Exhibit 10.40

199 FREMONT BUILDING

OFFICE LEASE FORM

 

Premises:    199 Fremont Street, San Francisco, CA, 94105, Floors 5-8 Landlord:
   GLL FREMONT STREET PARTNERS, a California partnership Tenant:    RIVERBED
TECHNOLOGY, INC., a Delaware corporation

 

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TABLE OF CONTENTS

 

         Page 1.   SALIENT LEASE TERMS AND DEFINITIONS    3 2.   LEASE OF
PREMISES    6 3.   USES    8 4.   INTENTIONALLY DELETED    9 5.   RENT    9 6.  
PAYMENT OF TAXES, ASSESSMENTS, AND OPERATING EXPENSES    11 7.   STORAGE SPACE
   21 8.   HAZARDOUS SUBSTANCES    21 9.   NO LIGHT, AIR OR VIEW EASEMENT    23
10.   ALTERATIONS    23 11.   REPAIR OBLIGATIONS    26 12.   LIENS    28 13.  
SIGNS; NAMES OF BUILDING AND FACILITY    28 14.   ASSIGNMENT AND SUBLETTING   
29 15.   INDEMNIFICATION; INSURANCE; ALLOCATION OF RISK    33 16.   SECURITY
SERVICES    38 17.   BUILDING SERVICES    39 18.   FORCE MAJEURE    40 19.  
RULES AND REGULATIONS    41 20.   HOLDING OVER    41 21.   SUBORDINATION    42
22.   ENTRY BY LANDLORD    43 23.   DEFAULTS AND REMEDIES    44 24.   DAMAGE OR
DESTRUCTION    49 25.   EMINENT DOMAIN    52 26.   SALE BY LANDLORD    54 27.  
ESTOPPEL CERTIFICATES    54 28.   REQUIREMENTS OF LANDLORD’S LENDERS    55 29.  
INTENTIONALLY DELETED    56 30.   ATTORNEYS’ FEES    56 31.   NON-WAIVER    56
32.   NOTICES    56 33.   JOINT AND SEVERAL LIABILITY    57 34.   TIME    57 35.
  SUCCESSORS    57 36.   ENTIRE AGREEMENT    57 37.   RESTRICTIONS ON OPTIONS   
57 38.   RECORDING    59 39.   AUTHORIZATION TO SIGN LEASE    59

 

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         Page 40.   BROKER PARTICIPATION    59 41.   SURVIVAL OF CERTAIN RIGHTS
AND OBLIGATIONS    59 42.   PARKING    59 43.   SEVERABILITY    61 44.   CERTAIN
RIGHTS RESERVED BY LANDLORD    61 45.   WAIVER OF JURY TRIAL    61 46.  
INTERPRETATION    62 47.   COOPERATION WITH GOVERNMENT SPONSORED PROGRAMS    62
48.   PARTIES TO ACT REASONABLY AND IN GOOD FAITH    63 49.   OFFER    63 50.  
LANDLORD’S DISCLOSURE REGARDING HAZARDOUS SUBSTANCES    63 51.   SIGNAGE    64
52.   RENEWAL OPTIONS (WITH ARBITRATION)    64 53.   EXPANSION OPTION    67 54.
  DAY CARE CENTER AND EXERCISE ROOM    68 55.   COVENANT OF QUIET ENJOYMENT   
68

 

List of Attachments: Exhibit A-1    Legal Description of the Facility
Exhibit A-2    Floor Plan of the Premises Exhibit B    Work Letter Exhibit C   
Rules and Regulations Exhibit D    Standards for Utilities and Services
Exhibit E    Acknowledgment of Commencement of Term Exhibit F    Arbitration
Procedures Exhibit G    Cleaning Specifications Exhibit H    Construction Rules
Exhibit I    Building Standard Materials Exhibit J    Tenant Estoppel
Certificate

 

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FREMONT PROPERTIES

OFFICE LEASE FORM

THIS LEASE, between the parties named below as Landlord and Tenant, is dated
March 21, 2007, for reference purposes only.

 

1. SALIENT LEASE TERMS AND DEFINITIONS

 

1.1    Rent Payment Address:   

c/o Fremont Properties

50 Fremont Street, Suite 3500

San Francisco, CA 94105

1.2    Parties and Notice Address:   

Landlord:

 

GLL FREMONT STREET PARTNERS, INC.

1981 North Broadway, Suite 330

Walnut Creek, CA 94596

      Attn:   

Asset Manager,

199 Fremont Street Building

     

Tenant:

 

RIVERBED TECHNOLOGY, INC.,

a Delaware corporation

 

Tenant’s Notice Address shall be:

 

199 Fremont Street

San Francisco, CA 94105

1.3    Premises:    1.3.1   

Name and Location of Facility where the Building is located:

 

199 Fremont Street, including its underground parking garage and the adjoining
sidewalks and plaza, (specifically including the third floor, of the “Marine
Electric Building” as defined in Subsection 2.2.1 below, which third floor is
Common Area but specifically excluding the first and second floors of such
building).

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      1.3.2   

Street Address of Building: 199 Fremont Street, San Francisco, CA 94105

 

(a)    Phase I Premises: the leaseable areas located on the eighth (8th) floor
of the Building.

 

(b)    Phase II Premises: the leaseable areas located on the 5th, 6th and 7th
floors of the Building.

 

The Phase I Premises and Phase II Premises are sometimes referred to herein as
the “Premises”.

      1.3.3   

Approximate number of rentable square feet (“RSF”), calculated in accordance
with the BOMA standard method of measurement (ANSI Z65.1-1996), of:

 

(a)    The 8th Floor: 20,809 RSF.

 

(b)    The 5th Floor: 21,266 RSF.

 

(c)    The 6th Floor: 21,266 RSF.

 

(d)    The 7th Floor: 21,266 RSF.

 

(e)    The Premises: 84,607 RSF.

 

(f)     The Building: 394,664 RSF.

1.4    Term:    1.4.1    Phase I Premises: a period of eighty-four (84) months,
commencing on the “Phase I Premises Effective Date” of August 1, 2007.      
1.4.2    Phase II Premises: a period of forty-seven (47) months, commencing on
the “Phase II Premises Effective Date” of September 1, 2010.       1.4.3   
Expiration Date: July 31, 2014.

 

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1.5    Rent:    1.5.1   

Minimum Annual Rent:

 

(a)    Phase I Premises:

 

8/1/07 - 7/30/08: $36.00 per RSF.

8/1/08 - 7/30/09: $37.00 per RSF.

8/1/09 - 7/30/10: $38.00 per RSF.

8/1/10 - 7/30/11: $39.00 per RSF.

8/1/11 - 7/30/12: $40.00 per RSF.

8/1/12 - 7/30/13: $41.00 per RSF.

8/1/13 - 7/30/14: $42.00 per RSF.

 

(b)    Phase II Premises:

 

9/1/10 - 12/31/10: $43.50 per RSF.

1/1/11 - 12/31/12: $45.50 per RSF.

1/1/13 - 7/30/14: $47.50 per RSF.

 

plus Tenant’s “Electrical Component” which shall mean and refer to (i) Tenant’s
use of electricity within the Premises and (ii) Tenant’s Percentage Share of the
cost of all other electricity utilized in the Facility outside of space demised
to third party tenants of the Facility (specifically including the Common Area
variable portion of the electricity which shall be grossed up to 95% occupancy).

      1.5.2    Storage Rent: In addition, Tenant will pay $24.00 per usable
square foot of Storage Space per year in equal monthly installments, pursuant to
Section 7 below, as “Storage Rent”. 1.6    Letter of Credit:    Tenant shall
provide Landlord with an irrevocable letter of credit in the amount of
$2,120,000.00 for the Lease Term, $1,600,000 to be delivered upon execution of
the lease and the balance of $520,000.00 to be delivered no later than
November 30, 2009, as set forth in Subsection 5.5 below. 1.7    Permitted Uses:
   The Premises shall be used for the uses permitted in Subsection 3.1. 1.8   
Tenant’s Percentage Share:    Twenty-One and forty-four one-hundredths percent
(21.44%).       1.8.1    Phase I Premises: 5.27%       1.8.2    Phase II
Premises: 16.17%

 

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1.9    Base Years:    The Base Expense Year for Operating Expenses shall be
calendar year 2007 for the Phase I Premises and 2010 for the Phase II Premises,
and the Base Tax Year shall be calendar year 2007 for the Phase I Premises and
2010 for the Phase II Premises. 1.10   

Landlord’s Broker:

 

Tenant’s Broker:

  

Cornish & Carey Commercial, Inc.

 

NAI BT Commercial

1.11    Tenant’s Parking Privileges:    Tenant shall have the right to rent one
(1) stall per five thousand (5,000) RSF leased within the Building’s parking
facility. Tenant may enter into a direct contract with the Building’s parking
facility operator for additional spaces, if available. 1.12    Contents:    This
Lease consists of: Sections 1 through 55, plus the Exhibits listed on the Table
of Contents page attached to this Lease. 1.13    Options to Extend:    Tenant
shall have the right to extend the Term of this Lease for two (2) additional
periods of five (5) years each upon twelve (12) months’ prior written notice and
pursuant to the provisions of Section 52 of this Lease.

 

2. LEASE OF PREMISES.

2.1 Demising Clause.

2.1.1 Landlord hereby leases to Tenant, and Tenant hires from Landlord,
effective on the respective “Effective Dates” for the Phase I Premises and
Phase II Premises as stated in Subsection 1.4 above, the Premises, together with
the nonexclusive right to the use and enjoyment of the “Base Building Systems”
(i.e., the mechanical, electrical, plumbing, life-safety and sprinkler systems
of the Building) and the “Common Area” for the entire Term. “Common Area” shall
mean and refer to the exercise room, parking facilities, walkways, elevators,
stairwells, multi-tenant floor corridors, multi-tenant floor bathrooms,
multi-tenant floor corridor fountains, multi-tenant floor corridor elevator
lobbies, lobbies, plazas, landscaped areas, driveways serving the Building and
located at the Facility and other common facilities designated by Landlord from
time to time for the common use of all tenants of the Building, and the day care
facility and exercise room described in Section 54 below. Notwithstanding that
the day care facility is a part of the Common Area, Landlord may charge Tenant
reasonable and uniform fees for the use of the day care facility. Said letting
and hiring are upon and subject to the terms, covenants, and conditions set
forth in this Lease, including the “Salient Lease Terms” in Section 1 and the
attached exhibits. This Lease is made upon the condition of such performance.

2.1.2 Landlord reserves to Landlord the areas beneath and above the Premises and
the use thereof together with the right to install, maintain, use, repair and
replace pipes, ducts, conduits, wires, and structural elements leading through
the Premises and serving other parts of the Facility, so long as Landlord’s use
of such areas is in compliance with the provisions of Section 22 below.

 

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2.1.3 Landlord reserves the right to effect such other tenancies in the Building
as Landlord may elect in its sole business judgment; provided, however, that any
retail leases for the first floor of the Building must not be inconsistent with
the types of uses permitted by landlords of Comparable Buildings.

2.1.4 Tenant may use any fire stairwells for circulation within the Premises to
the extent that Tenant pays for any costs associated with such use in excess of
costs Landlord would have incurred but for such use and Tenant complies with all
Laws (as such term is defined in Subsection 3.3 below).

2.2 Description. As used herein, the following capitalized terms shall have the
indicated meanings:

2.2.1 The “Facility” shall mean that certain real property (including the
high-rise office building and the land on which such building and plaza area are
situated (specifically including, if the day care center described in Section 54
is located on the third floor of that certain building located at 356 Howard
Street and commonly known as the “Marine Electric Building,” as Common Area, the
third floor of the Marine Electric Building, and an undivided one-third
(1/3) interest in the land under the Marine Electric Building [but specifically
excluding the first and second floors of the Marine Electric Building and an
undivided two-thirds (2/3) interest in the land under the Marine Electric
Building]; or, if the day care center is located elsewhere, the area used for
the day care center and an equitable proportion of the land on which the day
care center is located), the Building and Common Areas) owned by Landlord and
described in Exhibit A-1 attached hereto, said real property being described in
Subsection 1.3.1 above.

2.2.2 The “Premises” shall mean that certain space located in the Building and
described in Section 1.3.2 above and delineated on Exhibit A-2 attached hereto,
which space will consist of the amount of rentable square footage specified in
said Section 1.3.3.

2.2.3 The “Building” shall mean that certain building which is a part of the
Facility and located at the address described in Subsection 1.3.2 above.

2.2.4 The “Term” shall mean, with respect to the Phase I Premises and the
Phase II Premises, the period commencing upon the respective Effective Dates (as
defined in Subsection 1.4 above) and ending on the Expiration Date (as defined
in Subsection 1.4 above), subject to the provisions of this Lease concerning
extensions. As used in this Lease, the term “Commencement Date” shall mean and
refer, as applicable, to the respective Effective Dates of the Phase I Premises
and Phase II Premises.

2.3 Delivery of Premises. The Premises shall be delivered to Tenant in “AS IS”
condition, pursuant to the provisions of this Subsection 2.3.

2.3.1 The Phase I Premises shall be delivered to Tenant upon the full execution
and delivery of this Lease. As contemplated by the provisions of Subsection 2.1
of Exhibit B, during such early access by Tenant to the Premises, Tenant shall
be subject to the all of the terms and conditions of this Lease, except for
payment of Minimum Monthly Rent and Operating Expenses, provided that Tenant
shall be obligated to pay all electricity costs during such early entry period.

2.3.2 The Phase II Premises shall be delivered to Tenant on the Phase II
Premises Effective Date. The parties acknowledge that Tenant is in possession of
the Phase II Premises as of the date of execution and delivery of this Lease
pursuant to a sublease agreement by and between Tenant and
PricewaterhouseCoopers dated September 26, 2006 (the “Sublease”).

 

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3. USES.

3.1 Permitted Uses. Except as otherwise expressly provided herein, the Premises
shall be used only for general office uses. Tenant shall not use the Premises
for any other use or purpose besides those permitted under this Subsection 3.1,
except upon Landlord’s prior written consent, which shall not be unreasonably
withheld; provided, however, that it shall be reasonable for Landlord to
withhold its consent to the extent such use is unrelated to the Permitted Uses,
is inconsistent with the character of Class A high-rise office building in the
San Francisco Financial District which are perceived in the marketplace to be
similar to the Facility, taking into account the size, age, quality, tenant-mix,
and location within the sub-areas of the Financial District of the Facility and
other high-rise office buildings, as such market perception may change over
time, depending upon future development in downtown San Francisco (“Comparable
Buildings”) or materially interferes with the use of the Building by other
tenants or occupants thereof. Notwithstanding the foregoing, Tenant shall be
permitted to use portions of the Premises for a kitchen or kitchenette, food
vending machines, a printing center, conference centers and presentation
centers.

3.2 Restriction on Use. Without limitation to the generality of the foregoing
use restriction, Tenant specifically covenants and agrees that it shall not
(a) do, bring, or keep, or permit to be done, brought, or kept, anything in or
about the Premises that will in any way (i) adversely interfere with the access
or other rights of any other tenants or occupants of the Facility or injure or
annoy them, (ii) cause a weight load or stress on the floor or any other portion
of the Premises in excess of the weight load or stress that the floor or other
portion of the Premises is designed to bear without Landlord’s reasonable
approval, (iii) cause or threaten a cancellation of any fire or other insurance
upon the Building or its contents (as evidenced by one or more letters from
Landlord’s insurance company), or (b) use the Premises, or allow them to be
used, for any residential or disreputable purpose; (c) sublease any portion of
the Premises, or otherwise transfer occupancy, to a governmental agency or
related entity unless Landlord has entered into a direct lease with a similar
agency or entity that is effective as of the date of Tenant’s proposed transfer
of the Premises, or (d) commit or suffer to be committed any waste in or upon
the Premises or the Facility.

3.3 Compliance with Laws.

3.3.1 Landlord’s Responsibilities. Throughout the Term, Landlord shall maintain
and operate the Facility in compliance with Laws and be responsible (subject to
the provisions of Section 24 below and subject to reimbursement in accordance
with Subsection 6.3.1 below) for any additional work required to cause the
Facility (including the Common Areas, Base Building Systems and the restrooms)
to so comply.

3.3.2 Tenant’s Responsibilities. Tenant shall be responsible for any work of
construction within the Premises required to cause the Premises to comply during
the Lease Term with all applicable and future laws, statutes, rules,
regulations, ordinances, codes, licenses, permits, certificates of occupancy,
orders, decrees, directives, judgments, approvals, plans, authorizations, and
similar items of any local, state, or federal governmental or quasi-governmental
authority (collectively, “Laws,” or individually, a “Law”) that impose any duty
upon Landlord or Tenant with respect to the condition, use, occupancy, or
alteration of the Premises, including, but not limited to, any required changes
to the structural elements of the Premises such as interior stairwells and floor
shoring, elevator lobbies, corridors, and drinking fountains. Without limiting
the generality of the forgoing definition, the parties expressly acknowledge
that the term “Laws” shall include all Environmental Requirements (as defined
below) and all Laws relating to the rights of individuals with disabilities.
Notwithstanding the foregoing, Tenant shall not be required to make any changes
to the Base Building Systems or structural elements of the Facility, except to
the extent the same are caused or triggered by (a) Tenant’s unique and specific
use

 

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of the Premises for other than general office purposes, or (b) Tenant’s
extraordinary and unique employees or extraordinary and unique employment
practices (which specifically require such Base Building changes). Any such
compliance with Laws that is not Tenant’s responsibility pursuant to the
foregoing shall be performed by Landlord (as part of Operating Expenses to the
extent allowable in Section 6 hereof), but only to the extent then required
under applicable Laws to permit Tenant to use the Premises for general office
purposes in a normal and customary manner or prevent cancellation of insurance
of Tenant. The parties hereto shall immediately furnish to the other party any
notices such party receives from any insurance company or governmental agency or
inspection bureau where action is required of the other party regarding any
unsafe or unlawful conditions within the Premises.

 

4. INTENTIONALLY DELETED.

 

5. RENT.

5.1 Minimum Monthly Rent. Tenant shall pay to Landlord, as “Minimum Monthly
Rent” for the Premises, the amount specified in Subsection 1.1.5 above. Payments
of Minimum Monthly Rent shall be made in advance, on or before the first day of
each calendar month during the entire Term.

5.2 Definition of Rent; Prorations. Any and all payments of Minimum Monthly
Rent, directly metered costs of Tenant’s electricity (only if such amounts are
owed to Landlord and not to a utility company), Tenant’s Percentage Share of all
other electricity utilized in the Facility outside of space demised to
third-party tenants (specifically including the Common Area variable portion of
the electricity which shall be grossed up to 95% occupancy), and any and all
taxes, assessments, fees, charges, costs, expenses, insurance obligations, late
charges, Operating Expenses, and all other payments or reimbursements that are
attributable to, payable by or the responsibility of Tenant under this Lease
(including, without limitation, charges for any “above-building-standard
services” requested by Tenant or Tenant’s authorized representatives from time
to time) shall constitute “Rent” for all purposes of this Lease and any
applicable unlawful detainer statute. Any Rent payable to Landlord by Tenant for
any fractional month shall be prorated based upon the actual number of days in
such calendar month.

5.3 Place and Manner of Payment. All Rent shall be paid by Tenant to Landlord in
lawful money of the United States of America at Landlord’s address set forth in
Subsection 1.1.1 above, or to such other person or at such other place as
Landlord may from time to time reasonably designate in writing. All payments of
Minimum Monthly Rent shall be payable without prior notice or demand and all
payments of Rent shall be paid except as otherwise expressly provided herein,
without deduction, setoff or counterclaim for any reason whatsoever. Payments
made by check must be drawn either on a financial institution in the state where
the Facility is located or on a financial institution that is a member of the
federal reserve system.

5.4 Late Charges. Tenant acknowledges that the late payment of Rent will cause
Landlord to incur damages, the exact amount of which would be impractical and
extremely difficult to ascertain. Such damages may include, without limitation,
processing, accounting, and other administrative costs, loss of use of the
overdue funds, and late charges that may be imposed on Landlord by the terms of
any encumbrance and note secured by any encumbrance covering the Premises.
Landlord and Tenant agree that if Landlord does not receive a payment of Rent
within ten (10) days after such payment becomes due, Tenant shall pay to
Landlord a late charge in an amount equal to three percent (3%) of such overdue
Rent. Notwithstanding the foregoing, such late charge shall not be assessed if
all of the following conditions shall apply: (a) the late payment is made within
ten (10) days after Landlord’s written notice of delinquent payment and
(b) Landlord shall not, during the 365-day period immediately preceding the due

 

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date of such late payment, have delivered to Tenant written notice of more than
one (1) then delinquent payment of Minimum Monthly Rent or more than two
(2) other delinquent payments of Rent (other than Minimum Monthly Rent). In
addition to the provisions set forth in Section 23 of this Lease and in
Section 50 of this Lease, except that Tenant shall have no obligation to pay to
Landlord interest on interest, if Landlord does not receive a payment of Rent
within thirty (30) days after such payment becomes due, Tenant shall pay to
Landlord additional late charges computed at the interest rate of ten percent
(10%) per annum or, if lower, the maximum interest rate allowed by law (the
“Interest Rate”). Landlord agrees that any payments due from Landlord to Tenant
that are not received by Tenant within thirty (30) days after such payment
becomes due shall bear interest at the Interest Rate until paid. Such interest
shall begin to accrue as of such 30th day after such Rent payment became due.
The parties agree that such late charges represent a fair and reasonable
estimate of the cost that Landlord will incur by reason of late payment by
Tenant. Acceptance of any late charge by Landlord shall not cure or waive
Tenant’s default nor prevent Landlord from exercising, before or after such
acceptance, any of the rights and remedies for a default provided by this Lease
or at law. Tenant shall be liable for late charges regardless of whether
Tenant’s failure to pay the Rent when due constitutes an Event of Default under
this Lease.

5.5 Letter of Credit. In consideration of Landlord’s execution and delivery of
this Lease, Tenant shall provide Landlord, concurrent with the execution and
delivery of this Lease, with an unconditional letter of credit for One Million
Six Hundred Thousand Dollars ($1,600,000), supplemented by the delivery not
later than November 30, 2009 of a supplemental unconditional letter of credit
for Five Hundred Twenty Thousand Dollars ($520,000) (together, the “Letter of
Credit”) on a commercially reasonable, but fully unconditional form thereof, as
reasonably approved by Landlord, from a major California bank or other financial
institution approved by Landlord, securing Tenant’s performance under the terms
of this Lease, which Letter of Credit shall be automatically renewable and shall
have “evergreen” provisions stating that (i) Tenant shall immediately replenish
any drawn portion of the Letter of Credit, (ii) Tenant will renew the Letter of
Credit by a date which is thirty (30) business days prior to its expiration, and
(iii) if the Letter of Credit is not renewed by such date, Landlord may draw
upon the full amount of such Letter of Credit. To the extent that Tenant shall
not timely replenish any drawn portion of the Letter of Credit or timely renew
the Letter of Credit, Tenant shall be in default under this Lease, and Landlord
shall provide Tenant with written notice of Tenant’s failure to do same. Tenant
shall have a period of fifteen (15) business days after receipt of Landlord’s
notice to cure such default. To the extent that Tenant fails to cure such
default within such fifteen (15) business day period, Landlord shall have the
right to terminate this Lease without further opportunity for Tenant to cure
effective immediately by providing Tenant with written notice of Landlord’s
election to do same. In addition to any other rights or remedies available at
law or equity, Landlord shall have the right to draw on the Letter of Credit for
the amount of any Tenant Holdover Obligation that Tenant has not paid. The
Letter of Credit shall expire on that date which is sixty (60) days following
the Expiration Date of this Lease, subject to earlier expiration if Landlord has
terminated this Lease with more than nine (9) months remaining on the term of
the Lease.

5.6 Time of Payment. Tenant agrees to pay all Rent required under this Lease
within the applicable time limits set forth in this Lease. If no such time
period is elsewhere specified herein for payment of a particular amount, then
such amount shall be due and payable thirty (30) days after Landlord’s delivery
of an invoice or demand therefor.

5.7 Partial Payments. Payments by Tenant shall be applied against the then
outstanding rental charges that first became due. No payment by either party or
receipt by either party of a lesser amount than any installment or payment of
Rent due shall be deemed to be other than on account of the amount due, and no
endorsement or statement on any check or payment of Rent shall be deemed an
accord and satisfaction. Either party may accept such check or payment without
prejudice to that party’s right to recover the balance of such installment or
payment of Rent, or pursue any other remedies available to that party.

 

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5.8 Electricity to the Premises. All electricity directly serving the Premises
shall be metered and Tenant shall pay, as monthly rental, the actual cost
(without mark up by Landlord) of all such directly metered electricity to
Landlord as a reimbursement, provided that at Landlord’s election, Tenant shall
pay the electrical utility provider directly, except that Tenant shall remain
obligated to pay Landlord as reimbursement Tenant’s Percentage Share of the cost
of all other electricity utilized in the Facility outside of space demised to
third party tenants of the Facility (specifically including the Common Area
variable portion of the electricity which shall be grossed up to 95% occupancy).
Such payments to Landlord shall be made within thirty (30) days of Landlord’s
delivery of an invoice to Tenant therefor. Tenant acknowledges that its server
room will use an amount of electricity equal to or greater than 4.0 watts per
usable square foot, which usage Tenant shall meter separate and apart from all
other usage in the Building.

 

6. PAYMENT OF TAXES, ASSESSMENTS, AND OPERATING EXPENSES.

6.1 Tenant’s Percentage Share. In addition to paying the Minimum Monthly Rent,
Tenant shall pay to Landlord the percentage set forth in Subsection 1.1.8
(“Tenant’s Percentage Share”) of the amounts set forth below in Subsections 6.2
and 6.3. Tenant’s Percentage Share shall be calculated by dividing the net
rentable square feet of the Premises by the net rentable square feet contained
in the Building. Once the rentable square footage of the Premises and the
Building are verified as provided in Subsection 2.2.2 above, Tenant’s Percentage
Share shall not be subject to correction or recalculation, except as provided in
connection with the expansion or contraction of the Premises (pursuant to the
terms of this Lease) or except in the event the net rentable square feet
contained in the Building, or the so-called “load factor” used in calculating
such rentable area, is changed due to events of damage, destruction, demolition,
alterations, new construction, or redesignation of an area of the Facility as
Common Area.

6.2 Taxes and Assessments.

6.2.1 Payment. Tenant shall pay to Landlord an amount equal to Tenant’s
Percentage Share of any increase in Taxes above the amount of Taxes accrued for
the Base Tax Year set forth in Subsection 1.1.9, either by way of increase in
the rate or in the assessed valuation of the Facility (or any portion thereof)
or by imposition of any such charges by ordinance or statute of any authority
having jurisdiction. As used in this Section 6, the term “Taxes” shall mean all
real property taxes, excises, penalties (unless due to Landlord’s negligence or
willful misconduct), fees (including, without limitation, all license, permit
and inspection fees), and other charges (but excluding Assessments, as defined
in Subsection 6.2.2 below) assessed, levied, charged, confirmed, or imposed by
and payable to any local government, any local political subdivision, local
public corporation, district, or other local political or local public entity or
local public authority (collectively, the “Local Taxes”): (a) on the Facility
(or any portion thereof), (b) on Landlord with respect to the Facility (or any
portion thereof) as specifically by Building address or legal description
provided that such Local Taxes are designated for the use of such local taxing
authority, (c) on the act of leasing or entering into leases of space in the
Facility (provided that such Local Taxes are not merged into non-Local Taxes)
and treating rentals from such leases as if they were the only rentals received
by Landlord, (d) on or measured by the Rent payable under leases of space in the
Building, or (e) on personal property of Landlord used in the operation of the
Facility (or any portion thereof). Such Taxes may be general or specific,
ordinary or extraordinary, or of any kind or nature whatsoever, whether or not
now customary or within the contemplation of the parties to this Lease. All
references to Taxes herein shall be deemed to refer to taxes accrued during a
particular year, including supplemental tax bills, regardless of when they are
actually assessed and without regard to when such taxes are payable.
Notwithstanding the foregoing, federal, state, and local documentary transfer
taxes,

 

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gift, franchise, inheritance, gross receipts, transfer, succession, and estate
taxes, and income taxes shall not be included as Taxes or Assessments, nor shall
the computation of increases in Taxes or Assessments for which Tenant shall pay
Tenant’s Percentage Share include any amounts paid by Tenant under
Subsections 6.2.3 and 6.2.4 or any amounts separately billed to a particular
tenant of the Facility with respect to similar matters (other than as Tenant’s
Percentage Share of increases in Taxes or Assessments). The amount of Taxes
attributable to the Base Tax Year shall be reduced by the amount of any Tax
refund arising out of an appeal and permanent reduction of the Building’s
assessed valuation for the Base Tax Year.

