Exhibit 10.25
Office Lease Agreement
By and Between
6200 Stoneridge Mall Road Investors llc,
a Delaware limited liability company
as Landlord
and
Callidus Software Inc.,
a Delaware corporation
as Tenant
Dated March 30, 2010

 

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Table of Contents

                      Page Index of Defined Terms     iv   Basic Lease
Information     v  
1.
  Demise     1  
2.
  Premises     1  
3.
  Term     2  
4.
  Rent     2  
5.
  Utilities and Services     10  
6.
  Late Charge     13  
7.
  Security Deposit     13  
8.
  Possession     16  
9.
  Use of Premises     17  
10.
  Acceptance of Premises     19  
11.
  Surrender     20  
12.
  Alterations and Additions     20  
13.
  Maintenance and Repairs of Premises     22  
14.
  Landlord’s Insurance     23  
15.
  Tenant’s Insurance     23  
16.
  Indemnification     24  
17.
  Subrogation     25  
18.
  Signs     25  
19.
  Free From Liens     27  
20.
  Entry By Landlord     27  
21.
  Destruction and Damage     28  
22.
  Condemnation     30  
23.
  Assignment and Subletting     31  
24.
  Default     35  
25.
  Landlord’s Remedies     37  
26.
  Landlord’s Right to Perform Tenant’s Obligations     39  
27.
  Attorneys’ Fees     39  
28.
  Taxes     40  

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                      Page
29.
  Effect of Conveyance     40  
30.
  Tenant’s Estoppel Certificate     40  
31.
  Subordination     41  
32.
  Environmental Covenants     42  
33.
  Notices     45  
34.
  Waiver     45  
35.
  Holding Over     45  
36.
  Successors and Assigns     45  
37.
  Time     46  
38.
  Brokers     46  
39.
  Limitation of Liability     46  
40.
  Financial Statements     47  
41.
  Rules and Regulations     47  
42.
  Mortgagee Protection     47  
43.
  Parking     47  
44.
  Entire Agreement     49  
45.
  Interest     49  
46.
  Governing Law; Construction     49  
47.
  Representations and Warranties of Tenant     49  
48.
  Name of Building     50  
49.
  Security     51  
50.
  Jury Trial Waiver     51  
51.
  Recordation     51  
52.
  Right to Lease     52  
53.
  Force Majeure     52  
54.
  Renewal Option (With FMV Rent)     52  
55.
  Right of First Offer.     54  
56.
  Termination Option     55  
57.
  Server Room Equipment     56  
58.
  Contingency     57  
59.
  Counterparts     57  
60.
  Acceptance     58  

ii

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Index of Exhibits

     
A
  Diagram of the Premises
 
   
B
  Tenant Improvements Work Letter
 
   
C
  Rules and Regulations
 
   
D
  Form of Estoppel Certificate
 
   
E
  Form of Subordination Non-Disturbance Agreement
 
   
F
  List of IT Equipment

Index of Defined Terms

         
ADA
    18  
Additional Rent
    2  
After Hours HVAC
    11  
Alteration
    20  
Alterations
    20  
Anti-Terrorism Law
    50  
Appraisal Panel
    53  
Base Insurance Expenses
    6  
Base Operating Expenses
    6  
Base Rent
    2  
Base Taxes
    6  
Base Utility Expenses
    6  
Base Year
    6  
Basic Lease Information
    1  
Building
    1  
Casualty Discovery Date
    28  
Chronic delinquency
    36  
Chronic overuse
    36  
Commencement Date
    2  
Common Areas
    1  
Comparison Leases
    54  
Computation Year
    6  
Condemnation
    30  
CPA
    9  
Default
    35  
Electric Service Provider
    11  
Environmental Laws
    42  
Executive Order No. 13224
    50  
Existing Wiring
    20  
Expense Exclusions
    6  
Expense Period
    10  
Expiration Date
    2  

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Extension Notice
    52  
Extension Term
    52  
Force Majeure
    52  
Guarantor
    35  
Hazardous Materials
    42  
Holder
    47  
Insurance Expenses
    4  
IT Equipment
    56  
Landlord Parties
    46  
Landlord’s Agents
    17  
Landlord’s Determination
    53  
Landlord’s Insureds
    23  
Laws
    17  
Lease
    1  
Mold Conditions
    44  
Mold Prevention Practices
    44  
Monument Sign
    25  
Negotiation Period
    53  
Normal Business Hours
    10  
Operating Expenses
    3  
Option
    52  
Parapet Sign
    26  
Parking Areas
    1  
Premises
    1  
Prevailing Market Rate
    54  
Private Restrictions
    17  
Prohibited Person
    50  
Project
    1  
Proportionate Share
    8  
Reduced Electrical Rate
    6  
Rent
    9  
Report Date
    10  
Rules and Regulations
    47  
Signage Criteria
    26  
Successor Landlord
    41  
Superior Lease(s)
    41  
Superior Lessor
    41  
Superior Mortgage(s)
    41  
Superior Mortgagee
    41  
Systems
    3  
Taxes
    5  
Tenant’s Agents
    17  
Tenant’s Determination
    53  
Tenant’s Property
    24  
Term
    2  
Third CPA
    10  

iv

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USA Patriot Act
    50  
Utilities
    5  
Utility Expenses
    5  
Visitors
    48  

v

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Lease Agreement
Basic Lease Information

      Lease Date:  
March 30, 2010
   
 
Landlord:  
6200 Stoneridge Mall Road Investors llc,
a Delaware limited liability company
   
 
Landlord’s Address:  
c/o UBS Realty Investors llc
455 Market Street, Suite 1540
San Francisco, California 94105
Attention: Asset Manager,
                 Pleasanton Corporate Commons
   
 
   
All notices sent to Landlord under this Lease shall be sent to the above
address, with copies to:
   
 
   
Hines
6200 Stoneridge Mall Road, Suite 320
Pleasanton, California 94588
Attention: Property Manager
   
 
Tenant:  
Callidus Software Inc.,
a Delaware corporation
   
 
Tenant’s Contact Person:  
V. Holly Albert
   
 
Tenant’s Address and Telephone Number:  
Prior to the Commencement Date:
     
160 West Santa Clara Street, 13th Floor
San Jose, California 95133
   
 
   
Following the Commencement Date:
     
6200 Stoneridge Mall Road, Suite 500
Pleasanton, California 94588
   
 
Premises Square Footage:  
Approximately Thirty Two Thousand Thirty-Four (32,034) rentable square feet,
including 30,772 rentable square feet located in Suite 500 on the fifth (5th)
floor as well 1,262 rentable square feet located in a server room on the ground
floor.
   
 
Premises Address:  
6200 Stoneridge Mall Road, Suite 500
Pleasanton, California 94588
   
 
Project:  
Pleasanton Corporate Commons, 6200 — 6230 Stoneridge Mall

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Road, Pleasanton, California, containing approximately 595,608 rentable square
feet, together with the land on which the Project is situated and all Common
Areas
   
 
Building:  
6200 Stoneridge Mall Road, Pleasanton, California, containing approximately
148,902 rentable square feet
   
 
Tenant’s Proportionate Share of Project:  
5.38%
   
 
Tenant’s Proportionate Share of Building:  
21.51%
   
 
Length of Term:  
Eighty-four (84) months
   
 
Commencement Date:  
August 1, 2010
   
 
Expiration Date:  
July 31, 2017

                              Base Rent:                     Months   Sq. Ft.  
Monthly Base Rate   Monthly Base Rent
 
  1 - 6     32,034       × $0.00       = $0.00  
 
  7 - 12     32,034       × $1.75       = $56,059.50  
 
  13 - 24     32,034       × $1.80       = $57,661.20  
 
  25 - 36     32,034       × $1.85       = $59,262.90  
 
  37 - 48     32,034       × $1.90       = $60,864.60  
 
  49 - 60     32,034       × $1.95       = $62,466.30  
 
  61 - 72     32,034       × $2.00       = $64,068.00  
 
  73 - 84     32,034       × $2.05       = $65,669.70  

      Prepaid Base Rent:  
Fifty-Six Thousand Fifty-Nine and 50/100 Dollars ($56,059.50)
   
 
Month(s) to which Prepaid Base Rent will be Applied:  
Seventh (7th) month of the Term
   
 
Base Year:  
2010
   
 
Security Deposit:  
Six Hundred Thousand Dollars ($600,000.00)

vii

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      Permitted Use:  
General office and administrative use, including a software lab and customer
training.
   
 
Unreserved Parking Spaces:  
One Hundred Twelve (112) nonexclusive and undesignated parking spaces
   
 
Broker(s):  
Collier’s International (Landlord’s Broker)
Cushman & Wakefield (Tenant’s Broker)

viii

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Office Lease Agreement
     This Office Lease Agreement is made and entered into by and between
Landlord and Tenant on the Lease Date. The defined terms used in this Lease
which are defined in the Basic Lease Information attached to this Lease
Agreement (“Basic Lease Information”) shall have the meaning and definition
given them in the Basic Lease Information. The Basic Lease Information, the
exhibits, the addendum or addenda described in the Basic Lease Information, and
this Lease Agreement are and shall be construed as a single instrument and are
referred to herein as the “Lease.”
1. Demise
     In consideration for the rents and all other charges and payments payable
by Tenant, and for the agreements, terms and conditions to be performed by
Tenant in this Lease, Landlord does hereby lease to Tenant, and Tenant does
hereby hire and take from Landlord, the Premises described below (the
“Premises”), upon the agreements, terms and conditions of this Lease for the
Term hereinafter stated.
2. Premises
     The Premises demised by this Lease are located in that certain building
(the “Building”) specified in the Basic Lease Information, which Building is
located in that certain real estate development (the “Project”) specified in the
Basic Lease Information. The Premises has the address and contains the square
footage specified in the Basic Lease Information; provided, however, that any
statement of square footage set forth in this Lease, or that may have been used
in calculating any of the economic terms hereof, is an approximation which
Landlord and Tenant agree is reasonable and, except as expressly set forth in
Paragraphs 4(d)(iii), no economic terms based thereon shall be subject to
revision whether or not the actual square footage is more or less. The location
and dimensions of the Premises are depicted on Exhibit A, which is attached
hereto and incorporated herein by this reference. Tenant shall have the
non-exclusive right (in common with the other tenants, Landlord and any other
person granted use by Landlord) to use the Common Areas (as hereinafter
defined), except that, with respect to the Project’s parking areas (the “Parking
Areas”), Tenant shall have only the rights, if any, set forth in Paragraph 43(b)
below. For purposes of this Lease, the term “Common Areas” shall mean all areas
and facilities outside the Premises and within the exterior boundary line of the
Project that are, from time to time, provided and designated by Landlord for the
non-exclusive use of Landlord, Tenant and other tenants of the Project and their
respective employees, guests and invitees.
     Landlord has the right, in its sole discretion, from time to time, to:
(a) make changes to the Common Areas, the Building and/or the Project,
including, without limitation, changes in the location, size, shape and number
of driveways, entrances, parking spaces, Parking Areas, ingress, egress,
direction of driveways, entrances, hallways, corridors, lobby areas and
walkways; (b) close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available; (c) add
additional buildings and improvements to the Common Areas or remove existing
buildings or improvements therefrom; (d) use the Common Areas while engaged in
making additional improvements, repairs or alterations to the Project or any
portion thereof; and (e) do and perform any other acts, alter or expand, or make
any other

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changes in, to or with respect to the Common Areas, the Building and/or the
Project as Landlord may, in its sole discretion, deem to be appropriate. Without
limiting the foregoing, Landlord reserves the right from time to time to
install, use, maintain, repair, relocate and replace pipes, ducts, conduits,
wires, and appurtenant meters and equipment for service to the Premises or to
other parts of the Building which are above the ceiling surfaces, below the
floor surfaces, within the walls and in the central core areas of the Building
which are located within the Premises or located elsewhere in the Building. In
connection with any of the foregoing activities of Landlord, Landlord shall not
materially and adversely interfere with Tenant’s access to and use of the
Premises.
     No rights to any view or to light or air over any property, whether
belonging to Landlord or any other person, are granted to Tenant by this Lease.
If at any time any windows of the Premises are temporarily darkened or the light
or view therefrom is obstructed, the same shall be without liability to Landlord
and without any reduction or diminution of Tenant’s obligations under this
Lease.
3. Term
     The term of this Lease (the “Term”) shall commence on August 1, 2010 (the
“Commencement Date”) and shall terminate on July 31, 2017 (the “Expiration
Date”), subject to possible extension or early termination by Tenant as set
forth in Paragraphs 54 and 56, respectively.
4. Rent
     (a) Base Rent. Tenant shall pay to Landlord, in advance on the first day of
each month, without further notice or demand and without abatement, offset,
rebate, credit or deduction for any reason whatsoever, the monthly installments
of rent specified in the Basic Lease Information (the “Base Rent”).
     Upon execution of this Lease, Tenant shall pay to Landlord the Security
Deposit and the Prepaid Base Rent specified in the Basic Lease Information to be
applied toward Base Rent for the month of the Term specified in the Basic Lease
Information.
     As used in this Lease, the term “Additional Rent” shall mean all sums of
money, other than Base Rent, that shall become due from and payable by Tenant
pursuant to this Lease.
     (b) Additional Rent.
          (i) During the Term, in addition to the Base Rent, Tenant shall pay to
Landlord as Additional Rent, in accordance with this Paragraph 4, (A) Tenant’s
Proportionate Share(s) of the total dollar increase, if any, in Operating
Expenses (as defined below) attributable to each Computation Year (as defined
below) over Base Operating Expenses (as defined below), (B) Tenant’s
Proportionate Share(s) of the total dollar increase, if any, in Insurance
Expenses (as defined below) attributable to each Computation Year over Base
Insurance Expenses (as defined below), (C) Tenant’s Proportionate Share(s) of
the total dollar increase, if any, in Utility Expenses (as defined below)
attributable to each Computation Year over Base Utility Expenses (as defined
below), and (D) Tenant’s Proportionate Share(s) of the total dollar increase, if
any, in

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Taxes (as defined below) attributable to each Computation Year over Base Taxes
(as defined below).
          (ii) As used in this Lease, the following terms shall have the
meanings specified:
               (A) “Operating Expenses” means the total costs and expenses paid
or incurred by Landlord in connection with the ownership, operation,
maintenance, management and repair of the Premises, the Building and/or the
Project or any part thereof, including, without limitation, all the following
items:
                    (1) Common Area Operating Expenses. All costs to operate,
maintain, repair, replace, supervise, insure and administer the Common Areas,
including, without limitation, any Parking Areas owned by Landlord for the use
of tenants, and further including, without limitation, supplies, materials,
labor and equipment used in or related to the operation and maintenance of the
Common Areas, including Parking Areas (including, without limitation, all costs
of resurfacing and restriping Parking Areas), signs and directories on the
Building and/or the Project, landscaping (including, without limitation,
maintenance contracts and fees payable to landscaping consultants), amenities,
sprinkler systems, sidewalks, walkways, driveways, curbs, lighting systems and
security services, if any, provided by Landlord for the Common Areas, and any
charges, assessments, costs or fees levied by any association or entity of which
the Project or any part thereof is a member or to which the Project or any part
thereof is subject.
                    (2) Parking Charges; Public Transportation Expenses. Any
parking charges or other costs levied, assessed or imposed by, or at the
direction of, or resulting from statutes or regulations, or interpretations
thereof, promulgated by any governmental authority or insurer in connection with
the use or occupancy of the Building or the Project, and the cost of maintaining
any public transit system, vanpool, or other public or semi-public
transportation imposed upon Landlord’s ownership and operation of the Building
and/or the Project.
                    (3) Maintenance and Repair Costs. All costs to maintain,
repair, and replace the Premises, the Building and/or the Project or any part
thereof and the personal property used in conjunction therewith, including
insurance deductibles (subject to the limitations on earthquake deductibles as
set forth in Paragraph 4(b)(ii)(B) below) and, without limitation, (a) all costs
paid under maintenance, management and service agreements such as contracts for
janitorial, security and refuse removal, (b) all costs to maintain, repair and
replace the roof coverings of the Building or the Project or any part thereof,
(c) all costs to maintain, repair and replace the heating, ventilating, air
conditioning, plumbing, sewer, drainage, electrical, fire protection, escalator,
elevator, life safety and security systems and other mechanical, electrical and
communications systems and equipment serving the Premises, the Building and/or
the Project or any part thereof (collectively, the “Systems”), (d) the cost of
all cleaning and janitorial services and supplies, the cost of window glass
replacement and repair, and (e) the cost of maintenance, depreciation and
replacement of machinery, tools and equipment (if owned by Landlord) and for
rental paid for such machinery, tools and equipment (if rented) used in
connection with the operation or maintenance of the Building.

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                    (4) Life Safety and Security Costs. All costs to install,
maintain, repair and replace all life safety systems, including, without
limitation, (a) all fire alarm systems, serving the Premises, the Building
and/or the Project or any part thereof (including all maintenance contracts and
fees payable to life safety consultants) whether such systems are or shall be
required by Landlord’s insurance carriers, Laws (as hereinafter defined) or
otherwise, and (b) all costs of security and security systems at the Project,
including, without limitation; (i) wages and salaries (including management
fees) of all employees engaged in the security of the Project; (ii) all
supplies, materials, equipment, and devices used in the security of the Project,
and any upgrades thereto; and (iii) all service or maintenance contracts with
independent contractors for Project security, including, without limitation,
alarm service personnel, security guards, watchmen, and any other security
personnel.
                    (5) Management and Administration. All costs for management
and administration of the Premises, the Building and/or the Project or any part
thereof, including, without limitation, a property management fee not exceed a
commercially reasonable amount (and, in any event, not to exceed four percent
(4%) of the Project’s gross receipts), accounting, auditing, billing, postage,
salaries and benefits for all employees and contractors engaged in the
management, operation, maintenance, repair and protection of the Building and
the Project, whether located on the Project or off-site, payroll taxes and legal
and accounting costs, fees for licenses and permits related to the ownership and
operation of the Project, and office rent for the Building and/or Project
management office or the rental value of such office if it is located within the
Building and/or Project.
                    (6) Capital Improvements. Amounts paid for capital
improvements or other capital costs incurred in connection with the Project
(a) which are intended to effect economies in the operation or maintenance of
the Project, or any portion thereof, but only to the extent of the cost savings
actually realized, (b) that are required to comply with present or anticipated
conservation programs, (c) which are replacements or modifications of
nonstructural items located in the Common Areas required to keep the Common
Areas in good order or condition, as set forth in this Paragraph 4(b)(ii)(A),
(d) that are required under any governmental law or regulation, or (e) which
Landlord determines, in its sole discretion are necessary to enhance Building
security and improve security measures at the Project; provided, however, that
in all such cases, such capital improvements shall be amortized over the useful
life of such item, as determined by industry standard commercial real estate
accounting practices at an interest rate equal to Landlord’s then cost of funds.
     Notwithstanding anything in this Paragraph 4(b) to the contrary, Insurance
Expenses, Utility Expenses and Taxes shall not be deemed to constitute
“Operating Expenses” for purposes of this Paragraph 4(b)(ii)(A).
               (B) “Insurance Expenses” means the total costs and expenses paid
or incurred by Landlord in connection with the obtaining of insurance on the
Premises, the Building and/or the Project or any part thereof or interest
therein, including, without limitation, premiums for “all risk” fire and
extended coverage insurance, commercial general liability insurance, rent loss
or abatement insurance, earthquake insurance, flood or surface water coverage,
and other insurance as Landlord deems necessary in its sole discretion, and any
deductibles paid under policies of

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any such insurance; provided, however, that with respect to earthquake insurance
deductibles, to the extent any such earthquake damage related to items which are
capital items (the normal replacement of which would be capitalized under
generally accepted commercial real estate accounting practices) then such
deductible shall be allocated among such capital and non-capital items and the
pro rata share of the deductible payable by tenant shall be limited to the costs
of the damage which are allocable to the remainder of the Term (including any
renewal term) based upon the costs of the non-capital items and the amortization
of the capital items over their useful life, as determined by generally accepted
commercial real estate accounting practices. Additionally, with respect to any
particular casualty event affecting the Project, in no event shall Tenant’s
Proportionate Share of any individual insurance deductible exceed Thirty Two
Thousand Dollars ($32,000.00). The foregoing shall not be deemed an agreement by
Landlord to carry any particular insurance relating to the Premises, Building,
or Project.
               (C) “Utility Expenses” means the cost of all electricity, water,
gas, sewers, oil, carbon reduction credits, and other utilities (collectively,
“Utilities”), including any surcharges imposed by the service provider or
governmental authority, serving the Premises, the Building and the Project or
any part thereof that are not separately metered to Tenant or any other tenant,
and any amounts, taxes, charges, surcharges, assessments or impositions levied,
assessed or imposed upon the Premises, the Building or the Project or any part
thereof, or upon Tenant’s use and occupancy thereof, as a result of any
rationing of Utility services or restriction on Utility use affecting the
Premises, the Building and/or the Project, as contemplated in Paragraph 5 below.
               (D) “Taxes” means all real estate taxes and assessments, which
shall include any form of tax, assessment (including any special or general
assessments and any assessments or charges for Utilities or similar purposes
included within any tax bill for the Building or the Project or any part
thereof, including, without limitation, entitlement fees, allocation unit fees
and/or any similar fees or charges), fee, license fee, business license fee,
levy, penalty (if a result of Tenant’s delinquency), sales tax, rent tax,
occupancy tax or other tax (other than net income, estate, succession,
inheritance, transfer or franchise taxes), imposed by any authority having the
direct or indirect power to tax, or by any city, county, state or federal
government or any improvement or other district or division thereof, whether
such tax is determined by the area of the Premises, the Building and/or the
Project or any part thereof, or the Rent and other sums payable hereunder by
Tenant or by other tenants, including, but not limited to, (i) any gross income
or excise tax levied by any of the foregoing authorities, with respect to
receipt of Rent and/or other sums due under this Lease; (ii) upon any legal or
equitable interest of Landlord in the Premises, the Building and/or the Project
or any part thereof, (iii) upon this transaction or any document to which Tenant
is a party creating or transferring any interest in the Premises, the Building
and/or the Project; (iv) levied or assessed in lieu of, in substitution for, or
in addition to, existing or additional taxes against the Premises, the Building
and/or the Project, whether or not now customary or within the contemplation of
the parties; or surcharged against the Parking Areas. Tenant and Landlord
acknowledge that Proposition 13 was adopted by the voters of the State of
California in the June, 1978 election and that assessments, taxes, fees, levies
and charges may be imposed by governmental agencies for such purposes as fire
protection, street, sidewalk, road, utility construction and maintenance, refuse
removal and for other governmental services which may formerly have been
provided without charge to property owners or occupants. It is the intention of
the parties that all new and increased assessments, taxes, fees, levies and
charges due to any cause whatsoever are to be included within the definition of
real property taxes for

5

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purposes of this Lease. “Taxes” shall also include reasonable legal and
consultants’ fees, costs and disbursements incurred in connection with
proceedings to contest, determine or reduce taxes, Landlord specifically
reserving the right, but not the obligation, to contest by appropriate legal
proceedings the amount or validity of any taxes.
               (E) “Base Year” shall mean the calendar year specified in the
Basic Lease Information.
               (F) “Base Operating Expenses” shall mean the amount of Operating
Expenses for the Base Year.
               (G) “Base Insurance Expenses” shall mean the amount of Insurance
Expenses for the Base Year.
               (H) “Base Taxes” shall mean the amount of Taxes for the Base
Year.
               (I) “Base Utility Expenses” shall mean the amount of Utility
Expenses for the Base Year. Notwithstanding anything to the contrary contained
in this Lease, Base Utility Expenses shall not include increases in utility
costs due to extraordinary circumstances, including, without limitation,
conservation, bond and/or debt repayment surcharges, charges of a one-time
nature, boycotts, strikes, embargoes or other events resulting in shortages. In
addition, in the event that, in any Computation Year after the Base Year,
Landlord obtains a decrease in the unit cost of electricity being provided to
the Building through its negotiations with utility providers or otherwise
(“Reduced Electrical Rate”), Landlord shall have the right to revise the
electrical cost component of the Utility Expenses for the Base Year to be equal
to the amount such electrical cost component would have been had the unit cost
of electricity during the Base Year been equal to the Reduced Electrical Rate
unless the reduction is a short term reduction and not a permanent reduction.
               (J) “Computation Year” shall mean each twelve (12) consecutive
month period commencing January 1 of each year during the Term following the
Base Year, provided that Landlord, upon notice to Tenant, may change the
Computation Year from time to time to any other twelve (12) consecutive month
period, and, in the event of any such change, Tenant’s Proportionate Share(s) of
Operating Expenses over Base Operating Expenses, of Insurance Expenses over Base
Insurance Expenses, of Utility Expenses over Base Utility Expenses, and of Taxes
over Base Taxes shall be equitably adjusted for the Computation Years involved
in any such change.
     (c) Exclusions from Expenses. Notwithstanding anything to the contrary
contained in Paragraph 4(b) above, “Operating Expenses” and “Additional Rent”
shall not include, and Tenant shall not have any obligation to pay for, the
following (the “Expense Exclusions”):
          (i) Leasing commissions, attorneys’ fees, costs, disbursements, and
other expenses incurred in connection with negotiations or disputes with
tenants, or in connection with leasing, renovating, or improving space for
tenants or other occupants or prospective tenants or other occupants of the
Building or Project.

