EXHIBIT 10.1
OFFICE LEASE
26601, 26701 and 26677 WEST AGOURA ROAD
MS LPC MALIBU PROPERTY HOLDINGS, LLC
a Delaware limited liability company,
as Landlord,
and
IXIA,
a California corporation,
as Tenant.

 

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

 

TABLE OF CONTENTS

                      Page              
ARTICLE 1
  PREMISES, BUILDING, PROJECT, AND COMMON AREAS     6  
ARTICLE 2
  LEASE TERM; OPTION TERM(S)     11  
ARTICLE 3
  BASE RENT; BASE RENT ABATEMENT     15  
ARTICLE 4
  ADDITIONAL RENT     16  
ARTICLE 5
  USE OF PREMISES     27  
ARTICLE 6
  SERVICES AND UTILITIES     28  
ARTICLE 7
  REPAIRS     32  
ARTICLE 8
  ADDITIONS AND ALTERATIONS     33  
ARTICLE 9
  COVENANT AGAINST LIENS     35  
ARTICLE 10
  INSURANCE     36  
ARTICLE 11
  DAMAGE AND DESTRUCTION     39  
ARTICLE 12
  NONWAIVER     41  
ARTICLE 13
  CONDEMNATION     42  
ARTICLE 14
  ASSIGNMENT AND SUBLETTING     43  
ARTICLE 15
  SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES     47  
ARTICLE 16
  HOLDING OVER     48  
ARTICLE 17
  ESTOPPEL CERTIFICATES     48  
ARTICLE 18
  SUBORDINATION     49  
ARTICLE 19
  DEFAULTS; REMEDIES     50  
ARTICLE 20
  COVENANT OF QUIET ENJOYMENT     53  
ARTICLE 21
  SECURITY DEPOSIT     53  
ARTICLE 22
  ROOFTOP RIGHTS     53  
ARTICLE 23
  SIGNS     54  

              (i)    

 

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

 

                      Page              
ARTICLE 24
  COMPLIANCE WITH LAW     57  
ARTICLE 25
  LATE CHARGES     57  
ARTICLE 26
  LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT     58  
ARTICLE 27
  ENTRY BY LANDLORD     58  
ARTICLE 28
  TENANT PARKING     59  
ARTICLE 29
  MISCELLANEOUS PROVISIONS     60  

              (ii)    

 

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

 

INDEX

              Page(s)
 
       
Abatement Event
    32  
Additional Notice
    32  
Additional Rent
    16  
Advocate Arbitrators
    14  
Alterations
    33  
Applicable Laws
    57  
Award
    14  
Bank Prime Loan
    58  
Base Building
    34  
Base Rent
    15  
Base Year
    16  
bona-fide third-party offer
    10  
Brokers
    65  
Building Common Areas,
    7  
CC&Rs
    28  
Common Area Facilities
    17  
Comparable Area
    13  
Comparable Buildings
    13  
Comparable Deals
    12  
Comparable Term
    13  
Controllable Expenses
    24  
Cosmetic Alterations
    33  
Cost Pools
    23  
Damage Termination Date
    40  
Damage Termination Notice
    40  
Direct Expenses
    16  
Eligibility Period
    32  
Environmental Laws
    67  
Estimate
    25  
Estimate Statement
    25  
Estimated Excess
    25  
Excess
    24  
Exercise Notice
    13  
Existing Lease
    6  
Existing Lease Security Deposit
    53  
Expense Year
    16  
First Offer Commencement Date
    9  
First Offer Notice
    8  
First Offer Rent
    8  
First Offer Space
    8  
First Refusal Notice
    10  
First Refusal Space
    10  
Force Majeure
    63  
Generator
    31  

              (iii)    

 

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

 

              Page(s)
 
       
Generator Area
    31  
Hazardous Material(s)
    67  
HVAC
    29  
Initial Notice
    32  
Interest Rate
    58  
Landlord
    1  
Landlord Parties
    36  
Landlord Repair Notice
    39  
Lease
    1  
Lease Commencement Date
    11  
Lease Expiration Date
    11  
Lease Term
    11  
Lease Year
    11  
Lines
    67  
Mail
    63  
Market Rent
    12  
Net Worth
    47  
Neutral Arbitrator
    14  
Non-Transferee Assignee
    47  
Notices
    63  
Operating Expenses
    17  
Option Rent
    12  
Option Term
    12  
Original Improvements
    38  
Original Tenant
    8  
Other Improvements
    69  
Outside Agreement Date
    14  
Premises
    6  
Project Common Areas,
    7  
Proposition 13
    21  
Reassessment
    26  
Reassessment,
    23  
Renovations
    66  
Rent Concessions
    12  
Rent
    16  
Review Period
    26  
Security Deposit
    53  
SNDAA
    49  
Statement
    24  
Subject Space
    43  
Summary
    1  
Superior Holders
    49  
Superior Right Holders
    8  
Tax Expenses
    21  
Tenant
    1  

              (iv)    

 

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

 

              Page(s)
 
       
Tenant HVAC System
    30  
Tenant Work Letter
    6  
Tenant’s Share
    23  
Tenant’s Signage
    55  
Third Party Lease
    10  
TI Allowance
    13  
Transfer
    46  
Transfer Notice
    43  
Transfer Premium
    45  
Transferee
    43  
Transfers
    43  

              (v)    

 

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

 

26601, 26701 and 26677 WEST AGOURA ROAD
OFFICE LEASE
     This Office Lease (the “Lease”), dated as of the date set forth in
Section 1 of the Summary of Basic Lease Information (the “Summary”), below, is
made by and between MS LPC MALIBU PROPERTY HOLDINGS, LLC, a Delaware limited
liability company (“Landlord”), and IXIA, a California corporation (“Tenant”).
SUMMARY OF BASIC LEASE INFORMATION

              TERMS OF LEASE   DESCRIPTION
 
       
1.
  Date:   September 14, 2007.
 
       
2.
  Premises:    
 
       
 
  2.1      Buildings:   Building F:
 
       
 
      That certain office building containing approximately 50,000 rentable
square feet of space and located at 26601 West Agoura Road, Calabasas, CA 91302
 
       
 
      Building A:
 
       
 
      That certain office building containing approximately 21,612 rentable
square feet of space and located at 26701 West Agoura Road, Calabasas, CA 91302
 
       
 
      Building C:
 
       
 
      That certain office building containing approximately 43,658 rentable
square feet of space and located at 26677 West Agoura Road, Calabasas, CA 91302
 
       
 
  2.2      Premises:   A total of approximately 84,124 (80,796 usable) rentable
square feet of space, consisting of (i) approximately 50,000 rentable (48,809
usable) square feet of space comprising the entire rentable area of Building F
(the “Building F Premises”); (ii) approximately 21,612 (19,823 usable) rentable
square feet of space comprising the entire rentable area of Building A (the
“Building A
 
         

 

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

 

              TERMS OF LEASE   DESCRIPTION
 
       
 
      Premises”); and (iii) approximately 12,512 (12,164 usable) rentable square
feet of space, commonly known as Suite 101, and located on the first floor of
Building C (the “Building C Premises”), all as further set forth in Exhibit A to
the Office Lease.
 
       
 
  2.3      Project:   The Buildings are part of an office project known as
“Corporate Center — Calabasas,” as further set forth in Section 1.1.2 of this
Lease.
 
       
3.
  Lease Term    
 
  (Article 2):    
 
       
 
  3.1      Length of Term:   Five (5) years.
 
       
 
  3.2      Lease Commencement Date:   June 1, 2008.
 
       
 
  3.3      Lease Expiration Date:   May 31, 2013.
 
       
 
  3.4      Option Term:   Five (5) years.
 
       
4.
  Base Rent (Article 3):    
 
       
 
  4.1      Building F Premises Base Rent:    

                                              Monthly             Monthly  
Rental Rate     Annual   Installment   per Rentable Lease Year   Base Rent   of
Base Rent   Square Foot*
 
                       
1
  $ 1,536,000.00     $ 128,000.00     $ 2.560  
2
  $ 1,582,080.00     $ 131,840.00     $ 2.637  
3
  $ 1,629,542.40     $ 135,795.20     $ 2.716  
4
  $ 1,678,428.67     $ 139,869.06     $ 2.797  
5
  $ 1,728,781.53     $ 144,065.13     $ 2.881  

    4.2        Building A Premises Base Rent:

                                              Monthly             Monthly  
Rental Rate     Annual   Installment   per Rentable Lease Year   Base Rent   of
Base Rent   Square Foot*
 
                       
1
  $ 663,920.64     $ 55,326.72     $ 2.560  
2
  $ 683,838,26     $ 56,986.52     $ 2.637  
3
  $ 704,353.41     $ 58,696.12     $ 2.716  
4
  $ 725,484.01     $ 60,457.00     $ 2.797  
5
  $ 747,248.53     $ 62,270.71     $ 2.881  

-2-

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

 

    4.3        Building C Premises Base Rent:

                                              Monthly             Monthly  
Rental Rate     Annual   Installment   per Rentable Lease Year   Base Rent   of
Base Rent   Square Foot*
1
  $ 384,368.64     $ 32,030.72     $ 2.560  
2
  $ 395,899.70     $ 32,991.64     $ 2.637  
3
  $ 407,776.69     $ 33,981.39     $ 2.716  
4
  $ 420,009.99     $ 35,000.83     $ 2.797  
5
  $ 432,610.29     $ 36,050.86     $ 2.881  

    4.4        Total Base Rent:

                                              Monthly             Monthly  
Rental Rate     Annual   Installment   per Rentable Lease Year   Base Rent   of
Base Rent   Square Foot*
1
  $ 2,584,289.28     $ 215,357.44     $ 2.560  
2
  $ 2,661,817.96     $ 221,818.16     $ 2.637  
3
  $ 2,741,672.50     $ 228,472.71     $ 2.716  
4
  $ 2,823,922.67     $ 235,326.89     $ 2.797  
5
  $ 2,908,640.35     $ 242,386.70     $ 2.881  

 

*   The Annual Base Rent (and Monthly Installment of Base Rent) applicable
during the first (1st) Lease Year was calculated by multiplying the Monthly
Rental Rate per Rentable Square Foot by the number of rentable square feet of
space in the applicable Premises. Thereafter, the calculation of Annual Base
Rent (and Monthly Installment of Base Rent) reflects an annual increase of 3%.
Accordingly, the Monthly Rental Rate per Rentable Square Foot for Lease Years 2
—5 are only an approximation for reference purposes only.

         
 
       
5.
  Base Year    
 
  (Article 4):   Calendar year 2008.
 
       
6.
  Tenant’s Share    
 
  (Article 4):    
 
       
 
  6.1       Building F Premises Share:   100%.
 
       
 
  6.2       Building A Premises Share:   100%.
 
       
 
  6.3       Building C Premises Share:   28.66%
 
       
7.
  Permitted Use   Tenant shall use the Premises solely for general office use,
research and
 
  (Article 5):   development, light manufacturing, electronic assembly and test
and uses incidental thereto (the “Permitted Use”); provided, however, that
notwithstanding anything to the contrary set forth hereinabove,

-3-

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

 

         
 
      and as more particularly set forth in the Lease, Tenant shall be
responsible for operating and maintaining the Premises pursuant to, and in no
event may Tenant’s Permitted Use violate, (A) Landlord’s “Rules and
Regulations,” as that term is set forth in Section 5.2 of this Lease, (B) all
“Applicable Laws,” as that term is set forth in Article 24 of this Lease,
(C) all applicable zoning, building codes and the “CC&Rs,” as that term is set
forth in Section 5.3 of this Lease, provided a copy of such CC&Rs have been
delivered to Tenant, and (D) the character of the Project as a first-class
office building Project.
 
       
8.
  Security Deposit   $90,462.89.
 
  (Article 21):    
 
       
9.
  Parking Pass Ratio   Three and 8/10 (3.8) parking passes for every 1,000
usable square feet of the
 
  (Article 28):   Premises, for a total of 306 parking passes (i.e., 185 parking
passes with respect to Building F Premises, 75 parking passes with respect to
the Building A Premises and 46 with respect to the Building C Premises).
Notwithstanding the foregoing, twenty-seven (27) parking passes attributable to
the Building F Premises, and thirteen (13) parking passes attributable to the
Building A Premises, and four (4) parking passes attributable to the Building C
Premises, shall be for the use of a reserved surface parking stall. In addition,
eighteen (18) parking passes attributable to the Building F Premises shall be
located in the parking garage located under of Building F (the “Building F
Parking Garage”). All such parking passes and reserved parking stalls shall be
provided in accordance with the terms of Article 28.
 
       
10.
  Address of Tenant   Ixia

 
  (Section 29.18):   26601 West Agoura Road, Suite 200

 
      Calabasas, CA 91302

 
      Attention: Facilities Manager

 
      (Prior to and after the Lease Commencement Date)
 
       
 
      with a copy to:

-4-

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

 

         
 
      Ixia
 
      26601 West Agoura Road, Suite 200
 
      Calabasas, CA 91302
 
      Attention: General Counsel
 
      (Prior to and after the Lease Commencement Date)
11.
  Address of Landlord    
 
  (Section 29.18):   See Section 29.18 of the Lease.
 
       
12.
  Broker(s)   Tenant Broker:
 
  (Section 29.24):    
 
      The Staubach Company
 
      515 South Flower Street, Suite 1300
 
      Los Angeles, California 90071
 
      Attention: Mr. Gary Horwitz and Mr. Michael Siteman  
 
      Landlord Broker:  
 
      CB Richard Ellis
 
      771 E. Daily Drive, Suite 300
 
      Camarillo, California 93010
 
      Attention: Mr. Tom Dwyer
 
       
13.
  Tenant Improvement Allowance   $1,150,000.00
 
  (Section 2 of Exhibit B):    

-5-

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

 

ARTICLE 1
PREMISES, BUILDING, PROJECT, AND COMMON AREAS
     1.1 Premises, Building, Project and Common Areas.
          1.1.1 The Premises. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises set forth in Section 2.2 of the Summary,
consisting of the Building F Premises, the Building A Premises, and the Building
C Premises (collectively, the “Premises”). The outline of the Premises is set
forth in Exhibit A attached hereto and each floor or floors of the Premises has
or have approximately the number of rentable square feet as set forth in
Section 2.2 of the Summary. The parties hereto agree that the lease of the
Premises is upon and subject to the terms, covenants and conditions (the “TCCs”)
herein set forth, and Tenant covenants as a material part of the consideration
for this Lease to keep and perform each and all of such TCCs by it to be kept
and performed and that this Lease is made upon the condition of such
performance. The parties hereto hereby acknowledge that the purpose of Exhibit A
is to show the approximate location of the Premises in the “Buildings,” as that
term is defined in Section 1.1.2, below, only, and such Exhibit is not meant to
constitute an agreement, representation or warranty as to the construction of
the Premises, the precise area thereof or the specific location of the “Common
Areas,” as that term is defined in Section 1.1.3, below, or the elements thereof
or of the accessways to the Premises or the “Project,” as that term is defined
in Section 1.1.2, below. Except as specifically set forth in this Lease and in
the Tenant Work Letter attached hereto as Exhibit B (the “Tenant Work Letter”),
Landlord shall not be obligated to provide or pay for any improvement work or
services related to the improvement of the Premises. Tenant acknowledges that
Tenant is currently in possession of the Premises pursuant to that certain lease
by and between Malibu Canyon Office Partners, LLC, predecessor-in-interest to
Landlord, and Tenant (formerly known as Ixia Communications, Inc.), dated
November 5, 1999, as amended (the “Existing Lease”), and, therefore, the
continued possession of the Premises by Tenant on and after the date of this
Lease shall presumptively establish that the Premises and the Building were at
such time in good and sanitary order, condition and repair, subject to the
completion of “Landlord’s work,” as that term is defined in Section 1.2 of the
Tenant Work Letter. Notwithstanding anything set forth in the Existing Lease to
the contrary, upon the Lease Commencement Date the Existing Lease shall
terminate in its entirety and shall be of no further force or effect (except
with respect to those provisions which specifically survive the expiration or
earlier termination of the Existing Lease). Tenant also acknowledges that
neither Landlord nor any agent of Landlord has made any representation or
warranty regarding the condition of the Premises, the Buildings or the Project
or with respect to the suitability of any of the foregoing for the conduct of
Tenant’s business, except as specifically set forth in this Lease and the Tenant
Work Letter.
          1.1.2 The Buildings and The Project. The Premises are contained within
the buildings (“Building F”, “Building A” and “Building C”) set forth in
Section 2.1 of the Summary (Building F, Building A and Building C are sometimes
individually referred to herein as “Building” and collectively referred to
herein as the “Buildings”). The Buildings are part of an office project known as
“Corporate Center — Calabasas.” The term “Project,” as used in this Lease, shall
mean (i) the Buildings and the Common Areas, (ii) the land (which is improved
with landscaping, parking facilities and other improvements) upon which the
Buildings and the

-6-

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

 

Common Areas are located, (iii) the other office buildings located adjacent to
the Buildings and the land upon which such adjacent office buildings are
located, and (iv) at Landlord’s discretion, any additional real property, areas,
land, buildings or other improvements located in the vicinity of the Project and
which are added thereto (collectively, “Additional Property”); provided,
however, (A) the addition of any such Additional Property shall not materially
interfere with Tenant’s access to, and/or use of the Premises or result in an
increase in the amount of Direct Expenses payable by Tenant over the amount of
Direct Expenses payable by Tenant immediately prior to the addition of the
Additional Property, and (B) if Landlord, during any Expense Year after the Base
Year, adds any Additional Property to the Project pursuant to the foregoing item
(iv), then the Direct Expenses for the Base Year shall be equitably adjusted
(either increased or decreased) by Landlord to an amount that Landlord
reasonably determines that Direct Expenses would have been had such Additional
Property been a part of the Project during the same period of time during the
Base Year as such Additional Property was included in the Project during such
subsequent Expense Year.
          1.1.3 Common Areas. Tenant shall have the non-exclusive right to use
in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other portions of the Project designated by Landlord, in its discretion,
including certain areas designated for the exclusive use of certain tenants, or
to be shared by Landlord and certain tenants, are collectively referred to
herein as the “Common Areas”). The Common Areas shall consist of the “Project
Common Areas” and the “Building Common Areas.” The term “Project Common Areas,”
as used in this Lease, shall mean the portion of the Project designated as such
by Landlord. The term “Building Common Areas,” as used in this Lease, shall mean
the portions of the Common Areas located within each Building designated as such
by Landlord. The manner in which the Common Areas are maintained and operated
shall be at the reasonable discretion of Landlord (but shall at least be
consistent with the manner in which the common areas of the “Comparable
Buildings,” as that term is defined in Section 2.2.2 of this Lease, below, are
maintained and operated) and the use thereof shall be subject to such rules,
regulations and restrictions as Landlord may reasonably make from time to time,
provided that such rules, regulations and restrictions do not unreasonably
interfere with the rights granted to Tenant under this Lease and the permitted
use granted under Section 5.1, below. Landlord reserves the right to close
temporarily, make alterations or additions to, or change the location of
elements of the Project and the Common Areas; provided that no such changes
shall be permitted which materially reduce Tenant’s rights or access hereunder,
and Landlord shall perform such closures, alterations, additions or changes in a
commercially reasonable manner and, in connection therewith, shall use
commercially reasonable efforts to minimize any material interference with
Tenant’s use of and access to the Premises. Except when and where Tenant’s right
of access is specifically excluded in this Lease, Tenant shall have the right of
access to the Premises, the Building, and the Project parking facility
twenty-four (24) hours per day, seven (7) days per week during the “Lease Term,”
as that term is defined in Section 2.1, below.
     1.2 Verification of Rentable and Usable Square Feet of Premises and
Buildings. For purposes of this Lease, “rentable square feet” and “usable square
feet” of the Premises shall be deemed as set forth in Section 2.2 of the Summary
and the rentable square feet of the Buildings shall be deemed as set forth in
Section 2.1 of the Summary.

-7-

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

 

     1.3 Right of First Offer. Landlord hereby grants to the originally named
Tenant herein (“Original Tenant”), and any “Permitted Assignee,” as that term is
defined in Section 1.3.6 of this Lease, below, a right of first offer with
respect to that certain space located in Building C and commonly known as
Suite 100 (the “First Offer Space”). Notwithstanding the foregoing, such first
offer right of Tenant shall commence only following the expiration or earlier
termination of the existing leases (including renewals) of the First Offer
Space, and such right of first offer shall be subordinate to all rights of
tenants under leases of the First Offer Space existing as of the date hereof,
regardless of whether such rights are executed strictly in accordance with their
respective terms or pursuant to lease amendments or new leases (all such tenants
under existing leases of the First Offer Space and other tenants of the Project,
collectively, the “Superior Right Holders”). Tenant’s right of first offer shall
be on the terms and conditions set forth in this Section 1.3.
          1.3.1 Procedure for Offer. Landlord shall notify Tenant (a “First
Offer Notice”) from time to time when the First Offer Space or any portion
thereof becomes available for lease to third parties (other than Superior Right
Holders). Pursuant to such First Offer Notice, Landlord shall offer to lease to
Tenant the then available First Offer Space. A First Offer Notice shall describe
the space so offered to Tenant and shall set forth the “First Offer Rent,” as
that term is defined in Section 1.3.3, below, and the other economic terms upon
which Landlord is willing to lease such space to Tenant.
          1.3.2 Procedure for Acceptance. If Tenant wishes to exercise its right
of first offer with respect to the space described in a First Offer Notice, then
within seven (7) days of delivery of such First Offer Notice to Tenant, Tenant
shall deliver notice to Landlord irrevocably exercising Tenant’s right of first
offer with respect to the entire space described in such First Offer Notice and
either (i) accepting the First Offer Rent and the other economic terms set forth
in the First Offer Notice (the “Other Economic Terms”), in which case Tenant’s
lease of the First Offer Space shall be at the First Offer Rent and Other
Economic Terms, or (ii) rejecting the First Offer Rent and Other Economic Terms,
in which case the First Offer Rent and other economic terms applicable to
Tenant’s lease of the First Offer Space shall be determined pursuant to
arbitration as set forth in Section 2.2.4 of this Lease, below. If Tenant
delivers notice to Landlord irrevocably exercising Tenant’s right of first offer
with respect to the entire space described in such First Offer Notice but fails
to accept or reject the First Offer Rent and Other Economic Terms, then Tenant
shall be deemed to have accepted the First Offer Rent and Other Economic Terms.
Notwithstanding anything to the contrary contained herein, Tenant must elect to
exercise its right of first offer, if at all, with respect to all of the space
offered by Landlord to Tenant at any particular time, and Tenant may not elect
to lease only a portion thereof. If Tenant does not exercise its right of first
offer with respect to any space described in a First Offer Notice or if Tenant
fails to respond to a First Offer Notice within seven (7) days of delivery
thereof, then Tenant’s right of first offer as set forth in this Section 1.3
shall terminate as to all of the space described in such First Offer Notice.
          1.3.3 First Offer Space Rent. The annual “Rent,” as that term is
defined in Section 4.1 of this Lease, payable by Tenant for the First Offer
Space (the “First Offer Rent”) shall be equal to the “Market Rent,” as that term
is defined in Section 2.2.2 of this Lease, for the First Offer Space, pursuant
to transactions consummated within the nine (9)-month period

-8-

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

 

preceding the “First Offer Commencement Date,” as that term is defined in
Section 1.3.5 of this Lease.
          1.3.4 Construction In First Offer Space. Tenant shall accept the First
Offer Space in its then existing “as is” condition; provided, however, the
foregoing shall not be interpreted to mean that Landlord is prevented from
providing a tenant improvement allowance to Tenant in connection with the First
Offer Space. The construction of improvements in the First Offer Space shall
comply with the terms of Article 8 of this Lease.
          1.3.5 Amendment to Lease. If Tenant timely exercises Tenant’s right to
lease First Offer Space as set forth herein, then, within thirty (30) days
thereafter, Landlord and Tenant shall execute an amendment to this Lease adding
such First Offer Space to the Premises upon the terms and conditions as set
forth in the First Offer Notice therefor and this Section 1.3; provided,
however, if the First Offer Rent has not been determined prior to the date such
amendment is executed by the parties, then the amendment shall reflect the fact
that the First Offer Rent shall be determined pursuant to the process set forth
in Section 2.2.4, below. Tenant shall commence payment of Rent for such First
Offer Space, and the term of such First Offer Space shall commence, upon the
date of delivery of such First Offer Space to Tenant (the “First Offer
Commencement Date”) and terminate on the date set forth in the First Offer
Notice therefor.
          1.3.6 Termination of Right of First Offer. The rights contained in
this Section 1.3 shall be personal to Original Tenant and any Permitted
Assignee, and may only be exercised by Original Tenant or a Permitted Assignee
(and not by any other assignee or sublessee of Tenant’s interest in this Lease)
if Original Tenant or a Permitted Assignee occupies at least seventy percent
(70%) of the entire Premises, provided that for the purposes of this
Section 1.3.6, the Original Tenant or Permitted Assignee, as the case may be,
shall be deemed to be in occupancy of any space sublet to any Transferee
pursuant to a sublease consented to by Landlord pursuant to the terms of
Article 14 of this Lease. In addition, Landlord hereby acknowledges that
following the proper exercise of Tenant’s right to lease First Offer Space as
set forth herein, Tenant may thereafter sublet the First Offer Space to a
subtenant approved by Landlord pursuant to the terms and conditions of
Article 14, below. The right of first offer granted herein shall terminate as to
any space described in a First Offer Notice upon the failure by Tenant to
exercise its right of first offer with respect to such space as offered by
Landlord. Tenant shall not have the right to lease First Offer Space, as
provided in this Section 1.3, if, as of the date of the attempted exercise of
any right of first offer by Tenant, or as of the scheduled date of delivery of
such First Offer Space to Tenant, Tenant is in default under this Lease or
Tenant has previously been in default under this Lease more than once. As used
in this Lease, the term “Permitted Assignee” shall mean any Transferee that is
an assignee of Tenant’s entire interest in this Lease pursuant to an assignment
consented to by Landlord pursuant to the terms of Article 14 of this Lease, or
which Landlord’s consent was not required pursuant to the terms of Section 14.8
of this Lease.
     1.4 Right of First Refusal. Landlord hereby grants to Original Tenant and
any Permitted Assignee a one-time right of first refusal (the “First Refusal
Right”) with respect to that certain space commonly known as Suite 100 and
located in that certain building (the “26707 Building”) located in the Project
and commonly known by the street address of 26707 W.

-9-

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

 

Agoura Road, Calabasas, California (the “First Refusal Space”). Such First
Refusal Right shall be on the terms and conditions set forth in this
Section 1.4.
          1.4.1 Procedure for Lease.
               1.4.1.1 Procedure for Offer. Landlord shall notify Tenant (the
“First Refusal Notice”) from time-to-time when and if Landlord receives a
“bona-fide third-party offer” for all or a portion of the First Refusal Space.
Pursuant to such First Refusal Notice, Landlord shall offer to lease to Tenant
the applicable First Refusal Space. The First Refusal Notice shall describe the
First Refusal Space, and the lease term, rent and other fundamental economic
terms and conditions, including the method of measurement of rentable square
feet, upon which Landlord proposes to lease such First Refusal Space pursuant to
the bona-fide third-party offer (collectively, the “First Refusal Rent”). For
purposes of this Section 1.4, a “bona-fide third-party offer” shall mean a
counter-offer received by Landlord to lease First Refusal Space from a qualified
third party, unaffiliated with Landlord, which Landlord would otherwise be
willing to accept. For purposes of example only, the following would each
constitute a bone-fide third-party offer:

  (i)   Landlord receives a request for proposal from a qualified third party.
Landlord responds to the request for proposal with a lease proposal and
subsequently receives a written bona-fide counter proposal from the qualified
third party acceptable to Landlord.     (ii)   Landlord receives a written offer
to lease from a qualified third party. Landlord responds to the offer with a
written counter offer and subsequently receives a bona-fide counter to
Landlord’s counter offer from the qualified third party acceptable to Landlord.

