LEASE
This 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 SOUTH LOOP 1, LLC, a Delaware limited liability company (“Landlord”),
and PENUMBRA, INC., a Delaware corporation (“Tenant”).
SUMMARY OF BASIC LEASE INFORMATION

TERMS OF LEASEDESCRIPTION1. Date:
September 3, 2019
2. Premises
(Article 1).

2.1 Building:To be constructed building located at 1310 Harbor Bay Parkway,
Alameda, California2.2 Premises:
The entire Building, as further set forth in Exhibit A to this Lease, which is
anticipated to have approximately 126,700 rentable square feet, which amount
shall be updated upon Substantial Completion of the Tenant Improvements in
accordance with Section 1.2.
2.3 PropertyThe Building and the parcel of land on which the Building is
located.
3. Lease Term
(Article 2).

3.1 Length of Term:One Hundred Eighty-Two (182) Months.
3.2 Lease Commencement
Date:
The “Lease Commencement Date” is the date that is the earlier to occur of
(i) the date upon which Tenant first commences to conduct business in the
Premises, and (ii) the date upon which the Premises are “Ready for Occupancy,”
as that term is defined in the Tenant Work Letter attached hereto as Exhibit B
(the “Tenant Work Letter”).
3.3 Lease Expiration Date:
The last day of the one hundred eighty-second (182nd) full month following the
Lease Commencement Date.

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4. Base Rent (Article 3):

4.1 Rent Commencement Date:
The “Rent Commencement Date” is the date that is sixty (60) days after the Lease
Commencement Date.
4.2 Initial Base Rent:
The initial Base Rent shall be calculated as set forth in Exhibit J.
4.3 Increased in Base Rent:On each anniversary of the Lease Commencement Date,
Base Rent shall increase by three percent (3%) to an amount equal to one hundred
three percent (103%) of the Base Rent for the immediately preceding period.
5. Operating Expenses and Tax Expenses
(Article 4):

This is a “TRIPLE NET” lease and, as such, the provisions contained in this
Lease are intended to pass on to Tenant and reimburse Landlord for the costs and
expenses reasonably associated with this Lease and the Project, and Tenant’s
operation therefrom, subject to allocation in accordance with Section 4.3 below.
To the extent such costs and expenses payable by Tenant cannot be charged
directly to, and paid by, Tenant, such costs and expenses shall be paid by
Landlord but reimbursed by Tenant as Additional Rent.
6. Tenant’s Share
(Article 4):
100%.
7. Permitted Use
(Article 5):
General office use, clean rooms/laboratories/manufacturing, warehousing of raw
materials and finished materials.
8. Security Deposit
(Article 21) or
Letter of Credit
(Article 22):
$378,955.

If Tenant has elected to provide a cash Security Deposit, upon final
determination of the initial monthly Base Rent, the Security Deposit shall be
adjusted to equal the Base Rent for the first full month following the Rent
Commencement Date, with Tenant paying to Landlord any shortfall with the next

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payment of Base Rent and Landlord crediting any overage toward Tenant’s next
payment of Base Rent.
If Tenant has elected to provide a Letter of Credit, upon final determination of
the initial monthly Base Rent, the Letter of Credit shall be adjusted as set
forth in Section 22.1.7.
10. Address of Tenant
(Section 29.18):
Penumbra, Inc.,
One Penumbra Place
Alameda, California 94502
Attention: General Counsel

With a copy to:

Penumbra, Inc.,
One Penumbra Place
Alameda, California 94502
Attention: Director of Facilities
With a copy, prior to the Lease Commencement Date, to Tenant’s representative
identified in the Tenant Work Letter at the address set forth above.

with a copy to:

Shartsis Friese LLP
One Maritime Plaza, 18th Floor
San Francisco, California 94111
Attention: Jonathan M. Kennedy/David H. Kremer
11. Address of Landlord
(Section 29.18):

See Section 29.18 of the Lease.
12. Broker(s)
(Section 29.24):
Tenant: Cushman & Wakefield of California, Inc. (Ed Grammens) and Newmark Knight
Frank (Jennifer Essner).
Landlord: CBRE (Mark Kol and Mike Raffetto)

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13. Parking Spaces (Section 29.36):
All parking spaces on the Property, subject to the terms of Section 29.36, which
is estimated to be 388 parking spaces, subject to final site design.
14. Tenant Improvement Allowance (Exhibit B):
Ninety Dollars ($90.00) per rentable square foot of the Building. The estimated
Tenant Improvement Allowance is $11,403,000, which amount shall be updated upon
Substantial Completion of the Tenant Improvements in accordance with Section 2.3
of the Work Letter and remeasurement of the Premises in accordance with Section
1.2.

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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 (the
“Premises”). The outline of the Premises, as contemplated to be constructed on
the date hereof, is set forth in Exhibit A attached hereto. The parties hereto
agree that the lease of the Premises is upon and subject to the terms, covenants
and conditions 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 terms,
covenants and conditions 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 and the “Building,” 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
(inclusive of Schedule 1 attached thereto), Tenant shall accept the Premises in
their existing, “as is” condition, and Landlord shall not be obligated to
provide or pay for any improvement work or services related to the initial
improvement of the Premises. Tenant also acknowledges that neither Landlord nor
any agent of Landlord has made any representation or warranty regarding the
condition of the Premises, the Building 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. Subject to
Landlord’s ongoing maintenance and repair obligations as set forth herein and
completion of any “Punch List Items,” as that term is defined in the Tenant Work
Letter, pursuant to the Tenant Work Letter, the commencement of business
operations from the Premises by Tenant shall conclusively establish that the
portion of the Premises and the Building were at such time in good and sanitary
order, condition and repair.
1.1.2 The Building and The Project. The Premises consist of the entirety of the
building set forth in Section 2.1 of the Summary (the “Building”). The term
“Project,” as used in this Lease, shall mean (i) the Building, (ii) the Common
Areas, (iii) the Property and the land upon which the Common Areas are located,
and (iv) the additional real property, areas, land, buildings and other
improvements subject to that certain Declaration of Covenants, Conditions,
Restrictions and Easements for Plaza Six, dated as of April 30, 1985 and
recorded on April 30, 1985 as instrument Number 85-083796 in the Official
Records of Alameda County, California (the “Official Records”), as amended by
that certain First Amendment to Declaration of Covenants, Conditions,
Restrictions, and Easements dated as of March 29, 2019, and recorded on March
29, 2019, as Instrument Number 2019-056223 in the Official Records, and that
certain Second Amendment to Declaration of Covenants, Conditions, Restrictions,
and Easements dated as of April 16, 2019, and recorded on May 1, 2019, as
Instrument Number 2019-079180 in the Official Records (as amended, the
“Declaration”).

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1.1.3 Common Areas. Tenant shall have the non-exclusive right to use in common
with other owners and tenants in the Project, subject to the Declaration 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 owners and tenants of the Project (such
areas, together with such other portions of the Project designated by Landlord
or other owners of the Project, in their discretion, including certain areas
designated for the exclusive use of certain tenants, or to be shared by
Landlord, certain owners, and certain tenants, are collectively referred to
herein as the “Common Areas”). The manner in which the Common Areas owned by
Landlord are maintained and operated shall be at the reasonable discretion of
Landlord (subject to the provisions of Article 7) and the use thereof shall be
subject to such non-discriminatory rules, regulations and restrictions as
Landlord may reasonably make from time to time. 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 owned by Landlord, provided that,
in connection therewith, Landlord shall at all times use commercially reasonable
efforts to minimize interference with Tenant’s use of and access to the
Premises. Any such closures, alterations or additions will be subject to the
terms of Section 19.5.2 below. For the avoidance of doubt, the rights granted by
Landlord to Tenant hereunder with respect to portions of the Project and Common
Areas that Landlord does not own are limited to Landlord’s rights under the
Declaration and subject to all terms and conditions of the Declaration.
1.2 Rentable Square Feet of Premises and Building. For purposes of this Lease,
“rentable square feet” in the Premises and the Building, as the case may be,
shall be calculated pursuant ANSI/BOMA Z65.3-2018 Gross Area 1 (Leasing Method)
(the “BOMA Standard”). Upon Substantial Completion of the Landlord Work and
Tenant Improvements, Landlord shall measure the rentable square footage of the
Premises and give Tenant notice thereof. The measurement of the Premises shall
be initially determined by Landlord’s architect and shall be confirmed by the
parties as follows: Landlord’s Architect will determine the rentable square feet
of the Premises in accordance with the BOMA Standard. Landlord will notify
Tenant of such determination and shall, concurrently with the delivery of such
notice, provide Tenant with a CAD-formatted file of such measurement for
Tenant’s review. If Tenant, in good faith, disagrees with the Landlord’s
Architect’s interpretations or determinations and notifies Landlord of same
within fifteen (15) days after Landlord notifies Tenant of the Landlord’s
Architect’s determination, and if a dispute occurs regarding the final accuracy
of such interpretations or determination that is not resolved between Landlord
and Tenant, using good faith efforts, within fifteen (15) days after Landlord’s
receipt of Tenant’s disagreement notice, such dispute will be resolved pursuant
to the dispute resolution procedure set forth below, with architects or office
space measurement professionals with at least ten (10) years’ experience
measuring Comparable Buildings, serving as arbitrator. If Tenant fails to notify
Landlord of Tenant’s disagreement with the Landlord’s Architect’s determination
within such fifteen (15) day period or if Tenant fails to deliver a request for
arbitration with the ten (10) business day period specified below, the
Landlord’s Architect’s determination shall be binding and conclusive upon
Landlord and Tenant. Upon resolution of the measurement of the Premises, the
Premises will not be subject to remeasurement. All disputes between Landlord and
Tenant regarding Landlord’s Architect’s measurement of the Premises shall be
resolved as follows:  if Tenant disagrees with the Landlord’s Architect’s
measurement and the dispute has not been resolved within fifteen (15)
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days following Tenant’s delivery of notice of disagreement to Landlord, Tenant
may deliver an arbitration notice to Landlord within ten (10) business days
after the expiration of such fifteen (15) day period.  Within ten (10) business
days following Tenant’s delivery of an arbitration notice, the parties shall
mutually select one (1) architect  who is a natural person not employed by
either of the parties or any parent or affiliated partnership, corporation or
other enterprise thereof, who shall also be a licensed AIA architect with at
least ten (10) years’ experience in the San Francisco bay area real estate
market.  If the parties do not so agree, then either party, on behalf of both,
may request appointment of such a qualified person by the San Francisco office
of the JAMS.  Request for appointment shall be made in writing with a copy given
to the other party.  The arbitrator so selected shall decide the dispute, if it
has not previously been resolved, by following the procedure set forth below. 
The arbitrator shall state in writing his or her determination of the rentable
square feet of the Premises applying the BOMA Standard, and shall deliver a copy
to each party.  The arbitrator shall complete his or her  determination within
thirty (30) days after appointment.  The decision of the arbitrator shall be
final and binding upon the parties.  The party who demanded arbitration shall
pay the costs of the arbitrator.  The arbitrator shall have no power to modify
the provisions of this Lease.  If any arbitrator fails, refuses or is unable to
act, his or her successor shall be appointed in the same manner as provided for
appointment of the initial arbitrator.
1.3 Right of First Offer. Landlord hereby grants to the originally named Tenant
herein and any “Permitted Transferee Assignee”, a right of first offer (the
“Right of First Offer“) with respect to space located in all or a portion of the
buildings to be constructed at 1410 Harbor Bay Parkway, Alameda, California, and
1430 Harbor Bay Parkway, Alameda, California, California (individually and
collectively, the “First Offer Space“) for so long as Landlord or a Landlord
affiliate (an entity which is controlled by, controls, or is under common
control with, Landlord) (“Landlord Affiliate“) holds title to both the Premises
and the First Offer Space and underlying real property. 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. From time to time, prior to leasing the First Offer
Space to a third party, Landlord shall deliver written notice to Tenant (the
“First Offer Notice“) describing First Offer Space (or portion thereof) that is
then available and pursuant to such First Offer Notice, Landlord shall offer to
lease to Tenant the First Offer Space described in the First Offer Notice.
Landlord shall not deliver a First Offer Notice to Tenant less than one (1)
month, or more than twelve (12) months, prior to the anticipated execution date
of a lease for the applicable First Offer Space. The First Offer Notice shall
describe space so offered to Tenant and shall set forth the rent and the other
economic terms upon which Landlord is willing to lease the First Offer Space to
Tenant, as well as the date(s) on which the First Offer Space will be available
to be delivered to Tenant for the purposes of allowing Tenant to construct
improvements therein and/or occupy the First Offer Space. The rentable square
footage of the First Offer Space shall be as set forth in the First Offer
Notice. If a First Offer Notice includes space in addition to First Offer Space,
then such additional space shall be considered part of the “First Offer Space”
for purposes of such First Offer Notice only and all the terms and provisions of
this Section 1.3.2 shall apply to such additional space as though it were part
of the First Offer Space for purposes of such First Offer Notice only.

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1.3.2 Procedure for Acceptance. If Tenant wishes to exercise Tenant’s Right of
First Offer with respect to the space described in the First Offer Notice, then
within ten (10) business days of delivery of the First Offer Notice to Tenant,
Tenant shall have the right to deliver notice to Landlord (“Tenant’s First Offer
Exercise Notice”) of Tenant’s election to exercise its right of first offer with
respect to the entire space described in the First Offer Notice on the terms
contained in such notice. If Tenant does not deliver Tenant’s First Offer
Exercise Notice within the ten (10) business day period, then Landlord shall be
free to enter into a lease (“Third Party Lease”) for the space described in the
First Offer Notice to anyone to whom Landlord desires on any terms Landlord
desires for a period of six (6) months after the expiration of such ten (10)
business day period. If Landlord enters into a Third Party Lease during such six
(6)-month period, 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 provided, however, that if  Landlord desires to lease the First Offer
Space to a third party at less than ninety percent (90%) of the “net effective
rent” (i.e., the actual rent taking into account all economic terms) set forth
in Landlord’s First Offer Notice, Landlord shall deliver a second notice to
Tenant with respect to such First Offer Space (and Landlord’s second notice
shall contain the then-current terms).  Tenant shall have the same rights with
respect to the second notice as it had with respect to the initial First Offer
Notice, except that Tenant shall only have five (5) business days following
receipt of the First Offer Notice to deliver Tenant’s First Offer Exercise
Notice. If Landlord does not enter into a Third Party Lease during such six
(6)-month period, then Tenant’s rights under this Section 1.3 shall remain in
effect and Landlord shall follow the procedure herein prior to entering into a
Third Party Lease. 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.
1.3.3. Omitted.
1.3.4 First Offer Space Term. Subject to any tenant improvement allowances
granted as a component of the First Offer Rent or agreement on the part of
Landlord to perform work therein or rent free construction period as may be as
set forth in the applicable First Offer Notice, if any, 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.
1.3.5 Construction In First Offer Space. Tenant shall accept the First Offer
Space in its then existing “as is” condition, subject to any tenant improvement
allowance granted as a component of the First Offer Rent or agreement on the
part of Landlord to perform work therein as set forth in the applicable First
Offer Notice, if any. The construction of improvements in the First Offer Space
shall comply with the terms of Article 8 of this Lease.
1.3.6 New Lease. If Tenant timely exercises Tenant’s Right to First Offer as set
forth herein, then, Landlord and Tenant shall promptly thereafter execute a new
lease on substantially the same terms and conditions of this Lease, the First
Offer Notice and this Section 1.3, and the terms of the Declaration which are
applicable to the First Offer Space (the
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“First Offer Lease”). Notwithstanding the foregoing, the failure of Landlord and
Tenant to execute and deliver such First Offer Lease shall not affect an
otherwise valid exercise of Tenant’s Right of First Offer or the parties’ rights
and responsibilities in respect thereof.
1.3.7 Termination of Right of First Offer. The Right of First Offer shall be
personal to Original Tenant and any Permitted Transferee Assignee, and may only
be exercised by Original Tenant or a Permitted Transferee Assignee (and not by
any other assignee, or sublessee or other “Transferee,” as that term is defined
in Section 14.1 of this Lease, of Tenant’s interest in this Lease) if Original
Tenant or a Permitted Transferee Assignee has not then subleased more than
twenty five percent (25%) of the rentable area of the Premises (i.e., pursuant
to subleases in effect as of the date of Tenant’s exercise of the Right of First
Offer). The Right of First Offer granted herein shall also terminate upon the
date that Landlord or a Landlord Affiliate ceases to hold title to both the
Premises and the First Offer Space and underlying real property. 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, as of the date Landlord and Tenant execute the First Offer Lease, or as
of the scheduled date of delivery of such First Offer Space to Tenant, Tenant is
in Default or Tenant has previously been in Default more than once during the
immediately preceding twelve (12) month period.
ARTICLE 2
LEASE TERM
2.1 Lease Term. Subject to the remaining terms of this Section 2.1, the terms
and provisions of this Lease shall be effective as of the date of this Lease.
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, however, that the first Lease Year shall
commence on the Lease Commencement Date and end on the last day of the month in
which the first anniversary of the Lease Commencement Date occurs (or if the
Lease Commencement Date is the first day of a calendar month, then the first
Lease Year shall commence on the Lease Commencement Date and end on the day
immediately preceding the first anniversary of the Lease Commencement Date), and
the second and each succeeding Lease Year shall commence on the first day of the
next calendar month; and further 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) business days of
receipt thereof; provided that if said notice is not factually correct, then
Tenant shall make such changes as are necessary to make the notice factually
correct and shall thereafter execute and return such notice to Landlord within
such ten (10) business day period. Such modified Notice of Lease Term Dates and
Base Rent shall not be binding unless Landlord countersigns the notice with
Tenant’s changes. If Landlord
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does not so countersign the notice, Landlord and Tenant shall work together in
good faith to agree upon and mutually execute an acceptable Notice of Lease Term
Dates and Base Rent.
2.2 Option Terms.
2.2.1 Option Rights. Landlord hereby grants to the originally named Tenant
herein (“Original Tenant“) and any Permitted Transferee Assignee, three (3)
options to extend the Lease Term for a period of five (5) years each (each, an
“Option Term“, and each such option, the “Option to Extend”). Such Options to
Extend shall be exercisable only by “Notice” (as that term is defined in
Section 29.18 of this Lease) delivered by Tenant to Landlord (the “Extension
Exercise Notice“) as provided below, provided that the following conditions (the
“Option Conditions“) are satisfied: (i) as of the date of delivery of such
notice, Tenant is not in Default under this Lease; (ii) Tenant is not in Default
under this Lease at the time Landlord and Tenant execute an amendment to this
Lease extending the Lease Term for the applicable Option Term, and as of the end
of the Lease Term or the initial Option Term, as the case may be, Tenant is not
in Default under this Lease; (iii) Tenant has not previously been in Default
under this Lease more than once in the immediately preceding thirty-six (36)
month period; and (iv) this Lease then remains in full force and effect and
Original Tenant (or a Permitted Transferee Assignee) has not subleased more than
forty percent (40%) of the Premises pursuant to subleases in effect at the time
the applicable Option to Extend is exercised and as of the commencement of the
applicable Option Term (in each case, excluding any Permitted Transfer).
Landlord may, at Landlord’s option, exercised in Landlord’s sole and absolute
discretion, waive any of the Option Conditions in which case the Option to
Extend, if otherwise properly exercised by Tenant, shall remain in full force
and effect; provided, however, unless Landlord delivers written notice to Tenant
within thirty (30) days following Tenant’s exercise of the Option to Extend
stating that such exercise is invalid due to Tenant’s failure to satisfy the
Option Conditions, then Landlord shall be deemed to have waived the Option
Conditions. Upon the proper exercise of the Option to Extend, and provided that
Tenant satisfies all of the Option Conditions (except those, if any, which are
waived by Landlord), the Lease Term or the initial Option Term, as applicable,
as it applies to the Premises, shall be extended for a period of five (5) years.
The rights contained in this Section 2.2 shall be personal to Original Tenant
and any Permitted Transferee Assignee and may be exercised by Original Tenant or
a Permitted Transferee Assignee only (and not by any other assignee, sublessee
or “Transferee,” as that term is defined in Section 14.1 of this Lease, of
Tenant’s interest in this Lease) if the Original Tenant or any such Permitted
Transfer Assignee physically occupies (as described above) at least seventy
percent (70%) of the Premises.
2.2.2 Option Rent. The Rent payable by Tenant during an Option Term (the “Option
Rent”) shall be equal to one hundred percent (100%) of the “Market Rent,” as
that term is defined in, and determined pursuant to, Exhibit G attached hereto.
2.2.3 Exercise of Option. An Option to Extend shall be exercised by Tenant, if
at all, only in the manner set forth in this Section 2.2. Tenant shall deliver
notice (the “Exercise Notice”) to Landlord not more than fifteen (15) months nor
less than nine (9) months prior to the expiration of the Lease Term or the
applicable Option Term, as applicable, stating that Tenant is exercising its
Option to Extend, which election shall be irrevocable regardless of the fact
that the
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Option Rent has not yet been finally determined. Landlord shall, no later than
ninety (90) days prior to the expiration of the initial Lease Term or the
then-current Option Term, as applicable, notify Tenant of Landlord’s good faith
determination of the applicable Option Rent (the “Landlord’s Option Rent
Notice”). Tenant shall deliver notice (the “Tenant Response Notice”) to Landlord
on or before the date which is thirty (30) days after Tenant’s receipt of
Landlord’s Option Rent Notice, stating that (A) Tenant is accepting Landlord’s
Option Rent calculation as the Option Rent, or (B) rejecting Landlord’s Option
Rent calculation and setting forth Tenant’s calculation of the Option Rent. If
Tenant does not affirmatively accept or Tenant rejects the Option Rent specified
in the Landlord’s Option Rent Notice, the parties shall follow the procedure set
forth in Section 2.2.4 below, and the Option Rent shall be determined in
accordance with the terms of Section 2.2.4 below.
2.2.4 Determination of Option Rent. In the event Tenant timely and appropriately
exercises the Option to Extend but rejects the Option Rent set forth in the
Landlord’s Option Rent Notice pursuant to Section 2.2.3 above, then Landlord and
Tenant shall attempt to agree upon the Option Rent using their best good-faith
efforts. If Landlord and Tenant fail to reach agreement upon the Option Rent
applicable to the Option Term on or before the date that is thirty (30) days
prior to the expiration of the Lease Term or the then-current Option Term, as
applicable (the “Outside Agreement Date“), then the Option Rent shall be
determined by arbitration pursuant to the terms of this Section 2.2.4. Each
party shall make a separate determination of the Market Rent (the “Exchanged
Market Rents“), within five (5) days following the Outside Agreement Date, and
such determinations shall be submitted to arbitration in accordance with
Sections 2.2.4.1 through 2.2.4.4, below. The determination of the arbitrators
shall be limited solely to the issue of whether Landlord’s or Tenant’s Exchanged
Market Rents determination is the closest to the actual Market Rent as
determined by the arbitrators, taking into account the requirements of
Section 2.2 of this Lease.
2.2.4.1 Landlord and Tenant shall each appoint one arbitrator who shall be, at
the option of the appointing party, a real estate broker or appraiser 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 “Comparable
Buildings,” as that term is defined in Exhibit G attached hereto. Each such
arbitrator shall be appointed within fifteen (15) days after the 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 (including an arbitrator who has previously represented
Landlord and/or Tenant, as applicable). The arbitrators so selected by Landlord
and Tenant shall be deemed “Advocate Arbitrators.”
2.2.4.2 The two (2) 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 to 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 (i) neither the Landlord or Tenant or either parties’
Advocate Arbitrator may, directly or indirectly, consult with the Neutral
Arbitrator prior or subsequent to his or her appearance, and (ii) the Neutral
Arbitrator cannot be someone who has represented Landlord and/or Tenant during
the five (5) year period prior to such appointment.
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The Neutral Arbitrator shall be retained via an engagement letter jointly
prepared by Landlord’s counsel and Tenant’s counsel.
2.2.4.3 Within ten (10) days following the appointment of the Neutral
Arbitrator, Landlord and Tenant shall enter into an arbitration agreement (the
“Arbitration Agreement”) which shall set forth the following:
(a) Each of Landlord’s and Tenant’s Exchanged Market Rents exchanged by the
parties pursuant to Section 2.2.4, above;
(b) An agreement to be signed by the Neutral Arbitrator, the form of which
agreement shall be attached as an exhibit to the Arbitration Agreement, whereby
the Neutral Arbitrator shall agree to undertake the arbitration and render a
decision in accordance with the terms of this Lease, as modified by the
Arbitration Agreement, and shall require the Neutral Arbitrator to demonstrate
to the reasonable satisfaction of the parties that the Neutral Arbitrator has no
conflicts of interest with either Landlord or Tenant;
(c)  Instructions to be followed by the Neutral Arbitrator when conducting such
arbitration;
(d) That Landlord and Tenant shall each have the right to submit to the Neutral
Arbitrator (with a copy to the other party), on or before the date that occurs
fifteen (15) days following the appointment of the Neutral Arbitrator, an
advocate statement (and any other information such party deems relevant)
prepared by or on behalf of Landlord or Tenant, as the case may be, in support
of Landlord’s or Tenant’s respective Exchanged Market Rents (the “Briefs”);
(e) That within five (5) business days following the exchange of Briefs,
Landlord and Tenant shall each have the right to provide the Neutral Arbitrator
(with a copy to the other party) with a written rebuttal to the other party’s
Brief; provided, however, such rebuttals shall be limited to the facts and
arguments raised in the other party’s Brief and shall identify clearly which
argument or fact of the other party’s Brief is intended to be rebutted;
(f) The date, time and location of the arbitration, which shall be mutually and
reasonably agreed upon by Landlord and Tenant, taking into consideration the
schedules of the Neutral Arbitrator, the Advocate Arbitrators, Landlord and
Tenant, and each party’s applicable consultants, which date shall in any event
be within forty-five (45) days following the appointment of the Neutral
Arbitrator;
(g) That no discovery shall take place in connection with the arbitration, other
than to verify the factual information that is presented by Landlord or Tenant;
(h) That the Neutral Arbitrator shall not be allowed to undertake an independent
investigation or consider any factual information other than presented by
Landlord or Tenant, except that the Neutral Arbitrator shall be permitted to
visit the Project and the buildings containing the Comparable Transactions;