6.2.2 Percentage Share. Tenant shall also pay to Landlord an amount equal to
Tenant’s Percentage Share of any increase in Assessments above the amount of
Assessments levied or assessed against the Facility for the Base Tax Year. As
used in this Section 6, the term “Assessments” shall mean all assessments,
transit charges, housing charges, and levies assessed, charged, levied,
confirmed, or imposed by any local government, any political subdivision, public
corporation, district, or other local political or public entity or public
authority thereof on or with respect to any of the items described in clauses
(a) through (e) of Subsection 6.2.1 or with respect to the use, occupancy,
management, maintenance, alteration, repair, or operation of the Facility (or
any portion thereof) or any services or utilities furnished or consumed in
connection with the use, occupancy, management, alteration, repair or operation
of the Facility (or any portion thereof). Neither “Taxes” nor “Assessments”
shall include any costs, taxes, fees, assessments, or impositions levied,
charged, assessed, or imposed by public authorities in connection with any
development or redevelopment of the Facility or expansion of the Building (other
than those Assessments that are generally applicable to similarly situated
property owners absent any such development or redevelopment or expansion),
except to the extent such Assessments either arise from actions undertaken by
Landlord in its reasonable efforts to comply with the requirements of this Lease
or are legally mandated, as opposed to discretionary actions. Except to the
extent otherwise expressly provided below, the amount of Assessments
attributable to the Base Tax Year shall be reduced by the amount of any
Assessment refund arising out of an appeal of an assessment levied or assessed
against the Facility for the Base Tax Year.

6.2.3 Full Responsibility. In addition to paying Tenant’s Percentage Share of
increases in the Taxes and Assessments described in Subsections 6.2.1 and 6.2.2,
Tenant shall pay one hundred percent (100%) of the following, as reasonably
determined by Landlord: any increase in Taxes or Assessments resulting from any
general office type improvements or installations above Class A-standard made to
the Premises by or at the instance of Tenant, other than the retrofit work
described in Exhibit B. The total amounts due under this Subsection 6.2.3 shall
be paid to Landlord on or before the date full payment of such Taxes or
Assessments shall become due, or if payable in installments, the date payment of
the first installment of such Taxes or Assessments shall become due. In the
event such Taxes or Assessments are paid by Landlord, Tenant forthwith upon
demand therefor shall reimburse Landlord for all amounts of such Taxes or
Assessments chargeable against Tenant pursuant to this Subsection 6.2.3.
Notwithstanding anything to the contrary set forth herein, in the event that
Tenant disputes the total amounts due under this Subsection 6.2.3, Tenant shall
have the right to resolve such disputes by arbitration pursuant to the terms and
conditions set forth in Exhibit F attached hereto.

6.2.4 Personal Property. Tenant shall pay, before delinquency, any and all
levied or assessed taxes that become payable during or with respect to the Term
upon Tenant’s equipment, furnishings, fixtures, and other personal property of
Tenant located in the Premises (collectively, “Tenant’s Personal Property”). In
the event said taxes are paid by Landlord, Tenant forthwith upon demand therefor
shall reimburse Landlord for all such taxes paid by Landlord.

6.2.5 Apportionment. Any Taxes or Assessments that may be paid over more than a
one-year period shall be apportioned evenly over the maximum period of time
permitted by Law and only

 

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the portion thereof accruing during a given year shall be included in Taxes or
Assessments for that year. Landlord shall use its reasonable discretion in
determining whether to contest the amount of any Taxes or Assessments and, upon
request of Tenant, Landlord shall explain to Tenant the basis for Landlord’s
decision as to whether or not to contest the amount of any Taxes or Assessments.
In the event that Landlord contests the amount of any Taxes or Assessments and
receives a refund or credit as a result thereof, then Landlord shall pay Tenant
Tenant’s Percentage Share of such refund to the extent that the refund relates
to Taxes or Assessments that have been paid by Tenant. Landlord’s obligation to
pay to Tenant Tenant’s Percentage Share of such refund shall survive the
expiration or sooner termination of this Lease. Upon Tenant’s request, Landlord
shall provide a copy of all applicable tax bills. Landlord shall make continuous
good faith efforts to minimize Real Estate Taxes.

6.3 Operating Expense Increases.

6.3.1 Definition. Tenant shall pay to Landlord an amount equal to Tenant’s
Percentage Share of any increase in Operating Expenses above the Operating
Expenses for the Base Expense Year. As used in this Section 6, the term
“Operating Expenses” shall mean costs and expenses accrued by Landlord in
connection with the operation, management, or maintenance of the Facility (which
costs shall be accounted for under generally accepted accounting principles
consistently applied and shall be amortized when and as required thereunder),
excluding, however, the items described in Subsection 6.3.2 below, which items
shall not be included in Operating Expenses for purposes of this Lease. By way
of illustration but not limitation, Operating Expenses shall include (subject to
the specific exclusions described in Subsection 6.3.2 below) all actual and
commercially reasonable (a) costs for heating, cooling, ventilation, fuel, and
utilities serving the Common Areas; (b) costs and expenses for maintenance,
ordinary and extraordinary repairs, testing, and operation of building systems
and components including, without limitation, costs and expenses for maintenance
and repair of the roof membrane; (c) costs and expenses for security,
landscaping, refuse disposal, janitorial services, labor, supplies, materials,
equipment, and tools, including any sales, use, or excise taxes thereon;
(d) market management fees (up to but not exceeding 3% of the gross
revenues/receipts of the Facility including Minimum Monthly Rent (but not
including after-hours service or utilities)) and other costs of managing the
Facility, whether managed by Landlord or an independent contractor; (e) the
wages, salaries, bonuses, employee benefits and payroll burden, pro-rated to
account for the time actually spent with respect to the Facility, of all
Landlord’s (or its agents’) on-site or off-site employees below the level of
senior property manager engaged in the day-to-day operation, maintenance,
management, or security of the Facility, including employers’ payroll, social
security, workers’ compensation, unemployment, and similar taxes with respect to
such employees; (f) subject to the provisions of Subsection 6.3.1(a) below, all
insurance premiums paid or incurred by Landlord with respect to the Facility and
all amounts paid in connection with claims or losses that are less than the
amount of such deductibles or self-insured retentions as Landlord may have
deemed reasonable for its insurance policies, but only to the extent that such
deductible or self-insured retention does not exceed (i) the then-current
commercially reasonable level of dollars per occurrence, if during the initial
10-year Term, or (ii) the customary range of deductibles or self-insured
retentions (as the case may be) for Comparable Buildings, if after said initial
10-year term; (g) all reasonable costs and expenses of contesting by appropriate
proceeding the amount or validity of any Taxes or Assessments; (h) the annual
amortized costs (plus interest on the unamortized balance at a rate equal to
such commercially reasonable interest rate as Landlord may be paying to a
non-affiliated third party on funds borrowed to finance such costs, or if such
financing is not obtained, at a rate equal to the prime rate (the “Reference
Rate”) reported from time to time in the Money Rates section of the Wall Street
Journal, or if such rate shall no longer be regularly published, such
replacement rate as Landlord may reasonably designate) of any capital
improvements, capital repairs or capital assets constructed, made, purchased, or
installed after the Base Year (i) in order to comply with any Law (as defined in
Subsection 3.2) which is enacted after the Base Year or (ii) in order to
conserve energy or reduce other Operating Expenses or increase the efficiency of
any of the Base Building Systems so as to achieve a

 

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reduction or a lower increase in Operating Expenses, with any such capital costs
referred to in clause (h)(i) above to be amortized over the useful life of such
capital improvements or capital assets, as reasonably determined by Landlord,
and with any such capital costs referred to in clause (h)(ii) above to be passed
through to Tenant at the rate which is the lesser of: (A) an amount equal to
cost of such improvements, amortized at the Reference Rate over the useful life
of such capital improvements; or (B) the rate of the actual annual savings (the
determination of which may, in appropriate circumstances, require Landlord’s
reasonable engineering calculations to account for annual fluctuations in
conditions such as building occupancy rates and weather conditions) in Operating
Expenses achieved as a consequence of such capital expenditure; (i) the fair
market rental value of the building office and other space in the building
occupied by Landlord or its manager in connection with the operation or
management of the Facility which shall not exceed 3,000 rentable square feet;
(j) the cost of complying with Subsection 47.3 below; (k) the non-capital cost
of complying with the rules and regulations applicable to the Facility as
mandated by governmental authorities with jurisdiction over the Facility,
including employment brokerage services pursuant to San Francisco Planning Code
Section 164; (l) all other costs and expenses that under generally accepted
accounting principles and practices of Comparable Buildings would be included in
operating expenses; and (m) costs of maintenance of any exercise rooms, food
service facility, day care center or other similar specialty service facility,
subject to a credit against such costs of maintenance for any revenue generated
by or rent collected from such facility. Landlord’s obligations to provide
services are set forth elsewhere in this Lease. The above itemization of
operating expenses is for illustrative purposes only and shall not be deemed to
increase or modify Landlord’s obligations to provide services under this Lease.

(a) Earthquake Insurance. From time to time, Landlord may carry and maintain a
policy of earthquake insurance insuring the Building against property damage
caused by certain seismic hazards. The parties acknowledge that the market for
earthquake insurance policies is very volatile, and may include large
fluctuations in the availability and cost of such insurance. As more fully
provided below, it is the intent of the parties that, when determining what
insurance premium costs should be included in the calculation of Operating
Expenses for the Base Expense Year and any later year (hereinafter, a
“Comparison Year”), appropriate adjustments should be made so that (a) Tenant
will only be charged Tenant’s Percentage Share of increases allocable to what
comparable insurance policies would have cost in the two years then in question
and (b) Tenant will not be charged for cost increases allocable to insurance
coverage exceeding what is then ordinary or customary. Accordingly, to the
extent that Landlord at any time carries greater earthquake insurance coverage
than is provided under any “Conventional Earthquake Policy” (as defined below),
Landlord shall only include in Base Expense Year Operating Expenses and
Comparison Year Operating Expenses the respective amounts reflecting what a then
reasonable Conventional Earthquake Policy would have cost for the years in
question. Also, to the extent that the coverage under the respective earthquake
policies (or the deemed coverage, where the actual policy was greater than a
then reasonable Conventional Earthquake Policy) are different from each other,
Landlord shall recalculate the cost of the premiums for the Base Expense Year to
reflect what an earthquake policy with coverage comparable to the Comparison
Year’s coverage (not to exceed the reasonable Conventional Earthquake Policy)
would have cost during the Base Expense Year. Notwithstanding any provision
hereof to the contrary, if the earthquake coverage actually maintained during
the Base Expense Year exceeds (i) a then reasonable Conventional Earthquake
Policy then available or (ii) the earthquake coverage actually maintained during
the Comparison Year, then the amount attributed to the cost of such policy
attributable to the Base Expense Year shall not be greater than the amount
attributed to the cost of such Comparison Year’s earthquake insurance when
calculating Tenant’s Percentage Share of increases in Operating Expenses for
such Comparison Year.

(b) Conventional Policy. As used herein, the term “Conventional Earthquake
Policy” shall mean, for any given year, a policy of earthquake insurance that
was then either customary or usual for owners of Comparable Buildings. Landlord
shall have the right, in its sole and absolute discretion, to carry no
earthquake insurance at all.

 

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(c) Determination. Whenever Subsection 6.3.1(a) above requires the determination
of the cost of an earthquake policy different from that actually carried by
Landlord for the year in question, a reputable independent ‘insurance broker
with a minimum of five years of experience in the earthquake insurance market in
the San Francisco Financial District, mutually selected by Landlord and Tenant
shall reasonably determine what the premium would have been for such a policy in
the year in question.

(d) Disputes. Any disputes between the parties concerning the calculation of
costs under, or the application of, Subsections 6.3.1(a) through 6.3.1(c) above
shall be resolved in accordance with the arbitration procedures set forth in
Exhibit F attached hereto.

6.3.2 Exclusions. The following costs and expenses shall be excluded from the
definition of “Operating Expenses” for purposes of this Lease:

(a) Any costs for which Landlord is reimbursed by insurance.

(b) Brokers/Leasing commissions, attorneys’ fees, accountant’s fees, costs and
disbursements and other expenses incurred in connection with negotiations or
disputes with present or prospective tenants or other occupants or associated
with the enforcement of any leases or the defense of Landlord’s title to or
interest in the Facility.

(c) Costs (including permit, license and inspection fees) incurred in renovating
or otherwise improving or decorating, painting, or redecorating space for new
tenants or existing tenants in connection with extensions of the terms of their
respective tenancies.

(d) Landlord’s costs of any services sold or provided to tenants or other
occupants for which Landlord is entitled to be reimbursed by such tenants or
other occupants as an additional charge or rental over and above the basic
rental and escalations payable under the lease with such tenant or other
occupant, unless Landlord is likewise entitled to reimbursement for like
services provided to Tenant or its subtenants and elects not to require
reimbursement from Tenant or its subtenants.

(e) Depreciation and amortization on the Facility and equipment, except as
otherwise provided in Subsection 6.3.1(h) above.

(f) Costs (including the amortization thereof) of any repairs, improvements,
alterations, or equipment that would be properly classified as a capital
expenditure according to generally accepted accounting principles, except as
otherwise expressly included in the definition of “Operating Expenses” under
Subsection 6.3.1 above or which are reimbursable under any service contract,
lease warranty or guaranty.

(g) Expenses in connection with services or other benefits of a type that is
made available to Tenant with an additional charge, but that is generally made
available to another tenant or occupant without additional charge.

(h) Costs incurred due to violation by Landlord of the terms and conditions of
any lease or any Law or regulation, except to the extent that such costs reflect
costs that would have been incurred by Landlord absent such violation.

 

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(i) Overhead and profit increment paid to Landlord or its subsidiaries or
affiliates for management or other services on or to the Facility or for
supplies or other materials to the extent that the costs of such materials,
services, or supplies exceed the costs normally payable for like services,
supplies or materials provided by unaffiliated parties on a competitive basis
(taking into account the market factors in effect on the date any relevant
contracts were negotiated) in Comparable Buildings.

(j) Interest on debt or amortization payments (except as expressly included as
Operating Expenses under Subsection 6.3.1 above) on any mortgages or deeds of
trust.

(k) Landlord’s general corporate overhead and general administrative expenses
including Landlord’s general corporate legal and accounting expenses.

(l) Rentals and other related expenses incurred in leasing air conditioning
systems, elevators or other equipment ordinarily considered to be of a capital
nature, except equipment that is used in providing janitorial services and that
is not affixed to the Building and except for equipment covered by
Subsection 6.3.1(h) above.

(m) The cost of any work required in order to rectify design and/or construction
defects and to bring the Building into compliance with building and safety code
requirements applicable to the Building at the time of the commencement of the
Term.

(n) Marketing, advertising and promotional expenditures.

(o) Capital costs for purchasing paintings, sculpture, and other objects of art
(provided, however, that commercially reasonable costs of installing,
protecting, and maintaining such items may be included in “Operating Expenses”).

(p) Any compensation paid to clerks, attendants, or to other persons involved
with the operation of the parking facility or in commercial concessions operated
by Landlord or any other costs associated therewith.

(q) Taxes and Assessments, as defined in Subsections 6.2.1 and 6.2.2 above.

(r) The cost of abating, removing, remediating, or cleaning up any asbestos or
other Hazardous Substances or otherwise complying with Environmental
Requirements, except that Operating Expenses may include the costs thereof
expended as part of the ordinary and customary operation and maintenance of the
Facility (“Ordinary Compliance Costs”).

(s) Advertising and promotional expenditures, and costs (other than maintenance
costs) related to signs in or about the Facility identifying the owner of the
Facility or any tenant thereof.

(t) Costs for the repair of damage to any improvements in the Facility resulting
from the gross negligence or willful misconduct of Landlord or any Landlord
Parties (as such term is defined in Subsection 15.1.1 below).

(u) Costs of insurance premiums in excess of those being charged by the owners
of Comparable Buildings for comparable insurance.

(v) The cost of any one-time utility connection or “tap-in” fees relating to the
premises of a particular tenant or occupant of the Building or the Facility.

 

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(w) Costs of electricity (such costs are specifically treated in Subsections 5.2
and 5.8 above).

(x) Charitable and political contributions.

(y) Accountants’ and attorneys’ fees and expenses incurred in connection with
lease enforcement, lease disputes, or lease negotiations with prospective,
former or current Building tenants or occupants, or in connection with the
defense of Landlord’s title to or interest in the Facility or the sale of the
Facility and any attorneys’ fees and expenses if incurred in connection with
litigation over any other matter whatsoever.

(z) Costs associated with the operation of the business of the partnership or
entity that constitutes Landlord, as the same are distinguished from the costs
of operation of the Facility, including partnership or other entity accounting
and legal matters, costs of defending any lawsuits with any mortgagee, costs of
any disputes between Landlord and its employees (if any), disputes between
Landlord and Facility management, or outside fees paid in connection with
disputes with tenants.

(aa) The wages and benefits of any employee who does not devote substantially
all of his or her employed time to the operation and management of the Facility
unless such wages and benefits are prorated to reflect time spent on operating
and managing the facility vis-à-vis time spent on matters unrelated to operating
and managing the Facility.

(bb) Interest, fines or penalties assessed as a result of Landlord’s failure to
make payments in a timely manner unless such failure is economically
advantageous to the tenants of the Building under the circumstances.

(cc) Costs of selling, syndicating, financing, mortgaging (including syndication
thereof) or hypothecating any of Landlord’s interest in the Facility.

(dd) Rental under any ground lease or other underlying lease of the Building or
Facility and other monetary obligations in connection therewith.

(ee) Entertainment expenses of Landlord; including costs of parties to which
Tenant is not invited, other than Holiday parties.

(ff) Cost of leasing, purchasing or installing tenant improvements, furniture,
fixtures, and equipment and operating costs of any eating facility, exercise
rooms, day care center, or other specialty service, if any.

(gg) Any other expense that, under generally accepted accounting principles and
practices, as customarily applied in the operation and management of Comparable
Buildings, would be excluded from operating and maintenance expenses, except as
otherwise expressly provided in Subsection 6.3.1 above.

(hh) Any bad debt loss, Rent loss or reserves for bad debts or Rent loss.

(ii) Costs of rooftop antennas for specific tenants.

6.3.3 Gross-Up. If at any time, including the Base Year, less than ninety-five
percent (95%) of the rentable area of the Building is occupied by office tenants
and/or if the Base Year is less than twelve (12) full calendar months, the
Operating Expenses shall be reasonably adjusted by Landlord

 

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to approximate such operating and maintenance costs which vary with the
occupancy level of the Building as would have been incurred if the Building had
been at least ninety-five percent (95%) occupied by office tenants for twelve
(12) full calendar months.

6.3.4 General Principles. Operating Expenses shall be computed in accordance
with the following general principles:

(a) Landlord agrees to operate and maintain the Facility during the Base Year
and all subsequent years using reasonably consistent policies and practices,
taking into consideration changes in policies and practices that are generally
adopted from time to time in Comparable Buildings in the San Francisco Financial
District.

(b) Unless otherwise specifically provided herein, Operating Expenses shall be
reasonably determined in accordance with generally accepted accounting
principles.

(c) All of the Building’s ground floor retail tenants (if any) whose retail
business in their premises is other than a conventional office-type of use
(e.g., a delicatessen, a day care center, or customer service for an investment,
insurance, or financial business) shall be separately charged for electricity,
water, and janitorial services used directly by and in their respective premises
and all such costs shall be excluded from Operating Expenses as defined in
Subsection 6.3.1 above.

(d) Landlord shall collect only 100% of actual costs without mark-up and
Landlord shall not administer the Operating Expenses, Taxes or Assessments as a
“profit center.”

6.4 Allocations of Certain Costs. If any Taxes, Assessments, or Operating
Expenses paid in one year relate to more than one calendar year or to buildings,
land or facilities other than the Facility, Landlord shall allocate such Taxes,
Assessments, or Operating Expenses among the appropriate calendar years or
buildings, land or facilities both in accordance with generally accepted
accounting principles and in a fair and equitable manner. If the Term ends other
than on December 31, Tenant’s obligations to pay Tenant’s Percentage Share of
estimated and actual amounts of increases in Taxes, Assessments, and Operating
Expenses for such final calendar year shall be prorated to reflect the portion
of such year included in the Term. Such proration shall be made by multiplying
the total estimated or actual (as the case may be) Taxes, Assessments, and
Operating Expenses for such calendar year by a fraction, the numerator of which
shall be the number of days of the Term during such calendar year, and the
denominator of which shall be 365. Landlord may, but shall not be required to,
calculate prorations with regard to when during a calendar year particular items
of Operating Expenses accrued.

6.5 Estimated Payments. Landlord shall notify Tenant of its reasonable good
faith estimate of the monthly amount of Tenant’s Percentage Share of increases
in Taxes, Assessments, or Operating Expenses and Tenant shall pay Landlord such
estimated monthly payment at the same time as, and together with, Tenant’s
Minimum Monthly Rent but in no event sooner than the first day of the calendar
year 2008. Landlord may from time to time, but in no event more than one
(1) time per calendar year, by notice to Tenant, change such estimated monthly
amounts based upon Landlord’s actual or projected Taxes, Assessments, or
Operating Expenses.

6.6 Statement of Expenses. Landlord shall, after December 31 of each year, using
its good faith commercially reasonable efforts to do so by April 30, but no
later than December 31 following such April 30 date, furnish to Tenant a “Final
Statement,” it being agreed that if the Final Statement is not delivered to
Tenant until after April 30 of the applicable year and the Final Statement shows
that Tenant overpaid its allocable share of actual Taxes, Assessments and
Operating Expenses, Tenant shall be entitled to interest on such overpayment at
the Interest Rate from and after April 30 until the date

 

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Landlord delivers such Final Statement. The Final Statement shall contain a
computation of the charge or credit to Tenant for any difference between
(a) Tenant’s proportionate share of the actual Taxes, Assessments, and Operating
Expenses and (b) the estimated portion(s) thereof paid by Tenant for the
preceding calendar year, and the amount of any underpayment shall be paid by
Tenant within thirty (30) days after delivery of said notice. The Final
Statement shall contain a line item detail setting forth by categories the
actual Operating Expenses incurred by Landlord for the previous year. In the
event of overpayment by Tenant, Landlord shall credit such overpayment in full
against Tenant’s payment of Rent next coming due hereunder; provided, however,
that to the extent that the overpayment exceeds Tenant’s payment of Rent next
coming due hereunder, Landlord shall refund such excess within thirty (30) days
of the date Landlord provides Tenant with notice of same. Upon expiration or
sooner termination of this Lease, if Tenant was not in material default
hereunder immediately prior thereto, Landlord shall refund to Tenant any
overpayment within thirty (30) days after Landlord’s computation of the same. In
the event Landlord shall not have delivered the Final Statement until after said
December 31 date, Landlord shall have waived its right to collect from Tenant
any underpayment for the applicable year; provided that such waiver shall not
apply to third-party invoices (such as an adjusted tax statement) which has not
been received by Landlord by November 1 of the year of delivery of the Final
Statement, in which event Landlord shall have sixty (60) days from receipt of
such third-party invoice to deliver to Tenant an adjusted Final Statement with
appropriate credit or payment obligation in favor of or by Tenant.

6.7 Non-Waiver of Rights. Without limitation to the provisions of Section 31
(Non-Waiver), no failure or determination of Landlord in any previous year to
include or exclude certain items in its computation of Taxes, Assessments, or
Operating Expenses or to invoice Tenant for the full amount of Tenant allocable
share of Taxes, Assessments, or Operating Expenses shall be construed as
depriving Landlord of the right to include such items as Taxes, Assessments, or
Operating Expenses or to invoice Tenant for the full amount of Tenant’s
Percentage Share for the current year in strict accordance with the provisions
of this Section 6, so long as a parallel adjustment is made to the Base Year
Operating Expenses to the extent such adjustment should properly have been
included in the Base Year (no Base Year adjustment will be made with respect as
to an expense item which was not applicable to the Base Year); such adjustments
shall only be made to the Base Year and the three (3) calendar years immediately
preceding the year of the first such inclusion. Any such adjustment shall be
made only as to the line item which required such adjustment.

6.8 Right to Accounting Audit.

6.8.1 Statement.

(a) Upon Tenant’s request made no later than one hundred twenty (120) days after
receipt of the Final Statement (or, if applicable, Landlord’s adjusted Final
Statement), Landlord shall promptly (and in any event within ten (10) business
days after Tenant’s request) deliver to Tenant such information regarding the
Final Statement (or, if applicable, Landlord’s adjusted Final Statement) as may
be reasonably required by Tenant to ascertain Landlord’s compliance with this
Section 6; provided, however, that with respect to an adjusted Final Statement,
Tenant may dispute only such items adjusted by such adjusted Final Statement. If
Landlord issues Tenant an adjusted Final Statement after Tenant notifies
Landlord that Tenant has elected to perform an accounting audit based on the
previously delivered Final Statement, Landlord will reimburse Tenant for the
additional auditor fees required to conform the statements.

(b) Landlord and Tenant shall endeavor in good faith promptly to resolve any
dispute regarding the Final Statement (or, if applicable, the adjusted Final
Statement); provided, however, that except for revisions to take into account
any subsequent reassessment affecting the calculation of Taxes included in such
statement, Landlord’s Final Statement (or, if applicable, the adjusted

 

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Final Statement) (with such revisions, if any, as the parties shall have agreed
upon) shall become final and binding upon Landlord and Tenant unless, within one
hundred twenty (120) days after Tenant’s receipt of the Final Statement (or, if
applicable, the adjusted Final Statement) or Tenant’s receipt of any such timely
requested information, whichever occurs later, Tenant shall by written notice
delivered to Landlord elect to perform an accounting audit of Landlord’s books
and records relating to the year in question and the Base Year, for purposes of
verifying Landlord’s calculation of Taxes, Assessments, and Operating Expenses.
Such accounting audit may only be done by (i) Tenant, (ii) a reputable and
nationally recognized first-class professional auditing firm, which may be
compensated by Tenant on a contingency basis or (iii) by the accounting audit
professionals within a general real estate firm. Books and records within the
scope of the audit shall be made available for Tenant’s or its agent’s or the
auditor’s inspection within ten (10) business days after the auditor’s request
therefor. If Tenant shall have availed itself of its right to audit Landlord’s
books and records and then disputes the accuracy of the information set forth in
Landlord’s books and records with respect to the Final Statement (or, if
applicable, the adjusted Final Statement), Tenant shall nevertheless continue to
pay the amounts as required by the provisions of this Section 6 until such
dispute is resolved.