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          (ii) The cost of any service sold to any tenant (including Tenant) or
other occupant for which Landlord is actually reimbursed as an additional charge
or rental over and above the basic rent and escalations payable under the lease
with that tenant.
          (iii) Any depreciation on the Building or Project.
          (iv) Expenses in connection with services or other benefits of a type
that are not provided to Tenant but which are provided to and actually paid for
by another tenant or occupant of the Building or Project.
          (v) Costs incurred due to Landlord’s intentional violation of any
terms or conditions of this Lease or any other lease relating to the Building or
Project.
          (vi) All interest, loan fees, and other carrying costs related to any
mortgage or deed of trust encumbering the Project, and all rental and other
amounts payable due under any ground affecting the Project.
          (vii) Any compensation paid to clerks, attendants, or other persons in
commercial concessions operated by Landlord.
          (viii) Subject to the provisions of Paragraphs 21 and 22 below, any
costs of maintenance or repairs resulting from a casualty or condemnation (other
than insurance deductibles which shall be governed by Paragraph 4(b)(ii) above;
          (ix) Costs for sculpture, paintings, or other objects of art (nor
insurance thereon or extraordinary security in connection therewith).
          (x) Wages, salaries, or other compensation paid to any executive
employees above the grade of senior property manager.
          (xi) The cost of containing, removing, or otherwise remediating any
contamination of the Property (including the underlying land and ground water)
by any toxic or hazardous materials (including, without limitation, asbestos and
“PCBs”) where such contamination existed prior to the date of this Lease.
     (d) Payment of Additional Rent.
          (i) Within ninety (90) days of the end of the Base Year and each
Computation Year or as soon thereafter as practicable, Landlord shall give to
Tenant notice of Landlord’s estimate of the total amounts that will be payable
by Tenant under Paragraph 4(b) for the following Computation Year, and Tenant
shall pay such estimated Additional Rent on a monthly basis, in advance, on the
first day of each month. Tenant shall continue to make said monthly payments
until notified by Landlord of a change therein. If at any time or times Landlord
determines that the amounts payable under Paragraph 4(b) for the current
Computation Year will vary from Landlord’s estimate given to Tenant, Landlord,
by notice to Tenant, may revise the estimate for such Computation Year, and
subsequent payments by Tenant for such Computation Year shall be based upon such
revised estimate. By April 1 of each calendar year following the initial
Computation Year, Landlord shall endeavor to provide to Tenant a statement
showing the actual

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Additional Rent due to Landlord for the prior Computation Year. If the total of
the monthly payments of Additional Rent that Tenant has made for the prior
Computation Year is less than the actual Additional Rent chargeable to Tenant
for such prior Computation Year, then Tenant shall pay the difference in a lump
sum within thirty (30) days after receipt of such statement from Landlord. Any
overpayment by Tenant of Additional Rent for the prior Computation Year shall,
at Landlord’s option, be either credited towards the Additional Rent next due or
returned to Tenant in a lump sum payment within thirty (30) days after delivery
of such statement.
          (ii) Landlord’s then-current annual operating and capital budgets for
the Building and the Project or the pertinent part thereof shall be used for
purposes of calculating Tenant’s monthly payment of estimated Additional Rent
for the current year, subject to adjustment as provided above. Landlord shall
make the final determination of Additional Rent for the year in which this Lease
terminates as soon as possible after termination of such year. Even though the
Term has expired and Tenant has vacated the Premises, with respect to the year
in which this Lease expires or terminates, Tenant shall remain liable for
payment of any amount due to Landlord in excess of the estimated Additional Rent
previously paid by Tenant, and, conversely, Landlord shall promptly return to
Tenant any overpayment. Failure of Landlord to submit statements as called for
herein shall not be deemed a waiver of Tenant’s obligation to pay Additional
Rent as herein provided.
          (iii) With respect to Operating Expenses, Insurance Expenses, Utility
Expenses or Taxes which Landlord allocates to the Building, Tenant’s
“Proportionate Share” shall be the percentage set forth in the Basic Lease
Information as Tenant’s Proportionate Share of the Building, as adjusted by
Landlord from time to time for changes in the physical size of the Premises or
the Building, whether such changes in size are due to an addition to or a sale
or conveyance of a portion of the Building or otherwise. With respect to
Operating Expenses, Insurance Expenses, Utility Expenses or Taxes which Landlord
allocates to the Project as a whole or to only a portion of the Project,
Tenant’s “Proportionate Share” shall be, with respect to Operating Expenses,
Insurance Expenses, Utility Expenses or Taxes which Landlord allocates to the
Project as a whole, the percentage set forth in the Basic Lease Information as
Tenant’s Proportionate Share of the Project and, with respect to Operating
Expenses, Insurance Expenses, Utility Expenses or Taxes which Landlord allocates
to only a portion of the Project, a percentage calculated by Landlord from time
to time in its reasonable discretion and furnished to Tenant in writing, in
either case as adjusted by Landlord from time to time for changes in the
physical size of the Premises or the Project, whether such changes in size are
due to an addition to or a sale or conveyance of a portion of the Project or
otherwise. Notwithstanding the foregoing, Landlord may equitably adjust Tenant’s
Proportionate Share(s) for all or part of any item of expense or cost
reimbursable by Tenant that relates to a repair, replacement, or service that
benefits only the Premises or only a portion of the Building and/or the Project
or that varies with the occupancy of the Building and/or the Project. Without
limiting the generality of the foregoing, Tenant understands and agrees that
Landlord shall have the right to adjust Tenant’s Proportionate Share(s) of any
Utility Expenses based upon Tenant’s use of the Utilities or similar services as
reasonably estimated and determined by Landlord based upon factors such as size
of the Premises and intensity of use of such Utilities by Tenant such that
Tenant shall pay the portion of such charges reasonably consistent with Tenant’s
use of such Utilities and similar services. If Tenant disputes any such estimate
or determination of Utility Expenses, then Tenant shall either pay the estimated
amount or, with the prior written approval of Landlord, which approval may be

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given or withheld in Landlord’s sole and absolute discretion, cause the Premises
to be separately metered at Tenant’s sole expense.
          (iv) In the event the average occupancy level of the Building or the
Project for the Base Year and/or any subsequent Computation Year is not
ninety-five percent (95%) or more of full occupancy, then the Operating Expenses
for such year shall be apportioned among the tenants by the Landlord to reflect
those costs which would have occurred had the Building or the Project, as
applicable, been ninety-five percent (95%) occupied during such year.
          (v) In the event that the Commencement Date shall be a day other than
the first day of a Computation Year or the Expiration Date or other termination
of this Lease shall be a day other than the last day of a Computation Year, the
amounts payable by Tenant pursuant to Paragraph 4(b) above with respect to the
year in which such Commencement Date or Expiration Date (or other termination of
this Lease) occurs will be prorated on the basis on which the number of days of
the Term included in such year bears to three hundred sixty-five (365).
          (vi) Landlord shall have no obligation to return, rebate or credit to
Tenant any refund, rebate, or return of Operating Expenses received by Landlord
after the date which is eighteen (18) months after the Expiration Date of this
Lease.
     (e) General Payment Terms. The Base Rent, Additional Rent and all other
sums payable by Tenant to Landlord hereunder, including, without limitation, any
late charges assessed pursuant to Paragraph 6 below and any interest assessed
pursuant to Paragraph 45 below, are referred to as the “Rent.” All Rent shall be
paid in lawful money of the United States of America and through a domestic
branch of a United States financial institution. Checks are to be made payable
to “6200 Stoneridge Mall Road Investors llc” and shall be mailed to: Department
33149, P.O. Box 39000, San Francisco, California 94139-3149 or to such other
person or place as Landlord may, from time to time, designate to Tenant in
writing. The Rent for any fractional part of a calendar month at the
commencement or termination of the Term shall be a prorated amount of the Rent
for a full calendar month based upon a thirty (30) day month.
     (f) Statements Binding. Every statement given by Landlord pursuant to
Paragraph 4(a) above shall be conclusive and binding upon Tenant unless
(i) within ninety (90) days after the receipt of such statement Tenant shall
notify Landlord that it disputes the correctness thereof, specifying the
particular respects in which the statement is claimed to be incorrect, and
(ii) if such dispute shall not have been settled by agreement, Tenant shall
submit the dispute to arbitration within ninety (90) days after receipt of the
statement. Pending the determination of such dispute by agreement or arbitration
as aforesaid, Tenant shall, within ten (10) days after receipt of such
statement, pay Additional Rent in accordance with Landlord’s statement and such
payment shall be without prejudice to Tenant’s position. If the dispute shall be
determined in Tenant’s favor, Landlord shall forthwith pay Tenant the amount of
Tenant’s overpayment of Additional Rent resulting from compliance with
Landlord’s statement.
     (g) Audit Rights. Provided Tenant notifies Landlord in accordance with the
terms of Paragraph 4(f) above that Tenant disputes a statement received from
Landlord, Tenant or its CPA (as defined below) shall have the right, at Tenant’s
sole cost and expense, provided Tenant utilizes a Certified Public Accountant
(the “CPA”) compensated solely on an hourly basis, upon

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at least thirty (30) days’ prior notice to Landlord at any time during regular
business hours, to audit, review and photocopy Landlord’s records pertaining to
Operating Expenses for the immediately previous calendar year only. Tenant shall
complete the audit and present any disputed charges to Landlord, in writing,
within six months of receipt of Landlord’s statement pursuant to Paragraph 4(c)
above. If, following Landlord’s receipt of the audit and any disputed charges
(the “Report Date”), Landlord disputes the findings contained therein, and
Landlord and Tenant are not able to resolve their differences within thirty
(30) days following the Report Date, the dispute shall be resolved by binding
arbitration as follows: Landlord and Tenant shall each designate an independent
certified public accountant, which shall in turn jointly select a third
independent Certified Public Accountant (the “Third CPA”). The Third CPA, within
thirty (30) days of selection, shall, at Tenant’s sole expense, audit the
relevant records and certify the proper amount within. That certification shall
be final and conclusive. If the Third CPA determines that the amount of
Operating Expenses billed to Tenant was incorrect, the appropriate party shall
pay to the other party the deficiency or overpayment, as applicable, within
thirty (30) days following delivery of the Third Party CPA’s decision, without
interest. If the Third CPA determines that the actual amount of Operating
Expenses paid by Tenant during the period covered by such statement (“Expense
Period”) exceeds the amount properly payable by Tenant hereunder during such
Expense Period by an amount greater than five percent (5%) of the actual
Operating Expenses properly chargeable to Tenant during such Expense Period,
then Landlord shall pay for the cost of the CPA and the Third CPA. In all other
cases, Tenant shall pay for the cost of the Third CPA. Tenant agrees to keep all
information thereby obtained by Tenant confidential and to obtain the agreement
of its CPA and Third CPA to keep all such information confidential. Tenant shall
provide a copy of such CPA agreements to Landlord promptly upon request.
5. Utilities and Services
     (a) From 7:00 a.m. to 6:00 p.m. on weekdays (“Normal Business Hours”
(excluding legal holidays)), Landlord shall furnish to the Premises electricity
for lighting and operation of low-power usage office machines, water, heat and
air conditioning, and elevator service. During all other hours, Landlord shall
furnish such service except for heat and air conditioning. Landlord shall
provide janitorial services for the Premises each day on weekdays (excluding
legal holidays) in a manner determined reasonably necessary by Landlord for a
Class A building standard. Tenant shall separately arrange with, and pay
directly to, the applicable local public authorities or utilities, as the case
may be, for the furnishing, installation and maintenance of all telephone
services and equipment as may be required by Tenant in the use of the Premises.
Landlord shall not be liable for any damages resulting from interruption of, or
Tenant’s inability to receive such service, and any such inability shall not
relieve Tenant of any of its obligations under this Lease. If at any time during
the Term Landlord shall determine that installation of a separate electrical
meter for equipment or systems located within the Premises is necessary or
desirable as a result of Tenant’s excessive electrical usage, then Tenant shall
pay the cost of installing and maintaining such meter and the cost of Tenant’s
electrical usage as measured by such meter. Tenant acknowledges that certain
equipment installed in the server room located on the ground floor portion of
Premises is separately metered and that Tenant shall pay the cost of Tenant’s
electrical usage as measured by such meter; provided, however that nothing
contained herein shall be interpreted to prohibit or limit Tenant’s ability to
make use of the non-separately

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metered circuits for the operation of low-power usage office machines consistent
with general office usage.
     (b) If requested by Tenant, Landlord shall furnish heat and air
conditioning at times other than Normal Business Hours (“After Hours HVAC”) and
Landlord’s standard hourly charge for services shall be paid by Tenant as
Additional Rent, within thirty (30) days following invoice. As of the Lease
Date, Landlord’s standard hourly charge for After Hours HVAC is Twenty-Five
Dollars ($25.00) per one-half (1/2) floor. Landlord’s standard charge for After
Hours HVAC shall be based on Landlord’s actual direct utility costs, plus
Landlord’s other direct costs, including a reasonable depreciation factor or
replacement reserve for the system on account of said additional hours of
operation so as to reimburse Landlord for the actual cost to Landlord to supply
the service plus a reasonable reserve for depreciation or replacement of the
HVAC equipment, but without a profit to Landlord.
     (c) Without limiting the terms of Paragraph 5(a) above, Tenant acknowledges
that Landlord has contracted with Pacific Gas & Electric Company to provide
electricity for the Building, and that Landlord reserves the right to change the
provider of such service at any time and from time to time in Landlord’s sole
discretion (any such provider being referred to herein as the “Electric Service
Provider”). Tenant shall obtain and accept electrical service for the Premises
only from and through Landlord, in the manner and to the extent expressly
provided in this Lease, at all times during the Term, and Tenant shall have no
right (and hereby waives any right Tenant may otherwise have) (i) to contract
with or otherwise obtain any electrical service for or with respect to the
Premises or Tenant’s operations therein from any provider of electrical service
other than the Electric Service Provider, or (ii) to enter into any separate or
direct contract or other similar arrangement with the Electric Service Provider
for the provision of electrical service to Tenant at the Premises. Tenant shall
cooperate with Landlord and the Electric Service Provider at all times to
facilitate the delivery of electrical service to Tenant at the Premises and to
the Building, including, without limitation, allowing Landlord and the Electric
Service Provider, and their respective agents and contractors, (A) to install,
repair, replace, improve and remove and any and all electric lines, feeders,
risers, junction boxes, wiring, and other electrical equipment, machinery and
facilities now or hereafter located within the Building or the Premises for the
purpose of providing electrical service to or within the Premises or the
Building, and (B) reasonable access for the purpose of maintaining, repairing,
replacing or upgrading such electrical service from time to time. Tenant shall
provide such information and specifications regarding Tenant’s use or projected
use of electricity at the Premises as shall be required from time to time by
Landlord or the Electric Service Provider to efficiently provide electrical
service to the Premises or the Building. In no event shall Landlord be liable or
responsible for any loss, damage, expense or liability, including, without
limitation, loss of business or any consequential damages, arising from any
failure or inadequacy of the electrical service being provided to the Premises
or the Building, whether resulting from any change, failure, interference,
disruption, or defect in the supply or character of the electrical service
furnished to the Premises or the Building, or arising from the partial or total
unavailability of electrical service to the Premises or the Building, from any
cause whatsoever, or otherwise, nor shall any such failure, inadequacy, change,
interference, disruption, defect or unavailability constitute an actual or
constructive eviction of Tenant, or entitle Tenant to any abatement or
diminution of Rent or otherwise relieve Tenant from any of its obligations under
this Lease.

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     (d) Tenant acknowledges that the Premises, the Building and/or the Project
may become subject to the rationing of Utility services or restrictions on
Utility use as required by a public utility company, governmental agency or
other similar entity having jurisdiction thereof. Tenant acknowledges and agrees
that its tenancy and occupancy hereunder shall be subject to such rationing or
restrictions as may be imposed upon Landlord, Tenant, the Premises, the Building
and/or the Project, and Tenant shall in no event be excused or relieved from any
covenant or obligation to be kept or performed by Tenant by reason of any such
rationing or restrictions. Tenant agrees to comply with reasonable energy
conservation and carbon reduction programs implemented by Landlord by reason of
rationing, restrictions or Laws.
     (e) Unless caused by the gross negligence or willful misconduct of
Landlord, Landlord shall not be liable for any loss, injury or damage to
property caused by or resulting from any variation, interruption, or failure of
Utilities due to any cause whatsoever, or from failure to make any repairs or
perform any maintenance. No temporary interruption or failure of such services
incident to the making of repairs, alterations, improvements, or due to
accident, strike, or conditions or other events shall be deemed an eviction of
Tenant or relieve Tenant from any of its obligations hereunder. Unless caused by
the sole gross negligence or willful misconduct of Landlord, in no event shall
Landlord be liable to Tenant for any damage to the Premises or for any loss,
damage or injury to any property therein or thereon occasioned by bursting,
rupture, leakage or overflow of any plumbing or other pipes (including, without
limitation, water, steam, and/or refrigerant lines), sprinklers, tanks, drains,
drinking fountains or washstands, or other similar cause in, above, upon or
about the Premises, the Building, or the Project.
     (f) Landlord makes no representation with respect to the adequacy or
fitness of the air-conditioning or ventilation equipment in the Building to
maintain temperatures which may be required for, or because of, any equipment of
Tenant, other than normal fractional horsepower office equipment, or occupancy
of the Premises by more than one person per 200 rentable square feet. Landlord
shall have no liability for loss or damage in connection therewith. Tenant shall
not, without Landlord’s prior written consent, use heat-generating machines,
machines other than normal fractional horsepower office machines, equipment or
lighting other than Building-standard lights in the Premises, which may affect
the temperature otherwise maintained by the air conditioning system or increase
the water normally furnished for the Premises by Landlord pursuant to the terms
of this Paragraph 5. Landlord shall have the right to condition any such consent
on the installation of supplementary air conditioning units or other facilities
in the Premises, including supplementary or additional metering devices, and the
cost thereof, including the cost of installation, operation and maintenance,
increased wear and tear on existing equipment and other similar charges, shall
be paid by Tenant to Landlord upon billing by Landlord. Tenant shall not use
water or heat or air conditioning in excess of that normally supplied by
Landlord. Tenant’s consumption of electricity shall not exceed the Building’s
capacity considering all other tenants of the Building.
     (g) Notwithstanding anything herein to the contrary, if the Premises is
made untenantable as a result of an interruption in electrical service as
provided by Landlord pursuant to Paragraph 5(a) above, then (i) Landlord shall
use commercially reasonable good faith efforts to restore the same as soon as is
reasonably possible, (ii) if, despite such commercially reasonable good faith
efforts by Landlord, such interruption persists for a period in excess of five
(5) consecutive business days, then Tenant, as its sole remedy, shall be
entitled to receive an abatement of Base

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Rent payable hereunder during the period beginning on the sixth (6th)
consecutive business day of such interruption and ending on the day the utility
or service has been restored; provided, however, that in the event such
interruption is not due to Landlord’s gross negligence or willful misconduct,
then such abatement shall only apply to the extent Landlord collects or is
entitled to collect proceeds under the policy of rental-loss insurance the cost
of which has been included in Operating Expenses and the proceeds from which are
allocable to the Premises.
6. Late Charge
     Notwithstanding any other provision of this Lease to the contrary, Tenant
hereby acknowledges that late payment to Landlord of Rent, or other amounts due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. If any Rent or
other sums due from Tenant are not received by Landlord or by Landlord’s
designated agent within three (3) days after their due date, then Tenant shall
pay to Landlord a late charge equal to five percent (5%) of such overdue amount,
plus any costs and attorneys’ fees incurred by Landlord by reason of Tenant’s
failure to pay Rent and/or other charges when due hereunder; provided, however,
that Tenant shall be entitled to one (1) notice of late payment and a five
(5) day cure period in any twelve month period before any such late charge
accrues. Landlord and Tenant hereby agree that such late charges represent a
fair and reasonable estimate of the cost that Landlord will incur by reason of
Tenant’s late payment and shall not be construed as a penalty. Landlord’s
acceptance of such late charges shall not constitute a waiver of Tenant’s
default with respect to such overdue amount or estop Landlord from exercising
any of the other rights and remedies granted under this Lease.
7. Security Deposit
          (a) Concurrently with Tenant’s execution of this Lease, Tenant shall
deliver to Landlord a security deposit (the “Security Deposit”) in an initial
aggregate amount of $600,000 and subject to reduction from time to time, in
accordance with the provision of this Paragraph 7(a). The Security Deposit may
be in the form of a Cash Deposit (as hereinafter defined) or Letter of Credit
(as hereinafter defined) or combination of the forgoing as provided herein. In
the event of a draw upon the Letter of Credit or application of the Cash Deposit
by Landlord, Tenant shall have an obligation to, within ten (10) business days
following such draw or application, post an additional Cash Deposit or Letter of
Credit (or increase the stated amount of any Letter of Credit previously
provided to Landlord) such that the aggregate amount posted to Landlord as a
Security Deposit hereunder equals the then-applicable Security Deposit Value (as
hereinafter defined). The Letter of Credit shall be in the form of a clean,
irrevocable, non-documentary and unconditional letter of credit (the “Letter of
Credit”) issued by and drawable upon a money center bank or other financial
institution that is approved by Landlord (the “Bank”) and meets at least two of
the following three ratings standards as to its unsecured and senior, long-term
debt obligations (not supported by third party credit enhancement): (a) “A2” or
better by Moody’s Investors Service, or its successor, (b) “A” or better by
Standard & Poor’s Rating Service, or its successor; or (c) “A” or better by
Fitch Ratings, or its successor (the “Rating Standard”). As of the Lease Date,
Landlord has approved Silicon Valley Bank as the Bank, subject to maintenance of
the Rating Standard pursuant to the terms hereof. The Letter of Credit shall
have a term of not less than one year, be payable upon presentation at a
location in the United States of America, be for the benefit of Landlord as
security for the faithful

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performance and observance by Tenant of the terms, provisions, and conditions of
the Lease, and otherwise be in a form and content reasonably acceptable to the
Landlord. The “Security Deposit Value” shall initially mean $600,000, provided
that on each date set forth in the column labeled “Security Deposit Reduction
Date” below, but subject to the terms of the paragraph immediately following the
table below, the Security Deposit Value shall be reduced to the corresponding
amount set forth in the column labeled “Security Deposit Value” as set forth
below:

          Security Deposit     Reduction Date   Security Deposit Value
August 1, 2012
  $ 500,000  
August 1, 2013
  $ 400,000  
August 1, 2014
  $ 300,000  
August 1, 2015
  $ 200,000  
August 1, 2016
  $ 150,000  

In addition to the foregoing scheduled reductions on the Security Deposit
Reduction Dates, at such time as Tenant achieves a fiscal quarter of positive
“EBITDA” (earnings before interest expense, income taxes, depreciation and
amortization expense, as certified to Landlord by Tenant’s independent certified
public accounting firm), the Security Deposit Value shall be reduced by
$100,000; provided, however that in no event shall the Security Deposit Value
ever be less than One Hundred Fifty Thousand Dollars ($150,000). Notwithstanding
the foregoing, if during the twelve (12) month period prior to any Security
Deposit Reduction Date set forth in the table above (or during the twelve
(12) month period prior to Tenant achieving a fiscal quarter of EBITA), Tenant
had failed to make any monetary payments when due or a Default shall have
occurred, then there shall be no reduction of the Security Deposit Value on such
Security Deposit Reduction Date or at the time of such positive EBITA, but
Tenant shall retain the right to have the Security Deposit Value reduced on any
subsequent Security Deposit Reduction Date on which the conditions to reduction
set forth herein are satisfied.
          (b) If the expiration date of the Letter of Credit is earlier than the
thirtieth (30th) day after the Expiration Date of this Lease, then Tenant shall
renew, replace or amend the Letter of Credit, in the same form or another form
reasonably acceptable to Landlord from time to time, no later than thirty
(30) days prior to the expiration of the Letter of Credit. If at any time the
face amount of the Letter of Credit is greater than the applicable Security
Deposit Value as determined above, then Landlord shall, upon reasonable prior
notice from Tenant, cooperate with Tenant and the Bank to cause the Letter of
Credit to be reduced to reflect the correct Security Deposit Value in accordance
with the Bank’s procedures, including the execution of any documents as required
by the Bank’s standard procedures. If at any time the Bank that has issued the
Letter of Credit then being held by Landlord hereunder fails to meet the Rating
Standard, then within ten (10) business days after Landlord’s notice to Tenant
of such failure, Tenant shall deliver (a) a Cash Deposit and/or (b) a
replacement Letter of Credit meeting the requirements of this Paragraph 7 from a
Bank meeting the Rating Standard, in an aggregate amount equal to the
then-applicable Security Deposit Value. Upon receipt of such Cash Deposit and/or
replacement Letter of Credit, Landlord shall return the prior Letter of Credit
to Bank and

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take such other reasonable steps as are necessary to cause such prior Letter of
Credit to be cancelled.
          (c) It is agreed that in the event that Tenant defaults in respect of
any of the terms, conditions or provisions of this Lease, including, but not
limited to (i) the payment of the Base Rent and Additional Rent, (ii) the
delivery of a Cash Deposit or replacement Letter of Credit meeting the
requirements of this Paragraph 7 from a Bank meeting the Rating Standard above
within ten (10) business days after Landlord’s notice to Tenant of such issuing
Bank’s failure to meet the Rating Standard, or (iii) the aforesaid agreement to
cause the Bank to renew, amend or replace the Letter of Credit to extend the
expiration date thereof, then without waiving any of the Landlord’s other rights
and remedies under this Lease and after the expiration of any applicable cure
period set forth in Paragraph 24 of this Lease, Landlord shall have the right to
require the Bank to make payment to Landlord of the amount required to cure such
default or such other sum to compensate Landlord for actual damages incurred in
connection with such this Lease not to exceed the face amount of the Letter of
Credit; provided that in the case of a default described in clause (ii) or
(iii) above, Landlord shall have the right to draw the entire amount of the
Letter of Credit, in which case, Landlord shall hold the cash proceeds as
security for the performance of Tenant’s obligations under the Lease and either
(x) Tenant shall deliver to Landlord a replacement Letter of Credit meeting the
Rating Standard in the face amount of the then-applicable Security Deposit
Value; and upon such delivery of the replacement Letter of Credit, Landlord
shall return the cash proceeds from its draw on the previous Letter of Credit to
Tenant (to the extent not properly applied to cure any other default of Tenant
hereunder); or (y) Landlord shall hold the cash proceeds from its draw on the
previous Letter of Credit, up to the amount of the then-applicable Security
Deposit Value, as a Cash Deposit (as defined below) and may apply the Cash
Deposit or any portion thereof as provided below, and shall return any amount in
excess of the then-applicable Security Deposit Value to Tenant.
          (d) The Letter of Credit shall be transferable, at no charge to
Landlord, upon reasonable prior notice to the Bank subject to compliance with
any reasonable transfer procedures set forth in the Letter of Credit.
Notwithstanding the foregoing, Landlord shall not assign or delegate any of its
rights and duties with respect to the Letter of Credit (except with respect to
the sale, transfer, financing or leasing of Landlord’s interest in the Building)
without prior notice to and consent of Tenant, and any attempted assignment in
violation of the foregoing shall be null and void.
          (e) At all times until the Security Expiration Date, Tenant may
provide the Security Deposit in the form of cash (the “Cash Deposit”) in an
amount such that the Landlord holds cash and/or Letters of Credit (or any
combination of the two) in an aggregate amount equal to the then-applicable
Security Deposit Value. At the reasonable request of Tenant, to the extent that
Landlord holds Cash Deposits and Letters of Credit in excess of the Security
Deposit Value, Landlord shall, as applicable, return such excess cash, reduce
the stated amount of the Letter of Credit by the amount of such excess or, in
the case where the Cash Deposit equals the Security Deposit Value, return the
Letter of Credit to the Bank and take such other reasonable steps as are
necessary to cause such Letter of Credit to be cancelled. Notwithstanding the
foregoing, Tenant shall have no right to substitute a Cash Deposit for a Letter
of Credit (or any portion thereof) at any time during the continuance of a
Default. The Cash Deposit shall be held by Landlord as security for the faithful
performance by Tenant of all of the provisions of this Lease to be

