Exhibit 10.4

 

SUBLEASE AGREEMENT

 

 

by and between

 

 

CYMER INC.,

a Nevada corporation

 

(“Sublessor”)

 

 

and

 

NORTHROP GRUMMAN SYSTEMS CORPORATION,

a Delaware corporation

 

(“Sublessee”)

 

 

November 5, 2004

 

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TABLE OF CONTENTS

 

1.

Demise of Subleased Premises

 

 

 

 

1.1

First Floor of the Subject Building

 

 

 

1.2

Second Floor

 

 

 

1.3

The Parking Facilities

 

 

 

1.4

The Project Common Areas

 

 

 

1.5

Sublessor’s Assurances

 

 

 

1.6

Alterations to Project Common Areas and Parking Facilities

 

 

 

1.7

Access to Subleased Premises, Parking Facilities and Project Common Areas

 

 

 

 

 

 

 

2.

Term and Possession

 

 

 

 

2.1

Term

 

 

 

 

2.2

Option to Extend

 

 

 

 

2.3

Holding Over

 

 

 

 

2.4

Sublessee’s Option to Terminate

 

 

 

 

 

 

 

 

3.

Rent.

 

 

 

 

3.1

Base Rent

 

 

 

 

3.2

Rent Abatement

 

 

 

 

3.3

Additional Rent

 

 

 

 

3.4

Exclusions from Project Operating Expenses and Building Operating Expenses

 

 

 

 

3.5

Procedure for Payment of Operating Expenses

 

 

 

 

3.6

Proposition 13 Protection

 

 

 

 

3.7

Vacancy Credit

 

 

 

 

3.8

Audit Right

 

 

 

 

3.9

Rent Payment Address

 

 

 

 

 

 

 

 

4.

Sublessor’s Work and Condition of Subleased Premises

 

 

 

 

4.1

Performance of Sublessor’s Work

 

 

 

 

4.2

Approved Plans

 

 

 

 

4.3

Failure to Substantially Complete by Outside Completion Date

 

 

 

 

4.4

Punchlist

 

 

 

 

4.5

Sublessor Warranty

 

 

 

 

4.6

Substantial Completion

 

 

 

 

4.7

Delivery of As-Builts

 

 

 

 

 

 

 

 

5.

Sublessee Alterations and Additions

 

 

 

 

 

 

 

 

6.

Disturbance of Possession by Sublessor

 

 

 

 

 

 

 

 

7.

Fire and Other Casualty

 

 

 

 

 

 

 

 

8.

Surrender and Restoration

 

 

 

 

 

 

 

 

9.

Connection to Other Facilities

 

 

 

 

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10.

U.S. Government Security Regulations

 

 

 

 

 

 

11.

Miscellaneous Charges

 

 

 

 

 

 

12.

Elevators

 

 

 

 

 

 

13.

Use of Premises

 

 

 

 

 

 

14.

Assignment/Subletting

 

 

 

14.1

Right to Assign or Sublease

 

 

 

14.2

Transfer to Affiliates

 

 

 

14.3

No Right to Recapture

 

 

 

14.4

Permitted Occupants

 

 

 

 

 

 

15.

Maintenance and Repair/Damage and Destruction

 

 

 

15.1

Sublessor’s Responsibilities

 

 

 

15.2

Sublessee’s Responsibilities

 

 

 

 

 

 

16.

Insurance

 

 

 

 

 

 

17.

Utilities.

 

 

 

17.1

Background

 

 

 

17.2

Sublessor Provided Utilities

 

 

 

17.3

Meters

 

 

 

 

 

 

18.

Parking

 

 

 

 

 

 

19.

Signage

 

 

 

 

 

 

20.

Security

 

 

 

 

 

 

21.

Nondisturbance

 

 

 

 

 

 

22.

Roof Rights

 

 

 

 

 

 

23.

Secured Areas

 

 

 

 

 

 

24.

Hazardous Materials

 

 

 

 

 

 

25.

Right to Repair

 

 

 

 

 

 

26.

Indemnity

 

 

 

 

 

 

27.

The Prime Lease

 

 

 

 

 

 

28.

Quiet Enjoyment

 

 

 

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29.

Condemnation

 

 

 

 

 

 

30.

Sublessee’s Default

 

 

 

30.1

Event of Default

 

 

 

30.2

Remedies

 

 

 

 

 

 

31.

Obligation to Mitigate

 

 

 

 

 

 

32.

Brokerage Commission

 

 

 

 

 

 

33.

Sublessor Default

 

 

 

 

 

 

34.

Notices

 

 

 

 

 

 

35.

Attorneys’ Fees

 

 

 

 

 

 

36.

Termination of Prime Lease

 

 

 

 

 

 

37.

Entire Agreement

 

 

 

 

 

 

38.

Counterparts

 

 

 

 

 

 

39.

Estoppel Certificates

 

 

 

 

 

 

40.

Time is of the Essence

 

 

 

 

 

 

41.

Miscellaneous

 

 

 

41.1

Severability

 

 

 

41.2

No Waiver

 

 

 

41.3

Amendments

 

 

 

41.4

Captions

 

 

 

41.5

Government Law

 

 

 

41.6

Construction

 

 

 

 

 

 

42.

Authority

 

 

 

 

 

 

43.

Sublessor Bankruptcy

 

 

 

 

 

 

44.

Sublessee’s Fixtures

 

 

 

 

 

 

45.

Governmental Requirements

 

 

 

 

 

 

46.

PRIME LESSOR’S CONSENT

 

 

 

 

 

 

47.

NONBINDING DRAFTS

 

 

 

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SUBLEASE AGREEMENT

(Entire Building)

 

This SUBLEASE AGREEMENT (“Sublease” or “Agreement”), dated for reference
purposes as of November 5, 2004, is made by and between CYMER, INC., a Nevada
corporation (“Sublessor”), and NORTHROP GRUMMAN SYSTEMS CORPORATION, a Delaware
corporation (“Sublessee”).  The “Effective Date” of this Sublease shall be the
date of the later to occur of (i) the actual execution and delivery to the other
party of this Sublease by the latter of the Sublessor and Sublessee and (ii) the
execution and delivery by the “Prime Lessor” of the “Master Landlord’s Consent”
as such terms are hereinafter defined.

 

WHEREAS, Sublessor is the tenant under that certain Single-Tenant Industrial
Lease (Triple Net) between Sublessor and AEW/LBA Acquisition Co. II, LLC, a
California limited liability company dated December 19, 1996, as amended by that
certain First Amendment to Single-Tenant Industrial Lease dated April 1, 1997,
that certain Second Amendment to Single-Tenant Industrial Lease dated
December 2, 1997, that certain Third Amendment to Single-Tenant Industrial Lease
dated December 12, 1997, that certain Amendment No. 4 to Single-Tenant
Industrial Lease dated January 21, 1999, and that certain Fifth Amendment to
Lease made and entered into as of the 21st day of February, 2000 by and between
Arden Realty Finance III, LLC, a Delaware limited liability company (“Prime
Lessor”) and Sublessor (collectively, the “Prime Lease”, a copy of which is
attached hereto and incorporated by reference as Exhibit ”A”), which affects all
of the real property hereinafter described as the “Land.

 

WHEREAS, the Land consists of two (2) legal parcels more particularly described
on Exhibit “B” attached hereto and made a part hereof.

 

WHEREAS, the Land is improved with two 2-story buildings, including the building
located at 16710 Via del Campo Court, San Diego, California (the “Subject
Building”), surface parking, a two (2) story parking structure, an outdoor
amphitheatre, an outdoor basketball court, exterior eating areas and two (2)
buildings comprising a central plant from which electricity and heating and air
conditioning are provided by Sublessor (the “Central Plant”).  The Land and all
of the improvements thereon are depicted on the site plan attached hereto as
Exhibit “C” (the “Site Plan”) and are hereinafter sometimes collectively
referred to as the “Project”.

 

WHEREAS, the Subject Building consists of approximately 108,290 rentable square
feet and the other building on the Land consists of approximately 36,959
rentable square feet and is located at 16750 Via del Campo Court, San Diego,
California, 92127 (the “Adjacent Building”).  The Subject Building and the
Adjacent Building shall be collectively hereinafter referred to as the
“Buildings.”

 

WHEREAS, Sublessee desires to sublet from Sublessor the Subject Building, the
surface of that certain portion of the Land legally described as Parcel “A” on
Exhibit “B” (the “Building Parcel”) and all of the parking areas shown on the
Site Plan with the exception of 115 stalls reserved for the use of the occupant
of the Adjacent Building and to obtain the nonexclusive

 

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right in common with the tenants and occupants of the Adjacent Building to use
the handicapped parking spaces, outdoor amphitheatre, outdoor basketball court,
and exterior eating areas on the Land (collectively the “Project Amenities”)
from Sublessor in accordance with the terms and conditions contained herein;

 

WHEREAS, the Land is subject to the terms of that certain Declaration of Parking
and Access Easements and Maintenance Agreement dated as of the March 2, 1998 and
recorded on March 5, 1998 as Instrument No. 1998-0118053 in the Official Records
of San Diego County, California, as amended by that certain Amendment No. 1 to
Declaration of Parking and Access Easements and Maintenance Agreement dated as
of January 21, 1999 and recorded on February 1, 1999 as Document number
1999-0056829 in the Official Records of San Diego County, California and the
quitclaim deed dated January 26, 1999 and recorded in the Official Records of
San Diego County, California on  February 1, 1999 as Document No 1999-0056828
(collectively the “Declaration”).

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
in this Sublease Agreement, the parties hereby agree as follows:

 

1.             Demise of Subleased Premises.  Sublessor hereby subleases to
Sublessee, and Sublessee agrees to sublease from Sublessor, the following
premises (the “Subleased Premises”):

 

1.1                                 FIRST FLOOR OF THE SUBJECT BUILDING.  THE
FIRST (1ST) FLOOR (THE “FIRST FLOOR SUBLEASED PREMISES” OR “FIRST FLOOR”)
CONSISTING OF APPROXIMATELY 65,540 RENTABLE SQUARE FEET OF OFFICE, LOBBY, AND
CAFETERIA SPACE AS OUTLINED ON THE SPACE PLAN WITH THE MOST RECENT REVISION
DATED  DECEMBER 10, 2004 (THE “SPACE PLAN”) ATTACHED HERETO AND INCORPORATED BY
REFERENCE AS EXHIBIT ”D” AND GENERALLY REFERRED TO IN THE SPACE PLAN AS AREAS H,
I, J (THE MAIN LOBBY), K, L, M (INCLUDING THE CAFETERIA SPACE THEREIN CONTAINED
AND ALL OF THE EXISTING CAFETERIA EQUIPMENT), N, O-1, O-2, Q AND S, TOGETHER
WITH APPROXIMATELY 7,375 RENTABLE SQUARE FEET OF WAREHOUSE SPACE GENERALLY
REFERRED TO IN THE SPACE PLAN AS AREAS O AND P (THE “FIRST FLOOR WAREHOUSE
SPACE”), FOR AN AGGREGATE OF 72,915 RENTABLE SQUARE FEET OF OFFICE AND WAREHOUSE
SPACE COMBINED.

 

1.2                                 SECOND FLOOR.  THE SECOND (2ND) FLOOR OF THE
SUBJECT BUILDING (THE “SECOND FLOOR SUBLEASED PREMISES” OR “SECOND FLOOR”)
CONSISTING OF APPROXIMATELY 30,385 RENTABLE SQUARE FEET OF OFFICE SPACE AS
OUTLINED ON THE SPACE PLAN AND GENERALLY REFERRED TO THEREIN AS AREAS A, A-1, B,
C, TOGETHER WITH APPROXIMATELY 4,990 RENTABLE SQUARE FEET OF WAREHOUSE SPACE
GENERALLY REFERRED TO IN THE SPACE PLAN AS AREA D, FOR AN AGGREGATE OF 35,375
RENTABLE SQUARE FEET OF OFFICE AND WAREHOUSE SPACE COMBINED.  AREAS E, F, AND G,
CONTAINING THE MECHANICAL ROOM, THE ELECTRICAL CLOSET, AND CERTAIN SPACE
OTHERWISE REFERRED TO AS WAREHOUSE SPACE, ARE EXCLUDED FROM THE RENTABLE AREA OF
THE SECOND FLOOR.

 

1.3                                 THE PARKING FACILITIES.  ALL OF THE AREAS
SHOWN ON THE SITE PLAN FOR PARKING, INCLUDING WITHOUT LIMITATION THE PARKING
STRUCTURE, BUT EXCLUDING THE 115 STALLS DESIGNATED ON THE MAP AS “G.A. PARKING”
AND LISTED AS “CSD-1 TENANT PARKING ALLOCATION” (THE “ADJACENT BUILDING PARKING
AREA”) AND SUCH OTHER PARKING FACILITIES AS SHALL HEREAFTER BE PROVIDED TO
SUBLESSOR UNDER THE DECLARATION (COLLECTIVELY THE “PARKING FACILITIES”);
PROVIDED HOWEVER IN NO EVENT SHALL THE NUMBER OF PARKING STALLS PROVIDED TO
SUBLESSEE FOR ITS EXCLUSIVE USE

 

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ON THE LAND BE LESS THAN ONE HUNDRED FIFTY-SIX (156) THE PARKING STALLS IN THE
PARKING GARAGE, ONE HUNDRED SEVENTY-THREE (173) EXISTING SURFACE PARKING STALLS,
AND TWENTY-FIVE (25) NEW SURFACE PARKING STALLS WHICH SUBLESSOR SHALL CAUSE TO
BE STRIPED FOR PARKING ON THE SURFACE AREA ADJACENT TO THE “WAREHOUSE AREA” (AS
HEREINAFTER DEFINED), FOR A TOTAL OF NOT LESS THAN THREE HUNDRED FIFTY-FOUR
(354) PARKING STALLS.  IN ADDITION, ELEVEN (11) HANDICAPPED PARKING STALLS AS
SHOWN ON THE SITE PLAN SHALL BE AVAILABLE FOR SUBLESSEE’S NON-EXCLUSIVE USE
SHARED WITH THE TENANT OF THE ADJACENT BUILDING.

 

1.4                                 THE PROJECT COMMON AREAS.  THE NON-EXCLUSIVE
RIGHT IN COMMON WITH THE OTHER OCCUPANTS OF THE BUILDINGS TO USE THE
IMPROVEMENTS ON THE LAND NOT WITHIN ANY BUILDINGS THAT ARE INTENDED FOR USE BY
THE OCCUPANTS OF THE BUILDINGS (THE “PROJECT COMMON AREAS”), INCLUDING WITHOUT
LIMITATION THE PROJECT AMENITIES, THE CENTRAL PLANT, THE TRASH STORAGE AREA FOR
THE PROJECT, ALL LANDSCAPING AREAS, DRIVEWAYS THROUGH THE PARKING AREAS, AND THE
DRIVEWAYS FOR INGRESS AND EGRESS TO AND FROM VIA DEL CAMPO COURT AND THE PARKING
AREAS LOCATED ON THE ADJACENT PARCEL.  THE MAINTENANCE BUILDING SHOWN ON THE
SITE PLAN IS NOT PART OF THE SUBLEASED PREMISES OR THE PROJECT COMMON AREAS. 
SUBLESSOR SHALL RETAIN THE EXCLUSIVE RIGHT TO USE THE MAINTENANCE BUILDING AND
SHALL BE SOLELY RESPONSIBLE FOR MAINTAINING AND REPAIRING SAME.

 

1.5                                 SUBLESSOR’S ASSURANCES.  SUBLESSOR
REPRESENTS AND WARRANTS TO SUBLESSEE EACH OF THE FOLLOWING:

 

(A)                                  THAT SUBLESSOR HOLDS ALL OF THE TENANT’S
INTEREST UNDER THE PRIME LEASE IN AND TO THE SUBLEASED PREMISES;

 

(B)                                 THAT SUBLESSOR’S INTEREST UNDER THE PRIME
LEASE HAS NOT BEEN ASSIGNED OR HYPOTHECATED BY SUBLESSOR;

 

(C)                                  THAT TO THE BEST OF SUBLESSOR’S KNOWLEDGE,
THE LAND, THE BUILDINGS AND THE PROJECT ARE FREE AND CLEAR OF ALL EXCEPTIONS TO
TITLE EXCEPT FOR THE MATTERS SET FORTH ON THAT CERTAIN PRELIMINARY TITLE REPORT
ISSUED AS OF NOVEMBER 3, 2004 BY FIRST AMERICAN TITLE INSURANCE COMPANY;

 

(D)                                 THAT THE PROJECT, INCLUDING WITHOUT
LIMITATION THE BUILDINGS, THE PROJECT COMMON AREA, THE PARKING FACILITIES, THE
PROJECT AMENITIES AND THE OTHER IMPROVEMENTS TO THE LAND ARE IN COMPLIANCE WITH
APPLICABLE LAWS, RULES, ORDINANCES, AND RESTRICTIVE COVENANTS NOW AFFECTING THE
LAND

 

(E)                                  THAT WITH THE EXCEPTION OF THE “SUBLESSOR’S
WORK” (AS HEREINAFTER DEFINED), AND THE APPROVALS REQUIRED TO BE DELIVERED TO
SUBLESSEE UNDER SECTION 2.1(F), SUBLESSOR HAS OBTAINED AND SECURED ALL CONSENTS,
APPROVALS AND AUTHORIZATIONS REQUIRED TO PERMIT SUBLESSEE TO USE AND OCCUPY THE
SUBLEASED PREMISES FOR THE PURPOSES PERMITTED BY THIS SUBLEASE;

 

(F)                                    THAT THE PRIME LEASE ATTACHED HERETO IS A
TRUE AND COMPLETE COPY OF THE SAME; AND

 

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(G)                                 THAT THE PRIME LEASE IS FREE FROM DEFAULT BY
SUBLESSOR AND THE PRIME LESSOR AS OF THE DATE OF THIS SUBLEASE.

 

1.6                                 ALTERATIONS TO PROJECT COMMON AREAS AND
PARKING FACILITIES.  SUBLESSOR AND SUBLESSEE EACH ACKNOWLEDGES AND AGREES THAT
IT SHALL NOT MATERIALLY ALTER OR RECONFIGURE THE PROJECT COMMON AREAS AND/OR THE
PARKING FACILITIES AND/OR RESTRIPE THE PARKING STALLS TO REDUCE THE NUMBER OF
PARKING STALLS OR GRANT ANY OTHER PARTY THE RIGHT TO USE THE PARKING FACILITIES
EXCEPT FOR THE OCCUPANTS OF THE BUILDINGS.

 

1.7                                 ACCESS TO SUBLEASED PREMISES, PARKING
FACILITIES AND PROJECT COMMON AREAS.  SUBJECT TO THE TERMS OF THIS SUBLEASE,
SUBLESSOR SHALL PROVIDE SUBLESSEE AND ITS EMPLOYEES AND INVITEES ACCESS TO THE
SUBLEASED PREMISES AND THE PROJECT COMMON AREAS AND PARKING FACILITIES SEVEN (7)
DAYS A WEEK, TWENTY-FOUR (24) HOURS A DAY, THREE HUNDRED SIXTY FIVE (365) DAYS A
YEAR DURING THE TERM OF THIS SUBLEASE.  SUBLESSOR SHALL ENFORCE THE TERMS OF THE
PRIME LEASE TO MAINTAIN SUBLESSEE’S UNRESTRICTED ACCESS TO THE SUBLEASED
PREMISES, THE PROJECT, THE PROJECT COMMON AREAS AND THE PARKING FACILITIES. 
NOTWITHSTANDING THE FORGOING, SUBLESSEE’S USE OF THE AMPHITHEATRE SHALL BE
SCHEDULED AND RESERVED IN ADVANCE WITH SUBLESSOR AND SHALL BE SUBJECT TO ANY
PRIOR RESERVATION PREVIOUSLY SCHEDULED BY THE OCCUPANT OF THE ADJACENT
BUILDING.  SUBLESSEE’S RIGHT TO USE THE BASKETBALL COURT SHALL BE ON A FIRST
COME FIRST SERVE BASIS.

 

2.                                       TERM AND POSSESSION.

 

2.1                                 TERM.  SUBJECT TO ALL THE TERMS AND
CONDITIONS OF THIS SUBLEASE, THIS SUBLEASE SHALL BE EFFECTIVE ON THE DATE OF
FULL EXECUTION AND DELIVERY OF THIS SUBLEASE BY SUBLESSOR AND SUBLESSEE.  THE
TERM (THE “INITIAL SUBLEASE TERM”) OF THIS SUBLEASE SHALL CONSIST OF TWO (2)
STAGGERED TERMS APPLICABLE AS TO TWO (2) DIFFERENT PORTIONS OF THE SUBLEASED
PREMISES (EACH A “PHASE”), AS PROVIDED IN THIS SECTION 2.1.  THE FIRST PHASE OF
THE SUBLEASED PREMISES TO BE DELIVERED TO SUBLESSEE (HEREINAFTER “FIRST PHASE”)
IS COMPRISED OF THE SECOND FLOOR, THE LAND AND THE PARKING FACILITIES.  THE
SECOND PHASE OF THE SUBLEASED PREMISES TO BE DELIVERED TO SUBLESSEE (HEREINAFTER
“SECOND PHASE”) IS COMPRISED OF THE FIRST FLOOR SUBLEASED PREMISES.  THE INITIAL
SUBLEASE TERM FOR EACH PHASE SHALL BE:

 

(A)                                  FIRST PHASE.  THE INITIAL SUBLEASE TERM
WITH RESPECT TO THE FIRST PHASE (THE “FIRST PHASE INITIAL TERM”) SHALL BE A
PERIOD COMMENCING ON THE DATE OF DELIVERY BY SUBLESSOR OF THE FIRST PHASE IN THE
“REQUIRED CONDITION” (AS HEREINAFTER DEFINED) AND THE ACCEPTANCE BY SUBLESSEE OF
THE SAME (THE “FIRST PHASE DELIVERY DATE”) AND TERMINATING ON THE EXPIRATION
DATE (AS DEFINED IN SECTION 2.1(B) BELOW), UNLESS OTHERWISE EXTENDED OR SOONER
TERMINATED IN ACCORDANCE WITH THE PROVISIONS OF THIS SUBLEASE OR BY MUTUAL
WRITTEN AGREEMENT OF THE PARTIES.  SUBLESSOR SHALL DELIVER THE FIRST PHASE TO
SUBLESSEE IN THE REQUIRED CONDITION SO AS TO INSURE THAT THE FIRST PHASE
DELIVERY DATE SHALL OCCUR ON OR BEFORE A DATE WHICH IS TWENTY-FIVE (25) CALENDAR
DAYS FOLLOWING THE EFFECTIVE DATE (THE “FIRST PHASE OUTSIDE DELIVERY DATE”).

 

(B)                                 SECOND PHASE.  THE INITIAL SUBLEASE TERM
WITH RESPECT TO THE SECOND PHASE (THE “SECOND PHASE INITIAL TERM”) SHALL BE FOR
A PERIOD OF THIRTY SIX (36)

 

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MONTHS COMMENCING ON THE DATE OF DELIVERY BY SUBLESSOR OF THE SECOND PHASE IN
THE REQUIRED CONDITION AND ACCEPTANCE OF SAME BY SUBLESSEE (THE “SECOND PHASE
DELIVERY DATE”), AND TERMINATING ON THE DATE THAT IS THIRTY SIX (36) MONTHS
LATER (THE “EXPIRATION DATE”), UNLESS OTHERWISE EXTENDED OR SOONER TERMINATED IN
ACCORDANCE WITH THE PROVISIONS OF THIS SUBLEASE OR BY MUTUAL WRITTEN AGREEMENT
OF THE PARTIES; PROVIDED, HOWEVER, THAT IN THE EVENT THE SECOND PHASE DELIVERY
DATE DOES NOT FALL ON THE FIRST DAY OF A MONTH, THEN THE INITIAL SUBLEASE TERM
SHALL BE EXTENDED SO THAT THE EXPIRATION DATE OCCURS ON THE LAST DAY OF THE
CALENDAR MONTH DURING WHICH THIS SUBLEASE WOULD OTHERWISE EXPIRE.  SUBLESSOR
SHALL DELIVER THE SECOND PHASE TO SUBLESSEE IN THE REQUIRED CONDITION ON OR
BEFORE A DATE WHICH IS EIGHTY-SIX (86) CALENDAR DAYS FOLLOWING THE EFFECTIVE
DATE (THE “SECOND PHASE OUTSIDE DELIVERY DATE”).

 

(C)                                  CONFIRMATION OF SUBLEASE DATES.  FOLLOWING
THE DETERMINATION OF THE EFFECTIVE DATE, SUBLESSOR AND SUBLESSEE SHALL CONFIRM
THE SAME IN WRITING WHICH CONFIRMATION SHALL OCCUR NO LATER THAN THE DATE RENT
SHALL COMMENCE UNDER THIS SUBLEASE FOR ANY PHASE.  FOLLOWING THE DETERMINATION
OF THE FIRST PHASE DELIVERY DATE AND THE SECOND PHASE DELIVERY DATE,
RESPECTIVELY, SUBLESSOR AND SUBLESSEE SHALL CONFIRM IN WRITING THE COMMENCEMENT
DATES FOR EACH PHASE (WHICH SHALL BE SUCH DELIVERY DATES AND SHALL BE THE
RESPECTIVE DATES OF COMMENCEMENT OF RENT FOR EACH PHASE) AND THE EXPIRATION DATE
APPLICABLE TO THIS SUBLEASE.

 

(D)                                 FAILURE TO TIMELY DELIVER ONE OR MORE
PHASE.  SUBLESSOR ACKNOWLEDGES THAT THE TIMELY DELIVERY TO SUBLESSEE OF
POSSESSION OF EACH PHASE ON OR BEFORE THE OUTSIDE DELIVERY DATES FOR SAME
DESCRIBED IN THIS SECTION IN THE REQUIRED CONDITION IS A CRITICAL ELEMENT IN
CONNECTION WITH SUBLESSEE’S BUSINESS OPERATIONS.  NOTWITHSTANDING THE FOREGOING,
HOWEVER, EACH PHASE OUTSIDE DELIVERY DATE SHALL BE EXTENDED, FOR A PERIOD NOT TO
EXCEED THIRTY (30) DAYS, TO THE EXTENT SUBLESSOR IS DELAYED BY REASON OF THE
OCCURRENCE OF ACTS OF GOD, MAN-MADE OR NATURAL DISASTERS, EARTHQUAKES, FIRE,
RIOTS, FLOOD, MATERIAL SHORTAGES, OR STRIKES, BUT SOLELY TO THE EXTENT THAT SUCH
EVENTS OR CIRCUMSTANCES CANNOT REASONABLY BE MITIGATED WITHIN SUBLESSOR’S
REASONABLE CONTROL.  THE TERM “REQUIRED CONDITION” FOR EACH PHASE SHALL MEAN
THAT: (1) SUBSTANTIAL COMPLETION OF THE SUBLESSOR’S WORK FOR SUCH PHASE SHALL
HAVE OCCURRED; (2) SUBLESSOR SHALL HAVE DELIVERED POSSESSION OF SUCH PHASE TO
SUBLESSEE, BROOM CLEAN AND READY FOR OCCUPANCY IN GOOD WORKING ORDER AND REPAIR
AND IN COMPLIANCE WITH ALL APPLICABLE LAWS, GOVERNMENTAL REQUIREMENTS AND OTHER
RULES AND REGULATIONS INCLUDING WITHOUT LIMITATION THE MECHANICAL, ELECTRICAL,
LIGHTING, PLUMBING AND HVAC EQUIPMENT.

 

(I)                                     IN THE EVENT SUBLESSOR DOES NOT DELIVER
TO SUBLESSEE ANY PHASE IN THE REQUIRED CONDITION ON OR BEFORE THE OUTSIDE
DELIVERY DATE FOR SUCH PHASE, OR IN THE EVENT SUBLESSOR DOES NOT DELIVER THE
“PRIME LEASE APPROVALS” (AS HEREINAFTER DEFINED IN 2.1(F) BELOW) ON OR BEFORE A
DATE WHICH IS FIFTEEN (15) CALENDAR DAYS FOLLOWING THE EFFECTIVE DATE, UNLESS
THEREAFTER, NOT LATER THAN THIRTY (30) DAYS FOLLOWING THE DELIVERY BY SUBLESSEE
TO SUBLESSOR OF WRITTEN NOTICE OF SUBLESSOR’S DEFAULT WITH RESPECT THERETO,
SUBLESSOR DELIVERS SUCH PHASE IN THE REQUIRED CONDITION AND THE PRIME LEASE
APPROVALS, IF AND TO THE EXTENT NOT PREVIOUSLY DELIVERED, THEN SUBLESSOR SHALL
BE IN MATERIAL DEFAULT OF THIS SUBLEASE

 

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AND SUBLESSEE SHALL BE ENTITLED TO EXERCISE ALL REMEDIES AVAILABLE AT LAW OR IN
EQUITY BY REASON OF SUCH FAILURE.  SUCH REMEDIES MAY INCLUDE, WITHOUT
LIMITATION, THE RIGHT OF SUBLESSEE TO TERMINATE THIS SUBLEASE UPON DELIVERING
WRITTEN NOTICE TO SUBLESSOR OF SUBLESSOR’S ELECTION TO DO SO, EITHER AS PART OF
OR SEPARATE FROM THE WRITTEN NOTICE PROVIDED FOR ABOVE IN THIS
SECTION 2.1(D)(I).  IF SUBLESSEE EXERCISES THIS RIGHT OF TERMINATION, THEN THIS
SUBLEASE SHALL TERMINATE AND BECOME OF NO FURTHER FORCE OR EFFECT EFFECTIVE ON
THE DATE SPECIFIED BY SUBLESSOR IN THE WRITTEN NOTICE, WHICH DATE SHALL BE NO
SOONER THAN THIRTY (30 DAYS FOLLOWING THE DELIVERY BY SUBLESSEE TO SUBLESSOR OF
THE WRITTEN NOTICE OF ITS ELECTION TO TERMINATE THIS SUBLEASE  WITH OR WITHOUT
WRITTEN NOTICE FROM SUBLESSEE TO SUBLESSOR AS PROVIDED FOR IN THIS
SECTION 2.1(D)(I), SUBLESSEE SHALL RECEIVE A CREDIT AGAINST THE BASE RENT AND
ADDITIONAL RENT PAYABLE UNDER THIS SUBLEASE IN THE AMOUNT OF TWO (2) DAYS OF
FREE RENT FOR (A) EVERY DAY FROM THE FIRST PHASE OUTSIDE DELIVERY DATE UNTIL THE
LATER TO OCCUR OF THE FIRST PHASE DELIVERY DATE AND THE DATE THE PRIME LEASE
APPROVALS ARE DELIVERED FOR THE FIRST PHASE, AND (B) EVERY DAY FROM THE SECOND
PHASE OUTSIDE DELIVERY DATE UNTIL THE SECOND PHASE DELIVERY DATE, WITH RESPECT
TO THE SECOND PHASE.  NOTHING HEREIN SHALL LIMIT SUBLESSEE’S RIGHT TO BE AWARDED
ITS ATTORNEYS FEES AND COSTS IN ENFORCING THIS PROVISION.