               1.4.1.2 Procedure for Acceptance. If Tenant wishes to exercise
Tenant’s right of first refusal with respect to the First Refusal Space
described in the First Refusal Notice, then within seven (7) days of delivery of
the First Refusal Notice to Tenant, Tenant shall deliver notice to Landlord of
Tenant’s exercise of its right of first refusal with respect to all of the First
Refusal Space described in the First Refusal Notice at the rent, for the term
and upon the other fundamental economic terms and conditions pursuant to
Section 1.4.2, below. If Tenant does not so notify Landlord within such seven
(7) day period of Tenant’s exercise of its first refusal right, then Landlord
shall be free to negotiate and enter into a lease for the First Refusal Space to
anyone whom it desires on whatever terms Landlord desires. To the extent
Landlord enters into any lease of First Refusal Space with any such third party
in accordance with the foregoing (“Third Party Lease”), Tenant’s rights under
this Section 1.4 shall be subordinate to the rights of the tenant under the
Third Party Lease with respect to the space leased and encumbered pursuant to
the provisions of the Third Party Lease, all extensions and renewals thereof,
all pure expansion options contained therein which are stated as Landlord
delivery obligations within a certain time frame for a certain amount of space,
and all right of first offer expansions contained therein.

-10-

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

 

          1.4.2 Amendment to Lease. If Tenant timely exercises Tenant’s right of
first refusal to lease First Refusal Space as set forth herein, Landlord and
Tenant shall within thirty (30) days thereafter execute an amendment to this
Lease adding such First Refusal Space to the Premises on the terms and
conditions contained in this Lease and this Section 1.4. The term of Tenant’s
lease of any such First Refusal Space shall commence on the date (the “First
Refusal Commencement Date”) upon which Landlord delivers such First Refusal
Space to Tenant.
          1.4.3 Termination of First Refusal Right. The rights contained in this
Section 1.4 shall be personal to the Original Tenant and any Permitted Assignee
(and not any other assignee or sublessee), and shall be exercisable only so long
as the Original Tenant or a Permitted Assignee occupies at least seventy percent
(70%) of the entire Premises, provided that for the purposes of this
Section 1.4.3, the Original Tenant or Permitted Assignee, as the case may be,
shall be deemed to be in occupancy of any space sublet to any Transferee
pursuant to a sublease consented to by Landlord pursuant to the terms of
Article 14 of this Lease. In addition, Landlord hereby acknowledges that
following the proper exercise of Tenant’s right to first refusal as set forth
herein, Tenant may thereafter sublet the First Refusal Space to a subtenant
approved by Landlord pursuant to the terms and conditions of Article 14, below.
Tenant shall not have the right to lease any First Refusal Space, as provided in
this Section 1.4, if (i) as of the date Landlord would otherwise be required to
provide the First Refusal Notice, Tenant is in default under this Lease, or
(ii) as of the date Landlord would otherwise be required to provide the First
Refusal Notice, Tenant has been in default, after expiration of any applicable
notice or cure periods, more than twice. Notwithstanding anything set forth in
this Lease to the contrary, in the event Landlord sells the 26707 Building
separately from the Buildings, then, prior to the consummation of such sale,
Landlord shall record a memorandum of Tenant’s right of first refusal on title
of the 26707 Building.
ARTICLE 2
LEASE TERM; OPTION TERM(S)
     2.1 Initial Lease Term. The TCCs and provisions of this Lease shall be
effective as of the date of this Lease; provided, however, prior to the
expiration of the Existing Lease, Tenant shall continue to lease the Premises
pursuant to the terms and provisions of the Existing Lease; provided further,
however, the construction of any and all improvements in the Premises prior to
and after the expiration of the Existing Lease shall be governed the terms and
provisions of this Lease, including without limitation the Tenant Work Letter.
The term of this Lease (the “Lease Term”) shall be as set forth in Section 3.1
of the Summary, shall commence on the date set forth in Section 3.2 of the
Summary (the “Lease Commencement Date”), and shall terminate on the date set
forth in Section 3.3 of the Summary (the “Lease Expiration Date”) unless this
Lease is sooner terminated as hereinafter provided. For purposes of this Lease,
the term “Lease Year” shall mean each consecutive twelve (12) month period
during the Lease Term; provided that the last Lease Year shall end on the Lease
Expiration Date. At any time during the Lease Term, Landlord may deliver to
Tenant a notice in the form as set forth in Exhibit C, attached hereto, as a
confirmation only of the information set forth therein, which Tenant shall
execute and return to Landlord within ten (10) days of receipt thereof.

-11-

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

 

     2.2 Option Terms.
          2.2.1 Option Right. Landlord hereby grants the Original Tenant one
(1) option to extend the Lease Term for the entire Premises by a period of five
(5) years ( an “Option Term”). Such option shall be exercisable only by Notice
delivered by Tenant to Landlord as provided below, provided that, as of the date
of delivery of such Notice, Tenant is not in default under this Lease. Upon the
proper exercise of such option to extend, and provided that, as of the end of
the Lease Term, Tenant is not in default under this Lease (beyond any applicable
notice and cure periods), the Lease Term, as it applies to the entire Premises,
shall be extended for a period of five (5) years. The rights contained in this
Section 2.2 may only be exercised by the Original Tenant (and not any assignee,
sublessee or other transferee of the Original Tenant’s interest in this Lease)
if Original Tenant is in occupancy of the entire then-existing Premises.
          2.2.2 Option Rent. The Rent payable by Tenant during the Option Term
(the “Option Rent”) shall be equal to the Market Rent as set forth below, and
the Base Year shall be adjusted (with corresponding consideration to be given in
determining the Market Rent) to be the calendar year in which the Option Term
commences. For purposes of this Lease, the term “Market Rent” shall mean rent
(including additional rent and considering any “base year” or “expense stop”
applicable thereto, and also considering the fact that Tenant is not required to
pay a separate amount for parking), including all escalations, at which tenants,
as of the commencement of the Option Term, or the First Offer Commencement Date,
as applicable, are, pursuant to new or renewal transactions completed within the
eighteen (18) months prior to the first day of the Option Term (or, if
applicable, nine (9) months prior to the First Offer Commencement Date), leasing
non-sublease, non-encumbered space, comparable in size, location and quality to
the Premises or First Offer Space, as applicable, for a “Comparable Term,” as
that term is defined in this Section 2.2.2 (the “Comparable Deals”), which
comparable space is located in the “Comparable Buildings,” as that term is
defined in this Section 2.2.2, giving appropriate consideration to the annual
rental rates per rentable square foot (adjusting the base rent component of such
rate to reflect a net value after accounting for whether or not janitorial and
electricity expenses are directly paid by the tenant such as Tenant’s direct
janitorial and electricity payments provided for in Section 6.1 of this Lease),
the standard of measurement by which the rentable square footage is measured,
the ratio of rentable square feet to usable square feet, and taking into
consideration only, and granting only, the following concessions (provided that
the rent payable in Comparable Deals in which the terms of such Comparable Deals
are determined by use of a discounted fair market rate formula shall be
equitably increased in order that such Comparable Deals will not reflect a
discounted rate) (collectively, the “Rent Concessions”): (a) rental abatement
concessions, if any, being granted such tenants in connection with such
comparable spaces; (b) tenant improvements or allowances provided or to be
provided for such comparable space, taking into account the value of the
existing improvements in the Premises or First Offer Space, as applicable, such
value to be based upon the age, quality and layout of the improvements and the
extent to which the same could be utilized by general office users as contrasted
with this specific Tenant, (c) real estate brokerage commissions, if applicable,
paid by the landlord in connection with such comparable space, and (d) all other
reasonable monetary concessions, if any, being granted such tenants in
connection with such comparable space; provided, however, that in calculating
the Market Rent, no consideration shall be given to any period of rental
abatement, if any, granted to tenants in comparable transactions in connection
with the design, permitting and construction of tenant

-12-

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

 

improvements in such comparable spaces. The term “Comparable Term” shall refer
to the length of the lease term, without consideration of options to extend such
term, for the space in question. In addition, the determination of the Market
Rent shall include a determination as to whether, and if so to what extent,
Tenant must provide Landlord with financial security, such as a letter of
credit, for Tenant’s rent obligations during any Option Term or in connection
with Tenant’s lease of the First Offer Space; provided, however, in no event
shall Landlord require additional security from Tenant in an amount that exceeds
Landlord’s actual out-of-pockets costs (e.g., leasing commissions and/or
improvement allowances) in connection with Tenant ‘s lease of the Premises
during the Option Term or Tenant’s lease of the First Offer Space, as
applicable; provided further, however, if Tenant’s “Net Worth,” as that term is
defined in Section 14.8 of this Lease, below, as of the commencement of the
Option Term or the First Offer Commencement Date, as applicable, is equal to or
greater than the Net Worth of the Original Tenant on the date of this Lease,
then Tenant shall not be required to provide Landlord with any additional
financial security for Tenant’s rent obligations during the Option Term or
Tenant’s lease of the First Offer Space, as applicable. Such determination shall
be made by reviewing the extent of financial security then generally being
imposed in Comparable Deals upon tenants of comparable Net Worth to the then
existing Net Worth of Tenant (with appropriate adjustments to account for
differences in the then-existing financial condition of Tenant and such other
tenants) If in determining the Market Rent in connection with the Option Term or
in connection with Tenant’s lease of the First Offer Space, Tenant is entitled
to a tenant improvement or comparable allowance for the improvement of the
Premises or First Offer Space, as applicable (the “TI Allowance”), Landlord may,
at Landlord’s sole option, elect any or a portion of the following: (A) to grant
some or all of the TI Allowance to Tenant in the form as described above (i.e.,
as an improvement allowance), and/or (B) to reduce the rental rate component of
the Market Rent to be an effective rental rate which takes into consideration
the fact that Tenant will not receive the total dollar value of such excess TI
Allowance (in which case the TI Allowance evidenced in the effective rental rate
shall not be granted to Tenant). The term “Comparable Buildings” shall mean the
Buildings, the other building in the Project, and the other first-class office
buildings which are comparable to the Buildings in terms of age (based upon the
date of completion of construction or major renovation as to the building
containing the portion of the Premises in question), quality of construction,
level of services and amenities, size and appearance, and are located within the
area bounded by De Soto Avenue as the Eastern border, Highway 23 as the Western
border, a line parallel to, and one-half mile South of, Highway 101 as the
Southern border, and a line parallel to, and one-half mile North of, Highway 101
as the Northern border (the (“Comparable Area”).
          2.2.3 Exercise of Option. The option contained in this Section 2.2
shall be exercised by Tenant, if at all, only in the manner set forth in this
Section 2.2.3. Tenant shall deliver notice (the “Exercise Notice”) to Landlord
not more than eighteen (18) months nor less than twelve (12) months prior to the
expiration of the Lease Term, stating that Tenant is irrevocably exercising its
option.
          2.2.4 Determination of Market Rent. In the event Tenant timely and
appropriately exercises an option to extend the Lease Term, or if Tenant
irrevocably exercises its right of first offer with respect to the entire space
described in a First Offer Notice and rejects the First Offer Rent and other
economic terms set forth in the First Offer Notice, then Landlord shall (i) with
respect to Market Rent for the Premises during the Option Term, notify Tenant of

-13-

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

 

Landlord’s determination of the Market Rent on or before the Lease Expiration
Date, and (ii) with respect to Tenant’s lease of First Offer Space, notify
Tenant of Landlord determination of the Market Rent applicable to the First
Offer Space (which may or may not be the same as the First Offer Rent set forth
in the First Offer Notice) on or before the First Offer Commencement Date. If
Tenant, on or before the date which is thirty (30) days following the date upon
which Tenant receives Landlord’s determination of the applicable Market Rent
pursuant to the immediately preceding sentence, in good faith objects to
Landlord’s determination of the Market Rent, then Landlord and Tenant shall
attempt to agree upon the Market Rent using their best good-faith efforts. If
Landlord and Tenant fail to reach agreement within thirty (30) days following
Tenant’s objection to the Market Rent (the “Outside Agreement Date”), then each
party shall make a separate determination of the Market Rent within five
(5) days, and such determinations shall be submitted to arbitration in
accordance with Sections 2.2.4.1 through 2.2.4.7, below.
               2.2.4.1 Landlord and Tenant shall each appoint one arbitrator who
shall by profession be a real estate broker, appraiser or attorney who shall
have been active over the five (5) year period ending on the date of such
appointment in the leasing (or appraisal, as the case may be) of first-class
office properties in the Comparable Area. The determination of the arbitrators
shall be limited solely to the issue of whether Landlord’s or Tenant’s submitted
Market Rent, is the closest to the actual Market Rent as determined by the
arbitrators, taking into account the requirements of Section 2.2.2 of this
Lease. Each such arbitrator shall be appointed within fifteen (15) days after
the applicable Outside Agreement Date. Landlord and Tenant may consult with
their selected arbitrators prior to appointment and may select an arbitrator who
is favorable to their respective positions. The arbitrators so selected by
Landlord and Tenant shall be deemed (“Advocate Arbitrators”).
               2.2.4.2 The two Advocate Arbitrators so appointed shall be
specifically required pursuant to an engagement letter within ten (10) days of
the date of the appointment of the last appointed Advocate Arbitrator agree upon
and appoint a third arbitrator (“Neutral Arbitrator”) who shall be qualified
under the same criteria set forth hereinabove for qualification of the two
Advocate Arbitrators except that neither the Landlord or Tenant or either
party’s Advocate Arbitrator may, directly or indirectly, consult with the
Neutral Arbitrator prior to subsequent to his or her appearance. The Neutral
Arbitrator shall be retained via an engagement letter jointly prepared by
Landlord’s counsel and Tenant’s counsel.
               2.2.4.3 The three arbitrators shall within thirty (30) days of
the appointment of the Neutral Arbitrator reach a decision as to Market Rent and
determine whether the Landlord’s or Tenant’s determination of Market Rent as
submitted pursuant to Section 2.2.4 of this Lease is closest to Market Rent as
determined by the arbitrators and simultaneously publish a ruling (“Award”)
indicating whether Landlord’s or Tenant’s submitted Market Rent is closest to
the Market Rent as determined by the arbitrators. Following notification of the
Award, the Landlord’s or Tenant’s submitted Market Rent determination, whichever
is selected by the arbitrators as being closest to Market rent shall become the
then applicable Market Rent.
               2.2.4.4 The Award issued by the majority of the three arbitrators
shall be binding upon Landlord and Tenant.

-14-

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

 

               2.2.4.5 If either Landlord or Tenant fail to appoint an Advocate
Arbitrator within fifteen (15) days after the applicable Outside Agreement Date,
either party may petition the presiding judge of the Superior Court of Los
Angeles County to appoint such Advocate Arbitrator subject to the criteria in
Section 2.2.4.1 of this Lease, or if he or she refuses to act, either party may
petition any judge having jurisdiction over the parties to appoint such Advocate
Arbitrator.
               2.2.4.6 If the two Advocate Arbitrators fail to agree upon and
appoint the Neutral Arbitrator, then either party may petition the presiding
judge of the Superior Court of Los Angeles County to appoint the Neutral
Arbitrator, subject to criteria in Section 2.2.4.1 of this Lease, or if he or
she refuses to act, either party may petition any judge having jurisdiction over
the parties to appoint such arbitrator.
               2.2.4.7 The cost of arbitration shall be paid by Landlord and
Tenant equally.
               2.2.4.8 In the event that the Market Rent shall not have been
determined pursuant to the terms hereof prior to the commencement of the Option
Term, or prior to the First Offer Commencement Date, as applicable, then Tenant
shall be required to pay the Market Rent initially provided by Landlord to
Tenant, and upon the final determination of the Market Rent, the payments made
by Tenant shall be reconciled with the actual amounts of Market Rent due, and
the appropriate party shall make any corresponding payment to the other party.
ARTICLE 3
BASE RENT; BASE RENT ABATEMENT
     3.1 Base Rent. Tenant shall pay, without prior notice or demand, to
Landlord or Landlord’s agent at the management office of the Project, or, at
Landlord’s option, at such other place as Landlord may from time to time
designate in writing, by a check for currency which, at the time of payment, is
legal tender for private or public debts in the United States of America, base
rent (“Base Rent”) as set forth in Section 4 of the Summary, payable in equal
monthly installments as set forth in Section 4 of the Summary in advance on or
before the first day of each and every calendar month during the Lease Term,
without any setoff or deduction whatsoever, except as expressly permitted in
this Lease. If any Rent payment date (including the Lease Commencement Date)
falls on a day of the month other than the first day of such month or if any
payment of Rent is for a period which is shorter than one month, the Rent for
any fractional month shall be prorated on a daily basis for the period from the
date such payment is due to the end of such calendar month or to the end of the
Lease Term at a rate per day which is equal to 1/365 of the applicable annual
Rent. All other payments or adjustments required to be made under the TCCs of
this Lease that require proration on a time basis shall be prorated on the same
basis.
     3.2 Base Rent Abatement. Notwithstanding the terms of Section 3.1, above,
provided that Tenant is not in default of this Lease or the Existing Lease,
after expiration of any applicable notice and cure periods expressly set forth
in this Lease or the Existing Lease, as applicable, then commencing on
October 1, 2007, Landlord shall apply an amount equal to Two

-15-

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

 

Hundred Ninety-Two Thousand Seven Hundred Six and 52/100 Dollars ($292,706.52)
(the “Rent Abatement Amount”) against Tenant’s obligation to pay Base Rent
otherwise attributable to the Premises under the Existing Lease until such Rent
Abatement Amount has been fully applied.
ARTICLE 4
ADDITIONAL RENT
     4.1 General Terms. In addition to paying the Base Rent specified in
Article 3 of this Lease, Tenant shall pay “Tenant’s Share” of the annual “Direct
Expenses,” as those terms are defined in Sections 4.2.6 and 4.2.2, respectively,
of this Lease, which are in excess of the amount of Direct Expenses applicable
to the “Base Year,” as that term is defined in Section 4.2.1, below; provided,
however, that in no event shall any decrease in Direct Expenses for any Expense
Year below Direct Expenses for the Base Year entitle Tenant to any decrease in
Base Rent or any credit against sums due under this Lease; provided further,
however, with respect to that portion of Direct Expenses which consist of
“Facilities Expenses,” as that term is defined in Section 4.8 of this Lease,
below, Tenant shall pay “Tenant’s Facilities Share,” as that term is defined in
Section 4.9 of this Lease, below, of such Facilities Expenses. Such payments by
Tenant, together with any and all other amounts payable by Tenant to Landlord
pursuant to the TCCs of this Lease, are hereinafter collectively referred to as
the “Additional Rent,” and the Base Rent and the Additional Rent are herein
collectively referred to as “Rent.” All amounts due under this Article 4 as
Additional Rent shall be payable for the same periods and in the same manner as
the Base Rent; provided, however, the parties hereby acknowledge that the first
monthly installment of Tenant’s Share of any “Estimated Excess,” as that term is
set forth in, and pursuant to the terms and conditions of, Section 4.4.2 of this
Lease, shall first be due and payable for the calendar month occurring
immediately following the expiration of the Base Year. Without limitation on
other obligations of Tenant which survive the expiration of the Lease Term, the
obligations of Tenant to pay the Additional Rent provided for in this Article 4
shall survive the expiration of the Lease Term.
     4.2 Definitions of Key Terms Relating to Additional Rent. As used in this
Article 4, the following terms shall have the meanings hereinafter set forth:
          4.2.1 “Base Year” shall mean the period set forth in Section 5 of the
Summary.
          4.2.2 “Direct Expenses” shall mean “Operating Expenses,” “Tax
Expenses,” and “Facilities Expenses.”
          4.2.3 “Expense Year” shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires, provided that Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and, in the event of any such change, Tenant’s Share of Direct
Expenses shall be equitably adjusted for any Expense Year involved in any such
change.

-16-

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

 

          4.2.4 “Operating Expenses” shall mean all expenses, costs and amounts
of every kind and nature which Landlord pays or accrues during any Expense Year
because of or in connection with the ownership, management, maintenance,
security, repair, replacement, restoration or operation of the Project, or any
portion thereof. Without limiting the generality of the foregoing, Operating
Expenses shall specifically include any and all of the following: (i) the cost
of supplying all utilities (not including electricity consumed by Tenant in the
Premises or for Tenant’s HVAC System or otherwise), the cost of operating,
repairing, maintaining, and renovating the utility, telephone, mechanical,
sanitary, storm drainage, and elevator systems, and the cost of maintenance and
service contracts in connection therewith; (ii) the cost of licenses,
certificates, permits and inspections and the cost of contesting any
governmental enactments which may affect Operating Expenses, and the costs
incurred in connection with a governmentally mandated transportation system
management program or similar program; (iii) the cost of all insurance carried
by Landlord in connection with the Project; (iv) the cost of landscaping,
relamping, and all supplies, tools, equipment and materials used in the
operation, repair and maintenance of the Project, or any portion thereof;
(v) costs incurred in connection with the parking areas servicing the Project;
(vi) fees and other costs, including management fees, consulting fees, legal
fees and accounting fees, of all contractors and consultants in connection with
the management, operation, maintenance and repair of the Project; (vii) payments
under any equipment rental agreements and the fair rental value of any
management office space and/or for any Project space occupied by “Common Area
Facilities” (i.e., any cafeterias, fitness centers and/or other amenities
located in the Project); (viii) wages, salaries and other compensation and
benefits, including taxes levied thereon, of all persons (other than persons
generally considered to be higher in rank than the position of Project manager)
engaged in the operation, maintenance and security of the Project; (ix) costs
under any instrument pertaining to the sharing of costs by the Project;
(x) operation, repair, maintenance and replacement of all systems and equipment
and components thereof of the Buildings; (xi) the cost of janitorial, alarm,
security and other services, replacement of wall and floor coverings, ceiling
tiles and fixtures in common areas, maintenance and replacement of curbs and
walkways, repair to roofs and re-roofing; (xii) amortization (including
reasonable interest on the unamortized cost) of the cost of acquiring or the
rental expense of personal property used in the maintenance, operation and
repair of the Project, or any portion thereof; (xiii) the cost of capital
improvements or other costs incurred in connection with the Project (A) which
are reasonably intended to effect economies in the operation or maintenance of
the Project, or any portion thereof, (B) that are required to comply with
present or anticipated conservation programs, (C) which are replacements or
modifications of nonstructural items located in the Common Areas required to
keep the Common Areas in good order or condition, or (D) that are required under
any governmental law or regulation by a federal, state or local governmental
agency, except for capital repairs, replacements or other improvements to remedy
a condition existing prior to the Lease Commencement Date which an applicable
governmental authority, if it had knowledge of such condition prior to the Lease
Commencement Date, would have then required to be remedied pursuant to
then-current governmental laws or regulations in their form existing as of the
Lease Commencement Date and pursuant to the then-current interpretation of such
governmental laws or regulations by the applicable governmental authority as of
the Lease Commencement Date; provided, however, that any capital expenditure
shall be amortized with interest over its useful life as Landlord shall
reasonably determine; (xiv) costs, fees, charges or assessments imposed by, or
resulting from any mandate imposed on Landlord by, any federal, state or local
government

-17-

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

 

for fire and police protection, trash removal, community services, or other
services which do not constitute “Tax Expenses” as that term is defined in
Section 4.2.5, below; and (xv) payments under any easement, license, operating
agreement, declaration, restrictive covenant, or instrument pertaining to the
sharing of costs by the Buildings. Notwithstanding the foregoing, for purposes
of this Lease, Operating Expenses shall not, however, include:
               (a) costs, including marketing costs, legal fees, space planners’
fees, advertising and promotional expenses, and brokerage fees incurred in
connection with the original construction or development, or original or future
leasing of the Project, and costs, including permit, license and inspection
costs, incurred with respect to the installation of tenant improvements made for
new tenants initially occupying space in the Project after the Lease
Commencement Date or incurred in renovating or otherwise improving, decorating,
painting or redecorating vacant space for tenants or other occupants of the
Project (excluding, however, such costs relating to any common areas of the
Project or parking facilities);
               (b) except as set forth in items (xii), (xiii), and (xiv) above,
depreciation, interest and principal payments on mortgages and other debt costs,
if any, penalties and interest, costs of capital repairs and alterations, and
costs of capital improvements and equipment;
               (c) costs for which the Landlord is reimbursed by any tenant or
occupant of the Project or by insurance by its carrier or any tenant’s carrier
or by anyone else, and electric power costs for which any tenant directly
contracts with the local public service company;
               (d) any bad debt loss, rent loss, or reserves for bad debts or
rent loss;
               (e) costs associated with the operation of the business of the
partnership or entity which constitutes the Landlord, as the same are
distinguished from the costs of operation of the Project (which shall
specifically include, but not be limited to, accounting costs associated with
the operation of the Project). Costs associated with the operation of the
business of the partnership or entity which constitutes the Landlord include
costs of partnership accounting and legal matters, costs of defending any
lawsuits with any mortgagee (except as the actions of the Tenant may be in
issue), costs of selling, syndicating, financing, mortgaging or hypothecating
any of the Landlord’s interest in the Project, and costs incurred in connection
with any disputes between Landlord and its employees, between Landlord and
Project management, or between Landlord and other tenants or occupants, and
Landlord’s general corporate overhead and general and administrative expenses;
               (f) the wages and benefits of any employee who does not devote
substantially all of his or her employed time to the Project unless such wages
and benefits are prorated to reflect time spent on operating and managing the
Project vis-a-vis time spent on matters unrelated to operating and managing the
Project; provided, that in no event shall Operating Expenses for purposes of
this Lease include wages and/or benefits attributable to personnel above the
level of Project manager;
               (g) amount paid as ground rental for the Project by the Landlord;

-18-

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

 

               (h) overhead and profit increment paid to the Landlord or to
subsidiaries or affiliates of the Landlord for services in the Project to the
extent the same exceeds the costs of such services rendered by qualified,
first-class unaffiliated third parties on a competitive basis;
               (i) any compensation paid to clerks, attendants or other persons
in commercial concessions operated by the Landlord, provided that any
compensation paid to any concierge at the Project shall be includable as an
Operating Expense;
               (j) rentals and other related expenses incurred in leasing air
conditioning systems, elevators or other equipment which if purchased the cost
of which would be excluded from Operating Expenses as a capital cost, except
equipment not affixed to the Project which is used in providing janitorial or
similar services and, further excepting from this exclusion such equipment
rented or leased to remedy or ameliorate an emergency condition in the Project ;
               (k) all items and services for which Tenant or any other tenant
in the Project reimburses Landlord or which Landlord provides selectively to one
or more tenants (other than Tenant) without reimbursement;
               (l) costs, other than those incurred in ordinary maintenance and
repair, for sculpture, paintings, fountains or other objects of art;
               (m) any costs expressly excluded from Operating Expenses
elsewhere in this Lease;
               (n) rent for any office space occupied by Project management
personnel to the extent the size or rental rate of such office space exceeds the
size or fair market rental value of office space occupied by management
personnel of the Comparable Buildings in the vicinity of the Building, with
adjustment where appropriate for the size of the applicable project;
               (o) costs to the extent arising from the gross negligence or
willful misconduct of Landlord or its agents, employees, vendors, contractors,
or providers of materials or services;
               (p) costs incurred to comply with laws relating to the removal of
hazardous material (as defined under applicable law) which was in existence in
the Building or on the Project prior to the Lease Commencement Date, and was of
such a nature that a federal, State or municipal governmental authority, if it
had then had knowledge of the presence of such hazardous material, in the state,
and under the conditions that it then existed in the Building or on the Project,
would have then required the removal of such hazardous material or other
remedial or containment action with respect thereto; and costs incurred to
remove, remedy, contain, or treat hazardous material, which hazardous material
is brought into the Building or onto the Project after the date hereof by
Landlord or any other tenant of the Project and is of such a nature, at that
time, that a federal, State or municipal governmental authority, if it had then
had knowledge of the presence of such hazardous material, in the state, and
under the conditions, that

