Exhibit 10.7

AMERICA CENTER

SAN JOSE, CALIFORNIA

LEASE

LEGACY III SJ AMERICA CENTER I, LLC,

a Delaware limited liability company

as Landlord,

and

POLYCOM, INC.,

a Delaware corporation

as Tenant

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TABLE OF CONTENTS

 

    Page  

SUMMARY OF BASIC LEASE INFORMATION

    iii    LEASE   ARTICLE 1  

PROJECT, BUILDING AND PREMISES

    1    ARTICLE 2  

LEASE TERM

    4    ARTICLE 3  

BASE RENT

    5    ARTICLE 4  

ADDITIONAL RENT

    5    ARTICLE 5  

USE OF PREMISES

    11    ARTICLE 6  

SERVICES AND UTILITIES

    12    ARTICLE 7  

REPAIRS

    16    ARTICLE 8  

ADDITIONS AND ALTERATIONS

    18    ARTICLE 9  

COVENANT AGAINST LIENS

    19    ARTICLE 10  

INDEMNIFICATION AND INSURANCE

    19    ARTICLE 11  

DAMAGE AND DESTRUCTION

    21    ARTICLE 12  

CONDEMNATION

    23    ARTICLE 13  

COVENANT OF QUIET ENJOYMENT

    23    ARTICLE 14  

ASSIGNMENT AND SUBLETTING

    23    ARTICLE 15  

SURRENDER; OWNERSHIP AND REMOVAL OF PERSONAL PROPERTY

    25    ARTICLE 16  

HOLDING OVER

    26    ARTICLE 17  

ESTOPPEL CERTIFICATES

    26    ARTICLE 18  

SUBORDINATION

    26    ARTICLE 19  

TENANT’S DEFAULTS; LANDLORD’S REMEDIES

    27    ARTICLE 20  

ROOFTOP SPECIAL EQUIPMENT

    28    ARTICLE 21  

COMPLIANCE WITH LAW

    30    ARTICLE 22  

ENTRY BY LANDLORD

    30    ARTICLE 23  

TENANT PARKING

    30    ARTICLE 24  

MISCELLANEOUS PROVISIONS

    31   

 

EXHIBITS   A-1  

OUTLINE OF PREMISES

  A-2  

OUTLINE OF MUST-TAKE SPACE

  B-1  

ORIGINAL PREMISES WORK LETTER

  B-2  

MUST-TAKE SPACE WORK LETTER

  C  

AMENDMENT TO LEASE

  D  

RULES AND REGULATIONS

  E  

LIST OF ENVIRONMENTAL REPORTS

  F  

FORM OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

  G  

LANDLORD’S SIGNAGE CRITERIA

  H  

LOCATION OF GENERATOR SITE

  I  

DEPICTION OF TENANT’S PARKING AREA

  J  

BASE BUILDING DESCRIPTION

  K  

LIST OF BASE BUILDING PLANS

  L  

FIFTH FLOOR SPECULATIVE SPACE PLAN

 

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    Page

M

  EXPECTED USEFUL LIFE OF BUILDING HVAC/ELEVATOR SYSTEMS AND EQUIPMENT  

N

  PRELIMINARY CONCEPTUAL PLANS  

O

  FORM OF ESCROW AGREEMENT  

P

  DEPICTION OF EQUIPMENT ROOM  

EXTENSION OPTION RIDER

 

(ii)

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INDEX

 

     Page(s)  

6201 Building

     1   

Abated Rent

     5   

Abatement Event

     15   

Accountant

     11   

ADA

     6   

Additional Rent

     5   

Adverse Condition

     1   

Affiliates

     25   

Alterations

     18   

Antennae Equipment

     28   

Approved Must-Take Space Contractor Proposal

     Exhibit B   

Approved Must-Take Space TI Invoice

     Exhibit B   

Approved Original Premises Contractor Proposal

     Exhibit B   

Approved Original Premises TI Invoice

     Exhibit B   

Architect

     Exhibit B, Exhibit B   

Base Building

     2   

Base Building Required Condition

     2   

Base Rent

     5   

Base, Shell and Core

     Exhibit B, Exhibit B   

Brokers

     34   

Building Top Signs

     32   

Calendar Year

     5   

Claims

     19   

Code

     Exhibit B   

Connecting Equipment

     28   

Consequential Damages

     19   

Construction

     35   

Construction Matters Arbitrator

     9   

Control

     25   

Current Lender

     27   

Damage Termination Date

     22   

Declaration Environmental Insurance Policy

     8   

Disputed Tenant Cost Share Amount

     13   

East Building Top Sign

     32   

Eligibility Period

     15   

Emergency Generator

     35   

Encumbrances

     26   

Environmental Documents

     11   

Estimate

     9   

Estimate Statement

     9   

Estimated Expenses

     9   

Estimated Repair Period

     21   

Excluded Claims

     19   

Expense Year

     5   

Expired Lease Years

     14   

Extended Useful Life

     14   

Exterior Signage

     32   

Fifth Floor Required Condition

     2   

Force Majeure

     34   

Fourth Floor Space

     3   

Fuel Tank

     36   

Future SNDA

     26   

Generator Connecting Equipment

     35   

Generator Equipment

     36   

Generator Site

     35   

Hazardous Material

     11   

HVAC/Elevator Systems and Equipment

     13   

Identified Hazardous Materials

     7   

Interest Rate

     10   

JAMS

     15   

Landlord

     1   

Landlord Approval Items

     16   

Landlord Parties

     19   

Landlord’s Damage Notice

     21   

Landlord’s Repair Period

     22   

Landlord’s Restoration Work

     22   

Landlord’s Third Party Consultants

     13   

Lease

     1, Exhibit B, Exhibit B   

Lease Commencement Date

     4   

Lease Expiration Date

     4   

Lease Term

     4   

Lease Year

     4   

 

(iii)

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     Page(s)  

Management Fee

     6   

Minimum Specifications

     Exhibit B, Exhibit B   

Must-Take Space

     3   

Must-Take Space Acceleration Notice

     3   

Must-Take Space Acceleration Notice Period

     3   

Must-Take Space Approved Preliminary Construction Drawings

     Exhibit B   

Must-Take Space Approved TI Package

     Exhibit B   

Must-Take Space Approved Working Drawings

     Exhibit B   

Must-Take Space Commencement Date

     3   

Must-Take Space Construction Contract

     Exhibit B   

Must-Take Space Construction Drawings

     Exhibit B   

Must-Take Space Contractor

     Exhibit B   

Must-Take Space Contractor Proposal

     Exhibit B   

Must-Take Space Cost Proposal

     Exhibit B   

Must-Take Space Cost Proposal Delivery Date

     Exhibit B   

Must-Take Space Delivery Date

     4   

Must-Take Space Engineers

     Exhibit B   

Must-Take Space Escrow Account

     Exhibit B   

Must-Take Space Escrow Agent

     Exhibit B   

Must-Take Space Escrow Agreement

     Exhibit B   

Must-Take Space Final Cost Statement

     Exhibit B   

Must-Take Space Final Space Plan

     Exhibit B   

Must-Take Space Final Working Drawings

     Exhibit B   

Must-Take Space Landlord Supervision Fee

     Exhibit B   

Must-Take Space Outside Performance Payment Date

     Exhibit B   

Must-Take Space Over-Allowance Amount

     Exhibit B   

Must-Take Space Permit Delays

     Exhibit B, Exhibit B   

Must-Take Space Permits

     Exhibit B   

Must-Take Space Reimbursement Date

     Exhibit B   

Must-Take Space Substitution Notice

     3   

Must-Take Space Tenant Improvement Allowance

     Exhibit B   

Must-Take Space Tenant Improvement Allowance Items

     Exhibit B   

Must-Take Space Tenant Improvements

     Exhibit B   

Must-Take Space Term

     3   

Must-Take Space Test Fit Allowance

     Exhibit B   

Must-Take Space TI Invoice

     Exhibit B   

Must-Take Space TI Package

     Exhibit B   

Must-Take Space Work Letter

     1, Exhibit B   

Non-Base Building/Fifth Floor Required Condition Notice

     2   

Non-Base Building/Fifth Floor Required Condition Outside Date

     2   

Non-Listed Specifications and Finishes

     Exhibit B, Exhibit B   

Non-Working/Watertight Condition Notice

     2   

Non-Working/Watertight Condition Outside Date

     2   

Notices

     34   

Operating Expenses

     5   

Original Premises Approved Preliminary Construction Drawings

     Exhibit B   

Original Premises Approved TI Package

     Exhibit B   

Original Premises Approved Working Drawings

     Exhibit B   

Original Premises Construction Contract

     Exhibit B   

Original Premises Construction Drawings

     Exhibit B   

Original Premises Contractor

     Exhibit B   

Original Premises Contractor Proposal

     Exhibit B   

Original Premises Cost Proposal

     Exhibit B   

Original Premises Cost Proposal Delivery Date

     Exhibit B   

Original Premises Delivery Date

     2   

Original Premises Engineers

     Exhibit B   

Original Premises Escrow Account

     Exhibit B   

Original Premises Escrow Agent

     Exhibit B   

Original Premises Escrow Agreement

     Exhibit B   

Original Premises Final Cost Statement

     Exhibit B   

Original Premises Final Space Plan

     Exhibit B   

Original Premises Final Working Drawings

     Exhibit B   

Original Premises Landlord Supervision Fee

     Exhibit B   

Original Premises Outside Performance Payment Date

     Exhibit B   

Original Premises Over-Allowance Amount

     Exhibit B   

Original Premises Permit Delays

     Exhibit B, Exhibit B   

Original Premises Permits

     Exhibit B   

Original Premises Reimbursement Date

     Exhibit B   

Original Premises Tenant Improvement Allowance

     Exhibit B   

Original Premises Tenant Improvement Allowance Items

     Exhibit B   

Original Premises Tenant Improvements

     Exhibit B   

Original Premises Test Fit Allowance

     Exhibit B   

Original Premises TI Invoice

     Exhibit B   

Original Premises TI Package

     Exhibit B   

 

(iv)

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     Page(s)  

Original Premises Work Letter

     vii, Exhibit B   

Original Tenant

     30   

Other Buildings

     1   

Outside Repair Period

     17   

Parking Area

     1   

Partially Approved Must-Take Space TI Invoice

     Exhibit B   

Partially Approved Original Premises TI Invoice

     Exhibit B   

Premises

     1   

Prime Rate

     10   

Project

     1   

Proposition 13

     8   

Qualified Sublessee

     32   

Reference Rate

     10   

Remaining Useful Life

     14   

Remaining Useful Life Report

     13   

Rent

     5   

Repair Cost

     14   

Replacement Cost

     14   

Required Remaining Useful Life Report Content

     13   

Requirements

     6   

Review Period

     11   

Rooftop Equipment Area

     28   

Satellite Equipment

     28   

Section 6.2 Arbitrator

     15   

Section 7.3 Arbitrator

     17   

Signage Restrictions

     32   

South Building Top Sign

     32   

Special Equipment

     29   

Statement

     9   

Stipulated Useful Life

     14   

Subject Space

     23   

Substantial Complete

     Exhibit B, Exhibit B   

Substantial Completion of the Must-Take Space Tenant Improvements

     Exhibit B   

Substantial Completion of the Original Premises Tenant Improvements

     Exhibit B   

Summary

     vi   

Systems and Equipment

     8   

Tax Expenses

     8   

Tenant

     1   

Tenant Cost Share

     13   

Tenant Cost Share Outside Date

     13   

Tenant Damage Event

     22   

Tenant Improvements

     18   

Tenant Work Letters

     1   

Tenant’s Broker

     34   

Tenant’s Broker’s Commission

     34   

Tenant’s Cost Share Invoice

     13   

Tenant’s Damage Termination Notice

     22   

Tenant’s Monument Sign

     32   

Tenant’s Share

     9   

Third Floor Space

     3   

Transaction Document

     26   

Transaction Notice

     26   

Transfer Notice

     23   

Transfer Premium

     24   

Transferee

     23   

Transfers

     23   

Useful Life Extension Repairs

     13   

Utilities Costs

     9   

Working Condition

     2   

 

(v)

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SUMMARY OF BASIC LEASE INFORMATION

This Summary of Basic Lease Information (“Summary”) is hereby incorporated into
and made a part of the attached Lease. Each reference in the Lease to any term
of this Summary shall have the meaning as set forth in this Summary for such
term. In the event of a conflict between the terms of this Summary and the
Lease, the terms of the Lease shall prevail. Any capitalized terms used herein
and not otherwise defined herein shall have the meaning as set forth in the
Lease.

 

TERMS OF LEASE (References are to the Lease)    DESCRIPTION 1.   Date:    August
4, 2011 2.   Landlord:    LEGACY III SJ AMERICA CENTER I, LLC, a Delaware     
   limited liability company 3.   Address of Landlord (Section 24.19):   

Legacy III SJ American Center I, LLC

c/o Legacy Partners Commercial, Inc.

        4000 East Third Avenue, Suite 600         Foster City, California
94404-4805         Attention: Regional Vice President 4.   Tenant:    POLYCOM,
INC.,         a Delaware corporation 5.   Address of Tenant (Section 24.19):   

Polycom, Inc.

4750 Willow Road

        Pleasanton, California 94588         Attention: Corporate Real Estate  
      Telephone: (925) 924-5828         Email: robert.teed@polycom.com        
With a copy to:         Polycom, Inc.         4750 Willow Road        
Pleasanton, California 94588         Attention: Legal Department        
Telephone: (925) 924-6000         Email: sayed.darwish@polycom.com        
(Prior to Original Premises Delivery Date)         and         Polycom, Inc.  
      6001 America Center Drive         San Jose, California 95002        
Attention: Corporate Real Estate         Telephone: (925) 924-5828        
Email: robert.teed@polycom.com         With a copy to:         Polycom, Inc.  
      6001 America Center Drive         San Jose, California 95002        
Attention: Legal Department         Telephone: (925) 924-6000         Email:
sayed.darwish@polycom.com         (After Lease Original Premises Delivery Date)
6.   Premises (Article 1):     

6.1      

   Premises:    176,148 rentable square feet of space comprising the entire
rentable area of the first (1st), second (2nd), fourth (4th), fifth (5th) and
sixth (6th) floors of the Building (as defined below), as set forth in Exhibit
A-1 attached hereto (sometimes also referred to as the “original Premises”),
subject, however, to Tenant’s right to substitute the entire rentable area of
the third (3rd) floor of the Building in place of the entire rentable area of
the fourth (4th) floor of the Building as part of the original

 

(vi)

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        Premises pursuant to Section 1.4.1 below. Upon the Must- Take Space
Commencement Date, the Premises shall be expanded to include the Must-Take Space
(pursuant to, and as such terms are defined in, Section 1.4 of the Lease) and
shall contain 212,863 rentable square feet.   6.2    Building:    The Premises
are located in the building whose address is 6001 America Center Drive, San
Jose, California 95002. 7.   Term (Article 2):      7.1    Lease Term:    Ten
(10) years.   7.2    Lease Commencement Date:    The earlier of (i) the date
Tenant commences business operations in the original Premises, or (ii) May 1,
2012, subject to extension for Original Premises Permit Delays (as defined in
and pursuant to Section 5.2 of the Original Premises Work Letter attached hereto
as Exhibit B-1 (the “Original Premises Work Letter”)).   7.3    Lease Expiration
Date:    The last day of the month in which the tenth (10th) anniversary of the
Lease Commencement Date occurs.   7.4    Amendment to Lease:    Landlord and
Tenant may confirm the Lease Commencement Date and Lease Expiration Date in an
Amendment to Lease (Exhibit C) to be executed pursuant to Article 2 of the
Lease. 8.   Base Rent (Article 3):      8.1    Base Rent for original Premises:
  

 

Months of Lease Term

   Annual
Base Rent      Monthly
Installment
of Base Rent      Monthly
Base Rental
Rate per Rentable
Square Foot
of original Premises  

1-24*

   $ 5,411,266.50       $ 450,938.88       $ 2.56   

25-36

   $ 5,580,368.60       $ 465,030.72       $ 2.64   

37-48

   $ 5,749,470.70       $ 479,122.56       $ 2.72   

49-60

   $ 5,918,572.80       $ 493,214.40       $ 2.80   

61-72

   $ 6,087,674.80       $ 507,306.24       $ 2.88   

73-84

   $ 6,277,914.70       $ 523,159.56       $ 2.97   

85-96

   $ 6,468,154.50       $ 539,012.88       $ 3.06   

97-108

   $ 6,658,394.40       $ 554,866.20       $ 3.15   

109-120

   $ 6,848,634.20       $ 570,719.52       $ 3.24   

 

* Subject to abatement for the first eighteen (18) months of the initial Lease
Term pursuant to Article 3 of the Lease.

 

  8.2    Base Rent for Must-Take Space:   

 

Months of Lease Term

   Annual
Base Rent      Monthly
Installment
of Base Rent      Monthly
Base Rental
Rate per Rentable
Square Foot
of Must-Take Space  

Must-Take Space Commencement Date-24*

   $ 1,127,884.80       $ 93,990.40       $ 2.56   

25-36

   $ 1,163,131.20       $ 96,927.60       $ 2.64   

37-48

   $ 1,198,377.60       $ 99,864.80       $ 2.72   

49-60

   $ 1,233,624.00       $ 102,802.00       $ 2.80   

61-72

   $ 1,268,870.40       $ 105,739.20       $ 2.88   

73-84

   $ 1,308,522.60       $ 109,043.55       $ 2.97   

85-96

   $ 1,348,174.80       $ 112,347.90       $ 3.06   

97-108

   $ 1,387,827.00       $ 115,652.25       $ 3.15   

109-120

   $ 1,427,479.20       $ 118,956.60       $ 3.24   

 

* Subject to abatement for the period, if any, from the Must-Take Space
Commencement Date until the last day of eighteenth (18th) month of the initial
Lease Term pursuant to Article 3 of the Lease.

 

9.  

Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs

(Article 4):

   82.75% (176,148 rentable square feet within the Premises/212,863 rentable
square feet within the Building); provided, however, that effective from and
after the Must- Take Space Commencement Date, Tenant’s Share shall equal 100%
(212,863 rentable square feet within the Premises/212,863 rentable square feet
within the Building).

 

(vii)

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10.   Parking (Article 23):    Seven hundred (700) parking spaces comprised of
the following and located in the areas depicted on Exhibit I attached to the
Lease: (i) six hundred seventy-nine (679) automobile parking spaces, of which
fifty-five (55) automobile parking spaces shall be unreserved automobile parking
spaces in the area designated as “Non-Exclusive” on Exhibit I attached hereto,
and the remainder of which automobile parking spaces shall be exclusive
automobile parking spaces located within the boundary lines surrounding the
Building depicted on Exhibit I attached hereto; (ii) thirteen (13) handicapped
parking spaces, all of which handicapped parking spaces shall be exclusive
handicapped parking spaces located within the boundary lines surrounding the
Building depicted on Exhibit I attached hereto; and (iii) eight (8) motorcycle
parking spaces, all of which motorcycle parking spaces shall be exclusive
motorcycle parking spaces located within the boundary lines surrounding the
Building depicted on Exhibit I attached hereto. 11.   Brokers (Section 24.25):
   Cornish & Carey representing Landlord, and Studley, Inc. representing Tenant.

 

(viii)

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LEASE

This Lease, which includes the preceding Summary and the exhibits attached
hereto and incorporated herein by this reference (this Lease, the Summary and
the exhibits to be known sometimes collectively hereafter as this “Lease”),
dated as of the date set forth in Section 1 of the Summary, is made by and
between LEGACY III SJ AMERICA CENTER I, LLC, a Delaware limited liability
company (“Landlord”), and POLYCOM, INC., a Delaware corporation (“Tenant”).

ARTICLE 1

PROJECT, BUILDING AND PREMISES

1.1 Project, Building and Premises.

1.1.1 Premises. Upon and subject to the terms, covenants and conditions
hereinafter set forth in this Lease, Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the premises set forth in Section 6.1 of the Summary
(the “Premises”), which Premises are located in the Building defined in
Section 6.2 of the Summary constructed on the Project. The outline of the floor
plan of the Premises is set forth in Exhibit A-1 attached hereto.

1.1.2 Building and Project. The Building is part of a multi-building commercial
project currently containing two (2) office buildings and known as “America
Center”. The term “Project” as used in this Lease, shall mean, collectively:
(i) the Building; (ii) the other existing building whose street address is 6201
America Center Drive, San Jose, California (the “6201 Building”); (iii) the
surface parking areas servicing the Building and the 6201 Building (the “Parking
Area”); (iv) any outside plaza areas, walkways, driveways, courtyards, public
and private streets, transportation facilitation areas and other improvements
and facilities now or hereafter constructed surrounding and/or servicing the
Building and/or the 6201 Building, which are designated from time to time by
Landlord as common areas appurtenant to or servicing the Building, the 6201
Building and any such other improvements; (v) such other buildings as Landlord
may elect to construct and include as part of the Project from time to time (the
6201 Building and any such other buildings are sometimes referred to herein,
collectively, as the “Other Buildings”); (vi) any additional improvements,
facilities and common areas which Landlord (and/or any common area association
formed by Landlord, Landlord’s predecessor-in-interest and/or Landlord’s
assignee for the Project) has already or may be added thereto from time to time
within or as part of the Project; and (vii) the land upon which any of the
foregoing are situated. Notwithstanding the foregoing or anything contained in
this Lease to the contrary, (A) Landlord has no obligation to expand or
otherwise make any improvements within the Project, including, without
limitation, any of the outside plaza areas, walkways, driveways, courtyards,
public and private streets, transportation facilitation areas and other
improvements and facilities which comprise the Project (as the same may be
modified by Landlord from time to time without notice to Tenant), other than
Landlord’s obligations (if any) specifically set forth in the Original Premises
Work Letter and the Must-Take Space Work Letter attached hereto as Exhibit B-2
(the “Must-Take Space Work Letter” and together with the Original Premises Work
Letter, collectively, the “Tenant Work Letters”), and (B) Landlord shall have
the right from time to time to include or exclude any improvements or facilities
within the Project, at Landlord’s sole election, as more particularly set forth
in Section 1.1.3 below, so long as such inclusions or exclusions do not result
in an Adverse Condition (as defined hereinbelow). As used herein, an “Adverse
Condition” means: (1) a permanent adverse interference with Tenant’s use of the
Premises for Tenant’s permitted use described in Section 5.1 below; (2) a
temporary material adverse interference with Tenant’s use of the Premises for
Tenant’s permitted use described in Section 5.1 below; (3) an unreasonable
interference with Tenant’s access to the Premises; (4) an event which increases
Tenant’s monetary obligations under this Lease and/or materially increases
Tenant’s non-monetary obligations under this Lease; (5) an event which
materially decreases Tenant’s rights under this Lease; or (6) other than on a
temporary basis (for a commercially reasonable period of time and only to the
extent the same cannot be mitigated by Landlord, at no cost to Tenant, using
commercially reasonable efforts) in connection with Construction (as defined
below) at the Project, as expressly permitted in and subject to the limitations
set forth in Section 24.29 below, and other than during such period as is
reasonably necessary due to a damage or destruction, condemnation or other Force
Majeure (as defined below) event, (x) a material adverse interference with
access to the Parking Area for Tenant’s use of the number of parking spaces
allocated to Tenant as set forth in Section 10 of the Summary, or (B) a
reduction in the number of parking spaces available for Tenant’s use within the
Parking Area below the number of parking spaces allocated to Tenant as set forth
in Section 10 of the Summary.

1.1.3 Tenant’s and Landlord’s Rights. Landlord and Landlord’s agents, employees,
licensees and invitees shall have, subject to the provisions of this Lease and
provided that Landlord does not unreasonably interfere with Tenant’s use of the
Premises for Tenant’s permitted use described in Section 5.1 below, (i) the
right (including the right of access) to the roof and the exterior faces of all
exterior walls of the Building, (ii) the right of access to and use of the
risers and conduits of the Building, but only to the extent reasonably required
in order for Landlord to perform its obligations and/or exercise its rights
under this Lease, (iii) the right of access to the Building to perform its
obligations and exercise its rights under this Lease in the manner provided in
Article 22 below, (iv) the right (including the right of access) to the
equipment room on the first (1st) floor of the Building cross-hatched on Exhibit
P attached hereto in which the equipment for Landlord’s methane control system
and building management system is located and (v) any time prior to the
Must-Take Space Delivery Date, the right of access to and use of the Must-Take
Space. Tenant is hereby granted the right to the non-exclusive use of the areas
located on the Project designated by Landlord from time to time as common areas
of the Project; provided, however, that (A) Tenant’s use thereof shall be
subject to (1) the provisions of any covenants, conditions and restrictions
regarding the use thereof now or hereafter recorded against the Project,
provided that in no event shall any covenants, conditions and restrictions
hereafter recorded against the Project result in an Adverse Condition, and
(2) such

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reasonable, non-discriminatory rules, regulations and restrictions as Landlord
may make from time to time, and (B) Tenant may not go on the roof of the
Building (except in connection with Tenant’s operation and maintenance of the
HVAC system located on the roof of the Building and except as expressly
permitted under Article 20 below) or the Other Buildings without Landlord’s
prior consent (which may be withheld in Landlord’s sole and absolute discretion)
and without otherwise being accompanied by a representative of Landlord. Subject
to the terms and conditions of this Lease, Landlord reserves the right from time
to time to use any of the common areas of the Project, the roof of the Building
and the roof, risers and conduits of the Other Buildings for telecommunications
and/or any other purposes (provided that any such use shall not unreasonably
interfere with Tenant’s permitted use of the roof of the Building expressly set
forth in this Lease, including, without limitation ,Tenant’s rights under
Article 20 below), and to do any of the following (so long as the same do not
result in an Adverse Condition): (w) make any changes, additions, improvements,
repairs and/or replacements in or to the Project or any portion or elements
thereof, including, without limitation, (I) changes in the location, size, shape
and number of driveways, entrances, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways, public and private
streets, plazas, courtyards, transportation facilitation areas and common areas,
parking spaces, parking structures and parking areas, and (II) expanding or
decreasing the size of the Project and any common areas and other elements
thereof, including adding or deleting buildings thereon and therefrom (including
the 6201 Building); (x) close temporarily any of the common areas of the Project
while engaged in making repairs, improvements or alterations to the Project; (y)
continue to maintain and/or form a common area association or associations under
covenants, conditions and restrictions to own, manage, operate, maintain, repair
and/or replace all or any portion of the landscaping, driveways, walkways,
parking areas, public and private streets, plazas, courtyards, transportation
facilitation areas and/or other common areas of the Project located outside of
the Building, the 6201 Building and/or the Project and, subject to Article 4
below, include the common area assessments, fees and taxes charged by the
association(s) and the cost of maintaining, managing, administering and
operating the association(s), in Operating Expenses or Tax Expenses; and (z)
perform such other acts and make such other changes with respect to the Project
as Landlord may, in the exercise of good faith business judgment, deem to be
appropriate.

1.2 Condition of Premises. Except as expressly set forth in this Lease and in
the Original Premises Work Letter, Landlord shall not be obligated to provide or
pay for any improvement, remodeling or refurbishment work or services related to
the improvement, remodeling or refurbishment of the original Premises, and
Tenant shall accept the original Premises in its “AS IS” condition on the date
(the “Original Premises Delivery Date”) which is the earlier of (i) the date
Tenant commences business operations in the original Premises, and (ii) the date
upon which Landlord delivers possession of the original Premises to Tenant with
the Original Premises Improvements Substantially Complete (as such terms are
defined in the Original Premises Work Letter).

1.2.1 Working/Watertight Condition. Notwithstanding the foregoing to the
contrary, if (i) as of the Original Premises Delivery Date, (A) the Building’s
Systems and Equipment (as defined below) are not in good order, condition and
repair and/or contain latent and/or patent defects (the “Working Condition”),
and/or (B) the roof and/or curtain wall of the Building is not in a
substantially watertight condition, and (ii) Tenant becomes aware thereof and
delivers to Landlord written notice that such Systems and Equipment are not in
the Working Condition, and/or that the roof and/or curtain wall of the Building
is not in a substantially watertight condition (the “Non-Working/Watertight
Condition Notice”) by the date which is one (1) year after the Original Premises
Delivery Date (herein, the “Non-Working/Watertight Condition Outside Date”),
then Tenant’s sole remedy shall be that Landlord shall, at its sole cost and
expense (which shall not be included in Operating Expenses, as defined below),
do that which is necessary to put such Systems and Equipment into the Working
Condition (including, without limitation, replacement of the applicable
component(s) of such Systems and Equipment, if necessary), and/or cause the roof
and/or curtain wall of the Building to be in a substantially watertight
condition, as the case may be, within a reasonable period of time after
Landlord’s receipt of the Non-Working/Watertight Condition Notice, it being
agreed that any failure by Landlord to timely complete such applicable remedial
work shall be subject to the provisions of Section 7.3 below. If Tenant fails to
deliver the Non-Working/Watertight Condition Notice to Landlord on or prior to
the Non-Working/Watertight Condition Outside Date, Landlord shall have no
obligation to perform the work described above in this Section 1.2.1 (but such
release of such obligation shall not relieve Landlord of its other obligations
under this Lease, including in Section 7.2 below). During the period from the
Original Premises Delivery Date through and including the Non-Working/Watertight
Outside Date, Landlord shall provide Tenant with the right to access to the
Must-Take Space, upon no less than twenty-four (24) hours’ prior written notice
to Landlord and accompanied by a representative of Landlord, to perform such
inspections and testing as may be reasonably necessary to identify any items
that may be included in Tenant’s Non-Working/Watertight Condition Notice, but
which would not be identifiable without such access to the Must-Take Space.

1.2.2 Base Building Required Condition; Fifth Floor Required Condition.
Notwithstanding the foregoing to the contrary, if (i) as of the date of mutual
execution and delivery of this Lease, (A) any components of the base, shell and
core of the Building and/or the Building’s Systems and Equipment (collectively,
the “Base Building”) are not in substantial accordance with, or are otherwise
not in the condition described on, the warm shell description set forth on
Exhibit J attached hereto and/or the base building plans listed on Exhibit K
attached hereto (the “Base Building Required Condition”), and/or (B) the
existing improvements on the fifth (5th) floor of the Building are not in
substantial accordance with, or are otherwise not in the condition described on,
the fifth (5th) floor improvement speculative space plan attached hereto as
Exhibit L (the “Fifth Floor Required Condition”), and (ii) Tenant becomes aware
thereof and delivers to Landlord written notice (the “Non-Base Building/Fifth
Floor Required Condition Notice”) that the Base Building is not in the Base
Building Required Condition, and/or that the existing improvements on the fifth
(5th) floor of the Building are not in the Fifth Floor Required Condition by the
date which is one (1) year after the Original Premises Delivery Date (herein,
the “Non-Base Building/Fifth Floor Required Condition Outside Date”), then
Tenant’s sole remedy shall be that Landlord shall, at its sole cost and expense
(which shall not be included in Operating Expenses), do that which is necessary
to put the Base Building into the Base Building Required Condition and/or the
existing improvements on the fifth (5th) floor of the Building into the Fifth
Floor Required Condition, as the case may be, within a reasonable period of time
after Landlord’s receipt of the Non-Base Building/Fifth Floor Required Condition
Notice, it being agreed that (1) any failure by

 

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Landlord to timely complete such applicable remedial work shall be subject to
the provisions of Section 7.3 below, and (2) Landlord shall have no obligation
to complete such applicable remedial work if such applicable remedial work
pertains to any portions of the Base Building and/or the existing improvements
on the fifth (5th) floor of the Building which are (x) materially modified as
part of the initial Tenant Improvements constructed in the Premises and/or any
Alterations made to the Premises by or on behalf of Tenant, and/or
(y) materially affected by the initial Tenant Improvements constructed in the
Premises and/or any Alterations made to the Premises by or on behalf of Tenant,
with respect to clause (x) and (y) hereinabove, such that the applicable
remedial work would either damage or otherwise adversely affect the initial
Tenant Improvements and/or any Alterations made to the Premises by or on behalf
of Tenant, or cause such portions of the Base Building and/or the existing
improvements on the fifth (5th) floor of the Building to be incongruent with the
remainder of the Building following the completion of such initial Tenant
Improvements and/or Alterations. Notwithstanding the foregoing, if prior to
September 30, 2011, Tenant becomes aware that the Base Building is not in the
Base Building Required Condition and/or that the existing improvements on the
fifth (5th) floor of the Building are not in the Fifth Floor Required Condition,
then Tenant shall endeavor to send to Landlord, on or prior to September 30,
2011, a Non-Base Building/Fifth Floor Required Condition Notice specifying the
portion of the Base Building that is not in the Base Building Required Condition
and/or the portion of the existing improvements on the fifth (5th) floor of the
Building that is not in the Fifth Floor Required Condition, as the case may be.
If Tenant fails to deliver the Non-Base Building/Fifth Floor Required Condition
Notice to Landlord on or prior to the Non-Base Building/Fifth Floor Required
Condition Outside Date, Landlord shall have no obligation to perform the work
described above in this Section 1.2.2 (but such release of such obligation shall
not relieve Landlord of its other obligations under this Lease, including in
Section 7.2 below).

1.3 Rentable Square Feet. The parties hereby stipulate that (i) the original
Premises contain the rentable square feet set forth in Section 6.1 of the
Summary and (ii) the Must-Take Space contains the rentable square feet set forth
in Section 1.4.1 below, and such square footage amounts are not subject to
adjustment or remeasurement by Landlord or Tenant. Accordingly, there shall be
no adjustment in the Base Rent or other amounts set forth in this Lease which
are determined based upon the rentable square feet of the original Premises
and/or the Must-Take Space.

1.4 Must Take Space. Upon the Must-Take Space Commencement Date, the Premises
shall be expanded to include the Must-Take Space, upon the terms and conditions
set forth in this Section 1.4.

1.4.1 Description of Must-Take Space; Tenant’s Right to Designate Fourth Floor
as Must-Take Space. As used in this Lease, the “Must-Take Space” shall mean that
certain space containing approximately 35,681 rentable square feet comprising
the entire rentable area of the third (3rd) floor of the Building, and depicted
on Exhibit A-2 attached hereto (such space shall also sometimes be referred to
herein as the “Third Floor Space”). Notwithstanding the foregoing, Tenant shall
have the right, at its sole option, at any time prior to Landlord’s approval of
the Original Premises Final Working Drawings (as defined in and pursuant to the
Original Premises Work Letter), to elect to designate as the Must-Take Space
that certain space containing approximately 36,715 rentable square feet
comprising the entire rentable area of the fourth (4th) floor of the Building,
and depicted on Exhibit A-1 attached hereto (the “Fourth Floor Space”) in lieu
of, and in substitution for, the Third Floor Space, which election must be made,
if at all, by Tenant delivering to Landlord written notice thereof (the
“Must-Take Space Substitution Notice”) prior to Landlord’s approval of the
Original Premises Final Working Drawings. If Tenant timely and properly delivers
the Must-Take Space Substitution Notice to Landlord, then effective from and
after Landlord’s receipt of the Must-Take Space Substitution Notice, (i) the
Must-Take Space shall mean the Fourth Floor Space and all references in this
Lease to the “Must-Take Space” shall thereafter mean and refer to the Fourth
Floor Space, and (ii) the original Premises shall mean, collectively, the Third
Floor Space and the entire rentable area of the first (1st), second (2nd), fifth
(5th), and sixth (6th) floors of the Building and all references in this Lease
to the “original Premises” shall thereafter mean and refer to the Third Floor
Space and the entire rentable area of the first (1st), second (2nd), fifth
(5th), and sixth (6th) floors of the Building.

1.4.2 Must-Take Space Term. Subject to Tenant’s right to elect to accelerate the
Must-Take Space Commencement Date (as defined below) pursuant to the provisions
of Section 1.4.3 below, the Must-Take Space shall become part of the Premises
for all purposes under this Lease effective as of the earlier of (i) the date
upon which Tenant commences business operations in the Must-Take Space, and
(ii) the date which is first (1st) day of the nineteenth (19th) month after the
Lease Commencement Date (as such date may be extended for Must-Take Space Permit
Delays pursuant to Section 5.2 of the Must-Take Space Work Letter) (the
“Must-Take Space Commencement Date”). Tenant hereby expressly acknowledges and
agrees that if Landlord does not deliver possession of the Must-Take Space to
Tenant with the Must-Take Space Tenant Improvements Substantially Complete (as
such terms are defined in the Must-Take Space Work Letter) on or before the date
which is first (1st) day of the nineteenth (19th) month after the Lease
Commencement Date, Landlord shall not be subject to any liability nor shall the
validity of this Lease nor the obligations of Tenant under this Lease be
affected, and the Must-Take Space Commencement Date shall nonetheless occur on
such date (subject to extension for Must-Take Space Permit Delays). Except as
otherwise provided in this Section 1.4, Tenant’s lease of the Must-Take Space
shall be subject to every term and condition of this Lease. The lease term for
the Must-Take Space (the “Must-Take Space Term”) shall commence upon the
Must-Take Space Commencement Date and shall expire co-terminously with the Lease
Term for the Premises, as may be extended pursuant to the Extension Option Rider
attached hereto.

1.4.3 Tenant’s Right to Accelerate Must-Take Space Commencement Date.
Notwithstanding anything to the contrary contained in Section 1.4.2 above,
Tenant shall have the right, upon delivery of written notice (the “Must-Take
Space Acceleration Notice”) to Landlord during the period (the “Must-Take Space
Acceleration Notice Period”) commencing on the first (1st) day of the seventh
(7th) month of the initial Lease Term and ending on the last day of the eleventh
(11th) month of the initial Lease Term, to elect to cause Landlord to commence
construction of the Must-Take Space Improvements such that Substantial
Completion of the Must-Take Tenant Improvements (as defined in the Must-Take
Space Work Letter) will be anticipated to occur upon the date

 

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which is six (6) months after Landlord’s receipt of the Must-Take Space
Acceleration Notice (as such date may be extended for Must-Take Space Permit
Delays pursuant to Section 5.2 of the Must-Take Space Work Letter). If Tenant
delivers to Landlord the Must-Take Space Acceleration Notice during the
Must-Take Space Acceleration Notice Period pursuant to this Section 1.4.3, then
the Must-Take Space Commencement Date shall be the earlier of (i) the date upon
which Tenant commences business operations in the Must-Take Space, and (ii) the
date which is six (6) months after Landlord’s receipt of the Must-Take Space
Acceleration Notice. Tenant hereby expressly acknowledges and agrees that if
Tenant delivers the Must-Take Space Acceleration Notice to Landlord pursuant to
this Section 1.4.3, but Landlord does not deliver possession of the Must-Take
Space to Tenant with the Must-Take Space Tenant Improvements Substantially
Complete on or before the date which is six (6) months after Landlord’s receipt
of the Must-Take Space Acceleration Notice, Landlord shall not be subject to any
liability nor shall the validity of this Lease nor the obligations of Tenant
under this Lease be affected and the Must-Take Space Commencement Date shall
nonetheless occur on such date (subject to extension for Must-Take Space Permit
Delays).

1.4.4 Must-Take Space Commencement Date Amendment. Following the Must-Take Space
Commencement Date, Landlord shall deliver to Tenant an amendment to this Lease
adding the Must-Take Space to the Premises upon the terms and conditions set
forth in this Section 1.4 and confirming the Must-Take Space Commencement Date
and whether the Must-Take Space is comprised of the Third Floor Space or the
Fourth Floor Space, which amendment (if factually accurate) Tenant shall execute
and return to Landlord within ten (10) business days after Tenant’s receipt
thereof.

1.4.5 Base Rent. The Base Rent payable for the Must-Take Space during the
initial Must-Take Space Term shall be as set forth in Section 8.2 of the
Summary.

1.4.6 Tenant’s Share. Upon the Must-Take Space Commencement Date, Tenant’s Share
(as defined below and set forth in Section 9 of the Summary) shall be increased
to be 100% to take into account the addition of the Must-Take Space as provided
in Section 9 of the Summary.

1.4.7 Improvement of Must-Take Space. Except as expressly set forth in this
Lease and in the Must-Take Space Work Letter, upon the date (the “Must-Take
Space Delivery Date”) which is the earlier of (i) the date Tenant commences
business operations in the Must-Take Space, and (ii) the date upon which
Landlord delivers possession of the Must-Take Space to Tenant with the Must-Take
Space Improvements Substantially Complete, Tenant shall accept the Must-Take
Space in its then existing “AS IS” condition and Landlord shall have no
obligation to construct or pay for any improvements therein. Notwithstanding
Tenant’s occupancy of the original Premises during the performance of the
Must-Take Space Tenant Improvements, in connection therewith, Tenant hereby
acknowledges and agrees that: (A) Landlord shall be permitted to perform the
Must-Take Space Tenant Improvements during normal business hours, without any
obligation to pay overtime or other premiums; (B) Tenant hereby accepts such
inconveniences associated with the performance of the Must-Take Space Tenant
Improvements which may occur during Tenant’s occupancy to the extent reasonable
under the circumstances, including, without limitation, dust, noise, fumes, etc.
to the extent the same cannot be mitigated using commercially reasonable
efforts; (C) the performance of the Must-Take Space Tenant Improvements shall in
no way constitute a constructive eviction of Tenant nor entitle Tenant to any
abatement of Base Rent payable pursuant to this Lease; and (D) Tenant shall not
be entitled to any compensation or damages from Landlord for loss of the use of
the whole or any part of the Premises or of Tenant’s personal property or
improvements resulting from the performance of the Must-Take Space Tenant
Improvements, or for any inconvenience or annoyance occasioned thereby, except
to the extent caused by Landlord’s and/or any of the Landlord Parties’ (as
defined below) negligence or willful misconduct and not insured or required to
be insured under this Lease. Notwithstanding anything in the foregoing to the
contrary, in performing the Must-Take Space Tenant Improvements, Landlord shall
use commercially reasonable efforts to minimize any unreasonable interference
with Tenant’s use and occupancy of the original Premises.

1.4.8 Other Terms. Except as specifically set forth in this Lease, effective
from and after the Must-Take Commencement Date, all other terms of this Lease
shall apply to the Must-Take Space as though the Must-Take Space was originally
part of the Premises.

ARTICLE 2

LEASE TERM

The terms and provisions of this Lease shall be effective as of the date of this
Lease except for the provisions of this Lease relating to the payment of Rent.
The term of this Lease (the “Lease Term”) shall be as set forth in Section 7.1
of the Summary and shall commence on the date (the “Lease Commencement Date”)
set forth in Section 7.2 of the Summary (subject, however, to the terms of the
Original Premises Work Letter), and shall terminate on the date (the “Lease
Expiration Date”) set forth in Section 7.3 of the Summary, unless this Lease is
sooner terminated as hereinafter provided. For purposes of this Lease, the term
“Lease Year” shall mean each consecutive twelve (12) month period during the
Lease Term, provided that the last Lease Year shall end on the Lease Expiration
Date. Tenant hereby expressly acknowledges and agrees that if Landlord does not
deliver possession of the original Premises to Tenant with the Original Premises
Tenant Improvements Substantially Complete on or before May 1, 2012, Landlord
shall not be subject to any liability nor shall the validity of this Lease nor
the obligations of Tenant under this Lease be affected and the Lease
Commencement Date shall nonetheless occur on such date (subject to extension for
Original Premises Permit Delays). Following the Lease Commencement Date,
Landlord shall deliver to Tenant an amendment to lease in the form attached
hereto as Exhibit C, setting forth, among other things, the Lease Commencement
Date and the Lease Expiration Date and whether the original Premises includes
the Third Floor Space or the Fourth Floor Space, which amendment (if factually
accurate) Tenant shall execute and return to Landlord within ten (10) business
days after Tenant’s receipt thereof.

 

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ARTICLE 3

BASE RENT

Tenant shall pay, without notice or demand, to Landlord or Landlord’s agent at
the management office of the Project, or at such other place as Landlord may
from time to time designate in writing, in currency or a check for currency
which, at the time of payment, is legal tender for private or public debts in
the United States of America, base rent (“Base Rent”) as set forth in Section 8
of the Summary, payable in equal monthly installments as set forth in Section 8
of the Summary in advance on or before the first day of each and every month
during the Lease Term, without any setoff or deduction whatsoever. Concurrently
with Tenant’s execution of this Lease, Tenant shall deliver to Landlord an
amount equal to $617,301.82, which amount shall be comprised of the following:
(i) the first (1st) monthly installment Base Rent payable by Tenant for the
original Premises during the initial Lease Term (i.e., $450,938.00); (ii) the
first (1st) monthly installment Base Rent payable by Tenant for the Must-Take
Space during the initial Must-Take Space Term (i.e., $93,990.40); (iii) the
Estimated Expenses (as defined below) payable by Tenant for the original
Premises for the first (1st) month of the initial Lease Term (i.e., $59,890.32);
and (iv) the Estimated Expenses payable by Tenant for the Must-Take Space for
the first (1st) month of the initial Must-Take Space Term (i.e., $12,483.10). If
any rental payment date (including the Lease Commencement Date and the Must-Take
Space Commencement Date) falls on a day of the month other than the first day of
such month or if any rental payment is for a period which is shorter than one
month, then the rental for any such fractional month shall be a proportionate
amount of a full calendar month’s rental based on the proportion that the number
of days in such fractional month bears to the number of days in the calendar
month during which such fractional month occurs. All other payments or
adjustments required to be made under the terms of this Lease that require
proration on a time basis shall be prorated on the same basis. Notwithstanding
anything to the contrary contained herein and provided that Tenant faithfully
performs all of the terms and conditions of this Lease, Landlord hereby agrees
to (A) abate Tenant’s obligation to pay the monthly Base Rent otherwise payable
by Tenant for the original Premises (and if then leased by Tenant, the Must-Take
Space) for the first eighteen (18) months of the initial Lease Term commencing
as of the Lease Commencement Date (the “Abated Rent”), (B) apply the pre-paid
Base Rent described in clause (i) hereinabove to the Base Rent otherwise payable
for the original Premises during the nineteenth (19th) month of the initial
Lease Term, and (C) apply the pre-paid Base Rent described in clause
(ii) hereinabove to the Base Rent otherwise payable for the Must-Take Space
during the later of (1) the first (1st) month of the Must-Take Space Term and
(2) the nineteenth (19th) month of the initial Lease Term. During such abatement
period, Tenant shall remain responsible for the payment of all of its other
monetary obligations under this Lease, including without limitation, amounts
payable pursuant to Article 4 below. In the event of a default by Tenant under
the terms of this Lease that results in the early termination of this Lease
pursuant to the provisions of Article 19 below, then as a part of the recovery
set forth in Article 19 below, Landlord shall be entitled to recover the
unamortized balance of the Abated Rent. For purposes of the immediately
preceding sentence, the Abated Rent shall be amortized on a straight-line basis
over the scheduled ten (10)-year initial Lease Term, and the unamortized portion
thereof shall be determined based upon the unexpired portion of such initial
Lease Term as of the date of such early termination.

ARTICLE 4

ADDITIONAL RENT

4.1 Additional Rent. In addition to paying the Base Rent specified in Article 3
above, Tenant shall pay as additional rent the sum of the following:
(i) Tenant’s Share (as defined below) of the annual Operating Expenses allocated
to the Building; plus (ii) Tenant’s Share of the annual Tax Expenses allocated
to the Building; plus (iii) Tenant’s Share of the annual Utilities Costs
allocated to the Building. Such additional rent, together with any and all other
amounts payable by Tenant to Landlord pursuant to the terms of this Lease
(including, without limitation, pursuant to Article 6), shall be hereinafter
collectively referred to as the “Additional Rent”. The Base Rent and Additional
Rent are herein collectively referred to as the “Rent”. All amounts due under
this Article 4 as Additional Rent shall be payable for the same periods and in
the same manner, time and place as the Base Rent. Without limitation on other
obligations of Tenant which shall survive the expiration of the Lease Term, the
obligations of Tenant to pay the Additional Rent provided for in this Article 4
shall survive the expiration of the Lease Term.

4.2 Definitions. As used in this Article 4, the following terms shall have the
meanings hereinafter set forth:

4.2.1 “Calendar Year” shall mean each calendar year in which any portion of the
Lease Term falls, through and including the calendar year in which the Lease
Term expires.

4.2.2 “Expense Year” shall mean each Calendar Year, provided that Landlord, upon
notice to Tenant, may change the Expense Year from time to time to any other
twelve (12) consecutive-month period, and, in the event of any such change,
Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs shall be
equitably adjusted for any Expense Year involved in any such change.

4.2.3 “Operating Expenses” shall mean all expenses, costs and amounts of every
kind and nature which Landlord shall pay during any Expense Year because of or
in connection with the ownership, management, maintenance, repair, restoration
or operation of the Project, including, without limitation, any amounts paid
for: (i) the cost of operating, maintaining, repairing, renovating and managing
the utility systems, mechanical systems, sanitary and storm drainage systems,
any elevator systems and all other Systems and Equipment, and the

 

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cost of supplies and equipment and maintenance and service contracts in
connection therewith (provided, however, Operating Expenses shall not include
any such costs pertaining to the Systems and Equipment located in the Building
and the Other Buildings to the extent Tenant or another tenant or occupant of
the Project is responsible for directly providing or paying for the cost of such
operation, maintenance, repair, renovation and management of such Systems and
Equipment); (ii) the cost of licenses, certificates, permits and inspections,
and the cost of contesting the validity or applicability of any governmental
enactments which may increase Operating Expenses, and the costs incurred in
connection with implementation and operation (by Landlord or any common area
association(s) formed for the Project) of any government mandated transportation
system management program or similar program; (iii) the cost of insurance
carried by Landlord, in such amounts as Landlord may reasonably determine or as
may be required by any mortgagees or the lessor of any underlying or ground
lease affecting the Project; provided, however, to the extent Landlord elects to
provide insurance for unusual or expensive coverages or endorsements such as
earthquake and flood and the same is in addition to any insurance required to be
maintained by Landlord under this Lease, and such insurance is materially in
excess of the types or amounts of insurance carried by landlords of the
Comparable Buildings for such unusual or expensive coverages or endorsements,
the incremental cost of such materially excess insurance shall not be included
in Operating Expenses; (iv) the cost of landscaping, relamping, supplies, tools,
equipment and materials, and all fees, charges and other costs (including
consulting fees, legal fees and accounting fees) incurred in connection with the
management, operation, repair and maintenance of the Project; provided, however,
during the initial Lease Term, the annual property management fee for each
Expense Year (the “Management Fee”) shall not exceed an amount equal to two and
one-half percent (2.5%) of the annual Base Rent payable by Tenant under this
Lease for such Expense Year (which Base Rent shall be calculated (A) without
regard to the Abated Rent or any other abatement of Base Rent under this Lease,
and (B) during the period from the Lease Commencement Date until the day before
the Must-Take Space Commencement Date, as though Tenant is obligated to pay Base
Rent for the Must-Take Space equal to the same rates of Base Rent per rentable
square foot as applicable to the original Premises during such period); (v) the
cost of parking area repair, restoration, and maintenance; (vi) any equipment
rental agreements; (vii) wages, salaries and other compensation and benefits of
all persons engaged in the operation, management, maintenance or security of the
Project, and employer’s Social Security taxes, unemployment taxes or insurance,
and any other taxes which may be levied on such wages, salaries, compensation
and benefits; (viii) payments under any easement, license, operating agreement,
declaration or covenants, conditions and restrictions (whether now or hereafter
recorded and affecting the Project, but subject to the restrictions on
covenants, conditions and restrictions set forth in Section 1.1.3 above), common
area association (whether now or hereafter formed for the Project) documents, or
other instruments pertaining to the sharing of costs of or by the Project, but
only to the extent that such cost sharing is non-discriminatory and commercially
reasonable and the costs thereunder are not otherwise expressly excluded from
Operating Expenses elsewhere under this Lease; (ix) the cost of janitorial
service, alarm and security service, if any, window cleaning, trash removal,
replacement of fixtures in common or public areas or facilities of the Project,
maintenance and replacement of curbs and walkways, repair to roofs and
re-roofing (provided, however, Operating Expenses shall not include the cost of
janitorial services and trash removal services provided to the Premises or the
premises of other tenants of the Project or the cost of replacing light bulbs,
lamps, starters and ballasts for lighting fixtures in the Premises and the
premises of other tenants of the Project since such services with respect to the
Premises are directly provided and paid for by Tenant pursuant to Section 6.1
below); (x) amortization (including interest on the unamortized cost at the
Interest Rate) of the cost of acquiring or the rental expense of personal
property used in the maintenance, operation and repair of the Project; and
(xi) the cost of any capital improvements and related costs (1) made or incurred
primarily to reduce current or future Operating Expenses, or otherwise improve
the operating efficiency or security of the Project, as reasonably determined by
Landlord (any such capital improvement intended to reduce current or future
Operating Expenses shall be supported by reasonable evidence of the cost savings
or containment anticipated to be achieved thereby over the then-remaining Lease
Term, which evidence may include (y) a statement by the utility or equipment
supplier of the savings anticipated to be achieved, or (z) a third-party report
showing the cost savings or containment that the capital improvement was
designed or intended to achieve, and to the extent that the annual amortized
cost of any such capital improvement, repair or asset during the then-remaining
Lease Term exceeds the annual cost savings or containment anticipated to be
achieved thereby during the then-remaining Lease Term, such excess shall not be
included in Operating Expenses), (2) required to comply with any and all
applicable laws, statutes, codes, ordinances, orders, rules, regulations,
conditions of approval and requirements of all federal, state, county, municipal
and governmental authorities and all administrative or judicial orders or
decrees and all permits, licenses, approvals and other entitlements issued by
governmental entities, and rules of common law, relating to or affecting the
Project or the Premises or the use or operation thereof, including, without
limitation, the Americans with Disabilities Act of 1990, 42 USC 12111 et seq.
(the “ADA”), as the same may be amended from time to time, and all Environmental
Laws (as hereinafter defined), and any covenants, conditions and restrictions,
or any corporation, committee or association formed in connection therewith, or
any supplement thereto recorded in any official or public records with respect
to the Project or any portion thereof (all of the foregoing, including ADA and
Environmental Laws being referred to herein collectively as the “Requirements”),
but only to the extent any such capital improvements were not required to be
performed under the Requirements prior to the date of mutual execution and
delivery of this Lease, (3) that relate to the safety or security of the
Project, its tenants, occupants and visitors, and are deemed advisable in the
reasonable judgment of Landlord, or (4) which pertain to the replacement of any
items in the Project which Landlord is required to maintain under this Lease and
which relate to the functional character of the Project as a first class office
and R&D project (but only to the extent such replacement is performed with
like-kind materials and specifications) and is not otherwise included in items
(1), (2) or (3) hereinabove, but only to the extent that the replacement of such
item(s) is reasonably necessary as a result of such item(s) no longer being
capable of adequately providing the services and/or functions required of such
item(s), and/or the cost to replace such item(s) is anticipated, in Landlord’s
reasonable opinion, to be less than the ongoing cost to repair and maintain the
such item(s) in its then-current condition; provided, however, that if any such
cost described in (1), (2), (3) or (4) above, is a capital expenditure, such
cost shall be amortized (including interest on the unamortized cost at the
Interest Rate) over its useful life as Landlord shall reasonably determine in
accordance with standard real estate accounting practices, consistently applied,
it being agreed that only the portion of such amortized capital expenditure that
is allocable to an Expense Year shall be included in Operating Expenses for such
Expense Year; provided further, however, that in no event shall the amortized
cost of any such capital expenditures

 

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which Landlord may include in Operating Expenses pursuant to clauses (3) and/or
(4) hereinabove (a) be attributable to the initial construction of the Building
or the Other Buildings, or (b) exceed, in the aggregate, $100,000.00 in any
particular Expense Year during the Lease Term. If Landlord is not furnishing any
particular work or service (the cost of which, if performed by Landlord, would
be included in Operating Expenses) to a tenant who has undertaken to perform
such work or service in lieu of the performance thereof by Landlord, Operating
Expenses shall be deemed to be increased by an amount equal to the additional
Operating Expenses which would reasonably have been incurred during such period
by Landlord if it had at its own expense furnished such work or service to such
tenant. If any of (I) the Building, and (II) the Other Buildings (but only
during the period of time after such Other Buildings have been fully constructed
and ready for occupancy and are included by Landlord within the Project) are
less than ninety-five percent (95%) occupied during all or a portion of any
Expense Year, Landlord shall make an appropriate adjustment to the variable
components of Operating Expenses for such year or applicable portion thereof,
employing sound accounting and management principles, to determine the amount of
Operating Expenses that would have been paid had the Building and such Other
Buildings been ninety-five percent (95%) occupied; and the amount so determined
shall be deemed to have been the amount of Operating Expenses for such year, or
applicable portion thereof.

