Exhibit 10.9

 

LEASE AGREEMENT

 

BY AND BETWEEN

 

MIDDLEFIELD STATION ASSOCIATES, LLC

a Delaware limited liability company

 

AS LANDLORD

 

AND

 

OMNICELL, INC.,

a Delaware corporation

 

AS TENANT

 

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TABLE OF CONTENTS

 

 

 

Page

1.

DEMISE

1

2.

PREMISES

1

3.

TERM

2

4.

RENT

4

5.

UTILITIES AND SERVICES

9

6.

LATE CHARGE

11

7.

SECURITY DEPOSIT

11

8.

USE OF PREMISES

12

9.

ACCEPTANCE OF PREMISES

14

10.

SURRENDER

14

11.

ALTERATIONS AND ADDITIONS

15

12.

MAINTENANCE AND REPAIRS OF PREMISES

16

13.

LANDLORD’S INSURANCE

18

14.

TENANT’S INSURANCE

18

15.

INDEMNIFICATION

19

16.

SUBROGATION

20

17.

SIGNS

20

18.

FREE FROM LIENS

21

19.

ENTRY BY LANDLORD

21

20.

DESTRUCTION AND DAMAGE

21

21.

CONDEMNATION

22

22.

ASSIGNMENT AND SUBLETTING

23

23.

TENANT’S DEFAULT

27

24.

LANDLORD’S REMEDIES

29

25.

LANDLORD’S RIGHT TO PERFORM TENANT’S OBLIGATIONS

32

26.

ATTORNEY’S FEES

32

27.

TAXES

32

28.

EFFECT OF CONVEYANCE

33

29.

TENANT’S ESTOPPEL CERTIFICATE

33

30.

SUBORDINATION

33

31.

ENVIRONMENTAL COVENANTS

34

32.

NOTICES

36

33.

WAIVER

36

 

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TABLE OF CONTENTS

 

 

 

Page

34.

HOLDING OVER

37

35.

SUCCESSORS AND ASSIGNS

37

36.

TIME

37

37.

BROKERS

37

38.

LIMITATION OF LIABILITY

38

39.

FINANCIAL STATEMENTS

38

40.

MORTGAGEE PROTECTION

38

41.

ENTIRE AGREEMENT

39

42.

INTEREST

39

43.

GOVERNING LAW; CONSTRUCTION

39

44.

REPRESENTATIONS AND WARRANTIES OF TENANT

39

45.

NAME OF BUILDING

40

46.

SECURITY

40

47.

JURY TRIAL WAIVER

40

48.

RECORDATION

40

49.

FORCE MAJEURE

41

50.

ACCEPTANCE

41

51.

RENEWAL OPTION

41

52.

COUNTERPARTS; ELECTRONIC SIGNATURES

42

 

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Index of Exhibits

 

 

 

A

 

Land

B

 

Base Rent Schedule

C

 

Commencement and Expiration Date Memorandum

D

 

Site Plan

E

 

Construction Agreement

F

 

Form of SNDA

G

 

Form of Letter of Credit

 

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LEASE AGREEMENT

 

BASIC LEASE INFORMATION

 

Lease Date:

 

October 20, 2011

 

 

 

Landlord:

 

Middlefield Station Associates, LLC,
a Delaware limited liability company

 

 

 

Landlord’s Address:

 

c/o Four Corners Properties
One Embarcadero Center 37th Floor
San Francisco, CA 94111

 

 

 

 

 

All notices sent to Landlord under this Lease shall be sent to the above address

 

 

 

Tenant:

 

Omnicell, Inc.,
a Delaware corporation

 

 

 

Tenant’s Address
(prior to Commencement Date):

 

Omnicell, Inc.
1201 Charleston Road
Mountain View
Attn: Kirk Thompson
Phone: 650 251 6431
Fax: 650 251 6266
Email: kirk.thompson@omnicell.com
with a copy to danj@omnicell.com and apope@cooley.com

 

 

 

Tenant’s Address
(from and after the Commencement Date):

 

SAME AS PREMISES
Attn: Kirk Thompson
Phone: 650 251 6431
Fax: 650 251 6266
Email: kirk.thompson@omnicell.com
with a copy to danj@omnicell.com and apope@cooley.com

 

 

 

Building Square Footage:

 

Approximately 99,880 rentable square feet

 

 

 

Premises Address:

 

590 Middlefield Road, Mountain View, California

 

 

 

Premises:

 

The Premises shall consist of a one (1) multi-story building and all
improvements associated with such Building. The Premises shall also consist of
the land on which the Premises is situated (as more particularly described on
Exhibit A attached hereto) and all Common Areas.

 

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Building:

 

One (1) multi-story office building to be constructed in accordance with the
Construction Agreement (as defined herein).

 

 

 

Tenant’s Proportionate
Share of Premises:

 

100%

 

 

 

Target Commencement
Date:

 

November 1, 2012

 

 

 

Length of Term:

 

Commencing on the Commencement Date and ending one hundred twenty (120) months
after the Commencement Date.

 

 

 

Expiration Date:

 

One hundred twenty (120) months after the Commencement Date.

 

 

 

Base Rent:

 

$2.79 per square foot per month for the first 12 months, subject to abatement as
described in Section 4. Thereafter, Base Rent will increase at a rate of three
percent (3%) for each year throughout the Term (see Exhibit B for the rent
schedule).

 

 

 

Security Deposit:

 

$363,304 [based on last month’s Base Rent], subject to the terms of Paragraph 7
and payable upon mutual execution and delivery of this Lease.

 

 

 

Prepaid Rent:

 

$278,442 [based on the fourth month’s Base Rent]

 

 

 

Permitted Use:

 

General administrative, office, software research and development, and any other
legally permitted use reasonably permitted by Landlord.

 

 

 

Parking Spaces:

 

Tenant’s Proportionate Share of all legally permitted parking at the Premises,
free of charge.

 

 

 

Brokers:

 

Landlord’s Broker: Cassidy Turley
Tenant’s Broker: Colliers International

 

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LEASE AGREEMENT

 

THIS LEASE AGREEMENT is made and entered into by and between Landlord and Tenant
as of the Lease Date.  The defined terms used in this Lease which are defined in
the Basic Lease Information attached to this Lease Agreement (“Basic Lease
Information”) shall have the meaning and definition given them in the Basic
Lease Information.  The Basic Lease Information, the exhibits, the addendum or
addenda described in the Basic Lease Information, and this Lease Agreement are
and shall be construed as a single instrument and are referred to herein as the
“Lease”.

 

1.                                      DEMISE

 

In consideration for the rents and all other charges and payments payable by
Tenant, and for the agreements, terms and conditions to be performed by Tenant
in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES HEREBY HIRE
AND TAKE FROM LANDLORD, the Premises described below (the “Premises”), upon the
agreements, terms and conditions of this Lease for the Term hereinafter stated.

 

2.                                      PREMISES

 

(a)       The Premises demised by this Lease consists of that certain building
(the “Building”) specified in the Basic Lease Information, which Building,
together with the land described on Exhibit A attached hereto (the “Land”) and
all other improvements located on the Land, including, without limitation, the
Common Areas (as defined below).  The approximate location and dimensions of the
Premises are depicted on Exhibit D, which is attached hereto and incorporated
herein by this reference.  Tenant shall have the exclusive right (but subject to
Landlord’s rights under this Lease and the rights of others pursuant to all
matters of record affecting the Premises (the “Permitted Exceptions”)) to use
the Common Areas, including the parking areas (the “Parking Areas”).  For
purposes of this Lease, the term “Common Areas” shall mean all areas and
facilities outside the Building and within the exterior boundary line of the
Land.

 

(b)       Landlord shall construct the Landlord Improvements (as defined in the
Construction Agreement) pursuant to the construction agreement attached hereto
as Exhibit E-1 and E-2 (“Construction Agreement”).

 

(1)           To the extent any defect in the Landlord Improvements is under
warranty by Landlord’s general contractor, Landlord shall warrant to correct all
defects in the Landlord Improvements as to which Tenant notifies Landlord in
writing within one (1) year following the Commencement Date (as defined below)
of the Landlord Improvements  (the “Warranty Period”).  In addition to
Landlord’s rights under Paragraph 19 below, during the Warranty Period, Landlord
may, in connection with the performance of its obligations under the warranty
described in this Paragraph 2, in its reasonable discretion, from time to time:
(A) close temporarily any portion of the Premises so long as reasonable access
to the Premises remains available; and (B) use any portion of the Premises.  In
connection with any of the foregoing activities of Landlord, Landlord shall use
reasonable efforts while conducting such activities to minimize any interference
with Tenant’s use of the Premises.

 

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(2)           For purposes of this Lease, “Substantial Completion” shall occur
upon the date Landlord notifies Tenant in writing of the completion of the
Landlord Improvements in a good and workmanlike manner, in accordance with all
applicable laws (including without limitation the ADA (as defined in Paragraph
8(c) below) and any laws governing Tenant’s ability to take occupancy and
operate its business in the Premises (but excluding laws applicable to the
actual operation of Tenant’s business, such as business license requirements),
and substantially in accordance with plans and specifications to be prepared in
accordance with the Construction Agreement, with the exception of any “punch
list” items which do not adversely and materially affect Tenant’s use and
occupancy of the Premises.  Landlord shall not be required to furnish a
certificate of occupancy or its legal equivalent as evidence of Substantial
Completion.  Notwithstanding anything to the contrary contained in this Lease,
Substantial Completion of the Landlord Improvements shall not require that the
Landlord Improvements be completed in accordance with any Laws or changes in any
Laws, including, without limitation, the ADA, to the extent such Laws (or
changes in Laws) become effective after the date Landlord obtains a building
permit for the Landlord Improvements unless such compliance is required by the
applicable governmental authorities in order for Landlord to obtain a temporary
certificate of occupancy or its equivalent for the Landlord Improvements.

 

(c)       No rights to any view or to light or air over any property, whether
belonging to Landlord or any other person, are granted to Tenant by this Lease. 
If at any time any windows of the Premises are temporarily darkened or the light
or view therefrom is obstructed by reason of any repairs, improvements,
maintenance or cleaning in or about the Premises, the same shall be without
liability to Landlord and without any reduction or diminution of Tenant’s
obligations under this Lease.

 

3.                                      TERM

 

(a)           The term of this Lease (the “Term”) shall commence on the earlier
to occur of the following dates (the “Commencement Date”): (i) the date Tenant
first takes possession of all or any portion of the Premises and conducts its
business therein, and (ii) the later of (A) the date Landlord gives notice to
Tenant that the Landlord Improvements are Substantially Complete, and
(B) September 1, 2012.  If because of any Tenant Delay (as defined in the
Construction Agreement), Substantial Completion of the Landlord Improvements or
delivery of the Premises to Tenant occurs after September 1, 2012, then if the
Commencement Date is determined under clause (ii) above, the Commencement Date
shall be adjusted for all purposes of this Lease (including, without limitation,
the penultimate sentence of this Paragraph 3(a)) to be the date which is the
actual date of Substantial Completion of the Landlord Improvements as advanced
by the number of days of Tenant Delay (but in no event earlier than September 1,
2012).  For example, if Substantial Completion of the Landlord Improvements
actually occurs on September 10, 2012 and there are eight (8) days of Tenant
Delay, then the Commencement Date under clause (ii) above would be September 2,
2012.  Notwithstanding anything to the contrary herein, this Lease shall not be
void or voidable, no obligation of Tenant shall be affected, and Landlord shall
have no liability to Tenant for any claims arising out of or resulting from any
failure of Landlord to Substantially Complete the Landlord Improvements or to
tender possession of the Premises to Tenant by the Target Commencement Date, and
Tenant’s sole remedy as a consequence of any such delay not due to a Tenant
Delay shall be the postponement of the Commencement Date; provided, however, if
the Commencement Date (as adjusted for any Tenant Delay in the manner described
in this Paragraph 3(a)) has not occurred on or before the December 1, 2012, then
Landlord shall, within

 

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thirty (30) days after receipt of a written demand therefor and evidence of
Tenant’s payment thereof, reimburse Tenant for fifty percent (50%) of the excess
base monthly rent paid by Tenant and attributable to the period beginning on
December 1, 2012 (as such date is adjusted for any Tenant Delay in the manner
described in this Paragraph 3(a)) and continuing through the Commencement Date
(the “Holdover Period”) due to Tenant’s holdover under its current lease with
Google Inc. for space at 1345 Shorebird Way, Mountain View, CA and 1201
Charleston Road, Mountain View, CA (which fifty percent (50%) share (i.e.,
Landlord’s share) of excess base monthly rent amount shall be not more than
$6,368.25 per day during such Holdover Period).  Notwithstanding anything to the
contrary contained in this Lease, if the Commencement Date (as adjusted for any
Tenant Delay in the manner described in this Paragraph 3(a)) has not occurred on
or before November 30, 2013, Tenant shall have the right thereafter to terminate
this Lease by written notice to Landlord given within ten (10) days after such
date, and upon such termination, Landlord shall return all sums theretofore
deposited by Tenant with Landlord, and neither party shall have any further
liability to the other except for those obligations that expressly survive the
expiration or earlier termination of this Lease.  If Tenant fails to deliver
such notice on or before the end of such 10-day period, then Tenant’s right to
terminate pursuant to this Paragraph 3(a) shall be of no further force or
effect.

 

(b)                                 Provided such entry does not interfere with
Landlord’s construction of the Landlord Improvements, Landlord will grant Tenant
early access to the Premises prior to the anticipated date of Substantial
Completion of the Landlord Improvements; provided, however, any such early
access shall be subject to Tenant’s delivery of evidence of insurance satisfying
the requirements of this Lease and such access shall be for the sole purpose of
enabling Tenant and its agents, employees and contractors to install in the
Premises Tenant’s Property necessary for Tenant’s occupancy of the Premises
(subject to the terms of this Lease), and to complete the physical relocation of
Tenant’s files, books, records, papers and miscellaneous furnishings to the
Premises.  The conduct of business in the Premises shall, upon notice from
Landlord, cause an immediate acceleration of the Commencement Date to the date
of Tenant’s initial conduct of business in the Premises.  All of the terms of
this Lease shall be binding on and apply to Tenant during such early occupancy
period, except Tenant’s obligation to pay Base Rent, which shall begin as set
forth in Paragraph 4 below.

 

(c)                                  Upon determination of the actual
Commencement Date, Landlord and Tenant shall promptly execute a Commencement and
Expiration Date Memorandum in the form attached hereto as Exhibit C, wherein the
parties shall specify the Commencement Date, the date on which the Term expires
(the “Expiration Date”) and date on which Tenant is to commence paying Rent.

 

(d)                                 Notwithstanding anything to the contrary
contained in this Lease, this Lease shall be effective upon the full execution
by the Landlord and Tenant, but shall remain subject to the following conditions
subsequent:

 

(i) On or before February 15, 2012, Landlord shall have closed on its
acquisition of the Premises; and

 

(ii) On or before the date that is fifteen (15) business days after the Lease
Date, Landlord shall have received approval of this Lease from its financing
sources.

 

If, on or before the applicable dates set forth in clauses (i) and (ii) above,
Landlord shall not have delivered to Tenant a written notice confirming that the
applicable condition has been

 

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satisfied or waived, then this Lease shall automatically terminate and be of no
further force and effect, Landlord shall return to Tenant any deposits made by
Tenant, and neither party shall have any further liability to the other under
this Lease, including, without limitation, under the provisions of Paragraph
3(a) above; provided, that notwithstanding the foregoing, if the condition
contained in clause (i) above has not been satisfied on or before February 15,
2012 but Landlord is still under contract to acquire the Premises, then such
date shall be extended until such time as Landlord has closed on its acquisition
of the Premises (in which case such condition shall be deemed to have been
satisfied) or such contract is terminated for any reason whatsoever without such
closing having occurred (in which event such condition shall not be satisfied
and this Lease shall automatically terminate as of such contract termination and
be of no further force and effect, Landlord shall return to Tenant any deposits
made by Tenant, and neither party shall have any further liability to the other
under this Lease, including, without limitation, under the provisions of
Paragraph 3(a) above).

 

4.                                       RENT

 

(a)       Base Rent.  Tenant shall pay to Landlord, in advance on the first day
of each month, without further notice or demand and without abatement, offset,
rebate, credit or deduction for any reason whatsoever (except as otherwise
expressly set forth in this Lease), the monthly installments of rent specified
in the Basic Lease Information (the “Base Rent”), which shall be established
once the rentable square footage of the Building has been determined in
accordance with the 1996 BOMA Standard Method of Measuring Floor Area in Office
Buildings for single tenant occupancy upon Substantial Completion of the
Landlord Improvements.  As used in this Lease, the term “Additional Rent” shall
mean all sums of money, other than Base Rent, that shall become due from and
payable by Tenant pursuant to this Lease.  Payment of Base Rent and Additional
Rent shall commence on the Commencement Date; provided, however, that Landlord
grants to Tenant an abatement against Base Rent equal to the first three
(3) months of Base Rent, which is deemed applicable and credited against the
first three (3) months of Base Rent due commencing as of the Commencement Date. 
Notwithstanding anything to the contrary herein, Tenant shall pay (i) the Base
Rent attributable to the fourth month of the Term concurrently with Tenant’s
execution of this Lease, and (ii) the Additional Rent attributable to the first
month of the Term on the Commencement Date.

 

(b)       Additional Rent.

 

(1)           This Lease is intended to be a triple-net lease with respect to
Landlord and the Base Rent owing hereunder is (x) to be paid by Tenant
absolutely net of all costs and expenses relating to Landlord’s ownership and
operation of the Premises and the Building except as otherwise expressly set
forth in this Lease, and (y) except as otherwise expressly set forth in this
Lease, not to be reduced, offset or diminished, directly or indirectly, by any
cost, charge or expense payable hereunder by Tenant or by others in connection
with the Premises, or any part thereof.  The provisions of this Paragraph
4(b) for the payment of Tenant’s Proportionate Share(s) of Operating
Expenses, Insurance Expenses and, subject to the provisions of Paragraph 27
below, Taxes (as hereinafter defined) are, except as otherwise expressly set
forth in this Lease, intended to pass on to Tenant, Tenant’s share of all costs
and expenses relating to Landlord’s ownership and operation of the Building
and/or the Premises.  During the Term, in addition to the Base Rent, Tenant
shall pay to Landlord as Additional Rent, in accordance with this Paragraph 4,
(i) Tenant’s Proportionate Share(s) of Operating Expenses, (ii) Tenant’s

 

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Proportionate Share(s) of Insurance Expenses attributable to each Computation
Year, and (iii) subject to the provisions of Paragraph 27 below, Tenant’s
Proportionate Share(s) of Taxes attributable to each Computation Year; provided,
however, that if at any time Tenant ceases to be the sole tenant of the
Building, Landlord reserves the right to, in good faith, establish
classifications for the equitable allocation of Operating Expenses, Insurance
Expenses and Taxes that are incurred for the direct benefit of specific tenants
(including, without limitation, Tenant) or users in the Building.

 

(2)                                  As used in this Lease, the following terms
shall have the meanings specified:

 

(A)          “Operating Expenses” means the total costs and expenses paid or
incurred by Landlord in connection with the ownership, operation, maintenance,
management and repair of the Building and/or the Premises or any part thereof,
including, without limitation, all the following items:

 

(i)            Common Area/HVAC/Roof Operating Expenses.  All costs to operate,
maintain, repair, replace, supervise and administer (i) the Common Areas,
including, without limitation, all costs of sweeping, resurfacing and restriping
the Parking Areas, window washing the Building’s exterior, painting the Common
Areas and the Building’s exterior, the signs and directories on the Premises or
any part thereof, landscaping (including, without limitation, maintenance
contracts and fees payable to landscaping consultants), amenities, landscape
sprinkler systems, sidewalks, walkways, driveways, curbs, any portion of the
fire sprinkler systems for which Landlord is responsible under Section 12(b),
below, and exterior lighting systems and exterior security services, if any,
provided by Landlord for the Common Areas, (ii) the roof membrane, and (iii)
those portions of HVAC (as defined below) systems for which Landlord is
responsible under Paragraph 4(b)(2)(A)(iv) and Paragraph 12(b) below.

 

(ii)           Parking Charges; Public Transportation Expenses.  Any parking
charges or other costs levied, assessed or imposed by, or at the direction of,
or resulting from statutes or regulations, or interpretations thereof,
promulgated by any governmental authority or insurer in connection with the
development, use or occupancy of the Premises or any part thereof, and the cost
of maintaining any public transit system, vanpool, or other public or
semi-public transportation (including, without limitation, any transit related
subsidies such as payment for VTA light-rail passes) imposed upon Landlord’s
ownership and operation of the Premises.

 

(iii)          Management and Administration.  All costs for management and
administration of the Premises or any part thereof, including, without
limitation, management fees equal to 2.75% of the monthly Base Rent, accounting,
auditing, billing, postage, salaries and  benefits for all employees and
contractors engaged in the management, operation, maintenance, repair and
protection of the Premises, whether located on the Premises or off-site, payroll
taxes and legal and accounting costs, fees for licenses and permits related to
the ownership and operation of the Premises.

 

(iv)          Capital Improvements.  All costs of a capital nature according to
generally accepted accounting procedures (“GAAP”); provided, however, that all
capital improvements greater than $100,000 shall be amortized over the useful
life of the asset according to GAAP (or as otherwise reasonably estimated by
Landlord if no GAAP treatment is

 

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applicable), at an interest rate equal to the lower of Landlord’s actual cost of
funds (for any such item, the cost of which is financed by a third party), or
ten percent (10%)  per annum (for any such item, the cost of which is financed
by Landlord); provided, however, in no event shall such interest rate exceed the
maximum interest rate permitted by applicable Laws.

 

(v)           [Intentionally Deleted.]

 

(vi)          Notwithstanding anything in this Paragraph 4(b) to the contrary,
the term “Operating Expenses” shall not include: (i) Insurance Expenses, (ii)
Taxes, (iii) structural elements of the foundation, the footings, the suspended
floor slabs, the steel roof deck, and the structural steel frame of the Building
(collectively, the “Structural Components”), (iv) at any time during which the
Building is multi-tenant, the cost of redecorating or special cleaning or
similar services to individual tenant spaces, not provided on a regular basis to
other tenants of the Building, (v) [intentionally deleted], (vi) leasing
commissions, finders’ fees and all other leasing expenses incurred in procuring
tenants in the Building, (vii) any costs incurred in the ownership of the
Premises, as opposed to the operation and maintenance of the Premises, including
Landlord’s income taxes, excess profit taxes, franchise taxes or similar taxes
on Landlord’s business; preparation of income tax returns; corporation,
partnership or other business form organizational expenses; franchise taxes;
filing fees; or other such expenses, (viii) legal fees for the negotiation or
enforcement of leases other than this Lease, (ix) at any time during which the
Building is multi-tenant, expenses in connection with services or other benefits
of a type which are not Building standard but which are provided to any other
tenant or occupant, (x) depreciation, debt service, or interest paid on any
mortgage, or ground rents paid under land leases, except for payment of any
triple-net expenses required by such leases, (xi) any time during which the
Building is multi-tenant, the cost of constructing tenant improvements or
installations for any tenant in the Building, including any relocation costs,
(xii) brokerage commissions, origination fees, points, mortgage recording taxes,
title charges and other costs or fees incurred in connection with any financing
or refinancing or transfer of the Premises, (xiii) attorneys’ fees and
disbursements, incurred in connection with the leasing of space in the Building
(including without limitation the enforcement of any lease or the surrender,
termination or modification of any lease of space in the Building other than
this Lease), (xiv) advertising and promotional expenses, brochures with respect
to the Building, (xv) cost of repairs or replacements occasioned by fire,
windstorm or other casualty to the extent such costs are covered by insurance or
reimbursed by governmental authorities in eminent domain, (xvi) overhead and
profit increment paid to subsidiaries or affiliates of Landlord for services on
or to the Premises, to the extent that the costs of such services exceed
market-based costs for such services rendered by unaffiliated persons or
entities of similar skill, competence and experience, (xvii) penalties, fines,
legal expenses, or late payment interest incurred by Landlord due to violation
by Landlord, or Landlord’s agents, contractors or employees, of either the
payment terms and conditions of any lease or service contract covering space in
the Building or Landlord’s obligations as owner of the Building (such as late
payment penalties and interest on real estate taxes, late payment of utility
bills); provided, that the exclusion contained in this clause (xvii) shall not
apply to any such penalties, fines, legal expenses, or late payment interest
incurred by Landlord as a result of Tenant failing to perform its obligations
under this Lease, including, without limitation, the payment of Taxes), (xviii)
any compensation paid to clerks, attendants or other persons in any commercial
concession operated by Landlord in the Building from which Landlord receives any
form of income whatsoever, whether or not Landlord actually makes a profit from
such concession, (xix) costs incurred to

 

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correct design and/or construction defects in the initial construction of the
Landlord Improvements during any applicable warranty period as provided in the
Construction Agreement, or (xx) costs relating to remediation of Hazardous
Materials (as defined below) at the Premises which (A) existed on or under the
Premises as of the Lease Date, (B) migrated onto the Premises from an offsite
source (except to the extent caused by Tenant or Tenant’s Agents), or (C) were
brought onto the Premises by Landlord or Landlord’s Agents.

 

(B)           “Insurance Expenses” means the total costs and expenses paid or
incurred by Landlord in connection with the obtaining of insurance on the
Premises  or any part thereof or interest therein, including, without
limitation, premiums for “all risk” fire and extended coverage insurance,
commercial general liability insurance, rent loss or abatement insurance,
earthquake insurance, flood or surface water coverage, and other insurance as
Landlord deems necessary in its commercially reasonable discretion, and any
commercially reasonable deductibles paid under policies of any such insurance. 
The foregoing shall not be deemed an agreement by Landlord to carry any
particular insurance relating to the Premises or Premises.

 

(C)           “Taxes” means all real estate taxes and assessments, which shall
include any form of tax, assessment (including any special or general
assessments and any assessments or charges for Utilities (as herein defined) or
similar purposes included within any tax bill for the Building or the Premises
or any part thereof, including, without limitation, entitlement fees, allocation
unit fees and/or any similar fees or charges), fee, license fee, business
license fee, levy, penalty (if a result of Tenant’s delinquency), sales tax,
rent tax, occupancy tax or other tax (other than net income, estate, succession,
inheritance, transfer or franchise taxes), imposed by any authority having the
direct or indirect power to tax, or by any city, county, state or federal
government or any improvement or other district or division thereof, whether
such tax is  determined by the area of the Premises  or any part thereof, or the
Rent and other sums payable hereunder by Tenant, including, but not limited to,
(i) any gross income or excise tax levied by any of the foregoing authorities,
with respect to receipt of Rent and/or other sums due under this Lease; (ii)
upon any legal or equitable interest of Landlord in the Premises  or any part
thereof, (iii) upon this transaction or any document to which Tenant is a party
creating or transferring any interest in the Premises ; (iv) levied or assessed
in lieu of, in substitution for, or in addition to, existing or additional taxes
against the Premises , whether or not now customary or within the contemplation
of the parties; or  surcharged against the Parking Areas.  “Taxes” shall also
include legal and consultants’ fees, costs and disbursements incurred in
connection with proceedings to contest, determine or reduce taxes, Landlord
specifically reserving the right, but not the obligation, to contest by
appropriate legal proceedings the amount or validity of any taxes, but only with
Tenant’s prior written consent if Landlord wishes to include the costs thereof
in Operating Expenses; provided, however, that the requirement that Landlord
obtain Tenant’s consent to such proceedings in order for Landlord to include
such costs as an Operating Expense shall only apply so long as Tenant is the
only tenant in the Building.  Tenant and Landlord acknowledge that Proposition
13 was adopted by the voters of the State of California in the June, 1978
election and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such purposes as fire protection, street, sidewalk,
road, utility construction and maintenance, refuse removal and for other
governmental services which may formerly have been provided without charge to
property owners or occupants.  It is the intention of the parties that all new
and increased assessments, taxes, fees, levies and charges due to any

 

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cause whatsoever are to be included within the definition of real property taxes
for purposes of this Lease.

