STANDARD OFFICE LEASE

Between

Geary-Market Investment Company, Ltd.,

a California corporation

("Landlord")

 

 

 

and

 

 

 

 

Looksmart

("Tenant")

 

 

 

STANDARD OFFICE LEASE

 

This Standard Office Lease ("Lease") is made as of July 15, 2013 by and between
Geary-Market Investment Company, Ltd., a California corporation ("Landlord"),
and Looksmart ("Tenant"), who agree as follows:

 

BASIC LEASE INFORMATION

 

The following is the Basic Lease Information of this Lease. Other Sections of
this Lease explain and define the Basic Lease Information in more detail and are
to be read in conjunction herewith.

 

 

1. LANDLORD: Geary-Market Investment Company, Ltd.     49 Geary St., Suite West
Mezzanine     San Francisco, California 94108         TENANT: Looksmart     49
Geary Street, Suite 235     San Francisco, CA  94108       2. PREMISES: (a) 49
Geary Street, Suite 235               San Francisco, CA  94108     (b)
Approximately 2,341 rentable square
feet on the second (2nd) floor.     (c) 126,616 rentable square feet for the
Building.         3. TERM:  Five (5) years         4. COMMENCEMENT DATE:
September 1, 2013         RENT COMMENCEMENT DATE: One (1) months from Lease
Commencement       5. BASIC MONTHLY RENT: Months 1-12:  $7,803.33 per month    
Months 13-24: $7,998.41 per month     Months 25-36: $8,193.50 per month    
Months 37-48: $8,388.58 per month     Months 49-60: $8,583.66 per month

 

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  BASIC ANNUAL RENT: Months 1-12:  $93,640.00 per annual ($40.00 rsf)     Months
13-24:  $95,981.00 per annual ($41.00 rsf)     Months 25-36:  $98,322.00 per
annual ($42.00 rsf)     Months 37-48:  $100,663.00 per annual ($43.00 rsf)    
Months 49-60:  $103,004.00 per annual ($44.00 rsf)       6. TENANT'S PRO RATA
SHARE
ADD'L RENT, TAXES COMMON
AREA MAINTENANCE: Tenant's Percentage Share of Taxes and Operating expenses
relating to the entire building:  1.91%             Tenant's Percentage Share of
Operating expenses relating to Office Tenants only:  2.19%           Base Year:
 Calendar Year 2013       7. SECURITY DEPOSIT: Equal to three  (3) month’s rent:
$ 24,580.50, payable in advance.       8. BROKERS: Cassidy Turley is
representing the Tenant as procuring broker and the Landlord as listing
broker.  Landlord shall pay a procuring brokerage commission equal to one dollar
and fifty cents ($1.50) per rentable square foot per year leased.  Commission
shall be payable half upon full execution of the lease and half upon
occupancy.  Landlord shall pay a listing commission per the agreement.       9.
PERMITTED USES: General Office use.       10. EARLY ACCESS: Tenant shall have
the right to enter the Premises up to two (2) weeks prior to the Lease
Commencement Date for the purposes of installing its Tenant Improvements,
furniture and wiring.  The Term will commence if Tenant begins business
operations from the Premises.

  

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11.       TENANT IMPROVEMENTS: Landlord will be responsible for all path of
travel and ADA compliance to the Premises.             Landlord will deliver the
Premises in its current “as-is” broom-clean condition.  Landlord, at its sole
cost and expense, capped at $25.00 per rentable square foot, will improve the
Premises, per a mutually agreed upon space plan, with the following:           •
  Repaint the Premises with building standard paint, of a mutually agreeable
color.               •   Demolition of two display walls:  The back wall and the
wall immediately adjacent window line wall.               •   Install
kitchenette along rear wall at hook-ups.               •   Install electrical
distribution, of a standard office arrangement, throughout the premises.        
      •   Construction of a glass-walled conference room, of approximate 8’ x
11’ dimensions with fully opening doors.               •   Paint the three (3)
walls denoted with “idea paint”.               •   Install a glass sidelight in
the current office.

 

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ARTICLE 1
PREMISES

 

1.1 Premises

 

Landlord leases to Tenant and Tenant leases from Landlord, upon the provisions
and conditions set forth herein, those certain premises ("Premises") described
on Exhibit A attached hereto, which Premises are located in that certain
building known as 49 Geary Street, San Francisco, California ("Building") and
situated upon that certain real property as more particularly described on
Exhibit A ("Real Property"). The Real Property and the Building and the
underlying land and improvements are referred to collectively herein as the
"Project".

 

1.2 Rentable Square Footage

 

The rentable area of Premises and the Building are agreed to be the numbers of
square feet respectively specified in the Basic Lease Information.

 

1.3 Common Areas

 

"Common Areas" shall mean the lobby and the open space and sidewalk areas on the
Real Property, and any other areas of the Building or Real Property designated
by Landlord from time to time for the common use or benefit of occupants of the
Building, and their employees and invitees, or the public.

 

ARTICLE 2
TERM

 

2.1 Term Commencement Date

 

The term of this Lease ("Term") shall commence on the date (the "Term
Commencement Date") that the Premises are Ready for Delivery (as defined in
Section 2.2 below). Unless sooner terminated, as provided in this Lease, the
Term shall end on the anniversary of the Term Commencement Date (the "Term
Expiration Date"). If Landlord does not tender possession of the Premises to
Tenant on or before the Target Commencement Date for any reason whatsoever,
Landlord shall not be rendered liable for any damage caused thereby and this
Lease shall not be rendered void or voidable thereby, but Tenant shall not be
liable for any Rent (as defined in Section 3.4 below) until the Term
Commencement Date. No failure to tender possession of the Premises on or before
the Target Commencement Date shall (a) in any way affect any other obligation of
Tenant hereunder, or (b) if the delay is a Landlord caused delay, the equal
number of days delayed shall be added to the end of the Term, so tenant will
have the full 5 year Term. Once the Term Commencement Date and Term Expiration
Date have been determined, Landlord may confirm the Term Commencement Date and
Term Expiration Date in writing to Tenant; and unless objected to by Tenant
within three (3) days, such confirmation shall be binding upon Tenant. The Term
shall commence on the Term Commencement Date and end on the Term Expiration Date
whether or not such confirmation is given. This Lease shall be a binding
contractual obligation effective upon execution and delivery hereof by Landlord
and Tenant, notwithstanding the later commencement of the Term.

 

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2.2 Delivery and Acceptance of Premises

 

(a) Tenant shall accept the Premises on the [Commencement Date.] [date when the
Premises are "Ready for Delivery." The Premises shall be deemed Ready for
Delivery on the Substantial Completion Date in accordance with Exhibit D
attached hereto.] The taking of possession or use of the Premises by Tenant
shall conclusively establish that the Premises and the Building were at such
time in good order and satisfactory condition. Tenant agrees to accept
possession of the Premises in their "as is" condition on the [Commencement Date]
[date when the Premises are Ready for Delivery], without representation or
warranty by Landlord, express or implied, and with no obligation of Landlord to
repaint, remodel, repair, improve or alter the Premises, or to perform any
[further] construction, remodeling or other work of improvement upon the
Premises, or contribute to the cost of any of the foregoing. Tenant also
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty regarding the condition of the Premises or the
Building. Tenant shall be deemed to have accepted possession of the Premises
when Tenant first moves any of its personnel, furnishings and/or equipment into
the Premises, except to the extent that Tenant is explicitly authorized in this
Lease to do any of the foregoing without being deemed to have accepted
possession of the Premises.

 

(b) [During the [fourteen (14)] day period prior to the Substantial Completion
Date, Tenant shall be permitted to enter the Premises for the sole purpose of
installing [furniture, fixtures, and cabling].] Tenant agrees that if Tenant
enters into the Premises prior to the Substantial Completion Date for any
reason, such entry shall be pursuant to all of the terms, covenants and
conditions of this Lease, including, without limitation, Tenant's indemnity
obligations contained in Article 12 below and Tenant's insurance obligations
contained in Article 14 below, but excluding the obligation to pay Basic Monthly
Rent.

 

2.3 Option Term

 

None.

 

ARTICLE 3
RENT

 

3.1 Basic Monthly Rent

 

Commencing on the Rent Commencement Date, Tenant shall pay to Landlord, as basic
monthly rental ("Basic Monthly Rent"), the amount specified in Item 5 of the
Basic Lease Information. Unless otherwise expressly provided in this Lease, the
Basic Monthly Rent and all other amounts payable hereunder shall be paid to
Landlord in advance on the Rent Commencement Date and thereafter on or before
the first day of each month during the Term without abatement, deduction or
offset, in lawful money of the United States of America at the office of the
property manager as designated in writing by the Landlord, or to such place as
Landlord may designate in writing, except that a full month's Basic Monthly Rent
shall be paid to Landlord concurrent with Tenant's execution of this Lease,
which payment shall be credited to the first month's Basic Monthly Rent due on
the Rent Commencement Date. If the Rent Commencement Date occurs on other than
the first day of a calendar month, then there shall be deemed paid on the Rent
Commencement Date a pro rata portion of the Basic Monthly Rent based upon the
number of days remaining in such month and the remaining balance of any amount
paid by Tenant upon Lease execution shall be credited towards the Basic Monthly
Rent due in the second calendar month after the Rent Commencement Date. In the
event the Term ends on a day other than the last day of the month, the last
monthly payment of Basic Monthly Rent shall be prorated based upon the number of
days in such month prior to and including the last day of the Term. Provided
that no Event of Default has occurred, then during the September, 2013 calendar
month of the Term (the "Rent Abatement Period"), Tenant shall not be obligated
to pay any Basic Monthly Rent otherwise attributable to the Premises during such
Rent Abatement Period (the "Rent Abatement"). Landlord and Tenant acknowledge
that the aggregate amount of the Rent Abatement equals $7,803.33. 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 performing the terms and conditions otherwise
required under this Lease. If an Event of Default has occurred, or if this Lease
is terminated for any reason other than Landlord’s breach of this Lease, then
the dollar amount of the unapplied portion of the Rent Abatement as of the date
of such Default or termination, as the case may be, shall be converted to a
credit to be applied to the Basic Monthly Rent applicable at the end of the Term
and Tenant shall immediately be obligated to begin paying Basic Monthly Rent for
the Premises in full.

 

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3.2 Interest on Past Due Amounts

 

Any Rent not paid when due shall bear interest from the date due until the date
paid at the rate (the "Interest Rate") equal to the Prime Rate (as hereinafter
defined) as of such due date, plus five percent (5%) per annum; provided,
however, that Tenant's total liability for interest payments under this Lease
shall not exceed the limits, if any, imposed on such payments by the usury laws
of the State of California. The payment of such interest shall not excuse or
cure any Default or modify any obligation of Tenant under this Lease. The "Prime
Rate" shall mean the prime rate (or base rate) reported in the Money Rates
column or section of The Wall Street Journal as being the base rate on corporate
loans at large U.S. money center commercial banks (whether or not such rate has
actually been charged by any such bank) on the first day on which The Wall
Street Journal is published in the month preceding the month in which the
subject costs are payable or incurred.

 

3.3 Late Fee

 

Tenant acknowledges that the late payment by Tenant to Landlord of Rent will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be difficult to ascertain. Such costs may include, without
limitation, administrative costs, processing and accounting charges, and late
charges, which may be imposed on Landlord. Accordingly, if any payment of Rent
shall not be received by Landlord within five (5) days after the date that such
payment is due and payable, then Tenant shall pay to Landlord, in addition to
the interest provided above, a late charge in the amount of five percent (5%) of
the amount due. The parties agree that such late charge represents a fair and
reasonable estimate of the costs Landlord will incur by reason of late payment
by the Tenant. Acceptance of such late charge by Landlord shall not prevent the
Landlord from exercising any of its rights or remedies hereunder.

 

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3.4 Rent

 

For purposes of this Lease, "Rent" and "rent" shall include all amounts payable
by Tenant to Landlord under this Lease, including Basic Monthly Rent and all
additional rent and other charges hereunder, regardless of how described or
denominated.

 

3.5 Security Deposit

 

Concurrent with the execution of this Lease, Tenant shall pay to Landlord the
amount specified in Item 7 of the Basic Lease Information (the "Security
Deposit"). The Security Deposit shall be held by Landlord as security for the
faithful performance by Tenant of all of the provisions of this Lease to be
performed or observed by Tenant. If Tenant fails to pay any Rent, or otherwise
Defaults with respect to any provision of this Lease, Landlord may (but shall
not be obligated to), and without prejudice to any other remedy available to
Landlord, use, apply or retain all or any portion of the Security Deposit for
the payment of any Rent in default or for the payment of any other sum to which
Landlord may become obligated by reason of Tenant's Default, or to compensate
Landlord for any loss or damage which Landlord may suffer thereby. Tenant waives
the provisions of California Civil Code Section 1950.7 and all other provisions
of law now in force or that become in force after the date of execution of this
Lease that provide that Landlord may claim from the Security Deposit only those
sums reasonably necessary to remedy Defaults in the payment of Rent, to repair
damage caused by Tenant, or to clean the Premises. If Landlord uses or applies
all or any portion of the Security Deposit as provided above, Tenant shall,
within ten (10) days after demand therefor, deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to the full amount thereof,
and Tenant's failure to do so shall, at Landlord's option, be an Event of
Default (as defined in Section 16.1 below) under this Lease. Landlord shall not
be required to keep the Security Deposit separate from its general accounts. If
Tenant performs all of Tenant's obligations hereunder, the Security Deposit, or
so much thereof as has not theretofore been applied by Landlord, shall be
returned, without payment of interest or other increment for its use, to Tenant
(or, at Landlord's option, to the last assignee, if any, of Tenant's interest
hereunder) after the expiration of the Term and after Tenant has vacated the
Premises. Landlord's return of the Security Deposit or any part thereof shall
not be construed as an admission that Tenant has performed all of its
obligations under this Lease. No trust relationship is created herein between
Landlord and Tenant with respect to the Security Deposit.

 

ARTICLE 4
ADDITIONAL RENT

 

4.1 Increased Direct Expenses

 

The "Base Year" is that calendar year specified in Paragraph 6 of the Basic
Lease Information. During each calendar year of the Term subsequent to the Base
Year Tenant shall pay to Landlord, as additional rent, Tenant's Percentage Share
(as specified in the Basic Lease Information) of any increase in Direct Expenses
(as defined in Section 4.2) paid or incurred by the Landlord during such
calendar year (which increase is hereinafter referred to as the "Increased
Direct Expenses"). Landlord may, at or after the start of any calendar year
subsequent to the Base Year, notify Tenant of the amount which Landlord
estimates will be Tenant's monthly share of Increased Direct Expenses for such
calendar year, and Tenant shall pay such amount as additional rent on or before
the first day of each month of the Term, along with the Basic Monthly Rent
payments required to be made by Tenant in such year. If during the Base Year or
any succeeding calendar year less than ninety-five percent (95%) of the Building
is leased and occupied, then the amount of Direct Expenses allocable to the
subject calendar year for purposes of Tenant's Percentage Share of Increased
Direct Expenses shall be increased to an amount reasonably estimated by Landlord
to be the amount of Direct Expenses which would have been paid or incurred if
ninety-five percent (95%) of the Rentable Area of the Building had been occupied
during the subject year. Tenant's Percentage Share may be adjusted from time to
time for certain Direct Expenses due to the pool of tenants who are provided
such services.

 

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4.2 Definition of Direct Expenses

 

"Direct Expenses" as used herein shall include all costs, charges and expenses
incurred in the course of ownership, management, operation, security, repair and
maintenance of the Project including, without limitation:

 

(a) Wages, salaries, fringe benefits and other compensation of all employees of
Landlord and its agents to the extent engaged in the management, security,
repair, operation or maintenance of the Project, including, but not limited to,
a Building superintendent and/or engineer and associated personnel; employer's
Social Security taxes, unemployment taxes and/or insurance, and other taxes to
the extent levied upon such wages, salaries, fringe benefits or other
compensation; the cost of disability and hospitalization insurance and pension
or retirement benefits for such employees, excluding however, all executive
salaries and brokerage commissions.

 

(b) Costs of service, maintenance and inspection contracts for landscaping,
janitorial, window cleaning, rubbish removal, maintenance of Common Areas,
exterminating, replacement of Building standard lighting, elevator, plumbing,
electrical and mechanical equipment and the costs of purchasing or renting
mechanical equipment, supplies, tools, materials and uniforms.