 

(II)                                  SUBLESSOR SHALL KEEP SUBLESSEE PROMPTLY
INFORMED OF ALL DEVELOPMENTS IN CONNECTION WITH THE CONSTRUCTION OF THE
SUBLESSOR’S WORK FOR EACH PHASE, INCLUDING PERIODIC UPDATES (WRITTEN PROGRESS
REPORTS) AS TO THE STATUS OF CONSTRUCTION, CITY INSPECTIONS AND DEVELOPMENTS
RELATING TO THE BUILD-OUT OF THE SUBLEASED PREMISES SUCH THAT SUBLESSEE WILL BE
ABLE TO ACCURATELY MEASURE THE PROGRESS AND COMPLETION OF SUCH WORK.  SUBLESSEE
SHALL BE ENTITLED TO SEND A REPRESENTATIVE TO ATTEND ALL MEETINGS REGARDING
CONSTRUCTION AND SCHEDULING.  IN ADDITION, SUBLESSOR SHALL USE ALL COMMERCIALLY
REASONABLE EFFORTS TO PROVIDE TO SUBLESSEE FIFTEEN (15) DAYS’ ADVANCE NOTICE AS
TO THE EXPECTED DELIVERY DATE OF THE FIRST PHASE AND SECOND PHASE, RESPECTIVELY.

 

(III)                               IN THE EVENT OF A TERMINATION OF THIS
SUBLEASE PURSUANT TO THIS SECTION 2.1, SUBLESSEE SHALL SURRENDER THAT PORTION OF
THE SUBLEASED PREMISES SO TERMINATED IN ACCORDANCE WITH THE PROVISIONS OF THIS
SECTION 2.1 AND IN ACCORDANCE WITH THE TERMS AND PROVISIONS OF THIS SUBLEASE
WITH RESPECT TO VACATION AND SURRENDER OF THE SUBLEASED PREMISES.  THIS SUBLEASE
SHALL THEREUPON TERMINATE WITH RESPECT TO SUCH PORTIONS OF THE SUBLEASED
PREMISES INCLUDED IN THE TERMINATION NOTICE AS OF THE EFFECTIVE DATE OF SUCH
TERMINATION AS IF SUCH DATE WERE THE ORIGINALLY SPECIFIED EXPIRATION DATE FOR
SUCH PORTION OF THE SUBLEASED PREMISES, AND SUBLESSOR AND SUBLESSEE SHALL EACH
BE RELEASED FROM ANY LIABILITY, RESPONSIBILITY OR OBLIGATION ACCRUING THEREAFTER
WITH RESPECT TO SUCH TERMINATED PORTIONS OF THE SUBLEASED PREMISES.

 

(E)                                  WORK BY SUBLESSEE.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, SUBLESSEE SHALL HAVE THE RIGHT TO
ENTER THE SUBLEASED PREMISES AT ANY TIME FOLLOWING THE EFFECTIVE DATE TO PERFORM
SUCH WORK (“SUBLESSEE’S WORK”) AS SUBLESSEE DEEMS NECESSARY TO INSTALL ITS
FURNITURE, FIXTURES AND EQUIPMENT AND/OR TO

 

6

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PERFORM THE ALTERATIONS DESCRIBED ON THE SCHEDULE OF SUBLESSEE’S WORK ATTACHED
HERETO AS EXHIBIT “E”, INCLUDING THE “SCIF WORK” (AS HEREINAFTER DEFINED).  IN
PERFORMING SUBLESSEE’S WORK, SUBLESSEE SHALL USE COMMERCIALLY REASONABLE EFFORTS
TO AVOID ANY INTERFERENCE WITH THE PERFORMANCE BY SUBLESSOR OF THE SUBLESSOR’S
WORK THEN BEING CONDUCTED.  SUBLESSOR AND SUBLESSEE SHALL COOPERATE WITH EACH
OTHER TO EXPEDITE AND TO AVOID INTERFERING WITH THE WORK BEING PERFORMED BY EACH
OF THEM.  THE PARTIES ACKNOWLEDGE AND AGREE THAT SUBLESSEE SHALL HAVE THE RIGHT,
NOTWITHSTANDING ANY OTHER PROVISION OF THIS SUBLEASE AND/OR THE PRIME LEASE TO
THE CONTRARY, TO CAUSE CERTAIN IMPROVEMENTS (THE “SCIF WORK”) TO BE MADE WITHIN
THOSE PORTIONS OF THE SUBLEASED PREMISES DEPICTED AS “SCIF AND “SECRET SAR” ON
THE FLOOR PLAN ATTACHED HERETO AND MADE A PART HEREOF AS EXHIBIT “G” (THE SCIF
AREAS”) AS NECESSARY TO COMPLETE WITHIN THE SCIF AREAS EACH OF THE REQUIREMENTS
DESCRIBED ON EXHIBIT “E” ATTACHED HERETO AND MADE A PART HEREOF AND HEREINAFTER
REFERRED TO AS THE “SCIF SCOPE OF WORK.” SUBLESSEE AGREES TO PERFORM SUCH WORK
IN A GOOD AND WORKMANLIKE MANNER.

 

(F)                                    APPROVALS BY PRIME LESSOR AND ITS
LENDER.  AS OF THE EFFECTIVE DATE, SUBLESSOR REPRESENTS AND WARRANTS TO
SUBLESSEE THAT (A) SUBLESSOR HAS OBTAINED ALL APPROVALS (INCLUDING WAIVERS OF
TIME PERIODS FOR CONSENTS, IF APPLICABLE) REQUIRED TO BE OBTAINED BY SUBLESSOR
(WITH RESPECT TO THIS SUBLEASE AND ITS TERMS) UNDER THE TERMS OF THE PRIME
LEASE, INCLUDING PRIME LESSOR’S WRITTEN CONSENT (THE “MASTER LANDLORD CONSENT”)
TO THIS SUBLEASE AND THE TERMS HEREOF AND THE WORK PERMITTED TO BE PERFORMED BY
SUBLESSOR AND SUBLESSEE PURSUANT TO THE TERMS OF THIS SUBLEASE AND (B) THE PRIME
LEASE IS FREE FROM DEFAULT BY SUBLESSEE AND THAT NO EVENT HAS OCCURRED WITH
NOTICE OR THE PASSAGE OF TIME THAT WOULD CONSTITUTE A DEFAULT BY SUBLESSEE UNDER
THE PRIME LEASE.  UPON REQUEST OF SUBLESSEE, SUBLESSOR SHALL USE ITS
COMMERCIALLY REASONABLE BEST EFFORTS TO PROVIDE TO SUBLESSEE, AS SOON AS
REASONABLY POSSIBLE, THE CONSENT BY LEHMAN BROTHERS REALTY CORPORATION, OR ITS
SUCCESSOR AS FIRST TRUSTEE LENDER ON THE LAND (“LENDER”)  TO THIS SUBLEASE AS
AND TO THE EXTENT REQUIRED BY THE TERMS OF LENDER’S AGREEMENTS.

 

2.2                                 OPTION TO EXTEND.  PROVIDED SUBLESSEE IS NOT
IN DEFAULT BEYOND THE EXPIRATION OF ANY APPLICABLE NOTICE OR GRACE PERIOD,
SUBLESSEE SHALL HAVE TWO (2) OPTIONS TO EXTEND THE TERM OF THIS SUBLEASE AS TO
EITHER OR BOTH OF THE PHASES (EACH AN “EXTENSION OPTION”) FOR ONE (1) YEAR
EACH.  IF SUBLESSEE ELECTS TO EXERCISE AN EXTENSION OPTION, SUBLESSEE SHALL
EXERCISE SUCH EXTENSION OPTION BY PROVIDING SUBLESSOR WITH PRIOR WRITTEN NOTICE
(THE “EXTENSION NOTICE”) SPECIFYING THE PHASE(S) FOR WHICH SUBLESSEE ELECTS TO
EXTEND THE INITIAL SUBLEASE TERM OR EXTENSION TERM, AS APPLICABLE, AND THE
EXPIRATION DATE OF THE TERM AS SO EXTENDED (THE “EXTENSION TERM”), AS TO EACH
APPLICABLE PHASE IN THE EXTENSION NOTICE.  SUCH EXTENSION NOTICE SHALL BE GIVEN
NOT LESS THAN SIX (6) MONTHS PRIOR TO THE EXPIRATION OF THE INITIAL SUBLEASE
TERM OR, AS APPLICABLE, THE FIRST EXTENSION TERM.  THE BASE RENT FOR THE
EXTENSION TERM OF ANY PHASE SHALL BE EQUAL TO ONE HUNDRED FOUR PERCENT (104%) OF
THE BASE RENT PAYABLE FOR SUCH PORTION OF THE SUBLEASED PREMISES DURING THE
IMMEDIATELY PRECEDING TERM (INITIAL SUBLEASE TERM OR FIRST EXTENSION TERM, AS
APPLICABLE).  NOTWITHSTANDING SUCH RIGHT, IN THE EVENT SUBLESSEE ELECTS TO
OCCUPY LESS THAN ALL OF THE SUBJECT BUILDING, THE PARTIES SHALL AGREE UPON SUCH
DRYWALL AND PAINT WORK AS MAY BE REQUIRED TO DEMISE AND SEPARATE THE FIRST FLOOR
FROM THE SECOND FLOOR IN ACCORDANCE WITH APPLICABLE LAWS AND REGULATIONS TO
RENDER THE SAME USABLE BY MORE THAN ONE TENANT.  IN THE EVENT THE PARTIES REACH
AGREEMENT AS TO THE SCOPE OF THE WORK REQUIRED TO SO DEMISE

 

7

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THE SUBJECT BUILDING (THE “AGREED UPON DEMISING WORK”) WITHIN THIRTY (30) DAYS
FOLLOWING THE DELIVERY BY SUBLESSEE OF ITS ELECTION TO EXTEND THE INITIAL TERM
OF THE SUBLEASE FOR LESS THAN THE ENTIRE SUBJECT BUILDING, AND SUBLESSEE FAILS
TO COMPLETE THE AGREED UPON DEMISING WORK ON OR PRIOR TO THE EXPIRATION OF SUCH
SIX (6) MONTH PERIOD, THEN SUBLESSEE SHALL CONTINUE TO PAY BASE RENT TO
SUBLESSOR FOR THE ENTIRE SUBJECT BUILDING UNTIL THE DATE THE AGREED UPON
DEMISING WORK HAS BEEN SUBSTANTIALLY COMPLETED.  IF THE AGREED UPON DEMISING
WORK IS NOT DETERMINED PRIOR TO THE EXPIRATION OF SUCH THIRTY (30) DAY PERIOD,
THEN SUBLESSOR SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, AT ITS SOLE COST
AND EXPENSE, TO PERFORM SUCH DEMISING WORK AS SUBLESSOR DEEMS APPROPRIATE AND,
WHETHER OR NOT SUBLESSOR ELECTS TO DO SO, SUBLESSEE’S ONLY OBLIGATION SHALL BE
TO PERFORM SUCH WORK WHEN AND IF IT IS DETERMINED PROVIDED SUCH DETERMINATION IS
MADE NO LATER THAN 6 MONTHS PRIOR TO THE EXPIRATION OF THE EXTENSION TERM.

 

2.3                                 HOLDING OVER.  SUBLESSEE SHALL HAVE THE
RIGHT TO HOLDOVER IN THE SUBLEASED PREMISES PROVIDED SUBLESSEE DELIVERS TO
SUBLESSOR A WRITTEN NOTICE OF INTENT TO DO SO (THE “HOLDOVER NOTICE”) NOT LATER
THAN SIXTY (60) DAYS PRIOR TO THE EXPIRATION DATE OR THE EXPIRATION DATE OF ANY
EXTENSION TERM.  THE HOLDOVER NOTICE SHALL SPECIFY THE LENGTH OF TIME THAT
SUBLESSEE REQUIRES TO REMAIN IN THE SUBLEASED PREMISES (THE “PERMITTED HOLDOVER
PERIOD”) WHICH SHALL NOT EXTEND BEYOND THE LESSER OF SIX (6) MONTHS OR THE
INITIAL TERM OF THE PRIME LEASE (OR THE EXTENDED TERM, IF ANY, WHICH SUBLESSOR
ADVISES IS NOT ANTICIPATED).  ANY SUCH HOLDOVER DURING THE PERMITTED HOLDOVER
PERIOD SHALL BE UPON THE SAME TERMS AND CONDITIONS AS WERE APPLICABLE DURING THE
LAST MONTH OF THE INITIAL SUBLEASE TERM OR EXTENSION TERM, AS APPLICABLE;
PROVIDED, HOWEVER, THAT THE BASE RENT SHALL BE INCREASED TO ONE HUNDRED TWENTY
PERCENT (120%) OF THE BASE RENT IN EFFECT DURING THE LAST MONTH OF THE INITIAL
SUBLEASE TERM OR EXTENSION TERM, AS APPLICABLE.  ANY HOLDING OVER BY SUBLESSEE
BEYOND THE PERMITTED HOLDOVER PERIOD WITH THE CONSENT OF SUBLESSOR SHALL BE
DEEMED A MONTH-TO-MONTH TENANCY AT ONE HUNDRED FIFTY PERCENT (150%) OF THE BASE
RENT IN EFFECT DURING THE LAST MONTH OF THE INITIAL SUBLEASE TERM OR EXTENSION
TERM, AS APPLICABLE.  ANY HOLDING OVER BY SUBLESSEE BEYOND THE PERMITTED
HOLDOVER PERIOD WITHOUT THE CONSENT OF SUBLESSOR SHALL BE DEEMED A TENANCY AT
SUFFERANCE AT ONE HUNDRED SEVENTY-FIVE PERCENT (175%) OF THE BASE RENT IN EFFECT
DURING THE LAST MONTH OF THE INITIAL SUBLEASE TERM OR EXTENSION TERM, AS
APPLICABLE.  TO THE EXTENT SUBLESSEE HOLDS OVER IN THE SUBLEASED PREMISES BEYOND
THE PERMITTED HOLDOVER PERIOD WITHOUT OBTAINING SUBLESSOR’S CONSENT, SUBLESSEE
SHALL DEFEND, INDEMNIFY AND HOLD SUBLESSOR HARMLESS FROM AND AGAINST ALL LOSS OR
LIABILITY RESULTING FROM OR ARISING OUT OF SUBLESSEE’S FAILURE TO SURRENDER THE
SUBLEASED PREMISES BY SUCH DATE, INCLUDING, BUT NOT LIMITED TO, ANY AMOUNTS
REQUIRED TO BE PAID TO ANY SUBLESSEE OR PROSPECTIVE SUBLESSEE WHO WAS TO HAVE
OCCUPIED THE SUBLEASED PREMISES AFTER SAID TERMINATION OR EXPIRATION AND ANY
RELATED ATTORNEYS’ FEES AND BROKERAGE COMMISSIONS INCURRED AS A RESULT OF
SUBLESSEE’S FAILURE TO VACATE THE SUBLEASED PREMISES ON OR BEFORE THE EXPIRATION
OF THE PERMITTED HOLDOVER PERIOD.  NOTWITHSTANDING THE FOREGOING, IN THE EVENT
OF A HOLDOVER NOT PERMITTED OR EXPRESSLY AUTHORIZED PURSUANT TO THE TERMS OF
THIS SECTION 2.2 ABOVE, WHICH ENDS ON OR BEFORE THE APPLICABLE TERM OF THE PRIME
LEASE, SUBLESSEE SHALL NOT BE LIABLE TO SUBLESSOR FOR CONSEQUENTIAL DAMAGES FOR
ITS FAILURE TO VACATE THE APPLICABLE PORTION OF THE SUBLEASED PREMISES.  NOTHING
HEREIN SHALL BE DEEMED TO BE SUBLESSOR’S CONSENT TO A HOLDING OVER BY SUBLESSEE
BEYOND THE PERMITTED HOLDOVER PERIOD.

 

2.4                                 SUBLESSEE’S OPTION TO TERMINATE.  COMMENCING
ON THE DATE THAT IS (I) TWENTY-FOUR (24) CALENDAR MONTHS FOLLOWING THE SECOND
PHASE DELIVERY DATE, SUBLESSEE SHALL

 

8

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

 

HAVE THE RIGHT (THE “EARLY TERMINATION RIGHT”) TO ELECT TO TERMINATE THIS
SUBLEASE AS TO ALL OR ANY OF SUCH PHASES, IF EITHER OF THE FOLLOWING
CIRCUMSTANCES OCCUR: (I) ANY CONTRACT ENTERED INTO BETWEEN SUBLESSEE AND THE
UNITED STATES GOVERNMENT THAT SUBLESSEE IS USING THE SUBLEASED PREMISES TO
SUPPORT IS TERMINATED, NOT RENEWED, REPLACED BY ANOTHER GOVERNMENT CONTRACT
AND/OR MODIFIED SO THAT THE FUNDING BY THE UNITED STATES GOVERNMENT OF THE SUMS
REQUIRED TO BE PAID THEREUNDER IS REDUCED BY FIFTY PERCENT (50%) OR MORE; OR
(II) THE UNITED STATES GOVERNMENT EXPRESSLY DIRECTS A RELOCATION OF THE PLACE OF
PERFORMANCE OF THE SUCH CONTRACT WHICH RESULTS IN A REDUCTION OF THE CONTRACT
PRICE PERFORMED AT THE SITE OF THE SUBLEASED PREMISES BY AN AMOUNT OF FIFTY
PERCENT (50%) OR MORE.

 

(A)                                  SUBLESSEE’S EARLY TERMINATION RIGHT SHALL
BE EXERCISED BY SUBLESSEE BY PROVIDING TO SUBLESSOR AT LEAST ONE HUNDRED EIGHTY
(180) DAYS’ PRIOR WRITTEN NOTICE TO SUBLESSOR OF SUBLESSEE’S INTENT TO EXERCISE
THIS RIGHT OF EARLY TERMINATION ACCOMPANIED BY REASONABLE EVIDENCE THAT ONE OF
THE ABOVE REFERENCED CONDITIONS HAS OCCURRED AND DESIGNATION OF THE EFFECTIVE
DATE OF SUCH TERMINATION.

 

(B)                                 SUBLESSEE MAY EXERCISE ITS EARLY TERMINATION
RIGHT BY REDUCING THE SUBLEASED PREMISES ONLY IN THE FOLLOWING COMBINATIONS: 
(I) ALL OF THE FIRST FLOOR AND SECOND FLOOR; (II) ALL OF THE SECOND FLOOR OR
(III) ALL OF THE FIRST FLOOR.

 

(C)                                  TO THE EXTENT THAT THE EARLY TERMINATION
RIGHT IS EXERCISED WITH RESPECT TO THE SECOND FLOOR PRIOR TO THE EXPIRATION
DATE, SUBLESSEE SHALL PAY TO SUBLESSOR AN AMOUNT EQUAL TO THE SUM OF THE THEN
UNAMORTIZED PORTION OF (I) THE TOTAL COST, NOT TO EXCEED FOUR HUNDRED NINETY-ONE
THOUSAND SEVEN HUNDRED SEVENTY-FIVE DOLLARS ($490,050.00), OF THE FIRST PHASE
SUBLESSOR’S WORK PLUS (II) THE BROKERAGE COMMISSIONS FOR THE SECOND FLOOR.  (THE
BROKERAGE COMMISSIONS FOR THE SECOND FLOOR SHALL EQUAL THE PRODUCT OF THE DOLLAR
AMOUNT OF THE BROKERAGE COMMISSIONS FOR THE SUBLEASED PREMISES TIMES 32.67.) 
SUCH TERMINATION PAYMENT SHALL BE MADE IN FULL NO LATER THAN THIRTY (30)
BUSINESS DAYS AFTER THE EFFECTIVE DATE OF SUCH TERMINATION.  THE UNAMORTIZED
PORTION OF THE FIRST PHASE SUBLESSOR’S WORK AND BROKERAGE COMMISSION SHALL BE
THE DOLLAR AMOUNT OF THE REMAINING PRINCIPAL BALANCE WHICH WOULD BE DUE AS OF
THE DATE OF TERMINATION OF A LOAN IN AN ORIGINAL PRINCIPAL AMOUNT EQUAL TO THE
TOTAL DOLLAR AMOUNT OF THE FIRST PHASE SUBLESSOR’S WORK AND BROKERAGE
COMMISSION, AMORTIZED ON AN EVEN MONTHLY PAYMENT BASIS (USING A 30-DAY MONTH,
WITH INTEREST AT THE RATE OF 9% PER ANNUM) OVER THE SCHEDULED TERM OF THE FIRST
PHASE INITIAL TERM.

 

(D)                                 TO THE EXTENT THAT THE EARLY TERMINATION
RIGHT IS EXERCISED WITH RESPECT TO THE FIRST FLOOR PRIOR TO THE EXPIRATION DATE,
SUBLESSEE SHALL PAY TO SUBLESSOR (IN ADDITION TO THE AMOUNT DUE UNDER
SECTION 2.4(C) ABOVE, IF ANY) AN AMOUNT EQUAL TO THE SUM OF THE THEN UNAMORTIZED
PORTION OF (I) THE TOTAL COST, NOT TO EXCEED ONE MILLION EIGHT THOUSAND TWO
HUNDRED TWENTY-FIVE DOLLARS ($1,009,950.00), OF THE SECOND PHASE SUBLESSOR’S
WORK PLUS (II) THE BROKERAGE COMMISSIONS FOR THE FIRST FLOOR.  (THE BROKERAGE
COMMISSIONS FOR THE FIRST FLOOR SHALL EQUAL THE PRODUCT OF THE DOLLAR AMOUNT OF
THE BROKERAGE COMMISSIONS FOR THE SUBLEASED PREMISES TIMES 67.33.)  THE
UNAMORTIZED PORTION OF THE SECOND PHASE SUBLESSOR’S WORK AND BROKERAGE
COMMISSION SHALL BE THE DOLLAR AMOUNT OF THE REMAINING PRINCIPAL BALANCE WHICH
WOULD BE DUE AS OF THE DATE OF

 

9

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

 

TERMINATION OF A LOAN IN AN ORIGINAL PRINCIPAL AMOUNT EQUAL TO THE TOTAL DOLLAR
AMOUNT OF THE SECOND PHASE SUBLESSOR’S WORK AND BROKERAGE COMMISSION, AMORTIZED
ON AN EVEN MONTHLY PAYMENT BASIS (USING A 30-DAY MONTH, WITH INTEREST AT THE
RATE OF 9% PER ANNUM) OVER THE SCHEDULED TERM OF THE SECOND PHASE INITIAL TERM;

 

(E)                                  NO LATER THAN THIRTY (30) DAYS FOLLOWING
THE DATE BASE RENT SHALL COMMENCE FOR EACH PHASE, SUBLESSOR SHALL GIVE TO
SUBLESSEE WRITTEN NOTICE OF THE ACTUAL TOTAL COST OF THE SUBLESSOR’S WORK FOR
SUCH PHASE.

 

(F)                                    IN THE EVENT OF ANY SUCH TERMINATION,
SUBLESSEE SHALL SURRENDER THAT PORTION OF THE SUBLEASED PREMISES SO TERMINATED
IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 2.4 AND IN ACCORDANCE WITH THE
TERMS AND PROVISIONS OF THIS SUBLEASE WITH RESPECT TO VACATION AND SURRENDER OF
THE SUBLEASED PREMISES. THIS SUBLEASE SHALL THEREUPON TERMINATE WITH RESPECT TO
SUCH PORTIONS OF THE SUBLEASED PREMISES INCLUDED IN THE TERMINATION NOTICE AS OF
THE EFFECTIVE DATE OF SUCH TERMINATION AS IF SUCH DATE WERE THE ORIGINALLY
SPECIFIED EXPIRATION DATE FOR SUCH PORTION OF THE SUBLEASED PREMISES, AND
SUBLESSOR AND SUBLESSEE SHALL EACH BE RELEASED FROM ANY LIABILITY,
RESPONSIBILITY OR OBLIGATION ACCRUING THEREAFTER WITH RESPECT TO SUCH TERMINATED
PORTIONS OF THE SUBLEASED PREMISES.  NOTWITHSTANDING THE FORGOING, IN THE EVENT
SUBLESSEE ELECTS TO PARTIALLY TERMINATE THIS SUBLEASE, THE PARTIES SHALL AGREE
UPON THE WORK REQUIRED TO DEMISE THE SUBJECT BUILDING IN ACCORDANCE WITH
APPLICABLE LAWS AND REGULATIONS TO RENDER THE SAME USABLE BY MORE THAN ONE
TENANT AND IN THE EVENT THE PARTIES REACH AGREEMENT AS TO THE SCOPE OF THE WORK
REQUIRED TO SO DEMISE THE SUBJECT BUILDING (THE “AGREED UPON DEMISING WORK”)
WITHIN THIRTY (30) DAYS FOLLOWING THE EXERCISE OF THE EARLY TERMINATION RIGHT,
AND SUBLESSEE FAILS TO COMPLETE THE AGREED UPON DEMISING WORK ON OR PRIOR TO THE
EXPIRATION OF SUCH SIX (6) MONTH PERIOD, THEN SUBLESSEE SHALL CONTINUE TO PAY
BASE RENT TO SUBLESSOR FOR THE ENTIRE SUBJECT BUILDING UNTIL THE DATE THE AGREED
UPON DEMISING WORK HAS BEEN SUBSTANTIALLY COMPLETED.  IF THE AGREED UPON
DEMISING WORK IS NOT DETERMINED PRIOR TO THE EXPIRATION OF SUCH THIRTY (30) DAY
PERIOD, THEN SUBLESSOR SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, AT ITS SOLE
COST AND EXPENSE, TO PERFORM SUCH DEMISING WORK AS SUBLESSOR DEEMS APPROPRIATE
AND, WHETHER OR NOT SUBLESSOR ELECTS TO DO SO, SUBLESSEE’S ONLY OBLIGATION SHALL
BE TO PERFORM SUCH WORK WHEN AND IF IT IS DETERMINED PROVIDED SUCH DETERMINATION
IS MADE NO LATER THAN 6 MONTHS PRIOR TO THE EXPIRATION OF THE EXTENSION TERM.

 

3.                                       RENT.

 

3.1                                 BASE RENT.  FROM AND AFTER THE SECOND PHASE
DELIVERY DATE, SUBLESSEE SHALL PAY TO SUBLESSOR BASE RENT (“BASE RENT”) BASED
UPON THE FOLLOWING SCHEDULE:

 

10

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

 

Period

 

Class

 

Square Feet

 

Amt/sq. ft.
Per Month

 

Aggregate
Amount

 

Total Monthly
Amount

 

Interim Period (prior to Second Phase Delivery Date)

 

 

Office

 

30,385

 

$

1.40

 

$

42,539

 

$

  45,284

 

 

Warehouse

 

4,990

 

$

0.55

 

$

2,745

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Months 1-12 (from Second Phase Delivery Date)

 

 

Office

 

95,925

 

$

1.40

 

$

134,295

 

 

 

 

Warehouse

 

12,365

 

$

0.55

 

$

6,801

 

$

141,096

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Months 13-24

 

 

Office

 

95,925

 

$

1.4490

 

$

138,995

 

 

 

 

Warehouse

 

12,365

 

$

0.5693

 

$

7,039

 

$

146,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Months 25-36

 

 

Office

 

95,925

 

$

1.4997

 

$

143,860

 

 

 

 

Warehouse

 

12,365

 

$

0.5892

 

$

7,285

 

$

151,145

 

 

Except as provided below or in Section 2.1 above, Base Rent shall be payable
monthly in advance on the first day of each calendar month and shall be sent to
Sublessor at the rent payment address set forth in Section 3.9 below, or such
other address as may be designated by Sublessor.  For any month in which
Sublessee’s obligation to pay Base Rent is for less than a full month, then such
rent shall be prorated for such partial month.  On the first day of the Initial
Term of each Phase, Sublessee shall pay to Sublessor Base Rent in advance equal
to the first full calendar month’s Base Rent due for such Phase, notwithstanding
that the Base Rent for such Phase may commence other than on the first day of
the calendar month.  The installment of Base Rent so paid shall be credited to
the first full calendar month following the applicable Rent Commencement Date. 
The Base Rent due for the partial month between the applicable Rent Commencement
Date and the first day of first full calendar month thereafter shall be paid in
arrears no later than thirty (30) days after the amount of Base Rent due for
such partial month is determined and receipt by Sublessee of an invoice
therefore from Sublessor.   The Base Rent for the third calendar month and each
month thereafter shall be paid on the first day of the month in the full amount
of the Base Rent due for such calendar month.  Base Rent and Additional Rent (as
that term is defined in Section 3.3 below) shall sometimes herein be referred to
as “Rent”.

 

3.2                                 RENT ABATEMENT.  IF DURING THE INITIAL
SUBLEASE TERM, OR DURING THE EXTENSION TERM, SUBLESSOR’S RENT ABATES PURSUANT TO
THE PROVISIONS OF THE PRIME LEASE, THEN SUBLESSEE’S RENT UNDER THIS SUBLEASE
SHALL BE ABATED IN ACCORDANCE WITH THE PROVISIONS OF THIS SUBLEASE AND THE PRIME
LEASE.

 

11

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3.3                                 ADDITIONAL RENT.