 

(D)          “Computation Year” shall mean each twelve (12) consecutive month
period commencing January 1 of each year during the Term provided that Landlord,
upon notice to Tenant, may change the Computation Year from time to time to any
other twelve (12) consecutive month period, and, in the event of any such
change, Tenant’s Proportionate Share(s) of Operating Expenses, of Insurance
Expenses, and of Taxes shall be equitably adjusted for the Computation Years
involved in any such change.

 

(c)       Payment of Additional Rent.

 

(1)           Within ninety (90) days of the end of each Computation Year or as
soon thereafter as is practical, Landlord shall give to Tenant notice of
Landlord’s estimate of the total amounts that will be payable by Tenant to
Landlord (as opposed to direct payments by Tenant to the applicable vendor or
service provider) under Paragraph 4(b) for the following Computation Year, and
Tenant shall pay such estimated Additional Rent on a monthly basis, in advance,
on the first day of each month.  Tenant shall continue to make said monthly
payments until notified by Landlord of a change therein.  If at any time or
times (but not more than twice in any given Computation Year) Landlord
determines that the amounts payable under Paragraph 4(b) to Landlord (as opposed
to direct payment by Tenant to the applicable vendor or service provider) for
the current Computation Year will vary from Landlord’s estimate given to Tenant,
Landlord, by notice to Tenant, may revise the estimate for such Computation
Year, and subsequent payments by Tenant for such Computation Year shall be based
upon such revised estimate.  By April 1 of each calendar year following the
initial Computation Year, Landlord shall endeavor to provide to Tenant a
statement showing the actual Additional Rent due to Landlord for the prior
Computation Year (the “Reconciliation Statement”).  If the total of the monthly
payments of Additional Rent that Tenant has made for the prior Computation Year
is less than the actual Additional Rent chargeable to Tenant for such prior
Computation Year, then Tenant shall pay the difference in a lump sum within ten
(10) days after receipt of such Reconciliation Statement from Landlord.  Any
overpayment by Tenant of Additional Rent for the prior Computation Year shall,
at Landlord’s option, be either credited towards the Additional Rent next due or
returned to Tenant in a lump sum payment within ten (10) days after delivery of
such statement.

 

(2)           Landlord’s then-current annual operating and capital budgets for
the Premises or the pertinent part thereof shall be used for purposes of
calculating Tenant’s monthly payment of estimated Additional Rent for the
current year, subject to adjustment as provided above.  Landlord shall make the
final determination of Additional Rent for the year in which this Lease expires
or terminates within one hundred twenty (120) days after such expiration or
termination.  Even though the Term has expired and Tenant has vacated the
Premises, with respect to the year in which this Lease expires or terminates,
Tenant shall remain liable for payment of any amount due to Landlord in excess
of the estimated Additional Rent previously paid by Tenant, and, conversely,
Landlord shall promptly return to Tenant any overpayment within thirty (30) days
after such final determination.  Failure of Landlord to submit statements as
called for herein shall not be deemed a waiver of Tenant’s obligation to pay
Additional Rent as herein provided.

 

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(3)           With respect to Operating Expenses, Insurance Expenses or Taxes
which Landlord allocates to the Building, Tenant’s “Proportionate Share” shall
be the percentage set forth in the Basic Lease Information as Tenant’s
Proportionate Share of the Building.  In the event of a recapture pursuant to
Paragraph 22 below, Tenant’s Proportionate Share shall be determined by dividing
the rentable area of the reduced Premises by the Building Square Footage.

 

(d)       General Payment Terms.  The Base Rent, Additional Rent and all other
sums payable by Tenant to Landlord hereunder, any late charges assessed pursuant
to Paragraph 6 below and any interest assessed pursuant to Paragraph 42 below,
are referred to as the “Rent”.  All Rent shall be paid in lawful money of the
United States of America.  Checks are to be made payable to Landlord and shall
be mailed to the address set forth above, or to such other person or place as
Landlord may, from time to time, designate to Tenant in writing. The Rent for
any fractional part of a calendar month at the commencement or termination of
the Term shall be a prorated amount of the Rent for a full calendar month based
upon a thirty (30) day month.

 

(e)       Statements Binding.  Every Reconciliation Statement given by Landlord
pursuant to paragraph (c) of this Paragraph 4 shall be conclusive and binding
upon Tenant unless (i) within ninety (90) days after the receipt of such
Reconciliation Statement Tenant shall notify Landlord that it disputes the
correctness thereof, specifying the particular respects in which the
Reconciliation Statement is claimed to be incorrect, and elects to exercise its
audit rights below.

 

(f)        Audit Rights.  Provided Tenant notifies Landlord in accordance with
the terms of paragraph (e) above that Tenant disputes a Reconciliation Statement
received from Landlord, Tenant or its CPA (as defined below) shall have the
right, at Tenant’s sole cost and expense, provided Tenant utilizes either a
non-affiliated Certified Public Accountant (the “CPA”) compensated on an hourly
basis or an employee of Tenant who is a CPA, upon at least thirty (30) days
prior notice to Landlord at any time during regular business hours to audit,
review and photocopy Landlord’s records pertaining to Operating Expenses for the
immediately previous calendar year only.  Tenant agrees to keep all information
thereby obtained by Tenant confidential.  If Tenant’s dispute is resolved by
mutual agreement of the parties or by a third party dispute resolution process
in favor of Tenant and it is determined that Landlord overcharged Tenant for the
year in question by ten percent (10%) or more, Landlord shall, within sixty (60)
days following such determination, reimburse Tenant for the reasonable costs of
Tenant’s CPA in performing the audit provided for in this paragraph (but if
Tenant has elected to have an employee of Tenant perform the audit, Landlord
shall have no obligation to reimburse Tenant for the costs of Tenant’s
employee’s time).  The audit procedures set forth in this paragraph shall be
Tenant’s exclusive remedy with respect to the resolution of disputes of amounts
due under Paragraph 4.

 

5.                                      UTILITIES AND SERVICES

 

(a)       Tenant shall make timely payment directly to the vendor supplying the
same, all charges for water, gas, electricity (subject to Paragraph 5(e) below),
telephone, sewer service, waste pick-up and any other utilities, materials or
services furnished directly to or used by Tenant on or about the Premises during
the Lease Term (collectively,

 

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 “Utilities”), including, without limitation, (i) deposits, meter, use and/or
connection fees, hook-up fees, or standby fee, and (ii) penalties for
discontinued or interrupted service, except that Tenant shall not be required to
pay the cost of meters and/or utility hookups for the Utilities to the extent
installation of such meters and/or utility hookups are a part of the Landlord
Improvements.  If Landlord is required to make any deposits for Utilities in
order to complete the Landlord Improvements, Tenant shall, within thirty (30)
days of Landlord’s written request therefor, (i) reimburse Landlord for any
deposit for such Utilities paid by Landlord if the applicable vendor of the
Utility returns to Tenant any deposit made by Landlord or, (ii) if the
applicable vendor will not return such deposits to Tenant, then Tenant shall
replace Landlord’s deposit with a deposit from Tenant so that the vendor can
return Landlord’s deposit to Landlord.  Tenant shall separately arrange with,
and pay directly to, the applicable local public authorities or utilities, as
the case may be, for the furnishing, installation and maintenance of all
Utilities as may be required by Tenant in the use of the Premises.  Landlord
shall not be liable for any damages resulting from interruption of, or Tenant’s
inability to receive such Utilities, and any such inability shall not relieve
Tenant of any of its obligations under this Lease unless such interruption makes
it impossible or impractical for Tenant to operate its business in the Premises
and such interruption is caused by Landlord’s negligence or willful misconduct,
in which case, as Tenant’s sole and exclusive remedy against Landlord, Rent
shall abate from and after the eighth (8th) consecutive day of such interruption
until such interruption ceases.

 

(b)       Tenant acknowledges that the Premises  may become subject to the
rationing of Utility services or restrictions on Utility use as required by a
public utility company, governmental agency or other similar entity having
jurisdiction thereof.  Tenant acknowledges and agrees that its tenancy and
occupancy hereunder shall be subject to such rationing or restrictions as may be
imposed upon Landlord, Tenant, the Premises , and Tenant shall in no event be
excused or relieved from any covenant or obligation to be kept or performed by
Tenant by reason of any such rationing or restrictions.  Tenant agrees to comply
with energy conservation programs implemented by Landlord by reason of
rationing, restrictions or Laws.

 

(c)       Except with respect to Landlord’s gross negligence or willful
misconduct, Landlord shall not be liable for any loss, injury or damage to
property caused by or resulting from any variation, interruption, or failure of
Utilities due to any cause whatsoever, or from failure to make any repairs or
perform any maintenance.  No temporary interruption or failure of such services
incident to the making of repairs, alterations, improvements, or due to
accident, strike, or conditions or other events shall be deemed an eviction of
Tenant or relieve Tenant from any of its obligations hereunder.  Except with
respect to Landlord’s gross negligence or willful misconduct, in no event shall
Landlord be liable to Tenant for any damage to the Premises or for any loss,
damage or injury to any property therein or thereon occasioned by bursting,
rupture, leakage or overflow of any plumbing or other pipes (including, without
limitation, water, steam, and/or refrigerant lines), sprinklers, tanks, drains,
drinking fountains or washstands, or other similar cause in, above, upon or
about the Premises.

 

(d)       Tenant, at Tenant’s sole cost and expense, shall arrange for
janitorial services for the Premises.

 

(e)       Landlord and Tenant agree that Exhibit E-3 attached hereto and
incorporated herein shall govern the installation of any solar photovoltaic
panels to be installed at the Premises (the “Solar Systems”) in order to provide
the Premises with electricity.

 

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6.                                      LATE CHARGE

 

Notwithstanding any other provision of this Lease to the contrary, Tenant hereby
acknowledges that late payment to Landlord of Rent, or other amounts due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain.  If any Rent or
other sums due from Tenant are not received by Landlord or by Landlord’s
designated agent within five (5) days after their due date, then Tenant shall
pay to Landlord a late charge equal to five percent (5%) of such overdue amount,
plus any costs and attorneys’ fees incurred by Landlord by reason of Tenant’s
failure to pay Rent and/or other charges when due hereunder.  Landlord and
Tenant hereby agree that such late charges represent a fair and reasonable
estimate of the cost that Landlord will incur by reason of Tenant’s late payment
and shall not be construed as a penalty.  Landlord’s acceptance of such late
charges shall not constitute a waiver of Tenant’s default with respect to such
overdue amount or estop Landlord from exercising any of the other rights and
remedies granted under this Lease.

 

 

Initials: Landlord

BB

 

Tenant

RS

 

 

 

7.                                      SECURITY DEPOSIT

 

(a)           Amount and Form of Security Deposit.  Upon signing this Lease,
Tenant shall pay to Landlord the Security Deposit set forth in the Basic Lease
Information in immediately available funds, for the faithful performance by
Tenant of all of the provisions of this Lease to be performed or observed by
Tenant.

 

(b)           Application of Security Deposit to Cure Default.  If Tenant fails
to pay any Rent, or otherwise defaults with respect to any provision of this
Lease, and such failure results in an Default, Landlord may (but shall not be
obligated to) use, apply or retain all or any portion of the Security Deposit
for the payment of any Rent in default or for the payment of any other sum to
which Landlord may become entitled by reason of Tenant’s default, or to
compensate Landlord for any loss or damage which landlord may suffer thereby. 
If Landlord so uses or applies all or any portion of the Security Deposit,
Tenant shall within ten (10) days after demand therefor deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to the full
amount thereof.  Landlord’s application of all or any portion of the Security
Deposit to any obligation of Tenant hereunder shall not limit Landlord’s damages
or constitute a waiver by Landlord of any claims against or obligations of
Tenant, other than the specific monetary obligations to which the Security
Deposit is applied, and then only to the extent such obligations are thereby
satisfied.  Landlord shall not be required to keep the Security Deposit separate
from its general funds, Tenant shall not be entitled to interest thereon, and
Tenant waives the benefit of any Laws to the contrary

 

(c)           Return of Security Deposit.  Provided Tenant is not in default at
the expiration or sooner termination of this Lease, and except to the extent
necessary to cure any defaults or perform any continuing obligation of Tenant
hereunder, the Security Deposit shall be returned, without payment of interest
or other increment for its use, to Tenant (or, at Landlord’s option, to the last
assignee, if any, of Tenant’s interest hereunder), to Tenant within thirty (30)
days following the later of the expiration of the Term or Tenant’s surrender of
the Premises in the condition required under this Lease.  If Landlord disposes
of its interest in the Premises, Landlord may deliver or credit the Security
Deposit to Landlord’s successor in interest in the

 

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Premises, and upon the transferring by Landlord and assumption by the transferee
of Landlord’s obligations under this Lease arising from and after the date of
such transfer, Landlord shall be relieved of further responsibility with respect
to the claims therefor.  Landlord’s return of the Security Deposit, or any part
thereof, shall not be construed as an admission that Tenant has performed all of
its obligations under this Lease.  No trust relationship is created herein
between Landlord and Tenant with respect to the Security Deposit.  If Landlord
disposes of its interest in the Premises, Landlord shall deliver or credit the
Security Deposit to Landlord’s successor in interest in the Premises and give
written notice thereof to Tenant, and the transferring Landlord shall thereupon
be relieved of further responsibility with respect to the Security Deposit, and
Tenant shall look solely to the successor Landlord for any claims therefor.

 

(d)                                 Application of Security Deposit Following
Default.  Landlord may retain, use or apply all or any part of the Security
Deposit to compensate Landlord for any expense, loss or damage suffered or
expected to be suffered by Landlord as a result of any Events of Default by
Tenant under this Lease, including any amounts Landlord is obligated or elects
to spend in order to cure any such Events of Default or to mitigate its damages
following an Default.  Tenant waives the provisions of California Civil Code
§1950.7 (which restricts application of a security deposit only to those sums
reasonably necessary to remedy defaults in the payment of rent, to repair damage
caused by Tenant, or to clean the Premises) and all similar Laws now in force or
subsequently adopted which restrict application of security deposits to specific
purposes.

 

8.                                      USE OF PREMISES

 

(a)       Permitted Use.  The use of the Premises by Tenant and Tenant’s agents,
advisors, employees, partners, shareholders, directors, customers, invitees and
independent contractors (collectively, “Tenant’s Agents”) shall be solely for
the Permitted Use specified in the Basic Lease Information and for no other
use.  Tenant shall not permit any objectionable or unpleasant odor, smoke, dust,
gas, noise or vibration to emanate from or near the Premises.  The Premises
shall not be used to create any nuisance or trespass, for any illegal purpose,
for any purpose not permitted by Laws (as hereinafter defined), for any purpose
that would invalidate the insurance or increase the premiums for insurance on
the Premises.  Tenant agrees to pay to Landlord, as Additional Rent, any
increases in premiums on policies resulting from Tenant’s Permitted Use or any
other use or action by Tenant or Tenant’s Agents which increases Landlord’s
premiums or requires additional coverage by Landlord to insure the Premises. 
Tenant agrees not to overload the floor(s) of the Building.

 

(b)       Compliance with Governmental Regulations and Private Restrictions. 
Tenant and Tenant’s Agents shall, at Tenant’s expense, faithfully observe and
comply with (1) all municipal, state and federal laws, statutes, codes, rules,
regulations, ordinances, requirements, and orders (collectively, “Laws”), now in
force or which may hereafter be in force pertaining to the Premises or Tenant’s
use of the Premises; (2) the Permitted Exceptions, and (3) any additional
covenants, conditions and restrictions which may hereafter be in force with
respect to the Premises or are otherwise contemplated by this Agreement,
provided that any costs of compliance which (i) are of a capital nature
according to GAAP, (ii) are greater than $100,000, and (iii) are not incurred as
a result of Tenant’s specific use of the Premises or as a result of Alterations
or other actions on the part of Tenant, shall be paid for by Landlord and
amortized and passed through to Tenant as Operating Expenses in accordance with
Paragraph 4(b)(2)(A)(iv).  Without limiting the generality of the foregoing, to
the extent Landlord is

 

12

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required by the city or county in which the Building is located to maintain
carpooling and public transit programs, Tenant shall cooperate in the
implementation and use of these programs by and among Tenant’s employees.  The
judgment of any court of competent jurisdiction, or the admission of Tenant in
any action or proceeding against Tenant, whether Landlord be a party thereto or
not, that Tenant has violated any Laws or the matters described in (2) or (3)
above, shall be conclusive of that fact as between Landlord and Tenant.

 

(c)       Compliance with Americans with Disabilities Act.  Landlord and Tenant
hereby agree and acknowledge that the Premises may be subject to, among other
Laws, the requirements of the Americans with Disabilities Act, a federal law
codified at 42 U.S.C. 12101 et seq., including, but not limited to Title III
thereof, and all regulations and guidelines related thereto, together with any
and all laws, rules, regulations, ordinances, codes and statutes now or
hereafter enacted by local or state agencies having jurisdiction thereof, as the
same may be in effect on the date of this Lease and may be hereafter modified,
amended or supplemented, including, without limitation, all requirements of
Title 24 of the State of California Code (collectively, the “ADA”).  Subject to
the terms of Paragraph 2(b)(2) above and the Construction Agreement, Landlord
shall construct the Building in compliance with ADA and thereafter Tenant shall
be responsible at its sole cost and expense for fully and faithfully complying
with all applicable requirements of the ADA.  Within ten (10) days after
receipt, Tenant shall advise Landlord in writing, and provide Landlord with
copies of (as applicable), any notices alleging violation of the ADA relating to
any portion of the Premises; any claims made or threatened orally or in writing
regarding noncompliance with the ADA and relating to any portion of the
Premises; or any governmental or regulatory actions or investigations instituted
or threatened regarding noncompliance with the ADA and relating to any portion
of the Premises.  Tenant shall and hereby agrees to protect, defend (with
counsel acceptable to Landlord) and hold Landlord and Landlord’s Agents harmless
and indemnify Landlord and Landlord’s Agents from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
attorneys’ fees, costs of court and expenses necessary in the prosecution or
defense of any litigation including the enforcement of this provision) arising
from or in any way related to, directly or indirectly, Tenant’s or Tenant’s
Agents violation or alleged violation of the ADA.  Tenant agrees that the
obligations of Tenant herein shall survive the expiration or earlier termination
of this Lease.

 

(d)       Limited Roof Access.  During the Term, but subject to compliance with
all applicable Laws, Tenant have the right to install, operate or maintain a
satellite-earth communications station (antenna and associated equipment),
microwave equipment and/or an FM antenna (collectively, “Telecommunications
Equipment”) on the roof or exterior walls of the Building subject to the
provisions of this Paragraph 8(d).  If Tenant desires to install any
Telecommunications Equipment, it will first obtain Landlord’s written approval
and comply with Landlord’s reasonable rules and requirements applicable to such
services; provided, however, that in no event shall Tenant be allowed to install
(i) more than three (3) separate items of Telecommunications Equipment, and all
such equipment shall not exceed twelve (12) feet in diameter, in the aggregate,
and four (4) feet in height per item, or (ii) any items that interfere with the
Structural Components and/or Systems (as defined below) of the Building.  Tenant
shall, at its sole cost and expense, maintain the Telecommunications Equipment
in a good, clean and safe condition and in accordance with all applicable Laws,
including all repairs and replacements thereto.  The Telecommunications
Equipment is and shall remain the property of Tenant, and upon termination of
this Lease Tenant shall remove the

 

13

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Telecommunications Equipment and repair, at its sole cost, any and all damage to
the roof of the Building to the extent caused as a result of such removal.  If
Tenant fails to remove the Telecommunications Equipment as required by this
Lease, Landlord may, at Tenant’s expense, remove the Telecommunications
Equipment and perform the related restoration and repair work, and use, dispose
of or take such other actions with respect to the Telecommunications Equipment
as Landlord may deem appropriate, all without compensation or payment to Tenant.
The rights granted to Tenant pursuant to this paragraph may not be assigned,
except in conjunction with an approved assignment of Tenant’s interest in the
Lease.  Absent Landlord’s approval to install such Telecommunications Equipment,
Tenant’s right to access to the roof of the Building shall be limited to the
extent necessary to comply with Tenant’s repair and maintenance obligations
under this Lease.  Notwithstanding anything to the contrary contained in this
Section 8(d) or elsewhere in this Lease, Tenant’s rights under this Section are
limited to Telecommunications Equipment owned by and installed for Tenant’s use
only and not by any other party, including, without limitation, third party
operators of cellular antennas, such as Verizon and AT&T.

 

9.                                      ACCEPTANCE OF PREMISES

 

Except as otherwise expressly provided in the Construction Agreement, Paragraph
2(b) above or elsewhere in this Lease, upon the Commencement Date, Tenant shall
be deemed to have accepted the Premises as suitable for Tenant’s intended use
and as being in good and sanitary operating order, condition and repair, AS IS,
and without representation or warranty by Landlord as to the condition, use or
occupancy which may be made thereof.  Any additional exceptions to the foregoing
must be by written agreement executed by Landlord and Tenant in accordance with
the terms set forth in the Construction Agreement.

 

10.                               SURRENDER

 

Tenant agrees that on the last day of the Term, or on the sooner termination of
this Lease, Tenant shall surrender the Premises to Landlord (a) in good
condition and repair (normal wear and tear and casualty excepted) and (b)
otherwise in accordance with Paragraph 31(e).  Normal wear and tear shall not
include any damage or deterioration that would have been prevented by proper
maintenance by Tenant or Tenant otherwise performing all of its obligations
under this Lease.  On or before the expiration or sooner termination of this
Lease, (i) Tenant shall remove all of Tenant’s Property (as hereinafter defined)
and Tenant’s signage from the Premises and repair any damage caused by such
removal, and (ii) Landlord may, by notice to Tenant given not later than ninety
(90) days prior to the Expiration Date (except in the event of a termination of
this Lease prior to the scheduled Expiration Date, in which event no advance
notice shall be required), require Tenant at Tenant’s expense to remove any or
all Alterations (as defined below) and to repair any damage caused by such
removal.  Notwithstanding anything to the contrary, Tenant shall have no duty to
remove (i) the Landlord Improvements, and (ii) any Alteration installed with
Landlord’s consent if Landlord did not inform Tenant at the time that Landlord
provided such consent that Landlord would require Tenant to remove such
Alteration prior to the Expiration Date; provided, however, that with respect to
any Alteration that does not require Landlord’s consent, Tenant shall not be
entitled to avail itself of the provisions of this sentence with respect to such
Alterations unless Tenant requests Landlord’s prior written consent to such
Alterations (despite not being required to do so).  Any of Tenant’s Property not
so removed by Tenant as required herein shall be deemed abandoned and may be
stored, removed, and disposed of by Landlord at Tenant’s expense, and Tenant
waives all claims against Landlord for any damages resulting from Landlord’s
retention and

 

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disposition of such property; provided, however, that Tenant shall remain liable
to Landlord for all costs incurred in storing and disposing of such abandoned
property of Tenant.  All Alterations (except those Alterations that Landlord
requires Tenant to remove in accordance with the terms of this Lease) shall
remain in the Premises as the property of Landlord.

 

11.                               ALTERATIONS AND ADDITIONS

 

(a)     Except with respect to any alterations, additions or improvements to the
Premises or any part thereof costing less than Fifty Thousand Dollars ($50,000)
for any one project, and which do not affect the Structural Components, Systems
(as defined in Paragraph 12(a) below) or exterior appearance of the Building,
Tenant shall not make, or permit to be made, any alteration, addition or
improvement (hereinafter referred to individually as an “Alteration” and
collectively as the “Alterations”) to the Premises or any part thereof without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld; provided, however, that Landlord shall have the right in its sole and
absolute discretion to consent or to withhold its consent to any Alteration
which affects the Structural Components of the Building.  Tenant shall be
required to notify Landlord in writing before making any Alterations.

 

(b)       Any Alteration to the Premises shall be at Tenant’s sole cost and
expense, in compliance with all applicable Laws and all reasonable requirements
requested by Landlord, including, without limitation, the requirements of any
insurer providing coverage for the Premises or any part thereof, and in
accordance with plans and specifications approved in, writing by Landlord, and
shall be constructed and installed by a contractor approved in writing by
Landlord.  In connection with any Alteration, Tenant shall deliver plans and
specifications therefor to Landlord prior to commencing such Alterations and
shall deliver to Landlord a set of “as built” plans and specifications upon
completion of such Alterations.  As a further condition to giving consent for
Alterations the projected cost of which are in excess of One Hundred Thousand
Dollars ($100,000), Landlord may require Tenant to provide Landlord, at Tenant’s
sole cost and expense, a payment and performance bond in form acceptable to
Landlord, in a principal amount not less than one and one-half times the
estimated costs of such Alterations, to ensure Landlord against any liability
for mechanic’s and materialmen’s liens and to ensure completion of work.  Before
Alterations may begin, valid building permits or other permits or licenses
required must be furnished to Landlord, and, once the Alterations begin, Tenant
will diligently and continuously pursue their completion.  Landlord may monitor
construction of the Alterations and Tenant shall reimburse Landlord for its
reasonable and actual out-of-pocket costs (including, without limitation, the
costs of any construction manager retained by Landlord) in reviewing plans and
documents and in monitoring construction.  Tenant shall maintain during the
course of construction, at its sole cost and expense, builders’ risk insurance
for the amount of the completed value of the Alterations on an all-risk
non-reporting form covering all improvements under construction, including
building materials, and other insurance in amounts and against such risks as
Landlord shall reasonably require in connection with the Alterations.  In
addition to and without limitation on the generality of the foregoing, Tenant
shall ensure that its contractors procure and maintain in full force and effect
during the course of construction a “broad form” commercial general liability
and property damage policy of insurance naming Landlord, Tenant, Landlord’s
Investment Advisors, any property manager designated by Landlord and Landlord’s
lenders as additional insureds.  The minimum limit of coverage of the aforesaid
policy shall be in the amount of not less than Three Million Dollars
($3,000,000.00) for injury or death of one person in any one accident or
occurrence and in the amount of not less

 

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than Three Million Dollars ($3,000,000.00) for injury or death of more than one
person in any one accident or occurrence, and shall contain a severability of
interest clause or a cross liability endorsement.  Such insurance shall further
insure Landlord and Tenant against liability for property damage of at least One
Million Dollars ($1,000,000.00).

 

(c)       All Alterations, including, but not limited to, heating, lighting,
electrical, air conditioning, fixed partitioning, drapery, wall covering and
paneling, built-in cabinet work and carpeting installations made by Tenant,
together with all property that has become an integral part of the Premises,
shall at the end of the Term become the property of Landlord, and shall not be
deemed trade fixtures or Tenant’s Property.

 

(d)       All private telephone systems, computer or telecommunications
equipment and related cabling must be removed upon the expiration or sooner
termination of this Lease and the Premises restored to the same condition as
before such installation.

