Exhibit 10.5
(COLLIERS INTERNATIONAL LOGO) [f28512f2851201.gif]
Tenant Lease Abstract

         
 
  Prepared For:   Starvox Communications, Inc.
 
  Prepared By:   Jim Abarta
 
  Date:   June 27, 2005

              1.   Building Address:    2728 Orchard Parkway
San Jose, CA.
 
            2.   Project Name:   Valley Centre
 
            3.   Lease Type:   Triple Net (NNN)
 
            4.   Lessee:   Starvox Communications, Inc.
 
            5.   State Of Formation:   California
 
           
6.
  Guarantor:   N/A    
 
            7.   Lessor:   CarrAmerica Realty Operating Partnership, L.P.
 
           
8.
  Rent Payee:   Address: CarrAmerica Realty Partnership, L.P.
t/a Valley Centre
P.O. Box 642922
Pittsburgh, PA. 15264-2922
 
           
 
  Or by wire transfer as follows:   Account Name:      CarrAmerica Realty
Operating
   Partnership, L.P.
   t/a Valley Centre
 
           
 
      Bank Name:      PNC Bank
 
           
 
      Transit Number:      043-000-096

 

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      Account Number:      1004339188
 
           
 
      Notification:      Lease Administration
   (CarrAmerica Really Operating
    Partnership, L.P. re StarVox
    Communications, Inc.)
 
           
 
      Telephone:      (408) 544-9660
 
           
9.
  Building/Property Manager:   Address:  5201 Great America Parkway,
Suite #360
Santa Clara, CA. 95054
 
           
 
      Property Manager:      Mr. Tom Smith
 
      Phone:      (408) 544-9660
 
      Fax:      (408) 544-9669
 
            10.   Lease Execution Date:   June 30, 2005
 
            11.   Occupancy Date:   July 1, 2005
 
            12.   Rental Commencement Date:   Two (2) months after the
commencement date.
Projected to be on or about August 1, 2005.
Commencement date letter to be signed.
 
            13.   Prorating Method (30/31):   On a thirty (30) day basis.
 
            14.   Lease Expiration Date:   On or about September 30, 2010,
unless terminated
early by the Landlord.
 
            15.   Lease Amendments:   None.
 
            16.   Term:    5 Years, 2 Months
 
            17.   Square Feet Leased:    5,934 square feet
 
            18.   Lessee’s Proportionate Share    26.37% of the Building.
 
  Of Bldg./Project:        
 
            19.   Base Rental Rate Per Square   Months           Per Month/PSF
          Cost Per Month
 
  Foot:        

 

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              29.   Sublease/Assignment:   Lessor consent required within twenty
(20) days
following written notice from Lessee.
 
                    Lessor may disapprove at its discretion.
 
                    Lessor receives 50% of any overage rents after having the
right to deduct reasonable brokerage fees, legal costs and tenant improvements
not to exceed $4.00 per square foot.
 
                    Lessor has the right to recapture the space.
 
            30.   Lessee’s Improvements/ Lessor’s Allowance:   “Turnkey”
improvements with Tenant paying for an additional $18,729.00.
 
            31.   Lessor’s TI Supervision Fee:   None
 
            32.   Additional TI’s Available/ Amortization Rate:   None
 
            33.   Permitted Lessee’s Alterations Limit:   $15,000.00 without
Landlord’s consent for non-structural alterations. Please give Landlord notice
so that Landlord can let you know whether such improvement will have to be
removed at the end of the term.
 
            34.   Signage:   Tenant has the right to install its sign on the
monument on the berm.
 
            35.   Condition of Premises:   Lessor shall deliver the Premises
with all operating systems in good working order for a period of six (6) months
on the HVAC systems and others and nine (9) months on the roof system.
 
            36.   Notification Address:   Lessor:
 
                    CarrAmerica Realty Operating Partnership, L.P.
1810 Gateway Drive, Suite 150
San Mateo, C A. 94404
Attn: Market Officer
 
                With a copy to:   CarrAmerica Realty Operating Partnership, L.P.
1850 K Street, N.W., Suite 500

 

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                      Washington, D.C. 20006
Attn: Lease Administration
 
                    Lessee:
StarVox Communications, Inc.
2728 Orchard Parkway
San Jose, CA 95134
Attn: VP Finance
 
            37.   Holdover Provision:   150% for the first thirty (30) days and
200% thereafter.
 
            38.   After-Hours Hvac:   N/A
 
            39.   Early Termination/ Cancellation Right:   Landlord has the
right to terminate the Lease by giving Tenant at least nine (9} months prior
written notice to terminate the lease at any time after the thirtieth (30th)
month of the tease term. Please see Section 32 of the Lease. Moving expenses to
be paid by the Landlord.
 
            40.   Renewal Option/ Notice Periods:   One (1) option to extend the
Term of the Lease for three (3) years:
 
                    Notice must be given by April 15, 2010.
 
                    Rent: 100% of the then Fair Market Value.
 
                    Lessee must give written notice of its intent no earlier
than 270 days or no later than 180 days before the end of the lease term.
 
            41.   Expansion Options:   None
 
            42.   Option To Purchase:   N/A
 
            43.   Other Terms & Conditions:   Landlord has the right to
terminate the Lease, please read Section 32 for specifics, per paragraph 39
above.
 
            44.   Broker:   Colliers International, A CALIFORNIA GENERAL
PARTNERSHIP
 
                    Jim Abarta
Sr. Vice Pres./Principal
(925) 227-6228 Direct
(925) 463-2300 Main
(925) 463-0747 Fax
jabam@colliersparrish.com

 

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****************************
LEASE
VALLEY CENTRE
****************************
Between
STARVOX COMMUNICATIONS, INC.
(Tenant)
and
CARRAMERICA REALTY OPERATING PARTNERSHIP, L.P.
(Landlord)

 

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TABLE OF CONTENTS

                              Page     1.    
LEASE AGREEMENT
    1          
 
          2.    
RENT
    2          
 
          3.    
PREPARATION AND CONDITION OF PREMISES: TENANTS POSSESSION: REPAIRS AND
MAINTENANCE
    11          
 
          4.    
SERVICES AND UTILITIES
    14          
 
          5.    
ALTERATIONS AND REPAIRS
    14          
 
          6.    
USE OF PREMISES
    17          
 
          7.    
GOVERNMENTAL REQUIREMENTS AND BUILDING RULES
    20          
 
          8.    
WAIVER OF CLAIMS; INDEMNIFICATION: INSURANCE
    21          
 
          9.    
FIRE AND OTHER CASUALTY
    25          
 
          10.    
EMINENT DOMAIN
    26          
 
          11.    
RIGHTS RESERVED TO LANDLORD
    27          
 
          12.    
EVENTS OF DEFAULT
    28          
 
          13.    
LANDLORD REMEDIES
    30          
 
          14.    
SURRENDER
    32          
 
          15.    
HOLDOVER
    33          
 
          16.    
SUBORDINATION TO GROUND LEASES AND MORTGAGES
    33          
 
          17.    
ASSIGNMENT AND SUBLEASE
    34          
 
          18.    
CONVEYANCE BY LANDLORD
    38          
 
          19.    
ESTOPPEL CERTIFICATE
    38          
 
          20.    
LEASE DEPOSIT
    39          
 
          21.    
TENANTS PERSONAL PROPERTY AND FIXTURES
    40  

 

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                              Page     22.    
NOTICES
    40          
 
          23.    
QUIET POSSESSION
    41          
 
          24.    
REAL ESTATE BROKERS
    41          
 
          25.    
MISCELLANEOUS
    41          
 
          26.    
UNRELATED BUSINESS INCOME
    45          
 
          27.    
BUILDING RENOVATIONS
    45          
 
          28.    
HAZARDOUS SUBSTANCES
    45          
 
          29.    
EXCULPATION
    48          
 
          30.    
COMMUNICATIONS AND COMPUTER LINES
    48          
 
          31.    
OPTION TO EXTEND
    48          
 
          32.    
LANDLORD’S OPTION TO TERMINATE
    51  

 

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LEASE
     THIS LEASE (the “Lease”) is dated as of June 15, 2005 (for reference
purposes only) between CARRAMERICA REALTY OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (“Landlord”) and the Tenant as named in the
Schedule below. The term “Project” means the two (2) buildings, the land
appurtenant thereto (“Land”), and other improvements located thereon commonly
known as “Valley Centre”, located in San Jose, California. The “Premises” means
that portion of the Project leased to Tenant and described in the Schedule and
outlined on Exhibit A. The building in which the Premises are located shall be,
collectively, referred to herein as the “Building”. The following schedule (the
“Schedule”) is an integral part of this Lease. Terms defined in this Schedule
shall have the same meaning throughout the Lease.
SCHEDULE

  1.   Tenant: STARVOX COMMUNICATIONS, INC., a California corporation     2.  
Premises: 2728 Orchard Parkway, San Jose, California, as outlined on Exhibit A
attached hereto     3.   Building: 2728-2730 Orchard Parkway, San Jose,
California     4.   Rentable Square Footage of the Premises: Approximately 5,934
rentable square feet.     5.   Tenant’s Proportionate Share: 26.37% based upon a
total of 22,500 rentable square feet in the Building.     6.   Lease Deposit:
Prepaid Base Rent equal to Six Thousand Two Hundred Thirty and 70/100 Dollars
($6,230.70), Prepaid Additional Rent equal to One Thousand Eight Hundred
Ninety-Eight and 88/100 Dollars ($1,898.88) and Security Deposit equal to Seven
Thousand Twelve and 70/100 Dollars ($7,012.70), totaling $15,142.28.     7.  
Permitted Use: General office, non-retail sales, research and development, and
other uses ancillary thereto     8.   Tenant’s Real Estate Broker for this
Lease: Colliers International     9.   Landlord’s Real Estate Broker for this
Lease: CB Richard Ellis     10.   Tenant Improvements, if any: See the Tenant
Improvement Agreement attached hereto as Exhibit C.

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  11.   Commencement Date: The Substantial Completion Date (as defined in the
Tenant Improvement Agreement)         Target Commencement Date: July 15, 2005  
      Rent Commencement Date: The date that is two (2) months after the
Commencement Date     12.   Term/Termination Date: Subject to Landlord’s option
to terminate as set forth in Section 32, the Term of this Lease shall be for
sixty-two (62nd) months commencing on the Commencement Date and expiring on the
calendar day preceding the sixty-second (62nd) month anniversary of the
Commencement Date (the “Termination Date”); provided, however, that if the
Commencement Date shall occur on a date other than the first day of a calendar
month, the Termination Date shall be the last day of the calendar month in which
the sixty-second (62nd) month anniversary of the Commencement Date occurs.    
13.   Parking Stalls: Twenty-One (21) unassigned stalls     14.   Base Rent:

                      Monthly   Annual               Period   Base Rent   Base
Rent
Months 1 and 2
  $ 0.00       n/a  
Months 3 through 14
  $ 6,230.70     $ 74,768.40  
Months 15 through 26
  $ 6,417.62     $ 77,011.45  
Months 27 through 38
  $ 6,610.15     $ 79,321.80  
Months 39 through SO
  $ 6,808.45     $ 81,701.40  
Months 51 through 62
  $ 7,012.70     $ 84,152.40  

  15.   Renewal Option: One (1) option to extend for a period of three (3) years

Exhibit A — PLAN OF THE PREMISES
Exhibit B — RULES AND REGULATIONS
Exhibit C — TENANT IMPROVEMENT AGREEMENT
Exhibit D — COMMENCEMENT DATE CONFIRMATION
Exhibit E — ENVIRONMENTAL QUESTIONNAIRE

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     1. LEASE AGREEMENT. On the terms stated in this Lease, Landlord leases the
Premises to Tenant, and Tenant leases the Premises from Landlord, for the Term
beginning on the Commencement Date and ending on the Termination Date unless
extended or sooner terminated pursuant to this Lease.
          1.1 Commencement Date.
               (a) The Commencement Date of this Lease is the date set forth in
the Schedule, and Tenant acknowledges and agrees that if the Substantial
Completion Date does not occur on or before the Target Commencement Date for any
reason, then (a) this Lease shall not be void or voidable by either party, and
(b) Landlord shall not be liable to Tenant for any loss or damage resulting
therefrom. Following the Commencement Date, Landlord shall prepare and deliver
to Tenant a Commencement Date Confirmation substantially in the form attached
hereto as Exhibit D that sets forth both the Commencement Date and Termination
Date for this Lease. Tenant shall execute the Commencement Date Confirmation and
deliver the executed original of the same to Landlord within three (3) business
days after Tenant’s receipt thereof. Tenant’s failure to timely execute and
return the Commencement Date Confirmation document to Landlord shall be
conclusive evidence of Tenant’s agreement with the information as set forth
therein.
               (b) Notwithstanding the provisions of Section 1.1(a) above, if
the Commencement Date does not occur on or before September 1, 2005 (the
“Premises Delivery Deadline”), Tenant, as its sole remedy, shall have the right
to cancel this Lease by giving written notice of such cancellation to Landlord
at any time after the Premises Delivery Deadline and prior to the date Landlord
delivers possession of the Premises to Tenant, in which case this Lease shall be
cancelled effective as of the date mat is ten (10) days after Landlord’s receipt
of Tenant’s cancellation notice, unless Landlord delivers possession of the
Premises to Tenant within said ten (10) day period; provided, however, that the
Premises Delivery Deadline shall be extended by the number of days that the
Commencement Date is delayed due to any Force Majeure Delay (as defined below)
or any delay in receiving any required permits to construct the Tenant
Improvements or any Tenant Delay (as defined in Section 4 of the Tenant
Improvement Agreement). In the event of such cancellation by Tenant, neither
party shall have any obligations to the other under this Lease, except for
obligations arising before such cancellation, and Landlord shall promptly return
to Tenant the Lease Deposit. For purposes of this Lease, the term “Force Majeure
Delay” means any delay attributable to Force Majeure (as defined in Section 12.3
below).
               (c) This Lease shall be a binding contractual obligation
effective upon execution and delivery hereof by Landlord and Tenant (the “Lease
Effective Date”), notwithstanding the later commencement of the Lease Term
          1.2 Termination Date. The Termination Date of this Lease is the date
set forth in the Schedule, subject to Landlord’s option to terminate set forth
below in Section 32.

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          1.3 Early Occupancy. During the period commencing on the Lease
Effective Date and ending on the Commencement Date (the “Early Occupancy
Period”), Tenant shall, upon reasonable prior notice to Landlord, be permitted
to enter the Premises for the purpose of constructing improvements specific to
Tenant’s use, installation and hook-up of Tenant’s equipment, and/or conducting
business in the Premises, provided that (a) Tenant’s early entry does not
interfere with Landlord’s performance of the Tenant Improvements, (b) prior to
Tenant’s entry in the Premises, Tenant shall furnish to Landlord certificates of
insurance satisfactory to Landlord evidencing Tenant’s compliance with the
requirements of Section 8.3 below, and (c) Tenant’s work during the Early
Occupancy Period shall comply with the requirements of Section 5 below. Tenant’s
occupancy of the Premises during the Early Occupancy Period shall be subject to
all of the terms, covenants and conditions of this Lease, except that Landlord
agrees that Tenant’s obligation to pay Base Rent during the Early Occupancy
Period shall be waived. Tenant shall pay in advance, and on or before the first
day of each calendar month thereafter until the Commencement Date, Operating
Cost Share Rent and Tax Share Rent payable by Tenant based on Landlord’s prior
estimates thereof pursuant to Section 2.2(a) below, if any, and otherwise in
accordance with Section 2.1 below during the Early Occupancy Period.
     2. RENT.
          2.1 Types of Rent. Tenant shall pay the following Rent in the form of
a check to Landlord at the following address:
CarrAmerica Realty Operating Partnership, L.P.
t/a Valley Centre
P.O. Box 642922
Pittsburgh, PA 15264-2922
or by wire transfer as follows:

         
 
  Account Name:   CarrAmerica Realty Operating Partnership, L.P.
t/a Valley Centre
 
  Bank Name:   PNC Bank
 
  Transit Number:    043-000-096
 
  Account Number:    1004339188
 
  Notification:   Lease Administration (Can-America Realty
Operating Partnership, L.P. re StarVox
Communications, Inc.)
 
  Telephone:    (408) 544-9660

or in such other manner as Landlord may notify Tenant.

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               (a) Base Rent in monthly installments in advance, beginning on
the Rent Commencement Date and thereafter on or before the first day of each
month of the Term, in the amount set forth on the Schedule; provided, however,
that, upon Tenant’s execution and delivery of this Lease to Landlord, Tenant
shall pay to Landlord the Prepaid Base Rent set forth in Item 6 of the Schedule,
which shall be applied to the first monthly installment of Base Rent payable by
Tenant following the Rent Commencement Date. If, however, the Rent Commencement
Date occurs on a day other than the first day of a calendar month, then (a) the
Prepaid Base Rent shall be applied to the Base Rent for the partial month in
which the Rent Commencement Date occurs and (b) the Prorated First Base Rent
Payment (as defined below) shall be payable by Tenant on or before the first
full calendar month following the Rent Commencement Date. The “Prorated First
Base Rent Payment” means the remaining amount of Base Rent payable by Tenant for
the first full calendar month following the Rent Commencement Date, after the
Prepaid Base Rent is applied as provided above. All such prorations shall be
made on the basis of the actual number of days in the applicable month.
               (b) Beginning on the Lease Effective Date, Operating Cost Share
Rent equal to (i) Tenant’s Proportionate Share (as set forth in the Schedule) of
Operating Costs for the applicable Fiscal Year (as defined in Section 2.3(e)
below), plus (ii) management fees equal to three percent (3%) of the total Rent
payable under this Lease for the applicable Fiscal Year, paid monthly in advance
in an estimated amount. The definition of Operating Costs and the method for
billing and payment of Operating Cost Share Rent are set forth in Sections 2.2,
2.3 and 2.4.
               (c) Beginning on the Lease Effective Date, Tax Share Rent equal
to Tenant’s Proportionate Share of Taxes for the applicable Fiscal Year, paid
monthly in advance in an estimated amount. A definition of Taxes and the method
for billing and payment of Tax Share Rent are set forth in Sections 2.2, 2.3 and
2.4.
     Upon Tenant’s execution and delivery of this Lease to Landlord, Tenant
shall pay to Landlord the Prepaid Additional Rent set forth in Item 6 of the
Schedule, which shall be applied to the first monthly installment of Operating
Cost Share Rent and Tax Share Rent payable by Tenant during the Early Occupancy
Period; provided, however, that if the Lease Effective Date is a day other than
the first day of a calendar month, then (a) the Prepaid Additional Rent shall be
applied to the Operating Cost Share Rent and Tax Share Rent payable by Tenant
for the partial month in which the Lease Effective Date occurs, and the next
succeeding calendar month and (b) the Prorated First Additional Rent Payment (as
defined below) shall be payable by Tenant on or before the first full calendar
month following the Lease Effective Date. The “Prorated First Additional Rent
Payment” means the remaining amount of Operating Cost Share Rent and Tax Share
Rent payable by Tenant for the first full calendar month following the Lease
Effective Date, after the Prepaid Additional Rent is applied as provided above.
All such prorations shall be made on the basis of the actual number of days in
the applicable month.

