Exhibit 10.32


 


 


 


OFFICE LEASE


 


By And Between


 


MARRIOTT PLAZA ASSOCIATES L.P.,


A CALIFORNIA LIMITED PARTNERSHIP


(“LANDLORD”)


 


 


And


 


 


COMMERCEBID.Com


A DELAWARE CORPORATION


(“TENANT”)


 


2901 TASMAN DRIVE, SUITE 211


SANTA CLARA, CALIFORNIA 95054


 


 

















 


OFFICE LEASE


 


BASIC LEASE INFORMATION


 


	
  Date:

  	
   

  	
  August    ,
  1999

  
	
   

  	
   

  	
   

  
	
  Landlord:

  	
   

  	
  Marriott
  Plaza Associates L.P., a California limited partnership

  
	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
  COMMERCEBID.Com,
  a Delaware Corporation

  
	
   

  	
   

  	
   

  
	
  Premises:

  	
   

  	
  Suite 211,
  located on the second floor of the building located at 2901 Tasman Drive,
  Santa Clara, California.

  
	
   

  	
   

  	
   

  
	
  Base Year:

  	
   

  	
  1999

  
	
   

  	
   

  	
   

  
	
  Rentable
  Area of Premises:

  	
   

  	
  10,029
  square feet

  
	
   

  	
   

  	
   

  
	
  Tenant’s
  Percentage Share:

  	
   

  	
  10.02%

  
	
   

  	
   

  	
   

  
	
  Term:

  	
   

  	
  Five (5)
  years, beginning on the Term Commencement Date and expiring on the Term
  Expiration Date unless properly extended or renewed pursuant to any right
  granted in the Lease or any Addendum to the Lease.

  
	
   

  	
   

  	
   

  
	
  Term
  Commencement Date:

  	
   

  	
  October 1,
  1999, or as determined in accordance with Exhibit F.

  
	
   

  	
   

  	
   

  
	
  Term
  Expiration Date:

  	
   

  	
  September
  30, 2004, or as determined in accordance with Exhibit F.

  
	
   

  	
   

  	
   

  
	
  Base Rent:

  	
   

  	
  $25,072.50/per
  month, months 1-12

  $26,075.40/per month, months 13-24

  $27,078.30/per month, months 25-36

  $28,081.40/per month, months 37-48

  $29,084.10/per month, months 49-60

  
	
   

  	
   

  	
   

  
	
  Security
  Deposit:

  	
   

  	
  $87,252.30

  
	
   

  	
   

  	
   

  
	
  Tenant’s
  Required Liability Coverage:

  	
   

  	
  $2,000,000.00

  
	
   

  	
   

  	
   

  
	
  Tenant’s
  Address for Notices:

  	
   

  	
  2901 Tasman
  Drive, Suite 211 Santa Clara, CA 95054

  
	
   

  	
   

  	
   

  
	
  Landlord’s
  Address for Notices:

  	
   

  	
  c/o Menlo
  Equities LLC 525 University Avenue, Suite 100 Palo Alto, California 94301

  
	
   

  	
   

  	
   

  
	
  with a copy
  to:

  	
   

  	
  Menlo
  Equities Management Company LLC 2901 Tasman Drive, Suite 220 Santa Clara,
  California 95054

  
	
   

  	
   

  	
   

  
	
  Tenant’s/Procuring
  Broker:

  	
   

  	
  Cabot
  Templeton, Bristol Commercial Real Estate

  
	
   

  	
   

  	
   

  
	
  Parking:

  	
   

  	
  Thirty-two
  (32) non-exclusive spaces onsite

  
	
   

  	
   

  	
   

  
	
  Exhibits and
  Addenda:

  	
   

  	
  Exhibit A —
  Legal Description of the Property

  Exhibit B — Floor Plan of Suite

  Exhibit C — Rules and Regulations

  Exhibit D —Tenant Improvements

  Exhibit E — Form of Estoppel

  Exhibit F — Commencement Date Certificate

  



 


 


1

















 


Each reference in the Lease to
particular Basic Lease Information shall Incorporate the applicable Basic Lease
Information.  In the event of any
conflict between any Basic Lease Information and the Lease, the latter shall
control.


 


Each reference in the Lease to
particular Basic Lease Information shall Incorporate the applicable Basic Lease
Information.  In the event of any
conflict between any Basic Lease Information and the Lease, the latter shall
control.


 


LANDLORD:


 


MARRIOTT
PLAZA ASSOCIATES L.P.,


a California limited
partnership


 


	
  By:

  	
  Menlo
  Equities Associates IV LLC, a California Limited Liability Company,

  	 

	
   

  	
  Its General
  Partner

  	 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Menlo
  Equities LLC, a California Limited Liability Company,

  	 

	
   

  	
   

  	
  Its Manager

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
  [ILLEGIBLE]

  	 

	
   

  	
   

  	
  Its:

  	
     Member

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  Date:

  	
  8/30/99

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

						



 


TENANT:


 


COMMERCEBID.Com,


a Delaware corporation


 


	
  Signature:

  	
   /s/ NAOMI PETRUSHKA

  
	
  Name:

  	
  Naomi
  Petrushka

  
	
  Its:

  	
  CFO

  
	
   

  	
   

  
	
  Signature:

  	
   /s/ LIRON PETRUSHKA

  
	
  Name:

  	
  Liron
  Petrushka

  
	
  Its:

  	
  CEO

  
	
   

  	
   

  
	
  Date:

  	
  8/27/99

  



 


 


2

















 


OFFICE LEASE


 


                THIS LEASE, dated August 30, 1999, for
purposes of reference only, is made and entered into by and between MARRIOTT
PLAZA ASSOCIATES L.P., a California limited partnership (“Landlord”) and
COMMERCEBID.Com, a Delaware Corporate (“Tenant”).


 


WITNESSETH


 


                Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, the Premises described in Paragraph 1(b) below for
the term and subject to the terms, covenants, agreements and conditions
hereinafter set forth, to each and all of which Landlord and Tenant hereby
mutually agree.


 


                1.             DEFINITIONS.


 


                                Unless the context otherwise specifies or
requires, the following terms shall have the meanings herein specified:


 


                                (a)           The
term “Property” shall mean the parcel of real property the street address of
which is 2901 Tasman Drive, Santa Clara, California, and which is more
particularly described in Exhibit A attached hereto and made a part hereof, the
building, sidewalks, landscaping, and parking facilities constructed or to be
constructed thereon, and all other improvements on or appurtenances to the
parcel, subject to all easements, rights of way and encumbrances (collectively,
the “Building”). Notwithstanding any provision of this Lease to the contrary,
Landlord hereby reserves to itself and its designees all rights of access, use
and occupancy of the Building roof, and Tenant shall have no right of access, use
or occupancy of the Building roof.


 


                                (b)           The
term “Premises” shall mean the portion of the Building located on the floor(s)
specified in the Basic Lease Information which is outlined on the floor plan(s)
attached hereto as Exhibit B, and which is improved or to be improved with the
improvements described on Exhibit D attached hereto and made a part hereof.


 


                                (c)           The
term “Base Year” shall mean the calendar year specified in the Basic Lease
Information as the Base Year.


 


                                (d)           The
term “operating Expenses” shall mean:


 


                                                (i)            All
costs of management, operation, repair and maintenance of the Property,
including, without limitation; wages, salaries and payroll of employees;
property management fees, janitorial, repairs and maintenance, guard, parking,
and other services; rent or rental value of offices used in connection with the
management of the Property; power, water, waste disposal and other utilities
and services; materials and supplies; maintenance and repairs; costs for
licenses, permits and inspections, insurance premiums and the deductible
portion of any loss insured under Landlord’s liability insurance; costs for
accounting, legal and other professional services incurred in connection with
the operation of the Property and the calculation of Operating Expenses and
Property Taxes; the reasonable cost of contesting the validity or applicability
of any governmental enactments that may affect the Property; a reasonable
allowance for depreciation on machinery and equipment used to maintain the
Property and on other personal property used by Landlord in the Building; and
any other expense or charge, whether or not included herein, which in
accordance with general accounting and management practices would be considered
an expense of managing, operating, maintaining and repairing the Property.


 


                                                (ii)           The
cost of any capital improvements made to the Property by Landlord during or
after the Base Year, such cost or allocable portion thereof to be amortized
over such reasonable period as Landlord shall determine in accordance with
generally accepted accounting principles together with interest at a rate equal
to the greater of (a) 12%, or (b) the sum of that rate quoted by Wells Fargo
Bank, N.T. & S.A. from time to time as its prime rate (the “Prime Rate”),
plus two percent (2%) or (c) such higher rate as may have been paid by Landlord
on funds borrowed for the purpose of constructing such capital improvements or
performing any capital repairs and/or replacements (but in no event more than
the maximum rate of interest not prohibited or made usurious by Law).


 


                                                (iii)          If
less than 95% of the total rentable area of the Building is occupied during the
Base Year or any calendar year during the term of this Lease, then Operating
Expenses shall be adjusted to equal Landlord’s reasonable estimate of Operating
Expenses had such percentage of the total rentable area of the Building been
occupied.


 


                                (e)           The
term “Base Operating Expenses” shall mean the Operating Expenses defined in
Paragraph I (d) above that are paid or incurred by Landlord in the Base Year.


 


                                (f)            The
term “Property Taxes” shall mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all instruments of principal and interest required to pay
any general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership or new
construction), now or hereafter imposed by any governmental or
quasi-governmental authority or special district having the direct or indirect
power to tax or levy assessments, which are levied or assessed for whatever
reason against the Property or any portion thereof, or Landlord’s interest
herein, or the fixtures, equipment and other property of Landlord that is an
integral part of the Property and located thereon, or Landlord’s business of
owning, leasing or managing the Property or the gross receipts, income or
rentals from the Property, (ii) all charges, levied or fees imposed by any governmental
authority against Landlord by reason of or based upon the use of or number of
parking spaces within the Property, the amount


 


 


3

















 


of public services on public
utilities used or consumed (e.g. water, gas, electricity, sewage or waste water
disposal) at the Property, the number of person employed by Tenants of the
Property, the size (whether measured in area, volume, number of tenants or
whatever) or the value of the Property, or the type of use or uses conducted
within the Property, and all costs and fees (including attorneys’ fees)
reasonably incurred by Landlord in contesting any Property Tax and in
negotiating with public authorities as to any Property Tax. If, at any time
during the Lease Term, the taxation or assessment of the Property prevailing as
of the Term Commencement Date shall be altered so that in lieu of or in
addition to any the Property Tax described above there shall be levied, awarded
or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate,
substitute, or additional use or charge (i) on the value, size, use or
occupancy of the Property or Landlord’s interest therein or (ii) on or measured
by the gross receipts, income or rentals from the Property, or on Landlord’s
business of owning, leasing or managing the Property or (iii) computed in many
manner with respect to the operation of the Property, then any such tax or
charge, however designated, shall be included within the meaning of the terms
“Property Tax” or “Property Taxes” for purposes of this Lease. If any Property
Tax is partly based upon property or rents unrelated to the Property, then only
that part of such Property Tax that is fairly allocable to the Property shall
be included within the meaning of the terms “Property Tax” or “Property Taxes.”
Notwithstanding the foregoing, the terms “Property Tax” or “Property Taxes”
shall not include estate, inheritance, transfer, gift or franchise taxes of
Landlord or the federal or state income tax imposed on Landlord’s income from
all sources.


 


                                (g)           The
term “Base Property Taxes” shall mean the amount of Property Taxes paid or
accruing during the Base Year.


 


                                (h)           The
term “Rentable Area” shall mean the net rentable area specified in the Basic
Lease Information.


 


                                (i)            The
term “Common Areas” shall mean all areas in the Building and the Property (as
defined herein) not reserved for the exclusive use of Landlord, Tenant or any
other tenant, including without limitation, plazas, walkways, private roadways,
loading docks, parking areas, landscaped areas, and the areas devoted to
corridors, fire vestibules, stairways, elevator foyers, lobbies, electric and
telephone closets, rest rooms, mechanical rooms and other similar facilities
for the benefit of all tenants (or invitees) or servicing the Buildings as a
whole. Landlord reserves the right to make changes to the Common Area as it
deems necessary, provided Landlord shall not reduce the number of parking
spaces provided to Tenant pursuant to this Lease, Landlord reserves the right
to grant easements and access rights to others for use of the Common Areas and
shall not be liable to Tenant for any diminution in Tenant’s right to use the
Common Areas as a result.


 


                                (j)            The
term “Tenant’s Percentage Share” shall mean the percentage figure specified in
the Basic Lease Information. Landlord and Tenant acknowledge that Tenant’s
percentage share has been obtained by dividing the Rentable Area of the
Premises, as specified in the Basic Lease Information, by the total Rentable
Area of the Building, which Landlord and Tenant agree is 100,114 square feet,
and multiplying such quotient by 100. In the event the Rentable Area of the
Premises is increased or decreased, Tenant’s Percentage Share shall be
appropriately adjusted, and as to the calendar year in which such change
occurs, for the purposes of Paragraph 3 below Tenant’s Percentage Share shall
be determined on the basis of the number of days during such calendar year at
each such Percentage Share.


 


                                (k)           The
term “Private Restrictions” shall mean (as they may exist from time to time)
any and all covenants, conditions and restrictions, private agreements,
easements, and any other recorded documents or instruments affecting the use of
the Property, the Building, the Premises, or the Common Areas.


 


                                (j)            The
term “Law” shall mean any judicial decisions and any statute, constitution,
ordinance, resolution, regulation, rule, administrative order, or other
requirements of any municipal, county, state, federal, or other governmental
agency or authority having jurisdiction over the parties to this Lease, the
Premises, the Building or the Property, or any of them, in effect either at the
Term Commencement Date or at any time during the Lease Term, including, without
limitation, any regulation, order, or policy of any quasi-official entity or
body (e.g. a board of fire examiners or a public utility or special district).


 


                2.             TERM.


 


                                The term of this Lease shall commence and, unless
sooner terminated as hereinafter provided, shall end on the dates respectively
specified in the Basic Lease Information. If Landlord, for any reason
whatsoever beyond Landlord’s reasonable control, cannot deliver possession of
the Premises to Tenant at the commencement of the term, this Lease shall not be
void or voidable, nor shall Landlord be liable to Tenant for any loss or damage
resulting therefrom, but in that event, rental shall be waived for the period
between the commencement of the term and the time when Landlord can deliver
possession. In the event Tenant occupies any part of the Premises prior to the
Term Commencement Date, Tenant shall commence paying Base Rent as of such date
for the portion of the Premises occupied.


 


                3.             RENTAL.


 


                                (a)           Tenant
shall pay to Landlord throughout the term of this Lease as rental for the
Premises the sum specified in the Basic Lease Information as the Base Rent,
provided that the rental payable during each calendar year after the end of the
Base Year shall be the Base Rent, increased by Tenant’s Percentage Share of the
total dollar amount above or increase in, if any, Operating Expenses paid or
incurred by Landlord in such year over the Base Operating Expenses, and also
increased by Tenant’s Percentage Share of the total dollar amount above or
increase in, if any, Property Taxes paid by Landlord in such year over the Base
Property Taxes. The increased rental due pursuant to this Paragraph 3(a) is
hereinafter referred to as “Escalation Rent.”


 


 


4

















 


                                (b)           Rental
shall be paid to Landlord on or before the first day of the term hereof and on
or before the first day of each and every successive calendar month thereafter
during the term hereof. In the event the term of this Lease commences on a day
other than the first day of a calendar month or ends on a day other than the
last day of a calendar month, the monthly rental for the first and last
fractional months of the term hereof shall be appropriately prorated.


 


                                (c)           All
sums of money due to Landlord hereunder not specifically characterized as
rental shall constitute additional rent, and if any such sum is not paid at the
time provided in this Lease, it shall nonetheless be collectible as additional
rent at any time thereafter, including, without limitation on the date on which
the next installment of rental is due. Nothing contained herein shall be deemed
to suspend or delay the payment of any sum of money at the time it becomes due
and payable hereunder; or to limit any other remedy of Landlord.


 


                                (d)           Tenant
hereby acknowledges that late payment by Tenant to Landlord of rent and other
sums due hereunder will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges, which may be imposed on Landlord by the terms of any trust deed
covering the Premises. Accordingly, if any installment of rent or any other
sums due from Tenant shall not be received by Landlord when due or in the time
period provided herein, Tenant shall pay to Landlord a late charge equal to 5%
of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs. Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver to Tenant’s default with respect to such
overdue amount, nor prevent Landlord from exercising any of the other rights
and remedies granted hereunder.


 


                                (e)           Any
amount due to Landlord, if not paid when due, shall bear interest from the date
due until paid at the lower of (i) the rate of the Prime Rate plus 2% per
annum, and (ii) the highest rate legally permitted; provided that interest
shall not be payable on late charges incurred by Tenant nor on any amounts upon
which late charges are paid by Tenant to the extent such interest would cause
the total interest to be in excess of the then maximum rate of interest not
prohibited or made usurious by law until paid. Payment of interest shall not
excuse or cure any default hereunder by Tenant.