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performed or observed by Tenant. If Tenant fails to pay rent or other charges
due hereunder, or otherwise defaults with respect to any provision of this
Lease, Landlord may use, apply or retain all or any portion of the Cash Deposit
for the payment of any rent or other charge in default, or for the payment of
any other sum to which Landlord may become obligated by reason of Tenant’s
default, or to compensate Landlord for any loss or damage which Landlord may
suffer thereby. Without in any way limiting Landlord’s obligation to return any
portion of the Cash Deposit in excess of the then-applicable Security Deposit
Value, Tenant waives the provisions of California Civil Code Section 1950.7, or
any similar or successor laws now or hereinafter in effect, to the extent only
that it restricts Landlord’s use or application of the Cash Deposit, or that
provide specific time periods for return of the Cash Deposit. Without limiting
the generality of the foregoing, and notwithstanding the provisions of the
following paragraph, Tenant expressly agrees that if Landlord terminates this
Lease due to a Default or if Tenant terminates this Lease in a bankruptcy
proceeding, Landlord shall be entitled to hold the Cash Deposit until the amount
of damages recoverable pursuant to California Civil Code Section 1951.2 is
finally determined.
          (f) If Tenant shall fully and faithfully comply with all of the terms,
provisions, covenants and conditions of this Lease, the Letter of Credit or any
portion of any sum collected by Landlord thereunder from the Bank not
theretofore applied by Landlord, or, if applicable, the Cash Deposit or so much
thereof as has not theretofore been applied by Landlord, together with any other
portion of any other sums then held by Landlord as security, shall be returned
to Tenant within thirty (30) days after the later of the Expiration Date or
Tenant’s vacation and surrender of the Leased Premises in accordance with the
requirements of this Lease (such thirtieth day be defined herein as the
“Security Expiration Date”).
8. Possession
     (a) Tenant’s Right of Possession. Subject to Paragraph 8(b), Tenant shall
be entitled to possession of the Premises upon commencement of the Term.
     (b) Early Access. Notwithstanding the provisions of Paragraph 8(a), Tenant
shall be permitted to enter upon the Premises upon April 1, 2010 (the “Estimated
Delivery Date”), at all reasonable times for the sole purposes of commencing
construction of the Tenant Improvements, installing furniture, equipment and
cabling and otherwise readying the Premises for Tenant’s occupancy; provided,
however, that (i) Tenant shall not unreasonably interfere with or disrupt any
work being performed by Landlord in the Premises during such early occupancy,
(ii) prior to any such entry, Tenant shall provide Landlord with proof of
Tenant’s insurance as set forth in Paragraph 15 of this Lease, and (iii) Tenant
acknowledges that Schwab shall continue to have access to the server room
portion of the Premises located on the first floor of the Building for the
exclusive use of the IT Equipment (hereinafter defined) through April 30, 2010.
Such entry upon the Premises shall be subject to all of the provisions of this
Lease, except that Tenant shall not be required to pay Base Rent or Additional
Rent during such early occupancy period. All materials, work, installations,
equipment and decorations of any nature brought upon or installed by Tenant in
the Premises prior to the Commencement Date shall be at Tenant’s sole risk.
     (c) Delay in Delivering Possession. If for any reason whatsoever, Landlord
cannot deliver possession of the Premises to Tenant on or before the Estimated
Delivery Date, this Lease shall not be void or voidable, nor shall Landlord, or
Landlord’s agents, advisors,

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employees, partners, shareholders, directors, invitees, independent contractors
or Landlord’s Investment Advisors (as hereinafter defined) (collectively,
“Landlord’s Agents”), be liable to Tenant for any loss or damage resulting
therefrom. Notwithstanding the preceding sentence, if Landlord does not deliver
possession of the Premises to Tenant by May 1, 2010, then Tenant shall be
entitled to one day of free Base Rent and Additional Rent for each day that the
Premises is not available after May 1, 2010. Additionally, if Landlord can not
deliver possession of the Premises to Tenant by May 1, 2010, then Tenant shall
have the option to terminate this Lease by written notice to Landlord within ten
(10) days thereafter, unless Landlord delivers possession of the Premises to
Tenant prior to the expiration of such ten (10) day period, and, upon any such
termination, all deposits and prepayments shall be refunded. If Landlord has
been unable, despite its commercially reasonable efforts, to deliver possession
of the Premises to Tenant by July 1, 2010, then Landlord shall have the option
to terminate this Lease by written notice to Tenant, and, upon any such
termination, all deposits and prepayments shall be refunded.] The aforesaid
right of free and termination rent shall be the sole remedies available to
Tenant as a result of Landlord’s failure to deliver the Premises to Tenant on a
timely basis as provided in this Paragraph 8(b). The Expiration Date shall be
extended by the same number of days that Tenant’s possession of the Premises was
delayed beyond the Estimated Delivery Date.
9. Use of Premises
     (a) Permitted Use. The use of the Premises by Tenant and Tenant’s agents,
advisors, employees, partners, shareholders, directors, customers, invitees and
independent contractors (collectively, “Tenant’s Agents”) shall be solely for
the Permitted Use specified in the Basic Lease Information and for no other use.
Tenant shall not permit any objectionable or unpleasant odor, smoke, dust, gas,
noise or vibration to emanate from or near the Premises. The Premises shall not
be used to create any nuisance or trespass, for any illegal purpose, for any
purpose not permitted by Laws, for any purpose that would invalidate the
insurance or increase the premiums for insurance on the Premises, the Building
or the Project or for any purpose or in any manner that would interfere with
other tenants’ use or occupancy of the Project. If any of Tenant’s office
machines or equipment disturb any other tenant in the Building, then Tenant
shall provide adequate insulation or take such other action as may be necessary
to eliminate the noise or disturbance. Tenant agrees to pay to Landlord, as
Additional Rent, any increases in premiums on policies resulting from Tenant’s
Permitted Use or any other use or action by Tenant or Tenant’s Agents which
increases Landlord’s premiums or requires additional coverage by Landlord to
insure the Premises. Tenant agrees not to overload the floor(s) of the Building.
     (b) Compliance with Governmental Regulations and Private Restrictions.
Tenant and Tenant’s Agents shall, at Tenant’s expense, faithfully observe and
comply with (i) all municipal, state and federal laws, statutes, codes, rules,
regulations, ordinances, requirements, and orders (collectively, “Laws”), now in
force or which may hereafter be in force pertaining to the Premises and such
compliance is due to Tenant’s particular use of the Premises, the Building or
the Project; (ii) all recorded covenants, conditions and restrictions affecting
the Project (“Private Restrictions”) now in force or which may hereafter be in
force; and (iii) the Rules and Regulations (as defined in Paragraph 41 of this
Lease). Without limiting the generality of the foregoing, to the extent Landlord
is required by the city or county in which the Building is located to maintain
carpooling and public transit programs, Tenant shall cooperate in the
implementation and use of these programs by and among Tenant’s employees. The
judgment of

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any court of competent jurisdiction, or the admission of Tenant in any action or
proceeding against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any such Laws or Private Restrictions, shall be conclusive
of that fact as between Landlord and Tenant.
     (c) Compliance with Americans with Disabilities Act. The Premises, the
Building and/or the Project may be subject to, among other Laws, the Americans
with Disabilities Act, 42 U.S.C. § 12101 et seq., including, but not limited to,
Title III thereof, and all regulations and guidelines related thereto, together
with any and all laws, rules, regulations, ordinances, codes and statutes now or
hereafter enacted by local or state agencies having jurisdiction thereof,
including, without limitation, all requirements of Title 24 of the California
Code of Regulations, as the same may be in effect on the date of this Lease and
may be hereafter modified, amended or supplemented (collectively, the “ADA”).
Any Alterations to be constructed hereunder shall comply with the ADA, and all
costs incurred to comply therewith shall be a part of and included in the cost
of the Alterations, as applicable. Tenant shall be solely responsible for
conducting its own independent investigation of this matter and for ensuring
that the design of all Tenant Improvements and Alterations strictly complies
with all requirements of the ADA. Subject to reimbursement pursuant to
Paragraph 4 above, if any barrier removal work or other work is required to the
Building, the Common Areas or the Project under the ADA, then such work shall be
the sole responsibility of Landlord; provided, however, that if such work is
required under the ADA as a result of Tenant’s particular use of the Premises or
any Alteration (as hereinafter defined) made to the Premises by or on behalf of
Tenant, then such work shall be performed by Landlord at the sole cost and
expense of Tenant. Within ten (10) days after receipt, Tenant shall advise
Landlord in writing, and provide Landlord with copies of (as applicable), any
notices alleging violation of the ADA relating to any portion of the Premises,
the Building or the Project; any claims made or threatened orally or in writing
regarding noncompliance with the ADA and relating to any portion of the
Premises, the Building, or the Project; or any governmental or regulatory
actions or investigations instituted or threatened regarding noncompliance with
the ADA and relating to any portion of the Premises, the Building or the
Project. Tenant shall and hereby agrees to protect, defend (with counsel
reasonably acceptable to Landlord) and hold Landlord and Landlord’s Agents
harmless and indemnify Landlord and Landlord’s Agents from and against all
liabilities, damages, claims, losses, penalties, judgments, charges and expenses
(including attorneys’ fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant’s or Tenant’s Agents’ violation or alleged violation of the ADA arising
in connection with Tenant’s particular use of the Premises or any Alteration
made to the Premises by or on behalf of Tenant. Tenant agrees that the
obligations of Tenant herein shall survive the expiration or earlier termination
of this Lease.
     (d) Landlord Representations. Landlord represents that it has not received
any written notice, and Landlord has no actual knowledge, that the Premises or
the Common Areas of the Project are in violation of any Laws or the ADA, which
violation remains uncured as of the Lease Date.
     (e) Roof Access. Tenant, at its sole cost and expense, shall have the
non-exclusive right (it being understood that Landlord may grant, extend or
renew similar rights to others) to install, maintain, and from time to time
replace an antenna or satellite dish (a “Dish”) on the roof of the Building,
provided that prior to commencing any installation or maintenance, Tenant shall
(i)

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obtain Landlord’s prior approval of the proposed size, weight and location of
the Dish and method for fastening the Dish to the roof, (ii) such installation
and/or replacement shall comply strictly with all Laws and the conditions of any
bond or warranty maintained by Landlord on the roof, (iii) use the Dish solely
for its internal use, (iv) not grant any right to use of the Dish to any other
party, and (v) obtain, at Tenant’s sole cost and expense, any necessary federal,
state, and municipal permits, licenses and approvals, and deliver copies thereof
to Landlord. Landlord may supervise or perform any roof penetration related to
the installation of a Dish, and Landlord may charge the cost thereof to Tenant.
Tenant agrees that all installation, construction and maintenance shall be
performed in a neat, responsible, and workmanlike manner, using generally
acceptable construction standards, consistent with such reasonable requirements
as shall be imposed by Landlord. Tenant further agrees to label each cable or
wire placed by Tenant in the telecommunications pathways of the Building, with
identification information as required by Landlord. Tenant shall repair any
damage to the Building caused by Tenant’s installation, maintenance,
replacement, use or removal of the Dish. The Dish shall remain the property of
Tenant, and Tenant may remove the Dish at its cost at any time during the Term.
Tenant shall remove the Dish at Tenant’s cost and expense upon the expiration or
termination of this Lease. Tenant agrees that the Dish, and any wires, cables or
connections relating thereto, and the installation, maintenance and operation
thereof shall in no way interfere with the use and enjoyment of the Building, or
the operation of communications (including, without limitation, other satellite
dishes) or computer devices by Landlord or by other tenants or occupants of the
Project. If such interference shall occur, Landlord shall give Tenant written
notice thereof and Tenant shall correct the same within twenty-four (24) hours
of receipt of such notice. Landlord reserves the right to disconnect power to
any Dish if Tenant fails to correct such interference within twenty-four
(24) hours after such notice. Landlord makes no warranty or representation that
the Building or any portions thereof are suitable for the use of a Dish, it
being assumed that Tenant has satisfied itself thereof. Tenant shall protect,
defend, indemnify and hold harmless Landlord and Landlord’s Agents from and
against claims, damages, liabilities, costs and expenses of every kind and
nature, including attorneys’ fees, incurred by or asserted against Landlord
arising out of Tenant’s installation, maintenance, replacement, use or removal
of the Dish.
10. Acceptance of Premises
     (a) By its execution hereof, Tenant acknowledges that it had the
opportunity to fully inspect the Premises. Tenant hereby certifies to Landlord
that neither Tenant nor any of its employees, agents, or contractors observed or
has any knowledge of any mold, mildew, Mold Conditions (as hereinafter defined)
or moisture within the Premises. By accepting Landlord’s delivery of the
Premises, Tenant accepts the Premises as suitable for Tenant’s intended use and
as being in good and sanitary operating order, condition and repair, as is, and
without representation or warranty by Landlord as to the condition, use or
occupancy which may be made thereof. Any exceptions to the foregoing must be by
written agreement executed by Landlord and Tenant.
     (b) Notwithstanding the provisions of Paragraph 10(a), Landlord shall cause
(i) the server room portion of the Premises located on the ground floor to be
separately demised at Landlord’s sole cost and expense in a manner consistent
with the floor plan attached as Exhibit A, provided that the door to the office
portion of the server room shall be in a location mutually agreed by

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Landlord and Tenant, and (ii) Schwab (hereinafter defined) to remove all
existing furniture from the portion of the Premises located on the fifth floor
of the Building, and Landlord shall otherwise deliver the same in broom-clean
condition and free from debris. In connection with Schwab’s removal of such
furniture, Landlord shall request that Schwab cause all cabling and wiring
routing through such furniture (the “Existing Wiring”) to terminate so as to
facilitate reuse by Tenant.
11. Surrender
     Tenant agrees that on the last day of the Term, or on the sooner
termination of this Lease, Tenant shall surrender the Premises to Landlord
(a) in good condition and repair (damage by acts of God, fire, and normal wear
and tear excepted), broom clean and free of debris, and (b) otherwise in
accordance with Paragraph 32(f). Normal wear and tear shall not include any
damage or deterioration that would have been prevented by proper maintenance by
Tenant, or Tenant otherwise performing all of its obligations under this Lease.
On or before the expiration or sooner termination of this Lease, (i) Tenant
shall remove all of Tenant’s Property (as hereinafter defined) and Tenant’s
signage from the Premises, the Building and the Project and repair any damage
caused by such removal, and (ii) Landlord may, by notice to Tenant given not
later than ninety (90) days prior to the Expiration Date (except in the event of
a termination of this Lease prior to the scheduled Expiration Date, in which
event no advance notice shall be required), require Tenant at Tenant’s expense
to remove any or all Alterations (but expressly excluding the Tenant
Improvements), and to repair any damage caused by such removal. Any of Tenant’s
Property not so removed by Tenant as required herein shall be deemed abandoned
and may be stored, removed, and disposed of by Landlord at Tenant’s expense, and
Tenant waives all claims against Landlord for any damages resulting from
Landlord’s retention and disposition of such property; provided, however, that
Tenant shall remain liable to Landlord for all costs incurred in storing and
disposing of such abandoned property of Tenant. All Tenant Improvements and
Alterations except those which Landlord requires Tenant to remove shall remain
in the Premises as the property of Landlord.
12. Alterations and Additions
     (a) Tenant shall not make, or permit to be made, any alteration, addition
or improvement (hereinafter referred to individually as an “Alteration” and
collectively as the “Alterations”) to the Premises or any part thereof without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld; provided, however, that Landlord shall have the right in its sole and
absolute discretion to consent or to withhold its consent to any Alteration
which affects the structural portions of the Premises, the Building or the
Project or the Systems serving the Premises, the Building and/or the Project or
any portion thereof. Notwithstanding the foregoing, Tenant shall be entitled to
make cosmetic alterations in the Premises, without the prior consent of
Landlord, so long Tenant provides Landlord with no fewer than fifteen (15) days
prior written notice, and such alterations (i) otherwise comply with the
provisions of this Paragraph 12, (ii) do not exceed an aggregate cost in excess
of $30,000 in any lease year, (iii) do not affect the structural portions of the
Building or the Project or the Systems serving the Premises, the Building and/or
the Project or any portion thereof.

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     (b) Any Alteration to the Premises shall be at Tenant’s sole cost and
expense, in compliance with all applicable Laws and all requirements requested
by Landlord, including, without limitation, the requirements of any insurer
providing coverage for the Premises or the Project or any part thereof, and in
accordance with plans and specifications approved in writing by Landlord, and
shall be constructed and installed by a contractor approved in writing by
Landlord. In connection with any Alteration, Tenant shall deliver plans and
specifications therefor to Landlord. As a further condition to giving consent,
Landlord may require Tenant to provide Landlord, at Tenant’s sole cost and
expense, a payment and performance bond in form acceptable to Landlord, in a
principal amount not less than one and one-half times the estimated costs of
such Alterations, to ensure Landlord against any liability for mechanics’ and
materialmen’s liens and to ensure completion of work. Before Alterations may
begin, valid building permits or other required permits or licenses must be
furnished to Landlord, and, once the Alterations begin, Tenant will diligently
and continuously pursue their completion. Landlord may monitor construction of
the Alterations and Tenant shall reimburse Landlord for its actual out-of-pocket
third-party costs in reviewing plans and documents. Tenant shall maintain during
the course of construction, at its sole cost and expense, builders’ risk
insurance for the amount of the completed value of the Alterations on an
all-risk non-reporting form covering all improvements under construction,
including building materials, and other insurance in amounts and against such
risks as Landlord shall reasonably require in connection with the Alterations.
In addition to and without limitation on the generality of the foregoing, Tenant
shall ensure that its contractor(s) procure and maintain in full force and
effect during the course of construction a “broad form” commercial general
liability and property damage policy of insurance naming Landlord, Tenant,
Landlord’s Investment Adviser, any property manager designated by Landlord and
Landlord’s lenders as additional insureds. The minimum limit of coverage of the
aforesaid policy shall be in the amount of not less than Three Million Dollars
($3,000,000.00) for injury or death of one person in any one accident or
occurrence and in the amount of not less than Three Million Dollars
($3,000,000.00) for injury or death of more than one person in any one accident
or occurrence, and shall contain a severability of interest clause or a cross
liability endorsement. Such insurance shall further insure Landlord and Tenant
against liability for property damage of at least One Million Dollars
($1,000,000.00).
     (c) All Alterations, including, but not limited to, heating, lighting,
electrical, air conditioning, fixed partitioning, drapery, wall covering and
paneling, built-in cabinet work and carpeting installations made by Tenant,
together with all property that has become an integral part of the Premises or
the Building, shall at once be and become the property of Landlord, and shall
not be deemed trade fixtures or Tenant’s Property.
     (d) No private telephone systems and/or other related computer or
telecommunications equipment or lines may be installed without Landlord’s prior
written consent. If Landlord gives such consent, all equipment must be installed
within the Premises and, at the request of Landlord made at any time prior to
the expiration of the Term, removed upon the expiration or sooner termination of
this Lease and the Premises restored to the same condition as before such
installation.
     (e) Notwithstanding anything herein to the contrary, before installing any
equipment or lights which generate an undue amount of heat in the Premises, or
if Tenant plans to use any high-power usage equipment in the Premises, Tenant
shall obtain the written permission of

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Landlord. Landlord may refuse to grant such permission unless Tenant agrees to
pay the costs to Landlord for installation of supplementary air conditioning
capacity or electrical systems necessitated by such equipment.
     (f) Tenant agrees not to proceed to make any Alterations, notwithstanding
consent from Landlord to do so, until Tenant notifies Landlord in writing of the
date Tenant desires to commence construction or installation of such Alterations
and Landlord has approved such date in writing, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant’s improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work.
     (g) Tenant shall not, at any time prior to or during the Term, directly or
indirectly employ, or permit the employment of, any contractor, mechanic or
laborer in the Premises, whether in connection with any Alteration or otherwise,
if it is reasonably foreseeable that such employment will materially interfere
or cause any material conflict with other contractors, mechanics, or laborers
engaged in the construction, maintenance or operation of the Project by
Landlord, Tenant or others. In the event of any such interference or conflict,
Tenant, upon demand of Landlord, shall cause all contractors, mechanics or
laborers causing such interference or conflict to leave the Project immediately.
     (h) Tenant shall not use or employ materials that are susceptible to the
growth of mold, particularly in areas where moisture accumulation is common.
13. Maintenance and Repairs of Premises
     (a) Maintenance by Tenant. Throughout the Term, Tenant shall, at its sole
expense, subject to Paragraphs 5(a) and 13(b) hereof, (i) keep and maintain in
good order and condition the Premises and Tenant’s Property, (ii) keep and
maintain in good order and condition, repair and replace all of Tenant’s
security systems in or about or serving the Premises, and (iii) maintain and
replace all specialty lamps, bulbs, starters and ballasts, except for any and
all lighting fixtures presently installed or similar or matching lighting
fixtures which shall be installed as part of the Tenant Improvements, for which
Landlord shall be responsible to maintain and replace. Tenant shall not do nor
shall Tenant allow Tenant’s Agents to do anything to cause any damage,
deterioration or unsightliness to the Premises, the Building or the Project.
     (b) Maintenance by Landlord. Subject to the provisions of Paragraphs 13(a),
21 and 22, and further subject to Tenant’s obligation under Paragraph 4 to
reimburse Landlord, in the form of Additional Rent, for Tenant’s Proportionate
Share(s) of the cost and expense of the following items, Landlord shall repair
and maintain the following items: the roof coverings (provided that Tenant
installs no additional air conditioning or other equipment on the roof that
damages the roof coverings, in which event Tenant shall pay all costs resulting
from the presence of such additional equipment); the Systems serving the
Premises (excluding any specialty systems installed by or for Tenant) and the
Building; and the Parking Areas, pavement, landscaping, sprinkler systems,
sidewalks, driveways, curbs, and lighting systems in the Common Areas. Subject
to the provisions of Paragraphs 13(a), 21 and 22, Landlord, at its own cost and
expense, agrees to repair and maintain the following items: the structural
portions of the roof (specifically excluding the roof coverings), the
foundation, the footings, the floor slab, and the load bearing

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walls and exterior walls of the Building (excluding any glass and any routine
maintenance, including, without limitation, any painting, sealing, patching and
waterproofing of such walls). Notwithstanding anything in this Paragraph 13 to
the contrary, Landlord shall have the right to either repair or to require
Tenant to repair any damage to any portion of the Premises, the Building and/or
the Project caused by or created due to any act, omission, negligence or willful
misconduct of Tenant or Tenant’s Agents and to restore the Premises, the
Building and/or the Project, as applicable, to the condition existing prior to
the occurrence of such damage; provided, however, that in the event Landlord
elects to perform such repair and restoration work, Tenant shall reimburse
Landlord upon demand for all costs and expenses incurred by Landlord in
connection therewith. Landlord’s obligation hereunder to repair and maintain is
subject to the condition precedent that Landlord shall have received written
notice of the need for such repairs and maintenance and a reasonable time to
perform such repair and maintenance. Tenant shall promptly report in writing to
Landlord any defective condition known to it which Landlord is required to
repair.
     (c) Tenant’s Waiver of Rights. Tenant hereby expressly waives all rights to
make repairs at the expense of Landlord or to terminate this Lease, as provided
for in California Civil Code Sections 1941 and 1942, and 1932(1), respectively,
and any similar or successor statute or law in effect or any amendment thereof
during the Term.
14. Landlord’s Insurance
     Landlord shall purchase and keep in force (i) commercial general liability
insurance, with minimum limits of coverage in the amount of not less than Three
Million Dollars ($3,000,000.00) per occurrence, and (ii) fire, extended coverage
and “all risk” insurance covering the Building and the Project. Tenant shall, at
its sole cost and expense, comply with any and all reasonable requirements
pertaining to the Premises, the Building and the Project of any insurer
necessary for the maintenance of reasonable fire and commercial general
liability insurance, covering the Building and the Project. Landlord may
maintain “Loss of Rents” insurance, insuring that the Rent will be paid in a
timely manner to Landlord for a period of at least twelve (12) months if the
Premises, the Building or the Project or any portion thereof are destroyed or
rendered unusable or inaccessible by any cause insured against under this Lease.
15. Tenant’s Insurance
     (a) Commercial General Liability Insurance. Tenant shall, at Tenant’s
expense, secure and keep in force a “broad form” commercial general liability
insurance and property damage policy covering the Premises, insuring Tenant, and
naming Landlord, UBS Realty Investors llc, and Landlord’s lenders as additional
insureds (collectively, “Landlord’s Insureds”) against any liability arising out
of the ownership, use, occupancy or maintenance of the Premises. The minimum
limit of coverage of such policy shall be in the amount of not less than Three
Million Dollars ($3,000,000.00) for injury or death of one person in any one
accident or occurrence and in the amount of not less than Three Million Dollars
($3,000,000.00) for injury or death of more than one person in any one accident
or occurrence, shall include an extended liability endorsement providing
contractual liability coverage (which shall include coverage for Tenant’s
indemnification obligations in this Lease), and shall contain a severability of
interest clause or a cross liability endorsement. Such insurance shall further
insure Landlord and Tenant against