Notwithstanding the foregoing, Operating Expenses shall not, however, include:
(A) costs of leasing commissions, attorneys’ fees and other costs and expenses
incurred in connection with negotiations or disputes with present or prospective
tenants or other occupants of the Project; (B) costs (including permit, license
and inspection costs) incurred in renovating or otherwise improving, decorating
or redecorating rentable space for other tenants or vacant rentable space;
(C) costs incurred due to the violation by Landlord of the terms and conditions
of any lease of space in the Project; (D) costs of overhead or profit increment
paid to Landlord or to subsidiaries or affiliates of Landlord for services in or
in connection with the Project to the extent the same exceeds the costs of
overhead and profit increment included in the costs of such services which could
be obtained from third parties on a competitive basis; (E) except as otherwise
specifically provided in this Section 4.2.3, costs of interest on debt or
amortization on any mortgages or any other payments on any loans, mortgages,
debts, notes or deeds of trust recorded with respect to the Project, and rent
payable under any ground lease of the Project; (F) Utilities Costs; (G) Tax
Expenses; (H) expenses in connection with services or other benefits which are
not offered to Tenant or for which Tenant is charged directly but which are
provided to other tenants of the Project at no cost (or are separately
reimbursed by such other tenants, but if any such services or benefits are
separately reimbursed by such other tenants at a discount, then the incremental
difference between the actual cost of such services or benefits and the amount
reimbursed by such tenants shall be excluded from Operating Expenses); (I) costs
incurred in connection with the original construction and development of the
Building, the Other Buildings and/or the Project; (J) except as permitted in
Sections 4.2.3(x) and (xi) above and clause (L) hereinbelow, costs of additions,
alterations, repairs or improvements, equipment replacement and all other items
which under standard real estate accounting practices consistently applied are
properly classified as capital expenditures; (K) costs of any items to the
extent Landlord receives reimbursement from insurance or condemnation proceeds,
or from a contractor, manufacturer, supplier or any other third party pursuant
to any warranty or otherwise or would have been reimbursed if Landlord had
carried the insurance Landlord is required to carry pursuant to this Lease
(other than reimbursement by tenants pursuant to the Operating Expenses
pass-through provisions of their leases); (L) depreciation and amortization,
except on materials, tools, supplies and vendor-type equipment purchased by
Landlord to enable Landlord to supply services Landlord might otherwise contract
for with a third party, and when depreciation or amortization is permitted or
required, the item shall be amortized over its useful life as Landlord shall
reasonably determine in accordance with standard real estate accounting
practices, consistently applied, together with interest on the unamortized costs
at the Interest Rate; (M) brokerage commissions, space planning costs, finders’
fees, attorneys’ fees and other costs incurred by Landlord in connection with
leasing or attempting to lease space within the Project; (N) reserves of any
kind, including replacement reserves for bad debt loss or lost rent; (O) costs
associated with the operation of the business entity constituting Landlord as
the same are distinguished from the costs of operation of the Project, including
business entity accounting and legal matters, costs of defending any lawsuits
with or claims by any mortgagee (except as the actions of Tenant may be in
issue); (P) costs of selling, syndicating, financing, mortgaging or
hypothecating any of Landlord’s interest in the Building or the Project;
(Q) costs of any disputes between Landlord and its employees (if any), disputes
of Landlord with Project management, or outside fees paid in connection with
disputes with other tenants (except to the extent the expenditure of such
outside fees generally benefits all tenants of the Project); (R) the wages and
benefits of any employee of Landlord who does not devote substantially all of
his or her employed time to the Project unless such wages and benefits are
prorated to reflect time spent on operating and managing the Project vis-à-vis
time spent on matters unrelated to operating and managing the Project;
(S) interest, penalties, late charges, liquidated damages or other costs arising
out of Landlord’s failure to make timely payment of any of its obligations under
this Lease, (T) costs arising from Landlord’s charitable or political
contributions; (U) costs of acquisition of sculptures, painting and other
objects of art; (V) tax penalties incurred as a result of Landlord’s negligence,
inability or unwillingness to make payments to the appropriate authorities when
due; (W) Landlord’s general corporate overhead and administrative expenses,
except for the Management Fee; (X) property management fees in excess of the
Management Fee; (Y) costs arising from the negligence or willful misconduct of
Landlord and/or any of the Landlord Parties; (Z) costs of inspection and/or
monitoring (except as expressly provided hereinbelow), cleanup, removal and/or
remediation of any Hazardous Materials (as defined below) in, on or under the
Building and/or Project that is either (1) voluntarily undertaken by Landlord
(and not required by Environmental Laws), or (2) required to comply with any
Environmental Laws (as defined below) which are (x) incurred as a result of the
introduction by Landlord and/or any of the Landlord Parties after the date of
mutual execution and delivery of this Lease of any such Hazardous Materials in,
on or under the Building and/or Project in violation of Environmental Laws in
effect at the time of such introduction, (y) incurred in connection with the
clean-up, removal and/or remediation of those certain Hazardous Materials
(collectively, the “Identified Hazardous Materials”) in, on or under the Project
expressly identified in the Environmental Documents (as defined below)
regardless of whether such Identified Hazardous Materials are in violation of
Environmental Laws in effect as of the mutual execution and delivery of this
Lease, it being agreed, however, that Landlord shall be permitted to include in
Operating Expenses the costs incurred by Landlord in connection with the
inspection and/or monitoring (as opposed to the cleanup, removal and/or
remediation) of the Identified Hazardous Materials, or (z) incurred as a

 

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result of the presence of any Hazardous Materials which are other than the
Identified Hazardous Materials in, on, or under the Building and/or Project as
of the Lease Commencement Date, to the extent such Hazardous Materials which are
other than the Identified Hazardous Materials are in violation of Environmental
Laws in effect as of the Lease Commencement Date; (AA) premiums for the
Pollution Legal Liability Policy (the “Declaration Environmental Insurance
Policy”) carried by Landlord pursuant to that certain Declaration and Agreement
of Covenants and Restrictions of America Center recorded in the Official Records
of Santa Clara County on December 22, 2008 as Document Number 20074383; (BB)
costs of correcting defects in, or significant design error relating to, the
initial design or construction of the Building or any other improvements to the
Project; (CC) costs incurred by Landlord in connection putting the Systems and
Equipment into the Working Condition and/or causing the roof and/or curtain wall
of the Building to be in a substantially watertight condition, as the case may
be, pursuant to Section 1.2 above; (DD) costs related to the initial achievement
by Landlord of the certification of the Building and Project as a LEED Gold core
and shell project; and (EE) any costs expressly excluded from Operating Expenses
elsewhere in this Lease.

4.2.4 “Systems and Equipment” shall mean any plant, machinery, transformers,
duct work, cable, wires, and other equipment, facilities, and systems designed
to supply heat, ventilation, air conditioning and humidity or any other services
or utilities, or comprising or serving as any component or portion of the
electrical, gas, steam, plumbing, sprinkler, communications, alarm, security, or
fire/life safety systems or equipment, or any other mechanical, electrical,
electronic, computer or other systems or equipment which serve the Project, in
whole or in part (including, without limitation, the Building and/or any other
building in the Project, in whole or in part).

4.2.5 “Tax Expenses” shall mean all federal, state, county, or local
governmental or municipal taxes, fees, assessments, charges or other impositions
of every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit assessments, fees and taxes, child care subsidies, fees
and/or assessments, job training subsidies, fees and/or assessments, open space
fees and/or assessments, housing subsidies and/or housing fund fees or
assessments, public art fees and/or assessments, leasehold taxes or taxes based
upon the receipt of rent, including gross receipts or sales taxes applicable to
the receipt of rent, personal property taxes imposed upon the fixtures,
machinery, equipment, apparatus, systems and equipment, appurtenances, furniture
and other personal property used in connection with the Project), which Landlord
shall pay during any Expense Year because of or in connection with the
ownership, leasing and operation of the Project or Landlord’s interest therein.
For purposes of this Lease, during the period from the Lease Commencement Date
until the day before the Must-Take Space Commencement Date, notwithstanding that
Tenant’s Share for the original Premises is 82.75%, Tenant shall be responsible
for one hundred percent (100%) of the Tax Expenses attributable to the Original
Premises Tenant Improvements and any other improvements in the original
Premises.

4.2.5.1 Tax Expenses shall include, without limitation:

(i) Any tax on Landlord’s rent, right to rent or other income from the Project
or as against Landlord’s business of leasing any of the Project;

(ii) Any assessment, tax, fee, levy or charge in addition to, or in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election (“Proposition 13”)
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants. It is the intention of
Tenant and Landlord that all such new and increased assessments, taxes, fees,
levies, and charges and all similar assessments, taxes, fees, levies and charges
be included within the definition of Tax Expenses for purposes of this Lease
(but excluding any bonds or special assessments to finance the initial
construction of improvements to the Project exclusively, as opposed to public
improvements that include the Project and other properties that are not required
or performed as a condition to approval of the Project); and

(iii) Any assessment, tax, fee, levy, or charge allocable to or measured by the
area of the Premises or the rent payable hereunder, including, without
limitation, any gross income tax upon or with respect to the possession,
leasing, operating, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises, or any portion thereof.

4.2.5.2 Notwithstanding anything to the contrary contained in this
Section 4.2.5, there shall be excluded from Tax Expenses (i) all excess profits
taxes, documentary transfer taxes, franchise taxes, gift taxes, capital stock
taxes, inheritance and succession taxes, estate taxes, federal and state net
income taxes, and other taxes to the extent applicable to Landlord’s net income
(as opposed to rents, receipts or income attributable to operations at the
Project), (ii) any items included as Operating Expenses, (iii) any items paid by
Tenant under Section 4.4 below, and (iv) taxes and assessments imposed on land
and improvements other than the Project.

4.2.5.3 Landlord shall make such reasonable efforts as Landlord shall in its
reasonable discretion deem reasonably necessary to minimize the amount of Tax
Expenses, including challenging (following reasonable written request therefor
by Tenant or otherwise) the amount of Tax Expenses with the applicable
governmental authority if Landlord reasonably determines a reduction in Tax
Expenses is likely to result therefrom. Any reasonable expenses incurred by
Landlord in attempting to protest, reduce or minimize Tax Expenses shall be
included in Tax Expenses in the Expense Year such expenses are paid, but not in
excess of the reduction in Tax Expenses achieved as a result thereof. In
addition, if Tenant desires to contest the validity of any real property taxes
or any other taxes or assessments assessed against the Building or the tax
parcel upon which the Building is situated, then, subject to Landlord’s prior
approval (which approval shall not be withheld so long as Landlord reasonably

 

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determines that such proposed tax contest will not have an adverse impact upon
Landlord or the Project), Tenant may do so on Landlord’s behalf, at Tenant’s
sole cost and expense, provided that (i) Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all Claims (as defined below) arising
or resulting from such tax contest, (ii) such tax contest shall not subject
Landlord or the Project to any taxes, fines, interest, penalties or any other
costs whatsoever, and (iii) Landlord shall have the right, at its option, to
participate in such tax contest. Landlord agrees to cooperate, at no cost to
Landlord, in a reasonable manner with Tenant in such tax contest, including the
execution of any documents of authorization reasonably necessary therefor.

4.2.5.4 All assessments for Tax Expenses which are not specifically charged to
Tenant because of what Tenant has done, which can be paid by Landlord in
installments without the imposition of fees, penalties or interest, shall be
paid by Landlord in the maximum number of installments that are permitted by
applicable laws without the imposition of fees, penalties or interest and not
included Tax Expenses except in the Expense Year in which the assessment
installment is actually paid; provided, however, that if the prevailing practice
in the Comparable Buildings is to pay such assessments on an earlier basis, and
Landlord pays on such earlier basis, such assessments shall be included in Tax
Expenses as paid by Landlord.

4.2.6 “Tenant’s Share” shall mean the percentage set forth in Section 9 of the
Summary. Tenant’s Share was calculated by dividing the number of rentable square
feet of the Premises by the total rentable square feet in the Building (as set
forth in Section 9 of the Summary), and stating such amount as a percentage.

4.2.7 “Utilities Costs” shall mean all actual charges for utilities for the
Project which Landlord shall pay during any Expense Year, including, but not
limited to, the costs of water, sewer and electricity, and the costs of HVAC and
other utilities, as well as related fees, assessments and surcharges; provided,
however, Utilities Costs shall not include the cost of utilities provided to the
Premises (including the Must-Take Space) or the premises of other tenants of the
Project since Tenant is responsible for directly paying for all such utilities
charges pursuant to Article 6 below. Utilities Costs shall include any costs of
utilities which are allocated to the Project under any declaration, restrictive
covenant, or other instrument pertaining to the sharing of costs by the Project
or any portion thereof, including any covenants, conditions or restrictions now
or hereafter recorded against or affecting the Project.

4.3 Calculation and Payment of Additional Rent.

4.3.1 Payment of Operating Expenses, Tax Expenses and Utilities Costs. For each
Expense Year ending or commencing within the Lease Term, Tenant shall pay to
Landlord, as Additional Rent, the following, which payment shall be made in the
manner set forth in Section 4.3.2 below: (i) Tenant’s Share of Operating
Expenses allocated to the Building pursuant to Section 4.3.4 below; plus
(ii) Tenant’s Share of Tax Expenses allocated to the Building pursuant to
Section 4.3.4 below; plus (iii) Tenant’s Share of Utilities Costs allocated to
the Building pursuant to Section 4.3.4 below.

4.3.2 Statement of Actual Operating Expenses, Tax Expenses and Utilities Costs
and Payment by Tenant. Landlord shall give to Tenant on or before the fifteenth
(15th) day of April following the end of each Expense Year, a statement (the
“Statement”) which shall state the Operating Expenses, Tax Expenses and
Utilities Costs incurred or accrued for such preceding Expense Year that are
allocated to the Building pursuant to Section 4.3.4 below, and which shall
indicate therein Tenant’s Share thereof. Within thirty (30) days after Tenant’s
receipt of the Statement for each Expense Year ending during the Lease Term,
Tenant shall pay to Landlord the full amount of Tenant’s Share of Operating
Expenses, Tax Expenses and Utilities Costs for such Expense Year, less the
amounts, if any, paid during such Expense Year as the Estimated Expenses as
defined in and pursuant to Section 4.3.3 below. If any Statement reflects that
Tenant has overpaid Tenant’s Share of Operating Expenses and/or Tenant’s Share
of Tax Expenses and/or Tenant’s Share of Utilities Costs for such Expense Year,
then Landlord shall, at Landlord’s option, either (i) remit such overpayment to
Tenant within thirty (30) days after such applicable Statement is delivered to
Tenant, or (ii) credit such overpayment toward the additional Rent next due and
payable to Tenant under this Lease. The failure of Landlord to timely furnish
the Statement for any Expense Year shall not constitute a default by Landlord or
prejudice Landlord from enforcing its rights under this Article 4; provided,
however, Landlord’s failure to provide Tenant with a Statement for a particular
Expense Year within eighteen (18) months after the end of the Expense Year in
question shall constitute a waiver of Landlord’s right to collect any additional
Operating Expenses, Tax Expenses and/or Utilities Costs which would otherwise
have been payable for such Expense Year pursuant to such Statement.
Notwithstanding the foregoing, such limitation on Landlord’s ability to collect
any such additional Operating Expenses, Tax Expenses and Utilities Costs as a
result of any late delivery of such Statement shall not preclude Landlord from
modifying any Statement once such Statement is timely delivered, as provided
hereinabove, to reflect any additional expenses levied by any governmental
authority or by any public utility companies (including, without limitation, as
a result of any new or supplemental tax bills issued by the applicable taxing
authority). Even though the Lease Term has expired and Tenant has vacated the
Premises, if the Statement for the Expense Year in which this Lease terminates
reflects that Tenant has overpaid and/or underpaid Tenant’s Share of the
Operating Expenses and/or Tenant’s Share of Tax Expenses and/or Tenant’s Share
of Utilities Costs for such Expense Year, then within thirty (30) days after
Landlord’s delivery of such Statement to Tenant, Landlord shall refund to Tenant
any such overpayment, or Tenant shall pay to Landlord any such underpayment, as
the case may be. The provisions of this Section 4.3.2 shall survive the
expiration or earlier termination of the Lease Term.

4.3.3 Statement of Estimated Operating Expenses, Tax Expenses and Utilities
Costs. Landlord shall give Tenant a yearly expense estimate statement (the
“Estimate Statement”) which shall set forth Landlord’s reasonable estimate (the
“Estimate”) of the total amount of Tenant’s Share of the Operating Expenses, Tax
Expenses and Utilities Costs allocated to the Building pursuant to Section 4.3.4
below for the then-current Expense Year shall be (the “Estimated Expenses”). The
failure of Landlord to timely furnish the Estimate Statement for any

 

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Expense Year shall not constitute a default by Landlord or preclude Landlord
from enforcing its rights to collect any Estimated Expenses under this Article
4. Following Landlord’s delivery of the Estimate Statement for the then-current
Expense Year, Tenant shall pay, with its next installment of Base Rent due, a
fraction of the Estimated Expenses for the then-current Expense Year (reduced by
any amounts paid pursuant to the last sentence of this Section 4.3.3). Such
fraction shall have as its numerator the number of months which have elapsed in
such current Expense Year to the month of such payment, both months inclusive,
and shall have twelve (12) as its denominator. Until a new Estimate Statement is
furnished, Tenant shall pay monthly, with the monthly Base Rent installments, an
amount equal to one-twelfth (1/12) of the total Estimated Expenses set forth in
the previous Estimate Statement delivered by Landlord to Tenant.

4.3.4 Allocation of Operating Expenses, Tax Expenses and Utilities Costs to
Building. The parties acknowledge that the Building is part of a multi-office
building project consisting of the Building, the 6201 Building and any such
Other Buildings as Landlord may elect to construct and include as part of the
Project from time to time, and that certain of the costs and expenses incurred
in connection with the Project (i.e., the Operating Expenses, Tax Expenses and
Utilities Costs) shall be shared among the Building and/or such Other Buildings,
while certain other costs and expenses which are solely attributable to the
Building and such Other Buildings, as applicable, shall be allocated directly to
the Building and the Other Buildings, respectively. Accordingly, as set forth in
Sections 4.1 and 4.2 above, Operating Expenses, Tax Expenses and Utilities Costs
are determined annually for the Project as a whole, and a portion of the
Operating Expenses, Tax Expenses and Utilities Costs, which portion shall be
determined by Landlord in good faith and on a reasonable, non-discriminatory and
equitable basis, shall be allocated to the Building (as opposed to the tenants
of the Other Buildings), and such portion so allocated shall be the amount of
Operating Expenses, Tax Expenses and Utilities Costs payable with respect to the
Building upon which Tenant’s Share shall be calculated. Such portion of the
Operating Expenses, Tax Expenses and Utilities Costs allocated to the Building
shall include all Operating Expenses, Tax Expenses and Utilities Costs which are
attributable solely to the Building, and an equitable portion (based on the
proportionate use (if disproportionate) of specific utilities and/or services,
or the ratio of rentable area in the Building over the aggregate rentable area
of the Building and the Other Buildings) of the Operating Expenses, Tax Expenses
and Utilities Costs attributable to the Project as a whole. As an example of
such allocation with respect to Tax Expenses, it is anticipated that Landlord
may receive separate tax bills which separately assess the improvements
component of Tax Expenses for each building in the Project, and such separately
assessed Tax Expenses shall be calculated for and allocated separately to each
such applicable building. In addition, if Landlord elects, at its sole option,
to subdivide certain common area portions of the Project such as landscaping,
public and private streets, driveways, walkways, courtyards, plazas,
transportation facilitation areas, accessways and/or parking areas into a
separate parcel or parcels of land (and/or separately convey all or any of such
parcels to a common area association to own, operate and/or maintain same), the
Operating Expenses, Tax Expenses and Utilities Costs for such common area
parcels of land may be aggregated and then reasonably allocated, in good faith
and in a reasonable and non-discriminatory manner, by Landlord to the Building
and such Other Buildings on an equitable basis as Landlord (and/or any
applicable covenants, conditions and restrictions for any such common area
association) shall provide from time to time.

4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant
shall reimburse Landlord upon demand for all taxes and assessments required to
be paid by Landlord (except to the extent included in Tax Expenses by Landlord),
excluding state, local and federal personal or corporate income taxes measured
by the net income of Landlord from all sources and estate and inheritance taxes,
whether or not now customary or within the contemplation of the parties hereto,
when:

4.4.1 said taxes are measured by or reasonably attributable to the cost or value
of Tenant’s equipment, furniture, fixtures and other personal property located
in the Premises, or by the cost or value of any leasehold improvements made in
or to the Premises by or for Tenant, to the extent the cost or value of such
leasehold improvements exceeds the cost or value of a building standard
build-out as determined by Landlord regardless of whether title to such
improvements shall be vested in Tenant or Landlord;

4.4.2 said taxes are assessed upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises or any portion of the Project (including the Parking
Areas); or

4.4.3 said taxes are assessed upon this transaction or any document to which
Tenant is a party creating or transferring an interest or an estate in the
Premises (excluding documentary transfer taxes).

4.5 Late Charges. If any installment of Rent or any other sum due from Tenant
shall not be received by Landlord or Landlord’s designee by the due date
therefor, then Tenant shall pay to Landlord a late charge equal to ten percent
(10%) of the amount due plus any attorneys’ fees incurred by Landlord by reason
of Tenant’s failure to pay Rent and/or other charges when due hereunder. The
late charge shall be deemed Additional Rent and the right to require it shall be
in addition to all of Landlord’s other rights and remedies hereunder, at law
and/or in equity and shall not be construed as liquidated damages or as limiting
Landlord’s remedies in any manner. In addition to the late charge described
above, any Rent or other amounts owing hereunder which are not paid by the date
that they are due shall thereafter bear interest until paid at a rate (the
“Interest Rate”) equal to the lesser of (i) the “Prime Rate” or “Reference Rate”
announced from time to time by the Bank of America (or such reasonable
comparable national banking institution as selected by Landlord in the event
Bank of America ceases to exist or publish a Prime Rate or Reference Rate), plus
four percent (4%), or (ii) the highest rate permitted by applicable law.

4.6 Audit Rights. If Tenant disputes the amount of the Operating Expenses and
Tax Expenses set forth in the Statement for the particular Expense Year
delivered by Landlord to Tenant pursuant to Section 4.3.2 above, Tenant shall
have the right, at Tenant’s cost, upon thirty (30) days’ prior written notice to
Landlord, to have Tenant’s authorized employees inspect, at Landlord’s offices
during normal business hours, Landlord’s books,

 

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records and supporting documents concerning the Operating Expenses, Tax Expenses
and Utilities Costs set forth in such Statement; provided, however, Tenant shall
have no right to conduct such inspection, have an audit performed by the
Accountant (as defined and described hereinbelow), or object to or otherwise
dispute the amount of the Operating Expenses, Tax Expenses Utilities Costs set
forth in any such Statement unless Tenant notifies Landlord of such objection
and dispute, completes such inspection, and has the Accountant commence and
complete such audit within the one (1) year immediately following Landlord’s
delivery of the particular Statement in question (the “Review Period”);
provided, further, that notwithstanding any such timely objection, dispute,
inspection, and/or audit, and as a condition precedent to Tenant’s exercise of
its right of objection, dispute, inspection and/or audit as set forth in this
Section 4.6, Tenant shall not be permitted to withhold payment of, and Tenant
shall timely pay to Landlord, the full amounts as required by the provisions of
this Article 4 in accordance with such Statement. However, such payment may be
made under protest pending the outcome of any audit which may be performed by
the Accountant as described below. In connection with any such inspection by
Tenant, Landlord and Tenant shall reasonably cooperate with each other so that
such inspection can be performed pursuant to a mutually acceptable schedule, in
an expeditious manner and without undue interference with Landlord’s operation
and management of the Project. If after such inspection and/or request for
documentation, Tenant still disputes the amount of the Operating Expenses, Tax
Expenses and Utilities Costs set forth in the Statement, Tenant shall have the
right, within the Review Period, to cause a nationally and/or regionally
recognized independent certified public accountant (which is not paid on a
commission or contingency basis) designated by Tenant and approved by Landlord,
which approval shall not be unreasonably withheld or delayed (the “Accountant”)
to complete an audit of Landlord’s books and records to determine the proper
amount of the Operating Expenses, Tax Expenses and Utilities Costs incurred and
amounts payable by Tenant for the Expense Year which is the subject of such
Statement. Such audit by the Accountant shall be final and binding upon Landlord
and Tenant. If (i) Landlord reasonably disapproves of the Accountant or
Accountants designated by Tenant, and (ii) Landlord and Tenant cannot mutually
agree as to the identity of the Accountant within sixty (60) days after Tenant
notifies Landlord that Tenant desires an audit to be performed, then the
Accountant shall be one of the “Big 4” accounting firms. If such audit reveals
that Landlord has over-charged Tenant, then within thirty (30) days after the
results of such audit are made available to Landlord, Landlord shall reimburse
to Tenant the amount of such over-charge, together with interest on the amount
of the over-charge at the Interest Rate. If the audit reveals that the Tenant
was under-charged, then within thirty (30) days after the results of such audit
are made available to Tenant, Tenant shall reimburse to Landlord the amount of
such under-charge. Tenant agrees to pay the cost of such audit unless it is
subsequently determined that Landlord’s original Statement which was the subject
of such audit overstated Operating Expenses, Tax Expenses and Utilities Costs by
five percent (5%) or more of the actual Operating Expenses, Tax Expenses and
Utilities Costs verified by such audit, in which case Landlord shall reimburse
Tenant for the reasonable cost of such audit (but not in excess of the greater
of (A) two (2) times the amount of the Operating Expenses, Tax Expenses and
Utilities Costs so overstated, and (B) $10,000.00). The payment by Tenant of any
amounts pursuant to this Article 4 shall not preclude Tenant from questioning,
during the Review Period, the correctness of the particular Statement in
question provided by Landlord, but the failure of Tenant to object thereto,
conduct and complete its inspection and have the Accountant conduct the audit as
described above prior to the expiration of the Review Period for such Statement
shall be conclusively deemed Tenant’s approval of the Statement in question and
the amount of Operating Expenses, Tax Expenses and Utilities Costs shown
thereon. In connection with any inspection and/or audit conducted by Tenant
pursuant to this Section 4.6, Tenant agrees to keep, and to cause all of
Tenant’s employees and consultants and the Accountant to keep, all of Landlord’s
books and records and the audit, and all information pertaining thereto and the
results thereof, strictly confidential, and in connection therewith, Tenant
shall execute and shall cause such consultants and the Accountant to execute
such commercially reasonable confidentiality agreements as Landlord may require
prior to conducting any such inspections and/or audits. For purposes of the
foregoing, a confidentiality agreement shall not be deemed to be commercially
reasonable if such confidentiality agreement limits Tenant’s ability to enforce
its rights against Landlord if the Operating Expenses, Tax Expenses and
Utilities Costs are deemed to have been overstated.

ARTICLE 5

USE OF PREMISES

5.1 Use. Tenant shall use the Premises solely for general office and research
and development purposes consistent with the character of the Project as a
first-class office and R&D project, and Tenant shall not use or permit the
Premises to be used for any other purpose or purposes whatsoever. Tenant shall
not use, or suffer or permit any person or persons to use, the Premises or any
part thereof for any use or purpose contrary to (i) the provisions of Exhibit D,
attached hereto, or (ii) in violation of the laws of the United States of
America, the state in which the Project is located, or the ordinances,
regulations or requirements of the local municipal or county governing body or
other lawful authorities having jurisdiction over the Project. Tenant shall
comply with all Rules and Regulations and all recorded covenants, conditions,
and restrictions, and the provisions of all ground leases, now or hereafter
affecting the Project. Except for the use of general office supplies within the
Premises which are of a kind typically used in normal office areas in the
ordinary course of business, for use in the manner for which they were designed
and only in accordance with all applicable laws and the highest standards
prevailing in the industry for such use, and then only in such amounts as may be
normal for general office use, Tenant shall not use or allow another person or
entity to use any part of the Premises for the storage, use, treatment,
manufacture or sale of Hazardous Material. As used herein, the term “Hazardous
Material” means any hazardous or toxic substance, material or waste which is or
becomes regulated by any local governmental authority, the state in which the
Project is located or the United States Government.

5.2 Hazardous Materials Disclosure. Pursuant to the provisions of California
Health & Safety Code Section 25359.7, Landlord hereby discloses to Tenant that
the Project contains Hazardous Materials, as such Hazardous Materials are
described in the documentation (collectively, the “Environmental Documents”)
referenced on Exhibit E attached to this Lease. Tenant hereby acknowledges that
Landlord has provided to Tenant instructions to the FTP website allowing Tenant
access to the Environmental Documents.

 

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5.3 Landlord’s Representations, Covenants and Indemnity Regarding Hazardous
Materials. Tenant acknowledges that Landlord has made no representation or
warranty regarding the condition of the Premises or Project, except as
specifically set forth in this Lease. Notwithstanding the foregoing, Landlord
hereby represents and warrants to Tenant that to Landlord’s actual knowledge,
without the duty of investigation or inquiry, as of the date of mutual execution
and delivery of this Lease, except as described in the Environmental Reports,
there are no Hazardous Materials in, on or under the Project in violation of
applicable Environmental Laws which have not been remediated to the extent
required by applicable Environmental Laws. During the Lease Term, Landlord shall
give written notice to Tenant as soon as reasonably practicable of (i) any
written communication received from any governmental authority concerning any
Hazardous Materials which relates to the Premises or the Project, and (ii) any
contamination of the Premises or the Project by Hazardous Materials not
disclosed in the Environmental Documents, which constitutes a violation of any
Environmental Laws of which Landlord has actual knowledge. Landlord shall, at
its expense (which may be included in Operating Expenses, but only to the extent
permitted in Article 4 above), (A) observe and comply with all applicable
Environmental Laws in connection with Landlord’s activities in or on the Project
(including, without limitation, any monitoring, inspection and/or remediation of
any Hazardous Materials in, on, or under the Building and/or Project as of the
mutual execution and delivery of this Lease to the extent the same is required
by applicable Environmental Laws [regardless of whether such applicable
Environmental Laws are in effect as of the Lease Commencement Date]), and in
connection therewith, Landlord, shall not cause any Hazardous Materials to be
brought upon, kept or used in connection with the Project by Landlord, its
agents, employees or contractors in a manner or for a purpose prohibited by any
Environmental Laws in existence as of the date such Hazardous Materials are
brought upon, kept or used, and (B) cause Tenant to be named as an additional
insured under the Declaration Environmental Insurance Policy. In addition,
Landlord shall indemnify, defend, reimburse, and hold Tenant harmless from and
against the cost of remediation of any Hazardous Materials to the extent
(1) existing in or under the land on which the Project is situated as of the
date of mutual execution and delivery of this Lease in violation of applicable
Environmental Laws at such time, and/or (2) resulting from Landlord’s breach of
its representations and/or covenants in this Section 5.3, and/or (3) resulting
from Landlord or Landlord’s agents, employees or contractors bringing upon,
keeping or using any Hazardous Materials in connection with the Project in any
manner or for any purpose prohibited by any Environmental Laws in existence as
of the date such Hazardous Materials are brought upon, kept or used by Landlord
or Landlord’s agents, employees or contractors.

ARTICLE 6

SERVICES AND UTILITIES

6.1 Tenant’s Responsibility. From and after the Original Premises Delivery Date,
except as otherwise provided hereinbelow, Tenant shall be solely responsible, at
its sole cost and expense, for the furnishing of all services and utilities to
the Premises, including, but not limited to HVAC, electricity, water, telephone,
telecommunications (subject to Section 8.4 below), janitorial, cleaning, pest
control, trash removal, security services, and replacement of all light bulbs,
lamps, starters and ballasts for lighting fixtures within the Premises (as well
as maintenance and repairs of the Premises in accordance with the provisions of
Section 7.1 below); provided, however, that during the period from the Original
Premises Delivery Date until the day before the Must-Take Space Commencement
Date, (i) Tenant shall not be required to perform any services (including
janitorial, cleaning, pest control, trash removal, security services, and
replacement of all light bulbs, lamps, starters and ballasts for lighting
fixtures) for the Must-Take Space, and (ii) for each invoice from the utility
companies for utilities provided to the Building during such period that Tenant
delivers to Landlord within fifteen (15) days after Tenant’s receipt thereof,
Landlord shall reimburse Tenant for those costs, if any, of the utilities set
forth in such invoice that Landlord determines, in its sole and absolute
discretion, is attributable to utilities provided directly to the Must-Take
Space, which reimbursement shall be made within thirty (30) days after
Landlord’s receipt of such invoice from Tenant. During the period from the
Original Premises Delivery Date until the date Landlord commences construction
of the Must-Take Space Tenant Improvements (as defined in and pursuant to the
Must-Take Space Work Letter), Landlord shall not consume any HVAC, electricity,
water or other utilities in the Must-Take Space; provided, however, that
Landlord shall be permitted to consume HVAC, electricity, water or other
utilities in the Must-Take Space to the extent required (A) in the event of an
emergency, and/or (B) in connection with the maintenance of the interior of the
Must-Take Space (including, without limitation, the implementation of periodic
air circulation measures in the Must-Take Space). Tenant hereby agrees that
(1) Landlord shall have absolutely no obligation to provide any such or other
services or utilities to the Premises, it being agreed that this Lease is in the
nature of a “net” lease (although Landlord shall maintain and keep in service
the existing utility connections located outside the Building and connected to
the exterior of the Building as necessary for distribution of such utilities to
the Premises by Tenant), (2) Tenant shall contract directly with the applicable
utility providers to provide all such utilities to the Premises, which utilities
shall be separately metered, at Tenant’s cost (provided that Tenant shall not be
required to pay to separately meter the Must-Take Space from the original
Premises), (3) Tenant shall contract directly with the applicable service
providers to provide all such services to the Premises (subject, however to the
provisions of clause (i) hereinabove), and (4) Tenant shall pay for the cost of
all utilities consumed at the Premises and for all services provided to the
Premises directly to the applicable provider thereof (subject to reimbursement
from Landlord pursuant to clause (ii) hereinabove). All such services and
utilities for the Premises shall be provided in such a manner so as to maintain
the Premises and Building in clean and first-class condition consistent with the
first-class nature of the Project.

6.2 Overstandard Tenant Use. If Tenant shall use, or desire to use, electricity,
water, heating and air conditioning or any other utilities for the Premises in
quantities that exceed the capacity of the equipment supplying the same to the
Building then, subject to applicable law, and subject to Landlord’s approval,
which shall not be unreasonably withheld, conditioned or delayed, Tenant shall,
at Tenant’s sole cost and expense, install such supplemental equipment as may be
reasonably required to provide such excess capacity. In addition, promptly
following the expiration or earlier termination of this Lease, Landlord shall
retain, at Landlord’s cost, (i) a third party consultant with substantial
experience in the inspection, maintenance and repair of base building systems
and

 

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equipment serving comparable office buildings located in the San Jose, San
Francisco and/or Oakland area, and (ii) a representative of each of the
manufacturers of the components of the base building HVAC systems and equipment
serving the Building and the elevator systems and equipment serving the Building
(collectively, the “HVAC/Elevator Systems and Equipment”), to jointly inspect
the HVAC/Elevator Systems and Equipment to determine, as more particularly
described hereinbelow, the remaining useful life of each component of such
HVAC/Elevator Systems and Equipment as of the expiration or earlier termination
of this Lease. The third party consultant and manufacturer's representatives
described in clauses (i) and (ii) hereinabove are collectively referred to
herein as “Landlord’s Third Party Consultants”. Following such inspection,
Landlord shall cause Landlord’s Third Party Consultants to deliver to Landlord
and Tenant a written report (the “Remaining Useful Life Report”) setting forth
the following (collectively, the “Required Remaining Useful Life Report
Content”): (A) such determination of the remaining useful life of each component
of such HVAC/Elevator Systems and Equipment as of the expiration or earlier
termination of this Lease, which remaining useful life determination shall be
made, with respect to the base building HVAC systems and equipment serving the
Building, only, based upon an assumption of sixty (60) hours of operation per
week following the expiration or earlier termination of this Lease; and (B) if
any components of the HVAC/Elevator Systems and Equipment have a remaining
useful life as of the expiration or earlier termination of this Lease which is
less than the useful life which should have been remaining based upon the
stipulated expected useful life, as of the Lease Commencement Date, of such
applicable components of the HVAC/Elevator Systems and Equipment as set forth on
Exhibit M attached hereto, then the Remaining Useful Life Report shall also
state whether or not any repairs (as opposed to replacements)(herein, “Useful
Life Extension Repairs”) are commercially reasonably available which (1) would
extend the useful life of such applicable components of the HVAC/Elevator
Systems and Equipment to be equal to or greater than the useful life which
should have been remaining based upon the stipulated expected useful life, as of
the Lease Commencement Date, of such applicable components of the HVAC/Elevator
Systems and Equipment as set forth on Exhibit M attached hereto, and (2) are
reasonably anticipated to cost less than the anticipated cost to replace the
applicable component of the HVAC/Elevator Systems and Equipment with a
first-class, high quality component with similar specifications to the
applicable component then typically being installed in the Comparable Buildings
as of the expiration or earlier termination of this Lease. If the Remaining
Useful Life Report states that Useful Life Extension Repairs are commercially
reasonably available with respect to any components of the HVAC/Elevator Systems
and Equipment, then the Remaining Useful Life Report Content shall also include
the anticipated number of years by which the remaining useful life of the
applicable component of the HVAC/Elevator Systems and Equipment would be
extended as a result of the performance of such Useful Life Extension Repairs.
If the Remaining Useful Life Report prepared by Landlord’s Third Party
Consultants indicates that any components of the HVAC/Elevator Systems and
Equipment have a remaining useful life as of the expiration or earlier
termination of this Lease which is less than the useful life which should have
been remaining based upon the stipulated expected useful life, as of the Lease
Commencement Date, of such applicable components of the HVAC/Elevator Systems
and Equipment as set forth on Exhibit M attached hereto, then within thirty
(30) days after Landlord’s receipt of the Remaining Useful Life Report prepared
by Landlord’s Third Party Consultants, Landlord shall deliver to Tenant a copy
of such Remaining Useful Life Report and shall prepare and deliver to Tenant a
detailed invoice (the “Tenant Cost Share Invoice”) setting forth the amount of
the Tenant Cost Share (as defined below) with respect to each such component of
the HVAC/Elevator Systems and Equipment. Within thirty (30) days after Tenant’s
receipt of such copy of the Remaining Useful Life Report prepared by Landlord’s
third party consultant and such Tenant Cost Share Invoice (the “Tenant Cost
Share Outside Date”), Tenant shall pay to Landlord an amount equal to the Tenant
Cost Share with respect to each such component of the HVAC/Elevator Systems and
Equipment as set forth on the Tenant Cost Share Invoice. Notwithstanding the
foregoing to the contrary, if Tenant, acting in good faith, objects in a written
notice delivered to Landlord at least fifteen (15) days prior to the Tenant Cost
Share Outside Date to the amount of the Tenant Cost Share set forth in the
Tenant Cost Share Invoice: (1) then Tenant shall have the right, prior to the
Tenant Cost Share Outside Date, to retain, at Tenant’s cost, a third party
consultant with substantial experience in the inspection, maintenance and repair
of base building systems and equipment serving comparable office buildings
located in the San Jose, San Francisco and/or Oakland area to inspect the
HVAC/Elevator Systems and Equipment to determine the remaining useful life of
each component of such HVAC/Elevator Systems and Equipment as of the expiration
or earlier termination of this Lease and to prepare its own Remaining Useful
Life Report with respect thereto containing the Required Remaining Useful Life
Report Content; and (2) if such Remaining Useful Life Report prepared by
Tenant’s third party consultant is completed (and a copy thereof delivered by
Tenant to Landlord) prior to the Tenant Cost Share Outside Date and indicates
that the Tenant Cost Share should be less than the amount set forth in the
Tenant Cost Share Invoice, then Tenant’s obligation to pay to Landlord the
amount (herein the “Disputed Tenant Cost Share Amount”) by which the Tenant Cost
Share set forth in Tenant Cost Share Invoice delivered by Landlord to Tenant
exceeds the Tenant Cost Share set forth in Remaining Useful Life Report prepared
by Tenant’s third party consultant and delivered to Landlord as provided
hereinabove shall be suspended, and instead Landlord and Tenant shall either
meet in person or communicate by telephone within two (2) business days
thereafter to confer and attempt to determine the portion of the Disputed Tenant
Cost Share Amount, if any, that Tenant is required to pay to Landlord (it being
agreed, however, that Tenant shall, in any event, pay to Landlord the portion of
the Tenant Cost Share which is other than the Disputed Tenant Cost Share Amount
on or prior to the Tenant Cost Share Outside Date). If Landlord and Tenant
resolve such matter, then (x) Landlord and Tenant shall promptly thereafter
confirm such resolution in writing, and (y) if such resolution stipulates that
Landlord is entitled to payment of any portion of the Disputed Tenant Cost Share
Amount, then Tenant shall so pay to Landlord the stipulated amount within thirty
(30) days after the date upon which Landlord and Tenant resolve such matter. If
Landlord and Tenant do not resolve such matter as to the amount, if any, of the
Disputed Tenant Cost Share Amount, that Tenant is required to pay to Landlord,
within a reasonable period of time after such meeting (but in any event within
thirty (30) days after such meeting), then either Landlord or Tenant may submit
such matter to arbitration pursuant to the provisions of Section 6.2.3 below.

6.2.1 Definition of Tenant Cost Share. As used herein, the “Tenant Cost Share”
shall mean the following:

 

  (a) With respect to each component of the HVAC/Elevator Systems and Equipment
for which no Useful Life Extension Repairs are commercially reasonably
available, an amount equal to the product of (i) the Replacement Cost (as
defined below), multiplied by (ii) a fraction, (A) the numerator of which is the
Stipulated Useful Life (as defined below), less the Expired Lease Years (as
defined below), less the Remaining Useful Life (as defined below), and (B) the
denominator of which is the Stipulated Useful Life; i.e.:

 

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Replacement Cost x [(Stipulated Useful Life – Expired Lease Years – Remaining
Useful Life) ÷ Stipulated Useful Life]

 

  (b) With respect to each component of the HVAC/Elevator Systems and Equipment
for which Useful Life Extension Repairs are commercially reasonably available an
amount equal to the product of (i) the Repair Cost (as defined below),
multiplied by (ii) a fraction, (A) the numerator of which is the Stipulated
Useful Life, less the Expired Lease Years, less the Remaining Useful Life, and
(B) the denominator of which is Extended Useful Life (as defined below); i.e.:

Repair Cost x [(Stipulated Useful Life – Expired Lease Years – Remaining Useful
Life) ÷ Extended Useful Life]

 

  (c) For purposes of this Section 6.2.1 and Section 6.2.2 below, the following
terms shall be defined as follows:

“Replacement Cost” shall mean the anticipated cost to replace the applicable
component of the HVAC/Elevator Systems and Equipment (as reasonably determined
by Landlord and set forth in the Tenant Cost Share Invoice) with a first-class,
high quality component with similar specifications to the applicable component
then typically being installed in the Comparable Buildings as of the expiration
or earlier termination of this Lease.

“Repair Cost” shall mean the anticipated cost to perform such Useful Life
Extension Repairs with respect to the applicable component of the HVAC/Elevator
Systems and Equipment (as reasonably determined by Landlord and set forth in the
Tenant Cost Share Invoice.

“Stipulated Useful Life” shall mean the stipulated expected useful life, as of
the Lease Commencement Date, of the applicable component of the HVAC/Elevator
Systems and Equipment set forth on Exhibit M attached hereto.

“Expired Lease Years” shall mean the actual number of years of the Lease Term
which has theretore expired as of the expiration or earlier termination of this
Lease.

“Remaining Useful Life” shall mean the number of years of the remaining useful
life of the applicable component of the HVAC/Elevator Systems and Equipment as
set forth in the Remaining Useful Life Report as of the expiration or earlier
termination of this Lease

“Extended Useful Life” shall mean the anticipated number of years by which the
Remaining Useful Life of the applicable component of the HVAC/Elevator Systems
and Equipment would be extended as a result of the performance of such Useful
Life Extension Repairs (as reasonably determined by Landlord and set forth in
the Tenant Cost Share Invoice).

6.2.2 Examples. The following are examples with respect to the Greenheck
BSQ-80-4X components of the HVAC systems and equipment serving the Building
located on the second (2nd) through sixth (6th) floors of the Building as
identified on Exhibit M attached hereto (such Greenheck BSQ-80-4X components
being referred to hereinbelow as “Floor 2 Greenheck Component”, “Floor 3
Greenheck Component”, “Floor 4 Greenheck Component”, “Floor 5 Greenheck
Component” and “Floor 6 Greenheck Component”).

6.2.2.1 If with respect to “Floor 2 Greenheck Component”, (i) no Useful Life
Extension Repairs are commercially reasonably available and the Replacement Cost
to replace “Floor 2 Greenheck Component” is $100,000.00, (ii) Exhibit M states
that the Stipulated Useful Life of “Floor 2 Greenheck Component” is twenty
(20) years, (iii) upon the expiration of this Lease, the Expired Lease Years are
ten (10) years, and (iv) the Remaining Useful Life Report states that the
Remaining Useful Life of “Floor 2 Greenheck Component” is two (2) years, then
for “Floor 2 Greenheck Component”, Tenant shall pay to Landlord $40,000.00
calculated as follows: $100,000.00 x (8/20) (i.e., [20 years of Stipulated
Useful Life – 10 Expired Lease Years – 2 years Remaining Useful Life)]/20 years
of Stipulated Useful Life.

6.2.2.2 If with respect to “Floor 3 Greenheck Component”, (i) no Useful Life
Extension Repairs are commercially reasonably available and the Replacement Cost
to replace “Floor 3 Greenheck Component” is $100,000.00, (ii) Exhibit M states
that the Stipulated Useful Life of “Floor 3 Greenheck Component” is twenty
(20) years, (iii) upon the expiration of this Lease, the Expired Lease Years are
ten (10) years, and (iv) the Remaining Useful Life Report states that the
Remaining Useful Life of “Floor 3 Greenheck Component” is five (5) years, then
for “Floor 3 Greenheck Component”, Tenant shall pay to Landlord $25,000.00
calculated as follows: $100,000.00 x (5/20) (i.e., [20 years of Stipulated
Useful Life – 10 Expired Lease Years – 5 years of Remaining Useful Life)]/20
years of Stipulated Useful Life).

 

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6.2.2.3 If with respect to “Floor 4 Greenheck Component”, (i) no Useful Life
Extension Repairs are commercially reasonably available and the Replacement Cost
to replace “Floor 4 Greenheck Component” is $100,000.00, (ii) Exhibit M states
that the Stipulated Useful Life of “Floor 4 Greenheck Component” is twenty
(20) years, (iii) upon the expiration of this Lease, the Expired Lease Years are
ten (10) years, and (iv) the Remaining Useful Life Report states that the
Remaining Useful Life of “Floor 4 Greenheck Component” is ten (10) years, then
for “Floor 4 Greenheck Component”, Tenant shall pay to Landlord $0 (i.e., the
Remaining Useful Life + Expired Lease Years = Stipulated Useful Life).

6.2.2.4 If with respect to “Floor 5 Greenheck Component”, (i) Useful Life
Extension Repairs are commercially reasonably available and (A) the Repair Cost
is $10,000.00, and (B) the Extended Useful Life is ten (10) years, (ii) Exhibit
M states that the Stipulated Useful Life is twenty (20) years, (iii) upon the
expiration of this Lease, the Expired Lease Years are ten (10) years, (iv) the
Remaining Useful Life Report states that the Remaining Useful Life is zero
(0) years, then for “Floor 5 Greenheck Component”, Tenant shall pay to Landlord
$10,000.00 calculated as follows: $10,000.00 x (10/10) (i.e., [20 years of
Stipulated Useful Life – 10 Expired Lease Years – 0 years Remaining Useful
Life)]/10 years Extended Useful Life).

6.2.2.5 If with respect to “Floor 6 Greenheck Component”, (i) Useful Life
Extension Repairs are commercially reasonably available and (A) the Repair Cost
$10,000.00, and (B) the Extended Useful Life is ten (10) years, (ii) Exhibit M
states that the Stipulated Useful Life is twenty (20) years, (iii) upon the
expiration of this Lease, the Expired Lease Years are ten (10) years, (iv) the
Remaining Useful Life Report states that the Remaining Useful Life is five
(5) years, then for “Floor 6 Greenheck Component”, Tenant shall pay to Landlord
$5,000.00 calculated as follows: $10,000.00 x (5/10) (i.e., [20 years of
Stipulated Useful Life – (10 Expired Lease Years – 5 years Remaining Useful
Life)]/10 years Extended Useful Life.

6.2.3 Arbitration Regarding Tenant Cost Share. If a party submits a matter to
arbitration in accordance with the provisions of Section 6.2 above, either party
may commence an expedited arbitration proceeding to resolve such matter pursuant
to the Streamlined Arbitration Rules and Procedure of the Judicial Arbitration
and Mediation Service (“JAMS”). The arbitration shall be conducted in San Jose,
California and decided by a single person (the “Section 6.2 Arbitrator”) who
(i) is a retired judge of any of the trial or appellate courts of the State of
California, (ii) has substantial experience in interpreting agreements involving
leasing of commercial real estate and practices in and is located in California,
and (iii) shall be selected in accordance with JAMS rules. As promptly as
practical after being appointed, the Section 6.2 Arbitrator so chosen shall
(A) consider the evidence submitted by the parties, and (B) upon notice to all
parties, determine the portion of the Disputed Tenant Cost Share Amount, if any,
Tenant is required to pay to Landlord, which issue shall be the sole issue to be
determined by the Section 6.2 Arbitrator. As part of such determination, the
Section 6.2 Arbitrator may consider whether or not any Useful Life Extension
Repairs are commercially reasonably available. The decisions of the Section 6.2
Arbitrator shall be final and binding upon the parties and a judgment thereon
may be entered in any court having jurisdiction, except that either party may
contest and obtain judicial review of the reasonableness of the Section 6.2
Arbitrator’s determination of the cost of the arbitration. The costs of any
arbitration pursuant to this Section 6.2.3 shall be funded fifty (50%) by each
party, and the parties shall bear their own costs and attorneys’ fees in
connection with such arbitration. As part of any award issued by the Section 6.2
Arbitrator, the prevailing party in the arbitration shall be entitled to recover
from the non-prevailing party such costs and reasonable attorneys’ fees as may
have been incurred by the prevailing party in connection with such arbitration.