 

(c) Premiums and other charges for insurance, including, without limitation, all
risk, earthquake, public liability, property damage and worker's compensation
insurance, and such other insurance coverage in such amounts as Landlord, in its
reasonable discretion, shall elect to maintain consistent with the requirements
of other landlords of buildings located in the downtown San Francisco area, or
as may be required by the Holder of any Superior Interest (as such terms are
defined in Article 18 below).

 

(d) Costs of electricity, water, gas, steam, sewer and other utility services in
order to maintain the Building in a manner, consistent with buildings of similar
age and quality in the downtown San Francisco area.

 

(e) Sales, use, excise taxes on goods and services purchased or owned by
Landlord for the operation, security or maintenance of the Building.

 

(f) Permit and inspection fees and charges, the cost of contesting any
governmental enactments which may affect Direct Expenses, and the costs incurred
in connection with any transportation system management program or similar
program, including the costs of operating any shuttle bus or similar program.

 

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(g) Ordinary legal, accounting and other professional, consulting or service
fees and expenses, including the costs of audits by certified public
accountants.

 

(h) Fees for management services, whether provided by an independent management
company, Landlord, or an affiliate of Landlord, including, but not limited to,
fair market rental for the Building office, fees and expenses for accounting,
financial management, data processing and information services, and costs of
tenant service programs.

 

(i) The costs of any capital improvements, equipment or devices installed or
paid for by Landlord (1) to conform with any change in Laws (including to
conform with any change in the Building’s or the Premises’ use or occupancy
classification) of any governmental or quasi-governmental authority having
jurisdiction including any health or environmental protection authority or
legislation or of the board of fire underwriters or similar insurance body or,
(2) to effect a labor saving, energy saving or other economy; amortized over the
lesser of ten (10) years, the payback period, or the useful life of such capital
improvement, equipment or device (as reasonably determined by Landlord), as well
as interest on the unamortized balance at the Prime Rate plus 2% on the date the
costs are incurred or such higher rate as may have been paid by Landlord on
borrowed funds. The "pay back period" shall be the period within which the
anticipated savings from the use of such capital improvement, equipment or
device, as determined by Landlord, will equal the cost of the subject capital
improvement, equipment or device.

 

(j) The costs of (i) carpeting, draperies and wall coverings in the Common
Areas, and (ii) other furnishings in Common Areas which, as a result of normal
use, require periodic replacement in order to maintain the Building in a first
class manner, consistent with buildings of similar age and quality in the
downtown San Francisco area, amortized over the useful life of such improvements
(as reasonably determined by Landlord), together with interest on the
unamortized balance at the Prime Rate on the date the costs are incurred or such
higher rate as may have been paid by Landlord on borrowed fund.

 

(k) The cost of operating (including power consumption) maintaining, repairing,
servicing and replacing the heating, ventilation and air conditioning ("HVAC"),
mechanical, electrical, plumbing and other systems serving the Building.

 

4.3 Statements

 

A reasonably detailed statement (the "Statement") of the Direct Expenses
actually payable by Tenant shall be given to Tenant within one hundred eighty
(180) days after the end of each calendar year or as soon thereafter as
practicable. If Tenant's Percentage Share of any Direct Expenses as shown on
such Statement is greater or less than the total amount actually paid by Tenant
during the calendar year covered by such Statement, then within thirty (30) days
thereafter, Tenant shall pay in cash any sums owed to Landlord or, if
applicable, Tenant shall receive a credit against any Rent next accruing for any
sum owed Tenant. If, as of the thirtieth (30th) day after delivery to Tenant of
a Statement, Tenant shall not have delivered to Landlord an Objection Notice (as
defined below), then such Statement shall be final and binding upon Landlord and
Tenant, and Tenant shall have no further right to object to such Statement. If
within such thirty (30) day period, Tenant delivers to Landlord a written
statement specifying objections to such Statement (an "Objection Notice"), then
Tenant and Landlord shall meet to attempt to resolve such objection within
thirty (30) days after delivery of the Objection Notice. Landlord shall provide
access for Tenant to review its pertinent records, during the thirty (30) day
period after delivery to Tenant of a Statement, during regular business hours in
Landlord's management office for the Building. Notwithstanding that any such
dispute remains unresolved, Tenant shall be obligated to pay Landlord all Rent
payable in accordance with this Lease (including any disputed amount). If such
dispute results in an agreement that Tenant is entitled to a refund, Landlord
shall, at its option, either pay such refund or credit the amount thereof to the
Basic Monthly Rent next becoming due from Tenant. The failure or delay by
Landlord to provide Tenant with Landlord’s estimate of Tenant’s Percentage Share
of Direct Expenses or a Statement for any calendar year shall not constitute a
default by Landlord hereunder, or a waiver by Landlord of Tenant’s obligation to
pay Tenant’s Percentage Share of Direct Expenses for such calendar year or of
Landlord’s right to send to Tenant such an estimate or Statement, as the case
may be. If the Term of this Lease expires or is terminated on a day other than
the last day of a calendar year, the amount of Direct Expenses payable by Tenant
during the calendar year in which the Term expires or is terminated shall be
prorated on the basis which the number of days from the commencement of the
calendar year to and including the date on which the Term expires or is
terminated bears to three hundred sixty-five (365). Within one hundred twenty
(120) days following expiration of the calendar year in which the Term expired
or terminated, or as soon thereafter as practicable, Landlord shall give a final
Statement to Tenant for such calendar year ("Final Statement"). If Tenant's
share of any Direct Expenses as shown on the Final Statement is greater or less
than the total amounts of Direct Expenses actually paid by Tenant during the
calendar year covered by the Final Statement, then within thirty (30) days
thereafter the appropriate party shall pay to the other party any sums owed.

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ARTICLE 5
TAX ADJUSTMENT

 

5.1 Increased Taxes

 

During each calendar year of the Term subsequent to the Base Year, Tenant shall
pay to Landlord, as additional rent, Tenant's Percentage Share (as specified in
the Basic Lease Information) of any increase in taxes ("Taxes" as defined in
Section 5.2) paid or incurred by Landlord during such calendar year (which
increase is hereinafter referred to as the "Increased Taxes"). Landlord may, at
or after the start of any calendar year subsequent to the Base Year, notify
Tenant of the amount of which Landlord estimates will be Tenant's monthly share
of Increased Taxes for such calendar year, and Tenant shall pay such amount as
additional rent on or before the first day of each month of the Term, along with
the Basic Monthly Rent payments required to be made by Tenant in such year.
Statements of the Increased Taxes actually payable by Tenant for each year
subsequent to the Base Year shall be given to Tenant within a reasonable period
of time after the end of each calendar year. If Tenant's share of any Increased
Taxes as shown on such statement is greater or less than the total amounts
actually paid by Tenant during the year covered by such statement, then within
fifteen (15) days thereafter, Tenant shall pay in cash any sums owed Landlord
or, if applicable, Tenant shall receive a credit against any Rent next accruing
for any sum owed Tenant. If this Lease expires or is terminated on a day other
than the last day of a calendar year, the amount of Increased Taxes payable by
Tenant during the year in which the Lease expires or is terminated shall be
prorated on the basis which the number of days from the commencement of the
calendar year to and including the date on which the Lease expires or is
terminated bears to three hundred sixty-five (365). Following expiration of the
calendar year in which the Lease expired or was terminated, Landlord shall give
a final statement, subject to revision, of Increased Taxes for such calendar
year. If Tenant's share of any Increased Taxes as shown on such final statement
is greater or less than the total amounts to the other party any of Increased
Taxes actually paid by Tenant during the year covered by the statement, then
within thirty (30) days thereafter the appropriate party shall pay to the other
party any sums owed.

 

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5.2 Definition of Taxes

 

"Taxes" as used herein shall mean all taxes, service payments, service payments
in lieu of taxes, annual or periodic license or use fees, excises, transit
charges, housing fund assessments or other housing charges, assessments, levies,
fees or charges, general and special, ordinary and extraordinary, unforeseen as
well as foreseen, of any kind which are assessed, levied, charged, confirmed, or
imposed by any public authority upon the Building, its operations, the rent or
any portion or component thereof, the Real Property, or upon the personal
property of Landlord used in the operation of the Building or the Real Property,
fees and payments except: (a) inheritance or estate taxes imposed upon or
assessed against Landlord or the Building or any part thereof or interest
therein, (b) taxes computed upon the basis of the net income derived from the
Building by Landlord or the owner of any interest therein, and (c) any penalties
or charges associated with delinquent taxes, taxes pertaining to periods prior
to or after the Term. "Taxes" shall also include any and all supplemental Taxes,
escape assessments or increases of Taxes for or as a result of any reason
whatsoever.

 

"Taxes" shall also include Landlord's cost of contesting by appropriate
proceeding the amount or validity of any of the aforementioned taxes. Landlord
shall credit a pro rata share of any tax rebate or refund against all Rent due
hereunder from and after the date of Landlord's recovery and adjust Tenant's
Percentage Share of all future Taxes as of such date.

 

5.3 Additional Taxes

 

In addition to the Basic Monthly Rent and other charges to be paid by Tenant
hereunder, Tenant shall reimburse Landlord upon demand for any and all taxes,
surcharges, levies, assessments, fees and charges payable by Landlord, whether
or not now customary or within the contemplation of the parties hereto: (a)
upon, measured by, or reasonably attributable to the cost or value of Tenant's
equipment, furniture, fixtures and other personal property located in the
Premises, or the cost or value of any leasehold improvements, regardless of
whether title to such improvements shall be in Tenant or Landlord; (b) upon, or
measured by, any Rent or other amount payable hereunder or otherwise in
connection with the Project, including, without limitation, any business tax,
business license tax, payroll tax, gross receipts tax or excise tax levied by
the city and/or county where the Building is located, the State of California,
the federal government of the United States or any other governmental body with
respect to the receipt of such Rent or other amounts payable under this Lease;
(c) upon, or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (d) 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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ARTICLE 6
USE

 

6.1 General

 

The Premises shall be used only for the Permitted Uses specified in Item 9 of
the Basic Lease Information and for no other purpose whatsoever, without the
prior written consent of Landlord which shall be given or withheld in Landlord's
sole and absolute discretion.

 

6.2 No Nuisance or Waste

 

Tenant shall not do or knowingly permit anything to be done in or about the
Premises which will in any way 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, immoral or objectionable purpose, nor
shall Tenant cause, maintain or knowingly permit any nuisance in, on, or about
the Premises. Tenant agrees not to commit or suffer to be committed any waste in
or upon the Premises.

 

6.3 Compliance With Laws

 

(a) No Illegal Use

 

Tenant shall not use the Premises or knowingly permit anything to be done in or
about the Premises which will in any way conflict with any law, statute,
ordinance, or governmental rule, regulation or requirement, including, without
limitation, Disability Access Laws, as defined in Section 6.3(b), now in force
or which may hereafter be enacted or promulgated ("Law" or "Laws"), or which
might result in any change in the Building’s or the Premises’ use or occupancy
classification. At its sole cost and expense, Tenant shall promptly comply with
all Laws which relate to (i) Tenant's use of the Premises, (ii) any Alterations
made by Tenant to the Premises, or (iii) the portions of the Building outside of
the Premises, but only to the extent such obligations are triggered by
Alterations made by Tenant to the Premises or triggered by Tenant's use of the
Premises for other than general office use, and provided that Landlord has the
right to perform such work at Tenant's cost. Tenant shall not do or knowingly
permit anything to be done in or about the Premises or bring or keep anything
herein which will in any way increase the rate of fire insurance upon the
Building or any of its contents, and Tenant shall, at its sole cost and expense,
promptly comply with the requirements of any board of fire underwriters or other
similar body now or hereafter constituted relating to Tenant's use or occupancy
of the Premises. The judgment of any court of competent jurisdiction or the
admission of Tenant in an action against Tenant, whether Landlord be a party
thereto or not, that Tenant has so violated any Law shall be conclusive of such
violation as between Landlord and Tenant.

 

(b) Compliance with Disability Access Laws

 

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(i) The Premises and/or the Building are subject to, among other Laws, the
requirements of the Americans with Disabilities Act, a federal law codified at
42 U.S.C. 12101 et seq., including, but not limited to Title III thereof, and
all regulations and guidelines related thereto, together with any and all
similar laws, rules, regulations, ordinances, codes and statutes now in force or
which may hereafter be enacted or promulgated, including, without limitation,
Title 24 of the California Code of Regulations, the Unruh Civil Rights Act,
California Civil Code Sections 51 through 51.3, and San Francisco Administrative
Code Section 38, as the same may be in effect on the date of this Lease and may
be hereafter modified, amended or supplemented (collectively, the "Disability
Access Laws"). The Premises have not undergone inspection by a Certified Access
Specialist (CASp), as defined in Section 55.52 of the California Civil Code, and
Tenant is responsible for inspecting the Premises to ensure that the Premises
comply with Disability Access Laws. Subject to reimbursement pursuant to
Article 4 above, if any work is required to the Building outside the Premises
under Disability Access Laws, then such work shall be the responsibility of
Landlord; provided, that, if such work is required under Disability Access Laws
as a result of Tenant's use of the Premises or any work or Alteration made to
the Premises by or on behalf of Tenant, then, at Landlord's option, such work
shall be performed by Landlord or Tenant, at the sole cost and expense of
Tenant. Except as otherwise expressly provided in this provision, Tenant shall
be responsible at its sole cost and expense for fully and faithfully complying
with all applicable requirements of Disability Access Laws. Within ten (10) days
after receipt, Tenant shall advise Landlord in writing, and provide Landlord
with copies of (as applicable), any notices alleging violation of Disability
Access Laws relating to any portion of the Premises or the Building; any claims
made or threatened orally or in writing regarding noncompliance with Disability
Access Laws and relating to any portion of the Premises or the Building; or any
governmental or regulatory actions or investigations instituted or threatened
regarding noncompliance with Disability Access Laws and relating to any portion
of the Premises or the Building. Tenant shall and hereby agrees to protect,
defend (with counsel acceptable to Landlord) and hold Landlord and the
Indemnitees harmless and indemnify Landlord and the Indemnitees from and against
all liabilities, damages, claims, losses, penalties, judgments, charges and
expenses (including attorneys' fees, costs of court and expenses necessary in
the prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant Parties' violation or alleged violation of Disability Access
Laws. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.

 

(ii) Pursuant to the requirements of San Francisco Administrative Code Section
38.5, Tenant hereby agrees to use reasonable efforts to notify Landlord if
Tenant makes any Alterations or improvements to the Premises that might impact
accessibility to the Premises or the Building under any Disability Access Laws.
Landlord hereby agrees to use reasonable efforts to notify Tenant if Landlord
makes any alterations or improvements to the Premises or the Building that might
impact accessibility to the Premises or the Building under any Disability Access
Laws.

 

(iii) Landlord and Tenant hereby acknowledge that, prior to the execution of
this Lease, Landlord and Tenant executed a Disability Access Obligations Notice,
pursuant to San Francisco Administrative Code Chapter 38. Landlord and Tenant
shall each, within three (3) business days following a request from the other
party, execute a new Disability Access Obligations Notice in accordance with San
Francisco Administrative Code Chapter 38 or any successor statute. In addition,
Tenant acknowledges receipt from Landlord of an Access Information Notice as
required by San Francisco Administrative Code Chapter 38. Tenant acknowledges
that such notices comply with the requirements of San Francisco Administrative
Code Chapter 38.

 

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6.4 Alterations to Common Areas

 

Landlord specifically reserves the right to change the size, configuration,
design, layout and all other aspects of the Common Areas at any time, and Tenant
acknowledges and agrees that Landlord may, from time to time, close-off or
restrict access to the Common Areas for purposes of permitting or facilitating
any construction, alteration, repairs or improvements. If changes or alterations
are made by Landlord to any portion of the Project other than the Premises,
Landlord shall not thereby be subject to any liability nor shall Tenant be
entitled to any compensation or any diminution or abatement of Rent and such
changes or alterations shall not be deemed to be a constructive or actual
eviction or a breach of Landlord's covenant of quiet enjoyment. Landlord agrees
to use commercially reasonable efforts to undertake such work in a manner so as
to minimize any disruption to Tenant's operations and to minimize any reduction
in Tenant's visibility, access or utility of the Premises.

 

6.5 Toxic Substances

 

Tenant shall not maintain, create, use or discharge any toxic or hazardous
substances in, on, or about the Project (other than small amounts of typical
cleaning supplies as shall be needed to clean the Premises, used in strict
compliance with applicable local, state and federal law).

