EXHIBIT 10.1

 

Lease Agreement

 

By and Between

 

OTR, an Ohio general partnership, as Nominee of The State Teachers Retirement

Board of Ohio, a statutory organization created by the laws of Ohio, as
Landlord,

 

and

 

RAINMAKER SYSTEMS, INC., a Delaware corporation

 

July 19, 2005

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LEASE

 

TABLE OF CONTENTS

 

1.

     LEASE AGREEMENT    2

2.

     RENT    2

3.

     PREMISES    4

4.

     CONDITION OF PREMISES    4

5.

     PROJECT SERVICES    5

6.

     ALTERATIONS AND REPAIRS    6

7.

     USE OF PREMISES    7

8.

     INTRABUILDING NETWORK CABLES    8

9.

     GOVERNMENTAL REQUIREMENTS AND BUILDING RULES    9

10.

     WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE    9

11.

     FIRE AND OTHER CASUALTY    10

12.

     EMINENT DOMAIN    11

13.

     RIGHTS RESERVED TO LANDLORD    11

14.

     TENANT’S DEFAULT    12

15.

     LANDLORD REMEDIES    13

16.

     SURRENDER    14

17.

     HOLDOVER    15

18.

     SUBORDINATION TO GROUND LEASES AND MORTGAGES    15

19.

     ASSIGNMENT AND SUBLEASE    15

20.

     CONVEYANCE BY LANDLORD    17

21.

     ESTOPPEL CERTIFICATE    17

22.

     LEASE DEPOSIT    17

23.

     FORCE MAJEURE    18

24.

     TENANT’S PERSONAL PROPERTY AND FIXTURES    18

25.

     NOTICES    19

26.

     QUIET POSSESSION    19

27.

     REAL ESTATE BROKER    19

28.

     MISCELLANEOUS    19

29.

     UNRELATED BUSINESS INCOME    21

30.

     HAZARDOUS SUBSTANCES    21

31.

     LANDLORD’S LEASE UNDERTAKINGS    21

32.

     OFFER TO LEASE    22

33.

     RESERVATION OF RIGHTS    22

34.

     MODIFICATION AND FINANCING CONDITIONS    22

35.

     OPTION TO EXTEND TERM    22

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LEASE

 

THIS LEASE (the “Lease”) is made as of July 19, 2005 (dated for reference
purposes only) between OTR, an Ohio general partnership, as Nominee of The State
Teachers Retirement Board of Ohio, a statutory organization created by the laws
of Ohio (the “Landlord”), and the Tenant as named in the Schedule below. The
term “Project” means the two buildings and other improvements commonly known as
900 and 910 East Hamilton Avenue located in the City of Campbell (“City”),
County of Santa Clara (“County”), California, on that certain real property
consisting of approximately 7.12 acres as more particularly described in EXHIBIT
A. The “Premises” means that portion of the Building described in the SCHEDULE.
The Building in which the Premises are located shall be referred to herein as
the “Building.” The following schedule (the “Schedule”) is an integral part of
this Lease. Terms defined in this Schedule shall have the same meaning
throughout the Lease.

 

SCHEDULE

 

1.      Tenant:    RAINMAKER SYSTEMS, INC., a Delaware corporation      Address:
   1800 Green Hills Road           Scott Valley, CA 95066           Attn: Steve
Valenzuela           (until lease commencement date, and thereafter, the
Premises).

 

2. Premises: Approximately 16,606 rentable square feet on the 4th Floor of the
building located at the street address 900 East Hamilton Avenue, Suite 400,
Campbell, CA 95008.

 

3. Tenant’s Proportionate Share: 9.34% of Building (based on 177,811 rentable
square feet in the Building) and 4.70% of Project (based on 353,377 rentable
square feet in the Project)].

 

4. Prepaid Rent: Upon lease execution by Tenant, Tenant shall pay Twenty Two
Thousand Four Hundred Nineteen Dollars and 00/100 ($22,419.00) for the first
month’s Base Rent plus estimated Operating Cost Share Rent and Tax Share Rent
for such month in the amount of Fifteen Thousand Six Hundred Ten Dollars and
00/100 ($15,610.00).

 

5. Security Deposit: Cash or Letter of Credit in the amount of One Hundred
Thousand Dollars ($100,000.00) deliverable upon lease execution.

 

6. Permitted Use: General office and administrative use.

 

7. Tenant’s Real Estate Broker for this Lease: Colliers International

 

8. Landlord’s Real Estate Broker for this Lease: Cornish & Carey Commercial

 

9. Tenant Improvement Allowance: [NONE] (see Exhibit C, Work Letter, attached
below)

 

10. Commencement Date: The later of (i) November 1, 2005 or (ii) the date the
Premises shall be tendered to Tenant with the Landlord’s Work “Substantially
Completed,” as defined in the Work Letter attached hereto as Exhibit “C”.

 

11. Expiration Date: October 31, 2008

 

12. Term: Thirty Six (36) months.

 

13. Parking Spaces: Fifty Six (56) non-exclusive spaces in common with all other
tenants in the Property, available on an unreserved basis.

 

14. Base Rent: Base Rent shall be payable monthly as set forth in the schedule
below:

 

FOR THE PERIOD

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   RATE

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   MONTHLY
BASE RENT

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   ANNUAL
BASE RENT

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Month 1 – Month 12

   $ 1.35    $ 22,419.00    $ 269,026.00

Month 13 – Month 24

   $ 1.40    $ 23,249.00    $ 278,988.00

Month 25 – Month 36

   $ 1.45    $ 24,079.00    $ 288,948.00

 

EXHIBIT A:    PLAN OF THE PREMISES and PLAN OF PROJECT AND PARKING AREA
EXHIBIT B:    RULES AND REGULATIONS EXHIBIT C:    WORK LETTER

 

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1. LEASE AGREEMENT

 

On the terms stated in this Lease, Landlord leases the Premises to Tenant, and
Tenant leases the Premises from Landlord, for the Term beginning on the
Commencement Date and ending on the Expiration Date unless extended or sooner
terminated pursuant to this Lease.

 

A. COMMENCEMENT DATE.

 

The commencement date (the “Commencement Date”) for this Lease is the date set
forth in the Schedule. If Landlord does not deliver possession of the Premises
by the Commencement Date, for any reason whatsoever, then this Lease shall not
be void or voidable, and Landlord shall not be liable to Tenant for any loss or
damage resulting therefrom, provided, however, that if Landlord does not deliver
possession of the Premises on or before December 31, 2005, then either party may
terminate this Lease by giving the other party written notice of termination no
later than January 13, 2006. Furthermore, no delay in delivery of possession
shall in any way operate to extend the Expiration Date or any other obligation
of Landlord or Tenant hereunder.

 

B. EXPIRATION DATE.

 

The expiration date (the “Expiration Date”) of this Lease is the date set forth
in the Schedule.

 

C. EARLY OCCUPANCY.

 

During the period commencing on October 15, 2005 and ending on the Commencement
Date (the “Early Occupancy Period”), Tenant shall be permitted to enter the
Premises for the purposes of installing certain trade fixtures and performing
Tenant’s Work, provided that Tenant’s entry on to the Premises during the Early
Occupancy Period (i) shall not interfere with Landlord and its contractors,
subcontractors and agents in their performance and completion of any outstanding
Landlord’s Work and (ii) shall be subject to all of the terms, covenants and
conditions of this Lease, including, without limitation, Tenant’s obligations
under Section 9 (regarding Tenant’s compliance with applicable laws and building
rules obligation), and Section 10 (regarding Tenant’s indemnity and insurance
obligations), except Tenant’s obligation to pay Base Rent, Operating Cost Share
Rent and Tax Share Rent shall not commence until the earlier of the Commencement
Date or the date Tenant commences to do business in the Premises.

 

2. RENT

 

A. TYPES OF RENT.

 

Tenant shall pay the following Rent in the form of a check to Landlord at the
following address (or in such other manner as Landlord may notify Tenant):

 

    OTR: 900-910 East Hamilton Avenue     P.O. Box 633177         Cincinnati, OH
45263-3177    

 

(1) Base Rent in monthly installments in advance, the first monthly installment
payable concurrently with the execution of this Lease and thereafter on or
before the first day of each month of the Term in the amount set forth on the
Schedule.

 

(2) Operating Cost Share Rent in an amount equal to the Tenant’s Proportionate
Share of the Operating Costs for the applicable fiscal year of the Lease, paid
monthly in advance in an estimated amount. A definition of Operating Costs and
the method for billing and payment of Operating Cost Share Rent are set forth in
Sections 2.B. and 2.C.

 

(3) Tax Share Rent in an amount equal to the Tenant’s Proportionate Share of the
Taxes for the applicable fiscal year of this Lease, paid monthly in advance in
an estimated amount. A definition of Taxes and the method for billing and
payment of Tax Share Rent are set forth in Sections 2.B and 2.C.

 

(4) Additional Rent in the amount of all costs, expenses, liabilities, and
amounts which Tenant is required to pay under this Lease, excluding Base Rent,
Operating Cost Share Rent, and Tax Share Rent, but including any late charge and
any interest for late payment of any item of rent.

 

(5) Rent as used in this Lease means Base Rent, Operating Cost Share Rent, Tax
Share Rent and Additional Rent. Tenant’s agreement to pay Rent is an independent
covenant. All payments due from Tenant to Landlord hereunder shall be paid to
Landlord, without notice, demand, deduction, recoupment, offset or counterclaim,
and without relief from any valuation or appraisement laws, and in lawful money
of the United States of America in the manner specified in Section 2.

 

B. PAYMENT OF OPERATING COST SHARE RENT AND TAX SHARE RENT.

 

(1) Payment of Estimated Operating Cost Share Rent and Tax Share Rent Landlord
shall estimate the Operating Costs and Taxes of the Project by April 1 of each
fiscal year, or as soon as reasonably possible thereafter. Landlord may revise
these estimates whenever it obtains additional or more accurate information,
such as the final real estate tax assessment or tax rate for the Project. Within
ten (10) days after receiving the original or revised estimate from Landlord,
Tenant shall pay Landlord one-twelfth (1/12th) of Tenant’s Proportionate Share
of this estimate, multiplied by the number of months that have elapsed in the
applicable Lease Year (as defined in Section 2.C.(3) hereof) to the date of such
payment including the current month, minus payments previously made by Tenant
for the months elapsed. On the first day of each month thereafter, Tenant shall
pay Landlord one-twelfth (1/12th) of Tenant’s Proportionate Share of this
estimate, until a new estimate becomes applicable.

 

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(2) Correction of Operating Cost Share Rent Landlord shall deliver to Tenant a
report for the previous fiscal year (the “Operating Cost Report”) by May 15 of
each Lease Year, or as soon as reasonably possible thereafter, setting forth (a)
the actual Operating Costs Incurred, (b) the amount of Operating Cost Share Rent
due from Tenant, and (c) the amount of Operating Cost Share Rent paid by Tenant.
Within thirty (30) days after such delivery, Tenant shall pay to Landlord the
amount due minus the amount paid. If the amount paid exceeds the amount due,
Landlord shall apply the excess to Tenant’s payments of Operating Cost Share
Rent next coming due.

 

(3) Correction of Tax Share Rent Landlord shall deliver to Tenant a report for
the previous Lease Year (the “Tax Report”) by May 15 of each Lease Year, or as
soon as reasonably possible thereafter, setting forth (a) the actual Taxes, (b)
the amount of Tax Share Rent due from Tenant, and (c) the amount of Tax Share
Rent paid by Tenant. Within thirty (30) days after such delivery, Tenant shall
pay to Landlord the amount due from Tenant minus the amount paid by Tenant. If
the amount paid exceeds the amount due, Landlord shall apply any excess as a
credit against Tenant’s payments of Tax Share Rent next coming due.

 

C. DEFINITIONS.

 

(1) Operating Costs. “Operating Costs” means any expenses, costs and
disbursements of any kind other than Taxes, paid or incurred by Landlord in
connection with the management, maintenance, operation, insurance (including the
related deductibles), repair and other related activities in connection with any
part of the Project and of the personal property, fixtures, machinery,
equipment, systems and apparatus used in connection therewith, including the
cost of providing those services required to be furnished by Landlord under this
Lease and a management fee equal to five (5%) percent of all Gross Rental
derived from the Building (“Gross Rental” shall mean Base Rent and any
Additional Rent payable by tenants). Operating Costs shall also include the
costs of any capital improvements which are intended to reduce Operating Costs
or improve safety, and those made to keep the Project in compliance with
governmental requirements applicable from time to time or to replace existing
capital improvements, facilities and equipment within the Building or the common
areas of the Project, such as the roof membrane, the roof, structural elements
of the Building, and resurfacing of the parking areas (collectively, “Included
Capital Items”); provided, that the costs of any Included Capital Item shall be
amortized by Landlord, together with an amount equal to interest at ten (10%)
percent per annum, over the estimated useful life of such item and such
amortized costs are only included in Operating Costs for that portion of the
useful life of the Included Capital Item which falls within the Term, unless the
cost of the Included Capital Item is less than Ten Thousand ($10,000) Dollars in
which case it shall be expensed in the year in which it was incurred. Operating
Costs shall not include Property Taxes, depreciation on the Building other than
depreciation on exterior window coverings provided by Landlord and carpeting in
public corridors and common areas and the personal property referred to above;
costs of tenants’ improvements in excess of tenant standard; real estate
brokers’ commissions, attorneys’ fees and expenses incurred in connection with
negotiations or disputes with Building tenants or prospective Building tenants;
any expense to the extent Landlord receives direct reimbursement by tenants,
insurers or other third parties; interest, principal, attorney fees, points,
fees and other lender costs and closing costs on any mortgage or mortgages,
ground lease payments or other debt instrument encumbering the Project; costs of
operation of the business of the ownership of the Project or entity that
constitutes Landlord or Landlord’s property manager, as distinguished from the
cost of Project operations, except to the extent that those costs and expenses
are included in the management fees; Landlord’s general entity overhead and
general administrative expenses, except to the extent that those costs and
expenses are included in the management fees; and costs needed to remedy any
noncompliance, existing as of the date that this Lease is executed and delivered
by both parties, of the Project with the Governmental Requirements then in
existence. Notwithstanding anything to the contrary contained in this Section
2.C.(1), Operating Costs shall only include (i) Operating Costs fairly allocable
to the Building, and (ii) a proportionate share (based on the gross rentable
area of the Building as a percentage of the gross rentable area of all of the
buildings in the Project) of all Operating Costs which relate to the Project in
general and are not fairly allocable to any one building in the Project. If the
Project is not fully occupied during any portion of any Lease Year, Landlord may
adjust Operating Costs to equal what would have been incurred by Landlord had
the Project been fully occupied. Landlord may incorporate such adjustments in
its estimates of Operating Costs.

 

(2) Taxes. “Taxes” means any and all taxes, assessments and charges of any kind,
general or special, ordinary or extraordinary, levied against the Project, which
Landlord shall pay or become obligated to pay in connection with the ownership,
leasing, renting, management, use, occupancy, control or operation of the
Project or of the personal property, fixtures, machinery, equipment, systems and
apparatus used in connection therewith. Taxes shall include real estate taxes,
personal property taxes, sewer rents, water rents, special or general
assessments, transit taxes, ad valorem taxes, and any tax levied on the rents
hereunder or the interest of Landlord under this Lease (the “Rent Tax”). Taxes
shall also include all fees and other costs and expenses paid by Landlord in
reviewing any tax and in seeking a refund or reduction of any Taxes, whether or
not the Landlord is ultimately successful. Taxes shall also include any
assessments or fees paid to any business park owners association, or similar
entity, which are imposed against the Project pursuant to any Covenants,
Conditions and Restrictions (“CC&R’s”) recorded against the Project and any
installments of principal and interest required to pay any existing or future
general or special assessments for public improvements, services or benefits,
and any increases resulting from reassessments imposed in connection with any
change in ownership or new construction. Notwithstanding anything to the
contrary contained in this Section 2.C.(2), Taxes shall include only those Taxes
(i) fairly allocable to the Building, and (ii) a proportionate share (based on
the gross rentable area of the Building as a percentage of the gross rentable
area of all of the buildings in the Project) of all Taxes which relate to the
Project in general and are not fairly allocable to any one building

 

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in the Project. For any year, the amount to be included in Taxes (a) from taxes
or assessments payable in installments, shall be the amount of the installments
(with any interest) due and payable during such year, and (b) from all other
Taxes, shall at Landlord’s election be the amount accrued, assessed, or
otherwise imposed for such year or the amount due and payable in such year. Any
refund or other adjustment to any Taxes by the taxing authority, shall apply
during the year in which the adjustment is made. Taxes shall not include any net
income (except Rent Tax), capital, stock, succession, transfer, franchise, gift,
estate or inheritance tax, except to the extent that such tax shall be imposed
in lieu of any portion of Taxes.

