CREEKSIDE BUSINESS PARK
OFFICE LEASE
This Office Lease (the "Lease"), dated as of the date set forth in Section 1 of
the Summary of Basic Lease Information (the "Summary"), below, is made by and
between SFII CREEKSIDE, LLC, a Delaware limited liability company ("Landlord"),
and ZELTIQ AESTHETICS, INC., a Delaware corporation ("Tenant").
SUMMARY OF BASIC LEASE INFORMATION
TERMS OF LEASE
DESCRIPTION
1. Date:
January ___, 2017
2. Premises (Article 1):
 
2.1 Building:
The building located at  
5990 - 5996 Gleason Drive 
Dublin, California 94568
containing approximately 85,441 rentable square feet of space ("RSF")
2.2 Premises:
Approximately 33,354 RSF in the Building, which Premises is known as 5996
Gleason Drive, as further set forth in Exhibit A to this Office Lease.
3. Lease Term (Article 2):
 
3.1 Length of Term:
Six (6) years.
3.2 Lease Commencement Date:
The later of (i) June 1, 2017, and the date Landlord delivers the Premises to
Tenant "Ready for Occupancy", as defined in Section 4.1 of the Tenant Work
Letter attached hereto as Exhibit B.
3.3 Lease Expiration Date:
The day prior to the sixth (6th) anniversary of the Lease Commencement Date.
4. Base Rent (Article 3):
 
Lease Year
Annual Base Rent
Monthly Installment
of Base Rent
Monthly Base
Rent per RSF
1*
$580,359.60*
$48,363.30
$1.4500
2
$597,770.39
$49,814.20
$1.4935
3
$615,701.50
$51,308.46
$1.5383
4
$634,192.96
$52,849.41
$1.5845
5
$653,204.74
$54,433.73
$1.6320
6
$672,776.86
$56,064.74
$1.6809
*Note: The Base Rent payable for the first nine (9) months of the Lease Term is
subject to abatement as provided in Section 3.2 of the Office Lease.
5. Intentionally Omitted.
 
6. Tenant's Share (Article 4):
39.04%

 
 
 

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7. Permitted Use (Article 5):
General office, light manufacturing, assembly and warehouse use.
8. Security Deposit (Article 21):
$56,064.74.
9. Parking (Article 28):
Tenant shall have the right to use 3.2 parking passes (on an unreserved basis)
for every 1,000 RSF of the Premises, of which, subject to the terms of
Article 28 of the Lease. Ten (10) parking spaces shall be marked as reserved for
use by Tenant, at a location to be reasonably determined by Landlord in
reasonable proximity to the Building entrance.
10. Address of Tenant (Section 29.18):

Zeltiq Aesthetics, Inc. 
4410 Rosewood Drive, First Floor 
Pleasanton, California 94588
Attention: Sergio Garcia
11. Address of Landlord (Section 29.18):
See Section 29.18 of the Lease.
12. Broker(s) (Section 29.24):

Jones Lang LaSalle
1331 N. California Boulevard
Walnut Creek, California 94596
and

T3 Advisors 
137 Forest Avenue
Palo Alto, California 94301
13. Tenant Improvements  
(Exhibit B):
Landlord to provide "turn-key" improvements as set forth in Exhibit B.

 
 
 

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SECTION 1

PREMISES, BUILDING, PROJECT, AND COMMON AREAS
1.1    Premises, Building, Project and Common Areas.
1.1.1    The Premises. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the premises set forth in Section 2.2 of the Summary (the
"Premises"). The outline of the Premises is set forth in Exhibit A attached
hereto and the Premises has the number of rentable square feet as set forth in
Section 2.2 of the Summary (which shall not be subject to re-measurement or
modification except in connection with a change in the physical size of the
Premises). The parties hereto agree that the lease of the Premises is upon and
subject to the terms, covenants and conditions herein set forth, and Tenant
covenants as a material part of the consideration for this Lease to keep and
perform each and all of such terms, covenants and conditions by it to be kept
and performed and that this Lease is made upon the condition of such
performance. The parties hereto hereby acknowledge that the purpose of Exhibit A
is to show the approximate location of the Premises in the "Building," as that
term is defined in Section 1.1.2, below, only, and such Exhibit is not meant to
constitute an agreement, representation or warranty as to the construction of
the Premises, the precise area thereof or the specific location of the "Common
Areas," as that term is defined in Section 1.1.3, below, or the elements thereof
or of the accessways to the Premises or the "Project," as that term is defined
in Section 1.1.2, below. Except as specifically set forth in this Lease and in
the Tenant Work Letter attached hereto as Exhibit B (the "Tenant Work Letter"),
Tenant shall accept the Premises in their existing, "as is" condition and
Landlord shall not be obligated to provide or pay for any improvement work or
services related to the improvement of the Premises. Tenant also acknowledges
that neither Landlord nor any agent of Landlord has made any representation or
warranty regarding the condition of the Premises, the Building or the Project or
with respect to the suitability of any of the foregoing for the conduct of
Tenant's business, except as specifically set forth in this Lease and the Tenant
Work Letter. The taking of possession of the Premises by Tenant shall
conclusively establish that the Premises and the Building were at such time in
good and sanitary order, condition and repair, except that, notwithstanding
anything to the contrary contained in this Lease or the Work Letter, Landlord
shall deliver the Premises to Tenant with the roof in water tight condition and
with all Building systems, including without limitation, HVAC, mechanical,
electrical, life safety and plumbing systems, in good operating condition and
repair, and any repairs to such components of the Building which are reasonably
required during the first one hundred twenty (120) days of the Term shall be at
Landlord's sole cost and expense.
1.1.2    The Building and The Project. The Premises are a part of the building
set forth in Section 2.1 of the Summary (the "Building"). The Building is part
of an office project known as "Creekside Business Park." The term "Project," as
used in this Lease, shall mean (i) the Building and the adjacent building with
the address of 5875 Arnold Drive (the "Adjacent Building"), and the Common
Areas, (ii) the land (which is improved with landscaping, parking facilities and
other improvements) upon which the Building, the Adjacent Building and the
Common Areas are located, and (iii) at Landlord's discretion, any additional
real property, areas, land, buildings or other improvements added thereto
outside of the Project.
1.1.3    Common Areas. Tenant shall have the non-exclusive right to use in
common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other portions of the Project designated by Landlord, in its discretion,
including certain areas designated for the exclusive use of certain tenants, or
to be shared by Landlord and certain tenants, are collectively referred to
herein as the "Common Areas"). The Common Areas shall consist of the "Project
Common Areas" and the "Building Common Areas." The term "Project Common Areas,"
as used in this Lease, shall mean the portion of the Project designated as such
by Landlord, which Project Common Areas may include, from time to time, in
Landlord's sole discretion, a conference center, cafeteria, fitness center and
other amenities. The term "Building Common Areas," as used in this Lease, shall
mean the portions of the Common Areas located within the Building designated as
such by Landlord. The manner in which the Common Areas are maintained and
operated shall be at the sole discretion of Landlord and the use thereof shall
be subject to such rules, regulations and restrictions as Landlord may make from
time to time; provided that Landlord shall maintain the Common Areas in a manner
commensurate with the Class A campus office project standard being applied as of
the date of this Lease. Landlord reserves the right

 
 
 

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to close temporarily, make alterations or additions to, or change the location
of elements of the Project and the Common Areas; provided that Landlord shall
use commercially reasonable efforts to minimize interference with Tenant’s use
of and access to the Premises, parking areas and Common Areas.
1.1.4    Outside Delivery Date. In the event that Landlord fails to cause the
Premises to be "Ready for Occupancy", as defined in Section 4.1 of the Tenant
Work Letter, on or before August 1, 2017 (the "Outside Delivery Date"), then for
day after the Outside Delivery Date that the Premises are not Ready for
Occupancy, Tenant shall receive one (1) day of credit against Base Rent (the
"Late Delivery Credit") which Late Delivery Credit shall be applied following
the expiration of the Second Rent Abatement Period. The Outside Delivery Date
shall be extended by one (1) day for each day of delay in the Premises being
Ready for Occupancy caused by "Tenant Delay" (as defined in Section 4.2 of the
Tenant Work Letter) or "Force Majeure" (as defined in Section 29.16 of this
Lease).
1.2    Right of First Offer to Lease. Landlord hereby grants the originally
named Tenant herein, and any Permitted Transferee Assignee (the "Original
Tenant") during the Term an ongoing right of first offer to lease ("Right of
First Offer") with respect to all of the space in the Building not included in
the Premises (the "First Offer Space"). Tenant's Right of First Offer shall be
on the terms and conditions set forth in this Section 1.2. Such Right of First
Offer shall subject and subordinate to any rights (including renewal and
expansion rights) to such space held by any existing tenant of the First Offer
Space, or granted in any "Interim Lease", as defined in Section 1.2.2, below
(collectively, the "Superior Rights").
1.2.1    Procedure for Offer. Prior to Landlord entering into any new lease of
the First Offer Space to anyone other than a holder of Superior Rights, Landlord
shall notify Tenant (the "First Offer Notice"), pursuant to which First Offer
Notice Landlord shall offer to lease to Tenant such First Offer Space on the
terms of a bona fide offer received by Landlord, or on terms which Landlord is
otherwise prepared to accept. The First Offer Notice shall describe the space so
offered to Tenant and shall set forth the rent and other economic terms upon
which Landlord is willing to lease such space to Tenant (the "First Offer
Rent").
1.2.2    Procedure for Acceptance. If Tenant wishes to exercise Tenant's rights
set forth in this Section 1.2 with respect to the space described in the First
Offer Notice, then within ten (10) business days after delivery of the First
Offer Notice to Tenant, Tenant shall deliver notice to Landlord (the "First
Offer Exercise Notice") of Tenant's election to lease such First Offer Space on
the terms contained in the First Offer Notice. If Tenant does not exercise its
right to lease the First Offer Space within the ten (10) business day period,
then Landlord shall be free to lease the space described in the First Offer
Notice to anyone to whom Landlord desires on any terms Landlord desires,
provided that, prior to leasing such space on terms that are more than five
percent (5%) more favorable to the tenant, on a net economic present value
basis, than the terms set forth in the First Offer Notice, Landlord shall first
re-offer such space to Tenant on such reduced terms. Tenant's Right of First
Offer under this Section 1.2 shall be subject and subordinate to any renewal or
expansion rights granted in any such lease of the First Offer Space to a third
party (an "Interim Lease"). Notwithstanding anything to the contrary contained
herein, Tenant must elect to exercise its Right of First Offer, if at all, with
respect to all of the First Offer Space as offered by Landlord, and Tenant may
not elect to lease only a portion thereof.
1.2.3    Construction in First Offer Space. Tenant shall accept the First Offer
Space in its "as is" condition, subject to any improvement allowance granted as
a component of the First Offer Rent, provided that Landlord shall deliver the
First Offer Space to Tenant with the roof in water tight condition and with all
Building systems, including without limitation, HVAC, mechanical, electrical,
life safety and plumbing systems, in good operating condition and repair, and
any repairs to such components of the Building which are reasonably required
during the first ninety (90) days following the delivery of the First Offer
Space to Tenant shall be at Landlord’s sole cost and expense. The construction
of improvements in the First Offer Space shall comply with the terms of Article
8 of this Lease.
1.2.4    Amendment to Lease. If Tenant timely exercises Tenant's right to lease
the First Offer Space upon the terms set forth herein, Landlord and Tenant shall
promptly thereafter execute an amendment to this Lease for such First Offer
Space upon the terms and conditions as set forth in the First Offer Notice and
this Section 1.2 (and any improvement allowance or rent abatement applicable to
such lease of First Offer Space shall be as provided in the First Offer Notice
or otherwise determined as a component of the First Offer Rent, and not as
provided in this

 
 
 

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Lease with respect to the initial Premises). Tenant shall commence payment of
Rent, and the term of the First Offer Space shall commence on the date that is
the later of (i) the date which is ninety (90) days after the date the First
Offer Space is delivered to Tenant or (ii) the date Rent would have commenced
under the term set forth in the First Offer Notice. The term of Tenant's lease
of the First Offer Space shall be as provided in the First Offer Notice.
1.2.5    Termination of Right of First Offer. The rights contained in this
Section 1.2 shall be personal to the Original Tenant and may only be exercised
by the Original Tenant (and not any assignee, sublessee or other transferee of
the Original Tenant's interest in this Lease other than a Permitted Transferee
Assignee) if the Original Tenant occupies (i.e., has not subleased or vacated)
except in connection with an assignment or sublease which qualifies as a
Permitted Transfer) the entire Premises, and is not then actively marketing any
portion of the Premises for sublease. Tenant shall not have the right to lease
the First Offer Space, as provided in this Section 1.2, if, as of the date of
the attempted exercise of any such rights Tenant is in default of this Lease
after expiration of any applicable notice and cure period.
SECTION 2    

LEASE TERM; OPTION TERMS
2.1    Lease Term. The terms and provisions of this Lease shall be effective as
of the date of this Lease. The term of this Lease (the "Lease Term") shall be as
set forth in Section 3.1 of the Summary, shall commence on the Lease
Commencement Date set forth in Section 3.2 of the Summary (the "Lease
Commencement Date"), and shall terminate on the date set forth in Section 3.3 of
the Summary (the "Lease Expiration Date") 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. At any time
during the Lease Term, Landlord may deliver to Tenant a notice in the form as
set forth in Exhibit C, attached hereto, as a confirmation only of the
information set forth therein, which Tenant shall execute and return to Landlord
within ten (10) business days of receipt thereof. Tenant acknowledges that the
Lease Commencement Date will most likely occur prior to the date that the
Premises are Ready for Occupancy.
2.2    Option Terms.
2.2.1    Option Right. Landlord hereby grants the Original Tenant two (2)
options to extend the Lease Term each for a period of five (5) years (each, an
"Option Term") with respect to the entire Premises then leased by Tenant. Such
options shall be exercisable only by written notice delivered by Tenant to
Landlord as provided below, provided that, as of the date of delivery of such
notice, Tenant is not in monetary or material non-monetary default beyond
applicable notice and grace periods under this Lease. Upon the timely exercise
of each such option to extend, the then-applicable Lease Term shall be extended
for a period of five (5) years, on all of the same terms and conditions except
that the Base Rent shall be equal to the Option Rent, and except for such other
modifications as are then agreed upon by the parties. The rights contained in
this Section 2.2 shall be personal to the Original Tenant and may only be
exercised by the Original Tenant (and not any other assignee, sublessee or other
transferee of the Original Tenant's interest in this Lease other than a
Permitted Transferee Assignee).
2.2.2    Option Rent. The rent payable by Tenant during the Option Term (the
"Option Rent") shall be equal to the "Fair Market Rent" for such space as of the
commencement of the Option Term. As used herein, the "Fair Market Rent" shall be
the rent (including additional rent and considering any "base year" or "expense
stop" applicable thereto), including all escalations, at which, as of the
commencement of the Option Term, tenants are leasing non-sublease,
non-encumbered, non-equity space comparable in size, location and quality to the
Premises (or First Refusal Space, as applicable), for a term of five (5) years,
which comparable space is located in the Project and in "Comparable Buildings",
as defined below (collectively, the "Comparable Transactions"), in either case
taking into consideration all relevant factors, including without limitation,
improvements located in the Premises or in the Comparable Transactions, as
applicable, whether favorable to Landlord or to Tenant. For purposes of this
Lease, "Comparable Buildings" shall mean comparable first class office buildings
in the Tri-Valley office market. The Base Year shall also be revised to be the
calendar year in which the first day of the Option Term occurs.

