exv10w7



 






Exhibit 10.7



EXECUTED

ORIGINAL




OFFICE LEASE




 CHINA BASIN LANDING




PWREF/MCC-CHINA BASIN L.L.C.,




a Delaware limited liability company,




as Landlord,




and




LOOPNET,




a California corporation,




as Tenant.




	 	 	 	 	 
	 

	 	 
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TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 PREMISES, BUILDING, PROJECT, AND COMMON AREAS;
RIGHT
OF FIRST OFFER
	 	 	4	 
	ARTICLE 2 INITIAL LEASE TERM; OPTION TERM
	 	 	6	 
	ARTICLE 3 BASE RENT
	 	 	8	 
	ARTICLE 4 ADDITIONAL RENT
	 	 	8	 
	ARTICLE 5 USE OF PREMISES
	 	 	14	 
	ARTICLE 6 SERVICES AND UTILITIES
	 	 	14	 
	ARTICLE 7 REPAIRS
	 	 	16	 
	ARTICLE 8 ADDITIONS AND ALTERATIONS
	 	 	17	 
	ARTICLE 9 COVENANT AGAINST LIENS
	 	 	19	 
	ARTICLE 10 INSURANCE
	 	 	19	 
	ARTICLE 11 DAMAGE AND DESTRUCTION
	 	 	21	 
	ARTICLE 12 NONWAIVER
	 	 	23	 
	ARTICLE 13 CONDEMNATION
	 	 	23	 
	ARTICLE 14 ASSIGNMENT AND SUBLETTING
	 	 	24	 
	ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF
TRADE FIXTURES
	 	 	27	 
	ARTICLE 16 HOLDING OVER
	 	 	29	 
	ARTICLE 17 ESTOPPEL CERTIFICATES
	 	 	29	 
	ARTICLE 18 SUBORDINATION
	 	 	29	 
	ARTICLE 19 DEFAULTS; REMEDIES
	 	 	30	 
	ARTICLE 20 COVENANT OF QUIET ENJOYMENT
	 	 	33	 
	ARTICLE 21 SECURITY DEPOSIT
	 	 	33	 
	ARTICLE 22 INTENTIONALLY DELETED
	 	 	33	 
	ARTICLE 23 SIGNS
	 	 	33	 
	ARTICLE 24 COMPLIANCE WITH LAW
	 	 	34	 
	ARTICLE 25 LATE CHARGES
	 	 	34	 
	ARTICLE 26 LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY
TENANT
	 	 	34	 
	ARTICLE 27 ENTRY BY LANDLORD
	 	 	35	 
	ARTICLE 28 TENANT PARKING
	 	 	35	 
	ARTICLE 29 MISCELLANEOUS PROVISIONS
	 	 	36	 






	 	 	 
	EXHIBITS
	 
	 	 
	A

	 	OUTLINE OF PREMISES
	 
	 	 
	A-l

	 	FIRST OFFER SPACE
	 
	 	 
	B

	 	TENANT WORK LETTER
	 
	 	 
	C

	 	FORM OF NOTICE OF LEASE
	 
	 	 
	D

	 	RULES AND REGULATIONS
	 
	 	 
	E

	 	FORM OF TENANT’S ESTOPPEL CERTIFICATE






	 	 	 	 	 
	 

	 	 
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INDEX




	 	 	 	 	 
	 	 	Page(s)	 
	Abatement Event
	 	 	16	 
	Additional Rent
	 	 	8	 
	Affiliate Assignee
	 	 	5	 
	Affiliates
	 	 	27	 
	Allowances
	 	 	7	 
	Alterations
	 	 	17	 
	Applicable Laws
	 	 	34	 
	Base Building
	 	 	18	 
	Base Rent
	 	 	8	 
	Base Year
	 	 	8	 
	Brokers
	 	 	39	 
	Building
	 	 	4	 
	Building Common Areas
	 	 	4	 
	Building Hours
	 	 	14	 
	China Basin Landing
	 	 	4	 
	Common Areas
	 	 	4	 
	Coordinator
	 	 	39	 
	Cost Pools
	 	 	13	 
	Designation Notice
	 	 	17	 
	Direct Expenses
	 	 	9	 
	Eligibility Period
	 	 	16	 
	Estimate
	 	 	13	 
	Estimate Statement
	 	 	13	 
	Estimated Excess
	 	 	13	 
	Excess
	 	 	13	 
	Expense Year
	 	 	9	 
	Force Majeure
	 	 	38	 
	Hazardous Material
	 	 	11	 
	Holidays
	 	 	15	 
	HVAC
	 	 	14	 
	Landlord
	 	 	1	 
	Landlord Parties
	 	 	19	 
	Landlord Repair Notice
	 	 	22	 
	Lease
	 	 	1	 
	Lease Commencement Date
	 	 	6	 
	Lease Expiration Date
	 	 	6	 
	Lease Term
	 	 	6	 
	Lease Year
	 	 	6	 
	Lines
	 	 	40	 
	Mail
	 	 	38	 
	Notices
	 	 	38	 
	Objection Notice
	 	 	7	 
	Operating Expenses
	 	 	9	 
	Option Rent
	 	 	6	 
	Option Rent Notice
	 	 	7	 
	Option Term
	 	 	6	 
	Original Improvements
	 	 	20	 
	Original Tenant
	 	 	6	 
	Other Improvements
	 	 	41	 
	Outside Agreement Date
	 	 	7	 
	Premises
	 	 	4	 
	Project
	 	 	4	 
	Project Common Areas
	 	 	4	 
	Proposition 13
	 	 	12	 
	Renovations
	 	 	40	 
	Rent
	 	 	8	 
	Rent Review Period
	 	 	6	 
	Review Period
	 	 	24	 
	Second Request
	 	 	24	 





	 	 	 	 	 
	 

	 	 
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	 	 	Page(s)	 
	Security Deposit
	 	 	33	 
	Statement
	 	 	13	 
	Subject Space
	 	 	24	 
	Subleasing Costs
	 	 	26	 
	Summary
	 	 	1	 
	Tax Expenses
	 	 	11	 
	Tenant
	 	 	1	 
	Tenant Personal Property
	 	 	28	 
	Tenant’s Share
	 	 	12	 
	TMP
	 	 	39	 
	Transfer
	 	 	26	 
	Transfer Notice
	 	 	24	 
	Transfer Premium
	 	 	26	 
	Transferee
	 	 	24	 
	Transfers
	 	 	24	 






	 	 	 	 	 
	 

	 	 
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CHINA BASIN LANDING




OFFICE LEASE




     This Office Lease (the “Lease”), dated as of the date set forth in Section 1 of
the Summary of Basic Lease Information (the “Summary”), below, is made by and
between PWREF/MCC-CHINA BASIN L.L.C., a Delaware limited liability company
(“Landlord”), and LOOPNET, a California corporation (“Tenant”).



SUMMARY OF BASIC LEASE INFORMATION




	 	 	 	 	 
	TERMS OF LEASE	 	DESCRIPTION
	1.

	 	Date:
	 	January 8, 2003
	 
	 	 	 	 
	2

	 	Premises
(Article 1).	 	 
	 
	 	 	 	 
	 

	 	2.1 Building:
	 	Wharfside Building, China Basin
Landing,
185 Berry Street, San Francisco,
California 94107
	 
	 	 	 	 
	 

	 	2.2 Premises:
	 	Approximately 15,759 rentable square feet
of space located in Suite 4000 on the
fourth (4th) floor of the
Building, as further set forth in Exhibit A to the Office Lease.
	 
	 	 	 	 
	3.

	 	Lease Term
(Article 2).	 	 
	 
	 	 	 	 
	 

	 	3.1 Length of Term:
	 	Five (5) years.
	 
	 	 	 	 
	 

	 	3.2
Lease Commencement Date:

	 	The earlier to occur of (i) the date upon
which Tenant first commences to conduct
business in the Premises and (ii) three (3)
days following the date upon which the
Premises are Ready for Occupancy, which
is anticipated to be March 1, 2003.
	 
	 	 	 	 
	 

	 	3.3 Lease Expiration Date:
	 	The last day of the month in which the
5th anniversary of the Lease
Commencement Date occurs.






	 	 	 	 	 
	 

	 	 
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	4.

	 	Base Rent (Article 3):	 	 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Annual
	 	 	Annual	 	Monthly	 	Rental Rate
	Months of Lease	 	Base	 	Installment	 	per Rentable
	Term	 	Rent	 	of Base Rent	 	Square Foot
	1-3 
	 	$           0.00	 	$	0.00	 	 	$	0.00	 
	  4-12
	 	$346,698.00	 	$	28,891.50	 	 	$	22.00	 
	 13     
	 	$           0.00	 	$	0.00	 	 	$	0.00	 
	14-24
	 	$362,457.00	 	$	30,204.75	 	 	$	23.00	 
	25-36
	 	$378,216.00	 	$	31,518.00	 	 	$	24.00	 
	37-48
	 	$393,975.00	 	$	32,831.25	 	 	$	25.00	 
	49-60
	 	$409,734.00	 	$	34,144.50	 	 	$	26.00	 






	 	 	 	 	 
	5.

	 	Base Year (Article 4):
	 	Calendar year 2003.
	 
	 	 	 	 
	6.

	 	Tenant’s Share (Article 4):
	 	Approximately 2.16%.
	 
	 	 	 	 
	7.

	 	Permitted Use (Article 5):
	 	General office use consistent with
a first-class office building
	 
	 	 	 	 
	8.

	 	Security Deposit (Article 21):
	 	 $72,000.00.
	 
	 	 	 	 
	9.

	 	Parking (Article 28):
	 	Three (3) unreserved parking passes
	 
	 	 	 	 
	10.

	 	Address of Tenant (Section 29.18):
	 	LoopNet 
 2650 18th
Street, Ground Floor
	 

	 	 	 	San Francisco,California 94110
	 

	 	 	 	Attention: Mr. Richard
Boyle
	 

	 	 	 	(Prior to Lease Commencement
Date)
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	185 Berry Street
	 

	 	 	 	Suite 4000
	 

	 	 	 	San Francisco, California 94107
	 

	 	 	 	Attention: Mr. Richard
Boyle
	 

	 	 	 	(After Lease Commencement Date)
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	 222 E. Huntington Drive
	 

	 	 	 	Suite 118
	 

	 	 	 	Monrovia, California 91016
	 

	 	 	 	Attention: Mr. Brent Stumme
	 

	 	 	 	(After Lease Commencement Date)





 
	 	 	 	 	 
	 

	 	 
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	11.

	 	Address of
Landlord	 	McCarthy Cook & Co.,
LLC
	 

	 	(Section 29.18):	 	China Basin Landing
	 

	 	 	 	185 Berry Street, Suite 140
	 

	 	 	 	San Francisco, California 94107
	 

	 	 	 	Attention: General Manager
	 
	 	 	 	 
	 

	 	 	 	with copies to:
	 
	 	 	 	 
	 

	 	 	 	McCarthy Cook & Co.,
LLC
	 

	 	 	 	5750 Wilshire Boulevard
	 

	 	 	 	Los Angeles, California 90036
	 

	 	 	 	Attention: Edward W. Cook III
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	Allen Matkins Leck Gamble & Mallory LLP
	 

	 	 	 	1901 Avenue of the Stars, Suite 1800
	 

	 	 	 	Los Angeles, California 90067
	 

	 	 	 	Attention: Anton N. Natsis, Esq.
	 
	 	 	 	 
	12.

	 	Broker(s) (Section 29.24):
	 	McCarthy Cook & Co.,
LLC
	 

	 	 	 	185 Berry Street, Suite 140
	 

	 	 	 	San Francisco, California 94107
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	CB Richard Ellis, Inc.
	 

	 	 	 	355 South Grand, Suite 3100
	 

	 	 	 	Los Angeles, California 90071
	 

	 	 	 	Attention: Mr. Corey Waite






	 	 	 	 	 
	 

	 	 
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ARTICLE 1




PREMISES, BUILDING, PROJECT, AND COMMON AREAS; RIGHT OF FIRST



OFFER




     1.1 Premises, Building, Project and Common Areas.



          1.1.1 The Premises. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the premises set forth in Section 2.2 of the
Summary (the “Premises”). The outline of the Premises is set forth in
Exhibit A attached hereto and each floor or floors of the Premises has
the number of rentable square feet as set forth in Section 2.2 of the
Summary. Landlord and Tenant hereby stipulate and agree that the rentable area
of the Premises is as set forth in Section 2.2 of the Summary, and such square
footage shall not be subject to remeasurement or modification. The parties
hereto agree that the lease of the Premises is upon and subject to the terms,
covenants and conditions herein set forth, and Tenant covenants as a material
part of the consideration for this Lease to keep and perform each and all of such
terms, covenants and conditions by it to be kept and performed and that this
Lease is made upon the condition of such performance. The parties hereto
hereby acknowledge that the purpose of Exhibit A is to show the
approximate location of the Premises in the “Building,” as that term
is defined in Section 1.1.2, below, only, and such Exhibit is not meant to
constitute an agreement, representation or warranty as to the construction of
the Premises, the precise area thereof or the specific location of the “Common
Areas,” as that term is defined in Section 1.1.3, below, or the elements
thereof or of the accessways to the Premises or the “Project,” as that term is defined
in Section 1.1.2, below. Except as specifically set forth in this Lease and in
the Tenant Work Letter attached hereto as Exhibit B (the “Tenant Work
Letter”), Landlord shall not be obligated to provide or pay for any
improvement work or services related to the improvement of the Premises.
Tenant also acknowledges that neither Landlord nor any agent of Landlord has
made any representation or warranty regarding the condition of the Premises,
the Building or the Project or with respect to the suitability of any of the
foregoing for the conduct of Tenant’s business, except as specifically set
forth in this Lease and the Tenant Work Letter. The taking of possession of the Premises by Tenant
shall conclusively establish that the Premises and the Building were at such
time in good and sanitary order, condition and repair, subject to
Tenant’s punchlist items. Subject to Landlord’s reasonable access control
systems and procedures, the “Rules and Regulations,” as that term is defined
in Section 5.2, below, and the terms of this Lease, Landlord shall allow
Tenant access to the Premises twenty-four (24) hours per day, seven (7) days
per week.




          1.1.2 The Building and The Project. The Premises are a part of the
building set forth in Section 2.1 of the Summary (the “Building”). The
Building is part of an office project known as “China Basin Landing.” The
term “Project,” as used in this Lease, shall mean (i) the Building and the
Common Areas, (ii) the land (which is improved with landscaping, subterranean
parking facilities and other improvements) upon which the Building and
the Common Areas are located, (iii) the other office building located adjacent
to the Building and the land upon which such adjacent office building is
located, and (iv) at Landlord’s discretion, any additional real property,
areas, land, buildings or other improvements added thereto outside of the
Project.




          1.1.3 Common Areas. Tenant shall have the non-exclusive right to use
in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other portions of the Project designated by Landlord, in its discretion, including
certain areas designated for the exclusive use of certain tenants, or to be
shared by Landlord and certain tenants, are collectively referred to herein as
the “Common Areas”). The Common Areas shall consist of the “Project Common
Areas” and the “Building Common Areas.” The term “Project Common Areas,” as
used in this Lease, shall mean the portion of the Project reasonably designated
as such by Landlord. The term “Building Common Areas,” as used in this
Lease, shall mean the portions of the Common Areas located within the Building
reasonably designated as such by Landlord. The Common Areas shall be
maintained and operated in a manner consistent with the “Comparable Buildings,”
as that term is defined in Section 2.2.5 of this Lease, and the use thereof
shall be subject to such rules, regulations and restrictions as Landlord may
make from time to time. Landlord reserves the right to close temporarily, make
alterations or additions to, or change the location of elements of the Project
and the Common Areas;




	 	 	 	 	 
	 

	 	 
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provided, however, Landlord shall use commercially reasonable efforts not to
materially interfere with Tenant’s use of or access to the Premises in
connection with such closures,
alterations, additions and/or changes.




          1.2 Right of First Offer. Landlord hereby grants to the Tenant named in
the Summary (the “Original Tenant”) or an “Affiliate” of Tenant, as that term
is defined in Section 14.8, below, which is an assignee of the Original
Tenant (an “Affiliate Assignee”), a right of first offer with respect to
certain space located on the fourth (4th) floor of the Building,
as designated on Exhibit A-1, attached hereto (the “First Offer Space”).
Notwithstanding the foregoing, such first offer right of Tenant shall
commence only following the expiration or earlier termination of the existing
lease (including renewals) of the First Offer Space, and such right of first
offer shall be subordinate to all rights of which are set forth in leases of space in
the Project as of the date hereof, including any renewal, extension or
expansion rights set forth as of the date hereof in such leases, regardless
of whether such renewal, extension or expansion rights are executed strictly
in accordance with their terms, or are commemorated pursuant to a
lease amendment or a new lease (collectively, the “Superior Right Holders”)
with respect to such First Offer Space. Tenant’s right of first offer shall
be on the terms and conditions set forth in this
Section 1.2.




          1.2.1 Procedure for Offer. Landlord shall notify Tenant (the “First Offer
Notice”) from time to time when the First Offer Space becomes available for lease to
third parties, provided that no Superior Right Holder wishes to lease such
space. Pursuant to such First Offer Notice, Landlord shall offer to lease to
Tenant the First Offer Space. The First Offer Notice shall set forth the
“First Offer Rent,” as that term is defined in Section 1.2.3 below,
and the other economic terms upon which Landlord is willing to lease such
space to Tenant.




          1.2.2 Procedure for Acceptance. If Tenant wishes to exercise Tenant’s right
of first offer with respect to the space, then within five (5) business days
of delivery of the First Offer Notice to Tenant, Tenant shall deliver notice
to Landlord of Tenant’s election to exercise its right of first offer with
respect to the entire space described in the First Offer Notice on the terms
contained in such notice. If Tenant does not so notify Landlord within the five
(5) business day period, then Landlord shall be free to lease the space
described in the First Offer Notice to anyone to whom Landlord desires on any
terms Landlord desires. Notwithstanding anything to the contrary contained
herein, Tenant must elect to exercise its right of first offer, if at all,
with respect to all of the First Offer Space, and Tenant may not elect to lease only
a portion thereof.




          1.2.3 First Offer Space Rent. The “Rent,” as that term is defined in
Section 4.1, below, payable by Tenant for the First Offer Space (the “First
Offer Rent”) shall be equal to the “Fair Rental Value,” as that term is
defined in Section 2.2.2 of this Lease, as of the “First Offer Commencement
Date,” as that term is defined in Section 1.2.5, below.




          1.2.4 Construction In First Offer Space. Tenant shall take the First
Offer Space in its “as is” condition, subject to the payment of a tenant
improvement allowance, if any, as a part of the Fair Rental Value
determination, and the construction of improvements in the First Offer Space
shall comply with the terms of Article 8 of this Lease.




          1.2.5 Amendment to Lease. If Tenant timely exercises Tenant’s right to
lease the First Offer Space as set forth herein, Landlord and Tenant shall
within fifteen (15) days thereafter execute an amendment to this Lease for
such First Offer Space upon the terms and conditions as set forth in the First
Offer Notice and this Section 1.2. Tenant shall commence payment of
Rent for the First Offer Space, and the term of the First Offer Space shall
commence upon the date of delivery of the First Offer Space to Tenant (the
“First Offer Commencement Date”) and terminate on the date set forth in the
First Offer Notice.




          1.2.6 Termination of Right of First Offer. The rights contained in
this Section 1.2 shall be personal to the Original Tenant or its Affiliate
Assignee, and may only be exercised by the Original Tenant or its Affiliate
Assignee (and not any other assignee, sublessee or other transferee of the
Original Tenant’s interest in this Lease) if the Original Tenant or
its Affiliate Assignee occupies the entire Premises. The right of first
offer granted herein shall terminate as to particular First Offer Space upon
the failure by Tenant to exercise its right of first offer with respect to
such First Offer Space as offered by Landlord; provided, however, that
if Landlord fails to lease such First Offer Space to a third party during the
one hundred eighty




	 	 	 	 	 
	 

	 	 
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(180) day period immediately following Tenant’s failure to exercise its right of first offer,
then Tenant shall again have a right of first offer to lease such space in
accordance with the terms of this Section 1.2. Further, in the event
Tenant fails to lease such First Offer Space, and Landlord consummates a
lease with a third party for such First Offer Space (an “Interim
Lease”), following the expiration (including renewals) or earlier termination
of the Interim Lease (provided the Lease Term has not expired), Tenant shall
again have a right of first offer to lease such space in accordance with the
terms of this Section 1.2. Tenant shall not have the right to lease First
Offer Space, as provided in this Section 1.2. if, as of the date of the attempted
exercise of any right of first offer by Tenant, or as of the scheduled date
of delivery of such First Offer Space to Tenant, Tenant is in default under
this Lease or Tenant has previously been in default under this Lease more
than once.




ARTICLE 2




INITIAL LEASE TERM; OPTION TERM




     2.1 Initial Lease Term. The terms and provisions of this Lease shall be effective
as of the date of this Lease. The term of this Lease (the “Lease Term”) shall
be as set forth in Section 3.1 of the Summary, shall commence on the date set
forth in Section 3.2 of the Summary (the “Lease Commencement Date”), and shall
terminate on the date set forth in Section 3.3 of the Summary (the “Lease
Expiration Date”) unless this Lease is sooner terminated as hereinafter
provided. For purposes of this Lease, the term “Lease Year” shall mean
each consecutive twelve (12) month period during the Lease Term; provided,
however, that the first Lease Year shall commence on the Lease Commencement
Date and end on the last day of the eleventh month thereafter and the second
and each succeeding Lease Year shall commence on the first day of the next
calendar month; and further provided that the last Lease Year shall end on the
Lease Expiration Date. At any time during the Lease Term, Landlord may deliver
to Tenant a notice in the form as set forth in Exhibit C, attached hereto, as a
confirmation only of the information set forth therein, which Tenant shall
execute and return to Landlord within five (5) days of receipt thereof.



     2.2 Option Term.



          2.2.1 Landlord hereby grants the original Tenant named in the Summary
(the “Original Tenant”) or an Affiliate Assignee”), one (1) option to extend
the Lease Term for a period of five (5) years (the “Option Term”), which
option shall be exercisable only by written notice delivered by Tenant to
Landlord as provided below, provided that, as of the date of delivery of such
notice, Tenant is not in default under this Lease beyond any applicable
cure period set forth in this Lease, and has not previously been in default
under this Lease beyond any applicable cure period set forth in this Lease
more than once. Upon the proper exercise of such option to extend, and
provided that, as of the end of the initial Lease Term, Tenant is not
in default under this Lease, beyond any applicable cure period set forth in
this Lease, and has not previously been in default under this Lease beyond any
applicable cure period set forth in this Lease more than once, the Lease Term,
as it applies to the Premises, shall be extended for a period of five (5)
years. The rights contained in this Section 2.2 shall be personal to the
Original Tenant and any Affiliate Assignee and may only be exercised by the
Original Tenant or an Affiliate Assignee (and not any other assignee,
sublessee or transferee of the Original Tenant’s interest in this Lease) if
the Original Tenant or an Affiliate Assignee occupies the entire Premises. In
the event Tenant fails to timely exercise the right set forth in this Section 2.2,
this Section 2.2 shall be null and void and of no further force or effect.




