INDEX TO LEASE

LEASE

(Single Tenant; Stand-Alone; Net)

BETWEEN

XILINX, INC.

AND

SONICWALL, INC.

LEASE

(Single Tenant; Net)

ARTICLE I.

BASIC LEASE PROVISIONS

ARTICLE II.

 

PREMISES

SECTION 2.1       LEASED PREMISES .  Landlord leases to Tenant and Tenant leases from Landlord the premises shown in Exhibit A (the “ Premises ”), containing approximately the rentable square footage set forth as the “ Floor Area ”   in Item 8 of the Basic Lease Provisions.  The Premises consist of all of the rentable square footage within the building identified in Item 2 of the Basic Lease Provisions (the Premises together with such building and the underlying real property, are called the “ Building ”).   The Building is located on the site shown on Exhibit B (the “ Site ”).  All references to “ Floor Area ” in this Lease shall mean the rentable square footage set forth in Item 8 of the Basic Lease Provisions.  The rentable square footage set forth in Item 8 may include or have been adjusted by various factors, including, without limitation, a load factor for any vertical penetrations, stairwells or similar features or areas of the Building.  Tenant agrees that the Floor Area set forth in Item 8 shall be binding on Landlord and Tenant for purposes of this Lease regardless of whether any future or differing measurements of the Premises or the Building are consistent or inconsistent with the Floor Area set forth in Item 8.

(a)   Tenant acknowledges that except as expressly set forth below in Section 2.2(d), neither Landlord nor any representative of Landlord has made any representation or warranty with respect to the Premises, the Building or the Site or their respective suitability or fitness for any purpose.

 

(b)   Tenant further acknowledges that neither Landlord nor any representative of Landlord has agreed to undertake any alterations or additions or to construct any improvements to the Premises, except to fund the “ Landlord’s Contribution ” towards construction of certain “ Tenant Improvements ” subject to the terms and conditions of the Work Letter attached hereto as Exhibit X (the “ Work Letter ”).

 

(c)   As of the Commencement Date, Tenant shall be conclusively deemed to have accepted the Premises and those portions of the Building and Site in which Tenant has any rights under this Lease, which acceptance shall mean that it is conclusively established that the Premises and those portions of the Building and Site in which Tenant has any rights under this Lease were in satisfactory condition and in conformity with the provisions of this Lease, subject only to those defective or incomplete portions of the Tenant Improvements itemized on a written punchlist pursuant to the Work Letter or a breach of Landlord’s representations and warranties set forth below in Section 2.2(d).

 

(d)   Landlord hereby represents and warrants that, as of the Commencement Date:

 

(i)   The Premises, the Building, and the Common Areas, including all fixtures, equipment and building systems servicing the Premises, including, without limitation, existing plumbing, mechanical, lighting, HVAC systems, and all items for which Tenant shall have repair, maintenance and/or replacement obligations under Section 7.1 or elsewhere in the Lease and the Tenant Improvements (1) have been constructed and/or installed in a good and workmanlike manner and  in compliance with all applicable laws and regulations, (2) are not in violation of any applicable laws and regulations, and (3) are not subject to any enforcement or correction order by any government authority in connection with the generation, use, storage, treatment or disposal of Hazardous Materials (as defined in Section 5.3);

 

(ii)   There are no Hazardous Materials (as defined in Section 5.3) located on the Premises.

 

 

(e)   The warranty period for the representation and warranty in Section 2.2(d)(i) shall be for a period of six (6) months from the Commencement Date.  If Tenant does not give Landlord notice of any non-compliance with the representations and warranties in Section 2.2(d)(i) within six (6) months of the Commencement

 

 

SECTION 2.3       BUILDING NAME AND ADDRESS .  Tenant shall not utilize any name selected by Landlord from time to time for the Building and/or the Site as any part of Tenant’s corporate or trade name.  Landlord shall have the right to change the name, address, number or designation of the Building or Site without liability to Tenant.

 

 

ARTICLE III.

 

TERM

 

SECTION 3.1        GENERAL .  Subject to the provisions of Section 3.2 below, the term of this Lease (“ Term ”) shall commence on the date set forth in Item 4 of the Basic Lease Provisions (the “ Commencement Date ”), and shall expire on the date set forth in Item 5 of the Basic Lease Provisions (the “ Expiration Date ”).  

 

SECTION 3.2        DELAY IN POSSESSION .  If Landlord, for any reason whatsoever, cannot deliver possession of the Premises to Tenant on or before the Commencement Date as set forth in Item 4 of the Basic Lease Provisions in the condition required hereunder, this Lease shall not be void or voidable nor shall Landlord be liable to Tenant for any resulting loss or damage except that Landlord will reimburse Tenant for reasonable rent actually paid by Tenant that Tenant would not have had to pay but for the failure of Landlord to deliver possession of the Premises to Tenant on or before the Commencement Date (“ Alternate Rent ”).  However, Tenant shall not be liable for any rent and the Commencement Date shall not occur until Landlord tenders possession of the Premises to Tenant in the condition required hereunder, except that if Landlord cannot so tender possession of the Premises on or before the Commencement Date due to causes set forth in Section 3 of the Work Letter , then the Commencement Date shall be deemed to have occurred and Landlord shall be entitled to full performance by Tenant (including the payment of rent) as of the date set forth in Item 4 of the Basic Lease Provisions and shall not owe Tenant any Alternate Rent. So long as Tenant’s activities during such early access do not interfere with or delay the construction of the Tenant Improvements and Tenant coordinates such early access and work with Landlord’s Contractor (as such term is defined in the Work Letter), Tenant shall have early access to the Premises solely for the completion of certain other improvements consented to by Landlord in accordance with Section 7.3 of this Lease and installation of Tenant’s furniture, fixtures, equipment and cabling no later than July 15, 2009 until the Commencement Date (“Early Access Period”). Such access during the Early Access Period shall be free of Rent. Tenant shall provide Landlord with necessary insurance prior to such Early Access.

 

SECTION 3.3       RIGHT TO EXTEND THIS LEASE .  