-19-

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

 

it then exists in the Building or on the Project, would have then required the
removal of such hazardous material or other remedial or containment action with
respect thereto;
               (q) costs arising from Landlord’s charitable or political
contributions;
               (r) any gift provided to any entity whatsoever, including, but
not limited to, Tenant, other tenants, employees, vendors, contractors,
prospective tenants and agents;
               (s) any costs covered by any warranty, rebate, guarantee or
service contract which are actually collected by Landlord (which shall not
prohibit Landlord from passing through the costs of any such warranty, rebate,
guarantee or service contract if otherwise includable in Operating Expenses);
               (t) any costs included as a Tax Expense pursuant to Section 4.2.5
below;
               (u) penalties, fines, or fees incurred by Landlord due to
Landlord’s violation of any federal, state or local law, statute or ordinance,
or any rule, regulation, judgment or decree of any governmental rule or
authority;
               (v) rentals and other related expenses incurred in leasing air
conditioning systems, elevators or other equipment which if purchased the cost
of which would be excluded from Operating Expenses as a capital cost, except
equipment not affixed to the Project which is used in providing janitorial or
similar services and, further excepting from this exclusion such equipment
rented or leased to remedy or ameliorate an emergency condition in the Project;
               (w) costs incurred by Landlord for the repair of damage to the
Building, but only to the extent that Landlord is reimbursed by insurance
proceeds, and, except as set forth in items (xii) and (xiii) above, the costs of
all capital repairs, regardless of whether such repairs are covered by
insurance;
               (x) advertising and promotional expenditures, and costs of signs
in or on the Building identifying the owner of the Building or other tenants’
signs;
               (y) penalties, fines, or fees incurred by Landlord in connection
with Landlord’s failure to upgrade the Building to comply with disability, life,
fire and safety codes, ordinances, statutes, or other laws in effect prior to
the Lease Commencement Date, including, without limitation, the Americans with
Disabilities Act; and
               (z) any entertainment, dining or travel expenses for any purpose.
     If Landlord is not furnishing any particular work or service (the cost of
which, if performed by Landlord, would be included in Operating Expenses) to a
tenant who has undertaken to perform such work or service in lieu of the
performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord

-20-

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

 

if it had at its own expense furnished such work or service to such tenant. If
any Building is not at least ninety-five percent (95%) occupied during all or a
portion of the Base Year or any Expense Year, Landlord shall make an appropriate
adjustment in accordance with sound real estate management and accounting
practices to the variable components of Operating Expenses (i.e., those
components which vary based upon occupancy) for such year to determine the
amount of Operating Expenses that would have been incurred had such Building
been ninety-five percent (95%) occupied; and the amount so determined shall be
deemed to have been the amount of Operating Expenses for such year. Operating
Expenses for the Base Year shall not include market-wide cost increases
(including utility rate increases) due to extraordinary circumstances,
including, but not limited to, Force Majeure, boycotts, strikes, conservation
surcharges, embargoes or shortages, or amortized costs relating to capital
improvements. In no event shall the components of Direct Expenses for any
Expense Year related to Project utility, services, or insurance costs be less
than the components of Direct Expenses related to Project utility, services, or
insurance costs in the Base Year. Landlord shall not (1) make a profit by
charging items to Operating Expenses that are otherwise also charged separately
to tenants (including Tenant) of the Project, and (2) subject to Landlord’s
right to adjust the components of Operating Expenses described above in this
paragraph, collect Operating Expenses from Tenant and all other tenants in the
Project in an amount in excess of what Landlord incurs for the items included in
Operating Expenses.
          4.2.5 Taxes.
               4.2.5.1 “Tax Expenses” shall mean all federal, state, county, or
local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Project, or
any portion thereof), which shall be paid or accrued during any Expense Year
(without regard to any different fiscal year used by such governmental or
municipal authority) because of or in connection with the ownership, leasing and
operation of the Project, or any portion thereof.
               4.2.5.2 Tax Expenses shall include, without limitation: (i) Any
tax on the rent, right to rent or other income from the Project, or any portion
thereof, or as against the business of leasing the Project, or any portion
thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election (“Proposition 13”)
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Tax Expenses shall also include any
governmental or private assessments or the Project’s contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or

-21-

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

 

improving the quality of services and amenities normally provided by
governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable
to or measured by the area of the Premises or the Rent payable hereunder,
including, without limitation, any business or gross income tax or excise tax
with respect to the receipt of such rent, or upon or with respect to the
possession, leasing, operating, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or any portion thereof; and (iv) Any
assessment, tax, fee, levy or charge, upon this transaction or any document to
which Tenant is a party, creating or transferring an interest or an estate in
the Premises. All assessments which can be paid by Landlord in installments,
shall be paid by Landlord in the maximum number of installments permitted by law
(except to the extent inconsistent with the general practice of landlords of the
Comparable Buildings) and shall be included as Tax Expenses in the year in which
the installment is actually paid.
               4.2.5.3 Any costs and expenses (including, without limitation,
reasonable attorneys’ fees) incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are paid. Except as set forth in Section 4.2.5.4, below, refunds of Tax
Expenses shall be credited against Tax Expenses and refunded to Tenant
regardless of when received, based on the Expense Year to which the refund is
applicable, provided that in no event shall the amount to be refunded to Tenant
for any such Expense Year exceed the total amount paid by Tenant as Additional
Rent under this Article 4 for such Expense Year. If Tax Expenses for any period
during the Lease Term or any extension thereof are increased after payment
thereof for any reason, including, without limitation, error or reassessment by
applicable governmental or municipal authorities, Tenant shall pay Landlord upon
demand Tenant’s Share of any such increased Tax Expenses included by Landlord as
Building Tax Expenses pursuant to the TCCs of this Lease. Notwithstanding
anything to the contrary contained in this Section 4.2.5, there shall be
excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift
taxes, capital stock taxes, inheritance and succession taxes, estate taxes,
federal and state income taxes (including such income taxes on income from the
Project), and other taxes to the extent applicable to Landlord’s general or net
income (as opposed to rents, receipts or income attributable to operations at
the Project), (ii) any items included as Operating Expenses, (iii) any items
paid by Tenant under Section 4.5 of this Lease, and (iv) tax penalties incurred
as a result of Landlord’s failure to make payments and/or to file any tax or
informational returns when due. If the property tax assessment for the Project
(or any portion thereof) (or Tax Expenses) for the Base Year or any Expense Year
does not reflect an assessment (or Tax Expenses) for a one hundred percent
(100%) leased, completed and occupied project (such that existing or future
leasing, tenant improvements and/or occupancy may result in an increased
assessment and/or increased Tax Expenses), Tax Expenses shall be adjusted, on a
basis consistent with sound real estate accounting principles, to reflect an
assessment for (and Tax Expenses for) a one hundred percent (100%) leased,
completed and occupied project.
               4.2.5.4 Notwithstanding anything to the contrary set forth in
this Lease, the amount of Tax Expenses for the Base Year and any Expense Year
shall be calculated without taking into account any decreases in real estate
taxes obtained in connection with Proposition 8, and, therefore, the Tax
Expenses in the Base Year and/or an Expense Year may be greater than those
actually incurred by Landlord, but shall, nonetheless, be the Tax Expenses due
under this Lease; provided that (i) any costs and expenses incurred by Landlord
in securing any Proposition 8 reduction shall not be included in Direct Expenses
for purposes of this Lease, and

-22-

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

 

(ii) tax refunds under Proposition 8 shall not be deducted from Tax Expenses,
but rather shall be the sole property of Landlord. Landlord and Tenant
acknowledge that this Section 4.2.5.4 is not intended to in any way affect
(A) the inclusion in Tax Expenses of the statutory two percent (2.0%) annual
increase in Tax Expenses (as such statutory increase may be modified by
subsequent legislation), or (B) the inclusion or exclusion of Tax Expenses
pursuant to the terms of Proposition 13, which shall be governed pursuant to the
terms of Sections 4.2.5.1 through 4.2.5.3, above and Section 4.6, below.
Notwithstanding the foregoing, upon a “Reassessment,” as that term is defined in
Section 4.6 below, occurring after the Base Year, the component of Tax Expenses
for the Base Year which is attributable to the assessed value of the Project
under Proposition 13 prior to the Reassessment (without taking into account any
Proposition 8 reductions) shall be reduced, if at all, for the purposes of
comparison to all subsequent Expense Years (commencing with the Expense Year in
which the Reassessment takes place) to an amount equal to the real estate taxes
based upon such Reassessment.
          4.2.6 “Tenant’s Share” shall mean (i) with respect to the Building F
Premises, the percentage set forth in Section 6.1 of the Summary, (ii) with
respect to the Building A Premises, the percentage set forth in Section 6.2 of
the Summary, and (iii) with respect to the Building C Premises, the percentage
set forth in Section 6.3 of the Summary.
     4.3 Allocation of Direct Expenses.
          4.3.1 Method of Allocation. The parties acknowledge that the Buildings
are part of a multi-building project and that certain costs and expenses
incurred in connection with the Project (i.e., the Direct Expenses which are not
solely attributable to a specific building of the Project) should be shared
between all of the tenants of Project. Accordingly, as set forth in Section 4.2
above, Direct Expenses (which consists of Operating Expenses and Tax Expenses)
are determined annually for each Building, as well as for the Project as a
whole. Thereafter, a portion of the Direct Expenses attributable to the Project
as a whole, and not solely attributable to a specific building, which portion
shall be determined by Landlord on an equitable basis based on the respective
rentable areas of the buildings in the Project, shall be allocated to each
Building (as opposed to any other building in the Project) and such portion
shall be the Direct Expenses for such Building for purposes of this Lease. Such
portion of Direct Expenses allocated to each Building shall include all Direct
Expenses attributable solely to such Building and an equitable portion of the
Direct Expenses attributable to the Project as a whole.
          4.3.2 Cost Pools. Landlord shall have the right, from time to time, to
equitably allocate some or all of the Direct Expenses for the Project among
different portions or occupants of the Project (the “Cost Pools”), in Landlord’s
discretion. Such Cost Pools may include, but shall not be limited to, the office
space tenants of a building of the Project or of the Project, and the retail
space tenants of a building of the Project or of the Project. The Direct
Expenses within each such Cost Pool shall be allocated and charged to the
tenants within such Cost Pool in an equitable manner.
     4.4 Calculation and Payment of Additional Rent. If for any Expense Year
ending or commencing within the Lease Term, Tenant’s Share of Direct Expenses
for such Expense Year exceeds Tenant’s Share of Direct Expenses applicable to
the Base Year, then Tenant shall pay to Landlord, in the manner set forth in
Section 4.4.1, below, and as Additional Rent, an

-23-

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

 

amount equal to the excess (the “Excess”); provided, however, Landlord hereby
agrees that, for any Lease Year following the Base Year, “Controllable
Expenses,” as that term is defined in this Section 4.4, below, shall never be
increased to an amount in excess of the amount that such Controllable Expenses
would currently be had they increased, from the initial amount for such
Controllable Expenses set forth in the Base Year, at a compounded rate of five
percent (5%) per Expense Year. For purposes of this Lease, “Controllable
Expenses” shall mean (i) the fee charged by the property manager of the Project,
including payment of the property manager’s administrative and executive
salaries, (ii) the amount of rent charged to Operating Expenses as rent for the
Project management office, and (iii) the costs of janitorial service contracts,
security service contracts, landscaping contracts, HVAC maintenance contracts,
elevator maintenance contracts, and life safety maintenance contracts.
Furthermore, notwithstanding anything contained in this paragraph to the
contrary, Controllable Expenses shall not include (A) the cost of union labor,
including labor which is not union as of the date of this Lease but which
unionizes after the date of this Lease, (B) market-wide labor-rate increases due
to extraordinary circumstances, including without limitation, boycotts and
strikes, (C) costs incurred due to an event of “Force Majeure,” as that term is
defined in Section 29.16 of this Lease, and (D) costs incurred to comply with
“Applicable Laws,” as that term is defined in Article 24 of this Lease.
          4.4.1 Statement of Actual Building Direct Expenses and Payment by
Tenant. Landlord shall give to Tenant following the end of each Expense Year, a
statement (the “Statement”) which shall state in general major categories the
Building Direct Expenses incurred or accrued for the Base Year or such preceding
Expense Year, as applicable, and which shall indicate the amount of the Excess.
Landlord shall use commercially reasonable efforts to deliver such Statement to
Tenant on or before May 1 following the end of the Expense Year to which such
Statement relates. Upon receipt of the Statement for each Expense Year
commencing or ending during the Lease Term, if an Excess is present, Tenant
shall pay, within thirty (30) days after receipt of the Statement, the full
amount of the Excess for such Expense Year, less the amounts, if any, paid
during such Expense Year as “Estimated Excess,” as that term is defined in
Section 4.4.2, below, and if Tenant paid more as Estimated Excess than the
actual Excess, Tenant shall receive a credit in the amount of Tenant’s
overpayment against Rent next due under this Lease. The failure of Landlord to
timely furnish the Statement for any Expense Year shall not prejudice Landlord
or Tenant from enforcing its rights under this Article 4. Even though the Lease
Term has expired and Tenant has vacated the Premises, when the final
determination is made of Tenant’s Share of Building Direct Expenses for the
Expense Year in which this Lease terminates, if an Excess is present, Tenant
shall, within thirty (30) days after receipt of the Statement, pay to Landlord
such amount, and if Tenant paid more as Estimated Excess than the actual Excess,
Landlord shall, within thirty (30) days, deliver a check payable to Tenant in
the amount of the overpayment. The provisions of this Section 4.4.1 shall
survive the expiration or earlier termination of the Lease Term. Notwithstanding
the immediately preceding sentence, Tenant shall not be responsible for Tenant’s
Share of any Building Direct Expenses attributable to any Expense Year which are
first billed to Tenant more than two (2) calendar years after the Lease
Expiration Date, provided that in any event Tenant shall be responsible for
Tenant’s Share of Direct Expenses levied by any governmental authority or by any
public utility companies at any time following the Lease Expiration Date which
are attributable to any Expense Year, and as to which Tenant is otherwise
responsible in accordance with the terms of this Lease.

-24-

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

 

          4.4.2 Statement of Estimated Building Direct Expenses. In addition,
Landlord shall give Tenant a yearly expense estimate statement (the “Estimate
Statement”) which shall set forth in general major categories Landlord’s
reasonable estimate (the “Estimate”) of what the total amount of Building Direct
Expenses for the then-current Expense Year shall be and the estimated excess
(the “Estimated Excess”) as calculated by comparing the Building Direct Expenses
for such Expense Year, which shall be based upon the Estimate, to the amount of
Building Direct Expenses for the Base Year. Landlord shall use commercially
reasonable efforts to deliver such Estimate Statement to Tenant on or before May
1 following the end of the Expense Year to which such Estimate Statement
relates. The failure of Landlord to timely furnish the Estimate Statement for
any Expense Year shall not preclude Landlord from enforcing its rights to
collect any Additional Rent under this Article 4, nor shall Landlord be
prohibited from revising any Estimate Statement or Estimated Excess theretofore
delivered to the extent necessary. Thereafter, Tenant shall pay, within thirty
(30) days after receipt of the Estimate Statement, a fraction of the Estimated
Excess for the then-current Expense Year (reduced by any amounts paid pursuant
to the second to last sentence of this Section 4.4.2). Such fraction shall have
as its numerator the number of months which have elapsed in such current Expense
Year, including the month of such payment, and twelve (12) as its denominator.
Until a new Estimate Statement is furnished (which Landlord shall have the right
to deliver to Tenant at any time), Tenant shall pay monthly, with the monthly
Base Rent installments, an amount equal to one-twelfth (1/12) of the total
Estimated Excess set forth in the previous Estimate Statement delivered by
Landlord to Tenant. Throughout the Lease Term Landlord shall maintain books and
records with respect to Building Direct Expenses in accordance with generally
accepted real estate accounting and management practices, consistently applied.
     4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.
          4.5.1 Tenant shall be liable for and shall pay before delinquency
(unless Tenant is contesting the same in good faith and in accordance with
applicable laws), taxes levied against Tenant’s equipment, furniture, fixtures
and any other personal property located in or about the Premises. If any such
taxes on Tenant’s equipment, furniture, fixtures and any other personal property
are levied against Landlord or Landlord’s property or if the assessed value of
Landlord’s property is increased by the inclusion therein of a value placed upon
such equipment, furniture, fixtures or any other personal property (and a
separate assessment is made therefor, or such amount is otherwise readily
discernable from the assessment) and if Landlord pays the taxes based upon such
increased assessment, which Landlord shall have the right to do regardless of
the validity thereof but only under proper protest if requested by Tenant,
Tenant shall, within ten (10) days after demand repay to Landlord the taxes so
levied against Landlord or the proportion of such taxes resulting from such
increase in the assessment, as the case may be.
          4.5.2 If the tenant improvements in the Premises, whether installed
and/or paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which tenant improvements
conforming to Landlord’s “building standard” in other space in the Buildings are
assessed, pursuant to a separate assessment, or provided that such increase in
taxes is otherwise readily discernable from the assessment, then the Tax
Expenses levied against Landlord or the property by reason of such excess
assessed valuation shall be deemed to be taxes

-25-

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

 

levied against personal property of Tenant and shall be governed by the
provisions of Section 4.5.1, above.
          4.5.3 Notwithstanding any contrary provision herein, Tenant shall pay
prior to delinquency (unless Tenant is contesting the same in good faith and in
accordance with applicable laws) any (i) rent tax or sales tax, service tax,
transfer tax or value added tax, or any other applicable tax on the rent or
services herein or otherwise respecting this Lease, (ii) taxes assessed upon or
with respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion of
the Project, including the Project parking facility; or (iii) taxes assessed
upon this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises.
     4.6 Tenant’s Payment of Certain Tax Expenses. Notwithstanding anything to
the contrary contained in this Lease, in the event that, at any time during the
first two (2) Lease Years, any sale, refinancing, or change in ownership of the
Building(s) or Project is consummated (specifically excluding, however, a change
in ownership to a lender resulting from a foreclosure or a deed-in-lieu of
foreclosure), and as a result thereof, and to the extent that in connection
therewith, the Building(s) or Project is reassessed (the “Reassessment”) for
real estate tax purposes by the appropriate governmental authority pursuant to
the terms of Proposition 13, then Landlord shall provide Tenant a one-time
credit against Base Rent, to be applied against the next installment of Base
Rent due and owing under this Lease, in an amount equal to One Hundred Fifty
Thousand Dollars ($150,000.00). The terms of this Section 4.6 shall be
applicable only to the first such Reassessment that occurs during the first two
(2) Lease Years and shall not be applicable to any subsequent Reassessment.
     4.7 Landlord’s Books and Records. Within one hundred eighty (180) days
after receipt of a Statement by Tenant (the “Review Period”), if Tenant disputes
the amount set forth in the Statement, Tenant’s employees or an independent
certified public accountant (which accountant is a member of a nationally or
regionally recognized accounting firm and is not paid on a contingent fee
basis), designated by Tenant, may, after reasonable notice to Landlord and at
reasonable times, inspect Landlord’s records at Landlord’s offices, provided
that Tenant is not then in default after expiration of all applicable cure
periods of any obligation under this Lease (including, but not limited to, the
payment of the amount in dispute). In connection with such inspection, Tenant
and Tenant’s agents (including Tenant’s accountant) must agree in advance to
follow Landlord’s reasonable rules and procedures regarding inspections of
Landlord’s records, and shall execute a commercially reasonable confidentiality
agreement regarding such inspection. Tenant’s failure to dispute the amounts set
forth in any Statement within the Review Period shall constitute a waiver of
Tenant’s right or ability to dispute the amounts set forth in such Statement. If
after such inspection, but within thirty (30) days after the Review Period,
Tenant notifies Landlord in writing that Tenant still disputes such amounts, a
certification as to the proper amount shall be made, at Tenant’s expense, by an
independent certified public accountant selected by Landlord and subject to
Tenant’s reasonable approval and who is a member of a nationally or regionally
recognized accounting firm, which certification shall be binding upon Landlord
and Tenant. Landlord shall cooperate in good faith with Tenant and the
accountant to show Tenant and the accountant the information upon which the
certification is to be based. However, if such certification by the accountant
proves that the Direct Expenses set

-26-

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

 

forth in the Statement were overstated by more than four percent (4%), then the
cost of the accountant and the cost of such certification shall be paid for by
Landlord. Promptly following the parties receipt of such certification, the
parties shall make such appropriate payments or reimbursements, as the case may
be, to each other, as are determined to be owing pursuant to such certification.
Tenant hereby acknowledges that Tenant’s sole right to inspect Landlord’s books
and records and to contest the amount of Direct Expenses payable by Tenant shall
be as set forth in this Section 4.7, and Tenant hereby waives any and all other
rights pursuant to applicable law to inspect such books and records and/or to
contest the amount of Direct Expenses payable by Tenant.
     4.8 “Facilities Expenses” shall mean all Operating Expenses and Tax
Expenses allocable to any and all Common Area Facilities.
     4.9 “Tenant’s Facilities Share” shall mean a percentage, which may be
expressed as a fraction, the numerator of which rentable square feet of the
Premises and the denominator shall be the total rentable square footage occupied
by tenants of the Project who also pay their respective share of Facilities
Expenses (i.e., unoccupied space in the Project and space occupied by tenant
that do not pay their share of Facilities Expenses shall be excluded).
ARTICLE 5
USE OF PREMISES
     5.1 Permitted Use. Tenant shall use the Premises solely for the Permitted
Use set forth in Section 7 of the Summary and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord’s sole discretion.
     5.2 Prohibited Uses. The uses prohibited under this Lease shall include,
without limitation, use of the Premises or a portion thereof for (i) offices of
any agency or bureau of the United States or any state or political subdivision
thereof (provided, however, that to the extent Landlord permits an office of any
agency or bureau of the United States or any state or political subdivision
thereof to be conducted at the Project, then Tenant shall be permitted to
conduct such uses in a comparable manner and to a comparable extent);
(ii) offices or agencies of any foreign governmental or political subdivision
thereof; (iii) offices of any health care professionals or service organization;
(iv) schools or other training facilities which are not ancillary to corporate,
executive or professional office use; (v) retail or restaurant uses; or (vi)
communications firms such as radio and/or television stations. Tenant shall not
allow occupancy density of use of the Premises which is greater than the average
density of the other tenants of the buildings in the Project. Tenant further
covenants and agrees that Tenant shall not use, or suffer or permit any person
or persons to use, the Premises or any part thereof for any use or purpose
contrary to the provisions of the Rules and Regulations set forth in Exhibit D,
attached hereto, or in violation of the laws of the United States of America,
the State of California, or the ordinances, regulations or requirements of the
local municipal or county governing body or other lawful authorities having
jurisdiction over the Project) including, without limitation, any such laws,
ordinances, regulations or requirements relating to hazardous materials or
substances, as those terms are defined by applicable laws now or hereafter in
effect; provided, however, Landlord shall not

-27-

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

 

enforce, change or modify the Rules and Regulations in a discriminatory manner
and Landlord agrees that the Rules and Regulations shall not be unreasonably
modified or enforced in a manner which will unreasonably interfere with the
normal and customary conduct of Tenant’s business. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way obstruct or
materially interfere with the rights of other tenants or occupants of the
Buildings, or injure or annoy them or use or allow the Premises to be used for
any improper, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises. Tenant shall
comply with all recorded covenants, conditions, and restrictions now or
hereafter affecting the Project.
     5.3 CC&Rs. Tenant shall comply with all recorded covenants, conditions, and
restrictions currently affecting the Project, to the extent Landlord provides a
copy of such recorded covenants, conditions, and restrictions to Tenant.
Additionally, Tenant acknowledges that the Project may be subject to any future
covenants, conditions, and restrictions (the “CC&Rs”) which Landlord, in
Landlord’s discretion, deems reasonably necessary or desirable, and Tenant
agrees that this Lease shall be subject and subordinate to such CC&Rs, provided
that (i) Landlord provides a copy of such CC&Rs to Tenant, and (ii) such CC&Rs
do not increase Tenant’s obligations, or decrease Tenant’s rights under the
terms of this Lease.
ARTICLE 6
SERVICES AND UTILITIES
     6.1 Standard Tenant Services. Landlord shall maintain and operate the
Buildings in a manner consistent with the Comparable Buildings, and shall keep
the Building Structure and Building Systems in condition and repair consistent
with the Comparable Buildings. Landlord hereby acknowledges that Tenant has
upgraded the electrical service supporting portions of the Premises and that
Tenant shall have the right to use such upgraded electrical service to its full
capacity. In addition Tenant may, with Landlord’s prior consent and in
accordance with the TCCs of Article 8 of the Lease, below, perform additional
upgrades to the electrical services supporting the Premises.
          Notwithstanding the foregoing, Tenant shall pay for all utilities
(including without limitation, electricity, gas, sewer and water) attributable
to its use of the entire Premises and shall also provide its own janitorial and
security services for the Buildings. Such utility use shall include electricity,
water, and gas use for lighting, incidental use and “HVAC,” as that term is
defined below. All such utility, janitorial and security payments shall be
excluded from Operating Expenses and shall be paid directly by Tenant prior to
the date on which the same are due to the utility provider janitorial company
and/or security company, as applicable. Landlord and Tenant hereby acknowledge
that each portion of the Premises is separately metered or submetered. Landlord
shall not be required to provide any services other than with regard to its
maintenance and repair obligation relating to the Building Structure and the
Common Areas.
     6.2 Overstandard Tenant Use; Tenant Maintained Building Systems; HVAC.
          6.2.1 Overstandard Tenant Use. The terms of this Section 6.2.1 shall
be applicable only to that portion of the Premises located in Building C. Tenant
shall not, without

-28-

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

 

Landlord’s prior written consent, use heat-generating machines, machines other
than normal fractional horsepower office machines, or equipment or lighting
other than Building standard lights in the Premises, which may affect the
temperature otherwise maintained by the air conditioning system or increase the
water normally furnished for the Premises by Landlord pursuant to the terms of
Section 6.1 of this Lease; provided, however, Landlord hereby consents to the
use of office machines installed in the Premises as of the date of this Lease.
If such consent is given, Landlord shall have the right to install supplementary
air conditioning units or other facilities in the Premises, including
supplementary or additional metering devices, and the cost thereof, including
the cost of installation, operation and maintenance, increased wear and tear on
existing equipment and other similar charges, shall be paid by Tenant to
Landlord upon billing by Landlord. Tenant’s use of electricity shall never
exceed the capacity of the feeders to the Project or the risers or wiring
installation, and subject to the terms of Section 29.32, below, Tenant shall not
install or use or permit the installation or use of any computer or electronic
data processing equipment in the Premises, without the prior written consent of
Landlord. If Tenant desires to use heat, ventilation or air conditioning during
hours other than those for which Landlord is obligated to supply such utilities
pursuant to the terms of Section 6.1 of this Lease, Tenant shall give Landlord
such prior notice, if any, as Landlord shall from time to time establish as
appropriate, of Tenant’s desired use in order to supply such utilities, and
Landlord shall supply such utilities to Tenant at such hourly cost to Tenant
(which shall be treated as Additional Rent) as Landlord shall from time to time
establish; provided, however, such hourly cost will be limited to an amount
reasonably determined by Landlord to reimburse Landlord for the excess wear and
tear on the applicable HVAC equipment (and shall expressly not include utility
charges since the Premises is separately metered).
          6.2.2 Tenant Maintained Building Systems; HVAC. The terms of this
Section 6.2.2 shall be applicable only to that portion of the Premises located
in Buildings A and F. Tenant shall, at Tenant’s sole cost and expense,
(i) maintain the Buildings’ mechanical, electrical, life safety, plumbing,
fire-sprinkler systems (except to the extent Landlord retains repair and
maintenance responsibility for life safety, plumbing and/or fire-sprinkler
systems), (ii) subject to limitations imposed by all governmental rules,
regulations and guidelines applicable thereto, maintain (itself or through a
service provider) heating and air conditioning to the Premises (“HVAC”), and
(iii) maintain the remaining portions of the Premises which are not part of the
“Building Structure,” as that term is set forth in Article 7 of this Lease, to
the extent such Building Structure is to be maintained and repaired by Landlord.
     6.3 Tenant Maintained Security. Tenant hereby acknowledges that Landlord
shall have no obligation to provide guard service or other security measures for
the benefit of the Premises, the Building or the Project. Any such security
measures for the benefit of the Premises, the Building or the Project shall be
provided by Tenant, at Tenant’s sole cost and expense. Tenant hereby assumes all
responsibility for the protection of Tenant and its agents, employees,
contractors, invitees and guests, and the property thereof, from acts of third
parties, including keeping doors locked and other means of entry to the Premises
closed.
     6.4 Tenant Maintenance Standards. All Tenant maintained Building Systems,
including HVAC, shall be maintained in accordance with manufacturer
specifications by Tenant in a commercially reasonable condition. Tenant shall
contract with a qualified, experienced professional third party service company
to perform its maintenance, repair and replacement

