Exhibit 10.04

TRIPLE-NET OFFICE LEASE

(SINGLE-TENANT)

BETWEEN

3111-3141 CORONADO DRIVE ASSOCIATES, LLC,

a Delaware limited liability company

LANDLORD

AND

INFOBLOX INC.,

a Delaware corporation

TENANT

 

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TABLE OF CONTENTS

          Page   1.   

BASIC LEASE TERMS

     1    2.   

PREMISES.

     2    3.   

ADJUSTMENT OF COMMENCEMENT DATE; POSSESSION.

     2    4.   

RENT.

     3    5.   

OPERATING EXPENSES.

     3    6.   

SECURITY DEPOSIT

     4    7.   

USE.

     4    8.   

NOTICES

     5    9.   

BROKERS

     6    10.   

SURRENDER; HOLDING OVER.

     6    11.   

TAXES.

     6    12.   

ALTERATIONS.

     7    13.   

REPAIRS.

     8    14.   

LIENS

     9    15.   

ENTRY BY LANDLORD

     9    16.   

UTILITIES AND SERVICES

     10    17.   

ASSUMPTION OF RISK AND INDEMNIFICATION.

     10    18.   

INSURANCE.

     11    19.   

DAMAGE OR DESTRUCTION.

     12    20.   

EMINENT DOMAIN.

     14    21.   

DEFAULTS AND REMEDIES.

     14    22.   

LANDLORD’S DEFAULT

     16    23.   

ASSIGNMENT AND SUBLETTING.

     17    24.   

SUBORDINATION

     19    25.   

ESTOPPEL CERTIFICATE

     19    26.   

EASEMENTS

     20    27.   

RULES AND REGULATIONS

     20    28.   

MODIFICATION AND CURE RIGHTS OF LANDLORD’S MORTGAGEES AND LESSORS

     20    29.   

DEFINITION OF LANDLORD

     20    30.   

WAIVER

     20    31.   

PARKING

     20    32.   

FORCE MAJEURE

     21    33.   

EXTERIOR SIGNAGE

     21    34.   

LIMITATION ON LIABILITY

     21    35.   

FINANCIAL STATEMENTS

     22    36.   

QUIET ENJOYMENT

     22    37.   

AUCTIONS

     22    38.   

MISCELLANEOUS.

     22    39.   

EXECUTION OF LEASE.

     23    EXHIBITS    A    Site Plan Showing Premises    B    Work Letter    C
   Estoppel Certificate    D    Form of SNDA    E    Rules and Regulations    F
   Recorded Restrictions   

 

RIDERS      

Rider No. 1

   Extension Option Rider

Rider No. 2

   Fair Market Rental Rate Rider No. 3    Options in General

Rider No. 4

   Letter of Credit Rider

 

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TRIPLE-NET OFFICE LEASE

CALIFORNIA

BIXBY @ CORONADO

(Santa Clara, California)

This TRIPLE-NET OFFICE LEASE (“Lease”) is entered into as of the 25th day of
May, 2012, by and between 3111-3141 CORONADO DRIVE ASSOCIATES, LLC, a Delaware
limited liability company (“Landlord”), and INFOBLOX INC., a Delaware
corporation (“Tenant”).

1. BASIC LEASE TERMS. For purposes of this Lease, the following terms have the
following definitions and meanings:

 

(a) Landlord’s Address (For Notices):

2211 Michelson Drive, Suite 500

Irvine, California 92612

Attention: Property Manager, Bixby @ Coronado

 

(b) Tenant’s Address (For Notices):

The Premises.

Attn: General Counsel

With a copy to:

The Premises.

Attn: Manager, Global Facilities and Real Estate

(c) Premises: The improved parcel(s) of real property (the “Land”), located in
the City of Santa Clara (the “City”), County of Santa Clara (the “County”),
State of California (“State”), designated as APN No. 216-29-116, as shown on the
site plan attached hereto as Exhibit A, together with the Building and all other
improvements located thereon.

(d) Building: That certain building (the “Building”) located on the Land,
consisting of approximately 126,594 rentable square feet, and commonly known as
Bixby @ Coronado.

(e) Operating Expenses: The costs and expenses incurred by Landlord with respect
to the ownership and operation of the Building, as more particularly defined in
Section 5 of this Lease.

(f) Term: Ninety-six (96) months.

(g) Commencement Date: Subject to Section 2 of this Lease, the Term shall
commence on February 1, 2013 (the “Commencement Date”), and shall expire on the
Expiration Date (defined in Section 1(h) below), subject to earlier termination,
if applicable, in accordance with the terms of this Lease. Tenant shall have one
(1) option to extend the Term for an additional period of sixty (60) months,
pursuant to and in accordance with the terms and conditions of Rider No. 1,
Rider No. 2 and Rider No. 3 attached hereto.

(h) Expiration Date: January 31, 2021.

(i) Monthly Base Rent:

 

Months of

Term

 

Annual Base Rent

 

Monthly Base Rent

 

Monthly Base Rent per

Rentable Square Foot – NNN

1 – 12

  $3,190,168.80   $265,847.40   $2.10

13 – 24

  $3,285,873.86   $273,822.82   $2.16

25 – 36

  $3,384,450.08   $282,037.51   $2.23

37 – 48

  $3,485,983.58   $290,498.63   $2.29

49 – 60

  $3,590,563.09   $299,213.59   $2.36

61 – 72

  $3,698,279.98   $308,190.00   $2.43

73 – 84

  $3,809,228.38   $317,435.70   $2.51

85 – 96

  $3,923,505.23   $326,958.77   $2.58

 

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(j) Security Deposit: $326,958.77, which amount will be posted by Tenant as a
condition to the release of the Letter of Credit, as set forth in Rider No. 4 to
this Lease.

(k) Guarantor: None.

(l) Permitted Use: The Premises shall be used solely for general office
purposes, computer labs and uses incidental thereto, and for no other use or
purpose without Landlord’s prior written consent, but only to the extent
permitted by the City and all agencies and governmental authorities having
jurisdiction thereof.

(m) Broker(s): CBRE, Inc. (Christian Marent, Rob Shannon and Ben Knight),
representing Landlord, and Colliers International (Terry Bell and Joseph
Elliot), representing Tenant.

(n) Interest Rate: shall mean ten percent (10%) per annum, provided, however,
the Interest Rate will in no event exceed the maximum interest rate permitted to
be charged by applicable law.

(o) “Tenant Improvements” means the work, to be performed by Tenant in the
Premises pursuant to a separate work letter agreement (the “Work Letter”),
attached to this Lease as Exhibit B.

(p) Letter of Credit: Concurrently with its execution hereof, and as a condition
to the effectiveness of this Lease, Tenant shall post a Letter of Credit in the
face amount of $3,190,168.80, which shall be subject to and in accordance with
the terms of the Letter of Credit Rider attached hereto as Rider No. 4.

(q) Exhibits: Exhibit A (Site Plan Showing Premises), Exhibit B (Work Letter),
Exhibit C (Estoppel Certificate), Exhibit D (Form of SNDA), Exhibit E (Rules and
Regulations), Exhibit F, (Recorded Restrictions) inclusive, which Exhibits are
attached to this Lease and incorporated herein by this reference.

(r) Riders: Rider No. 1 (Extension Option Rider), Rider No. 2 (Fair Market
Rental Rate), Rider No. 3 (Options in General), and Rider No. 4 (Letter of
Credit Rider), inclusive, which Riders are attached to this Lease and
incorporated herein by this reference.

This Section 1 represents a summary of the basic terms and definitions of this
Lease. In the event of any inconsistency between the terms contained in this
Section 1 and any specific provision of this Lease, the terms of the more
specific provision shall prevail.

2. PREMISES.

(a) Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises.

(b) Mutual Covenants. Landlord and Tenant agree that the letting and hiring of
the Premises is upon and subject to the terms, covenants and conditions
contained in this Lease and each party covenants as a material part of the
consideration for this Lease to keep and perform their respective obligations
under this Lease.

3. COMMENCEMENT DATE; POSSESSION.

(a) The Term of the Lease shall be as set forth in Section 1.06 above,
commencing on the Commencement Date and expiring on the Expiration Date, subject
to earlier termination, if applicable, in accordance with the terms of this
Lease. Each consecutive twelve (12) month period of the Term of this Lease,
commencing on the Commencement Date, will be referred to herein as a “Lease
Year”.

(b) Tenant will be deemed to have accepted the Premises in its “AS-IS” condition
as of the date of Landlord’s delivery to Tenant thereof following the full
execution and delivery of this Lease and satisfaction of the requirements set
forth below in this Section 3(b), subject to all Legal Requirements (as defined
in Section 7(b) below) governing and regulating the use and occupancy of the
Premises and to have acknowledged that there are no items needing work or repair
by Landlord, provided that any needed work or repairs shall be subject to the
respective repair and maintenance obligations of Landlord and Tenant set forth
in Section 13 of this Lease. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the
Premises, the Building or any portions thereof or with respect to the
suitability of same for the conduct of Tenant’s business except as set forth
above. Upon (i) the full execution and delivery of this Lease, (ii) the
submission by Tenant to

 

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Landlord of the rent to be provided by Tenant upon the execution and delivery of
this Lease, pursuant to Section 4(a) below, (iii) the submission by Tenant to
Landlord of the Letter of Credit to be provided by Tenant upon the execution and
delivery of this Lease, pursuant to Rider No. 4 attached hereto, and (iv) the
submission by Tenant to Landlord of evidence of insurance required to be
provided by Tenant upon the execution and delivery of this Lease, Landlord shall
deliver the Premises to Tenant in “AS-IS” condition and configuration, “with all
faults”, and “without any representations or warranties” except as set forth
above.

4. RENT.

(a) Monthly Base Rent. Upon execution of this Lease, Tenant shall pay to
Landlord the sum of $306,351.90 (which amount consists of (i) $265,847.40,
representing Monthly Base Rent, and (ii) $40,504.50 [calculated at the estimated
rate of $0.32 per rentable square foot of the Premises per month], representing
the estimated monthly installment of Operating Expenses) constituting Monthly
Base Rent and the monthly installment of Operating Expenses due and payable by
Tenant for the first full calendar month of the Term for which such amounts are
payable hereunder. Tenant agrees to pay Landlord the Monthly Base Rent for the
Premises set forth in Section 1(i) above in advance on the first (1st) day of
each calendar month during the Term without prior notice or demand, plus all
applicable rental taxes, including, without limitation, occupancy, sales,
transaction privilege and excise taxes. As set forth in Section 3(a) above, if
the Term of this Lease commences or ends on a day other than the first (1st) day
of a calendar month, then the rent for such period will be prorated in the
proportion that the number of days this Lease is in effect during such period
bears to the number of days in such month. All rent must be paid to Landlord
absolutely net, without any deduction or offset (except as herein specifically
provided for), in lawful money of the United States of America, at the address
designated by Landlord or to such other person or at such other place as
Landlord may from time to time designate in writing.

(b) Additional Rent. In addition to the payment of Monthly Base Rent, Tenant
shall pay all Operating Expenses applicable to the Building, and the word “rent”
as used in this Lease will include all such additional rent unless the context
specifically or clearly implies that only Monthly Base Rent is intended. It is
the intent of the Landlord and Tenant that the rent provided for herein be
“triple net” as more particularly set forth in this Lease.

(c) Late Payments. Late payments of Monthly Base Rent and/or any item of
additional rent will be subject to interest and a late charge as provided in
Section 21(f) below.

5. OPERATING EXPENSES.

(a) Operating Expenses. In addition to Monthly Base Rent, throughout the Term of
this Lease, Tenant agrees to pay Landlord as additional rent in accordance with
the terms of this Section 5, the Operating Expenses as defined in this
Section 5(a). As used in the Lease, “Operating Expenses” means and includes:
(i) Real Property Taxes (as defined in Section 11(b) of the Lease) and any taxes
or assessments imposed in lieu thereof; (ii) any and all assessments imposed
with respect to the Premises pursuant to any covenants, conditions and
restrictions affecting the Premises; (iii) costs of insurance carried by
Landlord pursuant to Section 18 of the Lease; (iv) a management fee in an amount
equal to one and one-half percent (1.5%) of the Base Rent payable with respect
to the Building.

(b) Estimate Statement. Prior to the Commencement Date and as soon as practical
following the start of each subsequent calendar year during the Term of this
Lease, Landlord will endeavor to deliver to Tenant a statement (“Estimate
Statement”) wherein Landlord will estimate the Operating Expenses for the then
current calendar year. Tenant agrees to pay Landlord, as additional rent,
one-twelfth (1/12th) of the estimated Operating Expenses each month thereafter,
beginning with the next installment of rent due, until such time as Landlord
issues a revised Estimate Statement or the Estimate Statement for the succeeding
calendar year. If at any time during the Term of this Lease, but not more often
than quarterly, Landlord reasonably determines that the Operating Expenses for
the current calendar year will be greater than the amount set forth in the then
current Estimate Statement, Landlord may issue a revised Estimate Statement and
Tenant agrees to pay Landlord, within thirty (30) days of receipt of the revised
Estimate Statement, the difference between the amount owed by Tenant under such
revised Estimate Statement and the amount owed by Tenant under the original
Estimate Statement for the portion of the then current calendar year which has
expired. Thereafter Tenant agrees to pay Operating Expenses based on such
revised Estimate Statement until Tenant receives the next calendar year’s
Estimate Statement or a new revised Estimate Statement for the current calendar
year.

 

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(c) Actual Statement. As soon as practical following the end of each calendar
year during the Term of this Lease (estimated to be within one hundred twenty
(120) days after the end of the calendar year), Landlord will also endeavor to
deliver to Tenant a statement (“Actual Statement”) which states the actual
Operating Expenses for the preceding calendar year. If the Actual Statement
reveals that the actual Operating Expenses are more than the total additional
rent paid by Tenant for Operating Expenses on account of the preceding calendar
year, Tenant agrees to pay Landlord the difference in a lump sum within thirty
(30) days of receipt of the Actual Statement. If the Actual Statement reveals
that the actual Operating Expenses is less than the additional rent paid by
Tenant for Operating Expenses on account of the preceding calendar year,
Landlord will credit any overpayment toward the next monthly installment(s) of
the Operating Expenses due under this Lease, or if not due, then reimburse
Tenant within thirty (30) days of the date of the statement.

(d) Miscellaneous. Any delay or failure by Landlord in delivering any Estimate
Statement or Actual Statement pursuant to this Section 5, after due diligence by
Landlord to prepare and deliver the Actual Statement, will not constitute a
waiver of its right to require an increase in rent nor will it relieve Tenant of
its obligations pursuant to this Section 5, except that Tenant will not be
obligated to make any payments based on such Estimate Statement or Actual
Statement until thirty (30) days after receipt of such Estimate Statement or
Actual Statement. Even though the Term has expired and Tenant has vacated the
Premises, when the final determination is made of the actual Operating Expenses
for the year in which this Lease terminates, Tenant agrees to promptly pay any
increase due over the estimated expenses paid and, conversely, any overpayment
made in the event said expenses decrease shall promptly be rebated by Landlord
to Tenant. Such obligation will be a continuing one which will survive the
expiration or termination of this Lease.

6. SECURITY DEPOSIT. If at any time during the Term (including in satisfaction
of the LOC Release Conditions as set forth in Rider No. 4) Landlord holds a cash
security deposit under this Lease (“Security Deposit”), then the terms of this
Section 6 shall apply to such Security Deposit. If and to the extent the Letter
of Credit is returned to Tenant, subject to the terms and conditions of Rider
No. 4 attached hereto, then upon return of the Letter of Credit, Tenant shall be
required to deliver the Security Deposit to Landlord in immediately available
funds, to be held by Landlord without liability for interest (unless required by
laws) as security for the performance of Tenant’s obligations. The Security
Deposit is not an advance payment of rent or a measure of damages. Landlord may
use all or a portion of the Security Deposit to satisfy past due rent, to cure
any default by Tenant, or to compensate Landlord for any other loss or damage
Landlord may suffer by reason of Tenant’s default. If Landlord uses any portion
of the Security Deposit, Tenant shall on demand restore the Security Deposit to
its original amount, and Tenant’s failure to do so shall be a default under this
Lease. If Tenant is not in default at the expiration or earlier termination of
this Lease, Landlord shall return any unapplied portion of the Security Deposit
to Tenant within forty-five (45) days after the later to occur of: (a) payment
of the final rent due from Tenant; or (b) the later to occur of the Expiration
Date or the date Tenant surrenders the Premises to Landlord in compliance with
Section 10(a) below. Landlord’s obligations with respect to the Security Deposit
are those of a debtor and not a trustee. Landlord can maintain the Security
Deposit separate and apart from Landlord’s general funds or can commingle the
Security Deposit with Landlord’s general and other funds. Landlord shall not be
required to pay Tenant interest on the Security Deposit. Tenant hereby waives
the provisions of Section 1950.7 of the California Civil Code (excepting
subsection (b) thereof), and all other provisions of law, now or hereafter in
force, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of rent, to repair
damage caused by Tenant or to clean the Premises, it being agreed that Landlord
may, in addition, claim those sums reasonably necessary to compensate Landlord
for any other loss or damage, foreseeable or unforeseeable, caused by the act or
omission of Tenant or any officer, employee, agent or invitee of Tenant.

7. USE.

(a) Tenant’s Use of the Premises. The Premises may be used for the use or uses
set forth in Section 1(l) above only, and Tenant will not use or permit the
Premises to be used for any other purpose without the prior written consent of
Landlord.

(b) Compliance. At Tenant’s sole cost and expense, Tenant agrees to procure,
maintain and hold available for Landlord’s inspection, all governmental licenses
and permits required for the proper and lawful conduct of Tenant’s business from
the Premises, if any. Tenant agrees not to use, alter or occupy the Premises or
allow the Premises to be used, altered or occupied in violation of, and Tenant,
at its sole cost and expense, agrees to use and occupy the Premises and cause
the Premises to be used and occupied in compliance with: (i) any and all laws,
statutes, zoning restrictions, ordinances, rules, regulations, orders and
rulings now or hereafter

 

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in force and any requirements of any insurer, insurance authority or duly
constituted public authority having jurisdiction over the Premises now or
hereafter in force, (ii) the requirements of the Board of Fire Underwriters and
any other similar body, (iii) the Certificate of Occupancy issued for the
Building, and (iv) any recorded covenants, conditions and restrictions and
regulatory agreements, if any, which affect the use, occupation or alteration of
the Premises (collectively, “Legal Requirements”). Tenant agrees to comply with
the Rules and Regulations referenced in Section 27 below. Tenant agrees not to
use or allow the Premises to be used for any unlawful or unreasonably
objectionable purpose. Tenant agrees not to cause, maintain or permit any
nuisance or waste in, on, under or about the Premises. Notwithstanding anything
contained in this Lease to the contrary, all transferable development rights
related in any way to the Premises are and will remain vested in Landlord, and
Tenant hereby waives any rights thereto.

(c) Hazardous Materials. Except for ordinary and general office supplies,
equipment and facilities, such as copier toner, liquid paper, back-up power
sources, glue, ink and common household cleaning materials, as well as customary
quantities of first aid and healthcare supplies and the parking of vehicles in
the parking areas adjacent to the Premises (some or all of which may constitute
“Hazardous Materials” as defined in this Lease), Tenant agrees not to cause or
permit any Hazardous Materials to be brought upon, stored, used, handled,
generated, released or disposed of on, in, under or about the Premises, the
Building or any portion thereof by Tenant, its agents, employees, subtenants,
assignees, licensees, contractors or invitees (collectively, “Tenant Parties”)
without the prior written consent of Landlord, which consent by Landlord will
not be unreasonably withheld. Upon the expiration or earlier termination of this
Lease, Tenant agrees to promptly remove from the Premises, at its sole cost and
expense, any and all Hazardous Materials, including any equipment or systems
containing Hazardous Materials which are installed, brought upon, stored, used,
generated or released upon, in, under or about the Premises, the Building, or
any portion thereof by Tenant or any Tenant Parties. To the fullest extent
permitted by law, Tenant agrees to promptly indemnify, protect, defend and hold
harmless Landlord and Landlord’s partners, officers, directors, employees,
agents, successors and assigns (collectively, “Landlord Indemnified Parties”)
from and against any and all claims, damages, judgments, suits, causes of
action, losses, liabilities, penalties, fines, expenses and costs (including,
without limitation, clean-up, removal, remediation and restoration costs, sums
paid in settlement of claims, attorneys’ fees, consultant fees and expert fees
and court costs) which arise or result from the presence of Hazardous Materials
on, in, under or about the Premises or the Building and which are caused or
permitted by Tenant or any Tenant Parties. Tenant agrees to promptly notify
Landlord of any release of Hazardous Materials at the Premises, which Tenant
becomes aware of during the Term of this Lease, whether caused by Tenant or any
other persons or entities. In the event of any release of Hazardous Materials
caused or permitted by Tenant or any Tenant Parties, Landlord shall have the
right, but not the obligation, to cause Tenant to immediately take all steps
Landlord deems necessary or appropriate to remediate such release and prevent
any similar future release to the satisfaction of Landlord and Landlord’s
mortgagee(s). As used in this Lease, the term “Hazardous Materials” shall mean
and include any hazardous or toxic materials, substances or wastes as now or
hereafter designated under any law, statute, ordinance, rule, regulation, order
or ruling of any agency of the State, the United States Government or any local
governmental authority, including, without limitation, asbestos,
asbestos-containing material (“ACM”), presumed asbestos containing materials
(“PACM”), petroleum, petroleum hydrocarbons and petroleum based products, urea
formaldehyde foam insulation, polychlorinated biphenyls (“PCBs”), and freon and
other chlorofluorocarbons. Landlord hereby confirms that prior to the date of
execution and delivery of this Lease, Landlord has completed a substantial
demolition of the Building to shell condition, and Landlord represents it has no
actual knowledge as of the date hereof of the existence of any Hazardous
Materials existing at the Building in violation of applicable laws, rules or
regulations, and to the extent it is determined that Hazardous Materials did
exist at the Building as of the date hereof in violation of laws governing
Hazardous Materials, and such violation does not arise out of any acts or
omissions of Tenant, its agents, employees or contractors, Landlord shall
promptly take such action as is necessary to remediate such Hazardous Materials
as necessary to comply with applicable laws, at no cost to Tenant. The
provisions of this Section 7(c) will survive the expiration or earlier
termination of this Lease.

