Exhibit 10.1

 

 

LEASE

 

 

BETWEEN

 

 

PATHLINE LLC

 

 

AND

 

 

PROOFPOINT, INC.

 

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LEASE

 

THIS LEASE is made as of October 23, 2018, by and between PATHLINE LLC, a
Delaware limited liability company, hereafter called “Landlord,” and PROOFPOINT,
INC., a Delaware corporation, hereafter called “Tenant.”

 

ARTICLE 1.  BASIC LEASE PROVISIONS

 

Each reference in this Lease to the “Basic Lease Provisions” shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.

 

1.                   Tenant’s Trade Name:

N/A

 

 

2.                   Premises:

The Premises are more particularly described in Section 2.1

 

 

Addresses of Buildings:

625 N. Mary Avenue, Sunnyvale, CA 94085 (“Mary Building”)

 

925 W. Maude, Sunnyvale, CA 94085 (“Maude Building”)

 

 

The Mary Building and the Maude Building are collectively referred to herein as
the “Building.”

 

 

Project Description:

Pathline Park Phase III (as shown on Exhibit Y to this Lease)

 

 

 

The Project is within the Pathline Park master project (the “Master Project”)

 

3.                    Use of Premises:  General office, administration, research
and development and uses incidental to the foregoing and for no other use.

 

4.                   Commencement Date:  See Section 3.2

 

5.                    Lease Term:  127 months, plus such additional days as may
be required to cause this Lease to expire on the final day of the calendar
month.

 

6.                   Basic Rent:

 

Months of Term
or Period

 

Monthly Rate Per Rentable
Square Foot

 

Monthly Basic Rent
(rounded to the nearest
dollar)

 

1 to 7

 

$

4.75

 

$

1,151,400.00

*

8 to 12

 

$

4.75

 

$

1,151,400.00

 

13 to 24

 

$

4.89

 

$

1,185,336.00

 

25 to 36

 

$

5.04

 

$

1,221,696.00

 

37 to 48

 

$

5.19

 

$

1,258,056.00

 

49 to 60

 

$

5.35

 

$

1,296,840.00

 

61 to 72

 

$

5.51

 

$

1,335,624.00

 

73 to 84

 

$

5.68

 

$

1,376,832.00

 

85 to 96

 

$

5.85

 

$

1,418,040.00

 

97 to 108

 

$

6.03

 

$

1,461,672.00

 

109 to 120

 

$

6.21

 

$

1,505,304.00

 

121 to 127

 

$

6.40

 

$

1,551,360.00

 

 

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*Notwithstanding the above schedule of Basic Rent to the contrary, as long as
Tenant is not in Default (as defined in Section 14.1 below) under this Lease,
Tenant shall be entitled to an abatement of 7 full calendar months of Basic Rent
in the aggregate amount of $8,059,800.00 (i.e. $1,151,400.00 per month) (the
“Abated Basic Rent”) for the first 7 full calendar months of the Term (the
“Abatement Period”).  In the event Tenant Defaults at any time during the Term
and this Lease is terminated as a result thereof, all unamortized Abated Basic
Rent (i.e. based upon the amortization of the Abated Basic Rent in equal monthly
amounts during the initial Term, without interest) shall immediately become due
and payable.  The payment by Tenant of the unamortized Abated Basic Rent in the
event of a Default shall not limit or affect any of Landlord’s other rights,
pursuant to this Lease or at law or in equity. Only Basic Rent shall be abated
during the Abatement Period and all other additional rent and other costs and
charges specified in this Lease shall remain as due and payable pursuant to the
provisions of this Lease.

 

7.                    Expense Recovery Period:  Every twelve (12)-month period
during the Term (or portion thereof during the first and last Lease years)
ending June 30.

 

8.                   Floor Area of Premises:  approximately 242,400 rentable
square feet

 

Floor Area of Building:  approximately 121,200 rentable square feet for the Mary
Building and approximately 121,200 rentable square feet for the Maude Building

 

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Tenant’s Share of Operating Expenses for the Building:  100%

 

Tenant’s Share of Operating Expenses for the Project:  100%

 

9.                   Security Deposit:  $0.00

 

Letter of Credit:  [See Section 4.4]

 

10.             Broker(s):  CBRE and Cushman & Wakefield (collectively,
“Landlord’s Broker”) are the agents of Landlord exclusively and Jones Lang
LaSalle / Menlo Park (“Tenant’s Broker”) is the agent of Tenant exclusively.

 

11.               Parking:  800 parking spaces in accordance with the provisions
set forth in Exhibit F to this Lease.

 

12.            Address for Payments and Notices:

 

LANDLORD

 

TENANT

 

Payment Address:

PATHLINE LLC

c/o Irvine Company Office Properties

5451 Great America Parkway, Suite 201

Santa Clara, CA 95054

 

Notice Address:

 

PATHLINE LLC

550 Newport Center Drive

Newport Beach, CA 92660

Attn:  Senior Vice President, Property Operations

Irvine Office Properties

 

with a copy of notices to:

 

THE IRVINE COMPANY LLC

550 Newport Center Drive

Newport Beach, CA 92660

Attn:  Senior Vice President, Property Operations

Irvine Office Properties

PROOFPOINT, INC.

 

Prior to the Commencement Date:

 

Proofpoint, Inc.

892 Ross Drive

Sunnyvale, CA  94089

Attention:  General Counsel

 

From and After the Commencement Date:

 

At the Premises

 

LIST OF LEASE EXHIBITS (All exhibits, riders and addenda attached to this Lease
are hereby incorporated into and made a part of this Lease):

 

Exhibit A                                 Description of Premises

Exhibit B                                 Operating Expenses

Exhibit C                                 Utilities and Services

Exhibit D                                 Tenant’s Insurance

Exhibit E                                  Rules and Regulations

Exhibit F                                   Parking

Exhibit F-1                        Restricted Spaces

Exhibit G                                 Additional Provisions

Exhibit H                                Landlord’s Disclosures

Exhibit I                                     Letter of Credit Template

Exhibit J                                     Survey Form

Exhibit X                                 Work Letter

Exhibit Y                                 Project Description

 

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ARTICLE 2.  PREMISES

 

2.1.   LEASED PREMISES.  Landlord leases to Tenant and Tenant leases from
Landlord the Premises shown in Exhibit A (the “Premises”).  The Premises are
located in the Mary Building and the Maude Building identified in Item 2 of the
Basic Lease Provisions (sometimes hereinafter collectively referred to as the
“Building”), which, together with the Common Areas (as defined in Section 6.2
below) adjacent to the Mary Building and the Maude Building comprise the project
described in Item 2 (the “Project”).  The “Floor Area” of the Premises shall be
calculated after the substantial completion of the Buildings in accordance with
the “Floor Area Measurement of Single-Tenant Office Buildings” ANSI/BOMA z65.1
2009 and its accompanying guidelines (“BOMA”), provided that the aggregate
rentable square footage of the Premises shall not include any balconies or
structured parking.  Within thirty (30) days after the “Delivery Date” (as
defined below), Landlord’s space planner/architect shall measure the rentable
square feet of each of the Mary Building and the Maude Building in accordance
with BOMA and the results thereof shall be presented to Tenant in writing. 
Tenant’s space planner/architect may review Landlord’s space planner/architect’s
determination of the number of rentable square feet of such Building and Tenant
may, within fifteen (15) business days after Tenant’s receipt of Landlord’s
space planner/architect’s written determination, object to such determination by
written notice to Landlord.  Tenant’s failure to deliver written notice of such
objection within said fifteen (15) business day period shall be deemed to
constitute Tenant’s acceptance of Landlord’s space planner/architect’s
determination.  If Tenant objects to such determination, Landlord’s space
planner/architect and Tenant’s space planner/architect shall promptly meet and
attempt to agree upon the rentable square footage of such Building.  If
Landlord’s space planner/architect and Tenant’s space planner/architect cannot
agree on the rentable square footage of such Building within thirty (30) days
after Tenant’s objection thereto, Landlord and Tenant shall mutually select an
independent third party space measurement professional to field measure such
Building under BOMA and to select either the measurement of the Landlord’s space
planner/architect or the Tenant’s space planner/architect that is closer to its
determination of the measurement of such Building.  Such third party independent
measurement professional’s determination shall be conclusive and binding on
Landlord and Tenant.  Landlord and Tenant shall each pay one-half (½) of the
fees and expenses of the independent third party space measurement
professional.  If the Lease Term commences prior to such final determination,
Landlord’s determination shall be utilized until a final determination is made,
whereupon an appropriate adjustment, if necessary, shall be made retroactively,
and Landlord shall make appropriate payment (if applicable) to Tenant.  In the
event that pursuant to the procedure described in this Section 2.1 above, it is
determined that the square footage amounts shall be different from those set
forth in this Lease, all amounts, percentages and figures appearing or referred
to in this Lease based upon such incorrect amount (including, without
limitation, the amount of the Basic Rent and the amount of the Tenant
Improvement Allowance) shall be modified in accordance with such determination. 
If such determination is made, it will be confirmed in writing by Landlord to
Tenant.  Once determined, in no event shall the rentable square feet of the
Premises be subject to remeasurement or change, except in connection with the
change in the physical dimensions of the Premises.

 

2.2.   ACCEPTANCE OF PREMISES.  Tenant acknowledges that neither Landlord nor
any representative of Landlord has made any representation or warranty with
respect to the Premises, the Building or the Project or the suitability or
fitness of either for any purpose, except as set forth in this Lease.  Tenant
acknowledges that the flooring materials which may be installed within portions
of the Premises located on the ground floor of the Building may be limited by
the moisture content of the Building slab and underlying soils.  Subject to
Section 2.3 below, the taking of possession or use of the Premises by Tenant for
any purpose other than construction shall conclusively establish that the
Premises and the Building were in satisfactory condition and in conformity with
the provisions of this Lease in all respects, except for those matters which
Tenant shall have brought to Landlord’s attention on a written punch list.  The
punch list shall be limited to any items required to be accomplished by Landlord
under the Work Letter attached as Exhibit X (“Landlord’s Work”), and shall be
delivered to Landlord within 30 days after the “Final Condition Date” (as
defined in the Work Letter).  Within 15 days after Landlord’s receipt of such
punch list, Landlord will deliver to Tenant Landlord’s anticipated schedule to
complete the punch list items.  Nothing contained in this Section 2.2 shall
affect the commencement of the Term or the obligation of Tenant to pay rent. 
Landlord shall diligently complete all punch list items of which it is notified
as provided above.

 

2.3   GOOD WORKING ORDER WARRANTY.  Landlord warrants to Tenant that the windows
and seals, the “Building Systems” (as defined below) installed by Landlord
pursuant to the Work Letter, the doors, skylights, windows and seals in the
Building, and the “Building Structure” (as defined below) shall be in good
operating condition on the Commencement Date.  In the event that at any time
during the one (1)- year period following the Commencement Date Tenant shall
notify Landlord that any of the foregoing, including, without limitation, any
component of the Building Systems or the Building Structure are not in good
operating condition, then Landlord shall, promptly after receipt of such notice
from Tenant setting forth the nature and extent of such noncompliance, rectify
same at Landlord’s sole cost and expense and not as part of the Operating
Expenses described in Exhibit B of this Lease, except to the extent any such
repairs or replacements are required as the result of Tenant’s breach of this
Lease or due to negligent acts or omissions or willful misconduct of Tenant, its
agents, contractors or employees.  Landlord shall further warrant that the
Building Systems and Building Structure are in compliance with applicable Laws
on the Final Condition Date.  For purposes of this Lease, “Building Systems”
means the base building mechanical, fire sprinkler/life safety system, lighting,
heating, ventilation and air conditioning systems and all plumbing, electrical
and elevator systems installed as part of the Landlord’s Work in the Building
and the Premises.  For purposes of this Lease, “Building Structure” means the
exterior walls (including the exterior surfaces of the exterior walls and
exterior glass), foundation, footings, floor slabs, load-bearing

 

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walls, roof structure and coverings (including roof membrane), columns, beams,
shafts, stairwells, skylight systems and all structural steel in the Buildings,
and all pipes and conduits stubbed to the point of entry to each Building.  For
avoidance of doubt, Landlord shall enforce, for the benefit of Tenant, all
warranties obtained by Landlord in connection with the Building Systems and/or
Building Structure that exceed the one (1)- year Landlord Warranty period
referenced herein.

 

ARTICLE 3.  TERM

 

3.1.   GENERAL.  The term of this Lease (“Term”) shall be for the period shown
in Item 5 of the Basic Lease Provisions, commencing on the “Commencement Date”
(as defined below).

 

3.2.   COMMENCEMENT DATE.

 

(a)        If the “Base Building Contractor” (as defined in the Work Letter) is
also the “Tenant’s Contractor” (as defined in the Work Letter), the
“Commencement Date be the date which is 180 days after the “Early Delivery
Condition” (as defined in the Work Letter) is achieved for both Buildings.

 

(b)        If the Base Building Contractor is not the Tenant’s Contractor, the
Commencement Date shall be the date which is 180 days after the “Delivery
Condition” (as defined in the Work Letter) is achieved for the first Building.

 

ARTICLE 4.  RENT AND OPERATING EXPENSES

 

4.1.   BASIC RENT.  From and after the Commencement Date, Tenant shall pay to
Landlord without deduction or offset a Basic Rent for the Premises in the total
amount shown (including subsequent adjustments, if any) in Item 6 of the Basic
Lease Provisions (the “Basic Rent”).  If the Commencement Date is other than the
first day of a calendar month, any rental adjustment shown in Item 6 shall be
deemed to occur on the first day of the next calendar month following the
specified monthly anniversary of the Commencement Date.  The Basic Rent shall be
due and payable in advance commencing on the Commencement Date and continuing
thereafter on the first day of each successive calendar month of the Term, as
prorated for any partial month.  No demand, notice or invoice shall be
required.  An installment in the amount of 1 full month’s Basic Rent at the
initial rate specified in Item 6 of the Basic Lease Provisions shall be
delivered to Landlord within five (5) business days after Tenant’s execution of
this Lease and shall be applied against the Basic Rent first due hereunder; the
next installment of Basic Rent shall be due on the first day of the ninth (9th)
calendar month of the Term, which installment shall, if applicable, be
appropriately prorated to reflect the amount prepaid for that calendar month.

 

4.2.  OPERATING EXPENSES. Tenant shall pay Tenant’s Share of Operating Expenses
in accordance with Exhibit B of this Lease.  Basic Rent, Tenant’s Share of
Operating Expenses and all other sums payable by Tenant to Landlord hereunder
shall be referred to in this Lease as “Rent” or “rent”.

 

4.3.  [INTENTIONALLY OMITTED]

 

4.4.  LETTER OF CREDIT.  Tenant shall deliver to Landlord, within 30 days
following Tenant’s execution of this Lease, a letter of credit in the amount of
$1,650,000.00 (“Letter of Credit”), which Letter of Credit shall be in form and
with the substance of Exhibit I attached hereto.  Within 10 business days after
the Early Delivery Condition or Delivery Condition, as applicable, has been
achieved and prior to the commencement of construction of the “Tenant
Improvements” (as defined in the Work Letter), Tenant shall cause the principal
amount of the Letter of Credit to be increased by $5,000,000.00 to $6,650,000.00
and shall deliver to Landlord documents satisfactory to Landlord evidencing such
increase.  The Letter of Credit shall be issued by a financial institution in
the United States reasonably acceptable to Landlord with a branch in Santa Clara
County, California or by a financial institution reasonably acceptable to
Landlord that will honor draws sent by nationally recognized overnight courier,
at which draws on the letter of credit will be accepted.  Landlord hereby
approves Silicon Valley Bank as an acceptable financial institution for issuance
of the Letter of Credit.  Upon any Default by Tenant, Landlord shall be entitled
to draw upon said Letter of Credit by the issuance of Landlord’s written demand
to the issuing financial institution, which draw shall be in an amount necessary
to cure the Default in question and to compensate Landlord for all damages
incurred thereby, as reasonably determined by Landlord in its sole but
reasonable discretion, and if such amount cannot be readily determined by
Landlord, then the full amount of the Letter of Credit can be drawn by Landlord
pending determination of said amount.  Notwithstanding the foregoing, while the
amount of any such draw shall be determined in Landlord’s sole but reasonable
discretion as provided in the foregoing, if the amount of any such draw(s) shall
ultimately exceed the amount of damages actually incurred by Landlord as the
result of Tenant’s Default (as determined pursuant to the applicable provisions
of Article 14 of this Lease), then Landlord shall promptly refund any such
excess to Tenant.  Any such draw shall be without waiver or any rights Landlord
may have under this Lease or at law or in equity as a result of the Default, as
a setoff for full or partial compensation for the Default.  If any portion of
the Letter of Credit is drawn after a Default by Tenant, Tenant shall within 10
business days receipt of after written demand by Landlord restore the Letter of
Credit to the required amount.  Failure to so restore said Letter of Credit
within said 10 business days shall be a Default by Tenant under this Lease. 
Partial drawings upon said Letter of Credit shall be permitted.  The Letter of
Credit shall provide for automatic annual renewals through that date which is 60
days after the Expiration Date of the Term of this Lease (including any
extensions of the Term as provided in this Lease).  In the event the Letter of
Credit is not renewed by the issuing financial institution on or before 30 days
prior to the then-scheduled expiration date of the Letter of Credit, then
Landlord

 

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shall have the right to draw the full amount of such Letter of Credit and to
hold such amount as cash security for Tenant’s full and faithful performance of
its obligations under the Lease.  In the event of a draw down of the Letter of
Credit to cash security as provided in the foregoing, the following shall apply:
(i) upon any Default by Tenant under this Lease, including specifically Tenant’s
failure to pay rent or to abide by its obligations under Sections 7.1 and 15.2
below, notwithstanding any contrary provision of California Civil Code
Section 1950.7, Landlord may retain, use or apply so much of the cash security
to pay any sum which Tenant is obligated to pay under this Lease, including
without limitation, amounts estimated by Landlord as the amounts due it for
prospective rent and for damages pursuant to Section 14.2(a)(i) of this Lease
and/or California Civil Code Section 1951.2, sums that Landlord may spend or be
required to expend by reason of the default by Tenant or any loss or damage that
Landlord may suffer by reason of such default or costs incurred by Landlord in
connection with the repair or restoration of the Premises pursuant to
Section 15.2 upon expiration or earlier termination of this Lease, (ii) Landlord
shall not be required to keep the cash security separate from its general funds
and Tenant shall not be entitled to interest on such cash security, and (iii) if
Tenant fully performs its obligations under this Lease, the cash security shall
be returned to Tenant (or, at Landlord’s option, to the last assignee of
Tenant’s interest under the Lease) within thirty (30) days after the expiration
of the Term, provided that Tenant agrees that Landlord may retain the cash
security to the extent and until such time as all amounts due from Tenant in
accordance with this Lease have been determined and paid in full and Tenant
agrees that Tenant shall have no claim against Landlord for Landlord’s retaining
the cash security to the extent provided in the foregoing.  Notwithstanding
anything contained in this Section 4.4 to the contrary, if Landlord draws on the
Letter of Credit, then Tenant shall have the right, upon ten (10) days’ prior
written notice to Landlord and following Landlord’s receipt of the replacement
Letter of Credit described below, to obtain a refund from Landlord of any
unapplied cash proceeds of the Letter of Credit which Landlord has drawn upon,
any such refund being conditioned upon Tenant simultaneously delivering to
Landlord a new replacement Letter of Credit in the amount then required, and
otherwise meeting the requirements contained in this Section 4.4.

 

Landlord will authorize in writing a reduction in the principal amount of the
Letter of Credit in the amount of $3,325,000.00 on the first day of the
19th full month of the Term, provided that, as of the date of such reduction,
(1) no Default has occurred under any provision of this Lease at any time during
the Term and no event or circumstance shall have occurred, which with the
passage of time or giving of notice, could constitute a Default under this Lease
as of such date, and (2) Tenant has not been more than five (5) days late with
respect to any payments of rent due under this Lease more than twice during the
preceding eighteen (18) months.  In addition, Landlord will authorize an
additional reduction in the principal amount of the Letter of Credit in the
amount of $3,325,000.00 (in which case the resulting Letter of Credit amount
shall be zero and the Letter of Credit shall be cancelled), so that, commencing
on the first day of the 49th full month of the Term (and continuing thereafter
at any time that all of the following conditions have been met), as of the date
of such reduction, (1) no Default has occurred under any provision of this Lease
at any time during the Term and no event or circumstance shall have occurred,
which with the passage of time or giving of notice, could constitute a Default
under this Lease as of such date, (2) Tenant has not been more than five
(5) days late with respect to any payments of rent due under this Lease more
than twice during the Term, and (3) Tenant shall have provided Landlord or filed
with the Securities and Exchange Commission audited financial statements showing
revenue of not less than One Billion Dollars ($1,000,000,000.00) and free cash
flow of not less than Two Hundred Million Dollars ($200,000,000.00) for the
calendar year immediately preceding such final reduction.  Free cash flow is
defined as net cash provided by operating activities minus capital expenditures.

 

ARTICLE 5.  USES

 

5.1.   USE.

 

(a)     Subject to the terms and conditions of this Lease, Tenant shall have
access to the Buildings 24 hours per day/7 days per week.  Tenant shall use the
Premises only for the purposes stated in Item 3 of the Basic Lease Provisions
and for no other use whatsoever.  The uses prohibited under this Lease shall
include, without limitation, use of the Premises or a portion thereof for
(i) offices of any agency or bureau of the United States or any state or
political subdivision thereof; (ii) offices or agencies of any foreign
governmental or political subdivision thereof; or (iii) schools, temporary
employment agencies or other training facilities which are not ancillary to
corporate, executive or professional office use.  Tenant shall not do or permit
anything to be done in or about the Premises which will in any way interfere
with the rights or quiet enjoyment of other occupants of the Building or the
Project, or use or allow the Premises to be used for any unlawful purpose, nor
shall Tenant permit any nuisance or commit any waste in the Premises or the
Project.  Tenant shall not perform any work or conduct any business whatsoever
in the Project other than inside the Premises.  Tenant shall comply at its
expense with all present and future laws, ordinances and requirements of all
governmental authorities that pertain to Tenant or its use of the Premises, and
with all energy usage reporting requirements of Landlord.

 

(b)     Pursuant to California Civil Code § 1938, Landlord hereby states that
the Premises have not undergone inspection by a Certified Access Specialist
(CASp) (defined in California Civil Code § 55.52(a)(3)).  Pursuant to
Section 1938 of the California Civil Code, Landlord hereby provides the
following notification to Tenant: “A Certified Access Specialist (CASp) can
inspect the subject premises and determine whether the subject premises comply
with all of the applicable construction-related accessibility standards under
state law.  Although state law does not require a CASp inspection of the subject
premises, the commercial property owner or lessor may not prohibit the lessee or
tenant from obtaining a CASp inspection of the subject premises for the
occupancy or potential occupancy of the lessee or tenant, if requested by the
lessee or tenant.  The parties shall mutually agree on the

 

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arrangements for the time and manner of the CASp inspection, the payment of the
fee for the CASp inspection, and the cost of making any repairs necessary to
correct violations of construction related accessibility standards within the
premises.”  If Tenant requests to perform a CASp inspection of the Premises,
Tenant shall, at its cost, retain a CASp approved by Landlord (provided that
Landlord may designate the CASp, at Landlord’s option) to perform the inspection
of the Premises at a time agreed upon by the parties.  Tenant shall provide
Landlord with a copy of any report or certificate issued by the CASp (the “CASp
Report”) and Tenant shall, at its cost, promptly complete any modifications
necessary to correct violations of construction related accessibility standards
identified in the CASp Report, notwithstanding anything to the contrary in this
Lease.  Tenant agrees to keep the information in the CASp Report confidential
except as necessary for the Tenant to complete such modifications.  The terms of
this Section 5.1(b) with respect to CASp shall only apply in the event that
Tenant exercises its right to perform a CASp inspection of the Premises. 
Otherwise, the terms of this Lease shall apply, without limitation, to the
compliance, repairs and maintenance obligations of the parties.

 

5.2.   SIGNS.  Except for Landlord’s standard suite signage identifying Tenant’s
name and/or logo and as otherwise set forth in Exhibit G hereto, Tenant shall
have no right to maintain signs in any location in, on or about the  Building or
the Project and shall not place or erect any signs that are visible from the
exterior of the Building.  The size, design, graphics, material, style, color
and other physical aspects of any permitted sign shall be subject to Landlord’s
written determination, as reasonably determined by Landlord, prior to
installation, that signage is in compliance with any covenants, conditions or
restrictions encumbering the Premises and Landlord’s signage program for the
Project, as in effect from time to time and approved by the City in which the
Premises are located (“Signage Criteria”).  Prior to placing or erecting any
such signs, Tenant shall obtain and deliver to Landlord a copy of any applicable
municipal or other governmental permits and approvals, except to Landlord’s
standard suite signage.  Tenant shall be responsible for all costs of any
permitted sign, including, without limitation, the fabrication, installation,
maintenance and removal thereof and the cost of any permits therefor, except
that Landlord shall pay for the initial installation costs only of the standard
suite signage.  If Tenant fails to maintain its signage in good condition, or if
Tenant fails to remove same upon termination of this Lease and repair any damage
caused by the sign or its removal, Landlord may do so upon five days’ prior
written notice to Tenant at Tenant’s expense.  Landlord shall have the right to
temporarily remove any signs in connection with any repairs or maintenance in or
upon the Building.  The term “sign” as used in this Section shall include all
signs, designs, monuments, displays, advertising materials, logos, banners,
projected images, pennants, decals, pictures, notices, lettering, numerals or
graphics.

 

5.3   HAZARDOUS MATERIALS.

 

(a)        For purposes of this Lease, the term “Hazardous Materials” means
(i) any “hazardous material” as defined in Section 25501(o) of the California
Health and Safety Code, (ii) hydrocarbons, polychlorinated biphenyls or
asbestos, (iii) any toxic or hazardous materials, substances, wastes or
materials as defined pursuant to any other applicable state, federal or local
law or regulation, and (iv) any other substance or matter which may result in
liability to any person or entity as a result of such person’s possession, use,
storage, release or distribution of such substance or matter under any statutory
or common law theory.

 

(b)        Tenant shall not cause or permit any Hazardous Materials to be
brought upon, stored, used, generated, released or disposed of on, under, from
or about the Premises (including without limitation the soil and groundwater
thereunder) without the prior written consent of Landlord, which consent may be
given or withheld in Landlord’s sole and absolute discretion.  Notwithstanding
the foregoing, Tenant shall have the right, without obtaining prior written
consent of Landlord, to utilize within the Premises a reasonable quantity of
standard office and cleaning products that may contain Hazardous Materials (such
as photocopy toner, “White Out”, and the like, and, collectively, the “Permitted
Hazardous Materials”), provided however, that (i) Tenant shall maintain the
Permitted Hazardous Materials in their original retail packaging, shall follow
all instructions on such packaging with respect to the storage, use and disposal
of such products, and shall otherwise comply with all applicable Laws (as
defined in Section 22.6 below) with respect to such products, and (ii) all of
the other terms and provisions of this Section 5.3 shall apply with respect to
Tenant’s storage, use and disposal of all such products.  Landlord may, in its
sole and absolute but reasonable discretion, place such conditions as Landlord
deems appropriate with respect to Tenant’s use, storage and/or disposal of any
Hazardous Materials requiring Landlord’s consent.  Tenant understands that
Landlord may utilize an environmental consultant to assist in determining
conditions of approval in connection with the storage, use, release, and/or
disposal of Hazardous Materials by Tenant on or about the Premises, and/or to
conduct periodic inspections of the storage, generation, use, release and/or
disposal of such Hazardous Materials by Tenant on and from the Premises, and
Tenant agrees that, if such inspections reasonably indicate that Tenant is in
Default of any of its obligations pursuant to this Section 5.3, any costs
incurred by Landlord in connection therewith shall be reimbursed by Tenant to
Landlord as additional rent hereunder within thirty (30) days after receipt of
written demand.

 

(c)        Prior to the execution of this Lease, Tenant shall complete, execute
and deliver to Landlord a Hazardous Material Survey Form (the “Survey Form”) in
the form of Exhibit J attached hereto.  The completed Survey Form shall be
deemed incorporated into this Lease for all purposes, and Landlord shall be
entitled to rely fully on the information contained therein.  On each
anniversary of the Commencement Date until the expiration or sooner termination
of this Lease, within five (5) business days after receipt of Landlord’s written
request, Tenant shall disclose to Landlord in writing the names and amounts of
all Hazardous Materials which were stored, generated, used, released and/or
disposed of on, under or about the Premises for the twelve-month period prior
thereto, and which Tenant desires to store, generate, use,

 

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release and/or dispose of on, under or about the Premises for the succeeding
twelve-month period.  In addition, to the extent Tenant is permitted to utilize
Hazardous Materials upon the Premises other than the Permitted Hazardous
Materials, Tenant shall promptly provide Landlord with complete and legible
copies of all the following environmental documents relating thereto:  reports
filed pursuant to any self-reporting requirements; permit applications, permits,
monitoring reports, emergency response or action plans, workplace exposure and
community exposure warnings or notices and all other reports, disclosures, plans
or documents (even those which may be characterized as confidential) relating to
water discharges, air pollution, waste generation or disposal, and underground
storage tanks for Hazardous Materials; orders, reports, notices, listings and
correspondence (even those which may be considered confidential) of or
concerning the release, investigation, compliance, cleanup, remedial and
corrective actions, and abatement of Hazardous Materials; and all complaints,
pleadings and other legal documents filed by or against Tenant related to
Tenant’s storage, generation, use, release and/or disposal of Hazardous
Materials.

 

(d)        Landlord and its agents shall have the right, but not the obligation,
to inspect, sample and/or monitor the Premises and/or the soil or groundwater
thereunder at reasonable times and upon reasonable prior notice to Tenant except
in the case of emergency to determine whether Tenant is complying with the terms
of this Section 5.3, and in connection therewith Tenant shall provide Landlord
with full access to all facilities, records and personnel related thereto.  If
Tenant is not in compliance with any of the provisions of this Section 5.3, or
in the event of a release of any Hazardous Material on, under, from or about the
Premises caused or permitted by Tenant or Tenant’s agents, employees,
contractors, licensees, subtenants or invitees (collectively, the “Tenant
Parties”), Landlord and its agents shall have the right, but not the obligation,
without limitation upon any of Landlord’s other rights and remedies under this
Lease, to immediately enter upon the Premises without notice and to discharge
Tenant’s obligations under this Section 5.3 at Tenant’s expense, including
without limitation the taking of emergency or long-term remedial action. 
Landlord and its agents shall use commercially reasonable efforts to minimize
interference with Tenant’s business in connection therewith.  In addition,
Landlord, at Tenant’s expense, shall have the right, but not the obligation, to
join and participate in any legal proceedings or actions initiated in connection
with any claims arising out of the storage, generation, use, release and/or
disposal by Tenant or any Tenant Parties of Hazardous Materials on, under, from
or about the Premises.

 

(e)        If the presence of any Hazardous Materials on, under, from or about
the Premises or the Project caused or permitted by Tenant or any Tenant’s
Parties results in (i) injury to any person, or (ii) injury to or any
contamination of the Premises or the Project, or (iii) any injury or
contamination within other portions of the Master Project, Tenant, at its
expense, shall promptly take all actions necessary to return the Premises and
affected areas of the Master Project to the condition existing prior to the
introduction of such Hazardous Materials and to remedy or repair any such injury
or contamination, including without limitation, any cleanup, remediation,
removal, disposal, neutralization or other treatment of any such Hazardous
Materials.  Notwithstanding the foregoing, Tenant shall not, without Landlord’s
prior written consent, which consent may be given or withheld in Landlord’s sole
and absolute discretion, take any remedial action in response to the presence of
any Hazardous Materials on, under, from or about the Premises or the Master
Project caused or permitted by Tenant or any Tenant’s Parties or enter into any
similar agreement, consent, decree or other compromise with any governmental
agency with respect to any Hazardous Materials claims against Tenant or any
Tenant’s Parties; provided however, Landlord’s prior written consent shall not
be necessary in the event that the presence of Hazardous Materials on, under,
from or about the Premises or the Master Project caused by Tenant or any
Tenant’s Parties (i) imposes an immediate threat to the health, safety or
welfare of any individual and (ii) is of such a nature that an immediate
remedial response is necessary and it is not possible to obtain Landlord’s
consent before taking such action.  To the fullest extent permitted by law,
Tenant shall indemnify, hold harmless, protect and defend (with attorneys
acceptable to Landlord) Landlord and any successors to all or any portion of
Landlord’s interest in the Premises and the Master Project from and against any
and all liabilities, losses, damages, diminution in value, judgments, fines,
demands, claims, recoveries, deficiencies, costs and expenses (including without
limitation attorneys’ fees, court costs and other professional expenses),
whether foreseeable or unforeseeable, arising directly or indirectly out of the
use, generation, storage, treatment, release, on- or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Building or the Master Project caused or permitted by Tenant or
any Tenant Parties.  Such indemnity obligation shall specifically include,
without limitation, the cost of any required or necessary repair, restoration,
cleanup or detoxification of the Premises, the Building and the Master Project
and any other real or personal property owned by Landlord, the preparation of
any closure or other required plans, whether such action is required or
necessary during the Term or after the expiration of this Lease and any loss of
rental due to the inability to lease the Premises or any portion of the Building
or Master Project as a result of such Hazardous Materials, the remediation
thereof or any repair, restoration or cleanup related thereto.  If it is at any
time discovered that Tenant or any Tenant’s Parties caused or permitted the
release of any Hazardous Materials on, under, from or about the Premises, the
Building or the Master Project, Tenant shall, at Landlord’s request, immediately
prepare and submit to Landlord a comprehensive plan, subject to Landlord’s
reasonable approval, specifying the actions to be taken by Tenant to return the
Premises, the Building or the Master Project to the condition existing prior to
the introduction of such Hazardous Materials.  Upon Landlord’s approval of such
plan, Tenant shall, at its expense, and without limitation of any rights and
remedies of Landlord under this Lease or at law or in equity, immediately
implement such plan and proceed to cleanup, remediate and/or remove all such
Hazardous Materials in accordance with all applicable laws and as required by
such plan and this Lease.  The provisions of this Section 5.3(e) shall expressly
survive the expiration or sooner termination of this Lease

 

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(f)         Landlord hereby discloses to Tenant, and Tenant hereby acknowledges,
certain facts relating to Hazardous Materials at the Master Project known by
Landlord to exist as of the date of this Lease, as more particularly described
in Exhibit H attached hereto.  Tenant shall have no liability or responsibility
with respect to the Hazardous Materials facts described in Exhibit H, nor with
respect to any Hazardous Materials not caused or permitted by Tenant or any
Tenant Parties.  Notwithstanding the preceding two sentences, Tenant agrees to
notify its agents, employees, contractors, licensees, subtenants, and invitees
of any exposure or potential exposure to Hazardous Materials at the Premises
that Landlord brings to Tenant’s attention.  Tenant hereby acknowledges that
this disclosure satisfies any obligation of Landlord to Tenant pursuant to
California Health & Safety Code Section 25359.7, or any amendment or substitute
thereto or any other disclosure obligations of Landlord. Notwithstanding the
foregoing or anything to the contrary contained in this Lease, under no
circumstance shall Tenant be liable for any losses, costs, claims, liabilities
or damages (including attorneys’ and consultants’ fees) of any type or nature,
directly or indirectly arising out of or in connection with any Hazardous
Materials present at any time on, in, under or about the Premises, the Building
or the Project, or the soils, surface water or groundwater thereof, or the
violation of any environmental Laws, except to the extent that any of the
foregoing actually results from the storage, use, release or disposal of
Hazardous Materials  by Tenant or any Tenant Parties in violation of applicable
environmental Laws.