 


                                (f)            All
payments due from Tenant to Landlord shall be paid to Landlord, without
deduction or offset, in lawful money of the United States of America at
Landlord’s address for notices hereunder, or to such other person or at such
other place as Landlord may from time to time designate by notice to Tenant.


 


                4.             ESCALATION
RENT PAYMENTS.


 


                                Escalation Rent shall be paid monthly on an
estimated basis, with subsequent annual reconciliation, in accordance with the
following procedures.


 


                                (a)           During
December of the Base Year and December of each subsequent calendar year, or as
soon as practicable, Landlord shall give Tenant notice of its estimate of any
Escalation Rent due under Paragraph 3(a) above for the calendar year. On or
before the first day of each month during the calendar year, Tenant shall pay
to Landlord 1/12th of such estimated Escalation Rent, provided that if such notice
is not given in December Tenant shall continue to pay on the basis of the prior
year’s estimate until the month after such notice is given. If at any time or
times it appears to Landlord that the Escalation Rent for the current calendar
year will vary from its estimate by more than 5%, Landlord may, in its sole
discretion, by notice to Tenant, revise its estimate for such year, and
subsequent payments by Tenant for such year shall be based upon such revised
estimate.


 


                                (b)           Unless
Tenant shall dispute Landlord’s statement of Operating Expenses and Property
Taxes in accordance with its rights under Paragraph 4(d) below, within 90 days
after the close of each calendar year or as soon after such 90-day period as
practicable, Landlord shall deliver to Tenant a statement of the actual
Escalation Rent for such calendar year, accompanied by a statement showing the
Operating Expenses and Property Taxes on the basis of which the actual
Escalation Rent was determined. The statement shall be final and binding upon
Landlord and Tenant as the amount of the Operating Expenses and Property Taxes.
If Landlord’s statement discloses that Tenant owes an amount that is less than
the estimated payments for such calendar year previously made by Tenant,
Landlord shall credit such excess against the next payment of rental due from
Tenant hereunder. If Landlord’s statement discloses that Tenant owes an amount
that is more than the estimated payments for such calendar year previously made
by Tenant, Tenant shall pay the deficiency to Landlord within 30 days after
delivery of the statement.


 


                                (c)           The
amount of Escalation Rent for any fractional year in the term hereof shall be
appropriately prorated. The termination of this Lease shall not affect the
obligations of Landlord and Tenant pursuant to Paragraph 4(b) above to be
performed after such termination.


 


                                (d)           Tenant
shall have the right to dispute Landlord’s Statement of Operating Expenses and
Property Taxes by so notifying Landlord no later than 30 days after receipt of
same. If Tenant disputes such statement, Landlord shall provide Tenant with
reasonable verification of the figures shown on the statement and the parties
shall negotiate in good faith to resolve any disputes. If Landlord and Tenant
cannot agree, Tenant shall have the right to have a certified public accountant
approved by Landlord audit, at Tenant’s expense, at Landlord’s offices,
Landlord’s accounts and records relating to Operating Expenses and Property
taxes. If such audit reveals that landlord has overcharged Tenant, the amount
overcharged shall, at Landlord’s option, be paid to Tenant within 20 days after
the audit is concluded or be deducted from Tenant’s next payment(s) of rent. In
addition, if the statement overstates actual Operating Expenses and Real Property
Taxes by more than 10%, the cost of the audit shall be paid by Landlord. Any
objection by Tenant to Landlord’s statement and resolution of any dispute shall
not postpone the time for payment of any amounts due Landlord based on
Landlord’s statement or due under the Lease.


 


 


5

















 


                5.             SECURITY DEPOSIT.


 


                                Tenant has deposited with Landlord the amount
set forth in the Basic Lease Information as the “Security Deposit” as security
for the performance by Tenant of the terms of this Lease to be performed by
Tenant, and not as prepayment of rent. 
Landlord may apply such portion or portions of the Security Deposit as
are reasonably necessary for the following purposes: (i) to remedy and default
by Tenant in the payment of Base Rent or Escalation Rent or a late charge or
interest on defaulted rent, or any other monetary payment obligation of Tenant
under this Lease; (ii) to repair damage to the Premises, the Building or the
Common Areas caused or permitted to occur by Tenant; (iii) to clean and restore
and repair the Premises, the Building or the Common Areas following their
surrender to Landlord if not surrendered in the condition required pursuant to
the provisions of Paragraph 7, and (iv) to remedy any other default of Tenant
to the extent permitted by Law including, without limitation, paying in full on
Tenant’s behalf any sums claimed by materialman or contractors of Tenant to be
owing to them by Tenant for work done or improvements made at Tenant’s request
to the Premises.  In this regard, Tenant
herby waives any restriction on the uses to which the Security Deposit my be
applied as contained in Section 1950.7(c) of the California Civil Code and/or
any successor statute. In the event the Security Deposit or any portion thereof
is so used, Tenant shall pay to Landlord, promptly upon demand, an amount in
cash sufficient to restore the Security Deposit to the full original sum.  If Tenant fails to promptly restore the
Security deposit and if Tenant shall have paid to Landlord any sums as “Last
Month’s Prepaid Rent.”  Landlord may, in
addition to any other remedy Landlord my have under this Lease, reduce the
amount of Tenant’s Last Month’s Prepaid Rent by transferring all or portions of
such Last Month’s Prepaid Rent to Tenant’s Security Deposit until such Security
Deposit is restored to the amount set forth in the Basic Lease
Information.  Landlord shall not be
deemed a trustee of the Security Deposit. 
Landlord may use the Security Deposit in Landlord’s ordinary business
and shall not be required to segregate it form Landlord’s general
accounts.  Tenant shall not be entitled
to any interest on the Security Deposit. 
If Landlord transfers the Building or the Property during the Lease
Term, Landlord my pay the Security Deposit to any subsequent owner in
conformity with the provisions of Section 1950.7 of the California Civil Code
and/or any successor statute, in which event the transferring landlord shall be
released from all liability for the return of the Security Deposit.  Tenant specifically grants to Landlord (and
Tenant hereby waives the provisions of California Civil Code Section 1950.7 to
the contrary) a period of ninety days following a surrender of the Premises by
Tenant to Landlord with in which to inspect the Premises, make required
restorations and repairs, receive and verify workmen’s billings therefore, and
prepare a final accounting with respect to the Security Deposit.  In no event shall the Security Deposit or
any portion thereof, be considered prepaid rent.


 


                6.             USE.


 


                                Tenant shall be entitled to use the Premises
solely for office/research and development, sales, marketing and other related
uses and for no other use whatsoever. 
Tenant shall continuously and without interruption use the Premises for
such purpose for the entire Lease Term. 
Any discontinuance of such use for a period of sixty (60) consecutive
calendar days shall be, at Landlords election, a default by Tenant under the
terms of this Lease.  Tenant shall have
the right to use the Common Areas in conjunction with its permitted use of the
Premises solely for the purposes for which they were designed and intended and
for no other purposes whatsoever. 
Tenant shall not do or permit anything to be done in or about the
Premises, the Building, the Common Areas or the Property which does or could
(i) jeopardize the structural integrity of the Building or (ii) cause damage to
any part of the Premises, the Building, the Common Areas or the Property.  Tenant shall not operate any equipment
within the Premises which does or could (i) injure, vibrate or shake the
Premises or the Building, (ii) damage, overload or impair the efficient
operation of any electrical, plumbing, heating, ventilating or air conditioning
systems within or servicing the Premises or the Building, or (iii) damage or
impair the efficient operation of the sprinkler system (if any) within or
servicing the Premises or the Building. 
Tenant shall not install any equipment on or antennas or make any penetrations
of the exterior walls or roof of the Building. 
Tenant shall not affix any equipment to or make any penetrations or cuts
in the floor, ceiling, walls or roof of the Premises.  Tenant shall not place any loads upon the floors, walls, ceiling
or roof systems which could endanger the structural integrity of the Building
or damage its floors, foundations or supporting structural components.  Tenant shall not place any explosive,
flammable or harmful fluids or other waste materials in the drainage systems of
the Premises, the Building, the Common Areas or the Property.  Tenant shall not drain or discharge any
fluids in the landscaped areas or across the paved areas of the Property.  Tenant shall not use any of the Common Areas
for the storage of its materials, supplies, inventory or equipment and all such
materials, supplies, inventory or equipment shall at all times be stored within
the Premises.  Tenant shall not commit
nor permit to be committed any waste in or about the Premises, the Building,
the Common Areas or the Property.


 


                7.             SURRENDER OF POSSESSION.


 


                                Immediately prior to the expiration or upon
the sooner termination of this Lease, Tenant shall remove all Tenant’s signs
from the Building and shall remove all of Tenant’s equipment, trade fixtures,
furniture, supplies, wall decorations and other personal property from within
the Premises, the Building and the Common Areas, and shall vacate and surrender
the Premises, the Building, the Common Areas and the Property to Landlord in
the same condition, broom clean, as existed at the Term Commencement Date,
reasonable wear and tear excepted. 
Tenant shall repair all damage to the Premises, the exterior of the
Building and the Common Areas caused by Tenant’s removal of Tenant’s property.  Tenant shall patch and refinish, to
Landlord’s reasonable satisfaction, all penetrations made by Tenant or its
employees to the floor, walls or ceiling of the Premises, whether such
penetrations were made with Landlord’s approval or not.  Tenant shall repair or replace all stained
or damaged ceiling tiles, wall coverings and floor coverings to the reasonable
satisfaction of Landlord.  Tenant shall
repair all damage caused by Tenant to the exterior surface of the Building and
the paved surfaces of the Common Areas and where necessary, replace or
resurface same.  Additionally, Tenant
shall, upon the expiration or sooner termination of the Lease, remove any
improvements constructed or installed by Tenant (or by Landlord at Tenant’s
request) and repair all damage caused by such removal.  If the Premises, the Building, the Common
Areas and the Property are not surrendered to Landlord in the condition
required by this Paragraph at the expiration or sooner termination of


 


 


6

















 


this Lease, Landlord may, at
Tenant’s expenses, so remove Tenant’s signs, property and/or improvements not
so removed and make such repairs and replacements not so made or hire, at
Tenant’s Expense, independent contractors to perform such work.  Tenant shall be liable to Landlord for all
costs incurred by Landlord in returning the Premises, the Building and Common
Areas to the required condition, together with interest on all costs so
incurred from the date paid by Landlord at the then maximum rat of interest not
prohibited or made usurious by law until paid. 
Tenant shall pay Landlord the amount of all costs so incurred plus such
interest thereon, within ten (10) days of Landlord’s billing tenant for
same.  Tenant shall indemnify Landlord
against loss or liability resulting from delay by Tenant in surrendering the
Premises, including, without limitation, any claims made by any succeeding
Tenant or any losses to Landlord with respect to lost opportunities to lease to
succeeding tenants.


 


                8.             COMPLIANCE
WITH LEGAL REQUIREMENTS.


 


                                Tenant shall abide by and shall promptly
observe and comply with, at its sole cost and expense, all Laws and Private
Restrictions respecting the use and occupancy of the Premises, the Building,
the Common Areas, or the Property, and shall defend with competent counsel,
indemnify and hold Landlord harmless form any claims, damages or liability
resulting from Tenant’s failure to so abide, observe, or comply.  The indemnity provision of this Paragraph
shall survive the expiration or sooner termination of this Lease.


 


                9.             ENVIRONMENTAL REGULATIONS.


 


                                (a)           As
used herein, the term “Hazardous Materials” shall mean any toxic or hazardous
substance, material or waste or any pollutant or infectious or radioactive
material, including but not limited to those substances, materials or wastes regulated
now or in the future under any of the following statutes or regulations any and
all of those substances included within the definitions of “hazardous
substances,” “hazardous materials,” “hazardous waste,” “hazardous chemical
substance or mixture,” “imminently hazardous chemical substance or mixture,”
“toxic substances,” “hazardous air pollutant, “ toxic pollutant,” or “solid
waste” in the (a) Comprehensive Environmental Response, Compensation and
Liability Act of 1990 (“CERCLA” or “Superfund,”) as amended by Superfund
Amendments and Reauthorization Act of 1986 (“SARA”), 42 U.S.C. § 9601 et seq., (b) Resource Conservation and
Recovery Act of 1976 (“RCRA”), 42 U.S.C. § 6901 et seq., (c) Federal Water Pollution Control Act (“FSPCA”),
33 U.SC. § 1251 et seq., (d)
Clean Air Act (“CAA”), 42 U.S.C. § 7401 et
seq., (e) Toxic Substances Control Act (“TSCA”), 14 U.SC. § 2601 et seq., (f) Hazardous Materials
Transportation Act, 49 U.SC. § 1801 et seq.,
(g) Carpenter-Presley-Tanner Hazardous Substance Account Act (“California
Superfund”), Cal. Health & Safety Code § 25300 et seq., (h) California Hazardous Waste Control Act, Cal.
Health & Safety code § 25100 et seq.,
(i) Porter-Cologne Water Quality Control Act (“Porter-Cologne Act”), Cal. Water
Code § 13000 et seq., (j)
Hazardous Waste Disposal Land Use Law, Cal. Health & Safety codes § 25220 et seq., (k) Safe Drinking Water and Toxic
Enforcement Act of 1986 (“Proposition 65”), Cal. Health & Safety code §
252495 et seq., (l) Hazardous
Substances Underground Storage Tank Law, Cal. Health & Safety code § 25280 et seq., (m) Air Resources Law, Cal.
Health & Safety Code § 39000 et seq.,
and (n) regulations promulgated pursuant to said laws or any replacement
thereof, or as similar terms are defined in the federal, state and local laws,
statutes, regulations, orders or rules. 
Hazardous Materials shall also mean any and all other biohazardous
wastes and substances, materials and wastes which are, or in the future become,
regulated under applicable Laws for the protection of health or the
environment, or which are classified as hazardous or toxic substances,
materials or wastes, pollutants or contaminants, as defined, listed or
regulated by any federal, state or local law, regulation or order or by common
law decision, including , without limitation, (i) trichlorethylene,
tetrachloroethylene, perchloroethylene and other chlorinated solvents, (ii) any
petroleum products or fractions thereof, (iii) asbestos, (iv) polychlorinated
biphenyls, (v) flammable explosives, (vi) urea formaldehyde, (vii) radioactive
materials and waste, and (viii) materials and wastes that are harmful to or may
threaten human health, ecology or the environment.


 


                                (b)           Notwithstanding
anything to the contrary in this Lease, Tenant, at its sole cost, shall comply
with all Laws relating to the storage, use and disposal of Hazardous Materials
in, on or under the Property; provided,
however that Tenant shall not be responsible for contamination of
the Premises by Hazardous Materials existing as of the date the Premises are
delivered to Tenant (whether before or after the Term Commencement Date) unless
caused by Tenant.  Except for small
quantities of standard household or office products containing chemicals which
Tenant may use in conducting its business at the Premises so long as such use
is in compliance with all Laws, Tenant shall not store, use or dispose of any
Hazardous Materials except for those Hazardous Materials listed in Hazardous
Materials management plan (“HMMP’) which Tenant shall deliver to Landlord for
approval in advance of any such use, storage or disposal and update at least
annually with Landlord (once so approved by Landlord, the “Permitted
Materials”), which may be used, stored and disposed of provided (i) such
Permitted Materials are used, stored, transported, and disposed of in strict
compliance with applicable laws, (ii) such Permitted Materials shall be limited
to the materials listed on and may be used only in the quantities specified in
the HMMP, and (iii) Tenant shall provide Landlord with copies of all material
safety data sheets and other documentation required under applicable Laws in
connection with Tenant’s use of Permitted Materials as and when such
documentation is provided to any regulatory authority having jurisdiction, in no
event shall Tenant cause or permit to be discharged into the plumbing or sewage
system of the Building or onto the land underlying or adjacent to the Building
any Hazardous Material.  Tenant shall be
solely responsible for and shall defend, indemnify, and hold Landlord and its
agents harmless from and against all claims, costs and liabilities, including
attorneys’ fees and costs, arising our of or in connection with Tenant’s
storage, use and/or disposal of Hazardous Materials.  If the presence of Hazardous Materials on the Premises caused or
permitted by Tenant results in contamination or deterioration of water or soil,
then Tenant shall promptly take any and all action necessary to clean up such
contamination, but the foregoing shall in no event be deemed to constitute
permission by Landlord to allow the presence of such Hazardous Materials. At
any time prior to the expiration of the Lease Term if Tenant has a reasonable
basis to suspect that there has been any release or the presence of Hazardous
Materials in the ground or ground water on the Premises which did not exist
upon commencement of the Lease Term, Tenant shall have the right to conduct
appropriate tests of water and soil and to deliver to Landlord the results of
such tests to demonstrate that no contamination in excess of permitted levels
has occurred as a result of Tenant’s use of the Premises.  Tenant shall further be solely responsible
for, and shall


 


 


7

















 


defend, indemnify, and hold
Landlord and its agents harmless from and against all claims, costs and
liabilities, including attorneys’ fees and costs, arising out of or in
connection with any removal, cleanup and restoration work and materials
required hereunder to return the Premises and any other property of whatever
nature to their condition existing prior to the appearance of the Hazardous
Materials.  Tenant’s obligation
hereunder shall survive the expiration or earlier termination of the Lease.