 

(e)       Notwithstanding anything herein to the contrary, before installing any
equipment or lights which generate an undue amount of heat in the Premises, or
if Tenant plans to use any high-power usage equipment in the Premises, Tenant
shall obtain the written permission of Landlord unless Tenant’s use of such
equipment does not (i) exceed the capacity of the feeders, risers or wiring
serving the Premises, or (ii) affect the temperature otherwise maintained by the
HVAC system.  If Landlord’s consent to such equipment is required, Landlord may
refuse to grant such permission unless Tenant agrees to pay the costs to
Landlord for installation of supplementary air conditioning capacity or
electrical systems necessitated by such equipment.

 

(f)        Tenant agrees not to proceed to make any Alterations, notwithstanding
consent from Landlord to do so, until Tenant notifies Landlord in writing at
least ten (10) days prior to the date Tenant desires to commence construction or
installation of such Alterations in order that Landlord may post appropriate
notices to avoid any liability to contractors or material suppliers for payment
for the Alterations.  Tenant will at all times permit such notices to be posted
and to remain posted until the completion of work.

 

(g)       Tenant shall not, at any time prior to or during the Term, directly or
indirectly employ, or permit the employment of, any contractor, mechanic or
laborer in the Premises, whether in connection with any Alteration or otherwise,
if it is reasonably foreseeable that such employment will materially interfere
or cause any material conflict with other contractors, mechanics, or laborers
engaged in the construction, maintenance or operation of the Premises by
Landlord, Tenant or others.  In the event of any such interference or conflict,
Tenant, upon demand of Landlord, shall cause all contractors, mechanics or
laborers causing such interference or conflict to leave the Premises
immediately.

 

12.                               MAINTENANCE AND REPAIRS OF PREMISES

 

(a)       Maintenance by Tenant.  Except as otherwise expressly provided in
Paragraph 2(b)(1) above, this Paragraph 12 and Paragraphs 20 and 21 below,
throughout the Term, Tenant shall, at its sole expense, keep and maintain in
good order and condition the Premises (other than the Structural Components of
the Building, Common Areas and the Solar Systems (but only if Landlord is
required to maintain the Solar Systems pursuant to Exhibit E-3 attached hereto),
which shall be Landlord’s duty to maintain pursuant to Paragraph

 

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12(b) below) and Tenant’s Property, including, without limitation, all costs to
maintain, repair, and replace the Premises, or any part thereof and the personal
property used in conjunction therewith, including without limitation, (a) all
costs paid under maintenance, management and service agreements such as
contracts for janitorial, security and refuse removal, (b) all costs to
maintain, repair and replace the roof coverings of the Building or any part
thereof, (c) all costs to maintain, repair and replace the plumbing, sewer,
drainage, electrical, fire protection, escalator, elevator, life safety and
security systems, the heating, ventilating and air conditioning (“HVAC”)
(subject to the terms of Paragraph 12(b) below), and other mechanical,
electrical and communications systems and equipment serving the Premises or any
part thereof (collectively, the “Systems”), (d) the cost of all cleaning and
janitorial services and supplies, the cost of window glass replacement and
repair, (e) the cost of maintenance and replacement of machinery, tools and
equipment used in connection with the operation or maintenance of the Premises
for which Tenant is responsible, and (f) all costs of all maintenance contracts
and fees payable to consultants for the Systems, whether such Systems are or
shall be required by Landlord’s insurance carriers, Laws (as hereinafter
defined) or otherwise.  Further, during the Warranty Period, Tenant shall
maintain all items subject to a manufacturer’s warranty or guarantee in
accordance with the manufacturer’s requirements so as to not limit or otherwise
affect the validity or effectiveness of any such warranty or guarantee (and
Landlord shall be relieved of its obligation to repair any such item pursuant to
its warranty under Paragraph 2(b)(1) to the extent it is unable to enforce any
such manufacturer’s warranty or guarantee as a result of the Tenant’s failure to
comply with the provisions of this sentence). Tenant shall not do nor shall
Tenant allow Tenant’s Agents to do anything to cause any damage, deterioration
or unsightliness to the Premises.  Tenant shall promptly report in writing to
Landlord any defective condition known to it which Landlord is required to
repair pursuant to Paragraph 2(b)(1), and failure to so report such defects
shall make Tenant responsible to Landlord for any liability incurred by Landlord
caused as a result of Tenant’s failure to report such condition.

 

Without limiting the foregoing, Tenant, at its expense, shall maintain
continuously throughout the Term a service contract (the “HVAC Service
Contract”) with a licensed HVAC repair and maintenance contractor (“HVAC
Contractor”) reasonably approved by Landlord, which HVAC Service Contract shall
provide for the periodic inspection and servicing of the HVAC equipment at least
once every sixty (60) days during the Term, and the preparation of a report of
any defective conditions, together with any recommendations for maintenance and
repair.  Tenant shall provide Landlord with a copy of the Service Contract and
each service report issued thereunder promptly upon mutual execution or receipt
thereof.  Further, Landlord shall have the right to contract with an independent
HVAC repair and maintenance contractor (“Landlord’s HVAC Contractor”), who shall
perform an annual survey of the HVAC systems to verify the work performed by
Tenant’s HVAC Contractor and the status of the HVAC systems.  Tenant shall
follow all reasonable recommendations of Tenant’s HVAC Contractor and Landlord’s
HVAC Contractor for the maintenance and repair of the HVAC systems.  The cost of
Landlord’s HVAC Contractor shall be reimbursable to Landlord as an Operating
Expense; provided, however, that in no event shall Tenant be responsible for any
portion of such cost to the extent it exceeds Ten Thousand Dollars ($10,000) in
any given Computation Year.  Notwithstanding anything to the contrary herein, if
Landlord, in its reasonable discretion, determines that Tenant’s existing HVAC
Contractor’s work is unsatisfactory, Landlord shall have the right to require
Tenant to, within thirty (30) days after Tenant’s receipt of such notice from
Landlord, terminate such existing HVAC Contractor and enter into a new service
contract with a different contractor reasonably acceptable to Landlord.

 

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(b)       Maintenance by Landlord.  Landlord shall, at its sole cost and
expense, keep and maintain in good order and condition the Structural Components
of the Building.  Further, Landlord shall, subject to reimbursement as an
Operating Expense, (i) keep and maintain in good order and condition the Common
Areas (including, without limitation, the Parking Areas, pavement, landscaping,
sprinkler systems, sidewalks, driveways, curbs, lighting systems in the Common
Areas, and window washing and painting the Building’s exterior, exterior fire
protection systems and sweeping of Common Areas), the roof, and, if applicable
pursuant to Exhibit E-3, the Solar Systems, and (ii) perform any maintenance,
repair or replacement otherwise to be performed by Tenant but which costs more
than One Hundred Thousand Dollars ($100,000).

 

(c)       Tenant’s Waiver of Rights.  Tenant hereby expressly waives all rights
to make repairs at the expense of Landlord or to terminate this Lease, as
provided for in California Civil Code Sections 1941 and 1942, and 1932(l),
respectively, and any similar or successor statute or law in effect or any
amendment thereof during the Term.

 

13.                               LANDLORD’S INSURANCE

 

Landlord shall purchase and keep in force fire, extended coverage and “all risk”
insurance covering the Premises.  Tenant shall, at its sole cost and expense,
comply with any and all reasonable requirements pertaining to the Premises of
any insurer necessary for the maintenance of reasonable fire and commercial
general liability insurance, covering the Premises.  Landlord may, at Landlord’s
election (if available at commercially reasonable rates or if required by a
Superior Mortgagee (as defined below)), maintain earthquake, flood, terrorism
and/or “Loss of Rents” insurance, insuring that the Rent will be paid in a
timely manner to Landlord for a period of at least twelve (12) months if the
Premises or any portion thereof are destroyed or rendered unusable or
inaccessible by any cause insured against under this Lease.

 

14.                               TENANT’S INSURANCE

 

(a)       Commercial General Liability Insurance.  Tenant shall, at Tenant’s
expense, secure and keep in force a “broad form” commercial general liability
insurance and property damage policy covering the Premises, insuring Tenant, and
naming Landlord and Landlord’s agents from time to time (collectively
“Landlord’s Agents”), and Landlord’s lenders as additional insureds, against any
liability arising out of the ownership, use, occupancy or maintenance of the
Premises.  The minimum limit of coverage of such policy shall be in the amount
of not less than Five Million Dollars ($5,000,000.00) for injury or death of one
person in any one accident or occurrence and in the amount of not less than Five
Million Dollars ($5,000,000.00) for injury or death of more than one person in
any one accident or occurrence, shall include an extended liability endorsement
providing contractual liability coverage (which shall include coverage for
Tenant’s indemnification obligations in this Lease), and shall contain a
severability of interest clause or a cross liability endorsement.  Such
insurance shall further insure Landlord and Tenant against liability for
property damage of at least Five Million Dollars ($5,000,000.00).  Landlord may
from time to time require reasonable increases in any such limits if required by
Landlord’s lender.  The limit of any insurance shall not limit the liability of
Tenant hereunder.  No policy maintained by Tenant under this Paragraph
14(a) shall contain a deductible greater than One Hundred Thousand Dollars
($100,000).

 

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(b)       Tenant’s Casualty Insurance.  Tenant shall maintain in full force and
effect on all of the Alterations and Tenant’s personal property, furniture,
furnishings, trade or business fixtures and equipment (collectively, “Tenant’s
Property”) on the Premises, a policy or policies of fire and extended coverage
insurance with standard coverage endorsement to the extent of the full
replacement cost thereof.  No policy maintained by Tenant under this Paragraph
14(b) shall contain a deductible greater than One Hundred Thousand Dollars
($100,000).  During the Term of this Lease the proceeds from any such policy or
policies of insurance shall be used for the repair or replacement of the
Alterations and the Tenant’s Property so insured.  Landlord shall have no
interest in the insurance upon Tenant’s equipment and fixtures and will sign all
documents reasonably necessary in connection with the settlement of any claim or
loss by Tenant.  Landlord will not carry insurance on Tenant’s possessions.

 

(c)       Worker’s Compensation Insurance; Employer’s Liability Insurance. 
Tenant shall, at Tenant’s expense, maintain in full force and effect worker’s
compensation insurance with not less than the minimum limits required by law.

 

(d)       Loss of Income, Extra Expense & Business Interruption Insurance.
Tenant shall, at Tenant’s expense, maintain loss of income, extra expense and
business interruption insurance in such amounts as will reimburse Tenant for
direct or indirect loss of earnings attributable to all perils required to be
insured against under Paragraph 14(b) above for a period not less than twelve
(12) months.

 

(e)       Evidence of Coverage.  All policies of insurance required to be
carried by Tenant shall be issued as primary policies and not contributing with
or in excess of coverage that Landlord may carry, by an insurance company
authorized to do business in the state in which the Premises are located for the
issuance of such type of insurance coverage and rated A-:VII or better in Best’s
Key Rating Guide.  Tenant shall deliver to Landlord certificates of insurance
and true and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant.  Tenant shall, at least ten (10) days prior to
expiration of each policy, furnish Landlord with certificates of renewal.  Each
certificate shall expressly provide that such policies shall not be cancelable
or otherwise subject to modification except after thirty (30) days prior written
notice to Landlord and the other parties named as additional insureds as
required in this Lease (except for cancellation for nonpayment of premium, in
which event cancellation shall not take effect until at least ten (10) days
notice has been given to Landlord).

 

15.                               INDEMNIFICATION

 

(a)       Of Landlord.  Tenant shall defend, protect, indemnify and hold
harmless Landlord and Landlord’s Agents against and from any and all claims,
suits, liabilities, judgments, costs, demands, causes of action and expenses
(including, without limitation, reasonable attorneys’ fees, costs and
disbursements) arising from (1) the use of the Premises by Tenant or Tenant’s
Agents, or from any activity done, permitted or suffered by Tenant or Tenant’s
Agents in or about the Premises, and (2) any act, neglect, fault, willful
misconduct or omission of Tenant or Tenant’s Agents, or from any breach or
default in the terms of this Lease by Tenant or Tenant’s Agents, and (3) any
action or-proceeding brought on account of any matter in items (1) or (2);
provided, that the foregoing indemnity shall not apply to the gross negligence
or willful misconduct of Landlord or Landlord’s Agents.  If any action or
proceeding

 

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is brought against Landlord by reason of any such claim, upon notice from
Landlord, Tenant shall defend the same at Tenant’s expense by counsel reasonably
satisfactory to Landlord.  As a material part of the consideration to Landlord,
Tenant hereby releases Landlord and Landlord’s Agents from responsibility for,
waives its entire claim of recovery for and assumes all risk of (i) damage to
property or injury to persons in or about the Premises from any cause whatsoever
(except that which is caused by the gross negligence or willful misconduct of
Landlord or Landlord’s Agents or by the failure of Landlord to observe any of
the terms and conditions of this Lease, if such failure has persisted for an
unreasonable period of time after written notice of such failure), or (ii) loss
resulting from business interruption or loss of income at the Premises.  The
obligations of Tenant under this Paragraph 15 shall survive any termination of
this Lease.

 

(b)       No Impairment of Insurance.  The foregoing indemnity shall not relieve
any insurance carrier of its obligations under any policies required to be
carried by either party pursuant to this Lease, to the extent that such policies
cover the peril or occurrence that results in the claim that is subject to the
foregoing indemnity.

 

(c)       Of Tenant.  Landlord shall defend, protect, indemnify and hold
harmless Tenant and Tenant’s Agents against and from any and all claims, suits,
liabilities, judgments, costs, demands, causes of action and expenses
(including, without limitation, reasonable attorney’s fees) arising from the
gross negligence or willful misconduct of Landlord or Landlord’s Agents.

 

16.                               SUBROGATION

 

Landlord and Tenant hereby mutually waive any claim against the other and its
Agents for any loss or damage to any of their property located on or about the
Premises that is caused by or results from perils covered by property insurance
carried by the respective parties, to the extent of the proceeds of such
insurance actually received with respect to such loss or damage, whether or not
due to the negligence of the other party or its Agents.  Because the foregoing
waivers will preclude the assignment of any claim by way of subrogation to an
insurance company or any other person, each party now agrees to immediately give
to its insurer written notice of the terms of these mutual waivers and shall
have their insurance policies endorsed to prevent the invalidation of the
insurance coverage because of these waivers.  Nothing in this Paragraph 16 shall
relieve a party of liability to the other for failure to carry insurance
required by this Lease.

 

17.                               SIGNS

 

Tenant, at Tenant’s sole cost and expense, shall have the right to monument
and/or building signage allowed by the City of Mountain View, California and
shall have the right to display its corporate name and logo on allowable
locations throughout the Premises.  Tenant shall remove any sign, advertisement
or notice placed on the Premises by Tenant upon the expiration of the Term or
sooner termination of this Lease, and Tenant shall repair any damage or injury
to the Premises caused thereby, all at Tenant’s expense.  If any signs are not
removed, or necessary repairs not made, Landlord shall have the right to remove
the signs and repair any damage or injury to the Premises at Tenant’s sole cost
and expense.

 

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18.                               FREE FROM LIENS

 

Tenant shall keep the Premises free from any liens arising out of any work
performed, material furnished or obligations incurred by or for Tenant.  In the
event that Tenant shall not, within ten (10) days following Tenant’s receipt of
notice of the imposition of any such lien, cause the lien to be released of
record by payment or posting of a proper bond, Landlord shall have in addition
to all other remedies provided herein and by law the right but not the
obligation to cause same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien.  All such sums paid by
Landlord and all expenses incurred by it in connection therewith (including,
without limitation, attorneys’ fees) shall be payable to Landlord by Tenant upon
demand.  Landlord shall have the right at all times to post and keep posted on
the Premises any notices permitted or required by law or that Landlord shall
deem proper for the protection of Landlord, the Premises and the Premises, from
mechanics’ and materialmen’s liens.  Tenant shall give to Landlord at least ten
(10) days’ prior written notice of commencement of any repair or construction on
the Premises.

 

19.                               ENTRY BY LANDLORD

 

Tenant shall permit Landlord and Landlord’s Agents to enter into and upon the
Premises at all reasonable times, upon reasonable notice of not less than
twenty-four (24) hours (except in the case of an emergency, for which no notice
shall be required), and subject to Tenant’s reasonable security arrangements,
for the purpose of inspecting the same or showing the Premises to prospective
purchasers, lenders or, during the last twelve (12) months of the Term (unless
in connection with Landlord’s recapture of the Premises or a portion thereof, in
which case Landlord may show the Premises or such applicable portion thereof at
any time upon at least twenty-four (24) hours notice), to tenants, or to alter,
improve, maintain and repair the Premises or the Building as required or
permitted of Landlord under the terms hereof, or for any other business purpose,
without any rebate of Rent and without any liability to Tenant for any loss of
occupation or quiet enjoyment of the Premises thereby occasioned (except for
actual damages resulting from the gross negligence or willful misconduct of
Landlord); and Tenant shall permit Landlord to post notices of
non-responsibility and ordinary “for sale” or, during the last eighteen (18)
months of the Term (unless in connection with Landlord’s recapture of the
Premises or a portion thereof, in which case Landlord may post such signage
immediately upon notice of such recapture) “for lease” signs.  No such entry
shall be construed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction or constructive eviction of Tenant from the
Premises.  Landlord may temporarily close entrances, doors, corridors, elevators
or other facilities without liability to Tenant by reason of such closure in the
case of an emergency and when Landlord otherwise deems such closure necessary.

 

20.                               DESTRUCTION AND DAMAGE

 

(a)       If the Premises are damaged by fire or other perils, Tenant shall give
Landlord immediate notice thereof and, to the extent insurance proceeds actually
received by Landlord are sufficient to perform all necessary repairs and
restoration, Landlord shall commence promptly to repair and restore the Premises
and prosecute the same diligently to completion within twelve (12) months after
Landlord has received all permits and approvals required to commence such repair
and restoration, but no later than eighteen (18) months from the date of the
casualty, and this Lease shall remain in full force and effect.  If such repair
and

 

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restoration is not completed by the end of such twelve (12) or eighteen (18)
month period, as applicable, then Tenant shall have the right to terminate this
Lease by written notice to Landlord given within fifteen (15) days after the end
of such twelve (12) month or eighteen (18) month period, as applicable.

 

(b)       Notwithstanding anything to the contrary contained in this Paragraph,
in the event (i) insurance proceeds actually received by Landlord are
insufficient to perform all necessary repairs and restoration, then Landlord may
elect to terminate this Lease by written notice to Tenant within thirty (30)
days after delivery of such notice, or (ii) damage to the Building occurs during
the last twelve (12) months of the Term and exceeds twenty-five (25%) percent of
the full insurable value thereof, then either Landlord or Tenant may elect to
terminate this Lease by written notice of such election given to the other
within thirty (30) days after the date Landlord obtains actual knowledge of such
destruction.

 

(c)       In the event of repair and restoration as herein provided, the monthly
installments of Base Rent shall be abated proportionately in the ratio which
Tenant’s use of the Building is impaired during the period of such repair or
restoration; provided, however, that Tenant shall not be entitled to such
abatement to the extent that such damage or destruction resulted from the acts
or inaction of Tenant or Tenant’s Agents.  Except as expressly provided in the
immediately preceding sentence with respect to abatement of Base Rent, Tenant
shall have no claim against Landlord for, and hereby releases Landlord and
Landlord’s Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any damage to or destruction of the Premises or the repair or
restoration thereof, including, without limitation, any cost, loss or expense
resulting from any loss of use of the whole or any part of the Premises and/or
any inconvenience or annoyance occasioned by such damage, repair or restoration.

 

(d)       If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall repair or restore only the initial Landlord
Improvements constructed by Landlord in the Premises pursuant to the terms of
this Lease, substantially to their condition existing immediately prior to the
occurrence of the damage or destruction; and Tenant shall promptly repair and
restore, at Tenant’s expense, Tenant’s Alterations which were not constructed by
Landlord.  Landlord shall have no obligation to restore any improvements
constructed by Tenant or which were not part of the Landlord Improvements.

 

(e)       Tenant hereby waives the provisions of California Civil Code
Section 1932(2) and Section 1933(4) which permit termination of a lease upon
destruction of the leased premises, and the provisions of any similar law now or
hereinafter in effect, and the provisions of this Paragraph 20 shall govern
exclusively in case of such destruction.

 

21.                               CONDEMNATION

 

(a)       If twenty-five percent (25%) or more of either the Building or the
Parking Areas is taken for any public or quasi-public purpose by any lawful
governmental power or authority, by exercise of the right of appropriation,
inverse condemnation, condemnation or eminent domain, or sold to prevent such
taking (each such event being referred to as a “Condemnation”), Landlord may, at
its option, terminate this Lease as of the date title vests in the condemning
party.  If twenty-five percent (25%) or more of either the Building or the
Parking Areas is taken and if the Premises remaining after such Condemnation and
any

 

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repairs by Landlord would be untenantable for the conduct of Tenant’s business
operations, Tenant shall have the right to terminate this Lease as of the date
title vests in the condemning party.  If either party elects to terminate this
Lease as provided herein, such election shall be made by written notice to the
other party given within thirty (30) days after the nature and extent of such
Condemnation have been finally determined.  If neither Landlord nor Tenant
elects to terminate this Lease to the extent permitted above, Landlord shall
promptly proceed to restore the Premises, to the extent of any Condemnation
award received by Landlord, to substantially the same condition as existed prior
to such Condemnation, allowing for the reasonable effects of such Condemnation,
and a proportionate abatement shall be made to the Base Rent corresponding to
the time during which, and to the portion of the floor area of the Building
(adjusted for any increase thereto resulting from any reconstruction) of which,
Tenant is deprived on account of such Condemnation and restoration, as
reasonably determined by Landlord.  Except as expressly provided in the
immediately preceding sentence with respect to abatement of Base Rent, Tenant
shall have no claim against Landlord for, and hereby releases Landlord and
Landlord’s Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any Condemnation or the repair or restoration of the Premises
following such Condemnation, including, without limitation, any cost, loss or
expense resulting from any loss of use of the whole or any part of the Premises
and/or any inconvenience or annoyance occasioned by such Condemnation, repair or
restoration. The provisions of California Code of Civil Procedure
Section 1265.130, which allows either party to petition the Superior Court to
terminate the Lease in the event of a partial taking of the Premises, and any
other applicable law now or hereafter enacted, are hereby waived by Tenant.

 

(b)       Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection with any Condemnation, and Tenant shall have no claim against
Landlord for the value of any unexplored term of this Lease or otherwise;
provided, however, that Tenant shall be entitled to receive any award separately
allocated by the condemning authority to Tenant for Tenant’s relocation expenses
or the value of Tenant’s Property (specifically excluding fixtures, Alterations
and other components of the Premises which under this Lease or by law are or at
the expiration of the Term will become the property of Landlord), provided that
such award does not reduce any award otherwise allocable or payable to Landlord.

 

22.                               ASSIGNMENT AND SUBLETTING

 

(a)       Except as otherwise expressly permitted by this Lease, Tenant shall
not voluntarily or by operation of law, (1) mortgage, pledge, hypothecate or
encumber this Lease or any interest herein, (2) assign or transfer this Lease or
any interest herein, sublease the Premises or any part thereof, or any right or
privilege appurtenant thereto, or allow any other person (the employees and
invitees of Tenant excepted) to occupy or use the Premises, or any portion
thereof, without first obtaining the written consent of Landlord, which consent
shall not be withheld unreasonably as set forth below in this Paragraph 22,
provided that Tenant is not then in Default under this Lease nor is any event
then occurring which with the giving of notice or the passage of time, or both,
would constitute a Default hereunder.  Except as otherwise expressly permitted
by Paragraph 22(j) below, a transfer of greater than a fifty percent (50%)
direct or indirect interest (whether stock, partnership interest, membership
interest or otherwise) of Tenant, either in one (1) transaction or a series of
transactions in any two (2) year period shall

 

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be deemed to be an assignment under this Lease.  When Tenant requests Landlord’s
consent to such assignment or subletting, it shall notify Landlord in writing of
the name and address of the proposed assignee or subtenant and the nature and
character of the business of the proposed assignee or subtenant and shall
provide current and prior financial statements for the proposed assignee or
subtenant, which financial statements shall be audited to the extent available
and shall in any event be prepared in accordance with generally accepted
accounting principles.  Tenant shall also provide Landlord with a copy of the
proposed sublease or assignment agreement, including all material terms and
conditions thereof.  Landlord shall have the option, to be exercised within
thirty (30) days of receipt of the foregoing, to (1) terminate this Lease as of
the commencement date stated in the proposed sublease or assignment (but in the
case of a sublease, only if the sublease is for (A) one (1) floor or more of the
Building and for a term of greater than thirty-six (36) months (including any
extension options granted under such sublease), (B) greater than fifty percent
(50%) of the total rentable square footage of the Building, or (C) a term that
commences during the final two (2) years of the Term of this Lease),
(2) sublease or take an assignment, as the case may be, from Tenant of the
interest, or any portion thereof, in this Lease and/or the Premises that Tenant
proposes to assign or sublease, on the same terms and conditions as stated in
the proposed sublet or assignment agreement (but in the case of a sublease, only
if the sublease is for either (A) one (1) floor or more of the Building and for
a term of greater than thirty-six (36) months (including any extension options
granted under such sublease), or (B) greater than fifty percent (50%) of the
total rentable square footage of the Building), (3) consent to the proposed
assignment or sublease, or (4) refuse its consent to the proposed assignment or
sublease, providing that such consent shall not be unreasonably withheld so long
as Tenant is not then in Default under this Lease nor is any event then
occurring which with the giving of notice or the passage of time, or both, would
constitute a Default hereunder.  In the event Landlord elects to terminate this
Lease or sublease or take an assignment from Tenant of the interest, or portion
thereof, in the Lease and/or the Premises that Tenant proposes to assign or
sublease as provided in the foregoing clauses (1) and (2), respectively, then
Landlord shall have the additional right to negotiate directly with Tenant’s
proposed assignee or subtenant and to enter into a direct lease or occupancy
agreement with such party on such terms as shall be acceptable to Landlord in
its sole and absolute discretion, and Tenant hereby waives any claims against
Landlord related thereto, including, without limitation, any claims for any
compensation or profit related to such lease or occupancy agreement.

 

(b)       Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord shall be entitled to consider all reasonable
criteria including, but not limited to, the following: (1) the business
reputation of the proposed individuals who will be managing and operating the
business operations of the assignee or sublessee, and the long-term financial
and competitive business prospects of the proposed assignee or sublessee, and
(2) the creditworthiness and financial stability of the proposed assignee or
sublessee in light of the responsibilities involved.  In any event, Landlord may
withhold its consent to any assignment or subletting, if (i) the actual use
proposed to be conducted in the Premises or portion thereof conflicts with the
provisions of Paragraph 8(a) or (b) above, or (ii) the proposed sublessee or
assignee is either a governmental agency or instrumentality thereof.