 

(3) Lease Year. “Lease Year” shall mean each twelve month period during the term
hereof ending on December 31; provided that the first Lease Year shall commence
upon the commencement of the term hereof and shall end on the next succeeding
December 31, and the last Lease Year shall end upon the expiration of the term
hereof.

 

D. COMPUTATION OF BASE RENT AND RENT ADJUSTMENTS.

 

(1) Prorations. If this Lease begins on a day other than the first day of a
month, the Base Rent, Operating Cost Share Rent and Tax Share Rent shall be
prorated for such partial month based on the actual number of days in such
month. If this Lease begins on a day other than the first day, or ends on a day
other than the last day of the Lease Year, Operating Cost Share Rent and Tax
Share Rent shall be prorated for the applicable Lease Year.

 

(2) Default Interest. Any sum due from Tenant to Landlord not paid when due
shall bear interest from the date due until paid at the lesser of fifteen (15%)
percent per annum or the maximum rate permitted by law.

 

(3) Books and Records. Landlord shall maintain books and records reflecting the
Operating Costs and Taxes in accordance with its standard operating procedures
and practice. Provided Tenant is not otherwise in default under this Lease,
Tenant and its certified public accountant shall have the right to inspect
Landlord’s records at Landlord’s applicable local office or other location
designated by Landlord upon at least seventy-two (72) hours prior written notice
during normal business hours during the ninety (90) days following the
respective delivery of the Operating Cost Report or the Tax Report. The results
of any such inspection shall be kept strictly confidential by Tenant and its
agents, and Tenant and its certified public accountant must agree, in their
contract for such services, to such confidentiality restrictions and shall
specifically agree that the results shall not be made available to any other
tenant of the Project. Unless Tenant sends to Landlord any written exception to
either such report within said ninety-day (90) period, such report shall be
deemed final and accepted by Tenant. Tenant shall pay the amount shown on both
reports in the manner prescribed in this Lease, whether or not Tenant takes any
such written exception, without any prejudice to such exception. If Tenant makes
a timely exception, Landlord shall cause its independent certified public
accountant to issue a final and conclusive resolution of Tenant’s exception.
Tenant shall pay the cost of such certification unless Landlord’s original
determination of annual Operating Costs and Taxes in the aggregate overstated
the amounts thereof by more than five (5%) percent.

 

(4) Miscellaneous. If this Lease is terminated for any reason prior to the
annual determination of Operating Cost Share Rent or Tax Share Rent, either
party shall pay the full amount due to the other within fifteen (15) days after
Landlord’s notice to Tenant of the amount when it is determined; provided,
however, that if Tenant is in default of any obligation under this Lease,
Landlord shall have the right to withhold any amount that is necessary to remedy
or attempt to remedy such default. Landlord may commingle any payments made with
respect to Operating Cost Share Rent or Tax Share Rent, without payment of
interest.

 

3. PREMISES

 

The exact boundaries of the Premises shall extend to the unfinished interior
surface of all perimeter walls, except glazing, which shall be included within
the Premises, the unfinished surface of all floors, and the underside of the
floor above the Premises that forms the ceiling of the Premises. Notwithstanding
the foregoing, the Premises shall not be deemed to include the roof, the
exterior surface of the walls of the Premises, any structural portions of the
Building or any utility installations serving other portions of the Building.
Landlord reserves to itself the use of the roof, exterior walls and the area
beneath the Premises, together with the right to install, maintain, use, repair
and replace plumbing, telephone facilities, equipment, machinery, connections,
pipes, ducts, conduits and wires leading through the Premises and serving other
parts of the Building. The square footage of the Premises shall be determined in
accordance with the BOMA Standards. Landlord shall have the right to remeasure
the Premises, the Building and/or the Project and determine the rentable square
footage of the Premises and Tenant’s Proportionate Share. If such remeasurement
shows the rentable square footage contained in the Premises, the Building and/or
the Project is more or less than the square footage identified in the Schedule,
then the Rent and Tenant’s Proportionate Share shall be adjusted to reflect the
actual rentable square footage contained within the Premises, the Building
and/or the Project as determined by such remeasurement.

 

4. CONDITION OF PREMISES

 

Tenant represents, warrants and covenants to Landlord that, as of the date of
this Lease, Tenant has conducted its own investigation of the Premises and the
physical condition thereof, including, without limitation, the accessibility and
location of utilities, the improvements, the presence of Hazardous Substances
(defined hereinafter), and any other matters which in Tenant’s judgment might
affect or influence Tenant’s use of the Premises or Tenant’s willingness to
enter into this Lease. Tenant recognizes that Landlord would not lease the
Premises except on an “as is” basis, subject to those improvements outlined in
the Work Letter attached hereto as EXHIBIT C, and acknowledges that, except as
set forth in this Lease, Landlord has made no

 

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representation of any kind in connection with the improvements to, or the
physical conditions on, or bearing on the use of, the Premises. Tenant shall
rely solely on Tenant’s own inspection and examination of such items and not on
any representations of Landlord, express or implied. Landlord shall deliver the
Premises to Tenant in the same arrangement and condition as the Premises now
are, reasonable wear and tear excepted, and that Landlord, except as stated in
EXHIBIT C, has no obligation to alter, repair, renovate, or render fit for
Tenant’s occupancy, any part of the Premises. Upon execution of this Lease,
Tenant shall be deemed fully satisfied with the results of Tenant’s inspection
and examination of all such items.

 

5. PROJECT SERVICES

 

Landlord shall furnish services as follows:

 

A. HEATING AND AIR CONDITIONING.

 

During the normal business hours of 8:00 a.m. to 6:00 p.m., Monday through
Friday, and 8:00 a.m. to 1:00 p.m. on Saturday, Landlord shall furnish heating
and air conditioning to provide a comfortable temperature, in Landlord’s
reasonable judgment, for normal business operations, except to the extent Tenant
fails to take reasonable steps to ensure the efficient heating and cooling of
the Premises (e.g., keeping all exterior doors, windows and blinds closed) or
installs equipment which adversely affects the temperature maintained by the air
conditioning system; provided if the outside temperature exceeds 95° degrees F
dry bulb, then Tenant acknowledges that the temperatures within the Premises may
be slightly higher than usual. If Tenant installs such equipment, Landlord may
reasonably require that Tenant install supplementary air conditioning units in
the Premises and pay the cost of installation, operation and maintenance
thereof. Landlord shall furnish heating and air conditioning after business
hours if Tenant provides Landlord reasonable prior notice, and pays Landlord all
the then current charges for such additional heating or air conditioning. The
current hourly charge for after-hours HVAC use is $40.00 per hour, provided that
Landlord reserves the right to change this rate at any time during the Term
without notice to Tenant.

 

B. ELEVATORS.

 

If the Building is equipped with one or more elevators, Landlord shall provide
passenger elevator service during normal business hours to Tenant in common with
Landlord and all other tenants. Landlord shall provide limited passenger service
at other times, except in case of an emergency. If the Building is equipped with
a freight elevator, Landlord shall provide freight elevator service at
reasonable hours at Tenant’s request, subject to scheduling by the Landlord and
payment for the service by Tenant.

 

C. ELECTRICITY.

 

Landlord shall provide sufficient electricity to operate normal office
equipment. Tenant shall not install or operate in the Premises any electrically
operated equipment or other machinery, other than business machines and
equipment normally employed for general office use which do not require high
electricity consumption for operation, without obtaining the prior written
consent of Landlord. If any or all of Tenant’s equipment requires electricity
consumption in excess of that which is necessary to operate normal office
equipment, such consumption (including consumption for computer or telephone
rooms and special HVAC equipment) shall be submetered by Landlord at Tenant’s
expense, and Tenant shall reimburse Landlord as Additional Rent for the cost of
its submetered consumption based upon Landlord’s average cost of electricity.
Such Additional Rent shall be in addition to Tenant’s obligations pursuant to
Section 2.A (2) to pay its Proportionate Share of Operating Costs.

 

D. WATER.

 

Landlord shall furnish hot and cold tap water for drinking and toilet purposes.
Tenant shall pay Landlord for water furnished for any other purpose as
Additional Rent at rates fixed by Landlord. Such Additional Rent shall be in
addition to Tenant’s obligations pursuant to Section 2.A (2) to pay its
Proportionate Share of Operating Costs. Tenant shall not permit water to be
wasted.

 

E. JANITORIAL SERVICE.

 

Landlord shall furnish janitorial service Monday through Friday as generally
provided to other tenants in the Project and consistent with specifications for
other Class A office buildings for the City of Campbell, California. With
reasonable prior notice from Tenant, Landlord shall also provide additional
janitorial service on weekends or holidays at Tenant’s expense, and Tenant shall
reimburse Landlord as Additional Rent for the cost of such additional janitorial
services. Such Additional Rent shall be in addition to Tenant’s obligations
pursuant to Section 2.A (2) to pay its Proportionate Share of Operating Costs.

 

F. INTERRUPTION OF SERVICES.

 

Landlord shall not be liable for any failure to furnish, stoppage of, or
interruption in furnishing any of the services or utilities, when such failure
is caused by accident, breakage, repairs, strikes, lockouts, labor disputes,
labor disturbances, governmental regulation, civil disturbances, acts of war,
moratorium or other governmental action, or any other cause beyond Landlord’s
reasonable control, and, in such event, Tenant shall not be entitled to any
damages nor shall any failure or interruption abate or suspend Tenant’s
obligation to pay Rent required under this Lease or constitute or be construed
as a constructive or other eviction of Tenant or relieve Tenant from fulfillment
of any covenant or agreement hereof. Further, in the event any governmental
authority or public utility promulgates or revises any law, ordinance, rule or
regulation, or issues mandatory controls or voluntary controls relating to the
use or conservation of energy, water, gas, light or electricity, the reduction
of automobile or other emissions, or the provision of any other utility or
service, Landlord may take any reasonably appropriate action to comply with such
law, ordinance, rule, regulation, mandatory control or voluntary guideline and
Tenant’s obligations hereunder shall not be affected by any such action of
Landlord. The parties acknowledge that safety and security devices, services and
programs

 

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provided by Landlord, if any, while intended to deter crime and ensure safety,
may not in given instances prevent theft or other criminal acts, or ensure
safety of persons or property. The risk that any safety or security device,
service or program may not be effective, or may malfunction, or be circumvented
by a criminal, is assumed by Tenant with respect to Tenant’s property and
interests, and Tenant shall obtain insurance coverage to the extent Tenant
desires protection against such criminal acts and other losses, as further
described in this Lease. Tenant agrees to cooperate in any reasonable safety or
security program developed by Landlord or required by law.

 

6. ALTERATIONS AND REPAIRS

 

A. LANDLORD’S CONSENT AND CONDITIONS.

 

Tenant shall not make any improvements or alterations to the Premises (the
“Work”) without in each instance submitting plans and specifications for the
Work to Landlord and obtaining Landlord’s prior written consent, which consent
may be withheld in Landlord’s sole discretion; provided, however, that
Landlord’s prior written consent shall not be required, but all other provisions
of this Section 6 shall apply to, nonstructural Work solely of a cosmetic nature
for which, in the aggregate for all such Work, the cost does not exceed $15,000
during the term of this Lease. Without limitation of the foregoing, Landlord
will be deemed to be acting reasonably in withholding its consent for any Work
which (a) impacts the base structural components or systems of the Building, (b)
impacts any other tenant’s premises, or (c) is visible from outside the
Premises. Tenant shall pay for the cost of all Work, including the cost of any
and all approvals, permits, fees and other charges which may be required as a
condition of performing such Work. The following requirements shall apply to all
Work:

 

(1) Prior to commencement, Tenant shall furnish to Landlord building permits,
and certificates of insurance reasonably satisfactory to Landlord. No later than
fifteen (15) days prior to commencement, Tenant shall give Landlord written
notice thereof so that Landlord may post notice(s) of nonresponsibility and any
other statutory notice relating to the Work.

 

(2) Tenant shall perform all Work so as to maintain peace and harmony among
other contractors serving the Project and shall avoid interference with other
work to be performed or services to be rendered in the Project.

 

(3) The Work shall be performed in a good and workmanlike manner, meeting the
standard for construction and quality of materials in the Building, and shall
comply with all insurance requirements and all applicable governmental laws,
ordinances and regulations, including, but not limited to, the Americans with
Disabilities Act and the regulations promulgated pursuant thereto (“ADA”)
(“Governmental Requirements”).

 

(4) Tenant shall perform all Work so as to minimize or prevent disruption to
other tenants, and Tenant shall comply with all reasonable requests of Landlord
in response to complaints from other tenants.

 

(5) Tenant shall perform all Work in compliance with any “Policies, Rules and
Procedures for Construction Projects” which may be in effect at the time the
Work is performed. As of the date of this Lease, there are no Policies, Rules
and Procedures for Construction Projects which have been established for this
Project.

 

(6) Tenant shall reimburse Landlord any and all costs and expenses incurred by
Landlord in connection with the construction of the Work, including, without
limitation, utilities, trash removal, and temporary barricades, and the review
of any plans and specifications. Tenant shall permit Landlord to supervise all
Work. Landlord may charge a supervisory fee not to exceed fifteen percent (15%)
of labor, materials, and all other costs of the Work whether or not Landlord’s
employees or contractors perform the Work.

 

(7) Upon completion, Tenant shall furnish Landlord with full and final statutory
waivers of liens, as-built plans and specifications, and receipted bills
covering all labor and materials, and all other close-out documentation relating
to the Work, including any other information required under any “Policies, Rules
and Procedures for Construction Projects” which may be in effect at such time.

 

(8) Notwithstanding anything to the contrary contained in this Lease, Landlord’s
approval of any contractors, subcontractors, engineers, architects, suppliers,
plans or specifications submitted pursuant hereto shall not be deemed a warranty
as to the adequacy of the design, workmanship, quality of materials or
compliance with any applicable laws.

 

(9) Landlord may require Tenant to provide Landlord at Tenant’s sole cost and
expense a completion and performance bond in an amount equal to one and one-half
(1½) times the estimated cost of the Work to insure Landlord against any
liability for mechanic’s or materialmen’ liens and to insure the completion of
the Work.

 

B. REPAIRS.

 

If any part of the mechanical, electrical or other systems in the Premises
(e.g., HVAC, life safety or automatic fire extinguisher/sprinkler system) shall
be damaged, Tenant shall promptly notify Landlord, and Landlord shall repair
such damage. Landlord may also at any reasonable time make any repairs or
alterations which Landlord deems necessary for the safety or protection of the
Project, or which Landlord is required to make by any court or pursuant to any
Governmental Requirement. Tenant shall at its expense make all other repairs

 

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necessary to keep the Premises, and Tenant’s fixtures and personal property, in
good order, condition and repair in compliance (to the extent required in
Section 9 below) with all applicable Governmental Requirements; to the extent
Tenant fails to do so, Landlord may make such repairs itself. The cost of any
repairs made by Landlord on account of Tenant’s default, or on account of the
misuse or neglect by Tenant or its invitees, employees, contractors or agents
anywhere in the Project, shall become Additional Rent payable by Tenant on
demand. It is a condition precedent to all Landlord’s obligations to repair and
maintain that Tenant shall have notified Landlord of the need of such repairs or
maintenance. Tenant waives the provisions of Sections 1941 and 1942 of the
California Civil Code and any similar or successor law regarding Tenant’s right
to make repairs and deduct the cost of such repairs from the Rent due under this
Lease.

