Exhibit 10.76

 

PENINSULA OFFICE PARK
PENINSULA OFFICE PARK BUILDING 4
SAN MATEO, CALIFORNIA

 

 

OFFICE LEASE AGREEMENT

 

 

BETWEEN

 

 

EOP-PENINSULA OFFICE PARK, L.L.C., a Delaware limited liability company

(“LANDLORD”)

 

 

AND

 

 

LIBERATE TECHNOLOGIES, a Delaware corporation

(“TENANT”)

 

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OFFICE LEASE AGREEMENT

 

THIS OFFICE LEASE AGREEMENT (the “Lease”) is made and entered into as of the
12th day of December, 2003, by and between EOP-PENINSULA OFFICE PARK, L.L.C., a
Delaware limited liability company (“Landlord”) and LIBERATE TECHNOLOGIES, a
Delaware corporation (“Tenant”).  The following exhibits and attachments are
incorporated into and made a part of the Lease: Exhibit A (Outline and Location
of Premises), Exhibit B (Expenses and Taxes), Exhibit C (Work Letter), Exhibit D
(Commencement Letter), Exhibit E (Building Rules and Regulations), Exhibit F
(Additional Provisions), Exhibit G (Parking Agreement), Exhibit H (Asbestos
Notification) and Exhibit I (Form of Letter of Credit).

 

1.     BASIC LEASE INFORMATION.

 

1.01                 “Building” shall mean the building located at 2655 Campus
Drive, San Mateo, California, commonly known as Peninsula Office Park Building
4.  “Rentable Square Footage of the Building” is deemed to be 49,925 square
feet.

 

1.02                 “Premises” shall mean the area shown on Exhibit A to this
Lease.  The Premises is located on the 2nd floor and known as suite 250. If the
Premises include one or more floors in their entirety, all corridors and
restroom facilities located on such full floor(s) shall be considered part of
the Premises. The “Rentable Square Footage of the Premises” is deemed to be
15,011 square feet. Landlord and Tenant stipulate and agree that the Rentable
Square Footage of the Building and the Rentable Square Footage of the Premises
are correct.

 

1.03                 “Base Rent”:

 

Months of Term

 

Annual Rate
Per Square Foot

 

Monthly
Base Rent

 

1 - 12

 

$

21.00

 

$

26,269.25

 

13 - 24

 

$

21.60

 

$

27,019.80

 

25 - 36

 

$

22.20

 

$

27,770.35

 

37 - 48

 

$

22.80

 

$

28,520.90

 

49 – 60

 

$

23.40

 

$

29,271.45

 

 

1.04                 “Tenant’s Pro Rata Share”: 30.0671%.

 

1.05                 “Base Year” for Taxes (defined in Exhibit B):  2004; “Base
Year” for Expenses (defined in Exhibit B):  2004.

 

1.06                 “Term”: A period of 60 months.  Subject to Section 3, the
Term shall commence on March 1, 2004 (the “Commencement Date”) and, unless
terminated early in accordance with this Lease, end on February 28, 2009 (the
“Termination Date”).

 

1.07                 Allowance: $337,747.00, as more fully described in the Work
Letter attached hereto as Exhibit C.

 

1.08                 “Security Deposit”:  None.

 

1.09                 “Guarantor(s)”:  As of the date of this Lease, there are no
Guarantors.

 

1.10                 “Broker”:  Julien J. Studley, Inc.

 

1.11                 “Permitted Use”: General office use; provided in no event
shall the Premises, or any portion of the Premises, be used for the sale of food
from the Premises to the public.

 

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1.12                 “Notice Address(es)”:

 

Landlord:

 

Tenant:

 

 

 

EOP-Peninsula Office Park, L.L.C.

 

The Premises

c/o Equity Office Management, L.L.C.

 

Attention:

950 Tower Lane, Suite 950
Foster City, California  94404
Attn:  Property Manager - Peninsula Office
Park Building 4

 

 

 

A copy of any notices to Landlord shall be sent to Equity Office, One Market,
Spear Tower, Suite 600, San Francisco, California, 94105, Attention: San
Francisco Regional Counsel.

 

1.13                 “Business Day(s)” are Monday through Friday of each week,
exclusive of New Year’s Day, Presidents Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day (“Holidays”).  Landlord may
designate additional Holidays that are commonly recognized by other office
buildings in the area where the Building is located.  “Building Service Hours”
are 7:00 a.m. to 6:00 p.m. on Business Days.

 

1.14                 “Landlord Work” means the work that Landlord is obligated
to perform in the Premises pursuant to a separate agreement (the “Work Letter”)
attached to this Lease as Exhibit C.

 

1.15                 “Property” means the Building and the parcel(s) of land on
which it is located and, at Landlord’s discretion, the parking facilities and
other improvements, if any, serving the Building and the parcel(s) of land on
which they are located.

 

1.16                 “Letter of Credit”:  $972,712.80, as more fully described
in Section 2 of Exhibit F.

 

2.     LEASE GRANT.

 

The Premises are hereby leased to Tenant from Landlord, together with the right
to use any portions of the Property that are designated by Landlord for the
common use of tenants and others (the “Common Areas”) for the Term.

 

3.     ADJUSTMENT OF COMMENCEMENT DATE; POSSESSION.

 

3.01 If Landlord is required to perform Landlord Work prior to the Commencement
Date: (a) the date set forth in Section 1.06 as the Commencement Date shall
instead be defined as the “Target Commencement Date”; (b) the actual
Commencement Date shall be the date on which the Landlord Work is Substantially
Complete (defined below); and (c) the Termination Date will be the last day of
the Term as determined based upon the actual Commencement Date.  Landlord’s
failure to Substantially Complete the Landlord Work by the Target Commencement
Date shall not be a default by Landlord or otherwise render Landlord liable for
damages. Promptly after the determination of the Commencement Date, Landlord and
Tenant shall enter into a commencement letter agreement in the form attached as
Exhibit D.  If the Termination Date does not fall on the last day of a calendar
month, Landlord and Tenant may elect to adjust the Termination Date to the last
day of the calendar month in which Termination Date occurs by the mutual
execution of a commencement letter agreement setting forth such adjusted date. 
The Landlord Work shall be deemed to be “Substantially Complete” on the later of
(i) date that all Landlord Work has been performed, other than any details of
construction, mechanical adjustment or any other similar matter, the
non-completion of which does not materially interfere with Tenant’s use of the
Premises, and (ii) the date Landlord receives from the appropriate governmental
authorities, with respect to the Landlord Work performed by Landlord or its
contractors in the Premises, all approvals necessary for the occupancy of the
Premises.  If Landlord is delayed in the performance of the Landlord Work as a
result of the acts or omissions of Tenant, the Tenant Related Parties (defined
in Section 13) or their respective contractors or vendors, including, without
limitation, changes requested by Tenant to approved plans, Tenant’s failure to
comply with any of its obligations under this Lease, or the specification of any
materials or equipment with long lead times that Landlord has informed Tenant
will cause a delay in the Landlord Work and which Tenant thereafter has
requested (or continues to request) be included in the Landlord Work (a “Tenant
Delay”), the Landlord Work shall be deemed to be Substantially Complete on the
date that Landlord could reasonably have been expected to Substantially Complete
the Landlord Work absent any Tenant Delay.

 

3.02 Subject to Landlord’s obligation to perform the Landlord Work, the Premises
are accepted by Tenant in “as is” condition and configuration without any
representations or warranties by Landlord. By taking possession of the Premises,
Tenant agrees that the Premises are in good order and satisfactory

 

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condition, subject to Landlord’s specific obligations set forth below in this
Section 3.02. Tenant’s acceptance of the Premises shall be subject to Landlord’s
obligation to correct portions of the Landlord Work as set forth on a
construction punch list prepared by Landlord and Tenant in accordance with the
terms hereof.  Within 15 days after Substantial Completion of the Landlord Work,
Landlord and Tenant shall together conduct an inspection of the Premises and
prepare a “punch list” setting forth any portions of the Landlord Work that are
not in conformity with the Landlord Work as required by the terms of this
Lease.  Notwithstanding the foregoing, at the request of Landlord, such
construction punch list shall be mutually prepared by Landlord and Tenant prior
to the date on which Tenant first begins to move its furniture, equipment or
other personal property into the Premises.  Landlord, as part of the Landlord
Work, shall use good faith efforts to correct all such items within a reasonable
time following the completion of the punch list.  In addition to the foregoing,
Tenant shall have eleven (11) months from the completion of Landlord Work in
which to discover and notify Landlord of any latent defects in the Landlord
Work.  Landlord shall be responsible for the correction of any such latent
defects with respect to which it received timely notice from Tenant.  Landlord
shall not be liable for a failure to deliver possession of the Premises or any
other space due to the holdover or unlawful possession of such space by another
party, however Landlord shall use reasonable efforts to obtain possession of the
space.  The commencement date for the space, in such event, shall be postponed
until the date Landlord delivers possession of the Premises to Tenant free from
occupancy by any party. If Tenant takes possession of the Premises before the
Commencement Date, such possession shall be subject to the terms and conditions
of this Lease and Tenant shall pay Rent (defined in Section 4.01) to Landlord
for each day of possession before the Commencement Date.  However, except for
the cost of services requested by Tenant (e.g. freight elevator usage), Tenant
shall not be required to pay Rent for any days of possession before the
Commencement Date during which Tenant, with the approval of Landlord, is in
possession of the Premises for the sole purpose of performing improvements or
installing furniture, equipment or other personal property. Specifically,
subject to the terms of this Section 3.02, Landlord grants Tenant the right to
enter the Premises, at Tenant’s sole risk, fifteen (15) days prior to Landlord’s
then current estimate of the Commencement Date solely for the purpose of
installing telecommunications and data cabling, equipment, furnishings and other
personalty in the Premises. Landlord may withdraw such permission to enter the
Premises prior to the Commencement Date at any time that Landlord reasonably
determines that such entry by Tenant is causing a dangerous situation for
Landlord, Tenant or their respective contractors or employees, or if Landlord
reasonably determines that such entry by Tenant is hampering or otherwise
preventing Landlord from proceeding with the completion of the Landlord Work at
the earliest possible date.

 

3.03  Notwithstanding the foregoing, if the Commencement Date has not occurred
on or before the Required Completion Date (defined below), Tenant, as its sole
remedy, may terminate this Lease by giving Landlord written notice of
termination on or before the earlier to occur of:  (i) 5 Business Days after the
Required Completion Date; and (ii) the Commencement Date.  In such event, this
Lease shall be deemed null and void and of no further force and effect and
Landlord shall promptly refund any prepaid rent and Security Deposit previously
advanced by Tenant under this Lease and, so long as Tenant has not previously
defaulted under any of its obligations under the Work Letter, the parties hereto
shall have no further responsibilities or obligations to each other with respect
to this Lease.  The “Required Completion Date” shall mean the date which is 180
days after the Target Commencement Date.  Landlord and Tenant acknowledge and
agree that: (i) the determination of the Commencement Date shall take into
consideration the effect of any Tenant Delays; and (ii) the Required Completion
Date shall be postponed by the number of days the Commencement Date is delayed
due to events of Force Majeure.  Notwithstanding anything herein to the
contrary, if Landlord determines in good faith that it will be unable to cause
the Commencement Date to occur by the Required Completion Date, Landlord shall
have the right to immediately cease its performance of the Landlord Work and
provide Tenant with written notice (the “Completion Date Extension Notice”) of
such inability, which Completion Date Extension Notice shall set forth the date
on which Landlord reasonably believes that the Commencement Date will occur. 
Upon receipt of the Completion Date Extension Notice, Tenant shall have the
right to terminate this Lease by providing written notice of termination to
Landlord within 5 Business Days after the date of the Completion Date Extension
Notice.  If Tenant does not terminate this Lease within such 5 Business Day
period, the Required Completion Date automatically shall be amended to be the
date set forth in Landlord’s Completion Date Extension Notice.

 

4.     RENT.

 

4.01  Tenant shall pay Landlord, without any setoff or deduction, unless
expressly set forth in this Lease, all Base Rent and Additional Rent due for the
Term (collectively referred to as “Rent”). “Additional Rent” means all sums
(exclusive of Base Rent) that Tenant is required to pay Landlord under this
Lease. To the extent of any Tax Excess (as defined in Exhibit B), Tenant shall
pay and be liable for all rental, sales and use taxes (but excluding income
taxes), if any, imposed upon or measured by Rent.  Base Rent and recurring
monthly charges of Additional Rent shall be due and payable in advance on the
first day of each calendar month without notice or demand, provided that the
installment of Base Rent for the first full calendar month of the Term, and the
first monthly installment of Additional Rent for Expenses and Taxes, shall be
payable upon the execution of this Lease by Tenant.  All other

 

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items of Rent shall be due and payable by Tenant on or before 30 days after
billing by Landlord.  Rent shall be made payable to the entity, and sent to the
address, Landlord designates and shall be made by good and sufficient check or
by other means acceptable to Landlord.  Tenant shall pay Landlord an
administration fee equal to 5% of all past due Rent, provided that Tenant shall
be entitled to a grace period of 5 days for the first 2 late payments of Rent in
a calendar year. In addition, past due Rent shall accrue interest at 12% per
annum. Landlord’s acceptance of less than the correct amount of Rent shall be
considered a payment on account of the earliest Rent due. Rent for any partial
month during the Term shall be prorated. No endorsement or statement on a check
or letter accompanying payment shall be considered an accord and satisfaction. 
Tenant’s covenant to pay Rent is independent of every other covenant in this
Lease.

 

4.02  Tenant shall pay Tenant’s Pro Rata Share of any Tax Excess and Expense
Excess as defined in and in accordance with Exhibit B of this Lease.

 

5.     COMPLIANCE WITH LAWS; USE.

 

The Premises shall be used for the Permitted Use and for no other use
whatsoever. Tenant shall comply with all statutes, codes, ordinances, orders,
rules and regulations of any municipal or governmental entity whether in effect
now or later, including the Americans with Disabilities Act (“Law(s)”),
regarding the operation of Tenant’s business and the use, condition,
configuration and occupancy of the Premises.  Notwithstanding anything in the
foregoing to the contrary, Landlord, at its sole cost and expense, shall be
responsible for correcting any violations of Title III of the Americans with
Disabilities Act or of applicable building or fire codes with respect to the
Premises to the extent that such  violations arise out of the Landlord Work or
the condition of the Premises prior to the Landlord Work, and prior to the
installation of any furniture, equipment and other personal property of Tenant. 
Landlord shall have the right to contest any alleged violation in good faith,
including, without limitation, the right to apply for and obtain a waiver or
deferment of compliance, the right to assert any and all defenses allowed by Law
and the right to appeal any decisions, judgments or rulings to the fullest
extent permitted by Law.  Landlord, after the exhaustion of any and all rights
to appeal or contest, will make all repairs, additions, alterations or
improvements necessary to comply with the terms of any final order or judgment.
Notwithstanding the foregoing, Tenant, not Landlord, shall be responsible for
the correction of any violations in the Premises that arise out of or in
connection with any claims brought under any provision of the Americans with
Disabilities Act other than Title III, the specific nature of Tenant’s business
in the Premises (other than general office use), the acts or omissions of
Tenant, its agents, employees or contractors, Tenant’s arrangement of any
furniture, equipment or other property in the Premises, any repairs,
alterations, additions or improvements performed by or on behalf of Tenant
(other than the Landlord Work) and any design or configuration of the Premises
specifically requested by Tenant after being informed that such design or
configuration may not be in strict compliance with the ADA.  In addition,
Tenant, at its sole cost and expense, shall promptly comply with any Laws that
relate to the “Base Building” (defined below), but only to the extent such
obligations are triggered by Tenant’s use of the Premises, other than for
general office use, or Alterations or improvements in the Premises performed or
requested by Tenant other than the Landlord Work.  “Base Building” shall include
the structural portions of the Building, the public restrooms and the Building
mechanical, electrical and plumbing systems and equipment located in the
internal core of the Building on the floor or floors on which the Premises are
located.  Tenant shall promptly provide Landlord with copies of any notices it
receives regarding an alleged violation of Law.  Tenant shall comply with the
rules and regulations of the Building attached as Exhibit E and such other
reasonable rules and regulations adopted by Landlord from time to time,
including rules and regulations for the performance of Alterations (defined in
Section 9).  The rules and regulations shall be generally applicable, and
generally applied in the same manner, to all tenants of the Building.