 

(c)       Except as otherwise expressly permitted by this Lease, in the event of
an assignment or subletting as herein provided, Tenant shall pay to Landlord, as
Additional Rent, fifty percent (50%) of the excess, if any, of (1) the rent and
any additional rent payable by the assignee or sublessee to Tenant, less
reasonable attorneys’ fees and reasonable

 

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and customary market-based leasing commissions and tenant improvement costs, if
any, incurred by Tenant in connection with such assignment or sublease; minus
(2) Base Rent plus Additional Rent allocable to that part of the Premises
affected by such assignment or sublease pursuant to the provisions of this
Lease, which commissions, attorneys’ fees, tenant improvement costs and
marketing expenses shall, for purposes of the aforesaid calculation, be
amortized on a straight-line basis over the term of such assignment or
sublease.  The assignment or sublease agreement, as the case maybe, after
approval by Landlord to the extent required, shall not be amended without
Landlord’s prior written consent, and shall contain a provision directing the
assignee or subtenant to pay the rent and other sums due thereunder directly to
Landlord upon receiving written notice from Landlord that Tenant is in default
under this Lease with respect to the payment of Rent.  In the event that,
notwithstanding the giving of such notice, Tenant collects any rent or other
sums from the assignee or subtenant, then Tenant shall hold such sums in trust
for the benefit of Landlord and shall immediately forward the same to Landlord. 
Landlord’s collection of such rent and other sums shall not constitute an
acceptance by Landlord of attornment by such assignee or subtenant.  A consent
to one assignment, subletting, occupation or use shall not be deemed to be a
consent to any other or subsequent assignment, subletting, occupation or use,
and consent to any assignment or subletting shall in no way relieve Tenant of
any liability under this Lease.  Except as otherwise expressly permitted by this
Lease, any assignment or subletting without Landlord’s consent shall be void,
and shall, at the option of Landlord, constitute a Default under this Lease.

 

(d)       Notwithstanding any assignment or subletting, Tenant and any guarantor
or surety of Tenant’s obligations under this Lease shall at all times remain
fully and primarily responsible and liable for the payment of the Rent and for
compliance with all of Tenant’s other obligations under this Lease (regardless
of whether Landlord’s approval has been obtained for any such assignment or
subletting).

 

(e)       Tenant shall pay Landlord’s reasonable fees (including, without
limitation, the fees of Landlord’s counsel), incurred in connection with
Landlord’s review and processing of documents regarding any proposed assignment
or sublease.

 

(f)        Notwithstanding anything in this Lease to the contrary, in the event
Landlord consents to an assignment or subletting by Tenant in accordance with
the terms of this Paragraph 22, Tenant’s assignee or subtenant shall have no
right to further assign this Lease or any interest therein or thereunder or to
further sublease all or any portion of the Premises.

 

(g)       If this Lease is assigned, whether or not in violation of the
provisions of this Lease, Landlord may collect Rent from the assignee.  If the
Premises or any part thereof is sublet or used or occupied by anyone other than
Tenant, whether or not in violation of this Lease, Landlord may, after a Default
by Tenant, collect Rent from the subtenant or occupant. In either event,
Landlord may apply the net amount collected to Rent, but no such assignment,
subletting, occupancy or collection shall be deemed a waiver of any of the
provisions of this Paragraph 22, or the acceptance of the assignee, subtenant or
occupant as tenant, or a release of Tenant from the further performance by
Tenant of Tenant’s obligations under this Lease.  The consent by Landlord to an
assignment, mortgaging, pledging, encumbering, transfer, use, occupancy or
subletting pursuant to any provision of this Lease shall not, except as
otherwise provided herein, in any way be considered to relieve Tenant from

 

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obtaining the express consent of Landlord to any other or further assignment,
mortgaging, pledging, encumbering, transfer, use, occupancy or subletting. 
References in this Lease to use or occupancy by anyone other than Tenant shall
not be construed as limited to subtenants and those claiming under or through
subtenants but as including also licensees or others claiming under or through
Tenant, immediately or remotely.  The listing of any name other than that of
Tenant on any door of the Premises or on any directory or in any elevator in the
Building, or otherwise, shall not, except as otherwise provided herein, operate
to vest in the person so named any right or interest in this Lease or in the
Premises, or be deemed to constitute, or serve as a substitute for, or any
waiver of, any prior consent of Landlord required under this Paragraph 22.

 

(h)       Each subletting and/or assignment pursuant to this Paragraph shall be
subject to all of the covenants, agreements, terms, provision and conditions
contained in this Lease and each of the covenants, agreements, terms, provisions
and conditions of this Lease shall be automatically incorporated therein. If
Landlord shall consent to, or reasonably withhold its consent to, any proposed
assignment or sublease, Tenant shall indemnify, defend and hold harmless
Landlord against and from any and all loss, liability, damages, costs and
expenses (including reasonable counsel fees) resulting from any claims that may
be made against Landlord by the proposed assignee or sublessee or by any brokers
or other persons claiming a commission or similar in connection with the
proposed assignment or sublease.

 

(i)        Tenant acknowledges and agrees that the restrictions, conditions and
limitations imposed by this Paragraph 22 on Tenant’s ability to assign or
transfer this Lease or any interest herein, to sublet the Premises or any part
thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or use the Premises or any
portion thereof, are, for the purposes of California Civil Code Section 1951.4,
as amended from time to time, and for all other purposes, reasonable at the time
that the Lease was entered into, and shall be deemed to be reasonable at the
time that Tenant seeks to assign or transfer this Lease or any interest herein,
to sublet the Premises or any part thereof, to transfer or assign any right or
privilege appurtenant to the Premises, or to allow any other person to occupy or
use the Premises or any portion thereof.

 

(j)        Notwithstanding anything to the contrary contained in this Paragraph
22, Tenant may, upon at least ten (10) business days written notice to Landlord
(unless such prior notice is prohibited by law or contract (and such contract
was not entered into primarily for the purpose of avoiding the application of
the provisions of this Section)) but without Landlord’s consent, assign the
Lease (or sublet a portion of the Premises) to any entity which controls, is
under common control with, or is controlled by, Tenant or any Person (as herein
defined) with which the Tenant effects (x) a merger, acquisition, sale,
financing or recapitalization which results in a Change in Control (as herein
defined); or (y) a sale of all or substantially all of the assets of Tenant
(such entity or Person, as applicable, being a “Related Entity”), so long as
upon completion of such assignment, sublease, merger or sale, such Related
Entity will have a Tangible Net Worth of at least Two Hundred Million Dollars
($200,000,000) (the “Net Worth Requirement”); provided, that if the Net Worth
Requirement is not satisfied, then (i) if, upon completion of such assignment,
sublease, merger or sale, such Related Entity will have a Tangible Net Worth of
more than Ninety Million Dollars ($90,000,000), Landlord’s consent shall not be
required as long as Tenant delivers to Landlord on or before completion of such
assignment, sublease, merger or sale, at Tenant’s sole cost and expense, a
letter of credit in the full amount of the remaining Rent to be paid by Tenant
under this Lease during the

 

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remainder of the Term of this Lease following completion of such assignment,
sublease, merger or sale (the “Letter of Credit”), which Letter of Credit shall
be in substantially the form of the letter of credit attached hereto as
Exhibit G, and which shall be issued by a financial institution reasonably
acceptable to Landlord, and (ii) if, upon completion of such assignment,
sublease, merger or sale, such Related Entity will have a Tangible Net Worth of
Ninety Million Dollars ($90,000,000) or less, then Landlord’s prior written
consent shall be required with respect to such assignment, sublease, merger or
sale (and it shall be reasonable for Landlord to require in connection with
providing any such consent, without limitation, the delivery by Tenant, at
Tenant’s sole cost and expense, of a Letter of Credit meeting the requirements
set forth in clause (i) above).  Concurrently with providing notice to Landlord
of the making of an assignment or sublease to a Related Entity (which notice
shall be delivered to Landlord no later than ten (10) business days prior to
such assignment or subletting unless such prior notice is prohibited by law or
contract (and such contract was not entered into primarily for the purpose of
avoiding the application of the provisions of this Section), in which case
Tenant shall deliver such notice within ten (10) days after such assignment or
subletting), Tenant shall be required to submit to Landlord reasonably
satisfactory evidence that the assignee is a Related Entity and submit evidence
reasonably satisfactory to Landlord confirming the Net Worth Requirement,
together with an executed counterpart of the assignment.  Landlord shall have no
right to terminate this Lease in connection with, and shall have no right to any
sums or other economic consideration resulting from, any of the above described
permitted transfers or assignment to a Related Entity, or any other financing or
capitalization not specifically restricted above, as long as such transfer or
assignment occurs in accordance with the provisions of this Paragraph 22(j). 
For the purpose of this Paragraph 22(j), the term “Tangible Net Worth” means
total assets minus goodwill; minus intangible assets including, consisting of
trade name, customer relationships, copyrights, patents, non-compete clauses,
and in-process technology; minus total liabilities; and the term “Change in
Control” means (i) an acquisition of any voting securities of Tenant (the
“Voting Securities”) by any “Person” (as the term is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)) immediately after which such Person has “Beneficial Ownership”
(within the meaning of Rule 13d-3 promulgated under the 1934 Act), directly or
indirectly, of securities of Tenant representing fifty percent (50%) or more of
the combined voting power of Tenant’s then outstanding Voting Securities, or
(ii) a merger, consolidation or reorganization involving Tenant, unless such
merger, consolidation or reorganization would result in the voting securities of
Tenant outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power
represented by the Voting Securities of Tenant or such surviving entity
outstanding immediately after such merger, consolidation, or reorganization.

 

23.                               TENANT’S DEFAULT

 

The occurrence of any one of the following events shall constitute an event of
default on the part of Tenant (“Default”):

 

(a)       The abandonment of the Premises by Tenant for a period of ten
(10) consecutive days or any abandonment of the Premises by Tenant which would
cause any insurance policy to be invalidated or otherwise lapse in each of the
foregoing cases irrespective of whether or not Tenant is then in monetary
default under this Lease.  Tenant agrees to notice and service of notice as
provided for in this Lease and waives any right to any other or further

 

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notice or service of notice which Tenant may have under any statute or law now
or hereafter in effect;

 

(b)       Failure to pay any installment of Rent or any other monies due and
payable hereunder, said failure continuing for a period of five (5) days after
written notice thereof from Landlord to Tenant;

 

(c)       A general assignment by Tenant or any guarantor or surety of Tenant’s
obligations hereunder, if any, (collectively, “Guarantor”) for the benefit of
creditors;

 

(d)       The filing of a voluntary petition in bankruptcy by Tenant or any
Guarantor, the filing by Tenant or any Guarantor of a voluntary petition for an
arrangement, the filing by or against Tenant or any Guarantor of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by the creditors of Tenant or any Guarantor, said involuntary petition
remaining undischarged for a period of sixty (60) days;

 

(e)       Receivership, attachment, or other judicial seizure of substantially
all of Tenant’s assets on the Premises, such attachment or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after the
levy thereof,

 

(f)        The failure by Tenant or any Guarantor to maintain its legal
existence, if Tenant or such Guarantor is a corporation, partnership, limited
liability company, trust or other legal entity;

 

(g)       Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required by Paragraphs 29 or 30 or 40, and/or failure by
Tenant to deliver to Landlord any financial statement within the time period and
in the manner required by Paragraph 39;

 

(h)       An assignment or sublease, or attempted assignment or sublease, of
this Lease or the Premises by Tenant contrary to the provision of Paragraph 22,
unless such assignment or sublease is expressly conditioned upon Tenant having
received Landlord’s consent thereto;

 

(i)        Failure of Tenant to restore the Security Deposit to the amount and
within the time period provided in Paragraph 7 above;

 

(j)        Failure in the performance of any of Tenant’s covenants, agreements
or obligations hereunder (except those failures specified as events of Default
in subparagraph (a), or any other subparagraphs of this Paragraph 23, which
shall be governed by such other Paragraphs), which failure continues for thirty
(30) days after written notice thereof from Landlord to Tenant, provided that,
if Tenant has exercised reasonable diligence to cure such failure and such
failure cannot be cured within such thirty (30) day period despite reasonable
diligence, Tenant shall not be in default under this subparagraph so long as
Tenant thereafter diligently and continuously prosecutes the cure to completion;

 

(k)       Chronic delinquency by Tenant in the payment of Rent, or any other
periodic payments required to be paid by Tenant under this Lease.  Chronic
delinquency

 

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shall mean failure by Tenant to pay Rent, or any other payments required to be
paid by Tenant under this Lease within three (3) days after written notice
thereof for any three (3) months (consecutive or nonconsecutive) during any
period of twelve (12) months.

 

(l)        Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or be reduced or
materially changed, except as permitted in this Lease; and

 

(m)      Any failure by Tenant to discharge any lien or encumbrance placed on
the Premises or any part thereof in violation of this Lease within twenty (20)
days after the date such lien or encumbrance is filed or recorded against the
Premises or any part thereof;

 

(n)       Tenant agrees that any notice given by Landlord pursuant to Paragraph
23(b) above shall satisfy the requirements for notice under California Code of
Civil Procedure Section 1.16.1, and Landlord shall not be required to give any
additional notice in order to be entitled to commence an unlawful detainer
proceeding.

 

24.                               LANDLORD’S REMEDIES

 

(a)       Termination.  In the event of any Default by Tenant, then in addition
to any other remedies available to Landlord at law or in equity and under this
Lease, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate.  In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:

 

(1)           the worth at the time of award of any unpaid Rent and any other
sums due and payable which have been earned at the time of such termination;
plus

 

(2)           the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus

 

(3)           the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the term of this
Lease after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; plus

 

(4)           any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom, including, without limitation, (A) any costs or expenses incurred by
Landlord (1) in retaking possession of the Premises; (2) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering, remodeling or
rehabilitating the Premises or any affected portions thereof, including such
actions undertaken in connection with the reletting or attempted reletting of
the Premises to a new tenant or tenants; (3) for leasing commissions,
advertising costs and other expenses of reletting the Premises; or (4) in
carrying the Premises, including taxes, insurance premiums, utilities and
security precautions; (B) any unearned brokerage commissions paid in connection
with this Lease; (C) reimbursement of any previously waived or abated Base Rent
or Additional Rent or any free rent or reduced

 

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rental rate granted hereunder; and (D) any concession made or paid by Landlord
to the benefit of Tenant in consideration of this Lease including, but not
limited to, any moving allowances, contributions, payments or loans by Landlord
for tenant improvements, if any, and any outstanding balance (principal and
accrued interest) of any tenant improvement loan, if any), or assumptions by
Landlord of any of Tenant’s previous lease obligations; plus

 

(5)           such reasonable attorneys’ fees incurred by Landlord as a result
of a Default, and costs in the event suit is filed by Landlord to enforce such
remedy; and plus

 

(6)           at Landlord’s election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law

 

(7)           As used in subparagraphs (1) and (2) above, the “worth at the time
of award” is computed by allowing interest at an annual rate equal to twelve
percent (12%) per annum or the maximum rate permitted by law, whichever is
less.  As used in subparagraph (3) above, the “worth at the time of award” is
computed by discounting such amount at the discount rate of Federal Reserve Bank
of San Francisco at the time of award, plus one percent (1%). Tenant hereby
waives for Tenant and for all those claiming under Tenant all right now or
hereafter existing to redeem by order or judgment of any court or by any legal
process or writ, Tenant’s right of occupancy of the Premises after any
termination of this Lease.

 

Tenant waives redemption or relief from forfeiture under California Code of
Civil Procedure Sections 1 174 and II 79, or under any other pertinent present
or future Law, in the event Tenant is evicted or Landlord takes possession of
the Premises by reason of any Default of Tenant hereunder.

 

(b)     Continuation of Lease.  In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant’s
Default and abandonment and recover Rent as it becomes due, provided Tenant has
the right to sublet or assign, subject only to reasonable limitations).  In
addition, Landlord shall not be liable in any way whatsoever for its failure or
refusal to relet the Premises.  For purposes of this Paragraph 24(b), the
following acts by Landlord will not constitute the termination of Tenant’s.
right to possession of the Premises:

 

(1)           Acts of maintenance or preservation or efforts to relet the
Premises, including, but not limited to, alterations, remodeling, redecorating,
repairs, replacements and/or painting as Landlord shall consider advisable for
the purpose of reletting the Premises or any part thereof, or

 

(2)           The appointment of a receiver upon the initiative of Landlord to
protect Landlord’s interest under this Lease or in the Premises.

 

(c)       Re-entry.  In the event of any Default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, in compliance with
applicable law, to re-enter the Premises, by force if necessary, and remove all
persons and property from the Premises; such property may be removed and stored
in a public warehouse or elsewhere at the cost of and for the account of Tenant.

 

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(d)       Reletting.  In the event of the abandonment of the Premises by Tenant
or in the event that Landlord shall elect to re-enter as provided in Paragraph
24(c) or shall take possession of the Premises pursuant to legal proceeding or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in Paragraph 24(a), Landlord may from time to
time, without terminating this Lease, relet the Premises or any part thereof for
such term or terms and at such rental or rentals and upon such other terms and
conditions as Landlord in its sole discretion may deem advisable with the right
to make alterations and repairs to the Premises in Landlord’s sole discretion. 
In the event that Landlord shall elect to so relet, then rentals received by
Landlord from such reletting shall be applied in the following order: (1) to
reasonable attorneys’ fees incurred by Landlord as a result of a Default and
costs in the event suit is filed by Landlord to enforce such remedies; (2) to
the payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord; (3) to the payment of any costs of such reletting; (4) to the payment
of the costs of any alterations and repairs to the Premises; (5) to the payment
of Rent due and unpaid hereunder; and (6) the residue, if any, shall be held by
Landlord and applied in payment of future Rent and other sums payable by Tenant
hereunder as the same may become due and payable hereunder.  Should that portion
of such rentals received from such reletting during any month, which is applied
to the payment of Rent hereunder, be less than the Rent payable during the month
by Tenant hereunder, then Tenant shall pay such deficiency to Landlord.  Such
deficiency shall be calculated and paid monthly.  Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.

 

(e)       Termination.  No re-entry or taking of possession of the Premises by
Landlord pursuant to this Paragraph 24 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction.  Notwithstanding any reletting without termination by Landlord
because of any Default by Tenant, Landlord may at any time after such reletting
elect to terminate this Lease for any such Default.

 

(f)        Cumulative Remedies.  The remedies herein provided are not exclusive
and Landlord shall have any and all other remedies provided herein or by law or
in equity.

 

(g)       No Surrender.  No act or conduct of Landlord, whether consisting of
the acceptance of the keys to the Premises, or otherwise, shall be deemed to be
or constitute an acceptance of the surrender of the Premises by Tenant prior to
the expiration of the Term, and such acceptance by Landlord of surrender by
Tenant shall only flow from and must be evidenced by a written acknowledgment of
acceptance of surrender signed by Landlord.  The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects
in writing that such merger take place, but shall operate as an assignment to
Landlord of any and all existing subleases, or Landlord may, at its option,
elect in writing to treat such surrender as a merger terminating Tenant’s estate
under this Lease, and thereupon Landlord may terminate any or all such subleases
by notifying the sublessee of its election so to do within five (5) days after
such surrender.

 

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25.                               LANDLORD’S RIGHT TO PERFORM TENANT’S
OBLIGATIONS

 

(a)       Without limiting the rights and remedies of Landlord contained in
Paragraph 24 above, if Tenant shall be in Default in the performance of any of
the terms, provisions, covenants or conditions to be performed or complied with
by Tenant pursuant to this Lease, then Landlord may at Landlord’s option,
without any obligation to do so, and with prior notice to Tenant, perform any
such term, provision, covenant, or condition, or make any such payment and
Landlord by reason of so doing shall not be liable or responsible for any loss
or damage thereby sustained by Tenant or anyone holding under or through Tenant
or any of Tenant’s Agents.

 

(b)       Without limiting the rights of Landlord under Paragraph 25(a) above,
Landlord shall have the right at Landlord’s option, without any obligation to do
so, to perform any of Tenant’s covenants or obligations under this Lease without
notice to Tenant in the case of an emergency, as determined by Landlord in its
reasonable judgment, or, after ten (10) days notice, if Landlord otherwise
determines in its reasonable discretion that such performance is necessary or
desirable for the proper management and operation of the Premises.

 

(c)       If Landlord performs any of Tenant’s obligations hereunder in
accordance with this Paragraph 25, the full amount of the cost and expense
incurred or the payment so made or the amount of the loss so sustained shall
immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to
Landlord upon demand, as Additional Rent, the full amount thereof.

 

26.                               ATTORNEY’S FEES

 

(a)       If either party hereto fails to perform any of its obligations under
this Lease or if any dispute arises between the parties hereto concerning the
meaning or interpretation of any provision of this Lease, then the defaulting
party or the party not prevailing in such dispute, as the case may be, shall pay
any and all costs and expenses incurred by the other party on account of such
default and/or in enforcing or establishing its rights hereunder, including,
without limitation, court costs and reasonable attorneys’ fees and
disbursements.  Any such attorneys’ fees and other expenses incurred by either
party in enforcing a judgment in its favor under this Lease shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys’ fees obligation is intended to be severable from the other
provisions of this Lease and to survive and not be merged into any such
judgment.

 

(b)           Without limiting the generality of Paragraph 26(a) above, if
Landlord utilizes the services of an attorney for the purpose of collecting any
Rent due and unpaid by Tenant or in connection with any other breach of this
Lease by Tenant, Tenant agrees to pay Landlord actual attorneys’ fees as
determined by Landlord for such services, regardless of the fact that no legal
action may be commenced or filed by Landlord.

 

27.                               TAXES

 

So long as Tenant is the sole tenant of the Building, Landlord shall arrange for
the tax bills relating to Taxes to be directed to Tenant and Tenant shall be
liable for and shall pay directly to the taxing authority, prior to delinquency,
all Taxes (including, without limitation any taxes levied against Tenant’s
Property).  In the event Tenant ceases to be the sole Tenant of the Building,
(i)

 

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Landlord shall pay the Taxes, subject to reimbursement pursuant to Paragraph 4
above, (ii) Tenant shall be liable for and shall pay directly to the taxing
authority, prior to delinquency, all taxes levied against Tenant’s Property, and
(iii) if any Alteration installed by Tenant pursuant to Paragraph 11 or any of
Tenant’s Property is assessed and taxed with the Premises or Building, Tenant
shall pay such taxes to Landlord within fifteen (15) business days prior to
delinquency.

 

28.                               EFFECT OF CONVEYANCE

 

The term “Landlord” as used in this Lease means, from time to time, the then
current owner of the Premises so that, in the event of any sale of the Premises
and an assumption of Landlord’s obligations under this Lease by the transferee
arising after such transfer, Landlord shall be and hereby is entirely freed and
relieved of all covenants and obligations of Landlord hereunder, and it shall be
deemed and construed, without further agreement between the parties and the
purchaser at any such sale, that the purchaser of the Premises has assumed and
agreed to carry out any and all covenants and obligations of Landlord hereunder.

 

29.                               TENANT’S ESTOPPEL CERTIFICATE

 

From time to time, upon written request of Landlord, Tenant shall execute,
acknowledge and deliver to Landlord or its designee, a statement certifying,
among other things: (i) that this Lease is unmodified and is in full force and
effect (or if there have been modifications, stating the modifications,
including any amendments to the Lease; (ii) the dates to which Rent has been
paid; (iii) whether or not Landlord or Tenant is in violation of any of its
obligations under this Lease and, if so, specifying the nature of each such
violation; (iv) whether or not any event has occurred which, with the giving of
notice, the passage of time, or both, would constitute such a violation by
Landlord or Tenant and, if so, specifying the nature of each such event, and
(v) such other information concerning this Lease as Landlord may reasonably
request (the “Estoppel Certificate”).  Any such Estoppel Certificate delivered
pursuant to this Paragraph 29 may be relied upon by a prospective purchaser of
Landlord’s interest or a mortgagee of Landlord’s interest or assignment of any
mortgage upon Landlord’s interest in the Premises.  If Tenant shall fail to
provide such certificate within ten (10) days of receipt by Tenant of a written
request by Landlord as herein provided, such failure shall, at Landlord’s
election, constitute a Default under this Lease, and Tenant shall be deemed to
have given such certificate as above provided without modification and shall be
deemed to have admitted the accuracy of any information supplied by Landlord to
a prospective purchaser or mortgagee.

 

30.                               SUBORDINATION

 

Conditioned upon Tenant’s receipt of an SNDA (defined below), this Lease, and
all rights of Tenant hereunder, are and shall be subject and subordinate to all
ground leases, overriding leases and underlying leases affecting the Building or
the Premises now or hereafter existing and each of the terms, covenants and
conditions thereto (the “Superior Lease(s)”), and to all mortgages which may now
or hereafter affect the Building, the Property or any of such leases and each of
the terms, covenants and conditions thereto (the “Superior Mortgage(s)”),
whether or not such mortgages shall also cover other lands, buildings or leases,
to each and every advance made or hereafter to be made under such mortgages, and
to all renewals, modifications, replacements and extensions of such leases and
such mortgages and spreaders and consolidations of such mortgages.  Conditioned
upon Tenant’s receipt of an SNDA, Tenant shall execute, acknowledge and deliver
to Landlord within ten (10) days after Landlord’s request therefor, any

 

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reasonable instrument that Landlord, the lessor under any such lease or the
holder of any such mortgage or any of their respective successors in interest
may reasonably request to evidence such subordination.  As used herein the
lessor of a Superior Lease or its successor in interest is herein called
“Superior Lessor”; and the holder of a Superior Mortgage is herein called
“Superior Mortgagee”.  Landlord shall, prior to the Commencement Date, deliver
to Tenant a subordination, non-disturbance and attornment agreement (“SNDA”)
executed by the holder of any Superior Mortgage existing as of the Lease Date,
which SNDA shall be in substantially the form attached hereto as Exhibit F or in
such holder’s customary commercially reasonable form and shall be executed,
acknowledged and delivered by Tenant to Landlord within ten (10) days after
receipt by Tenant.

 

Notwithstanding the foregoing terms of this Paragraph 30, if a Superior Lease or
Superior Mortgage is hereafter placed against or affecting any or all of the
Premises, Landlord shall obtain an SNDA from the holder thereof in recordable
form, which SNDA shall be in substantially the form attached hereto as Exhibit F
or in such holder’s customary form, whereby the holder of such Superior Lease or
Superior Mortgage agrees that the Tenant, upon paying the Base Rent and all of
the Additional Rent and other charges herein provided for, and observing and
complying with the covenants, agreements and conditions of this Lease on its
part to be observed and complied with, shall lawfully and quietly hold, occupy
and enjoy the Premises during the Term of this Lease, without hindrance or
interference from anyone claiming by or through said Superior Mortgagee or
Superior Lessor and that said Superior Mortgagee or Superior Lessor shall
respect Tenant’s rights under the Lease and, upon succeeding to Landlord’s
interest in the Buildings and Lease, shall observe and comply with all of
Landlord’s duties under the Lease.

 

If any Superior Lessor or Superior Mortgagee shall succeed to the rights of
Landlord under this Lease, whether through possession or foreclosure action or
delivery of a new lease or deed (such party so succeeding to Landlord’s rights
herein called “Successor Landlord”), then Tenant shall attorn to and recognize
such Successor Landlord as Tenant’s landlord under this Lease (without the need
for further agreement) and shall promptly execute and deliver any reasonable
instrument that such Successor Landlord may reasonably request to evidence such
attornment.  This Lease shall continue in full force and effect as a direct
lease between the Successor Landlord and Tenant upon all of the terms,
conditions and covenants as are set forth in this Lease, except that the
Successor Landlord shall not (a) be liable for any previous act or omission of
Landlord under this Lease, except to the extent such act or omission shall
constitute a continuing Landlord default hereunder; (b) be subject to any
offset, not expressly provided for in this Lease; or (c) be bound by any
previous modification of this Lease or by any previous prepayment of more than
one month’s Base Rent, unless such modification or prepayment shall have been
expressly approved in writing by the Successor Landlord (or predecessor in
interest).