 

(a)   Provided that no Event of Default has occurred under any provision of this Lease, either at the time of exercise of the extension right granted herein or at the time of the commencement of such extension, and provided further that Tenant is occupying the entire Premises and has not assigned or sublet any of its interest in this Lease, then Tenant may extend the Term of this Lease for one (1) period of twelve (12) months (the “ Extension Term ”).  Tenant shall exercise its right to extend the Term by and only by delivering to Landlord, not less than six (6) months or more than twelve (12) months prior to the expiration date of the Term, Tenant’s irrevocable written notice of its commitment to extend (the “ Commitment Notice ”).  The Basic Rent payable under the Lease during the Extension Term shall be as set forth under “ Extension Term ” in Exhibit Y attached hereto.

 

(b)   If Tenant properly exercises its right to extend the Term for the Extension Term and Tenant desires to further extend the Term of the Lease beyond the Extension Term for one (1) additional period of twelve (12) months (the “ Discretionary Extension Term ”), Tenant shall deliver such request in writing to Landlord no sooner than twelve (12) months or no later than nine (9) months prior to the expiration of the Extension Term.  Within thirty (30) days of such request, Landlord shall in its sole and absolute discretion either (a) deny such request to extend the Term beyond the Extension Term, or (b) deliver to Tenant in writing Landlord’s determination of the amount that is ninety-five percent (95%) of the then fair market rental value for the Premises (“ FMV Notice ”).  Such determination shall be derived from a written appraisal of the then fair market rental value of the Premises based on comparable facilities in comparable locations prepared by an independent professional appraiser or real estate broker who is a Member of the Appraisal Institute (M.A.I.), or its successor institution, and is experienced

 

 

(c)   If Tenant fails to timely exercise the extension right granted herein within the time period expressly set forth for exercise by Tenant in Section 3.3(a) above, Tenant’s right to extend the Term shall be extinguished and the Lease shall automatically terminate as of the expiration date of the Term, without any extension and without any liability to Landlord.  Tenant’s rights under this Section 3.3 shall belong  to SonicWALL, Inc., a California Corporation, and any Affiliate, as defined in Section 9.6 below, and any other attempted assignment or transfer of such rights shall be void and of no force and effect.  Unless agreed to in a writing signed by Landlord and Tenant, any extension of the Term, whether created by an amendment to this Lease or by a holdover of the Premises by Tenant, or otherwise, shall be deemed a part of, and not in addition to, any duly exercised extension period permitted by this Section 3.3.

 

 

ARTICLE IV.

 

RENT AND OPERATING EXPENSES

SECTION 4.1       BASIC RENT.   From and after the Commencement Date, Tenant shall pay to Landlord without deduction or offset, the rental amount for the Premises shown in Exhibit Y attached hereto (the “ Basic Rent ”), including subsequent adjustments and free rent periods, if any.  The rent shall be due and payable in advance commencing on the Rent Commencement Date (as prorated for any partial month) and continuing thereafter on the first day of each successive calendar month of the Term.  No demand, notice or invoice shall be required for the payment of Basic Rent.  An installment of rent in the amount of one (1) full month’s Basic Rent at the initial rate following the free rent period [* * *] and one (1) month’s estimated Tenant’s Share of Operating Expenses (as defined in Section 4.2, which amount equals Twenty-Three Thousand Forty Dollars ($23,040)) shall be delivered to Landlord concurrently with Tenant’s execution of this Lease and shall be applied against the Basic Rent and Operating Expenses first due hereunder.

SECTION 4.2       OPERATING EXPENSES.

 

(a)   From and after the Rent Commencement Date, Tenant shall pay to Landlord, as additional rent, Tenant’s Share of all Operating Expenses, as defined in Section 4.2(f), incurred by Landlord in the operation of the Building and Site.  The term “ Tenant’s Share ” means one hundred percent (100%) of any Operating Expenses determined by Landlord and Tenant to solely benefit or relate to  the Building, plus twelve and 46/100 percent (12.46%) of any Operating Expenses determined by Landlord to benefit or relate substantially to the Common Area of the Site.

(b)   Prior to the start of each full Expense Recovery Period (as defined in this Section 4.2), Landlord shall give Tenant a written estimate of the amount of Tenant’s Share of Operating Expenses for the applicable Expense Recovery Period.  Any delay or failure by Landlord in providing such estimate shall not relieve Tenant from its obligation to pay Tenant’s Share of Operating Expenses or estimated amounts thereof, if and when Landlord provides such estimate or final payment amount.  Tenant shall pay the estimated amounts to Landlord in equal monthly installments, in advance concurrently with payments of Basic Rent.  If Landlord has not furnished its written estimate for any Expense Recovery Period by the time set forth above, Tenant shall continue to pay monthly the estimated Tenant’s Share of Operating Expenses in effect during the prior Expense Recovery Period; provided that when the new estimate is delivered to Tenant, Tenant shall, at the next monthly payment date, pay any accrued estimated Tenant’s Share of Operating Expenses based upon the new estimate. Any overpayment of Tenant’s Share of Operating Expenses shall be applied to the next Rent coming due, until Tenant is fully reimbursed. For purposes hereof, “ Expense Recovery Period ” shall mean every twelve month period during the Term (or portion thereof for the first and last lease years) commencing March 1st and ending on the last day of February, provided that Landlord shall have the right to change the date on which an Expense Recovery Period commences in which event appropriate

 

 

(c)   Within one hundred twenty (120) days after the end of each Expense Recovery Period, Landlord shall furnish to Tenant a statement (a “ Reconciliation Statement ”) showing in reasonable detail the actual or prorated Tenant’s Share of Operating Expenses incurred by Landlord during such Expense Recovery Period, and the parties shall within thirty (30) days thereafter make any payment or allowance necessary to adjust Tenant’s estimated payments of Tenant’s Share of Operating Expenses, if any, to the actual Tenant’s Share of Operating Expenses as shown by the Reconciliation Statement.  Any delay or failure by Landlord in delivering any Reconciliation Statement shall not constitute a waiver of Landlord’s right to require Tenant to pay Tenant’s Share of Operating Expenses pursuant hereto except that if any Reconciliation Statement is provided more than one (1) year after the expiration of the applicable Expense Recovery Period, such Reconciliation Statement, at Tenant’s option, shall be null and void. .  Any amount due Tenant shall be credited against installments next coming due for Basic Rent and under this Section 4.2, and any deficiency shall be paid by Tenant together with the next installment.  Should Tenant fail to object in writing to Landlord’s determination of Tenant’s Share of Operating Expenses within sixty (60) days following delivery of Landlord’s Reconciliation Statement, Landlord’s determination of Tenant’s Share of Operating Expenses for the applicable Expense Recovery Period shall be conclusive and binding on the parties for all purposes and any future claims to the contrary shall be barred.