 

6.6 Load and Equipment, Notice of Defects

 

Tenant shall not place a load upon any floor of the Premises which exceeds the
load per square foot which such floor was designed to carry, as determined by
Landlord or Landlord's structural engineer. The cost of any such determination
made by Landlord's structural engineer shall be paid for by Tenant upon demand.
Tenant shall not install business machines or mechanical equipment which cause
noise or vibration to such a degree as to be objectionable to Landlord or other
Building tenants. Tenant shall give Landlord prompt notice of any change to or
defective condition in any part or appurtenance of the Building's mechanical,
electrical, plumbing, HVAC or other systems serving, located in, or passing
through the Premises of which it is aware.

 

6.7 Signage

 

Tenant shall not display any sign or picture in the interior of the Premises,
which is visible from the outside of the Building. Landlord will provide, at
Landlord's cost, one line of directory signage in the main lobby of the Building
and at the entrance to the Premises. Any additional Tenant signage shall be at
Tenant's cost and subject to Landlord's prior approval. Landlord shall have the
right to remove any sign, placard, picture, name, advertisement, or notice not
approved by Landlord without notice to and at the expense of Tenant. Tenant is
not entitled to install any banners, awnings or signage on the exterior of the
Building.

 

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ARTICLE 7
SERVICES AND UTILITIES

 

7.1 General

 

So long as Tenant is not in Default in the performance of its obligations under
this Lease, Landlord shall:

 

(a) Operate or cause the operation in season of the heating system, serving the
Premises, if any, during Ordinary Business Hours (as such term is defined in the
Rules and Regulations attached hereto as Exhibit B) at such temperatures and in
such amounts as Landlord determines are reasonably required for the comfortable
occupancy of the Premises or as may be permitted or controlled by applicable
Laws. Any heating provided by Landlord to Tenant during other than Ordinary
Business Hours shall be furnished only upon at least forty-eight (48) business
hours prior written request of Tenant and at Tenant's sole cost and expense.

 

(b) Provide water to the restrooms on each floor and make customary arrangements
with public utilities and/or public agencies to furnish electric current to the
Premises in amounts sufficient for normal lighting by overhead fluorescent
fixtures and for normal use of standard personal computers for standard office
use and other office machines of similar low electrical consumption but not
including electricity required for computer servers, independent
air-conditioning units, special communications equipment, special lighting or
any other item of electrical equipment which (singly) consumes more than one
(1.0) kilowatt at rated capacity or requires a voltage other than 120 volts
single-phase (collectively "High-Consumption Equipment"). Tenant shall not
install any High-Consumption Equipment in the Premises without Landlord's prior
written consent. Landlord shall have no obligation to install dedicated circuits
or other special circuitry or wiring. Tenant shall advise Landlord prior to the
execution of this Lease and within five (5) days after written request therefor
of the nature and quantity of all lights, equipment and machines using
electricity in the Premises and shall permit Landlord or its authorized agents
to make periodic inspections of all facilities using electricity of 0.18
kilowatt hours per square foot of rentable area. Landlord shall have the right
to install a separate electric current meter or sub-meter in the Premises to
measure the amount of electric current consumed on the Premises. The cost of
such meter, special conduits, wiring and panels needed in connection therewith,
the installation, maintenance and repair thereof, and the costs of excess
electric current as shown by such meter shall be paid for by Tenant, as
additional rent upon demand.

 

(c) Operate, maintain, clean, light, and heat the Common Areas, as Landlord
shall deem necessary. In its sole discretion, Landlord may provide security
services to the Building. Tenant acknowledges that security services provided by
Landlord from time to time, if any, may not prevent theft or other criminal
acts, or insure the safety of persons or property, and Tenant expressly assumes
the risk that any such security service may not be effective. In all events and
notwithstanding any provision of this Lease to the contrary, Landlord and the
other Indemnitees (as defined in Section 12.2 below) shall not be liable to
Tenant, and Tenant hereby waives any claim against the Indemnitees to the
maximum extent permitted by Law, for (i) any unauthorized or criminal entry of
third parties into the Premises or the Building, (ii) any injury to or death of
persons, or (iii) any loss of property in and about the Premises or the Building
by or from any unauthorized or criminal acts of third parties, regardless of any
action, inaction, failure, breakdown, malfunction and/or insufficiency of the
security services provided by Landlord, or any allegation of active or passive
negligence on the part of Landlord or the other Indemnitees. Tenant shall obtain
insurance coverage to the extent Tenant desires protection against criminal acts
and other losses.

 

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(d) Provide janitorial service to the Building at a standard provided to other
comparable office buildings in San Francisco on each weekday, exclusive of
Saturday, Sunday and holidays, subject to access being granted to the person or
persons employed or retained by Landlord to perform such work at such time as
prescribed by Landlord.

 

7.2 Supplementary Services

 

Tenant shall pay Landlord, at the charges established by Landlord from time to
time, for all supplementary services requested by the Tenant, which charges
shall be payable by Tenant upon demand by Landlord. Such supplementary services
shall include, without limitation, maintenance, repair, janitorial, rubbish
removal, cleaning and other services. Landlord shall not be under any obligation
to provide such supplementary services.

 

7.3 Interruption of Access, Use or Services

 

Landlord shall not be liable for any failure to provide access to or use of the
Premises, or to furnish any services or utilities when such failure is caused by
natural occurrences, riots, civil disturbances, insurrection, war, court order,
public enemy, accidents, breakage, repairs, strikes, lockouts, other labor
disputes, the making of repairs, alterations or improvements to the Premises or
the Building, the inability to obtain an adequate supply of fuel, gas, steam,
water, electricity, labor or other supplies or by any other condition beyond
Landlord's reasonable control, except to the extent any injury, death or damage
therefrom is caused by Landlord's gross negligence or willful misconduct and not
covered by the insurance required to be carried pursuant to this Lease, and
Tenant shall not be entitled to any damages resulting from such failure, nor
shall such failure relieve Tenant of the obligation to pay all sums due
hereunder or constitute or be construed as a constructive or other eviction of
Tenant. If any governmental entity promulgates or revises any statute, ordinance
or building, fire or other code, or imposes mandatory or voluntary controls or
guidelines on Landlord or the Building or any part thereof, relating to the use
or conservation of energy, water, gas, steam, light or electricity or the
provision of any other utility or service provided with respect to this Lease,
or if Landlord is required or elects to make alterations to the Building in
order to comply with such mandatory or voluntary controls or guidelines, or make
such alterations to the Building, neither such compliance nor the making of such
alterations shall in any event entitle Tenant to any damages, relieve Tenant of
the obligation to pay any of the sums due hereunder, or constitute or be
construed as a constructive or other eviction of Tenant. Tenant hereby waives
the provisions of California Civil Code Section 1932(1) or any other applicable
Laws permitting the termination of this Lease due to such failure or
interruption.

 

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ARTICLE 8
SUITABILITY OF PREMISES

 

Tenant acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the suitability or fitness of the
possession or use of the Premises for the conduct of Tenant's business or for
any other purpose.

 

ARTICLE 9
ALTERATIONS

 

9.1 General

 

Tenant shall neither make nor cause to be made any alterations, additions or
improvements (collectively "Alterations") in, on or to any portion of the
Building or the Common Areas outside of the interior of the Premises. Tenant
shall not make or suffer to be made any Alterations in, on or to the interior of
the Premises or any part thereof, without the prior written consent of Landlord,
which consent will not be unreasonably withheld or delayed; provided, however,
Tenant acknowledges that, by way of example and without limitation, it shall be
reasonable for Landlord to withhold its consent to Alterations affecting the
structural portions of the Building or the life-safety, electrical, plumbing,
HVAC fire-protection, telecommunications or other Building systems
(collectively, "Building Systems"), structural portions of the Building, or
Alterations which require work to be performed in portions of the Project
outside the Premises in order to comply with Laws (e.g., ordinances intended to
provide full access to handicapped persons). When applying for any such consent,
Tenant shall furnish to Landlord complete plans and specifications for the
desired Alterations. Landlord's approval of Tenant's plans and specifications
shall create no liability on the part of Landlord for their completeness,
sufficiency, or compliance with Laws. Any Alterations to be constructed
hereunder shall comply with Laws, including, without limitation, Disability
Access Laws, and all costs incurred to comply therewith shall be a part of and
included in the cost of the Alterations. Tenant shall be solely responsible for
conducting its own independent investigation of this matter and for ensuring
that the design of all Alterations strictly complies with Laws. Subsequent to
obtaining Landlord's consent and prior to commencement of construction of the
Alterations, Tenant shall deliver to Landlord any building permit required by
Law. If Landlord consents to the making of any Alterations, the same shall be
made by Tenant at Tenant's sole cost and expense. All Alterations shall be
performed only by contractors or mechanics approved by Landlord, which approval
shall not be unreasonably withheld; provided, however, that Landlord may, in its
sole discretion, specify engineers, general contractors, subcontractors, and
architects to perform work affecting the Building Systems or structural portions
of the Building. Tenant shall provide, at its expense, such completion,
performance and/or payment bonds as Landlord considers reasonably necessary.
Tenant shall also require its contractor and all subcontractors to maintain
insurance in amounts and in such form as Landlord may reasonably require, and
Tenant shall provide to Landlord, prior to commencement of construction of the
Alterations, evidence of such insurance as Landlord may require. Any Alterations
shall be completed in accordance with the plans and specifications approved by
Landlord, shall be carried out in a good, workmanlike and prompt manner, shall
comply with all applicable Laws, and shall be subject to supervision by Landlord
or its employees, agents or contractors. Tenant shall pay to Landlord a fee in
the amount of ten percent (10%) of the cost of the Alterations for its review of
plans and its coordination of the progress of the work. Without Landlord's prior
written consent, Tenant shall not use any portion of the Common Areas in
connection with the making of any Alterations. If the Alterations which Tenant
causes to be constructed result in Landlord being required to make any
alterations and/or improvements to other portions of the Building in order to
comply with Laws (e.g., ordinances intended to provide full access to
handicapped persons), then Tenant shall reimburse Landlord within thirty (30)
days following Tenant's receipt of a detailed demand for all costs and expenses
incurred by Landlord in making such alterations and/or improvements. Any
Alterations made by Tenant shall remain on and be surrendered with the Premises
upon the expiration or sooner termination of the Term, except Tenant shall upon
demand by Landlord, at Tenant's sole cost and expense forthwith and with all due
diligence remove all or any portion of any Alterations made by Tenant which are
designated by Landlord to be removed, and Tenant shall forthwith and with all
due diligence, and at its sole cost and expense, repair and restore the Premises
to their original condition, reasonable wear and tear excepted. Tenant shall
remove all telephone equipment, telephone and computer wires, cables, conduits
and other conductors, which were installed for the benefit of the Tenant at the
Tenant's sole cost and expense upon termination of the Lease, and the Tenant
shall at its sole cost and expense, forthwith and with all due diligence repair
and restore the Premises and the Building to their original condition.

 

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9.2 Notice

 

Tenant shall give Landlord at least fifteen (15) days prior written notice of
commencement of any work of construction, alteration, maintenance, repair or
replacement in order to enable Landlord to post and record notices of
non-responsibility. Tenant shall keep the Premises, Common Areas, Building and
the Real Property free from any liens arising out of any work performed,
materials furnished or obligations incurred by Tenant. In the event that Tenant
does not, within ten (10) days following the recording of notice of any such
lien, Tenant shall cause the same to be released of record, and Landlord shall
have, in addition to all other remedies provided herein and by Law, the right,
but not the obligation, to cause the same to be released by such means as it
shall deem proper, including payment of the claim giving rise to such lien. All
sums paid by Landlord for such purpose, and all expenses incurred by it in
connection therewith, shall be payable to Landlord by Tenant, as additional
rent, on demand, together with interest at the Interest Rate from the date such
expenses are incurred by Landlord to the date of the payment thereof by Tenant
to Landlord.

 

9.3 Labor Relations

 

Should any construction, alteration, addition, improvement or decoration of the
Premises by Tenant interfere with the harmonious labor relations in existence in
the Building, all such work shall be halted immediately by Tenant or Landlord’s
agent until such time as construction can proceed without any such interference.

 

9.4 Indemnity

 

Tenant shall indemnify and hold Landlord and each of the other Indemnitees
harmless from and protect and defend each Indemnitee against any and all Claims
(as defined in Section 12.2 below) arising out of or in any way related to
claims for work or labor performed, or materials or supplies furnished, to or at
the request of Tenant or in connection with performance of any work done for the
account of Tenant in the Premises, the Common Areas or the Building, whether or
not Tenant obtained Landlord's permission to have such work done, labor
performed, or materials or supplies furnished.

 

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9.5 Future Construction Work

 

Landlord reserves the right (upon thirty (30) days’ prior notice to, but
otherwise without the consent of Tenant) to make improvements and/or additions
to portions of the Building, including, without limitation, adding floor area to
one or more existing floors of the Building, and to undertake structural and
seismic improvement projects in the Building. Such construction activity may
result in columns, beams and other structural components being placed in the
Premises to accommodate the construction work and/or the permanent additions
and/or expansions to be constructed. Any such construction activity is entirely
discretionary with Landlord, and Tenant agrees that no representation, express
or implied, with respect to the future condition of the Building or any
improvements thereto have been made to Tenant by Landlord or any Landlord
representative. Tenant hereby waives any and all rights or claims of any kind
for rent offsets or based on constructive eviction, nuisance or interference
with enjoyment which may arise in connection with or result from such
construction activities; provided, however, Landlord shall use commercially
reasonable efforts to minimize disruption of Tenant’s business caused by such
construction activities. Notwithstanding anything in this Paragraph to the
contrary, if Landlord determines that any of the foregoing construction
activities will result in a material interference with or disruption to Tenant’s
business in the Premises, Landlord, upon thirty (30) days’ prior written notice
to Tenant that Landlord intends to commence such construction activity, may
relocate Tenant, temporarily, to other space in the Building, or if such space
is not available or not acceptable to Tenant, to terminate this Lease, without
liability to Tenant. If this Lease is not terminated as hereinabove provided,
and the Premises are altered by reason of such improvements, Landlord agrees to
re-measure the Premises following the completion of the improvements and to
adjust the Tenant’s rental obligations hereunder based on the new square footage
of the Premises, as determined by Landlord.

 

ARTICLE 10
REPAIRS

 

Landlord shall be responsible for maintaining and repairing the Common Areas of
the Building and the structural aspects of the Premises throughout the Term. No
representations or warranties, except as contained herein or endorsed hereon,
have been made to Tenant respecting the condition of the Premises, and the
acceptance of possession of the Premises by Tenant shall be conclusive evidence
as against Tenant that the Premises are now in tenantable and good condition.
Tenant shall take good care of the Premises and shall maintain the Premises and
any equipment exclusively serving the Premises (whether located in the Premises
or the Common Areas) and make all repairs and replacements in order to preserve
the Premises in good working order and condition. In addition, Tenant shall
reimburse Landlord, within thirty (30) days of written demand, for the cost of
any and all repairs or replacements to the Common Areas or the structural
aspects of the Premises necessitated or occasioned by the acts, omissions or
negligence of Tenant or any person claiming through or under Tenant, or any of
their servants, employees, contractors, agents, visitors or licensees, or by the
use or occupancy or manner of use or occupancy of the Premises by Tenant or any
such person. Landlord shall not be liable for, and there shall be no abatement
of Rent with respect to, any injury to or interference with Tenant's business
arising from any repairs, maintenance, alteration or improvement in or to any
portion of the Premises, the Common Areas or the Building or in or to the
fixtures, appurtenances or equipment therein. Tenant hereby waives all right to
make repairs at Landlord's expense under the provisions of Sections 1932(1),
1941 and 1942 of the California Civil Code (or any similar law or ordinance now
or hereafter in effect), and instead, all improvements, repairs, and/or
maintenance expenses incurred on the Premises shall be at the expense of Tenant,
and shall be considered as part of the consideration for leasing the Premises
except as otherwise expressly provided herein. All damages or injury done to the
Premises by Tenant or by any person who may be in or upon the Premises with
Tenant's consent or at Tenant's initiation, shall be paid for by Tenant, and
Tenant shall, at the termination of this Lease, surrender the Premises to
Landlord in as good condition and repair as when accepted by Tenant, reasonable
wear and tear excepted.