 


                                (c)           Upon
termination or expiration of the Lease, Tenant at its sole expense shall cause
all Hazardous Materials placed in or about the Premises, the Building, the
Common Areas, the Property, and/or the Property by Tenant, its agents,
contractors, or invitees, and all installations (whether interior or exterior)
made by or on behalf of Tenant relating to the storage, use, disposal or
transportation of Hazardous Materials to be removed and transported for use,
storage or disposal in accordance and compliance with all Laws and other
requirements respecting Hazardous Materials used or permitted to be used by
Tenant.  Tenant shall apply for and
shall obtain from all appropriate regulatory authorities (including any
applicable fire department or regional water quality control board) all
permits, approvals and clearances necessary for the closure of the Building and
the Property, and shall take all other actions as may be required to complete
the closure of the Building and the Property. 
In addition, prior to vacating the Premises, Tenant shall undertake and
submit to Landlord an environmental site assessment from an environmental
consulting company reasonably acceptable to Landlord which site assessment
shall evidence Tenant’s compliance with this Paragraph 9.


 


                                (d)           At
any time prior to expiration of the Lease term, subject to reasonable prior
notice (not less than forty-eight (48) hours) and Tenant’s reasonable security
requirements and provided such activities do not unreasonably interfere with
the conduct of Tenant’s business at the Premises, Landlord shall have the right
to enter in and upon the Premises, Building, Common Areas and Property in order
to conduct appropriate tests of water and soil to determine whether levels of
any Hazardous Materials in excess of legally permissible levels has occurred as
a result of Tenant’s use thereof. 
Landlord shall furnish copies of all such test results and reports to
Tenant and, at Tenant’s option and cost, shall permit split sampling for
testing and analysis by Tenant.  Such
testing shall be at Tenant’s expense if Landlord has a reasonable basis for
suspecting and confirms the presence of Hazardous Materials in the soil or
surface or ground water in, on, under, or about the Premises, the Building, the
Common Areas, or the Property, which has been caused by or resulted from the
activities of Tenant, its agents, contractors, or invitees.


 


                                (e)           Landlord
may voluntarily cooperate in a reasonable manner with the efforts of all
governmental agencies in reducing actual or potential environmental
damage.  Tenant shall not be entitled to
terminate this Lease or to any reduction in or abatement of rent by reason of
such compliance or cooperation.  Tenant
agrees at all times to cooperate fully with the requirements and
recommendations of governmental agencies regulating, or otherwise involved in,
the protection of the environment.


 


                10.          NOTICES
AND CONSENTS.


 


                Any notice required or permitted to be given
under this Lease shall be in writing and (i) personally delivered, (ii) sent by
United States mail, registered or certified mail, postage prepaid, return
receipt requested, (iii) sent by Federal Express or similar nationally
recognized overnight courier service, or (iv) transmitted by facsimile with a
hard copy sent within one (1) business day by any of the foregoing means, and
in all cases addressed as follows, and such notice shall be deemed to have been
given upon the date of actual receipt or delivery (or refusal to accept
delivery) at the address specified in the Basic Lease Information (or such
other addresses as may be specified by notice in the foregoing manner) as
indicated on the return receipt or air bill. 
Tenant hereby appoints as its agent to receive the service of all
dispossessory or distraint proceedings and notices thereunder the person in
charge of or occupying the Premises at the time, and, if no person shall be in
charge of or occupying the same, then such service may be made by attaching the
same in the main entrance of the Premises.


 


                11.          BROKERAGE
COMMISSIONS.


 


                                Tenant represents, warrants and agrees that
it has not had any dealings with any real estate broker(s), leasing agents(s),
finders(s) or salesmen, other than the Procuring/Tenant Brokers (as named in
the Basic Lease Information) with respect to the lease by it of the Premises
pursuant to this Lease, and that it will indemnify, defend with competent
counsel, and hold Landlord harmless from any liability for the payment of any
real estate brokerage commissions, leasing commissions or finder’s fees claimed
by any other real estate broker(s), leasing agent(s), finder(s), or salesmen to
be earned or due and payable by reason of Tenant’s agreement or promise
(implied or otherwise) to pay (or to have Landlord pay) such a commission or
finder’s fee by reason of its leasing the Premises pursuant to this Lease.  The provisions of this Paragraph shall
survive the expiration or earlier termination of this Lease.


 


                12.          HOLDING
OVER.


 


                This Lease shall terminate without further
notice on the Lease Expiration Date (as set forth in the Basic Lease
Information).  Any holding over by
Tenant after expiration of the Term shall neither constitute a renewal nor
extension of this Lease nor give Tenant any rights in or to the Premises except
as expressly provided in this Paragraph. 
Any such holding over to which Landlord has consented shall be construed
to be a tenancy from month to month, on the same terms and conditions herein
specified insofar as applicable, except that the Base Rent shall be increased
to an amount equal to one hundred fifty percent (150%) of the Base Rent payable
during the last full month immediately preceding such holding over.  Tenant acknowledges that if Tenant holds
over without Landlord’s consent, such holding over may compromise or otherwise
affect Landlord’s ability to enter into new leases with prospective tenants
regarding the Premises.  Therefore, if
Tenant fails to surrender the Premises upon the expiration or termination of
this lease, in addition to any other liabilities to Landlord accruing
therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless
from and against all claims resulting from such failure,


 


 


8

















 


including, without limiting the
foregoing, any claims made by any succeeding tenant founded upon such failure
to surrender, and any losses suffered by Landlord, including lost profits,
resulting from such failure to surrender.


 


                13.          ADDITIONAL
OBLIGATIONS PAYABLE BY TENANT.


 


                                In addition to the monthly rental and other
charges to be paid by Tenant hereunder, Tenant shall pay or reimburse Landlord
for any and all of the following items when due (hereinafter collectively
referred to as “Additional Obligations”), whether or not now customary or in
the contemplation of the parties hereto: taxes other than local, state and
federal personal or corporate income taxes measured by the net income of
Landlord from all sources, assessments including, without limitation, all
assessments for public improvements, services or benefits, irrespective of when
commenced or completed, excises, levies, business taxes, license, permit,
inspection and other authorization fees, transit development fees, assessments
or charges for housing funds, service payments in lieu of taxes and any other
fees or charges of any kind, which are levied, assessed, confirmed or imposed
by any public authority.  In the event
that it shall not be lawful for Tenant to reimburse Landlord for the Additional
Obligations but it is lawful to increase the monthly rental to take into
account Landlord’s payment of the Additional Obligations, the monthly rental
payable to Landlord shall be revised to net Landlord the same net return
without reimbursement of the Additional Obligations as would have been received
by Landlord with reimbursement of the Additional Obligations.


 


                14.          ALTERATIONS.


 


                                (a)           Tenant
shall not make any alterations to or modifications of the Premises or construct
any improvements within the Premises until Landlord shall have first approved,
in writing, the plans and specifications therefor, which approval may be withheld
in Landlord’s sole discretion.  All such
modifications, alterations or improvements, once so approved, shall be made,
constructed or installed by Tenant at Tenant’s expense (including all permit
fees and governmental charges related thereto), using a licensed contractor
first approved by Landlord, in substantial compliance with the
Landlord-approved plans and specifications therefor.  All work undertaken by Tenant shall be done in accordance with
all Laws and in a good and workmanlike manner using new or like-new materials
of good quality.  Tenant shall not
commence the making of any such modifications or alterations or the
construction of any such improvements until (i) all required governmental
approvals and permits shall have been obtained, (ii) all requirements regarding
insurance imposed by this Lease have been satisfied, (iii) Tenant shall have
given Landlord at lease five business days prior written notice of its
intention to commence such work so that Landlord may post and file notices of
non-responsibility, and (iv) if requested by Landlord, Tenant shall have
obtained contingent liability and broad form builder’s risk insurance in an
amount satisfactory to Landlord in its reasonable discretion to cover any
perils relating to the proposed work not covered by insurance carried by Tenant
pursuant to Paragraph 20.  In no event
shall Tenant make any modification, alterations or improvements whatsoever to
the Common Areas or the exterior or structural components of the Building
including, without limitation, any cuts or penetrations in the floor, roof or
exterior walls of the Premises.  As used
in this Paragraph, the term “modifications, alterations and/or improvements”
shall include, without limitation, the installation of additional electrical
outlets, overhead lighting fixtures, drains, sinks, partitions, doorways, or
the like.


 


                                (b)           All
modifications, alterations and improvements made or added to the Premises by
Tenant (other than Tenant’s inventory, equipment, movable furniture, wall
decorations and trade fixtures) shall be deemed real property and a part of the
Premises, but shall remain the property of Tenant during the Lease.  Any such modifications, alterations or
improvements, once completed shall not be altered or removed from the Premises
during the Lease Term without Landlord’s written approval first obtained in
accordance with the provisions of Paragraph 14(a) above. At the expiration or
sooner termination of this Lease, all such modifications, alterations and
improvements other than Tenant’s inventory, equipment, movable furniture, wall
decorations and trade fixtures, shall automatically become the property of
Landlord and shall be surrendered to Landlord as part of the Premises as
required pursuant to Paragraph 7, unless Landlord shall require Tenant to
remove any of such modifications, alterations or improvements in accordance
with the provisions of Paragraph 7, in which case Tenant shall so remove
same.  Landlord shall have no
obligations to reimburse Tenant for all or any portion of the cost or value of
any such modifications, alterations, or improvements so surrendered to
Landlord.  All modifications,
alterations or improvements which are installed or constructed on or attached
to the Premises by Landlord and/or at Landlord’s expense shall be deemed real
property and a part of the Premises and shall be property of Landlord.  All lighting, plumbing, electrical, heating,
ventilating and air conditioning fixtures, partitioning, window coverings, wall
coverings and floor coverings installed by Tenant shall be deemed improvements
to the Premises and not trade fixtures of Tenant.


 


                                (c)           Tenant
shall make all modifications, alterations and improvements to the Premises, at
its sole cost, that are required by any Law because of (i) Tenant’s use or occupancy
of the Premises, the Building, the Common Areas or the Property, (ii) Tenant’s
application for any permit or governmental approval, or (iii) Tenant’s making
of any modifications, alterations or improvements to or within the Premises.  If Landlord shall, at any time during the
Lease Term, be required by any governmental authority to make any
modifications, alterations or improvements to the Building or the Property, the
cost incurred by Landlord in making such modifications, alterations or
improvements, including interest at a rate equal to the greater of (a) 12%, or
(b) the sum of that rate quoted by Wells Fargo Bank, N.T. & S.A. from time
to time as its prime rate, plus two percent (2%) (“Wells Prime Plus Two”) (but
in no event more than the maximum rate of interest not prohibited or made
usurious by Law), shall be amortized by Landlord over the useful life of such
modifications, alterations or improvements, as determined in accordance with
generally accepted accounting principles, and the monthly amortized cost of
such modifications, alterations and improvements as so amortized shall be
included in Operating Expenses.


 


                                (d)           So
long as Tenant is in occupancy of the entire Premises, Tenant, at its sole cost
and expense, shall have the right to install a business identification sign on
one-quarter of the available signage on the


 


 


9

















 


concrete monument sign for the
Building.  Any such sign shall be
subject to Landlord’s prior written consent as to design, location and
materials.


 


                15.          REPAIRS.


 


                                By entry hereunder Tenant accepts the
Premises as being in the condition in which Landlord is  obligated to deliver the Premises.  Tenant shall, at all times during the term
hereof, and at Tenant’s sole cost and expense, keep the Premises in good
condition and repair, ordinary wear and tear, damage thereto by fire,
earthquake, act of God or the elements excepted.  Tenant herby waives all rights to make repairs at the expense of
Landlord or in lieu thereof to vacate the Premises.  Tenant shall at the end of the term hereof surrender to Landlord
the Premises and all alterations thereto in the good and clean condition,
ordinary wear and tear and damage by fire, earthquake, act of God or the
elements excepted.  Landlord has no
obligation and has made no promise to alter, remodel, improve, repair, decorate
or paint the premises or any part thereof, except as specifically herein set
forth.  No representations or warranties
respecting the condition of the Premises or the Building have been made by
Landlord to Tenant, except as specifically herein set forth.


 


                16.          LIENS.


 


                                Tenant shall keep the Premises and the
Building free from any liens arising out of any work performed, materials
furnished or obligations incurred by Tenant. 
Landlord shall have the right to post and keep posted on the Premises
any notices that may be provided by law or which Landlord may deem to be proper
for the protection of Landlord, the Premises and the Building from such
liens.  In the event any such lien
attaches to the Premises or the Property, and Tenant does not cause the same to
be released by payment, bonding or otherwise, within ten (10) days after the
attachment thereof, Landlord shall have the right but not the obligation to
cause the same to be release by such means as it shall deem proper, and any
sums expended by Landlord in connection therewith shall be payable by Tenant on
demand with interest thereon from the date of expenditure by Landlord at the
rate specified in Paragraph 3(e). 
Landlord and Tenant each hereby warrant to use best efforts to notify
the other of the existence or attachment of any and all liens contemplated
under this Paragraph 15 within five (5) business days of Landlord’s or Tenant’s
actual knowledge of such lien(s).


 


                17.          ENTRY
BY LANDLORD.


 


                                Landlord, upon reasonable notice to Tenant,
may enter the Premises at reasonable hours to (a) inspect the same; (b) exhibit
the same to prospective purchasers, lenders or tenants; (c) determine whether
Tenant is complying with all its obligations hereunder; (d) supply janitor
service and any other service to be provided by Landlord to Tenant hereunder;
(e) post notices of non-responsibility; and (f) make repairs or perform
maintenance required of Landlord under the terms hereof, make repairs to any
adjoining space or utility services, or make repairs, alterations or
improvements to any other portion of the Building.  Landlord shall at all times have and retain a key with which to
unlock all of the doors in, on or about the Premises excluding Tenant’s vaults,
safes and similar areas designated in writing by Tenant in advance; and
Landlord shall have the right to use any and all means which Landlord may deem
proper to open Tenant’s doors in any emergency in order to obtain entry to the Premises,
and any entry to the Premises obtained by Landlord in a real or perceived
emergency shall not be construed or deemed to be a forcible or unlawful entry
into or a detainer of the Premises or an eviction, actual or constructive, of
Tenant from the Premises or any portion thereof.


 


                18.          SERVICES.


 


                                (a)           Landlord
shall maintain the Common Areas and public areas of the Property, including
lobbies, stairs, elevators, corridors and restrooms, all exterior landscaping,
the windows in the Building, the mechanical, plumbing and electrical equipment
serving the Building, and the structure itself in reasonably good order and
condition, except for damage occasioned by the act or omission of Tenant, its
employees, contractors, agents or invitees which damage shall be repaired by
Landlord at Tenant’s expense.


 


                                (b)           Landlord
shall cause to be furnished (1) electricity for lighting and the operation of
office equipment, on a 24-hours basis, with power usage in excess of the time
allowance referred to in Paragraph 18(d) below to be at Tenant’s cost, (2) heat
and air conditioning to the extent reasonably required for the comfortable
occupancy by Tenant in its use of the Premises during the period from 7:00 am
to 6:00 pm on weekdays excluding holidays, or as set forth in the Rules and
Regulations, which may be changed from time to time, or such shorter periods as
may be prescribed by any applicable policies or regulations adopted by any
utility or governmental agency, (3) elevator service, (4) lighting replacement
for building standard lights, (5) restroom supplies, (6) window washing with
reasonable frequency, (7) water for lavatory and drinking purposes, and (8)
security patrol services and janitor service during the times and in the manner
that such services are customarily furnished in comparable office buildings in
the area; provided that in no event shall Landlord be obligated to furnish
janitor service on Saturdays, Sundays, or legal holidays.  Landlord may establish reasonable measures
to conserve energy, including but not limited to, automatic switching of lights
after hours and more efficient forms of lighting, so long as such measures do
not unreasonably interfere with Tenant’s use of the Premises.  Landlord shall not be in default hereunder
or be liable for any damages directly or indirectly resulting from, nor shall
the rental herein reserved by abated by reason of (i) the installation, use or
interruption of use of any equipment in connection with the furnishing of any
of the foregoing services, (ii) failure to furnish or delay in furnishing any
such services when such failure or delay is caused by accident or any condition
beyond the control of Landlord or by the making of necessary repairs or
improvements to the Premises or to the Building, or (iii) the limitation,
curtailment, rationing or restrictions on use of water, electricity, gas or any
other form of energy serving the Premises or the Building.  Tenant herby waives the provisions of
California Civil Code Section 1932 or any other applicable existing or future
law or ordinance or governmental regulation permitting the termination of this
Lease due to any interruption, failure or inability to provide Landlord
services as provided for herein.