          2.2.2 Option Rent. The annual rent payable by Tenant during the Option
Term (the “Option Rent”) shall be equal to the “Fair Rental Value” for the
Premises as of the commencement date of the Option Term. The “Fair Rental
Value” shall be equal to the annual rent (including additional rent and
considering any “base year” or “expense stop” applicable thereto), including
all escalations, at which tenants are leasing non-sublease,
non-encumbered, non-equity, non-renewal commercial office space comparable in
size, location and quality to the Premises, for a comparable lease term, in an
arm’s length transactions consummated during the ten (10) month period (the
“Rent Review Period”) prior to the date Landlord delivers the “Option Rent
Notice,” as that term is defined in Section 2.2.3, below, or the First
Offer Commencement Date, as the case may be, which comparable commercial
office space is located in the Project, or if there are not a sufficient
number of comparable transactions in the Project than in “Comparable
Buildings,” as that term is defined in Section 2.2.5, below, taking into




	 	 	 	 	 
	 

	 	 
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consideration only the following concession: any tenant improvements or allowances
(the “Allowances”) provided or to be provided for such comparable space,
taking into account, and deducting, the value of the existing improvements in
the Premises or the First Offer Space, as the case may be, such value to be
based upon the age, quality and layout of the improvements and the extent to
which the same can be utilized by a general office user. If in determining
the Option Rent a tenant improvement allowance is granted as set forth
hereinabove, Landlord may, at Landlord’s sole option, elect any or a portion
of the following: (A) to grant some or all of the Allowances to Tenant in the
form as described above (i.e., as an improvement allowance), and (B) to
adjust the rental rate component of the Option Rent to be an effective rental rate
which takes into consideration the total dollar value of the Allowances (in
which case the Allowances evidenced in the effective rental rate shall not be
granted to Tenant).




          2.2.3 Exercise of Options. The option contained in this Section 2.2 shall
be exercised by Tenant, if at all, and only by Tenant delivering irrevocable
written notice of its exercise thereof to Landlord not less than seven (7)
months prior to the expiration of the initial Lease Term. In the event that
Tenant timely exercises the renewal option, then Landlord shall deliver notice
(the “Option Rent Notice”) to Tenant not less than five (5) months prior to
the expiration of the initial Lease Term, setting forth the Option Rent.
Tenant may, at Tenant’s option, object to the Option Rent contained in the
Option Rent Notice, by written notice to Landlord (the “Objection Notice”)
within thirty (30) days following Tenant’s receipt of the Option Rent Notice,
in which case the parties shall follow the procedure, and the Option Rent shall
be determined, as set forth in Section 2.2.4, below. In the event that Tenant shall fail
to timely deliver an Objection Notice, the Option Rent set forth in the Option
Rent Notice shall be the Option Rent due during the Option Term and Tenant
shall have no right to contest the same. Landlord and Tenant shall execute an
amendment setting forth the terms and conditions of the Option Term.




          2.2.4 Determination of Option Rent. In the event Tenant timely
and appropriately objects to the Option Rent or the First Offer Rent, as the
case may be, Landlord and Tenant shall attempt to agree upon the Option Rent or
the First Offer Rent, as the case may be, using their best good-faith efforts.
If Landlord and Tenant fail to reach agreement within ten (10) business days
following Tenant’s objection to the Option Rent or the First Offer Rent, as
the case may be (the “Outside Agreement Date”), then each party shall make a
separate determination of the Option Rent or the First Offer Rent, as the case
may be, within five (5) business days after the applicable Outside Agreement
Date, and such determinations shall be submitted to arbitration in accordance
with Sections 2.2.4.1 through 2.2.4.7 below.




               2.2.4.1 Landlord and Tenant shall each appoint one arbitrator who shall
be a real estate broker who shall have been active over the five (5) year
period ending on the date of such appointment in the leasing of first class
commercial office projects in the South of Market Street area of San
Francisco, California. The determination of the arbitrators shall be
limited solely to the issue of whether Landlord’s or Tenant’s submitted Option
Rent or the First Offer Rent, as the case may be, is the closest to the actual
Option Rent or the First Offer Rent, as the case may be, as determined by the
arbitrators, taking into account the requirements of Section 2.2.2 (and
1.2.3, as applicable) of this Lease. Each such arbitrator shall be appointed
within fifteen (15) days after the applicable Outside Agreement Date.



               2.2.4.2 The two (2) arbitrators so appointed shall within ten (10) days
of the date of the appointment of the last appointed arbitrator agree upon
and appoint an independent third arbitrator who shall be qualified under the
same criteria set forth hereinabove
for qualification of the initial two (2) arbitrators.



               2.2.4.3 The three (3) arbitrators shall within thirty (30) days of
the appointment of the third arbitrator reach a decision as to whether the
parties shall use Landlord’s or Tenant’s submitted Option Rent or the First
Offer Rent, as the case may be, and shall notify Landlord and Tenant thereof.



               2.2.4.4 The decision of the majority of the three (3) arbitrators shall
be binding upon Landlord and Tenant.



               2.2.4.5 If either Landlord or Tenant fails to appoint an arbitrator
within fifteen (15) days after the applicable Outside Agreement Date, then the
arbitrator appointed by


 
	 	 	 	 	 
	 

	 	 
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one of them shall reach a decision, notify Landlord and Tenant thereof, and such
arbitrator’s decision shall be binding upon Landlord and Tenant.




               2.2.4.6 If the two (2) arbitrators fail to agree upon and appoint a
third arbitrator, or if both parties fail to appoint an arbitrator, then the
appointment of the third arbitrator or any arbitrator shall be dismissed and
the matter to be decided shall be forthwith submitted to arbitration under the
provisions of the American Arbitration Association, but subject to the
instruction set forth in this Section 2.2.4.



               2.2.4.7 The cost of the arbitration shall be paid by Landlord and Tenant
equally.



          2.2.5 For purposes of this Lease, “Comparable Buildings” shall mean
first-class commercial office projects located in San Francisco, California
with similar locations and with views and amenities similar to the Building.




ARTICLE 3




 BASE RENT




     Tenant shall pay, without prior notice or demand, to Landlord or Landlord’s agent at
the management office of the Project, or, at Landlord’s option, at such other
place as Landlord may from time to time designate in writing, by a check for
currency which, at the time of payment, is legal tender for private or public
debts in the United States of America, base rent (“Base Rent”) as set forth in
Section 4 of the Summary, payable in equal monthly installments as set forth
in Section 4 of the Summary in advance on or before the first day of each and
every calendar month during the Lease Term, without any setoff or deduction
whatsoever, except as specifically set forth in this Lease. The Base Rent for
the first full month of the Lease Term shall be paid at the time of Tenant’s
execution of this Lease. If any Rent payment date (including the
Lease Commencement Date) falls on a day of the month other than the first day
of such month or if any payment of Rent is for a period which is shorter than
one month, the Rent for any fractional month shall accrue on a daily basis for
the period from the date such payment is due to the end of such calendar month
or to the end of the Lease Term at a rate per day which is equal to 1/365
of the applicable annual Rent. All other payments or adjustments required to
be made under the terms of this Lease that require proration on a time basis
shall be prorated on the same basis.



ARTICLE 4 




 ADDITIONAL RENT




     4.1
General Terms. In addition to paying the Base Rent specified in Article 3 of
this Lease, Tenant shall pay, commencing after the expiration of the “Base
Year”, “Tenant’s Share” of the annual “Direct Expenses,” as those terms are
defined in Sections 4.2.1, 4.2.6 and 4.2.2 of this Lease, respectively, which
are in excess of the amount of Direct Expenses applicable to the Base Year;
provided, however, that in no event shall any decrease in Direct Expenses for
any “Expense Year,” as that term is defined in Section 4.2.6 below, below
Direct Expenses for the Base Year entitle Tenant to any decrease in Base Rent
or any credit against sums due under this Lease. Such payments by Tenant,
together with any and all other amounts payable by Tenant to Landlord pursuant
to the terms of this Lease, are hereinafter collectively referred to as
the “Additional Rent”, and the Base Rent and the Additional Rent are herein
collectively referred to as “Rent.” All amounts due under this Article 4 as
Additional Rent shall be payable for the same periods and in the same manner
as the Base Rent. Without limitation on other obligations of Tenant which
survive the expiration of the Lease Term, the obligations of Tenant to pay the
Additional Rent provided for in this Article 4 shall survive the expiration of the Lease
Term; provided, however, that other than “Tax Expenses,” as that term is
defined in Section 4.2.5.1, below, levied by a governmental authority, or
utility charges, Tenant shall not be responsible for Tenant’s Share of any
Direct Expenses attributable to any “Expense Year” which are first billed to
Tenant more than two (2) years after the Lease Expiration Date.



     4.2
Definitions of Key Terms Relating to Additional Rent. As used in
this Article 4, the following terms shall have the meanings hereinafter set
forth:



          4.2.1 “Base Year” shall mean the period set forth in Section 5 of the Summary.





	 	 	 	 	 
	 

	 	 
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          4.2.2 “Direct Expenses” shall mean “Operating Expenses” and “Tax Expenses.”




          4.2.3 “Expense Year” shall mean each calendar year in which any portion
of the Lease Term falls, through and including the calendar year in which the
Lease Term expires, provided that Landlord, upon notice to Tenant, may change
the Expense Year from time to time to any other twelve (12) consecutive month
period, and, in the event of any such change, Tenant’s Share of Direct Expenses
shall be equitably adjusted for any Expense Year involved in any such change.




          4.2.4 “Operating Expenses” shall mean all expenses, costs and amounts
of every kind and nature which Landlord pays or accrues during any Expense Year
because of or in connection with the ownership, management, maintenance,
security, repair, replacement, restoration or operation of the Project, or
any portion thereof. Without limiting the generality of the foregoing,
Operating Expenses shall specifically include any and all of the following: (i)
the cost of supplying all utilities, the cost of operating, repairing,
maintaining, and renovating the utility, telephone, mechanical, sanitary, storm
drainage, and elevator systems, and the cost of maintenance and service
contracts in connection therewith; (ii) the cost of licenses,
certificates, permits and inspections and the cost of contesting any
governmental enactments which may affect Operating Expenses, and the costs
incurred in connection with a transportation system management program or
similar program; (iii) the cost of all insurance carried by Landlord
in connection with the Project; (iv) the cost of landscaping, relamping, and
all supplies, tools, equipment and materials used in the operation, repair and
maintenance of the Project, or any portion thereof; (v) costs incurred in
connection with the repair, maintenance or operation of parking areas servicing
the Building; (vi) fees and other costs, including management fees (provided,
however, such management fee shall not materially exceed the management
fees charged by landlords of other comparable office buildings in San
Francisco, California, and which are managed by a first class management
company with a general reputation for excellence and integrity), consulting
fees, reasonable legal fees and accounting fees, of all contractors and
consultants in connection with the management, operation, maintenance
and repair of the Project; (vii) payments under any equipment rental agreements
and the fair rental value of any management office space; (viii) wages,
salaries and other compensation and benefits, including taxes levied thereon,
of all persons engaged in the operation, maintenance and security of the
Project; (ix) costs under any instrument pertaining to the sharing of costs by
the Project; (x) operation, repair, maintenance and replacement of all systems
and equipment and components thereof of the Building; (xi) the cost of
janitorial, alarm, security and other services, replacement of wall and floor
coverings, ceiling tiles and fixtures in common areas, maintenance and
replacement of curbs and walkways, exterior windows and walls, repair to roofs and
re-roofing, waterproofing and sealing of garage, foundation and basement areas;
(xii) amortization (including interest, at a commercially reasonable rate, on
the unamortized cost) of the cost of acquiring or the rental expense of
personal property used in the maintenance, operation and repair of the Project,
or any portion thereof; (xiii) the cost of capital improvements or other
costs incurred in connection with the Project (A) which are intended as a labor
savings device or to effect other economies in the operation or maintenance of
the Project, or any portion thereof, (B) that are required to comply with
present or anticipated conservation programs, (C) which are replacements or
modifications of nonstructural items located in the Common Areas required
to keep the Common Areas in good order or condition, or (D) that are required
under any governmental law or regulation, except for capital improvements or
costs to remedy a condition existing as of the Lease Commencement Date which a
federal, state or municipal governmental authority, if it had knowledge of such
condition existing as of the Lease Commencement Date, would have then required
to be remedi
ed pursuant to governmental laws or regulations in their form
existing as of the Lease Commencement Date; provided, however, that any
capital expenditure shall be amortized with interest (at a commercially
reasonable rate incurred by Landlord) over its useful life as Landlord shall
reasonably determine; (xiv) costs, fees, charges or assessments
imposed by, or resulting from any mandate imposed on Landlord by, any federal, state or local
government for fire and police protection, trash removal, community services,
or other services which do not constitute “Tax Expenses” as that term is
defined in Section 4.2.5, below; and (xv) payments under any easement,
license, operating agreement, declaration, restrictive covenant, or instrument
pertaining to the sharing of costs by the Building. If Landlord is not
furnishing any particular work or service (the cost of which, if performed by
Landlord, would be included in Operating Expenses) to a tenant who has
undertaken to perform such work or service in lieu of the performance thereof
by Landlord, Operating Expenses shall be deemed to be increased by an amount
equal to the additional Operating Expenses which would




	 	 	 	 	 
	 

	 	 
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reasonably have been incurred during such period by Landlord if it had at its own
expense furnished such work or service to such tenant. If the Project is not
at least ninety-five percent (95%) occupied during all or a portion of the
Base Year or any Expense Year, Landlord shall elect to make an appropriate
adjustment to the components of Operating Expenses for such year to determine
the amount of Operating Expenses that would have been incurred had the
Project been ninety-five percent (95%) occupied; and the amount so determined
shall be deemed to have been the amount of Operating Expenses for such year.
Operating Expenses for the Base Year shall not include market-wide labor-rate
increases due to extraordinary circumstances, including, but not limited to,
boycotts and strikes, and utility rate increases due to
extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages, or amortized costs
relating to capital improvements. In no event shall the components of Direct
Expenses for any Expense Year related to electrical costs be less than
the components of Direct Expenses related to electrical costs in the Base
Year. Landlord shall not collect Operating Expenses from Tenant and all other
tenants in the Building in an amount in excess of what Landlord incurs for the
items included in Operating Expenses. If Landlord does not carry earthquake
insurance for the Building during the Base Year but subsequently
obtains earthquake insurance for the Building during the Lease Term, then from
and after the date upon which Landlord obtains such earthquake insurance and
continuing throughout the period during which Landlord maintains such
insurance, Operating Expenses for the Base Year shall be deemed to be
increased by the amount of the premium Landlord would have incurred
had Landlord maintained such insurance for the same period of time during the
Base Year as such insurance is maintained by Landlord during such subsequent
Expense Year. Notwithstanding the foregoing, Operating Expenses for purposes
of this Lease shall not include the following:




               (i) costs of leasing commissions, attorneys’ fees and other costs
and expenses incurred in connection with negotiations or disputes with present
or prospective tenants or other occupants of the Building;



               (ii) costs (including permit, license and inspection costs) incurred
in renovating or otherwise improving, decorating or redecorating rentable
space for other tenants or
vacant rentable space;



               (iii) except as otherwise specifically provided in this Section
4.2.4, costs incurred by Landlord for capital repairs, improvements, equipment
and alterations to the Building or Project (including, but not limited to
“Renovations” as that term is defined in Section 29.30 of this Lease, to the
extent such Renovations are considered to be capital improvements);



               (iv) costs of services or other benefits which are either not offered
to Tenant or for which Tenant is charged directly, but which are provided to
other tenants of the Building without a separate charge;



               (v) except for a property management fee, costs of overhead or
profit increment paid to Landlord or to subsidiaries or affiliates of
Landlord for services in connection with the Building to the extent the same
unreasonably exceeds the cost of such services rendered by qualified, first
class unaffiliated third parties on a competitive basis;



               (vi) except as otherwise specifically provided in this Section
4.2.4, costs of interest on debt or amortization on any mortgages, and
principal payments and other charges, costs and expenses payable under any
mortgage, if any;



               (vii) costs of any compensation and employee benefits paid to
clerks, attendants or other persons in a commercial concession operated by
Landlord, except the Building parking facility;



               (viii) marketing costs, legal fees, space planner’s fees, and
advertising and promotional expenses and brokerage fees incurred in
connection with the original development, subsequent improvement, or original
or future leasing of the Building;



               (ix) any bad debt loss, rent loss, or reserves for bad debts or rent
loss;



               (x) tax penalties incurred as a result of Landlord’s negligence, inability
or unwillingness to make payments or file returns when due;




	 	 	 	 	 
	 

	 	 
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               (xi) all items and services for which Tenant or any other tenant in
the Building reimburses Landlord or which Landlord provides selectively to
one or more tenants (other than Tenant) without reimbursement;



               (xii) fees and reimbursements payable to Landlord (including its
parent organization, subsidiaries and/or affiliates) or by Landlord for
management of the Building which unreasonably exceeds the amount which would
normally be paid to a company, in connection with the management of
comparable buildings, with a general reputation for excellence and integrity,
at “arms length” and which is not, directly or indirectly, affiliated
with Landlord;



               (xiii) costs arising from the gross negligence or willful misconduct
of Landlord;



               (xiv) costs incurred to comply with laws relating to the removal
of hazardous material (as defined under applicable law) and asbestos
containing material (collectively, “Hazardous Material”) which was in
existence in the Building or on the Project prior to the Lease Commencement
Date, and was of such a nature that a federal, State or municipal governmental
authority, if it had then had knowledge of the presence of such Hazardous
Material, in the state, and under the conditions that it then existed in the Building
or on the Project, would have then required the removal of such Hazardous
Material or other remedial or containment action with respect thereto; costs
incurred with respect to any Hazardous Material which was in existence in the
Building or on the Project prior to the Lease Commencement Date, and which
Landlord is obligated to abate or remediate after the Lease Commencement Date
in accordance with an abatement or remediation plan which was in effect prior
to the Lease Commencement Date; and costs incurred to remove, remedy, contain, or
treat Hazardous Material, which Hazardous Material is brought into the
Building or onto the Project after the date hereof by Landlord or any other
tenant of the Project and is of such a nature, at that time, that a federal,
State or municipal governmental authority, if it had then had knowledge of the
presence of such Hazardous Material, in the state and under the conditions, that it then
exists in the Building or on the Project, would have then required the removal
of such Hazardous Material or other remedial or containment action with
respect thereto;



               (xv) any liability, damage, award or judgment for injury or death
to persons, or for property damage;



               (xvi) costs, other than those incurred in ordinary maintenance and
repair, for sculpture, paintings, fountains or other objects of art; and



               (xvii) costs associated with the operation of the business of Landlord,
as the same are distinguished from the costs of operation of the Premises or
Project, including company accounting and legal matters, costs of defending
any lawsuits with any mortgagee, costs of selling, syndicating, financing,
mortgaging or hypothecating any of Landlord’s interest in the Premises or
Project, costs (including attorney fees and costs of settlement judgments
and payments in lieu thereof) arising from claims, disputes or potential
disputes in connection with potential or actual claims, litigation or
arbitrations respecting Landlord and/or the Project.



          4.2.5
Taxes.




               4.2.5.1 “Tax Expenses” shall mean all federal, state, county, or
local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment,
appurtenances, furniture and other personal property used in connection with
the Project, or any portion thereof), which shall be paid or accrued during
any Expense Year (without regard to any different fiscal year used by
such governmental or municipal authority) because of or in connection with the
ownership, leasing and operation of the Project, or any portion thereof.



               4.2.5.2 Tax Expenses shall include, without limitation: (i) Any tax on
the rent, right to rent or other income from the Project, or any portion
thereof, or as against the




	 	 	 	 	 
	 

	 	 
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business of leasing the Project, or any portion thereof; (ii) Any assessment, tax, fee, levy
or charge in addition to, or in substitution, partially or totally, of any
assessment, tax, fee, levy or charge previously included within the
definition of real property tax, it being acknowledged by Tenant and Landlord
that Proposition 13 was adopted by the voters of the State of California
in the June 1978 election (“Proposition 13”) and that assessments, taxes,
fees, levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse
removal and for other governmental services formerly provided without charge
to property owners or occupants, and, in further recognition of the decrease in
the level and quality of governmental services and amenities as a result of
Proposition 13, Tax Expenses shall also include any governmental or private
assessments or the Project’s contribution towards a governmental
or private
cost-sharing agreement for the purpose of augmenting or improving the quality
of services and amenities normally provided by governmental agencies; (iii)
Any assessment, tax, fee, levy, or charge allocable to or measured by the area of
the Premises or the Rent payable hereunder, including, without limitation,
any business or gross income tax or excise tax with respect to the receipt of
such rent, or upon or with respect to the possession, leasing, operating,
management, maintenance, alteration, repair, use or occupancy by Tenant of
the Premises, or any portion thereof; and (iv) Any assessment, tax, fee, levy or
charge, upon this transaction or any document to which Tenant is a party,
creating or transferring an interest or an estate in the Premises.




               4.2.5.3 Any costs and expenses (including, without limitation,
reasonable attorneys’ fees) incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year
such expenses are paid. Tax refunds shall be credited against Tax Expenses
and refunded to Tenant regardless of when received, based on the Expense Year
to which the refund is applicable, provided that in no event shall the amount to
be refunded to Tenant for any such Expense Year exceed the total amount paid by
Tenant as Additional Rent under this Article 4 for such Expense Year. If Tax
Expenses for any period during the Lease Term or any extension thereof are
increased after payment thereof for any reason, including, without limitation,
error or reassessment by applicable governmental or municipal authorities,
Tenant shall pay Landlord within thirty (30) days following Landlord’s written
demand therefore (which written demand shall include reasonable,
back-up documentation of such increase) Tenant’s Share of any such increased
Tax Expenses included by Landlord as Building Tax Expenses pursuant to the
terms of this Lease. Notwithstanding anything to the contrary contained in
this Section 4.2.5 (except as set forth in Section 4.2.5.1, above), there shall
be excluded from Tax Expenses (i) all excess profits taxes, franchise
taxes, gift taxes, capital stock taxes, inheritance and succession taxes,
estate taxes, federal and state income taxes, and other taxes to the extent
applicable to Landlord’s general or net income (as opposed to rents, receipts
or income attributable to operations at the Project), (ii) any items included
as Operating Expenses, (iii) any items paid by Tenant under Section 4.5 of this
Lease, (iv) tax penalties incurred as a result of Landlord’s negligence,
inability or unwillingness to make payments or file returns when due, and (v)
taxes on tenant improvements in the Building based upon an assessed level in
excess of the Building standard set forth in Section 4.5.2, below.



               4.2.5.4 The amount of Tax Expenses for the Base Year attributable to
the valuation of the Project, inclusive of tenant improvements, shall be known
as “Base Taxes”. If in any comparison year subsequent to the Base Year, the
amount of Tax Expenses decreases below the amount of Base Taxes, then for
purposes of all subsequent comparison years, including the comparison year in
which such decrease in Tax Expenses occurred, the Base Taxes, and therefore the
Base Year, shall be decreased by an amount equal to the decrease in Tax Expenses.



