Exhibit 10.13
 

 
 

 
 
TRIPLE NET SPACE LEASE
 
(MULTI-TENANT)
 

 
between
 
MT SPE, LLC,
a Delaware limited liability company,
 
as
 
LANDLORD
 
and
 
RAMBUS INC.,
a Delaware corporation,
 
as
 
TENANT
 
for
 
PREMISES
 
At

Moffett Towers

1040 Enterprise Way
 
SUNNYVALE, CALIFORNIA

 
 

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Table of Content
 
Page
ARTICLE I SUMMARY OF BASIC LEASE
INFORMATION                                                                                                                                          
1
ARTICLE II PREMISES
3
Section 2.01
Demise of Premises
3
Section 2.02
Common Area
3
Section 2.03
Parking
4
Section 2.04
Construction
5
ARTICLE III TERM
8
Section 3.01
Lease Term
8
Section 3.02
Option to Extend
8
Section 3.03
Early Termination
Option                                                                                                                 
10
ARTICLE IV RENT; TRIPLE NET
LEASE                                                                                                                                          
11
Section 4.01
Base
Rent                                                                                                                 
11
Section 4.02
Abatement of Base
Rent                                                                                                                 
11
Section 4.03
Payment of
Rent                                                                                                                 
11
Section 4.04
Additional
Rent                                                                                                                 
11
Section 4.05
Operating Expenses; Insurance Expenses; Real Estate
Taxes                                                                                                                 
12
Section 4.06
Tenant’s Right to Review Supporting
Data                                                                                                                 
17
ARTICLE V
USE                                                                                                                                          
18
Section 5.01
Permitted Use and Limitations on
Use                                                                                                                 
18
Section 5.02
Compliance with
Laws                                                                                                                 
19
Section 5.03
Delivery of
Premises                                                                                                                 
20
Section 5.04
Building
Security                                                                                                                 
21
Section 5.05
Rules and
Regulations                                                                                                                 
21
Section 5.06
LEED Certification
Requirements                                                                                                                 
21
Section 5.07
TDM
Requirements                                                                                                                 
22
ARTICLE VI MAINTENANCE, REPAIRS AND
ALTERATIONS                                                                                                                                          
22
Section 6.01
Maintenance of Premises and
Building                                                                                                                 
22
Section 6.02
Maintenance of Common
Areas                                                                                                                 
24

 
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Page
Section 6.03
Alterations, Additions and Improvements
24
Section 6.04
Covenant Against Liens
25
ARTICLE VII INSURANCE
26
Section 7.01
Property/Rental Insurance for Premises
26
Section 7.02
Property Insurance for Fixtures and Inventory
26
Section 7.03
Landlord’s Liability Insurance
27
Section 7.04
Tenant’s Liability Insurance
27
Section 7.05
Evidence of Insurance
27
Section 7.06
Mutual Waiver of Claims and Subrogation
Rights                                                                                                                 
28
Section 7.07
Indemnification and
Exculpation                                                                                                                 
28
ARTICLE VIII DAMAGE OR
DESTRUCTION                                                                                                                                          
29
Section 8.01
Repair of Damage by
Landlord                                                                                                                 
29
Section 8.02
Repair
Notice                                                                                                                 
29
Section 8.03
Landlord’s Option To Repair or
Terminate                                                                                                                 
30
Section 8.04
Tenant’s Option to
Terminate.                                                                                                                 
30
Section 8.05
Rent Abatement Due to
Casualty.                                                                                                                 
30
Section 8.06
Damage Near End of Lease
Term.                                                                                                                 
30
Section 8.07
Effective Date of Termination; Rent
Apportionment.                                                                                                                 
31
Section 8.08
Waiver of Civil Code
Remedies.                                                                                                                 
31
Section 8.09
No Abatement of
Rentals.                                                                                                                 
31
Section 8.10
No Liability for Tenant’s Alterations or Personal
Property.                                                                                                                 
31
ARTICLE IX REAL PROPERTY
TAXES                                                                                                                                          
32
Section 9.01
Payment of
Taxes                                                                                                                 
32
Section 9.02
Proration for Partial
Years                                                                                                                 
33
   Section 9.03  Personal Property Taxes  33 
ARTICLE X
UTILITIES                                                                                                                                          
34
ARTICLE XI ASSIGNMENT AND
SUBLETTING                                                                                                                                          
35
Section 11.01
Landlord’s Consent
Required                                                                                                                 
35
Section 11.02
Tenant
Affiliates                                                                                                                 
35
Section 11.03
No Release of
Tenant                                                                                                                 
36

 
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Page
Section 11.04
Excess Rent
36
Section 11.05
Information to be Provided
36
Section 11.06
Landlord’s Recapture Rights
37
ARTICLE XII DEFAULTS; REMEDIES
38
Section 12.01
Defaults
38
Section 12.02
Remedies
39
Section 12.03
Default by Landlord
40
Section 12.04
Late Charges
40
Section 12.05
Landlord’s Right to Perform Tenant’s Obligations
41
ARTICLE XIII CONDEMNATION OF
PREMISES                                                                                                                                          
41
Section 13.01
Total
Condemnation                                                                                                                 
41
Section 13.02
Partial
Condemnation                                                                                                                 
41
Section 13.03
Award to
Tenant                                                                                                                 
42
ARTICLE XIV ENTRY BY
LANDLORD                                                                                                                                          
42
ARTICLE XV ESTOPPEL
CERTIFICATE                                                                                                                                          
43
Section 15.01
Estoppel
Certificate                                                                                                                 
43
Section 15.02
Failure to
Deliver                                                                                                                 
43
ARTICLE XVI LIMITATIONS ON LANDLORD’S
LIABILITY                                                                                                                                          
43
ARTICLE XVII GENERAL
PROVISIONS                                                                                                                                          
44
Section 17.01
Severability                                                                                                                 
44
Section 17.02
Agreed Rate Interest on Past-Due
Obligations                                                                                                                 
44
Section 17.03
Time of
Essence                                                                                                                 
44
Section 17.04
Submission of
Lease                                                                                                                 
44
Section 17.05
Incorporation of Prior Agreements and
Exhibits                                                                                                                 
44
Section 17.06
Notices                                                                                                                 
45
Section 17.07
Waivers                                                                                                                 
45
Section 17.08
Recording                                                                                                                 
46
Section 17.09
Surrender of Possession; Holding
Over                                                                                                                 
46
Section 17.10
Cumulative
Remedies                                                                                                                 
47
Section 17.11
Covenants and
Conditions                                                                                                                 
47

 
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Page
Section 17.12
Binding Effect; Choice of Law
47
Section 17.13
Lease to be Subordinate
47
Section 17.14
Attorneys’ Fees
48
Section 17.15
Signs
48
Section 17.16
Merger
49
Section 17.17
Quiet Possession
49
Section 17.18
Easements
50
Section 17.19
Authority
50
Section 17.20
Force Majeure
Delays                                                                                                                 
50
Section 17.21
Hazardous
Materials                                                                                                                 
50
Section 17.22
Intentionally
Deleted                                                                                                                 
52
Section 17.23
Brokers                                                                                                                 
52
Section 17.24
Survival                                                                                                                 
53
Section 17.25
Rooftop Communications
Equipment                                                                                                                 
53
Section 17.26
Right of First
Offer                                                                                                                 
53
Section 17.27
List of
Exhibits                                                                                                                 
55

 
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This Triple Net Space Lease (the “Lease”), dated as of the date first written in
the Summary of Basic Lease Information set forth in Article I below (the
“Summary”), is made by and between MT SPE, LLC, a Delaware limited liability
company (“Landlord”) and RAMBUS INC., a Delaware corporation (“Tenant”).
 
ARTICLE I
SUMMARY OF BASIC LEASE INFORMATION
 
TERMS OF LEASE
DESCRIPTION
        Date:
December  15, 2009
        Premises
        (Article II).
 
 
Premises:
An agreed upon 125,210 rentable square feet of space consisting of a portion of
Floor 1 and all of Floors 6, 7 and 8 of the Building, as further set forth in
Exhibit A, but subject to the terms of Section 2.04 below.
 
Building:
That certain eight (8) story building commonly known as Building C located at
1040 Enterprise Way in Sunnyvale, California  94089, which consists of an agreed
upon 317,166 rentable square feet, as depicted in Exhibit A.
 
Lot 1:
Those three (3) certain buildings, including the Building, commonly known as
Buildings A, B and C located at 1000-1040 Enterprise Way Sunnyvale,
California  94089, which consist of an agreed upon 951,498 rentable square feet,
together with the land on which the same are situated, and related
appurtenances, as depicted in Exhibit A.
 
Project:
The Project currently consists of six (6) buildings commonly known as Buildings
A, B and C on Lot 1 and Buildings E, F and G on Lot 3, located at 1000-1160
Enterprise Way, Sunnyvale, California, which currently consist of approximately
1,628,096 rentable square feet, together with the land on which the same are
situated, and related appurtenances, including an Amenities Parcel, commonly
known as Building H and the related property located at 1060 Enterprise Way
Sunnyvale, CA.  The Project is commonly referred to as “Moffett Towers,” as
depicted in Exhibit A. As and when construction there of is completed, the
Project will also consist of  a seventh (7th) building known as Building D on
Lot 3 and Tenant’s Share will be adjusted pursuant to the terms of Section 4.05
(c) hereof.
 
Parking Spaces
(Section 2.03):
 
Three Hundred Seventy-Nine (379) non-exclusive parking spaces.  Parking spaces
shall be located on Lot 1 only and otherwise in a combination of surface and
structured parking.
      Lease Term
      (Article III).
 
 
Commencement Date:
The earlier to occur of (i) the date upon which Tenant first commences to
conduct business in the Premises, or (ii)  July 1, 2010, subject to extension
pursuant to the terms and conditions of the work letter attached hereto as
Exhibit C (the “Work Letter”) (the “Commencement Date”).
 
Expiration Date:
The last day of the one hundred twentieth (120th) full calendar month after the
Commencement Date.
 
Option(s) to Extend:
Tenant is given two (2) options to extend the Lease Term (each, an “Option to
Extend”) for a period of sixty (60) months each (each, an “Extended Term”)
immediately following the date on which the initial Lease Term or First Extended
Term, as applicable, would otherwise expire.
 

 
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Base Rent
(Section 4.01):

 
Annual Installment
Monthly Installment
Monthly Base Rent per Square Foot
Lease Months
of Base Rent
of Base Rent
Of Rentable Area
1-12*
$3,681,174.00
$306,764.50
$2.45
13-24
$3,786,350.40
$315,529.20
$2.52
25-36
$3,906,552.00
$325,546.00
$2.60
37-48
$4,026,753.60
$335,562.80
$2.68
49-60
$4,146,955.20
$345,579.60
$2.76
61-72
$4,267,156.80
$355,596.40
$2.84
73-84
$4,402,383.60
$366,865.30
$2.93
85-96
$4,522,585.20
$376,882.10
$3.01
97-108
$4,657,812.00
$388,151.00
$3.10
109-120
$4,808,064.00
$400,672.00
$3.20
       
* Base Rent for the Lease Months 1-6 shall be abated pursuant to the terms of
Section 4.02.
 
Tenant’s Share
(Section 4.05), subject to potential adjustment pursuant to the terms of Section
4.05(c).
Tenant’s Project Share:  7.69%
 
Tenant’s Lot 1 Share:  13.16%
 
Tenant’s Building Share:  39.48%
 
Permitted Use
(Article V):
General office, research and development use and any legally permissible related
uses included, without limitation, lectures, electrical laboratories, RFI rooms
(shielded to eliminate external radio frequencies), facilities for prototyping
(including machine shop type functions and computer controlled machine tools),
testing laboratories, and server rooms
 
Broker
(Section 17.23):
 
Cornish & Carey Commercial represents both Landlord and Tenant
Tenant’s Representative
(Section 5.1 of Exhibit C):
 
Per Johanson, Senior Manager of Global Facilities and Real Estate
Landlord’s Representative
(Section 5.2 of Exhibit C):
 
Janette Sammartino

 
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ARTICLE II
 
PREMISES
 
Section 2.01                      Demise of Premises
 
Landlord hereby leases to Tenant and Tenant leases from Landlord for the Lease
Term, at the rental, and upon all of the terms and conditions set forth herein,
certain premises described in the Summary (“Premises”), which Premises comprise
a portion of that certain building described in the Summary (the “Building”)
which is one of six (6) current, (but seven (7) planned) free standing, office
and research and development project buildings (“Project Buildings”) on real
property situated in the City of Sunnyvale, County of Santa Clara, State of
California and commonly known as Moffett Towers.  The Premises are more
particularly described and depicted herein in Exhibit ”A.” Subject to the terms
and conditions of this Lease, Landlord reserves the right to access and use the
restrooms and janitor, telephone and electrical closets (as well as the space
above any dropped ceilings) solely for cabling, wiring, pipes and other Building
system elements; provided, however, such reservation shall not reduce the size
of the Premises or otherwise materially interfere with Tenant’s use and
enjoyment of the Premises and, provided, further, that notwithstanding anything
to the contrary contained in this Lease, Tenant shall not be responsible for
repairing, maintaining, and replacing any cabling, wiring, pipes and other
Building system elements located in such areas not installed therein by Tenant,
except, subject to Section 7.06 hereof, to the extent damaged or destroyed by
the actions of Tenant or any Tenant Parties.  The rentable square footage of the
Premises, Building and other Project Buildings (the “Rentable Area”) has been
determined and certified by Landlord’s architect by a method described as
“dripline,” whereby the measurement encompasses the outermost perimeter of the
constructed building, including every projection thereof and all area beneath
each such projection, whether or not enclosed, with no deduction for any inward
deviation of structure and with the measurement being made floor by floor, but
beginning from the top of the building.  Subject to Landlord’s reasonable
security measures, Applicable Laws, emergencies and Force Majeure events,
Landlord acknowledges and agrees that Tenant, its employees, agents, and
invitees shall have access to the Premises and the Building twenty-four (24)
hours a day, seven (7) days a week.
 
Section 2.02                      Common Area
 
During the Lease Term, Tenant shall have the non-exclusive right to use those
portions of the Common Area which are provided, from time to time, for use in
common by Landlord, Tenant and/or other tenants of the Building or Lot 1.  In
addition, during the Lease Term, Tenant and its employees shall have the
non-exclusive right, in common with others, to use the Amenities Parcel (as
defined below) and the roadways currently known as 11th Avenue and Enterprise
Way,  which provide access to the Amenities Parcel.  Landlord reserves the
right, in its sole discretion, to modify the Common Area (including, without
limitation, increasing or changing the size thereof, adding or removing Project
structures, facilities or other improvements, or changing the use, configuration
and elements thereof), to designate certain areas for the exclusive use of
Landlord and/or certain tenants of Lot 1 or the Project, and to close or
restrict access of certain areas from time to time for repair, maintenance or
construction or to prevent a dedication thereof; provided that (i) Tenant
nevertheless shall have direct access to the Premises (including access through
the lobby of the Buildings and the elevators of the Building)
 

 
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and to parking areas serving the Building, (ii) any such modifications, when
completed, shall not unreasonably interfere with or restrict Tenant’s access to
or possession or use of the Premises or the visibility of Tenant’s signage, and
(iii) Landlord shall not grant any tenant of the Building any exclusive right to
parking spaces in the structured parking area supporting the Building or in the
area in front of the Building unless Landlord grants Tenant the same or
equivalent rights.  Landlord further reserves the right to establish, repeal and
amend from time to time reasonable rules and regulations for the use of the
Common Area and to grant easements or other rights to use the Common Area to
others; provided, however, that (A)  no amendment to the rules and regulations
shall (I) unreasonably interfere with or restrict Tenant’s access to or
possession or use of the Premises, (II) be binding until Tenant has received at
least ten (10) business days’ prior written notice of such rules and
regulations, or (III) not apply retroactively; (B) to the extent of any conflict
between an express provision of this Lease (other than the attached Rules and
Regulations) and such Common Area rules and regulations, this Lease shall
control, and (C) any such easements shall not reduce the number of Parking
Spaces available for Tenant’s use.  The “Common Area” shall consist of (i)
Project Common Area, which consists of an athletic facility (the "Athletic
Facility") and related landscaping to be available for use by Tenant’s employees
(collectively with the Athletic Facility, the “Amenities Parcel”), together with
11th Avenue and Enterprise Way, which provide access thereto, (ii) Lot 1 Common
Area, which includes all landscaping, sidewalks, walkways, driveways, curbs,
parking lots (including striping), roadways within Lot 1, sprinkler systems,
lighting, surface water drainage systems, as well as additional or different
facilities as Landlord may from time to time designate or install or make
available for the use by Tenant in common with others, and (iii) Building Common
Area which includes all lobbies (other than the lobbies on Floors 6, 7, 8 of the
Building, to the extent fully leased to Tenant), mechanical areas, stairwells,
elevators and elevator shafts, pipe, cabling and wiring shafts, telephone
closets, raceways, conduits, fiber vaults, meet-me rooms, pathways, riser spaces
together with their enclosing walls, plus, to the extent not leased to an
occupant, all entrances, elevator and floor lobbies other than the lobbies on
Floors 6, 7, and 8 of the Building, to the extent fully-leased to Tenant),
common corridors and hallways, restrooms, janitor closets, telephone closets,
electric closets and other public or common areas located in the Building.
 
Section 2.03                      Parking
 
Throughout the Lease Term, Landlord shall provide Tenant with the number of
parking spaces set forth in the Summary on an unreserved, non-designated
non-exclusive first come-first serve basis.  Except as set forth in the Summary,
the parking spaces shall include a mixture of surface and structured parking as
determined by Landlord, in its reasonable discretion.  Landlord shall have no
liability for the use of any such parking spaces by anyone (besides Landlord)
other than Tenant or Tenant’s visitors.  In the event Landlord is required by
any law to limit or control parking at the Building or the Project, whether by
validation of parking tickets or any other method of assessment, Tenant, at no
cost to it or its employees, customers or invitees, agrees to participate in
such validation or assessment program under such reasonable and
uniformly-applied rules and regulations as are from time to time established by
Landlord.  Except as otherwise expressly provided herein, all costs and expenses
associated with parking areas serving the Project shall be included in Operating
Expenses.
 

 
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Section 2.04                      Construction
 
(a)           Tenant Improvement Allowance
 
Landlord shall provide to Tenant a Tenant Improvement Allowance of Ten Million
Sixteen Thousand Eight Hundred and 00/100 Dollars ($10,016,800) (i.e. $80.00 per
square foot of Rentable Area in the Premises) to be used for the Tenant
Improvements as set forth in the Work Letter attached as Exhibit C.  The Tenant
Improvement Allowance shall be reduced by an amount equal to:  (i) Tenant’s
Building Share of the costs associated with the purchase and installation of the
2000 KW Generator, enclosure and related fuel tank and transfer switch
(collectively, the “Generator”), (ii) Tenant’s Building Share of the costs
associated with the construction of a shipping/loading area for the Building by
Landlord (the “Shipping/Loading Access”) in the approximate location described
in Exhibit H, and (iii) Tenant’s Lot 1 Share of the costs associated with
Landlord’s construction and installation of parking gates at all entrances/exits
to the parking structure known as “Parking Structure 1” (“Parking Structure 1”)
located at 1060 Enterprise Way immediately behind the Building.
 
(b)           Additional Tenant Improvement Allowance
 
In addition to the Tenant Improvement Allowance provided for in Section 2.04(a)
above, Landlord shall make available to Tenant, at Tenant’s request (provided
that such written request is received by Landlord on or before the Commencement
Date), an Additional Tenant Improvement Allowance of up to Ten Dollars ($10.00)
per square foot of Rentable Area of the initial Premises only to be used for the
Tenant Improvements set forth in the Work Letter attached as Exhibit C.  In the
event that Tenant elects to utilize all or a portion of the Additional Tenant
Improvement Allowance, the amount of such Additional Tenant Improvement
Allowance shall be amortized over the first eighty-four (84) months of the
initial Term of the Lease at a rate of eight percent (8%) per annum, and Tenant
shall pay, together with the monthly installments of Rent due hereunder, such
monthly amortized amount as Additional Rent.
 
(c)           Letter of Credit Security
 
(i)           Deposit of Letter of Credit Security.
 