 
 
 

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2.2.3    Exercise of Option. Notwithstanding anything to the contrary contained
in this Lease, Tenant shall be permitted to submit a non-binding notice of
interest (the “Interest Notice”) to Landlord not less than fifteen (15) months
prior to the expiration of the then Lease Term, and following Landlord’s receipt
of such Interest Notice, Landlord shall deliver to Tenant not less than thirteen
(13) months prior to the expiration of the then Lease Term Landlord’s
non-binding estimate of the Option Rent. The option contained in this Section
2.2 shall be exercised by Tenant, if at all, only by Tenant's delivery of
written notice to Landlord not more than twelve (12) months and not less than
nine (9) months prior to the expiration of the then Lease Term, stating that
Tenant is irrevocably exercising its option (the "Exercise Notice"). Landlord,
after receipt of Tenant's notice, shall deliver notice (the "Option Rent
Notice") to Tenant not less than eight (8) months prior to the expiration of the
then in effect Lease Term, setting forth Landlord's estimate of the Option Rent.
Tenant shall have the right, within thirty (30) days after receipt of the Option
Rent Notice, to notify Landlord that Tenant accepts the Option Rent as
determined by Landlord. If Tenant fails to timely accept the Option Rent as
determined by Landlord, then the Option Rent shall be established as provided in
Section 2.2.4, below.
2.2.4    Determination of Market Rent. In the event Tenant objects to Landlord's
determination of Fair Market Rent in connection with the Option Rent or First
Offer Rent, Landlord and Tenant shall attempt to agree upon the Fair Market Rent
using reasonable good-faith efforts. If Landlord and Tenant fail to reach
agreement within thirty (30) days following Tenant's objection to the Landlord's
Fair Market Rent determination (the "Outside Agreement Date"), then, within five
(5) business days following such Outside Agreement Date, Landlord and Tenant
shall each concurrently submit a final, binding determination of the Fair Market
Rent to the "Neutral Arbitrator," as that term is defined in Section 2.2.4.1 of
this Lease, which determinations shall be submitted to arbitration in accordance
with Section 2.2.4.1 through 2.2.4.5, below.
2.2.4.1    Landlord and Tenant shall mutually, reasonably appoint one (1)
arbitrator who shall by profession be a real estate broker or appraiser who is
disinterested and who shall have been active over the five (5) year period
ending on the date of such appointment in the valuation or appraisal of office
leases in Comparable Buildings (the "Neutral Arbitrator"). The determination of
the Neutral Arbitrator shall be limited solely to the issue of whether
Landlord's Fair Market Rent calculation or Tenant's Fair Market Rent
calculation, each as submitted to the Neutral Arbitrator pursuant to
Section 2.2.4, above, is the closest to the actual Fair Market Rent defined in
Section 2.2.2, above, as determined by such Neutral Arbitrator. Such Neutral
Arbitrator shall be appointed within fifteen (15) days after the applicable
Outside Agreement Date. Neither the Landlord or Tenant may, directly or
indirectly, consult with the Neutral Arbitrator prior to or subsequent to his or
her appearance. The Neutral Arbitrator shall be retained via an engagement
letter jointly prepared by Landlord's counsel and Tenant's counsel.
2.2.4.2    The Neutral Arbitrator shall, within thirty (30) days of his/her
appointment, reach a decision as to Fair Market Rent and determine whether the
Landlord's Fair Market Rent calculation or Tenant's Fair Market Rent
calculation, each as submitted to the Neutral Arbitrator pursuant to
Section 2.2.4, above, is closest to the Option Rent as determined by such
Neutral Arbitrator and simultaneously publish a ruling ("Award"). Following
notification of the Award, the Landlord's Fair Market Rent calculation or
Tenant's Fair Market Rent calculation, whichever is selected by the Neutral
Arbitrator as being closest to Fair Market Rent, shall become the then
applicable Option Rent or First Offer Rent, as applicable.
2.2.4.3    The Award issued by such Neutral Arbitrator shall be binding upon
Landlord and Tenant.
2.2.4.4    If Landlord and Tenant fail to appoint the Neutral Arbitrator within
fifteen (15) days after the applicable Outside Agreement Date, either party may
petition the presiding judge of the Superior Court of Alameda County to appoint
such Neutral Arbitrator subject to the criteria in Section 2.2.4.1 of this
Lease, or if he or she refuses to act, either party may petition any judge
having jurisdiction over the parties to appoint such Neutral Arbitrator.
2.2.4.5    The cost of the Neutral Arbitrator shall be paid by Landlord and
Tenant equally.

 
 
 

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SECTION 3    

BASE RENT; ABATED RENT
3.1    Base Rent. Tenant shall pay, without prior notice or demand, to Landlord
or Landlord's agent at the management office of the Project, or, at Landlord's
option, at such other place as Landlord may from time to time designate in
writing, by 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 4 of the Summary, payable in equal monthly
installments as set forth in Section 4 of the Summary in advance on or before
the first day of each and every calendar month during the Lease Term, without
any setoff or deduction whatsoever. The Base Rent for the first full month of
the Lease Term which occurs after the expiration of any free rent period shall
be paid at the time of Tenant's execution of this Lease. If any Rent payment
date (including the Lease Commencement Date) falls on a day of the month other
than the first day of such month or if any payment of Rent is for a period which
is shorter than one month, the Rent for any fractional month shall accrue on a
daily basis for the period from the date such payment is due to the end of such
calendar month or to the end of the Lease Term at a rate per day which is equal
to 1/365 of the applicable annual Rent. 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.
3.2    Abated Rent. Provided that Tenant is not then in default of the Lease,
after expiration of any applicable notice and cure periods, then (i) during the
nine (9) month period commencing on the Lease Commencement Date and ending on
date that is nine (9) months thereafter (the “Rent Abatement Period”), Tenant
shall not be obligated to pay any Base Rent or Tenant's Share of Direct Expenses
otherwise attributable to the Premises during such Rent Abatement Period (the
“Rent Abatement”). Tenant acknowledges and agrees that the foregoing Rent
Abatement has been granted to Tenant as additional consideration for entering
into this Lease, and for agreeing to pay the Rent and perform the terms and
conditions otherwise required under this Lease. If Tenant shall be in default
under the Lease, after expiration of any applicable notice and cure period, or
if the Lease is terminated as a result of an Event of Default by Tenant, then
Landlord may at its option, by notice to Tenant, elect, in addition to any other
remedies Landlord may have under this Lease, that the dollar amount of the
unapplied portion of the Rent Abatement as of the date of such termination shall
be converted to a credit to be applied to the Base Rent applicable at the end of
the Lease Term and Tenant shall immediately be obligated to pay Base Rent for
the Premises in full.
SECTION 4    

ADDITIONAL RENT
4.1    General Terms. In addition to paying the Base Rent specified in Article 3
of this Lease, Tenant shall pay "Tenant's Share" of the annual "Direct
Expenses," as those terms are defined in Sections 4.2.6 and 4.2.2 of this Lease,
respectively. Such payments by Tenant, together with any and all other amounts
payable by Tenant to Landlord pursuant to the terms of this Lease, are
hereinafter collectively referred to as the "Additional Rent", and the Base Rent
and the Additional Rent are herein collectively referred to as "Rent." All
amounts due under this Article 4 as Additional Rent shall be payable for the
same periods and in the same manner as the Base Rent. Without limitation on
other obligations of Tenant which 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. As provided in Section 3.2,
above, Tenant shall have no obligation to pay Tenant's Share of Direct Expenses
during the Rent Abatement Period.
4.2    Definitions of Key Terms Relating to Additional Rent. As used in this
Article 4, the following terms shall have the meanings hereinafter set forth:
4.2.1    Intentionally Omitted.
4.2.2    "Direct Expenses" shall mean "Operating Expenses" and "Tax Expenses."
4.2.3    "Expense 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, provided that Landlord, upon notice to Tenant,

 
 
 

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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 Direct Expenses shall be equitably adjusted for any Expense Year involved in
any such change.
4.2.4    "Operating Expenses" shall mean all expenses, costs and amounts of
every kind and nature which Landlord pays or accrues during any Expense Year
because of or in connection with the ownership, management, maintenance,
security, repair, replacement, restoration or operation of the Project, or any
portion thereof. Without limiting the generality of the foregoing, Operating
Expenses shall specifically include any and all of the following: (i) the cost
of supplying all utilities, the cost of operating, repairing, maintaining, and
renovating the utility, telephone, mechanical, sanitary, storm drainage, and
elevator systems, and the cost of maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections and the cost of contesting any governmental enactments which may
affect Operating Expenses, and the costs incurred in connection with a
governmentally mandated transportation system management program or similar
program; (iii) the cost of all insurance carried by Landlord in connection with
the Project as reasonably determined by Landlord; (iv) the cost of landscaping,
relamping, and all supplies, tools, equipment and materials used in the
operation, repair and maintenance of the Project, or any portion thereof; (v)
the cost of parking area operation servicing the Building (whether on or
offsite), repair, restoration, and maintenance; (vi) fees and other costs,
including management and/or incentive fees, consulting fees, legal fees and
accounting fees, of all contractors and consultants in connection with the
management, operation, maintenance and repair of the Project; (vii) payments
under any equipment rental agreements and the fair rental value of any
management office space; (viii) subject to item (f), below, wages, salaries and
other compensation and benefits, including taxes levied thereon, of all persons
engaged in the operation, maintenance and security of the Project; (ix) costs
under any instrument pertaining to the sharing of costs by the Project; (x)
operation, repair, maintenance and replacement of all systems and equipment and
components thereof of the Project; (xi) the cost of janitorial, alarm, security
and other services, replacement of wall and floor coverings, ceiling tiles and
fixtures in common areas, maintenance and replacement of curbs and walkways,
repair to roofs and re-roofing; (xii) amortization (including interest on the
unamortized cost) over such period of time as Landlord shall reasonably
determine, of the cost of acquiring or the rental expense of personal property
used in the maintenance, operation and repair of the Project, or any portion
thereof; (xiii) the cost of capital improvements or other costs incurred in
connection with the Project (A) which are intended to effect economies in the
operation or maintenance of the Project, or any portion thereof, or to reduce
current or future Operating Expenses, or to enhance the safety or security of
the Project or its occupants, (B) that are required to comply with present or
anticipated conservation programs, (C) which are replacements or modifications
of nonstructural items located in the Common Areas required to keep the Common
Areas in good order or condition, or (D) that are required under any
governmental law or regulation; provided, however, that any capital expenditure
shall be amortized (including interest on the amortized cost as reasonably
determined by Landlord) over the useful life of such capital item as Landlord
shall reasonably determine in accordance with sound real estate management and
accounting principles; and (xiv) costs, fees, charges or assessments imposed by,
or resulting from any mandate imposed on Landlord by, any federal, state or
local government for fire and police protection, trash removal, community
services, or other services which do not constitute "Tax Expenses" as that term
is defined in Section 4.2.5, below, (xv) cost of tenant relation programs
reasonably established by Landlord, and (xvi) payments under any easement,
license, operating agreement, declaration, restrictive covenant, or instrument
pertaining to the sharing of costs by the Building. Notwithstanding the
foregoing, for purposes of this Lease, Operating Expenses shall not, however,
include:
(a)    costs, including legal fees, space planners' fees, advertising and
promotional expenses (except as otherwise set forth above), and brokerage fees
incurred in connection with the original construction or development, or
original or future leasing of the Project, and costs, including permit, license
and inspection costs, incurred with respect to the installation of tenant
improvements made for new tenants initially occupying space in the Project after
the Lease Commencement Date or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other occupants
of the Project (excluding, however, such costs relating to any common areas of
the Project or parking facilities);
(b)    except as set forth in items (xii), (xiii), and (xiv) above,
depreciation, interest and principal payments on mortgages and other debt costs,
if any, penalties and interest, costs of capital repairs and alterations, and
costs of capital improvements and equipment;

 
 
 

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(c)    costs for which the Landlord is reimbursed by any tenant or occupant of
the Project or by insurance by its carrier or any tenant's carrier or by anyone
else, and electric power costs or janitorial service costs applicable to any
other rentable area in the Building;
(d)    any bad debt loss, rent loss, or reserves for bad debts or rent loss;
(e)    costs associated with the operation of the business of the partnership or
entity which constitutes the Landlord, as the same are distinguished from the
costs of operation of the Project (which shall specifically include, but not be
limited to, accounting costs associated with the operation of the Project).
Costs associated with the operation of the business of the partnership or entity
which constitutes the Landlord include costs of partnership accounting and legal
matters, costs of defending any lawsuits with any mortgagee (except as the
actions of the Tenant may be in issue), costs of selling, syndicating,
financing, mortgaging or hypothecating any of the Landlord's interest in the
Project, and costs incurred in connection with any disputes between Landlord and
its employees, between Landlord and Project management, or between Landlord and
other tenants or occupants;
(f)    the wages and benefits of any employee 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-a-vis time spent on matters unrelated to operating and managing the Project;
provided, that in no event shall Operating Expenses for purposes of this Lease
include wages and/or benefits attributable to personnel above the level of
general manager or Project manager;
(g)    amount paid as ground rental for the Project by the Landlord;
(h)    except for a Project management fee not to exceed four percent (4%) (the
"Management Fee Cap") of Landlord's gross rental revenues (adjusted and grossed
up to reflect a one hundred percent (100%) occupancy of the Project with all
tenants paying rent, including base rent, pass-throughs, and parking fees from
the Project for any calendar year or portion thereof), overhead and profit
increment paid to the Landlord or to subsidiaries or affiliates of the Landlord
for services in the Project to the extent the same exceeds the costs of such
services rendered by qualified, first-class unaffiliated third parties on a
competitive basis;
(i)    any compensation paid to clerks, attendants or other persons in
commercial concessions operated by the Landlord, provided that any compensation
paid to any concierge at the Project shall be includable as an Operating
Expense;
(j)    rentals and other related expenses incurred in leasing air conditioning
systems, elevators or other equipment which if purchased the cost of which would
be excluded from Operating Expenses as a capital cost, except equipment not
affixed to the Project which is used in providing janitorial or similar services
and, further excepting from this exclusion such equipment rented or leased to
remedy or ameliorate an emergency condition in the Project ;
(k)    all items and services for which Tenant or any other tenant in the
Project reimburses Landlord or which Landlord provides selectively to one or
more tenants (other than Tenant) without reimbursement;
(l)    any costs expressly excluded from Operating Expenses elsewhere in this
Lease;
(m)    rent for any office space occupied by Project management personnel to the
extent the size or rental rate of such office space exceeds the size or fair
market rental value of office space occupied by management personnel of the
comparable buildings in the vicinity of the Building, with adjustment where
appropriate for the size of the applicable project;
(n)    costs arising from the gross negligence or willful misconduct of Landlord
or its agents, employees, vendors, contractors, or providers of materials or
services;

 
 
 

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(o)    costs incurred to comply with laws relating to the investigation, removal
or remediation of hazardous material (as defined under applicable law) which was
in existence in the Building or on the Project prior to the Lease Commencement
Date, and was of such a nature that a federal, State or municipal governmental
authority, if it had then had knowledge of the presence of such hazardous
material, in the state, and under the conditions that it then existed in the
Building or on the Project, would have then required the removal of such
hazardous material or other remedial or containment action with respect thereto;
and costs incurred to investigate, remove, remedy, contain, or treat hazardous
material, which hazardous material is brought into the Building or onto the
Project after the date hereof by Landlord or any other tenant of the Project and
is of such a nature, at that time, that a federal, State or municipal
governmental authority, if it had then had knowledge of the presence of such
hazardous material, in the state, and under the conditions, that it then exists
in the Building or on the Project, would have then required the removal of such
hazardous material or other remedial or containment action with respect thereto.
(p)    costs incurred to correct a violation of Applicable Laws which violation
was in existence in the Building or on the Project prior to the Lease
Commencement Date, and was of such a nature that a federal, State or municipal
governmental authority, if it had then had knowledge of such violation would
have then required its correction;
(q)    the cost of repairs or replacements incurred by reason of fire or other
casualty, or condemnation, to the extent Landlord actually receives proceeds of
property and casualty insurance policies or condemnation awards or would have
received such proceeds had Landlord maintained the insurance required to be
maintained by Landlord under this Lease;
(r)    costs which are covered by a warranty to the extent of reimbursement for
such coverage;
(s)    interest, fines or penalties for late payment or violations of Applicable
Laws by Landlord, except to the extent incurring such expense is either (1) a
reasonable business expense under the circumstances, or (2) caused by a
corresponding late payment or violation of an applicable law by Tenant, in which
event Tenant shall be responsible for the full amount of such expense;
(t)    costs for the original construction and development of the Project and
nonrecurring costs for the repair or replacement of any structural portion of
the Project made necessary as a result of defects in the original design,
workmanship or materials; and
(u)    costs incurred in connection with negotiations or disputes with any other
occupant of the Project and costs arising from the violation by Landlord or any
other occupant of the Project of the terms and conditions of any lease or
similar agreement.
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 the Project is not one hundred
percent (100%) occupied during all or a portion of any Expense Year, Landlord
shall make an appropriate adjustment to the components of Operating Expenses for
such year to determine the amount of Operating Expenses that would have been
incurred had the Project been one hundred percent (100%) occupied; and the
amount so determined shall be deemed to have been the amount of Operating
Expenses for such year.
4.2.5    Taxes.
4.2.5.1    "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, real estate excise taxes,
general and special assessments, transit taxes, leasehold taxes or taxes based
upon the receipt of rent, including gross receipts or sales

 
 
 

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taxes applicable to the receipt of rent, unless required to be paid by Tenant,
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, or any portion thereof), which
shall be paid or accrued during any Expense Year (without regard to any
different fiscal year used by such governmental or municipal authority) because
of or in connection with the ownership, leasing and operation of the Project, or
any portion thereof.
4.2.5.2    Tax Expenses shall include, without limitation: (i) Any tax on the
rent, right to rent or other income from the Project, or any portion thereof, or
as against the business of leasing the Project, or any portion thereof; (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 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, and,
Tax Expenses shall also include any governmental or private assessments or the
Project's contribution towards a governmental or private cost-sharing agreement
for the purpose of augmenting or improving the quality of services and amenities
normally provided by governmental agencies; (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 business or gross income
tax or excise tax with respect to the receipt of such rent, or 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; and (iv) Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or transferring
an interest or an estate in the Premises or the improvements thereon.
4.2.5.3    Any costs and expenses (including, without limitation, reasonable
attorneys' and consultants' fees) incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are incurred. Tax refunds shall be credited against Tax Expenses and
refunded to Tenant regardless of when received, based on the Expense Year to
which the refund is applicable, provided that in no event shall the amount to be
refunded to Tenant for any such Expense Year exceed the total amount paid by
Tenant as Additional Rent under this Article 4 for such Expense Year.
Notwithstanding anything to the contrary set forth in this Lease, (a) only
Landlord may institute proceedings to reduce Tax Expenses and the filing of any
such proceeding by Tenant without Landlord's consent shall constitute an event
of default by Tenant under this Lease, and (b) Landlord shall not be obligated
to file any application or institute any proceeding seeking a reduction in Tax
Expenses. If Tax Expenses for any period during the Lease Term or any extension
thereof are increased after payment thereof for any reason, including, without
limitation, error or reassessment by applicable governmental or municipal
authorities, Tenant shall pay Landlord upon demand Tenant's Share of any such
increased Tax Expenses. Notwithstanding anything to the contrary contained in
this Section 4.2.5 (except as set forth in Section 4.2.5.1, above), there shall
be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes,
gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes,
federal and state income taxes, and other taxes to the extent applicable to
Landlord's general or net income (as opposed to rents, receipts or income
attributable to operations at the Project), (ii) any items included as Operating
Expenses, and (iii) any items paid by Tenant under Section 4.5 of this Lease.
4.2.6    "Tenant's Share" shall mean the percentage set forth in Section 6 of
the Summary.
4.3    Allocations.
4.3.1    Method of Allocation. The parties acknowledge that, notwithstanding any
contrary provision contained in the Lease, the Building is a part of a
multi-building project and that the costs and expenses incurred in connection
with the Project (i.e., the Direct Expenses) should be shared between the
tenants of the Building and the tenants of the Adjacent Building. Accordingly,
Direct Expenses are determined annually for the Property as a whole, and a
portion of the Direct Expenses, which portion shall be determined by Landlord on
an equitable basis, shall be allocated to the tenants of the Building (as
opposed to the tenants of the Adjacent Building) and such portion shall be the
Direct Expenses for purposes of this Lease. Such portion of Direct Expenses
allocated to the tenants of the Building shall include all Direct Expenses
attributable solely to the Building and an equitable portion of the Direct
Expenses attributable to the Project as a whole.