 

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ARTICLE 11
ASSIGNMENT AND SUBLETTING

 

11.1 Restrictions on Transfers

 

Tenant shall not, without the prior written consent of Landlord, which consent
Landlord shall not unreasonably withhold: (a) assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer,
this Lease or any interest hereunder, by operation of law or otherwise;
(b) sublet the Premises or any part thereof; or (c) permit the use of the
Premises by any individuals, entities, firms, associations, partnerships,
companies or corporations other than Tenant and its employees (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "Transferee").

 

11.2 Notice of Proposed Transfer

 

If Tenant shall desire Landlord's consent to any Transfer, Tenant shall notify
Landlord in writing ("Notice of Proposed Transfer"). Any such Notice of Proposed
Transfer shall include: (a) the proposed effective date (which shall not be less
than thirty (30) nor more than ninety (90) days after the date of Tenant's
Notice of Proposed Transfer), (b) the portion of the Premises to be Transferred
(herein called the "Subject Space"), (c) the terms of the proposed Transfer and
the consideration therefor, the name and address of the proposed Transferee, a
copy of all documentation pertaining to the proposed Transfer, and an estimated
calculation of the "Transfer Premium" (as that term is defined in Section 11.4
below) in connection with such Transfer, (d) financial statements of the
proposed Transferee for the three (3) year period immediately preceding the
Notice of Proposed Transfer (or, if the proposed Transferee has been in
existence for less than three (3) years, for such shorter period as may be
applicable) certified by an officer, partner or owner thereof and any other
information reasonably necessary to enable Landlord to determine the financial
responsibility (including, without limitation, bank references and contacts at
other of Tenant's funding sources), character and reputation of the proposed
Transferee, the nature of such Transferee's business and proposed use of the
Subject Space, and (e) such other information as Landlord may reasonably
require. Any Transfer made without complying with this Section shall, at
Landlord's option, be null, void and of no effect, and/or shall constitute an
immediate Event of Default under this Lease. Whether or not Landlord shall grant
consent, Tenant shall pay, within thirty (30) days after written request by
Landlord, Five Hundred and No/100 Dollars ($500.00) towards Landlord's review
and processing expenses, plus any reasonable legal fees incurred by Landlord in
connection with any proposed Transfer.

 

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11.3 Reasonable conditions

 

By way of example and without limitation, the parties hereby agree that it shall
be deemed to be reasonable under this Lease and under any applicable Laws for
Landlord to withhold consent to any proposed Transfer where, in the good-faith
judgment of Landlord, one or more of the following apply (or where Landlord has
not been provided with sufficient information to determine that none of the
following apply):

 

(a) The proposed Transferee fails to satisfy Landlord's then current credit and
other standards for tenants of the Building, or does not have the financial
strength and stability to perform all of the obligations of the Tenant under
this Lease (as they apply to the Subject Space) as and when they fall due; or

 

(b) The Transferee is of a character or reputation or is engaged in a business
which is not consistent with the quality of the Building or the existing tenant
mix; or

 

(c) The proposed use of the Premises by the proposed Transferee would (i) be
unlawful; (ii) be inappropriate to the location and configuration of the
Premises; (iii) cause Landlord to be in violation of another lease or agreement
to which Landlord is a party, or would give an occupant of the Building a right
to cancel its lease; (iv) likely cause an increase in insurance premiums for
insurance policies applicable to the Building; (v) likely require new tenant
improvements that Landlord would be entitled to disapprove pursuant to Article 9
hereof; (vi) likely cause an increase in services to be provided to the
Premises; (vii) likely create any increased burden in the operation of the
Building, or in the operation of any of its facilities or equipment; (viii)
likely cause a change in the Building’s or the Premises’ use or occupancy
classification, or (ix) likely impair the dignity, reputation or character of
the Building; or

 

(d) The proposed use of the Premises would result in the division of the
Premises into more than one (1) tenant space; or

 

(e) At the time of the proposed Transfer, an Event of Default shall have
occurred hereunder, or an event shall have occurred that with notice, the
passage of time, or both, would become an Event of Default; or

 

(f) The proposed Transferee is a governmental entity, or is entitled, directly
or indirectly, to diplomatic or sovereign immunity, or is not subject to the
service of process in, or the jurisdiction of the courts of, the State of
California, or holds any exemption from the payment of ad valorem or other taxes
which would prohibit Landlord from collecting from such Transferee any amounts
otherwise payable under this Lease; or

 

(g) 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 Building at the time of the
request for consent, (ii) is negotiating with Landlord to lease space in the
Building at such time, or (iii) has negotiated with Landlord during the six
(6)-month period immediately preceding Tenant's request for consent; or

 

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(h) The proposed Transfer or the proposed Transferee fails to comply with any
other conditions reasonably required by Landlord under the circumstances at such
time in accordance with good business practices; or

 

(i) The effective rent charged by Tenant to such proposed Transferee during the
term of such Transfer, calculated using a present value analysis, is less than
the effective rent being quoted by Landlord at the time of such Transfer for
comparable space in the Building for a comparable term, calculated using a
present value analysis; or if no comparable space in the Building is available
for lease for a comparable term at the time of Tenant's proposed Transfer, then
Landlord may withhold consent to any proposed Transfer if the effective rent
charged by Tenant to such proposed Transferee is less than the fair market
rental value of the Subject Space as of the date of the proposed Transfer, as
determined by Landlord.

 

11.4 Transfer Premium

 

If Landlord consents to a Transfer, as a condition thereto which the parties
hereby agree is reasonable, Tenant shall pay Landlord seventy-five percent (75%)
of any Transfer Premium derived by Tenant from such Transfer. "Transfer Premium"
shall mean all rent, additional rent or other consideration due from such
Transferee (including, but not limited to, payments in excess of fair market
value for Tenant's assets, trade fixtures, equipment and other personal
property, goodwill, intangible property and any capital stock or other equity
ownership of Tenant) in excess of the Rent payable by Tenant under this Lease
(on a monthly basis during the Term, and on a per rentable square foot basis, if
less than all of the Premises is transferred), after deducting Permitted
Transfer Costs. As used herein, "Permitted Transfer Costs" means the actual
costs incurred and paid by Tenant for (a) any customary leasing commissions and
reasonable legal fees and expenses in connection with the Transfer, and (b) any
Alterations to the Subject Space made by Tenant in connection with the Transfer,
provided that Tenant shall furnish Landlord with copies of bills or other
documentation substantiating such costs. For purposes of calculating the
Transfer Premium when the Transfer Premium is not paid to Tenant in a lump sum,
all Permitted Transfer Costs shall be amortized on a straight-line basis,
without interest, over the relevant term of the Transfer. If part of the
consideration for such Transfer shall be payable other than in cash, Landlord's
share of such non-cash consideration shall be in such form as is reasonably
satisfactory to Landlord. If Tenant shall enter into multiple Transfers, the
Transfer Premium payable to Landlord shall be calculated independently with
respect to each Transfer. The Transfer Premium due Landlord hereunder shall be
paid within ten (10) days after any Transfer Premium from the Transferee is due
to be paid to Tenant. Landlord or its authorized representatives shall have the
right at all reasonable times to audit the books, records and papers of Tenant
relating to any Transfer, and shall have the right to make copies thereof. If
the Transfer Premium respecting any Transfer shall be found to be 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.

 

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11.5 Recapture

 

Notwithstanding anything to the contrary contained in this Article 11, Landlord
shall have the option, by giving written notice to Tenant within thirty (30)
days after receipt of Tenant's Notice of Proposed Transfer, to recapture the
Subject Space. Such recapture notice shall cancel and terminate this Lease with
respect to the Subject Space as of the date stated in Tenant's Notice of
Proposed Transfer as the effective date of the proposed Transfer (or, at
Landlord's option, shall cause the Transfer to be made to Landlord or its agent,
in which case the parties shall execute the Transfer documentation promptly
thereafter). If Landlord recaptures the Subject Space, the following provisions
shall be applicable: (a) Landlord, at Landlord's expense, shall construct any
demising walls required to segregate the Subject Space from the remaining
Premises retained by Tenant; and Tenant shall be responsible, at its expense,
for painting, covering or otherwise decorating the surfaces of the partitions
facing the remaining Premises retained by Tenant; (b) if this Lease shall be
cancelled 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 (upon request of either party, the parties shall execute
written confirmation of the same); and (c) Landlord shall have the right to
negotiate directly with Tenant's proposed Transferee and to enter into a direct
lease or occupancy agreement with any such party on such terms as shall be
acceptable to Landlord in its sole and absolute discretion, and Tenant hereby
waives any claims against Landlord related thereto, including, without
limitation, any claims for compensation or profit related to such lease or
occupancy agreement.

 

11.6 Terms of Consent

 

If Landlord consents to a Transfer: (a) the terms and conditions of this Lease,
including among other things, Tenant's liability for the Subject Space, and Rent
with respect thereto, shall in no way be deemed to have been released, waived or
modified, (b) such consent shall not be deemed consent to any further Transfer
by either Tenant or the Transferee, (c) no Transferee shall succeed to any
rights provided in this Lease or any amendment hereto to extend the Term, expand
the Premises, or lease additional space, any such rights being deemed personal
to Tenant, (d) 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, and (e) 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. In addition, if Landlord consents to a Transfer, but the Transfer
does not occur within ninety (90) days after Tenant's Notice of Proposed
Transfer, or if the terms of the proposed Transfer materially change from those
set forth in Tenant's Notice of Proposed Transfer, Tenant shall submit a new
Notice of Proposed Transfer, requesting Landlord's consent, and the Subject
Space shall again be subject to Landlord's rights under Section 11.5 above. Each
Transferee under an assignment of this Lease, other than Landlord, must
expressly assume all of the provisions, covenants and conditions of this Lease
on the part of Tenant to be kept and performed. Any sublease hereunder shall be
subordinate and subject to the provisions of this Lease, and if this Lease shall
be terminated during the term of any sublease, Landlord shall have the right to:
(A) treat such sublease as cancelled and repossess the Subject Space by any
lawful means, or (B) require that the subtenant attorn to and recognize Landlord
as its landlord under any such sublease. If an Event of Default shall occur,
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 Event of Default is
cured.

 

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11.7 Subsequent Consents

 

Consent by Landlord to any Transfer made pursuant to this Lease shall not
operate to relieve Tenant from any covenant or obligation hereunder or be deemed
to be a consent to or relieve Tenant from obtaining Landlord's consent to any
subsequent Transfer by Tenant or anyone claiming by, through or under Tenant. No
subtenant shall have the right to further Transfer its interest in the Subject
Space.

 

11.8 Certain Transfers

 

For purposes of this Lease, the term "Transfer" shall also include (a) if Tenant
is a partnership, the withdrawal or change, voluntary, involuntary or by
operation of law, of a general partner or a majority of the partners, or a
transfer of a majority of partnership interests, or the dissolution of the
partnership; (b) if Tenant is a limited liability company, the withdrawal or
change, voluntary, involuntary, or by operation of law, of a majority of
members, or a transfer of a majority of the membership interests, or the
dissolution of the limited liability company; and (c) if Tenant is a
corporation, the dissolution, merger, consolidation or other reorganization of
Tenant, or the sale or other transfer of more than an aggregate of forty-nine
percent (49%) of the voting shares of Tenant (other than (A) sales on a public
stock exchange or (B) transfers to immediate family members by reason of gift or
death), or the sale, mortgage, hypothecation or pledge of more than an aggregate
of forty-nine percent (49%) of Tenant's net assets. Upon execution of this
Lease, Tenant shall deliver to Landlord a list of all of its shareholders,
members, or partners, as the case may be.

 

11.9 Tenant Remedies

 

Notwithstanding anything to the contrary in this Lease, if Tenant claims that
Landlord has unreasonably withheld or delayed its consent under this Article 11
or otherwise has breached or acted unreasonably under this Article 11, Tenant's
sole remedy shall be declaratory judgment and an injunction for the relief
sought without any monetary damages, and Tenant hereby waives all other
remedies, including, without limitation, any right provided under California
Civil Code Section 1995.310 or other applicable Laws to terminate this Lease.
Tenant shall indemnify and hold Landlord harmless from and protect and defend
Landlord against any and all Claims involving any third party or parties
(including, without limitation, Tenant's broker or proposed Transferee) who
claim they were damaged by Landlord's wrongful withholding or conditioning of
Landlord's consent.

 

11.10 Bankruptcy

 

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To the extent permitted under then-applicable Law, if a petition is filed by or
against Tenant for relief under Title 11 of the United States Code, as amended
(the "Bankruptcy Code"), and Tenant (including, for purposes of this Section,
Tenant's successor in bankruptcy, whether a trustee or Tenant as debtor in
possession) assumes and proposes to assign, or proposes to assume and assign,
this Lease pursuant to the provisions of the Bankruptcy Code to any person or
entity who has made a bona fide offer to accept any assignment of this Lease on
terms acceptable to Tenant, then notice of the proposed assignment setting forth
(a) the name and address of the proposed assignee, (b) all of the terms and
conditions of the offer and proposed assignment, and (c) the adequate assurance
to be furnished by the proposed assignee of its future performance under the
Lease, shall be given to Landlord by Tenant no later than twenty (20) days after
the Tenant has made or received such offer, but in no event later than ten (10)
days prior to the date on which Tenant applies to a court of competent
jurisdiction for authority and approval to enter into the proposed assignment.
Landlord shall have the prior right and option, to be exercised by notice to
Tenant given at any time prior to the date on which the court order authorizing
such assignment becomes final and non-appealable, to receive an assignment of
this Lease upon the same terms and conditions, and for the same consideration,
if any, as the proposed assignee, less any brokerage commissions which may
otherwise be payable out of the consideration to be paid by the proposed
assignee for the assignment of this Lease. If this Lease is assigned pursuant to
the provisions of the Bankruptcy Code, Landlord: (A) may require from the
assignee a deposit or other security for the performance of its obligations
under the Lease in an amount substantially the same as would have been required
by Landlord upon the initial leasing to a tenant similar to the assignee; (B)
shall receive, as additional rent, the sums and economic consideration described
in Section 11.4; and (C) shall be entitled to receive reimbursement of
reasonable attorneys' fees and costs incurred in connection with such
assignment. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed, without further act or
documentation, to have assumed all of the Tenant's obligations arising under
this Lease on and after the date of such assignment. No provision of this Lease
shall be deemed a waiver of Landlord's rights or remedies under the Bankruptcy
Code to oppose any assumption and/or assignment of this Lease, to require a
timely performance of Tenant's obligations under this Lease, or to regain
possession of the Premises if this Lease has neither been assumed nor rejected
within sixty (60) days after the date of the order for relief or within such
additional time as a court of competent jurisdiction may have fixed.
Notwithstanding anything in this Lease to the contrary, all amounts payable by
Tenant to or on behalf of Landlord under this Lease, whether or not expressly
denominated as Rent, shall constitute rent for the purposes of Section 502(b)(6)
of the Bankruptcy Code.

 

11.11 Permitted Transfers

 

Notwithstanding any provision of this Article 11 to the contrary, Landlord will
not withhold its consent to the following Transfers (a Transferee under any such
Transfer is herein referred to as a "Permitted Transferee"): (a) an assignment
of this Lease to a Transferee that purchases all or substantially all (at least
eighty-five percent (85%)) of the assets of Tenant, or to a Transferee that is
the resulting entity of a merger or consolidation of Tenant with another entity,
or (b) 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); provided that (i) no Event of Default exists at
the time of the Transfer; (ii) Tenant delivers to Landlord a Notice of Proposed
Transfer with respect to such proposed Transfer at least thirty (30) days prior
to the effective date thereof and promptly supplies Landlord with any documents
or information reasonably requested by Landlord regarding such Transfer or
Transferee, including, but not limited to, copies of the sublease or instrument
of assignment, copies of documents establishing to the reasonable satisfaction
of Landlord that the transaction in question is one described in clause (a) or
(b) above, and, in the case of a Transfer pursuant to clause (a) above, evidence
reasonably satisfactory to Landlord of the proposed Transferee's Net Worth (as
defined below), (iii) any such Transfer shall be subject to the provisions of
Sections 11.2, 11.3 [other than Sections 11.3(a), 11.3(g) and 11.3(h)], 11.6
(except with respect to the Transfer Premium), 11.7, 11.8, 11.9 and 11.10
hereof; (iv) in the case of a Transfer pursuant to clause (a) above, the
Transferee has a tangible net worth at the time of the Transfer (i.e., not
including intangible assets in the calculation, such as goodwill, patents,
copyrights, and trademarks) computed in accordance with generally accepted
accounting principles ("Net Worth") at least equal to the greater of (A) the Net
Worth of Tenant immediately prior to such Transfer, or (B) the Net Worth on the
date of this Lease of the original named Tenant; (v) the Permitted Transferee
shall continue to actively conduct business in the Premises in compliance with
the provisions of this Lease; (vi) no such Permitted Transferee shall have the
right to further assign this Lease or sublet all or any portion of the Premises
without the prior written consent of Landlord in accordance with this Article
11; and (vii) any such proposed Transfer is made for a good faith operating
business purpose and not, whether in a single transaction or in a series of
transactions, be entered into as a subterfuge to evade the obligations and
restrictions relating to Transfers set forth in this Article 11. "Control," as
used in this Section 11.11, shall mean the ownership, directly or indirectly, of
at least fifty-one percent (51%) of the voting securities of, or possession of
the right to vote, in the ordinary direction of its affairs, of at least
fifty-one percent (51%) of the voting interest in, any person or entity.

