EXHIBIT 10.7 SUBLEASE By And Between Juniper Networks, Inc., a Delaware corporation as Subtenant and Google Inc., a Delaware corporation as Sublandlord August 18, 2014 1194 N. Mathilda Avenue, Sunnyvale, California (Building 1) -------------------------------------------------------------------------------- TABLE OF CONTENTS ARTICLE 1 REFERENCE 1.1 References ARTICLE 2 LEASED PREMISES, TERM AND POSSESSION 2.1 Demise Of Leased Premises 2.2 Right To Use Outside Areas 2.3 Sublease Commencement Date And Sublease Term 2.4 Intentionally omitted 2.5 Acceptance Of Leased Premises 2.6 Surrender Of Possession ARTICLE 3 RENT AND LATE CHARGES 3.1 Base Monthly Rent 3.2 Additional Rent 3.3 Audit 3.4 Intentionally omitted 3.5 Year-End Adjustments 3.6 Late Charge, And Interest On Rent In Default 3.7 Payment Of Rent 3.8 Prepaid Rent ARTICLE 4 USE OF LEASED PREMISES AND OUTSIDE AREA 4.1 Permitted Use 4.2 General Limitations On Use 4.3 Noise And Emissions 4.4 Trash Disposal 4.5 Parking 4.6 Signs 4.7 Compliance With Laws And Private Restrictions 4.8 Compliance With Insurance Requirements 4.9 Sublandlord’s Right To Enter 4.10 Use Of Outside Areas 4.11 Environmental Protection 4.12 Rules And Regulations 4.13 Reservations ARTICLE 5 REPAIRS, MAINTENANCE, SERVICES AND UTILITIES 5.1 Repair And Maintenance (a) Subtenant’s Obligations (b) Head Landlord’s Obligation i. -------------------------------------------------------------------------------- 5.2 Utilities 5.3 Security 5.4 Energy And Resource Consumption 5.5 Limitation Of Sublandlord’s Liability ARTICLE 6 ALTERATIONS AND IMPROVEMENTS 6.1 By Subtenant 6.2 Ownership Of Improvements 6.3 Alterations Required By Law 6.4 Liens ARTICLE 7 ASSIGNMENT AND SUBLETTING BY SUBTENANT 7.1 Permitted Assignments 7.2 Sublandlord’s Consent 7.3 Merger, Reorganization, or Sale of Assets 7.4 Sublandlord’s Election; Recapture Option 7.5 Conditions To Sublandlord’s Consent 7.6 Assignment Consideration And Excess Rentals Defined 7.7 Payments 7.8 Good Faith 7.9 Effect Of Sublandlord’s Consent ARTICLE 8 LIMITATION ON SUBLANDLORD’S LIABILITY AND INDEMNITY 8.1 Limitation On Sublandlord’s Liability And Release 8.2 Subtenant’s Indemnification Of Sublandlord 8.3 Sublandlord’s Indemnification Of Subtenant ARTICLE 9 INSURANCE 9.1 Subtenant’s Insurance 9.2 Sublandlord’s Insurance 9.3 Mutual Waiver Of Subrogation ARTICLE 10 DAMAGE TO LEASED PREMISES 10.1 Duty To Restore 10.2 Insurance Proceeds 10.3 Sublandlord’s Right To Terminate 10.4 Subtenant’s Right To Terminate 10.5 Subtenant’s Waiver 10.6 Abatement Of Rent ARTICLE 11 CONDEMNATION 11.1 Subtenant’s Right To Terminate ii. -------------------------------------------------------------------------------- 11.2 Sublandlord’s Right To Terminate 11.3 Restoration 11.4 Temporary Taking 11.5 Division Of Condemnation Award 11.6 Abatement Of Rent 11.7 Taking Defined ARTICLE 12 DEFAULT AND REMEDIES 12.1 Events Of Subtenant’s Default 12.2 Sublandlord’s Remedies 12.3 Sublandlord’s Default And Subtenant’s Remedies 12.4 Subtenant’s Waiver 12.5 Sublandlord Exculpation 12.6 Subtenant Exculpation ARTICLE 13 CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT 13.1 Corporate Authority 13.2 Brokerage Commissions 13.3 Entire Agreement 13.4 Sublandlord’s Representations ARTICLE 14 OPTION TO EXTEND SUBLEASE EXPIRATION DATE ARTICLE 15 HEAD LANDLORD CONSENT ARTICLE 16 TELEPHONE AND NETWORK CABLE SERVICE 16.1 Service Excluded ARTICLE 17 HEAD LEASE 17.1 Head Lease 17.2 Head Lease Covenants 17.3 Head Landlord 17.4 Head Landlord Consent or Approval 17.5 Head Lease Termination 17.6 Encumbering Title 17.7 No Amendment Or Waiver ARTICLE 18 GENERAL PROVISIONS 18.1 Taxes On Subtenant’s Property 18.2 Holding Over 18.3 Subordination To Mortgages 18.4 Subtenant’s Attornment Upon Foreclosure iii. -------------------------------------------------------------------------------- 18.5 Mortgagee Protection 18.6 Estoppel Certificate 18.7 Subtenant’s Financial Information 18.8 Transfer By Sublandlord 18.9 Force Majeure 18.10 Notices 18.11 Attorneys’ Fees 18.12 Definitions 18.13 General Waivers 18.14 Miscellaneous 18.15 Cooperation 18.16 Confidentiality 18.17 Subtenant’s Costs Of Sublease 18.18 CASp Inspection 18.19 Energy Disclosure Requirements iv. -------------------------------------------------------------------------------- SUBLEASE THIS SUBLEASE, dated August 18, 2014 for reference purposes only, is made by and between Juniper Networks, Inc., a Delaware corporation (“Subtenant”) and Google Inc., a Delaware corporation (“Sublandlord”), to be effective and binding upon the parties as of the “Assignment Date,” as that term is defined hereinbelow (also referred to herein as the “Effective Date” of this Sublease). R E C I T A L S A. FSP-Sunnyvale Office Park, LLC (“Head Landlord”) (as successor-in-interest to, among others, Sunnyvale Office Park, L.P. and Mathilda Associates LLC), as landlord, and Subtenant, as tenant, are parties to that certain Lease dated June 18, 1999, as amended by that certain First Amendment to Lease dated February 28, 2000, as further amended by that certain Second Amendment to Lease dated October 14, 2009, and as further amended by that certain Consent to Assignment and Third Amendment to Lease dated of even date herewith (collectively, the “Head Lease”), for approximately 144,315 rentable square feet of space (“Leased Premises”) in the building located at 1194 N. Mathilda Avenue, Sunnyvale, California (the “Building”). The Head Lease term is due to expire June 30, 2020. B. Concurrently with the mutual execution of this Sublease, Subtenant is assigning to Sublandlord, with the consent of Head Landlord and Head Landlord’s lender (the effective date of such assignment being referred to herein as the “Assignment Date”), all of Subtenant’s right, title and interest in and to: (i) the Head Lease; (ii) that certain Lease by and between Head Landlord (as successor-in-interest to, among others, Sunnyvale Office Park, L.P. and Mathilda Associates LLC), as landlord, and Subtenant, as tenant, dated February 28, 2000, as amended by that certain First Amendment to Lease dated October 14, 2009, and as further amended by that certain Consent to Assignment and Second Amendment to Lease dated of even date herewith (collectively, the “Building 2 Lease”), for approximately 122,435 rentable square feet of space (“Building 2 Premises”) in the building located at 1184 N. Mathilda Avenue, Sunnyvale, California (“Building 2”), and due to expire October 31, 2021; and (ii) that certain Lease by and between Head Landlord (as successor-in-interest to, among others, Sunnyvale Office Park, L.P. and Mathilda Associates II LLC), as landlord, and Subtenant, as tenant, dated August 15, 2000, as amended by that certain Amendment No. 1 to Lease dated January 24, 2002, as further amended by that certain Amendment No. 2 to Lease dated October 14, 2009, and as further amended by that certain Consent to Assignment and Amendment No. 3 to Lease dated of even date herewith (collectively, the “Building 3 Lease”), for approximately 158,075 rentable square feet of space (“Building 3 Premises”) in the building located at 1220 N. Mathilda Avenue, Sunnyvale, California (“Building 3”), and due to expire November 30, 2022. C. Head Landlord is the current owner of the Building, Building 2 and Building 3. D. This Sublease is and shall be at all times subject and subordinate to the Head Lease as further described in Article 17 below. 