 
 
 

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4.3.2    Cost Pools. Landlord shall have the right, from time to time, to
equitably allocate some or all of the Direct Expenses for the Project among
different portions or occupants of the Project (the "Cost Pools"), in Landlord's
reasonable discretion. Such Cost Pools may include, but shall not be limited to,
the office space tenants of a building of the Project or of the Project, and the
retail space tenants of a building of the Project or of the Project. The Direct
Expenses within each such Cost Pool shall be allocated and charged to the
tenants within such Cost Pool in an equitable manner.
4.4    Calculation and Payment of Additional Rent. Tenant shall pay to Landlord,
in the manner set forth in Section 4.4.1, below, and as Additional Rent,
Tenant's Share of Direct Expenses for each Expense Year.
4.4.1    Statement of Actual Direct Expenses and Payment by Tenant. Landlord
shall deliver to Tenant following the end of each Expense Year (and shall use
commercially reasonable efforts to deliver to Tenant within one hundred twenty
(120) days following the end of each Expense Year), a statement (the
"Statement") which shall state the Direct Expenses incurred or accrued for such
preceding Expense Year, and which shall indicate the amount of Tenant's Share of
Direct Expenses. Upon receipt of the Statement for each Expense Year commencing
or ending during the Lease Term, Tenant shall pay, with its next installment of
Base Rent due, the full amount of Tenant's Share of Direct Expenses for such
Expense Year, less the amounts, if any, paid during such Expense Year as
"Estimated Direct Expenses," as that term is defined in Section 4.4.2, below,
and if Tenant paid more as Estimated Direct Expenses than the actual Tenant's
Share of Direct Expenses, Tenant shall receive a credit in the amount of
Tenant's overpayment against Rent next due under this Lease. The failure of
Landlord to timely furnish the Statement for any Expense Year shall not
prejudice Landlord or Tenant from enforcing its rights under this Article 4.
Even though the Lease Term has expired and Tenant has vacated the Premises, when
the final determination is made of Tenant's Share of Direct Expenses for the
Expense Year in which this Lease terminates, Tenant shall immediately pay to
Landlord such amount, and if Tenant paid more as Estimated Direct Expenses than
the actual Tenant's Share of Direct Expenses, Landlord shall, within thirty (30)
days, deliver a check payable to Tenant in the amount of the overpayment. The
provisions of this Section 4.4.1 shall survive the expiration or earlier
termination of the Lease Term.
4.4.2    Statement of Estimated Direct Expenses. In addition, Landlord shall
deliver to Tenant following the end of each Expense Year (and shall use
commercially reasonable efforts to deliver to Tenant within one hundred twenty
(120) days following the end of each Expense Year), a yearly expense estimate
statement (the "Estimate Statement") which shall set forth Landlord's reasonable
estimate (the "Estimate") of what the total amount of Direct Expenses for the
then-current Expense Year shall be and the estimated excess (the "Estimated
Excess") as calculated by comparing the Direct Expenses for such Expense Year,
which shall be and the estimated Tenant's Share of Direct Expenses (the
"Estimated Direct Expenses"). The failure of Landlord to timely furnish the
Estimate Statement for any Expense Year shall not preclude Landlord from
enforcing its rights to collect any Estimated Direct Expenses under this Article
4, nor shall Landlord be prohibited from revising any Estimate Statement or
Estimated Direct Expenses theretofore delivered to the extent necessary.
Thereafter, Tenant shall pay, with its next installment of Base Rent due, a
fraction of the Estimated Direct Expenses for the then-current Expense Year
(reduced by any amounts paid pursuant to the last sentence of this
Section 4.4.2). Such fraction shall have as its numerator the number of months
which have elapsed in such current Expense Year, including the month of such
payment, and twelve (12) as its denominator. Until a new Estimate Statement is
furnished (which Landlord shall have the right to deliver to Tenant at any
time), Tenant shall pay monthly, with the monthly Base Rent installments, an
amount equal to one-twelfth (1/12) of the total Estimated Direct Expenses set
forth in the previous Estimate Statement delivered by Landlord to Tenant.
4.5    Taxes and Other Charges for Which Tenant Is Directly Responsible.
4.5.1    Tenant shall be liable for and shall pay before delinquency, taxes
levied against Tenant's equipment, furniture, fixtures and any other personal
property located in or about the Premises. If any such taxes on Tenant's
equipment, furniture, fixtures and any other personal property are levied
against Landlord or Landlord's property or if the assessed value of Landlord's
property is increased by the inclusion therein of a value placed upon such
equipment, furniture, fixtures or any other personal property and if Landlord
pays the taxes based upon such increased assessment, which Landlord shall have
the right to do regardless of the validity thereof but only under proper protest
if requested by Tenant, Tenant shall upon demand repay to Landlord the taxes so
levied against Landlord or the proportion of such taxes resulting from such
increase in the assessment, as the case may be.

 
 
 

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4.5.2    If the tenant improvements in the Premises, whether installed and/or
paid for by Landlord or Tenant and whether or not affixed to the real property
so as to become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which tenant improvements conforming to
Landlord's "building standard" in other space in the Building are assessed, then
the Tax Expenses levied against Landlord or the property by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of Section 4.5.1,
above.
4.5.3    Notwithstanding any contrary provision herein, Tenant shall pay prior
to delinquency any (i) rent tax or sales tax, service tax, transfer tax or value
added tax, or any other applicable tax on the rent or services herein or
otherwise respecting this Lease, (ii) taxes 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 facility servicing the Project; or (iii) taxes assessed upon this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises.

 
 
 

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4.6    Landlord's Books and Records. Upon Tenant's written request given not
more than ninety (90) days after Tenant's receipt of a Statement for a
particular Expense Year, and provided that Tenant is not then in default under
this Lease beyond the applicable notice and cure period provided in this Lease,
specifically including, but not limited to, the timely payment of Additional
Rent (whether or not the same is the subject of the audit contemplated herein),
Landlord shall furnish Tenant with such reasonable supporting documentation in
connection with said Direct Expenses as Tenant may reasonably request. Landlord
shall provide said information to Tenant within sixty (60) days after Tenant's
written request therefor. Within one hundred eighty (180) days after receipt of
a Statement by Tenant (the "Audit Period"), if Tenant disputes the amount of
Direct Expenses set forth in the Statement, an independent certified public
accountant (which accountant (A) is a member of a nationally or regionally
recognized accounting firm which has previous experience in auditing financial
operating records of landlords of office buildings, (B) shall not already be
providing primary accounting and/or lease administration services to Tenant and
shall not have provided primary accounting and/or lease administration services
to Tenant in the past three (3) years, (C) is not working on a contingency fee
basis [i.e., Tenant must be billed based on the actual time and materials that
are incurred by the accounting firm in the performance of the audit], and (D)
shall not currently or in the future be providing accounting and/or lease
administration services to another tenant in the Building and/or the Project in
connection with a review or audit by such other tenant of Direct Expenses)
designated and paid for by Tenant, may, after reasonable notice to Landlord and
at reasonable times, audit Landlord's records with respect to the Statement at
Landlord's corporate offices, provided that (i) Tenant is not then in default
under this Lease (beyond the applicable notice and cure periods provided under
this Lease), (ii) Tenant has paid all amounts required to be paid under the
applicable Estimate Statement and Statement, and (iii) a copy of the audit
agreement between Tenant and its particular auditor has been delivered to
Landlord prior to the commencement of the audit. In connection with such audit,
Tenant and Tenant's agents must agree in advance to follow Landlord's reasonable
rules and procedures regarding an audit of the aforementioned Landlord records,
and shall execute a commercially reasonable confidentiality agreement regarding
such audit. Any audit report prepared by Tenant's auditors shall be delivered
concurrently to Landlord and Tenant within the Audit Period. Tenant's failure to
dispute and/or audit the amount of Direct Expenses set forth in any Statement
within the Audit Period shall be deemed to be Tenant's approval of such
Statement and Tenant, thereafter, waives the right or ability to audit the
amounts set forth in such Statement. If after such audit, Tenant still disputes
such Direct Expenses, an audit to determine the proper amount shall be made, at
Tenant's expense, by an independent certified public accountant (the
"Accountant") selected by Landlord and subject to Tenant's reasonable approval;
provided that if such audit by the Accountant proves that Direct Expenses set
forth in the particular Statement were overstated by more than five percent
(5%), then the cost of the Accountant and the cost of such audit shall be paid
for by Landlord. Tenant hereby acknowledges that Tenant's sole right to audit
Landlord's books and records and to contest the amount of Direct Expenses
payable by Tenant shall be as set forth in this Section 4.6, and Tenant hereby
waives any and all other rights pursuant to applicable law to audit such books
and records and/or to contest the amount of Direct Expenses payable by Tenant.
SECTION 5    

USE OF PREMISES
5.1    Permitted Use. Tenant shall use the Premises solely for the Permitted Use
set forth in Section 7 of the Summary and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion.
5.2    Prohibited Uses. Tenant further covenants and agrees that 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 the provisions of the Rules and
Regulations set forth in Exhibit D, attached hereto, or in violation of the laws
of the United States of America, the State of California, the ordinances,
regulations or requirements of the local municipal or county governing body or
other lawful authorities having jurisdiction over the Project, including,
without limitation, any such laws, ordinances, regulations or requirements
relating to hazardous materials or substances, as those terms are defined by
applicable laws now or hereafter in effect. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way damage the
reputation of the Project or obstruct or interfere with the rights of other
tenants or occupants of the Building, or injure or annoy them or use or allow
the Premises to be used for any improper, unlawful or objectionable purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or about the
Premises. Tenant shall comply

 
 
 

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with, and Tenant's rights and obligations under the Lease and Tenant's use of
the Premises shall be subject and subordinate to, all recorded easements,
covenants, conditions, and restrictions now or hereafter affecting the Project.
SECTION 6    

SERVICES AND UTILITIES
6.1    In General. Landlord will be responsible, at Tenant's sole cost and
expense (subject to the terms of Section 4.2.4, above), for making heating,
ventilation and air‑conditioning, electricity, and water available to the
Premises. It is the Parties’ expectation that all utilities to the Premises will
be separately metered at the Premises and shall be paid directly by Tenant.
Landlord shall not provide janitorial, telephone services or interior security
services for the Premises. Tenant shall be solely responsible for performing all
janitorial services and other cleaning of the Premises, all in compliance with
applicable laws. The janitorial and cleaning of the Premises shall be adequate
to maintain the Premises in a manner consistent with Comparable Buildings.
Tenant shall cooperate fully with Landlord at all times and abide by all
reasonable regulations and requirements that Landlord may reasonably prescribe
for the proper functioning and protection of the HVAC, electrical, mechanical
and plumbing systems. Provided that Landlord provides and maintains and keeps in
continuous service utility connections to the Project, including electricity,
gas, water and sewage connections, Landlord shall have no obligation to provide
any services or utilities to the Building, including heating, ventilation and
air‑conditioning, electricity, water, telephone, janitorial and interior
Building security services, except as set forth in this Section 6.1.
6.2    Tenant Payment of Utilities Costs. It is the Parties’ expectation that
all utilities (including electricity, gas, sewer and water) will be separately
metered or sub-metered to the Premises and will be paid directly by Tenant.
After the Lease Commencement Date such utilities shall be contracted for and
paid directly by Tenant to the applicable utility provider. If, after the Lease
Commencement Date, any utilities to the Building are not separately metered to
the Premises, then Tenant shall pay to Landlord, within thirty (30) days after
billing, an equitable portion of the Building utility costs, based on Tenant's
proportionate use thereof. Tenant shall install separate meters on the systems
installed in the Premises as part of the Tenant Improvements pursuant to the
Tenant Work Letter.
6.3    Interruption of Use. Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent or otherwise, except as expressly set forth below,
for failure to furnish or delay in furnishing any service (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 breakage, 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 riot or other dangerous condition, emergency, accident or casualty
whatsoever, by act or default of Tenant or other parties, or by any other cause
beyond Landlord's reasonable control; 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
expressly set forth 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 of the
services or utilities as set forth in this Article 6.
6.4    Abatement Event. If (i) Landlord fails to perform the obligations
required of Landlord under the terms and conditions of this Lease, (ii) such
failure causes all or a portion of the Premises to be untenantable and unusable
by Tenant, and (iii) such failure relates to (A) the nonfunctioning of the heat,
ventilation, and air conditioning system in the Premises, the electricity in the
Premises, the nonfunctioning of the elevator service to the Premises, or (B) a
failure to provide access to the Premises, Tenant shall give Landlord notice
(the "Initial Notice"), specifying such failure to perform by Landlord (the
"Abatement Event"). If Landlord has not cured such Abatement Event within five
(5) business days after the receipt of the Initial Notice, Tenant may deliver an
additional notice to Landlord (the "Additional Notice"), specifying such
Abatement Event and Tenant's intention to abate the payment of Rent under this
Lease. If Landlord does not cure such Abatement Event within five (5) business
days of receipt of the Additional Notice, Tenant may, upon written notice to
Landlord, immediately abate Rent payable under this Lease for that portion

 
 
 

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of the Premises rendered untenantable and not used by Tenant, for the period
beginning on the date five (5) business days after the Initial Notice to the
earlier of the date Landlord cures such Abatement Event or the date Tenant
recommences the use of such portion of the Premises. Such right to abate Rent
shall be Tenant's sole and exclusive remedy at law or in equity for an Abatement
Event. Except as provided in this Section 6.4, nothing contained herein shall be
interpreted to mean that Tenant is excused from paying Rent due hereunder.
SECTION 7    

REPAIRS
7.1    Tenant Repair Obligations. Tenant shall, throughout the Term, at its sole
cost and expense, maintain, repair, replace and improve as required, the
Premises and Building and every part thereof in a good standard of maintenance,
repair and replacement as required, and in good and sanitary condition, all in
accordance with the standards of First Class Life Sciences Projects, except for
Landlord Repair Obligations, whether or not such maintenance, repair,
replacement or improvement is required in order to comply with applicable Laws
("Tenant's Repair Obligations"), including the following: (1) glass, windows,
window frames, window casements (including the repairing, resealing, cleaning
and replacing of both interior and exterior windows) and skylights; (2) interior
and exterior doors, door frames and door closers; (3) interior lighting
(including light bulbs and ballasts); (4) the plumbing, sewer, drainage,
electrical, fire protection, elevator, escalator, life safety and security
systems and equipment, existing heating, ventilation and air-conditioning
systems, and all other mechanical, electrical and communications systems and
equipment (collectively, the "Building Systems"), including (i) any specialty or
supplemental Building Systems installed by or for Tenant and (ii) all electrical
facilities and equipment, including lighting fixtures, lamps, fans and any
exhaust equipment and systems, electrical motors and all other appliances and
equipment of every kind and nature located in, upon or about the Premises; (5)
all communications systems serving the Premises; (6) all of Tenant's security
systems in or about or serving the Premises; (7) Tenant's signage; (8) interior
demising walls and partitions (including painting and wall coverings),
equipment, floors, and any roll-up doors, ramps and dock equipment; and (9) the
non-structural portions of the roof of the Building, including the roof membrane
and coverings. Tenant shall additionally be responsible, at Tenant’s sole cost
and expense, to furnish all expendables, including light bulbs, paper goods and
soaps, used in the Premises, and, to the extent that Landlord notifies Tenant in
writing of its intention to no longer arrange for such monitoring, cause the
fire alarm systems serving the Premises to be monitored by a monitoring or
protective services firm approved by Landlord in writing.
7.2    Service Contracts. All Building Systems, including HVAC, elevators, main
electrical, plumbing and fire/life-safety systems, shall be maintained, repaired
and replaced by Tenant (i) in a commercially reasonable first-class condition,
(ii) in accordance with any applicable manufacturer specifications relating to
any particular component of such Building Systems, (iii) in accordance with
applicable Laws. Tenant shall contract with a qualified, experienced
professional third party service companies (a "Service Contract"). Tenant shall
regularly, in accordance with commercially reasonable standards, generate and
maintain preventive maintenance records relating to each Building’s mechanical
and main electrical systems, including life safety, elevators and the central
plant (“Preventative Maintenance Records”). In addition, upon Landlord’s
request, Tenant shall deliver a copy of all current Service Contracts to
Landlord and/or a copy of the Preventative Maintenance Records.
7.3    Landlord's Right to Perform Tenant's Repair Obligations. Tenant shall
notify Landlord in writing at least thirty (30) days prior to performing any
material Tenant's Repair Obligations, including any Tenant's Repair Obligation
that affects the Building Systems or are reasonably anticipated to cost more
than $100,000.00. Upon receipt of such notice from Tenant, Landlord shall have
the right to either (i) perform such material Tenant's Repair Obligation by
delivering notice of such election to Tenant within thirty (30) days following
receipt of Tenant's notice, and Tenant shall pay Landlord the reasonable and
documented cost thereof (including Landlord's reasonable supervision fee) within
thirty (30) days after receipt of an invoice therefor, or (ii) require Tenant to
perform such Tenant's Repair Obligation at Tenant's sole cost and expense. If
Tenant fails to perform any Tenant's Repair Obligation within a reasonable time
period, as reasonably determined by Landlord, then Landlord may, but need not,
following delivery of notice to Tenant of such election, make such Tenant Repair
Obligation, and Tenant shall pay Landlord the cost thereof, (including
Landlord's reasonable supervision fee) within thirty (30) days after receipt of
an invoice therefor.