 

31.                               ENVIRONMENTAL COVENANTS

 

(a)       As used in this Lease, the term “Hazardous Materials” shall mean and
include any substance that is or contains petroleum, asbestos, polychlorinated
biphenyls, lead, or any other substance, material or waste which is now or is
hereafter classified or considered to be hazardous or toxic under any federal,
state or local law, rule, regulation or ordinance relating to pollution or the
protection or regulation of human health, natural resources or the environment
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601, et. seq., or
the Hazardous

 

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Materials Transportation Act, 49 U.S.C. Section 1801, et. seq. or the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et. seq., the California
Hazardous Waste Control Law (California Health and Safety Code Sections
25100-25600), the Porter-Cologne Water Quality Control Act (California Health
and Safety Code Section 13000 et seq.), and the Safe Drinking Water and Toxic
Enforcement Act (California Health and Safety Code Section 25249.5 et seq.)
(collectively “Environmental Laws”) or poses or threatens to pose a hazard to
the health or safety of persons on the Premises or any adjacent property.

 

(b)       Tenant agrees that during its use and occupancy of the Premises it
will not permit Hazardous Materials to be present on or about the Premises
except for cleaning supplies and other business supplies customarily used and
stored in an office and that it will comply with all Environmental Laws relating
to the use, storage or disposal of any such Hazardous Materials by Tenant and/or
Tenant’s Agents.

 

(c)       If Tenant’s use of Hazardous Materials on or about the Premises
results in a release, discharge or disposal of Hazardous Materials on, in, at,
under, or emanating from, the Premises or the property in which the Premises are
located, Tenant agrees to investigate, clean up, remove or remediate such
Hazardous Materials in full compliance with (a) the requirements of (i) all
Environmental Laws and (ii) any governmental agency or authority responsible for
the enforcement of any Environmental Laws; and (b) any additional requirements
of Landlord that are necessary, in Landlord’s sole discretion, to protect the
value of the Premises or the property in which the Premises are located. 
Landlord shall also have the right, but not the obligation, to take whatever
action with respect to any such Hazardous Materials used by Tenant and/or
Tenant’s Agents that it deems necessary, in Landlord’s sole discretion, to
protect the value of the Premises or the property in which the Premises are
located.  All reasonable costs and expenses paid or incurred by Landlord in the
exercise of such right shall be payable by Tenant upon demand.

 

(d)       Upon reasonable notice to Tenant, Landlord may inspect the Premises
for the purpose of determining whether there exists on the Premises any
Hazardous Materials or other condition or activity that is in violation of the
requirements of this Lease or of any Environmental Laws.  The right granted to
Landlord herein to perform inspections shall not create a duty on Landlord’s
part to inspect the Premises, or liability on the part of Landlord for Tenant’s
use, storage or disposal of Hazardous Materials, it being understood that Tenant
shall be solely responsible for all liability in connection therewith.

 

(e)       Tenant shall surrender the Premises to Landlord upon the expiration or
earlier termination of this Lease free of debris, waste or Hazardous Materials
placed on or about the Premises by Tenant or its agents, employees, contractors
or invitees, and in a condition which complies with all Environmental Laws.

 

(f)        Tenant agrees to indemnify and hold harmless Landlord from and
against any and all claims, damages, fines, judgments, penalties, costs, losses
(including, without limitation, loss in value of the Premises or the property in
which the Premises is located, damages due to loss or restriction of rentable or
usable space, or any damages due to any adverse impact on marketing of the space
and any and all sums paid for settlement of claims), liabilities and expenses
(including, without limitation, attorneys’ fees, consultant and expert fees)
sustained by Landlord during or after the term of this Lease and attributable to
(i) any Hazardous Materials

 

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placed on or about the Premises by Tenant or Tenant’s agents, employees,
contractors or invitees, or (ii) Tenant’s breach of any provision of this
Paragraph 31.  This indemnification includes, without limitation, any and all
costs incurred due to any investigation of the site or any cleanup, removal or
restoration mandated by a federal, state or local agency or political
subdivision.

 

(g)       Landlord agrees to indemnify and hold harmless Tenant from and against
any and all claims, damages, fines, judgments, penalties, costs, losses
(including, without limitation, any and all sums paid for settlement of claims),
liabilities and expenses (including, without limitation, attorneys’ fees,
consultant and expert fees) sustained by Tenant during or after the Term of this
Lease and attributable to any Hazardous Materials placed on or about the
Premises by Landlord or Landlord’s agents, employees, contractors or invitees
during the Term of this Lease.

 

(h)       Tenant acknowledges that Landlord has disclosed to Tenant the
existence of Hazardous Materials at the Premises, all as more particularly
described in the materials previously delivered by Landlord to Tenant (the
“Environmental Disclosures”) and Landlord shall have no liability to Tenant or
Tenant’s Agents with respect to any claims, damages, losses or liabilities
arising as a result of the matters identified in the Environmental Disclosures,
other than as set forth in Paragraph 31(g) above.

 

(i)        The provisions of this Paragraph 31 shall survive the expiration or
earlier termination of this Lease.

 

32.                               NOTICES

 

All notices and demands which are required or may be permitted to be given to
either party by the other hereunder shall be in writing and shall be sent by
United States mail, postage prepaid, certified, or by personal delivery or
nationally recognized overnight courier, addressed to the addressee at Tenant’s
Address or Landlord’s Address as specified in the Basic Lease Information, or to
such other place as either party may from time to time designate in a notice to
the other party given as provided herein.  Copies of all notices and demands
given to Landlord shall additionally be sent to Landlord’s property manager at
the address specified in the Basic Lease Information or at such other address as
Landlord may specify in writing from time to time.  Notice shall be deemed given
upon actual receipt (or attempted delivery if delivery is refused), if
personally delivered, or one (1) business day following deposit with a reputable
overnight courier that provides a receipt, or on the third (3rd) day following
deposit in the United States mail in the manner described above.

 

33.                               WAIVER

 

The waiver of any breach of any term, covenant or condition of this Lease shall
not be deemed to be a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition herein
contained.  The subsequent acceptance of Rent by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant, other than the failure of Tenant
to pay the particular rental so accepted, regardless of Landlord’s knowledge of
such preceding breach at the time of acceptance of such Rent.  No delay or
omission in the exercise of any right or remedy of Landlord in regard to any
Default by Tenant shall impair such a right or remedy or be construed as a
waiver.  Any waiver by Landlord of any Default must be in writing

 

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and shall not be a waiver of any other Default concerning the same or any other
provisions of this Lease.

 

34.                               HOLDING OVER

 

Subject to the terms of Paragraph 51(c) below, any holding over after the
expiration of the Term, without the express written consent of Landlord, shall
constitute a Default and, without limiting Landlord’s remedies provided in this
Lease, such holding over shall be construed to be a tenancy at sufferance, at a
rental rate equal to one hundred fifty percent (150%) of the Base Rent last due
in this Lease, plus Additional Rent, and shall otherwise be on the terms and
conditions herein specified, so far as applicable; provided, however, in no
event shall any renewal or expansion option, option to purchase, or other
similar right or option contained in this Lease be deemed applicable to any such
tenancy at sufferance.  If the Premises are not surrendered at the end of the
Term or sooner termination of this Lease, and in accordance with the provisions
of Paragraphs 1 and 31(g), Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all loss or liability resulting from delay by
Tenant in so surrendering the Premises including, without limitation, any loss
or liability resulting from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses
to Landlord due to lost opportunities to lease any portion of the Premises to
any such succeeding tenant or prospective tenant, together with, in each case,
actual attorneys’ fees and costs.

 

35.                               SUCCESSORS AND ASSIGNS

 

The terms, covenants and conditions of this Lease shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto.  If Tenant shall
consist of more than one entity or person, the obligations of Tenant under this
Lease shall be joint and several.

 

36.                               TIME

 

Time is of the essence of this Lease and each and every term, condition and
provision herein.

 

37.                               BROKERS

 

Landlord and Tenant each represents and warrants to the other that neither it
nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate broker except the Brokers specified in the Basic Lease Information
in the negotiating or making of this Lease, and each party agrees to indemnify
and hold harmless the other from any claim or claims, and costs and expenses,
including attorneys’ fees, incurred by the indemnified party in conjunction with
any such claim or claims of any other broker or brokers to a commission in
connection with this Lease as a result of the actions of the indemnifying
party.  Landlord shall be responsible for the payment of the Brokers’ commission
pursuant to a separate written agreement, which shall provide that fifty percent
(50%) of such commissions shall be due upon execution of this Lease and the
remaining fifty percent (50%) of such commissions shall be due on the
Commencement Date.

 

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38.                               LIMITATION OF LIABILITY

 

Tenant agrees that, in the event of any default or breach by Landlord under this
Lease or arising in connection herewith or with Landlord’s operation,
management, leasing, repair, renovation, alteration or any other matter relating
to the Premises Tenant’s remedies shall be limited solely and exclusively to an
amount which is equal to the lesser of (a) the interest in the Premises of the
then current Landlord, or (b) the equity interest Landlord would have in the
Building if the Building were encumbered by third party debt in an amount equal
to eighty percent (80%) of the value of the Building (as such value is
determined by Landlord).  For purposes of this Lease, “Landlord Parties” shall
mean, collectively Landlord, its partners, shareholders, officers, directors,
employees, investment advisors, or any successor in interest of any of them. 
Neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant.  The limitations of liability contained in this Paragraph 38 shall
inure to the benefit of Landlord’s and the Landlord Parties’ present and future
partners, beneficiaries, officers, directors, trustees, shareholders, agents and
employees, and their respective partners, heirs, successors and assigns.  Under
no circumstances shall any present or future partner of Landlord (if Landlord is
a partnership), future member in Landlord (if Landlord is a limited liability
company) or trustee or beneficiary (if Landlord or any partner or member of
Landlord is a trust), have any liability for the performance of Landlord’s
obligations under this Lease.  Notwithstanding any contrary provision herein,
neither Landlord nor the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with Tenant’s business,
including but not limited to, loss or profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use, in each case,
however occurring.  The provisions of this Paragraph 38 shall apply only to the
Landlord and the parties herein described, and shall not be for the benefit of
any insurer nor any other third party.

 

39.                               FINANCIAL STATEMENTS

 

Within ten (10) days after Landlord’s request, Tenant shall deliver to Landlord
the then current audited financial statements of Tenant (including interim
periods following the end of the last fiscal year for which annual statements
are available), prepared or compiled by a certified public accountant, including
a balance sheet and profit and loss statement for the most recent prior year,
all prepared in accordance with generally accepted accounting principles
consistently applied; provided, however, that Tenant shall have no obligation to
provide theses materials so long as it remains a publicly traded company.

 

40.                               MORTGAGEE PROTECTION

 

(a)       Modifications for Lender.  If, in connection with obtaining financing
for the Premises or any portion thereof, Landlord’s lender shall request
reasonable modifications to this Lease as a condition to such financing, Tenant
shall not unreasonably withhold, delay or defer its consent to such
modifications, provided such modifications do not materially adversely affect
Tenant’s rights or increase Tenant’s obligations under this Lease.

 

(b)       Rights to Cure.  Tenant agrees to give to any trust deed or mortgage
holder (“Holder”), by a method provided for in Paragraph 32 above, at the same
time as it is given to Landlord, a copy of any notice of default given to
Landlord, provided that prior to such notice Tenant has been notified, in
writing, (by way of notice of assignment of rents and

 

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leases, or otherwise) of the address of such Holder.  Tenant further agrees that
if Landlord shall have failed to cure such default within the time provided for
in this Lease, then the Holder shall have an additional reasonable period within
which to cure such default, or if such default cannot be cured without Holder
pursuing its remedies against Landlord, then such additional time as may be
necessary to commence and complete a foreclosure proceeding, provided Holder
commences and thereafter diligently pursues the remedies necessary to cure such
default (including but not limited to commencement of foreclosure proceedings,
if necessary to effect such cure), in which event this Lease shall not be
terminated.

 

41.                               ENTIRE AGREEMENT

 

This Lease, including the Exhibits and any Addenda attached hereto, which are
hereby incorporated herein by this reference, contains the entire agreement of
the parties hereto, and no representations, inducements, promises or agreements,
oral or otherwise, between the parties, not embodied herein or therein, shall be
of any force and effect.  If there is more than one Tenant, the obligations
hereunder imposed shall be joint and several.

 

42.                               INTEREST

 

Any installment of Rent and any other sum due from Tenant under this Lease which
is not received by Landlord within three (3) days from when the same is due
shall bear interest from the date such payment was originally due under this
Lease until paid at the lesser of (a) an annual rate equal to the maximum rate
of interest permitted by law, or (b) prime rate of interest, as stated from time
to time in the Wall Street Journal, plus three percent (3%) per annum.  Payment
of such interest shall not excuse or cure any Default by Tenant.  In addition,
Tenant shall pay all costs and attorneys’ fees incurred by Landlord in
collection of such amounts.

 

43.                               GOVERNING LAW; CONSTRUCTION

 

This Lease shall be construed and interpreted in accordance with the laws of
state in which the Premises is located.  The parties acknowledge and agree that
no rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall be employed in the interpretation of this
Lease, including the Exhibits and any Addenda attached hereto.  All captions in
this Lease are for reference only and shall not be used in the interpretation of
this Lease.  Whenever required by the context of this Lease, the singular shall
include the plural, the masculine shall include the feminine, and vice versa. 
If any provision of this Lease shall be determined to be illegal or
unenforceable, such determination shall not affect any other provision of this
Lease and all such other provisions shall remain in full force and effect.

 

44.                               REPRESENTATIONS AND WARRANTIES OF TENANT

 

Tenant hereby makes the following representations and warranties, each of which
is material and being relied upon by Landlord, is true in all respects as of the
date of this Lease, and shall survive the expiration or termination of the
Lease.

 

(a)       If Tenant is an entity, Tenant is duly organized, validly existing and
in good standing under the laws of the state of its organization, and is
qualified to do business in the state in which the Premises is located, and the
persons executing this Lease on behalf of Tenant have the full right and
authority to execute this Lease on behalf of Tenant and

 

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to bind Tenant without the consent or approval of any other person or entity. 
Tenant has full power, capacity, authority and legal right to execute and
deliver this Lease and to perform all of its obligations hereunder.  This Lease
is a legal, valid and binding obligation of Tenant, enforceable in accordance
with its terms.

 

(b)       Tenant has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the filing
of an involuntary petition by any creditors, (3) suffered the appointment of a
receiver to take possession of all or substantially all of its assets,
(4) suffered the attachment or other judicial seizure of all or substantially
all of its assets, (5) admitted in writing its inability to pay its debts as
they come due, or (6) made an offer of settlement, extension or composition to
its creditors generally.

 

45.                               NAME OF BUILDING

 

In the event Landlord chooses to change the name of the Building or address of
the Premises, Tenant agrees that such change shall not affect in any way its
obligations under this Lease, and that, except for the name or address change,
all terms and conditions of this Lease shall remain in full force and effect. 
Tenant agrees further that such name or address change shall not require a
formal amendment to this Lease, but shall be effective upon Tenant’s receipt of
written notification from Landlord of said change.

 

46.                               SECURITY

 

Tenant acknowledges and agrees that Landlord is not providing any security
services with respect to the Premises and that Landlord shall not be liable to
Tenant for, and Tenant waives any claim against Landlord with respect to, any
loss by theft or any other damage suffered or incurred by Tenant in connection
with any unauthorized entry into the Premises or any other breach of security
with respect to the Premises.

 

47.                               JURY TRIAL WAIVER

 

Tenant hereby waives any right to trial by jury with respect to any action or
proceeding (i) brought by Landlord, Tenant or any other party, relating to
(A) this Lease and/or any understandings or prior dealings between the parties
hereto, or (B) the Premises or any part thereof, or (ii) to which Landlord is a
party.  Tenant hereby agrees that this Lease constitutes a written consent to
waiver of trial by jury pursuant to the provisions of California Code of Civil
Procedure Section 63 1, and Tenant does hereby constitute and appoint Landlord
its true and lawful attorney-in-fact, which appointment is coupled with an
interest, and Tenant does hereby authorize and empower Landlord, in the name,
place and stead of Tenant, to file this Lease with the clerk or judge of any
court of competent jurisdiction as a statutory written consent to waiver of
trial by jury.

 

48.                               RECORDATION

 

Neither this Lease, nor any memorandum, affidavit or other writing with respect
thereto, shall be recorded in the public land records by Tenant or by any one
acting through, under or on behalf of Tenant, and the recording thereof in
violation of this provision shall make this Lease null and void at Landlord’s
election.

 

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49.                               FORCE MAJEURE

 

Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts
of God, inability to obtain services, labor, or materials or reasonable
substitutes therefor, governmental actions, civil commotions, fire or other
casualty, and other causes beyond the reasonable control of the party obligated
to perform, except with respect to the obligations imposed with regard to Rent
and other charges to be paid by Tenant pursuant to this Lease (collectively, the
“Force Majeure”), notwithstanding anything to the contrary contained in this
Lease, shall excuse the performance of such party for a period equal to any such
prevention, delay or stoppage and therefore, if this Lease specifies a time
period for performance of an obligation of either party, that time period shall
be extended by the period of any delay in such party’s performance cause by a
Force Majeure.

 

50.                               ACCEPTANCE

 

This Lease shall only become effective and binding upon full execution hereof by
Landlord and delivery of a signed copy to Tenant.

 

51.                               RENEWAL OPTION

 

(a)       Exercise of Options.  Provided Tenant is not in Default, Tenant shall
have two (2) consecutive options (each, the “Option”) to renew this Lease for an
additional five (5) year period under each Option (the “Option Period”) for the
period commencing on the date following the Expiration Date, upon the terms and
conditions contained in this Lease except as provided in this Paragraph 51.  To
exercise the Option, Tenant shall give Landlord notice (the “Extension Notice”)
of the intent to exercise said Option not less than twelve (12) months nor more
than eighteen (18) months prior to the date on which the Option Period which is
the subject of the notice will commence.  The notice shall be given as provided
in Paragraph 32 hereof.

 

(b)       Determination of Base Rent.

 

(i)            The Base Rent for the first year of the applicable Option Period
shall be ninety-five percent (95%) of the greater of (i) the Base Rent being
paid by Tenant at the end of the then existing expiring term of this Lease; or
(ii) the fair market value of the Premises as of the commencement date of the
applicable Option Period, as determined in subsection (ii) and (iii) below.  The
Lease will be amended to state the Base Rent, as determined in this Paragraph
51.

 

(ii)           Landlord and Tenant will have twenty-one (21) days after Landlord
receives the Extension Notice within which to agree on the fair market rental
value of the Premises (including annual increases, if any) as of the
commencement date of the applicable Option Period. As used in this Lease, the
“fair market rental value of the Premises” means what a landlord under no
compulsion to lease the Premises, and a tenant under no compulsion to lease the
Premises, would determine as Base Rent (including initial monthly rent and
rental increases) for the Option Period, as of the commencement of the Option
Period, taking into consideration the uses permitted under this Lease, the
quality, size, design and location of the Premises, and the rent for comparable
buildings located in the vicinity of the Premises; and

 

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(iii)          If Landlord and Tenant have not agreed on the fair market value
of the Premises within the twenty-one (21) day period set forth in subparagraph
(ii) above, then within fifteen (15) days after the expiration of such
twenty-one (21) day period, Landlord and Tenant shall exchange their written
opinions of the fair market value, including annual increases, if any (each a
“Party’s Opinion of FMV” and collectively the “Parties’ Opinions of FMV”) and
shall each appoint one licensed real estate broker with at least ten (10) years
experience in the Mountain View, California office market, and the two brokers
so appointed shall jointly attempt to determine and agree upon which of the two
Parties’ Opinions of FMV most closely approximates their own opinions, based on
documented evidence of comparable transactions in comparable buildings in the
City of Mountain View.  If they are unable to agree, then each broker shall,
together, select a licensed disinterested real estate broker, who shall make the
determination of the then fair market rental value, after reviewing the Parties’
Opinions of FMV and the reports of the two brokers appointed by the parties, and
after doing such independent research as he/she deems appropriate. The
jointly-selected broker shall choose between the Parties’ Opinions of FMV, and
the one chosen shall be the then fair market rental value of the Premises.

 

(c)       Alternative Holdover Rent.  If Tenant elects not to exercise the first
Option per the terms set forth in Paragraph 51(a) above, then Tenant may elect
to holdover for a period of up to ninety (90) days (the “Alternative Holdover
Period”) at the prorated daily rate of 125% the Base Rent (the “Holdover
Option”) being paid by Tenant at the end of the initial Term.  To exercise the
Holdover Option, Tenant shall give Landlord notice (the “Holdover Notice”) of
the intent to exercise said Holdover Option not less than six (6) months nor
more than twelve (12) months prior to the date on which the Term is scheduled to
expire.  The notice shall be given as provided in Paragraph 32 hereof.  If the
Tenant delivers the Holdover Notice in accordance with the terms hereof, the
Term of this Lease shall be extended for the Alternative Holdover Period and all
terms, covenants and conditions of this Lease shall remain unmodified and in
full force and effect, except that (i) the Base Rent shall be modified in
accordance with the provisions of this Paragraph 51(c), and (ii) Tenant shall
have no other options to extend the Term.  Notwithstanding anything to the
contrary contains in this Paragraph 51(c), Tenant’s Holdover Option shall be
null and void if (i) Tenant fails to duly execute and deliver a stipulated
judgment to Landlord in a form acceptable to Landlord, in its sole and absolute
discretion, within five (5) business days after Tenant’s receipt of such
stipulated judgment from Landlord, or (ii) a Default has occurred and is
continuing as of date Tenant delivers the Holdover Notice or at any time
thereafter.

 

52.                               COUNTERPARTS; ELECTRONIC SIGNATURES

 

This Lease may be signed in counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same instrument.  The
parties contemplate that they may be executing counterparts of this Lease
transmitted by facsimile or email in PDF format and agree and intend that a
signature by either facsimile machine or email in PDF format shall bind the
party so signing with the same effect as though the signature were an original
signature.

 

[signatures appear on the following page]

 

42

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have entered into this Lease as of the
date first set forth above.

 

LANDLORD:

 

MIDDLEFIELD STATION ASSOCIATES, LLC,

 

a Delaware limited liability company

 

 

 

By:

/s/ Bruce Burkard

 

 

 

 

Print Name: Bruce Burkard

 

 

 

Its: Authorized Signatory

 

 

TENANT:

 

OMNICELL, INC.

 

a Delaware corporation

 

 

 

By:

/s/ Robin Seim

 

 

 

 

Print Name:

Rob Seim

 

 

 

 

Its:

CFO

 

 

 

 

By:

/s/ R. A. Lipps

 

 

 

 

Print Name:

Randall Lipps

 

 

 

 

Its:

CEO

 

43

--------------------------------------------------------------------------------

 

EXHIBIT A

DESCRIPTION OF THE LAND

 

All that certain real property situate in the City of Mountain View. County of
Santa Clara, State of California, being all of Lot 2 and portion of Lot 1 as
shown on that certain Parcel Map filed for record on August 6, 1987 in Book 576
of Maps at Page 52-53 Santa Clara County Records, being more particularly
described as follows:

 

LOT I

 

Beginning at the most westerly corner of said Lot 2, said corner also being the
intersection of the easterly line of Middlefield as shown on said map;

 

Thence North 16°18’00” East, 376.14 feet along the northeasterly line of said
Lot 2 and Lot I to a point being South 16°18’00” West 69.00 feet from the
northeasterly corner of said Lot I;

 

Thence leaving said northeasterly line the following four (4) courses and
distances:

 

1.                                       South 73°42’00” East, 85.61 feet;

2.                                       North 16°18’00” East, 34.00 feet;

3.                                       North 61°18’51” East, 28.28 feet;

4.                                       South 73°42’00” East, 204.39 feet to
the easterly line of said Lot I, said line also being the westerly line of Logue
Avenue;

 

Thence along the easterly and southerly lines of said Lot I and Lot 2 the
following five (5) courses and distances:

 

1.                                       South 16°18’00” West, 446.18 feet;

2.                                       Along a curve to the right having a
radius of 220.00 feet, through a central angle of 35°29’20” for an arc distance
of 136.27 feet;

3.                                       Along a curve to the right having a
radius of 30.00 feet, through a central angle of 89°58’24” for an arc distance
of 47.11 feet;

4.                                       North 38° 14’ 16” West, 105.27 feet;

5.                                       Along a curve to the left having a
radius of 1550.00 feet, through a central angle of 6°l 1’52” for an arc distance
of 167.67 feet to the Point of Beginning.

 

A-1

--------------------------------------------------------------------------------

 

EXHIBIT B

 

BASE RENT SCHEDULE

 

 

 

Monthly Rent*

 

Price/SF

 

Escalation (%)

 

 

 

 

 

 

 

 

 

Yr. 1

 

$

278,665

 

$

2.79 NNN

 

Base

 

Yr. 2

 

$

287,025

 

~$

2.87 NNN

 

3

%

Yr. 3

 

$

295,636

 

~$

2.96 NNN

 

3

%

Yr. 4

 

$

304,505

 

~$

3.05 NNN

 

3

%

Yr. 5

 

$

313,640

 

~$

3.14 NNN

 

3

%

Yr. 6

 

$

323,049

 

~$

3.23 NNN

 

3

%

Yr. 7

 

$

332,741

 

~$

3.33 NNN

 

3

%

Yr. 8

 

$

342,723

 

~$

3.43 NNN

 

3

%

Yr. 9

 

$

353,005

 

~$

3.53 NNN

 

3

%

Yr. 10

 

$

363,595

 

~$

3.64 NNN

 

3

%

 

--------------------------------------------------------------------------------

*Subject to re-calculation upon measurement of the Premises following
Substantial Completion of the Landlord Improvements using the 1996 BOMA Standard
Method of Measuring Floor Area in Office Buildings for single tenant occupancy.

 

B-1

--------------------------------------------------------------------------------

 

EXHIBIT C

 

COMMENCEMENT AND EXPIRATION DATE MEMORANDUM

 

 

LANDLORD:

 

 

 

 

 

TENANT:

 

 

 

 

 

LEASE DATE:

 

, 20

 

 

 

 

 

PREMISES:

Located at

 

 

The Commencement Date of the Lease is hereby established as
                        , 20       and the Expiration Date is
                                  ,         .

 

 

TENANT:

 

 

a

 

 

 

 

 

 

 

 

By:

 

 

Print Name:

 

 

Its:

 

 

 

 

 

 

 

 

Approved and Agreed:

 

LANDLORD:

 

 

 

,

a

 

By:

 

 

Print Name:

 

 

Its:

 

 

 

C-1

--------------------------------------------------------------------------------

 

EXHIBIT D

 

SITE PLAN

 

[SEE ATTACHED PAGE]

 

D-1

--------------------------------------------------------------------------------

 

[g317403kk11i001.gif]

 

D-2

--------------------------------------------------------------------------------

 

EXHIBIT E

 

CONSTRUCTION AGREEMENT

 

[SEE ATTACHED EXHIBITS E-1, E-2 AND E-3]

 

--------------------------------------------------------------------------------

 

EXHIBIT E-1

 

BASE BUILDING CONSTRUCTION AGREEMENT

 

This exhibit, entitled “Base Building Construction Agreement”, is and shall
constitute Exhibit E-1 to the Lease Agreement, dated as of the Lease Date, by
and between Landlord and Tenant.  The terms and conditions of this Exhibit E-1
are hereby incorporated into and are made a part of the Lease.

 

Subject to the terms and conditions set forth herein and in the Lease, Landlord
shall use commercially reasonable efforts to cause construction of the Base
Building Improvements in accordance with the procedures set forth below:

 

A.           Definitions

 

1. “Base Building Improvements” shall mean a three (3) story building,
comprising approximately 99,880 square feet of rentable area, along with all
related exterior site improvements, including utilities, landscaping and paved
parking, in substantial compliance with the Final Base Building Plans and
Specifications.