-29-

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

 

obligations hereunder with respect to the HVAC systems (which shall provide for
and include, without limitation, replacement of filters, oiling and lubricating
of machinery, parts replacement, adjustment of drive belts, oil changes and
other preventive maintenance, including maintenance of duct work, interior unit
drains and caulking of sheet metal, and recaulking of jacks and vents on an
as-needed basis). Each and every service contract shall be provided to Landlord
prior to finalization and Landlord shall have the reasonable right to approve or
disapprove of the form or contents of the service contracts or the persons or
entities to be engaged thereunder within five (5) business days after receiving
a copy of any such agreements from Tenant. In addition, upon request from
Landlord, Tenant shall provide to Landlord copies of any and all service
contracts and records of Tenant’s maintenance of such Building Systems. In
connection with Tenant’s HVAC maintenance obligations, Landlord shall provide
Tenant access to the roofs of the applicable Buildings. Tenant agrees that
Landlord shall not be liable for damages, by abatement of Rent (except as set
forth in Section 6.7, below) or otherwise, for failure to furnish or delay in
furnishing any service (including telephone and telecommunication services), or
for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by breakage, repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, or other fuel at the Building or
Project after reasonable effort to do so, by any riot or other dangerous
condition, emergency, accident or casualty whatsoever, by act or default of
Tenant or other parties, or by any other cause beyond Landlord’s reasonable
control; and such failures or delays or diminution shall never be deemed to
constitute an eviction or disturbance of Tenant’s use and possession of the
Premises or relieve Tenant from paying Rent (except as set forth in Section 6.7,
below) or performing any of its obligations under this Lease. Furthermore,
Landlord shall not be liable under any circumstances for a loss of, or injury
to, property or for injury to, or interference with, Tenant’s business,
including, without limitation, loss of profits, however occurring, through or in
connection with or incidental to a failure to furnish any of the services or
utilities as set forth in this Article 6.
     6.5 Tenant HVAC System. As a part of its Tenant Improvements (as defined in
Section 2.1 of the Tenant Work Letter) and subject to the terms of the Tenant
Work Letter, Tenant, at its sole expense, may install a supplemental HVAC system
on the roof of Building F, Building A and/or Building C, or otherwise in a
location in the Premises approved by Landlord, for the purpose of providing
supplemental air-conditioning to the Premises (the “Tenant HVAC System”). All
aspects of the Tenant HVAC System (including, but not limited to, any connection
to the Building’s chilled water system) shall be subject to Landlord’s prior
written approval, which approval shall not be unreasonably withheld, conditioned
or delayed, unless the structural aspects of the Building, the Building systems
and equipment, and/or the exterior appearance of the Building will be affected,
in which event Landlord’s approval may be withheld in Landlord’s sole and
absolute discretion. If required for such purpose, Tenant may connect into the
Building’s chilled water system, if and to the extent that Tenant’s use of
chilled water pursuant to this Section 6.5 will not materially, adversely affect
the chilled water system or the use thereof by other tenants of the Building, if
any, as determined by Landlord in Landlord’s sole discretion. If Tenant connects
into the Building’s chilled water system pursuant to the terms of the foregoing
sentence, then Landlord may install, at Tenant’s expense, a meter to measure
Tenant’s use of chilled water, and Tenant shall reimburse Landlord for Tenant’s
use of chilled water at the cost reasonably determined by Landlord. In addition,
Landlord shall, at Tenant’s sole cost and expense, separately meter the
electricity utilized by the Tenant HVAC System, and

-30-

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

 

Tenant shall reimburse Landlord for the cost as reasonably determined by
Landlord of all electricity utilized by the Tenant HVAC System. At Landlord’s
election prior to the expiration or earlier termination of this Lease, Tenant
shall leave the Tenant HVAC System in the Premises upon the expiration or
earlier termination of this Lease, in which event the Tenant HVAC System shall
be surrendered with the Premises upon the expiration or earlier termination of
this Lease, and Tenant shall thereafter have no further rights with respect
thereto. In the event that Landlord fails to elect to have the Tenant HVAC
System left in the Premises upon the expiration or earlier termination of this
Lease, then Tenant shall remove the Tenant HVAC System upon the expiration or
earlier termination of this Lease, and repair all damage to the Building
resulting from such removal, at Tenant’s sole cost and expense. Tenant shall be
solely responsible, at Tenant’s sole cost and expense, for the monitoring,
operation, repair, replacement, and removal (subject to the foregoing terms of
this Section 6.5), of the Tenant HVAC System, and in no event shall the Tenant
HVAC System interfere with Landlord’s operation of the Building. Any
reimbursements owing by Tenant to Landlord pursuant to this Section 6.5 shall be
payable by Tenant within ten (10) days of Tenant’s receipt of an invoice
therefor.
     6.6 Generator. Subject to the terms hereof and Applicable Laws, Tenant
shall have the right to install a generator (the “Generator”) in a location to
be mutually and reasonably agreed upon by Landlord and Tenant (the “Generator
Area”); provided, however, if the Generator Area is located in a project parking
area, then the number of surface reserved parking passes allocated to Tenant
shall be reduced by the number of whole and/or partial parking spaces used to
create the Generator Area. Tenant shall be responsible for any and all costs, if
any, incurred by Landlord as a result of or in connection with Tenant’s
installation, operation and/or use of the Generator. Subject to Landlord’s prior
approval of all plans and specifications, which approval shall not be
unreasonably withheld, and at Tenant’s sole cost and expense, Landlord shall
permit Tenant to install and maintain the Generator in the Generator Area, and
connections between the Generator and Landlord’s electrical systems in the
Building(s), all in compliance with all Applicable Laws. Such Generator shall be
used by Tenant only during (i) testing and regular maintenance, and (ii) the
period of any electrical power outage in the Building. Tenant shall be entitled
to operate the Generator and such connections to the Building for testing and
regular maintenance only upon notice to Landlord and at times reasonably
approved by Landlord. Tenant shall submit the specifications for design,
operation, installation and maintenance of the connections to the Generator and
facilities related thereto to Landlord for Landlord’s consent, which consent
will not be unreasonably withheld or delayed and may be conditioned on Tenant
complying with such reasonable requirements imposed by Landlord, based on the
advice of Landlord’s engineers, so that the Building’s systems or other
components of the Building are not adversely affected by the installation and
operation of the Generator. The cost of design (including engineering costs) and
installation of the Generator and the costs of the Generator itself shall be
Tenant’s sole responsibility, but which costs shall be deemed a “Tenant
Improvement Allowance Item” pursuant to Section 2.2.1 of the Tenant Work Letter.
All repairs and maintenance of the Generator shall be the sole responsibility of
Tenant, and Landlord makes no representation or warranty with respect to such
Generator. Tenant shall remove the Generator and all related facilities and
equipment upon the expiration or earlier termination of this Lease and repair
all damage to the Building and/or Project resulting from such removal and
restore all affected areas to their condition existing prior to Tenant’s
installation of the Generator, all at Tenant’s sole cost and expense. The terms
of the preceding sentence shall survive the

-31-

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

 

termination or earlier expiration of this Lease. The Generator shall be deemed
to be a part of the Premises for purposes of the indemnification and insurance
provisions of this Lease, and Tenant shall maintain, at Tenant’s cost, industry
standard “boiler and machinery” insurance coverage with respect thereto.
     6.7 Interruption of Use. If (i) Landlord fails to perform the obligations
required of Landlord under the TCCs of this Lease, (ii) such failure causes all
or a portion of the Premises to be untenantable and unusable by Tenant, and
(iii) such failure relates to (A) the nonfunctioning of the heat, ventilation,
and air conditioning system in the Premises, the electricity in the Premises,
the nonfunctioning of the elevator service to the Premises, or (B) a failure to
provide access to the Premises, Tenant shall give Landlord notice (the “Initial
Notice”), specifying such failure to perform by Landlord (the “Abatement
Event”). If Landlord has not cured such Abatement Event within three
(3) business days after the receipt of the Initial Notice (the “Eligibility
Period”), Tenant may deliver an additional notice to Landlord (the “Additional
Notice”), specifying such Abatement Event and Tenant’s intention to abate the
payment of Rent under this Lease. If Landlord does not cure such Abatement Event
within two (2) business days of receipt of the Additional Notice, Tenant may,
upon written notice to Landlord, immediately abate Rent payable under this Lease
for that portion of the Premises rendered untenantable and not used by Tenant,
for the period beginning on the date three (3) business days after the Initial
Notice to the earlier of the date Landlord cures such Abatement Event or the
date Tenant recommences the use of such portion of the Premises. Such right to
abate Rent shall be Tenant’s sole and exclusive remedy at law or in equity for a
Abatement Event. Except as provided in this Section 6.4, nothing contained
herein shall be interpreted to mean that Tenant is excused from paying Rent due
hereunder.
ARTICLE 7
REPAIRS
     Tenant shall, at Tenant’s own expense, keep the Premises, including all
improvements, fixtures and furnishings therein, and the floor or floors of the
Buildings on which the Premises are located, in good order, repair and condition
at all times during the Lease Term, normal wear and tear, damage to the Premises
which would be repaired under Article 11 hereof, excepted. In addition, subject
to Landlord’s repair obligations as set forth in this Article 7 and Article 11,
Tenant shall, at Tenant’s own expense, but under the supervision and subject to
the prior approval of Landlord, and within any reasonable period of time
specified by Landlord, promptly and adequately repair all damage to the Premises
and replace or repair all damaged, broken, or worn fixtures and appurtenances,
except for damage caused by ordinary wear and tear or beyond the reasonable
control of Tenant; provided however, that, at Landlord’s option, or if Tenant
fails to make such repairs, Landlord may, after written notice to Tenant and
Tenant’s failure to repair within five (5) days thereafter, but need not, make
such repairs and replacements, and Tenant shall pay Landlord the cost thereof,
including a percentage of the cost thereof (to be uniformly established for the
Buildings and/or the Project) sufficient to reimburse Landlord for all overhead,
general conditions, reasonable fees and other costs or expenses arising from
Landlord’s involvement with such repairs and replacements forthwith upon being
billed for same. Notwithstanding the foregoing, Landlord shall be responsible
for repairs to the exterior walls, foundation, roof and other structural
elements of the Buildings, and the structural portions of the

-32-

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

 

floors of the Buildings (collectively, the “Building Structure”), and the
systems and equipment of the Buildings and Common Areas (collectively the
“Building Systems”), except to the extent that such repairs are required due to
the negligence or willful misconduct of Tenant; provided, however, that if such
repairs are due to the negligence or willful misconduct of Tenant, Landlord
shall nevertheless make such repairs at Tenant’s expense, or, if covered by
Landlord’s insurance, Tenant shall only be obligated to pay any deductible in
connection therewith. Landlord may, but shall not be required to, enter the
Premises at all reasonable times to make such repairs, alterations, improvements
or additions to the Premises or to the Project or to any equipment located in
the Project as Landlord shall desire or deem necessary or as Landlord may be
required to do by governmental or quasi-governmental authority or court order or
decree; provided, however, except for (i) emergencies, (ii) repairs,
alterations, improvements or additions required by governmental or
quasi-governmental authorities or court order or decree, or (iii) repairs which
are the obligation of Tenant hereunder, any such entry into the Premises by
Landlord shall be performed in a manner so as not to materially interfere with
Tenant’s use of, or access to, the Premises; provided that, with respect to
items (ii) and (iii) above, Landlord shall use commercially reasonable efforts
to not materially interfere with Tenant’s use of, or access to, the Premises.
Tenant hereby waives any and all rights under and benefits of subsection 1 of
Section 1932 and Sections 1941 and 1942 of the California Civil Code or under
any similar law, statute, or ordinance now or hereafter in effect.
ARTICLE 8
ADDITIONS AND ALTERATIONS
     8.1 Landlord’s Consent to Alterations. Tenant may not make any
improvements, alterations, additions or changes to the Premises or any
mechanical, plumbing or HVAC facilities or systems pertaining to the Premises
(collectively, the “Alterations”) without first procuring the prior written
consent of Landlord to such Alterations, which consent shall be requested by
Tenant not less than fifteen (15) business days prior to the commencement
thereof, and which consent shall not be unreasonably withheld by Landlord,
provided it shall be deemed reasonable for Landlord to withhold its consent to
any Alteration which adversely affects the structural portions or the systems or
equipment of the Buildings or is visible from the exterior of the Buildings.
Notwithstanding the foregoing, Tenant shall be permitted to make Alterations
following ten (10) business days notice to Landlord, but without Landlord’s
prior consent, to the extent that such Alterations do not adversely affect the
systems and equipment of the Buildings, exterior appearance of the Buildings, or
structural aspects of the Buildings (the “Cosmetic Alterations”). The
construction of the initial improvements to the Premises shall be governed by
the terms of the Tenant Work Letter and not the terms of this Article 8.
     8.2 Manner of Construction. Landlord may impose, as a condition of its
consent to any and all Alterations or repairs of the Premises or about the
Premises, such requirements as Landlord in its reasonable discretion may deem
desirable, including, but not limited to, the requirement that Tenant utilize
for such purposes only contractors reasonably approved by Landlord, and the
requirement that upon Landlord’s timely request (as more particularly set forth
in, and subject to the terms of, Section 8.5, below), Tenant shall, at Tenant’s
expense, remove such Alterations upon the expiration or any early termination of
the Lease Term and return the affected portion of the Premises to a building
standard tenant improved condition as determined

-33-

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

 

by Landlord. Tenant shall construct such Alterations and perform such repairs in
a good and workmanlike manner, in conformance with any and all applicable
federal, state, county or municipal laws, rules and regulations and pursuant to
a valid building permit, issued by the City of Calabasas, all in conformance
with Landlord’s construction rules and regulations; provided, however, that
prior to commencing to construct any Alteration, Tenant shall meet with Landlord
to discuss Landlord’s design parameters and code compliance issues. In the event
Tenant performs any Alterations in the Premises which require or give rise to
governmentally required changes to the “Base Building,” as that term is defined
below, then Landlord shall, at Tenant’s expense, make such changes to the Base
Building. The “Base Building” shall include the structural portions of the
Buildings, and the public restrooms, elevators, exit stairwells and the systems
and equipment located in the internal core of the Buildings on the floor or
floors on which the Premises are located. In performing the work of any such
Alterations, Tenant shall have the work performed in such manner so as not to
obstruct access to the Project or any portion thereof, by any other tenant of
the Project, and so as not to obstruct the business of Landlord or other tenants
in the Project. Tenant shall not use (and upon notice from Landlord shall cease
using) contractors, services, workmen, labor, materials or equipment that, in
Landlord’s reasonable judgment, would disturb labor harmony with the workforce
or trades engaged in performing other work, labor or services in or about the
Buildings or the Common Areas. In addition to Tenant’s obligations under
Article 9 of this Lease, upon completion of any Alterations, Tenant agrees to
cause a Notice of Completion to be recorded in the office of the Recorder of the
County of Los Angeles in accordance with Section 3093 of the Civil Code of the
State of California or any successor statute, and Tenant shall deliver to the
Project construction manager a reproducible copy of the “as built” drawings of
the Alterations, to the extent applicable, as well as all permits, approvals and
other documents issued by any governmental agency in connection with the
Alterations.
     8.3 Payment for Improvements. If payment is made directly to contractors,
Tenant shall (i) comply with Landlord’s requirements for final lien releases and
waivers in connection with Tenant’s payment for work to contractors, and
(ii) sign Landlord’s standard contractor’s rules and regulations. If Tenant
orders any work directly from Landlord, Tenant shall pay to Landlord an amount
equal to five percent (5%) of the cost of such work to compensate Landlord for
all overhead, general conditions, fees and other costs and expenses arising from
Landlord’s involvement with such work. If Tenant does not order any work
directly from Landlord, Tenant shall reimburse Landlord for Landlord’s
reasonable, actual, out-of-pocket costs and expenses actually incurred in
connection with Landlord’s review of such work.
     8.4 Construction Insurance. In addition to the requirements of Article 10
of this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant, or its general contractor, carries “Builder’s All Risk” insurance
in an amount reasonably approved by Landlord covering the construction of such
Alterations, and such other insurance as Landlord may reasonably require, it
being understood and agreed that all of such Alterations shall be insured by
Tenant pursuant to Article 10 of this Lease immediately upon completion thereof.
In addition, Landlord may, in its reasonable discretion, require Tenant to
obtain a lien and completion bond or some alternate form of security
satisfactory to Landlord in an amount sufficient to ensure the lien-free
completion of such Alteration and naming Landlord as a co-obligee, but which
lien and

-34-

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

 

completion bond coverage shall not exceed one hundred percent (100%) of the cost
of such Alteration.
     8.5 Landlord’s Property. Landlord and Tenant hereby acknowledge and agree
that (i) all Alterations, improvements, fixtures, equipment and/or appurtenances
which may be installed or placed in or about the Premises, from time to time,
shall be at the sole cost of Tenant and shall be and become part of the Premises
and the property of Landlord, and (ii) the Tenant Improvements to be constructed
in the Premises pursuant to the TCCs of the Tenant Work Letter shall, upon
completion of the same, be and become a part of the Premises and the property of
Landlord. Furthermore, Landlord may, by written notice to Tenant prior to the
end of the Lease Term, or given following any earlier termination of this Lease,
require Tenant, at Tenant’s expense, to remove any Alterations or improvements
in the Premises and to repair any damage to the Premises and Building caused by
such removal; provided, however, if, in connection with its notice to Landlord
with respect to any such Alterations or Cosmetic Alterations, (i) Tenant
requests Landlord’s decision with regard to the removal of such Alterations or
Cosmetic Alterations, and (ii) Landlord thereafter agrees in writing to waive
the removal requirement with regard to such Alterations or Cosmetic Alterations,
then Tenant shall not be required to so remove such Alterations or Cosmetic
Alterations; provided further, however, Tenant shall have no obligation to
remove any improvements existing in the Premises as of the date of this Lease
except the following: (A) bus bars in server rooms including electrical back to
panel; (B) supplemental air conditioning units with the exception of the
supplemental air conditioning units located on the third floor of Buildings A
and F; (C) all equipment and other racks; and (D) furniture systems including
electrical back to panels. If Tenant fails to complete such removal and/or to
repair any damage caused by the removal of any Alterations or improvements in
the Premises, and return the affected portion of the Premises to a building
standard tenant improved condition as determined by Landlord, then Landlord may
do so and may charge the cost thereof to Tenant. Tenant hereby protects,
defends, indemnifies and holds Landlord harmless from any liability, cost,
obligation, expense or claim of lien in any manner relating to the installation,
placement, removal or financing of any such Alterations, improvements, fixtures
and/or equipment in, on or about the Premises, which obligations of Tenant shall
survive the expiration or earlier termination of this Lease.
ARTICLE 9
COVENANT AGAINST LIENS
     Tenant shall keep the Project and Premises free from any liens or
encumbrances arising out of the work performed, materials furnished or
obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including, without limitation, reasonable attorneys’ fees
and costs) arising out of same or in connection therewith. Tenant shall give
Landlord notice at least twenty (20) days prior to the commencement of any such
work on the Premises (or such additional time as may be necessary under
applicable laws) to afford Landlord the opportunity of posting and recording
appropriate notices of non-responsibility. Tenant shall remove any such lien or
encumbrance by bond or otherwise within five (5) days after notice by Landlord,
and if Tenant shall fail to do so, Landlord may pay the amount necessary to
remove such lien or encumbrance, without being responsible for investigating the
validity thereof. The amount so paid shall be

-35-

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

 

deemed Additional Rent under this Lease payable upon demand, without limitation
as to other remedies available to Landlord under this Lease. Nothing contained
in this Lease shall authorize Tenant to do any act which shall subject
Landlord’s title to the Buildings or Premises to any liens or encumbrances
whether claimed by operation of law or express or implied contract. Any claim to
a lien or encumbrance upon the Buildings or Premises arising in connection with
any such work or respecting the Premises not performed by or at the request of
Landlord shall be null and void, or at Landlord’s option shall attach only
against Tenant’s interest in the Premises and shall in all respects be
subordinate to Landlord’s title to the Project, Buildings and Premises.
ARTICLE 10
INSURANCE
     10.1 Indemnification and Waiver. Tenant hereby assumes all risk of damage
to property or injury to persons in, upon or about the Premises from any cause
whatsoever and agrees that Landlord, its partners, subpartners and their
respective officers, agents, servants, employees, and independent contractors
(collectively, “Landlord Parties”) shall not be liable for, and are hereby
released from any responsibility for, any damage either to person or property or
resulting from the loss of use thereof, which damage is sustained by Tenant or
by other persons claiming through Tenant; provided, however, the foregoing
waiver and release shall not apply with respect to such injury, death or damage
to the extent caused by the gross negligence or willful misconduct of Landlord
or any Landlord Party. Tenant shall indemnify, defend, protect, and hold
harmless the Landlord Parties from any and all loss, cost, damage, expense and
liability (including without limitation court costs and reasonable attorneys’
fees) incurred in connection with or arising from any cause in, on or about the
Premises, any acts, omissions or negligence of Tenant or of any person claiming
by, through or under Tenant, or of the contractors, agents, servants, employees,
invitees, guests or licensees of Tenant or any such person, in, on or about the
Project or any breach of the TCCs of this Lease, either prior to, during, or
after the expiration of the Lease Term, provided that the terms of the foregoing
indemnity shall not apply to the negligence or willful misconduct of Landlord.
Should Landlord be named as a defendant in any suit brought against Tenant in
connection with or arising out of Tenant’s occupancy of the Premises, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including
without limitation, its actual professional fees such as appraisers’,
accountants’ and attorneys’ fees. Further, Tenant’s agreement to indemnify
Landlord pursuant to this Section 10.1 is not intended and shall not relieve any
insurance carrier of its obligations under policies required to be carried by
Tenant pursuant to the provisions of this Lease, to the extent such policies
cover the matters subject to Tenant’s indemnification obligations; nor shall
they supersede any inconsistent agreement of the parties set forth in any other
provision of this Lease. The provisions of this Section 10.1 shall survive the
expiration or sooner termination of this Lease with respect to any claims or
liability arising in connection with any event occurring prior to such
expiration or termination. Notwithstanding anything to the contrary contained in
this Lease, nothing in this Lease shall impose any obligations on Tenant or
Landlord to be responsible or liable for, and each hereby releases the other
from all liability for, consequential damages other than those consequential
damages for which Tenant may become liable under the terms of Article 16, below,
or incurred by Landlord in connection with any repair, physical construction or
improvement work performed by or on behalf of Tenant in the Project, but Tenant
shall not be responsible for any direct or consequential damages resulting from

-36-

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

 

Landlord’s or contractor’s acts or omissions in connection with the completion
by Landlord of the Tenant Improvements in the Premises pursuant to the Tenant
Work Letter.
     10.2 Landlord’s Fire, Casualty and Liability Insurance. Landlord shall
carry commercial general liability insurance with respect to the Buildings
during the Lease Term, and shall further insure the Buildings during the Lease
Term against loss or damage due to fire and other casualties covered within the
classification of fire and extended coverage, vandalism coverage and malicious
mischief, sprinkler leakage, water damage and special extended coverage, for
full replacement value of the Buildings. Such coverage shall be in such amounts,
from such companies, and on such other terms and conditions, as Landlord may
from time to time reasonably determine. Additionally, at the option of Landlord,
such insurance coverage may include the risks of earthquakes and/or flood damage
and additional hazards, a rental loss endorsement and one or more loss payee
endorsements in favor of the holders of any mortgages or deeds of trust
encumbering the interest of Landlord in the Buildings or the ground or
underlying lessors of the Buildings, or any portion thereof. Notwithstanding the
foregoing provisions of this Section 10.2, the coverage and amounts of insurance
carried by Landlord in connection with the Buildings shall, at a minimum, be
comparable to the coverage and amounts of insurance which are carried by
reasonably prudent landlords of Comparable Buildings, and Worker’s Compensation
and Employer’s Liability coverage as required by applicable law. Tenant shall,
at Tenant’s expense, comply with all insurance company requirements pertaining
to the use of the Premises. If Tenant’s conduct or use of the Premises for other
than typical office purposes causes any material increase in the premium for
such insurance policies then Tenant shall reimburse Landlord for any such
increase; provided, however, Landlord hereby acknowledges that Tenant’s use of
the Premises since 2000 (pursuant to the terms of the Existing Lease) has not
caused an increase in Landlord’s insurance premiums. Tenant, at Tenant’s
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.
     10.3 Tenant’s Insurance. Tenant shall maintain the following coverages in
the following amounts.
          10.3.1 Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage (including
loss of use thereof) arising out of Tenant’s operations, and contractual
liabilities (covering the performance by Tenant of its indemnity agreements)
including a Broad Form endorsement covering the insuring provisions of this
Lease and the performance by Tenant of the indemnity agreements set forth in
Section 10.1 of this Lease, for limits of liability not less than:

     
Bodily Injury and
  $5,000,000 each occurrence
Property Damage Liability
  $5,000,000 annual aggregate
 
   
Personal Injury Liability
  $5,000,000 each occurrence
 
  $5,000,000 annual aggregate
 
  0% Insured’s participation

-37-

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

 

          10.3.2 Physical Damage Insurance covering (i) all office furniture,
business and trade fixtures, office equipment, free-standing cabinet work,
movable partitions, merchandise and all other items of Tenant’s property on the
Premises installed by, for, or at the expense of Tenant, (ii) the “Tenant
Improvements,” as that term is defined in Section 2.1 of the Tenant Work Letter,
and any other improvements which exist in the Premises as of the Lease
Commencement Date (excluding the Base Building) (the “Original Improvements”),
and (iii) all other improvements, alterations and additions to the Premises.
Such insurance shall be written on an “all risks” of physical loss or damage
basis, for the full replacement cost value (subject to reasonable deductible
amounts) new without deduction for depreciation of the covered items and in
amounts that meet any co-insurance clauses of the policies of insurance and
shall include coverage for damage or other loss caused by fire or other peril
including, but not limited to, vandalism and malicious mischief, theft, water
damage of any type, including sprinkler leakage, bursting or stoppage of pipes,
and explosion, and providing business interruption coverage for a period of one
year.
          10.3.3 Worker’s Compensation and Employer’s Liability or other similar
insurance pursuant to all applicable state and local statutes and regulations,
and Employer’s Liability or other similar insurance pursuant to all applicable
state and local statutes and regulations, with limits not less than One Million
and No/100 Dollars ($1,000,000.00).
          10.3.4 Comprehensive Automobile Liability Insurance covering all owned
or hired vehicles with the following limits of liability: One Million Dollars
($1,000,000.00) combined single limit for bodily injury and property damage.
     10.4 Form of Policies. The minimum limits of policies of insurance required
of Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease. Such insurance shall (i) name Landlord, and any other party the
Landlord so specifies that has a material financial interest in the Project, as
an additional insured, including Landlord’s managing agent, if any;
(ii) specifically cover the liability assumed by Tenant under this Lease,
including, but not limited to, Tenant’s obligations under Section 10.1 of this
Lease; (iii) be issued by an insurance company having a rating of not less than
A-X in Best’s Insurance Guide or which is otherwise acceptable to Landlord and
licensed to do business in the State of California; (iv) be primary insurance as
to all claims thereunder and provide that any insurance carried by Landlord is
excess and is non-contributing with any insurance requirement of Tenant; (v) be
in form and content reasonably acceptable to Landlord; and (vi) provide that
said insurance shall not be canceled or coverage changed unless ten (10) days’
prior written notice shall have been given to Landlord and any mortgagee of
Landlord, the identity of whom has been provided to Tenant in writing. Tenant
shall deliver said policy or policies or certificates thereof to Landlord on or
before the Lease Commencement Date and at least ten (10) days before the
expiration dates thereof. In the event Tenant shall fail to procure such
insurance, or to deliver such policies or certificate, Landlord may, at its
option, after written notice to Tenant and Tenant’s failure to obtain such
insurance within five (5) days thereafter, procure such policies for the account
of Tenant, and the cost thereof shall be paid to Landlord within thirty
(30) days after delivery to Tenant of bills therefor.
     10.5 Subrogation. Landlord and Tenant intend that their respective property
loss risks shall be borne by reasonable insurance carriers to the extent above
provided, and Landlord and

