior calendar year, Landlord shall apply any overpayment
by Tenant against Additional Rent due or next becoming due,
provided if the Term expires before the determination of the
overpayment, Landlord shall refund any overpayment to Tenant
after first deducting any Rent still due. If the estimated
amount of Expenses and Taxes for the prior calendar year is
less than the actual amount of Expenses and Taxes for such
prior year, Tenant shall pay Landlord, within 30 days after
its receipt of the statement of Expenses and Taxes, any
underpayment for the prior calendar year.
C. Expenses Defined. "Expenses" means the sum of (y) 100% of all
direct and indirect costs and expenses incurred in each
calendar year in connection with operating, maintaining,
repairing, managing and owning the Premises, the Building, the
Property, and the parking structure(s) or parking lot(s)
predominantly serving the Building, and (z) the Building's
allocable share of the direct and indirect costs of operating
and maintaining the Common Areas of the Project, the
Building's applicable share of all costs, fees, expenses or
other amounts payable by Landlord to the Association, if any,
and the Building's applicable share of all fees payable to the
company or the Association, if applicable, managing the
parking areas within the Project, including, without
limitation, the following:
1. Labor costs, including, wages, salaries, social
security and employment taxes, medical and other
types of insurance, uniforms, training, and
retirement and pension plans, provided that if an
employee performs services in connection with the
Project and other projects, costs associated with
such employee may be proportionately included in
Expenses based on the percentage of time such
employee spends in connection with the operation,
maintenance and management of the Project.
2. Management fees, including, without limitation, the
cost of equipping and maintaining a management
office, accounting and bookkeeping services, legal
fees not attributable to leasing or collection
activity, and other administrative costs. Landlord,
by itself or through an affiliate, shall have the
right to directly perform or provide any services
under this Lease (including management services),
provided that the cost of any such services shall not
exceed the cost that would have been incurred had
Landlord entered into an arms-length contract for
such services with an unaffiliated entity of
comparable skill and experience.
3. The reasonable cost of services, including amounts
paid to service providers and the rental and purchase
cost of parts, supplies, tools and equipment.
4. Premiums and deductibles paid by Landlord for
insurance, including workers compensation, fire and
extended coverage, earthquake, general liability,
rental loss, elevator, boiler and other insurance
customarily carried from time to time by owners of
comparable office buildings.
5. Electrical Costs (defined below) and charges for
water, gas, steam and sewer, but excluding those
charges for which Landlord is reimbursed by
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tenants. "Electrical Costs" means: (a) charges paid
by Landlord for electricity; (b) costs incurred in
connection with an energy management program for the
Property and/or Project; and (c) if and to the extent
permitted by Law, a fee for the services provided by
Landlord in connection with the selection of utility
companies and the negotiation and administration of
contracts for electricity, provided that such fee
shall not exceed 50% of any savings obtained by
Landlord.
6. The amortized cost of capital improvements (as
distinguished from replacement parts or components
installed in the ordinary course of business) made to
the Project which are: (a) performed primarily to
reduce operating expense costs or otherwise improve
the operating efficiency of the Project; or (b)
required to comply with any Laws that are enacted, or
first interpreted to apply to the Project, after the
date of this Lease; or (c) made necessary due to (i)
the negligent act or omission or willful misconduct
of Tenant or the Tenant Related Parties (as defined
below) or (ii) the Initial Alterations or any
subsequent Alterations to the Premises made by or for
the benefit of Tenant. The cost of capital
improvements shall be amortized by Landlord over the
lesser of the Payback Period (defined below) or 10
years. The amortized cost of capital improvements
may, at Landlord's option, include actual or imputed
interest at the rate that Landlord would reasonably
be required to pay to finance the cost of the capital
improvement. "Payback Period" means the reasonably
estimated period of time that it takes for the cost
savings resulting from a capital improvement to equal
the total cost of the capital improvement.
If Landlord incurs Expenses for the Project together with one
or more other buildings or properties, whether pursuant to a
reciprocal easement agreement, common area agreement or
otherwise, the shared costs and expenses shall be equitably
prorated and apportioned between the Project and the other
buildings or properties. Expenses shall not include: the cost
of capital improvements, including repairs or replacements to
the structural elements of the Building (except as set forth
above); depreciation; interest (except as provided above for
the amortization of capital improvements); principal payments
of mortgage and other non-operating debts of Landlord; the
cost of repairs or other work to the extent Landlord is
reimbursed by insurance or condemnation proceeds; costs in
connection with leasing space in the Building or other
buildings in the Project, including brokerage commissions;
lease concessions, including rental abatements and
construction allowances, granted to specific tenants; costs
incurred in connection with the sale, financing or refinancing
of the Building or other buildings in the Project; fines,
interest and penalties incurred due to the late payment of
Taxes (defined in Section IV.D) or Expenses; organizational
expenses associated with the creation and operation of the
entity which constitutes Landlord; or any penalties or damages
that Landlord pays to Tenant under this Lease or to other
tenants in the Building or other buildings in the Project,
under their respective leases. If the Project is not at least
95% occupied during any calendar year or if Landlord is not
supplying services to at least 95% of the total Rentable
Square Footage of the Project at any time during a calendar
year, Expenses shall, at Landlord's option, be determined as
if the Project had been 95% occupied and Landlord had been
supplying services to 95% of the Rentable Square Footage of
the Project during that calendar year. The extrapolation of
Expenses under this Section shall be performed by
appropriately adjusting the cost of those components of
Expenses that are impacted by changes in the occupancy of the
Project.
D. Taxes Defined. "Taxes" shall mean: (1) all real estate taxes
and other assessments on the Building, Property and/or
Project, including, but not limited to, assessments for
special improvement districts and building improvement
districts, taxes and assessments levied in substitution or
supplementation in whole or in part of any such taxes and
assessments and the Project's share of any real estate taxes
and assessments under any reciprocal easement agreement,
common area agreement or similar agreement as to the Project;
(2) all personal property taxes for property that is owned by
Landlord and used in connection with the operation,
maintenance and repair of the Project; and (3) all costs and
fees incurred in connection with seeking reductions in any tax
liabilities described in (1) and (2), including, without
limitation, any costs incurred by
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Landlord for compliance, review and appeal of tax liabilities.
Without limitation, Taxes shall not include any income,
capital levy, franchise, capital stock, gift, estate or
inheritance tax. If an assessment is payable in installments,
Taxes for the year shall include the amount of the installment
and any interest due and payable during that year. For all
other real estate taxes, Taxes for that year shall, at
Landlord's election, include either the amount accrued,
assessed or otherwise imposed for the year or the amount due
and payable for that year, provided that Landlord's election
shall be applied consistently throughout the Term. If a change
in Taxes is obtained for any year of the Term, then Taxes for
that year will be retroactively adjusted and Landlord shall
provide Tenant with a credit, if any, based on the adjustment.
Tenant shall be responsible for, and shall pay prior to
delinquency, taxes or governmental service fees, possessory
interest taxes, fees or charges in lieu of any such taxes,
capital levies, or other charges imposed upon, levied with
respect to, or assessed against, its personal property, and
its interest pursuant to this Lease. To the extent that any
such taxes are not separately assessed or billed to Tenant,
Tenant shall pay the amount thereof as invoiced to Tenant by
Landlord prior to the delinquency of such taxes. In the event
that the tenant improvements in the Building which correspond
to the Initial Alterations, as defined in this Lease, are
assessed and taxed separately by the applicable taxing
authority, then Tenant shall be liable and shall pay that
portion of the Taxes applicable to the value of the Initial
Alterations in the Premises based on the value attributed
thereto by the applicable taxing authority to either (a) the
applicable taxing authority prior to the delinquency of such
taxes in the event Tenant billed directly by such taxing
authority, or (b) the Landlord within 30 days after written
demand, in the event Landlord is billed directly by the
applicable taxing authority.
E. Audit Rights. Tenant may, within 90 days after receiving
Landlord's statement of Expenses, give Landlord written notice
("Review Notice") that Tenant intends to review Landlord's
records of the Expenses for that calendar year. Within a
reasonable time after receipt of the Review Notice, Landlord
shall make all pertinent records available for inspection that
are reasonably necessary for Tenant to conduct its review. If
any records are maintained at a location other than the office
of the Project, Tenant may either inspect the records at such
other location or pay for the reasonable cost of copying and
shipping the records. If Tenant retains an agent to review
Landlord's records, the agent must be with a licensed CPA
firm. Tenant shall be solely responsible for all costs,
expenses and fees incurred for the audit. Within 60 days after
the records are made available to Tenant, Tenant shall have
the right to give Landlord written notice (an "Objection
Notice") stating in reasonable detail any objection to
Landlord's statement of Expenses for that year. If Tenant
fails to give Landlord an Objection Notice within the 60 day
period or fails to provide Landlord with a Review Notice
within the 90 day period described above, Tenant shall be
deemed to have approved Landlord's statement of Expenses and
shall be barred from raising any claims regarding the Expenses
for that year. If Tenant provides Landlord with a timely
Objection Notice, Landlord and Tenant shall work together in
good faith to resolve any issues raised in Tenant's Objection
Notice. If Landlord and Tenant determine that Expenses for the
calendar year are less than reported, Landlord shall provide
Tenant with a credit against the next installment of Rent in
the amount of the overpayment by Tenant. Likewise, if Landlord
and Tenant determine that Expenses for the calendar year are
greater than reported, Tenant shall pay Landlord the amount of
any underpayment within 30 days. In addition, if Landlord and
Tenant determine that Expenses for the Building for the year
in question were less than stated by more than 5%, Landlord,
within 30 days after its receipt of paid invoices therefor
from Tenant, shall reimburse Tenant for any reasonable amounts
paid by Tenant to third parties in connection with such review
by Tenant. The records obtained by Tenant shall be treated as
confidential. In no event shall Tenant be permitted to examine
Landlord's records or to dispute any statement of Expenses
unless Tenant has paid and continues to pay all Rent when due.
7
V. Compliance with Laws; Use.
The Premises shall be used only for the Permitted Use and for no other
use whatsoever. Tenant shall not use or permit the use of the Premises for any
purpose which is illegal, dangerous to persons or property or which, in
Landlord's reasonable opinion, unreasonably disturbs any other tenants of the
Building or the Project or interferes with the operation of the Building or the
Project. Tenant shall comply with all Laws, including the Americans with
Disabilities Act, regarding the operation of Tenant's business and the use,
condition, configuration and occupancy of the Premises. Tenant, within 10 days
after receipt, shall provide Landlord with copies of any notices it receives
regarding a violation or alleged violation of any Laws. Tenant shall comply with
the rules and regulations of the Project attached as Exhibit B and such other
reasonable rules and regulations adopted by Landlord from time to time. Tenant
shall also cause its agents, contractors, subcontractors, employees, customers,
and subtenants to comply with all rules and regulations. Landlord shall not
knowingly discriminate against Tenant in Landlord's enforcement of the rules and
regulations.
VI. Security Deposit.
A. The Security Deposit shall be delivered to Landlord upon the
execution of this Lease by Tenant and shall be held by
Landlord without liability for interest (unless required by
Law) as security for the performance of Tenant's obligations.
The Security Deposit is not an advance payment of Rent or a
measure of Tenant's liability for damages. Landlord may, from
time to time, without prejudice to any other remedy, use all
or a portion of the Security Deposit to satisfy past due Rent
or to cure any uncured default by Tenant. If Landlord uses the
Security Deposit, Tenant shall on demand restore the Security
Deposit to its original amount. Landlord shall return any
unapplied portion of the Security Deposit to Tenant within 45
days after the later to occur of: (1) the determination of
Tenant's Pro Rata Share of Expenses and Taxes for the final
year of the Term; (2) the date Tenant surrenders possession of
the Premises to Landlord in accordance with this Lease; or (3)
the Termination Date. If Landlord transfers its interest in
the Premises, Landlord may assign the Security Deposit to the
transferee and, following the assignment, Landlord shall have
no further liability for the return of the Security Deposit.
Landlord shall not be required to keep the Security Deposit
separate from its other accounts. The Security Deposit may be
in the form of an irrevocable letter of credit (the "Letter of
Credit"), which Letter of Credit shall: (a) be in the amount
of $1,100,000.00; (b) be issued on the form attached hereto as
Exhibit G; (c) name Landlord as its beneficiary; (d) be drawn
on an FDIC insured financial institution satisfactory to
Landlord; (e) be delivered to Landlord upon execution of this
Lease; and (f) expire no earlier than 90 days after the
Termination Date of this Lease.
B. Notwithstanding anything herein to the contrary, provided
Tenant is (1) not in default under this Lease after the
expiration of any applicable notice and cure periods, and (2)
occupying at least 75% of the Premises as of the effective
date of any reduction of the Security Deposit, Tenant shall
have the right to reduce the amount of the Security Deposit
(i.e., the Letter of Credit) to be as follows: (i) $975,000.00
effective as of the 13th full calendar month of the Term; (ii)
$850,000.00 effective as of the 25th full calendar month of
the Term; (iii) $725,000.00 effective as of the 37th full
calendar month of the Term; (iv) $600,000.00 effective as of
the 49th full calendar month of the Term; and (v) $492,687.60
effective as of the 61st full calendar month of the Term. Such
reduction shall be accomplished by having Tenant provide
Landlord with a substitute Letter of Credit in the reduced
amount.
VII. Services to be Furnished by Landlord.
A. Tenant will be responsible, at its sole cost and expense to
the extent provided in Article X below, for the furnishing of
all services and utilities to the Premises, including, but not
limited to, heating, ventilation and air-conditioning,
electricity, water, light, power, trash pick-up, sewer
charges, telephone, janitorial and interior Building security
services and all other utility services supplied to the
Premises, and all taxes and surcharges thereon. Landlord
agrees to maintain and repair the Property as described in
Article IX.B.
B. Any interruption or termination of, services due to the
application of Laws, the failure of any equipment, the
performance of repairs, improvements or
8
alterations, or the occurrence of any other event not caused
by the negligent act or willful misconduct of Landlord (a
"Service Failure") shall not render Landlord liable to Tenant,
constitute a constructive eviction of Tenant, give rise to an
abatement of Rent, nor relieve Tenant from the obligation to
fulfill any covenant or agreement. Furthermore, in no event
shall Landlord be liable to Tenant for any loss or damage,
including the theft of Tenant's Property (defined in Article
XV), arising out of or in connection with the failure of any
security services, personnel or equipment.