6.3 Interruption of Use. Except as provided in Section 6.4 below and subject to
Landlord’s indemnity of Tenant in Section 10.1.2 below, Tenant agrees that
Landlord shall not be liable for damages, by abatement of Rent or otherwise, for
failure to furnish or delay in furnishing any utilities or services (including
telephone and telecommunication services), or for any diminution in the quality
or quantity thereof, when such failure or delay or diminution is occasioned, in
whole or in part, by repairs, replacements, or improvements, by any strike,
lockout or other labor trouble, by inability to secure electricity, gas, water,
or other fuel at the Building or Project after reasonable effort to do so, by
any accident or casualty whatsoever, by act or default of Tenant or other
parties, or by any other cause; and such failures or delays or diminution shall
never be deemed to constitute an eviction or disturbance of Tenant’s use and
possession of the Premises or relieve Tenant from paying Rent (except as
provided in Section 6.4 below) or performing any of its obligations under this
Lease. Furthermore, Landlord shall not be liable under any circumstances for a
loss of, or injury to, property or for injury to, or interference with, Tenant’s
business, including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish any services
or utilities to the Premises.

6.4 Special Abatement. If Tenant’s use of the Premises (or any portion thereof)
for the permitted use described in Section 5.1 above is materially adversely
interfered with as a result of, and Tenant in fact does not use the Premises or
any portion thereof, as a result of, (i) Landlord’s failure to maintain and keep
in service the existing utility connections located outside the Building and
connected to the exterior of the Building as necessary for distribution of such
utilities to the Premises by Tenant in accordance with Section 6.1 above,
(ii) any failure by Landlord to perform any repairs required to be performed by
Landlord pursuant to Section 7.2 below, within ten (10) business days after
Landlord has received notice from Tenant of the need for such repairs (or such
longer period of time as is reasonably required for such repair work if Landlord
commences such repair work within such 10-business day period and thereafter
diligently prosecutes same to completion, or such shorter period of time after
Landlord has received such notice as is reasonably required under the
circumstances in the case of emergency), or (iii) any Construction undertaken by
Landlord pursuant to Section 24.29 below (each, an “Abatement Event”), then
Tenant shall deliver written notice to Landlord of such Abatement Event. If such
Abatement Event continues for three (3) consecutive business days after
Landlord’s receipt of any such notice from Tenant (“Eligibility Period”),

 

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then Tenant’s obligation to pay Base Rent and Tenant’s Share of Operating
Expenses, Tax Expenses and Utilities Costs shall be abated or reduced, as the
case may be, from and after the first (1st) day following the Eligibility Period
and continuing during such time that such Abatement Event continues to so
materially and adversely interfere with Tenant’s use of (and Tenant does not
use) the Premises or any portion thereof, with such abatement to be in the
proportion that the rentable square feet of the portion of the Premises so
materially and adversely interfered with (and that Tenant does not use) bears to
the total rentable square feet of the Premises. To the extent Tenant shall be
entitled to abatement of Base Rent and Tenant’s Share of Operating Expenses, Tax
Expenses and Utilities Costs because of a damage or destruction pursuant to
Article 11 below or a taking pursuant to Article 12 below, then the Eligibility
Period shall not be applicable.

ARTICLE 7

REPAIRS

7.1 Tenant’s Repairs. Subject to Landlord’s repair obligations in Section 7.2
below, and except for any damage by casualty which is not Tenant’s obligation to
repair pursuant to Article 11 below, Tenant shall, at Tenant’s own expense, and
with contractors reasonably acceptable to Landlord and subject to Tenant’s
compliance with the following provisions of this Section 7.1 and the provisions
of Section 8.2 below, keep the Building and every part thereof, including,
without limitation, all tenant improvements, Alterations, additions, equipment,
restrooms, fixtures and furnishings therein (including all of the Building’s
Systems and Equipment located within the Building and the HVAC equipment on the
roof of the Building), all walls and wall coverings, doors, windows, glass,
plate glass, ceilings, and skylights, in first-class order, repair and condition
at all times from and after the Original Premises Delivery Date and continuing
throughout the Lease Term, it being acknowledged and agreed that notwithstanding
anything in the foregoing to the contrary, Tenant’s repair and maintenance
obligations described hereinabove with respect to the interior of the Must-Take
Space and the Building’s Systems and Equipment exclusively serving the Must-Take
Space shall not commence until the Must-Take Space Delivery Date (unless and to
the extent such maintenance and repairs are necessitated in part or in whole by
the act, neglect, fault of or omission of any duty by Tenant, its agents,
employees or invitees, in which event Tenant shall pay to Landlord as additional
rent, the reasonable cost of such maintenance and repairs); provided, however,
if and to the extent such maintenance and repairs are caused by the negligence
or willful misconduct of, or omission of any duty by, Landlord, its agents,
employees or contractors and the same is not covered by insurance maintained or
required to be maintained by Tenant under this Lease, Landlord shall pay to
Tenant the reasonable cost of such maintenance and repairs within thirty
(30) days after Landlord’s receipt of invoices and paid receipts therefor.
Tenant’s repair obligations under this Section 7.1 shall include, without
limitation, replacement of items as may be necessary to keep same in the
condition required hereinabove, notwithstanding that such replacements may be
considered capital expenditures in accordance with accounting practices, and
shall also include repairs of items above the ceiling, repairs of items below
the floors (but not the floor slabs), and/or repairs of items within walls, such
as, but not limited to, all plumbing and pipes for restrooms, the equipment
providing distribution within the Building of the HVAC from the HVAC equipment
on the roof, and the equipment providing distribution within the Building of all
electricity and all other utilities required for the Premises (including all
electrical panels in equipment rooms or elsewhere within the Building). Tenant
shall be required to obtain Landlord’s prior written approval (which approval
shall not be unreasonably withheld or conditioned, and shall be granted or
reasonably denied within ten (10) business days after Landlord’s receipt of
Tenant’s request for such approval, together with all other information
reasonably requested by Landlord pertaining thereto) with respect to repairs
and/or replacements which are likely to: (i) adversely affect the roof, the HVAC
equipment thereon and/or the elevators; (ii) adversely affect of any of the
structural components of the Building; (iii) materially and adversely affect of
any of the Building’s Systems and Equipment; (iv) affect the exterior of the
Building or any portion of the Project located outside of the Building, or can
be seen from outside the Building; and/or (v) affect the Must-Take Space prior
to the Must-Take Space Delivery Date (any of such items set forth in clauses
(i) through (v) hereinabove shall sometimes be referred to as the “Landlord
Approval Items”). Tenant’s repair obligations set forth hereinabove shall
include, without limitation, the obligation to promptly and adequately repair
all damage to the Building and replace or repair all damaged or broken fixtures
and appurtenances (subject, however, to the provisions of Article 11 below
regarding casualty damage to the Building). If (A) Landlord provides written
notice to Tenant of the need for repairs and/or maintenance which are Tenant’s
obligation to perform under this Lease, and (B) Tenant fails to undertake such
repairs and/or maintenance within thirty (30) days after receipt of such notice,
or such longer time as is reasonably necessary if more than thirty (30) days are
reasonably required to complete such repairs and Tenant commences such repairs
within such 30-day period and thereafter diligently attempts to complete same
(provided that in cases of emergency involving imminent threat of serious injury
or damage to persons or property at the Premises and/or Project, Tenant shall
have only one (1) business day after receipt of such notice, or such later
period of time as is reasonably necessary, to commence such corrective action),
then Landlord may proceed to undertake such repairs and/or maintenance upon
delivery of an additional three (3) business days’ notice to Tenant that
Landlord is taking such required action (but no such additional notice shall be
required in the event of any such emergency involving imminent threat of serious
injury or damage to persons or property at the Premises and/or Project). If such
repairs and/or maintenance were required under the terms of this Lease to be
performed by Tenant and are not performed by Tenant prior to the expiration of
such additional 3-business day notice period (or after the initial notice period
with respect to any such emergency involving imminent threat of serious injury
or damage to persons or property at the Premises and/or Project), then Landlord
shall be entitled to reimbursement by Tenant of Landlord’s actual, reasonable,
and documented out-of-pocket costs and expenses paid by Landlord to third
parties in performing such maintenance and/or repairs, such reimbursement to be
made within thirty (30) days after Tenant’s receipt of invoice from Landlord
setting forth such costs and expenses. Tenant shall, at its own cost and
expense, enter into regularly scheduled preventive maintenance/service contracts
with maintenance contractors approved by Landlord, in Landlord’s reasonable
discretion, for the maintenance and service of all of the items listed in this
Section 7.1 above which Tenant is obligated to maintain. Within five (5) days
after Tenant’s receipt of written request therefor, Tenant shall deliver to
Landlord full and complete copies of all such contracts entered into by Tenant.
Landlord hereby assigns to Tenant all warranties and guarantees, if any, in
existence with respect to the items which are Tenant’s obligation to repair

 

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and maintain under this Section 7.1, which assignment shall be on a
non-exclusive basis such that the warranties and guarantees may be enforced by
Tenant and/or Landlord. Landlord shall, at no cost to Landlord, reasonably
cooperate with Tenant in attempting to enforce any such warranties and/or
guaranties.

7.2 Landlord’s Repairs. Anything contained in Section 7.1 above to the contrary
notwithstanding, and subject to Articles 11 and 12 below, Landlord shall
maintain, as part of Operating Expenses, the common areas of the Project
(including those Systems and Equipment located outside the Building but serving
the Building, but excluding the HVAC equipment located on the roof of the
Building), the structural portions of the roof (including the roof membrane),
and the foundation and floor slabs of the Building and the load-bearing portions
of walls (excluding wall coverings, painting, glass and doors) of the Building;
provided, however, if and to the extent such maintenance and repairs are caused
by the negligence or willful misconduct of, or omission of any duty by, Tenant,
its agents, employees or contractors and the same is not covered by insurance
maintained or required to be maintained by Landlord under this Lease, Tenant
shall pay to Landlord as additional rent, the reasonable cost of such
maintenance and repairs. Except as otherwise provided in Section 6.4 above,
there shall be no abatement of rent by reason of any injury to or interference
with Tenant’s business arising from the making of any repairs, alterations or
improvements in or to any portion of the Project, Building or the Premises or in
or to fixtures, appurtenances and equipment therein. Tenant hereby waives and
releases its right to make repairs at Landlord’s expense under Sections 1941 and
1942 of the California Civil Code; or under any similar law, statute, or
ordinance now or hereafter in effect.

7.3 Tenant’s Self-Help Rights. Notwithstanding anything to the contrary set
forth in this Article 7, if (i) Tenant provides written notice to Landlord of
the need for repairs and/or maintenance which are Landlord’s obligation to
perform under this Lease (including, without limitation, any of Landlord’s
obligations under Sections 1.2.1 and 1.2.2 above), and (ii) Landlord fails to
undertake such repairs and/or maintenance within thirty (30) days after receipt
of such notice, or such longer time as is reasonably necessary if more than
thirty (30) days are reasonably required to complete such repairs and Landlord
commences such repairs within such 30-day period and thereafter diligently
attempts to complete same (provided that in cases of emergency involving
imminent threat of serious injury or damage to persons or property within the
Premises, Landlord shall have only one (1) business day after receipt of such
notice, or such later period of time as is reasonably necessary, to commence
such corrective action), then Tenant may proceed to undertake such repairs
and/or maintenance upon delivery of an additional three (3) business days’
notice to Landlord that Tenant is taking such required action (but no such
additional notice shall be required in the event of any such emergency involving
imminent threat of serious injury or damage to persons or property within the
Premises). If such repairs and/or maintenance were required under the terms of
this Lease to be performed by Landlord and are not performed by Landlord prior
to the expiration of such additional 3-business day notice period (or after the
initial notice period with respect to any such emergency involving imminent
threat of serious injury or damage to persons or property within the Premises)
(the “Outside Repair Period”), then Tenant shall be entitled to reimbursement by
Landlord of Tenant’s actual, reasonable, and documented out-of-pocket costs and
expenses paid by Tenant to third parties in performing such maintenance and/or
repairs. Such reimbursement shall be made within thirty (30) days after
Landlord’s receipt of invoice from Tenant setting forth such costs and expenses,
and if Landlord fails to so reimburse Tenant within such 30-day period, then
Tenant shall be entitled to offset against the Rent next payable by Tenant under
this Lease the amount of such invoice together with interest thereon, at the
Interest Rate, which shall have accrued on the amount of such invoice during the
period from and after the expiration of such 30-day period through and including
the earlier of the date Landlord delivers the payment to Tenant or the date
Tenant offsets such amount against the Rent; provided, however, that
notwithstanding the foregoing to the contrary, if Landlord delivers to Tenant
prior to the expiration of the Outside Repair Period, a written objection to
Tenant’s right to receive any such reimbursement based upon Landlord’s good
faith claim that such action did not have to be taken by Landlord pursuant to
the terms of this Lease, then Tenant shall not be entitled to such reimbursement
and Landlord and Tenant shall instead either meet in person or communicate by
telephone within two (2) business days thereafter to confer and attempt to
resolve the matter. If Landlord and Tenant resolve such matter, then
(A) Landlord and Tenant shall promptly thereafter confirm such resolution in
writing, and (B) if such resolution stipulates that Tenant is entitled to any
such reimbursement, then Landlord shall so reimburse Tenant for the stipulated
amount within thirty (30) days after the date upon which Landlord and Tenant
resolve such matter. If Landlord and Tenant do not resolve such matter within a
reasonable period of time after such meeting (but in any event within thirty
(30) days after such meeting), then Tenant shall not be entitled to such
reimbursement and either Landlord or Tenant may submit such matter to
arbitration pursuant to the provisions of Section 7.4 below. If Tenant receives
a monetary judgment against Landlord in such arbitration, then Landlord shall
pay to Tenant the amount of such monetary judgment to Tenant within thirty
(30) days after the date such judgment is issued. If such monetary judgment is
not so timely paid, then, notwithstanding any contrary provision of this Lease,
Tenant shall be entitled to offset against the Rent payable under this Lease the
amount of such monetary judgment together with interest which shall have accrued
on such monetary judgment during the period from and after the day after the
expiration of such 30-day period through and including the date that Tenant
offsets against the Rent the amount of such monetary judgment, at the Interest
Rate. If Tenant undertakes such repairs and/or maintenance, Tenant shall use
only those unrelated third party contractors used by Landlord in the Project for
such work except (1) in the case of an emergency, in which event Tenant may
utilize the services of any other licensed, bonded, qualified and reputable
contractor with expertise in the performance of the particular repair and/or
maintenance work in question, or (2) if such contractors are unwilling or unable
to perform such work at competitive prices, in which event Tenant may utilize
the services of any other qualified contractor which normally and regularly
performs similar work in the Comparable Buildings. Tenant shall comply with the
other terms and conditions of this Lease if Tenant takes the required action,
except that Tenant is not required to obtain Landlord’s consent for such
repairs.

7.4 Arbitration Regarding Tenant’s Self-Help Rights. If a party submits a matter
to arbitration in accordance with the provisions of Section 7.3 above, either
party may commence an expedited arbitration proceeding to resolve such matter
pursuant to JAMS. The arbitration shall be conducted in San Jose, California and
decided by a single person (the “Section 7.3 Arbitrator”) who (i) is a retired
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courts of the State of California, (ii) has substantial experience in
interpreting agreements involving leasing of commercial real estate and
practices in and is located in California, and (iii) shall be selected in
accordance with JAMS rules. As promptly as practical after being appointed, the
Section 7.3 Arbitrator so chosen shall (A) consider the evidence submitted by
the parties, and (B) upon notice to all parties, determine whether Tenant’s
self-help rights were validly exercised under Section 7.3 above and the amount
of reimbursement, if any, in connection therewith to which Tenant is entitled
under Section 7.3 above, which issues shall be the sole issues to be determined
by the Section 7.3 Arbitrator. The decisions of the Section 7.3 Arbitrator shall
be final and binding upon the parties and a judgment thereon may be entered in
any court having jurisdiction, except that either party may contest and obtain
judicial review of the reasonableness of the Section 7.3 Arbitrator’s
determination of the cost of the arbitration. The costs of any arbitration
pursuant to this Section 7.4 shall be funded fifty (50%) by each party, and the
parties shall bear their own costs and attorneys’ fees in connection with such
arbitration. As part of any award issued by the Section 7.3 Arbitrator, the
prevailing party in the arbitration shall be entitled to recover from the
non-prevailing party such costs and reasonable attorneys’ fees as may have been
incurred by the prevailing party in connection with such arbitration.

ARTICLE 8

ADDITIONS AND ALTERATIONS

8.1 Landlord’s Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes to the Premises (collectively, the
“Alterations”) without first procuring the prior written consent of Landlord to
such Alterations, which consent shall be requested by Tenant not less than
thirty (30) days prior to the commencement thereof, and which consent shall not
be unreasonably withheld by Landlord; provided, however, Landlord may withhold
its consent in its sole and absolute discretion with respect to any Alterations
which would constitute Landlord Approval Items. Tenant shall pay for all
overhead, general conditions, fees and other costs and expenses of the
Alterations, and with respect to Alterations (i) which require the issuance of a
building permit and which cost in excess of $100,000.00, Tenant shall pay to
Landlord a Landlord supervision fee of four percent (4%) of the costs of the
Alterations, and (ii) which require the issuance of a building permit but which
cost $100,000.00 or less, Tenant shall pay to Landlord a flat “plan review fee”
equal to $1,000.00. The construction of the initial improvements to the original
Premises and the Must-Take Space shall be governed by the terms of the Original
Premises Work Letter and the Must-Take Space Work Letter, respectively, and not
the terms of this Article 8.

8.2 Manner of Construction. Landlord may impose, as a condition of its consent
to all Alterations or repairs of the Premises, such commercially reasonable
requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirement that Tenant utilize for such
purposes only contractors, materials, mechanics and materialmen approved by
Landlord in Landlord’s reasonable discretion; provided, however, Landlord may
impose such requirements as Landlord may determine, in its sole and absolute
discretion, with respect to any work which would constitute Landlord Approval
Items (including designating specific contractors to perform such work which are
other than the regular maintenance contractors approved by Landlord in
accordance with Section 7.1 above). Tenant shall construct such Alterations and
perform such repairs in compliance with any and all applicable rules and
regulations of any federal, state, county or municipal code or ordinance and
pursuant to a valid building permit, issued by the city in which the Building is
located, and in conformance with Landlord’s reasonable construction rules and
regulations. Landlord’s approval of the plans, specifications and working
drawings for Tenant’s Alterations shall create no responsibility or liability on
the part of Landlord for their completeness, design sufficiency, or compliance
with all laws, rules and regulations of governmental agencies or authorities.
All work with respect to any Alterations must be done in a good and workmanlike
manner and diligently prosecuted to completion to the end that the Premises
shall at all times be a complete unit except during the period of work. Tenant
shall cause all Alterations to be performed in such manner as not to
unreasonably obstruct access by any person to the Building or Project or the
common areas, and as not to unreasonably obstruct the business of Landlord or
other tenants of the Project, or unreasonably interfere with the labor force
working at the Project. If Tenant makes any Alterations, Tenant agrees to carry
“Builder’s All Risk” insurance in an amount approved by Landlord covering the
construction of such Alterations, and such other insurance as Landlord may
require, it being understood and agreed that all of such Alterations shall be
insured by Tenant pursuant to Article 10 below immediately upon completion
thereof. Upon completion of any Alterations, Tenant shall (i) cause a Notice of
Completion to be recorded in the office of the Recorder of the county in which
the Project is located in accordance with Section 3093 of the Civil Code of the
State of California or any successor statute, (ii) deliver to the management
office of the Building a reproducible copy of the “as built” drawings of the
Alterations, and (iii) deliver to Landlord evidence of payment, contractors’
affidavits and full and final waivers of all liens for labor, services or
materials.

8.3 Landlord’s Property. All Alterations, improvements, fixtures and/or
equipment which may be installed or placed in or about the Premises by or on
behalf of Tenant, and all signs installed in, on or about the Premises, from
time to time, shall be at the sole cost of Tenant and shall be and become the
property of Landlord. Furthermore, Landlord may require that Tenant remove any
improvement or Alteration upon the expiration or early termination of the Lease
Term, and repair any damage to the Premises and Building caused by such removal;
provided, however: (i) Tenant may not remove any Original Premises Tenant
Improvements, Must-Take Space Tenant Improvements (the Original Premises Tenant
Improvements and the Must-Take Space Tenant Improvements being sometimes
referred to herein collectively as the “Tenant Improvements”) or Alterations
paid for by Landlord with Landlords own funds and/or out of any tenant
improvement allowances provided by Landlord (except any such removal made in
connection with those Alterations approved by Landlord or not required by the
terms of this Lease to be approved by Landlord); (ii) with respect to all other
initial Tenant Improvements or Alterations which Tenant elects to remove, Tenant
shall, at its expense, promptly repair any damage to the Premises caused by such
removal; and (iii) Landlord may, by written notice delivered to Tenant
concurrently with Landlord’s approval of the final working drawings for any
initial Tenant Improvements or Alterations, identify those Alterations or
initial Tenant

 

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Improvements which Landlord will require Tenant to remove at the expiration or
earlier termination of this Lease; provided further, however, that Tenant shall
in no event be required to remove any such Alterations (or initial Tenant
Improvements, as the case may be) other than (A) any raised floors, internal
stairwells, vaults, and other similar special use tenant improvements (which
raised floors, internal stairwells, vaults, and other similar special use tenant
improvements shall only be required to be removed to the extent Landlord
identifies such items as being required to be removed at the expiration or
earlier termination of this Lease pursuant to the foregoing provisions of this
Section 8.3), and/or (B) those other improvements or alterations which are of
such specialized nature or application that the same are not typical for office
and/or research and development tenants in the Comparable Buildings, and the
cost to demolish such items exceeds the cost to demolish general office
improvements (which other improvements or alterations shall only be required to
be removed to the extent Landlord identifies such improvements or alterations as
being required to be removed at the expiration or earlier termination of this
Lease pursuant to the foregoing provisions of this Section 8.3. Notwithstanding
anything in the foregoing to the contrary, the parties hereby agree that the
improvements cross-hatched on the preliminary conceptual plans attached hereto
as Exhibit N shall be deemed to be specialized improvements for purposes of this
Section 8.3 and to the extent any such improvements are installed by or on
behalf of Tenant (as part of the initial Tenant Improvements or otherwise), then
upon the expiration or earlier termination of this Lease and without the need
for Landlord to notify Tenant thereof pursuant to the foregoing provisions of
this Section 8.3, Tenant shall be required to remove such improvements and
restore the areas of the Premises in which such improvements were installed to a
“warm shell” condition substantially in accordance with the Fifth Floor Required
Condition. If Landlord requires Tenant to remove any such initial Tenant
Improvements and/or Alterations which are constructed for the Premises, Tenant,
at its sole cost and expense, shall remove the identified initial Tenant
Improvements and/or Alterations on or before the expiration or earlier
termination of this Lease and repair any damage to the Premises caused by such
removal. If Tenant fails to complete such removal and/or to repair any damage
caused by the removal of any Alterations, Landlord may do so and may charge the
cost thereof to Tenant.

ARTICLE 9

COVENANT AGAINST LIENS

Tenant has no authority or power to cause or permit any lien or encumbrance of
any kind whatsoever, whether created by act of Tenant, operation of law or
otherwise, to attach to or be placed upon the Project, Building or Premises, and
any and all liens and encumbrances created by Tenant shall attach to Tenant’s
interest only. Landlord shall have the right at all times to post and keep
posted on the Premises any notice which it deems necessary for protection from
such liens. Tenant shall not cause or permit any lien of mechanics or
materialmen or others to be placed against the Project, the Building or the
Premises with respect to work or services claimed to have been performed for or
materials claimed to have been furnished to Tenant or the Premises, and, in case
of any such lien attaching or notice of any lien, Tenant shall cause it to be
released and removed of record by payment or posting of a statutory bond within
twenty (20) days after Tenant has received notice of such lien. If any such lien
is not released and removed of record within such 20-day period, then Landlord
may, at its option, take all action necessary to release and remove such lien,
without any duty to investigate the validity thereof, and all sums, costs and
expenses, including reasonable attorneys’ fees and costs, incurred by Landlord
in connection with such lien shall be deemed Additional Rent under this Lease
and shall immediately be due and payable by Tenant.

ARTICLE 10

INDEMNIFICATION AND INSURANCE

10.1 Indemnification and Waiver.

10.1.1 Subject to the provisions set forth below in Section 10.1.2 below:
(i) Tenant hereby assumes all risk of damage to property and injury to persons,
in, on, or about the Premises from any cause whatsoever and agrees that
Landlord, and its partners and subpartners, and their respective officers,
agents, property managers, servants, employees, and independent contractors
(collectively, “Landlord Parties”) shall not be liable for, and are hereby
released from any responsibility for, any damage to property or injury to
persons or resulting from the loss of use thereof, which damage or injury is
sustained by Tenant or by other persons claiming through Tenant; and (ii) Tenant
shall indemnify, defend, protect, and hold harmless the Landlord Parties from
any and all losses, costs, damages, expenses and liabilities, including without
limitation court costs and reasonable attorneys’ fees (collectively, “Claims”)
incurred in connection with or arising from any cause in, on or about the
Premises (including, without limitation, Tenant’s installation, placement and
removal of Alterations, improvements, fixtures and/or equipment in, on or about
the Premises), and any acts, omissions or negligence of Tenant or of any person
claiming by, through or under Tenant, or of the contractors, agents, servants,
employees, licensees or invitees of Tenant or any such person, in, on or about
the Premises, the Building and Project.

10.1.2 Notwithstanding the provisions of Section 10.1.1 above to the contrary:
(i) except for lost profits, loss of business or other consequential damages
(“Consequential Damages”) incurred or suffered by Tenant or Tenant’s
contractors, agents, employees, licensees or invitees, the assumption of risk
and release by Tenant set forth hereinabove shall not apply to any Claims to the
extent resulting from the negligence or willful misconduct of Landlord or the
Landlord Parties and not insured or required to be insured by Tenant under this
Lease (collectively, the “Excluded Claims”); and (ii) Tenant’s indemnity of
Landlord hereinabove shall not apply to (A) any Excluded Claims, or (B) any loss
of or damage to Landlord’s property to the extent Landlord has waived such loss
or damage pursuant to Section 10.4 below. In addition, Landlord shall indemnify,
defend, protect and hold Tenant and Tenant’s officers, directors, shareholders,
agents, employees and independent contractors harmless from and against all such
Excluded Claims, except for (1) any loss or damage to Tenant’s property to the
extent Tenant has waived such loss or damage pursuant to Section 10.4 below, and
(2) any Consequential Damages.

 

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10.1.3 Each party’s agreement to indemnify the other pursuant to this
Section 10.1 is not intended to and shall not relieve any insurance carrier of
its obligations under policies required to be carried by Tenant and/or Landlord,
as applicable, pursuant to the provisions of this Lease. The provisions of this
Section 10.1 shall survive the expiration or sooner termination of this Lease.

10.2 Landlord’s Insurance; Tenant’s Compliance with Landlord’s Insurance.
Landlord shall maintain in effect the following insurance during the Lease Term:
(i) physical damage insurance (including a rental loss endorsement covering no
less than twelve (12) months’ of Base Rent payable under this Lease) providing
coverage in the event of fire, vandalism, malicious mischief and all other risks
normally covered under “special form” policies in the geographical area of the
Building, covering all buildings and other improvements at the Project,
including the Building (excluding, at Landlord’s option, the property required
to be insured by Tenant pursuant to Section 10.3.2 below) in an amount not less
than the full replacement value (less commercially reasonable deductibles) of
such buildings and other improvements, together with such other risks as
Landlord may from time to time reasonably determine (provided however, that
Landlord shall have the right, but not the obligation, to obtain earthquake
and/or flood insurance); and (ii) commercial general liability insurance in the
amount of at least Five Million Dollars ($5,000,000.00) per occurrence and
annual aggregate, insuring against claims of bodily injury, personal injury or
property damage arising out of Landlord’s operations, contractual liabilities,
or use of the Building and common areas of the Project. Such coverages may be
carried under one or more blanket and/or umbrella insurance policies so long as
the coverages required under this Lease with respect to the Building and Project
are not reduced or impaired as a result thereof. Tenant shall, at Tenant’s
expense, comply as to the Premises with all reasonable insurance company
requirements pertaining to the use of the Premises of which Tenant has been
notified in writing. If Tenant’s conduct or use of the Premises causes any
increase in the premium for such insurance policies, then Tenant shall reimburse
Landlord for any such increase. Tenant, at Tenant’s expense, shall comply with
all rules, orders, regulations or requirements of the American Insurance
Association (formerly the National Board of Fire Underwriters) and with any
similar body.

10.3 Tenant’s Insurance. Tenant shall maintain the following coverages in the
following amounts.

10.3.1 Commercial General Liability Insurance covering the insured against
claims of bodily injury, personal injury and property damage arising out of
Tenant’s operations, assumed liabilities or use of the Premises, including a
Commercial General Liability endorsement covering the insuring provisions of
this Lease and the performance by Tenant of the indemnity agreements set forth
in Section 10.1 above, (and with owned and non-owned automobile liability
coverage, and host liquor liability coverage if alcoholic beverages are served
on the Premises) for limits of liability not less than:

 

Bodily Injury and    $5,000,000 each occurrence Property Damage Liability   
$5,000,000 annual aggregate Personal Injury Liability    $5,000,000 each
occurrence    $5,000,000 annual aggregate    0% Insured’s participation

The coverages required under this Section 10.3.1 may be carried under one or
more blanket and/or umbrella insurance policies so long as the coverages
required under this Section 10.3.1 are not reduced or impaired as a result
thereof.

10.3.2 Property Insurance covering (i) all furniture, trade fixtures, equipment,
merchandise and all other items of Tenant’s property on the Premises installed
by, for, or at the expense of Tenant, (ii) the Tenant Improvements, including
any Tenant Improvements which Landlord permits to be installed above the ceiling
of the Premises or below the floor of the Premises, and (iii) all other
improvements, alterations and additions to the Premises, including any
improvements, alterations or additions installed at Tenant’s request above the
ceiling of the Premises or below the floor of the Premises. Such insurance shall
be written under a “special form” policy, for the full replacement cost value
new without deduction for depreciation of the covered items and in amounts that
meet any co-insurance clauses of the policies of insurance and shall include a
sprinkler leakage coverage and earthquake sprinkler leakage coverage.

10.3.3 Workers’ compensation insurance as required by law.

10.3.4 Loss-of-income, business interruption and extra-expense insurance in such
amounts as will reimburse Tenant for direct and indirect loss of earnings
attributable to all perils commonly insured against by prudent tenants or
attributable to prevention of loss of access to the Premises or to the Building
as a result of such perils.

10.3.5 Tenant shall carry comprehensive automobile liability insurance having a
combined single limit of not less than Two Million Dollars ($2,000,000.00) per
occurrence and insuring Tenant against liability for claims arising out of
ownership, maintenance or use of any owned, hired or non-owned automobiles. The
coverages required under this Section 10.3.5 may be carried under one or more
blanket and/or umbrella insurance policies so long as the coverages required
under this Section 10.3.5 are not reduced or impaired as a result thereof.

10.3.6 Form of Policies. The minimum limits of policies of insurance required of
Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease. Such insurance shall: (i) name Landlord, and any other party it so
specifies, as loss payees or additional insureds, as their respective interests
may appear (for

 

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the insurance to be provided under Sections 10.3.1, 10.3.2(ii) and 10.3.2(iii)
above, only); (ii) specifically cover the liability assumed by Tenant under this
Lease, including, but not limited to, Tenant’s obligations under Section 10.1
above; (iii) be issued by an insurance company having a rating of not less than
A-VII in Best’s Insurance Guide or which is otherwise acceptable to Landlord and
licensed to do business in the state in which the Project is located; (iv) be
primary insurance as to all claims thereunder and provide that any insurance
carried by Landlord is excess and is non-contributing with any insurance
requirement of Tenant; (v) provide that the company writing such insurance
policy shall give Tenant at least thirty (30) days’ advance written notice of
any cancellation, non-renewal or change in coverage; if the company writing such
insurance policy delivers to Tenant any such written notice, Tenant shall
promptly deliver to Landlord a copy of such notice after Tenant’s receipt
thereof; (vi) contain a cross-liability endorsement or severability of interest
clause acceptable to Landlord; and (vii) with respect to the insurance required
in Sections 10.3.1 and 10.3.2 above, have deductible amounts not exceeding
Twenty-Five Thousand Dollars ($25,000.00). Tenant shall deliver certificates of
such policies to Landlord on or before the Lease Commencement Date and before
the expiration dates thereof. If Tenant shall fail to procure such insurance, or
to deliver such certificates, within the required time periods set forth in the
immediately preceding sentence, then Landlord may, at its option, upon no less
than five (5) business days’ prior written notice to Tenant, in addition to all
of its other rights and remedies under this Lease, and without regard to any
notice and cure periods set forth in Section 19.1 below, procure such policies
for the account of Tenant, and the cost thereof shall be paid to Landlord as
Additional Rent within ten (10) days after delivery of bills therefor.

10.4 Subrogation. Landlord and Tenant agree to have their respective insurance
companies issuing property damage insurance waive any rights of subrogation that
such companies may have against Landlord or Tenant, as the case may be, so long
as the insurance carried by Landlord and Tenant, respectively, is not
invalidated thereby. As long as such waivers of subrogation are contained in
their respective insurance policies, Landlord and Tenant hereby waive any right
that either may have against the other on account of any loss or damage to their
respective property to the extent such loss or damage is insurable under
policies of insurance for fire and all risk coverage, theft, public liability,
or other similar insurance.

10.5 Additional Insurance Obligations. Tenant shall carry and maintain during
the entire Lease Term, at Tenant’s sole cost and expense, increased amounts of
the insurance required to be carried by Tenant pursuant to this Article 10, and
such other reasonable types of insurance coverage and in such reasonable amounts
covering the Premises and Tenant’s operations therein, as may be reasonably
requested by Landlord; provided, however, that in no event shall such increased
coverage be in excess of that required by landlords of the Comparable Buildings
for tenants leasing comparable-sized space as the Premises in the Comparable
Buildings.

ARTICLE 11

DAMAGE AND DESTRUCTION

11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any common areas of the Project serving or
providing access to the Premises shall be damaged by fire or other casualty,
Landlord shall promptly and diligently, subject to reasonable delays for
insurance adjustment or other matters beyond Landlord’s reasonable control, and
subject to all other terms of this Article 11, restore the base, shell and core
of the Building and such common areas of the Project. Such restoration shall be
to substantially the same condition of the base, shell and core of the Building
and such common areas of the Project prior to the casualty, except for
modifications required by zoning and building codes and other laws or by the
holder of a mortgage on the Project and/or the Building, or the lessor of a
ground lease with respect to the Building, or any other modifications to the
common areas deemed desirable by Landlord, provided access to the Premises, the
Parking Area for Tenant’s use of the number of parking spaces allocated to
Tenant as set forth in Section 10 of the Summary and any common restrooms
serving the Premises shall not be materially impaired. Notwithstanding any other
provision of this Lease, upon the occurrence of any damage to the Premises,
Tenant shall assign to Landlord (or to any party designated by Landlord) all
insurance proceeds payable to Tenant under Tenant’s insurance required under
Sections 10.3.2(ii) and (iii) above, and Landlord shall repair any injury or
damage to the Tenant Improvements and Alterations within the Premises and shall
return such Tenant Improvements and Alterations to their original condition;
provided that if the costs of such repair of such Tenant Improvements and
Alterations by Landlord exceeds the amount of insurance proceeds received by
Landlord therefor from Tenant’s insurance carrier, as assigned by Tenant, the
excess costs of such repairs shall be paid by Tenant to Landlord prior to
Landlord’s repair of the damage. In connection with such repairs and
replacements of any such Tenant Improvements and Alterations, Tenant shall,
prior to Landlord’s commencement of such improvement work, submit to Landlord,
for Landlord’s review and approval, all plans, specifications and working
drawings relating thereto, and Landlord shall select the contractors to perform
such improvement work. Landlord shall not be liable for any inconvenience or
annoyance to Tenant or its visitors, or injury to Tenant’s business resulting in
any way from such damage or the repair thereof; provided however, that if such
fire or other casualty shall have damaged the Premises, Landlord shall allow
Tenant a proportionate abatement of Base Rent and Tenant’s Share of Operating
Expenses, Tax Expenses and Utilities Costs during the time and to the extent the
Premises are unfit for occupancy for the purposes permitted under this Lease,
and not occupied by Tenant as a result thereof. Tenant’s abatement period shall
continue until Tenant has been given reasonably sufficient time and reasonably
sufficient access to the Premises to install its property, furniture, fixtures
and equipment to the extent the same shall have been removed and/or damaged as a
result of such damage or destruction.

11.2 Termination Rights.

11.2.1 Within sixty (60) days after Landlord becomes aware of such damage,
Landlord shall notify Tenant in writing (“Landlord’s Damage Notice”) of the
estimated time (the “Estimated Repair Period”), in Landlord’s reasonable
judgment, required to substantially complete the work Landlord is required to
perform

 

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pursuant to Section 11.1 above (the “Landlord’s Restoration Work”).
Notwithstanding Section 11.1 above to the contrary, Landlord may elect not to
rebuild and/or restore the Premises, the Building and/or any other portion of
the Project and instead terminate this Lease by notifying Tenant in writing of
such termination within sixty (60) days after the date Landlord becomes aware of
such damage, such notice to include a termination date giving Tenant ninety
(90) days to vacate the Premises, but Landlord may so elect only if the Building
shall be damaged by fire or other casualty or cause, and one or more of the
following conditions is present: (i) the damage occurs during the last three
(3) years of the then-current Lease Term and Landlord’s Restoration Work cannot,
in the reasonable opinion of Landlord as set forth in Landlord’s Damage Notice,
be substantially completed within two hundred seventy (270) days after the date
of such damage (when such repairs are made without the payment of overtime or
other premiums); (ii) the holder of any mortgage on the Project and/or the
Building or ground or underlying lessor with respect to the Project and/or the
Building shall require that the insurance proceeds or any portion thereof be
used to retire the mortgage debt, or shall terminate the ground lease, as the
case may be; or (iii) the damage is not fully covered, except for deductible
amounts, by Landlord’s insurance policies and the cost of repairing such
uninsured or underinsured damage, including deductibles, exceeds $1,000,000.00
(or with respect to any damage which occurs during the last twelve (12) months
of the Lease Term, exceeds $100,000.00).

11.2.2 If (i) Landlord does not elect to terminate this Lease pursuant to
Landlord’s termination right as provided above, (ii) the damage constitutes a
Tenant Damage Event (as defined below), and (C) Landlord’s Restoration Work
cannot, in the reasonable opinion of Landlord as set forth in Landlord’s Damage
Notice, be substantially completed within two hundred ten (210) days after the
date of the damage, then Tenant may elect to terminate this Lease by delivering
written notice thereof to Landlord within fifteen (15) days after Tenant’s
receipt of Landlord’s Damage Notice, which termination shall be effective as of
the date of such termination notice thereof to Landlord. As used herein, a
“Tenant Damage Event” shall mean damage to all or any part of the Premises or
any common areas of the Project providing access to the Premises by fire or
other casualty, which damage (A) is not the result of the gross negligence or
willful misconduct of Tenant or any of Tenant’s employees, agents, contractors,
licensees or invitees, (B) substantially interferes with Tenant’s use of or
access to the Premises and (C) would entitle Tenant to an abatement of Rent
pursuant to Section 11.1 above.

11.2.3 In addition, in the event of a Tenant Damage Event, and if neither
Landlord nor Tenant has elected to terminate this Lease as provided above in
this Section 11.2, but Landlord fails to substantially complete Landlord’s
Restoration Work within the period (“Landlord’s Repair Period”) that is the
later of (i) two hundred ten (210) days after the date of such damage or
(ii) sixty (60) days after the Estimated Repair Period plus, in either case, the
number of days of delay, if any, attributable to any Force Majeure events, plus
the number of days of delay, if any, as are attributable to the acts or
omissions of Tenant or Tenant’s employees, agents, contractors, licensees or
invitees, then Tenant shall have an additional right to terminate this Lease
within fifteen (15) days after the expiration of Landlord’s Repair Period and
thereafter during the first five (5) business days of each calendar month
following the expiration of Landlord’s Repair Period until such time as
Landlord’s Restoration Work described in Landlord’s Damage Notice is
substantially complete, by written notice to Landlord (“Tenant’s Damage
Termination Notice”), effective as of a date set forth in Tenant’s Damage
Termination Notice (the “Damage Termination Date”), which Damage Termination
Date shall not be less than five (5) business days nor more than ninety
(90) days following the expiration of Landlord’s Repair Period, or each such
calendar month following expiration of Landlord’s Repair Period, as the case may
be. Notwithstanding the foregoing, if Tenant delivers Tenant’s Damage
Termination Notice to Landlord, then Landlord shall have the right to suspend
the effectiveness of Tenant’s Damage Termination Notice for a period of thirty
(30) days by delivering to Tenant, within five (5) business days of Landlord’s
receipt of Tenant’s Damage Termination Notice, a certificate of Landlord’s
contractor responsible for the performance of Landlord’s Restoration Work
described in Landlord’s Damage Notice certifying that it is such contractor’s
good faith judgment that such Landlord’s Restoration Work will be substantially
completed within the next thirty (30) days. If such Landlord’s Restoration Work
is substantially completed prior to the expiration of such thirty (30) day
period, then Tenant’s Damage Termination Notice shall be of no force or effect,
but if such Landlord’s Restoration Work is not substantially completed within
such thirty (30) day period, then this Lease shall terminate upon the expiration
of such thirty (30) day period.

11.2.4 In addition, if (x) the Premises or any portion of the Project is
destroyed or damaged to any substantial extent during the last twelve
(12) months of the Lease Term, (y) Tenant has not exercised the Extension Option
to the extent the same is still in effect, and does not exercise the Extension
Option within thirty (30) days after the date of Landlord’s Damage Notice, and
(3) Landlord’s Restoration Work is reasonably estimated by Landlord in
Landlord’s Damage Notice to require more than sixty (60) days or the remainder
of the Lease Term (whichever is less) to complete, then notwithstanding anything
contained in this Article 11, Landlord shall have the option to terminate this
Lease, and to the extent that such destruction or damage also constitutes a
Tenant Damage Event, Tenant shall have the option to terminate this Lease, by
giving written termination notice to the other party of the exercise of such
option within thirty (30) days after such damage or destruction, in which event
this Lease shall cease and terminate as of the date of such notice. Upon any
such termination of this Lease pursuant to this Section 11.2, Tenant shall pay
the Base Rent and Additional Rent (subject to abatement pursuant to Section 11.1
above), properly apportioned up to such date of termination, and both parties
hereto shall thereafter be discharged of all further obligations under this
Lease, except for those obligations which expressly survive the expiration or
earlier termination of the Lease Term.

11.3 Waiver of Statutory Provisions. The provisions of this Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all or any part of the
Premises, the Building or any other portion of the Project, and any statute or
regulation of the state in which the Project is located, including, without
limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with
respect to any rights or obligations concerning damage or destruction in the
absence of an express agreement between the parties, and any other statute or
regulation, now or hereafter in effect, shall have no application to this Lease
or any damage or destruction to all or any part of the Premises, the Building or
any other portion of the Project.

 

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ARTICLE 12

CONDEMNATION

12.1 Permanent Taking. If the whole or any material part of the Premises,
Building or Project shall be taken by power of eminent domain or condemned by
any competent authority for any public or quasi-public use or purpose, or if any
adjacent property or street shall be so taken or condemned, or reconfigured or
vacated by such authority in such manner as to require the use, reconstruction
or remodeling of any part of the Premises, Building or Project, or if Landlord
shall grant a deed or other instrument in lieu of such taking by eminent domain
or condemnation, Landlord shall have the option to terminate this Lease upon
ninety (90) days’ notice, provided such notice is given no later than one
hundred eighty (180) days after the date of such taking, condemnation,
reconfiguration, vacation, deed or other instrument. If more than twenty-five
percent (25%) of the rentable square feet of the Premises is taken, or if access
to the Premises is substantially impaired as a result of any such taking, Tenant
shall have the option to terminate this Lease upon ninety (90) days’ notice,
provided such notice is given no later than one hundred eighty (180) days after
the date of such taking. Landlord shall be entitled to receive the entire award
or payment in connection therewith, except that Tenant shall have the right to
file any separate claim available to Tenant for any taking of Tenant’s personal
property and fixtures belonging to Tenant and removable by Tenant upon
expiration of the Lease Term pursuant to the terms of this Lease, and for moving
expenses, so long as such claim does not diminish the award available to
Landlord, its ground lessor with respect to the Project or its mortgagee, and
such claim is payable separately to Tenant. All Rent shall be apportioned as of
the date of such termination, or the date of such taking, whichever shall first
occur. If any part of the Premises shall be taken, and this Lease shall not be
so terminated, the Base Rent and Tenant’s Share of Operating Expenses, Tax
Expenses and Utilities Costs shall be proportionately abated. Tenant hereby
waives any and all rights it might otherwise have pursuant to Section 1265.130
of the California Code of Civil Procedure.

12.2 Temporary Taking. Notwithstanding anything to the contrary contained in
this Article 12, in the event of a temporary taking of all or any portion of the
Premises for a period of one hundred and eighty (180) days or less, then this
Lease shall not terminate but the Base Rent and Tenant’s Share of Operating
Expenses, Tax Expenses and Utilities Costs shall be abated for the period of
such taking in proportion to the ratio that the amount of rentable square feet
of the Premises taken bears to the total rentable square feet of the Premises.
Landlord shall be entitled to receive the entire award made in connection with
any such temporary taking.

ARTICLE 13

COVENANT OF QUIET ENJOYMENT

Landlord covenants that Tenant, on paying the Rent, charges for services and
other payments herein reserved and on keeping, observing and performing all the
other terms, covenants, conditions, provisions and agreements herein contained
on the part of Tenant to be kept, observed and performed, shall, during the
Lease Term, peaceably and quietly have, hold and enjoy the Premises subject to
the terms, covenants, conditions, provisions and agreements hereof without
interference by any persons lawfully claiming by or through Landlord. The
foregoing covenant is in lieu of any other covenant express or implied.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

14.1 Transfers. Except as provided in Section 14.7 below, Tenant shall not,
without the prior written consent of Landlord, assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer,
this Lease or any interest hereunder, permit any assignment or other such
foregoing transfer of this Lease or any interest hereunder by operation of law,
sublet the Premises or any part thereof, or permit the use of the Premises by
any persons other than Tenant and its employees (all of the foregoing are
hereinafter sometimes referred to collectively as “Transfers” and any person to
whom any Transfer is made or sought to be made is hereinafter sometimes referred
to as a “Transferee”). If Tenant shall desire Landlord’s consent to any
Transfer, Tenant shall notify Landlord in writing, which notice (the “Transfer
Notice”) shall include (i) the proposed effective date of the Transfer, which
shall not be less than fifteen (15) business days nor more than one hundred
eighty (180) days after the date of delivery of the Transfer Notice, (ii) a
description of the portion of the Premises to be transferred (the “Subject
Space”), (iii) the name and address of the proposed Transferee, and a copy of
all existing and/or proposed documentation pertaining to the proposed Transfer,
and (iv) current financial statements of the proposed Transferee certified by an
officer, partner or owner thereof. In addition, Tenant shall promptly deliver to
Landlord such other information pertaining to the proposed Transfer as Landlord
may reasonably require so long as Landlord notifies Tenant of such other
information that Landlord so requires within five (5) days after Landlord’s
receipt of the Transfer Notice. Any Transfer made without Landlord’s prior
written consent shall, at Landlord’s option, be null, void and of no effect, and
shall, at Landlord’s option, constitute a default by Tenant under this Lease.
Whether or not Landlord shall grant consent, within thirty (30) days after
written request by Landlord, Tenant shall reimburse Landlord for any reasonable,
third party, out-of-pocket legal fees actually incurred by Landlord in
connection with Tenant’s proposed Transfer.

14.2 Landlord’s Consent. Landlord shall not unreasonably withhold or condition
its consent to any proposed Transfer on the terms specified in the Transfer
Notice. Landlord shall notify Tenant of Landlord’s approval or reasonable
disapproval of any such proposed Transfer within fifteen (15) business days
after Landlord’s receipt of such Transfer Notice. The parties hereby agree that
it shall be reasonable under this Lease and under any applicable law for
Landlord to withhold consent to any proposed Transfer where one or more of the
following apply, without limitation as to other reasonable grounds for
withholding consent:

14.2.1 The Transferee is of a character or reputation or engaged in a business
which is not consistent with the quality of the Building or Project;

 

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14.2.2 The Transferee intends to use the Subject Space for purposes which are
not permitted under this Lease;

14.2.3 The Transferee is either a governmental agency or instrumentality
thereof;

14.2.4 The Transferee is not a party of reasonable financial worth and/or
financial stability in light of the responsibilities the Transferee is assuming
under the documents effecting the Transfer on the date consent is requested;

14.2.5 The proposed Transfer would cause Landlord to be in violation of another
lease or agreement to which Landlord is a party, or would give an occupant of
the Project a right to cancel its lease; or

14.2.6 Either the proposed Transferee, or any person or entity which directly or
indirectly, controls, is controlled by, or is under common control with, the
proposed Transferee, (i) occupies space in the Project at the time of the
request for consent, (ii) is negotiating with Landlord to lease space in the
Project at such time, or (iii) has negotiated with Landlord during the twelve
(12)-month period immediately preceding the Transfer Notice.

If Landlord consents to any Transfer pursuant to the terms of this Section 14.2
(and does not exercise any recapture rights Landlord may have under Section 14.4
below), Tenant may within six (6) months after Landlord’s consent, but not later
than the expiration of said six-month period, enter into such Transfer of the
Premises or portion thereof, upon substantially the same terms and conditions as
are set forth in the Transfer Notice furnished by Tenant to Landlord pursuant to
Section 14.1 above, provided that if there are any changes in the terms and
conditions from those specified in the Transfer Notice such that it would have
been reasonable for Landlord to initially have refused its consent to such
Transfer under this Section 14.2, Tenant shall again submit the Transfer to
Landlord for its approval and other action under this Article 14 (including
Landlord’s right of recapture, if any, under Section 14.4 below).

14.3 Transfer Premium. Except as provided in Section 14.7 below, if Landlord
consents to a Transfer, as a condition thereto which the parties hereby agree is
reasonable, Tenant shall pay to Landlord fifty percent (50%) of any Transfer
Premium (as defined below) received by Tenant from such Transferee. “Transfer
Premium” shall mean all rent, additional rent or other consideration payable by
such Transferee in excess of the Rent and Additional Rent payable by Tenant
under this Lease on a per rentable square foot basis if less than all of the
Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (i) any reasonable changes, alterations and improvements to the
Premises in connection with the Transfer (but only to the extent approved by
Landlord), (ii) any reasonable brokerage commissions in connection with the
Transfer, and (iii) any reasonable attorneys’ fees in connection with the
Transfer. “Transfer Premium” shall also include, but not be limited to, key
money and bonus money paid by Transferee to Tenant in connection with such
Transfer, and any payment in excess of fair market value for services rendered
by Tenant to Transferee or for assets, fixtures, inventory, equipment, or
furniture transferred by Tenant to Transferee in connection with such Transfer.

14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, except as provided below in this
Section 14.4 and in Section 14.7 below, Landlord shall have the option, by
giving written notice to Tenant within thirty (30) days after receipt of any
Transfer Notice, to recapture the Subject Space. Such recapture notice shall
terminate this Lease with respect to the Subject Space as of the date stated in
the Transfer Notice as the effective date of the proposed Transfer until the
last day of the term of the Transfer as set forth in the Transfer Notice;
provided, however, such recapture and termination right shall only apply with
respect to any (i) proposed assignment of this Lease, or (ii) any sublease which
(A) when aggregated with all subleases then in effect to non-Affiliates,
pertains to three (3) or more full floors of the Premises, and (B) is for a term
which is substantially all of the remainder of the Lease Term. If this Lease
shall be terminated with respect to less than the entire Premises, then: (1) the
Rent reserved herein shall be prorated on the basis of the number of rentable
square feet retained by Tenant in proportion to the number of rentable square
feet contained in the Premises; (2) certain modifications to this Lease will be
necessary to address the fact that effective from and after the such termination
date, (x) Tenant will not be leasing the entire rentable area of the Building,
(y) the Building will convert to a multi-tenant building, and (z) certain
maintenance and repair obligations of Tenant set forth in this Lease will become
the obligations of Landlord effective from and after such termination date;
(3) the parties shall, prior to such termination date, execute and deliver to
the other an amendment to this Lease memorializing and setting forth the
modifications described in clauses (1) and (2) hereinabove; and (4) this Lease
as so amended shall continue thereafter in full force and effect from and after
the date of such termination. If Landlord declines, or fails to elect in a
timely manner to recapture the Subject Space under this Section 14.4, then,
provided Landlord has consented to the proposed Transfer, Tenant shall be
entitled to proceed to transfer the Subject Space to the proposed Transferee,
subject to provisions of the last paragraph of Section 14.2 above.