 

C. NO LIENS.

 

Tenant has no authority to cause or permit any lien or encumbrance of any kind
to affect Landlord’s interest in the Project; any such lien or encumbrance shall
attach to Tenant’s interest only. If any mechanic’s lien shall be filed or claim
of lien made for work or materials furnished to Tenant, then Tenant shall at its
expense within ten (10) days thereafter either discharge or contest the lien or
claim. If Tenant contests the lien or claim, then Tenant shall (i) within such
ten (10) day period, provide Landlord adequate security for the lien or claim,
(ii) contest the lien or claim in good faith by appropriate proceedings that
operate to stay its enforcement, and (iii) pay promptly any final adverse
judgment entered in any such proceeding. If Tenant does not comply with these
requirements, Landlord may discharge the lien or claim, and the amount paid, as
well as attorney’s fees and other expenses incurred by Landlord, shall become
Additional Rent payable by Tenant on demand.

 

D. OWNERSHIP OF IMPROVEMENTS.

 

All Work as defined in this Section 6, partitions, hardware, equipment,
machinery and all other improvements and all fixtures except trade fixtures,
constructed in the Premises by either Landlord or Tenant, (i) shall become
Landlord’s property upon termination without compensation to Tenant, or (ii)
shall at Landlord’s option be removed in accordance with Section 6.E below.

 

E. REMOVAL UPON TERMINATION.

 

Prior to the expiration of this Lease, and within five (5) days after any early
termination of this Lease or Tenant’s right of possession, Tenant shall remove
from the Premises and Project its trade fixtures, furniture, moveable equipment
and other personal property, any improvements (other than the Landlord’s Work,
as defined in Exhibit C hereto) which Landlord elects pursuant to Section 6.E
shall be removed by Tenant, and any improvements to any portion of the Project
other than the Premises. If requested in writing by Tenant concurrently with the
submission to Landlord of plans and specifications for approval as provided in
Section 6.A above, Landlord at the time of its approval of such plans and
specifications shall inform Tenant in writing of which items shown therein
Landlord will require to be removed pursuant to this Section 6. E. If Tenant
does not timely remove such property, then Tenant shall be conclusively presumed
to have, at Landlord’s election (i) conveyed such property to Landlord without
compensation or (ii) abandoned such property, and Landlord may dispose of or
store any part thereof in any manner at Tenant’s sole cost, without waiving
Landlord’s right to claim from Tenant all expenses arising out of Tenant’s
failure to remove the property, and without liability to Tenant or any other
person. Landlord shall have no duty to be a bailee of any such personal
property. If Landlord elects abandonment, Tenant shall pay to Landlord, upon
demand, any expenses incurred for disposition.

 

7. USE OF PREMISES

 

A. LIMITATION ON USE.

 

Tenant shall use the Premises only for the Permitted Use stated in the Schedule.
Any material change in the character of Tenant’s business or use shall
constitute a default under this Lease. Nothing contained in this Lease shall
grant to Tenant the exclusive right to conduct within the Building the business
to be conducted by Tenant within the Premises or otherwise limit the right of
Landlord to lease space in the Building to any other tenants as it deems proper.
Tenant shall not conduct or permit to be conducted in the Premises any sale by
auction, or any fire, distress or bankruptcy sale, or use or allow the Premises
to be used for any improper, immoral, unlawful or objectionable purpose, or
cause, maintain or permit any nuisance in, or about the Premises or commit or
suffer to be committed any waste in or upon the Premises. Tenant shall not allow
any use of the Premises which will negatively affect the cost of coverage of
Landlord’s insurance on the Project. Tenant shall not allow any inflammable or
explosive liquids or materials to be kept on the Premises. Tenant shall not
allow any use of the Premises which would cause the value or utility of any part
of the Premises to diminish or would interfere with any other tenant or with the
operation of the Project by Landlord. Tenant shall not permit any nuisance or
waste upon the Project, or allow any offensive noise or odor in or around the
Project. At the end of each business day, or more frequently if necessary,
Tenant shall deposit all garbage and other trash (excluding any inflammable,
explosive and/or hazardous materials) in trash bins or containers approved by
Landlord in locations designated by Landlord from time to time. If any
governmental authority shall deem the Premises to be a “place of public
accommodation” under the Americans with Disabilities Act or any other comparable
law as a result of Tenant’s use, Tenant shall either modify its use to cause
authority to rescind its designation or to be responsible for any alterations,
structural or otherwise, required to be made to the Building or the Premises
under such laws.

 

B. SIGNS.

 

Tenant shall not place on any portion of the Premises any sign, placard,
lettering, banner, displays or other advertising or communicative material which
is visible from the exterior of the Building without the prior written approval
of Landlord. Any approved signs shall strictly conform to all Governmental
Restrictions, any CC&R’s recorded against the Project, and any sign criteria
which may be established by Landlord and in effect at the time, and shall be
installed (and removed upon the Expiration Date) at Tenant’s expense.

 

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Tenant, at its sole cost and expense, shall maintain such signs in good
condition and repair, (including the repair of any damage caused to the Building
and/or Project upon the removal of such signs). Landlord current Signage
Standards are on file and available upon request from the Landlord’s corporate
office, and are subject to change from time to time. Notwithstanding the
foregoing, Landlord, at its cost, shall include Tenant’s name in the lobby
directory for the Building and on the Creekside Way monument in accordance with
Landlord’s signage program. Tenant shall bear the cost of suite signage.

 

C. PARKING.

 

Landlord shall provide without charge (except as included in Operating Costs)
Tenant the number of parking spaces specified in the Schedule on an unreserved
basis in Landlord’s parking facilities, which facilities may as of the date
hereof be either in the parking facilities located on the Project (including the
underground parking garage and surface parking) or in the “Additional Parking
Area” depicted in the diagram attached hereto as EXHIBIT A-1 (collectively, the
“Parking Facilities”). The use of the Parking Facilities shall be in common with
other tenants of the Project upon a first-come, first-served basis and on other
reasonable, nondiscriminatory terms and conditions, as may from time to time be
established by Landlord. Tenant agrees to cooperate with Landlord and other
tenants in the Project in the use of the Parking Facilities. Access to the
underground parking garage shall be subject to control by Landlord. Landlord
reserves the right in its discretion to alter, change or improve the Parking
Facilities and to reallocate spaces between the facilities provided that the
number of parking spaces provided to Tenant is not less than the number of
parking spaces specified in the Schedule. Landlord shall not be liable to
Tenant, nor shall this Lease be affected, if any parking is impaired by
moratorium, initiative, referendum, law, ordinance, regulation or order passed,
issued or made by any governmental or quasi-governmental body. Tenant’s right to
use the parking spaces located on the Additional Parking Area are set forth in
the Declaration and Grant of Reciprocal Rights dated and recorded July 27, 1988
in Book K618, page 301, the First Amendment to Declaration of and Grant of
Reciprocal Rights dated December 28, 1988 and recorded January 11, 1989 in Book
L054, page 936, the Memorandum of Parking Use Agreement recorded in Book M217,
page 239 and the Amendment to Parking Easement recorded April 16, 1999 as
Document No. 14746646, in the Santa Clara County Recorder’s Office
(collectively, the “CC&R’s”), as may be amended from time to time. Tenant has
received and reviewed a copy of the CC&R’s and understands that the owner of the
Additional Parking Area has the right to develop such land, and if it chooses to
do so, such owner may relocate the parking spaces located thereon to another
location or cause the owner of the Additional Parking Area to provide valet
parking to Tenant while such owner constructs a parking facility on the
Additional Parking Area. Whether parking is provided in the Parking Facilities
or at another location or by valet, Landlord assumes no liability for damage or
injuries, theft, collision, fire or damage of Tenant, its employees, customers
and invitees and/or their vehicles and Landlord shall not be responsible for
articles left in vehicles or for damages for loss of use of any vehicle. Tenant
waives any and all claims against Landlord for any injury to or death of any
person or damage to or destruction of property in or about the Parking
Facilities, including, without limitation, loss of use of any one of the Parking
Facilities.

 

D. PERMITTED USE OF ROOF AND STRUCTURE OF BUILDING.

 

Tenant shall be prohibited from using any portion of the roof of the Building or
any portion of the structure of the Building during the Tenancy of this Lease
(or any extensions thereof) for any purposes.

 

8. INTRABUILDING NETWORK CABLES

 

Notwithstanding anything contained in this Lease to the contrary, Landlord and
Tenant agree as follows:

 

A. TENANT’S RESPONSIBILITY.

 

At its sole cost and expense, Tenant agrees to install, maintain, and repair all
telecommunication cabling, wiring, and risers in the Premises or through the
Building to Tenant’s telephone panel as may be required to for Tenant’s use of
the Premises. Any costs incurred by Landlord caused by such installation or to
comply with governmental laws, rules, and regulations in connection with such
installation, will be for the account of Tenant, and within ten (10) days,
Tenant will pay all invoices for those costs as Additional Rent. Tenant shall
also be responsible, at Tenant’s sole cost and expense, for any of Tenant’s
telephones, telecopiers, computers, telephone switching, telephone panels and
related equipment.

 

B. LANDLORD’S RIGHT OF ENTRY.

 

In addition to Landlord’s other rights of entry under this Lease, Landlord has
the right to enter the Premises to install, maintain, and repair
telecommunications cabling, wiring, and risers for the benefit of other tenants
of the Building.

 

C. ALTERATIONS BY TENANT.

 

Regardless of Tenant’s other rights under the Lease to make alterations to the
Premises, Tenant may not alter or modify the telecommunication cabling, wiring,
and risers located in the Premises or any other part of the Project or otherwise
without Landlord’s prior written consent, which consent may be withheld in
Landlord’s sole discretion.

 

D. SERVICE PROVIDER.

 

Tenant agrees that the installation, maintenance, and repair of Tenant’s
telecommunications cabling, wiring and risers in the Premises or through the
Building will be done by Landlord’s approved service provider or any other
independent contractor that Landlord may approve in writing in advance, which
approval shall not be unreasonably withheld.

 

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E. INDEMNIFICATION.

 

Tenant agrees to indemnify, release, defend, and hold Landlord harmless against
any damages, claims, or other liability resulting from the installation, repair,
or maintenance, of Tenant’s telecommunications cabling, wiring and risers in the
Premises or through the Building including, but not limited to, the costs of
repair, the costs of handling complaints from other tenants in the Building, and
any damages resulting from the interruption in service to other tenants in the
Building. Tenant releases Landlord from any losses, claims, injuries, damages,
or other liability, including, but not limited to, consequential damages,
whether to persons or property and no matter how caused, in any way connected
with the interruption of telecommunications services to the Premises due to the
failure of any telecommunications cabling, wiring, or risers. Tenant expressly
waives any right to claim that the interruption of such services constitutes
grounds for a claim of abatement of rent, of constructive eviction, or for
termination of this Lease.

 

9. GOVERNMENTAL REQUIREMENTS AND BUILDING RULES

 

Tenant shall comply with all Governmental Requirements applying to its use,
repair and maintenance of the Premises. Landlord and Tenant acknowledge and
agree that Tenant’s obligation to comply with the legal requirements as provided
herein is a material part of the bargained for consideration under this Lease.
Tenant’s obligation hereunder shall include, without limitation, the
responsibility of Tenant to make substantial repairs and alterations to the
Premises (including any Improvements), regardless of, among other factors, the
relationship of the cost of curative action to the rental under this Lease, the
length of the then remaining term of this Lease, the relative benefit of the
repairs to Tenant, the degree in which the curative action may interfere with
Tenant’s use or enjoyment of the Premises, the likelihood that Landlord or
Tenant contemplated the particular Governmental Requirements involved, and
whether the Governmental Requirements involved are related to Tenant’s
particular use of the Premises; provided, however, that Tenant shall not be
required to make repairs, alterations or improvements to the Premises that are
needed to remedy any noncompliance, existing as of the date that this Lease is
executed and delivered by both parties, of the Premises with the Governmental
Requirements then in existence. No occurrence or situation arising during the
term hereof, nor any present or future Governmental Requirements, whether
foreseen or unforeseen, and however extraordinary, shall relieve Tenant from its
obligations hereunder, or shall give Tenant any right to terminate this Lease in
whole or in part or to otherwise seek redress against Landlord. Tenant waives
any rights now or hereafter conferred upon it by any existing or future law to
terminate this Lease, to receive any abatement, diminution, reduction or
suspension of payment of rent, or to compel Landlord to make any repairs to
comply with any such Governmental Requirements, on account of any such
occurrence or situation. Tenant shall also comply with all reasonable rules for
the Project which may be established and amended from time to time by Landlord.
The present rules and regulations are contained in EXHIBIT B. Failure by another
tenant to comply with the rules or failure by Landlord to enforce them shall not
relieve Tenant of its obligation to comply with the rules or make Landlord
responsible to Tenant in any way. Landlord shall use reasonable efforts to apply
the rules and regulations uniformly with respect to Tenant and any other tenants
in the Project under leases containing rules and regulations similar to this
Lease. All Work, alterations, repairs or improvements performed by Tenant shall
comply with the provisions of Section 6 of this Lease and any applicable
“Policies, Rules and Regulations for Construction Projects” which may be
reasonably established by Landlord and in effect at the time. Notwithstanding
the foregoing, Landlord shall be responsible for all ADA compliance costs
required to be incurred in connection with the common areas of the Project,
except that Tenant shall be solely responsible for all ADA compliance costs
which are required to be incurred in connection with the common areas of the
Project as a result of Tenant’s particular use or activities (e.g., alterations
or repairs). Tenant shall be solely responsible for all ADA compliance costs
which are required to be incurred within the Premises during the Term. Landlord
makes no representations or warranties regarding the Project’s or the Premises’
compliance with the ADA.

 

10. WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE

 

A. WAIVER OF CLAIMS.

 

To the extent permitted by law, Tenant waives any claims it may have against
Landlord or its officers, directors, employees or agents for business
interruption or damage to property sustained by Tenant as the result of any act
or omission of Landlord, its agents or employees.

 

B. INDEMNIFICATION.

 

To the extent permitted by law, Tenant shall indemnify, defend, and hold
Landlord harmless from any and all claims, liability, damage or loss, and from
and against any and all costs and expenses, including reasonable attorneys’
fees, arising out of: (a) any injury to or death of any person or damage to or
destruction of any property, from any cause whatsoever occurring in or about the
Premises or the Building or the Project, and, if occurring in or about any
portion of the common areas or elsewhere in or about the Building or the Project
other than the Premises, when such injury or damage shall be caused in whole or
in part by the act, neglect, default or omission of any duty by Tenant, its
agents, employees or invitees, or (b) activities of any of said persons in or
about or concerning the Premises, including any failure of Tenant to observe or
perform any of its obligations. The provisions of this Section 10.B shall
survive the expiration or termination of this Lease.

 

C. TENANT’S INSURANCE.

 

Tenant shall maintain insurance as follows:

 

(1) Commercial General Liability Insurance, with (a) contractual liability
including the indemnification provisions contained in this Lease, (b) a
severability of interest clause, (c) limits of not less than One Million Dollars
($1,000,000) combined single limit per occurrence and not less than Two Million
Dollars ($2,000,000) in the aggregate for bodily injury, sickness or death, and
property damage, and umbrella coverage of not less than Four Million Dollars
($4,000,000)

 

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(2) Property Insurance against “All Risks” of physical loss covering the
replacement cost of all Improvements. Tenant waives all rights of subrogation,
and Tenant’s property insurance shall include a waiver of subrogation in favor
of Landlord.