(c) Within thirty (30) days after Tenant’s completion of the audit, Tenant shall
make the results of the audit available to Landlord. If, after Tenant’s audit,
Tenant continues to dispute the Final Statement (or, if applicable, the adjusted
Final Statement), Tenant and Landlord shall attempt to resolve the dispute
within thirty (30) days after Landlord’s receipt of Tenant’s audit results (the
“Reconciliation Period”). If Landlord and Tenant are able to resolve the dispute
during the Reconciliation Period and as part of such resolution the parties
determine that the Tenant overpaid its Percentage Share of actual Taxes,
Assessments or Operating Expenses, Landlord shall reimburse Tenant for the
amount of such overpayment within thirty (30) days after the date Landlord and
Tenant resolved such dispute. If, as part of the resolution of the dispute, the
parties determine that Tenant underpaid its Percentage Share of actual Taxes,
Assessments or Operating Expenses, Tenant shall pay Landlord the amount of such
underpayment within thirty (30) days after the date Landlord and Tenant resolved
such dispute. If Landlord and Tenant are unable to resolve such dispute, then no
later than six (6) months after the Reconciliation Period, Tenant must (or its
right to contest such charges shall be deemed waived) institute arbitration
proceedings against Landlord, in accordance with the arbitration procedures set
forth in Exhibit F attached hereto, to collect and recover any overpayment made
by Tenant of its Percentage Share of actual Taxes, Assessments and Operating
Expenses. Tenant shall be precluded from contesting Taxes, Assessments, or
Operating Expenses, or Landlord’s computations of the amounts payable by
Landlord or Tenant pursuant to this Section 6, unless an arbitration complaint
is filed and served within such six (6) month period. Should the arbitrator find
errors in excess of three percent (3%) of the Final Statement (or, if
applicable, the adjusted Final Statement), then Landlord shall be responsible
for all reasonable fees and actual, documented and reasonable out-of-pocket
costs incurred by Tenant with respect to Tenant’s audit and the arbitration
proceeding. Should the arbitrator find no overcharges or overcharges not
exceeding three percent (3%) of the statement, then Tenant shall be responsible
for the cost of the audit and all of the reasonable fees and actual, documented
and reasonable out-of-pocket costs incurred by Landlord with respect to the
arbitration proceeding. Notwithstanding anything to the contrary set forth
herein, to the extent that the arbitrator finds overcharges, then Tenant shall
have the right to audit, pursuant to the terms and conditions of this
Subsection 6.8, the Final Statement (or, if applicable, the adjusted Final
Statement) issued by Landlord during the Term for the prior three (3) (but not
more than three (3)) calendar years and the Base Year.

6.8.2 Ruling. If Tenant institutes arbitration procedures as provided in
Subsection 6.8.1 above, then the arbitrator shall determine whether or not
Tenant was overcharged or undercharged for Tenant’s Percentage Share of
increases in Taxes, Assessments, or Operating Expenses and shall also determine
the appropriate level of Taxes, Assessments and Operating Expenses for the Base
Year. At the conclusion of the arbitration, the arbitrator shall issue a ruling
as to what the Taxes,

 

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Assessments, and Operating Expenses for the year in question and Taxes,
Assessments and Operating Expenses for the Base Year and what Tenant’s
Percentage Share of increases therein should have been had Landlord strictly
complied with the provisions of this Lease. If Landlord overcharged Tenant for
increases in Taxes, Assessments, or Operating Expenses, the amount of the
overcharge shall be returned to Tenant within thirty (30) days following the
conclusion of the arbitration. If the arbitrator determines that Tenant was
undercharged for increases in Taxes, Assessments, or Operating Expenses, Tenant
shall pay the amount of such undercharge to Landlord within thirty (30) days
following the issuance of the arbitration ruling.

 

7. STORAGE SPACE.

Storage Space shall be made available to Tenant on a first-come, first-serve,
pro –rata share basis in an enclosed, dry and secure area designated by Landlord
within the Building. If there are various areas available for use as Storage
Space within a larger designated area approved by Landlord for use as Storage
Space, Tenant shall be entitled to choose the location of its Storage Space
prior to other tenants of the Facility. Tenant shall pay the rent for such
Storage Space at the rate of $24.00 per square foot per month. Tenant shall take
possession of the Storage Space in its “AS IS” condition. In addition, Tenant
shall not transfer all or any portion of such Storage Space unless such transfer
is made in connection with a transfer of the Premises.

 

8. HAZARDOUS SUBSTANCES.

8.1 Definitions. As used herein, “Hazardous Substance” shall mean any substance,
material, or waste that is or becomes regulated by any federal, state, or local
governmental authority because of its toxicity, infectiousness, radioactivity,
explosiveness, ignitability, corrosiveness, or reactivity. As used herein,
“Environmental Requirements” shall mean all Laws and prudent industry practices
relating to industrial hygiene, protection of human health, warnings, hazard
communication, employee rights-to-know, environmental protection, or any
Hazardous Substance.

8.2 Consent Required for Hazardous Substances. Tenant shall not cause or
authorize any Hazardous Substance to be brought upon, generated, produced, kept
or used in or about the Facility by Tenant or any “Tenant Parties” (as that term
is defined in Subsection 11.1 below) or invitees of Tenant (“Tenant Invitees”)
unless (a) such Hazardous Substance is necessary for the business (and such
business is a Permitted Use) of Tenant or its permitted subtenant or assignee,
and (b) Tenant first obtains the consent of Landlord if such Hazardous Substance
is other than (i) an “Article” (as defined in 29 C.F.R. §1910.1200) that is free
of asbestos (whether friable or nonfriable) and polychlorinated biphenyls (PCBs)
or (ii) a consumer product that is used on the Premises in quantities that would
not require any notification or reporting under any Environmental Requirement,
or any warnings to any persons located anywhere outside the Premises, if the
entire quantities were released into the environment. Any request by Tenant for
such consent shall be in writing and shall demonstrate to the reasonable
satisfaction of Landlord that such Hazardous Substance will be stored, used, and
disposed of in a manner that complies with all Environmental Regulations
applicable to such Hazardous Substance. Such consent shall not be unreasonably
withheld, but Landlord shall in no case be obligated to consent to the presence
of any Hazardous Substance that will increase the likelihood or magnitude of
Landlord’s liability, or to any treatment, storage, or disposal upon the
Premises or the Facility of any Hazardous Substance whose treatment, storage, or
disposal requires a permit or variance under applicable Environmental
Requirements. In no event shall Landlord ever be obligated to execute any
application for any such permit or variance.

8.3 Notices. Tenant shall promptly deliver to Landlord copies of any reports
made to any environmental agency arising out of or relating to any Hazardous
Substances in, on, or from the Premises

 

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and copies of all hazardous waste manifests reflecting the legal and proper
disposal of all hazardous wastes removed by Tenant from the Facility. If at any
time Tenant shall become aware that any Hazardous Substances, other than those
already known by Landlord or permitted under this Lease, have come to be located
in or about the Premises, or that any known Hazardous Substances within the
control of Tenant have been, are being, or are threatened to be released into
the environment, Tenant shall, immediately upon discovering same, give notice of
that condition to Landlord. In addition, each party shall immediately provide
the other party with a copy of any notices regarding Hazardous Substances in the
Premises that party receives from a governmental entity.

8.4 Compliance with Environmental Requirements. Without limitation to the
generality of Subsection 3.2 (Restriction on Use), Tenant shall, at its own
expense, use commercially reasonable efforts to comply with all Environmental
Requirements, prudent industry practices, and Landlord’s Rules and Regulations
regarding use, handling, disturbance, management, or disposal of Hazardous
Substances pertaining to the Premises and Facility, except as otherwise provided
in Subsection 8.5 below. Except as discharged into the sanitary sewer in strict
accordance and conformity with all applicable Environmental Requirements, Tenant
shall cause any and all Hazardous Substances removed from the Premises (or from
any other portion of the Facility, if their removal is at the instance or
direction of Tenant) to be removed and transported solely by duly licensed
haulers to duly licensed facilities for final disposal of such materials and
wastes. Upon expiration or earlier termination of the Term, Tenant shall cause
to be removed from the Premises and the Facility all Hazardous Substances that
Tenant or any Tenant Parties or Tenant Invitees caused or authorized to be
located there; provided, however, that Tenant shall not be responsible for
removing Hazardous Substances Landlord caused to be located in the Premises, and
Landlord shall be responsible for any governmentally required removal of same.
If the presence of Hazardous Substances brought onto the Facility by any of such
persons results in contamination of any portion of the Facility, Tenant shall be
solely responsible, at its sole expense, for taking any and all necessary steps
to return the affected portion of the Facility to its condition prior to such
contamination, as reasonably determined by Landlord; provided, however, that
Tenant shall not take any remedial action (except in emergencies) in response to
the presence of, nor enter into any settlement agreement, consent decree, or
other compromise in respect to any claims relating to, any Hazardous Substance
in any way connected with the Facility, without first notifying Landlord of
Tenant’s intention to do so and affording Landlord ample opportunity to appear,
intervene, or otherwise appropriately assert and protect Landlord’s interest
with respect thereto; and further provided, that Landlord shall have the right
(but not the obligation) to perform any such remediation on Tenant’s behalf, in
which event Tenant shall reimburse Landlord for all of Landlord’s reasonable
costs and expenses incurred in connection therewith.

8.5 Landlord’s Obligation. Subject to Landlord’s right to reimbursement of
certain costs or expenses under other provisions of this Lease, as such
reimbursement right is restricted under Subsection 6.3.2(r) above, Landlord
agrees to use commercially reasonable efforts consistent with the efforts of
landlords of Comparable Buildings to fully comply with all applicable
Environmental Requirements and prudent industry practice or rules and
regulations regarding the use, management, handling, or disposal of Hazardous
Substances (a) that were existing on the Premises as of the Commencement Date or
(b) that were or are otherwise brought upon or kept or used in or about the
Facility by Landlord, its affiliates and their respective agents, employees, or
contractors. Landlord represents and warrants to Tenant that, as of the
Commencement Date, the Facility shall be in compliance with all Environmental
Requirements in existence as of the Commencement Date. Landlord further
represents and warrants that it shall only bring Hazardous Substances into or on
the Facility to the extent reasonably necessary to operate the Facility.
Landlord will treat Tenant from a financial-impact standpoint as if all tenants
in the Building had a provision substantially similar to Subsection 8.4 above in
their leases and as if Landlord reasonably enforced such requirements under
their leases. To the extent that Landlord does not include provisions
substantially similar to Subsection 8.4 in the other leases in the Building
and/or Landlord does not reasonably enforce such provisions and Tenant is
negatively affected thereby, Landlord will protect Tenant from such effect.

 

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9. NO LIGHT, AIR OR VIEW EASEMENT.

No rights to any view or to light or air over any property, whether belonging to
Landlord or any other person, are granted to Tenant by this Lease. If at any
time any windows of the Premises are darkened or the light or view therefrom is
obstructed by reason of any repairs, improvements, maintenance or cleaning in or
about the Building, the same shall be without liability to Landlord and without
any reduction or diminution of Tenant’s obligations under this Lease.

 

10. ALTERATIONS.

10.1 Tenant’s Right to Make Alterations.

10.1.1 Tenant shall not make or suffer to be made any alterations, additions,
improvements, or utility installations (collectively, “Alterations”) to the
Premises or any part thereof without the prior consent of Landlord, which shall
not be unreasonably withheld or delayed. Upon Tenant’s request, Landlord shall
state in writing, at the time it grants such consent, whether or not Landlord
will require the removal of all or any part of the proposed Alterations at the
end of the Term pursuant to Subsection 10.3.1 below. Tenant specifically
acknowledges that it shall not be unreasonable for Landlord to withhold approval
of any proposed contractor or subcontractor of Tenant on the grounds that
Landlord reasonably believes that the performance of work in the Building by
such contractor or subcontractor could result in labor disputes with Landlord’s
own contractors or Building employees of Landlord or Landlord’s contractors.
Landlord may, at any time during the Term, require Tenant to remove any or all
Alterations made without Landlord’s consent (if Landlord’s consent is required
by this Section 10) or otherwise made in material violation of any of the
provisions of this Section 10. In no event shall Landlord be required to consent
to any Alterations that would, in Landlord’s reasonable good faith opinion,
adversely affect the utility or value of the Premises or the Building for future
tenants, that would alter the exterior appearance of the Building, that would be
of a structural nature, that could adversely affect the plumbing, mechanical, or
electrical systems servicing the Facility, that would be excessively expensive
to remove (unless Tenant expressly agrees, upon Landlord’s request, to remove
the same upon the expiration or sooner termination of this Lease), or that would
otherwise be prohibited under this Lease. All permitted Alterations shall be
made in conformity with the requirements of Subsection 10.2 below. Once any such
Alterations have been completed, whether prior to or during the Term, they shall
thereafter be included in the designation of the retrofit work. Notwithstanding
anything to the contrary in this Section 10.1.1, Tenant shall not be obligated
to remove any Alterations to the Phase II Premises constructed pursuant to the
Sublease except those Alterations relating to the server room (except for server
room walls, which may remain) including, without limitation, any supplemental
HVAC and related electrical and or supplemental fire/life safety systems, unless
and to the extent that such Alterations were further modified as an “alteration
to the Alteration” following the expiration of the term of the Sublease but
prior to the termination of this Lease. Additionally, Tenant shall be obligated
to remove all telephonic and data cabling at the end of the Term of the Lease
for both the Phase 1 and Phase II Premises.

10.1.2 The foregoing notwithstanding, Tenant shall have the right, without
Landlord’s consent, to make any Alteration where all of the following conditions
are met: (i) the Alteration is decorative in nature (such as paint, carpet or
other wall or floor finishes, movable partitions or other such work),
(ii) Tenant complies with Landlord’s operating procedures, as provided from time
to time from Landlord to Tenant in writing, for notice of the commencement of
any such Alteration (which may, for example, be as limited as telephonic notice
to Building security for minor decorative alterations or two (2)

 

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business days’ notice for installation of carpet where scheduling of the freight
elevator or loading docks might be required), (iii) such Alteration does not
negatively affect the Building’s electrical, mechanical, life safety, plumbing,
security, or HVAC systems or other Base Building Systems or any other portion of
the Base Building or any part of the Building other than the Premises, (iv) the
work will be performed in a workman-like manner and in accordance with all Laws,
and (v) the total cost of all such work performed without Landlord’s consent
(excluding the cost of cosmetic alterations, which shall include the cost of
paint and carpet) shall not exceed $25,000 in any 12-month period during the
Term. At the time Tenant notifies Landlord of any such work, Tenant shall give
Landlord a copy of Tenant’s plans for the work, if any have been prepared. If
the Alterations are of such a nature that formal plans will not be prepared or
are otherwise not required for the work, Tenant shall provide Landlord with a
reasonably specific description of the work.

10.2 Installation of Alterations. Any Alterations installed by Tenant during the
Term shall be done in strict compliance with all of the following requirements:

10.2.1 Approval. No such work requiring Landlord’s consent shall proceed without
Landlord’s prior written approval, which shall not be unreasonably withheld or
delayed, of (a) Tenant’s contractor(s); (b) certificates of insurance from a
company or companies licensed in California with a policy holders’ rating of A-
and financial rating of not less than X as designated by Best’s Insurance
Reports, furnished to Landlord by Tenant’s contractor, evidencing combined
single limit bodily injury and property damage insurance covering comprehensive
or commercial general liability and automobile liability in an amount reasonably
determined by Landlord given the nature and scope of such alterations (and which
in no event shall be less than Five Hundred Thousand Dollars ($500,000) per
occurrence and general aggregate) and endorsed to show Landlord, Landlord’s
property manager, and each constituent general partner of Landlord (if Landlord
is a partnership) as additional insureds, and for workers’ compensation as
required by law, endorsed to show a waiver of subrogation by the insurer to any
claims Tenant’s contractor may have against Landlord (provided, however, nothing
in this Subsection 10.2.1 shall release Tenant of its other insurance
obligations hereunder); and (c) detailed plans and specifications for such work.
Any material changes in, deviations from, modifications of, or amendments to the
approved plans and specifications shall also require Landlord’s prior written
approval. Any approval to be given by Landlord under this Subsection 10.2.1
shall not be unreasonably withheld and either be given or denied within ten
(10) days of Tenant’s written request therefore; provided, however, that, to the
extent Landlord shall not grant its approval, Landlord shall specify in writing
its reasons therefor.

10.2.2 Coordination. Tenant shall cause its contractor(s) to coordinate with
Landlord’s building management all construction and installation activities
covered by this Subsection 10.2. All such work shall be done in accordance with
Landlord’s standard rules and regulations for construction in the Building (the
“Construction Rules”) (attached hereto as Exhibit H) in a skillful and first
class workmanlike manner, consistent with the best practices and standards of
the construction industry, and shall be pursued diligently and continuously
until completed, always in material conformity with the approved plans and
specifications. All materials, equipment, and articles incorporated into the
Alterations shall be new, and of recent manufacture, and of the most suitable
grade for the purpose intended.

10.2.3 Permit. No Alterations shall be commenced without Tenant first having
obtained a valid building permit and/or all other permits or licenses required
to be obtained prior to commencement of such Alterations, copies of which shall
be furnished to Landlord before the work is commenced. Upon completion, those
permits which are not required prior to commencement of such Alterations shall
be obtained, and a copy of such permits shall be provided to Landlord. Any work
not acceptable to any governmental authority or agency having or exercising
jurisdiction over such work shall be promptly replaced and corrected at Tenant’s
expense. No work for which Landlord’s consent is required shall commence until
and unless Landlord has approved plans and specifications and the schedule for
the performance of such Alterations.

 

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10.2.4 Reimbursement. Tenant shall reimburse Landlord for any reasonable actual
out-of-pocket third-party expense incurred by Landlord in reviewing and
approving the plans and specifications (and any modifications thereto) for such
work or the work itself within thirty (30) days after Tenant’s receipt of
Landlord’s invoice therefor, not to exceed five percent (5%) of the cost of the
work in connection with the Alterations; provided that such expense shall be
based on the complexity of the plans, the level of engineering to be reviewed,
and the cost of such Alteration. Landlord agrees to require only such review of
such plans as is required under customary industry practice.

10.2.5 Oversight. Landlord may, to the extent appropriate, supply Tenant with
the Building regulations and procedures for working in areas where there is a
risk of coming into contact with materials or Base Building Systems that, if not
properly handled, could cause health or safety risks or that could damage the
Base Building Systems and/or the Building. Tenant shall cause its contractors,
at Tenant’s sole cost and expense, strictly to comply with all such Building
regulations and procedures reasonably established and uniformly applied by
Landlord and with all applicable Laws. Landlord shall have the right at all
times to monitor the work for compliance with the Building regulations and any
applicable Laws. If Landlord determines that any applicable Law or any Building
regulations and/or procedures are not being strictly to complied with, Landlord
may immediately require the cessation of all work being performed in or around
the Premises until such time as Landlord is reasonably satisfied that the
applicable Laws and Building regulations and procedures will be observed.
Neither Landlord’s review and approval of the plans, specifications, and working
drawings nor Landlord’s monitoring of any work in or around the Premises shall
create any responsibility or liability on the part of Landlord for their
completeness, design sufficiency, or compliance with applicable Laws or with the
Building regulations and procedures nor shall any such review, approval, or
monitoring by Landlord be deemed to constitute a waiver by Landlord of its right
to require strict compliance with such Laws, regulations, or procedures, nor
shall such monitoring relieve Tenant from any liabilities relating to such work.

10.2.6 Plans. Upon completion of any Alterations for which Landlord’s written
consent shall have been required under the provisions of this Section 10 of the
Lease, Tenant shall provide Landlord with field-grade “as built” plans, copies
of all construction contracts, and proof of payment for all labor and materials.

10.2.7 Standard Materials. Attached hereto as Exhibit I is a list of Building
standard materials. Tenant shall have the right to purchase such materials from
Landlord at Landlord’s cost without mark-up.

10.3 Retrofit Work - Treatment at End of Lease.

10.3.1 Landlord’s Property. All retrofit work (and all Alterations, upon their
completion) made by or for Tenant, whether temporary or permanent in character,
and whether made by Landlord or Tenant, shall be Landlord’s property, and shall
be surrendered to Landlord in good order, condition, and repair (ordinary wear
and tear excepted and damage caused by fire or other casualty excepted), broom
clean, upon the expiration or earlier termination of the Term, and Tenant shall
not be entitled to any compensation therefor. Unless Landlord shall have
previously stated in writing (in connection with its approval of any
Alternations) that it will require the removal of any Alteration or Tenant
Improvement at the end of the Term (in which case Tenant, at Tenant’s expense,
shall remove the same prior to the expiration of the Term and repair all damage
caused by such removal), Landlord shall not have the right to require that
Tenant remove from the Premises such retrofit work and Alterations (or such
portion thereof as Landlord has not required to be removed). Any damage or
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Premises or any retrofit work that could have been prevented by good maintenance
practices shall not be deemed to be ordinary wear and tear. The foregoing
notwithstanding, in no event shall Landlord, pursuant to the foregoing
provisions of this Subsection 10.3.1, require removal of any retrofit work or
Alterations that the tenant next taking possession of the Premises desires to
remain in the Premises or that constitute “Standard Office Improvements.” As
used herein, the term “Standard Office Improvements” shall include any tenant
improvements that can be removed and disposed of at a cost not materially
greater than the cost of removing and disposing of ordinary and customary tenant
improvements for general office use. In no event, however, shall “Standard
Office Improvements” be deemed to include any interior stairwells, shower
installations, raised computer flooring, data centers, telephone switch rooms
(other than those included as part of Base Building), ceramic tile floor
coverings, heat pumps, special life safety installations, cafeterias, or vaults.

10.3.2 Personal Property. All of Tenant’s Personal Property located in the
Premises and all trash and debris, shall be completely removed by Tenant prior
to the expiration of the Term pursuant to the Construction Rules; provided,
however, that Tenant shall repair all damage caused by such removal prior to the
expiration of the Term, and provided further, Landlord shall store at Tenant’s
sole cost and expense any of Tenant’s Personal Property not so removed during
the thirty (30) day period following the expiration of the Term. To the extent
that Landlord provides Tenant with five business days’ notice of Landlord’s
intention to do same, after the expiration of the thirty-day storage period,
Landlord may retain or in any manner dispose of said Personal Property not so
removed, without liability to Tenant.

10.3.3 Damages. Tenant shall reimburse Landlord upon written demand for any and
all reasonable costs and losses (but not lost rents and other consequential
damages) incurred by Landlord as a result any failure by Tenant to surrender the
Premises in the condition required hereunder.

10.4 Other Improvements in the Building. If as a result of any Alterations or as
a result of Tenant’s unique and specific use of the Premises (other than as
general office or accounting and consulting firm), Landlord shall be required by
any applicable Law to make other improvements (including, without limitation,
upgrading of installations of life safety systems or compliance with standards
for handicapped persons) in or upon the Premises or any other portion of the
Building or Facility, then Landlord shall have the right to charge Tenant for
the cost of such other improvements; provided, however, that Landlord shall
endeavor to notify Tenant of such other improvements at the time Landlord
approves of such Alterations.

 

11. REPAIR OBLIGATIONS.

11.1 Tenant’s Obligations. Excepting those maintenance, repair and restoration
obligations that have been expressly delegated to Landlord under other
provisions of this Lease, Tenant, at its sole cost and expense, shall keep the
Premises and every part thereof in good, clean, pest-free, and sanitary
condition and repair at all times during the Term. All damage, injury or
breakage to any part or portion of the Premises or the Facility caused by the
willful or negligent act or omission of Tenant which such negligent act or
omission is not insured or required to be insured by either party under this
Lease, any of its Affiliates, constituent partners, subtenants or licensees, or
agents, or any of their respective officers, directors, trustees, employees, and
licensees (collectively, the “Tenant Parties”), and any contractor, invitee,
visitor, or customer of any Tenant Party (a “Tenant Invitee”) shall be promptly
repaired at Tenant’s sole cost and expense, to the reasonable satisfaction of
Landlord; provided, however, that Tenant shall be entitled to receive
reimbursement for such expense to the extent that the cost of any such repair is
covered by insurance obtained by Landlord as part of Operating Expenses. If
Tenant fails to perform any repair obligation when required under this Lease,
then Landlord shall have the right to perform such repair work and such repair
work required as a result of Tenant’s damage to the Base Building or a Base
Building item at Tenant’s expense, provided that, except in cases of an
emergency, Landlord shall have

 

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given Tenant at least ten (10) business days’ prior written notice of Tenant’s
failure to perform such repair and (a) Tenant shall have failed to complete such
repairs prior to the expiration of such notice period or (b) if such repairs
could not be completed within such notice period, Tenant shall have failed to
commence such repairs or to diligently prosecute the same to completion after
having commenced the repairs within such period. Tenant shall upon written
demand reimburse Landlord for all uninsured costs incurred by Landlord as a
result of any breach of Tenant’s maintenance and repair obligations under this
Section. Tenant shall be solely responsible for the design and function of all
of the retrofit work, whether or not installed by Landlord at Tenant’s request.
Except to the extent otherwise expressly provided in Subsection 23.6.1 below or
elsewhere in this Lease, Tenant waives all rights to make repairs to the
Premises or to the Facility at the expense of Landlord, or to deduct the cost of
such repairs from any payment owed to Landlord under this Lease.

11.2 Landlord’s Obligations.

(a) Except to the extent otherwise expressly provided elsewhere in this Lease,
and excluding any responsibilities expressly delegated to Tenant elsewhere in
this Lease, Landlord shall keep the Facility and Building, including the Common
Areas and the Base Building Systems (including the above-ceiling distribution
thereof, the cost of which above-ceiling distribution repairs shall be included
as part of Operating Expenses, the mechanical rooms and the stairwells
(exclusive of Tenant’s security system)) in good condition and repair, in
accordance with standards generally comparable to those observed in Comparable
Buildings (but in no event shall such standards fall below those standards set
forth in Exhibit D attached hereto), and in compliance all with applicable Laws,
and so as not to deprive Tenant of its use and enjoyment, or materially
adversely impair Tenant in its herein-allowed use and enjoyment, of the Premises
or the Common Areas. Landlord shall not, however, be obligated to maintain,
repair, or replace any of the following within the Premises: interior windows,
window coverings, doors, door hardware.

(b) Subject to Landlord’s right to reimbursement of certain costs or expenses
under other provisions of this Lease, Landlord shall perform all needed repairs
to and replacements of the exterior windows in the Premises; provided, however,
that Tenant shall reimburse Landlord for the full cost of repairs or
replacements needed because of damage caused by the gross negligence or willful
misconduct of Tenant or any Tenant Party (only to the extent that the proceeds
(if any) of insurance payable under the applicable policy shall be
insufficient). Also, Landlord shall not be obligated to perform repairs for
which Tenant has expressly assumed responsibility under other provisions of this
Lease. Tenant hereby acknowledges that the foregoing description of certain
obligations and rights of Landlord is not intended to limit or restrict
Landlord’s rights under other provisions of this Lease to reimbursement for
costs and expenses incurred in connection with such matters. Notwithstanding
anything to the contrary contained in this Subsection 11.2, in the event
Landlord, for any reason, fails to commence and diligently pursue completion of
any repairs required to be made by Landlord under this Section 11 within a
period of thirty (30) days after Tenant delivers written notice to Landlord of
the need for such repairs, (a) Rent shall be equitably abated commencing upon
the date of Tenant’s delivery of Tenant’s notice to Landlord regarding
Landlord’s failure to commence and/or diligently pursue such repairs in such
thirty (30) day period, and (b) Tenant shall have the right to make such repairs
which are non-structural, which do not affect the exterior of the Building and
which do not adversely affect the Base Building’s Systems; provided, however,
that in the event any such failure by Landlord to perform required repairs
constitutes an Adverse Condition (as defined in Subsection 17.4 below), Tenant’s
abatement rights shall be governed by Subsection 17.4.