 

(g)     Except as disclosed in Exhibit H (and/or as may otherwise be disclosed
to Tenant in writing), Landlord warrants that, to “Landlord’s knowledge” (as
hereinafter defined), (i) there are no Hazardous Materials in or about the
Premises as of the date of this Lease which are in violation of any applicable
federal, state or local law, ordinance or regulation, (ii) no underground
storage tanks are present on the Project; and (iii) no action, proceeding or
claim is pending or threatened regarding the Premises, the Building or the
Project concerning the presence of any Hazardous Materials.  As used herein,
“Landlord’s knowledge” shall mean the actual knowledge, without duty of inquiry
or investigation, of the current employees or authorized agents of Landlord
responsible for Hazardous Materials compliance matters.

 

ARTICLE 6.  LANDLORD SERVICES

 

6.1.   UTILITIES AND SERVICES.  Landlord and Tenant shall be responsible to
furnish those utilities and services to the Premises to the extent provided in
Exhibit C, subject to the conditions and payment obligations and standards set
forth in this Lease.  Landlord shall not be liable for any failure to furnish
any services or utilities when the failure is the result of any accident or
other cause beyond Landlord’s reasonable control, nor shall Landlord be liable
for damages resulting from power surges or any breakdown in telecommunications
facilities or services.  Landlord’s temporary inability to furnish any services
or utilities shall not entitle Tenant to any damages, relieve Tenant of the
obligation to pay rent or constitute a constructive or other eviction of Tenant,
except that Landlord shall diligently attempt to restore the service or utility
promptly.  Notwithstanding the foregoing, in the event the Premises are
untenantable for more than 5 consecutive business days due to Landlord’s failure
to furnish a required service or utility, then Tenant’s Rent shall abate from
and after the 6th business day until such matter is rectified.  Tenant shall
comply with all rules and regulations which Landlord may reasonably establish
for the provision of services and utilities, and shall cooperate with all
reasonable conservation practices established by Landlord.  Landlord shall at
all reasonable times have free access to all electrical and mechanical
installations of Landlord.  Landlord shall use commercially reasonable efforts
to minimize interference with Tenant’s business operations while exercising its
rights pursuant to this Section.

 

Notwithstanding the foregoing, if a service failure which makes the Premises
untenantable is reasonably within the control of Landlord and continues for
twelve (12) consecutive months after the service failure, Tenant, as its sole
remedy, shall have the right to elect to terminate this Lease within 10 business
days after the expiration of said twelve (12) month period without penalty, by
delivering written notice to Landlord of its election thereof.  The foregoing
termination right shall not apply if the service failure is due to a casualty,
as described in Article 11.  Instead, in such an event, the terms and provisions
of Article 11 shall apply.

 

6.2.   OPERATION AND MAINTENANCE OF COMMON AREAS.  During the Term, in
accordance with the provisions of Section 7.2 below, Landlord shall operate all
Common Areas within the Project.  The term “Common Areas” shall mean all areas
outside the Building, including the parking areas and structures, driveways,
sidewalks and landscaped and planted areas.

 

6.3.   USE OF COMMON AREAS.  The occupancy by Tenant of the Premises shall
include the exclusive use of the Common Areas except for the Restricted Spaces
(defined in Exhibit F attached hereto and incorporated by reference herein),
subject, however, to compliance with Rules and Regulations described in
Article 17 below.  Landlord shall at all times during the Term have the right to
may restrain or permit any use or occupancy of the Common Areas except as
otherwise provided in this Lease or in Landlord’s rules and regulations.  Tenant
shall keep the Common Areas clear of any obstruction or unauthorized use related
to Tenant’s operations.  Landlord may temporarily close any portion of the
Common Areas for repairs, remodeling and/or alterations, to prevent a public
dedication or the accrual of prescriptive rights, or for any other reasonable
purpose.  Landlord’s temporary closure of any portion of the Common Areas for
such purposes shall not deprive Tenant of reasonable access to the Premises, and
Landlord shall use commercially reasonable efforts to minimize interference with
Tenant’s business operations and parking rights in exercising its rights
pursuant to this Section.

 

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6.4.   CHANGES AND ADDITIONS BY LANDLORD.  Except as otherwise expressly set
forth in this Lease, Landlord reserves the right to make alterations or
additions to the Common Areas, and such change shall not entitle Tenant to any
abatement of rent or other claim against Landlord.  No such change shall deprive
Tenant of reasonable access to or use of the Premises or Tenant’s parking
rights, and Landlord shall use commercially reasonable efforts to minimize
interference with Tenant’s business operations while exercising its rights
pursuant to this Section.

 

ARTICLE 7.  REPAIRS AND MAINTENANCE

 

7.1.   TENANT’S MAINTENANCE AND REPAIR.  Subject to Articles 11 and 12, and to
the extent not made the obligation of Landlord pursuant to Section 7.2 below
Tenant at its sole expense shall repair, replace and maintain in good condition
and operating order and in a manner reasonably commensurate with the maintenance
standards of prudent owners of comparable buildings in the City of Sunnyvale
(“Comparable Buildings”), the Building Systems and the Premises, including all
improvements, fixtures, furnishings, and systems and equipment therein
(including, without limitation, plumbing fixtures and equipment such as
dishwashers, garbage disposals, and insta-hot dispensers), and the floor or
floors of the Buildings.  Notwithstanding Section 7.2 below, Tenant’s
maintenance obligation shall include without limitation all appliances, interior
glass, doors, door closures, hardware, fixtures, electrical, plumbing, fire
extinguisher equipment and other equipment installed in the Premises and all
Alterations constructed by Tenant pursuant to Section 7.3 below.  All repairs
and other work performed by Tenant or its contractors shall be subject to the
terms of Sections 7.3 and 7.4 below.  All Building Systems, including HVAC,
elevators, main electrical, plumbing and fire/life-safety systems, shall be
maintained and repaired by Tenant (i) in a manner reasonably commensurate with
the standards required by prudent owners of Comparable Buildings, (ii) in
accordance with any applicable manufacturer specifications relating to any
particular component of such Building Systems, and (iii) in accordance with
applicable Laws.  Tenant shall contract with a qualified, experienced
professional third party service company to perform its maintenance, repair and
replacement obligations hereunder with respect to the HVAC systems (which shall
provide for and include, without limitation, replacement of filters, oiling and
lubricating of machinery, parts replacement, adjustment of drive belts, oil
changes and other preventive maintenance, including annual maintenance of duct
work, interior unit drains and caulking of sheet metal, and recaulking of jacks
and vents on an annual basis), the Building fire/life-safety systems and the
electrical and plumbing systems (a “Service Contract”).  Tenant shall deliver
full and complete copies of all such Service Contracts to Landlord within thirty
(30) days after the effective date of such Service Contract.  In addition,
Tenant shall regularly, in accordance with commercially reasonable standards,
generate and maintain preventive maintenance records relating to each Building’s
mechanical and main electrical systems, including life safety, elevators and the
central plant (“Preventative Maintenance Records”).  In addition, Tenant shall
deliver to Landlord copies of all current Service Agreements from time to time
to Landlord and/or copies of the Preventative Maintenance Records on a quarterly
basis.  Alternatively, should Landlord or its management agent agree to make a
repair on behalf of Tenant and at Tenant’s request, Tenant shall promptly
reimburse Landlord as additional rent for all reasonable costs incurred
(including the standard supervision fee) upon submission of an invoice.

 

7.2.   LANDLORD’S MAINTENANCE AND REPAIR.  Subject to Articles 11 and 12,
Landlord, as an Operating Expense, shall maintain, repair and replace the Common
Areas in good condition and operating order and in a manner reasonably
commensurate with the maintenance standards of prudent owners of Comparable
Buildings.  In addition, Landlord, at Landlord’s sole cost and expense, shall
(i) cure any defects in the construction of the Landlord’s Work, and
(ii) maintain, repair and replace all components of the Building Structure in
good condition and operating order and in a manner reasonably commensurate with
the maintenance standards of prudent owners of Comparable Buildings (except that
the cost of capital repairs and replacements of the roof membrane shall be
included in Operating Expenses on an amortized basis as provided in Exhibit B). 
Notwithstanding the foregoing, Landlord’s obligation contained in this
Section 7.2 to bear such costs and expenses shall not apply:  (i) to the costs
and expenses of periodic maintenance of the Building Structure (which shall be
included in Operating Expenses), or (ii) to the extent of the negligence or
willful misconduct by Tenant, its employees, agents, contractors, licensees or
invitees (in which case Tenant shall be responsible for the reasonable costs of
such repairs and/or replacements).  Landlord shall be responsible for
replacement of the Building Systems when necessary and the costs incurred
therefor shall be included in Operating Expenses as provided in Exhibit B;
provided, however, that to the extent of the replacement is required due to the
negligence or willful misconduct by Tenant, its employees, agents, contractors,
licensees or invitees, Tenant shall be responsible for the reasonable costs of
such replacements when incurred by Landlord.  Landlord need not make any other
improvements or repairs except as specifically required under this Lease, and
nothing contained in this Section 7.2 shall limit Landlord’s right to
reimbursement from Tenant for maintenance, repair costs and replacement costs as
provided elsewhere in this Lease.  Notwithstanding any provision of the
California Civil Code or any similar or successor laws to the contrary, Tenant
understands that it shall not make repairs at Landlord’s expense or by rental
offset except as expressly set forth in Section 7.6 below.  Except as provided
in Section 11.1 and Article 12 below, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant’s
business arising from the making of any repairs, alterations or improvements to
any portion of the Building, including repairs to the Premises, nor shall any
related activity by Landlord constitute an actual or constructive eviction;
provided, however, that in making repairs, alterations or improvements, Landlord
shall interfere as little as reasonably practicable with the conduct of Tenant’s
business in the Premises. Tenant hereby waives any and all rights under and
benefits of subsection 1 of Section 1932, and Sections 1941 and 1942 of the
California Civil Code, or any similar or successor laws now or hereafter in
effect.

 

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7.3.   ALTERATIONS.  Except for cosmetic alterations and projects that do not
exceed $200,000 during any calendar year of the Term, that do not require a
permit from the City of Sunnyvale and that satisfy the criteria in the next
following sentence (which cosmetic work shall require notice to Landlord but not
Landlord’s consent), Tenant shall make no alterations, additions, decorations,
or improvements (collectively referred to as “Alterations”) to the Premises
without the prior written consent of Landlord.  Landlord’s consent shall not be
unreasonably withheld, conditioned or delayed as long as the proposed
Alterations do not affect the structural components of the Building, are not
visible from the exterior of the Premises, do not change the basic floor plan of
the Premises, and utilize only Landlord’s building standard materials.  Landlord
shall not unreasonably withhold, condition or delay its consent to Alterations
that do not materially and adversely affect the Building Systems if Tenant uses
mechanical and electrical contractors reasonably acceptable to Landlord. 
Landlord may impose, as a condition to its consent, any requirements that
Landlord in its reasonable discretion may deem desirable.    Should Tenant
perform any Alterations work that would necessitate any ancillary Building
modification or other expenditure by Landlord, then Tenant shall promptly fund
the cost thereof, as determined by Landlord and Tenant, acting reasonably, to
Landlord.  Tenant shall obtain all required permits for the Alterations and
shall perform the work in compliance with all applicable laws, regulations and
ordinances with contractors reasonably acceptable to Landlord, and except for
cosmetic Alterations not requiring Landlord’s consent as provided above or
projects costing $100,000.00 or less, Landlord shall be entitled to a
supervision fee in the amount of 2.5% of the cost of the applicable
Alterations.  Any request for Landlord’s consent shall be made in writing and
shall contain architectural plans describing the work in detail reasonably
satisfactory to Landlord.  Landlord may elect to cause its third party architect
to review Tenant’s architectural plans, and the reasonable cost of that review
shall be reimbursed by Tenant.  Should the Alterations proposed by Tenant and
consented to by Landlord change the floor plan of the Premises, then Tenant
shall, at its expense, furnish Landlord with as-built drawings and CAD disks
compatible with Landlord’s systems.  Alterations shall be constructed in a good
and workmanlike manner using materials of a quality reasonably approved by
Landlord.  Unless Landlord otherwise agrees in writing, all Alterations affixed
to the Premises, including without limitation all Tenant Improvements
constructed pursuant to the Work Letter (except as otherwise provided in the
Work Letter), but excluding moveable trade fixtures and furniture, shall become
the property of Landlord upon the expiration or earlier termination of this
Lease.  For a avoidance of doubt, during the Term Tenant shall account for the
depreciation on all Tenant Improvements and Alterations in accordance with
generally accepted accounting principles as determined in Tenant’s reasonable
discretion.  Such Alterations shall be surrendered with the Premises at the end
of the Term, except that Landlord may, by notice to Tenant given at the time
Landlord approves the applicable Alterations, require Tenant to remove by the
Expiration Date, or sooner termination date of this Lease, all or any such
Alterations (including without limitation all telephone and data cabling)
installed either by Tenant or by Landlord at Tenant’s request (collectively, the
“Required Removables”). Notwithstanding anything to the contrary in the
foregoing, with respect to the Tenant Improvements, the Required Removables
shaIl consist only of the “Specialty Alterations” (as defined in the Work
Letter) which Landlord will require Tenant to remove in accordance with
Section 3.8 of the Work Letter.  In connection with its removal of Required
Removables, Tenant shall repair any damage to the Premises arising from that
removal.

 

7.4.   MECHANIC’S LIENS.  Tenant shall keep the Premises free from any liens
arising out of any work performed, materials furnished, or obligations incurred
by or for Tenant.  Upon request by Landlord, Tenant shall promptly cause any
such lien to be released by posting a bond in accordance with California Civil
Code Section 8424 or any successor statute.  In the event that Tenant shall not,
within 20 days following the imposition of any lien, cause the lien to be
released of record by payment or posting of a proper bond, Landlord shall have,
in addition to all other available remedies, the right to cause the lien to be
released by any reasonable means it deems proper, including payment of or
defense against the claim giving rise to the lien.  All actual and reasonable
expenses so incurred by Landlord, including Landlord’s reasonable attorneys’
fees, shall be reimbursed by within thirty (30) days following receipt of
Landlord’s demand.  Tenant shall give Landlord no less than 20 days’ prior
notice in writing before commencing construction of any kind on the Premises.

 

7.5.   ENTRY AND INSPECTION.  Landlord shall at all reasonable times, upon at
least twenty-four (24) hours’ advance written notice (which may be by email)
given by Landlord (except in emergencies, when no notice shall be required),
have the right to enter the Premises to inspect them, to supply services in
accordance with this Lease, to make repairs and renovations as reasonably deemed
necessary by Landlord, and to submit the Premises to prospective or actual
purchasers or encumbrance holders (or, during the final twelve months of the
Term or when an uncured Default exists, to prospective tenants), all without
being deemed to have caused an eviction of Tenant and without abatement of rent
except as provided elsewhere in this Lease.  If reasonably necessary, Landlord
may temporarily close all or a portion of the Premises to perform repairs,
alterations and additions. Except in emergencies, Landlord shall use reasonable
efforts to minimize any interference with Tenant’s use of the Premises.  In
exercising its right to enter the Premises, Landlord and its agents shall comply
with Tenant’s reasonable security procedures and Tenant shall be entitled to
have an employee of Tenant accompany the person(s) entering the Premises,
provided Tenant makes such employee available at the time Landlord or such other
party desires to enter the Premises

 

7.6    SELF-HELP RIGHT.  “TIC Affiliate” means Pathline LLC, The Irvine Company
LLC, or any affiliate or subsidiary of The Irvine Company LLC.  Notwithstanding
the foregoing and provided that a TIC Affiliate is no longer Landlord under this
Lease, if Tenant provides written notice to Landlord of an event or circumstance
which requires the action of Landlord with respect to repair and/or maintenance
and/or replacement with respect to a Building pursuant to Section 7.2 above, and
Landlord fails to provide such action within a reasonable period of time, given
the circumstances, after the receipt of such written notice,

 

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but in any event not later than 21 days after receipt of such written notice,
then Tenant may proceed to take the required action upon delivery of an
additional 10 business days’ written notice to Landlord specifying that Tenant
is taking such required action, and if such action was required under the terms
of the Lease to be taken by Landlord, then Tenant shall be entitled to prompt
reimbursement by Landlord of Tenant’s reasonable costs and expenses in taking
such action plus interest thereon at the rate of 10% per annum.  In the event
Tenant takes such action, and such work will affect the Building’s life safety
systems, HVAC systems and/or elevator systems or the structural integrity of the
Building, Tenant shall use only those contractors used by Landlord in the
Building for work on such systems unless such contractors are unwilling or
unable to perform such work, in which event Tenant may utilize the services of
any other qualified contractor who normally and regularly performs similar work
in Comparable Buildings.  Further, if Landlord does not deliver a detailed
written objection to Tenant within ten (10) business days after Landlord’s
receipt of an invoice from Tenant of Tenant’s costs of taking action which
Tenant claims should have been taken by Landlord, and if such invoice from
Tenant sets forth a reasonably particularized breakdown of its costs and
expenses in connection with taking such action on behalf of Landlord, then
Tenant shall be entitled to deduct from rent payable by Tenant under the Lease,
the amount set forth in such invoice.  If, however, Landlord delivers to Tenant
within ten (10) business days after receipt of Tenant’s invoice, a written
objection to the payment of such invoice, setting forth with reasonable
particularity Landlord’s reasons for its claim that such action did not have to
be taken by Landlord pursuant to the terms of the Lease or that the charges are
excessive (in which case Landlord shall pay the amount it contends would not
have been excessive), then Tenant shall not be entitled to such deduction from
rent, but as Tenant’s sole remedy, Tenant may proceed to claim a default by
Landlord or, if elected by either Landlord or Tenant, the matter shall proceed
to resolution pursuant to Section 14.7(b) below.  If Tenant prevails in any such
reference proceeding, Tenant shall be entitled to apply such award as a credit
against Tenant’s obligations to pay Rent; provided, however, in no event shall
the amount offset in any month exceed an amount equal to 50% of the Basic Rent
scheduled to be paid for such month.

 

ARTICLE 8.  [INTENTIONALLY OMITTED]

 

 

ARTICLE 9.  ASSIGNMENT AND SUBLETTING

 

9.1.   RIGHTS OF PARTIES.

 

(a)        Except as otherwise specifically provided in this Article 9, Tenant
may not, either voluntarily or by operation of law, assign, sublet, encumber, or
otherwise transfer all or any part of Tenant’s interest in this Lease, or permit
the Premises to be occupied by anyone other than Tenant (each, a “Transfer”),
without Landlord’s prior written consent, which consent shall not unreasonably
be withheld, conditioned or delayed in accordance with the provisions of
Section 9.1(b).  For purposes of this Lease, references to any subletting,
sublease or variation thereof shall be deemed to apply not only to a sublease
effected directly by Tenant, but also to a sub-subletting or an assignment of
subtenancy by a subtenant at any level.  Except as otherwise specifically
provided in this Article 9, no Transfer (whether voluntary, involuntary or by
operation of law) shall be valid or effective without Landlord’s prior written
consent and, at Landlord’s election, such a Transfer shall constitute a material
default of this Lease.

 

(b)        Except as otherwise specifically provided in this Article 9, if
Tenant or any subtenant hereunder desires to transfer an interest in this Lease,
Tenant shall first notify Landlord in writing and shall request Landlord’s
consent thereto.  Tenant shall also submit to Landlord in writing:  (i) the name
and address of the proposed transferee; (ii) the nature of any proposed
subtenant’s or assignee’s business to be carried on in the Premises; (iii) the
terms and provisions of any proposed sublease or assignment (including without
limitation the rent and other economic provisions, term, improvement obligations
and commencement date); (iv) reasonable evidence that the proposed assignee or
subtenant will comply with the requirements of Exhibit D to this Lease; and
(v) any other information requested by Landlord and reasonably related to the
Transfer.  Landlord shall not unreasonably withhold, condition or delay its
consent, provided:  (1) the use of the Premises will be consistent with the
provisions of this Lease and with Landlord’s commitment to other tenants of the
Project; (2) any proposed subtenant or assignee demonstrates that it is
financially responsible by submission to Landlord of all reasonable information
as Landlord may request concerning the proposed subtenant or assignee,
including, but not limited to, a balance sheet of the proposed subtenant or
assignee as of a date within 90 days of the request for Landlord’s consent and
statements of income or profit and loss of the proposed subtenant or assignee
for the two-year period preceding the request for Landlord’s consent (so long as
the proposed assignee or sublessee has been in business for two (2) years);
(3) the proposed assignee or subtenant is neither an existing tenant of the
Project nor a prospective tenant with whom Landlord or Landlord’s affiliate has
been actively negotiating to become a tenant at the Project during the previous
three (3) months, unless Landlord does not have space in the Project suitable
for the proposed assignee’s or sublessee’s facilities needs; and (4) the
proposed transferee is not an SDN (as defined in Section 22.4 below) and will
not impose additional burdens or security risks on Landlord.  If Landlord
consents to the proposed Transfer, then the Transfer may be effected within 90
days after the date of the consent upon the terms described in the information
furnished to Landlord; provided that any material change in the terms shall be
subject to Landlord’s consent as set forth in this Section 9.1(b).  Landlord
shall approve or disapprove any requested Transfer within ten (10) business days
following receipt of Tenant’s written notice and the information set forth
above.  Except in connection with a Permitted Transfer (as defined below), if
Landlord approves the Transfer Tenant shall pay a transfer fee of $1,000.00 to
Landlord concurrently with Tenant’s execution of a commercially reasonable
Transfer consent prepared by Landlord.

 

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(c)        Notwithstanding the provisions of Subsection (b) above, and except in
connection with a “Permitted Transfer” (as defined below), in lieu of consenting
to a proposed assignment of this Lease or a subletting of either one
(i) Building in its entirety or (ii) both Buildings in their entirety for the
balance of the Term, Landlord, by written notice to Tenant given within twenty
(20) days after Tenant’s submissions pursuant to subsection (b) above (the
“Recapture Notice”), may elect to terminate this Lease in its entirety in the
event of an assignment of this Lease, or terminate this Lease as to the sublease
of one entire Building or as to both entire Buildings, as applicable, in either
case for the balance of the Lease Term, with a proportionate abatement in the
rent payable under this Lease if Tenant intends to sublease only one
(1) Building in its entirety, such termination to be effective on the date that
the proposed sublease or assignment would have commenced.  Landlord may
thereafter, at its option, assign or re-let any space so recaptured to any third
party, including without limitation the proposed transferee identified by
Tenant.  Notwithstanding anything to the contrary contained in this subsection
(c), if Landlord delivers a Recapture Notice, Tenant, by written notice to
Landlord given not later than seven (7) business days after receipt of the
Recapture Notice, may rescind its request for consent to the assignment or
sublease, in which event Landlord’s Recapture Notice shall be void and this
Lease shall remain unmodified and in full force and effect.

 

(d)        Should any Transfer occur, Tenant shall, except in connection with a
Permitted Transfer, promptly pay or cause to be paid to Landlord, as additional
rent, 50% of any amounts paid by the assignee or subtenant, however described
and whether funded during or after the Lease Term, to the extent such amounts
are in excess of the sum of (i) the scheduled Basic Rent payable by Tenant
hereunder (or, in the event of a subletting of only a portion of the Premises,
the Basic Rent allocable to such portion as reasonably determined by Landlord)
and (ii) the direct out-of-pocket costs, as evidenced by third party invoices
provided to Landlord, incurred by Tenant to effect the Transfer, including,
without limitation, brokerage commissions, advertising costs, legal fees and
construction costs incurred to prepare the Premise for the proposed transferee,
which costs shall be amortized over the remaining Term of this Lease or, if
shorter, over the term of the sublease.

 

(e)        The sale of all or substantially all of the assets of Tenant (other
than bulk sales in the ordinary course of business), the merger, non-bankruptcy
reorganization or consolidation of Tenant with another entity, the sale of
Tenant’s capital stock, or any other direct or indirect change of control of
Tenant, including, without limitation, change of control of Tenant’s parent
company or a merger by Tenant or its parent company, shall be deemed a Transfer
within the meaning and provisions of this Article.  Notwithstanding the
foregoing, Tenant may assign this Lease to a successor to Tenant by merger,
reorganization or consolidation, or to the purchaser of substantially all of
Tenant’s assets or stock, or assign this Lease or sublet all or a portion of the
Premises to an Affiliate (defined below), without the consent of Landlord but
subject to the provisions of Section 9.2, provided that all of the following
conditions are satisfied (each, a “Permitted Transfer”, and any entity with whom
any Permitted Transfer consummated, a “Permitted Transferee”):  (i) Tenant is
not then in Default hereunder; and (ii) Tenant gives Landlord written notice at
least 10 business days before such Permitted Transfer (or, if such notice is
prohibited by applicable Law or non-disclosure agreement, then as soon
thereafter as practicable).  Tenant’s notice to Landlord shall include
reasonable information and documentation evidencing the Permitted Transfer and
showing that each of the above conditions has been satisfied.  If requested by
Landlord, Tenant’s successor shall sign and deliver to Landlord a commercially
reasonable form of assumption agreement.  “Affiliate” shall mean an entity
controlled by, controlling or under common control with Tenant.  For purposes of
this Lease, a transfer or issuance of Tenant’s stock on the New York Stock
Exchange, American Stock Exchange or NASDAQ shall not be deemed an assignment or
subletting requiring Landlord’s consent.

 

9.2.   EFFECT OF TRANSFER.  No subletting or assignment, even with the consent
of Landlord, shall relieve Tenant, or any successor-in-interest to Tenant
hereunder, of its obligation to pay rent and to perform all its other
obligations under this Lease.  Each assignee, other than Landlord, shall be
deemed to assume all obligations of Tenant under this Lease and shall be liable
jointly and severally with Tenant for the payment of all rent, and for the due
performance of all of Tenant’s obligations, under this Lease.  Such joint and
several liability shall not be discharged or impaired by any subsequent
modification or extension of this Lease.  Consent by Landlord to one or more
transfers shall not operate as a waiver or estoppel to the future enforcement by
Landlord of its rights under this Lease.

 

9.3.   SUBLEASE REQUIREMENTS.  Any sublease, license, concession or other
occupancy agreement entered into by Tenant shall be subordinate and subject to
the provisions of this Lease, and if this Lease is terminated during the term of
any such agreement, Landlord shall have the right to:  (i) treat such agreement
as cancelled and repossess the subject space by any lawful means, or
(ii) require that such transferee attorn to and recognize Landlord as its
landlord (or licensor, as applicable) under such agreement.  Landlord shall not,
by reason of such attornment or the collection of sublease rentals, be deemed
liable to the subtenant for the performance of any of Tenant’s obligations under
the sublease. If Tenant is in Default (hereinafter defined), Landlord is
irrevocably authorized to direct any transferee under any such agreement to make
all payments under such agreement directly to Landlord (which Landlord shall
apply towards Tenant’s obligations under this Lease) until such Default is
cured.  No collection or acceptance of rent by Landlord from any transferee
shall be deemed a waiver of any provision of Article 9 of this Lease, an
approval of any transferee, or a release of Tenant from any obligation under
this Lease, whenever accruing.  In no event shall Landlord’s enforcement of any
provision of this Lease against any transferee be deemed a waiver of Landlord’s
right to enforce any term of this Lease against Tenant or any other person.

 

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ARTICLE 10.  INSURANCE AND INDEMNITY

 

10.1.   TENANT’S INSURANCE.  Tenant, at its sole cost and expense, shall provide
and maintain in effect the insurance described in Exhibit D.  Evidence of that
insurance must be delivered to Landlord prior to the Early Delivery Date or
Delivery Date, as Date.

 

10.2.   LANDLORD’S INSURANCE.  Landlord shall provide all risk property
insurance subject to standard exclusions (such as, but not limited to,
earthquake, terrorism and flood exclusions), covering the full replacement cost
of the Project so long as full replacement cost coverage is commercially
available at commercially reasonable rates.  In addition, Landlord may, at its
election, obtain insurance coverages for such other risks as Landlord or its
Mortgagees may from time to time deem appropriate, including earthquake,
terrorism, flood and commercial general liability coverage.  Landlord shall not
be required to carry insurance of any kind on any tenant improvements (including
the Tenant Improvements) or Alterations in the Premises installed by Tenant or
its contractors or otherwise removable by Tenant (collectively, “Tenant
Installations”), or on any trade fixtures, furnishings, equipment, interior
plate glass, signs or items of personal property in the Premises, and Landlord
shall not be obligated to repair or replace any of the foregoing items should
damage occur.  All proceeds of insurance maintained by Landlord upon the
Building and Project shall be the property of Landlord, whether or not Landlord
is obligated to or elects to make any repairs.

 

10.3.   TENANT’S INDEMNITY.  To the fullest extent permitted by law, but subject
to Section 10.5 below, Tenant shall defend, indemnify and hold harmless Landlord
and Landlord’s agents, employees, lenders, and affiliates, from and against any
and all negligence, claims, liabilities, damages, costs or expenses arising
either before or after the Commencement Date which arise from or are caused by
Tenant’s use or occupancy of the Building or the Common Areas, or from the
conduct of Tenant’s business, or from any activity, work, or thing done,
permitted or suffered by Tenant or any Tenant Parties in or about the Building
or the Common Areas, or from any Default in the performance of any obligation on
Tenant’s part to be performed under this Lease, or from any act, omission or
negligence on the part of Tenant or Tenant Parties.  Landlord may, at its
option, require Tenant to assume Landlord’s defense in any action covered by
this Section 10.3 through counsel reasonably satisfactory to Landlord. 
Notwithstanding the foregoing, Tenant shall not be obligated to indemnify
Landlord against any liability or expense to the extent it is ultimately
determined that the same was caused by the negligence or willful misconduct of
Landlord, its agents, contractors or employees.

 

10.4.   LANDLORD’S NONLIABILITY.  Unless caused by the gross negligence or
intentional misconduct of Landlord, its agents, employees or contractors but
subject to Section 10.5 below, Landlord shall not be liable to Tenant, its
employees, agents and invitees, and Tenant hereby waives all claims against
Landlord, its employees and agents for loss of or damage to any property, or any
injury to any person, resulting from any condition including, but not limited
to, acts or omissions (criminal or otherwise) of third parties, or their agents,
employees or invitees, fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak or flow from or into any part of the
Premises or from the breakage, leakage, obstruction or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning, electrical
works or other fixtures in the Building, whether the damage or injury results
from conditions arising in the Premises or in other portions of the Building. 
It is understood that any such condition may require the temporary evacuation or
closure of all or a portion of the Building.  Should Tenant elect to receive any
service from a concessionaire, licensee or third party tenant of Landlord,
Tenant shall not seek recourse against Landlord for any breach or liability of
that service provider.  Notwithstanding anything to the contrary contained in
this Lease, in no event shall Landlord be liable for Tenant’s loss or
interruption of business or income (including without limitation, Tenant’s
consequential damages, lost profits or opportunity costs), or for interference
with light or other similar intangible interests.