8. NOTICES. Any notice required or permitted to be given hereunder must be in
writing and may be given by personal delivery (including delivery by overnight
courier or an express mailing service) or by mail, if sent by registered or
certified mail. Notices to Tenant shall be sufficient if delivered to Tenant at
the address designated in Section 1(b) above and notices to Landlord shall be
sufficient if delivered to Landlord at the address designated in Section 1(a)
above. Either party may specify a different address for notice purposes by
written notice to the other, except that the Landlord may in any event use the
Premises as Tenant’s address for notice purposes.

 

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9. BROKERS. The parties acknowledge that the broker(s) who negotiated this Lease
are stated in Section 1(M) above. Each party represents and warrants to the
other that, to its knowledge, no other broker, agent or finder (a) negotiated or
was instrumental in negotiating or consummating this Lease on its behalf, and
(b) is or might be entitled to a commission or compensation in connection with
this Lease. Landlord and Tenant each agree to promptly indemnify, protect,
defend and hold harmless the other from and against any and all claims, damages,
judgments, suits, causes of action, losses, liabilities, penalties, fines,
expenses and costs (including attorneys’ fees and court costs) resulting from
any breach by the indemnifying party of the foregoing representation, including,
without limitation, any claims that may be asserted by any broker, agent or
finder undisclosed by the indemnifying party. The foregoing mutual indemnity
shall survive the expiration or earlier termination of this Lease.

10. SURRENDER; HOLDING OVER.

(a) Surrender. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not constitute a merger, and shall, at the
option of Landlord, operate as an assignment to Landlord of any or all subleases
or subtenancies. Upon the expiration or earlier termination of this Lease,
Tenant agrees to peaceably surrender the Premises to Landlord broom clean and in
a state of good order, repair and condition, ordinary wear and tear and casualty
damage excepted, but in any event with all interior walls cleaned and in good
repair, all carpeted areas cleaned, the plumbing, heating, ventilation and air
conditioning systems in good working order and all floor areas cleaned and waxed
or sealed. Subject to the terms of Section 12 below, Tenant will also remove any
Alterations (as defined in Section 12 below) and, any electrical, phone and data
cabling and related equipment (collectively, “Cable”), and shall repair any
damage caused by such removal, all in accordance with the terms of Section 12
below. At least twenty (20) days prior to termination of the Lease, Landlord may
inspect the Premises to determine if they are in the condition required for
proper surrender by Tenant, or at Landlord’s option, and at Landlord’s sole cost
and expense, Landlord may retain the services of one (1) or more inspectors or
consultants to perform such inspections. If any such inspections disclose any
deficiencies in the condition of the Premises, Tenant will promptly cause the
same to be corrected in a good and workmanlike manner at Tenant’s sole cost and
expense prior to the surrender date. The delivery of keys to any employee of
Landlord or to Landlord’s agent or any employee thereof alone will not be
sufficient to constitute a termination of this Lease or a surrender of the
Premises unless Landlord has given Tenant a notice to quit.

(b) Holding Over. Tenant will not be permitted to hold over possession of the
Premises after the expiration or earlier termination of the Term without the
express written consent of Landlord, which consent Landlord may withhold in its
sole and absolute discretion. If Tenant holds over after the expiration or
earlier termination of the Term, Landlord may, at its option, treat Tenant as a
tenant at sufferance only, and such continued occupancy by Tenant shall be
subject to all of the terms, covenants and conditions of this Lease, so far as
applicable, except that the rent for any such holdover period shall be equal to
one hundred fifty percent (150%) of the Base Rent in effect under this Lease
immediately prior to such holdover or market rent, whichever is greater, and in
either case, prorated on a daily basis including any Operating Expenses.
Acceptance by Landlord of rent after such expiration or earlier termination will
not result in a renewal of this Lease. The provisions of this Section 10 are in
addition to and do not affect Landlord’s right of re-entry or any rights of
Landlord under this Lease or as otherwise provided by law. If Tenant fails to
surrender the Premises upon the expiration of this Lease in accordance with the
terms of this Section 10 despite demand to do so by Landlord, Tenant agrees to
promptly indemnify, protect, defend and hold Landlord harmless from all claims,
damages, judgments, suits, causes of action, losses, liabilities, penalties,
fines, expenses and costs (including attorneys’ fees and costs), including,
without limitation, costs and expenses reasonably and actually incurred by
Landlord in returning the Premises to the condition in which Tenant was to
surrender it. The provisions of this Section 10(b) will survive the expiration
or earlier termination of this Lease.

11. TAXES.

(a) Payment of Taxes. Tenant agrees to pay all Real Property Taxes, as defined
in Section 11(b) below, as part of Operating Expenses, during the Term of this
Lease. If any such Real Property Taxes paid by Tenant shall cover any period of
time prior to or after the expiration of the Term thereof, Tenant’s share of
such Real Property Taxes is to be equitably prorated to cover only the period of
time within the tax fiscal year during which this Lease shall be in effect, and
Landlord will reimburse Tenant to the extent required.

(b) Definition of “Real Property Taxes”. The term “Real Property Taxes” as used
herein means: any form of assessment, license fee, license tax, business license
fee, commercial rental tax, levy, charge, improvement bond, tax or similar
imposition imposed by any authority

 

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having the direct power to tax, including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other improvement
or special assessment district thereof, as against any legal or equitable
interest of Landlord in the Premises or any part thereof, including the
following by way of illustration but not limitation: (i) any tax on Landlord’s
“right” to rent or “right” to other income from the Premises or as against
Landlord’s business of leasing the Premises; and (ii) any assessment, tax, fee,
levy or charge in substitution, partially or totally, of any assessment, tax,
fee, levy or charge previously included within the definition of Real Property
Tax. It is the intention of Tenant and Landlord that all such new and increased
assessments, taxes, fees, levies and charges be included within the definition
of “Real Property Taxes” for the purposes of this Lease; (A) any assessment,
tax, fee, levy or charge allocable to or measured by the area of the Building or
Premises or the rent payable by Tenant hereunder, including, without limitation,
any gross receipts tax or excise tax levied by state, city or federal
government, or any political subdivision thereof, with respect to the receipt of
such rent, or upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises, or any portion thereof but not on Landlord’s other operations; (B) any
assessment, tax, fee, levy or charge upon this transaction; and/or (C) any
assessment, tax, fee, levy or charge by any governmental agency related to any
transportation plan, fund or system (including assessment districts) instituted
within the geographic area of which the Building is a part.

(c) Personal Property Taxes. Tenant agrees to pay prior to delinquency all taxes
assessed against and levied upon trade fixtures, furnishings, equipment and all
other personal property of Tenant contained in the Premises or elsewhere. When
possible, Tenant will cause said trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real
property of Landlord. If any of Tenant’s personal property is assessed with
Landlord’s real property, Tenant shall pay Landlord the taxes attributable to
Tenant within thirty (30) days after receipt of a written statement setting
forth the taxes applicable to Tenant’s property.

12. ALTERATIONS.

(a) Alterations. Tenant shall not make alterations, repairs, additions or
improvements or install any Cable (collectively referred to as “Alterations”)
without first obtaining the written consent of Landlord in each instance, which
consent may be granted or withheld in Landlord’s sole discretion, provided that
Landlord shall not unreasonably withhold its consent to any Alterations which do
no not affect building structure or systems and which will not be visible from
outside the Premises, or installation of Cable. In order to obtain such
approvals, Tenant shall furnish Landlord with plans and specifications; names of
contractors acceptable to Landlord; required permits and approvals; evidence of
contractor’s and subcontractor’s insurance in amounts reasonably required by
Landlord and naming Landlord as an additional insured; and any security for
performance in amounts reasonably required by Landlord. Upon completion, Tenant
shall furnish “as-built” plans for Alterations, completion affidavits and full
and final waivers of lien. Notwithstanding the foregoing, the terms of the Work
Letter attached hereto as Exhibit B (and not this Section 12) shall govern with
respect to the initial Tenant Improvements to be completed by Tenant.

(b) Cosmetic Alterations. Notwithstanding the foregoing, so long as Tenant
(a) complies with all applicable laws, rules (including the then current
construction rules, guidelines and specifications for the Building), regulations
and the terms and conditions of this Lease, and (b) coordinates construction of
the Alterations with Landlord, Tenant shall have the right, without Landlord’s
consent, but upon three (3) business days prior written notice to Landlord, to
make strictly cosmetic, non-structural additions and alterations to the Premises
that do not (i) involve the expenditure of more than $50,000.00 in the aggregate
in any twelve (12) month period during the Term, (ii) affect the appearance of
the Building or any areas outside the Premises, or (iii) affect or impact in any
way the systems or structure of the Building (collectively, the “Cosmetic
Alterations”).

(c) Plan Review. Tenant agrees to pay Landlord, as additional rent, the actual
and reasonable costs of professional services and costs for general conditions
of Landlord’s third party consultants if utilized by Landlord for review of all
plans, specifications and working drawings for any Alterations, within ten (10)
business days after Tenant’s receipt of invoices either from Landlord or such
consultants. In addition, Tenant agrees to pay Landlord, within thirty (30) days
after completion of any Alterations, a fee in the amount of one percent (1%) of
the cost of such Alterations, but in no event less than Two Hundred Fifty
Dollars ($250.00).

(d) Personal Property. All articles of personal property owned by Tenant or
installed by Tenant at its expense in the Premises (including Tenant’s business
and trade fixtures, furniture, movable partitions, Cable and equipment [such as
telephones, copy machines, computer

 

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terminals, refrigerators and facsimile machines]) will be and remain the
property of Tenant, and, unless otherwise agreed between Landlord and Tenant in
writing, must be removed by Tenant from the Premises, at Tenant’s sole cost and
expense, on or before the expiration or earlier termination of this Lease.
Tenant agrees to repair any damage caused by such removal at its cost on or
before the expiration or earlier termination of this Lease.

(e) Removal of Alterations. If Tenant fails to remove by the expiration or
earlier termination of this Lease all of its personal property, any Alterations
(including Cable) identified by Landlord for removal at the time Landlord gives
consent to the Alteration (including the installation of Cable), or if no
consent given, then as designated, at least sixty (60) days prior to the
termination date, Landlord may, at its option (without liability to Tenant for
loss thereof) treat such personal property and/or Alterations (including Cable)
as abandoned and, at Tenant’s sole cost and expense, and in addition to
Landlord’s other rights and remedies under this Lease, at law or in equity:
(i) remove and store such items and repair any damage caused by such removal;
and/or (ii) upon ten (10) days’ prior notice to Tenant, sell, discard or
otherwise dispose of all or any such items at private or public sale for such
price as Landlord may obtain or by other commercially reasonable means. Tenant
shall be liable for all costs of disposition of Tenant’s abandoned property and
restoration of the Alteration not removed as required, and Landlord shall have
no liability to Tenant with respect to any such abandoned property.

13. REPAIRS.

(a) Tenant’s Obligations. Subject to Landlord’s repair and maintenance
obligations set forth in Section 13(c) below, and further subject to the terms
of Section 19 hereof in the event of casualty, Tenant agrees to keep in good
order, condition and repair the Premises and every part thereof, regardless of
the need for repairs arises out of Tenant’s use or otherwise, including, without
limiting the generality of the foregoing, maintaining, repairing and replacing,
as and when needed, at Tenant’s sole cost (except as set forth in Section 13(c)
below) all systems, facilities and equipment, such as plumbing, heating,
ventilation, air conditioning equipment, electrical, lighting facilities, fire
protection systems, and other equipment within or serving the Premises,
fixtures, walls (interior and exterior) (including, without limitation, graffiti
removal and painting when necessary), ceilings, roof membrane, floors, windows,
doors, plate glass and skylights located within the Premises, and all
landscaping, driveways, loading docks, parking lots, fences and signs located on
the Premises and sidewalks and parkways located in or on the Premises. In
performing its obligations set forth herein, Tenant shall consistently exercise
and perform good maintenance practices, specifically including arranging for and
maintaining at Tenant’s cost (with copies to Landlord) maintenance and service
contracts reasonably approved by Landlord for HVAC equipment, fire extinguishing
and alarm systems, roof preventative maintenance and landscaping maintenance,
which maintenance and service contracts (other than for landscaping) shall
include a requirement for an annual and/or quarterly inspection. Upon Landlord’s
request, Tenant shall deliver to Landlord a copy of each inspection report. In
addition, Tenant shall arrange for any required maintenance and the correction
of any defects noted in any such inspection report. Tenant agrees to cause any
mechanics’ liens or other liens arising as a result of work performed by Tenant
or at Tenant’s direction to be eliminated as provided in Section 14 below. In
the event Tenant fails to maintain any required maintenance or service contract,
or fails to obtain and deliver to Landlord an inspection report (which may be
quarterly or annually as referenced herein, Landlord shall have the right
(following written notice to Tenant and providing Tenant with a reasonable
opportunity to cure), to arrange for such maintenance and service contracts, and
the required inspections, and Tenant shall pay the cost thereof upon Landlord’s
delivery of an invoice therefor. In any event, Tenant shall pay the costs of and
arrange for the correction of any deficiencies found. Without limiting the
foregoing, Tenant will perform, at its expense, normal maintenance work
involving the foundation, structural portions of the Building, and operating
systems of the Building, but if a capital repair or replacement is needed,
Tenant will notify Landlord of the required capital repair or replacement work
and Landlord will cause such work to be done in a timely manner in accordance
with the terms of Section 13(c) below.

(b) Tenant’s Failure to Repair. If Tenant refuses or neglects to repair and
maintain the Premises properly as required hereunder to the reasonable
satisfaction of Landlord, Landlord, at any time following twenty (20) days from
the date on which Landlord makes a written demand on Tenant to effect such
repair and maintenance, may enter upon the Premises and make such repairs and/or
maintenance, and upon completion thereof, Tenant agrees to pay to Landlord as
additional rent, Landlord’s costs for making such repairs plus an amount not to
exceed five percent (5%) of such costs for overhead, within thirty (30) days of
receipt from Landlord of a written itemized bill therefor. Any amounts not
reimbursed by Tenant within such thirty (30) day period will bear interest at
the Interest Rate until paid by Tenant.

 

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(c) Landlord’s Obligations. Except for the obligations of Landlord under
Section 19 below relating to damage or destruction of the Premises, or under
Section 20 below relating to eminent domain, it is intended by the parties that
Landlord’s sole obligation to repair and maintain the Premises and to pay the
cost thereof shall be as set forth in this Section 13(c). Tenant waives the
right to make repairs at Landlord’s expense under any law, statute, ordinance,
rule, regulation, order or ruling. Landlord’s repair and maintenance obligations
shall include the following:

 

  •  

Landlord shall at its sole cost and expense, subject to insurance and available
warranties, repair and/or replace any defects in the foundation and structural
portions of the Building, including the roof and replacement of the roof
membrane (it being acknowledged that repairs of the roof membrane shall be the
responsibility of Tenant as set forth in Section 13(a) above).

 

  •  

So long as Tenant has performed its repair and maintenance obligations with
respect to the Premises as set forth in this Lease throughout the Term of this
Lease, including, without limitation, Tenant’s obligations as set forth in
Section 13(a) above, Landlord shall cause to be completed any capital repairs or
capital replacement work required to be performed with respect to the structure
or systems of the Premises during the Term of this Lease, and the amortized cost
of such work shall be included in Operating Expenses payable by Tenant under the
terms of this Lease. For purposes of the foregoing, the following shall govern:
(1) Required work shall be deemed a “capital repair” or a “capital replacement”
if the cost of necessary repair work is reasonably expected to exceed 50% of the
cost of full replacement of the improvement, component or equipment at issue;
(2) the cost of any capital repair or capital replacement shall be amortized
over the useful life of the improvement, as reasonably determined by Landlord,
at an annual interest rate equal to Wells Fargo Prime plus one percent (1%), and
Tenant shall pay the monthly amortization amount during the Term of this Lease,
as part of Operating Expenses.

14. LIENS. Tenant agrees not to permit any mechanic’s, materialmen’s or other
liens to be filed against all or any part of the Premises, nor against Tenant’s
leasehold interest in the Premises, by reason of or in connection with any
repairs, alterations, improvements or other work contracted for or undertaken by
Tenant or any other act or omission of Tenant or Tenant’s agents, employees,
contractors, licensees or invitees. At Landlord’s request, Tenant agrees to
provide Landlord with enforceable, conditional and final lien releases (or other
evidence reasonably requested by Landlord to demonstrate protection from liens)
from all persons furnishing labor and/or materials at the Premises. Landlord
will have the right at all reasonable times to post on the Premises and record
any notices of non-responsibility which it deems necessary for protection from
such liens. If any such liens are filed, Tenant will, at its sole cost, promptly
cause such liens to be released of record or bonded so that it no longer affects
title to the Premises. If Tenant fails to cause any such liens to be so released
or bonded within ten (10) days after the filing thereof, such failure will be
deemed a material breach by Tenant under this Lease without the benefit of any
additional notice or cure period described in Section 21 below, and Landlord
may, without waiving its rights and remedies based on such breach, and without
releasing Tenant from any of its obligations, cause such liens to be released by
any means it shall deem proper, including payment in satisfaction of the claims
giving rise to such liens. Tenant agrees to pay to Landlord within ten (10) days
after receipt of invoice from Landlord, any sum paid by Landlord to remove such
liens, together with interest at the Interest Rate from the date of such payment
by Landlord.

15. ENTRY BY LANDLORD. Landlord and its employees and agents will at all times
have the right to enter the Premises to inspect the same, to show the Premises
to lenders, investors or prospective purchasers, to post notices of
non-responsibility, to repair the Premises as permitted or required by this
Lease, and /or to show the Premises to prospective tenants during the last nine
(9) months of the Lease Term, it being acknowledged that such 9-month period
corresponds to the time for Tenant to exercise its Extension Option pursuant to
Rider No. 1 attached hereto, and Landlord shall have the right to show the
Premises earlier in the event Tenant confirms to Landlord that Tenant will not
exercise its Extension Option, and Landlord may also show the Premises at any
time following a Tenant default. In exercising such entry rights, Landlord will
endeavor to minimize, as reasonably practicable, the interference with Tenant’s
business, and will provide Tenant with reasonable advance notice of any such
entry (except in emergency situations). Landlord may, in order to carry out such
purposes, erect scaffolding and other necessary structures where reasonably
required by the character of the work to be performed. Landlord will at all
times have and retain a key with which to unlock all doors in the Premises,
excluding Tenant’s vaults and safes. Landlord will have the right to use any and
all means which Landlord may reasonably deem proper to open said doors in an
emergency in order to obtain entry to the Premises. Any entry to the Premises
obtained by

 

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Landlord by any of said means, or otherwise, will not be construed or deemed to
be a forcible or unlawful entry into the Premises, or an eviction of Tenant from
the Premises.

16. UTILITIES AND SERVICES. Tenant agrees to contract directly for and to pay
for all utilities and services provided to the Premises (including the Land and
the Building), including, without limitation, water, gas, heat, light, power,
telephone, waste/trash removal, sewer and other utilities, janitorial and
cleaning services, landscaping and outdoor maintenance, together with any taxes
thereon. Landlord will not be liable to Tenant for any failure to furnish any of
the foregoing utilities and services if such failure is caused by all or any of
the following: (i) accident, breakage or repairs; (ii) strikes, lockouts or
other labor disturbance or labor dispute of any character; (iii) governmental
regulation, moratorium or other governmental action or inaction; (iv) inability
despite the exercise of reasonable diligence to obtain electricity, water or
fuel; or (v) any other cause beyond Landlord’s reasonable control. In addition,
in the event of any stoppage or interruption of services or utilities, Tenant
shall not be entitled to any abatement or reduction of rent (except as expressly
provided in Section 19(f) below or Section 20(b) below if such failure results
from a damage or taking described therein), no eviction of Tenant will result
from such failure and Tenant will not be relieved from the performance of any
covenant or agreement in this Lease because of such failure. Notwithstanding
anything to the contrary herein, Tenant acknowledges and agrees that it shall be
solely responsible for providing adequate security for its Premises, and its use
of the Building and Land thereof. Landlord shall have no responsibility to
prevent, and shall not be liable to Tenant, its agents, employees, contractors,
visitors or invitees, for losses due to theft, burglary or other criminal
activity, or for damages or injuries to persons or property resulting from
persons gaining access to the Premises or the Building.

17. ASSUMPTION OF RISK AND INDEMNIFICATION.

(a) Assumption of Risk. Tenant, as a material part of the consideration to
Landlord, hereby agrees that neither Landlord nor any Landlord Indemnified
Parties (as defined in Section 7(c) above) will be liable to Tenant for, and
Tenant expressly assumes the risk of and waives any and all claims it may have
against Landlord or any Landlord Indemnified Parties with respect to, (i) any
and all damage to property or injury to persons in, upon or about the Premises
or any part thereof (except that resulting from the grossly negligent or
intentionally willful act or omission of Landlord), (ii) any such damage caused
by other tenants or persons in or about the Premises, or caused by quasi-public
work, (iii) any damage to property entrusted to employees of the Premises,
(iv) any loss of or damage to property by theft or otherwise, or (v) any injury
or damage to persons or property resulting from any casualty, explosion, falling
plaster or other masonry or glass, steam, gas, electricity, water or rain which
may leak from any part of the Building or from the pipes, appliances or plumbing
works therein or from the roof, street or subsurface or from any other place, or
resulting from dampness. Notwithstanding anything to the contrary contained in
this Lease, neither Landlord nor any Landlord Indemnified Parties will be liable
for consequential damages arising out of any loss of the use of the Premises or
any equipment or facilities therein by Tenant or any Tenant Parties or for
interference with light or other incorporeal hereditaments. Tenant agrees to
give prompt notice to Landlord in case of fire or accidents in the Premises, or
of defects therein or in the fixtures or equipment.

(b) Indemnification. Tenant will be liable for, and agrees, to the maximum
extent permissible under applicable law, to promptly indemnify, protect, defend
and hold harmless Landlord and Landlord Indemnified Parties, from and against,
any and all claims, damages, judgments, suits, causes of action, losses,
liabilities, penalties, fines, expenses and costs, including attorneys’ fees and
court costs (collectively, “Indemnified Claims”), arising or resulting from
(i) any act or omission of Tenant or any Tenant Parties (as defined in
Section 7(c) above); (ii) the use of the Premises and conduct of Tenant’s
business by Tenant or any Tenant Parties, or any other activity, work or thing
done, permitted or suffered by Tenant or any Tenant Parties, in or about the
Premises; and/or (iii) any default by Tenant of any obligations on Tenant’s part
to be performed under the terms of this Lease. In case any action or proceeding
is brought against Landlord or any Landlord Indemnified Parties by reason of any
such Indemnified Claims, Tenant, upon notice from Landlord, agrees to promptly
defend the same at Tenant’s sole cost and expense by counsel approved in writing
by Landlord, which approval Landlord will not unreasonably withhold.

