Exhibit 10.16

Equity No.                    

OFFICE LEASE

THIS LEASE, made as of April 18, 2007 by and between CREA SPEAR STREET TERRACE
LLC, a Delaware limited liability company (“Landlord”) through its agent
CORNERSTONE REAL ESTATE ADVISERS, LLC, having an address at 100 Wilshire
Boulevard, Suite 700, Santa Monica, California 90401 and MEDIVATION, INC., a
Delaware corporation (“Tenant”) having its principal office at the Premises

INDEX

 

ARTICLE

  

TITLE

    1    BASIC PROVISIONS     2    PREMISES, TERM AND COMMENCEMENT DATE     3   
RENT     4.    TAXES AND OPERATING EXPENSES     5    LANDLORD’S WORK, TENANT’S
WORK, ALTERATIONS AND ADDITIONS     6    USE     7    SERVICES     8.   
INSURANCE     9.    INDEMNIFICATION     10.    CASUALTY DAMAGE     11.   
CONDEMNATION     12.    REPAIR AND MAINTENANCE     13.    INSPECTION OF PREMISES
    14.    SURRENDER OF PREMISES     15.    HOLDING OVER     16.    SUBLETTING
AND ASSIGNMENT     17.    SUBORDINATION, ATTORNMENT AND MORTGAGEE PROTECTION
    18.    ESTOPPEL CERTIFICATE     19.    DEFAULTS     20.    REMEDIES OF
LANDLORD     21.    QUIET ENJOYMENT     22.    ACCORD AND SATISFACTION     23.
   LETTER OF CREDIT     24.    BROKERAGE COMMISSION     25.    FORCE MAJEURE
    26.    PARKING     27.    HAZARDOUS MATERIALS     28.    ADDITIONAL RIGHTS
RESERVED BY LANDLORD     29.    DEFINED TERMS     30.    MISCELLANEOUS
PROVISIONS     31.    RIGHT OF FIRST NEGOTIATION

 

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EXHIBITS

 

Exhibit A    Plan Showing Property and Premises Exhibit B    Tenant Work Letter
Exhibit C    Intentionally Omitted Exhibit D    Building Rules and Regulations
Exhibit E    Commencement Date Confirmation

 

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ARTICLE 1

BASIC PROVISIONS

 

1.1   Tenant’s Tradename:   Medivation, Inc.    1.2   Tenant’s Address:  

201 Spear Street, Suite 300

San Francisco, California 94105

   1.3   Office Building Name:   201 Spear Street, San Francisco    1.4  
Premises:  

Suite/Unit No.: 300

Square feet (Rentable): 16,592

   1.5   Landlord:   CREA Spear Street Terrace LLC    1.6   Landlord’s Address:
 

c/o Cornerstone Real Estate

Advisers, Inc.

100 Wilshire Boulevard, Suite 700

Santa Monica, California 90401

   1.7   Building Manager/Address:  

Wilson Meany Sullivan

201 Spear Street, Suite 300

San Francisco, CA 94105

  

1.8 Commencement Date: The date by which Tenant has occupied the Premises for
purposes of doing business with the Tenant Improvements substantially completed.
Notwithstanding the foregoing, the Commencement Date shall not be before July 1,
2007 or after July 31, 2007. Tenant may, after the execution of this Lease by
Landlord and Tenant and the delivery to Landlord of any evidence of insurance
required to be obtained by Tenant pursuant to this Lease, enter the Premises as
reasonably required for purposes of the design of the Tenant Improvements
pursuant to the Tenant Work Letter attached hereto as Exhibit B and, after
approval by Landlord of the Cost Proposal pursuant to the Tenant Work Letter,
for purposes of installing the Tenant Improvements.

1.9 Expiration Date: The last date of the 60th full calendar month following the
Commencement Date.

1.10 Letter of Credit: $500,000.00.

1.11 Monthly Rent: The Monthly Rent for the Premises shall be payable on a fully
serviced basis during the Lease Term in installments as set forth below:

 

Calendar Months Following Commencement Date

   Annual Rate Per
Rentable Square
Foot (“RSF”)      Monthly
Rent  

1-2

   $ 0       $ 0   

 

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3-12

   $ 37.00       $ 51,158.67   

13-24

   $ 38.00       $ 52,541.33   

25-36

   $ 39.00       $ 53,924.00   

37-48

   $ 40.00       $ 55,306.67   

49-60

   $ 41.00       $ 56,689.33   

1.12 Operating Expenses Base: The amount of Operating Expenses (as defined in
Section 29.11 below) attributed to the 2007 calendar year.

1.13 Tax Base: The amount of Taxes (as defined in Section 29.13 below)
attributed to the 2007 calendar year.

1.14 Tenant’s Pro Rata Share: 6.78%.

1.15 Normal Business Hours of the Building:

Monday through Friday 7:00 a.m. to 6:00 p.m.

(Excepting local and national holidays) Tenant shall have access to the Building
and the Premises 24 hours per day, 365 days per year.

1.16 Brokers: The CAC Group and The Staubach Company.

1.17 Parking: Tenant may lease up to 4 parking spaces in the Building’s surface
parking lot at prevailing rates that are established by Landlord which shall be
payable monthly in advance. Such prevailing rates may be changed from time to
time by Landlord in its sole discretion.

The foregoing provisions shall be interpreted and applied in accordance with the
other provisions of this Lease set forth below. The capitalized terms, and the
terms defined in Article 29, shall have the meanings set forth herein or therein
(unless otherwise modified in the Lease) when used as capitalized terms in other
provisions of the Lease.

Landlord and Tenant hereby stipulate that the Premises contains the number of
square feet specified in Article 1.4 above.

ARTICLE 2

PREMISES, TERM AND COMMENCEMENT DATE

Subject to the terms and conditions set forth herein, Landlord hereby leases and
demises to Tenant and Tenant hereby takes and leases from Landlord that certain
space identified in Article 1 and shown on a plan attached hereto as Exhibit A
(“Premises”) for a term (“Term”) commencing on the Commencement Date and ending
on the Expiration Date set forth in Article 1, unless sooner terminated as
provided herein. The Commencement Date shall be confirmed by execution of the
Commencement Date Confirmation in the form as set forth in Exhibit E, which

 

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Tenant shall execute and return to Landlord within five (5) days after receipt
thereof. If Landlord delays delivering possession of the Premises, this Lease
shall not be void or voidable and Landlord shall have no liability for loss or
damage resulting therefrom.

ARTICLE 3

RENT

3.1 Monthly Rent. Tenant shall pay Monthly Rent in advance on or before the
first day of each month of the Term without demand, setoff or deduction. If the
Term shall commence on a day other than the first day of a month, Tenant shall
pay Monthly Rent for period between the Commencement Date and the first day of
the first calendar month of the Term prorated on a per diem basis based on the
daily amount of Monthly Rent for the first full calendar month for which Monthly
Rent is due. Upon the execution of this Lease, Tenant shall pay one installment
of Monthly Rent which shall be applied to the third full calendar month of the
Term.

3.2 Additional Rent. All costs and expenses which Tenant assumes or agrees to
pay and any other sum payable by Tenant pursuant to this Lease, including,
without limitation, its share of Taxes and Operating Expenses, shall be deemed
Additional Rent.

3.3 Rent. Monthly Rent, Additional Rent, Taxes and Operating Expenses and any
other amounts of every nature which Tenant is or becomes obligated to pay
Landlord under this Lease are herein referred to collectively as “Rent,” and all
remedies applicable to the nonpayment of Rent shall be applicable thereto.
Landlord may apply payments received from Tenant to any obligations of Tenant
then accrued, without regard to such obligations as may be designated by Tenant.

3.4 Place of Payment Late Charge, Default Interest. Rent and other charges
required to be paid under this Lease, no matter how described, shall be paid by
Tenant to Landlord at the Building Manager’s address listed in Article 1, or to
such other person and/or address as Landlord may designate in writing, without
any prior notice or demand therefor and without deduction or set-off or
counterclaim and without relief from any valuation or appraisement laws. In the
event Tenant fails to pay Rent due under this Lease within ten (10) days of the
due date of said Rent, Tenant shall pay to Landlord a late charge of ten percent
(10%) on the amount overdue as and for liquidated damages which are agreed to be
reasonable under the circumstances of this Lease. Any Rent not paid when due
shall also bear interest at the Default Rate.

ARTICLE 4

TAXES AND OPERATING EXPENSES

4.1 Payment of Taxes and Operating Expenses. During each Lease Year, beginning
with the first month of the second Lease Year, and each month thereafter during
the original Lease Term or any extension thereof, Tenant shall pay to Landlord,
as Additional Rent due concurrently with Monthly Rent, an amount equal to
one-twelfth (1/12) of Landlord’s

 

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estimate (as determined by Landlord in its sole discretion) of Tenant’s Pro Rata
Share of any projected increase in the Taxes or Operating Expenses for the
particular Lease Year in excess of the Tax Base or Operating Expenses Base, as
the case may be (the “Estimated Escalation Increase”). A final adjustment
(“Escalation Reconciliation”) shall be made by Landlord and Tenant as soon as
practicable following the end of each Lease Year, but in no event later than
ninety (90) days after the end of each Lease Year. In computing the Estimated
Escalation Increase for any particular Lease Year, Landlord shall take into
account any prior increases in Tenant’s Pro Rata Share of Taxes and Operating
Expenses. If any Estimated Escalation Increase is less than the Estimated
Escalation Increase for the immediately preceding Lease Year, the Additional
Rent payments to be paid by Tenant for the new Lease Year attributable to said
Estimated Escalation Increase shall be decreased accordingly. If Landlord
receives a refund of Taxes due to a tax protest or other such contest for Taxes
paid during any Lease Year in which Tenant paid Additional Rent because of any
increase in Taxes over the Tax Base, Landlord shall refund to Tenant’s Pro Rata
Share of any such refund, not to exceed the Tenant’s Pro Rata Share of
Additional Rent paid by Tenant because of an increase in Taxes over the Tax Base
during such Lease Year. Tenant’s share of the refund shall be distributed to
Tenant within 60 days of Landlord receiving the refund.

As soon as practicable following the end of each Lease Year, Landlord shall
submit to Tenant a statement setting forth the Estimated Escalation Increase, if
any. Beginning with a statement for the second Lease Year, each such statement
shall also set forth the Escalation Reconciliation for the Lease Year just
completed. To the extent that the Operating Expense Escalation is different from
the Estimated Escalation Increase upon which Tenant paid Rent during the Lease
Year just completed, Tenant shall pay Landlord the difference, in cash within
thirty (30) days following receipt by Tenant of such statement from Landlord, or
receive a credit on future Rent owing under this Lease (or cash, if there is no
future Rent owing hereunder), as the case maybe. Until Tenant receives such
statement, Tenant’s Rent for the new Lease Year shall continue to be paid at the
rate being paid for the particular Lease Year just completed, but Tenant shall
commence payment to Landlord of the monthly installment of Additional Rent on
the basis of said statement beginning on the first day of the month following
the month in which Tenant receives such statement. In addition, if, during any
particular Lease Year, there is a change in the information upon which the then
current Estimated Escalation Increase is based so that such Estimated Escalation
Increase furnished to Tenant is no longer accurate, Landlord shall be permitted
to revise such Estimated Escalation Increase by notifying Tenant, and there
shall be such adjustments made in the Additional Rent on the first day of the
month following the serving of such statement on Tenant as shall be necessary by
either increasing or decreasing, as the case may be, the amount of Additional
Rent then being paid by Tenant for the balance of the Lease Year (but in no
event shall any such decrease result in a reduction of the rent below the
Monthly Rent plus all other amounts of Additional Rent). Even though the Term
has expired and Tenant has vacated the Premises, when the final determination is
made of the Escalation Reconciliation for the calendar year in which this Lease
terminates, Tenant shall immediately pay to Landlord within ten (10) days after
Landlord’s delivery of the Escalation Reconciliation to Tenant, any additional
amounts due as calculated pursuant to this Article 4 Landlord’s and Tenant’s
responsibilities with respect to the Tax and Operating Expense adjustments
described herein shall survive the expiration or early termination of this
Lease. If the Building is less than ninety-five percent (95%) occupied during
any particular Lease Year, Landlord may adjust those Operating Expenses which
are affected by Building occupancy for the particular Lease Year, or

 

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portion thereof, as the case may be, to reflect an occupancy of not less than
ninety-five percent (95%) of all such rentable area of the Building.

4.2 Disputes Over Taxes or Operating Expenses. If Tenant disputes the amount of
an adjustment or the proposed estimated increase or decrease in Taxes or
Operating Expenses, Tenant shall give Landlord written notice of such dispute
within thirty (30) days after Landlord advises Tenant of such adjustment or
proposed increase or decrease. Tenant’s failure to give such notice shall waive
its right to dispute the amounts so determined. If Tenant timely objects, Tenant
shall have the right to engage its own accountants (“Tenant’s Accountants”) for
the purpose of verifying the accuracy of the statement in dispute, or the
reasonableness of the adjustment or estimated increase or decrease. If Tenant’s
Accountants determine that an error has been made, Landlord and Tenant’s
Accountants shall endeavor to agree upon the matter, failing which Landlord and
Tenant’s Accountants shall jointly select an independent certified public
accounting firm (the “Independent Accountant”) which firm shall conclusively
determine whether the adjustment or estimated increase or decrease is
reasonable, and if not, what amount is reasonable. Both parties shall be bound
by such determination. If Tenant’s Accountants do not participate in choosing an
Independent Accountant within twenty (20) days after receipt of notice by
Landlord, then Landlord’s determination of the adjustment or estimated increase
or decrease shall be conclusively determined to be reasonable and Tenant shall
be bound thereby. All costs incurred by Tenant in obtaining Tenant’s Accountants
and the cost of the Independent Accountant shall be paid by Tenant unless
Tenant’s Accountants disclose an error, acknowledged by Landlord (or found to
have conclusively occurred by the Independent Accountant), of more than five
percent (5%) in the computation of the total amount of Taxes or Operating
Expenses as set forth in the statement submitted by Landlord with respect to the
matter in dispute; in which event Landlord shall pay the reasonable costs
incurred by Tenant in obtaining such audits. Tenant shall continue to timely pay
Landlord the amount of the prior year’s adjustment and adjusted Additional Rent
determined to be incorrect until the parties have agreed as to the appropriate
adjustment or have deemed to be bound by the determination of the Independent
Accountant in accordance with the preceding terms. Landlord’s delay in
submitting any statement contemplated herein for any Lease Year shall not affect
the provisions of this Paragraph, nor constitute a waiver of Landlord’s rights
as set forth herein for said Lease Year or any subsequent Lease Years during the
Lease Term or any extensions thereof.

4.3 Intentionally Omitted.

4.4 Personal Property Taxes and Additional Taxes. Tenant shall pay, prior to
delinquency, all taxes assessed against or levied upon trade fixtures,
furnishings, equipment and all other personal property of Tenant located in the
Premises. In the event any or all of Tenant’s trade fixtures, furnishings,
equipment and other personal property shall be assessed and taxed with property
of Landlord, or if the cost or value of any leasehold improvements in the
Premises exceeds the cost or value of a Building-standard buildout as determined
by Landlord and, as a result, real property taxes for the Building are
increased, Tenant shall pay to Landlord its share of such taxes within ten
(10) days after delivery to Tenant by Landlord of a statement in writing setting
forth the amount of such taxes applicable to Tenant’s property or above-standard
improvements. Tenant shall assume and pay to Landlord at the time of paying
Rent, any excise, sales, use, rent, occupancy, garage, parking, gross receipts
or other taxes (other than net income taxes) which may be imposed on or on
account of letting of the Premises or the payment of Rent

 

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or any other sums due or payable hereunder, and which Landlord may be required
to pay or collect under any law now in effect or hereafter enacted. Tenant shall
pay directly to the party or entity entitled thereto all business license fees,
gross receipts taxes and similar taxes and impositions which may from time to
time be assessed against or levied upon Tenant, as and when the same become due
and before delinquency. Notwithstanding anything to the contrary contained
herein, any sums payable by Tenant under this Article 4 shall not be included in
the computation of “Taxes”.

ARTICLE 5

TENANT’S WORK, ALTERATIONS AND ADDITIONS

5.1 Tenant’s Work. Tenant shall construct the improvements to the Premises (the
“Tenant Improvements”) in accordance with the work letter attached hereto as
Exhibit B (the “Tenant Work Letter”).

5.2 Intentionally Omitted.

5.3 Alterations. Except as provided in the Tenant Work Letter, Tenant shall make
no alterations or additions to the Premises (“Alterations”) without the prior
written consent of Landlord, which consent may be withheld in Landlord’s sole
discretion, and then only by contractors or mechanics approved by Landlord in
writing and upon the approval by Landlord in writing of fully detailed and
dimensioned plans and specifications pertaining to the Alterations in question,
to be prepared and submitted by Tenant, at its sole cost and expense. Tenant
shall, at its sole cost and expense, obtain all necessary approvals and permits
pertaining to any Alterations approved by Landlord, and Tenant agrees that any
cabling or wiring installed by (or at the direction of) Tenant shall meet the
requirements of all applicable laws, statutes, ordinances, regulations and
codes. If Landlord, in approving any Alterations, specifies a commencement date
therefor, Tenant shall not commence any work with respect to such Alterations
prior to such date. Tenant hereby indemnifies, defends and agrees to hold
Landlord free and harmless from all liens and claims of lien, and all other
liability, claims and demands arising out of any work done or material supplied
to the Premises by or at the request of Tenant in connection with any
Alterations. If permitted Alterations are made, they shall be made at Tenant’s
sole cost and expense and shall be and become the property of Landlord, except
that Landlord may, by written notice to Tenant given at the time Landlord
consents to such Alterations require Tenant, at Tenant’s expense, to remove all
partitions, counters, railings and other Alterations installed by Tenant, and to
repair any damages to the Premises caused by such removal. Upon the expiration
or earlier termination of this Lease, Tenant shall remove all cabling and wiring
installed by (or at the direction of) Tenant during the term of this Lease, and
shall repair any damages to the Premises caused by such removal at Tenant’s sole
cost and expense, unless Landlord delivers written notice to Tenant (given at
least thirty (30) days prior to the end of the Term) requiring Tenant not to
remove such cabling or wiring. In the event Landlord requires Tenant not to
remove any such cabling or wiring, Tenant shall leave such cabling or wiring in
working order and in a good condition, properly labeled. All costs attributable
to or related to the applicable building codes of the city in which the Building
is located (or any other authority having jurisdiction over the Building)
arising from Tenant’s plans, specifications, improvements, alterations or
otherwise shall be paid by Tenant at its sole

 

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cost and expense. With regard to repairs, Alterations or any other work arising
from or related to this Article 5, Landlord shall be entitled to receive an
administrative/supervision fee (which fee shall vary depending upon whether or
not Tenant orders the work directly from Landlord) sufficient to compensate
Landlord for all overhead, general conditions, fees and other costs and expenses
arising from Landlord’s involvement with such work. If Landlord performs any
Alterations on behalf of the Tenant, any administrative or management fees paid
to Landlord associated with the oversight of such work shall not exceed five
percent (5%) of the direct costs of the Alterations. If Tenant performs the
Alterations, any administrative or management fees paid to Landlord shall not
exceed three percent (3%) of the direct costs of the Alterations.

5.4 Liens. Tenant shall give Landlord at least ten (10) days prior written
notice (or such additional time as may be necessary under applicable laws) of
the commencement of any Tenant’s Work, to afford Landlord the opportunity to
post and record notices of nonresponsibility. Tenant will not cause or permit
any mechanic’s, materialman’s or similar liens or encumbrances to be filed or
exist against the Premises or the Building or Tenant’s interest in this Lease in
connection with work done under this Article or in connection with any other
work and Tenant agrees to defend, indemnify and hold harmless Landlord from and
against any such lien or claim or action thereon, together with costs of suit
and reasonable attorney fees incurred by Landlord in connection with any such
claim or action. Tenant shall remove any such lien or encumbrance by bond or
otherwise within twenty (20) days from the date of their existence. If Tenant
fails to do so, Landlord may, without being responsible to investigate the
validity or lawfulness of the lien, pay the amount or take such other action as
Landlord deems necessary to remove any such lien or encumbrance or require that
Tenant deposit with Landlord in cash and lawful money of the United States, one
hundred fifty percent (150%) of the amount of such claim, which sum may be
retained by Landlord until such claim shall have been removed of record or until
judgment shall have been rendered on such claim and such judgment shall have
become final, at which time Landlord shall have the right to apply such deposit
in discharge of the judgment on said claim and any costs, including attorney
fees incurred by Landlord, and shall remit the balance thereof to Tenant. The
amounts so paid and costs incurred by Landlord shall be deemed Additional Rent
under this Lease and payable in full upon demand.