 

2.  “Base Building Plans and Specifications” shall mean the plans and
specifications set forth on the attached Schedule A.

 

3.  “Contractor” shall mean South Bay Construction and/or any additional or
replacement general contractor(s) selected by Landlord in Landlord’s reasonable
discretion; provided, that if such additional or replacement contractor is also
going to construct all or a portion of the Tenant Improvements (as defined on
Exhibit E-2), then such additional or replacement contractor shall be subject to
the prior approval of Tenant, which approval shall not be unreasonably withheld,
conditioned or delayed.  It is the intent of the parties that one (1) Contractor
be selected for both the Base Building Improvements and the Tenant Improvements.

 

4.  “Construction Warranties” is defined in Section D.2 below.

 

5.  “Final Base Building Plans and Specifications” is defined in Section B.6
below.

 

6.  “Landlord Modifications” is defined in Section B.1.

 

7.  “Landlord’s Base Building Architect” shall mean the ARC TEC, Inc., an
Arizona corporation, team led by Dan Kirby or any replacement architect selected
by Landlord in Landlord’s sole discretion.

 

8. “Landlord’s Representative” shall mean Dave Wilbur and Bruce Burkard or such
other representative as may be designated by Landlord in writing from time to
time.

 

9.  “Tenant Related Base Building Work Cost” is defined in Section B.4 below.

 

10. “Tenant Requested Base Building Modifications” shall mean those
modifications to the Base Building Improvements requested by Tenant, if any, in
accordance with this Exhibit E-1 that Tenant desires be incorporated into the
Final Base Building Plans and Specifications.

 

--------------------------------------------------------------------------------

 

11. “Tenant’s Representative” shall mean Kirk Thompson or such other
representative as may be designated by Tenant in writing from time to time.

 

12. “Working Drawings” is defined in Section B.5 below.

 

Capitalized terms not otherwise defined in this Exhibit E-1 shall have the
meanings ascribed to them in the Lease (including Exhibit E-2 to the Lease).

 

B.           Design and Approval of Base Building Improvements

 

1.  Base Building Drawings: Landlord’s Modifications.  Landlord’s Base Building
Architect has prepared the Base Building Plans and Specifications for
construction of the Base Building Improvements.  Tenant has reviewed and
approved the Base Building Plans and Specifications.  Notwithstanding the
foregoing, the Base Building Plans and Specifications are, from time to time,
subject to change in Landlord’s discretion (i) as may be required by any
governmental agency or as necessary to comply with any governmental
requirements, (ii) to address structural or unanticipated field conditions,
(iii) to facilitate orderly construction of the Project, or (iv) for any other
reasonable purpose consistent with the overall scope and content of the Base
Building Plans and Specifications so long as they will not materially adversely
affect Tenant’s use of the Premises (the changes described in clauses
(i)-(iv) being herein referred to as “Landlord Modifications”).  Landlord shall
provide Tenant with prompt notice of such changes but Landlord shall not be
required to obtain Tenant’s approval of any such changes unless such change will
result in a material adverse effect on Tenant’s use of the Premises.  If
Landlord and Tenant disagree on whether a particular change will result in a
material adverse effect on Tenant’s use of the Premises, either party can submit
the matter to mediation as provided in Section 6.7 of Exhibit E-2.

 

2.  Tenant Requested Base Building Modifications.  On or before October 10,
2011, Tenant shall have delivered to Landlord detailed written specifications
for any additional Tenant Requested Base Building Modifications.  All Tenant
Requested Base Building Modifications shall be subject to review and approval by
Landlord, which approval may be granted, granted with conditions, or withheld in
Landlord’s sole discretion, to ensure, among other things, that the Tenant
Requested Base Building Modifications are compatible with all other construction
and all electrical, mechanical, life safety, and other systems within the Base
Building Improvements, the long term value of the Base Building Improvements,
the construction schedule, and will not increase Landlord’s costs to construct
the Base Building Improvements.  As of the Lease Date, Landlord has approved
only those Tenant Requested Base Building Modifications shown on Schedule B,
attached hereto.

 

3.  Landlord’s Response Time.  Landlord shall review any timely delivered Tenant
Requested Base Building Modifications and shall provide Tenant with written
notice of its approval, disapproval or conditional approval of the Tenant’s
Requested Base Building Modifications within five (5) business days after
receipt.  Landlord’s failure to respond within such 5-business day period shall
be deemed Landlord’s disapproval.

 

4.  Tenant Related Base Building Work Cost.  If Landlord disapproves or
conditionally approves the Tenant Requested Base Building Modifications, then
Landlord shall meet with the Tenant’s Facilities Consultant (as defined in
Exhibit E-2) and Tenant to discuss the request, or shall submit to Tenant’s
Facilities Consultant and Tenant in writing, the reasons for Landlord’s
disapproval or conditional approval, together with either Landlord’s estimate or
quote of the

 

--------------------------------------------------------------------------------

 

additional amount that tenant will be required to pay, in accordance with
Section 6 below, in order for Landlord to implement the applicable Tenant
Requested Base Building Modification(s), which amount shall be inclusive of all
soft costs, hard costs and contingencies expected to be incurred in connection
with such Tenant Requested Base Building Modifications(s) (the “Tenant Related
Based Building Work Cost”).  Following such meeting or submission, Tenant may
withdraw the request, or may accept the conditional approval, and/or may cause
Tenant’s Facilities Consultant to revise the Tenant Requested Base Building
Modifications and submit same to Landlord for Landlord’s review and approval. 
If Tenant elects to revise and resubmit the Tenant Requested Base Building
Modifications, then the procedure set forth in this paragraph will be followed
as set forth above until Landlord has approved the revised Tenant Requested Base
Building Modifications and the Tenant has approved the Tenant Related Base
Building Work Cost or withdrawn the request; provided, that each day of delay in
completing the foregoing process after October 17, 2011 shall be a Tenant Delay.

 

5.  Working Drawings.  On or before October 14, 2011, Landlord shall cause the
Architect to prepare and submit to Tenant for approval the working drawings
based on the approved Base Building Plans and Specifications, in form sufficient
to submit for a building permit, incorporating all approved Tenant Requested
Base Building Modifications (the “Working Drawings”).  Tenant shall respond on
or before October 18, 2011 with Tenant’s approval or reasonable disapproval of
the Working Drawings (which disapproval shall specify the reasons for such
disapproval), and failure by Tenant to respond within such time period shall be
deemed approval.  If Tenant reasonably disapproves the Working Drawings, then
Landlord shall meet with the Tenant’s Facility Consultant (as defined in
Exhibit E-2) and Tenant to discuss the request and attempt to resolve the
issue.  If Landlord and Tenant cannot resolve the issue, then either party can
submit the matter to mediation as provided in Section 6.7 of Exhibit E-2.

 

6.  Final Base Building Plans and Specifications.  To the extent Landlord’s
approval of the Tenant Requested Base Building Modifications and Tenant’s
approval of the Tenant Related Base Building Work Cost, if any, has occurred,
Landlord shall cause Landlord’s Base Building Architect to revise the Base
Building Plans and Specifications to incorporate the Tenant Requested Base
Building Modifications which have been approved by both parties.  Architect’s
failure to produce the revised Base Building Plans and Specifications in a
timely manner shall not be a Tenant Delay.  The Base Building Plans and
Specifications, as modified to incorporate the approved Tenant Requested Base
Building Modifications, if any, and all Landlord Modifications, are herein
referred to as the “Final Base Building Plans and Specifications.”

 

7.  Payment of Tenant Related Base Building Work Cost.  The Tenant Related Base
Building Work Cost, if any, shall be the responsibility of Tenant and shall be
paid by Tenant directly to Landlord as provided in this Paragraph B.7.  Tenant
shall make progress payments of the estimated or quoted Tenant Related Base
Building Work Cost to Landlord as follows: 35% of the estimated or quoted Tenant
Related Base Building Work Cost upon the later of: (1) December 1, 2011 and (2)
Landlord’s and Tenant’s mutual approval of the Tenant Requested Base Building
Modifications; and the remaining 65% of the Tenant Related Base Building Work
Cost upon substantial completion of the scope covered in the applicable Tenant
Requested Base Building Modifications; provided, that if the Tenant Requested
Base Building Modifications are to be performed in phases which allow for phased
payments to be made by Landlord, then Tenant shall pay such 65% portion of the
progress payments to Landlord upon substantial completion of the applicable
phase of the Tenant Requested Base Building Modifications.  All such payments
from Tenant shall be due

 

--------------------------------------------------------------------------------

 

within ten (10) days after delivery of a written statement from Landlord to
Tenant specifying the amount then due.  Landlord shall be entitled to suspend or
terminate construction of the Base Building Improvements and to declare Tenant
in default in accordance with the terms of the Lease if payment by Tenant to
Landlord of Tenant Related Base Building Work Cost has not been received by
Landlord within three (3) business days following the expiration of the ten
(10) day period above (and any resulting delay shall be deemed to be a Tenant
Delay (as defined on Exhibit E-2)).  Upon or prior to Substantial Completion,
the parties shall cooperate to calculate the actual amount of the Tenant Related
Base Building Work Cost for those items which were not provided based on a
quoted fixed price.  If Tenant has underpaid, Tenant shall pay any additional
amount due within ten (10) days of notice of such determination.  If Tenant has
overpaid, Landlord shall reimburse such overpayment to Tenant within ten
(10) days of such determination.

 

C.           Construction

 

Landlord shall use commercially reasonable efforts to cause the Base Building
Improvements to be constructed by Contractor in accordance with the Final Base
Building Plans and Specifications, as the same may be amended or modified from
time to time in accordance with this Exhibit E-1, in good and workmanlike manner
and in compliance with all applicable laws.

 

D.           General

 

1.  If, for any reason other than Tenant Delays, Landlord cannot deliver
possession of the Premises to Tenant on the Estimated Commencement Date, or
perform any other covenant contained in this Exhibit E-1 or in the Lease related
to the work described in this Exhibit E-1, except as set forth in Paragraph
3(a) of the Lease, (a) the Lease shall not be void or voidable (except as
otherwise specifically provided in the Lease), (b) nor shall Landlord be liable
to Tenant for any loss or damage resulting therefrom, nor shall such failure
affect the obligations of Tenant under the Lease or this Exhibit E-1.

 

2.  Landlord shall use commercially reasonable efforts to obtain from
Contractor, and shall use commercially reasonable efforts to cause Contractor to
obtain from all subcontractors and material suppliers, warranties (collectively,
“Construction Warranties”) for all components of the Base Building Improvements
for which warranties are customarily provided in the construction industry and
Landlord shall enforce the Construction Warranties as requested by Tenant.

 

3.  Any decision made hereunder shall be deemed a decision by Landlord if made
by Landlord’s Representative.  Landlord’s Representative shall have full power
to act on behalf of Landlord under this Exhibit E-1 and under Exhibit E-2,
unless provided to the contrary herein, or Landlord shall have advised Tenant in
writing to the contrary.  Any decision made hereunder shall be deemed a decision
by Tenant if made by Tenant’s Representative.  Tenant’s Representative shall
have full power to act on behalf of Tenant under this Exhibit E-1 and under
Exhibit E-2, unless provided to the contrary herein, or Tenant shall have
advised Landlord in writing to the contrary.

 

4.  Any failure by Tenant to pay any amounts due under Exhibit E-2 or this
Exhibit E-1 which failure continues following five (5) business days notice from
Landlord to Tenant shall have the same effect under the Lease as a failure to
pay Rent. Any such failure, or failure by Tenant to perform any of its other
obligations under this Exhibit E-1, which failure continues following five
(5) business days notice from Landlord, shall constitute a Default under the
Lease, entitling Landlord to all of its remedies under the Lease, at law and in
equity.

 

--------------------------------------------------------------------------------

 

INITIALS:

 

 

TENANT:

RS

 

LANDLORD:

BB

 

 

--------------------------------------------------------------------------------

 

SCHEDULE A

 

of Exhibit E-1, the Base Building Construction Agreement

Base Building Plans and Specifications

 

Original Drawings Issued 08.08.11 Design Development

Revision Issued  08.29.11 Design Development Addendum No. 1 noted as *

 

--------------------------------------------------------------------------------

 

CIVIL

C1.0

COVER SHEET

C1.1 *

NOTES AND DETAILS

C2.0

GRADING AND PAVING PLAN

C3.0 *

UTILITY PLAN

C4.0

EROSION CONTROL PLAN

C5.0

STORMWATER CONTROL PLAN

C6.0

TOPOGRAPHIC SURVEY

C7.0 *

DEMOLITION PLAN

 

 

DRY SITE UTILITY

JT-1 *

JOINT TRENCH TITLE SHEET

JT-2 *

JOINT TRENCH INTENT DRAWING

 

 

LANDSCAPE

L-1.1 *

LANDSCAPE NOTES & LEGENDS

L-1.2

PLANTING NOTES AND LEGENDS

L-2.1

LANDSCAPE LAYOUT PLAN

L-3.1

FINE GRADING PLAN

L-4.1 *

PLANTING PLAN

L-5.2

IRRIGATION NOTES, LEGEND AND DETAILS

L-6.1

CONSTRUCTION DETAILS

L-6.2

CONSTRUCTION DETAILS

L-7.1

FOUNTAIN NOTES, LEGEND AND DETAILS

L-8.1

LANDSCAPE SPECIFICATIONS

L-8.2

LANDSCAPE SPECIFICATIONS

 

 

ARCHITECTURAL

A0.01 *

PROJECT DATA, GENERAL NOTES

 

AND INFORMATION

A0.02

BUILDING CODE REQUIREMENTS

A0.03

CALIFORNIA GREEN STANDARDS

 

NON-RESIDENTIAL CHECKLIST - BSC

A0.04 *

TITLE 24 REQUIREMENTS

A0.11 *

CODE AND OCCUPANT PLANS

A0.12 *

CODE AND OCCUPANT PLANS

A1.01 *

SITE PLAN

A1.02 *

SITE DETAILS

A2.11 *

FIRST FLOOR PLAN

A2.12 *

SECOND FLOOR PLAN

A2.13 *

THIRD FLOOR PLAN

A2.22

SECOND FLOOR REFLECTED CEILING PLAN

A2.31 *

ROOF PLAN

A3.01 *

EXTERIOR ELEVATIONS

A3.02

PARTIAL EXTERIOR ELEVATIONS

A4.01 *

BUILDING SECTIONS

A4.02 *

WALL SECTIONS

A4.03

WALL SECTIONS

A5.01

TOILET CORE NOTES AND DETAILS

A6.01

ELEVATOR SECTIONS AND DETAILS

A6.02

ENLARGED STAIR PLANS, SECTIONS & DETAILS

A8.11 *

PLAN DETAILS

A8.21 *

SECTION DETAILS

A8.23

ROOF DETAILS

A10.01

SPECIFICATIONS SHEET 1 OF 3

A10.02 *

SPECIFICATIONS SHEET 2 OF 3

A10.03

SPECIFICATIONS SHEET 3 OF 3

 

E-1

--------------------------------------------------------------------------------

 

STRUCTURED PARKING

AP2.11 *

STRUCTURED PARKING PLANS

AP3.01 *

STRUCTURED PARKING EXTERIOR ELEVATIONS AND DETAILS

AP4.01 *

BUILDING SECTIONS AND DETAILS

AP6.01 *

STAIR PLANS SECTIONS AND DETAILS

 

 

STRUCTURAL

S0.1 *

GENERAL NOTES, ABBREVIATIONS

 

AND SCHEDULES

S0.2 *

GENERAL NOTES

S1.0

FOUNDATION PLAN

S2.0 *

SECOND FLOOR FRAMING PLAN

S2.1 *

THIRD FLOOR FRAMING PLAN

S3.0 *

ROOF FRAMING PLAN

S4.0

COLUMN SCHEDULES

S4.1

FRAME ELEVATIONS

S5.0

FOUNDATION DETAILS

S5.1

FOUNDATION DETAILS

S6.0 *

FLOOR FRAMING DETAILS

S6.1 *

FLOOR FRAMING DETAILS

S7.0

ROOF FRAMING DETAILS

S7.1 *

ROOF FRAMING DETAILS

S8.0

MOMENT FRAME DETAILS

S8.1

BRACED FRAME DETAILS

S9.0 *

ENCLOSURE FOUNDATION PLAN AND DETAILS

 

 

STRUCTURED PARKING

S1.0P *

FIRST LEVEL FOUNDATION PLAN

S2.0P

SECOND LEVEL REINFORCING PLAN AND

 

SECOND LEVEL POST TENSIONING PLAN

S4.0P

COLUMN SCHEDULES

S4.1P *

SHEAR WALL ELEVATIONS AND SCHEDULE

S4.2P

SHEAR WALL ELEVATIONS

S4.3P *

POST TENSIONED CONCRETE BEAM

 

ELEVATIONS AND SCHEDULE

S4.4P

MILS STEEL CONCRETE BEAM SCHEDULE

S5.0P

FOUNDATION DETAILS

S6.0P

POST TENSIONED SLAB DETAILS

S6.1P

POST-TENSIONED SLAB DETAILS

S6.2P

POST TENSIONED SLAB DETAILS

 

E-2

--------------------------------------------------------------------------------

 

SCHEDULE B

 

Per Exhibit E-1, the Base Building Construction Agreement

Approved Tenant Requested Base Building Modifications

 

#1   Add one (1) pair 3’0”x10’0” store front doors at shipping& receiving room,
ground floor, and associated, sidewalk connection, and landscape alterations.

Tenant Cost:                                              None, Landlord Cost

Tenant Delay:                             None, if approved by October 18, 2011

Restoration:                                                      Not required

Other Conditions: Landlord to install as part of base building cost. No cost to
Tenant

 

#2   Increase size/strength of structural framing to support two (2) large
conference room folding divider door/walls.  .

Tenant Cost:                                   $2,970 — 35% up front = $1039.50

Tenant Delay:                             None, if approved by October 18, 2011

Restoration:                               Not required for framing members
only.

Other Conditions:                                                  None

 

#3   Add one (1) exterior exit store front door at large conference room ground
floor, and associated, sidewalk connection, and landscape alterations.

Tenant Cost:                                   $6,513 — 35% up front = $2279.55

Tenant Delay:                             None, if approved by October 18, 2011

Restoration:                 Required (restore to typical glazing system &
landscaping).

Other Conditions:                                                  None

 

#4   Add (1) below slab rough-in sanitary sewer plumbing line at ground floor,
in area designated for “future possible restroom area”.

Tenant Cost:                                    $1,547 — 35% up front = $541.45

Tenant Delay:                             None, if approved by October 18, 2011

Restoration:                        Required (cap below slab and repair slab
area).

Other Conditions:                                                  None

 

#5   Add one (1) door/revise walls at ground floor shower/locker room area for
men’s side and women’s side rear access and vestibule area.

Tenant Cost:                                     $7,320 — 35% up front = $2,562

Tenant Delay:                             None, if approved by October 18, 2011

Restoration:            Required (restore to Base Building Plans and
Specifications).

Other Conditions:                                                  None

 

E-3

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#6   Revise entry lobby walls at ground floor to: remove one (1) tenant entry
door/niche at south wall; relocate one (1) tenant entry door/niche at north
wall; add fire-rated slot windows to the south wall; add display niches at north
wall.

Tenant Cost:                                                 To be determined

Tenant Delay:                             None, if approved by October 25, 2011

Restoration:            Required (restore to Base Building Plans and
Specifications).

Other Conditions:                                                  None.

 

#7   Add and/or increase size/strength of structural framing at the roof level
to support and otherwise accommodate a clerestory style “skylight” in the area
above the proposed “visitor’s area on the third floor.

Tenant Cost:                                                 To be determined.

Tenant Delay:                           None, if approved by November 11, 2011

Restoration:                                                 To be determined.

Other Conditions: This will be quoted separately as it does not affect the base
building and will be an add to the Tenant improvements

 

E-4

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EXHIBIT E-2

TENANT IMPROVEMENT CONSTRUCTION AGREEMENT

 

This exhibit, entitled “Tenant Improvement Construction Agreement”, is and shall
constitute Exhibit E-2 to the Lease Agreement, dated as of the Lease Date, by
and between Landlord and Tenant (the “Tenant Work Letter”).  The terms and
conditions of this Exhibit E-2 are hereby incorporated into and are made a part
of the Lease.

 

Subject to the terms and conditions set forth herein and in the Lease, Landlord
shall use commercially reasonable efforts to cause the construction or
installation of the improvements in the interior of the Premises in accordance
with the procedures set forth below:

 

This Tenant Work Letter is essentially organized chronologically and addresses
the issues of the construction of the Premises, as such issues generally arise
during the actual construction of the Tenant Improvements.  All references in
this Tenant Work Letter to Articles or Sections of “this Lease” shall mean the
relevant portion of the Lease to which this Tenant Work Letter is attached as
Exhibit E-2 and of which this Tenant Work Letter forms a part, and all
references in this Tenant Work Letter to Sections of “this Tenant Work Letter”
shall mean the relevant portion of Sections 1 through 6 of this Tenant Work
Letter.

 

SECTION 1

 

DELIVERY OF THE PREMISES

 

Landlord shall deliver the Premises upon Substantial Completion (as defined in
the Lease) of the Base Building Improvements in accordance with Exhibit E-1 and
the Tenant Improvements in accordance with Exhibit E-2.  “Tenant Improvements”
shall mean interior improvements which are customarily constructed and
permanently affixed to the Premises (but shall exclude improvements which are
included in the Landlord’s Base Building Improvements), as such work shall be
depicted in the Approved Construction Documents (as defined below).

 

SECTION 2

 

TENANT IMPROVEMENT ALLOWANCE

 

2.1           Tenant Improvement Allowance.  Tenant shall be entitled to a
one-time tenant improvement allowance (the “Tenant Improvement Allowance”) in
the amount of Four Million Three Hundred Eighty-Seven Thousand Seven Hundred
Fifty-Eight Dollars ($4,387,758.00) for the Tenant Improvement Allowance Items
(as herein defined).  In no event shall Landlord be obligated to make
disbursements pursuant to this Tenant Work Letter in a total amount which

 

1

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exceeds the Tenant Improvement Allowance, unless otherwise expressly set forth
in the Lease or in Exhibits E-1 or this Exhibit E-2.

 

2.2           Disbursement of the Tenant Improvement Allowance.  Except as
otherwise set forth in this Tenant Work Letter, the Tenant Improvement Allowance
shall be disbursed by Landlord (each of which disbursements shall be made
pursuant to Landlord’s disbursement process) for costs related to the design,
permitting, processing, or construction of the Tenant Improvements or otherwise
incurred as a result of managing the Tenant Improvement process; including but
not limited to the following items and costs (collectively, the “Tenant
Improvement Allowance Items”):  (i) payment of the fees and expenses of any
space planner used by the Landlord, including Architectural Technologies as the
primary Architect/Space Planner, and the Engineers, as those terms are defined
below, and payment of the fees incurred by, and the cost of documents and
materials supplied by, Landlord and Landlord’s consultants in connection with
the preparation and review of the Construction Documents, as such term is
defined in Section 3.1 of this Tenant Work Letter; (ii) the cost of governmental
permits; (iii) the cost of any changes to the Construction Documents or Tenant
Improvements required by applicable building codes, including but not limited to
the 2010 Green Building Standards Code, and the cost of the development of an
indoor air quality management plan during construction, conformance with SMACNA
indoor air quality guidelines, protection of installed absorptive materials,
installation of MERV 8 filters, and replacement of filtration media prior to
occupancy if the system is used during construction; and (iv) the cost of
construction of the Tenant Improvements, including, without limitation, testing
and inspection costs, trash removal costs, parking fees, after-hours utilities
usage, and contractors’ fees and general conditions.  Notwithstanding anything
to the contrary contained in this Exhibit E-2 or the Lease, if the Tenant
Improvement Allowance is greater than the cost of the Tenant Improvement
Allowance Items incurred on or before the twelve (12) month anniversary of the
Commencement Date, the excess shall be retained by Landlord and Landlord shall
have no further obligation to disburse such excess as a Tenant Improvement
Allowance.

 

2.3           Entire Premises to be Improved.  Landlord is providing the Tenant
Improvement Allowance in order to have the entire Premises improved in a first
class condition typical of comparable office buildings in the City of Mountain
View, with no floor area of the Building to be left in unfinished or shell
condition.

 

SECTION 3

 

DESIGN OF TENANT IMPROVEMENTS AND APPROVALS

 

3.1           Selection of Architect/Space Planner, Engineers and creation of
Construction Documents. Landlord has retained (and Tenant has approved) the
Architectural Technologies design team led by Jim Fulton, and subject to
Tenant’s prior approval, which approval shall be given or withheld in Tenant’s
reasonable discretion, Landlord may retain such other licensed architect/space
planner(s) experienced in the design of space similar to that required by Tenant
(the “Architect/Space Planner”) to prepare the drawings and specifications for
the Tenant Improvements.  Landlord shall also retain such engineering
consultants designated by Landlord

 

2

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(the “Engineers”) to prepare all engineering working drawings and specifications
relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety,
and sprinkler work of the Tenant Improvements.  The drawings, specifications and
related contract documents prepared by the Architect/Space Planner and the
Engineers hereunder shall be known collectively as the “Construction
Documents.”  Tenant has retained the Facilities First team led by Tonya
Thornburgh and may retain such other licensed consultant designated by Tenant
and subject to Landlord’s prior approval, which approval shall be given or
withheld in Landlord’s reasonable discretion, to assist Tenant in it programming
and space planning process (“Tenant’s Facility Consultant”).

 

3.2           Initial Space Plan.  Landlord and the Architect/Space Planner have
had several meetings with Tenant and Tenant’s Facility Consultant to discuss
Tenant’s and Landlord’s design parameters and code compliance, and Tenant’s
space needs.  The Architect/Space Planner and Tenant’s Facility Consultant
produced an initial space plan (“Initial Space Plan”), which is attached hereto
as Schedule A.  The Initial Space Plan represents Tenant’s preferred interior
improvement plan as of the Lease Date.  Landlord hereby approves the Initial
Space Plan and confirms that the scope of improvements shown on the Initial
Space Plan shall not be subject to restoration at the expiration of the Lease.

 

3.3           Final Space Plan.  On or before October 31, 2011, Tenant shall
provide Landlord with any requested changes to the Initial Space Plan.  The
Tenant’s requested changes to the Initial Space Plan shall be subject to review
and approval by Landlord, which approval may be granted, granted subject to
certain conditions, or withheld in Landlord’s reasonable discretion.  Factors
the Landlord may consider in its review include, but are not limited to, any
impact on the project schedule, compatibility with other construction and
electrical, mechanical, life safety, and other systems within the Premises, the
degree to which the requested changes are non-standard or specialized
improvements, the long term value of the Tenant Improvements, any impact on
Landlord’s financing, including the Landlord’s ability to obtain permanent
financing (including the timing to close such financing) and impact on the
Landlord’s costs to construct the Base Building Improvements.  Promptly after
approval of the tenant requested changes by Landlord, and acceptance of
conditions placed on the approval, if any, by Tenant, but no later than
November 29, 2011, Landlord shall use commercially reasonable efforts to cause
the Architect/Space Planner to prepare the final space plan for Tenant
Improvements in the Premises (collectively, the “Final Space Plan”), which Final
Space Plan shall include a layout and designation of all offices, rooms and
other partitioning, their intended use, and equipment to be contained therein,
and shall deliver the Final Space Plan to Tenant for approval.  Tenant shall,
within five (5) business days after Tenant’s receipt of the Final Space Plan,
(i) approve the Final Space Plan, (ii) approve the Final Space Plan subject to
specified conditions which conditions Landlord may approve or disapprove in its
reasonable discretion, or (iii) disapprove the Final Space Plan and return the
same to Landlord with detailed requested revisions.  If Tenant or Landlord
disapproves the Final Space Plan, Tenant and Landlord shall meet and try to
resolve the dispute, and if not successful within five (5) business days, either
Tenant or Landlord may submit the dispute to mediation pursuant to Section 6.7
below.  Each day of delay in reaching a decision after the date that is five
(5) business days after Tenant’s receipt of the Final Space Plan shall be
assigned by the mediator as either a Tenant Delay or a Landlord Delay (or
allocated in a proportion determined by the mediator as a Tenant Delay and a
Landlord Delay).  Promptly after

 

3

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agreement between the parties or a decision by the mediator, if needed to
implement a revision, Landlord shall use commercially reasonable efforts to
cause the Architect/Space Planner to revise the Final Space Plan and resubmit
the Final Space Plan to Tenant and Tenant shall approve or disapprove of the
resubmitted Final Space Plan, based upon the criteria set forth in this
Section 3.3.