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(i) Tenant shall have the right to present oral arguments to the Neutral
Arbitrator at the arbitration for a period of time not to exceed three (3) hours
(“Tenant’s Initial Statement”);
(j) Following Tenant’s Initial Statement, Landlord shall have the right to
present oral arguments to the Neutral Arbitrator at the arbitration for a period
of time not to exceed three (3) hours;
(k) That, not later than ten (10) days after the date of the arbitration, the
Neutral Arbitrator shall render a decision (the “Ruling”) indicating whether
Landlord’s or Tenant’s Exchanged Market Rents determination is closer to the
Market Rent;
(l) That following notification of the Ruling, Landlord’s or Tenant’s Exchanged
Market Rents determination, whichever is selected by the Neutral Arbitrator as
being closer to the Market Rent, shall become the then applicable Option Rent;
and
(m) That the decision of the Neutral Arbitrator shall be binding on Landlord and
Tenant.
(n) If a date by which an event described in Section 2.2.4.3 above, is to occur
falls on a weekend or a holiday, the date shall be deemed to be the next
business day.
2.2.4.4 In the event that the Option Rent shall not have been determined
pursuant to the terms hereof prior to the commencement of the Option Term,
Tenant shall be required to pay the Option Rent initially provided by Landlord
to Tenant, and upon the final determination of the Option Rent, the payments
made by Tenant shall be reconciled with the actual amounts of Option Rent due,
and the appropriate party shall make any corresponding payment to the other
party.
ARTICLE 3
BASE RENT
3.1 Base Rent. Commencing on the Rent Commencement Date (“Rent Commencement
Date”) as set forth in Section 4.1 of the Summary, 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, at least thirty (30) days prior to the
effective date of the change in the rent payment address, by notice to Tenant in
accordance with the provisions of Article 28 of this Lease 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 or by Automated Clearing House (but only
for so long as Landlord has agreed to accept payments by Automated Clearing
House), base rent (“Base Rent”), which shall be initially calculated in
accordance with Exhibit J, payable in equal monthly installments 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 may be expressly set forth
herein. On each anniversary of the Lease Commencement Date, the Base Rent shall
increase as set forth in Section 4.3 of the Summary. The estimated Base Rent for
the first full month following the Rent Commencement Date shall be paid at the
time of Tenant’s execution of this Lease and, upon
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determination of the actual Base Rent for such month in accordance with Exhibit
J, if the actual Base Rent is higher than the estimated Base Rent, then Tenant
shall pay to Landlord the shortfall with the next payment of Base Rent and if
the actual Base Rent is less than the estimated Base Rent, Landlord shall give
Tenant a credit for the overage against the next payment of Base Rent due under
this Lease. If any Rent payment date (including the Rent 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 accrue 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 terms of this
Lease that require proration on a time basis shall be prorated on the same
basis.
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 of this Lease. Such
payments by Tenant, together with any and all other amounts payable by Tenant to
Landlord pursuant to the terms 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. Without limitation on other obligations of the
parties which survive the expiration of the Lease Term, the obligations of
Tenant to pay the Additional Rent provided for in this Article 4 and the
obligation of Landlord to reconcile and reimburse Tenant for overpayments of
Additional Rent 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 [Intentionally Omitted].
4.2.2 “Direct Expenses” shall mean “Operating Expenses,” as that term is defined
in Section 4.2.4 below, and “Tax Expenses,” as that term is defined in
Section 4.2.5.1 below.
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.
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,
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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,
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 as reasonably determined by Landlord;
(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) the cost of parking area operation, repair, restoration,
and maintenance; (vi) fees and other costs, including management and/or
incentive 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 of
commercially reasonable size (provided if the personnel in such management
office perform management duties for properties other than the Project, such
fair rental value shall be allocated equitably between the Project and such
other properties for the purposes of inclusion in Operating Expenses);
(viii) subject to item (f), below, wages, salaries and other compensation and
benefits, including taxes levied thereon, of all persons engaged in the
operation, maintenance and security of the Project; (ix) costs under any
instrument pertaining to the sharing of costs by the Project, including as
relating to any business improvement district; (x) operation, repair,
maintenance and replacement of all systems and equipment and components thereof
of the Project; (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
non-capital re-roofing; (xii) amortization (including interest on the
unamortized cost at a commercially reasonable annual interest rate determined by
Landlord) over the useful life of the item in question as Landlord shall
reasonably determine in accordance with sound real estate management and
accounting principles, 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 capital
costs incurred in connection with the Project (A) which are intended to effect
economies in the operation or maintenance of the Project, or any portion
thereof, or to cause a net reduction in current or future Operating Expenses
(collectively, “Cost-Saving Capital Items”), which Cost-Saving Capital Items
will be included in Operating Expenses only to the extent of the anticipated
savings resulting therefrom) or to enhance the safety or security of the Project
or its occupants, (B) that are required to comply with conservation programs
first enacted or imposed upon the Project after the Lease Commencement Date,
(C) which are replacements, maintenance, or modifications occurring after the
second (2nd) anniversary of the Lease Commencement Date, (D) that are required
under any governmental law or regulation, except for capital expenditures 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
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authority as of the Lease Commencement Date (the costs described in clauses (A),
(B), (C) and (D) being referred to collectively as “Permitted Capital
Expenditures”); provided, however, that any Permitted Capital Expenditure shall
be amortized (including interest on the amortized cost) over the useful life of
the item in question, as reasonably determined by Landlord, in a manner
consistent with the practices of landlords of Comparable Buildings and otherwise
in accordance with sound real estate management and accounting principles;
(xiv) costs, fees, charges or assessments imposed by, or resulting from any
mandate imposed on Landlord by, any federal, state or local government for fire
and police protection, trash removal, community services, or other services
which do not constitute Tax Expenses, (xv) cost of tenant relation programs
reasonably established by Landlord, provided that such cost is reasonably
commensurate with similar tenant relation budgets applicable in Comparable
Buildings, and (xvi) payments under any easement, license, operating agreement,
declaration, restrictive covenant, or instrument pertaining to the sharing of
costs by the Building, including, without limitation, any covenants, conditions
and restrictions affecting the property (specifically including the
Declaration), and reciprocal easement agreements affecting the property, any
parking licenses, and any agreements with transit agencies affecting the
Property (collectively, “Underlying Documents”). Notwithstanding the foregoing,
for purposes of this Lease, Operating Expenses shall not, however, include:
(a) costs, including legal fees, space planners’ fees, advertising and
promotional expenses (except as otherwise set forth above), 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) cost of repairs or other work incurred by reason of fire, windstorm or other
casualty or by the exercise of the right of eminent domain to the extent
Landlord is compensated through proceeds of insurance or condemnation awards, or
would have been so reimbursed if Landlord had in force all of the insurance
required to be carried by Landlord under this Lease;
(c) the cost and expense of repairs that are covered by and actually reimbursed
or paid by warranties (Landlord agrees to use good faith efforts to enforce any
applicable warranties);
(d) except as set forth in items (xii) and (xiii) 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, and any other costs which would be properly
capitalized pursuant to sound real estate management and accounting principles,
other than Permitted Capital Expenditures;

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(e) costs for which the Landlord is entitled to be reimbursed by any tenant or
occupant of the Project or is actually reimbursed by insurance by its carrier or
any tenant’s carrier or by anyone else (provided that Landlord shall use
commercially reasonable efforts to obtain such reimbursement), and electric
power costs for which any tenant directly contracts with the local public
service company;
(f) charitable and political contributions or reserves of any kind;
(g) Landlord’s and Landlord’s managing agent’s general corporate or partnership
overhead and general administrative expenses, and all costs associated with the
operation of the business of the ownership or entity which constitutes
“Landlord,” as distinguished from the costs of Building operations, management,
maintenance or repair, including, but not limited to, costs of entity accounting
and legal matters, costs of any disputes with any ground lessor or mortgagee,
costs of acquiring, selling syndicating, financing, mortgaging or hypothecating
any of the Landlord’s interest in all or any part of the Project and/or Common
Areas;
(h) costs (including permit, license and inspection fees) incurred in renovating
or otherwise improving or decorating, painting or redecorating space for tenants
or other occupants or in renovating or redecorating vacant space, including the
cost of alterations or improvements to the Premises or to the premises of any
other tenant or occupant of the Project and any cash or other consideration paid
by Landlord on account of, with respect to, or in lieu of the improvement or
alteration work described herein;
(i) costs of all items and services for which Tenant reimburses Landlord or is
required to and does pay to third parties pursuant to the terms of this Lease;
(j) costs incurred due to violation by Landlord or its managing agent or any
tenant of the terms and conditions of any lease;
(k) payments to subsidiaries or affiliates of Landlord, for management (but not
including the management fee) or other services in or to the Project, or for
supplies or other materials to the extent that the costs of such services,
supplies, or materials exceed the costs that would have been paid had the
services, supplies or materials been provided by parties unaffiliated with the
Landlord on a competitive basis;
(l) any compensation and benefits paid to personnel working in or managing a
food service or health club or other commercial concession (excluding the
parking facility) operated by Landlord or Landlord’s managing agent;
(m) marketing, advertising and promotional costs and cost of signs in or on the
Building identifying the owner of the Building or other tenants’ signs;
(n) leasing commissions, attorneys’ fees, costs and disbursements and other
expenses incurred in connection with negotiations or disputes with tenants or
other occupants or prospective tenants or other occupants, or associated with
the enforcement of
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any leases or the defense of Landlord’s title to or interest in the Project or
any part thereof or Common Areas or any part thereof;
(o) legal, auditing, consulting and professional fees and other costs paid or
incurred in connection with financings, refinancings or sales of any interest in
Landlord or of Landlord’s interest in the Building or the Project or in
connection with any ground lease (including, without limitation, recording
costs, mortgage recording taxes, title insurance premiums and other similar
costs, but excluding those legal, auditing, consulting and professional fees and
other costs incurred in connection with the normal and routine maintenance and
operation of the Building and/or the Project);
(p) legal fees, space planner’s fees, architect’s fees, leasing and brokerage
commissions, advertising and promotional expenditures and any other marketing
expense incurred in connection with the leasing of space in the Building
(including new leases, lease amendments, lease terminations and lease renewals);
(q) the cost of any items to the extent such cost is required to be reimbursed
to Landlord by tenants of the Project (other than as a reimbursement of
operating expenses), or to the extent such cost is actually reimbursed to
Landlord, or is covered by a warranty to the extent of reimbursement for such
coverage;
(r) the cost of performing work or furnishing service to or for any tenant other
than Tenant, at Landlord’s expense, to the extent such work or service is in
excess of any work or service Landlord is obligated to provide (or is providing)
to Tenant or generally to other tenants in the Project at Landlord’s expense;
(s) the cost of acquiring sculptures, paintings or other objects of fine art in
the Building or the Common Areas, except, in the case of Common Areas, if such
sculptures, paintings, or other objects of fine art are required pursuant to any
Applicable Laws or government approvals (including approvals for the development
of the Project);
(t) any bad debt loss, rent loss, or reserves for bad debts or rent loss;
(u) unfunded contributions to operating expense reserves by other tenants;
   (v) expenses related solely and exclusively to the operation of any retail
space in the Project;
(w) damage and repairs necessitated by the gross negligence or willful
misconduct of Landlord Parties;
(x) interest, fines or penalties for late payment or violations of Applicable
Laws by Landlord, except to the extent incurring such expense is either (1) a
reasonable business expense under the circumstances, or (2) caused by a
corresponding late payment or violation of an Applicable Law by Tenant, in which
event Tenant shall be responsible for the full amount of such expense;

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(y) costs for the original construction and development of the Building and, to
the extent actually covered and reimbursed by insurance or a warranty (Landlord
agrees to use good faith efforts to enforce any applicable warranties),
nonrecurring costs for the repair or replacement of any structural portion of
the Building made necessary as a result of defects in the original design,
workmanship or materials;
  (z) 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;
  (aa) depreciation for the Building, except as permitted pursuant to
items (xii) and (xiii), above;
(bb) reserves for future improvements, repairs, additions, etc.;
  (cc) salaries and all other compensation (including fringe benefits) of
partners, officers and executives at and above the grade of officer;
(dd) amount paid as ground rental for the Project by the Landlord;
(ee) 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;
(ff) 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;
(gg) 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;
(hh) any costs expressly excluded from Operating Expenses elsewhere in this
Lease;
(ii) 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;

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(jj) 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 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; and
(kk) fees payable by Landlord for management of the Project in excess of three
percent (3%) of gross rental revenues received by Landlord under this Lease,
adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the
Building with Tenant paying full rent, as contrasted with free rent, half-rent
and the like, including base rent, pass-throughs, for any calendar year or
portion thereof (for avoidance of doubt, if and to the extent that Tenant pays
for any utility or other services hereunder on a “direct” basis to a third party
provider of such utility or service, such payment will not be quoted “gross
rental revenues” for the purposes of the calculation of Landlord’s management
fee; provided that, notwithstanding that Tenant will not be paying for
electrical or natural gas utilities on a “direct” basis to a third party
provider of such utilities, Landlord shall exclude electrical and natural gas
utilities from “gross rental revenues” for the purposes of the calculation of
Landlord’s management fee)..
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 if it had at its own expense
furnished such work or service to such tenant. If the Project is not fully
occupied during all or a portion of any Expense Year, Landlord may make an
appropriate adjustment to the components of Operating Expenses which vary with
variations in Project occupancy levels for such year to determine the amount of
Operating Expenses that would have been incurred had the Project been fully
occupied; and the amount so determined shall be deemed to have been the amount
of Operating Expenses for such year.
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
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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, and
including estimated amounts based on pending but uncompleted reassessments of
the Project, as reasonably determined by Landlord), 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 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 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’ and consultants’ fees) incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are incurred. Tax refunds 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 within thirty (30) days following Landlord’s
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request accompanied by reasonably detailed back-up documentation. Tenant’s Share
of any such increased Tax Expenses. Notwithstanding anything to the contrary
contained in this Section 4.2.8 (except as set forth in Section 4.2.8.1, above),
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, 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, (iv) all penalties and interest on any Tax Expenses as a result
of Landlord’s failure to pay the same as and when payable, and (v) and any
amounts payable by other Project occupants pursuant to the provisions of their
respective leases which are similar to Section 4.5 of this Lease.
4.2.6 “Tenant’s Share” shall mean the percentage set forth in Section 6 of the
Summary.
4.3 Allocation of Direct Expenses. The parties acknowledge that the Building is
a part of a multi-building project, such that certain costs and expenses
incurred in connection with the Project (i.e., the Direct Expenses) should be
shared between the Tenant (as the sole tenant of the Building) and the owners
and tenants of the other buildings in the Project, and such shared costs shall
be allocated pursuant to the Declaration or, if the Declaration does not so
allocate such shared costs, as reasonably determined by Landlord. In addition,
there shall also be Direct Expenses allocated solely to the Tenant because the
same are attributable solely to the Building; Landlord will calculate such
allocation in good faith.
4.4 Calculation and Payment of Additional Rent. Tenant shall pay to Landlord, in
the manner set forth in Section 4.4.1, below, and as Additional Rent, Tenant’s
Share of Direct Expenses for each Expense Year.
4.4.1 Statement of Actual Direct Expenses and Payment by Tenant. Landlord shall
endeavor to give to Tenant following the end of each Expense Year, a statement
(the “Statement”) which shall state in general the major categories of the
Direct Expenses incurred or accrued for such preceding Expense Year, as
applicable (inclusive of a reasonable description of any Permitted Capital
Expenditures which are included in Operating Expenses and, if applicable, the
calculations made by Landlord to adjust Direct Expenses pursuant to the final
paragraph of Section 4.2.4), and which shall indicate the amount of Tenant’s
share of Direct Expenses. Upon receipt of the Statement for each Expense Year
commencing or ending during the Lease Term, if Tenant underpaid Tenant’s Share
of Direct Expenses for such Expenses Year, Tenant shall pay, with its next
installment of Base Rent which is due within thirty (30) days following receipt
of the Statement, the full amount of Tenant’s Share of Direct Expenses for such
Expense Year, less the amounts, if any, paid during such Expense Year as
“Estimated Direct Expenses,” as that term is defined in Section 4.4.2, below,
and if Tenant paid more as Estimated Direct Expenses than the actual Tenant’s
Share of Direct Expenses, Tenant shall receive a credit in the amount of
Tenant’s overpayment against Rent next due under this Lease unless the Lease
Term has expired, in which event Landlord shall refund the appropriate amount to
Tenant. The failure of Landlord to timely furnish the Statement for any Expense
Year shall not prejudice Landlord or Tenant from
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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 Direct Expenses for the Expense Year in which this
Lease terminates, Tenant shall, within thirty (30) days following Tenant’s
receipt of such final Statement, pay to Landlord such amount, and if Tenant paid
more as Estimated Direct Expenses than the actual Tenant’s Share of Direct
Expenses, 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, provided
that, other than Tax Expenses and costs incurred for utilities, Tenant shall not
be responsible for Tenant’s Share of any Operating Expenses which are first
billed to Tenant more than two (2) calendar years after the end of the Expense
Year to which such Operating Expenses relate.
 4.4.2 Statement of Estimated Direct Expenses. In addition, Landlord shall
endeavor to give Tenant a yearly expense estimate statement (the “Estimate
Statement”) which shall set forth Landlord’s reasonable estimate (the
“Estimate”) of what the total amount of Direct Expenses for the then-current
Expense Year shall be and Tenant’s Share of Direct Expenses (the “Estimated
Direct Expenses”). 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 Estimated Direct Expenses under this Article 4, nor shall
Landlord be prohibited from revising any Estimate Statement or Estimated Direct
Expenses theretofore delivered to the extent necessary. Thereafter, Tenant shall
pay, within thirty (30) days following demand by Landlord and continuing
thereafter with each installment of Base Rent due, a fraction of the Estimated
Direct Expenses for the then-current Expense Year (reduced by any amounts paid
pursuant to the 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 Direct Expenses set forth in the previous Estimate Statement delivered
by Landlord to Tenant.
4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.
4.5.1 Tenant shall be liable for and shall pay ten (10) days before delinquency,
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 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 upon 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 Notwithstanding any contrary provision herein, Tenant shall pay prior to
delinquency any (i) rent tax or sales tax, service tax, transfer tax or value
added tax, or any other
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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 Landlord’s Books and Records. Landlord shall maintain, for a period of not
less than three (3) years, books and records with respect to Direct Expenses in
accordance with generally accepted real estate accounting and management
practices, consistently applied. Notwithstanding anything to the contrary
contained in this Lease, if, within one hundred eighty (180) days after receipt
of a Statement by Tenant, Tenant is not then in Default, then Tenant shall have
the right to cause Landlord’s books and records with respect to such Statement
only to be audited by a nationally recognized firm of certified public
accountants reasonably approved by Landlord, at no cost or expense to Landlord,
which has prior experience in the review of financial statements and which shall
not be retained by Tenant on a contingency fee basis; provided, however, Tenant
shall not have the right to perform any such audit more than one (1) time for
any Expense Year during the Lease Term. Any audit conducted by or on behalf of
Tenant shall be completed in a diligent manner and timely manner (but in any
event within two (2) months after Landlord makes Landlord’s books and records
available to Tenant for review) and shall be performed during Landlord’s normal
business hours and in a manner so as to minimize interference with Landlord’s
business operations. Landlord shall have no obligation to make photocopies of
any of Landlord’s ledgers, invoices or other items but Tenant may, at Tenant’s
cost make such copies as and to the extent Tenant in good faith believes that to
do so will facilitate Tenant’s efficient review of Landlord’s books and records.
Tenant agrees to keep, and to cause Tenant’s accountant and its employees to
keep, all information revealed by any audit of Landlord’s books and records
strictly confidential and not to disclose any such information or permit any
such information to be disclosed to anyone other than Tenant’s financial and
legal representatives and Landlord, unless compelled to do so by a court of law,
and Tenant and its accountant and their employees shall sign a commercially
reasonable confidentiality agreement reflecting such confidentiality. Tenant’s
audit shall be limited to an on-site review of Landlord’s books and records
(including reasonable supporting documentation). If after such audit, Landlord
and Tenant dispute the results of such audit, at Tenant’s request, a certified
public accounting firm selected by Landlord, and reasonably approved by Tenant,
shall, at Tenant’s cost, conduct an audit of the relevant Direct Expenses. The
amounts payable under this Section 4.6 by Landlord to Tenant or by Tenant to
Landlord, as the case may be, will be appropriately adjusted on the basis of
such audit. If such audit discloses an overstatement of Direct Expenses in
excess of three percent (3%) for such Expense Year, Landlord shall rebate any
such overcharge and, additionally reimburse Tenant for the reasonable cost of
both audits; otherwise the cost of such audits shall be borne by Tenant. Tenant
agrees that this Section 4.6 shall be the sole method to be used by Tenant to
dispute the amount of any Direct Expenses payable by Tenant pursuant to the
terms of this Lease, and Tenant hereby waives any other rights at law or in
equity relating thereto. Notwithstanding the foregoing, any expenses allocated
to Direct Expenses pursuant to the Declaration shall be subject to the audit
procedure in Declaration, and Landlord shall audit such expenses under the
Declaration upon Tenant’s request. Tenant shall pay all costs of such
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foregoing audit unless and to the extent Tenant is ultimately determined to be
entitled to reimbursement under the Declaration.
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. 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, 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, or any Underlying Documents. Tenant shall not do or
permit anything to be done in or about the Premises which will in any way damage
the reputation of the Project or obstruct or interfere with the rights of other
tenants or occupants of the Building, or injure or annoy them or use or allow
the Premises to be used for any unlawful purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises. Tenant shall
comply with, and Tenant’s rights and obligations under the Lease and Tenant’s
use of the Premises shall be subject and subordinate to, all recorded easements,
covenants, conditions, and restrictions now or hereafter affecting the Project.
ARTICLE 6
SERVICES AND UTILITIES
6.1 Standard Tenant Services. As part of the Landlord Work, Landlord, Landlord
shall cause utility connections to be brought to the Building and utilities to
be separately submetered. Tenant shall be responsible for establishing account
with all utility providers and directly paying for all utilities.
6.1.1 Tenant shall contract directly with the applicable utility provider for
the provision of electricity services to the Premises and shall pay directly to
such utility provider the cost of all electricity services provided to and/or
consumed in the Premises, which electricity shall be separately submetered (or
otherwise equitably allocated and directly charged by Landlord to Tenant).
Tenant’s use of electricity shall never exceed the capacity of the feeders to
the Project or the risers or wiring installation; provided that Tenant may, as
an Alteration or part of the Tenant Improvements, but subject to Landlord’s
approval, which shall not be unreasonably withheld, delayed or conditioned,
expand or increase the capacity of the feeders to the Premises.

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6.1.2 Landlord shall provide connections for city water stubbed to the Premises.
6.1.3 Tenant shall contract directly with a licensed and reputable janitorial
provider for janitorial services and other cleaning in the Premises, and Tenant
shall pay the cost of such contract directly to the janitorial services
provider; in no event will Tenant be required to retain a union-affiliated
janitorial contractor. The janitorial specifications for such contractor shall
be reasonably consistent with those specifications that would be utilized by a
reasonably prudent landlord of Comparable Buildings. Landlord shall have the
right upon reasonable prior notice to Tenant to inspect the Premises for
purposes of confirming that Tenant is cleaning the Premises as required by this
Section 6.1.3, and to require Tenant to provide additional cleaning, if
necessary in order to comply with the immediately preceding sentence. In the
event Tenant shall fail to provide any of the services described in this
Section 6.1.3 within ten (10) business days after notice from Landlord, which
notice shall not be required in the event of an emergency, Landlord shall have
the right to provide such services and any charge or cost incurred by Landlord
in connection therewith shall be deemed Additional Rent due and payable by
Tenant upon receipt by Tenant of a written statement of cost from Landlord.
6.1.4 Subject to applicable laws and the other provisions of this Lease, and
except in the event of an emergency, Tenant shall have access to the Building
twenty-four (24) hours per day, seven (7) days per week, every day of the year.
Subject to the terms of this Lease, Tenant may, at its own expense, install its
own security system (“Tenant’s Security System”) for the Building and/or retain
its own security personnel at the Building, provided that Tenant shall provide
Landlord and Landlord’s personnel with means (i.e., key cards, etc.) to access
the Building on an unrestricted basis (but subject to the terms of, and except
as set forth in, Article 27, below). Tenant’s Security Systems shall by subject
to Landlord’s prior review and approval (not to be unreasonably withheld), and
the installation of Tenant’s Security System shall be performed pursuant to
Article 8 of this Lease, below, or as part of the Tenant Improvements. Tenant
shall be solely responsible, at Tenant’s sole cost and expense, for the
installation, monitoring, operation and any removal of Tenant’s Security System.
6.1.5 Tenant will have the exclusive right to use all of the existing Building
risers, raceways, shafts and conduit available for the use in the Building.
6.2 Additional Services. Notwithstanding any provision to the contrary contained
in this Lease, Tenant shall promptly pay to Landlord, Landlord’s standard charge
for any services provided to Tenant which Landlord is not specifically obligated
to provide to Tenant pursuant to the terms of this Lease.
6.3 Interruption of Use. Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent (except as specifically set forth in
Section 19.5.2 of this Lease) 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 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 specifically set forth in Section 19.5.2 of this
Lease) or performing any of its obligations under this Lease. Furthermore,
Landlord shall not be liable under any circumstances for a loss of, or
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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.
ARTICLE 7
REPAIRS
7.1 Tenant’s Obligations. Throughout the Lease Term, Tenant shall, at Tenant’s
sole cost and expense, maintain, repair and improve, to the Management Standard
(defined in Section 7.2.1 below), all portions of the Building and Premises
(other than those portions which are governed by the Landlord Maintenance
Responsibilities, defined in Section 7.7 below), in accordance with the
following provisions of this Article 7. For purposes of this Lease, the portions
of the Building and Premises to be so maintained, repaired and improved by
Tenant and its Facilities Team (as defined in Section 7.2.2 below) shall
include, without limitation, (i) exterior glass and mullions, windows, doors,
glazing, roof membrane, gaskets and seals, elevator up to the mechanical room of
the Building, and loading areas, and (ii) the mechanical, electrical, fire
protection, plumbing, life safety, heating, ventilations and air conditioning
and other systems and equipment in the Building and Premises (but excluding the
hot water lines) (items specified under this subsection (ii) are, collectively,
the “Building Systems”) (collectively, “Tenant Maintenance Responsibilities”).
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.
7.2 Management Standards.
7.2.1 Professional Maintenance. Tenant shall perform the Tenant Maintenance
Responsibilities in a manner consistent with the standards followed by Landlord
and other first-class owners and management companies that are managing
Comparable Buildings (the “Management Standard”).
7.2.2 Facilities Team. Landlord and Tenant hereby acknowledge that Tenant’s
in-house facilities management department (collectively, the “Facilities Team”)
is comprised of a multi-disciplined staff of trained and professional facilities
maintenance, repair and management personnel (from time to time, however, Tenant
may elect to “outsource” some or all of the Facilities Team, in accordance with
the Management Standard). Tenant shall cause, throughout the Lease Term, its
Facilities Team to maintain materially consistent levels of capability and
expertise, and apply such Facilities Team to the Project, as reasonably required
to satisfy the Management Standard.
7.2.3 Service Agreements. To the extent required to perform the Tenant
Maintenance Responsibilities, Tenant shall enter into service, repair and
maintenance agreements (collectively, the “Service Agreements“) upon the terms
and conditions of this Lease. With respect to such Service Agreements, Tenant
shall endeavor to provide Landlord with copies of the same, and in any event,
will reasonably promptly provide Landlord with copies thereof upon Landlord’s
request.

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7.3 Records and Reports and Meeting Requirements.
7.3.1 Annual Management Reports. No more than once per calendar year during the
Lease Term, upon Landlord’s request, and only to the extent the information is
not already readily available to Landlord on an independent basis, Tenant shall
prepare and deliver to Landlord (i) if the Premises are separately metered, a
utilities consumption and demand report and analysis for the preceding year and
(ii) any other reports as Landlord shall, on an annual basis, reasonably request
in connection with the operation, repair and maintenance of the Building
Systems, which reports are generally consistent with the Management Standard.
7.3.2 Landlord’s Ownership of Records. All plans and specifications maintained
by Tenant in connection with the Building and/or any improvements, and any
warranties and guaranties and operating manuals relating to the Building and/or
Premises (collectively, the “Building Documents”) shall become the property of
Landlord, and such documents (but Tenant may retain copies thereof) shall be
delivered to Landlord upon the expiration or earlier termination of the Lease
Term, to the extent not previously delivered to Landlord.
7.3.3 Meeting Requirements. At the written request of either Landlord or Tenant
(a “MM Request”), each party shall arrange to meet and confer with the other (at
a mutually reasonable and convenient time and location), as to the status of the
maintenance, repair and other work required to be performed under this Lease and
to (i) if requested by either party, conduct a full inspection of the condition
of the Building and Premises including the Building Structure and Building
Systems, (ii) if requested by either party, review and discuss the Service
Agreements, and (iii) if requested by either party, review and discuss Tenant’s
and Landlord’s obligations as set forth under this Lease (each, a “Maintenance
Meeting”); provided, however, in no event shall Landlord or Tenant be required
to participate in more than one such Maintenance Meeting in any calendar year,
unless such a Maintenance Meeting is required in connection with an emergency
situation or event. In connection with, and in advance of, any such Maintenance
Meeting, to the extent Landlord’s MM Request included a request for maintenance
and repair reports, documents and back-up materials, Tenant shall promptly
deliver any maintenance and repair reports, documents and back-up materials
related to the maintenance, repair and other work required to be performed by
Tenant under the Lease, to the extent the same are regularly and customarily
generated and maintained by, and in the possession of, its Facilities Team
(collectively, the “M&R Reports”).
7.3.4 Books and Records. Tenant shall maintain complete, detailed and accurate
records, books and accounts of all funds disbursed in connection with Tenant’s
management and operation of the Premises (excepting salary disbursements
internal to Tenant), including all M&R Reports. Tenant agrees to keep all of the
aforementioned documents (collectively, the “Books and Records”) safe, available
and separable from any record not having to do with the Building. Tenant shall
not dispose of any such Books or Records until the same are at least
two (2) years old.
7.3.5 Tenant’s Risk Management Obligations. Tenant shall promptly investigate
and make a full timely written report to Landlord as to all alleged incidents of
significant damage (i.e., greater than $150,000.00) known to Tenant and/or all
claims for damages
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relating to the Premises known to Tenant, including any damage or destruction to
the Premises. Tenant agrees not to knowingly permit the use of the Premises for
any purpose which might void any warranties on the Building or void any policy
of insurance held by Landlord or unreasonably increase the premiums therefor
unless Tenant pays for such increased insurance payments or which might render
any loss insured thereunder uncollectible.
7.4 Repair, Maintenance and Testing. Tenant shall, at Tenant’s sole cost and
expense maintain and repair and improve, in accordance with the Management
Standard, and pursuant to the specifications set forth in Exhibit K attached
hereto (to the extent applicable to Tenant Maintenance Responsibilities), those
portions of the Building and Premises (inclusive of improvements, fixtures and
furnishings) which are Tenant Maintenance Responsibilities. Landlord shall have
the right to reasonably modify and amend the terms and conditions of Exhibit K
attached hereto, from time to time, provided that Landlord shall consult with
Tenant prior to any such modification. Tenant shall comply with all Applicable
Laws in connection with the Tenant Maintenance Responsibilities. At Landlord’s
option, if Tenant fails to comply with its obligations, as required in this
Article 7, Landlord may, after written notice to Tenant, and after affording
Tenant a reasonable time period within which to conduct such repair or
improvement, and after providing Tenant a second notice setting forth Landlord’s
intention to engage in self-help (except in the event of an emergency, in which
case no notice to Tenant shall be required), but need not, perform such
obligations, and Tenant shall pay Landlord the reasonable cost thereof,
including a reasonable percentage of the cost thereof sufficient to reimburse
Landlord for all overhead, general conditions, fees and other costs or expenses
arising from Landlord’s involvement with such actions by Landlord forthwith upon
being billed for same.
7.5 Capital Improvements. Notwithstanding anything else to the contrary
contained in this Lease, Tenant, at Tenant’s sole cost and expense, shall be
required to perform all capital improvements in connection with the performance
of Tenant’s Maintenance Obligations. Tenant shall provide written notice to
Landlord in the event that any such capital improvements are required during the
Lease Term and shall perform the same in accordance with the terms of Article 8
of the Lease.
7.6 Tenant’s Responsibilities Upon Termination of Lease. Upon the expiration or
earlier termination of this Lease for any reason, Tenant shall forthwith,
without necessity of demand or notice, deliver the following to Landlord, or
Landlord’s appointed agent on the effective date of expiration or termination
(except to the extent that any such item has already been delivered to
Landlord).
7.6.1 Copies of the Books and Records for the most recent full calendar year and
any subsequent partial calendar year.
7.6.2 A final accounting of all of Tenant’s direct payment obligations under
Section 7.1 of the Lease (and the remaining terms of this Lease) attributable to
the Project and accruing on or before the date of termination.

