exv10w1






Exhibit 10.1




SECOND AMENDMENT TO LEASE

(Levi Strauss Building)




     The Second Amendment to Lease (this “Second Amendment”) by and between (a) BLUE JEANS EQUITIES
WEST, a California general partnership, INNSBRUCK LP, a California limited partnership, and PLAZA
GB LP, a California limited partnership, as tenants in common (collectively, “Lessor”), and (b)
LEVI STRAUSS & CO., a Delaware corporation (“Lessee”) is dated and effective as of this 12th day of
November, 2009 (“Effective Date”).



     This Second Amendment is based upon the following facts and circumstances, each of which
Lessor and Lessee hereby acknowledge and agree to be true and correct:



     A. Lessor and Lessee are currently parties to that certain Lease, dated as of July 31, 1979
(“Original Lease”), as amended by: (i) that certain Amendment to Lease (Levi Strauss Building),
dated as of January 1, 1998 (“First Amendment”), and (ii) that certain Memorandum of Understanding
(Levi Strauss Building), dated as of January 1, 1998 (“MOU”) (the Original Lease as amended by the
First Amendment, the MOU and this Second Amendment shall be referred to herein as the “Lease”),
covering those certain premises (the “Premises”) in the Levi Strauss Building (the “Building”)
located in that certain complex commonly known as Levi’s Plaza (“Levi’s Plaza”) in San Francisco,
California, all as more particularly described in the Lease; provided, however, as set forth in
this Second Amendment, from and after January 1, 2013 (a) the MOU shall have no further force or
effect with respect to periods of the term on or after January 1, 2013, and (b) Paragraphs 1, 5, 6,
8, 9, 10, 13, 14 and 17 through 23 of the First Amendment and Schedule 4(c) and
Schedule 9(e) shall be the only remaining operative provisions of the First Amendment with
respect to periods of the term on or after January 1, 2013.



     B. Lessor and Lessee have previously entered into that (i) that certain Letter of
Understanding, dated June 28, 1984 (“LOU”), and (ii) that certain Work Agreement (Levi Strauss
Building), dated as of January 1, 1998 (“Prior Work Agreement”); provided, however, that (a)
pursuant to Paragraph 17 of the First Amendment, the LOU is null, void and of no force or effect,
and (b) the operative provisions of the Prior Work Agreement have been performed prior to the date
of this Second Amendment and, as such, the Prior Work Agreement is of no further force or effect.



     C. Lessor and Lessee have previously entered into that certain Construction, Operation and
Leasing Agreement (“COLA”) with respect to the Building and Levi’s Plaza; provided, however, the
operative provisions of the COLA have either been performed prior to the date of this Second
Amendment or have been amended and superseded in their entirety by the terms of this Second
Amendment and, as such, the COLA shall have no further force or effect with respect to periods on
or after the Effective Date.



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     D. Pursuant to the terms and conditions of the Original Lease (as clarified by the First
Amendment), Lessee has successive options to extend the term for Option Terms extending through
December 31, 2079.



     E. Lessee has previously exercised its first option to extend the term as part of the First
Amendment, in connection with which Lessee extended the term until December 31, 2012, upon the
terms and conditions provided in the Original Lease and COLA, as amended by the First Amendment,
MOU and Prior Work Agreement.



     F. Lessee has now exercised its second option to extend the term of the Lease, extending the
term until December 31, 2022, in connection with such extension, Lessor and Lessee are entering
into this Second Amendment to acknowledge Lessee’s exercise of such second option to extend and the
extension of the term pursuant thereto, and to clarify certain ambiguities in the Original Lease
(as amended by the MOU and First Amendment), and revise certain rights with respect to other
properties forming Levi’s Plaza.



     G. Except as otherwise defined herein, capitalized terms shall have the same meaning as
ascribed to them in the Original Lease, as amended by the First Amendment.



     NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by Lessor and Lessee,
effective as of the Effective Date set forth above, the Lease is hereby amended as set forth below:



     1. Premises; Lease. Lessor and Lessee agree that the rentable square footage of the
Premises is THREE HUNDRED FIFTY-FOUR THOUSAND SEVEN HUNDRED NINETY-SEVEN (354,797) square feet.
Notwithstanding any provision in the Lease to the contrary, except as provided in Paragraph 3(c) of
this Second Amendment, Lessor shall not have any right to relocate the location of the Premises.
Accordingly, Paragraphs 3(b) and 3(c) of the First Amendment are hereby deleted in their entirety.
From and after the Effective Date, the term Lease, as used in the Original Lease, the MOU, the
First Amendment and this Second Amendment, shall mean and refer to the Original Lease as amended by
the MOU, the First Amendment and this Second Amendment.



     2. Extension of Term. Lessee hereby exercises and Lessor hereby accepts and
acknowledges Lessee’s timely and proper exercise of its second option to extend the term of the
Lease pursuant to Paragraph 6.1 of the Original Lease, as modified by Paragraph 3(a) of the First
Amendment, and Lessor and Lessee agree that notwithstanding anything in the Lease to the contrary
that the term of the Lease is hereby extended to December 31, 2022, with the period commencing
January 1, 2013 and expiring on December 31, 2022 constituting the “Second Extended Term”.
Notwithstanding anything to the contrary set forth in Paragraph 6.2 of the Original Lease or
Paragraph 4(c) of the First Amendment, the Base Rent payable by Lessee during the Second Extended
Term shall be as set forth in Paragraph 4(a) below.



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     3. Provisions for Exercise of Subsequent Options To Extend The Term. Lessee and
Lessor hereby acknowledge and agree that Paragraph 3 of the First Amendment is deleted in its
entirety and replaced with the provisions of this Paragraph 3. Under the Original Lease, Lessee
was granted options (each an “Option”) to extend the term of the Original Lease; provided, however,
that the Options could not extend the term of the Lease beyond December 31, 2079. The current
Second Extended Term reflects Lessee’s exercise of the second such Option (“Second Extension
Option”), and from and after January 1, 2013, Lessee shall have six (6) remaining Options to extend
the term of the Lease, with the first five (5) such remaining Options each being for a term of ten
(10) years and the sixth (6th) remaining Option being for a term of seven (7) years
(each, an “Option Term” and the first extension term exercised pursuant to the First Amendment and
the second extension option exercised pursuant to this Second Amendment shall also each be referred
to as an Option Term). In connection with Lessee’s exercise of the Second Extension Option, Lessor
and Lessee have agreed that the manner in which Lessee shall exercise each of the extension Options
arising under the Lease from and after the Second Extension Option shall be as described in this
Paragraph 3; provided, however, that, in any event (consistent with the limit of the term provided
in Paragraph 6.1 of the Lease) Lessee’s extension Options shall not extend the term of the Lease
beyond December 31, 2079. Except as provided in subparagraph (b) below, any exercise of an Option
by Lessee shall be an extension of the term of the Lease for the entire Premises then leased by
Lessee.



          (a) Lessee’s rights to extend the term as provided in this Paragraph 3 shall be personal to
Lessee and shall not be assignable by Lessee nor included in any rights of any sublessee of Lessee;
provided, however, that Lessee may assign its right to extend the term in connection with an
assignment of the Lease to an Affiliate of Lessee or a Permitted Assignee (as such terms are
defined in Paragraph 12 below) and, so long as the Square Footage Threshold (as defined below) has
not been exceeded (and will not be exceeded by any proposed sublease incorporating such contingent
provision), Lessee may grant a sublessee an option to extend its sublease beyond the then current
expiration of the term if, and only if, such extension is expressly contingent upon Lessee’s valid
exercise of its right to extend as provided hereunder. As used herein, the term “Square Footage
Threshold” shall mean either (x) third party subleases of portions of the Premises that have a term
that exceeds the date that is one (1) year prior to the expiration of the then current Option Term
(“Long Term Subleases”), covering in the aggregate (with all other Long Term Subleases) not more
than sixty thousand (60,000) rentable square feet of the Premises, provided, that subleases to any
Permitted Assignee, any Affiliate of Lessee, any Lessee Contractor or any Excluded Subtenants (as
such terms are defined in Paragraph 12 below) shall not be included within such calculation, or (y)
third party subleases of portions of the Premises that have a term that does not exceed the date
which is one (1) year prior to the expiration of the then current Option Term (“Short Term
Subleases”), covering in the aggregate (with all other Short Term Subleases and Long Term
Subleases) not more than one hundred thousand (100,000) rentable square feet of the Premises,
provided, that subleases (whether Short Term Subleases or Long Term Subleases) to any Permitted
Assignee, any Affiliate of Lessee, any Lessee Contractor or any Excluded Subtenants shall not be
included within such calculation.




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          (b) Lessee’s rights to extend the term as provided in this Paragraph 3 shall further be
subject to Lessee not being in default under the Lease beyond any applicable cure periods, either
on the date Lessee exercises any Option to extend or the date on which the respective Option Term
commences. If the Square Footage Threshold is then being exceeded on the date Lessee exercises its
Option to extend the term (such Option Term, herein the “Subject Option Term”), then:





	 	(i)	 	any exercise of an Option by Lessee shall only extend the
term as to the rentable square footage of the portions of the Premises
occupied by Lessee (including any Relocation Space (as defined in Paragraph
3(c) below) (any portion of the Premises not so occupied shall be referred to
herein as the “Unoccupied Surrender Premises”); with space being deemed
“occupied” by Lessee if, and only if, on the date Lessee exercises its Option
with respect to the Subject Option Term: (A) such space is leased to Lessee
(and, except as permitted in the following clause (B), such space will not, as
of the date the Subject Option Term commences, be subject to a sublease or
assignment by Lessee or any other form of occupancy agreement between Lessee
and any third party), or (B) such space is subleased or assigned by Lessee to
a Permitted Assignee, an Affiliate of Lessee, a Lessee Contractor or an
Excluded Subtenant;
	 
	 	(ii)	 	the Unoccupied Surrender Premises shall be surrendered by
Lessee one (1) day prior to the commencement of the Subject Option Term in the
condition required pursuant to the Lease,
	 
	 	(iii)	 	if the Unoccupied Surrender Premises was not previously
separately demised from the remainder of the Premises by Lessee, then Lessee
shall, at Lessee’s sole cost and expense, separately demise the Unoccupied
Surrender Premises from the remainder of the Premises, using Building standard
materials, which separate demising shall be completed on or before the
commencement of the Subject Option Term (unless otherwise completed in
accordance with Lessor’s exercise of a Relocation Option as defined in and set
forth pursuant to Paragraph 3(c) below), and
	 
	 	(iv)	 	the parties shall execute an amendment to the Lease pursuant
to which (x) all of Lessee’s obligations pertaining to the Premises to remain
following surrender of such Unoccupied Surrender Space (i.e. commencing upon
the commencement of the Subject Option Term), including those for Base Rent,
Adjusted Base Rent, Lessee’s Percentage of Operating Expenses and Adjusted
Taxes for the Building and any additional rent and other charges due hereunder
shall be reduced in proportion to the reduction in the rentable square footage
of the Premises caused thereby, the amount of such reductions to be determined
by multiplying such




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	 	 	 	obligations by a fraction, the numerator of which is the rentable square
footage of space to be surrendered and the denominator of which is the
rentable square footage of the entire Premises immediately prior to such
surrender, (y) the Operating Expense provisions within the Lease
(including, without limitation, Lessee’s obligation for payment of
Lessee’s Percentage of Operating Expenses with respect to the Building)
and the parties respective maintenance and repair obligations under
Paragraph 11 of the Second Amendment shall be adjusted to reflect the fact
that Lessor will once again assume control over operation of the Building,
provided, that, in adjusting the Operating Expense provisions and the
parties respective obligations under the Lease for maintenance, repairs
and replacements, the parties shall strive to reformulate their respective
rights, obligations and responsibilities in a fashion consistent with the
practices in effect prior to Lessee’s assumption of the operation and
maintenance of the Building, and (z) Lessor shall manage the maintenance
and repair of the Building in a manner consistent with standards
customarily maintained by the owners of the Comparable Maintenance
Standards Buildings, including, without limitation, instituting
competitive bidding practices, if any, with respect to contractors and
vendors which are customarily adhered to by the owners of the Comparable
Maintenance Standards Buildings in connection with maintenance and repair
of the Comparable Maintenance Standards Buildings.





          (c) If, pursuant to the operation of Paragraph 3(b) above, Lessee has exercised an Option to
extend the term with respect to less than all of the Premises (such Option Term, herein the
“Subject Option Term”), then Lessor shall also have the option (herein, the “Relocation Option”)
exercisable in Lessor’s sole discretion, to elect to relocate all or any portion of any
Non-Protected Space (as hereinafter defined), if any, to other space within the Building. For
purposes of this Paragraph 3(c), the term “Non-Protected Space” shall mean any portion of the
Premises as to which the term of the Lease has been extended for the Subject Option Term that (A)
is located upon a floor where any Unoccupied Surrender Premises is located, and (B) was not
previously separately demised from the subject Unoccupied Surrender Premises in connection with
Lessor approved demising plans in connection with a third party sublease which was consented to in
writing by Lessor pursuant to the provisions of Paragraph 11.1 of the Lease. Lessor’s Relocation
Option shall be exercised, if at all, not less than sixty (60) days after Lessee exercises the
applicable Option (“Relocation Notice”), specifying therein the subject Non-Protected Space
(herein, the “Relocation Space”) which Lessor intends to so relocate, and the location to which
Lessor will relocate such Relocation Space (the “Relocated Premises”), which relocation shall occur
on the last day immediately preceding the commencement of the Subject Option Term (the “Relocation
Date”). In connection with the foregoing, Lessee and Lessor hereby acknowledge and agree that:




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	 	(i)	 	the Relocation Space shall be surrendered by Lessee on the
Relocation Date in the condition required pursuant to the Lease;
	 
	 	(ii)	 	Lessee shall, at Lessee’s sole cost and expense, separately
demise any Non-Protected Space that Lessor does not desire to relocate and any
Relocated Premises from the Unoccupied Surrender Premises, using Building
standard materials, which separate demising shall be completed on or before
the Relocation Date;
	 
	 	(iii)	 	the number of net rentable square feet of the Relocated
Premises shall not materially vary from the number of net rentable square feet
of the Relocation Space;
	 
	 	(iv)	 	if Lessor desires to relocate Non-Protected Space, Lessor and
Lessee shall meet and confer in good faith to reach agreement on the
consolidation of the Relocation Space on the floor on which the Non-Protected
Space is located, the configuration of the Relocated Premises in a manner that
results in an equitable allocation of the window line between the Relocated
Premises and the Unoccupied Surrender Premises on the floor and that results
in the Relocated Premises and Unoccupied Surrender Premises being generally
equivalent in terms of marketability; provided, however, if there is
Unoccupied Surrender Premises located on more than one floor of the Building
on which Non-Protected Space is also located, then Lessor and Lessee shall
meet and confer in good faith to reach agreement on the consolidation of the
Unoccupied Surrender Space to the extent reasonably practicable and the
configuration of the Relocated Premises in a manner that results in an
equitable allocation of the window line between the Relocated Premises and the
Unoccupied Surrender Premises on each affected floor and that results in the
Relocated Premises and Unoccupied Surrender Premises being generally
equivalent in terms of marketability; and
	 
	 	(v)	 	Lessee shall, at Lessee’s sole cost and expense, build-out
the Relocated Premises, as Lessee deems appropriate, and shall pay all
expenses incurred by Lessee in connection with such relocation.





          (d) Lessee’s lease of the Premises (as the same may be reduced by the surrender of any
Unoccupied Surrender Premises) during each Option Term shall be upon all the terms, covenants,
agreements and conditions contained in the Lease, as amended by this Second Amendment; provided,
however, in no event shall Lessee’s extension Options extend the term of the Lease beyond December
31, 2079. Each Option to be exercised after January 1, 2013 shall be exercisable by written notice
from Lessee to Lessor not less than eighteen (18) months and not more than twenty-four (24) months
prior to the expiration of the then effective term of the Lease. In the event an Option to extend
the Lease is exercised in a timely fashion, the Lease shall be extended for the then applicable
Option Term upon all of the terms and conditions of the Lease, as amended by



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this Second Amendment, provided, however, that the Base Rent for such Option Term shall be an
amount equal to one hundred percent (100%) of the then Fair Market Rental Value of the Premises, as
determined pursuant to Paragraph 4(c) of this Second Amendment.




          (e) Lessee’s delivery of a notice exercising an extension Option shall be irrevocable,
notwithstanding the fact that (I) the Base Rent for the applicable Option Term, or (II) due to the
provisions of item (iii) of Paragraph 3(b), potentially the aggregate size of the Premises during
such Option Term, has not yet been determined on the date of such exercise by Lessee.




     4. Rent. With respect to all periods from and after January 1, 2013, Paragraph 6.2 of
the Original Lease shall be deleted in its entirety and Paragraph 4 of the First Amendment shall be
deleted in its entirety and replaced with this Paragraph 4.



          (a) Notwithstanding anything to the contrary set forth in Paragraph 4(c) below, during the
Second Extended Term the Base Rent payable by Lessee shall be as follows:




               (i) For the period January 1, 2013, through December 31, 2013, the sum of TEN MILLION ONE
HUNDRED ELEVEN THOUSAND SEVEN HUNDRED FIFTEEN DOLLARS ($10,111,715) per year, payable as otherwise
provided in the Lease in equal monthly installments of EIGHT HUNDRED FORTY-TWO THOUSAND SIX HUNDRED
FORTY-THREE DOLLARS ($842,643).



               (ii) For the period January 1, 2014, through December 31, 2014, the sum of TEN MILLION FOUR
HUNDRED SIXTY-SIX THOUSAND FIVE HUNDRED TWELVE DOLLARS ($10,466,512) per year, payable as otherwise
provided in the Lease in equal monthly installments of EIGHT HUNDRED SEVENTY-TWO THOUSAND TWO
HUNDRED NINE DOLLARS ($872,209).



               (iii) For the period January 1, 2015, through December 31, 2015, the sum of TEN MILLION EIGHT
HUNDRED TWENTY-ONE THOUSAND THREE HUNDRED NINE DOLLARS ($10,821,309) per year, payable as otherwise
provided in the Lease in equal monthly installments of NINE HUNDRED ONE THOUSAND SEVEN HUNDRED
SEVENTY-SIX DOLLARS ($901,776).



               (iv) For the period January 1, 2016, through December 31, 2016, the sum of ELEVEN MILLION ONE
HUNDRED SEVENTY-SIX THOUSAND ONE HUNDRED SIX DOLLARS ($11,176,106) per year, payable as otherwise
provided in the Lease in equal monthly installments of NINE HUNDRED THIRTY-ONE THOUSAND THREE
HUNDRED FORTY-TWO DOLLARS ($931,342).



               (v) For the period January 1, 2017, through December 31, 2017, the sum of ELEVEN MILLION FIVE
HUNDRED THIRTY THOUSAND NINE HUNDRED THREE DOLLARS ($11,530,903) per year, payable as otherwise
provided in the Lease in equal monthly installments of NINE HUNDRED SIXTY THOUSAND NINE HUNDRED
NINE DOLLARS ($960,909).



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               (vi) For the period January 1, 2018, through December 31, 2018, the sum of ELEVEN MILLION
EIGHT HUNDRED EIGHTY-FIVE THOUSAND SEVEN HUNDRED DOLLARS ($11,885,700) per year, payable as
otherwise provided in the Lease in equal monthly installments of NINE HUNDRED NINETY THOUSAND FOUR
HUNDRED SEVENTY-FIVE DOLLARS ($990,475).



               (vii) For the period January 1, 2019, through December 31, 2019, the sum of TWELVE MILLION
TWO HUNDRED FORTY THOUSAND FOUR HUNDRED NINETY-SEVEN DOLLARS ($12,240,497) per year, payable as
otherwise provided in the Lease in equal monthly installments of ONE MILLION TWENTY THOUSAND
FORTY-ONE DOLLARS ($1,020,041).



               (viii) For the period January 1, 2020, through December 31, 2020, the sum of TWELVE MILLION
FIVE HUNDRED NINETY-FIVE THOUSAND TWO HUNDRED NINETY-FOUR DOLLARS ($12,595,294) per year, payable
as otherwise provided in the Lease in equal monthly installments of ONE MILLION FORTY-NINE THOUSAND
SIX HUNDRED EIGHT DOLLARS ($1,049,608).



               (ix) For the period January 1, 2021, through December 31, 2021, the sum of TWELVE MILLION
NINE HUNDRED FIFTY THOUSAND NINETY-ONE DOLLARS ($12,950,091) per year, payable as otherwise
provided in the Lease in equal monthly installments of ONE MILLION SEVENTY-NINE THOUSAND ONE
HUNDRED SEVENTY-FOUR DOLLARS ($1,079,174).



               (x) For the period January 1, 2022, through December 31, 2022, the sum of THIRTEEN MILLION
THREE HUNDRED FOUR THOUSAND EIGHT HUNDRED EIGHTY-EIGHT DOLLARS ($13,304,888) per year, payable as
otherwise provided in the Lease in equal monthly installments of ONE MILLION ONE HUNDRED EIGHT
THOUSAND SEVEN HUNDRED FORTY-ONE DOLLARS ($1,108,741).


The aforesaid rental schedule is based upon and reflects Lessee’s agreement that, from and after
January 1, 2013, (x) Lessee’s obligations for the maintenance, repair and operating expenses under
the Lease shall be interpreted in accordance with the intent that the Lease provisions relating to
payment of Taxes and Operating Expenses shall be converted from a Base Year computation to a
straight net basis computation, as contemplated by the provisions of this Second Amendment, and (y)
Lessee shall be responsible, at its sole cost and expense, for (A) performing maintenance and
repair of the Building pursuant to the duties and obligations set forth in Paragraph 11(a) below,
and (B) directly contracting and paying for all utilities (including, without limitation,
electricity, gas, water, sewer and scavenger services) and janitorial services provided to Lessee,
and Lessee shall directly contract with such utility or service provider for such utilities and
janitorial services and shall pay directly to such utility or service providers all fees, charges
and other costs billed or incurred in connection therewith; provided, however, that Lessor shall
procure, and (subject to Lessee’s obligation with respect to payment of Lessee’s Percentage of
Operating Expenses for the Building and Exterior



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Common Areas with respect thereto) pay all costs of, garbage and recycling collection services for
the Building and Exterior Common Areas.




          (b) Intentionally Omitted.




          (c) During each additional Option Term validly exercised pursuant to Paragraph 6.1 of the
Original Lease (as modified by Paragraph 3 of this Second Amendment), the Base Rent for such Option
Term shall be an amount equal to one hundred percent (100%) of the fair market rental value of the
Premises (the “Fair Market Rental Value”) as measured during the applicable Comparison Period (as
such term is defined in Paragraph 4(c)(ii) below). As used herein, the Fair Market Rental Value
shall mean the rental rate for the Premises in their “as is” condition determined by reference to
the weighted average monthly amount per rentable square foot, including, without limitation, base
rent, additional rent and all other monetary payments and rent escalations, that a willing tenant
has agreed to pay and a willing landlord has agreed to accept, in an arms length transaction, for
space in the Comparable Buildings (as defined in Paragraph 4(c)(i) below) leased pursuant to
Comparable Leases (as defined in Paragraph 4(c)(ii) below), and taking into consideration the
additional factors set forth in Paragraphs 4(c)(iii) and 4(c)(iv) below to the extent provided
therein:




               (i) For the purposes hereof, the term “Comparable Buildings” shall mean Class A office
buildings (including the Building and other buildings in Levi’s Plaza and in the vicinity of Levi’s
Plaza) of not less than 100,000 square feet of total space, including rentable space and common
areas, located within San Francisco, taking into account adjustments for location, amenities,
building efficiency, the condition of the space and building and all concessions offered by the
landlords with respect to each such property.



               (ii) For purposes hereof, “Comparable Leases” shall mean fully executed leases that (A)
subject to adjustment as provided below, are for premises utilized for office purposes, located
entirely or substantially entirely within the Comparable Buildings and including at least one full
floor and not less than forty thousand (40,000) rentable square feet, excluding areas subject to
expansion options (the “Size Threshold”), (B) subject to adjustment as provided below, have lease
execution dates within the twelve (12) month period beginning on the date six (6) months prior to
the date Lessee exercises the applicable Option (the “Comparison Period”) and lease term
commencement dates that occur within thirty (30) months after such execution date, (C) have a term
of not less than eight (8) years and not more than twelve (12) years (excluding extension or
renewal options), (D) are not sublease transactions (except in cases where the master lease is a
ground lease or a lease entered into for financing purposes), (E) do not involve a tenant that owns
an equity interest in the landlord or in the Comparable Building, (F) are not renewals or
extensions or expansions of an existing lease (except as permitted below), (G) are not executed by
an institutional lender in possession following a foreclosure by such institutional lender (except
as permitted below), and (H) are not for space at a property that was, at the time such lease was
executed, subject to a deed of trust that was being foreclosed (except as permitted below)



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(the criteria in the preceding items (A) through (H) are referred to herein collectively as
the “Comparable Lease Criteria”).




     Initial Review: Initially, Lessor and Lessee shall review leases within the
Comparable Buildings meeting the Size Threshold and executed during the Comparison Period in an
effort to identify at least six (6) Comparable Leases (as defined utilizing the Comparable Lease
Criteria) (each lease so identified shall be referred to herein as a “Qualifying Comparable Lease”
and the initial review conducted by Lessee and Lessor shall be referred to herein as the “Initial
Review”).



     Second Review: If, after review of leases within the Comparable Buildings meeting the
Size Threshold and executed during the Comparison Period, there are fewer than six (6) Qualifying
Comparable Leases (as defined utilizing the Comparable Lease Criteria) identified following the
Initial Review, then Lessor and Lessee shall make adjustments to the Comparison Period (as provided
below) in an attempt to identify sufficient additional Comparable Leases to be added to the
Qualifying Comparable Leases identified during the Initial Review to reach six (6) Qualifying
Comparable Leases (this second review conducted by Lessee and Lessor shall be referred to herein as
the “Second Review” and each Comparable Lease identified during this Second Review shall constitute
a Qualifying Comparable Lease notwithstanding the fact that the Comparison Period has been so
adjusted). During the Second Review, the Comparison Period shall be expanded in two (2) month
increments, for each increment adding one (1) month at each end of the Comparison Period, until
there are sufficient additional Comparable Leases identified during such Second Review when added
to the Qualifying Comparable Leases identified during the Initial Review so that there are at least
six (6) Qualifying Comparable Leases; provided, however, in no event shall the Comparison Period be
expanded to exceed twenty-four (24) months in length.



     Third Review: If the Comparison Period has been expanded to twenty-four (24) months
and there continue to be fewer than six (6) Qualifying Comparable Leases identified following the
Second Review, then Lessor and Lessee shall make adjustments to the Size Threshold (as provided
below) in an attempt to identify sufficient additional Comparable Leases to be added to the
Qualifying Comparable Leases identified during the Initial Review and the Second Review to reach
six (6) Qualifying Comparable Leases (this third review conducted by Lessee and Lessor shall be
referred to herein as the “Third Review” and each Comparable Lease identified during this Third
Review shall constitute a Qualifying Comparable Lease notwithstanding the fact that the Size
Threshold is adjusted as provided herein). During the Third Review, the original twelve (12) month
Comparison Period shall be reinstated and the Size Threshold shall be reduced in increments of one
thousand (1,000) rentable square feet until there are sufficient additional Comparable Leases
identified during such Third Review when added to the Qualifying Comparable Leases identified
during the Initial Review and the Second Review so that there are at least six (6) Qualifying
Comparable Leases; provided, however, that in no event shall the Size Threshold be reduced below
twenty-thousand (20,000) rentable square feet.