1 -------------------------------------------------------------------------------- A G R E E M E N T ARTICLE 1 REFERENCE 1.1 References. All references in this Sublease (subject to any further clarifications contained in this Sublease) to the following terms shall have the following meaning or refer to the respective address, person, date, time period, amount, percentage, calendar year or fiscal year as below set forth: Sublandlord’s Address for Notice: Google Inc. 1600 Amphitheatre Parkway Mountain View California 94043 Attention: Lease Administration with copies to: Google Inc. 1600 Amphitheatre Parkway Mountain View California 94043 Attention: Legal Department / RE Matters and Allen Matkins Leck Gamble Mallory & Natsis LLP Three Embarcadero Center, 12th Floor San Francisco California 94111-4074 Attention: Lee A. Edlund, Esq. Sublandlord’s Representative: Phone Number: Rebecca Mashhadian 715-328-4540 Subtenant’s Address for Notices: Juniper Networks, Inc. 1133 Innovation Way Building A Sunnyvale California 94089 Subtenant’s Representative: Phone Number: Troy Ward 715-328-4540 Delivery Date: Same at the Effective Date. Sublease Commencement Date: Same as the Effective Date. Sublease Term: Approximately twenty-two (22) months. 2 -------------------------------------------------------------------------------- Sublease Expiration Date: June 30, 2016, subject to extension pursuant to Article 14 below, unless earlier terminated in accordance with the terms of this Sublease. Options to Renew: None. First Month’s Prepaid Rent: None (see Section 3.8). Subtenant’s Security Deposit: None. Late Charge Amount: Five Percent (5%) of the delinquent amount. Subtenant’s Required Liability Coverage: $5,000,000 Combined Single Limit. Sublandlord’s Broker: CBRE, Inc. Subtenant’s Broker: Jones Lang LaSalle. Property: That certain real property situated in the City of Sunnyvale, County of Santa Clara, State of California, improved with two (2) building(s) (i.e., the Building and Building 2), which real property is shown on the Site Plan attached hereto as Exhibit “A” and is commonly known as or otherwise described as Sunnyvale Office Park; provided that, if Head Landlord treats Building 3 and the real property on which it is situated as part of the “Property,” then the same shall be included for all purposes of this Sublease. Building: That certain building on the Property in which the Leased Premises are located commonly known as 1194 N. Mathilda Avenue, which Building is shown outlined on Exhibit “B” hereto. Outside Areas: The “Outside Areas” shall mean all areas which are located outside of and contiguous to the Building, as shown on the Site Plan, attached as Exhibit “A”, such as pedestrian walkways, parking areas, landscaped area, open areas and enclosed trash disposal areas. Leased Premises: All the interior space within the Building, including stairwells, connecting walkways, and atriums, to consist of approximately 144,315 rentable square feet of space and, for purposes of this Sublease, agreed to contain said number of square feet. 3 -------------------------------------------------------------------------------- Subtenant’s Expense Share: The term “Subtenant’s Expense Share” shall mean the percentage obtained by dividing the rentable square footage of the Leased Premises at the time of calculation by the rentable square footage of the Building and multiplying by one hundred. Such percentage shall be 100% when delivered to Subtenant. In the event that the rentable square footage of the Leased Premises is changed*, Subtenant’s Expense Share shall be recalculated to equal the percentage described in the first sentence of this paragraph, so that the aggregate Subtenant’s Expense Share of all tenants of the Building shall equal 100%. (* subject to equitable adjustment during the Sublease Term due to recapture or other surrender.) Subtenant Property Share: The term “Subtenant’s Property Share” shall mean the percentage obtained by dividing the rentable square footage of the Leased Premises at the time of calculation by the rentable square footage of all buildings currently located on the Property and multiplying such fraction by one hundred. Subtenant’s Property Share for the Building (144,315/266,750 x 100) = approximately 54% [or (144,315/424,825 x 100) = approximately 34% if Head Landlord treats Building 3 as part of the Property] In the event that any portion of the Property is sold by Head Landlord, or the rentable square footage of the Leased Premises, Building or the Property is otherwise changed, Subtenant’s Property Share shall be recalculated to equal the percentage described in the first sentence of this paragraph, so that the aggregate of all tenants of the Property shall equal 100%. Base Monthly Rent: The term “Base Monthly Rent” shall mean the following: Period: Sublease Commencement Date – 6/30/15 7/1/15 – 6/30/16 7/1/16 – 12/31/16** Monthly Amount: $416,369.75* $428,990.39 $421,399.80 *subject to payment made by Subtenant directly to Head Landlord in advance of the Sublease Commencement Date, which may be applicable to any period following the Sublease Commencement Date and which shall be recognized by Head Landlord and Sublandlord in the Consent Agreement (as defined in Article 15 below) (see Section 3.8 below). ** to the extent applicable if Subtenant timely and properly exercises the Expiration Extension Option (as defined in Article 14 below). 