 

10.5.   WAIVER OF SUBROGATION.  Landlord and Tenant each hereby waives all
rights of recovery against the other on account of loss and damage occasioned to
the property of such waiving party to the extent that the waiving party is
entitled to proceeds for such loss and damage under any property insurance
policies carried or otherwise required to be carried by this Lease; provided
however, that the foregoing waiver shall not apply to the extent of Tenant’s
obligation to pay deductibles under any such policies and this Lease.  By this
waiver it is the intent of the parties that neither Landlord nor Tenant shall be
liable to any insurance company (by way of subrogation or otherwise) insuring
the other party for any loss or damage insured against under any property
insurance policies, even though such loss or damage might be occasioned by the
negligence of such party, its agents, employees, contractors or invitees.  The
foregoing waiver by Tenant shall also inure to the benefit of Landlord’s
management agent for the Building.

 

ARTICLE 11.  DAMAGE OR DESTRUCTION

 

11.1.   RESTORATION.

 

(a)                        If a Building is damaged as the result of an event of
casualty, then subject to the provisions below, Landlord shall repair that
damage as soon as reasonably possible unless Landlord reasonably determines
that:  (i) the Building has been materially damaged and there is less than 1
year of the Term remaining on the date of the casualty; (ii) any Mortgagee
(defined in Section 13.1) requires that the insurance proceeds be applied to the
payment of the mortgage debt; or (iii) proceeds necessary to pay the full cost
of the repair are not available from Landlord’s insurance, including without
limitation earthquake insurance(unless such proceeds are unavailable due to
Landlord’s failure to carry the

 

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insurance required under Section 10.2 above).  Should Landlord elect not to
repair the damage for one of the preceding reasons, Landlord shall so notify
Tenant in the “Casualty Notice” (as defined below), and this Lease shall
terminate as of the date of delivery of that notice.  Notwithstanding the
foregoing to the contrary, if (A) the damage involves one but not both of the
Buildings and is caused by any casualty other than earthquake, and (B) Landlord
elects to terminate this Lease because of insufficient insurance proceeds from
the insurance required to be carried by Landlord hereunder, Tenant shall have
the right, at Tenant’s sole election, to elect to contribute any shortfall by
delivering written notice of such election to Landlord together with an amount
equal to 50% of the shortfall to Landlord within thirty (30) days after Tenant’s
receipt of the Casualty Notice, in which case Landlord’s election to terminate
shall be of no further force or effect and Landlord shall repair the damage
pursuant to the provisions of this Section 11.1.  If Landlord is obligated to
repair the damage pursuant to the terms of the immediately preceding sentence,
Tenant shall contribute to Landlord in cash the remaining fifty percent (50%) of
the shortfall in funds prior to the date that Landlord notifies Tenant that
Landlord is ready to commence the repairs.  Such notice by Landlord to Tenant
shall be given to Tenant at least thirty (30) days prior to the date that
Landlord intends to commence the repairs.  Tenant shall have the right to
terminate this Lease if a casualty damaging a material portion of the Premises
occurs during the last twelve (12) months of the Term by delivering written
notice of such termination to Landlord within 30 days after Tenant’s receipt of
the Casualty Notice.

 

(b)                        As soon as reasonably practicable following the
casualty event but not later than 60 days thereafter, Landlord shall notify
Tenant in writing (“Casualty Notice”) of Landlord’s election, if applicable, to
terminate this Lease.  If this Lease is not so terminated, the Casualty Notice
shall set forth the anticipated period for repairing the casualty damage.  If
the anticipated repair period exceeds 365 days and if the damage is so extensive
as to reasonably prevent Tenant’s substantial use and enjoyment of the Premises,
then either party may elect to terminate this Lease by written notice to the
other within 10 days following delivery of the Casualty Notice.  If Tenant was
entitled to but elected not to exercise its right to terminate the Lease and
Landlord does not substantially complete the repair and restoration of the
Premises (excluding Tenant Installations) within 2 months after expiration of
the estimated period of time set forth in the Casualty Notice, which period
shall be extended to the extent of any Reconstruction Delays (defined below),
then Tenant may terminate this Lease by written notice to Landlord within 15
days after the expiration of such period, as the same may be extended.  For
purposes of this Lease, the term “Reconstruction Delays” shall mean:  (i) any
delays caused by the insurance adjustment process; (ii) any delays caused by
Tenant; and (iii) any delays caused by events of force majeure, which force
majeure delays shall not exceed 270 days in the aggregate.

 

(c)                         In the event that neither Landlord nor Tenant
terminates this Lease pursuant to Section 11.1(b), Landlord shall repair all
damage to the Premises (but not any Tenant Installations) or the Building and
restore it to the condition it was in immediately prior to the casualty as soon
as reasonably possible and this Lease shall continue in effect for the remainder
of the Term.  Tenant shall be responsible for restoring the Tenant Installations
to the condition they were in immediately prior to the casualty as soon as
reasonably possible.

 

(d)                        From and after the date of the casualty event, until
repairs have been completed, the Rent to be paid under this Lease shall be
abated in the same proportion that the Floor Area of the Premises that is
rendered unusable by the damage from time to time bears to the total Floor Area
of the Premises.

 

(e)                         Notwithstanding the provisions of subsections (a),
(b) and (c) of this Section 11.1, but subject to Section 10.5, the cost of any
repairs shall be borne by Tenant, and Tenant shall not be entitled to rental
abatement or termination rights, if the damage is due solely to the gross
negligence or willful misconduct of Tenant or any Tenant Parties.  In addition,
the provisions of this Section 11.1 shall not be deemed to require Landlord to
repair any Tenant Installations, fixtures and other items that Tenant is
obligated to insure pursuant to Exhibit D or under any other provision of this
Lease.

 

11.2.   LEASE GOVERNS.  Tenant agrees that the provisions of this Lease,
including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.

 

ARTICLE 12. EMINENT DOMAIN

 

Either party may terminate this Lease if one-third or more of the square footage
of the Premises or any other material part of the Premises is taken or condemned
for any public or quasi-public use under Law, by eminent domain or private
purchase in lieu thereof (a “Taking”).  Landlord shall also have the right to
terminate this Lease if there is a Taking of any portion of the Building or
Project which would have a material adverse effect on Landlord’s ability to
profitably operate the remainder of the Project.  The termination shall be
effective as of the effective date of any order granting possession to, or
vesting legal title in, the condemning authority.  If this Lease is not
terminated, Basic Rent and Tenant’s Share of Operating Expenses shall be
appropriately adjusted to account for any reduction in the square footage of the
Building or Premises. All compensation awarded for a Taking shall be the
property of Landlord and the right to receive compensation or proceeds in
connection with a Taking are expressly waived by Tenant; provided, however,
Tenant may file a separate claim for Tenant’s personal property and Tenant’s
reasonable relocation costs, moving expenses and the unamortized cost of any
Alterations installed in the Premises at Tenant’s sole cost and expense,
provided the filing of the claim does not diminish the amount of Landlord’s
award.  If only a part of the Premises is subject to a Taking and this Lease is
not terminated, Landlord, with reasonable diligence, will restore the remaining
portion of the Premises as nearly as

 

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practicable to the condition immediately prior to the Taking.  For avoidance of
doubt if more than 50% of the Premises is subject to a Taking for a period of 12
consecutive months, Tenant shall have the right to terminate this Lease within
60 days after the earlier to occur of (i) effective date of such Taking if such
temporary Taking is specified to be period of 12 consecutive months or more, or
(ii) the expiration of 12 consecutive months after the occupancy by the
applicable authority if the term of the Taking is indeterminate when such
occupancy commences.  Tenant agrees that the provisions of this Lease shall
govern any Taking and shall accordingly supersede any contrary statute or
rule of law.

 

ARTICLE 13.  SUBORDINATION; ESTOPPEL CERTIFICATE

 

13.1.   SUBORDINATION.  Tenant accepts this Lease subject and subordinate to any
mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or
subsequently arising upon the Premises, the Building or the Project, and to
renewals, modifications, refinancings and extensions thereof (collectively
referred to as a “Mortgage”). The party having the benefit of a Mortgage shall
be referred to as a “Mortgagee”. This clause shall be self-operative, but within
ten (10) business days after receipt of written request from a Mortgagee, Tenant
shall execute a commercially reasonable subordination and attornment agreement
in favor of the Mortgagee, provided such agreement provides a non-disturbance
covenant benefiting Tenant.  Alternatively, a Mortgagee shall have the right at
any time to subordinate its Mortgage to this Lease.  Tenant, without charge,
shall attorn to any successor to Landlord’s interest in this Lease in the event
of a foreclosure of any mortgage, and the successor to Landlord’s’ interest in
this Lease shall be bound by the provisions hereof.  Tenant agrees that any
purchaser at a foreclosure sale or lender taking title under a deed in lieu of
foreclosure shall not be responsible for any act or omission of a prior landlord
except for on-going maintenance and repair obligations, shall not, except as
expressly set forth in this Lease, be subject to any offsets or defenses Tenant
may have against a prior landlord, and shall not be liable for the return of the
Security Deposit not actually recovered by such purchaser nor bound by any rent
paid in advance of the calendar month in which the transfer of title occurred;
provided that the foregoing shall not release the applicable prior landlord from
any liability for those obligations.  Tenant acknowledges that Landlord’s
Mortgagees and their successors-in-interest are intended third party
beneficiaries of this Section 13.1.  Landlord warrants to Tenant that there are
no Mortgages encumbering the Building as of the execution of this Lease. 
Notwithstanding the foregoing in this Section to the contrary, as a condition
precedent to the future subordination of this Lease to a future Mortgage,
Landlord shall be required, upon Tenant’s request, to provide Tenant with a
commercially reasonable form of non-disturbance, subordination, and attornment
agreement in favor of Tenant from any Mortgagee who comes into existence after
the Commencement Date.

 

13.2.   ESTOPPEL CERTIFICATE.  Tenant shall, within 10 business days after
receipt of a written request from Landlord, execute and deliver a commercially
reasonable estoppel certificate in favor of those parties as are reasonably
requested by Landlord (including a Mortgagee or a prospective purchaser of the
Building or the Project).

 

ARTICLE 14.  DEFAULTS AND REMEDIES

 

14.1.   TENANT’S DEFAULTS.  In addition to any other event of default set forth
in this Lease, the occurrence of any one or more of the following events shall
constitute a “Default” by Tenant:

 

(a)                        The failure by Tenant to make any payment of Rent
required to be made by Tenant, as and when due, where the failure continues for
a period of 3 days after written notice from Landlord to Tenant.  The term
“Rent” as used in this Lease shall be deemed to mean the Basic Rent and all
other sums required to be paid by Tenant to Landlord pursuant to the terms of
this Lease.

 

(b)                        The assignment, sublease, encumbrance or other
Transfer of the Lease by Tenant, either voluntarily or by operation of law,
whether by judgment, execution, transfer by intestacy or testacy, or other
means, without the prior written consent of Landlord unless otherwise authorized
in Article 9 of this Lease.

 

(c)                         The discovery by Landlord that any financial
statement provided by Tenant, or by any affiliate, successor or guarantor of
Tenant, was materially false.

 

(d)                        Except where a specific time period is otherwise set
forth for Tenant’s performance in this Lease (in which event the failure to
perform by Tenant within such time period shall be a Default), the failure or
inability by Tenant to observe or perform any of the covenants or provisions of
this Lease to be observed or performed by Tenant, other than as specified in any
other subsection of this Section 14.1, where the failure continues for a period
of 30 days after written notice from Landlord to Tenant.  However, if the nature
of the failure is such that more than 30 days are reasonably required for its
cure, then Tenant shall not be deemed to be in Default if Tenant commences the
cure within 30 days, and thereafter diligently pursues the cure to completion.

 

The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law, and Landlord shall not be required to give any
additional notice under California Code of Civil Procedure Section 1161, or any
successor statute, in order to be entitled to commence an unlawful detainer
proceeding.

 

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14.2.   LANDLORD’S REMEDIES.

 

(a)                        Upon the occurrence of any Default by Tenant, then in
addition to any other remedies available to Landlord, Landlord may exercise the
following remedies:

 

(i)                   Landlord may terminate Tenant’s right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord.  Such
termination shall not affect any accrued obligations of Tenant under this
Lease.  Upon termination, Landlord shall have the right to reenter the Premises
and remove all persons and property.  Landlord shall also be entitled to recover
from Tenant:

 

(1)               The worth at the time of award of the unpaid Rent which had
been earned at the time of termination;

 

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

 

(3)               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 loss that Tenant proves could be reasonably avoided;

 

(4)               Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result from Tenant’s default, including, but not limited to, the cost of
recovering possession of the Premises, commissions and other expenses of
reletting, including necessary repair, renovation, improvement and alteration of
the Premises for a new tenant, reasonable attorneys’ fees, and any other
reasonable costs; and

 

(5)               At Landlord’s election, all other amounts in addition to or in
lieu of the foregoing as may be permitted by law.  Any sum, other than Basic
Rent, shall be computed on the basis of the average monthly amount accruing
during the 24 month period immediately prior to Default, except that if it
becomes necessary to compute such rental before the 24 month period has
occurred, then the computation shall be on the basis of the average monthly
amount during the shorter period.  As used in subparagraphs (1) and (2) above,
the “worth at the time of award” shall be computed by allowing interest at the
rate of 10% per annum.  As used in subparagraph (3) above, the “worth at the
time of award” shall be computed by discounting the amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus 1%.

 

(ii)                Landlord may elect not to terminate Tenant’s right to
possession of the Premises, in which event Landlord may continue to enforce all
of its rights and remedies under this Lease, including the right to collect all
rent as it becomes due.  Efforts by the Landlord to maintain, preserve or relet
the Premises, or the appointment of a receiver to protect the Landlord’s
interests under this Lease, shall not constitute a termination of the Tenant’s
right to possession of the Premises.  In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the Premises
subject to the reasonable standards for Landlord’s consent as are contained in
this Lease.

 

(b)                        The various rights and remedies reserved to Landlord
in this Lease or otherwise shall be cumulative and, except as otherwise provided
by California law, Landlord may pursue any or all of its rights and remedies at
the same time.  No delay or omission of Landlord to exercise any right or remedy
shall be construed as a waiver of the right or remedy or of any breach or
Default by Tenant.  The acceptance by Landlord of rent shall not be a (i) waiver
of any preceding breach or Default by Tenant of any provision of this Lease,
other than the failure of Tenant to pay the particular rent accepted, regardless
of Landlord’s knowledge of the preceding breach or Default at the time of
acceptance of rent, or (ii) a waiver of Landlord’s right to exercise any remedy
available to Landlord by virtue of the breach or Default.  The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant’s estate shall not waive or cure a Default
under Section 14.1.  No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord’s right to recover the balance of the rent or pursue any other remedy
available to it.  Tenant hereby waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Section 1174 or 1179, or
under any successor statute, in the event this Lease is terminated by reason of
any Default by Tenant.  No act or thing done by Landlord or Landlord’s agents
during the Term shall be deemed an acceptance of a surrender of the Premises,
and no agreement to accept a surrender shall be valid unless in writing and
signed by Landlord.  No employee of Landlord or of Landlord’s agents shall have
any power to accept the keys to the Premises prior to the termination of this
Lease, and the delivery of the keys to any employee shall not operate as a
termination of the Lease or a surrender of the Premises.

 

(c)                         If a Default by Tenant occurs, Landlord shall not be
entitled to recover any resulting consequential damages, lost profit or
opportunity costs, provided that nothing contained in this Section 14.2(c) shall
limit or otherwise restrict Landlord’s right to recover damages resulting from
Tenant’s breach

 

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of its obligations under Sections 5.3, 7.4 and/or 15.1 of this Lease, or
Landlord’s right to recover any amounts described under
Section 14.2(a)(i)(1),(2), (3) and (4) above.

 

14.3.   LATE PAYMENTS.  Any Rent due under this Lease that is not paid to
Landlord within 5 days of the date when due shall bear interest at the maximum
rate permitted by law from the date due until fully paid.  The payment of
interest shall not cure any Default by Tenant under this Lease.  In addition,
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 extremely difficult and impracticable to ascertain.  Those
costs may include, but are not limited to, administrative, processing and
accounting charges, and late charges which may be imposed on Landlord by the
terms of any ground lease, mortgage or trust deed covering the Premises. 
Accordingly, if any rent due from Tenant shall not be received by Landlord or
Landlord’s designee within 5 days after the date due, then Tenant shall pay to
Landlord, in addition to the interest provided above, a late charge for each
delinquent payment equal to the greater of (i) 5% of that delinquent payment or
(ii)  $100.00, provided, however, that the foregoing late charge shall not apply
to the first such late payment in any twelve (12)-month period of the Term of
this Lease until written notice to Tenant and the expiration of three
(3) business days without cure.  Acceptance of a late charge by Landlord shall
not constitute a waiver of Tenant’s Default with respect to the overdue amount,
nor shall it prevent Landlord from exercising any of its other rights and
remedies.

 

14.4.   RIGHT OF LANDLORD TO PERFORM.  If Tenant is in Default of any of its
obligations under the Lease, Landlord shall have the right, upon five (5) days’
written notice to Tenant, to perform such obligations.  Tenant shall reimburse
Landlord for the actual and reasonable cost of such performance within ten
(10) business days after receipt of written demand together with an
administrative charge equal to 10% of the cost of the work performed by
Landlord.

 

14.5.   DEFAULT BY LANDLORD.  Landlord shall not be deemed to be in default in
the performance of any obligation under this Lease unless and until it has
failed to perform the obligation within 30 days after written notice by Tenant
to Landlord specifying in reasonable detail the nature and extent of the
failure; provided, however, that if the nature of Landlord’s obligation is such
that more than 30 days are required for its performance, then Landlord shall not
be deemed to be in default if it commences performance within the 30 day period
and thereafter diligently pursues the cure to completion. Tenant hereby waives
any right to terminate or rescind this Lease as a result of any default by
Landlord hereunder or any breach by Landlord of any promise or inducement
relating hereto, and Tenant agrees that its remedies shall be limited to a suit
for actual damages and/or injunction and shall in no event include any
consequential damages, lost profits or opportunity costs.  Nothing in this
Section 14.5 shall be deemed to amend, modify or otherwise affect Tenant’s
rights pursuant to Section 7.6 above.

 

14.6.   EXPENSES AND LEGAL FEES.  Should either Landlord or Tenant bring any
action in connection with this Lease, the prevailing party shall be entitled to
recover as a part of the action its reasonable attorneys’ fees, and all other
reasonable costs.  The prevailing party for the purpose of this paragraph shall
be determined by the trier of the facts.

 

14.7.   WAIVER OF JURY TRIAL/JUDICIAL REFERENCE.

 

(a)                        LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS
AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS
RIGHT TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE
AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST
ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED
ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF
INJURY OR DAMAGE.

 

(b)                        In the event that the jury waiver provisions of
Section 14.7(a) are not enforceable under California law, then, unless otherwise
agreed to by the parties, the provisions of this Section 14.7(b) shall apply. 
Landlord and Tenant agree that any disputes arising in connection with this
Lease (including but not limited to a determination of any and all of the issues
in such dispute, whether of fact or of law) shall be resolved (and a decision
shall be rendered) by way of a general reference as provided for in Part 2,
Title 8, Chapter 6 (§§ 638 et. seq.) of the California Code of Civil Procedure,
or any successor California statute governing resolution of disputes by a court
appointed referee.  Nothing within this Section 14.7 shall apply to an unlawful
detainer action.

 

14.8   SATISFACTION OF JUDGMENT.  The obligations of Landlord do not constitute
the personal obligations of the individual partners, trustees, directors,
officers, members or shareholders of Landlord or its constituent partners or
members. Should Tenant recover a money judgment against Landlord, such judgment
shall be satisfied only from the interest of Landlord in the Project and out of
the rent or other income from such property, including sales, condemnation and
insurance proceeds, receivable by Landlord, and no action for any deficiency may
be sought or obtained by Tenant.

 

ARTICLE 15.  END OF TERM

 

15.1.   HOLDING OVER.  Upon written notice to Landlord given no later than
ninety (90) days prior to the expiration of the Term, so long as no Default on
the part of Tenant then exists under this Lease, Tenant shall have the one-time
right to hold over in the entire Premises upon each and all of the terms

 

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and conditions set forth in this Lease for up to three (3) successive periods of
thirty (30) days after the expiration of the initial Term (such thirty (30) day
period(s), if applicable, being the “Permitted Holdover Period”), it being the
intent of the parties that the Permitted Holdover Period shall in no event
exceed ninety (90) days, in the aggregate.  In consideration of Tenant’s
occupancy of the Premises during the Permitted Holdover Period (if applicable),
Tenant shall pay in advance, the amount equal to 100% of the monthly installment
of Basic Rent in effect for the Premises (in its entirety) for the last month of
the initial Lease Term (such amount being the “Permitted Holdover Period Rent”),
in addition to, and not in lieu of, all other payments required to be made by
Tenant under this Lease.  If (A) Landlord fails to receive the ninety (90) days’
written notice from Tenant described in the first sentence of this Section 15.1
above, and Tenant holds over for any period after the Expiration Date (or
earlier termination of the Term), or (B) after the Permitted Holdover Period (if
applicable), Tenant holds over for any period after the Expiration Date (or
earlier termination of the Term), then in either of such events, possession
shall be subject to all of the terms of this Lease (including, without
limitation, the obligation to pay Tenant’s Share of Operating Expenses), except
that the monthly Basic Rent shall be 150% of the total monthly Basic Rent for
the month immediately preceding the date of termination for each month of
holdover thereafter.  The acceptance by Landlord of monthly hold-over rental in
a lesser amount shall not constitute a waiver of Landlord’s right to recover the
full amount due unless otherwise agreed in writing by Landlord.  Subject to the
terms and conditions of this Section 15.1 above, if Tenant fails to surrender
the Premises within 15 days after the expiration of this Lease despite demand to
do so by Landlord, Tenant shall indemnify and hold Landlord harmless from all
loss or liability, including without limitation, any claims made by any
succeeding tenant relating to such failure to surrender (provided that Landlord
shall have delivered written notice to Tenant of the existence of any such
succeeding tenant or prospective tenant, and Tenant holds over for a period in
excess of thirty (30) days after Landlord’s delivery of such notice).  The
foregoing provisions of this Section 15.1 are in addition to and do not affect
Landlord’s right of re-entry or any other rights of Landlord under this Lease or
at law.

 

15.2.   SURRENDER OF PREMISES; REMOVAL OF PROPERTY.  Upon the Expiration Date or
upon any earlier termination of this Lease, Tenant shall quit and surrender
possession of the Premises to Landlord in as good order, condition and repair as
when received or as hereafter may be improved by Landlord or Tenant, reasonable
wear and tear, casualty, eminent domain and repairs which are Landlord’s
obligation excepted, and shall remove or fund to Landlord the cost of removing
all wallpapering, voice and/or data transmission cabling installed by or for
Tenant and Required Removables, together with all personal property and debris,
and shall perform all work required under Section 7.3 of this Lease.  If Tenant
shall fail to comply with the provisions of this Section 15.2, Landlord may upon
five (5) days’ written notice to Tenant effect the removal and/or make any
repairs, and the cost to Landlord shall be additional rent payable by Tenant
within ten (10) days after receipt of written demand therefor.

 

ARTICLE 16.  PAYMENTS AND NOTICES

 

All sums payable by Tenant to Landlord shall be paid, without deduction or
offset, in lawful money of the United States to Landlord at its address set
forth in Item 12 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing.  Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within thirty (30) days after receipt of
written demand.  All payments requiring proration shall be prorated on the basis
of the number of days in the pertinent calendar month or year, as applicable. 
Any notice, election, demand, consent, approval or other communication to be
given or other document to be delivered by either party to the other may be
delivered to the other party, at the address set forth in Item 12 of the Basic
Lease Provisions, by personal service, or by any courier or “overnight” express
mailing service.  Either party may, by written notice to the other, served in
the manner provided in this Article, designate a different address.  The refusal
to accept delivery of a notice, or the inability to deliver the notice (whether
due to a change of address for which notice was not duly given or other good
reason), shall be deemed delivery and receipt of the notice as of the date of
attempted delivery.  If more than one person or entity is named as Tenant under
this Lease, service of any notice upon any one of them shall be deemed as
service upon all of them.

 

ARTICLE 17.  RULES AND REGULATIONS

 

Tenant agrees to comply with the Rules and Regulations attached as Exhibit E,
and any reasonable and nondiscriminatory amendments, modifications and/or
additions as may be adopted and published by written notice to tenants by
Landlord for the safety, care, security, good order, or cleanliness of the
Project, including the Common Areas.  Landlord shall not be liable to Tenant for
any violation of the Rules and Regulations or the breach of any covenant or
condition in any lease or any other act or conduct by any other tenant, and the
same shall not constitute a constructive eviction hereunder.  One or more
waivers by Landlord of any breach of the Rules and Regulations by Tenant or by
any other tenant(s) shall not be a waiver of any subsequent breach of that
rule or any other.  Tenant’s failure to keep and observe the Rules and
Regulations shall constitute a default under this Lease.  In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall be
controlling.

 

ARTICLE 18.  BROKER’S COMMISSION

 

The parties recognize as the broker(s) who negotiated this Lease the
firm(s) whose name(s) is (are) stated in Item 10 of the Basic Lease Provisions,
and agree that Landlord shall be responsible for the payment of brokerage
commissions to those broker(s) unless otherwise provided in this Lease.  It is
understood that Landlord’s Broker represents only Landlord in this transaction
and Tenant’s Broker (if

 

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any) represents only Tenant.  Each party warrants that it has had no dealings
with any other real estate broker or agent in connection with the negotiation of
this Lease, and agrees to indemnify and hold the other party harmless from any
cost, expense or liability (including reasonable attorneys’ fees) for any
compensation, commissions or charges claimed by any other real estate broker or
agent employed or claiming to represent or to have been employed by the
indemnifying party in connection with the negotiation of this Lease.  The
foregoing agreement shall survive the termination of this Lease.

 

ARTICLE 19.  TRANSFER OF LANDLORD’S INTEREST

 

In the event of any transfer of Landlord’s interest in the Premises, provided
that Tenant is duly notified of such transfer and the transferee (other than a
Mortgagee) shall assume the obligations of “Landlord” under this Lease accruing
from and after the effective date of such transfer, the transferor shall be
automatically relieved of all obligations on the part of Landlord accruing under
this Lease from and after the effective date of such transfer.  Any funds held
by the transferor in which Tenant has an interest, including without limitation,
the Security Deposit, shall be turned over, subject to that interest, to the
transferee.  No Mortgagee to which this Lease is or may be subordinate shall be
responsible in connection with the Security Deposit unless the Mortgagee
actually receives the Security Deposit.  It is intended that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject to
the foregoing, be binding on Landlord, its successors and assigns, only during
and in respect to their respective successive periods of ownership.

 

ARTICLE 20.  INTERPRETATION

 

20.1.   NUMBER.  Whenever the context of this Lease requires, the words
“Landlord” and “Tenant” shall include the plural as well as the singular.

 

20.2.   HEADINGS.  The captions and headings of the articles and sections of
this Lease are for convenience only, are not a part of this Lease and shall have
no effect upon its construction or interpretation.

 

20.3.   JOINT AND SEVERAL LIABILITY.  If more than one person or entity is named
as Tenant, the obligations imposed upon each shall be joint and several and the
act of or notice from, or notice or refund to, or the signature of, any one or
more of them shall be binding on all of them with respect to the tenancy of this
Lease, including, but not limited to, any renewal, extension, termination or
modification of this Lease.

 

20.4.   SUCCESSORS.  Subject to Sections 13.1 and 22.3 and to Articles 9 and 19
of this Lease, all rights and liabilities given to or imposed upon Landlord and
Tenant shall extend to and bind their respective heirs, executors,
administrators, successors and assigns.  Nothing contained in this Section 20.4
is intended, or shall be construed, to grant to any person other than Landlord
and Tenant and their successors and assigns any rights or remedies under this
Lease.

 

20.5.   TIME OF ESSENCE.  Time is of the essence with respect to the performance
of every provision of this Lease in which time of performance is a factor.

 

20.6.   CONTROLLING LAW/VENUE.  This Lease shall be governed by and interpreted
in accordance with the laws of the State of California.  Should any litigation
be commenced between the parties in connection with this Lease, such action
shall be prosecuted in the applicable State Court of California in the county in
which the Building is located.

 

20.7.   SEVERABILITY.  If any term or provision of this Lease, the deletion of
which would not adversely affect the receipt of any material benefit by either
party or the deletion of which is consented to by the party adversely affected,
shall be held invalid or unenforceable to any extent, the remainder of this
Lease shall not be affected and each term and provision of this Lease shall be
valid and enforceable to the fullest extent permitted by law.

 

20.8.   WAIVER.  One or more waivers by Landlord or Tenant of any breach of any
term, covenant or condition contained in this Lease shall not be a waiver of any
subsequent breach of the same or any other term, covenant or condition.  Consent
to any act by one of the parties shall not be deemed to render unnecessary the
obtaining of that party’s consent to any subsequent act.  No breach of this
Lease shall be deemed to have been waived unless the waiver is in a writing
signed by the waiving party.

 

20.9.   INABILITY TO PERFORM.  In the event that either party shall be delayed
or hindered in or prevented from the performance of any work or in performing
any act required under this Lease by reason of any cause beyond the reasonable
control of that party, then the performance of the work or the doing of the act
shall be excused for the period of the delay and the time for performance shall
be extended for a period equivalent to the period of the delay.  The provisions
of this Section 20.9 shall not operate to excuse Tenant from the prompt payment
of Rent.

 

20.10.   ENTIRE AGREEMENT.  This Lease and its exhibits and other attachments
cover in full each and every agreement of every kind between the parties
concerning the Premises, the Building, and the Project, and all preliminary
negotiations, oral agreements, understandings and/or practices, except those
contained in this Lease, are superseded and of no further effect.  Tenant waives
its rights to rely on any representations or promises made by Landlord or others
which are not contained in this Lease.  No verbal

 

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agreement or implied covenant shall be held to modify the provisions of this
Lease, any statute, law, or custom to the contrary notwithstanding.

 

20.11.   QUIET ENJOYMENT.  Upon the observance and performance of all the
covenants, terms and conditions on Tenant’s part to be observed and performed,
and subject to the other provisions of this Lease, Tenant shall have the right
of quiet enjoyment and use of the Premises for the Term without hindrance or
interruption by Landlord or any other person claiming by or through Landlord.

 

20.12.   SURVIVAL.  All covenants of Landlord or Tenant which reasonably would
be intended to survive the expiration or sooner termination of this Lease,
including without limitation any warranty or indemnity hereunder, shall so
survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.

 

ARTICLE 21.  EXECUTION AND RECORDING

 

21.1.   COUNTERPARTS; DIGITAL SIGNATURES.  This Lease may be executed in one or
more counterparts, each of which shall constitute an original and all of which
shall be one and the same agreement. The parties agree to accept a digital image
(including but not limited to an image in the form of a PDF, JPEG, GIF file,
DocuSign document or other e-signature) of this Lease, if applicable, reflecting
the execution of one or both of the parties, as a true and correct original.

 

21.2.   CORPORATE AND PARTNERSHIP AUTHORITY.  If Tenant is a corporation,
limited liability company or partnership, each individual executing this Lease
on behalf of the entity represents and warrants that such individual is duly
authorized to execute and deliver this Lease and that this Lease is binding upon
the corporation, limited liability company or partnership in accordance with its
terms.

 

21.3.   EXECUTION OF LEASE; NO OPTION OR OFFER.  The submission of this Lease to
Tenant shall be for examination purposes only, and shall not constitute an offer
to or option for Tenant to lease the Premises.  Neither party shall be bound by
the terms and conditions of this Lease until the execution and delivery hereof
by both Landlord and Tenant.

 

21.4.   RECORDING.  Tenant shall not record this Lease without the prior written
consent of Landlord.  Tenant, upon the request of Landlord, shall execute and
acknowledge a “short form” memorandum of this Lease for recording purposes.

 

21.5.   AMENDMENTS.  No amendment or mutual termination of this Lease shall be
effective unless in writing signed by authorized signatories of Tenant and
Landlord, or by their respective successors in interest.  No actions, policies,
oral or informal arrangements, business dealings or other course of conduct by
or between the parties shall be deemed to modify this Lease in any respect.

 

21.6.   BROKER DISCLOSURE.  By the execution of this Lease, each of Landlord and
Tenant hereby acknowledge and confirm (a) receipt of a copy of a Disclosure
Regarding Real Estate Agency Relationship conforming to the requirements of
California Civil Code 2079.16, and (b) the agency relationships specified in
Item 10 of the Basic Lease Provisions, which acknowledgement and confirmation is
expressly made for the benefit of Tenant’s Broker identified in Item 10 of the
Basic Lease Provisions.  If there is no Tenant’s Broker so identified in Item 10
of the Basic Lease Provisions, then such acknowledgement and confirmation is
expressly made for the benefit of Landlord’s Broker.  By the execution of this
Lease, Landlord and Tenant are executing the confirmation of the agency
relationships set forth in Item 10 of the Basic Lease Provisions.

 

ARTICLE 22.  MISCELLANEOUS

 

22.1.   NONDISCLOSURE OF LEASE TERMS.  Tenant and Landlord acknowledge that the
content of this Lease contains confidential information.  Except to the extent
disclosure is required by law, Landlord and Tenant shall use commercially
reasonable efforts to keep the content of this Lease confidential and shall not
disclose such confidential information to any person or entity other than their
respective financial, legal, space planning and other consultants, provided,
however, that either party may disclose the terms to their prospective lenders,
successors-in-interest and subtenants or assignees under this Lease or pursuant
to legal requirement.  Additionally, any press release or other public statement
regarding the negotiation of or existence of, this Lease and/or Tenant’s pending
or actual occupancy of the Project, must be mutually approved by both Landlord
and Tenant prior to any distribution of same.