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     Fourth Review: If the Size Threshold has been reduced to twenty-thousand (20,000)
rentable square feet and there continue to be fewer than six (6) Qualifying Comparable Leases
identified following the Third Review, then Lessor and Lessee shall make adjustments to the
Comparison Period (as provided below) in an attempt to identify sufficient additional Comparable
Leases to be added to the Qualifying Comparable Leases identified during the Initial Review, the
Second Review and the Third Review to reach six (6) Qualifying Comparable Leases (this fourth
review conducted by Lessee and Lessor shall be referred to herein as the “Fourth Review” and each
Comparable Lease identified during this Fourth Review shall constitute a Qualifying Comparable
Lease notwithstanding the fact that the Size Threshold and the Comparison Period is adjusted as
provided herein). During the Fourth Review, Lessor and Lessee shall reinstate the original
forty-thousand (40,000) rentable square foot Size Threshold, the Comparison Period shall be
increased in two (2) month increments, for each increment adding one month at each end of the
Comparison Period, and the Size Threshold shall be reduced (in tandem with the increases in the
Comparison Period) in increments of three thousand three hundred thirty-three (3,333) rentable
square feet until there are sufficient additional Comparable Leases identified during such Fourth
Review when added to the Qualifying Comparable Leases identified during the Initial Review, the
Second Review and the Third Review so that there are at least six (6) Qualifying Comparable Leases;
provided, however, that in no event shall the Comparison Period exceed twenty-four (24) months, nor
shall the Size Threshold be less than twenty thousand (20,000) rentable square feet.



     Fifth Review: If the Comparison Period has been expanded to twenty-four (24) months
utilizing the Size Threshold of twenty thousand (20,000) rentable square feet and there continue to
be fewer than six (6) Qualifying Comparable Leases identified following the Fourth Review, then
Lessor and Lessee shall reinstate the original twelve (12) month Comparison Period and the original
forty thousand (40,000) square foot Size Threshold and shall review leases that (x) are renewals or
extensions of existing leases that are negotiated at arm’s length between the landlord and tenant
without reference to any minimum rent requirements established by an existing lease, (y) leases
that are executed by an institutional lender following a foreclosure by such institutional lender,
and (z) leases for space at a property that was, at the time such lease was executed, subject to a
deed of trust that was being foreclosed (leases identified in the preceding items (x), (y) and (z)
shall be referred to herein as the “Suspect Leases”) in an attempt to identify sufficient
additional Comparable Leases to be added to the Qualifying Comparable Leases identified during the
Initial Review, the Second Review, the Third Review and the Fourth Review to reach six (6)
Qualifying Comparable Leases (this fifth review conducted by Lessee and Lessor shall be referred to
herein as the “Fifth Review” and each Comparable Lease identified during this Fifth Review shall
constitute a Qualifying Comparable Lease notwithstanding the fact that the Suspect Lease violates
the Comparable Lease Criteria set forth in items (F), (G) or (H) above); provided, however, that
Suspect Leases may only be considered to the extent necessary to achieve a total of six (6)
Qualifying Comparable Leases and in no event shall more than three (3) Suspect Leases be included
as Qualifying Comparable Leases.



     Sixth Review: If the Suspect Leases have been considered and there continue to be
fewer than six (6) Qualifying Comparable Leases identified following the Fifth



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Review, then Lessor and Lessee shall make adjustments to the Comparison Period (as provided below)
in an attempt to identify sufficient additional Comparable Leases together with Suspect Leases to
be added to the Qualifying Comparable Leases identified during the Initial Review, the Second
Review, the Third Review, the Fourth Review and the Fifth Review to reach six (6) Qualifying
Comparable Leases (this sixth review conducted by Lessee and Lessor shall be referred to herein as
the “Sixth Review” and each Comparable Lease identified during this Sixth Review shall constitute a
Qualifying Comparable Lease notwithstanding the fact that the Comparison Period is adjusted as
provided herein or Suspect Leases are included which violate the Comparable Lease Criteria set
forth in items (F), (G) or (H) above); provided, however, in no event shall more than three (3)
Suspect Leases be included as Qualifying Comparable Leases, whether during the Fifth Review or this
Sixth Review. During the Sixth Review, the Comparison Period shall be increased in two (2) month
increments, for each increment adding one month at each end of the Comparison Period, until there
are sufficient additional Comparable Leases identified during such Sixth Review when added to the
Qualifying Comparable Leases identified during the Initial Review, the Second Review, the Third
Review, the Fourth Review and the Fifth Review so that there are at least six (6) Qualifying
Comparable Leases; provided, however, that in no event shall the Comparison Period exceed
twenty-four (24) months.



     Seventh Review: If the Suspect Leases have been considered and the Comparison Period
has been expanded to twenty-four (24) months and there continue to be fewer than six (6) Qualifying
Comparable Leases identified following the Sixth Review, then the Comparison Period shall remain at
twenty-four (24) months and Lessor and Lessee shall make adjustments to the Size Threshold (as
provided below) in an attempt to identify sufficient additional Comparable Leases together with
Suspect Leases to be added to the Qualifying Comparable Leases identified during the Initial
Review, the Second Review, the Third Review, the Fourth Review, the Fifth Review and the Sixth
Review to reach six (6) Qualifying Comparable Leases (this seventh review conducted by Lessee and
Lessor shall be referred to herein as the “Seventh Review” and each Comparable Lease identified
during this Seventh Review shall constitute a Qualifying Comparable Lease notwithstanding the fact
that the Comparison Period and Size Threshold are each adjusted as provided herein or Suspect
Leases are included which violate the Comparable Lease Criteria set forth in items (F), (G) or (H)
above); provided, however, in no event shall more than three (3) Suspect Leases be included as
Qualifying Comparable Leases, whether during the Fifth Review, the Sixth Review or this Seventh
Review. During the Seventh Review, the Comparison Period shall remain at twenty-four (24) months
and the Size Threshold shall be reduced in increments of one thousand (1,000) rentable square feet
until there are sufficient additional Comparable Leases identified during such Seventh Review when
added to the Qualifying Comparable Leases identified during the Initial Review, the Second Review,
the Third Review, the Fourth Review, the Fifth Review and the Sixth Review so that there are at
least six (6) Qualifying Comparable Leases; provided, however, that in no event shall the Size
Threshold be decreased below twenty-thousand (20,000) square feet.


Notwithstanding the foregoing, if at least six (6) Qualifying Comparable Leases have not been
identified despite the completion of the seven reviews described above, the parties



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and the Qualified Appraisers may consider any lease transactions or other data as evidence of Fair
Market Rental Value, with the understanding that in the event such other transactions or data are
presented to a third Qualified Appraiser pursuant to Paragraph 4(g)(iii) below, the third Qualified
Appraiser shall make its own assessment of the probative value of such other transactions or data.




               (iii) To assure that the Fair Market Rental Value reflects the adjustments agreed upon by the
parties (disregarding any brokerage commissions paid in connection with the Qualifying Comparable
Leases), the parties or appraisers shall make appropriate adjustments to the rental rates of the
Qualifying Comparable Leases after considering the following factors and comparing the Qualifying
Comparable Leases to the Lease:



                    (A) the rental rate of any Qualifying Comparable Lease shall be adjusted to account for any
differences (such as a base year computation method), if any, between such Qualifying Comparable
Lease and the Lease with respect to the operating expenses, taxes, and other payments;



                    (B) if a tenant under a Qualifying Comparable Lease is receiving free rent, landlord lease
assumption payments or allowances, moving expenses or other customary and ordinary material
economic office rental market concessions and inducements, the rental rate of such Qualifying
Comparable Lease shall be adjusted to account for the amortized portion of the rental attributable
to such concessions and inducements;



                    (C) if the base rent of a Qualifying Comparable Lease includes payment by the landlord for
utilities, janitorial services or other material expenses for standard office hour usage, and such
expenses are directly contracted for and paid by Lessee under the Lease, then the rental rate of
such Qualifying Comparable Lease shall be adjusted to account for the portion of the rental
attributable to such expenses;



                    (D) if a tenant under a Qualifying Comparable Lease is receiving parking allowances or parking
rights in a proportionately greater or lesser amount than the parking allowances or parking rights
provided to Lessee under the Lease, then the rental rate of such Qualifying Comparable Lease shall
be adjusted to account for the portion of the rental attributable to such greater or lesser benefit
being provided to the tenant under said Qualifying Comparable Lease;



                    (E) the rental rate of any Qualifying Comparable Lease shall be adjusted to account for any
differences between a “Comparable Lease Tenant Improvement Package” granted to a tenant under a
Qualifying Comparable Lease, and the “Adjusted Value of the Premises’ Tenant Improvements”, which
adjustment, if any, shall be determined in accordance with the provisions contained in Schedule
4(c) attached to the First Amendment;



                    (F) if the rentable square footage of a Qualifying Comparable Lease premises has been
established utilizing a measurement standard other



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than the Standard Method for Measuring Floor Area in Office Buildings published by BOMA,
ANSI/BOMA 765.1-1996 (the “1996 BOMA Standard”, provided that if the 1996 BOMA Standard is replaced
by a successor BOMA standard method, the successor standard method published by BOMA (or any
comparable successor organization) most recently prior to the commencement of the subject Option
Term for which the Fair Market Rental Value is being determined shall be used (the “Remeasurement
Standard”), the rental rate of such Qualifying Comparable Lease shall be adjusted (either up or
down) to be equivalent to the rental rate per rentable square foot that would result in the same
total base rent amount if the Remeasurement Standard had instead been utilized to calculate the
rentable square footage of such Qualifying Comparable Lease premises; and




                    (G) any other material and relevant factor that, in a good faith determination of the Fair
Market Rental Value, should fairly and reasonably be taken into account, excluding any brokerage
commissions paid in connection with the Qualifying Comparable Leases; provided, however, the
determination of Fair Market Rental Value shall be made without consideration of hypothetical or
speculative future market conditions as may exist at the time of the beginning of the Option Term,
but must be made based upon the rental terms set forth in the Qualifying Comparable Leases.



               (iv) Whenever it is necessary or appropriate to utilize a discount rate in connection with the
determination of Fair Market Rental Value pursuant to this Paragraph 4(c), the parties or
appraisers shall agree upon and use a discount rate that is reasonably appropriate under the
then-prevailing market conditions.



          (d) Notwithstanding anything in Paragraph 4(c) to the contrary, in no event shall the Base
Rent for any Option Term, excluding the Second Extended Term, be less than the Base Rent in effect
for the term ending immediately prior to such Option Term; provided, however, Lessor and Lessee
hereby acknowledge that Base Rent figures will vary depending upon whether the Lease is written on
a triple net basis, a gross basis, or a modified gross (i.e. Base Year operating expense) basis and
Lessor and Lessee agree that in determining the effect of this Paragraph, adjustments shall be made
to the respective Base Rent figures to ensure that the Base Rent for the end of a particular term
is being measured on a comparable and equitable basis to the Base Rent to be in effect at the start
of the ensuing Option Term.




          (e) During the Comparison Period and until such time as the Fair Market Rental Value has been
finally determined for the Option Term, each party shall promptly give the other full access to all
written information that it has concerning the Comparable Leases, including, without limitation,
copies of lease agreements. Each party shall agree to appropriate and reasonable confidentiality
agreements preserving the confidentiality of shared information.




          (f) Within two hundred forty (240) days after the date on which Lessee delivers to Lessor its
notice of the exercise of an Option, Lessee and Lessor shall notify each other in writing of their
respective proposed Base Rent for such Option Term (“Rent Proposal Notice”). Lessor and Lessee
shall arrange for a simultaneous exchange



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of such Rent Proposal Notices. If the proposed Base Rent set forth in Lessor’s Rent Proposal
Notice is less than or equal to one hundred five percent (105%) of the proposed Base Rent set forth
in Lessee’s Rent Proposal Notice, then the Base Rent during such Option Term shall be the average
amount of the two proposed Base Rent amounts. If the proposed Base Rent set forth in Lessor’s Rent
Proposal Notice is greater than one hundred five percent (105%) of the proposed Base Rent set forth
in Lessee’s Rent Proposal Notice, then Lessor and Lessee shall thereafter promptly meet and confer
regarding Lessor’s proposed Base Rent for such Option Term and Lessee’s proposed Base Rent for such
Option Term in an attempt to reach agreement on a determination of the Base Rent for such Operation
Term. If the parties are thereafter unable to agree on a determination of Base Rent for such
Option Term, then, within sixty (60) days after Lessee’s receipt of Lessor’s Rent Proposal Notice,
Lessee shall have the right either to (i) accept Lessor’s statement of Base Rent reflected in
Lessor’s Rent Proposal Notice as the Base Rent for the Option Term, or (ii) elect to determine the
Fair Market Rental Value pursuant to an appraisal process to be conducted pursuant to the
provisions of Paragraph 4(g) below (the “appraisal”). Failure on the part of Lessee to elect such
appraisal process within such sixty (60) day period shall constitute acceptance of the Base Rent
for the Option Term as determined by Lessor, as stated within Lessor’s Rent Proposal Notice. If
Lessee elects to determine the Fair Market Rental Value pursuant to the appraisal process, the
appraisal shall be concluded on or before the Outside Determination Date (as defined in Paragraph
4(g)(ii) below), subject to extension if a third appraiser is required and does not act or is not
able to act in a timely manner. To the extent that the appraisal has not been completed prior to
the commencement of an Option Term, Lessee shall continue to pay Base Rent at the rate in effect
during the last month of the term prior to commencement of the subject Option Term until the Fair
Market Rental Value has been determined and, within thirty (30) days after the Fair Market Rental
Value is ultimately determined by such appraisal, as provided herein, Lessee shall pay to Lessor an
amount equal to the difference between the amounts previously paid by Lessee during such Option
Term as Base Rent and the amount that should have been paid using the actual Base Rent for the
subject Option Term.




          (g) In the event that Lessee elects to determine the Fair Market Rental Value pursuant to an
appraisal process, the appraisal shall be conducted as follows:




               (i) Lessee shall make a demand for an appraisal in writing within sixty (60) days after
receipt of Lessor’s Rent Proposal Notice given under Paragraph 4(f) above, specifying in such
written demand the name and address of the person to act as the appraiser on Lessee’s behalf. The
appraiser shall be a Qualified Appraiser (as defined below). Failure on the part of Lessee to make
a proper and timely demand for such appraisal and appointment of a Qualified Appraiser shall
constitute a waiver of the right thereto; provided, however, that no technical defect (including,
without limitation, any dispute concerning the qualifications of a proposed Qualified Appraiser) in
a notice that timely and fairly advises Lessor that Lessee demands an appraisal shall be a waiver.
Within thirty (30) days after the service of the demand for such appraisal, Lessor shall give
written notice to Lessee, specifying the name and address of the person designated by Lessor to act
as the Qualified Appraiser on its behalf. Failure on the part of Lessor to make such appointment
in a timely manner shall



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constitute a waiver of the right thereto, in which event appointment of party appraisers shall
be deemed complete; provided, however, that no technical defect (including, without limitation, any
dispute concerning the qualifications of a proposed Qualified Appraiser) in a notice that timely
and fairly advises Lessee of Lessor’s appointment of an appraiser shall be a waiver. As used
herein, the term “Qualified Appraiser” shall mean a real estate appraiser who (a) is a member of
the American Institute of Real Estate Appraisers (MAI) or any comparable successor organization,
(b) has at least ten (10) years professional experience within San Francisco, (c) is generally
familiar with first-class commercial office space in and has experience in arbitrating the fair
market rental value of commercial office spaces within San Francisco, and (d) has arbitrated the
fair market value of at least three (3) separate commercial office space leases covering not less
than fifty thousand (50,000) rentable square feet each.




               (ii) In the event that two Qualified Appraisers are chosen pursuant to Paragraph 4(g)(i)
above, the Qualified Appraisers so chosen shall, no later than the date (the “Outside Determination
Date”) that is sixty (60) days following the date on which the second such Qualified Appraiser is
chosen, determine the Fair Market Rental Value. In connection therewith, the Qualified Appraisers
shall each view the Premises and the premises pertaining to the Qualifying Comparable Leases and
shall meet and confer with each other about the Fair Market Rental Value. If the two Qualified
Appraisers are unable to agree upon a determination of Fair Market Rental Value on or before the
Outside Determination Date (as the same may have been extended pursuant to Paragraph 4(g)(iv)
below), then they, themselves, shall appoint a third Qualified Appraiser, who shall be impartial.
In the event they are unable to agree upon such appointment within ten (10) days after expiration
of the Outside Determination Date, the third Qualified Appraiser shall be selected by the parties
themselves, if they can agree thereon, within a further period of seven (7) days. If the parties
do not so agree within such further seven (7) day period, then either party, on behalf of both, may
request appointment of such a Qualified Appraiser by the then Presiding Judge of the Superior Court
in and for the City and County of San Francisco (pursuant to such procedure as the Presiding Judge
shall determine, acting in his private and not in his official capacity), and the other party shall
not raise any question as to such Judge’s full power and jurisdiction to entertain the application
for and make the appointment.



               (iii) Where the Fair Market Rental Value cannot be resolved by agreement between the two
Qualified Appraisers selected by Lessor and Lessee or settlement between the parties prior to or
during the course of the appraisal process, the Fair Market Rental Value shall be determined by the
three Qualified Appraisers within thirty (30) days of the appointment of the third Qualified
Appraiser in accordance with the following procedure: The Qualified Appraiser selected by each of
the parties shall state in writing his or her determination of the Fair Market Rental Value
supported by the reasons therefor with counterpart copies to each party. The Qualified Appraisers
shall arrange for a simultaneous exchange of such proposed resolutions. The role of the third
Qualified Appraiser shall be to select which of the two proposed resolutions most closely
approximates his or her determination of the Fair Market Rental Value. In connection therewith,
the third Qualified Appraiser may view the Premises and the premises pertaining to the Qualifying
Comparable Leases. The third Qualified Appraiser shall



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have no right to propose a middle ground or any modification of either of the two proposed
resolutions. The third Qualified Appraiser shall issue a written statement explaining his or her
decision. The resolution he or she chooses as most closely approximating his or her determination
shall constitute the decision of the Qualified Appraisers and be final and binding upon the
parties.




               (iv) In the event of a failure, refusal or inability of any Qualified Appraiser to act, his or
her successor shall be appointed by him or her or by the party who appointed said Qualified
Appraiser if the Qualified Appraiser is unable or unwilling to act, but in the case of the third
Qualified Appraiser, his or her successor shall be appointed in the same manner as provided for
appointment of the third Qualified Appraiser and, in connection therewith, the Outside
Determination Date shall be extended to be the date upon which Lessor and Lessee first learned that
the third Qualified Appraiser failed, refused or was unable to act. Any decision in which the
Qualified Appraiser appointed by Lessor and the Qualified Appraiser appointed by Lessee concur
shall be binding and conclusive upon the parties. Each party shall pay the fee and expenses of its
respective Qualified Appraiser and both shall share the fee and expenses of the third Qualified
Appraiser, if any.



     5. Lessee Approval Rights with Respect to other Tenants located within Levi’s Plaza.



          (a) Key Competitors. Notwithstanding anything to the contrary contained within the
Lease, Lessor shall not, without the prior consent of Lessee, lease space within Levi’s Plaza, or
consent to the assignment of a lease within Levi’s Plaza, or consent to the sublease of space
within Levi’s Plaza, to any Key Competitor (as such term is defined below); provided, however, in
connection with Lessor’s consent to an assignment of a lease or sublease of space, no such
limitation shall apply nor shall any consent of Lessee be required if the withholding of Lessor’s
consent would violate the terms of the underlying lease or otherwise result in a violation of
applicable law. “Key Competitors” means apparel companies in the retail or wholesale marketplace
similar to the competitors listed as Key Competitors below, as such list may be updated from time
to time as provided below, that design, manufacture or sell products that directly compete with any
of Lessee’s brands, products, or companies. Key Competitors include, but are not limited to: The
Gap Inc (including Old Navy and Banana Republic); VF-Corp (including Lee and Wrangler brands);
Abercrombie & Fitch (including Hollister and Ruehl); American Eagle; Ralph Lauren Brands (including
Polo and RL); Tommy Hilfiger; Calvin Klein; Seven for All Mankind; Lucky; Guess; Liz Claiborne;
Jordache; and G-Star. Lessee will notify Lessor not less frequently than every five (5) years of
its Key Competitors and shall have the right to notify Lessor at any time of companies that are Key
Competitors as Lessee becomes aware of their identity.




          (b) Consent Process. If Lessor desires to lease any space at Levi’s Plaza or consent
to an assignment or sublease to a prospective tenant that (i) is identified above as a Key
Competitor, (ii) has been identified by Lessee as a Key Competitor in a writing delivered to Lessor
after the date of this Amendment, or (iii) Lessor should reasonably believe, in Lessor’s reasonable
judgment, based upon information provided to



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Lessor at such time, is a Key Competitor, Lessor will inform Lessee in writing in advance of
entering into any binding agreement with such prospective tenant for any premises located within
Levi’s Plaza (or, in the case of an assignment or sublease, prior to consenting to such assignment
or sublease), which notice shall specify the name, type of business and proposed use by such
prospective tenant; provided, however, in connection with Lessor’s consent to an assignment of a
lease or sublease of space, no such limitation shall apply nor shall any notice to or consent of
Lessee be required if the withholding of Lessor’s consent would violate the terms of the underlying
lease or otherwise result in a violation of applicable law. If such prospective
tenant/assignee/sublessee is an actual Key Competitor within the meaning of Paragraph 5(a) above,
Lessee may withhold its consent to such proposed tenant/assignee/sublessee by written notice to
Lessor delivered within six (6) business days after Lessor’s request, which notice shall indicate
that such prospective tenant/assignee/sublessee is a Key Competitor together with a statement from
Lessee explaining the basis on which the prospective tenant/assignee/sublessee constitutes a Key
Competitor; provided, however, in connection with Lessor’s consent to an assignment of a lease or
sublease of space, Lessee shall have no right to consent to or otherwise disapprove any such
assignee or sublessee if the withholding of Lessor’s consent to any such assignment of a lease or
subleasing of space would violate the terms of the underlying lease or otherwise result in a
violation of applicable law. Failure of Lessee to approve or disapprove any such proposed
tenant/assignee/sublessee within such six (6) business day period shall be deemed Lessee’s approval
of such tenant/assignee/sublessee and such six (6) business day period shall constitute Lessee’s
only review right with respect to such tenant/assignee/sublessee. Lessee’s determination of
whether a prospective tenant/assignee/sublessee is a Key Competitor shall be made in good faith.
If Lessor leases any space to an actual Key Competitor or consents to a sublease or assignment to a
Key Competitor without obtaining Lessee’s consent when required hereunder, Lessor shall be liable
for all actual costs, expenses, damages and losses incurred by Lessee as a result of such lease and
tenancy; provided, however, (A) in the case of Lessor’s consent to an assignment of a lease or
sublease of space, Lessor shall have no such liability to Lessee (irrespective of whether or not
such assignee/sublessee is an actual Key Competitor) if the withholding of Lessor’s consent would
violate the terms of the underlying lease or otherwise result in a violation of applicable law, and
(B) in no event shall Lessor be liable to Lessee under any circumstances for injury or damage to,
or interference with Lessee’s business, including, but not limited to, loss of profits or other
revenues, loss of business opportunity or loss of goodwill; provided, further, however, that the
parties hereby stipulate that in view of the irreparable harm likely to result to Lessee’s business
in the event of a breach of the provisions of this Paragraph 5 by Lessor, Lessee shall be entitled
to obtain injunctive relief to enforce its rights pursuant to this Paragraph 5, provided, that no
such injunctive relief shall be afforded Lessee in the case of Lessor’s consent to an assignment of
a lease or sublease of space, if the withholding of Lessor’s consent would violate the terms of the
underlying lease or otherwise result in a violation of applicable law.




     6. Subordination and Attornment, Non-Disturbance Agreement. Supplementing the
provisions of Paragraph 8 of the First Amendment, Lessee agrees to enter into and Lessor shall
cause Lessor’s current lender to enter into a Subordination, Attornment and Non-Disturbance
Agreement, concurrently with the execution of this



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Second Amendment by Lessor and Lessee, that in addition to the provisions set forth in
Paragraph 8 shall include the lender’s agreement to be bound by Lessee’s offset rights set forth in
Paragraph 15 below.



     7. Right of First Offer to Lease. Paragraph 11 of the First Amendment is deleted in
its entirety and replaced with this Paragraph 7. In connection therewith, Schedule 11(c)
to the First Amendment is deleted in its entirety and replaced with Schedule 7(c) attached
hereto. Lessor hereby grants to Lessee a right of first offer with respect to office space that
has Become Available (as hereinafter defined) in either the building located at 1255 Battery
Street, San Francisco, California (the “Haas Building”) or the building located at 1265 Battery
Street, San Francisco, California (the “Stern Building”) (such space within the Haas Building or
the Stern Building, herein the “First Offer Space”). Lessee’s right of first offer as provided in
this Paragraph 7 shall be personal to Lessee and shall not be assignable by Lessee nor included in
any rights of any sublessee from Lessee (provided, however, that Lessee may assign its right of
first offer in connection with an assignment of the Lease to an Affiliate of Lessee or a Permitted
Assignee, and Lessee may grant a sublessee an option to expand contingent upon Lessee’s exercise of
its right of first offer with respect to First Offer Space as provided hereunder), and shall be
subject to the following terms and conditions:



          (a) Procedure for Offer. From and after the Effective Date, Lessor shall notify
Lessee (the “First Offer Notice”) from time to time when any First Offer Space has Become Available
for lease to third parties, provided that no Superior Rights Holder wishes to exercise a Superior
Right (as such terms are defined in Paragraph 7(c) below) to lease such First Offer Space and that
such right of first offer has not otherwise terminated as set forth in Paragraph 7(f) below.
Pursuant to such First Offer Notice, Lessor shall offer to lease to Lessee the First Offer Space
which has then Become Available. The First Offer Notice shall describe the First Offer Space so
offered to Lessee and shall set forth the base rent, additional rent, the term for such lease of
the First Offer Space, any tenant improvement allowance, relocation allowance, free rent period or
similar economic enhancements or inducements to the prospective tenant, and the extent to which
operating expenses, taxes and insurance are to be charged to the prospective tenant (collectively,
the “First Offer Effective Rent”) and any expansion rights, rights of first offer to lease or
extension rights (the “First Offer Renewal/Expansion Rights”) and such other lease terms upon which
Lessor is willing to lease such First Offer Space to Lessee (the First Offer Effective Rent, the
First Offer Renewal/Expansion Rights and such other terms are referred to herein as the “First
Offer Terms”). The First Offer Terms shall be the then prevailing fair market rent and other terms
which Lessor intends to offer the First Offer Space for lease to third parties.




          (b) Procedure for Acceptance.




               (i) With respect to First Offer Space that has Become Available (as such term is defined in
Paragraph 7(c) below) on or before December 31, 2022, if Lessee wishes to exercise Lessee’s right
of first offer with respect to the First Offer Space described in the First Offer Notice, then
within twelve (12) business days after delivery of the First Offer Notice to Lessee, Lessee shall
deliver written notice to



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Lessor (“Lessee’s Exercise Notice”), evidencing Lessee’s exercise of its right of first offer
with respect to the entire First Offer Space described in the First Offer Notice, on the First
Offer Terms. If Lessee does not so notify Lessor within such twelve (12) business day period, then
Lessor shall be free to lease the First Offer Space described in the First Offer Notice to any
third party, and Lessee shall have no further rights hereunder with respect to such First Offer
Space, until Lessee’s rights hereunder revive as provided in Paragraph 7(g) below. Notwithstanding
anything to the contrary contained herein, Lessee must elect to exercise its right of first offer,
if at all, with respect to all of the First Offer Space offered by Lessor to Lessee at any
particular time (provided that all such First Offer Space is contiguous space or has otherwise been
vacated by a single tenant or occupant (herein, “single user space”)), and Lessee may not elect to
lease only a portion thereof. If Lessee does not elect to exercise its right of first offer with
respect to all of the contiguous or single user space then offered by Lessor, Lessee shall have no
further right of first offer with respect to that First Offer Space, until Lessee’s rights
hereunder revive as provided in Paragraph 7(g) below.