4 -------------------------------------------------------------------------------- Permitted Use: General Office, research and development, marketing, sales, and other related lawful uses. Exhibits: The term “Exhibits” shall mean the Exhibits of this Sublease which are described as follows: Exhibit “A” – Site Plan showing the Property, the Outside Areas and delineating the Building in which the Leased Premises are to be located. Exhibit “B” – Plan showing Leased Premises. Exhibit “C” – Sublease Commencement Date Certificate. Exhibit “D” – Form of Subtenant Estoppel Certificate. Exhibit “E” – Leased Premises Surrender Work. 5 -------------------------------------------------------------------------------- ARTICLE 2 LEASED PREMISES, TERM AND POSSESSION 2.1 Demise Of Leased Premises. Sublandlord hereby leases to Subtenant and Subtenant hereby leases from Sublandlord, for the Sublease Term and upon the terms and subject to the conditions of this Sublease, that certain Leased Premises described in Article 1 as the Leased Premises in its “as is” and “with all faults” condition (it being understood that Subtenant has been occupying the Leased Premises pursuant to the Head Lease), reserving and excepting to Sublandlord the right to assignment consideration and excess rentals as provided in Article 7 below. Subtenant’s lease of the Leased Premises, together with the appurtenant right to use the Outside Areas as described in Paragraph 2.2 below, shall be conditioned upon and be subject to the continuing compliance by Subtenant with (i) all the terms and conditions of this Sublease, (ii) all Laws governing the use of the Leased Premises, Outside Areas and the Property, (iii) all Private Restrictions, easements and other matters now of public record respecting the use of the Leased Premises, Outside Areas and the Property, and (iv) all reasonable rules and regulations from time to time established by Head Landlord. 2.2 Right To Use Outside Areas. As an appurtenant right to Subtenant’s right to the use and occupancy of the Leased Premises, Subtenant shall have the right to use the Outside Areas in conjunction with its use of the Leased Premises solely for the purposes for which they were designated and intended and for no other purposes whatsoever. Subtenant’s right to so use the Outside Areas shall be subject to the limitations on such use described in Article 1. Subtenant’s right to so use the Outside Areas shall terminate concurrently with any termination of this Sublease. Provided that Subtenant named on the face of this Sublease or any Permitted Assignee is the lessee of the entire Leased Premises Sublandlord agrees that Subtenant shall have the right, subject to the terms and conditions of Section 2.6 and Article 6 – Alterations And Improvements below, to seek the consent of the Head Landlord in writing to make alterations or improvements to the Outside Areas; provided that, in all instances any such consented to alterations or improvements to the Outside Areas shall be subject to a restoration obligation by Subtenant prior to the end of the Sublease Term or upon any termination of this Sublease, all at Subtenant’s sole cost and expense, to the condition immediately prior to any alteration or improvement being undertaken by Subtenant and to the reasonable satisfaction of Sublandlord and Head Landlord. Nothing in this Section 2.2 shall be construed as an obligation upon Subtenant to perform alterations or improvements to the Outside Areas during the Sublease Term. Subtenant shall at all times during the Term and any extension thereof, indemnify, defend and hold harmless Sublandlord for any and all costs, expenses, damages or losses incurred by Sublandlord due to Subtenant’s failure to restore the Outside Areas upon the surrender or earlier termination of this Sublease and immediately upon demand reimburse Sublandlord for all costs or expenses incurred by Sublandlord as a result of any failure by Subtenant to so restore as required by this Section 2.2, including any legal fees, costs and expenses. Such Subtenant indemnity and reimbursement obligation shall expressly survive any termination of the Sublease or any surrender of all or a portion of the Leased Premises and the parties agree that this provision may not be waived by Sublandlord in any circumstances whatsoever. 2.3 Sublease Commencement Date And Sublease Term. The term of this Sublease shall begin, and the “Sublease Commencement Date” shall be deemed to have occurred on the Effective Date. The term of this Sublease shall end on the Sublease Expiration Date (as set forth in Article 1, except as otherwise expressly provided in this Sublease). The Sublease term shall be that period of time commencing on the Sublease Commencement Date and ending on the Sublease Expiration Date (the “Sublease Term”). Upon the request of either party, Sublandlord and Subtenant shall memorialize the actual Sublease Commencement Date by entering in to the Sublease Commencement Date Certificate attached as Exhibit “C” to this Sublease. 6 -------------------------------------------------------------------------------- 2.4 Intentionally omitted. 2.5 Acceptance Of Leased Premises. It is agreed that by continuing to occupy the Leased Premises as of the Effective Date, Subtenant formally accepts the Leased Premises and acknowledges the Leased Premises to be in good order and repair and in tenantable condition and as of the Effective Date no grounds exist for Subtenant to withhold rent due to Building condition. 2.6 Surrender Of Possession. Immediately prior to the expiration or upon the sooner termination of this Sublease, Subtenant, at Subtenant’s sole cost and expense, shall remove all of Subtenant’s signs from the exterior of the Building, if any, and Outside Areas, if any, shall perform all work described in Exhibit “E” attached hereto and incorporated herein, shall remove all of Subtenant’s furniture (including, without limitation, chairs, tables, and office and cubicle furniture), supplies, wall decorations and other personal property from within the Leased Premises, the Building and the Outside Areas, and shall vacate and surrender the Leased Premises, the Building, the Outside Areas for the Property to Sublandlord in the same condition, broom clean, as existed at the Effective Date, with all Building systems and equipment in good working order and condition, damage by casualty or condemnation (which events shall be governed by Articles 10 and 11) and reasonable wear and tear excepted. Except for such reasonable wear and tear, Subtenant shall (i) repair all damage to the Leased Premises, the exterior of the Building and the Outside Areas caused by Subtenant’s removal of Subtenant’s property, (ii) patch and refinish, to Head Landlord’s reasonable satisfaction, all penetrations made by Subtenant or its employees to the roof, floor, interior or exterior walls or ceiling of the Leased Premises and the Building, whether such penetrations were made with Sublandlord’s approval or not, (iii) repair or replace all ceiling tiles and wall coverings, provided that the same shall not apply in circumstance where Head Landlord agrees pursuant to an amendment to Head Lease that Sublandlord shall not be required to replace floor coverings or damaged ceiling