VIII. Leasehold Improvements.
All improvements to the Premises (collectively, "Leasehold
Improvements") shall be owned by Landlord and shall remain upon the Premises
without compensation to Tenant. However, Landlord, by written notice to Tenant
within 30 days prior to the Termination Date, may require Tenant to remove, at
Tenant's expense: (1) Cable (defined in Section IX.A) installed by or for the
exclusive benefit of Tenant and located in the Premises or other portions of the
Project; and (2) any Leasehold Improvements (other than the Initial Alterations)
that are performed by or for the benefit of Tenant after the date Landlord
tenders possession of the Premises to Tenant and, in Landlord's reasonable
judgment, are of a nature that would require removal and repair costs that are
materially in excess of the removal and repair costs associated with standard
office improvements (collectively referred to as "Required Removables"). Without
limitation, it is agreed that Required Removables include internal stairways,
raised floors, personal baths and showers, vaults, rolling file systems and
structural alterations and modifications of any type. The Required Removables
designated by Landlord shall be removed by Tenant before the Termination Date,
provided that upon prior written notice to Landlord, Tenant may remain in the
Premises for up to 5 days after the Termination Date for the sole purpose of
removing the Required Removables. Tenant's possession of the Premises shall be
subject to all of the terms and conditions of this Lease, including the
obligation to pay Rent on a per diem basis at the rate in effect for the last
month of the Term. Tenant shall repair damage caused by the installation or
removal of Required Removables. If Tenant fails to remove any Required
Removables or perform related repairs in a timely manner, Landlord, at Tenant's
expense, may remove and dispose of the Required Removables and perform the
required repairs. Tenant, within 30 days after receipt of an invoice, shall
reimburse Landlord for the reasonable costs incurred by Landlord.
Notwithstanding the foregoing, Tenant, at the time it requests approval for a
proposed Alteration (defined in Section IX.C), may request in writing that
Landlcrd advise Tenant whether the Alteration or any portion of the Alteration
will be designated as a Required Removable. Within 10 days after receipt of
Tenant's request, Landlord shall advise Tenant in writing as to which portions
of the Alteration, if any, will be considered to be Required Removables.
IX. Repairs, Maintenance and Alterations.
A. Tenant's Repair and Maintenance Obligations. Tenant shall, at
its sole cost and expense, promptly perform all maintenance
and repairs to the Premises that are not Landlord's express
responsibility under this Lease, and shall keep the Premises
(interior and exterior) in good condition and repair
(including the replacement of any applicable improvements and
appurtenances when necessary), reasonable wear and tear
excepted. Tenant's repair and replacement obligations include,
without limitation, repairs to and replacements of: (1) floor
covering; (2) interior partitions; (3) doors; (4) walls and
wall coverings; (5) electronic, phone and data cabling and
related equipment (collectively, "Cable") that is installed by
or for the exclusive benefit of Tenant and located in the
Premises or other portions of the Project; (6) private showers
and kitchens, including hot water heaters, and similar
facilities; (7) mechanical (including HVAC), plumbing, sewer
connections, wiring, electrical, lighting, and fire, life
safety equipment and systems serving the Building and the
Premises; (8) windows, glass and plate glass; (9) ceilings;
(10) roof membrane(s); (11) skylights; (12) fixtures and
equipment; and (13) Alterations performed by contractors
retained by Tenant, including related HVAC balancing. All work
shall be performed in accordance with the rules and procedures
described in Section IX.C. below. In addition, Tenant shall,
at its sole cost and expense, provide janitorial service to
the Premises in a manner consistent with first-class office
buildings in the Mountain View, California area. The
janitorial service to be provided by Tenant shall include, but
not be limited to, the obligation to clean the exterior
windows and to keep the interior of the Premises such as the
windows, floors, walls, doors, showcases and fixtures clean
and neat in appearance and to remove all trash and debris
which may be found in or around the Premises.
9
Tenant shall also enter into and keep and maintain in effect,
service contracts reasonably acceptable to Landlord with
contractors reasonably acceptable to Landlord for the
maintenance and repair of those systems servicing the Building
as Landlord may reasonably designate, including, without
limitation, the HVAC, electrical, and life safety systems of
the Building. Without limiting the foregoing, Tenant shall, at
Tenant's sole cost and expense, (a) immediately replace all
broken glass in the Premises with glass equal to or in excess
of the specification and quality of the original glass; and
(b) repair any damage caused by Tenant, Tenant's agents,
employees, invitees, visitors, subtenants or contractors. If
Tenant fails to make any repairs to the Premises or fails to
perform the required janitorial work in the Premises at the
level required for more than 15 days after notice from
Landlord (although notice shall not be required if there is an
emergency), Landlord may make the repairs or perform the
janitorial work, as the case may be, and Tenant shall pay the
reasonable cost of the repairs or janitorial work, as the case
may be, to Landlord within 30 days after receipt of an
invoice, together with an administrative charge in an amount
equal to 5% of the cost of the work performed. Tenant shall
maintain written records of maintenance and repairs, as
required by Law, and shall use certified technicians to
perform any such maintenance and repairs, as so required.
Notwithstanding the foregoing to the contrary, in the event
either Landlord or Tenant believe that the Tenant's
obligations pursuant to the terms of this Article IX.A. would
require Tenant to make major replacements of certain items
which are more properly in the nature of a capital improvement
(as distinguished from replacement of parts or components
installed in the ordinary course of business) (a "Capital
Improvement Expense"), the party making such determination
shall promptly notify the other party hereto of the need to
make such Capital Improvement Expense. Upon receipt of such
notification, the parties shall enter into good faith
negotiations to determine whether the appropriate work to be
performed is more in the nature of a repair or replacement of
parts or a capital improvement. In the event the parties are
unable to agree within 30 days after the commencement of such
discussions, the parties shall seek the determination of the
applicable Landlord-approved third party service contractor
for the applicable building system at issue, which
determination shall be binding upon Landlord and Tenant. In
the event the parties determine that the required work to be
performed is not in the nature of a capital improvement, the
Tenant shall make such repairs or replacements at Tenant's
sole cost as provided above. In the event the parties
determine that the required work to be performed is in the
nature of a capital improvement, Landlord shall perform such
Capital Improvement Expense in a timely and workmanlike
manner. Provided that such Capital Improvement Expense is not
made necessary due to (i) the negligent act or omission or the
willful misconduct of Tenant or any of the Tenant Related
Parties, or (ii) the construction of the Initial Alterations
or any subsequent Alterations to the Premises made by or for
the benefit of Tenant (collectively, a "Tenant Fault"), the
cost of such Capital Improvement Expense shall be apportioned
between Landlord and Tenant such that Tenant shall pay, within
30 days after written demand thereof from Landlord, an amount
equal to the product of (x) the total cost of the Capital
Improvement Expense divided by the lesser of (a) the number of
years of the useful life of such capital improvement (as
reasonably determined by Landlord) and (b) 10 years, and
multiplied by (y) the number of years remaining in the Lease
Term subsequent to the date the capital improvement work first
commences (the "Remaining Years"); provided, that if the
number of Remaining Years is greater than the lesser of (a) or
(b) above, then for purposes of the calculation of the
Tenant's share of the Capital Improvement Expense, the
Remaining Years shall equal the lesser of (a) or (b) above. In
the event the Capital Improvement Expense is made necessary
due to a Tenant Fault, Tenant shall pay to Landlord, within 30
days after written demand thereof from Landlord, the total
amount of such Capital Improvement Expense.
B. Landlord's Repair Obligations. Landlord shall keep and
maintain in good repair and working order and make repairs to
and perform maintenance upon: (1) structural elements of the
Building; (2) Common Areas; (3) the roof of the Building
(other than the roof membrane); and (4) elevators (if any)
serving the Building. Landlord shall promptly make repairs
(considering the nature and urgency of the repair) for which
Landlord is responsible.
10
C. Alterations. Tenant shall not make alterations, additions or
improvements to the Premises or install any Cable in the
Premises or other portions of the Building or the Project
(collectively referred to as "Alterations") without first
obtaining the written consent of Landlord in each instance,
which consent shall not be unreasonably withheld or delayed.
However, Landlord's consent shall not be required for any
Alteration that satisfies all of the following criteria (a
"Cosmetic Alteration"): (1) is of a cosmetic nature such as
painting, wallpapering, hanging pictures and installing
carpeting; (2) is not visible from the exterior of the
Premises or Building; (3) will not affect the systems or
structure of the Building; (4) does not require work to be
performed inside the walls or above the ceiling of the
Premises; and (5) costs less than $30,000.00 in the aggregate
per project. However, even though consent is not required, the
performance of Cosmetic Alterations shall be subject to all
the other provisions of this Section IX.C. Prior to starting
work, Tenant shall furnish Landlord with plans and
specifications reasonably acceptable to Landlord (which plans
and specifications shall be subject to Landlord's prior
approval); names of contractors reasonably acceptable to
Landlord (provided that Landlord may designate specific
contractors with respect to Building systems); copies of
contracts; necessary permits and approvals; evidence of
contractor's and subcontractor's insurance in amounts
reasonably required by Landlord; and any security for
performance that is reasonably required by Landlord. Changes
to the plans and specifications must also be submitted to
Landlord for its approval. Alterations shall be constructed in
a good and workmanlike manner using materials of a quality
that is at least equal to the quality designated by Landlord
as the minimum standard for the Building and the Project.
Landlord may designate reasonable rules, regulations and
procedures for the performance of work in the Building and the
Project and, to the extent reasonably necessary to avoid
disruption to the occupants of the Building and the Project,
shall have the right to designate the time when Alterations
may be performed. Tenant shall reimburse Landlord within 30
days after receipt of an invoice for sums paid by Landlord for
third party examination of Tenant's plans for non-Cosmetic
Alterations. In addition, within 30 days after receipt of an
invoice from Landlord, Tenant shall pay Landlord a fee for
Landlord's oversight and coordination of any non-Cosmetic
Alterations equal to Landlord's actual, out-of-pocket costs
incurred in overseeing and coordinating any non-Cosmetic
Alterations. Upon completion, Tenant shall furnish "as-built"
plans (except for Cosmetic Alterations), completion
affidavits, full and final waivers of lien in recordable form,
and receipted bills covering all labor and materials. Tenant
shall assure that the Alterations comply with all insurance
requirements and Laws. Landlord's approval of an Alteration
shall not be a representation by Landlord that the Alteration
complies with applicable Laws or will be adequate for Tenant's
use.
X. Use of Utility Services by Tenant.
A. Electricity, gas, water and other utility services used by
Tenant in the Premises shall, at Landlord's option, be paid
for by Tenant either: (1) through inclusion in Expenses
(except as provided in Section X.B. for excess usage); (2) by
a separate charge payable by Tenant to Landlord within 30 days
after billing by Landlord; or (3) by separate charge billed by
the applicable utility company and payable directly by Tenant.
Electrical service to the Premises may be furnished by one or
more companies providing electrical generation, transmission
and distribution services, and the cost of electricity may
consist of several different components or separate charges
for such services, such as generation, distribution and
stranded cost charges. Landlord shall have the exclusive right
to select any company providing electrical service to the
Premises, to aggregate the electrical service for the Project,
Property and Premises with other buildings, to purchase
electricity through a broker and/or buyers group and to change
the providers and manner of purchasing electricity. Landlord
shall be entitled to receive a fee (if permitted by Law) for
the selection of utility companies and the negotiation and
administration of contracts for electricity, provided that the
amount of such fee shall not exceed 50% of any savings
obtained by Landlord.
B. Tenant's use of electrical service shall not exceed, either in
voltage, rated capacity or overall load, that which Landlord
reasonably deems to be standard for the Building. In addition,
in the event electricity is paid for by Tenant through
inclusion in Expenses, Tenant's use of electricity shall not
exceed use beyond Normal Business Hours. If Tenant requests
permission to consume excess
11
electrical service, Landlord may refuse to consent or may
condition consent upon conditions that Landlord reasonably
elects (including, without limitation, the installation of
utility service upgrades, meters, submeters, air handlers or
cooling units), and the additional usage (to the extent
permitted by Law), installation and maintenance costs shall be
paid by Tenant. Landlord shall have the right to separately
meter electrical usage for the Premises and to measure
electrical usage by survey or other commonly accepted methods.
XI. Entry by Landlord.
Landlord, its agents, contractors and representatives may enter the
Premises to inspect or show the Premises, to clean and make repairs, alterations
or additions to the Premises, and to conduct or facilitate repairs, alterations
or additions to any portion of the Building or the Project, including other
tenants' premises. Except in emergencies or to provide janitorial service (if
Landlord so elects in accordance with Article IX.A. above) and other services
after Normal Business Hours, Landlord shall provide Tenant with reasonable prior
notice of entry into the Premises, which may be given orally. If reasonably
necessary for the protection and safety of Tenant and its employees, Landlord
shall have the right to temporarily close all or a portion of the Premises to
perform repairs, alterations and additions. However, except in emergencies,
Landlord will not close the Premises if the work can reasonably be completed on
weekends and after Normal Business Hours. Entry by Landlord shall not constitute
constructive eviction or entitle Tenant to an abatement or reduction of Rent.
XII. Assignment and Subletting.
A. Except in connection with a Permitted Transfer (defined in
Section XII.E. below), Tenant shall not assign, sublease,
transfer or encumber any interest in this Lease or allow any
third party to use any portion of the Premises (collectively
or individually, a "Transfer") without the prior written
consent of Landlord, which consent shall not be unreasonably
withheld if Landlord does not elect to exercise its
termination rights under Section XII.B below. Without
limitation, it is agreed that Landlord's consent shall not be
considered unreasonably withheld if: (1) the proposed
transferee's financial condition does not meet the criteria
Landlord uses to select Project tenants having similar
leasehold obligations; (2) the proposed transferee's business
is not suitable for the Building or the Project considering
the business of the other tenants and the Project's prestige,
or would result in a violation of another tenant's rights; (3)
the proposed transferee is a governmental agency or then
existing occupant of the Project; (4) Tenant is in default
after the expiration of the notice and cure periods in this
Lease; or (5) any portion of the Building, Project or Premises
would likely become subject to additional or different Laws as
a consequence of the proposed Transfer. Notwithstanding the
foregoing, Landlord will not withhold its consent solely
because the proposed subtenant or assignee is a then existing
occupant of the Project if Landlord does not have space
available for lease in the Project that is comparable to the
space Tenant desires to sublet or assign. For purposes hereof,
Landlord shall be deemed to have comparable space if it has
space available anywhere in the Project that is approximately
the same size as the space Tenant desires to sublet or assign
within six (6) months of the proposed commencement of the
proposed sublease or assignment. Tenant shall not be entitled
to receive monetary damages based upon a claim that Landlord
unreasonably withheld its consent to a proposed Transfer and
Tenant's sole remedy shall be an action to enforce any such
provision through specific performance or declaratory
judgment. Any attempted Transfer in violation of this Article
shall, at Landlord's option, be void. Consent by Landlord to
one or more Transfer(s) shall not operate as a waiver of
Landlord's rights to approve any subsequent Transfers. In no
event shall any Transfer or Permitted Transfer release or
relieve Tenant from any obligation under this Lease.