               (ii) With respect to First Offer Space that has Become Available after December 31, 2022, if
Lessee wishes to exercise Lessee’s right of first offer with respect to the First Offer Space
described in the First Offer Notice, then within twelve (12) business days after delivery of the
First Offer Notice to Lessee, Lessee shall deliver Lessee’s Exercise Notice, evidencing Lessee’s
exercise of its right of first offer with respect to the entire First Offer Space described in the
First Offer Notice, either on the First Offer Terms or on terms to be negotiated between Lessor and
Lessee as provided in this Paragraph 7(b)(ii). If Lessee does not so notify Lessor within such
twelve (12) business day period, then Lessor shall be free to lease the First Offer Space described
in the First Offer Notice to any third party, and Lessee shall have no further rights hereunder
with respect to such First Offer Space, until Lessee’s rights hereunder revive as provided in
Paragraph 7(g) below. Notwithstanding anything to the contrary contained herein, Lessee must elect
to exercise its right of first offer, if at all, with respect to all of the First Offer Space
offered by Lessor to Lessee at any particular time (provided that all such First Offer Space is
“single user space” as such term is defined in the parenthetical within Paragraph 7(b)(i) above),
and Lessee may not elect to lease only a portion thereof. If Lessee does not elect to exercise its
right of first offer with respect to all of the contiguous or single user space then offered by
Lessor, Lessee shall have no further right of first offer with respect to that First Offer Space,
until Lessee’s rights hereunder revive as provided in Paragraph 7(g) below. In the event that
Lessee does deliver Lessee’s Exercise Notice to Lessor within the twelve (12) business day period
and Lessee’s Exercise Notice states that such exercise shall be on terms to be negotiated between
Lessor and Lessee, then Lessor and Lessee agree to negotiate in good faith for a period of up to
twenty (20) days after Lessor’s receipt of Lessee’s Exercise Notice to determine the rent (based on
the then prevailing fair market rent), other economic terms and other material terms. If Lessor
and Lessee cannot in good faith agree upon the rent, other economic and other material terms
within such twenty (20) day period, then Lessor shall be free to lease the First Offer Space
described in the First Offer Notice to any third party and Lessee shall have no further right of
first offer with respect to that First Offer Space, until Lessee’s rights hereunder revive as
provided in Paragraph 7(g) below. Lessor and Lessee acknowledge and agree that neither the
determination of the First



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Offer Terms nor any negotiated rent (including, without limitation, the determination of the
then prevailing fair market rent) and other economic terms shall be subject to arbitration or other
judicial determination in the event that Lessor and Lessee are unable to agree thereon; provided,
however, nothing contained herein shall excuse either Lessor’s or Lessee’s obligation to act in
good faith.




          (c) Superior Rights. Lessee’s right of first offer shall be subordinate to the rights
specifically described on Schedule 7(c) (collectively, the “Superior Rights”) of the named
tenants (collectively, the “Superior Rights Holders”) under the leases (collectively, the “Superior
Leases”) identified on Schedule 7(c) attached hereto, for so long as those named tenants
remain the tenants under such Superior Leases and such Superior Leases remain in effect. Without
limiting the foregoing, Lessor and Lessee acknowledge that Lessee currently occupies space within
the Haas Building and the Stern Building (herein, the “Excluded Space”) pursuant to separate lease
agreements between Lessor and Lessee. Notwithstanding anything to the contrary in the Lease,
Lessee hereby acknowledges and agrees that (a) Lessee’s right of first offer provided in this
Paragraph 7 shall not arise with respect to the Excluded Space until the expiration or earlier
termination of the first lease of each portion of the Excluded Space between Lessor and a third
party which commences following the date upon which Lessee’s lease of the subject Excluded Space
expires or is otherwise terminated (each such first lease herein, an “Initial Excluded Space
Lease”), and (b) for the purposes of this Paragraph 7, each such lease shall constitute a Superior
Lease, the tenant thereunder shall constitute a Superior Rights Holder and any rights granted to
such tenant in such lease shall constitute Superior Rights. As used in this Paragraph 7, the term
“Become Available” shall mean that (i) with the exception of Lessee’s separate lease of the
Excluded Space in existence on the date of this Second Amendment, the Superior Lease of the subject
First Offer Space has terminated, either by default, mutual agreement, or expiration of the initial
term of such Superior Lease, and (ii) the space which was the subject of such existing lease has
not been relet to any of the Superior Rights Holders (including, any of the third party lessees of
the Excluded Space referenced in the preceding sentence), or a permitted assignee of any such
Superior Rights Holder (as provided in the respective Superior Lease), immediately thereafter,
either through (X) the exercise of any Superior Right within the subject Superior Lease, or (Y) the
exercise of a Superior Right by any other Superior Rights Holder, or (Z) (1) with respect to all
periods on or before December 31, 2022, in the case of leases of retail space only, the renewal,
whether by right or negotiation, of the previous Superior Lease with respect to any such space by
the Superior Rights Holder who was the tenant under the subject Superior Lease or any other party
who is then in occupancy of the subject space under the subject Superior Lease, and (2) with
respect to all periods after December 31, 2022, the renewal, whether by right or negotiation, of
the previous Superior Lease with respect to any such space by the Superior Rights Holder who was
the tenant under the subject Superior Lease or any other party who is then in occupancy of the
subject space under the subject Superior Lease.




               (i) Request For Notice. Lessee shall have the right to submit a written request to
Lessor (herein, an “Excluded Space Superior Rights Request”), requesting a list of the then
existing Superior Rights contained within the then existing Initial Excluded Space Leases. If
Lessee submits an Excluded Space Superior Rights



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Request, then Lessor shall, within thirty (30) days after receipt of such Excluded Space
Superior Rights Request, provide Lessee with written notice of the Superior Rights contained within
any then existing Initial Excluded Space Leases (herein, an “Excluded Space Superior Rights
Notice”), which shall be binding upon Lessor as the complete list of Superior Rights contained
within such Initial Excluded Space Leases covered by such Excluded Space Superior Rights Notice,
but not binding with respect to any Initial Excluded Space Lease first executed after the date of
such notice.




          (d) Construction In First Offer Space. Lessee shall take any and all First Offer
Space in its then “as is” condition, with such tenant improvement allowance, if any, offered by
Lessor in the First Offer Notice or, solely with respect to any First Offer Space that has Become
Available after December 31, 2022, as otherwise negotiated between Lessor and Lessee as provided in
Paragraph 7(b)(ii) above. Except as provided in the First Offer Notice or, solely with respect to
any First Offer Space that has Become Available after December 31, 2022, as otherwise negotiated
between the parties as provided in Paragraph 7(b)(ii) above, Lessor shall have no obligation to
construct or install any improvements, furnishings or equipment whatsoever in the First Offer
Space.




          (e) Execution of Lease. If Lessee timely exercises Lessee’s right to lease the First
Offer Space described in the First Offer Notice, Lessor and Lessee shall within thirty (30) days
thereafter execute a lease agreement for such First Offer Space upon the terms and conditions set
forth in the First Offer Notice or, solely with respect to any First Offer Space that has Become
Available after December 31, 2022, as otherwise negotiated between Lessor and Lessee as provided in
Paragraph 7(b)(ii) above. Lessee shall commence payment of the First Offer Effective Rent for the
First Offer Space described in the First Offer Notice and the term of such First Offer Space shall
commence (“First Offer Commencement Date”) upon the date set forth in the First Offer Notice or,
solely with respect to any First Offer Space that has Become Available after December 31, 2022, as
otherwise negotiated between Lessor and Lessee as provided in Paragraph 7(b)(ii) above.
Notwithstanding anything to the contrary contained herein, if any default exists under the Lease
beyond any applicable cure period either at the time Lessee exercises any right of first offer or
at any time thereafter prior to or upon the First Offer Space Commencement Date, Lessor shall have,
in addition to all of Lessor’s rights and remedies under the Lease, the right to terminate Lessee’s
right to lease the First Offer Space and to cancel unilaterally Lessee’s exercise of its right of
first offer.




          (f) Suspension of Right of First Offer. The right of first offer contained in this
Paragraph 7 shall be suspended and not available to Lessee at any time during the term of the
Lease, that either (i) the Square Footage Threshold has been exceeded, or (ii) Lessee has assigned
the Lease to a party that is not an Affiliate of Lessee, or (iii) the Premises constitute less than
two hundred ninety thousand (290,000) rentable square feet within the Building. The Right of First
Offer shall not be contingent on Lessee leasing space in either the Haas Building or the Stern
Building as of the date of this Second Amendment or as of the date First Offer Space has Become
Available in such buildings.





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          (g) Revival. Lessee’s right of first offer for the First Offer Space is a continuing
right of first offer; provided, however:




               (i) with respect to First Offer Space that has Become Available on or before December 31,
2022, Lessor and Lessee agree that in the event that Lessee does not exercise its right of first
offer with respect to any First Offer Space offered by Lessor in a First Offer Notice as described
in Paragraph 7(b)(i) above, Lessor shall be free to lease the First Offer Space described in the
subject First Offer Notice to any third party (a “Third Party Lease”), and Lessor may grant to the
tenant under any such Third Party Lease expansion rights, rights of first offer to lease or
extension rights, provided that any expansion rights and rights of first offer shall be limited to
an expansion or a right of first offer for space that is no more than fifteen percent (15%) of the
size of the premises originally leased under such Third Party Lease (for example, if the Third
Party Lease originally is for 50,000 rentable square feet, then Lessor may grant the tenant an
expansion right or right of first offer for not more than an additional 7,500 rentable square
feet); provided, however, (A) if Lessor is prepared to enter into a Third Party Lease of such First
Offer Space at an effective rent that is less than ninety-five percent (95%) of the First Offer
Effective Rent proposed in the First Offer Notice, then Lessor shall first re-offer such First
Offer Space to Lessee at such lower effective rent in accordance with the provisions of this
Paragraph 7, provided, that Lessee shall have only five (5) business days after the delivery of
such First Offer Notice with respect to such re-offered First Offer Space to accept or reject the
terms contained therein; and (B) if Lessor is prepared to enter into a Third Party Lease of such
First Offer Space which provides expansion rights, rights of first offer to lease or extension
rights to the prospective tenant which exceed the First Offer Renewal/Expansion Rights proposed in
the First Offer Notice, then Lessor shall first re-offer such First Offer Space to Lessee with such
additional expansion rights, rights of first offer to lease or extension rights in accordance with
the provisions of this Paragraph 7, provided, that Lessee shall have only two (2) business days
after the delivery of such First Offer Notice with respect to such re-offered First Offer Space to
accept or reject the terms contained therein.



               (ii) with respect to First Offer Space that has Become Available after December 31, 2022,
Lessor and Lessee hereby agree that in the event that Lessee does not exercise its right of first
offer with respect to any First Offer Space offered by Lessor in a First Offer Notice as described
in Paragraph 7(b)(ii) above or Lessor and Lessee cannot in good faith agree upon the First Offer
Effective Rent and other lease terms for the First Offer Space described in the First Offer Notice
as provided in Paragraph 7(b)(ii) above, Lessor shall be free to enter into a Third Party Lease
with respect to the First Offer Space described in the subject First Offer Notice, and Lessor may
grant to the tenant under any such Third Party Lease expansion rights, rights of first offer to
lease or extension rights, provided that any expansion rights and rights of first offer shall be
limited to an expansion or right of first offer of no more than fifteen percent (15%) of the
premises originally leased under such Third Party Lease (for example, if the Third Party Lease
originally is for 50,000 rentable square feet, then Lessor may grant the tenant an expansion right
or right of first offer for not more than an additional 7,500 rentable square feet).



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               (iii) Notwithstanding anything to the contrary in this Paragraph 7(g) or elsewhere herein, (x)
Lessee hereby acknowledges and agrees that, for the purposes hereof and determination of when First
Offer Space has Become Available, any Third Party Lease entered into pursuant to either Paragraph
7(g)(i) or Paragraph 7(g)(ii) above shall constitute a Superior Lease, the tenant thereunder shall
constitute a Superior Rights Holder and to the extent such lease includes expansion rights, rights
of first offer to lease or extension rights permitted under this Paragraph 7(g), such expansion
rights, rights of first offer to lease and extension rights, if any, shall constitute Superior
Rights, provided that with respect to leases for First Offer Space that Becomes Available on or
prior to December 31, 2022, such expansion rights, rights of first offer to lease or extension
rights were offered to Lessee in the First Offer Notice with respect to such space or re-offered to
Lessee pursuant to Paragraph 7(g)(i) above, and (y) if the space which is the subject of any such
Third Party Lease shall have Become Available following the expiration or earlier termination of
the subject Third Party Lease, then Lessee’s right of first offer for such First Offer Space shall
revive upon the expiration or earlier termination of such Third Party Lease, and Lessor thereupon
shall be required to offer such First Offer Space to Lessee pursuant to the terms and conditions of
this Paragraph 7.



     8. Signage. Paragraph 12 of the First Amendment is deleted in its entirety and
replaced with the provisions of this Paragraph 8. During the term of the Lease (A) and so long as
Lessee leases at least two hundred fifty thousand (250,000) rentable square feet within the
Building, Lessee shall have (x) the exclusive right to erect and maintain signage with its
corporate name or logo on the exterior of the Building, and (y) the nonexclusive right to erect and
maintain signage on monuments within the Exterior Common Areas, in size and location appropriately
reflecting Lessee’s proportional occupancy of Levi’s Plaza and the Building, and (B) and so long as
Lessee is leasing all of the rentable area in the Building, Lessee shall be entitled to install,
maintain and replace signage promoting Lessee’s business on the exterior of the Building and on the
Building windows, skylights and atria in locations and of a type deemed appropriate or desirable by
Lessee, and (C) to the extent Lessor (in the exercise of Lessor’s sole and absolute discretion)
makes available to the office tenants of Levi’s Plaza signage space in the two (2) kiosks located
in the Exterior Common Areas (the “Display Kiosks”), Lessee shall be entitled to a portion of such
signage space reflecting Lessee’s proportional occupancy of Levi’s Plaza and the Building, provided
that Lessee shall have no rights to signage in kiosks that are used solely as building directories
(a “Directory Kiosk”), including, for example, the Directory Kiosk located in front of the Koshland
Building (1160 Battery Street) on the East side of Battery Street. Notwithstanding item (A)(y)
above, if Lessee does not lease at least two hundred fifty thousand (250,000) rentable square feet
within the Building, at any time, then thereafter Lessee shall only have a nonexclusive right to
erect and maintain signage with its corporate name or logo on the exterior of the Building and
monuments within the Exterior Common Areas, in each case, in size and location appropriately
reflecting Lessee’s proportional occupancy of Levi’s Plaza and the Building. Notwithstanding item
(C) above or any current use of the Display Kiosks which is being made by Lessee, Lessee hereby
acknowledges and agrees that (1) the primary use of the Display Kiosks is for advertising,
promotion and other similar uses and Lessor shall have the right, upon



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not less than fifteen (15) days prior written notice to Lessee, to require Lessee to remove any or all of Lessee’s signage then
located within the Display Kiosks in order to display advertising, promotional materials or for
other similar uses, provided, that to the extent Lessor continues (in the exercise of Lessor’s sole
and absolute discretion) to make any signage space within the Display Kiosks available to the
office tenants of Levi’s Plaza, such signage space made available to office tenants shall be
apportioned as provided in item (C) above; provided, further, that Lessor shall not permit any Key
Competitors (as defined in and determined pursuant to Paragraph 5(a) above) to display
advertisements, promotional materials or similar materials of any such Key Competitor in the
Display Kiosks or elsewhere in the Exterior Common Areas or any other areas of Levi’s Plaza under
Lessor’s control, and (2) Lessor may, in the exercise of Lessor’s sole and absolute discretion,
convert the Display Kiosk located on the East side of Sansome Street in front of the Haas Building
(1255 Battery Street) to a Directory Kiosk. So long as such kiosk is treated as a Directory Kiosk,
Lessee shall have no rights to signage in such kiosk pursuant to the Lease. Lessor and Lessee
hereby acknowledge that (AA) pursuant to the terms of that certain Indemnification And Hold
Harmless Agreement, dated June 23, 2009 (“Side Letter”), Lessor has agreed to permit Lessee to
place a banner upon the exterior of the Building (“Banner”), (BB) Lessor has permitted Lessee to
erect and maintain signage within the atrium of the Building consisting of a film coating
identifying Lessee’s name, corporate logo and an advertising slogan (“Atrium Signage”), and (CC)
without limiting Lessee’s obligations pursuant to the Side Letter, so long as Lessee, an Affiliate
of Lessee or a Permitted Assignee leases the entire Building pursuant to the Lease, Lessee may
continue to maintain the Banner and Atrium Signage within the interior of the Building, provided,
that at any time after the entire Building is no longer leased pursuant to this Lease by either
Lessee, an Affiliate of Lessee or a Permitted Assignee, Lessor may (upon not less than fifteen (15)
days prior written notice to Lessee) require Lessee to remove such Banner and/or Atrium signage.
Lessee shall comply, at its sole cost and expense, with any and all laws, statutes, ordinances and
governmental rules, regulations or requirements applicable to such signage, and all such signage
(including, without limitation, the signage identified in items (A), (B) and (C) above and any
modifications to or replacements for the Banner and/or the Atrium Signage) shall be subject to
Lessor’s prior approval, which approval shall not be unreasonably withheld. In addition to the
foregoing signage rights with respect to the exterior of the Building and the monument signage
within the Exterior Common Areas, so long as (a) Lessee, an Affiliate of Lessee or a Permitted
Assignee is the Lessee under the Lease, (b) Lessee continues to lease at least two hundred ninety
thousand (290,000) rentable square feet at Levi’s Plaza, and (c) the Square Footage Threshold (as
defined in Paragraph 3 above) has not been exceeded, Lessee shall have the right to maintain the
“Levi’s Plaza” identity with respect to Levi’s Plaza, including all of the Levi’s Plaza
designations currently located on the bus stops and Display Kiosks located within Levi’s Plaza, but
expressly excluding the Directory Kiosk located in front of the Haas Building on Sansome Street.
In the event that any of the conditions contained in the foregoing clauses (a), (b) and (c) are not
satisfied, either Lessor or Lessee shall have the right to remove the “Levi” name from the Levi’s
Plaza complex (including all of the Levi’s Plaza designations on the bus stops and Display Kiosks
located within Levi’s Plaza) at the sole cost and expense of the requesting party, upon which
removal all use of the “Levi” name



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to identify the Property shall cease and Lessor shall thereafter have the right, in its sole
and absolute discretion, to rename Levi’s Plaza (including, without limitation, any designations
on the bus stops and Display Kiosks located within Levi’s Plaza).



     9. Cafeteria Use. Paragraph 15 of the First Amendment is deleted in its entirety and
replaced with the provisions of this Paragraph 9. Notwithstanding any provision in the Rules and
Regulations to the contrary, Lessee shall be permitted to operate a food service facility on the
Premises for use by employees of Lessee, Affiliates of Lessee and invited guests and, at Lessee’s
discretion and election which may be withdrawn at any time, for use by employees of other tenants
of Levi’s Plaza, their Affiliates and invited guests, provided that Lessee may require proof of
identification and employment through badges or otherwise prior to permitting access to Lessee’s
cafeteria or food service facilities.



     10. Operating Expenses and Taxes. Lessee and Lessor acknowledge and agree that
commencing with the Second Extended Lease Term and continuing with any Extended Lease Term validly
exercised thereafter, (x) the Lease provisions relating to payment of Taxes and Operating Expenses
shall be converted from a Base Year computation to a straight net basis computation, and (y) Lessee
shall be assuming the obligation of maintenance and repair described in Paragraph 11 below. In
connection with the conversion from a Base Year to a net lease and Lessee’s assumption of the
maintenance and repair obligations described in Paragraph 11 below, Lessee and Lessor wish to
modify the terms and provisions of the Lease relating to Operating Expenses to account for such
modifications and Lessee’s assumption of such obligations. In connection with the foregoing,
Lessee and Lessor hereby acknowledge and agree that commencing on January 1, 2013, (i) the MOU
shall have no further force or effect with respect to all periods from and after January 1, 2013
(the MOU shall remain in effect with respect to periods on or before December 31, 2012, except as
modified by Paragraphs 12 and 13 below), (ii) notwithstanding anything to the contrary contained in
the Lease, Lessee’s obligations with respect to the payment of Lessee’s Percentage of Taxes and
Lessee’s Percentage of Operating Expenses shall be computed without reference to a Base Year, with
the effect that Lessee’s obligation for payment of Taxes during any Tax Year shall be payment of
Lessee’s Percentage of the Taxes incurred with respect to such Tax Year and Lessee’s obligation for
payment of Operating Expenses during any Lease Year for Operating Expenses shall be payment of
Lessee’s Percentage of the Operating Expenses incurred with respect to such Lease Year for
Operating Expenses, and (iii) Article 5 of the Original Lease shall be deleted in its entirety with
respect to all periods from and after January 1, 2013 and replaced with the provisions of this
Paragraph 10.



          (a) The Rent reserved and payable pursuant to the Lease shall be computed in accordance with
Paragraph 4 above and this Paragraph 10. Lessee agrees to pay, without deduction or offset (except
as and to the extent expressly provided in Paragraphs 11(f), 15(g) or 15(h) of this Second
Amendment), the then applicable Base Rent payable hereunder for the Premises to Lessor in advance,
in equal monthly installments, on or before the first day of each calendar month of the term or any
extension thereof, including, therewith, the estimated monthly amount of Lessee’s




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Percentage of Operating Expenses with respect to the then applicable Lease Year for Operating
Expenses. The rent described in the preceding sentence, and all other payments to be made to
Lessor under the Lease, shall be paid to Lessor in lawful money of the United States of America
addressed to Interland-Jalson, 155 Greenwich Street, San Francisco, California 94111, or to such
other person or at such other place as Lessor may from time to time designate in writing.




          (b) The words “Lessee’s Percentage” shall mean (i) when used with reference to the “Adjusted
Taxes for the Building” (as defined below), an amount equal to 100%, (ii) when used with reference
to “Operating Expenses” for the Building, an amount equal to 100%, and (ii) when used with
reference to “Operating Expenses” for the Exterior Common Areas, an amount equal to 41.109% (such
percentage representing the Building’s allocable share of such Exterior Common Areas).




          (c) The following terms, as used in the Lease, shall have the meanings ascribed thereto in the
Addendum Regarding Operating Expenses and Real Estate Taxes (the “Addendum”) attached hereto as
Exhibit A: (i) “Taxes”, (ii) “Tax Year”, (iii) “Operating Expenses”, (iv) “Lease Year for
Operating Expenses”, and (v) “Adjusted Base Rent”.




          (d) In addition to the Base Rent and other sums payable by Lessee pursuant to the terms of the
Lease, Lessee shall be obligated to pay, at Lessee’s sole cost and expense, an amount equal to
Lessee’s Percentage of the Adjusted Taxes for the Building that are due and payable with respect to
all periods during the term. Within 10 days following the date on which Lessor receives a
statement for Taxes due and payable with respect to the Building in any Tax Year (or portion
thereof) occurring during the term, Lessor shall deliver a copy of such statement to Lessee.
Lessee shall pay to Lessor, no later than the date which is ten (10) days before the Taxes shown on
such statement are required to be paid in order to avoid a tax delinquency, an amount equal to
Lessee’s Percentage of the Adjusted Taxes for the Building; provided, however, where “Taxes” may be
payable in installments, Lessee shall only be required to pay the then current installment coming
due on or before such date in order to avoid a tax delinquency, with later installments to be paid
by Lessee on or before the date which is ten (10) days before the date required in order to avoid a
tax delinquency. The term “Adjusted Taxes for the Building” shall mean the Taxes for the Building
less the sum of (a) Taxes Allocable to the Exterior Common Areas, and (b) Taxes Allocable to the
Garage (as such terms are defined below). “Taxes Allocable to the Exterior Common Areas” means
17.79% of the portion of the Taxes due and payable as shown on such statement that are allocated to
the land value as shown on such statement. “Taxes Allocable to the Garage” means 3.36% of the
difference of the Taxes due and payable as shown on such statement minus the Taxes Allocable to the
Exterior Common Areas. Lessee acknowledges that the Taxes Allocable to the Exterior Common Areas
shall be included as part of the Operating Expenses for the Exterior Common Areas.




          (e) In addition to the Base Rent and other sums payable by Lessee pursuant to the terms of the
Lease, Lessee shall be obligated to pay, at Lessee’s sole cost and expense, an amount equal to
Lessee’s Percentage of Operating Expense with respect




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to all periods during the term. Without limiting the foregoing, Lessor shall use commercially
reasonable efforts to notify Lessee, on or before November 30, 2012, of Lessor’s reasonable
estimate of the amount of Lessee’s Percentage of Operating Expenses for the Lease Year for
Operating Expenses commencing on January 1, 2013 and for each successive Lease Year for Operating
Expenses thereafter, Lessor shall use commercially reasonable efforts to notify Lessee, on or
before November 30th of the preceding Lease Year for Operating Expenses, of Lessor’s
reasonable estimate of the amount of Lessee’s Percentage of Operating Expenses for such upcoming
Lease Year for Operating Expenses. Commencing on the first day of January 2013 and continuing on
the first day of every month of the term thereafter, Lessee shall pay to Lessor, as additional
rent, one-twelfth (1/12th) of Lessor’s estimated amount of Lessee’s Percentage of Operating
Expenses for the then current Lease Year for Operating Expenses. Within one hundred and fifty
(150) days following the expiration of each Lease Year for Operating Expenses, Lessor shall deliver
to Lessee a comparative statement (“Expense Statement”) setting forth Lessee’s Percentage of the
Operating Expenses for the preceding Lease Year for Operating Expenses compared to the estimated
payments of Lessee’s Percentage of Operating Expenses paid to Lessor during such Lease Year for
Operating Expenses. If the total of the monthly payments of Lessor’s estimate of Lessee’s
Percentage of the Operating Expenses made by Lessee during the Lease Year for Operating Expenses
reflected in such Expense Statement is less than the actual amount of Lessee’s Percentage of the
Operating Expenses chargeable to Lessee for such Lease Year for Operating Expenses as shown by such
Expense Statement, then Lessee shall pay the difference to Lessor in a lump sum within thirty (30)
days after receipt of such Expense Statement from Lessor. Any overpayment by Lessee of Lessee’s
Percentage of the Operating Expenses for the Lease Year for Operating Expenses covered by such
Expense Statement shall, at Lessee’s option, be either credited towards the Lessee’s next payment
or payments of rent or returned to Lessee in a lump sum payment within thirty (30) days after
Lessor’s delivery of such Expense Statement. The failure by Lessor to submit an estimate or a
statement required under this Paragraph 10(e) within the time limits specified shall not be deemed
a waiver of its right to collect the additional rent represented by Lessee’s Percentage of the
Operating Expenses for any Lease Year for Operating Expenses. Lessor shall, however, following the
expiration of such time limits submit any such estimate or statement to Lessee within fifteen (15)
business days after a written request therefore from Lessee.




          (f) Lessor and Lessee agree that during the term of the Lease the Building shall be run as a
first class office building and in a reasonable and prudent manner.




          (g) Notwithstanding anything to the contrary contained in the Lease, Lessor hereby agrees
that, if a reassessment of the Property for ad valorem property tax purposes pursuant to California
Constitution Act XIII A and California Revenue & Taxation Code Sections 60-67 (a “Proposition 13
Reassessment”) occurs during the period commencing on January 1, 1998 and ending on December 31,
2017 (the “Protected Period”), for any cause other than a transfer by Lessee (to any person other
than Lessor) of all or any portion of its leasehold interest in the Lease or a transfer of
ownership interests in Lessee which causes a change in ownership of the Property or an




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Improvement Assessment, Lessee shall have no obligation during the Protected Period to pay
Lessee’s Percentage of any such increase in Taxes resulting from the Proposition 13 Reassessment.
From and after the expiration of the Protected Period, Lessee shall pay Lessee’s Percentage of the
total Adjusted Taxes for the Building thereafter becoming due (including, without limitation, any
portion of the total Adjusted Taxes for the Building thereafter payable that reflects or resulted
from the Proposition 13 Reassessment arising from any such Ownership Transfer), provided, however,
Lessor shall have no right to collect retroactively from Lessee any portion of any increase in
Adjusted Taxes for the Building resulting from the Proposition 13 Reassessment which, but for the
limitation expressed in this Paragraph 10(c), would have been payable by Lessee during the
Protected Period. As used herein, the term “Improvement Assessment” shall mean any increase in
Taxes resulting from any assessment increase related to the value of any Alterations (as defined in
the First Amendment) and any improvements constructed by or on behalf of Lessee subsequent thereto
(including, without limitation, the Leasehold Improvements (as defined in Paragraph 15 below), and
any alterations or improvements performed in connection with the Base Building Work (as defined in
Paragraph 14 below) or Capital Work (as defined in Paragraph 11(b) below) if the cost of such
Capital Work is permitted to be included in Operating Expenses under clause (iii) of Paragraph 2(a)
of Exhibit A to this Second Amendment.