14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and
conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord,

 

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and (iv) no Transfer relating to this Lease or agreement entered into with
respect thereto, whether with or without Landlord’s consent, shall relieve
Tenant or any guarantor of the Lease from liability under this Lease. Landlord
or its authorized representatives shall have the right at all reasonable times
to audit the books, records and papers of Tenant relating to any Transfer, and
shall have the right to make copies thereof. If the Transfer Premium respecting
any Transfer shall be found understated, Tenant shall, within thirty (30) days
after demand, pay the deficiency and Landlord’s costs of such audit.

14.6 Additional Transfers. For purposes of this Lease, except as provided in
Section 14.7 below, the term “Transfer” shall also include (i) if Tenant is a
partnership or limited liability company, the withdrawal or change, voluntary,
involuntary or by operation of law, of fifty percent (50%) or more of the
partners or members, or transfer of fifty percent (50%) or more of the
partnership or membership interests, within a twelve (12) month period, or the
dissolution of the partnership without immediate reconstitution thereof, and
(ii) if Tenant is a closely held corporation (i.e., whose stock is not publicly
held and not traded through an exchange or over the counter), (A) the
dissolution, merger, consolidation or other reorganization of Tenant, (B) the
sale or other transfer of more than an aggregate of fifty percent (50%) of the
voting shares of Tenant (other than to immediate family members by reason of
gift or death), within a twelve (12) month period, or (C) the sale, mortgage,
hypothecation or pledge of more than an aggregate of fifty percent (50%) of the
value of the unencumbered assets of Tenant within a twelve (12) month period.

14.7 Permitted Transfers to Affiliates. Notwithstanding the foregoing provisions
of this Article 14 to the contrary, the assignment or subletting by Tenant of
all or any portion of this Lease or the Premises to (i) a parent or subsidiary
of Tenant, or (ii) any person or entity which controls, is controlled by or
under common control with Tenant, or (iii) any entity which purchases all or
substantially all of the assets and/or stock of Tenant, or (iv) a successor to
Tenant or any of the foregoing entities by purchase, merger, consolidation or
reorganization (all such persons or entities described in (i), (ii), (iii) and
(iv) being sometimes hereinafter referred to as “Affiliates”) shall not be
deemed a Transfer under this Article 14, and thus shall not be subject to the
requirement of obtaining Landlord’s consent thereto in Section 14.2 above, or
Landlord’s right to receive any Transfer Premium pursuant to Section 14.3 above,
or recapture right in Section 14.4 above, provided that:

14.7.1 any such Affiliate was not formed, and such transaction was not entered
into, as a subterfuge to (i) avoid the obligations of this Article 14, or
(ii) adversely affect the ability of Tenant to satisfy its obligations under
this Lease;

14.7.2 Tenant gives Landlord notice of any such assignment or sublease to an
Affiliate prior to or within ten (10) business days after the effective date of
such assignment or sublease;

14.7.3 the successor of Tenant and Tenant have as of the effective date of any
such assignment or sublease a tangible net worth, in the aggregate, computed in
accordance with generally accepted accounting principles (but excluding goodwill
as an asset), which is sufficient to meet the obligations of Tenant under this
Lease;

14.7.4 any such assignment or sublease shall be subject and subordinate to all
of the terms and provisions of this Lease, and such assignee or sublessee shall
assume, in a written document reasonably satisfactory to Landlord and delivered
to Landlord upon or prior to the effective date of such assignment or sublease,
all the obligations of Tenant under this Lease with respect to the Subject Space
which is the subject of such Transfer (other than the amount of Base Rent and
Tenant’s Share of Operating Expenses and Tax Expenses payable by Tenant with
respect to a sublease); and

14.7.5 Tenant shall remain fully liable for all obligations to be performed by
Tenant under this Lease.

14.8 “Control”, as used in this Section 14.7, shall mean the possession, direct
or indirect, of the power to cause the direction of the management and policies
of a person or entity, or a majority ownership interest, whether through the
ownership of voting securities, by contract or otherwise.

ARTICLE 15

SURRENDER; OWNERSHIP AND REMOVAL OF PERSONAL PROPERTY

15.1 Surrender of Premises. No act or thing done by Landlord or any agent or
employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in a writing signed by Landlord. The delivery of keys
to the Premises to Landlord or any agent or employee of Landlord shall not
constitute a surrender of the Premises or effect a termination of this Lease,
whether or not the keys are thereafter retained by Landlord, and notwithstanding
such delivery Tenant shall be entitled to the return of such keys at any
reasonable time upon request until this Lease shall have been properly
terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a
merger, and at the option of Landlord shall operate as an assignment to Landlord
of all subleases or subtenancies affecting the Premises.

15.2 Removal of Tenant Property by Tenant. Upon the expiration of the Lease
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in as good order and condition as when Tenant took possession and as
thereafter improved by Landlord and/or Tenant, reasonable wear and tear and
repairs which are specifically made the responsibility of Landlord hereunder
excepted; provided, however, that notwithstanding the foregoing,

 

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Section 6.2 above shall control with respect to Tenant’s surrender obligations
pertaining to the HVAC/Elevator Systems and Equipment. Upon such expiration or
termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, and such items of furniture,
equipment, free-standing cabinet work, and other articles of personal property
owned by Tenant or installed or placed by Tenant at its expense in the Premises,
and such similar articles of any other persons claiming under Tenant, as
Landlord may, in its sole discretion, require to be removed, and Tenant shall
repair at its own expense all damage to the Premises and Building resulting from
such removal. In addition, upon such expiration or termination, Tenant shall at
Tenant’s sole option either remove all telephone, data, and other cabling and
wiring installed or caused to be installed by Tenant (including any cabling and
wiring, installed above the ceiling of the Premises or below the floor of the
Premises), or leave such cabling and wiring in place provided that any remaining
cabling and wiring (i) is clearly marked as Tenant’s cabling and wiring and
appropriately labeled on both ends, (ii) is generally usable by technology
companies in Silicon Valley, California, and (iii) is not obsolete as of the
expiration or termination of this Lease. If such cabling and wiring does not
satisfy all of the criteria described in clauses (i) through (iii) hereinabove,
then Tenant shall be required, at Tenant’s sole cost and expense, to remove or
cause to be removed such cabling and wiring, and repair any damage occasioned by
such removal.

ARTICLE 16

HOLDING OVER

If Tenant holds over after the expiration of the Lease Term hereof, with or
without the express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and shall not constitute a renewal hereof or an extension
for any further term, and in such case Base Rent shall be payable as follows:
(i) during the first sixty (60) days of such holdover, at a monthly rate equal
to one hundred twenty-five percent (125%) of the Base Rent applicable during the
last rental period of the Lease Term under this Lease; and (ii) after such
60-day period, at a rate equal to one hundred fifty percent (150%) of the
greater of (A) the Base Rent applicable during the last rental period of the
Lease Term under this Lease, and (B) the fair market rental rate for the
Premises as of the commencement of such holdover period. Such month-to-month
tenancy shall be subject to every other term, covenant and agreement contained
herein. Landlord hereby expressly reserves the right to require Tenant to
surrender possession of the Premises to Landlord as provided in this Lease upon
the expiration or other termination of this Lease. The provisions of this
Article 16 shall not be deemed to limit or constitute a waiver of any other
rights or remedies of Landlord provided herein or at law. If Tenant fails to
surrender the Premises upon the termination or expiration of this Lease, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnify and hold Landlord harmless from all loss, costs
(including reasonable attorneys’ fees) and liability resulting from such
failure, including, without limiting the generality of the foregoing, any claims
made by any succeeding tenant founded upon such failure to surrender, and any
lost profits to Landlord resulting therefrom; provided, however, following
Landlord’s execution of a lease, a letter of intent to lease, a loan
application, a loan commitment, a sale contract and/or a letter of intent to
sell, any of which affect the Premises (each, a “Transaction Document”),
Landlord shall deliver written notice (the “Transaction Notice”) of such
Transaction Document to Tenant and the terms of the foregoing indemnity shall
not be effective until the later of (1) the date that occurs thirty (30) days
following the date Landlord delivers such Transaction Notice to Tenant, or
(2) the date such holdover commences.

ARTICLE 17

ESTOPPEL CERTIFICATES

Within fifteen (15) business days following a request in writing by Landlord,
Tenant shall execute and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be in a customary form as may be reasonably
required by any prospective mortgagee or purchaser of the Project (or any
portion thereof), indicating therein any exceptions thereto that may exist at
that time, and shall also contain any other factual information regarding this
Lease as may be reasonably requested by Landlord or Landlord’s mortgagee or
prospective mortgagee. Tenant shall execute and deliver whatever other
instruments may be reasonably required for such purposes. Failure of Tenant to
timely execute and deliver such estoppel certificate or other instruments within
such 15 business-day period, where such failure continues for an additional five
(5) days after a subsequent notice of such failure is delivered by Landlord to
Tenant, shall constitute an acceptance of the Premises and an acknowledgment by
Tenant that statements included in the estoppel certificate are true and
correct, without exception. Failure by Tenant to so deliver such estoppel
certificate shall be a material default of the provisions of this Lease.

ARTICLE 18

SUBORDINATION

Subject to the last sentence of this Article 18 and the other terms and
conditions of this Article 18, this Lease is subject and subordinate to all
present and future ground leases of the Project and to the lien of any
mortgages, deeds of trust or other encumbrances (collectively, the
“Encumbrances”), now or hereafter in force against the Project, if any, and to
all renewals, extensions, modifications, consolidations and replacements
thereof, and to all advances made or hereafter to be made upon the security of
such Encumbrances. Notwithstanding any other provision of this Article 18 to the
contrary, any Encumbrance holder or ground lessor may elect that this Lease
shall be senior to and have priority over that Encumbrance or ground lease
whether this Lease is dated before or after the date of the Encumbrance or
ground lease. Notwithstanding any contrary provision of this Article 18, a
condition precedent to the subordination of this Lease to any future Encumbrance
is that Landlord shall obtain for the benefit of Tenant a commercially
reasonable subordination, non-disturbance and attornment agreement (each, a
“Future SNDA”) from the mortgagee, beneficiary or ground lessor under such
future Encumbrance. Tenant

 

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covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage, or if any ground lease is terminated, to
attorn, without any deductions or set-offs whatsoever (except as may be
otherwise provided in the applicable Future SNDA), to the purchaser upon any
such foreclosure sale, or to the lessor of such ground lease, as the case may
be, if so requested to do so by such purchaser or lessor, and to recognize such
purchaser or lessor as the lessor under this Lease. Tenant shall, within fifteen
(15) business days after Tenant’s receipt of a request therefor by Landlord,
execute such further instruments or assurances as Landlord may reasonably deem
necessary to evidence or confirm the subordination or superiority of this Lease
to any such mortgages, trust deeds or ground leases. Tenant waives the
provisions of any current or future statute, rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely
affect this Lease and the obligations of the Tenant hereunder in the event of
any foreclosure proceeding or sale. Tenant hereby acknowledges that as of the
date on which Landlord and Tenant execute this Lease there is a deed of trust
encumbering, and in force against, the Project in favor of the lender(s) (the
“Current Lender”) set forth on Exhibit F attached hereto and incorporated herein
by this reference. Concurrently with the execution of this Lease, Landlord and
Tenant shall each sign, notarize and deliver to the other party, and Landlord
shall cause the Current Lender to sign, notarize and deliver to Tenant, a
subordination, non-disturbance and attornment agreement in the form of Exhibit F
attached hereto.

ARTICLE 19

TENANT’S DEFAULTS; LANDLORD’S REMEDIES

19.1 Events of Default by Tenant. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant’s
sole cost and expense and without any reduction of Rent. The occurrence of any
of the following shall constitute a default of this Lease by Tenant:

19.1.1 Any failure by Tenant to pay Base Rent, Tenant’s Share of Operating
Expenses, Tax Expenses and Utilities Costs or any other regularly scheduled,
recurring charge required to be paid under this Lease, or any part thereof, when
due, and such failure shall be continuing for a period of more than five
(5) business days after written notice of such failure from Landlord to Tenant;
provided however, that any such notice shall be in addition to, and not in lieu
of, any notice required under California Code of Civil Procedure Section 1161 or
any similar or successor law;

19.1.2 Any failure by Tenant to pay any Rent or other charge required to be paid
under this Lease, or any part thereof, which is other than the Rent described in
Section 19.1.1 above, when due, and such failure shall be continuing for a
period of more than thirty (30) days after written notice of such failure from
Landlord to Tenant; provided however, that any such notice shall be in addition
to, and not in lieu of, any notice required under California Code of Civil
Procedure Section 1161 or any similar or successor law; or

19.1.3 Any failure by Tenant to observe or perform any other provision, covenant
or condition of this Lease to be observed or performed by Tenant where such
failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant; provided however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure Section 1161 or any similar or successor law; and provided further
that if the nature of such default is such that the same cannot reasonably be
cured within a thirty (30)-day period, Tenant shall not be deemed to be in
default if it diligently commences such cure within such period and thereafter
diligently proceeds to rectify and cure said default as soon as possible.

19.2 Landlord’s Remedies Upon Default. Upon the occurrence of any such default
by Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity, the option to pursue any one or more of the
following remedies, each and all of which shall be cumulative and nonexclusive,
without any notice or demand whatsoever.

19.2.1 Terminate this Lease, in which event Tenant shall immediately surrender
the Premises to Landlord, and if Tenant fails to do so, Landlord may, without
prejudice to any other remedy which it may have for possession or arrearages in
rent, enter upon and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying the Premises or any part thereof,
without being liable for prosecution or any claim or damages therefor; and
Landlord may recover from Tenant the following:

(i) the worth at the time of award of any unpaid rent which has 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 which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus

(iii) the worth at the time of award of the amount by which the unpaid rent for
the balance of the Lease Term after the time of award exceeds the amount of such
rental loss that Tenant proves could have been 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 of things would be likely to result
therefrom, specifically including but not limited to, brokerage commissions and
advertising expenses incurred, expenses of remodeling the Premises or any
portion thereof for a new tenant, whether for the same or a different use, and
any special concessions made to obtain a new tenant; plus

 

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(v) 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.

The term “rent” as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Sections 19.2.1(i) and
(ii), above, the “worth at the time of award” shall be computed by allowing
interest at the Interest Rate set forth in Section 4.5 above. As used in
Section 19.2.1(iii) above, the “worth at the time of award” shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).

19.2.2 Landlord shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in effect after lessee’s breach and
abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.

19.2.3 Landlord may, but shall not be obligated to, make any such payment or
perform or otherwise cure any such obligation, provision, covenant or condition
on Tenant’s part to be observed or performed (and may enter the Premises for
such purposes). In the event of Tenant’s failure to perform any of its
obligations or covenants under this Lease, and such failure to perform poses a
material risk of injury or harm to persons or damage to or loss of property,
then Landlord shall have the right to cure or otherwise perform such covenant or
obligation at any time after such failure to perform by Tenant, whether or not
any such notice or cure period set forth in Section 19.1 above has expired. Any
such actions undertaken by Landlord pursuant to the foregoing provisions of this
Section 19.2.3 shall not be deemed a waiver of Landlord’s rights and remedies as
a result of Tenant’s failure to perform and shall not release Tenant from any of
its obligations under this Lease.

19.3 Payment by Tenant. Tenant shall pay to Landlord, within thirty (30) days
after delivery by Landlord to Tenant of statements therefor: (i) sums equal to
expenditures reasonably made and obligations incurred by Landlord in connection
with Landlord’s performance or cure of any of Tenant’s obligations pursuant to
the provisions of Section 19.2.3 above; and (ii) sums equal to all expenditures
made and obligations incurred by Landlord in collecting or attempting to collect
the Rent or in enforcing or attempting to enforce any rights of Landlord under
this Lease or pursuant to law, including, without limitation, all legal fees and
other amounts so expended. Tenant’s obligations under this Section 19.3 shall
survive the expiration or sooner termination of the Lease Term.

19.4 Sublessees of Tenant. If Landlord elects to terminate this Lease on account
of any default by Tenant, as set forth in this Article 19, Landlord shall have
the right to terminate any and all subleases, licenses, concessions or other
consensual arrangements for possession entered into by Tenant and affecting the
Premises or may, in Landlord’s sole discretion, succeed to Tenant’s interest in
such subleases, licenses, concessions or arrangements. If Landlord’s elects to
succeed to Tenant’s interest in any such subleases, licenses, concessions or
arrangements, Tenant shall, as of the date of notice by Landlord of such
election, have no further right to or interest in the rent or other
consideration receivable thereunder.

19.5 Waiver of Default. No waiver by Landlord of any violation or breach by
Tenant of any of the terms, provisions and covenants herein contained shall be
deemed or construed to constitute a waiver of any other or later violation or
breach by Tenant of the same or any other of the terms, provisions, and
covenants herein contained. Forbearance by Landlord in enforcement of one or
more of the remedies herein provided upon a default by Tenant shall not be
deemed or construed to constitute a waiver of such default. The acceptance of
any Rent hereunder by Landlord following the occurrence of any default, whether
or not known to Landlord, shall not be deemed a waiver of any such default,
except only a default in the payment of the Rent so accepted.

19.6 Efforts to Relet. For the purposes of this Article 19, Tenant’s right to
possession shall not be deemed to have been terminated by efforts of Landlord to
relet the Premises, by its acts of maintenance or preservation with respect to
the Premises, or by appointment of a receiver to protect Landlord’s interests
hereunder. The foregoing enumeration is not exhaustive, but merely illustrative
of acts which may be performed by Landlord without terminating Tenant’s right to
possession.

ARTICLE 20

ROOFTOP SPECIAL EQUIPMENT

20.1 Roof Access for Satellite and Antennae Equipment. Subject to (i) the
approval of all applicable governmental agencies, and (ii) Tenant’s compliance
with all applicable laws and the provisions of this Article 20 and the other
provisions of this Lease, Landlord hereby agrees that Tenant shall have the
right, at Tenant’s sole cost and expense but without any obligation to pay
Landlord any rent or license fees with respect thereto during the Lease Term, to
install on the roof of the Building, in locations to be approved by Landlord
(collectively, the “Rooftop Equipment Area”): (i) a reasonable amount of
satellite dishes to be used by Tenant in connection with Tenant’s business
operations in the Premises for the permitted use set forth in Section 5.1 above
(collectively, the “Satellite Equipment”); and (ii) a reasonable amount of local
antennae to be used by Tenant in connection with Tenant’s business operations in
the Premises for the permitted use set forth in Section 5.1 above (collectively,
the “Antennae Equipment”). In addition, Tenant shall have the right, subject to
available capacity of the Building, to install such connection equipment, such
as conduits, cables, risers, feeders and materials (collectively, the
“Connecting Equipment”) in the shafts, ducts, conduits, chases, utility closets
and other facilities of the Building as

 

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is reasonably necessary to connect the Satellite Equipment and/or the Antennae
Equipment to Tenant’s other machinery and equipment in the Premises. Subject to
Section 20.3 below and all of the terms and conditions of this Lease, and
subject to all laws and such reasonable rules and regulations as Landlord may
impose from time to time, Tenant shall also have the right of access twenty-four
(24) hours per day, seven (7) days per week to the areas where any Satellite
Equipment, Antennae Equipment and/or Connecting Equipment (all collectively
referred to herein as the “Special Equipment”) are located for the purposes of
maintaining, repairing, testing and replacing the same. If required by Landlord,
in its reasonable discretion, the Special Equipment shall be screened with
material and in a manner which is aesthetically consistent with the exterior of
the Building as determined by Landlord.

20.2 Installation. The installation of the Special Equipment shall constitute an
Alteration and shall be performed in accordance with and subject to the
provisions of Article 8 above, including, without limitation, Tenant’s
obligation to obtain Landlord’s prior consent to the size and other
specifications of the Special Equipment, and the Special Equipment shall be
treated for all purposes of this Lease as if the Special Equipment were Tenant’s
personal property. In no event shall Tenant be permitted to void any warranties
pertaining to the Building or Project in connection with the installation of the
Special Equipment. For the purposes of determining Landlord’s and Tenant’s
respective rights and obligations with respect to Tenant’s use of the roof as
herein provided, the portions of the Rooftop Equipment Area (and any other
portions of the roof) where the Satellite Equipment and Antennae Equipment are
actually located shall be deemed to be a portion of Tenant’s Premises to the
extent appropriate; consequently, all of the provisions of this Lease respecting
Tenant’s obligations hereunder shall apply to the installation, use and
maintenance of the such portions of the roof by Tenant (including, without
limitation, provisions relating to compliance with requirements as to insurance,
indemnity, repairs and maintenance), and all such provisions shall also apply,
to the extent appropriate, to the installation, use and maintenance of the
Special Equipment. Landlord shall have no obligation to make any changes,
improvements or alterations to the Rooftop Equipment Area.

20.3 Tenant’s Covenants. Tenant shall install, use, maintain and repair the
Special Equipment so as not to (i) cause damage to the Building or the Systems
and Equipment, or (ii) unreasonably interfere with the operation of the Project
(other than the Building), or the operation of the businesses of other tenants,
occupants or licensees of the Project or such tenants’, occupants’ and
licensees’ systems and equipment located in or on the Project. In addition,
Tenant shall (A) be solely responsible for any damage caused as a result of the
Special Equipment, (B) promptly pay any tax, license or permit fees charged
pursuant to any requirements in connection with the installation, maintenance or
use of the Special Equipment and comply with all precautions and safeguards
recommended by all governmental authorities, and (C) make necessary repairs,
replacements or maintenance of the Special Equipment in order to keep the same
in first class order, condition and repair. Further, Tenant, at Tenant’s sole
cost and expense, shall maintain such equipment and install such fencing and
other protective equipment on or about the Satellite Equipment and the Antennae
Equipment as Landlord may reasonably require. Tenant shall indemnify, defend and
hold Landlord harmless from and against any and all Claims arising out of
Tenant’s failure to comply with the provisions of this Article 20 except to the
extent such Claims result from the negligence or willful misconduct of Landlord
or any of the Landlord Parties and are not insured or required to be insured by
Tenant under this Lease.

20.4 Landlord’s Obligations. Except as specifically set forth herein, Landlord
shall not have any obligations with respect to the Special Equipment or
compliance with any requirements relating thereto nor shall Landlord be
responsible for any damage that may be caused to the Special Equipment, except
to the extent caused by the negligence or willful misconduct of Landlord and not
insured or required to be insured by Tenant under this Lease. Landlord makes no
representation that the Special Equipment will be able to receive or transmit
communication signals without interference or disturbance, and Tenant agrees
that Landlord shall not be liable to Tenant therefor.

20.5 Hazardous Materials/Inspections. Tenant shall not use any Hazardous
Materials in connection with the Special Equipment other than limited reasonable
quantities of Hazardous Materials reasonably necessary and customarily used for
the operation of the Special Equipment and used, stored and disposed of by
Tenant in accordance with all applicable laws and the highest safety standards
for such use, storage and disposal. Landlord shall have the right, after
providing Tenant with written notice, to conduct such tests and/or inspections
of the Special Equipment as Landlord may determine are reasonably necessary from
time to time to ensure that Tenant is complying with the terms of this Article
20, and, if such tests or inspections reveal that Tenant has breached its
obligations hereunder, Tenant shall pay for the reasonable cost of such tests.

20.6 Default. If any of the conditions set forth in this Article 20 are not
complied with by Tenant, then without limiting Landlord’s rights and remedies it
may otherwise have under this Lease, Tenant shall, upon written notice from
Landlord, have the option either to: (i) immediately discontinue its use of the
particular items of the Special Equipment which are non-compliant, remove the
same, and make such repairs and restoration as required under Section 20.7
below, or (ii) correct such noncompliance within thirty (30) days after receipt
of notice or such longer period as may be reasonably necessary to correct such
noncompliance, so long as Tenant commences to correct such noncompliance within
such thirty (30) day period and thereafter proceeds with due diligence to
correct such noncompliance. If Tenant elects the option described in clause
(ii) of the immediately preceding sentence and Tenant fails to correct such
noncompliance within the applicable time period described in clause (ii) of the
immediately preceding sentence, then Tenant shall immediately discontinue its
use of the particular items of the Special Equipment which are non-compliant and
remove the same.

20.7 Removal at End of Term. Upon the expiration or earlier termination of this
Lease, Tenant shall, subject to the reasonable control of and direction from
Landlord, remove the Special Equipment, repair any damage caused thereby, and
restore the roof and other facilities of the Building to their condition
existing prior to the installation of the Special Equipment.

 

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20.8 Rights Personal. Notwithstanding the foregoing provisions of this Article
20 to the contrary, Tenant’s rights under this Article 20: (i) are personal to
the original Tenant executing this Lease (the “Original Tenant”) and any
assignee to which Tenant’s entire interest in the Lease has been assigned
pursuant to Article 14 above (including any Affiliate assignee pursuant to
Section 14.7 above); (ii) may only be exercised by the Original Tenant or such
assignee, as the case may be; and (iii) may not be transferred to or used by any
person or entity other than the Original Tenant or such assignee, as the case
may be, except that Tenant may permit subtenants under subleases entered into by
Tenant pursuant to Article 14 above, to use the Special Equipment for their
telecommunications needs in their Subject Space.

ARTICLE 21

COMPLIANCE WITH LAW

Tenant shall not do anything or suffer anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall
promptly comply with all applicable laws (including those pertaining to any
Hazardous Materials released at, on or under the Project by Tenant, its agents,
employees, contractors, licensees and/or invitees), subject to Landlord’s
obligation as set forth hereinbelow to comply with applicable laws with respect
to the base, shell and core of the Building and/or the common areas of the
Project. In addition, Tenant shall fully comply with all present or future
programs required under applicable laws or consented to by Tenant (in Tenant’s
reasonable discretion) that are intended to manage parking, transportation or
traffic in and around the Project, and in connection therewith, Tenant shall
take commercially reasonable responsible action for the transportation planning
and management of all employees located at the Premises by working directly with
Landlord, any governmental transportation management organization or any other
transportation-related committees or entities. The judgment of any court of
competent jurisdiction or the admission of Tenant in any judicial action,
regardless of whether Landlord is a party thereto, that Tenant has violated any
of said governmental measures, shall be conclusive of that fact as between
Landlord and Tenant. Landlord shall comply with all applicable laws relating to
the base, shell and core of the Building, the common areas of the Project and
Hazardous Materials at the Project to the extent the same are Landlord’s
responsibility under Section 5.3 above. Notwithstanding the foregoing, to the
extent Landlord’s compliance obligations in the immediately preceding sentence
are triggered by any improvements or Alterations made to the Premises by or on
behalf of Tenant (excluding the initial Tenant Improvements) or Tenant’s
particular manner of use of the Premises, Tenant shall reimburse Landlord for
the cost of such compliance within thirty (30) days after invoice from Landlord.

ARTICLE 22

ENTRY BY LANDLORD

Landlord reserves the right at all reasonable times and upon reasonable notice
to Tenant to enter the Premises to: (i) inspect them; (ii) show the Premises to
prospective purchasers, mortgagees, or to the ground or underlying lessors;
(iii) during the last twelve (12) months of the Lease Term, show the Premises to
prospective tenants; (iv) to post notices of nonresponsibility; or (v) alter,
improve or repair the Premises or the Building if necessary to comply with
current building codes or other applicable laws, or for structural alterations,
repairs or improvements to the Building to the extent permitted or required to
be performed by Landlord under this Lease. Notwithstanding anything to the
contrary contained in this Article 22, Landlord may enter the Premises at any
time, without notice to Tenant, in emergency situations (in which case Landlord
shall use commercially reasonable efforts to notify Tenant verbally prior to
such entry) and/or to perform services required of Landlord pursuant to this
Lease. Any such entries shall be without the abatement of Rent and shall include
the right to take such reasonable steps as required to accomplish the stated
purposes. Tenant hereby waives any claims for damages or for any injuries or
inconvenience to or interference with Tenant’s business, lost profits, any loss
of occupancy or quiet enjoyment of the Premises, and any other loss occasioned
by Landlord’s exercise of Landlord’s rights under this Article 22. For each of
the above purposes, Landlord shall at all times have a key with which to unlock
all the doors in the Premises, excluding Tenant’s vaults, safes and special
security areas designated in advance by Tenant. In an emergency, Landlord shall
have the right to enter without notice (subject, however, to Landlord’s
obligation to use commercially reasonable efforts to notify Tenant verbally
prior to such entry as described hereinabove) and use any means that Landlord
may deem proper to open the doors in and to the Premises. Any entry into the
Premises in the manner hereinbefore described shall not be deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises.
Notwithstanding anything to the contrary set forth above in this Article 22,
during any such entry by Landlord under this Article 22, (except in the event of
an emergency or Landlord’s entry to perform its obligations under this Lease),
at Tenant’s option, Landlord shall (A) comply with all reasonable security
requirements reasonably established by Tenant so long as the same have been
delivered to Landlord in writing prior to such entry, and (B) be accompanied by
a representative of Tenant if such representative is reasonably made available
to Landlord.

ARTICLE 23

TENANT PARKING

Subject to the terms of this Article 23, Tenant shall be entitled to use up to
the number and type of parking spaces set forth in Section 10 of the Summary,
which parking spaces are located in the applicable portions of the Parking Area
depicted on Exhibit I attached hereto. Tenant shall have the right, at its sole
cost and expense, to mark (using Project standard paint) as Tenant’s “reserved”
parking spaces those twenty-one (21) exclusive parking spaces located
immediately adjacent to the front of the Building designated on Exhibit I
attached hereto as “Reserved”.

 

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Landlord shall have no enforcement obligations pertaining to the exclusive
parking spaces described in Section 10 of the Summary (for example, Landlord
shall not be obligated to prevent other tenants of the Project and/or other
visitors from parking in such parking spaces nor shall Landlord be obligated to
cause to be removed any vehicles belonging to other tenants of the Project
and/or other visitors that are parked in such parking spaces); provided,
however, that if Tenant determines, in its reasonable discretion, at any time
during the Lease Term, that other tenants of the Project and/or other third
parties are using such exclusive parking spaces, then Tenant shall have the
right, upon written notice to Landlord, to require Landlord, at Tenant’s sole
cost and expense, to take reasonable actions (but in no event shall Landlord be
required to bring any legal action against any such other tenants and/or third
parties) as may be reasonable under the circumstances in order to preserve the
exclusivity of such exclusive parking spaces (e.g., retaining a parking
attendant to monitor the use of such exclusive parking spaces); provided
further, however, that in no event shall Landlord be liable to Tenant if other
tenants of the Project and/or other third parties use such reserved parking
spaces notwithstanding any such action undertaken by Landlord. During the Lease
Term (as may be extended), Tenant shall not be obligated to pay parking charges
for such parking spaces allotted to Tenant. Tenant’s continued right to use the
Parking Area is conditioned upon (i) Tenant abiding by (A) all reasonable and
non-discriminatory rules and regulations which are prescribed by Landlord
(and/or any common area association of the Project having rights over the
Parking Areas) from time to time for the orderly operation and use of the
Parking Area, and (B) all recorded covenants, conditions and restrictions now or
hereafter affecting the Building and/or Project (subject, however, to the
restrictions on future covenants, conditions and restrictions under
Section 1.1.3 above), and (ii) Tenant’s commercially reasonable cooperation in
seeing that Tenant’s employees and visitors also comply with such rules and
regulations and covenants, conditions and restrictions. Landlord specifically
reserves the right, from time to time, to change the size, configuration,
design, layout, location and all other aspects of the Parking Area, and Tenant
acknowledges and agrees that Landlord, from time to time, may, without incurring
any liability to Tenant and without any abatement of Rent under this Lease
temporarily close-off or restrict access to the Parking Area, or temporarily
relocate parking to other parking structures and/or surface parking areas within
a reasonable distance from the Parking Area, for purposes of permitting or
facilitating any such construction, alteration or improvements or to accommodate
or facilitate renovation, alteration, construction or other modification of
other improvements or structures located on the Project, but only so long as the
same does not result in an Adverse Condition. Landlord may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to Landlord. The
rights of Tenant to park in the Parking Area may not be transferred, assigned,
subleased or otherwise alienated by Tenant without Landlord’s prior written
approval, except to sublessees of the Premises and/or any assignee of this Lease
pursuant to Article 14 above.

ARTICLE 24

MISCELLANEOUS PROVISIONS

24.1 Terms; Captions. The necessary grammatical changes required to make the
provisions hereof apply either to corporations or partnerships or individuals,
men or women, as the case may require, shall in all cases be assumed as though
in each case fully expressed. The captions of Articles and Sections are for
convenience only and shall not be deemed to limit, construe, affect or alter the
meaning of such Articles and Sections.

24.2 Binding Effect. Each of the provisions of this Lease shall extend to and
shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Article 14 above.

24.3 No Waiver. No waiver of any provision of this Lease shall be implied by any
failure of a party to enforce any remedy on account of the violation of such
provision, even if such violation shall continue or be repeated subsequently,
any waiver by a party of any provision of this Lease may only be in writing, and
no express waiver shall affect any provision other than the one specified in
such waiver and that one only for the time and in the manner specifically
stated. No receipt of monies by Landlord from Tenant after the termination of
this Lease shall in any way alter the length of the Lease Term or of Tenant’s
right of possession hereunder or after the giving of any notice shall reinstate,
continue or extend the Lease Term or affect any notice given Tenant prior to the
receipt of such monies, it being agreed that after the service of notice or the
commencement of a suit or after final judgment for possession of the Premises,
Landlord may receive and collect any Rent due, and the payment of said Rent
shall not waive or affect said notice, suit or judgment.

24.4 Modification of Lease; Financials. If Landlord or any current or
prospective mortgagee or ground lessor require execution of a short form of
Lease for recording, containing, among other customary provisions, the names of
the parties, a description of the Premises and the Lease Term, Tenant shall
execute such short form of Lease and to deliver the same to Landlord within ten
(10) days following the request therefor. In addition, upon request from time to
time, Tenant agrees to provide to Landlord, within fifteen (15) business days
after written request, a current balance sheet, statement of income and expenses
and statement of cash flow for Tenant, dated no earlier than one (1) year prior
to such request, certified as accurate by Tenant or, if available, audited
financial statements prepared by an independent certified public accountant with
copies of the auditor’s statement. All such financial statements will be
delivered to Landlord and any such lender or purchaser in confidence and shall
only be used for purposes of evaluating the financial strength of Tenant.
Notwithstanding the foregoing to the contrary, if Tenant is a public company
whose stock is publicly held and traded through a national stock exchange, then
Tenant shall not have the obligation to deliver to Landlord financial statements
as provided hereinabove so long as Tenant’s financial statements are made
readily available to Landlord and can be accessed by the general public via the
internet.

 

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24.5 Transfer of Landlord’s Interest. Landlord has the right to transfer all or
any portion of its interest in the Project, the Building and/or in this Lease,
and upon any such transfer, Landlord shall automatically be released from all
liability under this Lease and Tenant shall look solely to such transferee for
the performance of Landlord’s obligations hereunder after the date of transfer.
The liability of any transferee of Landlord shall be limited to the interest of
such transferee in the Project and such transferee shall be without personal
liability under this Lease, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant. Landlord may also assign its interest in this Lease to a mortgage
lender as additional security but such assignment shall not release Landlord
from its obligations hereunder and Tenant shall continue to look to Landlord for
the performance of its obligations hereunder.

24.6 Prohibition Against Recording. Except as provided in Section 24.4 above,
neither this Lease, nor any memorandum, affidavit or other writing with respect
thereto, shall be recorded by Tenant or by anyone 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.

24.7 Landlord’s Title; Air Rights. Landlord’s title is and always shall be
paramount to the title of Tenant. Nothing herein contained shall empower Tenant
to do any act which can, shall or may encumber the title of Landlord. 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.

24.8 Tenant’s Signs.

24.8.1 Exterior Signage. Subject to the approval of all applicable governmental
authorities, and compliance with all applicable laws, all recorded covenants,
conditions and restrictions affecting the Project and Landlord’s signage
criteria attached hereto as Exhibit G (collectively, the “Signage
Restrictions”), and the terms of this Section 24.8, Tenant shall have the right,
but not the obligation, to install, at Tenant’s cost (subject to partial
reimbursement by Landlord of certain of such costs as expressly provided
hereinbelow) the following: (i) one (1) identification sign on the top of the
south side of the Building (the “South Building Top Sign”) in the exact location
designated on Exhibit G attached hereto as the location for the South Building
Top Sign; (ii) one (1) identification sign on the top of the east side of the
Building (the “East Building Top Sign”, and together with the South Building Top
Sign, collectively, the “Building Top Signs”) in the exact location designated
on Exhibit G attached hereto as the location for the East Building Top Sign; and
(iii) one (1) monument sign for Tenant’s exclusive use in the location
designated on Exhibit G attached hereto as the location for the monument sign
for the Building (the “Tenant’s Monument Sign”, together with the Building Top
Signs, collectively, the “Exterior Signage”). Notwithstanding the foregoing to
the contrary, Landlord shall reimburse Tenant for fifty percent (50%) of the
costs actually incurred and paid for by Tenant in connection with the
installation of Tenant's Monument Sign (but not Tenant’s name and logo on
Tenant’s Monument Sign) within thirty (30) days after Landlord’s receipt of
invoices and paid receipts therefor. Tenant may display only one (1) name and
accompanying logo on each of the Exterior Signage; such single name and
accompanying logo to be placed on each of the Exterior Signage shall be the same
name and accompanying logo on all Exterior Signage, and such name shall be only
“Polycom, Inc.”, subject, however, to Tenant’s right under Section 24.8.1.1
below to change such name and/or accompanying logo on the Exterior Signage to
reflect the name and/or accompanying logo of any assignee to which Tenant’s
entire interest in the Lease has been assigned pursuant to Article 14 above. The
graphics, materials, color, design, lettering, lighting (if applicable), size,
specifications, and manner of affixing of the Exterior Signage shall comply with
the Signage Restrictions and shall be subject to Landlord’s prior approval which
shall not be unreasonably withheld. Tenant shall install and maintain the
Exterior Signage in compliance with all laws and subject to the applicable
provisions of Articles 7 and 8 above. Landlord shall reasonably cooperate with
Tenant, at no cost to Landlord, in obtaining the necessary governmental
approvals and permits for the Exterior Signage.

24.8.1.1 Transferability. The rights to the Exterior Signage are personal to the
Original Tenant, any assignee to which Tenant’s entire interest in the Lease has
been assigned pursuant to Article 14 above, and any subtenant which is
subleasing the entire rentable square feet of the Premises for a sublease term
which is for all of the remainder of the Lease Term pursuant to a sublease
entered into in accordance with Article 14 above (a “Qualified Sublessee”), and
may not be transferred by the Original Tenant, such assignee or such Qualified
Sublessee, as the case may be, or used by anyone else (but any name and/or
accompanying logo change on the Exterior Signage to reflect the name and/or
accompanying logo of any such assignee or Qualified Sublessee, as the case may
be, shall (i) be subject to Landlord’s prior approval, not to be unreasonably
withheld, conditioned or delayed, and (ii) in any event consist of only one
(1) name and accompanying logo). In addition, following the Original Premises
Delivery Date, Tenant shall only have such rights to the Exterior Signage when
the Original Tenant, such assignee or such Qualified Sublessee, as the case may
be, is in actual and physical possession of at least fifty percent (50%) of the
rentable square feet of the Premises then leased by Tenant.

24.8.1.2 Insurance/Maintenance/Removal. Tenant shall be responsible, at its sole
cost and expense, for (i) maintaining insurance on the Exterior Signage as part
of the insurance required to be carried by Tenant pursuant to Article 10 above,
and (ii) the repair, maintenance and replacement, in first-class order and
condition, of the Exterior Signage. Should Tenant fail to perform such
maintenance, repairs and/or replacement, and if such failure continues for
thirty (30) days after written notice from Landlord (or such longer period of
time as is reasonably required for such maintenance, repair and/or replacement
if Tenant commences such work within such 30-day period and thereafter
diligently prosecutes same to completion, or such shorter period of time after
Tenant has received such notice as is reasonably required under the
circumstances in the case of emergency), Landlord may, but need not, perform
such maintenance, repairs and/or replacements, and Tenant shall pay Landlord the
cost thereof, including a percentage of the cost thereof sufficient to reimburse
Landlord for all overhead, general conditions, fees and other out-of-pocket
costs or expenses arising from Landlord’s involvement with such maintenance,
repairs and/or replacements forthwith upon being billed for same. Upon the
expiration or earlier

 

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termination of this Lease (or prior to such expiration or earlier termination,
upon Tenant’s loss of its rights to the Exterior Signage pursuant to
Section 24.8.1.1 above), Tenant shall, at Tenant’s sole cost and expense, cause
to be removed the Building Top Signs (and, if elected by Landlord as described
hereinbelow, Tenant’s Monument Sign), and Tenant shall repair all damage
occasioned thereby and restore the portion of the Building and the Project where
the Building Top Signs (and, if elected by Landlord as described below, Tenant’s
Monument Sign) were located to its original condition prior to the installation
thereof, it being acknowledged, however, that Tenant shall have no obligation to
so remove Tenant’s Monument Sign unless Landlord delivers to Tenant written
notice on or prior to the expiration or earlier termination of this Lease that
Landlord will require Tenant to so remove Tenant’s Monument Sign upon the
expiration or earlier termination of this Lease (or prior to such expiration or
earlier termination, upon Tenant’s loss of its rights to Tenant’s Monument Sign
pursuant to Section 24.8.1.1 above). If Tenant fails to timely remove the
Building Top Signs (or, if elected by Landlord, Tenant’s Monument Sign) and
repair and restore the Building and/or the Project as provided in the
immediately preceding sentence, Landlord may perform such work, and all costs
and expenses incurred by Landlord in so performing such work shall be reimbursed
by Tenant to Landlord within thirty (30) days after Tenant’s receipt of invoice
therefor including interest at the Interest Rate. The immediately preceding
sentence shall survive the expiration or earlier termination of this Lease.

24.8.2 No Other Signs. Except for the Exterior Signage, Tenant may not install
any signs on the exterior or roof of the Building, the 6201 Building or the
common areas of the Project or which can be seen from outside the Building. Any
signs, window coverings, or blinds visible from the exterior of the Premises or
Building are subject to the prior approval of Landlord, in its sole and absolute
discretion; provided, however, that Landlord hereby pre-approves the
installation by Tenant of high quality black-out shades behind the Building
standard window coverings on the first (1st) and sixth (6th) floors of the
Building.

24.9 Relationship of Parties. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship
of principal and agent, partnership, joint venturer or any association between
Landlord and Tenant, it being expressly understood and agreed that neither the
method of computation of Rent nor any act of the parties hereto shall be deemed
to create any relationship between Landlord and Tenant other than the
relationship of landlord and tenant.

24.10 Application of Payments. Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, regardless of Tenant’s designation
of such payments, to satisfy any obligations of Tenant hereunder, in such order
and amounts as Landlord, in its sole discretion, may elect.

24.11 Time of Essence. Time is of the essence of this Lease and each of its
provisions.

24.12 Partial Invalidity. If any term, provision or condition contained in this
Lease shall, to any extent, be invalid or unenforceable, the remainder of this
Lease, or the application of such term, provision or condition to persons or
circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

24.13 No Warranty. In executing and delivering this Lease, Tenant has not relied
on any representation, including, but not limited to, any representation
whatsoever as to the amount of any item comprising Additional Rent or the amount
of the Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants of the Project, at all, on the same level or on the
same basis, or any warranty or any statement of Landlord which is not set forth
herein or in one or more of the Exhibits attached hereto.

24.14 Landlord Exculpation. Notwithstanding anything in this Lease to the
contrary, and notwithstanding any applicable law to the contrary, the liability
of Landlord and the Landlord Parties under this Lease (including any successor
landlord) and any recourse by Tenant against Landlord or the Landlord Parties
shall be limited solely and exclusively to an amount which is equal to the
ownership interest of Landlord in the Project (including any rental, insurance
and/or condemnation proceeds derived therefrom), and 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.

24.15 Entire Agreement. It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease
supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and
any side letter or separate agreement executed by Landlord and Tenant in
connection with this Lease and dated of even date herewith contain all of the
terms, covenants, conditions, warranties and agreements of the parties relating
in any manner to the rental, use and occupancy of the Premises, shall be
considered to be the only agreement between the parties hereto and their
representatives and agents, and none of the terms, covenants, conditions or
provisions of this Lease can be modified, deleted or added to except in writing
signed by the parties hereto. All negotiations and oral agreements acceptable to
both parties have been merged into and are included herein. There are no other
representations or warranties between the parties, and all reliance with respect
to representations is based totally upon the representations and agreements
contained in this Lease.

24.16 Right to Lease. Landlord reserves the absolute right to effect such other
tenancies in the Building, the 6201 Building and/or in any other building and/or
any other portion of the Project as Landlord in the exercise of its sole
business judgment shall determine to best promote the interests 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 Lease Term, occupy any
space in the Building, the 6201 Building or Project.

 

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24.17 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, new and/or unforeseen governmental actions,
civil commotions, fire or other casualty, and other similar causes beyond the
reasonable control of the party obligated to perform, except with respect to the
obligations imposed with regard to any amounts to be paid by either party
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 caused by a Force Majeure. Tenant hereby
expressly acknowledges and agrees that Force Majeure events shall not extend the
Lease Commencement Date or the Must-Take Space Commencement Date.

24.18 Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and for
all those claiming under Tenant all right now or hereafter existing to redeem by
order or judgment of any court or by any legal process or writ, Tenant’s right
of occupancy of the Premises after any termination of this Lease.

24.19 Notices. All notices, demands, statements or communications (collectively,
“Notices”) given or required to be given by either party to the other hereunder
shall be in writing, shall be sent by United States certified or registered
mail, postage prepaid, return receipt requested, or delivered personally (i) to
Tenant at the appropriate address set forth in Section 5 of the Summary, or to
such other place as Tenant may from time to time designate in a Notice to
Landlord; or (ii) to Landlord at the addresses set forth in Section 3 of the
Summary, or to such other firm or to such other place as Landlord may from time
to time designate in a Notice to Tenant. Any Notice will be deemed given on the
date it is mailed as provided in this Section 24.19 or upon the date personal
delivery is made or rejected. If Tenant is notified of the identity and address
of Landlord’s mortgagee or ground lessor, then except in the event of an
emergency or in connection with the exercise by Tenant of its rights under
Section 7.3 above, Tenant shall give to such mortgagee or ground lessor written
notice of any default by Landlord under the terms of this Lease by registered or
certified mail, and such mortgagee or ground lessor shall be given a reasonable
opportunity to cure such default (not to exceed an additional thirty (30) days
after the expiration of Landlord’s applicable cure period, if any, with respect
to such default) prior to Tenant’s exercising any remedy available to Tenant.

24.20 Joint and Several. If there is more than one person or entity executing
this Lease as Tenant, the obligations imposed upon such persons and entities
under this Lease are and shall be joint and several.

24.21 Authority. Each individual executing this Lease on behalf of Tenant hereby
represents and warrants that Tenant is a duly formed and existing entity
qualified to do business in the state in which the Project is located and that
Tenant has full right and authority to execute and deliver this Lease and that
each person signing on behalf of Tenant is authorized to do so. Tenant confirms
that it is not in violation of any executive order or similar governmental
regulation or law, which prohibits terrorism or transactions with suspected or
confirmed terrorists or terrorist entities or with persons or organizations that
are associated with, or that provide any form of support to, terrorists. Tenant
further confirms that it will comply throughout the Term of this Lease, with all
governmental laws, rules or regulations governing transactions or business
dealings with any suspected or confirmed terrorists or terrorist entities, as
identified from time to time by the U.S. Treasury Department’s Office of Foreign
Assets Control or any other applicable governmental entity.

24.22 Jury Trial; Attorneys’ Fees. IF EITHER PARTY COMMENCES LITIGATION AGAINST
THE OTHER FOR THE SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR THE BREACH
HEREOF OR OTHERWISE FOR ENFORCEMENT OF ANY REMEDY HEREUNDER, THE PARTIES HERETO
AGREE TO AND HEREBY DO WAIVE ANY RIGHT TO A TRIAL BY JURY. In the event of any
such commencement of litigation, the prevailing party shall be entitled to
recover from the other party such costs and reasonable attorneys’ fees as may
have been incurred, including any and all costs incurred in enforcing,
perfecting and executing such judgment.

24.23 Governing Law. This Lease shall be construed and enforced in accordance
with the laws of the state in which the Project is located.

24.24 Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or an option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.

24.25 Brokers. Landlord and Tenant each hereby represents and warrants to the
other party that it (i) has had no dealings with any real estate broker or agent
in connection with the negotiation of this Lease, excepting only the real estate
brokers or agents specified in Section 11 of the Summary (collectively, the
“Brokers”), and (ii) knows of no other real estate broker or agent who is
entitled to a commission in connection with this Lease. Landlord shall pay the
brokerage commissions owing to the Brokers in connection with this Lease
pursuant to the terms of a separate written agreement or agreements between
and/or among Landlord and the Brokers. If Landlord fails to timely pay to the
Broker representing Tenant as set forth in Section 11 of the Summary (“Tenant’s
Broker”) any amounts due and payable by Landlord to Tenant’s Broker with respect
to Tenant’s Broker’s representation of Tenant in connection with this Lease
(herein, the “Tenant’s Broker’s Commission”) pursuant to the terms of the
separate written agreement between Landlord and Tenant’s Broker, Tenant may send
a factually correct notice to Landlord of such failure and if Landlord fails to
pay the Tenant’s Broker’s Commission within thirty (30) days following
Landlord’s receipt of such notice, Tenant may, at its option, pay the Tenant’s
Broker’s Commission to Tenant’s Broker and deduct such payment from the Rent
next due and payable by Tenant under this Lease. If the Tenant's Broker’s
Commission is so paid by Tenant to Tenant’s Broker and offset against Rent
pursuant to this Section 24.25, then the Tenant’s Broker’s Commission shall no
longer be owed from Landlord to Tenant’s Broker pursuant to the terms of such
separate written agreement. Each party agrees to indemnify and defend the other
party

 

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against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, and costs and expenses (including
without limitation reasonable attorneys’ fees) with respect to any leasing
commission or equivalent compensation alleged to be owing on account of the
indemnifying party’s dealings with any real estate broker or agent in connection
with this Lease other than the Brokers.

24.26 Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord’s expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord (except as otherwise expressly provided in this
Lease); provided, however, that the foregoing shall in no way impair the right
of Tenant to commence a separate action against Landlord for any violation by
Landlord of the provisions of this Lease which continue beyond the expiration of
all applicable notice and cure periods under this Lease for the benefit of
Landlord and/or any holder of a mortgage or deed of trust covering the Building,
Project or any portion thereof, of whose address Tenant has theretofore been
notified.

24.27 Building Name and Signage. Subject to Tenant’s right to the Exterior
Signage in Section 24.8.1 above, Landlord shall have the right at any time to
change the name(s) of the 6201 Building and Project (other than the Building)
and to install, affix and maintain any and all signs on the exterior and on the
interior of the 6201 Building and any portion of the Project (other than on the
exterior or interior of the Building) as Landlord may, in Landlord’s sole
discretion, desire, provided that in no event may Landlord name the entire
Project after any other tenant. Tenant shall not use the names of the Building,
the 6201 Building or Project or use pictures or illustrations of the Building,
the 6201 Building or Project in advertising or other publicity, without the
prior written consent of Landlord.

24.28 Confidentiality. Tenant acknowledges that the content of this Lease and
any related documents are confidential information. Tenant shall use
commercially reasonable efforts to keep such confidential information strictly
confidential and shall not disclose such confidential information to any person
or entity other than Tenant’s financial, legal, and space planning consultants,
brokers, employees, existing or prospective financial partners or if required by
applicable laws or court order, including in connection with public disclosures
required by applicable laws (including SEC reporting requirements).

24.29 Landlord’s Construction. Except as specifically set forth in this Lease or
in the Tenant Work Letters: (i) Landlord has no obligation to alter, remodel,
improve, renovate, repair or decorate the Premises, Building, the 6201 Building,
the Project, or any part thereof; and (ii) no representations or warranties
respecting the condition of the Premises, the Building, the 6201 Building or the
Project have been made by Landlord to Tenant. Tenant acknowledges that prior to
and during the Lease Term, Landlord (and/or any common area association) will be
completing construction and/or demolition work pertaining to various portions of
the Project, including without limitation, tenant improvements for premises for
other tenants and, at Landlord’s sole election, but subject to the terms and
conditions of this Lease, such other buildings, parking facilities,
improvements, landscaping and other facilities within or as part of the Project
as Landlord (and/or such common area association) shall from time to time desire
(collectively, the “Construction”). In connection with such Construction,
Landlord may, among other things, temporarily (for a commercially reasonable
period of time) erect scaffolding or other necessary structures, limit or
eliminate access to portions of the Project, including portions of the common
areas of the Project, or perform work at the Project, which work may temporarily
(for a commercially reasonable period of time) create noise, dust or leave
debris. Tenant hereby agrees that such Construction pursuant to this
Section 24.29 and Landlord’s actions in connection with such Construction shall
in no way constitute a constructive eviction of Tenant nor entitle Tenant to any
abatement of Rent (except as otherwise provided in Section 6.4 above). Landlord
shall have no responsibility or for any reason be liable to Tenant for any
direct or indirect injury to or interference with Tenant’s business arising from
such Construction, nor shall Tenant be entitled to any compensation or damages
from Landlord for loss of the use of the whole or any part of the Premises or of
Tenant’s personal property or improvements resulting from such Construction or
Landlord’s actions in connection with such Construction, or for any
inconvenience or annoyance occasioned by such Construction or Landlord’s actions
in connection with such Construction; provided, however, that in performing any
Construction (i) prior to Substantial Completion of the Original Premises Tenant
Improvements (as defined in the Original Premises Work Letter) and Substantial
Completion of the Must-Take Space Tenant Improvements, Landlord shall (A) use
commercially reasonable efforts to not cause an Adverse Condition and (B) not
interfere with and/or delay the Substantial Completion of the Original Premises
Tenant Improvements and/or Substantial Completion of the Must-Take Space Tenant
Improvements, and (ii) from and after the Substantial Completion of the of the
Original Premises Tenant Improvements and the Substantial Completion of the
Must-Take Space Tenant Improvements, Landlord shall use commercially reasonable
efforts to not cause an Adverse Condition.