B. As part of its request for Landlord's consent to a Transfer,
Tenant shall provide Landlord with financial statements for
the proposed transferee, a complete copy of the proposed
assignment, sublease and other contractual documents and such
other information as Landlord may reasonably request. Landlord
shall, by written notice to Tenant within 20 days of its
receipt of the required information and documentation, either:
(1) consent to the Transfer by the execution of a consent
agreement in a form reasonably designated by Landlord or
reasonably refuse to consent to the Transfer in writing; or
(2) in the case of an assignment of the Lease or a subletting
which would result in 50% or more of the Premises
12
(in the aggregate) being sublet for more than 75% of the then
remaining Term, exercise its right to terminate this Lease
with respect to the portion of the Premises that Tenant is
proposing to assign or sublet. Any such termination shall be
effective on the proposed effective date of the Transfer for
which Tenant requested consent. Tenant shall pay Landlord a
review fee of $750.00 for Landlord's review of any Permitted
Transfer or requested Transfer, provided if Landlord's actual
reasonable costs and expenses (including reasonable attorney's
fees) exceed $750.00, Tenant shall reimburse Landlord for its
actual reasonable costs and expenses in lieu of a fixed review
fee.
C. Tenant shall pay Landlord 50% of all rent and other
consideration which Tenant receives as a result of a Transfer
that is in excess of the Rent payable to Landlord for the
portion of the Premises and Term covered by the Transfer.
Tenant shall pay Landlord for Landlord's share of any excess
within 30 days after Tenant's receipt of such excess
consideration. Tenant may, on an amortized basis, deduct from
the excess all brokerage fees, construction costs and legal
fees directly incurred by Tenant and attributable solely to
the Transfer. If Tenant is in Monetary Default (defined in
Section XIX.A. below), Landlord may require that all sublease
payments be made directly to Landlord, in which case Tenant
shall receive a credit against Rent in the amount of any
payments received (less Landlord's share of any excess).
D. Except as provided below with respect to a Permitted Transfer,
if Tenant is a corporation, limited liability company,
partnership, or similar entity, and if the entity which owns
or controls a majority of the voting shares/rights at any time
changes for any reason (including but not limited to a merger,
consolidation or reorganization), such change of ownership or
control shall constitute a Transfer provided, however, that
none of the following shall constitute a Transfer, or be
considered in determining whether or not a change of control
has occurred: (i) any transfer of stock in a corporation that
is the Tenant if the stock of such corporation is publicly
held and traded through a recognized security exchange; and
(ii) if Tenant is a corporation, any initial public offering
of such stock. Additionally, the foregoing change of control
provisions shall not apply if at least 80% of its voting stock
is owned by another entity, the voting stock of which is
listed on a recognized security exchange.
E. Tenant may assign its entire interest under this Lease to a
successor to Tenant by purchase, merger, consolidation or
reorganization without the consent of Landlord, provided that
all of the following conditions are satisfied (a "Permitted
Transfer"): (1) Tenant is not in default under this Lease; (2)
Tenant's successor shall own all or substantially all of the
assets of Tenant; (3) Tenant's successor shall have a net
worth which is at least equal to the greater of Tenant's net
worth at the date of this Lease or Tenant's net worth as of
the day prior to the proposed purchase, merger, consolidation
or reorganization; (4) the Permitted Use does not allow the
Premises to be used for retail purposes; and (5) Tenant shall
give Landlord written notice at least 15 days prior to the
effective date of the proposed purchase, merger, consolidation
or reorganization. Tenant's notice to Landlord shall include
information and documentation showing that each of the above
conditions has been satisfied. If requested by Landlord,
Tenant's successor shall sign a commercially reasonable form
of assumption agreement.
XIII. Liens.
Tenant shall not permit mechanic's or other liens to be placed upon the
Project, Property, Premises or Tenant's leasehold interest in connection with
any work or service done or purportedly done by or for benefit of Tenant. If a
lien is so placed, Tenant shall, within 10 days of notice from Landlord of the
filing of the lien, fully discharge the lien by settling the claim which
resulted in the lien or by bonding or insuring over the lien in the manner
prescribed by the applicable lien Law. If Tenant fails to discharge the lien,
then, in addition to any other right or remedy of Landlord, Landlord may bond or
insure over the lien or otherwise discharge the lien. Tenant shall reimburse
Landlord for any amount paid by Landlord to bond or insure over the lien or
discharge the lien, including, without limitation, reasonable attorneys' fees
(if and to the extent permitted by Law) within 30 days after receipt of an
invoice from Landlord.
13
XIV. Indemnity and Waiver of Claims.
A. Except to the extent caused by the negligence or willful
misconduct of Landlord or any Landlord Related Parties
(defined below), Tenant shall indemnify, defend and hold
Landlord, its trustees, members, principals, beneficiaries,
partners, officers, directors, employees, Mortgagee(s)
(defined in Article XXVI) and agents ("Landlord Related
Parties") harmless against and from all liabilities,
obligations, damages, penalties, claims, actions, costs,
charges and expenses, including, without limitation,
reasonable attorneys' fees and other professional fees (if and
to the extent permitted by Law), which may be imposed upon,
incurred by or asserted against Landlord or any of the
Landlord Related Parties and arising out of or in connection
with any damage or injury occurring in the Premises or any
acts or omissions (including violations of Law) of Tenant, the
Tenant Related Parties (defined below) or any of Tenant's
transferees, contractors or licensees.
B. Except to the extent caused by the negligence or willful
misconduct of Tenant or any Tenant Related Parties (defined
below), Landlord shall indemnify, defend and hold Tenant, its
trustees, members, principals, beneficiaries, partners,
officers, directors, employees and agents ("Tenant Related
Parties") harmless against and from all liabilities,
obligations, damages, penalties, claims, actions, costs,
charges and expenses, including, without limitation,
reasonable attorneys fees and other professional fees (if and
to the extent permitted by Law), which may be imposed upon,
incurred by or asserted against Tenant or any of the Tenant
Related Parties and arising out of or in connection with the
acts or omissions (including violations of Law) of Landlord,
the Landlord Related Parties or any of Landlord's contractors.
C. Landlord and the Landlord Related Parties shall not be liable
for, and Tenant waives, all claims for loss or damage to
Tenant's business or loss, theft or damage to Tenant's
Property or the property of any person claiming by, through or
under Tenant resulting from: (1) wind or weather; (2) the
failure of any sprinkler, heating or air-conditioning
equipment, any electric wiring or any gas, water or steam
pipes; (3) the backing up of any sewer pipe or downspout; (4)
the bursting, leaking or running of any tank, water closet,
drain or other pipe; (5) water, snow or ice upon or coming
through the roof, skylight, stairs, doorways, windows, walks
or any other place upon or near the Building or the Project;
(6) any act or omission of any party other than Landlord or
Landlord Related Parties; and (7) any causes not reasonably
within the control of Landlord. Tenant shall insure itself
against such losses under Article XV below.
XV. Insurance.
Tenant shall carry and maintain the following insurance ("Tenant's
Insurance"), at its sole cost and expense: (1) Commercial General Liability
Insurance applicable to the Premises and its appurtenances providing, on an
occurrence basis, a minimum combined single limit of $3,000,000.00; (2) All Risk
Property/Business Interruption Insurance, including flood and earthquake,
written at replacement cost value and with a replacement cost endorsement
covering all of Tenant's trade fixtures, equipment, furniture and other personal
property within the Premises ("Tenant's Property"); (3) Workers' Compensation
Insurance as required by the state in which the Premises is located and in
amounts as may be required by applicable statute; and (4) Employers Liability
Coverage of at least $1,000,000.00 per occurrence. Any company writing any of
Tenant's Insurance shall have an A.M. Best rating of not less than A-VIII. All
Commercial General Liability Insurance policies shall name Tenant as a named
insured and Landlord (or any successor), Equity Office Properties Trust, a
Maryland real estate investment trust, EOP Operating Limited Partnership, a
Delaware limited partnership, and their respective members, principals,
beneficiaries, partners, officers, directors, employees, and agents, and other
designees of Landlord as the interest of such designees shall appear, as
additional insureds. All policies of Tenant's Insurance shall contain
endorsements that the insurer(s) shall give Landlord and its designees at least
30 days' advance written notice of any change, cancellation, termination or
lapse of insurance. Tenant shall provide Landlord with a certificate of
insurance evidencing Tenant's Insurance prior to the earlier to occur of the
Commencement Date or the date Tenant is provided with possession of the Premises
for any reason, and upon renewals at least 15 days prior to the expiration of
the insurance coverage. Landlord shall maintain so called All Risk property
insurance on the Building in an amount equal to 90% of the replacement cost
thereof, as reasonably estimated by Landlord. Except as specifically provided to
the contrary, the limits of either party's' insurance shall not limit such
party's liability under this Lease.
14
XVI. Subrogation.
Notwithstanding anything in this Lease to the contrary, Landlord and
Tenant hereby waive and shall cause their respective insurance carriers to waive
any and all rights of recovery, claim, action or causes of action against the
other and their respective trustees, principals, beneficiaries, partners,
officers, directors, agents, and employees, for any loss or damage that may
occur to Landlord or Tenant or any party claiming by, through or under Landlord
or Tenant, as the case may be, with respect to Tenant's Property, the Project,
the Building, the Premises, any additions or improvements to the Project,
Building or Premises, or any contents thereof, including all rights of recovery,
claims, actions or causes of action arising out of the negligence of Landlord or
any Landlord Related Parties or the negligence of Tenant or any Tenant Related
Parties, which loss or damage is (or would have been, had the insurance required
by this Lease been carried) covered by insurance.
XVII. Casualty Damage.
A. If all or any part of the Premises is damaged by fire or other
casualty, Tenant shall immediately notify Landlord in writing.
During any period of time that all or a material portion of
the Premises is rendered untenantable as a result of a fire or
other casualty, the Rent shall ▇▇▇▇▇ for the portion of the
Premises that is untenantable and not used by Tenant. Landlord
shall have the right to terminate this Lease if: (1) the
Building or the Project shall be damaged so that, in
Landlord's reasonable judgment, substantial alteration or
reconstruction of the Building or the Project shall be
required (whether or not the Premises has been damaged); (2)
Landlord is not permitted by Law to rebuild the Building or
the Project in substantially the same form as existed before
the fire or casualty; (3) the Premises have been materially
damaged and there is less than 2 years of the Term remaining
on the date of the casualty; (4) any Mortgagee requires that
the insurance proceeds be applied to the payment of the
mortgage debt; or (5) a material uninsured loss to the
Building or the Project occurs. Landlord may exercise its
right to terminate this Lease by notifying Tenant in writing
within 90 days after the date of the casualty. If Landlord
does not terminate this Lease, Landlord shall promptly
commence and proceed with reasonable diligence to repair and
restore the Building and the Leasehold Improvements (excluding
any Alterations that were performed by Tenant in violation of
this Lease). However, in no event shall Landlord be required
to spend more than the insurance proceeds received by
Landlord. Landlord shall not be liable for any loss or damage
to Tenant's Property or to the business of Tenant resulting in
any way from the fire or other casualty or from the repair and
restoration of the damage. Landlord and Tenant hereby waive
the provisions of any Law relating to the matters addressed in
this Article, and agree that their respective rights for
damage to or destruction of the Premises shall be those
specifically provided in this Lease.
B. If all or any portion of the Premises shall be made
untenantable by fire or other casualty, Landlord shall, with
reasonable promptness, cause an architect or general
contractor selected by Landlord to provide Landlord and Tenant
with a written estimate of the amount of time required to
substantially complete the repair and restoration of the
Premises and make the Premises tenantable again, using
standard working methods ("Completion Estimate"). If the
Completion Estimate indicates that the Premises cannot be made
tenantable within 210 days from the date the repair and
restoration is started, then regardless of anything in Section
XVII.A above to the contrary, either party shall have the
right to terminate this Lease by giving written notice to the
other of such election within 10 days after receipt of the
Completion Estimate. Tenant, however, shall not have the right
to terminate this Lease if the fire or casualty was caused by
the negligence or intentional misconduct of Tenant, Tenant
Related Parties or any of Tenant's transferees, contractors or
licensees.
XVIII. Condemnation.
Either party may terminate this Lease if the whole or any material part
of the Premises shall be taken or condemned for any public or quasi-public use
under Law, by eminent domain or private purchase in lieu thereof (a "Taking").
Landlord shall also have the right to terminate this Lease if there is a Taking
of any portion of the Building, Property or Project which would leave the
remainder of the Building or the Project unsuitable for use as an office
building or an
15
office park, as the case may be, in a manner comparable to the use of the
Building and/or Project prior to the Taking. In order to exercise its right to
terminate the Lease, Landlord or Tenant, as the case may be, must provide
written notice of termination to the other within 45 days after the terminating
party first receives notice of the Taking. Any such termination shall be
effective as of the date the physical taking of the Premises or the portion of
the Project, Building or Property occurs. If this Lease is not terminated, the
Rentable Square Footage of the Building, the Rentable Square Footage of the
Premises, the Rentable Square Footage of the Project and Tenant's Pro Rata Share
shall, if applicable, be appropriately adjusted. In addition, Rent for any
portion of the Premises taken or condemned shall be abated during the unexpired
Term of this Lease effective when the physical taking of the portion of the
Premises occurs. All compensation awarded for a Taking, or sale proceeds, shall
be the property of Landlord, any right to receive compensation or proceeds being
expressly waived by Tenant. However, Tenant may file a separate claim at its
sole cost and expense for Tenant's Property and Tenant's reasonable relocation
expenses, provided the filing of the claim does not diminish the award which
would otherwise be receivable by Landlord.
XIX. Events of Default.
Tenant shall be considered to be in default of this Lease upon the
occurrence of any of the following events of default:
A. Tenant's failure to pay when due all or any portion of the
Rent, if the failure continues for 3 days after written notice
to Tenant ("Monetary Default").