5.5 Compliance with ADA. Notwithstanding anything to the contrary contained in
this Lease, Landlord and Tenant agree that responsibility for compliance with
the Americans With Disabilities Act of 1990 (the “ADA”) shall be allocated as
follows: (i) Landlord shall be responsible for compliance with the provisions of
Title III of the ADA for all Common Areas, including exterior and interior areas
of the Building not included within the Premises or the premises of other
tenants and the Common Area restrooms and elevator lobbies on the third floor of
the Building; (ii) Landlord shall be responsible for compliance with the
provisions of Title III of the ADA for any construction, renovations,
alterations and repairs made within the Premises if such construction,
renovations, alterations or repairs are made by Landlord for the purpose of
improving the Building generally or are done as Landlord’s Work and the plans
and specifications for the Landlord’s Work were prepared by Landlord’s architect
or space planner and were not provided by Tenant’s architect or space planner;
(iii) Tenant shall be responsible for compliance with the provisions of Title
III of the ADA for any construction, renovations, alterations and repairs made
within the Premises if such construction, renovations, alterations and repairs
are made by Tenant, its employees, agents or contractors, at the direction of
Tenant

 

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or done pursuant to plans and specifications (excluding Common Area restrooms
and elevator lobby) prepared or provided by Tenant or Tenant’s architect or
space planner.

ARTICLE 6

USE

6.1 Use. Tenant shall use the Premises for general office purposes, and for no
other purpose whatsoever, subject to and in compliance with all other provisions
of this Lease, including without limitation the Building’s Rules and Regulations
attached as Exhibit D hereto Tenant and its invitees shall also have the
nonexclusive right, along with other tenants of the Building and others
authorized by Landlord, to use the Common Areas subject to such rules and
regulations as Landlord may impose from time to time in its sole discretion.
Notwithstanding the foregoing, Tenant shall not use the Premises for a call
center or similar use with an unusually high density of occupants.

6.2 Restrictions. Tenant shall not at any time use or occupy, or suffer or
permit anyone to use or occupy, the Premises or do or permit anything to be done
in the Premises which: (a) causes or is liable to cause injury to persons, to
the Building or its equipment, facilities or systems; (b) impairs or tends to
impair the character, reputation or appearance of the Building as a first class
office building; (c) impairs or tends to impair the proper and economic
maintenance, operation and repair of the Building or its equipment, facilities
or systems; (d) annoys or inconveniences or tends to annoy or inconvenience or
interfere with the use of other tenants or occupants of the Building; or
(e) would invalidate or increase the cost of any fire and extended coverage
insurance policy covering the Building and/or the property located therein.
Tenant shall comply with all rules, orders, regulations and requirements of any
organization which sets out standards, requirements or recommendations commonly
referred to by major fire insurance underwriters. Tenant shall promptly, upon
demand, reimburse Landlord for any additional premium charges for any such
insurance policy assessed or increased by reason of Tenant’s failure to comply
with the provisions of this Article.

6.3 Compliance with Laws. Tenant shall, at Tenant’s sole cost and expense, keep
and maintain the Premises, its use thereof and its business in compliance with
all governmental laws, ordinances, rules and regulations now in force or which
may hereafter be in force or effect. Tenant shall comply with all Laws relating
to the Premises and Tenant’s use or occupancy thereof, including without
limitation, Laws requiring the Premises to be closed on Sundays or any other
days or hours and Laws in connection with the health, safety and building codes,
and any permit or license requirements. Landlord makes no representation or
warranty that the Premises are suitable for Tenant’s purposes

ARTICLE 7

SERVICES

7.1 Climate Control. Landlord shall furnish heat or air conditioning to the
Premises during Normal Business Hours of the Building as set forth in Article 1,
as required in Landlord’s reasonable judgment for the comfortable use and
occupancy of the Premises. If Tenant requires

 

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heat or air conditioning at any other time, Landlord shall use reasonable
efforts to furnish such service upon reasonable notice from Tenant, and Tenant
shall pay all of Landlord’s charges therefor on demand as Additional Rent.

The performance by Landlord of its obligations under this Article is subject to
Tenant’s compliance with the terms of this Lease including any connected
electrical load established by Landlord Tenant shall not use the Premises or any
part thereof in a manner exceeding the heating, ventilating or air-conditioning
(“HVAC”) design conditions (including any occupancy or connected electrical load
conditions), including the rearrangement of partitioning which may interfere
with the normal operation of the HVAC equipment, or the use of computer or data
processing machines or other machines or equipment in excess of that normally
required for a standard office use of the Premises. If any such use requires
changes in the HVAC or plumbing systems or controls servicing the Premises or
portions thereof in order to provide comfortable occupancy, such changes may be
made by Landlord at Tenant’s expense and Tenant agrees to promptly pay any such
amount to Landlord as Additional Rent.

7.2 Elevator Service. If the Building is equipped with elevators, Landlord,
during Normal Business Hours of the Building, shall furnish elevator service to
Tenant to be used in common with others. At least one elevator shall remain in
service during all other hours. Landlord may designate a specific elevator for
use as a service elevator.

7.3 Janitorial Services. Landlord shall provide janitorial and cleaning services
to the Premises that are comparable to such services provided in office
buildings comparable in location and quality to the. Building Tenant shall pay
to Landlord on demand the reasonable costs incurred by Landlord for (i) any
cleaning of the Premises in excess of Landlord’s standard services for any
reason, including, without limitation, cleaning required because of (A) misuse
or neglect on the part of Tenant or Tenant’s agents, contractors, invitees,
employees and customers, (B) the use of portions of the Premises for special
purposes requiring greater or more difficult cleaning work than office areas,
(C) interior glass partitions or unusual quantities of interior glass surfaces,
and (D) non-Building standard materials or finishes installed by Tenant or at
its request; and (ii) removal from the Premises of any refuse and rubbish of
Tenant in excess of that ordinarily accumulated in general office occupancy or
at times other than Landlord’s standard cleaning times.

7.4 Water and Electricity. Landlord shall make available domestic water in
reasonable quantities to the common areas of the Building (and to the Premises
if so designated in Exhibit B) and cause electric service sufficient for
lighting the Premises and for the operation of Ordinary Office Equipment.
“Ordinary Office Equipment” shall mean office equipment wired for 120 volt
electric service and rated and using less than 6 amperes or 750 watts of
electric current or other office equipment approved by Landlord in writing.
Landlord shall have the exclusive right to make any replacement of lamps,
fluorescent tubes and lamp ballasts in the Premises. Landlord may adopt a system
of relamping and ballast replacement periodically on a group basis, the costs of
which shall be included in Operating Expenses. Tenant’s use of electric energy
or water in the Premises shall not at any time exceed the capacity of any of the
risers, piping, electrical conductors and other equipment in or serving the
Premises. In order to insure that such capacity is not exceeded and to avert any
possible adverse effect upon the Building’s electric system, Tenant shall not,
without Landlord’s prior written consent in each instance,

 

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connect appliances or heavy duty equipment, other than Ordinary Office
Equipment, to the Building’s electric system or make any alteration or addition
to the Building’s electric system. Should Landlord grant its consent in writing,
which Landlord may refuse in its sole and absolute discretion, all additional
risers, piping and electrical conductors or other equipment therefor shall be
provided by Landlord and the cost thereof shall be paid by Tenant within ten
(10) days of Landlord’s demand therefor. As a condition to granting such
consent, Landlord may require Tenant to agree to an increase in Monthly Rent to
offset the expected cost to Landlord of such additional service, that is, the
cost of the additional electric energy to be made available to Tenant based upon
the estimated additional capacity of such additional risers, piping and
electrical conductors or other equipment. If Landlord and Tenant cannot agree
thereon, such cost shall be determined by an independent electrical engineer, to
be selected by Landlord and paid equally by both parties

7.5 Separate Meters. If the Premises are separately metered for any utility,
Tenant shall pay a utility charge to Landlord (or directly to the utility
company, if possible) based upon Tenant’s actual consumption as measured by the
meter to the extent such charge exceeds the amount included in the Operating
Expense Base. Landlord also reserves the right to install separate meters for
the Premises to register the usage of all or any one of the utilities and in
such event Tenant shall pay for the cost of utility usage as metered to the
Premises and which is in excess of the usage reasonably anticipated by Landlord
for normal office usage of the Premises. Tenant shall immediately reimburse
Landlord for the cost of installation of meters, and the maintenance and repair
thereof, if Tenant’s actual usage exceeds the anticipated usage level by more
than ten percent (10%). In any event, Landlord may require Tenant to reduce its
consumption to the anticipated usage level. The term “utility” for purposes
hereof may refer to but is not limited to electricity, gas, water, sewer, steam,
fire protection system, telephone or other communication or alarm service, as
well as HVAC, and all taxes or other charges thereon

7.6 Interruptions. Landlord does not represent or warrant that any of the
services referred to above, or any other services which Landlord may supply,
will be free from interruption and Tenant acknowledges that any one or more of
such services may be suspended by reason of accident, repairs, inspections,
alterations or improvements necessary to be made, or by strikes or lockouts, or
by reason of operation of law, or causes beyond the reasonable control of
Landlord Any interruption, reduction or discontinuance of service shall not be
deemed an eviction or disturbance of Tenant’s use and possession of the
Premises, or any part thereof, nor render Landlord liable to Tenant for damages
by abatement of Rent or otherwise, nor relieve Tenant from performance of
Tenant’s obligations under this Lease. Landlord shall however, exercise
reasonable diligence to restore any service so interrupted. Notwithstanding any
contrary provision of this Lease, if Tenant is prevented from using all or any
portion of the Premises for the conduct of business as a result of an “Abatement
Event” which means any failure by Landlord to provide any utility or service
required to be provided by Landlord where the means for providing such utility
or service is in Landlord’s direct control (as contrasted with a utility
provider’s failure to provide utilities), and the Abatement Event continues for
a period of five (5) consecutive business days after Tenant gives written notice
thereof to Landlord (“Eligibility Period”), then Tenant’s rent shall be reduced
after the expiration of the Eligibility Period, for such time that Tenant
continues to be so prevented from using such portion of the Premises in the
proportion that the square footage of the portion of the Premises which Tenant
is prevented from using, and does not use, bears to the total square footage of
the Premises.

 

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7.7 Utilities Provided by Tenant. Tenant shall make application in Tenant’s own
name for all utilities not provided by Landlord and shall: (i) comply with all
utility company regulations for such utilities, including requirements for the
installation of meters, and (ii) obtain such utilities directly from, and pay
for the same when due directly to, the applicable utility company. The term
“utilities” for purposes hereof shall include but not be limited to electricity,
gas, water, sewer, steam, fire protection, telephone and other communication and
alarm services, as well as HVAC, and all taxes or other charges thereon. Tenant
shall install and connect all equipment and lines required to supply such
utilities to the extent not already available at or serving the Premises, or at
Landlord’s option shall repair, alter or replace any such existing items. Tenant
shall maintain, repair and replace all such items, operate the same, and keep
the same in good working order and condition. Tenant shall not install any
equipment or fixtures, or use the same, so as to exceed the safe and lawful
capacity of any utility equipment or lines serving the same. The installation,
alteration, replacement or connection of any utility equipment and lines shall
be subject to the requirements for alterations of the Premises set forth in
Article 5. Tenant shall ensure that all Tenant’s HVAC equipment is installed and
operated at all times in a manner to prevent roof leaks, damage, or noise due to
vibrations or improper installation, maintenance or operation. Except as
specifically provided in this Article 7, Tenant agrees to pay for all utilities
and other services utilized by Tenant and additional Building services furnished
to Tenant not uniformly furnished to all tenants of the Building at the rate
generally charged by Landlord to other tenants of the Building. Tenant shall not
be charged a fee for its reasonable use of any Building risers for cabling or
for its placement of mechanical in the Common Areas designated by Landlord for
placement of mechanical equipment; provided that the plans and locations of such
cabling and equipment are approved by Landlord which approval shall not be
unreasonably withheld, conditioned or delayed.

7.8 Additional Usage. If any lights, machines or equipment (including but not
limited to computers) are used by Tenant in the Premises which materially affect
the temperature otherwise maintained by the air conditioning system, or generate
substantially more heat in the Premises than would be generated by the building
standard lights and Ordinary Office Equipment, Landlord shall have the right to
install any machinery and equipment which Landlord reasonably deems necessary to
restore temperature balance, including but not limited to modifications to the
standard air conditioning equipment, and the cost thereof, including the cost of
installation and any additional cost of operation and maintenance occasioned
thereby, shall be paid by Tenant to Landlord upon demand by Landlord. Landlord
shall not be liable under any circumstances for loss of or injury to property,
however occurring, through or in connection with or incidental to failure to
furnish any of the foregoing.

ARTICLE 8

INSURANCE

8.1 Required Insurance. Tenant shall, at all times during the Term of this
Lease, and at its own cost and expense, maintain insurance policies, with
responsible companies licensed to do business in the state where the Building is
located and satisfactory to Landlord, naming Landlord, Landlord’s Building
Manager, Cornerstone Real Estate Advisers, LLC, Tenant and any Mortgagee of
Landlord, as their respective interests may appear, including (i) a policy of
standard fire, extended coverage and special extended coverage (“all risk”)
property insurance

 

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which shall be primary on the lease improvements referenced in Article 5 and
Tenant’s property, including its goods, equipment and inventory, in an amount
adequate to cover their replacement cost, including a vandalism and malicious
mischief endorsement, and sprinkler leakage coverage; (ii) business interruption
insurance, loss of income and extra expense insurance covering the failure of
Tenant’s telecommunications equipment and all other perils, failures or
interruptions, (iii) comprehensive general liability insurance on an occurrence
basis with limits of liability in an amount not less than Two Million Dollars
($2,000,000) combined single limit for each occurrence, and Three Million
Dollars ($3,000,000) in the annual aggregate, (iv) Worker’s Compensation
Coverage as required by law. The comprehensive general liability policy shall
include contractual liability which includes the provisions of Article 9 herein.

On or before the Commencement Date, Tenant shall furnish to Landlord and its
Building Manager, certificates of insurance evidencing the insurance coverage
set forth above, including naming Landlord, Cornerstone Real Estate Advisers,
LLC and Landlord’s Building Manager as additional insureds. The certificate
holder under such certificates of insurance shall be Landlord in care of
Landlord’s Building Manager at the address set forth in Article 1.7 above.
Renewal certificates must be furnished to Landlord at least thirty (30) days
prior to the expiration date of such insurance policies showing the above
coverage to be in full force and effect.

The foregoing policy minimum limits of liability and Tenant’s procurement and
maintenance thereof shall in no event limit the liability of Tenant under this
Lease. All such insurance policies carried by Tenant shall be with companies
having a rating of not less than A-VIII in Best’s Insurance Guide. All such
policies shall be endorsed to agree that Tenant’s policy is primary and that any
insurance covered by Landlord is excess and not contributing with any Tenant
insurance requirement hereunder. Tenant agrees that if Tenant does not take out
and maintain such insurance or furnish Landlord with renewals or binders,
Landlord may (but shall not be required to) procure said insurance on Tenant’s
behalf and charge Tenant the cost thereof, which amount shall be payable by
Tenant upon demand with interest from the date such sums are extended. All such
insurance shall provide that it cannot be canceled except upon thirty (30) days
prior written notice to Landlord. Tenant shall comply with all rules and
directives of any insurance board, company or agency determining rates of hazard
coverage for the Premises, including but not limited to the installation of any
equipment and/or the correction of any condition necessary to prevent any
increase in such rates.

8.2 Waiver of Subrogation. Landlord and Tenant each agree that neither Landlord
nor Tenant will have any claim against the other for any loss, damage or injury
which is covered by insurance carried by either party and for which recovery
from such insurer is made, notwithstanding the negligence of either party in
causing the loss, and each agree to have their respective insurers issuing the
insurance described in this Article 8 waive any rights of subrogation that such
companies may have against the other party. This release shall be valid only if
the insurance policy in question permits waiver of subrogation or if the insurer
agrees in writing that such waiver of subrogation will not affect coverage under
said policy. Each party agrees to use commercially reasonable efforts to obtain
such an agreement from its insurer if the policy does not expressly permit a
waiver of subrogation.

8.3 Waiver of Claims. Except for claims arising from Landlord’s willful
misconduct that are not covered by Tenant’s insurance required hereunder, Tenant
waives all claims against

 

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Landlord for injury or death to persons, damage to property or to any other
interest of Tenant sustained by Tenant or any party claiming, through Tenant
resulting from: (i) any occurrence in or upon the Premises, (ii) leaking of
roofs, bursting, stoppage or leaking of water, gas, sewer or steam pipes or
equipment, including sprinklers, (iii) wind, rain, snow, ice, flooding,
freezing, fire, explosion, earthquake, excessive heat or cold, or other
casualty, (iv) the Building, Premises, or the operating and mechanical systems
or equipment of the Building, being defective, or failing, and (v) vandalism,
malicious mischief, theft or other acts or omissions of any other parties
including, without limitation, other tenants, contractors and invitees at the
Building Tenant agrees that Tenant’s property loss risks shall be borne by its
insurance, and Tenant agrees to look solely to and seek recovery only from its
insurance carriers in the event of such losses. For purposes hereof, any
deductible amount shall be treated as though it were recoverable under such
policies.

ARTICLE 9

INDEMNIFICATION

Tenant shall indemnify and hold harmless Landlord and its agents, successors and
assigns, including its Building Manager, from and against any and all injury,
loss, costs, expenses, liabilities, claims or damage (including attorney fees
and disbursements) to any person or property arising from, related to, or in
connection with any use or occupancy of the Premises by or any act or omission
(including, without limitation, construction and repair of the Premises arising
out of Tenant’s Work or subsequent work) of Tenant, its agents, contractors,
employees, customers, and invitees, which indemnity extends to any and all
claims arising from any breach or default in the performance of any obligation
on Tenant’s part to be performed under the terms of this Lease. This
indemnification shall survive the expiration or termination of the Lease Term.
Tenant hereby assumes all risk of damage to property or injury to persons in or
about the Premises from any cause, and Tenant hereby waives all claims in
respect thereof against Landlord, unless due to the Landlord’s gross negligence
or willful misconduct.

Landlord shall not be liable to Tenant for any damage by or from any act or
negligence of any co-tenant or other occupant of the Building, or by any owner
or occupants of adjoining or contiguous property. Landlord shall not be liable
for any injury or damage to persons or property resulting in whole or in part
from the criminal activities or willful misconduct of others. To the extent not
covered by all risk property insurance, Tenant agrees to pay for all damage to
the Building, as well as all damage to persons or property of other tenants or
occupants thereof, caused by the negligence, fraud or willful misconduct of
Tenant or any of its agents, contractors, employees, customers and invitees.
Nothing contained herein shall be construed to relieve Landlord from liability
for any personal injury resulting from its gross negligence, fraud or willful
misconduct.

Tenant acknowledges that Landlord’s election to provide mechanical surveillance
or to post security personnel in the Building is subject to Landlord’s sole
discretion. Landlord shall have no liability in connection with the decision
whether or not to provide such services and Tenant hereby waives all claims
based thereon. Landlord shall not be liable for losses due to theft, vandalism,
or like causes. Tenant shall defend, indemnify, and hold Landlord harmless from
any such claims made by any employee, licensee, invitee, contractor, agent or,
other person

 

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whose presence in, on or about the Premises or the Building is attendant to the
business of Tenant.

ARTICLE 10

CASUALTY DAMAGE

Tenant shall promptly notify Landlord or the Building Manager of any fire or
other casualty to the Premises or to the extent it knows of damage, to the
Building. In the event the Premises or any substantial part of the Building is
wholly or partially damaged or destroyed by fire or other casualty which is
covered by Landlord’s insurance, then Landlord will proceed to restore the same
to substantially the same condition existing immediately prior to such damage or
destruction unless such damage or destruction is incapable of repair or
restoration within one hundred eighty (180) days, in which event Landlord may,
at Landlord’s option and by written notice given to Tenant within sixty
(60) days of such damage or destruction, declare this Lease terminated as of the
happening of such damage or destruction. If, in Landlord’s sole opinion, the net
insurance proceeds recoverable by reason of the damage or destruction will not
be adequate to complete the restoration of the Building, Landlord shall have the
right to terminate this Lease and all unaccrued obligations of the parties
hereto by sending a notice of such termination to Tenant. To the extent after
fire or other casualty that Tenant shall be deprived of the use and occupancy of
the Premises or any portion thereof as a result of any such damage, destruction
or the repair thereof, providing Tenant did not cause the fire or other
casualty, Tenant shall be relieved of the same ratable portion of the Monthly
Rent due under this Lease as the amount of damaged or useless space in the
Premises bears to the rentable square footage of the Premises until such time as
the Premises may be restored. Landlord shall reasonably determine the amount of
damaged or useless space and the square footage of the Premises referenced in
the prior sentence. If the Premises is substantially damaged by fire or other
casualty within the last 12 months of the Term and it is reasonably determined
by Landlord that the Premises cannot be restored within 120 days from the date
the damage occurred, Tenant shall have the right to terminate this Lease
effective 60 days after the delivery of written notice of termination to
Landlord.