24.30 Emergency Generator.

24.30.1 Emergency Generator. Landlord hereby agrees that, subject to this
Section 24.30, Tenant’s compliance with all applicable laws and all recorded
covenants, conditions and restrictions affecting the Project, and subject to the
approval of all applicable governmental authorities, Tenant shall have the
right, at Tenant’s sole cost and expense, to install one (1) back-up emergency
generator on the pad outside the Building in the location depicted on Exhibit H
attached hereto (the area upon which such generator shall be located shall be
referred to herein as the “Generator Site”). Such generator shall be of such
size and specifications, and include such platforms, fencing, enclosures, sheds
and other related materials and equipment, as shall be approved by Landlord
prior to installation (collectively, the “Emergency Generator”), which approval
shall not be unreasonably withheld. In addition, Tenant shall have the right to
install such connection equipment, such as conduits, cables, risers, feeders and
materials (collectively, the “Generator Connecting Equipment”) in the shafts,
ducts, conduits, chases, utility

 

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closets and other facilities of the Building as is reasonably necessary to
connect the Emergency Generator to Tenant’s other machinery and equipment in the
Premises, subject, however, to the provisions of Section 24.30.2 below. Subject
to Section 24.30.3 below and all of the terms and conditions of this Lease, and
subject to all Laws and such reasonable rules and regulations as Landlord may
impose from time to time, Tenant shall also have the right of access twenty-four
(24) hours per day, seven (7) days per week to the areas where the Emergency
Generator and/or any Generator Connecting Equipment (all collectively referred
to herein as the “Generator Equipment”) are located for the purposes of
maintaining, repairing, testing and replacing the same.

24.30.2 Generator Equipment. The installation of the Generator Equipment shall
constitute an Alteration and shall be performed in accordance with and subject
to the provisions of Article 8 above, including, without limitation, Tenant’s
obligation to obtain Landlord’s prior consent to the size and other
specifications of the Generator Equipment, and the Generator Equipment shall be
treated for all purposes of this Lease as if the Generator Equipment were
Tenant’s personal property. In no event shall Tenant be permitted to void any
warranties pertaining to the Building or Project in connection with the
installation of the Generator Equipment. For the purposes of determining
Landlord’s and Tenant’s respective rights and obligations with respect to
Tenant’s use of the Generator Site as provided herein, the Generator Site shall
be deemed to be a portion of Tenant’s Premises to the extent appropriate;
consequently, all of the provisions of this Lease respecting Tenant’s
obligations hereunder shall apply to the installation, use and maintenance of
the Generator Site by Tenant (including, without limitation, provisions relating
to compliance with requirements as to insurance, indemnity, repairs and
maintenance), and all such provisions shall also apply, to the extent
appropriate, to the installation, use and maintenance of the Generator
Equipment. Landlord shall have no obligation to make any changes, improvements
or alterations to the Generator Site. Tenant, at Tenant’s sole cost and expense,
shall maintain the Generator Equipment in first class condition, order and
repair and install such enclosures, fencing and other protective equipment on or
about the Generator Equipment as Landlord may reasonably determine.

24.30.3 Tenant’s Covenants. Tenant shall install, use, maintain and repair the
Generator Equipment so as not to damage or interfere with the operation of the
Project, any portion thereof, including, without limitation, the Generator Site,
the Systems and Equipment of the Building and/or Project, and any other
generators or power sources or similar equipment located in or on the Building
and/or Project; and Tenant hereby agrees to indemnify, defend and hold Landlord
harmless from and against any and all Claims arising out of Tenant’s failure to
comply with the provisions of this Section 24.30.

24.30.4 Landlord’s Obligations. Landlord shall not have any obligations with
respect to the Generator Site, the Generator Equipment or compliance with any
requirements relating thereto, nor shall Landlord be responsible for any damage
that may be caused to the Generator Equipment, except to the extent caused by
the negligence or willful misconduct of Landlord or any of the Landlord Parties
and not insured or required to be insured by Tenant under this Lease. Landlord
makes no representation that the Generator Equipment will be able to supply
sufficient power to the Premises, and Tenant agrees that Landlord shall not be
liable to Tenant therefor.

24.30.5 Repairs. Tenant shall (i) be solely responsible for any damage caused as
a result of the Generator Equipment, (ii) promptly pay any tax, license or
permit fees charged pursuant to any requirements in connection with the
installation, maintenance or use of the Generator Equipment and comply with all
precautions and safeguards recommended by all governmental authorities, and
(iii) make necessary repairs, replacements to or maintenance of the Generator
Equipment and Generator Site in order to keep the same in good order, condition
and repair. Tenant shall have the work which is Tenant’s obligation to perform
under this Section 24.30 (including, without limitation, all installation,
modification and maintenance of the Generator Equipment) performed promptly and
diligently in a good, workmanlike manner, by contractors and subcontractors
approved by Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed.

24.30.6 Installation. Tenant shall install and operate the Generator Equipment
in compliance with all applicable laws and all recorded covenants, conditions
and restrictions affecting the Project. Prior to the installation of the
Generator Equipment, or the performance of any modifications or changes thereto,
Tenant shall comply with the following:

(i) Tenant shall submit to Landlord in writing all plans for such installations,
modifications or changes for Landlord’s approval, which approval shall not be
unreasonably withheld;

(ii) prior to commencement of any work, Tenant shall obtain the required
approvals of all federal, state and local governmental authorities; Tenant shall
promptly deliver to Landlord written proof of compliance with all applicable
laws and all recorded covenants, conditions and restrictions affecting the
Project in connection with any work related to the Generator Equipment,
including, but not limited to, a signed-off permit from the City of San Jose;

(iii) all of such work shall conform to Landlord’s reasonable design
specifications for the Project, Building and the Generator Site and Landlord’s
requirements, including, but not limited to, weight and loading requirements,
and shall not adversely affect the structural components of the Building or
interfere with any of the Systems and Equipment located in, upon or serving the
Project, Building or the Generator Site; and

(iv) the Generator Equipment shall be clearly marked to show Tenant’s name,
address, telephone number and the name of the person to contact in case of
emergency.

24.30.7 Hazardous Materials. Tenant shall not use any Hazardous Materials in
connection with the Generator Equipment, except that Tenant may use diesel fuel
stored in a double walled steel tank (the “Fuel

 

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Tank”) contained within the Emergency Generator (the exact location and size of
which Fuel Tank shall be approved by Landlord), as long as such fuel and Fuel
Tank are kept, maintained and used in accordance with all applicable Laws and
the highest safety standards for such use, and so long as such fuel is always
stored within the Fuel Tank and is not used or stored in any area outside of the
Emergency Generator. Tenant shall promptly, at Tenant’s expense, take all
investigatory and all remedial action required by applicable laws for the
cleanup of any spill, release or other contamination of the Generator Site, the
Building and/or the Project to the extent caused by Tenant’s use of the
Generator Equipment (including, without limitation, the fuel for the Emergency
Generator), or pertaining to or involving any such fuel or other Hazardous
Materials brought onto the Generator Site during the Lease Term by Tenant or any
of Tenant’s agents, employees, contractors, licensees or invitees. Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all Claims
arising out of or involving any Hazardous Materials brought onto the Generator
Site by or for Tenant in connection with Tenant’s activities under this Section
24.30. Tenant’s obligations shall include, but not be limited to, the effects of
any contamination or injury to person, property or the environment created or
suffered by Tenant or any of Tenant’s agents, employees, licensees or invitees,
and the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.

24.30.8 Security. Physical security of the Generator Site and the Generator
Equipment is the sole responsibility of Tenant, who shall bear the sole cost,
expense and liability of any security services, emergency alarm monitoring and
other similar services in connection therewith, provided that Landlord shall
allow Tenant access to the Generator Site at all times sufficient for Tenant to
provide appropriate security services for the Generator Site and the Generator
Equipment. Landlord shall not be liable to Tenant for any direct, indirect,
consequential or other damages arising out of or in connection with the physical
security, or lack thereof, of the Generator Site and/or Generator Equipment.

24.30.9 Testing. The Generator Equipment shall be routinely tested and inspected
by a qualified contractor selected by Tenant and reasonably approved by
Landlord, at Tenant’s expense. Tenant will provide Landlord with copies of
certificates and other documentation related to the testing of the Generator
Equipment upon Landlord’s request therefor.

24.30.10 Default. If Tenant fails to perform any of its obligations under this
Section 24.30, and does not correct such noncompliance within thirty (30) days
after receipt of notice thereof from Landlord or such longer period as may be
reasonably necessary to correct such noncompliance, so long as Tenant commences
to correct such noncompliance within such 30-day period and thereafter proceeds
with due diligence to correct such noncompliance, then Tenant shall be deemed in
default under this Lease, notwithstanding any other notice or cure provided in
Article 19 above or otherwise in this Lease, and in addition to all other
remedies Landlord may have under this Lease, Tenant shall, upon notice from
Landlord, immediately discontinue its use of that portion of the Generator
Equipment to which such noncompliance relates, and make such repairs and
restoration as required under Section 24.30.11 below with respect thereto.

24.30.11 Removal at End of Term. Upon the expiration of the Lease Term or upon
any earlier termination of this Lease, if elected by Landlord as described
hereinbelow, Tenant shall, subject to the reasonable control of and direction
from Landlord, remove the Generator Equipment, including, without limitation all
electrical switch gear, underground conduit and feeders, architectural enclosure
and/or modifications to the Generator Site, repair any damage caused thereby,
and restore the Generator Site and other facilities of the Building and Project
to their condition existing prior to the installation of the Generator
Equipment, it being acknowledged, however, that (i) Tenant shall have no
obligation to so remove Generator Equipment unless Landlord delivers to Tenant
written notice no later than the date which is thirty (30) days prior to the
expiration or earlier termination of this Lease that Landlord will require
Tenant to so remove the Generator Equipment upon the expiration or earlier
termination of this Lease (or prior to such expiration or earlier termination,
upon Tenant’s loss of its rights under this Section 24.30 pursuant to
Section 24.8.1.3 below), and (ii) in any event, Tenant shall have the right, at
its option, to remove the Generator Equipment at any time on or prior the
expiration or earlier termination of this Lease so long as Tenant promptly
repairs, at Tenant’s expense, any damage caused thereby. Any and all removal of
the Generator Equipment shall be performed by certified and licensed contractors
previously approved in writing by Landlord (which approval shall not be
unreasonably withheld, conditioned or delayed) and in accordance with a
previously approved removal plan, in a workmanlike manner, without any
interference, damage or destruction to any other equipment, structures or
operations at the Generator Site, the Building or the Project and/or any
equipment of other licensees or tenants. If Tenant fails to timely make such
removal and/or restoration, then Landlord may perform such work at Tenant’s
cost, which cost shall be immediately due and payable to Landlord upon Tenant’s
receipt of invoice therefor from Landlord.

24.30.12 Rights Personal. Notwithstanding the foregoing provisions of this
Section 24.30 to the contrary, Tenant’s rights under this Section 24.30: (i) are
personal to the Original Tenant and any assignee to which Tenant’s entire
interest in the Lease has been assigned pursuant to Article 14 above; (ii) may
only be exercised by the Original Tenant or such assignee, as the case may be;
and (iii) may not be transferred to or used by any person or entity other than
the Original Tenant or such assignee, as the case may be, provided that Tenant
may permit subtenants under subleases entered into by Tenant pursuant to Article
14 above to tie their Subject Space into the Emergency Generator.

(SIGNATURES ON NEXT PAGE)

 

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed
the day and date first above written.

 

“Landlord”:

LEGACY III SJ AMERICA CENTER I, LLC,

a Delaware limited liability company

By:  

LEGACY PARTNERS COMMERCIAL, L.P.,

a California limited partnership,

as Property Manager and Agent for Owner

  By:  

LEGACY PARTNERS COMMERCIAL, INC.,

General Partner

    By:  

/s/ DEBRA SMITH

      Debra Smith     Its:   Chief Administrative Officer       DRE #00975555  
    BL DRE #01464134 “Tenant”:

POLYCOM, INC.,

a Delaware corporation

By:  

/s/ ANDREW M MILLER

  Name:  

Andrew M Miller

  Its:  

President and CEO

By:  

/s/ W. BOILEAU

  Name:  

W. Boileau

  Its:  

VP Treasurer

 

*** If Tenant is a CORPORATION, the authorized officers must sign on behalf of
the corporation and indicate the capacity in which they are signing. The Lease
must be executed by the chairman of the board, president or vice president and
the chief financial officer, secretary, assistant treasurer or assistant
secretary, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.

 

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EXHIBIT A-1

OUTLINE OF FLOOR PLAN OF PREMISES

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EXHIBIT A-2

OUTLINE OF FLOOR PLAN OF MUST-TAKE SPACE

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EXHIBIT B-1

ORIGINAL PREMISES WORK LETTER

This Original Premises Work Letter (“Original Premises Work Letter”) sets forth
the terms and conditions relating to the construction of improvements for the
original Premises. All references in this Original Premises Work Letter to the
“Lease” shall mean the relevant portions of the Lease to which this Original
Premises Work Letter is attached as Exhibit B-1.

SECTION 1

BASE, SHELL AND CORE

Landlord has previously constructed the base, shell and core of the original
Premises (the “Original Premises Base, Shell and Core”), and Tenant shall accept
the Original Premises Base, Shell and Core in its current “As-Is” condition
existing as of the date of the Lease and the Original Premises Delivery Date
(subject to the provisions of Section 1.2 of the Lease). Except as otherwise
provided below and in the Must-Take Space Work Letter, Landlord shall not be
obligated to make or pay for any alterations or improvements to the Premises,
the Building or the Project.

SECTION 2

ORIGINAL PREMISES TENANT IMPROVEMENTS

2.1 Original Premises Tenant Improvement Allowance. Tenant shall be entitled to
receive from Landlord a one-time tenant improvement allowance (the “Original
Premises Tenant Improvement Allowance”) in the amount of up to, but not
exceeding $10,040,436.00 (i.e., $57.00 per rentable square foot of the original
Premises), to help Tenant pay for the costs of the initial permitting and
construction of Tenant’s initial improvements which are permanently affixed to
the original Premises (collectively, the “Original Premises Tenant
Improvements”). In no event shall Landlord be obligated to make disbursements
pursuant to this Original Premises Work Letter in a total amount which exceeds
the Original Premises Tenant Improvement Allowance. Tenant shall not be entitled
to receive any cash payment or credit against Rent or otherwise for any portion
of the Original Premises Tenant Improvement Allowance which is not used to pay
for the Original Premises Tenant Improvement Allowance Items (as defined below).
Without limiting the generality of the foregoing, Tenant shall not be entitled
to receive any portion of the Original Tenant Improvement Allowance to pay for
any costs of the design and/or construction management of the Original Premises
Tenant Improvements incurred by Tenant (including, without limitation, any of
the fees of the Original Premises Architect, the Original Premises Engineers [as
such terms are defined below] and other third party consultants retained by
Tenant in connection with the design and construction management of the Original
Premises Tenant Improvements), it being expressly agreed that except as provided
in Section 2.3 below, such costs shall be paid directly by Tenant to the parties
entitled thereto and Landlord shall have no obligations with respect thereto or
liability therefor.

2.2 Disbursement of the Original Premises Tenant Improvement Allowance. Except
as otherwise set forth in this Original Premises Work Letter, the Original
Premises Tenant Improvement Allowance shall be disbursed by Landlord (each of
which disbursement shall be made pursuant to Landlord’s standard disbursement
process and the provisions of Section 4.2 below), only for the following items
and costs (collectively, the “Original Premises Tenant Improvement Allowance
Items”):

2.2.1 Payment of the fees incurred by, and the cost of documents and materials
supplied by, Landlord and Landlord’s consultants in connection with the
preparation and review of the Original Premises Construction Drawings (as
defined below), including, without limitation, Landlord’s internal costs of
reviewing the Original Premises Construction Drawings, provided that in no event
shall the fees described in this Section 2.2.1 exceed $17,000.00;

2.2.2 The payment of plan check, permit and license fees relating to
construction of the Original Premises Tenant Improvements;

2.2.3 The cost of construction of the Original Premises Tenant Improvements,
including, without limitation, contractors’ fees and general conditions, testing
and inspection costs, costs of utilities and trash removal;

2.2.4 The cost of any changes in the Original Premises Base, Shell and Core when
such changes are required by the Original Premises Construction Drawings
(including if such changes are due to the fact that such work is prepared on an
unoccupied basis), such cost to include all direct architectural and/or
engineering fees and expenses incurred in connection therewith;

2.2.5 The cost of any changes to the Original Premises Construction Drawings or
Original Premises Tenant Improvements required by applicable laws and building
codes (collectively, “Code”);

2.2.6 Sales and use taxes and Title 24 fees;

2.2.7 The Original Premises Landlord Supervision Fee (as defined below); and

 

EXHIBIT B-1

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2.2.8 All other costs to be expended by Landlord in connection with the design
and construction of the Original Premises Tenant Improvements.

2.3 Original Premises Test Fit Allowance. In addition to the Original Premises
Tenant Improvement Allowance, Landlord shall provide to Tenant an allowance (the
“Original Premises Test Fit Allowance”) in the amount of up to, but not
exceeding $26,422.20 (i.e., $0.15 per rentable square foot of the original
Premises) to help reimburse Tenant for Tenant’s actual out-of-pocket costs
incurred and paid by Tenant to Tenant’s architect for a pricing test fit of the
original Premises performed prior to the submittal to Landlord of the Original
Premises Final Space Plan, as defined in and pursuant to Section 3.2 below.
Landlord shall disburse the Original Premises Test Fit Allowance to Tenant
within thirty (30) days after the date Tenant delivers to Landlord a request for
disbursement of the Original Premises Test Fit Allowance, together with
reasonably detailed invoices and paid receipts evidencing such costs, subject to
the condition that Tenant deliver such request for payment (and invoices and
paid receipts) on or prior to the Lease Commencement Date. Tenant shall not be
entitled to receive any unused portion of the Original Premises Test Fit
Allowance as credit against rent or otherwise.

2.4 Specifications for Building Standard Components. Landlord has established a
partial list of minimum specifications standards (the “Minimum Specifications”)
for the Building standard components to be used in the design and construction
of the Tenant Improvements in the Premises, which Minimum Specifications are
attached hereto as Schedule 1. The list of Minimum Specifications attached
hereto as Schedule 1 is not a complete list of specified products,
specifications and finishes to be used in the construction of the Tenant
Improvements and accordingly, Tenant shall cause to be described in the Original
Premises Final Working Drawings all products, specifications and finishes to be
used in the construction of the Original Premises Tenant Improvements which are
not otherwise listed on, or which deviate from (pursuant to the last sentence of
this Section 2.4), the Minimum Specifications (the “Non-Listed Specifications
and Finishes”), which Non-Listed Specifications and Finishes shall be subject to
Landlord’s approval pursuant to Section 3.3 below. Unless otherwise agreed to by
Landlord, the portion of the Original Premises Tenant Improvements pertaining to
the products, specifications and finishes specified in the Minimum
Specifications shall comply with the Minimum Specifications. Notwithstanding the
foregoing, except for any Original Premises Tenant Improvements which can be
seen from outside the Building, Tenant may substitute for any specification,
finish and/or product set forth in the Minimum Specifications any specification,
finish and/or product, respectively, of equal or better quality thereto.

SECTION 3

ORIGINAL PREMISES CONSTRUCTION DRAWINGS

3.1 Original Premises Architect/Original Premises Construction Drawings. Tenant
has retained IA Architects as the architect/space planner (the “Original
Premises Architect”) to prepare the Original Premises Construction Drawings. If
Tenant elects to retain an architect other than IA Architects as the Original
Premises Architect to prepare the Original Premises Construction Drawings, such
other architect shall be subject to Landlord’s approval, which approval shall
not be unreasonably withheld. Tenant shall retain engineering consultants
selected by Tenant and approved by Landlord, which approval shall not be
unreasonably withheld (the “Original Premises Engineers”), to prepare all plans
and engineering working drawings relating to the structural, mechanical,
electrical, plumbing, HVAC, lifesafety, and sprinkler work in the original
Premises. All Original Premises Construction Drawings shall comply with the
drawing format and specifications determined by Landlord, and shall be subject
to Landlord’s approval. Tenant and the Original Premises Architect shall verify,
in the field, the dimensions and conditions as shown on the relevant portions of
the “as built” base building plans, and Tenant and the Original Premises
Architect shall be solely responsible for such dimensions and conditions, and
Landlord shall have no responsibility in connection therewith. Landlord’s review
of the Original Premises Construction Drawings as set forth in this Section 3,
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, compliance with
Code or other applicable laws or other like matters. Accordingly,
notwithstanding that any Original Premises 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, but
subject to the provisions of Section 1.2 of the Lease, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Original Premises Construction
Drawings.

3.2 Original Premises Final Space Plan. Promptly following the mutual execution
and delivery of the Lease, Tenant shall cause the Original Premises Architect to
prepare and deliver to Landlord for Landlord’s approval a final space plan for
the Original Premises Tenant Improvements (the “Original Premises Final Space
Plan”), which Original Premises Final Space Plan shall be based, in part, upon
the preliminary conceptual plans attached to the Lease as Exhibit N which
pertain to the floors which comprise the original Premises. The Original
Premises Final Space Plan shall include a layout and designation of all offices,
rooms and other partitioning in the original Premises, their intended use, and
equipment to be contained therein. Landlord shall, within five (5) business days
after Landlord’s receipt of the Original Premises Final Space Plan, either
(i) approve the Original Premises Final Space Plan, or (ii) notify Tenant of
Landlord’s disapproval thereof with detailed reasons of such disapproval
specified. If Landlord notifies Tenant of such disapproval, Tenant shall within
three (3) business days after its receipt of such disapproval (A) cause the
Original Premises Final Space Plan to be revised to correct any deficiencies or
other matters reasonably specified by Landlord in such disapproval notice, and
(B) deliver such revised Original Premises Final Space Plan to Landlord. The
foregoing process shall repeat until the Original Premises Final Space Plan is
approved by Landlord.

 

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3.3 Original Premises Final Working Drawings. Promptly following the approval by
Landlord of the Original Premises Final Space Plan pursuant to Section 3.2
above, Tenant shall cause the Original Premises Architect and the Original
Premises Engineers to complete the architectural and engineering drawings for
the Original Premises Tenant Improvements based upon, and in conformance with,
the Original Premises Final Space Plan approved by Landlord, and cause the
Original Premises Architect to compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow general contractors and subcontractors to bid on the
Original Premises Tenant Improvements and to obtain all applicable permits
therefor (collectively, the “Original Premises Final Working Drawings”), and
shall submit the same to Landlord for Landlord’s approval. Landlord shall,
within five (5) business days after Landlord’s receipt of the Original Premises
Final Working Drawings, either (i) approve the Original Premises Final Working
Drawings, or (ii) notify Tenant of Landlord’s disapproval thereof with detailed
reasons of such disapproval specified. If Landlord notifies Tenant of such
disapproval, Tenant shall within three (3) business days after its receipt of
such disapproval (A) cause the Original Premises Final Working Drawings to be
revised to correct any deficiencies or other matters reasonably specified by
Landlord in such disapproval notice, and (B) deliver such revised Original
Premises Final Working Drawings to Landlord. The foregoing procedure shall
repeat until the Original Premises Final Working Drawings are approved by
Landlord. The Original Premises Final Working Drawings approved by Landlord
pursuant to the foregoing procedure shall be referred to herein as the “Original
Premises Approved Working Drawings”.

3.4 Original Premises Approved Working Drawings. Promptly following the approval
by Landlord of the Original Premises Final Working Drawings pursuant to
Section 3.3 above, Tenant shall submit the Original Premises Approved Working
Drawings to the applicable local governmental agency for all applicable building
permits necessary to allow the Original Premises Contractor (as defined below),
to commence and fully complete the construction of the Original Premises Tenant
Improvements (collectively, the “Original Premises Permits”), and, in connection
therewith, Tenant shall coordinate with Landlord in order to allow Landlord, at
Landlord’s option, to take part in all phases of the permitting process, and
shall supply Landlord, as soon as possible, with all plan check numbers and
dates of submittal. Notwithstanding the foregoing, Tenant hereby agrees that
neither Landlord nor Landlord’s consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the original Premises and
that the obtaining of the same shall be Tenant’s responsibility; provided,
however, that Landlord shall, in any event, cooperate with Tenant in executing
permit applications and performing other ministerial acts reasonably necessary
to enable Tenant to obtain any such permit or certificate of occupancy. No
changes, modifications or alterations in the Original Premises Approved Working
Drawings may be made without the prior written consent of Landlord, which
consent shall not be unreasonably withheld. The Original Premises Final Space
Plan, Original Premises Working Drawings and Original Premises Approved Working
Drawings shall be collectively referred to herein as, the “Original Premises
Construction Drawings”.

SECTION 4

CONSTRUCTION OF THE ORIGINAL PREMISES TENANT IMPROVEMENTS

4.1 Original Premises Contractor. Tenant shall select a general contractor (the
“Original Premises Contractor”) to construct the Original Premises Tenant
Improvements, subject to Landlord’s prior written approval, which approval shall
not be unreasonably withheld, conditioned or delayed (it being agreed that it
shall not be reasonable for Landlord to disapprove of any such designated
general contractor solely because of union or non-union affiliation of such
designated general contractor). Landlord hereby pre-approves the general
contractors listed on Schedule 2 attached hereto. Tenant may, in its discretion,
elect to either (i) select the Original Premises Contractor by competitively
bidding the construction of the Original Premises Tenant Improvements to one
(1) or more general contractors approved by Landlord pursuant to the foregoing
based upon the Original Premises Approved TI Package (as defined below), or
(ii) select the Original Premises Contractor without competitively bidding the
construction of the Original Premises Tenant Improvements. Regardless of whether
or not Tenant elects to competitively bid the construction of the Original
Premises Tenant Improvements, promptly following Landlord’s approval of the
Original Premises Final Working Drawings (or the latest version of the
applicable Original Premises Construction Drawings which have then been prepared
and approved by Landlord if Tenant elects to select the Original Premises
Contractor prior to the completion and approval by Landlord of the Original
Premises Final Working Drawings [herein, the “Original Premises Approved
Preliminary Construction Drawings”]), but in any event prior to commencing the
competitive bid process (or selecting the general contractor without engaging in
a competitive bid process, as the case may be): (A) Tenant, the Original
Premises Architect and the Original Premises Engineers shall prepare and
assemble a package (the “Original Premises TI Package”) comprised of the
Original Premises Approved Working Drawings (or the Original Premises Approved
Preliminary Construction Drawings if Tenant elects to select the Original
Premises Contractor prior to the completion and approval by Landlord of the
Original Premises Final Working Drawings, as the case may be), the construction
contract form (which construction contract form shall be subject to Landlord’s
approval in its reasonable discretion and shall in all events contain (1) a form
of maximum cap on construction costs for the Original Premises Tenant
Improvements, either in the form of a stipulated sum or a cost plus a fee with a
guaranteed maximum price, inclusive of contingencies and allowances, and (2) a
commercially reasonable liquidated damages provision stipulating a sum for which
the general contractor will be liable to Landlord for certain delays caused by
the general contractor in completing the construction of the Original Premises
Tenant Improvements [which liquidated damages provision shall (x) either be
expressly assignable to Tenant separate and apart from the remainder of the
construction contract and/or provide that Tenant is a third party beneficiary of
such liquidated damages provision and expressly provide that Tenant may exercise
Landlord’s rights against the general contractor thereunder, and (y) expressly
provide that Landlord may withhold from any undisbursed retention the amount of
any liquidated damages claimed by Landlord or Tenant, as the case may be, to be
owed under such liquidated damages provision]) and a bid invitation which shall
specify the desired completion schedule for the Original Premises Tenant
Improvements; and (B) Tenant shall submit the Original

 

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Premises TI Package to Landlord for Landlord’s approval, which approval shall
not be unreasonably withheld. Landlord shall, within five (5) business days
after Landlord’s receipt of the Original Premises TI Package, either (I) approve
the Original Premises TI Package, or (II) notify Tenant of Landlord’s reasonable
disapproval thereof with detailed reasons of such reasonable disapproval
specified. If Landlord notifies Tenant of such disapproval, Tenant shall within
three (3) business days after its receipt of such disapproval (a) cause the
Original Premises TI Package to be revised to correct any deficiencies or other
matters reasonably specified by Landlord in such disapproval notice, and
(b) deliver such revised Original Premises TI Package to Landlord. The foregoing
procedure shall repeat until the Original Premises TI Package is approved by
Landlord. The Original Premises TI Package approved by Landlord pursuant to the
foregoing procedure shall be referred to herein as the “Original Premises
Approved TI Package”. If Tenant elects to competitively bid the construction of
the Original Premises Tenant Improvements, then (AA) promptly following
Landlord’s approval of the Original Premises TI Package, Tenant shall put the
Original Premises Approved TI Package out for competitive bid to the general
contractors designated by Tenant and approved by Landlord as provided
hereinabove, (BB) Tenant shall provide Landlord with a summary of the bid
results from all bids received from the bidding general contractors, and a
reconciliation shall be performed by Tenant to adjust inconsistent or incorrect
assumptions so that a like-kind comparison can be made and the low bidder (both
general contractor) determined, and (CC) following Tenant’s performance of such
reconciliation and delivery of such summary of all of such bids to Landlord,
Tenant shall select the Original Premises Contractor and the major trade
subcontractors in its discretion and deliver to Landlord a copy of the bid
received from such selected Original Premises General Contractor (with each
major trade subcontractor’s bids incorporated therein), but Tenant shall consult
with Landlord prior to making such selections.

4.2 Construction of Original Premises Tenant Improvements by Original Premises
Contractor under the Supervision of Landlord.

4.2.1 Original Premises Construction Contract. Following Tenant’s selection of
the Original Premises Contractor pursuant to the provisions of Section 4.1
above, Tenant shall deliver to Landlord, for Landlord’s approval, a proposal
(the “Original Premises Contractor Proposal”) from the Original Premises General
Contractor based upon the Original Premises Approved Working Drawings (or the
Original Premises Approved Preliminary Construction Drawings if Tenant elects to
select the Original Premises Contractor prior to the completion and approval by
Landlord of the Original Premises Final Working Drawings, as the case may be)
setting forth, among other things, the maximum cap on construction costs for the
Original Premises Tenant Improvements, inclusive of allowances and contingencies
(including, without limitation, allowances and contingencies necessary to take
into account the fact that the Original Premises Approved Preliminary
Construction Drawings may not fully depict the Original Premises Tenant
Improvements or are otherwise not sufficient to provide a specific estimate of
the total costs of the construction of the Original Premises Tenant
Improvements). If Landlord approves the Original Premises Contractor Proposal
(such Original Premises Contractor Proposal so approved by Landlord being
referred to herein as the “Approved Original Premises Contractor Proposal”),
then promptly following such approval, Tenant shall concurrently deliver to
Landlord both of the following: (i) a construction contract (the “Original
Premises Construction Contract”) executed by the Original Premises Contractor
substantially in the form of the construction contract form included in the
Original Premises Approved TI Package and approved by Landlord, which Original
Premises Construction Contract shall incorporate the terms of the Approved
Original Premises Contractor Proposal (including, without limitation, the
maximum cap on construction costs for the Original Premises Tenant
Improvements[inclusive of contingencies and allowances] set forth in the
Approved Original Premises Contractor Proposal, and the liquidated damages
provision described in Section 4.1(2) above); and (ii) an estimate of the “soft”
costs of all Original Premises Tenant Improvement Allowance Items incurred or to
be incurred by Tenant in connection with the permitting and construction of the
Original Premises Tenant Improvements which are other than the costs of the
design and/or construction management of the Original Premises Tenant
Improvements incurred or to be incurred by Tenant, which costs Tenant shall be
solely responsible for pursuant to Section 2.1 above. Based upon, and consistent
with, the information provided by Tenant pursuant to clauses (i) and
(ii) hereinabove, Landlord shall provide Tenant with a cost proposal which shall
include, as nearly as possible, the cost of all Original Premises Tenant
Improvement Allowance Items to be incurred by Tenant in connection with the
permitting and construction of the Original Premises Tenant Improvements (the
“Original Premises Cost Proposal”). Tenant shall approve and deliver the
Original Premises Cost Proposal to Landlord within five (5) business days after
Tenant’s receipt thereof. The date by which Tenant must approve and deliver the
Original Premises Cost Proposal shall be referred to herein as the “Original
Premises Cost Proposal Delivery Date.” Within five (5) business days after the
latest to occur of (A) the Original Premises Cost Proposal Delivery Date,
(B) the date upon which Tenant and the Original Premises Escrow Agent (as
defined below) have each executed and delivered to Landlord the Original
Premises Escrow Agreement (as defined below) pursuant to the provisions
Section 4.2.2 below, and (C) Tenant deposits the entire Original Premises
Over-Allowance Amount (as defined below) into the Original Premises Escrow
Account (as defined below) pursuant to the provisions Section 4.2.2 below,
Landlord shall execute the Original Premises Construction Contract and retain
the Original Premises Contractor to construct the Original Premises Tenant
Improvements pursuant thereto.

4.2.2 Original Premises Over-Allowance Amount. The difference between (i) the
amount of the Original Premises Cost Proposal and (ii) the amount of the
Original Premises Tenant Improvement Allowance (less any portion thereof already
disbursed by Landlord, or in the process of being disbursed by Landlord, on or
before the Original Premises Cost Proposal Delivery Date shall be referred to
herein as the “Original Premises Over-Allowance Amount”). Within five
(5) business days after the Original Premises Cost Proposal Delivery Date:
(A) Landlord, Tenant and First American Title Insurance Company (the “Original
Premises Escrow Agent”) shall execute an escrow agreement (the “Original
Premises Escrow Agreement”) in substantially the form attached to the Lease as
Exhibit O; and (B) Tenant shall deposit into the account (the “Original Premises
Escrow Account”) established with the Original Premises Escrow Agent pursuant to
the Original Premises Escrow Agreement the entire amount of the Original
Premises Over-Allowance Amount. Landlord shall have no obligation to execute the
Original Premises Construction Contract or proceed with the construction of the
Original Premises Tenant Improvements unless and until Tenant has executed the
Original Premises Escrow Agreement and Tenant deposits

 

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the Original Premises Over-Allowance Amount into the Original Premises Escrow
Account (it being expressly acknowledged and agreed by Tenant that Landlord
shall not be in default under the Lease or this Original Premises Work Letter
with respect to, nor shall the Lease Commencement Date be affected as a result
of, any delays in the construction of the Original Premises Tenant Improvements
resulting therefrom). During the course of the construction of the Original
Premises Tenant Improvements, following Landlord’s receipt of each invoice for
any Original Premises Tenant Improvement Allowance Items from the Original
Premises Contractor and/or other third parties performing “soft cost” related
work in connection with the permitting and construction of the Original Tenant
Improvements, together with appropriate executed mechanic’s lien releases, if
applicable, and all other information reasonably requested by Landlord (such
invoice, lien releases and other information each being referred to herein as an
“Original Premises TI Invoice), Landlord shall submit such Original Premises TI
Invoice to Tenant for Tenant’s approval, which approval shall not be
unreasonably withheld (and to the extent Landlord and the Original Premises
Contractor [and/or other third parties performing “soft cost” related work in
connection with the Original Tenant Improvements, as the case may be] elect to
schedule a meeting with Landlord to discuss such Original Premises TI Invoice,
then Landlord shall give Tenant reasonable prior notice of such meeting and
shall reasonably cooperate with Tenant in scheduling such meeting and a
representative of Tenant shall be required to attend such meeting). If Tenant
does not deliver to Landlord written notice of Tenant’s approval or reasonable
disapproval of such Original Premises TI Invoice (together with detailed reasons
for such reasonable disapproval and the applicable portion of the Original
Premises TI Invoice of which Tenant reasonable disapproves) within three
(3) business days after Landlord’s delivery to Tenant of such Original Premises
TI Invoice, then Tenant shall be deemed to have approved such Original Premises
TI Invoice. If Tenant approves or is deemed to have approved of such Original
Premises TI Invoice and Landlord approves of such Original Premises TI Invoice,
(each, an “Approved Original Premises TI Invoice), then Landlord shall deliver
to the Original Premises Escrow Agent a request for disbursement to Landlord of
Tenant’s “pro rata share” of the Original Premises Over-Allowance Amount
applicable to such Approved Original Premises TI Invoice (as determined
hereinbelow). If Tenant timely and properly disapproves a portion, but not all,
of any such Original Premises Invoice, then so long as Landlord approves of the
portion of such Original Premises Invoice that has Tenant approved (or is deemed
to have approved) (such portion of an Original Premises Invoice approved or
deemed approved by Tenant and approved by Landlord each being referred to herein
as a “Partially Approved Original Premises TI Invoice)”, then Landlord shall
deliver to the Original Premises Escrow Agent a request for disbursement to
Landlord of Tenant’s “pro rata share” of the Original Premises Over-Allowance
Amount applicable to such Partially Approved Original Premises TI Invoice. If
Tenant timely and properly disapproves of all or any portion of such Original
Premises Invoice, then with respect to the portion of any such Original Premises
Invoice that Tenant timely and properly disapproves, (1) Landlord shall use
commercially reasonable efforts to resolve any disputes with the Original
Premises Contractor (and/or other third parties performing “soft cost” related
work in connection with the Original Tenant Improvements, as the case may be)
detailed in Tenant’s written notice disapproving any portion of the applicable
Original Premises TI Invoice (but in no event shall Landlord be required to
bring any legal action against any the Original Premises Contractor [and/or
other third parties performing “soft cost” related work in connection with the
Original Tenant Improvements, as the case maybe] in connection therewith), but
only to the extent Tenant cooperates in good faith and in a commercially
reasonable manner with Landlord in attempting to resolve such disputes
(including, without limitation, attending meetings scheduled by Landlord and the
Original Premises Contractor in connection with attempting to resolve such
disputes, provided that Landlord shall reasonably cooperate with Tenant in
scheduling such meetings), (2) Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all Claims from the Original Premises
Contractor, any subcontractors, materialmen and/or other third parties providing
materials, labor and/or services and/or performing “soft costs” work in
connection with the permitting and construction of the Original Tenant
Improvements arising out of Tenant’s disapproval of all or any portion of such
Original Premises Invoice and/or the unavailability of the Original Premises
Over-Allowance Amount as a result thereof, and (3) if any liens are recorded
against the Project, the Building and/or the Premises as a result of Tenant’s
disapproval of all or any portion of such Original Premises Invoice and/or the
unavailability of the Original Premises Over-Allowance Amount as a result
thereof, then (x) Tenant shall cause such lien(s) to be released and removed of
record by payment or posting of a statutory bond within twenty (20) days after
Tenant has received notice from Landlord of such lien, and (y) if Tenant fails
to so cause such lien(s) to be released and removed of record by payment or
posting of a statutory bond within such 20-day period, then notwithstanding the
foregoing provisions of this Section 4.2.2, Landlord shall be permitted to send
a request for disbursement to the Original Premises Escrow Agent of Tenant’s
“pro rata share” of the Original Premises Over-Allowance Amount applicable to
the disapproved portion of such Original Premises TI Invoice. Tenant shall have
no right to object to, nor shall Tenant deliver any notice to the Original
Premises Escrow Agent objecting to or otherwise instructing the Original
Premises Escrow Agent not to comply with, any request for disbursement delivered
by Landlord to the Original Premises Escrow Agent. For purposes hereof,
(I) Landlord’s “pro rata share’ applicable to each such Approved Original
Premises TI Invoice (or Partially Approved Original Premises TI Invoice, as the
case may be) shall equal the Original Premises Tenant Improvement Allowance
divided by the sum of (a) the Original Premises Tenant Improvement Allowance,
plus (b) the Original Premises Over-Allowance Amount, and (II) Tenant’s “pro
rata share” applicable to each such Approved Original Premises TI Invoice (or
Partially Approved Original Premises TI Invoice, as the case may be) shall equal
the Original Premises Over-Allowance Amount divided by the sum of (a) the
Original Premises Tenant Improvement Allowance, plus (b) the Original Premises
Over-Allowance Amount. If, after the Original Premises Cost Proposal Delivery
Date, any additional costs of the Original Premises Tenant Improvements arise
(including, without limitation, as a result of the costs of the Original
Premises Tenant Improvements set forth on the Original Premises Approved Working
Drawings being in excess of the costs of the Original Premises Tenant
Improvements set forth on the Original Premises Approved Preliminary
Construction Drawings, if applicable, and/or any change orders to the Original
Premises Approved Working Drawings), (xx) such additional costs shall be added
to the Original Premises Cost Proposal and shall be deposited by Tenant into the
Original Premises Escrow Account within ten (10) business days after Landlord’s
request therefor to the extent such additional costs increase the Original
Premises Over-Allowance Amount previously set forth in the Original Premises
Cost Proposal, and (yy) Landlord’s and Tenant’s corresponding “pro rata shares”
shall be adjusted to take into account such increase in the Original Premises
Over-Allowance Amount. Following Landlord’s receipt from the Original Premises
Escrow Agent of Tenant’s “pro rata share” applicable to such Approved Original
Premises TI Invoice (or Partially Approved Original Premises TI Invoice, as

 

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the case may be), Landlord shall pay to the appropriate party entitled thereto
Landlord’s “pro rata share’ and Tenant’s “pro rata share” applicable to such
Approved Original Premises TI Invoice (or Partially Approved Original Premises
TI Invoice, as the case may be), less, with respect to payments made to the
Original Premises Contractor, a ten percent (10%) retention on the entire amount
of such Approved Original Premises TI Invoice (or Partially Approved Original
Premises TI Invoice, as the case may be), and not only such Landlord’s “pro rata
share”. Tenant shall be solely responsible for the payment of the escrow fee
charged by the Original Premises Escrow Agent in connection with the Original
Premises Escrow Agreement and the management of the Original Premises Escrow
Account, which escrow fee shall be an amount equal to $1,000.00. Following
completion of the Original Premises Tenant Improvements and Landlord’s receipt
of all appropriate mechanic’s lien releases, Landlord shall: (AA) deliver any
undisbursed retention to the Original Premises Contractor (less any amount
withheld therefrom by Landlord as permitted under the liquidated damages
provision of the Original Premises Construction Contract); and (BB) deliver to
Tenant a final cost statement which shall indicate the final costs of the
Original Premises Tenant Improvement Allowance Items (the “Original Premises
Final Cost Statement”). If the Original Premises Final Cost Statement indicates
that Tenant has underpaid the Original Premises Over-Allowance Amount, then
within thirty (30) days after Tenant’s receipt of such statement, Tenant shall
deliver to Landlord the amount of such underpayment. If the Original Premises
Final Cost Statement indicates that Tenant has overpaid the Original Premises
Over-Allowance Amount, then within five (5) business days after Landlord’s
delivery of the Final Cost Statement to Tenant, Landlord shall deliver to the
Original Premises Escrow Agent a request for disbursement to Tenant of such
overpayment pursuant to the provisions of the Original Premises Escrow Agreement
(it being agreed that to the extent Landlord receives any amounts from the
Original Premises Escrow Agent attributable to such overpayment, Landlord shall
promptly remit such amounts to Tenant).

4.2.3 Landlord Supervision. Tenant acknowledges that following the mutual
execution and delivery of the Original Premises Construction Contract by
Landlord and the Original Premises Contractor, Landlord shall supervise the
construction by the Original Premises Contractor, and Landlord shall be entitled
to a construction supervision and management fee (the “Original Premises
Landlord Supervision Fee”) in an amount equal to $176,148.00 (i.e., $1.00 per
rentable square foot of the original Premises), which amount shall be deducted
from the Original Premises Tenant Improvement Allowance on a monthly basis in
six (6) equal monthly installments commencing upon the construction of the
Original Premises Tenant Improvements. Notwithstanding the foregoing, no
Original Premises Landlord Supervision Fee shall be charged by Landlord if and
to the extent Legacy Partners CDS, Inc. is retained as the Original Premises
Contractor. The construction supervision and management services for the
Original Premises Tenant Improvements shall include the services listed on
Schedule 3 attached hereto.

4.2.4 Contractor’s Warranties and Guarantees. Landlord hereby assigns to Tenant
all warranties and guarantees by the Original Premises Contractor relating to
the Original Premises Tenant Improvements, which assignment shall be on a
non-exclusive basis such that the warranties and guarantees may be enforced by
Landlord and/or Tenant, and Tenant hereby waives all claims against Landlord
relating to, or arising out of the construction of, the Original Premises Tenant
Improvements; provided, however, that Landlord shall, at no cost to Landlord,
use good faith efforts to cooperate with Tenant and assist in any enforcement
action regarding such warranties and guaranties.

4.2.5 Tenant’s Covenants. Tenant hereby indemnifies Landlord for any Claims
and/or delays arising from the actions of the Original Premises Architect and
the Original Premises Engineers in, on or about the original Premises, Building
and/or Project. Within thirty (30) days after completion of construction of the
Original Premises Tenant Improvements (including any punch-list items), Landlord
shall cause the Original Premises Contractor and the Original Premises Architect
to cause a Notice of Completion to be recorded in the office of the Recorder of
the County in which the Building is located in accordance with Section 3093 of
the Civil Code of the State of California or any successor statute and furnish a
copy thereof to Landlord upon recordation, failing which, Landlord may itself
execute and file the same on behalf of Tenant as Tenant’s agent for such
purpose. In addition, Tenant, within sixty (60) days after the Substantial
Completion of the Original Premises Tenant Improvements, shall have prepared and
delivered to the Building management office a copy of the “as built” plans and
specifications (including all working drawings) for the Original Premises Tenant
Improvements, together with a computer disk containing the Original Premises
Approved Working Drawings in AutoCAD format.

SECTION 5

SUBSTANTIAL COMPLETION;

EXTENSION OF LEASE COMMENCEMENT DATE

5.1 Substantial Completion. For purposes of this Lease, “Substantial Completion
of the Original Premises Tenant Improvements” shall occur (and the Original
Premises Tenant Improvements shall be deemed “Substantially Complete”) upon:
(i) the completion of construction of the Original Premises Tenant Improvements
pursuant to the Original Premises Approved Working Drawings, with the exception
of (A) any punch list items that do not materially and adversely affect Tenant’s
use and occupancy of the original Premises and/or materially and adversely
interfere with the installation by Tenant of its cabling, furniture, fixtures
and equipment in the original Premises, and (B) any tenant fixtures,
work-stations, built-in furniture, or equipment to be installed in the original
Premises by Tenant or under the supervision of the Original Premises Contractor;
(ii) the issuance by the applicable government authorities of a certificate of
occupancy, temporary certificate of occupancy, or its equivalent (including,
without limitation, a final inspection sign-off by the City of San Jose)
permitting occupancy of the original Premises; and (iii) the issuance by the
Original Premises Architect of a “Certificate of Substantial

 

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Completion” certifying that the Original Premises Tenant Improvements have been
substantially completed in accordance with the Original Premises Approved
Working Drawings. Within five (5) days after the date of Substantial Completion
of the Original Premises Tenant Improvements, Landlord’s and Tenant’s respective
representatives shall inspect the original Premises and identify the punch-list
items of the Original Premises Tenant Improvements and jointly prepare a written
list of such punch-list items. Landlord shall cause the Original Premises
Contractor to diligently complete the punch-list items set forth on such list as
soon as reasonably possible thereafter; provided, however, that in no event
shall the completion or non-completion of such punch-list items have any effect
on the Lease Commencement Date. Landlord shall, however, be under no obligation
to repair any damage caused by Tenant in connection with Tenant’s move into the
original Premises, the exercise by Tenant of its rights under Section 6.1 below
and/or otherwise caused by Tenant, all of which shall be repaired by Tenant at
Tenant’s cost.

5.2 Extension of Lease Commencement Date for Original Premises Permit Delays.
The Lease Commencement Date shall be the date determined pursuant to Section 7.2
of the Summary attached to the Lease, notwithstanding the fact that Landlord may
not have delivered possession of the original Premises to Tenant with the
Original Premises Tenant Improvements Substantially Complete as of the Lease
Commencement Date. Notwithstanding the foregoing, to the extent that Substantial
Completion of the Original Premises Tenant Improvements is actually delayed
beyond May 1, 2012 as a result of any Original Premises Permit Delays (as
defined below), then, subject to the restrictions and limitations contained
hereinbelow, the Lease Commencement Date shall be extended day for day by the
number of days of such Original Premises Permit Delays (but in no event shall
the Lease Commencement Date be delayed pursuant to this Section 5.2 beyond the
date Tenant commences business operations in the original Premises). As used
herein, “Original Premises Permit Delays” shall mean the failure by the
applicable local governmental authorities to issue the Original Premises Permits
within sixty (60) days after the date upon which Tenant originally submits the
Original Premises Approved Working Drawings for “plan check” to such applicable
local governmental authorities for such Original Premises Permits, except that
such 60-day period shall be extended day for day for each day of delay in the
issuance of the Original Premises Permits resulting from Tenant Caused Original
Premises Permit Delays (as defined hereinbelow), and an Original Premises Permit
Delay shall not be deemed to have occurred unless the applicable local
governmental authorities has failed to issue the Original Premises Permits
within such 60-day period, as so extended by such Tenant Caused Original
Premises Permit Delays. As used herein, “Tenant Caused Original Premises Permit
Delays” shall mean delays in the issuance of the Original Premises Permits by
the applicable local governmental authorities resulting from (i) the applicable
local governmental authorities requesting revisions to the Original Premises
Approved Working Drawings more than two (2) times, (ii) Tenant’s failure to
cause the Original Premises Approved Working Drawings to be revised and
resubmitted to the applicable local governmental authorities within five
(5) business days after the applicable governmental authorities’ request for
such revisions, (iii) changes in the Original Premises Approved Working Drawings
requested or required by Tenant after the Original Premises Approved Working
Drawings have been submitted to the applicable local governmental authorities,
(iv) changes to the Original Premises Base, Shell and Core required by the
Original Premises Approved Working Drawings, and (v) any other negligent and/or
bad faith acts or omissions of Tenant, its agents and/or employees.

SECTION 6

MISCELLANEOUS

6.1 Tenant’s Entry Into the Original Premises Prior to Substantial Completion.
Subject to the terms hereof, Landlord shall allow Tenant access to the original
Premises following the mutual execution and delivery of this Lease for the sole
purpose of Tenant installing equipment and/or fixtures (including Tenant’s data
and telephone equipment and cabling) in the original Premises. In connection
with any such entry, Tenant acknowledges and agrees that Tenant’s employees,
agents, contractors, consultants, workmen, mechanics, suppliers and invitees
shall (i) use commercially reasonable efforts not to unreasonably interfere with
Landlord or Landlord’s contractors (including the Original Premises Contractor),
agents or representatives in performing work in the Project and/or the Building
(including the Original Premises Tenant Improvements), and (ii) not interfere
with the general operation of the Project. Tenant acknowledges and agrees that
any such entry into and occupancy of the original Premises or any portion
thereof by Tenant or any person or entity working for or on behalf of Tenant
shall be deemed to be subject to all of the terms, covenants, conditions and
provisions of the Lease, excluding only the covenant to pay Rent (until the
occurrence of the Lease Commencement Date). Tenant further acknowledges and
agrees that Landlord shall not be liable for any injury, loss or damage which
may occur to any of Tenant’s work made in or about the original Premises in
connection with such entry or to any property placed therein prior to the Lease
Commencement Date except to the extent caused by the negligence or willful
misconduct of Landlord and/or the Landlord Parties and not insured or required
to be insured by Tenant under the Lease. If the performance of Tenant’s work in
connection with such entry causes extra costs to be incurred by Landlord or
requires the use of any Building services, Tenant shall promptly reimburse
Landlord for such extra costs and/or shall pay Landlord for such Building
services at Landlord’s standard rates then in effect.

6.2 Tenant’s Representative. Tenant has designated Kelly Givens as its sole
representative with respect to the matters set forth in this Original Premises
Work Letter, who shall have full authority and responsibility to act on behalf
of the Tenant as required in this Original Premises Work Letter.

6.3 Landlord’s Representative. Landlord has designated Cy Colburn as its sole
representative with respect to the matters set forth in this Original Premises
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 Original
Premises Work Letter.

 

EXHIBIT B-1

-7-

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

6.4 Time of the Essence in This Original Premises Work Letter. Unless otherwise
indicated, all references herein to a “number of days” shall mean and refer to
calendar days. In all instances where Tenant is required to approve or deliver
an item, if no written notice of approval is given or the item is not delivered
within the stated time period, at Landlord’s sole option, at the end of said
period the item shall automatically be deemed approved or delivered by Tenant
and the next succeeding time period shall commence.