(c) In the event Tenant exercises its right to repair as set forth in the
immediately preceding sentence, Tenant shall provide to Landlord (or to any
“Qualified First Mortgagee,” which shall mean and refer to any first mortgagee
of the Building, the identity and address of which has

 

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been provided to Tenant in writing prior thereto) with a reasonably
particularized invoice for such repair. To the extent Landlord agrees with such
invoice or does not provide Tenant with written notice of its dispute with such
invoice, Landlord shall pay such invoice within thirty (30) days of receipt of
same. To the extent Landlord fails to make such payment and fails to provide a
written objection defending such failure within such thirty (30) day period,
Tenant shall have the right to offset the amount of such invoice plus interest
at the Interest Rate against Rent; provided, however, that it is hereby deemed
in this Lease that, with respect to any right of offset in favor of Tenant,
notices which must be delivered to Landlord must also be delivered to any
Qualified First Mortgagee, which Qualified First Mortgagee shall have the right
to act on behalf of Landlord if Landlord fails to respond as required of
Landlord in this Subsection 11.2. If, within thirty (30) days of Landlord’s
receipt of such invoice Landlord provides Tenant with written notice of its
dispute of such invoice, the matter shall be referred to arbitration in
accordance with the Exhibit F attached to this Lease. Any award in favor of
Tenant not paid to Tenant within thirty (30) days of Landlord’s receipt thereof
shall entitle Tenant to offset the award against the next due payment of Rent.

 

12. LIENS.

Tenant shall keep the Premises, the Building, and the rest of the Facility free
from liens arising out of any work or materials actually or allegedly performed
or furnished, or obligations incurred, by or for Tenant (other than the work to
be performed by Landlord pursuant to Exhibit B). Tenant agrees to indemnify and
hold Landlord harmless from and against any and all claims for mechanics’,
materialmen’s or other liens in connection with any Alterations, repairs, or any
work performed, materials furnished, or obligations incurred by or for Tenant
other than the work performed by Landlord pursuant to Exhibit B. In the event
any such lien is filed, and Tenant has not provided Landlord with a lien release
bond or other adequate security therefor, as provided below, Landlord may, upon
thirty (30) days’ written notice to Tenant, without waiving Landlord’s rights
based on such breach by Tenant and without releasing Tenant from any obligations
hereunder, pay and satisfy the same and in such event the sums so paid by
Landlord shall be due and payable by Tenant immediately without notice or
demand, with interest from the date paid by Landlord through the date Tenant
pays Landlord, at an interest rate equal to the Reference Rate (as defined in
Subsection 6.3.1 above) plus three percent (3%). Tenant shall nevertheless have
the right to contest or object to the amount or validity of any lien against the
Premises or the Building arising out of work performed by or on behalf of Tenant
by appropriate legal proceedings so long as (a) Tenant notifies Landlord of
Tenant’s intent to contest such lien within thirty (30) days after Tenant has
notice of the imposition thereof, (b) Tenant, within such thirty (30) day
period, furnishes Landlord with and arranges for recordation of a lien release
bond complying with the requirements of Cal. Civil Code Section 3143 (or any
successor statute) so as to release the lien from the Premises and the balance
of the Facility upon recordation of such bond, or with other security reasonably
satisfactory to Landlord to satisfy such claim or lien, (c) upon any final
determination of such contest which is not appealable or is not being appealed
by Tenant, Tenant pays the amount of such claim or lien then due (provided that
Tenant shall at its sole cost post any bond required to pursue an appeal), and
(d) Tenant’s indemnity set forth above in this Section 12 shall apply to all
claims arising in connection with such contest or objection.

 

13. SIGNS; NAMES OF BUILDING AND FACILITY.

Except for the signage provided for in Section 51 of this Lease, Tenant shall
not place any other logo, sign, advertisement, announcement, warning, or notice
upon or in front of the Premises or any Common Areas without Landlord’s prior
written consent, which consent may be withheld in Landlord’s sole and absolute
(but good faith) discretion. Tenant shall not use any insignia or logotype of
the Building or Facility for any purpose outside of those purposes allowed to
Tenant in said Section 51. Tenant shall not use any picture of the Building or
Facility in its advertising or stationery or in any other manner. Landlord
expressly reserves the right, in Landlord’s sole and absolute discretion, at any
time to

 

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change the name, insignia, logotype, or street address of the Building or the
Facility without in any manner being liable to Tenant; provided, however, that
Landlord shall reimburse Tenant for its reasonable cost of replacing its then
current supply of stationery, business cards, and envelopes.

 

14. ASSIGNMENT AND SUBLETTING.

14.1 “Transfer” Defined. Subject to Subsection 14.10 below, as used herein, the
term “Transfer” shall mean any assignment of this Lease (including, without
limitation, assignment by operation of law—e.g., death of an individual tenant
or merger, dissolution, consolidation, or other reorganization of a corporate
tenant), subletting of all or any part of the Premises, or transfer of
possession, or right of possession or contingent right of possession of all or
any portion of the Premises, including without limitation, concession, mortgage,
encumbrance, devise, hypothecation, agency, or franchise agreement, or to suffer
any other person (the Tenant Parties excepted) to occupy or use the said
Premises or any portion thereof. If Tenant is a corporation that is not a public
corporation, or is an unincorporated association or partnership, or if Tenant
consists of more than one party, the transfer, assignment (including, without
limitation, assignment by operation of law), or hypothecation of any stock of or
interest in Tenant in the aggregate in excess of fifty percent (50%) shall also
be deemed to be a “Transfer.” If Tenant is a partnership or consists of more
than one party, then any of the foregoing events with respect to any such party
comprising Tenant, or with respect to any constituent general partner of Tenant
or any such party, shall also be deemed to be a “Transfer.”

14.2 No Transfer Without Consent. Tenant shall not, either voluntarily or by
operation of law or otherwise, suffer a Transfer without the prior written
consent of Landlord, which consent shall not be unreasonably withheld, except as
otherwise expressly provided below. Landlord’s consent to one Transfer shall not
be deemed to be a consent to any subsequent Transfer; nor shall Landlord’s
consent constitute an acknowledgment that no default then exists of the
obligations to be performed by Tenant under this Lease; nor shall such consent
be deemed a waiver of any then existing default, except as may be otherwise
stated in writing by Landlord at the time; nor shall Landlord’s acceptance of
Rent from any person be deemed a waiver by Landlord of any provision of this
Section 14. If Landlord’s approval or consent for any agreement or instrument is
required hereunder, then no amendment or modification shall be made thereto
without Landlord’s prior consent. Any Transfer that is not in compliance with
the provisions of this Section 14 shall be voidable at Landlord’s election.

14.3 Procedure for Assignment and Subletting/Landlord’s Recapture Rights. Tenant
shall advise Landlord by written notice of (a) Tenant’s intent to make a
Transfer, (b) the name of the proposed transferee, and evidence reasonably
satisfactory to Landlord that such proposed transferee will use the Premises in
compliance with the use provisions of this Lease and is comparable in reputation
and stature to the other tenants then leasing comparable space in the Facility
or in Comparable Buildings (such evidence shall include, without limitation,
(i) a description of the proposed transferee’s business background and
experience, and (ii) such other information as Landlord may reasonably request
concerning such transferee, but Landlord shall not request information
concerning the financial condition of such transferee), and (c) the terms of the
proposed assignment or subletting (including the financial terms and the
intended use of the Premises), together with a copy of the proposed Transfer
documents. Landlord need not commence its review of any proposed Transfer, or
respond to any request by Tenant with respect to such, unless and until Landlord
has received all of the foregoing documentation from Tenant. Landlord shall,
within fifteen (15) days, in the event that Tenant is seeking Landlord’s consent
for a sublease of a portion of the Premises which is not subject to Landlord’s
right of recapture (as further described below) or twenty-five (25) days, in the
event that Tenant is seeking Landlord’s consent for a sublease of a portion of
the Premises which is subject to Landlord’s right of recapture (as further
described below), after receipt of such notice and documentation, and any
additional information reasonably requested by Landlord, elect one of the
following:

(i) Consent to such proposed Transfer;

 

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(ii) Refuse such consent, which refusal shall be on reasonable grounds, subject
to the provisions of Subsection 14.4 below and shall be provided to Tenant in
writing and such writing shall state the grounds for such refusal; or

(iii) Elect to terminate this Lease in the event of an assignment other than to
a Permitted Affiliate (as such term is defined in Subsection 14.10 below), or in
the case of a sublease, terminate this Lease as to the portion of the Premises
proposed to be sublet for the proposed term of the sublease (such election may
be exercised for any reason whatsoever, including, without limitation, the
intent of Landlord to enter into a direct lease with the proposed assignee or
subtenant); provided, however, that Landlord shall only have such termination
option if the proposed Transfer is for the remainder of the unexpired Term and
is for at least one full floor of the Premises. Also, in the event that Tenant
proposes to transfer a portion of the Premises contiguous to space leased by
Tenant to a “business partner” (i.e., a person or entity with whom Tenant has an
ongoing contractual relationship evidenced by a written contract, a copy of
which shall be provided to Landlord) or Permitted Affiliate (as defined in
Subsection 14.10 below), Landlord shall not have such termination option with
respect to such portion of the Premises. If Landlord exercises such termination
option, then (a) this Lease shall terminate as to all or such portion, as the
case may be, of the Premises effective as of the date on which the proposed
Transfer was intended to have become effective, (b) Tenant shall vacate such
portion of the Premises prior to such date, and (c) Landlord and Tenant shall
have no further liability to each other under this Lease from and after such
date with respect to such space, except as otherwise provided in this Section
and in Section 41 (Survival of Certain Rights and Obligations). If this Lease is
terminated as to less than all of the Premises pursuant to the preceding
sentence, the Rent, including, without limitation, Tenant’s Percentage Share,
under this Lease shall be equitably adjusted by Landlord on the basis that the
rentable area of the portion of the Premises remaining bears to the rentable
area of the entire Premises. No failure of Landlord to exercise its termination
option hereunder shall be deemed a waiver of the right to terminate this Lease
subsequently (with respect to a subsequent Transfer) in accordance with the
terms hereof, as it is intended that this option to terminate shall continue to
exist during the entire Term.

14.4 Conditions to Approval.

14.4.1 Reasonable Standards. It is understood and agreed that, without limiting
Landlord’s right of consent as provided herein, Landlord’s withholding consent
shall be deemed reasonable if the proposed assignment or sublease fails to meet
any one or more of the following criteria: (a) neither the proposed Transfer nor
the proposed use of the Premises by the proposed transferee shall conflict with
or result in a breach of Subsections 3.2 (Restriction on Use), or 8.2 (Consent
Required for Hazardous Substances), or any other provision of this Lease, nor
shall it violate any exclusivity arrangement that Landlord may then have with
any other tenant of the Facility which Landlord entered into prior to the date
the Tenant requested Landlord’s consent for such proposed transfer; (b) the
proposed transferee’s proposed use of space in the Premises shall not be for an
office or facility of any governmental agency or authority (unless reasonably
approved by Landlord), or an embassy or consulate or similar office; (c) the
proposed transferee’s use of space in the Premises is for a school or classroom
use, an entertainment, sports or recreation facility, retail sales to the
public, medical offices, or a personnel or employment agency, telephone “boiler
rooms,” or a business where the general public routinely makes payments,
receives cash or checks or processes applications for permits or registrations;
(d) the proposed transferee shall be of a reputation and stature consistent with
the character of the Comparable Building as reflected by the then existing
tenants of the Comparable Building which respect to comparable space;
(e) neither the proposed transferee nor its use of the Premises shall be subject
to

 

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compliance with additional requirements beyond such requirements as are then
already applicable to the party desiring to assign or sublease of the Law
(including related regulations) commonly known as the “Americans with
Disabilities Act” or any similar federal, state, or local Law now or hereafter
in effect, unless the proposed transferee or Tenant shall have expressly agreed
to bear all costs related to compliance with such additional requirements;
(f) the proposed transferee shall not be a party for which Landlord’s consent is
required under Subsection 14.7 below; and (g) if the proposed transferee would
be subleasing less than all of the Premises included in any particular floor,
there shall not be (following consummation of the proposed sublease) more than
five (5) “Occupants” on such floor. For purposes of the preceding sentence, an
“Occupant” of a floor shall include Tenant (if Tenant is occupying any portion
of the floor through personnel of Tenant or any Affiliate), any of Tenant’s
subtenants or sub-subtenants (other than Affiliates) occupying any space on said
floor, and in the case of any floor of which Tenant leases only a portion, any
other tenant (and any of its subtenants or sub-subtenants) of space on such
floor.

14.4.2 Fees. In the event that Landlord shall consent to a proposed Transfer, or
shall reasonably disapprove a proposed Transfer (other than in connection with
an exercise of Landlord’s recapture rights under Subsection 14.3), pursuant to
the provisions of this Section 14, Tenant shall pay, within thirty (30) days of
Landlord’s demand therefor, Landlord’s reasonable, actual processing costs and
attorneys’ fees (which shall be either the reasonable, actual costs of
Landlord’s in-house counsel or the reasonable, actual costs of Landlord’s
outside counsel, but not both) incurred in connection with such matter.

14.5 Landlord’s Right to Bonus Rentals.

14.5.1 Payment. In the event of a Transfer of this Lease, then Tenant shall pay
to Landlord, pursuant to Subsection 14.5.2 below, fifty percent (50%) of the
“Rent Differential” received by Tenant in connection with or in respect to such
Transfer. For purposes of this Subsection, the following definitions shall
apply:

(a) the term “Rent Differential” shall mean the excess of (i) any and all
“Proceeds” payable to Tenant over (ii) Tenant’s “Allowed Costs”;

(b) the term “Proceeds” shall mean any and all fees, rents, charges, payments,
or other sums or consideration attributable to the use of the Premises,
including payments in excess of market value as reasonably determined by Tenant
for Tenant’s trade fixtures, equipment and furnishings payable or deliverable to
Tenant in connection with the Transfer; and

(c) the term “Allowed Costs” shall mean (i) reasonable attorneys’ fees and
reasonable broker’s commissions and reasonable advertising and marketing costs
and fees paid by Tenant to attorneys or brokers in connection with such
assignment or subletting, plus (ii) any other reasonable out-of-pocket
concessions, including the reasonable costs of constructing any tenant
improvements (including any demising walls and further including lost rental
during the period of such construction (up to a period of 60 days) if no Rent is
being collected by Tenant for such period of time), planning allowances, moving
allowances and lease takeover payments. Tenant is required to furnish to such
assignee or subtenant, plus (iii) in the case of an assignment, all of the Rent,
or in the case of a subletting, the proportionate amount of the Rent allocable
to the portion of the Term and portion of the Premises (if less than all)
covered by such subletting, as reasonably determined by Landlord and Tenant.

14.5.2 Recovery. In the event the Proceeds are paid in installments (e.g.,
monthly subrent), then the Allowed Costs shall be deducted as they are incurred,
and Landlord’s share of the Rent Differential shall be payable at the same time
such installment payments are made after Tenant recovers one hundred percent
(100%) of the Allowed Costs.

 

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14.5.3 Good Faith. Tenant covenants that any allocation of payments or other
consideration payable or deliverable to Tenant in connection with any subletting
of the Premises or assignment of this Lease shall be made in good faith and not
with a purpose to avoid Tenant’s obligation to pay 50% of the Rent Differential
to Landlord.

14.5.4 Arbitration. Should the parties fail to reach agreement concerning the
amount of any Rent Differential payable to Landlord pursuant to this
Subsection 14.5, either party may elect to submit the dispute to arbitration in
accordance with the provisions of Exhibit F attached hereto.

14.6 Joint and Several Obligations. Each permitted subtenant or assignee shall
assume all obligations of Tenant under this Lease with respect to the Premises,
or such portion thereof as may be covered by the sublease or assignment entered
into by such party, and, if the Original Tenant is not conducting business in
any portion of the Building, such permitted subtenant or assignee shall, if
Landlord so elects, make direct payment to Landlord of the Rent in the amount
set forth in the sublease or assignment, unless otherwise agreed in writing by
the parties thereto, and the performance of all of the terms, covenants,
conditions, and agreements herein contained on Tenant’s part to be performed
with respect to the Premises or such subleased space, as the case may be. No
Transfer shall be valid and no transferee shall take possession of the Premises
or any part thereof unless, within ten (10) days after the execution of the
documentary evidence thereof, Tenant shall deliver to Landlord a duly executed
duplicate original of the Transfer instrument in a form reasonably satisfactory
to Landlord that (a) provides that the transferee assumes Tenant’s obligations
for the payment of Rent to the extent set forth in the sublease or assignment
(or the allocable portion thereof, in the case of a sublease of a portion of the
Premises) and for the full and faithful observance and performance of the
covenants, terms and conditions contained herein, applicable to the Premises in
the event of an assignment or applicable to the subleased space in the event of
a sublease, (b) provides that the transferee will, at Landlord’s election,
attorn directly to Landlord if Landlord will recognize the sublease or
assignment, as the case may be, and not disturb the subtenant’s or assignee’s,
as the case may be, right to possession of the Premises and provide all services
required by this Lease in the event Tenant’s Lease is terminated for any reason
on the terms set forth in the instrument of transfer, and (c) contains such
other non-financial assurances as is then customarily required by Landlord’s
first mortgage lenders, the form for which will be provided to Tenant on
request. The failure or refusal of a transferee to execute such an instrument of
assumption shall not release or discharge the transferee from its obligations
set forth above.

14.7 Non-Competition. Notwithstanding anything in this Section 14 to the
contrary, in no event shall Tenant, without Landlord’s prior consent, which
consent, except as provided below, may be withheld in Landlord’s sole and
absolute discretion, transfer all or a portion of the Premises or this Lease to
any then tenant or occupant of space in the Building, with whom Landlord (or
Landlord’s broker or representative) is engaged in active lease negotiations or
discussions or with whom Landlord (or Landlord’s broker or representative) has
exchanged written correspondence regarding lease negotiations or discussions;
provided, however, if Landlord does not then have in the Building space
available that would generally meet the size and location requirements of such
existing tenant and Landlord also does not expect to have such space available
by the proposed commencement date under Tenant’s desired sublease or assignment
of Lease, then Landlord shall not unreasonably withhold, condition or delay such
consent.

14.8 No Merger. The voluntary or other surrender of this Lease by Tenant or
mutual cancellation of this Lease shall not work a merger. At the option of
Landlord, any such surrender or cancellation of this Lease shall either
terminate any and all then existing subleases or subtenancies or operate as an
assignment to Landlord of Tenant’s interest in any and all such subleases or
subtenancies.

 

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14.9 Landlord’s Right to Assign. Landlord shall have the right to sell,
encumber, convey, transfer, and/or assign any of its rights and obligations
under this Lease (in connection with a transfer of all or any portion of
Landlord’s interest in the Facility), provided, however, that no sale,
conveyance, transfer, or assignment (other than an arms-length foreclosure or
deed in lieu of foreclosure) shall relieve Landlord of its obligations hereunder
unless and until the transferee shall have assumed and agreed (in writing) to
perform all of Landlord’s obligations under the Lease. Notwithstanding the
foregoing, any offset rights granted to Tenant in this Lease shall not be
defeated by such transfer unless Tenant agrees to the contrary in a written
instrument executed and delivered under the terms of a Subordination,
Non-Disturbance and Attornment Agreement required by the provisions of
Section 21 of this Lease. Landlord shall not be relieved of any obligations that
shall have accrued with respect to the period prior to the effective date of
such transfer, but to the extent so provided in Subsection 23.6.2 below, Tenant
shall look solely to the then interest of Landlord in the Facility (e.g., a
mortgage interest, in the case of a seller financed sale of the Facility) and
the proceeds of such transfer (if any) for the satisfaction of any remedy of
Tenant for failure to perform such obligations.

14.10 Non-Transfers. Notwithstanding the foregoing provisions of this Section 14
to the contrary, the following transfers (each a “Permitted Transfer”) shall not
constitute an assignment or sublease requiring the consent or approval of
Landlord under this Lease, and will not extend any Rent Differential right or
termination right or option to Landlord:

(a) to an affiliate of Tenant; that is, any entity which controls, is controlled
by, or is under common control with, Tenant;

(b) to an entity resulting from a reorganization of or merger or consolidation
with Tenant or a successor resulting from a legislative act;

(c) to an entity which acquires all or substantially all of the assets of
Tenant’s business for good business purpose and not principally for the purpose
of transferring this Lease in contravention of the restrictions contained
herein; or

(d) of any stock or other ownership or partnership interest in Tenant, or any
affiliate of Tenant, whose stock or other ownership or partnership or membership
interest is publicly traded on any national, regional or other stock exchange or
“over-the-counter” market;

provided, that Tenant notifies Landlord of any such assignment or sublease and
promptly supplies Landlord with all of the documentation described in
Subsection 14.3 above. Any such transferee or affiliate described in this
Subsection 14.10 shall be referred to in this Lease as a “Permitted Affiliate.”
“Control,” for the purposes hereof, shall mean the power to direct the
management policies of an entity.

 

15. INDEMNIFICATION; INSURANCE; ALLOCATION OF RISK.

15.1 Indemnification.

15.1.1 Tenant’s Indemnity. Except as to any Claims (as defined below) from which
Landlord releases Tenant from liability or indemnifies Tenant pursuant to
express provisions of this Lease, Tenant shall at its expense defend (by counsel
reasonably approved by Landlord), protect, indemnify, and hold harmless Landlord
and Landlord’s subsidiaries, affiliates, constituent partners, and agents, their
respective directors, officers, stockholders, trustees, employees, successors,
and assigns

 

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(collectively, the “Landlord Parties”) from and against any and all Claims for
injury (including death and physical, psychological, and emotional injuries) to
any person or damage to any property whatsoever, to the extent arising from or
caused by (whether in whole or in part, directly or indirectly) any of the
following occurrences or circumstances:

(a) any occurrence in, on, or about any part of the Facility, including the
Premises, to the extent such injury or damage shall be caused by the negligent
act or omission of Tenant or any Tenant Parties or any of their respective
contractors or subcontractors; or

(b) any breach of the obligations of Tenant under Subsection 8.4 above.

As used herein, the term “Claims” shall mean claims, liabilities, penalties,
fines, judgments, forfeitures, losses, expenses (including, without limitation,
reasonable attorneys’ fees, consultant fees, expert fees, and court costs), and
costs, including, without limitation, and whether foreseeable or unforeseeable,
any and all costs incurred in connection with any investigation of site
conditions, and any and all costs of any required or necessary repair, cleanup,
detoxification, decontamination, or other remedial work concerning the Facility.

15.1.2 Landlord’s Indemnity. Except as to any Claims from which Tenant releases
Landlord from liability or indemnifies Landlord pursuant to express provisions
of this Lease, Landlord shall at its expense defend (by counsel reasonably
approved by Tenant), protect, indemnify, and hold harmless Tenant and the Tenant
Parties from and against any and all Claims for injury (including death and
physical, psychological, and emotional injuries) to any person or damage to any
property whatsoever, to the extent arising from or caused by (whether in whole
or in part, directly or indirectly) any of the following occurrences or
circumstances:

(a) any occurrence in, on, or about any part of the Facility, to the extent such
injury or damage shall be caused by the negligent act or omission of Landlord or
any Landlord Parties or their respective contractors or subcontractors; or

(b) any Hazardous Substances that Landlord or any Landlord Parties or Landlord’s
contractors or subcontractors shall have caused, permitted or authorized to be
used, analyzed, stored, transported, disposed, deposited, generated, discharged,
or released in, on, under, to, from, or about the Facility or any nearby
property.

15.1.3 Insurers Not Released. The indemnification obligations of Landlord and
Tenant hereunder are not intended to and shall not relieve any insurance carrier
of its obligations to Landlord or to Tenant (if any).

15.2 Tenant’s Insurance. Tenant shall have the following insurance obligations:

15.2.1 Liability Insurance. Tenant shall, at Tenant’s expense, obtain and keep
in force at all times during the Term, a policy of commercial general liability
insurance (including automobile liability) for occurrences in or about the
Premises or otherwise resulting from Tenant’s operations at the Facility. The
minimum limits of liability shall be a combined single limit of not less than
Five Million Dollars ($5,000,000.00) per occurrence and a deductible not greater
than Ten Thousand Dollars ($10,000.00). The policy shall protect Landlord and
the Landlord Parties as additional insureds. The policy shall also provide for
severability of interest; shall provide that an act or omission of one of the
insured or additional insureds that would void or otherwise reduce coverage
shall not void or reduce coverages as to other insured or additional insureds;
shall insure performance by Tenant of the indemnity provisions, to the extent
commercially available in commercial general liability insurance policies or for
a

 

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reasonable additional cost, with riders thereto, of this Lease; and shall afford
coverage after the Term (by separate policy or extension if necessary) for all
claims based on acts, omissions, injury or damage that occurred or arose during
the Term. The policy shall be primary coverage for Tenant and Landlord for any
liability arising out of Tenant’s and the Tenant Parties’ and Tenant Invitees’
use, occupancy or maintenance of the Premises and all areas appurtenant thereto.
The limits of said insurance shall not, however, limit any liability of Tenant
under Subsection 15.1.

15.2.2 Personal Property Insurance. Tenant shall maintain in full force and
effect on all of its fixtures, personal property, and equipment in the Premises
a policy or policies of fire and casualty insurance in “all risk” form
(including water damage) to the extent of at least ninety percent (90%) of their
replacement cost (without deduction for depreciation). No such policy shall have
a deductible (other than as to earthquake coverage, which may have a deductible
of up to Five Hundred Thousand Dollars ($500,000.00)) in a greater amount than
Thirty Thousand Dollars ($30,000.00). Tenant shall also insure in the same
manner the physical value of all its leasehold improvements, if any, in the
Premises. The “full replacement value” of the improvements to be insured under
this Subsection 15.2.2 shall be determined by the company issuing the insurance
policy at the time the policy is initially obtained and from time to time
throughout the Term. During the Term, the proceeds from any such policy or
policies of insurance shall be used for the repair or replacement of the
fixtures, equipment, and leasehold improvements so insured. Landlord shall have
no interest in said insurance, and will sign all documents necessary or proper
in connection with the settlement of any claim or loss by Tenant. All such
insurance shall contain waivers of subrogation in favor of Landlord.

15.2.3 Worker’s Compensation Insurance. Tenant shall carry and maintain Workers
Compensation as required by applicable Laws and Employer’s Liability insurance
with a limit of not less than $1,000,000.

15.2.4 Business Interruption. Subject to Tenant’s rights to self-insure under
Subsection 15.5 below, Tenant shall maintain loss of income and business
interruption insurance in such amounts as will reimburse Tenant for direct or
indirect loss of earnings attributable to all perils commonly insured against by
prudent tenants or attributable to prevention of access to the Premises or to
the Building as a result of such perils, but in no event in an amount less than
the Rent payable hereunder for six (6) months. All such insurance shall contain
waivers of subrogation in favor of Landlord; provided, however, that Tenant
shall have the right to self insure the insurance otherwise required under this
Subsection 15.2.4; provided further, however, that such self-insurance shall be
deemed to be for the full extent of the otherwise required coverage and with
full waiver of subrogation in favor of Landlord.

15.2.5 Other Coverage. During such times as Tenant is performing approved
Alterations in the Premises, Tenant shall carry such builder’s risk insurance as
Landlord may require pursuant to Subsection 10.2.5 above.

Not more frequently than every three (3) years, if, in the reasonable opinion of
Landlord’s lender or of the independent insurance consultant retained by
Landlord, the amount of public liability insurance coverage at that time is not
adequate, or additional coverages not specified above should be obtained,
Tenant, at its cost, shall increase such insurance coverage, and/or obtain such
additional coverages, as required by either Landlord’s lender or Landlord’s
insurance consultant, consistent with the then prevailing custom for new leases
of similar space in Comparable Buildings but only to the extent required of
tenants similar to Tenant for comparable space.

15.2.6 Insurance Criteria. All the insurance required to be carried by Tenant
(except Tenant’s self-insurance under Subsection 15.5 below) hereunder shall:

(a) Be issued by insurance companies that are qualified and admitted to do
business in the State of California and that carry a designation in “Best’s
Insurance Reports,” as issued from time to time throughout the Term, as follows:
Policy holders’ rating of A-; financial rating of not less than X.

 

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(b) Be issued in a form reasonably acceptable to Landlord.

(c) Contain an endorsement requiring thirty (30) days’ written notice from the
insurance company to both parties and to Landlord’s lender before cancellation
or expiration of any policy.