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     As used in this Lease, the term “Rent” means Base Rent, Operating Cost
Share Rent, Tax Share Rent and all other costs, expenses, liabilities, and
amounts which Tenant is required to pay under this Lease (“Additional Rent”),
including any interest for late payment Tenant’s agreement to pay Rent is an
independent covenant, with no right of setoff, deduction, notice, demand or
counterclaim of any kind.
          2.2 Payment of Operating Cost Share Rent and Tax Share Rent.
               (a) Payment of Estimated Operating Cost Share Rent and Tax Share
Rent.
                    (i) Before the Lease Effective Date and on or before April 1
of each succeeding Fiscal Year, or as soon as reasonably possible thereafter,
Landlord shall give Tenant notice of Landlord’s estimate of the payments to be
made pursuant to Sections 2.1(b) and 2.1(c) above for such Fiscal Year. Landlord
may revise these estimates by written notice to Tenant whenever it obtains more
accurate information, such as the final real estate tax assessment or tax rate
for the Project, in which event subsequent monthly payments by Tenant for such
Fiscal Year shall be based upon such revised estimate.
                    (ii) Within ten (10) days after receiving Landlord’s notice
regarding the original or revised estimate of the monthly payments to be made
pursuant to Sections 21(b) and 21(c) above for a particular Fiscal Year, Tenant
shall pay Landlord an amount equal to the product of such estimated monthly
payments (as set forth in Landlord’s notice), multiplied by the number of months
that have elapsed in the applicable Fiscal Year to the date of such payment
including the current month, minus any payments on account thereof previously
made by Tenant for the months elapsed. On the first day of each month
thereafter, Tenant shall pay Landlord the estimated monthly payments as set
forth in Land lord’s most recent notice, until a new estimate becomes
applicable.
               (b) Correction of Operating Cost Share Rent and Tax Share Rent.
Within one hundred fifty (150) days after the close of each Fiscal Year or as
soon after such ISO-day period as practicable, Landlord shall deliver to Tenant
a statement of (i) Operating Costs and Taxes for such Fiscal Year, and (ii) the
payments made by Tenant under Section 22(a) above for such Fiscal Year (the
“Annual Expense Statement”). If, on the basis of any Annual Expense Statement,
Tenant owes an amount that is less than the estimated payments previously made
by Tenant for the applicable Fiscal Year, Landlord, at its election, shall
either refund the amount of the overpayment to Tenant within thirty (30) days
after delivery of the Annual Expense Statement to Tenant, or, if this Lease is
still in effect, credit such excess against Tenant’s subsequent obligations to
pay Operating Costs and Taxes. If, on the basis of any Annual Expense Statement,
Tenant owes an amount that is more than the estimated payments previously made
by Tenant for the applicable Fiscal Year, Tenant shall pay me deficiency to
Landlord within twenty (20) days after Landlord’s delivery of such Annual
Expense Statement to Tenant. The obligations of Landlord and Tenant under this
Section to

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promptly refund any overpayment or pay any deficiency, as appropriate, shall
survive the expiration or earlier termination of this Lease.
          2.3 Definitions.
               (a) Included Operating Costs.
                    (i) “Operating Costs” means any expenses, costs and
disbursements of any kind other than Taxes, paid or incurred by Landlord in
connection with the ownership, management, maintenance, operation, repair or
replacement of the Project or any part thereof, and of the personal property,
trade fixtures, machinery, equipment, systems and apparatus used in connection
therewith, including, without limitation, (1) all costs to operate, maintain,
repair, replace, supervise, insure, and administer the common areas of the
Project, including, without limitation, all costs of resurfacing and restriping
the parking areas of the Project; (2) all costs and expenses paid or incurred by
Landlord in connection with the obtaining of insurance on the Premises, the
Building and/or the Project or any part thereof or interest therein, and any
deductibles paid under policies of any such insurance; (3) except for costs and
expenses which are the sole responsibility of Tenant pursuant to Section 3.3(b)
below, all costs paid or incurred by Landlord to perform Landlord’s Repair
Obligations (as defined in pursuant to Section 3.3(b) below), (4) the cost of
providing those services required to be furnished by Landlord under this Lease,
and (5) the cost of all electricity, water, gas, sewers, oil and other utilities
(collectively, “Utilities”), including any surcharges imposed, serving the
Project or any part thereof (but excluding the cost of Utilities directly billed
to Tenant or other tenants in the Project), and any amounts, taxes, charges,
surcharges, assessments or impositions levied, assessed or imposed upon the
Project or any part thereof, or upon Tenant’s use and occupancy thereof, as a
result of any rationing of Utilities services or restriction on the use of
Utilities affecting the Project or any part thereof. Any Operating Costs that
constitute capital expenditures (collectively, “Included Capital Items”) shall
be amortized by Landlord, with interest, over the estimated useful life of such
item, and such amortized costs shall be included in Operating Costs only for
that portion of the useful life of the Included Capital Item which falls within
the Term, unless the cost of the Included Capital Item is less than Ten Thousand
Dollars ($10,000) in which case it shall be expensed in the year in which it was
incurred; provided, however, that Landlord shall not be entitled to expense any
Included Capital Item exclusively serving or relating only to the Premises
unless the cost of such Included Capital Item is less than Five Thousand Dollars
($5,000).
                    (ii) If the Project contains more than one building, then
Operating Costs shall include (1) all Operating Costs fairly allocable to the
Building, and (2) a proportionate share (based on the gross rentable area of the
Building as a percentage of the gross rentable area of all of the buildings in
the Project) of all Operating Costs which relate to the Project in general and
are not fairly allocable to any one building in the Project In addition, if the
Building is occupied by more than one tenant, then, with respect to any costs
and expenses incurred by Landlord to maintain,

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repair or replace Systems or related equipment mat exclusively serve the
Premises, Tenant’s Proportionate Share shall be deemed to be one hundred percent
(100%).
                    (iii) If the Project is not fully occupied during any
portion of any Fiscal Year, Landlord may adjust (an “Equitable Adjustment”)
Operating Costs to equal what would have been incurred by Landlord had the
Project been fully occupied. This Equitable Adjustment shall apply only to
Operating Costs which are variable and therefore increase as occupancy of the
Project increases. Landlord may incorporate the Equitable Adjustment in its
estimates of Operating Costs.
                    (iv) If any tenant of the Project contracts directly with
Landlord or a third party for any Utilities or services for which Tenant pays
Landlord pursuant to Section 2.1(b) above, the total costs of such Utilities or
services for the Project shall be “grossed up” to reflect what those costs would
have been had such tenant(s) not directly contracted for such Utilities or
services.
               (b) Excluded Operating Costs. Operating Costs shall not include:
                    (i) costs of installing leasehold improvements for tenants
or occupants or prospective tenants or occupants of the Project;
                    (ii) costs of capital expenditures to correct violations of
the ADA existing in the Project as of the date of this Lease based on the
current interpretation of the ADA by applicable governmental authority(ies) as
of the date of this Lease (it being understood that all other costs to bring the
Project into compliance with the ADA shall be Operating Costs, except for ADA
compliance costs that are the responsibility of Tenant pursuant to Sections 7.1
and 7.2 below);
                    (iii) the cost of abatement or removal of Hazardous
Substances in, on, or about the Project; provided, however, that (a) the costs
of routine monitoring of and testing for Hazardous Substances in, on, or about
the Project, and (b) costs incurred in the cleanup or remediation of de minimis
amounts of Hazardous Substances customarily used in similar projects or used to
operate motor vehicles and customarily found in parking facilities shall be
included as Operating Costs;
                    (iv) interest and principal payments on mortgages or any
other debt costs (except as provided in Section 2.3(a) above with regard to
Included Capital Items), or rental payments on any ground lease of the Project;
                    (v) real estate brokers’ leasing commissions;
                    (vi) legal fees, space planner fees, marketing costs and
advertising expenses incurred with regard to leasing the Project or portions
thereof;

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                    (vii) any cost or expenditure for which Landlord is
reimbursed, by insurance proceeds or otherwise, except by Operating Cost Share
Rent;
                    (viii) the cost of any service furnished to any tenant of
the Project which Landlord does not make available to Tenant;
                    (ix) depreciation (except on any Included Capital Items);
                    (x) legal and auditing fees incurred for the benefit of
Landlord such as collecting delinquent rents, preparing tax returns and other
financial statements, and audits other than those incurred in connection with
the preparation of reports required pursuant to Section 2.2 above;
                    (xi) the wages of any employee for services not related
directly to the management, maintenance, operation and repair of the Project;
                    (xii) fines, penalties and interest incurred by Landlord for
late payment by Landlord or violations of law;
                    (xiii) new utility tap-in fees for the Project;
                    (xiv) costs incurred to finance or refinance the Project;
                    (xv) costs and expenses for the replacement of any item,
material, labor or service at the Project covered under a warranty;
                    (xvi) the cost of acquiring any art work, including, without
limitation, any statues or paintings or electronic artwork or advertising, to
the extent the same are materially in excess of those charged as Operating Costs
by owners of comparable buildings; and
                    (xvii) franchise, excise, rent, capital, stock, succession,
transfer, gift, estate, inheritance or income taxes imposed upon Landlord,
except to the extent imposed in lieu of all or any part of Taxes.
               (c) Taxes.
                    (i) “Taxes” means any and all taxes, assessments and charges
of any kind, general or special, ordinary a extraordinary, levied against the
Project, which Landlord shall pay or become obligated to pay in connection with
the ownership, leasing, renting, management, use, occupancy, control or
operation of the Project or of the personal property, fixtures, machinery,
equipment, systems and apparatus used in connection therewith. Taxes shall
include real estate taxes, personal property taxes, sewer rents, water rents,
special or general assessments, transit taxes, ad valorem taxes, and any tax
levied on the rents hereunder or me interest

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of Landlord under this Lease (me “Rent Tax”). Taxes shall also include all fees
and other costs and expenses paid by Landlord in reviewing any Taxes and in
seeking a refund or reduction of any Taxes, whether or not the Landlord is
ultimately successful. Taxes shall also include any assessments or fees paid to
any business park owners association, or similar entity, which are imposed
against the Project pursuant to any Covenants, Conditions and Restrictions
“CC&R’s”) recorded against the Project and any installments of principal and
interest required to pay any existing or future general or special assessments
for public improvements, services or benefits, and any increases resulting from
reassessments imposed in connection with any change in ownership or new
construction.
                    (ii) If the Project contains more than one building, then
Taxes shall include (1) all Taxes fairly allocable to the Building, and (2) a
proportionate share (based on the gross rentable area of the Building as a
percentage of the gross rentable area of all of the buildings in the Project) of
all Taxes which relate to the Project in general and are not fairly allocable to
any one building in the Project.
                    (iii) For any year, the amount to be included in Taxes
(1) from taxes or assessments payable in installments, shall be the amount of
the installments (with any interest) due and payable during such year, and
(2) from all other Taxes, shall at Landlord’s election be the amount accrued,
assessed, or otherwise imposed for such year or the amount due and payable in
such year. If Taxes for any period during the Term are increased after payment
thereof for any reason, including, without limitation, error or reassessment by
applicable governmental or municipal authorities, and such increase results in
Tenant having underpaid Tax Share Rent hereunder, men Tenant shall pay to
Landlord, within thirty (30) days after demand, the amount of such underpayment.
Similarly, if Taxes for any period during the Term are decreased after payment
thereof for any reason, and such decrease results in Tenant having overpaid Tax
Share Rent hereunder, then Landlord shall return to Tenant the amount of such
overpayment within thirty (30) days after Landlord’s receipt of such
overpayment. The obligations of Landlord and Tenant under this Section to
promptly refund any overpayment or pay any deficiency, as appropriate, shall
survive the expiration or earlier termination of this Lease. Taxes shall not
include any net income (except Rent Tax), capital, stock, succession, transfer,
franchise, gift, estate or inheritance tax, except to the extent that such tax
shall be imposed in lieu of any portion of Taxes.
                    (iv) Notwithstanding anything to the contrary set forth in
this Lease, Tenant shall reimburse Landlord upon demand for any and all taxes
payable by Landlord (other than net income taxes) whether or not now customary
or within the contemplation of the parties hereto: (1) imposed upon, measured by
or reasonably attributable to the cost or value of Tenant’s equipment,
furniture, trade fixtures and other personal property located in the Premises or
by the cost or value of any leasehold improvements made in or to the Premises by
or for Tenant, other than Building-standard improvements made by Landlord, if
any, regardless of whether title to such improvements shall be in Tenant or
Landlord; (2) imposed upon or measured by the Base Rent payable hereunder,
including, without limitation, any gross income tax or excise tax levied by the

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city or county in which the Project is located, the federal government or any
other governmental body with respect to the receipt of such rental; (3) imposed
upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (4) imposed upon this transaction or any document to
which Tenant is a party creating or transferring an interest or an estate in the
Premises.
               (d) Intentionally Omitted.
               (e) Fiscal Year. “Fiscal Year” means each calendar year during
which any portion of the Term or the Early Occupancy Period occurs (e.g., the
first Fiscal Year shall be the calendar year during which the Early Occupancy
Period commences).
          2.4 Computation of Base Rent and Rent Adjustments.
               (a) Prorations. If (i) the Commencement Date is a date other man
January 1, (ii) the Termination Date is a date other than December 31,
(iii) this Lease terminates early, or (iv) the size of the Premises increases or
decreases, then in each such event, the Base Rent, the Operating Cost Share Rent
and Tax Share Rent shall be equitably adjusted to reflect such event on a basis
determined by Landlord to be consistent with the principles underlying the
provisions of this Section 2.
               (b) Interest Rate. Any sum due from Tenant to Landlord not paid
.when due shall bear interest from the date due until paid at the lesser of
twelve percent (12%) per annum or the maximum rate permitted by law (the
“Interest Rate”).
               (c) Rent Adjustments. The square footage of the Premises and the
Building set forth in the Schedule are deemed to be the actual square footage
thereof, provided that the rentable square footage of the Premises and the
Building may subsequently change after the date of this Lease commensurate with
any modifications to the Building by Landlord, in which event Tenant’s
Proportionate Share shall change accordingly. If any Operating Cost paid in one
Fiscal Year relates to more than one Fiscal Year, Landlord may proportionately
allocate such Operating Cost among the related Fiscal Years.
               (d) Books and Records. Landlord shall maintain books and records
reflecting the Operating Costs and Taxes in accordance with sound accounting and
management practices. Tenant and a certified public accountant employed by a
certified public accounting firm reasonably acceptable to Landlord and working
on a non-contingency fee basis shall have the right to inspect Landlord’s
records at Landlord’s applicable local office or other location designated by
Landlord upon at least seventy-two (72) hours’ prior notice during normal
business hours during the ninety (90) days following Landlord’s delivery of the
Annual Expense Statement to Tenant. The results of any such inspection shall be
kept strictly confidential by Tenant and its agents, and Tenant and its
certified public accountant must agree, in their contract for such services, to
such

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confidentiality restrictions and shall specifically agree that the results shall
not be made available to any other tenant of the Project (and in connection with
the foregoing, prior to exercising its rights hereunder, Tenant and its agents
shall sign a confidentiality agreement acceptable to Landlord). Unless Tenant
sends to Landlord any written exception to an Annual Expense Statement within
said ninety (90) day period, such Annual Expense Statement shall be deemed final
and accepted by Tenant and Tenant waives any other rights pursuant to applicable
law to inspect Landlord’s books and records and/or to contest the amount of
Operating Costs and/or Taxes due hereunder. Tenant shall pay the amount shown on
any Annual Expense Statement in the manner prescribed in this Lease, whether or
not Tenant takes any such written exception, without any prejudice to such
exception. If Tenant makes a timely exception, Landlord shall cause an
independent certified public accountant to issue a final and conclusive
resolution of Tenant’s exception. Tenant shall pay the cost of such
certification unless Landlord’s original determination of annual Operating Costs
and Taxes overstated the amounts thereof, in the aggregate, by more than five
percent (5%).
               (e) Miscellaneous. So long as Tenant is in default of any
obligation under this Lease, Tenant shall not be entitled to any refund of any
amount from Landlord. If this Lease is terminated for any reason prior to the
annual determination of Operating Cost Share Rent or Tax Share Rent, either
party shall pay the full amount due to the other within fifteen (15) days after
Landlord’s notice to Tenant of the amount when it is determined. Landlord may
commingle any payments made with respect to Operating Cost Share Rent and Tax
Share Rent, without payment of interest.
          2.5 Additional Rent Upon Default by Tenant. Landlord and Tenant
acknowledge that to induce Tenant to enter into this Lease, and in consideration
of Tenant’s agreement to perform all of the terms, covenants and conditions to
be performed by Tenant under this Lease, as and when performance is due during
the Term, Landlord has incurred (or will incur) significant costs, including,
without limitation, the following: (a) expenditures incurred in connection with
the performance of Landlord’s Work, (b) commissions to Landlord’s and/or
Tenant’s real estate broker, (c) attorneys’ fees and related costs incurred
and/or paid by Landlord in connection with the negotiation and preparation of
this Lease, and/or (d) the rent abatement granted to Tenant during the Early
Occupancy Period and for the first two (2) months of the Lease Term described
above (collectively, the “Inducements”). Landlord and Tenant further acknowledge
that Landlord would not have granted the Inducements to Tenant but for Tenant’s
agreement to perform all of the terms, covenants, conditions and agreements to
be performed by it under this Lease for the entire Term, and that Landlord’s
agreement to incur such expenditures and grant such concessions is, and shall
remain, conditioned upon Tenant’s faithful performance of all of the terms,
covenants, conditions and agreements to-be performed by Tenant under this Lease
for the entire Term. Accordingly, if an Event of Default by Tenant shall occur
hereunder, Landlord shall be relieved of any unfulfilled obligation to grant
Inducements hereunder, or to incur further expenses in connection therewith, and
Tenant shall pay, as liquidated damages for Landlord’s granting the Inducements
and not as a penalty, within ten (10) days after the occurrence of the Event of
Default, as Additional Rent, the amount of those Inducements incurred or granted
prior to the date of the Event of Default the “Pre-

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Default Inducements”). Landlord may or, at Tenant’s request, shall, after the
occurrence of an Event of Default, forward a statement to Tenant setting forth
the amount of the Pre-Default Inducements, but the failure to deliver such a
statement shall not be or be deemed to be a waiver of the right to collect the
Pre-Default Inducements or to extend the date upon which such amount shall be
due and payable. Notwithstanding the foregoing, Landlord agrees that it will
seek to enforce its right to recover Pre-Default Inducements only in connection
with a bankruptcy of Tenant where this Lease is rejected or deemed rejected
under Section 362 of the Bankruptcy Code.
     3. PREPARATION AND CONDITION OF PREMISES: TENANTS POSSESSION: REPAIRS AND
MAINTENANCE.
          3.1 Condition of Premises. Except for Landlord’s Work (as defined in
the Tenant Improvement Agreement attached hereto as Exhibit C). Landlord is
leasing the Premises to Tenant “as is”, without any obligation to alter,
remodel, improve, repair or decorate any part of the Premises and without any
express or implied representations or warranties of any kind, including, without
limitation, any representation or warranty regarding the condition of the
Premises, the Building or the Project or the suitability of any of the foregoing
for the conduct of Tenant’s business, except that Landlord shall deliver the
Building Systems serving the Premises in good working condition (and with the
roof of the Building in watertight condition) and except that Landlord shall be
responsible for the repair of any latent defects in the Premises of which Tenant
gives Landlord written notice one hundred eighty (180) days after the
Substantial Completion Date. If it is determined that the foregoing
representation was untrue as of the Commencement Date, Landlord shall not be
liable to Tenant for any damages, but as Tenant’s sole remedy, Landlord, at no
cost to Tenant, shall perform such work or take such other action as may be
necessary to place the Building Systems in good working condition and place the
roof of the Building in watertight condition. In addition, Landlord, at no cost
to Tenant, shall repair (a) any defects in the Building Systems of which Tenant
gives Landlord written notice within six (6) months after the Commencement Date,
and (b) any defects in the roof of the Building that renders the roof not
watertight of which Tenant gives Landlord written notice within nine (9) months
after the Commencement Date. Further, upon request by Tenant following one
hundred eighty (180) days after the Substantial Completion Date, Landlord shall
assign all warranties relating to the Tenant Improvements to Tenant
          3.2 Tenant’s Possession. Tenant’s taking possession of any portion of
the Premises shall be conclusive evidence that the Premises were in good order,
repair and condition, subject to any latent defects of which Tenant gives
Landlord written notice within one hundred eighty (180) days after the
Substantial Completion Date.
          3.3 Repairs and Maintenance.