 

22.2.   TENANT’S FINANCIAL STATEMENTS.  The application, financial statements
and tax returns, if any, submitted and certified to by Tenant as an accurate
representation of its financial condition have been prepared, certified and
submitted to Landlord as an inducement and consideration to Landlord to enter
into this Lease.  Not more than once each calendar year except if Tenant is in
default hereunder beyond applicable notice and cure periods or in the event of a
sale or refinancing of the Project, Tenant shall during the Term furnish
Landlord with current annual financial statements accurately reflecting Tenant’s
financial condition upon written request from Landlord within 10 business days
following receipt of Landlord’s written request; provided, however, that so long
as Tenant is a publicly traded corporation on a nationally recognized stock
exchange, the foregoing obligation to deliver the statements shall be waived.

 

22.3.   MORTGAGEE PROTECTION.  No act or failure to act on the part of Landlord
which would otherwise entitle Tenant to be relieved of its obligations hereunder
or to terminate this Lease shall result

 

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in such a release or termination unless (a) Tenant has given notice by
registered or certified mail or nationally recognized overnight courier to any 
Mortgagee of a Mortgage covering the Building whose address has been furnished
to Tenant and (b) such Mortgagee is afforded a reasonable opportunity to cure
the default by Landlord (which shall in no event be less than 60 days),
including, if necessary to effect the cure, time to obtain possession of the
Building by power of sale or judicial foreclosure provided that such foreclosure
remedy is diligently pursued.  Tenant shall comply with any written directions
by any Mortgagee to pay Rent due hereunder directly to such Mortgagee without
determining whether a default exists under such Mortgagee’s Mortgage.

 

22.4.   SDN LIST.  Tenant hereby represents and warrants that neither Tenant nor
any officer, director or employee of Tenant (collectively, “Tenant Entities”) is
listed as a Specially Designated National and Blocked Person (“SDN”) on the list
of such persons and entities issued by the U.S. Treasury Office of Foreign
Assets Control (OFAC).  In the event Tenant or any Tenant Entity is or becomes
listed as an SDN and is not removed from that list within ninety (90) days after
receipt of written confirmation that such Tenant Entity is listed as an SDN,
Tenant shall be deemed in breach of this Lease and Landlord shall have the right
to terminate this Lease immediately upon written notice to Tenant.

 

22.5     Force Majeure.  Whenever a period of time is herein prescribed for
action (other than the payment of money) to be taken by Landlord or Tenant, such
party shall not be liable or responsible for, and there shall be excluded from
the computation for any such period of time, any of the following (a “Force
Majeure Delay”):  strike, riots, act of God, lockout, or other labor or
industrial disturbance, shortage of labor or materials, civil disturbance,
judicial order, governmental rule or regulation, inability to obtain building
permits or other governmental approvals, act of public enemy, terrorist attack,
war, sabotage, blockade, embargo or inability to secure customary materials or
supplies.

 

22.6     Applicable Law.  For purposes of this Lease, “Law”  or “Laws” shall
mean all judicial decisions, statutes, constitutions, ordinances, resolutions,
regulations, orders, or other requirements of any municipal, county, state,
federal, or other government agency or authority having jurisdiction over the
Premises, the Building and the Project.

 

 

LANDLORD:

 

TENANT:

 

 

 

PATHLINE LLC,

 

PROOFPOINT, INC.,

a Delaware limited liability company

 

a Delaware corporation

 

 

 

 

 

 

By:

/s/ Ray Wirta

 

By:

/s/ Paul Auvil

Printed Name: Ray Wirta

 

Printed Name: Paul Auvil

Title: President

 

Title: Chief Financial Officer

 

 

 

 

 

 

By:

/s/ Douglas G. Holte

 

 

 

Name: Douglas G. Holte

 

 

Title: Division President

 

 

 

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EXHIBIT A

 

DESCRIPTION OF PREMISES

 

The Premises consist of Buildings 9 and 10 below.

 

[g371661ki05i001.jpg]

 

1

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EXHIBIT B

 

OPERATING EXPENSES

(Net)

 

(a)        From and after the Commencement Date, Tenant shall pay to Landlord,
as additional rent, Tenant’s Share of all Operating Expenses, as defined in
Section (f) below, incurred by Landlord in the operation of the Building and the
Project.  The term “Tenant’s Share” means one hundred percent (100%) of
Operating Expenses.  Landlord, as an Operating Expense, may charge a management
fee not to exceed three percent (3%) of the gross rents of the Project.

 

(b)        Commencing prior to the start of the first full “Expense Recovery
Period” of the Lease (as defined in Item 7 of the Basic Lease Provisions), and
prior to the start of each full or partial Expense Recovery Period thereafter,
Landlord shall give Tenant a written estimate of the amount of Tenant’s Share of
Operating Expenses for the applicable Expense Recovery Period.  Tenant shall pay
the estimated amounts to Landlord in equal monthly installments, in advance,
concurrently with payments of Basic Rent.  If Landlord has not furnished its
written estimate for any Expense Recovery Period by the time set forth above,
Tenant shall continue to pay monthly the estimated Tenant’s Share of Operating
Expenses in effect during the prior Expense Recovery Period; provided that when
the new estimate is delivered to Tenant, Tenant shall, within thirty (30) days
after receipt of Landlord’s estimate, pay any accrued estimated Tenant’s Share
of Operating Expenses based upon the new estimate.  Landlord may from time to
time change the Expense Recovery Period to reflect a calendar year or a new
fiscal year of Landlord, as applicable, in which event Tenant’s Share of
Operating Expenses shall be equitably prorated for any partial year.

 

(c)        Within 180 days after the end of each Expense Recovery Period,
Landlord shall furnish to Tenant a statement (a “Reconciliation Statement”)
showing in reasonable detail the actual or prorated Tenant’s Share of Operating
Expenses incurred by Landlord during such Expense Recovery Period, and the
parties shall within 30 days thereafter make any payment or allowance necessary
to adjust Tenant’s estimated payments of Tenant’s Share of Operating Expenses,
if any, to the actual Tenant’s Share of Operating Expenses as shown by the
Reconciliation Statement.  Any delay or failure by Landlord in delivering any
Reconciliation Statement shall not constitute a waiver of Landlord’s right to
require Tenant to pay Tenant’s Share of Operating Expenses pursuant hereto.  Any
amount due Tenant shall be credited against installments next coming due under
this Exhibit B, and any deficiency shall be paid by Tenant within thirty (30)
days after receipt of the Reconciliation Statement.  Should Tenant fail to
object in writing to Landlord’s determination of Tenant’s Share of Operating
Expenses within 90 days following delivery of Landlord’s Reconciliation
Statement, Landlord’s determination of Tenant’s Share of Operating Expenses for
the applicable Expense Recovery Period shall be conclusive and binding on Tenant
for all purposes and any future claims by Tenant to the contrary shall be
barred.  Notwithstanding the foregoing, Tenant shall not be responsible for
Tenant’s Share of any Project Costs attributable to any Expense Recovery Period
which are first billed to Tenant more than eighteen (18) months after such
period, provided that in any event Tenant shall be responsible for Tenant’s
Share of Property Taxes levied by a governmental authority at any time following
the Expiration Date which are attributable to any Expense Recovery Period.

 

(d)        Even though this Lease has terminated and the Tenant has vacated the
Premises, when the final determination is made of Tenant’s Share of Operating
Expenses for the Expense Recovery Period in which this Lease terminates, Tenant
shall within 30 days of written notice pay the entire increase over the
estimated Tenant’s Share of Operating Expenses already paid.  Conversely, any
overpayment by Tenant shall be rebated by Landlord to Tenant not later than 30
days after such final determination.  However, in lieu thereof, Landlord may
deliver a reasonable estimate of the anticipated reconciliation amount to Tenant
prior to the Expiration Date of the Term, in which event the appropriate party
shall fund the amount by the Expiration Date.

 

(e)        If, not more than once during any Expense Recovery Period, any one or
more of the Operating Expenses are increased to a rate(s) or amount(s) in excess
of the rate(s) or amount(s) used in calculating the estimated Tenant’s Share of
Operating Expenses for the year, then the estimate of Tenant’s Share of
Operating Expenses may be increased by written notice from Landlord for the
month in which such rate(s) or amount(s) becomes effective and for all
succeeding months by an amount equal to the estimated amount of Tenant’s Share
of the increase.  Landlord shall give Tenant written notice of the amount or
estimated amount of the increase, the month in which the increase will become
effective, Tenant’s Share thereof and the months for which the payments are
due.  Tenant shall pay the increase to Landlord as part of the Tenant’s monthly
payments of estimated expenses as provided in paragraph (b) above.

 

(f)         The term “Operating Expenses” shall mean and include all Project
Costs, as defined in Section (g) below, and Property Taxes, as defined in
Section (h) below.

 

(g)        The term “Project Costs” shall mean all expenses of operation,
management, repair, replacement and maintenance of the Building and the Project,
including without limitation all appurtenant Common Areas (as defined in
Section 6.2 of the Lease), and shall include the following charges by way of
illustration but not limitation:  water and sewer charges; insurance premiums,
deductibles, or reasonable premium equivalents or deductible equivalents should
Landlord elect to self insure any risk that Landlord is authorized to insure
hereunder (provided, however, that if Tenant’s Share of any

 

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insurance deductible (other than any earthquake insurance deductible) incurred
by Landlord exceeds $50,000, the amount in excess of $50,000 shall be amortized
on a straight-line basis over the reasonably estimated useful life of the
restoration work calculated at a market cost of funds, all as reasonably
determined by Landlord in accordance with generally accepted real estate
accounting principles consistently applied, and Tenant shall pay Tenant’s Share
of the monthly amortized portion of such costs until the expiration of the
useful life or the expiration of the Term as it may be extended; license,
permit, and inspection fees; light; power; window washing; trash pickup;
heating, ventilating and air conditioning; supplies; materials; equipment;
tools; reasonable fees for consulting services; access control/security costs,
inclusive of the reasonable cost of improvements made to enhance access control
systems and procedures; costs incurred in connection with compliance with any
laws or changes in laws applicable to the Building or the Project, including,
without limitation, capital improvements, repairs and replacements to the
Building Structure or Building Systems (the cost of which shall be amortized
over the useful life of such capital items, with interest calculated at a market
cost of funds, all as reasonably determined by Landlord, for each year of useful
life or shorter recovery period of such capital expenditure, and Tenant shall
pay Tenant’s Share of the monthly amortized portion of such costs until the
expiration of the useful life or the expiration of the Term as it may be
extended); the cost of any capital improvements, repairs or replacements,
including, without limitation, capital improvements, capital repairs and capital
replacements of the Building Systems and/or roof membrane, as applicable, after
the first twelve (12) months of the Term to the extent of the amortized amount
thereof over the useful life of such capital improvements or replacements (or,
if such capital improvements or replacements are anticipated to achieve a cost
savings as to the Operating Expenses, any shorter estimated period of time over
which the cost of the capital improvements or replacements would be recovered
from the estimated cost savings), with interest calculated at a market cost of
funds, all as reasonably determined by Landlord, for each year of useful life or
shorter recovery period of such capital expenditure, and Tenant shall pay
Tenant’s Share of the monthly amortized portion of such costs until the
expiration of the useful life or the expiration of the Term as it may be
extended; costs associated with the maintenance of an air conditioning, heating
and ventilation service agreement, and maintenance of any communications or
networked data transmission equipment, conduit, cabling, wiring and related
telecommunications facilitating automation and control systems, remote
telecommunication or data transmission infrastructure within the Building and/or
the Project, and any other maintenance, repair and replacement costs associated
with such infrastructure; capital costs associated with a requirement related to
demands on utilities by Tenant, including without limitation the cost to obtain
additional voice, data and modem connections; labor; reasonably allocated wages
and salaries, fringe benefits, and payroll taxes for administrative and other
personnel directly applicable to the Building and/or Project, including both
Landlord’s personnel and outside personnel; any expense incurred pursuant to
Sections 6.1, 6.2, 7.2, 10.2, and Exhibits C and F of the Lease; and reasonable
overhead and/or management fees (not to exceed three percent (3%) of the gross
rents of the Project) for the professional operation of the Project.  It is
understood and agreed that Project Costs may include competitive charges for
direct services (including, without limitation, the three percent (3%)
management fee described above and/or operations services) provided by any
subsidiary, division or affiliate of Landlord.  Notwithstanding the foregoing,
in any given Expense Recovery Period, earthquake insurance deductibles included
in Project costs shall be limited to an amount (the “Annual Limit”) not to
exceed 0.5% of the total insurable value of the Project per occurrence
(provided, however, that, notwithstanding anything else herein to the contrary,
if, for any occurrence, the earthquake insurance deductible exceeds the Annual
Limit, then, after such deductible is included (up to the Annual Limit) in
Project Costs for the applicable Expense Recovery Period, such excess may be
included (up to the Annual Limit) in Project Costs for the immediately
succeeding Expense Recovery Period, and any portion of such excess that is not
so included in Project Costs for such immediately succeeding Expense Recovery
Period may be included (up to the Annual Limit) in Project Costs for the next
succeeding Expense Recovery Period, and so on with respect to each subsequent
Expense Recovery Period; provided further, however, that in no event shall the
portions of such deductible that are included in Project Costs for any one or
more Expense Recovery Periods exceed, in the aggregate, 5.0% of the total
insurable valuable of the Project).

 

(h)        The term “Property Taxes” as used herein shall include any form of
federal, state, county or local government or municipal taxes, fees, charges or
other impositions of every kind (whether general, special, ordinary or
extraordinary) related to the ownership, leasing or operation of the Premises,
Building or Project, including without limitation, the following:  (i) all real
estate taxes or personal property taxes levied against the Building or Project,
as such property taxes may be reassessed from time to time; and (ii) other
taxes, charges and assessments which are levied with respect to this Lease or to
the Building and/or the Project, and any improvements, fixtures and equipment
and other property of Landlord located in the Building and/or the Project,
(iii) all assessments and fees for public improvements, services, and facilities
and impacts thereon, including without limitation arising out of any Community
Facilities Districts, “Mello Roos” districts, similar assessment districts, and
any traffic impact mitigation assessments or fees; (iv) any tax, surcharge or
assessment which shall be levied in addition to or in lieu of real estate or
personal property taxes, and (v) taxes based on the receipt of rent (including
gross receipts or sales taxes applicable to the receipt of rent), and (vi) costs
and expenses incurred in contesting the amount or validity of any Property Tax
by appropriate proceedings.  Notwithstanding the foregoing or anything else to
the contrary contained herein, “Property Taxes” shall not include: (i) any
excess profits taxes, franchise taxes, gift taxes, capital stock taxes,
inheritance and succession taxes, estate taxes, transfer taxes, federal and
state income taxes, and other taxes to the extent applicable to Landlord’s net
income, (ii) tax penalties (including interest) incurred as a result of
Landlord’s negligence and/or failure to make tax payments and/or file any tax or
informational returns when due (unless such failure by Landlord is caused by
Tenant).   All assessments of Property Taxes which can be paid by Landlord in
installments, shall be paid by Landlord in the maximum number of installments
permitted by law and shall be included as Operating Expenses in the year in
which the installment is actually paid.

 

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(i)        Notwithstanding the foregoing, Operating Expenses shall exclude the
following:

 

(1)       Any ground lease rental;

 

(2)       Costs incurred by Landlord with respect to goods and services to the
extent that Landlord is reimbursed for such costs other than through the
Operating Expense pass-through provisions of such tenants’ lease;

 

(3)       Costs incurred by Landlord for repairs, replacements and/or
restoration to or of the Building to the extent that Landlord is reimbursed by
insurance or condemnation proceeds or by tenants (other than through Operating
Expense pass-throughs), warrantors or other third persons;

 

(4)       Intentionally omitted;

 

(5)       Costs arising from Landlord’s charitable or political contributions;

 

(6)       Attorneys’ fees and all other costs and expenses incurred in
connection with negotiations or disputes with present or prospective tenants or
other occupants of the Project, if any;

 

(7)       Capital expenditures as determined in accordance with generally
accepted accounting principles, consistently applied, and as generally practiced
in the real estate industry (“GAAP”), except as otherwise provided above;

 

(8)       Brokers commissions, finders’ fees, attorneys’ fees, advertising
expenses, promotional expenses, disbursements, costs and expenses incurred in
procuring prospective tenants, negotiating and executing leases, constructing
improvements required to prepare for a new tenant’s occupancy, entertainment and
travel expenses and other costs incurred by Landlord in leasing or attempting to
lease space in the Building, if any;

 

(9)       Intentionally omitted

 

(10)     Costs, including fines, penalties and legal fees, incurred by Landlord
due to the violation by Landlord of any law, code, regulation, or ordinance or
the violation of the terms and conditions of any third party agreement
pertaining to the Project;

 

(11)     Overhead and profit increments paid to subsidiaries or affiliates of
Landlord for services provided to the Building to the extent the same exceeds
the costs that would generally be charged for such services if rendered on a
competitive basis (based upon a standard of similar office buildings in the
general market area of the Premises) by unaffiliated third parties capable of
providing such service;

 

(12)     Finance and debt service fees, principal and/or interest on debt or
amortization on any mortgage or mortgages encumbering the Building;

 

(13)     Landlord’s general corporate overhead, except as it relates to the
specific management, operation, repair, replacement and maintenance of the
Building or Project;

 

(14)     Costs of installing the initial landscaping and the initial sculpture,
paintings and objects of art for the Building and Project;

 

(15)     Advertising expenditures;

 

(16)     Any depreciation allowance, bad debt loss, rent loss, or reserves for
bad debts or rent loss;

 

(17)     Costs associated with the operation of the business of the partnership
or entity which constitutes the Landlord, as the same are distinguished from the
costs of the operation, management, repair, replacement and maintenance of the
Project, including partnership accounting and legal matters, costs of defending
any lawsuits with any mortgagee (except as the actions of Tenant may be in
issue), costs of selling, syndicating, financing, mortgaging or hypothecating
any of Landlord’s interest in the Project, and costs incurred in connection with
any disputes between Landlord and its employees, between Landlord and Project
management, or between Landlord and other tenants or occupants of the Project,
if any;

 

(18)     The wages and benefits of any employee who does not devote
substantially all of his or her employed time to the Project unless such wages
and benefits are prorated to reflect time spent on operating and managing the
Project vis-à-vis time spent on matters unrelated to operating and managing the
Project; provided that in no event shall Project Costs include wages and/or
benefits attributable to personnel above the level of portfolio property manager
or chief engineer;

 

(19)     Costs incurred by Landlord for improvements or replacements (including
structural additions), repairs, equipment and tools which are of a “capital”
nature and/or which are considered “capital” improvements or replacements under
GAAP, except to the extent included in Project Costs pursuant to the definition
above or by other express terms of this Lease;

 

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(20)     Legal fees and costs, indemnification obligations, settlements,
judgments or awards paid or incurred  because of disputes between Landlord and
other tenants or prospective occupants or prospective tenants/occupants or
providers of goods and services to the Project;

 

(21)     Costs incurred to comply with law with respect to Hazardous Materials
except to the extent stored, used, released or disposed of by Tenant or any
Tenant Parties;

 

(22)     The costs of repair, replacement or restoration work occasioned by any
casualty or eminent domain;

 

(23)     Costs to correct any items of non-compliance with applicable Laws in
effect as of the Final Condition Date with respect to the Building Structure;

 

(24)     Costs and expenses which are excluded from Operating Expenses pursuant
to Sections 2.3 and 2.4 of this Lease;

 

(25)     The costs of repairs, alterations, and general maintenance necessitated
by the negligence or willful misconduct of Landlord or its agents, employees or
contractors; and

 

(26)     Interest or penalties due to the late payment of taxes, utility bills
or other such costs.

 

(j)        Provided Tenant is not then in Default hereunder, Tenant shall have
the right to cause a certified public accountant, engaged on a non-contingency
fee basis, to audit Operating Expenses by inspecting Landlord’s general ledger
of expenses not more than once during any Expense Recovery Period. However, to
the extent that insurance premiums are determined by Landlord on the basis of an
internal allocation of costs utilizing information Landlord in good faith deems
proprietary, such expense component shall not be subject to audit so long as it
does not exceed the amount per square foot typically imposed by landlords of
other first class office projects in Santa Clara County, California.  Tenant
shall give notice to Landlord of Tenant’s intent to audit within sixty (60) days
after Tenant’s receipt of Landlord’s expense statement which sets forth
Landlord’s actual Operating Expenses.  Such audit shall be conducted at a
mutually agreeable time during normal business hours at the office of Landlord
or its management agent where such accounts are maintained. If Tenant’s audit
determines that actual Operating Expenses have been overstated by more than five
percent (5%), then subject to Landlord’s right to review and/or contest the
audit results, Landlord shall reimburse Tenant for the reasonable out-of-pocket
costs of such audit.  Tenant’s rent shall be appropriately adjusted to reflect
any overstatement in Operating Expenses. All of the information obtained by
Tenant and/or its auditor in connection with such audit, as well as any
compromise, settlement, or adjustment reached between Landlord and Tenant as a
result thereof, shall be held in strict confidence and, except as may be
required pursuant to litigation, shall not be disclosed to any third party,
directly or indirectly, by Tenant or its auditor or any of their officers,
agents or employees.  Landlord may require Tenant’s auditor to execute a
separate confidentiality agreement affirming the foregoing as a condition
precedent to any audit.  In the event of a violation of this confidentiality
covenant in connection with any audit, then in addition to any other legal or
equitable remedy available to Landlord, Tenant shall forfeit its right to any
reconciliation or cost reimbursement payment from Landlord due to said audit
(and any such payment theretofore made by Landlord shall be promptly returned by
Tenant), and Tenant shall have no further audit rights under this Lease.

 

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EXHIBIT C

 

UTILITIES AND SERVICE

 

Tenant shall be responsible for and shall pay promptly, directly to the
appropriate supplier, all charges for electricity metered to the Premises,
telephone, telecommunications service, janitorial service, interior landscape
maintenance and all other utilities, materials and services furnished directly
to Tenant or the Premises or used by Tenant in, on or about the Premises during
the Term, together with any taxes thereon.  Landlord shall make a reasonable
determination of Tenant’s proportionate share of the cost of water, gas, sewer,
refuse pickup and any other utilities and services that serve only the Common
Areas, and Landlord shall include such cost in the definition of Project Costs
in which event Tenant shall pay Tenant’s proportionate share of such costs in
the manner set forth in Section 4.2.

 

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EXHIBIT D

 

TENANT’S INSURANCE

 

The following requirements for Tenant’s insurance shall be in effect during the
Term, and Tenant shall also cause any subtenant to comply with the
requirements.  Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions to these requirements, but not more than once during
each calendar year during the Term.

 

1.         Tenant shall maintain, at its sole cost and expense, during the
entire Term:  (i) commercial general liability insurance with respect to the
Premises and the operations of Tenant in, on or about the Premises, on a policy
form that is at least as broad as Insurance Service Office (ISO) CGL 00 01 (if
alcoholic beverages are sold on the Premises, liquor liability shall be
explicitly covered), which policy(ies) shall be written on an “occurrence” basis
and for not less than $10,000,000 per occurrence / $10,000,000 annual aggregate
for bodily injury, death, and property damage liability (with a primary policy
providing not less than $1,000,000 per occurrence / $2,000,000 annual
aggregate); (ii) workers’ compensation insurance coverage as required by law,
together with employers’ liability insurance coverage of at least $1,000,000
each accident and each disease; (iii) with respect to Alterations constructed by
Tenant under this Lease, builder’s risk insurance, in an amount equal to the
replacement cost of the work; and (iv) insurance against fire, vandalism,
malicious mischief and such other additional perils as may be included in a
standard “special form” policy, insuring all Alterations, trade fixtures,
furnishings, equipment and items of personal property in the Premises, in an
amount equal to not less than 90% of their replacement cost (with replacement
cost endorsement), which policy shall also include business interruption
coverage in an amount sufficient to cover 1 year of loss, if any.  In no event
shall the limits of any policy be considered as limiting the liability of Tenant
under this Lease.

 

2.         All policies of insurance required to be carried by Tenant pursuant
to this Exhibit D shall be written by insurance companies authorized to do
business in the State of California and with a general policyholder rating of
not less than “A-” and financial rating of not less than “VIII” in the most
current Best’s Insurance Report.  The deductible or other retained limit under
any policy carried by Tenant shall be commercially reasonable, and Tenant shall
be responsible for payment of such deductible or retained limit with waiver of
subrogation in favor of Landlord.  Any insurance required of Tenant may be
furnished by Tenant under any blanket policy carried by it or under a separate
policy.  A certificate of insurance, evidencing that the policy has been issued
and provides the coverage required by this Exhibit and includes the endorsements
evidencing the required provisions including the waiver of subrogation and
additional insured provisions required below, shall be delivered to Landlord
prior to the date Tenant is given the right of possession of the Premises. 
Proper evidence of the renewal of any insurance coverage shall also be delivered
to Landlord not less than thirty (30) days prior to the expiration of the
coverage.

 

3.         Tenant’s commercial general liability insurance shall contain a
provision that the policy shall be primary to and noncontributory with any
policies carried by Landlord, together with a provision including Landlord and
any other parties in interest designated by Landlord as additional insureds. 
Tenant’s policies described in Subsections 1 (ii), (iii) and (iv) above shall
each contain a waiver by the insurer of any right to subrogation against
Landlord, its agents, employees, contractors and representatives.  Tenant also
waives its right of recovery for any deductible or retained limit under same
policies enumerated above.  Tenant shall endeavor to provide Landlord with
thirty (30) days’ written notice prior to the cancellation of any insurance
policy required to be carried by Tenant hereunder.  Tenant shall also name
Landlord as an additional insured on any excess or umbrella liability insurance
policy carried by Tenant.

 

NOTICE TO TENANT:  IN ACCORDANCE WITH THE TERMS OF THIS LEASE, TENANT MUST
PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD’S MANAGEMENT AGENT PRIOR
TO BEING AFFORDED ACCESS TO THE PREMISES.

 

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EXHIBIT E

 

RULES AND REGULATIONS

 

The following Rules and Regulations shall be in effect at the Building. 
Landlord reserves the right to adopt reasonable nondiscriminatory modifications
and additions at any time.  In the case of any conflict between these
regulations and the Lease, the Lease shall be controlling.

 

1.         The Common Areas shall not be obstructed by Tenant or used by it for
storage, for depositing items, or for any purpose other than for ingress to and
egress from the Premises and for parking, as applicable.

 

2.         [Intentionally omitted]

 

3.         Tenant shall, at its expense, be required to utilize a third party
contractor approved by Landlord in its reasonable discretion to provide any
telephone wiring services from the minimum point of entry of the telephone cable
in the Building to the Premises.

 

4.         Except as provided in Exhibit G, no antenna or satellite dish shall
be installed by Tenant without the prior written agreement of Landlord.

 

5.         If Landlord, by a notice in writing to Tenant, shall object to any
curtain, blind, tinting, shade or screen attached to, or hung in, or used in
connection with, any window or door of the Premises, the use of that curtain,
blind, tinting, shade or screen shall be immediately discontinued and removed by
Tenant.  Interior of the Premises visible from the exterior must be maintained
in a visually professional manner and consistent with a first class office
building.  Tenant shall not place any unsightly items (as reasonably determined
by Landlord) along the exterior glass line of the Premises including, but not
limited to, boxes, and electrical and data cords, provided that the foregoing
restriction shall not apply to the shipping and receiving areas so long as the
items therein are reasonably screened from view.  No awnings shall be permitted
on any part of the Premises.

 

6.         The installation and location of any unusually heavy equipment in the
Premises, including without limitation file storage units, safes and electronic
data processing equipment, shall require the prior written approval of Landlord,
which shall not be unreasonably withheld, conditioned or delayed.

 

7.         [Intentionally omitted]

 

8.         [Intentionally omitted]

 

9.         Except as provided in Exhibit G, Tenant shall not install equipment
requiring electrical or air conditioning service in excess of that to be
provided by Landlord under the Lease without prior written approval from
Landlord.

 

10.      [Intentionally omitted]

 

11.      Tenant shall not do or permit anything to be done in the Premises, or
bring or keep anything in the Premises, which shall in any way increase the
insurance on the Building, or on the property kept in the Building, or interfere
with the rights of other tenants, or conflict with any government rule or
regulation.

 

12.      Tenant shall not use or keep any foul or noxious gas or substance in
the Premises.

 

13.      [Intentionally omitted]

 

14.      Tenant shall not permit any pets or animals in or about the Building.
Service animals certified by the appropriate governmental authorities are
permitted provided such service animals remain under the direct control of the
individual they serve at all times, and do not disturb or threaten others.

 

15.      Neither Tenant nor its employees, agents, contractors, invitees or
licensees shall bring any firearm, whether loaded or unloaded, into the Project
at any time.

 

16.      Smoking tobacco, including via personal vaporizers or other electronic
cigarettes, anywhere within the Building or Project is strictly prohibited
except that smoking tobacco may be permitted outside the Building and within the
Project only in areas agreed to by Landlord and Tenant. Smoking, vaping,
distributing, growing or manufacturing marijuana or any marijuana derivative
anywhere within the Building or Project is strictly prohibited.

 

17.      Tenant shall not install an aquarium of any size in the Premises unless
otherwise approved by Landlord.

 

18.      Tenant shall not utilize any name selected by Landlord from time to
time for the Building and/or the Project as any part of Tenant’s corporate or
trade name.  Landlord shall have the right to change the name, number or
designation of the Building or Project without liability to Tenant, provided
that Landlord shall not have the right to change the address of the Building
without Tenant’s written

 

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consent. Tenant shall not use any picture of the Building in its advertising,
stationery or in any other manner.

 

19.      Tenant shall, upon request by Landlord, supply Landlord with the names
and telephone numbers of personnel designated by Tenant to be contacted on an
after-hours basis should circumstances warrant.

 

20.      [Intentionally omitted]

 

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EXHIBIT F

 

PARKING

 

Tenant shall be entitled to the number of vehicle parking spaces set forth in
Item 11 of the Basic Lease Provisions, which spaces shall be unreserved and
unassigned (except that Landlord will designate 15 parking spaces as “visitor”
parking spaces for use by Tenant’s customers on an exclusive basis), on those
portions of the Common Areas designated by Landlord for parking.  Tenant shall
not use more parking spaces than such number.  In addition, pursuant to
Section 2 of Exhibit G attached to the Lease, Landlord shall install at least
ten (10) EV Charging Stations.  All parking spaces shall be used only for
parking of vehicles no larger than full size passenger automobiles, sport
utility vehicles or pickup trucks.  Tenant shall not permit or allow any
vehicles that belong to or are controlled by Tenant or Tenant’s employees,
suppliers, shippers, customers or invitees to be loaded, unloaded or parked in
(a) areas other than those designated by Landlord for such activities or (b) any
of the 42 spaces in the parking structure located at 950 Benecia which are
designated as “Restricted Spaces” on Exhibit F-1 attached hereto.  Such
Restricted Spaces are for the use of tenants in other phases of the Master
Project.  If Tenant permits or allows any of the prohibited activities described
above, then Landlord shall have the right, upon twelve (12) hours’ notice to
Tenant (which may be verbal notice), in addition to such other rights and
remedies that Landlord may have, to remove or tow away the vehicle involved and
charge the costs to Tenant.  Parking within the Common Areas shall be limited to
striped parking stalls, and no parking shall be permitted in any driveways,
access ways or in any area which would prohibit or impede the free flow of
traffic within the Common Areas.  There shall be no parking of any vehicles for
longer than a seventy-two (72) hour period unless otherwise authorized by
Landlord, and vehicles which have been abandoned or parked in violation of the
terms hereof may be towed away at the owner’s expense.  Nothing contained in
this Lease shall be deemed to create liability upon Landlord for any damage to
motor vehicles of visitors or employees, for any loss of property from within
those motor vehicles, or for any injury to Tenant, its visitors or employees,
except to the extent caused by the negligence or willful misconduct of Landlord,
its agents, employees or contractors.  Landlord shall have the right to
establish, and from time to time amend, and to enforce against all users all
reasonable rules and regulations (including the designation of areas for
employee parking) that Landlord may deem necessary and advisable for the proper
and efficient operation and maintenance of parking within the Common Areas. 
Landlord shall have the right to construct, maintain and operate lighting
facilities within the parking areas; to change the area, level, location and
arrangement of the parking areas and improvements therein; to restrict parking
by tenants, their officers, agents and employees to employee parking areas; to
enforce parking charges (by operation of meters or otherwise); and to do and
perform such other acts in and to the parking areas and improvements therein as,
in the use of good business judgment, Landlord shall determine to be advisable. 
Any person using the parking area shall observe all directional signs and arrows
and any posted speed limits.  In no event shall Tenant interfere with the use
and enjoyment of the parking area by other tenants of the Master Project or
their employees or invitees.  Parking areas shall be used only for parking
vehicles.  Washing, waxing, cleaning or servicing of vehicles is permitted so
long as such activities are conducted in a manner typically conducted in parking
facilities of Comparable Buildings.  Tenant shall be liable for any damage to
the parking areas caused by Tenant or Tenant’s employees, suppliers, shippers,
customers or invitees, including without limitation damage from excess oil
leakage.  Tenant shall have no right to install any fixtures, equipment or
personal property in the parking areas.  Tenant shall not assign or sublet any
of the vehicle parking spaces, either voluntarily or by operation of law,
without the prior written consent of Landlord, except in connection with an
authorized assignment of this Lease or subletting of the Premises.  In no event
shall Tenant be charged for parking during the Term, as it may be extended.