B. Tenant's failure (other than a Monetary Default) to comply
with any term, provision or covenant of this Lease, if the
failure is not cured within 30 days after written notice to
Tenant. However, if Tenant's failure to comply cannot
reasonably be cured within 30 days, Tenant shall be allowed
additional time (not to exceed 60 days, subject to extension
due to Force Majeure) as is reasonably necessary to cure the
failure so long as: (1) Tenant commences to cure the failure
within 30 days, and (2) Tenant diligently pursues a course of
action that will cure the failure and bring Tenant back into
compliance with the Lease. However, if Tenant's failure to
comply creates a hazardous condition, the failure must be
cured immediately upon notice to Tenant. In addition, if
Landlord provides Tenant with notice of Tenant's failure to
comply with any particular term, provision or covenant of the
Lease on 3 occasions during any 12 month period, Tenant's
subsequent violation of such term, provision or covenant
shall, at Landlord's option, be an incurable event of default
by Tenant.
C. Tenant or any Guarantor becomes insolvent, makes a transfer in
fraud of creditors or makes an assignment for the benefit of
creditors, or admits in writing its inability to pay its debts
when due.
D. The leasehold estate is taken by process or operation of Law.
E Tenant is in default beyond any notice and cure period under
any other lease or agreement with Landlord at the Project,
including, without limitation, any lease or agreement for
parking.
XX. Remedies.
A. Upon the occurrence of any event or events of default under
this Lease, whether enumerated in Article XIX or not, Landlord
shall have the option to pursue any one or more of the
following remedies without any notice (except as expressly
prescribed herein) or demand whatsoever (and without limiting
the generality of the foregoing, Tenant hereby specifically
waives notice and demand for payment of Rent or other
obligations and waives any and all other notices or demand
requirements imposed by applicable law, provided that any
notice of default given pursuant to this Lease complies with
the requirements specified in California Civil Code Section
1161 et. seq.):
1. Terminate this Lease and Tenant's right to possession
of the Premises and recover from Tenant an award of
damages equal to the sum of the following:
(a) The Worth at the Time of Award of the unpaid
Rent which had been earned at the time of
termination;
16
(b) The Worth at the Time of Award of the amount
by which the unpaid Rent which would have
been earned after termination until the time
of award exceeds the amount of such Rent
loss that Tenant affirmatively proves could
have been reasonably avoided;
(c) The Worth at the Time of Award of the amount
by which the unpaid Rent for the balance of
the Term after the time of award exceeds the
amount of such Rent loss that Tenant
affirmatively proves could be reasonably
avoided;
(d) Any other amount necessary to compensate
Landlord for all the detriment either
proximately caused by Tenant's failure to
perform Tenant's obligations under this
Lease or which in the ordinary course of
things would be likely to result therefrom;
and
(e) All such other amounts in addition to or in
lieu of the foregoing as may be permitted
from time to time under applicable law.
The "Worth at the Time of Award" of the amounts
referred to in parts (a) and (b) above, shall be
computed by allowing interest at the lesser of a per
annum rate equal to: (i) the greatest per annum rate
of interest permitted from time to time under
applicable law, or (ii) the Prime Rate plus four
percent (4%). For purposes hereof, the "Prime Rate"
shall be the per annum interest rate publicly
announced as its prime or base rate by a federally
insured bank selected by Landlord in the State of
California. The "Worth at the Time of Award" of the
amount referred to in part (c), above, shall be
computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%);
2. Employ the remedy described in California Civil Code
ss. 1951.4 (Landlord may continue this Lease in
effect after Tenant's breach and abandonment and
recover Rent as it becomes due, if Tenant has the
right to sublet or assign, subject only to reasonable
limitations); or
3. Notwithstanding Landlord's exercise of the remedy
described in California Civil Code ss. 1951.4 in
respect of an event or events of default, at such
time thereafter as Landlord may elect in writing, to
terminate this Lease and Tenant's right to possession
of the Premises and recover an award of damages as
provided above in Paragraph XX.A.1.
B. The subsequent acceptance of Rent hereunder by Landlord shall
not be deemed to be a waiver of any preceding breach by Tenant
of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular Rent so accepted,
regardless of Landlord's knowledge of such preceding breach at
the time of acceptance of such Rent. No waiver by Landlord of
any breach hereof shall be effective unless such waiver is in
writing and signed by Landlord.
C. TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION
3275 OF THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (c)
AND 1179 OF THE CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY
AND ALL OTHER LAWS AND RULES OF LAW FROM TIME TO TIME IN
EFFECT DURING THE LEASE TERM PROVIDING THAT TENANT SHALL HAVE
ANY RIGHT TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING
ITS TERMINATION BY REASON OF TENANT'S BREACH. TENANT ALSO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR
RELATING TO THIS LEASE.
D. No right or remedy herein conferred upon or reserved to
Landlord is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given
hereunder or now or hereafter existing by agreement,
applicable law or in equity. In addition to other remedies
provided in this Lease, Landlord shall be entitled, to the
extent permitted by applicable law, to injunctive relief, or
to a decree compelling performance of any of the covenants,
agreements, conditions or provisions of this Lease, or to any
other remedy allowed to Landlord at law or in
17
equity. Forbearance by Landlord to enforce one or more of the
remedies herein provided upon an event of default shall not be
deemed or construed to constitute a waiver of such default.
E. This Article XX shall be enforceable to the maximum extent
such enforcement is not prohibited by applicable law, and the
unenforceability of any portion thereof shall not thereby
render unenforceable any other portion.
XXI. Limitation of Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) TO TENANT SHALL BE LIMITED
TO THE INTEREST OF LANDLORD IN THE PROJECT. TENANT SHALL LOOK SOLELY TO
LANDLORD'S INTEREST IN THE PROJECT FOR THE RECOVERY OF ANY JUDGMENT OR AWARD
AGAINST LANDLORD. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE
PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY. BEFORE FILING SUIT FOR AN
ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S)
(DEFINED IN ARTICLE XXVI BELOW) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES
(DEFINED IN ARTICLE XXVI BELOW) ON THE PROJECT, PROPERTY, BUILDING OR PREMISES,
NOTICE AND COMMERCIALLY REASONABLE TIME TO CURE THE ALLEGED DEFAULT. LANDLORD
AGREES TO USE GOOD FAITH, COMMERCIALLY REASONABLE EFFORTS TO COMMENCE TO CURE A
FAILURE BY LANDLORD TO COMPLY WITH THE TERMS OF THIS LEASE WITHIN 30 DAYS AFTER
LANDLORD'S RECEIPT OF NOTIFICATION OF SUCH FAILURE FROM TENANT.
XXII. No Waiver.
Either party's failure to declare a default immediately upon its
occurrence, or delay in taking action for a default shall not constitute a
waiver of the default, nor shall it constitute an estoppel. Either party's
failure to enforce its rights for a default shall not constitute a waiver of its
rights regarding any subsequent default. Receipt by Landlord of Tenant's keys to
the Premises shall not constitute an acceptance or surrender of the Premises.
XXIII. Quiet Enjoyment
Tenant shall, and may peacefully have, hold and enjoy the Premises,
subject to the terms of this Lease, provided Tenant pays the Rent and fully
performs all of its covenants and agreements. This covenant and all other
covenants of Landlord shall be binding upon Landlord and its successors only
during its or their respective periods of ownership of the Building, and shall
not be a personal covenant of Landlord or the Landlord Related Parties.
XXIV. Relocation.
INTENTIONALLY OMITTED.
XXV. Holding Over.
Except for any permitted occupancy by Tenant under Article VIII, if
Tenant fails to surrender the Premises at the expiration or earlier termination
of this Lease, occupancy of the Premises after the termination or expiration
shall be that of a tenancy at sufferance. Tenant's occupancy of the Premises
during the holdover shall be subject to all the terms and provisions of this
Lease and Tenant shall pay an amount (on a per month basis without reduction for
partial months during the holdover) equal to 150% of the greater of: (1) the sum
of the Base Rent and Additional Rent due for the period immediately preceding
the holdover; or (2) the fair market gross rental for the Premises as reasonably
determined by Landlord. No holdover by Tenant or payment by Tenant after the
expiration or early termination of this Lease shall be construed to extend the
Term or prevent Landlord from immediate recovery of possession of the Premises
by summary proceedings or otherwise. In addition to the payment of the amounts
provided above, if Landlord is unable to deliver possession of the Premises to a
new tenant, or to perform improvements for a new tenant, as a result of Tenant's
holdover and Tenant fails to vacate the Premises within 15 days after Landlord
notifies Tenant of Landlord's inability to deliver possession, or perform
improvements, Tenant shall be liable to Landlord for all damages, including,
without limitation, consequential damages, that Landlord suffers from the
holdover.
18
XXVI. Subordination to Mortgages; Estoppel Certificate.
Tenant accepts this Lease subject and subordinate to any mortgage(s),
deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising
upon the Premises, the Building or the Property or the Project, and to renewals,
modifications, refinancings and extensions thereof (collectively referred to as
a "Mortgage"). The party having the benefit of a Mortgage shall be referred to
as a "Mortgagee". This clause shall be self-operative, but upon request from a
Mortgagee, Tenant shall execute a commercially reasonable subordination
agreement in favor of the Mortgagee. In lieu of having the Mortgage be superior
to this Lease, a Mortgagee shall have the right at any time to subordinate its
Mortgage to this Lease. If requested by a successor-in-interest to all or a part
of Landlord's interest in the Lease, Tenant shall, without charge, attom to the
successor-in-interest. Landlord and Tenant shall each, within 10 days after
receipt of a written request from the other, execute and deliver an estoppel
certificate to those parties as are reasonably requested by the other (including
a Mortgagee or prospective purchaser). The estoppel certificate shall include a
statement certifying that this Lease is unmodified (except as identified in the
estoppel certificate) and in full force and effect, describing the dates to
which Rent and other charges have been paid, representing that, to such party's
actual knowledge, there is no default (or stating the nature of the alleged
default) and indicating other matters with respect to the Lease that may
reasonably be requested. Notwithstanding the foregoing, as a condition precedent
to the subordination of this Lease, Landlord shall be required to provide Tenant
with a non-disturbance, subordination and attornment agreement in favor of
Tenant from any Mortgagee who comes into existence after the Commencement Date.
Such non-disturbance, subordination and attornment agreement in favor of Tenant
shall provide that, so long as Tenant is paying the rent due under the Lease and
is not otherwise in default under the Lease, its right to possession and other
terms of the Lease shall remain in full force and effect. Such non-disturbance,
subordination and attornment agreement may include additional time on behalf of
the Mortgagee to cure defaults of the Landlord and provide that (a) neither
Mortgagee nor any successor-in-interest shall be bound by (i) any payment of the
Base Rent, Additional Rent, or other sum due hereunder for more than 1 month in
advance or (ii) any amendment or modification to the Lease made without the
express written consent of Mortgagee or any successor-in-interest; (b) neither
Mortgagee nor any successor-in-interest will be liable for (i) any act or
omission or warranties of any prior landlord (including Landlord), (ii) the
breach of any warranties or obligations relating to construction of improvements
on the property or any tenant finish work performed or to have been performed by
any prior landlord (including Landlord), or (iii) the return of any security
deposit, except to the extent such deposits have been received by Mortgagee; and
(c) neither Mortgagee nor any successor-in-interest shall be subject to any
offsets or defenses which Tenant might have against any prior landlord
(including Landlord).
XXVII. Attorneys' Fees.
If either party institutes a suit against the other for violation of or
to enforce any covenant or condition of this Lease, or if either party
intervenes in any suit in which the other is a party to enforce or protect its
interest or rights, the prevailing party shall be entitled to all of its costs
and expenses, including, without limitation, reasonable attorneys' fees.
XXVIII. Notice.
If a demand, request, approval, consent or notice (collectively
referred to as a "notice") shall or may be given to either party by the other,
the notice shall be in writing and delivered by hand or sent by registered or
certified mail with return receipt requested, or sent by overnight or same day
courier service at the party's respective Notice Address(es) set forth in
Article I, except that if Tenant has vacated the Premises (or if the Notice
Address for Tenant is other than the Premises, and Tenant has vacated such
address) without providing Landlord a new Notice Address, Landlord may serve
notice in any manner described in this Article or in any other manner permitted
by Law. Each notice shall be deemed to have been received or given on the
earlier to occur of actual delivery or the date on which delivery is refused,
or, if Tenant has vacated the Premises or the other Notice Address of Tenant
without providing a new Notice Address, three (3) days after notice is deposited
in the U.S. mail or with a courier service in the manner described above. Either
party may, at any time, change its Notice Address by giving the other party
written notice of the new address in the manner described in this Article.
XXIX. Excepted Rights.
This Lease does not grant any rights to light or air over or about the
Building or the Project. Landlord excepts and reserves exclusively to itself the
use of: (1) roofs, (2) telephone, electrical and janitorial closets, (3)
equipment rooms, Building risers or similar areas, (4) rights
19
to the land and improvements below the floor of the Premises, (5) the
improvements and air rights above the Premises and the Project, (6) the
improvements and air rights outside the demising walls of the Premises, and (7)
the areas within the Premises used for the installation of utility lines and
other installations serving occupants of the Building and/or the Project.
Landlord has the right to change the name or address of the Building and/or the
Project. Landlord also has the right to make such other changes to the Project,
Property and Building as Landlord deems appropriate, provided the changes do not
materially affect Tenant's ability to use the Premises for the Permitted Use.
Landlord shall also have the right (but not the obligation) to temporarily close
the Building and/or the Project if Landlord reasonably determines that there is
an imminent danger of significant damage to the Building or the Project or of
personal injury to Landlord's employees or the occupants of the Building and/or
the Project. The circumstances under which Landlord may temporarily close the
Building and/or the Project shall include, without limitation, electrical
interruptions, hurricanes and civil disturbances. A closure of the Building
and/or the Project under such circumstances shall not constitute a constructive
eviction nor entitle Tenant to an abatement or reduction of Rent.
XXX. Surrender of Premises.
At the expiration or earlier termination of this Lease or Tenant's
right of possession, Tenant shall remove Tenant's Property (defined in Article
XV) from the Premises, and quit and surrender the Premises to Landlord, broom
clean, and in good order, condition and repair, ordinary wear and tear excepted.
Tenant shall also be required to remove the Required Removables in accordance
with Article VIII. If Tenant fails to remove any of Tenant's Property within 2
days after the termination of this Lease or of Tenant's right to possession,
Landlord, at Tenant's sole cost and expense, shall be entitled (but not
obligated) to remove and store Tenant's Property. Landlord shall not be
responsible for the value, preservation or safekeeping of Tenant's Property.