 

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ARTICLE 12
NON-LIABILITY AND INDEMNIFICATION

 

12.1 Waiver of Liability

 

Neither Landlord nor any of the other Indemnitees shall be liable or responsible
in any way for, and Tenant hereby waives all claims against Landlord and such
other Indemnitees with respect to or arising out of any death or any injury of
any nature whatsoever that may be suffered or sustained by Tenant or any
employee, licensee, invitee, guest, contractor, agent or customer of Tenant or
any other person, occurring in or about the Premises or the Building, from any
causes whatsoever; or for any loss or damage or injury to any property in or
about the Premises or the Building belonging to Tenant or its employees,
contractors, agents, customers, licensees, invitees, guests or any other person
(except to the extent such limitation on liability is prohibited by Law).
Without limiting the generality of the foregoing, Landlord shall not be liable
for any damage or damages of any nature whatsoever to persons or property caused
by explosion, fire, theft or breakage, by sprinkler, drainage or plumbing
systems, by failure for any cause to supply adequate drainage, by the
interruption of any public utility or service, by steam, gas, water, rain or
other substances leaking, issuing or flowing into any part of the Premises, by
natural occurrence, acts of the public enemy, riot, strike, insurrection, war,
court order, requisition or order of governmental body or authority. In
addition, Landlord shall not be liable for any loss or damage for which the
Tenant is required to insure.

 

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12.2 Indemnity

 

Tenant shall indemnify and hold Landlord, the Holders of all Superior Interests,
Landlord's agents, the shareholders, constituent partners and other direct or
indirect owners of Landlord or any agent of Landlord, and all contractors,
officers, directors and employees of any thereof (collectively, "Indemnitees"),
and each of them, harmless from and protect and defend each Indemnitee against
any and all obligations, losses, claims, actions (including remedial or
enforcement actions of any kind and administrative or judicial proceedings,
suits, orders or judgments), causes of action, liabilities, penalties, damages
(including consequential and punitive damages), costs and expenses (including
reasonable attorneys' and consultants' fees and expenses) (collectively,
"Claims"): (a) occurring in, on, or about the Premises, or any part thereof,
arising at any time and from any cause whatsoever, other than, with respect to
any Indemnitee, by reason of the gross negligence or willful misconduct of such
Indemnitee and such matter is not covered by the insurance required to be
carried by Tenant hereunder (except to the extent such indemnity obligation is
prohibited by Law); (b) occurring in, on, or about any part of the Project other
than the Premises, when such damage, injury, illness or death shall be caused by
the negligence or willful misconduct of Tenant, its agents, servants,
contractors, employees, invitees or licensees ("Tenant Parties); (c) arising out
of any toxic or hazardous substance placed in, on, or about the Project by
Tenant or any Tenant Party; or (d) arising from the failure of Tenant to observe
or perform any of its obligations hereunder. Tenant's indemnification includes,
without limitation, any and all costs incurred by Landlord due to any
investigation of the site or any cleanup or removal of toxic hazardous
substances or restoration mandated by a federal, state or local agency or
political subdivision. If any action or proceeding is brought against any of the
Indemnitees by reason of any such Claim or liability, Tenant, upon notice from
Landlord, covenants to resist and defend at Tenant's sole expense such action or
proceeding by counsel reasonably satisfactory to Landlord. Tenant's obligations
under this Section 12.2 shall not be construed as in any way restricting,
limiting, or modifying Tenant's insurance or other obligations under this Lease.
Further, Tenant's compliance with the insurance requirements and other
obligations of this Lease shall not in any way restrict, limit or modify
Tenant's obligations under this Section 12.2. Tenant's duty to defend Landlord
and the other Indemnitees is separate and independent of Tenant's duty to
indemnify the Indemnitees. The duty to defend includes Claims for which the
Indemnitees may be liable without fault or strictly liable. The duty to defend
applies regardless of whether the issues of negligence, liability, fault,
Default, or other obligation on the part of Tenant, its agents, servants,
contractors, employees, invitees or licensees have been determined. The duty to
defend applies immediately, regardless of whether the Indemnitees have paid any
sums or incurred any detriment arising out of or relating (directly or
indirectly) to any Claims. It is the express intention of the parties that the
Indemnitees be entitled to obtain summary adjudication or summary judgment
regarding Tenant's duty to defend the Indemnitees at any stage of any claim or
suit within the scope of this Section. The provisions of this Section 12.2 shall
survive the expiration or earlier termination of this Lease with respect to any
Claims or liability occurring or arising prior to the expiration or earlier
termination.

 

12.3 Limitation of Liability

 

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None of Landlord's direct or indirect partners, shareholders, members,
affiliates, or agents, nor the officers, directors, members and employees of
Landlord or any such other person or entity (collectively called the "Landlord
Parties") shall be liable for the performance of Landlord's obligations under
this Lease. Tenant shall look solely to Landlord to enforce Landlord's
obligations hereunder and shall not seek any damages against any of the Landlord
Parties. The liability of Landlord for Landlord's obligations under this Lease
shall not exceed and shall be limited to Landlord's interest in the Building and
Tenant shall not look to the property or assets or any of the Landlord Parties
in seeking either to enforce Landlord's obligations under this Lease or to
satisfy a judgment for Landlord's failure to perform such obligations.
Notwithstanding any other provision of this Lease, Landlord shall not be liable
for loss of or damage to artwork, currency, jewelry, bullion, unique or valuable
documents, securities or other valuables, or for other property not in the
nature of ordinary fixtures, furnishings and equipment used in general
administrative and executive office activities and functions. Wherever in this
Lease Tenant (a) releases Landlord from any claim or liability, (b) waives or
limits any right of Tenant to assert any claim against Landlord or to seek
recourse against any property of Landlord or (c) agrees to indemnify Landlord
against any matters, the relevant release, waiver, limitation or indemnity shall
run in favor of and apply to Landlord and each of the Landlord Parties. Further,
regardless of the basis on which Tenant is entitled to claim damages (including
breach, negligence, misrepresentation, or other contract or tort claim), in no
event shall Landlord or the Landlord Parties be liable under any circumstances
for any special, incidental, punitive, indirect or consequential damages or for
injury or damage to, or interference with, Tenant's business, including but not
limited to, loss of profits, loss of rents or other revenues, loss of business
opportunity, loss of goodwill, or loss of use, however occurring.

 

ARTICLE 13
INSURANCE

 

13.1 Insurance to be Carried by Tenant

 

Tenant shall during the Term, at its sole cost and expense, obtain and maintain
the following types of insurance:

 

(a) All Risk coverage insurance, including endorsements for vandalism, malicious
mischief, theft, sprinkler leakage, and earthquake sprinkler leakage, covering
all of Tenant's property, including, but not limited to, furniture, equipment,
additions, fixtures, and anything in the nature of a leasehold improvement in an
amount equal to the full replacement cost of such property without deduction for
depreciation. Landlord and Landlord’s agent shall be named an additional insured
with respect to Landlord's interest in any real property on Tenant's fire and
extended coverage policy;

 

(b) Commercial general liability insurance, including bodily injury and property
damage, personal injury and contractual liability with respect to all claims,
demands or actions by any person or entity, in and arising from, related to, or
connected with the conduct and operation of Tenant's business in the Premises or
Tenant's use of the Premises. Landlord, the Holder of any Superior Interest and
any agent of Landlord designated by Landlord shall be shown as an "additional
insured" on any such policy at Tenant's expense. Such policies shall be written
with no more than a Five Thousand Dollar ($5,000.00) deductible, with coverage
limits of not less than Two Million Dollars ($2,000,000.00) per occurrence and
Five Million Dollars ($5,000,000.00) aggregate;

 

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(c) Worker's Compensation insurance coverage as required by Law, together with
employer's liability insurance coverage with limits not less than One Million
Dollars ($1,000,000.00);

 

(d) Business income insurance and extra expense coverage with coverage amounts
that shall reimburse Tenant for all rental, expense and other payment
obligations of Tenant under this Lease for a period of not less than one year,
including, without limitation, Basic Monthly Rent and adjustments thereto and
Direct Expenses, Taxes and all other costs, fees, charges and payments which
would be borne by or due from Tenant under this Lease if the Premises and
Tenant's business were fully open and operating; and

 

(e) Any other form or forms of insurance (including increases to the limits of
existing coverage) as Landlord or the Holder of any Superior Interest may
reasonably require from time to time in form and in amounts and for insurance
risks against which a prudent tenant would protect itself.

 

Each policy evidencing insurance required to be carried by Tenant pursuant to
this Article 13 shall contain a provision including Geary Market Investment
Company, Ltd. and Cushman & Wakefield of California, Inc. (Landlord's managing
agent), and any other parties in interest designated by Landlord, as an
additional insured(s).

 

13.2 Policy Forms and Delivery

 

All policies shall be taken out from insurers acceptable to Landlord and in a
form satisfactory to Landlord. Tenant agrees that certificates of such insurance
shall be delivered to Landlord as soon as practicable after the placing of the
required insurance, but in no event later than ten (10) days prior to the date
Tenant takes possession of the Premises. All policies shall require at least
thirty (30) days' prior written notice to Landlord by the insurer prior to
termination, cancellation or material change in such insurance.

 

13.3 Use of Proceeds

 

In the event of damage or destruction to the leasehold improvements in the
Premises covered by insurance required to be taken out by Tenant pursuant to
this Article, Tenant shall use the proceeds of such insurance for the purposes
of repairing or restoring such leasehold improvements. In the event of damage or
destruction of the Building entitling the Landlord or Tenant to terminate this
Lease pursuant to Article 15 hereof, then, if the Premises have also been
damaged, Tenant will pay to Landlord that portion of its insurance proceeds
relating to the leasehold improvements in the Premises.

 

13.4 Landlord's Insurance

 

Subject to reimbursement as a Direct Expense in accordance with the provisions
of Article 4 hereof, Landlord shall procure and maintain in effect throughout
the Term property insurance and such other types of insurance as Landlord deems
necessary or advisable to carry. Such coverages shall be in such amounts, from
such companies and on such other terms and conditions as Landlord may from time
to time determine, and Landlord shall have the right, but not the obligation, to
change, cancel, decrease or increase any insurance coverages in respect of the
Building, add additional forms of insurance as Landlord shall deem necessary,
and/or obtain umbrella or other policies covering both the Building and other
assets owned by or associated with Landlord or its affiliates.

 

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13.5 Waiver of Subrogation

 

Landlord and Tenant hereby waive and release any and all rights of recovery
against the other party, including officers, employees, agents and authorized
representatives (whether in contract or tort) of such other party, that arise or
result from any and all loss of or damage to any property of the waiving party
located within or constituting part of the Project, including the Premises
(whether or not the party suffering the loss or damage actually carries any
insurance, recovers under any insurance or self-insures the loss or damage).
Each party shall have their insurance policies issued in such form as to waive
any right of subrogation as might otherwise exist. This mutual waiver is in
addition to any other waiver or release contained in this Lease.

 

ARTICLE 14
TRANSFER OF LANDLORD'S INTEREST

 

In the event of a sale or conveyance by Landlord of the Building, the same shall
operate to release Landlord from any future liability upon any of the
agreements, obligations, covenants or conditions, express or implied, herein
contained in favor of Tenant, and in such event Tenant agrees to look solely to
the successor-in-interest of Landlord in and to this Lease. This Lease shall not
be affected by any such sale or conveyance, however, and Tenant agrees to attorn
to the successor-in-interest of Landlord in and to this Lease, such attornment
to be effective and self-operative without the execution of any further
instruments on the part of any of the parties of this Lease.

 

ARTICLE 15
DAMAGE OR DESTRUCTION

 

15.1 Repair or Termination

 

(a) If the Premises, the Common Areas or the Building are damaged by fire or
other casualty of the type insured by Landlord, in a way that materially
interferes with Tenant's use of the Premises, the damage shall be repaired by
Landlord; provided Landlord reasonably determines that such repairs can be made
within one hundred eighty (180) days after the commencement of repairs without
the payment of overtime or other premiums and that the insurance proceeds are
sufficient to pay the cost of such repairs. Until such repairs are completed or
this Lease is terminated as herein provided, Basic Monthly Rent shall be abated
in proportion to the part of the Premises which is rendered unusable by Tenant
in the conduct of its business as a result of such casualty, but only to the
extent that Landlord is reimbursed from the proceeds of rental interruption
insurance, and provided that there shall be no abatement of Basic Monthly Rent
by reason of any portion of the Premises being unusable for a period of three
(3) days or less. If the damage is due to the act or negligence of Tenant or its
agents, servants, contractors, employees, invitees or licensees there shall be
no abatement of Rent.

 

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(b) Landlord shall not be liable for any failure to make any such repairs to the
extent such failure is caused by accidents, strikes, lockouts or other
conditions beyond the reasonable control of Landlord.

 

(c) If such repairs cannot reasonably be made within such one hundred eighty
(180) days, if such repairs will cost more than the available insurance
proceeds, if such casualty is not of the type insured by Landlord, or if
Landlord has the right to terminate this Lease under Section 15.1(g) below,
Landlord may, at its option, elect to either (i) make such repairs within a
reasonable time and, in such event, this Lease shall continue in effect and the
Basic Monthly Rent shall be abated in the manner provided above, or
(ii) terminate this Lease. Within thirty (30) days after the occurrence of a
casualty, Landlord shall give written notice to Tenant of Landlord's election to
(i) repair the damage caused by such casualty, or (ii) terminate this Lease as
of the date specified in such notice.

 

(d) With respect to any damage and repairs, Tenant waives the provisions of
Section 1932(2), 1933(4), 1941 and 1942 of the California Civil Code or any
successor statute thereto or similar statute hereinafter enacted.

 

(e) All proceeds of any insurance maintained by Tenant or Landlord upon the
Premises (including insurance on Tenant improvements) shall be used to pay for
the repairs to the property covered by said insurance, to the extent that
repairs are made pursuant to this Article.

 

(f) If the Premises, the Building, or the Common Areas are damaged, and such
damage is of the type insured against under the insurance maintained by
Landlord, the cost of repairing said damage up to the amount of the deductible,
or any amount in excess of the coverage under said insurance policy, shall be
included as a part of Direct Expenses.

 

(g) Landlord shall not have any obligation whatsoever to repair, reconstruct, or
restore the Premises or any portion of Common Areas or the Building when the
damage occurs during the last eighteen (18) months of the Term. Tenant may
terminate this Lease if the Premises are damaged, in any material manner, during
the last eighteen (18) months of the Term, unless such damage may be repaired or
the Premises be restored within ninety (90) days after such damage, provided,
within thirty (30) days after such damage occurs, Tenant shall give Landlord
written notice of its election to terminate on a date specified in such notice,
which date shall not be less than thirty (30) nor more than sixty (60) days
after the date of such notice.

 

15.2 Loss of Enjoyment

 

No damages, compensation or claim shall be payable by Landlord to Tenant for any
inconvenience, loss of business or annoyance of Tenant arising from any repair
or restoration of any portion of the Premises or any other portion of the
Building or Common Areas performed by Landlord or its agents. Landlord shall use
commercially reasonable efforts to effect such repair or restoration promptly
and in such manner as not unreasonably to interfere with Tenant's use and
occupancy of the Premises.

 

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15.3 Automatic Termination

 

A total destruction of the Building shall automatically terminate this Lease.