          4.2.6 “Tenant’s Share” shall mean the percentage set forth in Section 6 of
the Summary, and is based on the ratio of the square footage of the Premises
to the total square footage of the Project.




     4.3
Allocation of Direct Expenses.



          4.3.1
Method of Allocation. The parties acknowledge that the Building is
a
part of a multi-building project and that the costs and expenses incurred in connection with
the Project (i.e. the Direct Expenses) are an aggregate of the Building and
the other buildings in the Project.




          4.3.2
Cost Pools. Landlord shall have the right, from time to time, to
equitably allocate some or all of the Direct Expenses for the Project among
different portions or occupants




	 	 	 	 	 
	 

	 	 
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of the Project (the “Cost Pools”), in Landlord’s discretion, which allocation shall be
consistently applied. Such Cost Pools may include, but shall not be limited
to, the office space tenants of a building of the Project or of the Project,
and the retail space tenants of a building of the Project or of the Project.
The Direct Expenses within each such Cost Pool shall be allocated and
charged to the tenants as determined by Landlord in accordance with sound
real estate management principles, consistently applied. Landlord shall not
allocate Direct Expenses into Cost Pools as provided in this Section 4.3.2 as
a subterfuge to increase the amount of Direct Expenses payable by Tenant
hereunder.




     4.4
Calculation and Payment of Additional Rent. If for any Expense Year
ending or commencing within the Lease Term, Tenant’s Share of Direct Expenses
for such Expense Year exceeds Tenant’s Share of Direct Expenses applicable to
the Base Year, then Tenant shall pay to Landlord, in the manner set forth in
Section 4.4.1, below, and as Additional Rent, an amount equal to the excess
(the “Excess”).



          4.4.1
Statement of Actual Direct Expenses and Payment by Tenant.
Landlord shall endeavor to give to Tenant following the end of each Expense Year, a
statement (the “Statement”) which shall state in general major categories the
Direct Expenses incurred or accrued for such preceding Expense Year, and
which shall indicate the amount of the Excess. Upon receipt of the Statement
for each Expense Year commencing or ending during the Lease Term, if an
Excess is present, Tenant shall pay, within thirty (30) days following Tenant’s
receipt of the Statement, the full amount of the Excess for such Expense
Year, less the amounts, if any, paid during such Expense Year as “Estimated
Excess,” as that term is defined in Section 4.4.2, below. The failure of
Landlord to timely furnish the Statement for any Expense Year shall
not prejudice Landlord or Tenant from enforcing its rights under this Article
4. Even though the Lease Term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant’s Share of Direct
Expenses for the Expense Year in which this Lease terminates, if an Excess if
present, Tenant shall, within thirty (30) days following Tenant’s receipt of
the Statement, pay to Landlord such amount, and if Tenant paid more as
Estimated Excess than actual Excess, Landlord shall, within thirty (30) days
following Landlord’s determination, deliver a check to Tenant in the amount
of such overpayment. The provisions of this Section 4.4.1 shall survive the
expiration or earlier termination of the Lease Term.




          4.4.2
Statement of Estimated Direct Expenses. In addition, Landlord
shall endeavor to give Tenant a yearly expense estimate statement (the
“Estimate Statement”) which shall set forth Landlord’s reasonable estimate (the
“Estimate”) of what the total amount of Direct Expenses for the then-current
Expense Year shall be and the estimated excess (the “Estimated Excess”) as
calculated by comparing the Direct Expenses for such Expense Year, which shall
be based upon the Estimate, to the amount of Direct Expenses for the Base Year.
The failure of Landlord to timely furnish the Estimate Statement for any
Expense Year shall not preclude Landlord from enforcing its rights to collect
any Estimated Excess under this Article 4, nor shall Landlord be prohibited
from revising any Estimate Statement or Estimated Excess theretofore delivered
to the extent necessary; provided that Landlord shall not revise any Estimate
Statement or Estimated Excess more than once per year. Thereafter, Tenant
shall pay, within thirty (30) days following Tenant’s receipt of the Estimate
Statement, a fraction of the Estimated Excess for the then-current Expense Year
(reduced by any amounts paid pursuant to the next to last sentence of this
Section 4.4.2). Such fraction shall have as its numerator the number of
months which have elapsed in such current Expense Year, including the month of
such payment, and twelve (12) as its denominator. Until a new Estimate
Statement is furnished (which Landlord shall have the right to deliver to
Tenant at any time), Tenant shall pay monthly, with the monthly Base Rent
installments, an amount equal to one-twelfth (1/12) of the total Estimated Excess
set forth in the previous Estimate Statement delivered by Landlord to Tenant.




     4.5
Taxes and Other Charges for Which Tenant Is Directly Responsible.



          4.5.1 Tenant shall be liable for and shall pay ten (10) business days
before delinquency, taxes levied against Tenant’s equipment, furniture,
fixtures and any other personal property located in or about the Premises. If
any such taxes on Tenant’s equipment, furniture, fixtures and any other
personal property are levied against Landlord or Landlord’s property or if the
assessed value of Landlord’s property is increased by the inclusion therein of a value
placed upon such equipment, furniture, fixtures or any other personal property
and if Landlord pays the taxes based upon such increased assessment, which
Landlord shall have the right to do regardless of the validity thereof but
only under proper protest if requested by Tenant, Tenant shall upon



	 	 	 	 	 
	 

	 	 
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demand repay to Landlord the taxes so levied against Landlord or the proportion of such
taxes resulting from such increase in the assessment, as the case may be.




          4.5.2 If the tenant improvements in the Premises, whether installed and/or
paid for by Landlord or Tenant and whether or not affixed to the real property
so as to become a part thereof, are assessed for real property tax purposes at
a valuation higher than the valuation at which tenant improvements conforming
to Landlord’s “building standard” in other space in the Building are assessed,
then the Tax Expenses levied against Landlord or the property by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal property
of Tenant and shall be governed by the provisions of Section 4.5.1, above.




          4.5.3 Notwithstanding any contrary provision herein, Tenant shall pay prior
to delinquency any (i) rent tax or sales tax, service tax, transfer tax or
value added tax, or any other applicable tax on the rent or services herein or
otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Premises or any portion of the Project, including
the Project parking facility; or (iii) taxes assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises.




ARTICLE 5 




 USE OF PREMISES




     5.1
Permitted Use. Tenant shall use the Premises solely for the Permitted Use
set forth in Section 7 of the Summary and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord’s sole discretion.



     5.2 Prohibited Uses. The uses prohibited under this Lease shall include,
without limitation, use of the Premises or a portion thereof for (i) offices of
any agency or bureau of the United States or any state or political subdivision
thereof; (ii) offices or agencies of any foreign governmental or political
subdivision thereof; (iii) offices of any health care professionals or service
organization; (iv) schools or other training facilities which are not ancillary to
corporate, executive or professional office use; (v) retail or restaurant uses;
or (vi) communications firms such as radio and/or television stations. Tenant
shall not allow occupancy density of use of the Premises which is greater than
one person for each 150 rentable square feet of the Premises. Tenant further
covenants and agrees that Tenant shall not use, or suffer or permit any person
or persons to use, the Premises or any part thereof for any use or purpose
contrary to the provisions of the Rules and Regulations set forth in
Exhibit D, attached hereto, or in violation of the laws of the United
States of America, the State of California, or the ordinances, regulations
or requirements of the local municipal or county governing body or other lawful
authorities having jurisdiction over the Project) including, without
limitation, any such laws, ordinances, regulations or requirements relating
to hazardous materials or substances, as those terms are defined by applicable
laws now or hereafter in effect. Tenant shall not do or permit anything to be
done in or about the Premises which will in any way damage the reputation of the Project
or obstruct or interfere with the rights of other tenants or occupants of the
Building, or injure or annoy them or use or allow the Premises to be used for
any improper, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises. Tenant shall
comply with all recorded covenants, conditions, and restrictions now or
hereafter affecting the Project.



ARTICLE 6




 SERVICES AND UTILITIES




     6.1
Standard Tenant Services. Landlord shall provide the following services on
all days (unless otherwise stated below) during the Lease Term.



          6.1.1 Subject to limitations imposed by all governmental rules, regulations
and guidelines applicable thereto, Landlord shall provide heating and air
conditioning (“HVAC”) when necessary for normal comfort for normal office use
in the Premises from 8:00 A.M. to 6:00 P.M. Monday through Friday
(collectively, the “Building Hours”), except for the date of observation of
New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving




	 	 	 	 	 
	 

	 	 
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Day, Christmas Day and, at Landlord’s reasonable discretion, other regionally or
nationally recognized holidays (collectively, the “Holidays”).




          6.1.2 Landlord shall provide adequate electrical wiring and facilities
for connection to Building standard ceiling mounted lighting fixtures and
normal office and incidental use equipment, provided that Tenant’s consumption
of electricity does not exceed 1 kilowatt/hour per usable square foot of the
Premises per month, which electrical usage shall be subject to applicable laws
and regulations, including Title 24. Tenant will design Tenant’s electrical
system serving any equipment producing nonlinear electrical loads to
accommodate such nonlinear electrical loads, including, but not limited to,
oversizing neutral conductors, derating transformers and/or providing
power-line filters. Engineering plans shall include a calculation of Tenant’s
fully connected electrical design load with and without demand factors and
shall indicate the number of watts of unmetered and submetered loads. Tenant shall bear
the cost of replacement of lamps, starters and ballasts for non-Building
standard lighting fixtures within the Premises.




          6.1.3 Landlord shall provide city water from the regular Building outlets
for drinking, lavatory and toilet purposes in the Building Common Areas.




          6.1.4 Landlord shall provide janitorial services to the Premises, except the
date of observation of the Holidays, in and about the Premises and window
washing services in a manner consistent with other comparable buildings in the
vicinity of the Building.




          6.1.5 Landlord shall provide nonexclusive, non-attended automatic
passenger elevator service during the Building Hours, shall have one elevator
available at all other times, except in the event of an emergency.




          6.1.6 Landlord shall provide nonexclusive freight elevator service subject to
scheduling by Landlord.




     Tenant shall cooperate fully with Landlord at all times and abide by all regulations
and requirements that Landlord may reasonably prescribe for the proper
functioning and protection of the HVAC, electrical, mechanical and plumbing
systems.




     6.2
Overstandard Tenant Use. Tenant shall not, without Landlord’s prior
written consent, use heat-generating machines, machines other than normal
fractional horsepower office machines, or equipment or lighting other than
Building standard lights in the Premises, which may affect the temperature
otherwise maintained by the air conditioning system or materially increase the
water normally furnished for the Premises by Landlord pursuant to the terms
of Section 6.1 of this Lease. If such consent is given, Landlord shall have
the right to install supplementary air conditioning units or other facilities
in the Premises, including supplementary or additional metering devices, and
the cost thereof, including the cost of installation, operation and
maintenance, increased wear and tear on existing equipment and other similar charges,
shall be paid by Tenant to Landlord upon billing by Landlord. In the event, in
Landlord’s reasonable discretion, Tenant uses water, electricity, heat or air
conditioning in excess of that supplied by Landlord pursuant to Section 6.1 of
this Lease, Tenant shall pay to Landlord, upon billing, the cost of such
excess consumption, the cost of the installation, operation, and maintenance
of equipment which is installed in order to supply such excess consumption,
and the cost, if any, of the increased wear and tear on existing equipment
caused by such excess consumption; and Landlord may, upon reasonable prior
notice to Tenant, install devices to separately meter any increased use and in
such event Tenant shall pay the increased cost directly to Landlord,
within ten (10) days following demand by Landlord (which demand shall include
reasonable back-up documentation), at the rates charged by the public utility
company furnishing the same, including the cost of such additional metering
devices, In the event Tenant delivers to Landlord detailed specifications for
any equipment Tenant intends to install in the Premises, Landlord shall
use commercially reasonable efforts to notify Tenant within ten (10) business
days following such receipt whether Landlord believes such equipment shall
cause excess consumption as set forth in this Section 6.2. To the extent
Landlord delivers a bill for excess water and/or electricity, following a
request by Tenant, Landlord shall meet with Tenant to discuss
Landlord’s determination of such excess usage. Tenant’s use of electricity
shall never exceed the capacity of the feeders to the Project or the risers or
wiring installation. If Tenant desires to use heat, ventilation or air
conditioning during hours other than those for which Landlord is obligated
to supply such utilities pursuant to the terms of Section 6.1 of this Lease,
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Landlord such prior notice, if any, as Landlord shall from time to time reasonably establish
as appropriate, to the extent such additional utilities can be made
available, and Landlord shall supply such utilities to Tenant at such hourly
cost to Tenant (which shall be treated as Additional Rent and which may
include an administrative fee) as Landlord shall from time to time reasonably
establish.




     6.3
Interruption of Use. Tenant agrees that Landlord shall not be liable
for damages, by abatement of Rent (except as set forth in Section 6.4, below)
or otherwise, for failure to furnish or delay in furnishing any service
(including telephone and telecommunication services), or for any diminution in
the quality or quantity thereof, when such failure or delay or diminution is
occasioned, in whole or in part, by breakage, repairs, replacements,
or improvements, by any strike, lockout or other labor trouble, by inability to
secure electricity, gas, water, or other fuel at the Building or Project after
reasonable effort to do so, by any riot or other dangerous condition,
emergency, accident or casualty whatsoever, by act or default of Tenant
or other parties, or by any other cause; and such failures or delays or
diminution shall never be deemed to constitute an eviction or disturbance of
Tenant’s use and possession of the Premises or relieve Tenant from paying Rent
(except as set forth in Section 6.4, below) or performing any of its
obligations under this Lease. Furthermore, Landlord shall not be liable under
any circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant’s business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any of the services or utilities as set forth in this
Article 6. Landlord may comply with voluntary controls or guidelines promulgated by
any governmental entity relating to the use or conservation of energy, water,
gas, light or electricity or the reduction of automobile or other emissions
without creating any liability of Landlord to Tenant under this Lease, provided
that the Premises are not thereby rendered untenantable.



     6.4
Rent Abatement. Notwithstanding anything in this Lease to the contrary, in
the event that Tenant is prevented from using, and does not use, the Premises
or any portion thereof, as a result of any failure of Landlord to provide any
services, utilities or access to the Premises as required by this Lease (other
than for a reason beyond Landlord’s reasonable control, including, but not
limited to, loss of electricity due to black-outs) (an “Abatement Event”), then
Tenant shall give Landlord notice of such Abatement Event, and if such
Abatement Event continues for three (3) consecutive business days after
Landlord’s receipt of any such notice (the “Eligibility Period”), then the Base
Rent and Tenant’s Share of Direct Expenses shall be abated or reduced, as the
case may be, after expiration of the Eligibility Period for such time that Tenant
continues to be so prevented from using, and does not use, the Premises or a
portion thereof, in the proportion that the rentable area of the portion of the
Premises that Tenant is prevented from using, and does not use, bears to the
total rentable area of the Premises. Such right to abate Base Rent and Tenant’s
Share of Direct Expenses shall be Tenant’s sole and exclusive remedy at law or
in equity for an Abatement Event. Except as provided in this Section 6.4, nothing
contained herein shall be interpreted to mean that Tenant is excused from
paying Rent due hereunder.



ARTICLE 7




 REPAIRS




     Tenant shall, at Tenant’s own expense, pursuant to the terms of this Lease,
including without limitation Article 8 hereof, keep the Premises, including
all improvements, fixtures and furnishings therein, in good order, repair and
condition at all times during the Lease Term. In addition, Tenant shall, at
Tenant’s own expense, but under the supervision and subject to the prior
approval of Landlord, and within any reasonable period of time specified by
Landlord, pursuant to the terms of this Lease, including without limitation
Article 8 hereof, promptly and adequately repair all damage to the Premises
and replace or repair all damaged, broken, or worn fixtures and appurtenances,
except for damage caused by ordinary wear and tear or beyond the reasonable
control of Tenant; provided however, that, at Landlord’s option, or if Tenant fails
to make such repairs, Landlord may, after written notice to Tenant and
Tenant’s failure to commence repair within five (5) days thereafter and to
diligently pursue the same to completion (except in the event of an emergency,
when no notice shall be required) but need not, make such repairs and
replacements, and Tenant shall pay Landlord the cost thereof, including a
percentage of the cost thereof (to be uniformly established for the Building
and/or the Project) sufficient to reimburse Landlord for all overhead, general
conditions, fees and other costs or expenses arising from Landlord’s
involvement with such repairs and replacements forthwith within thirty
(30) days after being billed for same. Landlord shall be responsible for
repairs to the exterior walls,





	 	 	 	 	 
	 

	 	 
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foundation and roof of the Building, the structural portions of the floors of the Building,
the systems and equipment of the Building, and the Common Areas, except to
the extent that such repairs are required due to the negligence or willful
misconduct of Tenant; provided, however, that if such repairs are due to the
negligence or willful misconduct of Tenant, Landlord shall nevertheless make
such repairs, but at Tenant’s expense, or, if covered by Landlord’s
insurance, Tenant shall only be obligated to pay any deductible in connection
therewith. Subject to Article 27, below, Landlord may, but shall not be
required to, enter the Premises at all reasonable times to make such repairs
to the Premises or repairs, alterations, improvements or additions to the
Project or to any equipment located in the Project as Landlord shall deem
reasonably necessary or as Landlord may be required to do by governmental or
quasi-governmental authority or court order or decree. Tenant hereby waives
any and all rights under and benefits of subsection 1 of Section 1932 and
Sections 1941 and 1942 of the California Civil Code or under any similar law,
statute, or ordinance now or hereafter in effect.




ARTICLE 8 




 ADDITIONS AND ALTERATIONS




     8.1 Landlord’s Consent to Alterations. Tenant may not make any
improvements, alterations, additions or changes to the Premises or any
mechanical, plumbing or HVAC facilities or systems pertaining to the Premises
(collectively, the “Alterations”) without first procuring the prior written
consent of Landlord to such Alterations, which consent shall be requested by
Tenant not less than thirty (30) days prior to the commencement thereof, and
which consent may be withheld in Landlord’s reasonable discretion.
Notwithstanding the foregoing, Tenant shall be permitted to make Alterations
following ten (10) business days-notice to Landlord, but without Landlord’s
prior approval, to the extent such Alterations are merely cosmetic in nature
(i.e. re-painting and re-carpeting), and provided that such Alterations do
not (a) affect the exterior of the Building, (b) affect the structure of the
Building or the systems and equipment of the Building, and/or (c) interfere
with Building services or the use of the Project or the Building by other
tenants or occupants. The construction of the initial improvements to
the Premises shall be governed by the terms of the Tenant Work Letter and not
the terms of this Article 8.



     8.2 Manner of Construction. Landlord may impose, as a condition of its consent
to any and all Alterations or repairs of the Premises or about the Premises,
such requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirement that Tenant utilize for such
purposes only contractors, subcontractors, materials, mechanics and materialmen
selected by Tenant from a list provided and approved by
Landlord. Notwithstanding the foregoing, in the event such Alterations or
repairs (i) affect the exterior of the Building, (ii) affect the structure of
the Building, or the systems and equipment of the Building, or (iii) may
interfere with Building services or the use of the Building or Project by other
tenants or occupants, then Landlord may condition its approval in Landlord’s
sole discretion. Prior to the expiration or earlier termination of this Lease,
Tenant shall, at Tenant’s expense, remove any Alteration designated by Landlord
for removal by notice to Tenant prior to the expiration or earlier termination
of this Lease, and shall repair any damage to the Premises or the Building
caused by such removal; provided, however, in the event that in Tenant’s request
for approval of such Alterations or the “Final Working Drawings” for the
“Tenant Improvements,” as those terms are defined in the Tenant Work Letter,
attached hereto as Exhibit B, constructed pursuant to the terms of the Tenant
Work Letter, as the case may be, Tenant requests a determination by Landlord
(the “Designation Notice”) as to whether or not Tenant shall be required to
remove such Alteration or Tenant Improvements upon the expiration or
earlier termination of the Lease, in accordance with the terms hereof, then
Landlord shall include in its consent (if granted) notice as to whether such
Alteration or Tenant Improvements shall be required to be removed prior to the
expiration or earlier termination of this Lease, and corresponding repairs
made. If such Alterations will involve the use of or disturb
hazardous materials or substances existing in the Premises, Tenant shall comply
with Landlord’s rules and regulations concerning such hazardous materials or
substances. Tenant shall construct such Alterations and perform such repairs
in a good and workmanlike manner, in conformance with any and all applicable
federal, state, county or municipal laws, rules and regulations and pursuant to
a valid building permit, issued by the City of San Francisco, all in conformance
with Landlord’s construction rules and regulations. In the event Tenant
performs any Alterations in the Premises which require or give rise to
governmentally required changes to the “Base Building,” as that term is defined
below, then Landlord shall, at Tenant’s expense, make such




	 	 	 	 	 
	 

	 	 
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changes to the Base Building. The “Base Building” shall include the structural portions of
the Building, and the public restrooms and the systems and equipment located
in the internal core of the Building on the floor or floors on which the
Premises are located. In performing the work of any such Alterations, Tenant
shall have the work performed in such manner so as not to obstruct access to
the Project or any portion thereof, by any other tenant of the Project, and so as not
to obstruct the business of Landlord or other tenants in the Project. Tenant
shall not use (and upon notice from Landlord shall cease using) contractors,
services, workmen, labor, materials or equipment that, in Landlord’s
reasonable judgment, would disturb labor harmony with the workforce or trades
engaged in performing other work, labor or services in or about the
Building or the Common Areas. In addition to Tenant’s obligations under
Article 9 of this Lease, upon completion of any Alterations, Tenant agrees to
cause a Notice of Completion to be recorded in the office of the Recorder of
the County of San Francisco in accordance with Section 3093 of the Civil Code
of the State of California or any successor statute, and Tenant shall deliver to
the Project management office a reproducible copy of the “as built” drawings
of the Alterations (to the extent such Alterations are of the type and scope
for which such plans are typically prepared) as well as all permits,
approvals and other documents issued by any governmental agency in connection
with the Alterations.




     8.3 Payment for Improvements. If payment is made directly to contractors,
Tenant shall comply with Landlord’s requirements for final lien releases and
waivers in connection with Tenant’s payment for work to contractors. If
Tenant orders any work directly from Landlord, Tenant shall pay to Landlord a
percentage of the cost of such work sufficient to compensate Landlord for all
overhead, general conditions, fees and other costs and expenses arising
from Landlord’s involvement with such work. If Tenant does not order the
work directly from Landlord, Tenant shall reimburse Landlord for Landlord’s
actual out-of-pocket costs and expenses actually incurred in connection with
Landlord’s review of such work.