 
 
 

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7.4    Landlord Repair Obligations. Landlord shall be responsible for repairs to
the exterior walls, foundation and roof of the Building, the structural portions
of the floors of the Building, and for the maintenance of the load bearing and
exterior walls of the Building, including any painting, sealing, patching and
waterproofing of such walls (the "Landlord Repair Obligation"); provided,
however, that if such repairs or maintenance are due to the negligence or
willful misconduct of Tenant, Landlord shall nevertheless make such repairs or
perform such maintenance at Tenant's expense, or, if covered by Landlord's
insurance, Tenant shall only be obligated to pay any deductible in connection
therewith.
SECTION 8    

ADDITIONS AND ALTERATIONS
8.1    Landlord's Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes to the Premises or any mechanical, plumbing or
HVAC facilities or systems pertaining to the Premises (collectively, but
excluding the initial improvements to the Premises done pursuant to the Work
Letter, the "Alterations") without first procuring the prior written consent of
Landlord to such Alterations, which consent shall be requested by Tenant not
less than twenty (20) days prior to the commencement thereof, and which consent
shall not be unreasonably withheld, conditioned or delayed by Landlord, provided
it shall be deemed reasonable for Landlord to withhold its consent to any
Alteration which adversely affects the structural portions or the systems or
equipment of the Building or is visible from the exterior of the Building.
Notwithstanding the foregoing, Tenant shall be permitted to make Alterations
following ten (10) business days notice to Landlord, but without Landlord's
prior consent, to the extent that such Alterations do not require the issuance
of a building permit, do not adversely affect the Base Building, and are not
visible from outside the Premises) and cost less than One Hundred Thousand
Dollars ($100,000) with respect to any one project. The construction of the
initial improvements to the Premises shall be governed by the terms of the Work
Letter and not the terms of this Article 8.
8.2    Manner of Construction. Landlord may impose, as a condition of its
consent to any and all Alterations or repairs of the Premises or about the
Premises, such 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, subcontractors, materials, mechanics and
materialmen selected by Tenant from a list provided and approved by Landlord,
the requirement that upon Landlord's request, Tenant shall, at Tenant's expense,
remove such Alterations upon the expiration or any early termination of the
Lease Term. Tenant shall construct such Alterations and perform such repairs in
a good and workmanlike manner, in conformance with any and all applicable
federal, state, county or municipal laws, rules and regulations and pursuant to
a valid building permit, issued by the city in which the Building is located (or
other applicable governmental authority), all in conformance with Landlord's
construction rules and regulations; provided, however, that prior to commencing
to construct any Alteration, Tenant shall meet with Landlord to discuss
Landlord's design parameters and code compliance issues. In the event Tenant
performs any Alterations in the Premises which require or give rise to
governmentally required changes to the "Base Building," as that term is defined
below, then Landlord shall, at Tenant's expense, make such changes to the Base
Building. The "Base Building" shall include the structural portions of the
Building, and the public restrooms, elevators, exit stairwells and the systems
and equipment located in the internal core of the Building on the floor or
floors on which the Premises are located. In performing the work of any such
Alterations, Tenant shall have the work performed in such manner so as not to
obstruct access to the Project or any portion thereof, by any other tenant of
the Project, and so as not to obstruct the business of Landlord or other tenants
in the Project. Tenant shall not use (and upon notice from Landlord shall cease
using) contractors, services, workmen, labor, materials or equipment that, in
Landlord's reasonable judgment, would disturb labor harmony with the workforce
or trades engaged in performing other work, labor or services in or about the
Building or the Common Areas. In addition to Tenant's obligations under Article
9 of this Lease, upon completion of any Alterations, Tenant agrees to cause a
Notice of Completion to be recorded in the office of the Recorder of the County
of Alameda in accordance with Section 8182 of the Civil Code of the State of
California or any successor statute, and Tenant shall deliver to the Project
construction manager a reproducible copy of the "as built" drawings of the
Alterations as well as all permits, approvals and other documents issued by any
governmental agency in connection with the Alterations.
8.3    Payment for Improvements. If payment is made by Tenant directly to
contractors, Tenant shall (i) comply with Landlord's requirements for final lien
releases and waivers in connection with Tenant's payment for work

 
 
 

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to contractors, and (ii) sign Landlord's standard contractor's rules and
regulations. If Tenant orders any work directly from Landlord, Tenant shall pay
to Landlord an amount equal to three percent (3%) of the cost of such work to
compensate Landlord for all overhead, general conditions, fees and other costs
and expenses arising from Landlord's involvement with such work. If Tenant does
not order any work directly from Landlord, Tenant shall reimburse Landlord for
Landlord's reasonable, actual, out-of-pocket costs and expenses actually
incurred in connection with Landlord's review of such work.
8.4    Construction Insurance. In addition to the requirements of Article 10 of
this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may reasonably require, it being understood and agreed that all of
such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, Tenant's contractors and
subcontractors shall be required to carry Commercial General Liability Insurance
in an amount approved by Landlord and otherwise in accordance with the
requirements of Article 10 of this Lease. In connection with Alterations the
anticipated cost of which exceeds Five Hundred Thousand Dollars ($500,000),
Landlord may, in its discretion, require Tenant to obtain a lien and completion
bond or some alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of such Alterations and naming
Landlord as a co-obligee.
8.5    Landlord's Property. All Alterations, improvements, fixtures, equipment
and/or appurtenances which may be installed or placed in 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, except that Tenant may remove any Alterations,
improvements, fixtures and/or equipment which Tenant can substantiate to
Landlord have not been paid for with any Tenant improvement allowance funds
provided to Tenant by Landlord, provided Tenant repairs any damage to the
Premises and Building caused by such removal and returns the affected portion of
the Premises to the condition existing prior to construction of such Alterations
or improvements. Furthermore, Landlord may, by written notice to Tenant prior to
the end of the Lease Term, or given following any earlier termination of this
Lease, require Tenant, at Tenant's expense, to remove any Alterations and/or
improvements and/or systems and equipment within the Premises and to repair any
damage to the Premises and Building caused by such removal and return the
affected portion of the Premises to the condition existing prior to construction
of such Alterations or improvements; provided, however, that notwithstanding the
foregoing, upon request by Tenant at the time of Tenant's request for Landlord's
consent to Alterations or improvements, Landlord shall notify Tenant whether the
applicable Alteration or improvement will be required to be removed pursuant to
the terms of this Section 8.5. If by the end of the Lease Term (including the
sooner termination thereof), Tenant fails to complete such removal and/or to
repair any damage caused by the removal of any Alterations and/or improvements
and/or systems and equipment in the Premises and return the affected portion of
the Premises to the condition existing prior to construction of such Alterations
or improvements, Landlord may do so and may charge the cost thereof to Tenant.
Tenant hereby protects, defends, indemnifies and holds Landlord harmless from
any liability, cost, obligation, expense or claim of lien in any manner relating
to the installation, placement, removal or financing of any such Alterations,
improvements, fixtures and/or equipment in, on or about the Premises, which
obligations of Tenant shall survive the expiration or earlier termination of
this Lease.
SECTION 9    

COVENANT AGAINST LIENS
Tenant shall keep the Project and Premises free from any liens or encumbrances
arising out of the work performed, materials furnished or obligations incurred
by or on behalf of Tenant, and shall protect, defend, indemnify and hold
Landlord harmless from and against any claims, liabilities, judgments or costs
(including, without limitation, reasonable attorneys' fees and costs) arising
out of same or in connection therewith. Tenant shall give Landlord notice at
least twenty (20) days prior to the commencement of any such work on the
Premises (or such additional time as may be necessary under applicable laws) to
afford Landlord the opportunity of posting and recording appropriate notices of
non-responsibility. Tenant shall remove any such lien or encumbrance by bond or
otherwise within ten (10) business days after notice by Landlord, and if Tenant
shall fail to do so, Landlord may pay the amount necessary to remove such lien
or encumbrance, without being responsible for investigating the validity
thereof. The amount so paid shall be

 
 
 

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deemed Additional Rent under this Lease payable upon demand, without limitation
as to other remedies available to Landlord under this Lease. Nothing contained
in this Lease shall authorize Tenant to do any act which shall subject
Landlord's title to the Building or Premises to any liens or encumbrances
whether claimed by operation of law or express or implied contract. Any claim to
a lien or encumbrance upon the Building or Premises arising in connection with
any such work or respecting the Premises not performed by or at the request of
Landlord shall be null and void, or at Landlord's option shall attach only
against Tenant's interest in the Premises and shall in all respects be
subordinate to Landlord's title to the Project, Building and Premises.
SECTION 10    

INSURANCE
10.1    Indemnification and Waiver. Except to the extent arising from the gross
negligence or willful misconduct of Landlord or the "Landlord Parties," as that
term is defined below, Tenant hereby assumes all risk of damage to property or
injury to persons in, upon or about the Premises from any cause whatsoever
(including, but not limited to, any personal injuries resulting from a slip and
fall in, upon or about the Premises) and agrees that Landlord, its partners,
subpartners and their respective officers, agents, servants, employees, and
independent contractors (collectively, "Landlord Parties") shall not be liable
for, and are hereby released from any responsibility for, any damage either to
person or property or resulting from the loss of use thereof, which damage is
sustained by Tenant or by other persons claiming through Tenant. Tenant shall
indemnify, defend, protect, and hold harmless the Landlord Parties from any and
all loss, cost, damage, expense and liability (including without limitation
court costs and reasonable attorneys' fees) incurred in connection with or
arising from any cause in, on or about the Premises (including, but not limited
to, a slip and fall), any acts, omissions or negligence of Tenant or of any
person claiming by, through or under Tenant, or of the contractors, agents,
servants, employees, invitees, guests or licensees of Tenant or any such person,
in, on or about the Project or any breach of the terms of this Lease, either
prior to, during, or after the expiration of the Lease Term, provided that the
terms of the foregoing indemnity shall not apply to the negligence or willful
misconduct of Landlord. Should Landlord be named as a defendant in any suit
brought against Tenant in connection with or arising out of Tenant's occupancy
of the Premises, Tenant shall pay to Landlord its costs and expenses incurred in
such suit, including without limitation, its actual professional fees such as
reasonable appraisers', accountants' and attorneys' fees. The provisions of this
Section 10.1 shall survive the expiration or sooner termination of this Lease
with respect to any claims or liability arising in connection with any event
occurring prior to such expiration or termination.
10.2    Landlord's Fire and Casualty Insurance. Landlord shall insure the
Building during the Lease Term against loss or damage due to fire and other
casualties covered within the classification of fire and extended coverage,
vandalism coverage and malicious mischief, sprinkler leakage, water damage and
special extended coverage. Such coverage shall be in an amount equal to at least
the replacement value of the Building. Landlord shall also carry rent
continuation insurance. Additionally, at the option of Landlord, such insurance
coverage may include the risks of earthquakes and/or flood damage and additional
hazards, a rental loss endorsement and one or more loss payee endorsements in
favor of the holders of any mortgages or deeds of trust encumbering the interest
of Landlord in the Building or the ground or underlying lessors of the Building,
or any portion thereof. The foregoing coverages shall contain commercially
reasonable deductible amounts from such companies, and on such other terms and
conditions, as Landlord may from time to time reasonably determine, but shall,
at a minimum, be comparable to the coverages which are carried by reasonably
prudent landlords of buildings comparable to and in the vicinity of the Building
(provided that in no event shall Landlord be required to carry earthquake
insurance). Tenant shall, at Tenant's expense, comply with all insurance company
requirements pertaining to the use of the Premises. 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 on an occurrence form covering
the insured against claims of bodily injury, personal injury and property damage
(including loss of use thereof) arising out of Tenant's operations, and
contractual liabilities (covering the performance by Tenant of its indemnity
agreements) including a

 
 
 

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Broad Form endorsement covering the insuring provisions of this Lease and the
performance by Tenant of the indemnity agreements set forth in Section 10.1 of
this Lease, and including products and completed operations coverage, for limits
of liability on a per location basis of not less than:
Bodily Injury and
Property Damage Liability
$5,000,000 each occurrence
$5,000,000 annual aggregate
Personal Injury Liability
$5,000,000 each occurrence
$5,000,000 annual aggregate

10.3.2    Physical Damage Insurance covering (i) all office furniture, business
and trade fixtures, office equipment, free-standing cabinet work, movable
partitions, 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,"
as that term is defined in the Tenant Work Letter, and any other improvements
which exist in the Premises as of the Lease Commencement Date (excluding the
Base Building) (the "Original Improvements"), and (iii) all other improvements,
alterations and additions to the Premises. Such insurance shall be written on an
"all risks" of physical loss or damage basis, for the full replacement cost
value (subject to reasonable deductible amounts) 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 coverage for damage or
other loss caused by fire or other peril including, but not limited to,
vandalism and malicious mischief, theft, water damage of any type (excluding
flood), including sprinkler leakage, bursting or stoppage of pipes, and
explosion, and providing business interruption coverage for a period of one
year.
10.3.3    Worker's Compensation and Employer's Liability or other similar
insurance pursuant to all applicable state and local statutes and regulations.
10.4    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 the
Landlord so specifies, as an additional insured, including Landlord's managing
agent, if any; (ii) specifically cover the liability assumed by Tenant under
this Lease, including, but not limited to, Tenant's obligations under
Section 10.1 of this Lease; (iii) be issued by an insurance company having a
rating of not less than A-:X in Best's Insurance Guide or which is otherwise
acceptable to Landlord and licensed to do business in the State of California;
(iv) be primary and noncontributory 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) be in form and content reasonably
acceptable to Landlord; and (vi) provide that said insurance shall not be
canceled or coverage changed unless thirty (30) days' prior written notice shall
have been given to Landlord and any mortgagee of Landlord. Tenant shall deliver
said policy or policies or certificates thereof to Landlord on or before the
Lease Commencement Date and at least ten (10) days after the expiration dates
thereof. Further, Landlord shall have the right, from time to time, to request
copies of policies of Tenant's insurance required hereunder, which Tenant shall
thereafter provide within ten (10) business days. In the event Tenant shall fail
to procure such insurance, or to deliver such certificate, Landlord may, at its
option, procure such policies for the account of Tenant, and the cost thereof
shall be paid to Landlord within five (5) days after delivery to Tenant of bills
therefor.
10.5    Subrogation. Landlord and Tenant intend that their respective property
loss risks shall be borne by reasonable insurance carriers to the extent above
provided, and Landlord and Tenant hereby agree to look solely to, and seek
recovery only from, their respective insurance carriers in the event of a
property loss to the extent that such coverage is agreed to be provided
hereunder. The parties each hereby waive all rights and claims against each
other for such losses, and waive all rights of subrogation of their respective
insurers, provided such waiver of subrogation shall not affect the right to the
insured to recover thereunder. The parties agree that their respective insurance
policies are now, or shall be, endorsed such that the waiver of subrogation
shall not affect the right of the insured to recover thereunder, so long as no
material additional premium is charged therefor.
10.6    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