 

ARTICLE 16
DEFAULTS AND REMEDIES

 

16.1 Events of Default

 

Any act or omission of Tenant, in breach of the Lease, which does not constitute
an Event of Default shall be a "Default." The occurrence of any of the following
shall constitute an "Event of Default" and breach of this Lease by Tenant:

 

(a) Any failure by Tenant to pay Rent as and when due, for more than three (3)
days after written notice thereof by Landlord to Tenant; provided, however, that
any such notice shall be in lieu of, and not in addition to, any notice required
under Section 1161, et seq. of the California Code of Civil Procedure or any
successor statute thereto or similar statute hereinafter enacted; or

 

(b) The abandonment of the Premises by Tenant, Landlord acknowledging that
ceasing operations shall not be deemed abandonment unless Tenant ceases
operations for more than sixty (60) days; or

 

(c) Any failure by Tenant to deliver an estoppel certificate under Section 20.11
or an instrument requested by the Holder of a Superior Interest under Article
18, as the case may be, within the time period set forth in such provisions; or

 

(d) Any failure by Tenant to observe and perform any other provision of this
Lease or the Rules and Regulations (as defined in Section 20.14 below) where
such failure continues for thirty (30) days after written notice thereof by
Landlord to Tenant; provided, however, that any such notice shall be in lieu of
and not in addition to, any notice required under Section 1161, et seq. of the
California Code of Civil Procedure or any successor statute thereto or similar
statute hereinafter enacted; or

 

(e) The making by Tenant of any general assignment for the benefit of creditors;
the filing by or against Tenant of a petition to have Tenant adjudged a Chapter
7 debtor or to have debts discharged or of a petition for reorganization or
arrangement under any Law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within ninety (90) days);
the appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within ninety (90) days; or
the attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged within ninety (90) days.

 

16.2 Landlord's Remedies

 

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(a) In the event of an Event of Default by Tenant, as defined herein, then, in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option, but shall not be obligated to do so,
to terminate this Lease and all rights of Tenant hereunder by giving Tenant
written notice of such election to terminate. In any and all instances of Tenant
default, Landlord shall provide written notice to Tenant of Tenant’s default and
shall provide a grace period appropriate to the particular default, and shall
provide a proper cure period, and in the moment that the Tenant materially
begins the process of curing the default, Tenant shall immediately be taken out
of default. This is for any and all instances of Tenant default. In the event
that Landlord shall elect to so terminate this Lease, then Landlord may recover
from Tenant:

 

(i) The worth at the time of award of any unpaid Rent which had been earned at
the time of such termination; plus

 

(ii) The worth at the time of award of the amount by which the unpaid Rent which
would have been earned after termination until the time of award exceeds that
portion of rental loss which Tenant proves could have been reasonably avoided;
plus

 

(iii) The worth at the time of award of the amount by which the unpaid Rent for
the balance of the Term after the time of award exceeds the amount of such
rental loss which Tenant proves reasonably could be avoided; plus

 

(iv) Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligation under this
Lease or which in the ordinary course of things would be likely to result
therefrom including, but not limited to, brokerage commissions and the cost of
restoring said Premises to the condition required under this Lease; plus

 

(v) At Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable Law.

 

(vi) As used in (i) and (ii) above, the "worth at the time of award" shall be
computed by allowing interest at the Interest Rate. As used in (iii) above,
"worth at the time of award" shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank at San Francisco at the time of award,
plus one (1) percentage point.

 

(b) In the event of any such Event of Default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to reenter the Premises
to remove all persons and property from the Premises. Such property may be
removed and stored in a public warehouse or elsewhere at the cost of and for the
account of Tenant.

 

(c) In the event of the abandonment of the Premises by Tenant or in the event of
any Event of Default by Tenant, if Landlord does not elect to terminate this
Lease as provided in this Section, then Landlord may exercise the remedy and
shall be entitled to all the rights provided for in California Civil Code
Section 1951.4 or any successor statute thereto or similar statute hereinafter
enacted.

 

(d) Landlord shall not, by any reentry or other act, be deemed to have accepted
any surrender by Tenant of the Premises or Tenant's interest therein, or be
deemed to have terminated this Lease or Tenant's right to possession of the
Premises or the liability of Tenant to pay Rent thereafter to accrue or Tenant's
liability for damages under any of the provisions hereof, unless Landlord shall
have notified Tenant in writing that it has so elected to terminate this Lease.

 

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(e) Landlord may suspend or discontinue all or any of the services specified in
Article 7 during the continuance of any material and undisputed Event of
Default; and no such suspension or discontinuance will be deemed or construed to
be an eviction, constructive or actual, or an ejection of Tenant.

 

(f) If Landlord reenters the Premises following an Event of Default, Tenant
shall have no claims for damages that may be caused by Landlord's reentering or
removing and storing the property of Tenant, and without limiting Section 12.2
above, Tenant agrees to indemnify, defend, protect and hold Landlord harmless
from all losses, costs, expenses (including attorney's fees and court costs) or
damages occasioned by Landlord. No such entry shall be considered or deemed to
be a forcible entry by Landlord.

 

(g) All rights, options, and remedies of Landlord contained in this Lease shall
be construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law, whether or
not stated in this Lease.

 

(h) Tenant hereby expressly waives any and all rights of redemption granted by
or under any present or future law in the event Tenant is evicted or
dispossessed from the Premises for any cause, or in the event Landlord obtains
possession of the Premises by reason of the commission by Tenant of an Event of
Default or otherwise.

 

16.3 Landlord's Default

 

Landlord shall not be deemed to be in default under this Lease for failure to
perform its obligations unless and until it has failed to perform such
obligations within thirty (30) days after written notice by Tenant to Landlord
specifying the manner in which Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligation is such that more
than thirty (30) days are required for this performance, then Landlord shall not
be deemed to be in default, if it shall commence such performance within such
thirty (30) day period and thereafter diligently prosecutes the same to
completion. In the event of a default by Landlord hereunder, the extent of
Landlord's liability shall be strictly limited to and shall not extend beyond
Landlord's interest in the Building as per Section 12.3 hereof.

 

ARTICLE 17
EMINENT DOMAIN

 

17.1 Taking of Premises

 

If all or any part of the Premises shall be taken by any public or quasi public
authority as a result of the exercise of the power of eminent domain, this Lease
shall terminate as to the part so taken as of the date of taking, and, in the
case of partial taking, either Landlord or Tenant shall have the right to
terminate this Lease as to the balance of the Premises by written notice to the
other within thirty (30) days after the date of such taking; provided, however,
that a condition to the exercise by Landlord or Tenant of such right to
terminate shall be that the portion of the Premises taken shall, in Tenant's and
Landlord's commercially reasonable judgment, be of such extent and nature as
substantially to handicap, impede and impair Tenant's use of the balance of the
Premises. If a material part of the Building or the Common Areas are condemned
or taken, or if substantial alteration or reconstruction of the Building or
Common Areas shall, in Landlord's reasonable opinion, be necessary as a result
of such condemnation or taking, Landlord may terminate this Lease by written
notice to Tenant within thirty (30) days after the date of taking. If a material
part of the Building or the Common Areas are condemned or taken, and Tenant
reasonably determines that it is unable to continue to operate the Premises in
the same manner following such condemnation or taking, Tenant may terminate this
Lease by written notice to Landlord within thirty (30) days after the date of
taking.

 

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17.2 Condemnation Award

 

In the event of any taking, Landlord shall be entitled to any and all
compensation, damages, income, rent, awards, and any interest therein whatsoever
which may be paid or made in connection therewith, and Tenant shall have no
claim against Landlord for the value of any unexpired Term or otherwise. In the
event of a partial taking of the Premises which does not result in a termination
of this Lease, the Basic Monthly Rent thereafter to be paid shall be equitably
reduced by Landlord. Tenant hereby waives sections 1265.110 through 1265.160 of
the California Code of Civil Procedure.

 

17.3 Temporary Taking

 

Without limiting any other provision of this Article 17, if all of the Premises
shall be condemned or taken for governmental occupancy for a period of more than
one year, this Lease shall terminate as of the date of taking and Landlord shall
be entitled to any and all compensation, damages, income, rent and awards in
connection therewith.

 

ARTICLE 18
SUBORDINATION

 

This Lease is subject and subordinate to all declarations of restrictions,
ground leases, mortgages, deeds of trust or other security interests of any kind
now or hereafter encumbering or affecting the Project or any portion thereof, or
on or against Landlords interest or estate therein (collectively, "Superior
Interests"), all without the necessity of any further instrument executed or
delivered by or on the part of Tenant for the purpose of effectuating such
subordination. Notwithstanding the foregoing, Tenant covenants and agrees to
execute and deliver, upon demand, such further instruments evidencing such
subordination of this Lease to any such Superior Interest and the other terms of
this Article 18 as may be required by Landlord or by the current or prospective
holder of such Superior Interest (the "Holder"). Notwithstanding anything to the
contrary in this Article 18 or otherwise in this Lease, the Holder of any
mortgage or deed of trust now or hereafter placed on or against the Building or
the Project, or both ("Lender") may at any time subordinate such mortgage or
deed of trust to this Lease in whole or in part, without any need to obtain
Tenant's consent, by execution of a written document subordinating such mortgage
or deed of trust to this Lease to the extent set forth in such document and
thereupon this Lease shall be deemed prior to such mortgage or deed of trust to
the extent set forth in such document without regard to this Lease, such
mortgage or deed of trust, or their respective dates of execution, delivery
and/or recording. In that event, to the extent set forth in such document, such
mortgage or deed of trust shall have the same rights with respect to this Lease
as would have existed if this Lease had been executed, and a memorandum thereof
recorded prior to the execution, delivery and recording of such mortgage or deed
of trust. In the event of foreclosure or exercise of any power of sale under any
Superior Interest, Tenant, upon demand, shall attorn to the purchaser at any
foreclosure sale or sale pursuant to the exercise of any power of sale in which
event this Lease shall not terminate and Tenant shall automatically be and
become the tenant of the purchaser; provided, no landlord or purchaser at any
foreclosure sale or sale pursuant to the exercise of any power of sale or any
successor thereto shall be liable for any act or omission of any prior landlord
(including Landlord) or be subject to an offsets or defenses which Tenant might
have against any prior landlord (including Landlord), except and to the extent
that any such amount has been assigned, recovered or obtained by the
successor-in-interest to Landlord or be bound by any Rent which Tenant might
have paid in advance to any prior landlord (including Landlord) for a period in
excess of one month or by any Security Deposit or other prepaid charge which
Tenant might have paid in advance to any prior landlord (including Landlord), or
be bound by an agreement or modification of this Lease made after Tenant has
written notice of the interest of such party without the prior written consent
of such party. If requested by Tenant in writing concurrently with the execution
and delivery of this Lease, at Tenant's sole cost and expense, Landlord shall
use commercially reasonable efforts to obtain from its existing Lender, such
Lender's subordination, non-disturbance and attornment agreement (if any);
provided, however, that the failure to obtain such an agreement shall not
subject Landlord to any liability and shall not affect the validity or
effectiveness of or any of Tenant's obligations under this Lease.

 

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ARTICLE 19
SURRENDER OF PREMISES; REMOVAL OF PROPERTY

 

19.1 Tenant's Removal of Property

 

Upon the expiration or termination of the Term, Tenant shall quit and surrender
possession of the Premises to Landlord in as good order, condition and repair as
the same are now or hereafter may be improved by Landlord or Tenant, reasonable
wear and tear and repairs which are Landlord's obligation excepted, and in a
reasonable state of cleanliness. In such event, Tenant shall, without expense to
Landlord, remove from the Premises all debris, rubbish, furniture, equipment,
business and trade fixtures, free-standing cabinet work, moveable partitions and
other articles of personal property owned by Tenant or installed or placed by
Tenant at its expense in the Premises and all similar articles of any other
persons claiming under Tenant. Unless otherwise required to do so by Landlord,
however, Tenant shall not remove any additions or improvements to the Premises,
such as carpet, interior partition walls and doors, "built-ins", shelves,
built-in fixtures or other similar items, it being understood and agreed that
such items are and shall remain the property of Landlord. Tenant shall also
repair, at its expense, all damage resulting from such removal.

 

36

 

 

19.2 Abandoned Property

 

Whenever Landlord shall reenter the Premises as provided in this Lease, any
property of Tenant not removed by Tenant upon the expiration of the Term or
within five (5) business days after a termination by reason of an Event of
Default, as provided in this Lease, shall be considered abandoned, and Landlord
may remove any or all such items and dispose of the same in any manner or store
the same in a public warehouse or elsewhere at the cost of and for the account
of Tenant as per Section 16.2(b) hereof.

 

ARTICLE 20
MISCELLANEOUS

 

20.1 Landlord's Inspection and Maintenance

 

Tenant shall permit Landlord and its agents upon one (1) business day prior
notice (except in the event of an emergency) at all reasonable times to enter
the Premises for the purpose of inspecting the same and/or for the purpose of
protecting the interest therein of Landlord, and to take all required materials
and equipment into the Premises and perform all required work therein, subject
to the terms of this Lease.

 

20.2 Exhibition of Premises

 

Tenant shall permit Landlord and its agents to enter and pass through the
Premises at all reasonable hours to:

 

(a) Post notices of non-responsibility; and

 

(b) Exhibit the Premises to Holders of Superior Interests and to any prospective
Lender, purchaser or lessee of the Building.

 

20.3 Rights Reserved by Landlord

 

Landlord reserves the following rights, exercisable without liability to Tenant
for (a) damage or injury to property, person or business, (b) causing an actual
or constructive eviction from the Premises, or (c) disturbing Tenant's use or
possession of the Premises:

 

(i) To name the Building and to change the name or street address of the
Building.

 

(ii) To install and maintain all signs on the exterior and interior of the
Building.

 

(iii) To have pass keys to the Premises and all doors within the Premises,
excluding Tenant's vaults and safes, which keys shall be safeguarded by Landlord
and available only to Landlord's authorized personnel.

 

(iv) To enter the Premises for the purpose of making inspections, repairs,
alterations, additions or improvements to the Premises or the Building and to
take all steps as may be reasonably necessary or desirable for the safety,
protection, maintenance or preservation of the Premises or the Building or
Landlord's interest therein, or as may be necessary or desirable for the
operation or improvement of the Building or in order to comply with Laws, in all
cases, subject to the terms of this Lease.

 

37

 

 

20.4 Quiet Enjoyment

 

Landlord covenants, in lieu of any implied covenant of quiet possession or quiet
enjoyment, that so long as Tenant is in compliance with the covenants and
conditions set forth in this Lease, Tenant shall have the right to quiet
enjoyment of the Premises without hindrance or interference from Landlord or
those claiming through Landlord, and subject to the covenants and conditions set
forth in this Lease and to the rights of any Holders of Superior Interests.

 

20.5 Force Majeure

 

Any prevention, delay or stoppage of work to be performed by Landlord or Tenant
which is due to strikes, labor disputes, inability to obtain labor, materials
equipment or reasonable substitutes therefore, acts of God, governmental
restrictions or regulations or controls, judicial orders, enemy or hostile
government actions, civil commotion, war or other casualty, or other causes
beyond the reasonable control of the party obligated to perform hereunder, shall
excuse performance of the work by that party for a period equal to the duration
of that prevention, delay or stoppage. Nothing in this Section, however, shall
excuse or delay Tenant's obligation to pay Rent or other charges under this
Lease except as otherwise expressly provided.

 

20.6 Counterparts

 

This Lease may be executed in multiple counterparts, all of which shall
constitute one and the same Lease.

 

20.7 Execution of Lease

 

The submission of this Lease to Tenant shall be for examination purposes only,
and does not and shall not constitute a reservation of or option for Tenant to
lease, or otherwise create any interest of Tenant in the Premises or any other
premises within the Building. Execution of this Lease by Tenant and its return
to Landlord shall not be binding on Landlord notwithstanding any time interval,
until Landlord has in fact signed and delivered this Lease to Tenant.

 

20.8 Further Assurances

 

The parties agree to promptly sign all documents reasonably requested to give
effect to the provision of this Lease.

 

20.9 Lender Protection

 

Tenant agrees to send by certified or registered mail to any Lender whose
address has been furnished to Tenant in writing, a copy of any notice of default
served by Tenant on Landlord. If Landlord fails to cure such default within the
time provided for in this Lease, such Lender shall have an additional thirty
(30) days to cure such default; provided that if such default cannot reasonably
be cured within that thirty (30) day period, then such Lender shall have such
additional time to cure the default as is reasonably necessary under the
circumstances.