 


 


10

















 


                                (c)           Tenant
shall reimburse Landlord, upon billing therefor, for the cost of all heat or
air conditioning provided to the Premises during hours required by Tenant when
such services are not otherwise furnished by Landlord pursuant to Paragraph
18(b) above.  The cost of such after
hours heat or air conditioning shall be a per-hour charge reflecting the
electrical energy, labor and fixed plant costs of running the heating and air
conditional system which per hour charge shall be fifteen dollars ($15.00).  In the event that Landlord has reasonable
cause to believe that the cost of after hours heating, air conditioning and
electricity used by Tenant is exceeding the per hour charge, Landlord may at
its option install separate meter(s) for the Premises, or portions thereof, at
Tenant’s sole expense, and Tenant thereafter shall pay all charges of the
utility providing service.


 


                                (d)           In
the event that Landlord, at Tenant’s request, provides services to Tenant that
are (i) in excess of those services required to maintain “Building Standard
Improvements,” or (ii) are not otherwise provided for in this Lease, Tenant
shall pay Landlord’s reasonable charges for such services upon billing
therefor.


 


                19.          INDEMNIFICATION
AND LIMITATION OF LANDLORD’S LIABILITY.


 


                (a)           Tenant
shall defend with competent counsel satisfactory to Landlord any claims made or
legal actions filed or threatened against Landlord with respect to the
violation of any Law, or the death, bodily injury, personal injury, property
damage, or interference with contractual or property rights suffered by any
third party occurring within the Premises or resulting from Tenant’s use or
occupancy of the Premises, the Building or the Common Areas, or resulting from
Tenant’s activities in or about the Premises, the Building, the Common Areas or
the Property, and Tenant shall indemnify and hold Landlord, Landlord’s
partners, principals, members, employees, agents and contractors harmless from
any loss liability, penalties or expense whatsoever (including any loss
attributable to vacant space which otherwise would have been leased, but for
such activities) resulting therefrom, except to the extent proximately caused
by the active negligence or willful misconduct of Landlord.  This indemnity agreement shall survive the
expiration or sooner termination of this Lease.


 


                (b)           Landlord
shall not be liable to Tenant for, and Tenant herby releases Landlord and its
partners, principals, members, officers, agents, employees, lenders, attorneys
and consultants from any and all liability, whether in contract, tort or on any
other basis, for any injury to or any damage sustained by Tenant, Tenant’s
agents, employees, contractors or invitees, any damage to Tenant’s property, or
any loss to Tenant’s business, loss of Tenant’s profits or other financial loss
of Tenant resulting from or attributable to the condition of, the management
of, the repair or maintenance of, the protection of, the supply of services or
utilities to, the damage in or destruction of the Premises, the Building, the
Property or the Common Areas, including without limitation (i) the failure,
interruption, rationing or other curtailment or cessation in the supply of
electricity, water, gas or other utility service to the Property, the Building
or the Premises, (ii) the vandalism or forcible entry into the Building or the
Premises; (iii) the penetration of water into or onto any portion of the
Premises; (iv) the failure to provide security and/or adequate lighting in or
about the Property, the Building or the Premises, (v) the existence of any
design or construction defects within the Property, the Building or the
Premises, (vi) the failure of any mechanical systems to function property (such
as the HVAC systems); (vii) the blockage of access to any portion of the
Property, the Building or the Premises, except that Tenant does not so release
Landlord from such liability to the extent such damage was proximately caused
by Landlord’s active negligence, willful misconduct, or Landlord’s failure to
perform an obligation expressly undertaken pursuant to this Lease after a
reasonable period of time shall have lapsed following receipt of written notice
from Tenant to so perform such obligation. 
In this regard, Tenant acknowledges that it is fully apprised of the
provisions of Law relating to releases, and particularly to those provisions
contained in Section 1542 of the California Civil Code which reads as follows:


 


“A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.”


 


Notwithstanding such statutory
provision, and for the purpose of implementing a full and complete release and
discharge, Tenant herby (i) waives the benefit of such statutory provision and
(ii) acknowledges that, subject to the exceptions specifically set forth
herein, the release and discharge set forth in this Paragraph is a full and
complete settlement and release and discharge of all claims and is intended to
include in its effect, without limitation, all claims which Tenant, as of the
date hereof, does not know of or suspect to exist in its favor.


 


                20.          INSURANCE
AND SUBROGATION.


 


                (a)           Tenant
shall maintain insurance complying with all of the following:


 


                (i)            Tenant
shall procure, pay for and keep in full force and effect, at all times during
the Lease Term, the following:


 


                                (1)           Comprehensive
general liability insurance insuring Tenant against liability for personal
injury, bodily injury, death and damage to property occurring with the
Premises, or resulting from Tenant’s use or occupancy of the Premises, the
Building, the Common Areas or the Property, or resulting from Tenant’s
activities in or about the Premises or the Property, with coverage in an amount
equal to Tenant’s Required Liability Coverage (as set forth in Basic Lease
Information), which insurance shall contain “blanket contractual liability” and
“broad form property damage” endorsements insuring Tenant’s performance of
Tenant’s obligations to indemnify Landlord as contained in this Lease.


 


                                (2)           Fire
and property damage insurance in so-called “fire and extended coverage” form
insuring Tenant against loss from physical damage to Tenant’s personal
property, inventory, trade fixtures and improvements within the Premises with
coverage for the full actual replacement cost thereof.


 


 


11

















 


                                (3)           Business
Income/Extra Expense Insurance sufficient to pay Base Rent and Escalation Rent
for a period of not less than twelve (12) months;


 


                                (4)           Plate
glass insurance, at actual replacement cost;


 


                                (5)           Boiler
and Machinery insurance, if applicable, in limits sufficient to restore the
Building;


 


                                (6)           Product
liability insurance (including, without limitation, if food and/or beverages
are distributed, sold and/or consumed within the Premises, to the extent
obtainable, coverage for liability arising out of the distribution, sale, use
or consumption of food and/or beverages (including alcoholic beverages, if applicable)
at the Premises for not less than Tenant’s Required Liability Coverage (as set
forth in Basic Lease Information);


 


                                (7)           Workers’
compensation insurance (statutory coverage) with Employer’s Liability in an
amount no less than $1,000,000; and


 


                                (8)           With
respect to making of any alterations or modifications or the construction of
improvements or the like undertaken by Tenant, course of construction,
commercial general liability, automobile liability and workers’ compensation
(to be carried by Tenant’s contractor), in an amount and with coverage
reasonably satisfactory to Landlord.


 


                (ii)           Each
policy of liability insurance required to be carried by Tenant pursuant to this
Paragraph or actually carried by Tenant with respect to the Premises or the
Property: (i) shall, except with respect to insurance required by subparagraph
(a)(7) above, name Landlord, and such others as are designated by Landlord, as
additional insureds; (ii) shall be primary insurance providing that the insurer
shall be liable for the full amount of the loss, up to and including the total
amount of liability set forth in the declaration of coverage, without the right
of contribution from or prior payment by any other insurance coverage of
Landlord; (iii) shall be in a form satisfactory to Landlord; (iv) shall be
carried with companies reasonably acceptable to Landlord with Best’s ratings of
at least A and XI; (v) shall provide that such policy shall not be subject to
cancellation, lapse or change except after at least thirty (30) days prior
written notice to Landlord, and (vi) shall contain a so-called “severability”
or “cross liability” endorsement.  Each
policy of property insurance maintained by Tenant with respect to the Premises
or the Property or any property therein (i) shall provide that such policy
shall not be subject to cancellation, lapse or change except after at least
thirty (30) days prior written notice to Landlord and (ii) shall contain a
waiver and/or a permission to waive by the insurer of any right of subrogation
against Landlord, its partners, principals, members, officers, employees,
agents and contractors, which might arise by reason of any payment under such
policy or by reason of any act or omission of Landlord, its partners,
principals, members, officers, employees, agents and contractors.


 


                (iii)          Prior
to the time Tenant or any of its contractors enters the Premises, Tenant shall
deliver to Landlord, with respect to each policy of insurance required to be
carried by Tenant pursuant to this Paragraph, a copy of such policy
(appropriately authenticated by the insurer as having been issued, premium
paid) or a certificate of the insurer certifying in form satisfactory to
Landlord that a policy has been issued, premium paid, providing the coverage
required by this Paragraph and containing the provisions specified herein.  With respect to each renewal or replacement
of any such insurance, the requirements of this Paragraph must be complied with
not less than thirty (30) days prior to the expiration or cancellation of the policies
being renewed or replaced.  Landlord
may, at any time and from time to time, inspect and/or copy any and all
insurance policies required to be carried by Tenant pursuant to this Paragraph.  If Landlord’s Lender insurance broker,
advisor or counsel reasonably determines at any time that the amount of
coverage set forth herein for any policy of insurance Tenant is required to
carry pursuant to this Paragraph is not adequate, then Tenant shall increase
the amount of coverage for such insurance to such greater amount as Landlord’s
Lender, insurance broker, advisor or counsel reasonably deems adequate.


 


                                (b)           With
respect to insurance maintained by Landlord.


 


                                (i)            Landlord
shall maintain, as the minimum coverage required of it by this Lease, fire and
property damage insurance in so-called “fire and extended coverage” form
insuring Landlord (and such others as Landlord may designate) against loss from
physical damage to the Building with coverage of not less than one hundred
percent (100%) of the full actual replacement cost thereof and against loss of
rents for a period of not less than six months.  Such fire and property damage insurance, at Landlord’s election
but without any requirements on Landlord’s behalf to do so, (i) may be written
in so-called “all risk” form, excluding only those perils commonly excluded
from such coverage by Landlord’s then property damage insurer; (ii) may provide
coverage for physical damage to the improvements so insured for up to the
entire full actual replacement cost thereof; (iii) may be endorsed to cover
loss or damage caused by any additional perils against which Landlord may elect
to insure including earthquake and/or flood; and/or (iv) may provide coverage
for loss of rents for a period of up to twelve months.  Landlord shall not be required to cause such
insurance to cover any of Tenant’s personal property, inventory, and trade
fixtures, or any modifications, alterations or improvements made or constructed
by Tenant to or within the Premises. 
Landlord shall use commercially reasonable efforts to obtain such
insurance at competitive rates.


 


                                (ii)           Landlord
shall maintain commercial general liability insurance insuring Landlord (and
such others as are designated by Landlord) against liability for personal
injury, bodily injury, death, and damage to property occurring in, on or about,
or resulting from the use or occupancy of the Property, or any portion thereof,
with combined single limit coverage of at least Three Million Dollars
($3,000,000).  Landlord may carry such
greater coverage as Landlord or Landlord’s Lender, insurance broker, advisor or
counsel may from time to time determine is reasonably necessary for the
adequate protection of Landlord and the Property.


 


                                (iii)          Landlord
may maintain any other insurance which in the opinion of its insurance broker,
advisor or legal counsel is prudent in carry under the given circumstances,
provided such insurance is commonly carried by owners of property similarly
situated and operating under similar circumstances.


 


 


12

















 


                (c)           Landlord
hereby releases Tenant, and Tenant hereby releases Landlord and its respective
partners, principals, members, officers, agents, employees and servants, from
any and all liability for loss, damage or injury to the property of the other
in or about the Premises or the Property which is caused by or results from a
peril or event or happening which is covered by insurance actually carried and
in force at the time of the loss by the party sustaining such loss; provided, however, that such waiver shall
be effective only to the extent permitted by the insurance covering such loss
and to the extent such insurance is not prejudiced thereby.


 


                21.          DAMAGE
OR DESTRUCTION.


 


                (a)           If the Premises, the Building or the
Common Areas are damaged by any peril after the Effective Term Commencement
Date, Landlord shall restore the same, as and when required by this Paragraph,
unless this Lease is terminated by Landlord pursuant to Paragraph 21(c) or by
Tenant pursuant to Paragraph 21(d).  If
this Lease is not so terminated, then upon the issuance of all necessary
governmental permits, Landlord shall commence and diligently prosecute to
completion the restoration of the Premises, the Building or the Common Areas,
as the case may be, to the extent then allowed by law, to substantially the
same condition in which it existed as of the Term Commencement Date.  Landlord’s obligation to restore shall be
limited to the improvements constructed by Landlord.  Landlord shall have no obligation to restore any improvements
made by Tenant to the Premises or any of Tenant’s personal property, inventory
or trade fixtures.  Upon completion of
the restoration by Landlord, Tenant shall forthwith replace or fully repair all
of Tenant’s personal property, inventory, trade fixtures and other improvements
constructed by Tenant to like or similar conditions as existed at the time
immediately prior to such damage or destruction.


 


                (b)           All
insurance proceeds available from the fire and property damage insurance
carried by Landlord shall be paid to and become the property of Landlord.  If this Lease is terminated pursuant to
either Paragraph 21(c) or 21(d), all insurance proceeds available from
insurance carried by Tenant which cover loss of property that is Landlord’s
property or would become Landlord’s property on termination of this Lease shall
be paid to and become the property of Landlord, and the remainder of such
proceeds shall be paid to and become the property of Tenant.  If this Lease is not terminated pursuant to
either Paragraph 21(c) or 21(d), all insurance proceeds available from
insurance carried by Tenant which cover loss to property that is Landlord’s
property shall be paid to and become the property of Landlord, and all proceeds
available from such insurance which cover loss to property which would only
become the property of Landlord upon the termination of this Lease shall be
paid to and remain the property of Tenant. 
The determination of Landlord’s property and Tenant’s property shall be
made pursuant to Paragraph 14(b).


 


                (c)           Landlord’s Right To Terminate.  Landlord shall have the option to terminate
this Lease in the event any of the following occurs, which option may be
exercised only by delivery to Tenant of a written notice of election to
terminate within thirty (30) days after the date of such damage or destruction.


 


                                (i)            The
Building is damaged by any peril covered by valid and collectible insurance
actually carried by Landlord and in force at the time of such damage or
destruction (an “insured peril”) to such an extent that the estimated cost to
restore the Building exceeds the lesser of (i) the insurance proceeds available
from insurance actually carried by Landlord, or (ii) fifty percent of the then
actual replacement cost thereof;


 


                                (ii)           The
Building is damaged by an uninsured peril, which peril Landlord was not
required to insure against pursuant to the provisions of Paragraph 20 of this
Lease.


 


                                (iii)          The
Building is damaged by any peril and, because of the laws then in force, the
Building (i) cannot be restored at reasonable cost or (ii) if restored, cannot
be used for the same use being made thereof before such damage.


 


                (d)           If
the Premises, the Building or the Common Areas are damaged by any peril and
Landlord does not elect to terminate this Lease or is not entitled to terminate
this Lease pursuant to this Paragraph, then as soon as reasonably practicable,
Landlord shall furnish Tenant with the written opinion of Landlord’s architect
or construction consultant as to when the restoration work required of Landlord
may be complete.  Tenant shall have the
option to terminate this Lease in the event any of the following occurs, which
option may be exercised only by delivery to Landlord of a written notice of
election to terminate within seven (7) days after Tenant receives from Landlord
the estimate of the time needed to complete such restoration;


 


                (i)            If
the time estimated to substantially complete the restoration exceeds twelve
months from and after the date the architect’s or construction consultant’s
written opinion is delivered; or


 


                (ii)           If
the damage occurred within twelve (12) months of the last day of the Lease Term
and the time estimated to substantially complete the restoration exceeds one
hundred eighty days from and after the date such restoration is commenced.


 


                (e)           Landlord
and Tenant agree that the provisions of Paragraph 21(d) above are intended to
supersede and replace the provisions contained in California Civil Code,
Section 1932, Subdivision 2, and California Civil Code, Section 1934, and
accordingly, Tenant hereby waives the provisions of such Civil Code Sections
and the provisions of any successor Civil Code Sections or similar laws
hereinafter enacted.


 


                (f)            In
the event of damage to the Premises which does not result in the termination of
this Lease, the Base Rent (and any Escalation Rent) shall be temporarily abated
during the period of restoration in proportion in the degree to which Tenant’s
use of the Premises is impaired by such damage.


 


 


13

















 


                22.          EMINENT
DOMAIN.


 


                (a)           Except
as otherwise provided in Paragraph 22(d) below regarding temporary takings,
Tenant shall have the option to terminate this Lease if, as a result of any
taking, (i) all of the Premises is taken, or (ii) twenty-five percent (25%) or
more of the Premises is taken and the part of the Premises that remains cannot,
within a reasonable period of time, be made reasonably suitable for the
continued operation of Tenant’s business. 
Tenant must exercise such option within a reasonable period of time, to
be effective on the later to occur of (i) the date that possession of that
portion of the Premises that is condemned is taken by the condemnor or (ii) the
date Tenant vacated the Premises.