 
 
 

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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, but in no event in excess of the amounts
and types of insurance then being required by landlords of Comparable Buildings.
SECTION 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 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 Building and such Common Areas. Such
restoration shall be to substantially the same condition of the Base Building
and the Common Areas 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
Building or Project or any other modifications to the Common Areas deemed
desirable by Landlord, which are consistent with the character of the Project,
provided that access to the Premises and any common restrooms serving the
Premises shall not be materially impaired. Upon the occurrence of any damage to
the Premises, upon notice (the "Landlord Repair Notice") to Tenant from
Landlord, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable to Tenant under Tenant's insurance
required under Section 10.3 of this Lease, and Landlord shall repair any injury
or damage to the Tenant Improvements and the Original Improvements installed in
the Premises and shall return such Tenant Improvements and Original Improvements
to their original condition; provided that if the cost of such repair by
Landlord exceeds the amount of insurance proceeds received by Landlord from
Tenant's insurance carrier, as assigned by Tenant, the cost of such repairs
shall be paid by Tenant to Landlord prior to Landlord's commencement of repair
of the damage. In the event that Landlord does not deliver the Landlord Repair
Notice within sixty (60) days following the date the casualty becomes known to
Landlord, Tenant shall, at its sole cost and expense, repair any injury or
damage to the Tenant Improvements and the Original Improvements installed in the
Premises and shall return such Tenant Improvements and Original Improvements to
their original condition. Whether or not Landlord delivers a Landlord Repair
Notice, prior to the commencement of construction, Tenant shall 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 or
Common Areas necessary to Tenant's occupancy, and the Premises are not occupied
by Tenant as a result thereof, then during the time and to the extent the
Premises are unfit for occupancy, the Rent shall be abated in proportion to the
ratio that the amount of rentable square feet of the Premises which is unfit for
occupancy for the purposes permitted under this Lease bears to the total
rentable square feet of the Premises. In the event that Landlord shall not
deliver the Landlord Repair Notice, Tenant's right to rent abatement pursuant to
the preceding sentence shall terminate as of the date which is reasonably
determined by Landlord to be the date Tenant should have completed repairs to
the Premises assuming Tenant used reasonable due diligence in connection
therewith.
11.2    Landlord's Option to Repair. Notwithstanding the terms of Section 11.1
of this Lease, Landlord may elect not to rebuild and/or restore the Premises,
Building and/or Project, and instead terminate this Lease, by notifying Tenant
in writing of such termination within sixty (60) days after the date of
discovery of the damage, such notice to include a termination date giving Tenant
sixty (60) days to vacate the Premises, but Landlord may so elect only if the
Building or Project shall be damaged by fire or other casualty or cause, whether
or not the Premises are affected, and one or more of the following conditions is
present: (i) in Landlord's reasonable judgment, repairs cannot reasonably be
completed within one hundred eighty (180) days after the date of discovery of
the damage (when such repairs are made without the payment of overtime or other
premiums); (ii) the holder of any mortgage on the Building or Project or ground
lessor with respect to the Building or Project 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; (iii) the damage is not fully
covered by Landlord's insurance policies; (iv) Landlord decides to rebuild the
Building or Common Areas so that they will be substantially different
structurally or architecturally; or (v) the damage occurs during the last twelve
(12) months of the Lease Term; provided, however, that if Landlord does not
elect to terminate this Lease

 
 
 

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pursuant to Landlord's termination right as provided above, and the repairs
cannot, in the reasonable opinion of Landlord, be completed within one hundred
eighty (180) days after being commenced, or the damage occurs in the last twelve
(12) months of the Term, Tenant may elect, no earlier than sixty (60) days after
the date of the damage and not later than ninety (90) days after the date of
such damage, to terminate this Lease by written notice to Landlord effective as
of the date specified in the notice, which date shall not be less than thirty
(30) days nor more than sixty (60) days after the date such notice is given by
Tenant. Notwithstanding the provisions of this Section 11.2, Tenant shall have
the right to terminate this Lease under this Section 11.2 only if each of the
following conditions is satisfied: (a) the damage to the Project by fire or
other casualty was not caused by the gross negligence or intentional act of
Tenant or its partners or subpartners and their respective officers, agents,
servants, employees, and independent contractors; (b) Tenant is not then in
default under this Lease; (c) as a result of the damage, Tenant cannot
reasonably conduct business from the Premises; and, (d) as a result of the
damage to the Project, Tenant does not occupy or use the Premises at all.
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 the Project, and any statute or regulation of the
State of California, 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 the Project.
SECTION 12    

NONWAIVER
No provision of this Lease shall be deemed waived by either party hereto unless
expressly waived in a writing signed thereby. The waiver by either party hereto
of any breach of any term, covenant or condition herein contained shall not be
deemed to be a waiver of any subsequent breach of same or any other term,
covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be
deemed a waiver of Landlord's right to receive the full amount due, nor shall
any endorsement or statement on any check or payment or any letter accompanying
such check or payment be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the full amount due. 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.
SECTION 13    

CONDEMNATION
If the whole or any 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 effective as of the date
possession is required to be surrendered to the authority. 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, in each case for a
period in excess of one hundred eighty (180) days, Tenant shall have the option
to terminate this Lease effective as of the date possession is required to be
surrendered to the authority. Tenant shall not because of such taking assert any
claim against Landlord or the authority for any compensation because of such
taking and Landlord

 
 
 

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shall be entitled to 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 claims do not diminish
the award available to Landlord, its ground lessor with respect to the Building
or Project or its mortgagee, and such claim is payable separately to Tenant. All
Rent shall be apportioned as of the date of such termination. If any part of the
Premises shall be taken, and this Lease shall not be so terminated, the Rent
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. Notwithstanding anything to the contrary contained in this
Article 13, 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 the Additional Rent 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.
SECTION 14    

ASSIGNMENT AND SUBLETTING
14.1    Transfers. Except with respect to "Permitted Transfers," as that term is
defined in Section 14.8 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 transfer of this Lease or any
interest hereunder by operation of law, sublet the Premises or any part thereof,
or enter into any license or concession agreements or otherwise permit the
occupancy or use of the Premises or any part thereof by any persons other than
Tenant and its employees and contractors (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 desires Landlord's consent to any Transfer, except with
respect to Permitted Transfers, 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 twenty (20) 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) all of the terms of the proposed Transfer and the
consideration therefor, including calculation of the "Transfer Premium", as that
term is defined in Section 14.3 below, in connection with such Transfer, the
name and address of the proposed Transferee, and a copy of all existing executed
and/or proposed documentation pertaining to the proposed Transfer, including all
existing operative documents to be executed to evidence such Transfer or the
agreements incidental or related to such Transfer, (iv) current financial
statements of the proposed Transferee certified by an officer, partner or owner
thereof, business credit and personal references and history of the proposed
Transferee and any other information reasonably required by Landlord which will
enable Landlord to determine the financial responsibility, character, and
reputation of the proposed Transferee, nature of such Transferee's business and
proposed use of the Subject Space, and (v) an executed estoppel certificate from
Tenant in the form attached hereto as Exhibit E. Any Transfer requiring
Landlord's consent and 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
consents to any proposed Transfer, Tenant shall pay Landlord's reasonable review
and processing fees, as well as any reasonable professional fees (including,
without limitation, attorneys', accountants', architects', engineers' and
consultants' fees) incurred by Landlord, within thirty (30) days after written
request by Landlord; provided that such costs and expenses shall not exceed Two
Thousand Five Hundred and 00/100 Dollars ($2,500.00) for a Transfer in the
ordinary course of business. Landlord and Tenant hereby agree that a proposed
Transfer shall not be considered "in the ordinary course of business" if such
particular proposed Transfer involves the review of documentation by Landlord on
more than two (2) occasions.

 
 
 

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14.2    Landlord's Consent. Landlord shall not unreasonably withhold or delay
its consent to any proposed Transfer of the Subject Space to the Transferee on
the terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, 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:
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 the
Project;
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 or a non‑profit organization;
14.2.4    The Transferee is not a party of reasonable financial worth and/or
financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested;
14.2.5    The proposed Transfer would cause a violation of another lease for
space in the Project, 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, or (ii) is negotiating with Landlord or has negotiated with
Landlord during the six (6) month period immediately preceding the date Landlord
receives the Transfer Notice, to lease space in the Project, provided Landlord
then has space available for lease in the Project, at the relevant time,
comparable in size to the Subject Space.
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
of this Lease), 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 of this Lease, provided that if there are any
changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 14.2, or (ii) which would cause the proposed
Transfer to be more favorable to the Transferee than the terms set forth in
Tenant's original Transfer Notice, 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 of this Lease).
Notwithstanding anything to the contrary in this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent under Section 14.2 or otherwise has breached or acted unreasonably
under this Article 14, their sole remedies shall be a suit for contract damages
(other than damages for injury to, or interference with, Tenant's business
including, without limitation, loss of profits, however occurring) or
declaratory judgment and an injunction for the relief sought, and Tenant hereby
waives all other remedies, including, without limitation, any right at law or
equity to terminate this Lease, on its own behalf and, to the extent permitted
under all applicable laws, on behalf of the proposed Transferee.
14.3    Transfer Premium. 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 that term is defined
in this Section 14.3, received by Tenant from such Transferee. "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer 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 changes, alterations and improvements to the Premises in connection with the
Transfer, (ii) any free base rent reasonably provided to the Transferee in
connection with the Transfer (provided that such free rent shall be deducted
only to the extent the same is included in the calculation of total
consideration payable by such Transferee), (iii) any brokerage commissions in
connection with the Transfer, (iv) legal fees reasonably incurred in connection
with the

 
 
 

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Transfer and (v) any amounts payable to Landlord in connection with a request
for consent to such Transfer (collectively, "Tenant's Subleasing Costs").
"Transfer Premium" shall also include, but not be limited to, key money, bonus
money or other cash consideration 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. The determination of the amount of Landlord's applicable share of the
Transfer Premium shall be made on a monthly basis as rent or other consideration
is received by Tenant under the Transfer.
14.4    Landlord's Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, in the event Tenant contemplates a
Transfer that, together with all prior Transfers (not including Permitted
Transfers) remaining in effect would cause fifty-five percent (55%) or more of
the Premises to be Transferred for more than fifty percent (50%) of the then
remaining Lease Term (taking into account any extension of the Lease Term that
has been irrevocably exercised by Tenant), Tenant shall give Landlord notice
(the "Intention to Transfer Notice") of such contemplated Transfer (whether or
not the contemplated Transferee or the terms of such contemplated Transfer have
been determined; provided that Tenant shall not be required to deliver an
Intention to Transfer Notice and Landlord have no right to recapture in
connection with a "Permitted Transfer," as that term is defined in Section 14.8
below). The Intention to Transfer Notice shall specify the portion of and amount
of rentable square feet of the Premises which Tenant intends to Transfer (the
"Contemplated Transfer Space"), the contemplated date of commencement of the
Contemplated Transfer (the "Contemplated Effective Date"), and the contemplated
length of the term of such contemplated Transfer, and shall specify that such
Intention to Transfer Notice is delivered to Landlord pursuant to this
Section 14.4 in order to allow Landlord to elect to recapture the Contemplated
Transfer Space. Thereafter, Landlord shall have the option, by giving written
notice to Tenant within twenty (20) days after receipt of any Intention to
Transfer Notice, to recapture the Contemplated Transfer Space. Such recapture
shall cancel and terminate this Lease with respect to such Contemplated Transfer
Space as of the Contemplated Effective Date. If Landlord elects to recapture,
Tenant shall have the right, by written notice to Landlord within five (5)
business days after such election by Landlord, to rescind the Intention to
Transfer Notice, in which case the proposed Transfer shall be ineffective, and
Landlord shall not recapture the Contemplated Transfer Space. In the event of a
recapture by Landlord, if this Lease shall be canceled with respect to less than
the entire Premises, the Rent reserved herein shall be prorated on the basis of
the number of rentable square feet retained by Tenant in proportion to the
number of rentable square feet contained in the Premises, and this Lease as so
amended shall continue thereafter in full force and effect, and upon request of
either party, the parties shall execute written confirmation of the same. If
Landlord declines, or fails to elect in a timely manner, to recapture such
Contemplated Transfer Space under this Section 14.4, then, subject to the other
terms of this Article 14, for a period of twelve (12) months (the "Twelve Month
Period") commencing on the last day of such thirty (30) day period, Landlord
shall not have any right to recapture the Contemplated Transfer Space with
respect to any Transfer made during the Twelve Month Period, provided that any
such Transfer is substantially on the terms set forth in the Intention to
Transfer Notice, and provided further that any such Transfer shall be subject to
the remaining terms of this Article 14. If such a Transfer is not so consummated
within the Twelve Month Period (or if a Transfer is so consummated, then upon
the expiration of the term of any Transfer of such Contemplated Transfer Space
consummated within such Twelve Month Period), Tenant shall again be required to
submit a new Intention to Transfer Notice to Landlord with respect any
contemplated Transfer, as provided above in this Section 14.4.
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, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) 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 any liability under this Lease, including, without limitation, in
connection with the Subject Space. In the event that Tenant subleases all or any
portion of the Premises in accordance with the terms of this Article 14, Tenant
shall cause such subtenant to carry and maintain the same insurance coverage
terms and limits as are required of Tenant, in accordance with the terms of
Article 10 of 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

 
 
 

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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 if understated by more than two percent (2%), Tenant shall pay
Landlord's costs of such audit.
14.6    Additional Transfers. For purposes of this Lease, the term "Transfer"
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of fifty percent (50%) or more of
the partners, or transfer of fifty percent (50%) or more of partnership
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 or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more 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 an aggregate of fifty percent (50%) or more of the value of the
unencumbered assets of Tenant within a twelve (12)-month period.
14.7    Occurrence of Default. Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, Landlord shall have the right to: (i) treat
such Transfer as cancelled and repossess the Subject Space by any lawful means,
or (ii) require that such Transferee attorn to and recognize Landlord as its
landlord under any such Transfer. If Tenant shall be in default beyond any
applicable cure period under this Lease, Landlord is hereby irrevocably
authorized, as Tenant's agent and attorney-in-fact, to direct any Transferee to
make all payments under or in connection with the Transfer directly to Landlord
(which Landlord shall apply towards Tenant's obligations under this Lease) until
such default is cured. Such Transferee shall rely on any representation by
Landlord that Tenant is in default beyond any applicable cure period hereunder,
without any need for confirmation thereof by Tenant. Upon any assignment, the
assignee shall assume in writing all obligations and covenants of Tenant
thereafter to be performed or observed under this Lease. No collection or
acceptance of rent by Landlord from any Transferee shall be deemed a waiver of
any provision of this Article 14 or the approval of any Transferee or a release
of Tenant from any obligation under this Lease, whether theretofore or
thereafter accruing. In no event shall Landlord's enforcement of any provision
of this Lease against any Transferee be deemed a waiver of Landlord's right to
enforce any term of this Lease against Tenant or any other person. If Tenant's
obligations hereunder have been guaranteed, Landlord's consent to any Transfer
shall not be effective unless the guarantor also consents to such Transfer.
14.8    Deemed Consent Transfers. Notwithstanding anything to the contrary
contained in this Lease, (A) an assignment or subletting of all or a portion of
the Premises to an affiliate of Tenant (an entity which is controlled by,
controls, or is under common control with, Tenant as of the date of this Lease),
(B) a private offering of Tenant's stock or a public offering of Tenant's stock
on a nationally-recognized stock exchange, (C) an assignment of the Lease to an
entity which acquires all or substantially all of the stock or assets of Tenant,
or (D) an assignment of the Lease to an entity which is the resulting entity of
a merger or consolidation of Tenant during the Lease Term (each a "Permitted
Transfer"), shall not be deemed a Transfer requiring Landlord's consent under
this Article 14 (any such assignee or sublessee described in items (A) through
(D) of this Section 14.8 hereinafter referred to as a "Permitted Transferee"),
provided that (i) Tenant notifies Landlord in writing of any such assignment or
sublease (which written notification shall be given not less than ten (10) days
prior to the effective date of such assignment or sublease, if reasonably
practicable, not a breach of confidentiality and not in violation of any
Applicable Laws, but in any event within five (5) days after the effective date
of such assignment or sublease), and promptly supplies Landlord with any
documents or information reasonably requested by Landlord regarding such
Transfer or Permitted Transferee as set forth above, (ii) Tenant is not in
default, beyond the applicable notice and cure period, and such assignment or
sublease is not a subterfuge by Tenant to avoid its obligations under this
Lease, (iii) such Permitted Transferee shall be of a character and reputation
consistent with the quality of the Building, (iv) such Permitted Transferee
shall have a tangible net worth (not including goodwill as an asset) computed in
accordance with generally accepted accounting principles ("Net Worth") at least
equal to the Net Worth of Original Tenant on the date of this Lease, (v) no
assignment or sublease relating to this Lease, whether with or without
Landlord's consent, shall relieve Tenant from any liability under this Lease,
and (vi) the liability of such Permitted Transferee under either an assignment
of sublease shall be joint and several with Tenant. An assignee of Tenant's
entire interest in this Lease who qualifies as a Permitted Transferee may also
be referred to herein as a "Permitted Transferee Assignee." "Control," as used
in this Section 14.8, shall mean the ownership, directly or indirectly, of more
than fifty percent (50%) of the voting securities of, or possession of the

