8x8 2009 Annual Report Download - page 131

time of Tenant’ s election, Tenant notice to Landlord must specify whether Tenant is exercising the twelve (12) month or
thirty-six (36) month Renewal Term, and Tenant’ s choice shall be binding upon Tenant.
40.2 The Annual Rent and Monthly Installment of Rent in effect at the expiration of the Term of this Lease shall
be increased to reflect the Prevailing Market (as defined in Section 40.8) rate. Landlord shall advise Tenant of the new
Annual Rent and Monthly Installment of Rent for the Premises no later than thirty (30) days after receipt of Tenant's written
request therefor. Said request shall be made no earlier than thirty (30) days prior to the first date on which Tenant may
exercise its Renewal Option under this Article 40.
40.3 If Tenant and Landlord are unable to agree on a mutually acceptable Annual Rent and Monthly Installment
of Rent for the Renewal Term not later than sixty (60) days prior to the expiration of the initial Term, then Landlord and
Tenant, within five (5) days after such date, shall each simultaneously submit to the other, in a sealed envelope, its good faith
estimate of the Prevailing Market rate for the Premises during the Renewal Term (collectively referred to as the “Estimates”).
If the higher of such Estimates is not more than one hundred five percent (105%) of the lower of such Estimates, then the
Prevailing Market rate shall be the average of the two Estimates. If the Prevailing Market rate is not established by the
exchange of Estimates, then, within seven (7) days after the exchange of Estimates, Landlord and Tenant shall each select an
appraiser to determine which of the two Estimates most closely reflects the Prevailing Market rate for the Premises during the
Renewal Term. Each appraiser so selected shall be certified as an MAI appraiser or as an ASA appraiser and shall have had
at least five (5) years experience within the previous ten (10) years as a real estate appraiser working in Sunnyvale,
California, with working knowledge of current rental rates and practices. For purposes hereof, an “MAI” appraiser means an
individual who holds an MAI designation conferred by, and is an independent member of, the American Institute of Real
Estate Appraisers (or its successor organization, or in the event there is no successor organization, the organization and
designation most similar), and an “ASA” appraiser means an individual who holds the Senior Member designation conferred
by, and is an independent member of, the American Society of Appraisers (or its successor organization, or, in the event there
is no successor organization, the organization and designation most similar).
40.4 Upon selection, Landlord’ s and Tenant's appraisers shall work together in good faith to agree upon which
of the two Estimates most closely reflects the Prevailing Market rate for the Premises. The Estimates chosen by such
appraisers shall be binding on both Landlord and Tenant. If either Landlord or Tenant fails to appoint an appraiser within the
seven (7) day period referred to above, the appraiser appointed by the other party shall be the sole appraiser for the purposes
hereof. If the two appraisers cannot agree upon which of the two Estimates most closely reflects the Prevailing Market rate
within ten (10) days after their appointment, then, within ten (10) days after the expiration of such ten (10) day period, the
two appraisers shall select a third appraiser meeting the aforementioned criteria. Once the third appraiser (i.e., the arbitrator)
has been selected as provided for above, then, as soon thereafter as practicable but in any case within fourteen (14) days, the
arbitrator shall make his or her determination of which of the two Estimates most closely reflects the Prevailing Market rate
and such Estimate shall be binding on both Landlord and Tenant as the Prevailing Market rate for the Premises. If the
arbitrator believes that expert advice would materially assist him or her, he or she may retain one or more qualified persons to
provide such expert advice. The parties shall share equally in the costs of the arbitrator and of any experts retained by the
arbitrator. Any fees of any appraiser, counsel or experts engaged directly by Landlord or Tenant, however, shall be borne by
the party retaining such appraiser, counsel or expert.
40.5 If the Prevailing Market rate has not been determined by the commencement date of the Renewal Term,
Tenant shall pay Monthly Installments of Rent upon the terms and conditions in effect during the last month of the initial
Term until such time as the Prevailing Market rate has been determined. Upon such determination, the Annual Rent and
Monthly Installments of Rent for the Premises shall be retroactively adjusted to the commencement of such Renewal Term
for the Premises.
40.6 Except as to a Permitted Transferee, this Renewal Option is not transferable; the parties hereto
acknowledge and agree that they intend that the aforesaid option to renew this Lease shall be “personal” to Tenant as set forth
above and that in no event will any assignee or sublessee have any rights to exercise this Renewal Option.
40.7 If Tenant validly exercises or fails to exercise this Renewal Option, Tenant shall have no further right to
extend the Term of this Lease.
40.8 For purposes of this Renewal Option, “Prevailing Market” shall mean the arms length fair market annual
rental rate per rentable square foot under renewal leases and amendments entered into on or about the date on which the
Prevailing Market is being determined hereunder for space comparable to the Premises in the Building and buildings
comparable to the Building in the same rental market in the Sunnyvale, California area as of the date the Renewal Term is to
commence, taking into account the specific provisions of this Lease which will remain constant. The determination of
Prevailing Market shall take into account any material economic differences between the terms of this Lease and any
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