 

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20.10 Expenses of Litigation

 

If either party incurs any expense, including reasonable attorneys' fees, in
connection with any action instituted by either party by reason of any dispute
under this Lease or any Default or alleged Default of the other party, the party
prevailing in such action shall be entitled to recover its reasonable attorneys'
fees and expenses from the other party, which shall include fees and expenses of
any appeal, all as fixed by the court. Any such attorneys' fees and other
expenses incurred by either party in enforcing a judgment in its favor under
this Lease shall be recoverable separately from and in addition to any other
amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Lease and to survive
and not be merged into any such judgment. In addition, if Landlord utilizes the
services of an attorney for the purpose of collecting any Rent due and unpaid by
Tenant or in connection with any other breach of this Lease by Tenant, Tenant
agrees to pay Landlord actual attorneys' fees for such services, regardless of
the fact that no legal action may be commenced or filed by Landlord.

 

20.11 Tenant's Certificates

 

Tenant agrees at any time from time to time, within twenty (20) days of receipt
of written request, to execute, acknowledge and deliver to Landlord a statement
in writing certifying: (a) that this Lease is unmodified and in full force and
effect or if there have been modifications, that this Lease is in full force and
effect as modified and stating the modifications; (b) the Term Commencement
Date, Rent Commencement Date and Term Expiration Date; (c) the dates to which
the Basic Monthly Rent and Rent hereunder have been paid in advance, if any; (d)
the amount of the current Basic Monthly Rent; (e) as to any actual or proposed
Transfers; (f) whether or not, to the best knowledge of Tenant, Landlord is in
default in the performance of any covenant, agreement or condition contained in
this Lease, and, if so, specifying each such default of which it may have
knowledge; (g) the amount of the Security Deposit, if any; and (h) any other
information reasonably requested. Any such statement delivered pursuant to this
Section may be relied upon by Landlord, any prospective purchaser of the
Building, any current or prospective Lender, any other current or prospective
Holder of a Superior Interest, and any other third parties.

 

20.12 Holding Over

 

Any holding over after the expiration or termination of the Term without the
consent of Landlord shall be construed to be a tenancy at sufferance upon the
same provisions and conditions as otherwise set forth herein, except that the
Basic Monthly Rent shall be an amount equal to one hundred percent (100%) in
month 1, one hundred and twenty five percent (125%) in month 2, and one hundred
and fifty percent (150%) month 3 and thereafter of the Basic Monthly Rent
payable (without reduction) immediately prior to such holding over. Acceptance
by Landlord of Rent after the expiration or termination of this Lease shall not
constitute a consent by Landlord to any such tenancy from month to month or
result in any other tenancy or any renewal of the Term. Tenant acknowledges that
if Tenant holds over without Landlord's consent, such holding over may
compromise or otherwise affect Landlord's ability to enter into or perform under
new leases with prospective tenants regarding the Premises. Therefore, if Tenant
fails to surrender the Premises upon the expiration or other termination of this
Lease, then, in addition to any other liabilities to Landlord accruing
therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless
from all Claims resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender and any lost profits to Landlord resulting
therefrom. The provisions of this Section 20.12 are in addition to, and do not
affect, Landlord's right to re-entry or other rights hereunder or provided by
law.

 

39

 

 

20.13 Notices

 

All notices, which Landlord or Tenant may be required or may desire to serve on
the other shall be in writing and shall be served by personal delivery,
overnight delivery or by mailing the same by registered or certified mail,
postage prepaid, addressed as specified in Item 1 of the Basic Lease Information
or addressed to such other address or addresses as either Landlord or Tenant may
from time to time designate to the other in writing in accordance with this
Section. Any notice so given by mail as provided above shall be deemed
effectively given forty-eight (48) hours after deposit in the mail as provided
above, unless received earlier by the addressee. Any notice served by personal
delivery shall be deemed effectively given when delivered at the party's
address. Any notice by overnight delivery shall be deemed effectively given on
the next business day.

 

20.14 Rules and Regulations

 

Tenant agrees to abide by and comply with the Rules and Regulations attached
hereto as Exhibit B (the "Rules and Regulations") and incorporated herein by
this reference. Landlord shall not be liable to Tenant for any violation of such
Rules and Regulations by any other tenant or occupant of the Building. In the
event of any inconsistencies between this Lease and the Rules and Regulations,
the terms of this Lease shall prevail. Landlord shall have the right upon
written notice, from time to time, to amend, modify and add to the Rules and
Regulations.

 

20.15 Waiver of Jury Trial; Venue and Jurisdiction

 

To the extent permitted by Law, each party hereto shall not seek a jury trial,
hereby waives trial by jury, and hereby further waives any objection to venue in
the City and County of San Francisco, and agrees and consents to personal
jurisdiction of the courts of the State of California, in any action or
proceeding or counterclaim brought by any party hereto against the other on any
matter whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises,
or any claim of injury or damage, or the enforcement of any remedy under any
statute, emergency or otherwise, whether any of the foregoing is based on this
Lease or on tort law. No party will seek to consolidate any such action in which
a jury has been waived with any other action in which a jury trial cannot or has
not been waived. It is the intention of the parties that these provisions shall
be subject to no exceptions. By execution of this Lease, the parties agree that
this provision may be filed by any party hereto with the clerk or judge before
whom any action is instituted, which filing shall constitute the written consent
to a waiver of jury trial pursuant to and in accordance with Section 631 of the
California Code of Civil Procedure. No party has in any way agreed with or
represented to any other party that the provisions of this Section 20.15 will
not be fully enforced in all instances. The provisions of this Section 20.15
shall survive the expiration or earlier termination of this Lease.

 

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20.16 Governing Laws

 

This Lease shall be governed by and construed in accordance with the laws of the
State of California.

 

20.17 Heading and Titles

 

The marginal titles to the Articles of this Lease are inserted for convenience
of reference only and shall have no effect upon the construction or
interpretation of any part hereof.

 

20.18 Heirs and Assigns

 

Subject to the limitations on Transfers, this Lease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns.

 

20.19 Time of Essence

 

Time is of the essence with respect to the performance of every provision of
this Lease.

 

20.20 Severability

 

If any condition or provision of this Lease shall be held invalid or
unenforceable to any extent under any applicable Law or by any court of
competent jurisdiction, the remainder of this Lease shall be affected thereby,
and each condition and provision of this Lease shall be valid and enforceable to
the fullest extent permitted by law.

 

20.21 Authority

 

Tenant represents and warrants that each individual executing this Lease on
behalf of Tenant is duly authorized to execute and deliver this Lease on behalf
of Tenant and that this Lease is binding upon Tenant in accordance with its
terms.

 

20.22 Brokers

 

Landlord shall be solely responsible for the payment of brokerage commissions to
the entity or entities specified in Item 8 of the Basic Lease Information. If
Tenant has dealt with any other real estate broker or agent or any other person
in connection with the leasing or renting of space in the Building, Tenant shall
be solely responsible for the payment of any fee due such person, and Tenant
indemnifies, defends, protects and holds Landlord harmless from and against all
Claims (including attorney's fees and court costs) in respect thereto.

 

41

 

 

20.23 No Light, Air or View Easement

 

Any diminution or shutting off of light, air or view by any structure which may
be erected on lands adjacent to the Building shall not in any way affect this
Lease or impose any liability on Landlord.

 

20.24 Entire Agreement

 

This Lease, along with any Exhibits affixed hereto, constitutes the entire and
exclusive agreement between Landlord and Tenant relative to the Premises.

 

20.25 Recording

 

Neither Landlord nor Tenant shall record this Lease.

 

20.26 Number and Genders; Joint and Several Liability

 

The words "Landlord" and "Tenant", as used herein, shall include the plural as
well as the singular. Words used in the masculine gender include the feminine
and neuter. If there be more than one Landlord or Tenant, then the obligations
hereunder imposed upon Landlord and Tenant shall be joint and several.

 

20.27 Waiver

 

The failure of Landlord or Tenant to exercise its rights in connection with any
breach or violation of any term, covenant, or condition herein contained, shall
not be deemed to be a waiver of such term, covenant or condition or any
subsequent breach of the same or any other term, covenant or condition herein
contained. The subsequent acceptances 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.

 

20.28 No Merger

 

The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Landlord, terminate any or all existing subleases or subtenancies, or operate as
an assignment to Landlord of any or all of such subleases or subtenancies.

 

20.29 No Representations or Warranties

 

Neither Landlord nor Landlord's agents or attorneys have made any
representations or warranties with respect to the Premises, the Building or this
Lease, except as expressly set forth herein, and no easements or licenses are or
shall be acquired by Tenant by implication or otherwise.

 

42

 

 

20.30 Amendments

 

This Lease may not be altered, changed, or amended except by an instrument
signed by both parties hereto.

 

20.31 Exhibits

 

Each of the following Exhibits and Addenda are attached hereto and incorporated
herein by this reference:

 

Exhibit A – Legal Description of Real Property
Exhibit B – Rules and Regulations
Exhibit C – Breakdown of Operating Expenses

 

 

IN WITNESS WHEREOF the parties hereto have executed this Lease on the day and
year first above written.

 

  "LANDLORD"             Geary-Market Investment Company, Ltd.,     a California
corporation                     By:               Its:               "TENANT"  
                  a                       Name:               Its:    

 

 

 

43

 

 

EXHIBIT A

 

LEGAL DESCRIPTION OF REAL PROPERTY

 

PARCEL A:

 

Beginning at a point on the northwesterly line of Market Street, distant thereon
139 feet and 5/8 of an inch southwesterly from the point formed by the
intersection of the northwesterly line of Market Street with the westerly line
of Kearny Street; running thence southwesterly along said line of Market Street
50 feet; thence at a right angel (to the said northwesterly line of Market
Street) northeasterly to a point formed by the intersection of a line drawn
northwesterly and at a right angle to the northwesterly line of Market Street
from a point distant thereon 189 feet and 5/8 of an inch southwesterly from the
westerly line of Kearny Street, and a line drawn at right angles southerly to
the southerly line of Geary Street at a point on the southerly line of Geary
Street, distant thereon 184 feet and 5 inches westerly from the westerly line of
Kearny Street; thence northerly from the point of intersection of said two lines
to a point situate on the southerly line of Geary Street, distant thereon 184
feet and 5 inches westerly from the westerly line of Kearny Street, meeting said
southerly line of Geary Street aforesaid at a right angle; thence easterly along
the southerly line of Geary Street 40 feet; thence at a right angle (to said
southerly line of Geary Street), southerly 65 feet and 6½ inches; thence
southeasterly 54 feet, more or less, to the northwesterly line of Market Street
and the point of beginning.

 

Being a portion of 50 Vara Block No. 98.

 

PARCEL B:

 

Beginning at a point on the northwesterly line of Market Street, distant thereon
189.052 feet southwesterly from the westerly line of Kearny Street; running
thence southwesterly along said line of Market Street 193.396 feet to a point
distant thereon 40 feet northeasterly from the northerly line of O'Farrell
Street; thence deflecting 112°36'33" to the right from the southwesterly bearing
of said line of Market Street and running northerly 99.229 feet to a point which
is perpendicularly distant 50 feet easterly from the easterly line of Grant
Avenue measured from a point distant thereon 120 feet northerly from the
northerly line of O'Farrell Street; thence deflecting 67°29'02" to the right
from the northerly bearing of the preceding course and running northeasterly
36.901 feet; thence deflecting 54°19'44" to the left and running northerly
parallel with said line of Grant Avenue 40.880 feet; thence deflecting 54°07'23"
to the right and running northeasterly 24.708 feet to a line drawn southerly at
a right angle to the southerly line of Geary Street from a point distant thereon
100 feet easterly from the easterly line of Grant Avenue; thence deflecting
54°07'23" to the left and running northerly along the last said line so drawn
78.120 feet to the said southerly line of Geary Street; thereon 184.417 feet
westerly from the westerly line of Kearny Street; thence southerly at a right
angle to said line of Geary Street 95.531 feet to the line drawn northwesterly
from the point of beginning at a right angle to said line of Market Street;
thence deflecting 35°45' 51" to the left from the southerly bearing of the
preceding course and running southeasterly 53.063 feet to the point of
beginning.

 

Being a portion of 50 Vara Block No. 98.

Assessor's parcel No: Lots 4 and 9, Block 31

 

1

 

DEPICTION OF PREMISES

 

[To Be Inserted]

 

2

 

 

EXHIBIT B

 

RULES AND REGULATIONS

 

1. The sidewalks, halls, passages, exits, vestibules, entrances, public areas,
elevators and stairways of the Building shall not be obstructed by any of the
tenants or used by them for any purpose other than ingress to and egress from
their respective Premises. The halls, passages, exits, entrances, elevators and
stairways are not for the general public, and Landlord shall, in all cases,
retain the right to control and prevent access thereto by all persons whose
presence in the judgment of Landlord would be prejudicial to the safety,
character, reputation and interests of the Building and its tenants, provided
that nothing herein contained shall be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course of its
business, unless such persons are engaged in illegal activities. No tenant and
no employee or invitee of any tenant shall go upon the roof of the Building. If
the Premises are situated on the ground floor with direct access to the street,
then Tenant shall, at Tenant's expense, keep the sidewalks and curbs directly in
front of the Premises clean and free from dirt, refuse and other obstructions.

 

2. No sign, placard, picture, name, advertisement, inside or outside the
Building, or notice visible from the exterior of any tenant's Premises shall be
inscribed, painted, affixed or otherwise displayed by any tenant on any part of
the Building without the prior written consent of Landlord. Landlord shall have
the right to remove, at tenant's expense and without notice or liability, any
sign installed or displayed in violation of this rule. All approved signs or
lettering on doors, windows and walls shall be printed, painted, affixed or
inscribed at the expense of Tenant by a person or entity selected by Landlord,
using materials of Landlord's choice and in a style and format approved by
Landlord. Written material visible from outside the Building will not be
permitted. Landlord shall have the right to remove any such written material, at
Tenant's expense and without notice or liability. Landlord shall place Tenant's
name on the directory in the lobby of the Building and on the individual floor
directory, if available. Landlord reserves the right to restrict the amount of
directory space utilized by Tenant. Tenant shall not have the right to have
additional names placed on the directory without Landlord's prior written
consent. If such consent is given, the addition of such names shall be at
Tenant's expense. The directory of the Premises will be provided for the display
of the name and location of Tenants and a reasonable number of the principal
officers and employees of Tenants, and Landlord reserves the right to exclude
any other names therefrom. Any additional name that Tenant shall desire to place
upon the directory must first be approved by Landlord and, if so approved, a
charge will be made for each such name.

 

3. The Premises shall not be used for the storage of merchandise held for sale
to the general public, for lodging or sleeping. No cooking shall be done or
permitted by any tenant on the Premises, except the use by such tenant of
Underwriter's Laboratory approved microwave oven or equipment for brewing
coffee, hot chocolate and other similar beverages which shall be permitted,
provided that the power required by such equipment shall not exceed that amount
which can be provided by a 30-amp circuit and that such use is in accordance
with all applicable federal, state and city laws, codes, ordinances, rules and
regulations. Repair and maintenance of garbage disposals, dishwashers, ice
makers and other similar equipment shall be at Tenant's expense.

 

1

 

 

4. No Tenant shall employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises, unless otherwise agreed to by
Landlord in writing. Except with the written consent of the Landlord, no person
or persons other than those approved by Landlord shall be permitted to enter the
Building by reason of such Tenant's carelessness or indifference in the
preservation of good order and cleanliness. Janitorial services will not be
furnished on nights when Tenant's premises are occupied after 7:00 p.m., unless
Landlord and Tenant agree in writing that such service is to be provided at a
later hour for specifically designated rooms. Landlord shall not be responsible
to Tenant for any loss or damage to property on its Premises, however occurring.