 
 
 

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right to vote, in the ordinary direction of its affairs, of more than fifty
percent (50%) of the voting interest in, any person or entity.
SECTION 15    

SURRENDER OF PREMISES; OWNERSHIP AND
REMOVAL OF TRADE FIXTURES
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 writing 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 or terminate any or all such sublessees or
subtenancies.
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. 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, business and trade fixtures,
free-standing cabinet work, movable partitions 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. Tenant shall not be required to remove any Alterations or initial
Tenant Improvements unless Landlord notifies Tenant in writing, at the time of
Landlord's approval of such Alterations or Tenant Improvements, that Landlord
will require removal of specifically identified portions of such Alterations or
initial Tenant Improvements, or unless Tenant has installed the same without
Landlord's approval.
SECTION 16    

HOLDING OVER
If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, such tenancy shall be a tenancy‑at‑sufferance, and shall
not constitute a renewal hereof or an extension for any further term, and in
such case Rent shall be payable at a daily rate equal to the 150% of the daily
Rent applicable during the last rental period of the Lease Term under this
Lease. Such tenancy shall be subject to every other applicable term, covenant
and agreement contained herein. Nothing contained in this Article 16 shall be
construed as consent by Landlord to any holding over by Tenant, and Landlord
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. If Tenant holds over without Landlord's express
written consent, and tenders payment of rent for any period beyond the
expiration of the Lease Term by way of check (whether directly to Landlord, its
agents, or to a lock box) or wire transfer, Tenant acknowledges and agrees that
the cashing of such check or acceptance of such wire shall be considered
inadvertent and not be construed as creating a month-to-month tenancy, provided
Landlord refunds such payment to Tenant promptly upon learning that such check
has been cashed or wire transfer received. 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. Tenant agrees that any proceedings necessary to recover
possession of the Premises, whether before or after

 
 
 

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expiration of the Lease Term, shall be considered an action to enforce the terms
of this Lease for purposes of the awarding of any attorney’s fees in connection
therewith.
SECTION 17    

ESTOPPEL CERTIFICATES
Within ten (10) business days following a request in writing by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord an estoppel certificate,
which, as submitted by Landlord, shall be substantially in the form of
Exhibit E, attached hereto (or such other form as may be 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 information reasonably requested by Landlord or
Landlord's mortgagee or prospective mortgagee. Any such certificate may be
relied upon by any prospective mortgagee or purchaser of all or any portion of
the Project. Tenant shall execute and deliver whatever other instruments may be
reasonably required for such purposes. At any time during the Lease Term,
Landlord may require Tenant to provide Landlord with a current financial
statement and financial statements of the two (2) years prior to the current
financial statement year. Such statements shall be prepared in accordance with
generally accepted accounting principles and, if such is the normal practice of
Tenant, shall be audited by an independent certified public accountant. Failure
of Tenant to timely execute, acknowledge and deliver such estoppel certificate
or other instruments 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.
SECTION 18    

SUBORDINATION
This Lease shall be subject and subordinate to all present and future ground or
underlying leases of the Building or Project and to the lien of any mortgage,
trust deed or other encumbrances now or hereafter in force against the Building
or Project or any part thereof, 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 mortgages or trust deeds,
unless the holders of such mortgages, trust deeds or other encumbrances, or the
lessors under such ground lease or underlying leases, require in writing that
this Lease be superior thereto. Tenant covenants and agrees in the event any
proceedings are brought for the foreclosure of any such mortgage or deed in lieu
thereof (or if any ground lease is terminated), to attorn, without any
deductions or set-offs whatsoever, to the lienholder or purchaser or any
successors thereto upon any such foreclosure sale or deed in lieu thereof (or to
the ground lessor), if so requested to do so by such purchaser or lienholder or
ground lessor, and to recognize such purchaser or lienholder or ground lessor as
the lessor under this Lease, provided such lienholder or purchaser or ground
lessor shall agree to accept this Lease and not disturb Tenant's occupancy, so
long as Tenant timely pays the rent and observes and performs the terms,
covenants and conditions of this Lease to be observed and performed by Tenant.
Landlord's interest herein may be assigned as security at any time to any
lienholder. Tenant shall, within ten (10) business days of request 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, ground leases or underlying leases, provided
such lienholder or purchaser or ground lessor shall agree to accept this Lease
and not disturb Tenant’s occupancy, so long as Tenant timely pays the rent and
observes and performs the terms, covenants and conditions of this Lease to be
observed and performed by Tenant. 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.

 
 
 

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SECTION 19    

DEFAULTS; REMEDIES
19.1    Events of Default. 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 any Rent or any other charge required to
be paid under this Lease, or any part thereof, when due unless such failure is
cured within five (5) business days after the date due; or
19.1.2    Except where a specific time period is otherwise set forth for
Tenant's performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this
Section 19.1.2, 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 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 such default; or
19.1.3    Abandonment (as defined by Applicable Laws, specifically including
California Civil Code Section 1951.3) of the Premises by Tenant; or
19.1.4    The failure by Tenant to observe or perform according to the
provisions of Articles 5, 14, 17 or 18 of this Lease where such failure
continues for more than two (2) business days after notice from Landlord.
The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law.
19.2    Remedies Upon Default. Upon the occurrence of any event of default by
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), 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:
19.2.1.1    The worth at the time of award of any unpaid rent which has been
earned at the time of such termination; plus
19.2.1.2    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
19.2.1.3    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
19.2.1.4    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; and

 
 
 

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19.2.1.5    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
19.2.1(ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Article 25 of this Lease, but in no
case greater than the maximum amount of such interest permitted by law. 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 shall at all times have the rights and remedies (which shall
be cumulative with each other and cumulative and in addition to those rights and
remedies available under Sections 19.2.1 and 19.2.2, above, or any law or other
provision of this Lease), without prior demand or notice except as required by
applicable law, to seek any declaratory, injunctive or other equitable relief,
and specifically enforce this Lease, or restrain or enjoin a violation or breach
of any provision hereof.
19.3    Subleases of Tenant. Whether or not 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.
In the event of Landlord's election 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.
19.4    Efforts to Relet. No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord's interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant's
obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.
SECTION 20    

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.
SECTION 21    

SECURITY DEPOSIT
Concurrently with Tenant’s execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the “Security Deposit”) in the amount set forth in
Section 8 of the Summary, as security for the faithful performance by

 
 
 

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Tenant of all of its obligations under this Lease. If Tenant defaults with
respect to any provisions of this Lease, including, but not limited to, the
provisions relating to the payment of Rent, the removal of property and the
repair of resultant damage, beyond the applicable cure period, Landlord may,
without notice to Tenant, but shall not be required to apply all or any part of
the Security Deposit for the payment of any Rent or any other sum in default and
Tenant shall, upon demand therefor, restore the Security Deposit to its original
amount. Any unapplied portion of the Security Deposit shall be returned to
Tenant, or, at Landlord’s option, to the last assignee of Tenant’s interest
hereunder, within forty-five (45) days following the expiration of the Lease
Term. Tenant shall not be entitled to any interest on the Security Deposit.
Tenant hereby irrevocably waives and relinquishes any and all rights, benefits,
or protections, if any, Tenant now has, or in the future may have, under Section
1950.7 of the California Civil Code, any successor statue, and all other
provisions of law, now or hereafter in effect, including, but not limited to,
any provision of law which (i) establishes the time frame by which a landlord
must refund a security deposit under a lease, or (ii) provides that a landlord
may claim from a security deposit only those sums reasonably necessary to remedy
defaults in the payment of rent, to repair damage caused by a tenant, or to
clean the subject premises. Tenant acknowledges and agrees that (A) any
statutory time frames for the return of a security deposit are superseded by the
express period identified in this Article 21, above, and (B) rather than be so
limited, Landlord may claim from the Security Deposit (i) any and all sums
expressly identified in this Article 21, above, and (ii) any additional sums
reasonably necessary to compensate Landlord for any and all losses or damages
caused by Tenant's default of this Lease, including, but not limited to, all
damages or rent due upon termination of this Lease pursuant to Section 1951.2 of
the California Civil Code.
SECTION 22    

INTENTIONALLY OMITTED
SECTION 23    

SIGNS
23.1    Prohibited Signage and Other Items. Any signs, notices, logos, pictures,
names or advertisements which are installed and that have not been separately
approved by Landlord may be removed without notice by Landlord at the sole
expense of Tenant. Any signs, window coverings, or blinds (even if the same are
located behind the Landlord-approved window coverings for the Building), or
other items visible from the exterior of the Premises or Building, shall be
subject to the prior approval of Landlord, in its sole discretion.
23.2    Exterior Signage. Tenant, at Tenant's sole cost and expense, may install
Building standard Premises identification signage at the entrance to the
Premises. All of such signs (collectively, the "Tenant's Signage") shall be
subject to the prior approval of Landlord (which shall not be unreasonably
withheld) and shall comply with all Applicable Laws.
23.3    Maintenance and Removal of Tenant Signage. Tenant shall keep the
Tenant's Signage in first-class condition and repair at all times during the
Lease Term. Upon the expiration or earlier termination of this Lease or Tenant's
right to exercise the Tenant's Signage right, Tenant shall, at Tenant's sole
cost and expense, cause Tenant's Signage to be removed and shall cause the areas
in which such Tenant's Signage was located to be restored to the condition
existing immediately prior to the placement of such Tenant's Signage. If Tenant
fails to timely remove such Tenant's Signage or to restore the areas in which
such Tenant's Signage was located, as provided in the immediately preceding
sentence, then Landlord may perform such work, and all costs incurred by
Landlord in so performing (including a percentage of the cost thereof sufficient
to reimburse Landlord for all overhead, general conditions, fees and other costs
or expenses arising from Landlord's involvement with such repairs and/or
maintenance) shall be reimbursed by Tenant to Landlord within thirty (30) days
after Tenant's receipt of an invoice therefor together with reasonable
supporting evidence. The terms of this Section 23.7 shall survive the expiration
or earlier termination of this Lease.

 
 
 

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SECTION 24    

COMPLIANCE WITH LAW
Tenant shall not do anything or suffer anything to be done in or about the
Premises or the Project 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 (the "Applicable Laws"). At its
sole cost and expense, Tenant shall promptly comply with all such Applicable
Laws which relate to (i) Tenant's use of the Premises, (ii) the Alterations or
the Improvements in the Premises, or (iii) the Base Building, but, as to the
Base Building, only to the extent such obligations are triggered by Tenant's
Alterations, the Improvements, or use of the Premises for non-general office
use. Should any standard or regulation now or hereafter be imposed on Landlord
or Tenant by a state, federal or local governmental body charged with the
establishment, regulation and enforcement of occupational, health or safety
standards for employers, employees, landlords or tenants, then Tenant agrees, at
its sole cost and expense, to comply promptly with such standards or regulations
(provided that under no circumstances shall Tenant have any responsibility for
any hazardous materials present in the Premises as of the Lease Commencement
Date or which may later migrate thereto though air, water or soil, through no
fault of Tenant). 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 Building, provided that compliance
with such Applicable Laws is not the responsibility of Tenant under this Lease,
and provided further that Landlord's failure to comply therewith would prohibit
Tenant from obtaining or maintaining a certificate of occupancy for the
Premises, or would unreasonably and materially affect the safety of Tenant's
employees or create a significant health hazard for Tenant's employees. Landlord
shall be permitted to include in Operating Expenses any costs or expenses
incurred by Landlord under this Article 24, to the extent not prohibited by the
terms of Article 4 of this Lease.
For purposes of Section 1938 of the California Civil Code, Landlord hereby
discloses to Tenant, and Tenant hereby acknowledges, that the Project, Building
and Premises have not undergone inspection by a Certified Access Specialist
(CASp).
As required by Section 1938(e) of the California Civil Code, Landlord hereby
states as follows:  "A Certified Access Specialist (CASp) can inspect the
subject premises and determine whether the subject premises comply with all of
the applicable construction-related accessibility standards under state law. 
Although state law does not require a CASp inspection of the subject premises,
the commercial property owner or lessor may not prohibit the lessee or tenant
from obtaining a CASp inspection of the subject premises for the occupancy or
potential occupancy of the lessee or tenant, if requested by the lessee or
tenant.  The parties shall mutually agree on the arrangements for the time and
manner of the CASp inspection, the payment of the fee for the CASp inspection,
and the cost of making any repairs necessary to correct violations of
construction-related accessibility standards within the premises."  In
furtherance of the foregoing, Landlord and Tenant hereby agree as follows: 
(a) any CASp inspection requested by Tenant shall be conducted, at Tenant's sole
cost and expense, by a CASp approved in advance by Landlord; and (b) pursuant to
this Article 24 above, Tenant, at its cost, is responsible for making any
repairs within the Premises to correct violations of construction-related
accessibility standards, in accordance with the terms of Article 8 above.
SECTION 25    

LATE CHARGES
If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) business days after
Tenant's receipt of written notice from Landlord that said amount is due, then
Tenant shall pay to Landlord a late charge equal to five percent (5%) of the
overdue amount plus any reasonable 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 or
at law 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 within ten
(10) days after the date they are due shall bear interest from the date when due
until paid

 
 
 

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at a rate per annum equal to the lesser of (i) the annual "Bank Prime Loan" rate
cited in the Federal Reserve Statistical Release Publication H.15, published on
the first Tuesday of each calendar month (or such other comparable index as
Landlord and Tenant shall reasonably agree upon if such rate ceases to be
published) plus two (2) percentage points, and (ii) the highest rate permitted
by applicable law.
SECTION 26    

LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
26.1    Landlord's Cure. 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, except to the extent, if any,
otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.
26.2    Tenant's Reimbursement. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord
to Tenant of statements therefor: (i) sums equal to expenditures reasonably made
and obligations incurred by Landlord in connection with the remedying by
Landlord of Tenant's defaults pursuant to the provisions of Section 26.1; (ii)
sums equal to all losses, costs, liabilities, damages and expenses referred to
in Article 10 of this Lease; and (iii) 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 reasonable legal fees and
other amounts so expended. Tenant's obligations under this Section 26.2 shall
survive the expiration or sooner termination of the Lease Term.
SECTION 27    

ENTRY BY LANDLORD
Landlord reserves the right at all reasonable times and upon reasonable notice
to Tenant of not less than twenty-four (24) hours (except in the case of an
emergency) to enter the Premises to (i) inspect them; (ii) show the Premises to
prospective purchasers, or to current or prospective mortgagees, ground or
underlying lessors or insurers or, during the last twelve (12) months of the
Lease Term, to prospective tenants; (iii) post notices of nonresponsibility; or
(iv) alter, improve or repair the Premises or the Building, or for structural
alterations, repairs or improvements to the Building or the Building's systems
and equipment. Notwithstanding anything to the contrary contained in this
Article 27, Landlord may enter the Premises at any time to (A) perform services
required of Landlord, including janitorial service; (B) take possession due to
any breach of this Lease in the manner provided herein; and (C) perform any
covenants of Tenant which Tenant fails to perform. Landlord may make any such
entries without the abatement of Rent, except as otherwise provided in this
Lease, and may 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
thereby. 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 use any means that Landlord may deem
proper to open the doors in and to the Premises. Any entry into the Premises by
Landlord 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. No provision
of this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed to be performed
by Landlord herein.