6.5 Tenant’s Lease Default. Notwithstanding any provision to the contrary
contained in the Lease, if an event of default by Tenant of this Original
Premises Work Letter or the Lease has occurred at any time on or before the
Substantial Completion of the Original Premises Tenant Improvements and remains
after the expiration of applicable notice and cure periods, then (i) in addition
to all other rights and remedies granted to Landlord pursuant to the Lease, at
law and/or in equity, Landlord shall have the right to cause the Original
Premises Contractor to suspend the construction of the Original Premises Tenant
Improvements, and (ii) all other obligations of Landlord under the terms of this
Original Premises Work Letter shall be tolled until such time as such default is
cured pursuant to the terms of the Lease. In addition, if the Lease is
terminated prior to the Lease Commencement Date for any reason due to a default
by Tenant as described in Section 19.1 of the Lease or under this Original
Premises Work Letter, in addition to any other remedies available to Landlord
under the Lease, at law and/or in equity, Tenant shall pay to Landlord, as
Additional Rent under the Lease, within five (5) days after Tenant’s receipt of
a statement therefor, any and all costs incurred by Landlord and not reimbursed
or otherwise paid by Tenant through the date of such termination in connection
with the Original Premises Tenant Improvements to the extent planned, installed
and/or constructed as of such date of termination, including, but not limited
to, any costs related to the removal of all or any portion of the Original
Premises Tenant Improvements and restoration costs related thereto.

6.6 Tenant’s Self-Help and Offset Right. Notwithstanding anything to the
contrary set forth in this Original Premises Work Letter or elsewhere in the
Lease, if after the mutual execution and delivery of the Original Premises
Construction Contract by Landlord and the Original Premises Contractor and the
issuance by the appropriate local governmental authorities of the Original
Premises Permits, Landlord fails to (i) diligently proceed with the construction
of the Original Premises Tenant Improvements, and/or (ii) timely disburse any
portion of the Original Premises Tenant Improvement Allowance to the Original
Premises Contractor or other third parties entitled to receive such funds for
Original Premises Tenant Improvement work already performed and/or the Original
Premises Tenant Improvement Costs already incurred, which failure in either case
is not due to or caused by any Force Majeure events or any delays caused by the
acts or omissions of Tenant, or its agents, contractors or employees (including,
without limitation, Tenant’s failure to timely deposit the Original Premises
Over-Allowance Amount into the Original Premises Escrow Account pursuant to
Section 4.2.2 above) and continues for thirty (30) days following Landlord’s
receipt of Tenant’s written notice thereof (herein, the “Original Premises
Outside Performance/Payment Date”), then: (A) in the case of clause
(i) hereinabove, Tenant may proceed to undertake and pay for the cost of such
unperformed work from Tenant’s own funds following (1) Tenant’s delivery of an
additional ten business (10) days’ notice to Landlord that Tenant will be
undertaking and paying for the cost of such unperformed work, and (2) Landlord’s
failure to diligently proceed with such work within such 10 business-day period;
(B) in the case of clause (ii) hereinabove, Tenant may pay such amounts of such
undisbursed portions of the Original Premises Tenant Improvement Allowance
directly to the Original Premises Contractor or other third parties entitled to
receive such funds (provided that in both cases of clauses (A) and
(B) hereinabove, Tenant obtains and delivers to Landlord all appropriate lien
releases with respect to any such amounts prior to Tenant’s payment thereof);
and (C) Tenant shall be entitled to receive from Landlord funds from the
remaining undisbursed balance of the Original Premises Tenant Improvement
Allowance (but not any amounts in excess thereof, other than interest as
expressly provided hereinbelow) to reimburse Tenant for the actual and
documented out-of-pocket costs and expenses incurred and paid for by Tenant in
performing such work or causing such work to be performed pursuant to clause
(A) hereinabove, or paying such undisbursed portions of the Original Premises
Tenant Improvement Allowance directly to the Original Premises Contractor or
other third parties entitled to receive such funds pursuant to clause
(B) hereinabove or to Tenant for any amounts owed by Landlord to Tenant as
reimbursements out of the Original Premises Tenant Improvement Allowance under
this Original Premises Work Letter, as the case may be. Such reimbursement by
Landlord shall be made by the date (the “Original Premises Reimbursement Date”)
which is thirty (30) days after Landlord’s receipt from Tenant of invoices and
paid receipts for such costs and expenses from such third parties so paid by
Tenant (together with all appropriate lien releases with respect to any such
amounts from such third parties performing such work and/or reasonable evidence
that Tenant has incurred out-of-pocket costs for which Landlord is obligated to
reimburse Tenant from the Original Premises Tenant Improvement Allowance). If
Landlord fails to so reimburse Tenant by the Original Premises Reimbursement
Date, then Tenant shall be entitled to offset against the Rent next payable by
Tenant under the Lease the amount of such invoice so paid by Tenant (but the
aggregate amount of any such offsets hereunder shall not exceed the remaining
undisbursed balance of the Original Premises Tenant Improvement Allowance),
together with interest thereon, at the Interest Rate, which shall have accrued
on the amount of each such invoice during the period from and after the date
such amount was paid by Tenant through and including the earlier of (x) the date
Landlord reimburses Tenant for such amount, and (y) the date that Tenant deducts
from Rent such amount; provided, however, that Tenant shall not be entitled to
such offset right while Tenant is in default under the Lease or this Original
Premises Work Letter after expiration of any applicable notice and cure periods;
provided further, however, that notwithstanding the foregoing to the contrary,
if Landlord delivers to Tenant prior to the Original Premises Outside
Performance/Payment Date, a written objection to Tenant’s right to receive any
such reimbursement based upon Landlord’s good faith claim that the applicable
action did not have to be taken by Landlord pursuant to the terms of the Lease
and/or this Original Premises Work Letter, then Tenant shall not be entitled to
such reimbursement and Landlord and Tenant shall instead either meet in person
or communicate by telephone within two (2) business days thereafter to confer
and attempt to resolve the matter. If Landlord and Tenant resolve such matter,
then (I) Landlord and Tenant shall promptly thereafter confirm such resolution
in writing, and (II) if such resolution stipulates that Tenant is entitled to
any such reimbursement, then Landlord shall so reimburse Tenant for the
stipulated amount within thirty (30) days after the date upon which Landlord and
Tenant resolve such matter. If Landlord and Tenant do not resolve such matter
within a reasonable period of time after such meeting (but in any event within
thirty (30) days after such meeting), then Tenant shall not be entitled to such
reimbursement and either Landlord or Tenant may submit such

 

EXHIBIT B-1

-8-

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

matter to arbitration pursuant to the provisions of Section 6.7 below. If Tenant
receives a monetary judgment against Landlord in such arbitration, then Landlord
shall pay the amount of such monetary judgment to Tenant within thirty (30) days
after the date such judgment is issued. If such monetary judgment is not so
timely paid, then, notwithstanding any contrary provision of this Lease, Tenant
shall be entitled to offset against the Rent payable under this Lease the amount
of such monetary judgment together with interest which shall have accrued on
such monetary judgment during the period from and after the day after the
expiration of such 30-day period through and including the date that Tenant
offsets against the Rent the amount of such monetary judgment, at the Interest
Rate. If Tenant undertakes such work pursuant to clause (i) hereinabove,
(a) Landlord shall thereafter have no obligation to complete the Original
Premises Tenant Improvements (but the foregoing shall not relieve Landlord of
its obligations under this Section 6.6), and (b) Tenant shall comply with the
other terms and conditions of this Original Premises Work Letter with respect
thereto, and if such work will affect the Base Building, any common areas or
other areas outside the original Premises and/or the exterior appearance of the
Building or Project (or any portion thereof), Tenant shall use only those
unrelated third party general contractors and subcontractors used by Landlord in
the Building for such work unless such general contractors and subcontractors
are unwilling or unable to timely perform such work at competitive prices, in
which event Tenant may utilize the services of any other qualified general
contractors and subcontractors which normally and regularly perform similar work
in the Comparable Buildings.

6.7 Arbitration Regarding Tenant’s Self-Help Rights. If a party submits a matter
to arbitration in accordance with the provisions of Section 6.6 above, either
party may commence an expedited arbitration proceeding to resolve such matter
pursuant to JAMS. The arbitration shall be conducted in San Jose, California and
decided by a single person (the “Construction Matters Arbitrator”) who (i) is a
retired judge of any of the trial or appellate courts of the State of
California, (ii) has substantial experience in interpreting agreements involving
construction matters related to the leasing of commercial real estate and
practices in and is located in California, and (iii) shall be selected in
accordance with JAMS rules. As promptly as practical after being appointed, the
Construction Matters Arbitrator so chosen shall (A) consider the evidence
submitted by the parties, and (B) upon notice to all parties, determine whether
Tenant’s self-help rights were validly exercised under Section 6.7 above and the
amount of reimbursement, if any, in connection therewith to which Tenant is
entitled under Section 6.7 above, which issues shall be the sole issues to be
determined by the Construction Matters Arbitrator. The decisions of the
Construction Matters Arbitrator shall be final and binding upon the parties and
a judgment thereon may be entered in any court having jurisdiction, except that
either party may contest and obtain judicial review of the reasonableness of the
Construction Matters Arbitrator’s determination of the cost of the arbitration.
The costs of any arbitration pursuant to this Section 6.7 shall be funded fifty
(50%) by each party, and the parties shall bear their own costs and attorneys’
fees in connection with such arbitration. As part of any award issued by the
Construction Matters Arbitrator, the prevailing party in the arbitration shall
be entitled to recover from the non-prevailing party such costs and reasonable
attorneys’ fees as may have been incurred by the prevailing party in connection
with such arbitration.

6.8 Independent Entities. The terms of this Original Premises Work Letter shall
not be deemed modified in any respect in the event Legacy Partners CDS, Inc. is
retained as the Original Premises Contractor, it being understood and agreed
that Landlord and the Original Premises Contractor, regardless of the identity
of the Original Premises Contractor, shall at all times remain separate and
independent entities and the knowledge and actions of one shall not be imputed
to the other.

 

EXHIBIT B-1

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LOGO [g355284ex10_7pg064.jpg]

                           AMERICA CENTER MINIMUM BUILDING STANDARDS AND      

MINIMUM SPECIFICATIONS

FOR TENANT IMPROVEMENT

  

8/1/2011

STANDARD SIZE AND LOCATION OF OFFICE IMPROVEMENTS

GENERAL REQUIREMENT:

Walls shall line up with window mullions

PARTITIONS

A. DEMISING PARTITION AND CORRIDOR WALLS

 

1. 3-5/8" (or match existing)- 20 gauge metal studs - 24" on center maximum from
floor to ceiling grid except for common corridor walIs shall extend from floor
to underside of structure above. (Provide backing for cabinet as required).

Note:

 

  •  

The size of studs within existing spaces shall match with existing.

 

2.

5/8" Type ‘X’: gypsum wallboard one layer each side of studs, fire taped only.

 

3. Height from floor to ceiling grid.

 

4. Seismic bracing per code.

 

5. Two rows of continuous acoustical sealant - bottom tracks. R-11 or R-13 batt
type fiberglass insulation between studs

Note:

 

  •  

All partitions to be paint finished on smooth surfaces GA-214, level 4 smooth
finish.

 

  •  

One hour rated walls where required based on occupancy group.

 

•  

All interior 1-hour corridors, if required to be tunnel construction in
compliance with IBC or State Code requirements for one-hour fire rated assembly.

B. TYPICAL INTERIOR PARTITION (Non-rated)

 

1. 3-5/8" (or match existing) - 25 gauge metal studs - 24" on center maximum.
(Provide backing for wall mounted cabinetry or equipment as required).

Note:

 

  •  

The size of studs within existing spaces shall match with existing

 

2. 5/8" Type ‘X’ gypsum wallboard one layer each side of studs.

 

3. Height from floor to underside of ceiling grid - regular ceiling tiles must
be scribed to drop below the drywall.

 

4. Seismic bracing per code.

 

5. All exterior corners with corner beads. AIl exposed edges finished with metal
trim.

Note:

 

  •  

All partitions to be paint finished on smooth surfaces GA-214, level 4 smooth
finish.

 

  •  

Partitions must connect to building mullions or walls. Mechanical fasteners to
mullions shall not be allowed, provide closed cell neoprene gasket between
mullion and end stud.

C. PERIMETER (EXTERIOR WALL) DRYWALL (if required)

 

1. 2-1/2" - 25 gauge metal studs 24" on center to 6" above suspended ceiling (or
as required by Title-24 for full height envelope, refer to demising wall
specification)

 

2. 5/8" Type ‘X’ gypsum wallboard one layer on one side.

 

3. Height - floor slab to 6" above ceiling grid.

 

If there is a conflict between building standards, actual field conditions and
documents, the drawings and documents take precedence

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AMERICA CENTER MINIMUM BUILDING STANDARDS AND MINIMUM

SPECIFICATIONS FOR TENANT IMPROVEMENT

8/2/2011

 

4. All exterior corners with corner beads.

Note:

 

  •  

All partitions to be paint finished on smooth surfaces GA-214, level 4 smooth
finish.

D. COLUMN FURRING

 

1.

5/8" Type ‘X’ gypsum walIboard, one layer on 2  1/2" - 25 gauge metal studs,
UNO.

 

2. Height - floor slab to 2" above ceiling grid.

 

3. All exterior corners with corner beads.

Note:

 

  •  

All partitions to be paint finished on smooth surfaces GA-214, level 4 smooth
finish.

E. INSULATION

 

1. Insulation at all perimeter walls and roof per specifications

 

2. All building common area walls including corridor and demising walls, to
receive R-11 or R-13 within partition cavity and three feet on either side of
partition over ceiling and at demising wall if not full height.

F. FIRE BLOCKING

 

1. As required by code, use metal studs for all fire blocking.

 

2. Locate as required by code for the proposed tenant space plans.

G. PAINTING

 

1. All gypsum board walls to receive a prime coat (hi-build PVA sealer) and two
(2) coats to cover of ‘carefree’ eggshelI finish paint or equal.

 

2. Semi-gloss paint at all kitchens, break rooms, restrooms and server/copy
rooms.

DOORS, FRAMES AND HARDWARE

A. INTERIOR TENANT DOOR ASSEMBLY (non-rated doors within office suites)

 

1.

Interior doors: shall be a minimum of 3" 0" x9’-0" x 1  3/4" blind end” flush
doors (unless otherwise specified based on existing standards). solid core,
finished with light finish veneer selected by tenant (eg:plain sliced select
white maple), book-match with clear sealer.

 

2. All doors shall be 20 minute fire rated.

 

3. Existing condition: Doors shall be pre-finished and match existing core doors
in finish, material and appearance. Finish all edges. 5" top blocking at doors
w/closers.

 

4. Interior Tenant doorframes to be greater or equal to prefinished rated
Western Integrated frames with factory finish; Color: Satin Aluminum or similar
as selected by tenant (unless otherwise specified based on existing standards).

 

5. Corridor doorframes to Suites to be: Satin Aluminum or similar as selected by
tenant

 

6. Hardware shall be by any manufacturer but greater or equal to what is
specified below: (unless otherwise specified based on existing standards)

 

7.

 

  (a) Interior Tenant Door

 

QTY     

SUBTYPE

  

ITEM DESCRIPTION

  4       Butts (2 pair per door)    Hager   1       Latchset    Schlage “L”
Series Mortise   1       Lockset    Schlage “L” Series Mortise   1       Door
Stop    Glynn Johnson FB13, floor dome   1       Closer    LCN #4111 (where
required)

 

  (b) Suite Entry Doors-Fire rated as required by occupancy and code
requirements.

 

If there is a conflict between building standards, actual field conditions and
documents, the actual drawings and documents take precedence

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AMERICA CENTER MINIMUM BUILDING STANDARDS AND MINIMUM

SPECIFICATIONS FOR TENANT IMPROVEMENT

8/2/2011

 

QTY     

SUBTYPE

  

ITEM DESCRIPTION

  8       Hinges (4 pair per door)    Hager   1       Lockset    Schlage “L”
Mortise   1       Auto Flush Bolt    942 626 DCI   1       Dust Proof Strike   
80 626 DCI   2       Door Stops    Glynn Johnson FB13, floor dome   1      
Closer    LCN #4111 (where required)

B. INTERIOR GLAZING

1 . (a)  1/4" thick clear tempered glass in non-rated, prefinished frames by
Western Integrated frames with aluminum trim. Frame to be factory finished;
Color: Satin Aluminum or to match existing (unless otherwise specified based on
existing standards.)

 

  (b)

 1/4 thick clear tempered glass in non-rated, M-121 glass stops: Color: Satin
Aluminum or to match existing

 

  (c)

 1/4" thick tempered safety glass where required per cods.

 

  (d) Return gypsum board into opening at both sides, provide metal corner bead
all around opening. Finish to match wall.

 

  (e) Tenant may substitute frameless and butt joint glazing systems in place of
this material specification

 

2. Provide two 20 Ga. metal studs fastened at 12" O.C. back-to-back at jambs and
head (minimum) as per detail. Provide seismic brace per code.

Note:

 

  •  

AlI office doors to have minimum 2'-0" wide by full height (inside window frame
to inside window frame) sidelights where possible. At areas where less than
2'-0" is available, provide maximum. Sidelight frames to be integral with
doorframes, (unless otherwise specified based on existing standards)

SUSPENDED ACOUSTICAL CEILING

Note: The following standards apply to new assets within existing assets the
ceiling system to match existing. Tenant ceiling height at a minimum of 9'-0"
(installed at top of top exterior window mullion)

 

1. Grid: USG Donn Fineline DXFF Narrow 9/16" face with 1/8" reveal. Finish:
White Matte with white reveal, Suspension System with wire suspension and
seismic bracing per code. Wall angle: M9

 

1.

Tile: USG 2'x2'x 3/4" Millennia clima plus Tegular White.

 

3. Seismic bracing per code.

 

4. Seismic wires for lighting and electrical to be provided by acoustical
ceiling contractor.

WINDOW COVERINGS (for new and complete retrofit buildings)

 

1. Exterior Window covering – horizontal: 1" mini-blinds as manufactured by
Levelor, series: Riviera Dustguard or match existing.

 

2. Blinds to be sized to fit inside window module. Fasten to top horizontal
mullions only.

 

3. Blinds to be installed with building shell.

 

4. Black out shades mounted inside the existing mini-blinds will be allowed on
the first and sixth floors only.

FIRE SPRINKLER SYSTEM

 

1. A pre-zoned sprinkler will be provided in all areas. Head locations will be
determined by a pre-zoned master layout. Modification of sprinkler locations and
piping, due to specific tenant layout, will be at tenant’s cost. Semi-recessed
pendent sprinkler heads with white escutcheon. Sprinkler heads to be centered in
acoustical ceiling tile.

 

2. Fire Sprinkler coverage light hazard, .33 gpm / 3,000 SF in shell and
modified per improvement.

 

3.

Gyp Board Ceilings: Fully recessed with cap at gypsum board ceiling. Reliable
Model F4FR Concealed automatic sprinkler with  1/2" – 1  1/2" adjustment – White

 

If there is a conflict between building standards, actual field conditions and
documents, the actual drawings and documents take precedence

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AMERICA CENTER MINIMUM BUILDING STANDARDS AND MINIMUM

SPECIFICATIONS FOR TENANT IMPROVEMENT

8/2/2011

 

SIGNAGE

Refer to Legacy Partners signage standards.

TENANT SUITE FINISH MATERIALS

A. PAINT (eggshell finish within tenant spaces, market ready and common areas)

Field Color Sherwim Williams, Kelly moore, Benjamin moore, Frazee or any equal
or better paint. Color to be selected by tenant

Note: Accent colors within open areas may be used at designer’s discretion and
approved by Ownership)

B. FINISH STANDARD

Carpet better or equal to the following:

 

Carpet:       Standard cut pile: Tufted level solid cut carpet, broadloom, 1/10"
gauge, dyed solution, fortis 6.6 nylon with sentry protection, 12' width,
flammability ASTM E 648 class 1 and smoke density ASTM E 662 less than 450,
minimum pile weight 28 oz/yd.    Standard loop: Tufted textured pattern loop
carpet, broadloom, 1/10" gauge, dyed solution, colorstrand nylon with sentry
plus protection, 12' width, flammability ASTM E 648 class 1 and smoke density
ASTM E 662 less than 450, minimum tufted weight 22 oz/yd. Installation:   
Direct Glue Down Rubber Base:    Johnsonite Tightlock –Color: #11 Canvas, #01
snow white or #22 Pearl. 3.25 high, rubber (rolled goods only).    2 1/2" or 4"
based on existing conditions cove base at resilient flooring, (rolled goods
only). Rubber transition strip between carpet and resilient flooring, Color to
match base VCT#1:    Armstrong ‘Stonetex Vinyl Composite Tile, Color #52139
Limestone Beige or #52128    Desert Dust, 12" x 12" x 1/8"

HEATING, VENTILATION AND AIR CONDITIONING

 

1. GENERAL

 

  a. Furnish and install all materials and equipment necessary to provide
complete and usable air conditioning systems in tenant spaces including, but not
necessarily limited to, the following

 

  b. Requirements shall be in accordance with title 24 and all other applicable
codes.

 

2. CEILING DIFFUSER SPECIFICATION

 

  a. Ceiling diffusers shall have perforated face with frame style compatible
with the type of ceiling used.

 

  b. Surface mounted diffusers shall have gaskets to prevent leakage. Diffuser
faceplate shall have concealed hinges and latches. Face plates shall be easily
removable from the frame.

 

  c. Diffusers shall be modular core and shall have curved, adjustable blades
and shall be capable of delivering 1-way,2-way,3-way or 360 degree horizontal
ceiling pattern and be adjustable to obtain a down air pattern. Diffuser must
have high anti-smudge characteristics with center aspiration.

 

  d. Material shall be steel. Finish shall be Standard White baked enamel.

 

If there is a conflict between building standards, actual field conditions and
documents, the actual drawings and documents take precedence

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AMERICA CENTER MINIMUM BUILDING STANDARDS AND MINIMUM

SPECIFICATIONS FOR TENANT IMPROVEMENT

8/2/2011

 

  e. Supply diffusers shall be Titus modular core PMC perforated face-size
24"x24" for lay-in ceiling tile.

 

  f. Return/Exhaust diffusers shall be Kruger

 

  g. Perforated ceiIing diffusers shall be tested in accordance with Air
Diffusion Council (ADC) code 10602R4. Sound data for diffusers shall be
calculated in accordance with International Standard ISO 3741 Comparison Method.

 

  h. The following manufactures shall be considered equal, providing
corresponding models meet specific requirements. Equivalent substituted
equipment named herein shall be submitted for the Architect’s review. Submit
alternate selections at a time of bid listing major equipment.

 

  i. Manual dampers in all drops.

 

ITEM

   MANUFACTURER AIR FILTERS    Kruger or equal MIXING BOXES    Kruger or equal
GRILLES    Kruger or equal

 

3. THERMOSTATS

Thermostats shall be provided for each zone per building standard type and
color.

NOTE:

 

  •  

If Pneumatic controls are building standard use Honeywell Pneumatic, Model
TP970A, 2004 Direct Acting, Range 60° to 90°, Color White

 

4. SUBMITTALS

For Non-Standard Material Lists/Product Data: Within 5-7 days of contract award,
and prior to ordering any materials or equipment, submit for Owner’s review
complete material list including catalogue data of material and products for
worth in this section.

ELECTRICAL

 

1. GENERAL

 

  a. All work, material or equipment shall comply with the codes, ordinance and
regulations of the local government having jurisdiction, including Title 24 and
any participating government agencies having jurisdiction.

 

  b. 110V duplex outlet in demising or interior partitions only, as Manufactured
by Leviton or equal. Color: White

 

  c. Maximum eight outlets per 20 amps 3 phase 4-wire circuit, spacing to meet
code requirements.

 

  d. Contractors to inspect electric room and base building Electrical drawings
to include all necessary equipment, i. e., additional panels and transformers
not provided in the base building if needed. Base building provides one
(1) power panel and one (1) lighting panel per electrical room.

 

2. RACEWAYS

 

  a. Conduit shall be rigid galvanized steel (RGS), electrical metallic tubing
(EMT), metal clad (MC) cable, polyvinyl, chloride (PVC), and flexible or liquid
tight flexible conduit.

 

  b. Type ‘AC’ and ‘NM’ cable are not acceptable.

 

  c. Support per seismic zone 4 requirements.

 

3. WIRING DEVICES

 

  a. Receptacles, toggle switches and cover plates shall be white (dedicated-
gray) – Leviton or equal. Mount so that the center of the receptacles is no less
than 15" AFF.

 

  b. Maximum eight (8) outlets per 20 amp 3 phase 4-wire circuit. Spacing to
meet code requirements

 

  c. All workstation hardwire connections to the building power to be supplied
by tenant.

 

  d. Contractors to inspect electric room and base building electrical drawings
to include all necessary connections.

 

If there is a conflict between building standards, actual field conditions and
documents, the actual drawings and documents take precedence

Page 5

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AMERICA CENTER MINIMUM BUILDING STANDARDS AND MINIMUM

SPECIFICATIONS FOR TENANT IMPROVEMENT

8/2/2011

 

  e. No aluminum wiring is acceptable. AC and NM cable is not to be used.

 

  f. Provide separate neutrals for each circuit. Use stranded wire for each
circuit. Use copper conductors only, no exception.

 

  g. Switch assembly to be Leviton.

 

  h. Motion sensors as required by lighting management system and by Title 24
and any participating government

 

4. TELEPHONE / DATA OUTLETS

 

  a. Phone/data jack with pull string from outlet box to area above T-bar
ceiling with cover plate per office Two (2) boxes to house phone/data jack with
pull string from outlet box to area above T-bar ceiling with cover plate per
large open area. Cover plate finish required: white, supplied by tenant’s Telcom
contractor. Mount so that the center of the receptacles is no less than 15" AFF.

 

  b. Plywood backboard installed as telephone backboard by tenant, brace and
secure to wall. Painted to match wall color.

 

  c. Cable service installation for phone and data outlets by tenant’s
telephone/data vendors at tenant’s cost. Additional outlets and cover plates to
be provided by tenant’s vendors at tenant’s cost.

 

  d. Telephone panel boards to be located within tenant space and to be surface
mounted.

 

5. TRANSFORMERS

 

  a. Transformers shall be UL listed and suitable for the application- NEMA 1 or
3 R.

 

  b. Transformers shall be a minimum of 20% over required capacity and shall be
K-=rated dry type

 

  c. Transformers shall be 480V (primary) – 20by/120V (secondary), rated for 80
C rise above an ambient temperature of 40 C.

 

  d. Support for seismic zone 4 requirements.

 

  e. Acceptable manufacturers shall be General Electric, Cutler-Hammer, Siemens,
Square D, or Westinghouse.

 

6. PANEL BOARDS

 

  a. Panel boards shall be UL listed and suitable for the application- NEMA 1 or
3R.

 

  b. All circuit breakers shall be molded case, bolt-on type.

 

  c. Support per seismic zone 4 requirements.

 

  d. Acceptable manufactures shall be General Electric, Cutler-Hammer, Siemens.
Square D, or Westinghouse

 

7. LIGHT FIXURES

 

  a. Light fixtures shall be 24"x 48"x 3" direct/indirect perforated Diffuser
with two 32 Watt T 5 lamps per fixture size, 1-electronic ballasts. Fixtures
shall be Lightolier or equal 277 V with modular wiring and (1) electronic
ballast (Advance Ballast #VEL-3P32-SC). Fixtures shall match existing in suites
with modular wiring and (1) electronic ballast (verify for 2 or 3 lamp fixture
requirement based on energy efficiency requirement with approximately 40-50 F.C.
at desk height).

 

  b.     

 

  c. Support per seismic zone 4 requirements.

 

  d. Quantities and locations per plans.

 

8. LIGHT CONTROL/SWITCHING

Wall occupancy sensors – Mytec #LP-2-DC

 

9. EXIT SIGNS

 

  a. Edge lite with recessed ceiling mount, floating green letters on a clear
panel with LED Technology, by Dualite or equivalent.

 

  b. Quantities and locations per exiting and lighting plans.

 

  c. Single or double face and directional arrows per lighting plans.

 

If there is a conflict between building standards, actual field conditions and
documents, the actual drawings and documents take precedence

Page 6

SCHEDULE 1

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AMERICA CENTER MINIMUM BUILDING STANDARDS AND MINIMUM

SPECIFICATIONS FOR TENANT IMPROVEMENT

8/2/2011

 

MISCELLANEOUS

 

1. FIRE CAULKING

General Contractor is responsible for all fire caulking required by any and all
work done during the process of construction.

 

2. PLUMBING (if provided)

 

  a) Shall comply with all local codes and handicapped code requirements.

 

  b) Fixture shall be: Manufacturer Elkay, ‘Hospitality sin” #BPSR-2317 –
stainless steel, two faucet holes, or equivalent. Faucet: single lever post
mount bar faucet by ‘Elkay’ #LK-4122 or equivalent.

 

  c) Plumbing bid shall include 5 gallon minimum hot water heater, or insta-hot
with mixer valve including all connections, located within tenant’s suite.

 

3. EQUIPMENT O & M MANUALS AND SUBMITTALS

O & M manuals, parts manuals and submittals should be provided for all equipment
either in indexes and labeled 3-ring binders and or book type manila binders.

 

If there is a conflict between building standards, actual field conditions and
documents, the actual drawings and documents take precedence

Page 7

SCHEDULE 1

TO EXHIBIT B-1

-7-

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AMERICA CENTER MINIMUM BUILDING STANDARDS AND MINIMUM

SPECIFICATIONS FOR TENANT IMPROVEMENT

8/2/2011

 

ADDENDUM:

NON-STANDARD IMPROVEMENTS (IF PROVIDED PER LEASE NEGOTIATIONS)

CABINETRY

 

1. If provided per lease negotiations, upper and lower millwork.

 

2. Plastic laminate horizontal and vertical surfaces.

 

3. Horizontal and Verticals: See individual options under finishes for plastic
laminate specifications,

 

4.

Cabinetry Construction: Designation, APA C-D plugged with exterior glue,  3/4"
thick or  3/4" high pressure particle board. Min. density 45 PSF, U.N.O.

 

5. Cabinetry: Plastic laminate finish, countertops and splashes shall be
constructed in accordance with WIC manual of Millwork, “Custom” grade.

 

6. Hardware:

 

  a. Hinges: Self-closing type, fully concealed when the doors are closed

 

  b. Shall have independent vertical, horizontal and depth adjustment.

 

  c. Shall be steel with nickel-plated finish. Hinges shall be one of the
following products:

Brass America, Inc. Nos. 1200/1201

Julius Blum, Inc. No.91.650

Stanley Hardware Nos. 1511-2/1511-9x or equal.

 

7. Pulls: 4" X 5/16" diameter wire pulls, brushed chrome finish. U. N .O.

 

8. Adjustable Shelf Supports to be hole & pin type, Hafele 282.24.710 5MM steel
pin.

 

9.

Drawers: Provide heavy-duty  3/4 extension drawer slides.

 

10. Mutes: Clear vinyl dot.

 

11. Fasteners and Anchorages: Provide nails, screws, or other anchoring devices
of type, size material and finish suitable for intended use and required to
provide secure

 

12. Casework:

 

  a. Drawer Boxes: Provide sub-front and applied finish fronts securely
fastened, with square comers and self-edges. Provide drawers with metal studs

 

  b. Doors: Flush overlay type with square corners, and self edged. Do not notch
door, cabinet ends or dividers to receive hinges.

 

  c.

Shelves:  3/4" thick for spans up to 35" and 1" thick for spans over 35" up to
48" and adjustable to 1" centers. Do not recess metal shelf standards into end
panels; notch shelving to clear standards.

 

13. Plastic Laminate: Formica #756-58 Natural Maple (base and upper
cabinet-vertical surfaces) or Equal

Formica #7022-58 Natural Canvas (counter-horizontal surfaces) or equal

Other plastic laminates or wood veneers are acceptable substitutions to the
Natural Maple listed above.

END

 

If there is a conflict between building standards, actual field conditions and
documents, the actual drawings and documents take precedence

Page 8

SCHEDULE 1

TO EXHIBIT B-1

-8-

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SCHEDULE 2

TO EXHIBIT B-1

LIST OF PRE-APPROVED GENERAL CONTRACTORS

Devcon

Vance Brown

BN Builders

SC Builders

DPR

Novo Construction

Turner Construction

Hillhouse Construction

GCI Construction

Skyline Construction

Legacy Partners CDS, Inc.

 

SCHEDULE 2

TO EXHIBIT B-1

-1-

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

SCHEDULE 3

TO EXHIBIT B-1

LIST OF CERTAIN CONSTRUCTION SUPERVISION AND MANAGEMENT SERVICES

Landlord’s Property Management and Supervision Services

 

1. Budgeting

 

  •  

Prepare Preliminary Project Budget for All Expenses Charged Against TI Allowance

 

  •  

Prepare Final Project Budget vs. Actual Cost

 

2. Scheduling

 

  •  

Create Preliminary Construction Schedule

 

  •  

Progress Schedule Updates Issued to Team

 

3. Capital Approvals

 

  •  

Create Funding Ratios for Tenant and Landlord Based On Total Budget vs. est.
Overage Amount

 

  •  

Prepare and circulate Capital Requests for Tenants Approvals

 

  •  

Facilitate All Tenant and Landlord Required Approvals

 

  •  

Plans

 

  •  

Change Orders

 

  •  

Notices

 

4. Landlord Coordination

 

  •  

Coordinate Approval Process and Interact with Landlord As Required to Facilitate
the Tenant Improvement Construction Process

 

  •  

Confirm Landlord Delivery Condition Per the Lease

 

5. Construction Management

 

  •  

Weekly Job Sites Visits

 

  •  

Weekly Meeting with Contractor, Landlord & Other Consultants

 

  •  

Reviewing Contractor Pay Application

 

  •  

Monitor Construction Schedule

 

  •  

Reviewing Cost and Scope of all Change Orders

 

  •  

Weekly Construction Reports

 

  •  

Distribute Weekly Meeting Minutes to All Parties

 

  •  

Weekly Overall Budget Updates

 

  •  

Manage Construction Contract

 

  •  

Coordinate with General Contractor to Obtain Final Building Inspection

 

  •  

Manage Release of Construction Funds

 

  •  

Review and Recommend Action on All Changes and Plan Approvals

 

6. Monthly Accounting

 

  •  

Collect, Monitor and Track Lien Notices for all GC and Subcontractors and
Suppliers

 

  •  

Collect, Review and Process all Invoices for project consultants and contractors

 

  •  

Assemble Monthly Draw Requests with Invoices and Releases for Tenant and
Landlord Approvals

 

  •  

Monitor and Reconcile all Payments and Retentions

 

7. Project Close Out

 

  •  

Arrange Final Punch List Walk

 

  •  

Arrange for GC to Record Notice of Completion

 

  •  

Final Close out Budget

 

  •  

Reconcile Landlord Draw Account

 

  •  

Reconcile all Vendor Contracts and Back Charges

 

  •  

Deliver Final Accounting Cost Package

 

  •  

Deliver Project Close Out & Operating Manuals

 

  •  

Oversee & monitor completion of punch list

 

SCHEDULE 3

TO EXHIBIT B-1

-1-

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

EXHIBIT B-2

MUST-TAKE SPACE WORK LETTER

This Must-Take Space Work Letter (“Must-Take Space Work Letter”) sets forth the
terms and conditions relating to the construction of improvements for the
Must-Take Space. All references in this Must-Take Space Work Letter to the
“Lease” shall mean the relevant portions of the Lease to which this Must-Take
Space Work Letter is attached as Exhibit B-2.

SECTION 1

BASE, SHELL AND CORE

Landlord has previously constructed the base, shell and core of the Must-Take
Space (the “Must-Take Space Base, Shell and Core”), and Tenant shall accept the
Must-Take Space Base, Shell and Core in its current “As-Is” condition existing
as of the date of the Lease and the Must-Take Space Delivery Date (subject to
the provisions of Section 1.2 of the Lease). Except as otherwise provided below
and in the Original Premises Work Letter, Landlord shall not be obligated to
make or pay for any alterations or improvements to the Premises, the Building or
the Project.

SECTION 2

MUST-TAKE SPACE TENANT IMPROVEMENTS

2.1 Must-Take Space Tenant Improvement Allowance. Tenant shall be entitled to
receive from Landlord a one-time tenant improvement allowance (the “Must-Take
Space Tenant Improvement Allowance”) in the amount of up to, but not exceeding
$2,092,755.00 (i.e., $57.00 per rentable square foot of the Must-Take Space), to
help Tenant pay for the costs of the initial permitting and construction of
Tenant’s initial improvements which are permanently affixed to the Must-Take
Space (collectively, the “Must-Take Space Tenant Improvements”). In no event
shall Landlord be obligated to make disbursements pursuant to this Must-Take
Space Work Letter in a total amount which exceeds the Must-Take Space Tenant
Improvement Allowance. Tenant shall not be entitled to receive any cash payment
or credit against Rent or otherwise for any portion of the Must-Take Space
Tenant Improvement Allowance which is not used to pay for the Must-Take Space
Tenant Improvement Allowance Items (as defined below). Without limiting the
generality of the foregoing, Tenant shall not be entitled to receive any portion
of the Original Tenant Improvement Allowance to pay for any costs of the design
and/or construction management of the Must-Take Space Tenant Improvements
incurred by Tenant (including, without limitation, any of the fees of the
Must-Take Space Architect, the Must-Take Space Engineers [as such terms are
defined below] and other third party consultants retained by Tenant in
connection with the design and construction management of the Must-Take Space
Tenant Improvements), it being expressly agreed that except as provided in
Section 2.3 below, such costs shall be paid directly by Tenant to the parties
entitled thereto and Landlord shall have no obligations with respect thereto or
liability therefor.

2.2 Disbursement of the Must-Take Space Tenant Improvement Allowance. Except as
otherwise set forth in this Must-Take Space Work Letter, the Must-Take Space
Tenant Improvement Allowance shall be disbursed by Landlord (each of which
disbursement shall be made pursuant to Landlord’s standard disbursement process
and the provisions of Section 4.2 below), only for the following items and costs
(collectively, the “Must-Take Space Tenant Improvement Allowance Items”):

2.2.1 Payment of the fees incurred by, and the cost of documents and materials
supplied by, Landlord and Landlord’s consultants in connection with the
preparation and review of the Must-Take Space Construction Drawings (as defined
below), including, without limitation, Landlord’s internal costs of reviewing
the Must-Take Space Construction Drawings, provided that in no event shall the
fees described in this Section 2.2.1 exceed $3,000.00;

2.2.2 The payment of plan check, permit and license fees relating to
construction of the Must-Take Space Tenant Improvements;

2.2.3 The cost of construction of the Must-Take Space Tenant Improvements,
including, without limitation, contractors’ fees and general conditions, testing
and inspection costs, costs of utilities and trash removal;

2.2.4 The cost of any changes in the Must-Take Space Base, Shell and Core when
such changes are required by the Must-Take Space Construction Drawings
(including if such changes are due to the fact that such work is prepared on an
unoccupied basis), such cost to include all direct architectural and/or
engineering fees and expenses incurred in connection therewith;

2.2.5 The cost of any changes to the Must-Take Space Construction Drawings or
Must-Take Space Tenant Improvements required by Code;

2.2.6 Sales and use taxes and Title 24 fees;

 

EXHIBIT B-2

-1-

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

2.2.7 The Must-Take Space Landlord Supervision Fee (as defined below); and

2.2.8 All other costs to be expended by Landlord in connection with the design
and construction of the Must-Take Space Tenant Improvements.

2.3 Must-Take Space Test Fit Allowance. In addition to the Must-Take Space
Tenant Improvement Allowance, Landlord shall provide to Tenant an allowance (the
“Must-Take Space Test Fit Allowance”) in the amount of up to, but not exceeding
$5,507.25 (i.e., $0.15 per rentable square foot of the Must-Take Space) to help
reimburse Tenant for Tenant’s actual out-of-pocket costs incurred and paid by
Tenant to Tenant’s architect for a pricing test fit of the Must-Take Space
performed prior to the submittal to Landlord of the Must-Take Space Final Space
Plan, as defined in and pursuant to Section 3.2 below. Landlord shall disburse
the Must-Take Space Test Fit Allowance to Tenant within thirty (30) days after
the date Tenant delivers to Landlord a request for disbursement of the Must-Take
Space Test Fit Allowance, together with reasonably detailed invoices and paid
receipts evidencing such costs, subject to the condition that Tenant deliver
such request for payment (and invoices and paid receipts) on or prior to the
Must-Take Space Commencement Date. Tenant shall not be entitled to receive any
unused portion of the Must-Take Space Test Fit Allowance as credit against rent
or otherwise.

2.4 Specifications for Building Standard Components. Landlord has established a
partial list of minimum specifications standards (the “Minimum Specifications”)
for the Building standard components to be used in the design and construction
of the Tenant Improvements in the Premises, which Minimum Specifications are
attached to the Original Premises Work Letter as Schedule 1. The list of Minimum
Specifications attached to the Original Premises Work Letter as Schedule 1 is
not a complete list of specified products, specifications and finishes to be
used in the construction of the Tenant Improvements and accordingly, Tenant
shall cause to be described in the Must-Take Space Final Working Drawings all
products, specifications and finishes to be used in the construction of the
Must-Take Space Tenant Improvements which are not otherwise listed on, or which
deviate from (pursuant to the last sentence of this Section 2.4), the Minimum
Specifications (the “Non-Listed Specifications and Finishes”), which Non-Listed
Specifications and Finishes shall be subject to Landlord’s approval pursuant to
Section 3.3 below. Unless otherwise agreed to by Landlord, the portion of the
Must-Take Space Tenant Improvements pertaining to the products, specifications
and finishes specified in the Minimum Specifications shall comply with the
Minimum Specifications. Notwithstanding the foregoing, except for any Must-Take
Space Tenant Improvements which can be seen from outside the Building, Tenant
may substitute for any specification, finish and/or product set forth in the
Minimum Specifications any specification, finish and/or product, respectively,
of equal or better quality thereto.

SECTION 3

MUST-TAKE SPACE CONSTRUCTION DRAWINGS

3.1 Must-Take Space Architect/Must-Take Space Construction Drawings. Tenant has
retained IA Architects as the architect/space planner (the “Must-Take Space
Architect”) to prepare the Must-Take Space Construction Drawings. If Tenant
elects to retain an architect other than IA Architects as the Must-Take Space
Architect to prepare the Must-Take Space Construction Drawings, such other
architect shall be subject to Landlord’s approval, which approval shall not be
unreasonably withheld. Tenant shall retain engineering consultants selected by
Tenant and approved by Landlord, which approval shall not be unreasonably
withheld (the “Must-Take Space Engineers”), to prepare all plans and engineering
working drawings relating to the structural, mechanical, electrical, plumbing,
HVAC, lifesafety, and sprinkler work in the Must-Take Space. All Must-Take Space
Construction Drawings shall comply with the drawing format and specifications
determined by Landlord, and shall be subject to Landlord’s approval. Tenant and
the Must-Take Space Architect shall verify, in the field, the dimensions and
conditions as shown on the relevant portions of the “as built” base building
plans, and Tenant and the Must-Take Space Architect shall be solely responsible
for such dimensions and conditions, and Landlord shall have no responsibility in
connection therewith. Landlord’s review of the Must-Take Space Construction
Drawings as set forth in this Section 3, 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, compliance with Code or other applicable laws or
other like matters. Accordingly, notwithstanding that any Must-Take Space
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, but subject to the provisions of Section 1.2 of the
Lease, Landlord shall have no liability whatsoever in connection therewith and
shall not be responsible for any omissions or errors contained in the Must-Take
Space Construction Drawings.

3.2 Must-Take Space Final Space Plan. On or before the date which is twelve
(12) months following the Lease Commencement Date, or promptly following
Tenant’s delivery to Landlord of the Must-Take Space Acceleration Notice (if
Tenant so elects to deliver the Must-Take Space Acceleration Notice to Landlord
pursuant to Section 1.4.3 of the Lease), Tenant shall cause the Must-Take Space
Architect to prepare and deliver to Landlord for Landlord’s approval a final
space plan for the Must-Take Space Tenant Improvements (the “Must-Take Space
Final Space Plan”), which Must-Take Space Final Space Plan shall be based, in
part, upon the preliminary conceptual plans attached to the Lease as Exhibit N,
which pertain to the floor which comprises the Must-Take Space. The Must-Take
Space Final Space Plan shall include a layout and designation of all offices,
rooms and other partitioning in the Must-Take Space, their intended use, and
equipment to be contained therein. Landlord shall, within five (5) business days
after Landlord’s receipt of the Must-Take Space Final Space Plan, either
(i) approve the Must-Take Space Final Space Plan, or (ii) notify Tenant of
Landlord’s disapproval thereof with detailed reasons of such disapproval
specified. If Landlord notifies Tenant of such disapproval, Tenant shall within
three (3) business days after its receipt of such disapproval (A) cause the
Must-Take Space Final Space Plan to be revised to correct any deficiencies or
other matters reasonably specified by Landlord in such disapproval notice, and
(B) deliver such revised Must-Take Space Final Space Plan to Landlord. The
foregoing process shall repeat until the Must-Take Space Final Space Plan is
approved by Landlord.

 

EXHIBIT B-2

-2-

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

3.3 Must-Take Space Final Working Drawings. Promptly following the approval by
Landlord of the Must-Take Space Final Space Plan pursuant to Section 3.2 above,
Tenant shall cause the Must-Take Space Architect and the Must-Take Space
Engineers to complete the architectural and engineering drawings for the
Must-Take Space Tenant Improvements based upon, and in conformance with, the
Must-Take Space Final Space Plan approved by Landlord, and cause the Must-Take
Space Architect to compile a fully coordinated set of architectural, structural,
mechanical, electrical and plumbing working drawings in a form which is complete
to allow general contractors and subcontractors to bid on the Must-Take Space
Tenant Improvements and to obtain all applicable permits therefor (collectively,
the “Must-Take Space Final Working Drawings”), and shall submit the same to
Landlord for Landlord’s approval. Landlord shall, within five (5) business days
after Landlord’s receipt of the Must-Take Space Final Working Drawings, either
(i) approve the Must-Take Space Final Working Drawings, or (ii) notify Tenant of
Landlord’s disapproval thereof with detailed reasons of such disapproval
specified. If Landlord notifies Tenant of such disapproval, Tenant shall within
three (3) business days after its receipt of such disapproval (A) cause the
Must-Take Space Final Working Drawings to be revised to correct any deficiencies
or other matters reasonably specified by Landlord in such disapproval notice,
and (B) deliver such revised Must-Take Space Final Working Drawings to Landlord.
The foregoing procedure shall repeat until the Must-Take Space Final Working
Drawings are approved by Landlord. The Must-Take Space Final Working Drawings
approved by Landlord pursuant to the foregoing procedure shall be referred to
herein as the “Must-Take Space Approved Working Drawings”.

3.4 Must-Take Space Approved Working Drawings. Promptly following the approval
by Landlord of the Must-Take Space Final Working Drawings pursuant to
Section 3.3 above, Tenant shall submit the Must-Take Space Approved Working
Drawings to the applicable local governmental agency for all applicable building
permits necessary to allow the Must-Take Space Contractor (as defined below), to
commence and fully complete the construction of the Must-Take Space Tenant
Improvements (collectively, the “Must-Take Space Permits”), and, in connection
therewith, Tenant shall coordinate with Landlord in order to allow Landlord, at
Landlord’s option, to take part in all phases of the permitting process, and
shall supply Landlord, as soon as possible, with all plan check numbers and
dates of submittal. Notwithstanding the foregoing, Tenant hereby agrees that
neither Landlord nor Landlord’s consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the Must-Take Space and that
the obtaining of the same shall be Tenant’s responsibility; provided, however,
that Landlord shall, in any event, cooperate with Tenant in executing permit
applications and performing other ministerial acts reasonably necessary to
enable Tenant to obtain any such permit or certificate of occupancy. No changes,
modifications or alterations in the Must-Take Space Approved Working Drawings
may be made without the prior written consent of Landlord, which consent shall
not be unreasonably withheld. The Must-Take Space Final Space Plan, Must-Take
Space Working Drawings and Must-Take Space Approved Working Drawings shall be
collectively referred to herein as, the “Must-Take Space Construction Drawings”.

SECTION 4

CONSTRUCTION OF THE MUST-TAKE SPACE TENANT IMPROVEMENTS

4.1 Must-Take Space Contractor. Tenant shall select a general contractor (the
“Must-Take Space Contractor”) to construct the Must-Take Space Tenant
Improvements, subject to Landlord’s prior written approval, which approval shall
not be unreasonably withheld, conditioned or delayed (it being agreed that it
shall not be reasonable for Landlord to disapprove of any such designated
general contractor solely because of union or non-union affiliation of such
designated general contractor). Landlord hereby pre-approves the general
contractors listed on Schedule 2 attached to the Original Premises Work Letter.
Tenant may, in its discretion, elect to either (i) select the Must-Take Space
Contractor by competitively bidding the construction of the Must-Take Space
Tenant Improvements to one (1) or more general contractors approved by Landlord
pursuant to the foregoing based upon the Must-Take Space Approved TI Package (as
defined below), or (ii) select the Must-Take Space Contractor without
competitively bidding the construction of the Must-Take Space Tenant
Improvements. Regardless of whether or not Tenant elects to competitively bid
the construction of the Must-Take Space Tenant Improvements, promptly following
Landlord’s approval of the Must-Take Space Final Working Drawings (or the latest
version of the applicable Must-Take Space Construction Drawings which have then
been prepared and approved by Landlord if Tenant elects to select the Must-Take
Space Contractor prior to the completion and approval by Landlord of the
Must-Take Space Final Working Drawings [herein, the “Must-Take Space Approved
Preliminary Construction Drawings”]), but in any event prior to commencing the
competitive bid process (or selecting the general contractor without engaging in
a competitive bid process, as the case may be): (A) Tenant, the Must-Take Space
Architect and the Must-Take Space Engineers shall prepare and assemble a package
(the “Must-Take Space TI Package”) comprised of the Must-Take Space Approved
Working Drawings (or the Must-Take Space Approved Preliminary Construction
Drawings if Tenant elects to select the Must-Take Space Contractor prior to the
completion and approval by Landlord of the Must-Take Space Final Working
Drawings, as the case may be), the construction contract form (which
construction contract form shall be subject to Landlord’s approval in its
reasonable discretion and shall in all events contain (1) a form of maximum cap
on construction costs for the Must-Take Space Tenant Improvements, either in the
form of a stipulated sum or a cost plus a fee with a guaranteed maximum price,
inclusive of contingencies and allowances, and (2) a commercially reasonable
liquidated damages provision stipulating a sum for which the general contractor
will be liable to Landlord for certain delays caused by the general contractor
in completing the construction of the Must-Take Space Tenant Improvements [which
liquidated damages provision shall (x) either be expressly assignable to Tenant
separate and apart from the remainder of the construction contract and/or
provide that Tenant is a third party beneficiary of such liquidated damages
provision and expressly provide that Tenant may exercise Landlord’s rights
against the general contractor thereunder, and (y) expressly provide that
Landlord may withhold from any undisbursed retention the amount of any
liquidated damages claimed

 

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by Landlord or Tenant, as the case may be, to be owed under such liquidated
damages provision]) and a bid invitation which shall specify the desired
completion schedule for the Must-Take Space Tenant Improvements; and (B) Tenant
shall submit the Must-Take Space TI Package to Landlord for Landlord’s approval,
which approval shall not be unreasonably withheld. Landlord shall, within five
(5) business days after Landlord’s receipt of the Must-Take Space TI Package,
either (I) approve the Must-Take Space TI Package, or (II) notify Tenant of
Landlord’s reasonable disapproval thereof with detailed reasons of such
reasonable disapproval specified. If Landlord notifies Tenant of such
disapproval, Tenant shall within three (3) business days after its receipt of
such disapproval (a) cause the Must-Take Space TI Package to be revised to
correct any deficiencies or other matters reasonably specified by Landlord in
such disapproval notice, and (b) deliver such revised Must-Take Space TI Package
to Landlord. The foregoing procedure shall repeat until the Must-Take Space TI
Package is approved by Landlord. The Must-Take Space TI Package approved by
Landlord pursuant to the foregoing procedure shall be referred to herein as the
“Must-Take Space Approved TI Package”. If Tenant elects to competitively bid the
construction of the Must-Take Space Tenant Improvements, then (AA) promptly
following Landlord’s approval of the Must-Take Space TI Package, Tenant shall
put the Must-Take Space Approved TI Package out for competitive bid to the
general contractors designated by Tenant and approved by Landlord as provided
hereinabove, (BB) Tenant shall provide Landlord with a summary of the bid
results from all bids received from the bidding general contractors, and a
reconciliation shall be performed by Tenant to adjust inconsistent or incorrect
assumptions so that a like-kind comparison can be made and the low bidder (both
general contractor) determined, and (CC) following Tenant’s performance of such
reconciliation and delivery of such summary of all of such bids to Landlord,
Tenant shall select the Must-Take Space Contractor and the major trade
subcontractors in its discretion and deliver to Landlord a copy of the bid
received from such selected Must-Take Space General Contractor (with each major
trade subcontractor’s bids incorporated therein), but Tenant shall consult with
Landlord prior to making such selections.