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               (a) Tenant’s Obligations.
                    (i) Except to the extent expressly Landlord’s obligation
under Section 3.3(b) below, Tenant shall, throughout the Term at its sole cost
and expense, (1) keep and maintain the Premises in good order and condition, and
repair and replace every part thereof (“Tenant’s Repair Obligations”),
including, without limitation, the following: (A) glass, windows, window frames,
window casements (including the repairing, resealing, cleaning and replacing of
both interior and exterior windows) and skylights; (B) interior and exterior
doors, door frames and door closers; (C) interior lighting (including, without
limitation, light bulbs and ballasts); (D) the Building Systems (as defined in
Section 3.3(b) below), or portions of the Building Systems, that exclusively
serve the Premises, including, without limitation, any specialty or supplemental
Building Systems installed by or for Tenant and all heating, ventilating and air
conditioning (“HVAC”) systems and equipment and all electrical facilities and
equipment, including lighting fixtures, lamps, fans and any exhaust equipment
and systems, electrical motors and all other appliances and equipment of every
kind and nature located in, upon or about the Premises; (E) all communications
systems serving the Premises; (F) all of Tenant’s security systems in or about
or serving the Premises; (G) Tenant’s signage; and (H) interior demising walls
and partitions (including painting and wallcoverings), equipment, floors, and
any roll-up doors, ramps and dock equipment, (2) furnish all expendables,
including light bulbs, paper goods and soaps, used in the Premises, and (3) to
the extent that Landlord notifies Tenant in writing of its intention to no
longer arrange for such monitoring, cause the fire alarm systems serving the
Premises to be monitored by a monitoring or protective services firm approved by
Landlord in writing.
                    (ii) Tenant shall also be responsible for all pest control
within the Premises, and for all trash removal and disposal from the Premises.
With respect to any HVAC systems and equipment exclusively serving the Premises,
Tenant shall obtain HVAC systems preventive maintenance contracts with quarterly
service in accordance with manufacturer recommendations, which shall be subject
to the reasonable prior written approval of Landlord and paid for by Tenant, and
which shall provide for and include replacement of filters, oiling and
lubricating of machinery, parts replacement, adjustment of drive belts, oil
changes and other preventive maintenance, including annual maintenance of duct
work, interior unit drains and caulking of sheet metal, and recaulking of jacks
and vents on an annual basis. Notwithstanding the preceding sentence, Landlord,
at no cost to Tenant, shall repair any defects in the HVAC system of which
Tenant gives Landlord written notice within six (6) months after the
Commencement Date as provided in Section 3.1 above, and thereafter, Tenant shall
have the benefit of all warranties available to Landlord regarding the HVAC
systems and equipment.
                    (iii) Tenant’s repair, maintenance and replacement
obligations shall be performed under the supervision and subject to the prior
approval of Landlord, and within any reasonable period of time specified by
Landlord; provided, however, that (1) with respect to the Building Systems that
exclusively serve the Premises, Landlord may elect to perform all or some of the
foregoing maintenance, repairs and replacement itself, at Tenant’s expense, and
(2) if Tenant

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fails to perform Tenant’s Repair Obligations within ten (10) days after notice
from Landlord (except in an emergency, in which case no notice shall be
required), Landlord may immediately perform any such work at Tenants expense
plus an administrative fee equal to 10% of the cost of such work. Tenant shall
pay to Landlord all costs and expenses incurred by Landlord and required to be
paid by Tenant under this Section 3.3(a) within ten (10) business days after
receipt of an invoice therefor.
               (b) Landlord’s Obligations.
                    (i) Subject to the provisions of Sections 3.1(a), 9 and 10
hereof, Landlord shall maintain, repair and replace the following items
(“Landlord’s Repair Obligations”): (1) the non-structural portions of the roof
of the Building, including the roof coverings (provided that Tenant installs no
additional air conditioning or other equipment on the roof that damages the roof
coverings, in which event Tenant shall pay all costs resulting from the presence
of such additional equipment); (2) the HVAC, plumbing, sewer, drainage,
electrical, fire protection, elevator, escalator, life safety and security
systems and equipment and other mechanical, electrical and communications
systems and equipment (collectively, the “Building Systems”) serving the
Premises, the Building and/or the Project, excluding any specialty or
supplemental Building Systems installed by or for Tenant and also excluding the
Building Systems (or portions of the Building Systems) that exclusively serve
the Premises; and (3) the parking areas of the Project, pavement, landscaping,
sprinkler systems, sidewalks, driveways, curbs, and lighting systems in the
common areas of the Project Landlord’s Repair Obligations also includes the
routine repair and maintenance of the load bearing and exterior walls of the
Building, including, without limitation, any painting, sealing, patching and
waterproofing of such walls.
                    (ii) Subject to the provisions of Sections 3.1(a), 9 and 10
hereof, Landlord, at its own cost and expense, agrees to repair, maintain and
replace (to the extent necessary, in Landlord’s reasonable judgment), the
structural portions of the roof (specifically excluding the roof coverings), the
foundation, the footings, the floor slab, and the load bearing walls and
exterior walls of the Building (excluding any glass and any routine maintenance,
including, without limitation, any painting, sealing, patching and waterproofing
of such walls); provided, however, that subject to the provisions of Section 8.6
below, any damage arising from the acts of Tenant or any Tenant Parties (as
defined in Section 8.2(a) below) shall be repaired by Landlord at Tenant’s sole
expense, and Tenant shall pay to Landlord all costs and expenses of any such
repair, plus an administrative fee equal to 10% of the cost of such repair,
within ten (10) days after receipt of an invoice therefor. Landlord may, but
shall not be required to, enter the Premises at all reasonable times and after
reasonable prior notice (except in an emergency, in which case no notice shall
be required) to make such repairs, alterations, improvements or additions to the
Premises or to the Building or to any equipment located in the Building as
landlord shall desire or deem necessary or as Landlord may be required to do by
governmental or quasi-governmental authority or court order or decree. The cost
of any repairs made by Landlord on account of Tenant’s default, or on account of
the misuse or neglect by Tenant or any Tenant Parties anywhere in the Project,
shall constitute Additional Rent payable by Tenant within ten (10) business days
after receipt of an invoice therefor.

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As a condition precedent to all of Landlord’s repair and maintenance obligations
under this Lease, Tenant must have notified Landlord of the need of such repairs
or maintenance.
                    (iii) Tenant hereby waives any and all rights under and
benefits of subsection 1 of Section 1932 and Sections 1941 and 1942 of the
California Civil Code and any similar or successor law, statute or ordinance now
or hereafter in effect regarding Tenant’s right to make repairs and deduct the
cost of such repairs from the Rent due under this Lease.
     4. SERVICES AND UTILITIES. Tenant shall promptly pay, as the same become
due, all charges for water, gas, electricity, telephone, sewer service, waste
pick-up and any other utilities, materials and services furnished directly to or
used by Tenant on or about the Premises during the Term, including, without
limitation, (a) meter, use and/or connection fees, hook-up fees, or standby
fees, and (b) penalties for discontinued interrupted service. If any utility
service is not separately metered to the Premises, then Tenant shall pay its pro
rata share of the cost of such utility service with all others served by the
service not separately metered. However, (i) if Landlord reasonably determines
that Tenant is using a disproportionate amount of any utility service (whether
or not separately metered), then Landlord, at its election, may (1) periodically
charge Tenant, as Additional Rent, a sum equal to Landlord’s reasonable estimate
of the cost of Tenant’s excess use of such utility service, and/or (2) install,
at Tenant’s expense, a separate meter to measure the utility service supplied to
the Premises, and (ii) if Landlord reasonably determines that Tenant is using a
disproportionate share of the electrical capacity available for the Building or
Project (i.e., electrical usage in excess of that which would typically be used
for general office purposes), then, in addition to the foregoing, Landlord may
install, at Tenant’s expense, additional equipment to increase me electrical
capacity for the Building or Project to offset excess electrical usage by
Tenant. Any interruption or cessation of utilities resulting from any causes,
including any entry for repairs pursuant to this Lease, and any renovation,
redecoration or rehabilitation of any area of the Project, shall not render
Landlord liable for damages to either person or property or for interruption or
loss to Tenant’s business, nor be construed as an eviction of Tenant, nor work
an abatement of any portion of Rent, nor relieve Tenant from fulfillment of any
covenant or agreement hereof; provided, however, that if (i) an interruption of
the Project services prevents Tenant from occupying all or a material portion of
the Premises for the Permitted Use for a period of at least seven
(7) consecutive days and (ii) such interruption was caused by the negligence or
willful misconduct of Landlord, its agents or employees, then monthly Rent shall
thereafter be proportionately abated during the period of such interruption.
Nothing in this Section 4 shall limit the parties’ rights and obligations under
Section 9 hereof, in the event of a casualty affecting the Building or Premises.
     5. ALTERATIONS AND REPAIRS.
          5.1 Landlord’s Consent and Conditions.
               (a) Except for Minor Alterations (as defined below), Tenant shall
not make any improvements or alterations to the Premises (the “Work”) without in
each instance

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submitting plans and specifications for the Work to Landlord and obtaining
Landlord’s prior written consent Tenant shall pay Landlord’s standard charge
(or, if Landlord does not have a standard charge, then Landlord’s actual costs
incurred) for review of all of the plans and all other items submitted by Tenant
Landlord will be deemed to be acting reasonably in withholding its consent for
any Work which (i) impacts or affects the base structural components or the
Building Systems, (ii) impacts or affects any other tenant’s premises or the
common areas of the Project, (iii) is visible from outside the Premises, or
(iv) would utilize building materials or equipment which are inconsistent with
Landlord’s standard building materials and equipment for the Building.
               (b) Landlord’s approval shall not be required for Work on the
ulterior of the Premises costing less than Fifteen Thousand Dollars ($15,000.00)
per project (“Minor Alterations”), provided that (i) Landlord would not have the
right to reasonably withhold consent to the Work pursuant to clauses (i) through
(iv) of Section 5.1(a) above; and (ii) Tenant provides Landlord with written
notice of such Minor Alteration, which shall include a copy of any governmental
permits required to complete such Minor Alteration, prior to commencing
construction of such Minor Alteration. All references to “Work” shall mean and
include Minor Alterations, except as expressly provided to the contrary.
               (c) Tenant shall pay for the cost of all Work, including the cost
of any and all approvals, permits, fees and other charges which may be required
as a condition of performing such Work.
               (d) The following requirements shall apply to all Work:
                    (i) At least seven (7) days before beginning any Work,
Tenant shall furnish to Landlord (1) written notice of the expected commencement
date of the Work to permit Landlord to post and record a notice of
nonresponsibility, (2) building permits, (3) certificates of insurance
satisfactory to Landlord, and, (4) at Landlord’s request with respect to Work in
excess of Twenty-Five Thousand Dollars ($25,000.00), security for payment of all
costs to complete the construction of such Work.
                    (ii) Tenant shall not take any action which would violate
Landlord’s labor contracts or which would cause a work stoppage, picketing,
labor disruption or dispute, or interfere with Landlord’s or any other tenant’s
or occupant’s business or with the rights and privileges of any person lawfully
in the Building (“Labor Disturbance”). Tenant shall take the actions necessary
to resolve any Labor Disturbance, and shall have pickets removed and, at the
request of Landlord, immediately terminate any work in the Premises that gave
rise to the Labor Disturbance, until Landlord gives its written consent for the
work to resume. Tenant shall have no claim for damages against Landlord or any
of the Landlord Parties as a result of the above actions.
                    (iii) The Work shall be performed in a good and workmanlike
manner, meeting the standard for construction and quality of materials in the
Building, and shall

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comply with all insurance requirements and all applicable laws, ordinances,
regulations or requirements of the United States of America, the State of
California, or the ordinances, regulations or requirements of the local
municipal or county governing body or other lawful authorities having
jurisdiction over the Project, including, without limitation, any such laws,
ordinances, regulations or requirements relating to hazardous materials or
substances, as those terms are defined by applicable laws now or hereafter in
effect (collectively, “Governmental Requirements”).
                    (iv) Tenant shall perform all Work so as to minimize or
prevent disruption to other tenants, and Tenant shall comply with all reasonable
requests of Landlord in response to complaints from other tenants.
                    (v) Tenant shall perform all Work in compliance with any
“Policies, Rules and Procedures for Construction Projects” which may be in
effect at the time the Work is performed.
                    (vi) All Work shall be performed only by contractors or
mechanics approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed; provided, however, that (1) Landlord may, in
its sole discretion, specify engineers, general contractors, subcontractors, and
architects to perform work, affecting the Building Systems or any structural
component of the Building or Project; and (2) if Landlord consents to any Work
that requires work to be performed outside the Premises, Landlord may elect to
perform such work at Tenant’s expense.
                    (vii) Tenant shall permit Landlord to supervise all Work,
including, without limitation, the right (but not an obligation) to inspect the
construction work during the progress thereof, and to require corrections of
faulty construction or any material deviation from the plans for such Work as
approved by Landlord; provided, however, that no such inspection shall be deemed
to create any liability on the part of Landlord, or constitute a representation
by Landlord or any person hired to perform such inspection that the work so
inspected conforms with such plans or complies with any Governmental
Requirements, and no such inspection shall give rise to a waiver of, or estoppel
with respect to, Landlord’s continuing right at any time or from time to time to
require the correction of any faulty work or any material deviation from such
plans.
                    (viii) Landlord may charge a supervisory fee not to exceed
five percent (5%) of labor, material, and all other costs of the Work to
compensate Landlord for its management and supervision of the progress of the
Work; provided, however, that Landlord shall not charge such fee for cosmetic
Work in the interior of tine Premises costing less than Five Thousand Dollars
($5,000.00) per project.
                    (ix) Upon completion, Tenant shall furnish Landlord with
contractor’s affidavits and full and final statutory waivers of liens, as-built
plans and specifications, and receipted bills covering all labor and materials,
and all other close-out documentation related to

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the Work, including any other information required under any ‘Policies, Rules
and Procedures for Construction Projects” which may be in effect at the time.
          5.2 No Liens. Tenant has no authority to cause or permit any lien or
encumbrance of any kind to affect Landlord’s interest in the Project; any such
lien or encumbrance shall attach to Tenant’s interest only. If any mechanic’s
lien shall be filed or claim of lien made for work or materials furnished to
Tenant, then Tenant shall at its expense within ten (10) days thereafter either
discharge or contest the lien or claim. If Tenant contests the lien or claim,
then Tenant shall (a) within such ten (10) day period, provide Landlord adequate
security for the lien or claim, (b) contest the lien or claim in good faith by
appropriate proceedings that operate to stay its enforcement, and (c) pay
promptly any final adverse judgment entered in any such proceeding. If Tenant
does not comply with these requirements, Landlord may discharge the lien or
claim, and the amount paid, as well as attorneys fees and other expenses
incurred by Landlord, shall constitute Additional Rent payable by Tenant on
demand.
          5.3 Ownership of Improvements. All Work as defined in this Section 5,
partitions, hardware, equipment, machinery and all other improvements and all
fixtures, except trade fixtures, constructed in the Premises by either Landlord
or Tenant, (a) shall become Landlord’s property upon installation without
compensation to Tenant, unless Landlord consents otherwise in writing, and
(b) shall, at Landlord’s option, either (i) be surrendered to Landlord with the
Premises at the termination of this Lease or of Tenant’s right to possession, or
(ii) be removed in accordance with Section 14 below; provided, however, that
upon Tenant’s written request, in all capital letters, at the time Tenant seeks
Landlord’s consent to any proposed Work, or, in the case of Minor Alterations,
upon Tenant’s notification to Landlord, Landlord will notify Tenant of the
portion of the proposed Work to be removed at the termination of this Lease or
Tenant’s right to possession.
     6. USE OF PREMISES.
          6.1 Limitation on Use. Tenant shall use the Premises only for the
Permitted Use stated in the Schedule and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord’s sole discretion. Tenant shall not allow any use of the Premises which
will negatively affect the cost of coverage of Landlord’s insurance on the
Project. Tenant shall not allow any inflammable or explosive liquids or
materials to be kept on the Premises. Tenant shall not allow any use of the
Premises which would cause the value or utility of any part of the Premises to
diminish, and Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with Landlord’s use of the
Project or interfere with the rights of other tenants and/or occupants of the
Building or Project or injure, annoy, or disturb them, or allow the Premises to
be used for any improper, immoral, unlawful, or objectionable purpose, or commit
any waste. Tenant shall not permit any nuisance or waste to occur in, on, or
about the Project, or allow any offensive noise or odor in or around the
Project. At the end of each business day, or more frequently if necessary,
Tenant shall deposit all garbage and other trash (excluding any inflammable,

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explosive and/or hazardous materials) in trash bins or containers approved by
Landlord in locations designated by Landlord from time to time. If any
governmental authority shall deem the Premises to be a “place of public
accommodation” under the Americans with Disabilities Act (“ADA”) or any other
comparable law as a result of Tenant’s use, Tenant shall either modify its use
to cause such authority to rescind its designation or be responsible for any
alterations, structural or otherwise, required to be made to the Building or the
Premises under such laws.
          6.2 Signs. Tenant shall not place on any portion of the Premises any
sign, placard, lettering, banner, displays, graphic, decor or other advertising
or communicative material which is visible from the exterior of the Premises
without Landlord’s prior written approval Landlord acknowledges that Tenant
shall be entitled to non-exclusive signage on the monument sign in the front of
the Building, subject to the provisions of this Section 6.2, including
Landlord’s prior written approval of the design, color, material and method of
installation of such signage. Tenant acknowledges that any delay in installation
of said monument signage shall not delay the Commencement Date. Any approved
signs shall strictly conform to all Governmental Requirements, any CC&R’s
recorded against the Project, and Landlord’s signage standards in effect at the
time, and shall be installed and removed at Tenant’s expense. Tenant, at its
sole expense, shall maintain such signs in good condition and repair during the
Term. Prior to the expiration or earlier termination of this Lease, Tenant at
its sole cost shall remove all of its exterior signage and repair any and all
damage caused to the Building and/or Project (including and fading or
discoloration) by such signs and/or the removal of such signs from the Building
and/or Project. As part of the Tenant Improvements to be performed by Landlord
pursuant to Exhibit C, Landlord shall install the Building standard sign
containing Tenant’s name at the entrance to the Premises.
          6.3 Parking. Tenant shall have the non-exclusive right to park in the
Project’s parking facilities in common with other tenants of the Project upon
terms and conditions, as may from time to time be established by Landlord.
Tenant agrees not to overburden the parking facilities (i.e., use more than the
number of unassigned parking stalls indicated on the Schedule) and agrees to
cooperate with Landlord and other tenants in the Project in the use of the
parking facilities. Landlord reserves the right in its discretion to determine
whether the parking facilities are becoming crowded and to allocate and assign
parking passes among Tenant and the other tenants in the Project Tenant’s use of
the parking facilities shall be at no charge, provided that Landlord shall have
the right to charge Tenant the portion that Landlord reasonably deems allocable
to Tenant of any charges (e.g., fees or-taxes) imposed by the Regional Air
Quality Control Board or other governmental or quasi-governmental agency in
connection with the parking facilities (e.g., in connection with operation or
use of the parking facilities). Landlord shall not be liable to Tenant, nor
shall this Lease be affected, if any parking is impaired by (or if any parking
charges are imposed as a result of) any moratorium, initiative, referendum, law,
ordinance, regulation or order passed, issued or made by any governmental or
quasi-governmental body. Tenant’s continued right to use the parking spaces is
conditioned upon Tenant abiding by all rules and regulations which are
prescribed from time to time for the orderly operation and use of the parking
facility where the parking passes are located, including any sticker or other
identification system established by

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Landlord, Tenant’s cooperation in seeing that Tenant’s employees and visitors
also comply with such rules and regulations and Tenant not being in default
under this Lease. Landlord specifically reserves the right to change the size,
configuration, design, layout and all other aspects of the Project parking
facility at any time and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of Rent
under this Lease, from tune to time, close-off or restrict access to the Project
parking facility for purposes of permitting or facilitating any such
construction, alteration or improvements. Landlord may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to the Landlord
with respect to parking at the Project. The parking passes rented by Tenant
pursuant to this Section 6.3 are provided to Tenant solely for use by Tenant’s
own personnel and such passes may not be transferred, assigned, subleased or
otherwise alienated by Tenant without Landlord’s prior approval.
          6.4 Prohibition Against Use of Roof and Structure of Building. Tenant
shall be prohibited from using all or any portion of the roof of the Building or
any portion of the structure of the Building during the Term of this Lease (or
any extensions thereof) for any purposes (including without limitation for the
installation, maintenance and repair of a satellite dish and/or other
telecommunications equipment), without Landlord’s prior written consent, which
Landlord may withhold in its sole and absolute discretion. Notwithstanding the
foregoing, Landlord shall grant Tenant with reasonable access to the roof of the
Building as may be reasonably necessary to allow Tenant to perform its HVAC and
other maintenance obligations hereunder, provided that such access shall be
subject to any reasonable rules and restrictions mat Landlord may impose from
time to time; provided, however, that Tenant may, subject to Landlord’s
reasonable prior written consent, use the roof for the installation of a
non-revenue producing satellite dish to service Tenant’s business in the
Premises. Landlord has made no representations or promise as to the suitability
or effectiveness of any part of the roof for Tenant’s proposed use, or as to any
Governmental Requirements applicable to Tenant’s proposed use.
               (a) Tenant shall submit to Landlord, with any request for consent
of any rooftop equipment, plans and specifications therefor, which must include,
without limitation, the design, size and features of the rooftop equipment and
mounting structure, floor and power load requirements, cabling installations,
the means of affixing or mounting the rooftop equipment, and the means of
connecting the rooftop equipment to the Building’s electrical system and to the
Premises. Tenant acknowledges and agrees that, if Landlord consents to Tenant’s
use of any potion of the roof of the Building, such use shall be non-exclusive
and subject to Landlord’s approval of location, plans and installation pursuant
to Section 5 of this Lease and such rules and regulations as Landlord may
prescribe, including, without limitation, with regard to (i) the location, size,
type and methods of installation of the proposed rooftop equipment,
(ii) requirements to prevent electrical, electromagnetic, radio frequency or
other interference with other telecommunication equipment on or about the
Building, (iii) rooftop space availability, (iv) restrictions on penetration of
the roof surface, (v) rooftop access rights, and (vi) removal requirements upon
the expiration or earlier termination of this Lease.