 

(A)                                  SUBLESSEE’S OBLIGATION.  IN ADDITION TO
BASE RENT, SUBLESSEE SHALL PAY SUBLESSOR AS ADDITIONAL RENT (“ADDITIONAL RENT”)
AN AMOUNT EQUAL TO THE SUM OF: (1) SUBLESSEE’S PRO RATA SHARE (“PROJECT EXPENSE
SHARE”) OF PROJECT OPERATING EXPENSES FOR EACH PHASE OF THE SUBLEASED PREMISES
AS SET FORTH BELOW AND (2) SUBLESSEE’S PRO RATA SHARE (“BUILDING EXPENSE SHARE”)
OF BUILDING OPERATING EXPENSES.  SUBLESSEE’S PROJECT EXPENSE SHARE AND BUILDING
EXPENSE SHARE SHALL VARY IN ACCORDANCE WITH THE AREA OF THE SUBLEASED PREMISES. 
SUBLESSEE’S PROJECT EXPENSE SHARE SHALL BE EQUAL TO THE RATIO OF THE RENTABLE
AREA OF THE SUBLEASED PREMISES, AS THE SAME MAY CHANGE, TO THE TOTAL RENTABLE
AREA OF THE PROJECT.  THE TOTAL RENTABLE AREA OF THE PROJECT IS AGREED TO BE
145,249 SQ. FT.  SUBLESSEE’S BUILDING EXPENSE SHARE SHALL BE EQUAL TO THE RATIO
OF THE RENTABLE AREA OF THE SUBLEASED PREMISES, AS THE SAME MAY CHANGE, TO THE
TOTAL RENTABLE AREA OF THE SUBJECT BUILDING.  THE TOTAL RENTABLE AREA OF THE
SUBJECT BUILDING IS AGREED TO BE 108,290 SQ. FT.  INITIALLY, SUBLESSEE’S PROJECT
EXPENSE SHARE AND BUILDING EXPENSE SHARE SHALL BE AS SET FORTH IN TABLE 3.3(A)
BELOW:

 

TABLE 3.3(a)

 

SUBLESSEE’S INITIAL PROJECT AND BUILDING EXPENSE SHARES

 

 

 

Period

 

Project Expense Share

 

Building Expense
Share

 

1

 

Interim Period (prior to Second Phase Delivery Date)

 

24.4

%

32.7

%

 

 

 

 

 

 

 

 

2

 

Month 1 (from and after Second Phase Delivery Date) and thereafter until
rentable area of Subleased Premises changes

 

74.6

%

100.0

%

 

(B)                                 PROJECT OPERATING EXPENSES.  THE TERM
“PROJECT OPERATING EXPENSES” MEANS THE COSTS AND EXPENSES INCURRED BY SUBLESSOR
DURING THE “FULL SUBLEASE TERM” (CONSISTING OF THE INITIAL SUBLEASE TERM,
TOGETHER WITH ANY EXTENSION TERM, AND OTHERWISE AS THE SAME MAY BE EXTENDED OR
RENEWED), THAT ARE SHARED BY THE OCCUPANTS OF THE PROJECT FOR REAL ESTATE TAXES
UNDER SECTION 10.1 OF THE PRIME LEASE (ATTRIBUTABLE TO SUCH FULL SUBLEASE TERM),
INSURANCE PREMIUMS PAYABLE BY SUBLESSOR UNDER SECTION 20.1 OF THE PRIME LEASE
(ATTRIBUTABLE TO SUCH FULL SUBLEASE TERM AND EXCLUDING PREMIUMS FOR EARTHQUAKE
INSURANCE), UTILITIES UNDER SECTION 16 OF THE PRIME LEASE (ATTRIBUTABLE TO SUCH
FULL SUBLEASE TERM), COSTS INCURRED DURING THE FULL SUBLEASE TERM TO MAINTAIN
AND REPAIR THE PROJECT COMMON AREA INCLUDING THE PARKING FACILITIES AND
LANDSCAPED AREAS IN THE MANNER REQUIRED BY SECTION 15.1 BELOW, THE COST OF
OPERATING THE CENTRAL PLANT, EXTERIOR ILLUMINATION IN THE PROJECT COMMON AREA,
TRASH REMOVAL FOR THE PROJECT, THE MAINTENANCE

 

12

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

 

AND REPAIR OF THE PROJECT COMMON AREA, INCLUDING RESTRIPING, AND THE OTHER LINE
ITEM EXPENSES SET FORTH IN THE 2004 PROJECT OPERATING EXPENSE BUDGET DELIVERED
BY SUBLESSOR TO SUBLESSEE PRIOR TO THE DATE OF THIS SUBLEASE, BUT EXCLUDING ANY
LINE ITEM FOR WORK TO BE PERFORMED BY SUBLESSEE UNDER THIS SUBLEASE (INCLUDING
THE SUBLESSEE’S OBLIGATIONS), THE BUILDING OPERATING EXPENSES, ALL EXPENSES
INCURRED IN CONNECTION WITH OR RELATING TO THE ADJACENT BUILDING, AND THE
OPERATING EXPENSE EXCLUSIONS LISTED IN SECTION 3.4 BELOW.

 

(C)                                  BUILDING OPERATING EXPENSES.  THE TERM
“BUILDING OPERATING EXPENSES” MEANS THE COSTS AND EXPENSES INCURRED BY SUBLESSOR
DURING THE “FULL SUBLEASE TERM” (CONSISTING OF THE INITIAL SUBLEASE TERM,
TOGETHER WITH ANY EXTENSION TERM, AND OTHERWISE AS THE SAME MAY BE EXTENDED OR
RENEWED), THAT ARE SHARED BY THE OCCUPANTS OF THE SUBJECT BUILDING COSTS TO
MAINTAIN AND REPAIR THE SUBJECT BUILDING IN ACCORDANCE WITH THE TERMS OF
SECTION 15.1 BELOW AND THE OTHER LINE ITEM EXPENSES SET FORTH IN THE 2004
BUILDING OPERATING EXPENSE BUDGET DELIVERED BY SUBLESSOR TO SUBLESSEE PRIOR TO
THE DATE OF THIS SUBLEASE, BUT EXCLUDING ANY LINE ITEM FOR WORK TO BE PERFORMED
BY SUBLESSEE PURSUANT TO THE TERMS OF THIS SUBLEASE, ALL PROJECT OPERATING
EXPENSES, AND THE OPERATING EXPENSE EXCLUSIONS LISTED IN SECTION 3.4 BELOW.

 

(D)                                 ALLOCATION.  PROJECT OPERATING EXPENSES AND
BUILDING OPERATING EXPENSES SHALL BE ALLOCATED TO THE SUBLEASED PREMISES AS IF
THE BUILDINGS WERE EACH ONE HUNDRED PERCENT (100%) OCCUPIED AND IMPROVED AND AS
IF ALL SUBLESSEES AND OCCUPANTS WERE PAYING FULL RENT, AS CONTRASTED WITH FREE
RENT, HALF RENT AND THE LIKE.  SUBLESSOR ESTIMATES THAT THE PROJECT OPERATING
EXPENSES AND BUILDING OPERATING EXPENSES INITIALLY PAYABLE BY SUBLESSEE WILL BE
$.28 PER RENTABLE SQUARE FOOT PER MONTH, NOT INCLUDING THE COST OF THE SUBLESSOR
PROVIDED UTILITIES AS PROVIDED IN SECTION 17.2 BELOW.

 

3.4                                 EXCLUSIONS FROM PROJECT OPERATING EXPENSES
AND BUILDING OPERATING EXPENSES.  NOTWITHSTANDING ANYTHING IN THE DEFINITION OF
OPERATING EXPENSES IN THE PRIME LEASE OR THIS SUBLEASE TO THE CONTRARY, NEITHER
PROJECT OPERATING EXPENSES OR BUILDING OPERATING EXPENSES SHALL INCLUDE THE
FOLLOWING, EXCEPT TO THE EXTENT SPECIFICALLY PERMITTED BY A SPECIFIC EXCEPTION
TO THE FOLLOWING:

 

(A)                                  ANY RENT OR OTHER SUMS PAYABLE UNDER OR AS
A RESULT OF A BREACH OF THE PRIME LEASE OR GROUND LEASE RENTAL, EXCEPT FOR THE
ACTUAL AMOUNT OF THE MANAGEMENT FEE PAYABLE TO THE PRIME LESSOR UNDER THE TERMS
OF THE PRIME LEASE;

 

(B)                                 COSTS OF ITEMS CONSIDERED CAPITAL REPAIRS,
REPLACEMENTS, IMPROVEMENTS AND EQUIPMENT UNDER GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES CONSISTENTLY APPLIED OR OTHERWISE (“CAPITAL ITEMS”);

 

(C)                                  RENTALS FOR ITEMS (EXCEPT WHEN NEEDED IN
CONNECTION WITH NORMAL REPAIRS AND MAINTENANCE OF PERMANENT SYSTEMS) WHICH IF
PURCHASED, RATHER THAN RENTED, WOULD CONSTITUTE A CAPITAL ITEM WHICH IS
SPECIFICALLY EXCLUDED IN SUBSECTION 3.4(B) ABOVE (EXCLUDING, HOWEVER, EQUIPMENT
NOT AFFIXED TO THE BUILDINGS WHICH IS USED IN PROVIDING JANITORIAL OR SIMILAR
SERVICES FOR ANY BUILDING);

 

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(D)                                 COSTS INCURRED BY SUBLESSOR FOR THE REPAIR
OF DAMAGE TO THE BUILDINGS AND PARKING FACILITIES TO THE EXTENT THAT SUBLESSOR
IS OR SHOULD BE REIMBURSED BY INSURANCE PROCEEDS AND COSTS OF ALL CAPITAL
REPLACEMENTS, REGARDLESS OF WHETHER SUCH REPAIRS ARE COVERED BY INSURANCE AND
COST OF EARTHQUAKE REPAIRS IN EXCESS OF TWENTY FIVE THOUSAND DOLLARS
($25,000.00) PER EARTHQUAKE (WHICH FOR THIS PURPOSE, AN EARTHQUAKE IS DEFINED
COLLECTIVELY AS THE INITIAL EARTHQUAKE AND THE AFTERSHOCKS THAT RELATE TO SUCH
INITIAL EARTHQUAKE);

 

(E)                                  INSURANCE DEDUCTIBLES IN EXCESS OF $10,000
PER YEAR FOR NORMAL CASUALTIES AND AMOUNTS WHICH ARE IN EXCESS OF $1.00 PER
RENTABLE SQUARE FOOT OF THE SUBLEASED PREMISES IN ANY YEAR FOR DAMAGE CAUSED BY
FLOODS, HURRICANES, TORNADOES, AND/OR TERRORIST ACTS;

 

(F)                                    COSTS, INCLUDING PERMIT, LICENSE AND
INSPECTION COSTS, INCURRED WITH RESPECT TO THE INSTALLATION OF SUBLESSEE’S OR
OTHER OCCUPANTS’ IMPROVEMENTS IN THE BUILDINGS OR INCURRED IN RENOVATING OR
OTHERWISE IMPROVING, DECORATING, PAINTING OR REDECORATING VACANT SPACE FOR
SUBLESSEES OR OTHER OCCUPANTS OF THE BUILDINGS;

 

(G)                                 DEPRECIATION, AMORTIZATION AND INTEREST
PAYMENTS, EXCEPT AS PROVIDED HEREIN AND EXCEPT ON MATERIALS, TOOLS, SUPPLIES AND
VENDOR-TYPE EQUIPMENT PURCHASED BY SUBLESSOR ON COMPETITIVE TERMS TO ENABLE
SUBLESSOR TO SUPPLY SERVICES SUBLESSOR MIGHT OTHERWISE CONTRACT FOR WITH A THIRD
PARTY WHERE SUCH DEPRECIATION, AMORTIZATION AND INTEREST PAYMENTS WOULD
OTHERWISE HAVE BEEN INCLUDED IN THE CHARGE FOR SUCH THIRD PARTY’S SERVICES, ALL
AS DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES,
CONSISTENTLY APPLIED, AND WHEN DEPRECIATION OR AMORTIZATION IS PERMITTED OR
REQUIRED, THE ITEM SHALL BE AMORTIZED OVER ITS REASONABLY ANTICIPATED USEFUL
LIFE;

 

(H)                                 MARKETING COSTS, INCLUDING WITHOUT
LIMITATION, LEASING COMMISSIONS, ATTORNEYS’ FEES IN CONNECTION WITH THE
NEGOTIATION AND PREPARATION OF LETTERS, DEAL MEMOS, LETTERS OF INTENT, LEASES,
SUBLEASES AND/OR ASSIGNMENTS, SPACE PLANNING COSTS, AND OTHER COSTS AND EXPENSES
INCURRED IN CONNECTION WITH LEASE, SUBLEASE AND/OR ASSIGNMENT NEGOTIATIONS AND
TRANSACTIONS WITH SUBLESSEE OR PRESENT OR PROSPECTIVE SUBLESSEES, SUBLESSOR OR
OTHER OCCUPANTS OF THE BUILDINGS;

 

(I)                                     EXPENSES IN CONNECTION WITH SERVICES OR
OTHER BENEFITS WHICH ARE NOT OFFERED TO SUBLESSEE OR FOR WHICH SUBLESSEE IS
CHARGED FOR DIRECTLY OR CONTRACTS FOR DIRECTLY;

 

(J)                                     OVERHEAD AND PROFIT INCREMENT PAID TO
PRIME LESSOR OR SUBLESSOR OR TO SUBSIDIARIES OR AFFILIATES OF PRIME LESSOR OR
SUBLESSOR FOR GOODS AND/OR SERVICES IN OR TO THE TO THE EXTENT THE SAME EXCEEDS
THE COSTS OF SUCH GOODS AND/OR SERVICES RENDERED BY UNAFFILIATED THIRD PARTIES
ON A COMPETITIVE BASIS;

 

(K)                                  INTEREST, PRINCIPAL, POINTS AND FEES ON
DEBTS OR AMORTIZATION ON ANY MORTGAGE OR MORTGAGES OR ANY OTHER DEBT INSTRUMENT
ENCUMBERING THE BUILDINGS, THE

 

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LAND, THE PARKING FACILITIES OR ANY PORTION THEREOF (EXCEPT AS PERMITTED IN
SUBSECTION 3.4(G) ABOVE);

 

(L)                                     PRIME LESSOR’S AND SUBLESSOR’S GENERAL
CORPORATE OVERHEAD AND GENERAL AND ADMINISTRATIVE EXPENSES;

 

(M)                               ANY COMPENSATION PAID TO CLERKS, ATTENDANTS OR
OTHER PERSONS IN COMMERCIAL CONCESSIONS OPERATED BY SUBLESSOR;

 

(N)                                 RENTALS AND OTHER RELATED EXPENSES INCURRED
IN LEASING HVAC SYSTEMS, ELEVATORS OR OTHER EQUIPMENT ORDINARILY CONSIDERED TO
BE CAPITAL ITEMS, EXCEPT FOR (1) EXPENSES IN CONNECTION WITH MAKING MINOR
REPAIRS ON OR KEEPING BUILDING SYSTEMS IN OPERATION WHILE MINOR REPAIRS ARE
BEING MADE AND (2) COSTS OF EQUIPMENT NOT AFFIXED TO THE SUBJECT BUILDING WHICH
IS USED IN PROVIDING JANITORIAL OR SIMILAR SERVICES;

 

(O)                                 ADVERTISING AND PROMOTIONAL EXPENDITURES,
AND COSTS OF SIGNS IN OR ON THE BUILDINGS, THE LAND AND/OR THE PARKING
FACILITIES IDENTIFYING THE OWNER OF THE SAME, SUBLESSOR OR OTHER SUBLESSEES’ OR
OTHER OCCUPANT’S SIGNS;

 

(P)                                 THE COST OF ANY ELECTRIC POWER USED BY ANY
SUBLESSEE OR OTHER OCCUPANT OF ALL OR ANY PORTION OF THE BUILDINGS IN EXCESS OF
THE BUILDING STANDARD AMOUNT (OR, PRIOR TO SEPARATE METERING, OTHERWISE SHOWN TO
BE UNREASONABLY HIGH), OR ELECTRIC POWER COSTS FOR WHICH ANY SUCH SUBLESSEE OR
OTHER OCCUPANT DIRECTLY CONTRACTS WITH THE LOCAL PUBLIC SERVICE COMPANY OR OF
WHICH ANY SUBLESSEE OR OTHER OCCUPANT IS SEPARATELY METERED OR SUB-METERED AND
PAYS DIRECTLY; PROVIDED, HOWEVER, THAT IF ANY SUBLESSEE IN THE BUILDINGS
CONTRACTS DIRECTLY FOR ELECTRIC POWER SERVICE OR IS SEPARATELY METERED OR
SUB-METERED DURING ANY PORTION OF THE RELEVANT PERIOD, THE TOTAL ELECTRIC POWER
COSTS FOR THE BUILDINGS SHALL BE “GROSSED UP” TO REFLECT WHAT THOSE COSTS WOULD
HAVE BEEN HAD EACH SUBLESSEE IN THE BUILDINGS USED THE BUILDING STANDARD AMOUNT
OF ELECTRIC POWER;

 

(Q)                                 SERVICES AND UTILITIES PROVIDED, TAXES
ATTRIBUTABLE TO, AND COSTS INCURRED IN CONNECTION WITH THE OPERATION OF THE
RETAIL, PARKING (TO THE EXTENT SAME SERVICES THE RETAIL OPERATIONS OF THE
BUILDINGS), AND RESTAURANT OPERATIONS, IF ANY, IN THE BUILDINGS, EXCEPT TO THE
EXTENT THE SQUARE FOOTAGE OF SUCH OPERATIONS ARE INCLUDED IN THE RENTABLE SQUARE
FEET OF THE BUILDINGS AND DO NOT EXCEED THE SERVICES, UTILITY AND TAX COSTS
WHICH WOULD HAVE BEEN INCURRED HAD THE RETAIL AND/OR RESTAURANT SPACE BEEN USED
FOR GENERAL OFFICE PURPOSES;

 

(R)                                    COSTS INCURRED IN CONNECTION WITH
UPGRADING OR MODIFYING THE BUILDINGS, THE LAND AND/OR THE PARKING FACILITIES
AND/OR TO RENDER THE SAME IN COMPLIANCE WITH LIFE, FIRE AND SAFETY CODES,
ORDINANCES, STATUTES OR OTHER LAWS IN EFFECT PRIOR TO THE SECOND PHASE DELIVERY
DATE, INCLUDING, WITHOUT LIMITATION, THE ADA, INCLUDING PENALTIES OR DAMAGES
INCURRED DUE TO SUCH NON-COMPLIANCE;

 

(S)                                  TAX PENALTIES INCURRED AS A RESULT OF PRIME
LESSOR’S AND/OR SUBLESSOR’S FAILURE TO MAKE PAYMENTS AND/OR TO FILE ANY TAX OR
INFORMATIONAL RETURNS WHEN DUE, INCLUDING WITHOUT LIMITATION THOSE SHOWN ON THE
PRELIMINARY TITLE REPORT;

 

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(T)                                    EXCEPT FOR THE MANAGEMENT FEES PAYABLE TO
THE PRIME LESSOR UNDER THE PRIME LEASE ON THE DAY OF THE THIS SUBLEASE, ANY
MANAGEMENT FEES COMPUTED BY USING A PERCENTAGE OF GROSS REVENUE IN EXCESS OF THE
LOWER OF (A) ONE PERCENT (1%) AND (B) THE PERCENTAGE USED DURING ANY BASE YEAR;

 

(U)                                 COSTS ARISING FROM THE NEGLIGENCE OR FAULT
OF OTHER SUBLESSEES OR SUBLESSOR OR PRIME LESSOR;

 

(V)                                 NOTWITHSTANDING ANY CONTRARY PROVISION OF
THE PRIME LEASE OR THIS SUBLEASE, INCLUDING, WITHOUT LIMITATION, ANY PROVISION
RELATING TO CAPITAL EXPENDITURES, ANY AND ALL COSTS ARISING FROM THE PRESENCE OF
ASBESTOS OR ANY HAZARDOUS MATERIALS OR SUBSTANCES (AS DEFINED BY APPLICABLE LAWS
IN EFFECT ON THE DATE THIS SUBLEASE IS EXECUTED AND AS SUBSEQUENTLY MODIFIED) IN
OR ABOUT THE SUBLEASED PREMISES OR THE BUILDINGS OR THE LAND INCLUDING, WITHOUT
LIMITATION, HAZARDOUS SUBSTANCES IN THE GROUND WATER OR SOIL, NOT PLACED IN THE
SUBLEASED PREMISES BY SUBLESSEE;

 

(W)                               COSTS ARISING FROM SUBLESSOR’S CHARITABLE OR
POLITICAL CONTRIBUTIONS;

 

(X)                                   COSTS FOR SUBLESSOR’S WORK AND/OR DEFECTS
IN THE BASE, SHELL OR CORE OF THE BUILDINGS, THE PROJECT COMMON AREA, THE
PARKING FACILITIES, THE LAND AND/OR IMPROVEMENTS INSTALLED BY SUBLESSOR, ITS
AGENTS, CONTRACTORS, EMPLOYEES, SUBLESSEES AND/OR INVITEES AND/OR REPAIRS
THEREOF;

 

(Y)                                 COSTS FOR STRUCTURAL DEFECTS, REPAIRS OR
ALTERATIONS TO THE BUILDINGS, THE PARKING FACILITIES AND/OR OTHER IMPROVEMENTS
TO THE LAND, EXCEPT TO THE EXTENT DAMAGE TO THE SAME IS CAUSED BY SUBLESSEE.

 

(Z)                                   COSTS ARISING FROM ANY MANDATORY OR
VOLUNTARY SPECIAL ASSESSMENT ON THE BUILDINGS, THE PARKING FACILITIES OR THE
LAND BY ANY TRANSIT DISTRICT AUTHORITY OR ANY OTHER GOVERNMENTAL ENTITY HAVING
THE AUTHORITY TO IMPOSE SUCH ASSESSMENT IN CONNECTION WITH THE INITIAL
CONSTRUCTION OF THE BUILDINGS;

 

(AA)                            COSTS FOR THE ACQUISITION OF (AS CONTRASTED WITH
THE INCIDENTAL CLEANING AND MAINTENANCE OF) SCULPTURE, PAINTINGS OR OTHER
OBJECTS OF ART;

 

(BB)                          COSTS (INCLUDING IN CONNECTION THEREWITH ALL
ATTORNEYS’ FEES AND COSTS OF SETTLEMENT JUDGMENTS AND PAYMENTS IN LIEU THEREOF)
ARISING FROM CLAIMS, DISPUTES OR POTENTIAL DISPUTES IN CONNECTION WITH POTENTIAL
OR ACTUAL CLAIMS LITIGATION OR ARBITRATIONS PERTAINING TO THE PRIME LEASE,
SUBLESSOR AND/OR THE LAND (AND NOT ARISING OUT OF ANY BREACH OF THIS SUBLEASE BY
SUBLESSEE), INCLUDING WITHOUT LIMITATION ANY SUMS PAYABLE UNDER THE DECLARATION
AND THE SETTLEMENT AGREEMENT DATED AS OF NOVEMBER 21, 1997 BY AND AMONG
SUBLESSOR, AEW/LBA ACQUISITION CO. II, LLC., A CALIFORNIA LIMITED LIABILITY
COMPANY, RANCHO BERNARDO CORPORATE CENTER PROPERTY OWNERS ASSOCIATION AND
RUDOLPH & SIETTEN;

 

(CC)                            COSTS ASSOCIATED WITH THE OPERATION OF THE
BUSINESS OF THE PARTNERSHIP OR ENTITY WHICH CONSTITUTES PRIME LESSOR AND
SUBLESSOR AS THE SAME ARE

 

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DISTINGUISHED FROM THE COSTS OF OPERATION OF THE BUILDINGS, INCLUDING
PARTNERSHIP ACCOUNTING AND LEGAL MATTERS, COSTS OF DEFENDING ANY LAWSUITS WITH
OR CLAIMS BY ANY MORTGAGEE, COSTS OF SELLING, SYNDICATING, FINANCING, MORTGAGING
OR HYPOTHECATING ANY OF PRIME LESSOR’S AND/OR SUBLESSOR’S INTEREST IN THE LAND,
THE BUILDINGS AND/OR THE PROJECT, COSTS OF ANY DISPUTES BETWEEN PRIME LESSOR,
SUBLESSOR AND THEIR EMPLOYEES (IF ANY) NOT ENGAGED IN OPERATION OF THE SUBJECT
BUILDING, DISPUTES OF PRIME LESSOR AND/OR SUBLESSOR AND THEIR EMPLOYEES WITH
MANAGEMENT OF THE BUILDINGS, OR OUTSIDE FEES PAID IN CONNECTION WITH DISPUTES
WITH OTHER SUBLESSEES OR OCCUPANTS OF THE BUILDINGS;

 

(DD)                          ANY SUPPLEMENTAL TAXES ARISING FROM A TRANSFER
OCCURRING PRIOR TO THE DATE OF THIS SUBLEASE AND/OR ANY INCREASES OF, OR
REASSESSMENT IN, REAL PROPERTY TAXES AND ASSESSMENTS IN EXCESS OF TWO PERCENT
(2%) OF THE TAXES FOR THE PREVIOUS YEAR (EXCEPT AS MAY RESULT FROM SUBLESSOR’S
WORK OR SUBLESSEE’S WORK), AND ANY INCREASE IN REAL PROPERTY TAX RESULTING FROM
A CHANGE IN OWNERSHIP OF THE LAND, THE PROJECT AND/OR THE PRIME LEASE OTHER THAN
BY THE PRIME LESSOR OR FROM MAJOR ALTERATIONS, IMPROVEMENTS, MODIFICATIONS OR
RENOVATIONS TO THE BUILDINGS, CONSTRUCTION OF THE PARKING FACILITIES OR FROM
MAJOR ALTERATIONS, IMPROVEMENTS, MODIFICATIONS OR RENOVATIONS TO THE SAME OR THE
LAND (COLLECTIVELY, “TRANSFERS”);

 

(EE)                            COSTS OF ANY “TAP FEES” OR ANY SEWER OR WATER
CONNECTION FEES FOR THE BENEFIT OF ANY PARTICULAR SUBLESSEE OR OTHER OCCUPANT OF
THE BUILDINGS;

 

(FF)                                ANY EXPENSES INCURRED BY SUBLESSOR FOR USE
OF ANY PORTIONS OF THE BUILDINGS TO ACCOMMODATE EVENTS INCLUDING, BUT NOT
LIMITED TO SHOWS, PROMOTIONS, KIOSKS, DISPLAYS, FILMING, PHOTOGRAPHY, PRIVATE
EVENTS OR PARTIES, CEREMONIES AND ADVERTISING BEYOND THE NORMAL EXPENSES
OTHERWISE ATTRIBUTABLE TO PROVIDING BUILDING SERVICES, SUCH AS LIGHTING AND HVAC
TO SUCH PUBLIC PORTIONS OF THE BUILDINGS IN NORMAL OPERATIONS DURING STANDARD
BUILDING HOURS OF OPERATION;

 

(GG)                          ANY ENTERTAINMENT, DINING OR TRAVEL EXPENSES OF
SUBLESSOR FOR ANY PURPOSE;

 

(HH)                          ANY FLOWERS, GIFTS, BALLOONS, ETC. PROVIDED TO ANY
ENTITY WHATSOEVER, INCLUDING, BUT NOT LIMITED TO SUBLESSEE, OTHER SUBLESSEES,
SUBLESSEES, EMPLOYEES, VENDORS, CONTRACTORS, BROKERS, PROSPECTIVE SUBLESSEES AND
AGENTS;

 

(II)                                  ANY “VALIDATED” PARKING FOR ANY ENTITY;

 

(JJ)                                  ANY “FINDERS FEES,” BROKERAGE COMMISSIONS,
JOB PLACEMENT COSTS OR JOB ADVERTISING COST.

 

(KK)                            ANY “ABOVE-STANDARD” CLEANING, INCLUDING, BUT
NOT LIMITED TO CONSTRUCTION CLEANUP OR SPECIAL CLEANINGS ASSOCIATED WITH
PARTIES/EVENTS AND SPECIFIC REQUIREMENTS OF SUBLESSEES OR OTHER BUILDING
OCCUPANTS IN EXCESS OF SERVICE PROVIDED TO SUBLESSEE, INCLUDING RELATED TRASH
COLLECTION, REMOVAL, HAULING AND DUMPING;

 

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(LL)                                  THE COST OF ANY “TENANT RELATIONS”
PARTIES, EVENTS OR PROMOTION NOT CONSENTED TO BY AN AUTHORIZED REPRESENTATIVE OF
SUBLESSEE IN WRITING;

 

(MM)                      “IN-HOUSE” LEGAL AND/OR ACCOUNTING FEES;

 

(NN)                          ANY OTHER EXPENSES WHICH, IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, CONSISTENTLY APPLIED, WOULD NOT
NORMALLY BE TREATED AS OPERATING EXPENSES BY COMPARABLE SUBLESSORS OF COMPARABLE
BUILDINGS.

 

(OO)                          RESERVES FOR BAD DEBTS OR FOR FUTURE IMPROVEMENTS,
REPAIRS, ADDITIONS, ETC.;

 

(PP)                          JANITORIAL EXPENSES, ELECTRICAL EXPENSES AND
TELEPHONE EXPENSES TO ANY OCCUPANT’S PREMISES (AS CONTRASTED WITH JANITORIAL,
ELECTRICAL AND TELEPHONE EXPENSES TO THE COMMON AREAS OF THE BUILDINGS);

 

(QQ)                          ANY EXPENSES FOR REPAIRS OR MAINTENANCE THAT ARE
REIMBURSED THROUGH WARRANTIES OR SERVICE CONTRACTS;

 

(RR)                                COSTS AND EXPENSES INCURRED IN MOVING,
STORING OR DISPOSING OF THE PERSONAL PROPERTY OF FORMER SUBLESSEES;

 

(SS)                            COSTS INCURRED BY SUBLESSOR DUE TO THE VIOLATION
BY SUBLESSOR OF THE PRIME LEASE, THIS SUBLEASE, OR ANY OTHER SUBLESSEE OF THE
TERMS AND CONDITIONS OF ANY LEASE OF SPACE IN THE BUILDINGS;

 

(TT)                                COSTS PAYABLE UNDER THE DECLARATION AND/OR
ANY OTHER RECORDED INSTRUMENT AFFECTING THE LAND; AND

 

(UU)                          RENTS ASSOCIATED WITH AREAS E, F AND G AND THE
CENTRAL PLANT.

 

It is understood that Project Operating Expenses and Building Operating Expenses
shall be reduced by all cash discounts, trade discounts, quantity discounts,
rebates or other amounts received by Sublessor in the purchase of any goods,
utilities, or services in connection with the operation of the Buildings and the
Project.  To the extent that an expense included in Project Operating Expenses
includes an expense related to the Project and not the Building, then the word
“Building” utilized in these exclusions shall mean and be extended to include
the Project.