 

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EXHIBIT F-1

 

RESTRICTED SPACES

 

The “Restricted Spaces” are the 41 parking spaces designated on the left portion
of the diagram below plus the 1 future Non-Proofpoint EV Parking Space shown
below.

 

[g371661ki07i001.jpg]

 

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EXHIBIT G

 

ADDITIONAL PROVISIONS

 

1.  RIGHT TO EXTEND.  Provided that Tenant is not in Default under any provision
of this Lease at the time of exercise of the extension right granted herein, and
provided further that Tenant is occupying the entire Premises and has not
assigned or sublet any of its interest in this Lease (except in connection with
a Permitted Transfer of this Lease as described in Section 9.1(e) hereof),
Tenant may extend the Term of this Lease for one period of 60 months.  Tenant
shall exercise its right to extend the Term by and only by delivering to
Landlord, not less than 9 months nor more than 12 months prior to the expiration
date of the Term, Tenant’s written notice of its irrevocable commitment to
extend (the “Commitment Notice”).  Should Tenant fail timely to deliver the
Commitment Notice, then this extension right shall thereupon lapse and be of no
further force or effect.

 

The Basic Rent payable under the Lease during the extension of the Term shall be
at the prevailing market rental rate (including periodic adjustments) for
comparable and similarly improved office space being leased in the City of
Sunnyvale as of the commencement of the extension period, (the “Prevailing
Rate”).  In the event that the parties are not able to agree on the Prevailing
Rate within 120 days prior to the expiration date of the Term, then either party
may elect, by written notice to the other party, to cause said rental, including
subsequent adjustments, to be determined by appraisal as follows.

 

Within 10 days following receipt of such appraisal election, the parties shall
attempt to agree on an appraiser to determine the Prevailing Rate. If the
parties are unable to agree in that time, then each party shall designate an
appraiser within 10 days thereafter. Should either party fail to so designate an
appraiser within that time, then the appraiser designated by the other party
shall determine the Prevailing Rate.  Should each of the parties timely
designate an appraiser, than the two appraisers so designated shall appoint a
third appraiser who shall, acting alone, determine the fair market rental value
of the Premises. Any appraiser designated hereunder shall have an M.A.I.
certification or equivalent with not less than 5 years experience in the
valuation of commercial office buildings in Santa Clara County, California.

 

Within 10 days following the selection of the appraiser, Landlord and Tenant
shall each submit in writing to the appraiser its determination of the rental
rate for the extension period (respectively, the “Landlord’s Determination” and
the “Tenant’s Determination”). Should either party fail timely to submit its
rental determination, then the determination of the other party shall be
conclusive and binding on the parties.  The appraiser shall not disclose to
either party the rental determination of the other party until the expiration of
that 10 day period or, if sooner, the appraiser’s receipt of both the Landlord’s
Determination and the Tenant’s Determination.

 

Within 30 days following the selection of the appraiser and such appraiser’s
receipt of the Landlord’s Determination and the Tenant’s Determination, the
appraiser shall determine whether the rental rate determined by Landlord or by
Tenant more accurately reflects Prevailing Rate for the Premises, as reasonably
extrapolated to the commencement of the extension term.  Accordingly, either the
Landlord’s Determination or the Tenant’s Determination shall be selected by the
appraiser as the fair market rental rate for the extension period.  In
determining such value, the appraiser shall first consider rental comparables
for the Building and the Project, provided that if adequate comparables do not
exist then the appraiser may consider transactions involving similarly improved
space owned by Landlord or its affiliates in the vicinity with appropriate
adjustments for differences in location and quality of project.  In no event
shall the appraiser attribute factors for brokerage commissions to reduce said
fair market rental.  At any time before the decision of the appraiser is
rendered, either party may, by written notice to the other party, accept the
rental terms submitted by the other party, in which event such terms shall be
deemed adopted as the agreed fair market rental.  The fees of the
appraiser(s) shall be shared equally by both parties.

 

Within 20 days after the determination of the Prevailing Rate, Landlord shall
prepare a reasonably appropriate amendment to this Lease for the extension
period and Tenant shall execute and return same to Landlord within 10 days. 
Should the Prevailing Rate not be established by the commencement of the
extension period, then Tenant shall continue paying rent at the rate in effect
during the last month of the initial Term, and a lump sum adjustment shall be
made promptly upon the determination of such new rental.

 

If Tenant fails to timely comply with any of the provisions of this Section,
Tenant’s right to extend the Term may, at Landlord’s election and in addition to
any other remedies that may be available to Landlord, be extinguished, in which
event the Lease shall automatically terminate as of the initial expiration date
of the Term.  Any attempt to assign or transfer any right or interest created by
this Section to other than in connection with a Permitted Transfer shall be void
from its inception.  Tenant shall have no other right to extend the Term beyond
the single 60 month extension created by this Section.  Unless agreed to in a
writing signed by Landlord and Tenant, any extension of the Term, whether
created by an amendment to this Lease or by a holdover of the Premises by
Tenant, or otherwise, shall be deemed a part of, and not in addition to, any
duly exercised extension period permitted by this Section.  Time is specifically
made of the essence in this Section.

 

2.                   CAR CHARGING STATIONS.  Landlord shall, at its sole cost
and expense (except as otherwise expressly provided  herein), install prior to
the Commencement Date and thereafter maintain in good operating order and
condition, no fewer than 10 electric car charging stations in the parking
structure located on the east side of the Project for use by Tenant and its
employees, and other tenants of the Master Project (the collectively, “Charging
Stations”). The use of the Charging Stations shall be subject to the reasonable
rules and regulations established from time to time by Landlord and the vendor
thereof, and each of Tenant’s and other tenants’ employees using the Charging
Stations shall be subject to uniform hourly and/or electricity usage charges
therefor.  Except to the extent caused by the negligence or willful misconduct
of Landlord, its agents, employees or contractors, Tenant hereby voluntarily
releases, discharges, waives and relinquishes any and all actions or causes of
action for personal injury or property damage occurring to Tenant or its
employees or agents arising as a result of the use of the Charging Stations, or
any activities incidental thereto, wherever or however the same may occur, and
further agrees that, except to the extent caused by the negligence or willful
misconduct of Landlord, its agents, employees or contractors, Tenant will not
prosecute any claim for personal injury or property damage against Landlord or
any of its officers, agents, servants or employees for any said causes of
action.  Tenant’s right to use the Charging Stations shall belong solely to
Tenant and any Permitted Transferee, and may not be transferred or assigned,
except in

 

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conjunction with an assignment or sublease by Tenant as to which Landlord
consents, without Landlord’s prior written consent.

 

3.                   SIGNAGE.

 

3.1                      Lobby Signage.  For so long as Tenant leases an entire
Building, and provided all signs are in keeping with the quality of the Building
and the Master Project and are in compliance with the Signage Criteria and
Landlord’s signage program for the Master Project, Tenant, at its sole cost and
expense, may install identification signage within the lobby area(s) of such
Building.

 

3.2                      Tenant’s Exterior Signage.  Provided that
Proofpoint, Inc., a Delaware corporation (“Original Tenant”) or any Permitted
Transferee then leases at least one (1) entire Building, Tenant shall have the
right, at Tenant’s sole cost and expense, to install exterior Building signs on
such Building, and such signage right shall be exclusive for Tenant or any
Permitted Transferee.  Subject to the foregoing and applicable Laws, Tenant may
install up to two (2) exterior signs on each Building, in addition to one
(1) monument sign per Building, provided the monument is consistent, in
Landlord’s reasonable judgment, with Landlord’s monument signage in the Master
Project, and all signage is in accordance with municipal code and the provisions
of this Section 3 below.

 

3.3                      Tenant’s Signage Specifications and Permits.  Tenant’s
signage shall set forth Tenant’s name or logo as determined by Tenant; provided,
however, in no event shall the Tenant’s signage include an “Objectionable Name
or Logo” (as defined below).  The exact location, size, graphics, materials,
color, design, lettering, lighting, illumination and specifications of the
Tenant’s signage (collectively, the “Sign Specifications”) shall be subject to
the prior written reasonable approval of Landlord, which shall not be
unreasonably withheld, conditioned or delayed, and shall be consistent and
compatible with the quality and nature of the Master Project, in Landlord’s
reasonable judgment, and Landlord’s signage program for the Project, a copy of
which is attached hereto as Exhibit G-1.  In addition, Tenant’s signage shall be
subject to Tenant’s receipt of all required governmental permits and approvals
and shall be subject to all applicable laws; provided, however, that Landlord
shall reasonably cooperate with Tenant, at no out-of-pocket cost to Landlord, in
executing permit applications and performing other ministerial acts supporting
Tenant’s pursuit of any permits or other approvals required by applicable laws. 
Tenant hereby acknowledges that, notwithstanding Landlord’s approval of Tenant’s
signage, Landlord has made no representation or warranty to Tenant with respect
to the probability of obtaining all necessary governmental approvals and permits
for Tenant’s signage. In the event Tenant does not receive the necessary
governmental approvals and permits for Tenant’s signage, Tenant’s and Landlord’s
rights and obligations under the remaining terms and conditions of this Lease
shall be unaffected.

 

3.4                      Objectionable Name or Logo.  In no event shall Tenant’s
signage include, identify or otherwise refer to a name and/or logo which relates
to an entity which is of a character or reputation, or is associated with a
political faction or orientation, which is inconsistent, in Landlord’s
reasonable judgment, with the quality of the Master Project, or which would
otherwise reasonably offend a landlord of a comparable Building (an
“Objectionable Name or Logo”).  The parties hereby agree that the name
“Proofpoint, Inc.” shall not be deemed an Objectionable Name or Logo.

 

3.5                      Termination of Right to Tenant’s signage.  The rights
contained in this Section 3 may only be exercised by Original Tenant or a
Permitted Transferee to which this Lease is assigned in connection with a
Permitted Transfer of this Lease as described in Section 9.1(e) hereof (and not
any other assignee or any sublessee or other transferee of the Original Tenant’s
interest in this Lease), if Tenant leases an entire Building.

 

3.6                      Cost and Maintenance of Tenant’s Signage.  The costs of
the actual sign comprising the Tenant’s signage and the installation, design,
construction, and any and all other costs associated with the Tenant’s signage,
including, without limitation, utility charges and hook-up fees, permits, and
maintenance and repairs, shall be the sole responsibility of Tenant, at Tenant’s
sole cost and expense.  Should Tenant’s signage require repairs and/or
maintenance, as determined in Landlord’s reasonable judgment, Tenant shall cause
such repairs and/or maintenance to be performed at Tenant’s sole cost and
expense.  Upon the expiration or earlier termination of this Lease (or within
thirty (30) business days following Tenant’s receipt of written notice from
Landlord that Tenant’s rights to such Tenant’s signage have terminated as a
result of Tenant’s failure to satisfy the occupancy requirement, as set forth in
Sections 3.1 and/or 3.2 above), Tenant shall, at Tenant’s sole cost and expense,
cause the Tenant’s signage to be removed and shall cause the area in which such
Tenant’s signage was located to be restored to the condition existing
immediately prior to the installation of such Tenant’s signage.  If Tenant fails
to timely remove such Tenant’s signage or to restore the areas in which such
Tenant’s signage was located, as provided in the immediately preceding sentence,
then Landlord may perform such work, and all reasonable and actual costs
incurred by Landlord in so performing shall be reimbursed by Tenant to Landlord
within thirty (30) days after Tenant’s receipt of an invoice therefor together
with reasonable documented evidence of such costs.  The terms of this
Section 3.6 shall survive the expiration or earlier termination of this Lease.

 

4.                   GENERATOR.

 

4.1                      In General.  Subject to the terms hereof (including,
without limitation, the Work Letter and Article 8 of this Lease, as applicable)
and applicable laws, Tenant shall have the right (but not the obligation), at
Tenant’s sole cost and expense, to install a back-up generator, uninterrupted
power supply system, and other related systems approved by Landlord
(collectively, the “Generator”) in a location determined by Landlord (the
“Generator Area”) to service the Premises in the event of a power outage.  In
the event the Generator Area is located in the Project parking facility, then
the number of parking spaces provided to Tenant, as set forth in Item 11 of the
Basic Lease Provisions, shall be reduced by the number of full and partial
parking spaces used for the Generator Area.  For purposes of this Lease, the
“Generator” shall be deemed to include, without limitation, all associated
equipment, connections and/or facilities.  All plans and specifications relating
to the Generator shall be subject to the approval of Landlord, which shall not
be unreasonably withheld, conditioned or delayed.  Subject to the terms of this
Section 4, Landlord shall permit Tenant, at its sole cost and expense, to
install and maintain the Generator, all in compliance with applicable laws.  The
cost of design (including engineering costs) and installation of the Generator
and the costs of the Generator itself shall be Tenant’s sole responsibility. 
Tenant acknowledges that Landlord may require (in Landlord’s sole discretion)
that Tenant, at Tenant’s sole cost and expense, install screening, landscaping
or other improvements satisfactory to Landlord (in Landlord’s

 

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reasonable discretion) in order to satisfy Landlord’s aesthetic requirements in
connection with the area surrounding the Generator, all at Tenant’s sole cost
and expense.

 

4.2                      Operation and Maintenance of Generator.  Tenant shall
be responsible, at Tenant’s sole cost and expense, for all maintenance and
repairs and compliance with law obligations (including, without limitation, any
Department of Ecology requirements imposed with respect to the fuel tank) with
respect to the Generator, and Tenant acknowledges and that Landlord shall have
no responsibility in connection with the Generator and that Landlord shall not
be liable for any damage that may occur with respect to the Generator.  Without
limitation of the foregoing provisions of this Section 4.2, all matters
(including all plans and specifications) relating to the installation,
connection, use, maintenance, repair, compliance with laws, and removal of the
Generator (including, without limitation, the manner and means of Tenant’s
connection of the Generator to the electrical systems of the Building) shall be
subject to the prior approval of Landlord, which approval shall not be
unreasonably withheld.  In the event that Tenant shall fail to comply with the
requirements set forth herein, without limitation of Landlord’s other remedies,
Landlord shall have the right, at Tenant’s sole cost and expense, to cure such
breach, in which event Tenant shall be obligated to pay to Landlord, within ten
(10) Business Days following demand by Landlord, the amount expended by
Landlord, plus Landlord’s standard administration fee.  The Generator and
Generator Area shall be deemed to be a part of the Premises for purposes of the
indemnity and insurance provisions of this Lease, and, in addition, Tenant shall
maintain, at Tenant’s cost, industry standard “boiler and machinery” insurance
coverage with respect thereto.

 

4.3                      Generator Use.  The Generator shall be used by Tenant
only during (i) testing and regular maintenance, and (ii) the period of any
electrical power outage in the Building.

 

4.4                      Tenant Indemnification.  Tenant shall indemnify,
defend, protect, and hold harmless Landlord and the Landlord Parties from any
and all loss, cost, damage, expense and liability (including without limitation
court costs and reasonable attorneys’ fees) incurred in connection with or
arising from any cause related to or connected with the installation, use,
operation, repair and/or removal of the Generator and/or any acts, omissions or
negligence of Tenant or of any person claiming by, through or under Tenant, or
of the contractors, agents, servants, employees, invitees, guests or licensees
of Tenant or any such person, in connection with the Generator, or any breach of
the terms of this Section 4.  The terms set forth in this Section 4.4 shall
survive the termination or earlier expiration of this Lease.

 

4.5                      Landlord Costs.  Tenant shall be responsible for any
and all costs, if any, incurred by Landlord as a result of or in connection with
Tenant’s installation, operation, use and/or removal of the Generator.  In the
event that Landlord shall incur any costs as a result of or in connection with
the rights granted to Tenant herein, Tenant shall reimburse Landlord for the
same within thirty (30) days after receipt of billing.

 

4.6                      Removal of Generator.  At Landlord’s option, exercised
by Landlord at the time that Landlord consents to the installation of the
Generator, Landlord may require that Tenant remove the Generator and all related
facilities and equipment (excluding any underground utility conduits) prior to
the expiration or earlier termination of this Lease (or upon any earlier
termination of Tenant’s rights with respect to the Generator as provided
hereunder), and repair all damage to the Building and/or Project resulting from
such removal and restore all affected areas to their condition existing prior to
the installation of the Generator, all at Tenant’s sole cost and expense.  The
foregoing obligations of Tenant shall survive the expiration or earlier
termination of this Lease.

 

5.                   TELECOMMUNICATIONS POINTS OF ENTRY.  In connection with the
construction of the Tenant Improvements, Landlord, at no charge to Tenant, shall
make available to Tenant and/or its telecommunication/data carriers, during the
Lease Term and any extensions thereof, physical facilities within the Buildings,
and shall allow Tenant’s carriers to add additional Points of Entry (POEs) and
conduit from the POE to the carriers’ outside plant as may be reasonably
required by such carriers to bring its telecommunication services to the Project
and Premises.

 

6.                   ROOFTOP RIGHTS.  Tenant, its agents, employees and
contractors shall be entitled to access the roofs of the Buildings during the
Term.  Subject to (A) reasonable construction rules and regulations promulgated
by Landlord, (B) the Landlord’s reasonable Building standards therefor, and
(C) the terms and conditions set forth in this Lease (including, without
limitation, Section 7.3 of the Lease and this Section 6), Tenant, without any
obligation to pay rent for the Rooftop Area, may install, repair, maintain and
use, at Tenant’s sole cost and expense, up to two (2) satellite dish(es),
television or communications antenna or facility, related receiving equipment,
related cable connections and other related or similar equipment (the “Rooftop
Equipment”) on the roof of the Building.  The Rooftop Equipment shall be located
in an area on the roof reasonably approved by Landlord (the “Rooftop Area”). 
Tenant shall be solely responsible for any and all costs incurred or arising in
connection with the Rooftop Equipment, including but not limited to costs of
electricity and insurance related to the Rooftop Equipment, and Tenant shall
ensure that such Rooftop Equipment shall not interfere with the operation of (or
preclude the installation of) other equipment on the roof of the Building. 
Except as expressly set forth in the Lease, including, without limitation  the
Work Letter, Landlord makes no representations or warranties whatsoever with
respect to the condition of the roof of the Building, or the fitness or
suitability of the roof of the Building for the installation, maintenance and
operation of the Rooftop Equipment, including, without limitation, with respect
to the quality and clarity of any receptions and transmissions to or from the
Rooftop Equipment and the presence of any interference with such signals whether
emanating from the Building or otherwise.  The physical appearance and the size
of the Rooftop Equipment shall be subject to Landlord’s approval, which approval
shall not be unreasonably withheld, conditioned or delayed, the location of the
Rooftop Area shall be reasonably designated by Landlord, and Landlord may
require Tenant to install screening around such Rooftop Area, at Tenant’s sole
cost and expense, as reasonably designated by Landlord.  Tenant shall service,
maintain and repair such Rooftop Equipment, at Tenant’s sole cost and expense. 
If the Rooftop Equipment is not installed as part of Tenant’s initial Tenant
Improvements, in the event Tenant elects to exercise its right to install the
Rooftop Equipment, then Tenant shall give Landlord no less than thirty (30)
days’ prior notice thereof.  Tenant shall reimburse Landlord for the actual
costs reasonably incurred by Landlord in approving such Rooftop Equipment. 
Tenant’s rights under this Section shall terminate and shall be of no further
force or effect upon the expiration or earlier termination of this Lease.  Not
later than the expiration or earlier termination of this Lease, Tenant shall
remove and restore the affected portion of the rooftop, the Building and the
Premises to the condition the rooftop, the Building and the Premises would have
been in had no such Rooftop Equipment been installed (reasonable wear and tear
and damage from casualty that is Landlord’s obligation to repair pursuant to
Article 11 excepted).  Such Rooftop Equipment shall be installed pursuant to
plans and specifications approved by Landlord (specifically including, without
limitation, all mounting and waterproofing details), which approval shall not be
unreasonably withheld, conditioned or delayed.  Notwithstanding

 

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any such review or approval by Landlord, Tenant shall remain solely liable for
any damage arising in connection with Tenant’s installation, use, maintenance
and/or repair of such Rooftop Equipment, including, without limitation, any
damage to the Rooftop Area or any other portion of the roof or roof membrane and
any penetrations to the roof.  Landlord and Tenant hereby acknowledge and agree
that, except to the extent caused by Landlord’s negligence or willful
misconduct, or that of Landlord’s agents, employees or contractors, Landlord
shall have no liability in connection with Tenant’s use, maintenance and/or
repair of such Rooftop Equipment.  The Rooftop Area and Rooftop Equipment shall,
in all instances, comply with all Applicable Laws.  Tenant shall not be entitled
to license its Rooftop Equipment to any third party, nor shall Tenant be
permitted to receive any revenues, fees or any other consideration for the use
of the Rooftop Area and/or such Rooftop Equipment by a third party.

 

7.                   RIGHT OF FIRST OFFER.  If Landlord acquires the entirety
of  any of the buildings adjacent to the Project and which currently commonly
known as 645 N. Mary Avenue, 930 Benecia Avenue and 585 N. Mary Avenue,
Sunnyvale, California (each of such buildings be a “First Right Space”), then
provided Tenant is not then in Default hereunder, and provided further that
Tenant is leasing the entire Premises and (except in connection with a Permitted
Transfer of this Lease as described in Section 9.1(e) of the Lease) has not
assigned any of its interest in the Lease or sublet more than 25% the Premises,
effective as of the date of Landlord’s acquisition of the First Right Space or
any portion thereof, Landlord grants Tenant a continuing right (“First Right”)
to lease the First Right Space acquired by Landlord in accordance with and
subject to the provisions of this Section; provided however, this First Right
shall cease to be effective during the final 12 months of the Term unless and
until Tenant exercises its extension option set forth in Section 1 of this
Exhibit G above.  Landlord shall have no obligation to acquire any or all of the
First Right Space, and nothing in this Section of this Exhibit G shall be
construed to prohibit or restrict Landlord from redeveloping the First Right
Space if acquired by Landlord prior to offering the First Right Space to
Tenant.  Except as otherwise provided below, prior to leasing the First Right
Space, or any portion thereof, to any other party during the period that this
First Right is in effect and after determining that the then existing tenant in
the First Right Space will not extend or renew the term of its lease (as long as
such then existing tenant’s right to extend or renew the term of its lease was
set forth in such lease prior to the acquisition of the First Right Space by
Landlord), Landlord shall give Tenant written notice of the basic economic terms
including but not limited to the Basic Rent, term, operating expense base,
security deposit, and tenant improvement allowance (collectively, the “Economic
Terms”), upon which Landlord is willing to lease such particular First Right
Space to Tenant or to a third party; provided that the Economic Terms shall
exclude brokerage commissions and other Landlord payments that do not directly
inure to the tenant’s benefit.  Within 15 days after receipt of Landlord’s
notice, Tenant must give Landlord written notice pursuant to which Tenant shall
elect to (i) lease all, but not less than all, of the space specified in
Landlord’s notice (the “Designated Space”) upon such Economic Terms and the same
non-Economic Terms as set forth in this Lease; (ii) refuse to lease the
Designated Space, specifying that such refusal is not based upon the Economic
Terms, but upon Tenant’s lack of need for the Designated Space, in which event
Landlord may lease the Designated Space upon any terms it deems appropriate; or
(iii) refuse to lease the Designated Space, specifying that such refusal is
based upon said Economic Terms, in which event Tenant shall also specify revised
Economic Terms upon which Tenant shall be willing to lease the Designated
Space.  In the event that Tenant does not so respond in writing to Landlord’s
notice within said period, Tenant shall be deemed to have elected clause
(ii) above.  Any notice given by Tenant pursuant to either clause (i) or clause
(iii) above shall be accompanied by Tenant’s audited financial statements for
the two most recent twelve month periods, inclusive of Tenant’s most current
balance sheet; should such statements reveal that Tenant’s operating cash flow
over the 12 month period ending the end of the calendar quarter closest to such 
date was less than $100,000,000.00, then Landlord shall have no obligation to
lease the Designated Space to Tenant and may instead lease same to a third
party.  In the event Tenant gives Landlord notice pursuant to clause
(iii) above, Landlord may elect to either (x) lease the Designated Space to
Tenant upon such revised Economic Terms and the same other non-Economic Terms as
set forth in this Lease, or (y) lease the Designated Space to any third party
upon Economic Terms which are not less than ninety-five percent (95%) of those
Economic Terms proposed by Tenant.  Should Landlord so elect to lease the
Designated Space to Tenant, then Landlord shall promptly prepare and deliver to
Tenant an amendment to this Lease consistent with the foregoing, and Tenant
shall execute and return same to Landlord within 15 days.  Tenant’s failure to
timely return the amendment shall entitle Landlord to specifically enforce
Tenant’s commitment to lease the Designated Space, to lease such space to a
third party, and/or to pursue any other available legal remedy. Notwithstanding
the foregoing, it is understood that Tenant’s First Right shall be subject to
any extension or expansion rights previously granted to any third party tenant
in the First Right Space as long as such right was contained in such third party
tenant’s lease for the First Right Space which is in effect on the date of
Landlord’s acquisition of the First Right Space, , and Landlord shall in no
event be obligated to initiate this First Right prior to leasing any portion of
the First Right Space to the then-current tenant whose lease provides for such
extension or expansion rights.  Tenant’s First Right also shall be subject to
any extension of expansion rights which may be granted by Landlord after
Landlord’s acquisition of the First Right Space to any third party tenant in the
First Right Space after Tenant has elected not to lease such First Right Space. 
Tenant’s rights under this Section shall be personal to the original Tenant
named in this Lease and may not be assigned or transferred (except in connection
with a Permitted Transfer of this Lease as described in Section 9.1(e) of this
Lease).  Any other attempted assignment or transfer shall be void and of no
force or effect. Time is specifically made of the essence of this Section.

 

8.                   TENANT’S SECURITY POLICIES, PROCEDURES AND EQUIPMENT. 
Tenant shall have the right, at its sole discretion and expense, to install its
own electronic security systems within the Premises, including card key and CCTV
system (“Tenant’s Security Systems”), provided that any portions of Tenant’s
Security Systems visible from the exterior of the Premises shall be subject to
the reasonable approval of Landlord as to appearance and conformity with the
architectural integrity of the Buildings, and provided further that Landlord
shall reasonably approve the operating attributes of the Tenant’s Security
Systems.  Tenant shall remove the Tenant’s Security Systems from the Premises
and shall repair all damage to the Buildings occasioned thereby prior to the
Expiration Date or earlier termination of this Lease.

 

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EXHIBIT G-1

 

SIGNAGE PROGRAM

 

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EXHIBIT H

 

LANDLORD’S DISCLOSURES

 

Landlord has provided to Tenant a copy of the “Pathline Park Phase 3
Environmental Conditions Summary, 570, 575 and 580 Maude Court, 948 Benecia
Avenue and 615 N. Mary Avenue, Sunnyvale, California,” prepared by West
Environmental Services and Technology, dated September 28, 2018.

 

7

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EXHIBIT I

 

LETTER OF CREDIT

 

IRREVOCABLE STANDBY LETTER OF CREDIT

 

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER                   

 

ISSUE DATE:                        

 

ISSUING BANK:

SILICON VALLEY BANK

3003 TASMAN DRIVE

2ND FLOOR, MAIL SORT HF210

SANTA CLARA, CALIFORNIA 95054

 

BENEFICIARY:

 

                                                        LLC

550 NEWPORT CENTER DRIVE

NEWPORT BEACH, CA 92660

ATTN: SENIOR VICE PRESIDENT FINANCE

OFFICE PROPERTIES

 

APPLICANT:

 

 

 

 

 

 

 

 

AMOUNT:                           US $                (                    AND
     /100 U.S. DOLLARS)

 

EXPIRATION DATE:                         ONE YEAR FROM LC ISSUANCE (WITH YEARLY
AUTO-

EXTENSION AS SET FORTH BELOW)

 

LOCATION:                                              SANTA CLARA, CALIFORNIA

 

DEAR SIR/MADAM:

 

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSF       IN
YOUR FAVOR AVAILABLE BY YOUR DRAFTS DRAWN ON US AT SIGHT IN THE FORM OF
EXHIBIT “A” ATTACHED AND ACCOMPANIED BY THE FOLLOWING DOCUMENTS:

 

1.              THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL AMENDMENT(S), IF
ANY.

2.    BENEFICIARY’S SIGNED STATEMENT STATING AS FOLLOWS:

 

“THE “LANDLORD” UNDER THE LEASE PURSUANT TO WHICH THIS LETTER OF CREDIT WAS
ISSUED IS AUTHORIZED TO DRAW UPON THIS LETTER OF CREDIT IN THE AMOUNT OF THE
ACCOMPANYING DRAFT ACCORDING TO THE TERMS OF ITS LEASE AGREEMENT WITH THE
ACCOUNT PARTY AS “TENANT”.”

 

PARTIAL DRAWS AND MULTIPLE PRESENTATIONS ARE ALLOWED.

 

THIS ORIGINAL LETTER OF CREDIT MUST ACCOMPANY ANY DRAWINGS HEREUNDER FOR
ENDORSEMENT OF THE DRAWING AMOUNT AND WILL BE RETURNED TO THE BENEFICIARY UNLESS
IT IS FULLY UTILIZED.

 

THIS LETTER OF CREDIT SHALL BE AUTOMATICALLY EXTENDED FOR AN ADDITIONAL PERIOD
OF ONE YEAR, WITHOUT AMENDMENT, FROM THE PRESENT OR EACH FUTURE EXPIRATION DATE
UNLESS AT LEAST 60 DAYS PRIOR TO THE THEN CURRENT EXPIRATION DATE WE SEND YOU A
NOTICE BY REGISTERED MAIL OR OVERNIGHT COURIER SERVICE AT THE ABOVE ADDRESS (OR
ANY OTHER ADDRESS INDICATED BY YOU, IN A WRITTEN NOTICE TO US THE RECEIPT OF
WHICH WE HAVE ACKNOWLEDGED, AS THE ADDRESS TO WHICH WE SHOULD SEND SUCH NOTICE)
THAT THIS LETTER OF CREDIT WILL NOT BE EXTENDED BEYOND THE CURRENT EXPIRATION
DATE. IN NO EVENT SHALL THIS LETTER OF CREDIT BE AUTOMATICALLY EXTENDED BEYOND
DECEMBER 31, 2031. IN THE EVENT OF SUCH NOTICE OF NON-EXTENSION, YOU MAY DRAW
HEREUNDER WITH A DRAFT STATED ABOVE AND ACCOMPANIED BY THIS ORIGINAL LETTER OF
CREDIT AND AMENDMENT(S), IF ANY, ALONG WITH YOUR SIGNED STATEMENT STATING THAT
YOU HAVE RECEIVED A NON-EXTENSION NOTICE FROM SILICON VALLEY BANK AND YOU HAVE
NOT RECEIVED A REPLACEMENT LETTER OF CREDIT ACCEPTABLE TO YOU.

 

THIS LETTER OF CREDIT IS TRANSFERABLE ONE OR MORE TIMES, BUT IN EACH INSTANCE
ONLY TO A SINGLE BENEFICIARY AS TRANSFEREE AND ONLY UP TO THE THEN AVAILABLE
AMOUNT, ASSUMING SUCH TRANSFER TO SUCH TRANSFEREE WOULD BE IN COMPLIANCE WITH
THEN APPLICABLE LAW AND REGULATION, INCLUDING BUT NOT LIMITED TO THE REGULATIONS
OF THE U. S. DEPARTMENT OF TREASURY AND U.S. DEPARTMENT OF COMMERCE.  AT THE
TIME OF TRANSFER, THE ORIGINAL LETTER OF CREDIT AND ORIGINAL AMENDMENT(S), IF
ANY, MUST BE SURRENDERED TO US AT OUR ADDRESS INDICATED IN THIS LETTER OF CREDIT
TOGETHER WITH OUR TRANSFER FORM ATTACHED HERETO AS EXHIBIT “B” DULY EXECUTED. 
THE CORRECTNESS OF THE SIGNATURE AND TITLE OF THE PERSON SIGNING THE TRANSFER

 

1

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FORM MUST BE VERIFIED BY BENEFICIARY’S BANK.  APPLICANT SHALL PAY OUR TRANSFER
FEE OF ¼ OF 1% OF THE TRANSFER AMOUNT (MINIMUM US$250.00) UNDER THIS LETTER OF
CREDIT.

 

DRAFT(S) AND DOCUMENTS MUST INDICATE THE NUMBER AND DATE OF THIS LETTER OF
CREDIT.

 

DOCUMENTS MUST BE SUBMITTED IN PERSON OR FORWARDED TO US BY OVERNIGHT DELIVERY
SERVICE TO: SILICON VALLEY BANK, 3003 TASMAN DRIVE, SANTA CLARA CA 95054, ATTN:
INTERNATIONAL DIVISION.

 

WE HEREBY AGREE WITH THE BENEFICIARY THAT DRAFTS DRAWN UNDER AND IN ACCORDANCE
WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT WILL BE DULY HONORED UPON
PRESENTATION TO US ON OR BEFORE THE EXPIRATION DATE OF THIS LETTER OF CREDIT OR
ANY AUTOMATICALLY EXTENDED EXPIRATION DATE.