 

6.             SECURITY DEPOSIT.

 

The Security Deposit, if any, shall be delivered to Landlord upon the execution
of this Lease by Tenant and held by Landlord without liability for interest
(unless required by Law) as security for the performance of Tenant’s
obligations.  The Security Deposit is not an advance payment of Rent or a
measure of damages.  Landlord may use all or a portion of the Security Deposit
to satisfy past due Rent or to cure any Default (defined in Section 18) by
Tenant.  If Landlord uses any portion of the Security Deposit, Tenant shall,
within 5 days after demand, restore the Security Deposit to its original amount.
Landlord shall return any unapplied portion of the Security Deposit to Tenant
within 45 days after the later to occur of: (a) determination of the final Rent
due from Tenant; or (b) the later to occur of the Termination Date or the date
Tenant surrenders the Premises to Landlord in compliance with Section 25.
Landlord may assign the Security Deposit to a successor or transferee and,
following the assignment, Landlord shall have no further liability for the
return of the Security Deposit. Landlord shall not be required to keep the
Security Deposit separate from its other accounts.  Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, or any similar or
successor Laws now or hereinafter in effect.

 

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7.             BUILDING SERVICES.

 

7.01  Landlord shall furnish Tenant with the following services: (a) water for
use in the Base Building lavatories and for any fixtures located within the
Premises (subject to Landlord’s approval of the installation thereof pursuant to
Section 9 with respect to any such fixtures installed after the date of this
Lease other than pursuant to the Landlord Work) for the use of Tenant’s
employees (for example, without limitation, drinking fountains and fixtures and
equipment that may be found in a kitchenette breakroom area, such as a sink,
icemaker, dishwasher, and water lines to a refrigerator; collectively, the
“Breakroom Fixtures”).  However, Tenant shall be responsible, at Tenant’s cost,
for the repair and maintenance of the water line(s) and fixtures within the
Premises relating to any Breakroom Fixtures; (b) heat, ventilation and air
conditioning in season, in accordance with applicable Laws and as is then
customarily provided in buildings of similar class and in the same market area
as the Building, during Building Service Hours. Tenant shall have the right to
receive HVAC service during hours other than Building Service Hours by paying
Landlord’s then standard charge for additional HVAC service and providing such
prior notice as is reasonably specified by Landlord.  As of the date hereof,
Landlord’s charge for after hours heating and air conditioning service is $65.00
per hour, subject to change from time to time.  Landlord specifically agrees
that any increases in such charge for after-hours HVAC service shall be limited
to increases in Landlord’s actual, reasonable costs of supplying the after-hours
HVAC services; (c) standard janitorial service on Business Days; (d) Elevator
service; (e) Electricity in accordance with the terms and conditions in Section
7.02; and (f) such other services as Landlord reasonably determines are
necessary or appropriate for the Property.

 

7.02 Electricity used by Tenant in the Premises shall be paid for by Tenant
through inclusion in Expense Excess (as defined in Exhibit B), if any, and
except as provided below for excess usage. Without the consent of Landlord,
Tenant’s use of electrical service shall not exceed, either in voltage, rated
capacity, or overall load, that which Landlord reasonably deems to be standard
for the Building on a Rentable Square Footage basis, consistently applied to all
tenants of the Building. Landlord shall have the right to measure electrical
usage by commonly accepted methods. If it is determined that Tenant is using
excess electricity, Tenant shall pay Landlord for the cost of such excess
electrical usage as Additional Rent.

 

7.03  Landlord’s failure to furnish, or any interruption, diminishment or
termination of services due to the application of Laws, the failure of any
equipment, the performance of repairs, improvements or alterations, utility
interruptions or the occurrence of an event of Force Majeure (defined in Section
26.03) (collectively a “Service Failure”) shall not render Landlord liable to
Tenant, constitute a constructive eviction of Tenant, give rise to an abatement
of Rent, nor relieve Tenant from the obligation to fulfill any covenant or
agreement. However, if the Premises, or a material portion of the Premises, are
made untenantable for a period in excess of 3 consecutive Business Days as a
result of a Service Failure that is reasonably within the control of Landlord to
correct, then Tenant, as its sole remedy, shall be entitled to receive an
abatement of Rent payable hereunder during the period beginning on the 4th
consecutive Business Day of the Service Failure and ending on the day the
service has been restored.  If the entire Premises have not been rendered
untenantable by the Service Failure, the amount of abatement shall be equitably
prorated.

 

8.             LEASEHOLD IMPROVEMENTS.

 

All improvements in and to the Premises, including any Alterations
(collectively, “Leasehold Improvements”) shall remain upon the Premises at the
end of the Term without compensation to Tenant.  Landlord, however, by written
notice to Tenant at least 30 days prior to the Termination Date, may require
Tenant, at its expense, to remove (a) any Cable (defined in Section 9.01)
installed by or for the benefit of Tenant, and (b) any Alterations other than
the Landlord Work that, in Landlord’s reasonable judgment, are of a nature that
would require removal and repair costs that are materially in excess of the
removal and repair costs associated with standard office improvements
(collectively referred to as “Required Removables”), except for Cable or
Alterations that Landlord has not deemed to be Required Removables following
Tenant’s request for determination at the time of approval of such Alteration,
as set forth below.  Required Removables shall include, without limitation,
internal stairways, raised floors, personal baths and showers, vaults, rolling
file systems and structural alterations and modifications. The designated
Required Removables shall be removed by Tenant before the Termination Date.
Tenant shall repair damage caused by the installation or removal of Required
Removables.  If Tenant fails to perform its obligations in a timely manner,
Landlord may perform such work at Tenant’s expense. Tenant, at the time it
requests approval for a proposed Alteration, may request in writing that
Landlord advise Tenant whether the Alteration or any portion of the Alteration
is a Required Removable.  Within 10 days after receipt of Tenant’s request,
Landlord shall advise Tenant in writing as to which portions of the Alteration
are Required Removables.

 

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9.             REPAIRS AND ALTERATIONS.

 

9.01 Tenant shall periodically inspect the Premises to identify any conditions
that are dangerous or in need of maintenance or repair.  Tenant shall promptly
provide Landlord with notice of any such conditions. Tenant shall, at its sole
cost and expense, perform all maintenance and repairs to the Premises that are
not Landlord’s express responsibility under this Lease, and keep the Premises in
good condition and repair, reasonable wear and tear excepted. Tenant’s repair
and maintenance obligations include, without limitation, repairs to: (a) floor
covering; (b) interior partitions; (c) doors; (d) the interior side of demising
walls; (e) electronic, phone and data cabling and related equipment that is
installed by or for the exclusive benefit of Tenant (collectively, “Cable”); (f)
supplemental air conditioning units, kitchens, including hot water heaters,
plumbing, and similar facilities exclusively serving Tenant; and (g)
Alterations. To the extent Landlord is not reimbursed by insurance proceeds,
Tenant shall reimburse Landlord for the cost of repairing damage to the Building
caused by the acts of Tenant, Tenant Related Parties and their respective
contractors and vendors. If Tenant fails to make any repairs to the Premises for
more than 15 days after notice from Landlord (although notice shall not be
required in an emergency), and provided if such repairs cannot reasonably be
cured within 15 days, Tenant shall be allowed additional time (not to exceed 30
days) as is reasonably necessary to make the repairs so long as Tenant begins
the repairs within 15 days and diligently pursues the cure to completion, then
Landlord may make the repairs, and Tenant shall pay the reasonable cost of the
repairs, together with an administrative charge in an amount equal to 10% of the
cost of the repairs.

 

9.02 Landlord shall keep and maintain in good repair and working order and
perform maintenance upon the: (a) structural elements of the Building; (b)
mechanical (including HVAC), electrical, plumbing and fire/life safety systems
serving the Building in general; (c) Common Areas; (d) roof of the Building; (e)
exterior windows of the Building; and (f) elevators serving the Building.
Landlord shall promptly make repairs for which Landlord is responsible.  Tenant
hereby waives any and all rights under and benefits of subsection 1 of Section
1932, and Sections 1941 and 1942 of the California Civil Code, or any similar or
successor Laws now or hereinafter in effect.

 

9.03 Tenant shall not make alterations, repairs, additions or improvements or
install any Cable (collectively referred to as “Alterations”) without first
obtaining the written consent of Landlord in each instance, which consent shall
not be unreasonably withheld or delayed. However, Landlord’s consent shall not
be required for any Alteration that satisfies all of the following criteria (a
“Cosmetic Alteration”):  (a) is of a cosmetic nature such as painting,
wallpapering, hanging pictures and installing carpeting; (b) is not visible from
the exterior of the Premises or Building; (c) will not affect the Base Building;
and (d) does not require work to be performed inside the walls or above the
ceiling of the Premises.  Cosmetic Alterations shall be subject to all the other
provisions of this Section 9.03.  Prior to starting work, Tenant shall furnish
Landlord with plans and specifications; names of contractors reasonably
acceptable to Landlord (provided that Landlord may designate specific
contractors with respect to Base Building); required permits and approvals;
evidence of contractor’s and subcontractor’s insurance in amounts reasonably
required by Landlord and naming Landlord as an additional insured; and any
security for performance in amounts reasonably required by Landlord.  Changes to
the plans and specifications must also be submitted to Landlord for its
approval. Alterations shall be constructed in a good and workmanlike manner
using materials of a quality reasonably approved by Landlord. Tenant shall
reimburse Landlord for any sums paid by Landlord for third party examination of
Tenant’s plans for non-Cosmetic Alterations.  In addition, Tenant shall pay
Landlord a fee for Landlord’s oversight and coordination of any non-Cosmetic
Alterations equal to 5% of the cost of the Alterations.  Upon completion, Tenant
shall furnish marked-up plans clearly showing all changes and revisions to the
original plans submitted to Landlord for non-Cosmetic Alterations, completion
affidavits and full and final waivers of lien. Landlord’s approval of an
Alteration shall not be deemed a representation by Landlord that the Alteration
complies with Law.

 

10.          ENTRY BY LANDLORD.

 

Landlord may enter the Premises to inspect, show or clean the Premises or to
perform or facilitate the performance of repairs, alterations or additions to
the Premises or any portion of the Building.  Except in emergencies or to
provide Building services, Landlord shall provide Tenant with reasonable prior
verbal notice of entry and shall use reasonable efforts to minimize any
interference with Tenant’s use of the Premises.  If reasonably necessary,
Landlord may temporarily close all or a portion of the Premises to perform
repairs, alterations and additions.  However, except in emergencies, Landlord
will not close the Premises if the work can reasonably be completed on weekends
and after Building Service Hours.  Entry by Landlord shall not constitute a
constructive eviction or entitle Tenant to an abatement or reduction of Rent.

 

11.          ASSIGNMENT AND SUBLETTING.

 

11.01  Except in connection with a Permitted Transfer (defined in Section
11.04), Tenant shall not assign, sublease, transfer or encumber any interest in
this Lease or allow any third party to use any

 

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portion of the Premises (collectively or individually, a “Transfer”) without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed if Landlord does not exercise its recapture
rights under Section 11.02.  If the entity which controls the voting
shares/rights of Tenant changes at any time, such change of ownership or control
shall constitute a Transfer unless Tenant is an entity whose outstanding stock
is listed on a recognized securities exchange or if at least 80% of its voting
stock is owned by another entity, the voting stock of which is so listed. 
Tenant hereby waives the provisions of Section 1995.310 of the California Civil
Code, or any similar or successor Laws, now or hereinafter in effect, and all
other remedies, including, without limitation, any right at law or equity to
terminate this Lease, on its own behalf and, to the extent permitted under all
applicable Laws, on behalf of the proposed transferee.  Any attempted Transfer
in violation of this Section is voidable by Landlord. In no event shall any
Transfer, including a Permitted Transfer, release or relieve Tenant from any
obligation under this Lease.

 

11.02  Tenant shall provide Landlord with financial statements for the proposed
transferee, a fully executed copy of the proposed assignment, sublease or other
Transfer documentation and such other information as Landlord may reasonably
request. Within 15 Business Days after receipt of the required information and
documentation, Landlord shall either: (a) consent to the Transfer by execution
of a consent agreement in a form reasonably designated by Landlord; (b)
reasonably refuse to consent to the Transfer in writing, stating Landlord’s
reason(s) for such refusal; or (c) in the event of an assignment of this Lease
or subletting of more than 50% of the Rentable Area of the Premises for more
than 50% of the remaining Term (excluding unexercised options), recapture the
portion of the Premises that Tenant is proposing to Transfer. If Landlord
exercises its right to recapture, this Lease shall automatically be amended (or
terminated if the entire Premises is being assigned or sublet) to delete the
applicable portion of the Premises effective on the proposed effective date of
the Transfer.  Tenant shall pay Landlord a review fee of $1,000.00 for
Landlord’s review of any Permitted Transfer or requested Transfer.

 

11.03  Tenant shall pay Landlord 50% of all rent and other consideration which
Tenant receives as a result of a Transfer that is in excess of the Rent payable
to Landlord for the portion of the Premises and Term covered by the Transfer. 
Tenant shall pay Landlord for Landlord’s share of the excess within 30 days
after Tenant’s receipt of the excess, provided that Tenant may first deduct from
the excess all reasonable and customary expenses directly incurred by Tenant
attributable to the Transfer.  If Tenant is in Default, Landlord may require
that all sublease payments be made directly to Landlord, in which case Tenant
shall receive a credit against Rent in the amount of Tenant’s share of payments
received by Landlord.

 

11.04 Tenant may assign this Lease to a successor to Tenant by purchase, merger,
consolidation or reorganization (an “Ownership Change”) or assign this Lease or
sublet all or a portion of the Premises to an Affiliate without the consent of
Landlord, provided that all of the following conditions are satisfied (a
“Permitted Transfer”):  (a) Tenant is not in Default; (b) in the event of an
Ownership Change, Tenant’s successor shall own substantially all of the assets
of Tenant and have a net worth which is at least equal to Tenant’s net worth as
of the day prior to the proposed Ownership Change; (c) the Permitted Use does
not allow the Premises to be used for retail purposes; and (d) Tenant shall give
Landlord written notice at least 15 Business Days prior to the effective date of
the Permitted Transfer. Tenant’s notice to Landlord shall include information
and documentation evidencing the Permitted Transfer and showing that each of the
above conditions has been satisfied.  If requested by Landlord, Tenant’s
successor shall sign a commercially reasonable form of assumption agreement.
“Affiliate” shall mean an entity controlled by, controlling or under common
control with Tenant.