 

The cost of Sublessee’s performance of its maintenance obligations under this
Sublease shall not be deemed to be a Project Operating Expense or a Building
Operating Expense.

 

3.5                                 PROCEDURE FOR PAYMENT OF OPERATING
EXPENSES.  SUBLESSEE’S PROJECT EXPENSE SHARE AND SUBLESSEE’S BUILDING EXPENSE
SHARE SHALL BE PAYABLE BY SUBLESSEE MONTHLY ON AN ESTIMATED BASIS CONCURRENTLY
WITH THE PAYMENT OF BASE RENT.  SAID ESTIMATED AMOUNT FOR OPERATING EXPENSES
ITEMS OTHER THAN SUBLESSOR PROVIDED UTILITIES FOR THE FIRST CALENDAR YEAR SHALL

 

18

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BE EQUAL TO TWENTY-EIGHT CENTS ($0.28) PER SQUARE FOOT OF RENTABLE AREA WITHIN
THE SUBLEASED PREMISES AS THE SAME SHALL BE INCREASED WITH THE DELIVERY OF EACH
PHASE OR DECREASED IN ACCORDANCE WITH THE TERMS OF THIS SUBLEASE.  THE ACTUAL
AMOUNT OF SUBLESSOR PROVIDED UTILITIES, AS PROVIDED FOR IN SECTION 17.2 BELOW,
SHALL BE PAID SEPARATELY, IN ARREARS, MONTHLY UPON RECEIPT BY SUBLESSEE OF
SUBLESSOR’S INVOICE THEREFORE.  SUBLESSOR SHALL DELIVER TO SUBLESSEE WITHIN
SIXTY (60) DAYS AFTER THE EXPIRATION OF EACH LEASE YEAR OR AS SOON THEREAFTER AS
REASONABLY POSSIBLE A DETAILED STATEMENT OF THE ACTUAL PROJECT OPERATING
EXPENSES AND BUILDING OPERATING EXPENSES FOR THE PRECEDING LEASE YEAR.  IF
SUBLESSEE’S ESTIMATED PAYMENTS UNDER THIS SECTION 3.5 FOR THE PRECEDING YEAR
WERE LESS THAN SUBLESSEE’S PROJECT EXPENSE SHARE AND BUILDING EXPENSE SHARE AS
INDICATED ON SUCH STATEMENT, SUBLESSEE SHALL PAY SUBLESSOR THE AMOUNT OF THE
DEFICIENCY WITHIN THIRTY (30) DAYS AFTER DELIVERY BY SUBLESSOR OF THE
STATEMENT.  IF SUBLESSEE’S ESTIMATED PAYMENTS UNDER THIS SECTION 3.5 DURING THE
PRECEDING YEAR EXCEED SUBLESSEE’S PROJECT EXPENSE SHARE AND BUILDING EXPENSE
SHARE  AS INDICATED ON SUCH STATEMENT, SUBLESSOR SHALL CREDIT SUCH OVERPAYMENT
AGAINST THE RENT NEXT DUE AND OWING UNDER THIS SUBLEASE.  IF THIS SUBLEASE SHALL
HAVE TERMINATED, SUBLESSOR SHALL PAY TO SUBLESSEE A REFUND OF THE DIFFERENCE
WITHIN THIRTY (30) DAYS AFTER THE DELIVERY OF THE STATEMENT.

 

3.6                                 PROPOSITION 13 PROTECTION.  NOTWITHSTANDING
ANYTHING IN THIS SUBLEASE TO THE CONTRARY, TO THE EXTENT THERE IS A SALE,
TRANSFER OR OTHER CHANGE OF OWNERSHIP BY ANY PARTY OTHER THAN THE PRIME LESSOR
OF THE LAND, OF ANY OF THE BUILDINGS, THE PARKING FACILITY AND/OR THE SUBLEASED
PREMISES (COLLECTIVELY, A “TRANSFER”) DURING THE FULL SUBLEASE TERM, PROJECT
OPERATING EXPENSES SHALL NOT INCLUDE ANY INCREASE OF, OR REASSESSMENT IN, REAL
PROPERTY TAXES AND ASSESSMENTS ATTRIBUTABLE TO ANY SUCH TRANSFER OCCURRING
DURING THE FULL SUBLEASE TERM

 

3.7                                 VACANCY CREDIT.  IN THE EVENT SUBLESSEE
CEASES TO OCCUPY (BUT STILL LEASES) THE SUBLEASED PREMISES, SUBLESSEE SHALL
RECEIVE A CREDIT AGAINST PROJECT OPERATING EXPENSES AND BUILDING OPERATING
EXPENSES EQUAL TO THE COST OF THE CENTRAL PLANT, THE WATER, HVAC AND ANY OTHER
VARIABLE EXPENSES TO THE EXTENT NOT INCURRED AS A RESULT OF SUCH VACANCY, AS
REASONABLY DETERMINED BY SUBLESSOR AND SUBLESSEE AND SUBLESSEE SHALL HAVE NO
OBLIGATION TO PAY THE SAME TO THE EXTENT OTHERWISE REQUIRED BY THE TERMS OF THIS
SUBLEASE.

 

3.8                                 AUDIT RIGHT.  SUBLESSEE SHALL HAVE THE RIGHT
TO AUDIT AND INSPECT SUBLESSOR’S RECORDS WITH RESPECT TO PROJECT OPERATING
EXPENSES AND/OR BUILDING OPERATING EXPENSES, AS WELL AS ALL OTHER ADDITIONAL
RENT COMPONENTS PAYABLE BY SUBLESSEE HEREUNDER FOR ANY YEAR OF THIS SUBLEASE. 
SUBLESSEE SHALL GIVE SUBLESSOR NOT LESS THAN THIRTY (30) DAYS PRIOR WRITTEN
NOTICE OF ITS INTENTION TO CONDUCT ANY SUCH AUDIT.  SUBLESSOR SHALL COOPERATE
WITH SUBLESSEE DURING THE COURSE OF SUCH AUDIT, WHICH SHALL BE CONDUCTED DURING
NORMAL BUSINESS HOURS IN SUBLESSOR’S OFFICE. SUBLESSOR AGREES TO MAKE SUCH
PERSONNEL AVAILABLE TO SUBLESSEE AS IS REASONABLY NECESSARY FOR SUBLESSEE, OR
FOR SUBLESSEE’S EMPLOYEES OR AGENTS, TO CONDUCT SUCH AUDIT. IF SUCH AUDIT
DISCLOSES THAT THE AMOUNT PAID BY SUBLESSEE AS PROJECT OPERATING EXPENSES OR
BUILDING OPERATING EXPENSES FOR THE LEASE YEAR IN QUESTION AND, OR ANY OTHER
ADDITIONAL RENTAL PAYABLE BY SUBLESSEE HEREUNDER, HAS BEEN OVERSTATED BY MORE
THAN TWO PERCENT (2%), THEN, IN ADDITION TO IMMEDIATELY REPAYING SUCH
OVERPAYMENT TO SUBLESSEE WITH INTEREST AT THE MAXIMUM LEGAL RATE, SUBLESSOR
SHALL ALSO PAY THE REASONABLE COSTS INCURRED BY SUBLESSEE IN CONNECTION WITH
SUCH AUDIT.  IF AFTER SUBLESSEE REVIEWS THE RECORDS FOR OPERATING EXPENSES,
SUBLESSOR AND SUBLESSEE FAIL TO AGREE AS TO THE AMOUNT OF OPERATING EXPENSES
THAT SHOULD HAVE BEEN CHARGED

 

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WITH RESPECT TO A STATEMENT IN DISPUTE, SUBLESSEE SHALL HAVE THE RIGHT TO CAUSE
ANOTHER REVIEW OF THAT PORTION OF THE STATEMENT TO BE MADE BY A FIRM OF
INDEPENDENT CERTIFIED ACCOUNTANTS OF NATIONAL STANDING SELECTED BY SUBLESSEE
WHICH ARE NOT THEN RETAINED BY SUBLESSEE AND (B) REASONABLY APPROVED BY
SUBLESSOR (“INDEPENDENT ACCOUNTANT”).  THE REVIEW OF THE INDEPENDENT ACCOUNTANT
SHALL BE DEEMED TO BE CORRECT AND SHALL BE CONCLUSIVELY BINDING ON BOTH
SUBLESSOR AND SUBLESSEE.  IN THE EVENT THE RESULTS OF THE REVIEW BY THE
INDEPENDENT ACCOUNTANT INDICATE THAT THE ACTUAL DOLLAR AMOUNT OF SUBLESSEE’S
PROJECT EXPENSE SHARE AND BUILDING EXPENSE SHARE  FOR THE PERIOD COVERED BY THE
STATEMENT IN QUESTION HAVE BEEN OVERSTATED BY MORE THAN TWO PERCENT (2%), THEN
SUBLESSOR SHALL BE RESPONSIBLE FOR THE FEES AND EXPENSES OF THE INDEPENDENT
ACCOUNTANT AND SUBLESSOR SHALL REIMBURSE SUBLESSEE FOR THE ACTUAL FEES AND
EXPENSES OF SUBLESSEE’S ACCOUNTANT(S) AND THE AMOUNT OF ANY OVERPAYMENT BY
SUBLESSEE OF PROJECT OPERATING EXPENSES AND/OR BUILDING OPERATING EXPENSES FOR
THE PERIOD IN QUESTION, WHICH AMOUNT SHALL BE CREDITED AGAINST SUBLESSEE’S NEXT
SUCCEEDING INSTALLMENT OF RENT.

 

3.9                                 RENT PAYMENT ADDRESS.  ALL PAYMENTS OF RENT
DUE UNDER THIS SUBLEASE SHALL BE PAID TO:

 

Cymer Inc.

17075 Thornmint Court

San Diego, CA  92127

Attention:  Accounts Receivable

 

4.                                       SUBLESSOR’S WORK AND CONDITION OF
SUBLEASED PREMISES.

 

4.1                                 PERFORMANCE OF SUBLESSOR’S WORK.  EXCEPT AS
PROVIDED TO THE CONTRARY BELOW, PRIOR TO THE DELIVERY OF EACH PHASE OF THE
SUBLEASED PREMISES TO SUBLESSEE, SUBLESSOR SHALL PERFORM THE WORK IN SUCH PHASE
OF THE SUBLEASED PREMISES IN A GOOD AND WORKMANLIKE MANNER AT ITS SOLE COST AND
EXPENSE AND AS MORE PARTICULARLY DESCRIBED ON THE SPACE PLAN AND AS MORE FULLY
REQUIRED BY THIS SECTION 4 (COLLECTIVELY, “SUBLESSOR’S WORK”).  THE SUBLESSOR’S
WORK SHALL INSURE THE DELIVERY OF EACH PHASE TO SUBLESSOR ON OR BEFORE THE
OUTSIDE DELIVERY DATES PROVIDED IN SECTION 1 ABOVE IN THE REQUIRED CONDITION. 
ALL OF SUBLESSOR’S WORK IDENTIFIED ON THE SPACE PLAN, INCLUDING WITHOUT
LIMITATION THE HVAC SYSTEMS, THE PLUMBING AND LIGHTING FIXTURES, THE FLOOR AND
CEILING TILES SHALL BE CONSTRUCTED OF AND INSTALLED WITH FIRST CLASS AND NEW
MATERIALS AND PARTS AND IN COMPLIANCE WITH ALL “GOVERNMENTAL REQUIREMENTS” (AS
HEREINAFTER DEFINED), LAWS, RULES AND REGULATIONS. THE SUBLESSOR’S WORK INCLUDES
THE TURNKEY LEASEHOLD IMPROVEMENTS FOR THE SUBLEASED PREMISES, EXCEPT FOR THE
SUBLESSEE’S WORK UNDER SECTION 2.1(E) ABOVE AND SECTIONS 5, 9, 10, AND 22
BELOW.  ALL INTERIOR FINISHES, INCLUDING CARPET AND PAINT COLOR SHALL BE  AS SET
FORTH ON THE SPACE PLAN, EXHIBIT “D” ATTACHED HERETO, WHICH IS HEREBY APPROVED.

 

4.2                                 APPROVED PLANS.  SUBLESSOR SHALL SUBMIT TO
SUBLESSEE ANY CHANGES TO THE SPACE PLANS REQUIRED BY ANY GOVERNMENTAL OFFICIAL
OR BODY AS A CONDITION FOR THE ISSUANCE OF BUILDING AND/OR OCCUPANCY PERMITS. 
IF REQUIRED FOR ANY REQUISITE APPROVAL BY PRIME LESSOR AND/OR ITS LENDER AND/OR
ANY GOVERNMENTAL PERMIT OR APPROVAL, SUBLESSOR SHALL PREPARE, AT SUBLESSOR’S
SOLE COST AND EXPENSE, AND SUBMIT TO SUBLESSEE A SET OF MORE DETAILED PLANS AND
SPECIFICATIONS AND/OR CONSTRUCTION DRAWINGS, INCLUDING WITHOUT LIMITATION, IF
AND TO THE EXTENT

 

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REQUIRED, A FULLY COORDINATED SET OF ARCHITECTURAL, STRUCTURAL, MECHANICAL,
ELECTRICAL AND PLUMBING WORKING DRAWINGS IN A FORM WHICH IS COMPLETE TO ALLOW
SUBCONTRACTORS TO BID ON THE WORK AND TO OBTAIN ALL APPLICABLE PERMITS
(COLLECTIVELY, THE “PLANS AND SPECIFICATIONS”) FOR THE SUBLESSOR’S WORK, BASED
ON THE SPACE PLAN.  SUCH PLANS AND SPECIFICATIONS WILL SHOW, WITHOUT LIMITATION,
EACH OF THE ITEMS DESCRIBED IN THE SPACE PLAN.  SUBLESSEE SHALL HAVE FIVE (5)
BUSINESS DAYS AFTER RECEIPT OF ANY SUCH PLANS AND SPECIFICATIONS IN WHICH TO
REVIEW AND TO GIVE TO SUBLESSOR WRITTEN NOTICE OF SUBLESSEE’S APPROVAL OF THE
SAME OR ITS REQUESTED CHANGES TO THE PLANS AND SPECIFICATIONS.  IF SUBLESSEE
REQUESTS ANY CHANGES TO THE SPACE PLAN AND/OR THE PLANS AND SPECIFICATIONS,
SUBLESSOR SHALL MAKE THOSE CHANGES WHICH ARE REASONABLY REQUESTED BY SUBLESSEE
AND SHALL WITHIN TEN (10) DAYS OF SUBLESSOR’S RECEIPT OF SUCH REQUEST SUBMIT THE
REVISED PORTION OF THE SPACE PLAN AND/OR THE PLANS AND SPECIFICATIONS TO
SUBLESSEE FOR ITS REVIEW AND APPROVAL.  SUBLESSOR SHALL USE REASONABLE SPEED AND
DILIGENCE TO “SUBSTANTIALLY COMPLETE” (AS HEREINAFTER DEFINED) THE SUBLESSOR’S
WORK IN ACCORDANCE WITH THE SPACE PLAN AND ANY OTHER PLANS AND SPECIFICATIONS
APPROVED BY SUBLESSEE (THE “APPROVED PLANS”); IN FIRST CLASS CONDITION AT
SUBLESSOR’S SOLE COST AND EXPENSE, (INCLUDING, WITHOUT LIMITATION, THE COST OF
ALL ENGINEERING, PERMITS, LICENSES AND FEES OF ANY GOVERNMENTAL AUTHORITY, THE
COST OF ANY CHANGES IN THE BASE, SHELL OR CORE OF THE SUBJECT BUILDING WHEN SUCH
CHANGES ARE REQUIRED BY THE SPACE PLAN AND THE OTHER APPROVED PLANS OR ARE
OTHERWISE REQUIRED BY LAW AS A RESULT OF THE CONSTRUCTION OF THE SUBLESSOR’S
WORK, THE COST OF ANY CHANGES TO THE SUBLESSOR’S WORK REQUIRED BY APPLICABLE
BUILDING CODE OR ANY OTHER GOVERNMENTAL REQUIREMENT; AND THE SALES AND USE TAXES
AND TITLE 24 FEES), AND DELIVER POSSESSION OF THE FIRST PHASE OF THE SUBLEASED
PREMISES TO SUBLESSEE IN THE REQUIRED CONDITION ON OR BEFORE A DATE WHICH IS
TWENTY-FIVE (25) CALENDAR DAYS FOLLOWING THE EFFECTIVE DATE.

 

4.3                                 FAILURE TO SUBSTANTIALLY COMPLETE BY OUTSIDE
COMPLETION DATE.  SUBLESSOR EXPRESSLY ACKNOWLEDGES AND AGREES THAT THE FAILURE
OF SUBLESSOR TO CAUSE THE SUBLESSOR’S WORK TO BE SUBSTANTIALLY COMPLETE AND TO
DELIVER EACH PHASE TO SUBLESSOR IN THE REQUIRED CONDITION IN THE MANNER REQUIRED
BY THIS SECTION 4.3 WILL EXTEND THE FIRST PHASE DELIVERY DATE OR SECOND PHASE
DELIVERY DATE, AS APPLICABLE, AND THE CONCOMITANT COMMENCEMENT OF PAYMENT OF
RENT THEREUNDER, FOR EVERY DAY THAT SUBLESSOR FAILS TO DELIVER ANY PHASE OF THE
SUBLEASED PREMISES TO SUBLESSEE FOR OCCUPANCY IN THE MANNER REQUIRED BY THIS
ARTICLE 4 AND IN ACCORDANCE WITH THE TERMS OF SECTION 2.1 ABOVE, SUBLESSEE SHALL
HAVE THE RIGHT TO TERMINATE THIS SUBLEASE, BY GIVING WRITTEN NOTICE OF
TERMINATION TO SUBLESSOR AT ANY TIME FOLLOWING THE FIRST PHASE OUTSIDE DELIVERY
DATE, WITH RESPECT TO THE FIRST PHASE, AND THE SECOND PHASE OUTSIDE DELIVERY
DATE, WITH RESPECT TO THE SECOND PHASE (RESPECTIVELY THE “OUTSIDE COMPLETION
DATE”), UNTIL DELIVERY OF POSSESSION TO SUBLESSEE IN THE CONDITION REQUIRED BY
THIS ARTICLE 4 AND ARTICLE 1 ABOVE; PROVIDED, HOWEVER, THAT THE OUTSIDE
COMPLETION DATE SHALL BE EXTENDED ONE (1) DAY FOR EVERY DAY THAT THE DELAY IS
CAUSED BY SUBLESSEE’S FAILURE TO TIMELY APPROVE ANY REQUIRED PLANS AND
SPECIFICATIONS WITHIN THE TIME PROVIDED BY SECTION 4.2 ABOVE OR BY CHANGE ORDERS
REQUESTED BY SUBLESSEE AFTER COMPLETION OF THE WORK IN ACCORDANCE WITH THE
APPROVED PLANS THAT RESULTED IN A DELAY OF THE SUBSTANTIAL COMPLETION AND
SUBLESSEE WAS ADVISED IN WRITING BY SUBLESSOR OF SUCH DELAY PRIOR TO THE
APPROVAL OF SUCH CHANGE ORDER.

 

4.4                                 PUNCHLIST.  UPON SUBSTANTIAL COMPLETION OF
THE SUBLESSOR’S WORK FOR EACH PHASE, SUBLESSOR WILL PROMPTLY GIVE WRITTEN NOTICE
TO SUBLESSEE AND SHALL DELIVER THE SUBLEASED PREMISES TO SUBLESSEE IN THE
REQUIRED CONDITION AND CLEAN AND FREE OF DEBRIS.  SUBLESSOR

 

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REPRESENTS AND WARRANTS TO SUBLESSEE THAT ON THE FIRST PHASE DELIVERY DATE AND
THE SECOND PHASE DELIVERY DATE THE PLUMBING, ELECTRICAL, FIRE SPRINKLER SYSTEM,
LIGHTING, AIR CONDITIONING, HEATING, AND LOADING DOORS AND ELEVATORS, IF ANY, IN
THE SUBLEASED PREMISES, SHALL BE IN GOOD OPERATING CONDITION AND REPAIR AND IN
COMPLIANCE WITH ALL GOVERNMENTAL REQUIREMENTS AND APPLICABLE LAWS, AND THAT THE
ROOF, FOUNDATION, AND ALL OTHER STRUCTURAL COMPONENTS OF THE SUBJECT BUILDING,
AND THE PROJECT, STORM DRAIN AND OTHER DRAINAGE FACILITIES IN THE PROJECT COMMON
AREAS AND PROJECT SHALL BE IN GOOD OPERATING CONDITION AND REPAIR, THAT
SUBSTANTIAL COMPLETION OF SUBLESSOR’S WORK FOR SUCH PHASE SHALL HAVE OCCURRED
AND THAT ALL PERMITS REQUIRED FOR SUBLESSEE’S LEGAL OCCUPANCY AND USE OF SUCH
PHASE OF THE SUBLEASED PREMISES SHALL HAVE BEEN ISSUED.  WITHIN FIVE (5)
BUSINESS DAYS AFTER THE OCCURRENCE OF SUBSTANTIAL COMPLETION, A REPRESENTATIVE
OF SUBLESSOR AND A REPRESENTATIVE OF SUBLESSEE TOGETHER SHALL INSPECT THE
SUBLEASED PREMISES AND GENERATE A PUNCHLIST OF DEFECTIVE OR UNCOMPLETED ITEMS
RELATING TO THE COMPLETION OF CONSTRUCTION OF THE IMPROVEMENTS (THE
“PUNCHLIST”).  SUBLESSOR SHALL, IMMEDIATELY AFTER THE PUNCHLIST IS PREPARED AND
AGREED UPON BY SUBLESSOR AND SUBLESSEE, COMPLETE SUCH INCOMPLETE WORK AND REMEDY
SUCH DEFECTIVE WORK AS IS SET FORTH ON THE PUNCHLIST.

 

4.5                                 SUBLESSOR WARRANTY.  SUBLESSOR HEREBY
WARRANTS TO SUBLESSEE, WHICH WARRANTY (“SUBLESSOR’S WARRANTY”) SHALL SURVIVE FOR
THE ONE (1) YEAR PERIOD FOLLOWING THE FIRST PHASE DELIVERY DATE OR SECOND PHASE
DELIVERY DATE, RESPECTIVELY, FOR EACH PHASE, THAT (I) THE MATERIALS AND
EQUIPMENT FURNISHED BY SUBLESSOR’S CONTRACTORS IN THE COMPLETION OF THE
SUBLESSOR’S WORK WILL BE OF GOOD QUALITY AND NEW, AND (II) SUCH MATERIALS AND
EQUIPMENT AND THE WORK OF SUCH CONTRACTORS SHALL BE FREE FROM DEFECTS NOT
INHERENT IN THE QUALITY REQUIRED OR PERMITTED HEREUNDER AND (III) THE
SUBLESSOR’S WORK COMPLIES WITH GOVERNMENTAL REQUIREMENTS AND APPLICABLE LAWS AND
THE PRIME LEASE.  THIS WARRANTY SHALL EXCLUDE DAMAGES CAUSED BY SUBLESSEE OR
SUBLESSEE’S AFFILIATES, IMPROPER OR INSUFFICIENT MAINTENANCE, AND IMPROPER
OPERATION.  SUBLESSOR FURTHER WARRANTS THAT (1) AS OF THE FIRST PHASE DELIVERY
DATE FOR THE FIRST PHASE, AND THE SECOND PHASE DELIVERY DATE FOR THE SECOND
PHASE, THE SUBLEASED PREMISES AND THE SUBLESSOR’S WORK WILL BE COMPLIANCE WITH
REQUIREMENTS OF THE AMERICANS WITH DISABILITIES ACT OF 1990 (2) THE SUBLESSOR’S
WORK WILL BE CONSTRUCTED AND INSTALLED BY SUBLESSOR IN COMPLIANCE WITH THE
APPROVED PLANS AND SUCH WARRANTY SHALL REMAIN IN EFFECT THROUGHOUT THE FULL
SUBLEASE TERM. SUBLESSOR SHALL, FOLLOWING WRITTEN NOTICE FROM SUBLESSEE SETTING
FORTH WITH SPECIFICITY THE NATURE AND EXTENT OF ANY NONCOMPLIANCE WITH THIS
WARRANTY, PROMPTLY RECTIFY THE SAME AT SUBLESSOR’S EXPENSE.

 

4.6                                 SUBSTANTIAL COMPLETION.  FOR PURPOSES OF
THIS SUBLEASE, THE TERMS “SUBSTANTIALLY COMPLETE” AND “SUBSTANTIAL COMPLETION”
(OR ANY VARIATION THEREOF) SHALL MEAN COMPLETION OF CONSTRUCTION OF THE
SUBLESSOR’S WORK IN ACCORDANCE WITH THE APPROVED PLANS AS MODIFIED BY ANY CHANGE
ORDERS APPROVED BY SUBLESSEE, SUBJECT ONLY TO PUNCHLIST ITEMS ESTABLISHED
PURSUANT TO SECTION 4.4 ABOVE, EVIDENCE OF PAYMENT BY SUBLESSOR OF ALL COSTS IN
CONNECTION WITH SUCH CONSTRUCTION, INCLUDING WITHOUT LIMITATION FINAL LIEN
RELEASE AND WAIVERS FROM EACH CONTRACTOR, SUBCONTRACTOR, MATERIAL SUPPLIER AND
LABOR SUPPLIER PROVIDING SERVICES AND MATERIALS TO THE SUBLEASED PREMISES FOR
THE SUBLESSOR’S WORK, FINAL INSPECTION OF THE SUBLESSOR’S WORK BY THE
GOVERNMENTAL AUTHORITY HAVING JURISDICTION; RECORDATION OF A NOTICE OF
COMPLETION AND THE LAPSE OF THIRTY-FIVE (35) DAYS FROM THE DATE OF RECORDING THE
NOTICE; ISSUANCE OF PERMANENT CERTIFICATES OF OCCUPANCY IF REQUIRED FOR
SUBLESSEE TO LEGALLY OCCUPY THE SUBLEASED PREMISES AND EACH PHASE THEREOF; AND
THE DELIVERY TO SUBLESSEE COPIES OF ALL CONSTRUCTION

 

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WARRANTIES AND GUARANTEES IN CONNECTION WITH THE SUBLESSOR’S WORK WHICH
SUBLESSEE IS REQUIRED TO MAINTAIN UNDER THE TERMS OF THIS SUBLEASE AND THE
DELIVERY BY SUBLESSOR TO SUBLESSEE OF A CERTIFICATE OF SUBSTANTIAL COMPLETION
FOR THE IMPROVEMENTS ON STANDARD AIA FORM G-704 CERTIFIED BY SUBLESSOR’S
ARCHITECT.  IN THE EVENT SUBSTANTIAL COMPLETION IS DELAYED BECAUSE OF A CHANGE
ORDER APPROVED BY SUBLESSEE WHICH ALSO RESULTED IN A DELAY OF THE DATE SET FOR
SUBSTANTIAL COMPLETION AS ADVISED BY SUBLESSOR PRIOR TO SUBLESSEE’S APPROVAL OF
THE CHANGE ORDER (“SUBLESSEE DELAY”), THEN FOR THE PURPOSE OF ESTABLISHING THE
FIRST PHASE DELIVERY DATE OR SECOND PHASE DELIVERY DATE AND ANY OTHER DATE TIED
TO THE DATE OF SUBSTANTIAL COMPLETION, SUBSTANTIAL COMPLETION SHALL BE DEEMED TO
MEAN THE DATE WHEN SUBSTANTIAL COMPLETION WOULD HAVE BEEN ACHIEVED BUT FOR SUCH
SUBLESSEE DELAY.

 

4.7                                 DELIVERY OF AS-BUILTS.  SUBLESSOR SHALL
CAUSE A SET OF “AS-BUILT” PLANS AND SPECIFICATIONS TO BE DELIVERED TO SUBLESSEE
WITHIN ONE HUNDRED TWENTY (120) DAYS AFTER SUBSTANTIAL COMPLETION IF SUBLESSOR
IS REQUIRED TO PREPARE AND DELIVER SAME TO ANY OF THE PRIME LESSOR, THE LENDER,
OR BY GOVERNMENTAL REQUIREMENT.

 

5.                                       SUBLESSEE ALTERATIONS AND ADDITIONS. 
SUBLESSEE SHALL NOT MAKE OR PERMIT TO BE MADE ANY ALTERATIONS, IMPROVEMENTS, OR
ADDITIONS TO THE SUBLEASED PREMISES (A “SUBLESSEE’S CHANGE”), WITHOUT FIRST
OBTAINING ON EACH OCCASION (A) SUBLESSOR’S PRIOR WRITTEN CONSENT (WHICH CONSENT
SUBLESSOR AGREES NOT TO UNREASONABLY WITHHOLD, DELAY OR CONDITION) AND (B) PRIME
LESSOR’S PRIOR WRITTEN CONSENT (IF SUCH CONSENT IS REQUIRED); PROVIDED, HOWEVER,
THAT SUBLESSEE SHALL HAVE THE RIGHT, WITHOUT THE PRIOR WRITTEN CONSENT OF
SUBLESSOR AND PRIME LESSOR (BUT OTHERWISE SUBJECT TO THE PROVISIONS OF THIS
SECTION 5), TO MAKE SUBLESSEE CHANGES THAT: (I)  ARE CONSISTENT WITH THE SCIF
WORK TO BE PERFORMED IN THE SUBJECT BUILDING; OR (II) QUALIFY AS “PRE-APPROVED
CHANGES” WITHIN THE MEANING OF SECTION 12.1(A) OF THE PRIME LEASE, I.E. THE COST
OF SUCH A SUBLESSEE CHANGE IS LESS THAN FIFTY THOUSAND DOLLARS ($50,000). 
SUBLESSOR SHALL USE ITS COMMERCIALLY REASONABLE BEST EFFORTS TO SECURE ANY
CONSENTS FROM PRIME LESSOR TO ALTERATIONS NOT OTHERWISE EXPRESSLY PERMITTED TO
BE MADE BY SUBLESSEE IN ITEMS (I) AND (II) ABOVE OR AS PROVIDED IN THIS
SECTION BELOW WITH RESPECT TO TELECOMMUNICATIONS EQUIPMENT.  SUBLESSEE SHALL
HAVE THE RIGHT WITHOUT SUBLESSOR’S AND PRIME LESSOR’S PRIOR WRITTEN CONSENT AND
WITHOUT COMPLIANCE WITH THE OTHER PROVISIONS OF THIS SECTION 5 TO INSTALL,
MAINTAIN AND REPAIR TOWERS, ANTENNAS, SATELLITE DISHES AND/OR OTHER
COMMUNICATIONS EQUIPMENT (“TELECOMMUNICATIONS EQUIPMENT”) ON THE ROOF OF THE
SUBJECT BUILDING AS HEREINAFTER PROVIDED IN SECTION 22 OF THIS SUBLEASE.  ALL
SUBLESSEE’S CHANGES SHALL BE PERFORMED IN ACCORDANCE WITH ALL LEGAL REQUIREMENTS
APPLICABLE THERETO AND IN A GOOD AND WORKMANLIKE MANNER WITH FIRST-CLASS
MATERIALS.  SUBLESSEE SHALL MAINTAIN INSURANCE REASONABLY SATISFACTORY TO
SUBLESSOR DURING THE CONSTRUCTION OF ALL SUBLESSEE’S CHANGES.  IF SUBLESSOR OR
PRIME LESSOR AT THE TIME OF GIVING ITS APPROVAL TO ANY SUBLESSEE’S CHANGE NOT
OTHERWISE EXPRESSLY PERMITTED BY THE TERMS OF THIS SECTION THEN NOTIFIES
SUBLESSEE IN WRITING THAT APPROVAL IS CONDITIONED UPON RESTORATION, THEN
SUBLESSEE SHALL, AT ITS SOLE COST AND EXPENSE AND AT SUBLESSOR’S OPTION UPON THE
TERMINATION OR EXPIRATION OF THIS LEASE, REMOVE THE SAME AND RESTORE THE
SUBLEASED PREMISES TO ITS CONDITION PRIOR TO SUCH SUBLESSEE’S CHANGE.  SUBLESSEE
SHALL PAY THE FULL COST OF ANY SUBLESSEE’S CHANGE.