-38-

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

 

Tenant hereby agree to look solely to, and seek recovery only from, their
respective insurance carriers in the event of a property loss to the extent that
such coverage is agreed to be provided hereunder. The parties each hereby waive
all rights and claims against each other for such losses, and waive all rights
of subrogation of their respective insurers, provided such waiver of subrogation
shall not affect the right to the insured to recover thereunder. The parties
agree that their respective insurance policies are now, or shall be, endorsed
such that the waiver of subrogation shall not affect the right of the insured to
recover thereunder, so long as no material additional premium is charged
therefor.
     10.6 Additional Insurance Obligations. Tenant shall carry and maintain
during the entire Lease Term, at Tenant’s sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10 and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant’s operations therein, as may
be reasonably requested by Landlord, but in no event in excess of the amounts
and types of insurance then being required by landlords of other Comparable
Buildings.
ARTICLE 11
DAMAGE AND DESTRUCTION
     11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord’s reasonable control, and subject to all other terms of
this Article 11, restore the Base Building and such Common Areas. Such
restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Buildings or Project or any other modifications to the Common Areas deemed
desirable by Landlord, which are consistent with the character of the Project,
provided that access to the Premises and any common restrooms serving the
Premises shall not be materially impaired. Upon the occurrence of any damage to
the Premises, upon notice (the “Landlord Repair Notice”) to Tenant from
Landlord, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable to Tenant under Tenant’s insurance
required under Section 10.3 of this Lease, and Landlord shall repair any injury
or damage to the Tenant Improvements and the Original Improvements installed in
the Premises and shall return such Tenant Improvements and Original Improvements
to their original condition; provided that if the cost of such repair by
Landlord exceeds the amount of insurance proceeds received by Landlord from
Tenant’s insurance carrier, as assigned by Tenant, the cost of such repairs
shall be paid by Tenant to Landlord prior to Landlord’s commencement of repair
of the damage. In the event that Landlord does not deliver the Landlord Repair
Notice within sixty (60) days following the date the casualty becomes known to
Landlord (the “60-Day Notice Period”), Tenant shall, at its sole cost and
expense, repair any injury or damage to the Tenant Improvements and the Original
Improvements installed in the Premises and shall return such Tenant Improvements
and Original Improvements to their original condition. Whether or not Landlord
delivers a Landlord Repair Notice, prior to the commencement of construction,
Tenant shall submit to Landlord, for Landlord’s review and approval, all plans,
specifications and

-39-

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

 

working drawings relating thereto, and Landlord shall select the contractors to
perform such improvement work. Landlord shall not be liable for any
inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s
business resulting in any way from such damage or the repair thereof; provided
however, that if such fire or other casualty shall have damaged the Premises or
Common Areas necessary to Tenant’s occupancy, and the Premises are not occupied
by Tenant as a result thereof, then during the time and to the extent the
Premises are unfit for occupancy, the Rent shall be abated in proportion to the
ratio that the amount of rentable square feet of the Premises which is unfit for
occupancy for the purposes permitted under this Lease bears to the total
rentable square feet of the Premises. In the event that Landlord shall not
deliver the Landlord Repair Notice, Tenant’s right to rent abatement pursuant to
the preceding sentence shall terminate as of the date upon which Tenant
reasonably should have completed repairs to the Premises, assuming that Tenant
used reasonable due diligence in connection with such repairs, but taking into
consideration any delay in the commencement of such repairs resulting from the
60-Day Notice Period.
     11.2 Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1
of this Lease, Landlord may elect not to rebuild and/or restore the Premises,
Buildings and/or Project, and instead terminate this Lease, by notifying Tenant
in writing of such termination within sixty (60) days after the date of
discovery of the damage, such notice to include a termination date giving Tenant
sixty (60) days to vacate the Premises, but Landlord may so elect only if the
Buildings or Project shall be damaged by fire or other casualty or cause,
whether or not the Premises are affected, and one or more of the following
conditions is present: (i) in Landlord’s reasonable judgment, repairs cannot
reasonably be completed within one hundred eighty (180) days after the date of
discovery of the damage (when such repairs are made without the payment of
overtime or other premiums); (ii) the holder of any mortgage on the Buildings or
Project or ground lessor with respect to the Buildings or Project shall require
that the insurance proceeds or any portion thereof be used to retire the
mortgage debt, or shall terminate the ground lease, as the case may be;
(iii) the damage is not fully covered by Landlord’s insurance policies (unless
such failure of coverage is a result of Landlord’s failure to maintain the
policies of insurance required to be maintained by Landlord pursuant to the
terms of Section 10.2, above); or (iv) the damage occurs during the last twelve
(12) months of the Lease Term; provided, however, that if Landlord does not
elect to terminate this Lease pursuant to Landlord’s termination right as
provided above, and the repairs cannot, in the reasonable opinion of Landlord,
be completed within one hundred eighty (180) days after being commenced, Tenant
may elect, no earlier than sixty (60) days after the date of the damage and not
later than ninety (90) days after the date of such damage, to terminate this
Lease by written notice to Landlord effective as of the date specified in the
notice, which date shall not be less than thirty (30) days nor more than sixty
(60) days after the date such notice is given by Tenant. Furthermore, if neither
Landlord nor Tenant has terminated this Lease, and the repairs are not actually
completed within such 180-day period, Tenant shall have the right to terminate
this Lease during the first five (5) business days of each calendar month
following the end of such period until such time as the repairs are complete, by
notice to Landlord (the “Damage Termination Notice”), effective as of a date set
forth in the Damage Termination Notice (the “Damage Termination Date”), which
Damage Termination Date shall not be less than ten (10) business days following
the end of each such month. Notwithstanding the foregoing, if Tenant delivers a
Damage Termination Notice to Landlord, then Landlord shall have the right to
suspend the occurrence of the Damage Termination Date for a period ending thirty
(30) days after the Damage Termination Date set forth in the Damage Termination
Notice

-40-

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

 

by delivering to Tenant, within five (5) business days of Landlord’s receipt of
the Damage Termination Notice, a certificate of Landlord’s contractor
responsible for the repair of the damage certifying that it is such contractor’s
good faith judgment that the repairs shall be substantially completed within
thirty (30) days after the Damage Termination Date. If repairs shall be
substantially completed prior to the expiration of such thirty-day period, then
the Damage Termination Notice shall be of no force or effect, but if the repairs
shall not be substantially completed within such thirty-day period, then this
Lease shall terminate upon the expiration of such thirty-day period. At any
time, from time to time, after the date occurring sixty (60) days after the date
of the damage, Tenant may request that Landlord inform Tenant of Landlord’s
reasonable opinion of the date of completion of the repairs and Landlord shall
respond to such request within five (5) business days. Notwithstanding the
provisions of this Section 11.2, Tenant shall have the right to terminate this
Lease under this Section 11.2 only if each of the following conditions is
satisfied: (a) the damage to the Project by fire or other casualty was not
caused by an intentional act or omission of Tenant or its partners or
subpartners and their respective officers, agents, servants, employees, and
independent contractors; (b) as a result of the damage, Tenant cannot reasonably
conduct its business from the Premises; and, (c) as a result of the damage to
the Project, Tenant does not occupy or use the Premises at all. In the event
this Lease is terminated in accordance with the terms of this Section 11.2,
Tenant shall assign to Landlord (or to any party designated by Landlord) all
insurance proceeds payable to Tenant under Tenant’s insurance required under
items (ii) and (iii) of Section 10.3.2 of this Lease.
     11.3 Waiver of Statutory Provisions. The provisions of this Lease,
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Buildings or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Buildings or the Project.
ARTICLE 12
NONWAIVER
     No provision of this Lease shall be deemed waived by either party hereto
unless expressly waived in a writing signed thereby. The waiver by either party
hereto of any breach of any term, covenant or condition herein contained shall
not be deemed to be a waiver of any subsequent breach of same or any other term,
covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall 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 of a lesser amount than the Rent herein stipulated shall be
deemed a waiver of Landlord’s right to receive the full amount due, nor shall
any endorsement or statement on any check or payment or any letter accompanying
such check or payment be deemed an accord and satisfaction, and Landlord may

-41-

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

 

accept such check or payment without prejudice to Landlord’s right to recover
the full amount due. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant’s right of possession hereunder, or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit, or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.
ARTICLE 13
CONDEMNATION
     If the whole or any material part of the Premises, Buildings or Project
shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent
property or street shall be so taken or condemned, or reconfigured or vacated by
such authority in such manner as to require the use, reconstruction or
remodeling of any part of the Premises, Buildings or Project, in such a manner
as to have a material adverse impact on Landlord’s ability to economically
operate the Project in the manner required under this Lease, or if Landlord
shall grant a deed or other instrument in lieu of such taking by eminent domain
or condemnation, Landlord shall have the option to terminate this Lease
effective as of the date possession is required to be surrendered to the
authority. If a material portion of the Premises or Project is taken, or if
Tenant’s use of or access to the Premises or Project is materially impaired, in
each case for a period in excess of thirty (30) days, Tenant shall have the
option to terminate this Lease effective as of the date possession is required
to be surrendered to the authority. Tenant shall not because of such taking
assert any claim against Landlord or the authority for any compensation because
of such taking and Landlord shall be entitled to the entire award or payment in
connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for (i) Tenant’s loss of goodwill;
(ii) Tenant’s loss of business and business interruption, (iii) any taking of
Tenant’s personal property and fixtures belonging to Tenant and removable by
Tenant upon expiration of the Lease Term pursuant to the terms of this Lease,
and (iv) for moving expenses. All Rent shall be apportioned as of the date of
such termination. If any part of the Premises shall be taken, and this Lease
shall not be so terminated, the Rent shall be proportionately abated. Tenant
hereby waives any and all rights it might otherwise have pursuant to
Section 1265.130 of The California Code of Civil Procedure. Notwithstanding
anything to the contrary contained in this Article 13, in the event of a
temporary taking of all or any portion of the Premises for a period of thirty
(30) days or less, then this Lease shall not terminate but the Base Rent and the
Additional Rent shall be abated for the period of such taking in proportion to
the ratio that the amount of rentable square feet of the Premises taken bears to
the total rentable square feet of the Premises. Landlord shall be entitled to
receive the entire award made in connection with any such temporary taking.

-42-

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

 

ARTICLE 14
ASSIGNMENT AND SUBLETTING
     14.1 Transfers. Tenant shall not, without the prior written consent of
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or enter into any
license or concession agreements or otherwise permit the occupancy or use of the
Premises or any part thereof by any persons other than Tenant and its employees
and contractors (all of the foregoing are hereinafter sometimes referred to
collectively as “Transfers” and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a “Transferee”). If
Tenant desires Landlord’s consent to any Transfer, Tenant shall notify Landlord
in writing, which notice (the “Transfer Notice”) shall include (i) the proposed
effective date of the Transfer, which shall not be less than thirty (30) days
nor more than one hundred eighty (180) days after the date of delivery of the
Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the “Subject Space”), (iii) all of the terms of the proposed
Transfer and the consideration therefor, including calculation of the “Transfer
Premium”, as that term is defined in Section 14.3 below, in connection with such
Transfer, the name and address of the proposed Transferee, and a copy of all
existing executed and/or proposed documentation pertaining to the proposed
Transfer, including all existing operative documents to be executed to evidence
such Transfer or the agreements incidental or related to such Transfer,
(iv) reasonable information demonstrating the financial responsibility of the
proposed Transferee, and the nature of such Transferee’s business and proposed
use of the Subject Space and (v) an executed estoppel certificate from Tenant in
the form attached hereto as Exhibit E. Landlord shall respond to any such
Transfer Notice within thirty (30) days after Landlord’s receipt of the same
(and all of the items required to be provided in connection therewith as set
forth above). Any Transfer, except for “Non-Transfers” pursuant to the terms and
conditions of Article 14.8, below, made without Landlord’s prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed, shall, at Landlord’s option, be null, void and of no effect, and shall,
at Landlord’s option, constitute a default by Tenant under this Lease. Whether
or not Landlord consents to any proposed Transfer, Tenant shall pay Landlord’s
review and processing fees, as well as any reasonable professional fees
(including, without limitation, reasonable attorneys’, accountants’,
architects’, engineers’ and consultants’ fees) incurred by Landlord, within
thirty (30) days after written request by Landlord.
     14.2 Landlord’s Consent. Landlord shall not unreasonably withhold its
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:
          14.2.1 The Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Buildings or the
Project as reflected by the then existing tenants of the Project with respect to
comparable space, and of the Comparable Buildings;

-43-

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

 

          14.2.2 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;
          14.2.3 The Transferee is either a governmental agency or
instrumentality thereof; provided, however, that Tenant shall be entitled to
assign, sublet or otherwise transfer to a governmental agency or instrumentality
thereof to the extent Landlord has leased or has permitted the lease of space to
a comparable (in terms of security, foot traffic, prestige, eminent domain and
function oriented issues) governmental agency or instrumentality thereof in
comparably located space of comparable size;
          14.2.4 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested;
          14.2.5 The proposed Transfer would cause a violation of another lease
for space in the Project, or would give an occupant of the Project a right to
cancel its lease; or
          14.2.6 Either the proposed Transferee, or any person or entity which
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed Transferee, (i) occupies space in the Project at the time of
the request for consent, or (ii) is negotiating with Landlord to lease space in
the Project at such time, or (iii) has negotiated with Landlord during the six
(6)-month period immediately preceding the Transfer Notice, but with regard to
each of conditions (i), (ii) and (iii) above, only to the extent Landlord has
comparable space in the Project for such proposed Transferee.
     If Landlord consents to any Transfer pursuant to the terms of this
Section 14.2 (and does not exercise any recapture rights Landlord may have under
Section 14.4 of this Lease), Tenant may within six (6) months after Landlord’s
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant
to Landlord pursuant to Section 14.1 of this Lease, provided that if there are
any changes in the terms and conditions from those specified in the Transfer
Notice (i) such that Landlord would initially have been entitled to refuse its
consent to such Transfer under this Section 14.2, or (ii) which would cause the
proposed Transfer to be more favorable to the Transferee than the terms set
forth in Tenant’s original Transfer Notice, Tenant shall again submit the
Transfer to Landlord for its approval and other action under this Article 14
(including Landlord’s right of recapture, if any, under Section 14.4 of this
Lease). Notwithstanding anything to the contrary in this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent under Section 14.2 or otherwise has breached or acted unreasonably
under this Article 14, their sole remedies shall be a declaratory judgment and
an injunction for the relief sought without any monetary damages, and Tenant
hereby waives all other remedies, including, without limitation, any right at
law or equity to terminate this Lease, on its own behalf and, to the extent
permitted under all applicable laws, on behalf of the proposed Transferee.
Tenant shall indemnify, defend and hold harmless Landlord from any and all
liability, losses, claims, damages, costs, expenses, causes of action and
proceedings involving any third party or parties (including without limitation
Tenant’s proposed subtenant or assignee) who claim they were damaged by
Landlord’s wrongful withholding or conditioning of Landlord’s consent.

-44-

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

 

     14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any “Transfer Premium,” as that term is defined
in this Section 14.3, received by Tenant from such Transferee; provided,
however, if Tenant (A) exercises its right of first offer pursuant to the terms
of Section 1.3 of this Lease, above, and thereafter sublets the First Offer
Space to a subtenant, (B) exercises its right of first refusal pursuant to the
terms of Section 1.4 of this Lease, above, and thereafter sublets the First
Refusal Space to a subtenant, (C) installs Rooftop Equipment (or has such
Rooftop Equipment installed) on behalf of a subtenant pursuant to Article 22,
(D) installs Tenant Signage (or has such Tenant Signage installed) on behalf of
a subtenant pursuant to Article 23, or (E) allows a subtenant to park in
reserved parking spaces acquired by Tenant pursuant to its Parking ROFO, then
the Transfer Premium shall be one hundred percent (100%). “Transfer Premium”
shall mean all rent, additional rent or other consideration payable by such
Transferee in connection with the Transfer in excess of the Rent and Additional
Rent payable by Tenant under this Lease during the term of the Transfer on a per
rentable square foot basis if less than all of the Premises is transferred,
after deducting the reasonable expenses incurred by Tenant in connection with
the Transfer (including, without limitation, legal fees) for (i) any changes,
alterations and improvements to the Premises in connection with the Transfer,
(ii) any free base rent and other concessions provided to the Transferee, and
(iii) any brokerage commissions in connection with the Transfer. “Transfer
Premium” shall also include, but not be limited to, key money, bonus money or
other cash consideration paid by Transferee to Tenant in connection with such
Transfer, and any payment in excess of fair market value for services rendered
by Tenant to Transferee or for assets, fixtures, inventory, equipment, or
furniture transferred by Tenant to Transferee in connection with such Transfer.
In the calculations of the Rent (as it relates to the Transfer Premium
calculated under this Section 14.3), and the Transferee’s Rent and Quoted Rent
under Section 14.2 of this Lease, the Rent paid during each annual period for
the Subject Space, and the Transferee’s Rent and the Quoted Rent, shall be
computed after adjusting such rent to the actual effective rent to be paid,
taking into consideration any and all leasehold concessions granted in
connection therewith, including, but not limited to, any rent credit and tenant
improvement allowance. For purposes of calculating any such effective rent all
such concessions shall be amortized on a straight-line basis over the relevant
term.
     14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, in the event Tenant request Landlord
consent to a Transfer (i) with respect to any space located in Building A, or
(ii) with respect to any space located in Building C, or (iii) of more than a
full floor with respect to space located in Building F, then Landlord shall have
the option, by giving written notice to Tenant within twenty (20) days after
receipt of the applicable Transfer Notice, to recapture the Subject Space. Such
recapture notice shall cancel and terminate this Lease with respect to the
Subject Space as of the date stated in the Transfer Notice as the effective date
of the proposed Transfer until the last day of the term of the Transfer as set
forth in the Transfer Notice (or at Landlord’s option, shall cause the Transfer
to be made to Landlord or its agent, in which case the parties shall execute the
Transfer documentation promptly thereafter). In the event of a recapture by
Landlord, if this Lease shall be canceled with respect to less than the entire
Premises, the Rent reserved herein shall be prorated on the basis of the number
of rentable square feet retained by Tenant in proportion to the number of
rentable square feet contained in the Premises, and this Lease as so amended
shall continue thereafter in full force and effect, and upon request of either
party, the parties shall execute written

-45-

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

 

confirmation of the same. If Landlord declines, or fails to elect in a timely
manner to recapture the Subject Space under this Section 14.4, then, provided
Landlord has consented to the proposed Transfer, Tenant shall be entitled to
proceed to transfer the Subject Space to the proposed Transferee, subject to
provisions of this Article 14.
     14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the TCCs
of this Lease shall in no way be deemed to have been waived or modified,
(ii) such consent shall not be deemed consent to any further Transfer by either
Tenant or a Transferee, (iii) Tenant shall deliver to Landlord, promptly after
execution, an original executed copy of all documentation pertaining to the
Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall furnish
upon Landlord’s request a complete statement, certified by an independent
certified public accountant, or Tenant’s chief financial officer, setting forth
in detail the computation of any Transfer Premium Tenant has derived and shall
derive from such Transfer, and (v) no Transfer relating to this Lease or
agreement entered into with respect thereto, whether with or without Landlord’s
consent, shall relieve Tenant or any guarantor of the Lease from any liability
under this Lease, including, without limitation, in connection with the Subject
Space. Landlord or its authorized representatives shall have the right at all
reasonable times to audit the books, records and papers of Tenant relating to
any Transfer, and shall have the right to make copies thereof. If the Transfer
Premium respecting any Transfer shall be found understated, Tenant shall, within
thirty (30) days after demand, pay the deficiency, and if understated by more
than three and one-half percent (3.5%), Tenant shall pay Landlord’s costs of
such audit.
     14.6 Additional Transfers. For purposes of this Lease, the term “Transfer”
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of fifty percent (50%) or more of
the partners, or transfer of fifty percent (50%) or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution of Tenant in a
manner that does not result in a continuing entity that would be liable under
the terms of this Lease, or (B) the sale or other transfer of an aggregate of
fifty percent (50%) or more of the voting shares of Tenant (other than to
immediate family members by reason of gift or death), within a twelve (12)-month
period, or (C) the sale, mortgage, hypothecation or pledge of an aggregate of
fifty percent (50%) or more of the value of the unencumbered assets of Tenant
within a twelve (12)-month period.
     14.7 Occurrence of Default. Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, Landlord shall have the right to: (i) treat
such Transfer as cancelled and repossess the Subject Space by any lawful means,
or (ii) require that such Transferee attorn to and recognize Landlord as its
landlord under any such Transfer. If Tenant shall be in default under this
Lease, Landlord is hereby irrevocably authorized, as Tenant’s agent and
attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant’s obligations under this Lease) until such default is cured. Such
Transferee shall rely on any representation by Landlord that Tenant is in
default hereunder, without any need for confirmation thereof by Tenant. Upon any
assignment, the assignee shall assume in writing all obligations and covenants
of Tenant thereafter to be performed or observed under this Lease. No collection
or acceptance of rent by Landlord from

-46-

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

 

any Transferee shall be deemed a waiver of any provision of this Article 14 or
the approval of any Transferee or a release of Tenant from any obligation under
this Lease, whether theretofore or thereafter accruing. In no event shall
Landlord’s enforcement of any provision of this Lease against any Transferee be
deemed a waiver of Landlord’s right to enforce any term of this Lease against
Tenant or any other person. If Tenant’s obligations hereunder have been
guaranteed, Landlord’s consent to any Transfer shall not be effective unless the
guarantor also consents to such Transfer.
     14.8 Non-Transfers. Notwithstanding anything to the contrary contained in
this Article 14, (i) an assignment or subletting of all or a portion of the
Premises to an affiliate of Tenant (an entity which is controlled by, controls,
or is under common control with, Tenant), (ii) an assignment of the Premises to
an entity which acquires all or substantially all of the assets or interests
(partnership, stock or other) of Tenant, (iii) an assignment of the Premises to
an entity which is the resulting entity of a merger or consolidation of Tenant,
or (iv) a sale of corporate shares of capital stock in Tenant in connection with
an transaction resulting in Tenant being a privately held corporation, shall not
be deemed a Transfer under this Article 14 (any such assignee or sublessee
described in items (i) through (iv) of this Section 14.8 hereinafter referred to
as a “Permitted Non-Transferee”), provided that (a) Tenant notifies Landlord of
any such assignment or sublease and promptly supplies Landlord with any
documents or information reasonably requested by Landlord regarding such
transfer or transferee as set forth above, (b) such assignment or sublease is
not a subterfuge by Tenant to avoid its obligations under this Lease, (c) any
transferee under this Section 14.8 shall be of a character and reputation
consistent with the quality of the Building, and (d) such transferee shall have
a tangible net worth (not including goodwill as an asset) computed in accordance
with generally accepted accounting principles (“Net Worth”) at least equal to
the greater of (1) the Net Worth of Tenant immediately prior to such assignment
or sublease, and (2) the Net Worth of the Original Tenant on the date of this
Lease. An assignee of Tenant’s entire interest in this Lease who qualifies as a
Permitted Non-Transferee may also be referred to herein as a “Non-Transferee
Assignee.” “Control,” as used in this Section 14.8, shall mean the ownership,
directly or indirectly, of at least fifty-one percent (51%) of the voting
securities of, or possession of the right to vote, in the ordinary direction of
its affairs, of at least fifty-one percent (51%) of the voting interest in, any
person or entity.
ARTICLE 15
SURRENDER OF PREMISES; OWNERSHIP AND
REMOVAL OF TRADE FIXTURES
     15.1 Surrender of Premises. No act or thing done by Landlord or any agent
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord. The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated. The voluntary or
other surrender of this Lease by Tenant, whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a

-47-

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

 

merger, and at the option of Landlord shall operate as an assignment to Landlord
of all subleases or subtenancies affecting the Premises or terminate any or all
such sublessees or subtenancies.
     15.2 Removal of Tenant Property by Tenant. Upon the expiration of the Lease
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in as good order and condition as when Tenant took possession and as
thereafter improved by Landlord and/or Tenant, reasonable wear and tear and
repairs which are specifically made the responsibility of Landlord hereunder
excepted. Upon such expiration or termination, Tenant shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, and such items of furniture, equipment, cabling (data, voice,
electrical, etc), business and trade fixtures, free-standing cabinet work,
movable partitions and other articles of personal property owned by Tenant or
installed or placed by Tenant at its expense in the Premises, and such similar
articles of any other persons claiming under Tenant, as Landlord may, in its
sole discretion, require to be removed, and Tenant shall repair at its own
expense all damage to the Premises and Buildings resulting from such removal.
ARTICLE 16
HOLDING OVER
     If Tenant holds over in all or any portion of the Premises after the
expiration of the Lease Term or earlier termination thereof, with or without the
express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and shall not constitute a renewal hereof or an extension
for any further term, and in such case Rent shall be payable at a monthly rate
equal to the product of (i) the Rent applicable during the last rental period of
the Lease Term under this Lease, and (ii) a percentage equal to one hundred
fifty percent (150%). Such month-to-month tenancy shall be subject to every
other applicable term, covenant and agreement contained herein. Nothing
contained in this Article 16 shall be construed as consent by Landlord to any
holding over by Tenant, and Landlord expressly reserves the right to require
Tenant to surrender possession of the Premises to Landlord as provided in this
Lease upon the expiration or other termination of this Lease. The provisions of
this Article 16 shall not be deemed to limit or constitute a waiver of any other
rights or remedies of Landlord provided herein or at law. If Tenant fails to
surrender the Premises upon the termination or expiration of this Lease, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnify and hold Landlord harmless from all loss, costs
(including reasonable attorneys’ fees) and liability resulting from such
failure, including, without limiting the generality of the foregoing, any claims
made by any succeeding tenant founded upon such failure to surrender and any
lost profits to Landlord resulting therefrom.
ARTICLE 17
ESTOPPEL CERTIFICATES
     Within ten (10) business days following a request in writing by Landlord,
Tenant shall execute, acknowledge and deliver to Landlord an estoppel
certificate, which, as submitted by Landlord, shall be substantially in the form
of Exhibit E, attached hereto (or such other