tiles upon the expiration or sooner termination of the Head Lease (it being understood that no floor coverings in the Premises shall be deemed to have a useful life that extends beyond the expiration or sooner termination of the Head Lease), (iv) repair all damage caused by Subtenant after the Effective Date to the exterior surface of the Building and the paved surfaces of the Outside Areas and, where necessary, replace or resurface same. Additionally, to the extent that Sublandlord shall have notified or is deemed to have notified Subtenant in writing at the time alterations or improvements were completed that it desired to have alterations or improvements made by Subtenant or at the request of Subtenant removed at the expiration or sooner termination of the Sublease, Subtenant shall, at Subtenant’s sole cost and expense, upon the expiration or sooner termination of the Sublease, remove any such alterations or improvements constructed or installed by Subtenant following the Commencement Date of this Sublease and Subtenant shall repair all damage caused by such removal at its cost. Without limiting Subtenant's surrender obligations set forth in this Sublease, in order to assist Subtenant in meeting its surrender obligations, Sublandlord and Subtenant agree, upon the written request of either party given not earlier than sixty (60) days prior to the Sublease Expiration Date (as the same may be extended pursuant to Article 14 below), to conduct a walkthrough of the Leased Premises at a mutually convenient time and to use good faith efforts to identify and agree upon items that must be addressed by Subtenant to satisfy Subtenant's surrender obligations. If the Leased Premises, the Building, the Outside Areas or the Property are not surrendered to Sublandlord in the condition required by this Section 2.6 at the expiration or sooner termination of this Sublease, Sublandlord may, at Subtenant’s cost and expense, so remove Subtenant’s signs, property and/or improvements not so removed and make such repairs and replacements not so made or hire, at Subtenant’s cost and expense, independent contractors to perform such work. Subtenant shall be liable to Sublandlord for all reasonable out-of-pocket costs and expenses incurred by Sublandlord in returning the Leased Premises, the Building and the Outside Areas to the required condition. Subtenant shall pay to Sublandlord the amount of all reasonable out-of-pocket cost and expense so incurred within thirty (30) days of Sublandlord’s billing Subtenant for same. Subtenant shall indemnify, defend and hold harmless Sublandlord against any and all loss or liability resulting from delay by Subtenant in surrendering the Leased Premises in a timely manner on or before the Sublease Expiration Date 7 -------------------------------------------------------------------------------- (as the same may be extended from time to time) upon and subject to the terms and conditions of Section 18.2 below. ARTICLE 3 RENT AND LATE CHARGES 3.1 Base Monthly Rent. Commencing on the Sublease Commencement Date (as determined pursuant to Paragraph 2.3 above) and continuing throughout the Sublease Term, Subtenant shall pay to Sublandlord, without prior demand therefor, in advance on the first day of each calendar month, the amount set forth as “Base Monthly Rent” in Article 1 (the “Base Monthly Rent”). 3.2 Additional Rent. Commencing on the Sublease Commencement Date (as determined pursuant to Paragraph 2.3 above) and continuing throughout the Sublease Term, in addition to the Base Monthly Rent and to the extent not required by Sublandlord to be contracted for and paid directly by Subtenant, Subtenant shall pay to Sublandlord as additional rent (the “Additional Rent”) the following amounts: (a) An amount equal to all Property Operating Expenses (as defined in Article 18) incurred by Sublandlord pursuant to the terms of the Head Lease. Payment shall be made by whichever of the following methods (or combination of methods) is (are) from time to time designated by Sublandlord: (i) Sublandlord may forward invoices or bills for such expenses to Subtenant, and Subtenant shall, no later than thirty (30) days following receipt of any such invoices or bills, pay such invoices or bills and deliver satisfactory evidence of such payment to Sublandlord, and/or (ii) Sublandlord may bill to Subtenant, on a periodic basis not more frequently than monthly, the amount of such expenses (or group of expenses) as paid or incurred by Sublandlord, and Subtenant shall pay to Sublandlord the amount of such expenses within thirty (30) days after receipt of a written bill therefor from Sublandlord, and/or (iii) Sublandlord may deliver to Subtenant Sublandlord’s reasonable estimate of any given expense (such as Sublandlord’s Insurance Costs or Real Property Taxes), or group of expenses, which it anticipates will be paid or incurred for the ensuing calendar or fiscal year, as Sublandlord may determine, and Subtenant shall pay to Sublandlord an amount equal to the estimated amount of such expenses for such year in equal monthly installments during such year with the installments of Base Monthly Rent. Sublandlord reserves the right to change from time to time the methods of billing Subtenant for any given expense or group of expenses or the periodic basis on which such expenses are billed. (b) Sublandlord’s share of the consideration received by Subtenant upon certain assignments and sublettings as required by Article 7. (c) Any legal fees and costs that Subtenant is obligated to pay or reimburse to Sublandlord; and (d) Any other charges or reimbursements due Sublandlord from Subtenant pursuant to the terms of this Sublease. Notwithstanding the foregoing, Sublandlord may elect by thirty (30) days prior written notice to Subtenant (provided such written notice is received by Subtenant at least thirty (30) days prior to delinquency) to have Subtenant pay Real Property Taxes or any portion thereof directly to Head Landlord or directly to the applicable taxing authority, in which case Subtenant shall make such payments and deliver satisfactory evidence of payment to Sublandlord no later than ten (10) days 8 -------------------------------------------------------------------------------- before such Real Property Taxes become delinquent. The Sublandlord and Subtenant acknowledge and agree that the Sublease provides for Subtenant to pay for Subtenant’s Property Share of all charges incurred by Sublandlord pursuant to the Head Lease, which charges shall be a pass through of the same charged to Sublandlord by the Head Landlord; provided, however, the parties recognize that the Head Landlord has adopted a policy of charging the Sublandlord in an aggregated format for delivery of Head Landlord’s statement invoices, which format combines the Property (as such term is defined in the Head Lease) as the same relates to this Building and Building 2 with the “Property” (as such term is defined in the Building 3 Sublease) for the purposes of establishing project accounting and Head Landlord’s statements delivered in respect of Operating Expenses, Outside Areas charges, Real Property Taxes and any other consideration due from Sublandlord as a tenant and as the same are allocated upon a pro rata share that such project buildings relate to such project. Subtenant agrees to pay Sublandlord in accordance with the Head Landlord’s statement invoice information and format allocation established by Head Landlord for the Leased Premises and Building and Sublandlord’s respective pro rata share of such costs and expenses for the project charged to Sublandlord. 