 


                (b)           Except
as otherwise provided in Paragraph 22(d) below regarding temporary takings,
Landlord shall have the option to terminate this Lease if, as a result of  any taking, (i) all of the Premises is
taken, (ii) twenty-five percent (25%) or more of the Premises is taken and the
part of the Premises that remains cannot, within a reasonable period of time,
be made reasonably suitable for the continued operation of Tenant’s business,
or (iii) because of the laws then in force, the Premises may not be used for
the same use being made before such taking, whether or not restored as required
by Paragraph 22(c) below.  Any such
option to terminate by Landlord must be exercised within a reasonable period of
time, to be effective as of the date possession is taken by the condemnor.


 


                (c)           If
any part of the Premises or the Building is taken and this Lease is not
terminated, then Landlord shall, to the extentnot prohibited by laws then in force, repair any damage occasioned
thereby to the remainder thereof to a condition reasonably suitable for
Tenant’s continued operations and otherwise, to the extent practicable, in the
manner and to the extent provided in Paragraph 21(a).


 


                (d)           If
a portion of the Premises is temporarily taken for a period of one year or less
and such period does not extend beyond the Lease Expiration Date, this Lease
shall remain in effect.  If any portion
of the Premises is temporarily taken for a period which exceeds one year of
which extends beyond the Lease Expiration Date, then the rights of Landlord and
Tenant shall be determined in accordance with Paragraphs 22(a) and 22(b) above.


 


                (e)           Any
award made for any taking of the Property, the Building, or the Premises, or
any portion thereof, shall belong to and be paid to Landlord, and Tenant hereby
assigns to Landlord all of its right, title and interest in any such award; provided, however, that Tenant shall be
entitled to receive any portion of the award that is made specifically (i) for
the taking of personal property, inventory or trade fixtures belonging to
Tenant, (ii) for the interruption of Tenant’s business or its moving costs, or
(iii) for the value of any leasehold improvements installed and paid for by
Tenant.  The rights of Landlord and
Tenant regarding any condemnation shall be determined as provided in this
Paragraph, and each party hereby waives the provisions of Section 1265.130 of
the California Code of Civil Procedure, and the provisions of any similar law
hereinafter enacted, allowing either party to petition the Supreme Court to
terminate this Lease and/or otherwise allocate condemnation awards between
Landlord and Tenant in the event of a taking of the Premises.


 


                (f)            In
the event of a taking of the Premises which does not result in a termination of
this Lease (other than a temporary taking), then, as of the date possession is
taken by the condemning authority, the Base Rent shall be reduced in the same
proportion that the area of that part of the Premises so taken (less any
addition to the area of the Premises by reason of any reconstruction) bears to
the area of the Premises immediately prior to such taking.


 


                (g)           The
term “taking” or “taken” as used in this Paragraph shall mean any transfer or
conveyance of all or any portion of the Property to a public or quasi-public
agency or other entity having the power of eminent domain pursuant to or as a
result of the exercise of such power by such an agency, including any inverse
condemnation and/or any sale or transfer by Landlord of all or any portion of
the Property to such an agency under threat of condemnation or the exercise of
such power.


 


                23.          EVENTS
OF DEFAULT.


 


                (a)           Tenant shall be in default of its
obligations under this Lease if any of the following events occur:


 


                                (i)            Tenant
shall have failed to pay Base Rent or any Escalation Rent within five (5) days
of when due; or


 


                                (ii)           Tenant
shall have done or permitted to be done any act, use or thing in its use,
occupancy or possession of the Premises or the Building or the Common Areas
which is prohibited by the terms of this Lease; or


 


                                (iii)          Tenant shall have
failed to perform any term, covenant or condition of this Lease (except those
requiring the payment of Base Rent or Escalation Rent, which failures shall be
governed by subparagraph (a) above) within thirty (30) days after written notice
from Landlord to Tenant specifying the nature of such failure and requesting
Tenant to perform same; or


 


                                (iv)          Tenant
shall have sublet the Premises or assigned or encumbered its interest in this
Lease in violation of the provisions contained in Paragraph 24, whether
voluntarily or by operation of law; or


 


                                (v)           Tenant
shall have abandoned the Premises; or


 


                                (vi)          Tenant
or any guarantor of this Lease shall have permitted or suffered the
sequestration or attachment of, or execution on, or the appointment of a
custodian or receiver with respect to, all or any substantial part of the
property or assets of Tenant (or such guarantor) or any property or asset
essential to the conduct of Tenant’s (or such guarantor’s) business, and Tenant
(or such guarantor) shall have failed to obtain a return or release of the same
within thirty (30) days thereafter, or prior to sale pursuant to such
sequestration, attachment or levy, whichever is earlier; or


 


 


14

















 


                                (vii)         Tenant
or any guarantor of this lease shall have made a general assignment of all or a
substantial part of its assets for the benefit of its creditors; or


 


                                (viii)        Tenant
or any guarantor of this Lease shall have allowed (or sought) to have entered
against it a decree or order which: (i) grants or constitutes an order of
relief, appointment of a trustee, or condemnation or a reorganization plan
under the bankruptcy laws of the United States; (ii) approves as properly filed
a petition seeking liquidation or reorganization under said bankruptcy laws or
any other debtor’s relief law or similar statute of the United States or any
state thereof; or (iii) otherwise directs the winding up or liquidation of
Tenant; provided, however, if any
decree or order was entered without Tenant’s consent or over Tenant’s
objection, Landlord may not terminate this Lease pursuant to this subparagraph
if such decree or order is rescinded or reversed within thirty (30) days after
its original entry; or


 


                                (ix)           Tenant
or any guarantor of this Lease shall have availed itself of the protection of
any debtor’s relief law, moratorium law or other similar law which does not
require the prior entry of a decree or order.


 


                (b)           In
the event of any default by Tenant, and without limiting Landlord’s right to
indemnification as provided in Paragraph 19, Landlord shall have the following
remedies, in addition to all other rights and remedies provided by law or
otherwise provided in this Lease, to which Landlord may resort cumulatively, or
in the alternative:


 


                                (i)            Landlord
may, at Landlord’s election, keep this Lease in effect and enforce, by an
action at law or in equity, all of its rights and remedies under this Lease
including, without limitations, (i) the right to recover the rent and other sums
as they become due by appropriate legal action, (ii) the right to make payments
required by Tenant, or perform Tenant’s obligations and be reimbursed by Tenant
for the cost thereof with interest at the then maximum rate of interest not
prohibited by law from the date the sum is paid by Landlord until Landlord is
reimbursed by Tenant, and (iii) the remedies of injunctive relief and specific
performance to prevent Tenant from violating the terms of this Lease and/or to
compel Tenant to perform its obligations under this Lease, as the case may be.


 


                                (ii)           Landlord
may, at Landlord’s election, terminate this Lease by giving Tenant written
notice of termination, in which event this Lease shall terminate on the date
set forth for termination in such notice, 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 therefore. Any termination under this subparagraph shall not relieve
Tenant from its obligation to pay to Landlord all Base Rent and Escalation Rent
then or thereafter due, or any other sums due or thereafter accruing to
Landlord, or from any claim against Tenant for damages previously accrued or
then or thereafter accruing. In no event shall any one or more of the following
actions by Landlord, in the absence of a written election by Landlord to
terminate this Lease constitute a termination of this Lease:


 


                                                (1)           Appointment
of a receiver of keeper in order to protect Landlord’s interest hereunder;


 


                                                (2)           Consent
to any subletting of the premises or assignment of this Lease by Tenant,
whether pursuant to the provisions hereof or otherwise; or


 


                                                (3)           Any
action taken by Landlord or its partners, principals, members, officers,
agents, employees, or servants, which is intended to mitigate the adverse
effects of any breach of this Lease by Tenant, including, without limitation,
any action taken to maintain and preserve the Premises on any action taken to
relet the Premises or any portion thereof for the account at Tenant and in the
name of Tenant.


 


                                (iii)          In
the event Tenant breaches this Lease and abandons the Premises, Landlord may
terminate this Lease, but this Lease shall not terminate unless Landlord gives
Tenant written notice of termination. If Landlord does not terminate this Lease
by giving written notice of termination, Landlord may enforce all its rights
and remedies under this Lease, including the right and remedies provided by
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 right to sublet or assign, subject only to reasonable limitations”),
as in effect on the Term Commencement Date.


 


                                (iv)          In
the event Landlord terminates this Lease, Landlord shall be entitled, at
Landlord’s election, to the rights and remedies provided in California Civil
Code Section 1951.2, as in effect on the Term Commencement Date. For purposes
of computing damages pursuant to Section 1951.2, an interest rate equal to the
maximum rate of interest then not prohibited by law shall be used where
permitted. Such


damages shall include, without
limitation:


 


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


 


                                                (2)           The
worth at the time of award of the amount by which the unpaid rent for the
balance of the term after the time of the award exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided, 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; and


 


                                                (3)           Any
other amount necessary to compensate Landlord for all detriment proximately
caused by Tenant’s failure to perform Tenant’s obligations under this lease, or
which in the ordinary


 


 


15

















 


course of things would be
likely to result therefrom, including without limitation, the following: (i)
expenses for cleaning, repairing or restoring the Premises, (ii) expenses for
altering, remodeling or otherwise improving the Premises for the purpose of
reletting, including removal of existing leasehold improvements and/or
installation of additional leasehold improvements (regardless of  how the same is funded, including reduction
of rent, a direct payment or allowance to a new tenant, or otherwise), (iii)
broker’s fees allocable to the remainder of the term of this Lease, advertising
costs and other expenses of reletting the Premises; (iv) costs of carrying and
maintaining the  Premises, such as
taxes, insurance premiums, utility charges and security precautions, (v)
expenses incurred in removing, disposing of and/or storing any of Tenant’s
personal property, inventory or trade fixtures remaining therein; (vi)
reasonable attorney’s fees, expert witness fees, court costs and other
reasonable expenses incurred by Landlord (but not limited to taxable costs) in
retaking possession of the Premises, establishing damages hereunder, and
releasing the Premises; and (vii) any other expenses, costs or damages
otherwise incurred or suffered as a result of Tenant’s default.


 


                (c)           In
the event Landlord fails to perform its obligations under this Lease, Landlord
shall nevertheless not be in default under the terms of this Lease until such
time as Tenant shall have first given Landlord written notice specifying the
nature of such failure to perform its obligations, and then only after Landlord
shall have had thirty (30) days following its receipt of such notice within
which to perform such obligations; provided
that, if longer than thirty (30) days is reasonably required in
order to perform such obligations, Landlord shall have such longer period. In
the event of Landlord’s default as above set forth, then, and only then, Tenant
may then proceed in equity or at law to compel Landlord to perform its
obligations and/or to recover damages proximately caused by such failure to
perform (except as and to the extent Tenant has waived its right to damages as
provided in this Lease).


 


                (d)           If
Landlord is a corporation, trust, partnership, joint venture, limited liability
company, unincorporated association, or other form of business entity, Tenant
agrees that (i) the obligations of Landlord under this Lease shall not
constitute personal obligations of the officers, directors, trustees, partners,
joint venturers, members, owners, stockholders, or other principals as such
business entity, and (ii) Tenant shall have recourse only to the property of
such corporation, trust, partnership, joint venture, limited liability company,
unincorporated association, or other form of business entity for the
satisfaction of such obligations and not against the assets of such officers,
directors, trustees, partners, joint venturers, members, owners, stockholders
or principals. Additionally, if Landlord is a partnership or limited liability
company, then Tenant covenants and agrees:


 


                                (i)            No
partner or member of Landlord shall be sued or named as a party in any suit or
action brought by Tenant with respect to any alleged breach of this Lease
(except to the extent necessary to secure jurisdiction over the partnership and
then only for that sole purpose);


 


                                (ii)           No
service of process shall be made against any partner or member of Landlord
except for the sole purpose of securing jurisdiction over the partnership; and


 


                                (iii)          No
writ of execution will ever be levied against the assets of any partner or
member of Landlord other than to the extent of his or her interest in the
assets of the partnership or limited liability company constituting Landlord.


 


Tenant further agrees that each
of the foregoing covenants and agreements shall be enforceable by Landlord and
by any partner or member of Landlord and shall be applicable to any actual or
alleged misrepresentation or nondisclosure made regarding this Lease or the
Premises or any actual or alleged failure, default or breach of any covenant or
agreement either expressly or implicitly contained in this Lease or imposed by
statute or at common law.


 


                (e)           Landlord
and Tenant agree that the provisions of Paragraph 23(c) above are intended to
supercede and replace the provisions of California Civil Code Sections 1932(1),
1941 and 1942, and accordingly, Tenant hereby waives the provisions of
California Civil Code Sections 1932(1), 1941 and 1942 and/or any similar or
successor law regarding Tenant’s right to terminate this Lease or to make
repairs and deduct the expenses of such repairs from the rent due under this
Lease.


 


                24.          ASSIGNMENT
AND SUBLETTING


 


                (a)           Tenant
shall not sublet the Premises or any portion thereof or assign its interest in
this lease, whether voluntarily or by operation of Law, without Landlord’s
prior written consent which shall not be unreasonably withheld. Any attempted
subletting or assignment without Landlord’s prior written consent, at
Landlord’s election, shall constitute a default by Tenant under the terms of
this Lease. The acceptance of rent by Landlord from any person or entity other
than Tenant, or the acceptance of rent by Landlord from Tenant with knowledge
of a violation of the provision of this Paragraph, shall not be deemed to be a
waiver by Landlord of any provision of this Paragraph of this Lease or to be a
consent to any subletting by Tenant or any assignment of Tenant’s interest in
this Lease. Without limiting the circumstances in which it may be reasonable
for Landlord to withhold its consent to an assignment or subletting, Landlord
and Tenant acknowledge that it shall be reasonable for Landlord to withhold its
consent in the following instances:


 


                                (i)            the
proposed assignee or sublessee is a governmental agency;


 


                                (ii)           in
Landlord’s reasonable judgment, the use of the Premises by the proposed
assignee or sublessee would involve occupancy by other than primarily general
office, would entail any alterations which would lessen the value of the
leasehold improvements in the Premises, or would require increased services by
Landlord;


 


                                (iii)          in
Landlord’s reasonable judgment, the financial worth of the proposed assignee is
less than that of Tenant or does not meet the credit standards applied by
Landlord;


 


 


16

















 


                                (iv)          the
proposed assignee or sublessee (or any of its affiliates) has been in material
default under a lease, has been in litigation with a previous landlord, or in
the ten years prior to the assignment or sublease has filed for bankruptcy
protection, has been the subject of an involuntary bankruptcy, or has been
adjudged insolvent;


 


                                (v)           Landlord
has experienced a previous default by or is in litigation with the proposed
assignee or sublessee;


 


                                (vi)          in
Landlord’s reasonable judgment, the Premises, or the relevant part thereof,
will be used in a manner that will violate any negative covenant as to use
contained in this Lease;


 


                                (vii)         the
use of the Premises by the proposed assignee or sublessee will violate any
applicable law, ordinance or regulation;


 


                                (viii)        the
proposed assignee or sublessee is, as of the date of this Lease, a tenant in
the Building;


 


                                (ix)           the
proposed assignment of sublease fails to include all of the terms and
provisions required to be included therein pursuant to this Paragraph 24;


 


                                (x)            Tenant
is in default of any obligation of Tenant under this Lease, or Tenant has
defaulted under this Lease on three or more occasions during the 12 months
preceding the date that Tenant shall request consent; or


 


                                (xi)           in
the case of a subletting of less than the entire Premises, if the subletting
would result in the division of the premises into more than two subparcels or
would require improvements to be made outside of the Premises.


 


                (b)           Any
dissolution, merger, consolidation or other reorganization of Tenant, or the
sale or other transfer in the aggregate over the Lease Term of a controlling
percentage of the capital stock of Tenant, or the sale or transfer of all or a
substantial portion of the assets of Tenant, shall be deemed a voluntary
assignment of Tenant’s interest in this Lease. The phrase “controlling
percentage” means the ownership of and the right to vote stock possessing more
than fifty percent of the total combined voting power of all classes of
Tenant’s capital stock issued, outstanding and entitled to vote for the
election of directors. If Tenant is a partnership, a withdrawal or change,
voluntary, involuntary or by operation of Law, of any general partner, or the
dissolution of the partnership, shall be deemed a voluntary assignment of
Tenant’s interest in this Lease.