 
 
 

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SECTION 28    

TENANT PARKING
Tenant shall have the right to use, without charge, commencing on the Lease
Commencement Date, the Project parking facility, for up to the number of cars
set forth in Section 9 of the Summary. The location of the twenty (20) reserved
parking spaces, if any, shall be reasonably designated by Landlord, and such
spaces shall be plainly marked as reserved for Tenant's use, but Landlord shall
not be required to otherwise enforce such reserved use. Tenant shall be
responsible for the full amount of any taxes imposed by any governmental
authority in connection with the use of the parking facility by Tenant. Tenant
shall abide by all rules and regulations which are prescribed from time to time
for the orderly operation and use of the parking facility where the parking
passes are located (including any sticker or other identification system
established by Landlord and the prohibition of vehicle repair and maintenance
activities in the Project's parking facilities). Tenant shall cooperate in
seeing that Tenant's employees and visitors also comply with such rules and
regulations. Tenant's use of the Project parking facility shall be at Tenant's
sole risk and Tenant acknowledges and agrees that Landlord shall have no
liability whatsoever for damage to the vehicles of Tenant, its employees and/or
visitors, or for other personal injury or property damage or theft relating to
or connected with the parking rights granted herein or any of Tenant's, its
employees' and/or visitors' use of the parking facilities. Landlord specifically
reserves the right to change the size, configuration, design, layout and all
other aspects of the Project parking facility at any time and Tenant
acknowledges and agrees that Landlord may, without incurring any liability to
Tenant and without any abatement of Rent under this Lease, from time to time,
close-off or restrict access to the Project parking facility for purposes of
permitting or facilitating any such construction, alteration or improvements,
provided that in no event shall Tenant’s number of spaces be permanently reduced
or moved to a location substantially less convenient that the initial location.
Landlord may delegate its responsibilities hereunder to a parking operator in
which case such parking operator shall have all the rights of control attributed
hereby to the Landlord. The right to use the Project parking facility pursuant
to this Article 28 is provided to Tenant solely for use by Tenant's own
personnel and guests in connection with this Lease and may not be transferred,
assigned, subleased or otherwise alienated by Tenant without Landlord's prior
approval.
SECTION 29    

MISCELLANEOUS PROVISIONS
29.1    Terms; Captions. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. 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.
29.2    Binding Effect. Subject to all other provisions of this Lease, each of
the covenants, conditions and 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 heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.
29.3    No Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.
29.4    Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way materially and adversely change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) business days
following a request therefor. At

 
 
 

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the request of Landlord or any mortgagee or ground lessor, Tenant agrees to
execute a short form of Lease and deliver the same to Landlord within ten (10)
business days following the request therefor.
29.5    Transfer of Landlord's Interest. Tenant acknowledges that Landlord has
the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability accruing
under this Lease after the date of such transfer and Tenant agrees to look
solely to such transferee for the performance of Landlord's obligations accruing
hereunder after the date of transfer and such transferee shall be deemed to have
fully assumed and be liable for all such obligations of this Lease to be
performed by Landlord, including the return of any Security Deposit, and Tenant
shall attorn to such transferee.
29.6    Prohibition Against Recording. Except as provided in Section 29.4 of
this Lease, 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.
29.7    Landlord's Title. 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.
29.8    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.
29.9    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.
29.10    Time of Essence. Time is of the essence with respect to the performance
of every provision of this Lease in which time of performance is a factor.
29.11    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.
29.12    No Warranty. In executing and delivering this Lease, Tenant has not
relied on any representations, including, but not limited to, any representation
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, 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.
29.13    Landlord Exculpation. The liability of Landlord or the Landlord Parties
to Tenant for any default by Landlord under this Lease or arising in connection
herewith or with Landlord's operation, management, leasing, repair, renovation,
alteration or any other matter relating to the Project or the Premises shall be
limited solely and exclusively to an amount which is equal to the lesser of (a)
the interest of Landlord in the Building or (b) the equity interest Landlord
would have in the Building if the Building were encumbered by third-party debt
in an amount equal to eighty percent (80%) of the value of the Building (as such
value is determined by Landlord), provided that in no event shall such liability
extend to any sales or insurance proceeds received by Landlord or the Landlord
Parties in connection with the Project, Building or Premises. Neither Landlord,
nor any of the Landlord Parties shall have any personal liability therefor, and
Tenant hereby expressly waives and releases such personal liability on behalf of
itself and all persons claiming by, through or under Tenant. The limitations of
liability contained in this Section 29.13 shall inure to the benefit of
Landlord's and the Landlord Parties' present and future partners, beneficiaries,
officers, directors, trustees, shareholders, agents and employees, and their
respective partners, heirs, successors and assigns. Under no circumstances shall
any present or future partner of Landlord (if Landlord is a partnership), or
trustee or beneficiary

 
 
 

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(if Landlord or any partner of Landlord is a trust), have any liability for the
performance of Landlord's obligations under this Lease. Notwithstanding any
contrary provision herein, neither Landlord nor the Landlord Parties shall be
liable under any circumstances for injury or damage to, or interference with,
Tenant's business, including but not limited to, loss of profits, loss of rents
or other revenues, loss of business opportunity, loss of goodwill or loss of
use, in each case, however occurring.
29.14    Entire Agreement. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease and this Lease
constitutes the parties' entire agreement with respect to the leasing of the
Premises and 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. 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.
29.15    Right to Lease. Landlord reserves the absolute right to effect such
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
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 or Project.
29.16    Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, acts of war, terrorist acts, inability to
obtain services, labor, or materials or reasonable substitutes therefor,
governmental actions, civil commotions, fire or other casualty, and other causes
beyond the reasonable control of the party obligated to perform, except with
respect to the obligations imposed with regard to Rent and other charges to be
paid by Tenant pursuant to this Lease (collectively, a "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.
29.17    Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and
for all those claiming under Tenant, any and all rights 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.
29.18    Notices. All notices, demands, statements, designations, approvals or
other communications (collectively, "Notices") given or required to be given by
either party to the other hereunder or by law shall be in writing, shall be (A)
sent by United States certified or registered mail, postage prepaid, return
receipt requested ("Mail"), (B) delivered by a nationally recognized overnight
courier, or (C) delivered personally. Any Notice shall be sent, transmitted, or
delivered, as the case may be, to Tenant at the appropriate address set forth in
Section 10 of the Summary, or to such other place as Tenant may from time to
time designate in a Notice to Landlord, or to Landlord at the addresses set
forth below, or to such other places as Landlord may from time to time designate
in a Notice to Tenant. Any Notice will be deemed given (i) three (3) days after
the date it is posted if sent by Mail, (ii) the date the overnight courier
delivery is made, or (iii) the date personal delivery is made. As of the date of
this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as
the case may be, to the following addresses:
SFII CREEKSIDE, LLC
c/o Swift Realty Partners
260 California Street, Suite 1100
San Francisco, California 94111
Attention: Nicco Cipolla
with a copy to:
Allen Matkins Leck Gamble Mallory & Natsis LLP
1901 Avenue of the Stars, Suite 1800
Los Angeles, California 90067
Attention: Anton N. Natsis, Esq.

 
 
 

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29.19    Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several. In the event
that the Tenant is a married individual, the terms, covenants and conditions of
this Lease shall be binding upon the marital community of which the Tenant is a
member.
29.20    Authority. If Tenant is a corporation, trust or partnership, Tenant
hereby represents and warrants that Tenant is a duly formed and existing entity
qualified to do business in the State of California 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. In such event, Tenant shall,
within ten (10) days after execution of this Lease, deliver to Landlord
satisfactory evidence of such authority and, if a corporation, upon demand by
Landlord, also deliver to Landlord satisfactory evidence of (i) good standing in
Tenant's state of incorporation and (ii) qualification to do business in the
State of California.
29.21    Attorneys' Fees. In the event that either Landlord or Tenant should
bring suit for the possession of the Premises, for the recovery of any sum due
under this Lease, or because of the breach of any provision of this Lease or for
any other relief against the other, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.
29.22    Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed
and enforced in accordance with the laws of the State of California. IN ANY
ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I)
THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II)
SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) TO THE
EXTENT PERMITTED BY APPLICABLE LAW, IN THE INTEREST OF SAVING TIME AND EXPENSE,
TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM
FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE EVENT
LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT
OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR
DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING
OR ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.
29.23    Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of, option for or option
to lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
29.24    Brokers. Landlord and Tenant hereby warrant to each other that they
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the "Brokers"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, 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 any dealings with any
real estate broker or agent, other than the Brokers, occurring by, through, or
under the indemnifying party. The terms of this Section 29.24 shall survive the
expiration or earlier termination of the Lease Term.
29.25    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.

 
 
 

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29.26    Project or Building Name, Address and Signage. Landlord shall have the
right at any time to change the name and/or address of the Project or Building
and to install, affix and maintain any and all signs on the exterior and on the
interior of the Project or Building as Landlord may, in Landlord's sole
discretion, desire. Tenant shall not use the name of the Project or Building or
use pictures or illustrations of the Project or Building in advertising or other
publicity or for any purpose other than as the address of the business to be
conducted by Tenant in the Premises, without the prior written consent of
Landlord.
29.27    Counterparts. This Lease may be executed in counterparts with the same
effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.
29.28    Confidentiality. Tenant acknowledges that the content of this Lease and
any related documents are confidential information. Tenant shall 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.
29.29    Building Renovations. It is specifically understood and agreed that
Landlord has no obligation and has made no promises to alter, remodel, improve,
renovate, repair or decorate the Premises, Building, or any part thereof and
that no representations respecting the condition of the Premises or the Building
have been made by Landlord to Tenant except as specifically set forth herein or
in the Work Letter. However, Tenant hereby acknowledges that Landlord is
currently renovating or may during the Lease Term renovate, improve, alter, or
modify (collectively, the "Renovations") the Project and/or the Building. Tenant
hereby agrees that such Renovations shall in no way constitute a constructive
eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall
have no responsibility and shall not be liable to Tenant for any injury to or
interference with Tenant's business arising from the Renovations, nor shall
Tenant be entitled to any compensation or damages from Landlord for loss of the
use of the whole or any part of the Premises or of Tenant's personal property or
improvements resulting from the Renovations, or for any inconvenience or
annoyance occasioned by such Renovations. Landlord shall utilize commercially
reasonable efforts to perform such Renovations in a manner designed to minimize
any material interference with Tenant's use of the Premises.
29.30    No Violation. Tenant hereby warrants and represents that neither its
execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs, arising from Tenant's breach of this warranty and representation.
29.31    Communications and Computer Lines. Tenant may install, maintain,
replace, remove or use any communications or computer wires and cables serving
the Premises (collectively, the "Lines"), provided that (i) Tenant shall obtain
Landlord's prior written consent, use an experienced and qualified contractor
approved in writing by Landlord, and comply with all of the other provisions of
Articles 7 and 8 of this Lease, (ii) an acceptable number of spare Lines and
space for additional Lines shall be maintained for existing and future occupants
of the Project, as determined in Landlord's reasonable opinion, (iii) the Lines
therefor (including riser cables) shall be appropriately insulated to prevent
excessive electromagnetic fields or radiation, shall be surrounded by a
protective conduit reasonably acceptable to Landlord, and shall be identified in
accordance with the "Identification Requirements," as that term is set forth
hereinbelow, (iv) any new or existing Lines servicing the Premises shall comply
with all applicable governmental laws and regulations, (v) as a condition to
permitting the installation of new Lines, Landlord may require that Tenant
remove existing Lines located in or serving the Premises and repair any damage
in connection with such removal, and (vi) Tenant shall pay all costs in
connection therewith. All Lines shall be clearly marked with adhesive plastic
labels (or plastic tags attached to such Lines with wire) to show Tenant's name,
suite number, telephone number and the name of the person to contact in the case
of an emergency (A) every four feet (4') outside the Premises (specifically
including, but not limited to, the electrical room risers and other Common
Areas), and (B) at the Lines' termination point(s) (collectively, the
"Identification Requirements"). Prior to the expiration or earlier termination
of this Lease, Tenant shall, at Tenant's sole cost and expense, remove any Lines
located in or serving the Premises which were installed by or on behalf of
Tenant.

 
 
 

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29.32    Development of the Project.
29.32.1    Subdivision. Landlord reserves the right to further subdivide all or
a portion of the Project. Tenant agrees to execute and deliver, upon demand by
Landlord and in the form requested by Landlord, any additional documents needed
to conform this Lease to the circumstances resulting from such subdivision.
29.32.2    The Other Improvements. If portions of the Project or property
adjacent to the Project (collectively, the "Other Improvements") are owned by an
entity other than Landlord, Landlord, at its option, may enter into an agreement
with the owner or owners of any or all of the Other Improvements to provide
(i) for reciprocal rights of access and/or use of the Project and the Other
Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other
Improvements, provided that Tenant's rights and obligations under this Lease are
not materially affected, (iii) for the allocation of a portion of the Direct
Expenses to the Other Improvements and the operating expenses and taxes for the
Other Improvements to the Project, and (iv) for the use or improvement of the
Other Improvements and/or the Project in connection with the improvement,
construction, and/or excavation of the Other Improvements and/or the Project.
Nothing contained herein shall be deemed or construed to limit or otherwise
affect Landlord's right to convey all or any portion of the Project or any other
of Landlord's rights described in this Lease.
29.32.3    Construction of Project and Other Improvements. Tenant acknowledges
that portions of the Project and/or the Other Improvements may be subject to
demolition or construction following Tenant's occupancy of the Premises, and
that such construction may result in levels of noise, dust, obstruction of
access, etc. which are in excess of that present in a fully constructed project.
Tenant hereby waives any and all rent offsets or claims of constructive eviction
which may arise in connection with such demolition or construction.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed
the day and date first above written.
LANDLORD:

SFII CREEKSIDE, LLC,
a Delaware limited liability company

By: Swift Real Estate Partners Fund II REIT II,  
LLC,  
a Delaware limited liability company,  
its manager

By: Swift Real Estate Partners Fund II, L.P., 
a Delaware limited partnership, 
its manager
By: Swift Fund II GP, LLC, 
a Delaware limited liability company, 
its general partner

By:      ___________________________
Name:  ___________________________
Its:       ___________________________

TENANT:

ZELTIQ AESTHETICS, INC.,
a Delaware corporation
By:     

Its:    
By:     

Its:    

 
 
 

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EXHIBIT A
CREEKSIDE BUSINESS PARK
OUTLINE OF PREMISES

 
 
 

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EXHIBIT B
CREEKSIDE BUSINESS PARK
TENANT WORK LETTER
This Tenant Work Letter shall set forth the terms and conditions relating to the
construction of the tenant improvements in the Premises. This Tenant Work Letter
is essentially organized chronologically and addresses the issues of the
construction of the Premises, in sequence, as such issues will arise during the
actual construction of the Premises. All references in this Tenant Work Letter
to Articles or Sections of "this Lease" shall mean the relevant portion of
Articles 1 through 21 of the Office Lease to which this Tenant Work Letter is
attached as Exhibit B and of which this Tenant Work Letter forms a part, and all
references in this Tenant Work Letter to Sections of "this Tenant Work Letter"
shall mean the relevant portion of Sections 1 through 5 of this Tenant Work
Letter.
SECTION 1

LANDLORD WORK, TENANT IMPROVEMENTS
Landlord shall cause the following items to be completed at the Building and
Premises (the "Landlord Work"):
•
Perform required demolition of the existing improvements in the Premises.

•
Install perimeter insulation.

•
Install roof insulation.

•
Cause the Building to be in compliance with applicable laws, including ADA (and
including the addition of the ADA required trash enclosure), to the extent
required to allow the legal occupancy of the Premises (subject to the completion
of the Tenant Improvements in compliance with applicable laws).

•
Complete the required 5-year fire / life-safety certifications.

•
Remove the existing back-up generator.

Landlord shall bear the cost of the Landlord Work up to a maximum of $10.00 per
RSF of the Premises (the "Landlord Work Allowance"). To the total cost of the
Landlord Work is in excess of the Landlord Work Allowance, such excess shall be
deducted from the Tenant Improvement Allowance, and the Tenant Improvement
Allowance shall be accordingly reduced. During and after the construction of the
Landlord Work, Landlord shall, at Landlord's sole cost and expense, construct
the improvements in the Premises (the "Tenant Improvements") pursuant to final
construction drawings and specifications prepared by Landlord's architect and
subject to Tenant's prior approval (collectively, the "Working Drawings"). The
Working Drawings shall be consistent with the floor plan attached as Schedule 1
to this Tenant Work Letter (the "Approved Floor Plan"). Tenant shall not
unreasonably withhold its consent to the Working Drawings, and shall respond to
any request for approval of any aspect of the Working Drawings within three (3)
business days after the date such request is made. Tenant shall not disapprove
any aspect of the Working Drawings to the extent the same is materially
consistent with the Approved Floor Plan. The Working Drawings, as approved by
Tenant, are referred to herein as the "Approved Working Drawings". Tenant shall
make no changes or modifications to the Approved Working Drawings without the
prior written consent of Landlord, which consent may be withheld in Landlord's
sole discretion if such change or modification would directly or indirectly
delay the "Substantial Completion," as that term is defined in Section 4.1 of
this Tenant Work Letter, of the Premises or increase the cost of designing or
constructing the Tenant Improvements.