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7.6.3 Any third party warranties, guaranties and operating manuals in Tenant’s
possession relating to the improvements in the Project and the Building Systems
performed by Tenant.
7.6.4 All keys related to the telephone closets, janitorial closets, electrical
closets, storage rooms, storage areas, PG&E rooms or areas, rooftop access
points, and other areas which would traditionally be characterized as common
areas.
The obligation of Tenant to deliver the foregoing shall survive the termination
of this Lease.
7.7 Landlord’s Maintenance Obligations. Landlord shall repair, replace,
maintain, and improve the (i) exterior Common Areas of the Building and Project
on the Property (including sidewalks); (ii) structural portions of the Building,
which shall mean the foundation, floor slabs, curtain wall (excluding gaskets
and seals), structural portions of the roof (excluding the roof membrane),
columns, and beams (collectively, the “Building Structure”), and (iii) all
utility connections to the Building up to the point (i.e., the main switchgear
panel) where Tenant accesses such utilities, all in accordance with the
Management Standard (collectively, the “Landlord Maintenance Responsibilities”).
Landlord’s costs of performing Landlord Maintenance Responsibilities and
Landlord’s compliance with law obligations shall be included in the Operating
Expenses, to the extent permitted by Article 4 above. Any entry of the Premises
by Landlord in connection with the foregoing shall be done consistent with the
terms of Article 27 of this Lease. Notwithstanding anything to the contrary
herein, Landlord shall, in good faith, consult with Tenant in advance with
respect to all material decisions related to any proposed renovations of the
exterior Common Areas, provided that Landlord will retain the ultimate
discretion over any such work, subject to the terms of the immediately preceding
sentence.
7.8 Tenant’s Self-Help Right. Notwithstanding any provision set forth in this
Lease to the contrary, if (a) Tenant provides prior written notice to Landlord
of an event or circumstance which requires the action of Landlord with respect
to repair and/or maintenance that are Landlord’s obligations hereunder (a
“Required Action”), (b) Landlord is, in fact, required to perform such repairs
and/or maintenance under the terms of this Lease, and (c) Landlord (i) fails to
commence such Required Action within a reasonable period of time, given the
circumstances, after the receipt of such notice, but in any event not later than
twenty (20) days after receipt of such notice (the “Commencement Period”), or
(ii) fails to pursue such Required Action after the Commencement Period with
reasonable diligence and complete the same with a reasonable time (the “Required
Action Period”), then Tenant may proceed to take the Required Action after
delivery of an additional ten (10) day notice to Landlord and any lender for
which Tenant has been given an address for notices (such second notice given not
earlier than the expiration of the first aforesaid twenty (20) day period for
commencement of the repair and/or maintenance, or not earlier than the
expiration of the Required Action Period, as applicable) specifying that the
first twenty (20) day period has expired or the Required Action Period has
expired, the specific action required and that Tenant intends to take such
Required Action. If such action is required under the terms of this Lease to be
taken by Landlord and is not commenced or completed (as applicable) by Landlord
within such second ten (10) day period, then Tenant shall be entitled to take
such action in the manner described below and shall be further entitled to
prompt
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reimbursement by Landlord of Tenant’s reasonable and necessary, actual
out-of-pocket costs and expenses in taking such action (and only such action as
specified in the second ten (10) day notice given to Landlord), but only to the
extent such amounts would not have been payable by Tenant under this Lease. Such
amounts shall be promptly reimbursed by Landlord on the receipt from Tenant of a
detailed invoice setting forth a particularized breakdown of the costs and
expenses incurred in connection with the action taken by Tenant. Notwithstanding
the foregoing to the contrary, if the Required Action represents a response to
an Emergency (defined below), then the required response period with respect to
the two (2) notices described above shall be reduced, in such case, to one (1)
business day with respect to the first (1st) notice and one (1) business day
with respect to the second (2nd) notice, provided that Tenant’s first (1st) and
second (2nd) notices each specify in bold faced letting that notice in question
constitutes a request for Landlord’s Required Action with respect to an
Emergency pursuant to the provisions of this Section 7.2. If Tenant takes any
such action, Tenant shall use only those contractors used by Landlord in the
Building for work unless such contractors are unwilling or unable to perform, or
timely perform such work, in which event Tenant may utilize the services of any
other qualified contractor which normally and regularly performs similar work in
Comparable Buildings. Promptly following completion of any work taken by Tenant
pursuant to this Section 7.2, Tenant shall deliver a detailed invoice of the
work completed, the materials used and the costs relating thereto. If Landlord
does not deliver a detailed written objection to Tenant within thirty (30) days
after receipt of an invoice from Tenant, then, subject to the limitation below,
Tenant shall be entitled to deduct from Rent next due and payable by Tenant
under this Lease, the amount set forth in such invoice. If, however, Landlord
delivers to Tenant, within thirty (30) days after receipt of Tenant’s invoice, a
written objection to the payment of such invoice, setting forth with reasonable
particularity Landlord’s reasons for its claim that such action did not have to
be taken by Landlord pursuant to this Lease or that the charges are excessive
(in which case Landlord shall pay the amount it contends would not have been
excessive), then Tenant shall not then be entitled to such deduction from Rent.
On the other hand, Tenant may proceed to claim a default by Landlord. If Tenant
prevails in such claim, the amount of the award (which shall include interest
from the time of each expenditure by Tenant until the date Tenant receives such
amount by payment or offset and attorneys’ fees and related costs) may be
deducted by Tenant from the Rent next due and owing under this Lease, subject to
the limitation below. Notwithstanding the foregoing, with respect to any
deduction from Rent permitted under this Section, that Tenant shall not been
entitled to deduct or offset more than twenty-five percent (25%) of the Base
Rent payable hereunder in any calendar month pursuant to the provisions of this
Section 7.2 (for example, if the amount owed by Landlord to Tenant is the
equivalent of one (1) full calendar month’s payment of Base Rent, Tenant would
be entitled to deduct twenty-five percent (25%) of the Base Rent payable
hereunder for the next four (4) successive calendar months in order to offset
such amount). For purposes of this Section 7.2, an “Emergency” shall mean an
event threatening immediate and material danger to people located in the
applicable Building or immediate, material damage to the Building, Building
Systems, Building Structure, any portion of the Premises, or that creates a
realistic possibility of an immediate and material interference with, or
immediate and material interruption of a material aspect of Tenant’s business
operations which are carried on therein.
ARTICLE 8

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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 electrical, 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
thirty (30) 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 Building or is visible
from the exterior of the Building. If Tenant requests Landlord’s approval for
any proposed Alterations pursuant to this Article 8, Landlord shall respond, in
writing, stating whether the Alterations are approved or disapproved, and if
disapproved, the grounds for such disapproval, within five (5) business days
after receipt of Tenant’s request for approval of the proposed Alterations;
Landlord’s response shall be in writing and, if Landlord withholds its consent
to any Alterations described in the plans and specifications provided to
Landlord concurrently with Tenant’s request for Landlord’s approval thereof,
Landlord shall specify in reasonable detail in Landlord’s notice of disapproval,
the basis for such disapproval, and the changes to Tenant’s plans which would be
required in order to obtain Landlord’s approval. If Landlord fails to notify
Tenant of Landlord’s approval or disapproval of any such plans within such
five (5) business day period, Tenant shall have the right to provide Landlord
with a second written request for approval (a “Second Request“) that
specifically identifies the applicable plans and contains the following
statement in bold and capital letters: “THIS IS A SECOND REQUEST FOR APPROVAL OF
PLANS PURSUANT TO THE PROVISIONS OF SECTION 8.1 OF THE LEASE. IF LANDLORD FAILS
TO RESPOND WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE, THEN
LANDLORD SHALL BE DEEMED TO HAVE APPROVED THE PLANS DESCRIBED HEREIN.” If
Landlord fails to respond to such Second Request within five (5) business days
after receipt by Landlord, the plans in question shall be deemed approved by
Landlord, and Tenant may, subject to the other provisions of this Article 8,
commence the Alterations described in such plans. If Landlord timely delivers to
Tenant notice of Landlord’s disapproval of any plans, Tenant may revise Tenant’s
plans to incorporate the changes suggested by Landlord in Landlord’s notice of
disapproval, and resubmit such plans to Landlord; in such event, the scope of
Landlord’s review of such plans shall be limited to Tenant’s correction of the
items in which Landlord had previously objected in writing. Landlord’s review
and approval (or deemed approval) of such revised plans shall be governed by the
provisions set forth above in this Section 8.1. The procedure set out above for
approval of Tenant’s plans will also apply to any change, addition or amendment
to Tenant’s plans. Notwithstanding anything in this Article 8 to the contrary,
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
(x) such Alterations are decorative only (i.e., installation of carpeting or
painting of the Premises) or (y) such Alterations (i) do not affect the Building
Structure or Building Systems, (ii) are not visible from the exterior of the
Building, (iii) do not require a building or construction permit, and (iv) cost
less than $250,000.00 for a particular job of work. Additionally, Tenant will
have the right, without the necessity of Landlord’s prior written consent so
long as the work does not affect the Base Building in any material or adverse
way, to perform any work related to Tenant’s clean
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rooms or other operational space that may be necessitated by Tenant’s obligation
to comply with regulatory or industry guidelines regarding the operation of such
areas or in response to regulatory inspections or other audits, it being
acknowledged by Landlord that Tenant’s obligation to continue operating within
the Premises on a continuous basis requires the ability from time to time, to
perform such compliance work immediately. 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 for
which Landlord’s prior consent is required, such requirements as Landlord in its
reasonable discretion may deem desirable (provided that Tenant will not be
required to use union labor and may select the contractor(s) or vendors who will
perform such work). Tenant shall construct its 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 Alameda, all in
conformance with Landlord’s reasonable construction rules and regulations;
provided, however, that prior to commencing to construct any Alteration
requiring Landlord’s consent, 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, then Landlord shall have
the right, at Tenant’s expense, to perform such component of the Alterations,
provided that Landlord agrees to competitively bid the cost of such work in
order to ensure that the cost to perform such work is commercially competitive
and to use diligent efforts to have such work performed in accordance with
Tenant’s reasonably established schedule for the performance of such work. As
used herein, the “Base Building” shall mean the Building Structure and Building
Systems. 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 owners or tenants in the Project. 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 Alameda in accordance with Section 8182
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 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 by Tenant directly to
contractors, Tenant shall (i) comply with Landlord’s reasonable requirements for
final lien releases and waivers in connection with Tenant’s payment for work to
contractors, and (ii) comply with 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 two and one half percent (2.5%) of the so-called
“hard” 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
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connection with Landlord’s review of such work, but will not be required to pay
any construction supervision fee to Landlord or any Landlord Affiliate.
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 carries “Builder’s All Risk” insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord, commensurate with the practice of owners of Comparable Buildings,
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
discretion, with respect to Alterations which are anticipated to cost in excess
of $250,000.00, 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 Alterations and naming Landlord as a
co-obligee.
8.5 Landlord’s Property. All Alterations, improvements (including Tenant
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 the property of Landlord, except that (i)
Tenant may remove any Alterations, improvements, fixtures and/or equipment which
Tenant can substantiate to Landlord have not been paid for with any Tenant
Improvement Allowance funds provided to Tenant by Landlord, (ii) prior to the
expiration or earlier termination of this Lease, Tenant shall remove any
Alterations that Landlord notified Tenant must be removed at the time Landlord
approved such Alterations pursuant to Section 8.1, provided, however, that
Landlord may only be entitled to require that Tenant remove Specialty
Alterations (defined below) and (iii) prior to the expiration or earlier
termination of this Lease, Tenant shall remove any Specialty Alterations that
did not require Landlord’s approval pursuant to Section 8.1; provided, in each
of cases (i) - (iii) Tenant repairs any damage to the Premises and Building
caused by such removal and returns the affected portion of the Premises to their
condition existing prior to the installation of such Alterations, improvements
(including Tenant Improvements), fixtures and/or equipment. 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. As used herein, a “Specialty Alteration” is any Alteration that is
not a normal and customary general office improvement, including, but not
limited to improvements which (i) perforate, penetrate or require reinforcement
of a floor slab (including, without limitation high-density filing or racking
systems), (ii) consist of the installation of a raised flooring system, (iii)
consist of the installation of a vault or other similar device or system
intended to secure the Premises or a portion thereof in a manner that exceeds
the level of security necessary for ordinary office space, (iv) involve material
plumbing, mechanical, or electrical connections (such as, for example but not by
way of limitation, cooking kitchens, any saunas, showers, and executive
bathrooms outside of the Building core and/or special fire safety systems), (v)
consist of the dedication of any material portion of the Office Space to
non-office usage, or (vi) can be seen from outside the Building.  For avoidance
of doubt, an open ceiling will not be considered a Specialty Alteration.

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ARTICLE 9
COVENANT AGAINST LIENS
Tenant shall keep the Project, Property 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 ten (10) business 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 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 Building 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 Property, Building 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, Property, Building and Premises.
ARTICLE 10
INSURANCE
10.1 Indemnification and Waiver. Except to the extent arising from the sole
negligence or willful misconduct of or breach of this Lease by Landlord or any
Landlord Parties (defined below) but subject to Section 10.5 below, Tenant
hereby assumes all risk of damage to property or injury to persons in, upon or
about the Premises (including, but not limited to, any personal injuries
resulting from a slip and fall in, upon or about the Premises) 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. 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 (i) any cause in, on or about
the Premises (including, but not limited to, a slip and fall occurring following
Landlord’s delivery of the Premises to Tenant and thereafter during Tenant’s
occupancy of the Premises) during the Lease Term and any holdover period,
(ii) 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 of Tenant who are at the Project at Tenant’s request, as well as guests
or
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licensees of Tenant or any such person, in, on or about the Project or (iii) any
breach of the terms of this Lease, during the Lease Term and any holdover
period, provided that the terms of the foregoing indemnity shall not apply to
the sole negligence or willful misconduct of Landlord or Landlord’s employees,
agents, representatives or contractors. Should Landlord be named as a defendant
in any suit brought against Tenant in connection with or arising out of any of
the foregoing, Tenant shall pay to Landlord its costs and expenses incurred in
such suit, including without limitation, its actual professional fees such as
reasonable appraisers’, accountants’ and attorneys’ fees. Subject to
Section 10.5 below, Landlord shall indemnify, defend, protect, and hold harmless
Tenant, its partners, and their respective officers, agents, servants,
employees, and independent contractors (collectively, “Tenant Parties”) from any
and all loss, cost, damage, expense and liability (including without limitation
reasonable attorneys’ fees) arising from the gross negligence or willful
misconduct of, Landlord or any Landlord party in, on or about the Project,
except to the extent caused by the sole negligence or willful misconduct of the
Tenant Parties. Notwithstanding anything to the contrary set forth in this
Lease, either party’s agreement to indemnify the other party as set forth in
this Section 10.1 shall be ineffective to the extent the matters for which such
party agreed to indemnify the other party are covered by insurance required to
be carried by the non-indemnifying party pursuant to this Lease. Further,
Tenant’s agreement to indemnify Landlord and Landlord’s agreement to indemnify
Tenant pursuant to this Section 10.1 are not intended to and shall not relieve
any insurance carrier of its obligations under policies required to be carried
pursuant to the provisions of this Lease, to the extent such policies cover, or
if carried, would have covered the matters, subject to the parties’ respective
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.
10.2 Tenant’s Compliance With Landlord’s Fire and Casualty Insurance. 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 causes any increase in the premium for such insurance policies then
Tenant shall reimburse Landlord for any such increase. 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 on an occurrence form 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, subject to industry-standard exclusions and exceptions) and 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:

GL Per Occurance     $10,000,000 each occurrence

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GL Annual Aggregate     $10,000,000 annual aggregate

Products/Completed Ops    $10,000,000 each occurrence
$10,000,000 annual aggregate

The foregoing limits may be satisfied through a combination of primary and
excess/umbrella insurance.
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 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, including sprinkler
leakage (except if caused by an earthquake), 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.
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) in the case of the coverage required under
Sections 10.3.1 and 10.3.3 above, name Landlord, and any other party Landlord
reasonably specifies, as an additional insured, including Landlord’s managing
agent, if any; (ii) 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-VIII 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) if commercially available, provide that said insurance shall not be
canceled or coverage changed unless thirty (30) days’ prior written notice shall
have been given to Landlord and any mortgagee of Landlord (provided, however,
that as of the date of this Lease, Landlord acknowledges that a majority of
insurers are unwilling to provide the endorsement described in this clause (vi)
and agrees that if Tenant’s insurer is similarly unwilling to provide such
endorsement, Tenant’s obligation pursuant to the provisions of this clause (vi)
shall be to promptly notify Landlord upon receipt by Tenant of any notice from
Tenant’s insurer of any cancellation, failure to renew, reduction of amount of
insurance or change
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in coverage). Tenant shall deliver said policy or policies or, at Tenant’s
option, certificates thereof to Landlord on or before the Lease Commencement
Date and within seven (7) days following the renewal dates thereof. In the event
Tenant shall fail to procure such insurance, or to deliver such policies or
certificate, Landlord may, at its option with notice to Tenant, 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 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 or is actually covered by insurance maintained by a party hereto.
Notwithstanding any other provision of this Lease to the contrary, 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 of 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; provided, however, that (a) in no event shall such new or
increased amounts or types of insurance exceed that required of comparable
tenants by landlords of Comparable Buildings and (b) Landlord shall not have the
right to require that Tenant adjust its insurance coverage more than once in any
twelve (12) month period.
10.7 Landlord’s Insurance. Landlord shall insure the Building 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, as well
as coverage for earthquake damage if reasonably available at commercially
reasonable rates, unless Tenant approves Landlord’s election to not maintain
such coverage. 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, commensurate with the levels and types of insurance maintained by
owners of Comparable Buildings. 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 Building or the ground or underlying
lessors of the Building, or any portion thereof. Notwithstanding the foregoing
provisions of this Section 10.7, the coverage and amounts of insurance carried
by Landlord in connection with the Building shall, at a minimum, be comparable
to the coverage and amounts of insurance which are carried by reasonably prudent
landlords of Comparable Buildings (provided that in no event shall Landlord be
required to carry earthquake insurance).

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ARTICLE 11
DAMAGE AND DESTRUCTION
11.1 Repair of Damage to Premises by Landlord and Tenant. Tenant shall promptly
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. Unless this Lease is terminated pursuant to Section 11.2, if the
Premises or any Common Areas serving or providing access to the Premises or
Building Systems necessary for the use and occupancy of the Premises shall be
damaged by fire or other casualty, Landlord will, as soon as reasonably possible
following the date of the damage, deliver to Tenant an estimate of the time
necessary to repair the damage in question such that the Premises may be used by
and accessible to Tenant and the Building and Common Areas operable as a
first-class office/manufacturing building; such notice will be based upon the
review and opinions of Landlord’s architect and contractor (“Landlord’s
Completion Notice“). 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 use commercially reasonable efforts to cause any Common
Areas to be restored pursuant to the terms of the Declaration. 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 Building or
Project or any other modifications to the Common Areas reasonably deemed
desirable by Landlord, and which are consistent with the character of the
Project, provided that access to the Premises shall not be materially impaired.
Unless this Lease is terminated pursuant to Section 11.2, 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 (or an
alternate condition desired by Tenant and approved by Landlord (such approval
not to be unreasonably withheld, conditioned or delayed and to be governed by
Article 8 above)). Prior to the commencement of construction by Tenant, Tenant
shall submit to Landlord, for Landlord’s review and approval (in accordance with
the approval process set forth in Article 8), all plans, specifications and
working drawings relating thereto, and Tenant shall select the contractors to
perform such improvement work from the list of contractors provided (or
otherwise reasonably approved) by Landlord. 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
a portion thereof or the Building Systems 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 which is reasonably determined by Landlord to be the date Tenant should
have completed repairs to the Premises assuming Tenant used reasonable due
diligence in connection therewith.

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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,
Building 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
Building 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, as set forth in Landlord’s
Completion Notice, the repairs cannot reasonably be completed so as to render
the Premises suitable for occupancy (subject to Tenant’s completion of its
restoration work described in Section 11.1, above) within one (1) year after the
date of discovery of the damage (when such repairs are made without the payment
of overtime or other premiums) (provided, however, that if Landlord elects to
terminate this Lease pursuant to the provisions of this clause (i), Tenant shall
have the right, by written notice delivered to Landlord within thirty (30) days
following Landlord’s delivery of its termination notice, to elect to fund the
cost of overtime or “premium” work as may be reasonably necessary in order for
Landlord’s estimated time to complete Landlord’s repair work, as set forth in
Landlord’s Completion Notice, be one (1) year, or less, following the date of
discovery of the damage, and, in such event, Landlord’s termination notice shall
be deemed rescinded); (ii) the holder of any mortgage on the Building or Project
or ground lessor with respect to the Building 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) at least One
Million Dollars ($1,000,000.00) of the cost to repair the damage is not fully
covered by Landlord’s insurance policies (however, if Landlord elects to
terminate this Lease based upon a shortfall as described in this clause (iii),
Landlord will, in Landlord’s termination notice, include Landlord’s good faith
estimate of the shortfall in question, and Tenant shall have the right, within
thirty (30) days following the date of delivery of such notice, to elect to fund
such shortfall [Tenant acknowledging that Landlord’s estimate will not be deemed
to be a guaranty of the maximum shortfall amount], in which event, Tenant will
be obligated to fund such shortfall, and Landlord’s election to terminate this
Lease shall be deemed rescinded); (iv) the damage occurs during the last
twelve (12) months of the Lease Term and will reasonably require in excess of
sixty (60) days to repair. In addition, if a fire or other casualty shall have
damaged the Premises or a portion thereof or Common Areas necessary to Tenant’s
occupancy and as a result of such damage the Premises are unfit for occupancy
and Tenant does not occupy the Premises, and provided that Landlord does not
elect to terminate this Lease pursuant to Landlord’s termination right as
provided above, and either (a) the repairs cannot, in the reasonable opinion of
Landlord’s contractor, as set forth in Landlord’s Completion Notice, be
completed within one (1) year after the date of discovery of the damage, or
(b) the damage occurs during the last twelve months of the Lease Term and will
reasonably require in excess of ninety (90) days to repair, Tenant may elect, no
earlier than sixty (60) days after the date of the damage and not later than the
later of (A) forty-five (45) days following the date of delivery of Landlord’s
Completion Notice, and (B) ninety (90) days after the date of the 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. In
addition, if restoration is not substantially complete on or before the later of
(i) the date that occurs fifteen (15) months after the date of discovery of the
damage, and (ii) the date that occurs ninety (90) days after the expiration of
the estimated period of time to
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substantially complete such restoration, as set forth in Landlord’s Completion
Notice (the “Outside Restoration Date”), which Outside Restoration Date shall be
extended to the extent of any delays (x) caused by Tenant or (y) caused by Force
Majeure (up to a maximum of sixty (60) days of additional delay due to Force
Majeure), then Tenant shall have the additional right during the first ten (10)
business days following the Outside Restoration Date until such repairs are
complete, to terminate this Lease by delivery of written notice to Landlord (the
“Damage Termination Notice”), which termination shall be effective on a date
specified by Tenant in such Damage Termination Notice (the “Damage Termination
Date”), which Damage Termination Date shall not be less than ten (10) business
days, nor greater than thirty (30) days, following the date such Damage
Termination Notice was delivered to Landlord.
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 Building 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 Building 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
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

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If the whole or any material part of the Premises, Building 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 material
part of the Premises, Building or Project, 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 more than
twenty-five percent (25%) of the rentable square feet of the Premises is taken,
or if access to the Premises is substantially impaired, in each case for a
period anticipated to exceed one (1) year, Tenant shall have the option to
terminate this Lease effective as of the date possession is required to be
surrendered to the authority; provided, however if, in the case of substantial
impairment of access to the Premises, at Landlord’s sole discretion, Landlord
notifies Tenant, which notice must be given within sixty (60) days after the
determination that such impairment of access will exceed one (1) year, that
Landlord will undertake and, thereafter, Landlord does promptly undertake work
to restore, access to the Premises in a manner that will reasonably cure the
impairment to access, then Tenant shall have no right to initially terminate
this Lease based upon such impairment with access, subject to the provisions set
forth below. 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 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 for moving expenses, so long as such
claims do not diminish the award available to Landlord, its ground lessor with
respect to the Building or Project or its mortgagee, and such claim is payable
separately to Tenant. All Rent shall be apportioned as of the date of such
termination. In addition and subject to the terms of this Error! Reference
source not found., in the case of a taking in which an excess of twenty-five
percent (25%) of the rentable square feet of the Premises is taken or access to
the Premises is substantially impaired, if the taking was initially anticipated
to be for a period of less than one (1) year, but extends beyond one (1) year,
then Tenant shall have the additional right during the first thirty (30) days
following the expiration of such one (1) year time period to terminate this
Lease by delivery of written notice to Landlord. Notwithstanding the foregoing
sentence, if, in the case of substantial impairment of access to the Premises as
a result of such temporary taking, Landlord completes the work necessary to
restore access to the Premises within one (1) year, then Tenant shall have no
right to terminate this Lease based upon such impairment of access. 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 one (1)
year 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 and otherwise in accordance with
Section 19.5.2. Landlord shall be entitled to receive the entire award made in
connection with any such temporary taking.
ARTICLE 14

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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
individually as a “Transfer,” and, 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 twenty (20) 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, provided that Landlord shall have the right to require Tenant
to utilize Landlord’s commercially reasonable standard Transfer documents in
connection with the documentation of such Transfer, (iv) current financial
statements of the proposed Transferee certified by an officer, partner or owner
thereof, business credit and personal references and history of the proposed
Transferee and any other information reasonably required by Landlord (which
information is requested within ten (10) business days following Tenant’s
submission to Landlord of the items described in clauses (i), (ii), (iii) (iv)
and (v) of this Section 14.1) which will enable Landlord to determine the
financial responsibility, character, and reputation of the proposed Transferee,
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; provided, however, if such estoppel certificate contains statements
to the effect that Tenant claims any default, breach, or failure to perform on
the part of Landlord under this Lease, such fact shall not serve to negate the
effectiveness of the Transfer Notice. Any Transfer made without Landlord’s prior
written consent 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 reasonable review and processing fees, as well as any reasonable
professional fees (including, without limitation, attorneys’, accountants’,
architects’, engineers’ and consultants’ fees) incurred by Landlord, within
thirty (30) days after written request by Landlord, provided that in no event
shall such costs and expenses exceed $2,500.00 for a Transfer in the ordinary
course of business.
14.2 Landlord’s Consent. Landlord shall not unreasonably withhold or delay its
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice and shall grant or withhold such consent
within fifteen (15) business days following the date upon which Landlord
receives a “complete” Transfer Notice from Tenant (i.e.,
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a Transfer Notice that includes all documents and information required pursuant
to Section 14.1 of this Lease, above). If Landlord fails to timely deliver to
Tenant notice of Landlord’s consent, or the withholding of consent, to a
proposed Transfer, Tenant may send a second (2nd) notice to Landlord, which
notice must contain the following inscription, in bold faced lettering: “SECOND
NOTICE DELIVERED PURSUANT TO ARTICLE 14 OF LEASE - - FAILURE TO TIMELY RESPOND
WITHIN TEN (10) BUSINESS DAYS SHALL RESULT IN DEEMED APPROVAL OF ASSIGNMENT OR
SUBLEASE.” If Landlord fails to deliver notice of Landlord’s consent to, or the
withholding of Landlord’s consent, to the proposed assignment or sublease within
such ten (10) business day period, Landlord shall be deemed to have approved the
assignment or sublease in question. If Landlord at any time timely delivers
notice to Tenant or Landlord’s withholding of consent to a proposed assignment
or sublease, Landlord shall specify in reasonable detail in such notice, the
basis for such withholding of consent. 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 Building or the Project;
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
(i) which is that of a foreign country, (ii) which is of a character or
reputation, is engaged in a business, or is of, or is associated with, a
political orientation or faction, which is inconsistent with the quality of the
Project, or which would otherwise reasonably offend a landlord of a comparable
building located in the vicinity of the Project, (iii) which is part of the
federal government, or (iv) which would significantly increase the human traffic
in, or the security threat to, the Premises, the Building, and/or the Project;
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 or has negotiated with
Landlord during the three (3) month period immediately preceding the date
Landlord receives the Transfer Notice, to lease space in the Project and, in
each case, Landlord then has reasonably sufficient space in the Project to meet
such Transferee’s occupancy needs.