 


                (c)           If
Tenant shall desire to assign its interest under the Lease or to sublet the
Premises, Tenant must first notify Landlord, in writing, of its intent to
assign or sublet, at least thirty (30) days in advance of the date it intends
to so assign its interest in this Lease or sublet the Premises but not sooner
than one hundred eighty (180) days in advance of such date, specifying in
detail the terms of such proposed assignment or subletting, including the name
of the proposed assignee or sublessee, the property assignee’s or sublessee’s
intended use of the Premises, current financial statements (including a balance
sheet, income statement and statement of cash flow, all prepared in accordance
with generally accepted accounting principles) of such proposed assignee or
sublessee, the form of documents to be used in effectuating such assignment or
subletting and such other information as Landlord may reasonably request.
Landlord shall have a period of ten (10) business days following receipt of
such notice and the required information within which to do one of the
following: (i) consent to such requested assignment or subletting subject to
Tenant’s compliance with the conditions set forth in Paragraph 24(d) below, or
(ii) refuse to so consent to such requested assignment or subletting, provided
that such consent shall not be unreasonably refused, or (iii) terminate this
Lease as to the portion (including all) of the Premises that is the subject of
the proposed assignment or subletting. During such ten (10) business day
period, Tenant covenants and agrees to supply to Landlord, upon request, all
necessary or relevant information which Landlord may reasonably request
respecting such proposed assignment or subletting and/or the proposed assignee
or sublessee.


 


                (d)           If
Landlord elects to consent, or shall have been ordered to so consent by a court
of competent jurisdiction, to such requested assignment or subletting, such
consent shall be expressly conditioned upon the occurrence of each of the
conditions below set forth, and any purported assignment or subletting made or
ordered prior to the full and complete satisfaction of each of the following
conditions shall be void and, at the election of Landlord, which election may
be exercised at any time following such a purported assignment or subletting
but prior to the satisfaction of each of the stated conditions, shall
constitute a material default by Tenant under this Lease until cured by
satisfying in full each such condition by the assignee or sublessee. The
conditions are as follows:


 


                                (i)            Landlord
having approved in form and substance, the assignment or sublease agreement and
any ancillary documents, which approval shall not be unreasonably withheld by
Landlord if the requirements of this Paragraph 24 are otherwise complied with.


 


                                (ii)           Each
such sublessee or assignee having agreed in writing satisfactory to Landlord
and its counsel and for the benefit of Landlord, to assume, to be bound by, and
to perform the obligations of this Lease to be performed by Tenant which relate
to space being subleased.


 


                                (iii)          Tenant
having fully and completely performed all of its obligations under the terms of
this Lease through and including the date of such assignment or subletting.


 


                                (iv)          Tenant
having reimbursed to Landlord all reasonable attorneys’ fees incurred by
Landlord in conjunction with the processing and documentation of any such
requested subletting or assignment.


 


 


17

















 


                                (v)           Tenant
having delivered to Landlord a complete and fully-executed duplicate original
of such sublease agreement or assignment agreement (as applicable) and all
related agreements.


 


                                (vi)          Tenant
having paid, or having agreed in writing to pay as to future payments, to
Landlord fifty percent (50%) of all assignment consideration or excess rentals
to be paid to Tenant or to any other on Tenant’s behalf or for Tenant’s benefit
for such assignment or subletting as follows:


 


                                                (1)           If
Tenant assigns its interest under this Lease and if all or a portion of the
consideration for such assignment is to be paid by the assignee at the time of
the assignment, that Tenant shall have paid to Landlord and Landlord shall have
received an amount equal to fifty percent (50%) of the assignment consideration
so paid or to be paid (whichever is greater) at the time of the assignment by
the assignee; or


 


                                                (2)           If
Tenant assigns its interest under this Lease and if Tenant is to receive all or
a portion of the consideration for such assignment in future installments, that
Tenant and Tenant’s assignee shall have entered into a written agreement with
and for the benefit of Landlord satisfactory to Landlord and its counsel
whereby Tenant and Tenant’s assignee jointly agree to pay to Landlord an amount
equal to fifty percent (50%) of all such future assignment consideration
installments to be paid by such assignee as and when such assignment
consideration is so paid.


 


                                                (3)           If
Tenant subleases the Premises, that Tenant and Tenant’s sublessee shall have
entered into a written agreement with and for the benefit of Landlord
satisfactory to Landlord and its counsel whereby Tenant and Tenant’s sublessee
jointly agree to pay to Landlord fifty percent (50%) of all excess rentals to
be paid by such sublessee as and when such excess rentals are so paid.


 


                (e)           For
purposes of this Paragraph, including any amendments to this Paragraph by way
of addendum or other writing, the term “assignment consideration” shall mean
all consideration to be paid by the assignee to Tenant or to any other party on
Tenant’s behalf or for Tenant’s benefit as consideration for such assignment, after
deduction for reasonable market rate leasing commissions paid by Tenant and
tenant improvements made by Tenant for any subtenant, but without deduction for
any other costs or expenses (including, without limitation, building upgrades,
permit fees, attorneys’ fees, and other consultants’ fees) incurred by Tenant
in connection with such assignment, and the term “excess rentals” shall mean
all consideration to be paid by the sublessee to Tenant or to any other party
on Tenant’s behalf or for Tenant’s benefit for the sublease of all or any part
of the Premises in excess of the rent due to Landlord under the terms of this
Lease for the portion subleased for the same period, after deduction for
reasonable market rate leasing commissions paid by Tenant and tenant
improvements made by Tenant for any subtenant, but without deduction for any
other costs or expenses (including, without limitation, building upgrades,
permit fees, attorneys’ fees, and other consultants’ fees) incurred by Tenant
in connection with such sublease. Tenant agrees that the portion of any
assignment consideration and/or excess rentals arising form any assignment or
subletting by Tenant which is to be paid to Landlord pursuant to this Paragraph
now is and shall then be the property of Landlord and not the property of
Tenant.


 


                (f)            All
payments required by this Paragraph to be made to Landlord shall be made in
cash in full as and when they become due. At the time Tenant, Tenant’s assignee
or sublessee makes each such payment to Landlord, Tenant or Tenant’s  assignee or sublessee, as the case may be,
shall deliver to Landlord an itemized statement in reasonable detail showing
the method by which the amount due Landlord was calculated and certified y the
party making such payment as true and correct.


 


                (g)           The
rights granted to Tenant by this Paragraph are granted in consideration of
Tenant’s express covenant that all pertinent allocations which are made by
Tenant between rental value of the Premises and the value of any of Tenant’s
personal property which may be conveyed or lease generally concurrently with
and which may reasonably be considered a part of the same transaction as the
permitted assignment of subletting shall be made fairly, honestly and in good
faith. If Tenant shall breach covenant, Landlord may immediately declare Tenant
to be in default under the terms of this Lease and terminate this Lease and/or
exercise any other rights and remedies Landlord would have under the terms of
this Lease in the case of a material default by Tenant under this Lease.


 


                (h)           No
subletting or assignment, even with the consent of Landlord, shall relieve
Tenant of its personal and primary obligation to pay rent and to perform all of
the other obligations to be performed by Tenant hereunder. Consent by Landlord
to one of more assignments of Tenant’s interest in this Lease or to one or more
sublettings of the Premises shall not be deemed to be consent to any subsequent
assignment or subletting. If Landlord shall have been order by a court of
competent jurisdiction to consent to a requested assignment or subletting,
shall have been ordered by a court of competent jurisdiction over the objection
of Landlord, such assignment of subletting shall not be binding between the
assignee (or sublessee) and Landlord until such time as all conditions set
forth in Paragraph 24(d) above have been fully satisfied (to the extent not
then satisfied) by the assignee or sublessee, including, without limitation,
the payment to Landlord of all agreed assignment considerations and/or excess
rentals then doc Landlord.


 


                25.          SUBORDINATION.


 


                (a)           The
Lease is subject to and subordinate to all ground leases, mortgage and deeds of
trust which affect the Building or the Property and which are of public record
as of the Term Commencement Date, and to all renewals, modifications,
consolidations, replacements and extensions thereof. However, if the lessor
under any such ground lease or any lender holding any such mortgage or deed of
trust shall advise Landlord that it desires or requires this Lease to be made
prior and superior thereto, then, upon written request of Landlord to Tenant,
Tenant shall promptly execute, acknowledge and deliver any and all customary or
reasonable documents or instruments which Landlord and such lessor or lender
deems necessary or desirable to make this Lease prior thereto. Tenant hereby
consents to Landlord’s ground leasing the land underlying the Building or the
Property and/or encumbering


 


 


18

















 


ground leases, mortgages or
deeds of trust shall be subject to and subordinate to this Lease.  However, if any lessor under any such future
ground lease or any lender holding such future mortgage or deed of trust shall
desire or require that this Lease be made subject to and subordinate to such
future ground lease, mortgage, or deed to trust, then Tenant agrees, within ten
days after Landlord’s written request therefore, to execute, acknowledge and
deliver to necessary or proper to assure the subordination of this Lease to
such future ground lease, mortgage, or deed of trust, but only if such lessor
or lender agrees to recognize Tenant’s rights under this Lease and agrees not
to disturb Tenant’s quiet possession of the Premises so long as Tenant is not
tin default under this Lease.  If
Landlord assigns the Lease as security for a loan, Tenant agrees to execute
such documents as are reasonably requested by the lender and to provide
reasonable provisions in the Lease protecting such lender’s security interest
which are customarily required by institutional lenders making loans secured by
a deed of trust.


 


                (b)           Tenant
shall, upon request, attorn (i) to any purchaser of the Building or the
Property at any foreclosure sale or private sale conducted pursuant to any
security instruments encumbering the Building of the Property, (ii) to any
grantee or transferee designated in any deed given in lieu of foreclosure of
any security interest encumbering the Building or the Property, or (iii) to the
lessor under an underlying ground lease of the land underlying the Building or
the Property, should such ground lease be terminated, provided that such
purchaser, grantee or lessor recognizes Tenant’s rights under this Lease.


 


                26.          ESTOPPEL CERTIFICATE.  Tenant will, following any request by
Landlord, promptly execute and deliver to Landlord an estoppel certificate
substantially in the form attached as Exhibit E, (i) starting the date to which
the rent and other charges are paid in advance, if any, (iii) acknowledging
that therea re not, to Tenant’s knowledge, any uncured defaults on the part of
Landlord hereunder, or specifying such defaults if any are claimed and (iv)
certifying such other information about this Lease as may be reasonable
requested by Landlord, its Lender or prospective lenders, investors or
purchasers of the Building or the Property. 
Tenant’s failure to execute and deliver such estoppel certificate within
ten days after Landlord’s request therefore shall be a material default by
Tenant under this Lease, and Landlord shall have all of the rights and remedies
available to Landlord as Landlord would otherwise have in the case of any other
material default by Tenant, including the right to terminate this Lease and sue
for damages proximately caused thereby, it being agreed and understood by Tenant
that Tenant’s failure to so deliver such estoppel certificate in a timely
manner could result in Landlord being unable to perform committed obligations
to other third parties which were made by Landlord in reliance upon this
covenant of Tenant.  Landlord and Tenant
intend that any statement delivered pursuant to this Paragraph may be relied
upon by any Lender or purchaser or prospective Lender or purchaser of the
Building, the Property, or any interest in them.


 


                27.          TENANT’S FINANCIAL INFORMATION.  Tenant shall, within ten (10) business days
after Landlord’s request therefor, deliver to Landlord a copy of Tenant’s (and
any guarantor’s) current (or, the most recently published if Tenant is then a
corporation publicly traded on a national exchange) financial statements
(including a balance sheet, income statement and statement of cash flow, all
prepared in accordance with generally accepted accounting principles) and any
such other information reasonable requested by Landlord regarding Tenant’s
financial donation.  Landlord shall be
entitled to disclose such financial statement or other information to its
Lender, to any present or prospective principal of or investor in Landlord, or,
to any prospective Lender or purchaser of the Building, the Property, or any
portion thereof or interest therein. 
Any such financial statement or other information which is marked
“confidential” or “company secrets” (or, is otherwise similarly marked by
Tenant) shall be confidential and shall not be disclosed by Landlord to any
third party except as specifically provided in this Paragraph, unless the same
becomes a part of the public domain without the fault of Landlord.


 


                28.          RULES.


 


                                Tenant
shall faithfully observe and comply with the rules and regulations attached
hereto as Exhibit C and incorporated herin by reference, and after notice
thereof, all reasonable modifications thereof and additions thereto from time
to time promulgated in writing by Landlord. 
Landlord shall not be responsible to Tenant for the non-performance by
any other tenant or occupant of the Building of any of said rules and
regulations


 


                29.          ATTORNEYS’
FEES.


 


                                If
as a result of any breach or default in the performance of any of the
provisions of this Lease, Landlord or Tenant uses the services of an attorney
and brings an action in a local, state or federal court of law in order to
secure compliance with such provisions or to recover damages therefor, or to
terminate this Lease or evict Tenant, the party against whom judgment has been
rendered shall reimburse the prevailing party upon demand for any and all
reasonable attorneys’ fees and expenses so incurred by the prevailing party.


 


                30.          WAIVER.


 


                                The
waiver by Landlord of any agreement, condition or provision herin contained
shall not be deemed to be a waiver of any subsequent breach of the same or any
other agreement, condition or provision herin contained, nor shall any custom
or practice which may grow up between the parties in the administration of the
terms hereof be construed to waive or to lessen the right of Landlord to insist
upon the performance by Tenant in strict accordance with such terms.  The subsequent acceptance of rental
hereunder by Landlord shall not be deemed to be a wavier of any preceding breach
by Tenant of any agreement, condition or provision of this Lease, other than
the failure of Tenant to pay the particular rental so accepted, regardless of
Landlord’s knowledge of the preceding breach at the time of acceptance or
payment of the rental.


 


 


19

















 


                31.          PARKING
AND TRANSPORTATION MANAGEMENT.


 


                                (a)           Unless
Tenant is in default hereunder, Tenant shall be entitled to park in the
Building’s parking lot (the “Lot”) on a non-assigned, unreserved basis the
number of automobiles designed in the Basic Lease Information for “onsite”,
subject to all of the rules and regulations applicable to such parking as are
promulgated by Landlord and to any restrictions or regulations at any time
imposed by the City of Santa Clara on Landlord’s ability of offer such parking.


 


                                (b)           Landlord
may assign any unserved and unassigned parking spaces and/or make all or a
portion of such spaces reserved, if it determines in its sole discretion that
such action is necessary for orderly and efficient parking. Tenant shall not
use more parking spaces than the number of parking privileges specified herein.
Landlord may, at its option, cause all parking to be valet parked or implement
a regulated or monitored parking program with any associated costs deemed on
Operating Expense. If Tenant permits or allows any of the prohibited activities
described in this Paragraph 31, then Landlord shall have the right, without
notice, an addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge file cost to Tenant, which
cost shall be immediately payable upon demand by Landlord. Landlord shall have
no responsibility for damage to automobiles incurred in the Lot.


 


                                (c)           All
parking rights granted to Tenant in this Paragraph 31 shall be for the sole use
of the employees and invitees of the name Tenant, and no parking rights may be
assigned or sublet to any other party.


 


                                (d)           Tenant
agrees that it will use its best efforts to cooperate in programs which may be
undertaken by Landlord independently, or in cooperation with local
municipalities or governmental agencies or other property owners in the
vicinity of the Building, to reduce peak levels of commuter traffic. Such
programs may include, but shall not be limited to, carpools, vanpools and other
ride sharing or transportation system management programs, public and private
transit, and flexible work hours. Tenant agrees to cooperate with Landlord in
Landlord’s administration of a transportation management program (if any)
required by the City of Santa Clara. Tenant acknowledges that as a part of this
program, Tenant may be required to distribute employee transportation
information at the Term Commencement Date, participate in annual employee
transportation surveys, allow employees to participate in commuter activities,
designate a liaison for commuter transportation related activities, distribute
commuter information to all employees prior to relocation and to new employees
when hired, and otherwise participate in other programs or services initiated
under the transportation management program.


 


                32.          COMPLETE
AGREEMENT.


 


                                There
are no oral agreements between Landlord and Tenant affecting this Lease, and
this Lease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings if any, between Landlord
and Tenant or displayed by Landlord to Tenant with respect to the subject
matter of this Lease or the Property. There are no representations between
Landlord and Tenant other than those contained in this Lease and all reliance
with respect to any representation is solely upon the representations contained
in this Lease. All implied warranties, including implied warranties of
merchantability and fitness, are excluded. Except as otherwise provided herein,
no subsequent change, modification or addition to this Lease shall be binding
unless in writing and signed by the parties hereto.


 


                33.          MODIFICATION
FOR LENDER.


 


                                If,
in connection with obtaining financing or refinancing for the Property or the Premises
or the Building or any portion thereof, Landlord’s lender shall request
reasonable modification of or to this Lease as a condition to such financing or
refinancing, Tenant shall not unreasonably withhold, delay or defer its consent
thereto, provided such modifications do not materially affect Tenants rights or
obligations hereunder.


 


                34.          MERGER.


 


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


 


                35.          SALE.


 


                                In the event the original Landlord hereunder,
or any successor owner of the Building or Property, shall sell or convey the
Building or Property, all liabilities and obligations on the part of the
original Landlord, or such successor owner, under this Lease accruing
thereafter shall terminate, and thereupon al such liabilities and obligations
shall be binding upon the new owner. Tenant agrees to attorney to such new
owner.