In the event that Tenant elects to use all or a portion of the Additional Tenant
Improvement Allowance, Tenant shall deposit with Landlord, at the time such
Additional Tenant Improvement Allowance is requested, an unconditional,
irrevocable letter of credit (“Letter of Credit”) on a form reasonably
acceptable to Landlord and, if required, Landlord’s lender(s), and in favor of
Beneficiary, defined below, in the amount of the Additional Tenant Improvement
Allowance so utilized by Tenant, plus interest thereon at the rate specified in
Section 2.04(b) above (the “Letter of Credit Security”) for the sole and
exclusive purpose of securing Tenant’s obligation to repay the Additional Tenant
Improvement Allowance as required by Section 2.04(b), above.  “Beneficiary,” as
used herein refers to either:  (x) Landlord as beneficiary, or (y) if required
by Landlord’s lender(s), Landlord and Landlord’s lender(s) as co-beneficiaries
under the Letter of Credit Security.  The Letter of Credit Security
shall:  (i) be issued by a commercial money center bank reasonably satisfactory
to Landlord with retail branches in San Francisco, California (the “Issuer”);
(ii) be a standby, at-sight, irrevocable letter
 

 
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of credit; (iii) be payable to Beneficiary; (iv) permit multiple, partial draws;
(v) provide that any draw on the Letter of Credit Security shall be made upon
receipt by the Issuer of a sight draft accompanied by a letter from Landlord
certifying that Tenant is in default of its obligation to repay the Additional
Tenant Improvement Allowance as required by this Lease and all applicable notice
and cure period related thereto have expired and, therefore, Landlord is
entitled to draw on the Letter of Credit Security in the amount of such draw
pursuant to the provisions of this Lease; (vi) provide for automatic annual
extensions, without amendment (so-called “evergreen” provision) with a final
expiry date no sooner than ninety (90) days after the end of the eighty-fourth
(84th) month of the Lease Term; (vii) provide that is governed by the Uniform
Customs and Practice for Documentary Credits (1993 revisions) International
Chamber of Commerce Publication 500; and (viii) be cancelable if, and only if,
Issuer delivers to Beneficiary no less than sixty (60) days advance written
notice of Issuer’s intent to cancel.  Except for those costs and expenses to be
borne by Landlord pursuant to Section 2.04(c)(iv), below, Tenant shall pay all
costs, expenses, points and/or fees incurred by Tenant in obtaining the Letter
of Credit Security.
 
(ii)           Landlord’s Right to Draw on Letter of Credit Security
 
The Letter of Credit Security shall be held by Landlord solely as security for
the repayment by Tenant of the Additional Tenant Improvement Allowance used by
Tenant in accordance with Section 2.04(b) above.  Landlord shall have the
immediate right to draw upon the Letter of Credit Security, in whole or in part
and without prior notice to Tenant, other than as required under this Lease, at
any time and from time to time:  (1) if Tenant fails to pay any installment of
the amortized amount of the Additional Tenant Improvement Allowance when due;
provided, however, that such failure to pay shall be subject to the same notice
and cure periods applicable to a failure to pay Rent, or (2) if Tenant either
files a voluntary bankruptcy petition or an involuntary bankruptcy petition is
filed against Tenant by an entity or entities other than Landlord, under 11
U.S.C. §101 et seq., or Tenant executes an assignment for the benefit of
creditors.  No condition or term of this Lease shall be deemed to render the
Letter of Credit Security conditional, thereby justifying the Issuer of the
Letter of Credit Security in failing to honor a drawing upon such Letter of
Credit in a timely manner.  The Letter of Credit Security and its proceeds shall
constitute Landlord’s sole and separate property (and not Tenant’s property or,
in the event of a bankruptcy filing by or against Tenant, property of Tenant’s
bankruptcy estate) and Landlord shall immediately upon any draw (and, except as
provided above,  without notice to Tenant) apply or offset the proceeds of the
Letter of Credit Security against any installment of the amortized amount of the
Additional Tenant Improvement Allowance that is not paid when due.  If any
portion of the Letter of Credit Security is properly drawn upon and applied,
Tenant shall, within five (5) business days after written demand therefore,
restore the Letter of Credit Security to the then unamortized amount of the
Additional Tenant Improvement Allowance; Tenant’s failure to do so shall be a
default by Tenant.  It is expressly understood that Landlord shall be relying on
Issuer rather than Tenant for the timely payment of proceeds under the Letter of
Credit Security and the rights of Landlord pursuant to this Section are in
addition to any rights which Landlord may have against Tenant pursuant to
Article XII below.  Landlord agrees that, at Tenant’s written request, at the
end of each fiscal quarter, provided that Tenant pays all of the installments of
the monthly amortized amount of the Additional Tenant Improvement Allowance due
during such fiscal quarter in accordance with this Lease, Landlord will promptly
execute and deliver to Tenant, for delivery to the Issuer, a
 

 
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reduction certificate providing for the reduction of the Letter of Credit
Security in an amount equal to the payment(s) made by Tenant during that past
fiscal quarter.
 
(iii)           Replacement Letter of Credit Security
 
If, for any reason whatsoever, the Letter of Credit Security becomes subject to
cancellation or expiration during the Lease Term, within forty-five (45) days
prior to expiration of the Letter of Credit Security, Tenant shall cause the
Issuer or another bank satisfying the conditions of Section 2.04(c)(i) above to
issue and deliver to Landlord a Letter of Credit Security to replace the
expiring Letter of Credit Security (the “Replacement Letter of Credit
Security”).  The Replacement Letter of Credit Security shall be in the amount of
the then unamortized balance of the Additional Tenant Improvement
Allowance.  Failure of Tenant to cause the Replacement Letter of Credit Security
to be issued forty-five (45) days prior to the then pending expiration or
cancellation shall entitle Landlord to fully draw down on the existing Letter of
Credit Security and, at Landlord’s election, shall be an event of default under
this Lese without any relevant notice and cure period.
 
(iv)           Transfer of Beneficiary
 
During the Lease Term Landlord may transfer its interest in the Lease or
Landlord’s lender may change.  Landlord may request a change to Beneficiary
under the Letter of Credit Security to the successor of Landlord and/or
Landlord’s lender (the “Transferee”).  Tenant agrees to cooperate and to cause
Issuer, at Landlord’s cost, to timely issue a new Letter of Credit Security on
the same terms and conditions as the original Letter of Credit Security, except
that the new Letter of Credit Security shall be payable to the
Transferee.  Landlord shall surrender the existing Letter of Credit Security to
Tenant simultaneously with Tenant’s delivery of the new Letter of Credit
Security to Transferee.
 
(v)           Return of the Letter of Credit Security
 
The Letter of Credit Security or any balance thereof shall be returned (without
interest) to Tenant (or, at Tenant’s option, to the last assignee of Tenant’s
interests hereunder) promptly upon payment of the final monthly installment of
the amortized Additional Tenant Improvement Allowance.
 
(vi)           Acknowledgment of Parties
 
Landlord and Tenant (a) acknowledge and agree that in no event or circumstance
shall the Letter of Credit Security or any renewal thereof or substitute
therefor or any proceeds thereof be deemed to be or treated as a “security
deposit” under any law applicable to security deposits in the commercial
context, including, but not limited to Section 1950.7 of the California Civil
Code, as such Section now exists or as it may be hereafter amended or succeeded
(the “Security Deposit Laws”), (b) acknowledge and agree that the Letter of
Credit Security (including any renewal thereof or substitute therefor or any
proceeds thereof) is not intended to serve as a security deposit, and the
Security Deposit Laws shall have no applicability or relevancy thereto, and
(c) waive any and all rights, duties and obligations that any such party may
now, or in the future will, have relating to or arising from the Security
Deposit Laws.
 

 
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Tenant hereby waives the provisions of Section 1950.7 of the California Civil
Code and all other provisions of law, now or hereafter in effect, which
(i) establish the time frame by which a Landlord must refund a security deposit
under a lease, and/or (ii) provide that a Landlord may claim from a security
deposit only those sums reasonably necessary to remedy defaults in the payment
of rent, to repair damage caused by a Tenant or to clean the premises, it being
agreed that Landlord may, in addition, claim those sums specified in this
Section 4.06 and/or those sums reasonably necessary to compensate Landlord for
any loss or damage caused by Tenant’s breach of this Lease, including any
damages Landlord suffers following termination of this Lease.
 
ARTICLE III
 
TERM
 
Section 3.01                      Lease Term
 
The term of this Lease (the “Lease Term”) shall commence on the Commencement
Date set forth in the Summary (the “Commencement Date”), and shall expire,
unless sooner terminated or extended as provided for herein, on the Expiration
Date set forth in the Summary (the “Expiration Date”).  Within thirty (30) days
following the Commencement Date, Landlord and Tenant shall execute and deliver a
Memorandum of Commencement of Lease Term substantially in the form attached
hereto as Exhibit B as a confirmation of the information set forth therein.
 
Section 3.02                      Option to Extend
 
(a)           Exercise
 
The Option(s) to Extend set forth in the Basic Lease Information, if any, may be
exercised by Tenant, if at all, only by delivery of irrevocable written notice
(the “Option Notice”) to Landlord given not more than fourteen (14) months nor
less than ten (10) months prior to the end of the initial Lease Term or Extended
Term, as relevant; provided, however, if, as of the date of delivery of the
Option Notice or any day thereafter on or before the last day of the initial
Lease Term or Extended Term, as relevant, Tenant (i) is in material default
under this Lease (beyond the expiration of any applicable notice period provided
under this Lease), (ii) has assigned this Lease to anyone other than an
Affiliate (as defined in Section 11.02 below) or (iii) is currently subletting
more than fifty percent (50%) of the Premises to anyone other than an Affiliate,
then, at the sole option of Landlord exercisable solely by delivering written
notice to Tenant within twenty (20) days of the receipt of the Option
Notice,  the Option Notice shall be totally ineffective, and this Lease shall
expire on the last day of the initial Lease Term or Extended Term, if
applicable, if not sooner terminated.  Furthermore, it is understood and agreed
that the Option(s) to Extend contemplated in this Section 3.02 are personal to
the originally named Tenant and any Affiliate (as hereinafter defined) and are
not transferable without the prior written consent of Landlord.
 
(b)           Extended Term Rent
 
In the event Tenant exercises an Option to Extend set forth herein, all the
terms and conditions of this Lease shall continue to apply during the applicable
Extended Term,
 

 
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except that the Base Rent payable by Tenant during the Extended Term shall be
equal to the greater of:  (i) the Base Rent due hereunder with respect to the
last month of the initial Lease Term or previous Extended Term, if relevant, and
(ii) one hundred percent (100%) of Fair Market Rent (as defined below), as
determined pursuant to Section 3.02(c) below.  “Fair Market Rent” shall mean the
effective rental rate, determined on a per rentable square foot basis, being
charged (including periodic adjustments thereto as applicable during the period
of the applicable Extended Term, to the extent such adjustments are determined
to be part of the Fair Market Rent) in transactions entered into within the
twelve (12) month period immediately preceding the Negotiation Period, for
comparable space in similar buildings in the vicinity of the Project (i.e.,
buildings of a similar age and quality considering any recent renovations or
modernization), with similar floor plate size and with similar amenities, or, if
such comparable space is not available, then making adjustments in the
determination of Fair Market Rent to reflect the age, quality, layout and
amenities of the Premises and the Project, as contrasted to spaces in other
buildings used for comparison purposes, in all instances taking into
consideration:  size; location; floor level; leasehold improvements or
allowances provided or to be provided; lease term; extent of services to be
provided; the time that the particular rate under consideration became or is to
become effective; and any other relevant terms or conditions applicable to both
new and renewing tenants including, without limitation, any free rent or other
rental inducements.
 
(c)           Determination of Fair Market Rent
 
(i)           Negotiation.  If Tenant timely and properly exercises an Option to
Extend, then, within the first thirty (30) days following the date of delivery
of the Option Notice (the “Negotiation Period”), the parties shall meet in good
faith to negotiate the Base Rent for the Premises during the Extended Term.  If,
during the Negotiation Period, the parties agree on the Base Rent for the
Premises during the Extended Term, then such agreed amount shall be the Base
Rent payable by Tenant during the Extended Term.
 
(ii)           Arbitration.  In the event that the parties are unable to agree
on the Base Rent for the Premises within the Negotiation Period, then within
ten (10) days after the expiration of the Negotiation Period, each party shall
separately designate to the other in writing an appraiser to make this
determination.  Each appraiser designated shall be a member of the Appraisal
Institute and shall have at least ten (10) years experience in appraising
commercial real property in Santa Clara County.  The failure of either party to
appoint an appraiser within the time allowed shall be deemed equivalent to
appointing the appraiser appointed by the other party, who shall then determine
the Fair Market Rent for the Premises for the Extended Term.  Within five (5)
business days of their appointment, the two designated appraisers shall jointly
designate a third similarly qualified appraiser.  Within thirty (30) days after
their appointment, each of the two appointed appraisers shall submit to the
third appraiser a sealed envelope containing such appointed appraiser’s good
faith determination of the Fair Market Rent for the Premises for the Extended
Term; concurrently with such delivery, each such appraiser shall deliver a copy
of his or her determination to the other appraiser.  The third appraiser shall,
within ten (10) days following receipt of such submissions, then determine which
of the two appraisers’ determinations most closely reflects Fair Market Rent and
the chosen appraiser’s determination shall be deemed to be the Fair Market Rent
for the Premises during the Extended Term.  The third appraiser shall have no
rights to adjust, amend or otherwise alter the determinations made
 

 
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by the appraisers selected by the parties, but must select one or the other of
such appraisers’ submissions.  The determination by such third appraiser shall
be final and binding upon the parties.  Said third appraiser shall, upon
selecting the determination which most closely resembles Fair Market Rent,
concurrently notify both parties hereto in writing.  The parties shall share the
appraisal expenses equally.  If the Extended Term begins prior to the
determination of Fair Market Rent, Tenant shall pay monthly installments of Base
Rent equal to one hundred three percent (103%) of the monthly installment of
Base Rent in effect for the last year of the initial Lease Term. Once a
determination is made, any over payment or under payment shall be reimbursed as
a credit against, or paid by adding to, the monthly installment of Base Rent
next falling due.
 
Section 3.03                      Early Termination Option
 
(a)           Tenant shall have a one-time right to terminate this Lease only as
of that last day of the eighty-fourth (84th) month of the Lease Term (the “Early
Termination Date”) by providing Landlord with written notice (a “Termination
Notice”) of its intent to terminate given at least nine (9) months prior to the
Early Termination Date.
 
(b)           If Tenant elects to exercise the right to terminate this Lease in
accordance with this Section 3.03, Tenant shall pay a cancellation payment
simultaneously with the delivery of the Termination Notice in an amount (the
“Termination Fee”) equal to the unamortized portion of (i) the abated Rent
during the first six months of the Initial Term, (ii) the Tenant Improvement
Allowance or any other tenant improvement allowance provided to Tenant, (iii)
the costs incurred by Landlord to complete any tenant improvements (including
without limitation architectural and engineering fees, permit fees and other
soft costs) which were not included in any other allowance provided to Tenant,
and (iv) any leasing commissions paid or incurred by Landlord in connection with
this Lease, plus interest on the cumulative sum of the items described in
subsections (i) through (iv) herein accruing from the Commencement Date of this
Lease until such Termination Fee is paid to Landlord at the rate of eight
percent (8%) per annum.   The parties agree to compute the Termination Fee and
include it as an item in the Memorandum of Commencement of Lease Term upon its
execution by Landlord and Tenant
 
(c)           Provided that Tenant pays the Termination Fee, the Lease shall
terminate as of the Early Termination Date with the same force and effect as if
scheduled to expire according to its terms as of such date, and all terms and
provisions of this Lease (including, without limitation, the condition of the
Premises upon expiration of the Term and survival of indemnity obligations)
shall be applicable thereto.  If Tenant fails to timely pay the Termination Fee,
Tenant’s exercise of its right to terminate shall be null and void and of no
force and effect whatsoever, this Lease shall continue in full force and effect
and Tenant shall have no further right to terminate this Lease under this
Section 3.03.
 
(d)           Notwithstanding the foregoing, Tenant’s exercise of its rights
under this Section 3.03 shall, if Landlord so elects in its absolute discretion,
be ineffective in the event that Tenant is in default beyond any applicable
notice and cure period of this Lease at the time of delivery of a Termination
Notice or upon the Early Termination Date.
 

 
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ARTICLE IV
 
RENT; TRIPLE NET LEASE
 
Section 4.01                      Base Rent
 
Subject to the terms of Section 4.02 below, commencing on the Commencement Date
and continuing throughout the Lease Term, Tenant shall pay to Landlord, without
prior notice or demand, base rent (“Base Rent”) as set forth in the Summary,
which shall be payable in monthly installments, in advance, on or before the
first day of each calendar month of the Lease Term.  For purposes hereof, “Lease
Month 7” shall begin one (1) day after the sixth (6th) full month of the Lease
Term and end on the last day of the seventh (7th) full calendar month after the
Commencement Date.  In the event that any month in the Lease Term begins on a
day other than the first (1st) day of a month, the Base Rent and Additional Rent
for such month shall be multiplied by a fraction, the numerator of which shall
be the number of days in such month and the denominator of which shall be number
of days in such calendar month (e.g., if the Lease Term commences September 13,
the fraction for such month shall be 17/30).  Notwithstanding the foregoing,
Tenant shall pay to Landlord Base Rent for Lease Month 7, together with
Landlord’s estimate of Additional Rent due hereunder for such month, upon
Tenant’s execution of this Lease.
 
Section 4.02                      Abatement of Base Rent
 
Notwithstanding anything to the contrary contained in this Lease, Landlord
hereby waives Tenant’s obligation to pay Base Rent for the first six (6) months
of the initial Lease Term (the “Abatement Period”).
 
Section 4.03                      Payment of Rent
 
This Lease is what is commonly called an “Absolute Triple Net Lease,” it being
understood that Landlord shall receive the Base Rent set forth in Section 4.01
free and clear of, and in addition to, any and all expenses, costs, impositions,
taxes, assessments, liens or charges of any nature whatsoever.  Tenant shall pay
all Rent in lawful money of the United States of America to Landlord at the
notice address stated herein or to such other persons or at such other places as
Landlord may designate in writing on or before the due date specified for same
without prior demand, set-off or deduction of any nature whatsoever.   It is the
intention of the parties hereto that this Lease shall not be terminable for any
reason by Tenant and that Tenant shall in no event be entitled to any abatement
of or reduction in Rent payable under this Lease, except as herein expressly
provided in Articles VIII and XIII concerning destruction and condemnation.  Any
present or future law to the contrary shall not alter this agreement of the
parties.
 
Section 4.04                      Additional Rent
 
In addition to the Base Rent reserved by Section 4.01, commencing on the
Commencement Date and continuing throughout the Lease Term, Tenant shall pay
(i) Tenant’s Share of Operating Expenses; (ii) Tenant’s Share of Insurance
Expenses; (iii) Tenant’s Share of Real Estate Taxes; and (iv) a management fee
(the “Management Fee”), payable on a monthly basis, in advance, at the same time
and in the same manner applicable to monthly installments of Base Rent, in an
amount equal to two and one half percent (2.5%) of the then applicable monthly
 

 
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installment of Base Rent (for the purposes of this Section 4.04, the Base Rent
for the first six (6) months of the Lease Term shall be deemed to be
$306,764.50, notwithstanding any abatement of Base Rent during the Abatement
Period pursuant to Section 4.02 above); provided, however, that the Management
Fee shall not be due or payable for the first six (6) months of the Lease
Term).  All of the foregoing payments, together with any and all other amounts
(other than Base Rent), whether or not contemplated, payable by Tenant pursuant
to the terms of this Lease are referred to herein, collectively, as “Additional
Rent, “ and Base Rent and Additional Rent are referred to herein, collectively,
as “Rent. “
 
Section 4.05                      Operating Expenses; Insurance Expenses; Real
Estate Taxes
 
(a)           Definitions
 
Subject to the terms and conditions of Section 4.05(b), below, “Operating
Expenses” shall mean all expenses, costs and amounts of every kind and nature
(other than Insurance Expenses and Real Estate Taxes) which Landlord pays or
accrues (whether obligated to do so or undertaken at Landlord’s discretion)
during any calendar year during the Lease Term because of or in connection with
the operation, management, maintenance, security, repair, replacement and
restoration of (1) the Project, (2) Lot 1, (3) the Amenities Parcel, and (4) the
Building, or any portion thereof.  Without limiting the generality of the
foregoing, Operating Expenses shall specifically include any and all of the
following:
 
(i)           With respect to the Project, any and all costs and expenses
charged to Landlord as owner of Lot 1 (or any portion thereof) pursuant to any
covenants, conditions and restriction or similar governing document recorded
against the property of which the Premises is a part, including, but not limited
to, costs and expenses of operating, cleaning, lighting, maintaining, repairing
and replacing all Project Common Area improvements and elements (including,
without limitation, light poles and fixtures, storm and sanitary sewers, parking
lots, driveways and roads);
 
(ii)           With respect to Lot 1, any and all costs and expenses charged to
Landlord as owner of Lot 1 (or any portion thereof) pursuant to any covenants,
conditions and restriction or similar governing document recorded against the
property of which the Premises is a part, including, but not limited to, costs
and expenses of operating, cleaning, lighting, maintaining, repairing and
replacing all Lot 1 Common Area improvements and elements (including, without
limitation, light poles and fixtures, storm and sanitary sewers, parking lots,
driveways and roads);
 
(iii)           With respect to the Amenities Parcel, any and all costs and
expenses charged to Landlord as owner of Lot 1 (or any portion thereof) pursuant
to any covenants, conditions and restriction or similar governing document
recorded against the property of which the Premises is a part, including, but
not limited to, costs and expenses of operating, cleaning, lighting,
maintaining, repairing and replacing all improvements and elements (including,
without limitation, elevators, stairways, floors, exterior and interior walls,
roof, roof membrane and all other elements of the Athletic Facility; a use
privilege fee consisting of:  (x) Base Rent, as adjusted, times Tenant’s Share
of the agreed 48,207 square foot Athletic Facility, and (y) costs and expenses
arising from the operation of same (net of any fees paid by
 