 

(d)   Even though this Lease has terminated and the Tenant has vacated the Premises, when the final determination is made of Tenant’s Share of Operating Expenses for the Expense Recovery Period in which this Lease terminates, Tenant shall within thirty (30) days of written notice pay the entire increase over the estimated Tenant’s Share of Operating Expenses already paid.  Conversely, any overpayment by Tenant shall be rebated by Landlord to Tenant not later than thirty (30) days after such final determination.

 

(e)   Not more often than once each calendar year, Tenant, upon thirty (30) days advance written notice to Landlord, at Tenant’s sole cost and expense, may retain an independent certified public accountant engaged on a non-contingency fee basis and reasonably acceptable to Landlord, to review and audit Landlord’s books and records with regard to the Operating Expenses for the Building, Premises and Common Areas and the calculations of Tenant’s proportionate share thereof. If it is determined by such auditors that Tenant overpaid its share of any Operating Expenses, Landlord shall refund to Tenant the amount of such overpayment within thirty (30) days. If it is reasonably determined by such auditors that Tenant underpaid its share of any Operating Expenses, Tenant shall pay to Landlord the amount of such deficiency within thirty (30) days. If it is reasonably determined by such auditors that Tenant overpaid its share of any Operating Expenses by more than ten percent (10%), Landlord shall reimburse Tenant for the reasonable costs of Tenant’s audit.

 

(f)   The term “ Operating Expenses ” shall mean and include all Building Costs, as defined in subsection (g), and Property Taxes, as defined in subsection (h), but shall not be duplicative of any costs for which Tenant is otherwise responsible under the Lease.

 

(g)   The term “ Building Costs ” shall mean all expenses of operation, repair, replacement and maintenance of the Building and Site, including without limitation all appurtenant Common Areas (as defined in Section 6.2), and shall include the following charges by way of illustration but not limitation:  Building exterior maintenance (excluding any maintenance of the foundations, exterior walls, roof and roofing which shall be at Landlord’s sole cost and expense and not an Operating Expense, but including any costs associated with the roof membrane amortized over its useful life); maintenance, repair and replacement of all mechanical systems servicing the Building, including, but not limited to the HVAC system, provided that the replacement of any HVAC component or HVAC unit that has a cost in excess of Ten Thousand Dollars ($10,000) shall be treated as a capital replacement and the cost shall be amortized over the useful life of such component or unit calculated at a market cost of funds; outside area maintenance of the Site (including landscaping and exterior lights serving the Building); insurance premiums and deductibles and/or reasonable premium and deductible equivalents should Landlord elect to self-insure all or any portion of any risk that Landlord is authorized to insure hereunder (including flood insurance premiums); license, permit, and inspection fees; supplies; materials; equipment; tools; costs incurred in connection with compliance with any laws or changes in laws applicable to the Building or Site; the cost of any capital improvements, repairs or replacements (other than as expressly excluded elsewhere in this Lease) provided that such costs are amortized as set forth below; labor; and any expense incurred pursuant to Sections 6.1, 6.2, 7.2, and 10.2

 

 

(h)   Notwithstanding anything contrary in this Section 4.2 or elsewhere in this Lease, the following costs and expenses shall not be included in “ Building Costs ”:

 

(i)   Repair and replacement of the paved surface of the parking lots associated with the Site, unless such repair or replacement is necessitated by damage caused by Tenant or Tenant’s employee, agent, or visitor;

 

(ii)   Repair and replacement of the following structural elements of the Building: the foundations, structural walls, and structural roof systems (but Building Costs shall include any costs associated with the roof membrane amortized over its useful life);

 

(iii)   Repairs, alterations, additions, improvements or replacements needed to rectify or correct  any construction defects related to the original design, materials or construction or workmanship of the Building which exist within Premises as of the Commencement Date;

 

(iv)   Repairs made  in order for Landlord to be in compliance with its representations and warranties set forth above in Section 2.2(d)(i) and and 2.2(d)(ii) or to comply with Landlord’s representations and warranties set forth above in Section 2.2(d)(iii);

 

(v)   Property management fees;

 

(vi)   Depreciation;

 

(vii)   Rent paid or payable under any ground lease or underlying lease to which this Lease is subject, including rent paid to any ground landlord under a ground lease;

 

(viii)   Principal payments of mortgage or other non-operating debts of Landlord;

 

(ix)   Costs of selling, financing or refinancing the Building;

 

(x)   Fines or penalties resulting from any violations of law, negligence or willful misconduct of Landlord or its employees, agents or contractors;

 

(xi)   Any expense for which Landlord has received actual reimbursement;

 

(xii)   Costs that Landlord is entitled to recover under a warranty, ;

 

(xiii)   Legal fees, space planner’s fees, broker’s leasing commissions or other compensation payable to brokers incurred with respect to leasing tenant space in the Site;

 

(xiv)   Legal fees, space planner’s fees, broker’s leasing commissions or other compensation payable to brokers incurred with respect to leasing space in the Building or Site;

 

(xv)   The cost of constructing tenant improvements for any other tenant of the Site;

 

(xvi)   Legal fees, accountant fees, and other expenses incurred in connection with disputes of tenants or other occupants of the Site or associated with the enforcement of the terms of any leases with tenants;

 

(xvii)   Costs incurred due to a violation by Landlord or any other tenant of the terms and conditions of a lease;

 

(xviii)   Costs of any service provided to Tenant or other occupants of the Site for which Landlord is reimbursed;

 

(xix)   Deductibles for earthquake and flood insurance;

 

(xx)   Landlord’s general overhead expenses not related to the Premises;

 

(xxi)   Salaries of any personnel who perform services not in connection with the management, operation, repair or maintenance of the Premises.; and