(d) Waive subrogation, as required by Subsections 15.2.2, 15.2.4, and 15.2.5,
with respect to property loss or damage by fire or other casualty.

(e) To the extent that Landlord shall have any repair or replacement obligations
with respect to the insured property, name Landlord and the Landlord Parties as
additional insureds (except the Worker’s Compensation Insurance) and, at
Landlord’s request, shall carry a lender’s loss payee endorsement in favor of
Landlord’s lender.

15.2.7 Evidence of Coverage. A certificate of insurance for the insurance
required to be carried by Tenant hereunder shall be delivered to Landlord prior
to Tenant’s commencing remodeling work in or taking occupancy of the Premises,
and Tenant shall keep each such policy in full force and effect throughout the
Term. Renewal policies or certificates thereof shall be delivered to Landlord at
least thirty (30) days in advance of the expiration dates of the expiring
policies.

15.2.8 Tenant Insurance Default. In the event that Tenant fails to deliver to
Landlord any liability policy under Subsection 15.2.1 above, certificate, or
renewal notice hereunder required within the prescribed time period and if such
failure continues after ten (10) days written notice thereof from Landlord to
Tenant, or if any such policy is canceled or the coverage with respect to the
Premises reduced during the Term without Landlord’s consent, Landlord may at its
option, but shall not be obligated to, obtain such insurance on behalf of Tenant
and bill Tenant, as additional rent, for the cost thereof. The provisions of
this Section 15 are for the benefit of Landlord and its lenders only and are not
nor shall they be construed to be for the benefit of any employee of Tenant, any
other tenant or occupant of the Building or the Facility, or any other person
whatsoever.

15.3 Landlord’s Insurance. Landlord shall maintain policies of insurance
covering loss of or damage to the Building in the full amount of its replacement
cost. Such policies shall provide protection (subject to reasonable deductibles)
against all perils included within the classification of fire, extended coverage
(with at least a twelve-month rent-loss rider attached and with rental abatement
insurance coverage for loss of services contemplated in Subsection 17.4 below,
(which insurance Landlord presently carries and (at a minimum) with respect to
the Premises will continue to carry so long as the same remains available)
vandalism, malicious mischief, special extended perils (all risk), sprinkler
leakage, and any other perils that Landlord in good faith deems appropriate.
Landlord shall not obtain insurance for Tenant’s trade fixtures or equipment.
Landlord shall also maintain a policy of commercial general liability insurance
with a combined single limit of not less than Ten Million Dollars ($10,000,000)
per occurrence for bodily injury and property damage, plus coverage against such
other risks as Landlord deems advisable from time to time, insuring Landlord
against liability arising out of the ownership, use, occupancy or maintenance of
the Facility and the performance by Landlord of the indemnity provisions, to the
extent commercially available in commercial general liability insurance policies
or, for a reasonable additional cost, with riders thereto, of this Lease;
provided, however, that Landlord may at its option elect to substitute for said
policy, insurance that is part of a blanket insurance

 

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policy maintained by Landlord, provided that such substituted insurance policy
has a combined single limit of not less than Twenty-Five Million Dollars
($25,000,000) allocated to the Building and conforms in all other respects with
the foregoing requirements. In addition, if Landlord determines that a majority
of landlords of Comparable Buildings do so, Landlord shall increase such
insurance coverage and/or obtain such additional coverages to the level carried
by such other landlords. All the insurance required to be carried by Landlord
hereunder shall: (a) Be issued by insurance companies that are qualified and
admitted to do business in the State of California and that carry a designation
in “Best’s Insurance Reports,” as issued from time to time throughout the Term,
as follows: Policy holders’ rating of A-; financial rating of not less than X,
and (b) Waive subrogation with respect to property loss or damage, including
Rent loss and builder’s risk coverage, by fire or other casualty as specifically
set forth in Subsection 15.5 below.

The amount of such liability coverage may be increased from time to time as
required by Landlord (but Landlord shall not increase such liability coverage to
an amount greater than that required by owners of Comparable Buildings) or
Landlord’s lender. Notwithstanding anything above to the contrary, Landlord may
self-insure the obligations set forth herein so long as (i) Landlord maintains a
net worth at least equal to 2.5 times the greater of initial replacement value
of the Facility and the replacement value of the Facility from time to time
according to its most recent audited financial statement (in accordance with
generally accepted accounting principles consistently applied), and
(ii) Landlord governs and manages its self-insurance program in a manner
consistent with programs managed by reasonable businesses. Upon request,
Landlord shall supply Tenant with evidence reasonably satisfactory to Tenant’s
of Landlord’s net worth and the satisfaction of the conditions set forth above.
If Landlord elects to self-insure, Landlord shall be responsible for any losses
or liabilities which would have been assumed by the insurance companies which
would have issued the insurance required of Landlord under this Lease. Landlord
will notify Tenant in advance of any period for which it intends to self-insure
and shall provide to confirm the satisfaction of the conditions set forth above.
For so long as Landlord self-insures, Landlord, for all applicable periods,
shall and does hereby indemnify and hold harmless Tenant and Tenant’s Parties
from and against all costs, damages or expenses (including attorney fees at the
trial and appellate levels) incurred or paid by Tenant or Tenant’s Parties as a
result of any claim customarily covered by the insurance policy provided for in
Subsection 15.3 even if such costs, damages or expenses are the result of the
fault or negligence of Landlord.

15.4 Exculpation.

15.4.1 Waiver. Landlord and Tenant release each other and Landlord Parties and
Tenant Parties, respectively, from any Claims of whatever nature for damage,
loss, or injury to the Premises, the Building, and/or the Facility, or to the
other’s property in, on, or about the Premises and the Facility, to the extent
of any insurance proceeds that are received or receivable (or that would have
been receivable but for such releasing party’s breach or default of its
obligations to carry insurance under this Lease), even if such damage, loss, or
injury shall have been caused by the fault or negligence (but not willful
misconduct) of the other party or anyone for whom such party may be responsible.
Landlord and Tenant shall each cause their respective insurance policies to
provide that the insurance company waives all right of recovery by way of
subrogation against either Landlord or Tenant in connection with any damage
covered by any policy. To the extent of any insurance proceeds actually
received, or that would have payable but for a breach of this Lease, neither
Landlord nor Tenant shall be liable to the other for any damage caused by fire
or any of the risks insured against under any insurance policy required by this
Lease. Further, except to the extent otherwise expressly provided below in this
Subsection, Tenant hereby waives all Claims against Landlord and the Landlord
Parties for any loss, theft, or damage to Tenant’s business or Personal Property
or injury (including death and physical, psychological, and emotional injuries)
to persons, in, upon or about the Premises and/or the Facility from any cause
whatsoever, including, without limitation, the active or passive negligence of
Landlord or the Landlord

 

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Parties. Without limiting the generality of the foregoing, Tenant specifically
acknowledges that such waived Claims includes injuries, losses, and damage
resulting from the following causes: Fire; smoke; explosion; falling plaster,
ceiling tiles, fixtures, or signs; broken glass; steam; gas; fumes; vapors;
odors; dust; dirt; grease; acid; oil; any other Hazardous Substance; debris;
noise; air or noise pollution; vibration; theft; breakage; vermin; electricity;
computer or electronic equipment or systems malfunction or stoppage; water;
rain; flooding; freezing; windstorm; snow; sleet; hail; frost; ice; excessive
heat or cold; sewage; sewer backup; toilet overflow; leaks or discharges from or
into the Premises or any other part of the Facility, or from any pipes,
sprinklers, appliances, equipment (including, without limitation, heating,
ventilating, and air-conditioning equipment); electrical or other wiring;
plumbing fixtures; roofs; windows; skylights; doors; trapdoors; the surface or
subsurface of any floor or ceiling of any part of the Facility; dampness or
climatic conditions; maintenance, repair, or construction activities; renovation
work; and any interruption, cessation, or failure of any public or other utility
service.

 

16. SECURITY SERVICES.

16.1 Landlord’s Obligation to Furnish Security Services. Landlord shall supply
to the Building unarmed lobby attendant services at all times (i.e. 365 days a
year, 24 hours a day) and that are generally comparable to the lobby attendant
services provided in Comparable Buildings; provided, however, that neither
Landlord nor any other Landlord Parties shall be liable to Tenant, Tenant’s
employees, invitees or any other person or entity for (and Tenant waives all
claims against them arising by reason of) direct or consequential damages except
to the extent such direct damages (but not in any event consequential damages)
are caused by Landlord’s or Landlord Parties’ willful misconduct or gross
negligence, but specifically including, without limitation, damage or injury to
person or property or loss of life, resulting from the presence, admission to or
exclusion from the Building or Facility of any person, and Tenant acknowledges
that Landlord’s provision of security guards or other security services for the
Building or Facility shall not be construed as Landlord’s or any Landlord
Party’s acceptance of any responsibility or liability for the security of
persons or property in, on or about the Premises, the Building or the Facility.
Landlord may, but shall not be obligated to, furnish additional security
services for the Premises, the Building and/or the Facility as Landlord deems
appropriate in its sole and absolute discretion. In the event Landlord furnishes
or contracts to furnish any such additional services, Tenant shall nevertheless
remain solely responsible for the protection of itself, the Tenant Parties and
all property of Tenant and the Tenant Parties located in, on, or about the
Premises or the Building or the Facility, and the provisions of Section 15 shall
nevertheless continue in full force and effect. Notwithstanding the foregoing,
Tenant shall have the right to supplement the security provided by Landlord
under this Subsection 16.1 below to the extent that Tenant’s additional security
does not interfere with the security provided by Landlord hereunder. Landlord
shall have the right to take all such reasonable and lawful measures as Landlord
may deem advisable for the security of the Building or the Facility and their
occupants, including, without limitation, the lawful search of any person
entering or leaving the Building, the evacuation of the Building (or any part
thereof) for cause, suspected cause, or for drill purposes, the temporary denial
of access to the Building (or any part thereof), and the closing of the Building
after normal business hours and on Sundays and holidays, subject, however, to
Tenant’s right to admittance, when the Building is so closed, under such
reasonable regulations as Landlord may prescribe from time to time.

16.2 Card-Key Access. Landlord has installed a card-key security system to
control access to: (i) each floor of the Premises from the passenger elevators;
(ii) the Exercise Room; and (iii) the entry to the Building on Fremont Street
(after normal business hours). The access described in the preceding sentence
hereof shall be controlled by card-key (one card-key for all access points)
issued to Tenant by Landlord and shall operate on a 24-hour-per-day,
365-day-per-year basis. Landlord shall pay for the cost of the initial
card-keys, not to exceed one card-key for each 250 rentable square feet of space
included in the Initial Premises. Tenant shall pay for all card-keys in excess
of the initial card-keys required pursuant to the preceding sentence hereof and
for any replacement of lost or stolen card-keys.

 

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17. BUILDING SERVICES.

17.1 Standard Building Services. Landlord shall furnish the Premises with the
standard building services and utilities as set forth in the attached Exhibit D.

17.2 Additional Services. Except with respect to electricity which is separately
payable by Tenant under this Lease in whatever quantities consumed by Tenant,
Tenant shall not, without the consent of Landlord (which consent shall not be
unreasonably withheld), (a) use any equipment, apparatus, or device in the
Premises that will in any way increase the amount of cooling capacity or water
usually furnished or supplied for use to the Premises for general office
purposes (i.e., the amounts provided at the standard levels specified in the
attached Exhibit D as being available without additional charge), or (b) connect
to water pipes or any apparatus or device for the purpose of using water. Tenant
agrees to pay within thirty (30) days of demand all reasonable charges
(reasonable meaning, in such context, the charges which would be invoiced to
Tenant by third-party specialists providing such services, which charges shall
in no event be more than those charges imposed by Landlord on third-party
tenants in the Building, which such charges shall be prorated based on size,
type, intensity and degree of such service) imposed by Landlord from time to
time for all building services (it being agreed that there shall be no markup
for typical and customary extra cleaning services or heating and air
conditioning after Business Hours (as such terms is defined in Subsection 1(b)
of Exhibit D attached hereto) requested by Tenant for the Premises) and all
actual charges, without markup, for services and utilities requested by and
supplied to or used by Tenant in excess of or in addition to those standard
building services and utilities described in Exhibit D. Such excess and
additional building services and utilities are hereinafter referred to as
“Additional Services.” If Tenant uses utilities in excess of such standards,
Landlord may, upon prior notice to Tenant, cause a switch and/or metering system
to be installed at Tenant’s expense (which expense shall be Landlord’s actual
cost of installing such switch and Tenant shall pay within thirty (30) days
after receipt of an invoice from Landlord covering the cost to install such
switch or metering system) to measure the amount of building services,
utilities, and/or Additional Services consumed by Tenant or used in the
Premises. Notwithstanding anything to the contrary in this Section 17.2 or
Exhibit D, Landlord has advised Tenant that the Building’s HVAC system is
reasonably capable, under normal operating circumstances, of accommodating
Tenant’s reasonable cooling requirements; provided, however, after Business
Hours (as defined in Exhibit D), Tenant shall be limited to four (4) tons per
floor, or a combined total of sixteen tons per the Premises.

17.3 Conservation. Tenant shall cooperate in a commercially reasonable manner
with Landlord to effect conservation of all utilities in the Building and shall
use its commercially reasonable efforts to minimize its use of water, heat,
electricity, and air conditioning to the extent that such efforts do not
unreasonably interfere with the conduct of Tenant’s business.

17.4 Landlord’s Right to Cease Providing Services. Landlord reserves the right,
in its reasonable discretion, to reduce, interrupt, or cease service of the
heating, air conditioning, ventilation, elevator, plumbing, electrical systems,
telephone systems, and/or utility services of the Premises, the Building, or the
Facility, for any of the following reasons or causes:

(a) any accident, emergency, Law (including, without limitation, Laws requiring
conservation or rationing of electricity, fuel, or water), or Force Majeure (as
defined in Section 18); or

 

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(b) the making of any repairs or governmentally mandated additions, alterations,
or improvements to the Premises, the Building, or the Facility, until such
repairs or governmentally mandated additions, alterations, or improvements shall
have been completed; or

(c) the voluntary making of additions, alterations or improvements to the
Building or the Facility other than those described in Subsection 17.4(b) above.

No such interruption, reduction, or cessation of any such building services or
utilities shall constitute an eviction or disturbance of Tenant’s use or
possession of the Premises or Common Areas, or a breach of Landlord’s
obligations hereunder, or render Landlord liable for any damages (including,
without limitation, any damages, compensation, or claims arising from any
interruption or cessation of Tenant’s business), or entitle Tenant to be
relieved from any of its obligations under the Lease, or result in any abatement
of Rent, except to the extent otherwise provided below. However, Landlord shall
use commercially reasonable diligence to restore such service or to reduce the
length of such interruption, and to minimize any disturbance to Tenant, where it
is within Landlord’s commercially reasonable control to do so. Notwithstanding
the foregoing, if any interruption in, or failure or inability to provide any of
the services described in this Section 17 or Exhibit D (an “Adverse Condition”)
results from activities under clause (c) above or, as to clauses (a) or
(b) above, continues for the “Applicable Interruption Period” (as defined below)
after Tenant’s written notice thereof to Landlord, and Tenant is unable to
conduct its business in a reasonable manner in a “significant portion” of the
Premises as a direct result thereof and Tenant therefore actually does not
occupy or use such “significant portion” of the Premises (or substantially
reduces its use and occupancy of such “significant portion” to a mere “skeleton
crew” basis as necessary to perform critical functions for Tenant’s business),
as the case may be, then Tenant shall be entitled to an abatement of Rent for
the portion of the Premises rendered untenantable. Such abatement shall commence
as of the first day after the expiration of such Applicable Interruption Period
and terminate upon the cessation of such Adverse Condition. As used in this
Subsection 17.4 and in Subsection 22.2 below, the term “significant portion”
shall be deemed to mean an area consisting of at least 1,000 rentable square
feet or any strategic office (such as the computer room or phone connect room
(regardless of its size)). As used herein, the term “Applicable Interruption
Period” shall mean (i) one (1) business day as to activities under clause (c)
above, (ii) three (3) consecutive business days or such shorter period as
applicable under the coverage which is or would be covered by rental abatement
insurance required to be covered by Landlord (subject to the provisions of
Subsection 15.3 above), (iii) five (5) consecutive business days in the case of
an Adverse Condition within Landlord’s reasonable control which is not covered
by (ii) above, (iv) twenty (20) consecutive days in the case of an Adverse
Condition that is not within Landlord’s reasonable control, but that exists
within or arises from an event or circumstances occurring within the Building or
the Facility which is not covered by (ii) above, and (v) sixty (60) consecutive
days in the case of an Adverse Condition that is not within Landlord’s
reasonable control and does not exist within or arise from any event or
circumstance occurring within the Building or the Facility, but that arises from
circumstances occurring outside of and in the immediate vicinity of the Building
for which is not covered by (ii) above. If the conditions described under this
Subsection 17.4(a) and (b) result in Tenant being dispossessed for a period of
time which, if such dispossession has arisen under the provisions of Section 24
below would have given rise to a right to terminate in favor of Tenant, Tenant
shall have such right to terminate under this Subsection 17.4. If the conditions
described under Subsection 17.4(c) above (unless covered by the provisions of
Section 24 below or resulting from voluntary acts of Tenant) result in Tenant
being dispossessed for a period of 60 days, Tenant shall have a right to
terminate this Lease.

 

18. FORCE MAJEURE.

Except as otherwise expressly provided elsewhere in this Lease with respect to
Tenant’s right to abatement of Rent under certain circumstances, neither
Landlord nor Tenant shall be chargeable with,

 

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liable for, or responsible to the other party for anything or in any amount for
any failure to perform or delay caused by any of the following events
(collectively, “Force Majeure”): fire; earthquake; explosion; flood; hurricane;
the elements; acts of God or the public enemy; actions, restrictions,
limitations or interference of governmental or quasi-governmental authorities or
agents; war; invasion; insurrection; rebellion; riots; strikes or lockouts;
inability to obtain necessary materials, goods, equipment, services, utilities
or labor; accident; breakage; or any other cause whether similar or dissimilar
to the foregoing which is beyond the reasonable control of such failure (but not
unavailability of funds); and any such failure or delay due to said causes or
any of them shall not be deemed a breach of or default in the performance of
this Lease by such party.

 

19. RULES AND REGULATIONS.

19.1 Compliance. Tenant, its agents, employees, and servants and those claiming
under Tenant will at all times observe, perform, and abide by all of the general
rules and regulations promulgated by Landlord as set forth in Exhibit C and the
Rules and Regulations for Construction by Tenant set forth in Exhibit H, and, to
the extent that Tenant is provided with written notice of same, as reasonably
modified, supplemented, or amended by Landlord from time to time (together, the
“Rules and Regulations”). Landlord shall not be responsible to Tenant for the
nonperformance by any other tenant or occupant of the Facility of any of said
Rules and Regulations, and provided that Landlord shall do the same for Tenant,
Landlord shall have the right to make reasonable exceptions for specific tenants
or occupants with respect to the application of certain rules and regulations;
provided, however, that nothing contained in this sentence shall excuse Landlord
from performing its obligations required by this Lease. Subject to the
foregoing, Landlord agrees to use commercially reasonable efforts, consistent
with Landlord’s rights under applicable leases, to apply the Rules and
Regulations in a fair, responsible, nondiscriminatory and equitable manner. If
there is a conflict between the Rules and Regulations and any provision of this
Lease, the provisions of this Lease shall prevail.

19.2 Enforcement. Upon Landlord’s receipt of Tenant’s written notice that
another tenant or occupant of the Facility is engaging in conduct prohibited by
this Section, to the detriment of Tenant, Landlord agrees to use commercially
reasonable efforts, consistent with Landlord’s rights under the lease of such
other tenant or occupant, to cause such party to desist from such prohibited
conduct. Notwithstanding the foregoing, Landlord shall not be required to file a
lawsuit against another tenant nor shall Landlord be liable to Tenant for any
such conduct on the part of other tenants or occupants of the Building, except
to the extent such conduct results in default in Landlord’s obligations under
this Lease.

 

20. HOLDING OVER.

20.1 Surrender of Possession. Tenant shall surrender possession of the Premises
immediately upon the expiration of the Term or termination of this Lease. If
Tenant surrenders possession of the Premises to Landlord in a condition other
than that required under this Lease, Tenant shall be responsible for all costs
incurred by Landlord arising from such failure. If Tenant retains possession of
all or a portion of the Premises after the expiration or earlier termination of
the Term, with Landlord’s express written consent, Tenant’s occupancy shall be
deemed to be that of a month-to-month tenancy, terminable upon thirty (30) days’
written notice. If Tenant retains possession of the Premises or any part thereof
after the expiration or earlier termination of the Term, without Landlord’s
express written consent, Tenant’s occupancy shall be deemed to be that of a
tenancy-at-will, terminable upon five (5) days’ written notice, and in no event
shall such occupancy be deemed from month-to-month or from year-to-year; further
such occupancy shall be subject to all of the provisions of this Lease
pertaining to the obligations of Tenant and the rights of Landlord during the
Term shall apply, except as expressly modified by this Section 20. In the event
that Tenant commits an Event of Default or remains in possession of the Premises
or any part thereof after the expiration of any month-to-month tenancy or
tenancy-at-will created hereby, then Tenant’s occupancy shall be deemed to a
tenancy-at-sufferance and not a tenancy-at-will.

 

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20.2 Holding Over Without Consent. If Tenant, without Landlord’s consent,
retains possession of the Premises after the expiration or earlier termination
of Term or past the expiration of any tenancy-at-will under Subsection 20.1
above, then Tenant shall pay to Landlord monthly rental equal to the “Applicable
Percentage” (as defined below) of the Minimum Monthly Rent applicable
immediately prior to the expiration or earlier termination of the Term with
respect to such portion of the Premises that Tenant has not surrendered. The
“Applicable Percentage” shall be determined as follow: 150% for the first month
of such holdover and 175% for the second month and any additional months of such
holdover. In addition, Tenant shall indemnify Landlord from and against all
losses, costs, claims, liabilities, and expenses (including, without limitation,
reasonable attorneys’ fees and disbursements but specifically excluding
consequential damages) sustained by Landlord by reason of such retention
(including, without limitation, claims for damages by any other person to whom
Landlord may have agreed to lease all or any part of the Premises effective on
or after the date Tenant was obligated to surrender possession of the Premises).
No acceptance by Landlord of Rent during any such holding over without
Landlord’s approval shall reinstate, continue, or extend the Term or shall
affect any notice of termination given to Tenant prior to the payment of such
money, it being agreed that after the service of such notice or the commencement
of any suit by Landlord to obtain possession of the Premises, Landlord may
receive and collect when due any and all payments owed by Tenant under this
Lease, and otherwise exercise its rights and remedies. The making of any such
payments by Tenant shall not waive such notice, or in any manner affect any
pending suit or judgment obtained.

 

21. SUBORDINATION.

21.1 Landlord hereby represents that as of the date of execution and delivery of
this Lease, the Facility is unencumbered by any Incumbrances (as defined below)
except for that certain unrecorded “Ground Lease” (as such term is defined in
Section 55 below). If Landlord’s lender shall require the ground lessor under
the Ground Lease to deliver to it a non-disturbance agreement (which such
agreement is further detailed below) and if such ground lessor agrees to deliver
such a non-disturbance agreement, Landlord shall require the delivery of a
non-disturbance agreement by ground lessor in favor of Tenant within sixty
(60) days of the date that such ground lessor agrees to deliver the
non-disturbance agreement to Landlord’s lender. This Lease shall be subject and
subordinate to any mortgage, deed of trust, ground lease or master lease
(collectively, “Encumbrance”) hereafter placed upon the Facility and to all
renewals, modifications, replacements and extensions thereof; provided that, as
a condition to such subordination, a separate written agreement in a
commercially reasonable form as such holder of or lessor under such Encumbrance
(“Encumbrancer”) shall require, shall be entered into between Tenant and such
Encumbrancer to specify that, notwithstanding any default in the Encumbrance and
any foreclosure or termination thereof, or the enforcement by the Encumbrancer
of any rights or remedies, including sale thereunder, or otherwise, Tenant shall
not be joined or made party to such foreclosure, termination, or other
proceedings, and this Lease shall be recognized and shall remain in full force
and effect, and Tenant shall not be disturbed and shall be permitted to remain
in quiet and peaceful possession of the Premises throughout the Term in
accordance with and subject to all the provisions of this Lease as long as no
Event of Default by Tenant is outstanding.

21.2 In the event that any ground lease or master lease terminates for any
reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest to
Landlord if such successor shall recognize and assume the Lease and shall agree
not to disturb Tenant’s right to possession of the Premises. Upon request by
Landlord, Tenant shall execute and deliver such instruments in a commercially
reasonable form as may be reasonably necessary or convenient to

 

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evidence such subordination, nondisturbance, and/or attornment; provided,
however, that if the content of such instruments affect an amendment to this
Lease, such instruments shall be governed by the restrictions set forth with
respect to Lease amendments set forth in Section 28 below. Notwithstanding the
foregoing, in no event shall Tenant be obligated to execute any instrument that
would constitute an amendment of this Lease, except to the extent otherwise
provided in Section 28 below. Also notwithstanding any provision hereof to the
contrary, if any Encumbrancer shall elect to have this Lease prior to the lien
of its Encumbrance and shall give notice thereof to Tenant, this Lease shall be
deemed prior to the Encumbrance irrespective of whether the Lease is dated prior
or subsequent to the date of the Encumbrance or the recording date thereof.

 

22. ENTRY BY LANDLORD.

22.1 Reservation. Landlord reserves and shall have the right to enter the
Premises at any and all reasonable times after twenty-four (24) hours notice of
same (except in cases of emergency (in which case no notice shall be required))
and in the presence of a representative of Tenant to the extent a representative
is available (except in cases of emergency in which case no representative need
be present)) (a) to inspect the same, (b) to verify Tenant’s compliance with its
obligations under this Lease, (c) to post notices of non-responsibility (if
permitted by the Laws of the State where the Facility is located), (d) to post
any notices Landlord is required by law to post on the Premises or deemed
reasonably necessary by Landlord for Landlord to protect its interest in the
Premises and/or the Facility or for health and safety purposes, (e) to deliver
notices to Tenant or any subtenant or occupant of any portion of the Premises,
(f) to supply any service to be provided by Landlord to Tenant hereunder, and
(g) to submit the Premises to prospective lender, purchasers, investors, or,
during the last six (6) months of the Term only, tenants. Tenant shall maintain
any such notices required by law posted by Landlord in or on the Premises.

22.2 Designation. Tenant may designate certain areas of the Premises as “Secured
Areas” should Tenant require such areas for the purpose of securing certain
valuable property or confidential information. Landlord may not enter such
Secured Areas except in the case of emergency (in which case no notice shall be
required) or in the event of a Landlord inspection, in which case Landlord shall
provide Tenant with ten (10) days’ prior written notice of the specific date and
time of such Landlord inspection and Landlord shall make such inspection in the
presence of a representative of Tenant (except in cases of emergency, in which
case no representative need be present).

22.3 Representative. Landlord also reserves and shall have the right to enter
the Premises, after twenty-four (24) hours notice of same (except in cases of
emergency, in which case no notice shall be required) and in the presence of a
representative of Tenant to the extent a representative is available (except in
cases of emergency, in which case no representative need be present), to perform
Landlord’s obligations under Subsection 11.2 above and to perform those repairs
to the Premises for which Tenant is responsible, but which Tenant failed to
perform pursuant to Subsection 11.1 above, and Landlord may for such purposes
erect scaffolding and other appropriate structures where reasonably required by
the character of the work to be performed.

22.4 Abatement. In the event that any such entry by Landlord into the Premises,
or such work performed by Landlord at the Facility, prevents Tenant from gaining
access to or prevents Tenant’s use of all or any “significant portion” of the
Premises, Tenant’s Rent shall be abated in the manner set forth in
Subsection 17.4.