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liability for property damage of at least Three Million Dollars ($3,000,000.00).
Following expiration of the initial Term, Landlord may from time to time require
reasonable increases in any such limits if Landlord believes that additional
coverage is necessary or desirable. The limit of any insurance shall not limit
the liability of Tenant hereunder. No policy maintained by Tenant under this
Paragraph 15(a) shall contain a deductible greater than Ten Thousand Dollars
($10,000.00). No policy shall be cancelable or subject to reduction of coverage
without thirty (30) days’ prior written notice to Landlord. Such policies of
insurance shall be issued as primary policies and not contributing with or in
excess of coverage that Landlord may carry, by an insurance company authorized
to do business in the state/commonwealth in which the Premises are located for
the issuance of such type of insurance coverage and rated B+:XIII or better in
Best’s Key Rating Guide.
     (b) Personal Property Insurance. Tenant shall maintain in full force and
effect on all of its personal property, furniture, furnishings, trade or
business fixtures and equipment (collectively, “Tenant’s Property”) on the
Premises, a policy or policies of fire and extended coverage insurance with
standard coverage endorsement to the extent of the full replacement cost
thereof. No such policy shall contain a deductible greater than Ten Thousand
Dollars ($10,000.00). During the Term, the proceeds from any such policy or
policies of insurance shall be used for the repair or replacement of the
fixtures and equipment so insured. Landlord shall have no interest in the
insurance upon Tenant’s equipment and fixtures and will sign all documents
reasonably necessary in connection with the settlement of any claim or loss by
Tenant. Landlord will not carry insurance on Tenant’s possessions.
     (c) Worker’s Compensation Insurance; Employer’s Liability Insurance. Tenant
shall, at Tenant’s expense, maintain in full force and effect worker’s
compensation insurance with not less than the minimum limits required by law,
and employer’s liability insurance with a minimum limit of coverage of One
Million Dollars ($1,000,000.00).
     (d) Evidence of Coverage. Tenant shall deliver to Landlord certificates of
insurance and true and complete copies of any and all endorsements required
herein for all insurance required to be maintained by Tenant hereunder at the
time of execution of this Lease by Tenant. Tenant shall, at least ten (10) days
prior to expiration of each policy, furnish Landlord with certificates of
renewal thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after thirty
(30) days’ prior written notice to Landlord and the other parties named as
additional insureds as required in this Lease (except for cancellation for
nonpayment of premium, in which event cancellation shall not take effect until
at least ten (10) days’ notice has been given to Landlord).
16. Indemnification
     (a) Of Landlord. Tenant shall defend, protect, indemnify and hold harmless
Landlord and Landlord’s Agents against and from any and all claims, suits,
liabilities, judgments, costs, demands, causes of action and expenses
(including, without limitation, reasonable attorneys’ fees, costs and
disbursements) arising from (i) the use of the Premises, the Building or the
Project by Tenant or Tenant’s Agents, or from any activity done, permitted or
suffered by Tenant or Tenant’s Agents in or about the Premises, the Building or
the Project, including any mold or Mold Conditions, and (ii) any act, neglect,
fault, willful misconduct or omission of Tenant or

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Tenant’s Agents, or from any breach or default in the terms of this Lease by
Tenant or Tenant’s Agents, and (iii) any action or proceeding brought on account
of any matter in items (i) or (ii). If any action or proceeding is brought
against Landlord by reason of any such claim, upon notice from Landlord, Tenant
shall defend the same at Tenant’s expense by counsel reasonably satisfactory to
Landlord. As a material part of the consideration to Landlord, Tenant hereby
releases Landlord and Landlord’s Agents from responsibility for, waives its
entire claim of recovery for and assumes all risk of (A) damage to property or
injury to persons in or about the Premises, the Building or the Project from any
cause whatsoever (except to the extent is caused by the gross negligence or
willful misconduct of Landlord or Landlord’s Agents or by the failure of
Landlord to observe any of the terms and conditions of this Lease, if such
failure has persisted for an unreasonable period of time after written notice of
such failure), or (B) loss resulting from business interruption or loss of
income at the Premises. The obligations of Tenant under this Paragraph 16 shall
survive any termination of this Lease.
     (b) No Impairment of Insurance. The foregoing indemnity shall not relieve
any insurance carrier of its obligations under any policies required to be
carried by either party pursuant to this Lease, to the extent that such policies
cover the peril or occurrence that results in the claim that is subject to the
foregoing indemnity.
17. Subrogation
     Landlord and Tenant hereby mutually waive any claim against the other and
its Agent(s) for any loss or damage to any of their property located on or about
the Premises, the Building or the Project that is caused by or results from
perils covered by property insurance carried by the respective parties, to the
extent of the proceeds of such insurance actually received with respect to such
loss or damage, whether or not due to the negligence of the other party or its
Agents. Because the foregoing waivers will preclude the assignment of any claim
by way of subrogation to an insurance company or any other person, each party
shall immediately notify its insurer, in writing, of the terms of these mutual
waivers and have their insurance policies endorsed to prevent the invalidation
of the insurance coverage because of these waivers. Nothing in this Paragraph 17
shall relieve a party of liability to the other for failure to carry insurance
required by this Lease.
18. Signs
     (a) Project Standard Signage. Landlord shall provide to Tenant, at
Landlord’s expense, the following Building standard signage: (i) directory
signage in the Building lobby, and (ii) suite signage at the entrance to the
Premises.
     (b) Monument Signage. Tenant shall have the right to have its name listed
on the shared monument sign for the Building (the “Monument Sign”). Landlord
shall have the right to require that all names on the Monument Sign be of the
same size. Tenant’s right to place its name on the Monument Sign, and the
location of Tenant’s name on the Monument Sign, shall be subject to Landlord’s
reasonable approval. Although the Monument Sign will be maintained by Landlord,
Tenant shall pay its proportionate share of the cost of any maintenance and
repair associated with the Monument Sign. In the event that additional names are
listed on the Monument Sign, all costs of maintenance and repair shall be
prorated between Tenant and the other parties that are

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listed on such Monument Sign. Landlord may, at anytime during the Lease Term (or
any extension thereof), upon five (5) days’ prior written notice to Tenant,
relocate the position of Tenant’s name on the Monument Sign; provided, however
that the new position is no lower than the initial position. The cost of such
relocation of Tenant’s name shall be at the cost and expense of Landlord. At
Landlord’s option, Tenant’s right to the Monument Signage may be revoked and
terminated upon occurrence of any Default by Tenant beyond applicable notice and
cure periods.
     (c) Parapet Signage.
          (i) Tenant shall also be entitled to one parapet tenant identification
sign facing Stoneridge Mall Road (the “Parapet Sign”). The Parapet Sign shall be
located in the same general area as preexisting parapet signage on the Building,
and the size, color and design of which shall be subject to Landlord’s prior
written approval, not to be unreasonably withheld. Tenant shall, at Tenant’s
sole cost and expense, design, construct and install the Parapet Signage. Tenant
shall maintain the Parapet Signage in good condition and repair, and all costs
of maintenance and repair shall be borne solely by Tenant. Maintenance shall
include, without limitation, cleaning and, if the Parapet Signage is
illuminated, relamping at reasonable intervals. Tenant shall be responsible for
any electrical energy used in connection with the Parapet Signage.
          (ii) At Landlord’s option, Tenant’s right to the Parapet Signage may
be revoked and terminated upon occurrence of any of the following events:
(a) Tenant is in Default; (b) Tenant subleases more than fifty percent (50%) of
the portion of the Premises located on the 5th floor of the Building for
substantially the remainder of the Term; or (c) Tenant assigns this Lease.
Unless otherwise agreed by Landlord in writing in its sole discretion, the
rights provided in this Paragraph 18(c) shall be non-transferable, except to a
Permitted Transferee.
     (d) General Requirements. Tenant shall not place or permit to be placed in,
upon, or about the Premises, the Building or the Project any exterior lights,
decorations, balloons, flags, pennants, banners, advertisements or notices, or
erect or install any signs, windows or door lettering, placards, decorations, or
advertising media of any type which can be viewed from the exterior of the
Premises without obtaining Landlord’s prior written consent or without complying
with Landlord’s signage criteria, as the same may be modified by Landlord from
time to time (the “Signage Criteria”) and without complying with all applicable
Laws (including, without limitation, obtaining any required consent of the City
of Pleasanton or any other public authorities having jurisdiction). Without
limiting the generality of the foregoing, Tenant must obtain Landlord’s written
consent as to the design, size and color of Tenant’s signage and the manner in
which it is attached to the Project prior to its fabrication and installation.
To obtain Landlord’s consent, Tenant shall submit design drawings to Landlord
showing the type and sizes of all lettering; the colors, finishes and types of
materials used; and (if applicable and Landlord consents in its sole discretion)
any provisions for illumination. Landlord reserves the right to withhold consent
to any sign that, in the good faith judgment of Landlord, is offensive,
political or otherwise not harmonious with Class-A office buildings. Upon the
expiration of the Term or sooner termination of this Lease or at such other time
that any of Tenant’s signage rights are terminated pursuant to the terms of this
Paragraph 18, Tenant shall remove any such signage and repair any damage or
injury to the Premises, the Building or the Project caused thereby

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(including, if necessary, the replacement of any precast concrete panels), all
at Tenant’s sole cost and expense. If any signs are not removed, or necessary
repairs are not made, then Landlord shall have the right to remove and dispose
of such sign(s) and repair any damage or injury to the Premises, the Building or
the Project at Tenant’s sole cost and expense. Tenant shall pay all costs and
expenses for such removal and restoration within five (5) Business Days
following delivery of an invoice therefor. In addition to any other rights or
remedies available to Landlord, in the event that Tenant erects or installs any
sign in violation of this Paragraph 18, and Tenant fails to remove same within
three (3) business days after notice from Landlord or erects or installs a
similar sign in the future, Landlord shall have the right to charge Tenant a
signage fee equal to One Hundred Dollars ($100.00) per day for each day
thereafter that such sign is not removed or a similar sign is installed or
erected in the future. Landlord’s election to charge such fee shall not be
deemed to be a consent by Landlord to such sign and Tenant shall remain
obligated to remove such sign in accordance with Landlord’s notice.
19. Free From Liens
     Tenant shall keep the Premises, the Building and the Project free from any
liens arising out of any work performed, material furnished or obligations
incurred by or for Tenant. In the event that Tenant shall not, within twenty
(20) days following the imposition of any such lien, cause the lien to be
released of record by payment or posting of a proper bond, Landlord shall have
in addition to all other remedies provided herein and by law the right but not
the obligation to cause same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All such sums
paid by Landlord and all expenses incurred by it in connection therewith
(including, without limitation, attorneys’ fees) shall be payable to Landlord by
Tenant upon demand. Landlord shall have the right at all times to post and keep
posted on the Premises any notices permitted or required by law or that Landlord
shall deem proper for the protection of Landlord, the Premises, the Building and
the Project, from mechanics’ and materialmen’s liens. Tenant shall give to
Landlord at least five (5) business days’ prior written notice of commencement
of any repair or construction on the Premises.
20. Entry By Landlord
     Tenant shall permit Landlord and Landlord’s Agents to enter into and upon
the Premises at all reasonable times, upon reasonable notice (except in the case
of an emergency, for which no notice shall be required), and subject to Tenant’s
reasonable security arrangements, for the purpose of inspecting the same or
showing the Premises to prospective purchasers, lenders or tenants or to provide
services, alter, improve, maintain and repair the Premises or the Building as
required or permitted of Landlord under the terms hereof, or for any other
business purpose, without any rebate of Rent and without any liability to Tenant
for any loss of occupation or quiet enjoyment of the Premises thereby occasioned
(except for actual damages resulting from the gross negligence or willful
misconduct of Landlord); and Tenant shall permit Landlord to post notices of
non-responsibility and ordinary “for sale” or “for lease” signs. No such entry
shall be construed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction or constructive eviction of Tenant from the
Premises. Landlord may temporarily close entrances, doors, corridors, elevators
or other facilities without liability to Tenant by reason of such closure in the
case of an emergency and when Landlord otherwise deems such closure necessary.

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21. Destruction and Damage
     (a) If the Premises are damaged by fire or other perils covered by extended
coverage insurance, Tenant shall give Landlord immediate notice thereof and
Landlord shall, at Landlord’s option:
          (i) In the event of total destruction (which shall mean destruction or
damage in excess of twenty-five percent (25%) of the full insurable value
thereof) of the Premises, elect either to commence promptly to repair and
restore the Premises and prosecute the same diligently to completion, in which
event this Lease shall remain in full force and effect; or not to repair or
restore the Premises, in which event this Lease shall terminate. Landlord shall
give Tenant written notice of its intention within sixty (60) days after the
date Landlord obtains actual knowledge of such destruction (the “Casualty
Discovery Date”). If Landlord elects not to restore the Premises, this Lease
shall be deemed to have terminated as of the Casualty Discovery Date.
          (ii) In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding twenty-five percent (25%) of
the full insurable value thereof) of the Premises for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and restore
such partial destruction and, if the damage thereto is such that the Premises
may be substantially repaired or restored to its condition existing immediately
prior to such damage or destruction within two hundred seventy (270) days from
the Casualty Discovery Date, Landlord shall commence and proceed diligently with
the work of repair and restoration, in which event this Lease shall continue in
full force and effect. If such repair and restoration requires longer than two
hundred seventy (270) days or if the insurance proceeds therefor (plus any
amounts Tenant may elect or is obligated to contribute) are not sufficient to
cover the cost of such repair and restoration, Landlord may elect either to so
repair and restore, in which event this Lease shall continue in full force and
effect, or not to repair or restore, in which event this Lease shall terminate.
In either case, Landlord shall give written notice to Tenant of its intention
within sixty (60) days after the Casualty Discovery Date. If Landlord elects not
to restore the Premises, this Lease shall be deemed to have terminated as of the
Casualty Discovery Date.
          (iii) Notwithstanding anything to the contrary contained in this
Paragraph, in the event of damage to the Premises occurring during the last
twelve (12) months of the Term, Landlord may elect to terminate this Lease by
written notice of such election given to Tenant within thirty (30) days after
the Casualty Discovery Date.
     (b) If the Premises are damaged by any peril not fully covered by insurance
proceeds to be received by Landlord, and the cost to repair such damage exceeds
any amount Tenant may agree to contribute, Landlord may elect either to commence
promptly to repair and restore the Premises and prosecute the same diligently to
completion, in which event this Lease shall remain in full force and effect; or
not to repair or restore the Premises, in which event this Lease shall
terminate. Landlord shall give Tenant written notice of its intention within
sixty (60) days after the Casualty Discovery Date. If Landlord elects not to
restore the Premises, this Lease shall be deemed to have terminated as of the
date on which Tenant surrenders possession of the Premises to Landlord, except
that if the damage to the Premises materially impairs Tenant’s ability to
continue its business operations in the Premises, then this Lease shall be
deemed to have terminated as of the date such damage occurred.

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     (c) If the Premises or any portion thereof is damaged by fire or other
perils, and if (i) the repair and restoration cannot be completed within two
hundred seventy (270) days after the Casualty Discovery Date, or (ii) such
damage occurs during the last twelve (12) months of the Term, then in either
case, Tenant may elect to terminate this Lease by written notice of such
election given to Landlord within thirty (30) days after the Casualty Discovery
Date. In such event, this Lease shall be deemed to have terminated as of the
date on which Tenant surrenders possession of the Project to Landlord.
     (d) Notwithstanding anything to the contrary in this Paragraph 21, Landlord
shall have the option to terminate this Lease, exercisable by notice to Tenant
within sixty (60) days after the Casualty Discovery Date, in each of the
following instances:
          (i) If more than twenty-five percent (25%) of the full insurable value
of the Building or the Project is damaged or destroyed, regardless of whether or
not the Premises are destroyed.
          (ii) If the Building or the Project or any portion thereof is damaged
or destroyed and the repair and restoration of such damage requires longer than
one hundred eighty (180) days from the Casualty Discovery Date, regardless of
whether or not the Premises are destroyed.
          (iii) If the Building or the Project or any portion thereof is damaged
or destroyed and the insurance proceeds therefor are not sufficient to cover the
costs of repair and restoration, regardless of whether or not the Premises are
destroyed.
          (iv) If the Building or the Project or any portion thereof is damaged
or destroyed during the last twelve (12) months of the Term, regardless of
whether or not the Premises are destroyed.
     (e) In the event of repair and restoration as herein provided, the monthly
installments of Base Rent shall be abated proportionately in the ratio which
Tenant’s use of the Premises is impaired during the period of such repair or
restoration; provided, however, that Tenant shall not be entitled to such
abatement to the extent that such damage or destruction resulted from the
criminal acts or willful misconduct of Tenant or Tenant’s Agents. Except as
expressly provided in the immediately preceding sentence with respect to
abatement of Base Rent, Tenant shall have no claim against Landlord for, and
hereby releases Landlord and Landlord’s Agents from responsibility for and
waives its entire claim of recovery for any cost, loss or expense suffered or
incurred by Tenant as a result of any damage to or destruction of the Premises,
the Building or the Project or the repair or restoration thereof, including,
without limitation, any cost, loss or expense resulting from any loss of use of
the whole or any part of the Premises, the Building or the Project and/or any
inconvenience or annoyance occasioned by such damage, repair or restoration.
     (f) If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall repair or restore only the initial tenant improvements,
if any, constructed by Landlord in the Premises pursuant to the terms of this
Lease, substantially to their condition existing immediately prior to the
occurrence of the damage or destruction; and Tenant shall promptly repair and
restore, at Tenant’s expense, Tenant’s Alterations which were not constructed by
Landlord.

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     (g) Tenant hereby waives the provisions of California Civil Code
Section 1932(2) and Section 1933(4) which permit termination of a lease upon
destruction of the leased premises, and the provisions of any similar law now or
hereinafter in effect, and the provisions of this Paragraph 21 shall govern
exclusively in case of such destruction.
22. Condemnation
     (a) If twenty-five percent (25%) or more of either the Premises, the
Building or the Project or the Parking Areas is permanently taken for any public
or quasi-public purpose by any lawful governmental power or authority, by
exercise of the right of appropriation, inverse condemnation, condemnation or
eminent domain, or sold to prevent such taking (each such event being referred
to as a “Condemnation”), Landlord may, at its option, terminate this Lease as of
the date title vests in the condemning party. If twenty-five percent (25%) or
more of the Premises is taken and if the Premises remaining after such
Condemnation and any repairs by Landlord would be untenantable (in Landlord’s
reasonable opinion) for the conduct of Tenant’s business operations, Tenant
shall have the right to terminate this Lease as of the date title vests in the
condemning party. If either party elects to terminate this Lease as provided
herein, such election shall be made by written notice to the other party given
within thirty (30) days after the nature and extent of such Condemnation have
been finally determined. If neither Landlord nor Tenant elects to terminate this
Lease to the extent permitted above, Landlord shall promptly proceed to restore
the Premises, to the extent of any Condemnation award received by Landlord, to
substantially the same condition as existed prior to such Condemnation, allowing
for the reasonable effects of such Condemnation, and a proportionate abatement
shall be made to the Base Rent corresponding to the time during which, and to
the portion of the floor area of the Premises (adjusted for any increase thereto
resulting from any reconstruction) of which, Tenant is deprived on account of
such Condemnation and restoration, as reasonably determined by Landlord. Except
as expressly provided in the immediately preceding sentence with respect to
abatement of Base Rent, Tenant shall have no claim against Landlord for, and
hereby releases Landlord and Landlord’s Agents from responsibility for and
waives its entire claim of recovery for any cost, loss or expense suffered or
incurred by Tenant as a result of any Condemnation, whether permanent or
temporary, or the repair or restoration of the Premises, the Building or the
Project or the Parking Areas following such Condemnation, including, without
limitation, any cost, loss or expense resulting from any loss of use of the
whole or any part of the Premises, the Building, the Project or the Parking
Areas and/or any inconvenience or annoyance occasioned by such Condemnation,
repair or restoration. The provisions of California Code of Civil Procedure
Section 1265.130, which allows either party to petition the Superior Court to
terminate this Lease in the event of a partial taking of the Premises, the
Building or the Project or the Parking Areas, and any other applicable law now
or hereafter enacted, are hereby waived by Tenant.
     (b) Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection with any Condemnation, and Tenant shall have no claim against
Landlord for the value of any unexpired Term of this Lease or otherwise;
provided, however, that Tenant shall be entitled to receive any award separately
allocated by the condemning authority to Tenant for Tenant’s relocation expenses
or the value of Tenant’s Property (specifically excluding fixtures, Alterations
and other components of the Premises which under this Lease or by law are or at
the expiration of the

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Term will become the property of Landlord), provided that such award does not
reduce any award otherwise allocable or payable to Landlord.
23. Assignment and Subletting
     (a) Tenant shall not voluntarily or by operation of law, (i) mortgage,
pledge, hypothecate or encumber this Lease or any interest herein, (ii) assign
or transfer this Lease or any interest herein, sublease the Premises or any part
thereof, or any right or privilege appurtenant thereto, or allow any other
person (the employees and invitees of Tenant excepted) to occupy or use the
Premises, or any portion thereof, without first obtaining the written consent of
Landlord, which consent shall not be unreasonably withheld, as set forth below
in this Paragraph 23; provided, however, that (A) Tenant is not then in Default
under this Lease nor is any event then occurring which with the giving of notice
or the passage of time, or both, would constitute a Default hereunder, and
(B) Tenant has not previously assigned or transferred this Lease or any interest
herein. A transfer of greater than a fifty percent (50%) interest (whether
stock, partnership interest, membership interest or otherwise) of Tenant, either
in one (1) transaction or a series of transactions shall be deemed to be an
assignment under this Lease.
     (b) When Tenant requests Landlord’s consent to an assignment or subletting,
it shall notify Landlord in writing of the name and address of the proposed
assignee or subtenant and the nature and character of the business of the
proposed assignee or subtenant and shall provide current and two (2) years’
prior financial statements for the proposed assignee or subtenant, which
financial statements shall be audited to the extent available and shall in any
event be prepared in accordance with generally accepted accounting principles.
Tenant shall also provide Landlord with a copy of the proposed sublease or
assignment agreement, including all material terms and conditions thereof.
Landlord shall have the option, to be exercised within ten (10) days of receipt
of the foregoing, to (i) terminate this Lease as of the commencement date stated
in any proposed assignment or any proposed sublease of substantially the
entirety of the Premises for substantially the remainder of the Term (excepting,
in either case, any Permitted Transfer), (ii) sublease or take an assignment, as
the case may be, from Tenant of the interest, or any portion thereof, in this
Lease and/or the Premises that Tenant proposes to assign or sublease, on the
same terms and conditions as stated in the proposed sublet or assignment
agreement, (iii) consent to the proposed assignment or sublease, or (iv) refuse
its consent to the proposed assignment or sublease, provided that (A) such
consent shall not be unreasonably withheld so long as Tenant is not then in
Default under this Lease nor is any event then occurring which, with the giving
of notice or the passage of time, or both, would constitute a Default hereunder,
and (B) as a condition to providing such consent, Landlord may require
attornment from the proposed subtenant on terms and conditions reasonably
acceptable to Landlord. In the event Landlord elects to terminate this Lease or
sublease or take an assignment from Tenant of the interest, or portion thereof,
in this Lease and/or the Premises that Tenant proposes to assign or sublease as
provided in the foregoing clauses (i) and (ii), respectively, then Landlord
shall have the additional right to negotiate directly with Tenant’s proposed
assignee or subtenant and to enter into a direct lease or occupancy agreement
with such party on such terms as shall be acceptable to Landlord in its sole and
absolute discretion, and Tenant hereby waives any claims against Landlord
related thereto, including, without limitation, any claims for any compensation
or profit related to such lease or occupancy agreement.

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     (c) Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord shall be entitled to consider all reasonable
criteria including, but not limited to, the following: (i) whether or not the
proposed subtenant or assignee is engaged in a business which, and the use of
the Premises will be in an manner which, is in keeping with the then character
and nature of all other tenancies in the Project; (ii) whether the use to be
made of the Premises by the proposed subtenant or assignee will conflict with
any so-called “exclusive” use then in favor of any other tenant of the Building
or the Project, and whether such use would be prohibited by any other portion of
this Lease, including, but not limited to, any rules and regulations then in
effect, or under applicable Laws, and whether such use imposes a greater load
upon the Premises and the Building and the Project services than imposed by
Tenant; and (iii) the creditworthiness and financial stability of the proposed
assignee or subtenant in light of the responsibilities involved. In any event,
Landlord may withhold its consent to any assignment or sublease, if (A) the
actual use proposed to be conducted in the Premises or portion thereof conflicts
with the provisions of Paragraph 9(a) or (b) above or with any other lease which
restricts the use to which any space in the Building or the Project may be put;
(B) the portion of the Premises proposed to be sublet does not permit safe or
otherwise appropriate means of ingress and egress, or does not comply with
governmental safety and other codes; (C) the proposed sublessee or assignee is
either a governmental or quasi-governmental agency or instrumentality thereof;
(D) the proposed sublessee or assignee has entered into a signed letter of
intent with Landlord to lease space in the Project during the two (2) month
period immediately preceding the date Landlord receives Tenant’s request for
consent; or (E) the proposed subtenant or assignee is a Prohibited Person, as
defined in Paragraph 47.
     (d) If Landlord approves an assignment or subletting as herein provided,
Tenant shall pay to Landlord, as Additional Rent, fifty percent (50%) of the
excess, if any, of (i) the rent and any additional rent payable by the assignee
or sublessee to Tenant, less reasonable and customary market-based leasing
commissions, attorneys’ fees, and the cost of tenant improvements required for
the sublease, if any, incurred by Tenant in connection with such assignment or
sublease; minus (ii) Base Rent plus Additional Rent allocable to that part of
the Premises affected by such assignment or sublease pursuant to the provisions
of this Lease. The assignment or sublease agreement, as the case may be, after
approval by Landlord, shall not be amended without Landlord’s prior written
consent, and shall contain a provision directing the assignee or subtenant to
pay the rent and other sums due thereunder directly to Landlord upon receiving
written notice from Landlord that Tenant is in default under this Lease with
respect to the payment of Rent. In the event that, notwithstanding the giving of
such notice, Tenant collects any rent or other sums from the assignee or
subtenant, then Tenant shall hold such sums in trust for the benefit of Landlord
and shall immediately forward the same to Landlord. Landlord’s collection of
such rent and other sums shall not constitute an acceptance by Landlord of
attornment by such assignee or subtenant.
     (e) Notwithstanding any assignment or subletting, Tenant and any guarantor
or surety of Tenant’s obligations under this Lease shall at all times remain
fully and primarily responsible and liable for the payment of the Rent and for
compliance with all of Tenant’s other obligations under this Lease (regardless
of whether Landlord’s approval has been obtained for any such assignment or
subletting).