ARTICLE 11

CONDEMNATION

In the event of a condemnation or taking of the entire Premises by a public or
quasi-public authority, this Lease shall terminate as of the date title vests in
the public or quasi-public authority. In the event of a taking or condemnation
of fifteen percent (15%) or more (but less than the whole) of the Building and
without regard to whether the Premises are part of such taking or condemnation,
Landlord may elect to terminate this Lease by giving notice to Tenant within
sixty (60) days of Landlord receiving notice of such condemnation. In the event
of a partial taking as described in this Article, or a sale, transfer or
conveyance in lieu thereof, which does not result in the termination of this
Lease, Rent shall be apportioned according to the ratio that the part of the
Premises remaining usable by Tenant bears to the total area of the Premises. All
compensation awarded for any condemnation shall be the property of Landlord,
whether such damages shall be awarded as a compensation for diminution in the
value of the leasehold or to

 

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the fee of the Premises, and Tenant hereby assigns to Landlord all of Tenant’s
right, title and interest in and to any and all such compensation. Providing,
however that in the event this Lease is terminated, Tenant shall be entitled to
make a separate claim for the taking of Tenant’s personal property (including
fixtures paid for by Tenant), and for costs of moving. Notwithstanding anything
herein to the contrary, any condemnation award to Tenant shall be available only
to the extent such award is payable separately to Tenant and does not diminish
the award available to Landlord or any Lender of Landlord and such award shall
be limited to the amount of Rent actually paid by Tenant to Landlord for the
period of time for which the award is given. Any additional portion of such
award shall belong to Landlord. Tenant hereby waives any and all rights, imposed
by law, statute, ordinance, governmental regulation or requirement of the United
States, the State in which the Building is located or any local government
authority or agency or any political subdivision thereof, now or hereafter in
effect, it might otherwise have to petition a court to terminate the Lease.

ARTICLE 12

REPAIR AND MAINTENANCE

12.1 Tenant’s Obligations. Tenant shall keep the Premises in good working order,
repair (and in compliance with all Laws now or hereafter adopted) and condition
(which condition shall be neat, clean and sanitary, and free of pests and
rodents) and shall make all necessary nonstructural repairs thereto and any
repairs to non-Building standard mechanical, HVAC, electrical and plumbing
systems or components in or serving the Premises except that Tenant shall not be
obligated to maintain or repair any components (other than HVAC heat pumps which
are Tenant’s responsibility) located above the dropped ceiling in the Premises.
Tenant’s obligations hereunder shall include, but not be limited to, Tenant’s
trade fixtures and equipment, security systems, signs, interior decorations,
floor-coverings, wall-coverings, entry and interior doors, interior glass, light
fixtures and bulbs, keys and locks, and alterations to the Premises whether
installed by Tenant or Landlord. Landlord may make any repairs which are not
promptly made by Tenant after Tenant’s receipt of written notice and the
reasonable opportunity of Tenant to make said repair within five (5) business
days from receipt of said written notice, and charge Tenant for the cost
thereof, which cost shall be paid by Tenant within five (5) days from invoice
from Landlord. Tenant waives all rights to make repairs at the expense of
Landlord, or to deduct the cost thereof from Rent.

12.2 Landlord’s Obligations. Landlord shall make all necessary structural
repairs to the Building and any necessary repairs to the Building standard
mechanical, HVAC, electrical, and plumbing systems in or servicing the Premises
(the cost of which shall be included in Operating Expenses under Article 4),
excluding repairs required to be made by Tenant pursuant to this Article.
Landlord shall have no responsibility to make any repairs unless and until
Landlord receives written notice of the need for such repair and in the case of
an emergency, Landlord shall respond promptly after receipt of Notice. Landlord
shall not be liable for any failure to make repairs or to perform any
maintenance unless such failure shall persist for an unreasonable period of time
after written notice of the need for such repairs or maintenance is received by
Landlord from Tenant. Landlord shall make every reasonable effort to perform all
such repairs or maintenance in such a manner (in its judgment) so as to cause
minimum interference with Tenant and the Premises but Landlord shall not be
liable to Tenant for any

 

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interruption or loss of business pertaining to such activities. Landlord shall
have the right to require that any damage caused by the willful misconduct of
Tenant or any of Tenant’s agents, contractors, employees, invitees or customers,
be paid for and performed by Tenant (without limiting Landlord’s other remedies
herein)

12.3 Signs and Obstructions. Tenant shall not obstruct or permit the obstruction
of light, halls, Common Areas, roofs, parapets, stairways or entrances to the
Building or the Premises and will not affix, paint, erect or inscribe any sign,
projection, awning, signal or advertisement of any kind to any part of the
Building or the Premises, including the inside or outside of the windows or
doors, without the written consent of Landlord. Landlord shall have the right to
withdraw such consent at any time and to require Tenant to remove any sign,
projection, awning, signal or advertisement to be affixed to the Building or the
Premises. If such work is done by Tenant through any person, firm or corporation
not designated by Landlord, or without the express written consent of Landlord,
Landlord shall have the right to remove such signs, projections, awnings,
signals or advertisements without being liable to Tenant by reason thereof and
to charge the cost of such removal to Tenant as Additional Rent, payable within
ten (10) days of Landlord’s demand therefor.

12.4 Outside Services. Tenant shall not permit, except by Landlord or a person
or company reasonably satisfactory to and approved by Landlord: (i) the
extermination of vermin in, on or about the Premises; (ii) the servicing of
heating, ventilating and air conditioning equipment; (iii) the collection of
rubbish and trash other than in compliance with local government health
requirements and in accordance with the rules and regulations established by
Landlord, which shall minimally provide that Tenant’s rubbish and trash shall be
kept in containers located so as not to be visible to members of the public and
in a sanitary and neat condition; or (iv) window cleaning, janitorial services
or similar work in the Premises.

12.5 Condition of Premises. **[Note that Landlord has the obligation to repair
the mechanical systems serving the Building and that the costs of such repairs
are not ordinarily included in Operating Expenses if they are capital
expenditures].** Tenant hereby agrees that the Premises shall be taken “as is,”
“with all faults,” “without any representations or warranties” Tenant hereby
acknowledges and agrees that it has investigated and inspected the condition of
the Premises and the suitability of same for Tenant’s purposes. Tenant
acknowledges that there are no abandoned wires or cables within the Premises.
Tenant does hereby waive and disclaim any objection to, cause of action based
upon, or claim that its obligations hereunder should be reduced or limited
because of the condition of the Premises or the Building or the suitability of
same for Tenant’s purposes. Tenant acknowledges that neither Landlord nor any
agent nor any employee of Landlord has made any representation or warranty with
respect to the Premises or the Building or with respect to the suitability of
either for the conduct of Tenant’s business and Tenant expressly represents and
warrants that Tenant has relied solely on its own investigation and inspection
of the Premises and the Building in its decision to enter into this Lease and
let the Premises in an “As Is” condition. The Premises shall be initially
improved as provided in, and subject to, the Tenant Work Letter attached hereto
as Exhibit B and made a part hereof. The taking of possession of the Premises by
Tenant shall conclusively establish that the Premises and the Building were at
such time in satisfactory condition. Tenant hereby waives any obligation,
imposed by a law, statute, ordinance, governmental regulation or requirement of
the United States, the State in which the Building is located or any local
government authority or agency or

 

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any political subdivision thereof, now or hereafter in effect, requiring
Landlord to alter the Premises or the Building to conform to any specified
condition and to repair any subsequent deterioration, thereof, which render it
unacceptable by such governing body. If such deterioration is repaired by
Tenant, Tenant may not deduct the expenses of such repairs from Rent when due
and Tenant has no right to vacate the Premises and be discharged from further
payment of Rent, if such repairs are not made by Landlord.

Landlord reserves the right from time to time, but subject to payment by and/or
reimbursement from Tenant as otherwise provided herein: (i) to install, use,
maintain, repair, replace and relocate for service to the Premises and/or other
parts of the Building pipes, ducts, conduits, wires, appurtenant fixtures, and
mechanical systems, wherever located in the Premises or the Building, (ii) to
alter, close or relocate any facility in the Premises or the Common Areas or
otherwise conduct any of the above activities for the purpose of complying with
a general plan for fire/life safety for the Building or otherwise and (iii) to
comply with any federal, state or local law, rule or order with respect thereto
or the regulation thereof not currently in effect. Landlord shall attempt to
perform any such work with the least inconvenience to Tenant as possible, but in
no event shall Tenant be permitted to withhold or reduce Rent or other charges
due hereunder as a result of same or otherwise make claim against Landlord for
interruption or interference with Tenant’s business and/or operations.

ARTICLE 13

INSPECTION OF PREMISES

Tenant shall permit Landlord, the Building Manager and its authorized
representatives to enter the Premises to show the Premises during Normal
Business Hours of the Building and at other reasonable times, in the case of an
emergency or to inspect the Premises, to clean the Premises, to serve or post
notices as provided by law or which Landlord deems necessary for the protection
of Landlord or Landlord’s property, and to make such repairs, improvements,
alterations or additions in the Premises or in the Building of which they are a
part as Landlord may deem necessary or appropriate. If Tenant shall not be
personally present to open and permit an entry into the Premises at any time
when such an entry is necessary or permitted hereunder, Landlord may enter by
means of a master key or may enter forcibly, only in the case of an emergency,
without liability to Tenant and without affecting this Lease.

ARTICLE 14

SURRENDER OF PREMISES

Upon the expiration of the Term, or sooner termination of the Lease, Tenant
shall quit and surrender to Landlord the Premises, broom clean, in good order
and condition, normal wear and tear and damage by fire and other casualty which
are Landlord’s obligation excepted. Subject to Landlord’s right to require
Tenant to remove certain alterations as provided in Section 5.3, all Tenant
Improvements and other fixtures, such as light fixtures and HVAC equipment, wall
coverings, carpeting and drapes, in or serving the Premises, whether installed
by Tenant or Landlord, shall be Landlord’s property and shall remain, all
without compensation, allowance or credit to Tenant. Any property not removed
shall be deemed to have been abandoned by Tenant

 

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and may be retained or disposed of by Landlord at Tenant’s expense free of any
and all claims of Tenant, as Landlord shall desire. All property not removed
from the Premises by Tenant may be handled or stored by Landlord at Tenant’s
expense and Landlord shall not be liable for the value, preservation or
safekeeping thereof. At Landlord’s option all or part of such property may be
conclusively deemed to have been conveyed by Tenant to Landlord as if by bill of
sale without payment by Landlord. Tenant hereby waives, to the maximum extent
allowable, the benefit of all laws now or hereafter in force in this state or
elsewhere exempting property from liability for rent or for debt.

ARTICLE 15

HOLDING OVER

Should Tenant, without Landlord’s written consent, hold over after termination
of this Lease, Tenant shall become a tenant from month-to-month, only upon each
and all of the terms herein provided as may be applicable to a month-to-month
tenancy and any such holding over shall not constitute an extension of this
Lease. Tenant shall pay Landlord, monthly and in advance, 200% of the amount of
Rent then applicable, prorated on a per diem basis, for each day Tenant shall
retain possession of the Premises or any part thereof after expiration or
earlier termination of this Lease, together with all damages sustained by
Landlord on account thereof and all other payments required to be made by Tenant
hereunder. The foregoing provisions shall not serve as permission for Tenant to
hold-over, nor serve to extend the Term (although Tenant shall remain bound to
comply with all provisions of this Lease until Tenant vacates the Premises) and
Landlord shall have the right at any time thereafter to enter and possess the
Premises and remove all property and persons therefrom or to require Tenant to
surrender possession of the Premises as provided in this Lease upon the
expiration or earlier termination of the Term. If Tenant fails to surrender the
Premises upon the expiration or termination of this Lease, Tenant agrees to
indemnify, defend and hold harmless Landlord from all costs, loss, expense or
liability, including without limitation, claims made by any succeeding tenant
and real estate brokers’ claims and attorney fees.

ARTICLE 16

SUBLETTING AND ASSIGNMENT

16.1 Landlord’s Consent Required. Tenant shall not, without the prior written
consent of Landlord which shall not be unreasonably withheld, conditioned or
delayed, list the Premises or any part thereof as available for assignment or
sublease with any broker or agent or otherwise advertise, post, communicate or
solicit prospective assignees or subtenants through any direct or indirect
means, nor assign this Lease or any interest thereunder, or sublet Premises or
any part thereof, or permit the use of Premises by any party other than Tenant.
If Tenant is a corporation, unincorporated association, partnership or limited
liability company, the sale, assignment, transfer or hypothecation of any class
of stock or other ownership interest in such corporation, association,
partnership or limited liability company in excess of fifty-one percent (51%) in
the aggregate shall be deemed an assignment within the meaning of this Article
16. In the event that during the term of this Lease, Tenant desires to assign or
sublease all or any portion of this Lease and introduces Landlord to a proposed
replacement tenant for Tenant,

 

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which replacement tenant has a good reputation, is of financial strength at
least equal to that of Tenant (as determined by Landlord in its sole discretion)
and has a use for Premises and a number of employees reasonably consistent with
that of Tenant’s operation, Landlord may consider such replacement tenant and
notify Tenant with reasonable promptness as to Landlord’s choice, at Landlord’s
sole discretion, of the following:

16.1.1 That Landlord consents to a subleasing of the Premises or assignment of
the Lease to such replacement tenant provided that Tenant shall remain fully
liable for all of its obligations and liabilities under this Lease and provided
further that Landlord shall be entitled to 50% of any profit obtained by Tenant
from such subletting or assignment; or

16.1.2 That upon such replacement tenant’s entering into a mutually satisfactory
new lease for the Premises with Landlord, then Tenant shall be released from all
further obligations and liabilities under this Lease (excepting only any unpaid
rentals or any unperformed covenants then past due under this Lease or any
guarantee by Tenant of replacement tenant’s obligations); or

16.1.3 That Landlord declines to consent to such sublease or assignment due to
insufficient or unsatisfactory documentation furnished to Landlord to establish
Tenant’s reputation, financial strength and proposed use of and operations upon
Premises; or

16.1.4 That Landlord elects to cancel the Lease and recapture the Premises (in
the case of an assignment) or that Landlord elects to cancel the Lease as to the
portion thereof that Tenant had wished to sublease. In either such event Tenant
shall have the option to either withdraw its proposed assignment or sublease, or
surrender possession of the Premises, or the portion thereof which is the
subject of Tenant’s request on the date set forth in a notice from Landlord in
accordance with the provisions of this Lease relating to the surrender of the
Premises. If this Lease shall be canceled as to a portion of the Premises only,
the Rent payable by Tenant hereunder shall be abated proportionately according
to the ratio that the area of the portion of the Premises surrendered (as
computed by Landlord) bears to the area of the Premises immediately prior to
such surrender. If Landlord shall cancel this Lease, Landlord may relet the
Premises, or the applicable portion of the Premises, to any other party
(including, without limitation, the proposed assignee or subtenant of Tenant),
without any liability to Tenant.

16.2 Conditions to Consent. Notwithstanding anything to the contrary contained
in Article 16.1., above, Tenant’s transfer of its interest pursuant to this
Lease shall be subject to the following express conditions, which conditions are
agreed by Landlord and Tenant to be reasonable:

16.2.1 That the proposed transferee shall be subject to the prior written
consent of Landlord, which may not be unreasonably withheld, conditioned or
delayed but, without limiting the generality of the foregoing, it shall be
reasonable for Landlord to deny such consent if:

(a) The use to be made of the Premises by the proposed transferee is (1) not
generally consistent with the character and nature of all other tenancies in the
Building, or (2) a use which conflicts with any so-called “exclusive” then in
favor of, or for any use which is

 

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the same as that stated in any percentage rent lease to, another tenant of the
Building or any other buildings which are in the same complex as the Building,
or (3) a use which would be prohibited by any other portion of this Lease
(including, but not limited to, any rules and regulations then in effect);

(b) The financial responsibility of the proposed transferee is not reasonably
satisfactory to Landlord or in any event not at least equal to those which were
possessed by Tenant as of the date of execution of this Lease;

(c) The proposed transferee is either a governmental agency or instrumentality
thereof; or

(d) Either the proposed transferee or any person or entity which directly or
indirectly controls, is controlled by or is under common control with the
proposed transferee (A) occupies space in the Building at the time of the
request for consent, or (B) is negotiating with Landlord or has negotiated with
Landlord during the six (6) month period immediately preceding the date of the
proposed transfer, to lease space in the Building.

16.2.2 Whether or not Landlord consents to any such transfer, Tenant shall pay
to Landlord Landlord’s then standard processing fee and reasonable attorney fees
incurred in connection with the proposed transfer up to the aggregate sum of
$1,500.00;

16.2.3 That the proposed transferee shall execute an agreement pursuant to which
it shall agree to perform faithfully and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease applicable to
that portion of the Premises so transferred; and

16.2.4 That an executed duplicate original of said assignment and assumption
agreement or other transfer on a form reasonably approved by Landlord, shall be
delivered to Landlord within five (5) days after the execution thereof, and that
such transfer shall not be binding upon Landlord until the delivery thereof to
Landlord and the execution and delivery of Landlord’s consent thereto. It shall
be a condition to Landlord’s consent to any subleasing, assignment or other
transfer of part or all of Tenant’s interest in the Premises (hereinafter
referred to as a “Transfer”) that (i) upon Landlord’s consent to any Transfer,
Tenant shall pay and continue to pay fifty percent (50%) of any “Transfer
Premium” (defined below), received by Tenant from the transferee; (ii) any
sublessee of part or all of Tenant’s interest in the Premises shall agree that
in the event Landlord gives such sublessee notice that Tenant is in default
under this Lease, such sublessee shall thereafter make all sublease or other
payments directly to Landlord, which will be received by Landlord without any
liability whether to honor the sublease or otherwise (except to credit such
payments against sums due under this Lease), and any sublessee shall agree to
attorn to Landlord or its successors and assigns at their request should this
Lease be terminated for any reason, except that in no event shall Landlord or
its successors or assigns be obligated to accept such attornment; (iii) any such
Transfer and consent shall be effected on forms supplied by Landlord and/or its
legal counsel; (iv) Landlord may require that Tenant not then be in default
hereunder in any respect; and (v) Tenant or the proposed subtenant or assignee
(collectively, “Transferee”) shall agree to pay Landlord, upon demand, as
additional rent, a sum equal to the additional costs, if any, incurred by
Landlord for maintenance and repair

 

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as a result of any change in the nature of occupancy caused by such subletting
or assignment “Transfer Premium” shall mean all rent, additional rent or other
consideration payable by a Transferee in connection with a Transfer in excess of
the Rent payable by Tenant under this Lease during the term of the Transfer and
if such Transfer is less than all of the Premises, the Transfer Premium shall be
calculated on a rentable square foot basis. “Transfer Premium” shall also
include, but not be limited to, key money, bonus money or other cash
consideration paid by a transferee to Tenant in connection with such Transfer
and any payment in excess of fair market value for services rendered by Tenant
to the Transferee and any payment in excess of fair market value for assets,
fixtures, inventory, equipment, or furniture transferred by Tenant to the
Transferee in connection with such Transfer, after deducting Tenant’s
“out-of-pocket” direct costs such as leasing commissions, legal fees, subtenant
improvements, free rent and any subleasing processing or review fees charged by
the Landlord. Subject to the foregoing, “Transfer Premium” shall not include any
amounts paid for the acquisition of Tenant or for a merger with Tenant. In no
event shall the consent by Landlord to an assignment or subletting be construed
as relieving Tenant, any assignee, or sublessee from obtaining the express
written consent of Landlord to any further assignment or subletting, or as
releasing Tenant from any liability or obligation hereunder whether or not then
accrued and Tenant shall continue to be fully liable therefor. No collection or
acceptance of Rent by Landlord from any person other than Tenant shall be deemed
a waiver of any provision of this Article 16 or the acceptance of any assignee
or subtenant hereunder, or a release of Tenant (or of any successor of Tenant or
any subtenant) Notwithstanding anything to the contrary in this Lease, if Tenant
or any proposed Transferee claims that Landlord has unreasonably withheld or
delayed its consent under this Article 16 or otherwise has breached or acted
unreasonably under this Article 16, their sole remedies shall be a declaratory
judgment and an injunction for the relief sought without any monetary damages,
and Tenant hereby waives all other remedies, including, without limitation, any
right at law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable laws, on behalf of the proposed
Transferee.