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               (b) Nothing herein shall limit or restrict Landlord’s rights
under Section 11.13, or require Landlord to obtain Tenant’s consent prior to
exercising such rights.
     7. GOVERNMENTAL REQUIREMENTS AND BUILDING RULES.
          7.1 Compliance in Premises.
               (a) Landlord’s Responsibilities. As of the Commencement Date, the
Premises shall comply in all material respects with all applicable Governmental
Requirements (as interpreted by applicable governmental or quasi-governmental
authorities as of the Commencement Date), without regard to any specific use of
the Premises by Tenant. If Landlord or Tenant receives written notice from any
governmental or quasi-governmental authority that any portion of the Premises
violated Governmental Requirements as of the Commencement Date, Landlord shall
not be liable to Tenant for any damages, but Landlord, at no cost to Tenant,
shall, as Tenant’s sole remedy, perform such work or take such other action as
may be necessary to cure such violation, but only to the extent that a
governmental or quasi-governmental authority requires such work or action, or to
the extent that such violation materially and adversely affects Tenant’s use or
occupancy of the Premises. Notwithstanding the foregoing, (i) Landlord shall
have the right to contest any alleged violation in good faith, including,
without limitation, the right to apply for and obtain a waiver or deferment of
compliance, the right to assert any and all defenses allowed by law, and the
right to appeal any decisions, judgments or rulings to the fullest extent
permitted by law, and Landlord’s obligation to perform work or take such other
action to cure a violation under this Section 7.1(a) shall apply after the
exhaustion of any and all rights to appeal or contest; and (ii) issuance of a
temporary or final certificate of occupancy with respect to the Tenant
Improvements (or if such certificates are not customarily issued for such work
by the local governmental authority, then the final inspection and sign-off on
the job card for such work by the building inspectors(s)), shall conclusively
establish the compliance of the Premises with the applicable Governmental
Requirements, including the ADA.
               (b) Tenant’s Responsibilities. Tenant shall, at its sole cost and
expense, (1) comply with all Governmental Requirements; with any occupancy
certificate issued for the Premises; and with the provisions of all recorded
documents affecting the Premises, insofar as any thereof relates to or affects
the condition, use or occupancy of the Premises; and (2) take all proper and
necessary action to cause the Premises, including any repairs, replacements,
alterations and improvements thereto, to be maintained, constructed, used and
occupied in compliance with applicable Governmental Requirements, including any
applicable code and ADA requirements, whether or rot such requirements are based
on Tenant’s use of the Premises, and further to assume all responsibility to
ensure that the Premises continues to comply with all Governmental Requirements,
including applicable code and ADA requirements, throughout the Term Tenant shall
be responsible, at its sole cost and expense, to make all alterations to the
Premises as are required to comply with the governmental rules, regulations,
requirements or standards described in this Section 7.1. The judgment of any
court of competent jurisdiction or the admission of Tenant in any

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judicial action, regardless of whether Landlord is a party thereto, that Tenant
has violated any of said governmental measures, shall be conclusive of that fact
as between Landlord and Tenant
          7.2 Compliance in Common Areas. Subject to reimbursement as an
Operating Cost as provided in Section 2 above, Landlord shall perform any work
required under any applicable Governmental Requirements, including the ADA, to
be performed in the common areas of the Project, except mat Tenant shall be
solely responsible for all such compliance work which is required as a result of
Tenant’s use or activities or Tenant’s proposed alterations or repairs. With
respect to any code compliance work required outside the Premises for which
Tenant is responsible hereunder, Landlord shall have the right to perform such
work, or require that Tenant perform such work with contractors, subcontractors,
engineers and architects approved by Landlord; and if Landlord elects to perform
such work outside the Premises, Tenant shall reimburse Landlord for the cost of
such work within ten (10) business days following receipt of invoices therefor.
Landlord makes no representations or warranties regarding whether the Project or
the Premises complies with applicable Governmental Requirements as of the date
of this Lease; provided, however, that Landlord represents to Tenant that, as of
the date of this Lease, Landlord has not received any written notice from any
governmental authority that the Building is in violation of any Governmental
Requirements, which violation remains uncured. If it is determined that the
foregoing representation was untrue when made, Landlord shall, as Tenant’s sole
and exclusive remedy, perform such work as may be required by such Governmental
Requirements, but only to the extent that failure to do so would result in an
obligation or liability accruing to Tenant or result in an imminent and material
adverse impact on Tenant’s occupancy of or access to the Premises.
          7.3 Rules and Regulations. Tenant shall also comply with all
reasonable rules for the Project which may be established and amended from time
to time by Landlord. The present rules and regulations are contained in
Exhibit B. Failure by another tenant to comply with the rules or failure by
Landlord to enforce them shall not relieve Tenant of its obligation to comply
with the rules or make Landlord responsible to Tenant in any way. Landlord shall
use reasonable efforts to apply the rules and regulations uniformly with respect
to Tenant and any other tenants in the Project under leases containing rules and
regulations similar to this Lease. If Tenant performs alterations or repairs,
Tenant shall comply with the provisions of Sections of this Lease.
     8. WAIVER OF CLAIMS; INDEMNIFICATION: INSURANCE.
          8.1 Waiver of Claims. Neither Landlord nor the other Landlord Parties
(as defined below) shall be liable to Tenant or to any Tenant Parties (as
defined below), and Tenant waives all claims against Landlord and such other
Landlord Parties, for any injury to or death of any person or for loss of use of
or damage to or destruction of property in or about the Premises or Project by
or from any cause whatsoever, including without limitation, earthquake or earth
movement, gas, fire, oil, electricity or leakage from the roof, walls, basement
or other portion of the Premises or Project, except only, with respect to any
Landlord Party, to the extent such injury, death or damage is caused by the
gross negligence or willful misconduct of such Landlord Party and not

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covered by the insurance required to be carried by Tenant hereunder or except to
the extent such limitation on liability is prohibited by law. The provisions of
this Section 8.1 shall survive the expiration or earlier termination of this
Lease until all claims within the scope of this Section 8.1 are fully, finally,
and absolutely barred by the applicable statutes of limitations.
          8.2 Indemnification.
               (a) Tenant shall indemnify, protect, defend (by counsel
reasonably satisfactory to Landlord) and hold harmless Landlord and its
officers, directors, employees and agents (each, a “Landlord Party” and
collectively, the “Landlord Parties”), and each of them, against any and all
obligations, losses, claims, actions (including remedial or enforcement actions
of any kind and administrative or judicial proceedings, suits, orders or
judgments), causes of action, liabilities, penalties, damages (including
consequential and punitive damages), costs and expenses (including reasonable
attorneys’ and consultants’ fees and expenses) (collectively, “Claims”) arising
from any of the following, including, but not limited to, Claims brought by or
on behalf of employees of Tenant, with respect to which Tenant waives, for the
benefit of the Landlord Parties, any immunity to which Tenant may be entitled
under any worker’s compensation laws: (i) any cause in, on or about the
Premises, (ii) any act or omission or negligence of Tenant or any person or
entity claiming by or through Tenant (including any assignee or subtenant), or
any of their respective members, partners, employees, contractors, agents,
customers, visitors, licensees or other persons in or about the Project by
reason of Tenant’s occupancy of the Premises (each a “Tenant Party” and,
collectively, “Tenant Parties”), or (iii) Tenant’s breach of its obligations
under this Lease, either prior to, during, or after the expiration of the Lease
Term (including, without limitation, Tenant’s failure to surrender the Premises
in accordance with Section 14 below); provided, however, that, with respect to
any Landlord Party, Tenant’s obligations under this Section shall be
inapplicable to the extent such Claims arise solely from the gross negligence or
willful misconduct of such Landlord Party and are not covered by the insurance
required to be carried by Tenant hereunder, or to the extent such obligations
are prohibited by applicable law.
               (b) Subject to the waivers of liability and subrogation set forth
in Sections 8.1 and 8.6, respectively, Landlord shall indemnify and hold
harmless Tenant, its officers, agents and employees from and against all Claims
to the extent arising from the gross negligence or willful misconduct of
Landlord, its employees, agents or contractors.
               (c) Tenant’s duty to defend Landlord and the other Landlord
Parties under this Section 8.2 is separate and independent of Tenant’s duty to
indemnify the Landlord Parties. The duty to defend includes claims for which the
Landlord Parties may be liable without fault or strictly liable. The duty to
defend applies regardless of whether the issues of negligence, liability, fault,
default, or other obligation on the part of Tenant Parties have been determined.
The duty to defend applies immediately, regardless of whether any Landlord
Parties have paid any sums or incurred any detriment arising out of or relating
(directly or indirectly) to any Claims. The parties expressly intend that
Landlord Parties shall be entitled to obtain summary adjudication or summary
judgment

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regarding Tenant’s duty to defend the Landlord Parties at any stage of any claim
or suit within the scope of this Section.
               (d) Tenant’s obligations under this Section shall survive the
expiration or earlier termination of this Lease until all Claims within the
scope of this Section 8.2 are fully, finally, and absolutely barred by the
applicable statutes of limitations.
          8.3 Tenant’s Insurance. Tenant shall maintain insurance as follows,
with such other terms, coverages and insurers, as Landlord shall reasonably
require from time to time:
               (a) Commercial General Liability Insurance, with (i) Contractual
Liability including the indemnification provisions contained in this Lease,
(ii) a severability of interest endorsement, and (iii) limits of not less than
Two Million Dollars ($2,000,000) combined single limit per occurrence, not less
than Two Million Dollars ($2,000,000) in the aggregate for bodily injury,
sickness or death, and property damage, and umbrella coverage of not less than
Three Million Dollars ($3,000,000).
               (b) Special Causes of Loss (ISO form CP 10 30 10/00 or its
substantive equivalent) Insurance covering the replacement cost of all leasehold
improvements, trade fixtures and personal property in or on the Premises, with a
deductible not greater than Two Thousand Five Hundred Dollars ($2,500.00).
               (c) Business Income insurance and extra expense coverage with
coverage amounts that shall reimburse Tenant for all rental, expense and other
payment obligations of Tenant under this Lease for a period of not less than one
(1) year.
               (d) Workers’ compensation or similar insurance in form and
amounts required by law, and Employer’s Liability with not less than the
following limits:

         
Each Accident:
  $ 500,000  
Disease—Policy Limit:
  $ 500,000  
Disease—Each Employee:
  $ 500,000  

     Tenant’s insurance shall be primary and not contributory to that carried by
Landlord, its agents, or mortgagee. Landlord, and if any, Landlord’s building
manager or agent, and, if Landlord requests, any Security Holder (as defined in
Section 16.1 below), shall be named as additional insureds under the insurance
required of the Tenant in Section 8.3(a), and Tenant’s property insurance
policies shall be endorsed to provide that any loss shall be payable to Landlord
and such other additional parties as Landlord may specify, as their respective
interests may appear. The company or companies writing any insurance which
Tenant is required to maintain under this Lease, as well as the form of such
insurance, shall at all times be subject to Landlord’s approval, and any such
company shall be licensed to do business in the state in which the Building is
located. Such insurance companies shall have a A.M. Best rating of A VI or
better.

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               (e) Tenant shall cause any contractor of Tenant performing work
on the Premises to maintain insurance as follows, with such other terms,
coverages and insurers, as Landlord shall reasonably require from time to time:
                    (i) Commercial General Liability Insurance, including
contractor’s liability coverage, contractual liability coverage, completed
operations coverage, broad form property damage endorsement, and contractor’s
protective liability coverage, to afford protection with limits, for each
occurrence, of not less than One Million Dollars ($1,000,000) with respect to
personal injury, death or property damage.
                    (ii) Workers’ compensation or similar insurance in form and
amounts required by law, and Employer’s Liability with not less than the
following limits:

         
Each Accident:
  $ 500,000  
Disease—Policy Limit:
  $ 500,000  
Disease—Each Employee:
  $ 500,000  

     Such insurance shall contain a waiver of subrogation provision in favor of
Landlord and its agents. Tenant’s contractor’s insurance shall be primary and
not contributory to that carried by Tenant, Landlord, their agents or
mortgagees. Tenant and Landlord, and if any, Landlord’s building manager or
agent, and, if Landlord requests, any Security Holder shall be named as
additional insured on Tenant’s contractor’s insurance policies.
          8.4 Insurance Certificates. Tenant shall deliver to Landlord
certificates of liability insurance on ACORD Form 25 and a certificate of
property insurance on ACORD Form 27 evidencing all required insurance no later
than five (5) days prior to the Commencement Date (or five (5) days prior to the
date of any early access to the Premises Landlord grants to Tenant in accordance
with the terms, of this Lease) and each renewal date. Each certificate shall
provide that said insurance shall not be canceled unless thirty (30) days prior
written notice (ten days for non-payment of premium) shall have been given to
Landlord and Tenant.
          8.5 Landlord’s Insurance. Subject to reimbursement as an Operating
Cost in accordance with the provisions of Section 2 hereof, Landlord shall
procure and maintain in effect throughout the Term of this Lease commercial
general liability insurance, property insurance and/or such other types of
insurance as are normally carried by reasonably prudent owners of commercial
properties substantially similar to the Project. Such coverages shall be in such
amounts, from such companies and on such other terms and conditions as Landlord
may from time to time reasonably determine, and Landlord shall have the right,
but not the obligation, to change, cancel, decrease or increase any insurance
coverages in respect of the Building, add additional forms of insurance as
Landlord shall deem reasonably necessary, and/or obtain umbrella or other
policies covering both the Building and other assets owned by or associated with
Landlord or its affiliates, in which event the cost thereof shall be equitably
allocated.

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          8.6 Waiver of Subrogation. Landlord and Tenant hereby waive and
release any and all rights of recovery against the other party, including
officers, employees, agents and authorized representatives (whether in contract
or tort) of such other party, that arise or result from any and all loss of or
damage to any property of the waiving party located within or constituting part
of the Building, including the Premises, to the extent of amounts payable under
a standard ISO Commercial Property insurance policy, or such additional property
coverage as the waiving party may carry (with a commercially reasonable
deductible), whether or not the party suffering the loss or damage actually
carries any insurance, recovers under any insurance or self-insures the loss or
damage. Each party shall have their property insurance policies issued in such
form as to waive any right of subrogation as might otherwise exist. This mutual
waiver is in addition to any other waiver or release contained in this Lease.
     9. FIRE AND OTHER CASUALTY.
          9.1 Termination. If a fire or other casually causes damage to the
Building or the Premises, and sufficient insurance proceeds will be available to
Landlord to cover the cost of any restoration to the Building and Premises,
Landlord shall engage a contractor or registered architect to estimate, within
one (1) month of the casualty (or as soon thereafter as is reasonably
practicable), to both Landlord and Tenant the amount of time needed to restore
the Building and the Premises to tenantability, using standard working methods
without the payment of overtime and other premiums. If the time needed exceeds
nine (9) months from the beginning of the restoration, or two (2) months
therefrom if the restoration would begin during the last twelve (12) months of
the Lease, then in the case of damage to the Premises, either Landlord or Tenant
may terminate this Lease, and in the case of damage to the Building, Landlord
may terminate this Lease, by notice to the other party within ten (10) days
after the notifying party’s receipt of the architect’s estimate. If sufficient
insurance proceeds will not be available to Landlord to cover the cost of any
restoration to the Building or the Premises, Landlord may terminate this Lease
by written notice to Tenant. Any termination pursuant to this Section 9.1 shall
be effective thirty (30) days from the date of such termination notice and Rent
shall be paid by Tenant to that date, with an abatement for any portion of the
Premises which has been rendered untenantable as a result of the casualty
(except to the extent that (a) the casualty was caused by the negligence or
intentional misconduct of Tenant, its agents, employees, contractors, subtenants
or assignees, or (b) so long as the same does not arise from Landlord’s breach
of its obligations under Section 8.5 above, Landlord does not receive insurance
proceeds sufficient to cover the rent interruption during such period).
          9.2 Restoration. If a casualty causes damage to the Building or the
Premises but this Lease is not terminated for any reason, then subject to the
rights of any mortgagees or ground lessors, Landlord shall obtain the applicable
insurance proceeds and diligently restore the Building and the Premises to
substantially their prior condition, except for modifications required by then
applicable Governmental Requirements or any other modifications to the common
areas of the Building, if any, deemed desirable by Landlord; provided, however,
that, within ten (10) days following notice to Tenant from Landlord (whether or
not this Lease is terminated pursuant to

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Section 9.1 above), Tenant shall irrevocably and unconditionally assign to
Landlord (or to any party designated by Landlord) all insurance proceeds payable
to Tenant under Tenant’s insurance required under Section 8.3(b) above which
pertain to the repair and restoration of the leasehold improvements in the
Premises, including any leasehold improvements performed by or on behalf of
Tenant pursuant to Section 5 above; and provided further, that if the cost of
repair and restoration by Landlord of the leasehold improvements in the Premises
exceeds the amount of insurance proceeds received by Landlord from Tenant’s
insurance carrier, the cost of such repair and restoration shall be promptly
paid by Tenant to Landlord, but in any event prior to Landlord’s commencement of
repair of the damage. Notwithstanding the foregoing, Landlord shall have no
obligation with respect to, and if Landlord elects or is required to perform any
restoration hereunder, Tenant shall be responsible for and shall, repair and
replace at its sole cost all of Tenant’s equipment, furniture, trade fixtures
and other personal property in the Premises, including, without limitation, any
telecommunications wires, cables and related devices located in or serving the
Premises. Rent shall be abated on a per diem basis during the restoration for
any portion of the Premises which is untenantable, except to the extent that
(a) the casualty was caused by the negligence or intentional misconduct of
Tenant, its agents, employees, contractors, subtenants or assignees,
(b) Landlord is delayed in completing the repair or restoration as a result of
any act, omission, neglect or failure of Tenant or any of Tenant’s agents,
employees, contractors or subcontractors or (c) Landlord does not receive
insurance proceeds sufficient to cover the rent interruption during such period,
so long as the same does not arise from Landlord’s breach of its obligations
under Section 8.5 above. Tenant shall not be entitled to any compensation or
damages from Landlord for loss of the use of the Premises, damage to Tenant’s
personal property and trade fixtures or any inconvenience occasioned by such
damage, repair or restoration. Tenant hereby waives the provisions of
Section 1932, Subdivision 2, and Section 1933, Subdivision 4, of the California
Civil Code, and the provisions of any similar law hereinafter enacted.
     10. EMINENT DOMAIN. If a part of the Project is taken by eminent domain or
deed in lieu thereof which is so substantial that the Premises cannot, in
Tenant’s reasonable judgment, reasonably be used by Tenant for the operation of
its business, then either party may terminate this Lease effective as of the
date of the taking. If any substantial portion of the Project is taken without
affecting the Premises, then Landlord may terminate this Lease as of the date of
such taking. Rent shall abate from the date of the taking in proportion to any
part of the Premises taken. The entire award for a taking of any kind shall be
paid to Landlord, and Tenant shall have no right to share in the award;
provided, however, that the foregoing shall not be deemed to prohibit Tenant
from filing a separate claim, at its sole cost and expense, for an award or
portion thereof separately designated for (a) relocation costs, (b) moving
expenses or (c) the unamortized portion of the value of all Work performed in
the Premises by Tenant during the Term (such amortization to be calculated on a
straight-line basis over the Term of this Lease, without regard to any future
extension terms as of the date of the taking, and such value to be determined,
at Tenant’s expense, by an appraiser selected by Landlord and approved by
Tenant). All obligations accrued to the date of the taking shall be performed by
the party liable to perform said obligations, as set forth herein. Tenant hereby
waives

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any and all rights it might otherwise have pursuant to Section 1265.130 of The
California Code of Civil Procedure.
     11. RIGHTS RESERVED TO LANDLORD. Landlord may exercise at any time any of
the following rights respecting the operation of the Project without liability
to Tenant of any kind:
          11.1 Name. To change the name of the Building or the Project or the
street address of the Building.
          11.2 Signs. To install, modify and/or maintain any signs on the
exterior and in the interior of the Building or on the Project, and to approve
at its sole discretion, prior to installation, any of Tenant’s signs in the
Premises visible from the common areas or the exterior of the Building.
          11.3 Window Treatments. To approve, at its discretion, prior to
installation, any shades, blinds, ventilators or window treatments of any kind,
as well as any lighting within the Premises that may be visible from the
exterior of the Building or any interior common area.
          11.4 Keys. To retain and use at any time passkeys to enter the
Premises or any door within the Premises. Tenant shall not alter or add any lock
or bolt.
          11.5 Access. To have access to the Premises with twenty-four hours’
prior notice (except in the case of an emergency, in which case Landlord shall
have the right to immediate access) to inspect the Premises, to post notices of
non-responsibility in connection with any Work, to make repairs, alterations,
additions or improvements to the Premises or Building, and to perform any other
obligations of Landlord hereunder, all without abatement of Rent.
          11.6 Preparation for Reoccupancy. To decorate, remodel, repair, alter
or otherwise prepare the Premises for reoccupancy at any time after Tenant
abandons the Premises, without relieving Tenant of any obligation to pay Rent.
          11.7 Heavy Articles. To approve the weight, size, placement and time
and manner of movement within the Building of any safe, central filing system or
other heavy article of Tenant’s property. Tenant shall move its property
entirely at its own risk.
          11.8 Show Premises. To show the Premises, at any .reasonable time, to
prospective purchasers, brokers, lenders, mortgagees, investors, rating agencies
or others, and, during the last six (6) months of the Term, as it may be
extended, to prospective tenants, provided that Landlord gives prior notice to
Tenant and does not materially interfere with Tenant’s use of the Premises.
          11.9 Relocation of Tenant. Intentionally Omitted.

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          11.10 Use of Lockbox. To designate a lockbox collection agent for
collections of amounts due Landlord. In that case, the date of payment of Rent
or other sums shall be the date of the agent’s receipt of such payment or the
date of actual collection if payment is made in the form of a negotiable
instrument thereafter dishonored upon presentment. However, Landlord may reject
any payment for all purposes as of the date of receipt or actual collection by
mailing to Tenant within a reasonable time after such receipt or collection a
check equal to the amount sent by Tenant
          11.11 Repairs and Alterations. To make repairs or alterations to the
Project and in doing so transport any required material through the Premises, to
close entrances, doors, corridors, elevators and other facilities in the
Project, to open any ceiling in the Premises, or to temporarily suspend services
or use of common areas in the Building. Landlord may perform any such repairs or
alterations during ordinary business hours, except that Tenant may require any
work in the Premises to be done after business hours if Tenant pays Landlord for
overtime and any other expenses incurred. Landlord may do or permit any work on
any nearby building, land, street, alley or way.
          11.12 Building Services. To install, use and maintain through the
Premises, pipes, conduits, wires and ducts serving the Building, provided that
such installation, use and maintenance does not unreasonably interfere with
Tenant’s use of the Premises.
          11.13 Use of Roof. To install, operate, maintain and repair any
satellite dish, antennae, equipment, or other facility on the roof of the
Building or to use the roof of the Building in any other manner, or to allow any
entity selected by Landlord to undertake the foregoing, provided that such
installation, operation, maintenance, repair or use does not unreasonably
interfere with Tenant’s use of the Premises.
          11.14 Other Actions. To take any other action which Landlord deems
reasonable in connection with the operation, maintenance or preservation of the
Building and the Project.
     12. EVENTS OF DEFAULT.
          12.1 Tenant’s Default. The occurrence of any one or more of the
following events (each, an “Event of Default”) shall constitute a breach of this
Lease by Tenant.
               (a) Tenant fails to pay any Rent when due, and such failure
continues for five (5) business days or more following Landlord’s notice of such
failure.
               (b) Tenant fails to perform its obligations under Section 11.9
(Relocation), Section 16 (Subordination), Section 17 (Assignment and Sublease),
Section 19 (Estoppel Certificate) or Section 28 (Hazardous Substances) and fails
to cure such default within ten (10) days following Landlord’s notice of such
default.
               (c) Tenant abandons the Premises.