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     (f) Tenant shall reimburse Landlord for its actual and reasonable
out-of-pocket fees (including, without limitation, the fees of Landlord’s
counsel), incurred in connection with Landlord’s review and processing of
documents regarding any proposed assignment or sublease; provided, however that
the fees associated with the first version of any consent agreement delivered to
Tenant shall not exceed $2,500.00.
     (g) A consent to one assignment, subletting, occupation or use shall not be
deemed to be a consent to any other or subsequent assignment, subletting,
occupation or use, and consent to any assignment or subletting shall in no way
relieve Tenant of any liability under this Lease. Any assignment or subletting
without Landlord’s consent shall be void, and shall, at the option of Landlord,
constitute a Default under this Lease.
     (h) Tenant acknowledges and agrees that the restrictions, conditions and
limitations imposed by this Paragraph 23 on Tenant’s ability to assign or
transfer this Lease or any interest herein, to sublet the Premises or any part
thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or use the Premises or any
portion thereof, are, for the purposes of California Civil Code Section 1951.4,
as amended from time to time, and for all other purposes, reasonable at the time
that this Lease was entered into, and shall be deemed to be reasonable at the
time that Tenant seeks to assign or transfer this Lease or any interest herein,
to sublet the Premises or any part thereof, to transfer or assign any right or
privilege appurtenant to the Premises, or to allow any other person to occupy or
use the Premises or any portion thereof.
     (i) Notwithstanding anything in this Lease to the contrary, in the event
Landlord consents to an assignment or subletting by Tenant in accordance with
the terms of this Paragraph 23, Tenant’s assignee or subtenant shall have no
right to further assign this Lease or any interest therein or thereunder or to
further sublease all or any portion of the Premises without Landlord’s consent
per this Paragraph 23.
     (j) If this Lease is assigned, whether or not in violation of the
provisions of this Lease, Landlord may collect Rent from the assignee. If the
Premises or any part thereof is sublet or used or occupied by anyone other than
Tenant, whether or not in violation of this Lease, Landlord may, after a Default
by Tenant, collect Rent from the subtenant or occupant. In either event,
Landlord may apply the net amount collected to Rent, but no such assignment,
subletting, occupancy or collection shall be deemed a waiver of any of the
provisions of this Paragraph 23, or the acceptance of the assignee, subtenant or
occupant as tenant, or a release of Tenant from the further performance by
Tenant of Tenant’s obligations under this Lease. The consent by Landlord to an
assignment, mortgaging, pledging, encumbering, transfer, use, occupancy or
subletting pursuant to any provision of this Lease shall not, except as
otherwise provided herein, in any way be considered to relieve Tenant from
obtaining the express consent of Landlord to any other or further assignment,
mortgaging, pledging, encumbering, transfer, use, occupancy or subletting.
References in this Lease to use or occupancy by anyone other than Tenant shall
not be construed as limited to subtenants and those claiming under or through
subtenants but as including also licensees or others claiming under or through
Tenant, immediately or remotely. The listing of any name other than that of
Tenant on any door of the Premises or on any directory or in any elevator in the
Building, or otherwise, shall not, except as otherwise provided herein, operate
to vest in the person so named any right or interest in this Lease or in the
Premises, or be

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deemed to constitute, or serve as a substitute for, or any waiver of, any prior
consent of Landlord required under this Paragraph 23.
     (k) Each subletting and/or assignment pursuant to this Paragraph shall be
subject to all of the covenants, agreements, terms, provisions and conditions
contained in this Lease and each of the covenants, agreements, terms, provisions
and conditions of this Lease shall be automatically incorporated therein. If
Landlord shall consent to, or reasonably withhold its consent to, any proposed
assignment or sublease, Tenant shall indemnify, defend and hold harmless
Landlord against and from any and all loss, liability, damages, costs and
expenses (including reasonable counsel fees) resulting from any claims that may
be made against Landlord by the proposed assignee or sublessee or by any brokers
or other persons claiming a commission or similar fee in connection with the
proposed assignment or sublease.
     (l) Notwithstanding anything in Paragraph 23(a) above to the contrary,
Tenant may, without obtaining the prior consent of Landlord, without Landlord’s
having any rights pursuant to clause (i) or (ii) of Paragraph 23(b) above, and
without the payment of any amounts pursuant to Paragraph 23(d) above, assign,
transfer or sublease this Lease or the whole or any part of the Premises to any
corporation or other entity which (a) controls, is controlled by, or is under
common control with Tenant, (b) acquires all or substantially all of Tenant’s
assets or stock, or (c) results from the merger or consolidation of Tenant with
another entity (each, a “Permitted Transfer”); provided that (i) Tenant shall
give not less than ten (10) days prior written notice thereof to Landlord (to
the extent such notice is permitted by applicable Law), (ii) Tenant shall
continue to be fully obligated under this Lease, (iii) any such assignee or
sublessee shall expressly assume and agree to perform all the terms and
conditions of this Lease to be performed by Tenant (but with respect to a
sublease, only with respect to that portion of the Premises that is the subject
of the sublease and excluding all rental obligations of Tenant hereunder), and
(iv) the assignee or sublessee (“Permitted Transferee”) shall have a tangible
net worth, determined in accordance with generally accepted accounting
principles consistently applied (“Net Worth”), at least equal to Tenant’s Net
Worth as of the date of the Transfer. Tenant shall also have the right without
Landlord’s consent and not subject to this Paragraph 23, to sublease or license
space in the Premises to “Strategic Partner(s)” which are individuals or
entities that are working with Tenant and Tenant desires that they share space
in the Premises with Tenant to facilitate that strategic alliance.
     (m) Notwithstanding anything in Paragraph 23(a) above to the contrary,
Landlord shall permit Tenant to license space in the Premises to any one or more
Strategic Partners (as hereinafter defined) upon written notice to Landlord but
without Tenant being required to obtain Landlord’s prior written consent,
provided (i) the aggregate square feet of space so licensed to all Strategic
Partners at each and every point in time during the Term is no more than fifteen
percent (15%) of the Premises, (ii) the term of each such license shall expire
on or before the expiration or sooner termination of the Lease, (iii) each such
license is expressly subject and subordinate to this Lease, (iv) Tenant shall
ensure that each such license does not violate any of the provisions of this
Lease or cause Tenant to violate any such provisions, and (v) no such licensee
shall use, store, generate, release or otherwise handle in, on or about the
Premises any Hazardous Materials except for minor amounts thereof commonly used
for office purposes (e.g., white out, copier toner). A “Strategic Partner” shall
mean individuals or other entities who transact business with Tenant in the
ordinary course during the license period and who use space in the Premises for

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period of time which is no longer than one year. All Strategic Partners shall be
deemed to be Tenant’s Agents for purposes of this Lease. If Tenant at any time
during the Term is no longer Callidus Software Inc. a Delaware corporation and
any Permitted Transferees, then the provisions of this paragraph regarding
Tenant’s right to license space in the Premises to Strategic Partners without
the prior written consent of Landlord shall no longer be applicable, and all
further licenses shall be effectuated, if at all, only after Tenant first
obtains Landlord’s prior written consent thereto in accordance with this
Paragraph 23. If Landlord determines in its good faith discretion that any
license to a Strategic Partner effected pursuant to this Paragraph 23(m) is
inconsistent with the standards of a Class A office project, is detrimental to
the reputation or standing of the Project, or violates any exclusives within the
Project, then Tenant shall cause such license to be terminated within thirty
(30) days’ written notice from Landlord.

24.   Default

     The occurrence of any one of the following events shall constitute a
default on the part of Tenant (“Default”):
     (a) The abandonment of the Premises without the payment of rent due by
Tenant for a period of ten (10) consecutive days or any vacation or abandonment
of the Premises by Tenant which would cause any insurance policy to be
invalidated or otherwise lapse, in each of the foregoing cases irrespective of
whether or not Tenant is then in monetary default under this Lease. Tenant
agrees to notice and service of notice as provided for in this Lease and waives
any right to any other or further notice or service of notice which Tenant may
have under any statute or law now or hereafter in effect;
     (b) Failure to pay any installment of Rent or any other monies due and
payable hereunder, said failure continuing for a period of three (3) days after
notice of delinquency;
     (c) A general assignment by Tenant or any guarantor or surety of Tenant’s
obligations hereunder, including, without limitation, Lease Guarantor, if any
(collectively, “Guarantor”) for the benefit of creditors;
     (d) The filing of a voluntary petition in bankruptcy by Tenant or any
Guarantor, the filing by Tenant or any Guarantor of a voluntary petition for an
arrangement, the filing by or against Tenant or any Guarantor of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by the creditors of Tenant or any Guarantor, said involuntary petition
remaining undischarged for a period of sixty (60) days;
     (e) Receivership, attachment, or other judicial seizure of substantially
all of Tenant’s assets on the Premises, such attachment or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after the
levy thereof;
     (f) Death or disability of Tenant or any Guarantor, if Tenant or such
Guarantor is a natural person, or the failure by Tenant or any Guarantor to
maintain its legal existence, if Tenant or such Guarantor is a corporation,
partnership, limited liability company, trust or other legal entity;
     (g) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required

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by Paragraphs 30 or 31 or 42, and/or failure by Tenant to deliver to Landlord
any financial statement within the time period and in the manner required by
Paragraph 40 and each such failure continues for three (3) days after written
notice that the same are past due;
     (h) An assignment or sublease, or attempted assignment or sublease, of this
Lease or the Premises by Tenant contrary to the provision of Paragraph 23,
unless such assignment or sublease is expressly conditioned upon Tenant having
received Landlord’s consent thereto;
     (i) Failure of Tenant to restore the Security Deposit to the amount and
within the time period provided in Paragraph 7 above;
     (j) Failure in the performance of any of Tenant’s covenants, agreements or
obligations hereunder (except those failures specified as events of Default in
any other subparagraphs of this Paragraph 24, which shall be governed by the
notice and cure periods set forth in such other subparagraphs), which failure
continues for thirty (30) days after written notice thereof from Landlord to
Tenant, provided that, if Tenant has exercised reasonable diligence to cure such
failure and such failure cannot be cured within such thirty (30) day period
despite reasonable diligence, Tenant shall not be in default under this
subparagraph so long as Tenant thereafter diligently and continuously prosecutes
the cure to completion and actually completes such cure within sixty (60) days
after the giving of the aforesaid written notice;
     (k) Chronic delinquency by Tenant in the payment of Rent, or any other
periodic payments required to be paid by Tenant under this Lease. “Chronic
delinquency” means failure by Tenant to pay Rent, or any other payments required
to be paid by Tenant under this Lease within three (3) days after written notice
thereof for any three (3) months (consecutive or nonconsecutive) during any
period of twelve (12) months;
     (l) Chronic overuse by Tenant or Tenant’s Agents of the number of
undesignated parking spaces set forth in the Basic Lease Information. “Chronic
overuse” means use by Tenant or Tenant’s Agents of a number of parking spaces
greater than the number of parking spaces set forth in the Basic Lease
Information more than three (3) times during the Term after written notice by
Landlord;
     (m) Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or be reduced or
materially changed, except as permitted in this Lease;
     (n) Any failure by Tenant to discharge any lien or encumbrance placed on
the Project or any part thereof in violation of this Lease within twenty
(20) days after the date such lien or encumbrance is filed or recorded against
the Project or any part thereof;
     (o) Any failure by Tenant to immediately remove, abate or remedy any
Hazardous Materials located in, on or about the Premises or the Building in
connection with any failure by Tenant to comply with Tenant’s obligations under
Paragraph 32;
     (p) Tenant’s failure to commence business operations in the Premises within
ninety (90) days following the Commencement Date, subject to delays beyond
Tenant’s reasonable control (other than financial difficulty); and

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     (q) Any representation of Tenant herein or in any financial statement or
other materials provided by Tenant or any guarantor of Tenant’s obligations
under this Lease shall prove to be untrue or inaccurate in any material respect,
or any such financial statements or other materials shall have omitted any
material fact.
     Tenant agrees that any notice given by Landlord pursuant to
Paragraph 24(j), (k) or (l) above shall satisfy the requirements for notice
under California Code of Civil Procedure Section 1161, and Landlord shall not be
required to give any additional notice in order to be entitled to commence an
unlawful detainer proceeding.

25.   Landlord’s Remedies

     (a) Termination. In the event of any Default by Tenant, then in addition to
any other remedies available to Landlord at law or in equity and under this
Lease, Landlord may terminate this Lease immediately and all rights of Tenant
hereunder by giving written notice to Tenant of such intention to terminate. If
Landlord shall elect to so terminate this Lease then Landlord may recover from
Tenant:
          (i) the worth at the time of award of any unpaid Rent and any other
sums due and payable which have been earned at the time of such termination;
plus
          (ii) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
          (iii) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the Term after the
time of award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; plus
          (iv) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom; plus
          (v) such reasonable attorneys’ fees incurred by Landlord as a result
of a Default, and costs in the event suit is filed by Landlord to enforce such
remedy; and plus
          (vi) at Landlord’s election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.
As used in subparagraphs (i) and (ii) above, the “worth at the time of award” is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (iii) above, the “worth at the time of award” is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%). Tenant waives redemption
or relief from forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other pertinent present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
Default of Tenant hereunder.

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     (b) Continuation of Lease. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant’s
Default and abandonment and recover Rent as it becomes due, provided that Tenant
has the right to sublet or assign, subject only to reasonable limitations). In
addition, Landlord shall not be liable in any way whatsoever for its failure or
refusal to relet the Premises. For purposes of this Paragraph 25(b), the
following acts by Landlord will not constitute the termination of Tenant’s right
to possession of the Premises:
          (i) Acts of maintenance or preservation or efforts to relet the
Premises, including, but not limited to, alterations, remodeling, redecorating,
repairs, replacements and/or painting as Landlord shall consider advisable for
the purpose of reletting the Premises or any part thereof; or
          (ii) The appointment of a receiver upon the initiative of Landlord to
protect Landlord’s interest under this Lease or in the Premises.
     (c) Re-entry. In the event of any Default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, in compliance with
applicable law, to re-enter the Premises, by force if necessary, and remove all
persons and property from the Premises; such property may be removed and stored
in a public warehouse or elsewhere at the cost of and for the account of Tenant.
     (d) Reletting. In the event of the abandonment of the Premises by Tenant or
in the event that Landlord shall elect to re-enter as provided in Paragraph
25(b) or shall take possession of the Premises pursuant to legal proceeding or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in Paragraph 25(a), Landlord may from time to
time, without terminating this Lease, relet the Premises or any part thereof for
such term or terms and at such rental or rentals and upon such other terms and
conditions as Landlord in its sole discretion may deem advisable with the right
to make alterations and repairs to the Premises in Landlord’s sole discretion.
In the event that Landlord shall elect to so relet, then rentals received by
Landlord from such reletting shall be applied in the following order: (i) to
reasonable attorneys’ fees incurred by Landlord as a result of a Default and
costs in the event suit is filed by Landlord to enforce such remedies; (ii) to
the payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord; (iii) to the payment of any costs of such reletting; (iv) to the
payment of the costs of any alterations and repairs to the Premises; (v) to the
payment of Rent due and unpaid hereunder; and (vi) the residue, if any, shall be
held by Landlord and applied in payment of future Rent and other sums payable by
Tenant hereunder as the same may become due and payable hereunder. Should that
portion of such rentals received from such reletting during any month, which is
applied to the payment of Rent hereunder, be less than the Rent payable during
the month by Tenant hereunder, then Tenant shall pay such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall
also pay to Landlord, as soon as ascertained, any costs and expenses incurred by
Landlord in such reletting or in making such alterations and repairs not covered
by the rentals received from such reletting.
     (e) Termination. No re-entry or taking of possession of the Premises by
Landlord pursuant to this Paragraph 25 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by

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a court of competent jurisdiction. Notwithstanding any reletting without
termination by Landlord because of any Default by Tenant, Landlord may at any
time after such reletting elect to terminate this Lease for any such Default.
     (f) Cumulative Remedies. The remedies herein provided are not exclusive and
Landlord shall have any and all other remedies provided herein or by law or in
equity.
     (g) No Surrender. No act or conduct of Landlord, whether consisting of the
acceptance of the keys to the Premises, or otherwise, shall be deemed to be or
constitute an acceptance of the surrender of the Premises by Tenant prior to the
expiration of the Term, and such acceptance by Landlord of surrender by Tenant
shall only flow from and must be evidenced by a written acknowledgment of
acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects
in writing that such merger take place, but shall operate as an assignment to
Landlord of any and all existing subleases, or Landlord may, at its option,
elect in writing to treat such surrender as a merger terminating Tenant’s estate
under this Lease, and thereupon Landlord may terminate any or all such subleases
by notifying the sublessee of its election so to do within five (5) days after
such surrender.
26. Landlord’s Right to Perform Tenant’s Obligations
     (a) Without limiting the rights and remedies of Landlord contained in
Paragraph 25 above, if Tenant shall be in Default in the performance of any of
the terms, provisions, covenants or conditions to be performed or complied with
by Tenant pursuant to this Lease, then Landlord may at Landlord’s option,
without any obligation to do so, and without notice to Tenant perform any such
term, provision, covenant, or condition, or make any such payment and Landlord
by reason of so doing shall not be liable or responsible for any loss or damage
thereby sustained by Tenant or anyone holding under or through Tenant or any of
Tenant’s Agents.
     (b) Without limiting the rights of Landlord under Paragraph 26(a) above,
Landlord shall have the right at Landlord’s option, without any obligation to do
so, to perform any of Tenant’s covenants or obligations under this Lease without
notice to Tenant in the case of an emergency, as determined by Landlord in its
sole and absolute judgment, or if Landlord otherwise determines in its sole
discretion that such performance is necessary or desirable for the proper
management and operation of the Building or the Project or for the preservation
of the rights and interests or safety of other tenants of the Building or the
Project.
     (c) If Landlord performs any of Tenant’s obligations hereunder in
accordance with this Paragraph 26, the full amount of the cost and expense
incurred or the payment so made or the amount of the loss so sustained shall
immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to
Landlord upon demand, as Additional Rent, the full amount thereof with interest
thereon from the date of payment by Landlord at the lower of (i) twelve percent
(12%) per annum, or (ii) the highest rate permitted by applicable law.
27. Attorneys’ Fees
     (a) If either party hereto fails to perform any of its obligations under
this Lease or if any dispute arises between the parties hereto concerning the
meaning or interpretation of any

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provision of this Lease, then the defaulting party or the party not prevailing
in such dispute, as the case may be, shall pay any and all costs and expenses
incurred by the other party on account of such default and/or in enforcing or
establishing its rights hereunder, including, without limitation, court costs
and reasonable attorneys’ fees and disbursements. Any such attorneys’ fees and
other expenses incurred by either party in enforcing a judgment in its favor
under this Lease shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneys’ fees obligation is
intended to be severable from the other provisions of this Lease and to survive
and not be merged into any such judgment.
     (b) Without limiting the generality of Paragraph 27(a) above, if Landlord
utilizes the services of an attorney for the purpose of collecting any Rent due
and unpaid by Tenant or in connection with any other breach of this Lease by
Tenant, Tenant agrees to pay Landlord actual attorneys’ fees as determined by
Landlord for such services, regardless of the fact that no legal action may be
commenced or filed by Landlord.
28. Taxes
     Tenant shall be liable for and shall pay directly to the taxing authority,
prior to delinquency, all taxes levied against Tenant’s Property. If any
Alteration installed by Tenant pursuant to Paragraph 12 or any of Tenant’s
Property is assessed and taxed with the Project or the Building, Tenant shall
pay such taxes to Landlord within ten (10) days after delivery to Tenant of a
statement therefor.
29. Effect of Conveyance
     The term “Landlord” as used in this Lease means, from time to time, the
then current owner of the Building or the Project containing the Premises, so
that, in the event of any sale of the Building or the Project, Landlord shall be
and hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder (provided that the Security Deposit is transferred to the new
owner), and it shall be deemed and construed, without further agreement between
the parties and the purchaser at any such sale, that the purchaser of the
Building or the Project has assumed and agreed to carry out any and all
covenants and obligations of Landlord hereunder.
30. Tenant’s Estoppel Certificate
     From time to time, upon written request of Landlord, Tenant shall execute,
acknowledge and deliver to Landlord or its designee, an Estoppel Certificate in
substantially the form attached hereto as Exhibit D and with any other
statements reasonably requested by Landlord or its designee. Any such Estoppel
Certificate may be relied upon by a prospective purchaser of Landlord’s interest
or a mortgagee of (or holder of a deed of trust encumbering) Landlord’s interest
or assignment of any mortgage or deed of trust upon Landlord’s interest in the
Premises. If Tenant fails to provide such certificate within ten (10) business
days of receipt by Tenant of a written request by Landlord as herein provided,
such failure shall, at Landlord’s election, constitute a Default under this
Lease, and Tenant shall be deemed to have given such certificate as above
provided without modification and shall be deemed to have admitted the accuracy
of

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any information supplied by Landlord to a prospective purchaser or mortgagee or
deed of trust holder.
31. Subordination
     At the option of Landlord, this Lease, and all rights of Tenant hereunder,
are and shall be subject and subordinate to all ground leases, overriding leases
and underlying leases affecting the Building or the Project now or hereafter
existing and each of the terms, covenants and conditions thereto (the “Superior
Lease(s)”), and to all mortgages or deeds of trust which may now or hereafter
affect the Building, the Property or any of such leases and each of the terms,
covenants and conditions thereto (the “Superior Mortgage(s)”), whether or not
such mortgages or deeds of trust shall also cover other land, buildings or
leases, to each and every advance made or hereafter to be made under such
mortgages or deeds of trust, and to all renewals, modifications, replacements
and extensions of such leases and such mortgages or deeds of trust and spreaders
and consolidations of such mortgages or deeds of trust. This Paragraph shall be
self-operative and no further instrument of subordination shall be required.
Tenant shall promptly execute, acknowledge and deliver any reasonable instrument
that Landlord, the lessor under any such lease or the holder of any such
mortgage or deed of trust or any of their respective successors in interest may
reasonably request to evidence such subordination; if Tenant fails to execute,
acknowledge or deliver any such instrument within ten (10) business days after
request therefor, Tenant hereby irrevocably constitutes and appoints Landlord as
Tenant’s attorney-in-fact, coupled with an interest, to execute and deliver any
such instrument for and on behalf of Tenant. As used herein the lessor of a
Superior Lease or its successor in interest is herein called “Superior Lessor”;
and the holder of a Superior Mortgage is herein called “Superior Mortgagee.”
     Notwithstanding the foregoing provisions of this Paragraph 31, as to any
Superior Mortgage against or affecting any or all of the Building or the
Premises or any or all of the Building and improvements now or at any time
hereafter constituting a part of or adjoining the Building in place at the time
of execution of this Lease, Landlord shall use reasonable efforts to obtain an
agreement from the holder thereof in recordable form and substantially in the
form attached hereto as Exhibit E or otherwise in form and substance reasonably
acceptable to Tenant, whereby the holder of such Superior Mortgage agrees that
Tenant, upon paying the Base Rent and all of the Additional Rent and other
charges herein provided for, and observing and complying with the covenants,
agreements and conditions of this Lease on its part to be observed and complied
with, shall lawfully and quietly hold, occupy and enjoy the Premises during the
Term (including any exercised renewal term), without hindrance or interference
from anyone claiming by or through said Superior Mortgagee and that said
Superior Mortgagee shall respect Tenant’s rights under this Lease and, upon
succeeding to Landlord’s interest in the Building and Lease, shall observe and
comply with all of Landlord’s duties under this Lease (hereinafter referred to
as a Nondisturbance Agreement). Notwithstanding the first paragraph of this
Section 31, Tenant shall not be obligated to subordinate to any Superior Lease
or Superior Mortgage unless such subordination contains a Non-Disturbance
Agreement.
     If any Superior Lessor or Superior Mortgagee shall succeed to the rights of
Landlord under this Lease, whether through possession or foreclosure action or
delivery of a new lease or deed (such party so succeeding to Landlord’s rights
herein called “Successor Landlord”), then Tenant shall attorn to and recognize
such Successor Landlord as Tenant’s landlord under this Lease

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(without the need for further agreement) and shall promptly execute and deliver
any reasonable instrument that such Successor Landlord may reasonably request to
evidence such attornment. This Lease shall continue in full force and effect as
a direct lease between the Successor Landlord and Tenant upon all of the terms,
conditions and covenants as are set forth in this Lease, except that the
Successor Landlord shall not (a) be liable for any previous act or omission of
Landlord under this Lease, except to the extent such act or omission shall
constitute a continuing Landlord default hereunder; (b) be subject to any
offset, not expressly provided for in this Lease; or (c) be bound by any
previous modification of this Lease or by any previous prepayment of more than
one month’s Base Rent, unless such modification or prepayment shall have been
expressly approved in writing by the Successor Landlord (or its predecessor in
interest).
32. Environmental Covenants
     (a) As used in this Lease, the term “Hazardous Materials” means (i) any
substance or material that is included within the definitions of “hazardous
substances,” “hazardous materials,” “toxic substances,” “pollutant,”
“contaminant,” “hazardous waste,” or “solid waste” in any Environmental Law;
(ii) petroleum or petroleum derivatives, including crude oil or any fraction
thereof, all forms of natural gas, and petroleum products or by-products or
waste; (iii) polychlorinated biphenyls (PCBs); (iv) asbestos and asbestos
containing materials (whether friable or non-friable); (v) lead and lead based
paint or other lead containing materials (whether friable or non-friable);
(vi) urea formaldehyde; (vii) microbiological pollutants; (viii) batteries or
liquid solvents or similar chemicals; (ix) radon gas; and (x) mildew, fungus,
mold, bacteria and/or other organic spore material, whether or not airborne,
colonizing, amplifying or otherwise.
     (b) As used in this Lease, the term “Environmental Laws” means all
statutes, terms, conditions, limitations, restrictions, standards, prohibitions,
obligations, schedules, plans and timetables that are contained in or
promulgated pursuant to any federal, state or local laws (including rules,
regulations, ordinances, codes, judgments, orders, decrees, contracts, permits,
stipulations, injunctions, the common law, court opinions, and demand or notice
letters issued, entered, promulgated or approved thereunder), relating to
pollution or the protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of Hazardous Materials
into ambient air, surface water, ground water or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials including, but not limited to:
Comprehensive Environmental Response Compensation and Liability Act of 1980
(CERCLA), as amended by the Superfund Amendments and Reauthorization Act of 1986
(SARA), 42 U.S.C. 9601 et seq.; Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 (RCRA), 42 U.S.C. 6901 et seq.;
Federal Water Pollution Control Act, 33 U.S.C. 1251 et seq.; Toxic Substances
Control Act, 15 U.S.C. 2601 et seq.; Clean Air Act, 42 U.S.C. 7401 et seq.; the
Safe Drinking Water Act, 42 U.S.C. § 300f et seq. and Sections 25115, 25117,
25122.7, 25140, 25249.8, 25281, 25316, and 25501 of the California Health and
Safety Code. “Environmental Laws” shall include any statutory or common law that
has developed or develops in the future regarding mold, fungus, microbiological
pollutants, mildew, bacteria and/or other organic spore material. “Environmental
Laws” shall not include laws relating to industrial hygiene or worker