4.2 Construction of Must-Take Space Tenant Improvements by Must-Take Space
Contractor under the Supervision of Landlord.

4.2.1 Must-Take Space Construction Contract. Following Tenant’s selection of the
Must-Take Space Contractor pursuant to the provisions of Section 4.1 above,
Tenant shall deliver to Landlord, for Landlord’s approval, a proposal (the
“Must-Take Space Contractor Proposal”) from the Must-Take Space General
Contractor based upon the Must-Take Space Approved Working Drawings (or the
Must-Take Space Approved Preliminary Construction Drawings if Tenant elects to
select the Must-Take Space Contractor prior to the completion and approval by
Landlord of the Must-Take Space Final Working Drawings, as the case may be)
setting forth, among other things, the maximum cap on construction costs for the
Must-Take Space Tenant Improvements, inclusive of allowances and contingencies
(including, without limitation, allowances and contingencies necessary to take
into account the fact that the Must-Take Space Approved Preliminary Construction
Drawings may not fully depict the Must-Take Space Tenant Improvements or are
otherwise not sufficient to provide a specific estimate of the total costs of
the construction of the Must-Take Space Tenant Improvements). If Landlord
approves the Must-Take Space Contractor Proposal (such Must-Take Space
Contractor Proposal so approved by Landlord being referred to herein as the
“Approved Must-Take Space Contractor Proposal”), then promptly following such
approval, Tenant shall concurrently deliver to Landlord both of the following:
(i) a construction contract (the “Must-Take Space Construction Contract”)
executed by the Must-Take Space Contractor and substantially in the form of the
construction contract form included in the Must-Take Space Approved TI Package
and approved by Landlord, which Must-Take Space Construction Contract shall
incorporate the terms of the Approved Must-Take Space Contractor Proposal
(including, without limitation, the maximum cap on construction costs for the
Must-Take Space Tenant Improvements [inclusive of contingencies and allowances]
set forth in the Approved Must-Take Space Contractor Proposal, and the
liquidated damages provision described in Section 4.1(2) above); and (ii) an
estimate of the “soft” costs of all Must-Take Space Tenant Improvement Allowance
Items incurred or to be incurred by Tenant in connection with the permitting and
construction of the Must-Take Space Tenant Improvements which are other than the
costs of the design and/or construction management of the Must-Take Space Tenant
Improvements incurred or to be incurred by Tenant, which costs Tenant shall be
solely responsible for pursuant to Section 2.1 above. Based upon, and consistent
with, the information provided by Tenant pursuant to clauses (i) and
(ii) hereinabove, Landlord shall provide Tenant with a cost proposal which shall
include, as nearly as possible, the cost of all Must-Take Space Tenant
Improvement Allowance Items to be incurred by Tenant in connection with the
permitting and construction of the Must-Take Space Tenant Improvements (the
“Must-Take Space Cost Proposal”). Tenant shall approve and deliver the Must-Take
Space Cost Proposal to Landlord within five (5) business days after Tenant’s
receipt thereof. The date by which Tenant must approve and deliver the Must-Take
Space Cost Proposal shall be referred to herein as the “Must-Take Space Cost
Proposal Delivery Date.” Within five (5) business days after the latest to occur
of (A) the Must-Take Space Cost Proposal Delivery Date, (B) the date upon which
Tenant and the Must-Take Space Escrow Agent (as defined below) have each
executed and delivered to Landlord the Must-Take Space Escrow Agreement (as
defined below) pursuant to the provisions Section 4.2.2 below, and (C) Tenant
deposits the entire Must-Take Space Over-Allowance Amount (as defined below)
into the Must-Take Space Escrow Account (as defined below) pursuant to the
provisions Section 4.2.2 below, Landlord shall execute the Must-Take Space
Construction Contract and retain the Must-Take Space Contractor to construct the
Must-Take Space Tenant Improvements pursuant thereto.

4.2.2 Must-Take Space Over-Allowance Amount. The difference between (i) the
amount of the Must-Take Space Cost Proposal and (ii) the amount of the Must-Take
Space Tenant Improvement Allowance (less any portion thereof already disbursed
by Landlord, or in the process of being disbursed by Landlord, on or before the
Must-Take Space Cost Proposal Delivery Date shall be referred to herein as the
“Must-Take Space Over-Allowance Amount”). Within five (5) business days after
the Must-Take Space Cost Proposal Delivery Date: (A) Landlord, Tenant and First
American Title Insurance Company (the “Must-Take Space Escrow Agent”) shall
execute an escrow agreement (the “Must-Take Space Escrow Agreement”) in
substantially the form attached to the Lease as Exhibit O; and (B) Tenant shall
deposit into the account (the “Must-Take Space Escrow Account”) established with
the Must-Take Space Escrow Agent pursuant to the Must-Take Space Escrow
Agreement the entire amount of the Must-Take Space Over-Allowance Amount.
Landlord shall have no obligation to execute the Must-Take

 

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Space Construction Contract or proceed with the construction of the Must-Take
Space Tenant Improvements unless and until Tenant has executed the Must-Take
Space Escrow Agreement and Tenant deposits the Must-Take Space Over-Allowance
Amount into the Must-Take Space Escrow Account (it being expressly acknowledged
and agreed by Tenant that Landlord shall not be in default under the Lease or
this Must-Take Space Work Letter with respect to, nor shall the Must-Take Space
Commencement Date be affected as a result of, any delays in the construction of
the Must-Take Space Tenant Improvements resulting therefrom). During the course
of the construction of the Must-Take Space Tenant Improvements, following
Landlord’s receipt of each invoice for any Must-Take Space Tenant Improvement
Allowance Items from the Must-Take Space Contractor and/or other third parties
performing “soft cost” related work in connection with the permitting and
construction of the Must-Take Space Tenant Improvements, together with
appropriate executed mechanic’s lien releases, if applicable, and all other
information reasonably requested by Landlord (such invoice, lien releases and
other information each being referred to herein as an “Must-Take Space TI
Invoice), Landlord shall submit such Must-Take Space TI Invoice to Tenant for
Tenant’s approval, which approval shall not be unreasonably withheld (and to the
extent Landlord and the Must-Take Space Contractor [and/or other third parties
performing “soft cost” related work in connection with the Original Tenant
Improvements, as the case may be] elect to schedule a meeting with Landlord to
discuss such Must-Take Space TI Invoice, then Landlord shall give Tenant
reasonable prior notice of such meeting and shall reasonably cooperate with
Tenant in scheduling such meeting and a representative of Tenant shall be
required to attend such meeting). If Tenant does not deliver to Landlord written
notice of Tenant’s approval or reasonable disapproval of such Must-Take Space TI
Invoice (together with detailed reasons for such reasonable disapproval and the
applicable portion of the Must-Take Space TI Invoice of which Tenant reasonable
disapproves) within three (3) business days after Landlord’s delivery to Tenant
of such Must-Take Space TI Invoice, then Tenant shall be deemed to have approved
such Must-Take Space TI Invoice. If Tenant approves or is deemed to have
approved of such Must-Take Space TI Invoice and Landlord approves of such
Must-Take Space Invoice (each, an “Approved Must-Take Space TI Invoice), then
Landlord shall deliver to the Must-Take Space Escrow Agent a request for
disbursement to Landlord of Tenant’s “pro rata share” of the Must-Take Space
Over-Allowance Amount applicable to such Approved Must-Take Space TI Invoice (as
determined herein below). If Tenant timely and properly disapproves a portion,
but not all, of any such Must-Take Space Invoice, then so long as Landlord
approves of the portion of such Must-Take Space Invoice that has Tenant approved
(or is deemed to have approved) (such portion of an Must-Take Space Invoice
approved or deemed approved by Tenant and approved by Landlord each being
referred to herein as a “Partially Approved Must-Take Space TI Invoice)”, then
Landlord shall deliver to the Must-Take Space Escrow Agent a request for
disbursement to Landlord of Tenant’s “pro rata share” of the Must-Take Space
Over-Allowance Amount applicable to such Partially Approved Must-Take Space TI
Invoice. If Tenant timely and properly disapproves of all or any portion of such
Must-Take Space Invoice, then with respect to the portion of any such Must-Take
Space Invoice that Tenant timely and properly disapproves, (1) Landlord shall
use commercially reasonable efforts to resolve any disputes with the Must-Take
Space Contractor (and/or other third parties performing “soft cost” related work
in connection with the Original Tenant Improvements, as the case may be)
detailed in Tenant’s written notice disapproving any portion of the applicable
Must-Take Space TI Invoice (but in no event shall Landlord be required to bring
any legal action against any the Must-Take Space Contractor [and/or other third
parties performing “soft cost” related work in connection with the Original
Tenant Improvements, as the case maybe] in connection therewith), but only to
the extent Tenant cooperates in good faith and in a commercially reasonable
manner with Landlord in attempting to resolve such disputes (including, without
limitation, attending meetings scheduled by Landlord and the Must-Take Space
Contractor in connection with attempting to resolve such disputes, provided that
Landlord shall reasonably cooperate with Tenant in scheduling such meetings),
(2) Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all Claims from the Must-Take Space Contractor, any subcontractors,
materialmen and/or other third parties providing materials, labor and/or
services and/or performing “soft costs” work in connection with the permitting
and construction of the Original Tenant Improvements arising out of Tenant’s
disapproval of all or any portion of such Must-Take Space Invoice and/or the
unavailability of the Must-Take Space Over-Allowance Amount as a result thereof,
and (3) if any liens are recorded against the Project, the Building and/or the
Premises as a result of Tenant’s disapproval of all or any portion of such
Must-Take Space Invoice and/or the unavailability of the Must-Take Space
Over-Allowance Amount as a result thereof, then (x) Tenant shall cause such
lien(s) to be released and removed of record by payment or posting of a
statutory bond within twenty (20) days after Tenant has received notice from
Landlord of such lien, and (y) if Tenant fails to so cause such lien(s) to be
released and removed of record by payment or posting of a statutory bond within
such 20-day period, then notwithstanding the foregoing provisions of this
Section 4.2.2, Landlord shall be permitted to send a request for disbursement to
the Must-Take Space Escrow Agent of Tenant’s “pro rata share” of the Must-Take
Space Over-Allowance Amount applicable to the disapproved portion of such
Must-Take Space TI Invoice. Tenant shall have no right to object to, nor shall
Tenant deliver any notice to the Must-Take Space Escrow Agent objecting to or
otherwise instructing the Must-Take Space Escrow Agent not to comply with, any
request for disbursement delivered by Landlord to the Must-Take Space Escrow
Agent. For purposes hereof, (I) Landlord’s “pro rata share” applicable to each
such Approved Must-Take Space TI Invoice (or Partially Approved Must-Take Space
TI Invoice, as the case may be) shall equal the Must-Take Space Tenant
Improvement Allowance divided by the sum of (a) the Must-Take Space Tenant
Improvement Allowance, plus (b) the Must-Take Space Over-Allowance Amount, and
(II) Tenant’s “pro rata share” applicable to each such Approved Must-Take Space
TI Invoice (or Partially Approved Must-Take Space TI Invoice, as the case may
be) shall equal the Must-Take Space Over-Allowance Amount divided by the sum of
(a) the Must-Take Space Tenant Improvement Allowance, plus (b) the Must-Take
Space Over-Allowance Amount. If, after the Must-Take Space Cost Proposal
Delivery Date, any additional costs of the Must-Take Space Tenant Improvements
arise (including, without limitation, as a result of the costs of the Must-Take
Space Tenant Improvements set forth on the Must-Take Space Approved Working
Drawings being in excess of the costs of the Must-Take Space Tenant Improvements
set forth on the Must-Take Space Approved Preliminary Construction Drawings, if
applicable, and/or any change orders to the Must-Take Space Approved Working
Drawings), (xx) such additional costs shall be added to the Must-Take Space Cost
Proposal and shall be deposited by Tenant into the Must-Take Space Escrow
Account within ten (10) business days after Landlord’s request therefor to the
extent such additional costs increase the Must-Take Space Over-Allowance Amount
previously set forth in the Must-Take Space Cost Proposal, and (yy) Landlord’s
and Tenant’s corresponding “pro rata shares” shall be adjusted to take into
account such increase in the Must-Take Space Over-Allowance

 

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Amount. Promptly following Landlord’s receipt from the Must-Take Space Escrow
Agent of Tenant’s “pro rata share” applicable to such Approved Must-Take Space
TI Invoice (or Partially Approved Must-Take Space TI Invoice, as the case may
be), Landlord shall pay to the appropriate party entitled thereto Landlord’s
“pro rata share” and Tenant’s “pro rata share” applicable to such Approved
Must-Take Space TI Invoice (or Partially Approved Must-Take Space TI Invoice, as
the case may be), less, with respect to payments made to the Must-Take Space
Contractor, a ten percent (10%) retention on the entire amount of such Approved
Must-Take Space TI Invoice (or Partially Approved Must-Take Space TI Invoice, as
the case may be), and not only such Landlord’s “pro rata share”. Tenant shall be
solely responsible for the payment of the escrow fee charged by the Must-Take
Space Escrow Agent in connection with the Must-Take Space Escrow Agreement and
the management of the Must-Take Space Escrow Account, which escrow fee shall be
an amount equal to $1,000.00. Following completion of the Must-Take Space Tenant
Improvements and Landlord’s receipt of all appropriate mechanic’s lien releases,
Landlord shall: (AA) deliver any undisbursed retention to the Must-Take Space
Contractor (less any amount withheld therefrom by Landlord as permitted under
the liquidated damages provision of the Must-Take Space Construction Contract);
and (BB) deliver to Tenant a final cost statement which shall indicate the final
costs of the Must-Take Space Tenant Improvement Allowance Items (the “Must-Take
Space Final Cost Statement”). If the Must-Take Space Final Cost Statement
indicates that Tenant has underpaid or overpaid the Must-Take Space
Over-Allowance Amount, then within thirty (30) days after Tenant’s receipt of
such statement, Tenant shall deliver to Landlord the amount of such
underpayment. If the Must-Take Space Final Cost Statement indicates that Tenant
has overpaid the Must-Take Space Over-Allowance Amount, then within five
(5) business days after Landlord’s delivery of the Final Cost Statement to
Tenant, Landlord shall deliver to the Must-Take Space Escrow Agent a request for
disbursement to Tenant of such overpayment pursuant to the provisions of the
Must-Take Space Escrow Agreement (it being agreed that to the extent Landlord
receives any amounts from the Must-Take Space Escrow Agent attributable to such
overpayment, Landlord shall promptly remit such amounts to Tenant).

4.2.3 Landlord Supervision. Tenant acknowledges that following the mutual
execution and delivery of the Must-Take Space Construction Contract by Landlord
and the Must-Take Space Contractor, Landlord shall supervise the construction by
the Must-Take Space Contractor, and Landlord shall be entitled to a construction
supervision and management fee (the “Must-Take Space Landlord Supervision Fee”)
in an amount equal to $36,715.00 (i.e., $1.00 per rentable square foot of the
Must-Take Space), which amount shall be deducted from the Must-Take Space Tenant
Improvement Allowance on a monthly basis in two (2) equal monthly installments
commencing upon the construction of the Must-Take Space Tenant Improvements.
Notwithstanding the foregoing, no Must-Take Space Landlord Supervision Fee shall
be charged by Landlord if and to the extent Legacy Partners CDS, Inc. is
retained as the Must-Take Space Contractor. The construction supervision and
management services for the Must-Take Space Tenant Improvements shall include
the services listed on Schedule 3 attached to the Original Premises Work Letter.

4.2.4 Contractor’s Warranties and Guarantees. Landlord hereby assigns to Tenant
all warranties and guarantees by Must-Take Space Contractor relating to the
Must-Take Space Tenant Improvements, which assignment shall be on a
non-exclusive basis such that the warranties and guarantees may be enforced by
Landlord and/or Tenant, and Tenant hereby waives all claims against Landlord
relating to, or arising out of the construction of, the Must-Take Space Tenant
Improvements; provided, however, that Landlord shall, at no cost to Landlord,
use good faith efforts to cooperate with Tenant and assist in any enforcement
action regarding such warranties and guaranties.

4.2.5 Tenant’s Covenants. Tenant hereby indemnifies Landlord for any Claims
and/or delays arising from the actions of the Must-Take Space Architect and the
Must-Take Space Engineers in, on or about the Must-Take Space, Building and/or
Project. Within thirty (30) days after completion of construction of the
Must-Take Space Tenant Improvements (including any punch-list items), Landlord
shall cause the Must-Take Space Contractor and the Must-Take Space Architect to
cause a Notice of Completion to be recorded in the office of the Recorder of the
County in which the Building is located in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute and furnish a
copy thereof to Landlord upon recordation, failing which, Landlord may itself
execute and file the same on behalf of Tenant as Tenant’s agent for such
purpose. In addition, Tenant, within sixty (60) days after the Substantial
Completion of the Must-Take Space Tenant Improvements, shall have prepared and
delivered to the Building management office a copy of the “as built” plans and
specifications (including all working drawings) for the Must-Take Space Tenant
Improvements, together with a computer disk containing the Must-Take Space
Approved Working Drawings in AutoCAD format.

SECTION 5

SUBSTANTIAL COMPLETION;

EXTENSION OF MUST-TAKE SPACE COMMENCEMENT DATE

5.1 Substantial Completion. For purposes of this Lease, “Substantial Completion
of the Must-Take Space Tenant Improvements” shall occur (and the Must-Take Space
Tenant Improvements shall be deemed “Substantially Complete”) upon: (i) the
completion of construction of the Must-Take Space Tenant Improvements pursuant
to the Must-Take Space Approved Working Drawings, with the exception of (A) any
punch list items that do not materially and adversely affect Tenant’s use and
occupancy of the Must-Take Space and/or materially and adversely interfere with
the installation by Tenant of its cabling, furniture, fixtures and equipment in
the Must-Take Space, and (B) any tenant fixtures, work-stations, built-in
furniture, or equipment to be installed in the Must-Take Space by Tenant or
under the supervision of the Must-Take Space Contractor; (ii) the issuance by
the applicable government authorities of a certificate of occupancy, temporary
certificate of occupancy, or its equivalent

 

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(including, without limitation, a final inspection sign-off by the City of San
Jose) permitting occupancy of the Must-Take Space; and (iii) the issuance by the
Must-Take Space Architect of a “Certificate of Substantial Completion”
certifying that the Must-Take Space Tenant Improvements have been substantially
completed in accordance with the Must-Take Space Approved Working Drawings.
Within five (5) days after the date of Substantial Completion of the Must-Take
Space Tenant Improvements, Landlord’s and Tenant’s respective representatives
shall inspect the Must-Take Space and identify the punch-list items of the
Must-Take Space Tenant Improvements and jointly prepare a written list of such
punch-list items. Landlord shall cause the Must-Take Space Contractor to
diligently complete the punch-list items set forth on such list as soon as
reasonably possible thereafter; provided, however, that in no event shall the
completion or non-completion of such punch-list items have any effect on the
Must-Take Space Commencement Date. Landlord shall, however, be under no
obligation to repair any damage caused by Tenant in connection with Tenant’s
move into the Must-Take Space, the exercise by Tenant of its rights under
Section 6.1 below and/or otherwise caused by Tenant, all of which shall be
repaired by Tenant at Tenant’s cost.

5.2 Extension of Must-Take Space Commencement Date for Must-Take Space Permit
Delays. The Must-Take Space Commencement Date shall be the date determined
pursuant to Section 1.4.2 or Section 1.4.3 of the Lease (as applicable),
notwithstanding the fact that Landlord may not have delivered possession of the
Must-Take Space to Tenant with the Must-Take Space Tenant Improvements
Substantially Complete as of the Must-Take Space Commencement Date.
Notwithstanding the foregoing, to the extent that Substantial Completion of the
Must-Take Space Tenant Improvements is actually delayed beyond the first
(1st) day of the nineteenth (19th) month after the Lease Commencement Date (or
beyond the date which is six (6) months after Landlord’s receipt of the
Must-Take Space Acceleration Notice if Tenant elects to deliver the same
pursuant to Section 1.4.3 of the Lease) as a result of any Must-Take Space
Permit Delays (as defined below), then, subject to the restrictions and
limitations contained herein below, the Must-Take Space Commencement Date shall
be extended day for day by the number of days of such Must-Take Space Permit
Delays (but in no event shall the Must-Take Space Commencement Date be delayed
pursuant to this Section 5.2 beyond the date Tenant commences business
operations in the Must-Take Space). As used herein, “Must-Take Space Permit
Delays” shall mean the failure by the applicable local governmental authorities
to issue the Must-Take Space Permits within sixty (60) days after the date upon
which Tenant originally submits the Must-Take Space Approved Working Drawings
for “plan check” to such applicable local governmental authorities for such
Must-Take Space Permits, except that such 60-day period shall be extended day
for day for each day of delay in the issuance of the Must-Take Space Permits
resulting from Tenant Caused Must-Take Space Permit Delays (as defined herein
below), and an Must-Take Space Permit Delay shall not be deemed to have occurred
unless the applicable local governmental authorities has failed to issue the
Must-Take Space Permits within such 60-day period, as so extended by such Tenant
Caused Must-Take Space Permit Delays. As used herein, “Tenant Caused Must-Take
Space Permit Delays” shall mean delays in the issuance of the Must-Take Space
Permits by the applicable local governmental authorities resulting from (i) the
applicable local governmental authorities requesting revisions to the Must-Take
Space Approved Working Drawings more than two (2) times, (ii) Tenant’s failure
to cause the Must-Take Space Approved Working Drawings to be revised and
re-submitted to the applicable local governmental authorities within five
(5) business days after the applicable governmental authorities’ request for
such revisions, (iii) changes in the Must-Take Space Approved Working Drawings
requested or required by Tenant after the Must-Take Space Approved Working
Drawings have been submitted to the applicable local governmental authorities,
(iv) changes to the Must-Take Space Base, Shell and Core required by the
Must-Take Space Approved Working Drawings, and (v) any other negligent and/or
bad faith acts or omissions of Tenant, its agents and/or employees.

SECTION 6

MISCELLANEOUS

6.1 Tenant’s Entry Into the Must-Take Space Prior to Substantial Completion.
Subject to the terms hereof, Landlord shall allow Tenant access to the Must-Take
Space following the earlier of (i) the date which is twelve (12) months after
the Lease Commencement Date, and (ii) the date which is five (5) business days
after Landlord’s receipt of the Must-Take Space Acceleration Notice, for the
sole purpose of Tenant installing equipment and/or fixtures (including Tenant’s
data and telephone equipment and cabling) in the Must-Take Space. In connection
with any such entry, Tenant acknowledges and agrees that Tenant’s employees,
agents, contractors, consultants, workmen, mechanics, suppliers and invitees
shall (A) use commercially reasonable efforts not to unreasonably interfere with
Landlord or Landlord’s contractors (including the Must-Take Space Contractor),
agents or representatives in performing work in the Project and/or the Building
(including the Must-Take Space Tenant Improvements), and (B) not interfere with
the general operation of the Project. Tenant acknowledges and agrees that any
such entry into and occupancy of the Must-Take Space or any portion thereof by
Tenant or any person or entity working for or on behalf of Tenant shall be
deemed to be subject to all of the terms, covenants, conditions and provisions
of the Lease, excluding only the covenant to pay Base Rent and Tenant’s Share of
Operating Expenses, Tax Expenses and Utilities Costs for the Must-Take Space
(until the occurrence of the Must-Take Space Commencement Date). Tenant further
acknowledges and agrees that Landlord shall not be liable for any injury, loss
or damage which may occur to any of Tenant’s work made in or about the Must-Take
Space in connection with such entry or to any property placed therein prior to
the Must-Take Space Commencement Date except to the extent caused by the
negligence or willful misconduct of Landlord and/or the Landlord Parties and not
insured or required to be insured by Tenant under the Lease. If the performance
of Tenant’s work in connection with such entry causes extra costs to be incurred
by Landlord or requires the use of any Building services, Tenant shall promptly
reimburse Landlord for such extra costs and/or shall pay Landlord for such
Building services at Landlord’s standard rates then in effect.

6.2 Tenant’s Representative. Tenant has designated Kelly Givens as its sole
representative with respect to the matters set forth in this Must-Take Space
Work Letter, who shall have full authority and responsibility to act on behalf
of the Tenant as required in this Must-Take Space Work Letter.

 

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6.3 Landlord’s Representative. Landlord has designated Cy Colburn as its sole
representative with respect to the matters set forth in this Must-Take Space
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 Must-Take
Space Work Letter.

6.4 Time of the Essence in This Must-Take Space Work Letter. Unless otherwise
indicated, all references herein to a “number of days” shall mean and refer to
calendar days. In all instances where Tenant is required to approve or deliver
an item, if no written notice of approval is given or the item is not delivered
within the stated time period, at Landlord’s sole option, at the end of said
period the item shall automatically be deemed approved or delivered by Tenant
and the next succeeding time period shall commence.

6.5 Tenant’s Lease Default. Notwithstanding any provision to the contrary
contained in the Lease, if an event of default by Tenant of this Must-Take Space
Work Letter (which, for purposes hereof, shall include, without limitation, the
delivery by Tenant to Landlord of any oral or written notice instructing
Landlord to cease the design and/or construction of the Must-Take Space Tenant
Improvements and/or that Tenant does not intend to occupy the Must-Take Space)
or the Lease has occurred at any time on or before the Substantial Completion of
the Must-Take Space Tenant Improvements and remains after the expiration of
applicable notice and cure periods, then (i) in addition to all other rights and
remedies granted to Landlord pursuant to the Lease, at law and/or in equity,
Landlord shall have the right to cause the Must-Take Space Contractor to suspend
the construction of the Must-Take Space Tenant Improvements, and (ii) all other
obligations of Landlord under the terms of this Must-Take Space Work Letter
shall be forgiven until such time as such default is cured pursuant to the terms
of the Lease. In addition, if the Lease is terminated prior to the Must-Take
Space Commencement Date for any reason due to a default by Tenant as described
in Section 19.1 of the Lease or under this Must-Take Space Work Letter
(including, without limitation, any anticipatory breach described above in this
Section 6.5), in addition to any other remedies available to Landlord under the
Lease, at law and/or in equity, Tenant shall pay to Landlord, as Additional Rent
under the Lease, within five (5) days after Tenant’s receipt of a statement
therefor, any and all costs incurred by Landlord and not reimbursed or otherwise
paid by Tenant through the date of such termination in connection with the
Must-Take Space Tenant Improvements to the extent planned, installed and/or
constructed as of such date of termination, including, but not limited to, any
costs related to the removal of all or any portion of the Must-Take Space Tenant
Improvements and restoration costs related thereto.

6.6 Tenant’s Self-Help and Offset Right. Notwithstanding anything to the
contrary set forth in this Must-Take Space Work Letter or elsewhere in the
Lease, if after the mutual execution and delivery of the Must-Take Space
Construction Contract, Landlord and the Must-Take Space Contractor and the
issuance by the appropriate local governmental authorities of the Must-Take
Space Permits, Landlord fails to (i) diligently proceed with the construction of
the Must-Take Space Tenant Improvements, and/or (ii) timely disburse any portion
of the Must-Take Space Tenant Improvement Allowance to the Must-Take Space
Contractor or other third parties entitled to receive such funds for Must-Take
Space Tenant Improvement work already performed and/or the Must-Take Space
Tenant Improvement Costs already incurred, which failure in either case is not
due to or caused by any Force Majeure events or any delays caused by the acts or
omissions of Tenant, or its agents, contractors or employees (including, without
limitation Tenant’s failure to timely deposit the Must-Take Space Over-Allowance
Amount into the Must-Take Space Escrow Account pursuant to Section 4.2.2 above)
and continues for thirty (30) days following Landlord’s receipt of Tenant’s
written notice thereof (herein, the “Must-Take Space Outside Performance/Payment
Date”), then: (A) in the case of clause (i) hereinabove, Tenant may proceed to
undertake and pay for the cost of such unperformed work from Tenant’s own funds
following (1) Tenant’s delivery of an additional ten business (10) days’ notice
to Landlord that Tenant will be undertaking and paying for the cost of such
unperformed work, and (2) Landlord’s failure to diligently proceed with such
work within such 10 business-day period; (B) in the case of clause
(ii) hereinabove, Tenant may pay such amounts of such undisbursed portions of
the Must-Take Space Tenant Improvement Allowance directly to the Must-Take Space
Contractor or other third parties entitled to receive such funds (provided that
in both cases of clauses (A) and (B) hereinabove, Tenant obtains and delivers to
Landlord all appropriate lien releases with respect to any such amounts prior to
Tenant’s payment thereof); and (C) Tenant shall be entitled to receive from
Landlord funds from the remaining undisbursed balance of the Must-Take Space
Tenant Improvement Allowance (but not any amounts in excess thereof, other than
interest as expressly provided herein below) to reimburse Tenant for the actual
and documented out-of-pocket costs and expenses incurred and paid for by Tenant
in performing such work or causing such work to be performed pursuant to clause
(A) hereinabove, or paying such undisbursed portions of the Must-Take Space
Tenant Improvement Allowance directly to the Must-Take Space Contractor or other
third parties entitled to receive such funds pursuant to clause (B) hereinabove
or to Tenant for any amounts owed by Landlord to Tenant as reimbursements out of
the Must-Take Space Tenant Improvement Allowance under this Must-Take Space Work
Letter, as the case may be. Such reimbursement by Landlord shall be made by the
date (the “Must-Take Space Reimbursement Date”) which is thirty (30) days after
Landlord’s receipt from Tenant of invoices and paid receipts for such costs and
expenses from such third parties so paid by Tenant (together with all
appropriate lien releases with respect to any such amounts from such third
parties performing such work and/or reasonable evidence that Tenant has incurred
out-of-pocket costs for which Landlord is obligated to reimburse Tenant from the
Must-Take Space Tenant Improvement Allowance). If Landlord fails to so reimburse
Tenant by the Must-Take Space Reimbursement Date, then Tenant shall be entitled
to offset against the Rent next payable by Tenant under the Lease the amount of
such invoice so paid by Tenant (but the aggregate amount of any such offsets
hereunder shall not exceed the remaining undisbursed balance of the Must-Take
Space Tenant Improvement Allowance), together with interest thereon, at the
Interest Rate, which shall have accrued on the amount of each such invoice
during the period from and after the date such amount was paid by Tenant through
and including the earlier of (x) the date Landlord reimburses Tenant for such
amount, and (y) the date that Tenant deducts from Rent such amount; provided,
however, that Tenant shall not be entitled to such offset right while Tenant is
in default under the Lease or this Must-Take Space Work Letter after expiration
of any applicable notice and cure periods; provided further, however, that
notwithstanding the foregoing to the contrary, if Landlord delivers to Tenant
prior to the Must-Take Space Outside Performance/Payment Date, a written
objection to Tenant’s right to receive any such reimbursement based upon
Landlord’s good faith claim that the applicable action did not have to be taken
by Landlord pursuant to the terms of the Lease and/or this Must-Take

 

EXHIBIT B-2

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Space Work Letter, then Tenant shall not be entitled to such reimbursement and
Landlord and Tenant shall instead either meet in person or communicate by
telephone within two (2) business days thereafter to confer and attempt to
resolve the matter. If Landlord and Tenant resolve such matter, then
(I) Landlord and Tenant shall promptly thereafter confirm such resolution in
writing, and (II) if such resolution stipulates that Tenant is entitled to any
such reimbursement, then Landlord shall so reimburse Tenant for the stipulated
amount within thirty (30) days after the date upon which Landlord and Tenant
resolve such matter. If Landlord and Tenant do not resolve such matter within a
reasonable period of time after such meeting (but in any event within thirty
(30) days after such meeting), then Tenant shall not be entitled to such
reimbursement and either Landlord or Tenant may submit such matter to
arbitration pursuant to the provisions of Section 6.7 below. If Tenant receives
a monetary judgment against Landlord in such arbitration, then Landlord shall
pay the amount of such monetary judgment to Tenant within thirty (30) days after
the date such judgment is issued. If such monetary judgment is not so timely
paid, then, notwithstanding any contrary provision of this Lease, Tenant shall
be entitled to offset against the Rent payable under this Lease the amount of
such monetary judgment together with interest which shall have accrued on such
monetary judgment during the period from and after the day after the expiration
of such 30-day period through and including the date that Tenant offsets against
the Rent the amount of such monetary judgment, at the Interest Rate. If Tenant
undertakes such work pursuant to clause (i) hereinabove, (a) Landlord shall
thereafter have no obligation to complete the Must-Take Space Tenant
Improvements (but the foregoing shall not relieve Landlord of its obligations
under this Section 6.6), and (b) Tenant shall comply with the other terms and
conditions of this Must-Take Space Work Letter with respect thereto, and if such
work will affect the Base Building, any common areas or other areas outside the
Must-Take Space and/or the exterior appearance of the Building or Project (or
any portion thereof), Tenant shall use only those unrelated third party general
contractors and subcontractors used by Landlord in the Building for such work
unless such general contractors and subcontractors are unwilling or unable to
timely perform such work at competitive prices, in which event Tenant may
utilize the services of any other qualified general contractors and
subcontractors which normally and regularly perform similar work in the
Comparable Buildings.

6.7 Arbitration Regarding Tenant’s Self-Help Rights. If a party submits a matter
to arbitration in accordance with the provisions of Section 6.6 above, either
party may commence an expedited arbitration proceeding to resolve such matter
pursuant to JAMS. The arbitration shall be conducted in San Jose, California and
decided by a single person (the “Construction Matters Arbitrator”) who (i) is a
retired judge of any of the trial or appellate courts of the State of
California, (ii) has substantial experience in interpreting agreements involving
construction matters related to the leasing of commercial real estate and
practices in and is located in California, and (iii) shall be selected in
accordance with JAMS rules. As promptly as practical after being appointed, the
Construction Matters Arbitrator so chosen shall (A) consider the evidence
submitted by the parties, and (B) upon notice to all parties, determine whether
Tenant’s self-help rights were validly exercised under Section 6.7 above and the
amount of reimbursement, if any, in connection therewith to which Tenant is
entitled under Section 6.7 above, which issues shall be the sole issues to be
determined by the Construction Matters Arbitrator. The decisions of the
Construction Matters Arbitrator shall be final and binding upon the parties and
a judgment thereon may be entered in any court having jurisdiction, except that
either party may contest and obtain judicial review of the reasonableness of the
Construction Matters Arbitrator’s determination of the cost of the arbitration.
The costs of any arbitration pursuant to this Section 6.7 shall be funded fifty
(50%) by each party, and the parties shall bear their own costs and attorneys’
fees in connection with such arbitration. As part of any award issued by the
Construction Matters Arbitrator, the prevailing party in the arbitration shall
be entitled to recover from the non-prevailing party such costs and reasonable
attorneys’ fees as may have been incurred by the prevailing party in connection
with such arbitration.

6.7 Independent Entities. The terms of this Must-Take Space Work Letter shall
not be deemed modified in any respect in the event Legacy Partners CDS, Inc. is
retained as the Must-Take Space Contractor, it being understood and agreed that
Landlord and the Must-Take Space Contractor, regardless of the identity of the
Must-Take Space Contractor, shall at all times remain separate and independent
entities and the knowledge and actions of one shall not be imputed to the other.

 

EXHIBIT B-2

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EXHIBIT C

AMENDMENT TO LEASE

This AMENDMENT TO LEASE (“Amendment”) is made and entered into effective as of
            , 20    , by and between LEGACY III SJ AMERICA CENTER I, LLC, a
Delaware limited liability company (“Landlord”) and POLYCOM, INC., a Delaware
corporation (“Tenant”).

R E C I T A L S :

A. Landlord and Tenant entered into that certain Lease dated as of August 4,
2011 (the “Lease”), pursuant to which Landlord leased to Tenant and Tenant
leased from Landlord certain “Premises”, as described in the Lease, in that
certain Building located at 6001 America Center Drive, San Jose, California
95002.

B. Except as otherwise set forth herein, all capitalized terms used in this
Amendment shall have the same meaning as such terms have in the Lease.

C. Landlord and Tenant desire to amend the Lease to confirm the [Lease
Commencement Date/Must-Take Space Commencement Date] and Lease Expiration Date
of the Lease Term, as hereinafter provided.

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

1. Confirmation of Dates. The parties hereby confirm that the [Lease
Term/Must-Take Space Term] commenced as of                      (the [“Lease
Commencement Date/Must-Take Space Commencement Date”]) for a term of
                     (    ) ending on                      (the “Lease
Expiration Date”) (unless sooner terminated as provided in the Lease or extended
pursuant to the Extension Option Rider attached to the Lease).

2. No Further Modification. Except as set forth in this Amendment, all of the
terms and provisions of the Lease shall remain unmodified and in full force and
effect.

IN WITNESS WHEREOF, this Amendment to Lease has been executed as of the day and
year first above written.

 

“Landlord”:

LEGACY III SJ AMERICA CENTER I, LLC,

a Delaware limited liability company

By:   LEGACY PARTNERS COMMERCIAL, L.P.,   a California limited partnership,   as
Property Manager and Agent for Owner   By:   LEGACY PARTNERS COMMERCIAL, INC.,  
  General Partner     By:  

 

      Debra Smith     Its:     Chief Administrative Officer       DRE #00975555
      BL DRE #01464134 “Tenant”:

POLYCOM, INC.,

a Delaware corporation

By:  

 

  Name:  

 

  Its:  

 

By:  

 

  Name:  

 

  Its:  

 

 

EXHIBIT C

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EXHIBIT D

RULES AND REGULATIONS

Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project.

1. Tenant shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the Premises without furnishing Landlord with
keys to such altered or additional locks and/or bolts. Tenant shall bear the
cost of any lock changes or repairs required by Tenant.

2. Tenant, its employees and agents must be sure that the doors to the Building
are securely closed and locked when leaving the Premises if it is after the
normal hours of business for the Building. In case of invasion, mob, riot,
public excitement, or other commotion, Landlord reserves the right to prevent
access to the Building and/or Project during the continuance of same by any
means it deems appropriate for the safety and protection of life and property.

3. Landlord shall have the right to prescribe the weight, size and position of
all safes and other heavy property brought into the Building. Safes and other
heavy objects shall, if considered necessary by Landlord, stand on supports of
such thickness as is necessary to properly distribute the weight. Landlord will
not be responsible for loss of or damage to any such safe or property in any
case. All damage done to any part of the Building, its contents, occupants or
visitors by moving or maintaining any such safe or other property shall be the
sole responsibility of Tenant and any expense of said damage or injury shall be
borne by Tenant.

4. The requirements of Tenant will be attended to only upon application at the
management office of the Project or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.

5. Tenant shall not disturb, solicit, or canvass any occupant of the Project and
shall cooperate with Landlord or Landlord’s agents to prevent same.

6. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed, and no foreign
substance of any kind whatsoever shall be thrown therein. The expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by the tenant who, or whose employees or agents, shall have caused it.

7. Tenant shall not overload the floor of the Premises.

8. Except as otherwise expressly permitted under the Lease, Tenant shall not use
or keep in or on the Premises, the Building or Project any kerosene, gasoline or
other inflammable or combustible fluid or material, or any foul or noxious gas
or substance.

9. Tenant shall not bring into or keep within the Project, the Building or the
Premises any animals, birds, bicycles or other vehicles.

10. No cooking shall be done or permitted by Tenant on the Premises, nor shall
the Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing, the
private use in the Premises of Underwriters’ Laboratory-approved equipment and
microwave ovens for heating food and brewing coffee, tea, hot chocolate and
similar beverages, for preparation of meals by employees of Tenant in a manner
customary for an employee lounge or lunchroom, and for catering to serve food in
connection with meetings or receptions will be permitted, provided that such use
is in accordance with all applicable federal, state and city laws, codes,
ordinances, rules and regulations, and does not cause odors which are
objectionable to Landlord and other tenants.

11. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in the city in
which the Project is located without violation of any law or ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord
shall designate.

12. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

13. Tenant shall assume any and all responsibility for protecting the Premises
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed, when the Premises are not occupied.

14. The washing and/or detailing of or, the installation of windshields, radios,
telephones in or general work on, automobiles shall not be allowed on the
Project.

15. Tenant shall comply with any non-smoking ordinance adopted by any applicable
governmental authority, and neither Tenant nor any of its contractors, agents,
employees, invitees or visitors shall smoke in the Premises, in the Building or
in any other portion of the Project which is not designated as an area in which
smoking is permitted.

 

EXHIBIT D

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16. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any such
Rules or Regulations against any or all tenants of the Project. Landlord
reserves the right at any time to change or rescind any one or more of these
Rules and Regulations, or to make such other and further reasonable Rules and
Regulations as in Landlord’s judgment may from time to time be necessary for the
management, safety, care and cleanliness of the Premises, Building and Project,
and for the preservation of good order therein, as well as for the convenience
of other occupants and tenants therein. Landlord shall not be responsible to
Tenant or to any other person for the nonobservance of the Rules and Regulations
by another tenant or other person. Tenant shall be deemed to have read these
Rules and Regulations and to have agreed to abide by them as a condition of its
occupancy of the Premises.

 

EXHIBIT D

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EXHIBIT E

LIST OF ENVIRONMENTAL REPORTS

 

1. Phase I Environmental Site Assessment Report prepared by ENV America and
dated September 2007.

 

2. Description of Closure, recorded September 4, 2007, as Instrument
No. 19573415, Santa Clara County Recorder

 

3. California Regional Water Quality Control Board Order 01-029

 

4. Soil Management Plan Update Letter dated August 31, 2005

 

5. Second Five Year Review Report for South Bay Asbestos Site dated September
2005

 

6. Post Closure Land Use Proposal revised February 2000

 

7. Construction Quality Assurance Report America Center - Landfill Closure dated
May 24, 2002, prepared by Treadwell and Rollo

 

8. Water Quality Monitoring Plan, Highway 237 Landfill, Crawford Consulting,
Inc., September 2001

 

9. Agreement and Covenant Not to Sue Legacy Partners 2335 LLC - South Bay
Asbestos Area Superfund Site, San Jose, CA, Docket No. 99-10

 

10. Phase I Environmental Site Assessment Update prepared by Haley & Aldrich,
dated December 16, 2010

 

11. Operation and Maintenance Manual (Methane Mitigation and Monitoring Systems)
prepared by Treadwell & Rollo, dated July 5, 2011, Project No. 2580.04

 

12.

Letter from Treadwell & Rollo to Legacy Partners CDS, Inc. dated June 30, 2011,
Re Final Completion Report for Methane Mitigation System

 

EXHIBIT E

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EXHIBIT F

FORM OF SUBORDINATION, NONDISTURBANCE

AND ATTORNMENT AGREEMENT

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the “Agreement”)
is made as of the      day of             , 20     by and between AB US REP
AMERICA CENTER, LLC, a Delaware limited liability company, having an address at
c/o AllianceBernstein, 1345 Avenue of the Americas, New York, New York 10105
(“Lender”),                     , a                     , having an address at
                     (“Tenant”), and, LEGACY III SJ AMERICA CENTER I, LLC, a
Delaware limited liability company (“Legacy I Owner”), and LEGACY III SJ AMERICA
CENTER II, LLC, a Delaware limited liability company (“Legacy II Owner”),
together with Legacy I Owner, collectively, “Owner”).

R E C I T A L S :

A. Lender is the present owner and holder of a certain Amended and Restated
Construction Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing (together with any and all extensions, renewals,
substitutions, replacements, amendments, modifications and/or restatements
thereof, the “Security Instrument”) dated as of March 24, 2011, given by Owner
to Lender which encumbers the fee estate of Owner in the property legally
described on Exhibit A attached hereto (the “Property”) and which secures the
payment of certain indebtedness owed by Owner to Lender evidenced by a certain
Amended and Restated Promissory Note dated March 24, 2011, made by Owner and
payable to Lender (the note together with all extensions, renewals,
modifications, substitutions and amendments thereof shall collectively be
referred to as the “Note”);

B. Tenant is the holder of a leasehold estate in a portion of the Property
pursuant to that certain Lease Agreement between Legacy I Owner (“Landlord”) and
Tenant dated as of             , 20     (such lease, as modified and amended as
set forth herein and as may be modified and amended from time to time being
hereinafter referred to as the “Lease”);

C. Tenant has agreed to subordinate the Lease to the Security Instrument and to
the lien thereof and Lender has agreed to grant non-disturbance to Tenant under
the Lease on the terms and conditions hereinafter set forth.

A G R E E M E N T :

For good and valuable consideration, Tenant, Owner and Lender agree as follows:

 

  1. SUBORDINATION

Subject to Sections 2 and 3 of this Agreement, the Lease and all of the terms,
covenants and provisions thereof and all rights, remedies and options, including
purchase options, if any, of Tenant thereunder are and shall at all times
continue to be subject and subordinate in all respects to the terms, covenants
and provisions of the Security Instrument and to the lien thereof including
without limitation, all renewals, increases, modifications, spreaders,
consolidations, replacements and extensions thereof and to all sums secured
thereby and advances made thereunder with the same force and effect as if the
Security Instrument had been executed, delivered and recorded prior to the
execution and delivery of the Lease.

 

  2. NON-DISTURBANCE

If any action or proceeding is commenced by Lender for the foreclosure of the
Security Instrument or the sale of the Property, Tenant shall not be named as a
party therein unless such joinder shall be required by law, provided, however,
so long as Tenant is not in default beyond any applicable grace or cure period
(an “Event of Default”) under the Lease, Lender will not seek affirmative relief
against Tenant and such joinder shall not result in the termination of the Lease
or disturb Tenant’s possession, enjoyment or use of the premises demised
thereunder (for any reason other than one which would entitle the Landlord to
terminate the Lease under its terms or at law or equity). Lender agrees that it
will not disturb Tenant’s use, possession, and enjoyment of the Property under
the Lease upon any termination, repossession, any judicial or non-judicial
foreclosure, or otherwise, or the exercise of any other remedy pursuant to the
Note and the Security Instrument and any such actions shall be made subject to
all rights of Tenant under the Lease and the Lease shall continue in full force
and effect, subject to Section 3, and none of Tenant’s rights and benefits under
the Lease will be adversely affected; provided that at the time of the
commencement, of any such action or proceeding or at the time of any such sale
or exercise of any such other rights (a) the Lease shall be in full force and
effect and (h) no Event of Default shall then exist under the Lease.

 

  3. ATTORNMENT

(a) If Lender or any other subsequent purchaser of the Property shall become the
owner of the Property by reason of the foreclosure of the Security Instrument or
the acceptance of a deed or

 

EXHIBIT F

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assignment in lieu of foreclosure or by reason of any other enforcement of the
Security Instrument (Lender or such other purchaser being hereinafter referred
as “Purchaser”), and the conditions set forth in Section 2 above have been met
at the time Purchaser becomes owner of the Property, the Lease shall not be
terminated or affected thereby but shall continue in full force and effect as a
direct lease between Purchaser and Tenant upon all of the terms, covenants and
conditions set forth in the Lease and Tenant hereby agrees to attorn to such new
owner and to recognize such new owner as “landlord” under the Lease without any
additional documentation to effect such attornment (provided, however, if
applicable law shall require or Lender shall reasonably request additional
documentation at the time Lender exercises its remedies then Tenant shall
execute such additional reasonable and customary documents evidencing such
attornment as may be required by applicable law or reasonably requested by
Lender). In the event that Purchaser becomes the owner of the Property,
Purchaser by virtue of such acquisition of the Property shall be deemed to have
agreed to accept such attornment set forth above and shall be bound under all of
the terms, covenants and conditions of the Lease, provided, however, that
Purchaser shall not be (i) liable for the default or failure of any prior
landlord (any such prior landlord, including Landlord, being hereinafter
referred to as a “Prior Landlord”) to perform any obligations of Prior Landlord
under the Lease or for any other act or omissions of any Prior Landlord, (ii)
subject to any offsets, defenses, abatements or counterclaims which shall have
accrued in favor of Tenant against any Prior Landlord prior to the date upon
which Purchaser shall become the owner of the Property, (iii) liable for the
return of rental security deposits, if any, paid by Tenant to any Prior Landlord
in accordance with the Lease, except to the extent such sums or instruments are
actually received by Purchaser or a credit is given to Purchaser therefor, (iv)
bound by any payment of rents, additional rents, base rents, percentage rent or
other sums which Tenant may have paid more than one (1) month in advance of the
date on which such rents, additional rents, base rents, percentage rents or
other sums becoming due under the terms of the Lease to any Prior Landlord, (v)
bound by any agreement terminating or amending or modifying the terms of the
Lease made without Lender’s prior written consent, or, after the acquisition of
the Property, Purchaser’s prior written consent, (vi) bound by, or liable for,
any agreement of any Prior Landlord under the Lease with respect to the
completion of any improvements at the Property or for the payment or
reimbursement to Tenant of any contribution to the cost of the completion of any
such improvements, other than disbursement of the Original Premises Tenant
Improvement Allowance and the Must Take Premises Tenant Improvement Allowance,
pursuant to Exhibits B-1 and B-2, as applicable, attached to the Lease, or (vii)
bound by, or liable for, any breach of, any representation or warranty contained
in the Lease or otherwise made by any Prior Landlord. Nothing contained in this
Section 3 shall relieve Purchaser from Purchaser’s obligation to cure any repair
or maintenance default under the Lease with respect to the Premises by any Prior
Landlord under the Lease (including Landlord), subject to force majeure, solely
to the extent the same is continuing when Purchaser succeeds to the landlord’s
interest under the Lease and acquires title to the Premises, provided that
Lender’s obligation to cure such default shall be limited solely to performing
the repair or maintenance obligation as required pursuant to the terms of the
Lease (and in no event shall Lender have any other liability or obligation with
respect to such default). In addition, nothing contained in this Section 3
shall, however, limit any of Tenant’s abatement or offset rights specifically
set forth in the Lease, including, without limitation, pursuant to Sections 6.4,
7.3 and 24.25 and Article 3 of the Lease, and Section 6.6 of Exhibit B-1 and
Exhibit B-2, in each case (other than with respect to the Abated Rent) solely to
the extent such abatement or offset right accrues after Purchaser succeeds to
the landlord’s interest under the Lease and acquires title to the Premises,
provided that Tenant complies with all the applicable terms and conditions of
the Lease with regard to such abatement or offset. Further, notwithstanding
anything in this Section 3 to the contrary, if any portion of the Premises is
damaged or taken or condemned, Tenant shall be permitted to abate rent in
accordance with Articles 11 and 12 of the Lease, provided that Tenant complies
with all applicable terms and conditions of the Lease with regard to such
abatement.

(b) For the avoidance of doubt, from and after the date on which Purchaser
becomes the owner of the Property (but not before), (i) the Tenant shall be
obligated to proceed to perform all remaining Original Premises Tenant
Improvements and Must-Take Space Tenant Improvements, (ii) in connection with
Tenant’s performance of such work, Tenant may pay the undisbursed portion of the
Original Premises Tenant Improvement Allowance and/or Must-Take Space Tenant
Improvement Allowance directly to the Original Premises Contractor, the
Must-Take Space Contractor or other third parties entitled to receive such funds
pursuant to the Lease (provided that Tenant obtains and delivers to Purchaser
all appropriate lien releases with respect to any such amounts prior to Tenant’s
payment thereof), and (iii) Tenant shall be entitled to receive from Purchaser
funds from the remaining undisbursed balance of the Original Premises Tenant
Improvement Allowance and/or Must-Take Space Tenant Improvement Allowance (but
not any amounts in excess thereof) to reimburse Tenant for the actual and
documented out-of-pocket costs and expenses incurred and paid for by Tenant in
performing such work or causing such work to be performed, or paying such
undisbursed portions of the Original Premises Tenant Improvement Allowance
and/or Must-Take Space Tenant Improvement Allowance directly to the Original
Premises Contractor, Must-Take Space Contractor or other third parties entitled
to receive such funds or to Tenant for any amounts owed by Purchaser to Tenant
as reimbursements out of the Original Premises Tenant Improvement Allowance
and/or Must-Take Space Tenant Improvement Allowance under the Original Premises
Work Letter and/or Must-Take Space Work Letter, as the case may be.
Notwithstanding anything to the contrary herein, Purchaser’s liability, if any,
with respect to the Original Premises Tenant Improvement Allowance and/or the
Must-Take Space Tenant Improvement Allowance, shall not exceed the undisbursed
balance of the Original Premises Tenant Improvement Allowance or the Must-Take
Space Premises Tenant Improvement Allowance, as applicable.

 

  4. LANDLORD’S DEFAULT

Prior to pursuing any remedy available to Tenant under the Lease, at law or
equity as a result of any failure of Landlord to perform or observe any
covenant, condition, provision or obligation to be performed or

 

EXHIBIT F

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observed by Landlord under the Lease (any such failure hereinafter referred to
as a “Landlord’s Default”), Tenant shall: (a) provide Lender and Owner with a
notice of Landlord’s Default specifying the nature thereof, the Section of the
Lease under which same arose and the remedy which Tenant will elect under the
terms of the Lease or otherwise, and (b) allow each of Lender and Owner the
applicable cure period as provided in the Lease to cure the same, plus, except
when necessary to prevent an immediate threat to life or safety, an additional
thirty (30) days; provided, however, that if such Landlord’s Default is not
readily curable within such time period, Tenant shall give Lender or Owner, as
applicable, such additional time as Lender or Owner may reasonably need to
obtain possession and control of the Property and to cure such Landlord’s
Default so long as Lender or Owner, as applicable, is diligently pursuing a
cure. Tenant shall not pursue any remedy available to it as a result of any
Landlord’s Default unless Lender or Owner, as applicable, fails to cure same
within the time periods specified above. For purposes of this Paragraph, a
Landlord’s Default shall not be deemed to have occurred until all grace and/or
cure periods applicable thereto under the Lease have lapsed without Landlord
having effectuated a cure thereof.