 

(3) Workers’ Compensation or similar insurance in form and amounts required by
law, and Employer’s Liability with not less than the following limits:

 

Each Accident

   $ 500,000

Disease - Policy Limit

   $ 500,000

Disease - Each Employee

   $ 500,000

 

(4) Such insurance which Tenant is required to maintain shall contain a waiver
of subrogation provision in favor of Landlord and its agent. If in the opinion
of Landlord’s insurance advisor, based on a substantial increase in recovered
liability claims, the aforesaid amounts of coverage are no longer adequate, then
such coverage shall be proportionately increased. Tenant’s commercial general
liability insurance shall be primary and not contributory to that carried by
Landlord, its agents, or mortgagee. Landlord, and if any, Landlord’s building
manager or agent, mortgagee and ground lessor shall be named as additional
insureds under Tenant’s commercial general liability insurance. The company or
companies writing any insurance which Tenant is required to maintain under this
Lease, as well as the form of such insurance, shall at all times be subject to
Landlord’s approval, and any such company shall be licensed to do business in
the State of California. Such insurance companies shall have an A.M. Best rating
of A-VI or better. Should this Lease be canceled due to damage or destruction to
or condemnation of the Premises and Tenant is thus relieved of its obligation to
restore or rebuild the improvements on the Premises, any insurance proceeds for
damage to the Premises, including all fixtures and leasehold improvements
thereon, shall belong to Landlord, free and clear of any claims by Tenant.

 

(5) Tenant shall cause any contractor of Tenant performing work on the Premises
to maintain insurance as follows, with such other terms, coverages and insurers,
as Landlord shall reasonably require from time to time:

 

(a) Commercial General Liability Insurance, including contractor’s liability
coverage, contractual liability coverage, completed operations coverage, broad
form property damage liability, and contractor’s protective liability coverage,
to afford protection with limits, for each occurrence, of not less than One
Million Dollars ($ 1,000,000) with respect to personal injury, death or property
damage.

 

(b) Workers’ Compensation or similar insurance in form and amounts required by
law, and Employer’s Liability with not less than the following limits:

 

Each Accident

   $ 500,000

Disease - Policy Limit

   $ 500,000

Disease - Each Employee

   $ 500,000

 

Such commercial general liability insurance shall contain a waiver of
subrogation provision in favor of Landlord and its agents. Tenant’s contractor’s
commercial general liability insurance shall be primary and not contributory to
that carried by Tenant, Landlord, their agents or mortgagees. Tenant and
Landlord, and if any, Landlord, mortgagee or ground lessor shall be named as
additional insured under Tenant’s contractor’s commercial general liability
insurance.

 

D. INSURANCE CERTIFICATES.

 

Tenant shall deliver to Landlord certificates evidencing all required insurance
prior to the Commencement Date and no later than no later than fifteen (15) days
prior to each renewal date. Each certificate will provide for thirty (30) days
prior written notice of cancellation or material modification to Landlord and
Tenant.

 

E. LANDLORD’S INSURANCE.

 

Landlord shall maintain “All-Risk” property insurance at replacement cost,
including loss of rents, on the Building, and Commercial General Liability
insurance policies covering the common areas of the Project, each with such
terms, coverages and conditions as are normally carried by reasonably prudent
owners of properties similar to the Project. The cost of any premium for
Landlord’s insurance shall be included as part of the Operating Costs. With
respect to property insurance, Landlord and Tenant mutually waive all rights of
subrogation, and the respective “All-Risk” coverage property insurance policies
carried by Landlord and Tenant shall contain enforceable waiver of subrogation
endorsements.

 

Any of the above coverages may be provided by any combination of primary and
excess insurance policies in Tenant’s reasonable discretion.

 

11. FIRE AND OTHER CASUALTY

 

A. TERMINATION.

 

If a fire or other casualty causes substantial damage to the Building or the
Premises, and sufficient insurance proceeds will be available to Landlord to
cover the cost of any restoration to the Building and Premises, Landlord shall
engage a registered architect to certify within one (1) month of the casualty to
both Landlord and Tenant the amount of time needed to restore the Building and
the Premises to tenantability, using standard working methods without the
payment of overtime and other premiums. If the time needed exceeds six (6)
months from the date of casualty, or two (2) months therefrom if the date of
casualty is within the last

 

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twelve (12) months of the term of this Lease, then in the case of the Premises,
either Landlord or Tenant may terminate this Lease, and in the case of the
Building, Landlord may terminate this Lease, by notice to the other party within
ten (10) days after the notifying party’s receipt of the architect’s
certificate. If sufficient insurance proceeds will not be available to Landlord
to cover the cost of any restoration to the Building or the Premises, Landlord
may terminate this Lease by written notice to Tenant. Any termination pursuant
to this Section 11.A shall be effective thirty (30) days from the date of such
termination notice and Rent shall be paid by Tenant to that date, with an
abatement for any portion of the space which is untenantable after the casualty
to the extent that Tenant does not use such space (or, if a portion of the space
is untenantable and the remaining portion cannot reasonably be used by Tenant
for the conduct of its business, the entire Rent shall be abated to the extent
that Tenant does not use any portion of the Premises).

 

B. RESTORATION.

 

If a casualty causes damage to the Building or the Premises but this Lease is
not terminated for any reason, then subject to the rights of any mortgagees or
ground lessors, Landlord shall obtain the applicable insurance proceeds and
diligently restore the Building and the Premises subject to current Governmental
Requirements. Landlord’s obligation, should it elect or be obligated to repair
or rebuild, shall be limited to the basic Premises, the building-standard tenant
improvements, or the basic Building, as the case may be, and Tenant shall, at
Tenant’s expense, replace or fully repair its damaged improvements (including
any Tenant Improvements in excess of the building standard), personal property
and fixtures. Rent shall be abated on a per diem basis during the restoration
for any portion of the Premises which is untenantable and not occupied by
Tenant, except to the extent that the casualty was caused by the negligence or
willful misconduct of Tenant, its agents or employees. Tenant shall not be
entitled to any compensation or damages from Landlord for loss of the use of the
Premises, damage to Tenant’s personal property and trade fixtures or any
inconvenience occasioned by such damage, repair or restoration. Tenant hereby
waives the provisions of Section 1932, Subdivision 2, and Section 1933,
Subdivision 4, of the California Civil Code, and the provisions of any similar
law hereinafter enacted.

 

12. EMINENT DOMAIN

 

If a part of the Project is taken by eminent domain or deed in lieu thereof
which is so substantial that the Premises cannot reasonably be used by Tenant
for the operation of its business, then either party may terminate this Lease
effective as of the date of the taking. If any substantial portion of the
Project is taken without affecting the Premises, then Landlord may terminate
this Lease as of the date of such taking. Rent shall abate from the date of the
taking in proportion to any part of the Premises taken, provided Tenant can
terminate this Lease if any material portion of the Premises is taken such that
the conduct of Tenant’s business activities is not reasonably possible. The
entire award for a taking of any kind shall be paid to Landlord, and Tenant
shall have no right to share in the award. All obligations accrued to the date
of the taking shall be performed by each party.

 

13. RIGHTS RESERVED TO LANDLORD

 

Landlord may exercise at any time any of the following rights respecting the
operation of the Project without liability to the Tenant of any kind:

 

A. NAME.

 

To change the name of all or any of the Buildings or the Project, or the street
address of the Buildings or the suite number(s) of the Premises.

 

B. SIGNS.

 

To install, modify and/or maintain any signs on the exterior and in the interior
of the Buildings or on the Project, and to approve at its sole discretion, prior
to installation, any of Tenant’s signs in the Premises visible from the common
areas or the exterior of the Building.

 

C. WINDOW TREATMENTS.

 

To approve, at its discretion, prior to installation, any shades, blinds,
ventilators or window treatments of any kind, as well as any lighting within the
Premises that may be visible from the exterior of the Building or any interior
common area.

 

D. KEYS.

 

To retain and use at any time passkeys to enter the Premises or any door within
the Premises. Tenant shall be required to obtain Landlord’s consent, which
consent shall not be unreasonably withheld, to install additional security
measures in the Premises (i.e. card reader), at Tenant’s sole cost and expense;
provided, however, that the installation and use of such security measures shall
not interfere with Landlord’s ability to access the Premises in emergencies.

 

E. ACCESS.

 

To have access to the Premises with twenty-four (24) hour prior notice (except
in the case of an emergency in which case Landlord shall have the right to
immediate access) to inspect the Premises, and to perform its obligations, or
make repairs, alterations, additions or improvements, as permitted by this
Lease. Landlord may make repairs required of Landlord under the terms hereof or
repairs to any adjoining space or utility services or make repairs, alterations
or additions to any other portion of the Building or Project, provided, however,
that all such work shall be done as promptly as reasonably possible, and so as
to cause as little interference to Tenant as reasonably possible. Tenant hereby
waives any claims for damages for any injury or inconvenience to or interference
with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises
or any other loss occasioned by such entry.

 

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F. PREPARATION FOR REOCCUPANCY.

 

To decorate, remodel, repair, alter or otherwise prepare the Premises for
reoccupancy at any time after Tenant abandons the Premises, without relieving
Tenant of any obligation to pay Rent.

 

G. HEAVY ARTICLES.

 

To approve the weight, size, placement and time and manner of movement within
the Building of any safe, central filing system or other heavy article of
Tenant’s property. Tenant shall move its property entirely at its own risk.

 

H. SHOW PREMISES.

 

To show the Premises to, prospective purchasers, brokers, lenders, mortgagees,
investors, rating agencies or others at any reasonable time, provided that
Landlord gives prior notice to Tenant and does not materially interfere with
Tenant’s use of the Premises; and to show the Premises to prospective tenants
during the last twelve (12) months of the Term, provided that Landlord gives at
least twenty-four (24) hour notice to Tenant and does not materially interfere
with Tenant’s use of the Premises.

 

I. [INTENTIONALLY OMITTED]

 

J. USE OF LOCKBOX.

 

To designate a lockbox collection agent for collections of amounts due Landlord.
In that case, the date of payment of Rent or other sums shall be the date of the
agent’s receipt of such payment or the date of actual collection if payment is
made in the form of a negotiable instrument thereafter dishonored upon
presentment; provided, however, that Landlord may reject such payment by mailing
to Tenant within a reasonable time after such receipt or collection a check
equal to the amount sent by Tenant.

 

K. REPAIRS AND ALTERATIONS.

 

To make repairs or alterations to the Project and in doing so transport any
required material through the Premises, to close entrances, doors, corridors,
elevators and other facilities in the Project, to open any ceiling in the
Premises, or to temporarily suspend services or use of common areas in the
Building; provided, however, that in taking such actions Landlord shall endeavor
to avoid any unreasonable interference with Tenant’s use and enjoyment of the
Premises. Landlord may reasonably perform any such repairs or alterations during
ordinary business hours, except that Tenant may require any work in the Premises
to be done after business hours if Tenant pays Landlord for overtime and any
other expenses incurred. Landlord may do or permit any work on any nearby
building, land, street, alley or way.

 

L. LANDLORD’S AGENTS.

 

If Tenant is in default under this Lease, possession of Tenant’s funds or
negotiation of Tenant’s negotiable instrument by any of Landlord’s agents shall
not waive any breach by Tenant or any remedies of Landlord under this Lease.

 

M. BUILDING SERVICES.

 

To install, use and maintain through the Premises, pipes, conduits, wires and
ducts serving the Building, provided that such installation, use and maintenance
does not unreasonably interfere with Tenant’s use of the Premises.

 

N. USE OF ROOF.

 

To install, operate, maintain and repair any satellite dish, antennae,
equipment, or other facility on the roof of the Building or to use the roof of
the Building in any other manner, provided that such installation, operation,
maintenance, repair or use does not unreasonably interfere with Tenant’s use of
the Premises.

 

O. OTHER ACTIONS.

 

To take any other action which Landlord deems reasonable in connection with the
operation, maintenance or preservation of the Building and the Premises.

 

14. TENANT’S DEFAULT

 

Any of the following shall constitute a default by Tenant:

 

A. RENT DEFAULT.

 

Tenant fails to pay any Rent when due;

 

B. ASSIGNMENT/SUBLEASE OR HAZARDOUS SUBSTANCES DEFAULT.

 

Tenant defaults in its obligations under Section 19 Assignment and Sublease or
Section 30 Hazardous Substances;

 

C. OTHER PERFORMANCE DEFAULT.

 

Tenant fails to perform any other obligation to Landlord under this Lease, and
this failure continues for fifteen (15) days after written notice from Landlord,
except that if Tenant begins to cure its failure within the fifteen (15) day
period but cannot reasonably complete its cure within such period, then, so long
as Tenant continues to diligently attempt to cure its failure, the fifteen (15)
day period shall be extended to sixty (60) days, or such lesser period as is
reasonably necessary to complete the cure;

 

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D. CREDIT DEFAULT.

 

One of the following credit defaults occurs:

 

(1) Tenant commences any proceeding under any law relating to bankruptcy,
insolvency, reorganization or relief of debts, or seeks appointment of a
receiver, trustee, custodian or other similar official for the Tenant or for any
substantial part of its property, or any such proceeding is commenced against
Tenant and either remains undismissed for a period of thirty (30) days or
results in the entry of an order for relief against Tenant which is not fully
stayed within seven (7) days after entry;

 

(2) Tenant becomes insolvent or bankrupt, does not generally pay its debts as
they become due, or admits in writing its inability to pay its debts, or makes a
general assignment for the benefit of creditors;

 

(3) Any third party obtains a levy or attachment under process of law against
Tenant’s leasehold interest.

 

E. VACATION OR ABANDONMENT DEFAULT.

 

Tenant vacates or abandons the Premises.

 

15. LANDLORD REMEDIES

 

Upon a default, Landlord shall have the following remedies, in addition to all
other rights and remedies provided by law or otherwise provided in this Lease,
to which Landlord may resort cumulatively or in the alternative:

 

A. TERMINATION OF LEASE OR POSSESSION.

 

If Tenant defaults, Landlord may elect by notice to Tenant either to terminate
this Lease or to terminate Tenant’s possession of the Premises without
terminating this Lease. In either case, Tenant shall immediately vacate the
Premises and deliver possession to Landlord, and Landlord may repossess the
Premises and may, at Tenant’s sole cost, remove any of Tenant’s signs and any of
its other property, without relinquishing its right to receive Rent or any other
right against Tenant. In the latter case, this Lease shall continue in full
force and effect as long as Landlord does not terminate this Lease, and Landlord
shall have the right to collect Rent when due.

 

B. POSSESSION TERMINATION DAMAGES.

 

If Landlord elects to terminate Tenant’s possession without terminating this
Lease and Landlord takes possession of the Premises itself, then Landlord may
re-let for Tenant’s account all or any portion of the Premises for such rent,
length of time and other terms as Landlord in its sole discretion shall
determine, without any obligation to do so prior to renting other vacant areas
in the Building. Tenant shall be liable immediately to Landlord for all costs
Landlord incurs in re-letting the Premises or any part thereof, including,
without limitation, broker’s commissions, expenses of cleaning and redecorating
the Premises required by the reletting and like costs. Tenant shall pay to
Landlord the Rent and other sums due under this Lease on the date the Rent is
due, less the rent and other sums received by Landlord from any releasing of the
Premises. No act by Landlord other than giving written notice to Tenant shall
terminate this Lease. Acts of maintenance, efforts to relet the Premises or the
appointment of a receiver on Landlord’s initiative to protect Landlord’s
interest under this Lease shall not constitute a termination of Tenant’s right
to possession.