 
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individual users), provided, however, that no cost  or expense that would
otherwise be excluded from Operating Expenses pursuant to the terms and
conditions of this Lease shall be included; and
 
(iv)           With respect to the Building (or any portion thereof), or the
Project, Amenities Parcel or Lot 1 to the extent such costs are incurred by
Landlord and not otherwise included pursuant to items (i) through (iii) above,
costs and expenses of cleaning, lighting, maintaining, repairing and replacing
all improvements and elements (including, without limitation, light poles and
fixtures, parking lots, driveways and roads, storm and sanitary systems (except
that the parking lots and driveways may only be repaved or slurry sealed three
(3) times during the initial Lease Term, and the parking lot striped not more
often than three (3) times during the initial Lease Term; costs of removal of
trash, rubbish, garbage and other refuse; costs of painting of exterior and
interior walls; costs of removal of graffiti; costs of maintaining landscaping;
costs of providing security systems and personnel to the extent Landlord
determines in its sole discretion to do so; fire protection and fire hydrant
charges (including fire protection system signaling devices now or hereafter
required, and the costs of maintaining of same); water and sewer charges;
utility charges; license and permit fees necessary to operate and maintain the
Building, the Amenities Parcel, Lot 1 or the Project; costs of supplies, tools
and materials used in the operation and maintenance of the Building, the
Amenities Parcel, Lot 1 or the Project and the Common Area; the cost (or the
reasonable depreciation of the cost) of equipment used in the operation and
maintenance of the Building, Lot 1, the Amenities Parcel or the Project and the
Common Area (which shall be expensed or amortized, respectively, by Landlord in
its good faith discretion using commercial real estate management principles,
consistently applied) and rent paid for leasing any such equipment; reasonable
cost of on-site or off-site space for the storage of any and all items used in
conjunction with the operation, management, maintenance and repair of the
Project, Building, Lot 1 or Amenities Parcel (including, without limitation,
tools, machinery, records, decorations, tables, benches, supplies and meters);
the cost of making all improvements which are intended to reduce Operating
Expenses or to increase public safety as required by any Applicable Laws (but
only to the extent of such savings over the Lease Term), or improvements which
may be then required by governmental authority, laws, statutes, ordinances
and/or regulations; the cost of all licenses, certificates, permits and
inspections (other than inspections related to the inspection of the build-out
of any space leased to tenants of the Project); the reasonable cost of
contesting any governmental enactments which may affect Operating Expenses;
reasonable costs incurred to comply with any transportation demand management
program, any present or anticipated conservation program or any other required
governmental program; payments under any easement, license, operating agreement,
declaration, restrictive covenant, or instrument pertaining to the sharing of
costs by the Building, Lot 1 or the Project; costs, fees, charges or assessments
imposed by, or resulting from any mandate imposed on Landlord by, any federal,
state or local government for fire and police protection, trash removal,
community services, or other services which do not constitute Real Estate Taxes
hereunder; total compensation and benefits (including premiums for workers’
compensation and other insurance, except to the extent such premiums are
included in Insurance Expenses) paid to or on behalf of Landlord’s employees,
agents, consultants and contractors below the grade of building manager,
including, without limitation, full or part time on-site management or
maintenance personnel.
 
 “Insurance Expenses” shall mean all expenses, costs and amounts of every kind
and nature which Landlord pays or accrues (whether obligated to do so or
undertaken
 

 
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at Landlord’s discretion) during any calendar year during the Lease Term because
of or with respect to insurance carried by Landlord in connection with the
Building or the Project, including, without limitation, all insurance described
in Sections 7.01 and 7.03 below.
 
“Real Estate Taxes” shall mean all expenses, costs and amounts which Landlord
pays or accrues during the Lease Term for the Project, including, without
limitation, the statements, bills, impositions or levies for all Real Property
Taxes described in Article IX below; provided, however, that Tenant shall not be
obligated to pay any penalties resulting Landlord’s late payment of any Real
Property Taxes, except to the extent such late payment is directly due to
Tenant’s failure to pay Real Estate Taxes as and when due hereunder.
 
(b)           Exclusions
 
Notwithstanding anything to the contrary contained herein, “Operating Expenses”
shall not include (and Tenant shall have no liability for) any of the
following:  (i) any expenses incurred by Landlord for the sole benefit of
Tenant, which expenses shall be reimbursed in full by Tenant pursuant to the
other terms of this Lease (other than through reimbursement of Tenant’s Share of
Operating Expenses), (ii) any expenses incurred by Landlord for the sole benefit
of one or more other tenants of the Building or the Project, which expenses are
in fact reimbursed by such tenant(s) (other than through any operating cost
reimbursement provision identical or substantially similar to the provisions set
forth in this Lease), (iii) any payments of interest or principal relating to
any debt secured by the Building or the Project, except any debt incurred by
Landlord for the purpose of financing amounts which would otherwise be included
in Operating Expenses hereunder, (iv) Landlord’s non-cash depreciation and
amortization of the initial construction of any Common Area improvements;
provided that nothing herein shall limit Landlord’s ability to collect the cost
of other capitalized items pursuant to the terms of this Lease, (v) the cost of
relocating any tenants of Lot 1 or the Project, (vi) the cost of any item for
which Landlord is actually reimbursed by insurance, condemnations, refund or
rebate (and Landlord agrees to use good faith efforts to collect such amounts),
(vii) any expenses for repairs or maintenance to the extent actually recovered
under any warranties or guarantees applicable to the Building, Lot 1 or the
Project, (viii) any cost of testing, surveying, cleaning up, containing,
abating, remedying, removing, encapsulating or handling any Hazardous Materials
at, in, or under the Project, (ix) any cost or expense arising from any defaults
by Landlord under this Lease or any other lease in Lot 1 or the Project, (x) any
property management fees for the Building, Lot 1 or the Project in excess of the
Management Fee described in Section 4.04 above, (xi) marketing costs, costs of
leasing commissions, attorneys’ fees and other costs and expenses incurred in
connection with negotiations or disputes with prospective tenants or other
occupants of the Building, Lot 1 or Project; (xii) any cost of repairs or
alterations resulting from defects in the initial design and construction of the
Building or the Project; (xiii) overhead and profit paid to subsidiaries or
affiliates of Landlord for management or other services, to the extent that the
costs of such services, supplies or materials if the same were not provided by a
subsidiary or affiliate, (xiv) costs of decorating, redecorating, or special
cleaning or other services offered to other tenants of the Building, but not to
Tenant, (xv) wages, salaries, fees, and fringe benefits paid to executive
personnel or officers or partners of Landlord; (xvi) any charge for Landlord’s
income taxes, excess profit taxes, franchise taxes, or similar taxes on
Landlord’s business; (xvii) the cost of any repair made by Landlord because
 

 
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of the total or partial destruction or condemnation of any portion of the
Project, provided that nothing herein shall excuse Tenant from its obligation to
pay a portion of Landlord’s property insurance deductible in the event of a
casualty, as is provided for elsewhere in this Lease, (xviii) the cost of tools
and equipment used initially in the construction, operation, repair and
maintenance of the Project; (xix) the cost of any work or service performed for
or facilities furnished to other tenants of the Building, but not to
Tenant;  (xx) the cost incurred by  Landlord in curing its defaults or
performing work expressly provided for in this Lease to be borne at Landlord’s
expense; (xxi) ground rent or similar payments to a ground lessor; (xxii)
transfer taxes, title insurance costs, points or brokerage commissions incurred
in connection with the sale, financing, refinancing, mortgaging, or other change
of ownership in any part of the Project; (xxiii) all expenses in connection with
the installation with luncheon club, athletic club, dining facility or any other
facility not generally available to other office tenants in the Project; (xxiv)
bad debt expenses; (xxv) costs of acquisition and maintenance of signs in or on
the building identifying the owner of the building or other tenants; (xxvi)
costs incurred by Landlord due to the violation by Landlord or any other tenant
of the terms of any lease of any space in the Project, (xxvii) Landlord’s
general corporate overhead and general and administrative expenses; (xxviii)
costs arising from Landlord’s charitable or political contributions; (xxix)
costs for the purchase (but not maintenance or repair) of sculptures, paintings
and other fine art; (xxx) any compensation paid to clerks, attendants or other
persons in commercial concessions operated by Landlord, (xxxi) Insurance
Expenses, (xxxii) Real Estate Taxes and (xxxiii) any costs arising from the
breach by Landlord of its obligations pursuant to this Lease beyond any
applicable notice and cure periods.  Notwithstanding the above, if Tenant's
Share of the cost of any particular capital expenditure to the Building or
Common Area exceeds Fifty Thousand Dollars ($50,000), then such cost, together
with interest thereon at the rate actually charged Landlord by any lender or, if
no such interest is relevant, with interest thereon at an interest rate equal to
the Agreed Rate (as defined in Section 17.02 below), shall be amortized over its
useful life, and the amount includible in Operating Expenses shall be limited to
the monthly amortized cost thereof.  The determination of what constitutes a
capital expenditure and the useful life applicable thereto shall be made by
Landlord in its good faith discretion using accounting practices commonly
utilized in the commercial real estate industry, consistently applied.
 
(c)           Tenant’s Share
 
For purposes hereof, “Tenant’s Share” shall mean, as applicable:  (i) Tenant’s
Project Share (hereinafter defined), (ii) Tenant’s Lot 1 Share (hereinafter
defined), or (iii) Tenant’s Building Share (hereinafter defined).  “Tenant’s
Project Share” shall mean the percentage derived by the quotient of the Rentable
Area of the Premises divided by the Rentable Area of Lot 1 or the
Project.  “Tenant’s Lot 1 Share” shall mean the percentage derived by the
quotient of the Rentable Area of the Premises divided by the Rentable Area of
Lot 1. “Tenant’s Building Share” shall mean the percentage derived by the
quotient of the Rentable Area of the Premises divided by the Rentable Area of
the Building.  Whenever used in this Lease, the term “Tenant’s Share” shall mean
either the Tenant’s Project Share, Tenant’s Lot 1 Share or Tenant’s Building
Share, as applicable. Landlord and Tenant acknowledge and agree that: (i)
Tenant’s Project Share, Tenant’s Lot 1 Share and Tenant’s Building Share shall
be the percentages set forth in the Summary, and (ii) Landlord shall not pass
through any cost to Tenant in an amount equal to Tenant’s Project Share unless
Landlord incurs such cost with respect to the Project as a whole and charges
other tenants of the Project on that same basis; Landlord will not pass through
 

 
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to Tenant any cost in an amount equal to Tenant’s Lot 1 Share unless Landlord
incurs such cost with respect to Lot 1 as a whole and charges other tenants of
Lot 1 on that same basis; and Landlord will not pass through to Tenant any cost
in an amount equal to Tenant’s Building Share unless Landlord incurs such cost
with respect to the Building as a whole and charges other tenants of the
Building on that same basis.  Notwithstanding the foregoing, Tenant’s Share
shall be subject to increase or reduction (in an amount Landlord shall, in good
faith, determine), based upon any increase or reduction in the Rentable Area of
the Project, Lot 1, the Building, or the Premises.  By way of example only, were
Landlord to build “Building “D” of the Project and the square footage of
Building “D” was 227,614 rentable square feet, then the aggregate rentable
square footage of the Project would increase to 1,855,710 and Tenant’s Project
Share would decrease to 6.75%.
 
(d)           Payment
 
Commencing on the Commencement Date, and continuing through the Lease Term,
Tenant shall pay, on the first day of each calendar month, monthly installments
of Tenant’s  Share of Operating Expenses, Tenant’s Share of Insurance Expenses
and Tenant’s Share of Real Estate Taxes in amounts set forth in a written
estimate by Landlord.  Landlord shall have the right to revise its estimate
upwards one time during a particular calendar year.  Provided that Tenant is
afforded at least thirty (30) days prior written notice of such revision, then,
commencing with Tenant’s next installment of Base Rent due, Tenant thereafter
shall pay such amounts set forth in such revised estimate (which may include an
additional monthly amount based upon any shortfall in Landlord’s previous
estimate).  If Tenant is not provided thirty (30) days’ prior written consent of
such revision, then Tenant’s obligation to pay such amount shall commence on the
first day of the first calendar month following the expiration of the thirty
(30) day notice. (By way of example only, if Landlord notifies Tenant that it
has revised its estimated statement of Operating Expenses on August 15, then
such revised amount shall first be due on October 1.)  Landlord shall furnish to
Tenant a statement (hereinafter referred to as “Landlord’s Statement”), within
ninety (90) days after the end of each calendar year, which shall set forth the
actual amounts of Tenant’s Share of Operating Expenses, Tenant’s Share of
Insurance Expenses and Tenant’s Share of Real Estate Taxes for such preceding
calendar year.  In the event that the actual amounts of Tenant’s Share of
Operating Expenses, Tenant’s Share of Insurance Expenses and Tenant’s Share of
Real Estate Taxes for such preceding calendar year exceed the estimated amounts
paid by Tenant with respect to each of Tenant’s Share during such preceding
calendar year, then Tenant shall pay to Landlord, as Additional Rent, the entire
amount of such excess within thirty (30) days after receipt of Landlord’s
Statement.  In the event that the actual amounts of Tenant’s Share of Operating
Expenses, Tenant’s Share of Insurance Expenses and Tenant’s Share of Real Estate
Taxes for such preceding calendar year are less than the estimated amounts paid
by Tenant with respect to each of Tenant’s Shares during such preceding calendar
year, then Landlord shall apply such difference as a credit to installments of
Rent next falling due (or if the Lease Term has expired or terminated and there
remains no money due to Landlord, then Landlord shall remit to Tenant the amount
of such difference within thirty (30) days of the expiration or earlier
termination of the Lease).  Tenant’s Share of Operating Expenses, Tenant’s Share
of Insurance Expenses and Tenant’s Share of Real Estate Taxes for the ensuing
estimation period shall be adjusted upward or downward based upon Landlord’s
Statement.
 

 
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(e)   Limited Abatement of Operating Expenses, Insurance Expenses and Real
Estate Taxes
 
Notwithstanding anything to the contrary contained in this Lease, Landlord
hereby waives Tenant’s obligation to pay Tenant’s Share of Operating Expenses,
Tenant’s Share of Insurance Expenses and Tenant’s Share of Real Estate Taxes and
the Management Fee for the Abatement Period (as defined in Section 4.02 above);
provided, however, that Tenant shall be obligated to pay Tenant’s Share of any
services that are dependent on occupancy of the Premises (e.g. janitorial
services and utilities) provided to the Premises during the Abatement Period.
 
Section 4.06                      Tenant’s Right to Review Supporting Data
 
(a)           Exercise of Right by Tenant
 
Provided that Tenant has not then received an uncured notice of default under
this Lease from Landlord and provided further that Tenant strictly complies with
the provisions of this Section 4.06, Tenant shall have the right to reasonably
review supporting data for any portion of a Landlord’s Statement that Tenant
claims is incorrect.  In order for Tenant to exercise its right under this
Section 4.06, Tenant shall, within one hundred twenty (120) days after any
Landlord’s Statement is received, deliver a written notice to Landlord
specifying the portions of such Landlord’s Statement that are claimed to be
incorrect, and Tenant shall simultaneously pay to Landlord all amounts due from
Tenant to Landlord as specified in such Landlord’s Statement if such amounts
have not previously been paid.  Except as expressly set forth in Section 4.06(c)
below, in no event shall Tenant be entitled to withhold, deduct, or offset any
monetary obligation of Tenant to Landlord under this Lease, including, without
limitation, Tenant’s obligation to make all Base Rent payments and all payments
of Additional Rent pending the completion of, and regardless of the results of,
any review under this Section 4.06.  The right to review granted to Tenant under
this Section 4.06 may only be exercised once for any Landlord’s Statement, and
if Tenant fails to meet any of the above conditions as a prerequisite to the
exercise of such right, the right of Tenant under this Section 4.06 for a
particular Landlord’s Statement shall be deemed waived.
 
(b)           Procedures for Review
 
Tenant agrees that any review of supporting data under this Section shall occur
at such location at which Landlord’s records for the Building, Lot 1 or the
Project are then located; provided, however, that Landlord agrees to retain such
records in a single location either at the Project or at Landlord’s usual
location therefor.  Any review to be conducted under this Section 4.06 shall be
at the sole expense of Tenant and shall be conducted by a firm of certified
public accountants of national or regionally standing on a non-contingency
basis; provided, however, that if any such review (as agreed upon by Landlord
under Section 4.06(c) below) reveals an overcharge to Tenant in excess of three
percent (3%), then Landlord shall reimburse Tenant for Tenant’s out-of-pocket
third party costs incurred in connection with Tenant’s review.  Tenant
acknowledges and agrees that any supporting data reviewed under this
Section 4.06 shall constitute confidential information of Landlord, which shall
not be disclosed to anyone other than the accountants performing the review and
the management of Tenant who receive the results of the review.  Except (i) to
the extent required by law, (ii) in connection with any legal proceeding
concerning this Lease, or (iii) to the extent such information or results are
otherwise
 

 
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publicly available, the disclosure of such information or results of the review
to any other person by Tenant shall entitle Landlord to all of its rights and
remedies available to Landlord and Tenant at law or in equity, with Tenant
agreeing that Landlord shall be entitled to pursue and injunction against Tenant
to prevent the disclosure of such information in violation of the terms of this
Lease.
 
 
(c)   Resolution of Disputes Regarding Operating Expenses, Insurance Expenses
and Real Estate Taxes
 
Provided Tenant has complied with the provisions of this Section 4.06, if Tenant
believes the results of the review of supporting data described in Subsection
(b) above have revealed Landlord’s calculation of the disputed portion of
Landlord’s Statement to be in error, Tenant shall have fifteen (15) days after
the completion of the examination to notify Landlord of same in writing. The
alleged error(s) shall be described with particularity in Tenant’s notice, which
shall be accompanied by all information supporting Tenant’s allegations. The
parties hereto may agree to correct such error(s) (in which case Landlord will
provide a revised Landlord’s Statement within fifteen (15) days after Tenant’s
notice) or a dispute between the parties may persist.  Tenant’s sole and
exclusive remedy for resolving any such dispute shall be by binding
arbitration.  The arbitration shall be administered by the office of JAMS in San
Francisco, California, and shall be conducted pursuant to its Streamlined
Arbitration Rules and Procedures.  The arbitrator’s powers shall be limited to
resolving the dispute and awarding costs (including reasonable attorneys’ fees)
to the prevailing party.
 
(d)           Effect of Tenant’s Default
 
In the event that Landlord has, in good faith, provided Tenant with written
notice that Tenant is in default of its obligations under this Lease at any time
during the pendency of a review of records under this Section 4.06, said right
to review shall immediately cease and the matters originally set forth in the
Landlord’s Statement shall be deemed to be correct.
 
ARTICLE V
 
USE
 
Section 5.01                      Permitted Use and Limitations on Use
 
The Premises shall be used and occupied only for the permitted use set forth in
the Summary and for no other use or purpose whatsoever.  Tenant shall not use,
suffer or knowingly permit the use of the Premises in any manner that would
constitute waste, nuisance or unlawful acts.  Tenant shall not do anything in or
about the Premises which would (a) cause structural injury to the Building or
the Premises, or (b) cause damage to any part of the Building or the Premises
except to the extent reasonably necessary for the installation of Tenant’s trade
fixtures and Tenant’s Alterations, and then only in a manner and to the extent
consistent with this Lease.  Tenant shall not operate any equipment within the
Building or the Premises which would (i) materially damage the Building or the
Common Area, (ii) overload existing mechanical, electrical or other systems or
equipment servicing the Building, (iii) impair the efficient operation of the
sprinkler system or the heating, ventilating or air conditioning equipment
within
 

 
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or servicing the Building, (iv) damage, overload or corrode the sanitary sewer
system, or (v) damage the Common Area or any other part of Lot 1 or the
Project.  Tenant shall not attach, hang or suspend anything from the ceiling,
roof, walls or columns of the Building or set any load on the floor in excess of
the load limits for which such items are designed nor operate hard wheel
forklifts within the Premises.  Any dust, fumes, or waste products generated by
Tenant’s use of the Premises shall be contained and disposed so that they do not
(A) create an unreasonable fire or health hazard, (B) damage the Premises, or
(C) result in the violation of any law.  Except as approved by Landlord, Tenant
shall not change the exterior of the Building, or the area outside of the
Premises, or install any equipment or antennas on or make any penetrations of
the exterior or roof of the Building, except as provided for in Section
17.25.  Tenant shall not conduct on any portion of the Premises any sale of any
kind (but nothing herein is meant to prohibit sales and marketing activities of
Tenant’s products and services in the normal course of business consistent with
the permitted use), including any public or private auction, fire sale,
going-out-of-business sale, distress sale or other liquidation sale, and any
such sale shall be an immediate event of default hereunder without the benefit
of a notice and cure period from Landlord, notwithstanding anything to the
contrary in this Lease.  No materials, supplies, tanks or containers, equipment,
finished products or semi-finished products, raw materials, inoperable vehicles
or articles of any nature shall be stored upon or permitted to remain within the
outside areas of the Premises except in fully fenced and screened areas outside
the Building which have been designed for such purpose and have been approved in
writing by Landlord for such use by Tenant and for which Tenant has obtained all
appropriate permits from governmental agencies having jurisdiction over such
articles.
 