 

  5. ASSIGNMENT OF LEASES AND RENTS

Tenant acknowledges that Landlord or its affiliate has collaterally assigned or
will collaterally assign to Lender all leases affecting the Property, including
the Lease, and the rents and other amounts, including, without limitation, lease
termination fees, if any, due and payable under such leases. In connection
therewith, Tenant agrees (and Landlord acknowledges and agrees) that, upon
receipt of a notice of a default by Landlord under such assignment and a demand
by Lender for direct payment to or as directed by Lender of the rents due under
the Lease, Tenant will honor such demand and make all subsequent rent payments
directly to or as directed by Lender. Landlord agrees that Tenant may rely on
such written notice from Lender without any duty of inquiry, authorizes Tenant
to make such payments, and releases Tenant from any claim or liability in
connection with such payments. Tenant’s payment of rents and other amounts,
including, without limitation, lease termination fees, if any, to Lender in
accordance with the foregoing will continue until the first to occur of the
following:

(a) no further rents and other amounts, including, without limitation, lease
termination fees, if any is due or payable under the terms of the Lease;

(b) Lender gives Tenant notice that Landlord has rectified the default that
existed in respect of its obligations under the terms of the Security Instrument
and instructs Tenant to make subsequent remittances of the rents and other
amounts, including, without limitation, lease termination fees, if any to
Landlord; or

(c) a transfer of the Property occurs and the new owner gives Tenant notice of
that transfer. The new owner will automatically succeed to Landlord’s interest
under the terms of the Lease, after which time the rents and other benefits
accruing in favor of Landlord under the terms of the Lease will be payable to
the new owner as the owner of the Property.

Tenant further agrees that any Lease termination fees payable under the Lease,
if any, shall be paid jointly to Landlord and Lender.

 

  6. NOTICES

Any notices, communications and waivers under this Agreement shall be in writing
and shall be: (i) delivered in person or (ii) by overnight express carrier,
addressed in each case as follows:

 

To Lender:    AB US REP AMERICA CENTER LLC       c/o AllianceBernstein      
1345 Avenue of the Americas       New York, New York 10105       Attention: Adam
Brooks    With a copy to:    Allen & Overy LLP       1221 Avenue of the Americas
      New York, New York 10020       Attention:    Kevin J. O’Shea, Esq.   
To Owner or Landlord:    LEGACY III SJ AMERICA CENTER I, LLC       and         
LEGACY III SJ AMERICA CENTER II, LLC       4000 East Third Avenue, Suite 600   
   Foster City, CA 94404       Attention:    Paul J. Meyer    With a copy to:   
Cox, Castle & Nicholson LLP       555 California Street, 10th Floor       San
Francisco, California 94104       Attention:    Richard H. Rosenthal, Esq.    To
Tenant:   

 

     

 

     

 

     

Attention:

  

 

EXHIBIT F

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or to any other address as to any of the parties hereto, as such party shall
designate in a written notice to the other party hereto. All notices sent
pursuant to the terms of this Section shall be deemed received (i) if personally
delivered, then on the date of delivery or (ii) if sent by overnight, express
carrier, then on the next federal banking day immediately following the day
sent.

 

  7. LEASE EXCLUSIVE AGREEMENT

Tenant represents and warrants to Lender that the Lease constitutes the entire
agreement between Tenant and Landlord thereunder with respect to the Property
and there are no other agreements, written or verbal, governing the tenancy of
Tenant with respect to the Property.

 

  8. ESTOPPEL CERTIFICATE

Tenant shall, from time to time, within fifteen (15) business days after request
by Lender, execute, acknowledge and deliver to Lender a statement in form and
substance reasonably acceptable to Lender and on which Lender may rely,
certifying as to such factual information respecting the Lease, Tenant and
Landlord as Lender may reasonably request.

 

  9. INSURANCE PROCEEDS

Lender shall have no interest in any insurance carried by Tenant, or any right
to direct the use of proceeds of any insurance carried by Tenant with respect to
the Premises other than property insurance related to the Original Premises
Tenant Improvements, and Must-Take Tenant Improvements, which shall be subject
to the terms and conditions of this Section 9; provided, however, that Lender
shall be named as an additional insured on all insurance policies which Tenant
is required under the Lease to maintain. So long as no Event of Default under
the Lease has occurred and is continuing and the Lease is in full force and
effect, Lender and Purchaser will (i) permit any proceeds paid in respect of the
property insurance related to the Original Premises Tenant Improvements, and
Must-Take Tenant Improvements that Tenant maintains in force in accordance with
the terms of the Lease to be used as provided in the Lease, and (ii) permit any
condemnation award paid in connection with a taking of any part of the Property
or any proceeds of a sale made in lieu of condemnation of a part of the Property
to be used as provided in the Lease. Lender and Purchaser may, however, impose
reasonable conditions on the time and manner of the disbursement of such
property insurance proceeds, condemnation awards or sales proceeds.

 

  10. SUCCESSORS AND ASSIGNS

This Agreement shall be binding upon and inure to the benefit of Lender, Owner,
Tenant, Landlord and Purchaser and their respective successors and assigns;
provided, however, that in the event of the assignment or transfer of the
interest of Lender hereunder, all obligations and liabilities of Lender under
this Agreement shall terminate, and thereupon all such obligations and
liabilities shall be the responsibility of the party to whom Lender’s interest
is assigned or transferred; and provided further that the interest of Tenant
under this Agreement may not be assigned or transferred other than to an
assignee of Tenant’s interest under the Lease, and any assignment of Tenant’s
interest under the Lease shall be subject to Lender’s prior written consent,
which may be granted or withheld in Lender’s reasonable discretion.

 

  11. GOVERNING LAW

This Agreement shall be deemed to be a contract entered into pursuant to the
laws of the State where the Property is located and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of the
State where the Property is located.

 

  12. AMENDMENTS TO LEASE

Tenant shall not agree to any material amendment or modification of the Lease
without first obtaining Lender’s consent thereto, which consent may be given or
withheld at Lender’s reasonable discretion (but such consent shall not be
required with respect to any amendment or modification as to which Lender’s
consent is not required to be obtained by Owner under the Security Agreement).

 

  13. MISCELLANEOUS

This Agreement satisfies any condition or requirement in the Lease relating to
the granting of a nondisturbance agreement, if any. Any option, right of first
refusal or other rights contained in the Lease, or otherwise existing, to
acquire all or any portion of the Property are hereby made subject and
subordinate to the rights of Lender under the Security Agreement. This Agreement
may not be modified in any manner or terminated except by an instrument in
writing executed by the parties hereto. If any portion or portions of this
Agreement shall be held invalid or inoperative, then all of the remaining
portions shall remain in full force and effect, and, so far as is reasonable and
possible, effect shall be given to the intent manifested by the portion or
portions held to be invalid or inoperative. This Agreement may be executed in
any number of duplicate originals and each duplicate original shall be deemed to
be an original. This Agreement may be executed in several counterparts, each of
which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Agreement. The failure of any party hereto to
execute this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder. Whenever the context may require,
any pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa. This Agreement constitutes the entire agreement between
the parties hereto regarding the subordination of the Lease to the Security
Instrument and the rights and obligations of parties hereto as to the subject
matter of this Agreement, all prior agreements as to the subject matter of this
Agreement being merged hereto.

 

EXHIBIT F

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.

 

LENDER:

AB US REP AMERICA CENTER LLC,

a Delaware limited liability company

By:  

 

  (SEAL)
Name:  

 

Title:  

 

TENANT:

 

  , a  

 

By:  

 

Name:  

 

Title:  

 

 

OWNER/LANDLORD:   

LEGACY III SJ AMERICA CENTER I, LLC,

a Delaware limited liability company

   By:   Legacy III SJ AC Investments, LLC,     

a Delaware limited liability company,

its Sole Member

    

By:

  Legacy America Center Associates, LLC,       

a Delaware limited liability company,

its Sole Member

       By:   Legacy Partners Realty Fund III, LLC,         

a Delaware limited liability company,

its Administrative Member

         By:   Legacy Partners Investment Management Services, LLC,            a
Delaware limited liability company,            its Managing Member           
By:   

 

           Name:   

 

           Title:   

 

  

 

EXHIBIT F

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LEGACY III SJ AMERICA CENTER I, LLC,    a Delaware limited liability company   
By:   Legacy III SJ AC Investments, LLC,     

a Delaware limited liability company,

its Sole Member

     By:   Legacy America Center Associates, LLC,       

a Delaware limited liability company,

its Sole Member

       By:   Legacy Partners Realty Fund III, LLC,         

a Delaware limited liability company,

its Administrative Member

        

By:

  Legacy Partners Investment Management Services, LLC,            a Delaware
limited liability company,            its Managing Member            By:   

 

           Name:   

 

           Title:   

 

  

 

EXHIBIT F

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ACKNOWLEDGMENT

 

State of California

   )

County of

   )

On                     , 2011, before me,
                                                             , Notary Public,
personally appeared                                          
                   , who proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

Signature

 

 

  

(Seal)

ACKNOWLEDGMENT

 

State of California

   )

County of

   )

On                     , 2011, before me,
                                                             , Notary Public,
personally appeared                                          
                   , who proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

Signature

 

 

  

(Seal)

 

EXHIBIT F

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ACKNOWLEDGMENT

 

State of California

   )

County of

   )

On                     , 2011, before me,
                                                             , Notary Public,
personally appeared                                          
                   , who proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

Signature

 

 

  

(Seal)

ACKNOWLEDGMENT

 

State of California

   )

County of

   )

On                     , 2011, before me,
                                                             , Notary Public,
personally appeared                                          
                   , who proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

Signature

 

 

  

(Seal)

 

EXHIBIT F

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Exhibit A to Subordination, Nondisturbance and Attornment Agreement

LEGAL DESCRIPTION

 

Exhibit A to

Subordination,

Nondisturbance and

Attornment

Agreement

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LANDLORD’S SIGNAGE CRITERIA

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EXHIBIT H

LOCATION OF GENERATOR SITE

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EXHIBIT I

DEPICTION OF TENANT’S PARKING AREA

[ATTACHED AS THE IMMEDIATELY FOLLOWING PAGE]

 

EXHIBIT I

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EXHIBIT J

BASE BUILDING DESCRIPTION- 6001 Building

 

  1. Project Description

 

a. The campus consists of 2 six story mid-rise Class A office buildings with a
two story atrium at the main entry to each building. Each building has
approximately 213,800 SF

 

  b. The structural system is a braced frame steel superstructure supported on a
pile supported foundation system. This allows for a minimal number of interior
columns allowing flexibility in the interior layout.

 

  c. The buildings have been designed to incorporate Green Building features,
including 30% water use reduction, optimized energy performance, green power,
low-emitting materials, FSC certified wood products and optimized day-lighting
and views. Both building have been certified LEED-Core and Shell Gold by the
USGBC.

 

  d. The buildings skin is a combination of precast Gypsum Fiberglass Reinforced
Concrete panels (GFRC) and curtain-wall with energy efficient glazing

 

  e. All floors have floor to ceiling glazing which optimizes views and
day-lighting. The ground floor has a floor to floor height of 15’-0” allowing
for a finished ceiling height of 10’-0”. The typical floors 2 thru 5 have a
floor to floor height of 13’-6” allowing for a finished ceiling height of 9’-6”.
The 6th floor has a floor to floor height of 14’-0” allowing for a finished
ceiling height of 10’-0”. Window coverings are provided by the landlord.

 

  f. The campus has a total of 1496 surface parking spaces along with preferred
parking for handicap, car pool and fuel efficient vehicles. There are also 24
motorcycle stalls and bicycle racks adjacent to each entry point. Parking for
Tenant shall be per the lease.

 

  2. Building Core and general improvement

 

a. Each building has 4 (3 passenger + 1 swing) Otis Gen 2, machine room less
traction elevators that operate at 350 fpm with a capacity of 3,500 lbs. serving
all floors. Each car is completed with cab finishes and has security card reader
access in each cab.

 

  b. Each building has 2 exit stairs at each end of the building core. The
second floor has a balcony adjacent to the elevator bank that overlooks the main
entry lobby and connects the adjacent lease space. The balcony railing is a
stainless steel rail with glass panels.

 

  c. All exterior glazing have been provided with 1” horizontal mini blinds

 

  d. All columns, window sills and core framing have been covered with dry wall
ready for tenant’s electrical work and finishes.

 

  3. Restrooms & Plumbing System

 

  a. The restrooms for each building stack up the building and have tiled floors
and walls, drywall ceilings, stainless steel ceiling hung partitions and granite
counters. Restrooms are completed and built to meet local codes based on normal
office use densities, local building codes and all ADA required standards

 

  b. All toilet fixtures are wall hung with dual flush valves, urinals are
motion sensor operated flush valves. Lavatories are porcelain stainless steel
under-mount bowls with solar powered sensor type faucets. All restrooms are ADA
compliant.

 

  c. The ground floor restrooms each have 2 shower stalls with adjacent lockers
and changing areas.

 

  d. Janitor closets have floor mounted sinks with wall mount faucets. Floor
drains are in each restroom, trap primed in accordance with 2000 UPC.

 

  e. The domestic hot water for the core restrooms and janitor closets have been
shall be supplied from a gas hot water storage type heater, located on the roof
serving all floors. The hot water system is re-circulated.

 

  f. Plumbing system has been sized to accommodate typical office building
tenant build outs. Domestic water service is sized at 4” and the waste is sized
at 6”. Landlord will provide domestic cold water line stubs to each floor of
Tenant’s occupancy.

 

  4. Fire and life safety system

 

  a. Fire Alarm System

Fire Protection system has been designed and installed in accordance with
NFPA-13 and the requirements of the City of San Jose Fire Department. A fully
addressable detection system has been provided. Photoelectric smoke detectors
are located in the elevator lobbies, corridors, electrical rooms, mechanical
rooms and telephone rooms. Duct smoke detectors are provided in supply and
return ducts as required by code. Pull stations are located at all exits and
other locations as required by code. Audio and visual devices are located as
required to meet code and ADA requirements. Thermal detectors will be located in
the elevator shafts to initiate elevator power shut down as required by the
elevator code. Addressable devices will monitor sprinkler system flow and tamper
switches and control operations of smoke dampers, elevator recall, shutdown of
mechanical equipment and elevator power shutdown.

 

  b. Fire protection

The entire building has complete fire protection system per NFPA requirement
with sprinkler heads turned up for full coverage. The standpipes are provided at
each stair tower.

 

EXHIBIT J

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  5. HVAC System Description

General System Configuration

 

a. Each building is served by (4) evaporative cooling units on the roof that
supply a total cooling capacity for the building of 460 tons, and, sized for
future office tenants, that allow for summer temperatures to be 72 degrees F +/-
2 degrees and winter to be 70 degrees F +/- 2 degrees in the tenant spaces.

 

  b. General supply and exhaust are provided for core areas including public
toilets, janitor’s closets, electrical closets and public circulation. Toilet
exhaust is supplied shall be at the rate of 2 cfm/sf. Exhaust for toilet rooms
will be separated from elevator shaft or other air intake grilles to prevent
odor infiltration into the building.

 

  c. Each buildings HVAC system supplies fresh air with supply and return fans
each controlled by variable frequency drives.

HVAC Duct System

 

d. Ducting Systems: All duct systems downstream of the H.V.A.C. fan coil units
shall be rigid sheet metal; final connection to ceiling diffusers and grilles
shall be with single 6-foot length of acoustical “wire-flex” duct. All outside
air ductwork is rigid sheet metal as well.

 

  e. Landlord has installed or will install as part of its work, the medium
pressure duct loop according to Building Shell Drawings on all floors of the
building. The duct loop shall be designed and installed to allow for a minimum
ceiling height for the acoustic ceiling to be 9’-0” in all areas.

Control System

 

  f. The building control system is be a (DDC) Direct Digital Control with a PC
located in the building manager’s office for energy management and control. They
system also has a web based functionality to allow remote operation.

HVAC System Design Calculations

Basis of Design: Cooling Loads

1.2 watts per usable sf of lighting

3 watts per usable sf of power

1 person/143 sf total building including rent space, core and lobbies

Basis of Design: Ventilation

20 cfm per person office and common areas

20 cfm per person service areas lobbies and vending areas

20 cfm per person meeting and assembly areas

 

  6. Electrical System Description

 

a. Lighting System

High efficiency lighting has been specified throughout the building core and
public areas. The lobbies have a combination of recessed compact fluorescent
down lights with metal halide down lights in the multi-story spaces. Custom wall
sconces have been added for accent lighting. The restrooms have recessed compact
fluorescents along with strip lights in a cove above the lavatory counter and
rear wet wall. Stairwells have 4’-0”, 2-lamp wall mounted fluorescents fixtures
with electronic ballasts, T-5 lamps and wrap around acrylic lens. Service rooms
have 4’-0”, 2-lamp fluorescent strip fixtures. All exit and egress lighting is
per code and include integral battery ballasts.

 

  b. Power

Main building power comes from a 4,000 ampere, 277/480 volt, 3-phase, 4-wire
secondary service from the utility transformer to the main switchboard. The fire
pump service disconnect is fed from the same service. The house panels include a
277/480 volt panel board, a 480-120/208 volt dry-type transformer and a 120/208
volt panel board. Mechanical units and the elevator machine room are fed from
feeders from the main switchboard. Step down transformers and 120/208 volt
panels are provided at the electrical room on each floor, sized to provide 3
watts per sf for office equipment loads and convenience power.

 

  c. Tele-communications

The main telephone equipment room is located at the ground floor. Two sets of
(2) 4 inch conduits has been extended from the utility company’s vault to main
telephone room. One conduit of each set will contain (3) 1-1/4 inch inner ducts
for installation of fiber cables. Two 4 inch sleeves are installed through each
floor to permit installation of telephone cable to telephone rooms on the upper
floors. Each telephone room has  3/4 inch fire rated plywood, floor to ceiling
backboards on (3) walls of the main telephone room and (1) wall of the secondary
telephone rooms.

 

  d. Security System

The security system consists of a card access system for all building entrance
locations with a CCTV system monitoring all entrances and exits.

 

  e. Electrical System Design Criteria

Codes, Guidelines and Standards: The equipment, design, materials and
installation meet or exceed the requirements as set forth in the following
codes, guidelines and standards. CBC, CEC, CFC, IEEE, IESNA, NEC, NECA, NESC,
NFPA, UFC & UL. All State, Local, County and City Ordinances shall also apply.

 

  f. Electrical System Design Calculations

Receptacle and equipment loads for core and shell at 1 watt/sf

Receptacle and equipment loads for usable tenant space at 3 watts/sf

 

EXHIBIT J

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Lighting loads at 1.2 watts / sf

Mechanical equipment load is based on core and shell design. An additional 3.5
watts/sf in spare capacity is available.

Dedicated computer or equipment rooms at 50 watts/sf to a maximum of 5,000sf.

 

EXHIBIT J

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EXHIBIT K

LIST OF BASE BUILDING PLANS

America Center Phase I – Shell Only

6001 & 6201 America Center Drive

San Jose, CA

Composite Set Issued 03.04.2009

Sheet Index

 

Binding 1    Cover Sheet    A0.00    Index to Drawings – Binding 1 A0.01   
Index to Drawings – Binding 2 A0.02    Project Information A0.03   
Accessibility Notes A0.04    Accessibility Notes A0.05    Code Variance
Approvals Civil    C1.1    Notes, Legends and Abbreviations C2.1    Horizontal
Control and Traffic Marking Plan C2.2    Horizontal Control and Traffic Marking
Plan C3.1    Grading Plan C3.2    Grading Plan C3.3    Detailed Grading Plan –
Lot G C3.4    Detailed Grading Plan – Lots H, I & J C3.5    Detailed Grading
Plan – Lot D C3.6    Detailed Grading Plan – Lots C & F C4.1    Utility Plan
C4.2    Utility Plan C5.1    Civil Details C5.2    Civil Details C5.3    Civil
Details C5.4    Civil Sections C5.5    Civil Details C5.6    Civil Details C6.1
   Civil Sections C7.1    Erosion Control Plans C7.2    Erosion Control Plans
C7.3    Erosion Control Plans 3.2    Street Intersections – Enlarged Plan 3.3   
Pavement Details – Typical Street Sections 3.8    Cathodic Protection and
Filterra Details Landscape    L1.1    Landscape Layout Plan L1.2    Landscape
Layout Plan L1.3    Landscape Layout Plan L1.4    Landscape Layout Plan L1.5   
Landscape Layout Plan L1.6    Landscape Layout Plan L2.1    Grading Plan L2.2   
Grading Plan L2.3    Grading Plan L2.4    Grading Plan L2.5    Grading Plan L2.6
   Grading Plan L3.1    Planting Plan L3.2    Planting Plan L3.3    Planting
Plan L3.4    Planting Plan L3.5    Planting Plan L3.6    Planting Plan L4.1   
Irrigation Plan L4.2    Irrigation Plan L4.3    Irrigation Plan L4.4   
Irrigation Plan L4.5    Irrigation Plan L4.6    Irrigation Plan

 

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L5.1    Paving and Hardscape Details L5.2    Paving and Hardscape Details L5.3
   Irrigation Details Gas Mitigation    MT1.01    Methane Mitigation System –
Building 1 Plan MT1.02    Methane Mitigation System – Building 2 Plan MT1.03   
Methane Mitigation System – Buildings 2 & 1 Details MT1.04    Methane Mitigation
System – Buildings 2 & 1 Details MT2.01    Methane Monitoring System Bldg. 1
MT2.02    Methane Monitoring System Bldg. 2 MT3.01    Methane Mitigation System
Pavement Venting South Area MT3.02    Methane Mitigation System Pavement Venting
North Area MT3.03    Methane Mitigation System Pavement Venting East Area MT3.04
   Methane Mitigation System Pavement Venting Details Architectural    A1.00   
Overall Site Development Plan A1.00A    Site Access Master Plan A1.01   
Architectural Site Plan ALS.01    Building 2 Life Safety Plans ALS.02   
Building 2 Life Safety Plans ALS.03    Building 1 Life Safety Plans ALS.04   
Building 1 Life Safety Plans A2.11    Building 2 Ground Floor Plan A2.12   
Building 2 Second Floor Plan A2.13    Building 2 Typical Floor Plan (3-6) A2.14
   Building 2 Roof Plan A2.15    Building 2 & 1 Service Yard Plans A2.16   
Building 2 & 1 Service Yard Details A2.17    Building 2 Loading Dock Details
A2.18    Building 1 Loading Dock Details A2.21    Building 1 Ground Floor Plan
A2.22    Building 1 Second Floor Plan A2.23    Building 1 Typical Floor Plan
(3-6) A2.24    Building 1 Roof Plan A2.30    Roof Details A2.31    Mechanical
Screen and Penthouse Roof Details A2.32    Mechanical Screen and Penthouse Roof
Details A2.41    Building 2 Ground Floor Finish Plan A2.42    Building 2 Second
Floor Finish Plan A2.43    Building 2 Typical Floor Finish Plans (3-6) A2.51   
Building 1 Ground Floor Finish Plan A2.52    Building 1 Second Floor Finish Plan
A2.53    Building 1 Typical Floor Finish Plans (3-6) A3.00    Partition Types
A3.01    Partition Head and Framing Details A3.02    Gyp Board & Metal
Fabrication Details A3.03    UL Design Assemblies A3.20    Toilet Layouts & Std
Accessories and Details A3.30    Door Safety Glazing, Louver Info & Door Details
A3.31    Door & Hardware Schedules A3.40    Finish Information A3.60    Interior
Lobby Elevations A3.61    Interior Lobby Elevations A3.62    Typical Interior RR
Elevations A3.63    Typical Interior RR Details A3.70    Typical Elevator Cab
Plans & Elevations A3.71    Typical Elevator Cab Details A3.80    Typical
Interior Lobby Details A3.81    Typical Interior Lobby Details A4.11    Building
2 Ground Floor RCP A4.12    Building 2 Second Floor RCP A4.13    Building 2
Typical Floor RCP (3-6) A4.20    Building 1 Ground Floor RCP A4.21    Building 1
Second Floor RCP A4.22    Building 1 Typical Floor RCP (3-6) A4.30    RCP
Details A5.10    Building 2 Exterior Elevations A5.11    Building 2 Exterior
Elevations A5.20    Building 1 Exterior Elevations A5.21    Building 1 Exterior
Elevations A5.30    Typical Window Types A5.31    Typical Window Types A5.32   
Typical Window Types

 

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A6.10    Wall Sections A6.11    Wall Sections A6.12    Wall Sections A6.13   
Wall Sections A7.00    Section Details A7.01    Section Details A7.02    Section
Details A7.03    Section Details A7.10    Typical Plan Details A7.11    Typical
Plan Details A7.12    Typical Plan Details A7.13    Direct Bond Plaster Details
A7.20    Plan & Section Details A7.21    Section Details A8.10    Steel Stair
Sections A8.11    Typical Stair Details A8.20    Typical Elevator Details
Binding 2    Structural    S1.01    General Notes S1.02    Typical Details S1.03
   Typical Details S2.111    Building 1 Ground Floor Foundation Plan S2.112   
Building 1 Second Floor Framing Plan S2.113    Building 1 Typical Floor Framing
Plan S2.114    Building 1 Roof Framing Plan S2.115    Building 1 Penthouse Roof
Framing Plan S2.211    Building 2 Ground Floor Foundation Plan S2.212   
Building 2 Second Floor Framing Plan S2.213    Building 2 Typical Floor Framing
Plan S2.214    Building 2 Roof Framing Plan S2.215    Building 2 Penthouse Roof
Framing Plan S3.01    Building 1 Frame Elevations S3.02    Building 2 Frame
Elevations S3.03    Braced Frame Details S3.04    Braced Frame Details S4.01   
Foundation Details S4.02    Foundation Details S4.03    Foundation Details S5.01
   Steel Details S5.02    Steel Details S5.03    Steel Details S5.04    Steel
Details S5.05    Steel Details S5.06    Steel Details S5.07    Steel Details
S5.08    Steel Details S5.09    Steel Details Mechanical    M0.001    Mechanical
Legend, Abbreviations and Drawing List M0.002    Mechanical Building 2 & 1
Schedules M0.003    Mechanical Bldg. 2 Title 24 M0.004    Mechanical Bldg. 2
Title 24 M0.005    Mechanical Bldg. 2 Title 24 M0.006    Mechanical Bldg. 1
Title 24 M0.007    Mechanical Bldg. 1 Title 24 M0.008    Mechanical Bldg. 1
Title 24 M2.111    Mechanical Bldg. 2 Ground Floor plan M2.112    Mechanical
Bldg. 2 Second Floor Plan M2.113    Mechanical Bldg. 2 Typical (3-6) Floor Plan
M2.113A    Mechanical Bldg. 2 Typical (3-6) Preliminary Tenant Layouts M2.115   
Mechanical Bldg. 2 Penthouse Roof Plan M2.211    Mechanical Bldg. 1 Ground Floor
plan M2.212    Mechanical Bldg. 1 Second Floor Plan M2.213    Mechanical Bldg. 1
Typical (3-6) Floor Plan M2.213A    Mechanical Bldg. 1 Typical (3-6) Preliminary
Tenant Layouts M2.215    Mechanical Bldg. 1 Penthouse Roof Plan M3.101   
Mechanical Bldg. 2 Sections M3.102    Mechanical Bldg. 1 Sections M4.101   
Mechanical Bldg. 2 Air and Water Riser Diagrams M4.102    Mechanical Bldg. 1 Air
and Water Riser Diagrams M5.101    Mechanical Heating Hot water Piping Diagram

 

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M6.101    Mechanical Details M6.102    Mechanical Details M6.103    Mechanical
Details M7.101    Mechanical Control Diagrams M7.102    Mechanical Control
Diagrams M7.103    Mechanical Control Diagrams Electrical    E0.001    Legend
and Abbreviations E0.102    Electrical Title 24 Building 2 E0.102A    Electrical
Title 24 Building 2 Exterior E0.202    Electrical Title 24 Building 1 E0.202A   
Electrical Title 24 Building 1 Exterior E0.003    Electrical Schedules E0.004   
Electrical Schedules E0.005    Electrical Schedules E0.006    Electrical
Schedules E0.007    Electrical Schedules E0.008    Electrical Schedules E0.009
   Electrical Schedules E0.010    Electrical Schedules E0.011    Electrical
Schedules E1.000    Electrical Site Plan E1.001    Lighting Enlarged Site Plan
E2.111-P    Electrical Bldg. 2 Ground Floor Power Plan E2.111-L    Electrical
Bldg. 2 Ground Floor Lighting Plan E2.112    Electrical Bldg. 2 Second Floor
Plan E2.113    Electrical Bldg. 2 Typical Floor (3-6) Plan E2.115    Electrical
Bldg. 2 Penthouse Plan E2.211-P    Electrical Bldg. 1 Ground Floor Power Plan
E2.211-L    Electrical Bldg. 1 Ground Floor Lighting Plan E2.212    Electrical
Bldg. 1 Second Floor Plan E2.213    Electrical Bldg. 1 Typical Floor (3-6) Plan
E2.215    Electrical Bldg. 1 Penthouse Plan E3.000    Enlarged Electrical Room
E4.001    Electrical Riser Diagrams E4.002    Fire Alarm Riser Diagrams E5.000
   Electrical Details E5.001    Electrical Details Plumbing    P0.001   
Plumbing Legend and Abbreviations P0.002    Plumbing Schedules P2.110   
Plumbing Bldg. 2 Under Floor Plan P2.111    Plumbing Bldg. 2 Ground Floor Plan
P2.112    Plumbing Bldg. 2 Second Floor Plan P2.113    Plumbing Bldg. 2 Typical
Floor (3-5) Plan P2.114    Plumbing Bldg. 2 Sixth Floor Plan P2.115    Plumbing
Bldg. 2 Roof Plan P2.116    Plumbing Bldg. 2 Penthouse Roof Plan P2.210   
Plumbing Bldg. 1 Under Floor Plan P2.211    Plumbing Bldg. 1 Ground Floor Plan
P2.212    Plumbing Bldg. 1 Second Floor Plan P2.213    Plumbing Bldg. 1 Typical
Floor (3-5) Plan P2.214    Plumbing Bldg. 1 Sixth Floor Plan P2.215    Plumbing
Bldg. 1 Roof Plan P2.216    Plumbing Bldg. 1 Penthouse Roof Plan P3.001   
Plumbing Bldg. 2 Enlarged Plans P3.002    Plumbing Bldg. 1 Enlarged Plans P3.003
   Plumbing Utility Yard Partial Plans Bldg. 2 & 1 P4.100    Plumbing Riser
Diagram P4.001    Plumbing Domestic Water Riser Diagram P4.002    Plumbing Gas
Riser Diagram P4.003    Plumbing Sanitary/Vent Riser Diagram P4.004    Plumbing
Storm Drainage Riser Diagram P4.005    Fire Standpipe/Sprinkler Riser Diagram
P5.001    Plumbing Details

 

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EXHIBIT L

FIFTH FLOOR SPECULATIVE SPACE PLAN

 

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EXHIBIT M

EXPECTED USEFUL LIFE OF BUILDING HVAC/ELEVATOR SYSTEMS AND EQUIPMENT

HVAC Equipment1

America Center Bldg 1

 

Manufacturer

  

Unit

  

Model No.

  

Life

Expectancy

  

Serial No.

Flowtherm    DWBP-1    335VB-2    15    F0872102 A.O Smith    GWH-1   
BTP-150-199    15    Aerco    B-1-R-1    KC-1000LN    15    G-08-1582 Aerco   
B-1-R-2    KC-1000LN    15    G-08-1584 Aerco    B-1-R-3    KC-1000LN    15   
G-08-1583 Bell & Gossett    HWP-1-R-1    1531 1.5AC    15    PH004644C Bell &
Gossett    HWP-1-R-2    1531 1.5AC    15    PH004644B Bell & Gossett   
HWP-1-R-3    1531 1.5AC    15    PH004644A Greenheck    EF-1-1-1    BSQ-90-4   
20    11397-421-0607 Greenheck    EF-1-1-2    BSQ-120-4X    20    11397-422-0807
Greenheck    EF-1-R-1    SWB-22450CWTHX    20    11396-691-0807 Greenheck   
Pump Room    BSQ-130-HP-4X    20    11397-423-0807 Greenheck    5TH Floor   
BSQ-80-4X    20    11397-424-0807 Greenheck    6TH Floor    BSQ-80-4X    20   
11397-426-0807 Greenheck    4TH Floor    BSQ-80-4X    20    11397-425-0807
Greenheck    3RD Floor    BSQ-80-4X    20    11397-427-0807 Greenheck    2ND
Floor    BSQ-80-4X    20    11397-428-0807 Greenheck    EF-1-X-1    BSQ-80-4X   
20    11397-421-0807 Greenheck    EF-1-R-2    SWB-22460CWTHX    20   
114268250808 Energy Labs    AC-1-R-1    C103118-F-R-L    20    08053647-1-R-1
Energy Labs    AC-1-R-2    C103118-F-R-L    20    08053647-1-R-2 Energy Labs   
AC-1-R-3    C103118-F-R-L    20    08053647-1-R-3 Energy Labs    AC-1-R-4   
C103118-F-R-L    20    08053647-1-R-4 McQuay    AC-1    MPS005A    15    Goulds
   Pump    33SVB-2    12    F0872102 Goulds    Pump    33SVB-2    12    F0872101

 

1. Life expectancy of HVAC Equipment is based upon an assumption of sixty
(60) hours of operation per week.

Elevators

America Center Bldg 1

 

Manufacturer

  

Capacity

  

Speed

  

Life

Expectancy

  

Contract No.

Elevator 1 – Otis Gen 2 Elevator, Drive Machine (motor), Controller, Motor
Drive & Door Operator    3,500 lb capacity    350 fpm    30 years    734686
Elevator 2 – Otis Gen 2 Elevator, Drive Machine (motor), Controller, Motor
Drive & Door Operator    3,500 lb capacity    350 fpm    30 years    734687
Elevator 3 – Otis Gen 2 Elevator, Drive Machine (motor), Controller, Motor
Drive & Door Operator    3,500 lb capacity    350 fpm    30 years    734688
Elevator 4 – Otis Gen 2 Elevator, Drive Machine (motor), Controller, Motor
Drive & Door Operator    4,000 lb capacity    350 fpm    30 years    734689

 

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EXHIBIT N

PRELIMINARY CONCEPTUAL PLANS

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EXHIBIT O

FORM OF ESCROW AGREEMENT

[NOTE: A SEPARATE ESCROW AGREEMENT WILL BE ENTERED INTO FOR EACH OF THE ORIGINAL
PREMISES OVER-ALLOWANCE AMOUNT AND THE MUST-TAKE SPACE OVER-ALLOWANCE AMOUNT]

This Escrow Agreement (this “Agreement”) is made as of this      day of
            , 20    , by and among LEGACY III SJ AMERICA CENTER I, LLC, a
Delaware limited liability company, having an address of c/o Legacy Partners
Commercial, Inc., 4000 East Third Avenue, Suite 600, Foster City, California
94404-4805, Attention: Regional Vice President (“Landlord”), POLYCOM, INC., a
Delaware corporation, having an address of 6001 America Center Drive, San Jose,
California 95002, Attention: Corporate Real Estate (“Tenant”), and FIRST
AMERICAN TITLE INSURANCE COMPANY, having an address of                     
(“Escrow Agent”).

RECITALS

A. Landlord and Tenant are parties to that certain Lease dated August 4, 2011
(the “Lease”) with respect to certain premises (the “Premises”) comprising the
entire rentable area of that certain building located at 6001 America Center
Drive, San Jose, California 95002. All initially capitalized terms not defined
herein shall have the same meanings as set forth in the Lease.

B. Pursuant to the Lease, Landlord is obligated to supervise the construction
of, and retain a general contractor to construct, the [Original Premises Tenant
Improvements/Must-Take Space Tenant Improvements]. The design, permitting and
construction of the [Original Premises Tenant Improvements/Must-Take Space
Tenant Improvements] shall be referred to herein as the “Escrowed Funds Work”.
Pursuant to the Lease, Tenant is entitled to receive from Landlord a one-time
[Original Premises Tenant Improvement Allowance/Must-Take Space Tenant
Improvement Allowance] in the amount of up to, but not exceeding $        , to
help Tenant pay for the costs of the Escrowed Funds Work.

C. Pursuant to the [Original Premises Cost Proposal/Must-Take Space Cost
Proposal] approved by Tenant in accordance with Section 4.2.1 of the [Original
Premises Work Letter/Must-Take Space Work Letter] attached to the Lease as
Exhibit    (the “Work Letter”), the [Original Premises Over-Allowance
Amount/Must-Take Space Over-Allowance Amount] is initially an amount equal to
$        .

D. The purpose of this Agreement is to set forth the terms on which the Escrowed
Funds (as defined below) shall be held by Escrow Agent, and the conditions under
which the Escrowed Funds shall be disbursed.

NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, Landlord,
Tenant and Escrow Agent hereby agree as follow:

 

1. Escrowed Funds. Concurrently with the execution of this Agreement by all
parties, Tenant shall deposit with Escrow Agent an amount equal to the [Original
Premises Over-Allowance Amount/Must-Take Space Over-Allowance Amount] (i.e.,
$        ) (the “Escrowed Funds”). Tenant shall deposit with Escrow Agent
additional funds increasing the amount of the Escrowed Funds, from time to time,
if and to the extent required pursuant to Section 4.2.2 of the Work Letter.
Escrow Agent shall hold and disburse the Escrowed Funds strictly in accordance
with the terms of this Agreement.

 

2. Escrow Account. Escrow Agent shall deposit the Escrowed Funds in a separate
account (the “Escrow Account”) and shall invest such Escrowed Funds in a
federally-insured interest-bearing money market or similar type account.

 

3. Disbursement of Escrowed Funds. So that Landlord may pay for the costs of any
completed Escrowed Funds Work, the Escrowed Funds shall be disbursed to Landlord
in the following manner: within one (1) business day after receipt by Escrow
Agent from Landlord of Landlord’s written request for disbursement (herein, a
“Disbursement Request”) indicating the amount of the Escrowed Funds to be
disbursed to pay for Tenant’s “pro rata share” of such costs (as determined
pursuant to Section 4.2.2 of the Work Letter) (herein, the “Disbursement
Amount”), together with (i) invoices from the applicable contractor(s),
subcontractor(s) and other third parties (collectively, the “Construction
Parties”) who performed such applicable Escrowed Funds Work evidencing such
costs, and (ii) a written statement from Landlord certifying the amount set
forth on such invoice that constitutes (A) Landlord’s “pro rata share” of the
amount set forth on each such invoice, and (B) the Disbursement Amount (i.e.,
Tenant’s “pro rata share” of the amount set forth on each such invoice), Escrow
Agent shall disburse to Landlord in accordance with the payment instructions
attached hereto as Exhibit A, or as otherwise directed by Landlord, from the
Escrowed Funds, the amount of the applicable Disbursement Amount so requested by
Landlord to be disbursed in the applicable Disbursement Request. It is
anticipated that Landlord shall be delivering to Escrow Agent Disbursement
Requests for disbursement of portions of the Escrowed Funds from time to time
during the course of the construction of the Escrowed Funds Work.
Notwithstanding anything in the foregoing to the contrary, if, following the
final completion of the Escrowed Funds Work, any Escrowed Funds remain in the
Escrow Account, then Landlord shall deliver to Escrow Agent a Disbursement
Request requesting disbursement to Landlord of such remaining Escrowed Funds
(which Disbursement Request shall not be required to be accompanied by the items
described in clauses (i) and (ii) hereinabove), and within one (1) business day
after receipt by Escrow Agent of such Disbursement Request, Escrow Agent shall
disburse to Landlord in accordance with the payment instructions attached hereto
as Exhibit A, or as otherwise directed by Landlord, the remaining amount of the
Escrowed Funds in the Escrow Account.

 

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4. Costs of Escrow Account. Tenant shall each pay to Escrow Agent its fee of
$1,000.00. No other fees or charges shall be payable to Escrow Agent in
connection with this Escrow Agreement or the management and/or maintenance of
the Escrow Account.

 

5. Close of Escrow. The close of escrow (the “Close of Escrow”) shall occur upon
the date which is the earliest to occur of: (i) the date the Escrowed Funds have
been disbursed in their entirety; and (ii) the date which is twelve (12) months
after the date that [Substantial Completion of the Original Premises Tenant
Improvements/Substantial Completion of the Must-Take Space Tenant Improvements
(as defined in the Work Letter)] occurs; and (iii) the date that is three
(3) years after the date of mutual execution and delivery of this Agreement
(regardless of whether [Substantial Completion of the Original Premises Tenant
Improvements/Substantial Completion of the Must-Take Space Tenant Improvements]
has occurred. Upon the Close of Escrow, Escrow Agent shall disburse to Tenant
(A) any remaining portion of the Escrowed Funds (if any), and (B) the interest
on the Escrowed Funds, all in accordance with the payment instructions attached
hereto as Exhibit B, or as otherwise directed by Tenant.

 

6. Notices. Unless otherwise specifically set forth herein, any notice required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given when deposited in a United States Post Office,
registered or certified mail, postage prepaid, return receipt required, or with
a reputable overnight courier service providing proof of service or when
transmitted via facsimile telecopier with confirmation of successful
transmission, and addressed to the intended addressee at its applicable address
set forth in the opening paragraph of this Agreement. Whenever a party hereunder
shall give a notice to Escrow Agent such party shall also give a notice to the
other party.

 

7. Enforcement. If any party hereto fails to perform any of its obligations
under this Agreement or if a dispute is raised between the parties hereto
concerning the meaning or interpretation of any provision of this Agreement,
then the party not prevailing in such dispute shall pay any and all costs and
expenses incurred by the other party or parties on account of such default
and/or in enforcing or establishing its rights hereunder, including, without
limitation, courts costs and attorneys’ fees and disbursements. Any such
attorneys’ fees and other expenses incurred by a party in enforcing a judgment
in its favor under this Agreement 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
Agreement and to survive and not be merged into any such judgment.

 

8. Sole Parties. This Agreement is made exclusively for the benefit of and
solely for the protection of the parties hereto, and no other person of persons
shall have the right to enforce the provisions of this Agreement by action or
legal proceeding or otherwise or to rely on any representation, certification,
damnation, or covenants made hereunder.

 

9. Governing Law. This Agreement shall be governed by the laws of the State of
California.

 

10. Time of the Essence. Time shall be of the essence in every particular of
this Agreement.

 

11. Counterparts. This Agreement may be executed in one or more counterparts
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

 

12. Escrow Agent: The parties hereto agree that Escrow Agent’s only obligations
hereunder shall be to hold the Escrowed Funds as Escrow Agent hereunder and to
disburse said funds pursuant to the terms of this Agreement. Tenant and Landlord
acknowledge that Escrow Agent is acting solely as a stakeholder at their request
and for their convenience, that Escrow Agent shall not be deemed to be the agent
of any of the parties hereto, and that Escrow Agent shall not be liable to any
of the parties hereto for any act or omission on its part unless taken or
suffered in bad faith, in willful disregard of this Agreement or involving
negligence. Escrow Agent shall have no responsibility for, and shall not be
concerned with, any agreements between the parties hereto, except as
specifically provided in this Agreement. Escrow Agent may interplead any matter
of this escrow at any time in regard to any controversy among the parties which
cannot be resolved in a reasonable time among the parties, as to appropriate
interpretation of these instructions or distribution of funds in said escrow
account which cannot be resolved in a reasonable time, or in regard to any suit
on this escrow brought against Escrow Agent from any source. The parties hereto
shall indemnify Escrow Agent and hold Escrow Agent harmless from and against any
and all actions, suits, claims, demands, liabilities, losses, damages,
obligations and costs and expenses (including litigation costs and reasonable
attorneys’ fees and expenses) arising from or in any way connected with the
holding of the Escrowed Funds excepting, however, the breach, negligence or
willful misconduct of Escrow Agent in the performance of its duties hereunder.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.

 

LANDLORD:

LEGACY III SJ AMERICA CENTER I, LLC,

a Delaware limited liability company

By:   LEGACY PARTNERS COMMERCIAL, L.P.,   a California limited partnership,   as
Property Manager and Agent for Owner   By:   LEGACY PARTNERS COMMERCIAL, INC.,  
  General Partner     By:  

 

      Debra Smith     Its:   Chief Administrative Officer       DRE #00975555  
    BL DRE #01464134 TENANT:

POLYCOM, INC.,

a Delaware corporation

By:  

 

  Name:  

 

  Its:  

 

By:  

 

  Name:  

 

  Its:  

 

ESCROW AGENT: FIRST AMERICAN TITLE INSURANCE COMPANY By:  

 

Name:  

 

Its:  

 

 

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EXHIBIT A

Landlord Payment Instructions

 

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EXHIBIT B

Tenant Payment Instructions

 

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EXHIBIT P

DEPICTION OF EQUIPMENT ROOM

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EXTENSION OPTION RIDER

This Extension Option Rider (“Extension Rider”) is made and entered into by and
between LEGACY III SJ AMERICA CENTER I, LLC, a Delaware limited liability
company (“Landlord”), and POLYCOM, INC., a Delaware corporation (“Tenant”), and
is dated as of the date of the Lease (“Lease”) by and between Landlord and
Tenant to which this Extension Rider is attached. The agreements set forth in
this Extension Rider shall have the same force and effect as if set forth in the
Lease. To the extent the terms of this Extension Rider are inconsistent with the
terms of the Lease, the terms of this Extension Rider shall control.

1. Extension Option. Landlord hereby grants Tenant one (1) option to extend the
Lease Term (the “Extension Option”) for all, but not less than all, of the
entire Premises then leased by Tenant (i.e., the original Premises and the
Must-Take Space) for a period of seven (7) years each (the “Option Term”), which
Extension Option shall be exercisable only by written Exercise Notice (as
defined below) delivered by Tenant to Landlord as provided below.
Notwithstanding the foregoing, at Landlord’s option, in addition to any other
remedies available to Landlord under this Lease, at law and/or in equity, Tenant
shall not be deemed to have properly exercised the Extension Option if as of the
date of delivery of the Exercise Notice by Tenant, Tenant is in default under
this Lease beyond any applicable notice and cure period. Upon the proper
exercise of the Extension Option, the Lease Term shall be extended for the
Option Term. The Extension Option is personal to the Original Tenant and any
Affiliate to which Tenant’s entire interest in the Lease has been assigned
pursuant to Section 14.7 of the Lease, and may not be assigned or exercised,
voluntarily or involuntarily, by or to, any person or entity other than the
Original Tenant (or such Affiliate assignee, as the case may be), and shall only
be available to and exercisable when the Original Tenant (or such Affiliate
assignee, as the case may be) is in occupancy of no less than sixty-six percent
(66%) of the rentable square feet of the Premises then leased by Tenant.

2. Option Rent. The annual Base Rent payable by Tenant during the Option Term
(the “Option Rent”) shall be equal to the greater of: (i) the annual Base Rent
payable by Tenant during the last year of the initial Lease Term (the “Floor
Rent”); or (ii) the Fair Market Rental Rate for the Premises. As used herein,
the “Fair Market Rental Rate” for purposes of determining the annual Base Rent
for the Option Term shall mean the annual base rent at which non-equity tenants,
as of the commencement of the Option Term, will be leasing non-sublease,
non-equity, unencumbered space comparable in size, location and quality to the
Premises for a comparable term, which comparable space is located in the
Building, the 6201 Building and in other comparable Class A office and R&D
buildings which are greater than four (4) stories in height and are located in
Silicon Valley, California (but expressly excluding buildings located in
downtown San Jose) (collectively, the “Comparable Buildings”), taking into
consideration all free rent and other out-of-pocket concessions generally being
granted at such time for such comparable space for the Option Term (including,
without limitation, any tenant improvement allowance provided for such
comparable space, with the amount of such tenant improvement allowance to be
provided for the Premises during the Option Term to be determined after taking
into account the age, quality and layout of the tenant improvements in the
Premises as of the commencement of the Option Term with consideration to the
fact that the improvements existing in the Premises are specifically suitable to
Tenant).

3. Exercise of Extension Option. The Extension Option shall be exercised by
Tenant, if at all, only in the following manner: (i) Tenant shall deliver
written notice (the “Interest Notice”) to Landlord not more than fifteen
(15) months nor less than twelve (12) months prior to the expiration of the
initial Lease Term stating that Tenant may be interested in exercising the
Extension Option; (ii) Landlord, after receipt of Tenant’s Interest Notice,
shall deliver notice (the “Option Rent Notice”) to Tenant not less than eleven
(11) months prior to the expiration of the initial Lease Term setting forth the
Option Rent; and (iii) if Tenant wishes to exercise the Extension Option, Tenant
shall, on or before the date (the “Exercise Date”) which is ten (10) months
prior to the expiration of the initial Lease Term, exercise the Extension Option
by delivering written notice (the “Exercise Notice”) thereof to Landlord. If
Landlord determines in the Option Rent Notice that the Option Rent for the
Option Term shall equal the Fair Market Rental Rate pursuant to Section 2(ii)
above, then concurrently with Tenant’s delivery of the Exercise Notice, Tenant
may, at its option, in a written notice delivered to Landlord (the “Objection
Notice”), object to Landlord’s determination of the Fair Market Rental Rate for
the Option Term set forth in the Option Rent Notice, in which event such Fair
Market Rental Rate shall be determined pursuant to Section 4 below. If Tenant
timely delivers the Exercise Notice but fails to timely deliver the Objection
Notice to Landlord, Tenant shall be deemed to have accepted Landlord’s
determination thereof and the following provisions of Section 4 shall not apply.
Tenant’s failure to deliver the Interest Notice or Exercise Notice on or before
the applicable delivery dates therefor specified hereinabove, shall be deemed to
constitute Tenant’s waiver of the Extension Option. If Landlord determines in
the Option Rent Notice that the Option Rent for the Option Term shall equal the
Floor Rent pursuant to Section 2(i) above, such determination shall be final and
conclusive, and the following provisions of Section 4 below shall not apply.

4. Determination of Option Rent. If Tenant timely and appropriately delivers to
Landlord an Objection Notice pursuant to Section 3 above with respect to the
Fair Market Rental Rate for the Option Term initially determined by Landlord in
Landlord’s Option Rent Notice for the Option Term, then Landlord and Tenant
shall attempt to agree upon such Fair Market Rental Rate, using their best
good-faith efforts. If Landlord and Tenant fail to reach agreement by the date
(the “Outside Agreement Date”) which is twenty (20) days following Tenant’s
delivery of the Exercise Notice, then each party shall submit to the other party
a separate written determination of the Fair Market Rental Rate within ten
(10) business days after such Outside Agreement Date, and such determinations
shall be submitted to arbitration in accordance with the provisions of Sections
4.1 through 4.8 below. The failure of Tenant or Landlord to submit a written
determination of the Fair Market Rental Rate within such ten (10) business day
period shall conclusively be deemed to be such party’s approval of the Fair
Market Rental Rate submitted within such ten (10) business day period by the
other party.

 

EXTENSION

OPTION RIDER

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4.1 Landlord and Tenant shall each appoint one (1) arbitrator who shall by
profession be a real estate leasing broker who shall (i) have been active over
the ten (10) year period ending on the date of such appointment in the leasing
of the Comparable Buildings, (ii) have no financial interest in Landlord or
Tenant, and (iii) not have represented or been employed or engaged by the
appointing party during such 10-year period. The determination of the
arbitrators shall be limited solely to the issue of whether Landlord’s or
Tenant’s submitted Fair Market Rental Rate is the closer to the actual Fair
Market Rental Rate as determined by the arbitrators, taking into account the
requirements with respect thereto set forth in Section 2 above. Each such
arbitrator shall be appointed within fifteen (15) days after the Outside
Agreement Date.

4.2 The two (2) arbitrators so appointed shall, within fifteen (15) days of the
date of the appointment of the last appointed arbitrator, agree upon and appoint
a third arbitrator who shall be qualified under the same criteria set forth
hereinabove for qualification of the initial two (2) arbitrators.

4.3 The three (3) arbitrators shall, within thirty (30) days of the appointment
of the third arbitrator, reach a decision as to which of Landlord’s or Tenant’s
submitted Fair Market Rental Rate is closer to the actual Fair Market Rental
Rate and shall select such closer determination as the Fair Market Rental Rate
and notify Landlord and Tenant thereof.

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

4.5 If either Landlord or Tenant fails to appoint an arbitrator within the time
period specified in Section 4.1 hereinabove, the arbitrator appointed by one of
them shall reach a decision, notify Landlord and Tenant thereof, and such
arbitrator’s decision shall be binding upon Landlord and Tenant.

4.6 If the two (2) arbitrators fail to agree upon and appoint a third
arbitrator, a third arbitrator shall be appointed by the Superior Court in and
for Santa Clara County.

4.7 Each party shall pay the fees and expenses of the arbitrator appointed by or
on behalf of it, and each shall pay one-half of the fees and expenses of the
third arbitrator, if any.

4.8 In no event shall the Option Rent for the Option Term selected by the
arbitrator(s) pursuant to this Section 4 be less than the Floor Rent.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

 

EXTENSION

OPTION RIDER

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“Landlord”      

LEGACY III SJ AMERICA CENTER I, LLC,

a Delaware limited liability company

            By:    LEGACY PARTNERS COMMERCIAL, L.P.,               

a California limited partnership,

as Property Manager and Agent for Owner

               By:   

LEGACY PARTNERS COMMERCIAL, INC.,

               General Partner                   By:   

/s/ DEBRA SMITH

                  Debra Smith                      Its:    Chief Administrative
Officer                      DRE #00975555                      BL DRE #01464134
      “Tenant”       POLYCOM, INC.,             a Delaware corporation         
   By:   

/S/ ANDREW M. MILLER

               Name:   

Andrew M. Miller

               Its:   

President and CEO

            By:   

/S/ W BOILEAU

               Name:   

W Boileau

               Its:   

VP Treasurer

     

EXTENSION

OPTION RIDER

 

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