EXHIBIT 10.17
RIVERPARK TOWER
OFFICE LEASE
LEGACY PARTNERS I RIVERPARK I, LLC,
a Delaware limited liability company
as Landlord,
and
PDF SOLUTIONS, INC.,
a Delaware corporation
as Tenant

 

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SUMMARY OF BASIC LEASE INFORMATION
  IV
 
       
OFFICE LEASE
       
 
       
ARTICLE 1 REAL PROPERTY, BUILDING AND PREMISES
    1  
ARTICLE 2 LEASE TERM
    2  
ARTICLE 3 BASE RENT
    2  
ARTICLE 4 ADDITIONAL RENT
    2  
ARTICLE 5 USE OF PREMISES
    7  
ARTICLE 6 SERVICES AND UTILITIES
    7  
ARTICLE 7 REPAIRS
    8  
ARTICLE 8 ADDITIONS AND ALTERATIONS
    8  
ARTICLE 9 COVENANT AGAINST LIENS
    10  
ARTICLE 10 INDEMNIFICATION AND INSURANCE
    10  
ARTICLE 11 DAMAGE AND DESTRUCTION
    11  
ARTICLE 12 CONDEMNATION
    12  
ARTICLE 13 COVENANT OF QUIET ENJOYMENT
    13  
ARTICLE 14 ASSIGNMENT AND SUBLETTING
    13  
ARTICLE 15 SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES
    15  
ARTICLE 16 HOLDING OVER
    15  
ARTICLE 17 ESTOPPEL CERTIFICATES
    15  
ARTICLE 18 SUBORDINATION
    15  
ARTICLE 19 TENANT’S DEFAULTS; LANDLORD’S REMEDIES
    16  
ARTICLE 20 SECURITY DEPOSIT
    17  
ARTICLE 21 COMPLIANCE WITH LAW
    18  
ARTICLE 22 ENTRY BY LANDLORD
    18  
ARTICLE 23 TENANT PARKING
    18  
ARTICLE 24 MISCELLANEOUS PROVISIONS
    19  
EXHIBITS
       

      A  
OUTLINE OF PREMISES
   
 
A-1  
SITE PLAN OF REAL PROPERTY
   
 
B  
TENANT WORK LETTER
   
 
C  
(Intentionally Omitted)
   
 
D  
RULES AND REGULATIONS
   
 
E  
SUPPLEMENTAL HVAC EQUIPMENT

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INDEX

      Additional Rent   2 Alterations   8 Approved Working Drawings   Exhibit B
Architect   Exhibit B Base Rent   2 Base, Shell and Core   Exhibit B BOMA   2
Brokers   21 Calendar Year   3 Construction   21 Construction Drawings  
Exhibit B Contract   Exhibit B Contractor   Exhibit B Cost Pools   3 Engineers  
Exhibit B Estimate   5 Estimate Statement   5 Estimated Excess   5 Excess   5
Excluded Changes   18 Expense Base Year   3 Expense Year   3 Final Costs  
Exhibit B Final Costs Statement   Exhibit B Final Retention   Exhibit B Final
Space Plan   Exhibit B Final Working Drawings   Exhibit B Force Majeure   20
Hazardous Material   7 Holidays   7 Interest Rate   6 Landlord   1 Landlord
Parties   10 Lease   1 Lease Commencement Date   2 Lease Expiration Date   2
Lease Term   2 Lease Year   2 Notices   20 Operating Expenses   3 Other
Buildings   6 Over-Allowance Amount   Exhibit B Over-Allowance Cap   Exhibit B
Parking Facilities   1 Premises   1 Project   1 Proposition 13   4 Real Property
  1 Reimbursement Cap   9 rent   16 Rent   2 rentable square feet   2
Specifications   Exhibit B Statement   5 Subject Space   13 Subleasing Costs  
14 Summary   i Systems and Equipment   4 Tax Expense Base Year   4 Tax Expenses
  4 Tenant   1 Tenant Improvement Allowance   Exhibit B Tenant Improvement
Allowance Items   Exhibit B Tenant Improvements   Exhibit B Tenant Work Letter  
Exhibit B Tenant’s Agents   Exhibit B Tenant’s Share   5 Transfer   14 Transfer
Notice   13 Transfer Premium   14 Transfers   13 Utilities Base Year   5

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 Utilities Costs   5 Wi-Fi Network   9

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

      TERMS OF LEASE     (References are to the Office Lease)   DESCRIPTION
1. Date:
  June 29, 2007
 
   
2. Landlord:
  LEGACY PARTNERS I RIVERPARK I, LLC,
 
  a Delaware limited liability company
 
   
3. Address of Landlord (Section 24.19):
  Legacy Partners I Riverpark I, LLC
 
  c/o Legacy Partners Commercial, Inc.
 
  4000 East Third Avenue, Suite 600
 
  Foster City, California 94404-4805
 
  Attention: Regional Vice President
 
   
4. Tenant:
  PDF SOLUTIONS, INC., a Delaware corporation
 
   
5. Address of Tenant (Section 24.19):
  PDF Solutions, Inc.
 
  333 West San Carlos Street, Suite 700
 
  San Jose, California 95110
 
  Attention: Chief Financial Officer
 
   
6. Premises (Article 1):
   
 
   
6.1 Premises:
  A total of 49,789 rentable square feet of space consisting of the following,
which are more particularly set forth in Exhibit A attached hereto:
 
   
 
       (i) 19,670 rentable square feet of space located on the fifth (5th) floor
of the Building (as defined below) and designated as Suite 500;
 
   
 
       (ii) 19,670 rentable square feet of space located on the seventh (7th)
floor of the Building and designated as Suite 700;
 
   
 
       (iii) 8,948 rentable square feet of space located on the tenth (10th)
floor of the Building and designated as Suite 1000; and
 
   
 
       (iv) 1,501 rentable square feet of space located on the tenth (10th)
floor of the Building and designated as Suite 1080.
 
   
6.2 Building:
  The Premises are located in the building whose address is 333 West San Carlos
Street, San Jose, California.
 
   
7. Term (Article 2):
   
 
   
7.1 Lease Term:
  Sixty-eight (68) months.
 
   
7.2 Lease Commencement Date:
  February 1, 2008.
 
   
7.3 Lease Expiration Date:
  The last day of the sixty-eighth (68th) month following the Lease Commencement
Date.
 
   
8. Base Rent (Article 3):
   

                                      Monthly     Monthly Rental       Annual  
  Installment     Rate per Rentable   Months   Base Rent     of Base Rent    
Square Foot  
1* - 20
  $ 1,762,530.60     $ 146,877.55     $ 2.95  
21 - 32
  $ 1,816,302.70     $ 151,358.56     $ 3.04  
33 - 44
  $ 1,870,074.80     $ 155,839.57     $ 3.13  
45 - 56
  $ 1,923,846.90     $ 160,320.58     $ 3.22  

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      TERMS OF LEASE     (References are to the Office Lease)   DESCRIPTION

                                      Monthly     Monthly Rental       Annual  
  Installment     Rate per Rentable   Months   Base Rent     of Base Rent    
Square Foot  
57 - 68
  $ 1,983.593.70     $ 165,299.48     $ 3.32  

 

*   Base Rent for the first (1st) eight (8) months of the initial Lease Term
shall be abated, pursuant to the terms of Article 3 of the Lease.

     
9. Additional Rent (Article 4):
   
 
   
9.1 Expense Base Year:
  Calendar year 2008.
 
   
9.2 Tax Expense Base Year:
  Calendar year 2008.
 
   
9.3 Utilities Base Year:
  Calendar year 2008.
 
   
9.4 Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs:
  16.93% (49,789 rentable square feet within the Premises/294,097 rentable
square feet within the Building).
 
   
10. Security Deposit (Article 20):
  $166,391.96, pursuant to the terms of Article 20 of the Lease.
 
   
11. Parking (Article 23):
  Initially, three (3) parking passes for unassigned parking spaces for every
1,000 rentable square feet of the Premises, for a total of one hundred
forty-nine (49) unassigned parking passes; provided, however, upon written
notice to Tenant, Tenant's parking passes hereunder shall be reduced to 2.4
parking passes for unassigned parking spaces for every 1,000 rentable square
feet of the Premises, for a total of one hundred nineteen (119) parking passes
for unassigned parking spaces. Landlord will deliver notice of this reduction in
Tenant's parking passes as necessary to comply with applicable regulations
relating to available parking for the Building, including in connection with the
anticipated completion of an adjacent office building.
 
   
12. Brokers (Section 24.25):
  None.
 
   
13. Tenant Improvement Allowance (Exhibit B):
  $248,945.00 (calculated at the rate of $5.00 per rentable square foot of the
Premises), pursuant to the terms of Exhibit B.

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OFFICE LEASE
     This Office Lease, which includes the preceding Summary and the exhibits
attached hereto and incorporated herein by this reference (the Office Lease, the
Summary and the exhibits to be known sometimes collectively hereafter as the
“Lease”), dated as of the date set forth in Section 1 of the Summary, is made by
and between LEGACY PARTNERS I RIVERPARK I, LLC, a Delaware limited liability
company (“Landlord”), and PDF SOLUTIONS, INC., a Delaware corporation
(“Tenant”).
ARTICLE 1
REAL PROPERTY, BUILDING AND PREMISES
     1.1 Real Property, Building and Premises.
          1.1.1 Premises. Upon and subject to the terms, covenants and
conditions hereinafter set forth in this Lease, Landlord hereby leases to Tenant
and Tenant hereby leases from Landlord the premises set forth in Section 6.1 of
the Summary (the “Premises”), which Premises are located in the Building defined
in Section 6.2 of the Summary constructed on the Real Property. The outline of
the floor plan of the Premises is set forth in Exhibit A attached hereto.
          1.1.2 Building and Real Property/Project. The Building is part of that
certain office building project (“Project”) constructed on the Real Property (as
defined below) known as “RiverPark Tower”. The term “Real Property,” as used in
this Lease, shall mean, collectively, (i) the Building, (ii) any outside plaza
areas, walkways, driveways, courtyards, public and private streets,
transportation facilitation areas and other improvements and facilities now or
hereafter constructed surrounding and/or servicing the Building, including the
existing parking structure constructed by or for Landlord within the Project and
located adjacent to the Building and any other parking structures and/or
facilities now or hereafter constructed by or for Landlord within the Project
and servicing the Building and any other buildings which may be subsequently
constructed within the Project (collectively, the “Parking Facilities”), which
are designated from time to time by Landlord as common areas (or parking
facilities, as the case may be) appurtenant to or servicing the Building and any
such other buildings; (iii) any additional buildings, improvements, facilities,
parking areas and structures and common areas which Landlord (and/or any common
area association formed by Landlord or Landlord’s assignee for the Project) may
add thereto from time to time within or as part of the Project; and (iv) the
land upon which any of the foregoing are situated. The site plan depicting the
current configuration of the Real Property is set forth in Exhibit A-1 attached
hereto. Notwithstanding the foregoing or anything contained in this Lease to the
contrary, (1) Landlord has no obligation to expand or otherwise make any
improvements within the Project, including, without limitation, any of the
outside plaza areas, walkways, driveways, courtyards, public and private
streets, transportation facilitation areas and other improvements and facilities
which may be depicted on Exhibit A-1 attached hereto (as the same may be
modified by Landlord from time to time without notice to Tenant), other than
Landlord’s obligations (if any) specifically set forth in the Tenant Work
Letter, and (2) Landlord shall have the right from time to time to include or
exclude any improvements or facilities within the Project, at Landlord’s sole
election, as more particularly set forth in Section 1.1.3 below.
          1.1.3 Tenant’s and Landlord’s Rights. Tenant is hereby granted the
right to the nonexclusive use of the common corridors and hallways, stairwells,
elevators, restrooms and other public or common areas located within the
Building, and the non-exclusive use of the areas located on the Real Property
designated by Landlord from time to time as common areas for the Building;
provided, however, that (i) Tenant’s use thereof shall be subject to (A) the
provisions of any covenants, conditions and restrictions regarding the use
thereof now or hereafter recorded against the Real Property, and (B) such
reasonable, non-discriminatory rules, regulations and restrictions as Landlord
may make from time to time (which shall be provided in writing to Tenant), and
(ii) Tenant may not go on the roof of Building without Landlord’s prior consent
(which may be withheld in Landlord’s sole and absolute discretion) and without
otherwise being accompanied by a representative of Landlord. Landlord reserves
the right from time to time to use any of the common areas of the Real Property,
and the roof, risers and conduits of the Building for telecommunications and/or
any other purposes, and to do any of the following: (1) make any changes,
additions, improvements, repairs and/or replacements in or to the Real Property
or any portion or elements thereof, including, without limitation, (x) changes
in the location, size, shape and number of driveways, entrances, loading and
unloading areas, ingress, egress, direction of traffic, landscaped areas,
walkways, public and private streets, plazas, courtyards, transportation
facilitation areas and common areas, parking spaces, parking structures and
parking areas, and (y) expanding or decreasing the size of the Real Property and
any common areas and other elements thereof, including adding or deleting
buildings thereon and therefrom; (2) close temporarily any of the common areas
while engaged in making repairs, improvements or alterations to the Real
Property; (3) form a common area association or associations under covenants,
conditions and restrictions to own, manage, operate, maintain, repair and/or
replace all or any portion of the landscaping, driveways, walkways, parking
areas, public and private streets, plazas, courtyards, transportation
facilitation areas and/or other common areas located outside of the Building
and, subject to Article 4 below, include the common area assessments, fees and
taxes charged by the association(s) and the cost of maintaining, managing,
administering and operating the association(s), in Operating Expenses or Tax
Expenses; and (4) perform such other acts and make such other changes with
respect to the Real Property as Landlord may, in the exercise of good faith
business judgment, deem to be appropriate.
     1.2 Condition of Premises. Except as expressly set forth in this Lease and
in the Tenant Work Letter attached hereto as Exhibit B, Landlord shall not be
obligated to provide or pay for any improvement, remodeling or refurbishment
work or services related to the improvement, remodeling or refurbishment of the
Premises, and Tenant shall accept the Premises in its “AS IS” condition on the
Lease Commencement Date.

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     1.3 Rentable Square Feet. The rentable square feet for the Premises are
approximately as set forth in Section 6.1 of the Summary. For purposes hereof,
the “rentable square feet” of the Premises and the Building shall be calculated
by Landlord pursuant to the Standard Method for Measuring Floor Area in Office
Buildings, ANSI Z65.1-1996 (“BOMA”), as modified for the Building pursuant to
Landlord’s standard rentable area measurements for the Building, to include,
among other calculations, a portion of the common areas and service areas of the
Building. The rentable square feet of the Premises and the rentable square feet
of the Building are subject to verification from time to time by Landlord’s
planner/designer and such verification shall be made in accordance with the
provisions of this Section 1.3. Tenant’s architect may consult with Landlord’s
planner/designer regarding such verification, except to the extent it relates to
the rentable square feet of the Building; provided, however, the determination
of Landlord’s planner/designer shall be conclusive and binding upon the parties.
In the event that Landlord’s planner/designer determines that the rentable
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 rentable square feet (including, without limitation,
the amount of the Base Rent and Tenant’s Share) shall be modified in accordance
with such determination. If such determination is made, it will be confirmed in
writing by Landlord to Tenant.
ARTICLE 2
LEASE TERM
     The terms and provisions of this Lease shall be effective as of the date of
this Lease except for the provisions of this Lease relating to the payment of
Rent. The term of this Lease (the "Lease Term”) shall be as set forth in
Section 7.1 of the Summary and shall commence on the date (the “Lease
Commencement Date”) set forth in Section 7.2 of the Summary (subject, however,
to the terms of the Tenant Work Letter), and shall terminate on the date (the
“Lease Expiration Date”) set forth in Section 7.3 of the Summary, unless this
Lease is sooner terminated as hereinafter provided. For purposes of this Lease,
the term “Lease Year” shall mean each consecutive twelve (12) month period
during the Lease Term, provided that the last Lease Year shall end on the Lease
Expiration Date.
ARTICLE 3
BASE RENT
     3.1 Base Rent. Tenant shall pay, without notice or demand, to Landlord or
Landlord’s agent at the management office of the Project, or at such other place
as Landlord may from time to time designate in writing, in currency or a check
for currency which, at the time of payment, is legal tender for private or
public debts in the United States of America, base rent (“Base Rent”) as set
forth in Section 8 of the Summary, payable in equal monthly installments as set
forth in Section 8 of the Summary in advance on or before the first day of each
and every month during the Lease Term, without any setoff or deduction
whatsoever. The Base Rent for the first full month of the Lease Term shall be
paid at the time of Tenant’s execution of this Lease. If any rental payment date
(including the Lease Commencement Date) falls on a day of the month other than
the first day of such month or if any rental payment is for a period which is
shorter than one month, then the rental for any such fractional month shall be a
proportionate amount of a full calendar month’s rental based on the proportion
that the number of days in such fractional month bears to the number of days in
the calendar month during which such fractional month occurs. All other payments
or adjustments required to be made under the terms of this Lease that require
proration on a time basis shall be prorated on the same basis.
     3.2 Rent Abatement. Notwithstanding anything to the contrary contained
herein and provided that Tenant faithfully performs all of the terms and
conditions of this Lease, and no default by Tenant occurs hereunder, Landlord
hereby agrees that Tenant shall not be required to pay monthly Base Rent for the
first (1st) eight (8) months of the initial Lease Term (the “Abatement Period”).
During the Abatement Period, Tenant shall still be responsible for the payment
of all of its other monetary obligations under this Lease. In the event of a
default by Tenant under the terms of this Lease that results in termination of
this Lease in accordance with the provisions of Article 19 hereof, then as a
part of the recovery set forth in Article 19 of this Lease, Landlord shall be
entitled to the recovery of the monthly Base Rent that was abated under the
provisions of this Article 3.
ARTICLE 4
ADDITIONAL RENT
     4.1 Additional Rent. In addition to paying the Base Rent specified in
Article 3 of this Lease, Tenant shall pay as additional rent the sum of the
following: (i) Tenant’s Share (as such term is defined below) of the annual
Operating Expenses allocated to the Building (pursuant to Section 4.3.4 below)
which are in excess of the amount of Operating Expenses allocated to the
Building and applicable to the Expense Base Year; plus (ii) Tenant’s Share of
the annual Tax Expenses allocated to the Building (pursuant to Section 4.3.4
below) which are in excess of the amount of Tax Expenses allocated to the
Building and applicable to the Tax Expense Base Year; plus (iii) Tenant’s Share
of the annual Utilities Costs allocated to the Building (pursuant to
Section 4.3.4 below) which are in excess of the amount of Utilities Costs
allocated to the Building and applicable to the Utilities Base Year. Such
additional rent, together with any and all other amounts payable by Tenant to
Landlord pursuant to the terms of this Lease (including, without limitation,
pursuant to Article 6), shall be hereinafter collectively referred to as the
“Additional Rent.” The Base Rent and Additional Rent are herein collectively
referred to as the “Rent.” All amounts due under this Article 4 as Additional
Rent shall be payable for the same periods and in the same manner, time and
place as the Base Rent. Without limitation on other obligations of Tenant which
shall survive the expiration of the Lease Term, the obligations of Tenant to pay
the Additional Rent provided for in this Article 4 shall survive the expiration
of the