     8.4 Construction Insurance. In addition to the requirements of Article 10 of
this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries “Builder’s All Risk” insurance in an amount approved by
Landlord, in Landlord’s reasonable discretion, covering the construction of
such Alterations, and such other insurance as Landlord may require, it
being understood and agreed that all of such Alterations shall be insured by
Tenant pursuant to Article 10 of this Lease immediately upon completion
thereof. In addition, to the extent any Alteration is reasonably anticipated
to cost in excess of $100,000.00, Landlord may, in its discretion, require
Tenant to obtain a lien and completion bond or some alternate form of security
satisfactory to Landlord in an amount sufficient to ensure the lien-free completion
of such Alterations and naming Landlord as a co-obligee.



     8.5 Landlord’s Property. All Alterations, improvements, fixtures, equipment
and/or appurtenances which may be installed or placed in or about the Premises,
from time to time, shall be at the sole cost of Tenant and shall be and become
the property of Landlord, except that Tenant may remove any Alterations,
improvements, fixtures and/or equipment which Tenant can substantiate to
Landlord have not been paid for with any Tenant improvement allowance
funds provided to Tenant by Landlord, provided Tenant repairs any damage to the
Premises and Building caused by such removal and returns the affected portion
of the Premises to a building standard tenant improved condition as determined
by Landlord. Furthermore, prior to the expiration or earlier termination of
this Lease, Tenant shall, at Tenant’s expense, remove any Alterations or
improvements in the Premises designated by Landlord and restore the same to
the condition existing prior to the installation of such Alteration (provided
such previous condition did not require any repair, in which event Tenant shall
restore the same to the condition existing as of the completion of the initial
Tenant Improvements), subject to the terms of Section 8.2, above. If Tenant
fails to complete such removal and/or to repair any damage caused by
the removal of any Alterations or improvements in the Premises, and return the
affected portion of the Premises to the condition required hereunder, as
reasonably determined by Landlord, Landlord may do so and may charge the
reasonable cost thereof to Tenant. Tenant hereby protects, defends,
indemnifies and holds Landlord harmless from any liability, cost,
obligation, expense or claim of lien in any manner relating to the
installation, placement, removal or financing of any such Alterations,
improvements, fixtures and/or equipment in, on or about the Premises placed
there by or on behalf of Tenant, which obligations of Tenant shall survive
the expiration or earlier termination of this Lease.





	 	 	 	 	 
	 

	 	 
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ARTICLE 9




COVENANT AGAINST LIENS




     Tenant shall keep the Project and Premises free from any liens or encumbrances
arising out of the work performed, materials furnished or obligations incurred
by or on behalf of Tenant, and shall protect, defend, indemnify and hold
Landlord harmless from and against any claims, liabilities, judgments or costs
(including, without limitation, reasonable attorneys’ fees and costs) arising
out of same or in connection therewith. Tenant shall give Landlord notice at least
ten (10) days prior to the commencement of any such work on the Premises (or
such additional time as may be necessary under applicable laws) to afford
Landlord the opportunity of posting and recording appropriate notices of
non-responsibility. Tenant shall remove any such lien or encumbrance by bond
or otherwise within ten (10) days after notice by Landlord, and if
Tenant shall fail to do so, Landlord may pay the amount necessary to remove
such lien or encumbrance, without being responsible for investigating the
validity thereof. The amount so paid shall be deemed Additional Rent under
this Lease payable upon demand, without limitation as to other remedies
available to Landlord under this Lease. Nothing contained in this Lease shall
authorize Tenant to do any act which shall subject Landlord’s title to the
Building or Premises to any liens or encumbrances whether claimed by operation
of law or express or implied contract. Any claim to a lien or encumbrance upon
the Building or Premises arising in connection with any such work or
respecting the Premises not performed by or at the request of Landlord shall be null
and void, or at Landlord’s option shall attach only against Tenant’s interest
in the Premises and shall in all respects be subordinate to Landlord’s title
to the Project, Building and Premises.



ARTICLE 10 




 INSURANCE




     10.1 Indemnification and Waiver.



          10.1.1 Tenant Indemnification and Waiver. Except to the extent caused by
the negligence or willful misconduct of Landlord or “Landlord Parties,” as that
term is defined hereinbelow, Tenant hereby assumes all risk of damage to
property or injury to persons in, upon or about the Premises from any cause
whatsoever and agrees that Landlord, its partners, subpartners and their
respective officers, agents, servants, employees, and
independent contractors (collectively, “Landlord Parties”) shall not be liable
for, and are hereby released from any responsibility for, any damage either to
person or property or resulting from the loss of use thereof, which damage is
sustained by Tenant or by other persons claiming through Tenant. Tenant shall
indemnify, defend, protect, and hold harmless the Landlord Parties from any and
all loss, cost, damage, expense and liability (including without limitation
court costs and reasonable attorneys’ fees) incurred in connection with or
arising from any cause in the Premises, any acts, omissions or negligence of
Tenant or of any person claiming by, through or under Tenant, or of the
contractors, agents, servants, employees, invitees, guests or licensees of Tenant or any
such person, in, on or about the Project or any breach of the terms of this
Lease, either prior to, during, or after the expiration of the Lease Term,
provided that the terms of the foregoing indemnity shall not apply to the
negligence or willful misconduct of Landlord or the Landlord Parties. Should
Landlord be named as a defendant in any suit brought against Tenant in connection
with or arising out of Tenant’s occupancy of the Premises, Tenant shall pay to
Landlord its costs and expenses incurred in such suit, including without
limitation, its actual and reasonable professional fees such as
appraisers’, accountants’ and attorneys’ fees. Further, Tenant’s agreement
to indemnify Landlord pursuant to this Section 10.1.1 is not intended and shall
not relieve any insurance carrier of its obligations under policies required to
be carried by Tenant pursuant to the provisions of this Lease, to the extent
such policies cover the matters subject to Tenant’s indemnification
obligations; nor shall they supersede any inconsistent agreement of the parties
set forth in any other provision of this Lease. The provisions of this Section 10.1.1
shall survive the expiration or sooner termination of this Lease with respect
to any claims or liability arising in connection with any event occurring prior
to such expiration or termination.




          10.1.2 Landlord Indemnification. Landlord agrees to indemnify Tenant
and hold it harmless from any and all loss, cost, damage, expense and liability
(including without limitation court costs,and reasonable attorneys’ fees)
incurred in connection with or arising from any loss, including, without
limitation, any loss by reason of injury to person or property, caused by
Landlord’s or its agents’ gross negligence or willful misconduct. In case any action, suit or




	 	 	 	 	 
	 

	 	 
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proceeding is brought against Tenant by reason of any such occurrence, Landlord, upon
Tenant’s request, will, at Landlord’s expense, resist and defend such action,
suit or proceeding, itself or through counsel designated by the applicable
insurer, or otherwise reasonably approved by Tenant. The obligations of
Landlord under this Section 10.1.2 shall survive the termination of this
Lease with respect to any claims or liability arising in connection with any event
occurring prior to such termination.




     10.2 Landlord’s Fire and Casualty Insurance. Landlord shall carry
commercial general liability insurance with respect to the Building during the
Lease Term, and shall further insure the Building during the Lease Term
against loss or damage due to fire and other casualties covered within the
classification of fire and extended coverage, vandalism coverage and malicious
mischief, sprinkler leakage, water damage and special extended coverage.
Such coverage shall be in such amounts, from such companies, and on such other
terms and conditions, as Landlord may from time to time reasonably determine.
Additionally, at the option of Landlord, such insurance coverage may include
the risks of earthquakes and/or flood damage and additional hazards, a rental
loss endorsement and one or more loss payee endorsements in favor of the
holders of any mortgages or deeds of trust encumbering the interest of Landlord
in the Building or the ground or underlying lessors of the Building, or any
portion thereof. Notwithstanding the foregoing provisions of this Section
10.2, the coverage and amounts of insurance carried by Landlord in connection
with the Building shall, at a minimum, be comparable to the coverage and
amounts of insurance which are carried by reasonably prudent landlords of
Comparable Buildings (provided that in no event shall Landlord be required to
carry earthquake insurance). Tenant shall, at Tenant’s expense, comply with
all insurance company requirements pertaining to the use of the Premises. If
Tenant’s conduct or use of the Premises causes any increase in the premium for
such insurance policies then Tenant shall reimburse Landlord within thirty
(30) days following Landlord’s request therefor (which request shall include
reasonable back-up documentation) for any such increase. Tenant, at Tenant’s
expense, shall comply with all rules, orders, regulations or requirements of
the American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.



     10.3 Tenant’s Insurance. Tenant shall maintain the following coverages in
the following amounts.


     10.3.1 Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage
(including loss of use thereof) arising out of Tenant’s operations, and
contractual liabilities (covering the performance by Tenant of its indemnity
agreements) including a Broad Form endorsement covering the
insuring provisions of this Lease and the performance by Tenant of the
indemnity agreements set forth in Section 10.1 of this Lease, for limits of
liability not less than:




	 	 
	Bodily Injury and

	 	 $5,000,000 each occurrence
	Property Damage Liability

	 	 $5,000,000 annual aggregate
	Personal Injury Liability

	 	 $5,000,000 each occurrence
	 

	 	 $5,000,000 annual aggregate
	 

	 	 0% Insured’s participation





     10.3.2 Physical Damage Insurance covering (i) all office furniture, business
and trade fixtures, office equipment, free-standing cabinet work, movable
partitions, merchandise and all other items of Tenant’s property on the
Premises installed by, for, or at the expense of Tenant, (ii) the “Tenant
Improvements,” as that term is defined in Section 2.1 of the Tenant Work
Letter, and any other improvements which exist in the Premises as of the
Lease Commencement Date (excluding the Base Building) (the “Original
Improvements”), and (iii) all other improvements, alterations and additions to
the Premises. Such insurance shall be written on an “all risks” of physical
loss or damage basis, for the full replacement cost value (subject to
reasonable deductible amounts) new without deduction for depreciation of
the covered items and in amounts that meet any co-insurance clauses of the
policies of insurance and shall include coverage for damage or other loss
caused by fire or other peril including, but not limited to, vandalism and
malicious mischief, theft, water damage of any type, including sprinkler
leakage, bursting or stoppage of pipes, and
explosion, and providing business interruption coverage for a period of
one year.




	 	 	 	 	 
	 

	 	 
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          10.3.3 Worker’s Compensation and Employer’s Liability or other
similar insurance pursuant to all applicable state and local statutes and
regulations.




          10.3.4 Business Interruption Insurance in the amount necessary to
insure payment of Tenant’s obligations to pay Rent hereunder for a period of
not less than twelve (12) months.




     10.4 Form of Policies. The minimum limits of policies of insurance required
of Tenant under this Lease shall in no event limit the liability of Tenant
under this Lease. Such insurance shall (i) name Landlord, and any other party
the Landlord reasonably specifies, in writing, as an additional insured,
including Landlord’s managing agent, if any; (ii) specifically cover the
liability assumed by Tenant under this Lease, including, but not limited to,
Tenant’s obligations under Section 10.1 of this Lease; (iii) be issued by an
insurance company having a rating of not less than A-X in Best’s Insurance
Guide or which is otherwise acceptable to Landlord and licensed to do business
in the State of California; (iv) be primary insurance as to all claims
thereunder and provide that any insurance carried by Landlord is excess and is
non-contributing with any insurance requirement of Tenant; (v) be in form and
content reasonably acceptable to Landlord; and (vi) provide that said insurance
shall not be canceled or coverage changed unless thirty (30) days’ prior
written notice shall have been given to Landlord and any mortgagee of Landlord.
Tenant shall deliver said policy or policies or, at Tenant’s
option, certificates (including endorsements) thereof to Landlord on or before
the Lease Commencement Date and at least thirty (30) days before the expiration
dates thereof. In the event Tenant shall fail to procure such insurance, or to
deliver such policies or certificate, Landlord may, at its option, within live
(5) days following written notice from Landlord to Tenant, procure
such policies for the account of Tenant, and the cost thereof shall be paid to
Landlord within five (5) days after delivery to Tenant of bills therefor.



     10.5 Subrogation. Landlord and Tenant intend that, notwithstanding any
other provision of this Lease to the contrary, their respective property loss
risks shall be borne by reasonable insurance carriers to the extent above
provided, and Landlord and Tenant hereby agree to look solely to, and seek
recovery only from, their respective insurance carriers in the event of a
property loss to the extent that such coverage is agreed to be provided
hereunder. Accordingly, notwithstanding any other provision of this Lease to
the contrary, the parties each hereby waive all rights and claims against each
other for such losses, and waive all rights of subrogation of their respective
insurers, provided such waiver of subrogation shall not affect the right of the
insured to recover thereunder. The parties agree that their respective
insurance policies are now, or shall be, endorsed such that the waiver of
subrogation shall not affect the right of the insured to recover thereunder, so
long as no material additional premium is charged therefor.



     10.6 Additional Insurance Obligations. Tenant shall carry and maintain during
the entire Lease Term, as the same may be extended, at Tenant’s sole cost and
expense, increased amounts of the insurance required to be carried by Tenant
pursuant to this Article 10 and such other reasonable types of insurance
coverage and in such reasonable amounts covering the Premises and Tenant’s
operations therein, as may be reasonably requested by Landlord, but in no event
shall such increased amounts of insurance or such other reasonable types of insurance be
in excess of that generally requested by landlords of Comparable Buildings.



ARTICLE
11





DAMAGE AND DESTRUCTION




     11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to
the Premises shall be damaged by fire or other casualty, Landlord shall
promptly and diligently, subject to reasonable delays for insurance adjustment
or other matter’s beyond Landlord’s reasonable control, and subject to
all other terms of this Article 11, restore the Base Building and such Common
Areas. Such restoration shall be to substantially the same condition of the
Base Building and the Common Areas prior to the casualty, except for
modifications required by zoning and building codes and other laws or by the
holder of a mortgage on the Building or Project or any other modifications to
the Common Areas deemed desirable by Landlord, provided that access to the Premises
and any common restrooms serving the Premises shall not be materially
impaired. Upon the




	 	 	 	 	 
	 

	 	 
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occurrence of any damage to the Premises, upon notice (the “Landlord Repair Notice”) to
Tenant from Landlord, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable to Tenant under Tenant’s insurance
required under Section 10.3.2 (ii) and (iii) of this Lease, and Landlord shall
repair any injury or damage to the Tenant Improvements, the Original
Improvements installed in the Premises all other improvements, alterations and
additions to the Premises and shall return such Tenant Improvements,
Original Improvements and all other improvements, alterations and additions to
the Premises to their original condition; provided that if the cost of such
repair by Landlord exceeds the amount of insurance proceeds received by
Landlord from Tenant’s insurance carrier, as assigned by Tenant, the cost of
such repairs shall be paid by Tenant to Landlord prior to Landlord’s
commencement of repair of the damage, or as soon as such additional costs are
known. In the event that Landlord does not deliver the Landlord Repair Notice
within sixty (60) days following the date the casualty becomes known to
Landlord, Tenant shall, at its sole cost and expense, repair any injury or
damage to the Tenant Improvements and the Original Improvements installed in
the Premises and shall return such Tenant Improvements and Original
Improvements to their original condition. Whether or not Landlord delivers a
Landlord Repair Notice, prior to the commencement of construction, Tenant
shall, upon receipt of written request from Landlord, submit to Landlord, for
Landlord’s review and approval, all plans, specifications and working drawings
relating thereto, and Landlord shall select the contractors to perform such
improvement work. Landlord shall not be liable for any inconvenience or
annoyance to Tenant or its visitors, or injury to Tenant’s business resulting
in any way from such damage or the repair thereof; provided however, that if
such fire or other casualty shall have damaged the Premises or Common Areas
necessary to Tenant’s occupancy, Landlord shall allow Tenant an
equitable, proportionate abatement of Rent to the extent Landlord is
reimbursed from the proceeds of rental interruption insurance purchased by
Landlord as part of Operating Expenses, during the time and to the extent the
Premises are unfit for occupancy for the purposes permitted under this
Lease, and not occupied by Tenant as a result thereof; provided, further,
however, that to the extent the damage or destruction is due to the negligence
or wilful misconduct of Tenant or any of its agents, employees or contractors,
Tenant shall be responsible for any reasonable, applicable insurance
deductible (which shall be payable to Landlord upon demand). In the event
that Landlord shall not deliver the Landlord Repair Notice, Tenant’s right to
rent abatement pursuant to the preceding sentence shall terminate as of the
date which is reasonably determined by Landlord to be the date Tenant should
have completed repairs to the Premises assuming Tenant used reasonable due
diligence in connection therewith.




     11.2 Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1 of
this Lease, Landlord may elect not to rebuild and/or restore the Premises,
Building and/or Project, and instead terminate this Lease, by notifying Tenant
in writing of such termination within sixty (60) days after the date of damage,
such notice to include a termination date giving Tenant sixty (60) days to
vacate the Premises, but Landlord may so elect only if the Building or Project
shall be damaged by fire or other casualty or cause, whether or not the
Premises are affected, and one or more of the following conditions is present:
(i) in Landlord’s reasonable judgment, repairs cannot reasonably be completed
within one hundred twenty (120) days after the date of discovery of the damage
(when such repairs are made without the payment of overtime or other premiums);
(ii) the holder of any mortgage on the Building or Project or ground lessor
with respect to the Building or Project shall require that the insurance
proceeds or any portion thereof be used to retire the mortgage debt, or shall
terminate the ground lease, as the case may be, and Landlord elects to
terminate the leases of all other tenants of the Project similarly affected by
the damage and destruction; (iii) the damage is not fully covered by Landlord’s
insurance policies or the coverage which would have been afforded had Landlord
maintained the insurance required under this Lease, and Landlord elects to
terminate the leases of all other tenants of the Project similarly affected by
the damage and destruction; or (iv) Landlord decides to rebuild the Building or
Common Areas so that they will be substantially different structurally
or architecturally or (v) the damage occurs during the last eighteen (18)
months of the Lease Term. If Landlord does not elect to terminate this Lease
pursuant to Landlord’s termination right as provided above, and the repairs
cannot, in the reasonable opinion of Landlord, be completed within one hundred
eighty days (180) days after being commenced (which one hundred eighty days
(180) day period shall be subject to execution as a result of any “Force Majeure” as
that term is defined in Section 29.16, below), Tenant may elect, within thirty
(30) days after the date of Landlord’s notice, to terminate this Lease by
written notice to Landlord effective as of the date specified in the notice,
which date shall not be less than thirty (30) days nor more than sixty (60)
days after the date such notice is given by Tenant. Furthermore, if neither Landlord nor




	 	 	 	 	 
	 

	 	 
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Tenant has terminated this Lease, and the repairs to be made by Landlord are not
actually completed within two hundred forty (240) day period (which period
may be extended up to ninety (90) days for an event of Force Majeure), then
Tenant shall have the right to terminate this Lease during the first five (5)
business days of each calendar month following the end of such period until
such time as the repairs to be made by Landlord are complete, by notice to
Landlord (the “Damage Termination Notice”), effective as of a date set forth
in the Damage Termination Notice (the “Damage Termination Date”), which
Damage Termination Date shall not be less than ten (10) business days
following the end of each such month. Notwithstanding the foregoing,
if Tenant delivers a Damage Termination Notice to Landlord, then Landlord
shall have the right to suspend the occurrence of the Damage Termination Date
for a period ending thirty (30) days after the Damage Termination Date set
forth in the Damage Termination Notice by delivering to Tenant, within five
(5) business days of Landlord’s receipt of the Damage Termination Notice,
a certificate of Landlord’s contractor responsible for the repair of the
damage certifying that it is such contractor’s good faith judgment that the
repairs to be made by Landlord shall be substantially completed within thirty
(30) days after the Damage Termination Date. If such repairs shall be
substantially completed prior to the expiration of such thirty-day period, then
the Damage Termination Notice shall be of no force or effect, but if such
repairs shall not be substantially completed within such thirty-day period,
then this Lease shall terminate upon the expiration of such thirty-day
period.




     11.3 Waiver of Statutory Provisions. The provisions of this Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all or any part of
the Premises, the Building or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights
or obligations concerning damage or destruction in the absence of an express
agreement between the parties, and any other statute or regulation, now or
hereafter in effect, shall have no application to this Lease or any damage or
destruction to all or any part of the Premises, the Building or the Project.



ARTICLE 12




NONWAIVER




     No provision of this Lease shall be deemed waived by either party hereto
unless expressly waived in a writing signed thereby. The waiver by either
party hereto of any breach of any term, covenant or condition herein
contained shall not be deemed to be a waiver of any subsequent breach of same
or any other term, covenant or condition herein contained. The subsequent
acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of
any preceding breach by Tenant of any term, covenant or condition of this
Lease, other than the failure of Tenant to pay the particular Rent so
accepted, regardless of Landlord’s knowledge of such preceding breach at the
time of acceptance of such Rent. No acceptance of a lesser amount than the
Rent herein stipulated shall be deemed a waiver of Landlord’s right to receive the
full amount due, nor shall any endorsement or statement on any check or
payment or any letter accompanying such check or payment be deemed an accord
and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord’s right to recover the full amount due. No receipt of
monies by Landlord from Tenant after the termination of this Lease shall
in any way alter the length of the Lease Term or of Tenant’s right of
possession hereunder, or after the giving of any notice shall reinstate,
continue or extend the Lease Term or affect any notice given Tenant prior to
the receipt of such monies, it being agreed that after the service of notice
or the commencement of a suit, or after final judgment for possession of the
Premises, Landlord may receive and collect any Rent due, and the payment of
said Rent shall not waive or affect said notice, suit or judgment.



ARTICLE 13




 CONDEMNATION




     If the whole or any part of the Premises, Building or Project shall be taken by power
of eminent domain or condemned by any competent authority for any public or
quasi-public use or purpose, or if any adjacent property or street shall be so
taken or condemned, or reconfigured or vacated by such authority in such
manner as to require the use, reconstruction or remodeling of any part of the
Premises, Building or Project, or if Landlord shall grant a deed or other



	 	 	 	 	 
	 

	 	 
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instrument in lieu of such taking by eminent domain or condemnation, Landlord shall have
the option to terminate this Lease effective as of the date possession is
required to be surrendered to the authority. If more than twenty-five percent
(25%) of the rentable square feet of the Premises is taken, or if access to
the Premises is substantially impaired, in each case for a period in
excess of one hundred eighty (180) days, Tenant shall have the option to
terminate this Lease effective as of the date possession is required to be
surrendered to the authority. Tenant shall not because of such taking assert
any claim against Landlord or the authority for any compensation because of
such talcing and Landlord shall be entitled to the entire award or payment in
connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for any taking of Tenant’s personal
property and fixtures belonging to Tenant and removable by Tenant upon
expiration of the Lease Term pursuant to the terms of this Lease, and for
moving expenses, so long as such claims do not diminish the award available
to Landlord, its ground lessor with respect to the Building or Project or its
mortgagee, and such claim is payable separately to Tenant. All Rent shall be
apportioned as of the date of such termination. If any part of the Premises
shall be taken, and this Lease shall not be so terminated, the Rent shall
be proportionately abated. Tenant hereby waives any and all rights it might
otherwise have pursuant to Section 1265.130 of The California Code of Civil
Procedure. Notwithstanding anything to the contrary contained in this Article
13, in the event of a temporary taking of all or any portion of the Premises
for a period of one hundred and eighty (180) days or less, then this Lease
shall not terminate but the Base Rent and the Additional Rent shall be abated for
the period of such taking in proportion to the ratio that the amount of
rentable square feet of the Premises taken bears to the total rentable square
feet of the Premises. Landlord shall be entitled to receive the entire award
made in connection with any such temporary taking.