 

Except as otherwise provided herein, all Sublessee’s Changes and all repairs and
all other property attached to or installed on the Subleased Premises by or on
behalf of Sublessee (not including Sublessee’s personal property and removable
trade fixtures, which will remain the

 

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property of Sublessee at all times during the Full Sublease Term) shall
immediately upon completion or installation thereof be and become part of the
Subleased Premises and the property of Sublessor without payment therefor by
Sublessor and shall be surrendered to Sublessor upon the expiration or earlier
termination of this Sublease.  Sublessee agrees to hold Sublessor harmless
against all liens, claims and liabilities of every kind, nature and description
which may arise out of or in any way be connected with such work.  Sublessee
shall not permit the Subleased Premises to become subject to any mechanics’,
laborers’ or materialmen’s lien on account of labor, material or services
furnished to Sublessee or claimed to have been furnished to Sublessee in
connection with work of any character performed or claimed to have been
performed for the Subleased Premises by, or at the direction or sufferance of
Sublessee and if any such liens are filed against the Subleased Premises,
Sublessee shall promptly discharge the same; provided, however, that Sublessee
shall have the right to contest, in good faith and with reasonable diligence,
the validity of any such lien or claimed lien.

 

6.                                       DISTURBANCE OF POSSESSION BY
SUBLESSOR.  IN THE EVENT THAT SUBLESSEE IS ACTUALLY PREVENTED FROM USING, AND
DOES NOT USE, THE SUBLEASED PREMISES OR ANY PORTION THEREOF, OR THE SAME OR ANY
PORTION THEREOF IS UNTENABLE FOR THREE (3) CONSECUTIVE BUSINESS DAYS OR TEN (10)
BUSINESS DAYS IN ANY TWELVE (12) MONTH PERIOD OR SUCH LESSER PERIODS IF COVERED
BY INSURANCE, (THE “ELIGIBILITY PERIOD”) AS A RESULT OF (1) ANY DAMAGE OR
DESTRUCTION TO THE SUBLEASED PREMISES, ANY PROJECT COMMON AREAS, THE PARKING
FACILITIES AND/OR THE SUBJECT BUILDING, (2) ANY REPAIR, MAINTENANCE OR
ALTERATION PERFORMED BY SUBLESSOR AFTER THE FIRST PHASE DELIVERY DATE WHICH
INTERFERES WITH SUBLESSEE’S USE OF THE SUBLEASED PREMISES, THE PROJECT COMMON
AREA, THE PARKING FACILITIES OR THE SUBJECT BUILDING, (3) AN EMINENT DOMAIN
PROCEEDING, (4) THE PRESENCE OF HAZARDOUS SUBSTANCES (FROM A SOURCE OTHER THAN
ACTS OR OMISSIONS OF SUBLESSEE OR ITS AGENTS, EMPLOYEES OR CONTRACTORS) IN, ON
OR AROUND THE PROJECT, THE SUBLEASED PREMISES OR THE SUBJECT BUILDING WHICH
COULD POSE A HEALTH RISK TO OCCUPANTS OF THE SUBLEASED PREMISES, AND THOSE USING
THE PROJECT COMMON AREAS, (5) ANY FAILURE OF SUBLESSOR TO PROVIDE ACCESS AS
REQUIRED BY SECTION 1.7, OR (6) OR IF THERE IS AN INTERRUPTION OF UTILITIES OR
OTHER ESSENTIAL SERVICES TO BE PROVIDED BY SUBLESSOR UNDER THIS SUBLEASE, BASE
RENT SHALL BE PROPORTIONATELY ABATED OR REDUCED, AS THE CASE MAY BE, AFTER
EXPIRATION OF THE ELIGIBILITY PERIOD FOR SUCH TIME THAT SUBLESSEE CONTINUES TO
BE SO ACTUALLY PREVENTED FROM USING, AND DOES NOT USE, THE SUBLEASED PREMISES OR
A PORTION THEREOF (INCLUDING THE PARKING FACILITIES AND/OR THE PROJECT COMMON
AREA), IN THE PROPORTION THAT THE AREA OF THE PORTION OF THE SUBLEASED PREMISES
(INCLUDING THE PARKING FACILITY AND/OR BUILDING PROJECT AREA) THAT SUBLESSEE IS
PREVENTED FROM USING, AND DOES NOT USE, BEARS TO THE TOTAL SUBLEASED PREMISES
(INCLUDING THE PARKING FACILITY AND/OR PROJECT COMMON AREA). HOWEVER, IN THE
EVENT THAT SUBLESSEE IS PREVENTED FROM CONDUCTING, AND DOES NOT CONDUCT, ITS
BUSINESS IN ANY PORTION OF THE BUILDING AREA OF THE SUBLEASED PREMISES FOR A
PERIOD OF TIME IN EXCESS OF THE ELIGIBILITY PERIOD, AND THE REMAINING PORTION OF
THE BUILDING AREA OF THE SUBLEASED PREMISES IS NOT SUFFICIENT TO ALLOW SUBLESSEE
TO EFFECTIVELY CONDUCT ITS BUSINESS THEREIN, AND IF SUBLESSEE DOES NOT CONDUCT
ITS BUSINESS FROM SUCH REMAINING PORTION, THEN FOR SUCH TIME AFTER EXPIRATION OF
THE ELIGIBILITY PERIOD DURING WHICH SUBLESSEE IS SO PREVENTED FROM EFFECTIVELY
CONDUCTING ITS BUSINESS THEREIN, THE RENT FOR THE ENTIRE SUBLEASED PREMISES
SHALL BE ABATED; PROVIDED, HOWEVER, IF SUBLESSEE REOCCUPIES AND CONDUCTS ITS
BUSINESS FROM ANY PORTION OF THE BUILDING AREA OF THE SUBLEASED PREMISES DURING
SUCH PERIOD, THE BASE RENT ALLOCABLE TO SUCH REOCCUPIED PORTION, BASED ON THE
PROPORTION THAT THE RENTABLE AREA OF SUCH REOCCUPIED PORTION OF THE SUBLEASED
PREMISES BEARS TO THE TOTAL SUBLEASED PREMISES, SHALL BE PAYABLE BY SUBLESSEE
FROM THE DATE SUCH

 

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BUSINESS OPERATIONS COMMENCE.  IF SUBLESSEE’S RIGHT TO ABATEMENT OCCURS BECAUSE
OF AN EMINENT DOMAIN TAKING OR BECAUSE OF DAMAGE OR DESTRUCTION TO THE SUBLEASED
PREMISES, THE PARKING FACILITIES OR THE PROJECT COMMON AREA, SUBLESSEE’S
ABATEMENT PERIOD SHALL CONTINUE UNTIL SUBLESSOR HAS EITHER COMPLETED THE
RECONSTRUCTION OF THE SUBLEASED PREMISES WITHIN THE TIME AND IN THE MANNER
REQUIRED BY SECTIONS 7 AND 29.  TO THE EXTENT SUBLESSEE IS ENTITLED TO ABATEMENT
WITHOUT REGARD TO THE ELIGIBILITY PERIOD, BECAUSE OF AN EVENT COVERED IN EITHER
SECTIONS 7 OR 29 OF THIS SUBLEASE, THEN THE ABATEMENT SHALL CONTINUE UNDER
WHICHEVER PROVISION PROVIDES FOR THE GREATEST RELIEF TO SUBLESSEE. TO THE EXTENT
SUBLESSEE HAS PREPAID RENT (AS IT DOES EACH MONTH SINCE BASE RENT IS DUE ON THE
FIRST DAY OF EACH MONTH) AND SUBLESSEE IS SUBSEQUENTLY ENTITLED TO AN ABATEMENT,
SUCH PREPAID, AND SUBSEQUENTLY ABATED, BASE RENT SHOULD BE REFUNDED TO, AND PAID
BY SUBLESSOR TO, SUBLESSEE WITHIN THIRTY (30) DAYS AFTER THE END OF THE
APPROPRIATE MONTH.

 

In addition to anything in this Section 6 and/or any of the other provisions of
this Sublease, in the event that Sublessee is notified or becomes aware of the
fact that as a result of:

 

(A)                                  THE INABILITY OF SUBLESSOR TO PROVIDE
ESSENTIAL SERVICES AS REQUIRED UNDER THIS SUBLEASE TO THE SUBLEASED PREMISES,
THE PROJECT COMMON AREA, THE PARKING FACILITY AND/OR THE SUBJECT BUILDING SO AS
TO INTERFERE SUBSTANTIALLY WITH SUBLESSEE’S USE OF ALL OR A MATERIAL PORTION OF
THE SUBLEASED PREMISES (“MATERIAL” BEING DEFINED AS AT LEAST 20% OF THE RENTABLE
AREA OF THE SUBLEASED PREMISES OR THE PROJECT COMMON AREA FOR THE PURPOSE OF
THIS CLAUSE), THE PARKING FACILITIES, AND/OR THE SUBJECT BUILDING; OR

 

(B)                                 ANY DISCOVERY OF HAZARDOUS MATERIALS IN, ON
OR AROUND THE SUBLEASED PREMISES, THE SUBJECT BUILDING AND/OR THE LAND NOT
PLACED OR PERMITTED BY APPLICABLE GOVERNMENTAL REQUIREMENTS TO BE PLACED IN, ON
OR AROUND THE SUBLEASED PREMISES, THE SUBJECT BUILDING AND/OR THE LAND BY
SUBLESSEE, THAT MAY, IN SUBLESSEE’S OPINION, CONSIDERING THE NATURE AND AMOUNT
OF THE SUBSTANCES INVOLVED, INTERFERE WITH SUBLESSEE’S USE OF ALL OR A PORTION
OF THE SUBLEASED PREMISES (OR WHICH MAY PRESENT A HEALTH RISK TO ANY OCCUPANTS
OF THE SUBLEASED PREMISES); OR THE DISCOVERY OF ANY OTHER HAZARDOUS CONDITION
WITH RESPECT TO THE SUBLEASED PREMISES, THE PARKING FACILITY, THE BUILDING
COMMON AREA AND/OR THE SUBJECT BUILDING WHICH WOULD MAKE IT DANGEROUS OR UNSAFE
FOR SUBLESSEE AND ITS EMPLOYEES TO CONDUCT THEIR NORMAL AND CUSTOMARY BUSINESS
OPERATIONS (EACH OF THE ITEMS SET FORTH IN PROVISIONS (A) AND (B) BEING REFERRED
TO HEREIN AS A “TRIGGER EVENT”),

 

(C)                                  IF SUBLESSEE CANNOT, WITHIN EIGHT (8)
MONTHS (“NON-USE PERIOD”) OF THE OCCURRENCE OF THE TRIGGER EVENT, BE GIVEN
REASONABLE USE OF, AND ACCESS TO, A FULLY REPAIRED, RESTORED, SAFE AND HEALTHFUL
SUBLEASED PREMISES, THE BUILDING COMMON AREA AND THE SUBJECT BUILDING, THE
PARKING FACILITY AND THE UTILITIES AND SERVICES PERTAINING TO THE SUBLEASED
PREMISES AND THE SUBJECT BUILDING, ALL SUITABLE FOR THE CONDUCT OF SUBLESSEE’S
NORMAL BUSINESS OPERATIONS THEREFROM (“FULL RESTORATION TO THE PREMISES”), THEN
SUBLESSEE MAY THEREAFTER ELECT AT ANY TIME TO EXERCISE AN ON-GOING RIGHT TO
TERMINATE THIS SUBLEASE UPON TEN (10) DAYS’ WRITTEN NOTICE SENT TO SUBLESSOR AT
ANY TIME FOLLOWING THE EXPIRATION OF THE NON-USE PERIOD BUT BEFORE THE FULL
RESTORATION TO THE SUBLEASED PREMISES, WHEREUPON SUCH TERMINATION RIGHT SHALL
LAPSE.  NOTWITHSTANDING THE FOREGOING, SUBLESSEE MAY TERMINATE THIS SUBLEASE
PRIOR TO THE EXPIRATION OF THE NON-USE PERIOD IN

 

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THE EVENT OF AN OCCURRENCE OF A TRIGGER EVENT IF IT IS APPARENT THAT SUBLESSEE
WILL NOT HAVE USE OF THE ENTIRE SUBLEASED PREMISES BY THE EXPIRATION OF THE
NON-USE PERIOD.

 

In the event of any Trigger Event occurring during the last six (6) months of
the Initial Sublease Term or, if an applicable Extension Option has been
exercised, during the last six (6) months of any Extension Term, should the
Non-Use Period continue for thirty (30) consecutive days, Sublessee may elect to
exercise an on-going right to terminate this Sublease upon ten (10) days’
written notice sent to Sublessor at any time following the expiration of the
thirty (30) day Non-Use Period, but before the Full Restoration to the Subleased
Premises.

 

7.                                       FIRE AND OTHER CASUALTY.  SUBJECT TO
COMPLIANCE WITH TERMS AND CONDITIONS OF THE PRIME LEASE RELATING TO REPAIRS,
RECONSTRUCTION, AND RESTORATION, IN THE EVENT THE SUBLEASED PREMISES ARE DAMAGED
BY FIRE OR OTHER CASUALTY INSURED BY SUBLESSOR, SUBLESSOR AGREES TO PROMPTLY
RESTORE AND REPAIR THE SUBLEASED PREMISES AT SUBLESSOR’S EXPENSE, INCLUDING THE
SUBLESSOR’S WORK AND ANY OTHER IMPROVEMENTS TO BE INSURED BY SUBLESSOR, BUT ONLY
TO THE EXTENT SUBLESSOR RECEIVES INSURANCE PROCEEDS THEREFOR (PLUS THE AMOUNT OF
ANY DEDUCTIBLE IN THE INSURANCE CARRIED BY SUBLESSOR, WHICH DEDUCTIBLE WILL BE
PAID BY SUBLESSOR, IN ADDITION TO AVAILABLE INSURANCE PROCEEDS, TOWARD
RESTORATION COSTS), INCLUDING THE PROCEEDS FROM BOTH THE INSURANCE REQUIRED TO
BE CARRIED BY SUBLESSOR PURSUANT TO THE PRIME LEASE AND THIS SUBLEASE. 
NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT THE SUBLEASED PREMISES ARE
(I) SO DESTROYED THAT THEY CANNOT BE REPAIRED OR REBUILT WITHIN ONE HUNDRED
EIGHTY (180) DAYS AFTER THE DATE OF SUCH DAMAGE; OR (II) DESTROYED BY A CASUALTY
WHICH IS NOT COVERED BY SUBLESSOR’S INSURANCE CARRIED BY SUBLESSOR, OR IF SUCH
CASUALTY IS COVERED BY SUBLESSOR’S INSURANCE BUT PRIME LESSOR OR OTHER PARTY
ENTITLED TO INSURANCE PROCEEDS FAILS TO MAKE SUCH PROCEEDS AVAILABLE TO
SUBLESSOR IN AN AMOUNT SUFFICIENT FOR RESTORATION OF THE SUBLEASED PREMISES,
THEN SUBLESSOR SHALL GIVE WRITTEN NOTICE TO SUBLESSEE OF SUCH DETERMINATION (THE
“DETERMINATION NOTICE”) WITHIN SIXTY (60) DAYS OF SUCH CASUALTY.  EITHER
SUBLESSOR OR SUBLESSEE MAY TERMINATE AND CANCEL THIS LEASE EFFECTIVE AS OF THE
DATE OF SUCH CASUALTY BY GIVING WRITTEN NOTICE TO THE OTHER PARTY WITHIN THIRTY
(30) DAYS AFTER SUBLESSEE’S RECEIPT OF THE DETERMINATION NOTICE.  UPON THE
GIVING OF SUCH TERMINATION NOTICE, ALL OBLIGATIONS HEREUNDER WITH RESPECT TO
PERIODS FROM AND AFTER THE EFFECTIVE DATE OF TERMINATION SHALL THEREUPON CEASE
AND TERMINATE.  IF NO SUCH TERMINATION NOTICE IS GIVEN, SUBLESSOR SHALL, TO THE
EXTENT OF THE AVAILABLE INSURANCE PROCEEDS, MAKE SUCH REPAIR OR RESTORATION OF
THE SUBLEASED PREMISES TO THE APPROXIMATE CONDITION EXISTING PRIOR TO SUCH
CASUALTY, PROMPTLY AND IN SUCH MANNER AS NOT TO UNREASONABLY INTERFERE WITH
SUBLESSEE’S USE AND OCCUPANCY OF THE SUBLEASED PREMISES (IF SUBLESSEE IS STILL
OCCUPYING THE SUBLEASED PREMISES).  BASE RENT AND ADDITIONAL RENT SHALL
PROPORTIONATELY ABATE DURING THE TIME THAT THE SUBLEASED PREMISES OR ANY PART
THEREOF ARE UNUSABLE BY REASON OF ANY SUCH DAMAGE THERETO.  IN THE EVENT OF ANY
CONFLICT BETWEEN THE TERMS OF THIS SECTION 7 AND THE PRIME LEASE, THE TERMS OF
THE PRIME LEASE SHALL CONTROL NOTWITHSTANDING THE TERMS OF SECTION 27 BELOW TO
THE CONTRARY.

 

8.                                       SURRENDER AND RESTORATION.  SUBLESSEE
MAY, AT THE EXPIRATION OR EARLIER TERMINATION OF THIS SUBLEASE OR ANY PHASE
THEREOF, SURRENDER SUCH PHASE OF THE SUBLEASED PREMISES TO SUBLESSOR IN ITS THEN
CURRENT “AS IS” CONDITION.  IN ADDITION, SUBLESSEE SHALL REMOVE ANY OF ITS
PERSONAL PROPERTY, FURNITURE, FIXTURES AND EQUIPMENT, PROVIDED SUBLESSEE
PROMPTLY REPAIRS ANY DAMAGE TO SUCH PHASE OF THE SUBLEASED PREMISES CAUSED BY
SUCH REMOVAL.  NOTWITHSTANDING THE FOREGOING OR ANYTHING TO THE CONTRARY IN THIS
SUBLEASE AND/OR IN THE PRIME LEASE, AND EXCEPT AS

 

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EXPRESSLY PROVIDED IN SECTIONS 19 AND 22 BELOW, SUBLESSOR HEREBY AGREES THAT
SUBLESSEE SHALL NOT BE REQUIRED TO REMOVE ANY ALTERATIONS OR IMPROVEMENTS UNLESS
SUBLESSOR REQUIRED SUCH REMOVAL AT THE TIME CONSENT WAS REQUIRED AND GIVEN BY
SUBLESSOR TO SUBLESSEE AT THE TIME OF SUBLESSEE’S REQUEST OF A SUBLESSEE CHANGE.

 

9.                                       CONNECTION TO OTHER FACILITIES. 
SUBLESSOR AND SUBLESSEE HEREBY ACKNOWLEDGE THAT SUBLESSEE DOES BUSINESS OR MAY
BE DOING BUSINESS IN MORE THAN ONE FACILITY IN CLOSE PROXIMITY TO THE SUBLEASED
PREMISES.  AS PART OF SUBLESSEE’S WORK OR IN CONNECTION WITH SUBSEQUENT
ALTERATIONS TO THE SUBLEASED PREMISES, SUBLESSEE SHALL HAVE THE RIGHT, AT ITS
SOLE COST AND EXPENSE, TO “CONNECT” SUBLESSEE’S OTHER FACILITIES TO THE
SUBLEASED PREMISES IN ORDER TO PROVIDE VOICE/DATA COMMUNICATIONS, EMPLOYEE AND
VISITOR INTERACTION AND/OR ACCESS TO THE SUBLEASED PREMISES FROM SUBLESSEE’S
OTHER FACILITIES.

 

10.                                 U.S. GOVERNMENT SECURITY REGULATIONS.  IN
ADDITION TO THE SCIF WORK, SUBLESSOR HEREBY AGREES TO COOPERATE WITH SUBLESSEE
AND ANY GOVERNMENTAL AGENCY DOING BUSINESS EITHER DIRECTLY OR INDIRECTLY WITH
THE SUBLESSEE AT THE SUBLEASED PREMISES TO THE EXTENT ALTERATIONS ARE NECESSARY
TO SEPARATE AND DEMISE THE SUBLEASED PREMISES FROM THE REMAINDER OF THE SUBJECT
BUILDING IN ORDER TO CONFORM TO THE U.S. GOVERNMENT SECURITY REGULATIONS AND
SUBLESSEE’S INTERNAL SECURITY REQUIREMENTS.  EXCEPT AS OTHERWISE SPECIFICALLY
SET FORTH IN THIS SUBLEASE, SUBLESSEE SHALL BE RESPONSIBLE FOR ALL COSTS AND
EXPENSES IN CONNECTION WITH SUCH ALTERATIONS.  UPON REASONABLE REQUEST OF
SUBLESSOR AT THE END OF THE SUBLEASE TERM, SUBLESSEE WILL REMOVE ANY SUCH
ALTERNATIONS WHICH INTERFERE WITH NORMAL USE OF THE PREMISES.

 

11.                                 MISCELLANEOUS CHARGES.  EXCEPT TO THE EXTENT
PAYABLE AS PROJECT OPERATING EXPENSES AND/OR BUILDING OPERATING EXPENSES,
NEITHER SUBLESSEE NOR ANY OF ITS CONTRACTORS, SUBCONTRACTORS, EMPLOYEES,
ARCHITECTS, DESIGNERS AND AGENTS SHALL BE CHARGED FOR, AND SUBLESSOR SHALL
PROVIDE, PARKING, ELECTRICITY, WATER, TOILET FACILITIES, HVAC (FROM 6:30 A.M. TO
6:00 P.M., MONDAY THROUGH FRIDAY, AND 9:00 A.M. TO 1:00 P.M. ON SATURDAYS
(“NORMAL CONSTRUCTION HOURS”)), ELEVATORS AND LOADING DOCKS PRIOR TO THE DATE OF
DELIVERY BY SUBLESSOR TO SUBLESSEE OF EACH PHASE.

 

12.                                 ELEVATORS.  AT ALL TIMES DURING THE FULL
SUBLEASE TERM, SUBLESSEE SHALL HAVE THE USE OF ALL BUILDING ELEVATORS FOR USE BY
SUBLESSEE AND ITS EMPLOYEES, OCCUPANTS, INVITEES, ASSIGNEES AND SUBLESSEES AND
IF SUBLESSEE DESIRES, SUBLESSEE MAY INSTALL ACCESS DEVICES SO AS TO PERMIT
ACCESS TO THE ELEVATORS ONLY BY SUBLESSEE AND ITS EMPLOYEES.  SO LONG AS THE
SUBLEASED PREMISES INCLUDE ALL OF THE SUBJECT BUILDING, SUBLESSEE SHALL CAUSE
THE ELEVATORS TO BE MAINTAINED IN GOOD WORKING ORDER AND REPAIR, PROVIDED
HOWEVER, THAT SUBLESSEE SHALL HAVE NO OBLIGATION TO MAKE CAPITAL REPAIRS TO THE
ELEVATORS OR TO RETROFIT THE SAME TO COMPLY WITH APPLICABLE LAWS AND SUBLESSOR
SHALL MAKE ALL SUCH IMPROVEMENTS FOLLOWING NOTICE FROM SUBLESSEE TO INSURE THE
CONTINUOUS OPERATION OF THE ELEVATORS IN ACCORDANCE WITH APPLICABLE LAWS AND
GOVERNMENTAL REQUIREMENTS.

 

13.                                 USE OF PREMISES.  THE SUBLEASED PREMISES
SHALL BE OCCUPIED AND USED FOR GENERAL OFFICE PURPOSES, STORAGE PURPOSES, LIGHT
INDUSTRIAL/LAB PURPOSES, ASSEMBLY PURPOSES, AND PURPOSES INCIDENTAL THERETO, OR
ANY OTHER LAWFUL USES PERMITTED UNDER THE PRIME LEASE AND APPLICABLE LAW. 
EXCEPT FOR THE REPRESENTATIONS AND COVENANTS OF SUBLESSOR UNDER THIS SUBLEASE,
SUBLESSEE SHALL

 

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SATISFY ITSELF AS TO ANY EXISTING ZONING AND RESTRICTIVE COVENANTS. 
DESCRIPTIONS OR IDENTIFICATION HEREIN OF SPACES WITHIN THE SUBLEASED PREMISES AS
“OFFICE”, “WAREHOUSE”, OR OTHERWISE, SHALL NOT LIMIT THE MANNER IN WHICH
SUBLESSEE SHALL BE THE ENTITLED TO USE THE SPACE.

 

14.                                 ASSIGNMENT/SUBLETTING.

 

14.1                           RIGHT TO ASSIGN OR SUBLEASE.  SUBLESSEE SHALL
HAVE THE RIGHT TO ASSIGN THIS SUBLEASE OR SUBLEASE ALL OR A PORTION OF THE
SUBLEASED PREMISES UPON THE RECEIPT OF SUBLESSOR’S CONSENT, WHICH CONSENT SHALL
NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED EXCEPT AS PROVIDED IN THIS
SECTION 14.1.  SUBLESSEE SHALL ADVISE SUBLESSOR BY NOTICE OF (I) SUBLESSEE’S
INTENT TO ASSIGN THIS SUBLEASE OR SUBLEASE ALL OR A PORTION OF THE SUBLEASED
PREMISES, (II) THE NAME OF THE PROPOSED ASSIGNEE OR SUBLESSEE, AND (III) THE
TERMS OF THE PROPOSED ASSIGNMENT OR SUBLEASE.  IN ADDITION, SUBLESSEE SHALL
PROVIDE SUBLESSOR WITH THE NECESSARY FINANCIAL INFORMATION FOR THE ASSIGNEE. 
SUBLESSOR SHALL, WITHIN FIFTEEN (15) DAYS OF RECEIPT OF SUCH NOTICE, AND ANY
ADDITIONAL INFORMATION REQUESTED BY SUBLESSOR CONCERNING THE PROPOSED ASSIGNEE’S
OR SUBLESSEE’S FINANCIAL RESPONSIBILITY, ELECT TO:  (A) CONSENT TO SUCH PROPOSED
ASSIGNMENT OR SUBLEASE; OR (B) REFUSE SUCH CONSENT, WHICH REFUSAL SHALL BE ON
REASONABLE GROUNDS.

 

14.2                           TRANSFER TO AFFILIATES.  NOTWITHSTANDING ANYTHING
TO THE CONTRARY IN THE PRIME LEASE OR THIS ARTICLE 14, SUBLESSEE SHALL BE
ENTITLED TO ASSIGN OR SUBLET THE SUBLEASED PREMISES WITHOUT CONSENT BY PRIME
LESSOR OR SUBLESSOR TO ANY ENTITY CONTROLLING SUBLESSEE OR ANY AFFILIATE OR
ENTITY UNDER COMMON CONTROL OR CONTROLLED IN COMMON BY SUBLESSEE OR ANY OF ITS
RELATED ENTITIES.  SUBLESSEE MAY ALSO ASSIGN THIS SUBLEASE, WITHOUT PRIME
LESSOR’S AND SUBLESSOR’S CONSENT, TO ANY SUCCESSOR ENTITY, WHETHER BY MERGER,
CONSOLIDATION OR OTHERWISE, OR TO ANY PERSON OR ENTITY WHO PURCHASES ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF SUBLESSEE.  SUBLESSEE SHALL SEND SUBLESSOR A
NOTICE OF ANY TRANSFER PURSUANT TO THIS SECTION 14.2.

 

14.3                           NO RIGHT TO RECAPTURE.  SUBLESSOR SHALL HAVE NO
RIGHT TO RECAPTURE ANY PORTION OF THE SUBLEASED PREMISES SHOULD SUBLESSEE
CONTEMPLATE AN ASSIGNMENT OR SUBLEASE OF ALL OR A PORTION OF THE SUBLEASED
PREMISES.

 

14.4                           PERMITTED OCCUPANTS.  SUBLESSOR HEREBY AGREES
THAT WITHOUT SUBLESSOR’S CONSENT, SUBLESSEE MAY ENTER INTO OCCUPANCY AGREEMENTS
WITH CLIENTS, PARTNERS, GOVERNMENTAL AGENCIES AND INSTRUMENTALITIES THEREOF,
VENDORS OR AFFILIATES OF SUBLESSEE (“PERMITTED OCCUPANTS”) ALLOWING PERMITTED
OCCUPANTS TO OCCUPY PORTIONS OF THE SUBLEASED PREMISES AS LONG AS SUCH
RELATIONSHIP WAS NOT CREATED AS A SUBTERFUGE TO AVOID THE OBLIGATIONS SET FORTH
IN THIS ARTICLE 14.  SUBLESSEE SHALL PROVIDE SUBLESSOR WITH REASONABLE PRIOR
NOTICE OF ITS INTENT TO ENTER INTO ANY OCCUPANCY AGREEMENTS, WHICH NOTICE SHALL
IDENTIFY THE PERMITTED OCCUPANT.