3.3 Audit. Subtenant may upon written notice to Sublandlord request that Sublandlord cause an audit of Head Landlord’s books and records to determine the accuracy of Head Landlord’s billings for Property Operating Expenses under this Sublease, provided Subtenant requests such audit within the period that is prescribed pursuant to the terms, covenants and conditions of the Head Lease after Sublandlord’s and Subtenant’s receipt of the Head Lease year-end statement described in Section 3.2 above setting forth the annual reconciliation of the Property Operating Expenses or any change in estimated monthly expenses under Section 3.2(a)(iii) above. Subtenant agrees to pay all of the out-of-pocket costs and expenses of the Sublandlord related to such audit. If such audit reveals that the actual Property Operating Expenses for any given year were less than the amount that Subtenant paid for Property Operating Expenses for any such year, then Sublandlord shall use reasonable efforts to seek payment from Head Landlord to pay to Subtenant the excess after first deducting all of Sublandlord’s costs and expenses of audit, including any legal costs and fees associated with enforcing audit rights in the Head Lease against the Head Landlord. Subtenant shall promptly reasonably approve Sublandlord’s reasonably selected consultant and Subtenant agrees Sublandlord shall have the right to require Subtenant to post a cash security deposit with Sublandlord in the amount of Sublandlord’s third party audit consultant costs, fees and expenses, as reasonably estimated by Sublandlord, prior to Sublandlord being obligated to commence any audit against the Head Landlord on behalf of Subtenant. Sublandlord and Subtenant shall use commercially reasonable, good faith efforts to cause Head Landlord, in its consent to this Sublease, to agree (i) to deliver a copy of all Property Operating Expense statements to both Sublandlord and Subtenant contemporaneously and (ii) that any audit right of the Sublandlord shall be extended for any period of time Head Landlord has failed to deliver a copy of end of year Property Operating Expense statements to Subtenant. 3.4 Intentionally omitted. 3.5 Year-End Adjustments. If Sublandlord shall have elected to bill Subtenant for the Property Operating Expenses (or any group of such expenses) on an estimated basis in accordance with the provisions of Paragraph 3.2(a)(iii) above, Sublandlord shall furnish to Subtenant within five (5) business days of receipt of the report from Head Landlord following the end of the applicable calendar or fiscal year, as the case may be, a copy statement setting forth (i) the amount of such expenses paid or incurred during the just ended calendar or fiscal year, as appropriate, and (ii) the amount that Subtenant has paid to Sublandlord for credit against such expenses for such period. Sublandlord and Subtenant agree that the foregoing obligation on Sublandlord shall not apply in circumstances where the Head Landlord has agreed in writing to provide a statement to both Sublandlord and Subtenant contemporaneously. If Subtenant shall have paid more than its obligation for such expenses for the stated period, Sublandlord shall at its election, either (i) credit the amount of such overpayment toward the next ensuing payment or payments of Additional Rent that would otherwise be due or (ii) refund in cash to Subtenant the amount of such overpayment within thirty (30) days after it has been conclusively determined by Sublandlord that an overpayment has been made by Subtenant. If such 9 -------------------------------------------------------------------------------- year-end statement shall show that Subtenant did not pay its obligation for such expenses in full, then Subtenant shall pay to Sublandlord the amount of such underpayment within thirty (30) days from Sublandlord’s billing of same to Subtenant. The provisions of this Paragraph shall survive the expiration or sooner termination of this Sublease. 3.6 Late Charge, And Interest On Rent In Default. Subtenant acknowledges that the late payment by Subtenant of any monthly installment of Base Monthly Rent or any Additional Rent will cause Sublandlord to incur certain costs and expenses not contemplated under this Sublease, the exact amounts of which are extremely difficult or impractical to fix. Such costs and expenses will include without limitation, administration and collection costs and processing and accounting expenses. Therefore, if any installment of Base Monthly Rent is not received by Sublandlord from Subtenant when the same becomes due, Subtenant shall immediately pay to Sublandlord a late charge in an amount equal to the amount set forth in Article 1 as the “Late Charge Amount,” and if any Additional Rent is not received by Sublandlord when the same becomes due, Subtenant shall immediately pay to Sublandlord a late charge in an amount equal to five percent (5%) of the Additional Rent not so paid. Sublandlord and Subtenant agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to Sublandlord for the anticipated loss Sublandlord would suffer by reason of Subtenant’s failure to make timely payment. In no event shall this provision for a late charge be deemed to grant to Subtenant a grace period or extension of time within which to pay any rental installment or prevent Sublandlord from exercising any right or remedy available to Sublandlord upon Subtenant’s failure to pay each rental installment due under this Sublease when due, including the right to terminate this Sublease. If any rent remains delinquent for a period in excess of ten (10) calendar days, then, in addition to such late charge, Subtenant shall pay to Sublandlord interest on any rent that is not so paid from said tenth day at the then maximum rate of interest