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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 (or
deemed 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 materially 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 suit for contract damages (other than damages for injury to, or
interference with, Tenant’s business including, without limitation, loss of
profits, however occurring) or declaratory judgment and an injunction for the
relief sought, 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.
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. “Transfer
Premium” shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer and related to the value of
Tenant’s leasehold interest 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 for (i) any changes, alterations and
improvements (including demising costs) to the Premises (or allowances in lieu
thereof), in connection with the Transfer (or any improvement allowance provided
to the Transferee by Tenant), (ii) any free base rent reasonably provided to the
Transferee in connection with the Transfer (provided that such free rent shall
be deducted only to the extent the same is included in the calculation of total
consideration payable by such Transferee), and (iii) any brokerage commissions
in connection with the Transfer, (iv) legal fees reasonably incurred in
connection with the Transfer and (v) the market value of any furniture, fixtures
or equipment provided to the Transferee at no cost as part of the Transfer
(collectively, “Tenant’s Subleasing Costs”). “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. The
determination of the amount of Landlord’s applicable share of the Transfer
Premium shall be made on a monthly basis as rent or other consideration is
received by Tenant under the Transfer. For purposes of calculating the Transfer
Premium on a
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monthly basis, Tenant’s Subleasing Costs shall be deemed to be expended by
Tenant in equal monthly amounts over the entire term of the Transfer.
14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, in the event Tenant contemplates an
assignment of this Lease, or a sublease of all or a portion of the Premises
which causes the total amount of sublet space to exceed fifty percent (50%) of
the Premises and which is for more than 50% of the then remaining Lease Term
(and in each case other than in connection with a Permitted Transfer), then
Tenant shall give Landlord notice (the “Intention to Transfer Notice”) of such
contemplated Transfer (whether or not the contemplated Transferee or the terms
of such contemplated Transfer have been determined). The Intention to Transfer
Notice shall specify the portion of and amount of rentable square feet of the
Premises which Tenant intends to Transfer (the “Contemplated Transfer Space”),
the contemplated date of commencement of the Contemplated Transfer (the
“Contemplated Effective Date”), and the contemplated length of the term of such
contemplated Transfer, and shall specify that such Intention to Transfer Notice
is delivered to Landlord pursuant to this Section 14.4 in order to allow
Landlord to elect to recapture the Contemplated Transfer Space for the remainder
of the Lease Term. Tenant may elect to deliver an Intention to Transfer Notice
which, in addition to containing the information required pursuant to this
Section 14.4, contains the information required for a Transfer Notice pursuant
to Section 14.1, above, in which event such notice shall be both a Transfer
Notice and an Intention to Transfer Notice. Thereafter, Landlord shall have the
option, by giving written notice to Tenant (the “Recapture Notice”) within
thirty (30) days after receipt of any Intention to Transfer Notice, to recapture
the Contemplated Transfer Space. Such recapture shall cancel and terminate this
Lease with respect to such Contemplated Transfer Space as of the Contemplated
Effective Date. 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
confirmation of the same. If Landlord declines, or fails to elect in a timely
manner, to recapture such Contemplated Transfer Space under this Section 14.4,
then, subject to the other terms of this Article 14, for a period of six (6)
months (the “Six Month Period”) commencing on the last day of such thirty (30)
day period, Landlord shall not have any right to recapture the Contemplated
Transfer Space with respect to any Transfer made during the Six Month Period,
provided that any such Transfer is substantially on the terms set forth in the
Intention to Transfer Notice, and provided further that any such Transfer shall
be subject to the remaining terms of this Article 14. If such a Transfer is not
so consummated within the Six Month Period (or if a Transfer is so consummated,
then upon the expiration of the term of any Transfer of such Contemplated
Transfer Space consummated within such Six Month Period), Tenant shall again be
required to submit a new Intention to Transfer Notice to Landlord with respect
any contemplated Transfer, as provided above in this Section 14.4.
14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and
conditions 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,
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(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. In the event that Tenant
subleases all or any portion of the Premises in accordance with the terms of
this Article 14, Tenant shall cause such subtenant to carry and maintain the
same insurance coverage terms and limits as are required of Tenant, in
accordance with the terms of Article 10 of this Lease. 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 two percent (2%),
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 or limited liability company, the
withdrawal or change, voluntary, involuntary or by operation of law, of fifty
percent (50%) or more of the partners or members, or transfer of fifty percent
(50%) or more of partnership or membership interests, within a twelve (12)-month
period, or the dissolution of the partnership or membership 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, merger, consolidation or other reorganization of
Tenant 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 which results in
a transfer of Control (defined in Section 14.8 below) of Tenant to an individual
or entity, 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, 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 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
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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, an assignment or subletting of all or a portion of the Premises to
(i) a transferee of all or substantially all of the assets of Tenant, (ii) a
transferee which is the resulting entity of a merger or consolidation of Tenant
with another entity (inclusive of a so-called “reverse triangular” merger), or
(iii) an affiliate of Tenant (i.e., an entity which is controlled by, controls,
or is under common control with, Tenant (“Affiliate”)), shall not be deemed a
Transfer under this Article 14, (any such assignee or sublessee described in
items (i) through (iii) of this Section 14.8 hereinafter referred to as a
“Permitted 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 assignment or
sublease or such affiliate, (B) Tenant is not in Default, (C) such Permitted
Transferee shall be of a character and reputation consistent with the quality of
the Building, (D) in the case of a Permitted Transfer described in clauses (i)
or (ii) above or an assignment to an Affiliate of Tenant pursuant to clause
(iii) above, such Permitted 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 the Net
Worth of Tenant as of the date hereof and the Net Worth of Tenant on the day
immediately preceding the effective date of such assignment or sublease
(provided, however, that in the case of an assignment to an Affiliate of Tenant
pursuant to clause (iii) above, the Net Worth of Tenant and the Net Worth of the
Affiliate assignee may, for the purposes of satisfying the Net Worth test above,
be combined if and for so long as Tenant remains in existence following the
assignment in question), and (E) no assignment relating to this Lease, whether
with or without Landlord’s consent, shall relieve Tenant from any liability
under this Lease, and, in the event of an assignment of Tenant’s entire interest
in this Lease, the liability of Tenant and such transferee shall be joint and
several. An assignee of Tenant’s entire interest in this Lease who qualifies as
a Permitted Transferee may also be referred to herein as a “Permitted 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
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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 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, business and trade fixtures,
free-standing cabinet work, movable partitions and other articles of personal
property owned by Tenant otherwise located 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 Building resulting from such removal.
Upon the expiration of the Lease Term, or upon any earlier termination of this
Lease, Tenant shall remove (i) any Specialty Alterations that Landlord notified
Tenant must be removed at the time Landlord approved such Specialty Alterations
pursuant to Section 8.1, (ii) any Specialty Alterations that did not require
Landlord’s approval pursuant to Section 8.1, and Tenant shall repair any damage
to the Premises and Building caused by such removal and returns the affected
portion of the Premises to their condition existing prior to the installation of
such Specialty Alterations.
ARTICLE 16
HOLDING OVER
If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, such tenancy shall be a tenancy at sufferance, and shall
not constitute a renewal hereof or an extension for any further term, and in
such case Base Rent shall be payable at a daily rate equal to the product of
(i) the daily Base Rent applicable during the last rental period of the Lease
Term under this Lease, and (ii) a percentage equal to 150%, plus 100% of
applicable Additional Rent. Such 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. If Tenant holds over without
Landlord’s express written consent, and tenders payment of rent for any period
beyond the expiration of the Lease Term by way of check (whether directly to
Landlord, its agents, or to a lock box) or wire transfer, Tenant acknowledges
and agrees that the cashing of such check or acceptance of such wire shall be
considered inadvertent and not be construed as creating a month-to-month
tenancy, provided Landlord refunds such payment to Tenant promptly upon learning
that such check has been cashed or wire transfer received. The provisions of
this Article 16 shall not be deemed to limit or constitute a
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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. Tenant agrees that any
proceedings necessary to recover possession of the Premises, whether before or
after expiration of the Lease Term, shall be considered an action to enforce the
terms of this Lease for purposes of the awarding of any attorney’s fees in
connection therewith.
ARTICLE 17
ESTOPPEL CERTIFICATES
Within ten (10) business days following a request in writing by Landlord, Tenant
shall execute, acknowledge (if acknowledgment is expressly requested) 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
form as may be reasonably 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; provided, however, that if such estoppel certificate is not factually
correct, then Tenant may make such changes as are necessary to make such
estoppel certificate factually correct and shall thereafter return such signed
estoppel certificate to Landlord within said ten (10) business day period. 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; provided,
however, that if such instrument is not factually correct, then Tenant may make
such changes as are necessary to make such instrument factually correct and
shall thereafter return such signed instrument to Landlord within ten (10)
business days. At any time during the Lease Term, but only in connection with
(x) a sale, financing or refinancing of the Project or any portion hereof or
interest therein, (y) a Default by Tenant or (z) a proposed Transfer, Permitted
Transfer or Alteration by Tenant, and provided that Landlord executes a
commercially reasonable confidentiality agreement, 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. 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. Notwithstanding the foregoing, in the event that (A) 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 (B) Tenant has its own, separate and distinct 10K and 10Q filing
requirements (as opposed joint or cumulative filings with an entity
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that Controls Tenant or with entities which are otherwise Affiliates of Tenant),
then Tenant’s obligation to provide Landlord with a copy of its most recent
current financial statement as set forth above shall be deemed satisfied.
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, with respect mortgages, deeds of trust, or encumbrances entered into
after the date hereof, that in consideration of and as a condition precedent to
Tenant’s agreement to subordinate this Lease to any mortgage, trust deed or
other encumbrances, such Superior Holders shall not disturb Tenant’s right to
possession of the Premises so long as no Default has occurred and is continuing.
Landlord shall use commercially reasonable efforts to obtain from each Superior
Holder a subordination non-disturbance and attornment agreement in the standard
form provided by such Superior Holders (subject to commercially reasonable
modifications), which requires such Superior Holder to accept this lease, and
not to disturb tenant’s possession, so long as a Default has not occurred and be
continuing executed by Landlord and the appropriate Superior Holder. 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
Superior Holder 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
Superior Holder, and to recognize such Superior Holder as the lessor under this
Lease, provided such Superior Holder shall agree to accept this Lease and not
disturb Tenant’s occupancy, so long as a Default has not occurred and is
continuing. Landlord’s interest herein may be assigned as security at any time
to any lienholder. Tenant shall, within ten (10) business days of request by
Landlord, execute such further commercially reasonable instruments or assurances
as Landlord may reasonably deem necessary to evidence or confirm the
subordination or superiority of this Lease to any such mortgages, trust deeds,
ground leases or underlying leases. 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 (each, a “Default”):

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19.1.1 Any failure by Tenant to pay any Base Rent or Additional Rent when due
and any failure to pay any other Rent or any other charge required to be paid
under this Lease, or any part thereof, when due unless such failure is cured
within five (5) business days after notice; 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 thirty (30) 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 thirty (30) 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; or
19.1.3 Abandonment (pursuant to Section 1951.3 of the California Civil Code) of
the Premises by Tenant; or
19.1.4 The failure by Tenant to observe or perform according to the provisions
of Articles 5, 14, 17 or 18 of this Lease, or any breach by Tenant of the
representations and warranties set forth in Section 29.32 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 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:
(i) The worth at the time of award of the unpaid rent which has been earned at
the time of such termination; plus
(ii) The worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus

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(iii) 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
(iv) Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its obligations under this
Lease or which in the ordinary course of things 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 (“Costs of Reletting“);
notwithstanding the above, if Landlord relets the Premises for a term (the
“Relet Term”) that extends past the originally scheduled Lease Expiration Date,
the Costs of Reletting which may be included in Landlord’s damages shall be
limited to a prorated portion of the Costs of Reletting, based on the percentage
that the length of the originally scheduled Lease Term remaining on the date
Landlord terminates this Lease or Tenant’s right to possession bears to the
length of the Relet Term. For example, if there are two (2) years left on the
Lease Term at the time that Landlord terminates possession and, prior to the
expiration of the two (2) year period, Landlord enters into a lease with a new
tenant with a Relet Term of ten (10) years, then only twenty percent (20%) of
the Costs of Reletting shall be included when determining Landlord’s damages;
and
(v) 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(i) and
(ii), above, the “worth at the time of award” shall be computed by allowing
interest at the rate set forth in Article 25 of this Lease, but in no case
greater than the maximum amount of such interest permitted by law. As used in
Section 19.2.1(iii) 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
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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 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.
19.5 Landlord Default.
19.5.1 General. Notwithstanding anything to the contrary set forth in this
Lease, Landlord shall not be in default in the performance of any obligation
required to be performed by Landlord pursuant to this Lease unless 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 pursue the same to completion.
Upon any such default by Landlord under this Lease, Tenant may, except as
otherwise specifically provided in this Lease to the contrary, exercise any of
its rights provided at law or in equity.
19.5.2 Abatement of Rent. In the event that Tenant is prevented from using, and
does not use (except for the maintenance of a skeleton crew within the Premises
for such purposes as securing Tenant’s records and files, forwarding telephone
communications, correspondence and deliveries, and otherwise enabling those
aspects of Tenant’s business operations previously conducted within the Premises
to be carried on from an alternative location), the Premises or any portion
thereof, as a result of (i) any repair, maintenance or alteration performed by
Landlord, or which Landlord failed to perform, after the Lease Commencement Date
and required by the Lease, which materially and adversely interferes with
Tenant’s use of the Premises, (ii) any failure to provide services, utilities or
access to the Premises as required by this Lease attributable to the negligent
act or omission of Landlord or its agents, employees, or representatives, or
(iii) any “Renovations,” as that term is defined in Section 29.29 of this Lease
(such set of
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circumstances as set forth in items (i), (ii) or (iii), above, to be known as an
“Abatement Event”), then Tenant shall give Landlord notice of such Abatement
Event, and if such Abatement Event continues for five (5) consecutive business
days after Landlord’s receipt of any such notice (the “Eligibility Period”),
then the Base Rent and Tenant’s Share of Direct Expenses shall be abated or
reduced, as the case may be, after expiration of the Eligibility Period for such
time that Tenant continues to be so prevented from using, and does not use, the
Premises or a portion thereof, in the proportion that the rentable area of the
portion of the Premises that Tenant is prevented from using, and does not use,
bears to the total rentable area of the Premises; provided, however, in the
event that Tenant is prevented from using, and does not use, a portion of the
Premises for a period of time in excess of the Eligibility Period and the
remaining portion of the Premises is not sufficient to allow Tenant to
effectively conduct its business therein, and if Tenant does not conduct its
business from such remaining portion, then for such time after expiration of the
Eligibility Period during which Tenant is so prevented from effectively
conducting its business therein, the Base Rent and Tenant’s Share of Direct
Expenses for the entire Premises shall be abated for such time as Tenant
continues to be so prevented from using, and does not use, the Premises. If,
however, Tenant reoccupies any portion of the Premises during such period
(except for the maintenance of a skeleton crew as provided above), the Rent
allocable to such reoccupied portion, based on the proportion that the rentable
area of such reoccupied portion of the Premises bears to the total rentable area
of the Premises, shall be payable by Tenant from the date Tenant reoccupies such
portion of the Premises. To the extent an Abatement Event is caused by an event
covered by Articles 11 or 13 of this Lease, then Tenant’s right to abate rent
shall be governed by the terms of such Article 11 or 13, as applicable, and the
Eligibility Period shall not be applicable thereto. Such right to abate Base
Rent and Tenant’s Share of Direct Expenses shall be Tenant’s sole and exclusive
monetary remedy for rent abatement at law or in equity for an Abatement Event.
Except as provided in this Section 19.5.2, or in Articles 11 or 13, nothing
contained herein shall be interpreted to mean that Tenant is excused from paying
Rent due hereunder.
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 terms, covenants, conditions, 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 terms, covenants, conditions, 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
Tenant shall, upon execution of this Lease, pay to Landlord Tenant’s security
deposit in the amount specified in Section 8 of the Summary. The security
deposit shall be held by Landlord for the faithful performance of all terms,
covenants and conditions of this Lease and shall be returned
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to Tenant within thirty (30) days after the later of the date of termination or
expiration of this Lease or the date Tenant delivers possession to Landlord,
unless a longer time is reasonably required to ascertain damages payable from
the security deposit, and except as provided otherwise herein. Tenant agrees
that Landlord may, without waiving any of Landlord’s other rights and remedies
under this Lease upon the occurrence of any Default, apply the security deposit
in whole or in part to remedy any failure by Tenant to repair or maintain the
Premises or to perform any other terms, covenants or conditions contained
herein. Tenant waives the provisions of Section 1950.7 of the California Civil
Code to the extent that such Section provides that the security deposit can be
applied only to remedy certain Tenant defaults or is otherwise inconsistent with
this Article 21, it being the parties’ intention that this Article 21 shall be
controlling. Without limiting the generality of the foregoing, in the event that
this Lease is terminated and such termination does not coincide with the
expiration of an Expense Year, Landlord may retain the security deposit for a
reasonable period of time after the expiration of the Expense Year, in order to
allow Landlord the opportunity to determine the actual amount of Tenant’s Share
of Direct Expenses and to deduct any amount due from Tenant relating thereto, as
applicable. Should Landlord use any portion of the security deposit to cure any
default by Tenant hereunder, Tenant shall forthwith replenish the security
deposit to the original amount. Landlord shall not be required to keep the
security deposit separate from its general funds, and Tenant shall not be
entitled to interest on any such deposit.
ARTICLE 22LETTER OF CREDIT
22.1 Letter of Credit. At Tenant’s election, in lieu of the Deposit provided in
Section 21, Tenant shall, upon the mutual execution and delivery of this Lease,
deliver to Landlord an irrevocable, unconditional and transferable standby
Letter of Credit (“Letter of Credit”), in the form approved by Landlord and
meeting the requirements of this Section 22, in the amount stated in the Basic
Lease Information. The following provisions shall apply to the Letter of Credit:
22.1.1 The Letter of Credit shall be governed by ISP98, as revised from time to
time, issued by a commercial bank (“Issuer”) reasonably satisfactory to Landlord
with offices for banking purposes in the San Francisco Bay Area (or,
alternatively, which accepts draw requests via overnight courier or facsimile),
and drawable by sight draft presented by Landlord from time to time. The Letter
of Credit shall name Landlord as beneficiary, permit multiple drawings, be fully
transferable by Landlord, and otherwise be in form and substance reasonably
satisfactory to Landlord. The Letter of Credit shall also provide that it shall
be deemed automatically renewed, without amendment, for consecutive periods of
one (1) year each during the Term plus one hundred twenty (120) days after the
Lease Expiration Date (the “LC Expiration Date”), unless the Issuer delivers
written notice (“Issuer Notice”) to Landlord (with a simultaneous copy to
Tenant) by any method specified for giving of notices under this Lease, as
amended, not less than forty-five (45) days preceding the then-expiration date
of a Letter of Credit that it elects not to have that Letter of Credit renewed.
If Landlord receives an Issuer Notice and, not later than fifteen (15) business
days preceding the expiration date of the expiring Letter of Credit, Tenant
fails to furnish Landlord with a replacement of the expiring Letter of Credit
pursuant to and meeting the conditions of this Section 22, then Landlord shall
have the right to draw the full amount of that Letter of Credit by delivering to
the Issuer a statement that Tenant has failed
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timely to deliver to Landlord a replacement Letter of Credit pursuant to and
meeting the conditions of this Section, in which event the Issuer shall disburse
the full amount of the expiring Letter of Credit to Landlord. Notwithstanding
anything herein to the contrary, any failure by Tenant to timely provide, renew,
supplement or replace the expiring Letter of Credit or provide a cash equivalent
when and as provided hereunder shall be a non-curable default under this Lease.
22.1.2 The Letter of Credit shall be held by Landlord for the faithful
performance of all terms, covenants and conditions of this Lease. The Letter of
Credit shall be returned to Tenant within sixty (60) days after the later of the
date of termination or expiration of the Lease or the date Tenant delivers
possession of the Premises to Landlord in the condition required under this
Lease, unless a longer time is reasonably required to ascertain damages payable
from the Letter of Credit. Tenant agrees that Landlord may, without waiving any
of Landlord’s other rights and remedies under this Lease, draw upon the Letter
of Credit and apply the proceeds of the Letter of Credit in whole or in part to
remedy, or compensate Landlord for any damages arising from any failure by
Tenant to perform the terms, covenants or conditions contained herein. If
Landlord draws on the Letter of Credit, Tenant shall within five (5) business
days restore the amount of the Letter of Credit to the full amount of the Letter
of Credit as required to be maintained under this Section 22 pursuant to a
replacement thereof or an amendment thereto in form and substance reasonably
satisfactory to Landlord, failing which Landlord may, without waiving its other
remedies hereunder, draw down any sums then remaining unpaid under the Letter of
Credit, which sum, to the extent not applied in accordance with the provisions
of this Section 22.1.2, will be retained by Landlord in accordance with the
provisions of Section 22.1.6 below.
22.1.3 If Landlord’s interest in the Premises is sold or otherwise assigned or
transferred, then Tenant shall, upon ten (10) business days prior notice from
Landlord, at Tenant’s sole cost and expense, cause Issuer to amend the Letter of
Credit, in form and substance reasonably satisfactory to Landlord, to transfer
them to the new Landlord designated by Landlord in its notice, effective on the
date designated by Landlord in its notice.
22.1.4 Any draw under the Letter of Credit shall be subscribed by a
representative of Landlord. The Issuer shall have no obligation to verify any
matter or statement made in connection with any draw under the Letter of Credit
and no good faith error in connection with any such matter or statement shall
affect the validity of any draw by Landlord. No draw under the Letter of Credit
or failure or delay of Landlord to draw any portion of the Letter of Credit
shall constitute a waiver of Landlord’s right to do so at any time thereafter, a
waiver of Landlord’s other rights and remedies under this Lease, or a waiver of
any default with respect to this Lease. Tenant agrees that Tenant shall have no
right to apply any portion of the cash security or proceeds of the Letter of
Credit against any of Tenant’s obligations to pay rent or perform obligations
under the Lease.
22.1.5 Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or any proceeds
thereof be (i) deemed to be or treated as a “security deposit” within the
meaning of California Civil Code Section 1950.7, (ii) subject to the terms of
such Section 1950.7, or (iii) intended to serve as a
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“security deposit” within the meaning of such Section 1950.7. The parties hereto
(A) recite that the Letter of Credit are not intended to serve as a security
deposit and such Section 1950.7 and any and all other Laws applicable to
security deposits in the commercial context (“Security Deposit Laws”) shall have
no applicability or relevancy thereto and (B) waive any and all rights, duties
and obligations either party may now or, in the future, will have relating to or
arising from the Security Deposit Laws.
22.1.6 In the event Landlord draws down on the Letter of Credit, the proceeds of
the Letter of Credit may be held by Landlord and applied by Landlord against any
Base Rent or Additional Rent payable by Tenant under this Lease that is not paid
when due and/or to pay for all losses and damages that Landlord has suffered or
that Landlord reasonably estimates that it will suffer as a result of any breach
or default by Tenant under this Lease. Any unused proceeds of the Letter of
Credit shall constitute the property of Landlord and need not be segregated from
Landlord’s other assets. Tenant hereby (i) agrees that (A) Tenant has no
property interest whatsoever in the proceeds from any such draws, and (B) such
proceeds shall not be deemed to be or treated as a “security deposit” under the
Security Deposit Laws, and (ii) waives all rights, duties and obligations either
party may now or, in the future, will have relating to or arising from the
Security Deposit Laws. Landlord agrees that the amount of any proceeds of the
Letter of Credit received by Landlord, and not (a) applied against any Base Rent
or Additional Rent as provided for in this Section 22.1.6 or (b) used to pay for
any losses and/or damages suffered by Landlord (or reasonably estimated by
Landlord that it will suffer) as provided for in this Section 22.1.6 (the
“Unused Letter of Credit Proceeds”), shall be paid by Landlord to Tenant (x)
upon receipt by Landlord of a replacement of the Letter of Credit in the full
amount of the Letter of Credit, which replacement Letter of Credit shall comply
in all respects with the requirements of this Section 22, or (y) within sixty
(60) days after the later of the date of termination or expiration of the Lease
or the date Tenant delivers possession of the Premises to Landlord in the
condition required under this Lease, unless a longer time is reasonably required
to ascertain damages payable from the Unused Letter of Credit Proceeds, and
except as provided otherwise herein; provided, however, that if prior to the LC
Expiration Date a voluntary petition is filed by Tenant, or an involuntary
petition is filed against Tenant by any of Tenant’s creditors, under the
U. S. Bankruptcy Code or any state bankruptcy code, then Landlord shall not be
obligated to make such payment in the amount of the Unused Letter of Credit
Proceeds until either all preference issues relating to payments under this
Lease have been resolved in such bankruptcy or reorganization case or such
bankruptcy or reorganization case has been dismissed.
22.1.7  Upon final determination of the initial monthly Base Rent, if the amount
of the Letter of Credit then held by Landlord is not equal to the initial
monthly Base Rent, then Tenant shall promptly obtain a revised Letter of Credit
in an amount equal to the initial monthly Base Rent.
22.1.8 If Tenant delivers a replacement or amended Letter of Credit to Landlord
when and as required under this Section 22 in the form required herein, Landlord
shall exchange the Letter of Credit then held by Landlord for the replacement or
amended Letter of Credit delivered by Tenant.

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ARTICLE 23
SIGNS
23.1 Interior Signage. Tenant may install identification and other 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,
unless required by Applicable Law. Except as set forth in Section 23.2, below,
Tenant may not install any signs on the exterior or roof of the Building 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.
23.2 Exterior Signage. In addition to the signage rights expressly set forth
above in this Article 23, but subject to the terms of this Section 23.2, Tenant,
at Tenant’s sole cost and expense, shall be entitled to install (i) exterior
signage on the Building, (ii) one (1) panel on the Project monument sign in the
location more particularly identified on Exhibit F attached hereto, and
(iii) certain directional signage in the Common Areas of the Project, each
identifying Tenant’s name and/or logo (the “Tenant’s Signage”) in connection
with Tenant’s lease of the Premises.
23.2.1 Specifications and Permits. Tenant’s Signage shall set forth Tenant’s
name and/or logo as determined by Tenant in its sole discretion, but subject to
Landlord’s reasonable approval, and in no event shall the Tenant’s Signage
include an “Objectionable Name,” as that term is defined in Section 23.2.2,
below. The graphics, materials, color, design, lettering, lighting, size,
illumination, specifications and exact locations of Tenant’s Signage 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’s Building
standard signage specifications. In addition, the Tenant’s Signage shall be
subject to Tenant’s receipt of all necessary governmental or quasi-governmental
approvals and permits (collectively, “Governmental Approvals“) and shall be
subject to all Applicable Laws and the Underlying Documents, specifically
including the Declaration and any master signage program created or adopted for
the Project. Tenant hereby acknowledges that Landlord has made no representation
or warranty to Tenant with respect to the probability of obtaining all necessary
Governmental Approvals for the Tenant’s Signage. In the event Tenant does not
receive the necessary Governmental Approvals for the Tenant’s Signage, Tenant’s
and Landlord’s rights and obligations under this Lease shall be unaffected.
23.2.2 Objectionable Name. To the extent Tenant desires to change the name
and/or logo set forth on the 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 Comparable Buildings (an “Objectionable Name”). The parties hereby
agree that the name “Penumbra, Inc.” or any reasonable derivation thereof, shall
not be deemed an Objectionable Name.