 

15.                                 MAINTENANCE AND REPAIR/DAMAGE AND
DESTRUCTION.

 

15.1                           SUBLESSOR’S RESPONSIBILITIES.  SUBLESSOR SHALL
CONTINUE TO RETAIN RESPONSIBILITY AND SHALL MAINTAIN, REPAIR AND RESTORE THE
BUILDINGS, THE PROJECT COMMON AREA, INCLUDING WITHOUT LIMITATION THE PARKING
FACILITIES, THE CENTRAL PLANT AND ALL LINES AND OTHER BUILDING SYSTEMS CONNECTED
TO THE CENTRAL PLANT, THE LAND, AND THE SUBLEASED PREMISES, AND SHALL COMPLY
WITH ALL OBLIGATIONS UNDER THE PRIME LEASE, AND THIS SUBLEASE.  EXCEPT FOR
SUBLESSEE’S

 

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OBLIGATIONS UNDER (A) SECTION 3 OF THIS SUBLEASE FOR THE PAYMENT OF PROJECT
OPERATING EXPENSES AND BUILDING OPERATING EXPENSES, AND (B) SECTION 15.2 BELOW,
SUBLESSEE SHALL HAVE NO RESPONSIBILITY FOR SUCH MAINTENANCE AND REPAIR.  IN
CARRYING OUT SUBLESSOR’S MAINTENANCE AND REPAIR OBLIGATIONS HEREUNDER, SUBLESSOR
HEREBY AGREES TO PERFORM SUCH OBLIGATIONS IN A MANNER AT LEAST EQUAL TO THE
LEVEL OF PERFORMANCE OF SUCH OBLIGATIONS PROVIDED BY COMPARABLE SUBLESSORS TO
OTHER COMPARABLE OFFICE BUILDINGS IN THE CITY OF SAN DIEGO.  THE OBLIGATIONS OF
SUBLESSOR HEREUNDER SHALL INCLUDE THE MAINTENANCE, REPAIR AND/OR CAPITAL
REPLACEMENTS OF (A) THE HVAC SYSTEM, EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 15.2 TO THE CONTRARY; (B) ALL “BUILDING SYSTEMS”(AS HEREINAFTER DEFINED)
AND THE CENTRAL PLANT, (C) IMBEDDED PLUMBING AND ELECTRICAL (D) “LIFE SAFETY
SYSTEMS” (AS HEREINAFTER DEFINED), (E) THE ROOF, THE ROOF DRAINAGE SYSTEMS AND
THE ROOF MEMBRANE, (F) EXTERIOR WALLS, (G) FOUNDATIONS, SLABS, FLOORS AND
RETAINING WALLS (H) ALL STRUCTURAL PORTIONS OF THE BUILDINGS (I) THE PROJECT
COMMON AREA, INCLUDING WITHOUT LIMITATION THE PARKING FACILITIES, (J) CURTAIN
WALL, EXTERIOR GLASS AND MULLIONS, COLUMNS, BEAMS, SHAFTS (INCLUDING ELEVATOR
SHAFTS EXCEPT TO THE EXTENT SUBLESSEE IS OBLIGATED TO DO SO UNDER SECTION 12),
ELEVATOR CABS (EXCEPT TO THE EXTENT SUBLESSEE IS OBLIGATED TO DO SO UNDER
SECTION 12), PLAZAS, PAVEMENT, SIDEWALKS, CURBS, ENTRANCES, DRIVEWAYS, ART WORK,
LANDSCAPING, EXTERIOR SIGNAGE OTHER THAN SUBLESSEE’S, ELECTRICAL AND TELEPHONE
CLOSETS.  THE TERM “BUILDING SYSTEMS” AS USED HEREIN SHALL MEAN AND REFER TO THE
BASE BUILDING MECHANICAL, ELECTRICAL, LIFE, SAFETY, PLUMBING, SPRINKLER SYSTEMS
AND HVAC WHICH ARE NOT CONSTRUCTED SOLELY FOR THE BENEFIT OF SUBLESSEE.  THE
TERM “LIFE SAFETY SYSTEMS” SHALL MEAN ALL DEVICES INSTALLED AND/OR REQUIRED BY
APPLICABLE LAW TO BE INSTALLED IN AND AROUND THE BUILDINGS TO PROTECT AGAINST
INJURY TO PERSON AND PROPERTY RESULTING FROM FIRE, EARTHQUAKE OR OTHER CASUALTY,
INCLUDING WITHOUT LIMITATION SPRINKLER SYSTEMS.  SUBLESSOR SHALL ALSO MAINTAIN
ALL OF THE PROJECT COMMON AREAS AND THE PARKING FACILITIES IN FIRST CLASS
CONDITION AND REPAIR AND PROMPTLY REMOVE ANY GRAFFITI.  SUBLESSEE HEREBY AGREES
THAT SUBLESSOR SHALL HAVE THE RIGHT, ON REASONABLE PRIOR NOTICE (SUBJECT TO THE
PROVISIONS OF THIS SUBLEASE WHICH LIMIT AND CONDITION SUBLESSOR’S RIGHTS OF
ENTRY), TO ENTER THE SUBLEASED PREMISES IN ORDER TO PERFORM ITS OBLIGATIONS
UNDER THIS SUBLEASE, BUT SHALL USE ALL REASONABLE EFFORTS TO MINIMIZE DISRUPTION
TO SUBLESSEE’S BUSINESS IN THE PERFORMANCE OF ANY SUCH WORK.

 

15.2                           SUBLESSEE’S RESPONSIBILITIES.  SUBJECT TO
SUBLESSOR’S OBLIGATIONS IN SECTION 15.1 ABOVE, SUBLESSEE SHALL, AT SUBLESSEE’S
SOLE COST AND EXPENSE, KEEP THE FIRST FLOOR OF THE SUBLEASED PREMISES AND THE
SECOND FLOOR OF THE SUBLEASED PREMISES IN GOOD AND SANITARY CONDITION AT ALL
TIMES DURING THE FULL SUBLEASE TERM.  SO LONG AS SUBLESSEE IS THE SOLE OCCUPANT
OF THE SUBJECT BUILDING, AND THEREAFTER, TO THE EXTENT THAT THE FOLLOWING
EXCLUSIVELY SERVICE THE BUILDING SPACE OF THE SUBLEASED PREMISES IN THE SUBJECT
BUILDING, SUBLESSEE SHALL CAUSE TO MAINTAINED (A) THE FOLLOWING PORTIONS OF THE
HVAC SYSTEM: AIR HANDLERS ON THE ROOF (REPAIR AND MAINTENANCE ONLY) AND DUCTING
WITHIN THE INTERIOR OF THE SUBJECT BUILDING (REPAIR AND MAINTENANCE ONLY), (B)
NON-EMBEDDED ELECTRICAL OUTLETS AND FACILITIES SERVICING THE RENTABLE SQUARE
FOOTAGE OF THE SUBLEASED PREMISES IN THE SUBJECT BUILDING, (C) INTERIOR CEILINGS
AND FLOOR COVERINGS OF THE RENTABLE SQUARE FOOTAGE OF THE SUBLEASED PREMISES IN
THE SUBJECT BUILDING,(D) INTERIOR PAINT OF THE RENTABLE SQUARE FOOTAGE OF THE
SUBLEASED PREMISES IN THE SUBJECT BUILDING, (E) INTERIOR WINDOW GLASS, (F)
JANITORIAL WORK CUSTOMARY FOR OFFICE AND WAREHOUSE USE, (G) LIGHTS AND LIGHTING
WITHIN THE RENTABLE AREA OF THE SUBLEASED PREMISES IN THE SUBJECT BUILDING, (H)
SUBJECT BUILDING SECURITY SYSTEMS, AND SUBLESSEE SHALL KEEP ALL OF SUCH IN GOOD
OPERATING CONDITION AND (I) THE SPECIFIC OBLIGATIONS OF SUBLESSEE IN SECTION 12
PERTAINING TO THE ELEVATORS (COLLECTIVELY, “SUBLESSEE’S OBLIGATIONS”).  ALL OF
SUBLESSEE’S OBLIGATIONS SHALL BE PERFORMED AT

 

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SUBLESSEE’S SOLE COST AND EXPENSE AND SHALL BE EXCLUDED FROM BUILDING OPERATING
EXPENSES.  ALL DAMAGE, INJURY OR BREAKAGE TO ANY PART OR PORTION OF THE
SUBLEASED PREMISES (OTHER THAN THE BUILDING STRUCTURE AND BUILDING SYSTEMS)
CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF SUBLESSEE SHALL BE PROMPTLY
REPAIRED BY SUBLESSEE, AT SUBLESSEE’S SOLE COST AND EXPENSE; PROVIDED, HOWEVER,
THAT SUBLESSEE SHALL BE ENTITLED TO REIMBURSEMENT FOR ANY PORTION OF SUCH REPAIR
OR RESTORATION EXPENSE TO THE EXTENT THAT THE COST OF ANY SUCH REPAIR IS OR
SHOULD BE COVERED BY INSURANCE OBTAINED OR REQUIRED TO BE OBTAINED BY SUBLESSOR
UNDER THIS SUBLEASE.  UNDER NO CIRCUMSTANCES SHALL SUBLESSEE’S OBLIGATIONS
INCLUDE ANY OBLIGATION TO REPAIR ANY DEFECTS (LATENT OR PATENT) IN THE BUILDINGS
AND/OR IN THE PROJECT COMMON AREA, INCLUDING WITHOUT LIMITATION PARKING
FACILITIES AND/OR TO MAKE THE BUILDINGS, THE PROJECT COMMON AREAS AND/OR THE
PARKING FACILITIES IN COMPLIANCE WITH APPLICABLE LAWS, ORDINANCES, RULES AND
REGULATIONS AND/OR PERMITS (“APPLICABLE LAWS”) (AND THROUGH THE FULL SUBLEASE
TERM ANY CHANGE IN APPLICABLE LAWS), UNLESS AND ONLY TO THE EXTENT THAT SUCH
COMPLIANCE BECOMES NECESSARY SOLELY DUE TO SUBLESSEE’S USE OF THE SUBLEASED
PREMISES FOR OTHER THAN GENERAL OFFICE USE AND WAREHOUSE USE OR FOR A USE WHICH
IS NOT PERMITTED BY THE CURRENT APPLICABLE ZONING REGULATIONS FOR THE CITY OF
SAN DIEGO.  A PORTION OF THE SUBLEASED PREMISES CONSISTS OF A CAFETERIA.  DURING
ALL PORTIONS OF THE FULL SUBLEASE TERM DURING WHICH SUBLESSEE IS IN POSSESSION
AND CONTROL OF THE CAFETERIA, SUBLESSEE SHALL MAINTAIN THE GREASE TRAP IN THE
CAFETERIA.

 

16.                                 INSURANCE.  DURING THE FULL SUBLEASE TERM,
SUBLESSEE AGREES TO PROVIDE THE LIABILITY INSURANCE REQUIRED OF SUBLESSOR, AS
TENANT, UNDER SECTION 20.1(B) OF THE PRIME LEASE (BUT EXCLUDING CONTRACTUAL
LIABILITY FOR INDEMNIFICATION UNDER THE PRIME LEASE) AND PROPERTY INSURANCE FOR
SUBLESSEE’S FURNITURE, FIXTURES AND PERSONAL PROPERTY AS REQUIRED OF SUBLESSOR
UNDER SECTION 12.2(A)(II) OF THE PRIME LEASE (WHICH SHALL PROVIDE FOR A WAIVER
OF SUBROGATION IN FAVOR OF SUBLESSOR AND PRIME LESSOR) AND SHALL NAME SUBLESSOR
AND THE PRIME LESSOR AS ADDITIONAL NAMED INSUREDS ON SUCH INSURANCE POLICIES. 
SUBLESSEE SHALL ALSO BE REQUIRED TO OBTAIN WORKERS’ COMPENSATION INSURANCE AS
REQUIRED BY LAW.  SUBLESSOR SHALL CONTINUE TO MAINTAIN ALL OTHER COVERAGES OF
INSURANCE REQUIRED BY THE PRIME LEASE.

 

17.                                 UTILITIES.

 

17.1                           BACKGROUND. THE PROJECT WAS ORIGINALLY DEVELOPED
SO THAT THE SUBJECT BUILDING AND THE ADJACENT BUILDING WOULD BE OCCUPIED BY A
SINGLE USER. THIS MEANS THAT THE PROJECT IS SERVED BY ONLY ONE ELECTRIC METER
AND ONE GAS METER.  THE SAME IS TRUE OF WATER CONSUMED BY THE CENTRAL PLANT. 
THEREFORE, SUBLESSOR HAS DEVELOPED A COST ALLOCATION MODEL (THE “OPERATING
EXPENSE ALLOCATION MODEL”) ATTACHED HERETO AS EXHIBIT “I” AND INCORPORATED
HEREIN BY THIS REFERENCE, FOR THE EFFECTIVE ALLOCATION OF THE COST OF
ELECTRICITY, NATURAL GAS, AND CENTRAL PLANT WATER BETWEEN THE SUBJECT BUILDING
AND THE ADJACENT BUILDING.

 

17.2                           SUBLESSOR PROVIDED UTILITIES.  SUBLESSOR SHALL
PROVIDE ELECTRIC POWER AND NATURAL GAS SERVICE TO THE SUBJECT BUILDING AND
CENTRAL PLANT WATER FOR THE HVAC SYSTEM IN THE SUBLEASED PREMISES (COLLECTIVELY,
THE “SUBLESSOR PROVIDED UTILITIES”).  THE COST OF THE SUBLESSOR PROVIDED
UTILITIES SHALL BE  EXCLUDED AND PAID SEPARATELY FROM PROJECT OPERATING
EXPENSES, AND SHALL BE ALLOCATED BETWEEN SUBLESSEE AND SUBLESSOR OR OTHER
BUILDING TENANTS ACCORDING TO THE OPERATING EXPENSE ALLOCATION MODEL.  SO LONG
AS SUBLESSEE IS THE SOLE TENANT OF THE SUBJECT BUILDING, SUBLESSEE SHALL PAY TO
SUBLESSOR FOR THE SUBLESSOR PROVIDED UTILITIES IN ACCORDANCE

 

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WITH SECTION 3.5 ABOVE, AS ILLUSTRATED ON THE OPERATING EXPENSE ALLOCATION
MODEL.  SUBLESSEE SHALL BE RESPONSIBLE FOR OBTAINING AND PAYING FOR, SEPARATE
AND APART FROM, AND IN ADDITION TO THE OPERATING EXPENSES, ALL COSTS OF DOMESTIC
WATER SERVICE, TELEPHONE SERVICE, AND ANY OTHER UTILITIES OTHER THAN THOSE
SPECIFIED ABOVE THAT SUBLESSEE REQUIRES IN THE SUBLEASED PREMISES.  NO
MAINTENANCE AND/OR REPAIR OF THE UTILITIES SERVING THE SUBLEASED PREMISES AND/OR
THE SUBJECT BUILDING BY SUBLESSOR WHICH COULD CAUSE A DISRUPTION OF SUCH UTILITY
SERVICES SHALL BE SCHEDULED BY SUBLESSOR WITHOUT OBTAINING SUBLESSEE’S PRIOR
CONSENT AS TO THE TIMING OF SUCH MAINTENANCE OR REPAIR.

 

17.3                           METERS.  SUBLESSOR SHALL USE COMMERCIALLY
REASONABLE EFFORTS TO CAUSE SUB-METERS FOR ELECTRICAL POWER AND NATURAL GAS
SERVICE TO BE INSTALLED IN THE SUBJECT BUILDING BEFORE THE FIRST PHASE DELIVERY
DATE IN ORDER TO MEASURE SUBLESSEE’S CONSUMPTION OF ELECTRICITY AND NATURAL GAS;
PROVIDED, HOWEVER, THAT DELAYS IN INSTALLING SUCH SUB-METERS SHALL NOT DELAY OR
EXCUSE SUBLESSEE’S OBLIGATION TO PAY FOR ELECTRICITY AND NATURAL GAS EFFECTIVE
AS OF THE FIRST PHASE DELIVERY DATE.  UPON INSTALLATION OF THE SUB-METERS, THE
OPERATING EXPENSE ALLOCATION MODEL WILL BE MODIFIED TO PROVIDE FOR DIRECT
PAYMENT BY SUBLESSEE OF THE UTILITY OR UTILITIES FOR WHICH METERS ARE INSTALLED.

 

18.                                 PARKING.  SUBLESSEE SHALL BE ENTITLED TO USE
ALL PARKING SPACES IN THE “PARKING FACILITIES” EXCEPT FOR THE 115 PARKING STALLS
WITHIN THE ADJACENT BUILDING PARKING AREA.  SUBLESSOR REPRESENTS AND WARRANTS TO
SUBLESSEE THAT NO OCCUPANT OF THE ADJACENT BUILDING HAS ANY RIGHT UNDER ITS
LEASE OR OTHER AGREEMENT TO USE ANY PORTION OF THE PROJECT COMMON AREA FOR THE
PARKING OF MOTOR VEHICLES EXCEPT FOR THE ADJACENT BUILDING PARKING AREA. 
SUBLESSEE SHALL HAVE NO OBLIGATION TO PAY FOR THE PARKING RIGHTS PROVIDED IN
THIS SUBLEASE DURING THE FULL SUBLEASE TERM.  NO LATER THAN THE COMMENCEMENT
DATE OF THE FIRST PHASE, SUBLESSOR SHALL CAUSE ALL OF THE PARKING STALLS IN THE
PARKING FACILITIES TO BE MARKED TO INDICATE WHETHER SUBLESSEE OR THE OCCUPANT OF
THE ADJACENT BUILDING IS PERMITTED TO USE THE SAME FOR PARKING IN ACCORDANCE
WITH THE SITE PLAN ATTACHED AS EXHIBIT “C”.  SUBLESSOR SHALL ENFORCE THE TERMS
OF THE LEASE AND OTHER AGREEMENTS AFFECTING THE ADJACENT BUILDING TO INSURE THAT
SUBLESSEE’S EXCLUSIVE USE OF THE PARKING FACILITIES OTHER THAN THE ADJACENT
BUILDING PARKING AREA IS NOT INTERFERED WITH OR INTERRUPTED.  IT IS UNDERSTOOD
THAT SUBLESSEE INTENDS TO BLOCK THE DRIVEWAY ON THE WESTERLY BOUNDARY OF THE
SUBJECT PARCEL THAT CONNECTS THE LAND WITH PROPERTY OWNED BY SUBLESSOR ABUTTING
THE WESTERLY BOUNDARY OF THE SUBJECT PARCEL.  SUBLESSEE SHALL NOT HAVE ANY RIGHT
OF INGRESS OR EGRESS TO USE SUCH DRIVEWAY TO TRAVEL ACROSS SUBLESSOR’S ADJOINING
PROPERTY AT ANY TIME DURING THE SUBLEASE TERM.

 

19.                                 SIGNAGE.  SUBJECT TO THE APPROVAL BY PRIME
LESSOR UNDER THE PRIME LEASE AND TO ALL APPLICABLE LAWS, SUBLESSEE SHALL HAVE
THE RIGHT TO EXCLUSIVE BUILDING TOP AND OTHER SIGNAGE AS SUBLESSEE DESIRES. 
SUCH EXCLUSIVE RIGHTS SHALL INCLUDE MONUMENT SIGNS, EXTERIOR BUILDING ENTRANCE
DIRECTIONAL SIGNAGE, LOBBY SIGNAGE, INCLUDING SUBLESSEE’S LOGO AND NAME, ON THE
ENTRANCE DOORS, IN THE LOBBY AND IN THE ELEVATOR LOBBY ON ANY FLOOR COMPRISING
PART OF THE SUBLEASED PREMISES.  SUBLESSOR SHALL HAVE NO RIGHT TO MAINTAIN
SUBLESSOR IDENTIFICATION SIGNS IN ANY OTHER LOCATION IN, ON, OR ABOUT THE
SUBJECT BUILDING AND THE PARKING FACILITIES SHALL REMOVE ALL EXISTING “CYMER”
SIGNAGE PRIOR TO THE FIRST PHASE DELIVERY DATE.  THE COST OF ALL SUCH SIGNS,
INCLUDING THE INSTALLATION, MAINTENANCE AND REMOVAL THEREOF, SHALL BE AT
SUBLESSEE’S SOLE COST AND EXPENSE.  IN THE EVENT OF AN ASSIGNMENT OF THIS
SUBLEASE OR A SUBLEASE OF ALL OR A PORTION OF THE

 

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SUBLEASED PREMISES BY SUBLESSEE (TO OTHER THAN A SECTION 14.2 AFFILIATE), THE
SIGNAGE RIGHTS GRANTED TO SUBLESSEE HEREIN MAY ONLY BE TRANSFERRED TO THE EXTENT
SUBLESSEE’S TRANSFEREE HAS A REPUTATION IN THE CORPORATE COMMUNITY WITH RESPECT
TO IMAGE AND REPUTATION THAT WOULD BE GENERALLY ACCEPTABLE TO THE MAINSTREAM
BUSINESS COMMUNITY.  NOTWITHSTANDING THE FOREGOING, IF THERE ARE OTHER TENANTS
IN THE BUILDING, THEY SHALL BE ENTITLED TO REASONABLE SIGNAGE,

 

20.                                 SECURITY.  SUBLESSEE MAY PROVIDE, AT
SUBLESSEE’S SOLE COST AND EXPENSE, SUCH SECURITY PERSONNEL AS IT DETERMINES TO
BE NECESSARY IN THE SUBLEASED PREMISES.

 

21.                                 NONDISTURBANCE.  UPON REQUEST OF SUBLESSEE,
SUBLESSOR SHALL USE ITS COMMERCIALLY REASONABLE BEST EFFORTS TO PROVIDE
SUBLESSEE WITH A NON-DISTURBANCE AGREEMENT ACCEPTABLE TO SUBLESSEE FROM ANY
CURRENT OR FUTURE GROUND LESSORS, MORTGAGE HOLDERS OR LIEN HOLDERS OF ALL OR ANY
PORTION OF THE LAND, THE BUILDINGS AND THE PROJECT COMMON AREA.  SUBLESSEE SHALL
COOPERATE WITH SUBLESSOR IN OBTAINING ANY SUCH AGREEMENT. DELAYS IN OBTAINING
SUCH AGREEMENT SHALL NOT DELAY OR POSTPONE THE EFFECTIVE DATE OR SUBLESSEE’S
OBLIGATION TO PAY RENT.  SUCH NON-DISTURBANCE AGREEMENT SHALL ACKNOWLEDGE
SUBLESSEE’S RIGHT OF POSSESSION AND SUBLESSEE’S OFFSET RIGHTS AND THAT, TO THE
EXTENT ANY OF THE CONCESSIONS TO BE PROVIDED TO SUBLESSEE HAVE NOT BEEN FULLY
FUNDED OR PERFORMED BY SUBLESSOR OR PRIME LESSOR AT THE TIME OF A FORECLOSURE,
DEED IN LIEU OF FORECLOSURE OR ANY OTHER TRANSFER OF THE SUBJECT BUILDING AS A
RESULT OF A DEFAULT OF PRIME LESSOR OR SUBLESSOR UNDER THE TERMS OF THE
APPLICABLE GROUND LEASE, LOAN DOCUMENTS, ETC., SUBJECT TO ANY LENDER PROTECTIONS
SET FORTH IN THE LEASE.  SUBLESSEE, TO THE EXTENT SUBLESSEE PAYS OR HAS PAID
SUCH UNFUNDED AMOUNT, MAY DEDUCT THE UNFUNDED AMOUNT OR EQUIVALENT VALUE
THEREOF, TOGETHER WITH INTEREST, FROM THE ANY RENT AND OTHER AMOUNTS OWED BY
SUBLESSEE TO SUBLESSOR NEXT BECOMING DUE AND PAYABLE.  THE NON-DISTURBANCE
AGREEMENT FROM PRIME LESSOR WILL PROVIDE, AMONG OTHER THINGS, THAT IN THE EVENT
THE PRIME LEASE TERMINATES, THIS SUBLEASE WILL BECOME A DIRECT LEASE BETWEEN
SUBLESSEE AND THE SUCCESSOR TO PRIME LESSOR AND/OR PRIME LESSOR’S INTEREST IN
THE SUBJECT BUILDING.  PRIME LESSOR AGREES THAT SUBLESSEE’S POSSESSION OF THE
SUBLEASED PREMISES SHALL NOT BE DISTURBED, NOR SHALL THIS SUBLEASE BE TERMINATED
IN THE EVENT OF SUBLESSOR’S DEFAULT UNDER, AND A SUBSEQUENT TERMINATION OF, THE
PRIME LEASE, AND THIS SUBLEASE SHALL CONTINUE IN FULL FORCE AND EFFECT WITH
PRIME LESSOR UNDERTAKING THE OBLIGATIONS OF SUBLESSOR HEREUNDER, OR PRIME
LESSOR, AT ITS OPTION, MAY ELECT TO ENTER INTO A NEW DIRECT LEASE WITH SUBLESSEE
UPON THE SAME TERMS AND CONDITIONS AS SET FORTH HEREIN UPON SUCH A TERMINATION
OF THE PRIME LEASE.  SUBLESSOR AGREES THAT IT SHALL BE A CONDITION PRECEDENT TO
ANY SUBSEQUENT LOAN THAT SUCH LENDER AGREE THAT IT WILL PROVIDE A
NON-DISTURBANCE AGREEMENT IN FORM REASONABLE ACCEPTABLE TO SUBLESSEE WITH
RESPECT TO THIS SUBLEASE.

 

22.                                 ROOF RIGHTS.  AT ANY TIME DURING THE FULL
SUBLEASE TERM, SUBJECT TO APPLICABLE LAWS SUBLESSEE MAY INSTALL, AT SUBLESSEE’S
SOLE COST AND EXPENSE, TELECOMMUNICATIONS ANTENNAS, MICROWAVE DISHES AND OTHER
COMMUNICATIONS EQUIPMENT (“TELECOMMUNICATIONS EQUIPMENT”) UPON THE ROOF OF THE
SUBLEASED PREMISES.  THE PHYSICAL APPEARANCE OF THE TELECOMMUNICATIONS EQUIPMENT
SHALL BE SUBJECT TO SUBLESSOR’S REASONABLE APPROVAL.  SUCH APPROVAL SHALL BE
DEEMED TO HAVE BEEN GRANTED UNLESS PRIOR TO THE EXPIRATION OF THE TEN (10) DAY
PERIOD IMMEDIATELY FOLLOWING SUBLESSOR’S RECEIPT OF THE REQUEST FOR APPROVAL,
TOGETHER WITH PLANS DEPICTING THE LOCATION OF SAME, SUBLESSOR FAILS TO DELIVER
TO SUBLESSEE WRITTEN NOTICE OF ITS DISAPPROVAL OF SAME AND PROVIDE REASONS FOR
SUCH DISAPPROVAL.  THE DESIGNATED LOCATION SHALL PROVIDE FOR THE PROPER
FUNCTIONING OF SUBLESSEE’S TELECOMMUNICATIONS EQUIPMENT.  AT THE TIME OF THE
REQUEST FOR

 

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APPROVAL, SUBLESSOR MAY REQUIRE SUBLESSEE TO INSTALL SCREENING AROUND SUCH
TELECOMMUNICATIONS EQUIPMENT, AT SUBLESSEE’S SOLE COST AND EXPENSE, AS
REASONABLY DESIGNATED BY SUBLESSOR.  SUBLESSEE SHALL BE RESPONSIBLE FOR SECURING
THE APPROVAL OF ALL GOVERNMENTAL AUTHORITIES AND ALL PERMITS REQUIRED BY
GOVERNMENTAL AUTHORITIES HAVING JURISDICTION OVER SUCH APPROVALS AND PERMITS FOR
THE TELECOMMUNICATIONS EQUIPMENT, AND SHALL PROVIDE COPIES OF SUCH APPROVALS AND
PERMITS TO SUBLESSOR.  SUBLESSEE SHALL MAINTAIN SUCH TELECOMMUNICATIONS
EQUIPMENT, AT SUBLESSEE’S SOLE COST AND EXPENSE.  IN ADDITION, SUBLESSEE SHALL,
AT SUBLESSEE’S SOLE COST AND EXPENSE, PRIOR TO THE EXPIRATION OR EARLIER
TERMINATION OF THIS SUBLEASE, REMOVE ANY TELECOMMUNICATIONS EQUIPMENT AND
RESTORE THE AFFECTED AREA TO THE CONDITION EXISTING PRIOR TO SUBLESSEE’S
INSTALLATION THEREOF, REASONABLE WEAR AND TEAR AND DAMAGE FROM CASUALTY AND
CONDEMNATION, EXCEPTED.  SUBLESSOR ACKNOWLEDGES THAT SUBLESSEE MAY BE STORING
CLASSIFIED OR CONFIDENTIAL MATERIALS AND INFORMATION IN CONNECTION WITH ITS
BUSINESS OPERATIONS FROM THE SUBLEASED PREMISES.  ACCORDINGLY, FROM AND AFTER
DELIVERY OF POSSESSION TO SUBLESSEE, NEITHER SUBLESSOR, SUBLESSOR, OR OTHER
OCCUPANT OF THE SUBJECT BUILDING, NOR ANY OF THEIR RESPECTIVE AGENTS, EMPLOYEES
OR CONTRACTORS SHALL GO ONTO THE ROOF WITHOUT PROVIDING SUBLESSEE AT LEAST FIVE
(5) BUSINESS DAYS’ PRIOR WRITTEN NOTICE OF THE SPECIFIC DATE AND TIME OF SUCH
INTENDED ENTRY, WHICH ENTRY SHALL AT ALL TIMES BE ACCOMPANIED BY A
REPRESENTATIVE OF SUBLESSEE; PROVIDED, HOWEVER, THAT SUBLESSEE MAY ALSO ELECT TO
RESCHEDULE SUCH INSPECTION UPON NOTICE TO SUBLESSOR.  IN ADDITION, NEITHER PRIME
LESSOR, SUBLESSOR, THEIR RESPECTIVE AGENTS AND EMPLOYEES, NOR ANY OTHER PERSON
SHALL INSTALL ANY EQUIPMENT OR MAKE OTHER ALTERATIONS TO THE ROOF WITHOUT THE
PRIOR WRITTEN NOTICE TO SUBLESSEE, WHICH APPROVAL SHALL NOT BE WITHHELD IF SUCH
INSTALLATION AND USE WILL NOT INTERFERE WITH THE PROPER OPERATION OF SUBLESSEE’S
EQUIPMENT ON THE ROOF AND SUBLESSEE’S SECURITY CONSIDERATIONS.  IN CONNECTION
WITH PROVIDING SUCH CONSENT, SUBLESSEE SHALL HAVE THE RIGHT TO REVIEW AND
APPROVE ANY SUCH EQUIPMENT OR ALTERATIONS DESIRED TO BE INSTALLED OR MADE TO THE
ROOF (INCLUDING MAKE AND MANUFACTURER), DESIGNATE OR APPROVE THE CONTRACTOR OR
INSTALLER PERFORMING SUCH WORK, AND HAVE A REPRESENTATIVE OF SUBLESSEE ACCOMPANY
SUCH CONTRACTOR OR INSTALLER AT ANY TIME SUCH WORK ON THE ROOF IS BEING
PERFORMED.