          (h) The monthly Adjusted Base Rent for any fractional part of a calendar month at the
expiration of the term shall be a prorated amount of the monthly Adjusted Base Rent for a full
calendar month based upon a thirty (30) day month.




     11. Maintenance and Repair. With respect to all periods from any after January 1,
2013, Paragraph 9 of the Original Lease is deleted in its entirety and replaced with the provisions
of this Paragraph 11.



          (a) Lessee’s Obligation. During the term of the Lease, Lessee shall, at Lessee’s sole
cost and expense, maintain or cause to be maintained in good working order and first class
condition and repair, in compliance with all laws and in accordance with standards customarily
maintained by the owners of Hills Plaza, One Maritime Plaza, Embarcadero Center, 101 California
Street and 555 California Street (“Comparable Maintenance Standards Buildings”), the Building
(other than any Lessor Work or Lessor Exterior Work (as such terms are defined in Paragraph 11(b)
below), including, without limitation, (i) the interior and exterior walls (including the exterior
façade and the interior and exterior finishes), interior and exterior windows and window frames and
casements, interior and exterior doors and door frames, door casements and door closers, floor
coverings (including tile, carpet, wood covering or other materials) and baseboards, ceiling
(ceiling tiles and grid), roof, interior lighting (including, without limitation, light bulbs and
ballasts), the Base Building Systems (as defined below), Alterations, energy management systems,
security systems, emergency generators, fire extinguishers, outlets, fixtures, the interior and
exterior portions of loading docks, restrooms, and any appliances (including dishwashers, hot water
heaters and garbage disposers) within the Building, (ii) landscaping located on the balconies of
the Building, (iii) pest control, (iv) janitorial services, (v) window cleaning, and (vi) any other
maintenance, repair or replacement with respect to the Building which does not constitute either
Lessor Work or




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Lessor Exterior Work. Lessee shall perform such repair and maintenance in a first class
condition, and keep the Premises in a clean, safe and orderly condition). The term “Base Building
Systems” shall mean the elevators, mechanical, electrical, heating, ventilating and air
conditioning, plumbing, security, fire and life-safety systems of the Building. Notwithstanding
the foregoing or anything to the contrary herein, Lessee shall not be obligated to perform any
Lessor Work or any Lessor Exterior Work (including, without limitation, any repair or maintenance
of (x) the Base Building Systems to the extent that they serve the garage, and (y) any electrical,
water, sewer and other utility lines that run between the exterior boundary of the Building and the
respective utility providers junction box in the public right of way).




               (i) Without limiting the rights and remedies of Lessor in the event of a default by Lessee
under the Lease and notwithstanding anything to the contrary within the Lease (including without
limitation the provisions of Article 20 of the Original Lease), if Lessee fails to perform any of
the maintenance, repairs or replacements required to be performed by Lessee under this Paragraph
11(a), then following ten (10) days prior written notice to Lessee, Lessor may at Lessor’s option,
without any obligation to do so, perform any such repairs, maintenance or replacement and Lessor,
by reason of so doing, shall not be liable or responsible for any loss or damage thereby sustained
by Lessee or anyone holding under or through Lessee; provided, however, that no such prior written
notice shall be required in the case of an emergency, as determined by Lessor in its reasonable
judgment.



               (ii) Notwithstanding anything to the contrary within the Lease (including without limitation
the provisions of Article 20 of the Original Lease), if Lessor performs any of Lessee’s obligations
in accordance with Paragraph 11(a)(i) above, the full amount of the cost and expense reasonably
incurred by Lessor in so doing (“Lessor’s Performance Costs”) shall immediately be owing by Lessee
to Lessor, and Lessee shall promptly pay to Lessor upon demand, as additional Rent, the full amount
of Lessor’s Performance Costs with interest thereon from the date of payment by Lessor at the lower
of (x) ten percent (10%) per annum, or (y) the highest rate permitted by applicable law; provided,
however, if Lessee and Lessor disagree upon whether a particular item of maintenance, repair or
replacement is required to be performed by Lessee under this Paragraph 11(a) to keep the Building
in good working order and first class condition and repair, in compliance with all laws and in
accordance with standards customarily maintained by the owners of the Comparable Maintenance
Standards Buildings, then either party may make a demand to submit the determination of the scope
of Lessee’s obligations, as measured in accordance with the provisions of this Paragraph 11(a), to
review by a Neutral Third Party (as such term is defined in and such review is to be conducted
pursuant to the procedures set forth in Paragraph 11(d) below). If the Neutral Third Party
determines that a particular item of maintenance, repair or replacement was required to be
performed by Lessee under this Paragraph 11(a), then Lessee shall pay the fee and expenses of the
Neutral Third Party and shall proceed forthwith to commence the necessary maintenance, repair or
replacement, as applicable, and shall diligently pursue such maintenance, repair or replacement to
completion; provided, however, if Lessor has already performed such maintenance, repair or
replacement pursuant to the rights granted within Paragraph 11(a)(i) above, or otherwise thereafter
performs such maintenance,



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repair or replacement due to a failure by Lessee to comply with the provisions of this
Paragraph 11(a)(ii), then Lessee shall immediately thereafter pay to Lessor, as additional Rent,
Lessor’s Performance Costs, with interest thereon from the date of payment by Lessor at the lower
of (x) ten percent (10%) per annum, or (y) the highest rate permitted by applicable law. If the
Neutral Third Party determines that such item of maintenance, repair or replacement was not
required to be performed by Lessee under this Paragraph 11(a), then Lessor shall pay the fee and
expenses of the Neutral Third Party and Lessee shall have no obligation to reimburse Lessor for any
of Lessor’s Performance Costs.




          (b) Lessor’s Obligation. Lessor, shall maintain or cause to be maintained, at
Lessor’s sole cost and expense, in good working order and first class condition and repair, in
compliance with all laws and in accordance with standards customarily maintained by the owners of
the Comparable Maintenance Standards Buildings, the Exterior Common Areas, the garage located in
the Building (including, without limitation, the Base Building Systems to the extent they serve the
garage) and the electrical, water, sewer and other utility lines that run between the exterior
boundary of the Building and the respective utility providers junction box in the public right of
way (collectively, the “Lessor Exterior Work”); provided, however, that Lessee shall pay Lessee’s
Percentage of the Operating Expenses with respect to the Exterior Common Areas. In addition,
Lessor shall (x) at Lessor’s sole cost and expense, maintain or cause to be maintained the
Structural Elements (as defined below) in good working order and first class condition and repair,
in compliance with all laws and in accordance with standards customarily maintained by the owners
of the Comparable Maintenance Standards Buildings (collectively, the “Structural Work”), and (y) if
any Capital Work (as defined below) is required, Lessor shall perform such work, provided, that the
cost of such work may be included within Operating Expenses measured with respect to the Building
to the extent permitted pursuant to Paragraph 2(a)(iii) of the Addendum attached to this Second
Amendment as Exhibit A, and, if it is so permitted to be included, Lessee shall be
obligated to pay the amortized costs of such work in connection with Lessee’s payment of Lessee’s
Percentage of Operating Expenses with respect to the Building. The term “Structural Elements”
shall mean the structural portions of the roof, foundations, and structural walls (excluding any
exterior façade or exterior finish), the floor slab, the foundation and the footings of the
Building. The determination of whether or not Capital Work is required shall be made in accordance
with standards customarily maintained by the owners of the Comparable Maintenance Standards
Buildings. As used herein, the term “Capital Work” shall mean repair, improvements or replacements
that are considered capital repairs, improvements or replacements under generally accepted
accounting principles that are consistent with industry standards and sound management practices,
provided that if any repair, improvement or replacement work required at the Building would cost
less than Four Thousand Dollars ($4,000) to complete, then such repair, improvement or replacement
shall not constitute Capital Work hereunder and shall be performed by Lessee pursuant to Paragraph
11(a) above. As used herein, the term “Lessor Work” shall mean “Structural Work” and “Capital
Work,” collectively. Notwithstanding the foregoing or anything to the contrary herein, Lessee
shall pay the cost of repairs for any damage to the Structural Elements, elements which would
comprise items of Capital Work or the Exterior Common Areas caused by Lessee’s




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negligence, willful misconduct or the installation of any Alterations, to the extent (if any)
not covered by the property insurance required to be carried by Lessor under the Lease.




               (i) If Lessee and Lessor disagree upon whether Lessor Work is required under the Lease, then
subject to the conditions precedent to pursuing demands with respect to Minor Items (as such term
is defined in and such conditions are set forth in Paragraph 11(c) below) and Lessee’s prior
delivery to Lessor of a Repair Notice (as defined in Paragraph 11(b)(ii) below), either party may
make a demand to submit the determination of whether such Lessor Work is required to review by a
Neutral Third Party, to be conducted pursuant to the procedures set forth in Paragraph 11(d) below.



               (ii) Without limiting Lessor’s obligations under this Paragraph 11(b), Lessee shall give
Lessor written notice of items (including, without limitation, any Minor Item (as defined in
Paragraph 11(c) below) that Lessee believes are Lessor Work that Lessor is required to perform
under the terms of this Paragraph 11(b) (herein, a “Repair Notice”). Following receipt of a Repair
Notice, Lessor and Lessee shall promptly meet and confer (either in person or telephonically)
regarding the items outlined in the Repair Notice; provided, however, that in the case of a Repair
Notice with respect to an Expedited Repair Item, Lessor and Lessee shall meet and confer (either in
person or telephonically) within one (1) Business Day following Lessor’s receipt of the Repair
Notice. If Lessor agrees when the parties meet and confer that any of the items are Lessor Work
that Lessor is required to perform under the terms of this Paragraph 11(b), then Lessor shall
proceed forthwith to commence the necessary Lessor Work as soon as reasonably practicable and shall
diligently pursue such Lessor Work to completion. If Lessor does not agree when the parties meet
and confer that an item is Lessor Work that Lessor is actually required to perform under the terms
of this Paragraph 11(b), then such disputed item shall constitute a “Disputed Item” hereunder. As
used herein, the term “Expedited Repair Item” shall mean either (A) an item that is reasonably
anticipated to cost less than Fifty Thousand Dollars ($50,000) to complete, or (B) a Building
Climate Item that is reasonably anticipated to cost Fifty Thousand Dollars ($50,000) or more to
complete. As used herein, the term “Building Climate Item” shall mean an item of work that is
necessary to (I) maintain the air temperature within the office areas of the Building at a range
between 69 degrees Farenheit and 76 degrees Farenheit, or such greater range of temperature as may
be mandated by any governmental entity or public utility body promulgating or revising any statute,
ordinance, regulation, mandatory guideline or building, fire or other code with respect to energy
conservation, (II) restore electrical service to the Building, where substantially all electrical
service to the Building has been interrupted, (III) restore water service to the Building, where
substantially all water service to the Building has been interrupted, or (IV) restore sewage
removal service to the Building, where substantially all sewage removal service to the Building has
been interrupted.



                    (A) If the Disputed Item is other than a Building Climate Item, then the parties shall proceed
in accordance with Paragraphs 11(c) and 11(d) below.



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                    (B) If the Disputed Item is a Building Climate Item, then Lessor shall proceed forthwith to
commence the necessary Lessor Work as soon as reasonably practicable and shall diligently pursue
such Lessor Work to completion; provided, however, that Lessor shall retain the right to make an
ADR Demand with respect to such Building Climate Item following the completion of such work
notwithstanding the fact that Lessor performed the work in connection with such Disputed Item
constituting. If Lessor fails to commence any such work with respect to a Building Climate Item as
soon as reasonably practicable or after commencing such work Lessor thereafter fails to diligently
pursue such work to completion, then Lessee may (in addition to Lessee’s other remedies available
at law, in equity or under the terms of the Lease) perform the work with respect to any such
Building Climate Item following verbal notice to Lessor that Lessee is assuming control of such
work and, once such work has been completed either party shall continue to have the right to make
an ADR Demand with respect to such Building Climate Item. As with any other ADR Demand, any ADR
Demand with respect to a Building Climate Item shall be submitted to the determination pursuant to
the procedures set forth in Paragraph 11(d) below.



          (c) Notwithstanding any provision to the contrary in Paragraph 11(b) above, if any Disputed
Item would cost less than Fifty Thousand Dollars ($50,000) to complete (a “Minor Item”), Lessee may
perform the work to complete any such Minor Item at any time after such Minor Item is determined to
be a Disputed Item, provided that no ADR Demand (as defined in Paragraph 11(d) below) shall be made
with respect to such Disputed Item until there has been accumulated a group of Disputed Items
(whether all Minor Items or a combination of Minor Items and other Disputed Items) that (x) have
not previously been submitted to a Neutral Third Party for review, and (y) cost, or would cost, in
the aggregate, at least One Hundred Thousand Dollars ($100,000) to complete.




          (d) Any demand to submit a determination to review before a Neutral Third Party (whether by
Lessee in connection with a Building Climate Item, or in connection with a Disputed Item that would
cost Fifty Thousand Dollars ($50,000) or more to complete, or in connection with a group of
Disputed Items (whether all Expedited Repair Items or a combination of Expedited Repair Items and
other Disputed Items) that would cost, in the aggregate, at least One Hundred Thousand Dollars
($100,000) to complete, or by Lessor irrespective of the cost to complete such Disputed Item) shall
be made in a written notice to the other party (herein an “ADR Demand”), specifying the name and
address of the person the demanding party proposes to serve as the Neutral Third Party. Lessor and
Lessee shall attempt in good faith to appoint a Neutral Third Party within ten (10) days after
delivery of an ADR Demand. If the parties do not so agree within such ten (10) day period, then
either party, on behalf of both, may request appointment of such a qualified person to serve as the
Neutral Third Party by JAMS (or its successors), and the other party shall not raise any question
as to JAMS’ full power and jurisdiction to entertain the application for and make the appointment.
The Neutral Third Party shall issue a written statement explaining his or her decision (herein the
“Neutral Decision”). The decision of the Neutral Third Party reflected in the Neutral Decision
shall be final and binding upon the parties. In the event of a failure, refusal or inability of
the selected Neutral Third Party to act, his or her successor shall be appointed in the same manner
as provided for appointment of the original Neutral Third



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Party. The term “Neutral Third Party” shall mean (I) with respect to the determination of
whether or not the required work is considered a capital repair, improvement or replacement under
generally accepted accounting principles that are consistent with industry standards and sound
management practices, (A) an accounting professional, who is a licensed certified public accountant
with one of the ten (10) largest public accounting firms in the San Francisco Bay Area, and (B) has
at least ten (10) years professional experience with the accounting procedures of Class “A”
commercial office buildings in San Francisco, California of more than one hundred thousand
(100,000) rentable square feet, and (C) has not been engaged or employed by Lessor or Lessee within
the five (5) years preceding his or her appointment, and (II) with respect to the determination of
whether or not an item requires maintenance, repair or replacement, (A) a building manager or
building engineer who has at least ten (10) years professional experience in the management and
repair of commercial office buildings in San Francisco, California, similar to the Comparable
Maintenance Standards Buildings, and (B) is generally familiar with the Comparable Maintenance
Standards Buildings, and (C) has not been engaged or employed by Lessor or Lessee within the five
(5) years preceding his or her appointment. In the case of determinations of whether or not the
required work is considered a capital repair, improvement or replacement under generally accepted
accounting principles that are consistent with industry standards and sound management practices,
the Neutral Third Party shall only consider the accounting standards and management practices of
owners of Class “A” commercial office buildings in San Francisco, California of more than one
hundred thousand (100,000) rentable square feet. In the case of determinations of whether or not
an item requires maintenance, repair or replacement, the Neutral Third Party shall only consider
the maintenance standards which are customarily maintained by the owners of the Comparable
Maintenance Standards Buildings.




               (i) If the Neutral Third Party determines that any Disputed Item (other than an Expedited
Repair Item that has previously been performed by either Lessor or Lessee, as applicable)
constituted Lessor Work required under the Lease, then Lessor shall proceed forthwith to commence
the necessary Lessor Work within thirty (30) days following the issuance of the Neutral Decision
setting forth such determination and shall diligently pursue such Lessor Work to completion. If
the Neutral Third Party determines that any Disputed Item constituting an Expedited Repair Item
(other than an Expedited Repair Item that has previously been performed by either Lessor or Lessee,
as applicable) constituted Lessor Work required under the Lease, then Lessor shall proceed
forthwith to commence the necessary Lessor Work as soon as reasonably practicable following the
issuance of the Neutral Decision setting forth such determination and shall diligently pursue such
Lessor Work to completion. Notwithstanding the foregoing, (A) if the Neutral Third Party
determines that any Minor Item constituted Lessor Work required under the Lease and Lessee has
previously performed the work with respect to such Minor Item, then following the issuance of the
Neutral Decision setting forth such determination Lessor shall reimburse Lessee for the reasonably
incurred costs of such Lessor Work within thirty (30) days after the issuance of the Neutral
Decision, and (B) if the Neutral Third Party determines that any Building Climate Item did
not constitute Lessor Work required under the Lease and Lessor has previously performed the
work with respect to such Building Climate Item, then following the issuance of the Neutral
Decision setting forth such determination Lessee shall reimburse Lessor for the



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reasonably incurred costs of the work with respect to such Building Climate Item within thirty
(30) days after the issuance of the Neutral Decision.




               (ii) If the Neutral Third Party determines that all of the Disputed Items were Lessor Work
required under the Lease, Lessor shall pay all of the fees and expenses of the Neutral Third Party.
If the Neutral Third Party determines that none of the Disputed Items were Lessor Work required
under the Lease, Lessee shall pay all of the fees and expenses of the Neutral Third Party. If the
Neutral Third Party determines that some of the Disputed Items were not Lessor Work required under
the Lease, but some of the Disputed Items were Lessor Work required under the Lease, then Lessee
shall be responsible for a portion of the fees and expenses of the Neutral Third Party in an amount
equal to the ratio that the cost to complete the Disputed Items which were determined not to
constitute Lessor Work required under the Lease bears to the total cost to complete the Disputed
Items then submitted to the Neutral Third party for review, and the Lessor shall be responsible for
payment of a portion of the fees and expenses of the Neutral Third Party in an amount equal to the
ratio that the cost to complete the Disputed Items which were determined to constitute Lessor Work
required under the Lease bears to the total cost to complete the Disputed Items then submitted to
the Neutral Third party for review.



          (e) If (x) Lessor has agreed in writing to perform Lessor Work or if the Neutral Third Party
determines that Lessor Work is required under the Lease, and (y) (i) in the case of any such Lessor
Work that constitutes a Minor Item, Lessor fails to commence any such Lessor Work constituting a
Minor Item within ten (10) days after agreeing to perform such Lessor Work or within ten (10) days
following the issuance of the Neutral Decision setting forth such determination, as applicable, or
(ii) in the case of any Lessor Work other than an Expedited Repair Item, Lessor fails to commence
any such Lessor Work within thirty (30) days after agreeing to perform such Lessor Work, or within
thirty (30) days following the issuance of the Neutral Decision setting forth such determination,
as applicable, or in connection with either item (y)(i) or (y)(ii) Lessor thereafter fails to
diligently pursue such Lessor Work to completion, then Lessee may (in addition to Lessee’s other
remedies available at law, in equity or under the terms of the Lease) perform any such Lessor Work
(other than any Lessor Work that is the subject of a pending dispute being resolved pursuant to
Paragraph 11(b)(i) above) and, once such Lessor Work has been completed, Lessor shall reimburse
Lessee for the reasonably incurred costs of such Lessor Work (other than any Lessor Work that is
the subject of a pending dispute being resolved pursuant to Paragraph 11(b)(i) above) within thirty
(30) days after receipt of Lessee’s detailed invoice therefore, with interest thereon from the date
of payment by Lessee at the lower of (x) ten percent (10%) per annum, or (y) the highest rate
permitted by applicable law.




          (f) If Lessee is entitled to reimbursement from Lessor under this Paragraph 11 and Lessor
fails to reimburse Lessee as and when required pursuant to either Paragraph 11(d)(ii) or Paragraph
11(e) above, as applicable, then Lessee shall have the right to offset the amounts to which it is
entitled to reimbursement (including any applicable interest thereon to which Lessee is permitted
pursuant to Paragraph 11(e) above) against the monthly Base Rent as it comes due under the Lease.




-35-









 








     12. Assignment and Subleasing. From and after the Effective Date, Paragraphs 4 and 5
of the MOU shall be deleted in their entirety and of no further force or effect with respect to
periods on or after the Effective Date. From and after the Effective Date, the provisions of this
Paragraph 12 shall be added to the Lease. Lessor and Lessee desire to clarify the provisions of
Paragraph 2.1.11 of the Lease regarding the definition of Affiliate by substituting the following
for Paragraph 2.1.11:




     “2.1.11 The term “Affiliate” means, with respect to either party, (i) any Person which
directly or indirectly controls, or is controlled by, or is under common control with, such
party, or (ii) any Person which is a member with such party in the relationship of joint
venture, partnership, trust or other form of business association concerning or which in any
way affects the subject matter involved. “Person” shall mean, without limitation, natural
persons, corporations, associations, partnerships, trusts, and limited liability companies.
“Control” of a Person means the ownership of stock or other equity interests, or contract or
other rights, in any such case entitling their holder to elect greater than fifty percent (50%)
of the directors or similar functionaries of that Person. For purposes of the foregoing
definitions, members of the Existing Shareholder Group, as defined below, shall be considered
an association regardless of whether there is any formal voting trust or other entity
controlling the voting rights of such interests, so that equity interests in Lessee or any
other entity held by members of the Existing Shareholder Group shall be aggregated for purposes
of applying the foregoing control test. The “Existing Shareholder Group” shall include all
current beneficial owners of equity interests in Lessee, or their ancestors, descendants,
adopted children, spouses or former spouses, trusts established by or for the benefit of such
persons, partnerships or other entities of any kind which were transferees of equity interests
of such owners or any of them, and charitable or nonprofit organizations which were transferees
of equity interests of such owners.”



               (a) Subletting or Assignment to Affiliate. Lessor and Lessee desire to clarify the
provisions of Paragraph 11.2 of the Lease regarding Lessee’s right to assign the Lease or sublet
all or a portion of the Premises without the consent of Lessor.


Without modification to any rights or obligations of Lessee hereunder, Lessee’s attention is
directed to Paragraphs 3(b) and 3(c) above, with respect to Lessee’s potential future obligations
for demising as they relate to Unoccupied Surrender Space, Non-Protected Space and Relocated
Premises.



Any assignment or subletting that is made to an Affiliate of Lessee shall, as stated in Paragraph
11.2, be permitted without the consent of Lessor pursuant to Paragraph 11.2 of the Lease, provided
that the conditions set forth in Paragraphs 12(a)(i) and 12(a)(ii) below are satisfied as to such
assignment or subletting (and the parties agree that, as to subletting or assignment to Affiliates
of Lessee, the conditions set forth in Paragraphs 12(a)(i) and 12(a)(ii) below are hereby
substituted for the conditions stated in Paragraph 11.2 of the Lease):




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                    (i) Lessee shall furnish Lessor with prior written notice of such proposed assignment or
subletting and the identity of the proposed assignee or sublessee; and



                    (ii) Lessee shall furnish Lessor with a fully-executed copy of the sublease or assignment
instrument if any, and, with respect to any assignments to an Affiliate of Lessee, Lessee shall
furnish Lessor with a fully-executed copy of an instrument in writing, in form and substance
consistent herewith, pursuant to which the assignee assumes all of the obligations and liabilities
accruing from and after such assignment and imposed upon Lessee herein or arising hereunder.



               (b) Assignments and Deemed Assignments to Non-Affiliates. Lessor and Lessee desire to
further clarify the provisions of Paragraph 11.2 of the Lease regarding Lessee’s right to assign
the Lease without the consent of Lessor. For purposes of Paragraphs 11.1 and 11.2 of the Lease, an
assignment shall be made or deemed made as a result of the following transactions (a “Test
Transaction”): (1) the sale or other transfer of all or substantially all of the stock of Lessee
to any Person who is not an Affiliate of Lessee (herein, a “Non-Affiliate Person”) (whether the
Lease obligations and liabilities remain with Lessee or are assumed by the Non-Affiliate Person
acquiring all or substantially all of the stock of Lessee), or (2) the sale or other transfer of
all or substantially all of the assets of Lessee to any Non-Affiliate Person (whether the Lease
obligations and liabilities remain with Lessee or are assumed by the Non-Affiliate Person acquiring
all or substantially all of the assets of Lessee), or (3) the merger or consolidation of Lessee
into any Non-Affiliate Person, pursuant to a merger, consolidation, or other reorganization in
which Lessee is not the surviving entity (the “Merged Entity”), or (4) the sale or other transfer
of a controlling interest in Lessee to a Non-Affiliate Person (where a “controlling interest” shall
be determined using the definition of “Control” in Paragraph 2.1.11 of the Lease, as amended)
(whether the Lease obligations and liabilities remain with Lessee or are assumed by the
Non-Affiliate Person acquiring a controlling interest in Lessee); and the “assignee” (i.e., the
Non-Affiliate Person which acquires all or substantially all of the stock or assets of Lessee or a
controlling interest in Lessee and assumes the obligations and liabilities of the Lease) or the
“deemed assignee” (i.e., Lessee if the Non-Affiliate Person who acquires all or substantially all
of the stock or assets of Lessee or a controlling interest in Lessee does not assume the
obligations and liabilities of the Lease or the Merged Entity) shall be the Person responsible for
the obligations and liabilities of the Lease on and after the consummation of the applicable Test
Transaction. Any assignment that is made or is deemed to have been made in connection with or as a
result one of the foregoing Test Transactions shall, as stated in Paragraph 11.2 of the Lease, be
permitted without the consent of Lessor pursuant to Paragraph 11.2 of the Lease (and the assignee
or deemed assignee shall become or remain the Lessee and shall sometimes be referred to herein as a
“Permitted Assignee”), provided that the conditions set forth in Paragraphs 12(b)(i), 12(b)(ii) and
12(b)(iii) below are satisfied as to such assignment (and the parties agree that, as to the Test
Transactions, the conditions set forth in Paragraphs 12(b)(i), 12(b)(ii) and 12(b)(iii) below are
hereby substituted for the conditions stated in Paragraph 11.2 of the Lease):




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               (i) Lessee shall furnish Lessor with prior written notice of such proposed assignment and the
identity of the proposed assignee; provided, however, if an assignment is not within the control of
Lessee, said assignee shall upon such assignment promptly furnish Lessor with written notice
thereof;



               (ii) With respect to any assignment where the Lease is assumed by a Non-Affiliate Person
acquiring all or substantially all of the stock or assets of Lessee or a controlling interest in
Lessee, Lessee shall furnish Lessor with a fully-executed copy of an instrument in writing, in form
and substance consistent herewith, pursuant to which the assignee assumes all of the obligations
and liabilities accruing from and after such assignment and imposed upon Lessee herein or arising
hereunder; and



               (iii) The assignee or the deemed assignee, as applicable, shall satisfy one of the conditions
described in Paragraphs 12(b)(iii)(A), 12(b)(iii)(B) and 12(b)(iii)(C) below:




               (A) In the event that the assignee or deemed assignee, as applicable, has Five Hundred
Million Dollars ($500,000,000) or more of long term debt, such assignee or deemed assignee
shall certify to Lessor, by way of a certificate subscribed by the chief financial officer
or an assistant financial officer (or equivalent) of the applicable entity, in form
reasonably satisfactory to Lessor and substance consistent with Paragraph 12(b)(iii)(A)(2)
below, that the assignee or deemed assignee, as applicable, has as of the date of the
assignment or deemed assignment, giving effect to the Test Transaction, a ratio of
long-term debt to EBITDA of not greater than 5 to 1.




                    (1) In calculating this ratio, “EBITDA” shall mean the sum of (aa) the
assignee’s or deemed assignee’s, as applicable, net income, interest expenses,
taxes, depreciation, amortization and non-cash accruals for special compensation
plans (including without limitation, as to Lessee, Lessee’s Global Success Sharing,
Key Employee Incentive, and Long-Term Incentive Plans, as applicable), minus (bb)
the assignee’s or deemed assignee’s, as applicable, cash payments for its special
compensation plans, computed on a consolidated basis as of the last day of the most
recently completed fiscal quarter, computed on a rolling four quarter basis
consisting of such quarter and the three immediately preceding quarters of the
assignee or deemed assignee, as applicable, giving effect on a proforma basis to
the Test Transaction.