(c) Survival; No Release of Insurers. Tenant’s indemnification obligations under
Section 17(b) will survive the expiration or earlier termination of this Lease.
Tenant’s covenants, agreements and indemnification obligation in Sections 17(a)
and 17(b) above, are not intended to and will not relieve any insurance carrier
of its obligations under policies required to be carried by Tenant pursuant to
the provisions of this Lease.

 

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18. INSURANCE.

(a) Tenant’s Insurance. Tenant shall obtain and maintain throughout the Term the
following insurance (“Tenant’s Insurance”):

(i) Commercial General Liability Insurance, on an occurrence basis, insuring
bodily injury and property damage including but not limited to the following
coverage: Premises and Operations; Personal/Advertising Injury; coverage for
Tenant’s indemnity obligations under this Lease; liquor liability, if
applicable; and products and completed operations. Such insurance must have the
following minimum limits of liability: $5,000,000.00 Per Occurrence,
$5,000,000.00 General Aggregate, $5,000,000.00 Personal and Advertising Injury –
Per Occurrence, $5,000,000.00 Products and Completed Operations Aggregate. If
the policy covers more than one location, it shall be endorsed to ensure the
General Aggregate limit shall apply separately on a “Per Location” basis

(ii) Property Insurance, written on an “All Risk” or Special Form Perils, with
coverage for water damage including sprinkler leakage, earthquake sprinkler
leakage and coverage for damage caused by heat, smoke or fumes from a hostile
fire, at full replacement cost value (without deduction for depreciation) and
with a replacement cost endorsement covering all of Tenant’s business and trade
fixtures, equipment, movable partitions, furniture, merchandise and other
personal property, including property of others for which the tenant may be
legally liable, within the Premises (“Tenant’s Property”) and any Tenant
Improvements or Alterations installed by or for the benefit of Tenant;

(iii) Extra Expense, Loss of Income or Property/Business Interruption Insurance,
in such amounts as will reimburse Tenant for direct or indirect loss of earnings
attributable to all perils included within “All Risk” coverage or otherwise
commonly insured against by prudent tenants or attributable to prevention of
access to the Premises as a result of such perils, with such coverage to extend
for a minimum of one year;

(iv) Workers’ Compensation Insurance as required by laws and in amounts as may
be required by applicable statute and Employers Liability Coverage of at least
One Million Dollars ($1,000,000.00) each accident, $1,000,000.00 policy limit,
$1,000,000.00 each employee and containing a waiver of subrogation endorsement
in favor of Landlord;

(v) Commercial Automobile Liability insuring bodily injury and property damage
arising from all owned, non-owned and hired vehicles, if any, with minimum
limits of liability of One Million Dollars ($1,000,000.00) per accident; and

(vi) With respect to improvements or Alterations performed by or on behalf of
Tenant within the Premises, Builder’s Risk insurance or an Installation Floater.

(vii) Any other form or forms of insurance as Tenant or Landlord or any
mortgagees of Landlord may reasonably require from time to time in form, in
amounts, and for insurance risks against which, a prudent tenant would protect
itself, but only to the extent coverage for such risks and amounts are available
in the insurance market at commercially acceptable rates. Landlord makes no
representation that the limits of liability required to be carried by Tenant
under the terms of this Lease are adequate to protect Tenant’s interests and
Tenant should obtain such additional insurance or increased liability limits as
Tenant deems appropriate. No policy required hereunder shall contain a
co-insurance clause and all policy deductibles in excess of $50,000 shall be
subject to Landlord’s approval, not to be unreasonably withheld.

(b) Supplemental Tenant Insurance Requirements. Any company writing Tenant’s
Insurance shall have an A.M. Best rating of not less than A-:VIII and shall be
licensed to issue insurance coverage in the state in which the premises are
located. All Commercial General Liability Insurance policies shall (i) name
Landlord (or its successors and assignees), the managing agent for the Building
(or any successor), and any of their successors as the interest of such
designees shall appear, as additional insureds (utilizing endorsement ISO
Form CG 2011 11/85 or equivalent), (ii) must contain an endorsement stating
“such insurance as is afforded by this policy for the benefit of Landlord and
any other additional insured(s) designated by Landlord, shall be primary as
respects any liability or claims arising out of the occupancy of the Premises by
Tenant or Tenant’s operations, and any insurance carried by Landlord or any
other additional insured(s) shall be non-contributory” (iii) contain an
endorsement that the insurer waives its right to subrogation as described in
Section 18(f) below; (iv) contain a cross-liability endorsement or separation of
insureds clause. All policies of Tenant’s Insurance shall contain an unqualified
thirty (30) days’ advance written notice of any cancellation, termination or
material change of insurance. Tenant shall provide Landlord with a certificate
of insurance evidencing all insurance required to be carried by Tenant hereunder
(including evidence of all

 

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required endorsements and additional insured coverage as noted above) at least
ten (10) business days prior to the earlier to occur of the Commencement Date or
the date Tenant is provided with possession of the Premises, and thereafter as
necessary to assure that Landlord always has current certificates evidencing
Tenant’s Insurance. If any such initial or replacement policies or certificates
are not furnished within the time(s) specified herein, Tenant shall be deemed to
be in material Default under this Lease without the benefit of any additional
notice or cure period provided in Section 21 below. In addition, following three
(3) business days written notice to Tenant, Landlord shall have the right, but
not the obligation, to procure the insurance that Tenant is obligated to procure
and maintain hereunder, at Tenant’s cost, and Tenant shall pay the cost thereof
within ten (10) business days following Landlord’s submission of an invoice
therefor. In no event shall the limits of any insurance policy obtained by a
Tenant be considered to limit the liability of Tenant under this Lease.

(c) Property Insurance. Landlord shall obtain, at Tenant’s sole cost and expense
a policy or policies of insurance covering loss or damage to the Premises, in
the amount of the full replacement value thereof, as the same may exist from
time to time as reasonably determined by Landlord in a manner consistent with
generally accepted commercial office building management practices or as may be
required by lenders having liens on the Premises (but not any of Tenant’s
property), against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, flood (if in a flood zone),
earthquake, and special extended perils (“All Risk”, as such term is used in the
insurance industry), including twelve (12) months rent loss insurance. Said
insurance shall provide for payment of loss to Landlord, or to the holders of
mortgages or the beneficiaries under deeds of trust on the Premises.

(d) Tenant’s Use. Tenant will not keep, use, sell or offer for sale in or upon
the Premises any article which may be prohibited by any insurance policy
periodically in force covering the Premises. If Tenant’s occupancy or business
in, or on, the Premises, whether or not Landlord has consented to the same,
results in any increase in premiums for the insurance periodically carried by
Landlord with respect to the Building or results in the need for Landlord to
maintain special or additional insurance, Tenant agrees to pay Landlord the cost
of any such increase in premiums or special or additional coverage as additional
rent within thirty (30) days after being billed therefor by Landlord. In
determining whether increased premiums are a result of Tenant’s use of the
Premises, a schedule issued by the organization computing the insurance rate on
the Building showing the various components of such rate, will be conclusive
evidence of the several items and charges which make up such rate. Tenant agrees
to promptly comply with all reasonable requirements of the insurance authority
or any present or future insurer relating to the Premises.

(e) Cancellation of Landlord’s Policies. If any of Landlord’s insurance policies
are canceled or cancellation is threatened or the coverage reduced or threatened
to be reduced in any way because of the use of the Premises or any part thereof
by Tenant or any assignee or subtenant of Tenant or by anyone Tenant permits on
the Premises and, if Tenant fails to remedy the condition giving rise to such
cancellation, threatened cancellation, reduction of coverage, threatened
reduction of coverage, increase in premiums, or threatened increase in premiums,
within forty-eight (48) hours after notice thereof, Tenant will be deemed to be
in material default of this Lease and Landlord may, at its option, either
terminate this Lease or enter upon the Premises and attempt to remedy such
condition, and Tenant shall promptly pay Landlord the reasonable costs of such
remedy as additional rent. If Landlord is unable, or elects not to remedy such
condition, then Landlord will have all of the remedies provided for in this
Lease in the event of a default by Tenant.

(f) Waiver of Claims. Notwithstanding any provision of this Lease to the
contrary, whenever (a) any loss, cost, damage or expense (collectively,
“damage”) resulting from fire, explosion or any other casualty is incurred by
either Landlord or by Tenant or by anyone claiming by, through or under Landlord
or Tenant in connection with the Premises and/or its contents, and (b) such
party is covered in whole or in part by insurance with respect to such damage or
is required under this Lease to be so insured, then the party so insured (or so
required) hereby waives (on its own behalf and on behalf of its insurer) any
claims against and releases the other party from any liability said other party
may have on account of such damage. The foregoing shall not be deemed or
construed to limit or release Tenant’s liability for any applicable insurance
deductible, provided that Tenant’s obligation to pay the cost of capital repairs
and replacements as Tenant’s deductible work shall be subject to the terms and
conditions of this Lease.

19. DAMAGE OR DESTRUCTION.

 

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(a) Partial Destruction. If the Premises are damaged by fire or other casualty
to an extent not exceeding thirty-five percent (35%) of the full replacement
cost thereof, and Landlord’s contractor reasonably estimates in a writing
delivered to Landlord and Tenant that the damage thereto may be repaired,
reconstructed or restored to substantially its condition immediately prior to
such damage within two hundred seventy (270) days from the date of such
casualty, and Landlord will receive insurance proceeds sufficient to cover the
costs of such repairs, reconstruction and restoration (including proceeds from
Tenant and/or Tenant’s insurance which Tenant is required to deliver to Landlord
pursuant to Section 19(e) below to cover Tenant’s obligation for the costs of
repair, reconstruction and restoration of any portion of any Tenant Improvements
or Alterations for which Tenant is responsible to insure under this Lease), then
Landlord agrees to commence and proceed diligently with the work of repair,
reconstruction and restoration and this Lease will continue in full force and
effect, subject to Section 19(f) below.

(b) Substantial Destruction. Any damage or destruction to the Premises which
Landlord is not obligated to repair pursuant to Section 19(a) above will be
deemed a substantial destruction. In the event of a substantial destruction,
Landlord may elect to either: (i) repair, reconstruct and restore the portion of
the Premises damaged by such casualty, in which case this Lease will continue in
full force and effect, subject to Tenant’s termination right contained in
Section 19(d) below; or (ii) terminate this Lease effective as of the date which
is thirty (30) days after Tenant’s receipt of Landlord’s election to so
terminate.

(c) Notice. Under any of the conditions of Sections 19(a) or (b) above, Landlord
agrees to give written notice to Tenant of its intention to repair or terminate,
as permitted in such paragraphs, within the earlier of forty-five (45) days
after the occurrence of such casualty, or fifteen (15) days after Landlord’s
receipt of the estimate from Landlord’s contractor (the applicable time period
to be referred to herein as the “Notice Period”).

(d) Tenant’s Termination Rights. If Landlord elects to repair, reconstruct and
restore pursuant to Section 19(b)(i) hereinabove, and if Landlord’s contractor
estimates that as a result of such damage, Tenant cannot be given reasonable use
of and access to the Premises within two hundred seventy (270) days after the
date of such damage, then Tenant may terminate this Lease effective upon
delivery of written notice to Landlord within ten (10) days after Landlord
delivers notice to Tenant of its election to so repair, reconstruct or restore.

(e) Tenant’s Costs and Insurance Proceeds. In the event of any damage or
destruction of all or any part of the Premises, Tenant agrees to immediately
(i) notify Landlord thereof, and (ii) deliver to Landlord all property insurance
proceeds received by Tenant with respect to any Tenant Improvements and
Alterations, but excluding proceeds for Tenant’s furniture, fixtures, equipment
and other personal property, whether or not this Lease is terminated as
permitted in this Section 19, and Tenant hereby assigns to Landlord all rights
to receive such insurance proceeds. If, for any reason (including Tenant’s
failure to obtain insurance for the full replacement cost of any Tenant
Improvements or Alterations from any and all casualties), Tenant fails to
receive insurance proceeds covering the full replacement cost of any Tenant
Improvements or Alterations which are damaged, Tenant will be deemed to have
self-insured the replacement cost of such items, and upon any damage or
destruction thereto, Tenant agrees to immediately pay to Landlord the full
replacement cost of such items, less any insurance proceeds actually received by
Landlord from Landlord’s or Tenant’s insurance with respect to such items;
provided, however, that Landlord shall not be obligated to restore improvements
which it has specified must be removed upon expiration of this Lease unless
Tenant provides the insurance proceeds therefor, which Tenant, at its option,
may retain.

(f) Abatement of Rent. In the event of any damage, repair, reconstruction and/or
restoration described in this Section 19, rent will be abated or reduced, as the
case may be, in proportion to the degree to which Tenant’s use of the Premises
is impaired during such period of repair until such use is restored. Except for
abatement of rent as provided hereinabove, Tenant will not be entitled to any
compensation or damages for loss of, or interference with, Tenant’s business or
use or access of all or any part of the Premises or for lost profits or any
other consequential damages of any kind or nature, which result from any such
damage, repair, reconstruction or restoration.

(g) Inability to Complete. Notwithstanding anything to the contrary contained in
this Section 19, if Landlord is obligated or elects to repair, reconstruct
and/or restore the damaged portion of the Premises pursuant to Sections 19(a) or
19(b)(i) above, but is delayed from completing such repair, reconstruction
and/or restoration beyond the date which is ninety (90) days after the date
estimated by Landlord’s contractor for completion thereof by reason of any
causes (other than delays caused by Tenant, its subtenants, employees, agents or
contractors or delays which are beyond the reasonable control of Landlord as
described in Section 32

 

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below), then either Landlord or Tenant may elect to terminate this Lease upon
ten (10) days’ prior written notice given to the other after the expiration of
such ninety (90) day period.

(h) Damage Near End of Term. Landlord and Tenant shall each have the right to
terminate this Lease if any material damage to the Building occurs during the
last twelve (12) months of the Term of this Lease where Landlord’s contractor
estimates in a writing delivered to Landlord and Tenant that the repair,
reconstruction or restoration of such damage cannot be completed within
thirty (30) days after the date of such casualty. If either party desires to
terminate this Lease under this Section 19(h), it shall provide written notice
to the other party of such election within ten (10) days after receipt of
Landlord’s contractor’s repair estimates.

(i) Waiver of Termination Right. Landlord and Tenant agree that the foregoing
provisions of this Section 19 are to govern their respective rights and
obligations in the event of any damage or destruction and supersede and are in
lieu of the provisions of any applicable law, statute, ordinance, rule,
regulation, order or ruling now or hereafter in force which provide remedies for
damage or destruction of leased premises.

(j) Termination. Upon any termination of this Lease under any of the provisions
of this Section 19, the parties will be released without further obligation to
the other from the date possession of the Premises is surrendered to Landlord
except for items which have accrued and are unpaid as of the date of termination
and matters which are to survive any termination of this Lease as provided in
this Lease.

20. EMINENT DOMAIN.

(a) Substantial Taking. If more than twenty percent (20%) of the floor area of
the Building, or twenty percent (20%) of the land area of the Premises which is
not occupied by the Building, is taken for any public or quasi-public purpose by
any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, either party
will have the right to terminate this Lease effective as of the date possession
is required to be surrendered to such authority.

(b) Partial Taking; Abatement of Rent. In the event of a taking of a portion of
the Premises which does not constitute a substantial taking under Section 20(a)
above, then, neither party will have the right to terminate this Lease and
Landlord will thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Landlord receives proceeds
therefor from the condemning authority), and rent will be abated in proportion
to the percentage of parking or the floor area of the Premises which Tenant is
deprived of on account of such taking; provided, however, there will be no
abatement of rent if the only area taken is that which does not have a building
or parking area used by Tenant located thereon.

(c) Condemnation Award. In connection with any taking of all or any portion of
the Premises, Landlord will be entitled to receive the entire amount of any
award which may be made or given in such taking or condemnation, without
deduction or apportionment for any estate or interest of Tenant, it being
expressly understood and agreed by Tenant that no portion of any such award will
be allowed or paid to Tenant for any so-called bonus or excess value of this
Lease, and such bonus or excess value will be the sole property of Landlord.
Tenant agrees not to assert any claim against Landlord or the taking authority
for any compensation because of such taking (including any claim for bonus or
excess value of this Lease); provided, however, if any portion of the Premises
is taken, Tenant will have the right to recover from the condemning authority
(but not from Landlord unless included in the award to Landlord) any
compensation as may be separately awarded or recoverable by Tenant for the
taking of Tenant’s furniture, fixtures, equipment and other personal property
within the Premises, for Tenant’s relocation expenses, and for any other damage
to Tenant’s business by reason of such taking.

(d) Temporary Taking. In the event of taking of the Premises or any part thereof
for temporary use, (i) this Lease will remain unaffected thereby and rent will
equitably abate for the duration of the taking, and (ii) Landlord will be
entitled to receive such portion or portions of any award made for such use with
respect to the period of the taking. For purpose of this Section 20(d), a
temporary taking shall be defined as a taking for a period of thirty (30) days
or less.

21. DEFAULTS AND REMEDIES.

(a) Defaults. The occurrence of any one (1) or more of the following events will
be deemed a default by Tenant:

 

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(i) The abandonment of the Premises by Tenant, which for purposes of this Lease
means any absence by Tenant from the Premises for five (5) business days or
longer and Tenant is in default under any provision of this Lease.

(ii) The failure by Tenant to make any payment of rent or additional rent or any
other payment required to be made by Tenant hereunder, as and when due, where
such failure continues for a period of three (3) days after written notice
thereof from Landlord to Tenant; provided, however, that any such notice will be
in lieu of, and not in addition to, any notice required under applicable law.

(iii) The failure by Tenant to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by Tenant,
other than as specified in Sections 21(a)(i) or (ii) above, where such failure
continues for a period of twenty (20) days (or such other period of time as may
be specified in this Lease as to the specific circumstances) after written
notice thereof from Landlord to Tenant. The provisions of any such notice will
be in lieu of, and not in addition to, any notice required under applicable law.
If the nature of Tenant’s default is such that more than twenty (20) days (or
such other period of time as may be specified in this Lease as to the specific
circumstances) are reasonably required for its cure, then Tenant will not be
deemed to be in default if Tenant, with Landlord’s concurrence, commences such
cure within such twenty (20) day period (or such other period of time as may be
specified in this Lease as to the specific circumstances) and thereafter
diligently prosecutes such cure to completion.

(iv)(a) The making by Tenant of any general assignment for the benefit of
creditors; (b) the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty (60) days); (c) the appointment of a
trustee or receiver to take possession of substantially all of Tenant’s assets
located at the Premises or of Tenant’s interest in this Lease, where possession
is not restored to Tenant within thirty (30) days; or (d) the attachment,
execution or other judicial seizure of substantially all of Tenant’s assets
located at the Premises or of Tenant’s interest in this Lease where such seizure
is not discharged within thirty (30) days.

(b) Landlord’s Remedies; Termination. In the event of any default by Tenant, in
addition to any other remedies available to Landlord at law or in equity under
applicable law, Landlord will have the immediate right and option to terminate
this Lease and all rights of Tenant hereunder. If Landlord elects to terminate
this Lease then, to the extent permitted under applicable law, Landlord may
recover from Tenant: (i) the worth at the time of award of any unpaid rent which
had been earned at the time of such termination; plus (ii) the worth at the time
of award of the amount by which the unpaid rent which would have been earned
after termination until the time of award exceeds the amount of such rent loss
that Tenant proves could have been reasonably avoided; plus (iii) the worth at
the time of award of the amount by which the unpaid rent for the balance of the
Term after the time of award exceeds the amount of such rent loss that Tenant
proves could be reasonably avoided; plus (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant’s failure
to perform its obligations under this Lease or which, in the ordinary course of
things, results therefrom.

As used in Sections 21(b)(i) and (ii) above, the “worth at the time of award” is
computed by allowing interest at the Interest Rate. As used in
Section 21(b)(iii) above, the “worth at the time of award” is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).

(c) Landlord’s Remedies; Re-Entry Rights. In the event of any default by Tenant,
in addition to any other remedies available to Landlord under this Lease, at law
or in equity, Landlord will also have the right, subject to the terms of
applicable law, to re-enter the Premises and remove all persons and property
from the Premises; such property may be removed and stored in a public warehouse
or elsewhere and/or disposed of at the sole cost and expense of and for the
account of Tenant in accordance with the provisions of Section 12(h) of this
Lease or any other procedures permitted by applicable law. Subject to the terms
of applicable law, no entry into the Premises shall be construed as an election
to terminate this Lease.

(d) Landlord’s Remedies; Re-Letting. In the event of the abandonment of the
Premises by Tenant and if Landlord does not elect to terminate this Lease,
Landlord may from time to time, without terminating this Lease, either recover
all rent as it becomes due or relet the Premises or any part thereof on terms
and conditions as Landlord in its sole and absolute discretion may deem
advisable with the right to make alterations and repairs to the Premises in
connection with such reletting. If Landlord elects to relet the Premises, then
rents received by

 

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Landlord from such reletting will be applied: first, to the payment of any
indebtedness other than rent due hereunder from Tenant to Landlord; second, to
the payment of any cost of such reletting; third, to the payment of the cost of
any alterations and repairs to the Premises incurred in connection with such
reletting; fourth, to the payment of rent due and unpaid hereunder and the
residue, if any, will be held by Landlord and applied to payment of future rent
as the same may become due and payable hereunder. Should that portion of such
rents received from such reletting during any month, which is applied to the
payment of rent hereunder, be less than the rent payable during that month by
Tenant hereunder, then Tenant agrees to pay such deficiency to Landlord
immediately upon demand therefor by Landlord. Such deficiency will be calculated
and paid monthly.