16.3 No Assignment of Options. In no case may Tenant assign any options to
sublessee(s) or assignee(s) hereunder, all such options being deemed personal to
Tenant only. Consent by Landlord hereunder shall in no way operate as a waiver
by Landlord of, or to release or discharge Tenant from, any liability under this
Lease or be construed to relieve Tenant from obtaining Landlord’s consent to any
subsequent assignment, subletting, transfer, use or occupancy.

ARTICLE 17

SUBORDINATION, ATTORNMENT AND MORTGAGEE PROTECTION

This Lease is subject and subordinate to all Mortgages now or hereafter placed
upon the Building, and all other encumbrances and matters of public record
applicable to the Building, including without limitation, any reciprocal
easement or operating agreements, ground or underlying leases, covenants,
conditions and restrictions and Tenant shall not act or permit the Premises to
be operated in violation thereof. Landlord shall have the right to cause this
Lease to be and become and remain subject and subordinate to any and all ground
or underlying leases or Mortgages which may hereafter be executed covering the
Premises, the Building or the property or any renewals, modifications,
consolidations, replacements or extensions thereof, for the full

 

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amount of all advances made or to be made thereunder and without regard to the
time or character of such advances, together with interest thereon and subject
to all the terms and provisions thereof; provided, however, that Landlord
obtains from any Lender or other party in question a written undertaking in
favor of Tenant to the effect that such Lender or other party will not disturb
Tenant’s right of possession under this Lease if Tenant is not then or
thereafter in breach of any covenant or provision of this Lease. Tenant agrees,
within ten (10) days after Landlord’s written request therefor, to execute,
acknowledge and deliver upon request any and all documents or instruments
requested by Landlord or necessary or proper to assure the subordination of this
Lease to any such Mortgages, deeds of trust, or leasehold estates. If any
foreclosure or power of sale proceedings are initiated by any Lender or a deed
in lieu is granted (or if any ground lease is terminated), Tenant agrees, upon
written request of any such Lender or any purchaser at such foreclosure sale, to
attorn and pay Rent to such party and to execute and deliver any instruments
necessary or appropriate to evidence or effectuate such attornment, within five
(5) days of Landlord’s request therefor. In the event of attornment, no Lender
shall be: (i) liable for any act or omission of Landlord, or subject to any
offsets or defenses which Tenant might have against Landlord (prior to such
Lender becoming Landlord under such attornment), (ii) liable for any security
deposit or bound by any prepaid Rent not actually received by such Lender, or
(iii) bound by any future modification of this Lease not consented to by such
Lender. Any Lender may elect to make this Lease prior to the lien of its
Mortgage, and if the Lender under any prior Mortgage shall require, this Lease
shall be prior to any subordinate Mortgage; such elections shall be effective
upon written notice to Tenant. Tenant agrees to give any Lender by certified
mail, return receipt requested, a copy of any notice of default served by Tenant
upon Landlord, provided that prior to such notice Tenant has been notified in
writing (by way of service on Tenant of a copy of an assignment of leases, or
otherwise) of the name and address of such Lender Tenant further agrees that if
Landlord shall have failed to cure such default within the time permitted
Landlord for cure under this Lease, any such Lender whose address has been so
provided to Tenant shall have an additional period of thirty (30) days in which
to cure (or such additional time as may be required due to causes beyond such
Lender’s control, including time to obtain possession of the Building by power
of sale or judicial action or deed in lieu of foreclosure). The provisions of
this Article shall be self-operative; however, Tenant shall execute such
documentation as Landlord or any Lender may request from time to time in order
to confirm the matters set forth in this Article in recordable form To the
extent not expressly prohibited by Law, Tenant waives the provisions of any Law
now or hereafter adopted which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease or Tenant’s
obligations hereunder if such foreclosure or power of sale proceedings are
initiated, prosecuted or completed.

ARTICLE 18

ESTOPPEL CERTIFICATE

Tenant shall from time to time, upon written request by Landlord or any Lender,
execute, acknowledge and deliver to Landlord or such Lender, within ten
(10) business days after receipt of such request, a statement in writing
certifying, without limitation: (i) that this Lease is unmodified and in full
force and effect (or if there have been modifications, identifying such
modifications and certifying that the Lease, as modified, is in full force and
effect); (ii) the dates to which Rent and any other charges have been paid;
(iii) that Landlord is not in default under

 

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any provision of this Lease (or if Landlord is in default, specifying each such
default) and that no events or conditions exist which, with the passage of time
or notice or both, would constitute a default on the part of Landlord hereunder;
(iv) the address to which notices to Tenant shall be sent; and (v) the amount of
Tenant’s security deposit; it being understood that any such statement so
delivered may be relied upon in connection with any lease, mortgage or transfer.

Tenant’s failure to deliver such statement within such time shall be conclusive
upon Tenant that: (i) this Lease is in full force and effect and has not been
modified except as Landlord may represent; (ii) not more than one (1) month’s
Rent has been paid in advance; (iii) there are no defaults by Landlord;
(iv) notices to Tenant shall be sent to Tenant’s Address as set forth in Article
1 of this Lease; and (v) that all other statements contained in such estoppel
are true and correct. Notwithstanding the presumptions of this Article, Tenant
shall not be relieved of its obligation to deliver said statement. Tenant hereby
irrevocably appoints Landlord as Tenant’s attorney-in-fact and in Tenant’s name,
place and stead to execute any and all documents described in this Article 18 if
Tenant fails to do so within the specified time period.

ARTICLE 19

DEFAULTS

If Tenant: (i) fails to pay when due any installment or other payment of Rent,
or to keep in effect any insurance required to be maintained hereunder; or
(ii) vacates or abandons the Premises or fails to accept tender of possession of
the Premises or any significant portion thereof; or (iii) becomes insolvent,
makes an assignment for the benefit of creditors, files a voluntary bankruptcy
or an involuntary petition in bankruptcy is filed against Tenant which petition
is not dismissed within sixty (60) days of its filing; or (iv) fails to cause to
be released any mechanic’s liens filed against the Premises or the Building
within twenty (20) days after the date the same shall have been filed or
recorded; or (v) fails to observe or perform according to the provisions of
Article 17 or 18 within the time periods specified in such Articles, or
(vi) fails to perform or observe any of the other covenants, conditions or
agreements contained herein on Tenant’s part to be kept or performed and such
failure shall continue for thirty (30) days after notice thereof is given by or
on behalf of Landlord; or (vii) if the interest of Tenant under this Lease shall
be offered for sale or sold under execution or other legal process; or (viii) if
Tenant makes any transfer, assignment, conveyance, sale, pledge, disposition of
all or a substantial portion of Tenant’s property, then any such event or
conduct shall constitute a “default” hereunder. All notices required to be given
under this paragraph shall be in lieu of, and not in addition to any notice
requirements imposed by law, statute, ordinance, governmental regulation or
requirement of the United States, the State in which the Building is located or
any local government authority or agency or any political subdivision thereof,
now or hereafter in effect.

If Tenant or any guarantor hereunder files a voluntary petition pursuant to the
United States Bankruptcy Reform Act of 1978, as the same may be from time to
time amended (the “Bankruptcy Code”), or take the benefit of any insolvency act
or be dissolved, or if an involuntary petition or proceeding for dissolution or
liquidation is filed against Tenant pursuant to the Bankruptcy Code and said
petition is not dismissed within thirty (30) days after such filing, or if a
proceeding for the appointment of a trustee or a receiver is commenced for
Tenant’s business or all or a portion of its assets and the appointment of such
receiver is not vacated

 

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within thirty (30) days after such appointment, or if it shall make an
assignment for the benefit of its creditors, then Landlord shall have all of the
rights provided for in the event of nonpayment of the Rent Tenant hereby
stipulates to the lifting of the automatic stay in effect and relief from such
stay in the event Tenant files a petition under the Bankruptcy Code, for the
purpose of Landlord pursuing its rights and remedies against Tenant and/or a
guarantor under this Lease.

If any alleged default on the part of Landlord hereunder occurs, Tenant shall
give written notice to Landlord in the manner herein set forth and shall afford
Landlord a reasonable opportunity to cure any such default. In addition, Tenant
shall send notice of such default by certified or registered mail, postage
prepaid, to the holder of any Mortgage whose address Tenant has been provided in
writing, and shall afford such Mortgage holder a reasonable opportunity to cure
any alleged default on Landlord’s behalf. In no event will Landlord be
responsible for any lost profits or interruption of business as a result of any
alleged default by Landlord hereunder. All defaults by Tenant of any covenant or
condition of this Lease shall be deemed by the parties hereto to be material.

ARTICLE 20

REMEDIES OF LANDLORD

20.1 Landlord Remedies. Upon the occurrence of any default by Tenant, and in
addition to any and all other remedies and rights available to Landlord at law
or in equity, Landlord shall have the right to pursue any one or more of the
following remedies, each of which shall be cumulative and nonexclusive:

20.1.1 Landlord may terminate this Lease by written notice to Tenant and,
following termination, may enter and take possession of the Premises and remove
Tenant and any other person occupying the Premises by arrangement with Tenant
without being liable for prosecution or any claim or damages therefor, and may
recover from Tenant the following:

(a) The worth at the time of the award of any unpaid rent that has been earned
at the time of termination;

(b) The worth at the time of the award of the amount by which the unpaid rent
which would have been earned following termination and until the time of the
award exceeds the amount of such rental loss that Tenant proves could reasonably
have been avoided;

(c) The worth at the time of the award of the amount by which the unpaid rent
for the balance of the term after the time of the award exceeds the amount of
such rental loss that Tenant proves could reasonably have been avoided;

(d) Any other amounts necessary to compensate Landlord for all detriment
proximately caused by Tenant’s defaults under this Lease or which in the
ordinary course of things would be likely to result therefrom, including,
without limitation, brokerage commissions, advertising expenses, remodeling
expenses, and concessions to a new tenant; and

(e) At Landlord’s election, any other amounts in addition to or in lieu of the
foregoing that may be permitted by law from time to time.

 

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As used in this Section 20.1.1, “rent” means all amounts of every nature
required to be paid by Tenant hereunder, whether to Landlord or to third
parties. Any such amounts which must be based on increased costs or other
historical information shall be calculated based on estimates and projections
reasonably made by Landlord. As used in subparagraph 20 1.1(a) of this
paragraph, the “worth at the time of the award” shall be calculated based on an
interest rate equal to the highest rate permitted by applicable law or, if no
maximum applies, 18% per annum As used in subparagraph 20 1.1(c) of this
paragraph, the “worth at the time of the award” shall be calculated based on a
discount rate equal to 1% plus the discount rate set by the Federal Reserve Bank
of San Francisco at the time of the award.

20.1.2 Landlord may continue this Lease in effect and pursue any other rights
and remedies it may have hereunder and/or as otherwise permitted by law from
time to time.

20.1.3 Landlord may continue this Lease in effect after Tenant’s breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations (and with the
understanding that Landlord is under no obligation to relet the Premises under
any conditions so long as there is comparable space available in the Building
for lease). If the Building is located in California, Landlord may exercise its
remedies under California Civil Code Section 1951.4 (as modified or recodified
from time to time).

20.1.4 Whether or not Landlord terminates this Lease, Landlord shall have the
right, as Landlord chooses in its absolute discretion, (i) to terminate any or
all subleases, licenses, concessions and other agreements entered into by Tenant
in connection with its occupancy of the Premises and/or (ii) to maintain any or
all such agreements in effect and succeed to Tenant’s interests in connection
therewith (in which event Tenant shall cease to have any interest in any such
agreement).

20.2 WAIVER OF JURY TRIAL. TENANT HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN
ANY CLAIM, ACTION, PROCEEDING OR COUNTERCLAIM BY EITHER LANDLORD OR TENANT
AGAINST THE OTHER OR ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, AND/OR TENANT’S USE OR OCCUPANCY
OF THE PREMISES.

20.3 Attorney Fees.

20.3.1 In any action to enforce the terms of this Lease, including any suit by
Landlord for the recovery of Rent or possession of the Premises, the losing
party shall reimburse the successful party for its reasonable attorney fees
incurred in such suit and such attorney fees shall be deemed to have accrued
prior to the commencement of such action and shall be paid whether or not such
action is prosecuted to judgment.

20.3.2 Should Landlord, without fault on Landlord’s part, be made a party to any
litigation instituted by Tenant or by any third party against Tenant, or by or
against any person holding under or using the Premises by license of Tenant, or
for the foreclosure of any lien for labor or material furnished to or for Tenant
or any such other person or otherwise arising

 

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out of or resulting from any act or transaction of Tenant or of any such other
person, Tenant covenants to save and hold Landlord harmless from and against any
judgment rendered against Landlord or the Premises or any part thereof and from
and against all costs and expenses, including reasonable attorney fees, incurred
by Landlord in connection with such litigation.

20.3.3 When legal services are rendered by an attorney at law who is an employee
of a party, attorney fees incurred by that party shall be deemed to include an
amount based upon the number of hours spent by such employee on such matters
multiplied by an appropriate billing rate determined by taking into
consideration the same factors, including but not limited by, the importance of
the matter, time applied, difficulty and results, as are considered when an
attorney not in the employ of a party is engaged to render such service.

ARTICLE 21

QUIET ENJOYMENT

Landlord covenants and agrees with Tenant that so long as Tenant pays Rent and
observes and performs all the terms, covenants, and conditions of this Lease on
Tenant’s part to be observed and performed, Tenant may peaceably and quietly
enjoy the Premises subject, nevertheless, to the terms and conditions of this
Lease, and Tenant’s possession will not be disturbed by anyone claiming by,
through, or under Landlord.

ARTICLE 22

ACCORD AND SATISFACTION

No payment by Tenant or receipt by Landlord of an amount less than full payment
of Rent then due and payable shall be deemed to be other than on account of Rent
then due and payable, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as Rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the balance of such Rent or pursue any other remedy
provided for in this Lease or available at law or in equity.

ARTICLE 23

LETTER OF CREDIT

23.1 Requirements. Concurrently with Tenant’s execution of this Lease, Tenant
shall deliver to Landlord as protection for the full and faithful performance by
Tenant of all of the obligations under this Lease and for all damages Landlord
may suffer (or that Landlord reasonably estimates it may suffer) as a result of
any breach or default under this Lease, an irrevocable and unconditional,
negotiable standby letter of credit (“Letter of Credit”) in the amount of Five
Hundred Thousand Dollars ($500,000 00), subject to the terms and conditions of
this Article 23. The Letter of Credit shall be issued by a solvent, nationally
recognized bank having its principal office within the United States of America
(the “Bank”) and shall be capable of being drawn upon at a location in the City
of San Francisco. The Letter of Credit shall reflect Landlord as beneficiary.
The form and terms of the Letter of Credit and the issuer issuing same

 

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shall be subject to the review and approval of Landlord, in its sole discretion.
Landlord, or its managing agent, shall have the right to draw down an amount up
to the face amount of the Letter of Credit upon presentation to the issuer of
Landlord’s written statement that Landlord is entitled to the funds represented
by such Letter of Credit if any of the following shall have occurred or are
applicable: (i) such amount is due to Landlord under the terms and conditions of
this Lease after any applicable notice and cure period expressly set forth in
this Lease; provided that if Landlord is prevented from delivering a notice of
default to Tenant for any reason, including, without limitation, because Tenant
has filed a voluntary petition, or an involuntary petition has been filed
against Tenant, under the U.S. Bankruptcy Code or any state bankruptcy code
(collectively, “Bankruptcy Code”), then no such notice and cure period shall be
required; (ii) Tenant has filed a voluntary petition under the Bankruptcy Code;
(iii) an involuntary petition has been filed against Tenant under the Bankruptcy
Code; or (iv) the Bank has notified Landlord that it intends to revoke the
Letter of Credit or the Letter of Credit will not be renewed or extended. The
Letter of Credit shall provide that the issuer of the Letter of Credit shall
deliver to Landlord at least thirty (30) days written notice prior to revoking,
terminating or failing to renew the Letter of Credit. The issuer will honor the
Letter of Credit regardless of whether Tenant disputes Landlord’s right to draw
on the Letter of Credit Landlord shall be required to give Tenant written notice
prior to or concurrently with, any drawing upon the Letter of Credit. The Letter
of Credit must permit multiple presentation or drawings and partial drawings. In
the event Landlord draws on the Letter of Credit, Tenant shall within ten
(10) days after the date of such draw cause the amount of the Letter or Credit
to be increased to its original amount.

23.2 Draws. Tenant acknowledges and agrees that Landlord is entering into this
Lease in material reliance on the ability of Landlord to draw on the Letter of
Credit on the occurrence of any breach or default on the part of Tenant under
this Lease after the expiration of applicable notice and cure Periods. If Tenant
shall breach any provision of this Lease or otherwise be in default under this
Lease, Landlord may, but without obligation to do so, and without notice to
Tenant, draw on the Letter of Credit, in part or in whole, to cure any breach or
default of Tenant and to compensate Landlord for any and all damages of any kind
or nature sustained or which Landlord reasonably estimates that it will sustain
resulting from Tenant’s breach or default. The use, application, or retention of
the Letter of Credit, or any portion of it, by Landlord shall not prevent
Landlord from exercising any other right or remedy provided by this Lease or by
any applicable law, it being intended that Landlord shall not first be required
to proceed against the Letter of Credit, and shall not operate as a limitation
on any recovery to which Landlord may otherwise be entitled. Tenant agrees not
to interfere in any way with payment to Landlord of the proceeds of the Letter
of Credit, either before or following a draw by Landlord of any portion of the
Letter of Credit, regardless of whether any dispute exists between Tenant and
Landlord as to Landlord’s right to draw on the Letter of Credit. No condition or
term of this Lease shall be deemed to render the Letter of Credit conditional to
justify the issuer of the Letter of Credit in failing to honor a drawing on such
Letter of Credit in a timely manner. Tenant agrees and acknowledges that (1) the
Letter of Credit constitutes a separate and independent contract between
Landlord and the Bank; (2) Tenant is not a third party beneficiary of such
contract; (3) Tenant has no property interest whatsoever in the Letter of Credit
or the proceeds of it; and (4) if Tenant becomes a debtor under any chapter of
the Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate
shall have any right to restrict or limit Landlord’s claim or rights to the
Letter of Credit or the proceeds of it by application of Section 502(b)(6) of
the U.S. Bankruptcy Code or otherwise.

 

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23.3 Not a Security Deposit. Landlord and Tenant acknowledge and agree that in
no event or circumstance shall the Letter of Credit or any renewal of it or any
proceeds of it be (i) deemed to be or treated as a “security deposit” within the
meaning of California Civil Code Section 1950.7, (ii) subject to the terms of
Section 1950.7, or (iii) intended to serve as a “security deposit” within the
meaning of Section 1950.7. Landlord and Tenant (iv) further acknowledge and
agree that the Letter of Credit is not intended to serve as a security deposit
and Section 1950.7 and any and all other laws, rules, and regulations applicable
to security deposits in the commercial context (“Security Deposit Laws”) shall
have no applicability or relevancy to the Letter of Credit, and (v) waive any
and all rights, duties, and obligations either party may now or in the future
have relating to or arising from the Security Deposit Laws.

23.4 Transfers. If Landlord transfers its ownership of the Premises, or finances
the Building Landlord may (i) transfer (one or more times) all or any portion of
its interest in and to the Letter of Credit to another party, person or entity
provided that such transfer a part of the assignment by Landlord of its rights
and interests in and to this Lease, or (ii) may require that Tenant furnish to
Landlord’s transferee a substitute or amended Letter of Credit, naming such
transferee as the beneficiary and otherwise in compliance with this Article 23,
provided such transferee reimburses Tenant for the nominal administrative fee
charged by the issuer of the Letter of Credit for issuing a substitute or
amended Letter of Credit in the name of the transferee. In the event of a
Transfer of Landlord’s interest in the Building and the transfer (or
substitution or amendment) of the Letter or Credit to Landlord’s transferee,
Landlord shall be released by Tenant from all liability therefor.