 

3.4           Final Construction Documents.  Promptly after the Final Space
Plans have been approved by both parties, Landlord shall use commercially
reasonable efforts to cause the Architect/Space Planner and the Engineers to
complete the architectural and engineering drawings and specifications for the
Tenant Improvements, and the final architectural working drawings in a form
which when completed will allow subcontractors to bid on the work and to obtain
all applicable permits (collectively, the “Final Construction Documents”) and
shall submit the same to Tenant for Tenant’s approval.  Tenant shall, within
five (5) business days after its receipt of the Final Construction Documents,
either (i) approve the Final Construction Documents, (ii) approve the Final
Construction Documents subject to specified conditions (but only to the extent
the Final Construction Documents do not comply with the Final Space Plan) which
conditions Landlord may approve or disapprove in its reasonable discretion, or
(iii) disapprove and return the Final Construction Documents to Landlord with
detailed requested revisions (but only to the extent the Final Construction
Documents do not comply with the Final Space Plan).  If Tenant disapproves the
Final Construction Documents or the Landlord disapproves the conditions or
revisions the Tenant has requested, Landlord and Tenant shall meet and try to
resolve the dispute, and if not successful within five (5) business days, either
Tenant or Landlord may submit the dispute to mediation pursuant to Section 6.7
below.  Each day of delay in reaching a decision after the date that is five (5)
business days after Tenant’s receipt of the Final Construction Documents shall
be assigned by the mediator as either a Tenant Delay or a Landlord Delay (or
allocated in a proportion determined by the mediator as a Tenant Delay and a
Landlord Delay).  Promptly after agreement between the parties or a decision by
the mediator, if needed to implement a revision, Landlord shall use commercially
reasonable efforts to cause the Architect/Space Planner to revise the Final
Construction Documents and resubmit the Final Construction Documents to Tenant
and Tenant shall approve or disapprove of the resubmitted Final Construction
Documents within five (5) business days after it receives such resubmitted Final
Construction Documents.  Once the Final Construction Documents have been
approved by both parties, the approved documents will be the “Approved
Construction Documents”.

 

3.5           Permits.  Promptly after Landlord’s and Tenant’s approval,
Landlord shall use commercially reasonable efforts to cause the Architect/Space
Planner to submit the Approved Construction Documents to the appropriate
municipal authorities and obtain all plan-check approvals from such municipal
authorities which are necessary to allow Contractor to obtain all applicable
building permits.  Landlord shall coordinate with Tenant in order to allow
Tenant, at its option, to take part in all phases of the permitting process and
shall supply Tenant, on a timely basis, with all plan check numbers and dates of
submittal.  Subject to mandated changes by the City of Mountain View, changes
required in order to correct conflicting information on the Approved
Construction Documents, or necessitated by conflicting field conditions, no
changes, modifications or alterations in the Approved Construction Documents may
be made without the prior written consent of Landlord and Tenant.

 

4

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3.6           Time Deadlines.  Landlord and Tenant shall use commercially
reasonable efforts to cooperate with the Architect/Space Planner, the Engineers,
and each other to complete all phases of the Construction Documents and the
permitting process and to receive the permits, and with Contractor for approval
of the “Cost Proposal,” as that term is defined in Section 4.1 of this Tenant
Work Letter, as soon as possible after the full execution of the Lease, and, in
that regard, shall meet at the Premises with each other and with the
Architect/Space Planner on a scheduled basis to be determined by the parties, to
discuss progress in connection with the same and to allow Tenant an opportunity
to view the work in progress.

 

SECTION 4

 

CONSTRUCTION OF THE TENANT IMPROVEMENTS

 

4.1           Cost Proposal.  Promptly after the Final Construction Documents
have been approved by both parties pursuant to Section 3.4 above, Landlord shall
provide Tenant with the “Cost Proposal.”  For purposes of this Tenant Work
Letter, the “Cost Proposal” shall consist of (i) the quote from the Contractor,
and (ii) an estimate of the costs of other Tenant Improvement Allowance Items
which have been or are anticipated to be incurred by Tenant in connection with
the design and construction of the Tenant Improvements.  The Landlord shall
include with the Cost Proposal its estimate of the “Over-Allowance Amount”,
which shall be the amount equal to the difference between the amount of the Cost
Proposal and the amount of the Tenant Improvement Allowance (less any portion
thereof already disbursed by Landlord, or in the process of being disbursed by
Landlord, on or before the commencement of construction of the Tenant
Improvements).  Tenant shall either approve or disapprove the Cost Proposal and
Over-Allowance Amount within five (5) business days of receipt thereof from
Landlord.  If Tenant approves, Landlord shall be released by Tenant to purchase
the items set forth in the Cost Proposal and commence the construction relating
to such items.  If Tenant disapproves the Cost Proposal and Over-Allowance
Amount the parties shall work together in good faith to make modifications to
the Approved Construction Documents which will reduce the Cost Proposal and
Over-Allowance Amount to an amount Tenant is willing to approve, provided
however, each day of delay beginning ten (10) business days after the Tenant’s
receipt of the Cost Proposal shall constitute a Tenant Delay.  The date by which
Tenant must approve and deliver the Cost Proposal to Landlord shall be known
hereafter as the “Cost Proposal Approval Date.”

 

4.2           Over-Allowance Amount.  Tenant shall be responsible for making
progress payments for the Over-Allowance Amount, if any, directly to Landlord as
follows: 35% of the Over-Allowance Amount within 10 business days after the
Tenant’s approval of the Over Allowance Amount; and the remaining 65% of the
Over-Allowance Amount with 10 business days after the Commencement Date of the
Lease.

 

4.3           Tenant Requested Changes after the Cost Proposal Approval Date. 
In the event Tenant requests a change affecting the construction of the Tenant
Improvements, after the Cost Proposal Approval Date, the Tenant’s requested
changes shall be subject to review and approval by Landlord, which approval may
be granted, granted subject to certain conditions, or

 

5

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withheld in Landlord’s reasonable discretion.  Factors the Landlord may consider
in its review include, but are not limited to, any impact on the project
schedule, compatibility with other construction and electrical, mechanical, life
safety, and other systems within the Premises, the degree to which the requested
changes are non-standard or specialized improvements, the long term value of the
Tenant Improvements, any impact on Landlord’s financing, including the
Landlord’s ability to obtain permanent financing (including the timing to close
such financing) and impact on the Landlord’s costs to construct the Base
Building Improvements.  In the event Landlord grants conditional approval of a
requested change, and one of the conditions is that Tenant fund additional costs
associated with the requested change (the “Change Request Costs”), Tenant shall
pay the applicable Change Request Costs directly to Landlord as follows: 50% of
the applicable Change Request Cost within 10 business days after delivery of a
written statement from Landlord to Tenant specifying the amount then due; and
the remaining 50% of the applicable Change Request Costs upon Substantial
Completion.  If Tenant fails to make such payment within such 10-business day
period, then Tenant shall be deemed to have withdrawn its request to make the
applicable change and Landlord shall have no further obligation to incorporate
the applicable change into the Tenant Improvements.

 

4.4           Landlord’s Retention of Contractor.  Landlord shall independently
retain Contractor to construct the Tenant Improvements in accordance with the
Approved Construction Documents, the Cost Proposal, and any changes otherwise
allowed in this Tenant Work Letter.  Landlord shall use commercially reasonable
efforts to supervise the construction by Contractor.

 

4.5           Contractor’s Warranties and Guaranties.  Landlord shall use
commercially reasonable efforts to obtain from Contractor, and shall use
commercially reasonable efforts to cause Contractor to obtain from all
subcontractors and material suppliers, warranties (collectively, “Construction
Warranties”) for all components of the Tenant Improvements for which warranties
are customarily provided in the construction industry and Landlord shall enforce
the Construction Warranties as requested by, and at the expense of Tenant.

 

4.6           Copy of Updated Approved Construction Documents Plans.  Landlord
shall use commercially reasonable efforts to cause the Architect/Space Planner
(i) to update the Approved Construction Documents through annotated changes, as
necessary, to reflect the reported locations of the improvements and significant
changes made during the construction process as reported by other parties,
including the contractor, which information is assumed to be reliable, but does
not come with any warranty or certification, and (ii) to deliver to Landlord and
Tenant each a CAD disk of such updated Approved Construction Documents before
the final payment of the Architect/Space Planner.

 

SECTION 5

 

COMPLETION OF THE TENANT IMPROVEMENTS;
LEASE COMMENCEMENT DATE

 

5.1           Substantial Completion.  The Premises shall be deemed ready for
occupancy upon the Substantial Completion (as defined in the Lease) of the Base
Building Improvements and the Tenant Improvements.  Tenant shall be solely
responsible (at Tenant’s cost and expense)

 

6

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for installation of all tenant fixtures, cabling, work-stations, built-in
furniture, or equipment not shown on the Approved Construction Documents, which
installation shall not be a factor in determining if Substantial Completion has
occurred.

 

5.2           Tenant Delay.  The term “Tenant Delay” shall refer to any delay or
delays in the Substantial Completion of the Tenant Improvements resulting,
directly or indirectly, from, or imputed as a result of any of the following:

 

5.2.1        Tenant’s failure to comply with the time deadlines included in this
Tenant Work Letter;

 

5.2.2        Tenant’s failure to respond to a request for approval of any matter
requiring Tenant’s approval within three (3) business days (or longer time
specifically set forth in this Tenant’s Work Letter);

 

5.2.3        A breach by Tenant of the terms of Exhibit E-1, this Tenant Work
Letter or the Lease;

 

5.2.4        Tenant’s request for changes in the Approved Construction Documents
after Tenant’s approval of the Cost Proposal and Over-Allowance Amount;

 

5.2.5        Tenant’s requirement for materials, components, finishes or
improvements which are not available in a commercially reasonable time given the
anticipated date of Substantial Completion of the Premises, or

 

5.2.6        Any other acts or omissions of Tenant, or its consultants, agents,
or employees.

 

5.3           Landlord Delay; The term “Tenant Delay” shall refer to any delay
or delays in the Substantial Completion of the Tenant Improvements resulting,
directly or indirectly, from, or imputed as a result of any of the following:

 

5.2.1        Landlord’s failure to comply with the time deadlines included in
this Tenant Work Letter;

 

5.2.2        Landlord’s failure to respond to a request for approval of any
matter requiring Landlord’s approval within three (3) business days (or longer
time specifically set forth in this Tenant’s Work Letter);

 

5.2.3        A breach by Landlord of the terms of Exhibit E-1, this Tenant Work
Letter or the Lease;

 

5.2.4        Landlord’s request for changes in the Approved Construction
Documents after Tenant’s approval of the Cost Proposal and Over-Allowance
Amount;

 

5.2.5        Landlord’s requirement for materials, components, finishes or
improvements which are not available in a commercially reasonable time given the
anticipated date of Substantial Completion of the Premises, or

 

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5.2.6        Any other acts or omissions of Landlord, or its contractors,
subcontractors, architects, agents, or employees.

 

SECTION 6

 

MISCELLANEOUS

 

6.1           Tenant’s Entry Into the Premises Prior to Substantial Completion. 
Provided that Tenant and its agents do not interfere with Contractor’s work in
the Building and the Premises, upon Tenant’s request, to be made in writing no
earlier than two (2) weeks prior to the anticipated date of Substantial
Completion of the Premises, Landlord shall allow Tenant access to the Premises
prior to the Substantial Completion of the Tenant Improvements, for the purpose
of Tenant installing equipment or fixtures (including Tenant’s data and
telephone equipment) in the Premises.  Prior to Tenant’s entry into the Premises
as permitted by the terms of this Section 6.1, (i) Tenant shall submit a
schedule to Landlord, for its approval, which schedule shall detail the timing
and purpose of Tenant’s entry and (ii) Tenant shall deliver to Landlord the
policies or certificates evidencing Tenant’s insurance as required under the
terms of the Lease.  Tenant shall hold Landlord harmless from and indemnify,
protect and defend Landlord against any loss or damage to the Premises and
against injury to any persons caused by Tenant’s actions pursuant to this
Section 6.1.

 

6.2           Tenant’s Representative.  Tenant has designated Kirk Thompson as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Landlord, shall have full authority
and responsibility to act on behalf of the Tenant as required in this Tenant
Work Letter.

 

6.3           Landlord’s Representative.  Landlord has designated David Wilbur
and Bruce Burkard as its representatives with respect to the matters set forth
in this Tenant Work Letter, either of whom, until further notice to Tenant,
shall have full authority and responsibility to act on behalf of the Landlord as
required in this Tenant Work Letter.

 

6.4           Landlord’s Agents.  The Architect/Space Planner, Project Manager,
Engineers, consultants, and Contractor, as well as all subcontractors, laborers,
materialmen, and suppliers retained directly by Landlord, shall be referred to,
collectively, as the “Landlord’s Agents.”

 

6.5           Time of the Essence in This Tenant Work Letter.  Unless otherwise
indicated, all references herein to a “number of days” shall mean and refer to
calendar days.  In all instances where Tenant or Landlord is required to approve
or deliver an item, if no written notice of approval or disapproval is given or
the item is not delivered within the stated time period, at the end of such
period, unless expressly stated otherwise, the item shall automatically be
deemed disapproved or delivered by the non-responding party and the next
succeeding time period shall commence.

 

6.6           Tenant’s Lease Default.  Notwithstanding any provision to the
contrary contained in this Lease, if a Default as defined in the Lease, or a
default by Tenant under this

 

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Tenant Work Letter which is not cured within three (3) business days following
notice from Landlord, has occurred at any time on or before the Substantial
Completion of the Premises, then (i) in addition to all other rights and
remedies granted to Landlord pursuant to the Lease, Landlord shall have the
right to withhold payment of all or any portion of the Tenant Improvement
Allowance, and (ii) all other obligations of Landlord under the terms of this
Tenant Work Letter shall be forgiven until such time as such default is cured.

 

6.7           Mediation.  If either Landlord or Tenant desires to resort to
mediation pursuant to the provisions of Sections B.1 or B.5 of Exhibit E-1 or
Sections 3.3 or 3.4 of this Exhibit E-2, such party may do so by providing
written notice to the other (a “Mediation Notice”) (and providing any
documentation on which such party’s position is based).  Upon delivery and
receipt of such notice, the Tenant Representative and the Landlord
Representative shall use best efforts to select and agree upon a neutral
mediator.  If a mediator cannot be agreed upon within seven (7) days after
delivery of the Mediation Notice, one will be selected by JAMS in San
Francisco.  Except for the purpose of enforcing this Section 6.7, no suit shall
be initiated with respect to any controversy or claim arising out of or relating
to determination of delay as provided in Section 3.3 or 3.4 of this Exhibit E-2.

 

The Landlord Representative(s), the Tenant Representative(s) and the neutral
mediator shall participate in a meeting in which the parties shall work in good
faith to resolve the dispute in question.  The meeting shall be held within
seven (7) days after selection of the neutral mediator (or as soon thereafter as
the neutral mediator is available) and agreement among the parties and the
neutral mediator on a time and place for such meeting, which agreement shall not
be unreasonably withheld by either party.  The mediator may set the time and
place of the meeting if the parties are unable to agree.

 

The Landlord Representative(s), the Tenant Representative(s) and the neutral
mediator shall agree on the procedures for an exchange of documents prior to the
meeting and for the presentation of documents and oral and written arguments as
part of the mediation (but in no event shall there be any discovery or
depositions taken in connection with such mediation and no attorney shall be
permitted to represent either party in connection with such mediation).  After
listening to such presentations and examining such documents and other exhibits,
the Landlord Representative(s) and the Tenant Representative(s), with the
assistance of a neutral mediator, shall work together in good faith to resolve
the dispute in question.  The meeting shall be of such duration as the parties
in good faith deem necessary but in no event shall it extend beyond two
(2) business days.  Each party shall absorb all of its own expenses in
connection with such meeting and shall pay one-half of any costs or fees related
to the services of the neutral mediator.  In the event the dispute is not
resolved after such a meeting is concluded, the neutral mediator shall determine
whether the delay is a Tenant Delay, a Landlord Delay, or should be allocated as
a Tenant Delay and a Landlord Delay and, if so, in what proportion, and the
mediator’s decision on delay allocation shall be binding on both parties.

 

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INITIALS:

 

 

 

TENANT:

RS

 

 

LANDLORD:

BB

 

 

 

10

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Schedule A

 

of Exhibit E-2, the Tenant Improvement Construction Agreement

Initial Space Plans

 

Initial Space Plans (reduced sized copies attached hereto):

 

1                 First Floor Plan, titled a Fit Plan for Omnicell, 590 E
Middlefield Road, Mountain View, CA, by Architectural Technologies, Sheet
FLR1-SP5, dated 9-15-2011

2                 Second Floor Plan, titled a Fit Plan for Omnicell, 590 E
Middlefield Road, Mountain View, CA, by Architectural Technologies, Sheet
FLR2-SP5, dated 9-15-2011

3                 Third Floor Plan, titled a Fit Plan for Omnicell, 590 E
Middlefield Road, Mountain View, CA, by Architectural Technologies, Sheet
FLR3-SP5, dated 9-15-2011

 

E-1

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[g317403kk15i001.gif] 

 

E-2

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[g317403kk15i002.gif]

 

E-3

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 [g317403kk15i003.gif]

 

E-4

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EXHIBIT E-3

SOLAR POWER CONSTRUCTION AGREEMENT

 

This exhibit, entitled “Solar Power Construction Agreement”, is and shall
constitute Exhibit E-3 to the Lease Agreement, dated as of the Lease Date, by
and between Landlord and Tenant.  The terms and conditions of this Exhibit E-3
are hereby incorporated into and are made a part of the Lease.

 

Both Landlord and Tenant desire to have solar polar installed and incorporated
into the Premises in a manner that benefits the environment and allows costs of
installation and the energy produced to be allocated in a rational manner. 
Landlord and Tenant agree to cooperate in the investigation of various potential
alternative configurations for installation of solar power facilities on the
parking structure consistent with design approvals previously granted by the
City of Mountain View.

 

On or before November 18, 2011, Tenant shall have the option to submit a solar
power facility installation proposal to Landlord (a “Solar Power Proposal”),
which proposal, at a minimum, would allow the Tenant at its sole cost and
expense to design, permit, and construct a solar power facility (if constructed
by Tenant, a “Solar Power Facility”) on the top level of the parking structure,
and to retain the rights to any power produced by the Solar Power Facility
during the term of the Lease.  Further, Tenant may take advantage of any
depreciation or amortization of the costs incurred with respect to any Solar
Power Facility constructed by Tenant, but Tenant is prohibited from using any
financing which is secured by all or any portion of the Premises or which could
result in any lien rights with respect to the Premises.  The scope of the Solar
Power Facility installation shall include, at a minimum, photo-voltaic array
capable sized to produce at least 25 kilowatts, the steel structure to support
the photo-voltaic array, wiring, switches, inverters and related electric and
mechanical equipment necessary to make the system complete, except that the
Landlord shall provide empty conduits from the parking structure to the main
electrical room of the Building for the wiring required for the approved Solar
Power Facility.

 

In the event the Tenant wishes to make a Solar Power Proposal, Tenant shall
submit as part of the Solar Power Proposal, for Landlord’s review and approval,
the design of such Solar Power Facility which shall include detailed drawings
and specifications for the installation.  Landlord shall respond to Tenant’s
Solar Power Proposal no later than the fifth (5th) business day following
delivery of Tenant’s Solar Power Proposal, and failure to respond within such
time shall be deemed approval.  Landlord’s approval of the Solar Power Proposal
may be granted, granted with conditions, or withheld in Landlord’s reasonable
discretion, after considering, among other things, whether the proposed solar
facility would be compatible with all other construction of the Premises,
including, without limitation, all electrical, mechanical, life safety, and
other systems within the Premises, the long term value of the Premises, the
construction schedule, and whether the proposed solar facility would increase
Landlord’s costs to construct the Premises.  If the Solar Power Proposal is
rejected by Landlord, Landlord and Tenant shall cooperate with each other to
revise the Solar Power Proposal in a manner acceptable to both parties.  If the
Solar Power Proposal is accepted by Landlord, Tenant shall cooperate with
Landlord to incorporate the construction of the Solar Power Facility concurrent
with the parking structure construction with completion to occur at least thirty
(30) days prior to the Lease Commencement Date (the “Solar Power Facility
Completion Date”).  If, as of the date

 

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that is sixty (60) days prior to the Lease Commencement Date, Landlord believes
that Tenant will not complete construction of the Solar Power Facility by the
Solar Power Facility Completion Date, then Landlord may send a written notice to
Tenant advising Tenant of such concern.  If, following receipt of such written
notice, Tenant has not completed construction of the Solar Power Facility by the
Solar Power Facility Completion Date, then Landlord shall have the option, in
its sole discretion upon a second written notice to Tenant, to take over
construction of the Solar Power Facility, at Tenant’s expense (and Tenant shall
reimburse to Landlord such costs upon written demand therefor as Additional
Rent).  Notwithstanding the foregoing, any delay in the Commencement Date
resulting from Tenant’s failure to complete the Solar Power Facility by the
Solar Power Facility Completion Date shall be a Tenant Delay.  At the end of the
Lease term, as long as the Solar Power Facility is constructed with Sunpower
E-18 series solar panels or an equivalent or better solar panel having a 25 year
minimum power warranty, then Tenant shall have no obligation to remove the Solar
Power Facility and the Solar Power Facility shall remain in the Premises as the
property of Landlord (and Tenant shall execute any documents reasonably
requested by Landlord if necessary in order to effectuate such transfer of title
to the Solar Power Facility and the transfer of any related warranties).  If
Tenant does not construct a Solar Power Facility meeting the requirements of the
immediately preceding sentence, than Landlord shall have the option to require
Tenant to remove the Solar Power Facility at the end of the Lease Term at
Tenant’s sole cost and expense, in which event Tenant shall repair any damage
caused by such removal.

 

If the Tenant does not make a Solar Power Proposal to the Landlord prior to
November 18, 2011, or Landlord approves Tenant’s Solar Power Proposal (no later
than the fifth (5th) business day following delivery of Tenant’s request for
approval) with conditions which Tenant does not accept in writing within five
(5) business days after Tenant’s receipt from Landlord of such conditions,
Landlord may, at its sole cost and expense, install a solar power facility on
the top level of the parking structure (“Landlord’s Solar Facility”), and
Landlord shall retain the rights to any power produced by Landlord’s Solar
Facility, if any, which power may be metered and incorporated into the
Building’s electrical system.  Any power used by the Building’s electrical
system shall be measured and shall be subject to reimbursement from any tenants
leasing the Premises, including Tenant, based on the marginal gross billing
rates as shown on the most recent monthly invoice received by Landlord from PG&E
with respect to the Premises, or then current electric utility provider, as such
rates may change from time to time.  Notwithstanding anything in the Lease to
the contrary, if Tenant constructs the Solar Power Facility (even if such
construction is completed by Landlord under its self-help rights), Tenant shall
be responsible, at Tenant’s sole cost and expense, for maintaining the Solar
Power Facility in good working condition at all times during the Lease term,
including at the expiration of the term of the Lease.  If Landlord constructs
Landlord’s Solar Facility (except as a result of the exercise of its self-help
rights), then Landlord shall be responsible, at Landlord’s sole cost and
expense, for maintaining Landlord’s Solar Facility.

 

INITIALS:

 

 

TENANT:

RS

 

LANDLORD:

BB

 

 

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EXHIBIT F

 

SNDA

 

RECORDING REQUESTED BY                     )

 

 

AND WHEN RECORDED MAIL TO:         )

 

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Mail Code:

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)

 

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Attn.:

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Space above for Recorder’s Use

 

SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

 

NOTICE:  THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS IN
YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF
SOME OTHER OR LATER SECURITY AGREEMENT.

 

NOTICE:  THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED
ON YOUR LEASE AS LANDLORD TO OBTAIN A LOAN, SOME OR ALL OF WHICH MAY BE EXPENDED
FOR PURPOSES OTHER THAN ACQUISITION OR IMPROVEMENT OF THE PROPERTY.

 

This Subordination, Nondisturbance and Attornment Agreement (this “Agreement”)
is entered into as of                                          (the “Effective
Date”), between                           , whose address is
                                           (“Lender”), and
                                                  , a
                                                                        , whose
address is                                                  (“Tenant”), with
reference to the following facts:

 

A.            , a                                       , whose address is
                                                                     
             (“Landlord”), owns the real property located at
                                               (such real property, including
all buildings, improvements, structures and fixtures located thereon,
“Landlord’s Premises”), as more particularly described in Schedule “A.”

 

B.            Lender has made a loan to Landlord in the original principal
amount of $                              , which amount is subject to possible
increase to a maximum principal amount of $                                    
(the “Loan”), all as provided in and subject to the terms and conditions set
forth in the Loan Documents (as hereinafter defined).

 

C.            To secure the Loan, Landlord has encumbered Landlord’s Premises by
entering into that certain [Construction] Deed of Trust, Assignment, Security
Agreement and Fixture

 

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Filing, dated                                 , in favor of                   .,
a                     , as Trustee for the benefit of Lender as Beneficiary
[Grantee] (as amended, increased, renewed, extended, spread, consolidated,
severed, restated, or otherwise changed from time to time, the “Deed of Trust”)
[to be] recorded [on                       , at Book         , Page         ,]
in the Official Records of the County of                               , State
of California (the “Official Records”).

 

D.            Pursuant to a [Title of Lease] dated as of
                                  , [as amended on                             
and                               ] (the “Lease”), Landlord demised to Tenant [a
portion of] Landlord’s Premises (“Tenant’s Premises”), as more particularly
described in the Lease.  Tenant’s Premises are commonly described as
                                      .

 

E.             Tenant and Lender desire to agree upon the relative priorities of
their interests in Landlord’s Premises and their rights and obligations if
certain events occur.

 

NOW, THEREFORE, for good and sufficient consideration, Tenant and Lender agree:

 

1.             Definitions.

 

The following terms shall have the following meanings for purposes of this
Agreement.

 

1.1           Construction-Related Obligation.  A “Construction-Related
Obligation” means any obligation of Landlord under the Lease to make, pay for,
or reimburse Tenant for any alterations, demolition, or other improvements or
work at Landlord’s Premises, including Tenant’s Premises.  “Construction-Related
Obligations” shall not include: (a) reconstruction or repair following fire,
casualty or condemnation, whether or not required by the Lease to be undertaken
by Landlord; or (b) ordinary maintenance and repairs.