22.5 Limitation. If, as a result of any entry by Landlord which is described in
Subsection 22.4 above, the amount of rentable square feet constituting the
Premises shall be permanently reduced, both parties shall execute an amendment
to the Lease memorializing the amount of such reduction in the

 

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Minimum Monthly Rent and additional Rent. Except as provided in Subsection 17.4
above, in no event, however, shall Tenant be entitled to any abatement of Rent
on account of any noise, vibration, or other disturbance to Tenant’s business at
the Premises that may arise out of any such entry by Landlord into the Premises
or out of Landlord’s performance of any such work at the Facility, and under no
circumstances shall any such noise, vibration, disturbance, work, or entry by
Landlord be construed or deemed to be a forcible or unlawful entry into or a
detainer of the Premises or an eviction of Tenant from the Premises or any
portion thereof.

22.6 Mitigation. Landlord shall use commercially reasonable efforts (which shall
not include any obligation to employ labor at overtime rates other than with
respect to activities which cause noise or vibration at disruptive levels or
impede access to the Premises, such as core drilling, which shall only be
performed on an “after Business Hours” basis except in emergencies) to avoid or
minimize disruption of Tenant’s business during any such entry or work by
Landlord.

22.7 Emergency. Landlord shall have the right to use any and all means that
Landlord may deem appropriate to open any doors in an emergency in order to
obtain entry to the Premises; provided, however, that Landlord shall repair any
damage resulting therefrom (and costs thereof shall constitute an Operating
Expense to the extent permitted by Section 6 above).

 

23. DEFAULTS AND REMEDIES.

23.1 Events of Default.

23.1.1 Definition. In addition to those events designated as Events of Default
in other provisions of this Lease, each of the following shall constitute an
“Event of Default” by Tenant and a breach of this Lease:

(a) Tenant’s failure to make any payment owed by Tenant under this Lease, as and
when due, where such failure is not cured within ten (10) days following
Tenant’s receipt of Landlord’s written notice thereof, provided, however, that
in the event Tenant shall fail to make timely payment of Rent payments which are
due monthly three (3) or more times in any twelve (12) month period and Landlord
shall have delivered to Tenant a written notice of such delinquencies, then
during the twelve (12) consecutive months immediately after such failure the ten
(10) day cure period shall be reduced to a three (3) day cure period; or

(b) Tenant’s failure to observe, keep, or perform any of the terms, covenants,
agreements, or conditions under this Lease that Tenant is obligated to observe
or perform, other than that described in clause (a) above, for a period of
thirty (30) days after delivery of notice to Tenant of said failure; provided
however, that if the nature of Tenant’s default is such that more than thirty
(30) days are reasonably required for its cure, then Tenant shall not be deemed
to be in default under this Lease if Tenant shall commence the cure of such
default so specified within said thirty (30) day period and shall diligently
prosecute the same to completion; provided further, however, that if Tenant is
prevented from observing, keeping or performing any of the terms, covenants,
agreements or conditions under this Lease because of a Force Majeure event, then
Tenant shall not be in default during the period of such Force Majeure event; or

(c) The occurrence of any of the events described in Subsection 37.5 (Events of
Bankruptcy) below with respect to any guarantor of any obligations of Tenant
under this Lease, where Tenant fails to furnish a substitute guarantor, or
alternative security, satisfactory to Landlord within sixty (60) (or sooner if
reasonably possible) days after Landlord’s delivery of Landlord’s written demand
therefor.

 

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23.1.2 Notice of Default. The notices of default provided for in
Subsection 23.1.1(a) and (b) shall in each case be in lieu of, and not in
addition to, any notice required under applicable unlawful detainer Laws;

23.2 Remedies. Upon the occurrence of any Event of Default, Landlord may
exercise any one or more of the termination rights and other remedies described
in this Section 23, in addition to all other rights and remedies now or
hereafter provided at law or in equity.

23.3 Right to Cure. All covenants and agreements to be performed by Tenant under
this Lease shall be performed by Tenant at Tenant’s sole cost and expense. If
Tenant shall fail to perform any act on its part to be performed under this
Lease, and such failure shall continue beyond any applicable notice and cure
period (except that no notice or cure shall be required in cases of emergency),
Landlord may, but shall not be obligated to do so, without waiving or releasing
Tenant from any obligations of Tenant, perform any such act on Tenant’s part to
be performed as provided in this Lease. All reasonable costs incurred by
Landlord with respect to any such performance by Landlord (including reasonable
attorneys’ fees) shall be paid by Tenant to Landlord within thirty (30) days of
Landlord’s demand therefor.

23.4 Waiver of Redemption. Tenant hereby waives, for itself and all persons
claiming by and under Tenant, all rights and privileges which it might have
under any present or future law to redeem the Premises or to continue the Lease
after being dispossessed or ejected from the Premises.

23.5 Remedies Cumulative. All remedies of Landlord under this Lease are
cumulative. Efforts by Landlord to mitigate the damages caused by Tenant’s
default shall not constitute a waiver of Landlord’s right to recover damages,
nor shall Landlord have any obligation to mitigate damages, except to the extent
provided by applicable Laws.

23.6 Default by Landlord.

23.6.1 Notice. In no event shall Landlord be deemed to be in default if Landlord
fails to perform any covenant, term, or condition of this Lease upon Landlord’s
part to be performed (including Landlord’s obligations set forth in Section 40
below, it being agreed that after the expiration of the cure period provided
therein Landlord shall have no further cure period), unless and until thirty
(30) days have expired after delivery, to Landlord and to the holder of any
mortgage or deed of trust covering the Premises whose name and address shall
have theretofore been furnished to Tenant, of a written notice specifying in
detail Landlord’s failure to perform and demanding the correction of such
deficiency; provided, however, that if such deficiency cannot be cured or
corrected within such 30-day period Landlord shall not be in default if Landlord
or anyone on behalf of Landlord commences such cure or correction within such
30-day period and thereafter diligently and continuously prosecutes the same to
completion. If Landlord is deemed to be in default under the provisions of this
Subsection, Tenant shall be entitled to bring an action for declaratory judgment
or specific performance, or for damages (subject to the provisions of this Lease
limiting Landlord’s liability) shown by Tenant to have been directly caused by
such default; provided, however, that subject to Subsection 23.6.5 below, an
action for declaratory judgment or specific performance will be Tenant’s sole
right and remedy in any dispute as to whether Landlord has breached any express
or implied obligation under this Lease to not unreasonably withhold Landlord’s
consent or approval.

23.6.2 Consequential Damages. Tenant agrees that, in the event it becomes
entitled to receive damages from Landlord, Tenant shall not, in any event, be
allowed to recover from Landlord consequential damages or damages in excess of
the out-of-pocket expenditures incurred by Tenant as a result of a default by
Landlord. Further, Tenant shall look solely to the then interest of Landlord in
the Facility, or of any successor in interest to Landlord, as owner of the
Facility, and/or the proceeds of

 

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insurance relating thereto, and (in the case of any liability that
Subsections 14.90 and 26 provide shall survive a sale, conveyance, or transfer
of the Facility) the proceeds (if any) of a sale, conveyance or transfer of the
Facility, for the satisfaction of any remedy of Tenant for failure to perform
any Landlord’s obligations under this Lease, express or implied, or under any
Law.

23.6.3 Non-Liability. Neither Landlord nor any disclosed or undisclosed
principal of Landlord (or officer, director, stockholder, partner or agent of
Landlord or of any such principal), nor any successor of any of them, shall have
any personal liability for any such failure under this Lease or otherwise. The
provisions of this Subsection shall apply only to Landlord and the parties
above-described. They shall not be for the benefit of any insurance company or
other third party. Except as set forth in Subsections 11.2, 17.4, and 22.2 above
and in Sections 24, 25 below or in the Work Letter or elsewhere in the Lease,
Tenant hereby expressly waives its rights under any and all Laws, to terminate
this Lease (whether prior to or after the commencement of the Term) or to
withhold any payment owed by Tenant under this Lease, on account of any damage,
condemnation, destruction, or state of disrepair of the Premises, or any part
thereof, it being the parties’ intent that the provisions of this Lease shall
govern the parties’ rights and obligations with respect to such matters. In the
event of any conflict between any provision of this Subsection and any other
provision(s) of this Lease, the provisions of this Subsection shall control.

23.6.4 Counter-Claim. In the event Landlord commences any proceedings against
Tenant for possession of the Premises or for non-payment of Rent or any other
sum due and payable to Landlord hereunder, Tenant shall not interpose any
counter-claim or other claim against Landlord of whatever nature or description
in any such proceedings; and in the event that Tenant interposes any such
counter-claim or other claim against Landlord in such proceedings, Landlord and
Tenant hereby stipulate and agree that, in addition to any other lawful remedy
of Landlord, upon motion of Landlord, such counter-claim or other claim asserted
by Tenant shall be severed out of the proceedings instituted by Landlord and
such proceedings instituted by Landlord may proceed to final judgment separately
and apart from and without consolidation with or reference to the status of such
counter-claim or other claim asserted by Tenant. The foregoing provisions of
this Subsection 23.6.4 shall not apply in the case of any “claim” that under
applicable codes of civil procedure would be deemed forfeited if not asserted in
the same proceeding. Landlord hereby stipulates and agrees that the provisions
of this Subsection 23.6.4 shall not apply or be enforceable so long as the
Original Tenant or an affiliate thereof is still the Tenant hereunder or the
Tenant hereunder became the Tenant as a result of a Permitted Transfer.

23.6.5 Arbitration. Notwithstanding any provision hereof to the contrary, Tenant
shall have the following additional remedy in the event that Landlord, pursuant
to Subsection 14.3 of this Lease, refuses to consent to a proposed Transfer and
Tenant believes that such refusal constitutes a breach of Landlord’s obligations
under this Lease: Within five (5) business days after notice of such refusal is
received or deemed received by Tenant, Tenant may by written demand delivered to
Landlord elect to submit to binding arbitration the issue of whether Landlord
refused such consent in accordance with the provisions of this Lease. Such
written demand by Tenant shall include Tenant’s designation of its candidate to
serve as the arbitrator, which candidate shall satisfy the following
requirements:

(a) Qualifications. Each candidate for arbitrator shall be a California-licensed
attorney with recognized expertise and at least ten (10) years’ experience in
leasing matters pertaining to first-class high rise office building operations
in the San Francisco Financial district. Each candidate for arbitrator, and the
law firm (if any) with which he/she is affiliated, shall be independent of each
party and shall not previously have represented either Landlord or Tenant as
legal counsel.

(b) Response. Within five (5) business days after the service of demand for
arbitration, Landlord shall give to Tenant notice (the “Response”) of the name
and address of the person

 

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designated by Landlord to act as arbitrator on Landlord’s behalf, which
arbitrator must also meet the qualifications set forth above. If Landlord fails
to notify Tenant of the appointment of Landlord’s arbitrator, within or by the
time above specified, then the arbitrator appointed by Tenant shall be the
arbitrator to determine the issue. The arbitration shall be conducted in San
Francisco, California, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (as used in this Subsection 23.6.5(b), the
“Rules”). If two (2) arbitrators are chosen pursuant to the above provisions,
the arbitrators so chosen shall meet within five (5) business days after the
second arbitrator is appointed, and if within five (5) business days after such
first meeting the two arbitrators shall be unable to agree promptly upon a
determination of the matter in issue, they shall appoint a third arbitrator, who
shall be competent and impartial person with the required qualifications
specified above. Said third arbitrator or, if Landlord shall have failed to
notify Tenant of the appointment of Landlord’s arbitrator, Tenant’s arbitrator,
as the case may be, shall decide the issue within ten (10) business days after
his/her appointment. Within such ten (10) business day period the arbitrator
shall hold a hearing in accordance with the aforesaid Rules. At such hearing
each party may submit evidence, be heard and cross-examine witnesses, with each
party having at least five (5) business days advance notice of the hearing. The
hearing shall be conducted so that Landlord and Tenant shall each have
reasonably adequate time to present oral evidence or argument, but either party
may present whatever written evidence it deems appropriate prior to the hearing
(with copies of any such written evidence being sent to the other party prior to
the hearing). The arbitrator shall have the right to consult experts and
competent authorities with factual information or evidence pertaining to the
determination of the matter at issue, but any such consultation shall be made in
the present of both parties with full right on their part to cross-examine. The
only decision to be rendered by the arbitrator(s) is whether or not Landlord’s
refusal of consent constituted a breach of the Lease. The arbitrator(s) shall
render his/her/their decision in writing with counterpart copies to each party.
The arbitrators shall have no power to modify the provisions of this Lease. Any
decision derived from the foregoing arbitration process shall be binding and
conclusive upon the parties. If the arbitrator(s) decide(s) that Landlord’s
refusal of consent was unreasonable, then such refusal shall automatically be
deemed null and void and Landlord’s consent to the proposed Transfer that be
deemed granted, so that Tenant may proceed to consummate the Transfer. The
losing party shall pay the fees and costs of the arbitrators and of the expert
witnesses (if any) of the prevailing party as well as those of its expert
witnesses and the actual and reasonable attorneys’ fees of the prevailing
party’s legal counsel.

23.7 Unlawful Detainer Notice. Tenant hereby specifically agrees that any notice
of default provided for in Subsection 23.1 of the Lease shall be in lieu of, and
not in addition to, any notice required under Section 1161 of the California
Code of Civil Procedure.

23.8 Additional Remedies of Landlord. Upon the occurrence and continuation of
any Event of Default described in Subsection 23.1 of this Lease, Landlord may
exercise any one or more of the following remedies, in addition to all other
rights and remedies provided elsewhere in this Lease or now or hereafter
provided at law or in equity:

23.8.1 Right to Terminate. Landlord shall have the right, in addition to all
other rights available to Landlord under this Lease or now or later permitted by
law or equity, to terminate this Lease by providing Tenant with a notice of
termination. Upon termination, Landlord may recover any damages proximately
caused by Tenant’s failure to perform under the Lease, including, without
limitation, any reasonable amount (collectively, the “Costs of Reletting”)
expended or to be expended by Landlord in an effort to mitigate damages
(including, without limitation, advertising costs, brokerage fees, attorneys’
fees, and costs for maintaining the Premises and putting them into good order,
condition, and repair, and performing such remodeling, renovations, or
alterations as may be desirable to prepare the Premises for reletting to an
identified tenant with whom Landlord has reached a lease agreement), as well as
any other damages to which Landlord is entitled to recover under any Law now or
hereafter in effect. Those Costs

 

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of Reletting that are of a type that would ordinarily have been incurred by
Landlord in reletting the Premises after the expiration of the Term without any
default on the part of Tenant (e.g., brokers’ commissions and tenant improvement
allowances) shall be amortized on a straight-line basis over the entire term
(exclusive of renewal options) of the reletting of the Premises or any portion
thereof to which they relate, which term shall be deemed to commence when the
obligation to pay monthly rents commences. For Costs of Reletting that are to be
so amortized, only the portion (if less than all) of such costs that relates to
any portion of the balance of the Term (as the same would have remained in
effect but for Tenant’s Event of Default) shall be included in the computation
of damages and such amortized Costs of Reletting relating to periods after such
end of the Term shall not be included in the computation of damages. Other Costs
of Reletting that are of a type that would not ordinarily have been incurred by
Landlord in reletting the Premises after the expiration of the Term without any
default on the part of Tenant (including, without limitation, and costs of
removing personal property or Alterations that Tenant was required to remove at
Tenant’s expense) shall not be so amortized, and instead 100% of such costs
shall be included in the computation of damages. Landlord’s damages include the
worth, at the time of any award, of the amount by which the unpaid Rent for the
balance of the Term after the time of the award exceeds the amount of the rental
loss that Tenant proves could be reasonably avoided. The worth at the time of
award shall be determined by discounting to present value such amount at one
percent (1%) more than the discount rate of the Federal Reserve Bank in San
Francisco in effect at the time of the award. Damages to which Landlord is
entitled shall bear interest, commencing on the date such damages are incurred,
at an annual interest rate, not to exceed the maximum rate allowed by law, equal
to the sum of (a) the Reference Rate (as defined in Subsection 6.3.1 of the
Lease) in effect from time to time plus (b) two percent (2%) per annum.
Notwithstanding any provision of this Lease to the contrary, in no event shall
Landlord be entitled to collect more than once for any discrete element of
damages.

23.8.2 Right to Recover Rent as It Becomes Due. Landlord may exercise the remedy
described in California Civil Code Section 1951.4 (landlord may continue lease
in effect after tenant’s breach and abandonment, and recover Rent as it becomes
due, if tenant has right to sublet or assign, subject only to reasonable
limitations). Tenant hereby specifically acknowledges and agrees that the
limitations on its right to sublet or assign, as set forth in Section 14 of the
Lease, are reasonable.

23.8.3 Right to Remove Personal Property. Upon any reentry by Landlord into the
Premises under this Section, Landlord shall have the right to cause any movable
furniture, equipment, trade fixtures, or other personal property left on the
Premises to be removed and stored in a public warehouse or elsewhere at Tenant’s
sole cost and expense, and/or after thirty (30) days notice to Tenant, to
dispose of or sell such property and apply the proceeds therefrom pursuant to
applicable Law. In the event Landlord stores such property at premises owned or
leased by Landlord, Landlord may charge Tenant for such storage at such
reasonable rates as Landlord shall from time to time determine. The foregoing
notwithstanding, nothing set forth in this paragraph or elsewhere in this Lease
shall impose on Landlord any obligation for the care or preservation of such
property so left upon the Premises, except to the extent otherwise expressly
provided by applicable Laws.

23.9 Waiver of Certain California Code Sections. The parties understand and
agree that the provisions of this Lease shall govern the parties rights and
obligations with respect to the matters addressed in the statutory provisions
described below. Accordingly, and without limitation to the generality of the
provisions of the Lease concerning the waiver of certain statutory provisions,
Tenant hereby specifically waives its rights under the following provisions of
California law:

23.9.1 Civil Code Sections 1932 and 1933(4), concerning the termination of a
lease (whether prior to or after the commencement of the lease term) on account
of the condition of the premises, but without waiver of the right expressly
granted to Tenant in Subsection 23.6.1 of the Lease or any other express
provision of the Lease;

 

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23.9.2 Civil Code Sections 1941 and 1942, concerning the making of repairs at a
landlord’s expense, but without waiver of Tenant’s right expressly granted in
Subsection 23.6.1 of the Lease or any other express provision of the Lease; and

23.9.3 Code of Civil Procedure Section 1265.130, concerning the right to
petition the Superior Court to terminate a lease in the event of a partial
taking of the premises by condemnation, but without waiver of the right
expressly granted to Tenant in Subsection 23.6.1 of the Lease or any other
express provision of the Lease.

These waivers shall also apply to any similar future Laws enacted in addition to
or in substitution of the Laws specified above.

 

24. DAMAGE OR DESTRUCTION.

24.1 Exclusive Remedy. The remedies provided for in this Section 24 shall be
Tenant’s and Landlord’s sole and exclusive remedy in the event a Casualty causes
damage to or destruction of all or any portion of the Premises, Building, or
Facility, and Tenant and Landlord, as a material inducement to the other party’s
entering into this Lease, irrevocably waives and releases the provisions of any
Law that would automatically terminate this Lease or otherwise be contrary to
the provisions of this Section in the event of any such damage or destruction,
it being the intent of both parties that the provisions of this written Lease
shall instead govern the rights and obligations of the respective parties with
respect to such matters.

24.2 Loss Covered by Insurance. If at anytime prior to the expiration or
termination of this Lease, (i) all or any portion of the Premises, or any
portion of the Common Areas whose use is necessary for Tenant’s business, shall
be wholly or partially damaged or destroyed by fire or other casualty or peril
(collectively, a “Casualty”), and (ii) such damage or destruction shall render
the Premises totally or partially inaccessible or unusable by Tenant in the
ordinary conduct of Tenant’s business, then the following provisions shall
apply.

24.2.1 Repairs That Can Be Completed Within One Year.

(a) Within sixty (60) days after the earlier of (i) the date Landlord obtains
actual knowledge that the Premises or any portion of the Common Areas are
damaged and require repair, or (ii) the date of Tenant’s notice to Landlord of
such damage or destruction (the “Damage Notice Date”), Landlord shall give
Tenant notice of Landlord’s contractor’s good faith determination, as evidenced
by a certificate of such contractor in favor of Landlord and Tenant, of whether
the damage or destruction can be repaired under applicable Laws, without the
payment of overtime or other premiums, within one year after the date such
determination of Landlord’s contractor is made and the date when such repair
shall be substantially completed. In cases where such damage or destruction is
patent and substantial and known to Landlord within 24 hours after its
occurrence, Tenant’s notice to Landlord shall not be required and the date of
such damage or destruction shall be deemed the “Damage Notice Date.”

(b) If all such repairs to the Premises and/or such portions of the Common Areas
can, in Landlord’s contractor’s good faith judgment, be substantially completed
in such manner within such one year period (the “One Year Period”), Landlord
shall promptly, diligently and continuously undertake such repairs and this
Lease shall remain in full force and effect. Notwithstanding the immediately
preceding sentence, in the event Landlord commences repair of such damage, and
the repairs are not substantially completed within a period of time equal to
120% of the period of time between the date of such damage and the date
estimated for completion of the repairs set forth in the contractor’s
certificate (“Completion Date”) (as the end of such 120% time period may be
extended by the

 

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number of days that the substantial completion of the repair work is delayed due
to any Tenant-caused delays) (the “First 120% Period”), then Tenant shall have
the right to terminate this Lease within five (5) business days after the
expiration of the First 120% Period, by notice to Landlord (the “First Damage
Termination Notice”), which such termination shall be effective as of
thirty (30) days after Tenant’s delivery to Landlord of the First Damage
Termination Notice (the “First Damage Termination Notice Period”). Landlord’s
contractor shall have the right to deliver to Tenant a notice at any time prior
to the expiration of the First 120% Period estimating a revised Completion Date,
upon receipt of which Tenant shall have thirty (30) days to elect whether or not
to terminate this Lease or to approve the revised Completion Date.

24.2.2 Repairs That Cannot Be Completed Within One Year.

(a) In the event that Landlord’s contractor determines in good faith, as
evidenced by a certificate to Landlord and Tenant, that such repairs to the
Premises or to such portions of the Common Areas cannot be substantially
completed under applicable Laws, without the payment of overtime or other
premiums, within one year after the date of such determination, then Landlord
shall notify Tenant by the Damage Notice Date of such determination and Landlord
shall notify Tenant of the Completion Date. In such notice Landlord shall either
agree to undertake such repairs or elect to terminate this Lease. If Landlord so
agrees to undertake repairs, but states that the required repairs will not be
completed within one year after delivery of such notice, then Tenant shall have
an option, exercisable by written notice thereof delivered to Landlord not later
than the fifteenth (15th) business day after Landlord’s delivery of Landlord’s
notice that the repairs will not be completed within such one year period, to
terminate this Lease.

(b) If neither Landlord nor Tenant exercise such a right of termination
following Landlord’s determination that repairs will take more than one year,
then Landlord shall promptly, diligently and continuously undertake to repair
such damage or destruction. Notwithstanding the immediately preceding sentence,
in the event Landlord commences repair of such damage, and the repairs are not
substantially completed within a period of time equal to 120% of the period of
time between the date of such damage and the Completion Date, as such Completion
Date may be extended by the number of days that the substantial completion of
the repair work is delayed due to any Tenant-caused delays (the “Second 120%
Period”), then Tenant shall have the right to terminate this Lease within five
(5) business days after the expiration of the Second 120% Period, by notice to
Landlord (the “Second Damage Termination Notice”), which such termination shall
be effective as of thirty (30) days after Tenant’s delivery to Landlord of the
Second Damage Termination Notice (the “Second Damage Termination Notice
Period”). Landlord’s contractor shall have the right to deliver to Tenant a
notice at any time prior to the Completion Date estimating a revised Completion
Date, upon receipt of which Tenant shall have thirty (30) days to elect whether
or not to terminate this Lease or to approve the revised Completion Date.

24.3 Loss Not Covered By Insurance. If, at anytime prior to the expiration or
termination of this Lease, (a) all or any portion of the Premises, or any
portion of the Common Areas the use of which is required for Tenant’s business
or any other portion of the Facility the use of which is required for Tenant’s
business or Tenant’s access to the Premises, is wholly or partially damaged or
destroyed by a Casualty, and (b) less than ninety percent (90%) (if any) of the
total costs of performing the necessary repairs and replacements will be fully
covered and paid for by the greater of (i) the amount that would have been
received had that party maintained the insurance required by this Lease (which
proceeds will be deemed to be self-insured by the party failing to carry the
required insurance to the extent the required insurance was not so obtained
unless no proceeds are available because of the financial failure of the
insurer), or (ii) the available proceeds of insurance actually maintained by
Landlord or Tenant, and (c) such damage or destruction renders the Premises
totally or partially inaccessible or unusable by Tenant in the ordinary conduct
of Tenant’s business, then:

 

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24.3.1 Landlord Action. Landlord shall deliver to Tenant, within sixty (60) days
after the Damage Notice Date, a written notice whereby Landlord shall either
(a) elect to terminate this Lease or (b) agree to undertake such repairs
promptly, diligently and continuously, in which latter event such notice shall
include a statement of Landlord’s contractor’s good faith estimate, as evidenced
by a certificate to Landlord and Tenant, of the number of days required in order
to achieve substantial completion, under applicable Laws, of such repair and
restoration work (“Landlord’s Estimate of the Completion Date”). If Landlord
does not elect by such notice to Tenant to repair such damage, this Lease shall
be deemed to have been terminated by Landlord.

24.3.2 Tenant’s Option. If pursuant to Subsection 24.3.1 Landlord elects to
undertake such repairs, but the Landlord’s Estimate of the Completion Date is
more than one year after delivery of such notice, then Tenant shall have an
option, exercisable by written notice thereof delivered to Landlord not later
than the fifteenth (15th) business day after Landlord’s delivery of Landlord’s
notice that the repairs will not be completed within such one year period, to
terminate this Lease. If neither Landlord nor Tenant exercise such a right of
termination with respect to a Casualty covered by this Subsection 24.3, then
Landlord shall promptly, diligently and continuously undertake to repair such
damage or destruction. Notwithstanding the immediately preceding sentence, in
the event Landlord commences repair of such damage, and the repairs are not
substantially completed within a period of time equal to 120% of the period of
time between the date of such damage and the Landlord’s Estimate of the
Completion Date, as such Landlord’s Estimate of the Completion Date may be
extended by the number of days that the substantial completion of the repair
work is delayed due to any Tenant-caused delays (the “Third 120% Period”), then
Tenant shall have the right to terminate this Lease within five (5) business
days after the expiration of the Third 120% Period, by notice to Landlord, which
such termination shall be effective as of thirty (30) days after Tenant’s
delivery to Landlord of the Damage Termination Notice (the “Third Damage
Termination Notice Period”). Landlord shall have the right to deliver to Tenant
a notice at any time prior to the Landlord’s Estimate of the Completion Date
estimating a revised Landlord’s Estimate of the Completion Date, upon receipt of
which Tenant shall have thirty (30) days to elect whether or not to terminate
this Lease or to approve the revised Landlord’s Estimate of the Completion Date.

24.4 Destruction During Final Twenty-Four Months. Notwithstanding anything to
the contrary contained in Subsection 24.2, if the Premises or the Building or a
portion of the Common Areas the use of which is required for Tenant’s business
or Tenant’s access to the Premises are wholly or partially damaged or destroyed
within the final twenty-four (24) months of the Term, and no renewal rights have
been exercised prior to such damage or destruction, and if as a result of such
damage or destruction Tenant is denied access or use of the Premises for the
conduct of its business operations for a period of ninety (90) consecutive
business days, Tenant may, at its option, by giving Landlord written notice
prior to substantial completion of the repairs, and in no event later than the
60th day after the Damage Notice Date, elect to terminate this Lease. In
addition, notwithstanding anything to the contrary contained in Subsections or
24.2, if the Premises or the Building is wholly or partially damaged or
destroyed (which partial damage is of such a degree that it requires Tenant to
relocate from the Premises) within the final twenty-four (24) months of the
Term, and no renewal rights have been exercised prior to such damage or
destruction and Landlord elects to terminate all other leases for premises
within the Building similarly affected by such damage or destruction during the
final twenty-four (24) months of such lease term, Landlord may, at its option,
by giving written notice prior to substantial completion of the repairs, and in
no event later than sixty (60) days after the Damage Notice Date, elect to
terminate this Lease.