(e) Landlord’s Remedies; Performance for Tenant. All covenants and agreements to
be performed by Tenant under any of the terms of this Lease are to be performed
by Tenant at Tenant’s sole cost and expense and without any abatement of rent.
If Tenant fails to pay any sum of money owed to any party other than Landlord,
for which it is liable under this Lease, or if Tenant fails to perform any other
act on its part to be performed hereunder, and such failure continues for
twenty (20) days after notice thereof by Landlord, Landlord may, without waiving
or releasing Tenant from its obligations, but shall not be obligated to, make
any such payment or perform any such other act to be made or performed by
Tenant. Tenant agrees to reimburse Landlord upon demand for all sums so paid by
Landlord and all necessary incidental costs, together with interest thereon at
the Interest Rate, from the date of such payment by Landlord until reimbursed by
Tenant. This remedy shall be in addition to any other right or remedy of
Landlord set forth in this Section 21.

(f) Late Payment. If Tenant fails to pay any installment of rent within five (5)
days of when due or if Tenant fails to make any other payment for which Tenant
is obligated under this Lease within five (5) days of when due, such late amount
will accrue interest at the Interest Rate and Tenant agrees to pay Landlord as
additional rent such interest on such amount from the date such amount becomes
due until such amount is paid. In addition, if Tenant fails to pay any
installment of rent within five (5) days of when due or if Tenant fails to make
any other payment for which Tenant is obligated under this Lease within five (5)
days of when due, Tenant agrees to pay to Landlord concurrently with such late
payment amount, as additional rent, a late charge equal to five percent (5%) of
the amount due to compensate Landlord for the extra costs Landlord will incur as
a result of such late payment. The parties agree that (i) it would be
impractical and extremely difficult to fix the actual damage Landlord will
suffer in the event of Tenant’s late payment, (ii) such interest and late charge
represents a fair and reasonable estimate of the detriment that Landlord will
suffer by reason of late payment by Tenant, and (iii) the payment of interest
and late charges are distinct and separate in that the payment of interest is to
compensate Landlord for the use of Landlord’s money by Tenant, while the payment
of late charges is to compensate Landlord for Landlord’s processing,
administrative and other costs incurred by Landlord as a result of Tenant’s
delinquent payments. Acceptance of any such interest and late charge will not
constitute a waiver of the Tenant’s default with respect to the overdue amount,
or prevent Landlord from exercising any of the other rights and remedies
available to Landlord. If Tenant incurs a late charge more than three (3) times
in any period of twelve (12) months during the Term, then, notwithstanding that
Tenant cures the late payments for which such late charges are imposed, Landlord
will have the right to require Tenant thereafter to (i) pay all installments of
Monthly Base Rent quarterly in advance for the next twelve (12) months and
(ii) submit all payments of Monthly Base Rent via cashier’s check or wire
transfer. Further, in the event any check submitted by Tenant is returned by
reason of “non sufficient funds”, Tenant shall pay to Landlord an “NSF Fee” at
Landlord’s standard rate then in effect. Notwithstanding the foregoing, Landlord
will not assess a late charge until Landlord has given written notice of such
late payment for the first late payment in any twelve (12) month period and
after Tenant has not cured such late payment within three (3) days from receipt
of such notice. No other notices will be required during the following twelve
(12) months for a late charge to be incurred.

(g) Rights and Remedies Cumulative. All rights, options and remedies of Landlord
contained in this Lease will be construed and held to be cumulative, and no one
of them will be exclusive of the other, and Landlord shall have the right to
pursue any one or all of such remedies or any other remedy or relief which may
be provided by law or in equity, whether or not stated in this Lease. Nothing in
this Section 21 will be deemed to limit or otherwise affect Tenant’s
indemnification of Landlord pursuant to any provision of this Lease.

22. LANDLORD’S DEFAULT. Landlord will not be in default in the performance of
any obligation required to be performed by Landlord under this Lease unless
Landlord fails to perform such obligation within thirty (30) days after the
receipt of written notice from Tenant specifying in detail Landlord’s failure to
perform; provided however, that if the nature of Landlord’s obligation is such
that more than thirty (30) days are required for performance, then

 

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Landlord will not be deemed in default if it commences such performance within
such thirty (30) day period and thereafter diligently pursues the same to
completion.

23. ASSIGNMENT AND SUBLETTING.

(a) Restriction on Transfer. Except as expressly provided in this Section 23,
Tenant will not, either voluntarily or by operation of law, assign or encumber
this Lease or any interest herein or sublet the Premises or any part thereof, or
permit the use or occupancy of the Premises by any party other than Tenant (any
such assignment, encumbrance, sublease or the like will sometimes be referred to
as a “Transfer”), without the prior written consent of Landlord, which consent
Landlord will not unreasonably withhold. It is further understood that any
renewal, extension or modification of an existing sublease shall also require
Landlord’s prior written consent.

(b) Corporate and Partnership Transfers. For purposes of this Section 23, if
Tenant is a corporation, partnership or other entity, any transfer, assignment,
encumbrance or hypothecation of fifty percent (50%) or more (individually or in
the aggregate) of any stock or other ownership interest in such entity, and/or
any transfer, assignment, hypothecation or encumbrance of any controlling
ownership or voting interest in such entity, will be deemed a Transfer and will
be subject to all of the restrictions and provisions contained in this
Section 23. Notwithstanding the foregoing, the immediately preceding sentence
will not apply to any transfers of stock of Tenant if Tenant or Tenant’s parent
company is a publicly-held corporation and such stock is transferred publicly
over a recognized security exchange or over-the-counter market.

(c) Permitted Controlled Transfers. Notwithstanding the provisions of this
Section 23 to the contrary, Tenant may assign this Lease or sublet the Premises
or any portion thereof (“Permitted Transfer”), without Landlord’s consent, to
any parent, subsidiary or affiliate entity which controls, is controlled by or
is under common control with Tenant, or to any entity resulting from a merger or
consolidation with Tenant, or to, with respect to partial subleases only, any
person or entity acting as a subcontractor or service provider for Tenant, or to
any person or entity which acquires substantially all the assets of Tenant’s
business as a going concern, provided that: (i) at least ten (10) days prior to
such assignment or sublease, Tenant delivers to Landlord the financial
statements and other financial and background information of the assignee or
sublessee described in Section 23(d) below; (ii) if an assignment, the assignee
assumes, in full, the obligations of Tenant under this Lease (or if a sublease,
the sublessee of a portion of the Premises or Term assumes, in full, the
obligations of Tenant with respect to such portion); (iii) the financial net
worth of the assignee as of the time of the proposed assignment equals or
exceeds that of Tenant as of the date of execution of this Lease; (iv) Tenant
remains fully liable under this Lease; and (v) the use of the Premises under
Section 7 above remains materially unchanged. A party with whom Tenant enters
into a Permitted Transfer may be referred to herein as a “Permitted Transferee”.

(d) Transfer Notice. If Tenant desires to effect a Transfer, then at least
thirty (30) days prior to the date when Tenant desires the Transfer to be
effective (the “Transfer Date”), Tenant agrees to give Landlord a notice (the
“Transfer Notice”), stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as
“Transferee”), reasonable information (including references) concerning the
character, ownership, and financial condition of the proposed Transferee, the
Transfer Date, any ownership or commercial relationship between Tenant and the
proposed Transferee, and the consideration and all other material terms and
conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require. If Landlord reasonably requests additional detail, the
Transfer Notice will not be deemed to have been received until Landlord receives
such additional detail, and Landlord may withhold consent to any Transfer until
such information is provided to it.

(e) Landlord’s Options. Within thirty (30) days of Landlord’s receipt of any
Transfer Notice, and any additional information requested by Landlord concerning
the proposed Transferee’s financial responsibility, Landlord will elect to do
one of the following: (i) consent to the proposed Transfer; (ii) refuse such
consent, which refusal shall be on reasonable grounds including, without
limitation, those set forth in Section 23(f) below; or (iii) if an assignment or
a sublease for over 40% of the Premises for substantially the remaining term of
the Lease, terminate this Lease as to all, if an assignment, or such portion of
the Premises which is proposed to be sublet and recapture all or such portion of
the Premises for reletting by Landlord.

(f) Reasonable Disapproval. Landlord and Tenant hereby acknowledge that
Landlord’s disapproval of any proposed Transfer pursuant to Section 23(e)
above will be deemed reasonable if based upon any reasonable factor, including,
without limitation, any or all of the

 

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following factors: (i) the proposed Transferee is a governmental entity;
(ii) the portion of the Premises to be sublet or assigned is irregular in shape
with inadequate means of ingress and egress; (iii) the use of the Premises by
the Transferee (a) is not permitted by the use provisions in Section 7 hereof,
or (b) poses a risk of increased liability to Landlord; (iv) the Transferee does
not have the financial capability to fulfill the obligations imposed by the
Transfer and this Lease, or (v) the Transferee poses a business or other
economic risk which Landlord reasonably deems unacceptable.

(g) Additional Conditions. A condition to Landlord’s consent to any Transfer of
this Lease will be the delivery to Landlord of a true copy of the fully executed
instrument of assignment, sublease, transfer or hypothecation, and, in the case
of an assignment, the delivery to Landlord of an agreement executed by the
Transferee in form and substance reasonably satisfactory to Landlord, whereby
the Transferee assumes and agrees to be bound by all of the terms and provisions
of this Lease and to perform all of the obligations of Tenant hereunder. As a
condition for granting its consent to any assignment or sublease, Landlord may
require that the assignee or sublessee remit directly to Landlord on a monthly
basis, all monies due to Tenant by said assignee or sublessee if Tenant is in
monetary default of the Lease. As a condition to Landlord’s consent to any
sublease, such sublease must provide that it is subject and subordinate to this
Lease and to all mortgages; that Landlord may enforce the provisions of the
sublease, including collection of rent; that in the event of termination of this
Lease for any reason, including without limitation a voluntary surrender by
Tenant, or in the event of any reentry or repossession of the Premises by
Landlord, Landlord may, at its option, either (i) terminate the sublease, or
(ii) take over all of the right, title and interest of Tenant, as sublessor,
under such sublease, in which case such sublessee will attorn to Landlord, but
that nevertheless Landlord will not (A) be liable for any previous act or
omission of Tenant under such sublease, (B) be subject to any defense or offset
previously accrued in favor of the sublessee against Tenant, or (C) be bound by
any previous modification of any sublease made without Landlord’s written
consent, or by any previous prepayment by sublessee of more than one month’s
rent.

(h) Excess Rent. If Landlord consents to any assignment of this Lease, Tenant
agrees to pay to Landlord, as additional rent, all sums and other consideration
actually paid to and for the benefit of Tenant by the assignee on account of the
assignment, as and when such sums and other consideration are paid by the
assignee to or for the benefit of Tenant (or, if Landlord so requires, and
without any release of Tenant’s liability for the same, Tenant agrees to
instruct the assignee to pay such sums and other consideration directly to
Landlord). If for any sublease, Tenant receives rent or other consideration,
either initially or over the term of the sublease, in excess of the rent fairly
allocable to the portion of the Premises which is subleased based on square
footage, Tenant agrees to pay to Landlord as additional rent, fifty percent
(50%) of any excess of each such payment of rent or other consideration received
by Tenant promptly after its receipt. In calculating excess rent or other
consideration which may be payable to Landlord under this paragraph, Tenant will
be entitled to deduct commercially reasonable third party brokerage commissions
and attorneys’ fees, tenant improvement construction costs and other amounts
reasonably and actually expended by Tenant in connection with such assignment or
subletting. Upon request, Tenant will provide reasonable evidence of such
expenditures to Landlord.

(i) Termination Rights. If Tenant requests Landlord’s consent to any assignment
or subletting of all or a portion of the Premises, Landlord will have the right,
as provided in Section 23(e) above, to terminate this Lease as to all or such
portion of the Premises which is proposed to be sublet or assigned effective as
of the date Tenant proposes to sublet or assign all or less than all of the
Premises. Landlord’s right to terminate this Lease as to less than all of the
Premises proposed to be sublet or assigned will not terminate as to any future
additional subletting or assignment as a result of Landlord’s consent to a
subletting of less than all of the Premises or Landlord’s failure to exercise
its termination right with respect to any subletting or assignment. Landlord
will exercise such termination right, if at all, by giving written notice to
Tenant within thirty (30) days of receipt by Landlord of the financial
responsibility information required by this Section 23. Tenant understands and
acknowledges that the option, as provided in this Section 23, to terminate this
Lease as to all or such portion of the Premises which is proposed to be sublet
or assigned rather than approve the subletting or assignment of all or a portion
of the Premises, is a material inducement for Landlord’s agreeing to lease the
Premises to Tenant upon the terms and conditions herein set forth. In the event
of any such termination with respect to less than all of the Premises, the cost
of segregating the recaptured space from the balance of the Premises will be
paid by Tenant and Tenant’s future monetary obligations under this Lease will be
reduced proportionately on a square footage basis to correspond to the balance
of the Premises which Tenant continues to lease.

 

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(j) No Release. No Transfer will release Tenant of Tenant’s obligations under
this Lease or alter the primary liability of Tenant to pay the rent and to
perform all other obligations to be performed by Tenant hereunder. Landlord may
require that any Transferee remit directly to Landlord on a monthly basis, all
monies due Tenant by said Transferee. However, the acceptance of rent by
Landlord from any other person will not be deemed to be a waiver by Landlord of
any provision hereof. Consent by Landlord to one Transfer will not be deemed
consent to any subsequent Transfer. In the event of default by any Transferee of
Tenant or any successor of Tenant in the performance of any of the terms hereof,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against such Transferee or successor. Landlord may consent to
subsequent assignments of this Lease or sublettings or amendments or
modifications to this Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and any such actions will not relieve Tenant of liability under this Lease.

(k) Administrative and Attorneys’ Fees. If Tenant effects a Transfer (other than
a Permitted Transfer) or requests the consent of Landlord to any Transfer
(whether or not such Transfer is consummated), then, upon demand, Tenant agrees
to reimburse Landlord an administrative fee of $500.00 plus any reasonable
attorneys’ fees incurred by Landlord in connection with such Transfer or request
for consent (whether attributable to Landlord’s in-house attorneys or paralegals
or otherwise). Reimbursement of Landlord’s attorneys’ fees will in no event
obligate Landlord to consent to any proposed Transfer.

24. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee or beneficiary with a deed of trust
encumbering the Premises, or any lessor of a ground or underlying lease with
respect to the Premises, this Lease will be subject and subordinate at all times
to: (i) all ground leases or underlying leases which may now exist or hereafter
be executed affecting the Premises; and (ii) the lien of any mortgage or deed of
trust which may now exist or hereafter be executed for which the Premises, or
Landlord’s interest and estate in any of said items, is specified as security.
Notwithstanding the foregoing, Landlord reserves the right to subordinate any
such ground leases or underlying leases or any such liens to this Lease. If any
such ground lease or underlying lease terminates for any reason or any such
mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure
is made for any reason, at the election of Landlord’s successor in interest,
Tenant agrees to attorn to and become the tenant of such successor in which
event Tenant’s right to possession of the Premises will not be disturbed as long
as Tenant is not in default under this Lease. Tenant hereby waives its rights
under any law which gives or purports to give Tenant any right to terminate or
otherwise adversely affect this Lease and the obligations of Tenant hereunder in
the event of any such foreclosure proceeding or sale. Tenant covenants and
agrees to execute and deliver, upon demand by Landlord and in the form
reasonably required by Landlord, any additional documents evidencing the
priority or subordination of this Lease and Tenant’s attornment agreement with
respect to any such ground lease or underlying leases or the lien of any such
mortgage or deed of trust if such subordination agreement includes a
non-disturbance provision. If Tenant fails to sign and return any such documents
within ten (10) days of receipt, Tenant will be in default hereunder. Without
limiting the generality of the foregoing, Tenant agrees to execute and deliver,
concurrently with the execution and delivery of this Lease, a subordination,
non-disturbance and attornment agreement (“SNDA”) from the current lender
holding a lien on the Building as of the date hereof (“Landlord’s Lender”), in
the current lender’s standard form, which is attached hereto as Exhibit D.

25. ESTOPPEL CERTIFICATE. Within ten (10) days following any written request
which Landlord may make from time to time, Tenant agrees to execute and deliver
to Landlord a statement, in a form similar to the form of Exhibit C attached
hereto or in such other form as may be required by Landlord’s lender,
certifying: (i) the date of commencement of this Lease; (ii) whether this Lease
is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect, and stating the date
and nature of such modifications); (iii) the date to which the rent and other
sums payable under this Lease have been paid; (iv) whether there are any known
current defaults under this Lease by either Landlord or Tenant; and (v) such
other matters reasonably requested by Landlord. Landlord and Tenant intend that
any statement delivered pursuant to this Section 25 may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of the Premises or
any interest therein. Tenant’s failure to deliver such statement within such
time will be conclusive upon Tenant (i) that this Lease is in full force and
effect, without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in Landlord’s performance, and (iii) that not more
than one (1) month’s rent has been paid in advance. Without limiting the
foregoing, if Tenant fails to deliver any such statement within such ten (10)
day period, Landlord may deliver to Tenant an additional request for such
statement and Tenant’s failure to deliver such statement to Landlord within
five (5) days after delivery of such additional request will

 

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constitute a default under this Lease. Tenant agrees to indemnify and protect
Landlord from and against any and all claims, damages, losses, liabilities and
expenses (including attorneys’ fees and costs) attributable to any failure by
Tenant to timely deliver any such estoppel certificate to Landlord as required
by this Section 25.

26. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign
any of the aforementioned documents upon request of Landlord and failure to do
so shall constitute a material breach of this Lease.

27. RULES AND REGULATIONS. Tenant agrees to faithfully observe and comply with
the “Rules and Regulations”, a copy of which is attached hereto and incorporated
herein by this reference as Exhibit E, and all reasonable and nondiscriminatory
modifications thereof and additions thereto from time to time put into effect by
Landlord.

28. MODIFICATION AND CURE RIGHTS OF LANDLORD’S MORTGAGEES AND LESSORS. If, in
connection with Landlord’s obtaining or entering into any financing or ground
lease affecting the Premises, the lender or ground lessor requests modifications
to this Lease, Tenant, within ten (10) days after request therefor, agrees to
execute an amendment to this Lease incorporating such modifications, provided
such modifications are reasonable and do not increase the obligations of Tenant
under this Lease or adversely affect the leasehold estate created by this Lease.
In the event of any default on the part of Landlord, Tenant will give notice by
registered or certified mail to any beneficiary of a deed of trust or mortgage
covering the Premises or ground lessor of Landlord whose address has been
furnished to Tenant, and Tenant agrees to offer such beneficiary, mortgagee or
ground lessor a reasonable opportunity to cure the default (including with
respect to any such beneficiary or mortgagee, time to obtain possession of the
Premises, subject to this Lease and Tenant’s rights hereunder, by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure).

29. DEFINITION OF LANDLORD. The term “Landlord”, as used in this Lease, so far
as covenants or obligations on the part of Landlord are concerned, means and
includes only the owner or owners, at the time in question, of the fee title of
the Premises or the lessees under any ground lease, if any. In the event of any
transfer, assignment or other conveyance or transfers of any such title (other
than a transfer for security purposes only), Landlord herein named (and in case
of any subsequent transfers or conveyances, the then grantor) will be
automatically relieved from and after the date of such transfer, assignment or
conveyance of all liability as respects the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed, so long as the transferee assumes in writing all such covenants and
obligations of Landlord arising after the date of such transfer. Landlord and
Landlord’s transferees and assignees have the absolute right to transfer all or
any portion of their respective title and interest in the Premises and/or this
Lease without the consent of Tenant, and such transfer or subsequent transfer
will not be deemed a violation on Landlord’s part of any of the terms and
conditions of this Lease.

30. WAIVER. The waiver by either party of any breach of any term, covenant or
condition herein contained will not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein contained,
nor will any custom or practice which may develop between the parties in the
administration of the terms hereof be deemed a waiver of or in any way affect
the right of either party to insist upon performance in strict accordance with
said terms. The subsequent acceptance of rent or any other payment hereunder by
Landlord will not be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, other than the failure of Tenant
to pay the particular rent so accepted, regardless of Landlord’s knowledge of
such preceding breach at the time of acceptance of such rent. No acceptance by
Landlord of a lesser sum than the basic rent and additional rent or other sum
then due will be deemed to be other than on account of the earliest installment
of such rent or other amount due, nor will any endorsement or statement on any
check or any letter accompanying any check 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 installment or other amount or pursue any
other remedy provided in this Lease. The consent or approval of Landlord to or
of any act by Tenant requiring Landlord’s consent or approval will not be deemed
to waive or render unnecessary Landlord’s consent or approval to or of any
subsequent similar acts by Tenant.

31. PARKING. So long as this Lease is in effect and provided Tenant is not in
default hereunder, and so long as Tenant leases the entire Building, Tenant
shall have the right to use all parking areas for the Building. Landlord
reserves the right from time to time to modify and/or

 

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adopt reasonable and non-discriminatory rules and regulations for the parking
areas as it deems reasonably necessary for the operation of the parking areas.

32. FORCE MAJEURE. If either Landlord or Tenant is delayed, hindered in or
prevented from the performance of any act required under this Lease by reason of
strikes, lock-outs, labor troubles, inability to procure standard materials,
failure of power, restrictive governmental laws, regulations or orders or
governmental action or inaction (including failure, refusal or delay in issuing
permits, approvals and/or authorizations which is not the result of the action
or inaction of the party claiming such delay), riots, civil unrest or
insurrection, war, fire, earthquake, flood or other natural disaster, unusual
and unforeseeable delay which results from an interruption of any public
utilities (e.g., electricity, gas, water, telephone) or other unusual and
unforeseeable delay not within the reasonable control of the party delayed in
performing work or doing acts required under the provisions of this Lease, then
performance of such act will be excused for the period of the delay and the
period for the performance of any such act will be extended for a period
equivalent to the period of such delay. The provisions of this Section 32 will
not operate to excuse Tenant from prompt payment of rent or any other payments
required under the provisions of this Lease.