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Lease Term for a period of three (3) years, but in no event shall Tenant be
obligated to pay Additional Rent for periods other than during the Lease Term.
     4.2 Definitions. As used in this Article 4, the following terms shall have
the meanings hereinafter set forth:
          4.2.1 “Calendar Year” shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.
          4.2.2 “Expense Base Year” shall mean the year set forth in Section 9.1
of the Summary.
          4.2.3 “Expense Year” shall mean each Calendar Year, provided that
Landlord, upon notice to Tenant, may change the Expense Year from time to time
to any other twelve (12) consecutive-month period, and, in the event of any such
change, Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs
shall be equitably adjusted for any Expense Year involved in any such change.
          4.2.4 “Operating Expenses” shall mean all expenses, costs and amounts
of every kind and nature which Landlord shall pay during any Expense Year
because of or in connection with the ownership, management, maintenance, repair,
replacement, restoration or operation of the Real Property, including, without
limitation, any amounts paid for: (i) the cost of operating, maintaining,
repairing, renovating and managing the utility systems, mechanical systems,
sanitary and storm drainage systems, any elevator systems and all other “Systems
and Equipment” (as defined in Section 4.2.5 of this Lease), and the cost of
supplies and equipment and maintenance and service contracts in connection
therewith; (ii) the cost of licenses, certificates, permits and inspections, and
the cost of contesting the validity or applicability of any governmental
enactments which may affect Operating Expenses, and the costs incurred in
connection with implementation and operation (by Landlord or any common area
association(s) formed for the Project) of any transportation system management
program or similar program; (iii) the cost of insurance carried by Landlord, in
such amounts as Landlord may reasonably determine or as may be required by any
mortgagees or the lessor of any underlying or ground lease affecting the Real
Property; (iv) the cost of landscaping, relamping, supplies, tools, equipment
and materials, and all fees, charges and other costs (including consulting fees,
legal fees and accounting fees) incurred in connection with the management,
operation, repair and maintenance of the Real Property; (v) the cost of parking
area repair, restoration, and maintenance; (vi) any equipment rental agreements
or management agreements (including the cost of any management fee and the fair
rental value of any office space provided thereunder); (vii) wages, salaries and
other compensation and benefits of all persons engaged in the operation,
management, maintenance or security of the Real Property, and employer’s Social
Security taxes, unemployment taxes or insurance, and any other taxes which may
be levied on such wages, salaries, compensation and benefits; (viii) payments
under any easement, license, operating agreement, declaration, restrictive
covenant, underlying or ground lease (excluding rent), or instrument pertaining
to the sharing of costs by the Real Property; (ix) the cost of janitorial
service, alarm and security service, if any, window cleaning, trash removal,
replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies,
corridors, restrooms and other common or public areas or facilities, maintenance
and replacement of curbs and walkways, repair to roofs and re-roofing;
(x) amortization (including interest on the unamortized cost) of the cost of
acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Real Property; and (xi) the cost of any capital
improvements or other costs (I) which are intended as a labor-saving device or
to effect other economies in the operation or maintenance of the Real Property,
(II) made to the Real Property or any portion thereof after the Lease
Commencement Date that are required under any governmental law or regulation, or
(III) which are reasonably determined by Landlord to be in the best interests of
the Real Property; provided, however, that if any such cost described in (I),
(II) or (III) above, is a capital expenditure, such cost shall be amortized
(including interest on the unamortized cost) over its useful life as Landlord
shall reasonably determine. If Landlord is not furnishing any particular work or
service (the cost of which, if performed by Landlord, would be included in
Operating Expenses) to a tenant who has undertaken to perform such work or
service in lieu of the performance thereof by Landlord, Operating Expenses shall
be deemed to be increased by an amount equal to the additional Operating
Expenses which would reasonably have been incurred during such period by
Landlord if it had at its own expense furnished such work or service to such
tenant. If the Building (and during the period of time when any other office
buildings are fully constructed and ready for occupancy and are included by
Landlord within the Project) is less than ninety-five percent (95%) occupied
during all or a portion of any Expense Year (including the Expense Base Year),
Landlord shall make an appropriate adjustment to the variable components of
Operating Expenses for such year or applicable portion thereof, employing sound
accounting and management principles, to determine the amount of Operating
Expenses that would have been paid had the Building (and during the period of
time when any other office buildings are fully constructed and ready for
occupancy and are included by Landlord within the Project) been ninety-five
percent (95%) occupied; and the amount so determined shall be deemed to have
been the amount of Operating Expenses for such year, or applicable portion
thereof.
     Subject to the provisions of Section 4.3.4 below, Landlord shall have the
right, from time to time, to equitably allocate some or all of the Operating
Expenses (and/or Tax Expenses and Utilities Costs) among different tenants of
the Project and/or different buildings of the Real Property as and when such
different buildings are constructed and added to (and/or excluded from) the Real
Property or otherwise (the “Cost Pools”). Such Cost Pools may include, without
limitation, the office space tenants and retail space tenants of the Real
Property or of a building or buildings in the Real Property. Such Cost Pools may
also include an allocation of certain Operating Expenses (and/or Tax Expenses
and Utilities Costs) within or under covenants, conditions and restrictions
affecting the Real Property. In addition, Landlord shall have the right from
time to time, in its reasonable discretion, to include or exclude existing or
future buildings in the Project for purposes of determining Operating Expenses,
Tax Expenses and Utilities Costs and/or the provision of various services and
amenities thereto, including allocation of Operating Expenses, Tax Expenses and
Utilities Costs in any such Cost Pools. With reference to the foregoing, it is
acknowledged that expenses which are generally allocated throughout the Project,
shall be allocated to Tenant based

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upon Tenant’s equitable share of the Project. Such calculations and the fair and
equitable share allocated to Tenant will be subject to adjustment in accordance
with industry standards and to reflect the current occupancy and use of the
Project from time to time.
     Notwithstanding anything to the contrary set forth in this Article 4, when
calculating Operating Expenses for the Expense Base Year, Operating Expenses
shall exclude market-wide labor-rate increases due to extraordinary
circumstances, including, but not limited to, boycotts and strikes, and costs
relating to capital improvements or expenditures.
     Notwithstanding the foregoing, Operating Expenses shall not, however,
include: (A) costs of leasing commissions, attorneys’ fees and other costs and
expenses incurred in connection with negotiations or disputes with present or
prospective tenants or other occupants of the Real Property; (B) costs
(including permit, license and inspection costs) incurred in renovating or
otherwise improving, decorating or redecorating rentable space for other tenants
or vacant rentable space; (C) costs incurred due to the violation by Landlord of
the terms and conditions of any lease of space in the Real Property; (D) costs
of overhead or profit increment paid to Landlord or to subsidiaries or
affiliates of Landlord for services in or in connection with the Real Property
to the extent the same exceeds the costs of overhead and profit increment
included in the costs of such services which could be obtained from third
parties on a competitive basis; (E) except as otherwise specifically provided in
this Section 4.2.4, costs of interest on debt or amortization on any mortgages,
and rent payable under any ground lease of the Real Property; (F) Utilities
Costs; and (G) Tax Expenses.
          4.2.5 Systems and Equipment” shall mean any plant, machinery,
transformers, duct work, cable, wires, and other equipment, facilities, and
systems designed to supply heat, ventilation, air conditioning and humidity or
any other services or utilities, or comprising or serving as any component or
portion of the electrical, gas, steam, plumbing, sprinkler, communications,
alarm, security, or fire/life safety systems or equipment, or any other
mechanical, electrical, electronic, computer or other systems or equipment which
serve the Building and/or any other building in the Project in whole or in part.
          4.2.6 “Tax Expense Base Year” shall mean the year set forth in
Section 9.2 of the Summary.
          4.2.7 “Tax Expenses” shall mean all federal, state, county, or local
governmental or municipal taxes, fees, assessments, charges or other impositions
of every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit assessments, fees and taxes, child care subsidies, fees
and/or assessments, job training subsidies, fees and/or assessments, open space
fees and/or assessments, housing subsidies and/or housing fund fees or
assessments, public art fees and/or assessments, leasehold taxes or taxes based
upon the receipt of rent, including gross receipts or sales taxes applicable to
the receipt of rent, personal property taxes imposed upon the fixtures,
machinery, equipment, apparatus, systems and equipment, appurtenances, furniture
and other personal property used in connection with the Real Property), which
Landlord shall pay during any Expense Year because of or in connection with the
ownership, leasing and operation of the Real Property or Landlord’s interest
therein. For purposes of this Lease, Tax Expenses shall be calculated as if the
tenant improvements in the Building were fully constructed and the Real
Property, the Building and all tenant improvements in the Building were fully
assessed for real estate tax purposes.
               4.2.7.1 Tax Expenses shall include, without limitation:
                    (i) Any tax on Landlord’s rent, right to rent or other
income from the Real Property or as against Landlord’s business of leasing any
of the Real Property;
                    (ii) Any assessment, tax, fee, levy or charge in addition
to, or in substitution, partially or totally, of any assessment, tax, fee, levy
or charge previously included within the definition of real property tax, it
being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election (“Proposition 13”)
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants. It is the intention of
Tenant and Landlord that all such new and increased assessments, taxes, fees,
levies, and charges and all similar assessments, taxes, fees, levies and charges
be included within the definition of Tax Expenses for purposes of this Lease;
                    (iii) Any assessment, tax, fee, levy, or charge allocable to
or measured by the area of the Premises or the rent payable hereunder,
including, without limitation, any gross income tax upon or with respect to the
possession, leasing, operating, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or any portion thereof;
                    (iv) Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or transferring
an interest or an estate in the Premises; and
                    (v) Any reasonable expenses incurred by Landlord in
attempting to protest, reduce or minimize Tax Expenses.
               4.2.7.2 In no event shall Tax Expenses for any Expense Year be
less than the Tax Expenses for the Tax Expense Base Year.
               4.2.7.3 Notwithstanding anything to the contrary contained in
this Section 4.2.7, there shall be excluded from Tax Expenses (i) all excess
profits taxes, franchise taxes, gift taxes, capital stock taxes,

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inheritance and succession taxes, estate taxes, federal and state net income
taxes, and other taxes to the extent applicable to Landlord’s net income (as
opposed to rents, receipts or income attributable to operations at the Real
Property), (ii) any items included as Operating Expenses, and (iii) any items
paid by Tenant under Section 4.4 of this Lease.
          4.2.8 “Tenant’s Share” shall mean the percentage set forth in
Section 9.4 of the Summary. Tenant’s Share was calculated by dividing the number
of rentable square feet of the Premises by the total rentable square feet in the
Building (as set forth in Section 9.4 of the Summary), and stating such amount
as a percentage. Landlord shall have the right from time to time to redetermine
the rentable square feet of the Premises and/or Building, and Tenant’s Share
shall be appropriately adjusted to reflect any such redetermination. If Tenant’s
Share is adjusted pursuant to the foregoing, as to the Expense Year in which
such adjustment occurs, Tenant’s Share for such year shall be determined on the
basis of the number of days during such Expense Year that each such Tenant’s
Share was in effect.
          4.2.9 “Utilities Base Year” shall mean the year set forth in
Section 9.3 of the Summary.
          4.2.10 “Utilities Costs” shall mean all actual charges for utilities
for the Building and the Project which Landlord shall pay during any Expense
Year, including, but not limited to, the costs of water, sewer and electricity,
and the costs of HVAC and other utilities (but excluding those charges for which
tenants directly reimburse Landlord or otherwise pay directly to the utility
company) as well as related fees, assessments and surcharges. Utilities Costs
shall be calculated assuming the Building (and during the period of time when
any other office buildings are fully constructed and ready for occupancy and are
included by Landlord within the Project, such other office buildings), are at
least ninety-five percent (95%) occupied. If, during all or any part of any
Expense Year, Landlord shall not provide any utilities (the cost of which, if
provided by Landlord, would be included in Utilities Costs) to a tenant
(including Tenant) who has undertaken to provide the same instead of Landlord,
Utilities Costs shall be deemed to be increased by an amount equal to the
additional Utilities Costs which would reasonably have been incurred during such
period by Landlord if Landlord had at its own expense provided such utilities to
such tenant. Utilities Costs shall include any costs of utilities which are
allocated to the Real Property under any declaration, restrictive covenant, or
other instrument pertaining to the sharing of costs by the Real Property or any
portion thereof, including any covenants, conditions or restrictions now or
hereafter recorded against or affecting the Real Property. For purposes of
determining Utilities Costs incurred for the Utilities Base Year, Utilities
Costs for the Utilities Base Year shall not include any one time special
charges, costs or fees or extraordinary charges or costs incurred in the
Utilities Base Year only, including those attributable to boycotts, embargoes,
strikes or other shortages of services or fuel. In addition, if in any Expense
Year subsequent to the Utilities Base Year, the amount of Utilities Costs
decreases due to a reduction in the cost of providing utilities to the Real
Property for any reason, including without limitation, because of deregulation
of the utility industry and/or reduction in rates achieved in contracts with
utilities providers, then for purposes of the Expense Year in which such
decrease in Utilities Costs occurred and all subsequent Expense Years, the
Utilities Costs for the Utilities Base Year shall be decreased by an amount
equal to such decrease.
     4.3 Calculation and Payment of Additional Rent.
          4.3.1 Calculation of Excess. If for any Expense Year ending or
commencing within the Lease Term, (i) Tenant’s Share of Operating Expenses
allocated to the Building pursuant to Section 4.3.4 below for such Expense Year
exceeds Tenant’s Share of Operating Expenses allocated to the Building for the
Expense Base Year and/or (ii) Tenant’s Share of Tax Expenses allocated to the
Building pursuant to Section 4.3.4 below for such Expense Year exceeds Tenant’s
Share of Tax Expenses allocated to the Building for the Tax Expense Base Year,
and/or (iii) Tenant’s Share of Utilities Costs allocated to the Building
pursuant to Section 4.3.4 below for such Expense Year exceeds Tenant’s Share of
Utilities Costs allocated to the Building for the Utilities Base Year, then
Tenant shall pay to Landlord, in the manner set forth in Section 4.3.2, below,
and as Additional Rent, an amount equal to such excess (the “Excess”).
          4.3.2 Statement of Actual Operating Expenses, Tax Expenses and
Utilities Costs and Payment by Tenant. Landlord shall endeavor to give to Tenant
on or before the first day of May following the end of each Expense Year, a
statement (the “Statement”) which shall state the Operating Expenses, Tax
Expenses and Utilities Costs incurred or accrued for such preceding Expense
Year, and which shall indicate the amount, if any, of any Excess. Upon receipt
of the Statement for each Expense Year ending during the Lease Term, if an
Excess is present, Tenant shall pay, with its next installment of Base Rent due,
the full amount of the Excess for such Expense Year, less the amounts, if any,
paid during such Expense Year as “Estimated Excess,” as that term is defined in
Section 4.3.3 of this Lease. The failure of Landlord to timely furnish the
Statement for any Expense Year shall not prejudice Landlord from enforcing its
rights under this Article 4. Even though the Lease Term has expired and Tenant
has vacated the Premises, when the final determination is made of Tenant’s Share
of the Operating Expenses, Tax Expenses and Utilities Costs for the Expense Year
in which this Lease terminates, if an Excess is present, Tenant shall
immediately pay to Landlord an amount as calculated pursuant to the provisions
of Section 4.3.1 of this Lease. The provisions of this Section 4.3.2 shall
survive the expiration or earlier termination of the Lease Term.
          4.3.3 Statement of Estimated Operating Expenses, Tax Expenses and
Utilities Costs. In addition, Landlord shall endeavor to give Tenant a yearly
expense estimate statement (the “Estimate Statement”) which shall set forth
Landlord’s reasonable estimate (the “Estimate”) of what the total amount of
Operating Expenses, Tax Expenses and Utilities Costs allocated to the Building
pursuant to Section 4.3.4 below for the then-current Expense Year shall be and
the estimated Excess (the “Estimated Excess”) as calculated by comparing
(i) Tenant’s Share of Operating Expenses allocated to the Building, which shall
be based upon the Estimate, to Tenant’s Share of Operating Expenses allocated to
the Building for the Expense Base Year, (ii) Tenant’s Share of Tax Expenses
allocated to the Building, which shall be based upon the Estimate, to Tenant’s
Share of Tax Expenses

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allocated to the Building for the Tax Expense Base Year, and (iii) Tenant’s
Share of Utilities Costs allocated to the Building, which shall be based upon
the Estimate, to Tenant’s Share of Utilities Costs allocated to the Building for
the Utilities Base Year. The failure of Landlord to timely furnish the Estimate
Statement for any Expense Year shall not preclude Landlord from enforcing its
rights to collect any Estimated Excess under this Article 4. If pursuant to the
Estimate Statement an Estimated Excess is calculated for the then-current
Expense Year, Tenant shall pay, with its next installment of Base Rent due, a
fraction of the Estimated Excess for the then-current Expense Year (reduced by
any amounts paid pursuant to the last sentence of this Section 4.3.3). Such
fraction shall have as its numerator the number of months which have elapsed in
such current Expense Year to the month of such payment, both months inclusive,
and shall have twelve (12) as its denominator. Until a new Estimate Statement is
furnished, Tenant shall pay monthly, with the monthly Base Rent installments, an
amount equal to one-twelfth (1/12) of the total Estimated Excess set forth in
the previous Estimate Statement delivered by Landlord to Tenant.
          4.3.4 Allocation of Operating Expenses, Tax Expenses and Utilities
Costs to Building. The parties acknowledge that the Building may in the future
be part of a multi-office building project consisting of the Building and such
other buildings as Landlord may elect to construct and include as part of the
Real Property from time to time (collectively, the “Other Buildings”), and that
certain of the costs and expenses incurred in connection with the Real Property
(i.e., the Operating Expenses, Tax Expenses and Utilities Costs) shall be shared
among the Building and/or such Other Buildings, while certain other costs and
expenses which are solely attributable to the Building and such Other Buildings,
as applicable, shall be allocated directly to the Building and the Other
Buildings, respectively. Accordingly, as set forth in Sections  4.1 and 4.2
above, Operating Expenses, Tax Expenses and Utilities Costs are determined
annually for the Real Property as a whole, and a portion of the Operating
Expenses, Tax Expenses and Utilities Costs, which portion shall be determined by
Landlord on an equitable basis, shall be allocated to the Building (as opposed
to the tenants of the Other Buildings), and such portion so allocated shall be
the amount of Operating Expenses, Tax Expenses and Utilities Costs payable with
respect to the Building upon which Tenant’s Share shall be calculated. Such
portion of the Operating Expenses, Tax Expenses and Utilities Costs allocated to
the Building shall include all Operating Expenses, Tax Expenses and Utilities
Costs which are attributable solely to the Building, and an equitable portion of
the Operating Expenses, Tax Expenses and Utilities Costs attributable to the
Real Property as a whole (but not any portion of the Operating Expenses, Tax
Expenses and Utilities Costs which are attributable solely to Other Buildings or
utilities of the Other Buildings that are separately metered). As an example of
such allocation with respect to Tax Expenses and Utilities Costs, it is
anticipated that Landlord may receive separate tax bills which separately assess
the improvements component of Tax Expenses for each building in the Project
and/or Landlord may receive separate utilities bills from the utilities
companies identifying the Utilities Costs for certain of the utilities costs
directly incurred by each such building (as measured by separate meters
installed for each such building), and such separately assessed Tax Expenses and
separately metered Utilities Costs shall be calculated for and allocated
separately to each such applicable building. In addition, in the event Landlord
elects, at its sole option, to subdivide certain common area portions of the
Real Property such as landscaping, public and private streets, driveways,
walkways, courtyards, plazas, transportation facilitation areas, accessways
and/or parking areas into a separate parcel or parcels of land (and/or
separately convey all or any of such parcels to a common area association to
own, operate and/or maintain same), the Operating Expenses, Tax Expenses and
Utilities Costs for such common area parcels of land may be aggregated and then
reasonably allocated by Landlord to the Building and such Other Buildings on an
equitable basis as Landlord (and/or any applicable covenants, conditions and
restrictions for any such common area association) shall provide from time to
time.
     4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible.
Tenant shall reimburse Landlord upon demand for any and all taxes or assessments
required to be paid by Landlord (except to the extent included in Tax Expenses
by Landlord), excluding state, local and federal personal or corporate income
taxes measured by the net income of Landlord from all sources and estate and
inheritance taxes, whether or not now customary or within the contemplation of
the parties hereto, when:
          4.4.1 said taxes are measured by or reasonably attributable to the
cost or value of Tenant’s equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the cost
or value of such leasehold improvements exceeds the cost or value of a building
standard build-out as determined by Landlord regardless of whether title to such
improvements shall be vested in Tenant or Landlord;
          4.4.2 said taxes are assessed upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises or any portion of the Real Property
(including the Parking Facilities); or
          4.4.3 said taxes are assessed upon this transaction or any document to
which Tenant is a party creating or transferring an interest or an estate in the
Premises.
     4.5 Late Charges. If any installment of Rent or any other sum due from
Tenant shall not be received by Landlord or Landlord’s designee by the due date
therefor, then Tenant shall pay to Landlord a late charge equal to ten percent
(10%) of the amount due plus reasonable attorneys’ fees incurred by Landlord by
reason of Tenant’s failure to pay Rent and/or other charges when due hereunder.
The late charge shall be deemed Additional Rent and the right to require it
shall be in addition to all of Landlord’s other rights and remedies hereunder,
at law and/or in equity and shall not be construed as liquidated damages or as
limiting Landlord’s remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid by
the date that they are due shall thereafter bear interest until paid at a rate
(the “Interest Rate”) equal to the lesser of (i) the “Prime Rate” or “Reference
Rate” announced from time to time by the Bank of America (or such reasonable
comparable national banking institution as selected by Landlord in the event
Bank of America ceases to exist or publish a Prime Rate or Reference Rate), plus
four percent (4%), or (ii) the highest rate permitted by applicable law.