 

(xxii)   Repairs covered by the proceeds of insurance or from funds provided by Tenant or any other tenant of the Site(including where any other tenant of the Site is obligated to make such repairs or pay the cost of such repairs)

 

(i)   The term “ Property Taxes ” as used herein shall include any form of federal, state, county or local government or municipal taxes, fees, charges or other impositions of every kind (whether general, special, ordinary or extraordinary) related to the ownership, leasing or operation of the Building and the tax parcel on which the Building is located (such parcel being Assessor’s Parcel No. 421-07-031) (the “ Tax Parcel ”), including without limitation, the following: (i) all real estate taxes or personal property taxes levied against the Building and Tax Parcel, as such property taxes may be reassessed from time to time; and (ii) other taxes, charges and assessments which are levied with respect to this Lease or to the Building, and any improvements, fixtures and equipment and other property of Landlord located in the Building, (iii) all assessments and fees for public improvements, services, and facilities and impacts thereon, including without limitation arising out of any Community Facilities Districts, “Mello Roos” districts, similar assessment districts, and any traffic impact mitigation assessments or fees; (iv) any tax, surcharge or assessment which shall be levied in addition to or in lieu of real estate or personal property taxes, other than taxes covered by Article VIII; and (v) taxes based on the receipt of rent (including gross receipts or sales taxes applicable to the receipt of rent), and (vi) costs and expenses incurred in contesting the amount or validity of any Property Tax by appropriate proceedings.  Notwithstanding the foregoing, general net income or franchise taxes or transfer taxes imposed against Landlord shall be excluded.

 

SECTION 4.3        SECURITY DEPOSIT.   Concurrently with Tenant’s delivery of this Lease, Tenant shall deposit with Landlord the sum stated in Exhibit Y attached hereto, to be held by Landlord as security for the full and faithful performance of all of Tenant’s obligations under this Lease (the “ Security Deposit ”). Landlord shall not be required to keep this Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on the Security Deposit.   The Security Deposit may be utilized by Landlord towards the payment of all expenses by Landlord for which Tenant would be required to reimburse Landlord under this Lease.  Upon any Event of Default by Tenant (as defined in Section 14.1), Landlord may, in its sole and absolute discretion and notwithstanding any contrary provision of Civil Code Section 1950.7, except Civil Code Section 1950.7(b), retain, use or apply the whole or any part of the Security Deposit to pay any sum which Tenant is obligated to pay under this Lease including, without limitation, amounts estimated by Landlord as the amounts due it for prospective rent and for damages pursuant to Section 14.2(a)(i) of this Lease and/or Civil Code Section 1951.2, sums that Landlord may expend or be required to expend by reason of the Event of Default by Tenant or any loss or damage that Landlord may suffer by reason of the Event of Default or costs incurred by Landlord in connection with the repair or restoration of the Premises pursuant to Section 15.3 of this Lease upon expiration or earlier termination of this Lease.  In no event shall Landlord be obligated to apply the Security Deposit upon an Event of Default and Landlord’s rights and remedies resulting from an Event of Default, including without limitation, Tenant’s failure to pay Basic Rent, Tenant’s Share of Operating Expenses or any other amount due to Landlord pursuant to this Lease, shall not be diminished or altered in any respect due to the fact that Landlord is holding the Security Deposit.  If any portion of the Security Deposit is applied by Landlord as permitted by this Section, Tenant shall within five (5) days after

 

 

 

ARTICLE V.

 

USES

SECTION 5.1        USE.   Tenant shall use the Premises only for the purposes stated in Item 3 of the Basic Lease Provisions, all in accordance with applicable laws and restrictions and pursuant to approvals to be obtained by Tenant from all relevant and required governmental agencies and authorities.  The parties agree that any contrary use shall be deemed to cause material and irreparable harm to Landlord and shall entitle Landlord to injunctive relief in addition to any other available remedy.  Tenant, at its expense, shall procure, maintain and make available for Landlord’s inspection throughout the Term, all governmental approvals, licenses and permits required for the proper and lawful conduct of Tenant’s permitted use of the Premises.  Tenant shall not use or allow the Premises to be used for any unlawful purpose, nor shall Tenant permit any nuisance or commit any waste in the Premises or the Site.  Tenant shall not perform any work or conduct any business whatsoever in the Site other than inside the Premises.  Tenant shall not do or permit to be done anything which will invalidate or increase the cost of any insurance policy(ies) covering the Building, the Site and/or their contents, and shall comply with all applicable insurance underwriters rules.  Tenant shall comply at its expense with all present and future laws, ordinances, restrictions, regulations, orders, rules and requirements of all governmental authorities that pertain to Tenant or its use of the Premises, including without limitation all federal and state occupational health and safety requirements, whether or not Tenant’s compliance will necessitate expenditures or interfere with its use and enjoyment of the Premises and provided, at all times, that the Landlord shall be responsible for any ADA compliance on and to the exterior of the Building and/or Common Areas unless such expenditures are necessitated by Tenant’s actions or any Alterations made to the Premises by Tenant..  Tenant shall comply at its expense with all present and future covenants, conditions, easements or restrictions now or hereafter affecting or encumbering the Building and/or Site, and any amendments or modifications thereto, including without limitation the payment by Tenant of any periodic or special dues or assessments charged against the Premises or Tenant which may be allocated to the Premises or Tenant in accordance with the provisions thereof.