 

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24.5 Effective Date of a Lease Termination. Any notice of Tenant’s election to
terminate under this Section 24 shall include a statement of the effective date
of such termination, which shall not be more than sixty (60) days after the date
such notice is delivered; provided, however, that the immediately preceding
clause shall not apply to Tenant’s Damage Termination Notice (as such term is
defined in Subsection 24.2.2) and Tenant’s Non-Insured Damage Termination Notice
(as such term is defined in Subsection 24.3.2). Any notice of Landlord’s
election to terminate under this Section 24 shall be effective (a) on the date
Landlord delivers the notice, if the damage or destruction shall have prevented
Tenant from conducting business at the Premises, or (b) on the sixtieth
(60th) day after delivery of the notice, in the event that Tenant shall not have
been so prevented from conducting business at the Premises. If Landlord
terminates this Lease under this Section 24 and thereafter restores the Building
to substantially the same condition existing prior to the damage or destruction,
then Tenant shall have the right to deliver to Landlord, not later than sixty
(60) days following commencement of such work of restoration, a notice electing
to complete the term of this Lease in which event Landlord will restore the
Premises to its condition prior to such damage as a part of such work of
restoration.

24.6 Abatement of Rent. In the event that all or any portion of the Premises
shall be rendered inaccessible or unusable to Tenant other than as a result of
an act or omission of Tenant which was neither insured nor required to be
insured under this Lease, then Rent shall be reduced proportionately for such
portion of the Premises as shall be rendered inaccessible or unusable to Tenant,
and unused by Tenant, during the period of time that such portion is unusable or
inaccessible to Tenant, and unused by Tenant.

24.7 Destruction of Tenant’s Personal Property, Retrofit Work or Property of the
Tenant Parties. In the event a Casualty causes damage to or destruction of the
Premises or the Building or the Facility, under no circumstances shall Landlord
be required to repair damage to, or make any repairs to or replacements of,
Tenant’s Personal Property (as such term is defined in Subsection 6.2.4 above).
However, as part of Operating Expenses, Landlord shall cause to be insured
retrofit work and Alterations that do not consist of Tenant’s Personal Property
and shall cause proceeds of such insurance to be applied to the cost of
repairing or restoring such retrofit work and Alterations. Landlord shall have
no responsibility for any contents placed or kept in or on the Premises or the
Building or the Facility by Tenant or the Tenant Parties.

 

25. EMINENT DOMAIN.

25.1 Definitions. The following terms shall have the indicated definitions as
used herein: (a) “Condemnation” or “Taking” means (i) the exercise of any
governmental power, whether by legal proceedings or otherwise, by a Condemnor
and/or (ii) a voluntary sale or transfer by Landlord to any Condemnor, while
legal proceedings for eminent domain are pending; (b) “Date of Taking” means the
date the Condemnor has the right to possession of the property being condemned;
(c) “Award” means all compensation, sums, or anything of value awarded, paid, or
received on a total or partial Condemnation; and (d) “Condemnor” means any
public or quasi-public authority, or private corporation or individual, having
the power of eminent domain.

25.2 Permanent Taking.

25.2.1 Total Taking. If the Premises are totally taken by Condemnation, this
Lease shall terminate on the Date of Taking.

25.2.2 Partial Taking; Common Areas.

 

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(a) Tenant’s Rights. If any portion of the Premises is taken by Condemnation,
this Lease shall remain in effect, except that Tenant shall have the right to
elect to terminate this Lease if twenty-five percent (25%) or more of the
rentable square footage of the Premises is taken, or if the portion taken
renders the remainder of the Premises economically unusable by Tenant, as
reasonably determined by Tenant’s licensed architect. To be effective, such
election to terminate must be made by written notice delivered to Landlord
within thirty (30) days after the Decision Period (as such term is defined in
Subsection 25.2.3 below). Tenant’s notice shall contain a clear and unequivocal
statement of its election to terminate and its reasons for this election.

(b) Interference. If any part of the Common Areas of the Facility is taken by
Condemnation, this Lease shall remain in full force and effect so long as there
is no material interference with access to the Premises. If such a Taking
materially interferes with access to the Premises, either party may elect to
terminate this Lease pursuant to this Section 25.

(c) Remaining Leases. If twenty-five percent (25%) or more of the Building or
the Facility is taken by Condemnation (whether or not any Portion of the
Premises shall have been taken), Landlord and Tenant may elect to terminate this
Lease in the manner prescribed herein, provided that in the event that Landlord
seeks to exercise its right to terminate this Lease, Landlord shall also
terminate any remaining leases of tenants similarly affected in the Building.

25.2.3 Termination or Abatement. If either party elects to terminate this Lease
under the provisions of Subsection 25.2.2 (such party is hereinafter referred to
as the “Terminating Party”), it must terminate by giving notice to the other
party (the “Non-terminating Party”) within thirty (30) days after the nature and
extent of the Taking have been finally determined (the “Decision Period”). The
Terminating Party shall notify the Non-terminating Party of the date of
termination, which date shall not be earlier than sixty (60) days after the
Terminating Party has notified the Nonterminating Party of its election to
terminate, nor later than the Date of Taking. If such notice of termination is
not given within the Decision Period, this Lease shall continue in full force
and effect except that the Minimum Monthly Rent and Tenant’s Percentage Share
shall be reduced by a fraction, the numerator of which is the rentable square
footage taken from the Premises and the denominator of which is the rentable
square footage in the Premises prior to the Taking.

25.2.4 Restoration. If there is a partial Taking of the Premises and this Lease
remains in full force and effect pursuant to this Section 25, Landlord, at its
cost, shall accomplish all necessary restoration so that the Premises are
returned as near as practical to their condition immediately prior to the Date
of Taking, but in no event shall Landlord be obligated to expend more for such
restoration than the extent of funds actually paid to Landlord by the Condemnor.
Landlord shall have the right to deliver to Tenant a notice at any time prior to
the date Landlord’s contractors certified to Landlord and Tenant as the date
estimated that such work would be completed whereby Landlord sets forth a
revised completion date, upon receipt of which Tenant shall have thirty (30)
days to elect whether or not to terminate this Lease or to approve the revised
completion date.

25.2.5 Award. Any Award arising from the Condemnation or the settlement thereof
shall belong to and be paid to Landlord, and Tenant hereby assigns to Landlord
any right of Tenant thereto, except that Tenant shall receive from the Award, to
the extent that Landlord receives the Award, compensation for the following, if
specified by amount in the Award by the Condemnor, so long as it does not reduce
Landlord’s Award with respect to the real property: Tenant’s trade fixtures,
tangible personal property, goodwill, loss of business, and relocation expenses.
Tenant shall have the right to participate in condemnation proceedings for the
purposes permitted under this Section 25 and to complain against the Condemnor
authority for a separate award for such losses. In all events, Landlord shall be
solely entitled to all Awards with respect to the real property, including the
bonus value of the leasehold.

 

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25.3 Temporary Taking. No temporary taking of the Premises or any part of the
Premises and/or of Tenant’s rights to the Premises or under this Lease shall
terminate this Lease or give Tenant any right to any abatement of any rents owed
to Landlord pursuant to this Lease, unless such temporary taking exceeds, or is
contractually in excess of, a period of one (1) year from the date of such
taking, in which event Tenant shall have a right to terminate this Lease
pursuant to the termination procedures granted to Tenant in the case of a repair
which cannot be completed within one (1) year as set forth in Section 24.2.2
above. effective at the end of such one (1) year period. Any award made to
Tenant by reason of such temporary taking shall belong entirely to Tenant;
provided, however, that if the remaining portion of the Premises is not
sufficient to allow Tenant to effectively conduct its business in such remaining
portion, and if Tenant does not conduct its business from such remaining
portion, then the Minimum Monthly Rent and Tenant’s Percentage Share of
Operating Expenses allocable to such remaining portion shall be abated for the
entire Premises, for such time as Tenant continues to be so prevented from
using, and does not use, the Premises.

 

26. SALE BY LANDLORD.

In the event Landlord shall sell, assign, convey, or transfer its interest in
the Facility or any part of the Facility, Tenant agrees to attorn to such
transferee, assignee, or new owner. If all of Landlord’s interest in the
Facility shall be sold, assigned, conveyed, or transferred, then upon
consummation of such sale, assignment, conveyance, or transfer, then Landlord
shall, to the extent that such transferee, assignee or new owner assumes
Landlord’s liability and obligations accruing or to be performed from and after
the date of such sale, assignment, transfer or conveyance, be freed and relieved
from all liability and obligations accruing or to be performed from and after
the date of such sale, assignment, transfer, or conveyance, and in such event
Tenant agrees to look solely to the responsibility of such transferee, assignee,
or new owner. In the event of such sale, assignment, transfer, or conveyance,
Landlord shall transfer, or in lieu thereof grant a credit at closing, to such
transferee, assignee, or new owner of the Facility the balance of the Deposit,
if any, remaining after lawful deductions and in accordance with applicable Law,
after notice to Tenant, and Landlord shall thereupon be relieved of all
liability with respect to the Deposit. Notwithstanding the foregoing, no sale,
conveyance, transfer, or assignment (other than an arms-length foreclosure or
deed in lieu of foreclosure) shall relieve Landlord of its obligations hereunder
unless and until the transferee shall have assumed and agreed to perform all of
Landlord’s obligations coming due under the Lease from and after the effective
date of such transaction. Landlord shall not be relieved of any obligations that
shall have accrued with respect to the period prior to the effective date of
such transfer. Tenant shall only be required to look to the new landlord for the
fulfillment of Landlord’s obligations under this Lease.

 

27. ESTOPPEL CERTIFICATES.

Upon either party’s prior request from time to time, the other party shall
execute, acknowledge, and deliver to the requesting party, not later than
fifteen (15) days after such request, a statement in the form attached hereto as
Exhibit K (a) certifying the date of commencement of this Lease, (b) stating
that this Lease is unmodified and in full force and effect (or if there have
been modifications, that this Lease is in full force and effect as modified and
the date and nature of such modifications), (c) stating the dates to which Rent
has been paid, (d) acknowledging that there are not, to the certifying party’s
actual knowledge, any uncured defaults on the part of the other party, or
specifying each such default if any are claimed, and (e) setting forth such
other matters as may reasonably be requested. Landlord and Tenant intend that
any such statement delivered pursuant to this Section may be relied upon by any
permitted subtenant, assignee, or lender of Tenant, by the mortgagee or the
beneficiary of any deed of trust, or by any purchaser or prospective purchaser
of the Facility. If either party’s failure to deliver such statement within the
required time is not cured within fifteen (15) days after the requesting party’s
delivery of written notice of such default, such failure to deliver the
statement shall, at the requesting party’s option

 

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(without any further notice or cure period otherwise provided under this Lease),
be a material default under this Lease by the non-performing party, and it shall
be conclusive upon the non-performing party that (i) this Lease is then in full
force and effect, without modification except as may be represented by the
requesting party, (ii) there are no uncured defaults in the requesting party’s
performance, and (iii) not more than one month’s Rent has been paid in advance.

 

28. REQUIREMENTS OF LANDLORD’S LENDERS.

28.1 Financing Condition. Landlord may from time to time desire to mortgage all
or a portion of the Facility for the purpose of securing financing from an
institutional lender. In the event such institutional lender not affiliated to
Landlord requires, as a condition of granting Landlord such financing, that this
Lease be amended or modified, then Tenant shall, within ten (10) days after
Landlord’s request, consent to and execute any such reasonable amendment or
modification of this Lease; provided, however, that such modification or
amendment only concerns (a) the lender’s right to notification, (b) requirements
for the lender’s prior consent or approval for any amendment, modification, or
early termination of the Lease unless specifically granted in the Lease, for any
waiver of any of the terms or conditions of the Lease to be performed or
observed by Tenant, or for any estoppel certificate to be provided by Landlord,
(c) restrictions on prepayments of Rent (unless required by this Lease), (d) the
lender’s right to require that rents be paid directly to the lender upon default
of Landlord under the loan made by such lender and Notice to Tenant, (e) the
resolution of ambiguities or correction or errors or omissions contained in this
Lease, (f) restrictions on Tenant’s ability to subordinate this Lease to junior
financing, and/or (g) such other matters as Tenant may consent to, which consent
shall not be unreasonably withheld. The parties acknowledge, however, that it
would not be unreasonable for Tenant to withhold consent to any modification
that affects the length of the Term or increases the Rent payable by Tenant
hereunder or otherwise increases Tenant’s obligations (other than notice
requirements and other similarly ministerial obligations) or diminishes Tenant’s
rights under this Lease.

28.2 Mortgagee Protection. Tenant agrees to give any present or future mortgagee
and/or trust deed holders, by registered mail, a copy of any notice of default
served upon Landlord, provided that prior to such notice Tenant has been
notified, in writing (by way of notice of assignment of rents and leases,
execution of nondisturbance agreement, or otherwise), of the address of such
mortgagee and/or trust deed holder. Tenant further agrees that if Landlord shall
have failed to cure such default within the time provided for in this Lease (if
any), then the mortgagees and/or trust deed holders shall have an additional
thirty (30) days within which to cure such default or if such default cannot be
cured within that time, then such reasonable additional time as may be necessary
if, within such thirty (30) days, any mortgagee and/or trust deed holder has
commenced and is diligently pursuing the remedies necessary to cure such default
but in no event exceeding ninety (90) days after expiration of Landlord’s cure
period; provided, however, that if the default by Landlord is of such a nature
that it may not be cured by such holder without the holder becoming owner of the
Building and/or Facility, and so long as Tenant receives a commercially
reasonable non-disturbance agreement from such holder, Tenant shall not exercise
any rights to terminate this Lease other than any rights to terminate set forth
in Exhibit B (but Tenant may exercise any offset or cure rights granted to
Tenant by this Lease and such rights shall not be abrogated by the provisions of
this Section 28), if such holder (a) commences a judicial or non-judicial
foreclosure of Landlord’s interest in the Building and/or Facility within sixty
(60) days of the expiration of Landlord’s cure period, (b) thereafter uses
reasonable efforts to complete the foreclosure of Landlord’s interest in the
Building and/or Facility, and (c) cures such default within thirty (30) days
after the completion of such foreclosure or, if the cure cannot reasonably be
effected within thirty (30) days, commences the cure within such thirty (30) day
period and thereafter diligently pursues it to completion but not in any event
to exceed ninety (90) days after completion of such foreclosure. Such holder
shall have the right to perform all obligations of Landlord under this Lease on
behalf of Landlord without becoming an owner of the Building and/or Facility,
but such holder shall have no obligation to cure any default under this Lease
unless it becomes an owner of the Building and/or Facility, in which event this
Lease shall not be terminated while such remedies are being diligently pursued.

 

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29. INTENTIONALLY DELETED.

 

30. ATTORNEYS’ FEES.

In the event either party requires the services of an attorney in connection
with enforcing the terms of this Lease (including an action or proceeding
between one party and the trustee or debtor in possession while the other party
is a debtor in a proceeding under the Bankruptcy Code (Title 11 of the United
States Code or any successor statute to such Code), or in the event suit is
brought for the recovery of any amount due and owing under this Lease, the
prevailing party shall be entitled to recover all its costs and expenses in
connection therewith (including court costs and reasonable attorneys’ fees,
costs and disbursements) from the unsuccessful party, whether or not such
action, proceeding or appeal is prosecuted to judgment or other final
determination. The term “prevailing party” shall include, without limitation, a
party who obtains legal counsel or brings an action against the other party by
reason of the other party’s breach or default and substantially obtains the
relief sought, whether by compromise, settlement, or judgment. If such
prevailing party shall recover in any such action, proceeding, or appeal, such
costs and expenses (including court costs and reasonable attorneys’ fees, costs
and disbursements) shall be included in and as a part of such judgment.

 

31. NON-WAIVER.

The waiver by Landlord or Tenant of any term, covenant, agreement or condition
contained in this Lease shall not be deemed to be a waiver of any subsequent
breach of the same or of any other term, covenant, agreement, condition or
provision of this Lease. Nor shall any consent by Landlord or Tenant in any one
instance dispense with necessity of consent in any subsequent or other instance.
Nor shall any custom or practice that may develop between the parties in the
administration of this Lease be construed to waive or lessen the right of
Landlord or Tenant to insist upon performance by the other in strict accordance
with all of the terms, covenants, agreements, conditions, and provisions of this
Lease. The subsequent acceptance by a party hereto of any payment owed by the
other party to that party under this Lease, or the payment of Rent by Tenant,
shall not be deemed to be a waiver of any preceding breach by the other party of
any term, covenant, agreement, condition, or provision of this Lease, other than
the failure of the other party to make the specific payment so accepted by that
party, regardless of either party’s knowledge of such preceding breach at the
time of the making or acceptance of such payment.

 

32. NOTICES.

All notices, notifications, demands, requests, consents, approvals,
designations, elections, and waivers that may or are required to be given by
either party to the other hereunder shall be in writing and shall be deemed to
have been duly given when delivered personally, or one business day after such
notice or demand is sent by a reliable overnight courier service, or three
(3) business days after it is sent by United States certified or registered
mail, in each case with postage prepaid and the notice or demand addressed to
the other party at its address set forth in Subsection 1.1.2 of this Lease, or
to such other place as such party may from time to time by like notice
designate.

 

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33. JOINT AND SEVERAL LIABILITY.

If Tenant consists of a partnership or more than one person or other entity
(collectively, the “Tenant Constituents”), then Tenant’s obligations hereunder
shall be joint and several as between all such Tenant Constituents (if more than
one) and as between each all constituent general partners of any partnership
constituting any Tenant Constituent. No partner, member or shareholder of the
Original Tenant or Permitted Affiliate shall have any personal liability for
breach of any covenant or obligation of the Original Tenant under this Lease,
and no recourse shall be had or be enforceable against the assets of any
partner, member, or shareholder of the Original Tenant or Permitted Affiliate
for any payment of any sums due to Landlord or for enforcement of any other
relief based upon any claim made by Landlord for the breach of any of the
Original Tenant’s covenants or obligations under this Lease. Notwithstanding
anything to the contrary set forth in this Section 33, Landlord shall only
pursue the assets of Tenant only for recovery of any sums due under this Lease
and shall not proceed against the assets of individual partners of Tenant.

 

34. TIME.

Subject to the provisions of Section 18 (Force Majeure), time is of the essence
of this Lease and each and all of its provisions.

 

35. SUCCESSORS.

Subject to the provisions of Section 14 (Assignment and Subletting) and
Section 26 (Sale by Landlord), and except as otherwise provided to the contrary
in this Lease, the terms, covenants, and conditions herein contained shall apply
to, bind, and inure to the benefits of the heirs, successors, executors,
administrators, and permitted assigns of the respective parties hereto.

 

36. ENTIRE AGREEMENT.

This Lease (including the exhibits, riders, addenda, and schedules referred to
herein and made a part hereof) embodies the entire agreement between, and
understanding of, the parties and supersedes all prior agreements and
understandings (oral or written) between the parties with respect to the subject
matter hereof. This Lease shall not be modified by any oral agreement, either
express or implied, and all modifications hereof shall be in writing and signed
by both Landlord and Tenant.

 

37. RESTRICTIONS ON OPTIONS.

37.1 Definition. As used in this Section 37, the word “Option” shall mean any of
the following rights or options of Tenant, if any such rights or options are
granted pursuant to an addendum or other modification to this standard lease
form: (a) any right or option to extend the Term, (b) any option or any right of
first refusal or first offer to lease the Premises or any other space within the
Facility or other property of Landlord or its affiliates, and (c) any right or
option of Tenant to terminate or cancel this Lease prior to the last day of the
initial Term contemplated by Subsection 2.2.4.

37.2 Options Personal. Each Option, if any, granted to Tenant in this Lease is
personal to the Original Tenant and may be exercised (i) only by the Original
Tenant or a Permitted Affiliate while the Original Tenant and/or a Permitted
Affiliate are directly (and not through subleases) occupying more than
seventy-five percent (75%) of the Premises or (ii) if the Premises is either the
practice office of the Original Tenant and/or a Permitted Affiliate or one of
two practice offices of the Original Tenant and/or a Permitted Affiliate, in the
City of San Francisco, and may not be exercised or assigned, voluntarily or
involuntarily, by or to any person or entity other than the Original Tenant or a
Permitted Affiliate. The

 

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Options, if any, herein granted to the Original Tenant or a Permitted Affiliate
are not assignable separate and apart from this Lease, nor may any Option be
separated from this Lease in any manner, by reservation or otherwise.

37.3 Multiple Options. In the event that Tenant has multiple Options to extend
or renew the Term, a later Option cannot be exercised unless the prior Option to
extend or renew this Lease has been so exercised.

37.4 Strict Enforcement of Conditions and Limitations Upon Options.

37.4.1 Tenant hereby specifically acknowledges and agrees that the time
limitations upon the exercise of any Option will be strictly enforced, that any
attempt to exercise such Option at any other time shall be void and of no force
or effect, and that if any such Option is not exercised within the applicable
time period, Landlord intends immediately thereafter to undertake appropriate
efforts relating to the marketing or management of the space affected by the
Option. The period of time within which an Option may be exercised shall not be
extended or enlarged by reason of Tenant’s inability to exercise such Option
because of the provisions of this Subsection or for any other reason whatsoever.

37.4.2 Tenant further agrees that if an Event of Default has occurred and is
continuing and Landlord has given Tenant prior notice thereof, on the date of
giving the required notice of exercise of such Option, such notice shall at
Landlord’s sole election be totally ineffective, in which event this Lease shall
expire at the end of the Term as theretofore in effect. Notwithstanding any
provision of this Lease to the contrary, all Options shall automatically be
void, and shall have no further effect, upon the commencement of any holdover by
Tenant after the expiration or earlier termination of the Term.

37.5 Events of Bankruptcy. In addition to those events and occurrences
constituting defaults or Events of Default under other provisions of this Lease,
the occurrence of any of the following events shall also constitute a default
and Event of Default for purposes of Subsection 37.4:

(a) Filing by Tenant of a voluntary petition under any applicable bankruptcy
Law, or the issuance of an order for relief entered under any applicable
bankruptcy Law, or the filing by Tenant of any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief for Tenant under the present or any future
applicable Law relative to bankruptcy, insolvency, or other relief for debtors,
or Tenant’s consent to or acquiescence in the appointment of any trustee,
receiver, conservator, or liquidator of Tenant or of all or any substantial part
of its properties or its interest in the Premises (the term “acquiesce,” as used
in this clause, includes, but is not limited to, the failure to file a petition
or motion to vacate, appeal, or discharge any order, judgment, or decree within
sixty (60) days after entry of such order, judgment, or decree);

(b) Issuance or entry, by a court of competent jurisdiction, of any order,
judgment, or decree approving a petition filed against Tenant seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future applicable Law
relating to bankruptcy, insolvency, or other relief for debtors, and
acquiescence by Tenant in the entry of such order, judgment, or decree; or the
failure of such order, judgment, or decree to be vacated or stayed within an
aggregate of ninety (90) days (whether or not consecutive) after the date of
entry thereof; or the appointment, without the consent or acquiescence of
Tenant, of any trustee, receiver, conservator, or liquidator of Tenant or of all
or any substantial part of its properties or its interest in the Premises and
the failure of such appointment to be vacated or stayed within an aggregate of
ninety (90) days (whether or not consecutive);

 

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(c) Tenant’s making a general arrangement or general assignment for the benefit
of creditors or taking any other similar action for the protection or benefit of
creditors.

 

38. RECORDING.

Tenant shall not record this Lease or any memorandum hereof without Landlord’s
prior written consent. Further, upon Landlord’s written request at any time on
or after the expiration or earlier termination of this Lease, Tenant shall
promptly execute, acknowledge, and deliver to Landlord any quitclaim deed or
other document required by any reputable title company, to remove any cloud or
encumbrance created by this Lease upon the Facility. Tenant shall nevertheless
have the right to record a Request for Notice of Default and Sale under any then
applicable Law.

 

39. AUTHORIZATION TO SIGN LEASE.

Each individual executing this Lease on behalf of Landlord represents and
warrants that he/she is duly authorized to do so pursuant to authority delegated
by Landlord’s duly authorized partnership formation documents and that this
Lease is binding on Landlord in accordance with its terms. If Tenant is a
partnership, each individual executing this Lease on behalf of Tenant represents
and warrants that he/she is duly authorized to execute and deliver this Lease on
behalf of Tenant in accordance with the terms of such entity’s partnership
agreement, and that this Lease is binding upon Tenant in accordance with its
terms. If Landlord or Tenant consist of more than one legal entity, the
foregoing representations, warranties, and covenants shall apply to any such
entity that is a corporation or partnership, as the case may be.

 

40. BROKER PARTICIPATION.

In consideration for brokerage services rendered to Landlord in this
transaction, Landlord shall pay its and Tenant’s brokers (which brokers are
identified in Subsection 1.1.10 above). Landlord shall pay its broker a
commission as set forth in a separate agreement between such parties. Landlord
shall pay Tenant’s broker a commission equal to One Dollar and 50/100 ($1.50)
per rentable square foot per year of direct lease term (prorated for partial
years and capped at Ten Dollars ($10.00). One-half of the commission due to
Tenant’s broker for the Premises shall be paid on full execution and delivery of
this Lease. The remaining one-half of the commission due to Tenant’s broker
shall be paid, for the eighth (8th) floor, upon the commencement of Tenant’s
occupancy thereof, and for the fifth (5th), sixth (6th) and seventh
(7th) floors, on or before June 15, 2008. Except as otherwise set forth in the
preceding sentences, each party agrees to indemnify, defend, and hold harmless
the other party from any claim or loss arising out of any actual or alleged
dealings of the indemnifying party with any real estate broker, agents or finder
in connection with this transaction.

 

41. SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS.

The respective parties’ remedies, payment obligations, indemnities, waivers and
releases under this Lease, with respect to Tenant’s use or possession of the
Premises during the Term and any holdover period, and with respect any cost or
expense incurred during or with respect to the Term or any holdover period,
shall survive the termination of this Lease.

 

42. PARKING.

42.1 Subject to the terms and conditions of this Section 42, Tenant shall be
entitled but not obligated to use, in common with other tenants and Landlord and
its agents, the number of undesignated vehicle parking spaces allocated to
Tenant in Subsection 1.1.11, and which such spaces will be available

 

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at all times during the Term for Tenant’s use; provided, however, that if the
size of the Premises shall hereafter be increased or reduced, whether pursuant
to an amendment of lease or any modification to this Lease or otherwise, the
number of parking spaces allocated to Tenant shall automatically be increased or
reduced pro rata, as the case may be, provided further, however, that if the
number of parking spaces in the Building’s parking facility is expanded, then
the number of parking spaces allocated to Tenant shall be increased pro rata.

42.2 The parking facility shall be operated on a parking assist/valet basis, and
the hours of such operation shall be extended if demand warrants the same and
provided that the cost of such additional operation is paid by the tenants of
the Building who are users of such extended hours program.

42.3 Tenant’s use of such parking spaces shall be subject to payment by Tenant
of such standard monthly parking rates, if any, as may be charged from time to
time to persons other than the officers and employees of Landlord and its
affiliates, and subject to such non-discriminatory rules and regulations as may
be reasonably established or altered from time to time by Landlord or its
manager of such parking facilities, provided that, subject to any Laws, Tenant
shall have access to the Building’s parking facility at all times (i.e., 365
days a year, 24 hours a day) and provided further that such rates do not exceed
any rates charged to other tenants of the Building nor do such rates exceed fair
market rates for generally comparable parking facilities in Class A office
buildings located within a two (2) block radius of the Building. If a dispute
arises between the parties regarding the fair market rate for Tenant’s vehicle
parking spaces in the Building’s parking facility, it shall be resolved by
arbitration and in accordance with the provisions of Exhibit F attached to this
Lease.