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ARTICLE 5
USE OF PREMISES
     Tenant shall use the Premises solely for general office purposes consistent
with the character of the Building as a first-class office building, and Tenant
shall not use or permit the Premises to be used for any other purpose or
purposes whatsoever. Tenant further covenants and agrees that it shall not use,
or suffer or permit any person or persons to use, the Premises or any part
thereof for any use or purpose contrary to the provisions of Exhibit D, attached
hereto, or in violation of the laws of the United States of America, the state
in which the Real Property is located, or the ordinances, regulations or
requirements of the local municipal or county governing body or other lawful
authorities having jurisdiction over the Real Property. Tenant shall comply with
all recorded covenants, conditions, and restrictions, and the provisions of all
ground or underlying leases, now or hereafter affecting the Real Property.
Tenant shall not use or allow another person or entity to use any part of the
Premises for the storage, use, treatment, manufacture or sale of “Hazardous
Material,” as that term is defined below. As used herein, the term “Hazardous
Material” means any hazardous or toxic substance, material or waste which is or
becomes regulated by any local governmental authority, the state in which the
Real Property is located or the United States Government.
ARTICLE 6
SERVICES AND UTILITIES
     6.1 Standard Tenant Services. Landlord shall provide the following services
on all days during the Lease Term, unless otherwise stated below.
          6.1.1 Subject to reasonable changes implemented by Landlord and to all
governmental rules, regulations and guidelines applicable thereto, Landlord
shall provide heating and air conditioning when necessary for normal comfort for
normal office use in the Premises, from Monday through Friday, during the period
from 7:00 a.m. to 6:00 p.m., except for the date of observation of New Year’s
Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day, Christmas Day and other locally or nationally recognized holidays as
designated by Landlord (collectively, the “Holidays`”).
          6.1.2 Landlord shall provide adequate electrical wiring and facilities
and power for normal general office use for Building standard lighting and
standard office equipment, as determined by Landlord. Landlord shall designate
the electricity utility provider from time to time.
          6.1.3 As part of Operating Expenses or Utilities Costs (as determined
by Landlord), Landlord shall replace lamps, starters and ballasts for Building
standard lighting fixtures within the Premises. In addition, Tenant shall bear
the cost of replacement of lamps, starters and ballasts for non-Building
standard lighting fixtures within the Premises.
          6.1.4 Landlord shall provide city water from the regular Building
outlets for drinking, lavatory and toilet purposes.
          6.1.5 Landlord shall provide janitorial services five (5) days per
week, except the date of observation of the Holidays, in and about the Premises
and window washing services in a manner consistent with other comparable
buildings in the vicinity of the Project.
          6.1.6 Landlord shall provide nonexclusive automatic passenger elevator
service at all times.
          6.1.7 Landlord shall provide nonexclusive freight elevator service
subject to scheduling by Landlord.
     6.2 Overstandard Tenant Use. Tenant shall not, without Landlord’s prior
written consent, use heat-generating machines, machines other than normal
fractional horsepower office machines, or equipment or lighting other than
Building standard lights in the Premises, which may affect the temperature
otherwise maintained by the air conditioning system or increase the need for
water normally furnished for the Premises by Landlord pursuant to the terms of
Section 6.1 of this Lease. If such consent is given, Landlord shall have the
right to install supplementary air conditioning equipment or systems in the
Premises, including supplementary or additional metering devices, and the cost
thereof, including the cost of installation, operation and maintenance,
increased wear and tear on existing equipment and other similar charges, shall
be paid by Tenant to Landlord upon billing by Landlord. If Tenant uses water or
heat or air conditioning in excess of that supplied by Landlord pursuant to
Section 6.1 of this Lease, or if Tenant’s consumption of electricity shall
exceed two (2) watts connected load per rentable square foot of the Premises,
calculated on an monthly basis for the hours described in Section 6.1.1 above,
Tenant shall pay to Landlord, within ten (10) days after billing and as
additional rent, the cost of such excess consumption, the cost of the
installation, operation, and maintenance of equipment which is installed in
order to supply such excess consumption, and the cost of the increased wear and
tear on existing equipment caused by such excess consumption; and Landlord may
install devices to separately meter any increased use, and in such event Tenant
shall pay, as additional rent, the increased cost directly to Landlord, within
ten (10) days after demand, including the cost of such additional metering
devices. If Tenant desires to use heat, ventilation or air conditioning during
hours other than those for which Landlord is obligated to supply such utilities
pursuant to the terms of Section 6.1 of this Lease, (i) Tenant shall give
Landlord such prior notice, as Landlord shall from time to time establish as
appropriate, of Tenant’s desired use, (ii) Landlord shall supply such utilities
to Tenant at such hourly cost to Tenant as Landlord shall from time to time
establish, and (iii) Tenant shall pay such cost within ten (10) days

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after billing, as additional rent. Landlord confirms that after-hours heating
and air-conditioning is available to the Premises at the current cost of $35.00
per hour. The rate for after-hours heating and air-conditioning to the Premises
is subject to change based upon changes in Landlord’s cost to provide such
services.
     6.3 Separate Metering. Notwithstanding the foregoing provisions of this
Section 6 to the contrary, Landlord shall have the right to cause some or all of
the electricity, water and/or other utilities to be separately metered for the
Premises, and Tenant shall pay for the cost of all such utilities so separately
metered, or which are billed directly to Tenant, within ten (10) days after
invoice, in which event Utilities Costs for the Utilities Base Year and each
Expense Year shall be equitably reduced to exclude all such utilities provided
to Tenant and other tenants in the Building.
     6.4 Interruption of Use. Tenant agrees that Landlord shall not be liable
for damages, by abatement of Rent or otherwise, for failure to furnish or delay
in furnishing any service (including telephone and telecommunication services),
or for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, or other fuel at the Building or
Real Property after reasonable effort to do so, by any accident or casualty
whatsoever, by act or default of Tenant or other parties, or by any other cause
beyond Landlord’s reasonable control; and such failures or delays or diminution
shall never be deemed to constitute an eviction or disturbance of Tenant’s use
and possession of the Premises or relieve Tenant from paying Rent or performing
any of its obligations under this Lease. Furthermore, Landlord shall not be
liable under any circumstances for a loss of, or injury to, property or for
injury to, or interference with, Tenant’s business, including, without
limitation, loss of profits, however occurring, through or in connection with or
incidental to a failure to furnish any of the services or utilities as set forth
in this Article 6.
     6.5 Additional Services. Landlord shall also have the exclusive right, but
not the obligation, to provide any additional services which may be required by
Tenant, including, without limitation, locksmithing, lamp replacement,
additional janitorial service, and additional repairs and maintenance, provided
that Tenant shall pay to Landlord upon billing, the sum of all costs to Landlord
of such additional services plus an administration fee. Charges for any
utilities or service for which Tenant is required to pay from time to time
hereunder, shall be deemed Additional Rent hereunder and shall be billed on a
monthly basis.
ARTICLE 7
REPAIRS
     7.1 Tenant’s Repairs. Subject to Landlord’s repair obligations in
Sections 7.2 and 11.1 below, Tenant shall, at Tenant’s own expense, keep the
Premises, including all improvements, fixtures and furnishings therein, in good
order, repair and condition at all times during the Lease Term, which repair
obligations shall include, without limitation, the obligation to promptly and
adequately repair all damage to the Premises and replace or repair all damaged
or broken fixtures and appurtenances; provided however, that, at Landlord’s
option, or if Tenant fails to make such repairs, Landlord may, but need not,
make such repairs and replacements, and Tenant shall pay Landlord the cost
thereof, including a percentage of the cost thereof (to be uniformly established
for the Building) sufficient to reimburse Landlord for all overhead, general
conditions, fees and other costs or expenses arising from Landlord’s involvement
with such repairs and replacements forthwith upon being billed for same.
     7.2 Landlord’s Repairs. Anything contained in Section 7.1 above to the
contrary notwithstanding, and subject to Articles 11 and 12 of this Lease,
Landlord shall repair and maintain the structural portions of the Building,
including the basic plumbing, heating, ventilating, air conditioning and
electrical systems serving the Building and not located in the Premises;
provided, however, if such maintenance and repairs are caused in part or in
whole by the act, neglect, fault of or omission of any duty by Tenant, its
agents, servants, employees or invitees, Tenant shall pay to Landlord as
additional rent, the reasonable cost of such maintenance and repairs. Landlord
shall not be liable for any failure to make any such repairs, or to perform any
maintenance. 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 in or to any portion of the
Real Property, Building or the Premises or in or to fixtures, appurtenances and
equipment therein. Tenant hereby waives and releases its right to make repairs
at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code;
or under any similar law, statute, or ordinance now or hereafter in effect.
ARTICLE 8
ADDITIONS AND ALTERATIONS
     8.1 Landlord’s Consent to Alterations. Tenant may not make any
improvements, alterations, additions or changes to the Premises (collectively,
the “Alterations”) without first procuring the prior written consent of Landlord
to such Alterations, which consent shall be requested by Tenant not less than
thirty (30) days prior to the commencement thereof, and which consent shall not
be unreasonably withheld by Landlord; provided, however, Landlord may withhold
its consent in its sole and absolute discretion with respect to any Alterations
which may affect the structural components of the Building or the Systems and
Equipment or which can be seen from outside the Premises. Tenant shall pay for
all overhead, general conditions, fees and other costs and expenses of the
Alterations, and shall pay to Landlord a Landlord supervision fee of ten percent
(10%) of the cost of the Alterations. The construction of the initial
improvements to the Premises shall be governed by the terms of the Tenant Work
Letter and not the terms of this Article 8.

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     8.2 Manner of Construction. Landlord may impose, as a condition of its
consent to all Alterations or repairs of the Premises or about the Premises,
such requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirement that Tenant utilize for such
purposes only contractors, materials, mechanics and materialmen approved by
Landlord; provided, however, Landlord may impose such requirements as Landlord
may determine, in its sole and absolute discretion, with respect to any work
affecting the structural components of the Building or Systems and Equipment
(including designating specific contractors to perform such work). Tenant shall
construct such Alterations and perform such repairs in conformance with any and
all applicable rules and regulations of any federal, state, county or municipal
code or ordinance and pursuant to a valid building permit, issued by the city in
which the Real Property is located, and in conformance with Landlord’s
construction rules and regulations. Landlord’s approval of the plans,
specifications and working drawings for Tenant’s Alterations shall create no
responsibility or liability on the part of Landlord for their completeness,
design sufficiency, or compliance with all laws, rules and regulations of
governmental agencies or authorities. All work with respect to any Alterations
must be done in a good and workmanlike manner and diligently prosecuted to
completion to the end that the Premises shall at all times be a complete unit
except during the period of work. In performing the work of any such
Alterations, Tenant shall have the work performed in such manner as not to
obstruct access to the Building or Real Property or the common areas for any
other tenant of the Real Property, and as not to obstruct the business of
Landlord or other tenants of the Real Property, or interfere with the labor
force working at the Real Property. If Tenant makes any Alterations, Tenant
agrees to carry “Builder’s All Risk” insurance in an amount approved by Landlord
covering the construction of such Alterations, and such other insurance as
Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee. Upon completion of any Alterations, Tenant shall (i) cause a Notice
of Completion to be recorded in the office of the Recorder of the county in
which the Real Property is located in accordance with Section 3093 of the Civil
Code of the State of California or any successor statute, (ii) deliver to the
management office of the Real Property a reproducible copy of the “as built”
drawings of the Alterations, and (iii) deliver to Landlord evidence of payment,
contractors’ affidavits and full and final waivers of all liens for labor,
services or materials.
     8.3 Landlord’s Property. All Alterations, improvements, fixtures and/or
equipment which may be installed or placed in or about the Premises, and all
signs installed in, on or about the Premises, from time to time, shall be at the
sole cost of Tenant and shall be and become the property of Landlord.
Furthermore, Landlord may require that Tenant remove any improvement or
Alteration upon the expiration or early termination of the Lease Term, and
repair any damage to the Premises and Building caused by such removal. If Tenant
fails to complete such removal and/or to repair any damage caused by the removal
of any Alterations, Landlord may do so and may charge the cost thereof to
Tenant.
     8.4 Wi-Fi Network. Without limiting the generality of the foregoing, in the
event Tenant desires to install wireless intranet, Internet and communications
network (“Wi-Fi Network”) in the Premises for the use by Tenant and its
employees, then the same shall be subject to the provisions of this Section 8.4
(in addition to the other provisions of this Article 8). In the event Landlord
consents to Tenant’s installation of such Wi-Fi Network, Tenant shall, in
accordance with Article 15 below, remove the Wi-Fi Network from the Premises
prior to the termination of the Lease. Tenant shall use the Wi-Fi Network so as
not to cause any interference to other tenants in the Building or to other
tenants at the Real Property or with any other tenant’s communication equipment,
and not to damage the Real Property or interfere with the normal operation of
the Real Property and Tenant hereby agrees to indemnify, defend and hold
Landlord harmless from and against any and all claims, costs, damages, expenses
and liabilities (including attorneys’ fees) arising out of Tenant’s failure to
comply with the provisions of this Section 8.4, except to the extent same is
caused by the gross negligence or willful misconduct of Landlord and which is
not covered by the insurance carried by Tenant under this Lease (or which would
not be covered by the insurance required to be carried by Tenant under this
Lease). Should any interference occur, Tenant shall take all necessary steps as
soon as reasonably possible and no later than three (3) calendar days following
such occurrence to correct such interference. If such interference continues
after such three (3) day period, Tenant shall immediately cease operating such
Wi-Fi Network until such interference is corrected or remedied to Landlord’s
satisfaction. Tenant acknowledges that Landlord has granted and/or may grant
telecommunication rights to other tenants and occupants of the Building and Real
Property and to telecommunication service providers and in no event shall
Landlord be liable to Tenant for any interference of the same with such Wi-Fi
Network. Landlord makes no representation that the Wi-Fi Network will be able to
receive or transmit communication signals without interference or disturbance.
Tenant shall (i) be solely responsible for any damage caused as a result of the
Wi-Fi Network, (ii) promptly pay any tax, license or permit fees charged
pursuant to any laws or regulations in connection with the installation,
maintenance or use of the Wi-Fi Network and comply with all precautions and
safeguards recommended by all governmental authorities, (iii) pay for all
necessary repairs, replacements to or maintenance of the Wi-Fi Network, and
(iv) be responsible for any modifications, additions or repairs to the Building
or Real Property, including without limitation, Building or Real Property
systems or infrastructure, which are required by reason of the installation,
operation or removal of Tenant’s Wi-Fi Network. Should Landlord be required to
retain professionals to research any interference issues that may arise and
confirm Tenant’s compliance with the terms of this Section 8.4, Tenant shall
reimburse Landlord for the costs incurred by Landlord in connection with
Landlord’s retention of such professionals, the research of such interference
issues and confirmation of Tenant’s compliance with the terms of this
Section 8.4 within twenty (20) days after the date Landlord submits to Tenant an
invoice for such costs, which costs shall not exceed One Thousand Dollars
($1,000.00) in the aggregate per year (the “Reimbursement Cap”); provided,
however, that to the extent that it is determined that Tenant has failed to
perform its obligations under this Section 8.4, the Reimbursement Cap shall not
apply, and Tenant shall be responsible for reimbursing Landlord for all costs
Landlord incurs in connection with Landlord’s retention of such professionals,
the research of such interference issues and confirmation of Tenant’s compliance
with the terms of this Section 8.4. This reimbursement obligation is in addition
to, and not in lieu of, any rights or remedies Landlord may have in the event of
a breach or default by Tenant under this Lease.

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     8.5 Supplemental HVAC Equipment. Tenant shall be entitled to the continued
use and maintenance of the existing supplemental HVAC equipment located within
the computer room of the Premises, as more particularly set forth on Exhibit E
attached hereto (collectively, the “Supplemental HVAC Equipment”). Tenant’s
continued use and maintenance of the Supplemental HVAC Equipment shall continue
to be at Tenant’s sole cost and expense and shall remain in the current
locations, previously approved by Landlord pursuant to the Existing Lease
(defined in Section 24.31 below). The Supplemental HVAC Units shall be
separately metered at Tenant’s sole cost and expense (including condensor water
and electricity, as applicable), and all costs and utility charges relating to
the operation, maintenance and repair of such Supplemental HVAC Equipment shall
be paid for by Tenant. If Tenant elects to install any additional supplemental
HVAC equipment pursuant to the terms of this Article 8, Tenant shall install and
operate the additional supplemental HVAC equipment in compliance with applicable
law and shall at all times maintain the Supplemental HVAC Equipment, including
any additional supplemental HVAC equipment, in good condition and repair. If
Tenant desires to relocate the Supplemental HVAC Equipment, Tenant shall obtain
Landlord’s prior written approval of the new locations, and any costs incurred
due to the relocation shall be Tenant’s sole responsibility. Upon the expiration
or earlier termination of this Lease, Tenant shall surrender the Supplemental
HVAC Equipment to Landlord in good condition, normal wear and tear excepted, or,
at Landlord’s option, Tenant shall remove the Supplemental HVAC Equipment and
repair any damage to the Premises and/or the Building caused by such removal.
ARTICLE 9
COVENANT AGAINST LIENS
     Tenant has no authority or power to cause or permit any lien or encumbrance
of any kind whatsoever, whether created by act of Tenant, operation of law or
otherwise, to attach to or be placed upon the Real Property, Building or
Premises, and any and all liens and encumbrances created by Tenant shall attach
to Tenant’s interest only. Landlord shall have the right at all times to post
and keep posted on the Premises any notice which it deems necessary for
protection from such liens. Tenant covenants and agrees not to suffer or permit
any lien of mechanics or materialmen or others to be placed against the Real
Property, the Building or the Premises with respect to work or services claimed
to have been performed for or materials claimed to have been furnished to Tenant
or the Premises, and, in case of any such lien attaching or notice of any lien,
Tenant covenants and agrees to cause it to be immediately released and removed
of record. Notwithstanding anything to the contrary set forth in this Lease, if
any such lien is not released and removed on or before the date notice of such
lien is delivered by Landlord to Tenant, Landlord, at its sole option, may
immediately take all action necessary to release and remove such lien, without
any duty to investigate the validity thereof, and all sums, costs and expenses,
including reasonable attorneys’ fees and costs, incurred by Landlord in
connection with such lien shall be deemed Additional Rent under this Lease and
shall immediately be due and payable by Tenant.
ARTICLE 10
INDEMNIFICATION AND INSURANCE
     10.1 Indemnification and Waiver. Tenant hereby assumes all risk of damage
to property and injury to persons, in, on, or about the Premises from any cause
whatsoever and agrees that Landlord, and its partners and subpartners, and their
respective officers, agents, property managers, servants, employees, and
independent contractors (collectively, “Landlord Parties”) shall not be liable
for, and are hereby released from any responsibility for, any damage to property
or injury to persons or resulting from the loss of use thereof, which damage or
injury is sustained by Tenant or by other persons claiming through Tenant.
Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties
from any and all loss, cost, damage, expense and liability (including without
limitation court costs and reasonable attorneys’ fees) incurred in connection
with or arising from any cause in, on or about the Premises (including, without
limitation, Tenant’s installation, placement and removal of Alterations,
improvements, fixtures and/or equipment in, on or about the Premises), and any
acts, omissions or negligence of Tenant or of any person claiming by, through or
under Tenant, or of the contractors, agents, servants, employees, licensees or
invitees of Tenant or any such person, in, on or about the Premises, the
Building and Real Property; provided, however, that the terms of the foregoing
indemnity shall not apply to the gross negligence or willful misconduct of
Landlord. The provisions of this Section 10.1 shall survive the expiration or
sooner termination of this Lease.
     10.2 Tenant’s Compliance with Landlord’s Fire and Casualty Insurance.
Tenant shall, at Tenant’s expense, comply as to the Premises with all insurance
company requirements pertaining to the use of the Premises. If Tenant’s conduct
or use of the Premises causes any increase in the premium for such insurance
policies, then Tenant shall reimburse Landlord for any such increase. Tenant, at
Tenant’s expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board
of Fire Underwriters) and with any similar body.
     10.3 Tenant’s Insurance. Tenant shall maintain the following coverages in
the following amounts.
          10.3.1 Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage arising out
of Tenant’s operations, assumed liabilities or use of the Premises, including a
Broad Form Commercial General Liability endorsement covering the insuring
provisions of this Lease and the performance by Tenant of the indemnity
agreements set forth in Section 10.1 of this Lease, (and with owned and
non-owned automobile liability coverage, and liquor liability coverage in the
event alcoholic beverages are served on the Premises) for limits of liability
not less than:

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Bodily Injury and
Property Damage Liability

   
$5,000,000 each occurrence
$5,000,000 annual aggregate

   

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

   

          10.3.2 Physical Damage Insurance covering (i) all office furniture,
trade fixtures, office equipment, merchandise and all other items of Tenant’s
property on the Premises installed by, for, or at the expense of Tenant,
(ii) the Tenant Improvements, including any Tenant Improvements which Landlord
permits to be installed above the ceiling of the Premises or below the floor of
the Premises, and (iii) all other improvements, alterations and additions to the
Premises, including any improvements, alterations or additions installed at
Tenant’s request above the ceiling of the Premises or below the floor of the
Premises. Such insurance shall be written on a “physical loss or damage” basis
under a “special form” policy, for the full replacement cost value new without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance and shall include a vandalism
and malicious mischief endorsement, sprinkler leakage coverage and earthquake
sprinkler leakage coverage.
          10.3.3 Workers’ compensation insurance as required by law.
          10.3.4 Loss-of-income, business interruption and extra-expense
insurance in such amounts as will reimburse Tenant for direct and indirect loss
of earnings attributable to all perils commonly insured against by prudent
tenants or attributable to prevention of loss of access to the Premises or to
the Building as a result of such perils.
          10.3.5 Tenant shall carry comprehensive automobile liability insurance
having a combined single limit of not less than Two Million Dollars
($2,000,000.00) per occurrence and insuring Tenant against liability for claims
arising out of ownership, maintenance or use of any owned, hired or non-owned
automobiles.
          10.3.6 The minimum limits of policies of insurance required of Tenant
under this Lease shall in no event limit the liability of Tenant under this
Lease. Such insurance shall: (i) name Landlord, and any other party it so
specifies, as an additional insured; (ii) specifically cover the liability
assumed by Tenant under this Lease, including, but not limited to, Tenant’s
obligations under Section 10.1 of this Lease; (iii) be issued by an insurance
company having a rating of not less than A-X in Best’s Insurance Guide or which
is otherwise acceptable to Landlord and licensed to do business in the state in
which the Real Property is located; (iv) be primary insurance as to all claims
thereunder and provide that any insurance carried by Landlord is excess and is
non-contributing with any insurance requirement of Tenant; (v) provide that said
insurance shall not be canceled or coverage changed unless thirty (30) days’
prior written notice shall have been given to Landlord and any mortgagee or
ground or underlying lessor of Landlord; (vi) contain a cross-liability
endorsement or severability of interest clause acceptable to Landlord; and
(vii) with respect to the insurance required in Sections 10.3.1 and 10.3.2
above, have deductible amounts not exceeding Five Thousand Dollars ($5,000.00).
Tenant shall deliver said policy or policies or certificates thereof to Landlord
on or before the Lease Commencement Date and at least thirty (30) days before
the expiration dates thereof. If Tenant shall fail to procure such insurance, or
to deliver such policies or certificate, within such time periods, Landlord may,
at its option, in addition to all of its other rights and remedies under this
Lease, and without regard to any notice and cure periods set forth in
Section 19.1, procure such policies for the account of Tenant, and the cost
thereof shall be paid to Landlord as Additional Rent within ten (10) days after
delivery of bills therefor.
     10.4 Subrogation. Landlord and Tenant agree to have their respective
insurance companies issuing property damage insurance waive any rights of
subrogation that such companies may have against Landlord or Tenant, as the case
may be, so long as the insurance carried by Landlord and Tenant, respectively,
is not invalidated thereby. As long as such waivers of subrogation are contained
in their respective insurance policies, Landlord and Tenant hereby waive any
right that either may have against the other on account of any loss or damage to
their respective property to the extent such loss or damage is insurable under
policies of insurance for fire and all risk coverage, theft, public liability,
or other similar insurance.
     10.5 Additional Insurance Obligations. Tenant shall carry and maintain
during the entire Lease Term, at Tenant’s sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10, and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant’s operations therein, as may
be reasonably requested by Landlord.
ARTICLE 11
DAMAGE AND DESTRUCTION
     11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any common areas of the Building or Real Property
serving or providing access to the Premises shall be damaged by fire or other
casualty, Landlord shall promptly and diligently, subject to reasonable delays
for insurance adjustment or other matters beyond Landlord’s reasonable control,
and subject to all other terms of this Article 11, restore the base, shell, and
core of the Premises and such common areas. Such restoration shall be to
substantially the same condition of the

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base, shell, and core of the Premises and common areas prior to the casualty,
except for modifications required by zoning and building codes and other laws or
by the holder of a mortgage on the Real Property, or the lessor of a ground or
underlying lease with respect to the Real Property and/or the Building, or any
other modifications to the common areas deemed desirable by Landlord, provided
access to the Premises and any common restrooms serving the Premises shall not
be materially impaired. Notwithstanding any other provision of this Lease, upon
the occurrence of any damage to the Premises, Tenant shall assign to Landlord
(or to any party designated by Landlord) all insurance proceeds payable to
Tenant under Tenant’s insurance required under Section 10.3 of this Lease, and
Landlord shall repair any injury or damage to the tenant improvements and
alterations installed in the Premises and shall return such tenant improvements
and alterations to their original condition; provided that if the cost of such
repair by Landlord exceeds the amount of insurance proceeds received by Landlord
from Tenant’s insurance carrier, as assigned by Tenant, the cost of such repairs
shall be paid by Tenant to Landlord prior to Landlord’s repair of the damage. In
connection with such repairs and replacements, Tenant shall, prior to the
commencement of construction, submit to Landlord, for Landlord’s review and
approval, all plans, specifications and working drawings relating thereto, and
Landlord shall select the contractors to perform such improvement work. Landlord
shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant’s business resulting in any way from such damage
or the repair thereof; provided however, that if such fire or other casualty
shall have damaged the Premises or common areas necessary to Tenant’s occupancy,
and if such damage is not the result of the negligence or willful misconduct of
Tenant or Tenant’s employees, contractors, licensees, or invitees, Landlord
shall allow Tenant a proportionate abatement of Base Rent and Tenant’s Share of
Operating Expenses, Tax Expenses and Utilities Costs to the extent Landlord is
reimbursed from the proceeds of rental interruption insurance purchased by
Landlord as part of Operating Expenses, during the time and to the extent the
Premises are unfit for occupancy for the purposes permitted under this Lease,
and not occupied by Tenant as a result thereof.
     11.2 Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1
of this Lease, Landlord may elect not to rebuild and/or restore the Premises,
the Building and/or any other portion of the Real Property and instead terminate
this Lease by notifying Tenant in writing of such termination within sixty
(60) days after the date of damage, such notice to include a termination date
giving Tenant ninety (90) days to vacate the Premises, but Landlord may so elect
only if the Building shall be damaged by fire or other casualty or cause,
whether or not the Premises are affected, and one or more of the following
conditions is present: (i) repairs cannot reasonably be completed within one
hundred twenty (120) days of the date of damage (when such repairs are made
without the payment of overtime or other premiums); (ii) the holder of any
mortgage on the Real Property or ground or underlying lessor with respect to the
Real Property and/or the Building shall require that the insurance proceeds or
any portion thereof be used to retire the mortgage debt, or shall terminate the
ground or underlying lease, as the case may be; or (iii) the damage is not fully
covered, except for deductible amounts, by Landlord’s insurance policies. In
addition, if the Premises or the Building is destroyed or damaged to any
substantial extent during the last twelve (12) months of the Lease Term, then
notwithstanding anything contained in this Article 11, Landlord shall have the
option to terminate this Lease by giving written notice to Tenant of the
exercise of such option within thirty (30) days after such damage or
destruction, in which event this Lease shall cease and terminate as of the date
of such notice. Upon any such termination of this Lease pursuant to this
Section 11.2, Tenant shall pay the Base Rent and Additional Rent, properly
apportioned up to such date of termination, and both parties hereto shall
thereafter be freed and discharged of all further obligations hereunder, except
as provided for in provisions of this Lease which by their terms survive the
expiration or earlier termination of the Lease Term.
     11.3 Waiver of Statutory Provisions. The provisions of this Lease,
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or any other portion of the Real Property, and any
statute or regulation of the state in which the Real Property is located,
including, without limitation, Sections 1932(2) and 1933(4) of the California
Civil Code, with respect to any rights or obligations concerning damage or
destruction in the absence of an express agreement between the parties, and any
other statute or regulation, now or hereafter in effect, shall have no
application to this Lease or any damage or destruction to all or any part of the
Premises, the Building or any other portion of the Real Property.
ARTICLE 12
CONDEMNATION
     12.1 Permanent Taking. If the whole or any part of the Premises, Building
or Real Property shall be taken by power of eminent domain or condemned by any
competent authority for any public or quasi-public use or purpose, or if any
adjacent property or street shall be so taken or condemned, or reconfigured or
vacated by such authority in such manner as to require the use, reconstruction
or remodeling of any part of the Premises, Building or Real Property, or if
Landlord shall grant a deed or other instrument in lieu of such taking by
eminent domain or condemnation, Landlord shall have the option to terminate this
Lease upon one hundred eighty (180) days’ notice, provided such notice is given
no later than ninety (90) days after the date of such taking, condemnation,
reconfiguration, vacation, deed or other instrument. If more than twenty-five
percent (25%) of the rentable square feet of the Premises is taken, or if access
to the Premises is substantially impaired, by power of eminent domain or
condemned by any competent authority for any public or quasi-public use or
purpose, then Tenant shall have the option to terminate this Lease upon one
hundred eighty (180) days’ notice, provided such notice is given no later than
ninety (90) days after the date of such taking. Landlord shall be entitled to
receive the entire award or payment in connection therewith, except that Tenant
shall have the right to file any separate claim available to Tenant for any
taking of Tenant’s personal property and fixtures belonging to Tenant and
removable by Tenant upon expiration of the Lease Term pursuant to the terms of
this Lease, and for moving expenses and any other compensatory damages, so long
as such claim does not diminish the award available to Landlord, its ground
lessor with respect to the Real Property or its mortgagee, and such claim is
payable separately to Tenant. All Rent shall be apportioned as of the date of
such termination, or the date of such taking, whichever shall first occur. If
any part of the Premises shall be

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taken by power of eminent domain or condemned by any competent authority for any
public or quasi-public use or purpose, and this Lease is not terminated, the
Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities
Costs shall be proportionately abated. Tenant hereby waives any and all rights
it might otherwise have pursuant to Section 1265.130 of The California Code of
Civil Procedure.
     12.2 Temporary Taking. Notwithstanding anything to the contrary contained
in this Article 12, in the event of a temporary taking of all or any portion of
the Premises by power of eminent domain or condemned by any competent authority
for any public or quasi-public use or purpose for a period of one hundred and
eighty (180) days or less, then this Lease shall not terminate but the Base Rent
and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs shall
be abated for the period of such taking in proportion to the ratio that the
amount of rentable square feet of the Premises taken bears to the total rentable
square feet of the Premises. Landlord shall be entitled to receive the entire
award made in connection with any such temporary taking.
ARTICLE 13
COVENANT OF QUIET ENJOYMENT
     Landlord covenants that Tenant, on paying the Rent, charges for services
and other payments herein reserved and on keeping, observing and performing all
the other terms, covenants, conditions, provisions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Lease Term, peaceably and quietly have, hold and enjoy the Premises
subject to the terms, covenants, conditions, provisions and agreements hereof
without interference by any persons lawfully claiming by or through Landlord.
The foregoing covenant is in lieu of any other covenant express or implied.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
     14.1 Transfers. Tenant shall not, without the prior written consent of
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment or other such foregoing transfer of this Lease or any interest
hereunder by operation of law, sublet the Premises or any part thereof, or
permit the use of the Premises by any persons other than Tenant and its
employees (all of the foregoing are hereinafter sometimes referred to
collectively as “Transfers” and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "Transferee”). If
Tenant shall desire Landlord’s consent to any Transfer, Tenant shall notify
Landlord in writing, which notice (the “Transfer Notice”) shall include (i) the
proposed effective date of the Transfer, which shall not be less than thirty
(30) days nor more than one hundred eighty (180) days after the date of delivery
of the Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the “Subject Space”), (iii) all of the terms of the proposed
Transfer, the name and address of the proposed Transferee, and a copy of all
existing and/or proposed documentation pertaining to the proposed Transfer,
including all existing operative documents to be executed to evidence such
Transfer or the agreements incidental or related to such Transfer, (iv) current
financial statements of the proposed Transferee certified by an officer, partner
or owner thereof, and (v) such other information as Landlord may reasonably
require. Any Transfer made without Landlord’s prior written consent shall, at
Landlord’s option, be null, void and of no effect, and shall, at Landlord’s
option, constitute a default by Tenant under this Lease. Whether or not Landlord
shall grant consent, within thirty (30) days after written request by Landlord,
Tenant shall pay to Landlord Two Thousand Five Hundred Dollars ($2,500.00) to
reimburse Landlord for its review and processing fees, and Tenant shall also
reimburse Landlord for any reasonable legal fees incurred by Landlord in
connection with Tenant’s proposed Transfer.
     14.2 Landlord’s Consent. Landlord shall not unreasonably withhold its
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. The parties hereby agree that it shall
be reasonable under this Lease and under any applicable law for Landlord to
withhold consent to any proposed Transfer where one or more of the following
apply, without limitation as to other reasonable grounds for withholding
consent:
          14.2.1 The Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Building or Real
Property;
          14.2.2 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;
          14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;
          14.2.4 The Transfer will result in more than a reasonable and safe
number of occupants per floor within the Subject Space;
          14.2.5 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities involved under the
Lease on the date consent is requested;
          14.2.6 The proposed Transfer would cause Landlord to be in violation
of another lease or agreement to which Landlord is a party, or would give an
occupant of the Real Property a right to cancel its lease;

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          14.2.7 The terms of the proposed Transfer will allow the Transferee to
exercise a right of renewal, right of expansion, right of first offer, or other
similar right held by Tenant (or will allow the Transferee to occupy space
leased by Tenant pursuant to any such right); or
          14.2.8 Either the proposed Transferee, or any person or entity which
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed Transferee, (i) occupies space in the Project at the time of
the request for consent, (ii) is negotiating with Landlord to lease space in the
Project at such time, or (iii) has negotiated with Landlord during the twelve
(12)-month period immediately preceding the Transfer Notice.
     If Landlord consents to any Transfer pursuant to the terms of this
Section 14.2 (and does not exercise any recapture rights Landlord may have under
Section 14.4 of this Lease), Tenant may within six (6) months after Landlord’s
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant
to Landlord pursuant to Section 14.1 of this Lease, provided that if there are
any changes in the terms and conditions from those specified in the Transfer
Notice (i) such that Landlord would initially have been entitled to refuse its
consent to such Transfer under this Section 14.2, or (ii) which would cause the
proposed Transfer to be more favorable to the Transferee than the terms set
forth in Tenant’s original Transfer Notice, Tenant shall again submit the
Transfer to Landlord for its approval and other action under this Article 14
(including Landlord’s right of recapture, if any, under Section 14.4 of this
Lease).
     14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any “Transfer Premium,” as that term is defined
in this Section 14.3, received by Tenant from such Transferee. “Transfer
Premium” shall mean all rent, additional rent or other consideration payable by
such Transferee in excess of the Rent and Additional Rent payable by Tenant
under this Lease on a per rentable square foot basis if less than all of the
Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (i) any reasonable changes, alterations and improvements to the
Premises in connection with the Transfer (but only to the extent approved by
Landlord), and (ii) any reasonable brokerage commissions in connection with the
Transfer (collectively, the “Subleasing Costs”). “Transfer Premium” shall also
include, but not be limited to, key money and bonus money paid by Transferee to
Tenant in connection with such Transfer, and any payment in excess of fair
market value for services rendered by Tenant to Transferee or for assets,
fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee
in connection with such Transfer.
     14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any Transfer
Notice, to recapture the Subject Space. Such recapture notice shall cancel and
terminate this Lease with respect to the Subject Space as of the date stated in
the Transfer Notice as the effective date of the proposed Transfer until the
last day of the term of the Transfer as set forth in the Transfer Notice. If
this Lease shall be canceled with respect to less than the entire Premises, the
Rent reserved herein shall be prorated on the basis of the number of rentable
square feet retained by Tenant in proportion to the number of rentable square
feet contained in the Premises, and this Lease as so amended shall continue
thereafter in full force and effect, and upon request of either party, the
parties shall execute written confirmation of the same. If Landlord declines, or
fails to elect in a timely manner to recapture the Subject Space under this
Section 14.4, then, provided Landlord has consented to the proposed Transfer,
Tenant shall be entitled to proceed to transfer the Subject Space to the
proposed Transferee, subject to provisions of the last paragraph of Section 14.2
of this Lease.
     14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms
and conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, and
(iv) no Transfer relating to this Lease or agreement entered into with respect
thereto, whether with or without Landlord’s consent, shall relieve Tenant or any
guarantor of the Lease from liability under this Lease. Landlord or its
authorized representatives shall have the right at all reasonable times to audit
the books, records and papers of Tenant relating to any Transfer, and shall have
the right to make copies thereof. If the Transfer Premium respecting any
Transfer shall be found understated, Tenant shall, within thirty (30) days after
demand, pay the deficiency and Landlord’s costs of such audit.
     14.6 Additional Transfers. For purposes of this Lease, the term “Transfer”
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of fifty percent (50%) or more of
the partners, or transfer of twenty-five percent or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant, (B) the sale or other transfer
of more than an aggregate of fifty percent (50%) of the voting shares of Tenant
(other than to immediate family members by reason of gift or death), within a
twelve (12)-month period, or (C) the sale, mortgage, hypothecation or pledge of
more than an aggregate of fifty percent (50%) of the value of the unencumbered
assets of Tenant within a twelve (12) month period.