ARTICLE 24

BROKERAGE COMMISSION

Landlord and Tenant represent and warrant to each other that neither has dealt
with any broker, finder or agent except for the Broker(s) identified in Article
1. Tenant represents and warrants to Landlord that (except with respect to the
Broker identified in Article 1 and with whom Landlord has entered into a
separate brokerage agreement) no broker, agent, commission salesperson, or other
person has represented Tenant in the negotiations for and procurement of this
Lease and of the Premises and that no commissions, fees, or compensation of any
kind are due and payable in connection herewith to any other broker, agent
commission salesperson, or other person. Tenant agrees to indemnify and hold
harmless Landlord, its agents, members, partners, representatives, officers,
affiliates, shareholders, employees, successors and assigns from and against any
and all loss, liabilities, claims, suits, or judgments (including, without
limitation, reasonable attorney fees and court costs incurred in connection with
any such claims, suits, or judgments, or in connection with the enforcement of
this indemnity) for any fees, commissions, or compensation of any kind which
arise out of or are in any way connected with any claimed agency relationship
not referenced in Article 1.

 

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ARTICLE 25

FORCE MAJEURE

Landlord shall be excused for the period of any delay in the performance of any
obligation hereunder when prevented from so doing by a cause or causes beyond
its control, including all labor disputes, civil commotion, war, war-like
operations, invasion, rebellion, hostilities, military or usurped power,
sabotage, governmental regulations or controls, fire or other casualty,
inability to obtain any material, services or through acts of God. Tenant shall
similarly be excused for delay in the performance of any obligation hereunder;
provided:

25.1 nothing contained in this Section or elsewhere in this Lease shall be
deemed to excuse or permit any delay in the payment of Rent, or any delay in the
cure of any default which may be cured by the payment of money;

25.2 no reliance by Tenant upon this Section shall limit or restrict in any way
Landlord’s right of self-help as provided in this Lease; and

25.3 Tenant shall not be entitled to rely upon this Section unless it shall
first have given Landlord notice of the existence of any force majeure
preventing the performance of an obligation of Tenant within five (5) days after
the commencement of the force majeure.

ARTICLE 26

PARKING

26.1 Landlord hereby grants to Tenant the right, in common with others
authorized by Landlord, to use the parking facilities owned by Landlord and
shown on Exhibit A, if any Landlord, at its sole election, may designate the
types, sizes, configuration, and locations of parking spaces within the parking
facilities which Tenant shall be allowed to use. Landlord shall have the right,
at Landlord’s sole election, to change said types, sizes, configuration, and
locations from time to time; provided, however, such designation shall be
uniformly applied and shall not unfairly favor any tenant in the Building.

26.2 Commencing on the Commencement Date, Tenant shall pay Landlord the Parking
Fee, if any, shown in Article 1, as Additional Rent, payable monthly in advance
with the Monthly Rent. Except as otherwise expressly provided in Article 1,
throughout the Term, the parking rate for each type of parking space provided to
Tenant hereunder shall be the prevailing parking rate, as Landlord may designate
from time to time, at Landlord’s sole election, for each such type of parking
space. In addition to the right reserved hereunder by Landlord to designate the
parking rate from time to time, Landlord shall have the right to change the
parking rate at any time to include therein any amounts levied, assessed,
imposed or required to be paid to any governmental authority on account of the
parking of motor vehicles, including all sums required to be paid pursuant to
transportation controls imposed by the Environmental Protection Agency under the
Clean Air Act of 1970, as amended, or otherwise required to be paid by any
governmental authority with respect to the parking, use, or transportation of
motor vehicles, or the reduction or control of motor vehicle traffic, or motor
vehicle pollution. Tenant shall be

 

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responsible for the full amount of any taxes imposed by any governmental
authority in connection with the use of the parking facility by Tenant.

26.3 If requested by Landlord, Tenant shall notify Landlord of the license plate
number, year, make and model of the automobiles entitled to use the parking
facilities and if requested by Landlord, such automobiles shall be identified by
automobile window stickers provided by Landlord, and only such designated
automobiles shall be permitted to use the parking facilities. If Landlord
institutes such an identification procedure, Landlord may provide additional
parking spaces for use by customers and invitees of Tenant on a daily basis at
prevailing parking rates, if any. At Landlord’s sole election, Landlord may make
validation stickers available to Tenant for any such additional parking spaces,
provided, however, if Landlord makes validation stickers available to any other
tenant in the Building, Landlord shall make such validation stickers available
to Tenant. Tenant acknowledges and agrees that Landlord may, without incurring
any liability to Tenant and without any abatement of Rent under this Lease
(excepting the abatement or refund on any parking fees for periods to the extent
Tenant is unable to use the parking facilities), from time to time, close-off or
restrict access to the parking facility for purposes of permitting or
facilitating construction, alteration or improvement. Landlord may delegate its
responsibilities hereunder to a parking operator or a lessee of the parking
facility in which case such parking operator or lessee shall have all the rights
of control attributed hereby to Landlord.

26.4 The parking facilities provided for herein are provided solely for the
accommodation of Tenant, and Landlord assumes no responsibility or liability of
any kind whatsoever from whatever cause with respect to the automobile parking
areas, including adjoining streets, sidewalks, driveways, property and
passageways, or the use thereof by Tenant or tenant’s employees, customers,
agents, contractors or invitees. Tenant may not assign, transfer, sublease or
otherwise alienate the use of the parking facilities without Landlord’s prior
written consent. Tenant’s continued right to use the parking facilities is
conditioned upon Tenant abiding by all rules and regulations which are
prescribed from time to time for the orderly operation and use of the parking
facility, Tenant’s cooperation in seeing that Tenant’s employees and visitors
also comply with such rules and regulations, and Tenant not being in default
under this Lease.

ARTICLE 27

HAZARDOUS MATERIALS

27.1 Definition of Hazardous Materials. The term “Hazardous Materials” for
purposes hereof shall mean any chemical, substance, materials or waste or
component thereof which is now or hereafter listed, defined or regulated as a
hazardous or toxic chemical, substance, materials or waste or component thereof
by any federal, state or local governing or regulatory body having jurisdiction,
or which would trigger any employee or community “right-to-know” requirements
adopted by any such body, or for which any such body has adopted any
requirements for the preparation or distribution of a materials safety data
sheet (“MSDS”). The term “Hazardous Material” includes, without limitation, any
material, waste or substance which is (i) included within the definitions of
“hazardous substances,” “hazardous materials,” “toxic substances” or “solid
waste” in or pursuant to any environmental Law, or subject to regulation

 

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under any environmental Law, (ii) listed in the United States Department of
Transportation Optional Hazardous Material Table, 49 C.F.R. § 172.101, as to
date or hereafter amended, or in the United States Environmental Protection
Agency List of Hazardous Substances and Reportable Quantities, 40 C.F.R. Part
302, as to date or hereafter amended, (iii) an explosive, radioactive, asbestos,
polychlorinated biphenyl, oil or petroleum product, (iv) designated as a
“Hazardous Substance” pursuant to Section 311 of the Federal Water Pollution
Control Act (33 U.S.C. § 1317), (v) defined as a “Hazardous Waste” pursuant to
Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. §
6901 et seq. (42 U.S.C. § 6903), (vi) defined as a “Hazardous Substance”
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601), or
(vii) any substance deemed to be a “Hazardous Material” by any present or future
federal, state or local Law, statute, regulation ordinance, or any judicial or
administrative order or judgment thereunder, because it effects the health,
industrial hygiene or the environmental or ecological conditions on, under or
about the Premises or the Building.

27.2 No Hazardous Materials. Tenant shall not transport, use, store, maintain,
generate, manufacture, handle, dispose, release or discharge any Hazardous
Materials. However, the foregoing provisions shall not prohibit the
transportation to and from, and use, storage, maintenance and handling within
the Premises of Hazardous Materials customarily used in the business or activity
expressly permitted to be undertaken in the Premises under Article 6, provided:
(a) such Hazardous Materials shall be used and maintained only in such
quantities as are reasonably necessary for such permitted use of the Premises
and the ordinary course of Tenant’s business therein, strictly in accordance
with applicable Law, highest prevailing standards, and the manufacturers’
instructions therefor, (b) such Hazardous Materials shall not be disposed of,
released or discharged in the Building, and shall be transported to and from the
Premises in compliance with all applicable Laws, and as Landlord shall
reasonably require, (c) if any applicable Law or Landlord’s trash removal
contractor requires that any such Hazardous Materials be disposed of separately
from ordinary trash, Tenant shall make arrangements, at Tenant’s expense, for
such disposal directly with a qualified and licensed disposal company at a
lawful disposal site (subject to scheduling and approval by Landlord), and
(d) any remaining such Hazardous Materials shall be completely, properly and
lawfully removed from the Building upon expiration or earlier termination of
this Lease.

27.3 Notices To Landlord. Tenant shall promptly notify Landlord of: (i) any
enforcement, cleanup or other regulatory action taken or threatened by any
governmental or regulatory authority with respect to the presence of any
Hazardous Materials on the Premises or the migration thereof from or to other
property, (ii) any demands or claims made or threatened by any party relating to
any loss or injury resulting from any Hazardous Materials on the Premises,
(iii) any release, discharge or nonroutine, improper or unlawful disposal or
transportation of any Hazardous Materials on or from the Premises or in
violation of this Article, and (iv) any matters where Tenant is required by Law
to give a notice to any governmental or regulatory authority respecting any
Hazardous Materials on the Premises. Landlord shall have the right (but not the
obligation) to join and participate, as a party, in any legal proceedings or
actions affecting the Premises initiated in connection with any environmental,
health or safety Law. At such times as Landlord may reasonably request, Tenant
shall provide Landlord with a written list, certified to be true and complete,
identifying any Hazardous Materials then used, stored, or maintained upon the
Premises, the use and approximate quantity of each such

 

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materials, a copy of any MSDS issued by the manufacturer therefor, and such
other information as Landlord may reasonably require or as may be required by
Law.

27.4 Indemnification of Landlord. If any Hazardous Materials are released,
discharged or disposed of by Tenant or any other occupant of the Premises, or
their employees, agents, invitees or contractors, on or about the Building in
violation of the foregoing provisions, Tenant shall immediately, properly and in
compliance with applicable Laws clean up, remediate and remove the Hazardous
Materials from the Building and any other affected property and clean or replace
any affected personal property (whether or not owned by Landlord), at Tenant’s
expense (without limiting Landlord’s other remedies therefor). Tenant shall
further be required to indemnify and hold Landlord, Landlord’s directors,
officers, employees and agents harmless from and against any and all claims,
demands, liabilities, losses, damages, penalties and judgments directly or
indirectly arising out of or attributable to a violation of the provisions of
this Article by Tenant, Tenant’s occupants, employees, contractors or agents.
Any clean up, remediation and removal work shall be subject to Landlord’s prior
written approval (except in emergencies), and shall include, without limitation,
any testing, investigation, and the preparation and implementation of any
remedial action plan required by any governmental body having jurisdiction or
reasonably required by Landlord. If Landlord or any Lender or governmental body
arranges for any tests or studies showing that this Article has been violated,
Tenant shall pay for the costs of such tests. The provisions of this Article
shall survive the expiration or earlier termination of this Lease. Landlord and
Tenant acknowledge that Landlord may become legally liable for the costs of
complying with Laws relating to Hazardous Material which are not the
responsibility of Landlord or the responsibility of Tenant, including the
following: (i) Hazardous Material present in the soil or ground water on the
Building property of which Landlord has no knowledge as of the effective date of
this Lease; (ii) a change in Laws which relate to Hazardous Material which make
that Hazardous Material which is present on the property on which the Building
is located as of the effective date of this Lease, whether known or unknown to
Landlord, a violation of such new laws; (iii) Hazardous Material that migrates,
flows, percolates, diffuses, or in any way moves onto, or under, the Building
property after the effective date of this Lease; or Hazardous Material present
on or under the Building property as a result of any discharge, dumping or
spilling (whether accidental or otherwise) on the Building property by other
tenants in the Building or their agents, employees, contractors, or invitees, or
by others. Accordingly, Landlord and Tenant agree that the cost of complying
with Laws relating to Hazardous Materials on the Building property for which
Landlord is legally liable and which are paid or incurred by Landlord shall be
an Operating Expense (and Tenant shall pay Tenant’s Pro Rata Share thereof in
accordance with Article 4) unless the cost of such compliance as between
Landlord and Tenant, is made the responsibility of Tenant pursuant to Article
27.2, above or is due to Landlord’s negligence. To the extent any such Operating
Expense relating to Hazardous Materials is subsequently recovered or reimbursed
through insurance, or recovery from responsible third parties or other action,
Tenant shall be entitled to a proportionate reimbursement to the extent it has
paid its share of such Operating Expense to which such recovery or reimbursement
relates.

27.5 Subletting or Assignment. It shall not be unreasonable for Landlord to
withhold its consent to any proposed assignment or subletting if (i) the
proposed transferee’s anticipated use of the Premises involves the generation,
storage, use, treatment, or disposal of Hazardous Material; (ii) the proposed
transferee has been required by any prior landlord, lender, or

 

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governmental authority to take remedial action in connection with Hazardous
Material contaminating a property if the contamination resulted from such
transferee’s actions or use of the property in question; or (iii) the proposed
transferee is subject to an enforcement order issued by any governmental
authority in connection with the use, disposal, or storage of a Hazardous
Material.

ARTICLE 28

ADDITIONAL RIGHTS RESERVED BY LANDLORD

In addition to any other rights provided for herein, Landlord reserves the
following rights, exercisable without liability to Tenant for damage or injury
to property, person or business and without effecting an eviction, constructive
or actual, or disturbance of Tenant’s use or possession or giving rise to any
claim:

28.1 To name the Building and to change the name or street address of the
Building;

28.2 To install and maintain all signs on the exterior and interior of the
Building;

28.3 To designate all sources furnishing sign painting or lettering for use in
the Building;

28.4 During the last ninety (90) days of the Term, if Tenant has vacated the
Premises, to decorate, remodel, repair, alter or otherwise prepare the Premises
for occupancy, without affecting Tenant’s obligation to pay Rent for the
Premises;

28.5 To have pass keys to the Premises and all doors therein, excluding Tenant’s
vaults and safes;

28.6 On reasonable prior notice to Tenant, to exhibit the Premises to any
prospective purchaser, Lender, mortgagee, or assignee of any mortgage on the
Building or the land on which the Building is located and to others having an
interest therein at any time during the Term, and to prospective tenants during
the last six (6) months of the Term;

28.7 To take any and all measures, including entering the Premises for the
purpose of making inspections, repairs, alterations, additions and improvements
to the Premises or to the Building (including for the purpose of checking,
calibrating, adjusting and balancing controls and other parts of the Building
Systems), as may be necessary or desirable for the operation, improvement,
safety, protection or preservation of the Premises or the Building, or in order
to comply with all Laws, orders and requirements of governmental or other
authority, or as may otherwise be permitted or required by this Lease; provided,
however, that during the progress of any work on the Premises or at the
Building, Landlord will attempt not to inconvenience Tenant, but shall not be
liable for inconvenience, annoyance, disturbance, loss of business, or other
damage to Tenant by reason of performing any work or by bringing or storing
materials, supplies, tools or equipment in the Building or Premises during the
performance of any work, and the obligations of Tenant under this Lease shall
not thereby be affected in any manner whatsoever;

 

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28.8 To relocate various facilities within the Building and on the land of which
the Building is a part if Landlord shall determine such relocation to be in the
best interest of the development of the Building and such property, provided
that such relocation shall not materially restrict access to the Premises or
materially and adversely affect Tenant’s ability to conduct its business in the
Premises; and

28.9 To install vending machines of all kinds in the Building and to receive all
of the revenue derived therefrom, provided, however, that no vending machines
shall be installed by Landlord in the Premises unless Tenant so requests.

ARTICLE 29

DEFINED TERMS

29.1 “Building” shall refer to the Building named in Article 1 of which the
leased Premises are a part (including all modifications, additions and
alterations made to the Building during the term of this Lease), the real
property on which the same is located, all plazas, common areas and any other
areas located on said real property and designated by Landlord for use by all
tenants in the Building. A plan showing the Building is attached hereto as
Exhibit A and made a part hereof and the Premises is defined in Article 2 and
shown on said Exhibit A by cross-hatched lines.

29.2 “Common Areas” shall mean and include all areas, facilities, equipment,
directories and signs of the Building (exclusive of the Premises and areas
leased to other Tenants) made available and designated by Landlord for the
common and joint use and benefit of Landlord, Tenant and other tenants and
occupants of the Building including, but not limited to, lobbies, public
washrooms, hallways, sidewalks, parking areas, landscaped areas and service
entrances. Common Areas may further include such areas in adjoining properties
under reciprocal easement agreements, operating agreements or other such
agreements now or hereafter in effect and which are available to Landlord,
Tenant and Tenant’s employees and invitees Landlord reserves the right in its
sole discretion and from time to time, to construct, maintain, operate, repair,
close, limit, take out of service, alter, change, and modify all or any part of
the Common Areas.

29.3 “Default Rate” shall mean eighteen percent (18%) per annum, or the highest
rate permitted by applicable law, whichever shall be less. If the application of
the Default Rate causes any provision of this Lease to be usurious or
unenforceable, the Default Rate shall automatically be reduced so as to prevent
such result.

29.4 “Hazardous Materials” shall have the meaning set forth in Article 27.

29.5 “Landlord” and “Tenant” shall be applicable to one or more parties as the
case may be, and the singular shall include the plural, and the neuter shall
include the masculine and feminine; and if there is more than one(l), the
obligations thereof shall be joint and several. For purposes of any provisions
indemnifying or limiting the liability of Landlord, the term “Landlord” shall
include Landlord’s present and future partners, beneficiaries, trustees,
officers, directors, employees, shareholders, principals, agents, affiliates,
successors and assigns.

 

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29.6 “Law” or “Laws” shall mean all federal, state, county and local
governmental and municipal laws, statutes, ordinances, rules, regulations,
codes, decrees, orders and other such requirements, applicable equitable
remedies and decisions by courts in cases where such decisions are binding
precedents in the state in which the Building is located, and decisions of
federal courts applying the Laws of such state.

29.7 “Lease” shall mean this lease executed between Tenant and Landlord,
including any extensions, amendments or modifications and any Exhibits attached
hereto.

29.8 “Lease Year” shall mean each calendar year or portion thereof during the
Term.

29.9 “Lender” shall mean the holder of a Mortgage at the time in question, and
where such Mortgage is a ground lease, such term shall refer to the ground
lessee.

29.10 “Mortgage” shall mean all mortgages, deeds of trust, ground leases and
other such encumbrances now or hereafter placed upon the Building or any part
thereof with the written consent of Landlord, and all renewals, modifications,
consolidations, replacements or extensions thereof, and all indebtedness now or
hereafter secured thereby and all interest thereon.

29.11 “Operating Expenses” shall mean all operating expenses of any kind or
nature which are necessary, ordinary or customarily incurred in connection with
the operation, maintenance, replacement, ownership or repair of the Building as
determined by Landlord.

Operating Expenses shall include, but not be limited to:

29.11.1 costs of supplies, including, but not limited to, the cost of relamping
all Building standard lighting as the same may be required from time to time;

29.11.2 costs incurred in connection with obtaining and providing energy for the
Building, including, but not limited to, costs of propane, butane, natural gas,
steam, electricity, solar energy and fuel oils, coal or any other energy
sources, including any taxes thereon;

29.11.3 costs of water and sanitary and storm drainage services;

29.11.4 costs of janitorial and security services;

29.11.5 costs of general maintenance and repairs, including costs under HVAC,
the intrabuilding network cable and other mechanical maintenance contracts and
maintenance, repairs and replacement of equipment and tools used in connection
with operating the Building and the parking facilities;

29.11.6 costs of maintenance and replacement of landscaping;

29.11.7 insurance premiums, including fire and all-risk coverage, together with
loss of rent endorsements, the part of any claim required to be paid under the
deductible portion of any insurance policies carried by Landlord in connection
with the Building, public liability insurance and any other insurance carried by
Landlord on the Building, or any component parts

 

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thereof (all such insurance shall be in such amounts as may be required by any
holder of a Mortgage or as Landlord may reasonably determine);

29.11.8 labor costs, including wages and other payments, costs to Landlord of
worker’s compensation and disability insurance, payroll taxes, employment taxes,
general welfare benefits, pension payments, medical and surgical benefits,
fringe benefits, and all legal fees and other costs or expenses incurred in
resolving any labor dispute;

29.11.9 Reasonable professional building management fees consistent with those
charged for the management of comparable building and for comparable services
required for management of the Building;

29.11.10 legal, accounting, inspection, and other consultation fees (including,
without limitation, fees charged by consultants retained by Landlord for
services that are designed to produce a reduction in Operating Expenses or to
reasonably improve the operation, maintenance or state of repair of the
Building) incurred in the ordinary course of operating the Building or in
connection with making the computations required hereunder or in any audit of
operations of the Building;

29.11.11 the costs of capital improvements or structural repairs or replacements
made in or to the Building in order to conform to changes, subsequent to the
date of this Lease, in any applicable Laws, ordinances, rules, regulations or
orders of any governmental or quasi-governmental authority having jurisdiction
over the Building (herein “Required Capital Improvements”) or the costs incurred
by Landlord to install a new or replacement capital item for the purpose of
reducing Operating Expenses (herein “Cost Savings Improvements”), a reasonable
allowance for depreciation of the cost of acquiring or the rental expense of
personal property used in the maintenance, operation and repair of the Building,
and a reasonable reserve for all other capital improvements and structural
repairs and replacements reasonably necessary to permit Landlord to maintain the
Building in its current class. The expenditures for Required Capital
Improvements and Cost Savings Improvements shall be amortized over the useful
life of such capital improvement or structural repair or replacement (as
determined by Landlord). All costs so amortized shall bear interest on the
amortized balance at the rate of ten percent (10%) per annum or such higher rate
as may have been paid by Landlord on funds borrowed for the purpose of
constructing these capital improvements.