 
 
 

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SECTION 2

OVER-ALLOWANCE AMOUNT
Notwithstanding the foregoing, Tenant shall be responsible for any costs of
design, permitting, construction, and oversight of the Tenant Improvements (the
"Tenant Improvement Costs") to the extent such Tenant Improvement Costs exceed
$50.00 per RSF of the Premises (the "Tenant Improvement Allowance") (any such
excess, the "Over Allowance Amount"). Tenant shall pay any such Over Allowance
Amount to Landlord within ten (10) days after invoice. In the event that after
Tenant's execution of this Lease, any revisions, changes, or substitutions shall
be made to the Approved Working Drawings or the Tenant Improvements, any
additional costs which arise in connection with such revisions, changes or
substitutions shall be paid by Tenant to Landlord immediately upon Landlord's
request as an addition to the Over-Allowance Amount. Notwithstanding anything
set forth in this Tenant Work Letter to the contrary, construction of the Tenant
Improvements shall not commence until Tenant has delivered to Landlord the
Over-Allowance Amount.
SECTION 3

CONTRACTOR'S WARRANTIES AND GUARANTIES
Landlord hereby assigns to Tenant all warranties and guaranties by the
contractor who constructs the Tenant Improvements (the "Contractor") relating to
the Tenant Improvements, and, subject to the terms of Section 1.1.1 of the
Lease, Tenant hereby waives all claims against Landlord relating to, or arising
out of the construction of, the Tenant Improvements.
SECTION 4

COMPLETION OF THE TENANT IMPROVEMENTS;
LEASE COMMENCEMENT DATE
4.1    Ready for Occupancy. The Premises shall be deemed "Ready for Occupancy"
upon the Substantial Completion of the Premises. For purposes of this Lease,
"Substantial Completion" of the Premises shall occur upon the completion of
construction of the Tenant Improvements in the Premises pursuant to the Approved
Working Drawings, with the exception of any punch list items and any tenant
fixtures, work-stations, built-in furniture, or equipment to be installed by
Tenant or under the supervision of Contractor.
4.2    Delay of the Substantial Completion of the Premises. Except as provided
in this Section 4.2, the Lease Commencement Date shall occur as set forth in the
Lease and Section 4.1, above. If there shall be a delay or there are delays in
the Substantial Completion of the Premises or in the occurrence of any of the
other conditions precedent to the Lease Commencement Date, as set forth in of
the Lease, as a direct, indirect, partial, or total result of:
4.2.1    Tenant's failure to timely approve any matter requiring Tenant's
approval;
4.2.2    A breach by Tenant of the terms of this Tenant Work Letter or the
Lease;
4.2.3    Tenant's request for changes in the Approved Working Drawings;
4.2.4    Changes in any of the Approved Working Drawings because the same do not
comply with applicable laws;
4.2.5    Tenant's requirement for materials, components, finishes or
improvements which are not available in a commercially reasonable time given the
anticipated date of Substantial Completion of the Premises, as set forth in the
Lease, or which are different from, or not included in, Landlord's standard
improvement package items for the Building;

 
 
 

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4.2.6    Changes to the base, shell and core work of the Building required by
the Approved Working Drawings;
4.2.7    Tenant's failure to deliver to Landlord the Over-Allowance Amount on
the date set forth in Section 2 of the Tenant Work Letter;
4.2.8    Tenant's actions in connection with any early entry as provided in
Section 5.1, below; and
4.2.8    Any other acts or omissions of Tenant, or its agents, or employees;
then, notwithstanding anything to the contrary set forth in the Lease or this
Tenant Work Letter and regardless of the actual date of the Substantial
Completion of the Premises, the date of Substantial Completion of the Premises
shall be deemed to be the date the Substantial Completion of the Premises would
have occurred if no delays, as set forth above (any such delay, a "Tenant
Delay"), had occurred.
SECTION 5

MISCELLANEOUS
5.1    Tenant's Entry Into the Premises Prior to Substantial Completion.
Provided that Tenant and its agents do not interfere with Contractor's work in
the Building and the Premises, Contractor shall allow Tenant access to the
Premises commencing thirty (30) days prior to the Substantial Completion of the
Premises for the purpose of Tenant installing overstandard equipment or fixtures
(including Tenant's data and telephone equipment) in the Premises. Prior to
Tenant's entry into the Premises as permitted by the terms of this Section 5.1,
Tenant shall submit a schedule to Landlord and Contractor, for their approval,
which schedule shall detail the timing and purpose of Tenant's entry. Tenant
shall hold Landlord harmless from and indemnify, protect and defend Landlord
against any loss or damage to the Building or Premises and against injury to any
persons caused by Tenant's actions pursuant to this Section 5.1.
5.2    Freight Elevators. Landlord shall, consistent with its obligations to
other tenants of the Building, make the freight elevator reasonably available to
Tenant in connection with initial decorating, furnishing and moving into the
Premises.
5.3    Tenant's Representative. Tenant has designated _______________ as its
sole representative with respect to the matters set forth in this Tenant Work
Letter, who, until further notice to Landlord, shall have full authority and
responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.
5.4    Landlord's Representative. Landlord has designated Rod Collins as its
sole representative with respect to the matters set forth in this Tenant Work
Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
5.5    Tenant's Agents. All contractors, subcontractors, laborers, materialmen,
and suppliers shall be union labor in compliance with the then existing master
labor agreements.
5.6    Time of the Essence in This Tenant Work Letter. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. 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 such
period the item shall automatically be deemed approved or delivered by Tenant
and the next succeeding time period shall commence.
5.7    Tenant's Lease Default. Notwithstanding any provision to the contrary
contained in this Lease, if an event of default as described in the Lease, or a
default by Tenant under this Tenant Work Letter, has occurred at any time on or
before the Substantial Completion of the Premises, then (i) in addition to all
other rights and remedies granted to Landlord pursuant to the Lease, Landlord
shall have the right to cause Contractor to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the
Substantial Completion of the Premises caused

 
 
 

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by such work stoppage as set forth in Section 4 of this Tenant Work Letter), and
(ii) all other obligations of Landlord under the terms of this Tenant Work
Letter shall be forgiven until such time as such default is cured pursuant to
the terms of the Lease.

 
 
 

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SCHEDULE 1 TO EXHIBIT B
APPROVED FLOOR PLAN

 
 
 

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EXHIBIT C
CREEKSIDE BUSINESS PARK
NOTICE OF LEASE TERM DATES
To:
_______________________
_______________________
_______________________
_______________________

Re:
Office Lease dated ____________, 20___ between ____________________, a
_____________________ ("Landlord"), and _______________________, a
_______________________ ("Tenant") concerning Suite ______ on floor(s)
__________ of the office building located at __________________, Pleasanton,
California ______.

Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you and/or
confirm as follows:
1.
The Lease Term shall commence on or has commenced on _____________ for a term of
_______________ ending on _______________.

2.
Rent commenced to accrue on ____________, in the amount of ____________.

3.
If the Lease Commencement Date is other than the first day of the month, the
first billing will contain a pro rata adjustment. Each billing thereafter, with
the exception of the final billing, shall be for the full amount of the monthly
installment as provided for in the Lease.

4.
Your rent checks should be made payable to __________ at ______________.

 
"Landlord":
   ,
a    
By:     
      Its:    

Agreed to and Accepted as
of                , 20_  .
"Tenant":
    
a    
By:     
     Its:    
 

 
 
 

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EXHIBIT D
CREEKSIDE BUSINESS PARK
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. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.
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 obtaining Landlord's prior
written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord. Upon the termination of this
Lease, Tenant shall restore to Landlord all keys of stores, offices, and toilet
rooms, either furnished to, or otherwise procured by, Tenant and in the event of
the loss of keys so furnished, Tenant shall pay to Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.
2.    All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.
3.    Landlord reserves the right to close and keep locked all entrance and exit
doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. 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. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord will furnish passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom Tenant requests passes and shall be liable to Landlord for all
acts of such persons. The Landlord and his agents shall in no case be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right to prevent access to the Building
or the Project during the continuance thereof by any means it deems appropriate
for the safety and protection of life and property.
4.    No furniture, freight or equipment of any kind shall be brought into the
Building without prior notice to Landlord. All moving activity into or out of
the Building shall be scheduled with Landlord and done only at such time and in
such manner as Landlord designates. Landlord shall have the right to prescribe
the weight, size and position of all safes and other heavy property brought into
the Building and also the times and manner of moving the same in and out of 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. Any damage 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 and expense of Tenant.
5.    No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours, in such specific elevator and by such personnel as shall be
designated by Landlord.
6.    The requirements of Tenant will be attended to only upon application at
the management office for 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.

 
 
 

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7.    No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by Tenant on any part of the Premises or the
Building without the prior written consent of the Landlord. Tenant shall not
disturb, solicit, peddle, or canvass any occupant of the Project and shall
cooperate with Landlord and its agents of Landlord to prevent same.
8.    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 servants, employees, agents, visitors or
licensees shall have caused same.
9.    Tenant shall not overload the floor of the Premises, nor mark, drive nails
or screws, or drill into the partitions, woodwork or drywall or in any way
deface the Premises or any part thereof without Landlord's prior written
consent. Tenant shall not purchase spring water, ice, towel, linen, maintenance
or other like services from any person or persons not approved by Landlord.
10.    Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
11.    Tenant shall not use or keep in or on the Premises, the Building, or the
Project any kerosene, gasoline or other inflammable or combustible fluid,
chemical, substance or material.
12.    Tenant shall not without the prior written consent of Landlord use any
method of heating or air conditioning other than that supplied by Landlord.
13.    Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors, or vibrations, or
interfere with other tenants or those having business therein, whether by the
use of any musical instrument, radio, phonograph, or in any other way. Tenant
shall not throw anything out of doors, windows or skylights or down passageways.
14.    Tenant shall not bring into or keep within the Project, the Building or
the Premises any animals, birds, aquariums, or, except in areas designated by
Landlord, bicycles or other vehicles.
15.    No cooking shall be done or permitted 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,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state, county and city laws, codes, ordinances,
rules and regulations.
16.    The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
provided for in the Summary. Tenant shall not occupy or permit any portion of
the Premises to be occupied as an office for a messenger-type operation or
dispatch office, public stenographer or typist, or for the manufacture or sale
of liquor, narcotics, or tobacco in any form, or as a medical office, or as a
barber or manicure shop, or as an employment bureau without the express prior
written consent of Landlord. Tenant shall not engage or pay any employees on the
Premises except those actually working for such tenant on the Premises nor
advertise for laborers giving an address at the Premises.
17.    Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
18.    Tenant, its employees and agents shall not loiter in or on the entrances,
corridors, sidewalks, lobbies, courts, halls, stairways, elevators, vestibules
or any Common Areas for the purpose of smoking tobacco products or

 
 
 

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for any other purpose, nor in any way obstruct such areas, and shall use them
only as a means of ingress and egress for the Premises.
19.    Tenant shall not waste electricity, water or air conditioning and agrees
to cooperate fully with Landlord to ensure the most effective operation of the
Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls.
20.    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 city in which
the Building 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.
21.    Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22.    Any persons employed by Tenant to do janitorial work shall be subject to
the prior written approval of Landlord, and while in the Building and outside of
the Premises, shall be subject to and under the control and direction of the
Building manager (but not as an agent or servant of such manager or of
Landlord), and Tenant shall be responsible for all acts of such persons.
23.    No awnings or other projection shall be attached to the outside walls of
the Building without the prior written consent of Landlord, and no curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises other than Landlord standard drapes.
All electrical ceiling fixtures hung in the Premises or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design
and a warm white bulb color approved in advance in writing by Landlord. Neither
the interior nor exterior of any windows shall be coated or otherwise
sunscreened without the prior written consent of Landlord. Tenant shall abide by
Landlord's regulations concerning the opening and closing of window coverings
which are attached to the windows in the Premises, if any, which have a view of
any interior portion of the Building or Building Common Areas.
24.    The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
25.    Tenant must comply with requests by the Landlord concerning the informing
of their employees of items of importance to the Landlord.
26.    Tenant must comply with the State of California “No‑Smoking” law set
forth in California Labor Code Section 6404.5, and any local “No‑Smoking”
ordinance which may be in effect from time to time and which is not superseded
by such State law.
27.    Tenant hereby acknowledges that Landlord shall have no obligation to
provide guard service or other security measures for the benefit of the
Premises, the Building or the Project. Tenant hereby assumes all responsibility
for the protection of Tenant and its agents, employees, contractors, invitees
and guests, and the property thereof, from acts of third parties, including
keeping doors locked and other means of entry to the Premises closed, whether or
not Landlord, at its option, elects to provide security protection for the
Project or any portion thereof. Tenant further assumes the risk that any safety
and security devices, services and programs which Landlord elects, in its sole
discretion, to provide may not be effective, or may malfunction or be
circumvented by an unauthorized third party, and Tenant shall, in addition to
its other insurance obligations under this Lease, obtain its own insurance
coverage to the extent Tenant desires protection against losses related to such
occurrences. Tenant shall cooperate in any reasonable safety or security program
developed by Landlord or required by law.
28.    All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the Premises in settings approved by Landlord, to absorb or
prevent any vibration, noise and annoyance.

 
 
 

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29.    Tenant shall not use in any space or in the public halls of the Building,
any hand trucks except those equipped with rubber tires and rubber side guards.
30.    No auction, liquidation, fire sale, going-out-of-business or bankruptcy
sale shall be conducted in the Premises without the prior written consent of
Landlord.
31.    No tenant shall use or permit the use of any portion of the Premises for
living quarters, sleeping apartments or lodging rooms.
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, the
Common Areas and the Project, and for the preservation of good order therein, as
well as for the convenience of other occupants and tenants therein. Landlord may
waive any one or more of these Rules and Regulations for the benefit of any
particular tenants, but no such waiver by Landlord shall be construed as a
waiver of such Rules and Regulations in favor of any other tenant, nor prevent
Landlord from thereafter enforcing any such Rules or Regulations against any or
all tenants of the Project. 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.

 
 
 

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EXHIBIT E
CREEKSIDE BUSINESS PARK
FORM OF TENANT'S ESTOPPEL CERTIFICATE
The undersigned as Tenant under that certain Office Lease (the "Lease") made and
entered into as of ___________, 20_   by and between _______________ as
Landlord, and the undersigned as Tenant, for Premises on the ______________
floor(s) of the office building located at _________________, Pleasanton,
California _________, certifies as follows:
1.    Attached hereto as Exhibit A is a true and correct copy of the Lease and
all amendments and modifications thereto. The documents contained in Exhibit A
represent the entire agreement between the parties as to the Premises.
2.    The undersigned currently occupies the Premises described in the Lease,
the Lease Term commenced on __________, and the Lease Term expires on
___________, and the undersigned has no option to terminate or cancel the Lease
or to purchase all or any part of the Premises, the Building and/or the Project.
3.    Base Rent became payable on ____________.
4.    The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
5.    Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:

6.    Tenant shall not modify the documents contained in Exhibit A without the
prior written consent of Landlord's mortgagee.
7.    All monthly installments of Base Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through
___________. The current monthly installment of Base Rent is
$_____________________.
8.    All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default
thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.
9.    No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.
10.    As of the date hereof, there are no existing defenses or offsets, or, to
the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord.
11.    If Tenant is a corporation or partnership, Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in the State of California and that Tenant has full right and authority
to execute and deliver this Estoppel Certificate and that each person signing on
behalf of Tenant is authorized to do so.

 
 
 

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12.    There are no actions pending against the undersigned under the bankruptcy
or similar laws of the United States or any state.
13.    Other than in compliance with all applicable laws and incidental to the
ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
14.    To the undersigned's knowledge, all tenant improvement work to be
performed by Landlord under the Lease has been completed in accordance with the
Lease and has been accepted by the undersigned and all reimbursements and
allowances due to the undersigned under the Lease in connection with any tenant
improvement work have been paid in full.
The undersigned acknowledges that this Estoppel Certificate may be delivered to
Landlord or to a prospective mortgagee or prospective purchaser, and
acknowledges that said prospective mortgagee or prospective purchaser will be
relying upon the statements contained herein in making the loan or acquiring the
property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.
Executed at ______________ on the ____ day of ___________, 20__.
 
"Tenant":
   ,
a    
By:     
      Its:    
By:     
      Its:    

 
 
 

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OFFICE LEASE

CREEKSIDE BUSINESS PARK, PLEASANTON, CALIFORNIA

SFII CREEKSIDE, LLC,
a Delaware limited liability company,
as Landlord,
and
ZELTIQ AESTHETICS, INC.,
a Delaware corporation
as Tenant.

 
 
 

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TABLE OF CONTENTS
Page

SECTION 1
PREMISES, BUILDING, PROJECT, AND COMMON AREAS    4

SECTION 2
LEASE TERM    5

SECTION 3
BASE RENT    5

SECTION 4
ADDITIONAL RENT    5

SECTION 5
USE OF PREMISES    11

SECTION 6
SERVICES AND UTILITIES    11

SECTION 7
REPAIRS    13

SECTION 8
ADDITIONS AND ALTERATIONS    13

SECTION 9
COVENANT AGAINST LIENS    15

SECTION 10
INSURANCE    15

SECTION 11
DAMAGE AND DESTRUCTION    17

SECTION 12
NONWAIVER    18

SECTION 13
CONDEMNATION    18

SECTION 14
ASSIGNMENT AND SUBLETTING    19

SECTION 15
SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES    22

SECTION 16
HOLDING OVER    23

SECTION 17
ESTOPPEL CERTIFICATES    23

SECTION 18
SUBORDINATION    23

SECTION 19
DEFAULTS; REMEDIES    24

SECTION 20
COVENANT OF QUIET ENJOYMENT    26

SECTION 21
SECURITY DEPOSIT    26

SECTION 22
SUBSTITUTION OF OTHER PREMISES    26

SECTION 23
SIGNS    27

SECTION 24
COMPLIANCE WITH LAW    27

SECTION 25
LATE CHARGES    27

 
 
 

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Page

SECTION 26
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT    28

SECTION 27
ENTRY BY LANDLORD    28

SECTION 28
TENANT PARKING    29

SECTION 29
MISCELLANEOUS PROVISIONS    29

EXHIBITS

A    OUTLINE OF PREMISES
A-1    LEGAL DESCRIPTION
B    TENANT WORK LETTER
C    FORM OF NOTICE OF LEASE TERM DATES
D    RULES AND REGULATIONS
E    FORM OF TENANT'S ESTOPPEL CERTIFICATE

763996.07/WLA
376392-00001/1-20-17
ii

CREEKSIDE BUSINESS PARK
[Zeltiq Aesthetics, Inc.]