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ARTICLE 15
SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES
     15.1 Surrender of Premises. No act or thing done by Landlord or any agent
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in a writing signed by Landlord. The delivery of keys
to the Premises to Landlord or any agent or employee of Landlord shall not
constitute a surrender of the Premises or effect a termination of this Lease,
whether or not the keys are thereafter retained by Landlord, and notwithstanding
such delivery Tenant shall be entitled to the return of such keys at any
reasonable time upon request until this Lease shall have been properly
terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a
merger, and at the option of Landlord shall operate as an assignment to Landlord
of all subleases or subtenancies affecting the Premises.
     15.2 Removal of Tenant Property by Tenant. Upon the expiration of the Lease
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in as good order and condition as when Tenant took possession and as
thereafter improved by Landlord and/or Tenant, reasonable wear and tear and
repairs which are specifically made the responsibility of Landlord hereunder
excepted. Upon such expiration or termination, Tenant shall, without expense to
Landlord, remove or cause to be removed from the Premises all telephone, data,
and other cabling and wiring (including any cabling and wiring associated with
the Wi-Fi Network, if any) installed or caused to be installed by Tenant
(including any cabling and wiring, installed above the ceiling of the Premises
or below the floor of the Premises), all debris and rubbish, and such items of
furniture, equipment, free-standing cabinet work, and other articles of personal
property owned by Tenant or installed or placed by Tenant at its expense in the
Premises, and such similar articles of any other persons claiming under Tenant,
as Landlord may, in its sole discretion, require to be removed, and Tenant shall
repair at its own expense all damage to the Premises and Building resulting from
such removal.
ARTICLE 16
HOLDING OVER
     If Tenant holds over after the expiration of the Lease Term hereof, with or
without the express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and shall not constitute a renewal hereof or an extension
for any further term, and in such case Base Rent shall be payable at a monthly
rate equal to two hundred percent (200%) of the greater of (i) the Base Rent
applicable during the last rental period of the Lease Term under this Lease, and
(ii) the fair market rental rate of the Premises as of the commencement of such
holdover period. Such month-to-month tenancy shall be subject to every other
term, covenant and agreement contained herein. Landlord hereby expressly
reserves the right to require Tenant to surrender possession of the Premises to
Landlord as provided in this Lease upon the expiration or other termination of
this Lease. The provisions of this Article 16 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein
or at law. If Tenant fails to surrender the Premises upon the termination or
expiration of this Lease, in addition to any other liabilities to Landlord
accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord
harmless from all loss, costs (including reasonable attorneys’ fees) and
liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender, and any lost profits to Landlord resulting
therefrom.
ARTICLE 17
ESTOPPEL CERTIFICATES
     Within ten (10) days following a request in writing by Landlord, Tenant
shall execute and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be in the form as may be required by any
prospective mortgagee or purchaser of the Real Property (or any portion
thereof), indicating therein any exceptions thereto that may exist at that time,
and shall also contain any other information reasonably requested by Landlord or
Landlord’s mortgagee or prospective mortgagee. Tenant shall execute and deliver
whatever other instruments may be reasonably required for such purposes. Failure
of Tenant to timely execute and deliver such estoppel certificate or other
instruments shall constitute an acceptance of the Premises and an acknowledgment
by Tenant that statements included in the estoppel certificate are true and
correct, without exception. Failure by Tenant to so deliver such estoppel
certificate shall be a material default of the provisions of this Lease. In
addition, Tenant shall be liable to Landlord, and shall indemnify Landlord from
and against any loss, cost, damage or expense, incidental, consequential, or
otherwise, including attorneys’ fees, arising or accruing directly or
indirectly, from any failure of Tenant to execute or deliver to Landlord any
such estoppel certificate.
ARTICLE 18
SUBORDINATION
     This Lease is subject and subordinate to all present and future ground or
underlying leases of the Real Property and to the lien of any mortgages or trust
deeds, now or hereafter in force against the Real Property, if any, and to all
renewals, extensions, modifications, consolidations and replacements thereof,
and to all advances made or hereafter to be made upon the security of such
mortgages or trust deeds, unless the holders of such mortgages or trust deeds,
or the lessors under such ground lease or underlying leases, require in writing
that this Lease be superior thereto. Tenant covenants and agrees in the event
any proceedings are brought for the foreclosure of any such

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mortgage, or if any ground or underlying lease is terminated, to attorn, without
any deductions or set-offs whatsoever, to the purchaser upon any such
foreclosure sale, or to the lessor of such ground or underlying lease, as the
case may be, if so requested to do so by such purchaser or lessor, and to
recognize such purchaser or lessor as the lessor under this Lease. Tenant shall,
within five (5) days of request by Landlord, execute such further instruments or
assurances as Landlord may reasonably deem necessary to evidence or confirm the
subordination or superiority of this Lease to any such mortgages, trust deeds,
ground leases or underlying leases. Tenant hereby irrevocably authorizes
Landlord to execute and deliver in the name of Tenant any such instrument or
instruments if Tenant fails to do so, provided that such authorization shall in
no way relieve Tenant from the obligation of executing such instruments of
subordination or superiority. Tenant waives the provisions of any current or
future statute, rule or law which may give or purport to give Tenant any right
or election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.
ARTICLE 19
TENANT’S DEFAULTS; LANDLORD’S REMEDIES
     19.1 Events of Default by Tenant. All covenants and agreements to be kept
or performed by Tenant under this Lease shall be performed by Tenant at Tenant’s
sole cost and expense and without any reduction of Rent. The occurrence of any
of the following shall constitute a default of this Lease by Tenant:
          19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due; or
          19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for fifteen (15) days after written notice
thereof from Landlord to Tenant; provided however, that any such notice shall be
in lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 or any similar or successor law; and provided
further that if the nature of such default is such that the same cannot
reasonably be cured within a fifteen (15)-day period, Tenant shall not be deemed
to be in default if it diligently commences such cure within such period and
thereafter diligently proceeds to rectify and cure said default as soon as
possible; or
          19.1.3 Abandonment or vacation of the Premises by Tenant. Abandonment
is herein defined to include, but is not limited to, any absence by Tenant from
the Premises for three (3) business days or longer while in default of any
provision of this Lease.
     19.2 Landlord’s Remedies Upon Default. Upon the occurrence of any such
default by Tenant, Landlord shall have, in addition to any other remedies
available to Landlord at law or in equity, the option to pursue any one or more
of the following remedies, each and all of which shall be cumulative and
nonexclusive, without any notice or demand whatsoever.
          19.2.1 Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor;
and Landlord may recover from Tenant the following:
               (i) The worth at the time of award of any unpaid rent which has
been earned at the time of such termination; plus
               (ii) The worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
               (iii) The worth at the time of award of the amount by which the
unpaid rent for the balance of the Lease Term after the time of award exceeds
the amount of such rental loss that Tenant proves could have been reasonably
avoided; plus
               (iv) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant’s failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, specifically including but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and
               (v) At Landlord’s election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by applicable
law.
The term “rent” as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Sections 19.2.1(i) and
(ii), above, the “worth at the time of award” shall be computed by allowing
interest at the Interest Rate set forth in Section 4.5 of this Lease. As used in
Section 19.2.1(iii) above, the “worth at the time of award” shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).

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          19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
          19.2.3 Landlord may, but shall not be obligated to, make any such
payment or perform or otherwise cure any such obligation, provision, covenant or
condition on Tenant’s part to be observed or performed (and may enter the
Premises for such purposes). In the event of Tenant’s failure to perform any of
its obligations or covenants under this Lease, and such failure to perform poses
a material risk of injury or harm to persons or damage to or loss of property,
then Landlord shall have the right to cure or otherwise perform such covenant or
obligation at any time after such failure to perform by Tenant, whether or not
any such notice or cure period set forth in Section 19.1 above has expired. Any
such actions undertaken by Landlord pursuant to the foregoing provisions of this
Section 19.2.3 shall not be deemed a waiver of Landlord’s rights and remedies as
a result of Tenant’s failure to perform and shall not release Tenant from any of
its obligations under this Lease.
     19.3 Payment by Tenant. Tenant shall pay to Landlord, within fifteen
(15) days after delivery by Landlord to Tenant of statements therefor: (i) sums
equal to expenditures reasonably made and obligations incurred by Landlord in
connection with Landlord’s performance or cure of any of Tenant’s obligations
pursuant to the provisions of Section 19.2.3 above; and (ii) sums equal to all
expenditures made and obligations incurred by Landlord in collecting or
attempting to collect the Rent or in enforcing or attempting to enforce any
rights of Landlord under this Lease or pursuant to law, including, without
limitation, all legal fees and other amounts so expended. Tenant’s obligations
under this Section 19.3 shall survive the expiration or sooner termination of
the Lease Term.
     19.4 Sublessees of Tenant. Whether or not Landlord elects to terminate this
Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord’s sole discretion, succeed
to Tenant’s interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord’s election to succeed to Tenant’s interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
     19.5 Waiver of Default. No waiver by Landlord of any violation or breach by
Tenant of any of the terms, provisions and covenants herein contained shall be
deemed or construed to constitute a waiver of any other or later violation or
breach by Tenant of the same or any other of the terms, provisions, and
covenants herein contained. Forbearance by Landlord in enforcement of one or
more of the remedies herein provided upon a default by Tenant shall not be
deemed or construed to constitute a waiver of such default. The acceptance of
any Rent hereunder by Landlord following the occurrence of any default, whether
or not known to Landlord, shall not be deemed a waiver of any such default,
except only a default in the payment of the Rent so accepted.
     19.6 Efforts to Relet. For the purposes of this Article 19, Tenant’s right
to possession shall not be deemed to have been terminated by efforts of Landlord
to relet the Premises, by its acts of maintenance or preservation with respect
to the Premises, or by appointment of a receiver to protect Landlord’s interests
hereunder. The foregoing enumeration is not exhaustive, but merely illustrative
of acts which may be performed by Landlord without terminating Tenant’s right to
possession.
ARTICLE 20
SECURITY DEPOSIT
     Landlord is currently holding an existing security deposit as security
under the Existing Lease (defined in Section 24.31), which is currently in the
amount of $166,391.96 (the “Existing Security Deposit”). Tenant hereby grants to
Landlord a security interest in the Existing Security Deposit, as security for
the faithful performance by Tenant of all the terms, covenants, and conditions
of this Lease to be kept and performed by Tenant during the Lease Term, as well
as the Existing Lease. Tenant hereby agrees that upon the expiration or
termination of the Existing Lease, Landlord may continue to hold any unapplied
portion of the Existing Security Deposit under this Lease, notwithstanding
anything to the contrary set forth in the Existing Lease. It is understood and
agreed that, if and to the extent that the Existing Security Deposit is less
than $166,391.96, Tenant shall immediately deposit cash with Landlord, such that
the security deposit hereunder shall total $166,391.96 (the “Security Deposit”).
If Tenant defaults with respect to any provisions of this Lease, including, but
not limited to, the provisions relating to the payment of Rent, Landlord may,
but shall not be required to, use, apply or retain all or any part of the
Security Deposit for the payment of any Rent or any other sum in default, or for
the payment of any amount that Landlord may spend or become obligated to spend
by reason of Tenant’s default, or to compensate Landlord for any other loss or
damage that Landlord may suffer by reason of Tenant’s default. If any portion of
the Security Deposit is so used or applied, Tenant shall, within five (5) days
after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount, and Tenant’s
failure to do so shall be a default under this Lease. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
Security Deposit, or any balance thereof, shall be returned to Tenant, or, at
Landlord’s option, to the last assignee of Tenant’s interest hereunder, within
sixty (60) days following the expiration of the Lease Term. Tenant shall not be
entitled to any interest on the Security Deposit. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, and all other
provisions of law, now or hereafter in force, which provide that Landlord may
claim from a security deposit only those sums reasonably necessary to remedy
defaults in the payment of rent, to

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repair damage caused by Tenant or to clean the Premises, it being agreed that
Landlord may, in addition, claim those sums reasonably necessary to compensate
Landlord for any other loss or damage, foreseeable or unforeseeable, caused by
the act or omission of Tenant or any officer, employee, agent or invitee of
Tenant.
ARTICLE 21
COMPLIANCE WITH LAW
     Tenant shall not do anything or suffer anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall
promptly comply with all such governmental measures, other than the making of
structural changes or changes to the Building’s life safety system (collectively
the “Excluded Changes”) except to the extent such Excluded Changes are required
due to Tenant’s alterations to or manner of use of the Premises. In addition,
Tenant shall fully comply with all present or future programs intended to manage
parking, transportation or traffic in and around the Real Property, and in
connection therewith, Tenant shall take responsible action for the
transportation planning and management of all employees located at the Premises
by working directly with Landlord, any governmental transportation management
organization or any other transportation-related committees or entities. The
judgment of any court of competent jurisdiction or the admission of Tenant in
any judicial action, regardless of whether Landlord is a party thereto, that
Tenant has violated any of said governmental measures, shall be conclusive of
that fact as between Landlord and Tenant.
ARTICLE 22
ENTRY BY LANDLORD
     Landlord reserves the right at all reasonable times and upon reasonable
notice to Tenant to enter the Premises to: (i) inspect them; (ii) show the
Premises to prospective purchasers, mortgagees or tenants, or to the ground or
underlying lessors; (iii) to post notices of nonresponsibility; or (iv) alter,
improve or repair the Premises or the Building if necessary to comply with
current building codes or other applicable laws, or for structural alterations,
repairs or improvements to the Building, or as Landlord may otherwise reasonably
desire or deem necessary. Notwithstanding anything to the contrary contained in
this Article 22, Landlord may enter the Premises at any time, without notice to
Tenant, in emergency situations and/or to perform janitorial or other services
required of Landlord pursuant to this Lease. Any such entries shall be without
the abatement of Rent and shall include the right to take such reasonable steps
as required to accomplish the stated purposes. Tenant hereby waives any claims
for damages or for any injuries or inconvenience to or interference with
Tenant’s business, lost profits, any loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby. For each of the above purposes,
Landlord shall at all times have a key with which to unlock all the doors in the
Premises, excluding Tenant’s vaults, safes and special security areas designated
in advance by Tenant. In an emergency, Landlord shall have the right to enter
without notice and use any means that Landlord may deem proper to open the doors
in and to the Premises. Any entry into the Premises in the manner hereinbefore
described shall not be deemed to be a forcible or unlawful entry into, or a
detainer of, the Premises, or an actual or constructive eviction of Tenant from
any portion of the Premises.
ARTICLE 23
TENANT PARKING
     Tenant shall rent throughout the Lease Term the number of parking passes
set forth in Section 11 of the Summary, located in those portions of the Parking
Facilities as may be designated by Landlord from time to time. Tenant shall pay
to Landlord for the use of such parking passes, on a monthly basis, the
prevailing rate charged from time to time by Landlord or Landlord’s parking
operator for parking passes in the Parking Facilities where such parking passes
are located, which rates are currently $120.00 per unreserved parking pass per
month, and $190.00 per reserved parking pass per month. Tenant’s continued right
to use the parking passes is conditioned upon Tenant abiding by all rules and
regulations which are prescribed from time to time for the orderly operation and
use of the Parking Facilities and upon Tenant’s cooperation in seeing that
Tenant’s employees and visitors also comply with such rules and regulations. In
addition, Landlord may assign any parking spaces and/or make all or a portion of
such spaces reserved or institute an attendant-assisted tandem parking program
and/or valet parking program if Landlord determines in its sole discretion that
such is necessary or desirable for orderly and efficient parking. Landlord
specifically reserves the right, from time to time, to change the size,
configuration, design, layout, location and all other aspects of the Parking
Facilities, and Tenant acknowledges and agrees that Landlord, from time to time,
may, without incurring any liability to Tenant and without any abatement of Rent
under this Lease temporarily close-off or restrict access to the Parking
Facilities, or temporarily relocate Tenant’s parking spaces to other parking
structures and/or surface parking areas within a reasonable distance from the
Parking Facilities, for purposes of permitting or facilitating any such
construction, alteration or improvements or to accommodate or facilitate
renovation, alteration, construction or other modification of other improvements
or structures located on the Real Property. Landlord may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to Landlord. The
parking rates charged by Landlord for Tenant’s parking passes shall be exclusive
of any parking tax or other charges imposed by governmental authorities in
connection with the use of such parking, which taxes and/or charges shall be
paid directly by Tenant or the parking users, or, if directly imposed against
Landlord, Tenant shall reimburse Landlord for all such taxes and/or charges
within ten (10) days after Tenant’s receipt of the invoice from Landlord. The
parking passes provided to Tenant pursuant to this Article 23 are provided
solely for use by Tenant’s own personnel and such passes may not be transferred,
assigned, subleased or otherwise alienated by Tenant without Landlord’s prior
approval.

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ARTICLE 24
MISCELLANEOUS PROVISIONS
     24.1 Terms; Captions. The necessary grammatical changes required to make
the provisions hereof apply either to corporations or partnerships or
individuals, men or women, as the case may require, shall in all cases be
assumed as though in each case fully expressed. The captions of Articles and
Sections are for convenience only and shall not be deemed to limit, construe,
affect or alter the meaning of such Articles and Sections.
     24.2 Binding Effect. Each of the provisions of this Lease shall extend to
and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Article 14 of this Lease.
     24.3 No Waiver. No waiver of any provision of this Lease shall be implied
by any failure of a party to enforce any remedy on account of the violation of
such provision, even if such violation shall continue or be repeated
subsequently, any waiver by a party of any provision of this Lease may only be
in writing, and no express waiver shall affect any provision other than the one
specified in such waiver and that one only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant’s right of possession hereunder or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.
     24.4 Modification of Lease; Financials. Should any current or prospective
mortgagee or ground lessor for the Real Property require a modification or
modifications of this Lease, which modification or modifications will not cause
an increased cost or expense to Tenant or in any other way materially and
adversely change the rights and obligations of Tenant hereunder, then and in
such event, Tenant agrees that this Lease may be so modified and agrees to
execute whatever documents are required therefor and deliver the same to
Landlord within ten (10) days following the request therefor. Should Landlord or
any such current or prospective mortgagee or ground lessor require execution of
a short form of Lease for recording, containing, among other customary
provisions, the names of the parties, a description of the Premises and the
Lease Term, Tenant agrees to execute such short form of Lease and to deliver the
same to Landlord within ten (10) days following the request therefor. In
addition, upon request from time to time, Tenant agrees to provide to Landlord,
within ten (10) days of written request, current financial statements for
Tenant, dated no earlier than one (1) year prior to such request, certified as
accurate by Tenant or, if available, audited financial statements prepared by an
independent certified public accountant with copies of the auditor’s statement.
If any Guaranty is executed in connection with this Lease, Tenant also agrees to
deliver to Landlord, within ten (10) days of written request, current financial
statements of the Guarantor in a form consistent with the above criteria. All
such financial statements will be delivered to Landlord and any such lender or
purchaser in confidence and shall only be used for purposes of evaluating the
financial strength of Tenant or of Guarantor, as applicable.
     24.5 Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has
the right to transfer all or any portion of its interest in the Real Property,
the Building and/or in this Lease, and Tenant agrees that in the event of any
such transfer, Landlord shall automatically be released from all liability under
this Lease and Tenant agrees to look solely to such transferee for the
performance of Landlord’s obligations hereunder after the date of transfer. The
liability of any transferee of Landlord shall be limited to the interest of such
transferee in the Real Property and such transferee shall be without personal
liability under this Lease, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant. Tenant further acknowledges that Landlord may assign its interest
in this Lease to a mortgage lender as additional security and agrees that such
an assignment shall not release Landlord from its obligations hereunder and that
Tenant shall continue to look to Landlord for the performance of its obligations
hereunder.
     24.6 Prohibition Against Recording. Except as provided in Section 24.4 of
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant, and the recording thereof in violation of this
provision shall make this Lease null and void at Landlord’s election.
     24.7 Landlord’s Title; Air Rights. Landlord’s title is and always shall be
paramount to the title of Tenant. Nothing herein contained shall empower Tenant
to do any act which can, shall or may encumber the title of Landlord. No rights
to any view or to light or air over any property, whether belonging to Landlord
or any other person, are granted to Tenant by this Lease.
     24.8 Tenant’s Signs. Landlord shall provide space on the Building directory
on the ground floor lobby of the Building for a listing identifying Tenant’s
name and suite number. Landlord shall also install near the entry door to the
Leased Premises signage identifying Tenant’s name. All such permitted signage
shall use Building standard materials and lettering. Landlord shall pay for the
cost of the initial installation of such permitted signage, and Tenant shall pay
for the cost of any changes thereto. Except for such identification signs,
Tenant may not install any signs on the exterior or roof of the Building or the
common areas of the Building or the Real Property. Any signs, window coverings,
or blinds (even if the same are located behind the Landlord approved window
coverings for the Building), or other items visible from the exterior of the
Premises or Building are subject to the prior approval of Landlord, in its sole
and absolute discretion.