-48-

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

 

commercially reasonable form as may be required by any prospective mortgagee or
purchaser of the Project, or any portion thereof), indicating therein any
exceptions thereto that may exist at that time, and shall also contain any other
information reasonably requested by Landlord or Landlord’s mortgagee or
prospective mortgagee. Any such certificate may be relied upon by any
prospective mortgagee or purchaser of all or any portion of the Project. Tenant
shall execute and deliver whatever other instruments may be reasonably required
for such purposes. If at any time during the Lease Term, Landlord elects to sell
or refinance the Project or any Building, Landlord may require Tenant to provide
Landlord with a current financial statement and financial statements of the two
(2) years prior to the current financial statement year. Such statements shall
be prepared in accordance with generally accepted accounting principles and, if
such is the normal practice of Tenant, shall be audited by an independent
certified public accountant. Notwithstanding the foregoing, in the event that
(i) stock in the entity which constitutes Tenant under this Lease (as opposed to
an entity that “controls” Tenant or is otherwise an “affiliate” of Tenant, as
those terms are defined in Section 14.8 of this Lease) is publicly traded on a
national stock exchange, and (ii) Tenant has it own, separate and distinct 10K
and 10Q filing requirements (as opposed joint or cumulative filings with an
entity that controls Tenant or with entities which are otherwise Affiliates of
Tenant), then Tenant’s obligation to provide Landlord with a copies of its
financial statements shall be deemed satisfied. Failure of Tenant to timely
execute, acknowledge and deliver such estoppel certificate or other instruments
shall constitute an acceptance of the Premises and an acknowledgment by Tenant
that statements included in the estoppel certificate are true and correct,
without exception.
ARTICLE 18
SUBORDINATION
     This Lease shall be subject and subordinate to all present and future
ground or underlying leases of the Building or Project and to the lien of any
mortgage, trust deed or other encumbrances now or hereafter in force against the
Building or Project or any part thereof, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages, trust deeds or other
encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto (collectively, the
"Superior Holders”); provided, however, that in consideration of and a condition
precedent to Tenant’s agreement to subordinate this Lease, shall be the receipt
by Tenant of a non-disturbance agreement in the Superior Holders’ standard form,
provided that such standard form shall (i) require such Superior Holder to
accept this Lease, and not to disturb Tenant’s possession, so long as Tenant is
not in default under the terms of this Lease beyond any applicable notice and
cure period, and (ii) not materially increase Tenant’s obligations under this
Lease (a “SNDAA”). Landlord shall use commercially reasonable efforts to deliver
to Tenant a SNDAA from any current Superior Holder on or before the Lease
Commencement Date. Tenant covenants and agrees in the event any proceedings are
brought for the foreclosure of any such mortgage or deed in lieu thereof (or if
any ground lease is terminated), to attorn, without any deductions or set-offs
whatsoever, to the lienholder or purchaser or any successors thereto upon any
such foreclosure sale or deed in lieu thereof (or to the ground lessor), if so
requested to do so by such purchaser or lienholder or ground lessor, and to
recognize such purchaser or lienholder or ground lessor as the lessor under this
Lease, provided such lienholder or purchaser or ground

-49-

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

 

lessor shall agree to accept this Lease and not disturb Tenant’s occupancy, so
long as Tenant timely pays the rent and observes and performs the TCCs of this
Lease to be observed and performed by Tenant. Landlord’s interest herein may be
assigned as security at any time to any lienholder. Tenant shall, within fifteen
(15) days of request by Landlord, execute a commercially reasonable
Non-Disturbance Agreement and/or other reasonable instruments or assurances,
reasonably acceptable to Tenant, as may reasonably be required to evidence or
confirm the subordination or superiority of this Lease to any such mortgages,
trust deeds, ground leases or underlying leases. Except as otherwise expressly
set forth in any Non-Disturbance Agreement entered into by Tenant and any
current or future lender, ground lessor or other lienholder, Tenant waives the
provisions of any current or future statute, rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely
affect this Lease and the obligations of the Tenant hereunder in the event of
any foreclosure proceeding or sale.
ARTICLE 19
DEFAULTS; REMEDIES
     19.1 Events of Default. The occurrence of any of the following shall
constitute a default of this Lease by Tenant:
          19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due, which
failure is not cured within three (3) business days after written notice from
Landlord that said amount was not paid when due; or
          19.1.2 Except where a specific time period is otherwise set forth for
Tenant’s performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this
Section 19.1.2, any failure by Tenant to observe or perform any other provision,
covenant or condition of this Lease to be observed or performed by Tenant where
such failure continues for twenty (20) days after written notice thereof from
Landlord to Tenant; provided that if the nature of such default is such that the
same cannot reasonably be cured within a twenty (20) day period, Tenant shall
not be deemed to be in default if it diligently commences such cure within such
period and thereafter diligently proceeds to rectify and cure such default, but
in no event exceeding a period of time in excess of thirty (30) days after
written notice thereof from Landlord to Tenant; or
          19.1.3 To the extent permitted by law, a general assignment by Tenant
or any guarantor of this Lease for the benefit of creditors, or the taking of
any corporate action in furtherance of bankruptcy or dissolution whether or not
there exists any proceeding under an insolvency or bankruptcy law, or the filing
by or against Tenant or any guarantor of any proceeding under an insolvency or
bankruptcy law, unless in the case of a proceeding filed against Tenant or any
guarantor the same is dismissed within sixty (60) days, or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant or any guarantor, unless possession is restored to Tenant or such
guarantor within thirty (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant’s assets located upon
the Premises or of Tenant’s interest in this Lease, unless such seizure is
discharged within thirty (30) days; or

-50-

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

 

          19.1.4 Abandonment, pursuant to California Civil Code Section 1951.3,
of the Premises by Tenant; or
          19.1.5 The failure by Tenant to observe or perform according to the
provisions of Articles 5, 14, 17 or 18 of this Lease where such failure
continues for more than two (2) business days after notice from Landlord.
     The notice periods provided herein are in lieu of, and not in addition to,
any notice periods provided by law.
     19.2 Remedies Upon Default. Upon the occurrence of any event of default by
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.
          19.2.1 Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor;
and Landlord may recover from Tenant the following:
               (a) The worth at the time of award of any unpaid rent which has
been earned at the time of such termination; plus
               (b) 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 rental loss that Tenant proves could have been
reasonably avoided; plus
               (c) The worth at the time of award of the amount by which the
unpaid rent for the balance of the Lease Term after the time of award exceeds
the amount of such rental loss that Tenant proves could have been reasonably
avoided; plus
               (d) 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 would be likely to
result therefrom, specifically including but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and
               (e) At Landlord’s election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by applicable
law.
     The term “rent” as used in this Section 19.2 shall be deemed to be and to
mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in
Sections 19.2.1(a) and (b), above, the “worth at the time of award” shall be
computed by allowing interest at the Interest Rate. As used in Section
19.2.1(c),

-51-

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

 

above, the “worth at the time of award” shall be 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%).
          19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
          19.2.3 Landlord shall at all times have the rights and remedies (which
shall be cumulative with each other and cumulative and in addition to those
rights and remedies available under Sections 19.2.1 and 19.2.2, above, or any
law or other provision of this Lease), without prior demand or notice except as
required by applicable law, to seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof.
     19.3 Subleases of Tenant. Whether or not Landlord elects to terminate this
Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord’s sole discretion, succeed
to Tenant’s interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord’s election to succeed to Tenant’s interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
     19.4 Intentionally Omitted.
     19.5 Efforts to Relet. No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord’s interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant’s right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant’s
obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.
     19.6 Landlord Default. Notwithstanding anything to the contrary set forth
in this Lease, Landlord shall be in default in the performance of any obligation
required to be performed by Landlord pursuant to this Lease if Landlord fails to
perform such obligation within thirty (30) days after the receipt of notice from
Tenant specifying in detail Landlord’s failure to perform; provided, however, if
the nature of Landlord’s obligation is such that more than thirty (30) days are
required for its performance, then Landlord shall not be in default under this
Lease if it shall commence such performance within such thirty (30) day period
and thereafter diligently pursues the same to completion. Upon any such default
by Landlord under this Lease, Tenant may,

-52-

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

 

except as otherwise specifically provided in this Lease to the contrary,
exercise any of its rights provided at law or in equity. Any award from a court
or arbitrator in favor of Tenant requiring payment by Landlord which is not paid
by Landlord within the time period directed by such award, may be offset by
Tenant from Rent next due and payable under this Lease; provided, however,
Tenant may not deduct the amount of the award against more than fifty percent
(50%) of Base Rent next due and owing (until such time as the entire amount of
such judgment is deducted) to the extent following a foreclosure or a
deed-in-lieu of foreclosure.
ARTICLE 20
COVENANT OF QUIET ENJOYMENT
     Landlord covenants that Tenant, on paying the Rent, charges for services
and other payments herein reserved and on keeping, observing and performing all
the other TCCs, provisions and agreements herein contained on the part of Tenant
to be kept, observed and performed, shall, during the Lease Term, peaceably and
quietly have, hold and enjoy the Premises subject to the TCCs, provisions and
agreements hereof without interference by any persons lawfully claiming by or
through Landlord. The foregoing covenant is in lieu of any other covenant
express or implied.
ARTICLE 21
SECURITY DEPOSIT
     Landlord and Tenant hereby acknowledge that Landlord, pursuant to the terms
of the Existing Lease, currently holds a security deposit (the “Existing Lease
Security Deposit”) in the amount set forth in Section 8 of the Summary, as
security for the faithful performance by Tenant of all of its obligations under
the Existing Lease. Upon the Lease Commencement Date, the Existing Lease
Security Deposit shall become a surety deposit under the terms of this Lease
(the “Security Deposit”) as security for the faithful performance by Tenant of
all of its obligations under this Lease. If Tenant defaults with respect to any
provisions of this Lease, including, but not limited to, the provisions relating
to the payment of Rent, the removal of property and the repair of resultant
damage, Landlord may, without notice to Tenant, but shall not be required to
apply all or any part of the Security Deposit for the payment of any Rent or any
other sum in default and Tenant shall, upon demand therefor, restore the
Security Deposit to its original amount. Any unapplied portion of the Security
Deposit shall be returned to Tenant, or, at Landlord’s option, to the last
assignee of Tenant’s interest hereunder, within sixty (60) days following the
expiration of the Lease Term. Tenant shall not be entitled to any interest on
the Security Deposit. Tenant hereby waives the provisions of Section 1950.7 of
the California Civil Code, or any successor statute.
ARTICLE 22
ROOFTOP RIGHTS
     Tenant shall have the right to install equipment including, without
limitation, cable, wiring, HVAC, rooftop antennae, and other equipment
associated with Tenant’s use of the

-53-

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

 

Premises on the roofs of the Buildings (the “Rooftop Equipment”) and in the
pathways, shafts, risers, raceways, telephone closets, service areas and utility
connections and entries into and through the Buildings, servicing the business
conducted by Tenant from within the Premises. Any such installation shall be at
Tenant’s sole cost and expense and shall be performed pursuant to the terms and
conditions or Article 8 of this Lease. The physical appearance and the size of
the Rooftop Equipment shall be subject to Landlord’s reasonable approval, the
location of any such installation of the Rooftop Equipment shall be designated
by Tenant subject to Landlord’s reasonable approval and Landlord may require
Tenant to install screening around such Rooftop Equipment, at Tenant’s sole cost
and expense, as reasonably designated by Landlord. Tenant shall keep all such
Rooftop Equipment in good order, condition and repair, at Tenant’s sole cost and
expense. Tenant’s installation of the Rooftop Equipment shall be done in such a
manner as not to void any existing roof warranties in place at the Buildings
(and Tenant shall indemnify and hold Landlord harmless in the event any such
warranties are voided as a result of the installation of any Rooftop Equipment
by Tenant). Tenant shall, at Tenant’s sole cost and expense, be responsible to
repair any damage to the Buildings, including the roof and roof membrane, caused
by the installation of any Rooftop Equipment. At the expiration or earlier
termination of this Lease, Tenant shall remove any Rooftop Equipment installed
by or on behalf of Tenant and repair any damage to the roof or roof membrane
caused by the installation or removal of the Rooftop Equipment by Tenant. Tenant
shall not be entitled to license its Rooftop Equipment, or the right to install
equipment on the rooftops, to any unrelated third party (other than a
Non-Transferee Assignee in connection with a Non-Transfer), nor shall Tenant be
permitted to receive any revenues, fees or any other consideration for the use
of such Rooftop Equipment by an unrelated third party. Tenant hereby
acknowledges Landlord’s continued right to itself utilize the rooftop space. The
rights contained in this Article 22 shall be personal to the Original Tenant and
any Permitted Assignee, and may only be exercised by the Original Tenant or a
Permitted Assignee (and not any other assignee, sublessee or other transferee of
the Original Tenant’s interest in this Lease) if Tenant is in occupancy of at
least seventy percent (70%) of the entire Premises, provided that for purposes
of this Article 22, the Original Tenant or Permitted Assignee, as the case may
be, shall be deemed to be in occupancy of any space sublet to any Transferee
pursuant to a sublease consented to by Landlord pursuant to the terms of
Article 14 of this Lease. In addition, Landlord hereby acknowledges that
following the proper exercise of Tenant’s right to install Rooftop Equipment as
set forth herein, Tenant may thereafter elect to install such equipment on
behalf of a subtenant approved by Landlord pursuant to the terms and conditions
of Article 14, below.
ARTICLE 23
SIGNS
     23.1 Full Floors. Subject to Landlord’s prior written approval, in its
reasonable discretion, and provided all signs are in keeping with the quality,
design and style of the Building and Project, Tenant, if the Premises comprise
an entire floor of the Building, at its sole cost and expense, may install
identification signage anywhere in the Premises including in the elevator lobby
of the Premises, provided that such signs must not be visible from the exterior
of the Building.

-54-

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

 

     23.2 Multi-Tenant Floors. If other tenants occupy space on the floor on
which the Premises is located, Tenant’s identifying signage shall be provided by
Landlord, at Tenant’s cost, and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with
Landlord’s Building standard signage program.
     23.3 Prohibited Signage and Other Items. Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord may be removed without notice by Landlord at the
sole expense of Tenant. Tenant may not install any signs on the exterior or roof
of the Project or the Common Areas. Any signs, window coverings, or blinds (even
if the same are located behind the Landlord-approved window coverings for the
Building), or other items visible from the exterior of the Premises or Building,
shall be subject to the prior approval of Landlord, in its sole discretion.
     23.4 Monument and Building-Top Signage.
          23.4.1 In General. In addition to the signage rights set forth above
in this Article 23, Tenant shall be entitled to install the following signage in
connection with Tenant’s lease of the Premises (collectively, the “Tenant’s
Signage”):

  (i)   In the event Landlord elects, in Landlord’s sole and absolute
discretion, to construct a Building monument sign near the main entrance to any
Building, then Tenant shall be entitled to install one (1) sign identifying
Tenant’s name and/or logo in the most prominent (i.e., top) position on such
monument sign, in connection with Tenant’s lease of the Premises; provided,
however, such right shall be subordinate to the rights to other tenant in the
Project pursuant to leases in effect as of the date of this Lease; and     (ii)
  Non-exclusive Building-top signage consisting of one (1) building-top sign
identifying Tenant’s name and/or logo located at the top of each of Building F
and Building A of a side of such Building that can be seen from Highway 101.

          23.4.2 Specifications and Permits. Tenant’s Signage shall set forth
Tenant’s name and logo as determined by Tenant in its sole discretion; provided,
however, in no event shall Tenant’s Signage include an “Objectionable Name,” as
that term is defined in Section 23.4.3, below. The graphics, materials, color,
design, lettering, lighting, size, illumination, specifications and exact
location of Tenant’s Signage (collectively, the “Sign Specifications”) shall be
subject to the prior written approval of Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed, and shall be consistent and
compatible with the quality and nature of the Project and Landlord Building
standard signage specifications. In addition, Tenant’s Signage shall be subject
to Tenant’s receipt of all required governmental permits and approvals and shall
be subject to all applicable laws and to any covenants, conditions and
restrictions affecting the Project. In the event Tenant does not receive the
necessary governmental approvals and permits for Tenant’s Signage, Tenant’s and
Landlord’s rights and obligations under the remaining terms and conditions of
the Lease shall be unaffected.

-55-

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

 

          23.4.3 Objectionable Name. To the extent the Original Tenant desires
to change the name and/or logo set forth on Tenant’s Signage, such name and/or
logo shall not have a name which relates to an entity which is of a character or
reputation, or is associated with a political faction or orientation, which is
inconsistent with the quality of the Project, or which would otherwise
reasonably offend a landlord of the Comparable Buildings (an “Objectionable
Name”). The parties hereby agree that the name “IXIA” or any reasonable
derivation thereof, shall not be deemed an Objectionable Name.
          23.4.4 Termination of Right to Tenant’s Signage. The rights contained
in this Section 23.4 shall be personal to the Original Tenant and any Permitted
Assignee, and may only be exercised by the Original Tenant or a Permitted
Assignee (and not any other assignee, sublessee or transferee of the Original
Tenant’s interest in the Lease) if Tenant is in occupancy of at least seventy
percent (70%) of the entire Premises, provided that purposes of this
Section 23.4.4, the Original Tenant or Permitted Assignee, as the case may be,
shall be deemed to be in occupancy of any space sublet to any Transferee
pursuant to a sublease consented to by Landlord pursuant to the terms of
Article 14 of this Lease. In addition, Landlord hereby acknowledges that
following the proper exercise of Tenant’s signage rights as set forth herein,
Tenant may thereafter elect to install such signage on behalf of a subtenant
approved by Landlord pursuant to the terms and conditions of Article 14, below,
provided such subtenant occupies at lease seventy percent (70%) of the Premises.
          23.4.5 Cost and Maintenance. The costs of Tenant’s Signage and the
installation, design, construction and any and all other costs associated with
Tenant’s Signage, including, without limitation, utility charges and hook-up
fees, permits, and maintenance and repairs, shall be the sole responsibility of
Tenant; provided however, that, at Landlord’s option, Landlord may install
Tenant’s Signage and Tenant shall pay Landlord the cost thereof, including a
reasonable amount sufficient to reimburse Landlord for all overhead, general
conditions, fees and other costs or expenses arising from the installation of
Tenant’s Signage. Should Tenant’s Signage require repairs and/or maintenance, as
determined in Landlord’s reasonable judgment, Landlord shall have the right to
provide notice thereof to Tenant and Tenant (except as set forth below) shall
cause such repairs and/or maintenance to be performed within thirty (30) days
after receipt of such notice from Landlord, at Tenant’s sole cost and expense;
provided, however, if such repairs and/or maintenance are reasonably expected to
require longer than thirty (30) days to perform, Tenant shall commence such
repairs and/or maintenance within such thirty (30) day period and shall
diligently prosecute such repairs and maintenance to completion. Should Tenant
fail to perform such repairs and/or maintenance within the periods described in
the immediately preceding sentence, Landlord shall, upon the delivery of an
additional five (5) business days’ prior written notice, have the right to cause
such work to be performed and to charge Tenant as Additional Rent for the actual
cost of such work. Upon the expiration or earlier termination of the Lease,
Tenant shall, at Tenant’s sole cost and expense, cause Tenant’s Signage to be
removed and shall cause the areas in which such Tenant’s Signage was located to
be restored to the condition existing immediately prior to the placement of such
Tenant’s Signage (reasonable wear and tear excepted). If Tenant fails to timely
remove Tenant’s Signage or to restore the areas in which such Tenant’s Signage
was located, as provided in the immediately preceding sentence, then Landlord
may perform such work, and all actual costs incurred by Landlord in so
performing shall be reimbursed by Tenant to Landlord within thirty (30) days
after Tenant’s receipt of an invoice therefor. The terms and conditions of this
Section 23.4.5 shall survive the

-56-

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

 

expiration or earlier termination of the Lease. In the event the rooftop
mechanical shielding is modified by Landlord and, as a result Tenant’s Signage
must be redesigned or relocated, then Landlord agrees that following such
redesign or relocation Tenant’s signage shall be no less prominent (vis-à-vis
other Tenant signage on the affected Building), than Tenant’s Signage prior to
such redesign or relocation.
ARTICLE 24
COMPLIANCE WITH LAW
     Tenant shall not do anything or suffer anything to be done in or about the
Premises or the Project which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in force or
which may hereafter be enacted or promulgated (collectively, “Applicable Laws”).
At its sole cost and expense, Tenant shall promptly comply with all such
Applicable Laws which relate to (i) Tenant’s use of the Premises for non-general
office use, (ii) the Alterations or Tenant Improvements in the Premises, or
(iii) the Base Building, but, as to the Base Building, only to the extent such
obligations are triggered by Tenant’s Alterations, the Tenant Improvements, or
use of the Premises for non-general office use. Should any standard or
regulation now or hereafter be imposed on Landlord or Tenant by a state, federal
or local governmental body charged with the establishment, regulation and
enforcement of occupational, health or safety standards for employers,
employees, landlords or tenants, then Tenant agrees to the extent the standard
or regulation relates to Tenant’s use of the Premises, at its sole cost and
expense, to comply promptly with such standards or regulations. The judgment of
any court of competent jurisdiction or the admission of Tenant in any judicial
action, regardless of whether Landlord is a party thereto, that Tenant has
violated any of said governmental measures, shall be conclusive of that fact as
between Landlord and Tenant. Landlord shall comply with all Applicable Laws
relating to the Base Building, provided that compliance with such Applicable
Laws is not the responsibility of Tenant under this Article 24, and provided
further that Landlord’s failure to comply therewith would prohibit Tenant from
obtaining or maintaining a certificate of occupancy for the Premises, or would
unreasonably and materially affect the safety of Tenant’s employees or create a
significant health hazard for Tenant’s employees. Landlord shall be permitted to
include in Operating Expenses any costs or expenses incurred by Landlord under
this Article 24 to the extent consistent with the terms of Section 4.2.4, above.
ARTICLE 25
LATE CHARGES
     If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord’s designee when due, then Tenant shall pay to
Landlord a late charge equal to five percent (5%) of the overdue amount plus any
attorneys’ fees incurred by Landlord by reason of Tenant’s failure to pay Rent
and/or other charges when due hereunder; provided, however, with regard to the
first such failure in any twelve (12) month period, Landlord will waive such
late charge to the extent Tenant cures such failure within three (3) days
following Tenant’s receipt of written notice from Landlord that the same was not
received when due. The late charge shall be deemed Additional Rent and the right
to require it shall be in addition to all

-57-

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

 

of Landlord’s other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord’s remedies in any
manner. In addition to the late charge described above, any Rent or other
amounts owing hereunder which are not paid within ten (10) days after the date
they are due shall bear interest from the date when due until paid at the
“Interest Rate.” For purposes of this Lease, the “Interest Rate” shall be an
annual rate equal to the lesser of (i) the annual “Bank Prime Loan” rate cited
in the Federal Reserve Statistical Release Publication H.15(519), published
weekly (or such other comparable index as Landlord and Tenant shall reasonably
agree upon if such rate ceases to be published), plus two (2) percentage points,
and (ii) the highest rate permitted by applicable law.
ARTICLE 26
LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
     26.1 Landlord’s Cure. All covenants and agreements to be kept or performed
by Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost
and expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant’s part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.
     26.2 Tenant’s Reimbursement. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord
to Tenant of statements therefor: (i) sums equal to expenditures reasonably made
and obligations incurred by Landlord in connection with the remedying by
Landlord of Tenant’s defaults pursuant to the provisions of Section 26.1;
(ii) sums equal to all losses, costs, liabilities, damages and expenses referred
to in Article 10 of this Lease; and (iii) sums equal to all expenditures made
and obligations incurred by Landlord in collecting or attempting to collect the
Rent or in enforcing or attempting to enforce any rights of Landlord under this
Lease or pursuant to law, including, without limitation, all legal fees and
other amounts so expended. Tenant’s obligations under this Section 26.2 shall
survive the expiration or sooner termination of the Lease Term.
ARTICLE 27
ENTRY BY LANDLORD
     Landlord reserves the right at all reasonable times (during Building Hours
with respect to items (i) and (ii) below) and upon at least twenty-four
(24) hours prior notice to Tenant (except in the case of an emergency) to enter
the Premises to (i) inspect them; (ii) show the Premises to prospective
purchasers, or to current or prospective mortgagees, ground or underlying
lessors or insurers, or during the last twelve (12) months of the Lease Term, to
prospective tenants; (iii) post notices of nonresponsibility; or (iv) alter,
improve or repair the Premises or the Buildings, or for structural alterations,
repairs or improvements to the Buildings or the Buildings’ systems and
equipment. Notwithstanding anything to the contrary contained in this
Article 27, Landlord may enter the Premises at any time to (A) perform services
required of Landlord;

-58-

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

 

(B) take possession due to any breach of this Lease in the manner provided
herein; and (C) perform any covenants of Tenant which Tenant fails to perform.
Landlord may make any such entries without the abatement of Rent, except as
otherwise provided in this Lease, and may take such reasonable steps as required
to accomplish the stated purposes; provided, however, except for (x)
emergencies, (y) repairs, alterations, improvements or additions required by
governmental or quasi-governmental authorities or court order or decree, or (z)
repairs which are the obligation of Tenant hereunder, any such entry shall be
performed in a manner so as not to unreasonably interfere with Tenant’s use of
the Premises and shall be performed after normal business hours if reasonably
practical. With respect to items (y) and (z) above, Landlord shall use
commercially reasonable efforts to not materially interfere with Tenant’s use
of, or access to, the Premises. Tenant hereby waives any claims for damages or
for any injuries or inconvenience to or interference with Tenant’s business
and/or lost profits occasioned thereby, provided that the foregoing shall not
limit Landlord’s liability, if any, pursuant to applicable law for personal
injury and property damage to the extent caused by the gross negligence or
willful misconduct of Landlord. Provided that Landlord employs commercially
reasonable efforts to minimize interference with the conduct of Tenant’s
business in connection with entries into the Premises, Tenant hereby waives any
claims for any loss of occupancy or quiet enjoyment of the Premises in
connection with such entries. For each of the above purposes, Landlord shall at
all times have a key with which to unlock all the doors in the Premises,
excluding Tenant’s vaults, safes and special security areas designated in
advance by Tenant. In an emergency, Landlord shall have the right to use any
means that Landlord may deem proper to open the doors in and to the Premises.
Any entry into the Premises by Landlord in the manner hereinbefore described
shall not be deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an actual or constructive eviction of Tenant from any portion
of the Premises. No provision of this Lease shall be construed as obligating
Landlord to perform any repairs, alterations or decorations except as otherwise
expressly agreed to be performed by Landlord herein.
ARTICLE 28
TENANT PARKING
     28.1 General. Commencing on the Lease Commencement Date, Tenant shall have
the right to use the amount of parking passes set forth in Section 9 of the
Summary, on a monthly basis throughout the Lease Term, which parking passes
shall pertain to the Project parking facilities (both surface and covered
parking facilities). Such use shall be free of charge during the Lease Term
(including the Option Term, if applicable). Notwithstanding the immediately
preceding sentence, Tenant shall be responsible for the full amount of any taxes
imposed by any governmental authority in connection with the renting of such
parking passes by Tenant or the use of the Project parking facilities by Tenant.
Tenant’s continued right to use the parking passes is conditioned upon Tenant
abiding by all rules and regulations which are prescribed from time to time for
the orderly operation and use of the parking facilities where the parking passes
are located, including any sticker or other identification system established by
Landlord, Tenant’s cooperation in seeing that Tenant’s employees and visitors
also comply with such rules and regulations and Tenant not being in default
under this Lease. Landlord specifically reserves the right to change the size,
configuration, design, layout and all other aspects of the Project parking
facilities at any time and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of Rent
under this Lease, from time to time,

-59-

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

 

temporarily close-off or restrict access to the Project parking facilities for
purposes of permitting or facilitating any such construction, alteration or
improvements. Landlord may delegate its responsibilities hereunder to a parking
operator in which case such parking operator shall have all the rights of
control attributed hereby to the Landlord. The parking passes allocated to
Tenant pursuant to this Article 28 are provided to Tenant solely for use by
Tenant’s own personnel and such passes may not be transferred, assigned,
subleased or otherwise alienated by Tenant separate from Tenant’s interest in
the Premises without Landlord’s prior approval. Tenant may validate visitor
parking by such method or methods as the Landlord may establish, at the
validation rate from time to time generally applicable to visitor parking. In
the event Tenant rents from Landlord more parking passes or reserved parking
spaces than set forth in Section 9 of the Summary (other than pursuant to
Section 28.2, below), then Tenant shall pay to Landlord for such parking passes
or parking spaces, as applicable, on a monthly basis the prevailing rate charged
by Landlord from time to time at the location of such parking passes and/or
spaces, as applicable.
     28.2 Parking Right of First Refusal. In addition to the rights set forth in
Section 28.1, above, Tenant shall have a right of first refusal (a “Parking
ROFO”) with respect to any reserved parking spaces located in the Building F
Parking Garage that become available for rent to third parties during the Lease
Term. Landlord shall notify Tenant from time-to-time when and if Landlord
receives a bone fide third-party offer (i.e., an offer that Landlord would be
willing to accept) to rent reserved parking spaces in the Building F Parking
Garage. Pursuant to such Parking ROFO, Landlord shall offer to lease to Tenant
the applicable reserved parking spaces at the same rent as set forth in such
bone fide third-party offer. If Tenant wishes to exercise Tenant’s Parking ROFO
with respect to such reserved parking spaces, then within three (3) business
days of delivery of such notice to Tenant, Tenant shall deliver notice to
Landlord of Tenant’s exercise of its Parking ROFO with respect to all of the
reserved spaces described in Landlord’s notice to Tenant at the rent set forth
in such notice. The rights contained in this Section 28.2 shall be exercisable
only so long as the Tenant occupies at least seventy percent (70%) of the entire
Premises, provided that purposes of this Section 28.2, the Tenant shall be
deemed to be in occupancy of any space sublet to any Transferee pursuant to a
sublease consented to by Landlord pursuant to the terms of Article 14 of this
Lease. In addition, Landlord hereby acknowledges that following the proper
exercise of Tenant’s Parking ROFO as set forth herein, Tenant may thereafter
elect to allow a subtenant approved by Landlord pursuant to the terms and
conditions of Article 14, below, to use such reserved parking spaces. Tenant
shall not have the right to exercise its Parking ROFO if Tenant is then in
default under this Lease.
ARTICLE 29
MISCELLANEOUS PROVISIONS
     29.1 Terms; Captions. The words “Landlord” and “Tenant” as used herein
shall include the plural as well as the singular. The necessary grammatical
changes required to make the provisions hereof apply either to corporations or
partnerships or individuals, men or women, as the case may require, shall in all
cases be assumed as though in each case fully expressed. The captions of
Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.