33. EXTERIOR SIGNAGE. Subject to the approval of all applicable governmental and
quasi-governmental entities and applicable covenants, conditions and
restrictions, and subject to all Legal Requirements and the terms hereof,
Landlord hereby grants Tenant the right to install and maintain one (1) exterior
sign on top of the Building bearing Tenant’s name (the “Exterior Signage”). The
design, size, specifications, graphics, materials, manner of affixing, exact
location, colors and lighting (if applicable) of the Exterior Signage shall be
(i) consistent with the quality and appearance of the Building, and (ii) subject
to the approval of all applicable governmental authorities, and Landlord’s
approval (which shall not be unreasonably withheld, conditioned or delayed).
Tenant shall install, maintain and repair the Exterior Signage at Tenant’s sole
cost and expense. In addition, Tenant shall pay to Landlord, within thirty
(30) days after demand, from time to time, all other actual, documented and
reasonable costs attributable to the fabrication, installation, insurance,
lighting (if applicable), maintenance and repair of the Exterior Signage, to the
extent not directly paid by Tenant. The signage rights granted to Tenant under
this Section 33 may be exercised by the Original Tenant hereunder and any
Permitted Assignee succeeding to the interest of Tenant hereunder pursuant to a
Permitted Transfer. Further, Tenant’s signage rights shall be conditioned upon
this Lease being in fully force and effect, and Tenant and/or its Permitted
Assignees leasing the entire Building pursuant to the terms hereof. Upon the
expiration or sooner termination of this Lease, or upon the earlier termination
of Tenant’s signage right under this Section 33, Tenant shall, at its sole cost
and expense, remove the Exterior Signage from the Building and repair all damage
to the Building resulting from such removal and restore the affected area to its
original condition existing prior to the installation of such Exterior Signage.
If Tenant fails to complete such removal and/or repair any damage caused by the
removal of the Exterior Signage, Landlord shall have the right to do so, and
Tenant shall reimburse Landlord for the reasonable costs thereof. Subject to the
prior written approval of Landlord, which approval will not be unreasonably
withheld, and Tenant obtaining any necessary permits or approvals from
governmental authorities, Tenant shall also have the right to install other
exterior signage, including directional signage.

34. LIMITATION ON LIABILITY. In consideration of the benefits accruing
hereunder, Tenant on behalf of itself and all successors and assigns of Tenant
covenants and agrees that, in the event of any actual or alleged failure, breach
or default hereunder by Landlord: (a) tenant’s recourse against Landlord for
monetary damages will be limited to Landlord’s interest in the Premises
including, subject to the prior rights of any Mortgagee, Landlord’s interest in
the rents of the Premises and any insurance proceeds payable to Landlord;
(b) except as may be necessary to secure jurisdiction of Landlord, no member or
partner of Landlord shall be sued or named as a party in any suit or action and
no service of process shall be made against any member or partner of Landlord;
(c) no member or partner of Landlord shall be required to answer or otherwise
plead to any service of process; (d) no judgment will be taken against any
member or partner of Landlord and any judgment taken against any member or
partner of Landlord may be vacated and set aside at any time after the fact;
(e) no writ of execution will be levied against the assets of any member or
partner of Landlord; (f) the obligations under this Lease do not constitute
personal obligations of the individual members, partners, directors, officers or
shareholders of Landlord, and Tenant shall not seek recourse against the
individual members, partners, directors, officers or shareholders of Landlord or
any of their personal assets for satisfaction of any liability in respect to
this Lease; and (g) these covenants and agreements are enforceable both by
Landlord and also by any member or partner of Landlord.

 

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35. FINANCIAL STATEMENTS. Subject to the terms of this Section 35 below if
Tenant is a publicly traded company, prior to the execution of this Lease by
Landlord and at any time during the Term of this Lease, upon ten (10) business
days prior written notice from Landlord, Tenant agrees to provide Landlord with
the most current audited financial statement legally available for Tenant and
audited financial statements for the two (2) years prior to the current
financial statement year for Tenant. Tenant shall not be obligated to provide
financials more than once per year, provided that in the event of a proposed
sale or financing of the Building, in the event of a breach or default by Tenant
under the Lease, Tenant shall provide financials upon request (and the once per
year limit shall not be applicable). Such statements are to be prepared in
accordance with generally accepted accounting principles and audited by an
independent certified public accountant. Such financial statements may reflect
the financial condition of Tenant and its affiliated entities on a consolidated
basis if separate financials do not exist. Notwithstanding the foregoing, Tenant
shall not be obligated to deliver to Landlord financial statements for Tenant so
long as (i) the stock of Tenant is publicly traded on a recognized public stock
exchange; and (ii) current consolidated financial statements for Tenant are
publicly accessible and available on a public website audited and otherwise in
compliance with the requirements of the Securities and Exchange Commission.

36. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon Tenant
paying the rent required under this Lease and paying all other charges and
performing all of the covenants and provisions on Tenant’s part to be observed
and performed under this Lease, Tenant may peaceably and quietly have, hold and
enjoy the Premises in accordance with this Lease without hindrance or
molestation by Landlord or its agents.

37. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any public auction upon the Premises without first
having obtained Landlord’s prior written consent.

38. MISCELLANEOUS.

(a) Access. Subject to Legal Requirements and Section 32 hereof, Tenant and its
employees shall have access to the Premises seven (7) days per week,
twenty-four (24) hours a day, three hundred sixty five (365) days a year.

(b) Conflict of Laws. This Lease shall be governed by and construed solely
pursuant to the laws of the State of California, without giving effect to choice
of law principles thereunder.

(c) Successors and Assigns. Except as otherwise provided in this Lease, all of
the covenants, conditions and provisions of this Lease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns.

(d) Professional Fees and Costs. If either Landlord or Tenant should bring suit
against the other with respect to this Lease, then all costs and expenses,
including without limitation, actual professional fees and costs such as
appraisers’, accountants’ and attorneys’ fees and costs, incurred by the party
which prevails in such action, whether by final judgment or out of court
settlement, shall be paid by the other party, which obligation on the part of
the other party shall be deemed to have accrued on the date of the commencement
of such action and shall be enforceable whether or not the action is prosecuted
to judgment. As used herein, attorneys’ fees and costs shall include, without
limitation, attorneys’ fees, costs and expenses incurred in connection with any
(i) postjudgment motions; (ii) contempt proceedings; (iii) garnishment, levy,
and debtor and third party examination; (iv) discovery; and (v) bankruptcy
litigation.

(e) Terms and Headings. The words “Landlord” and “Tenant” as used herein shall
include the plural as well as the singular. Words used in any gender include
other genders. The paragraph headings of this Lease are not a part of this Lease
and shall have no effect upon the construction or interpretation of any part
hereof.

(f) Time. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.

(g) Prior Agreement; Amendments. This Lease with its incorporated Exhibits,
Addenda and attachments constitutes and is intended by the parties to be a
final, complete and exclusive statement of their entire agreement with respect
to the subject matter of this Lease. This Lease supersedes any and all prior and
contemporaneous agreements and understandings of any kind relating to the
subject matter of this Lease. There are no other agreements, understandings,
representations, warranties, or statements, either oral or in written form,
concerning the subject

 

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matter of this Lease. No alteration, modification, amendment or interpretation
of this Lease shall be binding on the parties unless contained in a writing
which is signed by both parties.

(h) Separability. The provisions of this Lease shall be considered separable
such that if any provision or part of this Lease is ever held to be invalid,
void or illegal under any law or ruling, all remaining provisions of this Lease
shall remain in full force and effect to the maximum extent permitted by law.

(i) Recording. Neither Landlord nor Tenant shall record this Lease nor a short
form memorandum thereof without the consent of the other.

(j) Counterparts; Electronic Delivery. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement. The parties may exchange counterpart signatures
by facsimile or electronic transmission and the same shall constitute delivery
of this Lease with respect to the delivering party. If a variation or
discrepancy among counterparts occurs, the copy of this Lease in Landlord’s
possession shall control.

(k) Nondisclosure of Lease Terms. Tenant acknowledges and agrees that the terms
of this Lease are confidential and constitute proprietary information of
Landlord. Disclosure of the terms could adversely affect the ability of Landlord
to negotiate other leases and impair Landlord’s relationship with other tenants.
Accordingly, Tenant agrees that it, and its partners, officers, directors,
employees, agents and attorneys, shall not intentionally and voluntarily
disclose the terms and conditions of this Lease to any newspaper or other
publication or any other tenant or apparent prospective tenant of the Building
or other portion of the Premises, or real estate agent, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease.

39. EXECUTION OF LEASE.

(a) Joint and Several Obligations. If more than one (1) person executes this
Lease as Tenant, their execution of this Lease will constitute their covenant
and agreement that (i) each of them is jointly and severally liable for the
keeping, observing and performing of all of the terms, covenants, conditions,
provisions and agreements of this Lease to be kept, observed and performed by
Tenant, and (ii) the term “Tenant” as used in this Lease means and includes each
of them jointly and severally. 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, will be binding upon each and all of
the persons 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.

(b) Tenant as Corporation or Partnership. If Tenant executes this Lease as a
corporation or partnership, then Tenant and the persons executing this Lease on
behalf of Tenant represent and warrant that such entity is duly qualified and in
good standing to do business in the State in which the Premises is located, and
that the individuals executing this Lease on Tenant’s behalf are duly authorized
to execute and deliver this Lease on its behalf, and in the case of a
corporation, in accordance with a duly adopted resolution of the board of
directors of Tenant, a copy of which is to be delivered to Landlord on execution
hereof, if requested by Landlord, and in accordance with the by-laws of Tenant,
and, in the case of a partnership, in accordance with the partnership agreement
and the most current amendments thereto, if any, copies of which are to be
delivered to Landlord on execution hereof, if requested by Landlord, and that
this Lease is binding upon Tenant in accordance with its terms.

(c) Examination of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or an option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant, and Landlord’s lender holding a lien with respect to
the Building has approved this Lease and the terms and conditions hereof.

 

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IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed by
their duly authorized representatives as of the date first above written.

 

LANDLORD: 3111-3141 CORONADO DRIVE ASSOCIATES, LLC,

a Delaware limited liability company

By:  

BLC CORONADO DRIVE, LLC,

a California limited liability company its Managing Member

  By:  

BIXBY LAND COMPANY,

a California corporation its Manager

    By:  

/s/ Aaron D. Hill

      Print Name:  

Aaron D. Hill

      Title:  

Vice President

    By:  

/s/ Martin T. O’Hea

      Print Name:  

Martin T. O’Hea

      Title:  

Chief Financial Officer

TENANT: INFOBLOX INC.,

a Delaware corporation

By:  

/s/ Robert Thomas

  Print Name:  

Robert Thomas

  Title:  

CEO

By:  

/s/ Remo Canessa

  Print Name:  

Remo Canessa

  Title:  

CFO

20-0062867 Tenant’s Tax ID Number (SSN or FEIN)

 

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EXHIBIT A

SITE PLAN SHOWING PREMISES

 

 

[GRAPHICAL DEPICTION OF FLOOR PLAN]

 

 

 

 

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EXHIBIT A

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EXHIBIT B

WORK LETTER

This Work Letter (“Work Letter”) shall set forth the terms and conditions
relating to the construction of the Premises. All references in this Work Letter
to the “Lease” shall mean the relevant portions of the Lease to which this Work
Letter is attached as Exhibit B.

SECTION 1

AS-IS CONDITION

Tenant hereby accepts the base, shell and core of the Premises (the “Base, Shell
and Core”), in its current “AS-IS” condition existing as of the date of the
Lease and the Commencement Date, subject to Section 3(b) of the Lease. Except
for the Tenant Improvement Allowance set forth below, Landlord shall not be
obligated to make or pay for any alterations or improvements to the Premises or
the Building.

SECTION 2

TENANT IMPROVEMENTS

2.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time tenant
improvement allowance (the “Tenant Improvement Allowance”) in the amount of up
to, but not exceeding $47.50 per rentable square foot of the Premises (i.e., up
to $6,013,215.00 based on 126,594 rentable square feet of 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”);
provided, however, that Landlord shall have no obligation to disburse all or any
portion of the Tenant Improvement Allowance to Tenant unless Tenant makes a
request for disbursement pursuant to the terms and conditions of Section 2.2
below prior to that date which is two hundred seventy (270) days after the
Commencement Date. In no event shall Landlord be obligated to make disbursements
pursuant to this Work Letter in a total amount which exceeds the Tenant
Improvement Allowance. Tenant shall not be entitled to receive any cash payment
or credit against rent or otherwise for any unused portion of the Tenant
Improvement Allowance which is not used to pay for the Tenant Improvement
Allowance Items (as such term is defined below).

2.2 Disbursement of the Tenant Improvement Allowance.

2.2.1 Tenant Improvement Allowance Items. Except as otherwise set forth in this
Work Letter, the Tenant Improvement Allowance shall be disbursed by Landlord
only for the following items and costs (collectively, the “Tenant Improvement
Allowance Items”):

2.2.1.1 payment of the fees of the “Architect” and the “Engineers”, as those
terms are defined in Section 3.1 of this 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 Work
Letter;

2.2.1.2 the payment of plan check, permit and license fees relating to
construction of the Tenant Improvements;

2.2.1.3 the cost of construction of the Tenant Improvements, including, without
limitation, contractors’ fees and general conditions, testing and inspection
costs, costs of utilities, trash removal, parking and hoists, and the costs of
after-hours freight elevator usage.

2.2.1.4 the cost of any changes in the Base, Shell and Core work when such
changes are required by the Construction Drawings (including if such changes are
due to the fact that such work is prepared on an unoccupied basis), such cost to
include all direct architectural and/or engineering fees and expenses incurred
in connection therewith;

2.2.1.5 the cost of any changes to the Construction Drawings or Tenant
Improvements required by applicable laws;

2.2.1.6 sales and use taxes and Title 24 fees;

2.2.1.7 the “Coordination Fee”, as that term is defined in Section 4.2.2.2 of
this Work Letter; and

 

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2.2.2 Disbursement of Tenant Improvement Allowance. Subject to Section 2.1
above, during the construction of the Tenant Improvements, Landlord or
Landlord’s Lender shall make disbursements of the Tenant Improvement Allowance
for Tenant Improvement Allowance Items for the benefit of Tenant and shall
authorize the release of monies for the benefit of Tenant as follows:

2.2.2.1 Disbursements. From time to time during the construction of the Tenant
Improvements (but no more frequently than monthly), Tenant shall deliver to
Landlord and, if requested, to Landlord’s Lender: (i) a request for payment of
the “Contractor”, as that term is defined in Section 4.1 below, approved by
Tenant, in a form to be provided by Landlord, showing the schedule, by trade, of
percentage of completion of the Tenant Improvements in the Premises, detailing
the portion of the work completed and the portion not completed, and
demonstrating that the relationship between the cost of the work completed and
the cost of the work to be completed complies with the terms of the
“Construction Budget”, as that term is defined in Section 4.2.1 below;
(ii) invoices from all of “Tenant’s Agents”, as that term is defined in
Section 4.1.2 below, for labor rendered and materials delivered to the Premises;
(iii) certification and proof of payment by Tenant that all sums then due and
owing with respect to the Tenant Improvements have been paid in full or will be
paid upon the disbursement that is the subject of the current disbursement
request (including all amounts to be paid directly by Tenant); (iv) executed
mechanic’s lien releases from all of Tenant’s Agents which shall comply with the
appropriate provisions, as reasonably determined by Landlord, of California
Civil Code Section 3262(d); (v) a certification by Tenant’s Architect and
Contractor confirming that all Tenant Improvements completed to date have been
completed in compliance with all applicable laws, rules, regulations and in
accordance with the Approved Working Drawings, including any applicable approved
change orders; and (vi) each of the general disbursement items referenced in
Section 2.2.2.3 below, and all other information and submissions reasonably
requested or required by Landlord or Landlord’s Lender. Tenant’s request for
payment shall be deemed Tenant’s acceptance and approval of the work furnished
and/or the materials supplied as set forth in Tenant’s payment request.
Following Tenant’s delivery of a completed disbursement request submission as
required hereunder, Landlord or Landlord’s Lender shall disburse the portion of
the Tenant Improvement Allowance to which Tenant is entitled hereunder, in
accordance with the requirements and policies of Landlord’s Lender, less a
retention as required under the terms of the Contract (or, if applicable, as
required by Landlord’s Lender) in the amount of ten percent (10%) of the amounts
payable under the Contract (the aggregate amount of such retentions to be known
as the “Final Retention”). In no event shall Tenant be entitled to any amounts
in excess of the balance of any remaining available portion of the Tenant
Improvement Allowance (not including the Final Retention). Disbursement of the
Tenant Improvement Allowance shall not be deemed Landlord’s approval or
acceptance of the work furnished or materials supplied as set forth in Tenant’s
payment request.

2.2.2.2 Final Retention. Subject to the provisions of this Work Letter, a check
for the Final Retention payable jointly to Tenant and Contractor shall be
delivered by Landlord to Tenant following the completion of construction of the
Premises, provided that (i) Tenant delivers to Landlord properly executed
mechanics lien releases in compliance with both California Civil Code
Section 3262(d)(2) and either Section 3262(d)(3) or Section 3262(d)(4), and
(ii) Landlord has determined that no substandard work exists which adversely
affects the mechanical, electrical, plumbing, heating, ventilating and air
conditioning, life-safety or other systems of the Building, the curtain wall of
the Building, the structure or exterior appearance of the Building, or any other
tenant’s use of such other tenant’s leased premises in the Building,
(iii) Tenant has delivered to Landlord a certificate of occupancy or permit
cards signed off by the City with respect to the Premises; (iv) Tenant has
delivered to the Office of the Building as-built plans and City-permitted plans
for the Tenant Improvements; (v) Tenant has delivered to the Office of the
Building operation manuals and warranties for equipment included within the
Tenant Improvements, if applicable, and (vi) Tenant has delivered to Landlord
each of the general disbursement items referenced in Section 2.2.2.3 below.

2.2.2.3 General Disbursement Requirements. In addition to the disbursement
requirements referenced above, Tenant acknowledges and agrees that the following
items are required as a condition to any disbursement of the Tenant Improvement
Allowance:

 

  •  

Copy of the Contract (as defined below) with the Contractor.

 

  •  

Copy of the Contractor’s certificate of insurance, including Additional Insured
endorsement naming Landlord as an additional insured.

 

  •  

Contractor’s Schedule of Values, showing total contract value.

 

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  •  

Such other items as may be reasonably required by Landlord’s Lender as a
condition to disbursement of the Tenant Improvement Allowance.

2.2.2.4 Other Terms. Landlord shall only be obligated to make disbursements from
the Tenant Improvement Allowance to the extent costs are incurred by Tenant for
Tenant Improvement Allowance Items.

SECTION 3

CONSTRUCTION DRAWINGS

3.1 Selection of Architect/Construction Drawings. Tenant shall retain the
architect/space planner (the “Architect”) approved by Landlord, which approval
shall not be unreasonably withheld, to prepare the Construction Drawings. Tenant
shall retain the engineering consultants approved by Landlord, which approval
shall not be unreasonably withheld (the “Engineers”) to prepare all plans and
engineering working drawings relating to the structural, mechanical, electrical,
plumbing, HVAC, life safety, and sprinkler work in the Premises. 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
comply with the drawing format and specifications reasonably determined by
Landlord, and shall be subject to Landlord’s 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. Tenant shall supply Landlord with four (4) copies signed
by Tenant of its final space plan for the Premises before any architectural
working drawings or engineering drawings have been commenced. The final space
plan (the “Final Space Plan”) shall include a layout and designation of all
offices, rooms and other partitioning, their intended use, and equipment to be
contained therein. Landlord may request clarification or more specific drawings
for special use items not included in the Final Space Plan. Landlord shall
advise Tenant within five (5) business days after Landlord’s receipt of the
Final Space Plan for the Premises if the same is unsatisfactory or incomplete in
any respect. If Tenant is so advised, Tenant shall promptly (i) cause the Final
Space Plan to be revised to correct any deficiencies or other matters Landlord
may reasonably require, and (ii) deliver such revised Final Space Plan to
Landlord.

3.3 Final Working Drawings. After the Final Space Plan has been approved by
Landlord and Tenant, Tenant shall promptly cause the Architect and the Engineers
to complete the architectural and engineering drawings for the Premises, and
cause the Architect to compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits for the Tenant Improvements (collectively, the “Final Working
Drawings”), and shall submit the same to Landlord for Landlord’s approval.
Tenant shall supply Landlord with four (4) copies signed by Tenant of such Final
Working Drawings. Landlord shall advise Tenant within five (5) business days
after Landlord’s receipt of the Final Working Drawings for the Premises if the
same is unsatisfactory or incomplete in any respect. If Tenant is so advised,
Tenant shall promptly (i) revise the Final Working Drawings in accordance with
such review and any disapproval of Landlord in connection therewith, and
(ii) deliver such revised Final Working Drawings to Landlord.

3.4 Approved Working Drawings. The Final Working Drawings shall be approved by
Landlord (the “Approved Working Drawings”) prior to the commencement of
construction of the Premises by Tenant. After approval by Landlord of the Final
Working Drawings, Tenant shall promptly submit the same to the appropriate
governmental authorities for all applicable building permits. Tenant hereby
agrees that neither Landlord nor Landlord’s consultants shall be responsible for
obtaining any building permit or certificate of occupancy for the Premises and
that obtaining the same shall be Tenant’s responsibility; provided, however,
that Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy.

 

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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 (provided that revisions to purely cosmetic finish items
shall not require Landlord’s consent).

SECTION 4

CONSTRUCTION OF THE TENANT IMPROVEMENTS

4.1 Tenant’s Selection of Contractor and Tenant’s Agents.

4.1.1 The Contractor. Tenant shall select and retain a general contractor to
construct the Tenant Improvements through a competitive bidding process which
shall include contractors reasonably approved by Landlord (and at least one of
which may be designated by Landlord). The list of architects and contractors on
Exhibit B-1 attached hereto are deemed approved by Landlord, and any other
architects or contractors presented for approval shall not be unreasonably
withheld. The contractor chosen by Tenant from the approved list of bidders
shall be the contractor submitting the bid acceptable to Tenant. Following such
bidding process and Tenant’s selection of a general contractor in accordance
with the terms hereof, Tenant shall deliver to Landlord notice of its selection
of the contractor upon such selection, which contractor shall thereafter be the
“Contractor” hereunder.

4.1.2 Tenant’s Agents. Tenant may develop its construction contracts as
design/build contracts. All subcontractors, laborers, materialmen, and suppliers
used by Tenant (such subcontractors, laborers, materialmen, and suppliers, and
the Contractor to be known collectively as “Tenant’s Agents”) may likewise all
be under design/build contracts, provided, however, any of Tenant’s Agents
working on essential building systems or any portions of the Building which are
covered by a warranty shall be subject to Landlord’s prior reasonable approval.