ARTICLE 14




ASSIGNMENT AND SUBLETTING




     14.1 Transfers. Tenant shall not, without the prior written consent of
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien
to attach to, or otherwise transfer, this Lease or any interest hereunder,
permit any assignment, or other transfer of this Lease or any interest
hereunder by operation of law, sublet the Premises or any part thereof,
or enter into any license or concession agreements or otherwise permit the
occupancy or use of the Premises or any part thereof by any persons other than
Tenant and its employees and contractors (all of the foregoing are hereinafter
sometimes referred to collectively as “Transfers” and any person to whom any
Transfer is made or sought to be made is hereinafter sometimes referred to as a
“Transferee”). If Tenant desires Landlord’s consent to any Transfer, Tenant shall
notify Landlord in writing, which notice (the “Transfer Notice”) shall include
(i) the proposed effective date of the Transfer, which shall not be less than
twenty (20) days nor more than one hundred eighty (180) days after the date of
delivery of the Transfer Notice, (ii) a description of the portion of the
Premises to be transferred (the “Subject Space”), (iii) all of the terms of
the proposed Transfer and the consideration therefor, including calculation of
the “Transfer Premium”, as that term is defined in Section 14.3 below, in
connection with such Transfer, the name and address of the proposed Transferee,
and a copy of all existing executed and/or proposed documentation pertaining to
the proposed Transfer, including all existing operative documents to be
executed to evidence such Transfer or the agreements incidental or related
to such Transfer, (iv) current financial statements of the proposed Transferee
certified by an officer, partner or owner thereof, business credit and personal
references and history of the proposed Transferee and any other information
reasonably required by Landlord (provided such information is requested by
Landlord within ten (10) days following Tenant’s submission to Landlord of the
Transfer Notice) which will enable Landlord to determine the
financial responsibility, character, and reputation of the proposed Transferee,
nature of such Transferee’s business and proposed use of the Subject Space, and
(v) an executed estoppel certificate from Tenant in the form attached hereto as
Exhibit E (which estoppel certificate shall be modified, as appropriate, to
contain accurate information). Landlord shall approve or disapprove of
the proposed transfer within twenty (20) days following Landlord’s receipt of
the applicable Transfer Notice and all documents requested by Landlord pursuant
to this Section 14.1 (the “Review Period”). In the event Landlord fails to
respond to any request for consent to a Transfer within the Review Period, then
Tenant shall have the right to provide Landlord with a second (2nd)
request for consent (the “Second Request”). The Second Request shall specify the terms
of the first request, and specifically state that Landlord’s failure to respond
within ten (10) days following Landlord’s receipt of the Second Request shall
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proposed Transfer. In the event Landlord fails to respond to Tenant’s Second Request with
ten (10) days following Landlord’s receipt of the Second Request, the
Proposed Transfer shall be deemed to have been approved by Landlord. Any
Transfer made without Landlord’s prior written consent shall, at Landlord’s
option, be null, void and of no effect, and shall, at Landlord’s option,
constitute a default by Tenant under this Lease. Whether or not Landlord consents to
any proposed Transfer, Tenant shall pay Landlord’s commercially reasonable
review and processing fees, as well as any reasonable professional fees
(including, without limitation, attorneys’, accountants’, architects’,
engineers’ and consultants’ fees) incurred by Landlord, within thirty
(30) days after written request by Landlord.




     14.2 Landlord’s Consent. Landlord shall not unreasonably withhold its consent
to any proposed Transfer of the Subject Space to the Transferee on the terms
specified in the Transfer Notice. In the event Landlord withholds its consent
to the proposed Transfer, in its notice to Tenant, Landlord shall set forth
in reasonable detail the basis for its determination. Without limitation as
to other reasonable grounds for withholding consent, the parties hereby agree
that it shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the
following apply:



          14.2.1 The Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Building or the
Project;




          14.2.2 The Transferee intends to use the Subject Space for purposes which
are not permitted under this Lease;




          14.2.3 The Transferee is either a governmental agency or instrumentality thereof;




          14.2.4 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities to be undertaken in
connection with the Transfer
on the date consent is requested;




          14.2.5 The proposed Transfer would cause a violation of another lease for
space in the Project, or would give an occupant of the Project a right to
cancel its lease;




          14.2.6 The terms of the proposed Transfer will allow the Transferee to exercise a
right of renewal, right of expansion, right of first offer, or other similar
right held by Tenant (or will allow the Transferee to occupy space leased by
Tenant pursuant to any such right); or




          14.2.7 Either the proposed Transferee, or any person or entity which directly
or indirectly, controls, is controlled by, or is under common control with, the
proposed Transferee, is negotiating or has negotiated within the past three (3)
months with Landlord to lease space in the Project, provided that Landlord has
space in the Project reasonably consistent with the Transferee’s rentable area
requirements.




          14.2.8 The Transferee does not intend to occupy the Subject Space and
conduct its business therefrom for a substantial portion of the term of the
Transfer.




     If Landlord consents (or is deemed to have consented) to any Transfer pursuant to
the terms of this Section 14.2 (and does not exercise any recapture rights
Landlord may have under Section 14.4 of this Lease), Tenant may within six
(6) months after Landlord’s consent, but not later than the expiration of
said six-month period, enter into such Transfer of the Premises or portion
thereof, upon substantially the same terms and conditions as are set forth in the
Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 of
this Lease. Notwithstanding anything to the contrary in this Lease, if Tenant
or any proposed Transferee claims that Landlord has unreasonably withheld or
delayed its consent under Section 14.2 or otherwise has breached or acted
unreasonably under this Article 14, their sole remedies shall be a declaratory
judgment and an injunction for the relief sought without any monetary
damages, and Tenant hereby waives all other remedies, including, without
limitation, any right at law or equity to terminate this Lease, on its own
behalf and, to the extent permitted under all applicable laws, on behalf of
the proposed Transferee.



     14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any “Transfer Premium,” as that term is
defined in this Section 14.3, received by Tenant from such Transferee;
provided, however, that Tenant shall not be required to pay to Landlord any




	 	 	 	 	 
	 

	 	 
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Transfer Premium until such time as Tenant has recovered all applicable “Subleasing Costs,”
as that term is defined hereinbelow. “Transfer Premium” shall mean all rent,
additional rent or other consideration payable by such Transferee in
connection with the Transfer in excess of the Rent and Additional Rent
payable by Tenant under this Lease during the term of the Transfer on a per
rentable square foot basis if less than all of the Premises is transferred, after deducting
the reasonable expenses incurred by Tenant for (i) any changes, alterations
and improvements to the Premises in connection with the Transfer, (ii) any
commercially reasonable brokerage commissions in connection with the
Transfer, (iii) reasonable legal fees in connection with the Transfer, and
(iv) reasonable out-of-pocket costs of advertising the Subject Space related to
the Transfer (items (i), (ii), (iii) and (iv) collectively referred to herein
as the “Subleasing Costs”). “Transfer Premium” shall also include, but not be
limited to, key money, bonus money or other cash consideration paid by
Transferee to Tenant in connection with such Transfer, and any payment in
excess of fair market value for services rendered by Tenant to Transferee or
for assets, fixtures, inventory, equipment, or furniture transferred by
Tenant to Transferee in connection with such Transfer. In the calculations of
the Rent (as it relates to the Transfer Premium calculated under this
Section 14.3), the Rent paid during each annual period for
the Subject Space, shall be computed after adjusting such rent to the actual
effective rent to be paid, taking into consideration any and all leasehold
concessions granted in connection therewith, including, but not limited to,
any rent credit and tenant improvement allowance.




     14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to
the contrary contained in this Article 14, and except as set forth in Section
14.8, below, with respect to a Transfer (i) for not less than twenty-five
percent (25%) of the Premises, and/or (ii) for the entire remaining Lease Term,
Landlord shall have the option, by giving written notice to Tenant within
twenty (20) days after receipt of any Transfer Notice, to recapture the Subject
Space. Such recapture notice shall cancel and terminate this Lease with respect
to the Subject Space as of the date stated in the Transfer Notice as the
effective date of the proposed Transfer until the last day of the term of the
Transfer as set forth in the Transfer Notice (or at Landlord’s option, shall
cause the Transfer to be made to Landlord or its agent, in which case the parties
shall execute the Transfer documentation promptly thereafter). In the event
of a recapture by Landlord, if this Lease shall be canceled with respect to
less than the entire Premises, the Rent reserved herein shall be prorated on
the basis of the number of rentable square feet retained by Tenant in
proportion to the number of rentable square feet contained in the Premises, and
this Lease as so amended shall continue thereafter in full force and effect,
and upon request of either party, the parties shall execute written
confirmation of the same. If Landlord declines, or fails to elect in a timely
manner to recapture the Subject Space under this Section 14.4, then,
provided Landlord has consented to the proposed Transfer, Tenant shall be
entitled to proceed to transfer the Subject Space to the proposed Transferee,
subject to provisions of this Article 14.



     14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms
and conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord’s request a complete statement, certified by
an independent certified public accountant, or Tenant’s chief financial
officer, setting forth in detail the computation of any Transfer Premium Tenant
has derived and shall derive from such Transfer, and (v) no Transfer relating
to this Lease or agreement entered into with respect thereto, whether with
or without Landlord’s consent, shall relieve Tenant or any guarantor of the
Lease from any liability under this Lease, including, without limitation, in
connection with the Subject Space. Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof. If the Transfer Premium respecting any Transfer shall be
found understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than two percent (2%), Tenant shall pay
Landlord’s reasonable costs of such audit.



     14.6 Additional Transfers. Except as set forth in Section 14.8, below, for purposes
of this Lease, the term “Transfer” shall also include (i) if Tenant is a
partnership, the withdrawal or change, voluntary, involuntary or by operation
of law, of fifty percent (50%) or more of the partners, or transfer of fifty
percent (50%) or more of partnership interests, within a twelve (12)- month
period, or the dissolution of the partnership without immediate reconstitution thereof,
and (ii) if Tenant is a closely held corporation (i.e., whose stock is not
publicly held and not traded through an exchange or over the counter), (A) the
dissolution, merger, consolidation or other




	 	 	 	 	 
	 

	 	 
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reorganization of Tenant or (B) the sale or other transfer of an aggregate of fifty percent
(50%) or more of the voting shares of Tenant (other than to immediate family
members by reason of gift or death), within a twelve (12)-month period, or
(C) the sale, mortgage, hypothecation or pledge of an aggregate of fifty
percent (50%) or more of the value of the unencumbered assets of Tenant
within a twelve (12)-month period.




     14.7 Occurrence of Default. Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, Landlord shall have the right to: (i) treat
such Transfer as cancelled and repossess the Subject Space by any lawful means,
or (ii) require that such Transferee attorn to and recognize Landlord as its
landlord under any such Transfer. If Tenant shall be in default under this
Lease, Landlord is hereby irrevocably authorized, as Tenant’s agent and
attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant’s obligations under this Lease) until such default is cured.
Such Transferee shall rely on any representation by Landlord that Tenant is in
default hereunder, without any need for confirmation thereof by Tenant. Upon
any assignment, the assignee shall assume in writing all obligations and
covenants of Tenant thereafter to be performed or observed under this Lease. No
collection or acceptance of rent by Landlord from any Transferee shall be
deemed a waiver of any provision of this Article 14 or the approval of any
Transferee or a release of Tenant from any obligation under this Lease, whether
theretofore or thereafter accruing. In no event shall Landlord’s enforcement
of any provision of this Lease against any Transferee be deemed a waiver of
Landlord’s right to enforce any term of this Lease against Tenant or any other
person. If Tenant’s obligations hereunder have been guaranteed, Landlord’s
consent to any Transfer shall not be effective unless the guarantor also consents
to such Transfer.



     14.8 Non-Transfers. Notwithstanding anything to the contrary contained in
this Article 14, neither (i) an assignment to an entity which acquires all or
substantially all of the stock or assets of Tenant, (ii) an assignment of the
Premises to a transferee which is the resulting entity of a merger or
consolidation of Tenant with another entity, nor (iii) an assignment
or subletting of all or a portion of the Premises to an affiliate of Tenant (an
entity which is controlled by, controls, or is under common control with,
Tenant) (collectively, “Affiliates”), shall be deemed a Transfer under this
Article 14, provided that Tenant notifies Landlord of any such assignment or
sublease and promptly supplies Landlord with any documents or
information reasonably requested by Landlord regarding such assignment or
sublease or such Affiliate (excluding any documentation regarding the economic
terms of the merger or sale transaction, but including documentation regarding
the assignment or subletting), and further provided that such assignment or
sublease is not a subterfuge by Tenant to avoid its obligations under
this Lease. “Control,” as used in this Section 14.8, shall mean the
ownership, directly or indirectly, of at least fifty-one percent (51%) of the
voting securities of, or possession of the right to vote, in the ordinary
direction of its affairs, of at least fifty-one percent (51%) of the voting interest
in, any person or entity.



ARTICLE 15




SURRENDER OF PREMISES; OWNERSHIP AND 
 REMOVAL OF TRADE FIXTURES




     15.1
Surrender of Premises. No act or thing done by Landlord or any agent
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord. The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute
a surrender of the Premises or effect a termination of this Lease, whether or
not the keys are thereafter retained by Landlord, and notwithstanding such
delivery Tenant shall be entitled to the return of such keys at any reasonable
time upon request until this Lease shall have been properly terminated. The
voluntary or other surrender of this Lease by Tenant, whether accepted by
Landlord or not, or a mutual termination hereof, shall not work a merger, and
at the option of Landlord shall operate as an assignment to Landlord of all
subleases or subtenancies affecting the Premises or terminate any or all such
sublessees or subtenancies.



     15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
Lease Term, or upon any earlier termination of this Lease, Tenant shall,
subject to the provisions of this Article 15, quit and surrender possession of
the Premises to Landlord in as good order and




	 	 	 	 	 
	 

	 	 
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condition as when Tenant took possession and as thereafter improved by Landlord
and/or Tenant, reasonable wear and tear, damage from a casualty which is
Landlord’s obligation to repair under Article 11 of this Lease, and repairs
which are specifically made the responsibility of Landlord hereunder excepted.
Upon such expiration or termination, Tenant shall, without expense to Landlord,
remove or cause to be removed from the Premises all debris and rubbish, and
such items of furniture, equipment, business and trade fixtures, free-standing cabinet
work, movable partitions and other articles of personal property owned by
Tenant or installed or placed by Tenant at its expense in the Premises (the
“Tenant Personal Property”), and such similar articles of any other persons
claiming under Tenant, as Landlord may, in its sole discretion, require to be
removed, and Tenant shall repair at its own expense all damage to the Premises
and Building resulting from such removal. Landlord shall have the right, at
Tenant’s sole cost and expense, to dispose of any Tenant Personal Property
remaining in the Premises after the expiration or earlier termination of this
Lease in any manner Landlord sees fit.




	 	 	 	 	 
	 

	 	 
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ARTICLE 16




 HOLDING OVER




     If Tenant holds over after the expiration of the Lease Term or earlier termination
thereof, with or without the express or implied consent of Landlord, such
tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Rent
shall be payable at a monthly rate equal to one hundred fifty percent (150%)
of the Rent applicable during the last rental period of the Lease Term under
this Lease for the first two (2) months following the expiration or earlier
termination of this Lease, and two hundred percent (200%) thereafter. Such
month-to-month tenancy shall be subject to every other applicable term,
covenant and agreement contained herein. Nothing contained in this Article
16 shall be construed as consent by Landlord to any holding over by Tenant,
and Landlord expressly reserves the right to require Tenant to surrender
possession of the Premises to Landlord as provided in this Lease upon the
expiration or other termination of this Lease. The provisions of this
Article 16 shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Landlord provided herein or at law. If Tenant fails to surrender
the Premises upon the termination or expiration of this Lease, in addition to
any other liabilities to Landlord accruing therefrom, Tenant shall protect,
defend, indemnify and hold Landlord harmless from all loss, costs (including
reasonable attorneys’ fees) and liability resulting from such failure,
including, without limiting the generality of the foregoing, any claims made
by any succeeding tenant founded upon such failure to surrender and any lost
profits to Landlord resulting therefrom.



ARTICLE 17 




 ESTOPPEL CERTIFICATES




     Within five (5) business days following a request in writing by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord an estoppel certificate,
which, as submitted by Landlord, shall be substantially in the form
of Exhibit E, attached hereto (or such other form as may be required by any prospective
mortgagee or purchaser of the Project, or any portion thereof), indicating
therein any exceptions thereto that may exist at that time, and shall
also contain any other information reasonably requested by Landlord or
Landlord’s mortgagee or prospective mortgagee. Any such certificate may be
relied upon by any prospective mortgagee or purchaser of all or any portion of
the Project. Tenant shall execute and deliver whatever other instruments may
be reasonably required for such purposes. At any time during the Lease
Term (but no more than once per a calendar year), Landlord may require Tenant
to provide Landlord with a current financial statement and financial
statements of the two (2) years prior to the current financial statement year.
Such statements shall be prepared in accordance with generally accepted
accounting principles and, if such is the normal practice of Tenant, shall be audited
by an independent certified public accountant. Failure of Tenant to timely
execute, acknowledge and deliver such estoppel certificate or other
instruments shall constitute an acceptance of the Premises and an
acknowledgment by Tenant that statements included in the estoppel
certificate are true and correct, without exception. In connection with an
assignment of the Lease by Tenant pursuant to Section 14.8, above, Landlord
hereby agrees to provide to Tenant an estoppel certificate signed by Landlord,
containing the same types of information, and within the same time periods set
forth above, with such changes to the Estoppel certificate as are
reasonably necessary to reflect that the estoppel certificate is being given
by Landlord to Tenant rather than from Tenant to Landlord or a lender.



ARTICLE 18 




SUBORDINATION




     This Lease shall be subject and subordinate to all present and future ground or
underlying leases of the Building or Project and to the lien of any mortgage,
trust deed or other encumbrances now or hereafter in force against the
Building or Project or any part thereof, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or trust
deeds, unless the holders of such mortgages, trust deeds or other
encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto. In consideration of,
and as a condition precedent to, Tenant’s agreement to permit its
interest pursuant to this Lease to be subordinated to any particular future
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the Building or the Project or to the lien of any mortgage or trust deed, first encumbering
the Building or the Project following the date hereof, and to any renewals,
extensions, modifications, consolidations and replacements thereof, Landlord
shall deliver to Tenant a commercially reasonable non-disturbance agreement
executed by the landlord under such ground lease or underlying lease or the
holder of such mortgage or trust deed, as appropriate. Tenant covenants and
agrees in the event any proceedings are brought for the foreclosure of any such mortgage
or deed in lieu thereof (or if any ground lease is terminated), to attorn,
without any deductions or set-offs whatsoever, to the lienholder or purchaser
or any successors thereto upon any such foreclosure sale or deed in lieu
thereof (or to the ground lessor), if so requested to do so by such purchaser
or lienholder or ground lessor, and to recognize such purchaser or lienholder or
ground lessor as the lessor under this Lease, provided such lienholder or
purchaser or ground lessor shall agree to accept this Lease and not disturb
Tenant’s occupancy, so long as Tenant timely pays the rent and observes and
performs the terms, covenants and conditions of this Lease to be observed and
performed by Tenant. Landlord’s interest herein may be assigned as security at any time
to any lienholder. Tenant shall, within ten (10) business days of request by
Landlord, execute such further instruments or assurances as Landlord may
reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases or
underlying leases. Tenant waives the provisions of any current or future statute, rule
or law which may give or purport to give Tenant any right or election to
terminate or otherwise adversely affect this Lease and the obligations of the
Tenant hereunder in the event of any foreclosure proceeding or sale. Tenant
shall, within five (5) business days of request by Landlord from time to time,
(i) execute a commercially reasonable Nondisturbance and Attornment Agreement
in the form reasonably approved by Landlord’s mortgagee in favor of
any mortgagee of the Building or Project, and (ii) execute any other
commercially reasonable form of nondisturbance and attornment agreement (or
subordination, nondisturbance and attornment agreement, or subordination of
the applicable mortgagee’s lien) reasonably required by any mortgagee of the
Building or Project which provides comparable nondisturbance protection
to Tenant in the event of a foreclosure. Following the full execution and
delivery of this Lease, Landlord shall use commercially reasonable efforts to
obtain from the holder of the deed of trust encumbering the property as of the
date hereof (the “Lender”), a commercially reasonable subordination,
non-disturbance and attornment agreement in favor of Tenant.




ARTICLE 19




DEFAULTS; REMEDIES




     19.1 Events of Default. The occurrence of any of the following shall
constitute a default of this Lease by Tenant:



          19.1.1 Any failure by Tenant to pay any Rent or any other charge required to
be paid under this Lease, or any part thereof, when due unless such failure is
cured within three (3) business days after written notice that the same was
not paid when due; or




          19.1.2 Except where a specific time period is otherwise set forth for
Tenant’s performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this Section
19.1.2, any failure by Tenant to observe or perform any other provision,
covenant or condition of this Lease to be observed or performed by Tenant
where such failure continues for thirty (30) days after written notice thereof
from Landlord to Tenant; provided that if the nature of such default is such
that the same cannot reasonably be cured within a thirty (30) day period,
Tenant shall not be deemed to be in default if it diligently commences such
cure within such period and thereafter diligently proceeds to rectify and cure
such default, but in no event exceeding a period of time in excess of thirty (30)
days after written notice thereof from Landlord to Tenant; or




          19.1.3 To the extent permitted by law, a general assignment by Tenant or
any guarantor of the Lease for the benefit of creditors, or the taking of any
corporate action in furtherance of bankruptcy or dissolution whether or not
there exists any proceeding under an insolvency or bankruptcy law, or the
filing by or against Tenant or any guarantor of any proceeding under an
insolvency or bankruptcy law, unless in the case of a proceeding filed against
Tenant or any guarantor the same is dismissed within sixty (60) days, or the
appointment of a trustee or receiver to take possession of all or
substantially all of the assets of Tenant or any guarantor, unless possession
is restored to Tenant or such guarantor within thirty (30) days, or any
execution or other judicially authorized seizure of all or substantially all of Tenant’s assets




	 	 	 	 	 
	 

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located upon the Premises or of Tenant’s interest in this Lease, unless such seizure is
discharged within thirty (30) days; or




          19.1.4 Abandonment or vacation of all or a substantial portion of the Premises by Tenant; or




          19.1.5 The failure by Tenant to observe or perform according to the provisions
of Articles 5, 17 or 18 of this Lease where such failure continues for more
than five (5) business days after notice from Landlord.




     The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law.



     19.2 Remedies Upon Default. Upon the occurrence of any event of default
by Tenant, Landlord shall have, in addition to any other remedies available
to Landlord at law or in equity (all of which remedies shall be distinct,
separate and cumulative), the option to pursue any one or more of the
following remedies, each and all of which shall be cumulative and
nonexclusive, without any notice or demand whatsoever.