SECTION 5.2        SIGNS.   Provided Tenant continues to occupy the entire Premises, Tenant shall have the exclusive right to one (1) exterior sign on the Building, and one (1) signage position on the monument sign at the front of the Building, for Tenant’s name and graphics and subject to Landlord’s right of prior approval that such exterior signage is in compliance with the Signage Criteria (defined below).  Except as provided in the foregoing, Tenant shall have no right to maintain signs in any location in, on or about the Premises, the Building or the Site and shall not place or erect any signs that are visible from the exterior of the Building.  The size, location, design, graphics, material, style, color and other physical aspects of any permitted sign shall be subject to Landlord’s written determination, as reasonably determined by Landlord, prior to installation, that signage is in compliance with any covenants, conditions or restrictions encumbering the Premises and approved by the City in which the Premises are located (“ Signage Criteria ”).  Prior to placing or erecting any such signs, Tenant shall obtain and deliver to Landlord a copy of any applicable municipal or other governmental permits and approvals and comply with any applicable insurance requirements for such signage.  Landlord agrees to reasonably cooperate with Tenant, but at no additional cost or expense to Landlord, in obtaining any required permits and approvals for the approved signage.  Tenant shall be responsible for all costs of any permitted sign, including, without limitation, the fabrication, installation, maintenance and removal thereof and the cost of any permits therefor. If Tenant fails to maintain its sign in good condition, or if Tenant fails to remove same upon termination of this Lease and repair and restore any damage caused by the sign or its removal, Landlord may do so at Tenant’s expense.  Landlord shall have the right to temporarily remove any signs in connection with any repairs or maintenance in or upon the Building.  The term “sign” as used in this Section shall include all signs, designs, monuments, displays, advertising materials, logos, banners, projected images, pennants, decals, pictures, notices, lettering, numerals or graphics.

 

SECTION 5.3        HAZARDOUS MATERIALS.

 

(a)   For purposes of this Lease, the term “ Hazardous Materials ” means (i) any “hazardous material” as defined in Section 25501(o) of the California Health and Safety Code, (ii) hydrocarbons, polychlorinated biphenyls or asbestos, (iii) any toxic or hazardous materials, substances, wastes or materials as defined pursuant to any other applicable state, federal or local law or regulation, and (iv) any other substance or matter which may result in liability to any person or entity as a result of such person’s possession, use, storage, release or distribution of such substance or matter under any statutory or common law theory.

 

(b)   Tenant shall not cause or permit any Hazardous Materials to be brought upon, stored, used, generated, released or disposed of on, under, from or about the Premises (including without limitation the soil and groundwater thereunder) without the prior written consent of Landlord, which consent may be given or withheld in Landlord’s sole and absolute discretion.  Notwithstanding the foregoing, Tenant shall have the right, without obtaining prior written consent of Landlord, to utilize within the Premises a reasonable quantity of standard office products that may contain Hazardous Materials, provided however , that (i) Tenant shall  follow all instructions on such packaging with respect to the storage, use and disposal of such products, and shall otherwise comply with all applicable laws with respect to such products, and (ii) all of the other terms and provisions of this Section 5.3 shall apply with respect to Tenant’s storage, use and disposal of all such products.

 

(c)   If the presence of any Hazardous Materials on, under, from or about the Building or the Site caused or permitted by Tenant or its agents, employees, contractors, licensees or invitees results in (i) injury to any person, (ii) injury to or any contamination of the Building or the Site, or (iii) injury to or contamination of any real or personal property wherever situated, Tenant, at its expense, shall promptly take all actions necessary to return the Building and the Site and any other affected real or personal property owned by Landlord to the condition existing prior to the introduction of such Hazardous Materials and to remedy or repair any such injury or contamination, including without limitation, any cleanup, remediation, removal, disposal, neutralization or other treatment of any such Hazardous Materials.  Notwithstanding the foregoing, Tenant shall not, without Landlord’s prior written consent, which consent may be given or withheld in Landlord’s sole and absolute discretion, take any remedial action in response to the presence of any Hazardous Materials on, under, from or about the Premises or the Site or any other affected real or personal property owned by Landlord or enter into any similar agreement, consent, decree or other compromise with any governmental agency with respect to any Hazardous Materials claims; provided however, Landlord’s prior written consent shall not be necessary in the event that the presence of Hazardous Materials on, under, from or about the Premises or the Site or any other affected real or personal property owned by Landlord (i) imposes an immediate threat to the health, safety or welfare of any individual and (ii) is of such a nature that an immediate remedial response is necessary and it is not reasonably practicable  to obtain Landlord’s consent before taking such action.  To the fullest extent permitted by law and except to the extent caused by the fault or negligence of Landlord, Tenant shall indemnify, hold harmless, protect and defend (with attorneys reasonably acceptable to Landlord) Landlord and any successors to all or any portion of Landlord’s interest in the Building and the Site and any other real or personal property owned by Landlord from and against any and all liabilities, losses, damages, diminution in value, judgments, fines, demands, claims, recoveries, deficiencies, costs and expenses (including without limitation attorneys’ fees, court costs and other professional expenses), whether foreseeable or unforeseeable, arising directly or indirectly out of the use, generation, storage, treatment, release, on- or off-site disposal or transportation of Hazardous Materials (A) on, into, from, under or about the Building during the Term regardless of the source of such Hazardous Materials unless caused solely by Landlord or (B) on, into, from, under or about the Premises, the Building or the Site caused or permitted by Tenant, its agents, employees, contractors, licensees or invitees.  Such indemnity obligation shall specifically include, without limitation, Tenant’s proportion of the cost of any required or necessary repair, restoration, cleanup or detoxification of the Premises, the Building and the Site and any other real or personal property owned by Landlord, the preparation of any closure or other required plans, whether such action is required or necessary during the Term or after the expiration of this Lease and any loss of rental due to the inability to lease the Premises or any portion of the Building or Site as a result of such Hazardous Materials, the remediation thereof or any repair, restoration or cleanup related thereto.  If it is at any time discovered that Hazardous Materials have been released on, into, from, under or about the Premises during the Term by  Tenant or its agents, employees, contractors, licensees or invitees, Tenant shall, at Landlord’s request, immediately prepare and submit to Landlord a comprehensive plan, subject to Landlord’s approval, specifying the actions to be taken by Tenant to return the Premises, the Building or the Site  to the condition existing prior to the introduction of such Hazardous Materials.  Upon Landlord’s approval of such plan, Tenant shall, at its

 

 

(d)   To the fullest extent permitted by law, Landlord shall indemnify, hold harmless, protect and defend (with attorneys reasonably acceptable to Tenant) Tenant from and against any and all liabilities, losses, damages, judgments, fines, demands, claims, recoveries, deficiencies, costs and expenses (including without limitation attorneys’ fees, court costs and other professional expenses), whether foreseeable or unforeseeable, arising directly or indirectly out of Landlord’s breach of any of its obligations under this Section 5.3 of the Lease, including, without limitation, its representation and warranty set forth above in Section 2.2(d)(ii). For the purpose of the indemnity provisions hereof, any acts or omissions of Landlord or its officers, directors, employees, agents, or contractors of Landlord shall be strictly attributable to Landlord. The provisions of this Section 5.3(d) shall expressly survive the expiration or sooner termination of this Lease.