 

12.          LIENS.

 

Tenant shall not permit mechanics’ or other liens to be placed upon the
Property, Premises or Tenant’s leasehold interest in connection with any work or
service done or purportedly done by or for the benefit of Tenant or its
transferees.  Tenant shall give Landlord notice at least 15 days prior to the
commencement of any work in the Premises to afford Landlord the opportunity,
where applicable, to post and record notices of non-responsibility. Tenant,
within 10 days of notice from Landlord, shall fully discharge any lien by
settlement, by bonding or by insuring over the lien in the manner prescribed by
the applicable lien Law.  If Tenant fails to do so, Landlord may bond, insure
over or otherwise discharge the lien.  Tenant shall reimburse Landlord for any
amount paid by Landlord, including, without limitation, reasonable attorneys’
fees.

 

13.          INDEMNITY AND WAIVER OF CLAIMS.

 

Tenant hereby waives all claims against and releases Landlord and its trustees,
members, principals, beneficiaries, partners, officers, directors, employees,
Mortgagees (defined in Section 23) and agents (the “Landlord Related Parties”)
from all claims for any injury to or death of persons, damage to property or
business loss in any manner related to (a) Force Majeure, (b) acts of third
parties, (c) the bursting or leaking of any tank, water closet, drain or other
pipe, (d) the inadequacy or failure of any security services, personnel or
equipment,or (e) any matter not within the reasonable control of

 

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Landlord. Except to the extent caused by the negligence or willful misconduct of
Landlord or any Landlord Related Parties, Tenant shall indemnify, defend and
hold Landlord and Landlord Related Parties harmless against and from all
liabilities, obligations, damages, penalties, claims, actions, costs, charges
and expenses, including, without limitation, reasonable attorneys’ fees and
other professional fees (if and to the extent permitted by Law) (collectively
referred to as “Losses”), which may be imposed upon, incurred by or asserted
against Landlord or any of the Landlord Related Parties by any third party and
arising out of or in connection with any damage or injury occurring in the
Premises or any acts or omissions (including violations of Law) of Tenant, the
Tenant Related Parties or any of Tenant’s transferees, contractors or
licensees.  Except to the extent caused by the negligence or willful misconduct
of Tenant or any Tenant Related Parties, Landlord shall indemnify, defend and
hold Tenant, its trustees, members, principals, beneficiaries, partners,
officers, directors, employees and agents (“Tenant Related Parties”) harmless
against and from all Losses which may be imposed upon, incurred by or asserted
against Tenant or any of the Tenant Related Parties by any third party and
arising out of or in connection with the acts or omissions (including violations
of Law) of Landlord or the Landlord Related Parties.

 

14.          INSURANCE.

 

Tenant shall maintain the following insurance (“Tenant’s Insurance”):  (a)
Commercial General Liability Insurance applicable to the Premises and its
appurtenances providing, on an occurrence basis, a minimum combined single limit
of $2,000,000.00; (b)  Property/Business Interruption Insurance written on an
All Risk or Special Perils form, with coverage for broad form water damage
including earthquake sprinkler leakage, at replacement cost value and with a
replacement cost endorsement covering all of Tenant’s business and trade
fixtures, equipment, movable partitions, furniture, merchandise and other
personal property within the Premises (“Tenant’s Property”) and any Leasehold
Improvements performed by or for the benefit of Tenant; (c) Workers’
Compensation Insurance in amounts required by Law; and (d) Employers Liability
Coverage of at least $1,000,000.00 per occurrence.  Any company writing Tenant’s
Insurance shall have an A.M. Best rating of not less than A-VIII.  All
Commercial General Liability Insurance policies shall name as additional
insureds Landlord (or its successors and assignees), the managing agent for the
Building (or any successor), EOP Operating Limited Partnership, Equity Office
Properties Trust and their respective members, principals, beneficiaries,
partners, officers, directors, employees, and agents (so long as such entities
have a direct or indirect ownership interest or management position in the
Building), and other designees of Landlord and its successors as the interest of
such designees shall appear. All policies of Tenant’s Insurance shall contain
endorsements that the insurer(s) shall give Landlord and its designees at least
30 days’ advance written notice of any cancellation, termination, material
change or lapse of insurance. Tenant shall provide Landlord with a certificate
of insurance evidencing Tenant’s Insurance prior to the earlier to occur of the
Commencement Date or the date Tenant is provided with possession of the
Premises, and thereafter as necessary to assure that Landlord always has current
certificates evidencing Tenant’s Insurance. So long as the same is available at
commercially reasonable rates, Landlord shall maintain so called All Risk
property insurance on the Building at replacement cost value as reasonably
estimated by Landlord.

 

15.          SUBROGATION.

 

Landlord and Tenant hereby waive and shall cause their respective insurance
carriers to waive any and all rights of recovery, claims, actions or causes of
action against the other for any loss or damage with respect to Tenant’s
Property, Leasehold Improvements, the Building, the Premises, or any contents
thereof, including rights, claims, actions and causes of action based on
negligence, which loss or damage is (or would have been, had the insurance
required by this Lease been carried) covered by insurance.

 

16.          CASUALTY DAMAGE.

 

16.01  If all or any portion of the Premises becomes untenantable by fire or
other casualty to the Premises (collectively a “Casualty”), Landlord, with
reasonable promptness, shall cause a general contractor selected by Landlord to
provide Landlord and Tenant with a written estimate of the amount of time
required using standard working methods to Substantially Complete the repair and
restoration of the Premises for Tenant’s Permitted Use and of any Common Areas
necessary to provide access to the Premises by Tenant  (“Completion Estimate”). 
If the Completion Estimate indicates that the Premises or any Common Areas
necessary to provide access to the Premises cannot be made tenantable within 270
days from the date the repair is started, then either party shall have the right
to terminate this Lease upon written notice to the other within 10 days after
receipt of the Completion Estimate.  Tenant, however, shall not have the right
to terminate this Lease if the Casualty was caused by the negligence or
intentional misconduct of Tenant or any Tenant Related Parties. In addition,
Landlord, by notice to Tenant within 90 days after the date of the Casualty,
shall have the right to terminate this Lease if:  (1) the Premises have been
materially damaged and there is less than 2 years of the Term remaining on the
date of the Casualty; (2) any Mortgagee requires that the insurance proceeds be
applied to the payment of the mortgage debt; or (3) a material uninsured loss to
the Building occurs.

 

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16.02  If this Lease is not terminated, Landlord shall promptly and diligently,
subject to reasonable delays for insurance adjustment or other matters beyond
Landlord’s reasonable control, restore the Premises and Common Areas. Such
restoration shall be to substantially the same condition that existed prior to
the Casualty except for modifications required by Law, and except for any other
modifications to the Common Areas deemed desirable by Landlord that do not
materially reduce Tenant’s rights and benefits under this Lease. Upon notice
from Landlord, Tenant shall assign to Landlord (or to any party designated by
Landlord) all property insurance proceeds payable to Tenant under Tenant’s
Insurance with respect to any Leasehold Improvements performed by or for the
benefit of Tenant; provided if the estimated cost to repair such Leasehold
Improvements exceeds the amount of insurance proceeds received by Landlord from
Tenant’s insurance carrier, the excess cost of such repairs shall be paid by
Tenant to Landlord prior to Landlord’s commencement of repairs.  Within 15 days
of demand, Tenant shall also pay Landlord for any additional excess costs that
are determined during the performance of the repairs. Landlord shall not be
liable for any inconvenience to Tenant, or injury to Tenant’s business resulting
in any way from the Casualty or the repair thereof.  Provided that Tenant is not
in Default, during any period of time that all or a material portion of the
Premises is rendered untenantable as a result of a Casualty, the Rent shall
abate for the portion of the Premises that is untenantable and not used by
Tenant.

 

16.03  The provisions of this Lease, including this Section 16, constitute an
express agreement between Landlord and Tenant with respect to any and all damage
to, or destruction of, all or any part of the Premises or the Property, and any
Laws, including, without limitation, Sections 1932(2) and 1933(4) of the
California Civil Code, with respect to any rights or obligations concerning
damage or destruction in the absence of an express agreement between the
parties, and any similar or successor Laws now or hereinafter in effect, shall
have no application to this Lease or any damage or destruction to all or any
part of the Premises or the Property.

 

17.          CONDEMNATION.

 

Either party may terminate this Lease if any material part of the Premises is
taken or condemned for any public or quasi-public use under Law, by eminent
domain or private purchase in lieu thereof (a “Taking”).  Landlord shall also
have the right to terminate this Lease if there is a Taking of any portion of
the Building or Property which would have a material adverse effect on
Landlord’s ability to profitably operate the remainder of the Building.  The
terminating party shall provide written notice of termination to the other party
within 45 days after it first receives notice of the Taking.  The termination
shall be effective on the date the physical taking occurs.  If this Lease is not
terminated, Base Rent and Tenant’s Pro Rata Share shall be appropriately
adjusted to account for any reduction in the square footage of the Building or
Premises. All compensation awarded for a Taking shall be the property of
Landlord.  The right to receive compensation or proceeds are expressly waived by
Tenant, however, Tenant may file a separate claim for Tenant’s Property and
Tenant’s reasonable relocation expenses, provided the filing of the claim does
not diminish the amount of Landlord’s award.  If only a part of the Premises is
subject to a Taking and this Lease is not terminated, Landlord, with reasonable
diligence, will restore the remaining portion of the Premises as nearly as
practicable to the condition immediately prior to the Taking.  Tenant hereby
waives any and all rights it might otherwise have pursuant to Section 1265.130
of the California Code of Civil Procedure, or any similar or successor Laws.

 

18.          EVENTS OF DEFAULT.

 

Each of the following occurrences shall be a “Default”: (a) Tenant’s failure to
pay any portion of Rent when due, if the failure continues for 3 days after
written notice to Tenant (“Monetary Default”); (b) Tenant’s failure (other than
a Monetary Default) to comply with any term, provision, condition or covenant of
this Lease, if the failure is not cured within 10 days after written notice to
Tenant provided, however, if Tenant’s failure to comply cannot reasonably be
cured within 10 days, Tenant shall be allowed additional time (not to exceed 60
days) as is reasonably necessary to cure the failure so long as Tenant begins
the cure within 10 days and diligently pursues the cure to completion; (c)
Tenant or any Guarantor becomes insolvent, makes a transfer in fraud of
creditors, makes an assignment for the benefit of creditors, admits in writing
its inability to pay its debts when due or forfeits or loses its right to
conduct business; (d) the leasehold estate is taken by process or operation of
Law; or (e) Tenant is in default beyond any notice and cure period under any
other lease or agreement with Landlord at the Building or Property. If Landlord
provides Tenant with notice of Tenant’s failure to comply with any specific
provision of this Lease on 3 separate occasions during any 12 month period,
Tenant’s subsequent violation of such provision shall, at Landlord’s option, be
an incurable Default by Tenant. All notices sent under this Section shall be in
satisfaction of, and not in addition to, notice required by Law.

 

19.          REMEDIES.

 

19.01  Upon the occurrence of any Default under this Lease, whether enumerated
in Section 18 or not, Landlord shall have the option to pursue any one or more
of the following remedies without any notice

 

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(except as expressly prescribed herein) or demand whatsoever (and without
limiting the generality of the foregoing, Tenant hereby specifically waives
notice and demand for payment of Rent or other obligations, except for those
notices specifically required pursuant to the terms of Section 18 or this
Section 19, and waives any and all other notices or demand requirements imposed
by applicable law):

 

(a)           Terminate this Lease and Tenant’s right to possession of the
Premises and recover from Tenant an award of damages equal to the sum of the
following:

 

(i)            The Worth at the Time of Award of the unpaid Rent which had been
earned at the time of termination;

 

(ii)           The Worth at the Time of Award of the amount by which the unpaid
Rent which would have been earned after termination until the time of award
exceeds the amount of such Rent loss that Tenant affirmatively proves could have
been reasonably avoided;

 

(iii)          The Worth at the Time of Award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds the amount of
such Rent loss that Tenant affirmatively proves could be reasonably avoided;

 

(iv)          Any other amount necessary to compensate Landlord for all the
detriment either proximately caused by Tenant’s failure to perform Tenant’s
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom; and

 

(v)           All such other amounts in addition to or in lieu of the foregoing
as may be permitted from time to time under applicable law.

 

The “Worth at the Time of Award” of the amounts referred to in parts (i) and
(ii) above, shall be computed by allowing interest at the lesser of a per annum
rate equal to: (A) the greatest per annum rate of interest permitted from time
to time under applicable law, or (B) the Prime Rate plus 5%.  For purposes
hereof, the “Prime Rate” shall be the per annum interest rate publicly announced
as its prime or base rate by a federally insured bank selected by Landlord in
the State of California.  The “Worth at the Time of Award” of the amount
referred to in part (iii), above, shall be computed by discounting such amount
at the discount rate of the Federal Reserve Bank of San Francisco at the time of
award plus 1%;

 

(b)           Employ the remedy described in California Civil Code § 1951.4
(Landlord may continue this Lease in effect after Tenant’s breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations); or

 

(c)           Notwithstanding Landlord’s exercise of the remedy described in
California Civil Code § 1951.4 in respect of an event or events of default, at
such time thereafter as Landlord may elect in writing, to terminate this Lease
and Tenant’s right to possession of the Premises and recover an award of damages
as provided above in Paragraph 19.01(a).

 

19.02  The subsequent acceptance of Rent hereunder by Landlord shall not be
deemed to be a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, other than the failure of Tenant to pay the particular
Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at
the time of acceptance of such Rent.  No waiver by Landlord of any breach hereof
shall be effective unless such waiver is in writing and signed by Landlord.

 

19.03  TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION 3275 OF THE
CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (c) AND 1179 OF THE CODE OF CIVIL
PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER LAWS AND RULES OF LAW FROM TIME TO
TIME IN EFFECT DURING THE LEASE TERM PROVIDING THAT TENANT SHALL HAVE ANY RIGHT
TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS TERMINATION BY REASON
OF TENANT’S BREACH.  TENANT ALSO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING
TO THIS LEASE.

 

19.04  No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given hereunder or now or hereafter existing by agreement, applicable law or in
equity.  In addition to other remedies provided in this Lease, Landlord shall be
entitled, to the extent permitted by applicable law, to injunctive relief, or to
a decree compelling performance of any of the covenants, agreements, conditions
or provisions of this Lease, or to any other remedy allowed to Landlord

 

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at law or in equity.  Forbearance by Landlord to enforce one or more of the
remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default.

 

19.05  If Tenant is in Default of any of its non-monetary obligations under the
Lease, Landlord shall have the right to perform such obligations.  Tenant shall
reimburse Landlord for the cost of such performance upon demand together with an
administrative charge equal to 10% of the cost of the work performed by
Landlord.

 

19.06  This Section 19 shall be enforceable to the maximum extent such
enforcement is not prohibited by applicable law, and the unenforceability of any
portion thereof shall not thereby render unenforceable any other portion.

 

20.          LIMITATION OF LIABILITY.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE LIABILITY
OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE LESSER OF
(A) THE INTEREST OF LANDLORD IN THE PROPERTY, OR (B) THE EQUITY INTEREST
LANDLORD WOULD HAVE IN THE PROPERTY IF THE PROPERTY WERE ENCUMBERED BY THIRD
PARTY DEBT IN AN AMOUNT EQUAL TO 70% OF THE VALUE OF THE PROPERTY.  TENANT SHALL
LOOK SOLELY TO LANDLORD’S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY
JUDGMENT OR AWARD AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY. NEITHER
LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY LIABLE FOR ANY
JUDGMENT OR DEFICIENCY, AND IN NO EVENT SHALL LANDLORD OR ANY LANDLORD RELATED
PARTY BE LIABLE TO TENANT FOR ANY LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR
ANY FORM OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE.  BEFORE FILING SUIT FOR
AN ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S)
WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN SECTION 23 BELOW),
NOTICE AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.