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safety, except to the extent that such laws address asbestos and asbestos
containing materials (whether friable or non-friable) or lead and lead based
paint or other lead containing materials.
     (c) During its use and occupancy of the Premises Tenant will not permit
Hazardous Materials to be present on or about the Premises except for normal
quantities of cleaning and other business supplies customarily used and stored
in an office and that it will comply with all Environmental Laws relating to the
use, storage or disposal of any such Hazardous Materials.
     (d) If Tenant’s use of Hazardous Materials on or about the Premises results
in a release, discharge or disposal of Hazardous Materials on, in, at, under, or
emanating from, the Premises or the property in which the Premises are located,
Tenant agrees to investigate, clean up, remove or remediate such Hazardous
Materials in full compliance with (i) the requirements of (A) all Environmental
Laws and (B) any governmental agency or authority responsible for the
enforcement of any Environmental Laws; and (ii) any additional requirements of
Landlord that are necessary, in Landlord’s sole discretion, to protect the value
of the Premises or the property in which the Premises are located. Additionally,
if Tenant’s use of Hazardous Materials on or about the Premises results in a
release, discharge or disposal of Hazardous Materials on, in, at, under, or
emanating from, the Premises or the Property in which the Premises are located,
Landlord shall also have the right, but not the obligation, to take whatever
action with respect to any such Hazardous Materials that it deems necessary, in
Landlord’s sole discretion, to protect the value of the Premises or the property
in which the Premises are located. All costs and expenses paid or incurred by
Landlord in the exercise of such right shall be payable by Tenant promptly upon
demand.
     (e) Upon reasonable notice to Tenant, Landlord may inspect the Premises for
the purpose of determining whether there exists on the Premises any Hazardous
Materials or other condition or activity that is in violation of the
requirements of this Lease or of any Environmental Laws. The right granted to
Landlord herein to perform inspections shall not create a duty on Landlord’s
part to inspect the Premises, or liability on the part of Landlord for Tenant’s
use, storage or disposal of Hazardous Materials, it being understood that Tenant
shall be solely responsible for all liability in connection therewith.
     (f) Except for any preexisting or other causes or conditions for which
Tenant is not responsible, Tenant shall surrender the Premises to Landlord upon
the expiration or earlier termination of this Lease free of (i) mold, Mold
Conditions (defined below), debris, waste and (ii) Hazardous Materials and in a
condition which complies with all Environmental Laws and any additional
requirements of Landlord that are reasonably necessary to protect the value of
the Premises, the Building or the Project. Tenant’s obligations and liabilities
pursuant to this Paragraph 32 shall be in addition to any other surrender
requirements in this Lease and shall survive the expiration or earlier
termination of this Lease. For purposes hereof, the term “normal wear and tear”
shall not include any deterioration in the condition or diminution of the value
of any portion of the Premises, the Building, and/or the Project in any manner
whatsoever related to directly, or indirectly, Hazardous Materials for which
Tenant is responsible hereunder.
     (g) Tenant shall indemnify and hold harmless Landlord from and against any
and all claims, damages, fines, judgments, penalties, costs, losses (including,
without limitation, loss in value of the Premises or the property in which the
Premises is located, damages due to loss or

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restriction of rentable or usable space, and damages due to any adverse impact
on marketing of the space and any and all sums paid for settlement of claims),
liabilities and expenses (including, without limitation, attorneys’,
consultants’, and experts’ fees) incurred by Landlord during or after the Term
and attributable to (i) any Hazardous Materials placed on or about the Premises,
the Building or the Project by Tenant or Tenant’s Agents, or resulting from the
action or inaction of Tenant or Tenant’s Agents, or (ii) Tenant’s breach of any
provision of this Paragraph 32. This indemnification includes, without
limitation, any and all costs incurred by Landlord due to any investigation of
the site or any cleanup, removal or restoration mandated by a federal, state or
local agency or political subdivision.
     (h) Because mold spores are present essentially everywhere and mold can
grow in almost any moist location, Tenant acknowledges the necessity of adopting
and enforcing good housekeeping practices, ventilation and vigilant moisture
control within the Premises (particularly in kitchen areas, janitorial closets,
bathrooms, in and around water fountains and other plumbing facilities and
fixtures, break rooms, in and around outside walls, and in and around HVAC
systems and associated drains) for the prevention of mold (such measures, “Mold
Prevention Practices”). Tenant will, at its sole cost and expense, keep and
maintain the Premises in good order and condition in accordance with the Mold
Prevention Practices and acknowledges that the control of moisture, and
prevention of mold within the Premises, are integral to its obligations under
this Lease.
     (i) Tenant, at its sole cost and expense, shall:
          (i) Regularly monitor the Premises for the presence of mold and any
conditions that reasonably can be expected to give rise to or be attributed to
mold or fungus including, but not limited to, observed or suspected instances of
water damage, condensation, seepage, leaks or any other water collection or
penetration (from any source, internal or external), mold growth, mildew,
repeated complaints of respiratory ailments or eye irritation by Tenant’s
employees or any other occupants of the Premises, or any notice from a
governmental agency of complaints regarding the indoor air quality at the
Premises (the “Mold Conditions”); and
          (ii) Immediately notify Landlord in writing if it observes, suspects,
has reason to believe mold or Mold Conditions in, at, or about the Premises or a
surrounding area.
     (j) In the event of suspected mold or Mold Conditions in, at, or about the
Premises and surrounding areas, Landlord may cause an inspection of the Premises
to be conducted, during such time as Landlord may designate, to determine if
mold or Mold Conditions are present in, at, or about the Premises.
     (k) Tenant hereby releases and relieves Landlord from any and all liability
for bodily injury and damage to property, waives any and all claims against
Landlord and assumes all risk of personal injury and property damage related to
or allegedly caused by or associated with any mold or Mold Conditions in or on
the Premises existing on the Commencement Date or arising thereafter.
     The provisions of this Paragraph 32 shall survive the expiration or earlier
termination of this Lease.

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33. Notices
     All notices and demands which are required or may be permitted to be given
to either party by the other hereunder shall be in writing and shall be sent by
United States mail, postage prepaid, certified, or by personal delivery or
nationally recognized overnight courier, addressed to the addressee at Tenant’s
Address or Landlord’s Address as specified in the Basic Lease Information, or to
such other place as either party may from time to time designate in a notice to
the other party given as provided herein. Copies of all notices and demands
given to Landlord shall additionally be sent to Landlord’s property manager at
the address specified in the Basic Lease Information or at such other address as
Landlord may specify in writing from time to time. Notice shall be deemed given
upon actual receipt (or attempted delivery if delivery is refused), if
personally delivered, or one (1) business day following deposit with a reputable
overnight courier that provides a receipt, or on the third (3rd) day following
deposit in the United States mail in the manner described above.
34. Waiver
     The waiver of any breach of any term, covenant or condition of this Lease
shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition herein
contained. The subsequent acceptance of Rent by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant, other than the failure of Tenant
to pay the particular rental so accepted, regardless of Landlord’s knowledge of
such preceding breach at the time of acceptance of such Rent. No delay or
omission in the exercise of any right or remedy of Landlord in regard to any
Default by Tenant shall impair such a right or remedy or be construed as a
waiver. Any waiver by Landlord of any Default must be in writing and shall not
be a waiver of any other Default concerning the same or any other provisions of
this Lease.
35. Holding Over
     Any holding over after the expiration of the Term, without the express
written consent of Landlord, shall constitute a Default and, without limiting
Landlord’s remedies provided in this Lease, such holding over shall be construed
to be a tenancy at sufferance, at a rental rate equal to the greater of the fair
market rental value for the Premises (as reasonably determined by Landlord) or
one hundred fifty percent (150%) of the Base Rent last due in this Lease, plus
one hundred percent (100%) of the Additional Rent, and shall otherwise be on the
terms and conditions herein specified, so far as applicable; provided, however,
that in no event shall any renewal or expansion option, option to purchase, or
other similar right or option contained in this Lease be deemed applicable to
any such tenancy at sufferance.
36. Successors and Assigns
     The terms, covenants and conditions of this Lease shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto. If Tenant shall consist
of more than one entity or person, the obligations of Tenant under this Lease
shall be joint and several.

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37. Time
     Time is of the essence of this Lease and each and every term, condition and
provision herein.
38. Brokers
     Landlord and Tenant each represents and warrants to the other that neither
it nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate broker except the Broker(s) specified in the Basic Lease Information
in the negotiating or making of this Lease, and each party agrees to indemnify
and hold harmless the other from any claim or claims, and costs and expenses,
including attorneys’ fees, incurred by the indemnified party in conjunction with
any such claim or claims of any other broker or brokers to a commission in
connection with this Lease as a result of the actions of the indemnifying party.
39. Limitation of Liability
     In the event of any default or breach by Landlord under this Lease or
arising in connection herewith or with Landlord’s operation, management,
leasing, repair, renovation, alteration or any other matter relating to the
Project or the Premises, Tenant’s remedies shall be limited solely and
exclusively to an amount which is equal to the lesser of (a) the interest in the
Building of the then-current Landlord or (b) the equity interest Landlord would
have in the Building if the Building were encumbered by third party debt in an
amount equal to sixty percent (60%) of the value of the Building (as such value
is determined by Landlord), provided that in no event shall such liability
extend to any sales or insurance proceeds received by Landlord or the “Landlord
Parties” in connection with the Project, the Building or the Premises. For
purposes of this Lease, “Landlord Parties” shall mean, collectively, Landlord,
its partners, shareholders, officers, directors, employees, investment advisors,
or any successor in interest of any of them. Neither Landlord, nor any of the
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 Paragraph 39 shall inure to the benefit of Landlord’s and the
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), future
member in Landlord (if Landlord is a limited liability company) or trustee or
beneficiary (if Landlord or any partner or member of Landlord is a trust), have
any liability for the performance of Landlord’s obligations under this Lease.
Notwithstanding any contrary provision herein, neither Landlord nor the Landlord
Parties shall be liable under any circumstances for injury or damage to, or
interference with Tenant’s business, including, but not limited to, loss of
profits, loss of rents or other revenues, loss of business opportunity, loss of
goodwill or loss of use, in each case, however occurring. The provisions of this
Paragraph shall apply only to Landlord and the parties herein described, and
shall not be for the benefit of any insurer nor any other third party.

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40. Financial Statements
     Within ten (10) business days after Landlord’s request, Tenant shall
deliver to Landlord the then current financial statements of Tenant (including
interim periods following the end of the last fiscal year for which annual
statements are available), prepared or compiled by a certified public
accountant, including a balance sheet and profit and loss statement for the most
recent prior year, all prepared in accordance with generally accepted accounting
principles consistently applied.
41. Rules and Regulations
     Tenant shall comply with the rules and regulations attached hereto as
Exhibit C, along with any modifications, amendments and supplements thereto, and
such reasonable rules and regulations as Landlord may adopt in the future, from
time to time, for the orderly and proper operation of the Building and the
Project (collectively, the “Rules and Regulations”). The Rules and Regulations
may include, but shall not be limited to, the following: (a) restriction of
employee parking to a limited, designated area or areas; and (b) regulation of
the removal, storage and disposal of Tenant’s refuse and other rubbish. The
then-current Rules and Regulations shall be binding upon Tenant upon delivery of
a copy of them to Tenant. Landlord shall not be responsible to Tenant for the
failure of any other person to observe and abide by any of said Rules and
Regulations.
42. Mortgagee Protection
     (a) Modifications for Lender. If, in connection with obtaining financing
for the Project or any portion thereof, Landlord’s lender shall request
reasonable modifications to this Lease as a condition to such financing, Tenant
shall not unreasonably withhold, delay or defer its consent to such
modifications, provided that such modifications do not materially adversely
affect Tenant’s rights or increase Tenant’s obligations under this Lease.
     (b) Rights to Cure. Tenant shall give to any trust deed or mortgage holder
(“Holder”), by a method provided for in Paragraph 33, at the same time as it is
given to Landlord, a copy of any notice of default given to Landlord, provided
that, prior to such notice, Tenant has been notified in writing (by way of
notice of assignment of rents and leases, or otherwise) of the address of such
Holder. Tenant further agrees that if Landlord shall have failed to cure such
default within the time provided for in this Lease, then the Holder shall have
an additional reasonable period within which to cure such default, or if such
default cannot be cured without Holder pursuing its remedies against Landlord,
then such additional time as may be necessary to commence and complete a
foreclosure proceeding, provided Holder commences and thereafter diligently
pursues the remedies necessary to cure such default (including, but not limited
to, commencement of foreclosure proceedings, if necessary to effect such cure),
in which event this Lease shall not be terminated.
43. Parking
     (a) Provided that Tenant shall not then be in Default under the terms and
conditions of this Lease; and provided, further, that Tenant shall comply with
and abide by Landlord’s parking rules and regulations from time to time in
effect, Tenant shall have a license to use for the

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parking of standard-size passenger automobiles, pick-up trucks, vans and SUVs
the number of exclusive and designated and non-exclusive and undesignated
parking spaces, if any, set forth in the Basic Lease Information in the Parking
Areas; provided, however, that Landlord shall not be required to enforce
Tenant’s right to use such parking spaces; and provided, further, that the
number of parking spaces allocated to Tenant hereunder shall be reduced on a
proportionate basis in the event any of the parking spaces in the Parking Areas
are taken or otherwise eliminated as a result of any Condemnation or casualty
event affecting such Parking Areas or any modifications made by Landlord to such
Parking Areas. All unreserved parking spaces will be on a first-come,
first-served basis in common with other tenants of and visitors to the Project
in parking spaces provided by Landlord from time to time in the Project’s
Parking Areas. In the event Tenant is granted the use of exclusive and
designated parking spaces, as indicated in the Basic Lease Information, then
such spaces shall be located in the area(s) designated by Landlord from time to
time. Tenant’s license to use the parking spaces provided for herein shall be
subject to such terms, conditions, rules and regulations as Landlord or the
operator of the Parking Areas may impose from time to time.
     (b) Each vehicle shall, at Landlord’s option to be exercised from time to
time, bear a permanently affixed and visible identification sticker to be
provided by Landlord. Tenant shall not and shall not permit Tenant’s Agents to
park any vehicles in locations other than those specifically designated by
Landlord as being for Tenant’s use. The license granted hereunder is for
self-service parking only and does not include additional rights or services.
Neither Landlord nor Landlord’s Agents shall be liable for: (i) loss or damage
to any vehicle or other personal property parked or located upon or within such
parking spaces or any Parking Areas whether pursuant to this license or
otherwise and whether caused by fire, theft, explosion, strikes, riots or any
other cause whatsoever; or (ii) injury to or death of any person in, about or
around such parking spaces or any Parking Areas or any vehicles parking therein
or in proximity thereto whether caused by fire, theft, assault, explosion, riot
or any other cause whatsoever; and Tenant hereby waives any claim for or in
respect to the above and against all claims or liabilities arising out of loss
or damage to property or injury to or death of persons, or both, relating to any
of the foregoing. Tenant shall not assign any of its rights hereunder and, in
the event an attempted assignment is made, it shall be void.
     (c) Tenant recognizes and agrees that visitors, clients and/or customers
(collectively, the “Visitors”) to the Project and the Premises must park
automobiles or other vehicles only in areas designated by Landlord from time to
time as being for the use of such Visitors, and Tenant hereby agrees to ask its
Visitors to park only in the areas designated by Landlord from time to time for
the use of Tenant’s Visitors.
     (d) In the event any tax, surcharge or regulatory fee is at any time
imposed by any governmental authority upon or with respect to parking or
vehicles parking in the parking spaces referred to herein, Tenant shall pay such
tax, surcharge or regulatory fee as Additional Rent under this Lease, such
payments to be made in advance and from time to time as required by Landlord
(except that they shall be paid monthly with Base Rent payments if permitted by
the governmental authority).

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44. Entire Agreement
     This Lease, including the Exhibits and any Addenda attached hereto, which
are hereby incorporated herein by this reference, contains the entire agreement
of the parties hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties, not embodied herein or
therein, shall be of any force and effect. If there is more than one Tenant, the
obligations hereunder imposed shall be joint and several.
45. Interest
     Any installment of Rent and any other sum due from Tenant under this Lease
which is not received by Landlord within three (3) days from when the same is
due shall bear interest from the date such payment was originally due under this
Lease until paid at the lesser of (a) an annual rate equal to the maximum rate
of interest permitted by law, or (b) twelve percent (12%) per annum. Payment of
such interest shall not excuse or cure any Default by Tenant. In addition,
Tenant shall pay all costs and attorneys’ fees incurred by Landlord in
collection of such amounts.
46. Governing Law; Construction
     This Lease shall be construed and interpreted in accordance with the laws
of state in which the Premises is located. The parties acknowledge and agree
that no rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall be employed in the interpretation of
this Lease, including the Exhibits and any Addenda attached hereto. All captions
in this Lease are for reference only and shall not be used in the interpretation
of this Lease. Whenever required by the context of this Lease, the singular
shall include the plural, the masculine shall include the feminine, and vice
versa. If any provision of this Lease shall be determined to be illegal or
unenforceable, such determination shall not affect any other provision of this
Lease and all such other provisions shall remain in full force and effect.
47. Representations and Warranties of Tenant
     Tenant (and, if Tenant is a corporation, partnership, limited liability
company or other legal entity, such corporation, partnership, limited liability
company or entity) hereby makes the following representations and warranties,
each of which is material and being relied upon by Landlord, is true in all
respects as of the date of this Lease, and shall survive the expiration or
termination of this Lease.
     (a) If Tenant is an entity, Tenant is duly organized, validly existing and
in good standing under the laws of the state of its organization, and is
qualified to do business in the state in which the Premises is located, and the
persons executing this Lease on behalf of Tenant have the full right and
authority to execute this Lease on behalf of Tenant and to bind Tenant without
the consent or approval of any other person or entity. Tenant has full power,
capacity, authority and legal right to execute and deliver this Lease and to
perform all of its obligations hereunder. This Lease is a legal, valid and
binding obligation of Tenant, enforceable in accordance with its terms.
     (b) Tenant has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by any creditors, (iii) suffered the
appointment of a receiver to take possession of all or substantially all of its

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assets, (iv) suffered the attachment or other judicial seizure of all or
substantially all of its assets, (v) admitted in writing its inability to pay
its debts as they come due, or (vi) made an offer of settlement, extension or
composition to its creditors generally.
     (c) Tenant is not in violation of any Anti-Terrorism Law.
     (d) Tenant is not, as of the date hereof:
          (i) conducting any business or engaging in any transaction or dealing
with any Prohibited Person, including the making or receiving of any
contribution of funds, goods or services to or for the benefit of any Prohibited
Person;
          (ii) dealing in, or otherwise engaging in any transaction relating to,
any property or interests in property blocked pursuant to Executive Order
No. 13224; or
          (iii) engaging in or conspiring to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate any of the prohibitions set forth in, any Anti-Terrorism Law.
     (e) Neither Tenant nor any of its affiliates, officers, directors,
shareholders, members or any lease guarantor, as applicable, is a Prohibited
Person.
     If at any time any of these representations becomes false, then it shall be
considered a material Default under this Lease.
     As used herein, “Anti-Terrorism Law” is defined as any law relating to
terrorism, anti-terrorism, money-laundering or anti-money laundering activities,
including, without limitation, the United States Bank Secrecy Act, the United
States Money Laundering Control Act of 1986, Executive Order No. 13224, and
Title 3 of the USA Patriot Act, and any regulations promulgated under any of
them. As used herein “Executive Order No. 13224” is defined as Executive Order
No. 13224 on Terrorist Financing effective September 24, 2001, and relating to
“Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism,” as may be amended from time to time.
“Prohibited Person” is defined as (i) a person or entity that is listed in the
Annex to Executive Order No. 13224, or a person or entity owned or controlled by
an entity that is listed in the Annex to Executive Order No. 13224; (ii) a
person or entity with whom Landlord is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law; or (iii) a person or
entity that is named as a “specially designated national and blocked person” on
the most current list published by the U.S. Treasury Department Office of
Foreign Assets Control at its official website,
http://www.treas.gov/ofac/t11sdn.pdf or at any replacement website or other
official publication of such list. “USA Patriot Act” is defined as the “Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001” (Public Law 107-56), as may be amended from
time to time.
48. Name of Building
     In the event Landlord chooses to change the name or address of the Building
and/or the Project, Tenant agrees that such change shall not affect in any way
its obligations under this

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Lease, and that, except for the name or address change, all terms and conditions
of this Lease shall remain in full force and effect. Tenant agrees further that
such name or address change shall not require a formal amendment to this Lease,
but shall be effective upon Tenant’s receipt of written notification from
Landlord of said change.
49. Security
     (a) Tenant acknowledges and agrees that, while Landlord may in its sole and
absolute discretion engage security personnel to patrol the Building or the
Project, Landlord is not providing any security services with respect to the
Premises and that Landlord shall not be liable to Tenant for, and Tenant waives
any claim against Landlord with respect to, any bodily injury, loss by theft or
any other damage suffered or incurred by Tenant or Tenant’s employees, invitees,
and visitors in connection with any unauthorized entry into the Premises or any
other breach of security with respect to the Premises, the Building or the
Project.
     (b) Tenant hereby agrees to the exercise by Landlord and Landlord’s Agents,
within their sole discretion, of such security measures as, but not limited to,
the evacuation of the Premises, the Building or the Project for cause, suspected
cause or for drill purposes, the denial of any access to the Premises, the
Building or the Project and other similarly related actions that it deems
necessary to prevent any threat of property damage or bodily injury. The
exercise of such security measures by Landlord and Landlord’s Agents, and the
resulting interruption of service and cessation of Tenant’s business, if any,
shall not be deemed an eviction or disturbance of Tenant’s use and possession of
the Premises, or any part thereof, or render Landlord or Landlord’s Agents
liable to Tenant for any resulting damages or relieve Tenant from Tenant’s
obligations under this Lease.
50. Jury Trial Waiver
     Tenant hereby waives any right to trial by jury with respect to any action
or proceeding (a) brought by Landlord, Tenant or any other party, relating to
(i) this Lease and/or any understandings or prior dealings between the parties
hereto, or (ii) the Premises, the Building or the Project or any part thereof,
or (b) to which Landlord is a party. Tenant hereby agrees that this Lease
constitutes a written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631, and Tenant does
hereby constitute and appoint Landlord its true and lawful attorney-in-fact,
which appointment is coupled with an interest, and Tenant does hereby authorize
and empower Landlord, in the name, place and stead of Tenant, to file this Lease
with the clerk or judge of any court of competent jurisdiction as a statutory
written consent to waiver of trial by jury.
51. Recordation
     Neither this Lease, nor any memorandum, affidavit or other writing with
respect thereto, shall be recorded by Tenant or by any one acting through, under
or on behalf of Tenant, and the recording thereof in violation of this provision
shall make this Lease null and void at Landlord’s election.