not prohibited or made usurious by Law until paid. Provided tenant named on the face of this Sublease or its Permitted Assignee is Subtenant under this Sublease, then Sublandlord agrees that once in any twelve (12) month period during the Sublease Term, Subtenant shall be entitled to written notice of delinquency in timely payment of Base Monthly Rent or Additional Rent from the Sublandlord, and Subtenant shall not be liable for any Late Charge Amount or other late charge hereunder if such installment of Base Monthly Rent or Additional Rent is received by Sublandlord within ten (10) days after Subtenant’s receipt of such notice of delinquency from Sublandlord; provided, however, such right granted by Sublandlord to Subtenant shall immediately cease and terminate for the remainder of the Sublease Term (by its own volition and without any further action on the part of the Sublandlord) upon the delivery by Sublandlord of a third notice of delinquency by Subtenant. The above stated right to notice and extension of payment period shall be personal to tenant named on the face of this Sublease or its Permitted Assignee and shall not be transferable to any other party. 3.7 Payment Of Rent. Except as specifically provided otherwise in this Sublease, all rent shall be paid in lawful money of the United States, without any abatement, reduction or offset for any reason whatsoever, to Sublandlord at such address as Sublandlord may designate from time to time. Subtenant’s obligation to pay Base Monthly Rent and all Additional Rent shall be appropriately prorated at the commencement and expiration of the Sublease Term. The failure by Subtenant to pay any Additional Rent as required pursuant to this Sublease when due shall be treated the same as a failure by Subtenant to pay Base Monthly Rent when due, and Sublandlord shall have the same rights and remedies against Subtenant as Sublandlord would have had Subtenant failed to pay the Base Monthly Rent when due. 3.8 Prepaid Rent. Subtenant shall not be required to make an advance payment of Base Monthly Rent pursuant to the term of this Sublease upon the execution of this Sublease. Sublandlord and Subtenant agree to work in good faith to seek the consent and approval of Head Landlord to recognize any Base Monthly Rent payment made by Subtenant directly to Head Landlord prior to the Sublease Commencement Date pursuant to the Head Lease (to the extent such payment covers any period following the Sublease Commencement Date) as a Base Monthly Rent payment made by Sublandlord 10 -------------------------------------------------------------------------------- pursuant to the Head Lease, conditional upon Sublandlord’s recognition of such Base Monthly Rent payment satisfying Subtenant’s Base Monthly Rent obligations pursuant to this Sublease until such time as such Base Monthly Rent payment is exhausted, after which time Sublandlord agrees to pay to Head Landlord the Base Monthly Rent obligations pursuant to the Head Lease and Subtenant agree to pay to Sublandlord the Base Monthly Rent obligations pursuant to this Sublease. ARTICLE 4 USE OF LEASED PREMISES AND OUTSIDE AREA 4.1 Permitted Use. Subtenant shall be entitled to use the Leased Premises solely for the “Permitted Use” as set forth in Article 1 and for no other purpose whatsoever. Subtenant shall have the right to vacate the Leased Premises at any time during the Sublease Term, provided Subtenant continues to pay rent and other charges when due and maintains the Leased Premises in the same condition as if fully occupied and as otherwise required by the terms of this Sublease. Subtenant shall have the right to use the Outside Areas in conjunction with its Permitted Use of the Leased Premises solely for the purposes for which they were designed and intended and for no other purposes whatsoever. 4.2 General Limitations On Use. Subtenant shall not do or permit anything to be done in or about the Leased Premises, the Building, the Outside Areas or the Property which does or could (i) jeopardize the structural integrity of the Building or (ii) cause damage to any part of the Leased Premises, the Building, the Outside Areas or the Property. Subtenant shall not operate any equipment within the Leased Premises which does or could (i) injure, vibrate or shake the Leased Premises or the Building, (ii) damage, overload or impair the efficient operation of any electrical, plumbing, heating, ventilating or air conditioning systems within or servicing the Leased Premises or the Building, or (iii) damage or impair the efficient operation of the sprinkler system (if any) within or servicing the Leased Premises or the Building. Subtenant shall not (i) install any equipment or antennas on or make any penetrations of the exterior walls or roof of the Building or (ii) affix any equipment or make any penetrations or cuts in the floors, ceiling or walls of the Leased Premises, without Sublandlord’s prior written consent, which consent shall not be unreasonably withheld, and consent of the Head Landlord, which Head Landlord consent Sublandlord shall use reasonable efforts to procure, at Subtenant’s cost and expense; provided, however, any consent shall be subject to Subtenant’s acknowledgement and agreement that Head Landlord’s consent is, and at all times shall be granted or withheld in accordance with the terms, covenants and conditions of the Head Lease; provided, further, that it shall be reasonable for Sublandlord and Head Landlord to withhold consent if Subtenant’s proposed installations or penetrations impact the structural integrity of the Building. Any installations, penetrations or cuts in the interior or exterior walls, roof, floor or ceiling of the Building will be subject to Subtenant’s restoration obligations at Subtenant’s cost and expense as set forth in this Sublease and the terms of Article 6 below. Subtenant shall not place any loads upon the floors, walls, ceiling or roof systems which could endanger the structural integrity of the Building or damage its floors, foundations or supporting structural components. Subtenant shall not place any explosive, flammable or harmful fluids or other waste materials in the drainage systems of the Leased Premises, the Building, the Outside Areas or the Property. Subtenant shall not drain or discharge any fluids in the landscaped areas or across the paved areas of the Property. Subtenant shall not use any of the Outside Areas for the storage of its materials, supplies, inventory or equipment and all such materials, supplies, inventory or equipment shall at all times be stored within the Leased Premises. Subtenant shall not commit nor permit to be committed any waste in or about the Leased Premises, the Building, the Outside Areas or the Property. 