Tenant shall pay Landlord, upon demand, the expenses and storage charges
incurred for Tenant's Property. In addition, if Tenant fails to remove Tenant's
Property from the Premises or storage, as the case may be, within 30 days after
written notice, Landlord may deem all or any part of Tenant's Property to be
abandoned, and title to Tenant's Property shall be deemed to be immediately
vested in Landlord.
XXXI. Miscellaneous.
A. This Lease and the rights and obligations of the parties shall
be interpreted, construed and enforced in accordance with the
Laws of the State of California and Landlord and Tenant hereby
irrevocably consent to the jurisdiction and proper venue of
such state. If any term or provision of this Lease shall to
any extent be invalid or unenforceable, the remainder of this
Lease shall not be affected, and each provision of this Lease
shall be valid and enforced to the fullest extent permitted by
Law. The headings and titles to the Articles and Sections of
this Lease are for convenience only and shall have no effect
on the interpretation of any part of the Lease.
B. Tenant shall not record this Lease or any memorandum without
Landlord's prior written consent.
C. Landlord and Tenant hereby waive any right to trial by jury in
any eviction or forcible entry and detainer action or similar
proceeding based upon, or related to, the subject matter of
this Lease.
D. Whenever a period of time is prescribed for the taking of an
action by Landlord or Tenant, the period of time for the
performance of such action shall be extended by the number of
days that the performance is actually delayed due to strikes,
acts of God, shortages of labor or materials, war, civil
disturbances and other causes beyond the reasonable control of
the performing party ("Force Majeure"). However, events of
Force Majeure shall not extend any period of time for the
payment of Rent or other sums payable by either party or any
period of time for the written exercise of an option or right
by either party.
E. Landlord shall have the right to transfer and assign, in whole
or in part, all of its rights and obligations under this Lease
and in the Project, Building and/or Property referred to
herein, and upon such transfer Landlord shall be released from
any further obligations hereunder, and Tenant agrees to look
solely to the successor in interest of Landlord for the
performance of such obligations. Notwithstanding the
foregoing, unless such liability is assumed in writing by its
successor in interest hereunder, Landlord shall remain liable
after its period of
20
ownership with respect to any sums due in connection with a
breach or default that arose during such period of ownership.
F. Tenant represents that it has dealt directly with and only
with the Broker as a broker in connection with this Lease.
Tenant shall indemnify and hold Landlord and the Landlord
Related Parties harmless from all claims of any other brokers
claiming to have represented Tenant in connection with this
Lease. Landlord agrees to indemnify and hold Tenant and the
Tenant Related Parties harmless from all claims of any brokers
claiming to have represented Landlord in connection with this
Lease.
G. Tenant covenants, warrants and represents that: (1) each
individual executing, attesting and/or delivering this Lease
on behalf of Tenant is authorized to do so on behalf of
Tenant; (2) this Lease is binding upon Tenant; and (3) Tenant
is duly organized and legally existing in the state of its
organization and is qualified to do business in the State of
California. If there is more than one Tenant, or if Tenant is
comprised of more than one party or entity, the obligations
imposed upon Tenant shall be joint and several obligations of
all the parties and entities. Notices, payments and agreements
given or made by, with or to any one person or entity shall be
deemed to have been given or made by, with and to all of them.
H. Time is of the essence with respect to Tenant's exercise of
any expansion, renewal or extension rights granted to Tenant.
This Lease shall create only the relationship of landlord and
tenant between the parties, and not a partnership, joint
venture or any other relationship. This Lease and the
covenants and conditions in this Lease shall inure only to the
benefit of and be binding only upon Landlord and Tenant and
their permitted successors and assigns.
I. The expiration of the Term, whether by lapse of time or
otherwise, shall not relieve either party of any obligations
which accrued prior to or which may continue to accrue after
the expiration or early termination of this Lease. Without
limiting the scope of the prior sentence, it is agreed that
Tenant's obligations under Articles IV, VIIl, XIV, XX, XXV and
XXX shall survive the expiration or early termination of this
Lease.
J. Landlord has delivered a copy of this Lease to Tenant for
Tenant's review only, and the delivery of it does not
constitute an offer to Tenant or an option. This Lease shall
not be effective against any party hereto until an original
copy of this Lease has been signed by such party.
K. All understandings and agreements previously made between the
parties are superseded by this Lease, and neither party is
relying upon any warranty, statement or representation not
contained in this Lease. This Lease may be modified only by a
written agreement signed by Landlord and Tenant.
L. Tenant, within 15 days after request, shall provide Landlord
with a current financial statement and such other information
as Landlord may reasonably request in order to create a
"business profile" of Tenant and determine Tenant's ability to
fulfill its obligations under this Lease. Landlord, however,
shall not require Tenant to provide such information unless
Landlord is requested to produce the information in connection
with a proposed financing or sale of the Building. Upon
written request by Tenant, Landlord shall enter into a
commercially reasonable confidentiality agreement covering any
confidential information that is disclosed by Tenant.
M. This Lease shall be subject to the terms and conditions of (a)
Declaration Of Covenants, Conditions And Restrictions Of
Shoreline Technology Park ("Declaration") imposing certain
covenants, conditions and restrictions on the use and
management of Shoreline Technology Park, (b) all applicable
Laws, (c) the Bylaws ("Bylaws") and Articles of Incorporation
("Articles") of any association ("Association") now or
hereafter created and charged with the responsibility of
managing Shoreline Technology Park in accordance with the
Declaration, and (d) the rules ("Rules") adopted from time to
time by the Association in accordance with the Declaration
providing for restrictions on the use of Shoreline Technology
Park. Any failure to comply with the Governing Documents shall
be a default under the terms of this Lease.
21
XXXlI. Entire Agreement.
This Lease and the following exhibits and attachments constitute the
entire agreement between the parties and supersede all prior agreements and
understandings related to the Premises, including all lease proposals, letters
of intent and other documents: Exhibit A-I (Outline and Location of Premises),
Exhibit A-2 (Outline and Location of Project), Exhibit A-3 (Outline and Location
of Recreational Area), Exhibit B (Rules and Regulations), Exhibit C
(Commencement Letter), Exhibit D (Work Letter Agreement), Exhibit E (Additional
Provisions), Exhibit F (Parking Agreement) and Exhibit G (Form of Letter of
Credit).
Landlord and Tenant have executed this Lease as of the day and year
first above written.
LANDLORD:
EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company
By: EOP Operating Limited Partnership,
a Delaware limited partnership, its sole member
By: Equity Office Properties Trust, a Maryland
real estate investment rust, its managing
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: Senior Vice President
---------------------------
TENANT:
COMMTOUCH SOFTWARE, INC., a California
corporation
By: /s/ ▇▇▇▇▇ ▇. ???????
------------------------------
Name: ▇▇▇▇▇ ▇. ???????
----------------------------
Title: Chief Financial Officer
---------------------------
By: /s/ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: Chief Financial Officer
---------------------------
22
EXHIBIT A-1
OUTLINE AND LOCATION OF PREMISES
This Exhibit is attached to and made a part of the Lease dated as of
1999, by and between EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a Delaware limited
liability company ("Landlord") and COMMTOUCH SOFTWARE, INC., a California
corporation ("Tenant") for space in the Building located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. EXHIBIT A-2
[Graphic Omitted]
EXHIBIT A-2
OUTLINE AND LOCATION OF PROJECT
This Exhibit is attached to and made a part of the Lease dated as of
October 28, 1999, by and between EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company ("Landlord") and COMMTOUCH SOFTWARE, INC., a
California corporation ("Tenant") for space in the Building located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
[Graphic Omitted]
2
EXHIBIT A-3
OUTLINE AND LOCATION OF RECREATIONAL AREA
This Exhibit is attached to and made a part of the Lease dated as of
October 28, 1999, by and between EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company ("Landlord") and COMMTOUCH SOFTWARE, INC., a
California corporation ("Tenant") for space in the Building located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
[Graphic Omitted]
3
EXHIBIT B
PROJECT RULES AND REGULATIONS
The following rules and regulations shall apply, where applicable, to
the Premises, the Building, the parking garage (if any), the Property, the
Project and the appurtenances. Capitalized terms have the same meaning as
defined in the Lease.
1. Sidewalks, doorways, vestibules, halls, stairways and other similar
areas shall not be obstructed by Tenant or used by Tenant for any
purpose other than ingress and egress to and from the Premises. No
rubbish, litter, trash, or material shall be placed, emptied, or thrown
in those areas. At no time shall Tenant permit Tenant's employees to
loiter in Common Areas or elsewhere about the Building, Property or
Project.
2. Plumbing fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable
material shall be thrown or placed in the fixtures or appliances.
Damage resulting to fixtures or appliances by Tenant, its agents,
employees or invitees, shall be paid for by Tenant, and Landlord shall
not be responsible for the damage.
3. No signs, advertisements or notices shall be painted or affixed to
windows, doors or other parts of the Building or the Project, except
those of such color, size, style and in such places as are first
approved in writing by Landlord. Except in connection with the hanging
of lightweight pictures and wall decorations, no nails, hooks or screws
shall be inserted into any part of the Premises, Building or Project
except by Landlord's maintenance personnel.
4. No directory listing tenants or employees shall be permitted unless
previously consented to by Landlord in writing.
5. Tenant shall not place any lock(s) on any door in the Premises,
Building or Project without Landlord's prior written consent and
Landlord shall have the right to retain at all times and to use keys to
all locks within and into the Premises. A reasonable number of keys to
the locks on the entry doors in the Premises shall be furnished by
Landlord to Tenant at Tenant's cost, and Tenant shall not make any
duplicate keys. All keys shall be returned to Landlord at the
expiration or early termination of this Lease.
6. All contractors, contractor's representatives and installation
technicians performing work in the Building and/or the Project shall be
subject to Landlord's prior approval and shall be required to comply
with Landlord's standard rules, regulations, policies and procedures,
which may be revised from time to time.
7. Movement in or out of the Building or the Project of furniture or
office equipment, or dispatch or receipt by Tenant of merchandise or
materials requiring the use of elevators, stairways, lobby areas or
loading dock areas, shall be restricted to hours designated by
Landlord. Tenant shall obtain Landlord's prior approval by providing a
detailed listing of the activity. If approved by Landlord, the activity
shall be under the supervision of Landlord and performed in the manner
required by Landlord. Tenant shall assume all risk for damage to
articles moved and injury to any persons resulting from the activity.
If equipment, property, or personnel of Landlord or of any other party
is damaged or injured as a result of or in connection with the
activity, Tenant shall be solely liable for any resulting damage or
loss.
8. Landlord shall have the right to approve the weight, size, or location
of heavy equipment or articles in and about the Premises. Damage to the
Building and/or Project by the installation, maintenance, operation,
existence or removal of Tenant's Property shall be repaired at Tenant's
sole expense.
9. Corridor doors, when not in use, shall be kept closed.
10. Tenant shall not: (1) make or permit any improper, objectionable or
unpleasant noises or odors in the Building or Project, or otherwise
interfere in any way with other tenants or persons having business with
them; (2) solicit business or distribute, or cause to be distributed,
in any portion of the Building or Project, handbills, promotional
materials or other advertising; or (3) conduct or permit other
activities in the Building or Project that might, in Landlord's sole
opinion, constitute a nuisance.
11. No animals, except those assisting handicapped persons, and no
aquariums shall be brought into the Building or the Project or kept in
or about the Premises.
12. No inflammable, explosive or dangerous fluids or substances shall be
used or kept by Tenant in the Premises, Building, Project or about the
Property. Tenant shall not, without Landlord's prior written consent,
use, store, install, spill, remove, release or dispose of, within or
about the Premises or any other portion of the Property or Project, any
asbestos-containing materials or any solid, liquid or gaseous material
now or subsequently considered toxic or hazardous under the provisions
of 42 U.S.C. Section 9601 et seq. or any other applicable environmental
Law which may now or later be in effect. Tenant shall comply with all
Laws pertaining to and governing the use of these materials by Tenant,
and shall remain solely liable for the costs of abatement and removal.
13. Tenant shall not use or occupy the Premises in any manner or for any
purpose which might injure the reputation or impair the present or
future value of the Premises, the Building or the Project. Tenant shall
not use, or permit any part of the Premises to be used, for lodging,
sleeping or for any illegal purpose.
14. Tenant shall not take any action which would violate Landlord's labor
contracts or which would cause a work stoppage, picketing, labor
disruption or dispute, or interfere with Landlord's or any other
tenant's or occupant's business or with the rights and privileges of
any person lawfully in the Building and/or the Project ("Labor
Disruption"). Tenant shall take the actions necessary to resolve the
Labor Disruption, and shall have pickets removed and, at the request of
Landlord, immediately terminate any work in the Premises that gave rise
to the Labor Disruption, until Landlord gives its written consent for
the work to resume. Tenant shall have no claim for damages against
Landlord or any of the Landlord Related Parties, nor shall the
Commencement Date of the Term be extended as a result of the above
actions.
15. Tenant shall not install, operate or maintain in the Premises or in any
other area of the Building or the Project, electrical equipment that
would overload the electrical system beyond its capacity for proper,
efficient and safe operation as determined solely by Landlord. Tenant
shall not furnish cooling or heating to the Premises, including,
without limitation, the use of electronic or gas heating devices,
without Landlord's prior written consent. Tenant shall not use more
than its proportionate share of telephone lines and other
telecommunication facilities available to service the Building and/or
the Project.
16. Tenant shall not operate or permit to be operated a coin or token
operated vending machine or similar device (including, without
limitation, telephones, lockers, toilets, scales, amusement devices and
machines for sale of beverages, foods, candy, cigarettes and other
goods), except for machines for the exclusive use of Tenant's
employees, and then only if the operation does not violate the lease of
any other tenant in the Building or the Project.
17. Bicycles and other vehicles are not permitted inside the Building or on
the walkways outside the Building, except in areas designated by
Landlord.
18. Landlord may from time to time adopt systems and procedures for the
security and safety of the Building the Project, and their occupants,
entry, use and contents. Tenant, its agents, employees, contractors,
guests and invitees shall comply with Landlord's systems and
procedures.
19. Landlord shall have the right to prohibit the use of the name of the
Building and/or the Project or any other publicity by Tenant that in
Landlord's sole opinion may impair the reputation of the Building
and/or the Project or their desirability. Upon written notice from
Landlord, Tenant shall refrain from and discontinue such publicity
immediately.