 

C. LEASE TERMINATION DAMAGES.

 

If Landlord elects to terminate this Lease, then this Lease shall terminate on
the date for termination set forth in such notice. Tenant shall immediately
vacate the Premises and deliver possession to Landlord, and Landlord may
repossess the Premises and may, at Tenant’s sole cost, remove any of Tenant’s
signs and any of its other property, without relinquishing its right to receive
Rent or any other right against Tenant. On termination, Landlord has the right
to recover from Tenant as damages:

 

(1) The worth at the time of award of unpaid Rent and other sums due and payable
which had been earned at the time of termination; plus

 

(2) The worth at the time of award of the amount by which the unpaid Rent and
other sums due and payable which after termination until the time of award
exceeds the amount of such Rent loss that Tenant proves could have been
reasonably avoided; plus

 

(3) The worth at the time of award of the amount by which the unpaid Rent and
other sums due and payable for the balance of the Term after the time of award
exceeds the amount of such Rent loss that Tenant proves could be reasonably
avoided; plus

 

(4) Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform Tenant’s obligations under
this Lease, or which, in the ordinary course of things, would be likely to
result therefrom, including, without limitation, any costs or expenses incurred
by Landlord: (i) in retaking possession of the Premises; (ii) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering or
rehabilitating the Premises or any portion thereof, including such acts for
re-letting to a new tenant or tenants; (iii) for leasing commissions; or (iv)
for any other costs necessary or appropriate to re-let the Premises; plus

 

(5) At Landlord’s election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by the laws of the State of
California. The “worth at the time of award” of the amounts referred to in
Sections 15.C (l) and 15.C (2) is computed by allowing interest at the maximum
rate permitted by law on the unpaid rent and other sums due and payable from the
termination date through the date of award. The “worth at the time of award” of
the amount referred to in Section 15.C (3) is computed by

 

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discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%). Tenant waives redemption
or relief from forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other present or future law, in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any default of
Tenant hereunder.

 

D. CONTINUATION OF LEASE.

 

In the event Tenant breaches this Lease and abandons the Premises and Landlord
does not elect to terminate this Lease by reason of such breach and abandonment,
this Lease shall continue in full force and effect, and in addition to any other
rights and remedies Landlord may have, Landlord shall have all of the rights and
remedies of a landlord provided by Section 1951.4 of the California Civil Code,
including the right to recover rent as it falls due. Without any obligation to
Tenant to do so, Landlord may also re-let the Premises as the agent of Tenant
and for Tenant’s account for such term, which may extend beyond the term of this
Lease, and upon such other reasonable terms and conditions as Landlord may deem
appropriate. Landlord may do all things reasonably necessary for such
re-letting, including repair, remodeling and renovating of the Premises, and
Tenant shall reimburse Landlord on demand for all reasonable costs incurred by
Landlord in connection therewith. In the event Landlord re-lets the Premises,
Landlord shall apply any sums received upon such re-letting in the following
order of priority: (1) to the payment of any indebtedness other than rent due
hereunder from Tenant to Landlord, (2) the payment of all reasonable legal
expenses and other related costs incurred by Landlord following Tenant’s
default, (3) to the payment of all costs incurred by Landlord in restoring the
Premises to good order and repair, or in remodeling, renovating or otherwise
preparing the Premises for reletting, (4) to the payment of all costs
(including, without limitation, any brokerage commissions) incurred by Landlord
in reletting the Premises, (5) to the payment of rent due and unpaid hereunder,
and (6) the balance, if any, to the payment of future rent as the same may
become due hereunder. Notwithstanding any determination by Landlord not to elect
to terminate this Lease, Landlord may at any time elect to terminate this Lease
for any previous breach or default hereunder by Tenant which remains uncured or
for any subsequent breach or default.

 

E. LANDLORD’S REMEDIES CUMULATIVE.

 

All of Landlord’s remedies under this Lease shall be in addition to all other
remedies Landlord may have at law or in equity. Waiver by Landlord of any breach
of any obligation by Tenant shall be effective only if it is in writing, and
shall not be deemed a waiver of any other breach, or any subsequent breach of
the same obligation. Landlord’s acceptance of payment by Tenant shall not
constitute a waiver of any breach by Tenant, and if the acceptance occurs after
Landlord’s notice to Tenant, or termination of the Lease or of Tenant’s right to
possession, the acceptance shall not affect such notice or termination.
Acceptance of payment by Landlord after commencement of a legal proceeding or
final judgment shall not affect such proceeding or judgment. Landlord’s
acceptance of payment from Tenant of less than the amount of rent then due shall
not constitute a waiver of any rights of Landlord or Tenant including, without
limitation, any right of Landlord to recover possession of the Property.
Landlord may advance such monies and take such other actions for Tenant’s
account as reasonably may be required to cure or mitigate any default by Tenant.
Tenant shall immediately reimburse Landlord for any such advance, and such sums
shall bear interest at the default interest rate until paid. All payments made
by Tenant in cure of any default under this Lease must be made by personal
delivery (including, but not limited to, by messenger or overnight delivery
service) to Landlord or its designated Agent and not to any mailbox or lock box.

 

F. WAIVER OF TRIAL BY JURY.

 

EACH PARTY WAIVES TRIAL BY JURY IN THE EVENT OF ANY LEGAL PROCEEDING BROUGHT BY
THE OTHER IN CONNECTION WITH THIS LEASE. EACH PARTY SHALL BRING ANY ACTION
AGAINST THE OTHER IN CONNECTION WITH THIS LEASE IN A FEDERAL OR STATE COURT
LOCATED IN CALIFORNIA, CONSENTS TO THE JURISDICTION OF SUCH COURTS, AND WAIVES
ANY RIGHT TO HAVE ANY PROCEEDING TRANSFERRED FROM SUCH COURTS ON THE GROUND OF
IMPROPER VENUE OR INCONVENIENT FORUM. LANDLORD AND TENANT EACH HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY
AGAINST THE OTHER IN CONNECTION WITH THIS LEASE OR THE PREMISES.

 

G. LITIGATION COSTS.

 

Tenant shall pay Landlord’s reasonable attorneys’ fees and other costs in
enforcing this Lease, whether or not suit is filed.

 

16. SURRENDER

 

Upon the expiration or earlier termination of this Lease for any reason, Tenant
shall surrender the Premises to Landlord in its condition existing as of the
Commencement Date, normal wear and tear and damage by fire or other casualty
excepted, with all provided furniture in good condition and repair, all interior
walls repaired damaged, all carpets shampooed and cleaned, all broken, marred or
nonconforming acoustical ceiling tiles replaced, the HVAC, plumbing and
electrical systems and lighting in good order and repair, including replacement
of any burned out or broken light bulb or ballasts, and all floors cleaned and
waxed, all to the reasonable satisfaction of Landlord. Tenant shall remove from
the Premises all Tenant’s personal property and all of Tenant’s alterations
required to be removed pursuant to Section 6.E, and restore the Premises to its
condition prior to their installation. If Tenant fails to remove any alterations
and/or Tenant’s personal property, and such failure continues after the
termination of this Lease, Landlord may retain or dispose of such property and
all rights of Tenant with respect to it shall cease, or Landlord may place all
or any portion of such property in public storage for Tenant’s account. Tenant
shall be liable to Landlord for costs of removal of any such alterations and
Tenant’s personal property and storage and transportation costs of same, and the
cost of repairing and restoring the Premises, together with interest at the
Default Rate from the date of

 

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expenditure by Landlord. If the Premises are not so surrendered at the
termination of this Lease, Tenant shall indemnify Landlord against all loss or
liability, including attorneys’ fees and costs, resulting from delay by Tenant
in so surrendering the Premises.

 

17. HOLDOVER

 

Tenant shall have no right to holdover possession of the Premises after the
expiration or termination of this Lease without Landlord’s prior written consent
which Landlord may withhold in its sole and absolute discretion. If, however,
Tenant retains possession of any part of the Premises after the Term, Tenant
shall become a month-to-month tenant for the entire Premises upon all of the
terms of this Lease as might be applicable to such month-to-month tenancy,
except that Tenant shall pay all of the Base Rent, Operating Cost Share Rent and
Tax Share Rent at one hundred fifty percent (150%) of the rate in effect
immediately prior to such holdover, computed on a monthly basis for each full or
partial month Tenant remains in possession. Tenant shall also pay Landlord all
of Landlord’s direct and consequential damages resulting from Tenant’s holdover.
No acceptance of Rent or other payments by Landlord under these holdover
provisions shall operate as a waiver of Landlord’s right to regain possession or
any other of Landlord’s remedies.

 

18. SUBORDINATION TO GROUND LEASES AND MORTGAGES

 

A. SUBORDINATION.

 

This Lease shall be subordinate to any present or (provided that the applicable
ground lessor or mortgagee provides a non-disturbance agreement as described
below in this Section 18.A) future ground lease or mortgage respecting the
Project, and any amendments to such ground lease or mortgage, at the election of
the ground lessor or mortgagee as the case may be, effected by notice to Tenant
in the manner provided in this Lease. The subordination shall be effective upon
such notice, but at the request of Landlord or ground lessor or mortgagee,
Tenant shall within ten (10) days of the request, execute and deliver to the
requesting party any reasonable documents provided to evidence the
subordination. At any time that the Project is made subject to any ground lease
or mortgage, Landlord shall use commercially reasonable efforts to cause the
mortgagee or ground lessor to deliver to Tenant a non-disturbance agreement in
customary form, providing that so long as Tenant is not in default under the
Lease after the expiration of any applicable notice and cure periods, Tenant may
remain in possession of the Premises under the terms of this Lease, even if the
ground lessor should terminate the ground lease or if the mortgagee or its
successor should acquire Landlord’s title to the Project.

 

B. TERMINATION OF GROUND LEASE OR FORECLOSURE OF MORTGAGE.

 

If any ground lease is terminated or mortgage foreclosed or deed in lieu of
foreclosure given and the ground lessor, mortgagee, or purchaser at a
foreclosure sale shall thereby become the owner of the Project, Tenant shall
attorn to such ground lessor or mortgagee or purchaser without any deduction or
setoff by Tenant, and this Lease shall continue in effect as, a direct lease
between Tenant and such ground lessor, mortgagee or purchaser. The ground lessor
or mortgagee or purchaser shall be liable as Landlord only during the time such
ground lessor or mortgagee or purchaser is the owner of the Project. At the
request of Landlord, ground lessor or mortgagee, Tenant shall execute and
deliver within ten (10) days of the request any document furnished by the
requesting party to evidence Tenant’s agreement to attorn.

 

C. DEFINITIONS.

 

As used in this Section 18.C, “mortgage” shall include “trust deed” and “deed of
trust”, “mortgagee” shall include ‘“trustee,” “beneficiary” and the mortgagee of
any ground lessee, and “ground lessor”, “mortgagee”, and “purchaser at a
foreclosure sale” shall include, in each case, all of its successors, and
assigns, however remote.

 

19. ASSIGNMENT AND SUBLEASE

 

A. IN GENERAL.

 

Tenant shall not, without the prior consent of Landlord in each case, (i) make
or allow any assignment or transfer, by operation of law or otherwise, of any
part of Tenant’s interest in this Lease, (ii) grant or allow any lien or
encumbrance, by operation of law or otherwise, upon any part of Tenant’s
interest in this Lease, (iii) sublet any part of the Premises, or (iv) permit
anyone other than Tenant and its employees to occupy any part of the Premises.
Tenant shall remain primarily liable for all of its obligations under this
Lease, notwithstanding any assignment or transfer. No consent granted by
Landlord shall be deemed to be a consent to any subsequent assignment or
transfer, lien or encumbrance, sublease or occupancy. Tenant shall pay all of
Landlord’s attorneys’ fees and other expenses incurred in connection with any
consent requested by Tenant or in reviewing any proposed assignment or
subletting. Any assignment or transfer, grant of lien or encumbrance, or
sublease or occupancy to a party other than an Affiliate (as defined in Section
19.H) without Landlord’s prior written consent shall be void. If Tenant shall
assign this Lease or sublet the Premises in its entirety to a party other than
an Affiliate, any rights of Tenant to renew this Lease, extend the Term or to
lease additional space in the Project shall be extinguished thereby and will not
be transferred to the assignee or subtenant, all such rights being personal to
the Tenant named herein.

 

“Assign” or “Assignment” As used in this paragraph, the term “assign” or
“assignment” shall include the following:

 

(1) If Tenant is a corporation: (1) any dissolution, merger, consolidation, or
other reorganization of Tenant; (2) a sale of more than 10% of the value of the
assets of Tenant; or (3) if Tenant is a corporation with fewer than 35
shareholders, a sale or other transfer of more than 50%, at any one time or in
the aggregate, of the capital stock of Tenant.

 

(2) If Tenant is a trust, the transfer of more than 50% of the beneficial
interests in Tenant, or the dissolution of the trust;

 

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(3) If Tenant is a partnership or limited liability company, the transfer of the
interest of any general partner or member, the withdrawal of any general partner
or member, or the dissolution of the partnership or limited liability company;

 

(4) If Tenant is composed of tenants-in-common, the transfer of the interest of
any co-tenant or the partition or dissolution of the co-tenancy.

 

B. LANDLORD’S CONSENT.

 

Landlord will not unreasonably withhold its consent to any proposed assignment
or subletting. It shall be reasonable for Landlord to withhold its consent to
any assignment or sublease if (i) Tenant is in default under this Lease, (ii)
the proposed assignee or sublessee is a tenant in the Project or an affiliate of
such a tenant or a party that Landlord has identified as a prospective tenant in
the Project, (iii) the financial responsibility, nature of business, and
character of the proposed assignee or subtenant are not all reasonably
satisfactory to Landlord, (iv) in the reasonable judgment of Landlord the
purpose for which the assignee or subtenant intends to use the Premises (or a
portion thereof) is not in keeping with Landlord’s standards for the Building or
are in violation of the terms of this Lease or any other leases in the Project,
(v) the proposed assignee or subtenant is a government entity, or (vi) the
proposed sublease is for less than the entire Premises. The foregoing shall not
exclude any other reasonable basis for Landlord to withhold its consent.

 

C. PROCEDURE.

 

Tenant shall notify Landlord of any proposed assignment or sublease at least
thirty (30) days prior to its proposed effective date. The notice shall include
the name and address of the proposed assignee or subtenant, its corporate
affiliates in the case of a corporation and its partners in a case of a
partnership, an execution copy of the proposed assignment or sublease, and
sufficient information to permit Landlord to determine the financial
responsibility and character of the proposed assignee or subtenant. As a
condition to any effective assignment of this Lease, the assignee shall execute
and deliver in form satisfactory to Landlord at least fifteen (15) days prior to
the effective date of the assignment, an assumption of all of the obligations of
Tenant under this Lease. As a condition to any effective sublease, subtenant
shall execute and deliver in a form satisfactory to Landlord at least fifteen
(15) days prior to the effective date of the sublease, an agreement to comply
with all of Tenant’s obligations under this Lease, and at Landlord’s option, an
agreement (except for the economic obligations which subtenant will undertake
directly to Tenant) to attorn to Landlord under the terms of the sublease in the
event this Lease terminates before the sublease expires.

 

D. EXCESS PAYMENTS.

 

If Tenant shall assign this Lease or sublet any part of the Premises for
consideration in excess of the prorata portion of Rent applicable to the space
subject to the assignment or sublet, then Tenant shall pay to Landlord as
Additional Rent seventy-five Percent (75%) of such excess immediately upon
receipt; provided that prior to sharing such excess rent with Landlord, Tenant
shall be first entitled to reimburse itself for all reasonable leasing
commissions, attorneys’ fees and tenant improvements costs, which were
specifically and reasonably incurred in connection with such assignment of this
Lease or sublet of the Premises.

 

E. RECAPTURE.

 

For any proposed sublease which would sublet a portion of the Premises for the
remainder of the Term, or assignment which would assign this Lease for the
remainder of the Term, Landlord may, by giving written notice to Tenant within
thirty (30) days after receipt of Tenant’s notice of assignment or subletting,
terminate this Lease with respect to the space described in Tenant’s notice, as
of the effective date of the proposed assignment or sublease and all obligations
under this Lease as to such space shall expire except as to any obligations that
expressly survive any termination of this Lease.

 

F. EFFECTIVENESS OF CONSENT.

 

Provided Landlord has consented to such assignment or subletting, Tenant shall
be free to assign this Lease or sublet the Premises, subject to the following
conditions: (1) at the time of the transfer, Tenant is not in default under the
Lease or would not be in default under the Lease but for the pendency of any
grace or cure period; (2) the assignment or subletting shall be on the same
terms set forth in the notice given by Tenant to Landlord; (3) assignment or
sublease shall be valid and no sublessee shall take possession of the Premises
until an executed counterpart of the assignment or sublease has been delivered
to Landlord; and no assignee or sublessee shall have a right further to sublet.