                    (2) The foregoing certificate shall be accompanied by the most recent
then-existing financial statements of the assignee or deemed assignee, as
applicable, that have been audited by a so-called “Big Four” Certified Public
Accounting firm (or, if such designation is discontinued or no longer applicable,
by a similar nationally-recognized, licensed certified public accounting firm), and
prepared, at the option of the assignee or deemed assignee, as applicable,



-38-









 







on a consolidated basis. It is the intention of the parties that the assignee
or deemed assignee, as applicable, shall not be required to specially prepare
financial statements to comply with the foregoing requirement. To the extent that
such financial information as reasonably necessary to support the certification is
not contained in the then-existing financial statements, such certificate shall
also be accompanied by a statement in reasonable detail showing the calculation set
forth above and the financial information relied upon by such chief or assistant
financial officer in giving the certificate, which information shall give effect on
a proforma basis to the Test Transaction, and which statement may, at the option of
the assignee or deemed assignee, as applicable, be prepared on a consolidated
basis.




                    (3) If financial statements or other financial information relating to the
assignee or deemed assignee shall be delivered or disclosed to Lessor under this
Paragraph 12(b)(iii)(A), Paragraph 12(b)(iii)(B) below, or any other provision of
the Lease, Lessor shall maintain in strict confidence all such financial statements
and all information contained therein, and shall not, without the prior written
consent of such assignee or deemed assignee disclose such information to any person
or individual excepting only Lessor’s principals, accountants, attorneys, or other
consultants who are advising Lessor regarding such information, on the condition
that any such person or individual to whom such information is disclosed shall
agree in writing to maintain the confidentiality of such information. Any such
information shall not be used by Lessor or any other person or individual to whom
such information is disclosed for any purpose other than for the purposes
contemplated under the Lease and such information shall be retained by Lessor in a
confidential manner.




               (B) In the event that the assignee or deemed assignee, as applicable, has less than
Five Hundred Million Dollars ($500,000,000) of long term debt, such assignee or deemed
assignee shall certify to Lessor, by way of a certificate subscribed by the chief financial
officer or an assistant financial officer (or equivalent) of the applicable entity, in form
reasonably satisfactory to Lessor and substance consistent with Paragraph 12(b)(iii)(A)(2)
above, that the assignee or deemed assignee, as applicable, has as of the date of the
assignment or deemed assignment, giving effect to the Test Transaction and to the
assignment or deemed assignment of the Lease, EBITDA of at least One Hundred Million
Dollars ($100,000,000). For purposes hereof, “EBITDA” shall have the meaning set forth in
Paragraph 12(b)(iii)(A)(1) above.




               (C) If the assignee or deemed assignee, as applicable, is either unable or unwilling
to provide the certificate (and the other required information) described in Paragraph
12(b)(iii)(A) or Paragraph 12(b)(iii)(B) above, as applicable, then such assignee or deemed
assignee may satisfy the condition stated in Paragraph 12(b)(iii) by providing to Lessor an
irrevocable and



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unconditional (other than the conditions provided herein) standby letter of credit
(“Letter of Credit”) governed by the Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce Publication No. 500, as revised from time to time, and
issued by a commercial bank (“Issuer”), reasonably satisfactory to Lessor, with offices for
banking purposes in the City of San Francisco. The Letter of Credit shall name Lessor as
the beneficiary, be in an amount equal to twelve (12) times the monthly Adjusted Base Rent
then in effect under the Lease (but in no event an amount greater than the remaining rental
obligation under the unexpired term of the Lease, as it may actually be extended from time
to time), have a term of not less than one (1) year (or the period specified below if
shorter), permit multiple drawings, be fully transferable by Lessor to Lessor’s
successor-in-interest in the Building, and otherwise be in form reasonably satisfactory to
Lessor and consistent with the provisions hereof. The Letter of Credit shall also provide
that it shall be deemed automatically renewed, without amendment, for consecutive periods
of one (1) year each during the term of the Lease plus a period of thirty (30) days after
the expiration of the term (and in the event that an arbitration or judicial proceeding has
been instituted by the assignee or deemed assignee, as applicable, as provided under
Paragraph 12(b)(iii)(C)(2) below and such proceeding has not been concluded prior to the
expiration of the term, for consecutive periods of one (1) year each until thirty (30) days
after the issuance of an order under the arbitration or judicial proceeding, as
applicable), unless the Issuer sends written notice (“Issuer Notice”) to Lessor (with a
simultaneous copy to the assignee or deemed assignee, as applicable) by any method
specified in Article 26 of the Lease, as amended, not less than forty-five (45) days
preceding the then expiration date of the Letter of Credit that it elects not to have such
Letter of Credit renewed. If Lessor receives an Issuer Notice, and not later than fifteen
(15) business days prior to the expiry date of the Letter of Credit the assignee or deemed
assignee, as applicable, fails to furnish Lessor with a replacement Letter of Credit
pursuant to the terms and conditions of this Paragraph 12(b)(iii)(C), then Lessor shall
have the right to draw the full amount of the Letter of Credit, by delivering to Issuer
(with a simultaneous copy to the assignee or deemed assignee, as applicable) a Nonrenewal
Declaration (as defined below). The Issuer shall, no sooner than three (3) business days
after receipt of a Nonrenewal Declaration, disburse to Lessor the full amount of the Letter
of Credit, unless, within such time, the Issuer has received a subscribed and sworn
statement of the chief financial officer or other responsible officer of the assignee or
deemed assignee, as applicable, that a replacement Letter of Credit has been provided to
Lessor, to which statement a copy of the replacement Letter of Credit shall be attached, in
which case no amount shall be drawn on the Letter of Credit. Provided, however, in the
event that an automatically renewable Letter of Credit can not be obtained at a
commercially reasonable rate, then the assignee or deemed assignee, as applicable, shall
not less than thirty (30) days preceding each expiration date of the Letter of Credit renew
the Letter of Credit as provided above, and if the assignee or deemed assignee, as
applicable, fails to furnish Lessor with a replacement Letter of Credit at least fifteen
(15) business days prior to the expiry



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date of the Letter of Credit pursuant to the terms and conditions of this Paragraph
12(b)(iii)(C), then Lessor shall have the right to draw the full amount of the Letter of
Credit, by delivering to Issuer (with a simultaneous copy to the assignee or deemed
assignee, as applicable) a Nonrenewal Declaration. The Issuer shall, no sooner than three
(3) business days after receipt of a Nonrenewal Declaration, disburse to Lessor the full
amount of the Letter of Credit, unless, within such time, the Issuer has received a
subscribed and sworn statement of the chief financial officer or other responsible officer
of the assignee or deemed assignee, as applicable, that a replacement Letter of Credit has
been provided to Lessor, to which statement a copy of the replacement Letter of Credit
shall be attached, in which case no amount shall be drawn on the Letter of Credit. In the
event that any Letter of Credit proceeds have been disbursed to Lessor as provided
hereunder, Lessor shall hold the proceeds of the Letter of Credit as a cash deposit
pursuant to the terms and conditions of this Paragraph 12(b)(iii)(C). Notwithstanding
anything to the contrary contained herein, any failure by the assignee or deemed assignee,
as applicable, to renew or replace the Letter of Credit or provide a cash equivalent as
provided herein shall be a default under the Lease. For purposes hereof, a “Nonrenewal
Declaration” shall be a statement, subscribed and sworn by a general partner or the chief
financial officer or assistant financial officer (or equivalent) of Lessor, stating that
the assignee or deemed assignee, as applicable, is required and has failed to timely
furnish a replacement Letter of Credit pursuant to the terms and conditions of Paragraph
12(b)(iii)(C) of the Lease. The following provisions shall apply to the Letter of Credit
and cash deposit, as applicable:




                    (1) If the assignee or deemed assignee, as applicable, defaults in respect of
any of the terms, covenants or conditions of the Lease which impose a monetary
payment obligation on such assignee or deemed assignee, including without
limitation the payment of rent and such default has continued beyond all applicable
cure periods provided in the Lease, and provided that if a notice of default was
either not required under the terms and conditions of the Lease, or if required,
did not expressly provide that failure to cure such default pursuant to the terms
and conditions of the Lease may result in Lessor drawing upon the Letter of Credit
as provided in this Paragraph 12(b), Lessor has given such assignee or deemed
assignee one (1) additional notice of such default which notice expressly refers to
this Paragraph 12(b), and states that failure to cure such default within a period
of ten (10) days after delivery of the additional notice may result in Lessor
drawing upon the Letter of Credit as provided in this Paragraph 12(b) and such
default has not been so cured, then Lessor may apply the whole or any part of any
cash security, or may notify the Issuer and subject to the terms and conditions of
Paragraph 12(b)(iii)(C)(2) below, thereon receive all or a portion of the monies
represented by the Letter of Credit, and apply the whole or any part of such
proceeds, as the case may be, but only in the amount required for the payment of
any past due Base Rent or any other sum as to which such assignee or deemed
assignee is in default, including, without



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limitation, any sum which Lessor may reasonably expend or may then be required
to expend by reason of such assignee’s or deemed assignee’s default in respect of
any of the terms, covenants or conditions of the Lease which impose a monetary
obligation on such assignee or deemed assignee, or to compensate Lessor for any
loss or damage which Lessor may suffer thereby, or any damages or deficiency in the
reletting of the Premises, whether such damages or deficiency accrue or accrues
before or after summary proceedings or other reentry by Lessor. If Lessor applies
any part of proceeds of the Letter of Credit or the cash security, as the case may
be, as permitted hereunder, the assignee or deemed assignee, as applicable, shall
immediately restore the face amount of the Letter of Credit to the face amount
which was applicable immediately prior to Lessor’s drawing down sums thereunder
pursuant to an amendment to the Letter of Credit reasonably acceptable to Lessor or
shall deposit with Lessor a cash sum in an amount which when added to the amount
available to be drawn under the Letter of Credit equals the amount of the Letter of
Credit immediately prior to Lessor’s draw under the Letter of Credit.
Notwithstanding anything to the contrary contained herein, any failure by the
assignee or deemed assignee, as applicable, to restore the face value of the Letter
of Credit to such amount, or to deposit with Lessor a corresponding cash amount,
within ten (10) days after its receipt of a written request from Lessor shall be a
default under the Lease. Without limiting any other rights or remedies of Lessor
as a result of such default and subject to the terms and conditions of Paragraph
12(b)(iii)(C)(2) below, Lessor may draw down any sums then remaining under the
Letter of Credit and the assignee or deemed assignee, as applicable, shall within
ten (10) days after its receipt of a written request from Lessor deposit cash with
Lessor in an amount sufficient to bring the sums held by Lessor to an amount equal
to the current security deposit amount. Any cash held by Lessor shall be held as a
security deposit pursuant to the provisions of this Paragraph 12(b)(iii)(C). The
assignee or the deemed assignee, as applicable, expressly agrees that such assignee
or the deemed assignee shall have no right to apply any portion of the cash
security or proceeds of the Letter of Credit against any of such assignee’s or
deemed assignee’s obligations to pay rent hereunder.




                    (2) Lessor shall have the right to draw on the Letter of Credit from time to
time by delivering to Issuer (with a simultaneous copy to the assignee or deemed
assignee, as applicable) a statement, subscribed and sworn by a general partner or
the chief financial officer or an assistant financial officer (or equivalent) of
Lessor, stating that such assignee or deemed assignee, (aa) is in default under the
Lease, describing such default and the amount of any monetary default or amount
required to cure any nonmonetary default, (bb) has received a notice or notices of
such default from Lessor as required by the Lease (with a copy of such notice or
notices attached to the certificate), and (cc) has failed to cure such default
within the time provided under the Lease. The Issuer



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shall, no sooner than ten (10) business days after receipt of Lessor’s
statement, disburse to Lessor the amount of funds demanded as necessary to cure
such default, unless, within such time, the Issuer has received a subscribed and
sworn statement of the chief financial officer or other responsible officer of the
assignee or deemed assignee, as applicable, that either (x) the amount demanded in
Lessor’s statement has been paid in full to Lessor, to which statement proof of
payment shall be attached, in which event no amount shall be drawn on the Letter of
Credit, or (y) such assignee or deemed assignee has initiated an arbitration or
legal proceeding and filed and served upon Lessor or delivered to Lessor with a
Notice and Acknowledgement of Service, a complaint or other legal pleading
contesting Lessor’s claim of default or Lessor’s claimed amount of damages, to
which statement a copy of the filed complaint or other legal pleading and proof of
service on Lessor or copy of Notice and Acknowledgement of Service shall be
attached, in which event no amount shall be drawn on the Letter of Credit unless
and to the extent ordered by said arbitration or judicial proceeding.




                    (3) The Letter of Credit or cash deposit shall be returned by Lessor to the
assignee or deemed assignee, as applicable, within fifteen (15) business days after
the earlier of:




(aa) (i) the date a certificate conforming to the requirements set forth
in Paragraph 12(b)(iii)(A) is delivered to Lessor certifying that the
assignee or deemed assignee, as applicable, has met the required ratio of
long term debt to EBITDA as of the end of the preceding calendar quarter,
with EBITDA computed on a rolling four quarter basis consisting of such
quarter and the three immediately preceding quarters as specified in
Paragraph 12(b)(iii)(A)(1), provided that there has been no material
uncured default under the Lease by such assignee or deemed assignee
during such time period, and (ii) a twelve (12) month period has elapsed
after the date a certificate under clause (i) is delivered to Lessor
during which there has been no material uncured default under the Lease
by the assignee or deemed assignee, as applicable (provided that if a
notice of default was required under the terms and conditions of the
Lease, it expressly provided that failure to cure such default pursuant
to the terms and conditions of the Lease may result in Lessor drawing
upon the Letter of Credit as provided in this Paragraph 12(b));
or




(bb) (i) (x) the date a certificate conforming to the requirements set
forth in Paragraph 12(b)(iii)(B) is delivered to Lessor certifying that
the assignee or deemed assignee, as applicable, has less than Five
Hundred Million Dollars ($500,000,000) of long term debt and at least One
Hundred Million Dollars ($100,000,000) of EBITDA as of the end of the
preceding



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calendar quarter, with EBITDA computed on a rolling four quarter basis
consisting of such quarter and the three immediately preceding quarters
as specified in Paragraph 12(b)(iii)(A)(1), provided that there has been
no material uncured default under the Lease by such assignee or deemed
assignee during such time period, and (ii) a twelve (12) month period has
elapsed after the date a certificate under clause (i) is delivered to
Lessor during which there has been no material uncured default under the
Lease by the assignee or deemed assignee, as applicable (provided that if
a notice of default was required under the terms and conditions of the
Lease, it expressly provided that failure to cure such default pursuant
to the terms and conditions of the Lease may result in Lessor drawing
upon the Letter of Credit as provided in this Paragraph 12(b));
or




(cc) the termination or expiration of the term of the Lease and delivery
of the entire possession of the Premises to Lessor in the manner required
by the Lease, provided that there is no material uncured default under
the Lease by the assignee or deemed assignee, as applicable. In the
event that there is a material uncured default under the Lease by such
assignee or deemed assignee, the term of the Letter of Credit shall be
extended as provided in Paragraph 12(b)(iii)(C) above and the provisions
of Paragraph 12(b)(iii)(C) shall apply with regard to the Letter of
Credit or cash security, as applicable, and as set forth therein, any
cash security not required to cure a default by such assignee or deemed
assignee as described therein shall be returned to such assignee or
deemed assignee.




                    (4) In the event of any conveyance of title to the Building, Lessor shall
transfer any cash security to the new Lessor, and with respect to the Letter of
Credit, within ten (10) days after notice, such assignee or deemed assignee, at its
sole cost and expense, shall arrange for the transfer of the Letter of Credit to
the new Lessor, as designated by Lessor in the foregoing notice or have the Letter
of Credit canceled and reissued in the name of the new Lessor. Provided the cash
security or Letter of Credit, as the case may be, has been so transferred, the
assignee or deemed assignee shall look solely to the new Lessor for the return of
the cash security or Letter of Credit, as applicable, and Lessor shall thereupon be
released by such assignee or deemed assignee from all liability for the return of
said cash security or Letter of Credit, as the case may be, provided that the
transferee shall have assumed in an instrument reasonably satisfactory to such
assignee or deemed assignee all of Lessor’s obligations under the Lease accruing
from and after such sale or conveyance, including the obligations set forth herein
concerning the Letter of Credit. Lessor shall cooperate with the assignee or deemed
assignee, as applicable, to transfer or reissue the Letter of Credit to the new
Lessor. The provisions hereof shall apply to every transfer or



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assignment made of the cash security or Letter of Credit, as applicable, to a
new Lessor. Lessor and the assignee or deemed assignee, as applicable, further
covenant and agree that neither shall assign or encumber or attempt to assign or
encumber the cash security or Letter of Credit, as applicable, and neither Lessor
nor the assignee or deemed assignee, as applicable, or their respective successors
or assignees shall be bound by any such agreement, encumbrance, attempted
assignment or attempted encumbrance, except that the cash security and Letter of
Credit, as applicable, may be pledged by Lessor as security to the holder of a
first deed of trust upon Levi’s Plaza, provided that such pledge is subject to all
of assignee’s or deemed assignee’s, as applicable, rights under the Lease regarding
the cash security or Letter of Credit.



               (c) Subleases To Lessee Contractors And Excluded Subtenants. Lessor and Lessee desire
to further clarify the provisions of Paragraph 11.2 of the Lease regarding Lessee’s right to assign
the Lease or sublet all or a portion of the Premises without the consent of Lessor. In addition to
the foregoing, Lessor’s consent shall not be required nor shall Lessor have any recapture rights
with respect to a sublease by Lessee from time to time of space within the Premises to (A) (i)
Argonaut Securities Company, and (ii) Haas Baseball Company (each an “Excluded Subtenant” and
collectively, “Excluded Subtenants”), and (B) any Person that is to use such space exclusively for
the purpose of performing or furnishing services exclusively for Lessee (a “Lessee Contractor”),
provided that (1) no demising walls shall be erected for purposes of such occupancy by any such
Person, (2) the term of such sublease shall not exceed the lesser of two (2) years or the remaining
term of the Lease, and (3) the amount of space sublet pursuant to any such sublease shall not
exceed fifty percent (50%) of a floor in the Building.




               (d) Shared Profits. Lessor and Lessee also desire to clarify the provisions of
Paragraph 11.3 of the Lease regarding the sharing of profits on an assignment of the Lease by
Lessee or a sublet of all or a portion of the Premises by Lessee. Accordingly, Paragraph 11.3 of
the Lease shall not apply to any sublease or assignment by Lessee to an Affiliate of Lessee,
Permitted Assignee, a Lessee Contractor or an Excluded Subtenant. Subject to such exclusion, the
fourth (4th) sentence of Paragraph 11.3 of the Lease is hereby revised to provide that Lessee shall
pay Lessor an amount equal to fifty percent (50%) of the net profits (as described in Paragraph
11.3 of the Lease) (i) on subletting, either monthly or annually at the option of Lessee, and (ii)
on an assignment, as received by Lessee. For purposes hereof, “net profits” shall mean the total
rent or other monetary consideration received from the assignee or sublessee during the assignment
or sublease term (“Gross Sublet Proceeds”), less: the sum of (A) the Adjusted Base Rent paid to
Lessor by Lessee during the period of the assignment or sublease term for the space covered by the
assignment or sublease (“Transferred Space”); (B) any tenant improvement allowance or free rent
paid or given by Lessee to its assignee or sublessee (excluding any personal property allowances,
donations or contributions); (C) broker’s commissions; (D) reasonable attorneys’ fees; (E) lease
takeover payments; (F) costs required to be paid by Lessee to Lessor in connection with such
assignment or sublease; and (G) costs of advertising the Transferred Space




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(collectively, the “Transaction Costs”); provided, however, Lessor shall not be paid any share
of net profits until Lessee has recovered, from the excess of the Gross Sublet Proceeds received
over the Adjusted Base Rent paid to Lessor by Lessee calculated under (A) above, all of the costs
set forth in parts (B) through (G) above in connection with such Transferred Space. For example,
if five (5) years then remain in the Term, and Lessee pays to Lessor $10,000,000 each year in rent
for the Transferred Space during that period, and Lessee receives $11,000,000 in annual assignment
or sublease rent for the Transferred Space during that period, and Lessee incurs $5,000,000 in
Transaction Costs relating to the Transferred Space, there would be no net profits hereunder. If,
however, for the same period, Lessee pays to Lessor $10,000,000 in rent for the Transferred Space,
receives $11,000,000 in annual assignment and sublease rent for the Transferred Space, and incurs
$3,000,000 in Transaction Costs, there would be a net profit hereunder of $2,000,000 relating to
the Transferred Space, which would be payable during the last two (2) years of the Term in
twenty-four (24) monthly installments of $88,333.33 each. In the event that any costs set forth in
parts (B) through (G) above are expenditures to be paid by Lessee during the period of the
assignment or sublease term for the Transferred Space, Lessee shall make a reasonable estimate of
such expenditures and net profits shall be calculated based upon such estimates. Upon the actual
expenditure of any such deferred costs, Lessee and Lessor shall reconcile the amount of their
respective shares of net profits, if any, and make any payment required based on account of such
reconciliation.




               (e) Transfers By Lessor. Lessor and Lessee further desire to clarify Article 11 of
the Lease by adding the following at the end of Paragraph 11.4 of the Lease:





Notwithstanding the foregoing, Lessor shall not be released from
such liability hereunder unless and until Lessor delivers to
Lessee an instrument in writing in form and substance reasonably
satisfactory to Lessee executed by Lessor’s successor in interest
assuming all of the obligations and liabilities imposed upon
Lessor herein or arising hereunder accruing from and after such
sale or conveyance.



               (f) Lessor’s Recapture Right. Lessor and Lessee further desire to clarify Article 11
of the Lease by adding thereto a right on the part of Lessor to recapture the Premises under
certain prescribed circumstances in the event of a proposed assignment or subletting of all or a
portion of the Premises. Accordingly, Article 11 is hereby revised to include the following new
Paragraph 11.5:





“11.5 Recapture of Premises by Lessor.




     11.5(a) By written notice to Lessee (the “Termination Notice”) given
within twelve (12) business days following a request by Lessee, pursuant to
Paragraph 11.1 of the Lease, for Lessor’s consent to a proposed assignment of
the Lease or a proposed subletting



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of all or a portion of the Premises, Lessor shall have the right to (i)
terminate the Lease in the event of an assignment hereof or a sublet of the
entire Premises, or (ii) terminate the Lease as to the portion of the Premises
to be sublet, if the proposed sublet applies to less than the entire Premises
(the rights described in clauses (i) and (ii) of this Paragraph 11.5 shall be
known singularly and collectively as the “Right of Recapture”); provided,
however, that Lessor shall have the Right of Recapture only in the event that
one (1) or more of the following conditions applies at the time Lessee
requests Lessor’s consent to a proposed assignment or subletting by Lessee:




               (A) The Square Footage Threshold (as defined in Paragraph 3 of the Second
Amendment) has been exceeded (or will be exceeded by the currently proposed
sublease or assignment);




               (B) Lessee no longer occupies at least two hundred fifty thousand
(250,000) rentable square feet within the Building; provided, that, for the
purposes of this Paragraph 11.5(a), space shall be deemed “occupied” by Lessee
if, and only if, (i) such space is leased to Lessee (and, except as permitted
in the following clause (ii), such space is not subject to a sublease or
assignment by Lessee or any other form of occupancy agreement between Lessee
and any third party), or (ii) such space is subleased or assigned by Lessee to
a Permitted Assignee, an Affiliate of Lessee, a Lessee Contractor or an
Excluded Subtenant; or




               (C) If Lessee proposes to sublet all or a portion of the Premises, and
either (i) the term of the proposed sublease (including options to extend or
renew the term) is greater than seven (7) years, or (ii) the proposed sublease
will commence during the last two (2) years of the then current term of the
Lease, unless Lessee extends the then current term of the Lease, in which case
Lessor shall not have a Right of Recapture pursuant to this item (ii) with
respect to the proposed sublet space so long as the total sublease term
(including options to extend or renew the term) does not exceed seven (7)
years.




     11.5(b) If Lessor elects to exercise its Right of Recapture hereunder
with respect to a proposed subletting by Lessee, and the Premises to be
covered by such proposed sublease is less than the entire Premises (any such
portion herein the “Recaptured Space”), the parties shall execute an amendment
to the Lease pursuant to which (x) all of Lessee’s obligations pertaining to
such Recaptured Space, including those for Base Rent, Adjusted Base Rent,
Lessee’s Percentage of Operating Expenses and Adjusted Taxes for the Building
and any additional rent and other charges due hereunder shall be reduced in
proportion to the reduction in the rentable square footage



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of the Premises caused thereby, the amount of such reductions to be
determined by multiplying such obligations by a fraction, the numerator
of which is the rentable square footage of the Premises included within such
sublease (i.e. the Recaptured Space) and the denominator of which is the
rentable square footage of the entire Premises immediately prior to such
termination by Lessor, and (y) the Operating Expense provisions within the
Lease (including, without limitation, Lessee’s obligation for payment of
Lessee’s Percentage of Operating Expenses with respect to the Building) and
the parties respective maintenance and repair obligations under Paragraph 11
of the Second Amendment shall be adjusted to reflect the fact that Lessor will
once again assume control over operation of the Building, provided, that, in
adjusting the Operating Expense provisions and the parties respective
obligations under the Lease for maintenance, repairs and replacements, the
parties shall strive to reformulate their respective rights, obligations and
responsibilities in a fashion consistent with the practices in effect prior to
Lessee’s assumption of the operation and maintenance of the Building. (In
such event, Lessor shall manage the maintenance and repair of the Building in
a manner consistent with standards customarily maintained by the owners of the
Comparable Maintenance Standards Buildings, including, without limitation,
instituting competitive bidding practices, if any, with respect to contractors
and vendors which are customarily adhered to by the owners of the Comparable
Maintenance Standards Buildings in connection with maintenance and repair of
the Comparable Maintenance Standards Buildings.) Lessor shall bear the costs
incurred in physically separating the space covered by such sublease from the
balance of the Premises and in complying with any applicable laws or
regulations applying due to such separation, including costs of compliance
required as a result of or in connection with such separation.




     11.5(c) If Lessor does not exercise its Right of Recapture under this
Paragraph 11.5 with respect to any proposed assignment or subletting, then
Lessor shall not unreasonably withhold, condition or delay its consent to such
proposed assignment or subletting.




     11.5(d) Lessor’s Right of Recapture shall not apply to any assignment or
subletting made to (i) an Affiliate of Lessee or a Permitted Assignee pursuant
to Paragraph 11.2 of the Lease and Paragraph 12(a) of the Second Amendment, or
otherwise made to any Affiliate of Lessee or Permitted Assignee, or (ii) a
Lessee Contractor, or (iii) an Excluded Subtenant.”