42.4 Tenant shall have the right to increase the number of parking spaces it
contracts to use, subject to the maximum number set forth in Subsection 1.1.9,
by providing Landlord with sixty (60) days’ written notice of its intent to do
same. Tenant shall have the right to decrease the number of parking spaces it
contracts to use by providing Landlord with thirty (30) days’ written notice of
its intent to do same.

42.5 At Landlord’s request, Tenant (or its designated employees with parking
privileges) shall enter into commercially reasonable parking licenses or lease
agreements or other arrangements then in use by Landlord (or Landlord’s operator
of the parking facilities) with respect to such monthly parking. Upon request,
Tenant shall provide Landlord with the license plate numbers of all vehicles
that Tenant’s employees park in the Building’s parking facility.

42.6 At all times, the Building’s parking facility shall accommodate
approximately thirty-three (33) cars to be parked on a visitor or “short term”
parking basis and on an assist/valet basis, subject to governmental requirements
and restrictions. In addition, a portion of the Building’s parking facility
shall be reserved for car pool parking (approximately 19 cars) and handicap
parking (approximately five (5) cars) and motorcycle parking. If Tenant parks
more vehicles in the Facility’s parking area than are permitted under this
Section, Landlord shall have the right, without limitation to Landlord’s other
remedies under this Lease, to collect from Tenant a daily charge, to be
reasonably determined by Landlord, for each such additional vehicle.

42.7 Provided that Landlord determines that there has been a mutually agreed
demonstrated need for off-site valet parking, Landlord shall attempt to contract
for such service, subject to the availability of suitable off-site facilities
within a reasonable proximity to the Building, and subject to the agreement of
the users of such service (including Tenant) to pay for all of the cost of such
off-site valet parking operation.

 

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43. SEVERABILITY.

Should any provision of this Lease be illegal, void, invalid, inoperative, or
unenforceable, no other provision of this Lease shall be affected thereby, and
the remainder of this Lease shall be effective as though such illegal, void,
invalid, inoperative, or unenforceable provision had not been included herein.

 

44. CERTAIN RIGHTS RESERVED BY LANDLORD.

Landlord hereby expressly reserves the rights set forth in the Subsections of
this Section 44. Except to the extent otherwise expressly provided elsewhere in
this Lease or otherwise required by Law, such rights shall be exercisable
(a) without notice, (b) without liability to Tenant for damage or injury to
property, persons, or business, (c) without effecting a constructive or actual
eviction of Tenant or disturbance of Tenant’s use, possession, or enjoyment of
its Premises, and (d) without giving rise to any claim for setoff or abatement
of Rent; provided, however, that Landlord shall use commercially reasonable
efforts to minimize any interference with Tenant’s business operations in
Landlord’s exercise of its rights hereunder. The enumeration of such rights of
Landlord in the following Subsections is not intended to limit any other rights
of Landlord or Tenant (or excuse Landlord from performing its express
obligations under this Lease), whether expressed or implied, at law or under
other provisions of this Lease.

44.1 Repairs. Landlord shall have the right to decorate and make repairs,
alterations, additions, changes, and/or improvements, whether structural or
otherwise, in and about the Building and elsewhere in the Facility, including,
without limitation, construction of additional buildings or other new
improvements and changes in the location, size, shape, and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, sidewalks, and walkways;
provided, however that Landlord shall have no right to change the general
concept and character of the main ground floor lobby of the Building. For such
purposes Landlord may enter upon the Premises and, during the continuance of any
such work, temporarily close doors, entryways, public space and corridors in the
Building or elsewhere in the Facility, to interrupt or temporarily suspend
building services and facilities and to change the arrangement and location of
entrances, or passageways, doors and doorways, corridors, elevators, stairs,
toilets, or other public parts of the Building or Facility, all without
abatement of Rent and without affecting any of Tenant’s obligations hereunder,
except as otherwise expressly provided in this Lease (e.g., Subsections 17, 22.2
and 24.6).

44.2 Security. Landlord shall, in compliance with all applicable leases, have
the right to take all such reasonable measures as Landlord may deem advisable
for the security of the Building or the Facility and their occupants, including,
without limitation, the lawful search of any person entering or leaving the
Building, the evacuation of the Building (or any part thereof) for cause,
suspected cause, or for drill purposes, the temporary denial of access to the
Building (or any part thereof), and the closing of the Building after normal
business hours and on Sundays and holidays, subject, however, to Tenant’s right
to admittance, when the Building is so closed, under such reasonable regulations
as Landlord may prescribe from time to time.

 

45. WAIVER OF JURY TRIAL.

EACH PARTY HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS LEASE. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY TENANT AND TENANT
ACKNOWLEDGES THAT NEITHER LANDLORD NOR ANY PERSON ACTING ON BEHALF OF LANDLORD
HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR
IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.

 

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46. INTERPRETATION.

The words “Landlord” and “Tenant” as used herein shall include the plural as
well as the singular and, when appropriate, shall refer to action taken by or on
behalf of Landlord or Tenant by their respective employees, agents, or
authorized representatives. Words in masculine gender include the feminine and
neuter. The titles of the Sections, Subsections, and other provisions of this
Lease are for convenience only and they shall not in any way limit or amplify
the terms or provisions of this Lease. All provisions, whether covenants or
conditions, on the part of Tenant shall be deemed to be both covenants and
conditions. This Lease shall not be construed against either party more or less
favorably by reason of authorship of origin of language. The only inference that
shall be drawn from the fact of any provision of this Lease having been
stricken, crossed out, or otherwise deleted is that said stricken, crossed out,
or deleted provision is not a part of this Lease; no inference shall be drawn to
the effect that the parties intended the opposite of what the stricken, crossed
out, or deleted provision would have provided for. This Lease shall in all
respects be governed by and construed and enforced in accordance with the Laws
of the State of California, and any litigation concerning this Lease between the
parties hereto shall be initiated in the City and County of San Francisco.

 

47. COOPERATION WITH GOVERNMENT SPONSORED PROGRAMS.

47.1 In General. Tenant hereby covenants and agrees, at its sole cost and
expense, to participate in and cooperate with the requirements of any and all
governmentally mandated programs adopted for the Building or the Facility
concerning employment, transportation system management, child care facilities,
recycling, energy or water conservation, safety, emergency training procedures
and drills, or the like; provided, however, that a failure to so participate and
cooperate with such requirements shall not be deemed a default to the extent
that Tenant’s failure to participate and cooperate with such requirements shall
not have any adverse consequences to Landlord. Tenant shall designate floor
wardens and assistant floor wardens for each floor of the Premises. Upon
reasonable notice from Landlord, Tenant shall cause its floor wardens to attend
Landlord’s emergency response training during regular business hours. Tenant
shall establish appropriate procedures for communicating Landlord’s emergency
procedures to all of Tenant’s employees occupying the Premises.

47.2 Transportation. Tenant shall fully comply with all present or future
governmentally mandated programs intended to manage parking, transportation or
traffic in and around the Building, and in connection therewith, Tenant shall
take responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities; provided, however, that a failure
to so participate and cooperate with such requirements shall not be deemed a
default but only to the extent that Tenant’s failure to participate and
cooperate with such requirements shall not have any adverse consequences to
Landlord. Such programs may include, without limitation: (a) restrictions on the
number of peak-hour vehicle trips generated by Tenant; (b) increased vehicle
occupancy; (c) implementation of an in-house ridesharing program and an employee
transportation coordinator; (d) working with employees and any Building or
area-wide ridesharing program manager; (e) instituting employer-sponsored
incentives (financial or in-kind) to encourage employees to rideshare; and
(f) utilizing flexible work shifts for employees.

47.3 Assistance. Pursuant to the City of San Francisco Planning Code
Section 163, the Landlord has entered into an agreement with the San Francisco
Department of City Planning to provide and implement a transportation management
program for tenants of the Building and to participate in a

 

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program designed to coordinate commute alternatives marketing and brokerage for
employees in the Greater Downtown San Francisco, California area. During the
term of the Tenant’s tenancy, Landlord agrees to provide transportation
brokerage and commute assistance services, as part of Operating Expenses, to the
Tenant to assist the Tenant in meeting the transportation needs of its employees
to the extent required by law. Tenant agrees to cooperate with and assist the
Landlord’s transportation management coordinator (the “Coordinator”), through
designation of a responsible employee, to distribute to Tenant’s employees
written materials promoting and encouraging the use of public transit and/or
ridesharing, and distribute and return to the Coordinator transportation survey
questionnaire forms; provided, however, that a failure to so participate and
cooperate with such requirements shall not be deemed a default under this Lease
but only to the extent that Tenant’s failure to participate and cooperate with
such requirements shall not have any adverse consequences for Landlord. Tenant
may agree, at its option, to participate in other activities required of
Landlord and/or ridesharing by employees in the Building.

 

48. PARTIES TO ACT REASONABLY AND IN GOOD FAITH.

Except in those instances where this Lease provides for a contrary standard,
whenever in this Lease the consent or approval of the Landlord or Tenant is
required, such consent or approval shall not be unreasonably withheld,
conditioned or delayed (except, however, with respect to any Landlord consent,
for matters which, in the opinion of a neutral, qualified third-party expert,
could have a material adverse effect on the Building’s plumbing, heating,
mechanical, life safety, ventilation, air conditioning, or electrical systems,
could affect the structural integrity of the Building, or could affect the
exterior appearance of the Building, Landlord may withhold such consent or
approval in its sole discretion but shall act in good faith, unless this Lease
elsewhere expressly provides other standards for such matters). Except in those
instances where a contrary standard or right is set forth in this Lease,
whenever the Landlord or Tenant is granted a right to take action, exercise
discretion, or make an allocation, judgment, or other determination, such party
shall act reasonably and in good faith and take no action that might result in
the frustration of the reasonable expectations of a sophisticated tenant and a
sophisticated landlord concerning the benefits to be enjoyed under, and subject
to all the provisions of, this Lease.

 

49. OFFER.

Preparation of this Lease by Landlord or Landlord’s agent and submission of same
to Tenant shall not be deemed an offer to lease and neither party shall act in
reliance on said Lease being thereafter signed. This Lease shall become binding
upon Landlord and Tenant only when fully executed by both Landlord and Tenant.

 

50. LANDLORD’S DISCLOSURE REGARDING HAZARDOUS SUBSTANCES.

50.1 In General. By signing this Lease, Tenant represents that Tenant has read
and understood the required disclosures, if any, of Landlord set forth in the
paragraph below, which disclosures relate to certain Hazardous Substances known
or suspected to exist at the Premises, Building, or Facility, but in doing so
Tenant neither assumes nor releases Landlord from its express obligations with
respect to environmental matters set forth in this Lease.

50.2 Disclosures. California law requires landlords to disclose to tenants the
existence of certain Hazardous Substances. Accordingly, the existence of
gasoline and other automotive fluids, maintenance fluids, copying fluids and
other office supplies and equipment, certain construction and finish materials,
tobacco smoke, cosmetics and other personal items, and asbestos-containing
materials (“ACM”) must be disclosed. Gasoline and other automotive fluids will
likely be found in the garage area of the Building. Cleaning, lubricating and
hydraulic fluids used in the operation and maintenance of the

 

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Building will likely be found in the utility areas of the Building not generally
accessible to Building occupants or the public. Many Building occupants will use
copy machines and printers with associated fluids and toners, and pens, markers,
inks, and office equipment that may contain Hazardous Substances. Certain
adhesives, paints and other construction materials and finishes which will be
used in portions of the Building may contain Hazardous Substances. Building
occupants and other persons entering the Building from time-to-time may use or
carry prescription and non-prescription drugs, perfumes, cosmetics and other
toiletries, and foods and beverages, some of which may contain Hazardous
Substances. Landlord further covenants that any costs related to removal or
remediation of Hazardous Substances which are present as a result of these prior
uses shall not be charged as an Operating Expense. Landlord covenants to comply
during the Term with all local, state and federal laws and regulations
applicable, to Hazardous Substances, including any such laws and regulations
requiring disclosure to tenants regarding the existence of Hazardous Substances
within the Building.

 

51. SIGNAGE

51.1 Grant of Signage Rights. Subject to the terms and conditions of this
Section 51, Tenant shall be entitled to install an appropriate and tasteful
“plaque-type” sign, including its name and logo, (a) at each of the ground floor
main entry doors of the Building, (b) on both sides of the lower level elevator
bank in the lobby of the Building, (c) in each elevator lobby on each full floor
of Tenant’s Premises, and (d) on the main entry doors to the Premises from any
elevator lobbies. Subject to the terms and conditions of this Section 51, Tenant
shall have the right to install in each elevator lobby on each multi-tenant
floor of Tenant’s Premises building standard signage. Landlord and Tenant shall
jointly and reasonably select the location, design, size, construction
materials, and method of installation of the non-multi-tenant floor signage.
Notwithstanding anything to the contrary set forth herein, Tenant shall have the
right to use the same materials and graphics as used by other tenants of the
Building for its signage. Tenant shall have the opportunity to install signage
in the same locations as were granted to PricewaterhouseCoopers relative to its
lease of, among other premises in the Building, the Phase II Premises, so long
as the following conditions are met: (a) Tenant has leased from Landlord more
than 100,000 RSF of space in the Building and occupies same; (b) Tenant pays for
all costs associated with removal, installation and restoration of the signage;
(c) all signage, type, size and installation are subject to Landlord approval.

51.2 Costs and Installation. The costs of Tenant’s signage and the installation
thereof shall be paid for by Tenant, but such costs may be reimbursed from the
Allowance (as such term is defined in Subsection 1.1 of Exhibit B). Tenant shall
adhere to Landlord’s reasonable requirements regarding Tenant’s installation of
Tenant’s signs. At Landlord’s election, Landlord may install Tenant’s ground
floor or exterior signs on Tenant’s behalf. If Landlord does so elect to install
any of Tenant’s Signs, and provided that Landlord shall first provide Tenant
with its estimate of the costs of such installation, Landlord shall be
reimbursed by Tenant (either directly or through a credit against the Allowance)
for the reasonable out-of-pocket cost of such installation.

51.3 Multi-Tenant Directory. Landlord shall provide, at no charge to Tenant,
directory listings on a multi-tenant directory which will consist of a board
identifying Tenant and a computer directory to be installed in the Building’s
main lobby naming Tenant and the names of Tenant’s partners. Tenant shall not be
charged for any changes to directory listings.

 

52. RENEWAL OPTIONS (WITH ARBITRATION)

52.1 Grant of Renewal Options. Subject to the terms and conditions of this
Section and Section 37 of the Lease, and provided Tenant occupies at least
seventy-five percent (75%) of the 84,607 RSF demised as the Phase I and Phase II
Premises, Tenant shall have two (2) options (each, a “Renewal

 

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Option”) to extend the Term for a period of five (5) additional years each
(each, a “Renewal Term”). A Renewal Option shall be exercisable one time only
upon written notice (an “Option Notice”) given to Landlord not fewer than twelve
(12) months prior to the expiration of the “Then Scheduled Term.” As used
herein, the term “Then Scheduled Term” shall mean the Term set forth in
Subsection 1.1.4 of the Lease, as extended by Tenant’s exercise of its rights
under this Section 52.

52.2 Minimum Monthly Rent. For purposes of this Section 52, the term “Minimum
Monthly Rent” shall be deemed to include both the Minimum Monthly Rent payable
pursuant to Subsection 5.1 of the Lease and also any monthly rent paid for any
storage space Tenant may then be leasing from Landlord. In the event the Renewal
Option is validly exercised in accordance with the terms and conditions of this
Section, then the Term shall be extended to include the Renewal Term, during
which all the terms and conditions contained in this Lease shall remain in full
force and effect, except that (a) the Minimum Monthly Rent during such Renewal
Term shall be 100% of the “Then Prevailing Market Rent,” as defined below,
(b) Landlord shall not be obligated to supply, nor shall Tenant be entitled to,
any further tenant improvements or any further allowances therefor or further
rent concessions of any kind in connection with the Renewal Term, except as set
forth in Subsection 52.4 below, and (c) the Base Expense Year and the Base Tax
Year shall be the calendar year in which the first day of the Renewal Term
occurs. Provided that the Renewal Option shall have been validly exercised by
Tenant, the “Then Prevailing Market Rent” shall be determined in the following
manner.

52.2.1 Then Prevailing Market Rent.

(a) The term “Then Prevailing Market Rent” shall mean, as of the time a
determination thereof is to be made, the “effective” rental rate, expressed as a
rental rate per rentable square foot of “AS IS” leased space, being charged in
arms’-length transactions (“Comparable Transactions”) within the sub-areas of
the Financial District of the Building for new leases and renewal leases (and
not for subleases) for space comparable to the Premises (taking into
consideration size, floor level, location of property, build-out and other
factors mentioned below), in the Facility and other Comparable Buildings.
However, in no event shall Then Prevailing Market Rent be less than the Minimum
Monthly Rent payable during the last month of the then current Term.

(b) In considering “Comparable Transactions” for purposes of determining the
Then Prevailing Market Rent for a Renewal Term, appropriate consideration shall
be given to (and where appropriate, adjustments shall be made in deriving the
Then Prevailing Market Rent from the rental rate under Comparable Transactions
because of) any differences between any of the following considerations, unless
excluded under Subsection 52.2.1(c) below: (a) the length of the Renewal Term,
as compared to the term of the lease or renewal term (where such renewal
provisions contain “net effective” language such as that set forth in this
Subsection 52.2.1(b) under such Comparable Transactions, (b) the size and
location within the sub-areas of the Financial District of the Building and the
size, location, and floor level of the Premises and the age and quality of
construction of the Facility and the Premises, as compared to such other space
or such other high-rise office building in Comparable Transactions, (c) services
provided or to be provided by Landlord, as compared to services provided under
Comparable Transactions, (d) base years, CPI adjustments, or escalations, if
applicable, under this Lease (as extended into the Renewal Term), as compared to
such matters under Comparable Transactions, (e) the level, quality or extent of
then existing tenant improvements in the Premises and any agreed upon tenant
improvement allowances or refurbishment allowances provided for the Renewal Term
under this Lease, as compared with the level, quality or extent of any tenant
improvements or such tenant improvement allowances or refurbishment allowances
to be provided under such Comparable Transactions, (f) free rent, (g) utility
costs, relocation or moving allowances, (h) lease takeover/assumption
contributions, and (i) other relevant factors pertaining to the Premises,
Facility, or this Lease (as extended into the Renewal Term), as such factors are
used in Landlord’s determination of Prevailing Market as compared to such
corresponding factors in Comparable Transactions.

 

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52.2.2 Landlord’s Proposed Rental Rate. Landlord’s representatives may at any
time engage in preliminary negotiations with Tenant concerning rental rates that
they would recommend to senior management. However, not earlier than eighteen
(18) and not later than thirteen (13) months before the expiration of the Then
Scheduled Term, Landlord shall give Tenant, within thirty (30) days of request
therefor (provided that Tenant requested such statement not later than fourteen
(14) months prior to the Then Scheduled Term), a formal written statement of
Landlord’s proposed rental rate(s) for the Minimum Monthly Rent for each year of
the proposed Renewal Term (the “Landlord’s Proposed Rental Rate”), as approved
by Landlord’s senior management. Landlord shall set Landlord’s Proposed Rental
Rate at a rate equal to 100% of Landlord’s good faith estimate of the Then
Prevailing Market Rent. If Tenant accepts such estimate of the Then Prevailing
Market Rent, or if the parties agree upon some other rental rate, they shall
immediately execute an amendment to this Lease stating the Minimum Monthly Rent
that shall apply to the Renewal Term.

52.2.3 Arbitration. If Tenant believes that Landlord’s Proposed Rental Rate, as
the same may have been revised in writing during the course of negotiations, is
in excess of the Then Prevailing Market Rent for the Premises, then Tenant may
elect, by delivering written notice (the “Arbitration Notice”) to Landlord not
later than nine (9) months before the expiration of the Then Scheduled Term, to
arbitrate, in the manner described below, the Then Prevailing Market Rent for
the Premises. The Arbitration Notice shall not be effective unless it includes a
statement of Tenant’s own good faith estimate of the Then Prevailing Market Rent
for the Premises (the “Tenant’s Proposed Rental Rate”). In such event, the Then
Prevailing Market Rent shall be determined by arbitration as provided below,
each party being bound to its last written estimate provided to the other party
prior to the commencement of arbitration or with the delivery of Tenant’s
Arbitration Notice. The judgment or the award rendered in any such arbitration
may be entered in any court having jurisdiction and shall be final and binding
upon the parties. The arbitration shall be conducted and determined in San
Francisco, California, in accordance with the American Arbitration Association’s
commercial arbitration rules then pertaining to the metropolitan area in which
the arbitration is conducted, as modified by the following provisions:

(a) Within ten (10) business days after delivery of Tenant’s Arbitration Notice,
Landlord and Tenant shall each, at its cost, appoint an arbitrator. The
arbitrators each shall have at least ten (10) years’ experience with leases in
Comparable Buildings and shall not have previously worked for the party
appointing such arbitrator or their investors or affiliates (for purposes of
determining whether such arbitrator shall have previously been employed, the
fact that such arbitrator shall have previously served as a third party in a
dispute resolution matter shall not apply, but such fact must be fully disclosed
to the other party). If a party does not appoint an arbitrator within such ten
(10) business day period but a qualified arbitrator is appointed by the other
party, the single arbitrator appointed shall be the sole arbitrator and shall
set the Then Prevailing Market Rent. The determination of the arbitrators shall
be limited solely to the issue of whether Landlord’s or Tenant’s estimated Then
Prevailing Market Rent is the closest to the actual Then Prevailing Market Rent
as determined by the arbitrators, taking into account the requirements of
Subsection 52.2.1(c).

(b) The two (2) arbitrators so appointed shall within ten (10) days of the date
of the appointment of the last appointed arbitrator agree upon and appoint a
third arbitrator who shall be qualified under the same criteria as set forth
hereinabove for qualification of the initial two (2) arbitrators.

(c) The three (3) arbitrators shall within thirty (30) days after the
appointment of the third arbitrator reach a decision as to whether Landlord’s or
Tenant’s submitted Then Prevailing Market Rent is the closest to the actual Then
Prevailing Market Rent, and shall use the closest of Landlord’s or Tenant’s
submitted Then Prevailing Market Rent as the Then Prevailing Market Rent for
purposes of calculating the Then Prevailing Market Rent, and shall notify
Landlord and Tenant thereof.

 

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(d) The decision of the majority of the three (3) arbitrators shall be binding
upon Landlord and Tenant.

(e) If the two (2) arbitrators fail to agree upon and appoint a third arbitrator
within the time period provided in Subsection 52.2.3(a) above, then the parties
shall mutually select the third arbitrator. If Landlord and Tenant are unable to
agree upon the third arbitrator within ten (10) days, then either party may,
upon at least five (5) days’ prior written notice to the other party, request
the Presiding Judge of the San Francisco County Superior Court, acting in his
private and nonjudicial capacity, to appoint the third arbitrator. Following the
appointment of the third arbitrator, the panel of arbitrators shall within
thirty (30) days thereafter reach a decision as to whether Landlord’s or
Tenant’s submitted Then Prevailing Market Rent shall be used and shall notify
Landlord and Tenant thereof.

(f) The cost of the arbitrators and the arbitration proceeding shall be paid by
the non-prevailing party.

(g) Within fifteen (15) days after the Then Prevailing Market Rent shall have
been established pursuant to this Section 52, the parties shall execute a
mutually acceptable amendment to this Lease memorializing Tenant’s exercise of
such renewal option and stating the Minimum Monthly Rent for the Renewal Term as
so established at 100% of said Then Prevailing Market Rent.

(h) The arbitrators shall have the right to consult experts and competent
authorities with factual information or evidence pertaining to the matter to be
determined by them, but any such consultation shall be made in the presence of
both parties with full right on their part to cross-examine. The arbitrators
shall render their decision and award in writing with counterpart copies to each
party. The arbitrator shall have no power to modify the provisions of this
Lease.

(i) If one or more of the arbitrators should resign, die, withdraw, or otherwise
be unable to perform his or her duties, either party may declare such office
vacant, in which event the vacancy shall be filled in the same manner provided
herein for the initial selection of such arbitrator.

52.3 Termination of Tenant’s Right to Renew. If Tenant shall not have delivered
to Landlord, within the time period allowed under Subsection 52.2.3 above for
delivery of an Arbitration Notice, a notice accepting Landlord’s determination
of the rental for the Renewal Term, or an executed Arbitration Notice, then, at
Landlord’s election, upon written notice to Tenant, the right of Tenant to renew
shall terminate.

 

53. EXPANSION OPTION.

Landlord hereby grants to Tenant the right to expand the Premises on a one-time
basis onto one of the following three increments of space: (i) Floors 2, 3 and
4; (ii) Floors 2 and 3; or (iii) Floor 4. Tenant must elect which of such
increments (the “Expansion Premises”) it has determined to lease by delivery of
written notice to Landlord not later than March 1, 2009. The Minimum Monthly
Rent for Expansion Premises space taken during the Expansion Option shall be at
the Then Prevailing Market Rent as defined in Subsection 52.2.1 above; provided,
however, that in no event shall the Minimum Monthly Rent for such space be less
than the Minimum Monthly Rent payable during the last month of the then current
Term. In the event that Landlord and Tenant shall not be able to agree on the
Then Prevailing Market Rent for such space, then the Then Prevailing Market Rent
shall be determined pursuant to the arbitration procedure described in
Subsection 52.2.1 above.

 

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54. DAY CARE CENTER AND EXERCISE ROOM

The Facility currently includes a day care center (as mandated pursuant to the
final conditions of approval for the Facility dated December 5, 1991 as may be
subsequently amended by Landlord and the City of San Francisco) currently
planned to be 3,000 square feet with customary hours of operation and operated
in compliance with Laws and in a first-class manner and an “Exercise Room” for
the use of the tenants of the building , both operated on a first-come,
first-serve basis, and usable pursuant to rules and procedures as adopted by
Landlord in its sole discretion, including the requirement of indemnity
agreements and waivers as preconditions to their use. Either or both of such
enterprises may be located in the Marine Electric Building. Tenant and other
tenants of the Building shall be given priority in the utilization of the day
care center to the extent permitted by law (i.e., as openings for new children
occur, Tenant and the other tenants of the Building shall be notified of such
openings before the general public is notified of such openings). Tenant shall
be entitled to Tenant’s Percentage Share of any openings at the day care center
from time to time during the Term. Any revenue from the day care center in
excess of its operating expenses will be credited against the Operating Expenses
of the Building generally.

 

55. COVENANT OF QUIET ENJOYMENT.

Provided Tenant performs the terms, conditions and covenants of this Lease, and
subject to the terms and provisions hereof, Landlord covenants to secure and to
maintain for the benefit of Tenant the quiet and peaceful possession of the
Premises, for the Term, without hindrance, claim or molestation by Landlord or
any other person lawfully claiming under Landlord. The foregoing covenant is in
lieu of any other covenant, express or implied.

IN WITNESS WHEREOF, the parties have executed this Lease as of the date first
set forth above, acknowledging that each party has freely entered into this
Lease of its own free will and volition.

 

Landlord:

      Tenant: GLL FREMONT STREET PARTNERS, a California partnership      
RIVERBED TECHNOLOGY, INC., a Delaware corporation

By:

 

GLL US Office L.P., a Delaware limited

      By:  

 

 

partnership, its Managing General Partner

      Print Name:  

 

             Title:  

 

 

By:

  GLL US Office Corp., a Delaware corporation, its Managing General Partner   
        

By:

  

 

           

 

Print Name:

  

 

           

Its:

  

 

       

 

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