 

G. TENANT’S WAIVER.

 

Tenant shall not be entitled to, and Tenant hereby waives any right it may have
to make any claim for, money damages (nor shall Tenant claim any money damages
by way of set-off, counterclaim or defense) based upon any claim or assertion by
Tenant that Landlord has unreasonably withheld or unreasonably delayed its
consent or approval to a proposed assignment or subletting or as provided for
herein. Tenant’s sole remedy shall be an action or proceeding to enforce any
provision hereof, or for specific performance, injunction or declaratory
judgment. Tenant acknowledges that Tenant’s rights hereunder satisfy the
conditions set forth in Section 1951.4 of the California Civil Code with respect
to the availability to Landlord of certain remedies for a default by Tenant
under this Lease, and which provides, in part: “The lessor has the remedy
described in California Civil Code Section 1951.4 (lessor may continue the 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).”

 

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H. TRANSFER TO AFFILIATES.

 

Notwithstanding the provisions of this Section 19, Tenant may assign this Lease
or sublet any part of the Premises without Landlord’s consent to an Affiliate
(as defined below) provided that the following conditions have been met:

 

(1) The Affiliate has a net worth that is sufficient, as determined by Landlord
in its reasonable discretion, to assure the performance of its obligations under
this Lease (or, if applicable, its sublease under this Lease);

 

(2) Tenant shall have given Landlord thirty (30) days’ prior notice of the
proposed assignment or subletting;

 

(3) Tenant shall not be in default under any provision of this Lease at the time
of such assignment or subletting;

 

(4) The Affiliate furnishes Landlord at least thirty (30) days’ prior to the
effective date of said assignment or subletting a written instrument
satisfactory to Landlord agreeing to assume and be bound by all the conditions,
obligations, and agreements contained in this Lease; and

 

(5) The Affiliate is not a subterfuge by Tenant to avoid its obligations under
this Lease.

 

As used in this Section 19.H., an “Affiliate” means any entity that controls, is
controlled by or is under common control with Tenant. “Control” means the direct
or indirect ownership of more than fifty percent (50%) of the voting securities
of an entity or possession of the right to vote more than fifty percent (50%) of
the voting interest in the ordinary direction of the entities affairs.

 

Notwithstanding any provisions in this Section 19, if an assignment or sublet is
permitted without Landlord’s consent under this Section 19.H., Landlord shall
not be entitled to any excess payments as provided in Section 19.D. above.

 

I. CONTINUING LIABILITY OF TENANT.

 

Regardless of Landlord’s consent, no subletting or assignment shall release
Tenant of Tenant’s obligation or alter the primary liability of Tenant to pay
the rental and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of rental by Landlord from another person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee or successor. Landlord may consent to subsequent
assignments or subletting of this Lease or amendments or modifications to this
Lease with assignees of Tenant, without notifying Tenant, or any successor of
Tenant, and without obtaining its or their consent thereto, and such action
shall not relieve Tenant of liability under this Lease.

 

20. CONVEYANCE BY LANDLORD

 

If Landlord shall at any time transfer its interest in the Project or this
Lease, Landlord shall be released of any obligations occurring after such
transfer, except the obligation to return to Tenant any security deposit not
delivered to its transferee, and Tenant shall look solely to Landlord’s
successors for performance of such obligations. This Lease shall not be affected
by any such transfer.

 

21. ESTOPPEL CERTIFICATE

 

Tenant shall, within ten (10) business days of receiving a request from
Landlord, execute, acknowledge in recordable form, and deliver to Landlord or
its designee a certificate stating, subject to a specific statement of any
applicable exceptions, that the Lease as amended to date is in full force and
effect, that Tenant is paying Rent and other charges on a current basis, and
that to the best of the knowledge of Tenant, there are no uncured defaults and
Tenant has no offsets or claims. Tenant may also be required to state the date
of commencement of payment of Rent, the Commencement Date, the Expiration Date,
the Base Rent, the current Operating Cost Share Rent and Tax Share Rent
estimates, the status of any improvements required to be completed by Landlord,
the amount of any security deposit, and such other matters as may be reasonably
requested. Failure to deliver such statement within the time required shall be
conclusive evidence against the Tenant that the information set forth in the
requested certificate is true and correct.

 

22. LEASE DEPOSIT

 

Tenant shall deposit with Landlord on the date Tenant executes and delivers this
Lease to Landlord, the cash sums or Letter of Credit set forth in the Schedule
for both Prepaid Rent and Security Deposit (collectively, the “Lease Deposit”).
The Prepaid Rent shall be applied by Landlord against the first full month’s
Base Rent payment obligation hereunder. The Security Deposit shall be held by
Landlord as security for the performance of all of its obligations in the amount
set forth on the Schedule. If Tenant defaults under this Lease, Landlord may
apply all or any part of the Lease Deposit for the payment of any Rent or other
sum in default, the repair of any damage to the Premises caused by Tenant or the
payment of any other amount which Landlord may spend or become obligated to
spend by reason of Tenant’s default or to compensate Landlord for any other loss
or damage which Landlord may suffer by reason of Tenant’s default to the full
extent permitted by law. Tenant hereby waives any restriction on the use or
application of the Security Deposit by Landlord as set forth in California Civil
Code Section 1950.7. To the extent any portion of the Security Deposit is used,
Tenant shall within five (5) days after demand from Landlord restore the
Security Deposit to

 

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its full amount. No trust relationship is created herein between Landlord and
Tenant with respect to the security deposit. Landlord may keep the Security
Deposit in its general funds and shall not be required to pay interest to Tenant
on the deposit amount. If Tenant shall perform all of its obligations under this
Lease and return the Premises to Landlord at the end of the Term, Landlord shall
return all of the remaining Security Deposit to Tenant within thirty (30) days
after the end of the Term provided, however, that Landlord may retain the
Security Deposit as security for the payment of any adjustment in rent or
additional rent following an expiration or termination of the Lease, and, upon
such adjustment apply the retained Security Deposit against the amount due
Landlord. The Security Deposit shall not serve as an advance payment of Rent or
a measure of Landlord’s damages for any default under this Lease. If Landlord
transfers its interest in the Project or this Lease, Landlord shall transfer the
Security Deposit to its transferee. Upon such transfer, Landlord shall have no
further obligation to return the Security Deposit to Tenant, and Tenant’s right
to the return of the Security Deposit shall apply solely against Landlord’s
transferee.

 

With respect to the entire amount or a portion of the Lease Deposit to be
maintained in the form of a letter of credit, Tenant shall deliver to Landlord
an unconditional, clean, irrevocable letter of credit (the “L-C”), with an
expiration date not earlier than twelve (12) months after the date of issuance,
in the amount set forth in the Schedule, which L-C shall be issued by a
money-center bank (a bank which accepts deposits, maintains accounts, has a San
Francisco Bay Area office which will negotiate a letter of credit, and whose
deposits are insured by the FDIC) reasonably acceptable to Landlord, and which
L-C shall be in a form and content reasonably approved by Landlord. Tenant shall
pay all expenses, points and/or fees incurred by Tenant in obtaining the L-C.

 

The L-C shall not be mortgaged, assigned or encumbered in any manner whatsoever
by Tenant without the prior written consent of Landlord. If Tenant defaults with
respect to any provisions of this Lease, including, but not limited to, the
provisions relating to the payment of Rent, or if Tenant fails to renew the L-C
at least thirty (30) days before its expiration, Landlord may, but shall not be
required to, draw upon all or such portion of the L-C for payment of any Rent or
any other sum in default, or for the payment of any amount that Landlord may
spend or may 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, or if Tenant fails to renew the L-C at least thirty
(30) days before its expiration. The use, application or retention of the L-C,
or any portion thereof, by Landlord shall not (a) prevent Landlord from
exercising any other right or remedy provided by this Lease or by law, it being
intended that Landlord shall not first be required to proceed against the L-C,
nor (b) operate as a limitation on any recovery to which Landlord may otherwise
be entitled. Any amount of the L-C which is drawn upon by Landlord, but is not
used or applied by Landlord, shall be held by Landlord and deemed a security
deposit (the “L-C Security Deposit”) and shall be held and treated in accordance
with this Section 22. If any portion of the L-C is drawn upon, Tenant shall,
within five (5) days after written demand therefor, either (i) deposit cash with
Landlord (which cash shall be applied by Landlord to the L-C Security Deposit)
in an amount sufficient to cause the sum of the L-C Security Deposit and the
amount of the remaining L-C to be equivalent to the amount of the L-C Security
Deposit then required under this Lease or (ii) reinstate the L-C to the amount
then required under this Lease, and if any portion of the L-C Security Deposit
is used or applied, Tenant shall, within five (5) days after written demand
therefor, deposit cash with Landlord (which cash shall be applied by Landlord to
the L-C Security Deposit) in an amount sufficient to restore the L-C Security
Deposit to the amount then required under this Lease, and Tenant’s failure to do
so shall be a default under this Lease. Tenant acknowledges that Landlord has
the right to transfer or mortgage its interest in the Building and in this Lease
and Tenant agrees that in the event of any such transfer or mortgage, Landlord
shall have the right to transfer or assign the L-C Security Deposit and/or the
L-C to the transferee or mortgagee (and, if requested by Landlord, Tenant shall
(i) pay all transfer fees charged by the issuer of the L-C for such transfer and
(ii) at Tenant’s sole cost and expense, arrange to have a substitute L-C issued
to the transferee in the form and substance required hereunder), and in the
event of such transfer, Tenant shall look solely to such transferee or mortgagee
for the return of the L-C Security Deposit and/or the L-C.

 

If Landlord has not received written notice at least thirty (30) days prior to
expiration from the issuing bank (or appropriate substitute bank) that the L-C
has been renewed, then Landlord shall have the right, at its sole option, to
draw upon and present the then existing L-C for the entire amount available
thereunder. Should the L-C then in effect be revoked or should the
creditworthiness of the issuer of the L-C then in effect become impaired (in
Landlord’s reasonable judgment), then Tenant shall deliver a replacement L-C in
the form and substance required hereunder.

 

23. FORCE MAJEURE

 

Landlord shall not be in default under this Lease to the extent Landlord is
unable to perform any of its obligations on account of any prevention, delay,
stoppage due to strikes, lockouts, inclement weather, labor disputes, inability
to obtain labor materials, fuels, energy or reasonable substitutes therefor,
governmental restrictions, regulations: controls, actions or inaction, civil
commotion, fire or other acts of God, acts of war, terrorism, bioterrorism,
national emergency, or any other cause of any kind beyond the reasonable control
of Landlord (except financial inability) (collectively “Force Majeure”).

 

24. [INTENTIONALLY OMITTED]

 

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25. NOTICES

 

All notices, consents, approvals and similar communications to be given by one
party to the other under this Lease, shall be given in writing, mailed or
personally delivered as follows:

 

To LANDLORD as follows:

  OTR         c/o SEAGATE PROPERTIES, INC.         980 Fifth Avenue         San
Rafael, CA 94901         Attention:    Leasing Manager

 

with a copy (but which copy shall not constitute Notice) to:

 

    OTR         275 East Broad Street         Columbus, OH 43215-3771        
Attention:    Director, Real Estate    

 

or to such other person at such other address as Landlord may designate by
notice to Tenant.

 

To TENANT as follows:

  SEE SECTION 1 OF THE SCHEDULE

 

or to such other person at such other address as Tenant may designate by notice
to Landlord. Mailed notices shall be sent by United States certified or
registered mail, or by a reputable national overnight courier service, postage
prepaid. Mailed notices shall be deemed to have been given on the earlier of
actual delivery or three (3) business days after posting in the United States
Mail in the case of registered or certified mail, and one business day in the
case of overnight courier.

 

26. QUIET POSSESSION

 

So long as Tenant shall perform all of its obligations under this Lease, Tenant
shall enjoy peaceful and quiet possession of the Premises against any party
claiming through the Landlord, subject to the terms of this Lease.

 

27. REAL ESTATE BROKER

 

Tenant represents to Landlord that Tenant has not dealt with any real estate
broker with respect to this Lease except for any broker(s) listed in the
Schedule. Tenant shall indemnify and defend Landlord against any claims by any
other broker or third party, with which Tenant may have dealt with respect to
this Lease, for any payment of any kind in connection with this Lease.

 

28. MISCELLANEOUS

 

A. SUCCESSORS AND ASSIGNS.

 

Subject to the limits on Tenant’s assignment contained in Section 19, the
provisions of this Lease shall be binding upon and inure to the benefit of all
successors and assigns of Landlord and Tenant.

 

B. DATE PAYMENTS ARE DUE.

 

Except for payments to be made by Tenant under this Lease which are due upon
demand, Tenant shall pay to Landlord any amount for which Landlord renders a
statement of account within fifteen (15) days of Tenant’s receipt of Landlord’s
statement.

 

Meaning of “Landlord,” “Re-Entry,” “Including,” “Affiliate” and “Control”

 

The term “Landlord” means only the owner of the Project and the lessor’s
interest in this Lease from time to time. The words “re-entry” and “re-enter”
are not restricted to their technical legal meaning. The words “including” and
similar words shall mean “including, without limitation.” The word “affiliate”
shall mean a person or entity controlling, controlled by or under common control
with the applicable entity. “Control” shall mean the power directly or
indirectly, by contract or otherwise, to direct the management and policies of
the applicable entity.

 

C. TIME OF THE ESSENCE.

 

Time is of the essence of each provision of this Lease.

 

D. NO OPTION.

 

This document shall not be effective for any purpose until it has been executed
and delivered by both parties; execution and delivery by one party shall not
create any option or other right in the other party.

 

E. SEVERABILITY.

 

The unenforceability of any provision of this Lease shall not affect any other
provision.

 

F. GOVERNING LAW.

 

This Lease shall be governed in all respects by the laws of the state in which
the Project is located, without regard to the principles of conflicts of laws.

 

G. LEASE MODIFICATION.

 

Tenant agrees to clarify this Lease in any way requested by a mortgagee which
does not cause increased expense to Tenant or otherwise adversely affect
Tenant’s interests under this Lease.

 

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H. NO ORAL MODIFICATION.

 

No modification of this Lease shall be effective unless it is a written
modification signed by both parties.

 

I. LANDLORD’S RIGHT TO CURE.

 

If Landlord breaches any of its obligations under this Lease, Tenant shall
notify Landlord in writing and shall take no action respecting such breach so
long as Landlord promptly begins to cure the breach and diligently pursues such
cure to its completion. Landlord may cure any default by Tenant; any expenses
incurred shall become Additional Rent due from Tenant on demand by Landlord.

 

J. CAPTIONS.

 

The captions used in this Lease shall have no effect on the construction of this
Lease.

 

K. AUTHORITY.

 

Landlord and Tenant each represents to the other that it has full power and
authority to execute and perform this Lease.

 

L. LANDLORD’S ENFORCEMENT OF REMEDIES.

 

Landlord may enforce any of its remedies under this Lease either in its own name
or through an agent.

 

M. ENTIRE AGREEMENT.

 

This Lease, together with all Appendices, constitutes the entire agreement
between the parties. No representations or agreements of any kind have been made
by either party which are not contained in this Lease.

 

N. LANDLORD’S TITLE.

 

Landlord’s title shall always be paramount to the interest of the Tenant, and
nothing in this Lease shall empower Tenant to do anything which might in any way
impair Landlord’s title.

 

O. LIGHT AND AIR RIGHTS.

 

Landlord does not grant in this Lease any rights to light and air in connection
with Project. Landlord reserves to itself, the Land, the Building below the
improved floor of each floor of the Premises, the Building above the ceiling of
each floor of the Premises, the exterior of the Premises and the areas on the
same floor outside the Premises, along with the areas within the Premises
required for the installation and repair of utility lines and other items
required to serve other tenants of the Building.

 

P. SINGULAR AND PLURAL.

 

Wherever appropriate in this Lease, a singular term shall be construed to mean
the plural where necessary, and a plural term the singular. For example, if at
any time two parties shall constitute Landlord or Tenant, then the relevant term
shall refer to both parties together.

 

Q. NO RECORDING BY TENANT.

 

Tenant shall not record in any public records any memorandum or any portion of
this Lease.