 

23.                                 SECURED AREAS.  SUBLESSOR ACKNOWLEDGES THAT
SUBLESSEE IS ENGAGED IN ACTIVITIES RELATING TO THE NATIONAL DEFENSE OF THE
UNITED STATES REQUIRING STRICT COMPLIANCE WITH APPLICABLE U.S. GOVERNMENT
SECURITY REQUIREMENTS AND REGULATIONS.  ACCORDINGLY, SUBLESSOR AND PRIME LESSOR
SHALL NOT EXERCISE ANY RIGHT IN THE PRIME LEASE OR HEREIN SET FORTH TO ENTER THE
SUBLEASED PREMISES EXCEPT IN THE CASE OF EMERGENCY OR IN THE EVENT OF A
SUBLESSOR INSPECTION, IN WHICH CASE SUBLESSOR SHALL PROVIDE SUBLESSEE WITH FIVE
(5) BUSINESS DAYS’ PRIOR WRITTEN NOTICE OF THE SPECIFIC DATE AND TIME OF SUCH
SUBLESSOR INSPECTION; PROVIDED, HOWEVER, THAT SUBLESSEE MAY ELECT TO
RESCHEDULE SUCH INSPECTION UPON NOTICE TO SUBLESSOR.  A REPRESENTATIVE OF
SUBLESSEE SHALL BE PRESENT UPON ANY ENTRY BY SUBLESSOR INTO THE SUBLEASED
PREMISES.  SUBLESSOR AGREES TO COOPERATE WITH SUBLESSEE IN TAKING ALL SUCH
MEASURES AS MAY BE NECESSARY OR APPROPRIATE TO LIMIT ACCESS TO THE SUBLEASED
PREMISES OR OTHERWISE TO COMPLY WITH APPLICABLE U.S. GOVERNMENT SECURITY
STANDARDS AND REGULATIONS AND SHALL NOT PERMIT ANYONE TO TAKE PICTURES OR VIDEOS
OF THE SUBLEASED PREMISES OR ANY PORTION THEREOF WITHOUT THE EXPRESS WRITTEN
CONSENT OF SUBLESSEE.  DURING THE TIME SUBLESSEE SUBLEASES THE SUBLEASED
PREMISES, ALL OF SUBLESSOR’S AND PRIME LESSOR’S EMPLOYEES MAY BE REQUIRED TO
UNDERGO BACKGROUND INVESTIGATIONS AND SHALL OBTAIN A SECURITY BADGE FROM
SUBLESSEE TO BE ALLOWED ACCESS INTO THE SUBJECT BUILDING.  ALL SUBLESSOR
EMPLOYEES WHO DO NOT HAVE A SECURITY BADGE ISSUED BY SUBLESSEE FOR THE SUBJECT
BUILDING, AS WELL AS THEIR VISITORS, SHALL BE REQUIRED TO NOTIFY SUBLESSEE’S
SECURITY PERSONNEL AT LEAST FORTY-EIGHT (48) HOURS

 

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IN ADVANCE OF THEIR VISIT TO THE SUBJECT BUILDING TO ENABLE SUBLESSEE OR ITS
SECURITY PERSONNEL THE TIME NECESSARY TO PERFORM BACKGROUND INVESTIGATIONS. 
SUBLESSEE RETAINS THE RIGHT TO EXCLUDE ANY PERSON FROM ENTERING THE SUBJECT
BUILDING, IN ITS REASONABLE DISCRETION.  TO THE EXTENT SUBLESSOR PERFORMS WORK
ON OR LEASES ANY OTHER PORTIONS OF THE SUBJECT BUILDING, SUBLESSOR SHALL NOTIFY
SUBLESSEE IN ADVANCE OF SAME AND SHALL COORDINATE THE PERFORMANCE OF ANY
REQUISITE WORK WITH SUBLESSEE TO MAINTAIN AT ALL TIMES THE SECURITY OF THE
SUBLEASED PREMISES.  SUBLESSEE SHALL HAVE THE RIGHT TO INSTALL SUCH SECURITY
EQUIPMENT, INCLUDING WITHOUT LIMITATION, BADGE READERS AND KEY CARD ACCESS
DEVICES, AND OTHER SECURITY RELATED HARDWARE AND EQUIPMENT, ALL OF WHICH SHALL
REMAIN THE PROPERTY OF SUBLESSEE AND SHALL BE REMOVED FROM THE SUBLEASED
PREMISES BY SUBLESSEE UPON THE TERMINATION OR EXPIRATION OF THIS SUBLEASE. 
SUBLESSEE SHALL PROMPTLY REPAIR ANY DAMAGE TO THE SUBLEASED PREMISES OCCASIONED
BY THE REMOVAL OF SUCH FIXTURES, HARDWARE OR EQUIPMENT.

 

24.                                 HAZARDOUS MATERIALS.  SUBLESSOR HEREBY
AGREES THAT TO THE EXTENT ANY HAZARDOUS MATERIALS ARE CURRENTLY LOCATED IN, ON
OR AROUND THE SUBLEASED PREMISES AND TO THE EXTENT ANY HAZARDOUS MATERIALS ARE
FOUND IN, ON OR AROUND THE SUBLEASED PREMISES AND/OR THE LAND AFTER THE DATE OF
FULL EXECUTION AND DELIVERY OF THIS SUBLEASE AND SAME WERE NOT PLACED IN THE
SUBLEASED PREMISES BY SUBLESSEE, ITS AGENTS, EMPLOYEES, CONTRACTORS, INVITEES OR
LICENSEES, SUBLESSOR SHALL BE RESPONSIBLE FOR ALL COSTS IN CONNECTION WITH SAME,
WHICH COSTS SHALL NOT BE INCLUDED IN OPERATING EXPENSES.  SUBLESSOR AGREES TO
PROMPTLY REMEDIATE ALL SUCH HAZARDOUS MATERIALS TO THE EXTENT REQUIRED BY LAW
(OR ANY GOVERNMENTAL AGENCY WITH JURISDICTION THEREON) TO BE REMOVED, SHALL KEEP
SUBLESSEE INFORMED AS TO THE SCHEDULING OF ANY SUCH REMEDIAL OR RELATED WORK,
AND SHALL INDEMNIFY, DEFEND AND HOLD SUBLESSEE HARMLESS IN CONNECTION
THEREWITH.  SUBLESSOR ACKNOWLEDGES THAT IN CONNECTION WITH THIS SUBLEASE,
SUBLESSEE SHALL BE PERFORMING A PHASE 1 ENVIRONMENTAL SURVEY AND CONDUCTING
OTHER ENVIRONMENTAL AND RELATED TESTING.  SUBLESSOR WARRANTS, THAT EXCEPT AS
PROVIDED BY EXHIBIT “H” ATTACHED HERETO AND MADE A PART HEREOF (THE “DISCLOSURE
NOTICE”), NEITHER SUBLESSOR, THE PRIME LESSOR NOR ANY PRECEDING OWNERS, LESSEES
OR SUBLESSEES OF THE LAND OR SUBLEASED PREMISES HAVE USED ALL, OR ANY PORTION,
OF SAME FOR THE PRODUCTION, DISPOSAL OR STORAGE OF ANY HAZARDOUS MATERIALS (AS
DEFINED BELOW), AND SUBLESSOR IS NOT AWARE OF ANY SUCH PRIOR USE OR ANY
PROCEEDING OR INQUIRY BY A GOVERNMENTAL AUTHORITY WITH RESPECT TO THE PRESENCE
OF SUCH WASTE OR SUBSTANCE ON THE PROPERTY OR THE MOVEMENT THEREOF FROM OR TO
ADJOINING PROPERTY. SUBLESSOR WARRANTS THERE IS NO ASBESTOS IN THE SUBJECT
BUILDING AND PARKING FACILITY.  SUBLESSOR WILL NOT, AT ANY TIME, USE OR PERMIT
THE USE OF ANY PORTION OF SUBLEASED PREMISES, THE BUILDINGS, PARKING FACILITIES,
THE LAND BENEATH ANY OF THEM, OR THE SITE, TO BE USED IN VIOLATION OF ANY
APPLICABLE LAWS, INCLUDING THOSE RELATING TO ENVIRONMENTAL CONDITIONS ON, UNDER
OR ABOUT THE SITE, INCLUDING BUT NOT LIMITED TO ASBESTOS, SOIL AND GROUND WATER
CONDITIONS AND HAZARDOUS MATERIALS.  FURTHER, SUBLESSOR’S COST FOR THE REMOVAL
OF HAZARDOUS MATERIALS FROM SUBLESSOR’S SUBLEASED PREMISES OR THE PROJECT SHALL
BE EXCLUDED FROM OPERATING EXPENSES WHICH WOULD OTHERWISE BE PASSED THROUGH TO
SUBLESSEE INCLUSIVE OF ANY MATERIAL WHICH IS DEEMED TOXIC PRESENTLY OR IN THE
FUTURE. SUBLESSOR SHALL DEFEND, INDEMNIFY AND HOLD SUBLESSEE HARMLESS FROM AND
AGAINST ANY AND ALL LOSSES, COSTS (INCLUDING REASONABLE ATTORNEYS’ FEES),
LIABILITIES AND CLAIMS ARISING FROM ANY VIOLATIONS OF THE APPLICABLE LAWS AND/OR
THE EXISTENCE OF HAZARDOUS MATERIALS THAT ARE NOW OR HEREINAFTER BECOME LOCATED
IN, ON OR UNDER THE SITE, AND SHALL ASSUME FULL RESPONSIBILITY AND COST TO
REMEDY SUCH VIOLATIONS AND/OR THE EXISTENCE OF HAZARDOUS MATERIALS, PROVIDED AND
TO THE EXTENT THAT SUCH VIOLATION OR THE EXISTENCE OF HAZARDOUS MATERIALS IS NOT
CAUSED BY SUBLESSEE.  HAZARDOUS MATERIALS SHALL INCLUDE, BUT SHALL NOT BE
LIMITED TO, SUBSTANCES REQUIRING INVESTIGATION, REMOVAL OR REMEDIATION UNDER ANY
FEDERAL,

 

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STATE OR LOCAL STATUTE, REGULATION, ORDINANCE OR POLICY INCLUDING SUBSTANCES
DEFINED AS “HAZARDOUS SUBSTANCES” OR “TOXIC SUBSTANCES” IN THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, 42
U.S.C. SECTION 1802; THE RESOURCE CONSERVATION RECOVERY ACT, 42 U.S.C.
SECTION 6901, ET. SEQ.; OR THOSE SUBSTANCES DEFINED AS “HAZARDOUS WASTES” IN
APPLICABLE CODES IN THE STATE OF CALIFORNIA OR THE STATE WHERE THE PREMISES ARE
LOCATED AND IN THE REGULATIONS ADOPTED AND PUBLICATIONS PROMULGATED TO SUCH
CODES.  SUBLESSEE SHALL HAVE THE RIGHT TO USE AND STORE HAZARDOUS MATERIALS (SO
LONG AS SUCH DOES NOT REQUIRE A PERMIT UNDER THE RESOURCE CONSERVATION RECOVERY
ACT) IN THE SUBLEASED PREMISES WITH CONCURRENT NOTICE OF SUCH TO SUBLESSOR
INCLUDING ANY APPLICABLE MATERIAL SAFETY DATA SHEETS.  SUBLESSEE SHALL NOT, AT
ANY TIME, USE ANY PORTION OF THE SUBLEASED PREMISES OR PROJECT IN VIOLATION OF
ANY REGULATIONS.  SUBLESSEE SHALL DEFEND, INDEMNIFY AND HOLD SUBLESSOR HARMLESS
FROM AND AGAINST ANY AND ALL LOSSES, COSTS (INCLUDING REASONABLE ATTORNEYS’
FEES), LIABILITIES AND CLAIMS ARISING FROM THE EXISTENCE OF HAZARDOUS MATERIALS
THAT HEREINAFTER BECOME LOCATED IN, ON OR UNDER THE PROJECT CAUSED BY SUBLESSEE.

 

25.                                 RIGHT TO REPAIR.  SUBLESSEE SHALL HAVE THE
RIGHT (BUT NOT THE OBLIGATION) TO FULFILL SUBLESSOR’S OBLIGATIONS WITH RESPECT
TO THE MAINTENANCE AND REPAIR OF THE SUBLEASED PREMISES AND THE PROJECT(AND
SUBLESSEE SHALL HAVE ACCESS TO UTILITY SYSTEMS AND ELEMENTS OUTSIDE THE
SUBLEASED PREMISES WHICH SERVICE THE SUBLEASED PREMISES IN ORDER TO DO SO) IN
THE EVENT SUBLESSOR FAILS TO DO SAME UNDER THIS SUBLEASE AND/OR UNDER THE PRIME
LEASE AND AFTER THE EXPIRATION OF APPROPRIATE NOTICE FROM SUBLESSEE AND
SUBLESSOR’S FAILURE TO CURE SAME WITHIN THIRTY (30) DAYS. IN SUCH EVENT,
SUBLESSEE SHALL HAVE THE RIGHT TO DEDUCT ITS ACTUAL COST SO INCURRED FROM THE
NEXT MONTHLY INSTALLMENT(S) OF BASE RENT AND ADDITIONAL RENT DUE. 
NOTWITHSTANDING ANY PROVISION SET FORTH IN THIS SUBLEASE OR THE PRIME LEASE TO
THE CONTRARY, IF SUBLESSEE PROVIDES WRITTEN NOTICE (OR ORAL NOTICE IN THE EVENT
OF AN EMERGENCY SUCH AS DAMAGE OR DESTRUCTION TO OR OF ANY PORTION OF THE
BUILDING STRUCTURE AND/OR THE BUILDING SYSTEMS, THE PARKING FACILITIES AND/OR
ANYTHING THAT COULD CAUSE MATERIAL DISRUPTION TO SUBLESSEE’S BUSINESS) TO
SUBLESSOR OF AN EVENT OR CIRCUMSTANCE WHICH REQUIRES THE ACTION OF SUBLESSOR
WITH RESPECT TO REPAIR AND/OR MAINTENANCE, AND SUBLESSOR FAILS TO PROVIDE SUCH
ACTION WITHIN A REASONABLE PERIOD OF TIME, GIVEN THE CIRCUMSTANCES, AFTER THE
RECEIPT OF SUCH NOTICE, BUT IN ANY EVENT NOT LATER THAN SEVEN (7) DAYS AFTER
RECEIPT OF SUCH NOTICE, THEN SUBLESSEE MAY PROCEED TO TAKE THE REQUIRED ACTION
UPON DELIVERY OF AN ADDITIONAL THREE (3) BUSINESS DAYS’ NOTICE TO SUBLESSOR
SPECIFYING THAT SUBLESSEE IS TAKING SUCH REQUIRED ACTION (PROVIDED, HOWEVER,
THAT NEITHER OF THE NOTICES SHALL BE REQUIRED IN THE EVENT OF AN EMERGENCY WHICH
THREATENS LIFE OR WHERE THERE IS IMMINENT DANGER TO PROPERTY OR A POSSIBILITY
THAT A FAILURE TO TAKE IMMEDIATE ACTION COULD CAUSE A MATERIAL DISRUPTION IN
SUBLESSEE’S NORMAL AND CUSTOMARY BUSINESS ACTIVITIES), AND IF SUCH ACTION WAS
REQUIRED UNDER THE TERMS OF THIS SUBLEASE TO BE TAKEN BY SUBLESSOR AND WAS NOT
TAKEN BY SUBLESSOR WITHIN SUCH TEN (10) DAY PERIOD (UNLESS SUCH NOTICE WAS NOT
REQUIRED AS PROVIDED ABOVE), THEN SUBLESSEE SHALL BE ENTITLED TO PROMPT
REIMBURSEMENT BY SUBLESSOR OF SUBLESSEE’S COSTS AND EXPENSES IN TAKING SUCH
ACTION ON A COMMERCIALLY REASONABLE BASIS PLUS INTEREST THEREON AT THE RATE OF
TEN PERCENT (10%) PLUS RENT ABATEMENT TO THE EXTENT SUBLESSEE WOULD HAVE
OTHERWISE BEEN ENTITLED TO RENT ABATEMENT UNDER THE SUBLEASE.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS LEASE, IF SUBLESSEE HAS NOT RECEIVED PAYMENT OF
ANY SUMS DUE FROM SUBLESSOR AS OF THE END OF THE THIRTIETH (30TH) DAY FOLLOWING
SUBLESSOR’S RECEIPT OF A STATEMENT OR NOTICE THEREOF, SUBLESSEE SHALL HAVE THE
RIGHT TO OFFSET SAID SUMS AGAINST EACH MONTH’S PAYMENT OF RENT DUE UNDER THIS
SUBLEASE UNTIL THE TOTAL AMOUNT OF SUCH SUMS DUE TO SUBLESSEE HAS BEEN
RECAPTURED BY SUBLESSEE THROUGH SUCH OFFSET.  SUBLESSOR AGREES THAT SUBLESSEE

 

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WILL HAVE ACCESS TO THE SUBLEASED PREMISES, THE BUILDING SYSTEMS AND BUILDING
STRUCTURE AND THE OTHER PORTIONS OF THE PROJECT TO THE EXTENT NECESSARY TO
PERFORM THE WORK CONTEMPLATED BY THIS PROVISION.

 

26.                                 INDEMNITY.  SUBLESSEE SHALL AT ITS EXPENSE
DEFEND, INDEMNIFY, AND HOLD SUBLESSOR AND SUBLESSOR’S AGENTS, CONTRACTORS,
LICENSEES, EMPLOYEES, DIRECTORS, OFFICERS, PARTNERS, TRUSTEES AND INVITEES
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, COSTS, LIABILITY, DAMAGE OR
EXPENSE, INCLUDING BUT NOT LIMITED TO, PENALTIES, FINES, REASONABLE ATTORNEYS’
FEES OR COSTS, RESULTING FROM SUBLESSEE’S BREACH OR FAILURE TO PERFORM ITS
OBLIGATIONS UNDER THIS SUBLEASE.  SUBLESSOR SHALL AT ITS EXPENSE DEFEND,
INDEMNIFY, AND HOLD SUBLESSEE AND SUBLESSEE’S AGENTS, CONTRACTORS, LICENSEES,
EMPLOYEES, DIRECTORS, OFFICERS, PARTNERS, TRUSTEES AND INVITEES HARMLESS FROM
AND AGAINST ANY AND ALL CLAIMS, COSTS, LIABILITY, DAMAGE OR EXPENSE, INCLUDING
BUT NOT LIMITED TO, PENALTIES, FINES, REASONABLE ATTORNEYS’ FEES OR COSTS,
RESULTING FROM SUBLESSOR’S BREACH OR FAILURE TO PERFORM ITS OBLIGATIONS UNDER
THIS SUBLEASE.

 

27.                                 THE PRIME LEASE.  SUBLESSOR, NOT SUBLESSEE,
SHALL BE SOLELY RESPONSIBLE FOR PAYING RENT AND ALL OTHER AMOUNTS TO BE PAID TO
PRIME LESSOR UNDER THE PRIME LEASE, AND COMPLYING WITH ALL OF THE TERMS AND
PROVISIONS OF THE PRIME LEASE THAT RELATE TO MATTERS OTHER THAN THE USE AND
OCCUPANCY OF THE SUBJECT PREMISES BY SUBLESSEE.  SUBLESSOR AND SUBLESSEE SHALL
BE JOINTLY RESPONSIBLE FOR OBTAINING ANY REQUISITE APPROVALS FROM PRIME LESSOR
TO THE EXTENT REQUIRED THEREUNDER.  SUBLESSEE SHALL BE RESPONSIBLE FOR COMPLYING
WITH THE TERMS AND CONDITIONS OF THE PRIME LEASE ARISING OUT OF OR RELATING TO
THE USE AND OCCUPANCY OF THE SUBLEASED PREMISES BY SUBLESSEE.  SUBLESSEE AGREES
THAT SUBLESSEE SHALL NOT PERFORM ANY TESTS OR STUDIES AFFECTING THE SOILS OR
SUBSURFACE AREAS OF THE PREMISES SUBLEASED BY THE PRIME LEASE EXCEPT TO THE
EXTENT PERMITTED BY SECTION 2.3 OF THE PRIME LEASE.

 

28.                                 QUIET ENJOYMENT.  SUBLESSOR COVENANTS AND
AGREES THAT SUBLESSEE SHALL PEACEABLY AND QUIETLY HAVE, HOLD AND ENJOY THE
SUBLEASED PREMISES IN ACCORDANCE WITH THE TERMS OF THIS SUBLEASE.

 

29.                                 CONDEMNATION.  SUBJECT TO THE TERMS OF THE
PRIME LEASE, IF ALL OF THE SUBLEASED PREMISES (OR ANY OF THE PARKING FACILITIES
OR BUILDING COMMON AREA) IS TAKEN OR CONDEMNED FOR A PUBLIC OR QUASI-PUBLIC USE,
OR IF A MATERIAL PORTION OF THE SUBLEASED PREMISES (OR ANY OF THE SUBJECT
BUILDING, THE PARKING FACILITIES OR BUILDING COMMON AREA) IS TAKEN OR CONDEMNED
FOR A PUBLIC OR QUASI-PUBLIC USE AND THE REMAINING PORTION THEREOF IS NOT USABLE
BY SUBLESSEE FOR THE NORMAL CONDUCT OF ITS BUSINESS IN THE MANNER CONDUCTED
IMMEDIATELY PRIOR TO THE TAKING, THIS SUBLEASE SHALL TERMINATE AS OF THE EARLIER
OF THE DATE TITLE TO THE CONDEMNED REAL ESTATE VESTS IN THE CONDEMNER OR THE
DATE ON WHICH SUBLESSEE IS DEPRIVED OF POSSESSION OF THE SUBLEASED PREMISES (OR
THE APPLICABLE PORTION THEREOF OR OF THE PARKING FACILITIES OR BUILDING COMMON
AREA).  IN SUCH EVENT, THE BASE RENT HEREIN RESERVED AND ALL ADDITIONAL RENT AND
OTHER SUMS PAYABLE HEREUNDER SHALL BE APPORTIONED AND PAID IN FULL BY SUBLESSEE
TO SUBLESSOR TO THAT DATE, ALL BASE RENT, ADDITIONAL RENT AND OTHER SUMS PAYABLE
HEREUNDER PREPAID FOR PERIODS BEYOND THAT DATE SHALL FORTHWITH BE REPAID BY
SUBLESSOR TO SUBLESSEE, AND NEITHER PARTY SHALL THEREAFTER HAVE ANY LIABILITY
HEREUNDER, EXCEPT THAT ANY OBLIGATION OR LIABILITY OF EITHER PARTY, ACTUAL OR
CONTINGENT, UNDER THIS SUBLEASE WHICH HAS ACCRUED ON OR PRIOR TO SUCH
TERMINATION DATE SHALL SURVIVE.  IF ONLY PART OF THE SUBLEASED PREMISES IS TAKEN
OR CONDEMNED FOR A PUBLIC OR QUASI-PUBLIC USE AND THIS

 

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SUBLEASE DOES NOT TERMINATE, SUBLESSOR SHALL, TO THE EXTENT OF THE AWARD IT
RECEIVES, RESTORE THE SUBLEASED PREMISES TO A CONDITION AND TO A SIZE AS NEARLY
COMPARABLE AS REASONABLY POSSIBLE TO THE CONDITION AND SIZE THEREOF IMMEDIATELY
PRIOR TO THE TAKING, AND THERE SHALL BE AN EQUITABLE ADJUSTMENT TO THE BASE RENT
AND ADDITIONAL RENT BASED ON THE ACTUAL LOSS OF USE OF THE SUBLEASED PREMISES
INCLUDING THE APPLICABLE PORTION THEREOF OR OF THE PARKING FACILITIES OR
BUILDING COMMON AREA SUFFERED BY SUBLESSEE FROM THE TAKING.  SUBLESSOR SHALL BE
ENTITLED TO RECEIVE THE ENTIRE AWARD IN ANY PROCEEDING WITH RESPECT TO ANY
TAKING PROVIDED FOR IN THIS SECTION 29, WITHOUT DEDUCTION THEREFROM FOR ANY
ESTATE VESTED IN SUBLESSEE BY THIS LEASE, AND SUBLESSEE SHALL RECEIVE NO PART OF
SUCH AWARD.  NOTHING HEREIN CONTAINED SHALL BE DEEMED TO PROHIBIT SUBLESSEE FROM
MAKING A SEPARATE CLAIM, AGAINST THE CONDEMNER, TO THE EXTENT PERMITTED BY LAW,
FOR THE VALUE OF SUBLESSEE’S MOVEABLE TRADE FIXTURES, MACHINERY AND MOVING AND
RELOCATION EXPENSES.

 

30.                                 SUBLESSEE’S DEFAULT.

 

30.1                           EVENT OF DEFAULT.  THE OCCURRENCE OF ANY ONE OR
MORE OF THE FOLLOWING EVENTS SHALL CONSTITUTE AN EVENT OF DEFAULT (HEREIN
REFERRED TO AS AN “EVENT OF DEFAULT”) OF SUBLESSEE UNDER THIS SUBLEASE:

 

(A)                                  IF SUBLESSEE FAILS TO PAY BASE RENT OR ANY
ADDITIONAL RENT HEREUNDER AS AND WHEN SUCH RENT BECOMES DUE AND SUCH FAILURE
SHALL CONTINUE FOR MORE THAN TEN (10) BUSINESS DAYS AFTER RECEIPT OF WRITTEN
NOTICE FROM SUBLESSOR OF SUCH FAILURE; PROVIDED, HOWEVER, THAT ANY SUCH NOTICE
WILL BE IN LIEU OF, AND NOT IN ADDITION TO, ANY NOTICE REQUIRED UNDER APPLICABLE
LAW (INCLUDING, WITHOUT LIMITATION, THE PROVISIONS OF CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 1161 REGARDING UNLAWFUL DETAINER ACTIONS OR ANY SUCCESSOR
STATUTE OR LAW OF A SIMILAR NATURE);

 

(B)                                 IF SUBLESSEE FAILS TO PERFORM OR OBSERVE ANY
OTHER TERM OF THIS SUBLEASE AND SUCH FAILURE SHALL CONTINUE FOR MORE THAN THIRTY
(30) DAYS AFTER SUBLESSOR GIVES SUBLESSEE NOTICE OF SUCH FAILURE, OR, IF SUCH
FAILURE CANNOT REASONABLY BE CORRECTED WITHIN SUCH THIRTY (30) DAY PERIOD, IF
SUBLESSEE DOES NOT COMMENCE TO CORRECT SUCH DEFAULT WITHIN SAID THIRTY (30) DAY
PERIOD AND THEREAFTER DILIGENTLY PROSECUTE THE CORRECTION OF SAME TO COMPLETION
WITHIN A REASONABLE TIME AND IN ANY EVENT PRIOR TO THE TIME A FAILURE TO
COMPLETE SUCH CORRECTION COULD CAUSE SUBLESSOR TO BE SUBJECT TO CRIMINAL
PROSECUTION FOR VIOLATION OF ANY LAW, RULE, ORDINANCE OR REGULATION.

 

30.2                           REMEDIES.  UPON THE OCCURRENCE OF ANY ONE OR MORE
EVENTS OF DEFAULT, SUBLESSOR WITHOUT ANY DEMAND OR NOTICE WHATSOEVER (EXCEPT AS
EXPRESSLY REQUIRED IN THIS SECTION 30) SHALL HAVE THE IMMEDIATE RIGHT TO PURSUE
THE FOLLOWING REMEDIES (ALL OF WHICH SHALL BE CUMULATIVE AND IN ADDITION TO ANY
OTHER REMEDIES AVAILABLE TO SUBLESSOR AT LAW OR IN EQUITY):

 

(A)                                  IN ADDITION TO ANY OTHER REMEDIES AVAILABLE
TO SUBLESSOR AT LAW OR IN EQUITY UNDER APPLICABLE LAW (INCLUDING, WITHOUT
LIMITATION, THE REMEDIES OF CALIFORNIA CIVIL CODE SECTION 1951.4 AND ANY
SUCCESSOR STATUTE OR SIMILAR LAW), SUBLESSOR WILL HAVE THE IMMEDIATE RIGHT AND
OPTION TO TERMINATE THIS SUBLEASE AND ALL RIGHTS OF SUBLESSEE HEREUNDER.  IF
SUBLESSOR ELECTS TO TERMINATE THIS SUBLEASE THEN, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, SUBLESSOR MAY RECOVER FROM SUBLESSEE (A) THE WORTH AT THE TIME
OF

 

37

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AWARD OF ANY UNPAID RENT WHICH HAD BEEN EARNED AT THE TIME OF SUCH TERMINATION;
PLUS (B) THE WORTH AT THE TIME OF AWARD OF THE AMOUNT BY WHICH THE UNPAID RENT
WHICH WOULD HAVE BEEN EARNED AFTER TERMINATION UNTIL THE TIME OF AWARD EXCEEDS
THE AMOUNT OF SUCH RENT LOSS THAT SUBLESSEE PROVES COULD HAVE BEEN REASONABLY
AVOIDED; PLUS (C) THE WORTH AT THE TIME OF AWARD OF THE AMOUNT BY WHICH THE
UNPAID RENT FOR THE BALANCE OF THE TERM OF THE SUBLEASE FOR WHICH SUBLESSEE
REMAINS OBLIGATED HEREUNDER AFTER THE TIME OF AWARD EXCEEDS THE AMOUNT OF SUCH
RENT LOSS THAT SUBLESSEE PROVES COULD BE REASONABLY AVOIDED; PLUS (D) ANY OTHER
AMOUNT NECESSARY TO COMPENSATE SUBLESSOR FOR ALL THE DETRIMENT PROXIMATELY
CAUSED BY SUBLESSEE’S FAILURE TO PERFORM ITS OBLIGATIONS UNDER THIS SUBLEASE OR
WHICH, IN THE ORDINARY COURSE OF THINGS, RESULTS THEREFROM INCLUDING BUT NOT
LIMITED TO, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ATTORNEYS’ FEES AND
COSTS; BROKERS’ COMMISSIONS; THE COSTS OF REFURBISHMENT, ALTERATIONS, RENOVATION
AND REPAIR OF THE SUBLEASED PREMISES, AND REMOVAL (INCLUDING THE REPAIR OF ANY
DAMAGE CAUSED BY SUCH REMOVAL) AND STORAGE (OR DISPOSAL) OF SUBLESSEE’S PERSONAL
PROPERTY, EQUIPMENT, FIXTURES, ALTERATIONS AND ANY OTHER ITEMS WHICH SUBLESSEE
IS REQUIRED UNDER THIS SUBLEASE TO REMOVE BUT DOES NOT REMOVE.  AS USED IN
SUBSECTION 30.2(A) ABOVE, THE “WORTH AT THE TIME OF AWARD” IS COMPUTED BY
ALLOWING INTEREST AT THE INTEREST RATE 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%).