4.3 Noise And Emissions. All noise generated by Subtenant in its use of the Leased Premises shall be confined or muffled so that it does not interfere with the businesses of or annoy the occupants and/or users of adjacent properties. All dust, fumes, odors and other emissions generated by Subtenant’s use of the Leased Premises shall be sufficiently dissipated in accordance with sound environmental practice and exhausted from the Leased Premises in such a manner so as not to interfere 11 -------------------------------------------------------------------------------- with the businesses of or annoy the occupants and/or users of adjacent properties, or cause any damage to the Leased Premises, the Building, the Outside Areas or the Property or any component part thereof or the property of adjacent property owners. 4.4 Trash Disposal. Subtenant shall provide trash bins or other adequate garbage disposal facilities within the trash enclosure areas provided or permitted by Sublandlord outside the Leased Premises sufficient for the interim disposal of all of its trash, garbage and waste. All such trash, garbage and waste temporarily stored in such areas shall be stored in such a manner so that it is not visible from outside of such areas, and Subtenant shall cause such trash, garbage and waste to be regularly removed from the Leased Premises and the Property. Subtenant shall keep the Leased Premises in a clean, safe and neat condition and keep the Outside Areas (except the trash enclosure areas) free and clear of all of Subtenant’s trash, garbage, waste and/or boxes, pallets and containers containing same at all times. 4.5 Parking. Subtenant shall have the non-exclusive use of Subtenant’s proportionate share (calculated using the same method as Subtenant’s Expense Share) of parking spaces located in the Outside Areas at the Property. Subtenant agrees that its use of the parking areas shall be limited to the parking stalls located in the Outside Areas for the Property, which parking stalls shall be those customarily used and located to service the Building and generally depicted in the hatched area on the plan attached to this Sublease at Exhibit “A”. Subtenant shall not at any time, park or permit to be parked any recreational vehicles, inoperative vehicles or equipment in the Outside Areas or on any portion of the Property. Subtenant agrees to assume responsibility for compliance by its employees and invitees with the parking provisions contained herein. If Subtenant or its employees park any vehicle within the Property in violation of these provisions, then Sublandlord may, upon prior written notice to Subtenant giving Subtenant one (1) day (or any applicable statutory notice period, if longer than one (1) day) remove such vehicle(s). Sublandlord reserves for the benefit of Head Landlord the right to grant easements and access rights to others for use of the parking areas on the Property, provided that such grants do not materially interfere with Subtenant’s use of the parking areas. Subtenant shall ensure that Subtenant’s employees shall at all times comply with any reasonable parking rules and regulations required by Head Landlord, if any, pursuant to the terms, covenants and conditions of the Head Lease. Sublandlord and Subtenant acknowledge and agree that each party shall use reasonable efforts to encourage their respective employees, licensees or invitees to utilize the parking areas at the Property or the combined project as designated for the appropriate Building 1, or Building 2, or Building 3 as the case may be. 4.6 Signs. Other than business identification signs allowed pursuant to this Section 4.6, Subtenant shall not place or install on or within any portion of the Leased Premises, the exterior of the Buildings, the Outside Areas or the Property any sign, advertisement, banner, placard, or picture which is visible from the exterior of the Leased Premises. Subject to necessary permit obligations by the City of Sunnyvale, provided Subtenant leases all of the Leased Premises at the Building, Subtenant shall have the right during the Sublease Term to retain its existing signage on Building. Subtenant agrees to remove Subtenant’s Building sign from the Building in a timely manner, in a manner approved by Head Landlord, and in accordance with the Head Lease terms. Subtenant shall use reasonable efforts to remove Subtenant’s Building exterior sign prior to the actual expiration or earlier termination of this Sublease; provided, however, Sublandlord acknowledges and agrees that non-removal of such Building exterior sign shall not delay surrender of the Leased Premises to Sublandlord where all other surrender conditions set forth in this Sublease are met by Subtenant and Subtenant is actively prosecuting the removal and restoration of the Building sign with Subtenant’s contractors subject to Head Landlord’s requirements pursuant to the terms and conditions of the Head Lease. Notwithstanding the foregoing, if Subtenant has not removed Subtenant's Building sign from the Building within sixty (60) days after the expiration or earlier termination of this Sublease, then Sublandlord shall have the right, but not the obligation, upon delivery of written notice to Subtenant, to remove Subtenant's Building sign from the Building in a manner approved by Head Landlord and in accordance with the Head Lease terms. Subtenant shall pay to Sublandlord, within thirty (30) days after receipt of reasonably detailed invoices, all actual out-of-pocket costs incurred by Sublandlord 12 -------------------------------------------------------------------------------- in connection with the removal of Subtenant's Building sign. In addition, subject to necessary permit obligations by the City of Sunnyvale, Subtenant shall have the right during the Sublease Term to retain its existing monument signage in respect of Building until the expiration or earlier termination of this Sublease. Such monument sign(s) shall at all times during the Sublease Term comply with all requirements imposed by the City of Sunnyvale. Sublandlord may remove any non-compliant signs (which have not been approved by Sublandlord and consented to by Head Landlord in writing), advertisements, banners, placards or pictures so placed by Subtenant on or within the Leased Premises, the exterior of the Building, the Outside Areas or the Property and charge to Subtenant the cost of such removal, together with any costs incurred by Sublandlord to repair any damage caused thereby, including any cost incurred to restore the surface (upon which such sign was so affixed) to its original condition. Without limiting Subtenant’s