4.2 Construction of Tenant Improvements by Tenant’s Agents.

4.2.1 Construction Contract; Cost Budget. Prior to Tenant’s execution of the
construction contract and general conditions with Contractor (the “Contract”),
Tenant shall submit the Contract to Landlord for its approval, which approval
shall not be unreasonably withheld or delayed. Prior to the commencement of the
construction of the Tenant Improvements, and after Tenant has accepted all bids
for the Tenant Improvements, Tenant shall provide Landlord with a written
detailed cost breakdown (the “Final Costs Statement”), by trade, of the final
costs to be incurred, or which have been incurred, as set forth more
particularly in Section 2.2.1.1 through 2.2.1.8 above, in connection with the
design and construction of the Tenant Improvements to be performed by or at the
direction of Tenant or the Contractor (which costs form a basis for the amount
of the Contract, if any (the “Final Costs”). It is expressly understood and
agreed that Tenant shall be solely responsible for and shall pay directly when
due all Final Costs, subject to disbursement and application of the Tenant
Improvement Allowance as referenced herein.

4.2.2 Tenant’s Agents.

4.2.2.1 Landlord’s General Conditions for Tenant’s Agents and Tenant Improvement
Work. Tenant’s and Tenant’s Agents’ construction of the Tenant Improvements
shall comply with the following: (i) the Tenant Improvements shall be
constructed in strict accordance with the Approved Working Drawings; (ii) Tenant
and Tenant’s Agents shall not, in any way, interfere with, obstruct, or delay,
the work of Landlord’s base building contractor and subcontractors with respect
to the Base, Shell and Core or any other work in the Building; (iii) Tenant’s
Agents shall submit schedules of all work relating to the Tenant Improvements to
Contractor and Contractor shall, within five (5) business days of receipt
thereof, inform Tenant’s Agents of any changes which are necessary thereto, and
Tenant’s Agents shall adhere to such corrected schedule; and (iv) Tenant and its
contractors shall abide by any reasonable and customary construction rules,
regulations and practices standard in the industry, taking into account Tenant’s
status as the sole tenant and occupant of the Building, as applicable.

4.2.2.2 Coordination Fee. Tenant shall pay to Landlord the sum of $75,000.00 as
a logistical coordination fee (the “Coordination Fee”) relating to the review
and completion of the Tenant Improvements.

4.2.2.3 Indemnity. Tenant’s indemnity of Landlord as set forth in the Lease
shall also apply with respect to any and all costs, losses, damages, injuries
and liabilities

 

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related in any way to any act or omission of Tenant or Tenant’s Agents, or
anyone directly or indirectly employed by any of them, or in connection with
Tenant’s non-payment of any amount arising out of the Tenant Improvements and/or
Tenant’s disapproval of all or any portion of any request for payment. Such
indemnity by Tenant, as set forth in the Lease, shall also apply with respect to
any and all costs, losses, damages, injuries and liabilities related in any way
to Landlord’s performance of any ministerial acts reasonably necessary (i) to
permit Tenant to complete the Tenant Improvements, and (ii) to enable Tenant to
obtain any building permit or certificate of occupancy for the Premises.

4.2.2.4 Insurance Requirements.

4.2.2.4.1 General Coverages. All of Tenant’s Agents shall carry worker’s
compensation insurance covering all of their respective employees in at least
the statutory minimum amount, and shall also carry public liability insurance,
including property damage, with policy limits, in a form and with companies
reasonably satisfactory with Tenant and Landlord and which policies have
Landlord and Tenant as additional insureds, consistent with the following
coverage limits: General Contractors shall maintain policy limits of no less
than $5,000,000 per occurrence; contractors performing major trades shall
maintain policy limits of no less than $3,000,000 per occurrence; and
contractors (other than major trades) shall maintain policy limits of no less
than $1,000,000 per occurrence.

4.2.2.4.2 Special Coverages. Tenant shall carry “Builder’s All Risk” insurance
in an amount equal to the full replacement cost of the improvements being
constructed by Tenant and such other insurance as Landlord may require, it being
understood and agreed that the Tenant Improvements shall be insured by Tenant
pursuant to the Lease immediately upon completion thereof. Such insurance shall
be in amounts and shall include such extended coverage endorsements as may be
reasonably required by Landlord, and in form and with companies as are required
to be carried by Tenant as set forth in the Lease.

4.2.2.4.3 General Terms. Certificates for all insurance carried pursuant to this
Section 4.2.2.4 shall be delivered to Landlord before the commencement of
construction of the Tenant Improvements and before the Contractor’s equipment is
moved onto the site. All such policies of insurance must contain a provision
that the company writing said policy will give Landlord thirty (30) days prior
written notice of any cancellation or lapse of the effective date or any
reduction in the amounts of such insurance. In the event that the Tenant
Improvements are damaged by any cause during the course of the construction
thereof, Tenant shall immediately repair the same at Tenant’s sole cost and
expense. All policies carried under this Section 4.2.2.4 shall insure Landlord
and Tenant, as their interests may appear, as well as Contractor and Tenant’s
Agents, and shall name as additional insureds Landlord’s Property Manager,
Landlord’s Asset Manager, and all mortgagees and ground lessors of the Building.
All insurance, except Workers’ Compensation, maintained by Tenant’s Agents shall
preclude subrogation claims by the insurer against anyone insured thereunder.
Such insurance shall provide that it is primary insurance as respects the owner
and that any other insurance maintained by owner is excess and noncontributing
with the insurance required hereunder. The requirements for the foregoing
insurance shall not derogate from the provisions for indemnification of Landlord
by Tenant under Section 4.2.2.3 of this Work Letter.

4.2.3 Governmental Compliance. The Tenant Improvements shall comply in all
respects with the following: (i) the Code and other state, federal, city or
quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer’s specifications.

4.2.4 Inspection by Landlord. Landlord shall have the right to inspect the
Tenant Improvements at all times, provided however, that Landlord’s failure to
inspect the Tenant Improvements shall in no event constitute a waiver of any of
Landlord’s rights hereunder nor shall Landlord’s inspection of the Tenant
Improvements constitute Landlord’s approval of the same. Should Landlord
reasonably disapprove any portion of the Tenant Improvements that is not in
conformance with the Construction Documents, Landlord shall notify Tenant in
writing of such disapproval and shall specify the items disapproved. Any defects
or deviations in, and/or disapproval by Landlord of, the Tenant Improvements
shall be rectified by Tenant at no expense to Landlord, provided however, that
in the event Landlord determines that a defect or deviation exists or
disapproves of any matter in connection with any portion of the Tenant
Improvements and such defect, deviation or matter might adversely affect the
mechanical, electrical, plumbing, heating, ventilating and air conditioning or
life-safety systems of the Building, the structure or exterior appearance of the
Building or any other tenant’s use of such other tenant’s leased premises,
Landlord may, take such action as Landlord deems necessary, at Tenant’s expense

 

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and without incurring any liability on Landlord’s part, to correct any such
defect, deviation and/or matter, including, without limitation, causing the
cessation of performance of the construction of the Tenant Improvements until
such time as the defect, deviation and/or matter is corrected to Landlord’s
satisfaction.

4.2.5 Meetings. Commencing upon the execution of the Lease, Tenant shall hold
weekly meetings at a reasonable time, with the Architect and the Contractor
regarding the progress of the preparation of Construction Drawings and the
construction of the Tenant Improvements, which meetings shall be held at a
location designated by Landlord, and Landlord and/or its agents shall receive
prior notice of, and shall have the right to attend, all such meetings, and,
upon Landlord’s request, certain of Tenant’s Agents shall attend such meetings.
In addition, minutes shall be taken at all such meetings, a copy of which
minutes shall be promptly delivered to Landlord. One such meeting each month
shall include the review of Contractor’s current request for payment.

4.3 Notice of Completion; Copy of “As Built” Plans. Within ten (10) days after
completion of construction of the Tenant Improvements, Tenant shall cause a
Notice of Completion to be recorded in the office of the Recorder of the County
in which the Building is located in accordance with Section 3093 of the Civil
Code of the State of California or any successor statute, and shall furnish a
copy thereof to Landlord upon such recordation. If Tenant fails to do so,
Landlord may execute and file the same on behalf of Tenant as Tenant’s agent for
such purpose, at Tenant’s sole cost and expense. At the conclusion of
construction, (i) Tenant shall cause the Architect and Contractor (A) to update
the Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings during the course of construction, (B) to certify to
the best of their knowledge that the “record-set” of as-built drawings are true
and correct, which certification shall survive the expiration or termination of
the Lease, (C) to deliver to Landlord two (2) sets of sepias of such as-built
drawings within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (D) to deliver to Landlord a computer disk
containing the Approved Working Drawings in AutoCAD format, and (ii) Tenant
shall deliver to Landlord a copy of all warranties, guaranties, and operating
manuals and information relating to the improvements, equipment, and systems in
the Premises.

4.4 Coordination by Tenant’s Agents with Landlord. Upon Tenant’s delivery of the
Contract to Landlord under Section 4.2.1 of this Work Letter, Tenant shall
furnish Landlord with a schedule setting forth the projected date of the
completion of the Tenant Improvements and showing the critical time deadlines
for each phase, item or trade relating to the construction of the Tenant
Improvements.

SECTION 5

MISCELLANEOUS

5.1 Tenant’s Representative. Tenant has designated Shawna Belardi as its sole
representative with respect to the matters set forth in this Work Letter, who
shall have full authority and responsibility to act on behalf of the Tenant as
required in this Work Letter.

5.2 Landlord’s Representative. Landlord has designated Mike Hodges as its sole
representative with respect to the matters set forth in this 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 Work Letter.

5.3 Time of the Essence in This Work Letter. Unless otherwise indicated, all
references herein to a “number of days” shall mean and refer to calendar days.
If any item requiring approval is timely disapproved by Landlord, the procedure
for preparation of the document and approval thereof shall be repeated until the
document is approved by Landlord.

5.4 Tenant’s Lease Default. Notwithstanding any provision to the contrary
contained in the Lease, if an event of default by Tenant of this Work Letter
(which, for purposes hereof, shall include, without limitation, the delivery by
Tenant to Landlord of any oral or written notice that Tenant does not intend to
occupy the Premises, and/or any other anticipatory breach of the Lease) or the
Lease has occurred at any time on or before the substantial completion of the
Premises, then (i) in addition to all other rights and remedies granted to
Landlord pursuant to the Lease, at law and/or in equity, Landlord shall have the
right to withhold payment of all or any portion of the Tenant Improvement
Allowance and/or Landlord may cause Contractor to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such work stoppage), and
(ii) all other obligations of Landlord under the terms of this Work Letter shall
be forgiven until such time as

 

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such default is cured pursuant to the terms of the Lease (in which case, Tenant
shall be responsible for any delay in the substantial completion of the Premises
caused by such inaction by Landlord). In addition, if the Lease is terminated
prior to the Commencement Date, for any reason due to a default by Tenant as
described in Section 21 of the Lease or under this Work Letter (including,
without limitation, any anticipatory breach described above in this
Section 5.4), Tenant shall be liable to Landlord for all damages available to
Landlord pursuant to the Lease and otherwise available to Landlord at law and/or
in equity by reason of a default by Tenant under the Lease or this Work Letter
(including, without limitation, the remedies available to Landlord pursuant to
California Civil Code Section 1951.2) and unless and to the extent Tenant shall
have agreed to pay the full amount of leasehold damages available to Landlord
under the terms of California Civil Code Section 1951.2, Tenant shall also pay
to Landlord, as additional rent under the Lease, within five (5) days of receipt
of a statement therefor, any and all costs (if any) incurred by Landlord
(including any portion of the Tenant Improvement Allowance disbursed by
Landlord) and not reimbursed or otherwise paid by Tenant through the date of
such termination in connection with the Tenant Improvements to the extent
planned, installed and/or constructed as of such date of termination, including,
but not limited to, any costs related to the removal of all or any portion of
the Tenant Improvements and restoration costs related thereto. For purposes of
calculating the damages available to Landlord under California Civil Code
1951.2, the Commencement Date shall be deemed to be the date which the
Commencement Date would have otherwise occurred but for such default by Tenant.

 

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EXHIBIT B-1

ARCHITECTS AND CONTRACTORS

 

ARCHITECTS

 

CONTRACTORS

Reel Grobman

95 N. Second Street

San Jose, CA 95113

(408) 288-7833 Tel

(408) 286-0851 Fax

 

South Bay Construction, Inc.

1711 Dell Avenue

Campbell, CA 95008

(408) 379-5500 Tel

(408) 379-3256 Fax

RMW

40 South Market Street, 4th Floor

San Jose, CA 95113

(408) 294-8000 Tel

(408) 294-1747 Fax

 

BCCI Builders

2445 Faber Place, Suite 200

Palo Alto, CA 94303

(650) 543- 8900 Tel

(650) 543-8939 Fax

IA Interior Architects

559 Clyde Avenue, Suite 200

Mountain View, CA 94043

(650) 625-4180 Tel

(650) 625-4181 Fax

 

Dome Construction Corporation

560 S. Winchester Blvd., 500

San Jose, CA 95128

(408) 938-5770 Tel

(408) 398-5734 Fax

Studio G Architects

1427Cherry Valley Drive

San Jose, CA 95125-4428

(408) 283-0100 Tel

 

XL Construction

851 Buckeye Court

Milpitas, CA 95035

(408) 240-6000 Tel

(408) 240-6001 Fax

 

Devcon Construction

690 Gibralter Drive

Milpitas, CA 95035

(408) 942-8200 Tel

(408) 262-2342 Fax

 

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EXHIBIT C

ESTOPPEL CERTIFICATE

 

Wells Fargo Bank, National Association (“Lender”)

{OFFICE STREET ADDRESS}

{CITY, STATE ZIP}

   Date: {DATE OF DOCUMENTS}

 

Attn:    {LOAN ADMINISTRATOR} RE:    Lease dated {DATE OF LEASE}, and amended on
{LEASE AMENDMENT DATES}, (“Lease”) by and between {BORROWER NAME, a general
partnership}, as lessor (“Lessor”) and {LESSEE’S NAME}, as lessee (“Lessee”)
with respect to certain premises (“Leased Premises”) located at {LEASED PREMISES
LOCATION} (“Property”). The Leased Premises are comprised of {SQUARE FOOTAGE
LEASED} square feet.

Gentlemen:

The undersigned hereby acknowledges that Lessor may encumber the Property with a
deed of trust in favor of Lender. The undersigned further acknowledges the right
of Lessor, Lender and any and all of Lessor’s present and future lenders to rely
upon the statements and representations of the undersigned contained in this
Certificate and further acknowledges that any loan secured by any such deed of
trust or further deeds of trust will be made and entered into in material
reliance on this Certificate.

Given the foregoing, the undersigned Lessee hereby certifies and represents unto
Lender, its successors and assigns, with respect to the above described Lease as
follows:

 

1. LEASE EFFECTIVE. The Lease has been duly executed and delivered by Lessee
and, subject to the terms and conditions thereof, the Lease is in full force and
effect, the obligations of Lessee thereunder are valid and binding and there
have been no further amendments, modifications or additions to the Lease,
written or oral;

 

2. NO DEFAULT. To the best of Lessee’s knowledge, as of the date hereof:
(i) there exists no breach, default, or event or condition which, with the
giving of notice or the passage of time or both, would constitute a breach or
default under the Lease; and (ii) there are no existing claims, defenses or
offsets against rental due or to become due under the Lease;

 

3. ENTIRE AGREEMENT. The Lease constitutes the entire agreement between Lessor
and Lessee with respect to the Property and Lessee claims no rights with respect
to the Property other than as set forth in the Lease; and

 

4. NO PREPAID RENT. No deposits or prepayments of rent have been made in
connection with the Lease, except as follows: (if none, state “None”)
                    .

 

5. No Broker Liens. Neither Lessee nor Lessor has incurred any fee or commission
with any real estate broker which would give rise to any lien right under state
or local law, except as follows (if none, state “None”): LIST OF EXISTING CLAIMS
HERE

 

Dated: {DATE OF DOCUMENTS}   “LESSEE”   {LESSEE SIGNATURE BLOCK HERE}

 

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EXHIBIT D

FORM OF SNDA

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

WELLS FARGO BANK, NATIONAL

ASSOCIATION

GROUP NAME (AU #AU NO.)

OFFICE ADDRESS

Attn: LOAN ADMINISTRATOR’S NAME HERE

Loan No. LOAN NO.

SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT,

ESTOPPEL,

ATTORNMENT AND NON-DISTURBANCE AGREEMENT

(Lease To Deed of Trust)

 

NOTICE:    THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE
PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER
OR LATER SECURITY INSTRUMENT.

THIS SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT, ESTOPPEL,
ATTORNMENT AND NON-DISTURBANCE AGREEMENT (“Agreement”) is made DATE OF DOCUMENTS
by and between BORROWER NAME, a general partnership (“Owner”), NAME OF LESSEE
HERE (“Lessee”) and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Lender”).

R E C I T A L S

 

A. Pursuant to the terms and provisions of a lease dated DATE OF LEASE HERE
(“Lease”), Owner, as “Lessor”, granted to Lessee a leasehold estate in and to a
portion of the property described on Exhibit A attached hereto and incorporated
herein by this reference (which property, together with all improvements now or
hereafter located on the property, is defined as the “Property”).

 

B. Said Lease contains provisions and terms granting Lessee an option to
purchase the Property (the “Option To Purchase”).

 

C. Owner has executed, or proposes to execute, a deed of trust with absolute
assignment of leases and rents, security agreement and fixture filing (“Deed of
Trust”) securing, among other things, a promissory note (“Note”) in the
principal sum of LOAN AMOUNT AND NO/100THS DOLLARS ($LOAN AMOUNT NOS.), dated
DATE OF DOCUMENTS, in favor of Lender, which Note is payable with interest and
upon the terms and conditions described therein (“Loan”). The Deed of Trust is
to be recorded concurrently herewith.

 

D. As a condition to making the Loan secured by the Deed of Trust, Lender
requires that the Deed of Trust be unconditionally and at all times remain a
lien on the Property, prior and superior to all the rights of Lessee under the
Lease and the Option To Purchase and that the Lessee specifically and
unconditionally subordinate the Lease and the Option To Purchase to the lien of
the Deed of Trust.

 

E. Owner and Lessee have agreed to the subordination, attornment and other
agreements herein in favor of Lender.

 

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NOW THEREFORE, for valuable consideration and to induce Lender to make the Loan,
Owner and Lessee hereby agree for the benefit of Lender as follows:

 

1. SUBORDINATION. Owner and Lessee hereby agree that:

 

  (a) Prior Lien. The Deed of Trust securing the Note in favor of Lender, and
any modifications, renewals or extensions thereof (including, without
limitation, any modifications, renewals or extensions with respect to any
additional advances made subject to the Deed of Trust), shall unconditionally be
and at all times remain a lien on the Property prior and superior to the Lease
and the Option To Purchase;

 

  (b) Subordination. Lender would not make the Loan without this agreement to
subordinate; and

 

  (c) Whole Agreement. This Agreement shall be the whole agreement and only
agreement with regard to the subordination of the Lease and the Option To
Purchase to the lien of the Deed of Trust and shall supersede and cancel, but
only insofar as would affect the priority between the Deed of Trust and the
Lease and the Option To Purchase, any prior agreements as to such subordination,
including, without limitation, those provisions, if any, contained in the Lease
which provide for the subordination of the Lease and the Option To Purchase to a
deed or deeds of trust or to a mortgage or mortgages.

AND FURTHER, Lessee individually declares, agrees and acknowledges for the
benefit of Lender, that:

 

  (d) Use of Proceeds. Lender, in making disbursements pursuant to the Note, the
Deed of Trust or any loan agreements with respect to the Property, is under no
obligation or duty to, nor has Lender represented that it will, see to the
application of such proceeds by the person or persons to whom Lender disburses
such proceeds, and any application or use of such proceeds for purposes other
than those provided for in such agreement or agreements shall not defeat this
agreement to subordinate in whole or in part;

 

  (e) Waiver, Relinquishment and Subordination. Lessee intentionally and
unconditionally waives, relinquishes and subordinates all of Lessee’s right,
title and interest in and to the Property to the lien of the Deed of Trust and
understands that in reliance upon, and in consideration of, this waiver,
relinquishment and subordination, specific loans and advances are being and will
be made by Lender and, as part and parcel thereof, specific monetary and other
obligations are being and will be entered into which would not be made or
entered into but for said reliance upon this waiver, relinquishment and
subordination.

 

2. ASSIGNMENT. Lessee acknowledges and consents to the assignment of the Lease
by Lessor in favor of Lender.

 

3. ESTOPPEL. Lessee acknowledges and represents that:

 

  (a) Lease Effective. The Lease has been duly executed and delivered by Lessee
and, subject to the terms and conditions thereof, the Lease is in full force and
effect, the obligations of Lessee thereunder are valid and binding and there
have been no modifications or additions to the Lease, written or oral;

 

  (b) No Default. To the best of Lessee’s knowledge, as of the date hereof:
(i) there exists no breach, default, or event or condition which, with the
giving of notice or the passage of time or both, would constitute a breach or
default under the Lease; and (ii) there are no existing claims, defenses or
offsets against rental due or to become due under the Lease;

 

  (c) Entire Agreement. The Lease constitutes the entire agreement between
Lessor and Lessee with respect to the Property and Lessee claims no rights with
respect to the Property other than as set forth in the Lease; and

 

  (d) No Prepaid Rent. No deposits or prepayments of rent have been made in
connection with the Lease, except as follows: (if none, state “None”)

 

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  (e) No Broker Liens. Neither Lessee nor Owner has incurred any fee or
commission with any real estate broker which would give rise to any lien right
under state or local law, except as follows (if none, state “None”): LIST OF
EXISTING CLAIMS HERE

 

4. ADDITIONAL AGREEMENTS. Lessee covenants and agrees that, during all such
times as Lender is the Beneficiary under the Deed of Trust:

 

  (a) Modification, Termination and Cancellation. Lessee will not consent to any
modification, amendment, termination or cancellation of the Lease (in whole or
in part) without Lender’s prior written consent and will not make any payment to
Lessor in consideration of any modification, termination or cancellation of the
Lease (in whole or in part) without Lender’s prior written consent;

 

  (b) Notice of Default. Lessee will notify Lender in writing concurrently with
any notice given to Lessor of any default by Lessor under the Lease, and Lessee
agrees that Lender has the right (but not the obligation) to cure any breach or
default specified in such notice within the time periods set forth below and
Lessee will not declare a default of the Lease, as to Lender, if Lender cures
such default within fifteen (15) days from and after the expiration of the time
period provided in the Lease for the cure thereof by Lessor; provided, however,
that if such default cannot with diligence be cured by Lender within such
fifteen (15) day period, the commencement of action by Lender within such
fifteen (15) day period to remedy the same shall be deemed sufficient so long as
Lender pursues such cure with diligence;

 

  (c) No Advance Rents. Lessee will make no payments or prepayments of rent more
than one (1) month in advance of the time when the same become due under the
Lease; and

 

  (d) Assignment of Rents. Upon receipt by Lessee of written notice from Lender
that Lender has elected to terminate the license granted to Lessor to collect
rents, as provided in the Deed of Trust, and directing the payment of rents by
Lessee to Lender, Lessee shall comply with such direction to pay and shall not
be required to determine whether Lessor is in default under the Loan and/or the
Deed of Trust.