 

(B)                                 SUBLESSOR HAS 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 RIGHT TO SUBLET OR ASSIGN, SUBJECT ONLY TO REASONABLE LIMITATIONS). 
ACCORDINGLY, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AND ABANDONMENT OF THE
SUBLEASED PREMISES BY SUBLESSEE OR IN THE EVENT THAT SUBLESSOR ELECTS TO
RE-ENTER THE SUBLEASED PREMISES OR TAKES POSSESSION OF THE SUBLEASED PREMISES
PURSUANT TO LEGAL PROCEEDING OR PURSUANT TO ANY NOTICE PROVIDED BY LAW, THEN IF
SUBLESSOR DOES NOT ELECT TO TERMINATE THIS SUBLEASE, SUBLESSOR MAY FROM TIME TO
TIME, WITHOUT TERMINATING THIS SUBLEASE, EITHER RECOVER ALL RENT AS IT BECOMES
DUE OR RELET THE SUBLEASED PREMISES OR ANY PART THEREOF ON TERMS AND CONDITIONS
AS SUBLESSOR IN ITS SOLE AND ABSOLUTE DISCRETION MAY DEEM ADVISABLE WITH THE
RIGHT TO MAKE ALTERATIONS AND REPAIRS TO THE SUBLEASED PREMISES IN CONNECTION
WITH SUCH RELETTING.  IF SUBLESSOR ELECTS TO RELET THE SUBLEASED PREMISES, THEN
RENTS RECEIVED BY SUBLESSOR FROM SUCH RELETTING WILL BE APPLIED; FIRST, TO THE
PAYMENT OF ANY INDEBTEDNESS OTHER THAN RENT DUE HEREUNDER FROM SUBLESSEE TO
SUBLESSOR; SECOND, TO THE PAYMENT OF ANY COST OF SUCH RELETTING; THIRD, TO THE
PAYMENT OF THE REASONABLE COST OF ANY ALTERATIONS AND REPAIRS TO THE SUBLEASED
PREMISES INCURRED IN CONNECTION WITH SUCH RELETTING; FOURTH, TO THE PAYMENT OF
RENT DUE AND UNPAID HEREUNDER AND THE RESIDUE, IF ANY, WILL BE HELD BY SUBLESSOR
AND APPLIED TO PAYMENT OF FUTURE RENT AS THE SAME MAY BECOME DUE AND PAYABLE
HEREUNDER.  SHOULD THAT PORTION OF SUCH RENTS RECEIVED FROM SUCH RELETTING
DURING ANY MONTH, WHICH IS APPLIED TO THE PAYMENT OF RENT HEREUNDER, BE LESS
THAN THE RENT PAYABLE DURING THAT MONTH BY SUBLESSEE HEREUNDER, THEN SUBLESSEE
AGREES TO PAY SUCH DEFICIENCY TO SUBLESSOR IMMEDIATELY UPON DEMAND THEREFOR BY
SUBLESSOR.  SUCH DEFICIENCY WILL BE CALCULATED AND PAID MONTHLY.

 

(C)                                  EVENT OF DEFAULT HEREUNDER SHALL NOT BE
CONSTRUED AS A WAIVER OF SUCH EVENT OF DEFAULT (EXCEPT AS TO ACCEPTANCE BY
SUBLESSOR OF PAYMENT IN FULL OF ALL

 

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BASE RENT AND ADDITIONAL RENT PAST DUE AT THE TIME OF SUCH ACCEPTANCE OR AS
OTHERWISE INDICATED BY SUBLESSOR IN WRITING).

 

(D)                                 THE RIGHTS GRANTED TO SUBLESSOR IN THIS
SECTION 30.2 SHALL BE CUMULATIVE OF EVERY OTHER RIGHT OR REMEDY PROVIDED IN THIS
SUBLEASE OR WHICH SUBLESSOR MAY OTHERWISE HAVE AT LAW OR IN EQUITY OR BY
STATUTE, AND THE EXERCISE OF ONE OR MORE RIGHTS OR REMEDIES SHALL NOT PREJUDICE
OR IMPAIR THE CONCURRENT OR SUBSEQUENT EXERCISE OF OTHER RIGHTS OR REMEDIES OR
CONSTITUTE A FORFEITURE OR WAIVER OF BASE RENT, ADDITIONAL RENT OR DAMAGES
ACCRUING TO SUBLESSOR BY REASON OF ANY EVENT OF DEFAULT.

 

31.                                 OBLIGATION TO MITIGATE.  NOTHING CONTAINED
IN THIS SUBLEASE WILL RELIEVE SUBLESSOR OF ANY OBLIGATION WHICH SUBLESSOR MAY
HAVE UNDER THE LAWS OF THE STATE OF CALIFORNIA TO MITIGATE ITS DAMAGES RESULTING
FROM AN EVENT OF DEFAULT.

 

32.                                 BROKERAGE COMMISSION.  SUBLESSOR SHALL BE
RESPONSIBLE FOR THE PAYMENT OF A REAL ESTATE BROKERAGE COMMISSION TO SUBLESSEE’S
BROKERS TRAMMELL CROW SERVICES, INC., DOING BUSINESS AS TRAMMELL CROW COMPANY
AND TO SUBLESSOR’S BROKERS COLLIERS INTERNATIONAL (COLLECTIVELY THE “BROKERS”)
PURSUANT TO THE TERMS OF A SEPARATE WRITTEN AGREEMENT, A COPY OF WHICH SHALL BE
PROVIDED TO SUBLESSEE (“BROKERS AGREEMENT”).  SUBLESSOR AND SUBLESSEE REPRESENT
AND WARRANT TO EACH OTHER THAT, WITH THE EXCEPTION OF BROKERS, NO BROKERS WERE
INVOLVED IN CONNECTION WITH THE NEGOTIATION OR CONSUMMATION OF THIS SUBLEASE. 
EACH PARTY AGREES TO INDEMNIFY THE OTHER, AND HOLD IT HARMLESS, FROM AND AGAINST
ANY AND ALL CLAIMS, DAMAGES, LOSSES, EXPENSES AND LIABILITIES (INCLUDING
REASONABLE ATTORNEYS’ FEES) INCURRED BY SAID PARTY AS A RESULT OF A BREACH OF
THIS REPRESENTATION AND WARRANTY BY THE OTHER PARTY AND SUBLESSOR AGREES TO
INDEMNIFY AND HOLD HARMLESS SUBLESSEE FROM AND AGAINST ANY AND ALL CLAIMS,
DAMAGES, LOSSES, EXPENSES AND LIABILITIES (INCLUDING REASONABLE ATTORNEYS’ FEES)
INCURRED BY SUBLESSEE AS A RESULT OF A BREACH BY SUBLESSORS OF ITS OBLIGATIONS
UNDER THIS SECTION 32.

 

33.                                 SUBLESSOR DEFAULT.  IF SUBLESSOR FAILS TO
PAY TO SUBLESSEE WHEN DUE ANY SUM OF MONEY REQUIRED TO BE PAID BY SUBLESSOR TO
SUBLESSEE PURSUANT TO THE TERMS OF THIS SUBLEASE (A “SUBLESSOR MONETARY
DEFAULT”) AND SUCH FAILURE CONTINUES FOR MORE THAN TEN (10) BUSINESS DAYS AFTER
SUBLESSEE GIVES SUBLESSOR WRITTEN NOTICE OF SUCH FAILURE, OR IF SUBLESSOR FAILS
TO PERFORM OR OBSERVE OR OTHERWISE BREACHES ANY OTHER TERM OF THIS SUBLEASE
(EACH, A “SUBLESSOR PERFORMANCE DEFAULT”) AND SUCH FAILURE SHALL CONTINUE FOR
MORE THAN THIRTY (30) DAYS AFTER SUBLESSEE GIVES SUBLESSOR WRITTEN NOTICE OF
SUCH FAILURE, OR, IF SUCH OTHER FAILURE CANNOT BE CORRECTED WITHIN SUCH THIRTY
(30) DAY PERIOD, IF SUBLESSOR DOES NOT COMMENCE TO CORRECT SUCH DEFAULT WITHIN
SUCH THIRTY (30) DAY PERIOD AND THEREAFTER DILIGENTLY PROSECUTE THE CORRECTION
OF SAME TO COMPLETION WITHIN A REASONABLE TIME, A “SUBLESSOR EVENT OF DEFAULT”
SHALL EXIST UNDER THIS SUBLEASE.  UPON THE OCCURRENCE OF A SUBLESSOR EVENT OF
DEFAULT, SUBLESSEE MAY AT SUBLESSEE’S OPTION, EXERCISE ANY RIGHTS PROVIDED IN
SECTION 25 ABOVE.

 

34.                                 NOTICES.  ALL NOTICES AND DEMANDS THAT MAY
BE REQUIRED OR PERMITTED HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED GIVEN
UPON ACTUAL RECEIPT WITH PROOF THEREOF (OR PROOF OF REFUSAL OF DELIVERY) AND
SHALL BE SENT BY CERTIFIED OR REGISTERED UNITED STATES MAIL, POSTAGE PREPAID,
RETURN RECEIPT REQUESTED, OR BY A NATIONALLY RECOGNIZED OVERNIGHT COURIER, WITH
PROOF OF DELIVERY, TO THE FOLLOWING ADDRESSES, UNLESS OTHERWISE DESIGNATED BY
WRITTEN NOTICE:

 

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To Sublessor:

 

Cymer Inc.

 

 

17075 Thornmint Court

 

 

Attn: Nancy Baker

 

 

San Diego, California 92127-1815

 

 

Attn: Chief Financial Officer

 

 

 

with a copy to:

 

Higgs, Fletcher & Mack LLP

 

 

First National Bank Building,

 

 

401 West “A” Street, Suite 2600

 

 

San Diego, California 92101

 

 

Attn: William Reavey, Esq.

 

 

 

To Sublessee:

 

Northrop Grumman System Corporation

 

 

Attn: Real Estate Department - Legal Notices

 

 

1840 Century Park East

 

 

Los Angeles, California 90067

 

 

 

with a copy to:

 

Northrop Grumman Systems Corporation

 

 

M/S 9900/P04-220

 

 

2000 W. NASA Blvd.

 

 

Melbourne, FL 32904

 

 

Attn: Manager, Sector Real Estate

 

 

 

And to:

 

Rutan & Tucker, LLP

 

 

611 Anton Blvd., 14th Floor

 

 

Costa Mesa, California 92626

 

 

Attn: Mary M. Green, Esq.

 

35.                                 ATTORNEYS’ FEES.  IF EITHER PARTY SHALL
COMMENCE LEGAL ACTION TO SPECIFICALLY ENFORCE OR OTHERWISE SEEK REDRESS UNDER OR
FOR BREACH OF THIS SUBLEASE, THE PREVAILING PARTY IN SUCH ACTION SHALL BE
ENTITLED TO RECOVER ITS COSTS AND REASONABLE ATTORNEYS’ FEES THEREIN, INCLUDING
COSTS AND FEES INCURRED IN ANY APPELLATE PROCEEDING, IN ADDITION TO ANY OTHER
RELIEF.

 

36.                                 TERMINATION OF PRIME LEASE.  IF FOR ANY
REASON THE TERM OF THE PRIME LEASE SHALL TERMINATE PRIOR TO THE EXPIRATION DATE
(OTHER THAN IN CONNECTION WITH SUBLESSOR’S DEFAULT), THIS SUBLEASE SHALL
AUTOMATICALLY BE TERMINATED AND SUBLESSOR SHALL NOT BE LIABLE TO SUBLESSEE BY
REASON THEREOF UNLESS SAID TERMINATION SHALL HAVE BEEN CAUSED BY THE DEFAULT OF
SUBLESSOR UNDER THE PRIME LEASE, AND SAID SUBLESSOR DEFAULT WAS NOT AS A RESULT
OF A SUBLESSEE DEFAULT HEREUNDER.  NOTWITHSTANDING THE FOREGOING, IN NO EVENT
SHALL SUBLESSOR OR SUBLESSOR AGREE TO A VOLUNTARY TERMINATION OR CANCELLATION OF
THE PRIME LEASE WITHOUT THE PRIOR WRITTEN CONSENT OF SUBLESSEE.

 

37.                                 ENTIRE AGREEMENT.  IT IS UNDERSTOOD AND
ACKNOWLEDGED THAT THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES HERETO
AFFECTING THIS SUBLEASE AND THIS SUBLEASE SUPERSEDES AND CANCELS ANY AND ALL
PREVIOUS NEGOTIATIONS, ARRANGEMENTS, BROCHURES, AGREEMENTS AND UNDERSTANDINGS,
IF ANY, BETWEEN THE PARTIES HERETO OR DISPLAYED BY SUBLESSOR TO SUBLESSEE WITH
RESPECT TO THE SUBJECT MATTER THEREOF, AND NONE THEREOF SHALL BE USED TO
INTERPRET OR CONSTRUE THIS

 

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SUBLEASE.  THIS SUBLEASE, AND THE EXHIBITS AND SCHEDULES ATTACHED HERETO,
CONTAIN ALL OF THE TERMS, COVENANTS, CONDITIONS, WARRANTIES AND AGREEMENTS OF
THE PARTIES RELATING IN ANY MANNER TO THE RENTAL, USE AND OCCUPANCY OF THE
SUBLEASED PREMISES AND SHALL BE CONSIDERED TO BE THE ONLY AGREEMENTS BETWEEN THE
PARTIES HERETO AND THEIR REPRESENTATIVES AND AGENTS.  NONE OF THE TERMS,
COVENANTS, CONDITIONS OR PROVISIONS OF THIS SUBLEASE CAN BE MODIFIED, DELETED OR
ADDED TO EXCEPT IN WRITING SIGNED BY THE PARTIES HERETO.  ALL NEGOTIATIONS AND
ORAL AGREEMENTS ACCEPTABLE TO BOTH PARTIES HAVE BEEN MERGED INTO AND ARE
INCLUDED HEREIN.  THERE ARE NO OTHER REPRESENTATIONS OR WARRANTIES BETWEEN THE
PARTIES, AND ALL RELIANCE WITH RESPECT TO REPRESENTATIONS IS BASED TOTALLY UPON
THE REPRESENTATIONS AND AGREEMENTS CONTAINED IN THIS SUBLEASE.

 

38.                                 COUNTERPARTS.  THIS SUBLEASE 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 SUBLEASE.

 

39.                                 ESTOPPEL CERTIFICATES.  SUBLESSEE AGREES,
FROM TIME TO TIME, WITHIN FIFTEEN (15 BUSINESS DAYS AFTER SUBLESSEE’S RECEIPT OF
A REQUEST OF SUBLESSOR OR PRIME LESSOR, TO EXECUTE AND DELIVER TO SUBLESSOR, OR
SUBLESSOR’S DESIGNEE, AN ESTOPPEL CERTIFICATE STATING, TO THE BEST OF
SUBLESSEE’S KNOWLEDGE WITHOUT INQUIRY, THAT THIS SUBLEASE IS IN FULL FORCE AND
EFFECT, THE DATE TO WHICH RENT HAS BEEN PAID, THAT SUBLESSOR IS NOT IN DEFAULT
THEREUNDER (OR SPECIFYING IN DETAIL THE NATURE OF SUBLESSOR’S DEFAULT), AND THE
TERMINATION DATE OF THIS SUBLEASE.

 

40.                                 TIME IS OF THE ESSENCE.  TIME IS OF THE
ESSENCE OF THIS SUBLEASE.

 

41.                                 MISCELLANEOUS.

 

41.1                           SEVERABILITY.  IF ANY CLAUSE OR PROVISION OF THIS
SUBLEASE IS DETERMINED TO BE ILLEGAL, INVALID OR UNENFORCEABLE UNDER PRESENT OR
FUTURE LAWS EFFECTIVE DURING THE FULL SUBLEASE TERM, THEN AND IN THAT EVENT, IT
IS THE INTENTION OF THE PARTIES HERETO THAT THE REMAINDER OF THIS SUBLEASE SHALL
NOT BE AFFECTED THEREBY, AND THAT IN LIEU OF SUCH ILLEGAL, INVALID OR
UNENFORCEABLE CLAUSE OR PROVISION THERE SHALL BE SUBSTITUTED A CLAUSE OR
PROVISION AS SIMILAR IN TERMS TO SUCH ILLEGAL, INVALID OR UNENFORCEABLE CLAUSE
OR PROVISION AS MAY BE POSSIBLE AND BE LEGAL, VALID AND ENFORCEABLE.

 

41.2                           NO WAIVER.  NO FAILURE OF SUBLESSOR OR SUBLESSEE
TO EXERCISE ANY POWER GIVEN SUBLESSOR OR SUBLESSEE HEREUNDER OR TO INSIST UPON
STRICT COMPLIANCE BY SUBLESSOR OR SUBLESSEE WITH ITS OBLIGATIONS HEREUNDER, AND
NO CUSTOM OR PRACTICE OF THE PARTIES AT VARIANCE WITH THE TERMS HEREOF SHALL
CONSTITUTE A WAIVER OF SUBLESSOR’S OR SUBLESSEE’S RIGHTS TO DEMAND EXACT
COMPLIANCE WITH THE TERMS HEREOF.

 

41.3                           AMENDMENTS.  THIS SUBLEASE CONTAINS THE ENTIRE
AGREEMENT OF THE PARTIES HERETO AS TO THE SUBJECT MATTER OF THIS SUBLEASE AND NO
PRIOR REPRESENTATIONS, INDUCEMENTS, LETTERS OF INTENT, PROMISES OR AGREEMENTS,
ORAL OR OTHERWISE, BETWEEN THE PARTIES NOT EMBODIED HEREIN SHALL BE OF ANY FORCE
AND EFFECT.  ANY FUTURE AMENDMENT TO THIS SUBLEASE MUST BE IN WRITING AND SIGNED
BY THE PARTIES HERETO.  THE MASCULINE (OR NEUTER) PRONOUN, SINGULAR NUMBER SHALL
INCLUDE THE MASCULINE, FEMININE AND NEUTER GENDER AND THE SINGULAR AND PLURAL
NUMBER.

 

41

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41.4                           CAPTIONS.  THE CAPTIONS OF THIS SUBLEASE ARE FOR
CONVENIENCE ONLY AND ARE NOT A PART OF THIS SUBLEASE, AND DO NOT IN ANY WAY
DEFINE, LIMIT, DESCRIBE OR AMPLIFY THE TERMS OR PROVISIONS OF THIS SUBLEASE OR
THE SCOPE OR INTENT THEREOF.

 

41.5                           GOVERNMENT LAW.  THIS SUBLEASE SHALL BE
INTERPRETED UNDER THE LAWS OF THE STATE OF CALIFORNIA.

 

41.6                           CONSTRUCTION.  THE PARTIES ACKNOWLEDGE THAT THIS
SUBLEASE IS THE RESULT OF NEGOTIATIONS BETWEEN THE PARTIES, AND IN CONSTRUING
ANY AMBIGUITY HEREUNDER NO PRESUMPTION SHALL BE MADE IN FAVOR OF EITHER PARTY. 
NO INFERENCE SHALL BE MADE FROM ANY ITEM WHICH HAS BEEN STRICKEN FROM THIS
SUBLEASE OTHER THAN THE DELETION OF SUCH ITEM.

 

42.                                 AUTHORITY.  SUBLESSEE REPRESENTS TO
SUBLESSOR THAT SUBLESSEE IS AUTHORIZED BY ALL REQUIRED CORPORATE OR PARTNERSHIP
ACTION TO ENTER INTO THIS SUBLEASE AND THE INDIVIDUAL(S) SIGNING THIS SUBLEASE
ON BEHALF OF SUBLESSEE ARE EACH AUTHORIZED TO BIND SUBLESSEE TO ITS TERMS AND
THAT THE CONSUMMATION OF THIS SUBLEASE IS NOT IN CONFLICT WITH ANY AGREEMENT,
CONTRACT OR ORDER TO WHICH SUBLESSEE IS A PARTY.  SUBLESSOR REPRESENTS TO
SUBLESSEE THAT SUBLESSOR IS AUTHORIZED BY ALL REQUIRED CORPORATE OR PARTNERSHIP
ACTION TO ENTER INTO THIS SUBLEASE AND THE INDIVIDUAL(S) SIGNING THIS SUBLEASE
ON BEHALF OF SUBLESSOR ARE EACH AUTHORIZED TO BIND SUBLESSOR TO ITS TERMS AND
THAT THE CONSUMMATION OF THIS SUBLEASE IS NOT IN CONFLICT WITH ANY AGREEMENT,
CONTRACT OR ORDER TO WHICH SUBLESSOR IS A PARTY.

 

43.                                 SUBLESSOR BANKRUPTCY.  IF SUBLESSOR FILES
FOR BANKRUPTCY PROTECTION, SUBLESSEE MAY REMAIN IN THE SUBLEASED PREMISES EVEN
IF THE SUBLEASE IS REJECTED.  IN THE EVENT THAT THE OBLIGATIONS OF SUBLESSOR
UNDER THE SUBLEASE ARE NOT PERFORMED DURING THE PENDENCY OF A BANKRUPTCY OR
INSOLVENCY PROCEEDING INVOLVING THE SUBLESSOR AS THE DEBTOR, OR FOLLOWING THE
REJECTION OF THE SUBLEASE IN ACCORDANCE WITH SECTION 365 OF THE UNITED STATES
BANKRUPTCY CODE, THEN NOTWITHSTANDING ANY PROVISION OF THIS SUBLEASE TO THE
CONTRARY, SUBLESSEE SHALL HAVE THE RIGHT TO SET OFF AGAINST ALL RENT AND OTHER
SUMS REQUIRED TO BE PAID UNDER THIS SUBLEASE NEXT DUE AND OWING (A) ANY AND ALL
DAMAGES CAUSED BY SUCH NON-PERFORMANCE OF SUBLESSOR’S OBLIGATIONS UNDER THE
SUBLEASE BY SUBLESSOR, DEBTOR-IN-POSSESSION, OR THE BANKRUPTCY TRUSTEE, AND (B)
ANY AND ALL DAMAGES CAUSED BY THE NON-PERFORMANCE OF SUBLESSOR’S OBLIGATIONS
UNDER THE SUBLEASE FOLLOWING ANY REJECTION OF THE SUBLEASE IN ACCORDANCE WITH
SECTION 365 OF THE UNITED STATES BANKRUPTCY CODE.

 

44.                                 SUBLESSEE’S FIXTURES.  SUBLESSOR AND PRIME
LESSOR AGREE TO EXECUTE A WAIVER, SUBORDINATION AND CONSENT LETTER, IN FAVOR OF
ANY LENDER HOLDING A SECURITY INTEREST IN PROPERTY OF SUBLESSEE LOCATED AT THE
SUBLEASED PREMISES, ACKNOWLEDGING THE SECURITY INTEREST OF THE LENDER AND
CONFIRMING THAT SUBLESSOR WILL NOT INTERFERE WITH THE EXERCISE BY THE LENDER OF
ITS RIGHTS UNDER AGREEMENTS WITH SUBLESSEE, SUBJECT TO THE CONDITIONS THAT THE
LENDER MUST ACT IN ACCORDANCE WITH APPLICABLE LAWS, MAY NEVER UNDERTAKE ANY FORM
OF FORCIBLE ENTRY INTO THE SUBLEASED PREMISES AND MUST REPAIR ANY DAMAGE CAUSED
BY ENTRY AND REMOVAL OF PROPERTY.  SUBLESSOR AND PRIME LESSOR WAIVES ANY LIEN
RIGHTS IT MAY HAVE IN SUBLESSEE’S TRADE FIXTURES AND PERSONAL PROPERTY.

 

45.                                 GOVERNMENTAL REQUIREMENTS.  SUBLESSEE SHALL
PROMPTLY COMPLY THROUGHOUT THE FULL SUBLEASE TERM, AT SUBLESSEE’S SOLE COST AND
EXPENSE, WITH ALL PRESENT AND FUTURE LAWS,

 

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ORDINANCES, ORDERS, RULES, REGULATIONS OR REQUIREMENTS OF ALL FEDERAL, STATE AND
MUNICIPAL GOVERNMENTS AND APPROPRIATE DEPARTMENTS, COMMISSIONS, BOARDS AND
OFFICERS THEREOF (COLLECTIVELY, “GOVERNMENTAL REQUIREMENTS”) RELATING TO
SUBLESSEE’S USE OF ALL OR ANY PART OF THE SUBLEASED PREMISES INCLUDING THE
SUBJECT BUILDING AND THE BUILDING DECEMBER 21, 2004 COMMON AREA. 
NOTWITHSTANDING THE FOREGOING, SUBLESSOR, AT SUBLESSOR’S SOLE COST AND EXPENSE,
SHALL BE RESPONSIBLE FOR COMPLIANCE WITH ALL GOVERNMENTAL REQUIREMENTS RELATING
TO THE LAND, THE SUBJECT BUILDING, THE PARKING FACILITIES AND THE PROJECT COMMON
AREA AND SHALL MAKE ALL IMPROVEMENTS AND REPAIRS REQUIRED TO RENDER THE SAME IN
COMPLIANCE WITH ALL APPLICABLE GOVERNMENTAL REQUIREMENTS.  SUBLESSEE SHALL ALSO
OBSERVE AND COMPLY WITH THE REQUIREMENTS OF ALL POLICIES OF PUBLIC LIABILITY,
FIRE AND OTHER POLICIES OF INSURANCE AT ANY TIME IN FORCE WITH RESPECT TO THE
SUBLEASED PREMISES.

 

46.                                 PRIME LESSOR’S CONSENT.  AS A CONDITION TO
THE EFFECTIVENESS OF THIS SUBLEASE, THE PARTIES SHALL OBTAIN FROM THE PRIME
LESSOR ITS CONSENT TO THE TERMS AND CONDITIONS OF THIS SUBLEASE AND THE WORK AND
OTHER ACTIVITIES CONTEMPLATED BY SUBLESSEE HEREUNDER, IN FORM AND SUBSTANCE
ACCEPTABLE TO SUBLESSEE, AND INCLUDING, WITHOUT LIMITATION, CONSENT TO SECTION 4
(SUBLESSOR’S WORK AND CONDITION OF SUBLEASED PREMISES), SECTION 5 (ALTERATIONS),
SECTION 9 (CONNECTION TO OTHER FACILITIES), SECTION 10 (U.S. GOVERNMENT SECURITY
REGULATIONS), SECTION 14 (ASSIGNMENT/SUBLETTING), SECTION 19 (SIGNAGE),
SECTION 21 (NON-DISTURBANCE), SECTION 22 (ROOF RIGHTS), SECTION 23 (SECURED
AREAS), SECTION 24 (HAZARDOUS MATERIALS), SECTION 27 (THE PRIME LEASE), AND
SECTION 44 (SUBLESSEE’S FIXTURES).

 

47.                                 NONBINDING DRAFTS.  ALL SUBLEASE DRAFTS ARE
TO BE CONSTRUED ONLY AN INVITATION TO NEGOTIATE.  NEITHER THIS SUBLEASE DRAFT OR
ANY PRIOR LETTERS OF INTENT OR REQUESTS FOR PROPOSAL SHALL BE CONSTRUED OR
INTERPRETED TO BE AN OFFER OR A CONTRACT OR OTHER AGREEMENT BINDING ON THE
PARTIES.  SUBLESSEE RESERVES THE RIGHT TO NEGOTIATE WITH OTHER PARTIES.  NO
PARTY SHALL HAVE ANY LEGAL RIGHTS OR OBLIGATIONS WITH RESPECT TO ANY OTHER
PARTY, AND NO PARTY SHOULD TAKE ANY ACTION OR FAIL TO TAKE ANY ACTION IN
DETRIMENTAL RELIANCE UPON ANY SUCH DRAFTS, OR STATEMENTS MADE BY ANY AGENT OR
REPRESENTATIVE OF EITHER PARTY UNLESS AND UNTIL A SUBLEASE AGREEMENT IS FULLY
EXECUTED AND DELIVERED BY ALL PARTIES INVOLVED.

 

/s/ EPH

 

 

/s/ AJP

 

Sublessor’s Initials

 

Sublessee’s Initials

 

43

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IN WITNESS WHEREOF, the parties through their duly authorized representatives
have executed this Sublease on the dates written below:

 

 

CYMER, INC.,

 

a Nevada corporation

 

 

 

 

 

By:

/s/ Edward P. Holtaway

 

 

 

 

Title:

EVP, CORP OPERATIONS

 

 

 

 

Date:

12/22/04

 

 

 

“Sublessor”

 

 

 

 

 

NORTHROP GRUMMAN SYSTEMS

 

CORPORATION, a Delaware corporation

 

 

 

 

 

By:

/s/ A.J. Paz

 

 

 

 

Title:

Corporate Director of Real Estate

 

 

 

Date:

12/22/04

 

 

 

 

“Sublessee”

 

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