          19.2.1 Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord
may, without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel
or remove Tenant and any other person who may be occupying the Premises or any
part thereof, without being liable for prosecution or any claim or damages
therefor; and Landlord may recover from Tenant the following:




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



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



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



               (iv) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant’s failure to perform its
obligations under this Lease or which in the ordinary course of things would
be likely to result therefrom, specifically including but not limited to,
brokerage commissions and advertising expenses incurred, expenses
of remodeling the Premises or any portion thereof for a new tenant, whether
for the same or a different use, and any special concessions made to obtain a
new tenant; and



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


The term “rent” as used in this Section 19.2 shall be deemed to be and to mean all sums of
every nature required to be paid by Tenant pursuant to the terms of this
Lease, whether to Landlord or to others. As used in Paragraphs 19.2.1(i) and
(ii), above, the “worth at the time of award” shall be computed by allowing
interest at the rate set forth in Article 25 of this Lease, but in no
case greater than the maximum amount of such interest permitted by law. As
used in Paragraph 19.2.1(iii) above, the “worth at the time of award” shall be
computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).




          19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee’s
breach and abandonment and recover rent as it becomes due, if lessee has the
right to sublet or assign, subject only to reasonable limitations).
Accordingly, if Landlord does not elect to terminate this Lease on account of
any default by Tenant, Landlord may, from time to time, without terminating
this Lease, enforce all of its rights and remedies under this Lease,
including the right to recover all rent as it becomes due.




	 	 	 	 	 
	 

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          19.2.3 Landlord shall at all times have the rights and remedies (which shall
be cumulative with each other and cumulative and in addition to those rights
and remedies available under Sections 19.2.1 and 19.2.2, above, or any law or
other provision of this Lease), without prior demand or notice except as
required by applicable law, to seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease, or restrain or enjoin a violation
or breach of any provision hereof.




     19.3 Subleases of Tenant. Whether or not Landlord elects to terminate this Lease
on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises within ten (10) days of notice from Landlord,
or may, in Landlord’s sole discretion, succeed to Tenant’s interest in such
subleases, licenses, concessions or arrangements. In the event of Landlord’s
election to succeed to Tenant’s interest in any such subleases, licenses,
concessions or arrangements, Tenant shall, as of the date of notice by Landlord
of such election, have no further right to or interest in the rent or
other consideration receivable thereunder.



     19.4 Form of Payment After Default. Following the occurrence of an event
of default by Tenant, Landlord shall have the right to require that any or all
subsequent amounts paid by Tenant to Landlord hereunder, whether to cure the
default in question or otherwise, be paid in the form of money order, cashier’s
or certified check drawn on an institution acceptable to Landlord, or by other
means reasonably approved by Landlord, notwithstanding any prior practice of
accepting payments in any different form.



     19.5 Efforts to Relet. No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord’s interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant’s right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of
Tenant’s obligations hereunder, unless express written notice of such intention
is sent by Landlord to Tenant. Tenant hereby irrevocably waives any right
otherwise available under any law to redeem or reinstate this Lease.



	 	 	 	 	 
	 

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ARTICLE 20 




 COVENANT OF QUIET ENJOYMENT




     Landlord covenants that Tenant, on paying the Rent, charges for services and
other payments herein reserved and on keeping, observing and performing all
the other terms, covenants, conditions, provisions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Lease Term, peaceably and quietly have, hold and enjoy the
Premises subject to the terms, covenants, conditions, provisions and
agreements hereof without interference by any persons lawfully claiming by or
through Landlord. The foregoing covenant is in lieu of any other covenant
express or implied.



ARTICLE 21 




 SECURITY DEPOSIT




     Concurrent with Tenant’s execution of this Lease, Tenant shall deposit with Landlord
a security deposit (the “Security Deposit”) in the amount set forth in Section
8 of the Summary, as security for the faithful performance by Tenant of all of
its obligations under this Lease. If Tenant defaults with respect to any
provisions of this Lease, including, but not limited to, the provisions
relating to the payment of Rent, the removal of property and the repair of
resultant damage, Landlord may, without notice to Tenant, but shall not be
required to apply all or any part of the Security Deposit necessary for the
payment of any Rent or any other sum in default and Tenant shall, within ten
(10) days following demand therefor, restore the Security Deposit to its
original amount. Any unapplied portion of the Security Deposit shall be returned to
Tenant, or, at Landlord’s option, to the last assignee of Tenant’s interest
hereunder, within sixty (60) days following the expiration of the Lease Term.
Tenant shall not be entitled to any interest on the Security Deposit. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code,
or any successor statute.



ARTICLE 22




INTENTIONALLY DELETED 




 ARTICLE 23




SIGNS




     23.1 Full Floors. Subject to Landlord’s prior written approval, in its sole
discretion, and provided all signs are in keeping with the quality, design and
style of the Building and Project, Tenant, if the Premises comprise an entire
floor of the Building, at its sole cost and expense, may install identification
signage anywhere in the Premises including in the elevator lobby of the
Premises, provided that such signs must not be visible from the exterior of
the Building.



     23.2 Multi-Tenant Floors. If other tenants occupy space on the floor on which
the Premises is located, Tenant’s identifying signage shall be provided by
Landlord, at Tenant’s cost, and such signage shall be comparable to that used
by Landlord for other similar floors in the Building and shall comply with
Landlord’s Building standard signage program.



     23.3
Prohibited Signage and Other Items. Any signs, notices, logos, pictures,
names or advertisements which are installed and that have not been separately
approved by Landlord may be removed without notice by Landlord at the sole
expense of Tenant. Tenant may not install any signs on the exterior or roof
of the Project or the Common Areas. Any signs, window coverings, or blinds
(even if the same are located behind the Landlord-approved window coverings for
the Building), or other items visible from the exterior of the Premises or
Building, shall be subject to the prior approval of Landlord, in its sole
discretion.



     23.4 Building Directory. Tenant shall be provided one (1) line on the
Building directory located in the lobby of the Building to display Tenant’s
name and location in the Building, and the names of Tenant’s principal
employees and subtenants.



	 	 	 	 	 
	 

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ARTICLE 24 




 COMPLIANCE WITH LAW




     Tenant shall not do anything or suffer anything to be done in or about the Premises or
the Project which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated (collectively, the “Applicable Laws”). At
its sole cost and expense, Tenant shall promptly comply with all such
Applicable Laws which relate to (i) Tenant’s use of the Premises, (ii)
the Alterations or “Tenant Improvements,” as that term is defined in Section
2.1 of the Tenant Work Letter attached hereto as Exhibit B, in the Premises,
or (iii) the Base Building, but as to the Base Building, only to the extent
such obligations are triggered by Tenant’s Alterations, the
Tenant Improvements, or Tenant’s use of the Premises for non-general office
use. Should any standard or regulation now or hereafter be imposed on Landlord
or Tenant by a state, federal or local governmental body charged with the
establishment, regulation and enforcement of occupational, health or safety
standards for employers, employees, landlords or tenants, then Tenant agrees,
at its sole cost and expense, to comply promptly with such standards or
regulations. Tenant shall be responsible, at its sole cost and expense, to
make all alterations to the Premises as are required to comply with the
governmental rules, regulations, requirements or standards described in
this Article 24. The judgment of any court of competent jurisdiction or the
admission of Tenant in any judicial action, regardless of whether Landlord is
a party thereto, that Tenant has violated any of said governmental measures,
shall be conclusive of that fact as between Landlord and Tenant. Landlord
shall comply with all Applicable Laws relating to the Base Building and
the Common Areas, provided that compliance with such Applicable Laws is not
the responsibility of Tenant under this Lease, and provided further that
Landlord’s failure to comply therewith would prohibit Tenant from obtaining or
maintaining a certificate of occupancy for the Premises, or would unreasonably
and materially affect the safety of Tenant’s employees or create a
significant health hazard for Tenant’s employees. Landlord shall be permitted
to include in Operating Expenses any costs or expenses incurred by Landlord
under this Article 24, but only to the extent consistent with the terms of
Section 4.2.4, above.



ARTICLE 25 




 LATE CHARGES




     If any installment of Rent or any other sum due from Tenant shall not be received
by Landlord or Landlord’s designee within five (5) days after said amount is
due, then Tenant shall pay to Landlord a late charge equal to (i) with respect
to the first occurrence, three percent (3%) of the overdue amount; and (ii)
thereafter, five percent (5%) of the overdue amount, plus, in each instance,
any attorneys’ fees incurred by Landlord by reason of Tenant’s failure to pay
Rent and/or other charges when due hereunder. The late charge shall be deemed
Additional Rent and the right to require it shall be in addition to all of
Landlord’s other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord’s remedies in any
manner. In addition to the late charge described above, any Rent or other amounts
owing hereunder which are not paid within ten (10) days after the date they
are due shall bear interest from the date when due until paid at a rate per
annum equal to the highest rate permitted by applicable law.



ARTICLE 26 




 LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT




     26.1 Landlord’s Cure. All covenants and agreements to be kept or performed
by Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost
and expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant’s part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.



     26.2 Tenant’s Reimbursement. Except as may be specifically provided to
the contrary in this Lease, Tenant shall pay to Landlord, within thirty (30)
days following delivery



	 	 	 	 	 
	 

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by Landlord to Tenant of statements therefor: (i) sums equal to expenditures reasonably
made and obligations incurred by Landlord in connection with the remedying by
Landlord of Tenant’s defaults pursuant to the provisions of Section 26.1;
(ii) sums equal to all losses, costs, liabilities, damages and expenses
referred to in Article 10 of this Lease; and (iii) sums equal to
all expenditures made and obligations incurred by Landlord in collecting or
attempting to collect the Rent or in enforcing or attempting to enforce any
rights of Landlord under this Lease or pursuant to law, including, without
limitation, all legal fees and other amounts so expended.
Tenant’s obligations under this Section 26.2 shall survive the expiration or
sooner termination of the Lease Term.




ARTICLE 27 




 ENTRY BY LANDLORD




     Landlord reserves the right at all reasonable times and upon reasonable notice to
Tenant (except in the case of an emergency) to enter the Premises to (i)
inspect them; (ii) show the Premises to prospective purchasers, mortgagees
or, during the last nine (9) months of the Lease Term, to tenants, or to
current or prospective mortgagees, ground or underlying lessors or insurers;
(iii) post notices of nonresponsibility; or (iv) alter, improve or repair the Premises,
the premises of other tenants in the Building, or the Building, or for
structural alterations, repairs, additions, or improvements to the Building
or the Building’s systems and equipment. Notwithstanding anything to the
contrary contained in this Article 27, Landlord may enter the Premises at any
time to (A) perform services required of Landlord, including janitorial service;
(B) take possession due to any breach of this Lease in the manner provided herein; and
(C) perform any covenants of Tenant which Tenant fails to perform. Landlord may make
any such entries without the abatement of Rent (except as provided in Section
6.4 of this Lease) and may take such reasonable steps as required to accomplish
the stated purposes; provided, however, except for (i) emergencies, (ii)
repairs, alterations, improvements or additions required by governmental or
quasi-governmental authorities or court order or decree, or (iii) repairs
which are the obligation of Tenant, hereunder, Landlord shall use commercially
reasonable efforts not to adversely interfere with Tenant’s use or access to
the Premises. Tenant hereby waives any claims for damages or for any injuries
or inconvenience to or interference with Tenant’s business, lost profits, any
loss of occupancy or quiet enjoyment of the Premises, and any other
loss occasioned thereby. For each of the above purposes, Landlord shall at all
times have a key with which to unlock all the doors in the Premises, excluding
Tenant’s vaults, safes and special security areas designated in advance by
Tenant. In an emergency, Landlord shall have the right to use any means that
Landlord may deem proper to open the doors in and to the Premises. Any entry
into the Premises by Landlord in the manner hereinbefore described shall not be deemed
to be a forcible or unlawful entry into, or a detainer of, the Premises, or an
actual or constructive eviction of Tenant from any portion of the Premises.
No provision of this Lease shall be construed as obligating Landlord to perform
any repairs, alterations or decorations except as otherwise expressly agreed to
be performed by Landlord herein.



ARTICLE 28




TENANT PARKING




     Tenant shall have the right to rent from Landlord, commencing on the
Lease Commencement Date, up to the amount of parking passes set forth in
Section 9 of the Summary, on a monthly basis throughout the Lease Term, which
parking passes shall pertain to the Project parking facility. Tenant may
change the number of unreserved parking passes rented pursuant to this Article
28 upon at least thirty (30) days prior written notice to Landlord, provided that in
no event shall Tenant be entitled to rent more than the amount of unreserved
parking passes set forth in Section 9 of the Summary. Tenant shall pay to
Landlord for automobile parking passes on a monthly basis the prevailing rate
charged from time to time at the location of such parking passes. In addition,
Tenant shall be responsible for the full amount of any taxes imposed by
any governmental authority in connection with the renting of such parking
passes by Tenant or the use of the parking facility by Tenant. Tenant’s
continued right to use the parking passes is conditioned upon Tenant abiding
by all rules and regulations which are prescribed from time to time for the
orderly operation and use of the parking facility where the parking passes
are located, including any sticker or other identification system established
by Landlord, Tenant’s cooperation in seeing that Tenant’s employees and
visitors also comply with such rules and regulations and Tenant not being in
default under this Lease beyond any applicable cure period



	 	 	 	 	 
	 

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set forth herein. Landlord specifically reserves the right to change the location,
size, configuration, design, layout and all other aspects of the Project
parking facility at any time and Tenant acknowledges and agrees that Landlord
may, without incurring any liability to Tenant and without any abatement of
Rent under this Lease, from time to time, close-off or restrict access to the
Project parking facility for purposes of permitting or facilitating any
such construction, alteration or improvements or cease providing the parking
passes if space is no longer available. Landlord may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to
the Landlord. The parking passes rented by Tenant pursuant to this Article 28
are provided to Tenant solely for use by Tenant’s own personnel and such
passes may not be transferred, assigned, subleased or otherwise alienated by
Tenant without Landlord’s prior approval. Tenant may validate visitor parking
by such method or methods as the Landlord may establish, at the validation
rate from time to time generally applicable to visitor parking.




ARTICLE 29 




 MISCELLANEOUS PROVISIONS




     29.1 Terms; Captions. The words “Landlord” and “Tenant” as used herein
shall include the plural as well as the singular. The necessary grammatical
changes required to make the provisions hereof apply either to corporations or
partnerships or individuals, men or women, as the case may require, shall in
all cases be assumed as though in each case fully expressed. The captions of
Articles and Sections are for convenience only and shall not be deemed to
limit, construe, affect or alter the meaning of such Articles and Sections.



     29.2 Binding Effect. Subject to all other provisions of this Lease, each of
the covenants, conditions and provisions of this Lease shall extend to and
shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.



     29.3 No Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are
temporarily darkened or the light or view therefrom is obstructed by reason of
any repairs, improvements, maintenance or cleaning in or about the Project, the
same shall be without liability to Landlord and without any reduction or
diminution of Tenant’s obligations under this Lease.



     29.4 Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building or Project reasonably require a modification of
this Lease, which modification will not cause an increased cost or expense to
Tenant or in any other way materially and adversely change the rights and
obligations of Tenant hereunder, then and in such event, Tenant agrees that
this Lease may be so modified and agrees to execute whatever documents
are reasonably required therefor and to deliver the same to Landlord within
twenty (20) days following a request therefor. Landlord agrees that Landlord
shall reimburse Tenant its reasonable costs in connection with Tenant’s review
and approval of such modifications (provided that reimbursement by Landlord
shall in no event exceed $1,000.00). At the request of Landlord or any
mortgagee or ground lessor, Tenant agrees to execute a short form of Lease
and deliver the same to Landlord within ten (10) days following the request
therefor.



     29.5 Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has
the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under
this Lease not accrued as of the date of the transfer, and Tenant agrees
to look solely to such transferee for the performance of Landlord’s
obligations hereunder after the date of transfer upon agreement by such
transferee to fully assume and be liable for all obligations of this Lease to
be performed by Landlord, including the return of any Security Deposit, and
Tenant shall attorn to such transferee. Tenant further acknowledges that
Landlord may assign its interest in this Lease to a mortgage lender as
additional security and agrees that such an assignment shall not release
Landlord from its obligations hereunder and that Tenant shall continue to look
to Landlord for the performance of its obligations hereunder.



	 	 	 	 	 
	 

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     29.6 Prohibition Against Recording. Except as provided in Section 29.4 of
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant.



     29.7 Landlord’s Title. Landlord’s title is and always shall be paramount to the title
of Tenant. Nothing herein contained shall empower Tenant to do any act which
can, shall or may encumber the title of Landlord.



     29.8 Relationship of Parties. Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.



     29.9 Application of Payments. Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant’s
designation of such payments, to satisfy any obligations of Tenant hereunder,
in such order and amounts as Landlord, in its sole discretion, may elect.



     29.10 Time of Essence. Time is of the essence with respect to the performance of
every provision of this Lease in which time of performance is a factor.



     29.11 Partial Invalidity. If any term, provision or condition contained in this
Lease shall, to any extent, be invalid or unenforceable, the remainder of this
Lease, or the application of such term, provision or condition to persons or
circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other
term, provision and condition of this Lease shall be valid and enforceable to
the fullest extent possible permitted by law.



     29.12 No Warranty. In executing and delivering this Lease, Tenant has not relied
on any representations, including, but not limited to, any representation as to
the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in one
or more of the exhibits attached hereto.



     29.13 Landlord Exculpation. The liability of Landlord or the Landlord Parties
to Tenant for any default by Landlord under this Lease or arising in connection
herewith or with Landlord’s operation, management, leasing, repair, renovation,
alteration or any other matter relating to the Project or the Premises shall be
limited solely and exclusively to an amount which is equal to the interest of
Landlord in the Building, provided that in no event shall such liability extend
to any sales or insurance proceeds received by Landlord or the Landlord Parties
in connection with the Project, Building or Premises. Neither Landlord, nor
any of the Landlord Parties shall have any personal liability therefor, and
Tenant hereby expressly waives and releases such personal liability on behalf
of itself and all persons claiming by, through or under Tenant. The
limitations of liability contained in this Section 29.13 shall inure to the benefit
of Landlord’s and the Landlord Parties’ present and future partners,
beneficiaries, officers, directors, trustees, shareholders, agents and
employees, and their respective partners, heirs, successors and assigns. Under
no circumstances shall any present or future partner of Landlord (if Landlord is
a partnership), or trustee or beneficiary (if Landlord or any partner of
Landlord is a trust), have any liability for the performance of Landlord’s
obligations under this Lease. Notwithstanding any contrary provision herein,
neither Landlord nor the Landlord Parties shall be liable under
any circumstances for injury or damage to, or interference with, Tenant’s
business, including but not limited to, loss of profits, loss of rents or other
revenues, loss of business opportunity, loss of goodwill or loss of use, in
each case, however occurring.



     29.14 Entire Agreement. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease and this Lease
constitutes the parties’ entire agreement with respect to the leasing of the
Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. None of the terms, covenants, conditions or provisions of this Lease
can be modified, deleted or added to except in writing signed by the parties
hereto.



	 	 	 	 	 
	 

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     29.15 Right to Lease. Landlord reserves the absolute right to effect such
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.



     29.16 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, inability to obtain services, labor, or materials
or reasonable substitutes therefor, governmental actions, civil commotions,
fire or other casualty, and other causes beyond the reasonable control of the
party obligated to perform, except with respect to the obligations imposed with
regard to Rent and other charges to be paid by Tenant pursuant to this Lease
and except as to Tenant’s obligations under Articles 5 and 24 of this
Lease (collectively, a “Force Majeure”), notwithstanding anything to the
contrary contained in this Lease, shall excuse the performance of such party
for a period equal to any such prevention, delay or stoppage and, therefore, if
this Lease specifies a time period for performance of an obligation of either
party, that time period shall be extended by the period of any delay in such
party’s performance caused by a Force Majeure.



     29.17 Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and for
all those claiming under Tenant, any and all rights now or hereafter existing
to redeem by order or judgment of any court or by any legal process or writ,
Tenant’s right of occupancy of the Premises after any termination of this
Lease.



     29.18 Notices. All notices, demands, statements, designations, approvals or
other communications (collectively,  “Notices”) given or required to be given by
either party to the other hereunder or by law shall be in writing, shall be (A)
sent by United States certified or registered mail, postage prepaid, return
receipt requested ( “Mail”), (B) transmitted by telecopy, if such telecopy is
promptly followed by a Notice sent by Mail, (C) delivered by a
nationally recognized overnight courier, or (D) delivered personally. Any
Notice shall be sent, transmitted, or delivered, as the case may be, to Tenant
or Landlord at the appropriate address set forth in Section 10 or 11 of the
Summary, as appropriate, or to such other place as either party may from time
to time designate in a Notice to the other. Any Notice will be deemed given (i) three
(3) days after the date it is posted if sent by Mail, (ii) the date the
telecopy is transmitted, (iii) the date the overnight courier delivery is made,
or (iv) the date personal delivery is made or attempted to be made. If Tenant
is notified of the identity and address of Landlord’s mortgagee or ground or
underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor written notice of any default by Landlord under the terms of
this Lease by registered or certified mail, and such mortgagee or ground or
underlying lessor shall be given a reasonable opportunity to cure such default
prior to Tenant’s exercising any remedy available to Tenant.



     29.19 Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.



     29.20 Authority. If Tenant is a corporation, trust or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so. In such event, Tenant shall, within ten (10) days after execution of
this Lease, deliver to Landlord satisfactory evidence of such authority and,
if a corporation, upon demand by Landlord, also deliver to Landlord
satisfactory evidence of (i) good standing in Tenant’s state of incorporation
and (ii) qualification to do business in California.



     29.21 Attorneys’ Fees. In the event that either Landlord or Tenant should bring suit
for the possession of the Premises, for the recovery of any sum due under this
Lease, or because of the breach of any provision of this Lease or for any
other relief against the other, then all costs and expenses, including
reasonable attorneys’ fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall be deemed
to have accrued on the date of the commencement of such action and shall be
enforceable whether or not the action is prosecuted to judgment.



     29.22 Governing Law: WAIVER OF TRIAL BY JURY. This Lease shall
be construed and enforced in accordance with the laws of the State of
California. IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND
TENANT HEREBY



	 	 	 	 	 
	 

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CONSENT TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF
CALIFORNIA, (II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA
LAW, AND (III) IN THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE
PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD
AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR
INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE
EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION
FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT SHALL
NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION
(UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING
OR ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.




     29.23 Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of, option for or option
to lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.



     29.24 Brokers. Landlord and Tenant hereby warrant to each other that they have
had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the  “Brokers”), and that they know of
no other real estate broker or agent who is entitled to a commission in
connection with this Lease. Each party agrees to indemnify and defend the
other party against and hold the other party harmless from any and all claims,
demands, losses, liabilities, lawsuits, judgments, costs and expenses
(including without limitation reasonable attorneys’ fees) with respect to any
leasing commission or equivalent compensation alleged to be owing on account of
any dealings with any real estate broker or agent, other than the
Brokers, occurring by, through, or under the indemnifying party.