 

 

ARTICLE VI.

 

COMMON AREAS; SERVICES

SECTION 6.1       UTILITIES AND SERVICES.   

 

(a)   Tenant shall be responsible for and shall pay promptly, directly to the appropriate supplier, all charges for water, gas, electricity, sewer, heat, light, power, telephone, telecommunications service, refuse pickup, janitorial service, interior landscape maintenance and all other utilities, materials and services furnished directly to Tenant or the Premises or used by Tenant in, on or about the Premises during the Term, together with any taxes thereon.

 

(b)   Landlord shall not be liable for damages or otherwise for any failure or interruption of any utility or other service furnished to the Premises, and no such failure or interruption shall be deemed an eviction or entitle Tenant to terminate this Lease or withhold or abate any rent due hereunder. Notwithstanding the foregoing, in the event services are interrupted for more than five (5) business days or if the interruption or failure of any utilities or services is caused by the negligence or willful misconduct of Landlord, or Landlord’s officers, agents, employees or contractors, Tenant shall be entitled to an abatement of rent to the extent of the interference with Tenant’s use and occupancy of the Premises, with such abatement to commence on the day that Tenant notifies Landlord of the interruption of utilities or services.  Landlord shall at all reasonable times have free access to the Building and Premises to install, maintain, repair, replace or remove all electrical and mechanical installations of Landlord.  Tenant acknowledges that the costs incurred by Landlord related to providing above-standard utilities and services to Tenant, including, without limitation, telephone lines, shall be charged to Tenant.

 

SECTION 6.2        OPERATION AND MAINTENANCE OF COMMON AREAS.   

 

(a)   During the Term, Landlord shall operate and maintain all Common Areas within the Site in the manner Landlord may deem to be appropriate.  The term “ Common Areas ” shall mean all areas of the Site which are not held for exclusive use by persons entitled to occupy space including Tenant, and their respective employees and invitees, including without limitation the cafeteria located on the Site (the “ Cafeteria ”) as more particularly shown on the site plan attached hereto as Exhibit B , the conference facility located on the Site  (the “ Conference Facility ”) as more particularly shown as “LC1” and “LC2” on the site plan attached hereto as Exhibit B , parking areas and structures, driveways, sidewalks, landscaped and planted areas, and electrical and utility rooms and roof access entries, if any, in the Building.

 

(b)   An equitable pro-rata portion of costs incurred by Landlord for the maintenance and operation of the Cafeteria (the “ Cafeteria Fee ”) shall be included in Building Costs on an “open book” basis, such Cafeteria Fee to be Two Thousand Five Hundred Dollars ($2,500.00) per month subject to adjustment should Landlord’s actual costs to operate the Cafeteria increase.  Any items purchased at the Cafeteria shall be paid for by Tenant or Tenant’s employees on a point-of-purchase basis.

 

(c)   The Conference Facility shall be available for Tenant’s use at no cost to Tenant one (1) time per annual quarter for a one (1) day period of use, subject to Landlord’s reasonable rules and regulations related to scheduling, access, security, and cleaning requirements (including payment by Tenant of a reasonable cleaning fee) (the “ Conference Facility Regulations ”).  Any additional use of the Conference Facility shall be at Tenant’s cost and subject to the Conference Facility Regulations.  Tenant’s quarterly use rights are not cumulative and each quarterly use right expires if not used in such annual quarter.

 

SECTION 6.3       USE OF COMMON AREAS.   The occupancy by Tenant of the Premises and Building shall include the use of the Common Areas as provided in this Article VI, subject, however, to compliance with all  non-discriminatory rules and regulations as are prescribed from time to time by Landlord for use of the Common Areas.  Landlord shall at all times during the Term have exclusive control of the Common Areas, and may restrain or permit any use or occupancy, except as authorized by Landlord’s rules and regulations for use of the Common Areas.  Tenant shall keep the Common Areas clear of any obstruction or unauthorized use related to Tenant’s operations or use of Premises, including without limitation, planters and furniture. Provided Landlord uses reasonable efforts not to interfere with the conduct of Tenant’s business at the Premises, nothing in this Lease shall be deemed to impose liability upon Landlord for any damage to or loss of the property of, or for any injury to, Tenant, its invitees or employees except to the extent caused by the fault of negligence of Landlord.  Landlord may temporarily close any portion of the Common Areas for repairs, remodeling and/or alterations, to prevent a public dedication or the accrual of prescriptive rights, or for any other reason deemed sufficient by Landlord, without liability to Tenant.  Landlord’s temporary closure of any portion of the Common Areas for such purposes shall not deprive Tenant of reasonable access to the Premises.

 

SECTION 6.4       PARKING .  Tenant shall be entitled to use its allocated share of the vehicle parking spaces set forth in Item 15 of the Basic Lease Provisions on those portions of the Common Areas designated by Landlord for parking at no additional cost or expense during the Term, including any extension thereof.  Tenant shall not use more than its allocated share of vehicle parking spaces.  All parking spaces shall be used only for parking of vehicles no larger than full size passenger automobiles, sport utility vehicles or pickup trucks, with the exception that no more than two (2) recreational vehicles owned by employees of Tenant, who have requirements to be on site from time to time for twenty-four hour per day, may use certain parking spaces reasonably designated by Landlord for such use for no more than a seventy-two (72) hour period.  Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or Tenant’s employees, suppliers, shippers, customers or invitees to be loaded, unloaded or parked in areas other than those designated by Landlord for such activities.  If Tenant permits or allows any of the prohibited activities described above, then Landlord shall have the right, without notice, in addition to such other rights and remedies that Landlord may have, to remove or tow away the vehicle involved and charge the costs to Tenant.  Parking within the Building and Common Areas shall be limited to striped parking stalls, and no parking shall be permitted in any driveways, access ways or in any area which would prohibit or impede the free flow of traffic within the Common Areas.  There shall be no parking of any vehicles for longer than a seventy-two (72)  hour period unless otherwise authorized by Landlord, and vehicles which have been abandoned or parked in violation of the terms hereof may be towed away at the owner’s expense.  Nothing contained in this Lease shall be deemed to create liability upon Landlord for any damage to motor vehicles of visitors or employees, for any loss of property from within those motor vehicles, or for any injury to Tenant, its visitors or employees, unless ultimately determined to be caused by the  active negligence or willful misconduct of Landlord.  Tenant shall be liable for any damage to the parking areas caused by Tenant or Tenant’s employees, suppliers, shippers, customers or invitees, including without limitation damage from excess oil leakage.  Tenant shall have no right to install any fixtures, equipment or personal property in the parking areas.