 


                36.          NO
LIGHT, AIR OR VIEW EASEMENT.


 


                                Any diminution or shutting off of light, air
or view by any structure which may be erected on lands adjacent to the Building
or the Property shall in no way affect this Lease or impose any liability to
Landlord.


 


                37.          CORPORATE
AUTHORITY.


 


                                If Tenant is a corporation, each individual
executing this Lease on behalf of such corporation represents and warrants that
Tenant is validly formed and duly authorized and existing, that Tenant is
qualified to do business in the State in which the Premises are located, that
Tenant has the full right and legal authority to enter into this Lease, and
that he or she is duly authorized to execute and deliver this Lease on Behalf
of Tenant in accordance with its terms. Tenant shall, within thirty days after
execution of this Lease, deliver to Landlord a certified copy of the resolution
of its board of directors authorizing or ratifying the execution of this Lease
and if Tenant fails to do so , Landlord at its sole election may elect to
terminate this Lease.


 


 


20

















 


                38.          ABANDONMENT.


 


                                If Tenant shall abandon or surrender the
Premises, or be dispossessed by process of law or otherwise, any personal
property belonging to Tenant and left on the Premises shall be deemed to be
abandoned, at the option of Landlord, except such property as may be mortgaged
to Landlord.


 


                39.          FUTURE
DEVELOPMENT.


 


                                Tenant agrees that any construction work
performed on the Building may result in minor inconveniences to Tenant but
shall not entitle Tenant to any rebate of rent or subject Landlord to any
liability. Tenant further acknowledges that such construction work shall be in
Landlord’s sole discretion. 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 circumstances resulting from such construction.
Landlord reserves the right from time to time to grant, without the consent or
joiner of Tenant, such easements, rights of way and dedications that Landlord
deems necessary and to cause the recordation of parcel maps and restrictions,
so long as such easements, rights of way and dedications not unreasonably
interfere with the use of the Premises by Tenant. Tenant agrees to execute any
documents reasonably requested by Landlord to effectuate any such easement
rights, dedications, maps or restrictions.


 


                40.          SECURITY
MEASURES.


 


                                Landlord may, but shall be under no
obligation to, implement security measures for the Building or the Property,
such as the registration or search of all persons entering or leaving the
Building, requiring identification for access to the Building, evacuation of
the Building for cause, suspected cause, or for drill purposes, the issuance of
magnetic pass cards or keys for Building or elevator or access and other
actions that Landlord deems necessary or appropriate to prevent any threat of
property loss or damage, bodily injury or business interruption. Tenant shall
cooperate and comply with, and cause its employees, representatives and
visitors to cooperate and comply with, such security measures. Landlord, its
agents and employees shall have no liability to Tenant, its employees, agents
and invitees for the implementation or exercise of, or the failure to implement
or exercise, any such security measures or for any resulting disturbance of
Tenant’s use or enjoyment of the Premises.


 


                41.          FORCE
MAJEURE.


 


                                In
the event Landlord is delayed, interrupted or prevented from performing any of
its obligations under this Lease, including its obligations under Exhibit D
with respect to Tenant Improvements, and such delay, interruption or prevention
is due to fire, act of God, governmental act, strike, labor dispute,
unavailability of materials or any other cause outside the reasonable control
of Landlord, then the time for performance of the affected obligation of
Landlord shall be extended for a period equivalent to the period of such delay,
interruption or prevention.


 


                42.          RECORDING.


 


                                Neither
Landlord not Tenant shall record this Lease, nor a short form memorandum of
this Lease, without prior written consent of the other.


 


                43.          MISCELLANEOUS.


 


                                The words “Landlord” and “Tenant” as used
herein shall include the plural as well as the singular. If there be more than
one Tenant, the obligations hereunder imposed upon Tenant shall be joint and
several. Time is of the essence of this Lease and each and all of its
provisions. Submission of this instrument for examination or signature by
Tenant does not constitutive a reservation of or option for lease, and it is
not effective as a lease or otherwise until execution and delivery by both
Landlord and Tenant. The agreements, conditions and provisions herein contained
shall, subject to the provisions as to assignment, apply to and bind the heirs,
executors, administrators, successors and assigns of the parties hereto. Tenant
shall not, without the consent of Landlord, use the words “Marriott Plaza” or
“2901 Tasman Drive” for any purpose other than as the address of the business
to be conducted by Tenant in the Premises. If any provision of this Lease shall
be determined to be illegal or unenforceable, such determination shall not
affect any other provision of this Lease and all such other provisions shall
remain in full force and effect. This Lease shall be governed by and construed
pursuant to the Laws of the State of California. Exclusive jurisdiction and
venue for resolving any dispute between Tenant and Landlord shall be in the
County of Santa Clara, State of California.


 


                44.          EXHIBITS.


 


                                The
exhibits and addendum, if any, specified in the Basic Lease Information are
attached to this Lease and by this reference made a part hereof.


 


                45.          TELEPHONE
SERVICE.


 


                                (a)           Notwithstanding any other provision
of this Lease to the contrary:


 


                                                (i)            Landlord
shall have no responsibility for providing to Tenant any telephone equipment,
including wiring, within the Premises or for providing telephone service or connections
from the utility to the Premises; and


 


                                                (ii)           Landlord
make no warranty as to the quality, continuity or availability of the
telecommunitions services in the Building, and Tenant hereby waives any claim
against Landlord for any actual or


 


 


21

















 


consequential damages
(including damage for loss of business) in the event Tenant’s
telecommunications services in any way are interrupted, damaged or rendered
less effective, except to the extent caused by the grossly negligent or willful
act or omission by Landlord, its agent or employees.  Tenant accepts the telephone equipment (including, without
limitations, the INC, as defended below) in its “AS-IS” condition, and Tenant
shall be solely responsible for contracting with a reliable third party vendor
to inspect the INC periodically (the frequency of such inspections to be
determined by such vendor based on this experience and professional judgment),
and requiring such vendor to meet local and federal requirements for
telecommunications material and workmanship). 
Landlord shall not be liable to Tenant and Tenant waives all claims
against Landlord whatsoever, whether for personal injury, property damage, loss
of use of the Premises, or otherwise, due to interruptions or failure of
telephone services to the Premises. 
Tenant hereby holds Landlord harmless and agrees to indemnify, protect
and defend Landlord from and against any liability for any damage, loss or
expense due to any failure or interruption of telephone service to the Premises
for any damage, loss or expense due to any failure or interruption of telephone
service to the Premises for any reason. 
Tenant agrees to obtain loss of rental insurance adequate to cover any
damage, loss or expense occasioned by the interruption of telephone service.


 


                                (b)           At
such time as the entirety of the Leased Premise is no longer leased to Tenant,
Landlord shall in its sole discretion have the right, by written notice to
Tenant, to elect to assume limited responsibility for INC, as provided below
and upon such assumption of responsibility by Landlord, this subparagraph (b)
shall apply prospectively.


 


                                                (i)            Landlord
shall provide Tenant access to such quantity of pairs in the Building
intra-building network cable (“INC”) as is determined to be available by
Landlord in its reasonable discretion. 
Tenant’s access to INC shall be solely by arrangements made by Tenant,
as Tenant may elect, directly with Pacific Bell or Landlord (or such vendor as
Landlord may designate), and Tenant shall pay all reasonable charges as may be
imposed in connection therewith. 
Pacific Bell’s charge shall be deemed to be reasonable.  Subject to the foregoing, Landlord shall
have no responsibility for providing to Tenant any telephone equipment, including
wiring, within the Premises or for providing telephone serves or connections
from the utility to the Premises, except as required by law.


 


                                                (ii)           Tenant
shall not alter, modify, add to or disturb any telephone wiring in the Premises
or elsewhere in the Building without the Landlord’s prior written consent.  Tenant shall be liable to Landlord for any
damage to the telephone wiring in the Building due to the act, negligent or
otherwise, of Tenant or any employee, contractor or other agent of Tenant.  Tenant shall have no access to the telephone
closets within the Building, except in the manner and under procedures
established by Landlord.  Tenant shall
promptly notify Landlord of any actual or suspected failure of telephone
service to the Premises.


 


                                                (iii)          All
costs incurred by Landlord for the installation, maintenance, repair and
replacement of telephone wiring in the Building shall be included in Operating
Expenses.


 


                                                (iv)          Landlord
makes no warranty as to the quality, continuity or availability of the
telecommunications services in the Building, and Tenant hereby waives any claim
against Landlord for any actual or consequential damages (including damages for
loss of business) in the event Tenet’s telecommunications services in any way
are interrupted, damaged or rendered less effective, except to the extent
caused by the grossly negligent or willful act or omission by Landlord, its
agent or employees.  Tenant acknowledges
that Landlord meets its duty of care to Tenant with respect to the Building INC
by contracting with reliable third party vendor to assume responsibility for
the maintenance and repair thereof (which contract shall contain provisions
requiring such vendor to inspect the INC periodically (the frequency of such
inspection sot be determined by such vendor based on its experience and
professional judgment), and requiring such vendor to meet local and federal
requirements for telecommunications material and workmanship).  Subject to the foregoing, Landlord shall not
be liable to Tenant and Tenant waives all claims against Landlord whatsoever,
whether for personal injury, property damage, loss of use of the Premises, or
otherwise, due to (the interruption or failure of telephone services to the
Premises.  Tenant hereby holds Landlord
harmless and agrees to indemnify, protect and defend Landlord from and against
any liability for any damage, loss or expense due to any failure or
interruption of telephone service to the Premises for any reason.  Tenant agrees to obtain loss of rental
insurance adequate to cover any damage, loss or expense occasioned by the
interruption of telephone service.


 


                IN WITNESS WHEREOF,
the parties have executed this Lease on the respective dates indicated below:


 


	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
   

  
	
  MARRIOT PLAZA ASSOCIATES L.P.,

  A California Limited Partnership 

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  Menlo
  Equities Associates IV LLC,

  a California limited liability company,

  Its General Partner 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  Menlo
  Equities LLC, a California Limited Liability Company

  It’s Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  Diamant
  Investments LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Illegible

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
  8/30/99

  	
   

  



 


 


22

















 


TENANT:


 


COMMERCEBID.COM


a Delaware corporation


 


	
  Signature:

  	
  /s/ Naomi
  Golden Petrushka

  
	
   

  	
   

  
	
  Name:

  	
  Naomi Golden
  Petrushka

  
	
   

  	
   

  
	
  Its:

  	
  CFO

  
	
   

  	
   

  
	
  Signature:

  	
  /s/ Liron
  Petrushka

  
	
   

  	
   

  
	
  Name:

  	
  Liron
  Petrushka

  
	
   

  	
   

  
	
  Its:

  	
  CEO

  
	
   

  	
   

  
	
  Date:

  	
  8/26/99

  



 


 


23

















 


Exhibit A


 


LEGAL DESCRIPTION OF THE PROPERTY


 


Situated in the City of Santa
Clara


 


Parcel 126, as shown on that
certain Map entitled, “Parcel Map of Portion of Section 15, T.6 S., R. 1 W.,
M.D.B.&M.”, which Map was filed for record in the Office of Recorder of the
County of Santa Clara, State of California, on November 16, 1978 in Book 430 of
Maps, at Page(s) 23.


 


EXCEPTING THEREFROM: that
portion within Tasman Drive, conveyed to the City of Santa Clara, by Deed
recorded December 21, 1987 in Book K 396 of Official Records, Page 823.


 


 

















 


Exhibit B


 


FLOOR PLANS


 


 


 


[FLOORPLAN]


 


 


 

















 


Exhibit C


 


RULES AND REGULATIONS


 


                1.             The
sidewalk, halls, passages, exits, entrances, elevators, and stairways of the
Building shall not be obstructed by any of the tenants or used by them for any
purpose other than for ingress to and egress from their respective Premises.  The halls, passages, exits, entrances,
elevators, and stairways are not for the general public, and Landlord shall in
all cases retain the right to control and prevent access thereto of all persons
whose presence in the judgment of Landlord would be Prejudicial to the safety,
character, reputation and interests of the Building its tenants, provided that
nothing herein contained shall be construed to prevent ingress to and egress
from Tenant’s Premises to persons with whom any tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal
activities.  No tenant and no employee
or invitee of any tenant shall go upon the roof of the Building.


 


                2.             No
sign, placard, picture, name, advertisement or notice visible from the exterior
of any tenant’s Premises shall be inscribed, painted, affixed or otherwise
displayed by any tenant on any part of the Building without the prior written
consent of Landlord.  Landlord will
adopt and furnish to tenants general guidelines relating to signs inside the
Building on the office floors.  Each
tenant shall conform to such guidelines, but may request approval of Landlord
for modifications, which approval will not be unreasonably withheld.  All approved signs or lettering on doors
shall be printed, painted, affixed or inscribed at the expense of the Tenant by
a person approved by Landlord, which approval will not be unreasonably
withheld.  Material visible from outside
the Building will not be permitted.


 


                3.             The
Premises shall not be used for the storage of merchandise held for sale to the
general public or for lodging.  No
cooking shall be done or permitted on the Premises, except that use by any
tenant of food and beverage vending machines and Underwriters’ Laboratory
approved microwave and toaster ovens and equipment for brewing coffee, tea, hot
chocolate and similar beverages shall be permitted; provided that such use is
in accordance with all applicable federal, state and city laws, codes,
ordinances, rules and regulations.


 


                4.             No
tenant shall employ any person or persons other than Landlord’s janitorial
service for the purpose of cleaning the Premises, unless otherwise approved by
Landlord.  No person or persons other
than those approved by Landlord shall be permitted to enter the Building for
the purpose of cleaning the same.  No
tenant shall cause any unnecessary labor by reason of such tenant’s
carelessness or indifference in the preservation of good order and cleanliness.  Janitor service will not be furnished on
nights when rooms are occupied after 8:00 P.M. unless, by prior arrangement
with Landlord, service is extended to a later hour for specifically designated
rooms with any additional cost to by paid be the requesting tenant.


 


                5.             Landlord
will furnish each tenant free of charge with two keys to each door lock in its
Premises.  Landlord may make a
reasonable charge for any additional keys. 
Tenants shall have the right to make keys.  No tenant shall change any lock without the express written
consent of the Lanlord.  The tenants
shall in each case furnish Landlord with a key for any such lock.  Each tenant, upon the termination of its
tenancy, shall deliver to Landlord all keys to doors in the Building which
shall have been furnished to or made by the tenant.


 


                6.             The
elevator shall be available for use by all tenants in the Building.  The persons employed to move equipment in or
out of the Building must be acceptable to Landlord.  Landlord shall have the right to prescribe the weight, size and
position of all equipment, materials, furniture or other property, brought into
the Building.  Heavy objects shall, if
considered necessary by Landlord, stand on wood strips of such thickness as is
necessary properly to distribute the weight. 
Landlord will not be responsible for loss of or damage to any such
property from any cause, and all damage done to the Building by moving or
maintaining such property shall be repaired at the expense of the tenant.


 


                7.             No
tenant shall use or keep in the Premises or the Building any kerosene, gasoline
or inflammable or combustible fluid or material other than limited quantities
thereof reasonably necessary for the operation or maintenance of office
equipment, or, without Landlord’s prior approval, use any method of heating or
air conditioning other than that supplied by Landlord.  No tenant shall use or keep or permit to be
used or kept any foul or noxious gas or substance in the Premises, or permit or
suffer the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building by reason of
noise, odors or vibrations, or interfere in any way with other tenants or those
having business therein.


 


                8.             Landlord
shall have the right, exercisable without liability to any tenant to change the


name and street address of the
Building.


 


                9.             Landlord
reserves the right to exclude from the Building between the hours of 6:00 P.M.
and 8:00 A.M. and at all hours on Saturdays, Sundays and legal holidays all
persons who do not present a proper access card or other identification as an
employee of Tenant or who do not otherwise present proper authorization by
Tenant for access to the Premises. 
Tenant shall be responsible for all persons for whom it authorizes
access and shall be liable to Landlord for all acts of such persons.  Landlord 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 the case of
invasion, mob, riot, public excitement or other circumstances rendering such
actions advisable in Landlord’s opinion. 
Landlord reserves the right to prevent access to the Building during the
continuance of the same by such action as Landlord may deem appropriate.


 


                10.           The
directory of the Building will be provided for the display of the name and
location of tenants.  Any additional
name which Tenant desires to have added to the directory shall be subject to
Landlord’s approval and may be subject to a change therefor.


 


 


1

















 


                11.           No
curtains, draperies, blinds, shutters, shades, screens or other coverings,
hangings or decorations shall be attached to, hung or placed in, or used in
connection with any exterior window in the Building without the prior consent
of Landlord.  If consented to by
Landlord, such items shall be installed on the office side of the standard
window covering and shall in no way be visible from the exterior of the
Building.