     29.25 Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord’s expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.



     29.26 Project or Building Name and Signage. Landlord shall have the right at
any time to change the name of the Project or Building and to install, affix
and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord’s sole discretion, desire.
Tenant shall not use the name of the Project or Building or use pictures
or illustrations of the Project or Building in advertising or other publicity
or for any purpose other than as the address of the business to be conducted by
Tenant in the Premises, without the prior written consent of Landlord.



     29.27 Counterparts. This Lease may be executed in counterparts with the same
effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.



     29.28 Confidentiality. Tenant acknowledges that the content of this Lease and
any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant’s
financial, legal, and space planning and real estate consultants.



     29.29 Transportation Management. Landlord has entered into an agreement with
the Department of City Planning to implement a Transportation Management
Program ( “TMP”) for tenants and their employees, and to participate in a
program designed to coordinate commute alternatives, marketing, and brokerage
for greater downtown employees. During the term of the TMP, Landlord agrees to
provide transportation brokerage and commute assistance services to Tenant,
and to assist Tenant in meeting the transportation needs of its employees. Tenant
agrees to cooperate with and assist Landlord’s TMP Coordinator
( “Coordinator”), through designation of a responsible employee, to distribute
to Tenant’s employees written materials encouraging the



	 	 	 	 	 
	 

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use of public transit and ridesharing, and to distribute and return to the
Coordinator transportation survey questionnaire forms.




     29.30 Building Renovations. It is specifically understood and agreed that Landlord
has made no representation or warranty to Tenant and has no obligation and has
made no promises to alter, remodel, improve, renovate, repair or decorate the
Premises, Building, or any part thereof and that no representations respecting
the condition of the Project, Premises or the Building, or the areas in the
vicinity of the Project have been made by Landlord to Tenant except
as specifically set forth herein or in the Tenant Work Letter. However,
Tenant hereby acknowledges that Landlord is currently renovating or may during
the Lease Term renovate, improve, alter, or modify (collectively, the
“Renovations”) the Project, the Building and/or the Premises including without
limitation the parking structure, common areas, systems and equipment, roof,
and structural portions of the same, which Renovations may include,
without limitation, (i) installing sprinklers in the Building
common areas and tenant spaces, (ii) modifying the common areas and
tenant spaces to comply with applicable laws and regulations, including
regulations relating to the physically disabled, seismic conditions,
and building safety and security, (iii) installing new floor covering,
lighting, and wall coverings in the Building common areas, and (iv) creating
additional parking areas or occupied space within the Project,) and in
connection with any Renovations, Landlord may, among other things,
erect scaffolding or other necessary structures in the Building, limit or
eliminate access to portions of the Project, including portions of the common
areas, or perform work in the Building, which work may create noise, dust or
leave debris in the Building. Similarly, other properties in the vicinity of
the Project may undergo substantial construction or renovation during the Lease
Term (the “Area Renovations”), which may cause substantial disturbance to
traffic and parking, and may cause dust, noise and vibrations which may affect
the Project. Tenant hereby agrees that such Renovations or Area Renovations
and Landlord’s actions in connection with such Renovations or Area Renovations
shall in no way constitute a constructive eviction of Tenant nor entitle Tenant
to any abatement of Rent (except as provided in Section 6.4 of this
Lease). Landlord shall have no responsibility or for any reason be liable to
Tenant for any direct or indirect injury to or interference with Tenant’s
business arising from the Renovations or Area Renovations, nor shall Tenant be
entitled to any compensation or damages from Landlord for loss of the use of
the whole or any part of the Premises or of Tenant’s personal property
or improvements resulting from the Renovations or Area Renovations or
Landlord’s actions in connection with such Renovations or Area Renovations, or
for any inconvenience or annoyance occasioned by such Renovations or Area
Renovations or Landlord’s actions. Landlord shall use commercially reasonable
efforts to minimize any interference with Tenant’s use of and access to the
Premises resulting from Renovations by Landlord.



     29.31 No Violation. Tenant hereby warrants and represents that neither its execution
of nor performance under this Lease shall cause Tenant to be in violation of
any agreement, instrument, contract, law, rule or regulation by which Tenant
is bound, and Tenant shall protect, defend, indemnify and hold Landlord
harmless against any claims, demands, losses, damages, liabilities, costs and
expenses, including, without limitation, reasonable attorneys’ fees and
costs, arising from Tenant’s breach of this warranty and representation.



     29.32 Communications and Computer Lines. Tenant may install, maintain,
replace, remove or use any communications or computer wires and cables
(collectively, the  “Lines”) at the Project in or serving the Premises,
provided that (i) Tenant shall obtain Landlord’s prior written consent, which
consent shall not be unreasonably withheld, use an experienced and qualified
contractor reasonably approved in writing by Landlord, and comply with all of
the other provisions of Articles 7 and 8 of this Lease, (ii) an acceptable
number of spare Lines and space for additional Lines shall be maintained for
existing and future occupants of the Project, as determined in Landlord’s
reasonable opinion, (iii) the Lines therefor (including riser cables) shall be
appropriately insulated to prevent excessive electromagnetic fields or radiation, and shall
be surrounded by a protective conduit reasonably acceptable to Landlord, (iv)
any new or existing Lines servicing the Premises shall comply with all
applicable governmental laws and regulations, (v) as a condition to permitting
the installation of new Lines, Landlord may require that Tenant remove
existing Lines located in or serving the Premises and repair any damage in
connection with such removal, and (vi) Tenant shall pay all costs in
connection therewith. Landlord reserves the right to require that Tenant
remove any Lines located in or serving the Premises which are installed in
violation of these provisions, or which are at any time in violation of
any laws or represent a dangerous or potentially dangerous condition.
Landlord makes no representation or assurances with regard to the suitability,
available or capacity of the Building’s



	 	 	 	 	 
	 

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telephone and communication distribution network or risers within or service to the Building
for Tenant’s communication needs.




     29.33 Development of the Project.



          29.33.1 Subdivision. Landlord reserves the right to further subdivide all or
a portion of the Project. Tenant agrees to execute and deliver, upon demand by
Landlord and in the form requested by Landlord, any additional documents needed
to conform this Lease to the circumstances resulting from such subdivision.




          29.33.2 The Other Improvements. If portions of the Project or
property adjacent to the Project (collectively, the “Other Improvements”) are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of any or all of the Other Improvements
to provide (i) for reciprocal rights of access and/or use of the Project and
the Other Improvements, (ii) for the common management, operation, maintenance, improvement and/or repair of all or any portion of the
Project and the Other Improvements, (iii) for the allocation of a portion of
the Direct Expenses to the Other Improvements and the operating expenses and
taxes for the Other Improvements to the Project, and (iv) for the use or
improvement of the Other Improvements and/or the Project in connection with the
improvement, construction, and/or excavation of the Other Improvements and/or
the Project. Nothing contained herein shall be deemed or construed to limit
or otherwise affect Landlord’s right to convey all or any portion of the
Project or any other of Landlord’s rights described in this Lease.




          29.33.3 Construction of Project and Other Improvements.
Tenant acknowledges that portions of the Project and/or the Other Improvements
may be under construction following Tenant’s occupancy of the Premises, and
that such construction may result in levels of noise, dust, obstruction of
access, etc. which are in excess of that present in a fully constructed
project. Tenant hereby waives any and all rent offsets or claims of
constructive eviction which may arise in connection with such construction.




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



	 	 	 	 	 	 	 
	 	 	“Landlord”:
	 
	 	 	 	 	 	 
	 	 	PWREF/MCC-CHINA BASIN L.L.C.,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ [ILLEGIBLE]
	 	 	 	 	 
	 

	 	 	 	Its:
	 	Authorized Representative
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	“Tenant”:
	 
	 	 	 	 	 	 
	 	 	LOOPNET,
	 	 	a California corporation
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Richard J. Boyle,
Jr.
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Its:	 	PRESIDENT AND CEO
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 
	 

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EXHIBIT B




CHINA BASIN LANDING




TENANT WORK LETTER




     This Tenant Work Letter shall set forth the terms and conditions relating to
the construction of the tenant improvements in the Premises. This Tenant Work
Letter is essentially organized chronologically and addresses the issues of
the construction of the Premises, in sequence, as such issues will arise
during the actual construction of the Premises. All references in this Tenant
Work Letter to Articles or Sections of “this Lease” shall mean the relevant
portion of Articles 1 through 29 of the Office Lease to which this Tenant
Work Letter is attached as Exhibit B and of which this Tenant Work Letter
forms a part, and all references in this Tenant Work Letter to Sections of
“this Tenant Work Letter” shall mean the relevant portion of Sections 1
through 6 of this Tenant Work Letter.



 SECTION 1




LANDLORD’S INITIAL CONSTRUCTION IN THE PREMISES




     1.1 Base, Shell and Core of the Premises as Constructed by Landlord. Landlord
has constructed, at its sole cost and expense, the base, shell, and core (i) of
the Premises and (ii) of the floor of the Building on which the Premises is
located (collectively, the “Base, Shell, and Core”). The Base, Shell and Core
shall consist of those portions of the Premises which were in existence prior
to the construction of the tenant improvements in the Premises for the prior
tenant of the Premises.



     1.2 Landlord Work. Landlord shall, at Landlord’s sole cost and expense, prior to
the Lease Commencement Date, cause the construction or installation of the
following items on the floor of the Building containing the Premises
(collectively, the “Landlord Work”). Tenant may not change or alter the
Landlord Work. Notwithstanding anything to the contrary contained in this
Lease, in no event shall the Lease Commencement Date occur prior to the
substantial completion by Landlord of the Landlord Work.



          1.2.1 Public Corridor (only as to that portion of the Premises, if any,
which occupies only a portion of a floor, rather than an entire floor, of the
Building). The actual public corridor wall, the standard tenant entries and
exits including doors, frames, hardware, and sidelight (if any), and standard
tenant entry signage and exit lights (collectively, the “Public Corridor”),
which Public Corridor is adjacent to the Premises.




          1.2.2 Demising Walls Between Tenants (only as to that portion of the
Premises, if any, which occupies only a portion of a floor, rather than an
entire floor, of the Building). The demising partitions between tenants
which shall include studs, acoustical insulation and dry wall ready for finish
on tenant side only and any necessary penetrations, fire dampers and sound
traps (collectively, the “Demising Walls”), which Demising Walls are adjacent
to the Premises.




          1.2.3 Demolish and remove the tenant improvements existing in the Premises
as of the date of this Lease in accordance with the “Demolition Plan” attached
hereto as Schedule 2 to Exhibit B. Landlord shall perform the demolition
work in accordance with Landlord’s standard demolition procedures.




SECTION
2




TENANT IMPROVEMENTS




     2.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time
tenant improvement allowance (the “Tenant Improvement Allowance”) in the
amount of $25.00 per rentable square foot of the Premises for the costs
relating to the design and construction of Tenant’s improvements which are
permanently affixed to the Premises (the “Tenant Improvements”). Within thirty
(30) days following the Lease Commencement Date, Tenant shall be entitled,
pursuant to a written notice delivered to Landlord, to a one-time increase
(the “Additional Allowance”) of the Tenant Improvement Allowance in an amount
not to exceed $5.00 for each rentable square foot of the Premises, for the
costs relating to the initial design and construction of the Tenant
Improvements. In the event Tenant exercises its right to use all or any



	 	 	 	 	 
	 

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portion of the Additional Allowance, the monthly Base Rent for the Premises shall be
increased by an amount equal to the “Additional Monthly Base Rent,” as that
term is defined below, in order to repay the Additional Allowance to Landlord.
The “Additional Monthly Base Rent” shall be determined as the missing component
of an annuity, which annuity shall have (i) the amount of the Additional
Allowance which Tenant elects to utilize as the present value amount, (ii)
sixty (60) as the number of payments, (iii) seventy-five one-hundredths (.75),
which is equal to nine percent (9%) divided by twelve (12) months per year, as
the monthly interest factor, and (iv) the Additional Monthly Base Rent as the
missing component of the annuity. In the event Tenant elects to utilize all
or a portion of the Additional Allowance, then (a) all references in this
Tenant Work Letter to the “Tenant Improvement Allowance”, shall be deemed to
include the Additional Allowance which Tenant elects to utilize, (b) the
parties shall promptly execute an amendment (the “Amendment”) to this Lease
setting forth the new amount of the Base Rent and Tenant Improvement Allowance
computed in accordance with this Section 2.1, and (c) the additional amount of
monthly Base Rent owing in accordance with this Section 2.1 for the first full
month of the Lease Term which occurs after the expiration of any free rent
period shall be paid by Tenant to Landlord at the time of Tenant’s execution of
the Amendment. In no event shall Landlord be obligated to make disbursements
pursuant to this Tenant Work Letter in a total amount which exceeds the Tenant
Improvement Allowance and the Additional Allowance. All Tenant Improvements for
which the Tenant Improvement Allowance has been made available shall be deemed
Landlord’s property under the terms of the Lease. Notwithstanding
the foregoing, upon Tenant’s request, at the expiration or earlier termination
of this Lease, Landlord shall negotiate with Tenant in good faith towards the
purchase by Tenant of all or any portion of the Tenant Improvements, at the
then-current fair market value for such Tenant Improvements. Upon Tenant’s
request, Landlord and Tenant shall retain an independent third party
(mutually approved by Landlord and Tenant) to determine the fair market value
of such Tenant Improvements. The fees of such third party shall be split evenly
between Landlord and Tenant.




     2.2 Disbursement of the Tenant Improvement Allowance. Except as otherwise
set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall
be disbursed by Landlord (each of which disbursements shall be made pursuant
to Landlord’s disbursement process) for costs related to the construction of
the Tenant Improvements and for the following items and costs (collectively,
the “Tenant Improvement Allowance Items”): (i) payment of the fees of the
“Architect” and the “Engineers,” as those terms are defined in Section 3.1 of
this Tenant Work Letter, and payment of the fees incurred by, and the cost of
documents and materials supplied by, Landlord and Landlord’s consultants in
connection with the preparation and review of the “Construction Drawings,” as
that term is defined in Section 3.1 of this Tenant Work Letter; (ii) the cost
of any changes in the Base, Shell and Core when such changes are required by
the Construction Drawings; (iii) the cost of any changes to the
Construction Drawings or Tenant Improvements required by all applicable
building codes (the “Code”); (iv) the cost of the Landlord’s Work; and (v)
the “Landlord Supervision Fee”, as that term is defined in Section 4.3.2 of
this Tenant Work Letter; and (vi) costs of the purchase and installation
of furniture, fixtures and equipment in the Premises (“FF&E”), provided that
the cost of the FF&E shall not exceed $12.50 per rentable square feet of the
Premises. Landlord shall use commercially reasonable efforts to notify Tenant
as promptly as reasonably possible in the event Landlord believes, following
its review of the Construction Drawings, that changes will be required as set
forth in items (ii) and/or (iii) above, in order to allow Tenant to make
applicable changes to the Construction Drawings.



     2.3 Standard Tenant Improvement Package. Landlord has established
specifications (the “Specifications”) for the Building standard components
to be used in the construction of the Tenant Improvements in the Premises
(collectively, the “Standard Improvement Package”), which Specifications
shall be supplied to Tenant by Landlord. The quality of Tenant Improvements
shall be equal to or of greater quality than the quality of the Specifications
(or otherwise reasonably acceptable to Landlord), provided that Landlord
may, at Landlord’s option, require the Tenant Improvements to comply with
certain Specifications. Landlord may make changes to the Specifications for
the Standard Improvement Package from time to time.



SECTION 3




CONSTRUCTION DRAWINGS




     3.1 Selection of Architect/Construction Drawings. Tenant shall retain
the architect/space planner designated by Landlord (the “Architect”) to
prepare the “Construction



	 	 	 	 	 
	 

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Drawings,” as that term is defined, in this Section 3.1. Tenant shall retain the
engineering consultants designated by Landlord (the “Engineers”) to prepare
all plans and engineering working drawings relating to the structural,
mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work of the
Tenant Improvements. The plans and drawings to be prepared by Architect and
the Engineers hereunder shall be known collectively as the
“Construction Drawings.” All Construction Drawings shall comply with the
drawing format and specifications as determined by Landlord, and shall be
subject to Landlord’s approval. Tenant and Architect shall verify, in the
field, the dimensions and conditions as shown on the relevant portions of
the base Building plans, and Tenant and Architect shall be solely responsible
for the same, and Landlord shall have no responsibility in connection
therewith. Landlord’s review of the Construction Drawings as set forth in
this Section 3, shall be for its sole purpose and shall not imply Landlord’s
review of the same, or obligate Landlord to review the same, for
quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or
its space planner, architect, engineers and consultants, and notwithstanding
any advice or assistance which may be rendered to Tenant by Landlord or
Landlord’s space planner, architect, engineers, and consultants, Landlord shall
have no liability whatsoever in connection therewith and shall not be
responsible for any omissions or errors contained in the Construction
Drawings, and Tenant’s waiver and indemnity set forth in this Lease shall
specifically apply to the Construction Drawings.




     3.2 Final Space Plan. On or before the date set forth in Schedule 1, attached
hereto, Tenant and the Architect shall prepare the final space plan for Tenant
Improvements in the Premises (collectively, the “Final Space Plan”), which
Final Space Plan shall include a layout and designation of all offices, rooms
and other partitioning, their intended use, and equipment to be contained
therein, and shall deliver the Final Space Plan to Landlord for Landlord’s approval.



     3.3 Final Working Drawings. On or before the date set forth in Schedule 1,
Tenant, the Architect and the Engineers shall complete the architectural and
engineering drawings for the Premises, and the final architectural working
drawings in a form which is complete to allow subcontractors to bid on the work
and to obtain all applicable permits (collectively, the “Final Working
Drawings”) and shall submit the same to Landlord for Landlord’s approval.
Landlord shall, within five (5) business days after Landlord’s receipt of the
Final Working Drawings either (i) approve the Final Working Drawings, (ii)
approve the Final Working Drawings subject to specified conditions to be
satisfied by Tenant prior to submitting the Approved Working Drawings for
permits as set forth in Section 3.4, below, if the Final Working Drawings do
not comply with the Final Space Plan or contain a design problem, or (iii)
disapprove and return the Final Working Drawings to Tenant with detailed
requested revisions if the Final Working Drawings do not comply with the Final
Space Plan or contain a design problem. If Landlord disapproves the Final
Working Drawings, Tenant shall resubmit the Final Working Drawings to Landlord
within five (5) business days, and Landlord shall approve or disapprove of
the resubmitted Final Working Drawings within five (5) business days after
Landlord receives such resubmitted Final Working Drawings.



     3.4 Permits. The Final Working Drawings shall be approved by Landlord
(the “Approved Working Drawings”) prior to the commencement of the
construction of the Tenant Improvements. Tenant shall immediately submit
the Approved Working Drawings to the appropriate municipal authorities for
all applicable building permits necessary to allow “Contractor,” as that term
is defined in Section 4.1, below, to commence and fully complete
the construction of the Tenant Improvements (the “Permits”), and, in
connection therewith, Tenant shall coordinate with Landlord in order to allow
Landlord, at its option, to take part in all phases of the permitting process
and shall supply Landlord, as soon as possible, with all plan check numbers
and dates of submittal and obtain the Permits on or before the date set forth in
Schedule 1. Notwithstanding anything to the contrary set forth in this
Section 3.4, Tenant hereby agrees that neither Landlord nor Landlord’s
consultants shall be responsible for obtaining any building permit or
certificate of occupancy for the Premises and that the obtaining of the same shall
be Tenant’s responsibility; provided however that (i) Landlord shall be
responsible to the extent Tenant is unable to obtain such Permits due to
Landlord’s failure to perform the Landlord Work in a good and workmanlike
manner; and (ii) Landlord shall, in any event, cooperate with Tenant in
executing permit applications and performing other ministerial acts reasonably necessary
to enable Tenant to obtain any such permit or certificate of occupancy. No
changes, modifications or alterations in the Approved Working Drawings may be
made without the prior written consent of Landlord, provided that Landlord may
withhold its consent, in its sole discretion, to any change in the Approved
Working Drawings if such change would directly or indirectly delay the



	 	 	 	 	 
	 

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“Substantial Completion” of the Premises as that term is defined in Section
5.1 of this Tenant Work Letter; provided that Landlord shall give Tenant notice of
any such anticipated delays and the cost of such change to the Approved Working
Drawings; and provided further that if Tenant agrees that any resulting delay would
constitute a Tenant delay pursuant to Section 5 below and if Tenant agrees to pay
any additional costs which arise as a result of such changes, modifications or
alterations, then Landlord will not withhold its consent to such changes,
modifications or alterations, unless a design problem exists.




     3.5 Time Deadlines. Tenant shall use its good faith, efforts and all
due diligence to cooperate with the Architect, the Engineers, and Landlord to
complete all phases of the Construction Drawings and the permitting process and to
receive the permits, and with Contractor for approval of the “Cost Proposal,” as
that term is defined in Section 4.2 of this Tenant Work Letter, as soon as possible
after the execution of the Lease, and, in that regard, shall meet with Landlord on
a scheduled basis to be determined by Landlord, to discuss Tenant’s progress in
connection with the same. The applicable dates for approval of items, plans and
drawings as described in this Section 3, Section 4, below, and in this Tenant Work
Letter are set forth and further elaborated upon in Schedule 1 (the “Time
Deadlines”), attached hereto. Tenant agrees to comply with the Time Deadlines.
Landlord agrees to use commercially reasonable efforts to cooperate with Tenant to
ensure compliance with the Time Deadlines.



SECTION 4




CONSTRUCTION OF THE TENANT IMPROVEMENTS




     4.1 Contractor. A contractor designated by Landlord (“Contractor”)
shall construct the Tenant Improvements.



     4.2  Cost Proposal. After the Approved Working Drawings are signed by Landlord
and Tenant, Landlord shall provide Tenant with a cost proposal in accordance
with the Approved
Working Drawings, which cost proposal shall include, as nearly as possible, the
cost of all
Tenant Improvement Allowance Items to be incurred by Tenant in connection with
the design
and construction of the Tenant Improvements (the “Cost Proposal”). Tenant shall
approve and
deliver the Cost Proposal to Landlord within five (5) business days of the
receipt of the same,
and upon receipt of the same by Landlord, Landlord shall be released by Tenant
to purchase the
items set forth in the Cost Proposal and to commence the construction relating
to such items.
The date by which Tenant must approve and deliver the Cost Proposal to Landlord
shall be
known hereafter as the “Cost Proposal Delivery Date”.



     4.3 Construction of Tenant Improvements by Contractor under the Supervision of
Landlord.



     4.3.1 Over-Allowance Amount. On the Cost Proposal Delivery Date, Tenant
shall deliver to Landlord cash in an amount (the “Over-Allowance Amount”) equal
to the
difference between (i) the amount of the Cost Proposal and (ii) the amount of
the Tenant
Improvement Allowance. The Over-Allowance Amount shall be disbursed by Landlord
prior to
the disbursement of any then remaining portion of the Tenant Improvement
Allowance, and such
disbursement shall be pursuant to the same procedure as the Tenant Improvement
Allowance. In
the event that, after the Cost Proposal Delivery Date, any revisions, changes,
or substitutions
shall be made to the Construction Drawings or the Tenant Improvements, any
additional costs
which arise in connection with such revisions, changes or substitutions or any
other additional
costs shall be paid by Tenant to Landlord immediately upon Landlord’s request
as an addition to
the Over-Allowance Amount.