 

1.2           Foreclosure Event.  A “Foreclosure Event” means: (a) foreclosure
under the Deed of Trust, whether by judicial action or pursuant to nonjudicial
proceedings; (b) any other exercise by Lender of rights and remedies (whether
under the Deed of Trust or under applicable law, including bankruptcy law) as
holder of the Loan and/or as beneficiary under the Deed of Trust, as a result of
which any Successor Landlord becomes owner of Landlord’s Premises; or
(c) delivery by Landlord to Lender (or its designee or nominee) of a deed or
other conveyance of Landlord’s interest in Landlord’s Premises in lieu of any of
the foregoing.

 

1.3           Former Landlord.  A “Former Landlord” means the original Landlord
named in the Lease and any other party that has become the landlord under the
Lease at any time before the occurrence of any attornment under this Agreement.

 

1.4           Loan Documents.  The “Loan Documents” mean the Deed of Trust and
any other document now or hereafter evidencing, governing, securing or otherwise
executed in connection with the Loan, including any promissory note and/or loan
agreement, pertaining to the repayment or use of the Loan proceeds or to any of
the real or personal property, or interests therein, securing the Loan, as such
documents or any of them may have been or may be from time to time hereafter
renewed, extended, supplemented, increased or modified.  This Agreement is a
Loan Document.

 

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1.5           Offset Right.  An “Offset Right” means any right or alleged right
of Tenant to any offset, defense (other than one arising from actual payment and
performance, which payment and performance would bind a Successor Landlord
pursuant to this Agreement), claim, counterclaim, reduction, deduction, or
abatement against Tenant’s payment of Rent or performance of Tenant’s other
obligations under the Lease, arising (whether under the Lease or other
applicable law) from Landlord’s breach or default under the Lease.

 

1.6           Rent.  The “Rent” means any fixed rent, base rent, additional rent
or percentage rent at any time becoming due or owing by Tenant under the Lease.

 

1.7           Successor Landlord.  A “Successor Landlord” means any party that
becomes owner of Landlord’s Premises as the result of a Foreclosure Event.

 

1.8           Tenant Concession.  A “Tenant Concession” means any agreement or
undertaking by any Former Landlord which is provided to Tenant or any affiliate
of Tenant in connection with the execution by Tenant of the Lease or the
occupancy by Tenant of Tenant’s Premises and which is not expressly set forth in
the Lease, including free or reduced rent, early termination rights or options,
assumption of any other lease obligations of Tenant or any affiliate of Tenant
relating to property other than Landlord’s Premises, payment of moving or
relocation costs, construction or installation of improvements to or alterations
of Tenant’s Premises or Landlord’s Premises or the premises of any affiliate of
Tenant, or any other economic, financial or contractual benefit to Tenant or any
affiliate of Tenant of any type or nature that is provided by Landlord as an
inducement to Tenant to enter into the Lease or to commence Tenant’s occupancy
of Tenant’s Premises.

 

1.9           Termination Right.  A “Termination Right” means any right of
Tenant to cancel or terminate the Lease or to claim a partial or total eviction
arising (whether under the Lease or under applicable law) from Landlord’s breach
or default under the Lease.

 

2.             Subordination.

 

The Lease shall be, and shall at all times remain, subject and subordinate to
the Deed of Trust, the lien imposed by the Deed of Trust, and all advances made
under the Loan Documents.  Tenant hereby intentionally and unconditionally
subordinates the Lease and all of Tenant’s right, title and interest thereunder
and in and to Landlord’s Premises (including Tenant’s right, title and interest
in connection with any insurance proceeds or eminent domain awards or
compensation relating to Landlord’s Premises and Tenant’s right to receive and
retain any rentals or payments made under any sublease or concession agreement
of or relating to any portion of Tenant’s Premises), to the lien of the Deed of
Trust and all of Lender’s rights and remedies thereunder, and agrees that the
Deed of Trust shall unconditionally be and shall at all times remain a lien on
Landlord’s Premises prior and superior to the Lease.

 

3.             Nondisturbance, Recognition and Attornment.

 

3.1           No Exercise of Deed of Trust Remedies Against Tenant.  So long as
the Lease has not been terminated on account of Tenant’s default that has
continued beyond applicable cure periods (an “Event of Default”), Lender shall
not name or join Tenant as a defendant in any judicial action or proceeding that
is commenced pursuant to the exercise of Lender’s rights and

 

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remedies arising upon a default by Landlord under the Deed of Trust unless
(a) applicable law requires Tenant to be made a party thereto as a condition to
proceeding against Landlord or in order to prosecute or otherwise fully enforce
such rights and remedies; or (b) such joinder of Tenant is required for the
recovery by Lender of any Rent at any time owing by Tenant under the Lease,
whether pursuant to the assignment of rents set forth in the Deed of Trust or
otherwise; or (c) such joinder is required in order to enforce any right of
Lender to enter Landlord’s Premises for the purpose of making any inspection or
assessment, or in order to protect the value of Lender’s security provided by
the Deed of Trust.  In any instance in which Lender is permitted to join Tenant
as a defendant as provided above, Lender agrees not to terminate the Lease or
otherwise adversely affect Tenant’s rights under the Lease or this Agreement in
or pursuant to such action or proceeding, unless an Event of Default by Tenant
has occurred and is continuing.  The foregoing provisions of this Section 3.1
shall not be construed in any manner that would prevent Lender from (i) carrying
out any nonjudicial foreclosure proceeding under the Deed of Trust,
(ii) exercising Lender’s rights under the provisions of California Civil Code
Section 2938 with respect to the enforcement against Tenant of any assignment of
rents made by Landlord to Lender in connection with the Loan, or (iii) obtaining
the appointment of a receiver for the Landlord’s Premises as and when permitted
under applicable law.

 

3.2           Nondisturbance and Attornment.  Notwithstanding the provisions of
Section 2 above, if the Lease has not been terminated on account of an Event of
Default by Tenant, then, when Successor Landlord acquires title to Landlord’s
Premises: (a) Successor Landlord shall not terminate or disturb Tenant’s
possession of Tenant’s Premises under the Lease, except in accordance with the
terms of the Lease and this Agreement; (b) Successor Landlord shall be bound to
Tenant under all the terms and conditions of the Lease (except as provided in
this Agreement); (c) Tenant shall recognize and attorn to Successor Landlord as
Tenant’s direct landlord under the Lease as affected by this Agreement; and
(d) the Lease shall continue in full force and effect as a direct lease, in
accordance with its terms (except as provided in this Agreement), between
Successor Landlord and Tenant.

 

3.3           Acknowledgment.  Tenant acknowledges that Lender would not make
the Loan without this Agreement and the subordination of the Lease to the lien
of the Deed of Trust as set forth herein, and that in reliance upon, and in
consideration of, this subordination, specific monetary and other obligations
are being and will be entered into by Lender which would not be made or entered
into but for reliance upon this Agreement and such subordination of the Lease. 
This Agreement is and shall be the sole and only agreement with regard to the
subordination of the Lease to the lien of the Deed of Trust and shall supersede
and cancel, but only insofar as would affect the priority between the Deed of
Trust and the Lease, any prior agreement as to such subordination, including
those provisions, if any, contained in the Lease which provide for the
subordination of the Lease to a present or future deed or deeds of trust or to a
present or future mortgage or mortgages.

 

3.4           Use of Proceeds.  Lender, in making any advances of the Loan
pursuant to any of the Loan Documents, shall be under no obligation or duty to,
nor has Lender represented to Tenant that it will, see to the application of
such proceeds by the person or persons to whom Lender disburses such advances,
and any application or use of such proceeds for purposes other than those
provided for in any Loan Document shall not defeat Tenant’s agreement to
subordinate the Lease in whole or in part as set forth in this Agreement.

 

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3.5           Turnover of Rent.  Tenant shall pay to Lender all Rent otherwise
payable to Landlord under the Lease upon written demand from Lender, and Tenant
shall not have the right to contest or question the validity of any such written
demand from Lender or the extent to which Lender may properly exercise its
rights to collect rents from Landlord’s Premises pursuant to the provisions of
the Loan Documents.  The consent and approval of Landlord to this Agreement
shall constitute an express authorization for Tenant to make such payments to
Lender and a release and discharge of all liability of Tenant to Landlord for
any such payments made to Lender in compliance with Lender’s written demand.

 

3.6           Additional Subordination; Bankruptcy Rights.  Tenant shall not
subordinate its rights under the Lease to any other mortgage, deed of trust, or
other security instrument without the prior written consent of Lender, which
consent may be given or withheld in Lender’s sole and absolute discretion.  In
the event the Lease is rejected or deemed rejected in any bankruptcy proceeding
with respect to Landlord, Tenant shall not exercise its option to treat the
Lease as terminated under 11 U.S.C. § 365(h), as amended, or any successor or
similar statute.

 

3.7           Further Documentation.  The provisions of this Article 3 shall be
effective and self-operative without any need for Successor Landlord or Tenant
to execute any further documents.  Tenant and Successor Landlord shall, however,
confirm the provisions of this Article 3 in writing upon request by either of
them.

 

4.             Protection of Successor Landlord.

 

Notwithstanding anything to the contrary in the Lease or the Deed of Trust,
Successor Landlord shall not be liable for or bound by any of the following
matters:

 

4.1           Claims Against Former Landlord.  Any Offset Right that Tenant may
have against any Former Landlord relating to any event or occurrence before the
date of attornment, including any claim for damages of any kind whatsoever as
the result of any breach by Former Landlord that occurred before the date of
attornment.  The foregoing shall not limit either (a) Tenant’s right to exercise
against Successor Landlord any Offset Right otherwise available to Tenant
because of events occurring after the date of attornment, or (b) Successor
Landlord’s obligation to correct any conditions that existed as of the date of
attornment and that violate Successor Landlord’s obligations as landlord under
the Lease.  Notwithstanding the foregoing clause (b), Tenant shall not be
entitled to exercise any Offset Right against Successor Landlord with respect to
any Known Preexisting Conditions (as hereinafter defined) or to enforce
Successor Landlord’s obligations to correct such conditions, unless Tenant shall
have given Lender written notice of such conditions and an opportunity to
inspect all of Tenant’s Premises prior to the applicable Foreclosure Event.  As
used herein, “Known Preexisting Conditions” means any conditions that existed on
or affected Tenant’s Premises and were actually known to Tenant prior to the
date of attornment, which conditions were required to be corrected by Former
Landlord prior to the date of attornment pursuant to the Lease.

 

4.2           Prepayments.  Any payment of Rent that Tenant may have made to
Former Landlord more than thirty (30) days before the date such Rent was first
due and payable under the Lease with respect to any period after the date of
attornment, other than, and only to the extent of, prepayments expressly
required under the Lease.

 

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4.3           Payments; Security Deposit.  Any obligation (a) to pay Tenant any
sum(s) that any Former Landlord owed to Tenant, or (b) with respect to any
security deposited with Former Landlord, except to the extent that such security
was actually delivered to Lender by Former Landlord and Lender has the legal
right to use or apply such security for the purposes provided in the Lease.

 

4.4           Modification, Amendment, or Waiver.  Any modification or amendment
of the Lease, or any waiver of any terms of the Lease, made without Lender’s
written consent.

 

4.5           Surrender, Etc.  Any consensual or negotiated surrender,
cancellation, or termination of the Lease, in whole or in part, agreed upon
between Landlord and Tenant, unless effected unilaterally by Tenant pursuant to
the express terms of the Lease.

 

4.6           Construction-Related Obligations.  Any Construction-Related
Obligation of Former Landlord.

 

5.             Exculpation of Successor Landlord.

 

Notwithstanding anything to the contrary in this Agreement or the Lease, upon
any attornment pursuant to this Agreement, (a) the Lease shall be deemed to have
been automatically amended to provide that Successor Landlord’s obligations and
liability under the Lease shall never extend beyond Successor Landlord’s (or its
successors’ or assigns’) interest, if any, in Tenant’s Premises from time to
time, including insurance and condemnation proceeds, Successor Landlord’s
interest in the Lease, and the proceeds from any sale or other disposition of
Tenant’s Premises by Successor Landlord (provided that Tenant shall have no
interest in or right to participate in (i) any payments made under any
promissory note received by Successor Landlord in connection with any such sale
or other disposition, or (ii) any collateral held by Successor Landlord to
secure such payments) (collectively, “Successor Landlord’s Interest”), and
Tenant shall look exclusively to Successor Landlord’s Interest (or that of its
successors and assigns) for payment or discharge of any obligations of Successor
Landlord under the Lease as affected by this Agreement, and (b) the obligations
under the Lease of Lender or any affiliate of Lender which becomes a Successor
Landlord shall terminate upon the transfer by such Successor Landlord of its
interest in Landlord’s Premises, and thereupon Tenant shall look solely to the
transferee for the performance of all obligations of the landlord under the
Lease which accrue or otherwise become performable following the date of such
transfer.  If Tenant obtains any money judgment against Successor Landlord with
respect to the Lease or the relationship between Successor Landlord and Tenant,
then Tenant shall look solely to Successor Landlord’s Interest (or that of its
successors and assigns) to collect such judgment.  Tenant shall not collect or
attempt to collect any such judgment out of any other assets of Successor
Landlord.  Nothing herein shall be construed to grant Tenant any right to seek
any recovery from any Former Landlord or Successor Landlord to the extent that
such recovery is not permitted under or is restricted by the provisions of the
Lease.

 

6.             Lender’s Right to Cure.

 

6.1           Notice to Lender.  Notwithstanding anything to the contrary in the
Lease or this Agreement, before exercising any Termination Right or Offset
Right, Tenant shall provide

 

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Lender with notice of the breach or default by Landlord giving rise to same (the
“Default Notice”) and, thereafter, the opportunity to cure such breach or
default as provided for below.

 

6.2           Lender’s Cure Period.  After Lender receives a Default Notice,
Lender shall have a period of thirty (30) days beyond the time available to
Landlord under the Lease in which to cure the breach or default by Landlord. 
Lender shall have no obligation to cure (and shall have no liability or
obligation for not curing) any breach or default by Landlord, except to the
extent that Lender agrees or undertakes otherwise in writing.

 

6.3           Extended Cure Period.  In addition, as to any breach or default by
Landlord the cure of which requires possession and control of Landlord’s
Premises, provided only that Lender undertakes to Tenant by written notice to
Tenant within thirty (30) days after receipt of the Default Notice to exercise
reasonable efforts to cure or cause to be cured by a receiver such breach or
default within the period permitted by this Section 6.3, Lender’s cure period
shall continue for such additional time (the “Extended Cure Period”) as Lender
may reasonably require to either (a) obtain possession and control of Landlord’s
Premises and thereafter cure the breach or default with reasonable diligence and
continuity or (b) obtain the appointment of a receiver and give such receiver a
reasonable period of time in which to cure the default.

 

7.             Confirmation of Facts.

 

Tenant represents to Lender and to any Successor Landlord, in each case as of
the Effective Date:

 

7.1           Effectiveness of Lease.  The Lease is in full force and effect,
has not been modified, and constitutes the entire agreement between Landlord and
Tenant relating to Tenant’s Premises.  Without limiting the foregoing, there are
no oral or written agreements between Landlord and Tenant that would create any
additional obligations of Landlord with respect to the Lease or Tenant’s
Premises, or that would reduce or limit any obligations of Tenant under the
Lease.  Tenant has no interest in Landlord’s Premises, including any right or
option to purchase any portion of Landlord’s Premises or any portion of
Landlord’s interest therein, except as is expressly set forth in the Lease.  No
unfulfilled conditions exist to Tenant’s obligations under the Lease.

 

7.2           Rent.  Tenant has not paid any Rent that is first due and payable
under the Lease after the Effective Date.

 

7.3           No Landlord Default.  To the best of Tenant’s knowledge, no breach
or default by Landlord exists and no event has occurred that, with the giving of
notice, the passage of time or both, would constitute such a breach or default.

 

7.4           No Tenant Default.  Tenant is not in default under the Lease and
has not received any uncured notice of any default by Tenant under the Lease.

 

7.5           No Termination.  Tenant has neither commenced any action nor sent
or received any notice to terminate the Lease.  Tenant has no presently
exercisable Termination Right(s) or Offset Right(s).

 

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7.6           Commencement Date.  The “Commencement Date” of the Lease was
                              .

 

7.7           Acceptance.  Except as set forth below in this Section 7.7:
(a) Tenant has accepted possession of Tenant’s Premises; and (b) Landlord has
performed all Construction-Related Obligations related to Tenant’s initial
occupancy of Tenant’s Premises, and Tenant has accepted such performance by
Landlord.

 

Exception(s) to the foregoing are noted below (if none, so specify):

 

 

7.8           No Transfer.  Tenant has not transferred, encumbered, mortgaged,
assigned, conveyed or otherwise disposed of the Lease or any interest therein,
other than sublease(s) made in compliance with the Lease.

 

7.9           Due Authorization.  Tenant has full authority to enter into this
Agreement, which has been duly authorized by all necessary actions.

 

7.10         Tenant Concessions.  Except as expressly set forth in the Lease,
Tenant has made no agreements with Landlord, and Landlord has made no
commitments to Tenant, for the provision of any Tenant Concessions to or for the
benefit of Tenant or any affiliate of Tenant.

 

7.11         Advice of Counsel.  Tenant has been afforded a full and complete
opportunity to seek and obtain the advice and assistance of legal counsel in
connection with Tenant’s entry into this Agreement, and Tenant has exercised
such opportunity to the extent determined by Tenant to be necessary or
appropriate for the protection of Tenant’s rights and interests.

 

8.             Miscellaneous.

 

8.1           Notices.  All notices or other communications required or
permitted under this Agreement shall be in writing and given by certified mail
(return receipt requested) or by nationally recognized overnight courier service
that regularly maintains records of items delivered.  Each party’s address is as
set forth in the opening paragraph of this Agreement, subject to change by
notice under this Section 8.1.  Notices shall be effective the next business day
after being sent by overnight courier service, and five business days after
being sent by certified mail (return receipt requested).

 

8.2           Successors and Assigns.  This Agreement shall bind and benefit the
parties, their successors and assigns, any Successor Landlord, and its
successors and assigns.  If Lender assigns the Deed of Trust, then upon delivery
to Tenant of written notice thereof accompanied by the assignee’s written
assumption of all obligations under this Agreement, all liability of the
assignor shall terminate.

 

8.3           Entire Agreement.  This Agreement constitutes the entire agreement
between Lender and Tenant regarding the subordination of the Lease to the Deed
of Trust and the rights and obligations of Tenant and Lender as to the subject
matter of this Agreement.

 

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8.4           Interaction with Lease and with Deed of Trust; Severability.  If
this Agreement conflicts with the Lease, then this Agreement shall govern as
between the parties and any Successor Landlord, including upon any attornment
pursuant to this Agreement.  This Agreement supersedes, and constitutes full
compliance with, any provisions in the Lease that provide for subordination of
the Lease to, or for delivery of nondisturbance agreements by the beneficiary
of, the Deed of Trust.  Lender confirms that Lender has consented to Landlord’s
entering into the Lease.  If any provision of this Agreement is determined to be
invalid, illegal or unenforceable, such provision shall be considered severed
from the rest of this Agreement and the remaining provisions shall continue in
full force and effect as if such provision had not been included.

 

8.5           Lender’s Rights and Obligations.  Except as expressly provided for
in this Agreement, Lender shall have no obligations to Tenant with respect to
the Lease.  If an attornment occurs pursuant to this Agreement, then all rights
and obligations of Lender under this Agreement shall terminate, without thereby
affecting in any way the rights and obligations of Successor Landlord provided
for in this Agreement.

 

8.6           Interpretation; Governing Law.  The interpretation, validity and
enforcement of this Agreement shall be governed by and construed under the
internal laws of the State of California, excluding its principles of conflict
of laws.  The words “include” and “including” shall be interpreted as if
followed by the words “without limitation.”

 

8.7           Amendments.  This Agreement may be amended, discharged or
terminated, or any of its provisions waived, only by written instrument executed
by the party to be charged.

 

8.8           Execution.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

 

8.9           Costs and Attorneys’ Fees.  In the event of any claim or dispute
arising out of or in connection with the interpretation or enforcement of this
Agreement, the party that substantially prevails shall be awarded, in addition
to all other relief, all attorneys’ fees and other costs and expenses incurred
in connection with such claim or dispute; including those fees, costs, and
expenses incurred before or after suit, and in any arbitration, and any appeal,
any proceedings under any present or future bankruptcy act or state
receivership, and any post-judgment proceedings.

 

8.10         Lender’s Representation.  Lender represents that Lender has full
authority to enter into this Agreement, and Lender’s entry into this Agreement
has been duly authorized by all necessary actions.

 

IN WITNESS WHEREOF, this Agreement has been duly executed by Lender and Tenant
as of the Effective Date.

 

 

 

LENDER:

 

 

 

 

 

 

,

 

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a                                               

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

TENANT:

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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LANDLORD’S CONSENT

 

Landlord is not a party to the foregoing Agreement, but Landlord consents and
agrees to all of the provisions of the Agreement, including without limitation
the provisions of Section 3.5 thereof, and Landlord shall not take or assert as
against Lender or Tenant any position that would be inconsistent with the
provisions of the Agreement or that would cause the Tenant to be in breach of
the Agreement.  The Agreement was entered into at Landlord’s request.  The
Agreement shall not alter, waive or diminish any of Landlord’s obligations under
the Deed of Trust or the Lease.  The Agreement discharges any obligations of
Lender under the Deed of Trust and related Loan Documents to enter into a
nondisturbance agreement with Tenant.

 

Dated:

 

 

LANDLORD:

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

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Schedule “A”

 

Description of Landlord’s Premises

 

ALL THAT CERTAIN REAL PROPERTY lying, being and situated in the City of Mountain
View, County of Santa Clara, and State of California, more particularly
described as follows:

 

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ACKNOWLEDGMENT

 

 

STATE OF CALIFORNIA                            )

)  ss.

COUNTY OF                                                 )

 

On                                 , before me,
                                                                            ,
personally appeared
                                                                                                        ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

Signature

 

 (Seal)

 

ACKNOWLEDGMENT

 

STATE OF CALIFORNIA                            )

)  ss.

COUNTY OF                                                 )

 

On                                 , before me,
                                                                            ,
personally appeared
                                                                                                        ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

Signature

 

 (Seal)

 

F-13

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ACKNOWLEDGMENT

 

STATE OF CALIFORNIA                            )

)  ss.

COUNTY OF                                                 )

 

On                                 , before me,
                                                                            ,
personally appeared
                                                                                                        ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

Signature

 

 (Seal)

 

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EXHIBIT G

 

LETTER OF CREDIT

 

Irrevocable Standby Letter of Credit Number

 

Issuance Date:                             , 2

 

Applicant:

 

 

Beneficiary:

 

 

Amount:  For                                                and       /100
dollars ($                                  )

 

Date of Expiration:   [ONE YEAR ANNIVERSARY OF LEASE EXPIRATION DATE (INCLUDING
ANY OPTION PERIODS)]                                , 2         (subject to
renewal as provided herein)

 

Place of Expiration:  At our counters

 

Re:

 

 

 

 

(the “Lease”)

 

We,                                            (the “Bank”), with headquarters
at                                                                 ,  hereby
authorize Beneficiary to draw on the Bank for the account of
                                                     up to an aggregate amount
of                                                        and       /100 dollars
($                                  ), available by payment against your
draft(s) at sight drawn on the Bank.  The amount of the draft drawn hereunder
must be endorsed by Beneficiary on the reverse side thereof.  All drafts must
be:

 

1.                                       marked “Drawn under irrevocable Letter
of Credit No.             , dated               , 2         for
                                “; and

 

2.                                       accompanied by a written certification
by either an authorized member/manager/officer of Beneficiary, that Beneficiary
is entitled to draw upon this Letter of Credit as the result of a default by
Applicant under the Lease, which default remained uncured after any applicable
grace or cure period, or as a result of receipt from the Bank of a notice of
non-extension.

 

Presentation of drafts drawn hereunder may be made at any time on or before the
expiry date hereof at our office located at
                                                                                                          .

 

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It is a condition of this letter of credit that it shall be deemed automatically
extended for additional one (1) year periods from the then-current expiry date
unless sixty (60) days prior to such expiry date, we notify you in writing by
registered or certified mail, hand delivery, or courier service to Beneficiary
that we elect not to extend this Letter of Credit for any such additional
periods.  In the event you receive our notice of non-extension, you may draw
under the Letter of Credit by your sight draft

 

Multiple drawings are permitted.  The Bank shall have no right, duty, obligation
or responsibility to evaluate the performance or nonperformance of the
underlying contract between the Applicant and Beneficiary together or
separately.  Any notice to Beneficiary by the Bank in connection with this
Letter of Credit shall be delivered in hand with receipt acknowledged or by
certified mail, or courier service to Beneficiary’s address set forth above or
to such other address as Beneficiary may designate by written notice to the Bank
at the above office.  This undertaking is issued subject to the International
Standby Practices 1998, International Chamber of Commerce Publication No. 590.

 

We hereby agree with you that any draft(s) drawn under and in compliance with
the terms of this Letter of Credit will be duly honored in immediately available
funds upon presentation on or before the expiry date or any automatically
extended expiry date and at the place named herein.  If a demand for payment
does not conform to the terms and conditions of this Letter of Credit, we will
give prompt notice that the demand for payment was not effected in accordance
with the terms and conditions of this Letter of Credit, we will state the
reasons therefor and upon your instructions hold any documents at your disposal
or return the same to you.  Upon being notified that the demand for payment was
not effected in conformity with the terms and conditions of this Letter of
Credit, you may correct any such nonconforming demand for payment to the extent
possible before the expiration date.

 

THIS LETTER OF CREDIT MAY BE TRANSFERRED AT NO COST TO BENEFICIARY (OR A
TRANSFEREE) ONE OR MORE TIMES, BUT ONLY IN ITS ENTIRETY BY THE ISSUING BANK UPON
OUR RECEIPT OF THE ATTACHED EXHIBIT “A” DULY COMPLETED AND EXECUTED BY THE
BENEFICIARY (OR ANY SUCCESSOR BENEFICIARY) AND ACCOMPANIED BY THE ORIGINAL
LETTER OF CREDIT AND ALL AMENDMENT(S), IF ANY.

 

Sincerely,

 

 

 

 

 

 

 

 

 

Name:

 

 

Title:

 

 

 

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EXHIBIT “A”

 

DATE:

 

TO:

 

RE: STANDBY LETTER OF CREDIT

NO.                                 ISSUED BY

ATTN:                                .

STANDBY LETTERS OF CREDIT                       L/C AMOUNT:

 

LADIES/GENTLEMEN:

 

FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:

 

(NAME OF TRANSFEREE)

 

(ADDRESS)

 

ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF
CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF THIS
TRANSFER.

 

BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF
CREDIT ARE TRANSFERRED TO THE TRANSFEREE. TRANSFEREE SHALL HAVE THE SOLE RIGHTS
AS BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS,
WHETHER INCREASES OR EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR
HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECT TO THE TRANSFEREE
WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.

 

THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED HEREWITH, AND WE ASK YOU TO
ENDORSE THE TRANSFER ON THE REVERSE THEREOF, AND FORWARD IT DIRECTLY TO THE
TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF TRANSFER.

 

SINCERELY,

 

 

 

 

 

         (BENEFICIARY’S NAME)

 

 

 

 

 

    SIGNATURE OF BENEFICIARY

 

 

 

 

 

    SIGNATURE AUTHENTICATED

 

 

 

 

 

               (NAME OF BANK)

 

 

 

 

 

         AUTHORIZED SIGNATURE

 

 

G-3

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