Operating Expenses shall not include: the cost to correct any initial
construction defects; the cost of repairs resulting from Landlord’s gross
negligence; the cost of any goods or services (such as electricity) to the
extent billed separately to and paid directly by Tenant or another tenant of the
Building, depreciation on the Building; costs of tenants’ improvements; real
estate brokers’ commissions; interest; capital items (except as described in
Section 29.11.11); executive salaries and bonuses for any officer of the
Landlord above the level of Building manager; costs to the extent reimbursed by
insurance proceeds; charitable or political contributions; ground rent;
principal and interest payments on loans secured by Building; or the cost of
constructing tenant improvements.

 

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In making any computations contemplated hereby, Landlord shall also be permitted
to make such adjustments and modifications to the provisions of this paragraph
and Article 4 as shall be reasonable and necessary to achieve the intention of
the parties hereto.

29.12 “Rent” shall have the meaning specified therefor in Article 3.

29.13 “Tax” or “Taxes” shall mean:

29.13.1 all real property taxes and assessments levied against the Building by
any governmental or quasi-governmental authority. The foregoing shall include
all federal, state, county, or local governmental, special district, improvement
district, municipal or other political subdivision taxes, fees, levies,
assessments, charges or other impositions of every kind and nature, whether
general, special, ordinary or extraordinary, respecting the Building, including
without limitation, real estate taxes, general and special assessments, interest
on any special assessments paid in installments, transit taxes, water and sewer
rents, taxes based upon the receipt of rent, personal property taxes imposed
upon the fixtures, machinery, equipment, apparatus, appurtenances, furniture and
other personal property used in connection with the Building which Landlord
shall pay during any calendar year, any portion of which occurs during the Term
(without regard to any different fiscal year used by such government or
municipal authority except as provided below). Provided, however, any taxes
which shall be levied on the rentals of the Building shall be determined as if
the Building were Landlord’s only property, and provided further that in no
event shall the term “taxes or assessment,” as used herein, include any net
federal or state income taxes levied or assessed on Landlord, unless such taxes
are a specific substitute for real property taxes. Such term shall, however,
include gross taxes on rentals. Expenses incurred by Landlord for tax
consultants and in contesting the amount or validity of any such taxes or
assessments shall be included in such computations.

29.13.2 all “assessments,” including so-called special assessments, license tax,
business license fee, business license tax, levy, charge, penalty or tax imposed
by any authority having the direct power to tax, including any city, county,
state or federal government, or any school, agricultural, lighting, water,
drainage, or other improvement or special district thereof, against the Premises
of the Building or any legal or equitable interest of Landlord therein. For the
purposes of this Lease, any special assessments shall be deemed payable in such
number of installments as is permitted by law, whether or not actually so paid.
If as of the Commencement Date the Building has not been fully assessed as a
completed project, for the purpose of computing the Operating Expenses for any
adjustment required herein or under Article 4, the Tax shall be adjusted by
Landlord, as of the date on which the adjustment is to be made, to reflect full
completion of the Building including all standard Tenant finish work if the
method of taxation of real estate prevailing to the time of execution hereof
shall be, or has been altered, so as to cause the whole or any part of the taxes
now, hereafter or theretofore levied, assessed or imposed on real estate to be
levied, assessed or imposed on Landlord, wholly or partially, as a capital levy
or otherwise, or on or measured by the rents received therefrom, then such new
or altered taxes attributable to the Building shall be included within the term
real estate taxes, except that the same shall not include any enhancement of
said tax attributable to other income of Landlord. All of the preceding clauses
(29.13.1 and 29.13.2) are collectively referred to as the “Tax” or “Taxes.”

 

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ALL OTHER CAPITALIZED TERMS SHALL HAVE THE DEFINITIONS SET FORTH IN THE LEASE.

ARTICLE 30

MISCELLANEOUS PROVISIONS

30.1 Rules and regulations. Tenant shall comply with all of the rules and
regulations promulgated by Landlord from time to time for the Building. A copy
of the current rules and regulations is attached hereto as Exhibit D. Landlord
shall not be liable to Tenant for violation of any such rules and regulations,
or for the breach of any covenant or condition in any lease by any other tenant
in the Building. A waiver by Landlord of any rule or regulation for any other
tenant shall not constitute nor be deemed a waiver of that rule or regulation
for Tenant.

30.2 Execution of lease. If Tenant is a corporation, partnership or limited
liability company, each individual executing this Lease on behalf of said entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said entity in accordance with: (i) if Tenant is a
corporation, a duly adopted resolution of the Board of Directors of said
corporation or in accordance with the by-laws of said corporation, (ii) if
Tenant is a partnership, the terms of the partnership agreement, and (iii) if
Tenant is a limited liability company, the terms of its operating agreement, and
that this Lease is binding upon said entity in accordance with its terms.
Concurrently with Tenant’s execution of this Lease, Tenant shall provide to
Landlord a copy of: (i) if Tenant is a corporation, such resolution of the Board
of Directors authorizing the execution of this Lease on behalf of such
corporation, which copy of resolution shall be duly certified by the secretary
or an assistant secretary of the corporation to be a true copy of a resolution
duly adopted by the Board of Directors of said corporation and shall be in a
form reasonably acceptable to Landlord, (ii) if Tenant is a partnership, a copy
of the provisions of the partnership agreement granting the requisite authority
to each individual executing this Lease on behalf of said partnership, and
(iii) if Tenant is a limited liability company, a copy of the provisions of its
operating agreement granting the requisite authority to each individual
executing this Lease on behalf of said limited liability company. In the event
Tenant fails to comply with the requirements set forth in this subparagraph
30.2, then each individual executing this Lease shall be personally liable for
all of Tenant’s obligations in this Lease.

30.3 Notices. All notices under this Lease shall be in writing and will be
deemed sufficiently given for all purposes if, to Tenant, by delivery to Tenant
at the Premises during the hours the Building is open for business or by
certified mail, return receipt requested or by overnight delivery service (with
one acknowledged receipt), to Tenant at the address set forth below, and if to
Landlord, by certified mail, return receipt requested or by overnight delivery
service (with one acknowledged receipt), at the addresses set forth below, or at
such other address from time to time established by Landlord.

Landlord: at address shown in Article 1.6

with a copy to: Building Manager at address shown in Article 1.7

 

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Tenant: at address shown in Article 1.2

 

with copy to:  

Medivation, Inc. (c/o Patrick Machado, CFO)

    

201 Spear Street, 3rd floor

    

San Francisco, CA 94105

    

 

  

Any notices sent by Landlord regarding or relating to eviction procedures,
including without limitation three day notices, may be sent by regular mail.

30.4 Transfers. The term “Landlord” appearing herein shall mean only the owner
of the Building from time to time and, upon a sale or transfer of its interest
in the Building, the then landlord and transferring party shall have no further
obligations or liabilities for matters accruing after the date of transfer of
that interest. Tenant, upon such sale or transfer, agrees to attorn to the
transferee and shall look solely to the successor owner and transferee of the
Building, as the lessor under this Lease, for performance of Landlord’s
obligations hereunder. Tenant shall, within five (5) days after request, execute
such further instruments or assurances as such transferee may reasonably deem
necessary to evidence or confirm such attornment.

30.5 Intentionally Omitted.

30.6 Tenant financial statements. Upon the written request of Landlord, Tenant
shall submit financial statements for its most recent financial reporting period
and for the prior Lease Year. Landlord shall make such request no more than
twice during any Lease Year. All such financial statements shall be certified as
true and correct by the responsible officer or partner of Tenant and if Tenant
is then in default hereunder, the financial statements shall be certified by an
independent certified public accountant.

30.7 Relationship of the parties. Nothing contained in this Lease shall be
construed by the parties hereto, or by any third party, as constituting the
parties as principal and agent, partners or joint venturers, nor shall anything
herein render either party (other than a guarantor) liable for the debts and
obligations of any other party, it being understood and agreed that the only
relationship between Landlord and Tenant is that of Landlord and Tenant.

30.8 Entire agreement; merger; severability. This Lease and any Exhibits or
Addenda hereto, embody the entire agreement and understanding between the
parties respecting the Lease and the Premises and supersedes all prior
negotiations, agreements and understandings between the parties, all of which
are merged herein. No provision of this Lease may be modified, waived or
discharged except by an instrument in writing signed by the party against which
enforcement of such modification, waiver or discharge is sought. Any provision
of this Lease which shall prove to be invalid, void or illegal shall in no way
affect, impact, impair or invalidate any other provision hereof and such other
provisions shall remain in full force and effect.

30.9 No representation by landlord. Neither Landlord nor any agent of Landlord
has made any representations, warranties, or promises with respect to the
Premises or the Building except as expressly set forth herein.

 

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30.10 Limitation of liability. Notwithstanding anything in this Lease to the
contrary, any remedy of Tenant for the collection of a judgment (or other
judicial process) requiring the payment of money by Landlord in the event of any
default by Landlord hereunder or any claim, cause of action or obligation,
contractual, statutory or otherwise by Tenant against Landlord concerning,
arising out of or relating to any matter relating to this Lease and all of the
covenants and conditions or any obligations, contractual, statutory, or
otherwise set forth herein, shall be limited solely and exclusively to an amount
which is equal to the lesser of (i) the interest of Landlord in and to the
Building, and (ii) the 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 then current value of the Building (as such value is
reasonably determined by Landlord). No other property or assets of Landlord, or
any member, officer, director, shareholder, partner, trustee, agent, servant or
employee of Landlord (the “Representatives”) shall be subject to levy, execution
or other enforcement procedure for the satisfaction of Tenant’s remedies under
or with respect to this Lease, Landlord’s obligations to Tenant, whether
contractual, statutory or otherwise, the relationship of Landlord and Tenant
hereunder, or Tenant’s use or occupancy of the Building. Tenant further
understands that any liability, duty or obligation of Landlord to Tenant, shall
automatically cease and terminate as of the date that Landlord or any of
Landlord’s Representatives no longer have any right, title or interest in or to
the Building. The provisions hereof shall inure to Landlord’s successors and
assigns including any Lender. The foregoing provisions are not intended to
relieve Landlord from the performance of any of Landlord’s obligations under
this Lease, but only to limit the personal liability of Landlord in case of
recovery of a judgment against Landlord; nor shall the foregoing be deemed to
limit Tenant’s rights to obtain injunctive relief or specific performance or
other remedy which may be accorded Tenant by law or under this Lease. If Tenant
claims or asserts that Landlord has violated or failed to perform a covenant
under the Lease, Tenant’s sole remedy shall be an action for specific
performance, declaratory judgment or injunction and in no event shall Tenant be
entitled to any money damages in any action or by way of set off, defense or
counterclaim and Tenant hereby specifically waives the right to any money
damages or other remedies for any such violation or failure.

30.11 Memorandum of lease. Neither party, without the written consent of the
other, will execute or record any this Lease or any summary or memorandum of
this Lease in any public recorders office.

30.12 No waivers. Failure of Landlord to insist upon strict compliance by Tenant
of any condition or provision of this Lease shall not be deemed a waiver by
Landlord of that condition. No waiver by Landlord of any provision of this Lease
shall be deemed to be a waiver of any other provision hereof or of any
subsequent breach by Tenant of the same or any other provision. No provision of
this Lease may be waived by Landlord, except by an instrument in writing
executed by Landlord. Landlord’s consent to or approval of any act by Tenant
requiring Landlord’s consent or approval shall not be deemed to render
unnecessary the obtaining of Landlord’s consent to or approval of any subsequent
act of Tenant, whether or not similar to the act so consented to or approved. No
act or thing done by Landlord or Landlord’s agents during the Term of this Lease
shall be deemed an acceptance of a surrender of the Premises, and no agreement
to accept such surrender shall be valid unless in writing and signed by
Landlord. Any payment by Tenant or receipt by Landlord of an amount less than
the total amount then due hereunder shall be deemed to be in partial payment
only thereof and not a waiver of the balance

 

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due or an accord and satisfaction, notwithstanding any statement or endorsement
to the contrary on any check or any other instrument delivered concurrently
therewith or in reference thereto. Accordingly, Landlord may accept any such
amount and negotiate any such check without prejudice to Landlord’s right to
recover all balances due and owing and to pursue its other rights against Tenant
under this Lease, regardless of whether Landlord makes any notation on such
instrument of payment or otherwise notifies Tenant that such acceptance or
negotiation is without prejudice to Landlord’s rights.

30.13 Successors and assigns. The conditions, covenants and agreements contained
herein shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, successors and assigns.

30.14 Governing law. This Lease shall be governed by the law of the State where
the Building is located. No conflicts of law rules of any state or country
(including, without limitation, the conflicts of law rules of the State in which
the Building is located) shall be applied to result in the application of any
substantive or procedural laws of any state or country other than the State in
which the Building is located. All controversies, claims, actions or causes of
action arising between the parties hereto and/or their respective successors and
assigns, shall be brought, heard and adjudicated by the courts of the State of
California, with venue in the County of San Francisco. Each of the parties
hereto hereby consents to personal jurisdiction by the courts of the State of
California in connection with any such controversy, claim, action or cause of
action, and each of the parties hereto consents to service of process by any
means authorized by the law of the State in which the Building is located and
consent to the enforcement of any judgment so obtained in the courts of the
State in which the Building is located on the same terms and conditions as if
such controversy, claim, action or cause of action had been originally heard and
adjudicated to a final judgment in such courts. Each of the parties hereto
further acknowledges that the laws and courts of the State in which the Building
is located were freely and voluntarily chosen to govern this Lease and to
adjudicate any claims or disputes hereunder.

30.15 Exhibits. All exhibits attached to this Lease are a part hereof and are
incorporated herein by reference and all provisions of such exhibits shall
constitute agreements, promises and covenants of this Lease.

30.16 Captions. The captions and headings used in this Lease are for convenience
only and in no way define or limit the scope, interpretation or content of this
Lease.

30.17 Counterparts. This Lease may be executed in one (1) or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

30.18 Time of essence. Each of Tenant’s covenants herein is a condition and time
is of the essence with respect to the performance of every provision of this
Lease.

30.19 Survival of obligations. Any obligations of Tenant occurring prior to the
expiration or earlier termination of this Lease shall survive such expiration or
earlier termination.

30.20 Confidentiality. Tenant acknowledges that the content of this Lease and
any related documents are confidential information. Tenant shall keep such
confidential information

 

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strictly confidential and shall not disclose such confidential information to
any person or entity other than Tenant’s financial, legal and space planning
consultants and any proposed subtenants or assignees.

30.21 NO OPTION. THE SUBMISSION OF THIS LEASE BY LANDLORD, ITS AGENT OR
REPRESENTATIVE FOR EXAMINATION OR EXECUTION BY TENANT DOES NOT CONSTITUTE AN
OPTION OR OFFER TO LEASE THE PREMISES UPON THE TERMS AND CONDITIONS CONTAINED
HEREIN OR A RESERVATION OF THE PREMISES IN FAVOR OF TENANT, IT BEING INTENDED
HEREBY THAT THIS LEASE SHALL ONLY BECOME EFFECTIVE UPON THE EXECUTION HEREOF BY
LANDLORD AND DELIVERY OF A FULLY EXECUTED LEASE TO TENANT.

30.22 Use of building name; improvements. Tenant shall not be allowed to use the
name, picture or representation of the Building, or words to that effect, in
connection with any business carried on in the Premises or otherwise (except as
Tenant’s address) without the prior written consent of Landlord. In the event
that Landlord undertakes any additional improvements on the property on which
the Building is located including, but not limited to, new construction or
renovation or additions to the existing improvements, Landlord shall not be
liable to Tenant for any noise, dust, vibration or interference with access to
the Premises or disruption in Tenant’s business caused thereby.

30.23 Right of landlord to perform. All covenants and agreements to be performed
by Tenant under any of the terms of this Lease shall be performed by Tenant at
Tenant’s sole cost and expense and without any abatement of Rent. If Tenant
shall fail to pay any sum of money, other than Rent, required to be paid by it
hereunder or shall fail to perform any other act on its part to be performed
hereunder, and such failure shall continue beyond any applicable cure period set
forth in this Lease, Landlord may, but shall not be obligated to, without
waiving or releasing Tenant from any obligations of Tenant, make any such
payment or perform any such other act on Tenant’s part to be made or performed
as is in this Lease provided. All sums so paid by Landlord and all reasonable
incidental costs, together with interest thereon at the rate of twelve percent
(12%) per annum from the date of such payment by Landlord, shall be payable to
Landlord on demand and Tenant covenants to pay any such sums, and Landlord shall
have (in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of the nonpayment thereof by Tenant as in the case of
default by Tenant in the payment of the Rent.

30.24 Access, changes in project, facilities, name.

30.24.1 Every part of the Building except the inside surfaces of all walls,
windows and doors bounding the Premises (including exterior building walls, core
corridor walls and doors and any core corridor entrance), and any space in or
adjacent to the Premises used for shafts, stacks, pipes, conduits, fan rooms,
ducts, electric or other utilities, sinks or other building facilities, and the
use thereof, as well as access thereto through the Premises for the purposes of
operation, maintenance, decoration and repair, are reserved to Landlord.

30.24.2 Tenant shall permit Landlord to install, use and maintain pipes, ducts
and conduits within the walls, columns and ceilings of the Premises.

 

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30.24.3 Landlord reserves the right, without incurring any liability to Tenant
therefor, to make such changes in or to the Building and the fixtures and
equipment thereof, as well as in or to the street entrances, halls, passages,
elevators, stairways and other improvements thereof, as it may deem necessary or
desirable.

30.24.4 Landlord may adopt any name for the Building and Landlord reserves the
right to change the name or address of the Building at any time.

30.25 Anti-terrorism representation. Neither Tenant nor any of its affiliates
have engaged in any dealings or transactions, directly or indirectly, (i) in
contravention of any U.S., international or other money laundering regulations
or conventions, including, without limitation, the United States Bank Secrecy
Act, the United States Money Laundering Control Act of 1986, the United States
International Money Laundering Abatement and Anti-Terrorist Financing Act of
2001, Trading with the Enemy Act (50 U.S.C. §1 et seq., as amended), or any
foreign asset control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto, or (ii) in contravention of Executive Order
No. 13,244,66 Fed. Reg. 49,079 (2001) issued by the President of the United
States (Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism), as may be amended
or supplemented from time to time (“Anti-Terrorism Order”) or on behalf of
terrorists or terrorist organizations, including those persons or entities that
are included on any relevant lists maintained by the United Nations, North
Atlantic Treaty Organization, Organization of Economic Cooperation and
Development, Financial Action Task Force, U.S. Office of Foreign Assets Control,
U.S. Securities & Exchange Commission, U.S. Federal Bureau of Investigation,
U.S. Central Intelligence Agency, U.S. Internal Revenue Service, or any country
or organization, all as may be amended from time to time. Neither Tenant nor any
of its affiliates are a person described in section 1 of the Anti-Terrorism
Order and neither Tenant nor any of its affiliates have engaged in any dealings
or transactions, or otherwise been associated with any such person. If at any
time this representation becomes false then it shall be considered a default
under this Lease and Landlord shall have the right to exercise all of the
remedies set forth in this Lease in the event of a default.