 

5. ATTORNMENT. In the event of a foreclosure under the Deed of Trust, Lessee
agrees for the benefit of Lender (including for this purpose any transferee of
Lender or any transferee of Lessor’s title in and to the Property by Lender’s
exercise of the remedy of sale by foreclosure under the Deed of Trust) as
follows:

 

  (a) Payment of Rent. Lessee shall pay to Lender all rental payments required
to be made by Lessee pursuant to the terms of the Lease for the duration of the
term of the Lease;

 

  (b) Continuation of Performance. Lessee shall be bound to Lender in accordance
with all of the provisions of the Lease for the balance of the term thereof, and
Lessee hereby attorns to Lender as its landlord, such attornment to be effective
and self-operative without the execution of any further instrument immediately
upon Lender succeeding to Lessor’s interest in the Lease and giving written
notice thereof to Lessee;

 

  (c) No Offset. Lender shall not be liable for, nor subject to, any offsets or
defenses which Lessee may have by reason of any act or omission of Lessor under
the Lease, nor for the return of any sums which Lessee may have paid to Lessor
under the Lease as and for security deposits, advance rentals or otherwise,
except to the extent that such sums are actually delivered by Lessor to Lender;
and

 

  (d) Subsequent Transfer. If Lender, by succeeding to the interest of Lessor
under the Lease, should become obligated to perform the covenants of Lessor
thereunder, then, upon any further transfer of Lessor’s interest by Lender, all
of such obligations shall terminate as to Lender.

 

6.

NON-DISTURBANCE. In the event of a foreclosure under the Deed of Trust, so long
as there shall then exist no breach, default, or event of default on the part of
Lessee under the Lease, Lender agrees for itself and its successors and assigns
that the leasehold interest of Lessee under the Lease shall not be extinguished
or terminated by reason of such foreclosure, but rather the Lease shall continue
in full force and effect and Lender shall recognize and accept Lessee as tenant
under the Lease subject to the terms and provisions of the Lease except as
modified by this Agreement; provided, however, that

 

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EXHIBIT D

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  Lessee and Lender agree that the following provisions of the Lease (if any)
shall not be binding on Lender: any option to purchase with respect to the
Property; any right of first refusal with respect to the Property.

 

7. MISCELLANEOUS.

 

  (a) Heirs, Successors, Assigns and Transferees. The covenants herein shall be
binding upon, and inure to the benefit of, the heirs, successors and assigns of
the parties hereto; and

 

  (b) Notices. All notices or other communications required or permitted to be
given pursuant to the provisions hereof shall be deemed served upon delivery or,
if mailed, upon the first to occur of receipt or the expiration of three
(3) days after deposit in United States Postal Service, certified mail, postage
prepaid and addressed to the address of Lessee or Lender appearing below:

“OWNER”

BORROWER NAME

STREET ADDRESS

CITY, STATE ZIP

“LENDER”

WELLS FARGO BANK, NATIONAL ASSOCIATION

GROUP NAME (AU #AU NO.)

OFFICE ADDRESS

Attn: LOAN ADMINISTRATOR’S NAME HERE

Loan No. LOAN NO

“LESSEE”

NAME OF LESSEE HERE

LESSEE’S ADDRESS (STACKED) HERE

provided, however, any party shall have the right to change its address for
notice hereunder by the giving of written notice thereof to the other party in
the manner set forth in this Agreement; and

 

  (c) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute and be construed as one and the same instrument; and

 

  (d) Remedies Cumulative. All rights of Lender herein to collect rents on
behalf of Lessor under the Lease are cumulative and shall be in addition to any
and all other rights and remedies provided by law and by other agreements
between Lender and Lessor or others; and

 

  (e) Paragraph Headings. Paragraph headings in this Agreement are for
convenience only and are not to be construed as part of this Agreement or in any
way limiting or applying the provisions hereof.

 

8. INCORPORATION. Exhibit A is attached hereto and incorporated herein by this
reference.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

NOTICE:    THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE
PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OF
WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND.

IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS AGREEMENT, THE PARTIES
CONSULT WITH THEIR ATTORNEYS WITH RESPECT HERETO.

 

“OWNER” BORROWING ENTITY By:  

 

Its:  

 

“LENDER”

WELLS FARGO BANK,

NATIONAL ASSOCIATION

By:  

 

  Signee’s Name Its:   Signee’s Title “LESSEE” NAME OF LESSEE HERE LESSEE
SIGNATURE BLOCK HERE

(ALL SIGNATURES MUST BE ACKNOWLEDGED)

 

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EXHIBIT A

DESCRIPTION OF PROPERTY

EXHIBIT A to Subordination Agreement; Acknowledgment of Lease Assignment,
Estoppel, Attornment and Non-Disturbance Agreement dated as of DATE OF
DOCUMENTS, executed by BORROWER NAME, a general partnership as “Owner”, NAME OF
LESSEE HERE, as “Lessee”, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
“Lender”.

All that certain real property located in the County of Santa Clara, State of
California, described as follows:

APN#216-29-116

 

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STATE OF CALIFORNIA

COUNTY OF                     SS.

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

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

WITNESS my hand and official seal

Signature                                                                 
                           

My commission expires .                                         
                       

 

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EXHIBIT E

RULES AND REGULATIONS

The following rules and regulations govern the use of the Premises. Tenant will
be bound by such rules and regulations and agrees to cause Tenant’s authorized
users, its employees, subtenants, assignees, contractors, suppliers, customers
and invitees to observe the same.

1. Except as specifically provided in the Lease to which these Rules and
Regulations are attached, no sign, placard, picture, advertisement, name or
notice may be installed or displayed on any part of the outside of the Building
without the prior written consent of Landlord. Landlord will have the right to
remove, at Tenant’s expense and without notice, any sign installed or displayed
in violation of this rule. All approved signs or lettering on doors and walls
are to be printed, painted, affixed or inscribed at the expense of Tenant.

2. If Landlord reasonably objects in writing to any curtains, blinds, shades,
screens or hanging plants or other similar objects attached to or used in
connection with any window or door of the Premises, or placed on any windowsill,
which is visible from the exterior of the Building, Tenant will immediately
discontinue such use. Tenant agrees not to place anything against or near glass
partitions or doors or windows which may appear unsightly from outside the
Building.

3. Tenant will not obstruct any sidewalks, passages, exits or entrances of the
Premises. The sidewalks, passages, exits and entrances are not open to the
general public, but are open, subject to reasonable regulations, to Tenant’s
business invitees. Landlord will in all cases retain the right to control and
prevent access thereto of all persons whose presence in the reasonable judgment
of Landlord would be prejudicial to the safety, character, reputation and
interest of the Premises, provided that nothing herein contained will be
construed to prevent such access to persons with whom any tenant normally deals
in the ordinary course of its business, unless such persons are engaged in
illegal or unlawful activities.

4. Landlord expressly reserves the right to absolutely prohibit solicitation,
canvassing, sales and displays of products, goods and wares in all portions of
the Premises except for such activities as may be expressly requested by a
tenant and conducted solely within such requesting tenant’s premises.

5. Landlord reserves the right to prevent access to the Premises in case of
invasion, mob, riot, public excitement or other commotion by closing the doors
or by other appropriate action.

6. Tenant, upon the termination of its tenancy, will deliver to Landlord the
keys or keycards to all doors and at or prior to the Commencement Date provide a
copy of keys or keycards needed to access the Premises.

7. If Tenant requires telegraphic, telephonic, burglar alarm, satellite dishes,
antennae or similar services, it will advise Landlord.

8. No deliveries will be made which impede or interfere with the operation of
the Premises.

9. Tenant will not permit or allow the Premises to be occupied or used in a
manner offensive or objectionable to Landlord by reason of noise, odors or
vibrations, nor will Tenant bring into or keep in or about the Premises any
birds or animals.

10. The toilet rooms, toilets, urinals, wash bowls and other apparatus will not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind for which such items are not designed shall be
thrown therein. The expense of any breakage, stoppage or damage resulting from
any violation of this rule will be borne by the tenant who, or whose employees
or invitees, break this rule.

11. Tenant will not sell, or permit the sale at retail of newspapers, magazines,
periodicals, theater tickets or any other goods or merchandise to the general
public in or on the Premises. Tenant will not make any building-to-building
solicitation of business from other tenants in the Premises. Tenant will not use
the Premises for any business or activity other than that specifically provided
for in this Lease. Canvassing, soliciting and distribution of handbills or any
other written material, and peddling in the Premises are prohibited, and Tenant
will cooperate with Landlord to prevent such activities.

12. Tenant will not install any radio or television antenna, loudspeaker,
satellite dishes or other devices on the roof(s) or exterior walls of the
Building or the Premises without first

 

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obtaining Landlord’s prior written approval, which approval shall not be
unreasonably withheld, conditioned or delayed so long as the equipment Tenant
seeks to install will be used in connection with Tenant’s business operations at
the Premises.

13. Tenant will not affix any floor covering to the floor of the Premises in any
manner except as approved by Landlord. Tenant shall repair any damage resulting
from noncompliance with this rule.

14. Landlord reserves the right to exclude or expel from the Premises any person
who, in Landlord’s judgment, is in violation of any of the Rules and
Regulations.

15. Tenant will store all its trash and garbage within the Building or in other
facilities provided therefor. Tenant will not place in any trash box or
receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal. All garbage and refuse disposal
is to be made in accordance with directions issued from time to time by
Landlord.

16. The Premises will not be used for lodging nor shall the Premises be used for
any improper, immoral or objectionable purpose.

17. Tenant agrees to comply with all reasonable safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency.

18. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Building closed.

19. Tenant shall use at Tenant’s cost reasonably necessary pest extermination
and control contractor(s) at such intervals as Landlord may reasonably require.

20. Tenant shall not install, operate or maintain in the Premises or in any
other area of the Building, electrical equipment that would overload the
electrical system beyond its capacity for proper, efficient and safe operation
as determined solely by Landlord. Tenant shall not furnish cooling or heating to
the Premises beyond that provided by the base building systems, without first
obtaining Landlord’s prior written consent which consent shall not be
unreasonably withheld, conditioned or delayed so long as the system or equipment
proposed will not affect the proper functioning of building systems, result in a
violation of applicable laws, rules or regulations, or result in a breach of any
warranty issued with respect to the Building.

21. Tenant’s requirements will be attended to only upon appropriate application
to Landlord’s property management office for the Premises by an authorized
individual of Tenant. Employees of Landlord will not perform any work or do
anything outside of their regular duties unless under special instructions from
Landlord.

22. These Rules and Regulations are in addition to, and will not be construed to
in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of the Lease. Landlord may waive any one or more of
these Rules and Regulations for the benefit of Tenant, but no such waiver by
Landlord will be construed as a waiver of such Rules and Regulations in favor of
Tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against Tenant.

23. So long as the same do not materially interfere with the rights and benefits
afforded to Tenant under the Lease, Landlord reserves the right to make such
other and reasonable and non-discriminatory Rules and Regulations as, in its
judgment, may from time to time be needed for safety and security, for care and
cleanliness of the Premises and for the preservation of good order therein.
Tenant agrees to abide by all such Rules and Regulations herein above stated and
any additional reasonable and non-discriminatory rules and regulations which are
adopted. Tenant is responsible for the observance of all of the foregoing rules
by Tenant’s employees, agents, clients, customers, invitees and guests.

PARKING RULES AND REGULATIONS

 

(i) Tenant shall not store or permit its employees to store any automobiles in
the parking areas without the prior written consent of the operator. Except for
emergency repairs, Tenant and its employees shall not perform any work on any
automobiles while located in the parking areas, or on the Land.

 

(ii) Cars must be parked entirely within the stall lines painted on the floor,
and only small cars may be parked in areas reserved for small cars.

 

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(iii) All directional signs and arrows must be observed.

 

(iv) The speed limit shall be 5 miles per hour.

 

(v) Parking spaces reserved for handicapped persons must be used only by
vehicles properly designated.

 

(vi) Parking is prohibited in all areas not expressly designated for parking,
including without limitation:

 

  (a) areas not striped for parking

 

  (b) aisles

 

  (c) where “no parking” signs are posted

 

  (d) ramps

 

  (e) loading zones

 

(vii) Not applicable.

 

(viii) Not applicable.

 

(ix) Every parker is required to park and lock his/her own car.

 

(x) Not applicable.

 

(xi) Parking spaces may be used only for parking automobiles.

 

(xii) Tenant agrees to acquaint all persons to whom Tenant assigns a parking
space with these Rules.

 

A. TENANT ACKNOWLEDGES AND AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY LAW,
LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR DAMAGE TO TENANT OR TENANT’S
PROPERTY (INCLUDING, WITHOUT LIMITATIONS, ANY LOSS OR DAMAGE TO TENANT’S
AUTOMOBILE OR THE CONTENTS THEREOF DUE TO THEFT, VANDALISM OR ACCIDENT) ARISING
FROM OR RELATED TO TENANT’S USE OF THE PARKING AREAS OR EXERCISE OF ANY RIGHTS
UNDER THIS PARKING AGREEMENT.

 

B. Without limiting the provisions of Paragraph A above, Tenant hereby
voluntarily releases, discharges, waives and relinquishes any and all actions or
causes of action for personal injury or property damage occurring to Tenant
arising as a result of parking in the parking areas or any activities incidental
thereto, wherever or however the same may occur, and further agrees that Tenant
will not prosecute any claim for personal injury or property damage against
Landlord or any of its officers, agents, servants or employees for any said
causes of action. It is the intention of Tenant by this instrument, to exempt
and relieve Landlord from liability for personal injury or property damage
caused by negligence. If Tenant fails to comply with the parking rules and
regulations set forth herein, Landlord shall have the right to take such action
as may be necessary to enforcement thereof, which may include the towing of
vehicles, attachment of wheel immobilizer units (boots) and the like.

 

C. The provisions of Section 31 of the Lease are hereby incorporated by
reference as if fully recited.

By executing the Lease to which this Exhibit E is attached, Tenant acknowledges
that it has read and agreed to be bound by the forgoing Building Rules and
Regulations. Tenant further confirms that it has been fully and completely
advised of the potential dangers incidental to parking in the parking areas and
the terms and conditions set forth above.

 

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EXHIBIT F

RECORDED RESTRICTIONS

Declaration of Covenants, Conditions and Restrictions recorded March 3, 1971,
Instrument No. 3968753, Book 9242, Page 460, of Official Records of Santa Clara
County, as modified by the Declaration of Covenants, Conditions and Restrictions
recorded March 11, 1974, Instrument No. 4718871, Book 0796, Page 580, of
Official Records of Santa Clara County.

 

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RIDER NO. 1

EXTENSION OPTION RIDER

This Rider No. 1 is made and entered into by and between 3111-3141 CORONADO
DRIVE ASSOCIATES, LLC, a Delaware limited liability company (“Landlord”), and
INFOBLOX INC., a Delaware corporation (“Tenant”), as of the day and year of the
Lease between Landlord and Tenant to which this Rider is attached. Landlord and
Tenant hereby agree that, notwithstanding anything contained in the Lease to the
contrary, the provisions set forth below shall be deemed to be part of the Lease
and shall supersede any inconsistent provisions of the Lease. All references in
the Lease and in this Rider to the “Lease” shall be construed to mean the Lease
(and all exhibits and Riders attached thereto), as amended and supplemented by
this Rider. All capitalized terms not defined in this Rider shall have the same
meaning as set forth in the Lease.

1. Landlord hereby grants to Tenant (1) option (the “Extension Option”) to
extend the Term of the Lease for an additional period of sixty (60) months (the
“Option Term”), on the same terms, covenants and conditions as provided for in
the Lease during the initial Term, except for the Monthly Base Rent, which shall
equal the greater of (a) the Monthly Base Rent payable by Tenant during the last
month of the then current Term immediately preceding the Option Term, or (b) the
“fair market rental rate” for the Premises for the Option Term as defined and
determined in accordance with the provisions of Section 3 below.

2. The Extension Option must be exercised, if at all, by written notice
(“Extension Notice”) delivered by Tenant to Landlord no sooner than that date
which is twelve (12) months and no later than that date which is nine (9) months
prior to the expiration of the then current Term of the Lease. The Extension
Option shall, at Landlord’s sole option, not be deemed to be properly exercised
if, at the time the Extension Option is exercised or on the scheduled
commencement date for the Option Term, Tenant has (a) committed an uncured event
of default whose cure period has expired pursuant to Section 21 of the Lease,
(b) except as per Section 23(c), assigned all or any portion of the Lease or its
interest therein, or (c) except as per Section 23(c), sublet all or more than
40% of the Premises still in effect as of the date of Extension Notice or
therafter before commencement of the Option Term. Provided Tenant has properly
and timely exercised the Extension Option, the then current term of the Lease
shall be extended by the Option Term, and all terms, covenants and conditions of
the Lease shall remain unmodified and in full force and effect, except that the
Monthly Base Rent shall be as set forth above.

3. If Landlord determines that the Monthly Base Rent for the Option Term shall
be the Monthly Base Rent payable by Tenant during the last month of the then
current Term pursuant to Section 1(a) above, such determination shall be
conclusive, Tenant shall have no right to object thereto, and the following
provisions regarding the determination of the fair market rental rate shall not
apply. If, however, Landlord determines that the Monthly Base Rent for the
applicable Option Term shall be the fair market rental rate pursuant to
Section 1(b) above, then such fair market rate shall be determined in accordance
with the Fair Market Rental Rate Rider attached to the Lease as Rider No. 2. The
Monthly Base Rent for the Option Term shall include the periodic rental
increases that would be included for space leased for the period of the Option
Term.

4. Notwithstanding the fair market rental rate determined pursuant to Section 3
above, in no event shall the Monthly Base Rent payable during the Option Term be
less than the Monthly Base Rent payable during the last month of the immediately
preceding Term.

5. Tenant’s Extension Option is further subject to the terms and conditions of
Rider No. 3 attached hereto.

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RIDER NO 2

FAIR MARKET RENTAL RATE

This Rider No. 2 is made and entered into by and between 3111-3141 CORONADO
DRIVE ASSOCIATES, LLC, a Delaware limited liability company (“Landlord”), and
INFOBLOX INC., a Delaware corporation (“Tenant”), as of the day and year of the
Lease between Landlord and Tenant to which this Rider is attached. Landlord and
Tenant hereby agree that, notwithstanding anything contained in the Lease to the
contrary, the provisions set forth below shall be deemed to be part of the Lease
and shall supersede any inconsistent provisions of the Lease. All references in
the Lease and in this Rider to the “Lease” shall be construed to mean the Lease
(and all exhibits and Riders attached thereto), as amended and supplemented by
this Rider. All capitalized terms not defined in this Rider shall have the same
meaning as set forth in the Lease.

1. The term “fair market rental rate” as used in the Lease and any Rider
attached thereto shall mean the annual amount per square foot, projected during
the Option Term that a willing, non-equity renewal tenant (excluding sublease
and assignment transactions) would pay, and a willing, institutional landlord of
a comparable office building located in the Santa Clara, California market area
(the “Comparison Area”) would accept, in an arm’s length transaction (what
Landlord would accept in then current transactions for the Building may be used
for purposes of projecting rent for the Option Term), for space of comparable
size, quality and floor height as the Premises, taking into account the age,
quality and layout of the existing improvements in the Premises, and taking into
account items that professional real estate brokers or professional real estate
appraisers customarily consider, including, but not limited to, rental rates,
space availability, tenant size, tenant improvement allowances, parking charges
and any other lease considerations, if any, then being charged or granted by
Landlord or the lessors of such similar office buildings. All economic terms
other than Monthly Base Rent, such as tenant improvement allowance amounts, if
any, operating expense allowances, parking charges, etc., will be established by
Landlord and will be factored into the determination of the fair market rental
rate for the Option Term. Accordingly, the fair market rental rate will be an
effective rate, not specifically including, but accounting for, the appropriate
economic considerations described above. The fair market rental rate shall
include the periodic rental increases that would be included for space leased
for the period of the Option Term.

2. In the event the determination of fair market rental rate is required under
the Lease (as set forth in Rider No. 1 above), Landlord shall provide written
notice of Landlord’s determination of the fair market rental rate not later than
ninety (90) days following Landlord’s receipt of Tenant’s Extension Notice.
Tenant shall have ten (10) days (“Tenant’s Review Period”) after receipt of
Landlord’s notice of the fair market rental rate within which to accept such
fair market rental rate or to reasonably object thereto in writing. Failure of
Tenant to so accept the fair market rental rate submitted by Landlord in writing
within Tenant’s Review Period shall conclusively be deemed Tenant’s disapproval
thereof. If within Tenant’s Review Period Tenant objects to or is deemed to have
disapproved the fair market rental rate submitted by Landlord, Landlord and
Tenant will meet together with their respective legal counsel to present and
discuss their individual determinations of the fair market rental rate for the
Premises under the parameters set forth in Section 1 above and shall diligently
and in good faith attempt to negotiate a rental rate on the basis of such
individual determinations. Such meeting shall occur no later than ten (10) days
after the expiration of Tenant’s Review Period. The parties shall each provide
the other with such supporting information and documentation as they deem
appropriate. At such meeting if Landlord and Tenant are unable to agree upon the
fair market rental rate, they shall each submit to the other their respective
best and final offer as to the fair market rental rate. If Landlord and Tenant
fail to reach agreement on such fair market rental rate within five (5) business
days following such a meeting (the “Outside Agreement Date”), Tenant’s Extension
Option will be deemed null and void unless Tenant demands appraisal, in which
event each party’s determination shall be submitted to appraisal in accordance
with the provisions of Section 3 below.