-60-

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

 

     29.2 Binding Effect. Subject to all other provisions of this Lease, each of
the covenants, conditions and provisions of this Lease shall extend to and
shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.
     29.3 No Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant’s obligations under this Lease.
     29.4 Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way materially and adversely change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) days following a
request therefor. At the request of Landlord or any mortgagee or ground lessor,
Tenant agrees to execute a short form of Lease and deliver the same to Landlord
within ten (10) days following the request therefor.
     29.5 Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has
the right to transfer all or any portion of its interest in the Project or
Buildings and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord’s obligations hereunder after the date of transfer provided such
transferee shall have fully assumed and become liable for all obligations of
this Lease to be performed by Landlord, including the return of any Security
Deposit, and Tenant shall attorn to such transferee. Tenant further acknowledges
that Landlord may assign its interest in this Lease to a mortgage lender as
additional security and agrees that such an assignment shall not release
Landlord from its obligations hereunder and that Tenant shall continue to look
to Landlord for the performance of its obligations hereunder.
     29.6 Prohibition Against Recording. Except as provided in Section 29.4 of
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant.
     29.7 Landlord’s Title. Landlord’s title is and always shall be paramount to
the title of Tenant. Nothing herein contained shall empower Tenant to do any act
which can, shall or may encumber the title of Landlord.
     29.8 Relationship of Parties. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.

-61-

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

 

     29.9 Application of Payments. Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant’s
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
     29.10 Time of Essence. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.
     29.11 Partial Invalidity. If any term, provision or condition contained in
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
     29.12 No Warranty. In executing and delivering this Lease, Tenant has not
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.
     29.13 Exculpation. The liability of Landlord or the Landlord Parties to
Tenant for any default by Landlord under this Lease or arising in connection
herewith or with Landlord’s operation, management, leasing, repair, renovation,
alteration or any other matter relating to the Project or the Premises shall be
limited solely and exclusively to an amount which is equal to the lesser of
(a) the interest of Landlord in the Buildings or (b) the equity interest
Landlord would have in the Buildings if the Buildings were encumbered by
third-party debt in an amount equal to eighty percent (80%) of the value of the
Buildings (as such value is determined by Landlord), provided that in no event
shall such liability extend to any sales or insurance proceeds received by
Landlord or the Landlord Parties in connection with the Project, Buildings or
Premises. Neither Landlord, nor any of the Landlord Parties shall have any
personal liability therefor, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by, through
or under Tenant. The limitations of liability contained in this Section 29.13
shall inure to the benefit of Landlord’s and the Landlord Parties’ present and
future partners, beneficiaries, officers, directors, trustees, shareholders,
agents and employees, and their respective partners, heirs, successors and
assigns. Under no circumstances shall any present or future partner of Landlord
(if Landlord is a partnership), or trustee or beneficiary (if Landlord or any
partner of Landlord is a trust), have any liability for the performance of
Landlord’s obligations under this Lease. Notwithstanding any contrary provision
herein, neither Landlord nor the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with, Tenant’s business,
including but not limited to, loss of profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use, in each case,
however occurring.
     29.14 Entire Agreement. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease and this Lease
constitutes the parties’

-62-

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

 

entire agreement with respect to the leasing of the Premises and supersedes and
cancels any and all previous negotiations, arrangements, brochures, agreements
and understandings, if any, between the parties hereto or displayed by Landlord
to Tenant with respect to the subject matter thereof, and none thereof shall be
used to interpret or construe this Lease. None of the terms, covenants,
conditions or provisions of this Lease can be modified, deleted or added to
except in writing signed by the parties hereto.
     29.15 Right to Lease. Landlord reserves the absolute right to effect such
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Buildings or
Project. Tenant does not rely on the fact, nor does Landlord represent, that any
specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Buildings or Project.
     29.16 Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease and except as to Tenant’s obligations under Articles 5
and 24 of this Lease (collectively, a “Force Majeure”), notwithstanding anything
to the contrary contained in this Lease, shall excuse the performance of such
party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party’s performance caused by a Force Majeure.
     29.17 Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and
for all those claiming under Tenant, any and all rights now or hereafter
existing to redeem by order or judgment of any court or by any legal process or
writ, Tenant’s right of occupancy of the Premises after any termination of this
Lease.
     29.18 Notices. All notices, demands, statements, designations, approvals or
other communications (collectively, “Notices”) given or required to be given by
either party to the other hereunder or by law shall be in writing, shall be
(A) sent by United States certified or registered mail, postage prepaid, return
receipt requested (“Mail”), (B) transmitted by telecopy, if such telecopy is
promptly followed by a Notice sent by Mail, (C) delivered by a nationally
recognized overnight courier, or (D) delivered personally. Any Notice shall be
sent, transmitted, or delivered, as the case may be, to Tenant at the
appropriate address set forth in Section 10 of the Summary, or to such other
place as Tenant may from time to time designate in a Notice to Landlord, or to
Landlord at the addresses set forth below, or to such other places as Landlord
may from time to time designate in a Notice to Tenant. Any Notice will be deemed
given (i) three (3) days after the date it is posted if sent by Mail, (ii) the
date the telecopy is transmitted, (iii) the date the overnight courier delivery
is made, or (iv) the date personal delivery is made or attempted to be made. If
Tenant is notified of the identity and address of Landlord’s mortgagee or ground
or underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor written notice of any default by Landlord under the terms of
this Lease by registered or certified mail, and such mortgagee or ground or
underlying lessor shall be given a reasonable opportunity to cure such default
prior to Tenant’s exercising any remedy available to Tenant. As

-63-

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

 

of the date of this Lease, any Notices to Landlord must be sent, transmitted, or
delivered, as the case may be, to the following addresses:
MS LPC Malibu Property Holdings, LLC
c/o Lincoln Property Company
915 Wilshire Blvd., Suite 1660
Los Angeles, CA 90017
Attention: Ms. Ginger D. Dunbar
with copies to:
Allen Matkins Leck Gamble Mallory & Natsis LLP
1901 Avenue of the Stars, Suite 1800
Los Angeles, California 90067
Attention: Michael E. McFadden, Esq.
     29.19 Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.
     29.20 Authority. If Tenant is a corporation, trust or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so. In such event, Tenant shall, within ten (10) days after
execution of this Lease, deliver to Landlord satisfactory evidence of such
authority and, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant’s state of
incorporation and (ii) qualification to do business in California.
     29.21 Attorneys’ Fees. In the event that either Landlord or Tenant should
bring suit for the possession of the Premises, for the recovery of any sum due
under this Lease, or because of the breach of any provision of this Lease or for
any other relief against the other, then all costs and expenses, including
reasonable attorneys’ fees, incurred by the prevailing party therein 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.
     29.22 Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed
and enforced in accordance with the laws of the State of California. IN ANY
ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO
(I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA,
(II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) TO
THE EXTENT PERMITTED BY APPLICABLE LAW, IN THE INTEREST OF SAVING TIME AND
EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT
OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP
OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF

-64-

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

 

THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR
STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR
ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT SHALL NOT
INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH
COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE
RELEGATED TO AN INDEPENDENT ACTION AT LAW.
     29.23 Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of, option for or option
to lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
     29.24 Brokers. Landlord and Tenant hereby warrant to each other that they
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the “Brokers”), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, costs and expenses (including without
limitation reasonable attorneys’ fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any
real estate broker or agent, other than the Brokers, occurring by, through, or
under the indemnifying party.
     29.25 Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord’s expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.
     29.26 Project or Building Name and Signage. Landlord shall have the right
at any time to change the name of the Project or Buildings and to install, affix
and maintain any and all signs on the exterior and on the interior of the
Project or Buildings as Landlord may, in Landlord’s sole discretion, desire.
Tenant shall not use the name of the Project or Buildings or use pictures or
illustrations of the Project or Buildings in advertising or other publicity or
for any purpose other than as the address of the business to be conducted by
Tenant in the Premises, without the prior written consent of Landlord.
     29.27 Counterparts. This Lease may be executed in counterparts with the
same effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.
     29.28 Confidentiality. Tenant acknowledges that the content of this Lease
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant’s financial,
legal, and space planning consultants.

-65-

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

 

     29.29 Transportation Management. Tenant shall fully comply with all
governmentally mandated programs intended to manage parking, transportation or
traffic in and around the Buildings, and in connection therewith, to the extent
required by any such governmentally mandated program, Tenant shall take
responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities. The foregoing shall not preclude
Tenant from disputing or challenging a particular mandate or requirement so long
as any such dispute or challenge is made in compliance with applicable law.
     29.30 Building Renovations. It is specifically understood and agreed that
Landlord has made no representation or warranty to Tenant and has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or
decorate the Premises, Building, or any part thereof and that no representations
respecting the condition of the Premises or the Building have been made by
Landlord to Tenant except as specifically set forth herein or in the Tenant Work
Letter. However, Tenant hereby acknowledges that Landlord is currently
renovating or may during the Lease Term renovate, improve, alter, or modify
(collectively, the “Renovations”) the Project, the Building and/or the Premises
including without limitation the parking structure, common areas, systems and
equipment, roof, and structural portions of the same, which Renovations may
include, without limitation, (i) installing sprinklers in the Building common
areas and tenant spaces, (ii) modifying the common areas and tenant spaces to
comply with applicable laws and regulations, including regulations relating to
the physically disabled, seismic conditions, and building safety and security,
and (iii) installing new floor covering, lighting, and wall coverings in the
Building common areas, and in connection with any Renovations, Landlord may,
among other things, erect scaffolding or other necessary structures in the
Building, limit or eliminate access to portions of the Project, including
portions of the common areas, or perform work in the Building, which work may
create noise, dust or leave debris in the Building. Landlord shall use
commercially reasonable efforts to complete any Renovations in a manner which
does not materially, adversely affect Tenant’s use of or access to the Premises.
Notwithstanding the foregoing, but subject to the terms of Section 6.7 og this
Lease, Tenant hereby agrees that such Renovations and Landlord’s actions in
connection with such Renovations shall in no way constitute a constructive
eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall
have no responsibility or for any reason be liable to Tenant for any direct or
indirect injury to or interference with Tenant’s business arising from the
Renovations, nor shall Tenant be entitled to any compensation or damages from
Landlord for loss of the use of the whole or any part of the Premises or of
Tenant’s personal property or improvements resulting from the Renovations or
Landlord’s actions in connection with such Renovations, or for any inconvenience
or annoyance occasioned by such Renovations or Landlord’s actions.
     29.31 No Violation. Tenant hereby warrants and represents that neither its
execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys’ fees
and costs, arising from Tenant’s breach of this warranty and representation.

-66-

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

 

     29.32 Communications and Computer Lines. Tenant may install, maintain,
replace, remove or use any communications or computer wires and cables
(collectively, the “Lines”) at the Project in or serving the Premises, provided
that (i) Tenant shall obtain Landlord’s prior written consent, use an
experienced and qualified contractor approved in writing by Landlord, and comply
with all of the other provisions of Articles 7 and 8 of this Lease, (ii) an
acceptable number of spare Lines and space for additional Lines shall be
maintained for existing and future occupants of the Project, as determined in
Landlord’s reasonable opinion, (iii) the Lines therefor (including riser cables)
shall be (x) appropriately insulated to prevent excessive electromagnetic fields
or radiation, (y) surrounded by a protective conduit reasonably acceptable to
Landlord, and (z) identified in accordance with the “Identification
Requirements,” as that term is set forth hereinbelow, (iv) any new or existing
Lines servicing the Premises shall comply with all applicable governmental laws
and regulations, (v) as a condition to permitting the installation of new Lines,
Tenant shall remove existing Lines located in or serving the Premises and repair
any damage in connection with such removal, and (vi) Tenant shall pay all costs
in connection therewith. All Lines shall be clearly marked with adhesive plastic
labels (or plastic tags attached to such Lines with wire) to show Tenant’s name,
suite number, telephone number and the name of the person to contact in the case
of an emergency (A) every four feet (4’) outside the Premises (specifically
including, but not limited to, the electrical room risers and other Common
Areas), and (B) at the Lines’ termination point(s) (collectively, the
“Identification Requirements”). Landlord reserves the right to require that
Tenant remove any Lines located in or serving the Premises which are installed
in violation of these provisions, or which are at any time (1) are in violation
of any Applicable Laws, (2) are inconsistent with then-existing industry
standards (such as the standards promulgated by the National Fire Protection
Association (e.g., such organization’s “2002 National Electrical Code”)), or
(3) otherwise represent a dangerous or potentially dangerous condition.
     29.33 Hazardous Substances.
          29.33.1 Definitions. For purposes of this Lease, the following
definitions shall apply: “Hazardous Material(s)” shall mean any solid, liquid or
gaseous substance or material that is described or characterized as a toxic or
hazardous substance, waste, material, pollutant, contaminant or infectious
waste, or any matter that in certain specified quantities would be injurious to
the public health or welfare, or words of similar import, in any of the
“Environmental Laws,” as that term is defined below, or any other words which
are intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity or reproductive toxicity and includes, without limitation, asbestos,
petroleum (including crude oil or any fraction thereof, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel, or any mixture
thereof), petroleum products, polychlorinated biphenyls, urea formaldehyde,
radon gas, nuclear or radioactive matter, medical waste, soot, vapors, fumes,
acids, alkalis, chemicals, microbial matters (such as molds, fungi or other
bacterial matters), biological agents and chemicals which may cause adverse
health effects, including but not limited to, cancers and /or toxicity.
“Environmental Laws” shall mean any and all federal, state, local or
quasi-governmental laws (whether under common law, statute or otherwise),
ordinances, decrees, codes, rulings, awards, rules, regulations or guidance or
policy documents now or hereafter enacted or promulgated and as amended from
time to time, in any way relating to a) the protection of the environment, the
health and safety of persons (including employees), property or the public
welfare from actual or

-67-

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

 

potential release, discharge, escape or emission (whether past or present) of
any Hazardous Materials or b) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any Hazardous Materials.
          29.33.2 Compliance with Environmental Laws. Landlord covenants that
during the Lease Term, Landlord shall comply with all Environmental Laws in
accordance with, and as required by, the TCCs of Article 24 of this Lease.
Tenant represents and warrants that, except as herein set forth, it will not
use, store or dispose of any Hazardous Materials in or on the Premises. However,
notwithstanding the preceding sentence, Landlord agrees that Tenant may use,
store and properly dispose of commonly available household cleaners and
chemicals to maintain the Premises and Tenant’s routine office operations (such
as printer toner and copier toner) (hereinafter the “Permitted Chemicals”).
Landlord and Tenant acknowledge that any or all of the Permitted Chemicals
described in this paragraph may constitute Hazardous Materials. However, Tenant
may use, store and dispose of same, provided that in doing so, Tenant fully
complies with all Environmental Laws.
          29.33.3 Landlord’s Right of Environmental Audit. Landlord may, upon
reasonable notice to Tenant, be granted access to and enter the Premises no more
than once annually to perform or cause to have performed an environmental
inspection, site assessment or audit. Such environmental inspector or auditor
may be chosen by Landlord, in its sole discretion, and be performed at
Landlord’s sole expense. To the extent that the report prepared upon such
inspection, assessment or audit, indicates the presence of Hazardous Materials
in violation of Environmental Laws, or provides recommendations or suggestions
to prohibit the release, discharge, escape or emission of any Hazardous
Materials at, upon, under or within the Premises, or to comply with any
Environmental Laws, Tenant shall promptly, at Tenant’s sole expense, comply with
such recommendations or suggestions, including, but not limited to performing
such additional investigative or subsurface investigations or remediation(s) as
recommended by such inspector or auditor. Notwithstanding the above, if at any
time, Landlord has actual notice or reasonable cause to believe that Tenant has
violated, or permitted any violations of any Environmental Law, then Landlord
will be entitled to perform its environmental inspection, assessment or audit at
any reasonable time, notwithstanding the above mentioned annual limitation, and,
if such audit reveals that Tenant has violated the terms of this Section 29.33,
Tenant must reimburse Landlord for the cost or fees incurred for such as
Additional Rent.
          29.33.4 Representations and Indemnifications. Tenant agrees to
indemnify, defend, protect and hold harmless the Landlord Parties from and
against any liability, obligation, damage or costs, including without
limitation, attorneys’ fees and costs, resulting directly or indirectly from any
use, presence, removal or disposal of any Hazardous Materials or breach of any
provision of this section, to the extent such liability, obligation, damage or
costs was a result of actions caused or permitted by Tenant or a Tenant Party.
     29.34 Development of the Project.
          29.34.1 Subdivision. Landlord reserves the right to further subdivide
all or a portion of the Project, provided that no such subdivision shall have a
material adverse affect on Tenant’s use of or access to the Premises, or
increase Tenant’s obligations or costs of operation at the Premises. Tenant
agrees to execute and deliver, upon demand by Landlord and

-68-

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

 

in the form requested by Landlord, any additional documents needed to conform
this Lease to the circumstances resulting from such subdivision.
          29.34.2 The Other Improvements. If portions of the Project or property
adjacent to the Project (collectively, the “Other Improvements”) are owned by an
entity other than Landlord, Landlord, at its option, may enter into an agreement
with the owner or owners of any or all of the Other Improvements to provide
(i) for reciprocal rights of access and/or use of the Project and the Other
Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other
Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other
Improvements to the Project, and (iv) for the use or improvement of the Other
Improvements and/or the Project in connection with the improvement,
construction, and/or excavation of the Other Improvements and/or the Project,
provided that no such reciprocal easement agreements shall in any way (A) reduce
the number of parking passes to which Tenant is entitled, or (B) relieve
Landlord of its obligations under the Parking ROFO. Nothing contained herein
shall be deemed or construed to limit or otherwise affect Landlord’s right to
convey all or any portion of the Project or any other of Landlord’s rights
described in this Lease.
          29.34.3 Construction of Project and Other Improvements. Tenant
acknowledges that portions of the Project and/or the Other Improvements may be
under construction following Tenant’s occupancy of the Premises, and that such
construction may result in levels of noise, dust, obstruction of access, etc.
which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets (except as specifically set forth in
Section 6.7 of this Lease) in connection with such construction. Furthermore,
provided that Landlord employs commercially reasonable efforts to minimize
interference with the conduct of Tenant’s business, Tenant hereby waives any
claims of constructive eviction which may arise in connection with such
construction.
     29.35 Bifurcation of Lease. Landlord shall have the right, if reasonably
deemed necessary by Landlord, at any time during the Lease Term, to cause this
Lease to be amended and replaced by three (3) separate leases, one with respect
to portions of the Premises located in Building F, one with respect to portions
of the Premises located in Building A, and one with respect to portions of the
Premises located in Building C. Provided that such bifurcation does not increase
Tenant’s obligations hereunder on a net basis, or otherwise materially affect
Tenant’s use and occupancy of the Premises as provided for by the terms of this
Lease, Tenant shall use cooperate with Landlord in connection with any such
bifurcation of this Lease.

-69-

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

 

     IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.

              “LANDLORD”:

MS LPC MALIBU PROPERTY HOLDINGS, LLC
a Delaware limited liability company
      By:          
Its:             By:          
Its:             “TENANT”:

IXIA
a California corporation
      By:          
Its:             By:          
Its:        

-70-

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

 

EXHIBIT A
26601, 26701 and 26677 WEST AGOURA ROAD
OUTLINE OF PREMISES
(OUTLINE OF PREMISES BUILDING A) [v34027v3402701.gif]
EXHIBIT A

-1-

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

 

(OUTLINE OF PREMISES BUILDING C) [v34027v3402702.gif]

-2-

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

 

(OUTLINE OF PREMISES BUILDING F) [v34027v3402703.gif]

-3-

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

 

(OUTLINE OF PREMISES BUILDING F) [v34027v3402704.gif]

-4-

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

 

EXHIBIT B
26601, 26701 and 26677 WEST AGOURA ROAD
TENANT WORK LETTER
     This Tenant Work Letter shall set forth the terms and conditions relating
to the initial improvement of the Premises for Tenant. This Tenant Work Letter
is essentially organized chronologically and addresses the issues of
construction, in sequence, as such issues will arise during the actual
construction of the initial improvement of the Premises. All references in this
Tenant Work Letter to Articles or Sections of “this Lease” shall mean the
relevant portions of Articles 1 through 29 of the Office Lease to which this
Tenant Work Letter is attached as Exhibit B, and all references in this Tenant
Work Letter to Sections of “this Tenant Work Letter” shall mean the relevant
portions of Sections 1 through 5 of this Tenant Work Letter.
SECTION 1
DELIVERY OF THE PREMISES AND BASE BUILDING
     1.1 Base Building. Upon the full execution and delivery of this Lease by
Landlord and Tenant, Landlord shall deliver the Premises and “Base Building,” as
that term is defined in Section 7 of this Lease, to Tenant, and Tenant shall
accept the Premises and Base Building from Landlord in their presently existing,
“as-is” condition.
     1.2 Landlord Work. Notwithstanding anything to the contrary set forth in
Section 1.1 of this Tenant Work Letter, Landlord shall cause the construction or
installation of the following items (collectively, the “Landlord Work”).
          1.2.1 With regard to Building F (26601 W. Agoura Rd.), Landlord shall
divert the water from the main electrical service room to prevent water flows
inside the electrical service room.
          1.2.2 With regard to Buildings F, C and A, Landlord shall seal all
existing roof conduits to the roof with appropriate water sealing and roofing
compounds. Floor and rated wall penetrations will be sealed with standard
approved fire caulking compounds.
     Tenant may not change or alter the Landlord Work.
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
set forth in Section 13 of the Summary for the costs relating to the initial
design and construction of Tenant’s improvements, which are permanently affixed
to the Premises (the “Tenant Improvements”). Tenant shall be permitted to access
such Tenant Improvement Allowance upon the full execution and delivery of the
Lease. In no event shall Landlord be obligated to make disbursements pursuant to
this Tenant Work Letter in a total amount which exceeds the Tenant Improvement
Allowance. As more particularly set forth in Section 8.5 of this Lease, all
Tenant Improvements
EXHIBIT B
-1-

 

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

 

for which the Tenant Improvement Allowance has been made available shall be
deemed Landlord’s property under the terms of the Lease. Tenant hereby
acknowledges and agrees that any unused portion of the Tenant Improvement
Allowance remaining as of December 31, 2008, shall revert to Landlord and Tenant
shall have no further right thereto; provided, however, Tenant may, by
delivering written notice to Landlord anytime after Landlord’s disbursement of
the “Final Retention” pursuant to the terms of Section 2.2.2.2 of this Tenant
Work Letter, below, but before the date which occurs ninety (90) days following
Landlord’s disbursement of such Final Retention, elect to use up to $430,714.88
of any then remaining and unapplied portion of the Tenant Improvement Allowance
as a credit against Base Rent due with respect to the Premises under the terms
of the Lease. In addition to the Tenant Improvement Allowance, Landlord shall
contribute an amount not to exceed $9,695.52 (i.e., $0.12 per usable square foot
of the Premises multiplied by 80,796 usable square feet) (“Landlord’s Drawing
Contribution”) toward the cost of one (1) preliminary space plan to be prepared
by Tenant’s architect, and no portion of the Landlord’s Drawing Contribution, if
any, remaining after the completion of the Initial Installations shall be
available for use by Tenant.
      2.2 Disbursement of the Tenant Improvement Allowance.
          2.2.1 Tenant Improvement Allowance Items. Except as otherwise set
forth in this Tenant 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 Tenant Work
Letter, which fees shall, notwithstanding anything to the contrary contained in
this Tenant Work Letter, not exceed an aggregate amount equal to $3.50 per
rentable square foot of the Premises, and payment of the fees incurred by, and
the cost of documents and materials supplied by, Landlord and Landlord’s
consultants in connection with the preparation and review of the “Construction
Drawings,” as that term is defined in Section 3.1 of this Tenant Work Letter;
               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, testing and inspection costs, freight elevator
usage, hoisting and trash removal costs, and contractors’ fees and general
conditions;
               2.2.1.4 The cost of any changes in the Base Building 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 all applicable building codes (the “Code”);
               2.2.1.6 Sales and use taxes; and
               2.2.1.7 All other costs to be expended by Landlord in connection
with the construction of the Tenant Improvements.
EXHIBIT B
-2-

 

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

 