 

21.          [INTENTIONALLY OMITTED.]

 

22.          HOLDING OVER.

 

If Tenant fails to surrender all or any part of the Premises at the termination
of this Lease, occupancy of the Premises after termination shall be that of a
tenancy at sufferance.  Tenant’s occupancy shall be subject to all the terms and
provisions of this Lease, and Tenant shall pay an amount (on a per month basis
without reduction for partial months during the holdover) equal to 150% of the
sum of the Base Rent and Additional Rent due for the period immediately
preceding the holdover.  No holdover by Tenant or payment by Tenant after the
termination of this Lease shall be construed to extend the Term or prevent
Landlord from immediate recovery of possession of the Premises by summary
proceedings or otherwise. If Landlord is unable to deliver possession of the
Premises to a new tenant or to perform improvements for a new tenant as a result
of Tenant’s holdover and Tenant fails to vacate the Premises within 15 days
after notice from Landlord, Tenant shall be liable for all damages that Landlord
suffers from the holdover.

 

23.          SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE.

 

Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of
trust, ground lease(s) or other lien(s) now or subsequently arising upon the
Premises, the Building or the Property, and to renewals, modifications,
refinancings and extensions thereof (collectively referred to as a “Mortgage”).
The party having the benefit of a Mortgage shall be referred to as a
“Mortgagee”. This clause shall be self-operative, but upon request from a
Mortgagee, Tenant shall execute a commercially reasonable subordination
agreement in favor of the Mortgagee. As an alternative, a Mortgagee shall have
the right at any time to subordinate its Mortgage to this Lease.  Upon request,
Tenant, without charge, shall attorn to any successor to Landlord’s interest in
this Lease.  Notwithstanding the foregoing, upon written request by Tenant,
Landlord will use reasonable efforts to obtain a non-disturbance, subordination
and attornment agreement from Landlord’s then current Mortgagee on such
Mortgagee’s then current standard form of agreement.  “Reasonable efforts” of
Landlord shall not require Landlord to incur any cost, expense or liability to
obtain such agreement, it being agreed that Tenant shall be responsible for any
fee or review costs charged by the Mortgagee.  Upon request of Landlord, Tenant
will execute the Mortgagee’s form of non-disturbance, subordination and
attornment agreement and return the same to Landlord for execution by the
Mortgagee.  Landlord’s failure to obtain a non-disturbance, subordination and
attornment agreement for Tenant shall have no effect on the rights, obligations
and liabilities of Landlord and Tenant or be considered to be a default by
Landlord hereunder.  Landlord and Tenant shall each, within 10 days after
receipt of a written request from the other, execute and deliver a commercially
reasonable estoppel certificate to those parties as are reasonably requested by
the other (including a Mortgagee or prospective purchaser). Without limitation,

 

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such estoppel certificate may include a certification as to the status of this
Lease, the existence of any defaults and the amount of Rent that is due and
payable.

 

24.          NOTICE.

 

All demands, approvals, consents or notices (collectively referred to as a
“notice”) shall be in writing and delivered by hand or sent by registered or
certified mail with return receipt requested or sent by overnight or same day
courier service at the party’s respective Notice Address(es) set forth in
Section 1.  Each notice shall be deemed to have been received on the earlier to
occur of actual delivery or the date on which delivery is refused, or, if Tenant
has vacated the Premises or any other Notice Address of Tenant without providing
a new Notice Address, 3 days after notice is deposited in the U.S. mail or with
a courier service in the manner described above.  Either party may, at any time,
change its Notice Address (other than to a post office box address) by giving
the other party written notice of the new address.

 

25.          SURRENDER OF PREMISES.

 

At the termination of this Lease or Tenant’s right of possession, Tenant shall
remove Tenant’s Property from the Premises, and quit and surrender the Premises
to Landlord, broom clean, and in good order, condition and repair, ordinary wear
and tear and damage which Landlord is obligated to repair hereunder excepted. If
Tenant fails to remove any of Tenant’s Property within 2 days after termination
of this Lease or Tenant’s right to possession, Landlord, at Tenant’s sole cost
and expense, shall be entitled (but not obligated) to remove and store Tenant’s
Property.  Landlord shall not be responsible for the value, preservation or
safekeeping of Tenant’s Property.  Tenant shall pay Landlord, upon demand, the
expenses and storage charges incurred. If Tenant fails to remove Tenant’s
Property from the Premises or storage, within 30 days after notice, Landlord may
deem all or any part of Tenant’s Property to be abandoned and title to Tenant’s
Property shall vest in Landlord.

 

26.          MISCELLANEOUS.

 

26.01  This Lease shall be interpreted and enforced in accordance with the Laws
of the State of California and Landlord and Tenant hereby irrevocably consent to
the jurisdiction and proper venue of such state or commonwealth.  If any term or
provision of this Lease shall to any extent be void or unenforceable, the
remainder of this Lease shall not be affected. If there is more than one Tenant
or if Tenant is comprised of more than one party or entity, the obligations
imposed upon Tenant shall be joint and several obligations of all the parties
and entities, and requests or demands from any one person or entity comprising
Tenant shall be deemed to have been made by all such persons or entities. 
Notices to any one person or entity shall be deemed to have been given to all
persons and entities. Tenant represents and warrants to Landlord that each
individual executing this Lease on behalf of Tenant is authorized to do so on
behalf of Tenant and that Tenant is not, and the entities or individuals
constituting Tenant or which may own or control Tenant or which may be owned or
controlled by Tenant are not, among the individuals or entities identified on
any list compiled pursuant to Executive Order 13224 for the purpose of
identifying suspected terrorists.

 

26.02  If either party institutes a suit against the other for violation of or
to enforce any covenant, term or condition of this Lease, the prevailing party
shall be entitled to all of its costs and expenses, including, without
limitation, reasonable attorneys’ fees.  Landlord and Tenant hereby waive any
right to trial by jury in any proceeding based upon a breach of this Lease. 
Either party’s failure to declare a default immediately upon its occurrence, or
delay in taking action for a default, shall not constitute a waiver of the
default, nor shall it constitute an estoppel.

 

26.03  Whenever a period of time is prescribed for the taking of an action by
Landlord or Tenant (other than the payment of the Security Deposit or Rent), the
period of time for the performance of such action shall be extended by the
number of days that the performance is actually delayed due to strikes, acts of
God, shortages of labor or materials, war, terrorist acts, civil disturbances
and other causes beyond the reasonable control of the performing party (“Force
Majeure”).

 

26.04  Landlord shall have the right to transfer and assign, in whole or in
part, all of its rights and obligations under this Lease and in the Building and
Property.  Upon transfer Landlord shall be released from any further obligations
hereunder and Tenant agrees to look solely to the successor in interest of
Landlord for the performance of such obligations, provided that, any successor
pursuant to a voluntary, third party transfer (but not as part of an involuntary
transfer resulting from a foreclosure or deed in lieu thereof) shall have
assumed Landlord’s obligations under this Lease.

 

26.05  Landlord has delivered a copy of this Lease to Tenant for Tenant’s review
only and the delivery of it does not constitute an offer to Tenant or an option.
Tenant represents that it has dealt directly with and only with the Broker as a
broker in connection with this Lease. Landlord agrees to pay a brokerage
commission to Broker in accordance with the terms of a separate written
commission

 

12

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agreement to be entered into between Landlord and Broker. Tenant shall indemnify
and hold Landlord and the Landlord Related Parties harmless from all claims of
any other brokers claiming to have represented Tenant in connection with this
Lease. Landlord shall indemnify and hold Tenant and the Tenant Related Parties
harmless from all claims of any brokers claiming to have represented Landlord in
connection with this Lease.  Equity Office Properties Management Corp. (“EOPMC”)
is an affiliate of Landlord and represents only the Landlord in this
transaction.  Any assistance rendered by any agent or employee of EOPMC in
connection with this Lease or any subsequent amendment or modification hereto
has been or will be made as an accommodation to Tenant solely in furtherance of
consummating the transaction on behalf of Landlord, and not as agent for Tenant.

 

26.06 Time is of the essence with respect to Tenant’s exercise of any expansion,
renewal or extension rights granted to Tenant. The expiration of the Term,
whether by lapse of time, termination or otherwise, shall not relieve either
party of any obligations which accrued prior to or which may continue to accrue
after the expiration or termination of this Lease.

 

26.07  Tenant may peacefully have, hold and enjoy the Premises, subject to the
terms of this Lease, provided Tenant pays the Rent and fully performs all of its
covenants and agreements.  This covenant shall be binding upon Landlord and its
successors only during its or their respective periods of ownership of the
Building.

 

26.08  This Lease does not grant any rights to light or air over or about the
Building.  Landlord excepts and reserves exclusively to itself any and all
rights not specifically granted to Tenant under this Lease. This Lease
constitutes the entire agreement between the parties and supersedes all prior
agreements and understandings related to the Premises, including all lease
proposals, letters of intent and other documents.  Neither party is relying upon
any warranty, statement or representation not contained in this Lease.  This
Lease may be modified only by a written agreement signed by an authorized
representative of Landlord and Tenant.

 

 

[SIGNATURES ARE ON FOLLOWING PAGE]

 

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Landlord and Tenant have executed this Lease as of the day and year first above
written.

 

 

 

LANDLORD:

 

 

 

EOP-PENINSULA OFFICE PARK, L.L.C., a Delaware
limited liability company

 

 

 

By:

EOP Operating Limited Partnership, a Delaware
limited partnership, its sole member

 

 

 

 

 

By:

Equity Office Properties Trust, a Maryland
real estate investment trust, its general
partner

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

TENANT:

 

 

 

LIBERATE TECHNOLOGIES, a Delaware corporation

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Tenant’s Tax ID Number (SSN or FEIN)

 

14

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EXHIBIT A

 

OUTLINE AND LOCATION OF PREMISES

 

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EXHIBIT B

 

EXPENSES AND TAXES

 

This Exhibit is attached to and made a part of the Lease by and between
EOP-PENINSULA OFFICE PARK, L.L.C., a Delaware limited liability company
(“Landlord”) and LIBERATE TECHNOLOGIES, a Delaware corporation (“Tenant”) for
space in the Building located at 2655 Campus Drive, San Mateo, California.

 

1.             Payments.

 

1.01  Tenant shall pay Tenant’s Pro Rata Share of the amount, if any, by which
Expenses (defined below) for each calendar year during the Term exceed Expenses
for the Base Year (the “Expense Excess”) and also the amount, if any, by which
Taxes (defined below) for each calendar year during the Term exceed Taxes for
the Base Year (the “Tax Excess”).  If Expenses or Taxes in any calendar year
decrease below the amount of Expenses or Taxes for the Base Year, Tenant’s Pro
Rata Share of Expenses or Taxes, as the case may be, for that calendar year
shall be $0.  Landlord shall provide Tenant with a good faith estimate of the
Expense Excess and of the Tax Excess for each calendar year during the Term.  On
or before the first day of each month, Tenant shall pay to Landlord a monthly
installment equal to one-twelfth of Tenant’s Pro Rata Share of Landlord’s
estimate of both the Expense Excess and Tax Excess. After its receipt of the
revised estimate, Tenant’s monthly payments shall be based upon the revised
estimate.  If Landlord does not provide Tenant with an estimate of the Expense
Excess or the Tax Excess by January 1 of a calendar year, Tenant shall continue
to pay monthly installments based on the previous year’s estimate(s) until
Landlord provides Tenant with the new estimate.

 

1.02  As soon as is practical following the end of each calendar year, Landlord
shall furnish Tenant with a statement of the actual Expenses and Expense Excess
and the actual Taxes and Tax Excess for the prior calendar year.  If the
estimated Expense Excess or estimated Tax Excess for the prior calendar year is
more than the actual Expense Excess or actual Tax Excess, as the case may be,
for the prior calendar year, Landlord shall either provide Tenant with a refund
or apply any overpayment by Tenant against Additional Rent due or next becoming
due, provided if the Term expires before the determination of the overpayment,
Landlord shall refund any overpayment to Tenant after first deducting the amount
of Rent due.  If the estimated Expense Excess or estimated Tax Excess for the
prior calendar year is less than the actual Expense Excess or actual Tax Excess,
as the case may be, for such prior year, Tenant shall pay Landlord, within 30
days after its receipt of the statement of Expenses or Taxes, any underpayment
for the prior calendar year.

 

2.             Expenses.

 

2.01  “Expenses” means all costs and expenses incurred in each calendar year in
connection with operating, maintaining, repairing, and managing the Building and
the Property.  Landlord agrees to act in a commercially reasonable manner in
incurring Expenses, taking into consideration the class and the quality of the
Building.  Expenses include, without limitation: (a) all labor and labor related
costs, including wages, salaries, bonuses, taxes, insurance, uniforms, training,
retirement plans, pension plans and other employee benefits; (b) management
fees; (c) the cost of equipping, staffing and operating an on-site and/or
off-site management office for the Building, provided if the management office
services one or more other buildings or properties, the shared costs and
expenses of equipping, staffing and operating such management office(s) shall be
equitably prorated and apportioned between the Building and the other buildings
or properties; (d) accounting costs; (e) the cost of services; (f) rental and
purchase cost of parts, supplies, tools and equipment; (g) insurance premiums
and deductibles; (h) electricity, gas and other utility costs; and (i) the
amortized cost of capital improvements (as distinguished from replacement parts
or components installed in the ordinary course of business) made subsequent to
the Base Year which are:  (1) performed primarily to reduce current or future
operating expense costs, upgrade Building security or otherwise improve the
operating efficiency of the Property; or (2) required to comply with any Laws
that are enacted, or first interpreted to apply to the Property, after the date
of this Lease.  The cost of capital improvements shall be amortized by Landlord
over the lesser of the Payback Period (defined below) or the useful life of the
capital improvement as reasonably determined by Landlord. The amortized cost of
capital improvements may, at Landlord’s option, include actual or imputed
interest at the rate that Landlord would reasonably be required to pay to
finance the cost of the capital improvement. “Payback Period” means the
reasonably estimated period of time that it takes for the cost savings resulting
from a capital improvement to equal the total cost of the capital improvement.
Landlord, by itself or through an affiliate, shall have the right to directly
perform, provide and be compensated for any services under this Lease. If
Landlord incurs Expenses for the Building or Property together with one or more
other buildings or properties, whether pursuant to a reciprocal easement
agreement, common area agreement or otherwise, the shared costs and expenses
shall be equitably prorated and apportioned between the Building and Property
and the other buildings or properties.

 

1

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2.02  Expenses shall not include: the cost of capital improvements (except as
set forth above); depreciation; principal payments of mortgage and other
non-operating debts of Landlord; the cost of repairs or other work to the extent
Landlord is reimbursed by insurance or condemnation proceeds; costs in
connection with leasing space in the Building, including brokerage commissions;
lease concessions, rental abatements and construction allowances granted to
specific tenants; costs incurred in connection with the sale, financing or
refinancing of the Building; fines, interest and penalties incurred due to the
late payment of Taxes or Expenses; organizational expenses associated with the
creation and operation of the entity which constitutes Landlord; or any
penalties or damages that Landlord pays to Tenant under this Lease or to other
tenants in the Building under their respective leases.