Section 5.02                      Compliance with Laws
 
(a)           Landlord shall deliver the Premises to Tenant on the Delivery Date
(without regard to the use for which Tenant will use the Premises) in full
compliance with all applicable laws, statutes, codes, rules, regulations and
ordinances including, without limitation, the American With Disabilities Act
(collectively, the “Applicable Laws”).
 
(b)           Throughout the Lease Term and any Extended Terms, Tenant shall
comply with all Applicable Laws and covenants and private restrictions, along
with the LEED Certification Requirements (as defined in Section 5.06 below)
applicable to the Premises promulgated now or in the future: (i) regarding the
physical condition of the Premises, but only to the extent pertenent to the
particular and unique manner in which Tenant uses the Premises (by way of
example only, if any governmental authority should require any portion of the
Project or the Premises to be structurally strengthened against earthquake, or
should require the removal of Hazardous Materials from the Premises and such
measures are imposed as a general requirement applicable to all tenants rather
than as a condition to Tenant’s specific use or occupancy of the Premises, such
work shall be performed by and at the sole cost of Landlord); (ii) regarding the
physical condition of the Building to the extent such compliance work is
triggered by Alterations within the Premises; or (iii) that do not relate to the
physical condition of the Premises but relate to the lawful use of the Premises
and with which only the occupant can comply, such as laws governing maximum
occupancy, workplace smoking, and illegal business operations.  Any other
alterations or improvements affecting the Premises and required by Applicable
Laws, LEED Certification Requirements or private covenants shall be performed by
 

 
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Landlord and Tenant shall reimburse Landlord for Tenant's Share of such cost at
the same time and in the same as Operating Expenses are paid by Tenant under the
terms of this Lease.
 
(c)           By executing this Lease, Tenant acknowledges that it has reviewed
and satisfied itself as to its compliance, or intended compliance with the
applicable zoning and permit requirements, hazardous materials and waste
requirements, and all other statutes, laws, or ordinances relevant to the uses
stated in Section 5.01 above or the occupancy of the Premises.
 
Section 5.03                      Delivery of Premises
 
(a)           Early Entry
 
Notwithstanding anything herein to the contrary, as of the Delivery Date (as
defined below), Tenant and Tenant’s invitees may enter the Premises (and the
Common Area of the Building, to the extent reasonably necessary), at Tenant’s
sole risk, for the sole purpose of installation of the Tenant Improvements (as
defined in Section 2.1 of Exhibit C attached hereto and made a part hereof), and
its furniture, fixtures and equipment (collectively, the “FF&E”) Tenant’s
occupancy of the Premises prior to the Commencement Date shall be solely for the
purpose of constructing the Tenant Improvements and installing the FF&E (and not
for the conduct of Tenant’s business) and shall be on all of the terms and
conditions of this Lease as though the Lease Term had commenced on the Delivery
Date, except the obligation to pay Rent.  The “Delivery Date” shall mean that
date on which all of the following have occurred:  (a) this Lease is fully
executed and delivered by Landlord and Tenant; and (b) Tenant has delivered to
Landlord (i) Rent for the Lease Month 7, and (ii) evidence of the insurance
described in Article VII below.  Tenant shall give Landlord twenty-four (24)
hours prior written notice of its initial entry into the Premises by Tenant or
Tenant’s invitees pursuant to this Section 5.03(a) but thereafter shall not be
required to provide Landlord with such notice.  Tenant shall ensure that any
entry by Tenant or its invitees does not unreasonably interfere with the
construction or completion of any work to be performed by Landlord
hereunder.  In addition, from and after the Delivery Date, Tenant’s employees
may use the Amenities Parcel for its intended use without charge until the
Commencement Date.
 
        (b)           Condition of Premises.  
 
Having made such inspection of the Premises, the Building, Lot 1 or the Project
as it deemed prudent and appropriate (including, without limitation, testing for
the presence of mold), Tenant hereby accepts the Premises in their condition
existing as of the Delivery Date, “AS-IS” and “WITH ALL FAULTS” subject to all
applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use and condition of the Premises, and any
covenants or restrictions, liens, encumbrances and title exceptions of record,
and accepts this Lease subject thereto and to all matters disclosed thereby and
by any exhibits attached hereto.  Notwithstanding the foregoing but subject to
all of the terms of this Lease for the construction of Tenant Improvements,
Landlord shall deliver the Building to Tenant on the Delivery Date with the
building plumbing, lighting, heating, ventilation, air conditioning, gas,
electrical, and sprinkler systems and loading doors in proper operating
condition and built substantially in accordance with the approved plans thereof
and in a workman like manner.  Except as specifically set forth in this Lease
and in the Work Letter Agreement for Tenant Improvements and Interior
Specification Standards attached
 

 
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hereto as Exhibit C and made a part hereof (“Work Letter”), Landlord shall not
be obligated to provide or pay for any improvement work or services related to
the improvement of the Premises.  Tenant acknowledges that neither Landlord nor
any agent of Landlord has made any representation or warranty as to the present
or future suitability of the Premises for the conduct of Tenant’s
business.  Neither party has been induced to enter into this Lease by, nor is
either party is relying on, any representation or warranty outside those
expressly set forth in this Lease.  Neither Landlord nor anyone acting on its
behalf shall be liable for, nor shall this Lease be subject to rescission on
account of, the nondisclosure of any facts.  Tenant expressly waives any right
to rescission and /or damages based on nondisclosure of any facts.
 
Section 5.04                      Building Security
 
Landlord will provide (as part of Operating Expenses) on-site security for Lot 1
between the hours of 4 P.M. and 7 A.M on weekdays and twenty-four (24) hours a
day on weekends and holidays.  Notwithstanding the foregoing, Tenant
acknowledges and agrees that it assumes sole responsibility for security at the
Premises for its agents, employees, invitees, licensees, contractors, guests and
visitors and will provide such systems and personnel for same including, without
limitation, while such person(s) are using the Common Area, as it deems
necessary or appropriate and at its sole cost and expense.  Notwithstanding
anything to the contrary contained in this Lease, neither Landlord nor any of
the Landlord Parties (as defined in Section 7.07 below) shall be liable in any
manner for any security personnel, services, procedures or equipment in, at, on
or about the Premises, the Building, Lot 1 or the Project (whether or not
provided by Landlord) or for the failure of the same to prevent or control, or
to apprehend anyone suspected of, personal injury, property damage or any
criminal conduct in, on or about the Building, Lot 1 or the Project.
 
Section 5.05                      Rules and Regulations
 
Landlord may from time to time promulgate reasonable and nondiscriminatory rules
and regulations applicable for the care and orderly management of the Premises,
Lot 1 or the Project and/or its Common Area.  Such rules and regulations shall
be binding upon Tenant on the tenth (10th) business day after Tenant receives a
written copy thereof, and Tenant agrees to thereafter abide by such rules and
regulations.  No rules and regulations shall require Tenant to pay additional
Rent nor shall any such rules and regulations apply retroactively.  A copy of
the initial Rules and Regulations is attached hereto as Exhibit G.  If there is
a conflict between the rules and regulations and any of the provisions of this
Lease, the provisions of this Lease shall prevail.  If Landlord acts reasonably,
in  good faith, and uniformly enforces the rules and regulations, then Landlord
shall not be responsible for the violation of any such rules and regulations
against each of the tenants by any person, including, without limitation, Tenant
or its employees, agents, invitees, licensees, guests, visitors or contractors.
 
Section 5.06                      LEED Certification Requirements
 
Tenant acknowledges and agrees that it is obligated to comply fully and timely
with the certification requirements (the “LEED Certification Requirements”)
promulgated by the U.S. Green Building Council in order for the Building and
Premises to be certified as “Leadership in Energy and Environmental Design for
Commercial Interiors (LEED-CI)” (and any revisions,
 

 
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supplements or successor plans thereto) at Tenant’s sole cost and expense to
achieve the certifications and goals described therein for at least a silver
rating, and that failure to do so will (i) constitute a material default
hereunder, and (ii) expose Landlord to possible penalties and damages to which
Tenant’s indemnity obligations under the Lease shall apply. Tenant shall fully
cooperate with Landlord and Landlord’s designated LEED consultant to assist
Landlord in obtaining LEED certification for the Premises on Landlord and/or
Tenant’s behalf.
 
Section 5.07                      TDM Requirements
 
Tenant acknowledges and agrees that Tenant has reviewed and analyzed the Moffett
Towers Transportation Demand Management Plan (the “TDM Plan”) approved by the
City of Sunnyvale, California and understands that it is obligated to comply
fully and timely with the approved TDM Plan (and any revisions, supplements or
successor plans thereto) at Tenant’s sole cost and expense to achieve the
certifications and goals described therein, and that failure to do so will (i)
constitute a material default hereunder, and (ii) expose Landlord to possible
penalties and damages to which Tenant’s indemnity obligations under the Lease
shall apply.
 
ARTICLE VI
 
MAINTENANCE, REPAIRS AND ALTERATIONS
 
Section 6.01                      Maintenance of Premises and Building
 
(a)           Throughout the Lease Term, Tenant, at its sole cost and expense,
shall keep, maintain, repair and replace the Premises and every part thereof
(except as provided in 6.01(b) below, and also except for maintenance, repairs
or replacement costs caused solely by an act of negligence or intentional
misconduct by Landlord during the Lease Term, subject to Section 7.06 below) and
all improvements and appurtenances in the Premises, including, without
limitation, all interior walls, all doors and windows, all wall surfaces and
floor coverings, all Alterations, additions and improvements installed by or on
behalf of Tenant during the Lease Term, sewer, plumbing, electrical, lighting,
heating, ventilation and cooling systems, fixtures and equipment exclusively
servicing the Premises to the point of connection with the base Building
systems, all fire sprinklers, all fire safety and security systems, fixtures and
equipment exclusively servicing the Premises, all wiring, and all glazing, in
the same good order, condition and repair as they are in on the Delivery Date,
or as they may be improved after the Delivery Date, normal wear and tear,
casualty, condemnation, obsolescence and Landlord’s obligations hereunder
excepted.  Notwithstanding the foregoing, if Landlord is responsible for
construction of the improvement under the Work Letter, then for the first twelve
(12) months of the Lease Term Tenant shall not be responsible for the repair or
any latent defects in such improvements that Landlord was required to construct
to the extent that such defects existed as of the Commencement Date.
 
(b)           At all times during the Lease Term, Landlord, at its sole cost and
expense, shall promptly repair all defects in the exterior walls (including all
exterior glass which is damaged by structural defects in such exterior walls)
and foundation and all other structural portions of the Premises and the
Building.  At all times during the Lease Term, Landlord shall maintain, repair
and replace the Common Area elements of the Building, those portions of the base
Building systems not exclusively servicing the Premises, and the exterior walls,
structural walls, supporting pillars, foundations, and structural portions of
the roof and roof membrane of the
 

 
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Building.  All costs and expenses incurred by Landlord in connection with the
foregoing obligations shall be included in Operating Expenses subject to the
terms of Section 4.05(b); provided, however, if such maintenance, repair or
replacement is due to the acts, omissions or negligence of Tenant or any Tenant
Parties (as defined in Section 7.07 below), then Landlord shall notify Tenant in
writing and if Tenant fails to make such repairs within thirty (30) days of its
receipt of such notice, then Landlord shall nevertheless make such repairs at
Tenant’s expense, and Tenant, within thirty (30) days (or, in the case of
emergencies, twenty-four (24) hours after receipt of such notice) after receipt
of an invoice and reasonable supporting documentation, shall pay to Landlord all
reasonable out-of-pocket costs and expenses of any such repairs, together with
accrued interest at the Agreed Rate from the date of Landlord’s payment.  Tenant
shall give Landlord written notice of any needed repairs which are the
obligation of Landlord hereunder; provided, however, that Tenant’s failure to
provide such notice shall not be deemed a waiver by Tenant.  It shall then be
the obligation of Landlord, after receipt of such notice, to perform the same
within thirty (30) days (or within twenty-four (24) hours in the event of an
emergency) after such notice; provided, however, that if the nature of the
repairs is such that more than thirty (30) days are reasonably required for
performance, then Landlord shall not be deemed to be in default hereunder if
Landlord commences such repairs within said thirty (30) day (or twenty-four (24)
hour period in the event of an emergency) period and thereafter diligently
completes them and provided further, that for purposes of this sentence
“commences” includes material steps taken by Landlord to investigate, design,
consult, bid or seek permit or other governmental approval in connection with
such repair.  Should Landlord default, as provided in Section 12.03 below, in
its obligation to make any of the repairs assumed by it hereunder with respect
to the Premises or Building and if such repairs shall be reasonably necessary to
Tenant’s use and occupancy of the Premises, Tenant shall have the right to
perform such repairs, in which event Landlord, within thirty (30) days after
written demand accompanied by detailed invoice(s), shall pay to Tenant the
reasonable, actual out-of-pocket costs expended by Tenant for such repairs
together with accrued interest at the Agreed Rate from the date of Tenant’s
payment, provided that nothing herein shall be deemed to create a right of
setoff or withholding by Tenant of Base Rent or Additional Rent or any other
amounts due herein.  Landlord grants Tenant a license, effective during the
Lease Term, to enter upon those portions of the Premises and the Building to
which access is reasonably necessary for Tenant to take such action.  Landlord
shall not be liable to Tenant for any damage to person or property as a result
of any failure to timely perform any of its obligations with respect to the
repair, maintenance or replacement of the Premises, the Building, Lot 1 or the
Project or any part thereof, and Tenant’s sole right and remedy (together with
its rights under Section 12.03 below) shall be the performance of said repairs
by Tenant with the right of reimbursement from Landlord, all in accordance with
the terms of this Section 6.01(b).  Tenant hereby expressly waives all rights
under and benefits of Sections 1941 and 1942 of the California Civil Code or
under any law, statute or ordinance on the same subject now or hereafter in
effect to make repairs and offset the cost of same against Rent or to withhold
or delay any payment of Rent or any other of its obligations hereunder as a
result of any default by Landlord under this Section 6.01(b).
 
(c)           Tenant agrees to keep the interior of the Premises clean and in
sanitary condition as required by the health, sanitary and police ordinances and
regulations of any political subdivision having jurisdiction and to remove all
trash and debris which may be found in the Premises.  Tenant further agrees to
keep the interior surfaces of the Premises, including, without limitation,
windows, floors, walls, doors, showcases and fixtures clean and neat in
appearance.
 

 
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Tenant may contract directly with the janitorial company used by Landlord as of
the Commencement Date to service the Building in order to provide janitorial
services to the Premises, in which case, Landlord shall have no obligation to
provide janitorial services to the Premises.  No agreement entered into by
Tenant and Landlord’s janitorial company shall impose any obligation or
additional cost on Landlord or otherwise bind Landlord.
 
(d)           If Tenant refuses or neglects to commence (as defined above) such
repairs and/or maintenance for which Tenant is responsible under this Article VI
within a thirty (30) day period (or within twenty-four (24) hours in the event
of an emergency) after written notice from Landlord and thereafter to diligently
prosecute the same to completion, then Landlord, upon at least 24 hours prior
written notice (except in an emergency when no such notice shall be required),
may enter the Premises and cause such repairs and/or maintenance to be made, and
Landlord shall not be responsible to Tenant for any loss or damage occasioned
thereby, and Tenant, within thirty (30) days after receipt of an invoice, shall
pay to Landlord all reasonable, our-of-pocket third party costs and expenses of
any such repairs and/or maintenance, together with accrued interest at the
Agreed Rate from the date of Landlord’s payment.
 
Section 6.02                      Maintenance of Common Areas
 
At all times during the Lease Term, Landlord shall maintain, repair and replace
all features, facilities and improvements in, on or about the Building Common
Areas, the Lot 1 Common Areas and the Amenities Parcel, landscaping, curbs,
walkways, driveways, roadways, parking areas, and lighting, sprinkler, drainage,
sewer and plumbing systems, fixtures and equipment.  Landlord’s obligations
herein shall be performed in a manner to maintain the Building Common Areas, and
the Lot 1 Common Areas in a first class condition at reasonably prudent cost and
expense.  All costs and expenses incurred by Landlord in connection with the
foregoing obligations shall be included in Operating Expenses except as
otherwise provided in Section 4.05(b); provided, however, if such maintenance,
repair or replacement is due to the acts, omissions or negligence of Tenant or
any Tenant Parties, then Landlord shall nevertheless make such repairs at
Tenant’s expense, and Tenant, within thirty (30) days after receipt of an
invoice, shall pay to Landlord all out-of-pocket costs and expenses of any such
repairs, together with accrued interest at the Agreed Rate from the date of
Landlord’s payment.
 
Section 6.03                      Alterations, Additions and Improvements
 
No alterations, additions, or improvements (“Alterations”) shall be made to the
Premises by Tenant without the prior written consent of Landlord, which shall
not be unreasonably withheld, conditioned or delayed; provided, however, that
Tenant, without Landlord’s prior written consent, but upon not less than
ten (10) business days prior written notice to Landlord, may make Alterations
(including removal and rearrangement of prior Alterations) which (a) do not
adversely affect any systems or equipment of the Building, Lot 1 or the Project,
(b) do not adversely affect the structural integrity or any structural
components of the Building, Lot 1 or the Project, and (c)  do not involve the
expenditure of more than Seventy-Five Thousand and No/100 Dollars ($75,000.00)
in the aggregate during any twelve (12) month period.  As a condition to
Landlord’s obligation to consider any request for consent hereunder, Tenant
hereby agrees to pay Landlord upon demand for the reasonable out-of-pocket third
party costs and expenses of consultants, engineers, architects and others for
reasonable review of plans and specifications
 

 
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and for monitoring the construction of any proposed Alterations.  Landlord may
require Tenant to remove any such Alterations at the expiration or sooner
termination of the Lease Term and to restore the Premises to their prior
condition pursuant to the terms of Section 17.09 hereof by providing written
notice to Tenant at the time Landlord responds to Tenant’s request for
Landlord’s consent to the Alteration.  If Landlord states in its response that
it will not require removal, then Tenant shall not be required to remove the
applicable Alterations.  All Alterations to be made to the Premises shall be
designed by and made under the supervision of a California licensed architect
and/or California licensed structural engineer (each of whom has been approved
by Landlord, with such approval not being unreasonably withheld, conditioned or
delayed) and shall be made in accordance with plans and specifications which
have been furnished to and approved by Landlord in writing prior to commencement
of work.  All Alterations shall be constructed and installed, at the sole cost
and expense of Tenant, by California licensed contractors approved by Landlord,
in compliance with the terms and conditions of the Work Letter, including but
not limited to the “Specifications” and “Requirements” set forth in Schedules
One and Two thereof, along with all applicable laws and any relevant LEED
Certification Requirements, and in good and workmanlike manner, and shall have
been approved in writing by the City of Sunnyvale and any other applicable
governmental agencies, to the extent such approval is required.  Subject to
Landlord’s right to require Tenant to remove Alterations in accordance with this
Section 6.03 (in which case Tenant shall retain ownership thereof), all
Alterations, including, without limitation, all lighting, electrical, heating,
ventilation, air conditioning and full height partitioning, drapery and
carpeting installations made by Tenant, together with all property that has
become an integral part of the Premises, shall not be deemed trade fixtures and
shall become the property of Landlord at the expiration or sooner termination of
the Lease.  Tenant shall retain title to all furniture and trade fixtures placed
on the Premises.  Within thirty (30) days after completion of any Alterations,
Tenant shall provide Landlord with (A) a complete set of both hard copies and
CAD drawings of “as built” plans for such Alterations, and (B) a statement of
all final costs of design, demolition, construction and installation of such
Alterations.
 