 

IF ANY INSTRUCTIONS ACCOMPANYING A DRAWING UNDER THIS LETTER OF CREDIT REQUEST
THAT PAYMENT IS TO BE MADE BY TRANSFER TO YOUR ACCOUNT WITH ANOTHER BANK, WE
WILL ONLY EFFECT SUCH PAYMENT BY FED WIRE TO A U.S. REGULATED BANK, AND WE
AND/OR SUCH OTHER BANK MAY RELY ON AN ACCOUNT NUMBER SPECIFIED IN SUCH
INSTRUCTIONS EVEN IF THE NUMBER IDENTIFIES A PERSON OR ENTITY DIFFERENT FROM THE
INTENDED PAYEE.

 

THIS LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES
(ISP98), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 590.

 

 

 

 

 

 

 

 

 

 

 

AUTHORIZED SIGNATURE

 

AUTHORIZED SIGNATURE

 

 

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER                            

 

2

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EXHIBIT A TO LETTER OF CREDIT

 

DATE:                           

 

REF. NO.                                

 

AT SIGHT OF THIS DRAFT

 

PAY TO THE ORDER OF
                                                                           US$                                  

 

US
DOLLARS                                                                                                                                                    

 

DRAWN UNDER SILICON VALLEY BANK, SANTA CLARA, CALIFORNIA, STANDBY

LETTER OF CREDIT NUMBER
NO.                                        DATED                              

 

TO: SILICON VALLEY BANK

 

3003 TASMAN DRIVE

 

 

SANTA CLARA, CA 95054

(BENEFICIARY’S NAME)

 

 

 

 

 

 

 

Authorized Signature

 

GUIDELINES TO PREPARE THE DRAFT

 

1.              DATE: ISSUANCE DATE OF DRAFT.

2.              REF. NO.: BENEFICIARY’S REFERENCE NUMBER, IF ANY.

3.              PAY TO THE ORDER OF: NAME OF BENEFICIARY AS INDICATED IN THE L/C
(MAKE

SURE BENEFICIARY ENDORSES IT ON THE REVERSE SIDE).

4.              US$: AMOUNT OF DRAWING IN FIGURES.

5.              USDOLLARS: AMOUNT OF DRAWING IN WORDS.

6.              LETTER OF CREDIT NUMBER: SILICON VALLEY BANK’S STANDBY L/C
NUMBER THAT PERTAINS TO THE DRAWING.

7.              DATED: ISSUANCE DATE OF THE STANDBY L/C.

8.              BENEFICIARY’S NAME: NAME OF BENEFICIARY AS INDICATED IN THE L/C.

9.              AUTHORIZED SIGNATURE: SIGNED BY AN AUTHORIZED SIGNER OF
BENEFICIARY.

 

IF YOU HAVE QUESTIONS RELATED TO THIS STANDBY LETTER OF CREDIT PLEASE CONTACT US
AT                              .

 

3

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EXHIBIT B TO LETTER OF CREDIT

TRANSFER FORM

 

DATE:

 

 

 

TO:

SILICON VALLEY BANK

 

 

3003 TASMAN DRIVE

RE: IRREVOCABLE STANDBY LETTER OF CREDIT

 

SANTA CLARA, CA 95054

NO.                       ISSUED BY

 

ATTN:INTERNATIONAL DIVISION.

SILICON VALLEY BANK, SANTA CLARA

 

STANDBY LETTERS OF CREDIT

L/C AMOUNT:                           

 

GENTLEMEN:

 

FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:

 

 

(NAME OF TRANSFEREE)

 

 

(ADDRESS)

 

ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF
CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF THIS
TRANSFER.

 

BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF
CREDIT ARE TRANSFERRED TO THE TRANSFEREE. TRANSFEREE SHALL HAVE THE SOLE RIGHTS
AS BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS,
WHETHER INCREASES OR EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR
HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECTLY TO THE TRANSFEREE
WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.

 

THE ORIGINAL OF SUCH LETTER OF CREDIT IS

 

 

RETURNED HEREWITH, AND WE ASK YOU TO

 

 

ENDORSE THE TRANSFER ON THE REVERSE

 

(BENEFICIARY’S NAME)

THEREOF, AND FORWARD IT DIRECTLY TO THE

 

 

TRANSFEREE WITH YOUR CUSTOMARY NOTICE

 

By:

 

OF TRANSFER.SIGNATURE AUTHENTICATED

 

 

 

 

Printed Name:

 

The names(s), title(s), and signature(s) conform to

 

 

that/those on file with us for the company and the

 

Title:

 

signature(s) is/are authorized to execute this instrument.

 

 

 

 

 

(Name of Bank)

 

 

 

 

 

(Address of Bank)

 

 

 

 

 

(City, State, Zip Code)

 

 

 

 

 

(Print Authorized Name and Title)

 

 

 

 

 

(Authorized Signature)

 

 

 

 

 

(Telephone Number)

 

 

 

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EXHIBIT J

 

SURVEY FORM

 

THE IRVINE COMPANY OFFICE PROPERTIES

 

HAZARDOUS MATERIAL SURVEY FORM

 

The purpose of this form is to obtain information regarding the use of hazardous
substances on the Project.  Prospective tenants and contractors should answer
the questions in light of their proposed activities on the premises.  Existing
tenants and contractors should answer the questions as they relate to ongoing
activities on the premises and should update any information previously
submitted.

 

If additional space is needed to answer the questions, you may attach separate
sheets of paper to this form.  When completed, the form should be sent to the
following address:

 

PATHLINE LLC MANAGEMENT OFFICE

5451 Great America Parkway, Suite 201

Santa Clara, CA  92617

 

Your cooperation in this matter is appreciated.  If you have any questions,
please call your property manager at (949) 720-4400 for assistance.

 

1.                   GENERAL INFORMATION.

 

Name of Responding Company:

 

Check all that apply:                              
Tenant                                               
o                                             
Contractor                            o

Prospective                         
o                                             
Existing                                            o

 

Mailing Address:

 

Contact person & Title:

 

Telephone Number:  (   )

 

 

 

Current TIC Tenant(s):

 

Address of Lease Premises:

 

Length of Lease or Contract Term:

 

 

Prospective TIC Tenant(s):

 

Address of Leased Premises:

 

Address of Current Operations:

 

 

Describe the proposed operations to take place on the property, including
principal products manufactured or services to be conducted.  Existing tenants
and contractors should describe any proposed changes to ongoing operations.

 

 

 

 

2.                                      HAZARDOUS MATERIALS.  For the purposes
of this Survey Form, the term “hazardous material” means any raw material,
product or agent considered hazardous under any state or federal law.  The term
does not include wastes which are intended to be discarded.

 

2.1                               Will any hazardous materials be used or stored
on site?

 

Chemical Products

Yes

o

 

No

o

 

Biological Hazards/Infectious Wastes

Yes

o

 

No

o

 

Radioactive Materials

Yes

o

 

No

o

 

Petroleum Products

Yes

o

 

No

o

 

 

2.2                               List any hazardous materials to be used or
stored, the quantities that will be on-site at any given time, and the location
and method of storage (e.g., bottles in storage closet on the premises).

 

Hazardous Materials

 

Location and Method of
Storage

 

Quantity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.3                               Is any underground storage of hazardous
materials proposed or currently conducted on the premises?

Yes o   No  o

 

If yes, describe the materials to be stored, and the size and construction of
the tank.  Attach copies of any permits obtained for the underground storage of
such substances.

 

 

 

 

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3.                                      HAZARDOUS WASTE.  For the purposes of
this Survey Form, the term “hazardous waste” means any waste (including
biological, infectious or radioactive waste) considered hazardous under any
state or federal law, and which is intended to be discarded.

 

3.1                               List any hazardous waste generated or to be
generated on the premises, and indicate the quantity generated on a monthly
basis.

 

Hazardous Materials

 

Location and Method of
Storage

 

Quantity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.2                               Describe the method(s) of disposal (including
recycling) for each waste.  Indicate where and how often disposal will take
place.

 

Hazardous Materials

 

Location and Method of
Storage

 

Disposal Method

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.3                               Is any treatment or processing of hazardous,
infectious or radioactive wastes currently conducted or proposed to be conducted
on the premises?

Yes o   No  o

 

If so, please describe any existing or proposed treatment methods.

 

 

 

 

3.4                     Attach copies of any hazardous waste permits or licenses
issued to your company with respect to its operations on the premises.

 

4.                                            SPILLS

 

4.1                     During the past year, have any spills or releases of
hazardous materials occurred on the premises?

Yes   o        No  o

 

If so, please describe the spill and attach the results of any testing conducted
to determine the extent of such spills.

 

 

 

 

4.2                     Were any agencies notified in connection with such
spills?

Yes   o        No o

 

If so, attach copies of any spill reports or other correspondence with
regulatory agencies.

 

4.3                     Were any clean-up actions undertaken in connection with
the spills?

Yes   o        No   o

 

If so, briefly describe the actions taken.  Attach copies of any clearance
letters obtained from any regulatory agencies involved and the results of any
final soil or groundwater sampling done upon completion of the clean-up work.

 

 

 

 

5.                                            WASTEWATER TREATMENT/DISCHARGE

 

5.1                     Do you discharge industrial wastewater to:

 

            storm drain?

 

               sewer?

            surface water?

 

               no industrial discharge

 

5.2                     Is your industrial wastewater treated before discharge?

Yes   o   No   o

 

If yes, describe the type of treatment conducted.

 

 

 

 

5.3           Attach copies of any wastewater discharge permits issued to your
company with respect to its operations on the premises.

 

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6.                   AIR DISCHARGES.

 

6.1                   Do you have any air filtration systems or stacks that
discharge into the air?

Yes   o        No   o

 

6.2          Do you operate any equipment that requires air emissions permits?

Yes   o        No   o

 

6.3          Attach copies of any air discharge permits pertaining to these
operations.

 

7.                   HAZARDOUS MATERIALS DISCLOSURES.

 

7.1                     Does your company handle an aggregate of at least 500
pounds, 55 gallons or 200 cubic feet of hazardous material at any given time?

Yes   o        No  o

 

7.2                     Has your company prepared a Hazardous Materials
Disclosure — Chemical Inventory and Business Emergency Plan or similar
disclosure document pursuant to state or county requirements?

Yes   o        No   o

 

If so, attach a copy.

 

7.3                     Are any of the chemicals used in your operations
regulated under Proposition 65?

Yes   o        No   o

 

If so, describe the procedures followed to comply with these requirements.

 

 

 

 

7.4                     Is your company subject to OSHA Hazard Communication
Standard Requirements?

Yes   o        No   o

 

If so, describe the procedures followed to comply with these requirements.

 

 

 

 

8.                                                  ANIMAL TESTING.

 

8.1                     Does your company bring or intend to bring live animals
onto the premises for research or development purposes?

Yes   o        No   o

 

If so, describe the activity.

 

 

 

 

8.2                     Does your company bring or intend to bring animal body
parts or bodily fluids onto the premises for research or development purposes?

Yes   o        No   o

 

If so, describe the activity.

 

 

 

 

9.                                                  ENFORCEMENT ACTIONS,
COMPLAINTS.

 

9.1                     Has your company ever been subject to any agency
enforcement actions, administrative orders, lawsuits, or consent orders/decrees
regarding environmental compliance or health and safety?

Yes   o        No   o

 

If so, describe the actions and any continuing obligations imposed as a result
of these actions.

 

 

 

 

9.2                     Has your company ever received any request for
information, notice of violation or demand letter, complaint, or inquiry
regarding environmental compliance or health and safety?

Yes   o        No   o

 

9.3                     Has an environmental audit ever been conducted which
concerned operations or activities on premises occupied by you?

Yes   o        No   o

 

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9.4                   If you answered “yes” to any questions in this section,
describe the environmental action or complaint and any continuing compliance
obligation imposed as a result of the same.

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

 

4

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EXHIBIT X

 

WORK LETTER

 

This Work Letter shall set forth the terms and conditions relating to the
construction of the “Tenant Improvements” (as defined below) in and to the
Premises, which shall consist of all interior improvements in and to the
Premises over and above the “Base Building” improvements to be constructed by
Landlord (and as defined and provided for in Section 1 of this Work Letter
below).  All references in this Work Letter to Articles or Sections of “this
Lease” shall mean the relevant portion of the Sections of the Lease to which
this Work Letter is attached as Exhibit X and of which this Work Letter forms a
part, and all references in this Work Letter to Sections of “this Work Letter”
shall mean the relevant portion of Sections 1 through 5 of this Work Letter. 
All initially capitalized words not separately defined herein shall have the
meaning given to such words in the Lease.

 

SECTION 1
LANDLORD’S CONSTRUCTION OF THE BASE BUILDING;
ACCESS FOR COMMENCEMENT OF TENANT IMPROVEMENTS; DELAY IN DELIVERY

 

1.1                      Base Building Construction.  Landlord shall construct,
at its sole cost and expense, and without deduction from the Landlord
Contribution, the base, shell, and core of each of the Buildings (as applicable
to a particular Building, the “Base, Shell and Core” and/or “Base Building”), in
accordance with the outline specifications for the Base Building  attached
hereto as Schedule 1 (the “Base Building Description”).  Landlord and Tenant
acknowledge and agree that, as of the date hereof, the plans to construct each
Base, Shell and Core (the “Base Building Plans”) are not in final form.  After
the date hereof, Landlord shall continue to prepare the Base Building Plans,
which Base Building Plans shall be consistent with the Base Building
Description, subject to “Landlord Minor Changes” (as defined below).

 

1.2                      Landlord Minor Changes.  Landlord hereby reserves the
right to modify the Base Building Description and Base Building Plans, provided
that such modifications (A) are required to comply with applicable Laws,
(B) relate to areas of the Project located outside of the Buildings, or (C) will
not (i) materially and adversely affect Tenant’s permitted use of the Premises
and the Project, or the ground floor lobbies of the Buildings, or (ii) require
material changes to any Construction Drawings (as defined in Section 3.1 below)
previously approved by Landlord and Tenant, that would materially increase the
costs of, or delay the performance of, constructing the Tenant Improvements
(collectively, “Landlord Minor Changes”).  Landlord will provide Tenant written
notice of any Landlord Minor Changes.  If Landlord makes any Landlord Minor
Changes after Tenant has prepared its final construction drawings set, Landlord
shall reimburse Tenant for all reasonable costs incurred by Tenant in changing
the drawings set to reflect the Landlord Minor Changes.

 

1.3                      License for Tenant Improvement Work and Delivery
Conditions — Tenant’s Contractor Is Base Building Contractor.  If the general
contractor (“Tenant’s Contractor”) for the Tenant Improvements is the general
contractor (“Base Building Contractor”) constructing the Base, Shell and Core of
each Building, the following shall apply:

 

1.3.1                      Landlord shall permit Tenant and its agents to enter
each Building in order that Tenant may perform any work to be performed by
Tenant hereunder promptly following the date (“Early Delivery Condition Date”)
on which the “Early Delivery Condition” (as defined in Schedule 2 hereto) is
achieved for both Buildings.

 

1.3.2                      Landlord currently estimates that the Early Delivery
Date will occur by April 1, 2020.  If, for any reason whatsoever, the Early
Delivery Condition Date has not occurred by April 1, 2020, this Lease shall not
be void or voidable nor shall Landlord be liable to Tenant for any resulting
loss or damage.  Notwithstanding the foregoing, if the Early Delivery Date has
not occurred on or before the Outside Early Delivery Date (defined below),
Tenant shall be entitled to a rent abatement following the Commencement Date of
one day’s Basic Rent for every day in the period beginning on the Outside Early
Delivery Date and ending on the Early Delivery Condition Date.  Notwithstanding
anything to the contrary in the foregoing, if the Early Delivery Date has not
occurred on or before the Outside Early Delivery Date, in lieu of the rent
abatement set forth in the preceding sentence, Landlord shall have the right to
modify and accelerate the construction schedule for the Tenant Improvements, in
coordination with Tenant and Tenant’s Contractor, so that the scheduled
completion date for the Tenant Improvements will be 180 days after the Outside
Early Delivery Date provided that Landlord agrees to pay the additional charges
of the Tenant’s Contractor for such modification to the construction schedule
for the Tenant Improvements.  By way of example, (a) if the Outside Early
Delivery Date remains June 1, 2020, (b) the Early Delivery Date occurs after
such date, and (c) Landlord elects to modify the construction schedule for the
Tenant Improvements and agrees to pay the additional costs therefor as provided
above, such schedule would be modified to provide that the completion date for
the Tenant Improvements will be November 28, 2020 (i.e., 180 days after June 1,
2020).  The “Outside Early Delivery Date” shall mean June 1, 2020.  Landlord and
Tenant acknowledge and agree that (i) the determination of the Early Delivery
Date shall take into consideration the effect of any “Tenant Delays” (as defined
in Section 1.8 below), and (ii) the Outside Early Delivery Date shall be
postponed by the number of days the Delivery Condition is delayed due to events
of force majeure (which force majeure delays shall not exceed 270 days in the
aggregate).

 

5

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1.4                      License for Tenant Improvement Work and Delivery
Conditions — Tenant’s Contractor Is Not Base Building Contractor.  If Tenant’s
Contractor is not the Base Building Contractor, the following provisions shall
apply:

 

1.4.1                      Landlord shall permit Tenant and its agents to enter
each Building in order that Tenant may perform any work to be performed by
Tenant hereunder promptly following the date (“Delivery Condition Date”) on
which the “Delivery Condition” (as defined in Schedule 3 hereto) is achieved for
each respective Building.

 

1.4.2                      Landlord currently estimates that the Delivery
Condition Date will occur for Building 9 by July 1, 2020, and that the Delivery
Condition Date will occur for Building 10 by August 1, 2020.  If, for any reason
whatsoever, the Delivery Condition Date has not occurred by the applicable date
set forth above for either or both Buildings, this Lease shall not be void or
voidable nor shall Landlord be liable to Tenant for any resulting loss or
damage.  Notwithstanding the foregoing, if the Delivery Condition Date for a
Building has not occurred on or before the applicable “Outside Delivery Date”
(defined below), Tenant shall be entitled to a rent abatement following the
Commencement Date of one day’s Basic Rent with respect to such Building for
every day in the period beginning on the Outside Delivery Date and ending on the
date on which the Delivery Condition Date occurs with respect to the applicable
Building.  Notwithstanding anything to the contrary in the foregoing, if the
Delivery Date has not occurred on or before the Outside Delivery Date, in lieu
of the rent abatement set forth in the preceding sentence, Landlord shall have
the right to modify and accelerate the construction schedule for the Tenant
Improvements, in coordination with Tenant and Tenant’s Contractor, so that the
scheduled completion date for the Tenant Improvements will be 180 days after the
Outside Delivery Date provided that Landlord agrees to pay the additional
charges of the Tenant’s Contractor for such modification to the construction
schedule for the Tenant Improvements.  The “Outside Delivery Date” shall mean
(a) September 1, 2020, with respect to Building 9, and (b) October 1, 2020, with
respect to Building 10.  Landlord and Tenant acknowledge and agree that (i) the
determination of the Delivery Condition Date shall take into consideration the
effect of any “Tenant Delays,” and (ii) the Outside Delivery Date shall be
postponed by the number of days the Delivery Condition is delayed due to events
of force majeure (which force majeure delays shall not exceed 270 days in the
aggregate).

 

1.5                      Terms of License.  All of the provisions of this Lease
shall apply to any activity of Tenant, its agents and contractors in the
Premises prior to the Commencement Date, except for the obligation of Tenant to
pay rent.

 

1.6                      Acknowledgement Regarding Delivery Conditions.  The
parties acknowledge and agree that the Early Delivery Condition and the Delivery
Condition do not reflect all work necessary to cause the Buildings to be in
substantially completed Base, Shell and Core condition.  As such, Landlord shall
continue to be obligated to perform additional construction after the completion
of the Early Delivery Condition or Delivery Condition, as applicable, to cause
the Buildings to be in “Final Condition” (as defined below).  From and after the
Early Delivery Date or Delivery Date (as applicable), neither party shall
unreasonably interfere with or delay the work of the other party and/or its
contractors or consultants, and both parties shall mutually coordinate and
cooperate with each other, and shall cause their respective employees, vendors,
contractors, and consultants to work in harmony with and to mutually coordinate
and cooperate with the other’s employees, vendors, contractors and consultants,
respectively, to minimize any interference or delay by either party with respect
to the other party’s work.  Notwithstanding the foregoing, in the event of any
irreconcilable conflict between the work of Landlord’s workers, mechanics and
contractors and the work of Tenant’s workers, mechanics and contractors,
Landlord and Tenant shall resolve such conflict or interference by a reasonable
resequencing or rescheduling of Tenant’s remaining work as necessary to avoid
the conflict or interference.

 

1.7                      Final Condition.  The “Final Condition” shall be deemed
to have occurred when both of the following have occurred: (1) the Base, Shell
and Core for both Buildings have been substantially completed in accordance with
the Base Building Plans (as the same may be modified in accordance with the
terms and conditions of this Work Letter), and Landlord’s architect has
certified in writing that the Base, Shell and Core have been completed in
accordance with the Base Building Plans, with the exception of any punch list
items, (2) all necessary governmental inspections of the Base, Shell and Core
for both Buildings have been obtained and approved, and the City of Sunnyvale
has signed off on the permit cards for the Base, Shell and Core for both
Buildings, (3) all utilities systems serving the Buildings, the elevators
serving the Buildings, the life safety support systems serving the Buildings
(including fire sprinklers and safety auditory systems), all heating,
ventilating and air conditioning systems and all mechanical, electrical and
plumbing systems serving the Buildings, except to the extent such items may be
included in the Tenant Improvements, have been installed and are operating;
(4) the Buildings are in such a state of completion that, upon completion of the
Tenant Improvements, the requirements necessary to obtain approval for occupancy
of the Premises from applicable governmental authorities (including approval
from the Building Department and Fire Department of the City of Sunnyvale for
Tenant to occupy the Premises) have been satisfied; and (5) the “Site Planning”
work (parking structure, roadways, sidewalks, Project lighting, plaza area, and
landscaping) described in Schedule 1 of this Work Letter is completed to the
extent necessary to obtain approval for occupancy of the Premises from
applicable governmental authorities (including approval from the Building
Department and Fire Department of the City of Sunnyvale for Tenant to occupy the
Premises) upon completion of the Tenant Improvements.  The “Final Condition
Date” shall be the earlier of (a) the date on which Final Condition occurs, or
(b) the date on which Final Condition would have occurred but for Tenant
Delays.  If the Final Condition Date has not occurred on or before the Required
Completion Date (defined below), Tenant

 

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shall be entitled to a rent abatement following the Commencement Date of one
day’s Basic Rent for every day in the period beginning on the Required
Completion Date and ending on the Final Condition Date.  In addition, if the
Final Condition Date has not occurred by the Outside Final Condition Date (as
defined below), Tenant, as its sole remedy, may terminate this Lease by giving
Landlord written notice of termination on or before 10 business days after the
Required Completion Date.  In such event, this Lease shall be deemed null and
void and of no further force and effect and Landlord shall promptly refund any
prepaid Rent and Security Deposit, if any, previously advanced by Tenant under
this Lease and, so long as Tenant has not previously defaulted under any of its
obligations under this Work Letter, the parties hereto shall have no further
responsibilities or obligations to each other with respect to this Lease.  The
“Required Completion Date” shall mean December 21, 2020.  The “Outside Required
Completion Date” shall mean March 31, 2021.  Landlord and Tenant acknowledge and
agree that (i) the determination of the Final Condition Date shall take into
consideration the effect of any Tenant Delays; and (ii) the Required Completion
Date shall be postponed by the number of days the Final Condition is delayed due
to events of force majeure (which force majeure delays shall not exceed 270 days
in the aggregate).

 

1.8                      Tenant Delays.  As used herein, the term “Tenant Delay”
shall mean any of the following that is not cured within one (1) business day
after Tenant’s receipt of written notice thereof from Landlord (i) the failure
of Tenant to timely approve or disapprove any matter requiring Tenant’s approval
relating to the construction of any Base, Shell and Core; (ii) interference by
Tenant, its agents or other Tenant Parties with the substantial completion of
either Base, Shell and Core, (iii) Tenant’s physical alteration of the items of
either Base, Shell and Core or Tenant’s failure to complete or construct any
portion of the Tenant Improvements (a “Tenant Improvement Requirement”), the
lack of which Tenant Improvement Requirement interferes with Landlord’s ability
to cause the Early Delivery Condition, Delivery Condition or Final Condition to
occur, or adversely affects Landlord’s ability to obtain all approvals and
permits from the appropriate governmental authorities required for Tenant’s
commencement of construction of the Tenant Improvements for Base, Shell and Core
for either Building, and (iv) any actual delay resulting from any error in the
design of the Tenant Improvements (including if the same do not comply with
applicable Laws).

 

1.9                      Landlord Delays.  As used herein, the term “Landlord
Delay” shall mean any of the following that is not cured within one (1) business
day after Landlord’s receipt of written notice thereof from Tenant:  (i) the
failure of Landlord to timely approve or disapprove any matter requiring
Landlord’s approval relating to the construction of the Tenant Improvements;
(ii) interference by Landlord, its agents, contractors with substantial
completion of the Tenant Improvements, including, without limitation, failure to
complete any portion of the Base, Shell and Core where such failure interferes
with Tenant’s ability to install any component of the Tenant Improvements, so to
the extent that such failure actually delays completion of the Tenant
Improvements by the Commencement Date; and (iii) any delay in the issuance by
the City of Sunnyvale of the building permit(s) or a temporary or final
certificate of occupancy for the Tenant Improvements due to any violation of
applicable Laws with respect to the Base, Shell and Core of either Building.

 

1.10               Calculation of Delay.  At each periodic on-site work review
meeting for the Base, Shell and Core Work and the Tenant Improvements, Landlord
and Tenant through their respective designated construction representative,
shall account for and allocate all Landlord Delays, Tenant Delays and force
majeure delays.  If Landlord and Tenant, through their respective designated
construction representatives, are unable to agree on the allocation of Landlord
Delays, Tenant Delays and force majeure delays, then promptly following the
Commencement Date such dispute shall be resolved in accordance with the
provisions of Section 14.7(b) of the Lease.

 

1.11               Termination and Surrender of Possession of Existing Tenant. 
The land on which the Buildings are to be constructed is improved with a
building and associated improvements (“Existing Improvements”) which are
occupied by an existing tenant (“Existing Tenant”).  The Existing Improvements
will be demolished as part of the development of the Premises and the Project. 
The Existing Tenant’s lease is scheduled to expire June 30, 2019, and Landlord
is negotiating with the Existing Tenant for the early termination of such lease
and the surrender of possession of the Existing Improvements by the Existing
Tenant on or before March 31, 2019.  The Outside Early Delivery Date, the
Outside Delivery Date, the Required Condition Date and the Outside Required
Condition Date (each a “Target Date”) have been determined based on the
termination of the Existing Tenant’s lease and its surrender of possession on or
before March 31, 2019.  If the lease with the Existing Tenant is not terminated
by March 31, 2019, and/or the Existing Tenant does not surrender possession of
the Existing Improvements on or before such date, each Target Date shall be
extended day for day for every day in the period commencing on March 31, 2019,
to the date on which the Existing Tenant’s lease expires or is terminated and
the Existing Tenant surrenders possession of the Existing Improvements.

 

1.12               Construction of Base, Shell and Core.  The Base, Shell and
Core shall be constructed in accordance with the Base Building Plans (as they
may be modified by Landlord Minor Changes) and in compliance with all applicable
Law, in a good and workmanlike manner, free of defects and using new materials
and equipment of good quality.  Tenant’s right to submit a punch list and
Landlord’s warranties with respect to the Base, Shell and Core for the Buildings
are set forth in Sections 2.3 and 2.4 of the Lease, and nothing in this Work
Letter shall be deemed to modify or otherwise conflict with such rights and
obligations.  For avoidance of doubt, if Tenant is unable to obtain any required
permit or approval because any component of the Base, Shell and Core for either
Building is not in compliance with all applicable Law, Landlord shall be
responsible to cure the applicable non-compliance of the Base, Shell

 

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and Core and the Commencement Date shall be delayed by the same number of days
the completion of the Tenant Improvements is delayed arising out of Landlord’s
cure of the noncompliance.

 

SECTION 2

TENANT IMPROVEMENTS

 

2.1                      Landlord Contribution.  Tenant shall be entitled to a
one-time Landlord Contribution (the “Landlord Contribution”) in the amount of
$18,180,000.00, based on $75.00 per rentable square foot of the Premises, for
the costs relating to the initial design, permitting and construction of the
improvements, which are permanently affixed to the Premises (the “Tenant
Improvements”).  Not less than $50.00 per rentable square foot shall be spent on
each floor of the Premises that Tenant constructs.  Landlord shall contribute an
amount not to exceed $0.10 per rentable square foot of the Premises (the
“Landlord’s Drawing Contribution”) toward the cost of one (1) preliminary space
plan to be prepared by “Architect” (as defined in Section 3.1), below, and no
portion of the Landlord’s Drawing Contribution, if any, remaining after the
completion of the Tenant Improvements shall be payable to or available for use
by Tenant.  Tenant shall provide an electronic copy of such preliminary space
plan to Landlord promptly following completion of the same.  In no event shall
Landlord be obligated to pay a total amount which exceeds the Landlord
Contribution and Landlord’s Drawing Contribution.  Notwithstanding the foregoing
or any contrary provision of this Lease, all Tenant Improvements shall be deemed
Landlord’s property upon the expiration or earlier termination of this Lease. 
Any unused portion of the Landlord Contribution for which Tenant has not
submitted the required documentation pursuant to Section 2.2.2.1 below by the
date that is eighteen (18) months after the Final Completion Date shall remain
with Landlord and Tenant shall have no further right thereto.

 

2.2                      Disbursement of the Landlord Contribution.

 

2.2.1                      Landlord Contribution Items.  Except as otherwise set
forth in this Work Letter, the Landlord Contribution shall be disbursed by
Landlord only for the following items and costs (collectively the “Landlord
Contribution Items”):

 

2.2.1.1                      Payment of the fees of the “Architect” and the
“Engineers” (as those terms are defined in Section 3.1 below) and payment of any
third-party fees incurred by, and the cost of documents and materials supplied
by, Landlord and Landlord’s consultants in connection with the preparation and
review of the “Construction Drawings” (as defined in Section 3.1 below);

 

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

 

2.2.1.3                      The cost of construction of the Tenant
Improvements, including, without limitation, testing and inspection costs,
freight elevator usage, hoisting and trash removal costs, (to the extent that
either may be passed through to Tenant or are incurred by Tenant), and
contractors’ fees and general conditions;

 

2.2.1.4                      The cost of any changes in the Base Building when
such changes are required by the Construction Drawings, such cost to include all
direct actual and reasonable third-party architectural and/or engineering fees
and expenses incurred in connection therewith;

 

2.2.1.5                      The cost of any changes to the Construction
Drawings or Tenant Improvements required by all applicable building codes (the
“Code”);

 

2.2.1.6                      The cost of connection of the Premises to the
Building’s energy management systems;

 

2.2.1.7                      The cost of the “Supervisory Fee” (as defined in
Section 4.2.2.1 below);

 

2.2.1.8                      Sales and use taxes and Title 24 fees;

 

2.2.1.9                      Intentionally omitted; and

 

2.2.1.10               Any costs and/or expenses incurred in connection with the
design, permitting and construction of the Tenant Improvements which are (i) the
obligation of Tenant under this Work Letter (but not the purchase price of
furniture, fixtures, equipment, or any other items of personal property), or
(ii) expressly designated in the Lease as costs and/or expenses which may be
deducted from the Landlord Contribution.

 

2.2.2                      Disbursement of Landlord Contribution.  During the
construction of the Tenant Improvements, Landlord shall make monthly
disbursements of the Landlord Contribution for Landlord Contribution Items and
shall authorize the release of monies as follows:

 

2.2.2.1                      Monthly Disbursements.  On or before the twentieth
(20th) day of each calendar month, during the construction of the Tenant
Improvements (or such other date as Landlord reasonably may designate) (each, a
“Submittal Date”), Tenant shall deliver to Landlord:  (i) a request for payment
of the Tenant’s Contractor, approved by Tenant, in a commercially reasonable
form

 

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to be provided by Landlord, showing the schedule, by trade, of percentage of
completion of the Tenant Improvements in the Premises, detailing the portion of
the work completed and the portion not completed; (ii) invoices from all of
“Tenant’s Agents” (as is defined in Section 4.1.2 below), for labor rendered and
materials delivered to the Premises; (iii) final, unconditional mechanic’s lien
releases with respect to the work covered by the disbursement request from all
of Tenant’s Agents which shall be executed, acknowledged and in recordable form
and comply with the appropriate provisions, as reasonably determined by
Landlord, of both California Civil Code Section 8134 and either Section 8136 or
Section 8138; and (iv) all other information reasonably requested by Landlord;
provided, however, with respect to fees and expenses of the Architect, or
construction or project managers or other similar consultants, and/or any other
pre-construction items for which the payment scheme set forth in items
(i) through (iii), above, of this Work Letter, is not applicable (collectively,
the “Exception Items”), Tenant shall only be required to deliver to Landlord on
or before the applicable Submittal Date, an invoice of the cost for the
applicable Exception Items.  Tenant’s request for payment shall be deemed
Tenant’s acceptance and approval of the work furnished and/or the materials
supplied as set forth in Tenant’s payment request vis-à-vis Landlord.  Within
thirty (30) days of Landlord’s receipt of the request for payment (or, if the
request for payment is deficient with respect to clauses (i)-(iv) above, within
thirty (30) days of a corrected request for payment), Landlord shall deliver a
check to Tenant made payable to Tenant in payment of the lesser of:  (A) the
amounts so requested by Tenant, as set forth in this Section 2.2.2.1, above,
less a ten percent (10%) retention (the aggregate amount of such retentions to
be known as the “Final Retention”), and (B) the balance of any remaining
available portion of the Landlord Contribution (not including the Final
Retention), provided that no such retention shall be applicable to the fees of
the Architect, Engineers, Tenant’s construction or project manager, or other
similar consultants.  In the event that Landlord identifies any material
non-compliance with the “Approved Working Drawings” (as defined in Section 3.4
below), or any substandard work, Landlord will provide Tenant with a reasonably
detailed statement identifying such material non-compliance or substandard work
and Tenant shall cause such work to be corrected.  Landlord’s payment of such
amounts shall not be deemed Landlord’s approval or acceptance of the work
furnished or materials supplied as set forth in Tenant’s payment request.