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23.2.3 Termination of Right to Tenant’s Signage. The rights contained in this
Section 23.2 shall be personal to the Original Tenant or a Permitted Transferee
Assignee, and may only be exercised and maintained by the Original Tenant or
such Permitted Transferee Assignee (and not any other assignee, sublessee or
other transferee of either of the Original Tenant’s interest in the Lease) if
the Original Tenant or such Permitted Transferee Assignee has not subleased more
than fifty percent (50%) of the Premises and any other space leased by Tenant
from Landlord in the Project, and a Default by Tenant under this Lease is not
then occurring. In the event Tenant fails to comply with any of the requirements
set forth hereinabove, the signage rights provided in this Section 23.2 shall
automatically terminate.
23.2.4 Cost and Maintenance; Change and Replacement. The actual costs of the
Tenant’s Signage and the installation, design, construction and any and all
other costs associated with the Tenant’s Signage, including, without limitation,
utility charges and hook-up fees, permits, and maintenance and repairs, shall be
the sole responsibility of Tenant. Should the 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. Subject to Tenant’s agreement
to comply with the terms of this Section 23.2.4, Tenant shall be permitted to
change and/or replace the Tenant’s Signage periodically in Tenant’s reasonable
discretion. Upon the expiration or earlier termination of this Lease or upon any
earlier termination of Tenant’s rights to the Tenant’s Signage as set forth
herein, Tenant shall, at Tenant’s sole cost and expense, cause the 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 except for (x) reasonable wear and tear,
(y) damage by casualty that is not Tenant’s obligation to repair hereunder, or
(z) repairs which are specifically made the responsibility of Landlord
hereunder. If Tenant fails to timely remove the Tenant’s Signage or to restore
the areas in which such the 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 23.2.4 shall survive the
expiration or earlier termination of the Lease.
ARTICLE 24
COMPLIANCE WITH LAW

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24.1 By Tenant. 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, including any such
governmental regulations related to disabled access (collectively, “Applicable
Laws“). At its sole cost and expense, Tenant shall promptly comply with any
Applicable Laws which relate to (i) Tenant’s use of the Premises, (ii) any
Alterations made by Tenant to the Premises, (iii) the Tenant Maintenance
Responsibilities, or (iv) the Landlord Maintenance Responsibilities, but as to
the Landlord Maintenance Responsibilities, only to the extent such obligations
are triggered by Alterations made by Tenant to the Premises, or triggered by the
Tenant Improvements (subject to Section 1 of the Tenant Work Letter in
connection with the initial construction of the Tenant Improvements), or
triggered by Tenant’s use of the Premises. Notwithstanding the foregoing, if,
within one (1) year following the Commencement Date, any work is required to
comply with Applicable Laws due to Landlord’s delivery of possession of the
Premises to Tenant in a condition that is not in compliance with Applicable Laws
as of the date of delivery of the Premises, then Landlord, as opposed to Tenant,
shall be responsible for the cost of any such work, except to the extent that
such non-compliance is the result of (a) elements incorporated into the
Construction Documents from Changes or (b) Tenant's specific use of the
Premises, which condition would not constitute a violation of Applicable Laws in
the absence of such use by Tenant. 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, at its sole cost and expense, to comply promptly
with such standards or regulations and to cooperate with Landlord, including,
without limitation, by taking such actions as Landlord may reasonably require,
in Landlord’s efforts to comply with such standards or regulations. Tenant shall
be responsible, at its sole cost and expense, to make all alterations to the
Premises as are required to comply with the governmental rules, regulations,
requirements or standards described in this Article 24 with which Tenant is
responsible for compliance. 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.
24.2 By Landlord. Landlord shall comply with all Applicable Laws relating to the
Landlord Maintenance Responsibilities, provided that compliance with such
Applicable Laws is not the responsibility of Tenant under this Lease, 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 materially adversely affect the safety of Tenant’s employees,
Tenant’s ability to use or have access to the Premises, or create a significant
health hazard for Tenant’s employees, or would otherwise materially and
adversely affect Tenant’s use of or access to the Premises. Additionally,
Landlord shall be responsible for the cost of the performance of any work
occurring within one (1) year following the Commencement Date made necessary to
correct violations of Applicable Laws in the Premises or the Building if the
same arise out of the failure of the Premises and the Building to be in
compliance with Applicable Laws as in effect upon the date of delivery of the
Premises by Landlord to Tenant, except to the extent that such non-compliance is
the result of (a) elements incorporated into the Construction Documents from
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Changes or (b) Tenant's specific use of the Premises, which condition would not
constitute a violation of Applicable Laws in the absence of such use by Tenant.
Landlord shall be permitted to include in Operating Expenses any costs or
expenses incurred by Landlord under this Article 24 to the extent not prohibited
by the terms of Article 4 of this Lease, above.
24.3 Certified Access Specialist. For purposes of Section 1938 of the California
Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges,
that the Premises have not undergone inspection by a Certified Access
Specialists (CASp). As required by Section 1938(e) of the California Civil Code,
Landlord hereby states as follows: “A Certified Access Specialist (CASp) can
inspect the subject premises and determine whether the subject premises comply
with all of the applicable construction-related accessibility standards under
state law. Although state law does not require a CASp inspection of the subject
premises, the commercial property owner or lessor may not prohibit the lessee or
tenant from obtaining a CASp inspection of the subject premises for the
occupancy or potential occupancy of the lessee or tenant, if requested by the
lessee or tenant. The parties shall mutually agree on the arrangements for the
time and manner of the CASp inspection, the payment of the fee for the CASp
inspection, and the cost of making any repairs necessary to correct violations
of construction-related accessibility standards within the premises.” In
furtherance of the foregoing, Landlord and Tenant hereby agree as follows:
(a) any CASp inspection requested by Tenant shall be conducted, at Tenant’s sole
cost and expense, by a CASp designated by Landlord, subject to Landlord’s
reasonable rules and requirements; (b) Tenant, at is sole cost and expense,
shall be responsible for making any improvements or repairs within the Premises
to correct violations of construction-related accessibility standards; and
(c) if anything done by or for Tenant in its use or occupancy of the Premises
shall require any improvements or repairs to the Building or Project (outside
the Premises) to correct violations of construction-related accessibility
standards, then Tenant shall reimburse Landlord upon demand, as Additional Rent,
for the cost to Landlord of performing such improvements or repairs.
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 within five (5) business days after
Tenant’s receipt of written notice from Landlord that said amount is past due,
then Tenant shall pay to Landlord a late charge equal to five percent (5%) of
the overdue amount plus any reasonable attorneys’ fees incurred by Landlord by
reason of Tenant’s failure to pay Rent and/or other charges when due; provided,
however, that Tenant shall be entitled to notice of nonpayment and a five (5)
day grace period, prior to the application of such late charge, with respect to
the first (1st) occasion in any calendar year in which any installment of Rent
is not timely paid. The late charge shall be deemed Additional Rent and the
right to require it shall be in addition to all 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 a rate per annum equal to the lesser of
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(i) the annual “Bank Prime Loan” rate cited in the Federal Reserve Statistical
Release Publication H.15, published on the first Tuesday of each calendar month
(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, within thirty (30) days
following 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 any past due Rent, including, without
limitation, all reasonable 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 reasonable 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) make such alterations, improvements, additions or
repairs to all or any portion of the Premises, the Base Building, the Base
Building systems or the Project as Landlord shall reasonably desire or deem
necessary, or as Landlord may be required to perform under Applicable Laws, or
by any governmental or quasi-governmental authority, or by court order or
decree. 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, including janitorial service; (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 within applicable notice and
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cure periods. Landlord may make any such entries without the abatement of Rent
(subject to the terms of Section 19.5.2, above, except Section 19.5.2 shall not
be applicable in connection with entries under item (B), above), and may take
such reasonable steps as required to accomplish the stated purposes. Landlord
will use commercially reasonable efforts to minimize interference with Tenant’s
use of and access to the Premises in connection with any entries under this
Article 27 (except under item (B), above). To the extent that Landlord installs,
maintains, uses, repairs or replaces pipes, cables, ductwork, conduits, utility
lines, and/or wires through hung ceiling space, exterior perimeter walls and
column space, adjacent to and in demising partitions and columns, in or beneath
the floor slab or above, below, or through the Premises, then in the course of
making any such installation or repair, Landlord will: (w) use commercially
reasonable efforts to not interfere unreasonably with or interrupt the business
operations of Tenant within the Premises; (x) not reduce Tenant’s usable space,
except to a de minimus extent (unless such work is required by Applicable Law),
if the same are not installed behind existing walls or ceilings; (y) box in any
of the same installed adjacent to existing walls with construction materials
substantially similar to those existing in the affected area(s) of the Premises;
and (z) repair all damage caused by the same and restore, to the extent
reasonably practical, such area(s) of the Premises to the condition existing
immediately prior to such work. Tenant hereby waives any claims for damages or
for any injuries or inconvenience to or interference with Tenant’s business,
lost profits, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby. 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.
Notwithstanding anything to the contrary set forth in this Article 27, Tenant
may designate in writing certain reasonable areas of the Premises as “Secured
Areas” should Tenant require such areas for the purpose of securing certain
valuable property or confidential information. In connection with the foregoing,
Landlord shall not enter such Secured Areas upon less than twenty-four (24)
hours’ advance notice and Landlord and Landlord's personnel being accompanied by
a representative of Tenant except in the event of an emergency. In no event will
Landlord or any of Landlord’s representatives be allowed to take photographs of
any portion of any Secured Areas without the express written consent of Tenant,
which consent may be withheld in Tenant’s sole discretion. Landlord acknowledges
that any clean rooms, inventory areas and material quarantine areas are Secured
Areas due to heightened regulatory compliance requirements which limits access
thereto. Landlord need not clean any area designated by Tenant as a Secured Area
and shall only maintain or repair such secured areas to the extent (i) such
repair or maintenance is required in order to maintain and repair the Base
Building (to the extent the same is not a Tenant Maintenance Responsibility);
(ii) as required by Applicable Law, or (iii) in response to specific requests by
Tenant and in accordance with a schedule reasonably designated by Tenant,
subject to Landlord's reasonable approval. 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.

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ARTICLE 28
INTENTIONALLY OMITTED
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.
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 (or make good faith comments to) whatever
documents are reasonably required therefor and to deliver the same to Landlord
within thirty (30) days following a request therefor. At the request of Landlord
or any mortgagee or ground lessor, Tenant agrees to execute (or make good faith
comments to) a short form of Lease and deliver the same to Landlord within
thirty (30) 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 Building
and in this Lease, and Tenant agrees that in the event of any such transfer, if
the transferee agrees in writing that it assumes the obligations of the Landlord
under this Lease, Landlord shall be released from all liability under this Lease
arising from and after the date of such transfer and Tenant agrees to look
solely to such transferee for the performance of Landlord’s obligations
hereunder which arise or accrue after the date of transfer and such transferee
shall be deemed to have fully assumed and be
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liable for all obligations of this Lease to be performed by Landlord, and Tenant
shall attorn to such transferee.
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.
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 Landlord 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 equity interest of Landlord in the Building (which shall be deemed to
include the rental income at the Building, the proceeds of any sale of all or
any portion of the Building by Landlord as well as any insurance or condemnation
proceeds),or (b) the equity interest Landlord would have in the Building if the
Building were encumbered by third-party debt in an amount equal to eighty
percent (80%) of the value of the Building (as such value is
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reasonably determined by Landlord). 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.
Similarly, under no circumstances shall any present or future officers,
directors, partners or employees of Tenant have any personal liability for the
performance of Tenant’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; similarly, except with respect to Tenant’s
violations of the provisions of this Lease regarding Hazardous Materials and
Tenant’s holding over in the Premises following the expiration or sooner
termination of this Lease, Tenant shall not be liable under any circumstances
for injury or damage to, or interference with, Landlord’s business, including,
but not limited to, loss of profits, loss of revenues (not including, however,
loss of rents), 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’ 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 Building 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 Building or Project.
29.16 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, acts of war, terrorist acts, inability to obtain
services, labor, or materials or reasonable substitutes therefor, governmental
actions, civil commotions, fire or other casualty, and other causes beyond the
reasonable control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease (collectively, 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
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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. The provisions of this Section 29.16 shall not, however, delay (i) the
trigger date for Tenant’s right to abatements in Rent as set forth in
Section 19.5.2 above, or (ii) the date upon which Tenant may exercise its right
to terminate this Lease following casualty described in Section 11.2 above
except as expressly set forth in Section 11.2. In the event that either party is
delayed from performing any obligation hereunder as a result of Force Majeure,
such party shall promptly give notice to the other party of the delay in
question, specifying in such notice the nature of the delay and, without any
such estimate being deemed a representation or warranty, such party’s good faith
estimate of the length of the delay in question.
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) delivered by a nationally recognized overnight
courier, or (C) 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) business
days after the date it is posted if sent by Mail, (ii) the date the overnight
courier delivery is made, or (iii) the date personal delivery is made; provided
that any Notice delivered on a weekend or holiday will be deemed given on the
next-succeeding business day. Any Notice given by an attorney on behalf of
Landlord or by Landlord’s managing agent shall be considered as given by
Landlord and shall be fully effective. As 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:

South Loop 1, LLC
c/o srmErnst Development Partners
2220 Livingston Street, Suite 208
Oakland, CA 94606
Attn: Joseph Ernst

With a copy to:

South Loop 1, LLC
c/o Hillwood
3000 Turtle Creek Boulevard
Dallas, Texas  75219
Attn:      Chris Brown, Senior Vice President

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Phone: 214-303-5535
Email:    chris.brown@hillwood.com

With a copy to:

South Loop 1, LLC
c/o Hillwood
3000 Turtle Creek Boulevard
Dallas, Texas 75219
Attn:  Thomas D. Williams
Phone: 972-201-2835
Email: del.williams@hillwood.com
With a copy to:

FISHMAN I JACKSON I RONQUILLO
13155 Noel Road, Suite 700, L.B. 13
Dallas, Texas 75240
Attn: Clay B. Pulliam
Phone:  972-419-5503
Email: cpulliam@fjrpllc.com
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 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; JUDICIAL REFERENCE. This Lease shall be construed and
enforced in accordance with the laws of the State of California. THE PARTIES
HEREBY
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WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY
LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE. IF THE JURY WAIVER
PROVISIONS OF THIS SECTION 29.22 ARE NOT ENFORCEABLE UNDER CALIFORNIA LAW, THEN
THE FOLLOWING PROVISIONS SHALL APPLY. IT IS THE DESIRE AND INTENTION OF THE
PARTIES TO AGREE UPON A MECHANISM AND PROCEDURE UNDER WHICH CONTROVERSIES AND
DISPUTES ARISING OUT OF THIS LEASE OR RELATED TO THE PREMISES WILL BE RESOLVED
IN A PROMPT AND EXPEDITIOUS MANNER. ACCORDINGLY, EXCEPT WITH RESPECT TO ACTIONS
FOR UNLAWFUL OR FORCIBLE DETAINER OR WITH RESPECT TO THE PREJUDGMENT REMEDY OF
ATTACHMENT, ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY
HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR SUBSIDIARIES OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE
PREMISES AND/OR ANY CLAIM OF INJURY OR DAMAGE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, SHALL BE HEARD AND RESOLVED BY A REFEREE UNDER THE
PROVISIONS OF THE CALIFORNIA CODE OF CIVIL PROCEDURE, SECTIONS 638 - 645.1,
INCLUSIVE (AS SAME MAY BE AMENDED, OR ANY SUCCESSOR STATUTE(S) THERETO) (THE
“REFEREE SECTIONS”). ANY FEE TO INITIATE THE JUDICIAL REFERENCE PROCEEDINGS AND
ALL FEES CHARGED AND COSTS INCURRED BY THE REFEREE SHALL BE PAID BY THE PARTY
INITIATING SUCH PROCEDURE (EXCEPT THAT IF A REPORTER IS REQUESTED BY EITHER
PARTY, THEN A REPORTER SHALL BE PRESENT AT ALL PROCEEDINGS WHERE REQUESTED AND
THE FEES OF SUCH REPORTER – EXCEPT FOR COPIES ORDERED BY THE OTHER PARTIES –
SHALL BE BORNE BY THE PARTY REQUESTING THE REPORTER); PROVIDED HOWEVER, THAT
ALLOCATION OF THE COSTS AND FEES, INCLUDING ANY INITIATION FEE, OF SUCH
PROCEEDING SHALL BE ULTIMATELY DETERMINED IN ACCORDANCE WITH SECTION 29.21
ABOVE. THE VENUE OF THE PROCEEDINGS SHALL BE IN THE COUNTY IN WHICH THE PREMISES
ARE LOCATED. WITHIN TEN (10) DAYS OF RECEIPT BY ANY PARTY OF A WRITTEN REQUEST
TO RESOLVE ANY DISPUTE OR CONTROVERSY PURSUANT TO THIS SECTION 29.22, THE
PARTIES SHALL AGREE UPON A SINGLE REFEREE WHO SHALL TRY ALL ISSUES, WHETHER OF
FACT OR LAW, AND REPORT A FINDING AND JUDGMENT ON SUCH ISSUES AS REQUIRED BY THE
REFEREE SECTIONS. IF THE PARTIES ARE UNABLE TO AGREE UPON A REFEREE WITHIN SUCH
TEN (10) DAY PERIOD, THEN ANY PARTY MAY THEREAFTER FILE A LAWSUIT IN THE COUNTY
IN WHICH THE PREMISES ARE LOCATED FOR THE PURPOSE OF APPOINTMENT OF A REFEREE
UNDER THE REFEREE SECTIONS. IF THE REFEREE IS APPOINTED BY THE COURT, THE
REFEREE SHALL BE A NEUTRAL AND IMPARTIAL RETIRED JUDGE WITH SUBSTANTIAL
EXPERIENCE IN THE RELEVANT MATTERS TO BE DETERMINED, FROM JAMS, THE AMERICAN
ARBITRATION ASSOCIATION OR SIMILAR MEDIATION/ARBITRATION ENTITY. THE PROPOSED
REFEREE MAY BE CHALLENGED BY ANY PARTY FOR ANY OF THE GROUNDS LISTED IN THE
REFEREE SECTIONS. THE REFEREE SHALL HAVE THE POWER TO DECIDE ALL ISSUES OF FACT
AND LAW AND REPORT HIS OR HER DECISION ON SUCH ISSUES,
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AND TO ISSUE ALL RECOGNIZED REMEDIES AVAILABLE AT LAW OR IN EQUITY FOR ANY CAUSE
OF ACTION THAT IS BEFORE THE REFEREE, INCLUDING AN AWARD OF ATTORNEYS’ FEES AND
COSTS IN ACCORDANCE WITH THIS LEASE. THE REFEREE SHALL NOT, HOWEVER, HAVE THE
POWER TO AWARD PUNITIVE DAMAGES, NOR ANY OTHER DAMAGES WHICH ARE NOT PERMITTED
BY THE EXPRESS PROVISIONS OF THIS LEASE, AND THE PARTIES HEREBY WAIVE ANY RIGHT
TO RECOVER ANY SUCH DAMAGES. THE PARTIES SHALL BE ENTITLED TO CONDUCT ALL
DISCOVERY AS PROVIDED IN THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE REFEREE
SHALL OVERSEE DISCOVERY AND MAY ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER
AS ANY TRIAL COURT JUDGE, WITH RIGHTS TO REGULATE DISCOVERY AND TO ISSUE AND
ENFORCE SUBPOENAS, PROTECTIVE ORDERS AND OTHER LIMITATIONS ON DISCOVERY
AVAILABLE UNDER CALIFORNIA LAW. THE REFERENCE PROCEEDING SHALL BE CONDUCTED IN
ACCORDANCE WITH CALIFORNIA LAW (INCLUDING THE RULES OF EVIDENCE), AND IN ALL
REGARDS, THE REFEREE SHALL FOLLOW CALIFORNIA LAW APPLICABLE AT THE TIME OF THE
REFERENCE PROCEEDING. THE PARTIES SHALL PROMPTLY AND DILIGENTLY COOPERATE WITH
ONE ANOTHER AND THE REFEREE, AND SHALL PERFORM SUCH ACTS AS MAY BE NECESSARY TO
OBTAIN A PROMPT AND EXPEDITIOUS RESOLUTION OF THE DISPUTE OR CONTROVERSY IN
ACCORDANCE WITH THE TERMS OF THIS SECTION 29.22. IN THIS REGARD, THE PARTIES
AGREE THAT THE PARTIES AND THE REFEREE SHALL USE BEST EFFORTS TO ENSURE THAT
(A) DISCOVERY BE CONDUCTED FOR A PERIOD NO LONGER THAN SIX (6) MONTHS FROM THE
DATE THE REFEREE IS APPOINTED, EXCLUDING MOTIONS REGARDING DISCOVERY, AND (B) A
TRIAL DATE BE SET WITHIN NINE (9) MONTHS OF THE DATE THE REFEREE IS APPOINTED.
IN ACCORDANCE WITH SECTION 644 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE, THE
DECISION OF THE REFEREE UPON THE WHOLE ISSUE MUST STAND AS THE DECISION OF THE
COURT, AND UPON THE FILING OF THE STATEMENT OF DECISION WITH THE CLERK OF THE
COURT, OR WITH THE JUDGE IF THERE IS NO CLERK, JUDGMENT MAY BE ENTERED THEREON
IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT. ANY DECISION OF
THE REFEREE AND/OR JUDGMENT OR OTHER ORDER ENTERED THEREON SHALL BE APPEALABLE
TO THE SAME EXTENT AND IN THE SAME MANNER THAT SUCH DECISION, JUDGMENT, OR ORDER
WOULD BE APPEALABLE IF RENDERED BY A JUDGE OF THE SUPERIOR COURT IN WHICH VENUE
IS PROPER HEREUNDER. THE REFEREE SHALL IN HIS/HER STATEMENT OF DECISION SET
FORTH HIS/HER FINDINGS OF FACT AND CONCLUSIONS OF LAW. THE PARTIES INTEND THIS
GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE IN ACCORDANCE WITH
THE CODE OF CIVIL PROCEDURE. NOTHING IN THIS SECTION 29.22 SHALL PREJUDICE THE
RIGHT OF ANY PARTY TO OBTAIN PROVISIONAL RELIEF OR OTHER EQUITABLE REMEDIES FROM
A COURT OF COMPETENT JURISDICTION AS SHALL OTHERWISE BE AVAILABLE UNDER THE CODE
OF CIVIL PROCEDURE AND/OR APPLICABLE COURT RULES.

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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. The terms of this Section 29.24 shall survive the
expiration or earlier termination of the Lease Term. The Brokers (other than
Newmark Knight Frank (Jennifer Essner), who shall be compensated by Cushman &
Wakefield) shall be compensated by Landlord pursuant to the provisions of a
separate agreement; upon written request by Tenant, Landlord will confirm that
the Brokers have been compensated.
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 Building and to install, affix and
maintain any and all signs on the exterior and on the interior of the Project or
Building as Landlord may, in Landlord’s sole discretion, desire. Tenant shall
not use the name of the Project or Building or use pictures or illustrations of
the Project or Building 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, as may be required by Applicable Law
(inclusive of required submissions to the Securities Exchange Commission) or
judicial authority, and to proposed subtenants or assignees.
29.29 Development of the Project.