Section 6.04                      Covenant Against Liens
 
Tenant shall not allow any liens arising from any act or omission of Tenant to
exist, attach to, be placed on, or encumber Landlord’s or Tenant’s interest in
the Premises, the Building or the Project, or any portion of either, by
operation of law or otherwise.  Tenant shall not suffer or permit any lien of
mechanics, material suppliers, or others to be placed against the Premises, the
Building or the Project, or any portion of either, with respect to work or
services performed or claimed to have been performed for Tenant or materials
furnished or claimed to have been furnished to Tenant or the Premises.  Landlord
has the right at all times to post and keep posted on the Premises any notice
that it considers necessary for protection from such liens.  At least seven (7)
days before beginning construction of any Alterations, Tenant shall give
Landlord written notice of the expected commencement date of that construction
to permit Landlord to post and record a notice of nonresponsibility.  If any
such lien attaches or if Tenant receives notice of any such lien, Tenant shall
cause the lien to be released and removed of record, by recordation of a lien
release bond or otherwise, within twenty (20) days after receipt of notice
thereof.  Despite any other provision of this Lease, if the lien is not released
and removed within twenty (20) days after Tenant’s receipt of notice of such
lien, then Landlord may immediately take all action necessary to release and
remove the lien, without any duty to investigate the
 

 
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validity of such lien.  All expenses (including reasonable attorney fees and the
cost of any bond) incurred by Landlord in connection with a lien incurred by
Tenant or its removal shall be considered Additional Rent under this Lease and
be immediately due and payable by Tenant.  Notwithstanding the foregoing, if
Tenant shall, in good faith, contest the validity of any such lien, claim or
demand, then Tenant shall, at its sole expense, defend and protect itself,
Landlord and the Premises, the Building, Lot 1 or the Project against the same
and shall pay and satisfy any such adverse judgment that may be rendered thereon
before the enforcement thereof.  If Landlord reasonably elects to participate in
or is made a party to any such action, Tenant shall reimburse Landlord’s
reasonable attorneys’ fees and costs within ten (10) days after demand.
 
ARTICLE VII
 
INSURANCE
 
Section 7.01                      Property/Rental Insurance for Premises
 
At all times during the Lease Term, Landlord shall keep the Premises (including
the Tenant Improvements, but excluding any Alterations or other property
required to be insured by Tenant pursuant to Section 7.02 below), the Building
and Lot 1, insured against loss or damage by fire and those risks normally
included in special form (causes of loss) property insurance.  In addition, then
Landlord may keep the Premises (including the Tenant Improvements, but excluding
any Alterations or other property required to be insured by Tenant pursuant to
Section 7.02 below), the Building and Lot 1 insured against, (i) earthquake and
earthquake sprinkler leakage, (ii) flood, (iii) loss of rents (including
scheduled rent increases) and extra expenses for eighteen (18) months,
(iv) boiler and machinery, (v) fire damage legal liability form, including
waiver of subrogation, and (vi) such other perils as either Landlord’s lender
shall require or Landlord, in its prudent, good-faith judgment, shall deem
reasonable for the protection of the Building and Lot 1.  The amount of such
insurance shall not be less than one hundred percent (100%) of replacement cost
and shall be subject to commercially reasonable deductibles chosen by
Landlord.  Insurance shall include a Building Ordinance and Increased Cost of
Construction Endorsement insuring the increased cost of reconstructing the
Premises and the Building, Lot 1 due to the need to comply with applicable
statutes, ordinances and requirements of all municipal, state and federal
authorities now in force, or which may be in force hereafter.  Tenant shall pay
Tenant’s Share of any deductibles associated with the Project within thirty (30)
days after receipt of an invoice.  All premiums for all such insurance shall be
included in Insurance Expenses recoverable by Landlord in accordance with
Article IV.
 
Section 7.02                      Property Insurance for Fixtures and Inventory
 
At all times during from and after the Delivery Date through and including the
expiration or earlier termination of this Lease, Tenant shall, at its sole
expense, maintain special form (causes of loss) property insurance, which
includes the same coverage as required of Landlord in Section 7.01 above, on any
trade fixtures, furnishings, merchandise, equipment, artwork or other personal
property in or on the Premises, and on all Alterations (whether or not presented
to Landlord for its consent).  The amount of such insurance shall not be less
than one hundred percent (100%) of replacement cost, with commercially
reasonable deductibles, and Landlord shall not have any responsibility, nor pay
any cost, for maintaining any insurance required by this Section 7.02.  Tenant
shall pay all deductibles under such policies in the event of a loss.
 

 
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Notwithstanding the foregoing, Tenant shall have the right to self insure loss
to any of the items described in this Section 7.02.
 
Section 7.03                      Landlord’s Liability Insurance
 
During the Lease Term, Landlord shall maintain a policy or policies of
commercial general liability insurance covering Landlord (and such others as
designated by Landlord) against claims and liability for bodily injury, personal
injury and property damage (including loss of use thereof) on our about the
Building, Lot 1 or the Project, with combined single limit coverage in an amount
to be reasonably determined by Landlord; provided that if such policy is a
blanket policy that covers properties (other than the Building, Lot 1 or the
Project) owned by Landlord, only that portion allocable to the Building or the
Project, as the case may be, shall be payable hereunder.  All premiums for all
such insurance shall be included in Insurance Expenses recoverable by Landlord
in accordance with Article IV.
 
Section 7.04                      Tenant’s Liability Insurance
 
At all times during from and after the Delivery Date through and including the
expiration or earlier termination of this Lease, Tenant shall obtain and keep in
force a policy or policies of commercial general liability insurance covering
Tenant, and naming Landlord and any Landlord Parties and any lenders or ground
landlords whose names are provided to Tenant as additional insureds, against
claims and liability for bodily injury, personal injury and property damage
(including loss of use thereof) based upon, involving or arising out of
(a) Tenant’s operations and contractual liabilities, or (b) ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant
thereto.  Such insurance shall be on an “occurrence” basis providing a single
limit coverage in amount of not less than Ten Million Dollars ($10,000,000) per
occurrence; provided, however, the limits of such insurance shall not limit the
liability of Tenant nor relieve Tenant of any obligation under this Lease.  Such
insurance shall include (i) a Broad Form endorsement covering the provisions of
this Lease and the performance by Tenant of its indemnity agreements contained
in this Lease, including, without limitation, Section 7.07 below, (ii) coverage
for Additional Lessors of Premises, and (iii) coverage for “amendment of the
pollution exclusion” to provide coverage for damage caused by heat, smoke, fumes
from a fire.  All insurance to be carried by Tenant shall be primary to, and not
contributory with, any similar insurance carried by Landlord (whose insurance
shall be considered excess insurance only).
 
Section 7.05                      Evidence of Insurance
 
Tenant shall furnish to Landlord prior to its initial entry to the Premises
pursuant to Section 5.03(a), above, and at least fifteen (15) days prior to the
expiration date of any policy, evidence reasonably acceptable to Landlord that
the property insurance and liability insurance required to be maintained by
Tenant is in full force and effect for the twelve (12) month period following
such expiration date; that Landlord has been named as an additional insured to
the extent of contractual liability assumed in this Lease, including, without
limitation, Section 7.07 below; and that all such policies will not be canceled
unless the issuer has endeavored to provide thirty (30) days’ prior written
notice of the proposed cancellation to Landlord.  The insurance shall be issued
by insurer carriers approved by Landlord; provided, however, that such approval
shall not be unreasonably withheld so long as Tenant’s insurance carrier has a
Best’s Insurance
 

 
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Guide rating not less than A- VIII and is licensed to do business in
California.  Landlord shall furnish to Tenant reasonable evidence of its
insurance coverage required hereunder within fifteen (15) after demand made not
more than once in any calendar year.
 
Section 7.06                      Mutual Waiver of Claims and Subrogation Rights
 
Landlord and Tenant hereby release and relieve the other, and waive their entire
claim of recovery for loss or damage to property arising out of or incident to
any peril covered by the insurance policies required to be carried pursuant to
Sections 7.01 and 7.02 above (but only to the extent of insurance proceeds
either actually received by the waiving party or which would have been received
if the required insurance had been carried by the waiving party), when such
property constitutes the Project, or is in, on or about the Project, whether or
not such loss or damage is due to the negligence of Landlord or Tenant, or their
respective agents, employees, guests, licensees, invitees, or
contractors.  Tenant and Landlord waive all rights of subrogation against each
other on behalf of, and shall obtain a waiver of all subrogation rights from,
all property and casualty insurers referenced above.
 
Section 7.07                      Indemnification and Exculpation
 
(a)           Except as otherwise provided in Section 7.07(c) below, Tenant
shall indemnify, defend, protect and hold free and harmless Landlord, its
partners, subpartners, members, parent organizations, affiliates, subsidiaries,
principal shareholders and other constituent entities, and their respective
officers, directors, servants, employees, agents and independent contractors
(collectively, “Landlord Parties”) from any and all liability, claims, loss,
damages, causes of action (whether in tort or contract, law or equity, or
otherwise), costs, expenses, charges, assessments, fines, and penalties of any
kind, including without limitation, reasonable attorneys’, experts’ and
arbitrators’ fees and costs and court costs, incurred to the extent arising from
(i) any cause in, on or about the Premises, (ii) any acts, omissions or
negligence of Tenant, its partners, subpartners, members, parent organizations,
affiliates, subsidiaries, principal shareholders, other constituent entities or
any other person or entity claiming by, through or under Tenant, or any of their
respective officers, directors, servants, employees, agents, independent
contractors, licensees, invitees, visitors or guests (collectively, “Tenant
Parties”), in, on or about Lot 1 or the Project during the Lease Term, and
(iii) any breach or default in the timely observance or performance of any
obligation on Tenant’s part to be observed or performed under this Lease.
 
(b)           Because Landlord is required to maintain insurance on the Building
and Lot 1, and because Tenant compensates Landlord for such insurance as part of
Tenant’s Share of Insurance Expenses and because of the waivers of subrogation
in Section 7.06, Landlord shall indemnify, defend, protect and hold free and
harmless Tenant and each of the Tenant Parties from any and all liability,
claims, loss, damages, causes of action (whether in tort or contract, law or
equity, or otherwise), costs, expenses, charges, assessments, fines, and
penalties of any kind, including without limitation, reasonable attorneys’,
experts’ and arbitrators’ fees and costs and court costs, for damage to property
outside the Premises, but occurring on Lot 1,  to the extent such claims result
from the grossly negligent acts or willful misconduct of Landlord or Landlord’s
Parties in connection with their respective activities in, on, or about the
Building or Lot 1, except to the extent that such claim is for damage to the
tenant improvements or Tenant’s
 

 
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personal property, fixtures, furniture or equipment and is covered by insurance
that Tenant is required to obtain under this Lease (or would have been covered
had Tenant carried the insurance required under this Lease).
 
(c)           Notwithstanding the foregoing, Tenant’s indemnity contained in
Section 7.07(a) above shall not apply to Landlord’s negligence or willful
misconduct.
 
(d)           Tenant hereby waives all claims against Landlord for damages to
goods, wares and merchandise and all other personal property in, on or about the
Premises and for injury or death to persons in, on or about the Premises, from
any cause arising at any time to the fullest extent permitted by
law.  Notwithstanding the provisions of Section 7.07(b) above, or any other
provision of this Lease, in no event shall any Landlord Parties be liable under
any circumstances for (i) 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) or
other consequential damages, in each case however occurring, or (ii) any damage
which is or could be covered by the insurance Tenant is required to carry under
this Lease.
 
ARTICLE VIII
 
DAMAGE OR DESTRUCTION
 
Section 8.01                      Repair of Damage by Landlord
 
Tenant agrees to notify Landlord in writing promptly of any damage to the
Premises resulting from fire, earthquake or other event (a “Casualty”).  If the
Premises are damaged by a Casualty, any Common Areas of the Building or Lot 1
providing access to or parking for the Premises are damaged by Casualty to the
extent that Tenant does not have reasonable access to or parking for the
Premises, or the Casualty results in the Premises not being provided with
essential utilities (including, without limitation, electricity, water, HVAC and
passenger elevator service), and if neither Landlord nor Tenant has elected to
terminate this Lease under this Article VIII, then Landlord shall promptly and
diligently repair such damage and restore Common Areas, the Building (including
the Building’s systems), the Premises (but not Tenant’s improvements,
Alterations, personal property or trade fixtures therein), the Tenant
Improvements, and/or Tenant’s parking facilities to substantially the same
condition as existed before the Casualty, except for modifications request by
building codes and other laws.  If Tenant requests that Landlord make any
modifications to the Tenant Improvements in connection with the rebuilding,
Landlord may condition those modifications on:  (a) confirmation by Landlord’s
contractor that the modifications shall not materially increase the time needed
to complete the tenant improvements, or (b) an agreement by Tenant that the
modification shall not extend the Rent abatement period.
 
Section 8.02                      Repair Notice.
 
Landlord shall, within sixty (60) days after the date of the Casualty, provide
written notice to Tenant indicating the anticipated period for repairing the
Casualty (the “Repair Notice”).  The Repair Notice shall be accompanied by a
statement executed by a licensed contractor or architect mutually approved by
the parties, certifying the contractor’s or architect’s
 

 
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opinion regarding the anticipated period for repairing the Casualty.  The Repair
Notice shall also state, if applicable, Landlord’s election to either repair or
to terminate the Lease under Section 8.03, below.
 
Section 8.03                      Landlord’s Option To Repair or Terminate.
 
Landlord may elect either to terminate this Lease or to effectuate repairs
if:  (a) the Repair Notice estimates that the period for repairing the Casualty
exceeds two hundred seventy (270) days from the date of the Casualty; (b) the
estimated repair costs of the Premises or the Building, even though covered by
insurance, exceeds fifty percent (50%) of the full replacement cost, or (c)
Landlord does not receive sufficient insurance proceeds (not taking into account
the deductible portion of the insurance policy) to complete Landlord’s
restoration obligations hereunder, and such shortfall is not due to Landlord’s
failure to obtain the property insurance required by Section 7.01 hereof or any
intentionally wrongful act of Landlord or any Landlord Party that results in
such insurance proceeds being unavailable.  Landlord’s election shall be stated
in the Repair Notice.  Despite any other provisions of this Article 8, Landlord
may not elect to terminate this Lease under this Article 8 unless Landlord
elects also to terminate the leases of all similarly situated tenants, provided
that Landlord has the right under each applicable lease to terminate it based on
the extent of the Casualty.
 
Section 8.04                      Tenant’s Option to Terminate.
 
If the Repair Notice indicates that the anticipated period for repairing the
Casualty exceeds two hundred seventy (270) days from the date of Casualty, then
Tenant may elect to terminate this Lease by providing written notice (“Tenant’s
Termination Notice”) within thirty (30) days after receiving the Repair
Notice.  If Tenant does not elect to terminate within this thirty (30) day
period, then, subject to the next succeeding sentence, Tenant shall be
considered to have waived the option to terminate pursuant to this Section 8.04.
 
Section 8.05                      Rent Abatement Due to Casualty.
 
Landlord and Tenant agree that, to the extent Landlord receives rental abatement
insurance proceeds therefore (or would have received such proceeds if: (i)
Landlord had maintained the insurance required of Landlord pursuant to Section
7.01 hereof, or (ii) Landlord or a Landlord Party had not performed an
intentionally wrongful act that results in such insurance being unavailable),
Tenant’s Rent shall fully abate during the period beginning on the later of (a)
the date of the Casualty, or (b) the date on which Tenant ceases to occupy the
Premises and end on the date of the completion of Landlord’s restoration
obligations (the “Casualty Abatement Period”).  If, however, Tenant is able to
occupy and does occupy a portion of the Premises, then Rent shall be abated
during the Casualty Abatement Period only for the portion of the Premises not
occupied by Tenant.  Subject to Section 8.04. the Rent abatement provided in
this Section 8.05 is Tenant’s sole remedy due to the occurrence of the Casualty.
 
Section 8.06                      Damage Near End of Lease Term.
 
Notwithstanding any other provision of this Article 8, if the Premise or the
Building or the Common Areas necessary for parking and/or access to the Premises
are destroyed or damaged by a Casualty during the last twelve (12) months of the
Lease Term, then Landlord and
 

 
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Tenant shall each have the option to terminate this Lease by giving written
notice to the other of the exercise of that option within thirty (30) days after
the date of the Casualty; provided, however, that Landlord may not elect to
terminate this Lease under this Article 8 unless Landlord elects also to
terminate the Lease of all similarly situated tenants, provided that Landlord
has the right under each applicable lease to terminate it based on the extent of
the Casualty.  If Tenant is not then in default beyond all applicable notice and
cure periods under this Lease, Tenant may negate Landlord’s election to
terminate under this Section 8.06 by electing, within ten (10) business days
after receipt of Landlord’s termination notice, to exercise an unexercised
Option.  If Tenant negates Landlord’s election, then this Lease shall continue
in effect unless Landlord has the right to, and elects to, terminate this Lease
under Section 8.03, above.
 
Section 8.07                      Effective Date of Termination; Rent
Apportionment.
 
If Landlord or Tenant elects to terminate this Lease under this Article 8, then
the termination shall be effective thirty (30) days after deliver of the notice
of such election.  Tenant shall pay Rent, properly apportioned, up to the date
of the Casualty.  After the effective date of the termination, Landlord and
Tenant shall be discharged from all future obligations under this Lease, except
those provisions that, by their express terms, survive the expiration or earlier
termination of this Lease.
 
Section 8.08                      Waiver of Civil Code Remedies.
 
Tenant hereby expressly waives any rights to terminate this Lease upon damage or
destruction to the Premises, including without limitation any rights pursuant to
the provisions of Section 1932, Subdivisions 1 and 2 and Section 1933,
Subdivision 4, of the California Civil Code, as amended from time to time, and
the provisions of any similar law hereinafter enacted.
 
Section 8.09                      No Abatement of Rentals.
 
Except as otherwise expressly provided in Section 8.05 above, the Base Rent,
Additional Rent and other charges due under this Lease shall not be reduced or
abated by reason of any damage or destruction to the Premises, and Landlord
shall be entitled to all proceeds of the insurance maintained pursuant to
Section 7.01 above.  Landlord shall not be liable for any inconvenience or
annoyance to Tenant or its visitors, or injury to Tenant’s business (including,
without limitation, loss of business, profits or goodwill), resulting in any way
from any damage or the repair thereof.
 
Section 8.10                      No Liability for Tenant’s Alterations or
Personal Property.
 
In no event shall Landlord have any liability for, nor shall it be required to
repair or restore, any injury or damage to Tenant’s Alterations or personal
property or to any other personal property of others in or upon the Premises,
the Building or Lot 1 or the Project.
 

 
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ARTICLE IX
 
REAL PROPERTY TAXES
 
Section 9.01                      Payment of Taxes
 
(a)           Throughout the Lease Term, Landlord shall pay all real property
taxes, including, without limitation, any escaped or supplemental tax and any
form of real estate tax or assessment, general, special, ordinary or
extraordinary, and any license, fee, charge, excise or imposition imposed,
assessed or levied on or with respect to the Building or the Project or any part
thereof, or any legal or equitable interest of Landlord therein, by any Federal,
State, County, City or other political subdivision or public authority having
the direct or indirect power to tax, including, without limitation, any
improvement district or any community facilities district, as well as any
government or private cost sharing agreement assessments made for the purpose of
augmenting or improving the quality of services and amenities normally provided
by government agencies (“Real Property Taxes”) and any tax, fee, charge,
imposition or excise described in subsection 9.01(b) below.  Notwithstanding
anything to the contrary contained herein, “Real Property Taxes” shall not
include any net income taxes, franchise taxes, or any succession, estate or
inheritance taxes of Landlord or any penalties due to Landlord’s late or
non-payment of any Real Property Taxes.  All such payments shall be made by
Tenant to Landlord on an estimated basis, as is described in Section 4.04
hereof; provided, however, that, at Landlord’s election, such payments may be
made by Tenant directly to the taxing authority pursuant to Section 4.04 hereof
no later than thirty (30) days after Landlord’s delivery to Tenant of a
statement of the real property tax due (but in no event later than ten (10) days
prior to the date such real property taxes would be delinquent), together with a
copy of the applicable tax bill except to the extent such amounts are included
in estimated real property taxes paid monthly pursuant to Section 4.04(b).
 
(b)           Except as otherwise expressly provided herein below, if at any
time during the Lease Term, the State of California or any political subdivision
of the state, including any county, city, city and county, public corporation,
district, or any other political entity or public corporation of this state,
levies or assesses against Landlord a tax, fee, charge, imposition or excise on
rents under leases of space in the Building or Lot 1 or the Project, the square
footage of the Building or the Project, the act of entering into leases of space
in the Building or Lot 1 or the Project, or the occupancy of tenants of the
Building or Lot 1 or the Project, or levies or assesses against Landlord any
other tax, fee, or excise, however described, including, without limitation, a
so-called value added, business license, transit, commuter, environmental or
energy tax fee, charge or excise or imposition related to the Building or Lot 1
or the Project, as a direct substitution in whole or in part for, or in addition
to, any Real Property Taxes (collectively, “Additional Real Property Taxes”),
then the same shall be included in “Real Property Taxes” for all purposes
hereunder; provided that, notwithstanding the foregoing, if any such Additional
Real Property Taxes pertain solely to (i) Rent under this Lease (as opposed to
under all leases of space in the Building or Lot 1 or the Project), (ii) the
square footage of the Premises (as opposed to the square footage of the Building
or Lot 1 or the Project), (iii) the act of entering into this Lease, or (iv) the
occupancy of Tenant (as opposed to all tenants or occupants of the Building or
Lot 1 or the Project) (as opposed to all leases of space in the Building or Lot
1 or the Project), then such Additional Real Property Taxes shall not be
included in “Real Property Taxes,” and shall be the sole obligation and
liability of Tenant and shall be paid by Tenant, as Additional Rent, ten (10)
days before delinquency (or, if such Additional Real Property Taxes are levied
 

 
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against Landlord or Landlord’s property, then Landlord shall pay the same before
delinquency and Tenant shall reimburse Landlord the amount of the same within
ten (10) days after written demand accompanied by a copy of Landlord’s tax
bill); and further provided that, if any such Additional Real Property Taxes
pertain not only to Lot 1 or the Project, but to additional property of Landlord
located outside Lot 1 or the Project as well, then “Real Property Taxes” shall
only include a portion of such Additional Real Property Taxes, which portion
shall be computed upon the amounts and at the rates that otherwise would be
payable if Lot 1 or the Project were the only property of Landlord.
 