 

2.03 If at any time during a calendar year the Building is not at least 95%
occupied or Landlord is not supplying services to at least 95% of the total
Rentable Square Footage of the Building, variable Expenses (i.e. those that vary
with occupancy) shall, at Landlord’s option, be determined as if the Building
had been 95% occupied and Landlord had been supplying services to 95% of the
Rentable Square Footage of the Building.  If Expenses for a calendar year are
determined as provided in the prior sentence, Expenses for the Base Year shall
also be determined in such manner. Notwithstanding the foregoing, Landlord may
calculate the extrapolation of Expenses under this Section based on 100%
occupancy and service so long as such percentage is used consistently for each
year of the Term. The extrapolation of Expenses under this Section shall be
performed in accordance with the methodology specified by the Building Owners
and Managers Association.

 

3.  “Taxes” shall mean:  (a) all real property taxes and other assessments on
the Building and/or Property, including, but not limited to, gross receipts
taxes, assessments for special improvement districts and building improvement
districts, governmental charges, fees and assessments for police, fire, traffic
mitigation or other governmental service of purported benefit to the Property,
taxes and assessments levied in substitution or supplementation in whole or in
part of any such taxes and assessments and the Property’s share of any real
estate taxes and assessments under any reciprocal easement agreement, common
area agreement or similar agreement as to the Property; (b) all personal
property taxes for property that is owned by Landlord and used in connection
with the operation, maintenance and repair of the Property; and (c) all costs
and fees incurred in connection with seeking reductions in any tax liabilities
described in (a) and (b), including, without limitation, any costs incurred by
Landlord for compliance, review and appeal of tax liabilities for tax years that
occur in whole or in part during the Term.  Without limitation, Taxes shall not
include any income, capital levy, transfer, capital stock, gift, estate or
inheritance tax. If a change in Taxes is obtained for any year of the Term
during which Tenant paid Tenant’s Pro Rata Share of any Tax Excess, then Taxes
for that year will be retroactively adjusted and Landlord shall provide Tenant
with a credit, if any, based on the adjustment.  Likewise, if a change is
obtained for Taxes for the Base Year, Taxes for the Base Year shall be restated
and the Tax Excess for all subsequent years shall be recomputed.  Tenant shall
pay Landlord the amount of Tenant’s Pro Rata Share of any such increase in the
Tax Excess within 30 days after Tenant’s receipt of a statement from Landlord.

 

4.  Audit Rights.  Tenant, within 365 days after receiving Landlord’s statement
of Expenses, may give Landlord written notice (“Review Notice”) that Tenant
intends to review Landlord’s records of the Expenses for the calendar year to
which the statement applies.  Within a reasonable time after receipt of the
Review Notice, Landlord shall make all pertinent records available for
inspection that are reasonably necessary for Tenant to conduct its review.  If
any records are maintained at a location other than the management office for
the Building, Tenant may either inspect the records at such other location or
pay for the reasonable cost of copying and shipping the records.  If Tenant
retains an agent to review Landlord’s records, the agent must be with a CPA firm
licensed to do business in the state or commonwealth where the Property is
located.  Notwithstanding the foregoing, Landlord agrees that Tenant may retain
a third party agent to review Landlord’s books and records which is not a CPA
firm, so long as the third party agent retained by Tenant shall have expertise
in and familiarity with general industry practice with respect to the operation
of and accounting for a first class office building and whose compensation shall
in no way be contingent upon or correspond to the financial impact on Tenant
resulting from the review.  Tenant shall be solely responsible for all costs,
expenses and fees incurred for the audit.  Within 90 days after the records are
made available to Tenant, Tenant shall have the right to give Landlord written
notice (an “Objection Notice”) stating in reasonable detail any objection to
Landlord’s statement of Expenses for that year. If Tenant fails to give Landlord
an Objection Notice within the 90 day period or fails to provide Landlord with a
Review Notice within the 365 day period described above, Tenant shall be deemed
to have approved Landlord’s statement of Expenses and shall be barred from
raising any claims regarding the Expenses for that year.  The records obtained
by Tenant shall be treated as confidential.  In no event shall Tenant be
permitted to examine Landlord’s records or to dispute any statement of Expenses
unless Tenant has paid and continues to pay all Rent as provided in the Lease.

 

2

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EXHIBIT C

 

WORK LETTER

 

This Exhibit is attached to and made a part of the Lease by and between
EOP-PENINSULA OFFICE PARK, L.L.C., a Delaware limited liability company
(“Landlord”) and LIBERATE TECHNOLOGIES, a Delaware corporation (“Tenant”) for
space in the Building located at 2655 Campus Drive, San Mateo, California.

 

As used in this Work Letter, the “Premises” shall be deemed to mean the
Premises, as initially defined in the attached Lease.

 

1.             Landlord shall perform improvements to the Premises substantially
in accordance with the plans prepared by Brereton Architects, dated November 21,
2003 (the “Plans”).  The improvements to be performed by Landlord in accordance
with the Plans are hereinafter referred to as the “Landlord Work.”  It is agreed
that construction of the Landlord Work will be completed at Landlord’s sole cost
and expense (subject to the Maximum Amount and further subject to the terms of
Paragraph 4 below) using Building Standard methods, materials and finishes. 
Landlord and Tenant agree that Landlord’s obligation to pay for the cost of
Landlord Work (inclusive of the cost of preparing Plans, obtaining permits, and
other related costs) shall be limited to $337,747.50 (the “Maximum Amount”) and
that Tenant shall be responsible for the cost of Landlord Work, plus any
applicable state sales or use tax, if any, to the extent that it exceeds the
Maximum Amount.  Landlord shall enter into a direct contract with Venture
Builders as the general contractor for the Landlord Work. In addition, Landlord
shall have the right to select and/or approve of any subcontractors used in
connection with the Landlord Work; provided that the mechanical subcontractor
shall be with either Cal Air or Critchfield Mechanical, based on the lower
comparable bid of the two, the electrical subcontract shall be with either
Redwood City Electric or Ellco Electric, based on the lower comparable bid of
the two, and all other subcontracts shall be awarded on a competitive bid basis
with bids from at least two (2) subcontractors.  Landlord’s supervision or
performance of any work for or on behalf of Tenant shall not be deemed a
representation by Landlord that such Plans or the revisions thereto comply with
applicable insurance requirements, building codes, ordinances, laws or
regulations (except to the extent specifically set forth in Section 5 of the
Lease), or that the improvements constructed in accordance with the Plans and
any revisions thereto will be adequate for Tenant’s use, it being agreed that
Tenant shall be responsible for all elements of the design of Tenant’s plans
(including, without limitation, functionality of design, the structural
integrity of the design, the configuration of the premises and the placement of
Tenant’s furniture, appliances and equipment).

 

2.             If Landlord’s estimate and/or the actual cost of the Landlord
Work shall exceed the Maximum Amount, Landlord, prior to commencing any
construction of Landlord Work, shall submit to Tenant a written estimate setting
forth the anticipated cost of the Landlord Work, including but not limited to
labor and materials, contractor’s fees and permit fees.  Within 3 Business Days
thereafter, Tenant shall either notify Landlord in writing of its approval of
the cost estimate, or specify its objections thereto and any desired changes to
the proposed Landlord Work.  If Tenant notifies Landlord of such objections and
desired changes, Tenant shall work with Landlord to reach a mutually acceptable
alternative cost estimate.

 

3.             If after the course of the procedure set forth in Section 2
above, Landlord’s estimate and/or the actual cost of construction shall exceed
the Maximum Amount (such amounts exceeding the Maximum Amount being herein
referred to as the “Excess Costs”), Tenant shall pay to Landlord fifty percent
(50%) of such Excess Costs, plus any applicable state sales or use tax thereon,
within 1 Business Day of demand (and Tenant shall be charged with one day of
Tenant Delay for each day thereafter that Tenant fails to pay such amount to
Landlord), and shall pay the remaining fifty percent (50%) of Excess Costs
within 15 days following the Commencement Date. The statements of costs
submitted to Landlord by Venture Builders shall be conclusive for purposes of
determining the actual cost of the items described therein.  The amounts payable
by Tenant hereunder constitute Rent payable pursuant to the Lease, and the
failure to timely pay same constitutes an event of default under the Lease.

 

4.             If Tenant shall request any revisions to the Plans, Landlord
shall have such revisions prepared at Tenant’s sole cost and expense and Tenant
shall reimburse Landlord for the cost of preparing any such revisions to the
Plans, plus any applicable state sales or use tax thereon, upon demand, unless
the cost of such revisions, when added to the cost of the Landlord Work, does
not exceed the Maximum Amount.  Promptly upon completion of the revisions,
Landlord shall notify Tenant in writing of the increased cost in the Landlord
Work, if any, resulting from such revisions to the Plans.  Tenant, within three
(3) Business Days, shall notify Landlord in writing whether it desires to
proceed with such revisions.  In the absence of such written authorization,
Landlord shall have the option to continue work on the Premises disregarding the
requested revision.  Tenant shall be responsible for

 

1

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any Tenant Delay in completion of the Premises resulting from any revision to
the Plans.  If such revisions result in an increase in the cost of Landlord Work
above the Maximum Amount, such cost in excess of the Maximum Amount, plus any
applicable state sales or use tax thereon, shall be payable by Tenant within one
(1) Business Day of demand (and Tenant shall be charged with one day of Tenant
Delay for each day thereafter that Tenant fails to pay such amount to Landlord),
or, at Landlord’s option, in the absence of such timely payment, Landlord may
continue work on the Premises disregarding the requested revision.
Notwithstanding anything herein to the contrary, all revisions to the Plans
shall be subject to the approval of Landlord, which shall not be unreasonably
withheld, conditioned or delayed.

 

5.             Any portion of the Maximum Amount which exceeds the cost of the
Landlord Work or is otherwise remaining after June 1, 2004, shall accrue to the
sole benefit of Landlord, it being agreed that Tenant shall not be entitled to
any credit, offset, abatement or payment with respect thereto.

 

6.             This Work Letter shall not be deemed applicable to any additional
space added to the Premises at any time or from time to time, whether by any
options under the Lease or otherwise, or to any portion of the original Premises
or any additions to the Premises in the event of a renewal or extension of the
original Term of the Lease, whether by any options under the Lease or otherwise,
unless expressly so provided in the Lease or any amendment or supplement to the
Lease.

 

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EXHIBIT D

 

COMMENCEMENT LETTER

(EXAMPLE)

 

 

Date

 

 

 

 

 

Tenant

Liberate Technologies

 

Address

 

 

 

 

 

 

 

 

 

Re:          Commencement Letter with respect to that certain Lease dated as of
the               day of                 ,           , by and between
EOP-PENINSULA OFFICE PARK, L.L.C., a Delaware limited liability company, as
Landlord, and LIBERATE TECHNOLOGIES, a Delaware corporation, as Tenant, for
15,011 rentable square feet on the 2nd floor of the Building located at 2655
Campus Drive, San Mateo, California.

 

Dear                               :

 

In accordance with the terms and conditions of the above referenced Lease,
Tenant accepts possession of the Premises and agrees:

 

1.             The Commencement Date of the Lease
is                                              ;

 

2.             The Termination Date of the Lease
is                                                    .

 

Please acknowledge your acceptance of possession and agreement to the terms set
forth above by signing all 3 counterparts of this Commencement Letter in the
space provided and returning 2 fully executed counterparts to my attention.

 

Sincerely,

 

 

Authorized Signatory

 

Agreed and Accepted:

 

 

Tenant:

Liberate Technologies,

 

a Delaware corporation

 

 

By:

 

Name:

 

Title:

 

Date:

 

 

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EXHIBIT E

 

BUILDING RULES AND REGULATIONS

 

The following rules and regulations shall apply, where applicable, to the
Premises, the Building, the parking facilities (if any), the Property and the
appurtenances.  In the event of a conflict between the following rules and
regulations and the remainder of the terms of the Lease, the remainder of the
terms of the Lease shall control.  Capitalized terms have the same meaning as
defined in the Lease.

 

1.             Sidewalks, doorways, vestibules, halls, stairways and other
similar areas shall not be obstructed by Tenant or used by Tenant for any
purpose other than ingress and egress to and from the Premises.  No rubbish,
litter, trash, or material shall be placed, emptied, or thrown in those areas. 
At no time shall Tenant permit Tenant’s employees to loiter in Common Areas or
elsewhere about the Building or Property.

 

2.             Plumbing fixtures and appliances shall be used only for the
purposes for which designed and no sweepings, rubbish, rags or other unsuitable
material shall be thrown or placed in the fixtures or appliances.  Damage
resulting to fixtures or appliances by Tenant, its agents, employees or invitees
shall be paid for by Tenant and Landlord shall not be responsible for the
damage.

 

3.             No signs, advertisements or notices shall be painted or affixed
to windows, doors or other parts of the Building, except those of such color,
size, style and in such places as are first approved in writing by Landlord. 
All tenant identification and suite numbers at the entrance to the Premises
shall be installed by Landlord, at Tenant’s cost and expense, using the standard
graphics for the Building. Except in connection with the hanging of lightweight
pictures and wall decorations, no nails, hooks or screws shall be inserted into
any part of the Premises or Building except by the Building maintenance
personnel without Landlord’s prior approval, which approval shall not be
unreasonably withheld.

 

4.             Landlord may provide and maintain in the first floor (main lobby)
of the Building an alphabetical directory board or other directory device
listing tenants and no other directory shall be permitted unless previously
consented to by Landlord in writing.

 

5.             Tenant shall not place any lock(s) on any door in the Premises or
Building without Landlord’s prior written consent, which consent shall not be
unreasonably withheld, and Landlord shall have the right at all times to retain
and use keys or other access codes or devices to all locks within and into the
Premises.  A reasonable number of keys to the locks on the entry doors in the
Premises shall be furnished by Landlord to Tenant at Tenant’s cost and Tenant
shall not make any duplicate keys.  All keys shall be returned to Landlord at
the expiration or early termination of the Lease.

 

6.             All contractors, contractor’s representatives and installation
technicians performing work in the Building shall be subject to Landlord’s prior
approval, which approval shall not be unreasonably withheld, and shall be
required to comply with Landlord’s standard rules, regulations, policies and
procedures, which may be revised from time to time.

 

7.             Movement in or out of the Building of furniture or office
equipment, or dispatch or receipt by Tenant of merchandise or materials
requiring the use of elevators, stairways, lobby areas or loading dock areas,
shall be restricted to hours reasonably designated by Landlord.  Tenant shall
obtain Landlord’s prior approval by providing a detailed listing of the
activity, which approval shall not be unreasonably withheld.  If approved by
Landlord, the activity shall be under the supervision of Landlord and performed
in the manner required by Landlord.  Tenant shall assume all risk for damage to
articles moved and injury to any persons resulting from the activity.  If
equipment, property, or personnel of Landlord or of any other party is damaged
or injured as a result of or in connection with the activity, Tenant shall be
solely liable for any resulting damage, loss or injury.

 

8.             Landlord shall have the right to approve the weight, size, or
location of heavy equipment or articles in and about the Premises, which
approval shall not be unreasonably withheld.  Damage to the Building by the
installation, maintenance, operation, existence or removal of Tenant’s Property
shall be repaired at Tenant’s sole expense.

 

9.             Corridor doors, when not in use, shall be kept closed.

 

10.           Tenant shall not:  (1) make or permit any improper, objectionable
or unpleasant noises or odors in the Building, or otherwise interfere in any way
with other tenants or persons having business with them; (2) solicit business or
distribute or cause to be distributed, in any portion of the

 

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Building, handbills, promotional materials or other advertising; or (3) conduct
or permit other activities in the Building that might, in Landlord’s sole
opinion, constitute a nuisance.