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29.29.1Subdivision. Landlord reserves the right to further subdivide all or a
portion of the Project. Tenant agrees to execute and deliver, upon demand by
Landlord and in the form requested by Landlord, any additional documents needed
to conform this Lease to the circumstances resulting from such subdivision.
29.29.2The 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.
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.
29.29.3Construction 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, odor, obstruction of access, etc. which are in
excess of that present in a fully constructed project. Tenant hereby waives any
and all rent offsets or claims of constructive eviction which may arise in
connection with such construction.
29.30 Renovations. It is specifically understood and agreed that Landlord has no
obligation and has made no promises to alter, remodel, improve, renovate, repair
or decorate the Premises or the 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, add
to or modify (collectively, the “Renovations”) the Project (including, without
limitation, the Common Areas), but expressly not including the Building (other
than pursuant to the Tenant Work Letter). Tenant hereby agrees that such
Renovations shall in no way constitute a constructive eviction of Tenant nor
entitle Tenant to any abatement of Rent (except as specifically set forth in
Section 19.5.2 of this Lease). Landlord shall have no responsibility and shall
not be liable to Tenant for any 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 for any inconvenience or annoyance occasioned by such
Renovations, 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, its
agents, employees or contractors. Notwithstanding anything in this Section 29.30
to the contrary, Landlord shall use commercially reasonable efforts to perform
all
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Renovations so as to minimize any material, adverse interference with Tenant’s
business operations at the Premises.
29.31 No Violation. Each party hereby warrants and represents that neither its
execution of nor performance under this Lease shall cause such party to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which such party is bound, and each party shall protect, defend, indemnify and
hold the other harmless against any claims, demands, losses, damages,
liabilities, costs and expenses, including, without limitation, reasonable
attorneys’ fees and costs, arising from such party’s breach of this warranty and
representation.
29.32 Transportation Management. Tenant shall fully comply with all present or
future programs intended to manage parking, transportation or traffic in and
around the Project and/or the Building, and in connection therewith, 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. Such programs may include,
without limitation: (i) restrictions on the number of peak-hour vehicle trips
generated by Tenant; (ii) increased vehicle occupancy; (iii) implementation of
an in-house ridesharing program and an employee transportation coordinator;
(iv) working with employees and any Project, Building or area-wide ridesharing
program manager; (v) instituting employer-sponsored incentives (financial or
in-kind) to encourage employees to rideshare; and (vi) utilizing flexible work
shifts for employees.
29.33 Patriot Act. As an inducement to Landlord to enter into this Lease, Tenant
hereby represents and warrants that: (i) Tenant is not, nor is it owned or
controlled directly or indirectly by, any person, group, entity or nation named
on any list issued by the Office of Foreign Assets Control (“OFAC”) of the
United States Department of the Treasury pursuant to Executive Order 13224 or
any similar list or any law, order, rule or regulation or any Executive Order of
the President of the United States as a terrorist, “Specially Designated
National and Blocked Person” or other banned or blocked person (any such person,
group, entity or nation being hereinafter referred to as a “Prohibited Person”);
(ii) Tenant is not (nor is it owned or controlled, directly or indirectly, by
any person, group, entity or nation which is) acting directly or indirectly for
or on behalf of any Prohibited Person; and (iii) neither Tenant (nor any person,
group, entity or nation which owns or controls Tenant, directly or indirectly)
has conducted or will conduct business or has engaged or will engage in any
transaction or dealing with any Prohibited Person, including any assignment of
this Lease or any subletting of all or any portion of the Premises, or the
making or receiving of any contribution or funds, goods or services, to or for
the benefit of a Prohibited Person. In connection with the foregoing, it is
expressly understood and agreed that (x) any breach by Tenant of the foregoing
representations and warranties shall be an event of default by Tenant under this
Lease, and (y) the representations and warranties contained in this
Section 29.33 shall be continuing in nature and shall survive the expiration or
earlier termination of this Lease.
29.34 Utility Billing Information. Tenant shall within five (5) business days
following its receipt of written request from Landlord, provide Landlord with a
copy of each requested invoice from any utility provider with whom Tenant
contracts directly for the provision of
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electricity, gas and/or water services to the Premises. Tenant acknowledges that
pursuant to California Public Resources Code Section 25402.10 and the
regulations adopted pursuant thereto (collectively the “Energy Disclosure
Requirements”), Landlord may be required to disclose information concerning
Tenant’s energy usage at the Building to certain third parties, including,
without limitation, prospective purchasers, lenders and tenants of the Building
(the “Tenant Energy Use Disclosure”). Tenant hereby (A) consents to all such
Tenant Energy Use Disclosures, and (B) acknowledges that Landlord shall not be
required to notify Tenant of any Tenant Energy Use Disclosure. Further, Tenant
hereby releases Landlord from any and all losses, costs, damages, expenses and
liabilities relating to, arising out of and/or resulting from any Tenant Energy
Use Disclosure. The terms of this Section 29.34 shall survive the expiration or
earlier termination of this Lease.
29.35 Reasonableness and Good Faith. Except (i) for matters for which there is a
standard of consent or discretion specifically set forth in this Lease;
(ii) matters which could have an adverse effect on the Building Structure or the
Building Systems, or which could affect the exterior appearance of the Building,
or (iii) matters covered by Article 4 (Additional Rent), or Article 19
(Defaults; Remedies) of this Lease (collectively, the “Excepted Matters”), any
time the consent of Landlord or Tenant is required, such consent shall not be
unreasonably withheld or delayed, and, except with regard to the Excepted
Matters, whenever this Lease grants Landlord or Tenant the right to take action,
exercise discretion, establish rules and regulations or make an allocation or
other determination, Landlord and Tenant shall act reasonably and in good faith.
29.36 Vehicle Parking. Tenant shall be entitled to the non-exclusive use,
commencing on the Lease Commencement Date, of the parking spaces set forth in
Section 13 of the Summary, as specifically shown on Exhibit H, attached hereto
(the “Parking Area”); however, during the period of construction of the Landlord
Work and the Tenant Improvements, Tenant shall be entitled to four (4)
non-exclusive parking spaces for use by Tenant’s construction representative
(identified in the Tenant Work Letter), vendors and consultants. Further, Tenant
shall have the right to construct electric vehicle charging stations in the
Parking Area (provided that any existing parking spaces which are utilized in
order to install electric vehicle charging stations will continue to count
toward the number of parking spaces that Tenant is entitled to use pursuant to
this Lease). Tenant’s right to use the Parking Area shall be non-exclusive and
in common with other users of the Project, as more particularly described in the
Declaration. During the initial Lease Term and any renewal or extension thereof,
Tenant shall not be obligated to pay Landlord for the use of the Parking Area;
provided, however, Tenant shall be responsible for the full amount of any taxes
imposed by any governmental authority in connection with the use of such parking
spaces by Tenant. Tenant shall abide by all rules and regulations which are
reasonably prescribed from time to time for the orderly operation and use of the
parking facility, including any sticker or other identification system
established by Landlord, and Tenant shall cooperate in seeing that Tenant’s
employees and visitors also comply with such rules and regulations. Landlord
specifically reserves the right to change the configuration, design, or layout
of the Project parking areas at any time, (provided that Tenant’s aggregate
allocation of parking spaces is not materially reduced thereby) 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,
temporarily close-off or restrict access to the Project parking areas for
purposes of permitting or
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facilitating any such construction, alteration or improvements, provided that
Landlord will, in any such event, provide reasonable replacement/substitute
parking spaces in an area as close to the Building as reasonably possible (but
still within the Project) for use by Tenant’s employees, vendors and visitors
during any such temporary close off or restriction of access of the Project
parking areas. 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 spaces utilized by Tenant
pursuant to this Section 29.36 are provided to Tenant solely for use by Tenant’s
own personnel and such spaces may not be transferred, assigned, subleased or
otherwise alienated by Tenant without Landlord’s prior approval except together
with Transfers permitted or approved under Section 14
29.37 Hazardous Materials. Landlord and Tenant agree as follows with respect to
the existence or use of “Hazardous Materials,” as that term is defined in
Section 29.37.4, below, on the Project.
29.37.1Hazardous Materials Disclosure Certificate. Upon request by Landlord from
time to time, Tenant shall deliver to Landlord an executed Hazardous Materials
disclosure statement, substantially in the form reasonably required by Landlord
from time to time describing Tenant’s then-present use of Hazardous Materials on
the Premises, and shall also deliver any other reasonably necessary documents as
requested by Landlord. Tenant shall concurrently file with Landlord a copy of
any business response plan or inventory required to be maintained and/or filed
with any federal, state or local regulatory agency under any Applicable Laws.
Landlord and Tenant acknowledge and agree that, as of the date of this Lease,
Tenant has fully and accurately completed Landlord’s pre-leasing environmental
exposures questionnaire (the “Environmental Questionnaire” and the Hazardous
Materials set forth therein, the “Approved Hazardous Materials”), as set forth
on Exhibit I attached hereto (the “Approved Hazardous Materials Exhibit”).
29.37.2Hazardous Materials Usage. Neither Tenant, nor Tenant’s employees,
contractors and subcontractors of any tier, entities with a contractual
relationship with Tenant (other than Landlord), or any entity acting as an agent
or sub-agent of Tenant, shall be entitled to produce, use, store, generate,
transport or dispose of any Hazardous Materials on, in, or about any portion of
the Premises, Building or the Project, nor cause or permit any Hazardous
Materials to be brought upon, placed, stored, manufactured, generated, blended,
handled, recycled, used or released on, in, under or about the Premises (herein
referred to as “Hazardous Materials Usage”) which were not specifically listed
on the Approved Hazardous Materials Exhibit, without, in each instance,
obtaining Landlord’s prior written consent thereto, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that in the
event Tenant desires to use, store or dispose of Hazardous Materials which are
not similar to the Hazardous Materials specifically listed on the Approved
Hazardous Materials Exhibit in terms of their hazardous character, handling
profile, usage and quantity (“New Hazardous Materials Usage”), then Landlord
shall have the right to impose additional terms and conditions on this Lease
based upon the hazardous character, handling profile, use, storage and/or
disposal of such New Hazardous Materials Usage, to the extent such additional
terms and conditions are consistent with the requirements of landlords of
comparable projects in the vicinity of the Project when leasing
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space to tenants using Hazardous Materials materially similar to the New
Hazardous Materials Usage in terms of hazardous character, handling profile,
usage and quantity. Tenant shall not be entitled nor permitted to install any
tanks under, on or about the Premises, Building or Project for the storage of
Hazardous Materials without the express written consent of Landlord, which may
be given or withheld in Landlord’s sole and absolute discretion. If any
information provided to Landlord by Tenant on the Approved Hazardous Materials
Exhibit, or otherwise relating to information concerning Hazardous Materials is
false, incomplete, or misleading in any material respect, the same shall be
deemed a default by Tenant under this Lease. Any Hazardous Materials Usage by
Tenant and Tenant’s Agents after the date of this Lease on or about the Project
shall strictly comply with all applicable laws, including all Hazardous
Materials Laws (as defined in Section 29.37.4, below) now or hereinafter
enacted. Such foregoing obligation shall include, without limitation,
maintaining, and complying with, all required necessary licenses,
certifications, permits and approvals appropriate or required for any Hazardous
Materials Usage by Tenant on the Premises. Landlord shall have a continuing
right, without obligation, to require Tenant to obtain, and to review and
inspect any and all such permits, licenses, certifications and approvals,
together with copies of any and all Hazardous Materials management plans and
programs, any and all Hazardous Materials risk management and pollution
prevention programs, and any and all Hazardous Materials emergency response and
employee training programs respecting Tenant’s Hazardous Materials Usage. Upon
request of Landlord, Tenant shall deliver to Landlord a narrative description
explaining the nature and scope of Tenant’s activities involving Hazardous
Materials and demonstrating to Landlord’s satisfaction Tenant’s compliance with
all Hazardous Materials Laws and the terms of this Lease.
29.37.3Indemnity. Tenant shall indemnify, hold harmless, and, at Landlord’s
option (with such attorneys as Landlord may reasonably approve in advance and in
writing), defend Landlord, the Landlord Parties, mortgagees and other lien
holders, from and against any and all Losses (as hereinafter defined) arising
from or related to: (a) any violation or alleged violation by Tenant or any of
Tenant’s Agents of any of the Laws, including, without limitation, the Hazardous
Materials Laws; (b) any breach of the provisions of this Section 29.37 or any
subsection thereof by Tenant or any of Tenant’s Agents; (c) any Hazardous
Materials Usage on, about or from the Premises, the Project or Common Areas of
any Hazardous Materials approved by Landlord under this Lease, or (d) Landlord’s
exercise of its cure rights in Article 26, above. The term “Losses” shall mean
all claims, demands, expenses, actions, judgments, damages, penalties, fines,
liabilities, losses of every kind and nature (including, without limitation,
property damage, diminution in value of Landlord’s interest in the Premises, the
Property, or the Project, damages for the loss or restriction on use of any
space or amenity within the Building, the Property, or the Project, damages
arising from any adverse impact on marketing space in the Project, sums paid in
settlement of claims and any costs and expenses associated with injury, illness
or death to or of any person), suits, administrative proceedings, costs and
fees, including, but not limited to, attorneys’ and consultants’ fees and
expenses, and the costs of cleanup, remediation, removal and restoration.
29.37.4Hazardous Materials. As used herein, the term “Hazardous Materials” means
any hazardous, radioactive or toxic substance, material or waste which is or
becomes regulated by any local governmental authority, the State of California
or the United States
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Government or under any Hazardous Material Laws. The term “Hazardous Materials,”
includes, without limitation, hazardous radioactive material, radioactive
material, mixed waste, petroleum products, asbestos, PCB’s, and any material or
substance which is (i) listed under Article 9, or defined as hazardous or
extremely hazardous pursuant to Article 11 of Title 22, of the California Code
of Regulations, Division 4, Chapter 20, (ii) defined as a “hazardous waste”
pursuant to Section 1004 of the federal Resource Conservation and Recovery Act,
42 U.S.C. 6901 et seq. (42 U.S.C. 6903), (iii) defined as a “hazardous
substance” pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq. (42 U.S.C. 9601) or
(iv) regulated as a radioactive material under Title 17, Division 1, Chapter 5,
Subchapter 4 of the California Code or Regulations and Title 10, Code of Federal
Regulations, part 20. As used herein, the term “Hazardous Material Laws” shall
mean any statute, law, ordinance, or regulation of any governmental body or
agency (including the U.S. Environmental Protection Agency, the California
Regional Water Quality Control Board, the California Department of Public Health
Radiologic Health Branch and the California Department of Toxic Substances
Control) which regulates the use, storage, release or disposal of any Hazardous
Material.
29.37.5Survival. The obligations of Tenant under this Section 29.37 shall
survive the expiration or earlier termination of this Lease, and shall remain
effective until all of Tenant’s obligations under this Section 29.37 have been
completely performed and satisfied. The rights and obligations of Landlord and
Tenant with respect to issues relating to Hazardous Materials are exclusively
established by this Section 29.37. In the event of any inconsistency between any
other part of this Lease and Section 29.37, the terms of this Section 29.37
shall control.
29.38 Roof Rights. Provided that Tenant is then in occupancy of the Premises,
then, subject to availability, in accordance with, and subject to, this
Section 29.38 (including Tenant’s obtaining all requisite permits and compliance
with Landlord’s reasonable construction rules and conditions as well as
Landlord’s reasonable approval of the contractors, vendors and materialmen in
connection with the same, and confirmation from Landlord and its roofing
contractor that such installation (including maintenance, repair, replacement
and/or removal thereof) will not invalidate or otherwise adversely affect
Landlord’s roof warranty), Tenant shall have the exclusive right, at no
additional fee (but subject to Landlord’s reasonable approval as provided in
this Section 29.38), to install and maintain, at Tenant’s sole cost and expense,
telecommunications antennas, microwave dishes and other communications
equipment, including a standard-size DIRECTV dish on the roof of the Building
(and reasonable equipment and cabling related thereto), for receiving of signals
or broadcasts (as opposed to the generation or transmission of any such signals
or broadcasts) servicing the business conducted by Tenant from within the
Premises (all such equipment is defined collectively as the “Telecommunications
Equipment”) upon the roof of the Building. Landlord makes no representations or
warranties whatsoever with respect to the condition of the roof of the Building,
or the fitness or suitability of the roof of the Building for the installation,
maintenance and operation of the Telecommunications Equipment, including,
without limitation, with respect to the quality and clarity of any receptions
and transmissions to or from the Telecommunications Equipment and the presence
of any interference with such signals whether emanating from the Building or
otherwise. The physical appearance, the size, the design and the weight of the
Telecommunications Equipment shall be subject to
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Landlord’s reasonable approval, the location of any such installation of the
Telecommunications Equipment shall be designated by Landlord subject to Tenant’s
reasonable approval and Landlord may require Tenant to install screening around
such Telecommunications Equipment, at Tenant’s sole cost and expense, as
designated by Landlord in Landlord’s sole discretion. Tenant shall maintain such
Telecommunications Equipment, at Tenant’s sole cost and expense. In the event
Tenant elects to exercise its right to install the Telecommunications Equipment,
then Tenant shall give Landlord prior notice thereof. Tenant shall reimburse to
Landlord the actual costs reasonably incurred by Landlord in approving such
Telecommunications Equipment. Tenant shall remove such Telecommunications
Equipment upon the expiration or earlier termination of this Lease, or, in the
event Tenant no longer occupies the Premises, then upon the termination of
Tenant’s rights under this Section 29.38, and shall return the affected portion
of the rooftop and the Premises to the condition the rooftop and the Premises
would have been in had no such Telecommunications Equipment been installed
(reasonable wear and tear excepted). Such Telecommunications Equipment shall be
installed pursuant to plans and specifications approved by Landlord
(specifically including, without limitation, all mounting and waterproofing
details), which approval will not be unreasonably withheld, conditioned, or
delayed. Notwithstanding any such review or approval by Landlord, Tenant shall
remain solely liable for any damage to any portion of the roof or roof membrane,
specifically including any penetrations, in connection with Tenant’s
installation, use, maintenance and/or repair of such Telecommunications
Equipment, and Landlord shall have no liability therewith. Such
Telecommunications equipment shall, in all instances, comply with Applicable
Laws and the Declaration. Tenant shall not be entitled to license its
Telecommunications Equipment to any unrelated third party, nor shall Tenant be
permitted to receive any revenues, fees or any other consideration for the use
of such Telecommunications Equipment by an unrelated third party.
29.39 [Omitted].
29.40 Tenant’s Generator. In accordance with, and subject to, the terms and
conditions hereof, Applicable Laws, and the Declaration (as applicable), Tenant
shall have the right to install, repair, maintain and use, at Tenant’s sole cost
and expense but without any additional payment to Landlord, to install and
operate an emergency generator (the “Generator“) of a size and type approved by
Landlord, in an area designated by Landlord in Landlord’s sole discretion (the
“Generator Area“), in order to provide emergency electricity service to the
Premises. Landlord shall deliver, and Tenant shall accept, the Generator Area in
its “as-is”, “where-is” condition. In no event shall Tenant permit the Generator
to interfere with normal and customary use or operation of the Project by
Landlord or any other owner or tenant of the Project (including, without
limitation, by means of noise or odor). Tenant shall install the Generator in
accordance with Article 8 above, including Landlord’s right to review and
approve Tenant’s plans and specifications therefor. If the Generator Area is on
the roof of the Building, then at Tenant’s cost, Landlord may have the plans and
specifications for the Generator reviewed by a structural engineer, and Tenant
shall be responsible, at Tenant’s cost, for performing any required structural
upgrades to the roof to accommodate the Generator (provided that Tenant may not
take any action which would invalidate or otherwise adversely affect Landlord’s
roof warranty). Tenant shall be responsible for all maintenance and repairs in
accordance with manufacturer specifications and compliance with Applicable Law
obligations related to the Generator and acknowledges and
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agrees that Landlord shall have no responsibility in connection therewith and
that Landlord shall not be liable for any damage that may occur with respect to
the Generator. The 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 at times
reasonably approved by Landlord. Tenant shall comply with all reasonable
requirements imposed by Landlord so that the Building Systems or other
components of the Project are not adversely affected by the operation of the
Generator. Landlord makes no representations or warranties, and shall have no
responsibility or liability to any Tenant Party for any losses, damages, injury
to persons or property caused by, related to, arising out of or in connection
with, to the condition of the Generator Area, or the fitness or suitability of
the Generator Area for the installation, maintenance and operation of the
Generator. In the event that Tenant shall fail to comply with the requirements
set forth herein, without limitation of Landlord’s other remedies, (i) Landlord
shall have the right to terminate Tenant’s rights with respect to the Generator,
and/or (ii) Landlord shall have the right, at Tenant’s sole cost and expense, to
cure such breach, in which event Tenant shall be obligated to pay to Landlord,
within ten (10) days following demand by Landlord, the amount expended by
Landlord. Tenant shall remove the Generator upon the expiration or earlier
termination of this Lease, and shall return the affected portion of the Project
to the condition same would have been in had no Generator been installed
(reasonable wear and tear, casualty and condemnation excepted), unless Landlord,
in its sole discretion, elects in a written notice to Tenant to keep all or any
portion of the Generator, in which case the Generator shall be surrendered by
Tenant to Landlord, and shall be and become the property of Landlord without the
necessity of any further written documentation unless otherwise requested by
Landlord or a future occupant, upon the expiration or earlier termination of
this Lease.
29.41 Solar Photovoltaic System. Subject to Applicable Laws, the Declaration (as
applicable) and Landlord’s reasonable approval of the plans and specifications
therefor, Tenant and Tenant’s solar contractors or agents (“Solar Agents”) shall
have a right to access and, at Tenant’s sole cost and expense, to operate,
including by way of description and not by way of limitation, connect, install,
maintain, repair, renovate and remove a solar photovoltaic or similar solar
energy system and related equipment, appurtenances and wiring (the “Solar
System”) on the roof of the Building, or a space immediately adjacent to the
Building, which location shall be acceptable to Landlord in Landlord’s sole
discretion. The Solar System will be connected to the electrical/mechanical
system of the Building as a supplemental source of electrical power to the
Building. Tenant may so install, maintain, and replace the Solar System, at its
sole cost, in accordance with all Applicable Laws and in a manner that preserves
the then existing rooftop warranties. Tenant shall (i) be solely responsible for
any damage caused as a result of the Solar System, (ii) promptly pay any tax,
license or permit fees charged pursuant to any laws or regulations in connection
with the installation, maintenance or use of the Solar System and comply with
all precautions and safeguards recommended by all governmental authorities,
(iii) pay for all necessary repairs, replacements to or maintenance of the Solar
System, and (iv) remove the Solar System at Tenant’s sole cost and expense upon
the expiration or sooner termination of this Lease, if Original Tenant or any
Permitted Transferee Assignee ceases to occupy at least fifty percent (50%) of
the Premises, or upon the imposition of any Law which may require removal, and
shall repair any damage to the roof caused by such removal (and if Tenant
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fails to remove the Solar System and repair the roof within fifteen (15) days
after the date Tenant is required to do so, Landlord may do so at Tenant’s
expense). Tenant shall defend, indemnify and hold Landlord harmless from and
against any claims, costs or expenses incurred by Landlord as a result of such
installation, maintenance or replacement by Tenant. At Landlord’s request,
Tenant shall coordinate any roof installation hereunder with Landlord’s roofing
contractor. Landlord disclaims any right to receive any and all savings,
subsidies, credits, renewable energy credits, allowances, rebates, rent
increases or other incentives based upon the operation of the Solar System.
[Signatures follow on next page]

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

Landlord:

SOUTH LOOP 1, LLC,
a Delaware limited liability company

By: North and South Loop, LLC,
        a Delaware limited liability company,
        its sole member

        By:  North Loop 3 Manager, LLC,
          a Delaware limited liability company,
          its managing member

         By: /s/ Joe Ernst
        Name: Joe Ernst   
Title: Manager 

TENANT:
PENUMBRA, INC.,
a Delaware corporation

By: /s/ Adam Elsesser
Name: Adam Elsesser 
Its: CEO

By: /s/ Johanna Roberts
Name: Johanna Roberts
Its: Executive Vice President and General Counsel

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EXHIBIT A

DEPICTION OF PREMISES
[***]

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EXHIBIT B
TENANT WORK LETTER
ARTICLE 1
GENERAL

1.1 Allocation of Responsibility. This Tenant Work Letter exhibit (the “Work
Letter”) describes the allocation of responsibility between Landlord and Tenant
for the design and initial construction of improvements at the Premises. Other
than the Improvements (hereinafter defined), Landlord has no obligation to
construct any improvements on the Land, or to contribute to the cost of any
improvements made or otherwise desired by Tenant, as a condition to the Premises
being Ready for Occupancy.
1.2 Landlord’s Work. Landlord shall provide the base building improvements
substantially as described in Schedule 1 (“Landlord’s Work”). Landlord shall
complete Landlord’s Work at its sole cost and expense (subject to Section 2.7(c)
below) in a good and workmanlike manner. Landlord's Work shall also include
obtaining, at Landlord's sole cost, all permits and/or government approvals for
the construction of Landlord’s Work.
1.3 Tenant Improvements. Landlord shall also cause to be designed and permitted,
and shall retain a contractor to cause to be performed, work of general
construction consisting of improvements at the Premises other than the
Landlord’s Work (collectively, “Tenant Improvements” and together with
Landlord’s Work the “Improvements”), as described below, which Tenant
Improvements shall be paid for in accordance with Article 4. Notwithstanding
anything in this Work Letter to the contrary, Landlord shall not be obligated to
procure and install any furniture, fixtures and equipment for Tenant other than
as documented in the TI Construction Documents (as defined below) approved by
Landlord.
1.4 Progress Schedule. The initial progress schedule for the completion of the
Improvements is attached hereto as Schedule 2 (the “Progress Schedule”).
Landlord shall revise the Progress Schedule to reflect the final schedule
approved by Landlord and Tenant (or deemed approved) in accordance with Section
3.2 below. The Progress Schedule shall be adjusted from time to time to account
for the actual progress of the work and to account for Tenant Delay, provided
Tenant will be provided with written notice of any changes. Except as expressly
provided to the contrary, all time periods referred to in this Work Letter shall
be computed on a calendar basis with no allowance for holidays or weekends.
1.5 Ownership of Tenant Improvements. All Tenant Improvements which may be
installed or placed in or about the Premises shall be and become the property of
Landlord. Landlord and Tenant both understand, acknowledge and agree that
Tenant’s machinery, equipment and trade fixtures that may be purchased and
installed during the construction of the Tenant Improvements (but that do not
constitute Tenant Improvements and are not paid for, in whole or in part, as a
part of the Tenant Improvement Allowance), shall not be subject to this Section
1.5 and, instead, shall be considered owned solely by Tenant.

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1.6 Project Meetings: The parties will hold, at a minimum, bi-weekly meetings
(each, a “Project Meeting”) attended by Landlord (or its designated
representative), Tenant (or its designated representative), the Architect and
other members of the design and construction team as appropriate given the time
and subject of the particular Project Meeting. At the conclusion of each Project
Meeting, assignments, responsibilities, actions and other items addressed at
such Project Meeting shall be reviewed by the attendees to confirm agreement and
acceptance. Landlord shall cause the Architect or another designee to keep
written minutes of attendees and items addressed at each Project Meeting, and to
distribute copies of such minutes to Landlord, Tenant and all attendees at such
meeting.
1.7 Preliminary Total Development Cost Estimate. Based upon the Landlord’s Work
described in Schedule 1 and the Tenant Improvement Allowance (defined below) for
the Tenant Improvements, Landlord has prepared an estimate of the Total
Development Costs (as defined in Exhibit J) for the Premises (the “Preliminary
Total Development Cost Estimate”), which is set forth on Schedule 3 attached
hereto and includes detailed hard and soft cost budgets for the Landlord’s Work
and the Tenant Improvement Allowance.
1.8 Estimated Initial Base Rent. Based upon the Preliminary Total Development
Cost Estimate, the initial annual Base Rent that would be initially owing under
the Lease would be $35.89/RSF (the “Preliminary Base Rent”), which amount has
been determined as set forth in Exhibit J. However, Landlord and Tenant
acknowledge that the initial Base Rent actually payable under the Lease, will be
based upon the Total Development Costs actually incurred by Landlord but not to
exceed, in the aggregate, the amount of the Final Total Development Costs Budget
(plus any increases in Total Development Costs incurred as a consequence of
Tenant requested Changes paid for by Landlord and costs resulting from Tenant
Delay) provided for in Section 3.2 and determined in accordance with Exhibit J.
1.9 Development Process Generally. Landlord and Tenant intend that the
Landlord’s Work is to be treated as a “speculative” development by Landlord and
that Tenant’s approval right over the Base Building Schematics is generally
limited to confirming conformance with the work described in Schedule 1.
Landlord and Tenant intend that the process of the development of the Premises
and construction of the Improvements will proceed in a collaborative, “open
book” manner with the goal that the Premises will meet Tenant’s requirements and
will be undertaken in an efficient and cost-effective manner. Landlord shall use
good faith efforts to carry out its obligations under this Work Letter with the
standard of care to which landlords constructing projects similar to the
Premises are held. Tenant shall respond to requests from Landlord timely and in
good faith and not use its approval rights under this Work Letter for the
purpose of delaying or frustrating the Premises being Ready for Occupancy.
Tenant shall have full and current access to all material information related to
the major elements of the development of the Premises and the right to
participate in major decisions, all as more particularly described in, and
subject to the terms and conditions of, this Work Letter. Tenant shall have the
right at any time, either in the regularly scheduled Project Meetings or
otherwise, to raise with Landlord in good faith any questions, concerns,
suggestions or objections related to the development process, and Landlord shall
consider all such questions, concerns, suggestions or objections in good faith,
such that Tenant and Landlord shall work together in a reasonable,
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cooperative and expeditious manner to address all such matters and not delay the
Premises being Ready for Occupancy. Throughout the period of the development of
the Premises and construction of the Improvements, upon Tenant’s request from
time to time (but not more frequently than monthly), Landlord shall submit a
written report to Tenant regarding the status of the development of the Premises
and construction of the Improvements, including, without limitation, the current
status of construction and any delays thereto or other problems therewith and
budget updates and variance reports. Landlord shall also keep such full and
detailed records, books and accounts relating to the development of the Premises
and construction of the Improvements (the “Premises Books and Records”) as may
be necessary for proper oversight and review of the costs of developing the
Premises and constructing the Improvements; provided, however, that the
“Premises Books and Records” do not include any confidential, privileged, or
proprietary information of Landlord or its Affiliates. At Tenant’s request from
time to time, Landlord shall provide to Tenant copies of the Premises Books and
Records upon reasonable prior notice; and upon reasonable prior notice to
Landlord, Tenant shall be afforded reasonable access to or copies of all of the
Premises Books and Records in Landlord’s possession or control, at all
reasonable times for the purpose of inspection, review and audit thereof. In
furtherance of the foregoing, prior to the completion of the Construction
Documents, Landlord shall meet and confer with Tenant to review the contract
provisions with the General Contractor relating to the books and records to be
maintained and financial controls to be provided pertaining to, the construction
of the Landlord’s Work and the Tenant Improvements. The objective of such
meetings shall be for Tenant to confirm, to its reasonable satisfaction, that an
auditable trail of costs with respect to the construction of the Landlord’s Work
and the Tenant Improvements will be available for Tenant’s review; provided,
however, Tenant acknowledges that the General Contractor may have existing
practices, policies, or project management software with regard to books,
records, and reporting from which it is unwilling to deviate. Thereafter,
throughout the construction of the Improvements, Landlord shall keep, and shall
use reasonable efforts to cause the Contractors and subcontractors to keep, the
books and records for the construction work in accordance with the procedures as
established by Tenant and Landlord and/or consistent with the practices,
policies of General Contractor and within the parameters allowed by the General
Contractor's project management software.
ARTICLE 2
DRAWINGS AND SPECIFICATIONS
2.1 Architect. Landlord and Tenant have selected Forge Architects (the
“Architect”), as the architect for the Improvements.
2.2 Selection of Other Design Professionals.
(a) Landlord’s Work. The other design professionals engaged by Landlord (other
than Architect) or by the Architect (as provided below) in connection with the
Landlord’s Work shall be subject to Tenant’s prior approval, which shall not
unreasonably be withheld. If Tenant disapproves the any proposed design
professionals, Tenant's notice of disapproval shall describe with reasonable
specificity the basis for such disapproval and the changes that would be
necessary to resolve Tenant's objections. If Landlord does not receive Tenant’s
response or if
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Tenant disapproves but does not provide a reasonable basis for its disapproval,
in each case, within five (5) business days of Landlord’s request for approval
of a design professional, Landlord’s selection of such design professional shall
be deemed approved. If Tenant reasonably disapproves of any such design
professionals, then Landlord (and the Architect) and Tenant shall expeditiously
and in good faith work together to agree upon mutually acceptable design
professionals. In addition, the “General Contractor,” as that term is defined in
Section 3.2 of this Work Letter, shall provide design-build services from
qualified mechanical, electrical, plumbing, HVAC, lifesafety and fire protection
contractors for the preparation of plans and engineering working drawings
related to the Landlord’s Work (together with the General Contractor,
collectively, the “Base Building Design-Build Contractors”), all of which Base
Building Design-Build Contractors shall be subject to Tenant’s reasonable
approval (in the same manner as set forth above in this Section 2.2(a)).
(b) Tenant Improvements. Landlord shall cause the Architect to contract directly
with a qualified mechanical, electrical, plumbing, HVAC, life safety and fire
protection design-assist sub-consultant (the “MEP Design-Assist Consultant”) and
other consultants (e.g., lighting designer, acoustical engineer, etc.)
(collectively, the “Design-Assist Consultants”), all of which shall be subject
to Tenant’s reasonable approval (in the same manner as set forth above in
Section 2.2(a)), to develop the basis of design and performance specifications
for such systems to be used by the General Contractor and Design-Build
Contractors as described below related to the Tenant Improvements. The General
Contractor, shall provide design-build services from qualified mechanical,
electrical, plumbing, HVAC, life safety and fire protection contractors for the
preparation of plans and engineering working drawings related to the Tenant
Improvements (together with the General Contractor, collectively, the “Tenant
Improvement Design-Build Contractors”), all of which Tenant Improvement
Design-Build Contractors shall be subject to Tenant’s reasonable approval (in
the same manner as set forth above in Section 2.2(a)). The working drawings,
specification and contract documents to be prepared by the Architect, MEP
Design-Assist Consultant, the other Design-Assist Consultants, and the Tenant
Improvement Design-Build Contractors hereunder and approved pursuant to Section
2.8 below shall be known collectively as the “TI Construction Documents.” Tenant
shall be responsible for ensuring that all elements of the design of the TI
Construction Drawings are suitable for Tenant’s use of the Premises, and neither
the preparation of the TI Construction Documents by the Architect, MEP
Design-Assist Consultant, the other Design-Assist Consultants, or the Tenant
Improvement Design-Build Contractors nor Landlord’s approval of the “Final Space
Plan,” as that term is defined in Section 2.3 below, or the TI Construction
Documents shall relieve Tenant from such responsibility. In addition, Tenant,
not Landlord, shall be responsible for any violation of Code by the TI
Construction Documents resulting from Tenant’s use of the Premises for other
than general office purposes for normal and customary office occupancy density.
Landlord’s review of the TI Construction Documents as set forth in this
Section 2, shall be for its sole benefit 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 TI
Construction Documents are reviewed by Landlord, and notwithstanding any advice
or assistance which may be rendered to Tenant by Landlord, Landlord shall have
no liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the TI Construction Documents; provided,
however, the Architect, MEP Design-
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Assist Consultant, the other Design-Assist Consultants, and Tenant Improvement
Design-Build Contractors shall be responsible for Code compliance issues with
respect to the Final Space Plan and the TI Construction Documents. Prior to the
preparation of the Final Space Plan, Tenant and the Architect shall meet with
Landlord to discuss Landlord’s design parameters and Code compliance. Further,
Landlord shall execute a commercially reasonable architecture contract (the
“Architect’s TI Contract”) with the Architect which shall include industry
standard compliance with law obligations for the design of the Tenant
Improvements. Landlord shall use commercially reasonable efforts to provide
Tenant with a non-exclusive direct right of enforcement against the Architect
with regard to Architect’s compliance with law obligations under the Architect’s
TI Contract.
2.3 Final Space Plan. Tenant will work with Architect to prepare a conceptual
space plan for the Premises (collectively, the “Final Space Plan”) and will
deliver the draft Final Space Plan to Landlord on or before the date set forth
in the Progress Schedule. The Final Space Plan shall (a) be consistent with
Landlord’s requirements for avoiding engineering or other conflicts with the
design and function of the Landlord’s Work (collectively, the “Landlord
Requirements”), and (b) otherwise be subject to Landlord’s reasonable approval.
Landlord shall provide Tenant with notice approving or reasonably disapproving
the Final Space Plan within five (5) business days after Landlord’s receipt
thereof. If Landlord disapproves the Final Space Plan, Landlord’s notice of
disapproval shall describe with reasonable specificity the basis for such
disapproval, and Landlord, Tenant and Architect shall expeditiously and in good
faith work together to agree upon a mutually acceptable Final Space Plan.
2.4 Programming Information. Within fifteen (15) business days of approving the
Final Space Plan, Tenant shall furnish to Landlord all information (as specified
in writing by Landlord, the Architect and Design-Assist Consultants during the
process leading up to and concluding with the approval of the Final Space Plan)
that, together with the Final Space Plan, is necessary in the judgment of
Landlord, the Architect and the Design-Assist Consultants to complete the TI
Construction Documents, including electrical requirements, telephone
requirements, special HVAC requirements, plumbing requirements, and all interior
and special finishes (collectively, the “Programming Information”). To the
extent Landlord, the Architect and the Design-Assist Consultants thereafter need
any additional Programming Information, Tenant shall furnish the same within
ten (10) business days following Landlord’s (or Architect’s or the Design-Assist
Consultants’) request for the same. The Programming Information shall be
consistent with the Landlord Requirements and shall otherwise be subject to
Landlord’s reasonable approval. Landlord shall provide Tenant with notice
approving or reasonably disapproving the Programming Information within
five (5) business days after Landlord’s receipt of the same. If Landlord
disapproves the Programming Information, Landlord’s notice of disapproval shall
describe with reasonable specificity the basis for such disapproval, and
Landlord, Tenant and the Architect shall expeditiously and in good faith work
together to agree upon mutually acceptable programming Information.
2.5 Schematic Documents; Cost Proposal for Tenant Improvements.