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     24.9 Relationship of Parties. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
     24.10 Application of Payments. Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant’s
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
     24.11 Time of Essence. Time is of the essence of this Lease and each of its
provisions.
     24.12 Partial Invalidity. If any term, provision or condition contained in
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
     24.13 No Warranty. In executing and delivering this Lease, Tenant has not
relied on any representation, including, but not limited to, any representation
whatsoever as to the amount of any item comprising Additional Rent or the amount
of the Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the Exhibits attached hereto.
     24.14 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to an amount which is equal to the interest of Landlord in the Real Property,
and neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant.
     24.15 Entire Agreement. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease and this Lease
supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and
any side letter or separate agreement executed by Landlord and Tenant in
connection with this Lease and dated of even date herewith contain all of the
terms, covenants, conditions, warranties and agreements of the parties relating
in any manner to the rental, use and occupancy of the Premises, shall be
considered to be the only agreement between the parties hereto and their
representatives and agents, and none of the terms, covenants, conditions or
provisions of this Lease can be modified, deleted or added to except in writing
signed by the parties hereto. All negotiations and oral agreements acceptable to
both parties have been merged into and are included herein. There are no other
representations or warranties between the parties, and all reliance with respect
to representations is based totally upon the representations and agreements
contained in this Lease.
     24.16 Right to Lease. Landlord reserves the absolute right to effect such
other tenancies in the Building and/or in any other building and/or any other
portion of the Real Property as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Real Property.
Tenant does not rely on the fact, nor does Landlord represent, that any specific
tenant or type or number of tenants shall, during the Lease Term, occupy any
space in the Building or Real Property.
     24.17 Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease and except with respect to Tenant’s obligations under the
Tenant Work Letter (collectively, the “Force Majeure”), notwithstanding anything
to the contrary contained in this Lease, shall excuse the performance of such
party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party’s performance caused by a Force Majeure.
     24.18 Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and
for all those claiming under Tenant all right now or hereafter existing to
redeem by order or judgment of any court or by any legal process or writ,
Tenant’s right of occupancy of the Premises after any termination of this Lease.
     24.19 Notices. All notices, demands, statements or communications
(collectively, “Notices”) given or required to be given by either party to the
other hereunder shall be in writing, shall be sent by United States certified or
registered mail, postage prepaid, return receipt requested, or delivered
personally (i) to Tenant at the appropriate address set forth in Section 5 of
the Summary, or to such other place as Tenant may from time to time designate in
a Notice to Landlord; or (ii) to Landlord at the addresses set forth in
Section 3 of the Summary, or to such other firm or to such other place as
Landlord may from time to time designate in a Notice to Tenant. Any Notice will
be deemed given on the date it is mailed as provided in this Section 24.19 or
upon the date personal delivery is made. If Tenant is notified of the identity
and address of Landlord’s mortgagee or ground or underlying lessor, Tenant shall
give to such mortgagee or ground or underlying lessor written notice of any
default by Landlord under the terms of

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this Lease by registered or certified mail, and such mortgagee or ground or
underlying lessor shall be given a reasonable opportunity to cure such default
prior to Tenant’s exercising any remedy available to Tenant.
     24.20 Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.
     24.21 Authority. If Tenant is a corporation or partnership, each individual
executing this Lease on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and existing entity qualified to do business in the
state in which the Real Property is located and that Tenant has full right and
authority to execute and deliver this Lease and that each person signing on
behalf of Tenant is authorized to do so. Tenant confirms that it is not in
violation of any executive order or similar governmental regulation or law,
which prohibits terrorism or transactions with suspected or confirmed terrorists
or terrorist entities or with persons or organizations that are associated with,
or that provide any form of support to, terrorists. Tenant further confirms that
it will comply throughout the Term of this Lease, with all governmental laws,
rules or regulations governing transactions or business dealings with any
suspected or confirmed terrorists or terrorist entities, as identified from time
to time by the U.S. Treasury Department’s Office of Foreign Assets Control or
any other applicable governmental entity.
     24.22 Jury Trial; Attorneys’ Fees. IF EITHER PARTY COMMENCES LITIGATION
AGAINST THE OTHER FOR THE SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR
THE BREACH HEREOF OR OTHERWISE FOR ENFORCEMENT OF ANY REMEDY HEREUNDER, THE
PARTIES HERETO AGREE TO AND HEREBY DO WAIVE ANY RIGHT TO A TRIAL BY JURY. In the
event of any such commencement of litigation, the prevailing party shall be
entitled to recover from the other party such costs and reasonable attorneys’
fees as may have been incurred, including any and all costs incurred in
enforcing, perfecting and executing such judgment.
     24.23 Governing Law. This Lease shall be construed and enforced in
accordance with the laws of the state in which the Real Property is located.
     24.24 Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or an option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.
     24.25 Brokers. Landlord and Tenant hereby warrant to each other that they
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the “Brokers”), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, and costs and expenses (including
without limitation reasonable attorneys’ fees) with respect to any leasing
commission or equivalent compensation alleged to be owing on account of the
indemnifying party’s dealings with any real estate broker or agent other than
the Brokers.
     24.26 Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord’s expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord; provided, however, that the foregoing shall in no
way impair the right of Tenant to commence a separate action against Landlord
for any violation by Landlord of the provisions hereof so long as notice is
first given to Landlord and any holder of a mortgage or deed of trust covering
the Building, Real Property or any portion thereof, of whose address Tenant has
theretofore been notified, and an opportunity is granted to Landlord and such
holder to correct such violations as provided above.
     24.27 Building Name and Signage. Landlord shall have the right at any time
to change the name(s) of the Building and Real Property and to install, affix
and maintain any and all signs on the exterior and on the interior of the
Building and any portion of the Real Property as Landlord may, in Landlord’s
sole discretion, desire. Tenant shall not use the names of the Building or Real
Property or use pictures or illustrations of the Building or Real Property in
advertising or other publicity, without the prior written consent of Landlord.
     24.28 Confidentiality. Tenant acknowledges that the content of this Lease
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant’s financial,
legal, and space planning consultants.
     24.29 Landlord’s Construction. It is specifically understood and agreed
that Landlord has no obligation and has made no promises to alter, remodel,
improve, renovate, repair or decorate the Premises, Building, Real Property, or
any part thereof and that no representations or warranties respecting the
condition of the Premises, the Building or the Real Property have been made by
Landlord to Tenant, except as specifically set forth in this Lease. Tenant
acknowledges that prior to and during the Lease Term, Landlord (and/or any
common area association) will be completing construction and/or demolition work
pertaining to various portions of the Building, Premises, and/or Real Property,
including without limitation the Parking Facilities, landscaping and tenant
improvements for premises for other tenants and, at Landlord’s sole election,
such other buildings, parking facilities, improvements, landscaping and other
facilities within or as part of the Project as Landlord (and/or such common area
association) shall from time to time desire (collectively, the “Construction”).
In connection with such Construction, Landlord may, among other things, erect
scaffolding or other necessary structures in the Building, limit or eliminate
access to portions of the Real Property, including portions of the common areas,
or perform work in the Building and/or Real

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Property, which work may create noise, dust or leave debris in the Building
and/or Real Property. Tenant hereby agrees that such Construction and Landlord’s
actions in connection with such Construction shall in no way constitute a
constructive eviction of Tenant nor entitle Tenant to any abatement of Rent.
Landlord shall have no responsibility or for any reason be liable to Tenant for
any direct or indirect injury to or interference with Tenant’s business arising
from such Construction, nor shall Tenant be entitled to any compensation or
damages from Landlord for loss of the use of the whole or any part of the
Premises or of Tenant’s personal property or improvements resulting from such
Construction or Landlord’s actions in connection with such Construction, or for
any inconvenience or annoyance occasioned by such Construction or Landlord’s
actions in connection with such Construction.
     24.30 Substitution of Other Premises. With respect only to portions of the
Premises which do not constitute a full floor of the Building (“Partial Floor
Premises”), Landlord shall have the right to move such Partial Floor Premises to
other space in the Project which is (i) contiguous to the Premises (subject to
availability as determined by Landlord), and (ii) comparable in size (subject to
availability as determined by Landlord) to the Partial Floor Premises, and all
terms hereof shall apply to the new space with equal force. In such event,
Landlord shall give Tenant prior notice of Landlord’s election to so relocate
Tenant, and shall move Tenant’s effects to the new space at Landlord’s sole cost
and expense at such time and in such manner as to inconvenience Tenant as little
as reasonably practicable. The new space shall be delivered to Tenant with
improvements substantially similar to those improvements existing in the
Premises at the time of Landlord’s notification to Tenant of the relocation.
Simultaneously with such relocation of the Partial Floor Premises, the parties
shall immediately execute an amendment to this Lease stating the relocation of
the Partial Floor Premises. In the event Tenant is relocated to new space
pursuant to this Section 24.30, Landlord shall be responsible for all reasonable
costs associated with the relocation (i.e., re-printing costs for stationery and
business cards, and telecommunication re-wiring and connectivity in the new
space), subject to Landlord’s prior approval of such costs before they are
incurred. In no event will the Partial Floor Premises be relocated to space
below the sixth (6th) floor of the Building.
     24.31 Termination of Existing Lease. Tenant currently occupies the Premises
pursuant to that certain Office Lease dated as of April 1, 1996, as amended by
that certain Amendment to Office Lease dated as of February 10, 1997, that
certain Second Amendment to Office Lease dated as of July 11, 1997, that certain
Third Amendment to Office Lease dated as of August 17, 1999, that certain
Amendment to Lease dated as of August 9, 2002, that certain Fourth Amendment to
Office Lease (Amending the Seventh Floor Lease) and Second Amendment to Lease
(Amending the Fifth Floor Lease) dated as of March 19, 2003, that certain Fifth
Amendment to Office Lease dated as of October 27, 2003, that certain Sixth
Amendment to Office Lease dated as of November 18, 2004, and that certain
Seventh Amendment to Office Lease dated as of April ___, 2006, by and between
Landlord and Tenant (collectively, as amended, the “Existing Lease”). Prior to
the Lease Commencement Date, Tenant shall continue to occupy the Premises and
perform all its obligations under each of the terms and conditions of the
Existing Lease, it being acknowledged that the term thereof expires January 31,
2008. Upon the Lease Commencement Date, the Existing Lease shall terminate for
all purposes, except that Tenant shall be responsible for any liabilities or
obligations which specifically survive the termination of the Existing Lease in
accordance with its terms. This Lease shall govern with respect to Tenant’s
occupancy of the Premises from and after the Lease Commencement Date.
     Fitness Facility. Subject to the terms of this Section 24.32, Landlord
agrees to maintain an exercise room in the Building in a manner consistent with
the exercise room currently existing at the Building and used by tenants and
occupants of the Building (such exercise room or reasonable replacement thereof,
the “Exercise Room”). The Exercise Room will be for the non-exclusive use by
Landlord, Tenant and other permitted users, including other tenants and
occupants of the Building and Tenant and its invitees may use such facility at
no cost to Tenant in accordance with this Section 24.32 and such reasonable
rules and regulations as Landlord may from time to time promulgate. Tenant
agrees that (i) it will instruct all of its officers, agents, employees, guests,
and invitees that use of the Exercise Room is at their own risk; and
(ii) Landlord shall not be liable for any injuries or damages resulting from use
of the Exercise Room. Landlord reserves the right to refuse access to such
Exercise Room in the event of any breach or violation of Landlord’s rules and
regulations concerning use of the Exercise Room, or any other default under the
terms of the Lease. All users of the Exercise Room shall sign a release, waiver
and indemnification in form acceptable to Landlord prior to admittance to the
Exercise Room. Notwithstanding the foregoing, Landlord shall not be required to
continue to maintain the Exercise Room if (a) the maintenance or operation of
the Exercise Room in its current manner of operation does not comply with laws,
rules or regulations, (b) Landlord’s insurers or lenders prohibit the operation
of the Exercise Room, or (c) Landlord determines, using Landlord’s commercially
reasonable judgment, that maintaining the Exercise Room is cost prohibitive or
results in an unreasonable operating expense, presents an unreasonable danger or
hazard to the tenants or occupants of the Building.
(SIGNATURES ON NEXT PAGE)

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

                          “Landlord”:

LEGACY PARTNERS I RIVERPARK I, LLC,
a Delaware limited liability company, as Owner    
 
                        By:       Legacy Partners Commercial, L.P.,
a California limited partnership,
as Property Manager and Agent for Owner    
 
                   
 
      By:       Legacy Partners Commercial, Inc., General Partner    
 
                   
 
          By:        
 
             
 
   
 
          Debra Smith    
 
          Its: Executive Vice President    

                      “Tenant”:

PDF SOLUTIONS, INC.,
a Delaware corporation    
 
               
 
  By:                          
 
      Name:        
 
      Its:  
 
   
 
         
 
   
 
               
 
  By:                          
 
      Name:        
 
      Its:  
 
   
 
         
 
   

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

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EXHIBIT A
OUTLINE OF FLOOR PLAN OF PREMISES
SUITE 500
(PICTURE) [f37721f3772108.gif]
TENANT’S INITIALS HERE:                      
EXHIBIT A

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OUTLINE OF FLOOR PLAN OF PREMISES
SUITE 700
(PICTURE) [f37721f3772109.gif]
TENANT’S INITIALS HERE:                    
EXHIBIT A

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OUTLINE OF FLOOR PLAN OF PREMISES
SUITE 1000
(PICTURE) [f37721f3772110.gif]
TENANT’S INITIALS HERE:                    
EXHIBIT A

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OUTLINE OF FLOOR PLAN OF PREMISES
SUITE 1080
(PICTURE) [f37721f3772111.gif]
TENANT’S INITIALS HERE:                    
EXHIBIT A

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EXHIBIT A-1
SITE PLAN OF REAL PROPERTY
(PICTURE) [f37721f3772112.gif]
TENANT’S INITIALS HERE:                    
EXHIBIT A-1

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EXHIBIT B
TENANT WORK LETTER
     This Tenant Work Letter (“Tenant Work Letter”) shall set forth the terms
and conditions relating to the construction of the Premises. All references in
this Tenant Work Letter to the “Lease” shall mean the relevant portions of the
Lease to which this Tenant Work Letter is attached as Exhibit B.
SECTION 1
BASE, SHELL AND CORE
     Tenant hereby accepts the base, shell and core (i) of the Premises and
(ii) of the floor(s) of the Building on which the Premises are located
(collectively, the “Base, Shell and Core”), in its current “AS-IS” condition
existing as of the date of the Lease and the Lease Commencement Date. Except for
the Tenant Improvement Allowance set forth below, Landlord shall not be
obligated to make or pay for any alterations or improvements to the Premises,
the Building, the Project or the Real Property.
SECTION 2
TENANT IMPROVEMENTS
     2.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time
tenant improvement allowance (the “Tenant Improvement Allowance”) in the amount
of up to, but not exceeding $5.00 per rentable square foot of the Premises
(i.e., up to $248,945.00 based on 49,789 rentable square feet of the Premises),
for the costs relating to the initial design and construction of Tenant’s
improvements which are permanently affixed to the Premises (the “Tenant
Improvements”); provided, however, that Landlord shall have no obligation to
disburse all or any portion of the Tenant Improvement Allowance to Tenant unless
Tenant makes a request for disbursement pursuant to the terms and conditions of
Section 2.2 below prior to that date which is eighteen (18) months after the
Lease Commencement Date. In no event shall Landlord be obligated to make
disbursements pursuant to this Tenant Work Letter in a total amount which
exceeds the Tenant Improvement Allowance. Tenant shall not be entitled to
receive any cash payment or credit against Rent or otherwise for any unused
portion of the Tenant Improvement Allowance which is not used to pay for the
Tenant Improvement Allowance Items (as such term is defined below).
     2.2 Disbursement of the Tenant Improvement Allowance.
          2.2.1 Tenant Improvement Allowance Items. Except as otherwise set
forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord only for the following items and costs (collectively, the
“Tenant Improvement Allowance Items”):
               2.2.1.1 payment of the fees of the “Architect” and the
“Engineers,” as those terms are defined in Section 3.1 of this Tenant Work
Letter, and payment of the fees incurred by, and the cost of documents and
materials supplied by, Landlord and Landlord’s consultants in connection with
the preparation and review of the “Construction Drawings,” as that term is
defined in Section 3.1 of this Tenant Work Letter;
               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, contractors’ fees and general conditions, testing
and inspection costs, costs of utilities, trash removal, parking and hoists, and
the costs of after-hours freight elevator usage.
               2.2.1.4 the cost of any changes in the Base, Shell and Core work
when such changes are required by the Construction Drawings (including if such
changes are due to the fact that such work is prepared on an unoccupied basis),
such cost to include all direct architectural and/or engineering fees and
expenses incurred in connection therewith;
               2.2.1.5 the cost of any changes to the Construction Drawings or
Tenant Improvements required by applicable laws ;
               2.2.1.6 sales and use taxes and Title 24 fees;
               2.2.1.7 amounts owed to Landlord pursuant to Section 4.2.2.2 of
this Tenant Work Letter; and
               2.2.1.8 all other costs to be expended by Landlord in connection
with the construction of the Tenant Improvements, including the costs for paint
and carpet.
          2.2.2 Disbursement of Tenant Improvement Allowance. Subject to
Section 2.1 above, during the construction of the Tenant Improvements, Landlord
shall make monthly disbursements of the Tenant Improvement Allowance for Tenant
Improvement Allowance Items for the benefit of Tenant and shall authorize the
release of monies for the benefit of Tenant as follows:
EXHIBIT B