 

11.           No animals, except those assisting handicapped persons, shall be
brought into the Building or kept in or about the Premises.

 

12.           No inflammable, explosive or dangerous fluids or substances shall
be used or kept by Tenant in the Premises, Building or about the Property,
except for those substances as are typically found in similar premises used for
general office purposes and are being used by Tenant in a safe manner and in
accordance with all applicable Laws.  Tenant shall not, without Landlord’s prior
written consent, use, store, install, spill, remove, release or dispose of,
within or about the Premises or any other portion of the Property, any
asbestos-containing materials or any solid, liquid or gaseous material now or
subsequently considered toxic or hazardous under the provisions of 42 U.S.C.
Section 9601 et seq. or any other applicable environmental Law which may now or
later be in effect.  Tenant shall comply with all Laws pertaining to and
governing the use of these materials by Tenant and shall remain solely liable
for the costs of abatement and removal.

 

13.           Tenant shall not use or occupy the Premises in any manner or for
any purpose which might injure the reputation or impair the present or future
value of the Premises or the Building. Tenant shall not use, or permit any part
of the Premises to be used for lodging, sleeping or for any illegal purpose.

 

14.           Tenant shall not take any action which would violate Landlord’s
labor contracts or which would cause a work stoppage, picketing, labor
disruption or dispute or interfere with Landlord’s or any other tenant’s or
occupant’s business or with the rights and privileges of any person lawfully in
the Building (“Labor Disruption”).  Tenant shall take the actions necessary to
resolve the Labor Disruption, and shall have pickets removed and, at the request
of Landlord, immediately terminate any work in the Premises that gave rise to
the Labor Disruption, until Landlord gives its written consent for the work to
resume.  Tenant shall have no claim for damages against Landlord or any of the
Landlord Related Parties nor shall the Commencement Date of the Term be extended
as a result of the above actions.

 

15.           Tenant shall not install, operate or maintain in the Premises or
in any other area of the Building, electrical equipment that would overload the
electrical system beyond its capacity for proper, efficient and safe operation
as determined solely by Landlord.  Tenant shall not furnish cooling or heating
to the Premises, including, without limitation, the use of electric or gas
heating devices, without Landlord’s prior written consent.  Tenant shall not use
more than its proportionate share of telephone lines and other telecommunication
facilities available to service the Building.

 

16.           Tenant shall not operate or permit to be operated a coin or token
operated vending machine or similar device (including, without limitation,
telephones, lockers, toilets, scales, amusement devices and machines for sale of
beverages, foods, candy, cigarettes and other goods), except for machines for
the exclusive use of Tenant’s employees and invitees.

 

17.           Bicycles and other vehicles are not permitted inside the Building
or on the walkways outside the Building, except in areas designated by Landlord.

 

18.           Landlord may from time to time adopt systems and procedures for
the security and safety of the Building and the Property, its occupants, entry,
use and contents.  Tenant, its agents, employees, contractors, guests and
invitees shall comply with Landlord’s systems and procedures.

 

19.           Landlord shall have the right to prohibit the use of the name of
the Building or any other publicity by Tenant that in Landlord’s sole opinion
may impair the reputation of the Building or its desirability.  Upon written
notice from Landlord, Tenant shall refrain from and discontinue such publicity
immediately.

 

20.           Neither Tenant nor its agents, employees, contractors, guests or
invitees shall smoke or permit smoking in the Common Areas, unless a portion of
the Common Areas have been declared a designated smoking area by Landlord, nor
shall the above parties allow smoke from the Premises to emanate into the Common
Areas or any other part of the Building.  Landlord shall have the right to
designate the Building (including the Premises) as a non-smoking building.

 

21.           Landlord shall have the right to designate and approve standard
window coverings for the Premises and to establish rules to assure that the
Building presents a uniform exterior appearance.  Tenant shall ensure, to the
extent reasonably practicable, that window coverings are closed on windows in
the Premises while they are exposed to the direct rays of the sun.

 

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22.           Deliveries to and from the Premises shall be made only at the
times in the areas and through the entrances and exits reasonably designated by
Landlord.  Tenant shall not make deliveries to or from the Premises in a manner
that might interfere with the use by any other tenant of its premises or of the
Common Areas, any pedestrian use, or any use which is inconsistent with good
business practice.

 

23.           The work of cleaning personnel shall not be hindered by Tenant
after 5:30 p.m., and cleaning work may be done at any time when the offices are
vacant. Windows, doors and fixtures may be cleaned at any time.  Tenant shall
provide adequate waste and rubbish receptacles to prevent unreasonable hardship
to the cleaning service.

 

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EXHIBIT F

 

ADDITIONAL PROVISIONS

 

This Exhibit is attached to and made a part of the Lease by and between
EOP-PENINSULA OFFICE PARK, L.L.C., a Delaware limited liability company
(“Landlord”) and LIBERATE TECHNOLOGIES, a Delaware corporation (“Tenant”) for
space in the Building located at 2655 Campus Drive, San Mateo, California.

 

1.             Asbestos Notification.  Tenant acknowledges that Tenant has
received the asbestos notification letter attached to this Lease as Exhibit H
hereto, disclosing the existence of asbestos in the Building.  As part of
Tenant’s obligations under this Lease, Tenant agrees to comply with the
California “Connelly Act” and other applicable Laws, including providing copies
of Landlord’s asbestos notification letter to all of Tenant’s “employees” and
“owners”, as those terms are defined in the Connelly Act and other applicable
Laws.

 

2.             Letter Of Credit.

 

2.01         General Provisions.  Concurrently with Tenant’s execution of this
Lease, Tenant shall deliver to Landlord, as collateral for the full performance
by Tenant of all of its obligations under this Lease and for all losses and
damages Landlord may suffer as a result of any default by Tenant under this
Lease, including, but not limited to, any post lease termination damages under
section 1951.2 of the California Civil Code, a standby, unconditional,
irrevocable, transferable letter of credit (the “Letter of Credit”) in the form
of Exhibit I hereto and containing the terms required herein, in the face amount
of $972,712.80 (the “Letter of Credit Amount”), naming Landlord as beneficiary,
issued (or confirmed) by a financial institution acceptable to Landlord in
Landlord’s sole discretion, permitting multiple and partial draws thereon, and
otherwise in form acceptable to Landlord in its sole discretion.  Tenant shall
cause the Letter of Credit to be continuously maintained in effect (whether
through replacement, renewal or extension) in the Letter of Credit Amount
through the date (the “Final LC Expiration Date”) that is 120 days after the
scheduled expiration date of the Term or any renewal Term.  If the Letter of
Credit held by Landlord expires earlier than the Final LC Expiration Date
(whether by reason of a stated expiration date or a notice of termination or
non-renewal given by the issuing bank), Tenant shall deliver a new Letter of
Credit or certificate of renewal or extension to Landlord not later than 30 days
prior to the expiration date of the Letter of Credit then held by Landlord.  Any
renewal or replacement Letter of Credit shall comply with all of the provisions
of this Section 2, shall be irrevocable, transferable and shall remain in effect
(or be automatically renewable) through the Final LC Expiration Date upon the
same terms as the expiring Letter of Credit or such other terms as may be
acceptable to Landlord in its sole discretion.

 

2.02         Drawings under Letter of Credit.  Landlord shall have the immediate
right to draw upon the Letter of Credit, in whole or in part, at any time and
from time to time:  (i) if a Default occurs; or (ii) if the Letter of Credit
held by Landlord expires earlier than the Final LC Expiration Date (whether by
reason of a stated expiration date or a notice of termination or non-renewal
given by the issuing bank), and Tenant fails to deliver to Landlord, at least 30
days prior to the expiration date of the Letter of Credit then held by Landlord,
a renewal or substitute Letter of Credit that is in effect and that complies
with the provisions of this Section 2.  No condition or term of this Lease shall
be deemed to render the Letter of Credit conditional to justify the issuer of
the Letter of Credit in failing to honor a drawing upon such Letter of Credit in
a timely manner.  Tenant hereby acknowledges and agrees that Landlord is
entering into this Lease in material reliance upon the ability of Landlord to
draw upon the Letter of Credit upon the occurrence of any Default by Tenant
under this Lease or upon the occurrence of any of the other events described
above in this Section 2.02.

 

2.03         Use of Proceeds by Landlord.  The proceeds of the Letter of Credit
shall constitute Landlord’s sole and separate property (and not Tenant’s
property or the property of Tenant’s bankruptcy estate) and Landlord may
immediately upon any draw (and without notice to Tenant) apply or offset the
proceeds of the Letter of Credit: (i)  against any Rent payable by Tenant under
this Lease that is not paid when due; (ii) against all losses and damages that
Landlord has suffered or that Landlord reasonably estimates that it may suffer
as a result of any Default by Tenant under this Lease, including any damages
arising under section 1951.2 of the California Civil Code following termination
of the Lease; (iii) against any costs incurred by Landlord in connection with
the Lease (including attorneys’ fees); and (iv) against any other amount that
Landlord may spend or become obligated to spend by reason of Tenant’s Default. 
Provided Tenant has performed all of its obligations under this Lease, Landlord
agrees to pay to Tenant within 30 days after the Final LC Expiration Date the
amount of any proceeds of the Letter of Credit received by Landlord and not
applied as

 

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allowed above; provided, that if prior to the Final LC Expiration Date a
voluntary petition is filed by Tenant or any Guarantor, or an involuntary
petition is filed against Tenant or any Guarantor by any of Tenant’s or
Guarantor’s creditors, under the Federal Bankruptcy Code, then Landlord shall
not be obligated to make such payment in the amount of the unused Letter of
Credit proceeds until either all preference issues relating to payments under
this Lease have been resolved in such bankruptcy or reorganization case or such
bankruptcy or reorganization case has been dismissed, in each case pursuant to a
final court order not subject to appeal or any stay pending appeal.

 

2.04         Additional Covenants of Tenant.  If, as result of any application
or use by Landlord of all or any part of the Letter of Credit, the amount of the
Letter of Credit shall be less than the Letter of Credit Amount, Tenant shall,
within 5 days thereafter, provide Landlord with additional letter(s) of credit
in an amount equal to the deficiency (or a replacement letter of credit in the
total Letter of Credit Amount), and any such additional (or replacement) letter
of credit shall comply with all of the provisions of this Section 2, and if
Tenant fails to comply with the foregoing, notwithstanding anything to the
contrary contained in this Lease, the same shall constitute an uncurable Default
by Tenant.  Tenant further covenants and warrants that it will neither assign
nor encumber the Letter of Credit or any part thereof and that neither Landlord
nor its successors or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.

 

2.05         Reduction of Letter of Credit.  Subject to the remaining terms of
this Section 2, and provided Tenant has timely paid all Rent due under the Lease
during the 12 month period immediately preceding the effective date of any
reduction of the Letter of Credit, Tenant shall have the right to reduce the
amount of the Letter of Credit so that the reduced Letter of Credit amounts will
be as follows: (i) $639,468.00 effective as of the 13th month of the Term; and
(ii) $315,231.00 effective as of 25th month of the Term.  If Tenant is not
entitled to reduce the Letter of Credit as of a particular reduction effective
date due to Tenant’s failure to timely pay all Rent during the 12 months prior
to that particular reduction effective date, then any subsequent reduction(s)
Tenant is entitled to hereunder shall be reduced by the amount of the reduction
Tenant would have been entitled to had Tenant timely paid all Rent during the 12
months prior to that particular earlier reduction effective date. 
Notwithstanding anything to the contrary contained herein, if Tenant has been in
default under the Lease at any time prior to the effective date of any reduction
of the Letter of Credit and Tenant has failed to cure such default within any
applicable cure period, then Tenant shall have no further right to reduce the
amount of the Letter of Credit as described herein.  Any reduction in the Letter
of Credit shall be accomplished by Tenant providing Landlord with a substitute
letter of credit in the reduced amount.

 

3.             Renewal Option.

 

3.01         Grant of Option; Conditions.  Tenant shall have the right to extend
the Term (the “Renewal Option”) for one additional period of 3 years commencing
on the day following the Termination Date of the initial Term and ending on the
3rd anniversary of the Termination Date (the “Renewal Term”), if:

 

(a)           Landlord receives notice of exercise (“Initial Renewal Notice”)
not less than 9 full calendar months prior to the expiration of the initial Term
and not more than 12 full calendar months prior to the expiration of the initial
Term; and

 

(b)           Tenant is not in default under the Lease beyond any applicable
cure periods at the time that Tenant delivers its Initial Renewal Notice or at
the time Tenant delivers its Binding Notice (as defined below); and

 

(c)           No more than 20% of the Premises is sublet (other than pursuant to
a Permitted Transfer, as defined in Section 11 of the Lease) at the time that
Tenant delivers its Initial Renewal Notice or at the time Tenant delivers its
Binding Notice; and

 

(d)           The Lease has not been assigned (other than pursuant to a
Permitted Transfer, as defined in Section 11 of the Lease) prior to the date
that Tenant delivers its Initial Renewal Notice or prior to the date Tenant
delivers its Binding Notice.

 

3.02         Terms Applicable to Premises During Renewal Term.

 

(a)           The initial Base Rent rate per rentable square foot for the
Premises during the Renewal Term shall equal 95% of the Prevailing Market
(hereinafter defined) rate per rentable square foot for the Premises.  Base Rent
during the Renewal Term shall increase, if at all, in accordance with the
increases assumed in the

 

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determination of Prevailing Market rate.  Base Rent attributable to the Premises
shall be payable in monthly installments in accordance with the terms and
conditions of Section 4 of the Lease.

 

(b)           Tenant shall pay Additional Rent (i.e. Taxes and Expenses) for the
Premises during the Renewal Term in accordance with Article 4 of the Lease, and
the manner and method in which Tenant reimburses Landlord for Tenant’s share of
Taxes and Expenses and the Base Year, if any, applicable to such matter, shall
be some of the factors considered in determining the Prevailing Market rate for
the Renewal Term.

 

3.03         Procedure for Determining Prevailing Market.  Within 30 days after
receipt of Tenant’s Initial Renewal Notice, Landlord shall advise Tenant of the
applicable Base Rent rate for the Premises for the Renewal Term.  Tenant, within
15 days after the date on which Landlord advises Tenant of the applicable Base
Rent rate for the Renewal Term, shall either (i) give Landlord final binding
written notice (“Binding Notice”) of Tenant’s exercise of its Renewal Option, or
(ii) if Tenant disagrees with Landlord’s determination, provide Landlord with
written notice of rejection (the “Rejection Notice”).  If Tenant fails to
provide Landlord with either a Binding Notice or Rejection Notice within such 15
day period, Tenant’s Renewal Option shall be null and void and of no further
force and effect.  If Tenant provides Landlord with a Binding Notice, Landlord
and Tenant shall enter into the Renewal Amendment (as defined below) upon the
terms and conditions set forth herein.  If Tenant provides Landlord with a
Rejection Notice, Landlord and Tenant shall work together in good faith to agree
upon the Prevailing Market rate for the Premises during the Renewal Term.  Upon
agreement, Tenant shall provide Landlord with Binding Notice and Landlord and
Tenant shall enter into the Renewal Amendment in accordance with the terms and
conditions hereof.  Notwithstanding the foregoing, if Landlord and Tenant are
unable to agree upon the Prevailing Market rate for the Premises within 30 days
after the date on which Tenant provides Landlord with a Rejection Notice,
Tenant’s Renewal Option shall be null and void and of no force and effect.