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               (d) Tenant fails to perform any obligation to Landlord under this
Lease other than those described in Sections 12.1(a), 12.1(b) or 12.1(c) above,
and such failure continues for ten (10) days after written notice from Landlord
or Landlord’s agent, except that if Tenant begins to cure its failure within the
ten (10) day period but cannot reasonably complete its cure within such period,
then, so long as Tenant continues to diligently attempt to cure its failure, the
ten (10) day period shall be extended to sixty (60) days, or such lesser period
as is reasonably necessary to complete the cure.
               (e) One of the following credit defaults occurs:
                       (i) Tenant (or any guarantor of Tenant’s obligations
hereunder) commences any proceeding under any law relating to bankruptcy,
insolvency, reorganization or relief of debts, or seeks appointment of a
receiver, trustee, custodian or other similar official for the Tenant (or the
guarantor) or for any substantial part of its property, or any such proceeding
is commenced against Tenant (or the guarantor) and either remains undismissed
for a period of thirty (30) days or results in the entry of an order for relief
against Tenant (or the guarantor) which is not fully stayed within seven
(7) days after entry;
                       (ii) Tenant (or any guarantor of Tenant’s obligations
hereunder) becomes insolvent or bankrupt, does not generally pay its debts as
they become due, or admits in writing its inability to pay its debts, or makes a
general assignment for the benefit of creditors;
                       (iii) Any third party obtains a levy or attachment under
process of law against Tenant’s leasehold interest.
     Tenant acknowledges and agrees that, notwithstanding the foregoing
provisions of this Section 12, Tenant shall be in default for purposes of
Section 1161 of the California Code of Civil Procedure immediately following
Tenant’s failure to perform or comply with any covenants, agreements, terms or
conditions of this Lease to be performed or observed by Tenant, including,
without limitation, Tenant’s failure to pay Rent when due, and that any notices
required to be given by Landlord under this Section 12 shall, in each case, be
in lieu of, and not in addition to, any notice required under Section 1161 of
the California Code of Civil Procedure, and shall be deemed to satisfy the
requirement, if any, that notice be given pursuant to such section.
          12.2 Landlord Defaults. Landlord shall be in default hereunder if
Landlord has not begun and pursued with reasonable diligence the cure of any
failure of Landlord to meet its obligations hereunder within thirty (30) days
after the receipt by Landlord of written notice from Tenant of the alleged
failure to perform. In no event shall Tenant have the right to terminate or
rescind this Lease as a result of Landlord’s default as to any covenant or
agreement contained in this Lease. Tenant hereby waives such remedies of
termination and rescission and hereby agrees that Tenant’s remedies for default
hereunder and for breach of any promise or inducement shall be limited to a suit
for damages and/or injunction. In addition, Tenant hereby covenants that, prior
to

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the exercise of any such remedies, Tenant will give notice and a reasonable time
to cure any default by Landlord to any holder of a mortgage or deed of trust
encumbering Landlord’s interest in the Project of which Tenant has been given
notice.
          12.3 Force Majeure. Notwithstanding anything contained in this Lease
to the contrary, neither party shall be in default hereunder to the extent such
party is unable to perform any of its obligations on account of any prevention,
delay, stoppage due to strikes, lockouts, inclement weather, labor disputes,
inability to obtain labor, materials, fuels, energy or reasonable substitutes
therefor, governmental restrictions, regulations, controls, actions or inaction,
civil commotion, fire or other acts of god, national emergency, acts of war or
terrorism or any other cause of any kind beyond its reasonable control (except
financial inability) (collectively, “Force Majeure”); provided, however, that
nothing contained in this Section 12.3 shall (1) relieve Tenant from the
obligation to timely pay Rent under this Lease, (2) permit Tenant to holdover in
the Premises after the expiration or earlier termination of this Lease,
(3) relieve Tenant from any obligation required to be performed by Tenant
hereunder if Tenant’s failure to perform such obligation would constitute a
breach under Sections 6.1 or 7.1 above, or would interfere with any other tenant
of the Projects use, occupancy or enjoyment of its respective premises or the
Project.
     13. LANDLORD REMEDIES. UPON ANY EVENT OF DEFAULT BY TENANT, LANDLORD SHALL
HAVE THE FOLLOWING REMEDIES, IN ADDITION TO ALL OTHER RIGHTS AND REMEDIES
PROVIDED BY LAW OR OTHERWISE PROVIDED IN THIS LEASE, TO WHICH LANDLORD MAY
RESORT CUMULATIVELY OR IN THE ALTERNATIVE:
          13.1 Termination of Lease. Landlord may elect by notice to Tenant to
terminate this Lease, in which event, Tenant shall immediately vacate the
Premises and deliver possession to Landlord.
          13.2 Civil Code Section 1951. 4 Remedy. Even though Tenant has
breached this Lease, this Lease shall continue in effect for so long as Landlord
does not terminate Tenant’s right to possession, and Landlord shall have all of
its rights and remedies, including the right, pursuant to California Civil Code
Section 1951.4, to recover all rent as it becomes due under this Lease, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations. Acts of maintenance or preservation or efforts to re let the
Premises or the appointment of a receiver upon initiative of Landlord to protect
Landlord’s interest under this Lease shall not constitute a termination of
Tenant’s right to possession unless written notice of termination is given by
Landlord to Tenant.
          13.3 Lease Termination Damages. If Landlord elects to terminate this
Lease, then this Lease shall terminate on the date for termination set forth in
such notice. Tenant shall immediately vacate the Premises and deliver possession
to Landlord, and Landlord may repossess the Premises and may, at Tenant’s sole
cost, remove any of Tenant’s signs and any of its other

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property, without relinquishing its right to receive Rent or any other right
against Tenant. On termination, Landlord has the right to recover from Tenant as
damages:
               (a) The worth at the time of award of unpaid Rent and other sums
due and payable which had been earned at the time of termination; plus
               (b) The worth at the time of award of the amount by which the
unpaid Rent and other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such Rent loss that
Tenant proves could have been reasonably avoided; plus
               (c) The worth at the time of award of the amount by which the
unpaid Rent and other sums due and payable for the balance of the Term after the
time of award exceeds the amount of such Rent loss that Tenant proves could be
reasonably avoided; plus
               (d) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform Tenant’s obligations
under this Lease, or which, in the ordinary course of things, would be likely to
result therefrom, including, without limitation, any costs or expenses incurred
by Landlord: (i) in retaking possession of the Premises; (ii) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering or
rehabilitating the Premises or any portion thereof, including such acts for
reletting to a new tenant or tenants; (iii) for leasing commissions; or (iv) for
any other costs necessary or appropriate to relet the Premises; plus
               (e) At Landlord’s election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by the laws of
the State of California.
     The “worth at the time of award” of the amounts referred to in
Sections 13.3(a) and 13.3(b) is computed by allowing interest at the Interest
Rate on the unpaid rent and other sums due and payable from the termination date
through the date of award. The “worth at the time of award” of the amount
referred to in Section 13.3(c) is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%). Tenant waives redemption or relief from forfeiture under
California Code of Civil Procedure Sections 1174 and 1179, or under any other
present or future law, if Tenant is evicted or Landlord takes possession of the
Premises by reason of any Event of Default by Tenant hereunder.
     13.4 Landlord’s Remedies Cumulative. All of Landlord’s remedies under this
Lease shall be in addition to all other remedies Landlord may have at law or in
equity, including, without limitation, the remedy described in California Civil
Code Section 1951.4 (pursuant to which Landlord may continue this Lease in
effect after Tenant’s breach and abandonment and recover rent as it becomes due
if Tenant has the right to sublet or assign the Lease, subject to reasonable
limitations). Waiver by Landlord of any breach of any obligation by Tenant shall
be effective only if it is in writing, and shall not be deemed a waiver of any
other breach, or any subsequent breach of

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the same obligation. The possession of Tenant’s funds, negotiation of Tenant’s
negotiable instruments, or acceptance of Tenant’s payment by Landlord or its
agents shall not constitute a waiver of any breach by Tenant, and if such
possession, negotiation or acceptance occurs after Landlord’s notice to Tenant,
or termination of this Lease or of Tenant’s right to possession, such
possession, negotiation or acceptance shall not affect such notice or
termination. Acceptance of payment by Landlord after commencement of a legal
proceeding or final judgment shall not affect such proceeding or judgment.
Landlord may advance such monies and take such other actions for Tenant’s
account as reasonably may be required to cure or mitigate any default by Tenant.
Tenant shall immediately reimburse Landlord for any such advance, and such sums
shall bear interest at the Interest Rate until paid.
          13.5 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH PARTY WAIVES TRIAL BY JURY IF ANY LEGAL PROCEEDING IS BROUGHT BY THE
OTHER IN CONNECTION WITH THIS LEASE. EACH PARTY SHALL BRING ANY ACTION AGAINST
THE OTHER IN CONNECTION WITH THIS LEASE IN A FEDERAL OR STATE COURT LOCATED IN
CALIFORNIA, CONSENTS TO THE JURISDICTION OF SUCH COURTS, AND WAIVES ANY RIGHT TO
HAVE ANY PROCEEDING TRANSFERRED FROM SUCH COURTS ON THE GROUND OF IMPROPER VENUE
OR INCONVENIENT FORUM. THE PROVISIONS OF THIS SECTION 13.5 SHALL SURVIVE THE
EXPIATION OR EARLIER TERMINATION OF THIS LEASE.
     14. SURRENDER. Upon the expiration or earlier termination of this Lease for
any reason, Tenant shall surrender the Premises to Landlord in its condition
existing as of the date Landlord delivers possession of the Premises to Tenant,
normal wear and tear and damage by fire or other casualty excepted, with all
interior walls repaired if marked or damaged, all broken, marred or
nonconforming acoustical ceiling tiles replaced, the plumbing and electrical
systems and lighting in good order and repair, including replacement of any
burned out or broken light bulbs or ballasts, the HVAC equipment serviced and
repaired by a reputable and licensed service firm acceptable to Landlord, and
all floors cleaned, all to the reasonable satisfaction of Landlord. Tenant shall
remove from the Premises and the Project all of Tenant’s trade fixtures,
furniture, moveable equipment and other personal property, and any Work which
Landlord elects to be removed pursuant to Section 5.3, and shall restore the
Premises to its condition prior to their installation, including, without
limitation, repairing all damage caused by the installation or removal of any of
the foregoing items. If Tenant does not timely remove such property, then Tenant
shall be conclusively presumed to have, at Landlord’s election: (a) conveyed
such property to Landlord without compensation or (b) abandoned such property,
and Landlord may dispose of or store any part thereof in any manner at Tenant’s
sole cost, without waiving Landlord’s right to claim from Tenant all expenses
arising out of Tenant’s failure to remove the property, and without liability to
Tenant or any other person. Landlord shall have no duty to be a bailee of any
such personal property. If Landlord elects to consider such property abandoned,
Tenant shall be liable to Landlord for the costs of: (i) removal of any such
Work or personal property, (ii) storage, transportation, and disposition of the
same, and (iii) repair

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and restoration of the Premises, together with interest thereon at the Interest
Rate from the date of expenditure by Landlord.
     15. HOLDOVER. Tenant shall have no right to holdover possession of the
Premises after the expiration or termination of this Lease without Landlord’s
prior written consent which Landlord may withhold in its sole and absolute
discretion. If, however, Tenant retains possession of any part of the Premises
after the Term, Tenant shall become a tenant at sufferance only, for the entire
Premises upon all of the terms of this Lease as might be applicable to such
tenancy, except that Tenant shall pay (a) for the first thirty (30) days of such
holding over, an amount equal to one hundred fifty percent (150%) of the Base
Rent, Operating Cost Share Rent, and Tax Share Rent payable by Tenant
immediately prior to such holding over, and (b) thereafter, an amount equal to
two hundred percent (200%) of the Base Rent, Operating Cost Share Rent, and Tax
Share Rent payable by Tenant immediately prior to such holding over (without
regard to any abatements of Rent on account of casualty or otherwise), computed
on a monthly basis for each full or partial month Tenant remains in possession.
Tenant shall also protect, defend, indemnify and hold Landlord harmless from and
against all Claims resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender and any lost profits to Landlord resulting
therefrom. No acceptance of Rent or other payments by Landlord under these
holdover provisions shall operate as a waiver of Landlord’s right to regain
possession or any other of Landlord’s remedies.
     16. SUBORDINATION TO GROUND LEASES AND MORTGAGES.
          16.1 Subordination. This Lease shall be subordinate to any present or
future ground lease or mortgage (each, a “Superior Interest”) respecting the
Project, and any amendments to such ground lease or mortgage, at the election of
the ground lessor or mortgagee (a “Security Holder”) as the case may be,
effected by notice to Tenant in the manner provided in this Lease. The
subordination shall be effective upon such notice, but at the request of
Landlord or such Security Holder, Tenant shall within fifteen (15) days after
the request, execute and deliver to the requesting party any reasonable
documents provided to evidence the subordination. Any mortgagee has the right,
at its sole option, to subordinate its mortgage to the terms of this Lease,
without notice to, nor the consent of, Tenant. With respect to any Superior
Interest to which this Lease is now or shall hereafter become subordinate,
Landlord shall use commercially reasonable efforts to obtain from the Security
Holder of such Superior Interest, for the benefit of Tenant, a non-disturbance
agreement, in the customary form of such Security Holder, providing generally
that as long as Tenant is not in default under this Lease, this Lease will not
be terminated if such Security Holder acquires title to the Building or Project
by reason of foreclosure proceedings, acceptance of a deed in lieu of
foreclosure, or termination of the leasehold interest of Landlord, provided that
Tenant attorns to such Security Holder in accordance with its requirements.
Except for making such commercially reasonable efforts, Landlord will be under
no duty or obligation hereunder with respect to any Superior Interest, nor will
the failure or refusal of the Security Holder of any Superior Interest to grant
a non-disturbance agreement render Landlord liable to Tenant, or affect this
Lease, in any

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manner. Tenant will bear all costs and expenses (including attorneys’ fees) of
the Security Holder of such Superior Interest in connection with Landlord’s
reasonable efforts to obtain a non-disturbance agreement. Notwithstanding any
provision in this Lease to the contrary, if Tenant fails to execute and deliver
the documents requested under this Section 16.1 within the fifteen (15) day
period, Tenant’s failure to execute and deliver such documents within ten
(10) days after notice to Tenant of Tenant’s failure to execute and deliver the
same within the fifteen (15) day period shall constitute a default under
Section 12 above.
          16.2 Termination of Ground Lease or Foreclosure of Mortgage. If any
ground lease is terminated or mortgage foreclosed or deed in lieu of foreclosure
given and the Security Holder or purchaser at a foreclosure sale shall thereby
become the owner of the Project, Tenant shall attorn to such Security Holder or
purchaser without any deduction or setoff by Tenant, and this Lease shall
continue in effect as a direct lease between Tenant and such Security Holder or
purchaser. The Security Holder or purchaser shall be liable as Landlord only
during the tune such Security Holder or purchaser is the owner of the Project.
At the request of Landlord or any Security Holder, Tenant shall execute and
deliver within fifteen (15) days after the request any document furnished by the
requesting party to evidence Tenant’s agreement to attorn.
          16.3 Security Deposit. Any Security Holder shall be responsible for
the return of any security deposit by Tenant only to the extent the security
deposit, if any, is received by such Security Holder.
          16.4 Notice and Right to Cure. Tenant agrees to send by registered or
certified mail to any Security Holder identified in a notice from Landlord to
Tenant, a copy of any notice of default sent by Tenant to Landlord. If Landlord
fails to cure such definite within the required time period under this Lease,
but any Security Holder begins to cure within ten (10) days after such period
and proceeds diligently to complete such cure, then such Security Holder shall
have such additional time as is necessary to complete such cure, including any
time necessary to obtain possession if possession is necessary to cure, and
Tenant shall not begin to enforce its remedies so long as the cure is being
diligently pursued.
          16.5 Definitions. As used in this Section 16, “mortgage” shall include
“trust deed” and “deed of trust”; “mortgagee” shall include “trustee”,
‘beneficiary” and the mortgagee of any ground lessee; and “ground lessor”,
“mortgagee”, and “purchaser at a foreclosure sale” shall include, in each case,
all of its successors and assigns, however remote.
     17. ASSIGNMENT AND SUBLEASE.
          17.1 In General. Tenant shall not, without Landlord’s prior written
consent, in each case: (a) make or allow any assignment or transfer, by
operation of law or otherwise, of any part of Tenant’s interest in this Lease,
(b) sublet any part of the Premises, or (c) permit anyone other than Tenant and
its employees to occupy any part of the Premises (all of the foregoing are

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hereinafter sometimes referred to individually as a “Transfer”, and collectively
as “Transfers”, any person to whom any Transfer is made or sought to be made is
hereinafter sometimes referred to as a “Transferee”, and any person by whom any
Transfer is made or sought to be made is hereinafter sometimes referred to as a
“Transferor”). Tenant shall remain primarily liable for all of its obligations
under this Lease, notwithstanding any Transfer. No consent granted by Landlord
shall be deemed to be a consent to any subsequent Transfer. Tenant shall pay all
of Landlord’s attorneys’ fees and other expenses incurred in connection with any
consent requested by Tenant or in considering any proposed Transfer, up to a
maximum amount of Two Thousand Five Hundred Dollars ($2,500.00) per proposed
Transfer (unless there is a dispute in connection with the proposed Transfer, in
which event the provisions of Section 25.26 below shall apply). Any Transfer
without Landlord’s prior written consent shall be void. Except for a Permitted
Transfer (as defined below), if Tenant shall assign this Lease or sublet or
otherwise Transfer the Premises, or any portion thereof, any rights of Tenant to
renew this Lease, to extend the Term or to lease additional space in the Project
shall be extinguished thereby and will not be transferred to the Transferee, all
such rights being personal to the Tenant named herein. In addition, Tenant shall
not, without Landlord’s prior written consent, which Landlord may withhold in
its sole discretion, mortgage, pledge or encumber this Lease, the term or estate
hereby granted or any interest hereunder.
          17.2 Landlord’s Consent. Landlord will not unreasonably withhold its
consent to any proposed Transfer. It shall be reasonable for Landlord to
withhold its consent to any Transfer if (a) Tenant is in default under this
Lease, (b) the financial responsibility, nature of business, and character of
the proposed Transferee are not all reasonably satisfactory to Landlord, (c) in
the reasonable judgment of Landlord the purpose for which the Transferee intends
to use the Premises (or a portion thereof) is not in keeping with Landlord’s
standards for the Building or are in violation of the terms of this Lease or any
other leases in the Project, (d) the proposed Transferee is a government entity,
(e) the proposed Transfer is between a Transferee of Tenant and a third party,
or (f) the proposed effective rent under the sublease or other Transfer is less
than eighty percent (80%) of the effective rent then being quoted by Landlord
for comparable space in the Project for a comparable term, calculated using a
present value analysis; provided, however, that if no comparable space in the
Project is available for lease for a comparable term at the time of the proposed
Transfer, then the foregoing restriction on the proposed effective rent under
the sublease or other Transfer shall be inapplicable. The foregoing shall not
exclude any other reasonable basis for Landlord to withhold its consent
          17.3 Procedure. Tenant shall notify Landlord of any proposed Transfer
at least twenty-five (25) days prior to its proposed effective date. The notice
shall include the name and address of the proposed Transferee, its corporate
affiliates in the case of a corporation and its partners in the case of a
partnership, a description of the portion of the Premises that is subject to the
Transfer (the “Transfer Premises”), a calculation of the Transfer Premium (as
defined in Section 17.6 below) payable in connection with the Transfer, an
executed copy of the proposed Transfer agreement, and sufficient information to
permit Landlord to determine the financial responsibility and character of the
proposed Transferee (including, without limitation, the most