 

SECTION 6.5       CHANGES AND ADDITIONS BY LANDLORD.   Landlord reserves the right to make alterations or additions to the Site, or to the attendant fixtures, equipment and Common Areas.  Landlord may at any time relocate or remove any of the driveways, sidewalks, landscaped and planted areas and parking areas of the Common Areas, from time to time.  No change shall entitle Tenant to any abatement of rent or other claim against Landlord.  No such change shall deprive Tenant of reasonable access to or use of the Premises.

 

ARTICLE VII.

 

MAINTAINING THE PREMISES

 

SECTION 7.1       TENANT’S MAINTENANCE AND REPAIR.   Subject to Section 2.2, Section 7.2 and Article XI, Tenant at its sole expense shall maintain and make all repairs and replacements necessary to keep the interior of the Premises and Building in the condition as existed on the Commencement Date (or on any later date that any approved improvements may have been installed), excepting ordinary wear and tear, including without limitation all interior glass, doors, door closures, hardware, fixtures, electrical, plumbing, fire extinguisher equipment and other equipment installed in the Premises and all Alterations constructed by or for Tenant pursuant to Section 7.3 below.  Any damage or deterioration of the Premises shall not be deemed ordinary wear and tear if the same could have been prevented by good maintenance practices by Tenant.    All repairs and replacements shall be at least equal in quality to the original work, shall be made only by a licensed contractor reasonably approved by Landlord. Landlord may impose reasonable restrictions and requirements with respect to repairs and replacements, as provided in Section 7.3, and the provisions of Section 7.4 shall apply to all repairs and replacements.  If Tenant fails to properly maintain and/or repair the Premises or the Building as herein provided following Landlord’s notice and the expiration of the applicable cure period (or earlier if Landlord determines that such work must be performed prior to such time in order to avoid damage to the Premises or Building or other detriment), then Landlord may elect, but shall have no obligation, to perform any repair or maintenance required hereunder on behalf of Tenant and at Tenant’s expense, and Tenant shall reimburse Landlord upon demand for all costs incurred. Notwithstanding the foregoing, if the nature of any Tenant repair, maintenance or replacement obligation is of a capital nature, the same shall be treated as a capital expense as set forth in Section 4.2(g) above with the Landlord paying for the repair, maintenance or replacement and Tenant paying to Landlord in a lump sum the amortized amount of the cost of repair covering the remaining term of the Lease.

 

SECTION 7.2       LANDLORD’S MAINTENANCE AND REPAIR.   Subject to Section 4.2, Section 7.1 and Article XI, Landlord shall at Landlord’s cost provide service, maintenance and repair with respect to any air conditioning, ventilating or heating equipment (“ HVAC ”) which serves the Premises (exclusive, however, of supplemental HVAC equipment installed by Tenant and serving only the Premises) and shall maintain in good repair the roof, foundations, footings, the exterior surfaces of the exterior walls of the Building (including exterior glass), the structural elements of the Building, except to the extent caused by the fault or negligence of Tenant  its agents, employees, invitees, subtenants or contractors.  Landlord shall have the right to employ or designate any reputable person or firm, including any employee or agent of Landlord or any of Landlord’s affiliates or divisions, to perform any service, repair or maintenance function.  Landlord need not make any other improvements or repairs except as specifically required under this Lease, and nothing contained in this Section shall limit Landlord’s right to reimbursement from Tenant for maintenance, repair costs and replacement costs as provided elsewhere in this Lease. Tenant understands that it shall not perform any maintenance or make any repairs or replacements at Landlord’s expense and shall have no right to any rental offset for any maintenance, repairs or replacements performed by Tenant.  Tenant further understands that Landlord shall not be required to make any repairs to the roof, foundations, footings, the exterior surfaces of the exterior walls of the Building (excluding exterior glass), structural elements of the Building, or HVAC, unless and until either Landlord becomes aware of the need for such repair or Tenant has notified Landlord in writing of the need for such repair and Landlord shall have a reasonable period of time thereafter to commence and complete said repair, if warranted.

 

SECTION 7.3        ALTERATIONS.   

 

(a)   Except as otherwise provided in this Section, Tenant shall make no alterations, additions, fixtures or improvements (“ Alterations ”)   to the Premises or the Building, including the front lobby area,  without the prior written consent of Landlord, which consent may be granted or withheld in Landlord’s sole and absolute discretion.    In the event that any requested Alteration would result in a change from Landlord’s building standard materials and specifications (“ Standard Improvements ”), Landlord may withhold consent to such Alteration in its sole and absolute discretion.  In the event Landlord so consents to a change from the Standard Improvements (such change being referred to as a “ Non-Standard Improvement ”), Tenant shall be responsible for the cost of replacing such Non-Standard Improvement with the applicable Standard Improvement (“ Replacements ”) which Replacements shall be completed prior to the Expiration Date or earlier termination of this Lease.  Landlord shall not unreasonably withhold or delay its consent to any Alterations which cost less than Fifty Thousand Dollars

 

 