 

3.04         Renewal Amendment.  If Tenant is entitled to and properly exercises
its Renewal Option, Landlord shall prepare an amendment (the “Renewal
Amendment”) to reflect changes in the Base Rent, Term, Termination Date and
other appropriate terms.  The Renewal Amendment shall be sent to Tenant within a
reasonable time after receipt of the Binding Notice and Tenant shall execute and
return the Renewal Amendment to Landlord within 15 days after Tenant’s receipt
of same, but, upon final determination of the Prevailing Market rate applicable
during the Renewal Term as described herein, an otherwise valid exercise of the
Renewal Option shall be fully effective whether or not the Renewal Amendment is
executed.

 

3.05         Definition of Prevailing Market.  For purposes of this Renewal
Option, “Prevailing Market” shall mean the arms length fair market annual rental
rate per rentable square foot under renewal leases and amendments entered into
on or about the date on which the Prevailing Market is being determined
hereunder for space comparable to the Premises in the Building and office
buildings comparable to the Building in the San Mateo, California area.  The
determination of Prevailing Market shall take into account any material economic
differences between the terms of this Lease and any comparison lease or
amendment, such as rent abatements, construction costs and other concessions and
the manner, if any, in which the landlord under any such lease is reimbursed for
operating expenses and taxes.  The determination of Prevailing Market shall also
take into consideration any reasonably anticipated changes in the Prevailing
Market rate from the time such Prevailing Market rate is being determined and
the time such Prevailing Market rate will become effective under this Lease.

 

3.06         Subordination.  Notwithstanding anything herein to the contrary,
Tenant’s Renewal Option is subject and subordinate to the expansion rights
(whether such rights are designated as a right of first offer, right of first
refusal, expansion option or otherwise) of any tenant of the Building existing
on the date hereof.

 

4.             Acceleration Option.

 

4.01         Tenant shall have the right to accelerate the Termination Date
(“Acceleration Option”) of the Lease, with respect to the entire Premises only,
from the last day of the Term to the date which is the last day of the 36th
month of the Term (the “Accelerated Termination Date”), if:

 

3

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(a)           Tenant is not in default under the Lease at the date Tenant
provides Landlord with an Acceleration Notice (hereinafter defined); and

 

(b)           no part of the Premises is sublet for a term extending past the
Accelerated Termination Date; and

 

(c)           the Lease has not been assigned; and

 

(d)           Landlord receives notice of acceleration (“Acceleration Notice”)
not less than 6 full calendar months prior to the Accelerated Termination Date.

 

4.02         If Tenant exercises its Acceleration Option, Tenant shall pay to
Landlord the sum of $326,939.40 (the “Acceleration Fee”), as a fee in connection
with the acceleration of the Termination Date and not as a penalty. Tenant shall
pay the Acceleration Fee to Landlord simultaneously with Tenant’s delivery of
the Acceleration Notice.

 

4.03         If Tenant, subsequent to providing Landlord with an Acceleration
Notice, defaults in any of the provisions of this Lease (including, without
limitation, a failure to pay any installment of the Acceleration Fee due
hereunder), Landlord, at its option, may (i) declare Tenant’s exercise of the
Acceleration Option to be null and void, and any Acceleration Fee paid to
Landlord shall be returned to Tenant, after first applying such Acceleration Fee
against any past due Rent under the Lease, or (ii) continue to honor Tenant’s
exercise of its Acceleration Option, in which case, Tenant shall remain liable
for the payment of the Acceleration Fee and for all Base Rent, Additional Rent
and other sums due under the Lease up to and including the Accelerated
Termination Date even though billings for such may occur subsequent to the
Accelerated Termination Date.

 

4.04         As of the date Tenant provides Landlord with an Acceleration
Notice, any unexercised rights or options of Tenant to renew the Term of the
Lease or to expand the Premises (whether expansion options, rights of first or
second refusal, rights of first or second offer, or other similar rights), and
any outstanding tenant improvement allowance not claimed and properly utilized
by Tenant in accordance with the Lease as of such date, shall immediately be
deemed terminated and no longer available or of any further force or effect.

 

5.             Roof Space for Dish/Antenna.

 

5.01         Subject to all applicable Laws and to this Section 5 of Exhibit F,
Tenant shall have the right, at no additional charge, to lease space on the roof
of the Building, or alternatively, at Landlord’s option, on the existing pad
located in the area shown on Schedule F-1 hereto (“Pad”), for the purpose of
installing (in accordance with Section 9.03 of the Lease), operating and
maintaining two 3 meter parabolic dish/antennas or other communication device
approved by the Landlord (the “Dish/Antennas”).  If the roof space is used, the
exact location of the space on the roof to be leased by Tenant shall be
requested by Tenant and shall subject to Landlord’s reasonable approval, and
shall not exceed               square feet (the “Roof Space”).  Landlord
reserves the right to relocate the Roof Space or the Pad as reasonably necessary
during the Term, provided that Tenant’s rights hereunder are not materially
affected. Tenant’s right to install the Dish/Antennas shall be subject to the
reasonable approval rights of Landlord and Landlord’s architect and/or engineer
with respect to the plans and specifications of the Dish/Antennas, the manner in
which each Dish/Antenna is attached to the Building and the manner in which any
cables are run to and from each the Dish/Antenna.  The precise specifications
and a general description of the Dish/Antennas along with all documents Landlord
reasonably requires to review the installation of the Dish/Antennas (the “Plans
and Specifications”) shall be submitted to Landlord for Landlord’s written
approval no later than 20 days before Tenant commences to install the
Dish/Antennas. Tenant shall be solely responsible for obtaining all necessary
governmental and regulatory approvals and for the cost of installing, operating,
maintaining and removing the Dish/Antennas. Tenant shall notify Landlord upon
completion of the installation of the Dish/Antennas. If Landlord determines that
the Dish/Antennas equipment does not comply with the approved Plans and
Specifications, that the Building has been damaged during installation of the
Dish/Antennas or that the installation was defective, Landlord shall notify
Tenant of any noncompliance or detected problems and Tenant immediately shall
cure the defects. If the Tenant fails to immediately cure the defects, Tenant
shall pay to Landlord upon demand the cost, as reasonably determined by
Landlord, of correcting any defects and repairing any damage to the Building
caused by such installation.  If at any time Landlord, in its sole discretion,
deems it necessary, Tenant shall provide and install, at Tenant’s sole cost and
expense, appropriate aesthetic screening, reasonably satisfactory to Landlord,
for the Dish/Antennas (the “Aesthetic Screening”).

 

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5.02         Landlord agrees that Tenant, upon reasonable prior written notice
to Landlord, shall have access to the roof of the Building and the Roof Space,
or, if applicable, to the Pad, for the purpose of installing, maintaining,
repairing and removing the Dish/Antennas, the appurtenances and the Aesthetic
Screening, if any, all of which shall be performed by Tenant or Tenant’s
authorized representative or contractors, which shall be approved by Landlord,
at Tenant’s sole cost and risk.  It is agreed, however, that only authorized
engineers, employees or properly authorized contractors of Tenant, FCC (defined
below) inspectors, or persons under their direct supervision will be permitted
to have access to the roof of the Building and the Roof Space or to the Pad. 
Tenant further agrees to exercise firm control over the people requiring access
to the roof of the Building and the Roof Space or the Pad in order to keep to a
minimum the number of people having access to the roof of the Building and the
Roof Space and the frequency of their visits.

 

5.03         It is further understood and agreed that the installation,
maintenance, operation and removal of the Dish/Antennas, the appurtenances and
the Aesthetic Screening, if any, is not permitted to damage the Building or the
roof thereof, or interfere with the use of the Building and, if applicable, the
roof by Landlord.  Tenant agrees to be responsible for any damage caused to the
Pad or to the roof or any other part of the Building, which may be caused by
Tenant or any of its agents or representatives.

 

5.04         Tenant agrees to install only equipment of types and frequencies
which will not cause unreasonable interference to Landlord or existing tenants
of the Building.  In the event Tenant’s equipment causes such interference,
Tenant will change the frequency on which it transmits and/or receives and take
any other steps necessary to eliminate the interference.  If said interference
cannot be eliminated within a reasonable period of time, in the judgment of
Landlord, then Tenant agrees to remove the Dish/Antennas from the Roof Space or
the Pad, as applicable.

 

5.05         Tenant shall, at its sole cost and expense, and at its sole risk,
install, operate and maintain the Dish/Antennas in a good and workmanlike
manner, and in compliance with all Building, electric, communication, and safety
codes, ordinances, standards, regulations and requirements, now in effect or
hereafter promulgated, of the Federal Government, including, without limitation,
the Federal Communications Commission (the “FCC”), the Federal Aviation
Administration (“FAA”) or any successor agency of either the FCC or FAA having
jurisdiction over radio or telecommunications, and of the state, city and county
in which the Building is located.  Under this Lease, the Landlord and its agents
assume no responsibility for the licensing, operation and/or maintenance of
Tenant’s equipment.  Tenant has the responsibility of carrying out the terms of
its FCC license in all respects.  The Dish/Antennas shall be connected to
Landlord’s power supply in strict compliance with all applicable Building,
electrical, fire and safety codes.  Neither Landlord nor its agents shall be
liable to Tenant for any stoppages or shortages of electrical power furnished to
the Dish/Antennas or the Roof Space or the Pad because of any act, omission or
requirement of the public utility serving the Building, or the act or omission
of any other tenant, invitee or licensee or their respective agents, employees
or contractors, or for any other cause beyond the reasonable control of
Landlord, and Tenant shall not be entitled to any rental abatement for any such
stoppage or shortage of electrical power.  Neither Landlord nor its agents shall
have any responsibility or liability for the conduct or safety of any of
Tenant’s representatives, repair, maintenance and engineering personnel while in
or on any part of the Building or the Roof Space or Pad.

 

5.06         The Dish/Antennas, the appurtenances and the Aesthetic Screening,
if any, shall remain the personal property of Tenant, and shall be removed by
Tenant at its own expense at the expiration or earlier termination of this Lease
or Tenant’s right to possession hereunder.  Tenant shall repair any damage
caused by such removal, including the patching of any holes to match, as closely
as possible, the color surrounding the area where the equipment and
appurtenances were attached.  Tenant agrees to maintain all of the Tenant’s
equipment placed on or about the roof or in any other part of the Building in
proper operating condition and maintain same in satisfactory condition as to
appearance and safety in Landlord’s sole discretion.  Such maintenance and
operation shall be performed in a manner to avoid any interference with any
other tenants or Landlord.  Tenant agrees that at all times during the Term, it
will keep the roof of the Building and the Roof Space or Pad, as applicable,
free of all trash or waste materials produced by Tenant or Tenant’s agents,
employees or contractors.

 

5.07         In light of the specialized nature of the Dish/Antennas, Tenant
shall be permitted to utilize the services of its choice for installation,
operation, removal and repair of the Dish/Antennas, the appurtenances and the
Aesthetic Screening, if any, subject to the

 

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reasonable approval of Landlord.  Notwithstanding the foregoing, Tenant must
provide Landlord with prior written notice of any such installation, removal or
repair and coordinate such work with Landlord in order to avoid voiding or
otherwise adversely affecting any warranties granted to Landlord with respect to
the roof.  If necessary, Tenant, at its sole cost and expense, shall retain any
contractor having a then existing warranty in effect on the roof to perform such
work (to the extent that it involves the roof), or, at Tenant’s option, to
perform such work in conjunction with Tenant’s contractor.  In the event the
Landlord contemplates roof repairs that could affect Tenant’s Dish/Antennas, or
which may result in an interruption of the Tenant’s telecommunication service,
Landlord shall formally notify Tenant at least 30 days in advance (except in
cases of an emergency) prior to the commencement of such contemplated work in
order to allow Tenant to make other arrangements for such service.

 

5.08         Tenant shall not allow any provider of telecommunication, video,
data or related services (“Communication Services”) to locate any equipment on
the roof of the Building or in the Roof Space for any purpose whatsoever, nor
may Tenant use the Roof Space and/or the Pad and/or the Dish/Antennas to provide
Communication Services to an unaffiliated tenant, occupant or licensee of
another building, or to facilitate the provision of Communication Services on
behalf of another Communication Services provider to an unaffiliated tenant,
occupant or licensee of the Building or any other building.

 

5.09         Tenant acknowledges that Landlord may at some time establish a
standard license agreement (the “License Agreement”) with respect to the use of
roof space or pads by tenants of the Building.  Tenant, upon request of
Landlord, shall enter into such License Agreement with Landlord provided that
such agreement does not materially alter the rights of Tenant hereunder with
respect to the Roof Space or Pad, as applicable.

 

5.10         Tenant specifically acknowledges and agrees that the terms and
conditions of Section 13 of the Lease (Indemnity and Waiver of Claims) shall
apply with full force and effect to the Roof Space, the Pad and any other
portions of the roof accessed or utilized by Tenant, its representatives,
agents, employees or contractors.

 

5.11         If Tenant defaults under any of the terms and conditions of this
Section of the Lease, and Tenant fails to cure said default within the time
allowed by Section 18 of the Lease, Landlord shall be permitted to exercise all
remedies provided under the terms of the Lease, including removing the
Dish/Antennas, the appurtenances and the Aesthetic Screening, if any, and
restoring the Building and the Roof Space or Pad to the condition that existed
prior to the installation of the Dish/Antennas, the appurtenances and the
Aesthetic Screening, if any.  If Landlord removes the Dish/Antennas, the
appurtenances and the Aesthetic Screening, if any, as a result of an uncured
default, Tenant shall be liable for all costs and expenses Landlord incurs in
removing the Dish/Antennas, the appurtenances and the Aesthetic Screening, if
any, and repairing any damage to the Building, the roof of the Building and the
Roof Space or Pad caused by the installation, operation or maintenance of the
Dish/Antennas, the appurtenances, and the Aesthetic Screening, if any.

 

6

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Schedule F-1

 

Location of Pad

 

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EXHIBIT G

 

PARKING AGREEMENT

 

This Exhibit (the “Parking Agreement”) is attached to and made a part of the
Lease by and between EOP-PENINSULA OFFICE PARK, L.L.C., a Delaware limited
liability company (“Landlord”) and LIBERATE TECHNOLOGIES, a Delaware corporation
(“Tenant”) for space in the Building located at 2655 Campus Drive, San Mateo,
California.

 

1.             The capitalized terms used in this Parking Agreement shall have
the same definitions as set forth in the Lease to the extent that such
capitalized terms are defined therein and not redefined in this Parking
Agreement.  In the event of any conflict between the Lease and this Parking
Agreement, the latter shall control.

 

2.             During the initial Term, Tenant agrees to lease from Landlord and
Landlord agrees to lease to Tenant for no additional charge a total of 50
non-reserved parking spaces in the parking facility servicing the Building
(“Parking Facility”). Tenant may, from time to time request additional parking
spaces, and if Landlord shall provide the same, such parking spaces shall be
provided and used on a month-to-month basis, and otherwise on the foregoing
terms and provisions, and at such prevailing monthly parking charges as shall be
established from time to time.

 

3.             Tenant shall at all times comply with all applicable ordinances,
rules, regulations, codes, laws, statutes and requirements of all federal,
state, county and municipal governmental bodies or their subdivisions respecting
the use of the Parking Facility.  Landlord reserves the right to adopt, modify
and enforce reasonable rules (“Rules”) governing the use of the Parking Facility
from time to time including any key-card, sticker or other identification or
entrance system and hours of operation.  The Rules set forth herein are
currently in effect.  Landlord may refuse to permit any person who violates such
Rules to park in the Parking Facility, and any violation of the Rules shall
subject the car to removal from the Parking Facility.