 

2.2.2.2                      Final Retention.  Subject to the provisions of this
Work Letter, a check for the Final Retention payable to Tenant shall be
delivered by Landlord to Tenant within thirty (30) days following the completion
of construction of the Tenant Improvements, provided that (i) Tenant delivers to
Landlord (a) paid invoices for all Tenant Improvements and related costs for
which the Landlord Contribution is to be disbursed, (b) signed permits for all
Tenant Improvements completed within the Premises, (c) final unconditional
mechanics lien releases, properly executed, acknowledged and in recordable form
and in compliance with both California Civil Code Section 8134 and either
Section 8136 or Section 8138, from Tenant’s Contractor, subcontractors and
material suppliers and any other party which has lien rights in connection with
the construction of the Tenant Improvements, (ii) Landlord has determined that
no substandard work exists which adversely affects the mechanical, electrical,
plumbing, heating, ventilating and air conditioning, life-safety or other
systems of the Building, the curtain wall of the Building, the structure or
exterior appearance of the Building (Landlord to provide written notice of such
determination to Tenant not later than 45 days after the completion of
construction of the Tenant Improvements), (iii) Architect delivers to Landlord a
“Certificate of Substantial Completion”, in a form reasonably acceptable to
Landlord, certifying that the construction of the Tenant Improvements in the
Premises has been substantially completed, (iv) Tenant delivers to Landlord a
“close-out package” in both paper and electronic forms (including, as-built
drawings, and final record CADD files for the associated plans, warranties and
guarantees from all contractors, subcontractors and material suppliers, and an
independent air balance report); and (v) a CofO is issued to Tenant for the
Premises.

 

2.2.2.3                      Other Terms.  Landlord shall only be obligated to
make disbursements from the Landlord Contribution to the extent costs are
incurred by Tenant for Landlord Contribution Items.  All Landlord Contribution
Items for which the Landlord Contribution has been made available shall be
deemed Landlord’s property under the terms of this Lease upon the expiation or
earlier termination thereof.  Notwithstanding anything to the contrary contained
in this Exhibit, Landlord shall not be obligated to make any disbursement of the
Landlord Contribution during the pendency of any of the following:  (i) Landlord
has received written notice of any unpaid claims relating to any portion of the
work or materials in connection therewith, other than claims which will be paid
in full from such disbursement, (ii) there is an unbonded lien outstanding
against the Project or the Premises or Tenant’s interest therein by reason of
work done, or claimed to have been done, or materials supplied or specifically
fabricated, claimed to have been supplied or specifically fabricated, to or for
Tenant or the Premises, (iii) the conditions to the advance of the Landlord
Contribution are not satisfied, or (iv) an event of Default by Tenant exists. 
Notwithstanding the foregoing, to the extent that a dispute shall arise as to
whether certain amounts of the Landlord Contribution are due and/or payable to
Tenant, any amounts which are not the subject of such dispute shall be disbursed
by Landlord, subject to the terms of this Work Letter.

 

2.3                      Building Standards; LEED Standards.  Landlord has
established or may establish specifications for certain Building standard
components to be used in the construction of the Tenant Improvements in the
Premises.  The quality of Tenant Improvements shall be equal to or of greater
quality than the quality of such Building standards, provided that Landlord may,
at Landlord’s option, require the Tenant Improvements to comply with certain
Building standards.  Landlord may make changes to said specifications for
Building standards from time to time.  Tenant shall comply with the LEEDS
requirements necessary to obtain the LEED certifications required for the
Buildings and Tenant Improvements by the City of Sunnyvale.

 

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2.4                      Failure to Disburse Landlord Contribution.  If Landlord
fails to timely fulfill its obligation to fund any portion of the Landlord
Contribution, Tenant shall be entitled to deliver notice (the “Payment Notice”)
thereof to Landlord and to any Superior Holders of the Building whose identity
and address have been previously provided to Tenant.  If Landlord still fails to
fulfill any such obligation within twenty (20) business days after Landlord’s
receipt of the Payment Notice from Tenant and if Landlord fails to deliver
notice to Tenant within such twenty (20) business day period explaining
Landlord’s reasons that Landlord believes that the amounts described in Tenant’s
Payment Notice are not due and payable by Landlord (“Refusal Notice”), Tenant
shall be entitled, after Landlord’s failure to pay such amounts within five
(5) business days after Tenant’s delivery of a second notice from Tenant
delivered after the expiration of such (20) business day period, which second
notice must contain the following inscription, in bold faced lettering: “SECOND
NOTICE DELIVERED PURSUANT TO SECTION 2.4 OF THE WORK LETTER ATTACHED TO THE
LEASE - - FAILURE TO TIMELY PAY THE REQUESTED ALLOWANCE MAY RESULT IN TENANT’S
PAYMENT OF THE SAME AND A DEDUCTION FROM RENT UNDER THE LEASE,” pay the same and
offset the amount (together with interest at the Default Rate) so owed to Tenant
by Landlord but not paid by Landlord (or if Landlord delivers a Refusal Notice
but only with respect to a portion of the amount set forth in the Payment Notice
and Landlord fails to pay such undisputed amount as required by the next
succeeding sentence, the undisputed amount so owed to Tenant) from the last day
of such twenty (20) business day period until the date of offset, against
Tenant’s next obligations to pay Rent.  Notwithstanding the foregoing, Landlord
hereby agrees that if Landlord delivers a Refusal Notice disputing a portion of
the amount set forth in Tenant’s Payment Notice, Landlord shall pay to Tenant,
concurrently with the delivery of the Refusal Notice, the undisputed portion of
the amount set forth in the Payment Notice.  However, if Tenant is in Default
under the Lease at the time that such offset would otherwise be applicable,
Tenant shall not be entitled to such offset until such Default is cured.  If
Landlord delivers a Refusal Notice, and if Landlord and Tenant are not able to
agree on the disputed amounts to be so paid by Landlord, if any, within ten
(10) days after Tenant’s receipt of a Refusal Notice, Tenant may submit such
dispute to a referee under the provisions of the California Code of Civil
Procedure, Sections 638 — 645.1, inclusive, in accordance with Section 14.7 of
the Lease.  If Tenant prevails in any such reference proceeding, Tenant shall be
entitled to apply such award as a credit against Tenant’s obligations to pay
Rent; provided, however, in no event shall the amount offset in any month exceed
an amount equal to 50% of the Basic Rent scheduled to be paid for such month.

 

SECTION 3

CONSTRUCTION DRAWINGS

 

3.1                      Selection of Architect/Construction Drawings.  Tenant
shall retain the architect/space planner reasonably approved by Landlord (the
“Architect”), which approval shall not be unreasonably withheld, conditioned or
delayed, to prepare the “Construction Drawings” (as defined in this Section 3.1
below).  Landlord hereby pre-approves Form 4 as the Architect.  Tenant shall
retain engineers reasonably approved by Landlord (the “Engineers”) to prepare
all plans and engineering working drawings relating to the structural,
mechanical, electrical, plumbing, HVAC, life safety, and sprinkler work in the
Premises, which work is not part of the Base Building.  The plans and drawings
to be prepared by Architect and the Engineers hereunder shall be known
collectively as the “Construction Drawings.”  All Construction Drawings shall be
subject to Landlord’s approval, which shall not be unreasonably withheld,
conditioned or delayed.  Tenant and Architect shall verify, in the field, the
dimensions and conditions as shown on the relevant portions of the Base Building
plans, and Tenant and Architect shall be solely responsible for the same, and
Landlord shall have no responsibility in connection therewith.  Landlord’s
review of the Construction Drawings as set forth in this Section 3, shall be for
its sole purpose and shall not imply Landlord’s review of the same, or obligate
Landlord to review the same, for quality, design, Code compliance or other like
matters.  Accordingly, notwithstanding that any Construction Drawings are
reviewed by Landlord or its space planner, architect, engineers and consultants,
and notwithstanding any advice or assistance which may be rendered to Tenant by
Landlord or Landlord’s space planner, architect, engineers, and consultants,
Landlord shall have no liability whatsoever in connection therewith and shall
not be responsible for any omissions or errors contained in the Construction
Drawings, and Tenant’s waiver and indemnity set forth in this Lease shall
specifically apply to the Construction Drawings.

 

3.2                      Final Space Plan.  Tenant shall supply Landlord with an
AutoCAD file and one (1) hard copy signed by Tenant of its final space plan (the
“Final Space Plan”), along with other renderings or illustrations reasonably
required by Landlord, to allow Landlord to understand Tenant’s design intent,
for the Premises before any architectural working drawings or engineering
drawings have been commenced.  The Final Space Plan shall include a layout and
designation of all offices, rooms and other partitioning, their intended use,
and equipment to be contained therein.  Landlord may request clarification or
more specific drawings for special use items not included in the Final Space
Plan.  Landlord shall advise Tenant within five (5) business days after
Landlord’s receipt of the Final Space Plan for the Premises if the same is
approved, or, if the Final Space Plan is not reasonably satisfactory or is
incomplete in any respect, disapproved, in which event Landlord shall include in
its notice of disapproval a reasonably detailed explanation as to which items
are not satisfactory or complete and the reason(s) therefor.  If Tenant is so
advised that the Final Space Plan is not satisfactory or is incomplete,
representatives of both parties shall promptly make themselves available to
discuss and resolve any such comments or revisions, and such documents shall
promptly be revised by Tenant to incorporate any agreed-upon changes.  In the
event the parties cannot reach agreement and resolve all disputed matters
relating to any such documents, the parties shall promptly meet and confer and
negotiate in good faith to reach agreement on any disputed matters.  Such
procedures shall be repeated until the Final Space Plan is approved.

 

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3.3                      Final Working Drawings.  After the Final Space Plan has
been approved by Landlord and Tenant, Tenant shall supply the Engineers with a
complete listing of standard and non-standard equipment and specifications,
including, without limitation, B.T.U. calculations, electrical requirements and
special electrical receptacle requirements for the Premises, to enable the
Engineers and the Architect to complete the “Final Working Drawings” (as that
term is defined below) in the manner as set forth below.  Upon the approval of
the Final Space Plan by Landlord and Tenant, Tenant shall promptly cause the
Architect and the Engineers to complete the architectural and engineering
drawings for the Premises, and Architect shall compile a fully coordinated set
of architectural, structural, mechanical, electrical and plumbing working
drawings in a form which is complete to allow subcontractors to bid on the work
and to obtain all applicable permits (collectively, the “Final Working
Drawings”) and shall submit the same to Landlord for Landlord’s approval, which
shall not be unreasonably withheld, conditioned or delayed.  The Final Working
Drawings may be submitted in more than one delivery (i.e.,
architectural/structural drawings in one submission, followed by “MEP” drawings
as a separate submission).  Tenant shall supply Landlord with one (1) AutoCAD
file and two (2) hard copies signed by Tenant of the Final Working Drawings. 
Landlord shall advise Tenant within seven (7) business days after Landlord’s
receipt of the Final Working Drawings for the Premises if the same are approved,
or, if the Final Working Drawings are not reasonably satisfactory or are
incomplete in any respect, disapproved, in which event Landlord shall include in
its notice of disapproval a reasonably detailed explanation as to which items
are not satisfactory or complete and the reason(s) therefor.  If Tenant is so
advised that the Final Working Drawings are not satisfactory or are in complete,
representatives of both parties shall promptly make themselves available to
discuss and resolve any such comments or revisions, and such documents shall
promptly be revised by Tenant to incorporate any agreed-upon changes.  In the
event the parties cannot reach agreement and resolve all disputed matters
relating to any such documents, the parties shall promptly meet and confer and
negotiate in good faith to reach agreement on any disputed matters.  Such
procedure shall be repeated until the Final Working Drawings are approved. 
Notwithstanding the foregoing, Tenant may, at Tenant’s sole risk, submit Final
Working Drawings to applicable building departments for approval concurrently
with its submission to Landlord for approval.

 

3.4                      Approved Working Drawings.  The Final Working Drawings
shall be approved by Landlord (the “Approved Working Drawings”) prior to the
commencement of construction of the Tenant Improvements by Tenant.  Subject to
the last sentence of Section 3.3 above, after approval by Landlord of the Final
Working Drawings, Tenant may submit the same to the appropriate municipal
authorities for all applicable building permits (the “Permits”).  Tenant hereby
agrees that neither Landlord nor Landlord’s consultants shall be responsible for
obtaining any building permit or certificate of occupancy for the Premises and
that obtaining the same shall be Tenant’s responsibility; provided, however,
that Landlord shall cooperate in good faith with Tenant in executing permit
applications and performing other ministerial acts reasonably necessary to
enable Tenant to obtain any such permit or certificate of occupancy.  No
material changes, modifications or alterations in the Approved Working Drawings
may be made without the prior written consent of Landlord, which consent may not
be unreasonably withheld, conditioned or delayed, and will be governed by
Section 3.6 below.  Landlord shall provide any approvals and take any actions
required under this Work Letter within the time periods specified herein, or, if
no time period is specified, then within five (5) business days.

 

3.5                      Change Orders.  In the event Tenant desires to
materially change the Approved Working Drawings, Tenant shall deliver notice
(the “Drawing Change Notice”) of the same to Landlord, setting forth in detail
the changes (the “Tenant Change”) Tenant desires to make to the Approved Working
Drawings.  Landlord shall, within five (5) business days of receipt of a Drawing
Change Notice, either (i) approve the Tenant Change, or (ii) disapprove the
Tenant Change and deliver a notice to Tenant specifying in reasonably sufficient
detail the reasons for Landlord’s disapproval.  Any additional costs which arise
in connection with such Tenant Change shall be paid by Tenant pursuant to this
Work Letter; provided, however, that to the extent the Landlord Contribution has
not been fully disbursed, such payment shall be made out of the Landlord
Contribution subject to the terms of this Work Letter.

 

3.6                      Deemed Approval.  If Landlord fails to notify Tenant of
Landlord’s approval or disapproval of any Construction Drawings within the
applicable time period set forth herein, Tenant shall have the right to provide
Landlord with a second (2nd) written request for approval (a “Second Request”)
that specifically identifies the applicable Construction Drawings and contains
the following statement in bold and capital letters:  “THIS IS A SECOND REQUEST
FOR APPROVAL PURSUANT TO THE PROVISIONS OF SECTION 3.6 OF THE WORK LETTER.  IF
LANDLORD FAILS TO RESPOND WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF THIS
NOTICE, THEN LANDLORD SHALL BE DEEMED TO HAVE APPROVED THE CONSTRUCTION DRAWINGS
DESCRIBED HEREIN.”  If Landlord fails to respond to such Second Request within
three (3) business days after Landlord’s receipt thereof, the proposed
Construction Drawings shall be deemed approved by Landlord.

 

3.7                      Electronic Approvals.  Notwithstanding any provision to
the contrary contained in the Lease or this Work Letter, Landlord may, in
Landlord’s sole and absolute discretion, transmit or otherwise deliver any of
the approvals required under this Work Letter via electronic mail to Tenant’s
representative identified in Section 5.1 of this Work Letter, or by any of the
other means identified in this Lease.

 

3.8                      Removal of Tenant Improvements.  At the time Tenant
requests Landlord’s consent to the Final Working Drawings, Tenant shall request
a decision from Landlord in writing as to whether Landlord will require Tenant,
at Tenant’s expense, to remove any “Specialty Alterations” (as defined below)
and repair any damage caused by such removal.  If Landlord fails to respond
within ten (10) business days after Tenant’s submission of the Final Working
Drawings, then Tenant may deliver a

 

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second written notice to Landlord containing the same request as provided above,
which second notice shall contain the following provisions in bold, capitalized
letters:  “IF YOU FAIL TO RESPOND TO THIS REQUEST WITHIN FIVE (5) BUSINESS DAYS
FOLLOWING YOUR RECEIPT OF THIS NOTICE, THEN YOU ARE DEEMED TO HAVE CONSENTED TO
THE SPECIALTY ALTERATIONS DESCRIBED IN THIS NOTICE AND TO HAVE AGREED THAT
TENANT IS NOT REQUIRED TO REMOVE SUCH SPECIALTY ALTERATIONS AT THE EXPIRATION OR
EARLIER TERMINATION OF THIS LEASE.”.  In such event of Landlord’s deemed
consent, Tenant will not be required to remove any such Specialty Alterations
described in Tenant’s second notice to Landlord as provided above.  For purposes
of this Lease “Specialty Alterations” shall mean any of the following: (a) safes
and vaults; (b) specialized flooring (including raised flooring) and/or labs or
data centers (for the purpose of this Section 3.8, the 8 to 10 rack network
closets to be constructed in each Building as part of the Tenant Improvements
shall be considered “data centers”, but Tenant’s removal obligation with respect
to such closets shall be limited to removing the racks and taking the power back
to the power panel serving such closets); (c) conveyors and dumbwaiters; (d) any
improvements which (i) perforate a floor slab in a Building or a wall that
encloses/encapsulates the Building Structure of any Building, or (ii) involve
material plumbing connections (such as kitchens and executive bathrooms outside
of the Building core); (e) special security equipment; and (f) any other
installations, additions, improvements or alterations not typically found in
general use office space or requiring over-standard demolition or restoration
costs for the removal or restoration thereof.   For avoidance of doubt, in no
event shall Tenant be required to remove any component of the Tenant
Improvements that are not Specialty Improvements upon the expiration or earlier
termination of the Lease.

 

SECTION 4

CONSTRUCTION OF THE TENANT IMPROVEMENTS

 

4.1                      Tenant’s Selection of Contractors.

 

4.1.1                      Tenant’s Contractor.  Tenant shall retain Tenant’s
Contractor to construct the Tenant Improvements.  Landlord hereby approves the
Base Building Contractor as Tenant’s Contractor.  Tenant will advise Landlord
whether the Base Building Contractor will be Tenant’s Contractor not later than
January 15, 2020.  If Tenant’s Contractor is to be other than the Base Building
Contractor, such Tenant’s Contractor shall be subject to Landlord’s reasonable
approval (such approval to be granted or withheld within five (5) business days
following Tenant’s notice to Landlord of its selection of the Tenant’s
Contractor), and Tenant shall deliver to Landlord notice of its selection of the
Tenant’s Contractor upon such selection.

 

4.1.2                      Tenant’s Agents.  All subcontractors, laborers, and
materialmen used by Tenant (such subcontractors, laborers, and materialmen and
the Tenant’s Contractor to be known collectively as “Tenant’s Agents”) must be
approved in writing by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed.  If Landlord does not approve any of Tenant’s
proposed subcontractors, laborers, materialmen or suppliers, Tenant shall submit
other proposed subcontractors, laborers, materialmen or suppliers for Landlord’s
written approval, which approval shall not be unreasonably withheld, conditioned
or delayed.  Tenant shall not use (and upon notice from Landlord shall cease
using) contractors, services, workmen, labor, materials or equipment that, in
Landlord’s reasonable judgment, would disturb labor harmony with the workforce
or trades engaged in performing other work, labor or services in or about the
Buildings or the Common Areas.

 

4.2                      Construction of Tenant Improvements by Tenant’s Agents.

 

4.2.1                      Construction Contract; Cost Budget.  Prior to
Tenant’s execution of the construction contract and general conditions with
Tenant’s Contractor (collectively, the “Contract”), Tenant shall submit the
Contract to Landlord for its approval, which approval shall not be unreasonably
withheld, conditioned or delayed; if Landlord fails to respond to such
submission within five (5) business days, Landlord will be deemed to have
approved the Contract.  Tenant shall provide Landlord with a copy of the final
Contract upon request.  Prior to the commencement of the construction of the
Tenant Improvements, and after Tenant has accepted all bids for the Tenant
Improvements, Tenant shall provide Landlord with a detailed breakdown, by trade,
of the final costs to be incurred or which have been incurred, as set forth more
particularly in Sections 2.2.1.1 through 2.2.1.10 of this Work Letter above, in
connection with the design and construction of the Tenant Improvements to be
performed by or at the direction of Tenant or the Tenant’s Contractor, which
costs form a basis for the amount of the Contract (the “Final Costs”).  Prior to
the commencement of construction of the Tenant Improvements (as determined on a
Building by Building basis), Landlord and Tenant shall determine the amount (the
“Over-Allowance Amount”) equal to the difference between the amount of the Final
Costs and the amount of the Landlord Contribution (less any portion thereof
already disbursed by Landlord, or in the process of being disbursed by Landlord,
on or before the commencement of construction of the Tenant Improvements). 
Tenant shall pay a percentage of each amount requested by the Tenant’s
Contractor or otherwise to be disbursed under this Work Letter, which percentage
shall be equal to the percentage that the Over-Allowance Amount bears to the
Final Costs (after deducting from the Final Costs any amounts expended in
connection with the preparation of the Construction Drawings, and the cost of
all other Landlord Contribution Items incurred prior to the commencement of
construction of the Tenant Improvements).  In the event that, after the Final
Costs for a portion of the Premises have been delivered by Tenant to Landlord,
the costs relating to the design and construction of the Tenant Improvements in

 

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such portion of the Premises shall change, any additional costs for such design
and construction in excess of the Final Costs shall be added to the
Over-Allowance Amount and the Final Costs, and the Over-Allowance Payments shall
be recalculated in accordance with the terms of the immediately preceding
sentence.  In connection with any payment of the Over-Allowance Amount be made
by Tenant pursuant to this Section 4.2.1, Tenant shall provide Landlord with the
documents described in Sections 2.2.2.1(i), (ii), (iii) and (iv) of this Work
Letter, above, for Landlord’s reasonable approval, prior to Tenant paying such
costs.  Notwithstanding anything set forth in this Work Letter to the contrary,
construction of the Tenant Improvements in any portion of the Premises shall not
commence until (a) Landlord has approved (or has been deemed to have approved)
the Contract, and (b) except as set forth herein, Tenant has procured and
delivered to Landlord a copy of all Permits for the applicable Tenant
Improvements (provided that Landlord acknowledges that in certain circumstances,
the governmental authority responsible for issuing a Permit for certain
components of work does not issue such permit on a “formal” basis until
substantially after such work has commenced).

 

4.2.2                      Tenant’s Agents.

 

4.2.2.1                      Landlord’s General Conditions for Tenant’s Agents
and Tenant Improvement Work.  Tenant’s and Tenant’s Agent’s construction of the
Tenant Improvements shall be in strict accordance with the Approved Working
Drawings.  Tenant’s Agents shall submit schedules of all work relating to the
Tenant Improvements to “Landlord’s Representative” (defined below) and
Landlord’s Representative shall, within five (5) business days of receipt
thereof, inform Tenant’s Agents of any changes which are reasonably necessary
thereto, and Tenant’s Agents shall adhere to such corrected schedule; and Tenant
shall abide by all reasonable rules made by Landlord’s Representative with
respect to the use of freight, loading dock and service elevators, storage of
materials, coordination of work with the Base Building Contractor, and any other
matter in connection with this Work Letter, including, without limitation, the
construction of the Tenant Improvements.  Tenant shall pay a supervisory fee for
coordination of the Tenant Improvements and other services to be performed by
Landlord described in Schedule 4 of this Work Letter in an amount equal to the
product of (i) two and five-tenths percent (2.5%), and (ii) the Landlord
Contribution.

 

4.2.2.2                      Indemnity.  Tenant’s indemnity of Landlord and
Landlord’s indemnity of Tenant, as set forth in this Lease shall also apply with
respect to any and all costs, losses, damages, injuries and liabilities related
in any way to any act or omission of Tenant or Tenant’s Agents, or act or
omission of Landlord or any Landlord Parties or anyone directly or indirectly
employed by any of them, or in connection with Tenant’s or Landlord’s, as the
case may be, non-payment of any amount arising out of the Tenant Improvements
and/or Tenant’s or Landlord’s, as the case may be, disapproval of all or any
portion of any request for payment.  Such indemnity by Tenant, as set forth in
this Lease, shall also apply with respect to any and all costs, losses, damages,
injuries and liabilities related in any way to Landlord’s performance of any
ministerial acts reasonably necessary (i) to permit Tenant to complete the
Tenant Improvements, and (ii) to enable Tenant to obtain any building permit or
certificate of occupancy for the Premises.

 

4.2.2.3                      Requirements of Tenant’s Agents.  Each of Tenant’s
Agents shall guarantee to Tenant and for the benefit of Landlord that the
portion of the Tenant Improvements for which it is responsible shall be free
from any defects in workmanship and materials for a period of not less than one
(1) year from the date of completion thereof.  Each of Tenant’s Agents shall be
responsible for the replacement or repair, without additional charge, of all
work done or furnished in accordance with its contract that shall become
defective within one (1) year after the completion of the work performed by such
contractor or subcontractors.  The correction of such work shall include,
without additional charge, all additional expenses and damages incurred in
connection with such removal or replacement of all or any part of the Tenant
Improvements, and/or the Building and/or common areas that may be damaged or
disturbed thereby.  All such warranties or guarantees as to materials or
workmanship of or with respect to the Tenant Improvements shall be contained in
the Contract or subcontract and shall be written such that such guarantees or
warranties shall inure to the benefit of both Landlord and Tenant, as their
respective interests may appear, and can be directly enforced by either.  Tenant
covenants to give to Landlord any assignment or other assurances which may be
necessary to effect such right of direct enforcement.

 

4.2.2.4                      Insurance Requirements.

 

4.2.2.4.1  General Coverages.  All of Tenant’s Agents shall carry worker’s
compensation insurance covering all of their respective employees, and shall
also carry commercial general liability insurance all with limits, in form and
with companies as are required to be carried by Tenant as set forth in this
Lease (provided that the limits of liability to be carried by Tenant’s Agents
and Tenant’s Contractor shall be in amounts reasonably required for projects of
comparable size and complexity by Landlord, which shall be reasonably
commensurate with the levels of coverage required by owners of Comparable
Buildings).

 

4.2.2.4.2  Special Coverages.  Tenant shall carry “Builder’s All Risk” insurance
in the amount of the value of the Tenant Improvements covering the construction
of the Tenant Improvements, and such other insurance as Landlord may require, it
being understood and agreed that the Tenant Improvements shall be insured by
Tenant pursuant to this Lease immediately upon completion thereof.  Such
insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord including, but not
limited to, the requirement that all of Tenant’s Agents shall carry excess
liability and Products and Completed Operation Coverage insurance, each in

 

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amounts not less than $5,000,000 per incident, $5,000,000 in aggregate, and in
form and with companies as are required to be carried by Tenant as set forth in
this Lease.

 

4.2.2.4.3  General Terms.  Certificates for all insurance carried pursuant to
this Section 4.2.2.4 shall be delivered to Landlord before the commencement of
construction of the Tenant Improvements and before the Tenant’s Contractor’s
equipment is moved onto the site.  If commercially available, all such policies
of insurance must contain a provision that the company writing said policy will
give Landlord thirty (30) days prior written notice of any cancellation or lapse
of the effective date or any reduction in the amounts of such insurance (and in
any event Tenant shall promptly notify Landlord of any cancellation or lapse of
the effective date or any reduction in the amounts of such insurance).  In the
event that the Tenant Improvements are damaged by any cause during the course of
the construction thereof, Tenant shall immediately repair the same at Tenant’s
sole cost and expense.  Tenant’s Agents shall maintain all of the foregoing
insurance coverage in force until the Tenant Improvements are fully completed
and accepted by Landlord, except for any Products and Completed Operation
Coverage insurance required by Landlord, which is to be maintained for ten
(10) years following completion of the work and acceptance by Landlord and
Tenant.  All policies carried under this Section 4.2.2.4 shall insure Landlord,
Landlord’s property management company, Landlord’s asset management company, any
Landlord’s Mortgagees, and Tenant, as their interests may appear, as well as
Tenant’s Contractor and Tenant’s Agents.  All insurance, except Workers’
Compensation, maintained by Tenant’s Agents shall preclude subrogation claims by
the insurer against anyone insured thereunder.  Such insurance shall provide
that it is primary insurance as respects the owner and that any other insurance
maintained by owner is excess and noncontributing with the insurance required
hereunder.  The requirements for the foregoing insurance shall not derogate from
the provisions for indemnification of Landlord by Tenant and Tenant by Landlord
under this Lease or Section 4.2.2.2 of this Work Letter and each party’s rights
with respect to the waiver of subrogation.  Landlord may, in its discretion,
require Tenant to obtain a lien and completion bond or some alternate form of
security satisfactory to Landlord in an amount sufficient to ensure the
lien-free completion of the Tenant Improvements and naming Landlord as a
co-obligee.

 

4.2.3   Governmental Compliance.  The Tenant Improvements shall comply in all
respects with the following:  (i) the Code and other state, federal, city or
quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer’s specifications.

 

4.2.4   Inspection by Landlord.  Tenant shall use reasonable good faith efforts
to provide Landlord with reasonable prior notice of any inspection scheduled by
Tenant to be performed by a governmental entity in connection with the
construction of the Tenant Improvements in order to allow Landlord to be present
during such inspection; such notice may be delivered by electronic mail to
Landlord’s construction representative described in Section 5.2 of this Work
Letter.   Landlord shall have the right, at all reasonable times and upon notice
to Tenant’s representative, to inspect the Tenant Improvements at all times,
provided however, that Landlord’s failure to inspect the Tenant Improvements
shall in no event constitute a waiver of any of Landlord’s rights hereunder nor
shall Landlord’s inspection of the Tenant Improvements constitute Landlord’s
approval of the same.  Should Landlord reasonably disapprove any portion of the
Tenant Improvements, Landlord shall notify Tenant in writing of such disapproval
and shall specify the items disapproved. If Tenant is so advised,
representatives of both parties shall promptly make themselves available to
discuss and resolve Landlord’s comments or revisions, and such documents shall
promptly be revised by Tenant to incorporate any agreed upon changes.  In the
event the parties cannot reach agreement and resolve all disputed matters
relating to any such documents, the parties shall promptly meet and confer and
negotiate in good faith to reach agreement on any disputed matters.  Any defects
or deviations in the Tenant Improvements from the Tenant Improvements set forth
on the Approved Working Drawings, and/or disapproval by Landlord of, the Tenant
Improvements with which Tenant agrees shall be rectified by Tenant at no expense
to Landlord.  If, after good faith negotiation, the parties still disagree, the
matter shall be submitted to arbitration pursuant to Section 4.2.5 below.

 

4.2.5   Meetings.  Upon the Early Delivery Date or the Delivery Date for the
first Building, as applicable, Tenant shall hold regular meetings with the
Architect and the Tenant’s Contractor regarding the progress of the preparation
of Construction Drawings and the construction of the Tenant Improvements, which
meetings shall be held at a location in the City of Sunnyvale designated
Tenant.  Tenant shall advise Landlord of the schedule for such meetings, and
Landlord and/or its agents shall have the right to attend all regularly
scheduled weekly meetings, and, upon Landlord’s request, certain of Tenant’s
Agents shall attend such meetings.  In addition, minutes shall be taken at all
such meetings, a copy of which minutes shall be promptly delivered to Landlord. 
Once construction has started, one such meeting each month shall include the
review of Tenant’s Contractor’s current request for payment.

 

4.3                                Notice of Completion; Copy of Record Set of
Plans.  Within twenty (20) days after completion of construction of the Tenant
Improvements, Tenant shall cause a Notice of Completion to be recorded in the
office of the Recorder of the county in which the Building is located in
accordance with Section 8182 of the Civil Code of the State of California or any
successor statute, and shall furnish a copy thereof to Landlord upon such
recordation.  If Tenant fails to do so, Landlord may execute and file the same
as Tenant’s agent for such purpose, at Tenant’s sole cost and expense.  At the
conclusion of

 

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construction, (i) Tenant shall cause the Architect and Tenant’s Contractor
(A) to update the Approved Working Drawings as necessary to reflect all changes
made to the Approved Working Drawings during the course of construction, (B) to
certify to the best of their knowledge that the “record-set” of as-built
drawings are true and correct, which certification shall survive the expiration
or termination of this Lease, and (C) to deliver to Landlord two (2) sets of
copies of such record set of drawings within ninety (90) days following issuance
of a certificate of occupancy for the Premises, and (ii) Tenant shall deliver to
Landlord a copy of all warranties, guaranties, and operating manuals and
information relating to the improvements, equipment, and systems in the
Premises.