 

R. EXCLUSIVITY.

 

Landlord does not grant to Tenant in this Lease any exclusive right except the
right to occupy its Premises.

 

S. NO CONSTRUCTION AGAINST DRAFTING PARTY.

 

The rule of construction that ambiguities are resolved against the drafting
party shall not apply to this Lease.

 

T. SURVIVAL.

 

All obligations of Landlord and Tenant under this Lease shall survive the
termination of this Lease.

 

U. RENT NOT BASED ON INCOME.

 

No Rent or other payment in respect of the Premises shall be based in any way
upon net income or profits from the Premises. Tenant may not enter into or
permit any sublease or license or other agreement in connection with the
Premises which provides for a rental or other payment based on net income or
profit.

 

V. BUILDING MANAGER AND SERVICE PROVIDERS.

 

Landlord may perform any of its obligations under this Lease through its
employees or third parties hired by the Landlord.

 

W. LATE CHARGE AND INTEREST ON LATE PAYMENTS.

 

Without limiting the provisions of Section 14.A, if Tenant fails to pay any
installment of Rent or other charge to be paid by Tenant pursuant to this Lease
within five (5) business days after the same becomes due and payable, then
Tenant shall pay a late charge equal to the greater of five percent (5%) of the
amount of such payment or $250. In addition, interest shall be paid by Tenant to
Landlord on any late payments of Rent from the date due until paid at the rate
provided in Section 2.D (2). Such late charge and interest shall constitute
Additional Rent due and payable by Tenant to Landlord upon the date of payment
of the delinquent payment referenced above.

 

X. TENANT’S FINANCIAL STATEMENTS.

 

Within ten (10) days after Landlord’s written request therefor, Tenant shall
deliver to Landlord the current financial statements of Tenant, and financial
statements of the two (2) years prior to the current financial statements year,
with an opinion of a certified public accountant, including a balance sheet and
profit and loss

 

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statement for the most recent prior year, all prepared in accordance with
generally accepted accounting principles consistently applied.

 

Y. ATTORNEY’S FEES.

 

If either party defaults in the performance of any terms, covenants, agreements
or conditions contained in this Lease and Landlord places enforcement of this
Lease or the collection of rent due or to become due hereunder, or recovery of
possession of the Premises in the hands of any attorney, or either party files
suit upon the same, the non prevailing party agrees to pay the prevailing
party’s reasonable attorneys’ fees and expenses.

 

29. UNRELATED BUSINESS INCOME

 

If Landlord is advised by its counsel at any time that any part of the payments
by Tenant to Landlord under this Lease may be characterized as unrelated
business income under the United States Internal Revenue Code and its
regulations, then Tenant shall enter into any amendment proposed by Landlord to
avoid such income, so long as the amendment does not require Tenant to make more
payments or accept fewer services from Landlord, than this Lease provides.

 

30. HAZARDOUS SUBSTANCES

 

Tenant shall not cause or permit any Hazardous Substances to be brought upon,
produced, stored, used, discharged or disposed of in or near the Project unless
Landlord has consented to such storage or use in its sole discretion. Any
handling, transportation, storage, treatment, disposal or use of any Hazardous
Substances in or about the Project by Tenant, its agents, employees, contractors
or invitees shall strictly comply with all applicable Governmental Requirements.
Notwithstanding the foregoing, Tenant may handle, store, use or dispose of
products containing small quantities of Hazardous Substances (such as aerosol
cans containing insecticides, toner for copiers, paints, paint remover and the
like) to the extent customary and necessary for the use of the Premises for
general office purposes; provided that Tenant shall always handle, store, use,
and dispose of any such Hazardous Substances in a safe and lawful manner and
never allow such Hazardous Substances to contaminate the Premises, Project and
appurtenant land or the environment. Tenant shall indemnify, defend and hold
Landlord harmless from and against any liabilities, losses, claims, damages,
penalties, fines, attorneys’ fees and court costs, remediation costs,
investigation costs and any other expenses which result from or arise out of the
use, storage, treatment, transportation, release, or disposal of any Hazardous
Substances on or about the Project by Tenant, its agents, employees, contractors
or invitees. If any lender or governmental agency shall require testing for
Hazardous Substances in the Premises, Tenant shall pay for such testing if the
requirement for the testing arises from the Tenant’s use or activities on or
around the Project.

 

A. HAZARDOUS SUBSTANCES.

 

“Hazardous Substances” means any hazardous or toxic substances, materials or
waste which are or become regulated by any local government authority, the State
of California or the United States government, including those substances
described in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq.,
defined as a “hazardous waste,” “extremely hazardous waste” or “restricted
hazardous waste” under Sections 25115, 25117 or 25122.7, or listed pursuant to
Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5
(Hazardous Waste Control), defined as a “hazardous substance” under Section
25316 of the California Health and Safety Code, Division 20, Chapter 6.8
(Carpenter-Presley-Tanner Hazardous Substance Account Act), defined as a
“hazardous material,” “hazardous substance” or “hazardous waste” under Section
25501 of the California Health and Safety Code, Division 20, Chapter 6.95
(Hazardous Materials Release Response Plans and Inventory), defined as a
“hazardous substance” under Section 25281 of the California Health and Safety
Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances),
petroleum, or any fraction thereof, methyl tertiary butyl ether (MTBE),
asbestos, polychlorinated biphenyls, any other applicable federal, state or
local law, and the regulations adopted under these laws.

 

31. LANDLORD’S LEASE UNDERTAKINGS

 

Notwithstanding anything to the contrary contained in this Lease or in any
exhibits, Riders or addenda hereto attached (collectively the “Lease
Documents”), it is expressly understood and agreed by and between the parties
hereto that: (a) the recourse of Tenant or its successors or assigns against
Landlord with respect to the alleged breach by or on the part of Landlord of any
representation, warranty, covenant, undertaking or agreement contained in any of
the Lease Documents or otherwise arising out of Tenant’s use of the Premises or
the Building (collectively, “Landlord’s Lease Undertaking”) shall extend only to
Landlord’s interest in the real estate of which the Premises demised under the
Lease Documents are a part (“Landlord’s Real Estate”) and not to any other
assets of Landlord or its beneficiaries; and (b) no personal liability or
personal responsibility of any sort with respect to any of Landlord’s Lease
Undertakings or any alleged breach thereof is assumed by, or shall at any time
be asserted or enforceable against, Landlord, OTR, an Ohio general partnership,
Seagate Properties, Inc., Seagate Realty Advisors, or against any of their
respective directors, officers, employees, agents, constituent partners,
beneficiaries, trustees or representatives. Tenant acknowledges that this Lease
is executed by certain general partners of OTR and/or Seagate Realty Advisors,
not individually but solely on behalf of, and as the authorized nominee and
agent for, The State Teachers Retirement Board of Ohio, and Tenant and all
persons dealing with Landlord waive any right to bring a cause of action against
the individuals executing this Lease on behalf of Landlord and must look solely
to the Landlord’s Real Estate for the enforcement of any claim against Landlord.

 

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32. OFFER TO LEASE

 

The submission of this Lease to Tenant or its broker or other agent, does not
constitute an offer to Tenant to lease the Premises. This Lease shall have no
force and effect until (a) it is executed and delivered by Tenant to Landlord,
and (b) it is fully reviewed, executed and delivered by Landlord to Tenant;
provided, however, that upon execution of this Lease by Tenant and delivery to
Landlord, such execution and delivery by Tenant shall, in consideration of the
time and expense incurred by Landlord in reviewing the Lease and Tenant’s
credit, constitute an offer by Tenant to Lease the Premises upon the terms and
conditions set forth herein (which offer to Lease shall be irrevocable for
fifteen (15) business days following the date of delivery).

 

33. RESERVATION OF RIGHTS

 

Landlord reserves the following rights exercisable without notice (except as
otherwise expressly provided to the contrary in this Lease) and without being
deemed an eviction or disturbance of Tenant’s use or possession of the Premises
or giving rise to any claim for set-off or abatement of Rent: (a) to change the
name or street address of the Building; (b) to install, affix and maintain all
signs on the exterior and/or interior of the Building; (c) to designate and/or
approve prior to installation, all types of signs, window shades, blinds,
drapes, awnings or other similar items, and all internal lighting that may be
visible from the exterior of the Premises and, notwithstanding the provisions of
Section 9, the design, arrangement, style, color and general appearance of the
portion of the Premises visible from the exterior, and contents thereof,
including, without limitation, furniture, fixtures, art work, wall coverings,
carpet and decorations, and all changes, additions and removals thereto, shall,
at all times have the appearance of Premises having the same type of exposure
and used for substantially the same purposes that are generally prevailing in
comparable office buildings in the area; (d) provided that (i) there is no
reduction (other than a temporary reduction) in the services to be provided by
Landlord is required to provide pursuant to Section 5 of this Lease or (ii)
access to the Premises is not materially and adversely affected, to change the
location of any other tenant, the arrangement, size, character, use or location
of entrances or passageways, doors, doorways, corridors, elevators, escalators,
stairs, landscaping, toilets or any other parts of the Building, or to change
common area to tenant space and tenant space to common area; (e) to grant any
party the exclusive right to conduct any business or render any service in the
Building, provided such exclusive right shall not operate to prohibit Tenant
from using the Premises for the purposes permitted under this Lease; (f) to
prohibit the placement of vending or dispensing machines of any kind in or about
the Premises other than for use by Tenant’s employees; (g) to prohibit the
placement of video or other electronic games in the Premises; (h) to have access
for Landlord and other tenants of the Building to any mail chutes and boxes
located in or on the Premises according to the rules of the United States Post
Office and to discontinue any mail chute business in the Building; (i) to close
the Building after normal business hours, except that Tenant and its employees
and invitees shall be entitled to admission at all times under such rules and
regulations as Landlord prescribes for security purposes; (j) to install,
operate and maintain security systems which monitor, by close circuit television
or otherwise, all persons entering or exiting the Building; (k) to install and
maintain pipes, ducts, conduits, wires and structural elements located in the
Premises which serve other parts or other tenants of the Building; and (l) to
retain at all times master keys or pass keys to the Premises. None of the
foregoing shall result in any liability of Landlord to Tenant.

 

34. MODIFICATION AND FINANCING CONDITIONS

 

Landlord may obtain financing for the Building, portions thereof, and the
operation thereof, secured by mortgages or deeds of trust encumbering the
Building. If any mortgage lender should require, as a condition to such
financing, or pursuant to rights of approval set forth in the mortgage or deed
of trust encumbering the Building, any modification of the terms or conditions
of this Lease, Tenant agrees to execute such modification or amendment, provided
that, such modification or amendment (a) shall not increase the rental or
Tenant’s share of any costs additional to minimum rent, (b) shall not materially
interfere with Tenant’s use or occupancy of the Premises, and (c) shall not
materially increase Tenant’s obligation hereunder.

 

35. OPTION TO EXTEND TERM

 

Upon full and complete performance of all terms, covenants and conditions herein
contained by Tenant and the timely payment of all Rent due under the terms
hereof, and the absence of any events of default that remain uncured beyond any
applicable grace or cure period, Tenant shall be given the option to renew this
Lease for one additional three (3) year term (the “Renewal Term”), based upon
the same terms and conditions as herein contained, except that (i) Landlord
shall have the right to adjust the Base Rent to the then current Market Rate and
amend any non-monetary terms of this Lease as discussed below and (ii) provided
that the Base Rent for the Renewal Term shall in no event be less than the Base
Rent payable under the Lease on the Expiration Date. As used herein, “Market
Rate” shall be the rental rate, as determined by Landlord in its sole
discretion, at which tenants lease Comparable Space (as defined below) as of the
commencement of the Renewal Term, subject to periodic incremental escalations.
“Comparable Space” shall be office space that is: (i) not subleased; (ii) not
subject to another tenant’s expansion rights; (iii) comparable in size, location
and quality to the Premises; (iv) leased for a term comparable to the Renewal
Term; and (v) located in “Comparable Buildings,” which means Class A office
buildings comparable in size and quality to the Building, located in the City of
Campbell, County of Santa Clara, State of California.

 

In the event Tenant desires to exercise its renewal option, Tenant shall give
written notice of such election to Landlord no later than one hundred eighty
(180) days and no earlier than two hundred seventy (270) days prior to the
Expiration Date. Upon receipt of such notice from Tenant, Landlord will, within
fifteen (15) days from receipt of such notice, advise Tenant in writing of the
renewal terms with which Landlord will grant such renewal. Within thirty (30)
days after receipt of the renewal terms, Tenant will advise Landlord in writing
of its election to renew or vacate the property at the end of the Term of this
Lease.

 

22

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Prior to the commencement of the Renewal Term and in accordance with the time
periods set out above, Landlord shall have the right to reasonably amend any
non-monetary terms, covenants and conditions of this Lease to comply with any
new standard lease provisions, laws, ordinances or regulations which may have
come into effect during the prior term of this Lease, provided such amended
terms, covenants and conditions of the Lease are consistent with industry custom
and standards at such time.

 

Tenant’s option to renew this Lease is personal to the originally named Tenant
herein and may be exercised only by such originally named Tenant (and not any
assignee, sub lessee, or other transferee of Tenant’s interest in this Lease or
the Premises other than an Affiliate to which Tenant assigns this Lease pursuant
to Section 19.H of this Lease) and only if such originally named Tenant (or an
Affiliate to which Tenant assigns this Lease pursuant to Section 19.H of this
Lease) occupies the entire Premises as of the date it exercises the renewal
option. If Tenant fails to exercise its rights to renew this Lease in accordance
with the terms hereof, said renewal option shall terminate. Tenant’s renewal of
this Lease shall not operate to cure any default by Tenant of any of the terms
or provisions of this Lease, nor to extinguish or impair any rights or remedies
of Landlord arising by virtue of such default. If this Lease or Tenant’s right
to possession of the Premises shall terminate in any manner whatsoever before
Tenant shall exercise its right to renew this Lease, or before the commencement
of the Renewal Term, or if Tenant shall have assigned this Lease or subleased
all or any portion of the Premises before Tenant shall have exercised its
renewal option, then immediately upon such termination, sublease or assignment,
the renewal option shall simultaneously terminate and become null and void,
whether or not it has been previously exercised.

 

[SIGNATURE PAGE FOLLOWS]

 

23

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IN WITNESS WHEREOF, the parties hereto have executed this Lease dated July 19,
2005, by and between OTR, an Ohio general partnership, as Nominee of The State
Teachers Retirement Board of Ohio, a statutory organization created by the laws
of Ohio, and Rainmaker Systems, Inc., a Delaware corporation, for the above
referenced and described Property located at 900 East Hamilton Avenue, Suite
400, Campbell, California 95008.

 

LANDLORD: OTR, an Ohio general partnership, as Nominee of The State Teachers
Retirement Board of Ohio, a statutory organization created by the laws of Ohio,

 

By:

 

/s/

Name:

   

Title:

   

Date:

 

August     , 2005

 

TENANT: RAINMAKER SYSTEMS, INC., a Delaware corporation

 

  By:   /s/    STEVE VALENZUELA        

Name:

  Steve Valenzuela

Title:

  Chief Financial Officer

Date:

 

July 27, 2005

 

24

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EXHIBIT A

 

EXISTING FLOOR PLAN OF PREMISES

 

This Exhibit A is attached to and made a part of that certain Lease dated July
19, 2005, by and between OTR, an Ohio general partnership, as Nominee of The
State Teachers Retirement Board of Ohio, a statutory organization created by the
laws of Ohio, as Landlord, and RAINMAKER SYSTEMS, INC., a Delaware corporation,
as Tenant, in the Building commonly referred to as 900 East Hamilton Avenue,
Campbell, California 95008.

 

A-1

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EXHIBIT A-1

 

SITE PLAN OF THE PROJECT AND ADDITIONAL PARKING AREA

 

This Exhibit A-1 is attached to and made a part of that certain Lease dated July
19, 2005, by and between OTR, an Ohio general partnership, as Nominee of The
State Teachers Retirement Board of Ohio, a statutory organization created by the
laws of Ohio, as Landlord, and RAINMAKER SYSTEMS, INC., a Delaware corporation,
as Tenant, in the Building commonly referred to as 900 East Hamilton Avenue,
Campbell, California 95008.