 

5. Landlord will furnish each tenant with two keys to each door lock in its
Premises free of charge. Landlord may make a reasonable charge for any
additional keys. No Tenant shall have keys made except by Landlord's designated
locksmith. No tenant shall alter any lock or install a new or additional lock or
bolts on any door of its Premises without the prior written consent of Landlord.
Tenant shall in each case furnish Landlord with a key for any such lock. Each
tenant, upon the termination of its tenancy, shall deliver to Landlord all keys
to doors in the Building which shall have been furnished to such tenant. Tenant
shall not be reimbursed for excess keys returned at termination of Lease term.
In the event of the loss of any key furnished to Tenant by Landlord, Tenant
shall pay to Landlord the cost of replacing the same of changing the lock or
locks opened by such lost key if Landlord shall deem it necessary to make such a
change. All locks and bolts installed in the Premises excluding Tenant's vaults
and safes or specialty security areas (which shall be designated by Tenant in a
written notice to Landlord) shall be keyed to the Building master key system.

 

6. The carrying in or out of freight, furniture or bulky material of any
description must take place during such hours as Landlord may from time to time
reasonably determine, which shall not include peak hours of elevator usage.
Landlord shall designate appropriate entrances and a "freight" elevator for
deliveries or other transportation of goods to or from the Premises and Tenant
shall not use any other entrances or elevators for such purposes. The
installation and moving of such freight, furniture or bulky material shall be
made upon forty-eight (48) business hours previous notice to the Building
Manager and the persons employed by Tenant for such work must be reasonably
acceptable to Landlord. Certificates of Insurance from Tenant’s movers, with
terms acceptable to Landlord, must be provided to the Building Office in advance
of the move. Tenant may, subject to the provisions of the immediately preceding
sentence, move freight, furniture, bulky matter and other material into or out
of the Premises after Building hours; provided Tenant pays the additional costs,
if any, incurred by Landlord for elevator operators, security guards,
maintenance supervision and other expenses arising by reason of such move by
Tenant. If, at least two days prior to such move, Landlord requests Tenant to
deposit with Landlord, as security for Tenant's obligation to pay such
additional costs, a sum which Landlord reasonably estimates to be the amount of
such additional costs, then Tenant shall deposit such sum with Landlord as
security for such costs. The persons employed by Tenant to move equipment or
other items in and out of the Building must be acceptable to Landlord. The
floors, corners and walls of elevators and corridors used for the moving of
equipment or other items in and out of the Building must be adequately covered,
padded and protected, and Landlord may provide such padding and protection at
Tenant's expense, if Landlord determines that such measures undertaken by Tenant
or Tenant's movers are inadequate. Landlord shall have the right to prescribe
the weight, size and position of all equipment, materials, furniture or other
property brought into the Building and placed in the Premises. Heavy objects, as
considered necessary by Landlord, shall stand on wood strips of such thickness
as is necessary to properly distribute the weight. Landlord will not be
responsible for loss of or damage to any such property from any cause, and all
damage done to the Building by moving or maintaining such property shall be
repaired at the expense of Tenant. Business machines and other equipment shall
be placed and maintained by Tenant at Tenant's expense in settings sufficient,
in Landlord's reasonable judgment, to absorb and prevent unreasonable vibration
and prevent noise and annoyance.

 

2

 

 

7. No tenant shall use or keep in the Premises or the Building any kerosene,
gasoline or flammable or combustible fluid or any other chemical substance or
material other than limited quantities thereof reasonably necessary for the
operation or maintenance of office equipment; or, without Landlord's prior
written approval, use any method of heating or air conditioning, including,
without limitation, portable floor heaters and fans, other than those supplied
by Landlord. No tenant shall use or keep or permit to be used or kept any
hazardous or toxic materials or any foul or noxious gas or substance in the
Premises or permit or suffer the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by
reason of noise, odors, vibrations, or interfere in any way with other tenants
or those having business therein.

 

8. Landlord reserves the right to select the name of the Building and to make
such change or changes of name as it may deem appropriate from time to time and
Tenant shall not refer to the Building by any name other than: (a) the name
selected by Landlord (as same may be changed from time to time) or (b) the
postal address approved by the United States Post Office. Tenant shall not use
the name of the Building in any respect other than as an address of its
operation in the Building without the prior written consent of Landlord.

 

9. In the case of invasion, mob, riot, public excitement or other circumstances
rendering such action advisable in Landlord's opinion, Landlord reserves the
right to prevent access to the building during the continuance of the same by
such action as Landlord may deem appropriate including closing doors. Landlord
also reserves the right to exclude or expel from the Building any person who, in
Landlord's judgment, is intoxicated or under the influence of liquor or drugs or
who is in violation of any of the Rules and Regulations of the Building. Tenants
serving alcohol to the public for specials functions, parties, or events must
carry a “Liquor Liability Endorsement” with their Insurance policy and provide
proof of Insurance coverage to Landlord.

 

10. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, hangings or decorations shall be attached to, hung or placed in, or
used in connection with any window of the Building without the prior written
consent of Landlord. No files, cabinets, boxes, containers or similar items
shall be placed in, against or adjacent to any window of the Building so as to
be visible from the outside of the Building. Tenant shall cooperate fully with
Landlord in obtaining maximum effectiveness of the cooling system of the
Building by closing draperies and other window coverings when the sun's rays
fall upon windows of the Premises. Tenant shall not obstruct, alter or in any
way impair the efficient operation of Landlord's heating, ventilating, air
conditioning, electrical, fire, safety or lighting systems, nor shall Tenant
tamper with or change the setting of any thermostat or temperature control
valves in the Building other than room thermostats installed for Tenant's use.
Landlord reserves the right to install solar film on the windows of the Building
to aid the efficiency of the HVAC system and to reduce energy costs. Tenant
shall not remove solar film from any window. Tenant shall also cooperate with
Landlord to comply with any governmental energy-saving rules, laws or
regulations. No bottles, parcels or other articles may be placed in the halls or
any other part of the Building, nor shall any article be thrown out of the doors
or windows of the Premises.

 

3

 

 

11. No tenant shall obtain for use in the Premises ice, drinking water, food,
beverage, towel, barbering, shoe polishing, or vending machines, or other
similar services except at such reasonable hours and under such reasonable
regulations as may be fixed by Landlord. If the Premises or any part of the
Building become infested with vermin as a result of Tenant's use, Tenant shall
reimburse Landlord for the expense of extermination.

 

12. Each tenant shall see the doors of its Premises are closed and locked, that
all water faucets, water apparatus, equipment, lights and other utilities are
shut off before such tenant or its employees leave the Premises, so as to
prevent waste or damage; and for any default or carelessness in this regard.
Tenant shall keep Suite entry doors (fire doors) closed at all times unless an
electronic hold open devise connected to the main Fire Safety System is
installed (at Tenant’s cost). In no event shall Tenant prop open their entry
fire door.

 

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

 

14. No tenant shall install any radio or television antenna, loud speaker or
other device on the roof or the exterior walls of the Building without the prior
written consent of Landlord. No awnings, air conditioning units or other
projections shall be attached to the outside walls or window sills of the
Building or otherwise project from the Building, without the prior written
consent of Landlord.

 

15. Tenant shall immediately, upon request from Landlord (which request need not
be in writing), reduce its lighting in the Premises for temporary periods
designated by Landlord, when required in Landlord's judgment to prevent
overloads of the mechanical or electrical systems of the Premises.

 

16. There shall not be used in any space or public halls of the Building, either
by any tenant or any others, any hand trucks except those equipped with rubber
tires and side guards or such other material-handling equipment as Landlord may
approve. No other vehicle of any kind except wheelchairs or other similar
devices shall be brought by any tenant into the Building or kept in or about its
Premises.

 

17. Each tenant shall store all its trash, garbage and recyclable materials
within the Premises. No material shall be placed in corridors, hallways or
elevator lobbies or in the trash boxes or receptacles of such material is of
such nature that it may not be disposed of in the ordinary and customary manner
of removing and disposing of trash and garbage in the city where the Building is
located without being in violation of any law or ordinance governing such
disposal. All garbage and refuse removal shall be made only through entry ways
and elevators provided for such purposes and at such times as Landlord shall
designate.

 

4

 

 

18. Canvassing, peddling, soliciting and distribution of handbills or other
written materials in the Building are prohibited and each tenant shall cooperate
to prevent the same.

 

19. Tenant and its authorized representatives and invitees shall not make or
permit any noise in the Building that is annoying, unpleasant or distasteful,
interfering in any way with other tenants or those having business with them, or
bring into or keep within the Building or common areas, any animal (except for
service animals), bird, bicycle or other vehicle except wheelchairs or other
similar devices or such vehicles as are permitted to park in parking areas, in
accordance with these Rules and Regulations.

 

20. Tenant shall not make, drive nails, screw or drill into the partitions,
woodwork or plaster or in any way deface the Premises or any part thereof,
except to install normal wall hangings. Tenant shall repair any damage resulting
from non-compliance with this rule.

 

21. Landlord shall direct licensed electricians as to where and how telephone
and electrical wires are to be introduced. If Landlord's consent is given for
such installation, Tenant and/or its electrician shall be solely responsible, at
Tenant's sole expense, for the patching, fireproofing or other building
integrity installation as shall be deemed necessary by Landlord. No cutting or
boring for wires shall be allowed without Landlord's consent. The location of
telephones, call boxes and office equipment affixed to the Premises shall be
subject to Landlord's approval. No equipment may be installed in the Building
Main Telephone Closet or Floor Telephone Closets. Tenant shall not lay linoleum
tile, carpet or other floor covering to the floor of the Premises, except as
approved by Landlord.

 

22. The requirements of Tenant will be attended to only upon appropriate
application by an authorized individual to the office of the Building manager by
telephone or in person.

 

23. Employees of Landlord shall not perform any work or do anything outside of
their regular duties unless under special instructions from Landlord.

 

24. Tenant shall comply with all safety, maximum occupancy and fire protection
and evacuation procedures and regulations established by Landlord or any
governmental agency and, upon Landlord’s request, shall post appropriate signs
and placards regarding such safety, maximum occupancy and fire protection and
evacuation procedures and regulations.

 

25. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors and other means of
entry to the Premises closed and locked when the Premises are unattended.

 

5

 

 

26. 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
tenants, nor prevent Landlord from thereafter enforcing any such rules and
regulations against any or all of the tenants of the Building.

 

27. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Building.

 

28. Landlord reserves the right to make such other reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for the safety,
care and cleanliness of the Building, and for the preservation of the order
therein.

 

29. Landlord shall not be responsible to Tenant or to any other person for the
non-observance or violation of the Rules and Regulations by any other tenant or
other person. Tenant shall be deemed to have read these rules and have agreed to
abide by them as a condition to its occupancy of the space leased.

 

30. The "Ordinary Business Hours" of the Building shall be 8:00 a.m. to 5:30
p.m. Monday through Friday (Saturday, Sunday and holidays excluded).

 

31. Use of aquariums, water beds or other water containing vessels in excess of
one gallon, aside from UL listed bottled water dispensers, is prohibited without
the prior written consent of Landlord.

 

 

6

 

 

EXHIBIT C

 

Breakdown of Building Operating Expenses

 

These expenses relate of the entire building, the building common areas, and
Tenant repairs and maintenance for building standard services provided. Specific
services above building standard shall be billed directly to Tenants as an
additional charge on a monthly basis.

 

Taxes and Operating expenses relating to the entire building:

 

Cleaning exterior

Exterior painting – graffiti removal

R&M Payroll

R&M Fire Safety

Security

Admin – Professional fees

Admin – Supplies and Materials

Admin – Association Dues

Admin - Miscellaneous

Admin – Payroll

Admin – Telephone

Admin – Management Fees

Utilities – Water

Insurance

Property Taxes

Building Office Rent

 

Operating expenses relating to Office Tenants only:

 

Cleaning/Janitorial

R&M Elevator

R&M HVAC

R&M Electrical

R&M Structural/Roof

R&M Plumbing

R&M Other Building Maintenance

R&M Waste Removal

R&M General Supplies

Lobby Plants

Utilities – Electrical

Utilities – Gas

Amortized Capital Improvements to Common Areas

 

1

 

 

TABLE OF CONTENTS

 

Page

 

BASIC LEASE INFORMATION 1     ARTICLE 1 PREMISES 3     1.1 Premises 3 1.2
Rentable Square Footage 3 1.3 Common Areas 3       ARTICLE 2 TERM 3     2.1 Term
Commencement Date 3 2.2 Delivery and Acceptance of Premises 4 [2.3 Option Term 4
      ARTICLE 3 RENT 6     3.1 Basic Monthly Rent 6 3.2 Interest on Past Due
Amounts 7 3.3 Late Fee 7 3.4 Rent 7 3.5 Security Deposit 7 [3.6 Lease Guaranty 8
      ARTICLE 4 ADDITIONAL RENT 8     4.1 Increased Direct Expenses 8 4.2
Definition of Direct Expenses 9 4.3 Statements 10       ARTICLE 5 TAX ADJUSTMENT
11     5.1 Increased Taxes 11 5.2 Definition of Taxes 12

 

i

 

 

5.3 Additional Taxes 12       ARTICLE 6 USE 12     6.1 General 12 6.2 No
Nuisance or Waste 13 6.3 Compliance With Laws 13 6.4 Alterations to Common Areas
14 6.5 Toxic Substances 15 6.6 Load and Equipment, Notice of Defects 15 6.7
Signage 15       ARTICLE 7 SERVICES AND UTILITIES 15     7.1 General 15 7.2
Supplementary Services 17 7.3 Interruption of Access, Use or Services 17      
ARTICLE 8 SUITABILITY OF PREMISES 17     ARTICLE 9 ALTERATIONS 17     9.1
General 17 9.2 Notice 19 9.3 Labor Relations 19 9.4 Indemnity 19 9.5 Future
Construction Work 19       ARTICLE 10 REPAIRS 20     ARTICLE 11 ASSIGNMENT AND
SUBLETTING 21     11.1 Restrictions on Transfers 21 11.2 Notice of Proposed
Transfer 21 11.3 Reasonable conditions 21

 

ii

 

 

11.4 Transfer Premium 23 11.5 Recapture 23 11.6 Terms of Consent 24 11.7
Subsequent Consents 24 11.8 Certain Transfers 25 11.9 Tenant Remedies 25 11.10
Bankruptcy 25 11.11 Permitted Transfers 26       ARTICLE 12 NON-LIABILITY AND
INDEMNIFICATION 27     12.1 Waiver of Liability 27 12.2 Indemnity 27 12.3
Limitation of Liability 28       ARTICLE 13 INSURANCE 29     13.1 Insurance to
be Carried by Tenant 29 13.2 Policy Forms and Delivery 30 13.3 Use of Proceeds
30 13.4 Landlord's Insurance 30 13.5 Waiver of Subrogation 30       ARTICLE 14
TRANSFER OF LANDLORD'S INTEREST 31     ARTICLE 15 DAMAGE OR DESTRUCTION 31    
15.1 Repair or Termination 31 15.2 Loss of Enjoyment 32 15.3 Automatic
Termination 32       ARTICLE 16 DEFAULTS AND REMEDIES 32     16.1 Events of
Default 32

 

iii

 

 

16.2 Landlord's Remedies 33 16.3 Landlord's Default 35       ARTICLE 17 EMINENT
DOMAIN 35     17.1 Taking of Premises 35 17.2 Condemnation Award 35 17.3
Temporary Taking 36       ARTICLE 18 SUBORDINATION 36     ARTICLE 19 SURRENDER
OF PREMISES; REMOVAL OF PROPERTY 37     19.1 Tenant's Removal of Property 37
19.2 Abandoned Property 37       ARTICLE 20 MISCELLANEOUS 37     20.1 Landlord's
Inspection and Maintenance 37 20.2 Exhibition of Premises 38 20.3 Rights
Reserved by Landlord 38 20.4 Quiet Enjoyment 38 20.5 Force Majeure 38 20.6
Counterparts 39 20.7 Execution of Lease 39 20.8 Further Assurances 39 20.9
Lender Protection 39 20.10 Expenses of Litigation 39 20.11 Tenant's Certificates
40 20.12 Holding Over 40 20.13 Notices 40 20.14 Rules and Regulations 41 20.15
Waiver of Jury Trial; Venue and Jurisdiction 41 20.16 Governing Laws 41 20.17
Heading and Titles 41 20.18 Heirs and Assigns 41 20.19 Time of Essence 42 20.20
Severability 42 20.21 Authority 42 20.22 Brokers 42 20.23 No Light, Air or View
Easement 42 20.24 Entire Agreement 42 20.25 Recording 42 20.26 Number and
Genders; Joint and Several Liability 42 20.27 Waiver 43 20.28 No Merger 43 20.29
No Representations or Warranties 43 20.30 Amendments 43 20.31 Exhibits 43      

 

iv