          2.2.2 Disbursement of Tenant Improvement Allowance. During the
construction of the Tenant Improvements, Landlord shall make monthly
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 Monthly Disbursements. On or before the day of each
calendar month, as determined by Landlord, during the construction of the Tenant
Improvements (or such other date as Landlord may designate), Tenant shall
deliver to Landlord: (i) a request for payment of the “Contractor,” as that term
is defined in Section 4.1.1 of this Tenant Work Letter, 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; (ii) invoices from all of
“Tenant’s Agents,” as that term is defined in Section 4.1.2 of this Tenant Work
Letter, for labor rendered and materials delivered to the Premises;
(iii) 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); and (iv) all other information reasonably
requested by Landlord. 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. Thereafter, Landlord shall deliver a
check to Tenant made jointly payable to Contractor and Tenant in payment of the
lesser of: (A) the amounts so requested by Tenant, as set forth in this
Section 2.2.2.1, above, less a ten percent (10%) retention (the aggregate amount
of such retentions to be known as the “Final Retention”), and (B) the balance of
any remaining available portion of the Tenant Improvement Allowance (not
including the Final Retention), provided that Landlord does not dispute any
request for payment based on non-compliance of any work with the “Approved
Working Drawings,” as that term is defined in Section 3.4 below, or due to any
substandard work, or for any other reason. Landlord’s payment of such amounts
shall not be deemed Landlord’s approval or acceptance of the work furnished or
materials supplied as set forth in Tenant’s payment request.
               2.2.2.2 Final Retention. Subject to the provisions of this Tenant
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 Tenant Improvements, provided that (i) Tenant delivers to
Landlord properly executed mechanic’s lien releases in compliance with both
California Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or
Section 3262(d)(4) from all of Tenant’s Agents, (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) Architect delivers to Landlord a
certificate, in a form reasonably acceptable to Landlord, certifying that the
construction of the Tenant Improvements in the Premises has been substantially
completed, (iv) Tenant records a valid Notice of Completion in accordance with
the requirements of Section 4.3 of this Tenant Work Letter, and (v) a
certificate of occupancy (or its equivalent) has been issued for the Premises.
               2.2.2.3 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. All Tenant
Improvement Allowance Items
EXHIBIT B
-3-

 

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

 

for which the Tenant Improvement Allowance has been made available shall be
deemed Landlord’s property under the terms of this Lease.
     2.3 Building Standards. Landlord has established or may establish
specifications for certain Building standard components to be used in the
construction of the Tenant Improvements in the Premises, which are attached
hereto as Schedule 1 (the “Building Standards”). The quality of Tenant
Improvements shall be equal to or of greater quality than the quality of such
Building Standards, provided that Landlord may, upon written notice to Tenant,
at Landlord’s option, require the Tenant Improvements to comply with certain
Building Standards, except to the extent that (i) such compliance would create
inconsistent aesthetic effect with the existing tenant improvements installed in
the Premises (e.g., maple doors are currently installed throughout the
Premises), and (ii) the use of a different brand of materials would not
compromise the quality of the Tenant Improvements. Landlord may make changes to
said specifications for Building Standards from time to time.
     2.4 Removal of Above-Standard Tenant Improvements. “Above Standard Tenant
Improvements” shall mean (i) any part of the Tenant Improvements which are not
consistent with the Building Standards; (ii) any changes in or additions to the
Tenant Improvements made at the request of Tenant or due to any other act or
omission on the part of Tenant; and (iii) a configuration of the Tenant
Improvements which is not usual and customary for normal, general office
occupancy. If so directed by Landlord at the time Landlord approves the Final
Space Plan and/or Final Working Drawings, Tenant shall, at its sole cost and
expense, prior to the expiration or earlier termination of the Lease Term,
remove from the Premises any Above Standard Tenant Improvements designated by
Landlord, and shall replace such designated Above Standard Tenant Improvements
to be removed with Building standard improvements. Such removal and replacement
of Above Standard Tenant Improvements shall be performed promptly and shall be
completed by Tenant on or before the later of (x) the expiration of the Lease
Term, or (y) the date which is thirty (30) days following Landlord’s delivery of
written notice to Tenant regarding such removal obligation, and if Tenant fails
to timely remove and/or replace any such identified Above Standard Tenant
Improvements, then at Landlord’s option, either (1) Tenant shall be deemed to be
holding over in the Premises and Rent shall continue to accrue in accordance
with the terms of Article 16 of this Lease, until such work shall be completed,
or (2) Landlord may do so and may charge the cost thereof to Tenant, in which
event Tenant shall be deemed to be holding over in the Premises, and Rent shall
continue to accrue in accordance with the terms of Article 16 of this Lease,
until the earlier of (A) the date Landlord completes such work, or (B) the
reasonably anticipated date for such completion assuming Landlord’s use of
commercially reasonable and diligent efforts in completing the same.
SECTION 3
CONSTRUCTION DRAWINGS
     3.1 Selection of Architect/Construction Drawings. Tenant shall retain an
architect/space planner designated by Tenant and reasonably approved in advance
by Landlord (the “Architect”) to prepare the “Construction Drawings,” as that
term is defined in this Section 3.1. Tenant shall retain engineering consultants
designated by Tenant and reasonably approved in advance by Landlord (the
“Engineers”) to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC, life safety, and
sprinkler work
EXHIBIT B
-4-

 

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

 

in the Premises, which work is not part of the Base Building. 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 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, and Tenant’s waiver and indemnity set forth in this Lease
shall specifically apply to 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. In
addition, Tenant shall supply Landlord with a copy of the final space plan in an
AutoCAD Computer Assisted Drafting and Design System format. 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 cause the Final
Space Plan to be revised to correct any deficiencies or other matters Landlord
may reasonably require.
     3.3 Final Working Drawings. After the Final Space Plan has been approved by
Landlord, Tenant shall supply the Engineers with a complete listing of standard
and non-standard equipment and specifications, including, without limitation,
B.T.U. calculations, electrical requirements and special electrical receptacle
requirements for the Premises, to enable the Engineers and the Architect to
complete the “Final Working Drawings” (as that term is defined below) in the
manner as set forth below. Upon the approval of the Final Space Plan by Landlord
and Tenant, Tenant shall promptly cause the Architect and the Engineers to
complete the architectural and engineering drawings for the Premises, and
Architect shall compile a fully coordinated set of architectural, structural,
mechanical, electrical and plumbing working drawings in a form which is complete
to allow all of Tenant’s Agents to bid on the work and to obtain all applicable
permits (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, including one
(1) copy in an AutoCAD Computer Assisted Drafting and Design System format.
Landlord shall advise Tenant within ten (10) 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 immediately revise the Final Working Drawings in accordance with such
review and any disapproval of Landlord in connection therewith. In addition, if
the Final Working Drawings or any amendment thereof or supplement thereto shall
require alterations in the Base Building (as
EXHIBIT B
-5-

 

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

 

contrasted with the Tenant Improvements), and if Landlord in its sole and
exclusive discretion agrees to any such alterations, and notifies Tenant of the
need and cost for such alterations, then Tenant shall pay the cost of such
required changes in advance upon receipt of notice thereof. Tenant shall pay all
direct architectural and/or engineering fees in connection therewith, plus
fifteen percent (15%) of such direct costs for Landlord’s servicing and
overhead.
     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 may submit the same to the appropriate municipal
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. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord which consent may not be unreasonably withheld,
conditioned or delayed.
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
     4.1 Tenant’s Selection of Contractors.
          4.1.1 The Contractor. A general contractor shall be retained by Tenant
to construct the Tenant Improvements. Such general contractor (“Contractor”)
shall be selected by Tenant, subject to Landlord’s reasonable approval.
          4.1.2 Tenant’s Agents. 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”)
must be approved in writing by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed; provided, however, Landlord may
nevertheless designate and require the use of particular mechanical,
engineering, plumbing, fire life-safety and other Base Building subcontractors.
If Landlord does not approve any of Tenant’s proposed subcontractors, laborers,
materialmen or suppliers, Tenant shall submit other proposed subcontractors,
laborers, materialmen or suppliers for Landlord’s written approval.
     4.2 Construction of Tenant Improvements by Tenant’s Agents.
          4.2.1 Construction Contract; Cost Budget. Tenant shall engage the
Contractor under an AIA A101 Stipulated Sum Agreement (1997 Version) accompanied
by Landlord’s standard AIA A201 General Conditions (1997 Version) as modified by
Landlord (collectively, the “Contract”). 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 detailed
breakdown, by trade, of the final costs to be incurred or which have been
incurred, as set forth more particularly in Sections 2.2.1.1 through 2.2.1.7,
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
EXHIBIT B
-6-

 

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

 

Contract (the “Final Costs”). In the event that the Final Costs are greater than
the amount of the Tenant Improvement Allowance (the “Over-Allowance Amount”),
then Tenant shall pay a percentage of each amount requested by the Contractor or
otherwise to be disbursed under this Tenant Work Letter, which percentage shall
be equal to the Over-Allowance Amount divided by the amount of the Final Costs
(after deducting from the Final Costs any amounts expended in connection with
the preparation of the Construction Drawings, and the cost of all other Tenant
Improvement Allowance Items incurred prior to the commencement of construction
of the Tenant Improvements), and such payments by Tenant (the “Over-Allowance
Payments”) shall be a condition to Landlord’s obligation to pay any amounts from
the Tenant Improvement Allowance. In the event that, after the Final Costs have
been delivered by Tenant to Landlord, the costs relating to the design and
construction of the Tenant Improvements shall change, any additional costs
necessary to such design and construction in excess of the Final Costs, shall be
added to the Over-Allowance Amount and the Final Costs, and the Over-Allowance
Payments shall be recalculated in accordance with the terms of the immediately
preceding sentence. In connection with any payment of the Over-Allowance Amount
made by Tenant pursuant to this Section 4.2.1, Tenant shall provide Landlord
with the documents described in Sections 2.2.2.1(i), (ii), (iii) and (iv) of
this Tenant Work Letter, above, for Landlord’s approval, prior to Tenant paying
such costs.
          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 Agent’s 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’s Agents shall submit schedules of all work relating to the Tenant’s
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
(iii) Tenant shall abide by all rules made by Landlord’s Building manager with
respect to the use of freight, loading dock and service elevators, storage of
materials, coordination of work with the contractors of other tenants, and any
other matter in connection with this Tenant Work Letter, including, without
limitation, the construction of the Tenant Improvements.
               4.2.2.2 Indemnity. Tenant’s indemnity of Landlord as set forth in
this Lease shall also apply with respect to any and all costs, losses, damages,
injuries and liabilities 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 this 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.
               4.2.2.3 Requirements of Tenant’s Agents. Each of Tenant’s Agents
shall guarantee to Tenant and for the benefit of Landlord that the portion of
the Tenant Improvements for which it is responsible shall be free from any
defects in workmanship and materials for a period of not less than one (1) year
from the date of completion thereof. Each of Tenant’s Agents shall be
responsible for the replacement or repair, without additional charge, of all
work done or
EXHIBIT B
-7-

 

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

 

furnished in accordance with its contract that shall become defective within one
(1) year after the later to occur of (i) completion of the work performed by
such contractor or subcontractors, and (ii) the Lease Commencement Date. The
correction of such work shall include, without additional charge, all additional
expenses and damages incurred in connection with such removal or replacement of
all or any part of the Tenant Improvements, and/or the Building and/or common
areas that may be damaged or disturbed thereby. All such warranties or
guarantees as to materials or workmanship of or with respect to the Tenant
Improvements shall be contained in the Contract or subcontract and shall be
written such that such guarantees or warranties shall inure to the benefit of
both Landlord and Tenant, as their respective interests may appear, and can be
directly enforced by either. Tenant covenants to give to Landlord any assignment
or other assurances which may be necessary to effect such right of direct
enforcement.
               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, and shall also carry public liability insurance, including property
damage, all with limits, in form and with companies as are required to be
carried by Tenant as set forth in this Lease.
                    4.2.2.4.2 Special Coverages. Tenant shall, or shall cause
its Contractor to, carry “Builder’s All Risk” insurance in an amount approved by
Landlord covering the construction of the Tenant Improvements, and such other
insurance as Landlord may require, it being understood and agreed that the
Tenant Improvements shall be insured by Tenant pursuant to this 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 including, but not limited to, the requirement that all of Tenant’s
Agents shall carry excess liability and Products and Completed Operation
Coverage insurance, each in amounts not less than $5,000,000 per incident,
$5,000,000 in aggregate, and in form and with companies as are required to be
carried by Tenant as set forth in this 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 any
equipment of Tenant’s Agents 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. Tenant’s Agents shall maintain all of the foregoing
insurance coverage in force until the Tenant Improvements are fully completed
and accepted by Landlord, except for Products and Completed Operations Coverage
insurance required by Landlord, which is to be maintained for ten (10) years
following completion of the Tenant Improvements and acceptance by Landlord and
Tenant. All policies carried under this Section 4.2.2.4 shall insure Landlord
and Tenant, as their interests may appear, as well as Tenant’s Agents. 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 and that any other
insurance maintained by Landlord is excess and noncontributing with the
insurance required hereunder. The requirements for the foregoing insurance shall
not serve to limit the indemnification of Landlord by Tenant under
Section 4.2.2.2 of this Tenant Work Letter.
EXHIBIT B
-8-

 

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

 

Landlord may, in its discretion, require Tenant to obtain a lien and completion
bond or some alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of the Tenant Improvements and
naming Landlord as a co-obligee.
          4.2.3 Governmental Compliance. The Tenant Improvements shall comply in
all respects with the following: (i) all 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
disapprove any portion of the Tenant Improvements, 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
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 approval or the Final Working
Drawings, 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 Record Set of Plans. Within ten (10) days
after completion of construction of the Tenant Improvements, Tenant shall cause
a valid 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 (x) to update
the Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings during the course of construction, (y) to certify to
the best of their knowledge that the “record-set” of as-built
EXHIBIT B
-9-

 

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

 

drawings are true and correct, which certification shall survive the expiration
or termination of this Lease, and (z) to deliver to Landlord two (2) sets of
copies of such record set of drawings (including one set in an AutoCAD Computer
Assisted Drafting and Design System format) within ninety (90) days following
issuance of a certificate of occupancy for the Premises, 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.
SECTION 5
MISCELLANEOUS
     5.1 Tenant’s Representative. Tenant has designated Mr. Mark Lewis as its
sole representative with respect to the matters set forth in this Tenant Work
Letter, who shall have full authority and responsibility to act on behalf of the
Tenant as required in this Tenant Work Letter.
     5.2 Landlord’s Representative. Landlord has designated Ms. Ginger D. Dunbar
as its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
     5.3 No Miscellaneous Charges. Landlord shall provide to Tenant and Tenant’s
Agents, without charge (to the extent utilized in connection with the
construction of the Tenant Improvements), but subject to availability,
utilities, HVAC, freight (or padded passenger) elevator service, hoists, access
to loading docks, and restrooms, during the period that such Tenant’s Agents are
actually present in the Building and working on the design and/or construction
of the Tenant Improvements, and/or use of loading docks during the Building
Hours during the period of construction of the Tenant Improvements and Tenant’s
move into the Premises. With respect to Tenant’s use of the loading docks after
Building Hours, if so requested by Tenant, Tenant shall be required to pay for
the reasonable out-of-pocket costs incurred by Landlord for after hours access
control personnel.
     5.4 Time of the Essence in This Tenant Work Letter. Unless otherwise
indicated, all references herein to a “number of days” shall mean and refer to
calendar days. 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 or this Tenant Work Letter, if any default by Tenant
under the Lease or this Tenant Work Letter (including, without limitation, any
failure by Tenant to fund any portion of the Over-Allowance Amount) occurs at
any time on or before the Substantial Completion of the Tenant Improvements,
then (i) in addition to all other rights and remedies granted to Landlord
pursuant to the Lease, Landlord shall have the right to withhold payment of all
or any portion of the Tenant Improvement Allowance and/or Landlord may, without
any liability whatsoever, cause the cessation of construction of the Tenant
Improvements (in which case, Tenant shall be responsible for any delay in the
Substantial Completion of the Tenant Improvements and any costs occasioned
thereby), and (ii) all other obligations of Landlord under
EXHIBIT B
-10-

 

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

 

the terms of the Lease and this Tenant Work Letter shall be forgiven until such
time as such default is cured pursuant to the terms of the Lease.
EXHIBIT B
-11-

 

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

 

SCHEDULE 1 TO EXHIBIT B

  •   Cherry doors — 3’x8’8” corridor and interior. 20 minute label, stained to
match building standard sample     •   Timely frames — browntone     •  
Interior doors — Schlage D-50; Rhodes 626 finish     •   Hinges — 626 finish    
•   Entrance locks — Schlage mortise set w/deadbolt and lever hardware     •  
Donn ceiling grid white 2x4     •   Armstrong 2x4 “second look”     •   2x4
parabolic 3 lamp lights     •   Watt Stopper wall sensors and ceiling sensor    
•   Dunn Edwards Suprema paint     •   Designweave carpet     •   Burke rubber
carpet base     •   Mannington VCT     •   Cabinets and countertops — Home Depot
    •   Elkay stainless steel sink     •   Delta single handled faucet     •  
Home Depot garbage disposal

SCHEDULE 1 TO
EXHIBIT B
-1-

 

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

 

EXHIBIT C
26601, 26701 and 26677 WEST AGOURA ROAD
NOTICE OF LEASE TERM DATES

         
To:
       
 
       
 
       
 
       
 
       
 
       
 
       

         
 
  Re:   Office Lease dated ____________, 2007 between MS LPC MALIBU PROPERTY
HOLDINGS, LLC, a Delaware limited liability company (“Landlord”), and IXIA, a
California corporation (“Tenant”) concerning the entire rentable area (the
“Building F Premises”) of the office building located at 26601 West Agoura Road,
Calabasas, California (“Building F”), Suite 100 and Suite 105 on the first floor
(the “Building A Premises”) of the office building located at 26701 West Agoura
Road, Calabasas, California (“Building A”) and Suite 101 on the first floor (the
“Building C Premises”) of the office building located at 26677 West Agoura Road,
Calabasas, California (“Building C”).

Gentlemen:
     In accordance with the Office Lease (the “Lease”), we wish to advise you
and/or confirm as follows:

  1.   The Lease Term shall commence on or has commenced on                     
for a term of                      years, ending on                     .     2.
  Rent commenced to accrue on                     , in the amount of
                     per rentable square foot.     3.   If the Lease
Commencement Date is other than the first day of the month, the first billing
will contain a pro rata adjustment. Each billing thereafter, with the exception
of the final billing, shall be for the full amount of the monthly installment as
provided for in the Lease.     4.   Your rent checks should be made payable to
                     at                     .     5.   The exact number of
rentable square feet within the Premises is                     .

EXHIBIT C
-1-

 

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

 

  6.   Tenant’s Share as adjusted based upon the exact number of rentable square
feet within the Premises is                     .

            “Landlord”:

                                                                        
                                , 
a
                                                                                                       
      By:           Its:           

          Agreed to and Accepted
as of                     , 200_.

“Tenant”:

                                                                             
         
a                                                                             
       
      By:           Its:               

EXHIBIT C
-2-

 

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

 

EXHIBIT D
26601, 26701 and 26677 WEST AGOURA ROAD
RULES AND REGULATIONS
     Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.
     1. Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord’s
prior written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord. Upon the termination of this
Lease, Tenant shall restore to Landlord all keys of stores, offices, and toilet
rooms, either furnished to, or otherwise procured by, Tenant and in the event of
the loss of keys so furnished, Tenant shall pay to Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.
     2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.
     3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the Calabasas, California area. Tenant, its employees and agents
must be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord will furnish passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom Tenant requests passes and shall be liable to Landlord for all
acts of such persons. The Landlord and his agents shall in no case be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right to prevent access to the Building
or the Project during the continuance thereof by any means it deems appropriate
for the safety and protection of life and property.
     4. No furniture, freight or equipment of any kind shall be brought into the
Building without prior notice to Landlord. All moving activity into or out of
the Building shall be scheduled with Landlord and done only at such time and in
such manner as Landlord reasonably
EXHIBIT D
-1-

 

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

 

designates. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy property brought into the Building and
also the times and manner of moving the same in and out of the Building. Safes
and other heavy objects shall, if considered necessary by Landlord, stand on
supports of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property in any case. Any damage to any part of the Building, its contents,
occupants or visitors by moving or maintaining any such safe or other property
shall be the sole responsibility and expense of Tenant.
     5. Intentionally Omitted.
     6. The requirements of Tenant will be attended to only upon application at
the management office for the Project or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
     7. Subject to the terms of the Lease, no sign, advertisement, notice or
handbill shall be exhibited, distributed, painted or affixed by Tenant on any
part of the Premises or the Building without the prior written consent of the
Landlord. Tenant shall not disturb, solicit, peddle, or canvass any occupant of
the Project and shall cooperate with Landlord and its agents of Landlord to
prevent same.
     8. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose servants, employees, agents, visitors or
licensees shall have caused same.
     9. Tenant shall not overload the floor of the Premises, nor mark, drive
nails or screws, or drill into the partitions, woodwork or drywall or in any way
deface the Premises or any part thereof without Landlord’s prior written consent
(other than in connection with the hanging of normal wall hangings and
art-work). Tenant shall not purchase spring water, ice, towel, linen,
maintenance or other like services from any person or persons not approved by
Landlord.
     10. Except for vending machines intended for the sole use of Tenant’s
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
     11. Tenant shall not use or keep in or on the Premises, the Building, or
the Project any kerosene, gasoline, explosive material, corrosive material,
material capable of emitting toxic fumes, or other inflammable or combustible
fluid chemical, substitute or material. Tenant shall provide material safety
data sheets for any Hazardous Material used or kept on the Premises.
     12. Intentionally Omitted.
     13. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a
EXHIBIT D
-2-

 

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

 

manner offensive or objectionable to Landlord or other occupants of the Project
by reason of noise, odors, or vibrations, or interfere with other tenants or
those having business therein, whether by the use of any musical instrument,
radio, phonograph, or in any other way. Tenant shall not throw anything out of
doors, windows or skylights or down passageways.
     14. Tenant shall not bring into or keep within the Project, the Building or
the Premises any animals, birds, aquariums, or, except in areas designated by
Landlord, bicycles or other vehicles.
     15. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters’ laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state, county and city laws, codes, ordinances,
rules and regulations.
     16. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
provided for in the Summary. Tenant shall not occupy or permit any portion of
the Premises to be occupied as an office for a messenger-type operation or
dispatch office, public stenographer or typist, or for the manufacture or sale
of liquor, narcotics, or tobacco in any form, or as a medical office, or as a
barber or manicure shop, or as an employment bureau without the express prior
written consent of Landlord. Tenant shall not engage or pay any employees on the
Premises except those actually working for such tenant on the Premises nor
advertise for laborers giving an address at the Premises.
     17. Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
     18. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators,
vestibules or any Common Areas for the purpose of smoking tobacco products or
for any other purpose, nor in any way obstruct such areas, and shall use them
only as a means of ingress and egress for the Premises.
     19. Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building’s heating and air conditioning system, and shall refrain from
attempting to adjust any controls. Tenant shall participate in recycling
programs undertaken by Landlord.
     20. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in Calabasas,
California without violation of any law or ordinance governing such disposal.
All trash, garbage and refuse disposal shall be made only through entry-ways and
elevators provided for such purposes at such times as Landlord shall designate.
If the Premises
EXHIBIT D
-3-

 

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

 

is or becomes infested with vermin as a result of the use or any misuse or
neglect of the Premises by Tenant, its agents, servants, employees, contractors,
visitors or licensees, Tenant shall forthwith, at Tenant’s expense, cause the
Premises to be exterminated from time to time to the satisfaction of Landlord
and shall employ such licensed exterminators as shall be approved in writing in
advance by Landlord.
     21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
     22. Any persons employed by Tenant to do janitorial work shall be subject
to the prior written approval of Landlord, and while in the Building and outside
of the Premises, shall be subject to and under the control and direction of the
Building manager (but not as an agent or servant of such manager or of
Landlord).
     23. No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord, and no curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises other than Landlord standard drapes.
All electrical ceiling fixtures hung in the Premises or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design
and a warm white bulb color approved in advance in writing by Landlord. Neither
the interior nor exterior of any windows shall be coated or otherwise
sunscreened without the prior written consent of Landlord. Tenant shall be
responsible for any damage to the window film on the exterior windows of the
Premises and shall promptly repair any such damage at Tenant’s sole cost and
expense. Tenant shall keep its window coverings closed during any period of the
day when the sun is shining directly on the windows of the Premises. Prior to
leaving the Premises for the day, Tenant shall draw or lower window coverings
and extinguish all lights. Tenant shall abide by Landlord’s regulations
concerning the opening and closing of window coverings which are attached to the
windows in the Premises, if any, which have a view of any interior portion of
the Building or Building Common Areas.
     24. The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
     25. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
     26. Tenant hereby acknowledges that Landlord shall have no obligation to
provide guard service or other security measures for the benefit of the
Premises, the Building or the Project. Tenant hereby assumes all responsibility
for the protection of Tenant and its agents, employees, contractors, invitees
and guests, and the property thereof, from acts of third parties, including
keeping doors locked and other means of entry to the Premises closed, whether or
not Landlord, at its option, elects to provide security protection for the
Project or any portion thereof. Tenant further assumes the risk that any safety
and security devices, services and programs which Landlord elects, in its sole
discretion, to provide may not be effective, or may malfunction or be
circumvented by an unauthorized third party, and Tenant shall, in addition to
its other insurance obligations under this Lease, obtain its own insurance
coverage to the extent Tenant
EXHIBIT D
-4-

 

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

 

desires protection against losses related to such occurrences. Tenant shall
cooperate in any reasonable safety or security program developed by Landlord or
required by law.
     27. Tenant shall not use in any space or in the public halls of the
Building, any hand trucks except those equipped with rubber tires and rubber
side guards.
     28. No auction, liquidation, fire sale, going-out-of-business or bankruptcy
sale shall be conducted in the Premises without the prior written consent of
Landlord.
     29. No tenant shall use or permit the use of any portion of the Premises
for living quarters, sleeping apartments or lodging rooms.
     30. Tenant shall install and maintain, at Tenant’s sole cost and expense,
an adequate, visibly marked and properly operational fire extinguisher next to
any duplicating or photocopying machines or similar heat producing equipment,
which may or may not contain combustible material, in the Premises.
     Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord’s judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, the Common Areas and the Project, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
therein. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.
EXHIBIT D
-5-

 

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

 

EXHIBIT E
26601, 26701 and 26677 WEST AGOURA ROAD
FORM OF TENANT’S ESTOPPEL CERTIFICATE
     The undersigned as Tenant under that certain Office Lease (the “Lease”)
made and entered into as of                     , 200     by and between
                     as Landlord, and the undersigned as Tenant, for Premises on
the                      floor(s) of the office building located at
                    ,                     , California                     ,
certifies as follows:
     1. Attached hereto as Exhibit A is a true and correct copy of the Lease and
all amendments and modifications thereto. The documents contained in Exhibit A
represent the entire agreement between the parties as to the Premises.
     2. The undersigned currently occupies the Premises described in the Lease,
the Lease Term commenced on                     , and the Lease Term expires on
                    , and the undersigned has no option to terminate or cancel
the Lease or to purchase all or any part of the Premises, the Building and/or
the Project, except as otherwise provided in the Lease.
     3. Base Rent became payable on                     .
     4. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
     5. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
     6. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through                     . The current monthly installment of Base Rent is
$                    .
     7. To Tenant’s knowledge, all conditions of the Lease to be performed by
Landlord necessary to the enforceability of the Lease have been satisfied and
Landlord is not in default thereunder. In addition, the undersigned has not
delivered any notice to Landlord regarding a default by Landlord thereunder.
     8. No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.
EXHIBIT E
-1-

 

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

 

     9. To Tenant’s knowledge, as of the date hereof, there are no existing
defenses or offsets, or, to the undersigned’s knowledge, claims or any basis for
a claim, that the undersigned has against Landlord.
     10. If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate on behalf of Tenant hereby represents and warrants
that Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.
     11. To Tenant’s knowledge, there are no actions pending against the
undersigned under the bankruptcy or similar laws of the United States or any
state.
     12. Other than in compliance with all applicable laws and incidental to the
ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
     13. To the undersigned’s knowledge, all tenant improvement work to be
performed by Landlord under the Lease has been completed in accordance with the
Lease and has been accepted by the undersigned and all reimbursements and
allowances due to the undersigned under the Lease in connection with any tenant
improvement work have been paid in full.
     The undersigned acknowledges that this Estoppel Certificate may be
delivered to Landlord or to a prospective mortgagee or prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.
     Executed at                      on the ___ day of                     ,
200     .

            “Tenant”:

                                                                           
           , 
a                                                                            
        
      By:           Its:     

            By:           Its:   

EXHIBIT E
-2-