(c)           Landlord shall provide Tenant with copies of all tax and
assessment bills on the Premises promptly upon Landlord’s receipt of Tenant’s
written request therefor, and Landlord shall also provide to Tenant evidence of
payment promptly upon Landlord’s receipt of Tenant’s written request therefor.
 
(d)           With respect to taxes and assessments which may lawfully be paid
in installments, “Real Property Taxes” for any period during the Lease Term
shall include only such portion of the same which is payable within such period
and any interest payable thereon computed (whether or not such is the case) as
if Landlord had elected to pay the same over the longest period permitted by
law.
 
(e)           If Landlord shall obtain any abatement or refund on account of any
Real Property Taxes or other Additional Real Property Taxes as to which Tenant
shall have made payments hereunder, then Landlord shall promptly refund to
Tenant an equitable portion of any such abatement or refund, after deducting
therefrom the reasonable costs and expenses incurred by Landlord in obtaining
such abatement or refund.
 
Section 9.02                      Proration for Partial Years
 
If any Real Property Taxes paid by Tenant shall cover any period prior to the
Commencement Date or after the Expiration Date, then Tenant’s Share of such Real
Property Taxes shall be prorated on a day-for-day basis to cover only the period
of time within the applicable tax fiscal year during which this Lease shall be
in effect.
 
Section 9.03                      Personal Property Taxes
 
(a)           Tenant shall pay prior to delinquency all taxes imposed, assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Tenant contained in the Premises or elsewhere.  When
possible, Tenant shall cause said trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real
property of Landlord.
 
(b)           If any of Tenant’s said personal property shall be assessed with
Landlord’s real property, Tenant shall pay to Landlord, as Additional Rent, the
amount of taxes attributable to Tenant’s personal property within ten (10) days
after receipt of a written statement thereof.
 
(c)           If Tenant shall fail to pay any such taxes, Landlord shall have
the right to pay the same, in which case Tenant shall repay such amount to
Landlord, as Additional Rent, with Tenant’s next installment of Rent, together
with interest at the Agreed Rate.
 

 
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ARTICLE X
 
UTILITIES
 
(a)           HVAC.  Tenant shall pay, prior to delinquency and throughout the
Lease Term, all charges for water, gas, heating, ventilation, air conditioning,
cooling, sewer, telephone, electricity, garbage, janitorial service, landscaping
and all other services and utilities supplied to the Premises, including
Tenant’s Share of any such services or utilities which are not separately
metered for or billed to the Premises.  Landlord may, at Tenant’s expense,
install devices which separately meter Tenant’s consumption of utilities.  All
charges for utilities and services which are separately metered to the Premises
or which are provided directly to Tenant or the Premises by utility companies or
third party providers shall be paid directly by Tenant to such utility companies
or third party providers prior to delinquency.  All charges for utilities and
services for the sole benefit of Tenant or the Premises which are billed to and
paid by Landlord directly shall be paid by Tenant to Landlord within ten (10)
days after receipt of an invoice therefor.  All other charges for utilities and
services shall be included in Operating Expenses recoverable by Landlord in
accordance with Article IV.  The disruption, failure, lack or shortage of any
service or utility with respect to the Premises, the Building, Lot 1 or the
Project due to any cause whatsoever shall not affect any obligation of Tenant
hereunder, and Tenant shall faithfully keep and observe all the terms,
conditions and covenants of this Lease and pay all Rent due hereunder, all
without diminution, credit or deduction; provided, however, if such disruption,
failure, lack or shortage is caused by Landlord’s failure to observe or perform
its obligations hereunder, then, within thirty (30) days after receipt of
written notice from Tenant specifying such failure, Landlord shall initiate the
cure of such failure and thereafter shall diligently prosecute said cure to
completion.
 
(b)           Generator Service.
 
(i)           Throughout the Lease Term, Landlord shall provide to Tenant
Tenant’s Building Share of power from the Generator for the purpose of providing
emergency electrical service to the Premises (hereinafter referred to as the
“Generator Service”).  Throughout the Lease Term, Landlord agrees to supply fuel
to the Generator and to maintain, repair, use and operate the Generator in good
working order.
 
(ii)           Landlord shall have the right, by giving reasonable advance
written notice to Tenant, to temporarily suspend service of the Generator and/or
any systems, services or utilities serving the Generator for so long as may
become necessary in order to allow the making of any and all repairs,
replacements, changes, modifications, improvements, or substitutions to the
Generator.  If Landlord temporarily suspends service of the Generator pursuant
to, and in accordance with, this section, the period for which such service is
suspended shall be reasonable with respect to the particular reason for such
temporary suspension of service and, except as may otherwise be expressly
provided in the Lease with respect to any suspension of services provided to
Tenant, Landlord shall not be subject to any liability nor shall Tenant be
entitled to any compensation or abatement of the Base Rent or Additional Rent
under the Lease with respect to the temporary suspension of service set forth in
this section. Landlord agrees to use commercially reasonable efforts to resume
the service of the Generator and/or the systems, services or utilities serving
the Generator as soon as possible. Tenant is hereby authorized to arrange for
the visual inspection and performance of preventative maintenance tests or
 

 
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emergency power tests (a/k/a pull the plug test) by licensed technicians
consistent with Tenant’s practices, provided that no such inspection or test
shall be performed by Tenant without the presence of Landlord’s agent, employee
or other representative.
 
(iii)           If Landlord temporarily suspends service of the Generator in
accordance the above and such suspension is reasonably expected to last more
than twenty-four (24) hours, then Landlord shall, at Landlord’ sole cost and
expense, install, operate, maintain and use an outdoor truck mounted portable
generator or other temporary generator (the “Temporary Generator”) to provide
Tenant with a continuous supply of backup power available from such Temporary
Generator in an amount at least equal to their allocation of the Generator
capacity throughout the period that Landlord temporarily suspends the service of
the Generator and/or any systems, services or utilities serving the Generator
until the date that Landlord resumes such service.
 
(c)           After-Hours Service.  Throughout the Lease Term, Landlord agrees
to provide Tenant with HVAC service during nonbusiness hours upon reasonable
advance verbal notice. Tenant shall reimburse Landlord for its actual cost to
provide such after-hour service within thirty (30) days of Tenant’s receipt of
Landlord’s invoice.  If more than one tenant directly benefits from the
after-hour services, then the cost shall be allocated proportionately between or
among the benefiting tenants based upon the amount of time each tenant benefits
and the square footage each lease.
 
ARTICLE XI
 
ASSIGNMENT AND SUBLETTING
 
Section 11.01                                Landlord’s Consent Required
 
Except as provided in Section 11.02, Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, license or otherwise
transfer or encumber all or any part of Tenant’s interest in this Lease or in
the Premises or any part thereof, without Landlord’s prior written consent;
provided, however, Landlord shall not unreasonably withhold, condition or delay
its consent to an assignment of this Lease or a subletting of all or a portion
of the Premises.  Landlord shall respond in writing to Tenant’s request for
consent hereunder in a timely manner and any attempted assignment, transfer,
mortgage, encumbrance, subletting or licensing without such consent shall be
void, and shall constitute a breach of this Lease.  Tenant shall reimburse
Landlord upon demand for Landlord’s reasonable costs and expenses (including
reasonable attorneys’ fees, architect fees and engineering fees) involved in
reviewing any request for consent whether or not such consent is granted;
provided, however, in no event shall such amount exceed $10,000.
 
Section 11.02                                Tenant Affiliates
 
Tenant, without Landlord’s prior written consent, but upon not less than
ten (10) business days prior written notice to Landlord, may assign this Lease,
or sublet all or any portion of the Premises, to any business entity which
controls, is controlled by, or is under common control with Tenant, or to any
business entity resulting from the merger or consolidation with Tenant, or to
any person or entity which acquires a controlling interest of Tenant’s stock if
Tenant is no
 

 
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longer a publicly traded company (“Affiliate”), provided that said assignee or
subtenant (i) has a net worth equal to or greater than that of Tenant as of the
date of this Lease, and (ii) assumes, in full, the obligations of Tenant under
this Lease arising from and after such assignment.  Any portion of the Premises
which is assigned or sublet to an Affiliate of Tenant shall not be included in
the calculation of subleased, assigned or transferred Rentable Area for the
purposes of Section 11.06 and Section 17.26.
 
Section 11.03                                No Release of Tenant
 
Regardless of whether or not Landlord’s consent is required or obtained, no
subletting or assignment (including, without limitation, to an Affiliate) shall
release Tenant of Tenant’s obligations under this Lease or alter the primary
liability of Tenant to pay the Rent and to perform all other obligations to be
performed by Tenant hereunder.  The acceptance of Rent by Landlord from any
other person shall not be deemed consent to any subsequent assignment or
subletting.  In the event of any default in the payment of Rent or performance
of any obligation hereunder by any assignee or successor of Tenant, Landlord may
proceed directly against Tenant without the necessity of exhausting remedies
against said assignee or successor.
 
Section 11.04                                Excess Rent
 
In the event Landlord shall consent to a sublease or an assignment, Tenant shall
pay to Landlord, as Additional Rent, fifty percent (50%) of all net proceeds
(including the fair market value of all non-cash consideration) collected or
received by Tenant from a subtenant or assignee which are in excess of the Base
Rent and Additional Rent due and payable with respect to the subject space
pursuant to Article IV for the time period encompassed by the sublease or
assignment term, after first deducting reasonable leasing commissions paid by
Tenant with respect to such sublease or assignment.  With respect to an
assignment, Tenant shall make such payment on the effective date of such
assignment.  With respect to a sublease, Tenant shall make such payment on a
monthly basis on the first day of each calendar month after Tenant receives such
amount from the subtenant.  Landlord expressly acknowledges and agrees that it
shall not be entitled to consideration received by Tenant in connection with an
assignment of this Lease or an sublease of the Premises to an Affiliate.
 
Section 11.05                                Information to be Provided
 
Tenant’s written request to Landlord for consent to an assignment or subletting
or other form of transfer shall be accompanied by (a) the name and legal
composition of the proposed transferee; (b) the nature of the proposed
transferee’s business to be carried on in the Premises; (c) the material terms
and provisions of the proposed transfer agreement (including, without
limitation, a description of the portion of the Premises to be transferred, and
the effective date of the proposed transfer); (d) a copy of all executed and/or
proposed documentation pertaining to the proposed transfer; and (e) such
financial and other reasonable information as Landlord may promptly request
concerning the proposed transferee.
 

 
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Section 11.06                                Landlord’s Recapture Rights
 
(a)           Landlord’s Recapture Rights
 
Notwithstanding any other provision of this Article 11, if Tenant desires to
assign, sublease or otherwise transfer to any person or entity (other than an
Affiliate) any interest in this Lease or the entire Premises or any part
thereof, then Tenant shall deliver to Landlord a written request for consent,
together with all of the information specified in Section 11.05 above.  If such
transfer (together with all other assignments, subleases or transfers then in
effect) would affect seventy five percent (75%) of the Rentable Area of the
Premises in the aggregate (such total affected portion of the Rentable Area of
the Premises being referred to herein as the “Recapture Space”) for more than
fifty percent (50%) of the remainder of the Lease Term, then Landlord shall have
the option to recapture all, but not less than all, of the Recapture Space,
which option shall be exercisable only by giving written notice to Tenant
(“Recapture Notice”) within ten (10) days after Landlord’s receipt of Tenant’s
request for consent.  A timely Recapture Notice shall terminate this Lease with
respect to the Recapture Space effective as of the date specified in Tenant’s
request for consent as the effective date of the proposed transfer.  Landlord’s
recapture rights shall be subject to the rights of any assignee, subtenant or
other transferee of Tenant, as set forth in any assignment, sublease or other
transfer agreement to which Landlord previously has consented, but subject to
the terms and conditions set forth in Landlord’s consent thereto; any such
assignment, sublease or other transfer agreement shall be assigned to Landlord
as of the effective date of Landlord’s recapture.
 
(b)           Consequences of Recapture
 
If Landlord recaptures less than the entire Premises pursuant to
Section 11.06(a) above, then the Rent reserved herein shall be prorated on the
basis the of the Rentable Area of the portion of the Premises retained by Tenant
in proportion to the Rentable Area contained in the Premises.  This Lease, as so
amended, shall continue thereafter in full force and effect.  Either party may
require written confirmation of the amendments to this Lease necessitated by
Landlord’s recapture of the Recapture Space.  If Landlord recaptures the
Recapture Space, then Landlord, at Landlord’s sole expense, shall promptly (but
in all events prior to Landlord tendering possession of the Recapture Space to a
third party) construct, paint, and furnish any partitions required to segregate
the Recapture Space from the remaining Premises retained by Tenant, as well as
arrange for separate provision of utilities and services (including, at
Landlord’s option, installation of separate meters if and to the extent the
premises are served by separately metered utilities) (collectively, the
“Demising Improvements”).  Landlord agrees that the Demising Improvements shall
be completed pursuant to plans and specifications reasonably acceptable to
Tenant and that Landlord shall use commercially reasonable efforts to minimize
any interference with Tenant’s use and enjoyment of the Premises during the
construction of any Demising Improvements.
 

 
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ARTICLE XII
 
DEFAULTS; REMEDIES
 
Section 12.01                                Defaults
 
The occurrence of any one or more of the following events shall constitute a
material default and breach of this Lease by Tenant:
 
(a)           The vacation or abandonment of all or a substantial portion of the
Premises by Tenant, or the commission of waste at the Premises, or the making of
an assignment, subletting or other transfer in violation of Article XI; provided
however, abandonment and/or vacation shall be considered to not occur if the
Premises are maintained and occupied to the extent necessary to maintain the
insurance on each and every portion of the Premises;
 
(b)           The failure by Tenant to make any payment of Base Rent as and when
due, if such failure continues for a period of five (5) business days after
written notice thereof from Landlord to Tenant.  In the event that Landlord
serves Tenant with a Notice to Pay Rent or Quit in the form required by
applicable law, such Notice shall constitute the notice required by this
paragraph, provided that the cure period stated in such Notice shall be five (5)
business days rather than the statutory three (3) days;
 
(c)           The failure by Tenant to make any payment of any other sum owing
under this Lease as and when due, if such failure continues for a period of
five (5) business days after written notice thereof from Landlord to Tenant.  In
the event that Landlord serves Tenant with a Notice to Pay Rent or Quit in the
form required by applicable law, such Notice shall constitute the notice
required by this paragraph, provided that the cure period stated in such Notice
shall be five (5) business days rather than the statutory three (3) days;
 
(d)           Tenant’s failure to provide (i)  any supplemental letter of credit
as required by Section 2.04(c) or (ii) any instrument or assurance as required
by Section 7.05 or (iii) estoppel certificate as required by Section 15.01 or
(iv) any document subordinating this Lease to a Lender’s deed of trust as
required by Section 17.13, if any such failure continues for ten (10) business
days after written notice of the failure.  In the event Landlord serves Tenant
with a Notice to Perform Covenant or Quit in the form required by applicable
law, such Notice shall constitute the notice required by this paragraph,
provided that the cure period stated in such Notice shall be ten (10) business
days rather than the statutory three (3) days;
 
(e)           The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Tenant,
other than described in paragraphs (a), (b), (c) or (d) of this Section 12.01,
if such failure continues for a period of thirty (30) days after written notice
thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant’s default is such that more than thirty (30) days are reasonably required
for its cure, then Tenant shall not be deemed to be in default if Tenant
commences such cure within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion.  In the event Landlord serves Tenant with a
Notice to Perform Covenant or Quit in the form required by applicable law, such
Notice shall constitute the notice required by
 

 
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this paragraph, provided that the cure period stated in such Notice shall be
thirty (30) days rather than the statutory three (3) days;
 
(f)           (i) The making by Tenant of any general arrangement or assignment
for the benefit of creditors; (ii) the filing by Tenant of a voluntary petition
in bankruptcy under Title 11 U.S.C. or the filing of an involuntary petition
against Tenant which remains uncontested for a period of sixty (60) days;
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant’s assets located at the Premises or of Tenant’s
interest in this Lease; or (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant’s assets located at the Premises or of
Tenant’s interest in this Lease, provided, however, in the event that any
provisions of this Section 12.01(e) is contrary to any applicable law, such
provision shall be of no force or effect; and
 
(g)           The discovery by Landlord that any financial statement given to
Landlord by Tenant, or any future guarantor of Tenant’s obligations hereunder,
was materially false.
 
Section 12.02                                Remedies
 
In the event of any such material default and breach by Tenant, Landlord may at
any time thereafter, and without limiting Landlord in the exercise of any right
or remedy which Landlord may have by reason of such default and breach:
 
(a)           Terminate Tenant’s right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord.  In such event
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant’s default including, but not limited to, (i) the
cost of recovering possession of the Premises including reasonable attorney’s
fees related thereto; (ii) the worth at the time of the award of any unpaid Rent
that had been earned at the time of the termination, to be computed by allowing
interest at the Agreed Rate but in no case greater than the maximum amount of
interest permitted by law, (iii) the worth at the time at the time of the award
of the amount by which the unpaid Rent that would have been earned between the
time of the termination and the time of the award exceeds the amount of unpaid
Rent that Tenant proves could reasonably have been avoided, to be computed by
allowing interest at the Agreed Rate but in no case greater than the maximum
amount of interest permitted by law, (iv) the worth at the time of the award of
the amount by which the unpaid Rent for the balance of the Lease Term after the
time of the award exceeds the amount of unpaid Rent that Tenant proves could
reasonably have been avoided, to be computed by discounting that amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of the
award plus one percent (1%), (v) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant’s failure to perform
obligations under this Lease, including, but not limited to, reasonable
brokerage commissions and advertising expenses, expenses of remodeling the
Premises for a new tenant (whether for the same or a different use), and any
market-rate concessions made to obtain a new tenant, and (vi) any other amounts,
in addition to or in lieu of those listed above, that may be permitted by
applicable law.
 
(b)           Maintain Tenant’s right to possession as provided in Civil Code
Section 1951.4 (Landlord may continue lease in effect after Tenant’s breach and
abandonment
 

 
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and recover rent as it becomes due, if Tenant has the right to sublet or assign,
subject only to reasonable limitations), in which case this Lease shall continue
in effect whether or not Tenant shall have abandoned the Premises.  In such
event Landlord shall be entitled to enforce all of Landlord’s rights and
remedies under this Lease, including the right to recover the Rent as it becomes
due hereunder.
 
(c)           Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state of California.
 
Section 12.03                                Default by Landlord
 
Landlord shall not be in default under this Lease unless Landlord fails to
perform obligations required of Landlord within thirty (30) days after receipt
of written notice from Tenant to Landlord and to the holder of any first
mortgage or deed of trust covering the Premises whose name and address shall
have theretofore been furnished to Tenant in writing, specifying that Landlord
has failed to perform such obligation; provided, however, that if the nature of
Landlord’s obligation is such that more than thirty (30) days are reasonably
required for performance then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.  In the event Landlord does not
commence performance of any maintenance or repair required of Landlord hereunder
within the thirty (30) day period provided herein, and in the event that such
maintenance or repair relates to improvements which are wholly within the
Premises (not including any Building core systems or equipment), Tenant may
perform such maintenance or repair, and Tenant shall be entitled to prompt
reimbursement by Landlord of Tenant’s reasonable costs and expenses in taking
such action, together with interest thereon at the Agreed Rate.  Tenant waives
any right to terminate this Lease or to vacate the Premises on Landlord’s
default under this Lease.  Tenant’s sole remedy on Landlord’s default is an
action for damages or injunctive or declaratory relief.
 
Section 12.04                                Late Charges
 
Tenant and Landlord hereby acknowledges that late payment by either of them to
the other of Rent or any other sums due hereunder will cause the recipient of
such amounts to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of Rent or any other sum due from
Tenant or Landlord shall not be received by the other or its designated agent
within five (5) business days after such amount is due and owing, the delinquent
party shall pay a late charge equal to five percent (5%) of such amount each
time a late charge is payable during the Lease Term. The parties hereby agree
that such late charge represents a fair and reasonable estimate of the costs the
recipient will incur by reason of late payment. Acceptance of such late charge
shall in no event constitute a waiver of default with respect to such overdue
amount, nor prevent either party from exercising any of the other rights and
remedies granted hereunder.
 