20. Tenant shall not canvass, solicit or peddle in or about the Building,
the Property or the Project.
21. Neither Tenant nor its agents, employees, contractors, guests or
invitees shall smoke or permit smoking in the Common Areas, unless the
Common Areas have been declared a designated smoking area by Landlord,
nor shall the above parties allow smoke from the Premises to emanate
into the Common Areas or any other part of the Building or Project.
Landlord shall have the right to designate the Building (including the
Premises) and/or the Project as a non-smoking building or area.
22. Landlord shall have the right to designate and approve standard window
coverings for the Premises and to establish rules to assure that the
Building and Project present a uniform exterior appearance. Tenant
shall ensure, to the extent reasonably practicable, that window
coverings are closed on windows in the Premises while they are exposed
to the direct rays of the sun.
23. Deliveries to and from the Premises shall be made only at the times, in
the areas and through the entrances and exits designated by Landlord.
Tenant shall not make deliveries to or from the Premises in a manner
that might interfere with the use by any other tenant of its premises
or of the Common Areas, any pedestrian use, or any use which is
inconsistent with good business practice.
24. The work of cleaning personnel shall not be hindered by Tenant after
5:30 P.M., and cleaning work may be done at any time when the offices
are vacant. Windows, doors and fixtures may be cleaned at any time.
Tenant shall provide adequate waste and rubbish receptacles to prevent
unreasonable hardship to the cleaning service.
EXHIBIT C
COMMENCEMENT LETTER
(EXAMPLE)
Date _______________________
Tenant _______________________
Address _______________________
_______________________
_______________________
Re: Commencement Letter with respect to that certain Lease dated as of
_________________, __, by and between EOP-SHORELINE TECHNOLOGY PARK,
L.L.C., a Delaware limited liability company, as Landlord, and
COMMTOUCH SOFTWARE, INC., a California corporation, as Tenant, for
71,404 rentable square feet in the Building located at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
Dear _______________________:
In accordance with the terms and conditions of the above referenced
Lease, Tenant accepts possession of the Premises and agrees:
1. The Commencement Date of the Lease is _______________________.
2. The Termination Date of the Lease is _______________________.
Please acknowledge your acceptance of possession and agreement to the
terms set forth above by signing all 3 counterparts of this Commencement Letter
in the space provided and returning 2 fully executed counterparts to my
attention.
Sincerely,
_______________________
Property Manager
Agreed and Accepted:
Tenant: _______________________
By: _______________________
Name: _______________________
Title: _______________________
Date: _______________________
EXHIBIT D
WORK LETTER
This Exhibit is attached to and made a part of the Lease dated as of
October 28, 1999, by and between EOP-SHORELlNE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company ("Landlord") and COMMTOUCH SOFTWARE, INC., a
California corporation ("Tenant") for space in the Building located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
I. Alterations and Allowance.
A. Tenant, following the delivery of the Premises by Landlord and
the full and final execution and delivery of this Lease and
all prepaid rental and security deposits required hereunder,
shall have the right to perform alterations and improvements
in the Premises (the "Initial Alterations"). Notwithstanding
the foregoing, Tenant and its contractors shall not have the
right to perform Initial Alterations in the Premises unless
and until Tenant has complied with all of the terms and
conditions of Article IX.C. of this Lease, including, without
limitation, approval by Landlord of the final plans for the
Initial Alterations and the contractors to be retained by
Tenant to perform such Initial Alterations. Tenant shall be
responsible for all elements of the design of Tenant's plans
(including, without limitation, compliance with law,
functionality of design, the structural integrity of the
design, the configuration of the premises and the placement of
Tenant's furniture, appliances and equipment), and Landlord's
approval of Tenant's plans shall in no event relieve Tenant of
the responsibility for such design. Tenant may choose the
general contractor that shall perform the Initial Alterations
in the Premises, subject to Landlord's approval. Landlord's
approval of the contractors to perform the Initial Alterations
shall not be unreasonably withheld. The parties agree that
Landlord's approval of the general contractor to perform the
Initial Alterations shall not be considered to be unreasonably
withheld if any such general contractor (i) does not have
trade references reasonably acceptable to Landlord, (ii) does
not maintain insurance as required pursuant to the terms of
this Lease, (iii) does not have the ability to be bonded for
the work in an amount of no less than $500,000.00, (iv) does
not provide current financial statements reasonably acceptable
to Landlord, or (v) is not licensed as a contractor in the
state/municipality in which the Premises is located. Tenant
acknowledges the foregoing is not intended to be an exclusive
list of the reasons why Landlord may reasonably withhold its
consent to a general contractor.
B. Provided Tenant is not in default, Landlord agrees to
contribute the sum of $357,020.00 (i.e., $5.00 per rentable
square foot of the Premises) (the "Allowance") toward the cost
of performing the Initial Alterations in preparation of
Tenant's occupancy of the Premises. The Allowance may only be
used for the cost of preparing design and construction
documents and mechanical and electrical plans for the Initial
Alterations and for hard costs in connection with the Initial
Alterations. The Allowance shall be paid to Tenant or, at
Landlord's option, to the order of the general contractor that
performed the Initial Alterations, within 30 days following
receipt by Landlord of (1) receipted bills covering all labor
and materials expended and used in the Initial Alterations;
(2) a sworn contractors affidavit from the general contractor
and a request to disburse from Tenant containing an approval
by Tenant of the work done; (3) full and final waivers of
lien; (4) as-built plans of the Initial Alterations; and (5)
the certification of Tenant and its architect that the Initial
Alterations have been installed in a good and workmanlike
manner in accordance with the approved plans, and in
accordance with applicable laws, codes and ordinances. The
Allowance shall be disbursed in the amount reflected on the
receipted bills meeting the requirements above.
Notwithstanding anything herein to the contrary, Landlord
shall not be obligated to disburse any portion of the
Allowance during the continuance of an uncured default under
the Lease, and Landlord's obligation to disburse shall only
resume when and if such default is cured.
C. In no event shall the Allowance be used for the purchase of
equipment, furniture or other items of personal property of
Tenant. In the event Tenant does not use the entire Allowance
by the date which is 6 months after the Commencement Date, any
unused amount shall accrue to the sole benefit of Landlord, it
being understood that Tenant shall not be entitled to any
credit, abatement or other
concession in connection therewith. Tenant shall be
responsible for all applicable state sales or use taxes, if
any, payable in connection with the Initial Alterations and/or
Allowance.
D. Tenant agrees to accept the Premises in its "as-is" condition
and configuration, it being agreed that Landlord shall not be
required to perform any work or, except as provided above with
respect to the Allowance, incur any costs in connection with
the construction or demolition of any improvements in the
Premises.
E. This Exhibit D shall not be deemed applicable to any
additional space added to the original Premises at any time or
from time to time, whether by any options under the Lease or
otherwise, or to any portion of the original Premises or any
additions to the Premises in the event of a renewal or
extension of the original Term of this Lease, whether by any
options under the Lease or otherwise, unless expressly so
provided in the Lease or any amendment or supplement to the
Lease.
Landlord and Tenant have executed this Exhibit as of the day and year
first above written.
LANDLORD:
EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company
By: EOP Operating Limited Partnership,
a Delaware limited partnership, its sole member
By: Equity Office Properties Trust, a Maryland
real estate investment rust, its managing
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: Senior Vice President
---------------------------
TENANT:
COMMTOUCH SOFTWARE, INC., a California
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: Chief Financial Officer
---------------------------
By: /s/ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: Chief Executive Officer
---------------------------
EXHIBIT E
ADDITIONAL PROVISIONS
This Exhibit is a ached to and made a part of the Lease dated as of
October 28 , 1999, by and between EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company ("Landlord") and COMMTOUCH SOFTWARE, INC., a
California corporation ("Tenant") for space in the Building located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
I. RENEWAL OPTION.
A. Tenant shall have the right to extend the Term (the "Renewal
Option") for one additional period of 5 years commencing on
the day following the Termination Date of the initial Term and
ending on the 5th anniversary of the Termination Date (the
"Renewal Term"), if:
1. Landlord receives notice of exercise of the Renewal
Option ("Initial Renewal Notice') not less than 12
full calendar months prior to the expiration of the
initial Term and not more than 15 full calendar
months prior to the expiration of the initial Term;
and
2. Tenant is not in default under the Lease beyond any
applicable cure periods at the time that Tenant
delivers its Initial Renewal Notice or at the time
Tenant delivers its Binding Notice (as hereinafter
defined); and
3. No part of the Premises is sublet (other than
pursuant to a Permitted Transfer) at the time that
Tenant delivers its Initial Renewal Notice or at the
time Tenant delivers its Binding Notice; and
4. The Lease has not been assigned prior to the date
that Tenant delivers its Initial Renewal Notice or
prior to the date Tenant delivers its Binding Notice;
and
5. Tenant executes and returns the Renewal Amendment
(hereinafter defined) within 15 days after its
submission to Tenant.
B. The initial Base Rent rate per rentable square foot for the
Premises during the Renewal Term shall equal the Prevailing
Market (hereinafter defined) rate per rentable square foot for
the Premises.
C. Tenant shall pay Additional Rent (i.e. Expenses and Taxes) for
the Premises during the Renewal Term in accordance with
Article IV of the Lease.
D. Within 30 days after receipt of Tenant's Initial Renewal
Notice, Landlord shall advise Tenant of the applicable Base
Rent rate for the Premises for the Renewal Term. Tenant,
within 15 days after the date on which Landlord advises Tenant
of the applicable Base Rent rate for the Renewal Term, shall
either (i) give Landlord final binding written notice
("Binding Notice") of Tenant's exercise of its option, or (ii)
if Tenant disagrees with Landlord's determination, provide
Landlord with written notice of rejection (the "Rejection
Notice"). If Tenant fails to provide Landlord with either a
Binding Notice or Rejection Notice within such 15 day period,
Tenant's Renewal Option shall be null and void and of no
further force and effect. If Tenant provides Landlord with a
Binding Notice, Landlord and Tenant shall enter into the
Renewal Amendment upon the terms and conditions set forth
herein. If Tenant provides Landlord with a Rejection Notice,
Landlord and Tenant shall work together in good faith to agree
upon the Prevailing Market Base Rent rate for the Premises
during the Renewal Term. Upon agreement Tenant shall provide
Landlord with Binding Notice and Landlord and Tenant shall
enter into the Renewal Amendment in accordance with the terms
and conditions hereof. Notwithstanding the foregoing, if
Landlord and Tenant are unable to agree upon the Prevailing
Market Base Rent rate for the Premises within 30 days after
the date on which Tenant provides Landlord with a Rejection
Notice, Tenant may elect to either rescind its intention to
renew, or subject the process to binding arbitration. Tenant's
election to cause the disagreement to be resolved by
arbitration shall be deemed to be its Binding Notice. If
Tenant fails to require arbitration by notice (the
"Arbitration Notice") within 3 days of the expiration of the
30 day period set forth above, Tenant's right to extend the
Lease shall be null and void and of no further force and
effect.
If Tenant provides Landlord with an Arbitration Notice,
Landlord and Tenant, within 10 days after the date of the
Arbitration Notice, shall each simultaneously submit to the
other, in a sealed envelope, its good faith estimate of the
Prevailing Market rate (collectively referred to as the
"Estimates"). If the higher of such Estimates is not more than
105% of the lower of such Estimates, then Prevailing Market
rate shall be the average of the two Estimates. If the
Prevailing Market rate is not resolved by the exchange of
Estimates, Landlord and Tenant, within 7 days after the
exchange of Estimates, shall each select an appraiser to
determine which of the two Estimates most closely reflects the
Prevailing Market rate for the Premises during the Renewal
Term. Each appraiser so selected shall be certified as an MAI
appraiser or as an ASA appraiser and shall have had at least 5
years experience within the previous 10 years as a real estate
appraiser working in the Mountain View, California area, with
working knowledge of current rental rates and practices. For
purposes of this Lease, an "MAI" appraiser means an individual
who holds an MAI designation conferred by, and is an
independent member of, the American Institute of Real Estate
Appraisers (or its successor organization, or in the event
there is no successor organization, the organization and
designation most similar), and an "ASA" appraiser means an
individual who holds the Senior Member designation conferred
by, and is an independent member of, the American Society of
Appraisers (or its successor organization, or, in the event
there is no successor organization, the organization and
designation most similar). Upon selection, Landlord's and
Tenant's appraisers shall work together in good faith to agree
upon which of the two Estimates most closely reflects the
Prevailing Market rate for the Premises during the Renewal
Term. The Estimate chosen by such appraisers shall be binding
on both Landlord and Tenant as the Base Rent rate for the
Premises during the Renewal Term. If either Landlord or Tenant
fails to appoint an appraiser within the seven day period
referred to above, the appraiser appointed by the other party
shall be the sole appraiser for the purposes hereof. If the
two appraisers cannot agree upon which of the two Estimates
most closely reflects the Prevailing Market within the 20 days
after their appointment, then, within 10 days after the
expiration of such 20 day period, the 2 appraisers shall
select a third appraiser meeting the aforementioned criteria.
Once the third appraiser has been selected as provided for
above, then, as soon thereafter as practicable but in any case
within 14 days, the third appraiser shall make his
determination of which of the two Estimates most closely
reflects the Prevailing Market rate and such Estimate shall be
binding on both Landlord and Tenant as the Base Rent rate for
the Premises during the Renewal Term. If the third appraiser
believes that expert advice would materially assist him, he
may retain one or more qualified persons, to provide such
expert advice. The parties shall share equally in the costs of
the third appraiser and of any experts retained by the third
appraiser. Any fees of any appraiser, counsel or experts
engaged directly by Landlord or Tenant, however, shall be
borne by the party retaining such appraiser, counsel or
expert. In the event that the Prevailing Market rate has not
been determined by the commencement date of the Renewal Term,
Tenant shall pay Base Rent upon the terms and conditions in
effect for initial Term until such time as the Prevailing
Market rate has been determined. Upon such determination, the
Base Rent for the Premises during the Renewal Term shall be
retroactively adjusted to the commencement of the Renewal
Term. If such adjustment results in an underpayment of Base
Rent by Tenant, Tenant shall pay Landlord the amount of such
underpayment within 30 days after the determination thereof.
If such adjustment results in an overpayment of Base Rent by
Tenant, Landlord shall credit such overpayment against the
next installment of Base Rent due under the Lease and, to the
extent necessary, any subsequent installments until the entire
amount of such overpayment has been credited against Base
Rent.