     4.3.2 Landlord’s Retention of Contractor. Landlord shall
independently retain
Contractor, on behalf of Tenant, to construct the Tenant Improvements in
accordance with the
Approved Working Drawings and the Cost Proposal and Landlord shall supervise
the
construction by Contractor, and Tenant shall pay a construction supervision and
management fee
(the “Landlord Supervision Fee”) to Landlord in an amount equal to the product
of (i) two
percent (2%) and (ii) an amount equal to the Tenant Improvement Allowance plus
the Over
Allowance Amount (as such Over-Allowance Amount may increase pursuant to the
terms of this
Tenant Work Letter).



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     4.3.3. Contractor’s Warranties and Guaranties. Landlord hereby
assigns to Tenant all warranties and guaranties by Contractor relating to the Tenant
Improvements, and Tenant hereby waives all claims against Landlord relating to, or
arising out of the construction of, the Tenant Improvements.



     4.3.4 Tenant’s Covenants. Tenant hereby indemnifies Landlord for any loss,
claims, damages or delays arising from the actions of Architect on the Premises or in
the Building. Within ten (10) days after completion of construction of the Tenant
Improvements, Tenant shall cause Contractor and Architect to cause a Notice of
Completion to be recorded in the office of the County Recorder of the county in which
the Building is located in accordance with Section 3093 of the Civil Code of the State
of California or any successor statute and furnish a copy thereof to Landlord upon
recordation, failing which, Landlord may itself execute and file the same on behalf of
Tenant as Tenant’s agent for such purpose. In addition, immediately after the
Substantial Completion of the Premises, Tenant shall have prepared and delivered to the
Building a copy of the “as built” plans and specifications (including all working
drawings) for the Tenant Improvements.



 SECTION 5




COMPLETION OF THE TENANT IMPROVEMENTS; 
LEASE COMMENCEMENT DATE




     5.1 Ready for Occupancy. The Premises shall be deemed “Ready for Occupancy”
upon the Substantial Completion of the Premises. For purposes of this Lease,
“Substantial Completion” of the Premises shall occur upon the completion of construction
of (i) the Tenant Improvements in the Premises pursuant to the Approved Working
Drawings, and (ii) the Landlord Work, with the exception of any punch list items and any
tenant fixtures, workstations, built-in furniture, or equipment to be installed by
Tenant or under the supervision of Contractor.



     5.2 Delay of the Substantial Completion of the Premises. Except as provided
in this Section 5.2, the Lease Commencement Date shall occur as set forth in the Lease
and Section 5.1, above. If there shall be a delay or there are delays in the Substantial
Completion of the Premises or in the occurrence of any of the other conditions precedent
to the Lease Commencement Date, as set forth in the Lease, as a direct, indirect,
partial, or total result of:



          5.2.1 Tenant’s failure to comply with the Time Deadlines; provided, however,
that Tenant’s failure to obtain the Permits by the date required in Schedule 1 shall
not be deemed
a Tenant delay to the extent such failure is caused by Landlord’s failure to perform
the Landlord
work in a good and workmanlike manner;




          5.2.2 Tenant’s failure to timely approve any matter requiring Tenant’s
approval;




          5.2.3 A breach by Tenant of the terms of this Tenant Work Letter or the
Lease;




          5.2.4 Changes in any of the Construction Drawings after disapproval of the
same by Landlord or because the same do not comply with Code or other applicable
laws;




          5.2.5 Tenant’s request for changes in the Approved Working Drawings;




          5.2.6 Tenant’s requirement for materials, components, finishes or improvements
which are not available in a commercially reasonable time given the anticipated date
of
Substantial Completion of the Premises, as set forth in the Lease, or which are
different from, or
not included in, the Standard Improvement Package;




          5.2.7 Changes to the Base, Shell and Core required by the Approved Working
Drawings; or




          5.2.8 Any other acts or omissions of Tenant, or its agents, or employees;



then, notwithstanding anything to the contrary set forth in the Lease or this Tenant
Work Letter and regardless of the actual date of the Substantial Completion of the
Premises, the date of the Substantial Completion of the Premises shall be deemed to be
the date the Substantial




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Completion of the Premises would have occurred if no Tenant delay or delays,
as set forth above, had occurred; provided, however, that notwithstanding the
foregoing, no Tenant delay shall be deemed to have occurred unless and until
Landlord has provided prior written notice thereof to Tenant, specifying the action
or inaction by Tenant which Landlord contends constitutes the
Tenant delay.




SECTION 6




MISCELLANEOUS




     6.1 Tenant’s Entry Into the Premises Prior.to Substantial Completion.
Provided that
Tenant and its agents do not interfere with Contractor’s work in the Building
and the Premises,
Contractor shall allow Tenant access to the Premises prior to the Substantial
Completion of the
Premises for the purpose of Tenant installing overstandard equipment or fixtures
(including
Tenant’s data and telephone equipment) in the Premises. Prior to Tenant’s
entry into the
Premises as permitted by the terms of this Section 6.1, Tenant shall submit a
schedule to
Landlord and Contractor, for their approval, which schedule shall detail the
timing and purpose
of Tenant’s entry. Tenant shall hold Landlord harmless from and indemnify,
protect and defend
Landlord against any loss or damage to the Building or Premises and against
injury to any
persons caused by Tenant’s actions pursuant to this Section 6.1.



     6.2 Freight Elevators. Landlord shall, consistent with its obligations
to other tenants
of the Building, make the freight elevator reasonably available to Tenant in
connection with
initial decorating, furnishing and moving into the Premises.



     6.3 Tenant’s Representative. Tenant has designated Richard Boyle as its sole
representative with respect to the matters set forth in this Tenant Work
Letter, who, until further
notice to Landlord, shall have full authority and responsibility to act on
behalf of the Tenant as
required in this Tenant Work Letter.



     6.4 Landlord’s Representative. Landlord has designated General Manager
as its sole
representative with respect to the matters set forth in this Tenant Work
Letter, who, until further
notice to Tenant, shall have full authority and responsibility to act on behalf
of the Landlord as
required in this Tenant Work Letter.



     6.5 Tenant’s Agents. All subcontractors, laborers, materialmen, and suppliers
retained directly by Tenant shall all be union labor in compliance with the
then existing master
labor agreements.



     6.6 Time of the Essence in This Tenant Work Letter. Unless otherwise
indicated, all
references herein to a “number of days” shall mean and refer to calendar days.
In all instances
where Tenant is required to approve or deliver an item, if no written notice of
approval is given
or the item is not delivered within the stated time period, at Landlord’s sole
option, at the end of
such period the item shall automatically be deemed approved or delivered by
Tenant and the next
succeeding time period shall commence.



     6.7 Tenant’s Lease Default. Notwithstanding any provision to the
contrary contained
in this Lease, if an event of default as described in the Lease, or a default
by Tenant under this
Tenant Work Letter, has occurred at any time on or before the Substantial
Completion of the
Premises, then (i) in addition to all other rights and remedies granted to
Landlord pursuant to the
Lease, Landlord shall have the right to withhold payment of all or any portion
of the Tenant
Improvement Allowance and/or Landlord may cause Contractor to cease the
construction of the
Premises (in which case, Tenant shall be responsible for any delay in the
Substantial Completion
of the Premises caused by such work stoppage as set forth in Section 5 of this
Tenant Work
Letter), and (ii) all other obligations of Landlord under the terms of this
Tenant Work Letter shall
be forgiven until such time as such default is cured pursuant to the terms of
the Lease.



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SCHEDULE 1 TO EXHIBIT B




TIME DEADLINES




	 	 	 	 	 
	 	 	Dates	 	Actions to be Performed
	A.

	 	January 14, 2003
	 	Final Space Plan to be completed by Tenant and
delivered to Landlord.
	 
	 	 	 	 
	B.

	 	January 24, 2003
	 	Tenant to deliver Final Working Drawings to
Landlord.
	 
	 	 	 	 
	C.

	 	February 10, 2003
	 	Tenant to deliver Permits to Contractor.
	 
	D.

	 	Five (5) business days after the receipt
of the Cost Proposal by Tenant
	 	Tenant to approve Cost Proposal and deliver Cost
Proposal to Landlord.






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 SCHEDULE 2 TO EXHIBIT B 




 DEMOLITION PLAN 








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EXHIBIT C




CHINA BASIN LANDING




NOTICE OF LEASE TERM DATES




	 	 	 	 	 
	To:

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 
	 

	 	Re:
	 	Office Lease dated                                          , 20                      between                                         , a
	 

	 	 	 	                                         (“Landlord”), and                                         , a
	 

	 	 	 	                                         (“Tenant”) concerning Suite                      on floor(s)
	 

	 	 	 	                    of the office building located at                                                             ,
	 

	 	 	 	San Francisco, California.





Gentlemen:




     In accordance with the Office Lease (the “Lease”), we wish to advise you and/or confirm
as follows:



     1. The Lease Term shall commence on or has commenced on                                          for a
term of
                                         ending on                                         .



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



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



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



     5. The exact number of rentable/usable square feet within the Premises is                                          square feet.



     6. Tenant’s Share as adjusted based upon the exact number of usable square feet within the Premises is                                         %.



	 	 	 	 	 	 	 
	 	 	“Landlord”:	 	 
	 
	 	 	 	 	 	,
	 	 	 

	 
	 	 	 	 	 	 
	 

	 	a	 	 	 	 
	 	 	 

	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Its:	 	 
	 

	 	 	 	 	 	 




Agreed to and Accepted

as of                                        , 20                    .



“Tenant”:




	 	 	 	 	 	 	 
	 	 	 
	a
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 
	 

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EXHIBIT D




CHINA BASIN LANDING




RULES AND REGULATIONS




     Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance of
any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this Lease,
the latter shall control.



     1. Tenant shall not alter any lock or install any new or additional locks or
bolts on
any doors or windows of the Premises without obtaining Landlord’s prior written
consent.
Tenant shall bear the cost of any lock changes or repairs required by Tenant.
Two keys will be
furnished by Landlord for the Premises, and any additional keys required by
Tenant must be
obtained from Landlord at a reasonable cost to be established by Landlord. Upon
the termination
of this Lease, Tenant shall restore to Landlord all keys of stores, offices,
and toilet rooms, either
furnished to, or otherwise procured by, Tenant and in the event of the loss of
keys so furnished,
Tenant shall pay to Landlord the cost of replacing same or of changing the lock
or locks opened
by such lost key if Landlord shall deem it necessary to make such changes.



     2. Landlord reserves the right to close and keep locked all entrance and exit
doors of
the Building during such hours as are customary for comparable buildings in the
vicinity of the
Building. Tenant, its employees and agents must be sure that the doors to the
Building are
securely closed and locked when leaving the Premises if it is after the normal
hours of business
for the Building. Any tenant, its employees, agents or any other persons
entering or leaving the
Building at any time when it is so locked, or any time when it is considered to
be after normal
business hours for the Building, may be required to sign the Building register.
Access to the
Building may be refused unless the person seeking access has proper
identification or has a
previously arranged pass for access to the Building. Landlord will furnish
passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom
Tenant requests passes and shall be liable to Landlord for all acts of such
persons. The Landlord
and his agents shall in no case be liable for damages for any error with regard
to the admission to
or exclusion from the Building of any person. In case of invasion, mob, riot,
public excitement,
or other commotion, Landlord reserves the right to prevent access to the
Building or the Project
during the continuance thereof by any means it deems appropriate for the safety
and protection
of life and property.



     3. No furniture, freight or equipment of any kind shall be brought into or
removed
from the Building without prior notice to Landlord. All moving activity into
or out of the
Building shall be scheduled with Landlord and done only at such time and in
such manner as
Landlord designates. Landlord shall have the right to prescribe the weight,
size and position of
all safes and other heavy property brought into the Building and also the times
and manner of
moving the same in and out of the Building. Safes and other heavy objects
shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to
properly distribute
the weight. Landlord will not be responsible for loss of or damage to any
such safe or property
in any case. Any damage to any part of the Building, its contents, occupants
or visitors by
moving or maintaining any such safe or other property shall be the sole
responsibility and
expense of Tenant.



     4. No sign, advertisement, notice or handbill shall be exhibited, distributed,
painted
or affixed by Tenant on any part of the Premises or the Building without the
prior written
consent of the Landlord. Tenant shall not disturb, solicit, peddle, or canvass
any occupant of the
Project and shall cooperate with Landlord and its agents of Landlord to prevent
same.



     5. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for
any purpose other than that for which they were constructed, and no foreign
substance of any
kind whatsoever shall be thrown therein. The expense of any breakage,
stoppage or damage
resulting from the violation of this rule shall be borne by the tenant who, or
whose servants,
employees, agents, visitors or licensees shall have caused same.



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     6. Tenant shall not overload the floor of the Premises, nor mark, drive
nails or
screws, or drill into the partitions, woodwork or drywall or in any way deface
the Premises or
any part thereof without Landlord’s prior written consent. Tenant shall not
purchase spring
water, ice, towel, linen, maintenance or other like services from any person or
persons not
approved by Landlord.



     7. Except for vending machines intended for the sole use of Tenant’s employees
and
invitees, no vending machine or machines other than fractional horsepower
office machines shall
be installed, maintained or operated upon the Premises without the written
consent of Landlord.



     8. Tenant shall not use or keep in or on the Premises, the Building, or the
Project any
kerosene, gasoline, explosive material, corrosive material, material capable of
emitting toxic
fumes, or other inflammable or combustible fluid chemical, substitute or
material. Tenant shall
provide material safety data sheets for any Hazardous Material used or kept on
the Premises.



     9. Tenant shall not use, keep or permit to be used or kept, any foul or noxious
gas or
substance in or on the Premises, or permit or allow the Premises to be occupied
or used in a
manner offensive or objectionable to Landlord or other occupants of the Project
by reason of
noise, odors, or vibrations, or interfere with other tenants or those having
business therein,
whether by the use of any musical instrument, radio, phonograph, or in any
other way. Tenant
shall not throw anything out of doors, windows or skylights or down
passageways.



     10. Tenant shall not bring into or keep within the Project, the Building or the
Premises any animals, birds, aquariums, or, except in areas designated by
Landlord, bicycles or
other vehicles.



     11. No cooking shall be done or permitted on the Premises, nor shall the
Premises be
used for the storage of merchandise, for lodging or for any improper,
objectionable or immoral
purposes. Notwithstanding the foregoing, Underwriters’ laboratory-approved
equipment and
microwave ovens may be used in the Premises for heating food and brewing
coffee, tea, hot
chocolate and similar beverages for employees and visitors, provided that such
use is in
accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and
regulations.



     12. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
provided for in
the Summary. Tenant shall not occupy or permit any portion of the Premises to
be occupied as
an office for a messenger-type operation or dispatch office, public
stenographer or typist, or for
the manufacture or sale of liquor, narcotics, or tobacco in any form, or as a
medical office, or as
a barber or manicure shop, or as an employment bureau without the express prior
written consent
of Landlord. Tenant shall not engage or pay any employees on the Premises
except those
actually working for such tenant on the Premises nor advertise for laborers
giving an address at
the Premises.



     13. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of liquor or
drugs, or who shall
in any manner do any act in violation of any of these Rules and Regulations.



     14. Tenant, its employees and agents shall not loiter in or on the entrances,
corridors,
sidewalks, lobbies, courts, halls, stairways, elevators, vestibules or any
Common Areas for the
purpose of smoking tobacco products or for any other purpose, nor in any way
obstruct such
areas, and shall use them only as a means of ingress and egress for the
Premises.



     15. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
Building’s heating
and air conditioning system, and shall refrain from attempting to adjust any
controls. Tenant
shall participate in recycling programs undertaken by Landlord.



     16. Tenant shall store all its trash and garbage within the interior of the
Premises. No
material shall be placed in the trash boxes or receptacles if such material is
of such nature that it
may not be disposed of in the ordinary and customary manner of removing and
disposing of trash
and garbage in San Francisco, California without violation of any law or
ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only
through entry-ways and



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elevators provided for such purposes at such times as Landlord shall
designate. If the Premises is or becomes infested with vermin as a result of the use
or any misuse or neglect of the Premises by Tenant, its agents, servants, employees,
contractors, visitors or licensees, Tenant shall forthwith, at Tenant’s expense,
cause the Premises to be exterminated from time to time to the satisfaction of
Landlord and shall employ such licensed exterminators as shall be approved in
writing in advance by Landlord.




     17. Tenant shall comply with all safety, fire protection and evacuation
procedures and
regulations established by Landlord or any governmental agency.



     18. No awnings or other projection shall be attached to the outside walls of the
Building without the prior written consent of Landlord, and no curtains, blinds,
shades or screens
shall be attached to or hung in, or used in connection with, any window or door
of the Premises
other than Landlord standard drapes. All electrical ceiling fixtures hung in
the Premises or
spaces along the perimeter of the Building must be fluorescent and/or of a
quality, type, design
and a warm white bulb color approved in advance in writing by Landlord. Neither
the interior
nor exterior of any windows shall be coated or otherwise sunscreened without the
prior written
consent of Landlord. Tenant shall be responsible for any damage to the window
film on the
exterior windows of the Premises and shall promptly repair any such damage at
Tenant’s sole
cost and expense. Tenant shall keep its window coverings closed during any
period of the day
when the sun is shining directly on the windows of the Premises. Prior to
leaving the Premises
for the day, Tenant shall draw or lower window coverings and extinguish all
lights. Tenant shall
abide by Landlord’s regulations concerning the opening and closing of window
coverings which
are attached to the windows in the Premises, if any, which have a view of any
interior portion of
the Building or Building Common Areas.



     19. Tenant hereby acknowledges that Landlord shall have no obligation to provide
guard service or other security measures for the benefit of the Premises, the
Building or the
Project. Tenant hereby assumes all responsibility for the protection of Tenant
and its agents,
employees, contractors, invitees and guests, and the property thereof, from acts
of third parties,
including keeping doors locked and other means of entry to the Premises closed,
whether or not
Landlord, at its option, elects to provide security protection for the Project
or any portion thereof.
Tenant further assumes the risk that any safety and security devices, services
and programs
which Landlord elects, in its sole discretion, to provide may not be effective,
or may malfunction
or be circumvented by an unauthorized third party, and Tenant shall, in addition
to its other
insurance obligations under this Lease, obtain its own insurance coverage to the
extent Tenant
desires protection against losses related to such occurrences. Tenant shall
cooperate in any
reasonable safety or security program developed by Landlord or required by law.



     
20. No auction, liquidation, fire sale, going-out-of-business or bankruptcy
sale shall
be conducted in the Premises without the prior written consent of Landlord.



     21. No tenant shall use or permit the use of any portion of the Premises
for living
quarters, sleeping apartments or lodging rooms.



     Landlord reserves the right at any time to change or rescind any one or more of
these Rules and Regulations, or to make such other and further reasonable Rules and
Regulations as in Landlord’s judgment may from time to time be necessary for the
management, safety, care and cleanliness of the Premises, Building, the Common Areas
and the Project, and for the preservation of good order therein, as well as for the
convenience of other occupants and tenants therein. Landlord may waive any one or
more of these Rules and Regulations for the benefit of any particular tenants, but
no such waiver by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of any other tenant, nor prevent Landlord from thereafter
enforcing any such Rules or Regulations against any or all tenants of the Project.
Tenant shall be deemed to have read these Rules and Regulations and to have agreed
to abide by them as a condition of its occupancy of the Premises.



EXHIBIT D




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EXHIBIT E




CHINA BASIN LANDING




FORM OF TENANT’S ESTOPPEL CERTIFICATE




     The undersigned as Tenant under that certain Office Lease (the “Lease”) made
and entered into as of
           
         , 200        
        
      by and between
       
             
as Landlord, and the undersigned
as Tenant, for Premises on the
            
                floor(s) of the office building located at
         
           
, San Francisco, California    
              
    , certifies as follows:



     1. Attached hereto as Exhibit A is a true and correct copy of the
Lease and all amendments and modifications thereto. The documents contained in
Exhibit A represent the entire agreement between the parties as to the Premises and
the project of which the Premises are a part.



     2. The undersigned currently occupies the Premises described in the Lease, the
Lease Term commenced on                      , and the Lease Term expires on                      , and the
undersigned has no option to terminate or cancel the Lease or to purchase all or
any part of the Premises, the Building and/or the Project.



     3. Base Rent became payable on                      .



     4. The Lease is in full force and effect and has not been modified, supplemented
or amended in any way except as provided in Exhibit A.



     5. Tenant has not transferred, assigned, or sublet any portion of the Premises
nor
entered into any license or concession agreements with respect thereto except
as follows:



     6. Tenant shall not modify the documents contained in Exhibit A without the
prior
written consent of Landlord’s mortgagee.



     7. All monthly installments of Base Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through                     . The
current monthly installment of Base Rent is $                    .



     8. All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default
thereunder. In
addition, the undersigned has not delivered any notice to Landlord regarding a
default by
Landlord thereunder.



     9. No rental has been paid more than thirty (30) days in advance and no
security has
been deposited with Landlord except as provided in the Lease.



     10. As of the date hereof, there are no existing defenses or offsets, to
the
undesigned’s knowledge, claims or any basis for a claim, that the
undersigned has against
Landlord.



     11. If Tenant is a corporation or partnership, each individual executing this
Estoppel
Certificate on behalf of Tenant hereby represents and warrants that Tenant is
a duly formed and
existing entity qualified to do business in California and that Tenant has
full right and authority
to execute and deliver this Estoppel Certificate and that each person signing
on behalf of Tenant
is authorized to do so.



     12. There are no actions pending against the undersigned or any guarantor of
the Lease under the bankruptcy or similar laws of the United States or any state.



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     13. Other than in compliance with all applicable laws and incidental to the ordinary
course of the use of the Premises, the undersigned has not used or stored any hazardous
substances in the Premises.



     14. To the undersigned’s knowledge, all tenant improvement work to be performed by
Landlord under the Lease has been completed in accordance with the Lease and has been
accepted by the undersigned and all reimbursements and allowances due to the undersigned
under the Lease in connection with any tenant improvement work have been paid in full.



     The undersigned acknowledges that this Estoppel Certificate may be delivered to Landlord or to
a prospective mortgagee or prospective purchaser, and acknowledges that said prospective mortgagee
or prospective purchaser will be relying upon the statements contained herein in making the loan or
acquiring the property of which the Premises are a part and that receipt by it of this certificate
is a condition of making such loan or acquiring such property.


Executed at                      on the ___ day of                     , 20___.




	 	 	 	 	 	 	 	 	 
	 	 	“Tenant”:	 	 
	 
	 	 	 	 	 	 	,	 
	 	 	 	 	 
	 

	 	a	 	 	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 





	 	 	 
	Exhibit F	 	CHINA BASIN LANDING
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