               (g) Whenever Lessor’s consent to a proposed assignment or subletting is required pursuant to
Paragraph 11.1 of the Lease, Lessor agrees that it shall not unreasonably withhold, condition or
delay such consent and Lessor’s consent to such


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assignment or subletting shall be deemed given unless Lessor exercises its Right of
Recapture or otherwise notifies Lessee in writing of its refusal to grant such consent (which
notice shall state the reason(s) for the withholding of such consent), within twelve (12) business
days after Lessee’s request for Lessor’s consent. Without limiting the circumstances for which it
may be reasonable for Lessor to withhold its consent to an assignment or subletting pursuant to
Article 11 of the Lease, Lessor and Lessee acknowledge that it shall be reasonable for Lessor to
withhold its consent in the following instances:




                    (i) If at the time Lessor’s consent is requested or at any time prior to the granting of such
consent, Lessee is in default beyond any applicable cure period specified under the Lease;



                    (ii) If in Lessor’s reasonable judgment, the use of the Premises by the proposed assignee or
sublessee would involve occupancy by other than primarily general office personnel;



                    (iii) If either (A) the sublease or assignment is to a proposed assignee or sublessee that
intends to use all or a portion of the Premises for retail purposes and, in Lessor’s reasonable
judgment, such retail use of the Premises by the proposed assignee or sublessee would breach any
so-called “exclusive” use provision then in an existing lease or would cause Lessor to violate a
provision in any lease which prohibits the lease of space to such tenant’s competitors or give a
tenant a right to cancel its lease in the event that space is leased to a competitor (for purposes
hereof, the foregoing provisions collectively are “exclusive rights”), and such tenant occupies
retail space in Levi’s Plaza, or (B) in Lessor’s reasonable judgment, the use of the Premises by
the proposed assignee or sublessee would breach any so-called “exclusive” use provision then in an
existing lease, or would cause Lessor to violate a provision in any lease which prohibits the lease
of space to such tenant’s competitors or give a tenant a right to cancel its lease in the event
that space is leased to a competitor (for purposes hereof, the foregoing provisions collectively
are “exclusive rights”), and such lease is for at least a minimum of sixteen thousand (16,000)
rentable square feet of non-retail space in the Building. In connection with the foregoing, Lessor
agrees to provide Lessee with prompt written notice of any exclusive rights granted in favor of any
such tenant presently in effect, or which are granted on or after the Effective Date; provided,
however, that this restriction relating to violations of exclusive rights shall not preclude Lessee
from subleasing Lessee’s cafeteria or food service facilities to a third party operator in
connection with a contract between such third party operator and Lessee for the operation of
Lessee’s cafeteria or food service facilities so long as such cafeteria or food service facilities
continue to be operated in accordance with the provisions of the Lease, including without
limitation, Paragraph 9 of this Second Amendment;



                    (iv) If in Lessor’s reasonable judgment, the financial worth of the proposed assignee or
sublessee is not sufficient to meets its obligations under the proposed assignment or sublease;



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



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



                    (vii) If the proposed assignee or sublessee is not then a Levi’s Plaza tenant and such
proposed assignee or sublessee has delivered to or received from Lessor a written request for
proposal or offer or letter of intent for space in Levi’s Plaza during the forty-five (45) days
immediately preceding notice by Lessee of its intention to assign or sublet (any such proposed
assignee or sublessee is referred to herein as a “Prospective Tenant”), provided, however, in order
for Lessor to object to any proposed assignee or sublessee pursuant to this Paragraph 11.5(g)(vii),
Lessor must be able to furnish such proposed assignee or sublessee with space in Levi’s Plaza that
is substantially comparable in size to the space required by such proposed assignee or sublessee.
In connection with the foregoing, if Lessee notifies Lessor of its intention to assign or sublet
space within the Building and requests from Lessor the information hereinafter described, Lessor
shall within five (5) business days after receipt of such notice, furnish Lessee with a list of
parties qualifying as Prospective Tenants (the “Original List”) and shall thereafter update the
Original List every thirty (30) days with any additional Prospective Tenants that have delivered to
or received from Lessor a written request for proposal or offer or letter of intent for space in
Levi’s Plaza after Lessor’s receipt of notice by Lessee of its intention to assign or sublet (the
“Updated List(s)”). On and after Lessee’s receipt of the Original List, Lessor shall be precluded
from adding to an Updated List any prospective tenant as to which Lessee can establish that, prior
to such tenant having delivered to or received from Lessor a written request for proposal or offer
or letter of intent for space in Levi’s Plaza, Lessee delivered to or received from such tenant a
written request for proposal or offer or letter of intent for Lessee’s space in the Building.
Notwithstanding the foregoing, a Prospective Tenant shall be removed from the Original List or an
Updated List, as applicable, in the event that (i) within sixty (60) days after such Prospective
Tenant was first included on the Original List or an Updated List, as applicable, such Prospective
Tenant has not executed a letter of intent for space in Levi’s Plaza, or (ii) within one hundred
eighty (180) days after such Prospective Tenant was first included on the Original List or an
Updated List, as applicable, such Prospective Tenant has not executed a lease agreement for space
in Levi’s Plaza.



               (h) No assignment or subletting by Lessee pursuant to Article 11 of the Lease, nor any consent
thereto by Lessor, shall relieve Lessee of any obligation to be performed by Lessee under the
Lease, except to the extent, if any, that Lessor elects, pursuant to its Right of Recapture, to
terminate the Lease in whole or in part.




               (i) In the event Lessee shall assign the Lease or sublet the Premises or request the consent
of Lessor to any assignment or subletting requiring Lessor’s consent hereunder, then Lessee shall
pay Lessor’s reasonable attorneys’ fees





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incurred in connection therewith (not to exceed two thousand dollars ($2,000) in each such case).




               (j) Notwithstanding anything to the contrary contained in Paragraph 11.1 of the Lease, Lessee
may not, without the prior written consent of Lessor, which Lessor may withhold in its sole and
absolute discretion, assign its interest in the Lease with respect to, or sublet any portion of the
Premises which constitutes, less than fifty percent (50%) of the net rentable square footage of any
floor in the Building; provided, however, that the foregoing restriction shall not apply to any
assignment or subletting (i) to an Affiliate of Lessee or Permitted Assignee pursuant to Paragraph
11.2 of the Lease or otherwise made to any Affiliate of Lessee or Permitted Assignee, or (ii) to a
Lessee Contractor, or (iii) an Excluded Subtenant.



     13. Use of the Premises. From and after the Effective Date, Paragraph 6 of the MOU
shall be deleted in its entirety and replaced with the provisions of this Paragraph 13. Lessor and
Lessee desire to clarify the permitted uses of the Premises by deleting the last sentence of
Paragraph 7.1 of the Lease and adding the following:




“In addition, Lessee shall have the right to use the Premises for sales of
“samples” to Lessee’s employees from time to time, sales of Lessee’s products by
telephone and catalog, and the promotion and conduct of electronic commerce by
Lessee, its Affiliates, a Permitted Assignee or a Lessee Contractor (such as by
use of the internet and other like and future media).”



     14. Base Building and Common Area Work. Lessor shall be responsible for constructing
the Base Building Work (as defined below) at its sole cost and expense. Subject to Construction
Delays (as defined in Paragraph 15(e) below) or delays caused in whole or in part by Lessee, Lessor
shall use its commercially reasonable efforts to Substantially Complete all Base Building Work in
accordance with the schedule set forth in Exhibit B attached hereto. As used herein, the
terms “Substantially Complete” or “Substantial Completion” shall mean that the work in question is
complete subject only to normal punch list items that do not affect the beneficial use thereof.
“Base Building Work” shall mean (i) work required to bring the improvements located within the
Designated Areas into compliance with Uniform Building Code in effect as of December 31, 2009, the
Americans with Disabilities Act and any regulation promulgated thereunder and in effect as of
December 31, 2009 and any applicable life-safety code requirements in effect as of December 31,
2009, as and to the extent such work is triggered by the Leasehold Improvements (as such term is
defined in Paragraph 15(a) below), and (ii) those improvements described on Exhibit B
attached hereto. “Designated Areas” shall mean the exterior entrances/exits (Building shell only),
main entrance lobby, elevator lobbies, bathrooms, elevators, loading areas, stairwells, electrical
and mechanical rooms, and roof of the Building and the Exterior Common Areas (excluding the park
located adjacent to the Koshland Building). All Base Building Work shall be completed by Lessor in
a good and workmanlike manner and all work shall be consistent with the best practices and
standards in the building construction industries.



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The Base Building Work shall be constructed by
Lessor subject to the following conditions:




          (a) All construction work relating to the Base Building Work shall be conducted in accordance
with all applicable governmental laws, rules, regulations and requirements, and prior to the
commencement of work, Lessor shall be responsible for obtaining, at its sole cost and expense, all
building and other permits necessary in connection with the construction of the Base Building Work.
All fire/life-safety systems shall be tested and approved by contractors on behalf of Lessor and
Lessee and by the governmental agencies having jurisdiction thereof.




          (b) In the event that plans and specifications for a Base Building Improvement are required to
obtain a building permit for such work or other drawings or performance criteria are provided to
Lessor’s contractor (“Lessor’s Plans”), Lessor shall submit a copy of Lessor’s Plans to Lessee for
its review and approval not less than ten (10) days in advance of the commencement of any
construction related thereto. Notwithstanding the foregoing, Lessee acknowledges and agrees that
Lessee’s review of Lessor’s Plans shall only be for the limited purpose of reviewing whether or not
the Base Building Work are designed to comply with the specifications, if any, prepared for such
Base Building Work (copies of which shall be provided by Lessor to Lessee), and in connection
therewith, Lessee’s approval shall not be unreasonably withheld. Except as hereinbefore stated,
Lessee’s approval of Lessor’s Plans shall not be required as a pre-condition for the making of the
Base Building Work by Lessor. Notwithstanding whether any of Lessor’s Plans are reviewed by
Lessee, or by Lessee’s architect, engineer or other consultants, and notwithstanding any advice or
assistance which may be rendered to Lessor by Lessee or Lessee’s architect, engineer or other
consultants, Lessee is not in any way warranting or representing that Lessor’s Plans are suitable
for their intended use or comply with applicable laws and regulations, and Lessee shall have no
liability whatsoever in connection with Lessor’s Plans, nor any responsibility for any omissions or
errors contained therein.




          (c) Lessee shall have the right, during the period of any construction of the Base Building
Work, to review and monitor the progress of such construction; if requested by Lessee,
representatives of Lessee shall be given adequate notice of and shall be entitled to attend
regularly scheduled job meetings concerning any Base Building Work.




          (d) Lessor shall indemnify, defend and hold Lessee harmless from and against any and all
claims, liabilities, losses or damages whatsoever arising out of or in connection with the
construction of any Base Building Work, except to the extent that the same arise from the
negligence or willful misconduct of Lessee, its agents, contractors, employees, or invitees.




          (e) During the construction of any Base Building Work, trash removal shall be done continually
at Lessor’s cost and expense, and no trash, debris or other waste may be deposited at any time in,
on or about or outside the Premises other than in areas which are designated for dumpsters or
temporary consolidation of trash prior to



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collection. Storage of Lessor’s contractors’ and
subcontractors’ construction materials, tools and equipment shall be either outside the Premises in
an area reasonably approved by Lessee, or, if within the Premises, confined to an area reasonably
approved by Lessee.
In no event shall any materials, tools and equipment, or debris be stored in any other areas
without Lessee’s prior written consent, which shall not be unreasonably withheld.




          (f) Within a reasonable period following Substantial Completion of any Base Building Work for
which plans and specifications were required to obtain a building permit for such work, Lessor
shall furnish Lessee with a copy of the “record” plans and specifications showing the changes made
to the Building and/or Premises, as applicable.




          (g) During the design and construction of any Base Building Work, Lessor agrees that Lessor
and its agents and contractors shall not materially impede or interfere with the conduct of
business by Lessee in the Premises or with the work of Lessee’s contractors or subcontractors in
the Premises (except to the extent that Lessor or its agents or contractors may reasonably be
required to take any action necessary to the ongoing operation of the Building, in which event
Lessor and its agents and contractors shall use commercially reasonable efforts to minimize any
interference with Lessee’s conduct of business and/or the work of Lessee’s contractors or
subcontractors).




     15. Leasehold Improvements Allowance.



          (a) In consideration of Lessee’s exercise of its Second Option, upon execution of this Second
Amendment, Lessor shall provide Lessee a leasehold improvements allowance (the “Leasehold
Improvements Allowance”) in the amount of Fifteen Million Nine Hundred Sixty-Five Thousand Eight
Hundred Sixty-Five Dollars ($15,965,865) ($45.00 per rentable square foot) to be used for the costs
of relocating from other facilities to the Premises on or after June 24, 2009, constructing
Lessee’s desired improvements and alterations within the Premises after the Effective Date
(“Leasehold Improvements”), consulting and permit fees and other costs incurred by Lessee in
connection with the Leasehold Improvements on or after June 24, 2009 (collectively, the “Leasehold
Improvement Costs”). The Leasehold Improvements Allowance shall be made available to Lessee
immediately following the execution of this Amendment and shall be disbursed in accordance with
this Paragraph 15. The Leasehold Improvement Allowance shall be net of any costs and expenses
incurred by Lessor either on its own behalf or on behalf of Lessee in connection with any
alterations or renovations required by this Second Amendment, provided that Lessee shall reimburse
Lessor for the actual third party out-of-pocket costs and expenses reasonably incurred by Lessor
with respect to any consultants retained by Lessor in connection with Lessee’s performance of the
Leasehold Improvements. Without limiting the generality of the foregoing, Lessee shall not be
obligated to reimburse Lessor for Lessor’s administrative, management or supervision costs in
connection with Lessee’s installation of the Leasehold Improvements, nor shall any such
administrative, management or supervision costs be deducted from the Leasehold Improvements
Allowance.




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          (b) Lessor shall disburse the Leasehold Improvements Allowance to reimburse Lessee for payment
of Leasehold Improvement Costs. In connection with the foregoing, Lessee shall deliver to Lessor,
not more frequently than one (1) time during
each calendar month or any thirty (30) day period, a request for payment of Leasehold
Improvement Costs (“Reimbursement Request”).




               (i) If the Reimbursement Request covers Leasehold Improvements, Lessee shall submit the
following items with such Reimbursement Request covering all Leasehold Improvement Costs with
respect to such Leasehold Improvements: (i) invoices from the general contractor and all
subcontractors, laborers, materialmen, and suppliers for whom Leasehold Improvements Costs are
being requested; (ii) executed mechanic’s lien releases (conditional with respect to the current
Reimbursement Request amounts and unconditional with respect to all previous Reimbursement Request
amounts funded by Lessor) from the general contractor and all subcontractors, laborers,
materialmen, and suppliers for whom Leasehold Improvements Costs are being requested, which
mechanic’s lien releases shall comply with the appropriate provisions, as reasonably determined by
Lessor, of California Civil Code Section 3262(d); and (iii) all other information reasonably
requested by Lessor. Lessee hereby acknowledges and agrees that Lessee’s submission of a
Reimbursement Request shall be deemed Lessee’s acceptance and approval of the work furnished or the
materials supplied as set forth in such Reimbursement Request.



               (ii) If the Reimbursement Request covers Leasehold Improvements Costs other than
reimbursements for Leasehold Improvements, Lessee shall submit the following items with such
Reimbursement Request covering all such Leasehold Improvement Costs which do not relate to
Leasehold Improvements: (i) evidence of Lessee’s payment in full of the Leasehold Improvements
Costs which do not relate to Leasehold Improvements for which Lessee is requesting reimbursement;
and (ii) all other information reasonably requested by Lessor.



               (iii) Within twenty (20) days following Lessor’s receipt of a Reimbursement Request, together
with the additional information required pursuant to this Paragraph 15(b), Lessor shall deliver to
Lessee an amount equal to the lesser of (A) the amount requested in such Reimbursement Request, and
(B) the balance of any remaining available portion of the Leasehold Improvements Allowance;
provided, however, that at Lessee’s discretion, Lessee may direct Lessor to disburse all or a
portion of the Leasehold Improvements Allowance directly to Lessee’s contractors to pay Leasehold
Improvement Costs due such contractors that have been approved for payment by Lessee in writing.
If so directed by Lessee, Lessor shall disburse such payments to such contractors within twenty
(20) days after Lessor’s receipt of Lessee’s Reimbursement Request together with the additional
information required pursuant to this Paragraph 15.



               (iv) Upon the completion of all Leasehold Improvements, Lessee shall obtain and submit to
Lessor (I) executed unconditional mechanic’s lien releases from the general contractor and all
subcontractors, laborers, materialmen, and suppliers who have provided services or materials in
connection with the Leasehold



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Improvements, which mechanic’s lien releases shall comply with the
appropriate provisions, as reasonably determined by Lessor, of California Civil Code Section
3262(d), and (II) a temporary certificate of occupancy for the Premises (the provision of
such items following completion of the Leasehold Improvements shall be referred to herein as
“Evidenced Lien Free Completion”). Lessor’s payment of such amounts shall not be deemed Lessor’s
approval or acceptance of the work furnished or materials supplied as set forth in Lessee’s
Reimbursement Request.



          (c) Without limiting Paragraph 15(b) above, Lessee may utilize up to One Million Seven Hundred
Seventy-Three Thousand Nine Hundred Eighty-Five Dollars ($1,773,985) of the Leasehold Improvements
Allowance for the costs of fixtures, furniture and equipment to be used by Lessee in the Premises
(the “FFE Costs”). Requests for applying a portion of the Leasehold Improvements Allowance toward
reimbursement of FFE Costs shall be submitted in the manner set forth in Paragraph 15(b)(ii) above,
with any amounts so paid to Lessee pursuant to said Paragraph 15(b)(ii) in reimbursement of FFE
Costs reducing the amount of the remaining Leasehold Improvements Allowance.




          (d) Without limiting Paragraph 15(b) above, after Evidenced Lien Free Completion has occurred
(as provided in Paragraph 15(b) above), Lessee may utilize up to One Million Seven Hundred
Seventy-Three Thousand Nine Hundred Eighty-Five Dollars ($1,773,985) of the Leasehold Improvements
Allowance for any purpose deemed appropriate by Lessee. In connection with the foregoing and if
elected by Lessee, Lessee shall deliver to Lessor a request for payment (“Cash Reimbursement
Request”); provided, however, that no such Cash Reimbursement Request may be submitted until after
Evidenced Lien Free Completion has occurred. Within twenty (20) days following receipt of a
validly submitted Cash Reimbursement Request, Lessor shall disburse to Lessee an amount equal to
the lesser of (A) One Million Seven Hundred Seventy-Three Thousand Nine Hundred Eighty-Five Dollars
($1,773,985), (B) the amount requested in such Cash Reimbursement Request, or (C) the balance of
any remaining available portion of the Leasehold Improvements Allowance. Lessor hereby
acknowledges and agrees that Lessee shall not be required to produce invoices or other evidence of
how any funds requested in a Cash Reimbursement Request have been spent or will be spent.




          (e) If Lessee has not submitted requests for disbursement of all of the Leasehold Improvements
Allowance, on or before January 1, 2014 (the “Outside Request Date”), all remaining amounts
comprising the Leasehold Improvements Allowance for which Lessee has not submitted either
Reimbursement Requests (meeting the requirements and limitations of Paragraph 15(b) above) or Cash
Reimbursement Requests (meeting the requirements and limitations of Paragraph 15(c) above) shall be
forfeited; provided, however, that if such failure to submit such Reimbursement Requests result
from delays in construction of the Leasehold Improvements arising from an event(s) of Construction
Delay (as defined below), then the Outside Request Date shall be extended by one (1) day for each
day that the construction of the Leasehold Improvements has actually been delayed as the result of
a Construction Delay. As used herein, the term “Construction Delay” shall mean delays in
construction of the Leasehold Improvements attributable to (i) strikes, lockouts, labor troubles,
inability to



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procure materials, power failure, restrictive governmental laws or regulations, civil
disturbances, war, acts of terrorism, failure to secure permits within the normal time frames,
lightening, earthquake, fire, storm, hurricane, tornado, flood, explosion and any
other similar cause beyond the reasonable control of Lessee, or (ii) material interference by
Lessor; provided, however, as a condition to claiming the benefit of any extension of the Outside
Request Date due to such Construction Delay, Lessee shall provide Lessor with written notice of
such Construction Delay, within thirty (30) days of Lessee’s knowledge thereof and the nature of
its impact upon Lessee’s completion of the Leasehold Improvements and Lessee shall thereafter keep
Lessor regularly informed of the status of such Construction Delay and its impact upon the
completion of the Leasehold Improvements.




          (f) If Lessor sells or otherwise transfers its interests in the Building prior to the Outside
Request Date, either directly or through an indirect transfer of a “controlling interest”
(excluding any sale or other transfer to a Permitted Lessor Transferee) in the entity comprising
Lessor (as determined in accordance with Paragraph 2.1.11 of the Lease, as amended) (such a sale or
transfer, herein a “Triggering Sale”), then Lessor shall deposit, on or prior to the date of
closing of such Triggering Sale, the remaining balance of the Leasehold Improvements Allowance in
an escrow account established with First American Fund Control Inc., 200 Commerce, Irvine,
California 92602 or another escrow company selected by Lessor and approved by Lessee (“Escrow
Agent”) together with instructions to the Escrow Agent, in a form prepared by Lessor and approved
by Lessee, instructing Escrow Agent to disburse the Leasehold Improvements Allowance in accordance
with this Paragraph 15. Notwithstanding the foregoing, if a Triggering Sale has occurred and
Lessor has not deposited the remaining balance of the Leasehold Improvements Allowance in escrow
with Escrow Agent on the date of closing of such Triggering Sale, as required pursuant to this
Paragraph 15(f), then Lessee shall have the right, in addition to any other remedies available to
Lessee, to offset the entire remaining balance of the Leasehold Improvements Allowance at the time
and in the manner provided in Paragraph 15(h) below.




          (g) If Lessor fails to disburse any amount of the Leasehold Improvements Allowance as and when
required under this Paragraph 15 (other than Lessor’s failure to fund any amount required into
escrow with the Escrow Agent upon the closing of a Triggering Sale (as provided in Paragraph 15(f)
above), upon ten (10) days prior written notice to Lessor, Lessee shall have the right, in addition
to any other remedies available to Lessee, to recover such amount by amortizing such amount over
the remaining term of the Lease, with interest at the Amortizing Rate (as defined below), and
deducting such amortized amount from the monthly Base Rent as it comes due under the Lease;
provided, however, in no event shall the aggregate amount offset by Lessee in any one (1) month of
the term exceed twenty-five percent (25%) of the Base Rent that is due in the subject month. As
used herein, the term “Amortizing Rate” shall mean an interest rate per annum to (i) the then
current base rate of interest announced publicly in San Francisco, California, by Wells Fargo Bank,
N. A. as the prime rate (or if such bank ceases to exist, the largest bank headquartered in the
State of California) (herein, the “Prime Rate”), plus (ii) two percent (2%), measured on the date
Lessee first elects to offset any such amounts against the Base Rent, as provided in this Paragraph
15(g).




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          (h) If Lessor fails to fund any amount (“Escrow Amount”) required into escrow with the Escrow
Agent upon the closing of a Triggering Sale (as provided in
Paragraph 15(f) above), upon ten (10) days prior written notice to Lessor, Lessee shall have
the right, in addition to any other remedies available to Lessee, to offset the full Escrow Amount
which has not then been disbursed against the monthly Base Rent as it comes due under the Lease.




     16. Parking.



          (a) Paragraph 31.1 of the Original Lease and Paragraph 7 of the First Amendment are hereby
deleted in their entirety and replaced with the provisions of this Paragraph 16. Notwithstanding
anything to the contrary herein, Lessor hereby grants to Lessee an option at any time or times
during the term hereof to use one (1) parking stall on a monthly rental basis for parking for every
one thousand eight hundred twenty-five (1,825) rentable square feet in the Premises at such time
(the “Guaranteed Spaces”). The Guaranteed Spaces shall be located in either the parking areas of
the Building (the “Building Garage”) or in the parking garage located at 101 Lombard (the “101
Lombard Garage”), subject to the terms of this Paragraph 16. Rent for the parking spaces leased by
Lessee within the Building Garage and the unreserved parking spaces leased by Lessee within the 101
Lombard Garage shall be payable therefore at the lowest rate then charged (except van pool rates)
in the other parking spaces within Levi’s Plaza; provided, however, that Lessee’s car pool vans
shall be entitled to any special van pool rate. Rent for the reserved parking spaces leased by
Lessee within the 101 Lombard Garage shall be payable at the lowest rate then charged (except van
pool rates) for other reserved parking spaces within Levi’s Plaza. Such option may be exercised by
Lessee by notice to Lessor in writing designating the number of stalls desired, and the parking
stalls shall be made available to Lessee as soon as possible thereafter.




          (b) Lessee may select up to eighty-two (82) spaces in the Building Garage as part of the
Guaranteed Spaces, subject to Lessor’s obligations under that certain Agreement and Notice of
Special Restriction under the Planning Code (the “Ice House Agreement”), recorded in Book B-823, at
page 325, on November 2, 1973, in the Official Records of the City and County of San Francisco.
Lessor shall use Lessor’s best efforts to fulfill Lessor’s obligations expressed in the Ice House
Agreement by making spaces available thereunder in the 101 Lombard Garage or otherwise relieve the
Building Garage from the effect of the Ice House Agreement. The Guaranteed Spaces not leased by
Lessee in the Building Garage shall be made available to Lessee at the 101 Lombard Garage.




          (c) Notwithstanding the requirement that Lessor make the Guaranteed Spaces available to
Lessee, if, at any time during the term of the Lease, Lessee elects not to lease all of the
Guaranteed Spaces, Lessor shall have the right to lease the Guaranteed Spaces not then leased by
Lessee (“Surrendered Spaces”) to another tenant of Levi’s Plaza. In such event, if Lessee
subsequently desires to lease any such Surrendered Spaces, Lessee shall deliver notice to Lessor in
writing designating the number of Surrendered Spaces desired, and the Surrendered Spaces shall be
made available to Lessee as soon as possible thereafter, provided that Lessor shall not be
obligated to



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provide more than fifty (50) Surrendered Spaces to Lessee in any six (6) month period
and the location of such Surrendered Spaces shall be subject to the restrictions with regard
to the Building Garage set forth in Paragraph 16(b) above.




     17. Right of First Offer to Purchase. Subject to the terms and conditions set forth
in this Paragraph 17, upon a Triggering Transfer (as defined in Paragraph 17(a)(v) below), Lessee
shall have a recurring right of first offer (“Purchase ROFO”) with respect to the applicable
Offered Building (as defined Paragraph 17(b) below).



          (a) As used herein, the following terms shall have the meanings ascribed thereto below:




               (i) “Occupied Building” shall mean (i) the Building or any other building within the Levi’s
Plaza which is “leased” by Lessee at the time of any Triggering Transfer; provided, however, for
purposes of this definition, a building shall be deemed “leased” by Lessee if, and only if, on the
date of any Triggering Transfer, (A) more than fifty percent (50%) of the rentable square footage
within such building is leased to Lessee, and (B) the Square Footage Threshold has not been
exceeded.



               (ii) “Permitted Lessor Transferee” shall mean each TIC Owner and all current beneficial owners
of equity interests in each TIC Owner and any of their respective ancestors, descendants, adopted
children, spouses or former spouses, trusts established by or for the benefit of such persons,
partnerships or entities or other Persons of any kind which were transferees of equity interests of
such owners or any of them, and any foundations or charitable or nonprofit organizations which were
transferees of equity interests of any such owners.



               (iii) “TIC Owner” shall mean each of BLUE JEANS EQUITIES WEST, a California general
partnership, INNSBRUCK LP, a California limited partnership, and PLAZA GB LP, a California limited
partnership, and any Permitted Lessor Transferee acquiring all or any portion of any Offered
Building.



               (iv) “Triggering Transfer” shall mean Lessor’s intended sale or other transfer of Lessor’s
direct right, title and entire interest in any individual Occupied Building, in either case to any
party other than a Permitted Lessor Transferee; provided, however, that neither (x) a sale or other
transfer of Lessor’s direct right, title or interest in the entirety of Levi’s Plaza, or (y) a sale
or other transfer of Lessor’s indirect interest through any sale or transfer of anything less than
the entirety of the beneficial interest in Lessor, shall be nor be deemed to be a Triggering
Transfer, or (z) a sale or other transfer of all or any portion of Lessor’s interest in Levi’s
Plaza (including, without limitation, all or any portion of any Occupied Building) to a Permitted
Lessor Transferee.



          (b) If at any time Lessor intends to make a Triggering Transfer (such party, herein an
“Offeror”), then the Offeror shall first offer to sell such Occupied Building (herein, the “Offered
Building”) to Lessee. Each offer to sell the Offered Building to Lessee pursuant to this Paragraph
17 shall be made initially in a written notice (“Purchase ROFO Notice”) delivered to the Lessee.
The Purchase ROFO Notice



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shall specify the purchase price and other terms (herein, the “Offer Terms”) upon which
Offeror intends to offer the Offered Building to other parties.