 


                12.           Messenger
service and suppliers of bottled water, food, beverages and other products or
services shall be subjected to such reasonable regulations as may be adopted by
Landlord.  So long as the time for
pick-up and delivery of packages from and to the Premises is not materially
increased, Landlord may establish a central receiving station in the Building for
delivery and pick-up by all messenger services, and may limit delivery and
pick-up at tenant Premises to Building personnel.


 


                13.           Each
tenant shall see that the doors of its Premises are closed and locked and that
all water faucets or apparatus, cooking facilities and office equipment
(excluding office equipment required to be opcrative at all times) are shut off
before the tenant or its employees leave the Premises at night, so as to
prevent waste or damage, and for any default or carelessness in this regard the
tenant shall be responsible for any damage sustained by other tenants or
occupants of the Building or Landlord. 
All tenants shall keep the doors to the Building corridors closed at all
times except for ingress and egress.


 


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


 


                15.           Except
with the prior consent of the Landlord, no tenant shall sell, or permit the
sale at retail, of newspapers, magazines, periodicals, theater tickets or any
other goods or merchandise to the general public in or on the Premises, in or
from the Premises for the service or accommodation of occupants of any other
portion of the Building, nor shall the Premises of any tenant be used for
manufacturing of any kind, or any business or activity other than that
specifically provided for in such tenant’s lease.


 


                16.           No
tenant shall install any antenna, loudspeaker, or any other device on the roof
or exterior walls of the Building.


 


                17.           There
shall not be used in any portion of the Building, by any tenant or its
invitees, any hand trucks or other material handling equipment except those
equipped with rubber tires and side guards unless otherwise approved by
Landlord.


 


                18.           Each
tenant shall store its refuse within its Premises.  No material shall be placed in the refuse 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 refuse in the City of Santa
Clara without being in violation of any law or ordinance governing such
disposal.  All refuse disposals hall be
made only through entryways and elevators provided for such purposes and at
such times as Landlord shall designate.


 


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


 


                20.           Smoking
in all portions of the Building is prohibited, and each tenant shall cooperate
to prevent the same.


 


                21.           No
objects of any kind (including, without limitation, picture frames and cups)
shall be placed on the interior window sills, chair rails, or mullions which
adjoin the exterior windows of the Building.


 


                22.           Holidays
shall include the following: Christmas (December 25); New Years (January 1);
Memorial Day; Independence Day (July 4); Labor Day; and Thanksgiving.


 


                23.           The
requirements of the tenants will be attended to only upon application by
telephone or in person at the office of the Landlord or Landlord’s designated
representative.  Employees of Landlord
shall not perform any work or do anything outside of their regular duties
unless under special instructions from Landlord.


 


                24.           Subject
to the terms of the leases, Landlord may waive any one or more of the these
Rules and Regulations for the benefit of any particular tenant or tenants, but
no such waiver by Landlord shall be constructed as a waiver of such Rules and
Regulations in favor of any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all of the
tenants of the Building.


 


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


 


                26.           Subject
to the terms of the leases, Landlord reserves the right to make such other and
reasonable rules and regulations as in its judgment may from time to time be
needed for the safety, care and cleanliness of the Building, and for the
preservation of good order therein.


 


 


2

















 


EXHIBIT D


 


WORK LETTER


 


(Tenant Improvements)


 


                THIS WORK LETTER,
dated August 30, 1999, is centered into by and between MARRIOT PLAZA ASSOCIATES L.P., a California
limited partnership (“Landlord”), and COMMERCEDBID.COM,
INC., a Delaware corporation (“Tenant”).  On or about the date hereof, Landlord and Tenant entered into
that certain Office Lease (the “Lease”) for certain premises (the “Premises”)
commonly known as Suite 211, 2901 Tasman Drive, Santa Clara, California.  This Work Letter sets fourth the agreement
of Landlord and Tenant with respect to the improvements to be constructed in
the Premises.  All defined terms used
herein shall have the meaning set forth in the Lease, unless otherwise defined
in this Work Letter.


 


                1.             Construction
of Improvement Work.  Landlord
shall, through its general contractor, Rusciano Construction (the
“Contractor”), demolish and construct certain walls, to cause the Premises be
reconfigured to the layout set forth in Schedule 1 attached hereto (the
“Improvement Work”).  Such Improvement
Work shall be constructed in accordance with the bid by the Contractor attached
hereto as Schedule 2.  The quantities,
character and manner of the Improvement Work shall be subject to any
limitations imposed by any applicable governmental regulations relating to
conservation of energy and by applicable building codes and regulations.


 


                2.             Cost
of Improvement Work.  Landlord
shall in advance the costs of the Improvement Work up to a maximum of $46,557
(the “Tenant Improvement Costs”) which cost shall include the costs of
construction, the cost of permits and all architectural services obtained by
the landlord in connection with the tenant improvements.  In addition, Tenant shall bear and pay the
cost of the Improvement Work In excess of the Tenant Improvement Costs, if any.


 


3.             Completion;
Tenant Delay.


 


(a)           Landlord shall substantially complete
the improvement Work by the Term Commencement Date.  If Landlord is unable to so deliver possession of the Premises to
Tenant with the Improvement Work substantially complete prior to the Term
Commencement Date, Landlord shall not be in default under the Lease, nor shall
the Lease be void, voidable or cancelable by Tenant, and in no event shall
Landlord be liable in damages to Tenant for such delay, provided, however, that
the Term Commencement Date shall be extended until the Improvement Work is substantially
complete.


 


“Substantial
Completion” shall mean the earlier to occur of (i) Landlord’s delivery to
Tenant of a certificate of occupancy issued by the City of Santa Clara for the
Premises, (ii) Tenant’s occupancy of all or part of the Premises, (iii) the
date that Landlord’s architect furnishes a certificate of substantial
completion confirming that the Tenant improvements have been substantially
completed, subject to minor details of construction, decoration or mechanical
adjustment which do not unreasonably affect Tenant’s ability to do business in
the Premises, or (iv) the date upon which Tenant takes occupancy of the
Premises.  Upon Substantial Completion,
the Improvement Work shall be deemed “Substantially Complete” and possession of
the Premises shall be deemed delivered to Tenant for all purposes under the
Lease.


 


(b)           If Landlord shall be delayed in
substantially completing the Improvement Work as a result of:


 


                                (i)            Any
interruption or interference in Landlord’s construction of the Improvement Work
caused by Tenant, its contractors or its vendors; or


 


                                (ii)           Tenant’s
failure to timely pay any amounts which Tenant is obligated to pay under this
Work Letter; or


 


                                (iii)          Any
other act, neglect, failure or omission of Tenant, its agents, employees or
contractors of which Landlord has given Tenant notice, which Tenant failed to
cure within twenty-four (24) hours of receipt of the notice (items (i) through
(iii) above being collectively referred to as “Tenant Delays”);


 


then the date upon which the payment
of rental under the Lease shall commence shall be advanced by the cumulative
duration of such Tenant Delays.


 


 


1

















 


IN WITNESS WHEREOF,
Landlord and Tenant have executed this Work Letter as of the Respective dates
set forth below.


 




	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  MARRIOT PLAZA ASSOCIATES L.P., A California
  Limited Partnership 

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Menlo
  Equities Associates IV LLC,

  a California limited liability company,

  Its General Partner 

  
	
  Dated:

  	
  8/30/99

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  Menlo
  Equities LLC, a California Limited Liability Company

  It’s Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  Diamant
  Investments LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Richard
  J. Holmstrom

  
	
   

  	
   

  	
   

  	
   

  	
  Richard J.
  Holmstrom,

  Member

  
							






 


 


	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMMERCEBID.com,
  INC.

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:/s/

  	
  [ILLEGIBLE]

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
  Dated:

  	
   

  	
   

  	
  By:/s/

  	
  [ILLEGIBLE]

  
	
   

  	
   

  	
  Title:

  	
  CEO

  



 


 


2

















 


SCHEDULE 1


 


Premises Layout


 


 


[FLOOR PLAN]


 


 


3

















 


	
  Rusciano

  	
   

  	
  2020 Alello Ave, Suite B

  
	
   

  	
   

  	
  San Jose, CA 96111

  
	
  Construction

  	
   

  	
  CA Lic. 715872

  
	
   

  	
   

  	
  408-360-8500

  
	
  Inc.

  	
   

  	
  Fax: 406-360-8612

  



 


 


SCHEDULE 2


August 25, 1999


CONTRACTOR’S BID


 


Alan Webber


Menlo Equities Management Co,


2901 Tasman Dr. Suite 220


Santa Clara, CA 95054


 


	
  Project:

  	
  Suite 211
  Reconfiguration

  
	
   

  	
  2901 Tasman
  Dr.

  
	
   

  	
  Santa Clara,
  CA

  
	
  Quote #:

  	
  203.02.03

  



 


Dear Mr. Webber:


 


Rusciano Construction proposes
to provide all materials, labor and equipment necessary to complete the
above-mentioned project as per the scope, clarifications, and exclusions listed
below.  All work is to be done on
straight time.  Progress payment
billings will be made on the first of each month and are due and payable within
30 days of date of invoice.


 


Base Bid:               #32,005


 


Allowances: Included in Base Bid


	
  City Permits
  and Fees

  	
  $2178

  
	
  Architect and
  Engineering

  	
  $1452

  



 


Alternate Add;
Not Included in Base Bid


Demo and removal of approx.
4000 SF of existing carpet and 850 if base on East Side of firewall of Suite
211.                                                                                   $2080


Paint wall at entire Suite 211
Flat Latex, one color, and same color as existing wall’s approx. 15,000


SF.


$3,130


Scope:


•                    Provide necessary drawing to for
submittal to local building authority and obtain necessary permits.


•                    Demo approx. 20 if of 9’ partition
wall.


•                    Demo 4 ea. 30—80 doors and 20-80
sidelights save for reuse.


•                    Demo and safe off electrical as
necessary for removal of walls and install of new door openings.


•                    Provide and install 3 ea. New 30-80
door, frame, w/-keyed lockset (Schlage D53PD Rhodes 609), hinges and floor
mount doorstop.


•                    Install 4 ea. relocated doors,
frames, and hardware in new openings.


•                    Construct approx. 119 if of 47 wall
under existing acoustical grid system w/3 5/8, 25 GA metal studs and 5/8
drywall each side, tape and texture to match existing.


•                    Install 4 ea. Door and sidelight
openings in existing wall.


•                    Cut-in and frame 2 ea. door and
sidelight openings in existing wall.


•                    Patch existing walls at area of
demolition and finish to match existing adjacent walls,


•                    Provide and install 5 supply air
registers and ductwork (control from existing VAV box).


•                    Provide and install 5 ea. transfer
air registers and ductwork.


 


 

















 


	
  EAST BAY FLOORCOVERING, INC.

  	
   

  	
  JOB ESTIMATE

  	
   

  	
   

  
	
  221 F. Lewelling Blvd.

  	
   

  	
   

  	
   

  	
   

  
	
  SAN LORENZO, CA 94580

  	
   

  	
  PHONE

  	
   

  	
  DATE 

  	
  8/5/99

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (510)481-8444

  	
   

  	
   

  
	
  FAX(510)276-3631

  	
   

  	
  JOB
  NAME/LOCATION

  
	
   

  	
   

  	
   

  
	
  MENLO
  EQUITIES

  	
   

  	
  SUITE 211

  
	
   

  	
   

  	
  2901 TASMAN DR

  
	
  ALCAN

  	
   

  	
  SANTA CLARA

  
	
   

  	
   

  	
   

  



 


JOB DESCRIPTION:                                    Carpet — Design
Weave “windswept”

DEMO EPT & BASE, PREP FLOOR

BASE-BURKE 4=


 


 


REVISED


425 x13.00 =
5525


425 x 2.00 =
$850


4=BASE = $1417


$7792.00


NEW TOTAL


8/26/99


CPT
DESIGNWEAVE “WINDSWEPT”


COLOR —
WEDGEWOOD 976-776


BASE 321-P
INDIGO


 


ACCEPTANCE:
I hereby accept the proposal outlined above and
authorize work to commence on the date specified.  If any party to this agreement resorts to a legal action to
enforce any provision of this agreement the prevailing party shall be entitled
to recover reasonable attorneys fees and costs.


 


	
  Customer:

  	
   

  	
   

  	
  Date:

  	
   

  



NOTE:
The proposal may be withdrawn by us if not accepted
within 90 days.


 


 

















 


EXHIBIT E


 


SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE


 


                    ,
19   


 


	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


Re           2901 Tasman Drive


                Santa Clara, California


 


Ladies and Gentlemen:


 


Reference is made to that
certain Lease, dated as of
                                 ,
19    , between
                                 ,
a California Limited partnership (“Landlord”), and the undersigned (herein
referred to as the “Lease”).  A copy of
the Lease [and all amendment thereto] is[are] attached hereto as Exhibit
A.  At the request of Landlord in
connection with [State reasons for request for estoppel certificate          ], the undersigned hereby
certifies to Landlord and to [State names of other parties requiring
certification    ] and each of your
respective successors and assigns as follows:


 


                1. 
The undersigned is the tenant under the Lease.


 


                2. 
The Lease is in full force and effect and has not been amended,
modified, supplemented or superseded except as indicated in Exhibit A.


 


                3. 
There is no defense, offset, claim or counterclaim by or in favor of the
undersigned against Landlord under the Lease or against the obligations of the
undersigned under the Lease.  The
undersigned has no renewal, extension or expansion option, no right of first
offer or right of first refusal and no other similar right to renew or extend
the term of the Lease or expand the property demised thereunder except as may
be expressly set forth in the Lease.


 


                4. 
The undersigned is not aware of any default now existing of the
undersigned or of Landlord under the Lease, nor of any event which with notice
or the passage of time or both would constitute a default of the undersigned or
of Landlord under the Lease.


 


                5. 
The undersigned has not received notice of a prior transfer, assignment,
hypothecation or pledge by Landlord of any of Landlord’s interest in the Lease.


 


                6. 
The Monthly rent due under the Lease is
$                                     
and has been paid through
                                 ,
and all additional rent due and payable under the Lease has been paid through
                                .


 


                7. 
The term of the Lease commenced on
                                     ,
and expires on
                                 ,
unless sooner terminated pursuant to the provisions of the Lease, Landlord has
performed all work required by the Lease for the undersigned’s initial
occupancy of the demised property.


 


                8. 
The undersigned has deposited the sum of $___ with Landlord as security
for the performance of its obligations as tenant under the Lease, and no
portion of such deposit has been applied by Landlord to any obligation under
the Lease.


 


                9. 
There is no free rent period pending, nor is Tenant entitled to any
Landlord’s contribution.


 


The above certifications are
made to Landlord and Lender knowing that Landlord and Lender will rely thereon
in accepting an assignment of the Lease.


 


Very truly yours,


 


	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  



 


 

















 


EXHIBIT F


 


COMMENCEMENT DATE CERTIFICATE


 


This Commencement Date
Certificate is entered into by Landlord and Tenant pursuant to Exhibit D of the
Lease.


 


	
  1.

  	
   

  	
  (a)

  	
   

  	
  Landlord:

  	
   

  	
  Marriott
  Plaza Associates L.P., a California limited partnership

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Tenant:

  	
   

  	
  Commercebid.Com,
  Inc.

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Lease:

  	
   

  	
  Office Lease
  dated August 30, 1999 between Landlord and Tenant

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Premises:

  	
   

  	
  Suite 211

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Building
  Address:

  	
   

  	
  2901 Tasman
  Drive, Santa Clara, California

  



 


2.             CONFIRMATION OF LEASE
COMMENCEMENT.


 


                Landlord and Tenant confirm that the
Commencement Date of the lease is October 4, 1999 and the Expiration Date is
October 3, 2004 and that the Basic Lease Information is amended accordingly.


 


                Landlord and Tenant have executed this
Commencement Date Certificate as the dates set forth below.


 


LANDLORD:


 


MARRIOTT
PLAZA ASSOCIATES L.P.,


a California limited
partnership


 


	
  By:

  	
  Menlo
  Equities Associates IV LLC, a California Limited Liability Company,

  	 

	
   

  	
  Its General
  Partner

  	 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Menlo
  Equities LLC, a California Limited Liability Company,

  	 

	
   

  	
   

  	
  Its Manager

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By: Diamant
  Investments LLC

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
  /s/ Richard
  J. Holmstrom

  	 

	
   

  	
   

  	
   

  	
  Richard J.
  Holmstrom

  Member

  	 

						



 


TENANT:


 


COMMERCEBID.Com,


a Delaware corporation


 


	
  Signature:

  	
   /s/ LIRON PETRUSHKA

  
	
  Name:

  	
  Liron
  Petrushka

  
	
  Its:

  	
  CEO

  
	
   

  	
   

  
	
  Signature:

  	
   /s/ NAOMI PETRUSHKA

  
	
  Name:

  	
  Naomi
  Petrushka

  
	
  Its:

  	
  CFO

  
	
   

  	
   

  
	
  Date:

  	
  10/15/99