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recent financial statements for the proposed Transferee). Landlord shall notify
Tenant whether it will approve the Transfer, disapprove the Transfer, or
recapture the Premises in accordance with the terms of Section 17.7 below,
within twenty (20) days after receipt of the foregoing information. As a
condition to the effectiveness of any assignment of this Lease, the assignee
shall execute and deliver to Landlord, at least ten (10) days prior to the
effective date of the assignment, Landlord’s standard form of Consent to
Assignment, providing for, among other things, an assumption of all of the
obligations of Tenant under this Lease. As a condition to the effectiveness of
any other Transfer, Transferee shall execute and deliver to Landlord, at least
ten (10) days prior to the effective date of such Transfer, Landlord’s standard
consent form, providing, among other things, (a) the Transferee’s obligation to
indemnify Landlord and the other Landlord Parties consistent with Tenant’s
indemnification obligations in Section 8.2 above, and (b) the Transferee’s
agreement that any such Transfer shall be subordinate and subject to the
provisions of this Lease, and if this Lease shall be terminated during the term
of any such Transfer, Landlord shall have the right to: (i) treat such Transfer
as cancelled and repossess the Transfer Premises by any lawful means, or
(ii) require that the Transferee attorn to and recognize Landlord as its
landlord under any such Transfer. If Tenant shall default and fail to cure
within the time permitted for cure under Section 12 above, Landlord is hereby
irrevocably authorized, as Tenant’s agent and attorney-in-fact, to direct any
Transferee to make all payments under or in connection with the Transfer
directly to Landlord (which Landlord shall apply towards Tenant’s obligations
under this Lease) until such default is cured.
          17.4 Change of Management or Ownership. Subject to Section 17.5 below,
and except in the case of a public offering of Tenant’s stock at any time the
shares of Tenant are publicly traded on a national exchange, any transfer of the
direct or indirect power to affect the management or policies of Tenant or
direct or indirect change in 50% or more of the ownership interest in Tenant
shall constitute an assignment of this Lease.
          17.5 Permitted Transfers. If Tenant is not then in default of this
Lease, Tenant may assign this Lease or sublet any portion of the Premises
(hereinafter collectively referred to as a “Permitted Transfer”) to (a) a parent
or subsidiary of Tenant, or an entity under common control with Tenant, (b) any
successor entity to Tenant by way of merger, consolidation or other
non-bankruptcy corporate reorganization, or (iii) an entity which acquires all
or substantially all of Tenants assets (collectively, “Permitted Transferees”,
and, individually, a “Permitted Transferee”); provided that (1) at least ten
(10) business days prior to the Transfer, Tenant notifies Landlord of such
Transfer, and supplies Landlord with any documents or information reasonably
requested by Landlord regarding such Transfer or Permitted Transferee,
including, but not limited to, copies of the sublease or instrument of
assignment and copies of documents establishing to the reasonable satisfaction
of Landlord that the transaction in question is one permitted under this
Section 17.5, (2) at least ten (10) business days prior to the Transfer, Tenant
furnishes Landlord with a written document executed by the proposed Permitted
Transferee in which such entity assumes all of Tenant’s obligations under this
Lease with respect to the Transfer Premises, (3) in the case of a Transfer
pursuant to clause (b) above, the successor entity must have a tangible net
worth at the time of the Transfer (i.e., not including intangible assets in the
calculation, such as goodwill, patents,

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copyrights, and trademarks) computed in accordance with generally accepted
accounting principles (“Net Worth”) that is at least equal to the greater of
(i) the Net Worth of Tenant immediately prior to such Transfer, or (ii) the Net
Worth on the date of this Lease of the original named Tenant, and (4) any such
proposed Transfer is made for a good faith operating business purpose and not,
whether in a single transaction or in a series of transactions, be entered into
as a subterfuge to evade the obligations and restrictions relating to Transfers
set forth in this Section 17.
     17.6 Transfer Premium.
               (a) If Landlord consents to a Transfer, as a condition thereto
which the parties hereby agree is reasonable, Landlord shall be entitled to
receive, as Additional Rent hereunder, fifty percent (50%) of any Transfer
Premium derived from such Transfer. As used herein, the term “Transfer Premium”
means (i) in the case of an assignment, any consideration (including, without
limitation, payment for leasehold improvements) paid by the assignee on account
of such assignment, and (ii) in the case of any other Transfer, all rent,
additional rent or other consideration paid by the Transferee to the Transferor
pursuant to such Transfer in excess of the base rent and additional rent payable
by such Transferor during the term of the Transfer on a per rentable square foot
basis, after deducting, on an amortized basis, without interest, over the term
of the Transfer, any brokerage commission (not to exceed commissions typically
paid in the market at the time of such subletting or assignment), reasonable
attorneys’ fees, and the reasonable cost of Work made to the Transfer Premises
to effect the Transfer (not to exceed Four Dollars ($4.00) per rentable square
foot of the Transfer Premises) paid by Tenant in connection with the Transfer
(“Recoverable Expenses”), unless the deduction of such Recoverable Expenses is
waived by Transferor pursuant to Section 17.6(b) below. Payment of foe portion
of the Transfer Premium due Landlord hereunder shall be a joint and several
obligation of Tenant and the Transferee, and shall be made to Landlord as
follows: (1) in the case of an assignment, the Transferor shall pay the portion
of the Transfer Premium owing to Landlord within ten (10) business days after
the Transferor receives the consideration described in clause (i) above; and
(2) in the case of any other Transfer, on the first day of each month during the
term of the Transfer, the Transferee shall pay directly to Landlord the amount
by which the rent, additional rent or other consideration due from the
Transferee for such month exceeds (A) the base rent and additional rent payable
by the applicable Transferor for said month which is allocable to the Transfer
Premises plus (B) the amortized amount of Recoverable Expenses allocated to such
month, unless such Recoverable Expenses are waived by Transferor pursuant to
Section 17.6(b).
               (b) Within sixty (60) days after the effective date of any
Transfer, Transferor shall provide Landlord a written statement, together with
reasonably detailed invoices therefor, certifying the total amount of
Recoverable Expenses in connection with any Transfer and Tenant’s calculation of
the Transfer Premium. If Transferor fails to provide such statement and invoices
to Landlord within the sixty (60) day period, Transferor shall be deemed to have
waived the deduction of Recoverable Expenses in determining the Transfer
Premium. Landlord or its authorized representatives shall have the right at all
reasonable times to audit the books, records and

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papers of Tenant, and any other Transferor, relating to a Transfer, and shall
have the right to make copies thereof. If the Transfer Premium respecting any
Transfer shall be found to be understated, Tenant shall within ten (10) business
days after demand pay the deficiency, and if understated by more than two
percent (2%), Tenant shall pay Landlord’s costs of such audit.
          17.7 Recapture. In the case of a proposed assignment, sublease or
other Transfer, Landlord may terminate this Lease as to the Transfer Premises by
giving Tenant written notice (the “Recapture Noticed”) within twenty (20) days
after Landlord’s receipt of the information required under Section 17.3. Such
termination shall be effective as of the termination date set forth in
Landlord’s Recapture Notice, and all obligations of Landlord and Tenant under
this Lease as to such terminated space shall expire as of such termination date,
except those that expressly survive any termination of this Lease. In the event
of a recapture by Landlord, if this Lease shall be canceled with respect to less
than the entire Premises, the Rent reserved herein shall be prorated on the
basis of the number of rentable square feet retained by Tenant in proportion to
the number of rentable square feet contained in the Premises, and this Lease as
so amended shall continue thereafter in full force and effect, and upon request
of either party, the parties shall execute written confirmation of the same.
          17.8 Tenant Remedies. Notwithstanding anything to the contrary in this
Lease, if Tenant claims that Landlord has unreasonably withheld or delayed its
consent under this Section 17 or otherwise has breached or acted unreasonably
under this Section 17, Tenant’s sole remedy shall be declaratory judgment and an
injunction for the relief sought without any monetary damages, and Tenant hereby
waives all other remedies, including, without limitation, any right provided
under California Civil Code Section 1995.310 or other applicable laws to
terminate this Lease. Tenant shall indemnify, defend and hold harmless Landlord
from any and all Claims involving any third party or parties (including .without
limitation Tenant’s broker or proposed transferee) who claim they were damaged
by Landlord’s withholding or conditioning of Landlord’s consent, unless it is
determined by a court of competent jurisdiction that Landlord has withheld or
conditioned its consent to Tenant’s proposed Transfer in bad faith.
     18. CONVEYANCE BY LANDLORD. If Landlord shall at any time transfer its
interest in the Project or this Lease, Landlord shall be released from any
obligations occurring after such transfer, except the obligation to return to
Tenant any security deposit not delivered to its transferee, and Tenant shall
look solely to Landlord’s successors for performance of such obligations. This
Lease shall not be affected by any such transfer.
     19. ESTOPPEL CERTIFICATE. Each party shall, within ten (10) days after
receiving a request from the other party, execute, acknowledge in recordable
form, and deliver to the other parry or its designee a certificate stating,
subject to a specific statement of any applicable exceptions, that this Lease as
amended to date is in full force and effect, that Tenant is paying Rent and
other charges on a current basis, and that to the best of the knowledge of the
certifying party, the other party has committed no uncured defaults and has no
offsets or claims. The certifying party may also be

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required to state the date of commencement of payment of Rent, the Commencement
Date, the Termination Date, the Base Rent, the current Operating Cost Share Rent
and Tax Share Rent estimates, the status of any improvements required to be
completed by Landlord, the amount of any security deposit, and such other
matters as may be reasonably requested. Tenant’s failure to execute or deliver
an estoppel certificate in the required time period shall constitute an
acknowledgment by Tenant that the statements included in the estoppel
certificate are true and correct, without exception. Tenant’s failure to execute
or deliver an estoppel certificate or other document or instrument required
under this Section 19 in a timely manner shall be a material breach of this
Lease.
     20. LEASE DEPOSIT.
          20.1 Prepaid Rent and Security Deposit. Tenant shall deposit with
Landlord on the date Tenant executes and delivers this Lease the cash sums set
forth in the Schedule for both Prepaid Rent and Security Deposit (collectively,
the “Lease Deposit”). The Prepaid Rent shall be applied by Landlord against the
first full monthly installment of Base Rent payable hereunder. The Security
Deposit shall be held by Landlord as security for the faithful performance by
Tenant of all its obligations under this Lease.
          20.2 Application of Security Deposit. Tenant agrees that, if Tenant
fails to pay any Rent, or otherwise defaults with respect to any provision of
this Lease, Landlord may (but shall not be obligated to), and without prejudice
to any other remedy available to Landlord, use, apply or retain all or any
portion of the Security Deposit for the payment of any Rent in default or for
the payment of any other sum to which Landlord may become obligated by reason of
Tenant’s default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby, including, without limitation, prospective damages
and damages recoverable pursuant to California Civil Code Section 1951.2. If
Landlord uses or applies all or any portion of the Security Deposit as provided
above, Tenant shall, within five (5) days after demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to the
full amount thereof, and Tenant’s failure to do so shall, at Landlord’s option,
be an Event of Default under this Lease with no opportunity to cure. If Tenant
performs all of Tenant’s obligations hereunder, the Security Deposit, or so much
thereof as has not theretofore been applied by Landlord, shall be returned to
Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s
interest hereunder) within thirty (30) days following the later to occur of
(a) the expiration of the Term of this Lease or (b) Tenant’s vacation and
surrender of the Premises in accordance with the requirements of this Lease.
Tenant waives the provisions of California Civil Code Section 1950.7, or any
similar or successor laws now or hereinafter in effect, that restrict Landlord’s
use or application of the Deposit, or that provide specific time periods for
return of the Deposit. Landlord shall not be deemed to hold the Security Deposit
in trust nor be required to keep the Security Deposit separate from its general
funds, and Tenant shall not be entitled to any interest on the Security Deposit.
The Security Deposit shall not be construed as an advance payment of Rent nor
liquidated damages, and if Landlord’s claims hereunder exceed the Security
Deposit, Tenant shall remain liable for the balance of such claims.

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          20.3 Transfer of Security Deposit. If Landlord transfers its interest
in the Project or this Lease, Landlord may transfer the Security Deposit to its
transferee. If Landlord so transfers the Security Deposit, Landlord shall have
no further obligation to return the Security Deposit to Tenant, and Tenant’s
right to the return of the Security Deposit shall apply solely against
Landlord’s transferee.
     21. TENANTS PERSONAL PROPERTY AND FIXTURES. Intentionally Omitted.
     22. NOTICES. All notices, consents, approvals and similar communications to
be given by one party to the other under this Lease, shall be given in writing,
mailed or personally delivered as follows:
          22.1 Landlord. To Landlord as follows:
CarrAmerica Realty Operating Partnership, L.P.
1810 Gateway Drive, Suite 150
San Mateo, CA 94404
Attn: Market Officer
with a copy to:
CarrAmerica Realty Operating Partnership, L.P.
1850 K Street, N.W., Suite 500
Washington, D.C. 20006
Attn: Lease Administration
or to such other person at such other address as Landlord may designate by
notice to Tenant
          22.2 Tenant. To Tenant as follows:
StarVox Communications, Inc.
2728 Orchard Parkway
San Jose, CA 95134
Attn: Chief Financial Officer
or to such other person at such other address as Tenant may designate by notice
to Landlord.
     Mailed notices shall be sent by United States certified or registered mail,
or by a reputable national overnight courier service, postage prepaid. Mailed
notices shall be deemed to have been given on the earlier of actual delivery or
three (3) business days after posting in the United States mail in the case of
registered or certified mail, and one (1) business day in the case of overnight
courier. Tenant hereby appoints as its agent to receive the service of process
in any action, or any notice required by law to be given prior to the
commencement of any action, for recovery of

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possession of the Premises or any part thereof, and to receive service of all
notices hereunder (including dispossessory or distraint proceedings and notices
thereunder), the person in charge of or occupying the Premises at the time, and,
if no person shall be in charge of or occupying the same, then such service may
be made by attaching the same on the main entrance of the Premises.
     23. QUIET POSSESSION. So long as Tenant shall perform all of its
obligations under this Lease, Tenant shall enjoy peaceful and quiet possession
of the Premises against any party claiming through the Landlord, subject to all
of the terms of this Lease.
     24. REAL ESTATE BROKERS. Tenant represents to Landlord that Tenant has not
dealt with any real estate broker with respect to this Lease except for any
broker(s) listed in the Schedule, and no other broker is in any way entitled to
any broker’s fee or other payment in connection with this Lease. Tenant shall
indemnify and defend Landlord against any Claims by any other broker or third
party for any payment of any kind in connection with this Lease.
     25. MISCELLANEOUS.
          25.1 Successors and Assigns. Subject to the limits on Tenant’s
assignment contained in Section 17, the provisions of this Lease shall be
binding upon and inure to the benefit of all successors and assigns of Landlord
and Tenant.
          25.2 Date Payments Are Due. Except for payments to be made by Tenant
under this Lease which are due upon demand or are due in advance (such as Base
Rent), and except as otherwise expressly provided in this Lease, Tenant shall
pay to Landlord any amount for which Landlord renders a statement of account
within ten (10) business days after Tenant’s receipt of Landlord’s statement.
          25.3 Meaning of “Landlord”, “Re-Entry”, “including” and “Affiliate”.
The term “Landlord” means only the owner of the Project and the lessor’s
interest in this Lease from time to time. The words “re-entry” and “re-enter”
are not restricted to their technical legal meaning. The words “including” and
similar words shall mean “without limitation.” The word “affiliate” shall mean a
person or entity controlling, controlled by or under common control with the
applicable entity. “Control” shall mean the power directly or indirectly, by
contract or otherwise, to direct the management and policies of the applicable
entity.
          25.4 Time of the Essence. Time is of the essence of each provision of
this Lease.
          25.5 No Option. The submission of this Lease to Tenant for review or
execution does not create an option or constitute an offer to Tenant to lease
the Premises on the terms and conditions contained herein or a reservation of
the Premises in favor of Tenant, and this Lease shall not become effective
unless and until it has been executed and delivered by both Landlord and Tenant

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          25.6 Severability. If any provision of this Lease is determined to be
invalid, illegal or unenforceable, then such provision will be enforced to the
maximum extent possible and the other provisions will remain fully effective and
enforceable.
          25.7 Governing Law. This Lease shall be governed in all respects by
the laws of the state in which the Project is located, without regard to the
principles of conflicts of laws.
          25.8 Lease Modification. Tenant agrees to modify this Lease in any way
requested by a mortgagee which does not cause increased expense to Tenant or
otherwise materially adversely affect Tenant’s interests under this Lease.
          25.9 No Oral Modification. No modification of this Lease shall be
effective unless it is a written modification signed by both parties.
          25.10 Landlord’s Right to Cure. Landlord may cure any material default
by Tenant, after applicable notice and cure periods, if any (except in the case
of an emergency, in which case Landlord may cure a default by Tenant
immediately); any expenses incurred shall constitute Additional Rent due from
Tenant on demand by Landlord.
          25.11 Captions. The captions used in this Lease shall have no effect
on the construction of this Lease.
          25.12 Authority. Landlord and Tenant each represents to the other that
it has full power and authority to execute and perform this Lease.
          25.13 Landlord’s Enforcement of Remedies. Landlord may enforce any of
its remedies under this Lease either in its own name or through an agent.
          25.14 Entire Agreement. This Lease, together with all Exhibits,
constitutes the entire agreement between the parties. No representations or
agreements of any kind have been made by either party which are not contained in
this Lease.
          25.15 Landlord’s Title. Landlord’s title shall always be paramount to
the interest of Tenant, and nothing in this Lease shall empower Tenant to do
anything which might in any way impair Landlord’s title.
          25.16 Light and Air Rights. Landlord does not grant in this Lease any
rights to light and air in connection with Project. Landlord reserves to itself,
the Project, the Building below the improved floor of each floor of the
Premises, the Building above the ceiling of each floor of the Premises, the
exterior of the Premises and the areas on the same floor outside the Premises,
along with the areas within the Premises required for the installation and
repair of utility lines and other items required to serve other tenants of the
Building.

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          25.17 Singular and Plural: Joint and Several Liability. Wherever
appropriate in this Lease, a singular term shall be construed to mean the plural
where necessary, and a plural term the singular. For example, if at any time two
parties shall constitute Landlord or Tenant, then the relevant term shall refer
to both parties together. If more than one individual or entity comprises
Tenant, the obligations imposed on each individual or entity that comprises
Tenant under this Lease shall be joint and several.
          25.18 No Recording by Tenant. Tenant shall not record in any public
records any memorandum or any portion of this Lease.
          25.19 Exclusivity. Landlord does not grant to Tenant in this Lease any
exclusive right except the right to occupy the Premises.
          25.20 No Construction Against Drafting Party. The rule of construction
that ambiguities are resolved against the drafting party shall not apply to this
Lease.
          25.21 Survival. The waivers of claims or rights, the releases and the
obligations of Tenant under this Lease to indemnify, protect, defend and hold
harmless Landlord and other Landlord Parties shall survive the expiration or
earlier termination of this Lease, and so shall all other obligations or
agreements of Landlord or Tenant hereunder which by then- terms survive the
expiration or earlier termination of this Lease.
          25.22 Rent Not Based on Income. No Rent or other payment in respect of
the Premises shall be based in any way upon net income or profits from the
Premises. Tenant may not enter into or permit any sublease or license or other
agreement in connection with the Premises which provides for a rental or other
payment based on net income or profit.
          25.23 Building Manager and Service Providers. Landlord may perform any
of its obligations under this Lease through its employees or third parties hired
by the Landlord.
          25.24 Late Charge and Interest on Late Payments. Without limiting the
provisions of Section 12.1, if Tenant fails to pay any installment of Rent or
other charge to be paid by Tenant pursuant to this Lease within five
(5) business days after the same becomes due and payable, then Tenant shall pay
a late charge equal to the greater of five percent (5%) of the amount of such
payment or $250. In addition, interest shall be paid by Tenant to Landlord on
any late payments of Rent from the date due until paid at the rate provided in
Section 24(b). Such late charge and interest shall constitute Additional Rent
due and payable by Tenant to Landlord upon the date of payment of the delinquent
payment referenced above.
          25.25 Tenant’s Financial Statements. Within ten (10) days after
Landlord’s written request therefor, but not more than once in any twelve
(12) month period, Tenant shall deliver to Landlord, certified by an officer of
Tenant as being a true and correct copy in all material respects, the current
audited annual and quarterly financial statements of Tenant, and annual audited
financial

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statements of the two (2) years prior to the current year’s financial
statements, each with an opinion of a certified public accountant, including a
balance sheet and profit and loss statement for the most recent prior year, all
prepared in accordance with generally accepted accounting principles
consistently applied. Tenant hereby authorizes Landlord to obtain one or more
credit reports on Tenant at any time, and shall execute such further
authorizations as Landlord may reasonably require in order to obtain a credit
report.
          25.26 Attorneys’ Fees. In any arbitration, quasi-judicial or
administrative proceedings or any action in any court of competent jurisdiction,
brought by either party to enforce any covenant or any of such party’s rights or
remedies under this Lease, including any action for declaratory relief, or any
action to collect any payments required under this Lease or to quiet title
against the other party, the prevailing party shall be entitled to reasonable
attorneys’ fees and all costs, expenses and disbursements in connection with
such action, including the costs of reasonable investigation, preparation and
professional or expert consultation, which sums may be included in any judgment
or decree entered in such action in favor of the prevailing party. In addition,
Tenant shall pay the attorneys’ fees and other costs Landlord incurs in
enforcing this Lease where an action or proceeding is not brought.
          25.27 Other Improvements. If portions of the Project or property
adjacent to the Project (collectively, the “Other Improvements”) are owned by an
entity other than Landlord, Landlord, at its option, may enter into an agreement
with the owner or owners of any of the Other Improvements to provide (a) for
reciprocal rights of access, use and/or enjoyment of the Project and the Other
Improvements, (b) for the common management, operation, maintenance, improvement
and/or repair of all or any portion of the Project and all or any portion of the
Other Improvements, (c) for the allocation of a portion of Operating Costs and
Taxes to the Other Improvements and the allocation of a portion of the operating
expenses and taxes for the Other Improvements to the Project, (d) for the use or
improvement of the Other Improvements and/or the Project in connection with the
improvement, construction, and/or excavation of the Other Improvements and/or
the Project, and (e) for any other matter which Landlord deems appropriate or
necessary. Nothing contained herein shall be deemed or construed to limit or
otherwise affect Landlord’s right to sell all or any portion of the Project or
any other of Landlord’s rights described in this Lease.
          25.28 Security. Landlord shall be the sole determinant of the type and
amount of security services to be provided to the Project, if any, and Tenant
hereby acknowledges and agrees that Landlord shall have no obligation to
provide, and shall not in any manner be liable for, any security to the Project
In all events, Landlord shall not be liable to Tenant, and Tenant hereby waives
any claim against Landlord, for (a) any unauthorized or criminal entry of third
parties into the Premises, the Building or the Project, (b) any damage to
persons, or (c) any loss of property in and about the Premises, the Building or
the Project, by or from any unauthorized or criminal acts of third parties,
regardless of any action, inaction, failure, breakdown, malfunction and/or
insufficiency of the security services provided by Landlord.