30.26 Identification of Tenant. If Tenant constitutes more than one person or
entity, (A) each of them shall be jointly and severally liable for the keeping,
observing and performing of all of the terms, covenants, conditions and
provisions of this Lease to be kept, observed and performed by Tenant, (B) the
term “Tenant” as used in this Lease shall mean and include each of them jointly
and severally, and (C) the act of or notice from, or notice or refund to, or the
signature of, any one or more of them, with respect to the tenancy of this
Lease, including, but not limited to, any renewal, extension, expiration,
termination or modification, of this Lease, shall be binding upon each and all
of the persons or entities executing this Lease as Tenant with the same force
and effect as if each and all of them had so acted or so given or received such
notice or refund or so signed.

If Tenant is a partnership (or is comprised of two or more persons, individually
and as co-partners of a partnership) or if Tenant’s interest in this Lease shall
be assigned to a partnership (or to two or more persons, individually and as
co-partners of a partnership) pursuant to Article 16 hereof (any such
partnership and such persons hereinafter referred to in this Paragraph 30.26.2

 

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as “Partnership Tenant”), the following provisions of this Lease shall apply to
such Partnership Tenant:

30.26.1 The liability of each of the parties comprising Partnership Tenant shall
be joint and several.

30.26.2 Each of the parties comprising Partnership Tenant hereby consents in
advance to, and agrees to be bound by, any written instrument which may
hereafter be executed, changing, modifying or discharging this Lease, in whole
or in part, or surrendering all or any part of the Premises to Landlord, and by
notices, demands, requests or other communication which may hereafter be given,
by the individual or individuals authorized to execute this Lease on behalf of
Partnership Tenant under Paragraph 30.26. above.

30.26.3 Any bills, statements, notices, demands, requests or other
communications given or rendered to Partnership Tenant or to any of the parties
comprising Partnership Tenant shall be deemed given or rendered to Partnership
Tenant and to all such parties and shall be binding upon Partnership Tenant and
all such parties.

30.26.4 If Partnership Tenant admits new partners, all of such new partners
shall, by their admission to Partnership Tenant, be deemed to have assumed
performance of all of the terms, covenants and conditions of this Lease on
Tenant’s part to be observed and performed.

30.26.5 Partnership Tenant shall give prompt notice to Landlord of the admission
of any such new partners, and, upon demand of Landlord, shall cause each such
new partner to execute and deliver to Landlord an agreement in form satisfactory
to Landlord, wherein each such new partner shall assume performance of all of
the terms, covenants and conditions of this Lease on Partnership Tenant’s part
to be observed and performed (but neither Landlord’s failure to request any such
agreement nor the failure of any such new partner to execute or deliver any such
agreement to Landlord shall terminate the provisions of clause 30.26.4 of this
Article 30.26 or relieve any such new partner of its obligations thereunder).

ARTICLE 31

RIGHT OF FIRST NEGOTIATION

Provided Tenant is not then in default hereunder, Landlord hereby grants Tenant
a one-time right (“First Right”) to lease any space on the second floor of the
Building that is “available” for leasing (“First Right Space”) in accordance
with and subject to the provisions of this Article.

31.1 Notice of Availability. At any time between the date of this Lease and the
end of the third full year of the Term, prior to leasing any available First
Right Space, or any portion thereof, to any other party during the period that
this First Right is in effect, Landlord shall give Tenant written notice of the
basic economic terms including but not limited to the base rent, term, operating
and tax expense base, security deposit, and tenant improvement allowance
(collectively, the “Economic Terms”), upon which Landlord is willing to lease
the First Right Space to Tenant or to a third party. If Landlord intends to
lease other space in addition to the

 

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First Right Space as part of a single transaction, then Landlord’s notice shall
so provide and all such space shall collectively be subject to the following
provisions. Within 5 business days after receipt of Landlord’s notice, Tenant
must give Landlord written notice pursuant to which Tenant shall elect to
(i) lease all, but not less than all, of the space specified in Landlord’s
notice (the “Designated Space”) upon the Economic Terms and the same
non-Economic Terms as set forth in this Lease, or (ii) refuse to lease the
Designated Space. If Tenant does not respond in writing to Landlord’s notice
within the 5 business day period, Tenant shall be deemed to have elected clause
(ii) above. If Tenant timely elects to lease the Designated Space, then Landlord
shall promptly prepare and deliver to Tenant an amendment to this Lease
consistent with the foregoing, and Tenant shall execute and return the amendment
to Landlord within 10 days Tenant’s failure to timely return the amendment shall
entitle Landlord to lease the Designated Space to a third party on any terms
acceptable to Landlord without regard to the Economic Terms or to specifically
enforce Tenant’s commitment to lease the Designated Space or pursue any other
available legal remedy. If Tenant (x) fails to timely elect to lease the
Designated Space, or (y) having elected to lease the Designated Space, fails to
timely return to Landlord the amendment to this Lease, the First Right shall
terminate and shall thereafter have no further force or effect and Landlord may
lease all or any part of the First Right Space to a third party on any terms
determined by Landlord in its sole discretion including without limitation
economic terms that are more favorable to a third party than the Economic Terms
proposed by Landlord to Tenant.

31.2 Superior Rights. Notwithstanding anything to the contrary in this Article
31: (i) Tenant’s First Right shall be subject to any extension or expansion
rights previously granted by Landlord to any third party tenant in the Building,
(ii) in no event shall any such First Right Space be deemed available for
leasing unless the then-existing tenant thereof shall vacate that First Right
Space (collectively, the “Superior Rights”), and (iii) the First Right Space
shall not be deemed to be available while any Superior Rights are in effect.

31.3 First Right Personal to Tenant. Tenant’s rights under this Article 31 shall
be personal to the original Tenant named in this Lease and may not be assigned
or transferred, except in connection with an assignment of this Lease expressly
permitted in this Lease without the consent of Landlord. Any other attempted
assignment or transfer shall be void and of no force or effect.

SIGNATURES ON FOLLOWING PAGE

 

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SIGNATURE PAGE

TO

OFFICE LEASE

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
duly executed this Lease with the Exhibits attached hereto, as of the date first
set forth above.

 

LANDLORD:   CREA SPEAR STREET TERRACE LLC   a Delaware limited liability company
    By:   CORNERSTONE REAL ESTATE ADVISERS, LLC,       a Delaware limited
liability company, its authorized agent       By:  

/s/ John T. Kennedy

        John T. Kennedy         Vice President TENANT:   MEDIVATION, INC.,   a
Delaware corporation   By:  

/s/ C. Patrick Machado

  Name:  

C. Patrick Machado

  Title:  

CFO

  By:  

/s/ DAVID HUNG

  Name:  

DAVID HUNG

  Title:  

CEO

 

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CERTIFICATE OF TENANT

(IF A CORPORATION OR PARTNERSHIP)

I, C. Patrick Machado, of Medivation, Inc., Tenant, hereby certify that the
officers executing the foregoing Lease on behalf of Tenant is/are duly
authorized to act on behalf of and bind Tenant.

 

  (CORPORATE SEAL)      DATE:     

18 Apr. 07

    

/s/ C. Patrick Machado

          SECRETARY OR GENERAL PARTNER

 

1

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EXHIBIT A

TO

OFFICE LEASE

PLAN SHOWING PROPERTY

AND PREMISES

 

A-1

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

EXHIBIT A

TO

OFFICE LEASE

LOGO [g161521g88r03.jpg]

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

EXHIBIT B

TO

OFFICE LEASE

TENANT WORK LETTER

This Tenant Work Letter shall set forth the terms and conditions relating to the
construction of the Tenant Improvements (as hereinafter defined) in the
Premises. This Tenant Work Letter is essentially organized chronologically and
addresses the issues of the renovation of the Premises, in sequence, as such
issues will arise.

SECTION 1

LANDLORD’S INITIAL CONSTRUCTION IN THE PREMISES

Landlord has constructed the base, shell and core (i) of the Premises, and
(ii) of the floor of the Building on which the Premises is located
(collectively, the “Base, Shell and Core”). Tenant has inspected and hereby
approves the condition of the Base, Shell and Core, and agrees that the Base,
Shell and Core shall be delivered to Tenant in its current “AS-IS” condition.
The Tenant Improvements to be installed in the Premises shall be designed and
constructed pursuant to this Tenant Work Letter.

SECTION 2

IMPROVEMENTS

2.1 Tenant Obligations to Complete the Tenant Improvements. Subject to the
provisions of this Section 2.1, Tenant shall be responsible for completing the
design, permitting and construction of the Tenant Improvements as defined below.
Tenant shall be entitled to a one-time improvement allowance (the “Construction
Allowance”) in the amount of up to Five Hundred Eighty Thousand Seven Hundred
Twenty Dollars ($580,720.00) ($35 per square foot for the 16,592 rentable square
feet that the parties agree comprise the Premises) for the costs relating to the
initial design and construction of Tenant’s improvements which are permanently
affixed to the Premises (the “Tenant Improvements”) and for the other purposes
set forth in this Tenant Work Letter and the Lease. In no event shall Landlord
be obligated to make disbursements pursuant to this Tenant Work Letter in a
total amount which exceeds the Construction Allowance and in no event shall
Tenant be entitled to any credit for any unused portion of the Construction
Allowance not used by Tenant by the October 31, 2007. Notwithstanding the
foregoing, if the cost of the Construction Allowance Items (as defined below) is
more than Four Hundred Fourteen Thousand Eight Hundred Dollars $414,800.00 ($25
per square foot for the 16,592 rentable square feet that the parties agree
comprise the Premises) but less than $580,720.00 (such difference being referred
to as the “Amortized Amount”), Tenant

 

B-1

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may either pay the Amortized Amount to Landlord within 5 days after the Cost
Proposal Delivery Date (which Landlord shall then disburse for the Construction
Allowance Items as provided in this Work Letter) or may pay Landlord the
Amortized Amount as Additional Rent to Landlord at the time Monthly Rent is due
pursuant to the Lease in a monthly amount that fully amortizes the Amortized
Amount in equal monthly installments over the Term, plus an interest rate often
percent (10%) per annum on the unamortized balance of the Amortized Amount.
Tenant may further elect at any time prepay to Landlord in full any then
outstanding balance of the Amortized Amount. Any cost of the Construction
Allowance Items in excess of the Construction Allowance shall be referred to
herein as the “Over Allowance Amount” and shall be the responsibility of Tenant.

2.2 Disbursement of the Construction Allowance. The Construction Allowance shall
be disbursed by Landlord pursuant to Landlord’s standard disbursement process in
installments which shall occur no more than once in any 30-day period for costs
related to the construction of the Tenant Improvements (including any Steel Case
branded product that is permanently affixed to the improvements in the Premises,
such as walls, kitchen cabinets and millwork) and for the following items and
costs (collectively, the “Construction Allowance Items”): (i) payment of the
fees of the “Architect” and the “Engineers,” as those terms are defined in
Section 3.1 of this Tenant Work Letter, 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
Drawings,” as that term is defined in Section 3.1 of this Tenant Work Letter;
(ii) the cost of permits and any changes in the Base, Shell and Core of the
Building, required by the Construction Drawings; (iii) the cost of any changes
to the Construction Drawings or Tenant Improvements required by applicable
building codes (the “Code”); and (iv) a Landlord supervision fee of two and one
half percent (2 1/2%) of the total of the costs related to the construction of
the Tenant Improvements plus the costs of the preceding items (i) through (iii).

2.3 Standard Improvement Package. Landlord has established specifications (the
“Specifications”) for the Building standard components to be used in the
construction of the Tenant Improvements in the Premises (collectively, the
“Standard Improvement Package”), which Specifications are available upon
request. The quality of Tenant Improvements shall be equal to or of greater
quality than the quality of the Specifications, provided that Landlord may, at
Landlord’s option, require the Tenant Improvements to comply with certain
Specifications.

SECTION 3

CONSTRUCTION DRAWINGS

3.1 Selection of Architect/Construction Drawings. Tenant shall retain Pollack
Architects (the “Architect”) to prepare the “Construction Drawings,” as that
term is defined in this Section 3.1. Landlord shall also retain engineering
consultants designated by Landlord (the “Engineers”) to prepare all plans and
engineering working drawings relating to the structural, mechanical, electrical,
plumbing, HVAC and life safety work of the Tenant Improvements. The plans and
drawings to be prepared by Architect and the Engineers hereunder shall be known
collectively as the “Construction Drawings.” All Construction Drawings shall

 

B-2

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comply with the drawing format and specifications as reasonably determined by
Landlord, and shall be subject to Landlord’s reasonable approval. Tenant and
Architect shall verify, in the field, the dimensions and conditions as shown on
the relevant portions of the base building plans, and Tenant and Architect shall
be solely responsible for the same, and Landlord shall have no responsibility in
connection therewith. Landlord’s review of the Construction Drawings as set
forth in this Section 3, shall be for its sole purpose and shall not imply
Landlord’s review of the same, or obligate Landlord to review the same, for
quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord’s
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings.

3.2 Final Space Plan. Plan Architect has prepared and Landlord and Tenant have
reviewed and approved the final space plan and certain specifications for the
Tenant Improvements in the Premises attached to this Tenant Landlord Work Letter
as Attachment 1 (collectively, the “Final Space Plan”).

3.3 Working Drawings. The Architect and the Engineers shall complete the
architectural and engineering drawings for the Premises in conformity with the
Final Space Plan in a form which is complete to allow subcontractors to bid on
the work and to obtain all applicable permits (collectively, the “Working
Drawings”) and shall submit the same to Landlord for its approval which shall
not be unreasonably withheld or delayed. Landlord shall respond with its
approval or disapproval of the Working Drawings within 5 business days of
receipt thereof. In the event that Landlord fails to disapprove the Working
Drawings within such 5 business day period, Landlord shall be deemed to have
approved the Working Drawings Within 3 days after Landlord approval or deemed
approval of the Working Drawings, Tenant shall deliver to Landlord a set of the
Working Drawings signed by Tenant.

3.4 Permits. The Working Drawings approved by Landlord shall be known as the
“Approved Working Drawings” Tenant shall cause the Architect to immediately
submit the Approved Working Drawings to the appropriate municipal authorities
for all applicable building permits necessary to allow “Contractor,” as that
term is defined in Section 4.1, below, to commence and fully complete the
construction of the Tenant Improvements (the “Permits”) No changes,
modifications or alterations in the Approved Working Drawings may be made
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld.

3.5 Time Deadlines. Landlord and Tenant shall each use their best, good faith
efforts and all due diligence to cooperate with each other, the Architect and
the Engineers to complete the permitting process and to receive the permits,
and, if applicable, with the Contractor for approval of the “Cost Proposal,” as
that term is defined in Section 4.2 of this Tenant Landlord Work Letter, as soon
as possible after the execution of the Lease, and, in that regard, shall meet on
a scheduled basis to be approved by Landlord to discuss the progress of the
permitting process and the preparation of the Cost Proposal and the construction
of the Tenant Improvements.

 

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SECTION 4

CONSTRUCTION OF THE IMPROVEMENTS

4.1 Contractor. The contractor that shall construct the Tenant Improvements
shall be a contractor selected by Tenant and approved by Landlord. The
contractor selected may be referred to herein as the “Contractor”.

4.2 Cost Proposal. After the Approved Working Drawings are approved by Landlord
and Tenant, Tenant shall provide Landlord with a cost proposal from the
Contractor in accordance with the Approved Working Drawings, which cost proposal
shall include, as nearly as possible, the cost of all Construction Allowance
Items to be incurred by Landlord and Tenant in connection with the construction
of the Tenant Improvements (the “Cost Proposal”) Landlord shall review and
either approve or disapprove and deliver the Cost Proposal to Tenant within 5
business days of the receipt of the same. Landlord’s approval of the Cost
Proposal shall not be unreasonably withheld or conditioned. If Landlord
disapproves any aspect of the Cost Proposal, Landlord shall specify in writing
the reasons for such disapproval and shall specify reasonable revisions to the
Cost Proposal that would be approved by Landlord. If Landlord fails to issue a
written approval or disapproval of the Cost Proposal within 5 business days
after Tenant’s delivery of the Cost Proposal to Landlord, then Landlord shall be
deemed to have approved the Cost Proposal. Upon receipt of the Cost Proposal
approved (or deemed approved) by Landlord, Tenant shall purchase the items set
forth in the Cost Proposal and shall commence the construction relating to such
items. The date by which Landlord approves and delivers the approved Cost
Proposal to Tenant shall be known hereafter as the “Cost Proposal Delivery
Date.”

4.3 Construction of Tenant Improvements by Contractor under the Supervision of
Landlord and Tenant.

(i) Over-Allowance Amount. On the Cost Proposal Delivery Date, Tenant shall
deliver to Landlord an amount (the “Over-Allowance Amount”) equal to the
difference between (i) the amount of the Cost Proposal and (ii) the amount of
the Construction Allowance (less any portion thereof already disbursed or
incurred by Landlord, or in the process of being disbursed by Landlord, on or
before the Cost Proposal Delivery Date). The Over-Allowance Amount shall be
disbursed by Landlord prior to the disbursement of any then remaining portion of
the Construction Allowance, and such disbursement shall be pursuant to the same
procedure as the Construction Allowance. In the event that, after the Cost
Proposal Delivery Date, any revisions, changes, or substitutions shall be made
to the Construction Drawings or the Tenant Improvements, any additional costs
which arise in connection with such revisions, changes or substitutions or any
other additional costs shall be paid by Tenant to Landlord immediately upon
Landlord’s request as an addition to the Over-Allowance Amount.

(ii) Tenant’s Retention of Contractor. Tenant shall independently retain
Contractor, on behalf of Landlord and Tenant, to construct the Tenant
Improvements in accordance with the Approved Working Drawings and the Cost
Proposal and Tenant shall supervise the construction by Contractor. Landlord
shall receive a supervision fee equal to 2 1/2%

 

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of the sum of the Construction Allowance and the Over-Allowance Amount which
amount shall be charged to the Construction Allowance.

SECTION 5

COMPLETION OF THE IMPROVEMENTS

5.1 Tenant’s Responsibility. Subject to reimbursement by Landlord, as provided
in Section 6 of this Work Letter, Tenant, at Tenant’s sole expense, shall be
responsible for the design, plans, approvals, permits, fees, and construction,
for the Tenant Improvements.

5.2 Permits and Code Compliance. The Tenant Improvements shall conform to
governmental approvals and permits, and all applicable local, state and federal
laws, building, health, and safety codes, ordinances, rules, regulations, and
standards. Where discrepancies exist among the various regulations, the
strictest standards shall govern.

5.3 Insurance. Tenant shall indemnify, defend and hold harmless Landlord, and
Landlord’s trustees, beneficiaries, employees and agents, from all liability in
connection with the Tenant Improvements, except for liability arising from
Landlord’s gross negligence or intentionally wrongful acts or omissions. During
the performance of the Tenant Improvements, in addition to other insurance
required under this Lease, Tenant shall provide, or cause its contractor(s) to
provide, insurance as specified in this Section 5.3, and such insurance as may
from time to time be required by city, county, state or federal laws, codes,
regulations or authorities, together with such other insurance as is reasonably
necessary or appropriate under the circumstances. All insurance policies
required under this Exhibit, except as noted above, shall name Landlord,
Landlord’s agents and lenders, and Landlord’s on-site representatives and
employees as additional insureds; except Workers’ Compensation Insurance, which
shall contain an endorsement waiving all rights of subrogation against Landlord,
Landlord’s agents and employees. All policies shall provide that Landlord be
given 30 days prior written notice of any alteration or termination of coverage.

(i) Workers’ Compensation as required by state law and any insurance required by
any employee benefit acts or other statutes applicable where the work is to be
performed as will protect the contractor and subcontractors from any and all
liability under the aforementioned acts.

(ii) Commercial General Liability Insurance (including Contractor’s Protective
Liability) with a combined single limit (bodily injury and property damage) of
not less than $1,000,000.00 per occurrence and $2,000,000 00 in the aggregate.
Such insurance shall provide for explosion, collapse and underground coverage
and contractual liability coverage and shall insure the general contractor
and/or subcontractors against any and all claims for personal injury, including
death resulting therefrom and damage to the property of others and arising from
his operations under the contract, whether such operations are performed by the
general contractor, subcontractors or any of their subcontractors, or by anyone
directly or indirectly employed by any of them. Such insurance policy shall
include (i) a products/completed operations endorsement; (ii) endorsements
deleting the employee exclusion on personal injury and the liquor liability
exclusion; and (iii) a cross-liability endorsement or a severability of

 

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interest clause. Such insurance shall be primary and Landlord’s insurance shall
be excess insurance only.