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52. Right to Lease
     Landlord reserves the absolute right to effect such other tenancies in the
Project as Landlord in the exercise of its sole business judgment shall
determine to best promote the interest of the Project. Tenant does not rely on
the fact, nor does Landlord represent, that any specific tenant or type or
number of tenants shall, during the Term, occupy any space in the Project.
53. Force Majeure
     Any prevention, delay or stoppage due to strikes, lockouts, labor disputes,
acts of God, inability to obtain services, labor, or materials or reasonable
substitutes therefor, governmental actions, civil commotions, fire or other
casualty, and other causes beyond the reasonable control of the party obligated
to perform, except with respect to the obligations imposed with regard to Rent
and other charges to be paid by Tenant pursuant to this Lease (collectively, the
“Force Majeure”), notwithstanding anything to the contrary contained in this
Lease, shall excuse the performance of such party for a period equal to any such
prevention, delay or stoppage and therefore, if this Lease specifies a time
period for performance of an obligation of either party, that time period shall
be extended by the period of any delay in such party’s performance cause by a
Force Majeure.
54. Renewal Option (With FMV Rent)
          (a) Exercise of Option. Provided Tenant is not in default (beyond
applicable notice and grace periods) pursuant to any of the terms and conditions
of this Lease, at the date of both the Extension Notice and the effective date
of the Option, Tenant shall have the option (the “Option”) to renew this Lease
for an additional five (5) year period (the “Extension Term”) for the period
commencing on the date following the Expiration Date upon the terms and
conditions contained in this Paragraph 54. To exercise the Option, Tenant shall
give Landlord notice (the “Extension Notice”) of intent to exercise said Option
not less than six (6) months nor more than nine (9) months prior to the date on
which the Extension Term which is the subject of the notice will commence. The
notice shall be given as provided in Paragraph 33 hereof. In the event Tenant
exercises the Option, this Lease will terminate in its entirety at the end of
the Extension Term and Tenant will have no further option to renew or extend the
Term of this Lease.
          (b) Procedures for Determining Prevailing Market Rate.
               (i) If Tenant timely exercises the Extension Option, not later
than six (6) months prior to the commencement of the Extension Term, Landlord
shall deliver to Tenant a good faith written proposal of the Prevailing Market
Rate for the Premises for the Extension Term. Within thirty (30) days after
receipt of Landlord’s proposal, Tenant shall notify Landlord in writing that
(A) Tenant accepts Landlord’s proposal or (B) Tenant rejects Landlord’s
proposal. If Tenant does not give Landlord a timely notice in response to
Landlord’s proposal, Landlord’s proposal of Prevailing Market Rate for the
Extension Term shall be deemed rejected by Tenant.
               (ii) If Tenant timely rejects Landlord’s proposal, Landlord and
Tenant shall first negotiate in good faith in an attempt to agree upon the
Prevailing Market Rate for the Extension Term. If Landlord and Tenant are able
to agree within thirty (30) days following the earlier of (A) Landlord’s receipt
of Tenant’s notice rejecting Landlord’s proposal or (B) the expiration of

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the thirty (30) day period referred to in subparagraph (a) above (the
“Negotiation Period”), such agreement shall constitute a determination of
Prevailing Market Rate for purposes of this Article. If Landlord and Tenant are
unable to agree upon the Prevailing Market Rate during the Negotiation Period,
then within thirty (30) days after expiration of the Negotiation Period, the
parties shall meet and concurrently deliver to each other their respective
written estimates of the Prevailing Market Rate for the Extension Term,
supported by the reasons therefore (respectively, “Landlord’s Determination” and
“Tenant’s Determination”). Landlord’s Determination may be more or less than its
initial proposal of Prevailing Market Rate. If either party fails to deliver its
Determination in a timely manner, then the Prevailing Market Rate shall be the
amount specified by the other party. If the higher of such Determinations is not
more than one hundred five percent (105%) of the lower of such Determinations,
then the Prevailing Market Rate shall be the average of the two Determinations.
If the Prevailing Market Rate is not resolved by exchange of the Determinations,
the Prevailing Market Rate shall be determined as follows, each party being
bound to its Determination and such Determinations constituting the only two
choices available to the Appraisal Panel (as hereinafter defined).
               (iii) Within thirty (30) days after the parties exchange
Landlord’s and Tenant’s Determinations, the parties shall each appoint a neutral
and impartial appraiser who shall be certified as an MAI or ASA appraiser and
shall have at least ten (10) years’ experience, immediately prior to his or her
appointment, as a real estate appraiser of similar class office properties in
the City of Pleasanton and County of Contra Costa including significant
experience appraising suburban office space. For purposes hereof, an “MAI”
appraiser means an individual who holds an MAI designation conferred by, and is
an independent member of, the American Institute of Real Estate Appraisers (or
its successor organization, or, if there is no successor organization, the
organization and designation most similar), and an “ASA” appraiser means an
individual who holds the Senior Member designation conferred by, and is an
independent member of, the American Society of Appraisers (or its successor
organization, or, if there is no successor organization, the organization and
designation most similar). If either Landlord or Tenant fails to appoint an
appraiser within said thirty (30) day period, the Prevailing Market Rate for the
Extension Term shall be the Determination of the other party who timely
appointed an appraiser.
     Landlord’s and Tenant’s appraisers shall work together in good faith to
appoint a neutral or impartial third party appraiser within ten (10) days, and
notify both Landlord and Tenant of such selection. The three appraisers shall
then work together in good faith to decide which of the two Determinations more
closely reflects the Prevailing Market Rate of the Premises for the Extension
Term. The Determination selected by such appraisers shall be binding upon
Landlord and Tenant. If all three appraisers cannot agree upon which of the two
Determinations more closely reflects the Prevailing Market Rate within
forty-five (45) days, the decision of a majority of the appraisers shall
prevail.
               (iv) Within five (5) days following notification of the identity
of the third appraiser, Landlord and Tenant shall submit copies of Landlord’s
Determination and Tenant’s Determination to the third appraiser. The three
appraisers are referred to herein as the “Appraisal Panel.” The Appraisal Panel,
if it so elects, may conduct a hearing, at which Landlord and Tenant may each
make supplemental oral and/or written presentations, with an opportunity for
rebuttal by the other party and for questioning by the members of the Appraisal
Panel. Within

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forty-five (45) days following the appointment of the third appraiser, the
Appraisal Panel, by majority vote, shall select either Landlord’s Determination
or Tenant’s Determination as the Prevailing Market Rate of the Premises for the
Extension Term, and shall have no right to propose a middle ground or to modify
either of the two proposals or the provisions of this Lease. The decision of the
Appraisal Panel shall be final and binding upon the parties, and may be enforced
in accordance with the provisions of California law. In the event of the
failure, refusal or inability of any member of the Appraisal Panel to act, a
successor shall be appointed in the manner that applied to the selection of the
member being replaced.
               (v) Each party shall pay the fees and expenses of the appraiser
appointed by such party, and one-half of the fees and expenses of the third
appraiser and the expenses incident to the proceedings of the Appraisal Panel
(excluding attorneys’ fees and similar expenses of the parties which shall be
borne separately by each of the parties).
     (c) Prevailing Market Rate. As used in this Lease, the phrase “Prevailing
Market Rate” means the amount that a landlord under no compulsion to lease the
Premises, and a tenant under no compulsion to lease the Premises, would agree
upon at arm’s length as Base Rent for the Premises for the Extension Term, as of
the commencement of the Extension Term. The Prevailing Market Rate shall be
based upon non-sublease, non-encumbered, non-equity lease transactions recently
entered into for space in the Building and in Comparable Buildings (“Comparison
Leases”) and may include periodic increases. Rental rates payable under
Comparison Leases shall be adjusted to account for variations between this Lease
and the Comparison Leases with respect to: (i) the length of the Extension Term
compared to the lease term of the Comparison Leases; (ii) rental structure,
including additional rent, and taking into consideration any “base year” or
“expense stops”; (iii) the size of the Premises compared to the size of the
premises under the Comparison Leases; (iv) utility, location, floor level,
views, and efficiencies of the Premises compared to the premises under the
Comparison Leases; (v) the age and quality of construction of the Building;
(vi) the value of existing leasehold improvements to Tenant; (vii) the financial
condition and credit history of Tenant compared to the tenants under the
Comparison Leases, and (viii) any other relevant economic factors. For purposes
of this Paragraph, Comparable Buildings shall include, but not be limited to:
Carr America Corporate Center; Hacienda Terrace; Dublin Corporate Center; and
Stoneridge Corporate Plaza. This option is personal to the original Tenant under
the Lease or a Permitted Transferee.
55. Right of First Offer.
     (a) Subject to the terms of this Paragraph 55 , Tenant shall have a
continuous and recurring right of first offer (the “Right of First Offer”)
during the Term to lease all or any portion of the space located on the forth
(4th) floor of the Building (each a “First Offer Space”), when and if any such
First Offer Space becomes available for lease by a party other than the existing
tenant of the First Offer Space during the Term. The Right of First Offer is
personal to Tenant and may not be exercised by any sublessee or assignee, or by
any other successor or assign, of Tenant. The Right of First Offer shall be
effective only if Tenant is not in Default under this Lease, nor is any event
then occurring and continuing which with the giving of notice or the passage of
time, or both, would constitute a Default hereunder, either at the time of
exercise of the Right of First Offer or on the First Offer Commencement Date (as
hereinafter defined).

54

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          (b) In the event that Landlord elects to market or offer to the public
for lease any First Offer Space, then Landlord shall notify Tenant in writing of
the terms and conditions upon which Landlord would be willing to lease such
First Offer Space to Tenant (a “First Offer Space Availability Notice”). Tenant
shall thereafter have the right to lease such First Offer Space on the terms and
conditions specified in the First Offer Space Availability Notice by written
notice (a “First Offer Notice”) to Landlord given not later than twenty
(20) days after Tenant’s receipt of the First Offer Space Availability Notice.
If Tenant fails to deliver a First Offer Notice to Landlord on a timely basis as
provided in the preceding sentence, then Tenant shall be deemed to have elected
not to exercise the Right of First Offer with respect to such First Offer Space.
          (c) In the event Tenant fails to exercise its Right of First Offer in
a timely manner as provided herein, the Right of First Offer shall lapse and
Landlord shall thereafter have the right to lease such First Offer Space to any
party or parties on terms deemed acceptable to Landlord in its sole and absolute
discretion. If such First Offer Space is not leased within six (6) months
thereafter, then this Right of First Offer will again apply to that First Offer
Space. If Tenant validly exercises the Right of First Offer, then (1) Tenant’s
lease of such First Offer Space shall commence on a date (a “First Offer
Commencement Date”) specified in the First Offer Space Availability Notice,
(2) such First Offer Space shall be leased to Tenant upon the terms and
conditions set forth in the First Offer Space Availability Notice, (3) Tenant’s
Proportionate Share of the Building and the Project shall be increased to
reflect the First Offer Space, and (4) the First Offer Space shall be delivered
to Tenant in its “as-is” condition on the First Offer Commencement Date, Tenant
acknowledging and agreeing that Landlord shall have no obligation to improve,
remodel or otherwise alter such First Offer Space prior to or after the First
Offer Commencement Date, except to the extent expressly provided in the First
Offer Space Availability Notice.
          (d) In the event Tenant exercises its Right of First Offer, then from
and after the First Offer Commencement Date, the term “Premises,” whenever used
in this Lease, shall mean the original Premises demised under this Lease and the
First Offer Space (except, in the case of the First Offer Space then being
leased, to the extent that the terms of this Lease are not consistent with the
terms and conditions specified in the First Offer Space Availability Notice).
56. Termination Option
     (a) Tenant shall have the right to terminate this Lease on the terms and
conditions set forth in this Paragraph 56 (the “Termination Option”). The
Termination Option is personal to Callidus Software, Inc. or any Permitted
Transferee and may not be exercised by any other sublessee or assignee, or by
any other successor or assign, of Callidus Software, Inc.. The Termination
Option shall be effective only if Tenant is not in Default under this Lease, nor
has any event occurred which with the giving of notice or the passage of time,
or both, would constitute a Default hereunder, either at the time of the
exercise of the Termination Option or on the Termination Date (as hereinafter
defined).
     (b) In the event Tenant elects to exercise the Termination Option, then
Tenant shall provide written notice (the “Termination Notice”) to Landlord by
August 1, 2015. Any such Termination Notice given by Tenant to Landlord shall be
irrevocable. If Tenant delivers a Termination Notice to Landlord, then subject
to Paragraph 56(a) above, the Lease shall terminate

55

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on January 28, 2016 (the “Termination Date”); provided, however, that as a
condition precedent to the termination of the Lease, Tenant shall pay to
Landlord, at the time of delivery of the Termination Notice, an amount equal to
five (5) full months of the monthly Base Rent that was payable as of the
Termination Date.
57. Server Room Equipment
     (a) During the Term of this Lease, Tenant shall have the right, at no cost
to Tenant, to use the equipment and infrastructure located in the server room
portion of the Premises located on the first floor of the Building and as
described on Exhibit F hereto as well as the Existing Wiring (collectively, the
“IT Equipment”), subject to the terms and conditions contained in this paragraph
57. All right, title or interest in IT Equipment shall be in and remain with
Landlord and no right, title or interest in IT Equipment shall pass to Tenant
other than the right to use the IT Equipment for the Term of this Lease.
     (b) Tenant shall: (i) at its sole expense, keep and maintain each item of
IT Equipment in the same condition received (ordinary wear and tear excepted),
and in compliance with all applicable Laws and all instructions and
recommendations as to the repair and maintenance of such item of IT Equipment
issued at any time by the vendor and/or manufacturer thereof; (ii) maintain
conspicuously on any of IT Equipment such labels, plates, decals or other
markings as Landlord may reasonably place thereon, stating that Landlord is the
owner of such IT Equipment; (iii) furnish to Landlord such information
concerning the condition, location, use and operation of the IT Equipment as
Landlord reasonably may request; (iv) make no additions, alterations,
modifications or improvements to any item of any IT Equipment without Landlord’s
prior written consent, which shall not be unreasonably withheld; (v) not,
directly or indirectly, create, incur or permit to exist any lien, encumbrance,
mortgage, pledge, attachment or security interest on or with respect to any IT
Equipment; and (vi) use IT Equipment solely in the conduct of Tenant’s business
and keep IT Equipment in the server room portion of the Premises.
     (c) Without limiting the generality of Paragraph 57(b) above, in connection
with Tenant’s maintenance of the Liebert AC units, Tenant shall obtain and keep
in force a preventive maintenance contract providing for regular (at least
quarterly) inspection and maintenance by a qualified service contractor(s)
reasonably acceptable to Landlord. Prior to April 1 of each calendar year,
Tenant shall deliver Landlord written confirmation from such service
contractor(s) verifying that such a contract has been entered into and that the
required service will be provided. Notwithstanding anything herein to the
contrary, in no event shall Tenant’s obligation to maintain the IT Equipment
(including the Liebert AC units) in good order and condition include any capital
repairs or replacements, unless necessary due to Tenant’s negligence or willful
misconduct. Additionally, in the event any capital repairs or replacements are
necessary to maintain the Liebert AC units in good order and condition, the same
shall be performed by Landlord, and Tenant shall only be required to pay an
amortized portion of the cost of such capital repair or replacement falling due
within the Term (including any renewal term) based upon the amortization of such
capital repair or replacement over its useful life, as reasonably determined by
Landlord.
     (d) Tenant acknowledges that the dedicated Liebert AC units servicing the
server room portion of the Premises as well as two (2) heat pump units located
on the 5th floor are serviced by

56

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a roof mounted cooling tower (the “Cooling Tower”) that also services other
tenant’s dedicated HVAC systems. Although the Cooling Tower will be operated,
maintained and repaired by Landlord, Tenant shall pay its proportionate share of
the cost of such operation, maintenance and repair and such costs shall be paid
by Tenant as Additional Rent within 30 days following invoice. Tenant’s
“proportionate share” for purposes of this Paragraph 57(d) shall be a fraction,
the numerator of which is the total tonnage of Tenant’s HVAC that is serviced by
the Cooling Tower and the denominator of which is the total aggregate tonnage of
HVAC that is serviced by the Cooling Tower. Subject to the terms and conditions
of this Lease, Landlord shall permit Tenant to connect additional dedicated HVAC
units to the Cooling Tower, subject to the Cooling Tower having adequate excess
capacity.
     (e) TENANT ACKNOWLEDGES THAT LANDLORD IS NOT THE MANUFACTURER OR SUPPLIER
OF THE IT EQUIPMENT, NOR THE AGENT THEREOF, AND THAT LANDLORD MAKES NO EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO ANY MATTER WHATSOEVER IN
CONNECTION WITH IT EQUIPMENT, INCLUDING WITHOUT LIMITATION, THE MERCHANTABILITY
OF THE IT EQUIPMENT, ITS FITNESS FOR A PARTICULAR PURPOSE, ITS DESIGN OR
CONDITION, ITS CAPACITY OR DURABILITY, OR THE QUALITY OF THE MATERIAL OR
WORKMANSHIP IN THE MANUFACTURE OR ASSEMBLY OF IT EQUIPMENT. Except as expressly
set forth herein, Landlord is not responsible for any repairs or service to IT
Equipment, defects therein or failures in the operation thereof. Landlord shall
have no liability in connection with or arising out of the ownership, leasing,
furnishing, performance or use of IT Equipment or, in any event, any special,
indirect, incidental or consequential damages of any character, including,
without limitation, loss of use of production facilities or equipment, loss of
profits, property damage or lost production, whether suffered by Tenant or any
third party.
58. Contingency
     Landlord and Tenant acknowledge that this Lease and all of the terms and
conditions herein are expressly contingent upon Landlord entering into an early
termination agreement for the Premises with Charles Schwab & Co., Inc., a
California corporation (“Schwab”) on terms and conditions acceptable to Landlord
in its sole and absolute discretion.
59. Counterparts
     The parties may execute this Lease in multiple counterparts, each of which
constitutes an original, and all of which, collectively, constitute only one
agreement. The signatures of all of the parties need not appear on the same
counterpart, and delivery of an executed counterpart signature page by
electronic means is as effective as executing and delivering this Lease in the
presence of the other parties to this Lease. This Lease is effective upon
delivery of one executed counterpart from each party to the other parties. In
proving this Lease, a party must produce or account only for the executed
counterpart of the party to be charged. Any party delivering an executed
counterpart of this Lease by electronic means shall also deliver a manually
executed counterpart of this Lease, but the failure to do so does not affect the
validity, enforceability, or binding effect of this Lease.

57

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60. Acceptance
     This Lease shall only become effective and binding upon full execution
hereof by Landlord and delivery of a signed copy to Tenant and Landlord’s
receipt of any Security Deposit.

58

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     Landlord and Tenant have executed and delivered this Lease as of the Lease
Date specified in the Basic Lease Information.

  Landlord:   6200 Stoneridge Mall Road Investors, llc,
a Delaware limited liability company

  By:   TPF Equity REIT Operating Partnership LP,
a Delaware limited partnership,
its sole member

  By:   TPF Equity REIT Operating Partnership GP llc,
a Delaware limited liability company,
its general partner

                  By:           Name:           Title:        

              Tenant: Callidus Software Inc.,
a Delaware corporation       By:             Name:             Title:      

S-1

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Exhibit A
Diagram of the Premises
(GRAPHIC) [f55674f5567401.gif]

A-1

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Fifth Floor
6200 Stoneridge Mall Road
(GRAPHIC) [f55674f5567402.gif]

A-2

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Exhibit B
Tenant Improvements Work Letter
     This exhibit, entitled “Tenant Improvements Work Letter,” is and shall
constitute Exhibit B to the Lease Agreement, dated as of the Lease Date, by and
between Landlord and Tenant for the Premises. The terms and conditions of this
Exhibit B are hereby incorporated into and are made a part of the Lease.
Capitalized terms used, but not otherwise defined, in this Exhibit B have the
meanings ascribed to such terms in the Lease.
     This Tenant Work Letter shall set forth the terms and conditions relating
to the construction of improvements to the Premises. This Tenant Work Letter is
essentially organized chronologically and addresses the issues of the
construction within the Premises, in sequence, as such issues will arise during
such construction. All references in this Tenant Work Letter to Paragraphs of
“this Lease” shall mean the relevant portions of the Lease, and all references
in this Tenant Work Letter to Sections of “this Tenant Work Letter” shall mean
the relevant portions of Sections 1 through 4 of this Tenant Work Letter.
1. Tenant Improvements
     1.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time
tenant improvement allowance (the “Tenant Improvement Allowance”) in the amount
of thirty dollars ($30.00) for each rentable square foot of the Premises for the
costs relating to the initial design (including consultant and project
management fees), permitting and construction of Tenant’s improvements which are
affixed to the Premises (collectively, the “Tenant Improvements”) and for the
“Tenant Improvement Allowance Items,” as that term is defined in Section 1.2(a)
below. In no event shall Landlord be obligated to make disbursements pursuant to
this Tenant Work Letter in a total amount which exceeds the Tenant Improvement
Allowance. Tenant shall have no claim for any Tenant Improvement Allowance, and
Landlord shall have no obligation to reimburse Tenant for any Tenant Improvement
costs, that have not been requested by January 1, 2012. Notwithstanding anything
in this Lease to the contrary, if any if any barrier removal work or other work
is required to the Building, the Common Areas or the Project under the ADA as a
result of the construction of the Tenant Improvements, then such work shall be
the sole responsibility of Landlord and the costs thereof shall not be included
in the cost of the Tenant Improvements.
          1.2 Disbursement of the Tenant Improvement Allowance.
     (a) Tenant Improvement Allowance Items. Except as otherwise set forth in
this Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by
Landlord only for the following items and costs (collectively the “Tenant
Improvement Allowance Items”) and, except as otherwise specifically and
expressly provided in this Tenant Work Letter, Landlord shall not deduct any
other expenses from the Tenant Improvement Allowance. The Tenant Improvement
Allowance Items shall consist of:
          (i) Payment of the fees and costs of the “Architect” and the
“Engineers,” as those terms are defined in Section 2.1 of this Tenant Work
Letter, costs paid to Tenant’s consultants in connection with the design,
construction and move into the Premises and all

B-1

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

 

related design and construction costs, including the fees and costs of Tenant’s
project management consultant;
          (ii) The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements;
          (iii) The cost of construction of the Tenant Improvements, including,
without limitation, testing and inspection costs, and trash removal and cleaning
costs, cabling, supplemental cooling and electrical equipment, after hours
utility usage, and contractors’ fees, insurance and general conditions;
          (iv) The cost of any changes in the base Building when such changes
are required by Tenant’s occupancy and as noted in the approved Construction
Drawings (including if such changes are due to the fact that such work is
prepared on an unoccupied basis) or to comply with Laws, such cost to include
all direct architectural and/or engineering fees and expenses incurred in
connection therewith;
          (v) The cost of any changes to the Construction Drawings or Tenant
Improvements required by all applicable building codes; and
          (vi) any applicable sales and use taxes; and
          (vii) the cost of furniture, fixtures, signage, security, racks and
other equipment installed in the Premises, not to exceed seven dollars ($7.00)
for each rentable square foot of the Premises.
     (b) Disbursement of Tenant Improvement Allowance. During the construction
of the Tenant Improvements, Landlord shall make monthly disbursements of the
Tenant Improvement Allowance for the benefit of Tenant and shall authorize the
release of monies for the benefit of Tenant as follows.
          (i) Monthly Disbursements. From time-to-time, but not more frequently
than monthly (each, a “Submittal Date”) during the period from the date hereof
through the construction of the Tenant Improvements, Tenant shall deliver to
Landlord: (A) a request for payment of the “Contractor,” as that term is defined
in Section 3.1 of this Tenant Work Letter, and/or to the “Architect” and/or to
the “Engineers,” as such terms are defined in Section 2.1 below, and/or to
Tenant’s various consultants or other persons or entities entitled to payment
(or reimbursement to Tenant if Tenant has already paid the Contractor or other
person or entity entitled to payment), approved by Tenant, in a form to be
provided by Landlord, showing the schedule, by trade, of percentage of
completion of the Tenant Improvements in the Premises, detailing the portion of
the work completed; (B) invoices from all of Tenant’s Agents (hereinafter
defined) for labor rendered and materials and equipment delivered to the
Premises for the applicable payment period; (C) executed conditional mechanics’
lien releases from all of applicable Tenant’s Agents that have mechanic lien
rights, which shall substantially comply with the appropriate provisions of
California Civil Code Section 3262(d) or unconditional releases if appropriate;
provided, however, that with respect to fees and expenses of the Architect,
Engineers, or construction or project managers or other similar consultants,
and/or any other pre-construction items or FF&E costs, for which the payment
scheme set forth in items (A) through

B-2

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(C) above of this Tenant Work Letter, is not applicable (collectively, the
“Non-Construction Allowance Items”), Tenant shall only be required to deliver to
Landlord on or before the applicable Submittal Date, reasonable evidence of
incurring the cost for the applicable Non-Construction Allowance Items (unless
Landlord has received a preliminary notice in connection with such costs in
which event conditional lien releases must be submitted in connection with such
costs); and (D) all other information reasonably requested in good faith by
Landlord. Tenant’s request for payment shall be deemed Tenant’s acceptance and
approval of the work furnished and/or the materials supplied as set forth in
Tenant’s payment request vis-à-vis Landlord. Within thirty (30) days following
the Submittal Date, and assuming Landlord receives all of the information
described in items (A) through (D) above, Landlord shall deliver a check to
Tenant made jointly payable to Contractor and Tenant or if Tenant elects, to the
Contractor, subcontractor, architect, engineer or consultant designated by
Tenant and/or a separate check to Tenant where Tenant has provided evidence
reasonably satisfactory to Landlord that Tenant has paid such Contractor (or
other supplier of services or goods) accompanied when appropriate by
unconditional lien releases, or any other provider of goods and services
designated by Tenant to Landlord, and Tenant in payment of the lesser of:
(1) the amounts so requested by Tenant, as set forth above in this
Section 1.2(b)(i), less a ten percent (10%) retention (the aggregate amount of
such retentions to be known as the “Final Retention”); provided, however, that
no such retention shall be duplicative of the retention Tenant would otherwise
withhold (but will not withhold) pursuant to its agreement with such Contractor
and no such deduction shall be applicable to amounts due to Tenant’s
consultants, the Architect, or the Engineer or for Non-Construction Allowance
Items or other Tenant Improvement Allowance Items in connection with the payment
of suppliers for materials delivered to the Premises and subcontractors for
completing performance of their work substantially in advance of the completion
of the Tenant Improvements pursuant to the Approved Construction Drawings, and
(2) the balance of any remaining available portion of the Tenant Improvement
Allowance (not including the Final Retention). In the event that Landlord or
Tenant identifies any material non-compliance with the Approved Construction
Drawings, or substandard work, Landlord or Tenant as appropriate shall be
provided a detailed statement identifying such material non-compliance or
substandard work by the party claiming the same, and Tenant shall cause such
work to be corrected so that such work is no longer substandard. Such procedure
shall also be applicable in connection with the payment of the Final Retention.
Landlord’s payment of such amounts shall not be deemed Landlord’s approval or
acceptance of the work furnished or materials supplied as set forth in Tenant’s
payment request. If Tenant receives a check payable to anyone other than solely
to Tenant, Tenant may return such check to Landlord and receive a replacement
check made payable only to Tenant within ten (10) business days, if Tenant
provides the releases and evidence to the extent required above to receive a
check payable solely to Tenant.
          (ii) Final Retention. A check for the Final Retention payable jointly
to Tenant and Contractor (or payable solely to Tenant if Contractor is no longer
owed any money by Tenant for work performed in the Premises) shall be delivered
by Landlord to Tenant following the completion of construction of the Premises,
provided that (A) Tenant delivers to Landlord properly executed mechanics lien
releases in compliance with both California Civil Code Section 3262(d)(2) and
either Section 3262(d)(3) or Section 3262(d)(4), (B) Architect delivers to
Landlord a certificate, in a form reasonably acceptable to Landlord, certifying
that the construction of the Tenant Improvements in the Premises has been
substantially completed in

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accordance with the terms of this Tenant Work Letter, and (C) Tenant fulfills
its obligations pursuant to Section 3.3 of this Tenant Work Letter.
          (iii) Other Terms. Landlord shall only be obligated to make
disbursements from the Tenant Improvement Allowance to the extent costs are
incurred by Tenant for Tenant Improvement Allowance Items or are otherwise
expressly permitted hereunder.
     (c) Tenant Improvement Specifications. The Tenant Improvements shall be
constructed with new or like-new materials and of a quality consistent with
interior tenant improvements generally found in a Class A office building.