E. If Tenant is entitled to and properly exercises its Renewal
Option, Landlord shall prepare an amendment (the "Renewal
Amendment") to reflect changes in the Base Rent, Term,
Termination Date and other appropriate terms. The Renewal
Amendment shall be:
1. sent to Tenant within a reasonable time after receipt
of the Binding Notice; and
2. executed by Tenant and returned to Landlord in
accordance with Paragraph A.5. above.
An otherwise valid exercise of the Renewal Option shall, at
Landlord's option, be fully effective whether or not the
Renewal Amendment is executed.
F. In the event a Capital Improvement Expense is incurred and
Landlord has had to pay a portion of the Capital Improvement
Expense because the number of Remaining Years (as originally
determined at the time the Capital Improvement Expense was
incurred) during the initial Term of the Lease is less than
the lesser of (a) the number of years of the useful life of
the applicable capital improvement (as reasonably determined
by Landlord) and (b) 10 years, then Tenant shall pay to
Landlord, on or before the commencement date of the Renewal
Term, as Additional Rent due under the Lease, an amount equal
to (x) the total cost of the Capital Improvement Expense
divided by the lesser of (a) and (b) above, multiplied by (y)
the difference between the lesser of (a) or (b) above and the
Remaining Years (as originally determined at the time the
Capital Improvement Expense was incurred).
G. For purpose hereof, "Prevailing Market" shall mean the annual
rental rate per rentable square foot under renewal leases and
amendments entered into on or about the date on which the
Prevailing Market is being determined hereunder for space
comparable to the Premises in the Project. The determination
of Prevailing Market shall take into account any material
economic differences between the terms of this Lease and any
comparison lease, such as rent abatements, construction costs
and other concessions and the manner, if any, in which the
Landlord under any such lease is reimbursed for operating
expenses and taxes. The determination of Prevailing Market
shall also take into consideration any reasonably anticipated
changes in the Prevailing Market rate from the time such
Prevailing Market rate is being determined and the time such
Prevailing Market rate will become effective under this Lease.
H. Landlord and Tenant acknowledge and agree that Tenant's
Renewal Option is personal to Tenant only and in no event
shall Tenant's Renewal Option be assignable or transferable.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Exhibit as
of the day and year first above written.
LANDLORD:
EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company
By: EOP Operating Limited Partnership,
a Delaware limited partnership, its sole member
By: Equity Office Properties Trust, a Maryland
real estate investment rust, its managing
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: Senior Vice President
---------------------------
TENANT:
COMMTOUCH SOFTWARE, INC., a California
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: CFO
---------------------------
By: /s/ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: CEO
---------------------------
EXHIBIT F
PARKING AGREEMENT
This Exhibit is attached to and made a part of the Lease dated as of
October 28, 1999, by and between EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company (`Landlord") and COMMTOUCH SOFTWARE, INC., a
California corporation (`Tenant") for space in the Building located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
1. Landlord hereby grants to Tenant and persons designated by Tenant a
license to use 264 non-priority parking spaces in the parking areas
("Parking Facility") servicing the Building. The term of such license
shall commence on the Commencement Date under the Lease and shall
continue until the earlier to occur of the Termination Date under the
Lease, the sooner termination of the Lease, or Tenant's abandonment of
the Premises thereunder.
2. Tenant shall at all times comply with all applicable ordinances, rules,
regulations, codes, laws, statutes and requirements of all federal,
state, county and municipal governmental bodies or their subdivisions
respecting the use of the Parking Facility. Landlord reserves the right
to adopt, modify and enforce reasonable rules ("Rules") governing the
use of the Parking Facility from time to time including any key-card,
sticker or other identification or entrance system and hours of
operation. The rules set forth herein are currently in effect. Landlord
may refuse to permit any person who violates such rules to park in the
Parking Facility, and any violation of the rules shall subject the car
to removal from the Parking Facility.
3. Unless specified to the contrary above, the parking spaces hereunder
shall be provided on a non-designated "first-come, first-served" basis.
Tenant acknowledges that Landlord has no liability for claims arising
through acts or omissions of any Operator (as hereinafter defined) of
the Parking Facility, if any. Landlord shall have no liability
whatsoever for any damage to items located in the Parking Facility, nor
for any personal injuries or death arising out of any matter relating
to the Parking Facility, and in all events, Tenant agrees to look first
to its insurance carrier and to require that Tenant's employees look
first to their respective insurance carriers for payment of any losses
sustained in connection with any use of the Parking Facility. Tenant
shall cause its insurance carriers to waive all rights of subrogation
against Landlord or Landlord's agents. Landlord reserves the right to
assign specific parking spaces, and to reserve parking spaces for
visitors, small cars, handicapped persons and for other tenants, guests
of tenants or other parties, which assignment and reservation or spaces
may be relocated as determined by Landlord from time to time, and
Tenant and persons designated by Tenant hereunder shall not park in any
location designated for such assigned or reserved parking spaces.
Tenant acknowledges that the Parking Facility may be closed entirely or
in part in order to make repairs or perform maintenance services, or to
alter, modify, re-stripe or renovate the Parking Facility, or if
required by casualty, strike, condemnation, act of God, governmental
law or requirement or other reason beyond the operator's reasonable
control.
4. If Tenant shall default under this Parking Agreement, the Landlord or
the Operator, as the case may be, shall have the right to remove from
the Parking Facility any vehicles hereunder which shall have been
involved or shall have been owned or driven by parties involved in
causing such default, without liability therefor whatsoever. In
addition, if Tenant shall default under this Parking Agreement,
Landlord shall have the right to cancel this Parking Agreement on 30
days' written notice, unless within such 30 day period, Tenant cures
such default. However, if Tenant's default cannot reasonably be cured
within 30 days, Tenant shall be allowed additional time (not to exceed
60 days, subject to extension due to Force Majeure) as is reasonably
necessary to cure such default, so long as (1) Tenant commences to cure
the default within 30 days, and (2) Tenant diligently pursues a course
of action that will cure the default and bring the Tenant into
compliance with the Lease and this Parking Agreement. If Tenant
defaults with respect to the same term or condition under this Parking
Agreement more than 6 times during any 12 month period, and Landlord
notifies Tenant thereof promptly after each such default, the next
default of such term or condition during the succeeding 12 month
period, shall, at Landlord's election, constitute an incurable default.
Such cancellation right shall be cumulative and in addition to any
other rights or remedies available to Landlord at law or equity, or
provided under the Lease (all of which rights and remedies under the
Lease are hereby incorporated herein, as though fully set forth). Any
default by Tenant under the Lease shall be a default under this Parking
Agreement, and any default under this Parking Agreement shall be a
default under the Lease.
RULES
(i) Tenant shall have access to the Parking Facility on a 24 hour
basis, 7 days a week. Tenant shall not store or permit its
employees to store any automobiles in the Parking Facility
without the prior written consent of the Landlord. Except for
emergency repairs, Tenant and its employees shall not perform
any work on any automobiles while located in the Parking
Facility, or on the Property. If it is necessary for Tenant or
its employees to leave an automobile in the Parking Facility
overnight, Tenant shall provide the Landlord with prior notice
thereof designating the license plate number and model of such
automobile.
(ii) Cars must be parked entirely within the stall lines painted on
the floor, and only small cars may be parked in areas reserved
for small cars.
(iii) All directional signs and arrows must be observed.
(iv) The speed limit shall be 5 miles per hour.
(v) Parking spaces reserved for handicapped persons must be used
only by vehicles properly designated.
(vi) Parking is prohibited in all areas not expressly designated
for parking, including without limitation:
(a) Areas not striped for parking
(b) aisles
(c) where "no parking" signs are posted
(d) ramps
(e) loading zones
(vii) Parking stickers, key cards or any other devices or forms of
identification or entry supplied by the Landlord or the
Operator, as the case may be, shall remain the property of the
Landlord or the Operator. Such device must be displayed as
requested and may not be mutilated in any manner. The serial
number of the parking identification device may not be
obliterated. Parking passes and devices are not transferable
and any pass or device in the possession of an unauthorized
holder will be void.
(viii) INTENTIONALLY OMITTED.
(ix) Parking Facility managers or attendants are not authorized to
make or allow any exceptions to these Rules.
(x) Every ▇▇▇▇▇▇ is required to park and lock his/her own car.
(xi) Loss or theft of parking pass, identification, key cards or
other such devices must be reported to Landlord and to the
Parking Facility manager immediately. Any parking devices
reported lost or stolen found on any authorized car will be
confiscated and the illegal holder will be subject to
prosecution. Lost or stolen passes and devices found by Tenant
or its employees must be reported to the office of the garage
immediately.
(xii) Washing, waxing, cleaning or servicing of any vehicle by the
customer and/or his agents is prohibited. Parking spaces may
be used only for parking automobiles.
(xiii) By signing this Parking Agreement, Tenant agrees to acquaint
all persons to whom Tenant assigns a parking pass with these
Rules.
5. Landlord may elect to provide parking cards or keys to control access
to the Parking Facility or surface parking areas, if any. In such
event, Landlord shall provide Tenant with one card or key for each
parking space that Tenant is entitled to hereunder, provided that
Landlord shall have the right to require Tenant or its employees to
place a deposit on such access cards or keys and to pay a fee for any
lost or damaged cards or keys.
6. Landlord hereby reserves the right to enter into a management agreement
or lease with an entity for the Parking Facility ("Operator"). In such
event, Tenant upon request of Landlord, shall enter into a parking
agreement with the Operator and pay the Operator the monthly charge
established hereunder, and Landlord shall have no liability for claims
arising through acts or omissions of the Operator unless caused by
Landlord's negligence or willful misconduct. It is understood and
agreed that the identity of the Operator may change from time to time
during the Lease Term. In connection therewith, any parking lease or
agreement entered into between Tenant and an Operator shall be freely
assignable by such Operator or any successors thereto.
7. NO LIABILITY. TENANT ACKNOWLEDGES AND AGREES THAT, TO THE FULLEST
EXTENT PERMITTED BY LAW, LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY LOSS
OR DAMAGE TO TENANT OR TENANTS PROPERTY (INCLUDING, WITHOUT
LIMITATIONS, ANY LOSS OR DAMAGE TO TENANTS AUTOMOBILE OR THE CONTENTS
THEREOF DUE TO THEFT, VANDALISM OR ACCIDENT) ARISING FROM OR RELATED TO
TENANTS USE OF THE PARKING FACILITY OR EXERCISE OF ANY RIGHTS UNDER
THIS PARKING AGREEMENT, WHETHER OR NOT SUCH LOSS OR DAMAGE RESULTS FROM
LANDLORD'S ACTIVE NEGLIGENCE OR NEGLIGENT OMISSION. THE LIMITATION ON
LANDLORD'S LIABILITY UNDER THE PRECEDING SENTENCE SHALL NOT APPLY
HOWEVER TO LOSS OR DAMAGE ARISING DIRECTLY FROM LANDLORD'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.
8. Release of Liability. Without limiting the provisions of Paragraph 8
above, Tenant hereby voluntarily releases, discharges, waives and
relinquishes any and all actions or causes of action for personal
injury or property damage occurring to Tenant arising as a result of
parking in the Parking Facility, or any activities incidental thereto,
wherever or however the same may occur, and further agrees that Tenant
will not prosecute any claim for personal injury or property damage
against Landlord or any of its officers, agents, servants or employees
for any said causes of action. It is the intention of Tenant by this
instrument, to exempt and relieve Landlord from liability for personal
injury or property damage unless caused by Landlord's gross negligence
or willful misconduct.
9. The provisions of Article XXI of the Lease are hereby incorporated by
reference as if fully recited.
Tenant acknowledges that Tenant has read the provisions of this Parking
Agreement, has been fully and completely advised of the potential dangers
incidental to parking in the Parking Facility and is fully aware of the legal
consequences of signing this instrument.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Exhibit as
of the day and year first above written.
LANDLORD:
EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company
By: EOP Operating Limited Partnership,
a Delaware limited partnership, its sole member
By: Equity Office Properties Trust, a Maryland
real estate investment rust, its managing
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: Senior Vice President
---------------------------
TENANT:
COMMTOUCH SOFTWARE, INC., a California
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: CFO
---------------------------
By: /s/ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: CEO
---------------------------
EFFECTIVE DATE OF REDUCTION NEW REDUCED AMOUNT OF LETTER OF CREDIT
MARCH 1, 2001 US$975,000.00
MARCH 1, 2002 US$850,000.00
MARCH 1, 2003 US$725,000.00
MARCH 1, 2004 US$600,000.00
MARCH 1, 2005 US$492,687.68
THIS LETTER OF CREDIT SHALL BE AUTOMATICALLY EXTENDED FOR AN ADDITIONAL PERIOD
OF ONE YEAR, WITHOUT AMENDMENT, FROM THE PRESENT OR EACH FUTURE EXPIRATION DATE
BUT IN ANY EVENT NOT BEYOND AUGUST 15, 2007, WHICH SHALL BE THE FINAL EXPIRATION
DATE OF THIS LETTER OF CREDIT, UNLESS, AT LEAST 60 DAYS PRIOR TO THEN CURRENT
EXPIRATION DATE WE NOTIFY YOU BY REGISTERED MAIL/OVERNIGHT COURIER SERVICE AT
THE ABOVE ADDRESS WITH A COPY OF SUCH NOTICE TO: EQUITY OFFICE PROPERTIES TRUST,
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ATTENTION: SENIOR VICE
PRESIDENT-TREASURER, THAT THIS LETTER OF CREDIT WILL NOT BE EXTENDED BEYOND THE
CURRENT EXPIRATION DATE. UPON RECEIPT OF SUCH NOTICE YOU MAY DRAW YOUR SIGHT
DRAFT DRAWN ON US FOR THE AVAILABLE AMOUNT UNDER THIS STANDBY LETTER OF CREDIT
ACCOMPANIED BY YOUR DATED STATEMENT SIGNED BY ONE OF YOUR AUTHORIZED OFFICERS,
FOLLOWED BY THEIR DESIGNATED TITLE, CERTIFYING THE FOLLOWING: "WE ARE IN RECEIPT
OF YOUR NOTICE THAT YOU HAVE ELECTED NOT TO RENEW YOUR IRREVOCABLE STANDBY
LETTER OF CREDIT NO. _____________________ AND APPLICANT HAS FAILED TO PROVIDE
US WITH AN ACCEPTABLE SUBSTITUTE IRREVOCABLE STANDBY LETTER OF CREDIT IN
ACCORDANCE WITH THE TERMS OF THE ABOVE REFERENCED LEASE."