 

4.             Unless specified to the contrary above, the parking spaces
hereunder shall be provided on a non-designated “first-come, first-served”
basis.  Tenant acknowledges that Landlord has no liability for claims arising
through acts or omissions of any independent operator of the Parking Facility. 
Landlord shall have no liability whatsoever for any damage to items located in
the Parking Facility, nor for any personal injuries or death arising out of any
matter relating to the Parking Facility, and in all events, Tenant agrees to
look first to its insurance carrier and to require that Tenant’s employees look
first to their respective insurance carriers for payment of any losses sustained
in connection with any use of the Parking Facility.  Tenant hereby waives on
behalf of its insurance carriers all rights of subrogation against Landlord or
Landlord’s agents.  Landlord reserves the right to assign specific parking
spaces, and to reserve parking spaces for visitors, small cars, handicapped
persons and for other tenants, guests of tenants or other parties, which
assignment and reservation or spaces may be relocated as determined by Landlord
from time to time, and Tenant and persons designated by Tenant hereunder shall
not park in any location designated for such assigned or reserved parking
spaces.  Tenant acknowledges that the Parking Facility may be closed entirely or
in part in order to make repairs or perform maintenance services, or to alter,
modify, re-stripe or renovate the Parking Facility, or if required by casualty,
strike, condemnation, act of God, governmental law or requirement or other
reason beyond the operator’s reasonable control.  In such event, Landlord shall
refund any prepaid parking fee hereunder, prorated on a per diem basis.  If such
closure materially affects Tenant’s parking rights hereunder in excess of 2
Business Days, Landlord shall use commercially reasonable efforts to provide
alternate parking during the period of such closure.

 

5.             If Tenant shall default under this Parking Agreement, the
operator shall have the right to remove from the Parking Facility any vehicles
hereunder which shall have been involved or shall have been owned or driven by
parties involved in causing such default, without liability therefor
whatsoever.  In addition, if Tenant shall default under this Parking Agreement,
Landlord shall have the right to cancel this Parking Agreement on 10 days’
written notice, unless within such 10 day period, Tenant cures such default.  If
Tenant defaults with respect to the same term or condition under this Parking
Agreement more than 3 times during any 12 month period, and Landlord notifies
Tenant thereof promptly after each such default, the next default of such term
or condition during the succeeding 12 month period, shall, at Landlord’s
election, constitute an incurable default.  Such cancellation right shall be
cumulative and in addition to any other rights or remedies available to Landlord
at law or equity, or provided under the Lease (all of which rights and remedies
under the Lease are hereby incorporated herein, as though fully set forth).  Any
default by Tenant under the Lease shall be a default under this Parking
Agreement, and any default under this Parking Agreement shall be a default under
the Lease.

 

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RULES

 

(i)            Landlord reserves the right to establish and change Parking
Facility hours from time to time, although, as of the date of this Lease, Tenant
shall have access to the Parking Facility on a 24-hour basis, 7 days a week,
subject to the other terms of this Parking Agreement. Tenant shall not store or
permit its employees to store any automobiles in the Parking Facility without
the prior written consent of the operator.  Except for emergency repairs, Tenant
and its employees shall not perform any work on any automobiles while located in
the Parking Facility, or on the Property.  If it is necessary for Tenant or its
employees to leave an automobile in the Parking Facility overnight, Tenant shall
provide the operator with prior notice thereof designating the license plate
number and model of such automobile.

 

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

 

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

 

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

 

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

 

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

 

(a)           Areas not striped for parking

(b)           aisles

(c)           where “no parking” signs are posted

(d)           ramps

(e)           loading zones

 

(vii)         Parking stickers, key cards or any other devices or forms of
identification or entry supplied by the operator shall remain the property of
the operator.  Such device must be displayed as requested and may not be
mutilated in any manner.  The serial number of the parking identification device
may not be obliterated.  Parking passes and devices are not transferable and any
pass or device in the possession of an unauthorized holder will be void.

 

(viii)        Monthly fees shall be payable in advance prior to the first day of
each month.  Failure to do so will automatically cancel parking privileges and a
charge at the prevailing daily parking rate will be due.  No deductions or
allowances from the monthly rate will be made for days on which the Parking
Facility is not used by Tenant or its designees.

 

(ix)           Parking Facility managers or attendants are not authorized to
make or allow any exceptions to these Rules.

 

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

 

(xi)           Loss or theft of parking pass, identification, key cards or other
such devices must be reported to Landlord and to the Parking Facility manager
immediately.  Any parking devices reported lost or stolen found on any
authorized car will be confiscated and the illegal holder will be subject to
prosecution.  Lost or stolen passes and devices found by Tenant or its employees
must be reported to the office of the Parking Facility immediately.

 

(xii)          Washing, waxing, cleaning or servicing of any vehicle by the
customer and/or his agents is prohibited.  Parking spaces may be used only for
parking automobiles.

 

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

 

6.             TENANT ACKNOWLEDGES AND AGREES THAT, TO THE FULLEST EXTENT
PERMITTED BY LAW, LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR DAMAGE TO
TENANT OR TENANT’S PROPERTY (INCLUDING, WITHOUT LIMITATIONS, ANY LOSS OR DAMAGE
TO TENANT’S AUTOMOBILE OR THE CONTENTS THEREOF DUE TO THEFT, VANDALISM OR
ACCIDENT) ARISING FROM OR RELATED TO TENANT’S USE OF THE PARKING FACILITY OR
EXERCISE OF ANY RIGHTS UNDER THIS PARKING AGREEMENT, WHETHER OR NOT SUCH LOSS OR
DAMAGE RESULTS FROM LANDLORD’S ACTIVE NEGLIGENCE OR NEGLIGENT OMISSION.  THE
LIMITATION ON LANDLORD’S LIABILITY UNDER THE PRECEDING SENTENCE SHALL NOT APPLY
HOWEVER TO LOSS OR DAMAGE ARISING DIRECTLY FROM LANDLORD’S WILLFUL MISCONDUCT.

 

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7.             Without limiting the provisions of Paragraph 6 above, Tenant
hereby voluntarily releases, discharges, waives and relinquishes any and all
actions or causes of action for personal injury or property damage occurring to
Tenant arising as a result of parking in the Parking Facility, or any activities
incidental thereto, wherever or however the same may occur, and further agrees
that Tenant will not prosecute any claim for personal injury or property damage
against Landlord or any of its officers, agents, servants or employees for any
said causes of action.  It is the intention of Tenant by this instrument, to
exempt and relieve Landlord from liability for personal injury or property
damage caused by negligence.

 

8.             The provisions of Section 20 of the Lease are hereby incorporated
by reference as if fully recited.

 

Tenant acknowledges that Tenant has read the provisions of this Parking
Agreement, has been fully and completely advised of the potential dangers
incidental to parking in the Parking Facility and is fully aware of the legal
consequences of agreeing to this instrument.

 

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EXHIBIT H

 

ASBESTOS NOTIFICATION

 

This Exhibit is attached to and made a part of the Lease by and between
EOP-PENINSULA OFFICE PARK, L.L.C., a Delaware limited liability company
(“Landlord”) and LIBERATE TECHNOLOGIES, a Delaware corporation (“Tenant”) for
space in the Building located at 2655 Campus Drive, San Mateo, California.

 

As you may know, asbestos, because of its insulating and fire-resistant
properties, was historically used in some construction materials.  California’s
Connelly Act, as well as federal OSHA and some other California rules, now
require building owners and landlords to make certain notifications regarding
known asbestos-containing materials (“ACM”) and presumed ACMs (“PACM”).  PACM
consists of certain older construction materials which commonly contained
asbestos.  This Exhibit is designed to provide you with the required ACM and
PACM notifications.

 

ACM

 

Our asbestos survey(s) for the Building did note the presence, location or
quantity of ACM as follows:

 

•              Lobby:  mastic and drywall joint compound behind drywall (except,
removed from behind wood paneling).

 

•              1st Floor:  stairwell, sheet rock wall, 1-5% asbestos.

 

•              Storage room adjacent to hallway: 12” x 12” light brown floor
tile with speckles, trace asbestos.

 

•              Boiler room:  boiler insulation (except removed from boiler
door).

 

•              Roof:  penetration mastic, 10% asbestos; and tar, 5-10% asbestos.

 

PACM

 

PACM consists of thermal system insulation and surfacing material found in
buildings constructed prior to 1981, and asphalt or vinyl flooring installed
prior to 1981.  “Surfacing material” means material that is sprayed-on,
troweled-on or otherwise applied to surfaces (such as acoustical plaster on
ceilings and fireproofing materials on structural members, or other materials on
surfaces for acoustical, fireproofing, and other purposes).  Because this
Building was constructed prior to 1981, PACM may be present.  Please be advised
that if any thermal system insulation, asphalt or vinyl flooring or surfacing
materials, of the type described above, are found to be present in the Building,
such materials must be considered PACM unless properly tested and shown
otherwise.

 

Because of the presence of ACM and the potential presence of PACM in the
Building, we are providing you with the following warning, which is commonly
known as a California Proposition 65 warning:

 

WARNING:  This Building contains asbestos, a chemical known to the State of
California to cause cancer.

 

In addition, you should be aware that there are certain potential health risks
that may result from exposure to asbestos.  Because we are not physicians,
scientists or industrial hygienists, we have no special knowledge of the health
impact of exposure to asbestos.  However, we hired an environmental consulting
firm to prepare an asbestos Operations and Maintenance Plan (“O&M Plan”) to
address asbestos matters at the Building.  The O&M Plan is designed to minimize
the potential for a release of asbestos fibers and outlines a schedule of
actions to be undertaken with respect to asbestos.  The written O&M Plan is
available for your review at our Building Management Office during regular
business hours, and a copy of the O&M Plan will be provided to you upon request.

 

In general, the written O&M Plan describes the risks associated with asbestos
exposure and how to prevent such exposure.  The O&M Plan describes those risks
as follows:  asbestos is not a significant health concern unless asbestos fibers
are released and inhaled.  If inhaled, asbestos fibers can accumulate in the
lungs and, as exposure increases, the risk of disease (such as asbestosis and
cancer) increases.  However, measures to minimize exposure and consequently
minimize the accumulation of fibers, reduces the risk of adverse health effects.

 

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The O&M Plan is designed to safely manage the ACM and PACM in the Building and
to avoid the inadvertent disturbance of such ACM or PACM.  To that end, the O&M
Plan provides for the training of building housekeeping and maintenance
personnel so that they can conduct their work without causing a release of
asbestos fibers.  As part of the O&M Plan, we maintain records of all
asbestos-related activities and the results of any asbestos survey, sampling or
monitoring conducted in the Building.

 

The written O&M Plan describes a number of activities which should be avoided in
order to prevent a release of asbestos fibers in the Building.  In particular,
you should be aware that some of the activities which may present a health risk
by causing an airborne release of asbestos fibers include moving, drilling,
boring or otherwise disturbing ACM or PACM.  Consequently, such activities
should not be attempted by any person not qualified to handle ACM or PACM.  In
other words, you must obtain the approval of Building management prior to
engaging in any such activities.  Please contact the Property Manager for more
information in this regard.  In addition, please contact the Property Manager if
you notice any deterioration or disturbance of ACM or PACM.  Also, note that the
identification of ACM and PACM in this Exhibit is based on actual knowledge and
assumptions that the law requires us to make:  such materials do not necessarily
comprise all asbestos in the Building.

 

Please be aware that you may have certain obligations under California and
federal laws with regard to the ACM and PACM in the Building, including
obligations to notify your own employees, contractors, subtenants, agents and
others of the presence of ACM and PACM.  You are solely responsible for
complying with all such applicable laws.

 

Please contact the Property Manager if you have any questions regarding the
contents of this Exhibit.

 

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EXHIBIT I

 

LETTER OF CREDIT FORM

 

 

[Name of Financial Institution]

 

 

Irrevocable Standby

 

 

Letter of Credit

 

 

No.

 

 

Issuance Date:

 

 

Expiration Date:

 

 

Applicant: Liberate Technologies

 

 

Beneficiary

 

EOP- Peninsula Office Park, L.L.C.

950 Tower Lane, Suite 950

Foster City, California 94404

Attention:  Property Manager - Peninsula Office Park Building 4

 

Ladies/Gentlemen:

 

We hereby establish our Irrevocable Standby Letter of Credit in your favor for
the account of the above referenced Applicant in the amount of Nine Hundred
Seventy-Two Thousand Seven Hundred Twelve U.S. Dollars and Eighty One-Hundredths
($972,712.80) available for payment at sight by your draft drawn on us when
accompanied by the following documents:

 

1.             An original copy of this Irrevocable Standby Letter of Credit.

 

2.             Beneficiary’s dated statement purportedly signed by an authorized
signatory or agent reading:  This draw in the amount of
                                             U.S. Dollars
($                     ) under your Irrevocable Standby Letter of Credit No.
                                                represents funds due and owing
pursuant to the terms of that certain lease by and between EOP-Peninsula Office
Park, L.L.C., a Delaware limited liability company, as landlord, and Liberate
Technologies, a Delaware corporation, as tenant, and/or any amendment to the
lease or any other agreement between such parties related to the lease.”

 

It is a condition of this Irrevocable Standby Letter of Credit that it will be
considered automatically renewed for a one year period upon the expiration date
set forth above and upon each anniversary of such date, unless at least 60 days
prior to such expiration date or applicable anniversary thereof, we notify you
in writing, by certified mail return receipt requested or by recognized
overnight courier service, that we elect not to so renew this Irrevocable
Standby Letter of Credit.  A copy of any such notice shall also be sent, in the
same manner, to:  Equity Office Properties Trust, 2 North Riverside Plaza, Suite
2100, Chicago, Illinois 60606, Attention: Treasury Department.  In addition to
the foregoing, we understand and agree that you shall be entitled to draw upon
this Irrevocable Standby Letter of Credit in accordance with 1 and 2 above in
the event that we elect not to renew this Irrevocable Standby Letter of Credit
and, in addition, you provide us with a dated statement purportedly signed by an
authorized signatory or agent of Beneficiary stating that the Applicant has
failed to provide you with an acceptable substitute irrevocable standby letter
of credit in accordance with the terms of the above referenced lease.  We
further acknowledge and agree that:  (a) upon receipt of the documentation
required herein, we will honor your draws against this Irrevocable Standby
Letter of Credit without inquiry into the accuracy of Beneficiary’s signed
statement and regardless of whether Applicant disputes the content of such
statement; (b) this Irrevocable Standby Letter of Credit shall permit partial
draws and, in the event you elect to draw upon less than the full stated amount
hereof, the stated amount of this Irrevocable Standby Letter of Credit shall be
automatically reduced by the amount of such partial draw; and (c) you shall be
entitled to transfer your interest in this Irrevocable Standby Letter of Credit
from time to time and more than one time without our approval and without
charge.  In the event of a transfer, we reserve the right to require reasonable
evidence of such transfer as a condition to any draw hereunder.

 

This Irrevocable Standby Letter of Credit is subject to the Uniform Customs and
Practice for Documentary Credits (1993 revision) ICC Publication No. 500.

 

We hereby engage with you to honor drafts and documents drawn under and in
compliance with the terms of this Irrevocable Standby Letter of Credit.

 

All communications to us with respect to this Irrevocable Standby Letter of
Credit must be addressed to our office located at
                                                                   to the
attention of                                                            .

 

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Very truly yours,

 

 

 

 

 

 

 

 

 

 

 

[name]

 

 

 

 

 

[title}

 

 

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