 
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Section 12.05                                Landlord’s Right to Perform
Tenant’s Obligations
 
Except as otherwise expressly stated in this Lease, all obligations to be
performed or observed by Tenant under this Lease shall be performed or observed
by Tenant at Tenant’s expense and without any reduction of Rent.  So long as
Landlord provides Tenant with at least thirty (30) days’ prior written notice
(or whatever other notice and grace period is specifically provided for in this
Lease), Landlord may perform or observe any obligation of Tenant which is in
default hereunder if such default is not cured within such thirty (30) day
period, without waiving Landlord’s other rights and remedies for Tenant’s
failure to perform or observe any obligations under this Lease and without
releasing Tenant from any such obligations.  Within thirty (30) days after
receiving a statement from Landlord, Tenant shall pay to Landlord the amount of
third-party out-of-pocket expenses reasonably incurred by Landlord in performing
or observing Tenant’s obligation.
 
ARTICLE XIII
 
CONDEMNATION OF PREMISES.
 
Section 13.01                                Total Condemnation
 
If the entire Premises or the portions of the Building or the Project required
for reasonable access to, or the reasonable use of, the Premises shall be
permanently taken by condemnation at any time during the Lease Term (whether by
exercise of governmental power or the sale or transfer by Landlord to any
condemnor under threat of condemnation or while proceedings for condemnation are
pending), then this Lease shall terminate as of the earlier of (a) the date on
which title vests in the condemnor, or (b) the date Tenant is dispossessed of
the Premise by the condemnor.  Upon such condemnation, all Rent shall be paid up
to the date of the termination of the Lease.
 
Section 13.02                                Partial Condemnation
 
Except as otherwise provided in this Section 13.02, if less than all of the
Premises is taken by condemnation during the Lease Term (whether by exercise of
governmental power or the sale or transfer by Landlord to any condemnor under
threat of condemnation or while proceedings for condemnation are pending), then
this Lease shall remain in full force and effect.  If a partial taking leaves
the Premises unfit for the conduct of Tenant’s business, then Tenant shall have
the right to terminate this Lease effective as of the earlier of the date (a)
title vests in the condemnor, or (b) on which Tenant is dispossessed by the
condemnor.  Tenant may elect to exercise its right to terminate this Lease
pursuant to this Section 13.02, if at all, by delivering written notice to
Landlord within thirty (30) days after receipt of notice of such
condemnation.  All Rent shall be paid up to the date of termination, and Tenant
shall have no claim against Landlord for the value of the unexpired portion of
the Lease Term.  If this Lease shall not be terminated, then the Rent reserved
herein shall be prorated on the basis the of the Rentable Area of the portion of
the Premises retained by Tenant in proportion to the Rentable Area contained in
the Premises immediately prior to the partial taking.  If Tenant’s continued use
of the Premises requires alterations and repair by reason of a partial taking,
all such alterations and repair shall be made by Landlord at Landlord’s
expense.  Tenant waives all rights it may have under California
 

 
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Code of Civil Procedure Section 1265.130 or otherwise, to terminate this Lease
based on partial condemnation.
 
Section 13.03                                Award to Tenant
 
In the event of any condemnation (whether total or partial), Tenant shall have
the right to claim and recover from the condemning authority such compensation
as may be separately awarded or recoverable by Tenant for loss of Tenant’s
business fixtures, or equipment belonging to Tenant immediately prior to the
condemnation.  In the event of any condemnation (whether total or partial), the
entire condemnation award shall belong to Landlord (including, without
limitation, any “bonus value” of the leasehold estate - OR - amount attributable
to any excess of the market value of the Premises for the remainder of the Lease
Term over the then present value of the Rent payable for the remainder of the
Lease Term), and Tenant shall have no right to recover from Landlord or from the
condemning authority for any claims arising out of such taking; provided,
however, notwithstanding the foregoing, as long as the award payable to Landlord
is not reduced thereby, Tenant shall have the right to make a separate claim in
the condemnation proceeding for, and to recover from the condemning authority,
such compensation as may be separately awarded or recoverable by Tenant for
(a) loss of Tenant’s business fixtures, or equipment belonging to Tenant
immediately prior to the condemnation, (b) the taking of the unamortized value
(using the Lease Term as the amortization period) of any Tenant Improvements
paid for by Tenant which are not removed by Tenant, and (c) Tenant’s moving
expenses.
 
ARTICLE XIV
 
ENTRY BY LANDLORD
 
Subject to Tenant’s reasonable security measures (which may include having a
representative of Tenant present) (except in cases of emergency), Tenant shall
permit Landlord and its employees, agents and contractors to enter the Premises
and all parts thereof upon twenty-four (24) hours notice, which may be oral (or
without notice in the case of an emergency where there is a reasonable risk of
the loss of life or property) at all reasonable times solely for any of the
following purposes:  (i) to inspect the Premises; (ii) to maintain the Premises;
(iii) to make such repairs to the Premises as Landlord is obligated or may elect
to make; (iv) to make repairs, alterations or additions to any other portion of
the Building; (v) to show the Premises and to post “For Lease” signs for the
purposes of re-letting the Premises during the last twelve (12) months of the
Lease Term; (vi) to show the Premises to prospective lenders or purchasers of
the Building; and (vii) to post notices of nonresponsibility.  Provided that
Landlord uses commercially reasonable efforts to promptly finish any work for
which it entered and otherwise uses commercially reasonable effort to minimize
interference to Tenant’s use and enjoyment of the Premises, Landlord shall have
such right of entry without any abatement of Rent to Tenant.  Tenant hereby
waives any claims for damages or for any injuries or inconvenience to or
interference with Tenant’s business, lost profits, any loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned thereby.
 

 
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ARTICLE XV
 
ESTOPPEL CERTIFICATE
 
Section 15.01                                Estoppel Certificate
 
Either party (the “Certifying Party”) shall, at any time upon not less than
fifteen (15) days’ prior written notice from the other (the “Requesting Party”),
execute, acknowledge and deliver to the Requesting Party a statement in
substantially the same form and substance as Exhibit F attached hereto in
writing (i) certifying, if true, that this Lease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification and
certifying, if true, that this Lease, as so modified, is in full force and
effect) and the date to which the Rent and other charges are paid in advance, if
any; (ii) acknowledging, if true, that there are not, to the Certifying Party’s
knowledge, any uncured defaults on the part of Landlord or Tenant hereunder, or
specifying such defaults if any are known or claimed; and (iii) certifying or
acknowledging, if true, such other reasonably ascertainable facts that are
covered by the Lease terms as are requested by any prospective lender, purchaser
of the Building or other third party designated by the Requesting Party.  Any
such statement may be conclusively relied upon by any prospective lender,
purchaser of the Building or the third party designated by the Requesting Party.
 
Section 15.02                                Failure to Deliver
 
A Certifying Party’s failure to timely execute, acknowledge and deliver such
statement within the applicable notice and grace periods provided for herein
shall constitute a default hereunder.
 
ARTICLE XVI
 
LIMITATIONS ON LANDLORD’S LIABILITY
 
If Landlord shall fail to perform any covenant, term or condition of this Lease
upon Landlord’s part to be performed, and if as a consequence of such default
Tenant shall recover a money judgment against Landlord, such judgment shall be
satisfied only out of the interest of Landlord in the Building including,
without limitation, the rental income and proceeds from sale as well as any
insurance or condemnation proceeds received by Landlord.  Neither Landlord nor
any Landlord Parties shall have any personal liability therefor, and Tenant
hereby expressly waives and releases such personal liability on behalf of itself
and all persons claiming by, through or under Tenant.  The limitations of
liability contained in this Article XVI shall inure to the benefit of Landlord’s
and all Landlord Parties’ present and future partners, beneficiaries, officers,
directors, trustees, shareholders, agents and employees, and their respective
partners, heirs, successors and assigns.  Under no circumstances shall any
present or future partner of Landlord (if Landlord is a partnership), or trustee
or beneficiary (if Landlord or any partner of Landlord is a trust), have any
liability for the performance of Landlord’s obligations under this Lease.
 

 
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ARTICLE XVII
 
GENERAL PROVISIONS
 
Section 17.01                                Severability
 
The invalidity of any provision of this Lease shall in no way affect the
validity of any other provision hereof.
 
Section 17.02                                Agreed Rate Interest on Past-Due
Obligations
 
Except as expressly herein provided, any amount due to either party not paid
when due shall bear interest at the Bank of America prime rate plus two
percent (2%) (the “Agreed Rate”).  Payment of such interest shall not excuse or
cure any default by Tenant under this Lease. Despite any other provision of this
Lease, the total liability for interest payments shall not exceed the limits, if
any, imposed by the usury laws of the State of California.  Any interest paid in
excess of those limits shall be refunded to the payor by application of the
amount of excess interest paid against any sums outstanding in any order that
payee requires.  If the amount of excess interest paid exceeds the sums
outstanding, the portion exceeding those sums shall be refunded in cash to the
payor by the payee.
 
Section 17.03                                Time of Essence
 
Time is of the essence in the performance of all obligations under this Lease.
 
Section 17.04                                Submission of Lease
 
The submission of this Lease to Tenant shall be for examination purposes only,
and does not and shall not constitute a reservation of or option for Tenant to
lease, or otherwise create any interest of Tenant in the Premises or any other
premises situated in Lot 1 or the Project.  The return to Landlord of
Tenant-executed copies of this Lease shall not be binding upon Landlord,
notwithstanding any preparation or anticipatory reliance or expenditures by
Tenant or any time interval, until Landlord has in fact executed and actually
delivered a fully-executed copy of this Lease to Tenant.  This document shall
not be effective as a lease or otherwise until executed and delivered by both
Landlord and Tenant.
 
Section 17.05                                Incorporation of Prior Agreements
and Exhibits
 
This Lease (including Exhibits A, B, C, D, E, F, G, H, I, J and K) contains all
agreements of the parties with respect to any matter mentioned herein.  No prior
agreement or understanding pertaining to any such matter shall be
effective.  This Lease may be modified in writing only, signed by the parties in
interest at the time of the modification. Except as otherwise stated in this
Lease, Tenant hereby acknowledges that neither the Landlord nor any employees or
agents of the Landlord has made any oral or written warranties or
representations to Tenant relative to the condition or use by Tenant of said
Premises and Tenant acknowledges that Tenant assumes all responsibility
regarding the Occupational Safety Health Act, the legal use and adaptability of
the Premises and the compliance thereof with all applicable laws and regulations
in effect during the Lease Term except as otherwise specifically stated in this
Lease.
 

 
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Section 17.06                                Notices
 
(a)           Written Notice
 
Any notice required or permitted to be given hereunder shall be in writing and
shall be given by a method described in paragraph (b) below and shall be
addressed to Tenant or to Landlord, as the case may be, at the respective
address noted below next to the signature of such party. Either party may, by
notice to the other party, specify a different address for notice purposes.  A
copy of all notices required or permitted to be given hereunder to Tenant or to
Landlord, as the case may be, shall be concurrently transmitted to such other
persons at such addresses as may hereafter be designated by Tenant or Landlord,
respectively, by notice to the other party; provided, however, no delay or
failure of delivery to any such persons shall affect the validity of the
delivery of such notice to Tenant or to Landlord, as the case may be.
 
(b)           Methods of Delivery
 
(i)           When personally delivered to the recipient, notice is effective
upon delivery.  Delivery to the person apparently designated to receive
deliveries at the subject address (e.g., a receptionist) shall constitute
personal delivery if made during business hours.
 
(ii)           When mailed by certified mail with return receipt requested,
notice is effective upon receipt if delivery is confirmed by a return receipt.
 
(iii)           When delivered by recognized overnight courier service (e.g.,
Federal Express, Airborne, United Parcel Service, DHL WorldWide Express) with
charges prepaid or charged to the sender’s account, notice is effective upon
delivery if delivery is confirmed by the courier service
 
(iv)           When delivered by facsimile to the last facsimile number of the
recipient known to the party giving notice, notice is effective on receipt as
long as (A) a duplicate copy of the notice is promptly given by first-class or
certified mail or by overnight delivery, or (B) the receiving party delivers a
written confirmation of receipt.  Any notice given by facsimile shall be
considered to have been received on the next business day if it is received
after 5:00 p.m. (recipient’s time) on a nonbusiness day.
 
(c)           Refused, Unclaimed or Undeliverable Notices
 
Any correctly addressed notice that is refused, unclaimed, or undeliverable
because of an act or omission of the party to be notified shall be considered to
be effective as of the first date that the notice was refused, unclaimed, or
considered undeliverable by the postal authorities, messenger, or overnight
courier service.
 
Section 17.07                                Waivers
 
No waiver of any provision hereof shall be deemed a waiver of any other
provision hereof or of any subsequent breach of the same or any other
provisions.  Any consent to, or approval of, any act shall not be deemed to
render unnecessary the obtaining of consent to or approval of any subsequent
act.  The acceptance of Rent hereunder by Landlord shall not be a
 

 
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waiver of any preceding breach by Tenant of any provision hereof, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord’s knowledge of such preceding breach at the time of acceptance of such
Rent.
 
Section 17.08                                Recording
 
Neither Landlord nor Tenant shall execute, acknowledge or deliver to the other a
“short form” memorandum of this Lease for recording purposes.
 
Section 17.09                                Surrender of Possession; Holding
Over
 
(a)           At the expiration or earlier termination of this Lease, Tenant
shall remove all of Tenant’s equipment, trade fixtures, supplies, wall
decorations, signage and other personal property from the Premises, the Building
and the Common Area and shall vacate the Premises, and surrender to Landlord
possession of the Premises and all improvements therein, broom clean and in
substantially as good order and condition as when the Tenant’s Work is complete,
excepting only normal wear and tear, damage due to casualty not caused by Tenant
or Tenant’s agents, employees or contractors, condemnation and Landlord’s
obligations hereunder.  Except for such normal wear and tear, damage due to
casualty not caused by Tenant or Tenant’s agents, employees or contractors,
condemnation and Landlord’s obligations Tenant shall:  (i) repair all damage to
the Premises, the interior and exterior of the Building and the Common Area
caused by Tenant’s removal of its property; (ii) patch and refinish, to
Landlord’s reasonable satisfaction, all penetrations made by Tenant or any
Tenant Parties to the roof, floor, interior or exterior walls or ceiling of the
Premises and the Building, whether or not such penetrations were made with
Landlord’s approval; (iii) repair or replace all damaged ceiling tiles, wall
coverings and floor coverings to the reasonable satisfaction of Landlord; and
(iv) repair all damage caused by Tenant to the exterior surface of the
Building.  Upon the expiration or earlier termination of this Lease, Landlord
may reenter the Premises and remove all persons and property therefrom.  If
Tenant shall fail to surrender to Landlord the Premises, the Building and the
Common Area in the condition required by this Section 17.09(a) at the expiration
or earlier termination of this Lease, then Landlord, at Tenant’s expense, may
remove Tenant’s signs, property and/or improvements not so removed and make such
repairs and replacements not so made or hire, at Tenant’s expense, independent
contractors to perform such work.  Tenant shall be liable to Landlord for all
reasonable out-of-pocket costs incurred by Landlord in returning the Premises,
the Building and the Common Area to the required condition, together with
interest thereon at the Agreed Rate from the date incurred by Landlord until
paid.  Tenant shall pay to Landlord the amount of all costs so incurred
(including, without limitation, costs of disposal, storage and insurance),
together with interest at the Agreed Rate, within thirty (30) days after receipt
of an invoice therefor.
 
(b)           If Tenant, without Landlord’s prior written consent, remains in
possession of the Premises after the expiration of the Lease Term, then such
occupancy shall be a tenancy-at-sufferance on every applicable term, condition
and agreement contained herein (including the payment of Additional Rent),
except that monthly Base Rent shall be payable at a rate equivalent to one
hundred fifty percent (150%) of the higher of (i) Base Rent in effect
immediately prior to such expiration or (ii) the Fair Market Rent for the
Premises at such time.
 

 
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Section 17.10                                Cumulative Remedies
 
No remedy or election hereunder by Landlord shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies at law or in equity.
 
Section 17.11                                Covenants and Conditions
 
Each provision of this Lease to be observed or performed by Tenant shall be
deemed both a covenant and a condition.
 
Section 17.12                                Binding Effect; Choice of Law
 
Subject to any provisions hereof restricting assignment or subletting by Tenant
and subject to the provisions of Article XVI, this Lease shall bind the parties,
their personal representatives, successors and assigns.  This Lease shall be
governed by the laws of the State of California.
 
Section 17.13                                Lease to be Subordinate
 
Tenant agrees that this Lease is and shall be, at all times, subject and
subordinate to (a) the lien of any mortgage, deed of trust or other encumbrances
now existing against the Premises, the Building or Lot 1 or the Project,
including all modifications, renewals, and extensions thereof, and (b) all
ground or underlying leases now existing affecting the Building or Lot 1 or the
Project, including all modifications, renewals, and extensions
thereof.  Landlord agrees that it shall be an express condition precedent to
Tenant’s obligations under this Lease that Landlord, at its sole cost and
expense, provide Tenant with subordination, non-disturbance and attornment
agreements (“SNDA”) substantially in the form of Exhibit E from the holder of
each mortgage, deed of trust or other encumbrances and the ground lessor under
any ground lease within sixty (60) days of the mutual execution and delivery of
this Lease; provided, however, that if Landlord fails to deliver the SNDA within
such time period, then Tenant shall thereafter have the right to terminate this
Lease until such time as the SNDA is delivered to Tenant fully executed and
acknowledged by Landlord and the holder of each mortgage, deed of trust or other
encumbrances and the ground lessor under any ground lease.   If, after the
mutual execution and delivery of this Lease, Landlord elects to encumber the
Property with a new mortgage, deed of trust or encumbrance or enter into a
ground lease affects the Building or  Lot 1, then Tenant shall execute and
deliver any commercially reasonable documents confirming the subordination of
this Lease within fifteen (15) business days after delivery of same by Landlord,
so long as the mortgagee, beneficiary, or ground or underlying Landlord agrees
therein that this Lease will not be terminated if Tenant is not in default
beyond all applicable notice and cure periods following either the foreclosure
of any such mortgage, deed or trust or other encumbrance (or the granting of a
deed in lieu thereof) or the termination of any such ground or underlying
lease.  Notwithstanding any subordination of this Lease, in the event of either
the foreclosure of any such mortgage, deed or trust or other encumbrance (or the
granting of a deed in lieu thereof) or the termination of any such ground or
underlying lease, Tenant shall attorn to, and become the tenant of, the
successor to Landlord (i.e., such mortgagee, beneficiary or other successor to
Landlord by foreclosure or deed in lieu thereof, or such ground or underlying
Landlord, as the case may be), at the option of such successor to Landlord;
provided however, in
 

 
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no event shall any such successor to Landlord (i) be liable for any previous act
or omission of Landlord under this Lease except to cure continuing defaults to
the extent it has been provided with written notice thereof and an opportunity
to cure, (ii) be subject to any offset, defense or counterclaim against Landlord
which shall theretofore have accrued to Tenant under this Lease, (iii)  have any
obligation with respect to any security deposit, unless the same shall have been
paid or physically delivered to such successor, or (iv) be bound by any Rent
paid more than one month in advance to Landlord or any prior landlord or owner.
 
Section 17.14                                Attorneys’ Fees
 
In the event any action or proceeding is brought by any party to enforce or
interpret the provisions of this Lease, or if any other action or proceeding is
brought arising out of or relating to this Lease, the prevailing party in such
action or proceeding shall be entitled to recover the reasonable fees of its
attorneys, experts and arbitrators, and other costs of suit.
 
Section 17.15                                Signs
 
(a)           Subject to the terms of this Section 17.15, throughout the Lease
Term, Tenant shall have the exclusive right, at Tenant’s sole expense, to
install and maintain Tenant’s company name on the Exterior Building Parapet Sign
on the Building located in the location depicted on Exhibit J attached hereto
and incorporated herein, so long as Tenant continues to lease at least three (3)
full floors of the Building and occupies at least fifty percent (50%) of the
Premises.
 
(b)           Subject to the terms and conditions of this Section 17.15,
throughout the Lease Term shall the right to install and maintain (i) Tenant’s
company name in the top position on the Project’s pedestrian monument signage,
(ii) Tenant’s pro rata share of the lobby wall signage and Tenant’s company name
on the lobby directory signage in the Building, and (iii) Tenant’s
identification sign in the elevator lobby of the floor on which their main
receptionist is located.  Except as set forth above, Tenant shall not place any
additional signs outside the Premises (or visible from outside the Premises)
without Landlord’s prior written consent, which consent shall not be
unreasonably withheld; provided, however, any such signage shall be subject to
the terms of this Section 17.15.
 