          (c) If Lessee elects to exercise the Purchase ROFO with respect to an Offered Building, then
within ten (10) business days following receipt of a Purchase ROFO Notice (such period, herein “the
“Offer Election Period”), Lessee shall deliver written notice (“Purchase ROFO Election Notice”) to
the Offeror. If Lessee does not respond to a Purchase ROFO Notice on or before 5:00 p.m.
California time on the last day of the Offer Election Period, then the Offeror may proceed to offer
the Offered Building for sale to other parties; provided, however, that:




               (i) the Offeror shall not be permitted to sell the Offered Building at a purchase price which
is less than ninety-five (95%) of the purchase price set forth in the Offer Terms or on other
economic terms substantially more favorable to the buyer than those offered to Lessee, unless the
Offeror has first given Lessee written notice (“Reduced Offer Notice”) of the Offeror’s intention
and provided Lessee with the opportunity to agree to purchase the subject Offered Building upon
such modified terms (herein, the “Reduced Offer Terms”) for a period of ten (10) business days
following the date of delivery of such Reduced Offer Notice (such period, herein “the “Reduced
Offer Election Period”). If Lessee accepts the Reduced Offer Terms, then Lessee shall deliver a
Purchase ROFO Election Notice to the Offeror on or before 5:00 p.m. California time on the last day
of the Reduced Offer Election Period, stating Lessee’s acceptance of the Reduced Offer Terms and
the parties shall thereafter proceed with the transfer of the subject Offered Building to Lessee in
accordance with the terms of Paragraph 17. If Lessee rejects the offer set forth in said Reduced
Offer Notice or does not respond to such Reduced Offer Notice on or before 5:00 p.m. California
time on the last day of the Reduced Offer Election Period, then the Offeror may proceed to sell the
subject Offered Building at the Reduced Offer Terms offered to Lessee pursuant to such Reduced
Offer Notice; provided, however, the Offeror shall not be permitted to sell the subject Offered
Building at a purchase price which is less than ninety-five (95%) of the purchase price set forth
in the Reduced Offer Terms or on other economic terms substantially more favorable to the buyer
than those offered to Lessee without once again providing Lessee with a Reduced Offer Notice
specifying such new lower price and revised terms and proceeding to offer the subject Offered
Building to Lessee pursuant to the preceding sentence.



               (ii) If the Offeror has not sold or otherwise transferred the Offered Building within three
hundred sixty-five (365) days from the later of (x) the day following the expiration of the Offer
Election Period, or (y) the day following the expiration of any later Reduced Offer Election
Period, then the Offeror shall not be permitted to sell the subject Offered Building without once
again providing Lessee with a Purchase ROFO Notice in the manner provided in this Paragraph 17.



          (d) Each Purchase ROFO shall be personal to Lessee and any Affiliate of Lessee who has taken
an assignment of the entire Lease, but shall not otherwise be assignable or otherwise transferable
in whole or in part, voluntarily or by operation of law, to any other assignee, subtenant or other
third party.




-59-









 








          (e) So long as Lessee continues to lease not less than two hundred fifty thousand (250,000)
rentable square feet within Levi’s Plaza, this Purchase ROFO shall be recurring and run with the
land until January 1, 2023. From and after January 1, 2023, this Purchase ROFO shall constitute a
one time right with respect to the first sale of an Offered Building which occurs on or after
January 1, 2023 and shall not survive any sale, assignment or other transfer of such Offered
Building which occurs on or after January 1, 2023; provided, however, that this Purchase ROFO shall
not apply with respect to any building which is not an Occupied Building on January 1, 2023, and
this Purchase ROFO shall expire and be of no further force or effect at any time when Lessee no
longer occupies at least two hundred fifty thousand (250,000) rentable square feet within Levi’s
Plaza.




          (f) If Lessee validly and timely elects to acquire any Offered Building pursuant to any
Purchase ROFO Notice or any Reduced Offer Notice made pursuant to this Paragraph 17, then the
closing thereon (the “Closing”) shall occur in the manner and on the terms set forth in the
respective Purchase ROFO Notice or Reduced Offer Notice, as applicable.




     18. Green Building Initiatives. If Lessee desires to seek LEED certification or
otherwise improve the sustainable operating practices at the Building, Lessor shall reasonably
cooperate with Lessee in such efforts, including, without limitation, not unreasonably withholding
consent to any Alterations made in connection with such efforts (to the extent Lessor’s consent is
required); provided, however, (i) Lessor makes not guarantees or warranties to Lessee with respect
to Lessee’s ability to obtain any such LEED Certification, (ii) any such efforts shall be conducted
at Lessee’s sole cost and expense (including, the cost and expense of completing any such
Alterations), (iii) in conducting any such Alterations, Lessee shall not interfere with or disrupt
the operations of Lessor or any other tenant of Levi’s Plaza, and (iv) Lessee shall reimburse
Lessor for the actual third party out-of-pocket costs and expenses reasonably incurred by Lessor as
a result of making such cooperative efforts.



     19. Brokerage.



          (a) Lessor shall pay Lessee’s broker, Jones Lang LaSalle (“JLL”), a commission of One Million
Seven Hundred Seventy-Three Thousand Nine Hundred Eighty-Five Dollars ($1,773,985.00) (i.e. $5.00
per rentable square foot of the Premises) (“JLL’s Commission Amount”) upon execution of this Second
Amendment and shall pay The CAC Group (“CAC”) all commissions due CAC in connection with the Lease
(“CAC’s Commission”), pursuant to a separate agreement between Lessor and CAC.




          (b) Lessor warrants and represents to Lessee that in the negotiating or making of the Lease
neither Lessor nor anyone acting on Lessor’s behalf has dealt with any broker or finder who might
be entitled to a fee or commission for the Lease other than JLL and CAC. Lessor shall indemnify
and hold Lessee harmless from (i) any claim or claims, including costs, expenses and attorney’s
fees incurred by Lessee, asserted by JLL with respect to JLL’s Commission Amount, (ii) any claim or
claims, including costs, expenses and attorney’s fees incurred by Lessee, asserted by CAC with
respect to CAC’s




-60-









 







Commission, or (iii) any claim or claims, including costs, expenses and attorney’s fees
incurred by Lessee, asserted by any other broker or finder for a fee or commission based upon any
dealings with or statements made by Lessor or its representatives.




          (c) Lessee warrants and represents to Lessor that in the negotiating or making of the Lease
neither Lessee nor anyone acting on Lessee’s behalf has dealt with any broker or finder who might
be entitled to a fee or commission for the Lease other than JLL and CAC. Lessee shall indemnify
and hold Lessor harmless from (i) any claim or claims, including costs, expenses and attorney’s
fees incurred by Lessor, asserted by JLL with respect to any fee or commission in excess of JLL’s
Commission Amount, and (ii) any claim or claims, including costs, expenses and attorney’s fees
incurred by Lessor asserted by any other broker or finder for a fee or commission based upon any
dealings with or statements made by Lessee or its representatives.




     20. Entire Agreement. There are no oral agreements among the parties hereto affecting
this Second Amendment, this Second Amendment contains all of the terms, covenants, conditions,
representations, warranties and agreements of the parties relating in any manner to the subject
matter hereof, and this Second Amendment supersedes and cancels any and all previous negotiations,
arrangements, representations, warranties, agreements and understandings, if any, among the parties
hereto relating in any manner to the subject matter hereof.



     21. Governing Laws. This Second Amendment and the Lease shall be construed and
enforced in accordance with the laws of the State of California.



     22. Effectiveness. Except as expressly modified herein, the terms, covenants and
conditions of the Lease are unmodified and, as modified herein, are in full force and effect.



     23. Conflict of Terms. In the event of any conflict between the Lease and this Second
Amendment, the terms and conditions of this Second Amendment shall prevail.



     24. Miscellaneous. Time is of the essence hereof. Neither this Second Amendment nor
the Lease may be amended, nor any provision hereof waived, except in writing. This Second
Amendment shall inure to the benefit of and shall be binding upon each of the parties hereto, and
their respective permitted successors in interest and assigns (which for Lessee’s purposes shall be
subject to the provisions of Article 11 of the Lease and Paragraph 12 of this Second Amendment).



     25. Interpretation. Unless the context clearly requires otherwise, (i) the plural and
singular numbers shall each be deemed to include the other; (ii) the masculine, feminine, and
neuter genders shall each be deemed to include the others; (iii) “shall,” “will,” or “agrees” are
mandatory, and “may” is permissive; (iv) “or” is not exclusive; (v) “includes” and “including” are
not limiting; and (vi) “days” means calendar days unless specifically provided otherwise.



     26. Recordation. Lessor shall record a memorandum of this Second Amendment, which
shall be in the form attached hereto as Exhibit C.



-61-









 





     27. Counterparts. This Second Amendment may be executed in any number of original
counterparts. Any such counterpart, when executed, shall constitute an original of this Second
Amendment, and all such counterparts together shall constitute one and the same Second Amendment.



The remainder of this page is intentionally blank.




-62-









 








     IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of the date first above
written.



	 	 	 	 	 
	LESSOR:              	BLUE JEANS EQUITIES WEST,

a California general partnership

 	 
	 	By:  	Plaza B, LLC, 
a Delaware limited liability company
 	 
	 	 	Its:  	General Partner 	 
	 	 	 	 
	 
	 	By:  	                   The Gerson Bakar 1984 Trust
 	 
	 	 	Its:  	Member 	 
	 	 	 	 
	 
	 	By:  	                                           /s/ Gerson Bakar
 	 
	 	 	Gerson Bakar, Trustee 	 
	 	 	 	 
	 
	 	INNSBRUCK LP,

a California limited partnership

 	 
	 	By:  	G. Bakar Properties, Inc.,
 a California corporation
 	 
	 	 	Its:  	General Partner 	 
	 	 	 	 
	 
	 	By:  	                            /s/ Stephen LoPresti
 	 
	 	 	Stephen LoPresti, its Secretary 	 
	 	 	 	 
	 
	 	PLAZA GB LP,


a California limited partnership

 	 
	 	By:  	G. Bakar Properties, Inc.,
 a California corporation
 	 
	 	 	Its:  	General Partner 	 
	 	 	 	 
	 
	 	By:  	                                     /s/ Stephen LoPresti
 	 
	 	 	Stephen LoPresti, its Secretary 	 
	 	 	 	 
	 
	LESSEE:              	LEVI STRAUSS & CO.,

a Delaware corporation

 	 
	 	By:  	/s/ Blake Jorgensen
 	 
	 	 	Name:  	Blake Jorgensen 	 
	 	 	Its:  	Chief Financial Officer 	 



-63-











 





SCHEDULE 7(c)




SUPERIOR LEASES, SUPERIOR RIGHTS

AND

SUPERIOR RIGHTS HOLDERS



1. Quality Institute International: option to extend for five years from April 1, 2013 for a
portion (9,160 square feet) on the ground floor of the Haas Building;



2. Sotheby’s International Realty: option to extend for eight years from January 1, 2013 for a
portion of the ground floor (9,717 square feet).





 









 








EXHIBIT A




ADDENDUM REGARDING OPERATING EXPENSES

AND REAL ESTATE TAXES

(Levi Strauss Building)




1. Purpose of Addendum.




     Lessor and Lessee acknowledge that, from and after January 1, 2013, Lessee’s Percentage of
Operating Expenses and Lessee’s Percentage of Adjusted Taxes for the Building shall be calculated
in accordance with the provisions of this Addendum Regarding Operating Expenses and Real Estate
Taxes (Levi Strauss Building) (“Addendum”). This Addendum is to be attached to the Lease for the
purpose of identifying those items that are to be included in, as well as excluded from, Operating
Expenses and Adjusted Taxes for the Building, as well as describing Lessee’s right to audit
Operating Expenses and Adjusted Taxes for the Building. To the extent there is any inconsistency
between any other provisions of the Lease and this Addendum, the provisions of this Addendum shall
prevail. Any capitalized terms used in this Addendum and not otherwise defined herein shall have
the same meanings as set forth in the Original Lease or in the Second Amendment to which this
Addendum is attached.



2. Operating Expenses Inclusions.




     Subject to the provisions of Paragraph 4 of this Addendum, below, as used in the Lease and
this Addendum “Operating Expenses” shall mean and include the total costs and expenses paid or
incurred by Lessor in connection with the following:



          (a) when measured with respect to the Building: (i) the cost incurred by Lessor for all insurance
carried on the Building or in connection with the use or occupancy thereof, including, without
limitation, the premiums and cost of fire, casualty, liability, rental abatement and, subject to
Paragraph 2(c) below, earthquake insurance applicable to the Building and Lessor’s personal
property used in connection therewith (and all amounts paid as a result of loss sustained that
would be covered by such policies but for any “deductible” provisions, provided, however, that (x)
the amount of any deductible provisions in Lessor’s insurance policies shall not materially exceed
the deductible amounts customarily prevailing in the comparable insurance policies carried by the
owners of the Comparable Maintenance Standards Buildings (as defined in the Second Amendment to
which this Addendum is attached), and (y) any loss amounts required to be paid by Lessor as a
result of any deductible amounts applicable to earthquake insurance coverage carried by Lessor
shall not be included as an Operating Expense, nor shall Operating Expenses include any loss
amounts required to be paid by Lessor as a result of Lessor’s self insuring against earthquake
risks); (ii) accounting and legal expenses; (iii) with the exception of the costs of the Base
Building Work which




Exhibit A - Page 1




 









 







shall not be included herein, the cost of any capital improvements made to the Property after the
Effective Date that (x) are designed to reduce Operating Expenses or improve operating
efficiencies, to the extent of actual savings realized, or (y) are reasonably required for the
health and safety of tenants or the public (excluding structural improvements to the Property,
including, without limitation, seismic retrofits and remediation of contamination or other injury
to the Property caused by Hazardous Materials (as defined in the First Amendment)), or (z) are
required under any governmental law or regulation that was not applicable to the Property prior to
the December 31, 2009, such cost to be amortized over such period as is substantially consistent
with the amortization period then being utilized by the owners of the Comparable Maintenance
Standards Buildings, together with interest on the unamortized balance thereof at the Prime Rate
plus three percent (3%) or, if Lessor has financed the construction of such improvements, at such
rate as may actually and reasonably have been paid by Lessor on funds borrowed for the purpose of
constructing such capital improvements; (iv) garbage and recycling collection services for the
Building, (v) the Building Management Fee, and (vi) the Administrative Cost Allocation. As used
herein, the term “Building Management Fee” shall mean an amount equal to One Hundred Seventy Seven
Thousand Three Hundred Ninety Eight And 50/100ths Dollars ($177,398.50) during the 2013 Lease Year
for Operating Expenses, which amount shall be annually increased by three percent (3%) per annum
commencing on January 1, 2014 and continuing on the first day of each Lease Year for Operating
Expenses occurring under the term thereafter. As used herein, the term “Administrative Cost
Allocation” shall mean an amount equal to the lesser of (AA) forty-one and one hundred nine
thousandths percent (41.109%) of the difference of (x) the amount of Lessor’s Administrative Costs
(as defined hereinafter) minus (y) the amount of Lessor’s Administrative Costs Allocable to the
Exterior Common Areas (as defined hereinafter), or (BB) the Administrative Costs Cap. “Lessor’s
Administrative Costs” shall mean the aggregate amount incurred by Lessor in a Lease Year for
Operating Expenses with respect to the following categories of administrative costs and expenses:
(I) wages, salaries, payroll taxes and other labor costs and employee benefits; (II) depreciation
of office furniture and office equipment owned and used by Lessor in the operation of Levi’s Plaza;
(III) the commercially reasonable rental paid for reasonable office space for the property manager
and related management and operations personnel responsible for the management of Levi’s Plaza, or
if rental is not paid, the fair rental value of any such space provided for such purposes,
including, in each case, the utilities expenses associated therewith, and (IV) office supplies,
postage, courier costs, reproduction costs and other customary supply costs associated with the
operation of a property management office. “Lessor’s Administrative Costs Allocable to the
Exterior Common Areas” shall mean the portion of Lessor’s Administrative Costs that have been
allocated to the Exterior Common Areas in Lessor’s annual audit of the Operating Expenses
applicable to the Levi’s Plaza. “Administrative Costs Cap” shall mean fifty seven percent (57%)
multiplied by the actual amount of Lessor’s Administrative Costs allocated to the Building with
respect to the Lease Year for Operating Expenses 2012, which amount shall be annually increased by
three percent (3%) per annum commencing on January 1, 2013, and continuing on the first day of each
Lease Year for Operating Expenses occurring under the term thereafter.




Exhibit A - Page 2




 









 








          (b) when measured with respect to the Exterior Common Areas, the management, operation,
maintenance and repair of the Exterior Common Areas, including, without limitation: (i) the cost of
electricity, water, mechanical, plumbing, telephone and irrigation systems, exterior security
controls and all other utilities provided to the Exterior Common Areas; (ii) the cost of repairs to
the Exterior Common Areas (including, without limitation, walkways, sidewalks, parkways, stairways,
landscaped areas and storm water facilities) and all labor and material costs related thereto, and
the cost of general maintenance, cleaning and service contracts with respect to the Exterior Common
Areas and the cost of all supplies, tools and equipment required in connection therewith; (iii) the
cost incurred by Lessor for all insurance carried on the Exterior
Common Areas or in connection with the use or occupancy thereof, including, without
limitation, the premiums and cost of fire, casualty, liability, and, subject to Paragraph 2(c)
below, earthquake insurance maintained with respect to the Exterior Common Areas and Lessor’s
personal property used in connection therewith (and all amounts paid as a result of loss sustained
that would be covered by such policies but for any “deductible” provisions, provided, however, that
(A) the amount of any deductible provisions in Lessor’s insurance policies shall not materially
exceed the deductible amounts customarily prevailing in the comparable insurance policies carried
by the owners of the Comparable Maintenance Standards Buildings (as defined in the Second Amendment
to which this Addendum is attached), and (B) any loss amounts required to be paid by Lessor as a
result of any deductible amounts applicable to earthquake insurance coverage carried by Lessor
shall not be included as an Operating Expense, nor shall Operating Expenses include any loss
amounts required to be paid by Lessor as a result of Lessor’s self insuring against earthquake
risks); (iv) the cost of any capital improvements made to the Exterior Common Areas after the
Effective Date that (X) are designed to reduce Operating Expenses or improve operating
efficiencies, to the extent of actual savings realized, or (Y) are reasonably required for the
health and safety of tenants or the public (excluding structural improvements to the Exterior
Common Areas, including, without limitation, seismic retrofits and remediation of contamination or
other injury to the Exterior Common Areas caused by Hazardous Materials (as defined in the First
Amendment)), or (Z) are required under any governmental law or regulation that was not applicable
to the Exterior Common Areas prior to December 31, 2009, such cost to be amortized over such period
as is substantially consistent with the amortization period then being utilized by the owners of
the Comparable Buildings, together with interest on the unamortized balance thereof at the Prime
Rate plus three percent (3%) or, if Lessor has financed the construction of such improvements, at
such rate as may actually and reasonably have been paid by Lessor on funds borrowed for the purpose
of constructing such capital improvements; (v) the reasonable cost of contesting the validity or
applicability of any governmental enactments which may affect Operating Expenses for the Exterior
Common Areas; (vi) garbage and recycling collection services for the Exterior Common Areas; (vii)
the Lessor’s Administrative Costs Allocable to the Exterior Common Areas; and (viii) Taxes
Allocable to the Exterior Common Areas. Lessor shall manage the maintenance and repair of the
Exterior Common Areas in a manner consistent with standards customarily maintained by the owners of
the Comparable Maintenance Standards Buildings, including, without limitation, instituting
competitive bidding practices, if any, with respect to contractors and vendors which are




Exhibit A - Page 3




 









 







customarily adhered to by the owners of the Comparable Maintenance Standards Buildings in
connection with maintenance and repair of the Comparable Maintenance Standards Buildings.




          (c) If Lessor does not carry earthquake insurance as of the date of the Second Amendment to
which this Addendum is attached but thereafter elects to carry earthquake insurance, the entire
cost of the earthquake insurance premium may be
included as an Operating Expense after such premium cost has been phased in as an Operating
Expense over the lesser of (i) a five (5) year period, or (ii) the then remaining balance of the
term of the Lease. For example, if the earthquake insurance premium is phased in over a five (5)
year period, for each year during such phase-in period, Lessee shall pay Lessee’s Percentage of
20%, 40%, 60%, 80% and 100%, respectively, of the earthquake insurance premium for that year, and
thereafter, Lessee shall pay Lessee’s Percentage of the full earthquake insurance premium each
Lease Year for Operating Expenses as an Operating Expense. During the Option Term in which Lessor
initially elects to carry earthquake insurance, Lessee shall be separately billed by Lessor for
Lessee’s Percentage of the cost of the earthquake premium (either the phased-in cost or entire
cost, as applicable).




          (d) As used in the Lease, the term “Lease Year for Operating Expenses” shall mean the 12-month
period from January 1, 2013 through December 31, 2013, and each successive 12-month period from
January 1 to December 31 during the term of the Lease.




3. Proration.




     Operating Expenses that cover a period of time not within the term (including any extended
term) of the Lease shall be prorated on the basis of a 365-day year and the actual number of days
in any applicable month.



4. Operating Expenses Exclusions.




     Notwithstanding anything to the contrary allowed by the Lease or Paragraph 2 of this Addendum,
none of the following items shall be included in Operating Expenses or Taxes:



          (a) So long as Lessee is responsible for paying, at its sole cost and expense, for all
utilities (including, without limitation, electricity, gas, water, sewer and scavenger services)
and janitorial services, as provided in Paragraph 3(b) of the Second Amendment to which this
Addendum is attached, any fees, charges or costs of utilities and janitorial services furnished to
the Building shall be excluded from Operating Expenses (provided, however, that Lessor shall be
responsible for arranging for garbage and recycling collection services for the Building and the
Exterior Common Areas and the costs thereof shall be included as an Operating Expense);




          (b) All costs associated with the operation of the business or the ownership entity which
constitutes Lessor, as distinguished from the costs of Building or Exterior Common Area operations,
including, without limitation, costs of accounting and




Exhibit A - Page 4



 










 






legal matters relating solely to Lessor’s partnership entity, costs of any lawsuits with any
mortgagee, costs of selling, reorganizing, transferring, syndicating, financing, mortgaging, or
hypothecating any of Lessor’s interest in any portion of the
Property or common areas, costs of any disputes between Lessor and its employees, costs of
disputes of Lessor with building management, or costs paid or incurred in connection with disputes
with any tenants (including Lessee, provided that the recovery of costs arising from disputes
between Lessor and Lessee shall be governed by Article 23 of the Lease);




          (c) All costs (including permit, license and inspection fees and the cost incurred to obtain
or renew a certificate of occupancy for the relevant premises) incurred in designing, renovating or
otherwise improving or decorating, painting or redecorating space for tenants or other occupants or
in renovating or redecorating vacant space, including the costs of the Base Building Work (as
defined in the Second Amendment to which this Addendum is attached) or other alterations or
improvements to Lessee’s Premises or to the premises of any other tenant or occupant of Levi’s
Plaza;




          (d) Any cash or other consideration paid by Lessor on account of, with respect to, or in lieu
of, the tenant improvement work or alterations described in clause (c) above;




          (e) Except for capital repairs costs or the costs of capital improvements or replacements
which are permitted to be included within Operating Expenses pursuant to the terms of Paragraphs
2(a)(iii) or 2(b)(iv) of this Addendum, above, the costs incurred by Lessor for repairs,
replacements, alterations or additions which are considered capital repairs, improvements or
replacements under generally accepted accounting principles that are consistent with industry
standards and sound management practices;




          (f) Any reserves for equipment or capital replacement;




          (g) Costs in connection with services or other benefits which are provided exclusively to
another tenant or occupant and not to Lessee and which do not benefit Lessee;




          (h) Costs for all items and services for which Lessee or other tenants or occupants reimburse
Lessor or reimburse or pay third parties or which Lessor provides selectively to one or more
tenants or occupants of the Building (other than Lessee) without reimbursement;




          (i) Depreciation and amortization (except to the extent specifically provided in Paragraphs
2(a)( iii) or 2(b)(iv) of this Addendum, above);




          (j) Costs incurred due to violation by Lessor or its managing agent or any tenant of the Building
of the terms and conditions of any lease or of any law, code, regulation, ordinance, or covenant;
provided, however, that nothing contained in this Paragraph 4(j) is intended to, nor shall it be
constructed to, preclude the inclusion in Operating Expenses of the costs set forth in Paragraphs
2(a)(iii) or 2(b)(iv) of this Addendum, above;




Exhibit A - Page 5




 









 








          (k) Payments in respect to overhead or profits to subsidiaries or affiliates of Lessor, or to
any party affiliated with Lessor, for management or other services in or to the Building or the
Exterior Common Areas, or for supplies or other materials, to the extent that the cost of such
services, supplies, or materials exceeds the fair market cost that would be charged by
non-affiliated third parties dealing with Lessor on an arms-length basis; provided, however, that
nothing contained in this Paragraph 4(k) shall limit the Building Management Fee included within
Operating Expenses pursuant to Paragraph 2(a) of this Addendum, above;




          (l) Interest, principal, points and fees on debt or amortization payments and any other costs,
payments or expenses in connection with financing the Property, including any mortgages or deeds of
trust encumbering the Property or the Premises;




          (m) Lessor’s or Lessor’s managing agent’s general corporate overhead and general
administrative expenses, and wages, salaries and other compensation paid to any employee of Lessor
or its managing agent to the extent such wages, salaries and other compensation are not allocable
to time spent by the relevant employee providing on-site services at the Property;




          (n) Any cost or expense (including, but not limited to, costs and expenses associated with
defense, administration, settlement, monitoring or management) related to the presence, removal,
cleanup, abatement or remediation of Hazardous Materials in, on, under or about the Premises,
Building, Property or Levi’s Plaza, including, without limitation, Hazardous Materials in the
groundwater or soil; provided, however, that nothing contained in this Paragraph 4(n) is intended
to, nor shall it be construed to, negate or otherwise limit or modify either Lessor’s or Lessee’s
obligations under Paragraph 9 of the First Amendment;




          (o) Any compensation paid to clerks, attendants, concierges or other persons working in or
managing commercial concessions operated by Lessor or Lessor’s managing agent;




          (p) Rental payments and any other related costs incurred in leasing air conditioning systems,
elevators or other equipment ordinarily considered to be of a capital nature, except to the extent
such systems, elevators or other equipment, if purchased, would qualify as capital improvements
that can be included within Operating Expenses pursuant to Paragraphs 2(a)(iii) or 2(b)(iv) of this
Addendum, above, and except for equipment which is used for making repairs or for keeping permanent
systems in operation while repairs are being made;




          (q) Advertising and promotional costs (except for costs related to the advertising and
promotion of the Summer Park Program);




          (r) Costs incurred in owning, operating, maintaining and repairing any underground or above ground
parking garage or other parking facilities associated with the Building and common areas,
including, but not limited to, any expenses for parking




Exhibit A - Page 6




 









 







equipment, tickets, supplies, signs, cleaning, resurfacing, restriping, business taxes,
management fees and costs, structural maintenance, utilities, insurance of any form, Taxes to the
extent the same may be separately allocated to such parking facilities, and the wages, salaries,
employee benefits and taxes for personnel working solely in connection with any such parking
facilities;




          (s) The cost of repairs or other work incurred by reason of fire, windstorm or other casualty
or by the exercise of the right of eminent domain, to the extent such cost is actually covered and
paid for by insurance carried by Lessor or by any tenant or other party or is paid for out of
proceeds paid in connection with any eminent domain proceeding;




          (t) Leasing commissions, finder’s fees, attorney fees, costs and disbursements and other
expenses incurred in connection with marketing, proposals, leasing, space planning, negotiations or
disputes with tenants or other occupants or prospective tenants or other occupants, or associated
with the enforcement of any leases or the defense of Lessor’s title to or interest in the Property
or any part thereof or the common areas or any part thereof;




          (u) “Takeover” expenses, including, without limitation, the expenses incurred by Lessor with
respect to space located in another building of any kind or nature in connection with the leasing
of space in the Building;




          (v) Any Taxes payable by Lessee or any other tenant or occupant of space within the Property
pursuant to the applicable provisions in their respective leases;




          (w) Any Taxes allocable to the tenant improvements of Lessee or other tenants or occupants of
space within the Building which are over and above the Lessor’s standard tenant improvement
allowance and which taxes are the responsibility of Lessee or such other tenants or occupants
pursuant to the applicable provisions in their respective leases;




          (x) Any costs associated with obtaining a warranty, and all costs of repair or replacement of
any item covered by an unexpired warranty;




          (y) Any costs, expenses, fines, penalties or interest resulting from the negligence or willful
misconduct of Lessor or its agents, contractors, or employees or any other tenant or occupant of
the Building or of Levi’s Plaza;




          (z) Rental payments and any other related costs pursuant to any ground lease of land underlying all
or any portion of the Property and common areas (except for payments made pursuant to (i) that
certain license, easement or right-to-use granted by the City and County of San Francisco in
connection with the extension of Filbert Street through the Property, and (ii) that certain lease
with the Port of San Francisco for Seawall Lots 319 and 320 (which comprise a portion of the
current park at the corner of Front Street and The Embarcadero), as previously disclosed to Lessee
by Lessor);




Exhibit A - Page 7




 









 








          (aa) Political or charitable contributions;




          (bb) Any bad debt loss, rent loss, or reserves for bad debt or rent loss;




          (cc) Any costs incurred in connection with any leasable space within the Building that is used
for a retail or restaurant operation (other than any retail or restaurant space which is under the
control of Lessee);




          (dd) Expenses for sculptures, paintings, or other objects of art, except to the extent that
such objects are required by a governmental or other regulatory body having jurisdiction over the
Property;




          (ee) Costs and expenses incurred as a result of latent defects in the design or construction
of the Base Building Work installed by Lessor either discovered by Lessor or asserted by Lessee by
written notice delivered to Lessor within five (5) years after the Effective Date; and




          (ff) Without limiting Lessor’s right to recover any of Lessor’s Administrative Costs, any
management fee other than the Building Management Fee.