right to retain monument and building signage for the Building until expiration or earlier termination of this Sublease, Subtenant agrees to remove Subtenant’s existing signage from the monument which belongs to the Building in a timely manner, in a manner approved by Head Landlord, and in accordance with the Head Lease terms. Subtenant shall use reasonable efforts remove Subtenant’s existing business identification signs (including such existing Building monument signage) from the Property and Outside Areas prior to surrender of the Leased Premises to Sublandlord; provided, however, Sublandlord acknowledges and agrees that non-removal of such Building monument signage shall not delay surrender of the Leased Premises to Sublandlord where all other surrender conditions set forth in this Sublease are met by Subtenant and Subtenant is actively prosecuting the removal and restoration of the Building monument signage with Subtenant’s contractors subject to Head Landlord’s requirements pursuant to the terms and conditions of the Head Lease. Notwithstanding the foregoing, if Subtenant has not removed Subtenant’s Building monument signage within sixty (60) days after the expiration or earlier termination of this Sublease, then Sublandlord shall have the right, but not the obligation, upon delivery of written notice to Subtenant, to remove Subtenant’s signage from the Building monument in a manner approved by Head Landlord and in accordance with the Head Lease terms. Subtenant shall pay to Sublandlord, within thirty (30) days after receipt of reasonably detailed invoices, all actual out-of-pocket costs incurred by Sublandlord in connection with the removal of Subtenant's Building monument signage. Notwithstanding anything to the contrary contained herein, Subtenant shall remove at Subtenant’s cost and expense all of Subtenant’s signs, repair any damage caused thereby, and restore the surface upon which the sign was affixed to its original condition, all to Head Landlord’s reasonable satisfaction, pursuant to the terms, covenants and conditions of the Head Lease. 4.7 Compliance With Laws And Private Restrictions. Subtenant shall abide by and shall promptly observe and comply with, at its sole cost and expense, all Laws and Private Restrictions respecting the use and occupancy of the Leased Premises, the Building, the Outside Areas or the Property including, without limitation, all Laws governing the use and/or disposal of Hazardous Materials, and shall defend with competent counsel, indemnify and hold Sublandlord harmless from any claims, damages or liability resulting from Subtenant’s failure to so abide, observe, or comply with all Laws and Private Restrictions. Subtenant’s obligations hereunder shall survive the expiration or sooner termination of this Sublease. 4.8 Compliance With Insurance Requirements. With respect to any terms of any insurance policies required or permitted to be carried by Sublandlord in accordance with the provision of this Sublease, notice of which terms have been or will, upon Subtenant’s written request therefor, be provided to Subtenant, Subtenant shall not conduct nor permit any other person to conduct any activities nor keep, store or use (or allow any other person to keep, store or use) any item or thing within the Leased Premises, the Building, the Outside Areas or the Property which (i) is prohibited under the terms of any such policies, (ii) could result in the termination of the coverage afforded under any of such policies, (iii) could give to the insurance carrier the right to cancel any of such policies, or (iv) could cause an increase in the rates (over standard rates) charged, for the coverage afforded under any of such policies. Subtenant shall comply with all requirements of any insurance company, insurance underwriter, or Board of Fire Underwriters which are necessary to maintain, at standard rates, the insurance coverage carried by either Sublandlord or Subtenant pursuant to this Sublease. 13 -------------------------------------------------------------------------------- 4.9 Sublandlord’s Right To Enter. Sublandlord and its agents and Head Landlord and its agents shall have the right to enter the Leased Premises during normal business hours after giving Subtenant reasonable notice and subject to Subtenant’s reasonable security measures for the purpose of (i) inspecting the same; (ii) showing the Leased Premises to prospective purchasers, mortgagees or tenants; (iii) making necessary alterations, additions or repairs; and (iv) performing any of Subtenant’s obligations when Subtenant has failed to do so. Sublandlord shall have the right to enter the Leased Premises during normal business hours (or as otherwise agreed), subject to Subtenant’s reasonable security measures, for purposes of supplying any maintenance or services agreed to be supplied by Sublandlord or through Sublandlord by Head Landlord. Sublandlord and Head Landlord shall have the right to enter the Outside Areas during normal business hours for purposes of (i) inspecting the exterior of the Building and the Outside Areas; (ii) posting notices of nonresponsibility (and for such purposes Subtenant shall provide Sublandlord at least thirty (30) days’ prior written notice of any work to be performed on the Leased Premises); and (iii) supplying any services to be provided by Sublandlord or Head Landlord. Any entry into the Leased Premises or the Outside Areas obtained by Sublandlord or Head Landlord in accordance with this paragraph shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Leased Premises, or an eviction, actual or constructive, of Subtenant from the Leased Premises or any portion thereof. In exercising its rights under this Section 4.9, Sublandlord shall use reasonable efforts to minimize interference with Subtenant’s use of the Leased Premises and the Outside Areas. Sublandlord shall use reasonable efforts at Subtenant’s cost and expense to cause Head Landlord to minimize interference with Subtenant’s use of the Leased Premises. 4.10 Use Of Outside Areas. Subtenant, in its use of the Outside Areas, shall at all times keep the Outside Areas in a safe condition free and clear of all materials, equipment, debris, trash (except within existing enclosed trash areas), inoperable vehicles, and other items which are not specifically permitted pursuant to the terms, covenants and conditions of the Head Lease. If, in the opinion of Sublandlord, unauthorized persons are using any of the Outside Areas by reason of, or under claim of, the express or implied authority or consent of Subtenant, then Subtenant, upon demand of Sublandlord, shall restrain, to
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