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               2.2.2.1 Disbursements. In order to obtain disbursement of the
Tenant Improvement Allowance (which Tenant may request in one or more
disbursements), Tenant shall deliver to Landlord a request for disbursement,
including evidence of payment of the “Contractor”, as that term is defined in
Section 4.1 below, together with a schedule of the work represented by such
payment; (ii) evidence of payment of invoices to any of “Tenant’s Agents,” as
that term is defined in Section 4.1.2 below, for labor rendered and materials
delivered to the Premises; (iii) executed mechanic’s lien releases from all of
Tenant’s Agents which shall comply with the appropriate provisions, as
reasonably determined by Landlord, of California Civil Code Section 3262(d); and
(iv) all other information reasonably requested by Landlord. Tenant’s request
for payment shall be deemed Tenant’s acceptance and approval of the work
furnished and/or the materials supplied as set forth in Tenant’s payment
request. Within thirty (30) days following Tenant’s submission of the foregoing,
Landlord shall disburse to Tenant by check the amount of the Tenant Improvement
Allowance expended by Tenant for Tenant Improvement Allowance Items (not to
exceed the available balance of the Tenant Improvement Allowance), provided that
Landlord does not dispute any request for payment based on non-compliance of any
work with the “Approved Working Drawings”, as that term is defined in
Section 3.4 below, or due to any substandard work, or for any other reason.
Further, to the extent a ten percent (10%) retention (the aggregate amount of
such retentions to be known as the “Final Retention”) has not been taken into
account in connection with payments made by Tenant to Contractor, Landlord’s
disbursement of the Tenant Improvement Allowance shall take into account such
Final Retention, which will be disbursed pursuant to the terms of
Section 2.2.2.2 below. 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. Tenant confirms that it will only pay
the Final Retention to Contractor following the completion of construction of
the Premises, provided that (i) Tenant has obtained and delivered to Landlord
properly executed mechanics lien releases in compliance with both California
Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or
Section 3262(d)(4), and (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, or any other tenant’s use of such other tenant’s leased premises in
the Building. Landlord will only disburse available funds from the Tenant
Improvement Allowance for the Final Retention once the terms of this
Section 2.2.2.2 are satisfied.
               2.2.2.3 Other Terms. Landlord shall only be obligated to make
disbursements from the Tenant Improvement Allowance to the extent costs are
incurred by Tenant for Tenant Improvement Allowance Items.
          2.2.3 Specifications for Building Standard Components. Landlord has
established specifications (the “Specifications”) for the Building standard
components to be used in the construction of the Tenant Improvements in the
Premises which Specifications have been received by Tenant, and which
Specifications are attached hereto as Schedule 1. Unless otherwise agreed to by
Landlord, the Tenant Improvements shall comply with the Specifications. Landlord
may make changes to the Specifications from time to time.
SECTION 3
CONSTRUCTION DRAWINGS
     3.1 Selection of Architect/Construction Drawings. Tenant shall retain the
architect/space planner (the “Architect”) approved by Landlord, which approval
shall not be unreasonably withheld, to prepare the Construction Drawings. Tenant
shall retain the engineering consultants designated by Landlord (the
“Engineers”) to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and
sprinkler work in the Premises. The plans and drawings to be prepared by
Architect and the Engineers hereunder shall be known collectively as the
“Construction Drawings.” All Construction Drawings shall comply with the drawing
format and specifications reasonably determined by Landlord, and shall be
subject to Landlord’s approval. 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.
     3.2 Final Space Plan. Tenant shall supply Landlord with four (4) copies
signed by Tenant of its final space plan for the Premises before any
architectural working drawings or engineering drawings have been commenced. The
final space plan (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 unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall promptly
(i) cause the Final Space Plan to be revised to correct any deficiencies or
other matters Landlord may reasonably require, and (ii) deliver such revised
Final Space Plan to Landlord.
EXHIBIT B

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     3.3 Final Working Drawings. After the Final Space Plan has been approved by
Landlord and Tenant, Tenant shall promptly cause the Architect and the Engineers
to complete the architectural and engineering drawings for the Premises, and
cause the Architect to 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 for the Tenant Improvements (collectively, the “Final Working
Drawings”), and shall submit the same to Landlord for Landlord’s approval.
Tenant shall supply Landlord with four (4) copies signed by Tenant of such Final
Working Drawings. Landlord shall advise Tenant within five (5) business days
after Landlord’s receipt of the Final Working Drawings for the Premises if the
same is unsatisfactory or incomplete in any respect. If Tenant is so advised,
Tenant shall promptly (i) revise the Final Working Drawings in accordance with
such review and any disapproval of Landlord in connection therewith, and
(ii) deliver such revised Final Working Drawings to Landlord.
     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 Premises by Tenant. After approval by Landlord of the Final
Working Drawings, Tenant shall promptly submit the same to the appropriate
governmental authorities for all applicable building 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 with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent shall not be unreasonably withheld;
provided that Landlord may withhold its consent, in its sole discretion, to any
change in the Approved Working Drawings, if such change would result in an
Over-Allowance Cap (as defined below).
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
     4.1 Tenant’s Selection of Contractor and Tenant’s Agents.
          4.1.4 The Contractor. A general contractor shall be retained by Tenant
to construct the Tenant Improvements. Such general contractor (“Contractor”)
shall be selected by Tenant from a list of general contractors supplied by
Landlord, and Tenant shall deliver to Landlord notice of its selection of the
Contractor upon such selection.
          4.1.2 Tenant’s Agents. All subcontractors, laborers, materialmen, and
suppliers used by Tenant (such subcontractors, laborers, materialmen, and
suppliers, and the Contractor to be known collectively as “Tenant’s Agents”)
must be approved in writing by Landlord, which approval shall not be
unreasonably withheld or delayed; provided that, in any event, Tenant must
contract with Landlord’s base building subcontractors for any mechanical,
electrical, plumbing, life safety, structural, heating, ventilation, and
air-conditioning work in the Premises. If requested by Landlord, Tenant’s Agents
shall all be union labor in compliance with the master labor agreements existing
between trade unions and the local chapter of the Associated General Contractors
of America.
     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 Contractor (the
“Contract”), Tenant shall submit the Contract to Landlord for its approval,
which approval shall not be unreasonably withheld or delayed. Prior to the
commencement of the construction of the Tenant Improvements, and after Tenant
has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord
with a written detailed cost breakdown (the “Final Costs Statement”), by trade,
of the final costs to be incurred, or which have been incurred, as set forth
more particularly in Section 2.2.1.1 through 2.2.1.8 above, in connection with
the design and construction of the Tenant Improvements to be performed by or at
the direction of Tenant or the Contractor (which costs form a basis for the
amount of the Contract, if any (the “Final Costs”). Prior to the commencement of
construction of the Tenant Improvements, Tenant shall supply Landlord with cash
in an amount (the "Over-Allowance Amount”) by which the Final Costs exceed the
Tenant Improvement Allowance (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). The Over-Allowance
Amount shall be disbursed by Landlord prior to the disbursement of any of the
then remaining portion of the Tenant Improvement Allowance, and such
disbursement shall be pursuant to the same procedure as the Tenant Improvement
Allowance. In the event that, after the Final Costs have been delivered by
Landlord to Tenant, the costs relating to the design and construction of the
Tenant Improvements shall change, any additional costs necessary to such design
and construction in excess of the Final Costs shall, to the extent they exceed
the remaining balance of the Tenant Improvement Allowance, be paid by Tenant to
Landlord immediately as an addition to the Over-Allowance Amount and, in any
event, prior to the commencement of the construction of such changes, or, at
Landlord’s option, Tenant shall make payments for such additional costs out of
its own funds, but Tenant shall continue to provide Landlord with the documents
described in Sections 2.2.2.1(i), (ii), (iii) and (iv) above, for Landlord’s
approval, prior to Tenant paying such costs. Notwithstanding anything above to
the contrary, if upon Tenant’s delivery of the Final Costs Statement to
Landlord, the Over-Allowance Amount is determined to be greater than an amount
equal to twenty-five percent (25%) of the Tenant Improvement Allowance (the
"Over-Allowance Cap”), then Landlord, in Landlord’s sole discretion, shall have
the right to require that Tenant revise the Approved Working Drawings and/or any
other Construction Drawings (and resubmit the same to Landlord for Landlord’s
approval) to reduce the Over-Allowance Amount to an amount less than the
Over-Allowance Cap and Landlord may refuse to disburse any portion of the Tenant
Improvement Allowance and/or approve any changes to the
EXHIBIT B

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Construction Drawings, until such revisions to the Approved Working Drawings
and/or any other Construction Drawings are made by Tenant and approved by
Landlord.
          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 Agents’ construction of the
Tenant Improvements shall comply with the following: (i) the Tenant Improvements
shall be constructed in strict accordance with the Approved Working Drawings;
(ii) Tenant and Tenant’s Agents shall not, in any way, interfere with, obstruct,
or delay, the work of Landlord’s base building contractor and subcontractors
with respect to the Base, Shell and Core or any other work in the Building or
Real Property; (iii) Tenant’s Agents shall submit schedules of all work relating
to the Tenant’s Improvements to Contractor and Contractor shall, within five
(5) business days of receipt thereof, inform Tenant’s Agents of any changes
which are necessary thereto, and Tenant’s Agents shall adhere to such corrected
schedule; and (iv) Tenant shall abide by all rules made by Landlord’s Building
contractor or Landlord’s Building manager with respect to the use of freight,
loading dock and service elevators, storage of materials, coordination of work
with the contractors of other tenants, and any other matter in connection with
this Tenant Work Letter, including, without limitation, the construction of the
Tenant Improvements.
               4.2.2.2 Construction Fee. Tenant shall not be obligated to pay a
logistical coordination or construction fee to Landlord in connection with
portions of the Tenant Improvements which do not require the issuance of a
building permit by the applicable governmental agencies. With respect to any
portions of the Tenant Improvements which require the issuance of a building
permit, Tenant agrees to reimburse Landlord for its actual costs incurred in
connection with Landlord’s review and approval of plans and specifications for
such portions of the Tenant Improvements.
               4.2.2.3 Indemnity. Tenant’s indemnity of Landlord as set forth in
the Lease shall also apply with respect to any and all costs, losses, damages,
injuries and liabilities related in any way to any act or omission of Tenant or
Tenant’s Agents, or anyone directly or indirectly employed by any of them, or in
connection with Tenant’s non-payment of any amount arising out of the Tenant
Improvements and/or Tenant’s disapproval of all or any portion of any request
for payment. Such indemnity by Tenant, as set forth in the 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.
               4.2.2.4 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 public liability insurance, including property
damage, all with limits, in form and with companies as are required to be
carried by Tenant as set forth in the Lease.
                    4.2.2.4.2  Special Coverages. Tenant shall carry “Builder’s
All Risk” insurance in an amount approved by Landlord 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 the 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, and in form and with companies as are
required to be carried by Tenant as set forth in the 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
Contractor’s equipment is moved onto the site. 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. 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. All policies carried under this Section 4.2.2.4 shall insure
Landlord and Tenant, as their interests may appear, as well as Contractor and
Tenant’s Agents, and shall name as additional insureds Landlord’s Property
Manager, Landlord’s Asset Manager, and all mortgagees and ground lessors of the
Building. 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 under Section 4.2.2.3 of this Tenant Work
Letter.
          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. Landlord shall have the right 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
disapprove any portion of the Tenant
EXHIBIT B

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Improvements, Landlord shall notify Tenant in writing of such disapproval and
shall specify the items disapproved. Any defects or deviations in, and/or
disapproval by Landlord of, the Tenant Improvements shall be rectified by Tenant
at no expense to Landlord, provided however, that in the event Landlord
determines that a defect or deviation exists or disapproves of any matter in
connection with any portion of the Tenant Improvements and such defect,
deviation or matter might adversely affect the mechanical, electrical, plumbing,
heating, ventilating and air conditioning or life-safety systems of the
Building, the structure or exterior appearance of the Building or any other
tenant’s use of such other tenant’s leased premises, Landlord may, take such
action as Landlord deems necessary, at Tenant’s expense and without incurring
any liability on Landlord’s part, to correct any such defect, deviation and/or
matter, including, without limitation, causing the cessation of performance of
the construction of the Tenant Improvements until such time as the defect,
deviation and/or matter is corrected to Landlord’s satisfaction.
          4.2.5 Meetings. Commencing upon the execution of the Lease, Tenant
shall hold weekly meetings at a reasonable time, with the Architect and the
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 designated by Landlord, and Landlord and/or its agents shall receive
prior notice of, and shall have the right to attend, all such meetings, and,
upon Landlord’s request, certain of Tenant’s Agents shall attend such meetings.
In addition, minutes shall be taken at all such meetings, a copy of which
minutes shall be promptly delivered to Landlord. One such meeting each month
shall include the review of Contractor’s current request for payment.
     4.3 Notice of Completion; Copy of “As Built” Plans. Within ten (10) 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 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do
so, Landlord may execute and file the same on behalf of Tenant as Tenant’s agent
for such purpose, at Tenant’s sole cost and expense. At the conclusion of
construction, (i) Tenant shall cause the Architect and Contractor (A) to update
the Approved 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
the Lease, (C) to deliver to Landlord two (2) sets of sepias of such as-built
drawings within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (D) to deliver to Landlord a computer disk
containing the Approved Working Drawings in AutoCAD format, and (ii) Tenant
shall deliver to Landlord a copy of all warranties, guaranties, and operating
manuals and information relating to the improvements, equipment, and systems in
the Premises.
     4.4 Coordination by Tenant’s Agents with Landlord. Upon Tenant’s delivery
of the Contract to Landlord under Section 4.2.1 of this Tenant Work Letter,
Tenant shall furnish Landlord with a schedule setting forth the projected date
of the completion of the Tenant Improvements and showing the critical time
deadlines for each phase, item or trade relating to the construction of the
Tenant Improvements.
SECTION 5
MISCELLANEOUS
     5.1 Tenant’s Representative. Tenant has designated Steve Melman as its sole
representative with respect to the matters set forth in this Tenant Work Letter,
who shall have full authority and responsibility to act on behalf of the Tenant
as required in this Tenant Work Letter.
     5.2 Landlord’s Representative. Landlord has designated Elva Guitron as its
sole representative with respect to the matters set forth in this Tenant Work
Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
     5.3 Time of the Essence in This Tenant Work Letter. Unless otherwise
indicated, all references herein to a “number of days” shall mean and refer to
calendar days. If any item requiring approval is timely disapproved by Landlord,
the procedure for preparation of the document and approval thereof shall be
repeated until the document is approved by Landlord.
     5.4 Tenant’s Lease Default. Notwithstanding any provision to the contrary
contained in the Lease, if an event of default by Tenant of this Tenant Work
Letter or the Lease has occurred at any time on or before the substantial
completion of the Premises, then (i) in addition to all other rights and
remedies granted to Landlord pursuant to the Lease, at law and/or in equity,
Landlord shall have the right to withhold payment of all or any portion of the
Tenant Improvement Allowance and/or Landlord may cause Contractor to cease the
construction of the Premises (in which case, Tenant shall be responsible for any
delay in the substantial completion of the Premises caused by such work
stoppage), and (ii) all other obligations of Landlord under the terms of this
Tenant Work Letter shall be forgiven until such time as such default is cured
pursuant to the terms of the Lease (in which case, Tenant shall be responsible
for any delay in the substantial completion of the Premises caused by such
inaction by Landlord). In addition, if the Lease is terminated prior to the
Lease Commencement Date, for any reason due to a default by Tenant as described
in Section 19.1 of the Lease or under this Tenant Work Letter, in addition to
any other remedies available to Landlord under the Lease, at law and/or in
equity, Tenant shall pay to Landlord, as Additional Rent under the Lease, within
five (5) days of receipt of a statement therefor, any and all costs (if any)
incurred by Landlord (including any portion of the Tenant Improvement Allowance
disbursed by Landlord) and not reimbursed or otherwise paid by Tenant through
the date of such termination in connection with the Tenant Improvements to the
extent planned, installed and/or constructed as of such date of termination,
including, but not limited to, any costs related to the removal of all or any
portion of the Tenant Improvements and restoration costs related thereto.
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    TENANT IMPROVEMENT BUILDING STANDARDS -A   10/19/06

SCHEDULE 1 TO EXHIBIT B
BUILDING STANDARD SPECIFICATIONS
PARTITIONS

A.   DEMISING PARTITION AND CORRIDOR WALLS

  1.   3-5/8” (or match existing)- 20 gauge metal studs — 24” on center maximum
from floor to ceiling grid. (Provide backing for cabinet as required)     2.  
5/8” Type ‘X’ gypsum wallboard one layer each side of studs, fire taped only.  
  3.   Height from floor to ceiling grid.     4.   Seismic bracing per code.    
5.   Two rows of continuous acoustical sealant - bottom tracks. R-11 batt type
fiberglass insulation between studs

  Note:       -   All partitions to be paint finished on smooth surfaces GA-214,
level 5 smoothness.     -   One hour rated walls where required based on
occupancy group.     -   All interior 1-hour corridors to be tunnel construction
in compliance with UBC requirements for one-hour fire rated assembly.

B.   TYPICAL INTERIOR PARTITION (Non rated)

  1.   3-5/8” (or match existing) — 25 gauge metal studs — 24” on center
maximum. (provide backing for wall mounted cabinetry or equipment as required).
    2.   5/8” Type ‘X’ gypsum wallboard one layer each side of studs.     3.  
Height from floor to ceiling grid — approximately 9’-0” or 10’-0” based on
structure cost at all floors; regular ceiling tiles must be scribed     4.  
Seismic bracing per code.     5.   All exterior corners with corner beads. All
exposed edges finished with metal trim.     Note:       -   All partitions to be
paint finished on smooth surfaces GA-214, level 5 smoothness.     -   Partitions
must connect to building mullions or walls. Mechanical fasteners to mullions
shall not be allowed.

C.   PERIMETER DRYWALL (at office areas)

  1.   2-1/2” — 25 gauge metal studs 24” on center to 6” above suspended ceiling
(or as required by Title-24 for full height envelope, refer to demising wall
specification     2.   5/8” Type ‘X’ gypsum wallboard one layer on one side.    
3.   Height — floor slab to 6” above ceiling grid.     4.   All exterior corners
with corner beads.     Note:       -   All partitions to be paint finished on
smooth surfaces GA-214, level 5 smoothness.

D.   COLUMN FURRING

  1.   5/8” Type ‘X’ gypsum wallboard, one layer on 2 1/2” – 25 gauge metal
studs, UNO.     2.   Height — floor slab to 2” above ceiling grid.     3.   All
exterior corners with corner beads.     Note:       -   All partitions to be
paint finished on smooth surfaces GA-214, level 5 smoothness.

E.   INSULATION

  1.   Insulation at all perimeter walls and roof per specifications     2.  
All common area walls including corridor, conference, copy rooms and lunch room
to receive R-11 within partition cavity and four feet on either side of
partition over ceiling at demising wall (if not full height)

F.   FIRE BLOCKING

SCHEDULE 1 TO
EXHIBIT B

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    TENANT IMPROVEMENT BUILDING STANDARDS -A   10/19/06

  1.   2-1/2” 20 Gauge metal studs.     2.   5/8” gypsum wallboard one layer on
one side.     3.   Height-from top of suspended ceiling to structure above as
required by code.     4.   Locate as required by code for the proposed tenant
space plans.

G.   PAINTING

  1.   All gypsum board walls to receive a prime coat (hi-build PVA sealer) and
two (2) coats to cover of ‘carefree’ eggshell finish paint or equal.     2.  
Semi-gloss paint at all kitchens, break rooms, restrooms and server/copy rooms.

DOORS, FRAMES AND HARDWARE
Note: all doors and hardware within existing buildings to match U.O.N.

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

  1.   Interior doors: shall be 3’0” wide x full height x 1 3/4” blind end”
flush doors (unless otherwise specified), solid core, pre-finished with plain
sliced select white maple, book-match with clear sealer. All doors shall be 20
minute fire rated.     2.   (existing condition) Doors shall be pre-finished and
match existing core doors in finish, material and appearance. Finish all edges.
5” top blocking at doors w/closers.     3.   Interior Tenant doorframes to be
prefinished rated Western Integrated frames with factory finish; Color: Satin
Aluminum     4.   Corridor doorframes to Suites to be: Satin Aluminum     5.  
Hardware:

  (a)   Interior Tenant Door

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

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

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

B.   INTERIOR GLAZING

  1.   (a) 1/4” thick clear tempered glass in non-rated, prefinished frames by
Western Integrated frames with aluminum trim. Frame to be factory finished;
Color: Satin Aluminum

(b)1/4 thick clear tempered glass in non-rated, M-121 glass stops; Color: Satin
Aluminum     2.   1/4” thick tempered safety glass where required per code.    
3.   Return gypsum board into opening at both sides, provide metal corner bead
all around opening. Finish to match wall.     2.   Provide two 20 Ga. metal
studs fastened at 12” O.C. back-to-back at jambs and head (minimum) as per
detail. Provide seismic brace per code.

SCHEDULE 1 TO
EXHIBIT B

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    TENANT IMPROVEMENT BUILDING STANDARDS -A   10/19/06

                Note:       - All office doors to have 2’-0” wide by full height
(inside window frame to inside window frame) sidelights where possible. At areas
where less than 2’-0” is available, provide maximum. Sidelight frames to be
integral with doorframes.

SUSPENDED ACOUSTICAL CEILING
Note: Tenant ceiling height at 9’-0” (installed at top of top exterior window
mullion)

  1.   Grid: USG Donn Fineline DXFF Narrow 9/16” face with 1/8” reveal. Finish:
White Matte with white reveal, Suspension System with wire suspension and
seismic bracing per code. Wall angle: M9     2.   Tile: USG 2’x2’x 3/4”
Millennia Tegular White.     3.   Seismic bracing per code.     4.   Seismic
wires for lighting and electrical to be provided by acoustical ceiling
contractor.