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     26. UNRELATED BUSINESS INCOME. If Landlord is advised by its counsel at any
time that any part of the payments by Tenant to Landlord under this Lease may be
characterized as unrelated business income under the United States Internal
Revenue Code and its regulations, then Tenant shall enter into any amendment
proposed by Landlord to avoid such income, so long as the amendment does not
require Tenant to make more payments or accept fewer services from Landlord,
than this Lease provides.
     27. BUILDING RENOVATIONS. It is specifically understood and agreed that
Landlord has made no representation or warranty to Tenant and has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or
decorate the Premises, Building, or any part thereof and that no representations
respecting the condition of the Premises or the Building have been made by
Landlord to Tenant except as specifically set forth herein or in the Tenant
Improvement Agreement However, Tenant hereby acknowledges that Landlord may
during the Lease Term renovate, improve, alter, or modify (collectively, the
“Renovations”) the Project, the Building and/or the Premises including without
limitation the parking structure, common areas, systems and equipment, roof, and
structural portions of the same, which Renovations may include, without
limitation, (a) installing sprinklers in the Building common areas and tenant
spaces, (b) modifying the common areas and tenant spaces to comply with
Governmental Requirements, including regulations relating to the physically
disabled, seismic conditions, and building safety and security, and (c)
installing new floor covering, lighting, and wall coverings in the Building
common areas, and in connection with any Renovations, Landlord may, among other
tilings, erect scaffolding or other necessary structures in the Building, limit
or eliminate access to portions of the Project, including portions of the common
areas, or perform work in the Building, which work may create noise, dust or
leave debris in the Building. Tenant hereby agrees that such Renovations and
Landlord’s actions in connection with such Renovations shall in no way
constitute a constructive eviction of Tenant nor entitle Tenant to any abatement
of Rent. Landlord shall have no responsibility or for any reason be liable to
Tenant for any direct or indirect injury to or interference with Tenant’s
business arising from’ the Renovations, nor shall Tenant be entitled to any
compensation or damages from Landlord for loss of the use of the whole or any
part of the Premises or of Tenant’s personal property or improvements resulting
from the Renovations or Landlord’s actions in connection with such Renovations,
or for any inconvenience or annoyance occasioned by such Renovations or
Landlord’s actions.
     28. HAZARDOUS SUBSTANCES.
          28.1 Prohibition Against Hazardous Substances.
               (a) Except for de minimis quantities of general office supplies
customarily used by office tenants in the ordinary course of their business,
such as copier toner, liquid paper, glue, ink and cleaning solvents (which
supplies Tenant agrees to use in compliance with all applicable Governmental
Requirements), Tenant shall not cause or permit any Hazardous Substances to be
brought upon, produced, stored, used, discharged or disposed of in or near the
Project without

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Landlord’s prior written consent, which Landlord may give or withhold in its
sole discretion. Any handling, transportation, storage, treatment, disposal or
use of any Hazardous Substances in or about the Project by Tenant, its agents,
employees, contractors or invitees shall strictly comply with all applicable
Governmental Requirements. Tenant shall be solely responsible for obtaining and
complying with all permits necessary for the maintenance and operation of its
business, including, without limitation, all permits governing the use,
handling, storage, treatment, transport, discharge and disposal of Hazardous
Substances. Tenant shall indemnify, defend and hold Landlord and the Landlord
Parties harmless from and against any Claims (including, without limitation,
diminution in value of the Premises or the Project, damages for the loss or
restriction on use of leasable space or of any amenity of the Premises or the
Project, damages arising from any adverse impact on marketing of space in the
Project, Remedial Work, and sums paid in settlement of claims) which result from
or arise out of the use, storage, treatment, transportation, release, or
disposal of any Hazardous Substances on or about the Premises during the Term
and on or about the Project outside of the Premises by Tenant or any Tenant
Parties.
               (b) Landlord shall have the right, at any time, but not more than
two (2) times in any calendar year (unless Landlord has reasonable cause to
believe that Tenant has failed to fully comply with the provisions of this
Section 28, or unless required by any lender or governmental agency), to inspect
the Premises and conduct tests and investigations to determine whether Tenant is
in compliance with the provisions of this Section 28. The costs of all such
inspections, tests and investigations shall be borne solely by Tenant. The
foregoing rights granted to Landlord shall not, however, create (i) a duty on
Landlord’s part to inspect, test, investigate, monitor or otherwise observe the
Premises or the activities of Tenant or any Tenant Party with respect to
Hazardous Substances, including, but not limited to, Tenant’s operation, use or
remediation thereof, or (ii) liability on the part of Landlord or any Landlord
Party for Tenant’s use, storage, treatment, transportation, release, or disposal
of any Hazardous Substances, it being understood that Tenant shall be solely
responsible for all liability in connection therewith.
          28.2 Landlord Notification. Tenant shall promptly provide Landlord
with complete copies of all documents, correspondence and other written
materials directed to or from, or relating to, Tenant concerning environmental
issues at the Premises or the Project, including, without limitation, documents
relating to the release, potential release, investigation, compliance, cleanup
and abatement of Hazardous Substances, and any claims, causes of action or other
legal documents related to same. Within twenty-four (24) hours of any
unauthorized release, spill or discharge of Hazardous Substances, in, on, or
about the Premises or Project, Tenant shall provide written notice to Landlord
fully describing the event. Tenant shall also provide Landlord with a copy of
any document or correspondence submitted by or on behalf of Tenant to any
regulatory agency as a result of or in connection with the unauthorized release,
spill or discharge. Within twenty-four (24) hours of receipt by Tenant of any
warning, notice of violation, permit suspension or similar disciplinary measure
relating to Tenant’s actual or alleged failure to comply with any environmental
law, rule, regulation, ordinance or permit, Tenant shall provide written notice
to Landlord.

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          28.3 Remedial Work. If any investigation or monitoring of site
conditions or any clean-up, containment, restoration, removal or remediation of
Hazardous Substances (collectively, “Remedial Work”) is required under any
Governmental Requirements as a result of any handling, transportation, storage,
production, use, discharge, disposal or release of Hazardous Substances by
Tenant, its agents, employees, contractors or invitees, then Tenant shall
perform or cause to be performed the Remedial Work in compliance with
Governmental Requirements or, at Landlord’s option, Landlord may cause such
Remedial Work to be performed and Tenant shall reimburse Landlord for the
reasonable costs thereof within thirty (30) days after demand therefor. All
Remedial Work performed by Tenant shall be performed by one or more contractors,
selected by Tenant and approved in advance in writing by Landlord, and under the
supervision of a consulting engineer selected by Tenant and approved in advance
in writing by Landlord. All costs and expenses of such Remedial Work shall be
paid by Tenant, including, without limitation, the charges of such contractors),
the consulting engineer and Landlord’s reasonable attorneys’ and experts’ fees
and costs incurred in connection with monitoring or review of such Remedial
Work.
          28.4 Environmental Questionnaire. Prior to execution of this Lease,
Tenant shall complete, execute and deliver to Landlord an Environmental
Questionnaire and Disclosure Statement. The completed Environmental
Questionnaire shall be deemed incorporated into this Lease for all purposes, and
Landlord shall be entitled to rely fully on the information contained therein.
Tenant shall immediately update and resubmit to Landlord the Environmental
Questionnaire if changes occur in the nature, content, handling, storage, use,
treatment, transport, discharge, or disposal of the Hazardous Substances
described therein. Attached hereto as Exhibit E is a form of Environmental
Questionnaire to be executed in accordance with the foregoing provision.
          28.5 Survival. Tenant’s obligations under this Section 28 shall
survive the expiration or earlier termination of this Lease until all Claims
within the scope of this Section 28 are fully, finally, and absolutely barred by
the applicable statutes of limitations. If it is determined by Landlord that the
condition of all or any portion of the Premises, the Building or the Project is
not in compliance with the provisions of this Section 28, including, but not
limited to all applicable Governmental Requirements relating to Hazardous
Substances, at the expiration or earlier termination of this Lease, then
Landlord, in its sole discretion, may require Tenant to hold over possession of
the Premises until Tenant can surrender the Premises to Landlord in the
condition required under Section 14 above and in full compliance with the
provisions of this Section 28. The burden of proof under this Section 28.5 shall
be upon Tenant For purposes of Section 14, the term “normal wear and tear” shall
not include any deterioration h the condition or diminution of the value of any
portion of the Premises, the Building or the Project in any manner whatsoever
related directly or indirectly to Hazardous Substances. Any such holdover by
Tenant shall be with Landlord’s consent, will not be terminable by Tenant in any
event or circumstance and will otherwise be subject to Section 15 above.
          28.6 Definition of “Hazardous Substances”. “Hazardous Substances”
means any hazardous or toxic substances, materials or waste which are or become
regulated by any local

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government authority, the state in which the Project is located or the United
States government, including those substances described in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq., any other applicable federal, state or
local law, and the regulations adopted under these laws.
     29. EXCULPATION. Landlord shall have no personal liability under this
Lease; its liability shall be limited solely and exclusively to an amount which
is equal to the interest of Landlord in the Project, including the rents and
other income from the Project In no event shall Landlord’s liability extend to
any other property or assets of Landlord, nor shall any officer, director,
employee, agent, shareholder, partner, member or beneficiary of Landlord be
personally liable for any of Landlord’s obligations hereunder. Further, in no
event shall Landlord be liable under any circumstances for any consequential
damages or for injury or damage to, or interference with, Tenant’s business,
including but not limited to, loss of profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill, or loss of use, however
occurring.
     30. COMMUNICATIONS AND COMPUTER LINES. Tenant may install, maintain,
replace, remove or use any communications or computer wires and cables
(collectively, the “Lines”) at the Project in or serving the Premises, provided
that (a) Tenant shall obtain Landlord’s prior written consent, use an
experienced and qualified contractor approved in writing by Landlord, and comply
with all of the other provisions of this Lease, (b) an acceptable number of
spare Lines and space for additional Lines shall be maintained for existing and
future occupants of the Project, as determined in Landlord’s reasonable opinion,
(c) the Lines therefor (including riser cables) shall be appropriately insulated
to prevent excessive electromagnetic fields or radiation, and shall be
surrounded by a protective conduit reasonably acceptable to Landlord, (d) any
new or existing Lines servicing the Premises shall comply with all Governmental
Requirements, (e) as a condition to permitting the installation of new Lines,
Landlord may require that Tenant remove existing Lines located in or serving the
Premises and repair any damage in connection with such removal, and (f) Tenant
shall pay all costs in connection with the foregoing. Landlord reserves the
right to require that Tenant remove any Lines located in or serving the Premises
which are installed in violation of these provisions, or which are at any time
in violation of any Governmental Requirements or represent a dangerous or
potentially dangerous condition. In addition, Landlord reserves the right to
require that Tenant remove any or all Lines installed by or for Tenant within or
serving the Premises upon expiration or sooner termination of this Lease,
provided Landlord notifies Tenant prior to or within thirty (30) days following
such expiration or sooner termination. Any Lines not required to be removed
pursuant to this Section shall, at Landlord’s option, become the properly of
Landlord (without payment by Landlord). If Tenant fails to remove such Lines as
required by Landlord, or violates any other provision of this Section, Landlord
may, after ten (10) days’ written notice to Tenant, remove such Lines or remedy
such other violation, at Tenant’s expense (without limiting Landlord’s other
remedies available under this Lease or Governmental Requirements).

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     31. OPTION TO EXTEND.
          31.1 Renewal Option. Subject to the terms and conditions set forth
below, and provided that Landlord has not exercised its right to terminate this
Lease as provided in Section 32 below, Tenant may at its option (“Renewal
Option”) extend the Term of this Lease for one (1) additional three (3) year
period (the “Renewal Term”). If Tenant exercises the Renewal Option hereunder,
all of the terms, covenants and conditions of this Lease shall continue in .full
force and effect during the Renewal Term, including provisions regarding payment
of Additional Rent, which shall remain payable on the terms herein set forth,
except that (a) the Base Rent payable by Tenant during the Renewal Term shall be
as determined in accordance with Sections 31.3 and 31.4 below, (b) Tenant shall
continue to possess and occupy the Premises in their existing condition, “as is”
as of the commencement of the Renewal Term, and Landlord shall have no
obligation to repair, remodel, improve or alter the Premises, to perform any
other construction or other work of improvement upon the Premises, or to provide
Tenant with any construction or refurbishing allowance whatsoever, and
(c) Tenant shall have no further rights to extend the Term of this Lease after
the expiration of the Renewal Term.
          31.2 Conditions of Exercise. To exercise the Renewal Option, Tenant
must deliver an unconditional binding notice to Landlord via certified mail or
hand delivery not sooner than two hundred seventy (270) days nor later than one
hundred eighty (180) days prior to the expiration of the initial Term of this
Lease. If Tenant fails to timely give its notice of exercise, Tenant will be
deemed to have waived its Renewal Option.
          31.3 Market Rate Calculation. The Base Rent payable by Tenant for the
Premises during the Renewal Term shall be the Market Rate (as defined below) for
the Premises, valued as of the commencement of the Renewal Term, determined in
the manner hereinafter provided; provided, however, that in no event shall the
annual Base Rent payable by Tenant for any year of the Renewal Term be less than
the annual Base Rent payable during the last year of the initial Term (without
regard to any abatements of -Rent on account of casualty or otherwise) (“Base
Rent Floor”). As used herein, the term “Market Rate” shall mean the annual
amount of Base Rent that a willing tenant would pay, and that a willing landlord
would accept, at arm’s length, for space comparable to the Premises within the
Project or other comparable first class office/R&D projects in the vicinity of
the Project (the “Comparison Projects”), based upon binding lease transactions
for tenants in the Comparison Projects that, where possible, commence or are to
commence within six (6) months prior to or within six (6) months after the
commencement of the Renewal Term (“Comparison Leases”). Comparison Leases shall
include renewal and new non-renewal tenancies, but shall exclude subleases and
leases of space subject to another tenant’s expansion rights. Rental rates
payable under Comparison Leases shall be adjusted to account for variations
between this Lease and the Comparison Leases with respect to: (a) the length of
the Renewal Term compared to the lease term of the Comparison Leases; (b) rental
structure, including, without limitation, rental rates per rentable square foot
(including type, gross or net, and if gross, adjusting for base year or expense
stop), additional rental, escalation provisions, all other payments and
escalations; (c) the size of the Premises compared to the size of the premises
of the Comparison Leases; (d) location, floor levels and efficiencies of the
floor(s) for which the determination is being made; (e) free rent, moving

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expenses and other cash payments, allowances or other monetary concessions
affecting the rental rate; (f) the age and quality of construction of the
Building (including compliance with applicable codes on the applicable floors);
and (g) leasehold improvements and/or allowances, including the amounts thereof
in renewal leases, and taking into account, in the case of renewal leases
(including this Lease), the value of existing leasehold improvements to the
renewal tenant
          31.4 Base Rent Determination. The Base Rent payable by Tenant for the
Premises during the Renewal Term shall be determined as follows:
               (a) If Tenant provides Landlord with its unconditional binding
notice of exercise pursuant to Section 31.2 above, then, prior to the
commencement of the Renewal Term, Landlord shall deliver to Tenant either (i) a
good faith written proposal of the Market Rate, or (ii) notice that Landlord has
determined in good faith that the Market Rate is less than the Base Rent Floor
and, therefore, that the Base Rent for the Renewal Term shall be equal to the
Base Rent Floor. Within twenty-one (21) days after receipt of Landlord’s
proposal, Tenant shall notify Landlord in writing (1) that Tenant accepts
Landlord’s proposal or (2) that Tenant elects to submit the determination of
Market Rate to arbitration in accordance with Subsections 31.4(c) through
31.4(d) below. If Tenant does not give Landlord a timely notice in response to
Landlord’s proposal, Landlord’s proposal of Market Rate shall be binding upon
Tenant.
               (b) If Tenant timely elects to submit the determination of Market
Rate to arbitration, Landlord and Tenant shall first negotiate in good faith in
an attempt to determine the Market Rate. If Landlord and Tenant are able to
agree within thirty (30) days following the delivery of Tenant’s notice to
Landlord electing arbitration (or if Tenant accepts Landlord’s initial
proposal), then such agreement shall constitute a determination of Market Rate
for purposes of this Section, and the parties shall immediately execute an
amendment to this Lease stating the Base Rent for the Renewal Term. If Landlord
and Tenant are unable to agree on the Market Rate within such negotiating
period, then within fifteen (15) days after the expiration of such negotiating
period, the parties shall meet and concurrently deliver to each other in
envelopes their respective good faith estimates of the Market Rate (set forth on
a net effective rentable square foot per annum basis). If the higher of such
estimates is not more than one hundred five percent (105%) of the lower, then
the Market Rate shall be the average of the two. Otherwise, the dispute shall be
resolved by arbitration in accordance with Subsections 31.4(c) and 31.4(d)
below.
               (c) Within seven (7) days after the exchange of estimates, the
parties shall select as an arbitrator an independent real estate broker with at
least five (5) years of experience in leasing commercial office space in the
metropolitan area in which the Project is located (a “Qualified Appraiser”). If
the parties cannot agree on a Qualified Appraiser, then within a second period
of seven (7) days, each shall select a Qualified Appraiser and within ten
(10) days thereafter the two appointed Qualified Appraisers shall select an
independent Qualified Appraiser and the independent Qualified Appraiser shall be
the sole arbitrator. If one party shall fail to select a Qualified Appraiser

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within the second seven (7) day period, then the Qualified Appraiser chosen by
the other party shall be the sole arbitrator.
               (d) Within twenty-one (21) days after submission of the matter to
the arbitrator, the arbitrator shall determine the Market Rate by choosing
whichever of the estimates submitted by Landlord and Tenant the arbitrator
judges to be more accurate. The arbitrator shall notify Landlord and Tenant of
its decision, which shall be final and binding. If the arbitrator believes that
expert advice would materially assist him, the arbitrator may retain one or more
qualified persons to provide expert advice. The fees of the arbitrator and the
expenses of the arbitration proceeding, including the fees of any expert
witnesses retained by the arbitrator, shall be paid by the parry whose estimate
is not selected. Each party shall pay the fees of its respective counsel and the
fees of any witness called by that party.
               (e) Until the matter is resolved by agreement between the parties
or a decision is rendered in any arbitration commenced pursuant to this
Section 31, Tenant’s monthly payments of Base Rent shall be in an amount equal
to the greater of (i) the Base Rent Floor or (ii) Landlord’s determination of
the Market Rate. Within ten (10) business days following the resolution of such
dispute by the parties or the decision of the arbitrator, as applicable, Tenant
shall pay to Landlord, or Landlord shall pay to Tenant, the amount of any
deficiency or excess, as the case may be, in the Base Rent theretofore paid.
          31.5 General Requirements. Tenant’s right to exercise the Renewal
Option is personal to, and may be exercised only by, the original named Tenant
(or Permitted Transferee) under this Lease, and only if the original named
Tenant (or Permitted Transferee) continues to occupy the entire Premises at the
time of such exercise. If Tenant shall assign this Lease (other than to a
Permitted Transferee) or sublet all or any portion of the Premises (other than
to a Permitted Transferee) under a sublease which is effective at any time
during the final twelve (12) months of the initial Term, then immediately upon
such assignment or subletting, Tenant’s right to exercise the Renewal Option
shall simultaneously terminate and be of no further force or effect. Except for
a Permitted Transferee, no assignee or subtenant shall have any right to
exercise the Renewal Option granted herein. In addition, if an Event of Default
is continuing under this Lease at the time it exercises the Renewal Option or at
any time thereafter until the commencement of the Renewal Term or if an Event of
Default has occurred at any time prior to its exercise of the Renewal Option,
Landlord shall have, in addition to all of its other rights and remedies under
this Lease, the right (but not the obligation) to terminate the Renewal Option
and to unilaterally revoke Tenant’s exercise of the Renewal Option, in which
case this Lease shall expire on the Termination Date, unless earlier terminated
pursuant to the terms hereof, and Tenant shall have no further rights under this
Lease to renew or extend the Term.
          32. LANDLORD’S OPTION TO TERMINATE. Landlord may, upon at least nine
(9) months’ prior written notice to Tenant (the “Termination Notice”), terminate
this Lease effective at any time after the thirtieth (30th) full calendar month
of the Lease Term, in which event Tenant

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shall, in accordance with Section 14 above, vacate and surrender possession of
the Premises to Landlord on or before the termination date specified in the
Termination Notice, and all obligations of Landlord and Tenant under this Lease
shall expire as of such termination date, except as to any obligations that
expressly survive such termination. If at the time Landlord delivers the
Termination Notice to Tenant, Landlord has other space that is comparable to the
Premises then available for lease to third parties in the Project or another
similar project in the vicinity of the Project owned by Landlord or an affiliate
of Landlord, Landlord shall so notify Tenant. If Tenant is interested in leasing
the other space identified by Landlord, Tenant shall give written notice (the
“Interest Notice”) to Landlord within ten (10) days after receipt of Landlord’s
notice identifying the other space. If Tenant delivers an Interest Notice to
Landlord within said ten (10) day period, and if the parties agree upon the
terms and conditions of the lease of the other space within twenty (20) days
after Landlord’s receipt of the Interest Notice, then Tenant’s obligation to pay
Base Rent, Operating Cost Share Rent, and Tax Share Rent shall be waived for the
last one (1) full calendar month of the Term. If Tenant fails to deliver an
Interest Notice to Landlord within said ten (10) day period, or if the parties
fail to agree upon the terms and conditions of the lease of the other space
within twenty (20) days after Landlord’s receipt of the Interest Notice,
(a) Landlord shall have the unfettered right to lease the other space to any
party on such terms and conditions as Landlord may determine in its sole and
absolute discretion, and (b) Tenant’s obligation to pay Base Rent, Operating
Cost Share Rent, and Tax Share Rent shall be waived for the last two (2) full
calendar months of the Term, Nothing contained in this paragraph shall be deemed
to impose any obligation upon Landlord to ensure that other comparable space
will be available for lease by Tenant, or any obligation upon the parties to
negotiate in good faith respecting the terms and conditions of lease of the
other space.
[The remainder of this page has been intentionally left blank.]