(iii) Builder’s Risk Insurance. Tenant shall provide an “All Physical Loss”
Builder’s Risk insurance policy on the Tenant Improvements. The policy shall
include as insureds Tenant, its contractor and subcontractors, and Landlord, as
their respective interests may appear within the Premises. The amount of
insurance to be provided shall be one hundred percent (100%) replacement cost.

5.4 Prior to Construction. At least 5 days prior to the commencement of
construction, Tenant shall deliver to Landlord the following:

(i) Construction Budget. An itemized budget showing the cost of the Tenant
Improvements, which shall be subject to Landlord’s review and approval, not to
be unreasonably withheld, conditioned or delayed, and after approval by
Landlord, shall be referred to as the “Approved Budget.”

(ii) Construction Contract. The Construction Contract between Tenant and
Contractor, which shall be subject to Landlord’s review and approval, not to be
unreasonably withheld, conditioned or delayed, and after approval by Landlord,
shall be referred to as the “Construction Contract.”

(iii) Contact List. A list of names, addresses, regular and 24-hour “emergency”
phone numbers, fax numbers and e mail addresses for Tenant’s construction
representative, the Contractor, mechanical and electrical subcontractors, and
any other known subcontractors working at the Premises, plus license numbers for
all contractors and all other parties working at the Premises.

(iv) Schedule. The Schedule for the Tenant Improvements, including starting and
completion dates.

(v) Insurance. Certificates of Insurance as required in Section 5.3 above.

(vi) Permits. Photocopy of permit card(s) for the Tenant Improvements as issued
by applicable governing agencies.

5.5 Construction. The Tenant Improvements shall be constructed in a first-class,
professional manner in conformity with the Approved Working Drawings. Only new,
first-quality materials shall be used.

(i) General Contractor. The Tenant Improvements shall be completed by the
Contractor.

(ii) Safety Regulations. All of the Tenant Improvements must be planned and
conducted in an orderly manner, with the highest regard for the safety of the
public, the workers, and the property, and in conformity with all local,
California and federal job-safety requirements, including OSHA and Cal-OSHA
regulations. If Tenant fails to comply with these

 

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requirements, Landlord shall have the right, at Tenant’s cost, to cause remedial
action as deemed necessary by Landlord to protect the public and the Premises.

(iii) Utilities During Construction. Landlord shall arrange and pay for
temporary utilities and facilities, including electricity, water, sanitary
facilities, etc., as necessary for the completion of the Tenant Improvements.

(iv) Trash Removal and Cleanup. At all times, Tenant shall keep the Premises
clean and free of dirt, dust, stains and trash related to the Tenant
Improvements.

(v) No Other Alterations. All Alterations other than the Tenant Improvements are
subject to Section 5.B of the Lease.

(vi) Guarantees. Tenant shall require the Contractor and its subcontractors to
guarantee in writing their portion of the Tenant Improvements to be free from
defects in workmanship and materials for at least one year and to repair or
replace, without additional charge, all work done under its contract which shall
become defective within such warranty period. All such guarantees must inure to
the benefit of, and be enforceable by, both Landlord and Tenant.

(vii) Building Regulations. All of the Tenant Improvements must be conducted in
accordance with the Contractor Regulations & Guidelines for Tenant and Capital
Improvement Work (“Building Regulations”), a copy of which has been previously
delivered to Tenant. If Tenant fails to comply with the Building Regulations,
Landlord shall have the right, at Tenant’s cost, to cause remedial action as
deemed necessary by Landlord to cause the Tenant Improvements to comply with the
Building Regulations.

5.6 Completion. Within 30 days following the completion of the Tenant
Improvements, Tenant shall deliver to Landlord the following:

(i) Permit Card. Copies of all building permit cards, with all required
governing agency “final” sign offs, indicating that the permit scope has been
completed satisfactorily.

(ii) Guarantees. Copies of guarantees, as described in Paragraph 5.5(vi) of this
Exhibit B.

SECTION 6

CONSTRUCTION ALLOWANCE

6.1 Payment Requests. Landlord shall make disbursements of the Construction
Allowance to Tenant, within the time periods required by the Construction
Contract, subject to the receipt of the following:

(i) A request for payment signed by Tenant which certifies on the form
reasonably acceptable to Landlord, to the best of Tenant’s knowledge, the
percent of the Tenant Improvements covered by the Construction Contract
completed and that percent not completed

 

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as of the date of the payment request, unpaid costs for which invoices have been
received from the Contractor as of the date of the payment request, all costs
projected to be necessary to complete the Tenant Improvements, the application
of all past receipts, and evidence that Tenant has expended or incurred no less
than the requested amount.

(ii) Credits to which Tenant is entitled under the Construction Contract,
specifically deductive change orders.

(iii) Copies of invoices from Tenant’s Contractor and subcontractors, suppliers
and others requesting payment, accompanied by executed Conditional Waivers and
Releases Upon Progress Payment which confirm with the provisions of California
Civil Code Section 3262(d)(1) from Tenant’s Contractor and all other “Potential
Lien Claimants” (defined in Paragraph 6.4 below) who are receiving payments from
a payment request, as to any work performed on and materials delivered to the
Building for which payment is requested in the current payment request.

(iv) Executed Unconditional Waivers and Releases Upon Progress Payment, which
releases conform with the provisions of California Civil Code Section 3262(d)(2)
from Tenant’s Contractor and all other Potential Lien Claimants with regard to
any payments received in the immediately preceding progress payment by any such
Potential Lien Claimant.

(v) After commencement of construction, insurance certificates from Tenant’s
Contractor evidencing insurance required hereunder. Insurance certificates, if
previously provided, need not be provided in connection with each payment
request.

6.2 Payments. Within the period provided in the Construction Contract, and
subject to Tenant’s compliance with the provisions of Section 6.1 above,
Landlord shall deliver a check, in payment of the lesser of: (A) the amounts so
requested by Tenant, as set forth in Section 6.1, less a 10% retention (the
aggregate amount of such retentions to be known as the “Final Retention”) of the
amount of that portion of the request which is subject to the Construction
Contract; or (B) the balance of any remaining available portion of the
Construction Allowance (not including the Final Retention). Landlord’s payment
of any amounts shall not be deemed Landlord’s approval or acceptance of the work
furnished or materials supplied as set forth in Tenant’s payment request. If
Tenant’s Contractor has not submitted the required mechanic’s lien waivers and
releases, Landlord shall withhold from the disbursement an amount equal to 150%
of the value of labor and/or materials for which a mechanic’s lien waiver and
release was not submitted, and the balance of the payment request shall be
disbursed by Landlord subject to Section 6.2(i). The payment check shall be made
payable, at Landlord’s option, as follows:

(i) Jointly to Tenant and the Contractor and any Potential Lien Claimants for
the full amount shown due Tenant’s contractor on the payment request for which
payment is being made (less the applicable retention amount), or

(ii) Individually to Tenant, or, upon request by Tenant, to Tenant’s designee,
for all amounts in excess of the amount shown due Tenant’s contractor on the
payment request for which payment is being made (less the applicable retention
amount).

 

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6.3 Final Retention. Subject to the provisions of this Work Letter, a check for
the Final Retention payable jointly to Tenant’s Designee and the Contractor
shall be delivered by Landlord to Tenant within 3 days after all of the
following have occurred: (i) Tenant has delivered to Landlord original, properly
executed mechanic’s lien releases in compliance with California Civil Code
Section 3262(d)(3) from Tenant’s Contractor, and any Potential Lien Claimants;
(ii) Landlord’s reasonable determination that no substandard work by Tenant’s
Contractor or any other agents of Tenant including the subcontractors of
Tenant’s Contractor exists; (iii) Landlord’s reasonable determination that the
construction of the Tenant Improvements in the Premises has been completed in
accordance with the Approved Plans; (iv) Tenant’s delivery to Landlord of two
blue line sets of drawings with notations indicating material deviations between
the actual construction and the Approved Plans, prepared by Tenant’s Contractor;
(v) all items required pursuant to Section 5.6 of this Exhibit B; and
(vi) Tenant’s written certification that it has accepted the work, subject to
punch list items, warranty items and latent defects Notwithstanding the
foregoing to the contrary, in the event that any Potential Lien Claimants file
or threaten to file a mechanic’s lien against the Premises or do not submit
requisite mechanic’s lien releases, Landlord shall withhold from the Final
Retention an amount equal to 150% of the claimed amount or value of services and
material until the requisite mechanic’s lien releases are delivered to Landlord,
and the balance of the Final Retention shall be released.

6.4 Potential Lien Claimants. The term “Potential Lien Claimants” shall mean
those persons and entities who are engaged by Tenant or Tenant’s Contractor or
agents and are described in Sections 3110 and 3111 of the California Civil Code
who are entitled to lien rights, but only to the extent that the claimant
complies with the preliminary 20-day notice requirement of Section 3087 of the
California Civil Code, if required by such section.

SECTION 7

MISCELLANEOUS

7.1 Tenant’s Representative. Tenant has designated The Staubach Company (Nolen
Boyer) Michelle Stanley - Medivation 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.

7.2 Landlord’s Representative. Prior to commencement of construction of the
Tenant Improvements, Landlord shall designate a representative with respect to
the matters set forth in this Tenant Work Letter, who, 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.

7.3 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.

 

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ATTACHMENT 1

TO

TENANT LANDLORD WORK LETTER

FINAL SPACE PLAN

 

Attachment 1 to “Work Letter”

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LOGO [g161521g47b12.jpg]

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EXHIBIT C

TO

OFFICE LEASE

INTENTIONALLY OMITTED

 

C-1

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EXHIBIT D

TO

OFFICE LEASE

BUILDING RULES AND REGULATIONS

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BUILDING RULES AND REGULATIONS

1. The sidewalks, entrances, passages, courts, elevators, vestibules, stairways,
corridors or halls of the Building shall not be obstructed or encumbered or used
for any purpose other than ingress and egress to and from the premises demised
to any tenant or occupant.

2. No awnings or other projection shall be attached to the outside walls or
windows of the Building without the prior consent of Landlord. No curtains,
blinds, shades, or screens shall be attached to or hung in, or used in
connection with, any window or door of the premises demised to any tenant or
occupant, without the prior consent of Landlord. Such awnings, projections,
curtains, blinds, shades, screens or other fixtures must be of a quality, type,
design and color, and attached in a manner, approved by Landlord.

3. No sign, advertisement, object, notice or other lettering shall be exhibited,
inscribed, painted or affixed on any part of the outside or inside of the
premises demised to any tenant or occupant of the Building without the prior
consent of Landlord. Interior signs on doors and directory tables, if any, shall
be of a size, color and style approved by Landlord.

4. The sashes, sash doors, skylights, windows, and doors that reflect or admit
light and air into the halls, passageways or other public places in the Building
shall not be covered or obstructed, nor shall any bottles, parcels, or other
articles be placed on any window sills.

5. No show cases or other articles shall be put in front of or affixed to any
part of the exterior of the Building, nor placed in the halls, corridors,
vestibules or other public parts of the Building.

6. The water and wash closets and other plumbing fixtures shall not be used for
any purposes other than those for which they were constructed, and no sweepings,
rubbish, rags, or other substances shall be thrown therein. No tenant shall
bring or keep, or permit to be brought or kept, any inflammable, combustible,
explosive or hazardous fluid, materials, chemical or substance in or about the
premises demised to such tenant.

7. No tenant or occupant shall mark, paint, drill into, or in any way deface any
part of the Building or the premises demised to such tenant or occupant. No
boring, cutting or stringing of wires shall be permitted, except with the prior
consent of Landlord, and as Landlord may direct. No tenant or occupant shall
install any resilient tile or similar floor covering in the premises demised to
such tenant or occupant except in a manner approved by Landlord.

8. No vehicles or animals of any kind shall be brought into or kept in or about
the premises demised to any tenant. No cooking shall be done or permitted in the
Building by any tenant without the approval of Landlord. No tenant shall cause
or permit any unusual or objectionable odors to emanate from the premises
demised to such tenant.

9. No space in the Building shall be used for manufacturing, for the storage of
merchandise, or for the sale of merchandise, goods, or property of any kind at
auction, without the prior consent of Landlord.

 

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10. No tenant shall make, or permit to be made, any unseemly or disturbing
noises or disturb or interfere with other tenants or occupants of the Building
or neighboring buildings or premises whether by the use of any musical
instrument, radio, television set or other audio device, unmusical noise,
whistling, singing, or in any other way. Nothing shall be thrown out of any
doors or window.

11. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows, nor shall any changes be made in locks or the mechanism
thereof. Each tenant must, upon the termination of its tenancy, restore to
Landlord all keys of stores, offices and toilet rooms, either furnished to, or
otherwise procured by, such tenant.

12. All removals from the Building, or the carrying in or out of the Building or
the premises demised to any tenant, of any safes, freight, furniture or bulky
matter of any description must take place at such time and in such manner as
Landlord or its agents may determine, from time to time. Landlord reserves the
right to inspect all freight to be brought into the Building and to exclude from
the Building all freight which violates any of the Rules and Regulations or the
provisions of such tenant’s lease.

13. No tenant shall use or occupy, or permit any portion of the premises demised
to such tenant to be used or occupied, as an office for a public stenographer or
typist, or to a barber or manicure shop, or as an employment bureau. No tenant
or occupant shall engage or pay any employees in the Building, except those
actually working for such tenant or occupant in the Building, nor advertise for
laborers giving an address at the Building.

14. No tenant or occupant shall purchase spring water, ice, food, beverage,
lighting maintenance, cleaning towels or other like service, from any company or
person not approved by Landlord. No vending machines of any description shall be
installed, maintained or operated upon the premises demised to any tenant
without the prior consent of Landlord.

15. Landlord shall have the right to prohibit any advertising by any tenant or
occupant which, in Landlord’s opinion, tends to impair the reputation of the
Building or its desirability as a building for offices, and upon notice from
Landlord, such tenant or occupant shall refrain from or discontinue such
advertising.

16. Landlord reserves the right to exclude from the Building, between the hours
of 6:00 P.M. and 8:00 AM. on business days and at all hours on Saturdays,
Sundays and holidays, all persons who do not present a pass to the Building
signed by Landlord. Landlord will furnish passes to persons for whom any tenant
requests such passes. Each tenant shall be responsible for all persons for whom
it requests such passes and shall be liable to Landlord for all acts of such
persons.

17. Each tenant, before closing and leaving the premises demised to such tenant
at any time, shall see that all entrance doors are locked and all windows
closed. Corridor doors, when not in use, shall be kept closed.

18. Each tenant shall, at its expense, provide artificial light in the premises
demised to such tenant for Landlord’s agents, contractors and employees while
performing janitorial or other cleaning services and making repairs or
alterations in said premises.

 

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19. No premises shall be used, or permitted to be used for lodging or sleeping,
or for any immoral or illegal purposes.

20. The requirements of tenants will be attended to only upon application at the
office of Landlord. Building employees shall not be required to perform, and
shall not be requested by any tenant or occupant to perform, and work outside of
their regular duties, unless under specific instructions from the office of
Landlord.

21. Canvassing, soliciting and peddling in the Building are prohibited and each
tenant and occupant shall cooperate in seeking their prevention.

22. There shall not be used in the Building, either by any tenant or occupant or
by their agents or contractors, in the delivery or receipt of merchandise,
freight, or other matter, any hand trucks or other means of conveyance except
those equipped with rubber tires, rubber side guards and such other safeguards
as Landlord may require.

23. If the Premises demised to any tenant become infested with vermin, such
tenant, at its sole cost and expense, shall cause its premises to be
exterminated, from time to time, to the satisfaction of Landlord, and shall
employ such exterminators therefor as shall be approved by Landlord.

24. No premises shall be used, or permitted to be used, at any time, without the
prior approval of Landlord, as a store for the sale or display of goods, wares
or merchandise of any kind, or as a restaurant, shop, booth, bootblack or other
stand, or for the conduct of any business or occupation which predominantly
involves direct patronage of the general public in the premises demised to such
tenant, or for manufacturing or for other similar purposes.

25. No tenant shall clean any window in the Building from the outside.

26. No tenant shall move, or permit to be moved, into or out of the Building or
the premises demised to such tenant, any heavy or bulky matter, without the
specific approval of Landlord. If any such matter requires special handling,
only a qualified person shall be employed to perform such special handling. No
tenant shall place, or permit to be placed, on any part of the floor or floors
of the premises demised to such tenant, a load exceeding the floor load per
square foot which such floor was designed to carry and which is allowed by law.
Landlord reserves the right to prescribe the weight and position of safes and
other heavy matter, which must be placed so as to distribute the weight.

27. Landlord shall provide and maintain an alphabetical directory board in the
first floor (main lobby) of the Building and no other directory shall be
permitted without the prior consent of Landlord. Each tenant shall be allowed
one line on such board unless otherwise agreed to in writing.

28. With respect to work being performed by a tenant in its premises with the
approval of Landlord, the tenant shall refer all contractors, contractors’
representatives and installation technicians to Landlord for its supervision,
approval and control prior to the performance of any work or services. This
provision shall apply to all work performed in the Building including
installation of telephones, telegraph equipment, electrical devices and

 

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attachments, and installations of every nature affecting floors, walls,
woodwork, trim, ceilings, equipment and any other physical portion of the
Building.

29. Landlord shall not be responsible for lost or stolen personal property,
equipment, money, or jewelry from the premises of tenants or public rooms
whether or not such loss occurs when the Building or the premises are locked
against entry.

30. Landlord shall not permit entrance to the premises of tenants by use of pass
keys controlled by Landlord, to any person at any time without written
permission from such tenant, except employees, contractors, or service personnel
directly supervised by Landlord and employees of the United States Postal
Service.

31. Each tenant and all of tenant’s employees and invitees shall observe and
comply with the driving and parking signs and markers on the Land surrounding
the Building, and Landlord shall not be responsible for any damage to any
vehicle towed because of noncompliance with parking regulations.

32. Without Landlord’s prior approval, no tenant shall install any radio or
television antenna, loudspeaker, music system or other device on the roof or
exterior walls of the Building or on common walls with adjacent tenants.

33. Each tenant shall store all trash and garbage within its premises or in such
other areas specifically designated by Landlord. No materials shall be placed in
the trash boxes or receptacles in the Building unless such materials may be
disposed of in the ordinary and customary manner of removing and disposing of
trash and garbage and will not result in a violation of any law or ordinance
governing such disposal. All garbage and refuse disposal shall be only through
entry ways and elevators provided for such purposes and at such times as
Landlord shall designate.

34. No tenant shall employ any persons other than the janitor or Landlord for
the purpose of cleaning its premises without the prior consent of Landlord. No
tenant shall cause any unnecessary labor by reason of its carelessness or
indifference in the preservation of good order and cleanliness. Janitor service
shall include ordinary dusting and cleaning by the janitor assigned to such work
and shall not include beating of carpets or rugs or moving of furniture or other
special services. Janitor service shall be furnished Mondays through Fridays,
legal holidays excepted; janitor service will not be furnished to areas which
are occupied after 9:30 P.M. Window cleaning shall be done only by Landlord, and
only between 6:00 A.M. and 5:00 P.M.

 

D-4

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EXHIBIT E

TO

OFFICE LEASE

COMMENCEMENT DATE CONFIRMATION

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COMMENCEMENT DATE CONFIRMATION

DECLARATION BY LANDLORD AND TENANT AS TO DATE OF

DELIVERY AND ACCEPTANCE OF POSSESSION OF PREMISES

Attached to and made a part of the Lease dated the      day of
                    , 200    , entered into and by CREA SPEAR STREET TERRACE LLC
as LANDLORD and MEDIVATION, INC., as TENANT.

LANDLORD AND TENANT do hereby declare that possession of the Premises was
accepted by TENANT on                     , 200    .

The Premises required to be constructed and finished by LANDLORD in accordance
with the provisions of the Lease have been satisfactorily completed by LANDLORD
and accepted by TENANT, the Lease is now in full force and effect, and as of the
date hereof, LANDLORD has fulfilled all of its obligations under the Lease.

The Lease Commencement Date is hereby established as                     ,
200    .

The Term of this Lease shall terminate on                     , 200    .

SIGNATURES ON FOLLOWING PAGE

 

E-1

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SIGNATURE PAGE

TO

COMMENCEMENT DATE CONFIRMATION

 

LANDLORD:   CREA SPEAR STREET TERRACE LLC,   a Delaware limited liability
company     By:   CORNERSTONE REAL ESTATE ADVISERS, LLC,       a Delaware
limited liability company, its authorized agent       By:  

 

        John T. Kennedy         Vice President TENANT:   MEDIVATION, INC.,   a
Delaware corporation   By:  

 

  Name:  

 

  Title:  

 

  By:  

 

  Name:  

 

  Title:  

 

 

F-1