 

SECTION 5

MISCELLANEOUS

 

5.1                      Tenant’s Representative.  Tenant has designated Patrick
Sullivan as its sole representative with respect to the matters set forth in
this Work Letter (whose e-mail address for the purposes of this Work Letter is
psullivan@proofpoint.com and phone number is (650) 862-6754), who, until further
notice to Landlord, shall have full authority and responsibility to act on
behalf of Tenant as required in this Work Letter.

 

5.2                      Landlord’s Representative.  Landlord has designated
Scott McRobie as its sole representative (“Landlord’s Representative”) with
respect to the matters set forth in this Work Letter (whose e-mail address for
the purposes of this Work Letter is smcrobie@irvinecompany.com and phone number
is (949) 463-4480), who, until further notice to Tenant, shall have full
authority and responsibility to act on behalf of Landlord as required in this
Work Letter.

 

5.3                      Time of the Essence in This Work Letter.  Unless
otherwise indicated, all references herein to a “number of days” shall mean and
refer to calendar days.  If any item requiring approval is timely disapproved by
Landlord, the procedure for preparation of the document and approval thereof
shall be repeated until the document is approved by Landlord.

 

5.4                      Tenant’s Lease Default.  Notwithstanding any provision
to the contrary contained in the Lease or this Work Letter, if any default,
beyond applicable notice and cure periods, by Tenant under the Lease or this
Work Letter occurs at any time on or before the substantial completion of the
Tenant Improvements, then (i) in addition to all other rights and remedies
granted to Landlord pursuant to the Lease, Landlord shall have the right to
withhold payment of all or any portion of the Landlord Contribution and/or
Landlord may cause the Tenant’s Contractor to cease construction of the Tenant
Improvements (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Tenant Improvements and any costs occasioned
thereby), and (ii) all other obligations of Landlord under the terms of this
Work Letter shall be forgiven until such time as such default is cured pursuant
to the terms of the Lease.

 

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SCHEDULE 1 TO EXHIBIT X

BASE BUILDING DESCRIPTION

 

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BUILDINGS:

 

Addresses:

 

·                  Building 9:

925 W Maude Avenue, Sunnyvale, CA 94085

·                  Building 10:

625 N Mary Avenue, Sunnyvale, CA 94085

·                  Parking Structure D:

950 Benecia Avenue, Sunnyvale, CA 94085

 

SITE PLANNING:

 

Site Area:

 

·                  Net Site Area:

±8.77 acres (±382,021 SF)

·                  Office Building Rentable Area:

242,400 RSF

·                  Floor Area Ratio:

0.63

 

Site Construction:

 

·      Asphalt with concrete curbs, integral concrete gutter wherever storm
water will collect and flow adjacent to curb.

·      Integral color concrete plazas with varying textures and finishes. The
site will include event lawns and public art.

·      Class I bike lockers and Class II bike racks will be provided.

 

Site Lighting:

 

·                  LED luminaires are provided along the primary vehicular
access driveways and throughout the parking areas, as required by code.

·      LED are provided in pedestrian areas, as required.

·      Outdoor lighting controlled by automated lighting control system.

 

Outdoor Plaza, Building Edges:

 

·                  Concrete Paving: Asphalt with concrete curbs and gutters are
proposed in parking areas. Decorative concrete, concrete pavers, and stabilized
decomposed granite will be utilized at building entries, the Pathline, and
courtyards respectively.

 

·                  Trees: Groves of redwoods will complement mature existing
redwoods to be preserved. A mix of regionally-relevant canopy and understory
trees will provide seasonal interest and shade throughout the Project.

 

·                  Planting: Planting will be characterized by a strong spatial
strategy of bosque, meadow, hedge, and ground plane treatments.

 

·                  Irrigation: Domestic water will be used to irrigate the site.

 

·                  Site Furnishings: Class 1 bicycle lockers, Class 2 bicycle
racks, and waste receptacles will be provided.

·      Note: Tenant to provide outdoor furniture.

 

SITE PLANNING:

 

Perimeter Edges:

 

North Mary Avenue, Palomar Avenue, Del Rey Avenue, Benecia Avenue, West Maude
Avenue, and Almanor Avenue shall be landscaped with new and existing redwoods.
All perimeter edges will include a mix of regionally-relevant canopy and
understory trees with a mix of grasses, ground covers, and shrubs.

 

Parking:

 

Parking, including accessible parking, will be provided by surface parking and a
Parking Structure.

 

·                  Parking Ratio:

3.3/1,000

 

 

·                  Uniform Size Parking Spaces:

8’-6” x 18’ -0”

·                  Accessible Parking Spaces:

9’-0” x 18’-0”

·                  Electric Vehicle Charging Stations:

25 (Type 2)

·                  Note: Conduit is provided for 25 additional Electric Vehicle
Charging Stations.

 

Parking Structure:

 

4-level Parking Garage. Vertical circulation is facilitated through use of one
(1) traction elevator and a stairway at each lobby, located at the north and
south corner of the structure. Infrastructure at the two points of vehicular
entry and exit has been provided to accommodate a gated access control system.
No parking assist will be provided. Conduits for parking assist are not
pre-installed. LED lighting shall be used.

 

Parking Structure D serves Buildings 9, 10, and 11.

 

OFFICE BUILDING:

 

Overall Dimensions:

 

Number of 3-story Buildings:

2

 

 

Three-story Building Dimensions:

270’-0” x 150’-0”

Three-story Building Height:

57’-2” (top of mech. screen)

Three-story Building Area:

Building 9: 121,200 RSF

 

Building 10: 121,200 RSF

 

Floor / Floor Heights:

 

·                  First Floor to Second Floor:

16’-0”

·                  Second Floor to Third Floor

14’-6”

·                  Top Floor to Roof:

Varies 14’-0” min. to 15’-9”

·                  Typical Tenant finished Ceiling Height

10’-0”

 

 

 

Pathline Park: Outline Specifications – Shell Building Improvements

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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October 1, 2018

Page 9

 

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Module / Glazing Heights:

 

Planning module is 5’ on center.

 

Window openings on upper floors are Floor-to-Ceiling.

 

Perimeter structural columns occur behind glass.

 

OFFICE BUILDING EXTERIOR:

 

Building Envelope

 

The exterior building envelope consists of a 5’ wide x 14’-6” high unitized
curtain wall system with Duranar XL UC57638XL finish.

 

Vision Glass

Viracon VRE30-38 insulated glazing unit with 4 ¼” x 7” extruded aluminum
profiles. STC rating for Viracon’s insulating glass composition is 28-32.

 

Spandrel

Painted metal panels at the floor lines, and building parapet.

Below each floor line is a painted metal shadow box with insulation behind
vision glass and is located at 10’ above finished floor.

 

Roofing:

 

Single ply roofing system over concrete filled metal deck. Acoustical concrete
pads are not included for the mechanical roof top units.

 

Mechanical Screen:

 

Direct Applied Exterior Finish System (DAFS) painted over metal decking.

 

Ground Floor Entry Areas:

 

Painted metal clad canopy at ground floor front entry.

 

Glazing

PPG Starphire glazing set into recessed channels.

 

Entrance Doors

Starphire glazed balanced pivot doors with stainless steel hardware with panic
device and closures.

 

OFFICE BUILDING CORE INTERIOR:

 

Main Lobby:

 

Elevators

Long Grain #4 Stainless Steel elevator doors and frames.

 

LEED:

 

Leadership in Energy and Environmental Design:

 

The Project is registered with the United States Green Building Council’s LEED
for Core and Shell rating system, Version 3, and is targeting the Gold
certification level.

 

Tenant will comply with a minimum of LEED Version 4 Gold Commercial Interiors
and provide the necessary documentation for Landlord to achieve LEED Version 3
Gold Core & Shell.

 

 

 

Pathline Park: Outline Specifications – Shell Building Improvements

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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Elevators:

 

 

 

Elevators

 

Number of Cabs per Building:

Three (3)

Type:

Kone Monospace 700 Gearless

Traction MRL

 

Speed:

350 feet per minute

Capacity:

4,000 pounds

Cab Dimensions (Passenger):

7’-8” x 5’-4”

Entrance Size:

4’-0” x 8’-0”

Cab Height:

10’-0”

Ceiling Height:

9’-6”

Cab Return and Door:

Long grain Stainless Steel

Cab Floor:

Porcelain Tile

Cab Base:

Long grain Stainless Steel

Cab Walls:

Fabric, Stainless Steel

Cab Rail:

Long grain Stainless Steel

Cab Ceiling:

Long grain Stainless Steel

Cab Lighting:

Recessed linear LED

 

Exit Stairways:

 

Walls: Gypsum drywall over 4” x 25 gauge metal studs with a painted finish.

 

Floor Finish Material: Concrete

 

Treads & Landings: Steel channel stringers with lightweight concrete filled
metal pan treads.

 

Exit Stairways: Two (2) 44” wide exit stairways will be provided.

 

Central Exit Stairway: One (1) 48” wide enclosed central exit stairway will be
provided.

 

Toilet Rooms:

 

Fixtures

 

 

 

 

 

 

 

Ground Level:

 

 

 

Men:

5 toilets

Women:

8 toilets

 

3 urinals

 

3 lavatories

 

3 lavatories

 

 

 

 

 

 

Levels 2 and 3:

 

 

 

Men:

5 toilets

Women:

8 toilets

 

3 urinals

 

3 lavatories

 

3 lavatories

 

 

 

Fixture will have hands-free operation.

 

Floors and Bases

16” x 32” porcelain tile; Crossville, Style: “Ready to wear” , color: “Flannel
Suit”, over thinset.

 

Walls

Material: 12” x 24” porcelain tile; Style: “Retroactive”, Color: “Pure White
RPW1”, full height at ‘wet’ walls; base only at all others; over 5/8” tile
backer board over metal studs to structure above, with acoustic batt insulation.

 

Ceiling

Gypsum drywall with painted finish. Recessed down lights with accent cove
lighting.

 

Toilet Partitions

Satin Stainless Steel, floor-mounted.

 

Lavatories

Porcelain tile lavatory top; Daltile, Calacatta, Polished finish, with
under-counter mount porcelain sinks. Three sinks per restroom. Polished chrome
faucets.

 

Mirrors

Vision quality clear vanity mirror above lavatories (full-height, wall-mounted).

 

Accessories

Satin Stainless Steel; recessed.

 

Showers

Two (2) per gender; 1st floor only.

 

ARCHITECTURAL MISCELLANEOUS:

 

Exterior Service Doors:

 

Painted metal panels laminated to back of glass doors with narrow stile frames.
Equipped with Von Duprin electrified panic hardware.

 

Column Enclosures:

 

IC will not frame or install drywall at the perimeter or interior columns.

 

 

 

Pathline Park: Outline Specifications – Shell Building Improvements

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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Insulation:

 

·      R-30 batts at underside of roof deck.

·                  R-13 batts with R-5 continuous insulation at exterior walls.

·                  Fire-safing insulation between edge of deck and perimeter
building skin assembly. The gap between the curtain wall and edge of slab will
be covered with an Aluminum plate.

 

Typical Janitor Room:

 

·                  Janitor Room provided at Ground level and last upper floor of
each Office Building.

·                  Floor-mounted service sink with wall-mounted mop rack.

·                  Fluid applied elastomeric floor and base.

·      Fiberglass reinforced plastic wall panels located adjacent to sink.

 

STRUCTURAL SYSTEMS OFFICE:

 

Foundation System:

 

·      Buildings will be founded on shallow spread footings with ground
improvements below gravity only columns.

·      Grade beams will be required at lateral system foundations.

·                  Ground improvements may consist of drilled displacement
sand-cement columns or soil-cement mix columns or other methods approved by
Geotechnical engineer.

 

On-Grade Floor System:

 

·                  Slabs on grade shall be 5” thick with #4 @ 18” o.c. each way.

·                  All slabs below office space shall have a capillary break
Stego vapor retarder.

 

Elevated Floor Systems:

 

The 3-story structures will consist of 5.5” normal weight concrete fill over
metal deck, supported by composite structural steel framing.

 

Elevated Floor System:

 

·                  The lateral system is a combination of steel moment frames
and/ or buckling restrained brace frames. Typical floors will be designed to 80
psf live load, with reductions allowed per code. The floor system of the office
area will be designed to restrict floor vibrations to peak accelerations less
than .5% G assuming 2% damping, equivalent to AISC design guide 11 walking
criteria in a digital office space.

·                  Building types with cantilevered floor systems on the ends
will be designed to restrict deflections from live loads to less than span
length/ 360. For example, a 55’ bay will have a maximum deflection of 1.8”.

·                  The roof framing is designed to have 5.5” normal weight
concrete over metal deck. Roof will be sloped to accommodate drainage. The area
inside of the roof screen will be designed for 50 psf live load and additional
collateral dead loads accounting for equipment pads and mechanical equipment.

 

STRUCTURAL SYSTEMS GARAGE:

 

Foundation System:

 

·                  The foundations will be of a concentric shallow foundation
system over improved soil. Concrete spread footings and grade beams will be
provided over a system of either soil-cement mix (SMX) columns or drilled
displacement sand-cement columns (DDSC). This foundation will support gravity
and seismic loads while maintaining acceptable levels of building settlement.

·      Ground level slab is 5-inch thick cast-in-place reinforced concrete slab
on grade over 4” Class II aggregate base .

·      Seismic load resisting system is made up of cast-in-place, reinforced
concrete moment frames.

 

Elevated Decks:

 

·                  Elevated parking decks are 5-inch thick, cast-in-place,
hard-rock concrete slabs over long span concrete beams. The slabs are reinforced
with both mild steel and post-tensioned cables. Columns are reinforced cast in
place concrete with typical sizes 24” x 24” on the interior 24” x 42” at the
moment frames. The beams are either cast-in-place (post tensioned) or precast
(pre-stressed), depending on the contractor preference. Beam size is 14” wide.
Girders will be provided at the drive aisles, 24” wide. Both beams and girders
will be 36” deep (including slab depth). All levels are parking decks and will
be sloped to drain.

·                  Structural system will be designed to support seismic, wind,
dead, and live loads as prescribed by the California Building Code. Typical slab
loading is 40 pounds per square foot to account for vehicle loading. Depending
on contractor and owner preference, vehicle barriers (3’-7” above slab) may be
concrete, or cable rail. A 3” tapered wash will be provided at the perimeter and
along the ramp.

·                  To aid in mitigation of shrinkage cracks, a delayed closure
pour (3’-6” wide) will be provided on all elevated parking decks. Expansion
joints will be provided at every level in the ramp. Column corner protection is
not provided.

 

 

 

Pathline Park: Outline Specifications – Shell Building Improvements

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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MECHANICAL SYSTEMS:

 

Heating, Ventilation and Air Conditioning:

 

Office

·                  Cooling and ventilation for the Office Buildings shall be
provided by (2) high efficiency, rooftop mounted packaged VAV AC units per
building each sized for 50% of the design load. Units shall utilize dry coil
condensers. Design cooling load shall be determined based on the following
internal load calculation assumptions: 1.2 W/sqft for lighting, 1.5 W/sqft for
office plug loads, and 100 sqft/person occupant density in office spaces.

·                  AC units shall be headered such that each unit can serve both
supply riser ducts to allow continued service during a short single unit service
or failure event. Units, curbs, shaft riser ducts, and FSDs at shaft
penetrations provided under core scope. Complete zonal service will be provided
under core scope to the lobby using VAV reheat boxes.

·                  Heating shall be provided by an outdoor condensing boiler
plant consisting of two condensing boilers in a weatherproof enclosure and two
parallel, variable speed controlled, primary hot water pumps located on the
roof. Boilers shall each be sized for 60% load to provide partial redundancy.
The boiler plant shall serve future VAV box reheat coils. Hot water distribution
shall consist of a single centrally located hot water riser. Boiler plant, hot
water riser, stub outs on each floor, and piping to lobby VAVs shall be provided
under core scope.

·                  Toilet exhaust shall be provided by a rooftop mounted upblast
exhaust fan connected to an exhaust riser duct serving restrooms on each floor.
Makeup air to restrooms shall be provided by transfer air. Fan, riser exhaust
duct, and complete restroom distribution shall be under core scope.

·      Electrical room shall be served by transfer fans.

 

Parking

·      Transfer fans shall be provided to serve elevator machine room loads.

·      A split system AC unit shall be provided to serve electrical room loads.

 

Plumbing:

 

Complete domestic cold water system provided for at each building.

 

Complete storm drain, rainwater leader, and overflow drain piping for each
building. Piping sized per the CPC and the City of Sunnyvale requirements.
Piping to terminate at exterior to storm water treatment areas.

 

Complete sanitary soil, waste and vent piping systems provided for at each
building.

 

Provide sand/oil interceptor unit(s) to receive all piping from parking deck
drains (below roof level) in the Parking Structure. Size of unit(s) shall be per
the requirements of the City of Sunnyvale.

 

Office

·      Provide domestic hot water system for the points of use. Hot water will
be supplied by an electric water heaters.

·                  Provide natural gas system including an exterior gas seismic
valve assembly. PG&E gas riser contains a shut-off valve. 2.0 PSI (medium)
pressure will be provided. Piping to serve HVAC space heating requirements in
each building.

 

 

 

Pathline Park: Outline Specifications – Shell Building Improvements

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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October 1, 2018

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FIRE PROTECTION SYSTEMS:

 

Fire Protection:

 

·                  Automatic Fire Sprinkler Systems: For each Building the
automatic fire sprinkler systems shall be in accordance with NFPA 13, City of
Sunnyvale Fire Marshal, and the Owner’s Insurance Carrier requirements.

 

·                  Class I Manual Wet Standpipes in Office Building and Parking
Building Stairwells: Stairwells will each have a Class I manual wet standpipe
with a fire department hose valve. Hose valves will be at each level and roof
manifolds for roof levels where roof access is provided. Base of risers will
include a shut-off valve and a supervisory switch. Water supply demand
requirements for the manual wet standpipes will be provided by the Fire
Department through the fire department connections. The system shall be in
accordance with NFPA 14, City of Sunnyvale Fire Marshal, and the Owner’s
Insurance Carrier requirements.

 

ELECTRICAL SYSTEMS:

 

Electrical System:

 

Electrical service via underground utility lines brought to the site by the
serving utility company (PG&E). Underground conduit infrastructure shall extend
to pad mounted PG&E transformers located on-site adjacent to each building. All
primary cables, equipment and transformers will be furnished by PG&E.

 

Buildings will require underground secondary conduit and conductors from pad
mounted transformers for routing into the buildings and terminating at the main
switchboards.

 

The main switchboards shall be located within the main electrical rooms and
shall contain a single PG&E meter for monitoring overall power consumption.

 

Office Building

Buildings utilization voltage will be 277/480 volt, 3-phase, 4-wire with
ampacity as required to accommodate square footages and loads.

 

·      Office Buildings 9, 10: Service will be sized based on the following:

·    Lighting: 1.0w/sqft

·    Plugs: 4.0w/sqft

·    IDF Rooms: 0.5 w/sqft

·    Mechanical: 5.0 w/sqft

·    Elevators: 1.0w/sqft

·    Misc. Spare: 4.3 w/sqft

·    Total for Building: 15.0w/sqft

 

Electrical service sizes of each Office Building are as follows:

·      Building 9: 2,500amp

·      Building 10: 2,500 amp

 

Distribution within the Buildings will mainly consist of a busway riser from
ground floor to the top floor of Building. Busway shall be sized for the
lighting, plugs, miscellaneous, roof mechanical, and elevator equipment loads.

 

Panelboards and transformers for tenant lighting, and plugs loads shall be
furnished and installed as part of Tenant Improvements.

 

Distribution for all mechanical and elevator equipment shall be included as part
of the Building Core & Shell.

 

A house and site load 277/480 volt panelboard, step-down transformer, and
120/208 volt panelboard shall be provided as part of the Building Core & Shell
for common loads.

 

Telecommunication System

·                  Service entrance from the telecommunication companies shall
consist of four (4)4” underground conduits, one from AT&T, one from Comcast, one
combined for other service provider’s and one spare. Conduits shall be routed
from site service provider’s infrastructure to the MPOE room at the ground level
of the Building.

 

·                  Additionally, there shall be another two (2) 4” conduits
provided from the MPOE out to a site wide building interconnect infrastructure.

 

·                  Telecommunication rooms shall be provided stacked on each of
the upper floors of the building, level 2 and up, with 4” conduit sleeves
through the floor to interconnect with each other. Six (6) 4” conduits shall be
routed from the 2nd floor telecommunication room to the MPOE room, if they are
not stacked.

 

·      Provide a telecom grounding system riser between all these rooms.

 

 

 

Pathline Park: Outline Specifications – Shell Building Improvements

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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October 1, 2018

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Electrical System:

 

Parking Structure

 

Buildings utilization voltage will be 277/480 volt, 3-phase, 4-wire with
ampacity as required to accommodate square footages and loads.

 

Loads shall be based on the following:

·    Lighting: 0.5w/sqft

·    Plugs: 0.3w/sqft

·    Mechanical: 0.7w/sqft

·    Elevators: 0.2w/sqft

·    Total for Building: 1.7w/sqft

 

Electrical service size of the Parking Structure is 1,200 amp.

 

The PG&E service transformer will be from an underground distribution vault
known as a UCD. The UCD vault can house up to a 1000kva in-ground vault style
transformer, which would max out at a 1200amp, 277/480volt, 3-phase, 4-wire
service. The secondary service entrance conductors will be installed under the
core & shell construction, from the transformer vault to the main switchboard.

 

The main switchboard will be 1200amp, 277/480volt, 3-phase, 4-wire and shall
serve all building loads.

 

Distribution within the Building will consist of a feeder to the roof for
elevator equipment loads, and 277/480volt panelboard, step-down transformer, and
120/208 volt panelboard for building lighting and plug loads on every other
floor.

 

Telecommunication System

 

Service entrance from the telecommunication companies shall consist of one
(1) 4” underground conduit from AT&T. Conduits shall be routed from site service
provider infrastructure to the main electrical room at the ground level of the
building. Additionally, there shall be one (1) 4” conduits provided from the
main electrical room out to a site wide building interconnect infrastructure.

 

 

 

Pathline Park: Outline Specifications – Shell Building Improvements

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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October 1, 2018

Page 15

 

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Fire Alarm:

 

The fire alarm system shall be a microprocessor-based direct wired,
multi-priority, peer-to-peer networked system. The system shall utilize
independently addressed, microprocessor-based smoke detectors, heat detectors,
and other monitoring modules. It shall be complete with all necessary hardware,
software and memory specifically tailored for this installation. It shall be
possible to permanently modify the software on site by using a plug-in
programmer.

 

It shall be 24Vdc closed circuit, electronically supervised, common signaling,
device indicating, and automatic alarm type. The system shall include all
wiring, raceways, pullboxes, terminal cabinets, outlet and mounting boxes,
control equipment, alarm and supervisory signal initiating devices, alarm
notification appliances and all other accessories required for a complete
operating system.

 

Upon alarm activation of any area smoke detector, duct smoke detector, heat
detector, manual pull station, sprinkler waterflow, etc., the following
functions shall automatically occur:

 

·             The internal audible device shall sound at the control panel and
annunciator.

·             The LCD Display shall indicate all applicable information
associated with the alarm condition including zone, device type, device location
and time/date.

·             All system activity/events shall be documented on the system
printer.

·             Any remote or local annunciator LCD / LED’s associated with the
alarm zone shall be illuminated.

·             The following notification signals and actions shall occur
simultaneously:

·             Horns shall sound throughout the Building.

·             Activate visual strobes throughout the Building.

·             Transmit signal to the central station with point identification.

·             All self-closing fire/smoke doors held open shall be released.

·             All automatic events programmed to the alarm point shall be
executed and the associated outputs activated.

 

Elevator Lobby/ Equipment Room Detectors:

Upon alarm activation of any elevator lobby smoke detector or equipment/control
room detectors, the following functions shall automatically occur:

 

·             Perform general alarm sequence above.

·             Activation of elevator lobby smoke detectors (other than primary
floor) shall recall the elevators to primary floor.

·             Activation of elevator lobby smoke detectors located on the
primary recall floor shall recall the elevator the alternate floor.

·             Activation of equipment/control room smoke detectors shall recall
the elevator to the primary floor.

·             Activation of the equipment room heat detector shall initiate the
shunt-trip of service power to the associated elevator equipment.

 

Interface and provide fan shutdown control for all supply fans over 2,000 cfm.

 

Interface and provide fire / smoke damper (FSD) control and monitoring.

 

 

 

Pathline Park: Outline Specifications – Shell Building Improvements

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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October 1, 2018

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APPLICABLE CODES:

 

Codes:

 

2016 California Building Code (with City of Sunnyvale amendments)

2016 California Plumbing Code

2016 California Mechanical Code

2016 California Electrical Code

2016 California Fire Code

2016 California Green Building Standards Code

Current Edition Building Energy Efficiency Standards for Residential &
Nonresidential Buildings

Current Edition Americans with Disabilities Act — Accessibilities Guidelines
(ADAAG)

Current Edition - NFPA

Current Edition - Title 24

Current Edition - Code of Regulations, Title 8. Industrial Relations -
Subchapter 7. General Industry Safety Orders

 

Code Analysis:

 

Occupancy:

Group B

Construction:

Type II-B

 

Fully-Sprinklered

 

Fire Resistive Requirements:

 

3-Story Office Building

 

Structural Frame:

Non-rated

Roof:

Non-rated

Floors:

Non-rated

Shafts:

1-hour

Permanent Partitions:

Non-rated

 

End of Applicable Codes

 

 

 

Pathline Park: Outline Specifications – Codes

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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October 1, 2018

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PROJECT DEVELOPMENT TEAM:

 

Developer:

 

IRVINE COMPANY

5451 Great America Parkway, Suite 201

Santa Clara, CA 95054

 

Leasing:

 

IRVINE COMPANY OFFICE PROPERTIES

5451 Great America Parkway, Suite 201

Santa Clara, CA 95054

 

Design / Executive Architect:

 

ARQUITECTONICA

818 W 7TH Street, Suite 800

Los Angeles, CA 90017

 

Associate Architect:

 

LPA, INC.

5161 California Avenue, Suite 100

Irvine, CA 92617

 

Parking Structure Architect:

 

WATRY DESIGN

100 Century Center Court, Suite 600

San Jose, CA 95112

 

Structural Engineer:

 

NISHKIAN MENNINGER

600 Harrison Street, Suite 110

San Francisco, CA 94107

 

Landscape Architect:

 

OJB

550 Lomas Santa Fe Drive, Suite A

Solana Beach, CA 92075

 

Civil Engineer:

 

KIER & WRIGHT

3350 Scott Boulevard, Building 22

Santa Clara, CA 95054

 

Dry Utility:

 

RGA DESIGN

6400 Village Parkway, Suite 204

Dublin, CA 94568

 

Mechanical/Plumbing Engineer:

 

TAYLOR ENGINEERING

1080 Marina Village Parkway, Suite 501

Alameda, CA 94501

 

Electrical Engineer:

 

THE ENGINEERING ENTERPRISE

1305 Marina Village Parkway

Alameda, CA 94501

 

Environmental Graphics / Signage:

 

RSM DESIGN

160 Avenida Cabrillos

San Clemente, CA 92672

 

 

 

Pathline Park: Outline Specifications – Project Team

The specifications set forth in this document are subject to modification from
time to time as determined to be necessary or appropriate by Irvine Company.
Shell building improvements are to be provided by Irvine Company during the
shell building improvement phase, unless noted otherwise. Any Tenant changes
will be at Tenant’s cost and responsibility, and will be subject to Irvine
Company approval.

 

 

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October 1, 2018

Page 18

 

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SCHEDULE 2 TO EXHIBIT X

EARLY DELIVERY CONDITION

 

Each Building shall be in “Early Delivery Condition” following the completion on
each and every floor of the following portions of the Base, Shell and Core of
such Building:

 

1.      Structural concrete.

 

2.      Unfinished interior core and shaft construction.

 

3.      Temporary, non-occupancy fire sprinkler risers and distribution

 

4.      Building stairs

 

5.      Connection points for MEP.

 

6.      An appropriately sized and located mobilization area for Tenant’s
trailers and materials

 

Early Delivery Condition shall also provide for the following:

 

·                                          Construction of the Tenant
Improvements by Tenant to be permitted and implemented without State
certification of elevators, which State certification shall occur at completion
of the construction of the Tenant Improvements by Tenant and Project site work.

 

·                                          Does not require Site Work to be
complete, which shall occur prior to the issuance of a certificate of occupancy
(or its legal equivalent) for the Premises.

 

·                                          Does not require fire & life safety
systems to be completed, which shall occur prior to the issuance of a
certificate of occupancy (or its legal equivalent) for the Premises.

 

·                                          Base, Shell and Core shall be in a
condition consistent with the Core and Shell portions only of the outline
specifications as provided in Schedule 1 and which will allow the City of
Sunnyvale to issue the Permits and allows Tenant to commence construction of the
Tenant Improvements by the Base Building Contractor in its capacity as Tenant’s
Contractor and thereafter pursue to substantial completion of the Tenant
Improvements.

 

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

 

SCHEDULE 3 TO EXHIBIT X

DELIVERY CONDITION

 

Each Building shall be in “Delivery Condition” following the completion on each
and every floor of the following portions of the Base, Shell and Core of such
Building:

 

1.      Structural concrete.

 

2.      Finished interior core elements, including restrooms.

 

3.      Temporary, non-occupancy fire sprinkler risers and distribution.

 

4.      Building stairs.

 

5.      Floors in broom-swept condition (except for curtainwall units that will
be left on floor until the hoists are removed and the hoist bays completed)

 

6.      Power to support construction activities related to the Tenant
Improvements.

 

7.      Construction elevator, if requested by Tenant.

 

8.      Connection points for MEP.

 

9.      An appropriately sized and located mobilization area for Tenant’s
trailers and materials.

 

Delivery Condition shall also provide for the following.

 

·                                          Construction of the Tenant
Improvements by Tenant to be permitted and implemented without State
certification of elevators, which State certification shall occur at completion
of the construction of the Tenant Improvements by Tenant and Project site work.

 

·                                          Does not require Site Work to be
complete, which shall occur prior to the issuance of a certificate of occupancy
(or its legal equivalent) for the Premises.

 

·                                          Does not require fire & life safety
systems to be completed, which shall occur prior to the issuance of a
certificate of occupancy (or its legal equivalent) for the Premises.

 

·                                          Base, Shell and Core shall be in a
condition consistent with the Core and Shell portions only of the outline
specifications as provided in Schedule 1 and which will allow the City of
Sunnyvale to issue the Permits and allows Tenant to commence construction of the
Tenant Improvements and thereafter pursue to substantial completion of the
Tenant Improvements.

 

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SCHEDULE 4 TO EXHIBIT X

 

The supervisory and coordination fee charged by Landlord includes the following
scope of services for Tenant Construct/Consent to Alterations projects:

 

Space planning:

 

·      Periodic attendance at Space Planning Meetings with Architect and
Customer as requested

·      Provide Tenant’s architect with building standards, CAD standards, and
other resources needed

·      Assist with reviewing space plans for consistency with building standards

 

Pricing Plans

 

·      Coordinate Landlord’s review and approval of the preliminary pricing
plans

·      Coordinate with Leasing Director and provide feedback on restoration
requirements

 

Construction Documents

 

·                 Coordinate Landlord’s review and approval of the construction
documents for compliance with Irvine Company standards and lease terms

·      Coordinate the architectural/engineering peer review of the construction
documents

·      Finalize any restoration requirements with Leasing Director

·      Coordinate Landlord’s qualification/approval of general contractor

 

Construction Administration

 

·      Attend construction kick off meeting

·      Attendance at weekly construction meetings.

·      Coordinate with Operations Manager for building requirements, insurance,
and other tenant issues

·      Coordinate general contractor issues: building access, building rules &
regulations, parking, etc.

·      Periodic review of work in progress

·      Review any changes to scope of work and coordinate Landlord approval

·      Review completed work and participate in punch walk

 

Closeout\Turnover

 

·                  Follow up to ensure the prescribed close out package
requirements have been met at the end of the project.  Update plan room document
and store as-built, permit documents. Transmit final information to Operations
Manager

·                  Review and process tenant reimbursement of TI allowance and
complete a financial reconciliation (tenant construct project only)

 

Other requirements:

 

·                  Construction Accounting; Review and approval of reimbursement
applications.  Maintain project accounting records.  Process tenant
reimbursement of TI allowance

·                  Record Retention: retain and store all project records
including permit drawings, as-builts, contracts, correspondence, etc.

 

If the Base Building Contractor is also the Tenant’s Contractor, the supervisory
and coordination fee charged by Landlord shall also include the following
additional services:

 

1.              Tenant Requested Modifications to Shell/Core

·                  Manage Tenant requests to modify Landlord approved changes to
Shell construction documents.

·                  Manage the process of engaging the Shell design team to
deliver approved changes for Contractor costing, City permit processing and
construction implementation.

 

2.              Coordination between Shell Contractor and TI Contractor

·                  Manage the coordination of Shell contractor and TI contractor
during the entire Early Delivery TI construction period. Organize and manage
weekly OAC’s between Tenant, Tenant Contractor, Landlord and Landlord’s Shell
contractor.

 

3.              Assistance with City Permit Processing

·                  Provide assistance as required with City Planning and
Building Department Plan Check and Permit approvals

 

4.              Project Accounting

·                  Provide Tenant Requested Pricing (TRP) relating to Tenant
requested changes to Shell construction.

·                  Initiate the billing and payments for the Landlord
Contribution at the onset of Early Delivery Condition.

 

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EXHIBIT Y

 

PROJECT DESCRIPTION

 

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