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(a) Landlord’s Work. Landlord shall cause the Architect to prepare and deliver
to Tenant one (1) PDF copy and two (2) hardcopies of the drawings and
specifications for Landlord’s Work based on Schedule 1 (the “Base Building
Schematics”), which Base Building Schematics shall comply with applicable laws,
ordinances and governmental rules and regulations, including the Americans with
Disabilities Act (“ADA”), and include all parking areas, driveways, curbs,
sidewalks, utility installations, exterior lighting, landscaping (other than the
Outdoor Amenity Space Work (defined below)), and all other on-site and off-site
improvements required for the Landlord’s Work; provided, however, that Landlord
shall not be responsible for any noncompliance with Applicable Laws to the
extent such noncompliance results from Tenant’s unique use of the Premises.
Tenant shall review and approve the Base Building Schematics in accordance with
Section 2.7. Landlord shall use commercially reasonable efforts to cause the
Architect to deliver to Tenant the Base Building Schematics on or before the
date set forth in the Progress Schedule for Landlord's delivery of the Base
Building Schematics. Upon approval of the Base Building Schematics in accordance
with Section 2.7, Landlord shall update the Preliminary Total Development Cost
Estimate with Landlord’s then-current estimate of the Total Development Costs
for the Premises (the “SD Total Development Cost Estimate”); and in the event
that any line-item in such SD Total Development Cost Estimate exceeds the
corresponding line-item in the Preliminary Total Development Cost Estimate,
Landlord shall provide a reasonably detailed description of the basis for such
increase and if there is an aggregate increase from the Preliminary Total
Development Cost Estimate to the SD Total Development Cost Estimate, the SD
Total Development Cost Estimate shall be subject to Tenant’s reasonable review
and approval, which approval shall be given or withheld within five (5) business
days following Landlord’s delivery of the SD Total Development Cost Estimate.
(b) Tenant Improvements. As a general principle of this Work Letter, the
Architect shall meet and confer on a regular basis with Tenant in the course of
the Architect’s preparation of each phase of the plans and specifications for
the Tenant Improvements in order for Tenant to confirm, to its reasonable
satisfaction, without any obligation on Landlord, that the Tenant Improvements
shall be adequate and sufficient for Tenant’s use of the Premises. Landlord
shall cause the Architect to prepare and deliver to Tenant a PDF copy and two
(2) hardcopies of drawings and specifications, based upon the approved Final
Space Plan and Programming Information, showing the intended design character
and finishes, including materials, of the major elements of the Tenant
Improvements (the “TI Schematics” and together with the Base Building
Schematics, the “Schematics”), including the following documents: (a) scaled
floor plan(s) showing all proposed partitions, doors and large fixtures; (b)
reflected ceiling plan(s), including a lighting plan; and (c) architectural
sections, and structural, plumbing and mechanical drawings. Tenant shall review
and approve the TI Schematics in accordance with Section 2.7. Landlord shall use
commercially reasonable efforts to cause the Architect to deliver to Tenant the
TI Schematics on or before the date set forth in the Progress Schedule for
Landlord's delivery of the TI Schematics. Upon approval of the TI Schematics in
accordance with Section 2.7, Landlord shall provide Tenant with Landlord’s
detailed estimate (the “SD TI Cost Proposal”) of the cost of all items to be
deducted from the Tenant Improvement Allowance and to be incurred by Tenant in
connection with the performance of the Tenant Improvements pursuant to the TI
Schematics. Tenant shall provide Landlord with notice reasonably approving
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or disapproving the SD TI Cost Proposal within five (5) business days following
Landlord’s delivery of the SD TI Cost Proposal to Tenant. In the event that
Tenant shall disapprove of the SD TI Cost Proposal, Landlord and Tenant shall,
expeditiously and in good faith, work with Architect and the Design-Assist
Consultants to value-engineer and modify the TI Schematics and agree upon a
mutually acceptable revised SD TI Cost Proposal.
2.6 Construction Drawings and Specifications.
(a) Landlord’s Work. Landlord shall cause the Architect to prepare and submit to
Tenant after approval of the Base Building Schematics those sets of construction
drawings for the Landlord’s Work referred to in the Progress Schedule, e.g. the
design development package, permit submittal package, etc. (each a “Base
Building Construction Document Package”), which shall include two (2) prints and
electronic files of the relevant construction drawings for the Landlord’s Work,
each of which shall be consistent with the Base Building Schematics, and shall
provide further design detail for the Landlord’s Work. Tenant shall review and
approve each Base Building Construction Document Package in accordance with
Section 2.7, and the Base Building Construction Document Packages approved (or
deemed approved) by Tenant shall be referred to collectively as the “Base
Building Construction Documents.” Upon completion of the bid package for the
Landlord’s Work (as described in the Progress Schedule), Landlord shall update
the SD Total Development Cost Estimate with Landlord’s then-current estimate of
the Total Development Costs for the Premises (the “CD Total Development Cost
Estimate”); and in the event that any line-item in such CD Total Development
Cost Estimate exceeds the corresponding line-item in the SD Total Development
Cost Estimate, Landlord shall provide a reasonably detailed description of the
basis for such increase and if there is an aggregate increase from the SD Total
Development Cost Estimate to the CD Total Development Cost Estimate, the CD
Total Development Cost Estimate shall be subject to Tenant’s reasonable review
and approval, which approval shall be given or withheld within five (5) business
days following Landlord’s delivery of the CD Total Development Cost Estimate.
(b) Tenant Improvements. Landlord shall cause the Architect to prepare and
submit to Tenant after approval of the TI Schematics those sets of construction
drawings for the Tenant Improvements referred to in the Progress Schedule, e.g.
the design development package, permit submittal package, etc. (each a “TI
Construction Document Package” and collectively with the Base Building
Construction Document Packages, the “Construction Document Packages”), which
shall include two (2) prints and electronic files of the relevant construction
drawings for the Tenant Improvements, each of which shall be consistent with the
TI Schematics, and shall provide further design detail for the Tenant
Improvements. Tenant shall review and approve each TI Construction Document
Package in accordance with Section 2.7, and the TI Construction Document
Packages approved (or deemed approved) by Tenant shall be referred to
collectively as the “TI Construction Documents” (and together with the Base
Building Construction Documents, the “Construction Documents”). Upon approval of
the TI Construction Documents in accordance with Section 2.7, Landlord shall
update the SD TI Cost Proposal with Landlord’s then-current estimate of the cost
of all items to be deducted from the Tenant Improvement Allowance and to be
incurred by Tenant in connection with the
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performance of the Tenant Improvements pursuant to the TI Construction Documents
(the “CD TI Cost Proposal”); and in the event that any line-item in such CD TI
Cost Proposal exceeds the corresponding line-item in the SD TI Cost Proposal,
Landlord shall provide a reasonably detailed description of the basis for such
increase. Tenant shall provide Landlord with notice reasonably approving or
disapproving the CD TI Cost Proposal within five (5) business days following
Landlord’s delivery of the CD TI Cost Proposal to Tenant. In the event that
Tenant shall disapprove of the CD TI Cost Proposal, Landlord and Tenant shall,
expeditiously and in good faith, work with Architect and the Design-Assist
Consultants to value-engineer and modify the TI Construction Documents and agree
upon a mutually acceptable revised CD TI Cost Proposal.
2.7 Submission, Acceptance, and Change Procedures.
(a) The Schematics shall be subject to Landlord’s and Tenant’s review and
consent, which shall not be unreasonably withheld. Unless otherwise set forth
herein, Tenant shall respond with any objections and/or requested clarifications
to any Schematics within five (5) business days after receipt by Tenant of such
documents, specifying the reasons therefor with sufficient detail that will
enable Landlord to address Tenant's objections. If Tenant has not delivered
written notice of such an objection within such five (5) business day period,
Tenant shall be deemed to have approved such Schematics. Tenant may object to
the Base Building Schematics only to the extent they are materially inconsistent
with the base building improvements described as Landlord’s Work in Schedule 1,
or are not in compliance with applicable Laws, provided that Tenant may request
Changes (as defined below) other than those required to comply with the
foregoing, in accordance with Section 2.7(c). Landlord shall deliver Tenant’s
timely objections to the relevant consultants and contractors for revisions, and
shall use commercially reasonable efforts to cause the relevant consultants and
contractors to deliver revised Schematics within ten (10) business days after
receipt of Tenant’s objections. Tenant will have five (5) business days to
review the revised Schematics and to approve or disapprove of same; provided,
however that Tenant's review of the revised Schematics shall be limited to the
extent to which the revisions do not address Tenant's previous objections or
basis for disapproval. This process of review and resubmission shall continue as
described above for as long as necessary until Tenant approves (or is deemed to
have approved) the Schematics.
(b) The Construction Document Packages shall be subject to Landlord’s and
Tenant’s review and consent, which shall not be unreasonably withheld. Tenant
may object to the Construction Document Packages only to the extent they are
inconsistent with the final approved Schematics or are not in compliance with
applicable Laws, provided that Tenant may request Changes (as defined below)
other than those required to comply with the foregoing, in accordance with
Section 2.7(c). Unless otherwise set forth herein, Tenant shall respond with any
objections and/or requested clarifications to the initial Base Building
Construction Document Package and initial TI Construction Document Package
within ten (10) business days after receipt by Tenant of such documents,
specifying the reasons therefor with sufficient detail that will enable Landlord
to address Tenant's objections (for subsequent revisions Tenant’s response
period shall be five (5) business days). If Tenant has not delivered written
notice of such an objection within such ten (10) or five (5) business day
period, as applicable, Tenant shall be deemed to have approved that Construction
Document Package. Landlord shall deliver Tenant’s
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timely objections to the relevant consultants and contractors for revisions, and
shall use commercially reasonable efforts to cause the relevant consultants and
contractors to deliver the relevant revised Construction Document Package within
ten (10) business days after receipt of Tenant’s objections. Tenant will have
five (5) business days to review the revised Construction Document Package and
to approve or disapprove of same; provided, however that Tenant's review of the
revised Construction Document Package shall be limited to the extent to which
the revisions do not address Tenant's previous objections or basis for
disapproval. This process of review and resubmission shall continue as described
above for as long as necessary until Tenant approves (or is deemed to have
approved) the Construction Document Package.
(c) If Tenant requests in writing any change, addition or alteration in or to
any Schematics, Construction Documents, or other Construction Document Package
that previously had been approved by Tenant (“Changes”), Landlord shall cause
the Architect to prepare an estimate of the time and cost to revise the
Schematics, Construction Documents, or Construction Document Package, as
applicable, in accordance with the Changes. Landlord shall notify Tenant of the
Architect’s estimated time for and cost of the Changes. Within three (3)
business days after delivery of such estimate to Tenant, Tenant shall notify
Landlord in writing whether Tenant approves such estimate. If Tenant approves
such estimate, then Landlord shall cause the Architect to prepare revised
Schematics, Construction Documents, or Construction Document Packages, as
applicable, implementing Tenant’s requested Changes, and the delay resulting
from the implementation of such Changes shall be a Tenant Delay. Landlord shall
deliver such revised or additional documentation to Tenant for its review
promptly upon Landlord’s receipt of such documentation from the Architect.
Within five (5) business days after delivery of the revised or additional
documentation to Tenant, Tenant shall notify Landlord in writing whether Tenant
approves the Changes reflected in such documents. If Tenant approves the
Changes, Landlord shall prepare a change order (“Change Order”) addressing the
approved Changes, the incremental increase in the Tenant Improvement Costs or
costs of Landlord’s Work caused thereby, if any (“Change Order Costs”) and the
estimated number of Tenant Delay days that will be result from the Changes. If
Tenant fails to execute and return the Change Order to Landlord within five (5)
business days after submittal by Landlord, Tenant will be deemed to have elected
to not proceed with the subject Changes and construction of the Improvements
shall proceed as provided in accordance with the previously approved Schematics,
Construction Documents, or other Construction Document Package. If Tenant timely
executes and returns the Change Order, Tenant must pay (subject to the Tenant
Improvement Allowance balance) all associated Change Order Costs not later than
fifteen (15) days after the date of Tenant’s approval of such Change Order or,
again, Tenant will be deemed to have elected to not proceed with the subject
Changes and construction of the Improvements shall proceed as provided in
accordance with the previously approved Schematics, Construction Documents, or
other Construction Document Package. All Changes shall be subject to Landlord’s
approval, which shall not be unreasonably withheld, conditioned or delayed.
Whether or not Tenant executes a Change Order, Tenant shall pay the cost of
preparing any additional or revised documentation pursuant to this subsection
within fifteen (15) days after receipt of Landlord’s invoice therefor (and, at
Landlord’s election if the parties have entered into the TI Deposit Agreement,
Landlord may require that Tenant deposit an amount equal to the subject Change
Order Costs in the TI Account to permit payment of such costs through the TI
Account).

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(d) Notwithstanding anything in this Work Letter to the contrary, Landlord may
disapprove of any proposed Tenant Improvements or any proposed Changes that, in
Landlord’s reasonable judgment, (i) would not comply with applicable Laws, (ii)
would affect the structural components of the Building in a manner that
materially and adversely affects Landlord’s obligations or costs under the
Lease, (iii) would alter the exterior of the Building in a manner that
materially and adversely affects Landlord’s obligations or costs under the
Lease, (iv) would increase the scope of Landlord’s Work beyond standard shell
and core for the Building, unless such increased scope is paid for by Tenant, or
(v) would materially delay completion of the Improvements. Landlord’s review and
acceptance or approval of any documents shall not be deemed to constitute any
statement regarding the fitness or suitability of the design or construction of
the Improvements for Tenant’s intended use nor an approval of the Improvements
which does not meet legal requirements.
(e) Except as otherwise expressly provided in this Work Letter, all consents and
approvals that Tenant may give pursuant hereto shall not be unreasonably
withheld, conditioned or delayed. If Tenant reasonably withholds its approval to
any request by Landlord under this Work Letter and Landlord submits a subsequent
request for Tenant’s approval for the same matter (a “Subsequent Request”), then
Tenant may only withhold its consent to such Subsequent Request if the
Subsequent Request fails to address the grounds set forth in Tenant’s previous
objection. Unless a different time period is specified in this Work Letter,
Tenant shall have five (5) business days to respond to each Subsequent Request.
(f) If Landlord requests Tenant’s approval for any matter specified in this Work
Letter (including, without limitation, approval of: design professionals or Base
Building Design-Build Contractors pursuant to Section 2.2(a); Tenant Improvement
Design-Build Contractors pursuant to Section 2.2(b); the SD Total Development
Cost Estimate pursuant to Section 2.5(a); the SD TI Cost Proposal pursuant to
Section 2.5(b); the CD Total Development Cost Estimate pursuant to Section
2.6(a); the CD TI Cost Proposal pursuant to Section 2.6(b); the Schematics
pursuant to Section 2.7(a); the Construction Document Packages pursuant to
Section 2.7(b); the Landscape Plan pursuant to Section 2.8(c); and the
Contractors pursuant to Section 3.2) and Tenant does not approve such matter or
respond with a reasonable basis for disapproval within the applicable time
period set forth in this Work Letter or if Tenant withholds its consent in a
manner not permitted by this Work Letter (e.g., Tenant withholds its consent on
grounds not set forth in Tenant’s previous objection in the case of a Subsequent
Request for approval), then, at Landlord’s election, Tenant shall be deemed to
have approved such matter.
2.8 Outdoor Amenity Spaces. Notwithstanding anything in this Work Letter to the
contrary, the Landlord’s Work in the outdoor amenity spaces identified on
Schedule 1 (the “Outdoor Amenity Space Work”), will be subject to the following:
(a) the Outdoor Amenity Space Work will be treated like Tenant Improvements for
the purpose of preparing, reviewing, and approving the Schematics and
Construction Document Packages for the Outdoor Amenity Space Work;
(b) the Outdoor Amenity Space Work will not include any furniture, fixtures or
equipment or vertical structures;

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(c) Landlord will have a landscape architect reasonably acceptable to Tenant
prepare the landscape plan for the Outdoor Amenity Space Work (the “Landscape
Plan”). The Landscape Plan shall be subject to Tenant’s reasonable review and
approval, which approval shall be given or withheld within five (5) business
days following Landlord’s delivery of the Landscape Plan. Upon Tenant’s approval
or deemed approval of the Landscape Plan, the Landscape Plan will be considered
the “Final Space Plan” for the Outdoor Amenity Space Work for purposes of Tenant
providing Programming Information and the preparation of the Schematics and
Construction Documents for the Outdoor Amenity Space Work; and
(d) Tenant shall be responsible for, as part of Tenant’s Contribution, the cost
per square foot of the Outdoor Amenity Space Work in excess of one hundred fifty
percent (150%) of the cost per square foot of the landscape work for the balance
of the Project.
For all other purposes under this Work Letter, the Outdoor Amenity Space Work is
considered part of the Landlord’s Work.
ARTICLE 3
CONSTRUCTION OF THE IMPROVEMENTS
3.1 Management Fee. In consideration for Landlord’s managing the design,
permitting, and construction of the Improvements, the Total Development Costs
(as defined in Exhibit J to the Lease) shall include a management fee as
provided in Exhibit J to the Lease.
3.2 Contractors and Contracts. Landlord and Tenant have selected Oltman’s
Construction (the “General Contractor”) as the general contractor for the
construction of the Improvements. Landlord shall enter into contracts for the
construction of the Improvements with General Contractor, as provided below.
Landlord may also directly retain contractors under lump sum contracts
(collectively with the General Contractor, the “Contractors”). Each of the
Contractors in a material trade shall be subject to Tenant’s reasonable
approval. If Landlord does not receive Tenant’s response within five (5)
business days of Landlord’s request for approval of a Contractor, Landlord’s
selection of such Contractor shall be deemed approved. Landlord shall cause the
General Contractor to obtain at least three (3) competitive bids for each of the
major subcontractor trades for each of Landlord’s Work and the Tenant
Improvements, which subcontractors shall be approved by each of Landlord and
Tenant in its reasonable discretion. Such competitive bids shall include a
schedule with a timeline to complete the work being bid. Based on the selected
subcontractor bids, Landlord shall develop an estimate of the Tenant Improvement
Costs (as defined below) and the cost of Landlord’s Work. (Landlord and Tenant
acknowledge that the selected subcontractor bid might not necessarily be the
lowest bid and that other matters, such as scheduling and the subcontractor’s
reputation, will be taken into account when selecting the subcontractor bids.)
Landlord shall promptly submit the schedule for the Landlord’s Work and the
Tenant Improvements and the cost estimate of Landlord’s Work and the Tenant
Improvement Costs to Tenant for review. Within five (5) business days after
Landlord’s submission to Tenant of the schedule and cost estimates for the
Landlord’s Work and ten (10) business days after Landlord’s submission to Tenant
of the schedule and cost estimates for the Tenant Improvements, Tenant shall
either (i) approve such schedule and cost estimate and, in the case of the
Tenant Improvement Costs, be obligated to pay for the amount of Tenant’s
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Contribution in accordance with the disbursement procedures set forth below, or
(ii) disapprove such schedule and cost estimate, in which case Tenant shall
provide Landlord with additional information adequate to permit the prompt
revision of the applicable Construction Documents and re-pricing of the
Landlord’s Work or the Tenant Improvement Costs, as applicable. Tenant’s failure
to respond within such five (5) business day or ten (10) business day period, as
applicable, shall be deemed to be Tenant’s approval of such schedule and cost
estimate. Upon completion of the re-pricing of the Landlord’s Work and/or the
Tenant Improvement Costs, as applicable, Landlord shall deliver the revised
schedule and cost estimate of the Landlord’s Work and/or the Tenant Improvement
Costs, as applicable, to Tenant for approval and once approved, such schedule
and cost estimate shall be final and deemed approved by the parties; provided if
Tenant does not respond to the final estimate in the five (5) business day
period, Tenant will be deemed to have approved such final schedule and cost
estimate. Upon approval (or deemed approval) of the cost estimates by Tenant,
Landlord shall (A) deliver to Tenant updates of the CD Total Development Cost
Estimate to reflect the approved cost of the Landlord’s Work and the CD TI Cost
Proposal to reflect the approved Tenant Improvement Costs (such updates being
referred to herein as the “Final Total Development Cost Budget” and the “Final
TI Cost Budget” respectively), and (B) enter into guaranteed maximum price
contracts for each of the Landlord’s Work and Tenant Improvements (each a “GMP
Contract” and collectively the “GMP Contract”) with General Contractor and any
lump sum contracts with other Contractors (collectively with the GMP Contract,
the “Contracts”), which Contracts shall contain industry standard terms and
conditions, including, without limitation, the extent and cost of the
Contractor’s general conditions. With the Final TI Cost Budget, Landlord shall
specify the portion of the Tenant Improvement Costs that will be paid from the
Tenant Improvement Allowance and the portion that is to be paid by Tenant as
Tenant’s Contribution (as defined below).
3.3 Construction Generally. Landlord shall cause the Improvements to be
diligently constructed by the Contractors in conformance with the Construction
Documents, as finally accepted or consented to by Landlord and Tenant pursuant
to this Work Letter.
3.4 Warranties and Guaranties. Landlord shall obtain from the General Contractor
and each manufacturer of equipment installed in the Premises as part of the
Improvements a standard construction or manufacturer’s warranty or guaranty, as
applicable, in favor of Landlord and warranting that the Improvements, in the
case of the General Contractor, or the equipment provided, in the case of the
manufacturers, shall be free from any defects of workmanship and materials for a
period of not less than one (1) year from the date of Substantial Completion
(each a “Warranty”).
ARTICLE 4
TENANT IMPROVEMENT COSTS AND ALLOWANCE
4.1 Tenant Improvement Allowance and Costs Generally.
(a) Tenant Improvement Allowance. Provided that there is not a Default of Tenant
under the Lease, including this Work Letter, at the time a payment is due,
Landlord shall pay towards the costs of the Tenant Improvements, including all
design, permit fees,
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Landlord project management, and costs of constructing the Tenant Improvements
(collectively, the “Tenant Improvement Costs”), an amount equal to $90.00 per
square foot of the Building (as determined by Architect in the Construction
Documents in accordance with the method set forth in Section 4.1(e) below) (the
“Tenant Improvement Allowance”), except that the Tenant Improvement Allowance
shall be used to pay only those Tenant Improvement Costs that are considered
under generally accepted accounting principles to be capital expenditures
related to real property (but not to personal property or trade fixtures), which
costs may include permit fees, design fees, project management, and costs of
constructing the Tenant Improvements. Additionally, and in no way limiting the
foregoing restrictions on the use of the Tenant Improvement Allowance, Tenant
shall pay directly the costs of any architects, engineers and other design
professionals that Tenant directly engages. Except as expressly set forth
herein, Landlord’s payment of the Tenant Improvement Allowance or the Tenant
Improvement Costs (if such amount is less than the Tenant Improvement
Allowance), shall satisfy in full Landlord’s obligation to pay the Tenant
Improvement Allowance hereunder, and Landlord shall not be obligated to make any
payment for any subsequent alterations or improvements to the Premises whether
or not the entire Tenant Improvement Allowance was expended on the initial
Tenant Improvements.
(b) Amount of Tenant’s Contribution. Tenant shall pay, as Tenant’s contribution
to the payment of the Tenant Improvement Costs (“Tenant’s Contribution”), the
sum of (i) the amount of the Tenant Improvement Costs in excess of the Tenant
Improvement Allowance up to, but not to exceed, the Final TI Cost Budget
(subject to any adjustment to the Final TI Cost Budget to account for the cost
of Changes to the Tenant Improvements approved by Landlord and Tenant as
provided for in Section 2.7(c) above,) plus (ii) any increases in Tenant
Improvement Costs resulting from Tenant Delays plus (iii) any amount payable by
Tenant pursuant to Section 2.8(d) above. In addition to the Tenant Improvement
Allowance, Landlord shall be responsible for any Tenant Improvement Costs, if
any, in excess of Tenant’s Contribution.
(c) Payment of Tenant’s Contribution. In the event that Tenant is expected to
pay Tenant’s Contribution, then within fifteen (15) days after Tenant’s receipt
of a monthly invoice from Landlord for the portion of Tenant’s Contribution due
that month in accordance with this subsection, Tenant shall pay to Landlord such
portion of Tenant’s Contribution. The Final TI Cost Budget shall be adjusted
from time to time based on Changes approved by Landlord and Tenant as provided
for in Section 2.7(c) above Subject to the restriction that disbursements of the
Tenant Improvement Allowance must be permissible under Section 4.1(a),
Landlord’s monthly invoice to Tenant for the Tenant’s Contribution shall be for
an amount equal to the product of (i) the Tenant Improvement Costs incurred that
month and (ii) a fraction, the numerator of which is Tenant’s Contribution and
the denominator of which is the Final TI Cost Budget; provided, however, that in
no event shall Tenant shall be required to fund an amount in excess of the
Tenant’s Contribution specified in Section 4.1(b) above.
(d) TI Account; TI Deposit Agreement. Notwithstanding anything in this Work
Letter to the contrary, if Landlord’s construction lender requires that Tenant
deposit Tenant’s Contribution into a separate account with Landlord’s
construction lender (the “TI
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Account”), then Landlord and Tenant shall enter into an agreement with
Landlord’s lender, in a form acceptable to each of Landlord and Tenant in its
reasonable discretion, requiring the deposit of the Tenant’s Contribution into
the TI Account and governing the disbursements of such deposited funds (such
agreement, the “TI Deposit Agreement”). Landlord shall use commercially
reasonable efforts to deliver a draft TI Deposit Agreement as soon as practical
after identifying a construction lender. If Tenant, Landlord and Landlord’s
lender cannot agree on a form of TI Deposit Agreement, provided that Tenant has
acted reasonably, Tenant shall not be obligated to enter into the TI Deposit
Agreement or deposit Tenant’s Contribution in a TI Account. Provided that the
parties agree on a form of TI Deposit Agreement, then promptly following the
establishment of the TI Account and the parties’ execution of the TI Deposit
Agreement, Tenant shall deposit in the TI Account an amount equal to the
then-current estimate of the amount of the Tenant’s Contribution (such amount
deposited along with any additional funds deposited in the TI Account, the
“Tenant’s Contribution Deposit”). In the event of any Changes in the Tenant
Improvements or any increases in Tenant Improvement Costs resulting from Tenant
Delays, Tenant shall deposit into the TI Account such increased costs. The
Tenant’s Contribution Deposit shall be disbursed according to the procedures set
forth in the TI Deposit Agreement. Notwithstanding the foregoing, at Tenant’s
election but subject to Tenant, Landlord, and Landlord’s construction lender
reaching agreement on the applicable terms, Tenant may elect to provide a letter
of credit for the Tenant’s Contribution instead of establishing the TI Account
and entering into the TI Deposit Agreement and, if Tenant makes such election,
the terms of such letter of credit shall be determined by Tenant, Landlord, and
Landlord’s construction lender.
(e) Reconciliation of Tenant Improvement Allowance. The parties acknowledge that
the final Tenant Improvement Allowance may be more or less than the estimated
Tenant Improvement Allowance depending on whether the final rentable square
footage of the Premises is more or less than the estimated rentable square
footage. Upon Substantial Completion of the Tenant Improvements and final
determination of the rentable square footage of the Premises, any shortfall due
to Landlord as a result of adjustments to the Tenant Improvement Allowance shall
be paid to Landlord with the next payment of Base Rent, and any refund due to
Tenant as a result of adjustments shall be deducted by Tenant from Tenant’s next
payment of Base Rent. Disbursements of the Tenant Improvement Allowance shall be
made pari passu with disbursements of the Tenant’s Contribution Deposit from the
TI Account provided that such disbursements of the Tenant Improvement Allowance
are otherwise permissible pursuant to this Work Letter.
ARTICLE 5
Substantial completion AND ACCEPTANCE
5.1 Ready for Occupancy. The Premises shall be deemed “Ready for Occupancy” upon
the Substantial Completion of the Landlord’s Work and the Tenant Improvements.
For purposes of this Lease, “Substantial Completion” of (i) the Tenant
Improvements shall occur upon the completion of construction of the Tenant
Improvements in the Premises pursuant to the TI Construction Documents, and
(ii) the Landlord’s Work shall occur upon the completion of construction of the
Landlord’s Work pursuant to the Base Building
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Construction Documents, with the exception of any (a) punch list items, the lack
of completion of which, and the work of completion of which, will not impair
Tenant’s ability to install its fixtures, work-stations, built-in furniture or
equipment in the Premises or otherwise conduct Tenant’s normal business
operations within the Premises, and (b) the installation of any tenant fixtures,
work-stations, built-in furniture, or equipment to be installed by Tenant. Upon
the Substantial Completion of the Improvements, Tenant and Landlord shall
jointly conduct a walk-through of the Improvements and shall jointly prepare
such a punch list (the “Punch List”) of items of Landlord’s Work and Tenant
Improvement needing additional work (the “Punch List Items”); provided, however,
the Punch List shall be limited to items which are required by the Construction
Documents and any other changes agreed to by the parties, and Landlord shall use
commercially reasonably efforts to cause the same to be completed and/or
corrected within the first thirty (30) days following the preparation of the
Punch List. Within sixty (60) days following completion of the Punch List work,
Landlord shall deliver to Tenant (or shall cause the Architect and the
Contractors to deliver to Tenant) a complete set of the “as-built” drawings for
the Landlord’s Work and the Tenant Improvements and a copy of each Contractor’s
“close-out package” (all closed permits, all warranties, guaranties, and
equipment specifications, operating manuals, maintenance requirements and other
information relating to the improvements, equipment, and systems in the
Premises, etc.).
5.2 Tenant’s Early Access. Subject to the terms and conditions of the Lease, and
provided Landlord has received evidence of Tenant’s insurance coverage required
under the Lease, Tenant (or Tenant’s contractors), at Tenant’s sole risk, shall
be permitted to enter the Premises prior to Substantial Completion of the
Improvements, subject to the scheduling, coordination and work requirements of
the General Contractor, solely for the purpose of installing Tenant’s cabling,
furniture, fixtures and equipment. Tenant shall perform or cause Tenant’s
contractor to perform any such work so as to avoid any labor dispute which
causes or is likely to cause stoppage or impairment of construction of the
Improvements or delivery service or any other services in or to the Premises.
Landlord may withdraw such permission for Tenant to enter the Premises, if
Landlord determines that such entry is causing a dangerous situation for
Landlord or is delaying or interfering with the progress of construction of the
Improvements.
5.3 Final Accounting of Total Development Costs. Promptly following completion
of the Improvements, Landlord shall deliver a final accounting of the actual
Total Development Costs and the actual Tenant Improvement Costs, each in
reasonable detail together with supporting documentation regarding such costs,
which final accounting shall include a statement of any variances on a line-item
basis between the amounts shown on the Final Total Development Cost Budget and
on the Final TI Cost Budget and the actual costs incurred for such line-item.
Tenant and its auditors shall be permitted to review and/or conduct an audit of
all books and records relating to the determination of the actual Total
Development Costs for the Premises and the actual Tenant Improvement Costs for
the Tenant Improvements. Landlord shall fully cooperate with Tenant in the
course of Tenant’s review and/or audit of such books and records, and Tenant
shall diligently prosecute such review and/or audit so that the same may be
completed within a reasonable period after Landlord makes such books and records
available to Tenant, subject to Tenant’s right to further review and/or audit
any items not initially provided by Landlord in such books and records. Any
disagreement between Landlord and Tenant
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regarding the determination of Total Development Costs and/or Tenant Improvement
Costs shall be resolved in accordance with Exhibit J.
5.4 Tenant Delay. Except as provided in this Section 5.4, the Lease Commencement
Date shall occur as set forth in the Lease and Section 5.1, above. If, as a
result of the following (“Tenant Delay”):
(a) Tenant’s failure to comply with the time deadlines expressly set forth in
this Work Letter,
(b) Tenant’s failure to timely approve any matter requiring Tenant’s approval
(provided, however, that if Tenant’s failure to timely approve any such matter
based upon Tenant’s disapproval of such matter as a consequence of Tenant’s
determination that the items submitted to Tenant was deficient [for example, if
the proposed Construction Documents did not reflect a logical extension of the
approved Schematics] such failure will not be deemed Tenant Delay),
(c)  A breach by Tenant of the terms of this Work Letter or the Lease,
(d) Subject to the terms of Section 2.7(c), Changes,
(e) Tenant’s requirement for materials, components, finishes or improvements
which are not available in a commercially reasonable time given the anticipated
date of Substantial Completion of the Tenant Improvements, as set forth in the
Progress Schedule,
(f) Changes to the Landlord’s Work required by the TI Construction Documents,
other than changes to the Landlord’s Work relating to compliance with applicable
laws obligations that are solely Landlord’s responsibility, pursuant to the
express terms of this Work Letter,
(g) Any other acts or omissions of Tenant, or its agents, or employees which
actually delays the Substantial Completion of the Tenant Improvements,
(h) Landlord requests Tenant’s approval for any matter specified in this Work
Letter (including, without limitation, approval of: design professionals or Base
Building Design-Build Contractors pursuant to Section 2.2(a); Tenant Improvement
Design-Build Contractors pursuant to Section 2.2(b); the SD Total Development
Cost Estimate pursuant to Section 2.5(a); the SD TI Cost Proposal pursuant to
Section 2.5(b); the CD Total Development Cost Estimate pursuant to Section
2.6(a); the CD TI Cost Proposal pursuant to Section 2.6(b); the Schematics
pursuant to Section 2.7(a); the Construction Document Packages pursuant to
Section 2.7(b); the Landscape Plan pursuant to Section 2.8(c); and the
Contractors pursuant to Section 3.2) and:
(i) Tenant does approve such matter or respond with a reasonable basis for
disapproval within the applicable time period set forth in this Work Letter or