(c)           Tenant’s identification signage on the exterior of the Building,
in the Project Common Areas (including the monument signs) and the Building
Common Areas and Tenant’s other signage outside the Premises (or visible from
outside the Premises) shall be referred to herein, collectively, as “Tenant’s
Signage.”  All aspects of Tenant’s Signage, including, but not limited to,
quality, design, color, style, lighting, size and specifications, as applicable,
shall be (i) consistent with Landlord’s signage policy set forth on Exhibit D
attached hereto, (ii) subject to Landlord’s prior written approval which
Landlord will not unreasonably withhold, condition or delay, (iii) in compliance
with all applicable governmental laws, ordinances, rules, regulations, codes and
approvals, and (iv) the Moffett Towers Multi-Tenant Signage Standards Final
dated 9/19/08 as approved by the City of Sunnyvale, together with any amendments
or supplements thereto.  Tenant shall be responsible, at its sole cost and
expense, for the installation, maintenance, repair and replacement of Tenant’s
Signage.  Upon the expiration or earlier termination of this Lease, Tenant
shall, at Tenant’s sole cost and expense,
 

 
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remove Tenant’s Signage and repair any damage resulting
therefrom.  Notwithstanding anything to the contrary contained in this
Section 17.15, Landlord, at its election, shall have the right to perform any
and all installation, maintenance, repair, replacement and removal of Tenant’s
Signage and to repair any damage resulting therefrom, in which instance Tenant
shall pay to Landlord upon demand the third-party out-of-pocket reasonable cost
of such installation, maintenance, repair, replacement, removal and repair
within thirty (30) days after receipt of an invoice.  Tenant shall be
responsible, at its sole cost and expense, for obtaining all governmental
approvals for Tenant’s Signage, provided that Tenant shall not submit any
applications or requests for governmental approvals without first obtaining
Landlord’s prior written approval thereof (which approval shall not be
unreasonably withheld, conditioned or delayed), and provided further that Tenant
shall provide written notice to Landlord of all hearings and meetings with any
applicable governmental authority regarding Tenant’s applications or requests
for governmental approvals not later than two (2) business days prior
thereto.  Subject to the foregoing, upon request by Tenant from time to time,
Landlord agrees (at no material cost to Landlord that Tenant does not agree in
advance to reimburse) to reasonably cooperate with Tenant in connection with
Tenant’s efforts to obtain all governmental approvals for Tenant’s Signage,
provided that Landlord shall have no obligation (and Tenant shall have no right)
to agree to or to comply with any conditions which may be imposed upon Landlord
or the Building or Lot 1 or the Project in connection with any governmental
approvals for Tenant’s Signage.  Tenant hereby acknowledges and agrees that the
governmental approvals for Tenant’s Signage are not conditions to the validity
of this Lease, and in the event Tenant fails to obtain any such approvals, this
Lease shall continue in full force and effect in accordance with its terms,
except that Tenant shall have no right with respect to Tenant’s Signage which is
not so approved.  The rights contained in this Section 17.15 with respect to
Tenant’s Signage shall be personal to the originally named Tenant herein
(“Original Tenant”) or an Affiliate and may only be exercised by the Original
Tenant or an Affiliate (and not by any other assignee, subtenant or transferee)
if the Original Tenant or an Affiliate then occupies the entire
Premises.  Should the name of Original Tenant be legally changed or should
Tenant’s Signage be assigned to an Affiliate (any such other name referred to
herein as a “New Name”), Tenant, at its sole cost and expense, shall be entitled
to modify Tenant’s name as the same appears on Tenant’s Signage to reflect
Tenant’s New Name, so long as Tenant’s New Name is not an objectionable
name.  As used herein, the term “Objectionable Name” shall mean any name which
relates to an entity which is of a character or reputation, or is associated
with a political orientation or faction, which is inconsistent with the quality
of the Building or Lot 1 or the Project, or which would otherwise reasonably
offend a landlord of similar Buildings in the vicinity of the Building.
 
Section 17.16                                Merger
 
The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, or a termination by Landlord, shall not work a merger, and
shall, at the option of Landlord, terminate all or any existing subtenancies or
may, at the option of Landlord, operate as an assignment to Landlord of any or
all of such subtenancies.
 
Section 17.17                                Quiet Possession
 
Landlord covenants that Tenant, upon timely paying the Rent for the Premises and
timely observing and performing all of the covenants, conditions and provisions
on Tenant’s part to be
 

 
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observed and performed hereunder, shall have quiet possession of the Premises
for the Lease Term, subject to all of the covenants, conditions and provisions
of this Lease.  The foregoing covenant is in lieu of any other covenant express
or implied.
 
Section 17.18                                Easements
 
Landlord reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Landlord deems necessary or desirable,
and to cause the recordation of Parcel Maps and covenants, conditions and
restrictions, so long as such easements, rights, dedications, Maps and
covenants, conditions and restrictions do not unreasonably interfere with
Tenant’s use of or access to the Premises or Tenant’s parking rights granted
hereunder.  Tenant shall sign any of the aforementioned or other documents, and
take such other actions, which are reasonably necessary or appropriate to
accomplish such granting, recordation and subordination of the Lease to same,
upon request of Landlord, and failure to do so within ten (10) business days
after a written request to do so shall constitute a material breach of this
Lease, provided that Landlord shall reimburse Tenant for Tenant’s reasonable
out-of-pocket expenses (including reasonable attorneys’ fees) necessarily
incurred in the performance of Tenant’s obligations under this Section 17.18.
 
Section 17.19                                Authority
 
Each individual executing this Lease on behalf of a corporation, limited
liability company or partnership represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of such entity in
accordance with a duly adopted resolution of the governing group of the entity
empowered to grant such authority, and that this Lease is binding upon said
entity in accordance with its terms.  Each party shall provide the other with a
certified copy of its resolution within thirty (30) days after execution hereof,
but failure to do so shall in no manner (i) be evidence of the absence of
authority or (ii) affect the representation or warranty.
 
Section 17.20                                Force Majeure Delays
 
In any case where either party hereto is required to do any act (other than the
payment of money), and the performance of such act is prevented, delayed or
stopped due to Acts of God or Nature, war, terrorism, civil commotion, fire,
flood or other casualty, labor difficulties, shortages of labor or materials or
equipment, government regulations, delay by government or regulatory agencies
with respect to approval or permit process, unusually severe weather, the time
for performance of such act (whether designated by a fixed date, a fixed time or
a “reasonable time”) shall be deemed to be extended by the period of such
prevention, delay or stoppage.
 
Section 17.21                                Hazardous Materials
 
(a)           Definition of Hazardous Materials and Environmental Laws
 
“Hazardous Materials” means any chemical, substance, petroleum, pollutant,
product, waste or other material of any nature whatsoever (collectively called
“Hazardous Materials”) subject to regulation pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. sections 9601,
et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. section 1801, et
seq.; the Resource Conservation and
 

 
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Recovery Act, 42 U.S.C. section 6901, et seq.; the Toxic Substances Control Act,
15 U.S.C. sections 2601, et seq.; the Clean Air Act, 42 U.S.C. sections 7401 et
seq.; the Clean Water Act, 33 U.S.C. sections 1251, et seq.; the California
Hazardous Waste Control Act, Health and Safety Code sections 25100, et seq.; the
California Hazardous Substances Account Act, Health and Safety Code sections
26300, et seq.; the California Safe Drinking Water and Toxic Enforcement Act,
Health and Safety Code sections 25249.5, et seq.; California Health and Safety
Code sections 25280, et seq. (Underground Storage of Hazardous Substances); the
California Hazardous Waste Management Act, Health and Safety Code sections
25170.1, et seq.; California Health and Safety Code sections 25501. et seq.
(Hazardous Materials Response Plans and Inventory); California Health and Safety
Code sections 25214.9 et seq. (Electronic Waste); or the Porter-Cologne Water
Quality Control Act, California Water Code sections 13000, et seq.; all of the
foregoing as may be amended from time to time; or any other federal, state or
local statute, law, ordinance, resolution, code, rule, regulation, order or
decree regulating, relating to or imposing liability (including, but not limited
to, warning, disclosure, management, storage, disposal, release, response,
removal and remediation costs) or standards of conduct or performance concerning
any Hazardous Material  as now or at any time hereafter may be in effect
(collectively, “Environmental Laws”).
 
(b)           Use of Hazardous Materials
 
Tenant shall not cause or permit any Hazardous Materials to be brought upon,
kept or used in, on or about Lot 1 or the Project by Tenant, its agents,
employees, contractors, licensee, guests, visitors or invitees except as such
substances that are required in the ordinary course of Tenant’s business
conducted on the Premises or are otherwise approved by Landlord.  Landlord shall
not unreasonably withhold, condition or delay such consent so long as Tenant
demonstrates to Landlord’s reasonable satisfaction that such Hazardous Materials
and the quantity thereof are necessary or useful to Tenant’s business and will
be used, kept and stored in a manner that complies with all applicable
Environmental Laws.  Tenant shall, at all times, provide any required warnings
or disclosure, and shall use, keep, store, and handle all such Hazardous
Materials in or about Lot 1 or the Project in compliance with all applicable
Environmental Laws.  Tenant shall not treat or dispose of Hazardous Materials at
Lot 1 or the Project.  Tenant shall properly dispose of Hazardous Materials at
an off-site facility in accordance with Environmental Laws, and shall properly
remove all Hazardous Materials used or brought onto Lot 1 or the Project during
the Lease Term from Lot 1 or the Project prior to the expiration or earlier
termination of the Lease.
 

 
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(c)           Landlord’s Representation and Warranty.  Except as disclosed by
that certain “Phase I Environmental Site Assessment Parcels 1 and 4 1111
Lockheed Martin Way, Sunnyvale, California Project No. 05-364-A dated July 28,
2005” prepared by Iris Environmental on behalf of Landlord’s affiliate, Jay Paul
Company, Landlord represents and warrants to Tenant that as of the Effective
Date of this Lease, to the best of Landlord’s knowledge:  (a) there has been no
release onto or under the Premises, the Building, Lot 1 or the Project of any
Hazardous Material in violation of any Environmental Law, and (b) Landlord has
not received written notice that the Premises, the Building, Lot 1 or the
Project are in violation of any Environmental Law.
 
(d)           Environmental Indemnity.
 
Tenant agrees to indemnify and hold Landlord harmless from any liabilities,
losses, claims, damages, penalties, fines, attorney fees, expert fees, court
costs, remediation costs, investigation costs, or other expenses resulting from
or arising out of a breach of this Section 17.21 or the use, storage, treatment,
transportation, release, presence, generation, or disposal of Hazardous
Materials on, from or about Lot 1 or the Project, and/or subsurface or ground
water, after the Delivery Date from an act or omission of Tenant, its agents,
employees, invitees, vendors or contractors.
 
(e)           Remediation Obligations
 
If the presence of Hazardous Materials on the Premises after the Delivery Date
is a result from an act or omission of Tenant (or Tenant’s successors), its
agents, employees, invitees, vendors, contractors, guests, or visitors and such
Hazardous Materials contaminate Lot 1 or the Project or any water or soil
beneath Lot 1 or the Project, Tenant shall promptly take all action necessary or
appropriate to investigate and remedy that contamination, at its sole cost and
expense, provided that Landlord’s consent to such action shall first be
obtained, which consent shall not be unreasonably withheld, conditioned or
delayed.
 
(f)           Notification
 
Landlord and Tenant each agree to promptly notify the other of (i) any release
of Hazardous Materials in, on or about the Premises, the Building or Lot 1, and
(ii) any communication received from any governmental entity concerning
Hazardous Materials or the violation of Environmental Laws that relate to Lot 1.
 
Section 17.22                                Intentionally Deleted.
 
Section 17.23                                Brokers
 
Landlord and Tenant represent and warrant to each other that they have had no
dealings with any real estate broker or agent in connection with the negotiation
of this Lease, except for the Broker defined in the Basic Terms, and that they
know of no other real estate broker or agent who is entitled to a commission or
finder’s fee in connection with this Lease.  Each party shall indemnify,
protect, defend, and hold harmless the other party against all claims, demands,
losses, liabilities, lawsuits, judgments, and costs and expenses (including
reasonable attorneys’ fees) for any leasing commission, finder’s fee, or
equivalent compensation alleged to be owning on
 

 
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account of the indemnifying party’s dealings with any real estate broker or
agent.  Landlord shall pay a commission to the Broker pursuant to the terms of a
separate written agreement.
 
Section 17.24                                Survival
 
All covenants and obligations arising out of this Lease shall survive the
expiration or earlier termination of this Lease and shall remain outstanding
until satisfied in full.
 
Section 17.25                                Rooftop Communications Equipment
 
(a)           Roof Space.  Landlord agrees to permit Tenant to utilize
sufficient and suitable space on the roof of the Building (“Roof Space”)
throughout the Lease Term and any extensions thereof for the purpose of
installing, using, maintaining or replacing, or cause a carrier, vendor or other
operator selected by Tenant to install, maintain and replace, on the Roof Space
at Tenant’s sole cost and expense, certain telecommunications and other rooftop
equipment (“Equipment”).  Landlord also agrees that Tenant may run cables
(“Cables”) related to the use of such Equipment between the Roof Space and the
Premises.  It shall be a condition precedent to the ability of Tenant to install
such Equipment and/or Cables on the Roof Space that plans and specifications
therefore have received written consent thereto by Landlord, which consent shall
not be unreasonably withheld.  So long as the Equipment and Cables are used for
the sole benefit of Tenant and its assignees, subtenants, guests and invitees in
their operations at the Premises and no third party revenue is derived for such
Equipment and Cables, there shall be no additional monthly rental fees charged
to Tenant for its use of the Roof Space.
 
(b)           Possession; Removal.  The Equipment and Cables shall remain the
property of the Tenant or Tenant’s contractors at all times.  Tenant shall, at
its sole cost and expense, remove such Equipment and Cables upon the expiration
or earlier termination of the Lease and, to the extent reasonably possible,
Tenant shall restore the Roof Space to substantially its condition immediately
preceding installation of the Equipment, excepting ordinary wear and tear, acts
of God, casualties, condemnation, obsolescence, and repairs that are
specifically made the responsibility of Landlord under this Lease.
 
(c)           Access.  Landlord shall allow Tenant reasonable access to the Roof
Space and other areas of the Building so as to facilitate the installation, use
and maintenance of the Equipment and Cables, and the removal of the Equipment
pursuant to the terms of this Section 17.25.
 
(d)           Indemnity.  Tenant shall indemnify and hold Landlord harmless from
and against liability, costs and expenses, including reasonable attorney’s fees,
incurred by Landlord to the extent caused by Tenant’s installation, use and
maintenance of the Equipment and Cables.
 
Section 17.26                                Right of First Offer
 
(a)           Grant.  Subject to the terms of this Section 17.26, Landlord
grants to Tenant during the Right of First Offer Term a continuous right of
first offer (“Right of First Offer”) to lease any space which is available for
lease on the fifth (5th) floor of the Building (“Available Space”).  For the
purposes of this Section 17.26, such space shall not be deemed
 

 
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available for lease, and this Right of First Offer shall not apply, if the space
in question is already leased to a tenant thereof who leases or re-leases such
space pursuant to any right to extend the term of its lease or expand the size
of its premises agreed upon by Landlord and such tenant as of the date of this
Lease (the “Superior Rights”).  Landlord represents and warrants that all such
Superior Rights, if any, are described in Exhibit K to this Lease.
 
(b)           Term.  The term of the Right of First Offer (“Right of First Offer
Term”) shall commence on the Commencement Date and shall terminate on the
Expiration Date or the expiration of any applicable Extended Term.
 
(c)           Covenants of Landlord.  Subject to the conditions precedent
established by subsection (f) below, if at any time during the Right of First
Offer Term Landlord decides to offer any Available Space for lease, Landlord
shall first provide Tenant with a written notice (“Offer Notice”) detailing (i)
the rent at which said Available Space is being offered, (ii) the rentable
square footage and location thereof, (iii) the date the Available Space will
become available and (iv) all other terms upon which Landlord proposes to lease
the Available Space to Tenant including, without limitation, the tenant
improvement allowance and all rent concessions.
 
(d)           Exercise of Tenant’s Right of First Offer.  Subject to the
conditions precedent established by subsection (f) below, Tenant may exercise
Tenant’s Right of First Offer to lease all (but not less than all) of the
Available Space described in the Offer Notice by providing Landlord with written
notice (“Acceptance Notice”) thereof within ten (10) business days of Landlord’s
delivery to Tenant of the Offer Notice.  If Tenant does not exercise its Right
of First Offer within said ten (10) business day period, then (i) Tenant shall,
if Landlord desires to lease less than all of the Available Space, first have a
further right to lease the smaller Available Space under this Right of First
Offer, and (ii) Landlord shall thereafter be free to lease the entirety of the
Available Space to anyone; provided, however, that if Landlord offers the
Available Space at a rental rate which is less than ninety percent (90%) of the
effective rental rate specified in the Offer Notice (taking into account
differences in tenant improvement allowances and free rent periods) for a lease
for the same number of years as is specified in the Offer Notice within ninety
(90) days after the date on which Landlord has delivered the Offer Notice to
Tenant, then Tenant’s First Offer shall again be applicable to Available Space.
 
(e)           Conditions to Right of First Offer.  Notwithstanding anything to
the contrary in this Section 17.26, Landlord shall have no obligation to provide
Tenant with an Offer Notice, and Tenant shall have no right to exercise Tenant’s
Right of First Offer, if:  (i) Tenant is in default beyond all applicable notice
and cure periods either:  (a) at the time Landlord seeks to lease the Available
Space in question, or at the time Tenant seeks to give Landlord an Acceptance
Notice, whichever, is relevant, or (b) upon the date Tenant seeks to take
possession of the Available Space referenced in the Offer Notice, (ii) Tenant
has assigned this Lease or sublet more than fifty percent (50%) of the rentable
space located in the Premises to a party other than an Affiliate, (iii) Tenant
then occupies less than fifty percent (50%) of the Premises or (iv) Tenant has
received more than three (3) notices of default from Landlord during the Term of
this Lease.  Tenant’s Right of First Offer shall be personal to Tenant and
Tenant’s Affiliate and shall not be transferable with any assignment of this
Lease or subletting of the Premises.
 

 
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(f)           Terms for Right of First Offer.  In the event that Tenant
exercises Tenant’s Right of First Offer, Tenant’s occupancy of the Available
Space taken shall be on all of the same terms and conditions described in the
Offer Notice.  In such event, Tenant’s Share due hereunder and the number of
parking spaces available to Tenant shall also be adjusted accordingly.
 
(g)           Amendment to Lease.  Landlord and Tenant hereby agree to execute
an amendment to this Lease (“Lease Amendment”) prior to Tenant’s occupancy of
the Available Space in question.  The Lease Amendment shall specify, among other
things, the Rent, date of occupancy, increase in Tenant’s Share and square
footage of the Available Space taken in connection with Tenant’s exercise of
Tenant’s Right of First Offer.  If Tenant does not execute such a Lease
Amendment within fifteen (15) business days after the date on which it provides
Landlord with the Acceptance Notice, then, at Landlord’s option, Tenant’s rights
hereunder shall be void and terminated, but, otherwise, a valid exercise of
Tenant’s Right of First Offer shall be fully effective, whether or not such
amendment is executed.
 
Section 17.27                                List of Exhibits
 
EXHIBIT A
Real Property Legal Description, Project Site Plan and Premises Floor Plan
EXHIBIT B
Memorandum of Commencement of Lease Term and Schedule of Base Rent
EXHIBIT C
Work Letter Agreement for Tenant Improvements and Interior Specification
Standards
EXHIBIT D
Signage Exhibit
EXHIBIT E
SNDA
EXHIBIT F
Estoppel Certificate
EXHIBIT G
Rules and Regulations
EXHIBIT H
Shipping/Loading Access
EXHIBIT I
Intentionally Deleted
EXHIBIT J
Sign Locations
EXHIBIT K
Superior Rights

 
The registrant agrees to funish to the Securities and Exchange Commission upon
request a copy of any omitted schedule or exhibit.
 
 
LANDLORD AND TENANT EACH HAS CAREFULLY READ AND HAS REVIEWED THIS LEASE AND BEEN
ADVISED BY LEGAL COUNSEL OF ITS OWN CHOOSING AS TO EACH TERM AND PROVISION
CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOWS ITS INFORMED AND
VOLUNTARY CONSENT THERETO.  EACH PARTY HEREBY AGREE THAT, AT THE TIME THIS LEASE
IS EXECUTED, THE TERMS AND CONDITIONS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE
PREMISES.
 
 
Executed at Sunnyvale, California, as of the reference date.
 

 
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(Signatures continued on next page)
 

 
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LANDLORD:
MT SPE, LLC, a Delaware limited liability company
 
By:           Moffett Towers, LLC, a Delaware limited liability company
Its:           Sole Member
 
By:           Moffett Towers Management Inc., a Delaware corporation
Its:           Managing Member
 
By:  /s/ Jay Paul              
Jay Paul, President
ADDRESS:
c/o Jay Paul Company
350 California Street, Suite 1905
San Francisco, CA 94104-1432
TENANT:
RAMBUS INC.,
a Delaware corporation
By:   /s/ Michael Schroeder        
Name:    Michael Schroeder
(Type or Print Name)
 
Title: Vice President,  Human Resources and
Facilities                                                              
ADDRESS:
4440 El Camino Real
Los Altos, CA 94022
Attn:  Director of Global Facilities and Real Estate
(Before Commencement Date)
 
1040 Enterprise Way
Sunnyvale, California 94089
Attn: Director of Global Facilities and Real Estate
(After Commencement Date)

 

 
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