(b)   Landlord may impose any condition to its consent, including but not limited to a requirement that the installation and/or removal of all Alterations and Replacements be covered by a lien and completion bond satisfactory to Landlord in its sole and absolute discretion and requirements as to the manner and time of performance of such work.  Landlord shall in all events have the right to approve prior to the commencement of any work the contractor performing the installation and removal of Alterations and Replacements and Tenant shall not permit any contractor not approved by Landlord to perform any work on the Premises or on the Building.  Tenant shall obtain all required permits for the installation and removal of Alterations and Replacements and shall perform the installation and removal of Alterations and Replacements in compliance with all applicable laws, regulations and ordinances, including without limitation the Americans with Disabilities Act, all covenants, conditions and restrictions affecting the Site, and the Rules and Regulations as described in Article XVII.  If any governmental entity requires, as a condition to any proposed Alterations or Replacements by Tenant, that improvements be made to the Common Areas (for example, a change to the number of required disabled parking spaces needed in the Common Areas as a result of changes made by Tenant within the Premises), and if Landlord consents to such improvements to the Common Areas (which consent may be withheld in the sole and absolute discretion of Landlord), then Tenant shall, at Tenant’s sole expense, make such required improvements to the Common Areas in such manner, utilizing such materials, and with such contractors, architects and engineers as Landlord may require in its sole and absolute discretion.  Landlord shall have the right, but not the obligation, to elect to make any such improvements to be made to the Common Areas at Tenant’s expense, in which case Tenant shall reimburse Landlord upon demand for all costs incurred in making such improvements.

 

(c)   Any request for Landlord’s consent to any proposed Alterations shall be made in writing and shall contain architectural plans describing the work in detail reasonably satisfactory to Landlord.  Landlord may elect to cause its architect to review Tenant’s architectural plans.  Should the work proposed by Tenant and consented to by Landlord modify the basic floor plan of the Premises, then Tenant shall, at its expense, furnish Landlord with as-built drawings and CAD disks compatible with Landlord’s systems and standards.

 

(d)   Unless Landlord otherwise agrees in writing, all Alterations made or affixed to the Premises, the Building or to the Common Area (excluding moveable trade fixtures and furniture), including without limitation all Tenant Improvements constructed pursuant to the Work Letter (except as otherwise provided in the Work Letter) and all telephone and data cabling, shall become the property of Landlord and shall be surrendered with the Premises at the end of the Term; except that: Landlord may, by notice to Tenant given either prior to or within ten (10) days following the expiration or termination of this Lease, require Tenant to:

 

(i)   Remove by the Expiration Date, or sooner termination date of this Lease, or within ten (10) days following notice to Tenant that such removal is required if notice is given following the Expiration Date or sooner termination, all or any of the Alterations installed either by Tenant or by Landlord at Tenant’s request, including performing the restoration work required under Section 15.3(b), but excluding all other Tenant Improvements constructed pursuant to the Work Letter and all telephone and data cabling; and

 

(ii)   To repair any damage to the Premises, the Building or the Common Area arising from that removal and restore the Premises to its condition prior to making such Alterations.

 

SECTION 7.4        MECHANIC’S LIENS .  Tenant shall keep the Premises and the Site free from any liens arising out of any services or work performed, materials furnished, or obligations incurred by or for Tenant.  Upon request by Landlord, Tenant shall promptly (but in no event later than fifteen (15) calendar days following such request) cause any such lien to be released by posting a bond in accordance with California Civil Code Section 3143

 

 

SECTION 7.5       ENTRY AND INSPECTION.   Landlord shall at all reasonable times, upon written or oral notice (except in emergencies, when no notice shall be required) have the right to enter the Building and Premises to inspect them, to supply services in accordance with this Lease, to perform any work required or permitted to be performed by Landlord within the Premises, to have access to install, repair, maintain, replace or remove all electrical and mechanical installations of Landlord and to protect the interests of Landlord in the Premises, and to show the Premises to prospective or actual purchasers or encumbrance holders (or, during the last one hundred and eighty (180) days of the Term or when an Event of Default exists, to place upon the Premises any usual or ordinary “for lease” signs and exhibit the Premises to prospective tenants at reasonable hours), all without being deemed to have caused an eviction of Tenant and without abatement of rent except as provided elsewhere in this Lease.  Landlord shall have the right, if desired, to retain a key which unlocks all of the doors in the Premises, excluding Tenant’s vaults and safes, and Landlord shall have the right to use any and all means which Landlord may deem proper to open the doors in an emergency in order to obtain entry to the Premises, and any entry to the Premises obtained by Landlord as provided in this Section 7.5 shall not be deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or any eviction of Tenant from the Premises. Landlord shall at all times use reasonable efforts not to interfere with the conduct of Tenant’s business at the Premises.

 

 

ARTICLE VIII.

 

TAXES AND ASSESSMENTS ON TENANT’S PROPERTY

 

Tenant shall be liable for and shall pay, prior to delinquency, all taxes and assessments levied against all personal property of Tenant located in the Premises.

 

 

ARTICLE IX.

 

ASSIGNMENT AND SUBLETTING

 

SECTION 9.1       TRANSFERS.   Tenant shall not, without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed as further described below: (i) directly or indirectly assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, by operation of law or otherwise, (ii) sublet the Premises or any part thereof, (iii) permit the use of the Premises by any entity or person other than Tenant and its employees (all of the foregoing are hereinafter sometimes referred to collectively as “ Transfers ” and any Person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “ Transferee ”), or (iv) advertise the Premises or Lease for Transfers.  If Tenant shall desire Landlord’s consent to any Transfer, Tenant shall notify Landlord in writing, which notice shall include: (a) the proposed effective date (which shall not be less than thirty (30) nor more than one hundred eighty (180) days after Tenant’s notice), (b) the portion of the Premises to be Transferred (herein called the “ Subject Space ”), (c) the terms of the proposed Transfer and the consideration therefor, the name, address and background information concerning the proposed Transferee, and a true and complete copy of all proposed Transfer documentation, and (d) financial statements (balance sheets and income/expense statements for the current and prior three (3) years) of the proposed Transferee, in form and detail reasonably satisfactory to Landlord, certified by an officer, partner or owner of the Transferee, and any other information to enable Landlord to determine the financial

 

 

SECTION 9.2        APPROVAL.   Landlord shall approve or disapprove the proposed Transfer within ten (10) business days of receipt of Tenant’s notice.  Landlord shall not unreasonably withhold its consent to any proposed Transfer of the Subject Space to the Transferee on the terms specified in Tenant’s notice.  The parties hereby agree that it shall be reasonable under this Lease and under any applicable