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(ii) if Tenant has timely responded to such request with a reasonable basis for
disapproval, then, if Landlord submits a Subsequent Request that addresses
Tenant’s original reasonable basis for disapproval, Tenant does not approve such
second (2nd) request within five (5) business days after such Subsequent
Request;
(i) If Landlord reasonably disapproves the Final Space Plan pursuant to Section
2.3 or the Programming Information pursuant to Section 2.4 and Tenant fails to
provide a revised Final Space Plan or updated Programming Information, as
applicable, which addresses Landlord’s reasonable basis(es) for disapproval
within five (5) business days following Tenant’s receipt of Landlord’s
disapproval; or
(j) Any other matter identified in this Work Letter as a “Tenant Delay,”
Substantial Completion of the Tenant Improvements or the occurrence of any of
the other conditions precedent to the Lease Commencement Date, as set forth in
the Lease, is actually delayed, then, notwithstanding anything to the contrary
set forth in the Lease or this Work Letter and regardless of the actual date of
the Substantial Completion of the Tenant Improvements, the date of the
Substantial Completion of the Premises shall, for the purposes of determining
the Lease Commencement Date and the Rent Commencement Date, be deemed to be the
date that Substantial Completion of the Tenant Improvements would have occurred
if no Tenant Delay or Delays, as set forth above, had occurred. However, except
with respect to Tenant Delay described in Section 5.2(a) above, no such Tenant
Delay shall be deemed to have occurred unless and until Landlord has delivered
notice of the event or circumstance which Landlord determines is a Tenant Delay
(such notice may be delivered via electronic mail to Tenant’s representative in
accordance with this Work Letter) and Tenant has failed to cure such event or
circumstance within two (2) business days following the date of delivery of such
notice.
5.5 Required Performance Dates.
(a) Tenant shall have the right to terminate the Lease if the Landlord’s Work is
not Substantially Complete by the date that is one (1) year following the
Scheduled Completion Date (defined below). In such event, Tenant shall have the
right, within thirty (30) days thereafter, to deliver a notice to Landlord (a
“Termination Notice”) electing to terminate the Lease effective as of the date
that is thirty (30) days following the delivery of such Termination Notice;
provided, however, that if the Landlord’s Work is Substantially Complete within
such thirty (30) day period, then the Termination Notice shall be null and void
and the Lease shall remain in effect. The “Scheduled Completion Date” shall mean
the scheduled completion date for the Landlord’s Work set forth in the
construction schedule approved (or deemed approved) by Tenant pursuant to
Section 3.2 (as such date may be extended for (i) Tenant Delays and (ii) Force
Majeure (as defined in Lease) up to a maximum of sixty (60) days of delay due to
Force Majeure, provided, however, that such sixty (60)-day cap on Force Majeure
shall not apply to acts of God, acts of war, terrorist acts, governmental
actions, civil commotions, earthquakes, floods, fire or other casualty that have
a material impact on the project schedule, provided, however, that Force Majeure
resulting from acts of God, acts of war, terrorist acts, governmental actions,
civil commotions, earthquakes, floods, fire or other casualty that have a
material impact on the project schedule shall be subject to a ninety (90) day
cap).

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(b) In addition, in the event that the Landlord’s Work is not Substantially
Complete by the date that is forty-five (45) days following Scheduled Completion
Date, the Rent Commencement Date shall be postponed for a period equal to one
(1) day for each day after the date that is forty-five (45) days following the
Scheduled Completion Date until the Landlord’s Work is Substantially Completed,
and no Base Rent shall be due for such period of time following the Lease
Commencement Date until the extended Rent Commencement Date.
ARTICLE 6
CONSTRUCTION REPRESENTATIVES
        Tenant and Landlord shall each designate in writing one or more
representatives to act on its behalf in dealing with the other party in matters
relating to Improvements. Each of the representatives shall: (a) attend or send
an authorized designee to attend each Project Meeting and fully participate and
cooperate with each other to ensure the orderly progression of the Improvements;
(b) be qualified to render decisions that are within their delegation of
authority or, if outside their delegation of authority, to obtain such decisions
in an expedited manner to ensure scope, cost and schedule are maintained; and
(c) be authorized to approve or obtain such approval in an expedited manner,
preliminary plans and specifications and the Schematics, Construction Documents,
Change Orders, subcontractors, bids, the Contractors and any budgets. Either
party may, at any time, change its designated representative by giving a minimum
of three (3) business days’ notice of a change of designation, but such change
will not affect or make void any previous rendered decisions, approvals or
consents of such party’s previous designated representative. The designated
representatives shall exert their best efforts to render decisions and take
actions in a timely manner so as to avoid unreasonable delay in the other
party’s work and actions with respect to the construction of the Improvements.
Tenant hereby designates Chris Faber (email: [***]cfaber@penumbrainc.com;
telephone: [***] (510) 995-2331 (office) and [***] (925) 963-4388 (mobile)) as
its designated representative. Landlord hereby designates Brennan Geraghty
(email: [***]bgeraghty@srmernst.com; telephone: [***](510) 414-3930), as its
designated representative.

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Schedule 1

Landlord’s Work

[See attached.]

[***]

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Schedule 2

Progress Schedule

[See attached.]

[***]

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Schedule 3

Preliminary Total Development Cost Estimate

[See attached.]

[***]

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EXHIBIT C

NOTICE OF LEASE TERM DATES AND BASE RENT

[***]

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EXHIBIT D

RULES AND REGULATIONS

[***]

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EXHIBIT E

FORM OF TENANT’S ESTOPPEL CERTIFICATE

[***]

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EXHIBIT F

DEPICTION OF TENANT’S MONUMENT SIGNAGE LOCATION
(see attached)

[***]

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EXHIBIT G

MARKET RENT DETERMINATION

[***]

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EXHIBIT H

DEPICTION OF ASSIGNED PARKING AREA
(see attached)

[***]

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EXHIBIT I

APPROVED HAZARDOUS MATERIALS EXHIBIT1
[***]

1 To be completed by Tenant prior to Commencement Date

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EXHIBIT J
CALCULATION OF INITIAL BASE RENT
        The initial annual Base Rent payable by Tenant under this Lease shall be
equal to seven and one-half percent (7.5%) times the lesser of (i) the actual
amount of Total Development Costs (defined below) incurred in connection with
the development of the Property, and (ii) the amount of Total Development Costs
set forth in the Final Total Development Cost Budget plus any increase in Total
Development Costs from the amount thereof set forth in the Final Total
Development Cost Budget incurred as a result of Tenant Delays or Changes.
        As used in this Lease, the term “Total Development Costs” shall mean the
sum of:
a.$6,947,820 for agreed land value [±6.38 acres of land at $25.00 per square
foot];
b.The amount of guaranteed maximum cost (GMP) and/or lump sum construction
contract(s), including a general contractor fee not to exceed 4.00% plus
contractor general conditions, requirements and cost of Design-Build Contractor
contracts, for construction of the Landlord’s Work;
c.Contract fees and expenses for project architects, engineers, consultants,
including the Architect, its subconsultants and the Design-Assist Consultants
for the Landlord’s Work; and Landlord’s legal fees related to the development of
the Property (excluding the cost associated with the negotiation and execution
of this Lease), which fees shall be in conformance with market rates;
d.City/County fees and permits related to the Landlord’s Work, including the
cost of final development plan and design review approval;
e.Utility company fees related to the Landlord’s Work;
f.The Tenant Improvement Allowance;
g.Leasing commissions associated with this Lease, including the commissions
payable to the Brokers;
h.Construction financing costs, including construction interest for the Carry
Cost Period (defined below), and construction related insurance costs for the
Carry Cost Period (the term “Carry Cost Period” shall mean the period from the
closing of the construction loan through the Rent Commencement Date; provided,
however, that for the purpose of determining the Carry Cost Period, in the event
that the Premises are not Ready for Occupancy within forty-five (45) days after
the Scheduled Completion Date (as the same may be extended as a consequence of
Tenant Delay and Changes), such period after the Scheduled Completion Date (the
“Carry Cost Exclusion Period”) shall not be included in the Carry Cost Period);
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i.Property carry costs (including, without limitation, taxes, utilities,
non-construction related insurance, association dues, fees and charges under the
Declaration, security charges, and other operating expenses not otherwise
included within the definition of Total Development Costs) from the date
Landlord’s acquisition of the Property until the Rent Commencement Date (subject
to the Carry Cost Exclusion Period provided for in subsection h above, if
applicable);
j.A project contingency equal to seven and one-half percent (7.5%) of the costs
identified in subsections b, c, d, e, and f above, which project contingency may
be applied by Landlord in the aggregate across all cost categories and not just
on a line item-by-line item basis (e.g., the portion of the project contingency
attributable to contract fees for architects may be applied to increases
property carry costs); plus
k.A development and construction management fee equal to three percent (3.0%) of
the costs identified in subsections a - f above.
        The initial monthly Base Rent shall be equal to one-twelfth (1/12) of
the initial annual Base Rent determined as provided for above.

Following approval of the Final Total Development Cost Budget and the Final TI
Cost Budget pursuant to Section 3.2 of the Work Letter, Landlord shall deliver
to Tenant a notice updating the Preliminary Base Rent set forth in Section 1.8
of the Work Letter to reflect the determination of the initial annual Base Rent
based upon the approved Final Total Development Cost Budget (the “FTDCB
Preliminary Base Rent”).

Following Substantial Completion of the Improvements, the actual Total
Development Costs incurred in connection with the development of the Property
shall be determined pursuant to the first sentence of Section 5.3 of the Work
Letter; and the actual initial annual Base Rent payable by Tenant under this
Lease shall be determined as provided for above. If Tenant disputes Landlord’s
accounting of the Total Development Costs and/or Tenant Improvement Costs
(including the occurrence of and any cost resulting from Tenant Delay or
Changes) pursuant to Section 5.3 of the Work Letter following Tenant’s review
thereof, Tenant shall notify Landlord of its objections in reasonable detail
and, thereafter, the parties shall use reasonable efforts to resolve any such
dispute within thirty (30) days. If Landlord and Tenant are unable to resolve
such dispute within such thirty (30) day period, then Landlord and Tenant shall
resolve the dispute pursuant to the procedure set forth in Section 2.2.4 of this
Lease, except that instead of determining the Option Rent, the Neutral
Arbitrator shall determine the actual Total Development Costs and/or the Tenant
Improvement Costs, as applicable.

The parties acknowledge that Tenant may be obligated to make one or more
payments of monthly Base Rent prior to final determination of the actual Total
Development Costs and, therefore, the actual initial monthly/annual Base Rent in
accordance with this Exhibit J. Tenant shall make any such monthly Base Rent
payment based upon the FTDCB Preliminary Base Rent, and any shortfall due to
Landlord as a result of the determination of the actual initial Base Rent
pursuant to this Exhibit J shall be paid to Landlord with Tenant’s next payment
of Base Rent following such determination, and any refund due to Tenant as a
result of the determination of the actual initial Base Rent pursuant to this
Exhibit J shall be deducted by Tenant from Tenant’s next payment of Base Rent
following such determination.

EXHIBIT J-2-
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EXHIBIT K

REPAIR, MAINTENANCE, AND IMPROVEMENT SPECIFICATIONS
[***]

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LEASE

1310 HARBOR BAY PARKWAY,
ALAMEDA, CALIFORNIA

SOUTH LOOP 1, LLC,
a Delaware limited liability company,
as Landlord,
and
PENUMBRA, INC.,
a Delaware corporation,
as Tenant.

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TABLE OF CONTENTS
Page
ARTICLE 1 PREMISES, BUILDING, PROJECT, AND COMMON AREAS
4
ARTICLE 2 LEASE TERM
7
ARTICLE 3 BASE RENT
10
ARTICLE 4 ADDITIONAL RENT
10
ARTICLE 5 USE OF PREMISES
18
ARTICLE 6 SERVICES AND UTILITIES
18
ARTICLE 7 REPAIRS
19
ARTICLE 8 ADDITIONS AND ALTERATIONS
23
ARTICLE 9 COVENANT AGAINST LIENS
24
ARTICLE 10 INSURANCE
25
ARTICLE 11 DAMAGE AND DESTRUCTION
27
ARTICLE 12 NONWAIVER
29
ARTICLE 13 CONDEMNATION
29
ARTICLE 14 ASSIGNMENT AND SUBLETTING
30
ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES
34
ARTICLE 16 HOLDING OVER
34
ARTICLE 17 ESTOPPEL CERTIFICATES
35
ARTICLE 18 SUBORDINATION
35
ARTICLE 19 DEFAULTS; REMEDIES
36
ARTICLE 20 COVENANT OF QUIET ENJOYMENT
38
ARTICLE 21 SECURITY DEPOSIT
39
ARTICLE 22 SUBSTITUTION OF OTHER PREMISES
39
ARTICLE 23 SIGNS
39
ARTICLE 24 COMPLIANCE WITH LAW
40
ARTICLE 25 LATE CHARGES
41
ARTICLE 26 LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
41
ARTICLE 27 ENTRY BY LANDLORD
42
ARTICLE 28 INTENTIONALLY OMITTED
43
ARTICLE 29 MISCELLANEOUS PROVISIONS
43

EXHIBITS
A OUTLINE OF PREMISES
B TENANT WORK LETTER
C FORM OF NOTICE OF LEASE TERM DATES
D RULES AND REGULATIONS
E FORM OF TENANT’S ESTOPPEL CERTIFICATE
F DEPICTION OF TENANT’S MONUMENT SIGNAGE
G MARKET RENT
H ASSIGNED PARKING AREA
I Approved hazardous materials exhibit

(1)
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TABLE OF CONTENTS(continued)
Page
j CALCULATION OF INITIAL BASE RENT
K REPAIR, MAINTENANCE, AND IMPROVEMENT SPECIFICATIONS

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INDEX
Page(s)
Additional
Rent,.........................................................................................................................
14
Advocate
Arbitrators..................................................................................................................
11
Affiliate.......................................................................................................................................
48
Allowance.......................................................................................................................
Exhibit G
Alterations..................................................................................................................................
32
Applicable
Laws.........................................................................................................................
60
Approved Hazardous
Materials..................................................................................................
75
Approved Hazardous Materials
Exhibit.....................................................................................
75
Arbitration
Agreement................................................................................................................
12
Architect..........................................................................................................................
Exhibit B
Architect’s TI
Contract....................................................................................................
Exhibit B
Base
Building.............................................................................................................................
33
Base Building Construction Document
Package............................................................. Exhibit B
Base Building Construction
Documents.........................................................................
Exhibit B
Base Building Design-Build
Contractors........................................................................
Exhibit B
Base Building
Schematics...............................................................................................
Exhibit B
Base
Rent....................................................................................................................................
14
Books and
Records.....................................................................................................................
28
Briefs..........................................................................................................................................
12
Brokers.......................................................................................................................................
71
Building........................................................................................................................................
5
Building
Documents...................................................................................................................
28
Building
Structure......................................................................................................................
30
Building
Systems........................................................................................................................
27
CD TI Cost
Proposal.......................................................................................................
Exhibit B
CD Total Development Cost
Estimate............................................................................
Exhibit B
Change
Order...................................................................................................................
Exhibit B
Change Order
Costs.........................................................................................................
Exhibit B
Changes...........................................................................................................................
Exhibit B
Common
Areas.............................................................................................................................
6
Comparable
Buildings....................................................................................................
Exhibit G
Comparable
Transactions................................................................................................
Exhibit G
Construction Document
Package....................................................................................
Exhibit B
Construction
Documents.................................................................................................
Exhibit B
Contemplated Effective
Date.....................................................................................................
46
Contemplated Transfer
Space....................................................................................................
46
Contractors......................................................................................................................
Exhibit B
Contracts..........................................................................................................................
Exhibit B
Control,.......................................................................................................................................
48
Costs of
Reletting.......................................................................................................................
53
Damage Termination
Date.........................................................................................................
41
Damage Termination
Notice......................................................................................................
41
Declaration...................................................................................................................................
6
Design-Assist
Consultants...............................................................................................
Exhibit B
Direct
Expenses..........................................................................................................................
14
Energy Disclosure
Requirements...............................................................................................
74
Environmental
Questionnaire.....................................................................................................
75

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INDEX(continued)
Page(s)
Estimate......................................................................................................................................
23
Estimate
Statement.....................................................................................................................
23
Estimated Direct
Expenses.........................................................................................................
23
Exchanged Market
Rents............................................................................................................
11
Exercise
Notice...........................................................................................................................
10
Expense
Year..............................................................................................................................
14
Extension Exercise
Notice..........................................................................................................
10
Facilities
Team...........................................................................................................................
27
Final Development Cost
Budget.....................................................................................
Exhibit B
Final Space
Plan..............................................................................................................
Exhibit B
Final TI Cost
Budget.......................................................................................................
Exhibit B
First Offer Commencement
Date.................................................................................................
8
First Offer
Notice.........................................................................................................................
7
First Offer
Space...........................................................................................................................
7
Force
Majeure.............................................................................................................................
67
Generator....................................................................................................................................
79
Generator
Area...........................................................................................................................
79
GMP
Contract..................................................................................................................
Exhibit B
Governmental
Approvals............................................................................................................
59
Hazardous Material
Laws...........................................................................................................
77
Hazardous
Materials...................................................................................................................
77
Hazardous Materials
Usage........................................................................................................
76
Improvements..................................................................................................................
Exhibit B
Intention to Transfer
Notice.......................................................................................................
46
Landlord........................................................................................................................................
i
Landlord
Affiliate.........................................................................................................................
7
Landlord Maintenance
Responsibilities.....................................................................................
30
Landlord
Parties..........................................................................................................................
35
Landlord
Requirements...................................................................................................
Exhibit B
Landlord’s Completion
Notice................................................................................................
39
Landlord’s Option Rent
Notice..................................................................................................
11
Landlord’s
Work.............................................................................................................
Exhibit B
Landscape
Plan................................................................................................................
Exhibit B
Lease..............................................................................................................................................
i
Lease Commencement
Date........................................................................................
9, Summary
Lease Expiration
Date..................................................................................................................
9
Lease
Term...................................................................................................................................
9
Lease
Year....................................................................................................................................
9
Letter of
Credit...........................................................................................................................
56
Losses.........................................................................................................................................
77
M&R
Reports.............................................................................................................................
28
Mail.............................................................................................................................................
67
Maintenance
Meeting.................................................................................................................
28
Management
Standard................................................................................................................
27
Market
Rent....................................................................................................................
Exhibit G
MEP Design-Assist
Consultant.......................................................................................
Exhibit B
MM
Request...............................................................................................................................
28

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INDEX(continued)
Page(s)
Net Equivalent Lease
Rate..............................................................................................
Exhibit G
Net
Worth...................................................................................................................................
48
Neutral
Arbitrator.......................................................................................................................
11
New Hazardous Materials
Usage...............................................................................................
76
Notices........................................................................................................................................
67
Objectionable
Name...................................................................................................................
59
OFAC.........................................................................................................................................
73
Official
Records............................................................................................................................
5
Operating
Expenses....................................................................................................................
15
Option
Conditions......................................................................................................................
10
Option
Rent................................................................................................................................
10
Option
Term...............................................................................................................................
10
Original
Improvements...............................................................................................................
37
Original
Tenant...........................................................................................................................
10
Outdoor Amenity Space
Work........................................................................................
Exhibit B
Outside Agreement
Date............................................................................................................
11
Outside Restoration
Date............................................................................................................
41
Permitted Transferee
Assignee...................................................................................................
48
Preliminary Base
Rent.....................................................................................................
Exhibit B
Preliminary Total Development Cost
Estimate............................................................... Exhibit
B
Premises........................................................................................................................................
5
Premises Books and
Records...........................................................................................
Exhibit B
Programming
Information...............................................................................................
Exhibit B
Progress
Schedule............................................................................................................
Exhibit B
Prohibited
Person........................................................................................................................
74
Project...........................................................................................................................................
5
Project
Meeting...............................................................................................................
Exhibit B
Proposition
13.............................................................................................................................
21
Punch
List........................................................................................................................
Exhibit B
Punch List
Items..............................................................................................................
Exhibit B
Ready for
Occupancy......................................................................................................
Exhibit B
Renovations................................................................................................................................
73
Rent Commencement
Date.......................................................................................
13, Summary
Rent.............................................................................................................................................
14
rentable square
feet.......................................................................................................................
6
Right of First
Offer.......................................................................................................................
7
Ruling.........................................................................................................................................
13
Scheduled Completion
Date............................................................................................
Exhibit B
Schematics.......................................................................................................................
Exhibit B
SD TI Cost
Proposal........................................................................................................
Exhibit B
SD Total Development Cost
Estimate.............................................................................
Exhibit B
Second
Request..........................................................................................................................
32
Service
Agreements....................................................................................................................
27
Six Month
Period........................................................................................................................
46
Specialty
Alteration....................................................................................................................
34
Statement....................................................................................................................................
22
Subject
Space..............................................................................................................................
43

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INDEX(continued)
Page(s)
Subsequent
Request.........................................................................................................
Exhibit B
Substantial
Completion...................................................................................................
Exhibit B
Summary........................................................................................................................................
i
Superior
Holders.........................................................................................................................
51
Tax
Expenses..............................................................................................................................
21
Tenant............................................................................................................................................
i
Tenant
Delay...................................................................................................................
Exhibit B
Tenant Energy Use
Disclosure...................................................................................................
74
Tenant Improvement
Allowance.....................................................................................
Exhibit B
Tenant Improvement
Costs..............................................................................................
Exhibit B
Tenant Improvement Design-Build
Contractors............................................................. Exhibit
B
Tenant
Improvements......................................................................................................
Exhibit B
Tenant Maintenance
Responsibilities.........................................................................................
27
Tenant
Parties.............................................................................................................................
36
Tenant Response
Notice.............................................................................................................
11
Tenant Work
Letter.......................................................................................................................
i
Tenant’s
Contribution......................................................................................................
Exhibit B
Tenant’s Contribution
Deposit........................................................................................
Exhibit B
Tenant’s First Offer Exercise
Notice............................................................................................
8
Tenant’s Initial
Statement..........................................................................................................
13
Tenant’s
Share............................................................................................................................
22
Tenant’s
Signage........................................................................................................................
59
Tenant’s Subleasing
Costs..........................................................................................................
45
Termination
Notice..........................................................................................................
Exhibit B
Third Party
Lease.........................................................................................................................
8
TI
Account.......................................................................................................................
Exhibit B
TI Construction Document
Package................................................................................
Exhibit B
TI Construction
Documents...........................................................................
Exhibit B, Exhibit B
TI Deposit
Agreement.....................................................................................................
Exhibit B
TI
Schematics..................................................................................................................
Exhibit B
Total Development
Costs.................................................................................................
Exhibit J
Transfer.......................................................................................................................................
43
Transfer
Notice...........................................................................................................................
43
Transfer
Premium.......................................................................................................................
45
Transferee...................................................................................................................................
43
Transfers.....................................................................................................................................
43
Underlying
Documents...............................................................................................................
16
Warranty..........................................................................................................................
Exhibit B
Work
Letter.....................................................................................................................
Exhibit B

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