2.    Construction Drawings

     2.1 Selection of Architect/Construction Drawings. Tenant shall retain an
architect/space planner approved by Landlord, which approval shall not be
unreasonably withheld or delayed (the “Architect”) to prepare the “Construction
Drawings,” as that term is defined in this Section 2. Tenant shall retain the
engineering consultants approved by Landlord (the “Engineers”), which approval
shall not be unreasonably withheld or delayed, to prepare all plans and
engineering working drawings relating to the structural, mechanical, electrical,
plumbing, HVAC, lifesafety, and sprinkler work in the Premises as part of the
Tenant Improvements. The plans and drawings to be prepared by Architect and the
Engineers hereunder shall be known collectively as the “Construction Drawings.”
All Construction Drawings shall comply at a minimum with Landlord’s
Specifications and shall be in a drawing format reasonably acceptable to
Landlord. Landlord’s review of the Construction Drawings as set forth in this
Section 2, shall be for its sole purpose and shall not imply Landlord’s review
of the same, or obligate Landlord to review the same, for quality, design, code
compliance or other like matters. Accordingly, notwithstanding that any
Construction Drawings are reviewed by Landlord or its space planner, architect,
engineers and consultants, and notwithstanding any advice or assistance which
may be rendered to Tenant by Landlord or Landlord’s space planner, architect,
engineers, and consultants, Landlord shall have no liability whatsoever in
connection therewith, except to the extent that Landlord has specifically
requested a modification to the Construction Drawings as a condition to
Landlord’s approval of the Construction Drawings, and shall not be responsible
for any omissions or errors contained in the Construction Drawings, and Tenant’s
waiver and indemnity set forth in this Lease shall specifically apply to the
Construction Drawings. Each time Landlord is granted the right to review,
consent or approve the Construction Drawings or any component thereof
(collectively, “Consent”), such Consent shall not be unreasonably withheld,
conditioned or delayed. For purposes of this agreement, Landlord consents to the
selection and use of Interior Architects (IA), and Acies Engineering as
acceptable Architects and Engineers for preparing drawings Tenants Construction
Drawings.
     2.2 Final Space Plan. Tenant and the Architect shall prepare the final
space plan for the Tenant Improvements (the “Final Space Plan”), and shall
deliver the Final Space Plan to Landlord for Landlord’s approval. The Final
Space Plan shall show all corridors, internal and external offices and
partitions, and exiting. Landlord shall, within five (5) business days after
Landlord’s receipt of the Final Space Plan (i) approve the Final Space Plan,
(ii)

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approve the Final Space Plan subject to specified conditions to be complied with
when the Final Working Drawings are submitted by Tenant to Landlord, or
(iii) reasonably disapprove the Final Space Plan. If Landlord disapproves the
Final Space Plan, Tenant may resubmit the Final Space Plan to Landlord at any
time, and Landlord shall approve or disapprove of the resubmitted Final Space
Plan, based upon the criteria set forth in this Section 2.2, within five
(5) business days after Landlord receives such resubmitted Final Space Plan.
Such procedures shall be repeated until the Final Space Plan is approved. The
Final Space Plan may be provided by Tenant to Landlord in one or more stages and
at one or more times and the time periods set forth herein shall apply to each
portion submitted.
     2.3 Completion of Construction Drawings. Once Landlord has approved the
Final Space Plan, Tenant, the Architect and the Engineers shall complete the
Construction Drawings for the Premises in a form which is sufficient to obtain
applicable permits and shall submit such Construction Drawings to Landlord for
Landlord’s approval. Landlord shall, within ten (10) business days after
Landlord’s receipt of the Construction Drawings, either (i) approve the
Construction Drawings, which approval shall not be unreasonably withheld if the
same are logical evolutions of the Final Space Plan and do not deviate in any
material respect therefrom, (ii) approve the Construction Drawings subject to
specified conditions which must be stated in a reasonably clear and complete
manner to be satisfied by Tenant prior to submitting the Approved Construction
Drawings for permits as set forth in Section 2.4 below of this Tenant Work
Letter, or (iii) disapprove and return the Construction Drawings to Tenant with
requested revisions. If Landlord disapproves the Construction Drawings, Tenant
may resubmit the Construction Drawings to Landlord at any time, and Landlord
shall approve or disapprove the resubmitted Construction Drawings, based upon
the criteria set forth in this Section 2.3, within five (5) business days after
Landlord receives such resubmitted Construction Drawings. Such procedure shall
be repeated until the Construction Drawings are approved.
     2.4 Approved Construction Drawings. The Construction Drawings for the
Tenant Improvements shall be approved by Landlord (the “Approved Construction
Drawings”) prior to the commencement of construction of the Tenant Improvements.
Tenant shall, at its sole cost and expense, cause to be obtained all applicable
building permits required in connection with the construction of the Tenant
Improvements (“Permits”). Tenant hereby agrees that neither Landlord nor
Landlord’s consultants shall be responsible for obtaining any Permits or
certificate of occupancy for the Premises and that obtaining the same shall be
Tenant’s responsibility; provided, however, that Landlord shall cooperate at no
cost to Landlord with Tenant in performing ministerial acts reasonably necessary
to enable Tenant to obtain any such Permits or certificate of occupancy. No
changes, modifications or alterations in the Approved Construction Drawings may
be made without the prior written consent of Landlord pursuant to the terms of
Section 2.5 below.
     2.5 Change Orders. In the event Tenant desires to change the Approved
Construction Drawings, Tenant shall deliver notice (the “Drawing Change Notice”)
of the same to Landlord, setting forth in detail the changes (the “Tenant
Change”) Tenant desires to make to the Approved Construction Drawings. Landlord
shall, within four (4) business days of receipt of a Drawing Change Notice,
either (i) approve the Tenant Change, which approval shall not be unreasonably
withheld if the same is consistent with the Final Space

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Plan or (ii) disapprove the Tenant Change and deliver a notice to Tenant
specifying in reasonably sufficient detail the reasons for Landlord’s
disapproval. Notwithstanding the foregoing, Landlord’s consent shall not be
required for Tenant Changes which meet the criteria for Alterations that do not
require the consent of Landlord pursuant to the terms of Paragraph 12(a) above;
provided, however that Tenant shall provide Landlord with written notice of any
such Tenant Changes.

3.     Construction of the Tenant Improvements

     3.1 Tenant’s Selection of Contractors.
     (a) The Contractor. Tenant shall retain a licensed general contractor (the
“Contractor”) pre-approved by Landlord, which approval shall not be unreasonably
withheld or delayed, prior to Tenant causing the Contractor to construct the
Tenant Improvements.
     (b) Tenant’s Agents. All major trade subcontractors and suppliers used by
Tenant (such major trade subcontractors and material suppliers along with all
other laborers, materialmen, and suppliers, and the Contractor to be known
collectively as “Tenant’s Agents”) must be approved in writing by Landlord,
which approval shall not be unreasonably withheld, conditioned or delayed,
provided that, subject to the terms hereof, Tenant shall cause Landlord’s
designated structural, mechanical and life safety subcontractors to be retained
in connection with the Tenant Improvements. If Landlord does not approve any of
Tenant’s proposed subcontractors, laborers, materialmen or suppliers, Tenant
shall submit other proposed subcontractors, laborers, materialmen or suppliers
for Landlord’s written approval. The Contractor and the Contractor’s
subcontractors (collectively, “Tenant’s Contractors”) and their respective
workers shall conduct their activities in and around the Premises, the Building
and the Project in a harmonious relationship with all other subcontractors,
laborers, materialmen and supplies at the Premises, the Building and the
Project.
     3.2 Construction of Tenant Improvements by Tenant’s Agents.
     (a) Construction Contract. Prior to Tenant’s execution of the construction
contract and general conditions with Contractor (the “Contract”), Tenant shall
submit the Contract to Landlord for its approval, which approval shall not be
unreasonably withheld or delayed. Prior to the commencement of the construction
of the Tenant Improvements, and after Tenant has accepted all bids for the
Tenant Improvements, Tenant shall provide Landlord with a detailed breakdown, by
trade, of the final costs to be incurred or which have been incurred in
connection with the design and construction of the Tenant Improvements to be
performed by or at the direction of Tenant or the Contractor.
     (b) Tenant’s Agents.
          (i) Landlord’s General Conditions for Tenant’s Agents and Tenant
Improvement Work. Tenant’s and Tenant’s Agent’s construction of the Tenant
Improvements shall comply with the following: (A) the Tenant Improvements shall
be constructed in conformance with the Approved Construction Drawings;
(B) Tenant’s Contractors shall submit

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schedules of all work relating to the Tenant Improvements to Landlord and
Landlord shall, within five (5) business days of receipt thereof, inform Tenant
and Tenant’s Contractors of any changes which are reasonably necessary thereto
in order to avoid interference with Landlord’s work or unreasonable disruption
of existing tenants and Tenant’s Contractors shall adhere to such corrected
schedule; and (C) Tenant shall abide by all construction guidelines and
reasonable rules made by Landlord’s Project manager with respect to any matter,
within reason, in connection with this Tenant Work Letter, including, without
limitation, the construction of the Tenant Improvements.
          (ii) Indemnity. Tenant’s indemnity of Landlord as set forth, qualified
and conditioned in this Lease shall also apply with respect to any and all
costs, losses, damages, injuries and liabilities related in any way to any act
or omission of Tenant or Tenant’s Agents, or anyone directly or indirectly
employed by any of them, or in connection with Tenant’s non-payment of any
amount arising out of the Tenant Improvements and/or Tenant’s disapproval of all
or any portion of any request for payment. The waivers of subrogation set forth
in this Lease pertaining to property damage shall be fully applicable to damage
to property arising as a result of any work performed pursuant to the terms of
this Tenant Work Letter.
          (iii) Requirements of Tenant’s Agents. Tenant’s Contractor shall
guarantee to Tenant and for the benefit of Landlord that the portion of the
Tenant Improvements for which it is responsible shall be free from any defects
in workmanship and materials for a period of not less than one (1) year from the
date of completion thereof. Tenant’s Contractor shall be responsible for the
replacement or repair, without additional charge, of all work done or furnished
in accordance with its contract that shall become defective within one (1) year
after final completion. All such warranties or guarantees as to materials or
workmanship of or with respect to the Tenant Improvements shall be contained in
the Contract or subcontract and shall be written such that such guarantees or
warranties shall inure to the benefit of both Landlord and Tenant, as their
respective interests may appear, and can be directly enforced by either. Tenant
covenants to give to Landlord any assignment or other assurances which may be
necessary to effect such right of direct enforcement.
          (iv) Insurance Requirements.
          (A) General Coverages. Tenant’s Contractor and major trade
subcontractors shall carry worker’s compensation insurance covering all of their
respective employees, and shall also carry public liability insurance, including
property damage, all with limits, in form and with companies as are required to
be carried by Tenant as set forth in this Lease (provided that the limits of
liability to be carried by such parties shall be in an amount which is customary
for such respective parties employed by tenants constructing improvements in the
Comparable Buildings), and the policies therefor shall insure Landlord and
Tenant, as their interests may appear, as well as the Contractor and
subcontractors.
          (B) Special Coverages. Contractor shall carry “Builder’s All Risk”
insurance, in an amount approved by Landlord but not more than the amount of the
Contract, covering the construction of the Tenant Improvements, and such other
insurance as Landlord may reasonably require, it being understood and agreed
that the Tenant Improvements shall be insured by Tenant pursuant to this Lease
immediately upon

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completion thereof. Such insurance shall be in amounts and shall include such
extended coverage endorsements as may be reasonably required by Landlord (to the
extent they are generally required by landlords of Comparable Buildings) and
shall be in a form and with companies as are required to be carried by Tenant
pursuant to the terms of this Lease.
          (C) General Terms. Certificates for all insurance carried pursuant to
this Section 3.2(b)(iv) shall be delivered to Landlord before the commencement
of construction of the Tenant Improvements and before the Contractor’s equipment
is moved onto the Project. All such policies of insurance must contain a
provision that the company writing said policy will give Landlord thirty
(30) days’ prior notice of any cancellation or lapse of the effective date or
any reduction in the amounts of such insurance. In the event that the Tenant
Improvements are damaged by any cause during the course of the construction
thereof and this Lease is not terminated, Tenant shall immediately repair the
same at Tenant’s sole cost and expense. Tenant’s Agents shall maintain all of
the foregoing insurance coverage in force until the completion of the Tenant
Improvements. All such insurance relating to property, except Workers’
Compensation, maintained by Tenant’s Agents shall preclude subrogation claims by
the insurer against anyone insured thereunder. Such insurance shall provide that
it is primary insurance as respects the owner and that any other insurance
maintained by Landlord is excess and noncontributing with the insurance required
hereunder. The requirements for the foregoing insurance shall not derogate from
the provisions for indemnification of Landlord by Tenant under
Section 3.2(b)(ii) of this Tenant Work Letter and Tenant’s right with respect to
the waiver of subrogation.
     (c) Governmental Compliance. The Tenant Improvements shall comply in all
respects with the following: (i) all Laws; (ii) applicable standards of the
American Insurance Association (formerly, the National Board of Fire
Underwriters) and the National Electrical Code; and (iii) building material
manufacturer’s specifications.
     (d) Inspection by Landlord. Landlord shall have the right to inspect the
Tenant Improvements at all reasonable times; provided, however, that Landlord’s
failure to inspect the Tenant Improvements shall in no event constitute a waiver
of any of Landlord’s rights hereunder nor shall Landlord’s inspection of the
Tenant Improvements constitute Landlord’s approval of the same. In the event
that Landlord should disapprove any portion of the Tenant Improvements during an
inspection, Landlord shall notify Tenant in writing within a reasonable time of
such inspection of such disapproval and shall specify in reasonably sufficient
detail the items disapproved. Any defects or deviations in, and/or disapprovals
in accordance herewith by Landlord of, the Tenant Improvements shall be
rectified by Tenant at Tenant’s expense and at no expense to Landlord; provided,
however, that in the event Landlord determines that a defect or deviation exists
or reasonably disapproves of any matter in connection with any portion of the
Tenant Improvements, Landlord may, following notice to Tenant and a reasonable
period of time for Tenant to cure, take such action as Landlord deems necessary
to correct the same, at Tenant’s expense, and at no additional expense to
Landlord, and without incurring any liability on Landlord’s part.
     (e) Meetings. Commencing upon the execution of this Lease, Tenant shall
hold periodic meetings at a reasonable time, with the Architect and the
Contractor regarding the

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progress of the preparation of Construction Drawings and the construction of the
Tenant Improvements, which meetings shall be held at a location mutually
agreeable by Tenant and Landlord, and Landlord and/or its agents shall receive
prior notice of, and shall have the right to attend, all such meetings, and,
upon Landlord’s request, certain of Tenant’s Agents shall attend such meetings
in person or via conference call. In addition, minutes shall be taken at all
such meetings, a copy of which minutes shall be promptly delivered to Landlord.
One such meeting each month shall include the review of the request by Tenant of
Contractor’s current request for payment.
     3.3 Notice of Completion; Copy of Record Set of Plans. Within ten (10) days
after completion of construction of the Tenant Improvements, Tenant shall
prepare a Notice of Completion, which Landlord shall execute if factually
correct, and Tenant shall cause such Notice of Completion to be recorded in the
appropriate office of the county recorder in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do
so, Landlord may execute and file the same on behalf of Tenant as Tenant’s agent
for such purpose, at Tenant’s sole cost and expense. At the conclusion of
construction, (i) Tenant shall cause the Architect and Contractor (A) to update
the Approved Construction Drawings as necessary to reflect all changes made to
the Approved Construction Drawings during the course of construction, (B) to
certify to the best of their knowledge that the updated drawings are true and
correct, which certification shall survive the expiration or termination of this
Lease, and (C) to deliver to Landlord two (2) CD-ROMs of such updated Approved
Construction Drawings, in CAD format, within forty-five (45) days following
issuance of a certificate of occupancy for the Premises, and (ii) Tenant shall
deliver to Landlord a copy of all warranties, guaranties, and operating manuals
and information relating to the improvements, equipment, and systems in the
Premises.

4.     Miscellaneous

     4.1 Tenant’s Representative. Tenant has designated [please provide] as its
sole representative with respect to the matters set forth in this Tenant Work
Letter, who shall have full authority and responsibility to act on behalf of the
Tenant as required in this Tenant Work Letter.
     4.2 Landlord’s Representative. Landlord has designated [to be provided] as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
     4.3 Time of the Essence in This Tenant Work Letter. Unless otherwise
indicated, all references herein to a “number of days” shall mean and refer to
calendar days. If any item requiring approval is timely disapproved by Landlord,
the procedure for preparation of the document and approval thereof shall be
repeated until the document is approved by Landlord.
     4.4 Tenant’s Lease Default. Notwithstanding any terms to the contrary
contained in this Lease, if Tenant is in default of this Lease (including,
without limitation, this Tenant

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Work Letter) at any time on or before the completion of the Tenant Improvements,
then (i) in addition to all other rights and remedies granted to Landlord
pursuant to the Lease, Landlord shall have the right to withhold payment of all
or any portion of the Tenant Improvement Allowance and/or Landlord may cause
Contractor to cease the construction of the Tenant Improvements (in which case,
Tenant shall be responsible for any delay in the completion of the Tenant
Improvements caused by such work stoppage), and (ii) all other obligations of
Landlord under the terms of this Tenant Work Letter shall be suspended until
such time as such default is cured pursuant to the terms of the Lease (in which
case, Tenant shall be responsible for any delay in the completion of the Tenant
Improvements caused by such inaction by Landlord). Notwithstanding the forgoing,
if a default by Tenant is cured, forgiven or waived, Landlord’s suspended
obligations shall be fully reinstated and resumed, effective immediately.

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Exhibit C
Rules and Regulations
     This exhibit, entitled “Rules and Regulations,” is and shall constitute
Exhibit C to the Lease Agreement, dated as of the Lease Date, by and between
Landlord and Tenant for the Premises. The terms and conditions of this Exhibit C
are hereby incorporated into and are made a part of the Lease. Capitalized terms
used but not otherwise defined in this Exhibit C have the meanings ascribed to
such terms in the Lease.
     1. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the consent of Landlord.
     2. All window coverings installed by Tenant and visible from the outside of
the Building require the prior written approval of Landlord.
     3. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance or any flammable or combustible materials on or around
the Premises, except to the extent that Tenant is permitted to use the same
under the terms of Paragraph 32 of the Lease.
     4. Tenant shall not alter any lock or install any new locks or bolts on any
door at the Premises without the prior consent of Landlord.
     5. Landlord shall provide Tenant a minimum of 120 building access
cards/keys. Tenant shall not make any duplicate keys or key cards to the
Premises or the Building without the prior consent of Landlord.
     6. Tenant shall park motor vehicles in Parking Areas designated by Landlord
except for loading and unloading. During those periods of loading and unloading,
Tenant shall not unreasonably interfere with traffic flow around the Building or
the Project and loading and unloading areas of other tenants. Tenant shall not
park motor vehicles in designated Parking Areas after the conclusion of normal
daily business activity.
     7. Tenant shall not disturb, solicit or canvas any tenant or other occupant
of the Building or the Project and shall cooperate to prevent same.
     8. No person shall go on the roof without Landlord’s permission.
     9. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of the
Building, to such a degree as to be objectionable to Landlord or other tenants,
shall be placed and maintained by Tenant, at Tenant’s expense, on vibration
eliminators or in noise-dampening housing or other devices sufficient to
eliminate noise or vibration.
     10. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in parking or receiving areas overnight.

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     11. Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable receptacles
stored behind screened enclosures at locations approved by Landlord.
     12. Tenant shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No displays
or sales of merchandise shall be allowed in the parking lots or other common
areas.
     13. Tenant shall not permit any animals, including, but not limited to, any
household pets (but excluding service animals, which are permitted), to be
brought or kept in or about the Premises, the Building, the Project or any of
the common areas.

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Exhibit D
Form of Estoppel Certificate
                              , a                            (“Tenant”) hereby
certifies to                                and its successors and assigns that
Tenant leases from                          , a                          
(“Landlord”) approximately             square feet of space (the “Premises”) in
                     pursuant to that certain Lease Agreement dated
                    , 20      by and between Landlord and Tenant, as amended by
                     (collectively, the “Lease”), a true and correct copy of
which is attached hereto as Exhibit A. Tenant hereby certifies to
                                        , that as of the date hereof:
     2. The Lease is in full force and effect and has not been modified,
supplemented or amended, except as set forth in the introductory paragraph
hereof.
     3. Tenant is in actual occupancy of the Premises under the Lease and Tenant
has accepted the same. Landlord has performed all obligations under the Lease to
be performed by Landlord, including, without limitation, completion of all
tenant work required under the Lease and the making of any required payments or
contributions therefor. Tenant is not entitled to any further payment or credit
for tenant work.
     4. The initial term of the Lease commenced                     , 20     
and shall expire                      , 20     . Tenant has the following rights
to renew or extend the term of the Lease or to expand the Premises:
                                        .
     5. Tenant has not paid any rentals or other payments more than one
(1) month in advance except as follows:
                                             .
     6. Base Rent payable under the Lease is                      Dollars ($    
                ). Base Rent and additional Rent have been paid through
                    , 20     . There currently exists no claims, defenses,
rights of set-off or abatement to or against the obligations of Tenant to pay
Base Rent or Additional Rent or relating to any other term, covenant or
condition under the Lease.
     7. There are no concessions, bonuses, free months’ rent, rebates or other
matters affecting the rentals except as follows:
                                                             .
     8. No security or other deposit has been paid with respect to the Lease
except as follows:                                                 
            .
     9. Landlord is not currently in default under the Lease and there are no
events or conditions existing which, with or without notice or the lapse of
time, or both, could constitute a default of Landlord under the Lease or entitle
Tenant to offsets or defenses against the prompt payment of rent except as
follows:                                                              . Tenant
is not in default under any of the terms and conditions of the Lease nor is
there now any fact or condition which, with notice or lapse of time or both,
will become such a default.

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     10. Tenant has not assigned, transferred, mortgaged or otherwise encumbered
its interest under the Lease, nor subleased any of the Premises nor permitted
any person or entity to use the Premises except as follows:
                                                             .
     11. Tenant has no rights of first refusal or options to purchase the
property of which the Premises is a part.
     12. The Lease represents the entire agreement between the parties with
respect to Tenant’s right to use and occupy the Premises.
     Tenant acknowledges that the parties to whom this certificate is addressed
will be relying upon the accuracy of this certificate in connection with their
acquisition and/or financing of the Premises.
     In Witness Whereof, Tenant has caused this certificate to be executed this
           day of                     , 20     .

          Tenant:     ,       a          By:           Name:           Title:  
   

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Exhibit E
Form of Subordination, Non-Disturbance and Attornment Agreement
     This Agreement is dated the            day of                      ,
20     , and is made between                                , a               
            having a place of business and mailing address of
                               (“Mortgagee”), and       
                        , a                                having a place of
business and mailing address of                                      
(“Tenant”).
Recitals:

I.   Tenant has entered into a certain lease (“Lease”) dated
                    , 20     , with                     , as lessor (“Landlord”)
covering certain premises known as                     , being part of a
premises commonly known as                      and located in
                     (the “Premises”).   II.   Mortgagee has agreed to make a
mortgage loan in the amount of                      Dollars
($                    ) (together with all amendments, modifications,
supplements, renewals, extensions, spreaders and consolidations thereto, the
“Mortgage”) to Landlord, secured by the Premises, and the parties desire to set
forth their agreement herein.

     Now, Therefore, in consideration of the Premises, and of the sum of One
Dollar ($1.00) by each party in hand paid to the other, the receipt of which is
hereby acknowledged, the parties hereby agree as follows:

A.   Said Lease is and shall be subject and subordinate to the Mortgage insofar
as it affects the real property of which the Premises form a part to the full
extent of the amounts secured thereby and interest thereon.   B.   Tenant agrees
that it will attorn to and recognize any purchaser at a foreclosure sale under
the Mortgage, any transferee who acquires the Premises by deed in lieu of
foreclosure, and the successors and assigns of such purchaser(s), as its
landlord for the unexpired balance (and any extensions, if exercised) of the
term of said Lease upon the same terms and conditions set forth in said Lease.  
C.   If it becomes necessary to foreclose the Mortgage, Mortgagee will not
terminate said Lease nor join Tenant in summary or foreclosure proceedings
(unless such joinder shall be required to protect Mortgagee’s interest under the
Mortgage and in which case Mortgagee shall not seek affirmative relief from
Tenant in such action or proceeding) so long as Tenant is not in default under
any of the terms, covenants, or condition of said Lease.   D.   If Mortgagee
succeeds to the interest of Landlord under the Lease, Mortgagee shall not be:

  1.   liable for any act or omission of any prior landlord (including
Landlord); or     2.   liable for the return of any security deposit not
delivered to Mortgagee by Landlord; or

Addendum-1

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  3.   subject to any offsets or defenses which Tenant might have against any
prior landlord (including Landlord); or     4.   bound by any rent or additional
rent which Tenant might have paid for more than the current month to any prior
landlord (including Landlord); or     5.   bound by any amendment, modification,
extensions or renewal of the Lease made without Lender’s consent; or     6.  
bound by any representation or warranty not in the Lease made by any prior
landlord (including Landlord).

E.   This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their successors and assigns.   F.   Tenant agrees to give
Mortgagee, by registered or certified mail, return receipt requested, a copy of
any notice of default served upon Landlord, provided that prior to such notice
Tenant has been notified in writing (by way of Notice of Assignment of Rent and
Leases, or otherwise) of the address of such Mortgagee. Tenant further agrees
that Tenant shall not terminate the Lease nor abate rents thereunder or claim an
offset against rents thereunder unless notice has been given to Mortgagee and
Mortgagee has been given a reasonable period of time (including a period of time
to commence and complete a foreclosure proceeding) to cure such default.   G.  
Tenant acknowledges that it has notice that Landlord’s interest under the Lease
and the rents thereunder have been collaterally assigned to Mortgagee as part of
the security for the obligations secured by the Mortgage. Notice from Mortgagee
to Tenant directing payment of rent and all other sums due under the Lease shall
have the same effect under the Lease as a notice to Tenant from Landlord and
Tenant agrees to be bound by such notice. In the event of any conflict or
inconsistency between a notice from Landlord and a notice from Mortgagee, the
notice from Mortgagee shall control.   H.   This Agreement shall not be
modified, amended or terminated except by a writing duly executed by the party
against whom the same is sought to be enforced.   I.   This Agreement shall be
governed by and construed in accordance with the internal laws (as opposed to
the laws of conflicts) of the state in which the Premises are located.

Addendum-2

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     In Witness Whereof, the parties hereto have executed these presents as of
the day and year first above written.

         
 
Date  Mortgagee:  
      By:           Its:     
Address:                 
 
Date  Tenant:  
      By:           Its:   

Addendum-3

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Exhibit F
List of IT Equipment

1.   Liebert AC Unit #1   2.   Liebert AC Unit #2   3.   UPS   4.   UPS bypass  
5.   Distribution panel (3)   6.   large security panels (2)   7.   small
security panels (6)   8.   backboard with copper wires   9.   data panels on
backboard (6)   10.   teltrend machines (3)   11.   X Large racks (2)   12.  
Siemens server racks (2)   13.   large lockers (3)   14.   Compaq lockers (3)  
15.   Liebert alarm   16.   security panel   17.   security monitor