5. Real Estate Taxes 




     As used in the Lease and this Addendum, the term “Taxes” shall mean the following:



          (a) when measured with respect to the Building, all ad valorem real property taxes, assessments and
charges levied upon or with respect to the Property or any personal property located on the
Property and used in the operation thereof or upon or with respect to any ownership or possessory
interest in the Property or such personal property. When measured with respect to the Building,
Taxes shall include, without limitation, all general real property taxes and general and special
assessments, charges, fees, or assessments for transit, housing, police, fire, or other
governmental services or purported benefits to the Property or the occupants thereof, service
payments in lieu of taxes, business taxes, and any tax, fee, or excise on the use or occupancy of
the Property or any part thereof, or on the rent payable under any lease or in connection with the
business of renting space within the Property, that are now or hereafter levied or assessed against
Lessor by the United States of America, the State of California or any political subdivision
thereof, public corporation, district, or any other political or public entity, and shall also
include any other tax, fee or other excise, however described, that may be levied or assessed as a
substitute for, or as an addition to, in whole or in part, any other Taxes, whether or not now
customary or in the contemplation of the parties on the Effective Date and shall also include
reasonable legal fees, costs, and disbursements incurred in connection with proceedings to contest,
determine, or reduce such Taxes, reasonably undertaken by Lessor with the expectation that, if
successful, such proceedings would result in a reduction of Taxes. When measured with respect to
the Building, Taxes shall not include (i) franchise, transfer, inheritance, or capital stock taxes
or income taxes measured by the net income of Lessor from all sources unless, due to a change in
the method of taxation, any of such taxes is levied or assessed against Lessor as




Exhibit A - Page 8




 









 







a substitute for, or as an addition to, in whole or in part, any other tax that would
otherwise be included within Taxes, (ii) penalties incurred as a result of Lessor’s negligence,
inability or unwillingness to make payments of, or to file any tax or
information returns with respect to, any Taxes, when due, (iii) items included as Operating
Expenses, and (iv) any Taxes directly payable by Lessee or any other tenant within Levi’s Plaza
under the applicable provisions in their respective leases, and (iv) Taxes to the extent such Taxes
may be separately allocated to any underground or above ground parking garage or other parking
facilities associated with the Building and common areas or to the extent such Taxes are levied on
revenues from such parking facilities.




          (b) when measured with respect to the Exterior Common Areas, all ad valorem real property
taxes, assessments and charges levied upon or with respect to the Exterior Common Areas or any
personal property located on the Exterior Common Areas and used in the operation thereof or upon or
with respect to any ownership or possessory interest in the Exterior Common Areas or such personal
property. When measured with respect to the Exterior Common Areas, Taxes shall include, without
limitation, all general real property taxes and general and special assessments, charges, fees, or
assessments for transit, housing, police, fire, or other governmental services or purported
benefits to the Exterior Common Areas, service payments in lieu of taxes, business taxes, and any
tax, fee, or excise on the use or occupancy of the Exterior Common Areas or any part thereof, that
are now or hereafter levied or assessed against Lessor by the United States of America, the State
of California or any political subdivision thereof, public corporation, district, or any other
political or public entity, and shall also include any other tax, fee or other excise, however
described, that may be levied or assessed as a substitute for, or as an addition to, in whole or in
part, any other Taxes, whether or not now customary or in the contemplation of the parties on the
Effective Date and shall also include reasonable legal fees, costs, and disbursements incurred in
connection with proceedings to contest, determine, or reduce such Taxes, reasonably undertaken by
Lessor with the expectation that, if successful, such proceedings would result in a reduction of
Taxes. When measured with respect to the Exterior Common Areas, Taxes shall not include (i)
franchise, transfer, inheritance, or capital stock taxes or income taxes measured by the net income
of Lessor from all sources unless, due to a change in the method of taxation, any of such taxes is
levied or assessed against Lessor as a substitute for, or as an addition to, in whole or in part,
any other tax that would otherwise be included within Taxes, (ii) penalties incurred as a result of
Lessor’s negligence, inability or unwillingness to make payments of, or to file any tax or
information returns with respect to, any Taxes, when due, (iii) any Taxes directly payable by
Lessee or any other tenant within Levi’s Plaza under the applicable provisions in their respective
leases, and (iv) Taxes to the extent such Taxes may be separately allocated to any underground or
above ground parking garage or other parking facilities associated with the Building and common
areas or to the extent such Taxes are levied on revenues from such parking facilities.




     As used in the Lease, the term “Tax Year” shall mean a fiscal year commencing July 1, and
ending June 30, of each year in which occurs any part of the term of the Lease; provided, however,
that for the Tax Year ending on June 30, 2013, Lessee shall



Exhibit A - Page 9




 









 







pay a prorated share equal to Lessee’s Percentage of one half of the Adjusted Taxes for the
Building with respect to such Tax Year as part of the Adjusted Taxes for the Building payable by
Lessee during the Second Extended Term (with the other one half of the Taxes with respect to the
Tax Year being paid in connection with Lessee’s Percentage of Adjusted Taxes for the Building
pursuant to the provisions of the Lease in effect with respect to the Option Term preceding the
Second Extended Term); provided, further, however, that Lessee shall not be obligated to pay any
Taxes for any period that falls outside the term of the Lease.




6. Operating Expenses Occupancy Adjustment 




     If Lessee, at any time, is not the lessee of one hundred percent (100%) of the Building and
Lessee’s Percentage of Operating Expenses for the Building is less than one hundred percent (100%),
then the Operating Expense provisions within the Lease (including, without limitation, Lessee’s
obligation for payment of Lessee’s Percentage of Operating Expenses with respect to the Building
and the definitions of Operating Expenses and Taxes and the exclusions therefrom shall revert to
the definitions and exclusions set forth in Exhibit A to the MOU) and the parties
respective maintenance and repair obligations under Paragraph 11 of the Second Amendment shall be
adjusted to reflect the fact that Lessor will once again assume control over operation of the
Building. In such event, Lessor shall manage the maintenance and repair of the Building in a
manner consistent with standards customarily maintained by the owners of the Comparable Maintenance
Standards Buildings, including, without limitation, instituting competitive bidding practices, if
any, with respect to contractors and vendors which are customarily adhered to by the owners of the
Comparable Maintenance Standards Buildings in connection with maintenance and repair of the
Comparable Maintenance Standards Buildings. Further, in such event, Lessor and Lessee acknowledge
that if in any Lease Year for Operating Expense thereafter the Building is not one hundred percent
(100%) occupied during all or any portion of such Lease Year for Operating Expenses, then Lessor
shall make an appropriate adjustment, in accordance with industry standards and sound management
practices, of the Operating Expenses for each such Lease Year for Operating Expenses to determine
what the Operating Expenses with respect to the Building would have been for such year if the
Building had been one hundred percent (100%) occupied, and the amount so determined shall be deemed
to be the amount of Operating Expenses measured with respect to the Building for such Lease Year
for Operating Expenses. Such adjustment shall be made by Lessor by increasing those costs included
in the Operating Expenses measured with respect to the Building which, according to industry
standards and sound management practices, vary based upon the level of occupancy of the Building.
In order to avoid any conflict between the provisions of this Addendum and the Lease, Lessor and
Lessee hereby acknowledge that Paragraph 5.4.11 of the Lease has been deleted, as provided in item
(iii) of Paragraph 10 of the Second Amendment.



7. Lessee’s Right to Audit 




          (a) Within one hundred fifty (150) days following the expiration of each Lease Year for Operating
Expenses, Lessor shall provide to Lessee the Expense




Exhibit A - Page 10




 









 







Statement required pursuant to Paragraph 10(e) of the Second Amendment to which this Addendum is
attached, which Expense Statement shall set forth, in reasonable detail, the calculations performed
to determine the Taxes for the Exterior Common Areas and the Operating Expenses for the Building
and the Exterior Common Areas for the Lease Year for Operating Expenses to which such Expense
Statement applies, measured in accordance with the applicable provisions of the Second Amendment to
which this Addendum is attached and this Addendum. Lessor shall show by account the total
Operating Expenses for the Building and the Exterior Common Areas, the Taxes for the Exterior
Common Areas and all adjustments corresponding to the requirements set forth in the Lease, the
Second Amendment to which this Addendum is attached, and this Addendum. Lessor shall also provide
in reasonable detail the calculation of Lessee’s Percentage of the Operating Expenses for the
Building and the Exterior Common Areas and Lessee’s Percentage of the Taxes for the Exterior Common
areas with respect to the period covered by such Expense Statement, as said calculations are
specified in the applicable provisions of the Second Amendment to which this Addendum is attached
and this Addendum. Lessor shall also provide for such Lease Year for Operating Expenses the
average occupancy for the Building if the Building is not fully leased by Lessee.




          (b) Lessee shall have the right, at its own cost and expense (as provided in Paragraph 7(c) of
this Addendum, below), to audit or inspect Lessor’s records with respect to Operating Expenses and
Taxes for (i) the Lease Year for Operating Expenses relating to the then current Expense Statement
delivered to Lessee by Lessor pursuant to the terms and conditions of Paragraph 10(e) of the Second
Amendment to which this Addendum is attached (as referenced in Paragraph 7(a) of this Addendum,
above) (such Lease Year for Operating Expenses, herein the “Current Statement Year”), and (ii) the
two (2) Lease Years for Operating Expenses of the Lease term immediately preceding the Current
Statement Year (the Lease Years for Operating Expenses described in the foregoing clauses (i) and
(ii) are hereinafter referred to collectively as “Audit Years” and individually as an “Audit
Year”), which right may be exercised by Lessee, as provided below, with respect to an individual
Audit Year or to multiple Audit Years; provided, however, in the event that Lessee conducts an
audit or inspection of a particular Audit Year or Audit Years pursuant to its audit rights
hereunder, Lessee shall have no further right to reexamine Lessor’s books and records or to conduct
a subsequent audit or to contest the amount of Operating Expenses or Taxes with respect to such
Audit Year or Audit Years. Lessor shall be obligated to keep such records for the relevant Audit
Year or Audit Years for two (2) years after the expiration of such audit (or the expiration of
Lessee’s right to audit, as the case may be). In the event that Lessee desires to exercise its
audit rights as set forth herein, Lessee must (x) deliver written notice (an “Audit Notice”) to
Lessor exercising such rights on or before the date that is one hundred eighty (180) days after the
date (the “Statement Delivery Date”) on which Lessee receives an Expense Statement from Lessor, and
(y) subject to delays to the extent resulting from Lessor’s scheduling requests, complete such
audit and deliver written notice (a “Contest Notice”) to Lessor, describing in detail any contested
amounts, within one (1) year after the Statement Delivery Date. In the event that Lessee
fails to timely deliver an Audit Notice or Contest Notice for any Lease Year for Operating
Expenses as provided in the immediately preceding sentence, Lessee shall be prohibited from
conducting an audit or contesting the amount of Operating




Exhibit A - Page 11




 









 







Expenses or Taxes for any Audit Year or
Audit Years and the Expense Statement for the Current Statement Year shall be binding upon Lessee
until such time as Lessee has a subsequent right of audit following the next Statement Delivery
Date (but shall be conclusively binding as to any Lease Year for Operating Expenses as to which
Lessee’s right of audit has expired). In no event whatsoever shall Lessee have the right to audit
Lessor’s books and records with respect to any Audit Year or Audit Years except as specifically set
forth in this Paragraph 7. Lessor shall cooperate with Lessee during the course of such audit,
which shall be conducted during normal business hours in Lessor’s building management office.
Lessor agrees to make such personnel available to Lessee as is reasonably necessary for Lessee’s
employees and agents to conduct such audit, but in no event shall such audit last more than fifteen
(15) business days in duration. Lessee, and Lessee’s employees and agents, shall be entitled to
make photostatic copies of such records, provided Lessee bears the expense of such copying, and
further provided that Lessee keeps such copies in a confidential manner as may be provided in the
Lease and does not show or distribute such copies to any third party, and provided that in no event
shall Lessee have the right to remove such books and records from the Lessor’s management office.
Notwithstanding the foregoing, Lessee, in conducting such audit, agrees to accommodate reasonable
scheduling requests of Lessor. In conducting such audit, Lessee shall act diligently to minimize
the disruption to Lessor’s business operations. Any audit conducted by Lessee pursuant to this
Addendum shall be conducted by either (A) a reputable and duly licensed certified public accounting
firm approved by Lessor, which approval shall not be unreasonably withheld or delayed, or (B) a
so-called “Big Four” Certified Public Accounting firm or, if such designation is discontinued or no
longer applicable, by a similar nationally recognized, licensed Certified Public Accounting firm,
and retained by Lessee on either a fixed fee or “time and materials” basis, and under no
circumstances shall Lessee either engage any firm to conduct such audit whose compensation is
determined, in whole or in part, by the amount of the recovery, if any, received by Lessee as a
result of such audit or assign to any firm or other third person any portion of such recovery, if
any. In the event any audit conducted pursuant hereto cannot be completed prior to the date on
which any payments are required to be made pursuant to the Expense Statement, Lessee shall make
such payments pending any adjustment, if any, hereunder.




          (c) Lessee shall bear all costs of such audit, including Lessor’s reasonable incidental costs
(such as, for example, overtime or additional or temporary personnel charges or copying costs)
incurred in connection with such audit, provided that, if such audit reflects that Lessee has
overpaid either Operating Expenses or Taxes for such Lease Year for Operating Expenses by more than
three percent (3%), and Lessor concurs with such determination (or in the absence of such
concurrence, such overpayment is established by arbitration conducted pursuant to the applicable
provisions of the Lease), then Lessor shall reimburse Lessee for the reasonable cost of such audit
(in addition to crediting or refunding such overpayment as provided herein) within thirty (30) days
after written demand therefor (together with reasonably detailed supporting documentation). In the
event that it is determined that there has been an underpayment of
Operating Expenses or Taxes by Lessee for such Lease Year for Operating Expenses, Lessee shall
pay to Lessor, within thirty (30) days after such determination is made, the amount of such
underpayment, and, in the event that it is determined that there has been




Exhibit A - Page 12




 









 







an overpayment of
Operating Expenses or Taxes by Lessee for such Lease Year for Operating Expenses, Lessor shall at
its option either (I) credit the excess to the next succeeding installment(s) of rent and
additional charges due under the Lease, or (II) reimburse Lessee for such overpayment within thirty
(30) days after such determination is made. In the event that there is any disagreement between
Lessor and Lessee as to whether any item of cost or expense is properly includable within Operating
Expenses or Taxes hereunder, or as to whether any Operating Expenses or Taxes have been correctly
calculated pursuant to the terms of the Second Amendment and this Addendum, Lessor and Lessee shall
each have the right to demand that such disagreement be resolved by arbitration conducted in
accordance with the applicable provisions of the Lease.




          (d) The failure of Lessor to submit an Expense Statement required under Paragraph 10(e) of the
Second Amendment or Paragraph 7(a) of this Addendum, above, within the time limits therein
specified shall not be deemed a waiver of its right to collect the additional rent. Lessor shall,
however, following the expiration of such time limits, submit an Expense Statement to Lessee within
fifteen (15) business days after a written request therefor by Lessee. Notwithstanding the
foregoing, Lessor must in all events submit its Expense Statement within four (4) years after the
end of any Lease Year for Operating Expenses, or else Lessor shall be deemed to have waived its
right to collect the additional rent for the Lease Year for Operating Expenses relating to such
Expense Statement.




8. Adjusted Base Rent.




     As used in the Lease, the term “Adjusted Base Rent” shall be an amount equal to (a) the
aggregate amount of the then current installment of Base Rent payable by Lessee during the then
current Lease Year for Operating Expenses, plus (b) Lessee’s Percentage of Taxes for the Building
apportioned with respect to the portions of the Tax Years covered by the Lease Year for Operating
Expenses referenced in item (a), plus (c) Lessee’s Percentage of Operating Expenses for the Lease
Year for Operating Expenses corresponding to the Lease Year for Operating Expenses referenced in
item (a), and the term “monthly Adjusted Base Rent” shall refer to an amount equal to one twelfth
(1/12th) of the then current Adjusted Base Rent.



9. Lessee’s Right to Contest




     Lessee shall have the right, but not the obligation, at its sole cost and expense to contest the
validity or applicability of any law, ordinance, rule, order, regulation, governmental direction,
insurance requirement, tax or lien of any kind relating to or affecting the Premises, Building,
Property or Levi’s Plaza, or any obligation of Lessee under the Lease, upon the condition that
Lessee shall diligently contest such validity or applicability in good faith by appropriate
proceedings and such contest shall not subject Lessor to any cost or expense of any kind
whatsoever, including, without limitation, any civil or criminal liability or penalty.



Exhibit A - Page 13





 











 





EXHIBIT B




BASE BUILDING WORK




	 	 	 	 	 	 	 
	 	 	Item	 	Scope of Work	 	When
	 
	 	 	 	 	 	 
	1

	 	Cooling Coils —

Supply Fans
	 	Replace the cooling
coils in Fans 1, 3,
4, & 5, with new
replacement cooling
coils. Materials
used and techniques
employed shall be
consistent with
standards
customarily
maintained by the
owners of the
Comparable
Maintenance
Standards
Buildings.
	 	Complete by March 31, 2010
	 
	 	 	 	 	 	 
	2

	 	Chilled Water Pumps
	 	Lessor and Lessee
acknowledge and
agree that the
chilled water pumps
P-1 & P-2 are
beyond their useful
life and will
require
replacement.
Materials used and
techniques employed
shall be consistent
with standards
customarily
maintained by the
owners of the
Comparable
Maintenance
Standards
Buildings.
	 	Within ninety (90)
days after the date
Lessee has
reasonably
determined that
replacement is
necessary and has
notified Lessor of
such determination.
	 
	 	 	 	 	 	 
	3

	 	Condenser Water

Pumps
	 	Replace condenser
water pumps P-3 &
P-4 with new pumps
with equal or
greater performance
specifications as
current pumps.
Materials used and
techniques employed
shall be consistent
with standards
customarily
maintained by the
owners of the
Comparable
Maintenance
Standards Buildings
	 	Within ninety (90)
days after the date
Lessee has
reasonably
determined that
replacement is
necessary and has
notified Lessor of
such determination.
	 
	 	 	 	 	 	 
	4

	 	Sump Pump

Replacement
	 	Replace sump pumps
with new pumps with
equal or greater
performance
specifications as
current pumps.
Materials used and
techniques employed
shall be consistent
with standards
customarily
maintained by the
owners of the
Comparable
Maintenance
Standards Buildings
	 	Within ninety (90)
days after the date
Lessee has
reasonably
determined that
replacement is
necessary and has
notified Lessor of
such determination.






 









 






	 	 	 	 	 	 	 
	 	 	Item	 	Scope of Work	 	When
	 
	 	 	 	 	 	 
	5

	 	Boiler B-1
	 	Replace boiler with
new boiler with
equal or greater
performance
specifications as
current boiler.
Materials used and
techniques employed
shall be consistent
with standards
customarily
maintained by the
owners of the
Comparable
Maintenance
Standards Buildings
	 	Complete October
31, 2010
	 
	 	 	 	 	 	 
	6

	 	Exhaust Fans EF-1

thru EF-13
	 	Replace fans with
new fans with equal
or greater
performance
specifications as
current fans.
Materials used and
techniques employed
shall be consistent
with standards
customarily
maintained by the
owners of the
Comparable
Maintenance
Standards Buildings
	 	Within ninety (90)
days after the date
Lessee has
reasonably
determined that
replacement is
necessary and has
notified Lessor of
such determination.
	 
	 	 	 	 	 	 
	7

	 	Upgrade Atmospheric

Boilers
	 	Sustainability —
Upgrade atmospheric
boiler B-2 to 85%
efficient forced
draft water tube
boilers with energy
star rating.
Materials used and
techniques employed
shall be consistent
with standards
customarily
maintained by the
owners of the
Comparable
Maintenance
Standards Buildings
	 	Complete by October
31, 2010
	 
	 	 	 	 	 	 
	8

	 	Water Test Sliding

Doors
	 	Repair, review and
test all sliding
doors in premises
so that doors are
in first class
operational
condition, with
proper weather
stripping,
alignment and
operation,
consistent with
standards
customarily
maintained by the
owners of the
Comparable
Maintenance
Standards Buildings
	 	Complete by
November 30, 2009
	 
	 	 	 	 	 	 
	9

	 	Fire Alarm Control

Unit (FACU)
	 	Replace and upgrade
system to address
new building code
requirements,
including
installation of
horns and strobes,
and sufficient to
satisfy Tenant’s
capacity
requirements.
Materials used and
techniques employed
shall be consistent
with standards
customarily
maintained by the
owners of the
Comparable
Maintenance
Standards
	 	Complete by
December 31, 2009






 









 






	 	 	 	 	 	 	 
	 	 	Item	 	Scope of Work	 	When
	 
	 	 	 	 	 	 
	 

	 	 	 	Buildings	 	 
	 
	 	 	 	 	 	 
	10

	 	Modernization
	 	Modernize elevators
1-5 (but not the
service elevator
(i.e. elevator 6))
in accordance with
Elevator
Modernization
Specification,
prepared by Newby
Elevator
Consulting, dated
October 13, 2009
	 	In accordance with
the schedule set
forth in the
modernization
specification.







 









 








EXHIBIT C




	 	 	 	 	 	 
	Recording Requested By, and

	 	 	 
	 	 
	When Recorded Mail To:
	 	 	 	 	 
	 
	 	 	 	 	 
	Orrick, Herrington & Sutcliffe LLP
	 	 	 	 	 
	The Orrick Building
	 	 	 	 	 
	405 Howard Street
	 	 	 	 	 
	San Francisco, CA 94105
	 	 	 	 	 
	Attention: Stephan C. Wagner
	 	 	 	 	 
	 
	 	 	 	 	 
	 

	 	 	 
	 	 
	 	      (Space Above This Line For Recorder’s Use Only)






MEMORANDUM OF EXERCISE OF RENEWAL OPTION




     THIS MEMORANDUM OF EXERCISE OF RENEWAL OPTION is made and entered into as of November 12, 2009
(the “Effective Date”), by and between (a) BLUE JEANS EQUITIES WEST, a California general
partnership, INNSBRUCK LP, a California limited partnership, and PLAZA GB LP, a California limited
partnership, as tenants in common (collectively, “Lessor”), and (b) LEVI STRAUSS & CO., a Delaware
corporation (“Lessee”).



     1. Lessor and Lessee are currently parties to that certain Lease, dated as of July 31, 1979
(as amended from time to time, the “Lease”), a memorandum of which was recorded in the Official
Records of the City and County of San Francisco, State of California, on August 3, 1979, as
Instrument Number C012211 in Book C831 at page 689. All capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Lease.



     2. Pursuant to the terms of the Lease, Lessee has exercised its second option to extend the
term of the Lease.



     3. The Second Extended Term will commence on January 1, 2013 and will expire on December 31,
2022.



     4. Lessee has additional rights to extend the Term of the Lease for successive periods, as
provided in the Lease, not to exceed an outside expiration date of December 31, 2079.



     5. Lessor hereby acknowledges Lessor’s grant to Lessee of a right of first offer to purchase
certain of the property described on Exhibit A attached hereto, including the improvements
located thereon, which right (i) shall be subject to the terms and conditions contained within, and
(ii) shall be exercised, if at all, pursuant to the provisions of, that certain Second Amendment To
Lease (Levi Strauss Building), dated November 12, 2009, by and between Lessor and Lessee.



     6. This Memorandum of Exercise of Renewal Option may be executed in counterparts, each of
which shall constitute an original of such Memorandum of Exercise



 









 







of Renewal Option and Right of First Offer to Purchase, but all of which shall constitute one and
the same instrument.



[Signatures on following page]




 









 








     IN WITNESS WHEREOF, Lessor and Lessee have executed this Memorandum of Exercise of Renewal
Option effective as of the Effective Date.



	 	 	 	 	 
	      LESSOR: 	BLUE JEANS EQUITIES WEST,

a California general partnership

 	 
	 	By:  	Plaza B, LLC,
a Delaware limited liability company
 	 
	 	 	Its:  	General Partner 	 
	 
	 	 	 
	 	By:  	                   The Gerson Bakar 1984 Trust
 	 
	 	 	Its:  	Member 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Gerson Bakar, Trustee 	 
	 
	 	INNSBRUCK LP,

a California limited partnership

 	 
	 	By:  	G. Bakar Properties, Inc.,
a California corporation
 	 
	 	 	Its:  	General Partner 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Stephen LoPresti, its Secretary 	 
	 
	 	PLAZA GB LP,

a California limited partnership

 	 
	 	By:  	G. Bakar Properties, Inc.,
a California corporation
 	 
	 	 	Its:  	General Partner 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Stephen LoPresti, its Secretary 	 
	 
	      LESSEE: 	LEVI STRAUSS & CO.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Its:  	 	 



 









 






	 	 	 	 	 



CALIFORNIA ALL-PURPOSE

CERTIFICATE OF ACKNOWLEDGEMENT




	 	 	 	 	 
	State of California

	 	 	)	 
	 

	 	 	)	 
	County of _____________________

	 	 	)	 





On _______________ before me, __________________, a Notary Public,
personally appeared _____________________, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.



I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.




	 	 	 	 	 
	


WITNESS my hand and official seal.


 	 	(Notary Seal) 
	 	 	 
	Signature of Notary Public 	 	 
	 	 	 	 



 









 






	 	 	 	 	 



CALIFORNIA ALL-PURPOSE

CERTIFICATE OF ACKNOWLEDGEMENT




	 	 	 	 	 
	State of California

	 	 	)	 
	 

	 	 	)	 
	County of _____________________

	 	 	)	 





On _______________ before me, __________________, a Notary Public,
personally appeared _____________________, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.



I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.



	 	 	 	 	 
	


WITNESS my hand and official seal.


 	 	(Notary Seal) 
	 	 	 
	Signature of Notary Public 	 	 
	 	 	 	 




 









 






	 	 	 	 	 



CALIFORNIA ALL-PURPOSE

CERTIFICATE OF ACKNOWLEDGEMENT




	 	 	 	 	 
	State of California

	 	 	)	 
	 

	 	 	)	 
	County of _____________________

	 	 	)	 





On _______________ before me, __________________, a Notary Public,
personally appeared _____________________, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.



I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.




	 	 	 	 	 
	


WITNESS my hand and official seal.


 	 	(Notary Seal) 
	 	 	 
	Signature of Notary Public 	 	 
	 	 	 	 



 









 






	 	 	 	 	 



EXHIBIT A




LEGAL DESCRIPTION OF LEVI’S PLAZA