3.(a) Landlord and Tenant shall each appoint one (1) competent, independent and
impartial commercial real estate broker with at least ten (10) years full time
commercial real estate brokerage experience in the Comparison Area (each a
“broker”). The determination of the brokers shall be limited solely to the issue
of whether Landlord’s or Tenant’s last proposed (as of the Outside Agreement
Date) best and final fair market rental rate for the Premises is the closest to
the actual fair market rental rate for the Premises as determined by the
brokers, taking into account the requirements specified in Section 1 above. Each
such broker shall be appointed within fifteen (15) days after the Outside
Agreement Date.

 

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(b) The two (2) brokers so appointed shall within fifteen (15) days of the date
of the appointment of the last appointed broker agree upon and appoint a third
broker who shall be qualified under the same criteria set forth hereinabove for
qualification of the initial two (2) brokers.

(c) The three (3) brokers shall within thirty (30) days of the appointment of
the third broker reach a decision as to whether the parties shall use Landlord’s
or Tenant’s submitted best and final fair market rental rate, and shall notify
Landlord and Tenant thereof. During such thirty (30) day period, Landlord and
Tenant may submit to the brokers such information and documentation to support
their respective positions as they shall deem reasonably relevant and Landlord
and Tenant may each appear before the brokers jointly to question and respond to
questions from the brokers.

(d) The decision of the majority of the three (3) brokers shall be binding upon
Landlord and Tenant and neither party shall have the right to reject the
decision or to nullify the exercise of the applicable Option. If either Landlord
or Tenant fails to appoint an broker within the time period specified in
Section 3(a) hereinabove, the broker appointed by one of them shall within
thirty (30) days following the date on which the party failing to appoint an
broker could have last appointed such broker reach a decision based upon the
same procedures as set forth above (i.e., by selecting either Landlord’s or
Tenant’s submitted best and final fair market rental rate), and shall notify
Landlord and Tenant thereof, and such broker’s decision shall be binding upon
Landlord and Tenant and neither party shall have the right to reject the
decision or to nullify the exercise of the applicable Option.

(e) If the two (2) brokers fail to agree upon and timely appoint a third broker,
either party, upon ten (10) days written notice to the other party, can apply to
the Presiding Judge of the Superior Court of Santa Clara County to appoint a
third broker meeting the qualifications set forth herein. The third broker,
however, selected, shall be a person who has not previously acted in any
capacity for either party.

(f) The cost of each party’s broker shall be the responsibility of the party
selecting such broker, and the cost of the third broker (or arbitration, if
necessary) shall be shared equally by Landlord and Tenant.

(g) If the process described hereinabove has not resulted in a selection of
either Landlord’s or Tenant’s submitted best and final fair market rental rate
by the commencement of the applicable lease term, then the fair market rental
rate estimated by Landlord will be used until the broker(s) reach a decision,
with an appropriate rental credit and other adjustments for any overpayments of
Monthly Base Rent or other amounts if the brokers select Tenant’s submitted best
and final estimate of the fair market rental rate. The parties shall enter into
an amendment to this Lease confirming the terms of the decision.

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RIDER NO. 3

OPTIONS IN GENERAL

This Rider No. 3 is made and entered into by and between 3111-3141 CORONADO
DRIVE ASSOCIATES, LLC, a Delaware limited liability company (“Landlord”), and
INFOBLOX INC., a Delaware corporation (“Tenant”), as of the day and year of the
Lease between Landlord and Tenant to which this Rider is attached. Landlord and
Tenant hereby agree that, notwithstanding anything contained in the Lease to the
contrary, the provisions set forth below shall be deemed to be part of the Lease
and shall supersede any inconsistent provisions of the Lease. All references in
the Lease and in this Rider to the “Lease” shall be construed to mean the Lease
(and all exhibits and Riders attached thereto), as amended and supplemented by
this Rider. All capitalized terms not defined in this Rider shall have the same
meaning as set forth in the Lease.

(a) Definition. As used in this Lease and any Rider or Exhibit attached hereto,
the word “Option” shall mean all options granted to Tenant under the Lease,
including the Extension Option pursuant to Rider No. 1 attached hereto.

(b) Option Personal. The Option granted to Tenant is personal to the original
Tenant executing the Lease (the “Original Tenant”) or an assignee succeeding to
Original Tenant’s rights under the Lease pursuant to a Permitted Transfer, and
may be exercised only by the Original Tenant (or such Permitted Transferee)
while Original Tenant occupies over forty percent (40%) of the Premises and
without the intent of thereafter assigning the Lease or subletting the Premises
and may not be exercised or be assigned, voluntarily or involuntarily, by any
person or entity other than the Original Tenant. The Option granted to Tenant
under the Lease is not assignable separate and apart from the Lease, nor may the
Option be separated from the Lease in any manner, either by reservation or
otherwise.

(c) Effect of Default on Options. Tenant will have no right to exercise any
Option, notwithstanding any provision of the grant of option to the contrary,
and Tenant’s exercise of any Option may be nullified by Landlord and deemed of
no further force or effect, if (i) Tenant is in default beyond the relevant cure
period of any monetary obligation or material non-monetary obligation under the
terms of the Lease as of Tenant’s exercise of the Option in question or at any
time after the exercise of any such Option and prior to the commencement of the
Option event, or (ii) Landlord has given Tenant two (2) or more notices of
default, which were not timely cured, during the twelve (12) month period of the
Lease prior to the exercise of the Option.

(d) Option as Economic Term. The Option is hereby deemed an economic term which
Landlord, in its sole and absolute discretion, may or may not offer in
conjunction with any future extensions of the Term.

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RIDER NO. 4

LETTER OF CREDIT RIDER

This Rider No. 4 is made and entered into by and between 3111-3141 CORONADO
DRIVE ASSOCIATES, LLC, a Delaware limited liability company (“Landlord”), and
INFOBLOX INC., a Delaware corporation (“Tenant”), as of the day and year of the
Lease between Landlord and Tenant to which this Rider is attached. Landlord and
Tenant hereby agree that, notwithstanding anything contained in the Lease to the
contrary, the provisions set forth below shall be deemed to be part of the Lease
and shall supersede any inconsistent provisions of the Lease. All references in
the Lease and in this Rider to the “Lease” shall be construed to mean the Lease
(and all exhibits and Riders attached thereto), as amended and supplemented by
this Rider. All capitalized terms not defined in this Rider shall have the same
meaning as set forth in the Lease.

1. Concurrently with Tenant’s execution of the Lease, Tenant shall deliver to
Landlord, as collateral for the full and faithful performance by Tenant of all
of its obligations under the Lease and to compensate Landlord for all losses and
damages Landlord may suffer as a result of any default by Tenant under the
Lease, an irrevocable and unconditional negotiable standby letter of credit (the
“Letter of Credit”), in the form attached hereto as Exhibit 1 and containing the
terms required herein, payable in the City of Santa Clara, California, running
in favor of Landlord issued by a solvent, nationally recognized commercial bank
that is acceptable to Landlord in its sole discretion (the “Bank”) and (1) is
chartered under the laws of the United States, any State thereof or the District
of Columbia, and which is insured by the Federal Deposit Insurance Corporation;
and (2) has a long term rating of A or higher as rated by Standard & Poor’s and
Landlord does hereby approve UBS AG as an acceptable Bank. (collectively, the
“Letter of Credit Issuer Requirements”), in the amount of Three Million One
Hundred Ninety Thousand One Hundred Sixty-Eight and 80/100 Dollars
($3,190,168.80) (the “Letter of Credit Amount”). It is acknowledged and agreed
that if and to the extent the Letter of Credit is not delivered to Landlord
concurrently with the execution and delivery of the Lease, this Lease shall
remain in full force and effect but Landlord shall not be required to deliver to
Tenant possession of the Premises, or to disburse to Tenant any portion of the
Tenant Improvement Allowance, until such time as the Letter of Credit is
received by Landlord and/or Landlord’s Lender (and if the Letter of Credit has
not been delivered within twenty (20) days following execution and delivery of
this Lease, Landlord shall have the right to terminate this Lease by written
notice to Tenant). Upon satisfaction of the LOC Release Conditions (defined in
Section 8 below), the Letter of Credit shall be released and returned to Tenant,
and as a condition to release of the Letter of Credit, Tenant shall deliver to
Landlord the cash Security Deposit which will thereafter be held by Landlord in
accordance with the terms of Section 6 of the Lease.

2. The Letter of Credit shall be (i) a sight draft, irrevocable and
unconditional, (ii) maintained in effect, whether through replacement, renewal
or extension, for the period from the Commencement Date and continuing until the
date (the “LC Expiration Date”) which is one hundred twenty (120) days after the
Expiration Date, and Tenant shall deliver a new Letter of Credit or certificate
of renewal or extension to Landlord at least thirty (30) days prior to the
expiration of the Letter of Credit then held by Landlord, without any action
whatsoever on the part of Landlord; provided, that if the tenor of the expiring
Letter of Credit is less than 120 days after the Expiration Date, then the
Letter of Credit must be at least for one year in duration and have an evergreen
(i.e. automatic renewal) provision, (iii) subject to “The Uniform Customs and
Practice for Documentary Credits” (2007 Revision) International Chamber Of
Commerce Publication No. 600, (iv) fully assignable by Landlord, and (v) permit
partial draws. Tenant further agrees to cause the Issuer of the Letter of Credit
to execute such reasonable and customary documents as may be requested by
Landlord’s Lender in connection with an assignment or pledge by Landlord to
Landlord’s lender of the Letter of Credit for loan security purposes.

3. With respect to the Letter of Credit, Landlord, or its then managing agent,
shall have the right to draw down an amount up to the face amount of the Letter
of Credit (1) following any default by Tenant under the Lease, (2) in the event
Tenant, as applicant, shall have failed to provide to Landlord a new or renewal
Letter of Credit satisfying the terms of this Rider at least thirty (30) days
prior to the expiration of the Letter of Credit then held by Landlord,
(3) Tenant has filed a voluntary petition under the Federal Bankruptcy Code or
(4) an involuntary petition has been filed against Tenant under the Federal
Bankruptcy Code.

4. The Letter of Credit shall also provide that Landlord may, at any time and
without notice to Tenant and without first obtaining Tenant’s consent thereto,
transfer all or any portion of its interest in and to the Letter of Credit to
another party, person or entity, regardless of whether or not such transfer is
separate from or as a part of the assignment by Landlord of its rights and
interests in and to the Lease. In the event of a transfer of Landlord’s interest
in the Building, Landlord shall transfer the Letter of Credit, in whole or in
part (or cause a substitute letter of credit to be delivered, as applicable) to
the transferee and thereupon Landlord shall, without any

 

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further agreement between the parties, be released by Tenant from all liability
therefor, and it is agreed that the provisions hereof shall apply to every
transfer or assignment of the whole or any portion of said Letter of Credit to a
new landlord. In connection with any such transfer of the Letter of Credit by
Landlord, Tenant shall, at Tenant’s sole cost and expense, execute and submit to
the Bank such applications, documents and instruments as may be necessary to
effectuate such transfer and, Tenant shall be responsible for paying the Bank’s
transfer and processing fees in connection therewith.

5. If, as result of any application or use by Landlord of all or any part of the
Letter of Credit, the amount of the Letter of Credit shall be less than the
Letter of Credit Amount, Tenant shall, within five (5) days thereafter, provide
Landlord with additional letter(s) of credit in an amount equal to the
deficiency (or a replacement letter of credit in the total Letter of Credit
Amount), and any such additional (or replacement) letter of credit shall comply
with all of the provisions of this Rider, and if Tenant fails to comply with the
foregoing, notwithstanding anything to the contrary contained in Section 21 of
the Lease, the same shall constitute an incurable default by Tenant. Tenant
further covenants and warrants that it will neither assign nor encumber the
Letter of Credit or any part thereof and that neither Landlord nor its
successors or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance. Without limiting the generality
of the foregoing, if the Letter of Credit expires earlier than the LC Expiration
Date, a renewal thereof or substitute letter of credit, as applicable, shall be
delivered to Landlord not later than thirty (30) days prior to the expiration of
the Letter of Credit, which shall be irrevocable and automatically renewable as
above provided through the LC Expiration Date upon the same terms as the
expiring Letter of Credit or such other terms as may be acceptable to Landlord
in its sole discretion. However, if the Letter of Credit is not timely renewed
or a substitute letter of credit is not timely received, or if Tenant fails to
maintain the Letter of Credit in the amount and in accordance with the terms set
forth in this Rider, Landlord shall have the right to present the Letter of
Credit to the Bank in accordance with the terms of this Rider, and the proceeds
of the Letter of Credit may be applied by Landlord for Tenant’s failure to fully
and faithfully perform all of Tenant’s obligations under the Lease and against
any rent payable by Tenant under the Lease that is not paid when due and/or to
pay for all losses and damages that Landlord has suffered or that Landlord
reasonably estimates that it will suffer as a result of any default by Tenant
under the Lease. Any unused proceeds shall constitute the property of Landlord
and need not be segregated from Landlord’s other assets.

6. Tenant hereby acknowledges and agrees that Landlord is entering into the
Lease in material reliance upon the ability of Landlord to draw upon the Letter
of Credit in the event Tenant fails to fully and faithfully perform all of
Tenant’s obligations under the Lease and to compensate Landlord for all losses
and damages Landlord may suffer as a result of the occurrence of any default on
the part of Tenant under the Lease and Landlord may, at any time, but without
obligation to do so, and without notice, draw upon the Letter of Credit, in part
or in whole, for such purposes. Tenant agrees not to interfere in any way with
payment to Landlord of the proceeds of the Letter of Credit, either prior to 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 from the Letter of Credit. No condition or term of the
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 upon such Letter of
Credit in a timely manner. Tenant agrees and acknowledges that Tenant has no
property interest whatsoever in the Letter of Credit or the proceeds thereof and
that, in the event Tenant becomes a debtor under any chapter of the Federal
Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate
shall have any right to restrict or limit Landlord’s claim and/or rights to the
Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6)
of the Federal Bankruptcy Code.

7. Notwithstanding anything to the contrary herein, if at any time the Letter of
Credit Issuer Requirements are not met, or if the financial condition of such
issuer changes in any other materially adverse way, as determined by Landlord in
its sole discretion, then Tenant shall within five (5) days of written notice
from Landlord deliver to Landlord a replacement Letter of Credit which otherwise
meets the requirements of the Lease, including without limitation, the Letter of
Credit Issuer Requirements. Notwithstanding anything in the Lease to the
contrary, Tenant’s failure to replace the Letter of Credit and satisfy the
Letter of Credit Issuer Requirements within such five (5) day period Landlord
shall constitute a material default for which there shall be no notice or grace
or cure periods being applicable thereto. In addition and without limiting the
generality of the foregoing, if the issuer of any letter of credit held by
Landlord is insolvent or is placed in receivership or conservatorship by the
Federal Deposit Insurance Corporation, or any successor or similar entity, or if
a trustee, receiver or liquidator is appointed for the issuer, then, effective
as of the date of such occurrence, said Letter of Credit shall be deemed to not
meet the requirements of this Rider, and Tenant shall within five (5) days of
written notice from Landlord deliver to Landlord a replacement Letter of Credit
which otherwise meets the requirements of this Rider and that meets the Letter
of Credit Issuer Requirements (and Tenant’s failure to do so shall,
notwithstanding anything in this Rider or the

 

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Lease to the contrary, constitute a material default for while there shall be no
notice or grace or cure periods being applicable thereto other than the
aforesaid five (5) day period).

8. Landlord and Tenant acknowledge and agree that in no event or circumstance
shall the Letter of Credit or any renewal thereof or substitute therefor 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 such
Section 1950.7, or (iii) intended to serve as a “security deposit” within the
meaning of such Section 1950.7. The parties hereto (A) recite that the Letter of
Credit is not intended to serve as a security deposit and such 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 thereto and (B) waive any and all rights, duties and
obligations either party may now or, in the future, will have relating to or
arising from the Security Deposit Laws, except if and to the extent the Letter
of Credit is drawn on, the proceeds drawn on which are not then applied to
Tenant’s obligations under the Lease will then be cash held by Landlord and in
that event the terms of Section 6 of the Lease shall apply thereto.

9. Provided that there exists no breach or default by Tenant under the Lease,
Tenant shall be entitled to a release and return of the Letter of Credit upon
satisfaction of the following conditions (collectively, the “LOC Release
Conditions”): either (A) Tenant shall achieve an “investment grade rating” from
any of the three (3) rating agencies (Moody’s Investors Service, Standard &
Poor’s, and Fitch Ratings Ltd.); or (B) Tenant’s shall have satisfied each of
the following financial tests:

 

  •  

Effective as of the end of any fiscal quarter ending from and after January 31,
2015,Tenant shall have achieved, over the prior four (4) consecutive fiscal
quarters prior to such date both (i) “total net revenue” equal to or in excess
of $175 million, and (ii) “income [loss] before provision for income tax” equal
to or in excess of $15 million. As an initial step in satisfying the LOC Release
Conditions, Tenant shall deliver to Landlord written evidence that the foregoing
metrics are satisfied as of a date from and after January 31, 2015.

 

  •  

During the fiscal quarter following the date of satisfaction of the prior two
(2) metrics and delivery by Tenant to Landlord of written notice evidencing such
satisfaction, Tenant’s total market capitalization shall be no less than $1.25
billion as of the market close for ten (10) consecutive trading days during such
fiscal quarter. [It being agreed that if this third metric is not achieved by
the last day of the fiscal quarter immediately following Tenant’s notice of
satisfaction of the first two metrics as referenced above, Tenant will be
required to start over with a new submittal including new fiscal quarter
information, commencing with the first two metrics above].

In order to obtain a release and surrender of the Letter of Credit, Tenant shall
deliver to Landlord a written notice requesting the release and surrender of
such Letter of Credit, which notice shall be accompanied by (a) full written
evidence of the satisfaction of the LOC Release Conditions, as referenced above,
and (b) immediately available funds in the amount of $326,958.77, representing
the Security Deposit. Upon receipt of Tenant’s notice requesting release of the
Letter of Credit, Landlord shall have twenty (20) business days to review
Landlord’s records with respect to Tenant’s performance under the Lease and
satisfaction of the LOC Release Conditions. Tenant shall reasonably cooperate
with requests by Landlord for information regarding Tenant’s performance under
the Lease and Tenant’s current financial condition.

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EXHIBIT 1 TO RIDER NO. 4

 

 

 

 

 

     Contact Phones:                            

IRREVOCABLE STANDBY LETTER OF CREDIT

 

                    , 20    

Beneficiary:

  

Our irrevocable standby Letter of Credit:

No.                                                                         

[ insert correct LANDLORD ENTITY]

Attn: [insert NAME]

[insert address]

   Applicant:                                                            
                                                                                
                                                                                
  

Amount: Exactly USD $            

(                     and     /100 Dollars)

   Final Date of Expiration:                       

[INSERT DATE WHICH IS 120 DAYS AFTER EXPIRATION DATE]

We (the “Bank”) hereby issue our irrevocable standby Letter of Credit
No.             in Beneficiary’s favor for the account of the above-referenced
Applicant, in the aggregate amount of exactly USD $            .

This Letter of Credit is available with us at our above office by presentation
of your draft drawn on us at sight bearing the clause: “Drawn under
            [INSERT NAME OF BANK] Letter of Credit No.             ” and
accompanied by the following:

1. Beneficiary’s signed certification purportedly signed by an authorized
officer or agent stating:

(A) “ Beneficiary, as landlord, is now entitled to draw upon this Letter of
Credit pursuant to the terms and conditions of that certain lease agreement
dated             for premises located at             ”; or

(B) “The Bank has notified us that this Letter of Credit will not be extended
beyond the current expiration date of this Letter of Credit and Applicant has
not delivered to Beneficiary at least thirty (30) days prior to the current
expiration of this Letter of Credit a replacement Letter of Credit satisfactory
to Beneficiary.”

(C) “Tenant has filed a voluntary petition under the Federal Bankruptcy Code;”
or

(D) “An involuntary petition has been filed against Tenant under the Federal
Bankruptcy Code.”

2. The original of this Letter of Credit.

Special conditions:

Partial draws under this Letter of Credit are permitted. Notwithstanding
anything to the contrary contained herein, this Letter of Credit shall expire
permanently without renewal on             [INSERT DATE WHICH IS 120 DAYS AFTER
EXPIRATION DATE].

This Letter of Credit shall be automatically extended for an additional period
of one (1) year, without amendment, from the present or each future expiration
date but in any event not beyond             [INSERT DATE WHICH IS 120 DAYS
AFTER EXPIRATION DATE] which shall be the final expiration date of this Letter
of Credit, unless, at least thirty (30) days prior to the then current
expiration date we notify you by registered mail/overnight courier service at
the above address that this Letter of Credit will not be extended beyond the
current expiration date.

We hereby agree with you that all drafts drawn under and in compliance with the
terms of this Letter of Credit will be duly honored upon presentation to us of
the documents described in Paragraph 1 above on or before the expiration date of
this Letter of Credit, without inquiry as

 

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to the accuracy thereof and regardless of whether Applicant disputes the content
of any such documents or certifications.

This Letter of Credit is transferable and any such transfer may be effected by
us, provided that you deliver to us your written request for transfer in form
and substance reasonably satisfactory to us. Beneficiary may, at any time and
without notice to Applicant and without first obtaining Applicant’s consent
thereto, transfer all or any portion of Beneficiary’s interest in and to the
Letter of Credit to another party, person or entity, regardless of whether or
not such transfer is separate from or as a part of the assignment by Beneficiary
of Beneficiary’s rights and interests in and to the Lease. The original of this
Letter of Credit together with any amendments thereto must accompany any such
transfer request.

Except so far as otherwise expressly stated, this documentary credit is subject
to “The Uniform Customs and Practice for Documentary Credits” (2007 Revision)
International Chamber Of Commerce Publication No. 600.

 

By:  

 

  Authorized signature

Please direct any correspondence including drawing or inquiry quoting our
reference number to the above referenced address.

 

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