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     IN WITNESS WHEREOF, the parties hereto have executed this Lease.

          LANDLORD:    
 
        CARRAMERICA REALTY OPERATING PARTNERSHIP, L.P.,     a Delaware limited
partnership    
 
       
By:
  CarrAmerica Realty Corporation,    
 
  a Maryland corporation, its general partner    
 
       
By:
  /s/ Christopher Peatross    
 
       
 
  Christopher Peatross    
 
  Managing Director    

          Date of Execution: 6/30/05    
 
        TENANT:    
 
        STARVOX COMMUNICATIONS, INC.,     a California corporation    
 
       
By:
  /s/ John C. Dong    
 
       
 
       
Name:
  John C. Dong    
 
       
 
       
Title:
  VP & CFO    
 
       
 
  [chairman, president or vice-president]    
 
       
By:
       
 
       
 
       
Name:
       
 
       
 
       
Title:
       
 
       
 
  [secretary, assistant secretary,
chief financial officer or assistant treasurer]    
 
        Date of Execution: 6/16/05    

 

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EXHIBIT A
DESCRIPTION OF PREMISES
[See Attached]
     Exhibit A is intended only to show the general layout of the Premises as of
the beginning of the Term of the Lease. It does not in any way supersede any of
Landlord’s rights set forth in Article 27 with respect to arrangements and/or
locations of public parts of the Building and changes in such arrangements
and/or locations. It is not to be scaled; any measurements or distances shown
should be taken as approximate.

Exhibit A

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EXHIBIT B
RULES AND REGULATIONS
     1. Tenant shall not place anything, or allow anything to be placed near the
glass of any window, door, partition or wall which may, in Landlord’s judgment,
appear unsightly from outside of the Project.
     2. The sidewalks, exits and entrances located in the common areas of the
Project shall not be obstructed by Tenant or used by Tenant for any purposes
other than for ingress to and egress from the Premises. Tenant shall lend its
full cooperation to keep such areas free from all obstruction and in a clean and
sightly condition and shall move all supplies, furniture and equipment as soon
as received directly to the Premises and move all such items and waste being
taken from the Premises (other than waste customarily removed by employees of
the Building) directly to the shipping platform at or about the time arranged
for removal therefrom.
     3. Tenant shall not bring upon, use or keep in the Premises or the Project
any kerosene, gasoline or inflammable or combustible fluid or material, or any
other articles deemed hazardous to persons or property.
     4. Landlord shall have sole power to direct electricians as to where and
how telephone and other wires are to be introduced. No boring or cutting for
wires is to be allowed without Landlord’s prior written consent. The location of
telephones, call boxes and other office equipment affixed to the Premises shall
be subject to Landlord’s prior approval.
     5. No additional locks shall be placed upon any doors, windows or transoms
in or to the Premises. Tenant shall not change existing locks or the mechanism
thereof. Upon termination of the Lease, Tenant shall deliver to Landlord all
keys and passes for offices, rooms, parking lot and toilet rooms which shall
have been furnished Tenant. If the keys so furnished are lost, Tenant shall pay
Landlord therefor. Tenant shall not make, or cause to be made, any such keys and
shall order all such keys solely from Landlord and shall pay Landlord for any
keys in addition to the two sets of keys originally furnished by Landlord for
each lock.
     6. Tenant shall not install linoleum, tile, carpet or other floor covering
so that the same shall be affixed to the floor of the Premises in any manner
except as approved by Landlord.
     7. No furniture, packages, supplies, equipment or merchandise will be
received in the Project, except between such hours as shall be designated by
Landlord.
     8. Without Landlord’s prior written consent, Tenant shall not use the name
of the Project or any picture of the Project in connection with, or in promoting
or advertising the business of, Tenant, except Tenant may use the address of the
Project as the address of its business.

Exhibit B, Page 1

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     9. Tenant assumes full responsibility for protecting the Premises from
theft, robbery and pilferage, which may arise from a cause other than Landlord’s
negligence, which includes keeping doors locked and other means of entry to the
Premises closed and secured.
     10. Peddlers, solicitors and beggars shall be reported to the office of the
Project or as Landlord otherwise requests.
     11. Tenant shall not advertise the business, profession or activities of
Tenant conducted in the Project in any manner which violates the letter or
spirit of any code of ethics adopted by any recognized association or
organization pertaining to such business, profession or activities.
     12. Tenant shall not make or permit any noise, vibration or odor to emanate
from the Premises, or do anything therein tending to create, or maintain, a
nuisance.
     13. Tenant acknowledges that Building security problems may occur which may
require the employment of extreme security measures in the day-to-day operation
of the Project.
     Accordingly:
          (a) Landlord may, at any time, or from time to time, or for regularly
scheduled time periods, as deemed advisable by Landlord and/or its agents, in
their sole discretion, require that persons entering or leaving the Building or
the Project identify themselves to watchmen or other employees designated by
Landlord, by registration, identification or otherwise.
          (b) Tenant agrees that it and its employees will cooperate fully with
Project employees in the implementation of any and all security procedures.
          (c) Such security measures shall be the sole responsibility of
Landlord, and Tenant shall have no liability for any action taken by Landlord in
connection therewith, it being understood that Landlord is not required to
provide any security procedures and shall have no liability for such security
procedures or the lack thereof.
     14. Tenant shall not disturb the quiet enjoyment of any other tenant.
     15. Landlord may retain a pass key to the Premises and be allowed
admittance thereto at all times to enable its representatives to examine the
Premises from time to time and to exhibit the same and Landlord may place and
keep on the windows and doors of the Premises at any time signs advertising the
Premises for Rent.
     16. No equipment, mechanical ventilators, awnings, special shades or other
forms of window covering shall be permitted either inside or outside the windows
of the Premises without Landlord’s prior written consent, and then only at the
expense and risk of Tenant, and they shall be of such shape, color, material,
quality, design and make as may be approved by Landlord.

Exhibit B, Page 2

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     17. Tenant shall not during the term of this Lease canvas or solicit other
tenants of the Building for any purpose.
     18. Tenant shall not install or operate any phonograph, musical or
sound-producing instrument or device, radio receiver or transmitter, TV receiver
or transmitter, or similar device in the Building, nor install or operate any
antenna, aerial, wires or other equipment inside or outside the Building, nor
operate any electrical device from which may emanate electrical waves which may
interfere with or impair radio or television broadcasting or reception from or
in the Building or elsewhere, without in each instance Landlord’s prior written
approval. The use thereof, if permitted, shall be subject to control by Landlord
to the end that others shall not be disturbed.
     19. Tenant shall promptly remove all rubbish and waste from the Premises.
     20. Tenant shall not exhibit, sell or offer for sale, rent or exchange in
the Premises or at the Project any article, thing or service, except those
ordinarily embraced within the use of the Premises specified in Section 6 of
this Lease, without Landlord’s prior written consent.
     21. Tenant shall not overload any floors in the Premises or any public
corridors or elevators in the Building.
     22. Tenant shall not do any painting in the Premises, or mark, paint, cut
or drill into, drive nails or screws into, or in any way deface any part of the
Premises or the Building, outside or inside, without Landlord’s prior written
consent.
     23. Whenever Landlord’s consent, approval or satisfaction is required under
these Rules, then unless otherwise stated, any such consent, approval or
satisfaction must be obtained in advance, such consent or approval may be
granted or withheld in Landlord’s sole discretion, and Landlord’s satisfaction
shall be determined in its sole judgment.
     24. Tenant and its employees shall cooperate in all fire drills conducted
by Landlord in the Building.

Exhibit B, Page 3

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EXHIBIT C
TENANT IMPROVEMENT AGREEMENT
     This Tenant Improvement Agreement (“Agreement”) is an integral part of the
Lease dated June 15, 2005 (“Lease”) relating to certain Premises described
therein. Capitalized terms used in this Agreement not otherwise defined herein
shall have the meaning given such terms in the Lease. Landlord and Tenant agree
as follows with respect to the Tenant Improvements, if any, to be installed in
the Premises:
     1. INITIAL TENANT IMPROVEMENTS.
          (a) Landlord shall cause to be performed the initial alterations,
additions and improvements to the Premises identified on the Space Plan attached
to the Lease as Exhibit C-l (the “Approved Space Plan”), including the
installation of the offices in the Premises and other improvements as listed on
the Approved Space Plan (collectively, “Tenant Improvements”), all subject to
and in accordance with Landlord’s standard specifications for the Project
(“Project Standard Specifications”) including, but not limited to, the standard
Building materials which are then being used by Landlord for the Project or by
landlords of comparable office/R&D projects. Landlord will provide Tenant with a
copy of the Project Standard Specifications upon Tenant’s request The work of
constructing the Tenant Improvements is referred to as “Landlord’s Work”.
          (b) Following execution of the Lease, Landlord shall cause to be
prepared, at its sole cost and expense, and delivered to Tenant final working
drawings for Landlord’s Work (the “Final Plans”). The Tenant Improvements shown
on the Final Plans shall be substantially consistent with those initially
identified on the Approved Space Plan, and Landlord shall cause Landlord’s Work
to be performed substantially as shown on the Final Plans, excepting only minor
variations (i.e., variations which are not inconsistent with the intent of the
Final Plans) as Landlord may deem advisable, and any Change Order Requests (as
defined below) approved by Landlord.
     2. CHANGE ORDERS. If, prior to the Substantial Completion Date (as defined
below), Tenant shall request improvements or changes to the Premises in addition
to, revision of or substitution for the Tenant Improvements identified on the
Approved Space Plan, including, without limitation, any request for finishes
above the standard for the Building or other detailed specifications
(individually or collectively, “Change Order Requests”), Tenant shall deliver to
Landlord for its approval plans and specifications for such Change Order
Requests. If Landlord does not approve of the plans for such Change Order
Requests, Landlord shall advise Tenant of the revisions required. Tenant shall
revise and redeliver the plans and specifications to Landlord within three
(3) days after Landlord’s advice or Tenant shall be deemed to have abandoned its
request for such Change Order Requests. Tenant shall pay for all preparations
and revisions of plans and specifications, and the increase in the cost of
construction resulting from all Change Order Requests.

Exhibit C, Page 1

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     3. TENANT IMPROVEMENT COSTS. Landlord shall bear the cost of construction
of the Tenant Improvements, except for the following, which shall be Tenant’s
responsibility: (a) the increase in the cost of construction resulting from
Change Order Requests, and (b) any costs and expenses incurred by Landlord in
connection with, or as a consequence of, any Tenant Delay (as defined in
Section 4 below). If Landlord and Tenant agree on any Change Order Requests as
provided in Section 2 above, Landlord shall furnish Tenant with an invoice
specifying the estimated increase in the cost of the Tenant Improvements
resulting therefrom, and Tenant shall pay such estimated increase to Landlord
within three (3) days thereafter. Tenant acknowledges and agrees that any such
invoice shall be based solely on an estimate of the increase in the cost of the
Tenant Improvements, and shall not be binding on Landlord or Landlord’s
contractor, nor shall Tenant’s payment on account of such estimate limit
Tenant’s obligation hereunder to pay the amount specified in clauses (a) and
(b) above. Landlord shall have no obligation to commence or to continue
Landlord’s Work unless Tenant pays the estimated increase within said three
(3) day period. If Tenant does not pay the estimated amount within the three
(3) day period, Tenant shall be deemed to have abandoned its request for such
Change Order.
     4. SUBSTANTIAL COMPLETION. The “Substantial Completion Date” shall be the
date that Landlord, and its architect, engineer or construction manager
determines that Landlord’s Work has been completed, except for (i) finishing
details, minor omissions, mechanical adjustments, and similar items of the type
customarily found on an architectural punch-list (the “Punch-List Items”), the
correction or completion of which will not substantially interfere with Tenant’s
occupancy and use of the Premises and (ii) trade fixtures, workstations,
telecommunications or computer cabling or built-in furniture or equipment to be
installed by Tenant; provided, however, that (1) if Landlord is delayed in
completing Landlord’s Work or in delivering possession of the Premises to Tenant
as a result of any Tenant Delay (as defined below), the Substantial Completion
Date shall be deemed to have occurred on the date the Substantial Completion
Date would have occurred in the absence of such Tenant Delay, as reasonably
determined by Landlord or Landlord’s architect; and (2) if Tenant takes
possession and commences business operations in the Premises prior to the
Substantial Completion Date, the Substantial Completion Date shall be deemed to
have occurred on the date Tenant commences business operations in the Premises.
As used in the Lease and in this Agreement, the term “Tenant Delay” means a
delay in the completion of Landlord’s Work to the extent caused by the act,
omission, neglect or failure of Tenant or any of Tenant’s agents, employees,
contractors or subcontractors, including, without limitation, to the extent
caused by Change Order Requests.
     5. OWNERSHIP OF TENANT IMPROVEMENTS. The Tenant Improvements shall be
deemed, effective upon installation, to be a part of the Premises and the
Building and shall be deemed to be the property of Landlord (subject to Tenant’s
right to use the same during the Term). The Tenant Improvements shall be
surrendered at the expiration or earlier termination of the Term, and Tenant
shall have no obligation to remove the Tenant Improvements.

Exhibit C, Page 2

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EXHIBIT C-l
APPROVED SPACE PLAN
[See Attached]

Exhibit C-1, Page 1

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(MAP) [f28512f2851202.gif]

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EXHIBIT D
COMMENCEMENT DATE CONFIRMATION
     THIS CONFIRMATION AGREEMENT is entered into as of                         
                   , 20                      by and between CARRAMERICA REALTY
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“Landlord”), and
STARVOX COMMUNICATIONS, INC., a California corporation (‘Tenant”), with respect
to that certain Lease dated as of June 15, 2005 (the “Lease”) respecting certain
premises (the “Premises”) located in the building known as
                                                            ,                 
                        , California.
     Pursuant to Section 1.1 of the Lease, Landlord and Tenant hereby confirm
and agree that the Commencement Date (as defined in the Lease) is         
                                  ,                      , 20       
              and that the Termination Date (as defined in the Lease)
is                     ,                     , 20                    .
     This Confirmation Agreement supplements, and shall be a part of, the Lease.
     IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Confirmation Agreement as of the day and year first above written.

                  LANDLORD:    
 
                CARRAMERICA REALTY OPERATING PARTNERSHIP, L.P.,     a Delaware
limited partnership    
 
                By:   CarrAmerica Realty Corporation,         a Maryland
corporation, its general partner    
 
               
 
  By:                               Christopher Peatross         Managing
Director    
 
                Date of Execution:        
 
               

              TENANT:    
 
            STARVOX COMMUNICATIONS, INC.,
a California corporation    
 
           
By:
                     
 
           
Name:
                     
 
           
Title:
                     
 
            Date of Execution:        
 
           

Exhibit D, Page 1

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EXHIBIT E
ENVIRONMENTAL QUESTIONNAIRE
     As a new tenant of the Project, answer based upon: (1) any existing or
previous operations of the same kind which Tenant has conducted elsewhere, and
(2) Tenant’s plans for the new space. For each answer, specify which
operation(s) you are describing.
     1. Solid Waste.
          a. Does the facility have an EPA Hazardous Waste generator number?
     no
          b. Does the facility produce Hazardous Waste? Other chemical waste?
     no
          c. Describe each type of waste generated (whether or not hazardous).
     none
          d. If the facility produces hazardous waste, is it classified as a
large quantity generator, small quantity generator or conditionally exempt small
quantity generator?
     N/A
          e. Are hazardous waste manifests maintained for three years on site?
     N/A
          f. Please identify the waste disposal contractor.
     N/A
     2. Wastewater.
          a. Does the facility produce any “process wastewater,” meaning any
wastewater that has come in contact with chemicals or other materials in process
(essentially, any discharge of water other than from sinks and toilets)?
     no
          b. If so, please describe each type of process wastewater produced.
     N/A

Exhibit E, Page 1

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          c. Is any water discharged down the floor drains?
     N/A
          d. Does the facility have a permit for its wastewater discharges?
     N/A
     3. Air Emissions.
          a. Does the facility emit any chemicals or wastes into the air?
     no
          b. Does the facility have an air permit?
     N/A
          c. Does the facility treat any of its air emissions to remove air
pollutants?
     N/A
          d. Describe the ventilation system for the facility.
     N/A
     4. General.
          a. Has the facility ever been charged with any violation of, or found
in violation of any environmental requirements? If yes, please describe.
     no
          b. Are you aware of any testing of soil or groundwater to determine
whether any contamination exists in or around the facility? If so, please
provide results.
     no
          c. Please describe any hazardous materials present on site, their
respective quantities and the containment measures for those materials.
     no

Exhibit E, Page 2

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CarrAmerica Realty Corporation
 
5201 Great America Parkway, Suite 419
Santa Clara, California 95054
Phone: 408.544.9660
Fax: 408.544.9669
www.carramerica.com
(CARRAMERICA LOGO) [f28512f2851203.gif]
February 23, 2006
Al Stojanovich
Starvox
2728 Orchard Parkway
San Jose, CA 95134
Dear Al,
Effective April 1,2006, CarrAmerica will be instituting a new preventative
maintenance program for the HVAC equipment serving your premises.
Currently, it is the Tenant’s responsibility to contract with an HVAC vendor for
the preventative maintenance of the system. In addition, the Tenant is
responsible for sending quarterly preventative maintenance and confirmation of
repair records to the Property Manager. These preventative maintenance records
are important for both Tenant and Landlord, and currently we are not receiving
these records in a consistent and timely manner.
In order to ensure the timely and accurate maintenance of the HVAC systems
serving your premises, CarrAmerica has decided to perform the quarterly
maintenance of the HVAC system. This new contract will be between CarrAmerica
and the vendor and maintaining this contract will no longer be a tenant
responsibility. Please note however, if there are any specialty systems serving
your computer rooms and/or labs, the responsibility of the regular maintenance
for those systems will remain a Tenant responsibility.
Additionally, please note that CarrAmerica will be responsible for the quarterly
HVAC maintenance portion only. If any repairs are recommended as a result of the
maintenance, these proposals will be forwarded to the tenant and it will be the
tenant’s responsibility to complete the necessary repairs. The Tenant will
continue to have responsibility for the system repairs and day-to-day issues,
such as balancing or hot and cold calls from your employees.

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

 

If you have any questions, please contact me at (408) 544-9660.
Respectfully,
/s/ Tom Smith
Tom Smith
Senior Property Manager

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Received 11/10/05
from CarrAmerica
Next G Networks
Valley Center
Account Summary – Starvox Communications
T# 1034356

                                                                         MONTH/
                                                  MO   TOTAL YEAR   OFFC   OPEX
  MISC   TOTAL   PAID   CHECK #   BALANCE   BALANCE
Jun-05
  $ 0.00     $ 62.57     $ 0.00     $ 62.57     $ —             $ 62.57     $
62.57  
Jul-05
  $ 0.00     $ 1,877.07     $ 0.00     $ 1,877.07     $ 8,129.58       1049    
$ (6,252.51 )   $ (6,189.94 )
Aug-05
  $ 0.00     $ 1,877.07     $ 0.00     $ 1,877.07     $ —       5648     $
1,877.07     $ ( 4,312.87 )
Sept-05
  $ 3,323.04     $ 1,877.07     $ 0.00     $ 5,200.11     $ —       6097796    
$ 5,200.11     $ 887.24  
Oct-05
  $ 6,230.70     $ 1,877.07     $ 0.00     $ 8,107.77     $ —       6107952    
$ 8,107.77     $ 8,995.01  
Nov-05
  $ 6,230.70     $ 1,877.07     $ 0.00     $ 8,107.77     $ —       6117449    
$ 8,107.77     $ 17,102.78  
 
                                                               
TOTAL
  $ 15,784.44     $ 9,447.92     $ 0.00     $ 25,232.36     $ 8,129.58          
  TOTAL DUE   $ 17,102.78