 

LOGO [g22629img001.jpg]

 

A-1-1

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EXHIBIT B

 

RULES AND REGULATIONS

 

This Exhibit B is attached to and made a part of that certain Lease dated July
19, 2005, by and between OTR, an Ohio general partnership, as Nominee of The
State Teachers Retirement Board of Ohio, a statutory organization created by the
laws of Ohio, as Landlord, and RAINMAKER SYSTEMS, INC., a Delaware corporation,
as Tenant, in the Building commonly referred to as 900 East Hamilton Avenue,
Campbell, California 95008.

 

1. Tenant shall not place anything, or allow anything to be placed near the
glass of any window, door, partition or wall, which may, in Landlord’s judgment,
appear unsightly from outside of the Project.

 

2. The Project directory, if any, shall be used by Landlord to display names and
locations of tenants in the Project. No tenant shall use or make any changes to
such directories without Landlord’s prior written consent.

 

3. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by Tenant or used by Tenant for any purposes other than
for ingress to and egress from the Premises, unless Tenant is the sole occupant
of the Building. Tenant shall lend its full cooperation to keep such areas free
from all obstruction and in a clean and sightly condition and shall move all
supplies, furniture and equipment as soon as received directly to the Premises
and move all such items and waste being taken from the Premises (other than
waste customarily removed by employees of the Building) directly to the shipping
platform at or about the time arranged for removal therefrom. Neither Tenant nor
any employee or invitee of Tenant shall go upon the roof of the Project.

 

4. The toilet rooms, urinals, wash bowls and other apparatuses shall not be used
for any purposes other than that for which they were constructed, and no foreign
substance of any kind whatsoever shall be thrown therein, and to the extent
caused by Tenant or its employees or invitees, the expense of any breakage,
stoppage or damage resulting from the violation of this rule shall be borne by
Tenant.

 

5. Tenant shall not cause any unnecessary janitorial labor or services by reason
of Tenant’s carelessness or indifference in the preservation of good order and
cleanliness.

 

6. Tenant shall not install or operate any refrigerating, heating or air
conditioning apparatus, or carry on any mechanical business without the prior
written consent of Landlord; use the Premises for housing, lodging or sleeping
purposes; or permit preparation or warming of food in the Premises (warming of
coffee and individual meals with employees and guests excepted). Tenant shall
not occupy or use the Premises or permit the Premises to be occupied or used for
any purpose, act or thing which is in violation of any Governmental Requirement
or which may be dangerous to persons or property.

 

7. Tenant shall not bring upon, use or keep in the Premises or the Project any
kerosene, gasoline or inflammable or combustible fluid or material, or any other
articles deemed hazardous to persons or property, or use any method of heating
or air conditioning other than that supplied by Landlord.

 

8. Landlord shall have sole power to direct electricians as to where and how
telephone and other wires are to be introduced. No boring or cutting for wires
is to be allowed without the consent of Landlord. The location of telephones,
call boxes and other office equipment affixed to the Premises shall be subject
to the approval of Landlord.

 

9. No additional locks shall be placed upon any doors, windows or transoms in or
to the Premises. Tenant shall not change existing locks or the mechanism
thereof. Upon termination of the lease, Tenant shall deliver to Landlord all
keys and passes for offices, rooms, parking lot and toilet rooms which shall
have been furnished Tenant.

 

In the event of the loss of keys so furnished, Tenant shall pay Landlord
therefor. Tenant shall not make, or cause to be made, any such keys and shall
order all such keys solely from Landlord and shall pay Landlord for any keys in
addition to the two sets of keys originally furnished by Landlord for each lock.

 

10. Tenant shall not install linoleum, tile, carpet or other floor covering so
that the same shall be affixed to the floor of the Premises in any manner except
as approved by Landlord.

 

11. No furniture, packages, supplies, equipment or merchandise will be received
in the Project or carried up or down in the freight elevator, except between
such hours and in such freight elevator as shall be designated by Landlord.
Tenant shall not take or permit to be taken in or out of other entrances of the
Building, or take or permit on other elevators, any item normally taken in or
out through the trucking concourse or service doors or in or on freight
elevators.

 

12. Without the prior written consent of Landlord, Tenant shall not use the name
of the Project or any picture of the Project in connection with, or in promoting
or advertising the business of, Tenant, except Tenant may use the address of the
Project as the address of its business.

 

B-1

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13. Tenant shall cooperate fully with Landlord to assure the most effective
operation of the Premises’ or the Project’s heating and air conditioning, and
shall refrain from attempting to adjust any controls, other than room
thermostats installed for Tenant’s use. Tenant shall keep all corridor and
exterior doors and windows closed, and during periods which outside temperatures
exceed 90 degrees F dry bulb. Tenant shall close all blinds and turn off any
unnecessary equipment.

 

14. Tenant assumes full responsibility for protecting the Premises from theft,
robbery and pilferage, which may arise from a cause other than Landlord’s
negligence, which includes keeping doors locked and other means of entry to the
Premises closed and secured.

 

15. Peddlers, solicitors and beggars shall be reported to the office of the
Project or as Landlord otherwise requests.

 

16. Tenant shall not advertise the business, profession or activities of Tenant
conducted in the Project in any manner which violates the letter or spirit of
any code of ethics adopted by any recognized association or organization
pertaining to such business, profession or activities.

 

17. No bicycle (except in those areas which may be designated for bicycles by
Landlord) or other vehicle and no animals or pets shall be allowed in the
Premises, halls, freight docks, or any other parts of the Building except that
blind persons may be accompanied by “seeing eye” dogs. Tenant shall not make or
permit any noise, vibration or odor to emanate from the Premises, or do anything
therein tending to create, or maintain, a nuisance, or do any act tending to
injure the reputation of the Building.

 

18. Tenant acknowledges that Building security problems may occur which may
require the employment of extreme security measures in the day-to-day operation
of the project accordingly:

 

(a) Landlord may, at any time, or from time to time, or for regularly scheduled
time periods, as deemed advisable by Landlord and/or its agents, in their sole
discretion, require that persons entering or leaving the Project or the Property
identify themselves to watchmen or other employees designated by Landlord, by
registration, identification or otherwise.

 

(b) Tenant agrees that it and its employees will cooperate fully with Project
employees in the implementation of any and all security procedures.

 

(c) Such security measures shall be the sole responsibility of Landlord, and
Tenant shall have no liability for any action taken by Landlord in connection
therewith, it being understood that Landlord is not required to provide any
security procedures and shall have no liability for such security procedures or
the lack thereof.

 

19. Tenant shall not do or permit the manufacture, sale, purchase, use or gift
of any fermented, intoxicating or alcoholic beverages without obtaining written
consent of Landlord.

 

20. Tenant shall not disturb the quiet enjoyment of any other tenant.

 

21. Landlord may retain a pass key to the Premises and be allowed admittance
thereto at all times to enable its representatives to examine the Premises from
time to time and to exhibit the same and Landlord may place and keep on the
windows and doors of the Premises at any time signs advertising the Premises for
Rent.

 

22. No equipment, mechanical ventilators, awnings, special shades or other forms
of window covering shall be permitted either inside or outside the windows of
the Premises without the prior written consent of Landlord, and then only at the
expense and risk of Tenant, and they shall be of such shape, color, material,
quality, design and make as may be approved by Landlord.

 

23. Tenant shall not during the term of this Lease canvas or solicit other
tenants of the Building for any purpose.

 

24. Tenant shall not install or operate any phonograph, musical or
sound-producing instrument or device, radio receiver or transmitter, TV receiver
or transmitter, or similar device in the Building or Project Common Areas, nor
install or operate any antenna, aerial, wires or other equipment inside or
outside the Building, nor operate any electrical device from which may emanate
electrical waves which may interfere with or impair radio or television
broadcasting or reception from or in the Building or elsewhere, without in each
instance the prior written approval of Landlord. The use thereof, if permitted,
shall be subject to control by Landlord to the end that others shall not be
disturbed.

 

25. Tenant shall promptly remove all rubbish and waste from the Premises.

 

26. Tenant shall not exhibit, sell or offer for sale, Rent or exchange in the
Premises or at the Project any article, thing or service, except those
ordinarily embraced within the use of the Premises specified in Section 6 of
this Lease, without the prior written consent of Landlord.

 

27. If required by Landlord, Tenant shall list all furniture, equipment and
similar articles Tenant desires to remove from the Premises or the Building and
deliver a copy of such list to Landlord and procure a removal permit from
Landlord (or the Project manager) authorizing Building employees to permit such
articles to be removed.

 

B-2

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28. Tenant shall not overload any floors in the Premises or any public corridors
or elevators in the Building.

 

29. Tenant shall not do any painting in the Premises, or mark, paint, cut or
drill into, drive nails or screws into, or in any way deface any part of the
Premises or the Building, outside or inside, without the prior written consent
of Landlord.

 

30. Whenever Landlord’s consent, approval or satisfaction is required under
these Rules, then unless otherwise stated, any such consent, approval or
satisfaction must be obtained in advance, such consent or approval may be
granted or withheld in Landlord’s sole discretion, and Landlord’s satisfaction
shall be determined in its sole judgment.

 

31. Tenant and its employees shall cooperate in all fire drills conducted by
Landlord in the Building.

 

Tenant’s Initials:                     

 

B-3

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EXHIBIT C

 

WORK LETTER

 

This Exhibit C (this “Work Letter”) is attached to and made a part of that
certain Lease dated July 19, 2005, by and between OTR, an Ohio general
partnership, as Nominee of The State Teachers Retirement Board of Ohio, a
statutory organization created by the laws of Ohio, as Landlord, RAINMAKER
SYSTEMS, INC., a Delaware corporation, as Tenant, in the Building commonly
referred to as 900 East Hamilton Avenue, Campbell, California 95008.

 

1. Tenant’s Work:

 

Tenant, at its sole cost and expense, shall perform work to the Premises as
described below (“Tenant’s Work”). Tenant shall directly hire a contractor, to
be approved by Landlord, to perform Tenant’s Work. It is mutually agreed by
Tenant and Landlord that Tenant shall be solely responsible for the costs of the
Tenant’s Work as follows:

 

  (i). Installation of dedicated air-conditioning in the server room of the
Premises.

 

  (ii). Installation of a back-up generator in the parking garage of the
Building or other location deemed acceptable by the Landlord. If such back-up
generator is installed in the parking garage, then any space needed for such
generator will be subtracted from Tenant’s allocated number of Parking Spaces.

 

2. Landlord’s Work.

 

In consideration of the mutual covenants contained in the Lease and in this Work
Letter, Landlord and Tenant hereby agree that Landlord shall, at its sole cost
and expense except as otherwise provided herein, perform work to the Premises as
indicated on the attached Floor Plan (Exhibit C-1), and as described in
subparagraphs (i) through (v), inclusive, below (the “Landlord’s Work”), and
shall deliver the Premises to Tenant with Building Standard Specifications with
the following Landlord’s Work:

 

(i). conversion of existing conference room into training room with a moveable
partition (Tenant shall pay $10,000 of the cost of the purchase and installation
of the partition).

 

(ii). removal of demising wall in area in which CEO office (as shown on Space
Plan) will be located.

 

(iii). removal of false columns, soffit and magnagrid ceiling to accommodate
Tenant’s cubicles (to be installed by Tenant).

 

(iv). removal and replacement of carpet with building standard carpet and
repainting with building standard paint.

 

(v). demising of space to create public lobby and public corridor.

 

Beyond the scope of this Work Letter, Tenant shall accept delivery of the
Premises in “as-is” condition with all existing furniture, fixtures, alterations
and improvements in place and shall be responsible for any and all other tenant
improvements, fixtures and alterations, including but not limited to, all costs
associated with furniture, workstations, telephone data wiring and any
additional HVAC requirements in any server room; provided, however, Landlord
shall be responsible for the removal of all items of personal property from the
Premises prior to delivery of the Premises to Tenant. Tenant shall comply with
the applicable provisions of Article 6 of the Lease in connection with its
installation or construction of any improvements or alterations to the Premises.

 

If any of the above work cannot be completed in Landlord’s reasonable
determination then the Landlord and Tenant shall agree upon acceptable
alternatives. In no case shall the inability to complete any portion of the
above improvements invalidate the Lease.

 

A. Tenant’s Approval of the Plans. Tenant hereby approves the space plan for
Landlord’s Work as attached hereto as Exhibit C-1 to this Work Letter. Tenant
shall approve the plans and specifications (the “Plans”) for the Landlord’s Work
as specified in Exhibit C-1 of this Work Letter by no later five (5) days after
the date that Landlord delivers the Plans to Tenant. After Tenant’s approval of
the Plans, any changes Any changes in the Plans made by Tenant must be submitted
in writing for Landlord’s approval. In addition, Landlord shall be given a
reasonable extension of time to complete the Landlord’s Work after the
Commencement Date and Tenant shall be solely responsible for paying any
increased costs as a result of such changes or any Tenant Delay. Any extension
of time and modifications to the Plans shall be in writing, dated and signed by
both parties.

 

B. Performance of the Work.

 

(1). Completion of the Landlord’s Work. Landlord shall use commercially
reasonable efforts to Substantially Complete (as defined below) Landlord’s Work,
subject to Tenant Delays or Force Majeure Delays, by the Commencement Date.
Landlord’s Work in the Premises shall be “Substantially

 

C-1

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Completed” when it has been completed in accordance with the Plans subject to
the completion of punch list items and a certificate of occupancy has been
issued. Tenant agrees that if Landlord is unable to deliver possession of the
Premises to Tenant on or before the Commencement Date, then the Lease will not
be void or voidable, nor will Landlord be liable to Tenant for any loss or
damage resulting therefrom.

 

(2). Tenant Delays. For purposes of this Lease and the Work Letter, “Tenant
Delays” means any delay in the completion of Landlord’s Work resulting from any
or all of the following: (a) Tenant’s failure to timely perform any of its
obligations with regard to Landlord’s Work, including any failure to complete,
on or before the due date therefor, any action item which is Tenant’s
responsibility as set forth in this Section 2; (b) Tenant’s changes to the Plans
for Landlord’s Work after Tenant’s and Landlord’s approval thereof; (c) Tenant’s
request for materials, finishes, or installations which are not readily
available or which are incompatible with the Landlord’s building standards; or
(d) any other act or omission of Tenant, any of Tenant’s Parties or any other
person performing or required to perform services on behalf of Tenant.

 

C. Force Majeure Delays. For purposes of this Lease and the Work Letter, “Force
Majeure Delays” means any actual delay in the construction of Landlord’s Work
which is beyond the reasonable control of Landlord or Tenant, as the case may
be, as described in Section 23 of the Lease.

 

This Work Letter is executed as of the date of the Lease.

 

LANDLORD:   OTR, an Ohio general partnership, as Nominee of The State Teachers
Retirement Board of Ohio, a statutory organization created by the laws of Ohio,

 

By:   /S/    WILLIAM A. SHURMAN

Name:

  William A. Shurman

Title:

  Director, Western Region

Date: August 4, 2005

 

TENANT:   RAINMAKER SYSTEMS, INC., a Delaware corporation

 

By:   /s/    STEVE VALENZUELA        

Name:

  Steve Valenzuela

Title:

  Chief Financial Officer

Date: July 27, 2005

 

C-2

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EXHIBIT C-1

 

LANDLORD’S WORK

 

This Exhibit C-1 is attached to and made a part of that certain Lease dated July
19, 2005, by and between OTR, an Ohio general partnership, as Nominee of The
State Teachers Retirement Board of Ohio, a statutory organization created by the
laws of Ohio, as Landlord, and RAINMAKER SYSTEMS, INC., a Delaware corporation,
as Tenant, in the Building commonly referred to as 900 East Hamilton Avenue,
Campbell, California 95008.

 

The approved Space Plan is set forth below.

 

LOGO [g22629img002.jpg]

 

C-1-1