WINDOW COVERINGS

  1.   Exterior Window covering – horizontal: 1” mini-blinds as manufactured by
Levelor, series: Riviera Dustguard.     2.   Blinds to be sized to fit inside
window module. Fasten to top horizontal mullions only.     3.   Vertical blinds
to be installed with building shell but costs allocated to tenant improvement
allowance.

FIRE SPRINKLER SYSTEM

  1.   A pre-zoned sprinkler will be provided in all areas. Head locations will
be determined by a pre-zoned master layout. Modification of sprinkler locations
and piping, due to specific tenant layout, will be at tenant’s cost.
Semi-recessed pendent sprinkler heads with white escutcheon. Sprinkler to be
centered in tile.     2.   Fire Sprinkler coverage light hazard, .33 gpm / 3,000
SF in shell and modified per improvement.     4.   Gyp Board Ceilings: Fully
recessed with cap at gypsum board ceiling. Reliable Model F4FR Concealed
automatic sprinkler with 1/2” - 1 1/2” adjustment — White

SIGNAGE
Refer to Landlord
CABINETRY

  1.   6’-0” linear feet of upper and lower millwork allowable by building
standard.
    6.   Plastic laminate horizontal and vertical surfaces.     7.   Horizontal
and Verticals: See individual options under finishes for plastic laminate
specifications     3.   Cabinetry Construction: Designation, APA C-D plugged
with exterior glue, 3/4” thick or 3/4” high pressure particle board. Min.
density 45 PSF, U.N.O.     4.   Cabinetry: Plastic laminate finish, countertops
and splashes shall be constructed in accordance with WIC manual of Millwork,
“Custom” grade.     5.   Hardware:

  a.   Hinges: Self-closing type, fully concealed when the doors are closed.
Shall have independent vertical, horizontal and depth adjustment.
Shall be steel with nickel-plated finish. Hinges shall be one of the following
products:

Brass America, Inc. Nos. 1200/1201
Julius Blum, Inc. No.91.650
Stanley Hardware Nos. 1511-2/1511-9x or equal.

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

SCHEDULE 1 TO
EXHIBIT B

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    TENANT IMPROVEMENT BUILDING STANDARDS -A   10/19/06

  7.   Adjustable Shelf Supports to be hole & pin type, Hafele 282.24.710 5MM
steel pin.     8.   Drawers: Provide heavy-duty 3/4 extension drawer slides.    
9.   Mutes: Clear vinyl dot.     10.   Fasteners and Anchorages: Provide nails,
screws, or other anchoring devices of type, size material and finish suitable
for intended use and required to provide secure     11.   Casework:

  a.   Drawer Boxes: Provide sub-front and applied finish fronts securely
fastened, with square corners and self-edges. Provide drawers with
metal studs.     b.   Doors: Flush overlay type with square corners, and self
edged. Do not notch door, cabinet ends or dividers to receive hinges.     c.  
Shelves: 3/4” thick for spans up to 35” and 1” thick for spans over 35” up to
48” and adjustable to 1” centers. Do not recess metal shelf standards into end
panels; notch shelving to clear standards.

TENANT SUITE FINISH MATERIALS

A.   PAINT       Field Color: Kelly Moore # 20 Western Acoustic (accent colors
within open areas may be used at designer’s discretion approved by Ownership)  
B.   FINISH STANDARD

         
 
  Carpet:   Shaw Contract Group: ‘Java’ or ‘Ripple’
Installation: Direct Glue Down
 
       
 
  Rubber Base:   Johnsonite tight lock wall base #11 Canvas 2 1/2” cove base at
resilient flooring, 2 1/2” straight base at carpet (rolled goods only). Rubber
transition strip between carpet and resilient flooring, Color to match base
 
       
 
  VCT#1:   Armstrong ‘Stonetex Vinyl Composite Tile, Color #52139 Limestone
Beige or #52128 Desert Dust , 12” x 12” x 1/8”
 
       
 
  Plastic Lam.:   Formica #756-58 Natural Maple (base cabinet vertical surfaces)
 
       
 
  Plastic Lam.:   Formica #7022-58 Natural Canvas (horizontal surfaces & upper
cabinets)

HEATING, VENTILATION AND AIR CONDITIONING

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

  A.   Requirements shall be in accordance with title 24 and all other
applicable codes.     B.   CEILING DIFFUSER SPECIFICATION

  a.   Ceiling diffusers shall have perforated face with frame style compatible
with the type of ceiling used. Surface mounted diffusers shall have gaskets to
prevent leakage. Diffuser faceplate shall have concealed hinges and latches.
Face plates shall be easily removable from the frame.     b.   Diffusers shall
be modular core and shall have curved, adjustable blades and shall be capable of
delivering 1-way,2-way,3-way or 360 degree horizontal ceiling pattern and be
adjustable to obtain a down air pattern. Diffuser must have high anti-smudge
characteristics with center aspiration.     c.   Material shall be steel. Finish
shall be Standard White baked enamel.     d.   Supply diffusers shall be Titus
modular core PMC perforated face-size 24”x24” for lay-in ceiling tile.     e.  
Return/Exhaust diffusers shall be Kruger

SCHEDULE 1 TO
EXHIBIT B

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    TENANT IMPROVEMENT BUILDING STANDARDS -A   10/19/06

  f.   Perforated ceiling diffusers shall be tested in accordance with Air
Diffusion Council (ADC) code 10602R4. Sound data for diffusers shall be
calculated in accordance with International Standard ISO 3741 Comparison Method.
    g.   The following manufactures shall be considered equal, providing
corresponding models meet specific requirements. Equivalent substituted
equipment named herein shall be submitted for the Architect’s review. Submit
alternate selections at a time of bid listing major equipment.     h.   Manual
dampers in all drops.

      ITEM   MANUFACTURER
AIR FILTERS
  Kruger
MIXING BOXES
  Kruger
GRILLES
  Kruger

C.   THERMOSTATS       Thermostats shall be provided for each zone. Honeywell
Pneumatic, Model TP970A, 2004       Direct Acting, Range 60° to 90°, Color White
  D.   SUBMITTALS       For Non-Standard Material Lists/Product Data: Within
5-7 days of contract award, and prior to ordering any materials or equipment,
submit for Owner’s review complete material list including catalogue data of
material and products for work in this section.       Note: Install BTU meters
for any condenser water usage at tenant cost.

ELECTRICAL

  1.   GENERAL

  a.   All work, material or equipment shall comply with the codes, ordinance
and regulations of the local government having jurisdiction, including Title 24
and any participating government agencies having jurisdiction.     b.   110V
duplex outlet in demising or interior partitions only, as Manufactured by
Leviton or equal. Color: White     c.   Maximum eight outlets per 20 amps 3
phase 4-wire circuit, spacing to meet code requirements. Minimum 2 per: office(1
quad with drop for voice/data and 1 duplex on opposite wall), conference room,
reception, 2 dedicated over cabinet at break room; junction boxes above ceiling
for large open area with furniture partitions.     d.   Contractors to inspect
electric room and base building Electrical drawings to include all necessary
metering, connections and additional equipment, i.e., panels and transformers,
if needed. Base building provides one (1) power panel and one (1) lighting panel
per electrical room.     e.   Note: Install electric meter for any
above-standard electrical usage at Tenant Cost.

  2.   RACEWAYS

  a.   Conduit shall be rigid galvanized steel(RGS), electrical metallic tubing
(EMT), metal clad (MC) cable, polyvinyl, chloride (PVC), and flexible or liquid
tight flexible conduit.     b.   Type ‘AC’ and ‘NM’ cable are not acceptable.  
  c.   Support per seismic zone 4 requirements.

  3.   WIRING DEVICES

  a.   Receptacles, toggle switches and coverplates shall be white (dedicated-
gray) – Leviton. Mount so that the center of the receptacles is no less than 15”
AFF.     b.   Maximum eight (8) outlets per 20 amp 3 phase 4-wire circuit.
Spacing to meet code requirements. Amounts to be two duplex outlets per small
and three for large private office, storage room and conference room. One
dedicated outlet per copy room; one dedicated 20-amp outlet per telephone panel
and one 20-amp circuit per 200 square foot of open area for workstations.     c.
  All workstation hardwire connections to be building power to be supplied by
tenant.     d.   Transformers to be a minimum of 20% or over required capacity
shall be K-=rated dry type.

SCHEDULE 1 TO
EXHIBIT B

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    TENANT IMPROVEMENT BUILDING STANDARDS -A   10/19/06

  e.   Contractors to inspect electric room and base building electrical
drawings to include all necessary metering and connections.     f.   No aluminum
wiring is acceptable. AC and NM cable is not to be used.     g.   Provide
separate neutrals for each circuit. Use stranded wire for each circuit. Use
copper conductors only, no exception.     h.   Switch assembly to be Leviton.  
  i.   Motion sensors as required by lighting management system and by Title 24.

  4.   TELEPHONE / DATA OUTLETS

  a.   One (1) single box to house phone/data jack with pull string from outlet
box to area above T-bar ceiling with cover plate per office; Two (2) boxes to
house phone/data jack with pull string from outlet box to area above T-bar
ceiling with cover plate per large open area. Cover plate finish required:
white, supplied by tenant’s Telcom contractor. Mount so that the center of the
receptacles is no less than 15” AFF.     b.   One (1) 6’ wide by 4’ high plywood
backboard installed as telephone backboard, brace and secure to wall. Painted to
match wall color. Provide one duplex 20 amp dedicated outlet for phone service
per above electrical specification. Provide 2” conduit from floor main phone
room to six inches (6”) below ceiling at telephone backboard.     c.   Cable
service installation for phone and data outlets by tenant’s telephone/data
vendors at tenant’s cost. Additional outlets and cover plates to be provided by
tenant’s vendors at tenant’s cost. In speculative office suites, contractor to
provide and install blank cover plates.     d.   Telephone panel boards to be
located within tenant space and to be surface mounted.

  5.   TRANSFORMERS

  a.   Transformers shall be UL listed and suitable for the application- NEMA 1
or 3 R.     b.   Transformers shall be 480V (primary) – 20by/120V (secondary),
rated for 80 C rise above an ambient temperature of 40 C.     c.   Support for
seismic zone 4 requirements.     d.   Acceptable manufacturers shall be General
Electric, Cutler-Hammer, Siemens, Square D, or Westinghouse.

  6.   PANEL BOARDS

  a.   Panel boards shall be UL listed and suitable for the application- NEMA 1
or 3R.     b.   All circuit breakers shall be molded case, bolt-on type.     c.
  Support per seismic zone 4 requirements.     d.   Acceptable manufactures
shall be General Electric, Cutler-Hammer, Siemens, Square D, or Westinghouse.

  7.   LIGHT FIXTURES

  a.   Light fixtures shall be 24”x 48”x 3” Parabolic Diffuser with three 32
Watt T8 lamps per fixture size, 1-electronic ballasts. Fixtures shall be
Lightolier DPA-2T18-L-S-332-UNV03-18-29187-000M 277 V with modular wiring and
(1) electronic ballast (Advance Ballast #VEL-3P32-SC). Fixtures shall match
existing in suite with modular wiring and (1) electronic ballast (verify for 2
or 3 lamp fixture requirement based on energy efficiency requirement with
approximately 50 F.C. at desk height).     b.   Support per seismic zone 4
requirements.     c.   Quantities and locations per plans.

  8.   LIGHT CONTROL/SWITCHING         Wall occupancy sensors – Mytec #LP-2-DC  
  9.   EXIT SIGNS

  a.   Edge lite with recessed ceiling mount, floating green letters on a clear
panel with LED Technology, by Dualite or equivalent.     b.   Quantities and
locations per exiting and lighting plans.     c.   Single or double face and
directional arrows per lighting plans.

SCHEDULE 1 TO
EXHIBIT B

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    TENANT IMPROVEMENT BUILDING STANDARDS -A   10/19/06

MISCELLANEOUS

  1.   FIRE CAULKING

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

  2.   PLUMBING

  a.   Shall comply with all local codes and handicapped code requirements.
Fixture shall be: Manufacturer Elkay, ‘Hospitality sin” #BPSR-2317 – stainless
steel, two faucet holes, or equivalent. Faucet: single lever post mount bar
faucet by ‘Elkay’ #LK-4122 or equivalent.     b.   Plumbing bid shall include 5
gallon minimum hot water heater, or insta-hot with mixer valve including all
connections, located within tenant’s suite.

SCHEDULE 1 TO
EXHIBIT B

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EXHIBIT C
(Intentionally Omitted)
EXHIBIT C

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EXHIBIT D
RULES AND REGULATIONS
     Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Building or Real Property.
     1. Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord’s
prior written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord.
     2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises, unless electrical hold
backs have been installed.
     3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register when so doing. After-hours access by Tenant’s
authorized employees may be provided by card-key access or other procedures
adopted by Landlord from time to time; Tenant shall pay for the costs of all
access cards provided to Tenant’s employees and all replacements thereof for
lost, stolen or damaged cards. Access to the Building and/or Real Property may
be refused unless the person seeking access has proper identification or has a
previously arranged pass for such access. Landlord and its agents shall in no
case be liable for damages for any error with regard to the admission to or
exclusion from the Building and/or Real Property of any person. In case of
invasion, mob, riot, public excitement, or other commotion, Landlord reserves
the right to prevent access to the Building and/or Real Property during the
continuance of same by any means it deems appropriate for the safety and
protection of life and property.
     4. Landlord shall have the right to prescribe the weight, size and position
of all safes and other heavy property brought into the Building. Safes and other
heavy objects shall, if considered necessary by Landlord, stand on supports of
such thickness as is necessary to properly distribute the weight. Landlord will
not be responsible for loss of or damage to any such safe or property in any
case. All damage done to any part of the Building, its contents, occupants or
visitors by moving or maintaining any such safe or other property shall be the
sole responsibility of Tenant and any expense of said damage or injury shall be
borne by Tenant.
     5. No furniture, freight, packages, supplies, equipment or merchandise will
be brought into or removed from the Building or carried up or down in the
elevators, except upon prior notice to Landlord, and in such manner, in such
specific elevator, and between such hours as shall be designated by Landlord.
Tenant shall provide Landlord with not less than 24 hours prior notice of the
need to utilize an elevator for any such purpose, so as to provide Landlord with
a reasonable period to schedule such use and to install such padding or take
such other actions or prescribe such procedures as are appropriate to protect
against damage to the elevators or other parts of the Building.
     6. Landlord shall have the right to control and operate the public portions
of the Building and Real Property, the public facilities, the heating and air
conditioning, and any other facilities furnished for the common use of tenants,
in such manner as is customary for comparable buildings in the vicinity of the
Building.
     7. The requirements of Tenant will be attended to only upon application at
the management office of the Real Property or at such office location designated
by Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
     8. Tenant shall not disturb, solicit, or canvass any occupant of the
Building or Real Property and shall cooperate with Landlord or Landlord’s agents
to prevent same.
     9. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose employees or agents, shall have caused it.
     10. Tenant shall not overload the floor of the Premises. Tenant shall not
mark, drive nails or screws, or drill into the partitions, woodwork or plaster
or in any way deface the Premises or any part thereof without Landlord’s consent
first had and obtained; provided, however, Landlord’s prior consent shall not be
required with respect to Tenant’s placement of pictures and other normal office
wall hangings on the interior walls of the Premises (but at the end of the Term,
Tenant shall repair any holes and other damage to the Premises resulting
therefrom).
     11. Except for vending machines intended for the sole use of Tenant’s
employees and invitees, no vending machine or machines of any description other
than fractional horsepower office machines shall be installed, maintained or
operated upon the Premises without the written consent of Landlord.
     12. Tenant shall not use any method of heating or air conditioning other
than that which may be supplied by Landlord, without the prior written consent
of Landlord.
EXHIBIT D

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     13. Tenant shall not use or keep in or on the Premises, the Building or
Real Property any kerosene, gasoline or other inflammable or combustible fluid
or material. Tenant shall not use, keep or permit to be used or kept, any foul
or noxious gas or substance in or on the Premises, or permit or allow the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building or Real Property by reason of noise,
odors, or vibrations, or interfere in any way with other tenants or those having
business therewith.
     14. Tenant shall not bring into or keep within the Real Property, the
Building or the Premises any animals, birds, bicycles or other vehicles.
     15. No cooking shall be done or permitted by Tenant on the Premises, nor
shall the Premises be used for the storage of merchandise, for lodging or for
any improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters’ laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages, provided that such use is in accordance with all applicable federal,
state and city laws, codes, ordinances, rules and regulations, and does not
cause odors which are objectionable to Landlord and other tenants.
     16. Landlord will approve where and how telephone and telegraph wires are
to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone, call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.
     17. Landlord reserves the right to exclude or expel from the Building
and/or Real Property any person who, in the judgment of Landlord, is intoxicated
or under the influence of liquor or drugs, or who shall in any manner do any act
in violation of any of these Rules and Regulations.
     18. Tenant, its employees and agents shall not loiter in the entrances or
corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or
elevators, and shall use the same only as a means of ingress and egress for the
Premises.
     19. Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building’s heating and air conditioning system, and shall refrain from
attempting to adjust any controls.
     20. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in the city in
which the Real Property is located without violation of any law or ordinance
governing such disposal. All trash, garbage and refuse disposal shall be made
only through entry-ways and elevators provided for such purposes at such times
as Landlord shall designate.
     21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
     22. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed, when the Premises are not
occupied.
     23. No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord. No curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises without the prior written consent of
Landlord. The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills. All electrical ceiling
fixtures hung in offices or spaces along the perimeter of the Building must be
fluorescent and/or of a quality, type, design and bulb color approved by
Landlord.
     24. The washing and/or detailing of or, the installation of windshields,
radios, telephones in or general work on, automobiles shall not be allowed on
the Real Property.
     25. Food vendors shall be allowed in the Building upon receipt of a written
request from the Tenant. The food vendor shall service only the tenants that
have a written request on file in the management office of the Real Property.
Under no circumstance shall the food vendor display their products in a public
or common area including corridors and elevator lobbies. Any failure to comply
with this rule shall result in immediate permanent withdrawal of the vendor from
the Building.
     26. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
     27. Tenant shall comply with any non-smoking ordinance adopted by any
applicable governmental authority, and neither Tenant nor any of its
contractors, agents, employees, invitees or visitors shall smoke in the
Premises, in the Building or in any other portion of the Real Property which is
not designated as an area in which smoking is permitted.
     28. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and
EXHIBIT D

2

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Regulations in favor of any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules or Regulations against any or all tenants of
the Building and/or Real Property. Landlord reserves the right at any time to
change or rescind any one or more of these Rules and Regulations, or to make
such other and further reasonable Rules and Regulations as in Landlord’s
judgment may from time to time be necessary for the management, safety, care and
cleanliness of the Premises, Building and Real Property, and for the
preservation of good order therein, as well as for the convenience of other
occupants and tenants therein. Landlord shall not be responsible to Tenant or to
any other person for the nonobservance of the Rules and Regulations by another
tenant or other person. Tenant shall be deemed to have read these Rules and
Regulations and to have agreed to abide by them as a condition of its occupancy
of the Premises.
EXHIBIT D

3

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EXHIBIT E
SUPPLEMENTAL HVAC EQUIPMENT
For purposes of this Lease, the “Supplemental HVAC Equipment” consists of the
following:
The existing equipment mounted on the Building’s roof adjacent to the penthouse
at column 7 between columns D and E, and which is described as follows:

  •   one (1) Liebert Model DSC Dyrcooler and one (1) associated pump     •  
one (1) Liebert Model DDC Dyrcooler and two (2) associated pumps     •   the
existing associated devices, wiring and piping which extends from such roof
equipment down to the eighth (8th) floor mechanical room, and the existing
electrical connections and controls for such equipment

EXHIBIT E

1