THIS LETTER OF CREDIT MAY ONLY BE TRANSFERRED IN ITS ENTIRETY BY THE ISSUING
BANK UPON OUR RECEIPT OF THE ATTACHED "EXHIBIT A" DULY COMPLETED AND EXECUTED BY
THE BENEFICIARY AND ACCOMPANIED BY THE ORIGINAL LETTER OF CREDIT AND ALL
AMENDMENT(S), IF ANY, AND OUR TRANSFER FEE OF 1/4 OF 1% (MIN. $250.00).
DRAFT(S) AND DOCUMENTS MUST INDICATE THE NUMBER AND DATE OF THIS LETTER OF
CREDIT.
DOCUMENTS MUST BE FORWARDED TO US BY OVERNIGHT DELIVERY SERVICE OR HAND
DELIVERED TO: SILICON VALLEY BANK, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
ATTN: INTERNATIONAL DIVISION.
WE HEREBY AGREE WITH THE DRAWERS, ENDORSERS AND BONAFIDE HOLDERS THAT THE DRAFTS
DRAWN UNDER AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS CREDIT SHALL
BE DULY HONORED UPON PRESENTATION TO THE DRAWEE, IF NEGOTIATED ON OR BEFORE THE
EXPIRATION DATE OF THIS CREDIT.
THIS CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500.
____________________________________ ____________________________________
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
RULES
(i) Tenant shall have access to the Parking Facility on a 24 hour
basis, 7 days a week. Tenant shall not store or permit its
employees to store any automobiles in the Parking Facility
without the prior written consent of the Landlord. Except for
emergency repairs, Tenant and its employees shall not perform
any work on any automobiles while located in the Parking
Facility, or on the Property. If it is necessary for Tenant or
its employees to leave an automobile in the Parking Facility
overnight, Tenant shall provide the Landlord with prior notice
thereof designating the license plate number and model of such
automobile.
(ii) Cars must be parked entirely within the stall lines painted on
the floor, and only small cars may be parked in areas reserved
for small cars.
(iii) All directional signs and arrows must be observed.
(iv) The speed limit shall be 5 miles per hour.
(v) Parking spaces reserved for handicapped persons must be used
only by vehicles properly designated.
(vi) Parking is prohibited in all areas not expressly designated
for parking, including without limitation:
(a) Areas not striped for parking
(b) aisles
(c) where "no parking' signs are posted
(d) ramps
(e) loading zones
(vii) Parking stickers, key cards or any other devices or forms of
identification or entry supplied by the Landlord or the
Operator, as the case may be, shall remain the property of the
Landlord or the Operator. Such device must be displayed as
requested and may not be mutilated in any manner. The serial
number of the parking identification device may not be
obliterated. Parking passes and devices are not transferable
and any pass or device in the possession of an unauthorized
holder will be void.
(viii) INTENTIONALLY OMITTED.
(ix) Parking Facility managers or attendants are not authorized to
make or allow any exceptions to these Rules.
(x) Every ▇▇▇▇▇▇ is required to park and lock his/her own car.
(xi) Loss or theft of parking pass, identification, key cards or
other such devices must be reported to Landlord and to the
Parking Facility manager immediately. Any parking devices
reported lost or stolen found on any authorized car will be
confiscated and the illegal holder will be subject to
prosecution. Lost or stolen passes and devices found by Tenant
or its employees must be reported to the office of the garage
immediately.
(xii) Washing, waxing, cleaning or servicing of any vehicle by the
customer and/or his agents is prohibited. Parking spaces may
be used only for parking automobiles.
(xiii) By signing this Parking Agreement, Tenant agrees to acquaint
all persons to whom Tenant assigns a parking pass with these
Rules.
5. Landlord may elect to provide parking cards or keys to control access
to the Parking Facility or surface parking areas, if any. In such
event, Landlord shall provide Tenant with one card or key for each
parking space that Tenant is entitled to hereunder, provided that
Landlord shall have the right to require Tenant or its employees to
place a deposit on such access cards or keys and to pay a fee for any
lost or damaged cards or keys.
0. "Law(s)" means all applicable statutes, codes, ordinances,
orders, rules and regulations of any municipal or governmental
entity.
P. "Normal Business Hours" for the Building are 8 A.M. to 5 P.M.
on Business Days.
Q. "Property,, means the Building and the parcel(s) of land on
which it is located and, at Landlord's discretion, the
Building's parking area and other improvements serving the
Building, if any, and the parcel(s) of land on which they are
located.
R. "Project" shall mean the development located on approximately
51.83 acres commonly described as Shoreline Technology Park,
which includes the Building, the Property, as well as other
buildings and property as outlined on Exhibit A-2 attached
hereto and incorporated herein.
S. "Rentable Square Footage of the Project" is deemed to be
726,508 square feet.
II. Lease Grant.
Landlord leases the Premises to Tenant and Tenant leases the Premises
from Landlord, together with the right in common with others to use any portions
of the Project that are designated by Landlord for the common use of tenants and
others, such as sidewalks, unreserved parking areas, common corridors, elevator
foyers, restrooms, vending areas, lobby areas, artificial lakes, walkways, water
amenities, landscaping, plaza, roads, driveways, and recreation areas
(collectively, the "Common Areas"), including but not limited to that certain
recreation area (the "Recreational Area") which is maintained by Landlord in the
location and configuration shown on Exhibit A-3 attached hereto. Notwithstanding
the foregoing to the contrary, Tenant's right to use the Recreational Area shall
be subject to the right of the City of Mountain View ("City") to require that a
portion of the Recreational Area be paved and used for parking purposes at a
time to be determined at the discretion of the City. The area to be used for
parking purposes is indicated as "Potential Parking Area" on Exhibit A-3. If the
City requires the parking, Tenant shall have the non-exclusive right to use the
parking spaces created thereby.
III. Possession.
A. Intentionally Omitted.
B. Subject to Landlord's obligation, if any, to perform Landlord
Work and Landlord's obligations under Section IX.B., the
Premises are accepted by Tenant in "as is" condition and
configuration. By taking possession of the Premises, Tenant
agrees that the Premises are in good order and satisfactory
condition, and that there are no representations or warranties
by Landlord regarding the condition of the Premises or the
Building. If Landlord is delayed delivering possession of the
Premises or any other space due to the holdover or unlawful
possession of such space by any party, Landlord shall use
reasonable efforts to obtain possession of the space. In such
event, the Commencement Date shall be postponed until the date
Landlord delivers possession of the Premises to Tenant free
from occupancy by any party, and the Termination Date, at the
option of Landlord, may be postponed by an equal number of
days. In the event the Commencement Date is so postponed,
Landlord and Tenant shall enter into a commencement letter
agreement in the form attached as Exhibit C. Notwithstanding
the foregoing, if there have been no delays caused by Tenant,
and Landlord has not tendered possession of the Premises to
Tenant by July 1, 2000 (the "Outside Possession Date"),
Tenant, as its sole remedy, may terminate this Lease by giving
Landlord written notice of termination on or before the
earlier to occur of: (i) 5 Business Days after the Outside
Possession Date; and (ii) the Commencement Date. In such
event, this Lease shall be deemed null and void and of no
further force and effect and Landlord shall promptly refund
any Prepaid Rental and Security Deposit previously advanced by
Tenant under this Lease and, so long as Tenant has not
previously defaulted under any of its obligations under the
Work Letter, the parties hereto shall have no further
responsibilities or obligations to each other with respect to
this Lease. Landlord and Tenant acknowledge and agree that:
(i) the determination of the Commencement Date shall take into
consideration the effect of any delays by
3
Landlord for compliance, review and appeal of tax liabilities.
Without limitation, Taxes shall not include any income,
capital levy, franchise, capital stock, gift, estate or
inheritance tax. If an assessment is payable in installments,
Taxes for the year shall include the amount of the installment
and any interest due and payable during that year. For all
other real estate taxes, Taxes for that year shall, at
Landlord's election, include either the amount accrued,
assessed or otherwise imposed for the year or the amount due
and payable for that year, provided that Landlord's election
shall be applied consistently throughout the Term. If a change
in Taxes is obtained for any year of the Term, then Taxes for
that year will be retroactively adjusted and Landlord shall
provide Tenant with a credit, if any, based on the adjustment.
Tenant shall be responsible for, and shall pay prior to
delinquency, taxes or governmental service fees, possessory
interest taxes, fees or charges in lieu of any such taxes,
capital levies, or other charges imposed upon, levied with
respect to, or assessed against, its personal property, and
its interest pursuant to this Lease. To the extent that any
such taxes are not separately assessed or billed to Tenant,
Tenant shall pay the amount thereof as invoiced to Tenant by
Landlord prior to the delinquency of such taxes. In the event
that the tenant improvements in the Building which correspond
to the Initial Alterations, as defined in this Lease, are
assessed and taxed separately by the applicable taxing
authority, then Tenant shall be liable and shall pay that
portion of the Taxes applicable to the value of the Initial
Alterations in the Premises based on the value attributed
thereto by the applicable taxing authority to either (a) the
applicable taxing authority prior to the delinquency of such
taxes in the event Tenant is billed directly by such taxing
authority, or (b) the Landlord within 30 days after written
demand, in the event Landlord is billed directly by the
applicable taxing authority.
E. Audit Rights. Tenant may, within 90 days after receiving
Landlord's statement of Expenses, give Landlord written notice
("Review Notice") that Tenant intends to review Landlord's
records of the Expenses for that calendar year. Within a
reasonable time after receipt of the Review Notice, Landlord
shall make all pertinent records available for inspection that
are reasonably necessary for Tenant to conduct its review. If
any records are maintained at a location other than the office
of the Project, Tenant may either inspect the records at such
other location or pay for the reasonable cost of copying and
shipping the records. If Tenant retains an agent to review
Landlord's records, the agent must be with a licensed CPA
firm. Tenant shall be solely responsible for all costs,
expenses and fees incurred for the audit. Within 60 days after
the records are made available to Tenant, Tenant shall have
the right to give Landlord written notice (an "Objection
Notice") stating in reasonable detail any objection to
Landlord's statement of Expenses for that year. If Tenant
fails to give Landlord an Objection Notice within the 60 day
period or fails to provide Landlord with a Review Notice
within the 90 day period described above, Tenant shall be
deemed to have approved Landlord's statement of Expenses and
shall be barred from raising any claims regarding the Expenses
for that year. If Tenant provides Landlord with a timely
Objection Notice, Landlord and Tenant shall work together in
good faith to resolve any issues raised in Tenant's Objection
Notice. If Landlord and Tenant determine that Expenses for the
calendar year are less than reported, Landlord shall provide
Tenant with a credit against the next installment of Rent in
the amount of the overpayment by Tenant. Likewise, if Landlord
and Tenant determine that Expenses for the calendar year are
greater than reported, Tenant shall pay Landlord the amount of
any underpayment within 30 days. In addition, if Landlord and
Tenant determine that Expenses for the Building for the year
in question were less than stated by more than 5%, Landlord,
within 30 days after its receipt of paid invoices therefor
from Tenant, shall reimburse Tenant for any reasonable amounts
paid by Tenant to third parties in connection with such review
by Tenant. The records obtained by Tenant shall be treated as
confidential. In no event shall Tenant be permitted to examine
Landlord's records or to dispute any statement of Expenses
unless Tenant has paid and continues to pay all Rent when due.
7
EXHIBIT G
FORM OF LETTER OF CREDIT
____________________
[NAME OF FINANCIAL INSTITUTION]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. _______________
DATE: _________________
BENEFICIARY:
EOP-SHORELINE TECHNOLOGY PARK, L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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APPLICANT:
COMMTOUCH SOFTWARE, INC.,
A CALIFORNIA CORPORATION
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AMOUNT: US$1,100,000.00 (ONE MILLION ONE HUNDRED THOUSAND AND 00/100 U.S.
DOLLARS
EXPIRATION DATE: __________________
LOCATION: AT OUR COUNTERS lN SANTA CLARA, CALIFORNIA
GENTLEMEN:
WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.
_________________ IN YOUR FAVOR AVAILABLE BY YOUR DRAFTS DRAWN ON US AT SIGHT
AND ACCOMPANIED BY THE FOLLOWING DOCUMENTS: ______________________
1. THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL AMENDMENT(S), IF ANY.
2. BENEFICIARY'S DATED STATEMENT SIGNED BY ONE OF THEIR AUTHORIZED
OFFICERS FOLLOWED BY THEIR DESIGNATED TITLE CERTIFYING THE FOLLOWING:
"THIS DRAW IN THE AMOUNT OF US$ (SPECIFY AMOUNT) UNDER YOUR IRREVOCABLE
LETTER OF CREDIT NO. _________________ REPRESENTS FUNDS DUE AND OWING
TO US AS A RESULT OF THE APPLICANT'S COMMISSION OF ANY EVENT OF DEFAULT
OF ONE OR MORE OF THE TERMS OF THAT CERTAIN LEASE BY AND BETWEEN
EOP-SHORELINE TECHNOLOGY PARK, L.L.C., AS LANDLORD, AND COMMTOUCH
SOFTWARE, INC., AS TENANT."
PARTIAL DRAWS ARE ALLOWED. THIS LETTER OF CREDIT MUST ACCOMPANY ANY DRAWINGS
HEREUNDER FOR ENDORSEMENT OF THE DRAWING AMOUNT AND WILL BE RETURNED TO THE
BENEFICIARY UNLESS IT IS FULLY UTILIZED.
PROVIDED THAT YOU HAVE NOT PROVIDED US WITH WRITTEN NOTICE OF APPLICANT'S
DEFAULT, WHICH MUST BE SENT TO US AT SILICON VALLEY BANK, INTERNATIONAL ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 1,3003 ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ATTENTION:
LETTERS OF CREDIT DEPARTMENT BY FEDEX OR OTHER OVERNIGHT COURIER SERVICE, UNDER
THE ABOVE REFERENCED LEASE ON OR BEFORE THE DATE WHICH IS TEN (10) DAYS PRIOR TO
THE EFFECTIVE DATE OF ANY REDUCTION, AS SET FORTH BELOW, AND FURTHER PROVIDED
THAT THE APPLICANT IS OCCUPYING AT LEAST 75% OF THE PREMISES (AS THAT TERM IS
DEFINED IN THE ABOVE REFERENCED LEASE), THE AMOUNT OF THIS IRREVOCABLE STANDBY
LETTER OF CREDIT SHALL AUTOMATICALLY REDUCE IN ACCORDANCE WITH THE FOLLOWING
SCHEDULE: