exv10w1



 






Exhibit 10.1




LEASE



BIT HOLDINGS FIFTY-SIX, INC.,

a Maryland corporation,

Landlord,


and


Taleo Corporation,

a Delaware corporation

Tenant


Dated: March 16, 2006




 









 








LEASE



THIS LEASE (“this Lease”) is made and entered into as of March 16, 2006 by Landlord and Tenant.




	 	 	 
	1. BASIC LEASE INFORMATION
	 	 
	 
	 	 
	LANDLORD:

	 	BIT Holdings Fifty-Six, Inc.,
	 

	 	a Maryland corporation
	 
	 	 
	LANDLORD’S ADDRESS FOR

	 	AFL-CIO Building Investment Trust
	NOTICES:

	 	Two Hopkins Plaza, Suite 804
	 

	 	Baltimore, MD 21201
	 

	 	Attn: Asset Manager, Dublin Corporate Center
	 
	 	 
	 

	 	With a concurrent copy to:
	 
	 	 
	 

	 	ING Clarion Partners
	 

	 	1900 Macarthur Boulevard, Suite 225
	 

	 	Irvine, California 92612
	 

	 	Attn: Asset Director, Dublin Corporate Center
	 
	 	 
	 

	 	With a concurrent copy to:
	 
	 	 
	 

	 	Berding & Weil LLP
	 

	 	3240 Stone Valley Road West
	 

	 	Alamo, CA 94507
	 

	 	Attn: Scott Singer, Esq.
	 
	 	 
	TENANT:

	 	Taleo Corporation, a Delaware corporation
	 
	 	 
	GUARANTOR:

	 	Not Applicable
	 
	 	 
	TENANT’S NOTICE ADDRESS:
	 	 
	 
	 	 
	Before taking occupancy:

	 	Taleo Corporation
	 

	 	525 Market Street, 8th Floor
	 

	 	San Francisco, California 94105
	 

	 	Attention: Josh Faddis, Esq.
	 

	 	Attention: Ms. Debbie Shotwell
	 
	 	 
	Following occupancy:

	 	Taleo Corporation
	 

	 	John Faddis, Esq., Vice President and Corporate Counsel
	 

	 	4140 Dublin Blvd, Suite 400
	 

	 	Dublin, California 94568
	 

	 	Fax Number [Tenant to Provide]






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	 	With a concurrent copy to:
	 
	 	 
	 

	 	Condon & Forsyth LLP
	 

	 	Times Square Tower
	 

	 	7 Times Square
	 

	 	New York, New York 10036
	 

	 	Attention: Katherine B. Posner, Esq.
	 
	 	 
	LAND:
	 	 
	 
	 	 
	 

	 	The “Land” consists of the Project and all real
property making up on the common areas.
	 
	 	 
	BUILDING:

	 	4140 Dublin Boulevard, Dublin, California 94568.
	 
	 	 
	PROJECT:

	 	The office buildings known as Dublin Corporate Center
located at 4120 Dublin Boulevard, 4140 Dublin
Boulevard, and 4160 Dublin Boulevard, collectively in
the City of Dublin, California 94568, Alameda County.
The Project is deemed to consist of a total of four
hundred and fifteen thousand four hundred and ninety
two (415,492) square feet of Gross Rentable Area.
	 
	 	 
	PROPERTY:

	 	The Buildings and the Land.
	 
	 	 
	PREMISES:

	 	The premises located on the fourth (4th)
floor of the Building, known as Suite 400, as more
fully described in Section 1 (Premises) and shown on
the floor plans attached as Exhibit A to this Lease,
and deemed to contain thirty five thousand four hundred
and twenty four (35,424) square feet of Gross Rentable
Area per BOMA Standards (as defined below).
	 
	 	 
	GROSS OFFICE RENTABLE

AREA OF THE BUILDING:

	 	Deemed to be one hundred and thirty eight thousand one
hundred and thirty six (138,136) square feet, as
determined by Landlord’s architect pursuant to the
American National Standard Method of Measuring Floor
Area in Office Buildings, ANSI/BOMA Z65.1-1996,
published by the Building Owners and Managers
Association International (“BOMA Standards”). All
references to “Gross Rentable Area” mean measurements
prepared pursuant to the BOMA Standards.






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	LEASE COMMENCEMENT DATE:

	 	June 15, 2006 and to be confirmed in the form of
Exhibit E.
	 
	 	 
	LEASE EXPIRATION DATE:

	 	Expiration of the initial seven (7) year Term measured
from the Lease Commencement Date and to be confirmed in
the form of Exhibit E to this Lease.
	 
	 	 
	TERM:

	 	Seven (7) years.
	 
	 	 
	EXTENSION TERM:

	 	One (1) Extension Term of five (5) years.
	 
	 	 
	BASE RENT:
	 	 






	 	 	 
	Month
	 	 	Rent
	1—12

	 	 $ 52,427.52/month
	13—24

	 	 $ 76,161.60/month
	25—36

	 	 $ 77,932.80/month
	37—48

	 	 $ 79,704.00/month
	49—60

	 	 $ 81,475.20/month
	61—72

	 	 $ 83,246.40/month
	73—84

	 	 $ 85,017.60/month






	 	 	 
	ADVANCE RENT:

	 	Seventy Six Thousand One Hundred Sixty One Dollars and
Sixty Cents ($76,161.60 ) upon Lease execution.
	 
	 	 
	BASE YEAR FOR OPERATING

COSTS:

	 	 Calendar year 2006.
	 
	 	 
	BASE YEAR FOR REAL

ESTATE TAXES:

	 	 Calendar year 2006.
	 
	 	 
	TENANT’S PROPORTION-ATE

SHARE OF OPERATING

COSTS:

	 	 25.644%
	 
	 	 
	TENANT’S PROPORTION-ATE

SHARE OF AND REAL

ESTATE TAXES

	 	 25.644%
	 
	 	 
	CASH SECURITY DEPOSIT:

	 	 $0.00
	 
	 	 
	LETTER OF CREDIT


BROKER(S):

	 	One million dollars ($1,000,000.00).


Colliers International, representing Landlord and
Newmark Knight Frank, representing Tenant.






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	TENANT WORK ALLOWANCE

(IF ANY):

	 	See Work Agreement attached as Exhibit B.
	 
	 	 
	BUILDING HOURS:

	 	7:00 a.m. to 6:00 p.m., Monday through Friday (except
Holidays), or such other hours as Landlord reasonably
determines from time to time. The term “Holidays”
means any federally designated holidays.
	 
	 	 
	PARKING SPACES:

	 	Three and eight tenths (3.8) spaces per one thousand
(1,000) Gross Rentable Area of the Premises, located
within the Building’s parking lot. If the Gross
Rentable Area of the Premises is not exactly divisible
by one thousand (1,000), the area of the Premises shall
be rounded to the next highest number that is divisible
by one thousand (1,000) and the calculation of the
number of parking spaces shall be made on the basis of
such higher number. Parking shall be subject to the
terms and conditions of this Lease. Therefore, Tenant
shall be entitled to one hundred and thirty five (135)
parking spaces in the Building’s Parking Area.
	 
	 	 
	RIGHT OF FIRST OFFER:

	 	Tenant shall have a limited ongoing Right of First
Offer to lease additional space in the Building, as
detailed in Section 1.3 of the Lease.






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EXHIBITS




	 	 	 
	Exhibit A

	 	Floor Plan Showing Premises
	Exhibit B

	 	Work Agreement
	Exhibit C

	 	Plans
	Exhibit D

	 	Rules and Regulations
	Exhibit E

	 	Form of Lease Commencement Agreement
	Exhibit F

	 	Conditions for Construction
	Exhibit G

	 	Intentionally Omitted
	Exhibit H

	 	AFL-CIO Building Investment Trust Participants
	Exhibit I

	 	Building Standard Improvements
	Exhibit J

	 	Tenant’s Monument Signage
	Exhibit K

	 	Tenant’s Building Signage
	Exhibit L

	 	Joint Escrow Agreement
	 
	 	 
	ADDENDA
	 	 
	 
	 	 
	Addendum #1

	 	Letter of Credit





The Basic Lease Information is incorporated into and made a part of this Lease. Each reference in
this Lease to any information or definitions contained in the Basic Lease Information means and
refers to the information and definitions set forth in the Basic Lease Information. References in
this document to the term “Lease” mean the Basic Lease Information, the body of this Lease, and any
Exhibits, Addenda, or Riders thereto. The provisions of the body of this Lease will be read to
implement the Basic Lease Information. In the event of any inconsistency between the wording in
the body of the Lease and the wording in the Basic Lease Information, the wording in the body of
the Lease shall prevail and be controlling.




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1. PREMISES AND PARKING.




     1.1 General. Landlord leases the Premises to Tenant, and Tenant leases the Premises
from Landlord, for the Term (as herein defined) and on the conditions hereafter provided. No
easement for light and air is incorporated in the Premises. The Gross Rentable Area of the
Premises set forth in the Basic Lease Information is deemed to be the Gross Rentable Area of the
Premises for purposes of this Lease, and is final and binding on Landlord and Tenant, and Tenant
shall have no right to remeasure the Gross Rentable Area of the Premises.



     1.2 Parking.



          1.2.1 Non Exclusive Parking. During the Term of this Lease (as defined below), Tenant
will be entitled to the non-exclusive, unreserved, use of the number of parking spaces specified in
the Basic Lease Information (the “Parking Spaces”), in the parking lot directly adjacent to the
Building and intended to service the Building and serving the Project, (the “Parking Area”). Use
of all Parking Spaces and the Parking Area will be subject to the rules and regulations established
by Landlord in its reasonable discretion. Tenant understands and acknowledges that the Parking
Area serves all tenants in the Project. The rules and regulations may be altered at any time and
from time to time during the Term of the Lease after giving Tenant reasonable notice. Landlord
does not intend to restrict or designate the location of Tenant’s Parking Spaces. However,
Landlord reserves the right to designate the location of Tenant’s Parking Spaces in Landlord’s
reasonable discretion. Neither Tenant nor Tenant’s agents will at any time use more parking spaces
than the number allocated to Tenant pursuant to the Basic Lease Information. Tenant, and Tenant’s
agents will not park, or permit the parking of, their vehicles in any portion of the Parking Area
not designated by Landlord as a non-exclusive parking area. Tenant and Tenant’s agents will not
have the exclusive right to use any specific parking space.




          1.2.2 Availability of Parking. Notwithstanding the number of Parking Spaces held by
Tenant hereunder for Tenant’s non-exclusive use, in the event Landlord is required to reduce the
number of parking spaces in the Parking Area by reason of any Applicable Law relating to or
affecting parking at the Parking Area, or any cause beyond Landlord’s reasonable control, Landlord
will have the right to proportionately reduce the number of Tenant’s Parking Spaces and the
non-exclusive parking spaces of other tenants of the Building. Landlord reserves the right in its
absolute discretion to have any vehicles owned by Tenant or Tenant’s agents and parked in violation
of the provisions of this Section of the Lease or Landlord’s rules and regulations relating to
parking, towed away at Tenant’s cost, after giving Tenant reasonable notice. In the event Landlord
elects or is required by any Applicable Law to limit or control parking in the Parking Area, by
validation of parking tickets or any other method, Tenant agrees to participate in such validation
or other program under such reasonable rules and regulations as are from time to time established
by Landlord. Landlord will have the right to close all or any portion of the Parking Area at
reasonable times if reasonably required, including, without limitation, the prevention of a
dedication thereof, or the accrual of rights in any person or the public therein. Employees of
Tenant will be required to park in areas designated for employee parking, if any. The Parking Area
will not be used by Tenant or Tenant’s agents for any purpose other than the parking of motor vehicles and the ingress and egress of pedestrians and motor
vehicles.




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          1.2.3 No Liability. Landlord does not guaranty that Tenant will be able to use the
Parking Spaces in case of a casualty, act of God, or other Force Majeure event or condemnation
affecting the Parking Area. Landlord will not be liable for damage to any vehicle using the
Parking Area pursuant to this Lease, including theft, collision, fire, or any other damage to such
vehicle; Landlord will not be responsible for articles left in such vehicles; Landlord will not be
liable for loss of use of any such vehicles that are damaged while using the Parking Area. Except
to the extent caused by the gross negligence or intentional misconduct of Landlord its employees or
agents, Landlord will not be liable for any injury to any person using the Parking Area regardless
of the cause of such injury; all persons using the Parking Area will do so at their own risk.




          1.2.4 No Assignment or Sublease. Tenant may not assign its right to use the Parking
Spaces, except (a) in conjunction with a permitted assignment of this Lease or sublease of the
Premises and (b) for periodic use by Tenant’s clients and affiliates.




     1.3. Right of First Offer.



          1.3.1 Advice Space/Advice Notice. Not more than one (1) time per calendar year during
the Term (excluding the Option to Extend), Tenant shall have the right to send to Landlord a notice
(“Request Notice”) advising Landlord that Tenant is interested in leasing space in the Building,
which additional space will be leased for the remainder of the Lease Term (the “Advice Space”).
Within thirty (30) days of receipt of a Request Notice, subject to the superior rights of other
tenants, to which Tenant’s rights are secondary and subordinate, Landlord shall notify Tenant in
writing of if, when and what such Advice Space is or will be so available within the next twelve
(12) months, for the applicable term, without liability to Landlord for any errors or omissions,
and Landlord’s determination of the applicable fair market rent for the available space
(“Landlord’s Advice Notice”). Landlord’s Active Notice shall include the following: (a) fair
market rent; (b) applicable term of Advice Space; (c) Tenants Proportionate share inclusive of the
Advice Space; (d) any other concession Landlord is willing to offer; and (e) the anticipated date
of delivery of the Advice Space to Tenant. Tenant shall pay one hundred percent (100%) of the fair
market rent. Tenant thereupon shall have the right for a period of five (5) business days from
the receipt of the Landlord’s Advice Notice to lease all or a portion of such Advice Space only
upon the terms and conditions contained in Landlord’s Advice Notice, including Landlord’s
determination of fair market rent, and except that Tenant shall have no such right, if the (i)
Tenant is then in default, beyond applicable notice and cure periods, pursuant to Section 20 of
this Lease; (ii) the Tenant has been in material default two (2) times or more during the Lease
Term; (iii) the portion of the Advice Space not leased by Tenant is not reasonably leaseable in
Landlord’s reasonable determination; or (iv) Tenant has subleased, assigned or transferred more
than twenty five percent (25%) of the Premises. For purposes of this provision, the Advice Space
shall not be deemed to become available if the space is: (a) subleased by the current tenant of the
space; (b) re-leased by the current tenant of the space by renewal, extension, or renegotiation;
(c) leased by a tenant with an existing right to the space as of the Effective Date of this Lease, for example, an expansion right, first of first offer, refusal
or negotiation, etc., or (e) not leased to a tenant as of the Effective Date of this Lease.




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          1.3.2 Delivery of Advice Space. If Tenant timely and properly exercises its rights to
the Advice Space, Landlord shall deliver the Advice Space to Tenant upon the date such space is
available in its current “As Is” condition, and shall prepare an amendment to this Lease adding the
Advice Space to the Premises on the date of delivery and amending the Base Rent, Tenant’s
Percentage Share of Operating Expenses and Real Property Taxes (and all other applicable financial
obligations under the Lease shall be appropriately increased), which amendment shall be delivered
to Tenant promptly after exercise and executed by Tenant within five (5) business days after
Tenant’s receipt of same from Landlord. Rent shall commence with respect to the Advice Space sixty
(60) days after the date of delivery of possession by Landlord, and Landlord shall not be liable or
responsible in any way for any delay in delivery of the Advice Space. If Landlord does not deliver
the Advise Space within one hundred and eighty 180 days of the anticipated date of delivery set
forth in the Landlord’s Advice Notice, then Tenant, upon written Notice to Landlord, shall have the
right to cancel the Request Notice. Landlord shall have no responsibility for construction of
improvements in the Advice Space, and Landlord is not providing a tenant improvement allowance with
respect to the Advice Space. If Tenant fails to respond to Landlord’s Advice Notice within the
five (5) business day period above, or declines to exercise its rights to the Advice Space during
the five (5) business day period above, Landlord shall be free to market and lease the Advice Space
to any person or entity (or to withhold such space from the market), and Tenant shall have no
further rights of any kind or nature whatsoever to such Advice Space, and Landlord shall have no
liability of any kind or nature whatsoever to Tenant. The Base Year for operating costs and Real
Estate taxes shall be the first full calendar year of the term of the Advice Space. 




          1.3.3. Advice Space Parking. During the term of the Lease with respect to any Advice
Space, Tenant shall be entitled to 3.8 Parking Spaces per 1,000 square feet of Gross Rentable Area
of the Advice Space, subject to the provisions of Section 1.2 of this Lease.




          1.3.4. Tenant’s right of first offer to Lease Advice Space shall be continuous throughout the
term of this Lease without regard to Tenant’s decision not to lease Advice Space as it becomes
available (except to the extent Tenant does not have any further rights to a specific Advice Space
that was offered to Tenant and Tenant did not lease, pursuant to Section 1.3.2).




          1.4. AS IS Condition of the Premises/Construction of Tenant Improvements. Except as
set forth in Section 5.1 of this Lease, Landlord shall deliver the Premises to Tenant, as of the
Effective Date, in AS IS condition. Tenant represents and warrants that is has inspected the
Premises and hereby accepts the Premises in their current AS IS condition. Landlord and Tenant
agree and acknowledge that Landlord is not responsible for the construction of any initial
improvements in the Premises. Landlord is providing Tenant with a Tenant Improvement Allowance,
and Tenant shall construct all of the Tenant Improvements thought its own contractor. The
construction of the Tenant Improvements is expressly governed and subject to the Work Agreement,
attached hereto as Exhibit B, and incorporated herein in full by this reference, and the Conditions for Construction, attached hereto as Exhibit F, and
incorporated herein in full by this reference.




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     2. TERM.



     2.1 Determination of Lease Commencement Date. The term of this Lease (the “Term”),
and Tenant’s obligation to pay Rent, shall commence on the Lease Commencement Date as set forth in
the Basic Lease Information, provided however, Landlord may conclusively establish the Lease
Commencement Date in a factually correct Notice of Commencement Date in the form of Exhibit
E (the “Lease Commencement Date”). Unless sooner terminated as hereinafter provided, or as
provided by Applicable Law, the Lease Term shall end on the date set forth in the Basic Lease
Information for the Lease Expiration (the “Lease Expiration Date”). If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant on the Effective Date, whether due
to strikes, lockouts, labor disputes, shortages of material or labor, fire or other casualty, acts
of God, acts or threatened acts of terrorism, or any other cause beyond the control of Landlord,
this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or
damage of any kind whatsoever resulting therefrom including, but not limited to, incidental
damages, consequential damages, holdover expenses or relocation expenses incurred by Tenant due to
such delays, or loss of business. No delay in delivery of possession shall operate to extend the
Term hereof or amend or modify Tenant’s obligations hereunder. For purposes of this Lease, the
term “Effective Date” shall mean the date the last of Landlord or Tenant executes this Lease and
delivers it fully executed to the other party. Notwithstanding the Lease Commencement Date, all
provisions of this Lease (except for the payment of Rent) shall be effective and binding as of the
Effective Date.



     2.2 Confirmation of Lease Commencement Date. Within forty-five (45) days after the
Lease Commencement Date, Landlord and Tenant agree to execute and deliver a Lease Commencement
Agreement (substantially in the form of Exhibit E) setting forth the Lease Commencement
Date and Lease Expiration Date.



     2.3 Extension Option.



          2.3.1 Extension Option. Tenant is granted the right (the “Extension Option”) to
extend the Term for one (1) additional period of five (5) consecutive years (the “Extension
Period”), provided that (a) Tenant gives written notice to Landlord of Tenant’s election to
exercise such Extension Option no more than two hundred and seventy (270) days and no less than one
hundred and eighty (180) days before the expiration of the initial Term, (b) Tenant has not
assigned this Lease and is then in possession of and occupying one hundred percent (100%) of the
Premises, and (c) no material Event of Default has occurred and no material Event of Default occurs
after such notice.




               2.3.1.1 Rent for Extension Term(s). All terms and conditions of this Lease,
including all provisions governing the payment of Additional Rent, will remain in full force and
effect during the Extension Period, except that initial Base Rent payable during the Extension Period will be at an amount equal to ninety five percent (95%) of the Fair Market Rent



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(as defined in Section 2.3.3 [Fair Market Rent]) during the Extension Period (as determined no more
than ninety (90) days before the start of the Extension Period) but in no event less than the fully
escalated Base Rent in effect for the calendar month immediately before the start of the Extension
Period. In the event that Fair Market Rent for the Extension Period is not determined at the
commencement of the Extension Period, then Tenant shall continue to pay the same Rent during the
Extension Period as it was paying during the last month of the Term of the Lease, until the Fair
Market Rent is determined, at which time Tenant shall pay Landlord, as Additional Rent, any amounts
owed. Landlord may require an additional security deposit from Tenant if Landlord determines that
Tenant is not then as financially responsible as Tenant is on the date hereof, or that Tenant’s
then financial capacity and creditworthiness indicates that Tenant may not be able to undertake and
perform all the obligations of Tenant under this Lease through the Extension Period. The Base Year
for Real Estate Taxes and the Base Year for Operating Costs set forth in the Basic Lease
Information shall be adjusted to the first full calendar year during which the Extension Period
commences.




               2.3.1.2 Confirmation of Base Rent Amount. On the determination of the Fair Market
Rent, an amendment modifying the Lease to set forth the Base Rent for the Premises during the
Extension Period will be executed by Landlord and Tenant within thirty (30) days of such
determination.



               2.3.1.3 Other Obligations. Notwithstanding anything to the contrary contained in
this Section 2.3.1, the Extension Option is subject to any contractual obligations of Landlord for
space in the Building existing as of the date on which this Lease is fully executed, including any
renewal rights, and rights of first negotiation, refusal, and/or expansion.



          2.3.3 Fair Market Rent. For purposes of this Lease, the term “Fair Market Rent” means
the net or base annual rate of rent, expressed in dollars per square foot of rental area, reserved
in leases most recently consummated for office space in comparable first class office buildings in
the Dublin/Pleasanton area (the “Comparable Buildings”) with tenants of similar creditworthiness
and stature to Tenant, for comparable space (taking into account the location of the floor and the
building) for leases of similar duration inclusive of the prevailing market conditions for the
renewal of existing leases in existing buildings for existing tenants.




               2.3.3.1 Mutual Agreement. Landlord and Tenant will negotiate in good faith to
determine the Fair Market Rent for the applicable period within forty five (45) days of the date of
(a) the end of a recapture period under Section 7.1.1 (Initial Sublet; Recapture; Termination), or
(b) Landlord’s receipt of Tenant’s written notice of Tenant’s election to exercise the Extension
Option. If Landlord and Tenant cannot agree on the Fair Market Rent within such forty five (45)
day period, Tenant may elect to proceed with the process for determining the Fair Market Rent
provided in Section 2.3.3.2 (Fair Market Rent Determination).



               2.3.3.2 Fair Market Rent Determination. If Tenant elects to proceed with the process
for determining the Fair Market Rent, then the Fair Market Rent shall be determined in accordance
with the following procedures. Within fifteen (15) days after Tenant delivers notice to Landlord of Tenant’s election to so proceed, Landlord and Tenant shall each select a real
estate professional (based on the criteria set forth in this Section 2.3.3.7). Within thirty (30)



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days of their selection, each professional shall make a written determination to Landlord and
Tenant of the Fair Market Rent. All determinations of the Fair Market Rent shall be in writing.
The party appointing each professional shall be obligated, promptly after receipt of the valuation
report prepared by the professional appointed by such party, to deliver a copy of such valuation
report to the other party.




               2.3.3 Calculation. If the Fair Market Rent determinations of the professional
designated by Landlord is within five percent (5%) of the Fair Market Rent determination of the
professional designated by Tenant, then the Fair Market Rent shall be the average of the two Fair
Market Rent determinations.



               2.3.3.4 Variance in Determinations. If the Fair Market Rent determinations of the
two professionals vary by more than five percent (5%), then a third professional shall be selected
by the initial two professionals within fifteen (15) days after the initial two valuation reports
have been delivered to the parties (the third professional also having the qualifications set forth
in this Section 2.3.3.7). If a third professional is appointed, the third professional shall
review the valuation reports of the initial two professionals and shall select the one of the
initial two valuation reports that reflects such criteria for the Fair Market Rent. The third
professional shall promptly deliver a written report of his or her determination to each of the
parties within fifteen (15) days of receipt of the initial two (2) Fair Market Rent determinations.



               2.3.3.5 Binding Effect. The determination of the Fair Market Rent pursuant to this
Section 2.3.3 shall be final and binding on Landlord and Tenant.



               2.3.3.6 Expenses. The expenses of each of the first two professionals appointed
under this Section 2.4.3 shall be borne by the party appointing such professional. The expenses of
the third professional appointed under this Section 2.3.3 shall be paid one-half (1/2) by Landlord
and one-half (1/2) by Tenant.



               2.3.3.7 Qualification of Professionals. The real estate professionals selected by
Landlord and Tenant shall have the following qualifications: (a) must be an independent and
licensed real estate broker in the Dublin/Pleasanton area; (b) must have a minimum of ten (10)
years’ experience in commercial office leasing in the Dublin/Pleasanton area; (c) in the case of
the third professional only, is not then representing either Landlord or Tenant; and (d) in the
case of the third professional only, has not been involved in any disputes with Landlord, Tenant,
or either of the other professionals.



     3. BASE RENT; ADDITIONAL RENT; LETTER OF CREDIT. .



          3.1 Definitions; Increases. The term “Base Rent” means the amount set forth in the
Basic Lease Information. The term “Additional Rent” means any rent, payments, or any other
monetary sums, other than Base Rent, payable under this Lease, whether due and payable immediately or in monthly installments. Throughout this Lease, Base Rent and Additional Rent are
sometimes collectively called “Rent”. All sums due under this Lease shall be “Rent” for collection
purposes.




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          3.2 Payment of Rent. Commencing on the Lease Commencement Date, Rent is due and
payable, in advance, in equal, consecutive monthly installments. If the Term begins or ends on a
date other than on the first day of a calendar month, Rent for the first month of the Term and/or
the last month of the Term, as the case may be, will be prorated on a daily basis based on a thirty
(30) day month and will be paid in advance. All payments of Base Rent for the month in question
will be due on or before the first (1st) day of the calendar month during the Term for
which Base Rent is due and payable. All payments of Additional Rent are due by the first day of
each calendar month during the Term (unless otherwise expressly provided in other Sections of this
Lease). Tenant will pay all Rent without deduction, set off, or counterclaim, and, except as
otherwise expressly set forth herein, without demand, notice, or invoice. If Landlord at any time
or times accepts Rent after it becomes due and payable, such acceptance will not excuse a delay on
any subsequent occasion, or constitute, or be construed as, a waiver of any of Landlord’s rights
hereunder, including the right to sue for possession and sue for any amounts which remain
outstanding.




          3.3 Payment Address. Tenant will pay to Landlord, at Landlord’s Address for Notices
set forth in the Basic Lease Information (or such other place or to such agents as Landlord may
from time to time designate to Tenant in writing), all installments of Base Rent and Additional
Rent (whether such Additional Rent is being paid on an installment or other basis) by the date the
Rent becomes due in lawful money of the United States of America that is legal tender for the
payment of public and private debts.




          3.4 Delinquent Rent Payments. If any installment of Base Rent or Additional Rent is
not paid within five (5) days of when due (whether such Additional Rent is being paid on an
installment or other basis), then such unpaid installment of Rent will bear interest five (5) days
from the date such installment of Rent became due to the date of the payment thereof by Tenant at a
rate (the “Default Rate”) equal to the lesser of (a) five percent (5%) annually over the prime
rate of interest announced, from time to time, by Bank of America, N.A., or if at any time Bank of
America, N.A. or its successor in interest does not announce its prime rate of interest, then the
prime rate of interest published from time to time in The Wall Street Journal, Eastern Edition, in
the section entitled “Money Rates” (the “Prime Rate”), or (b) the maximum interest rate then
allowed by Applicable Laws. If Tenant fails to pay any such installment of Rent within five (5)
days of the date when such installment was due, Tenant will also pay to Landlord a late payment
charge equal to five percent (5%) of the amount of such installment of Rent. Any interest or late
payment charges paid by Tenant will not relieve Tenant from its obligation to pay any other amounts
due under this Section 3 or any other provision of this Lease. Such interest and late payment
charges will constitute Additional Rent due with the next monthly installment of Base Rent and,
where applicable, Additional Rent. If Landlord does not bill Tenant for such interest or such late
payment charges at the time of their respective accruals, such fact will not constitute Landlord’s
waiver of its right to accumulate such interest and charges and to invoice Tenant on a periodic
basis, nor will Landlord’s acceptance of any payment from, or by Landlord’s furnishing services to, a party other than Tenant constitute
Landlord’s waiver of its right to such interest and charges or to any other amount owed or that
becomes payable to it hereunder.




12









 








          3.5 Letter of Credit. Tenant shall post the Letter of Credit pursuant to the terms,
provisions and obligations of Addendum No. 1.




          3.6 Tenant’s Right to Offset Rent. Tenant shall have the right to offset against Rent
otherwise payable by Tenant pursuant to the Lease for the following limited purposes:




               (i) Any excess amounts prepaid by Tenant for Operating Costs and Real Property Taxes based on
Landlord’s estimate, and Tenant’s monthly estimated installment payment, provided, such overpayment
may be credited against Tenant’s next accruing Operating Cost and Real Property Tax obligations
only (and not Base Rent), and provided Landlord has not timely paid such amount to Tenant pursuant
to the terms of this Lease after notice and opportunity to cure; and



               (ii) Any allowance or credit to which Tenant is entitled pursuant to this Lease that is not
timely paid by Landlord after twenty (20) days notice and opportunity to cure.



               (iii) If Landlord does not pay the Tenant Improvement Allowance in accordance with the terms
set forth in the Work Agreement.



     4. OPERATING COSTS AND REAL ESTATE TAXES.



          4.1 Operating Costs—Base Year. Beginning on the first day of the second
(2nd) calendar year (i.e. January 1, 2007), Tenant shall pay as Additional Rent Tenant’s
estimated Proportionate Share (as defined below) of the amount by which Operating Costs (as defined
below) for each calendar year falling entirely or partly within the Term exceed a base amount (the
“Operating Costs Base Amount”) equal to the “Operating Costs” incurred during the Base Year for
Operating Costs. In the event the Operating Costs Base Amount as otherwise determined in this
Section is abnormally high in comparison to the historical average of Operating Costs for the prior
five (5) calendar years, taking into account year-by-year increases, the Operating Costs Base
Amount shall be determined by taking the Building’s average Operating Costs for the prior five (5)
calendar years and increasing such average Operating Costs by the average annual increase in the
Building’s Operating Costs. For purposes of this Lease, “Tenant’s Proportionate Share” for
Operating Costs has been calculated to be that percentage that is equal to a fraction, the
numerator of which is the number of square feet of Gross Rentable Area in the Premises, and the
denominator of which is the number of square feet of the Gross Rentable Area set forth in the Basic
Lease Information. To the extent Landlord, at the Effective Date, carries earthquake, terrorism
and/or mold insurance coverage, such coverage shall be included in the Operating Costs Base Amount,
and Tenant shall be responsible for increases above the Operating Costs Base Amount consistent with
this Section 4.1. To the extent Landlord elects, in its sole discretion to carry earthquake, terrorism and/or mold insurance coverage (and
Landlord did not maintain such coverage at the Effective Date of this Lease), then Landlord shall
increase the Operating Costs Base Amount by the per square foot costs attributable to the premiums
payable for the first full calendar year that such coverage is purchased, and thereafter, increases
in premiums shall be includable in Operating Costs.




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               4.1.1 Estimated Monthly Payments of Operating Costs. Tenant shall make estimated
monthly payments to Landlord on account of the amount by which Operating Costs that are expected to
be incurred during each subsequent calendar year (or portion thereof) would exceed the Operating
Costs Base Amount. On or about the first day of the second (2nd) calendar year (i.e.
January 1, 2007), and at the beginning of each calendar year thereafter, Landlord may submit a
statement setting forth Landlord’s reasonable estimate of such excess and Tenant’s Proportionate
Share thereof. Tenant shall pay to Landlord on the first day of each month after receipt of such
statement, until Tenant’s receipt of the succeeding annual statement, an amount equal to
one-twelfth (1/12th) of such share (estimated on an annual basis without proration.
From time to time during any calendar year, but not more than two (2) times in any calendar year,
Landlord may revise its estimate and adjust Tenant’s monthly payments to reflect Landlord’s revised
estimate.



               4.1.2 Definition of Operating Costs. The term “Operating Costs” means any costs
associated with the operation, management, maintenance, repair, replacement, and protection of the
Building including, without limitation, costs of heating; cooling; utilities (including any taxes
or impositions thereon); insurance; parking lot maintenance, repair, repaving, resurfacing and
re-stripping; re-roofing; janitorial and cleaning service; lobby host, if any is provided by
Landlord; security services, if any are provided by Landlord; salaries, wages, and other personnel
costs of engineers, superintendents, watchmen, and other Building employees, and other employees of
Landlord and the employees of Landlord’s agents and contractors allocable to Building or
Project-related matters (provided, however, that to the extent that employees of Landlord or
employees of Landlord’s agents are not assigned exclusively to the Building or the Project, then
Operating Costs will include only the portion of their salaries, wages, and other personnel costs
that Landlord allocates to the Building or the Project); charges under all Building and Project
maintenance and service contracts, including contracts for chilled water and hot water, boilers,
controls, elevators, security systems, exterior window cleaning, landscaping (including new
plantings and irrigation), common areas, public areas, lobbies, and Building, Project and Land
maintenance; costs of all maintenance and repair, including costs of all warranties included in
contracts for the provision of materials or services to the Building to the extent the cost of such
warranty is separately stated in such contract; costs of enforcing warranties; costs of supplies
that are deducted (and not capitalized) for federal income tax purposes; management fees that are
not in excess of the prevailing market rate management fees paid to management organizations
managing Comparable Buildings; accounting costs and fees; costs incurred for attorneys or other
third parties to appeal or contest Real Estate Tax assessments (as more fully provided in this
Section 4), including the costs incurred to review the feasibility thereof; costs of cleaning,
decorating, repairing, maintaining, replacing and operating any common areas in the Project; all
other costs Landlord incurs to operate, service, maintain, repair and replace the Building, Land
and Project; the cost of any capital improvements made by Landlord to the Building and/or Project, or capital assets acquired by Landlord after the Lease
Commencement Date in order to comply with any local, state or federal law, ordinance, rule,
regulation, code or order of any governmental entity or insurance requirement, including but not
limited to, the Americans with Disability Act (each a “Legal Requirement” and collectively, the
“Legal Requirements”) with which the Building and/or Project was not required to comply at
the Lease Commencement Date, or to comply with any amendment or other change to the



14









 




enactment or
interpretation of any Legal Requirement from its enactment or interpretation at the time of the
Lease Commencement Date; and the cost of any capital improvements made by Landlord to the Building
and/or Project or capital assets acquired by Landlord after the Lease Commencement Date for the
protection of health and safety of the occupants of the Building and/or Project or that are
designed to reduce other Operating Costs; provided however, any and all costs of capital
improvements or capital assets acquired which are includable in Operating Costs shall be amortized
on a straight-line basis over the useful life of the asset, pursuant to Generally Accepted
Accounting Principles. Notwithstanding anything to the contrary contained in this Lease, Tenant’s
Proportionate Share of Operating Costs shall not include any costs and/or expenses incurred which
solely benefit another building (and not the Building or Common Areas) in the Project.




               4.1.3 Exclusions from Operating Costs. Operating Costs will not include the
following: (a) original construction costs of the Building or Project; (b) Real Estate Taxes; (c)
depreciation of the Building (except as otherwise provided herein); (d) payments of principal and
interest on any mortgages, deeds of trust, or other encumbrances on the Building; (e) costs to
paint, decorate, or renovate a specific tenant’s space (specifically excluding base building
improvements and systems and the common areas of the Project), unless such items are similarly
provided to, or benefit generally, other tenants in the Building; (f) costs to repair, restore, or
replace any item in the Building, to the extent Landlord is actually reimbursed therefore by
proceeds from insurance, warranties, condemnation, a tenant of the Building or a third party; (g)
leasing commissions, attorneys’ fees, space planning costs, permitting costs, license and
inspection costs, moving costs and advertising or promotional costs Landlord incurs to lease space
in the Building to tenants or prospective tenants of the Building; (h) any ground lease rental; (i)
the cost of any capital improvements made by Landlord to the Building and/or Project, or capital
assets acquired by Landlord after the Lease Commencement Date in order to comply with any local,
state or federal law, ordinance, rule, regulation, code or order of any governmental entity or
insurance requirement, including but not limited to, the Americans with Disability Act (each a
“Legal Requirement” and collectively, the “Legal Requirements”) with which the Building and/or
Project was required to comply at the Lease Commencement Date; (j) attorneys’ fees with
respect to disputes with other tenants in the Building or Project; (k) all items or services for
which another tenant of the Building reimburses Landlord (other than through Operating Costs); (l)
Landlord’s general corporate overhead (except to the extent management/administrative fees are
otherwise permitted in this Lease); (m) electric power costs for which any tenant directly
contracts with the local public utility service; (n) all costs of Landlord’s political or
charitable contributions; (o) interest or penalties arising from Landlord’s late payment of any
costs relating to the Project (unless resulting from Tenant’s late payment to Landlord); (p) costs,
fees, and charges paid to Landlord or Landlord’s affiliates for services in connection with the
Building or Project to the extent such charges exceed the charges for comparable services rendered by an unrelated or unaffiliated thirty party of comparable skill and
competence; (q) bad debt losses, rent losses or reserves for same (except for Landlord’s insurance
costs relating to same); (r) entertainment expenses or the cost of gifts to tenants or employees;
(s) costs incurred in connection with the sale, financing, or refinancing of the Building or
Project including brokerage commissions, consultants, attorneys’ and accountants’ fees, closing
costs, title insurance costs, transfer taxes and interest charges (provided nothing herein shall
limit or restrict in any manner whatsoever Landlord’s right to increase Real Property



15









 




Taxes and/or
Tenant’s Proportionate Share of Real Property Taxes, due to any reassessment of the Building or
Project due to the sale, transfer, or any other event which results in a reassessment or increase
in Real Property Taxes allocable to the Building or Project); (t) damage or repairs needed due to
the gross negligence or willful misconduct of Landlord or its agents; and (u) costs incurred by
Landlord in connection with correction of defects in design and construction of the Building or
Project.




               4.2 Real Estate Taxes—Base Year. Commencing on the first day of the second
(2nd) calendar year (i.e. January 1, 2007), Tenant shall pay as Additional Rent Tenant’s
Proportionate Share of the total increase, if any, in Real Estate Taxes (as defined below) for each
Expense Year (as defined below) over the amount of Real Estate Taxes for the Base Year (“Real
Estate Taxes Base Amount”). “Expense Year” means the twelve (12) calendar month period commencing
on the first day following the end of the Base Year and continuing for each succeeding twelve (12)
calendar month period; the second and each subsequent Expense Year will commence on the first day
following the end of the preceding Expense Year and will continue for the next succeeding twelve
(12) calendar months. Landlord shall provide Tenant with reasonable substantiation of such cost on
written request from Tenant. Tenant’s Proportionate Share for Real Estate Taxes has been
calculated to be that percentage that is equal to a fraction, the numerator of which is the number
of square feet of Gross Rentable Area of the Premises, and the denominator of which is the number
of square feet of the Gross Rentable Area of the Building as set forth in the Basic Lease
Information. Landlord will not collect more than one hundred percent (100%) of the Real Property
Taxes attributable to the Building.



               4.2.1 Estimated Monthly Payments of Real Estate Taxes. Tenant shall make estimated
monthly payments to Landlord on account of the amount by which Real Estate Taxes that are expected
to be incurred during each calendar year would exceed the Real Estate Taxes Base Amount. On or
about the first day of the second (2nd) calendar ear and, at the beginning of each
calendar year thereafter, Landlord may submit a statement setting forth Landlord’s reasonable
estimate of such amount and Tenant’s Proportionate Share thereof. Tenant shall pay to Landlord on
the first day of each month after receipt of such statement, until Tenant’s receipt of the
succeeding annual statement, an amount equal to one-twelfth (1/12th) of each such share
(estimated on an annual basis without proration). From time to time during any calendar year, but
not more than two (2) times in any calendar year, Landlord may revise Landlord’s estimate and
adjust Tenant’s monthly payments to reflect Landlord’s revised estimate.



               4.2.2 Definition of Real Estate Taxes. The term “Real Estate Taxes” means any taxes,
fees, charges, and assessments (including any payments to a business improvement district or
similar entity) allocable to the Building, Land and Proportionate Share of the common areas of the
Project, general and special, ordinary and extraordinary, foreseen or unforeseen, assessed, levied,
or imposed on the Building, Land, and Proportionate Share of the common areas and Project, by any
governmental authority. Except for the taxes, fees, charges, and assessments described in the next
succeeding sentence, Real Estate Taxes do not include Landlord’s federal, state, or local income or
inheritance, estate, trust, gift, franchise, mortgage, capital gains, or succession taxes. If at
any time during the Term any governmental authority



16









 




imposes a gross receipts tax or other tax, fee,
charge, and/or assessment of any kind or nature on or against the Base Rent and/or Additional Rent
payable under this Lease or otherwise received from the Building or Project, either in substitution
of all or any part of the taxes, fees, charges, and assessments levied or assessed against the
Building or Project, or in addition thereto, Tenant will pay promptly the entire amount of such
gross receipts tax or other tax, fee, charge, or assessment payable on account of the Base Rent
and/or Additional Rent (as Landlord reasonably determines) whether such gross receipts tax or other
tax, fee, charge, or assessment is imposed nominally on Landlord or Tenant, such payment to be made
either directly to the appropriate governmental authority (if such is required by such governmental
authority) or indirectly, by payment as Additional Rent to Landlord, which will in turn promptly
pay over amounts received by it pursuant to the foregoing provisions to such authority.




               4.2.3 Assessment. If during any calendar year (including the Real Estate Taxes Base
Year) the Building or Project is not fully assessed for tax purposes, then Landlord shall include
in Real Estate Taxes for such year all additional taxes, as reasonably estimated by Landlord, which
would have been incurred during such year if the Building had been fully assessed. If Landlord
successfully obtains a reduction in the Real Estate Taxes after the establishment of the Real
Estate Taxes Base Amount (as more fully provided in Section 4.7 [Real Estate Tax Contests]), the
Real Estate Taxes Base Amount will be appropriately adjusted to reflect the revised Real Estate
Taxes Base Amount, provided that Landlord adjusts its statement of Real Estate Taxes for all
subsequent calendar years of the term of this Lease by the actual amount that the Real Estate Taxes
Base Amount is adjusted.



          4.3 Partial Year. If the Term commences or expires on a day other than the first day
or the last day of a calendar year, respectively, then Tenant’s liabilities pursuant to this
Section 4 for such calendar year shall be apportioned by multiplying the respective amount of
Tenant’s Proportionate Share thereof for the full calendar year by a fraction, the numerator of
which is the number of days during such calendar year falling within the Lease Term, and the
denominator of which is three hundred sixty-five (365).




          4.4 Statement. Within approximately one hundred twenty (120) days after the end of
each calendar year, or as soon thereafter as is feasible, Landlord shall submit one or more
statements (individually and collectively, the “Statement”) showing (a) Tenant’s Proportionate
Share of the amount by which Operating Costs incurred during the preceding calendar year exceeded
or was less than the Operating Costs Base Amount, (b) the aggregate amount of Tenant’s estimated
payments made on account of Operating Costs during such year, (c) Tenant’s Proportionate Share of the amount by which Real Estate Taxes incurred during the preceding calendar
year exceeded or was less than the Real Estate Taxes Base Amount, and (d) the aggregate amount of
Tenant’s estimated payments made on account of Real Estate Taxes during such year. If the
Statement indicates that the aggregate amount of such estimated payments exceeds Tenant’s actual
liability, then Landlord shall, at its sole election, either credit the net overpayment toward
Tenant’s next estimated payment(s) pursuant to this Section or remit such net overpayment to Tenant
by means of a check. If such statement indicates that Tenant’s actual liability exceeds the
aggregate amount of such estimated payments, then Tenant shall pay the amount of such excess as
Additional Rent. Landlord shall pay Tenant if Real Estate Taxes and Operating Costs accruing
during the Term are refunded after the Term has ended.




17









 








          4.5 Review of Statement. After receipt of the Statement, Tenant shall have the right
to conduct an audit of Landlord’s books and records relating to the Operating Costs and Real Estate
Taxes and other charges under the Lease, for the calendar year just ended and to which the
Statement relates, provided that Tenant strictly complies with the terms and conditions of this
Section. No review shall be permitted at any time in which a material default exists under this
Lease (including a default arising by virtue of Tenant’s failure to pay any such deemed Additional
Rent, regardless of dispute as to the propriety of Landlord’s claim for payment). If a material
default occurs at any time during the pendency of an audit of the Landlord’s books and records then
Tenant’s audit shall immediately cease until such default is cured. No subtenant shall have the
right to conduct any such review, and no assignee of Tenant shall have the right to conduct a
review for a period before the assignment. To the extent Tenant’s audit of the Operating Costs
for the calendar year just ended reveals an overcharge of six percent (6%) or more, and Landlord
agrees with the results of Tenant’s audit, Tenant shall be entitled to audit the preceding two (2)
calendar years’ Operating Costs, subject to the same terms and conditions of this Section 4.




          4.5.1 Time Period. Tenant shall exercise its audit right on not less than fifteen
(15) days’ prior written notice, given at any time within ninety (90) days after Tenant’s receipt
of a Statement (time being of the essence). Any such audit shall be conducted by Tenant or by a
bona fide independent certified public accountant of Tenant’s choosing that is not being
compensated by Tenant on a contingency fee basis. If Tenant employs such an accountant then as a
condition precedent to such audit, Tenant shall deliver to Landlord a true and complete copy of
Tenant’s agreement with such accountant that shall include the following statements: (a) the
accountant will not in any manner solicit or agree to represent any other tenant of the Building
for a review of Landlord’s accounting records at the Building, and (b) the accountant will maintain
in strict confidence all information obtained in connection with the audit and will not disclose
the facts of the review or any results of it to any person or entity other than to Tenant and its
agents and consultants, who shall agree to be bound by such confidentiality. Any such audit shall
be conducted at the Building during normal business hours. Landlord shall provide Tenant with
reasonable accommodation for the audit and reasonable use of office equipment, but may make a
reasonable charge (as Additional Rent) for Tenant’s telephone calls and photocopies.




          4.5.2 Results. Tenant shall deliver to Landlord a copy of the results of any such
audit within fifteen (15) days after its completion or receipt by Tenant and will maintain in
strict confidence all information obtained in connection with the audit and will not disclose the
fact of the review or any results of it to any person or entity. A dispute over the Statement or
any error by Landlord in interpreting or applying the provisions of this Lease respecting Operating
Costs and Real Estate Taxes or in calculating the amounts in the Statement shall not be a breach of
this Lease by Landlord, and even if any legal proceeding over the Statement is resolved against
Landlord this Lease shall remain in full force and effect and Landlord shall not be liable for any
consequential damages. Pending the determination of any such dispute Tenant shall pay amounts
billed with respect to such Statement as Additional Rent, without prejudice to Tenant’s position,
and subject to rebate of any amounts subsequently found to have been charged to Tenant in error.




18









 








          4.5.3 Arbitration of Disputes. With respect to any dispute regarding the results of Tenant’s
audit, the parties agree to participate in binding arbitration (the “Arbitration”). The
Arbitration may be initiated by either party upon written notice to the other, and both parties
shall operating in good faith to complete the Arbitration within sixty (60) days from the date it
is initiated in writing. The Arbitration shall be conducted at the office of the American
Arbitration Association (“AAA”) nearest to the Project (currently, Walnut Creek, California). The
arbitrator shall be chosen by AAA, and shall be experience in commercial lease disputes. The
arbitrator shall award prevailing attorneys fees, and will issue a final, non-appealable order.




          4.6 Gross-Up. If the Building is not at least 95% occupied during all or a portion of
any calendar year, then Landlord shall make an appropriate adjustment for the Base Year for
Operating Costs and each subsequent calendar year to determine what the Operating Costs would have
been for such year as if the Building had been 95% occupied, and the amount so determined shall be
deemed to be the amount of Operating Costs for the calendar year. Such adjustment shall be made by
Landlord by increasing those variable components of such variable costs included in the Operating
Costs which vary based on the level of occupancy of the Building (i.e., janitorial contract,
electricity and management fees).




          4.7 Real Estate Tax Contests. Landlord shall have no obligation to contest, object
to, or litigate the levying, assessment, or imposition of Real Estate Taxes, and may settle,
compromise, consent to, waive, or otherwise determine any such Real Estate Taxes without consent of
or notice to Tenant. In all events, Landlord shall have the right to employ a tax consulting firm
to attempt to assure a fair tax burden on the Building or Project. Tenant shall pay to Landlord on
demand from time to time, as Additional Rent, Tenant’s Proportionate Share of the cost of such
service. Landlord shall have the right to retain legal counsel and expert witnesses to assist in
such contest and otherwise to incur reasonable expenses in such contest, and Tenant shall pay on
demand Tenant’s Proportionate Share of any fees, expenses, and costs incurred by Landlord in
contesting any assessments, levies, or tax rate applicable to the Building or portions thereof
regardless of whether such contest is successful. If such contest results in a refund of Real
Estate Taxes in any year, Tenant shall be entitled to receive its share of such refund (based on
Tenant’s Proportionate Share), prorated for the period with respect to which Tenant paid its share of Real Estate Taxes for such year, after deducting from the refund all fees,
expenses, and costs incurred by Landlord in such contest.




     5. USE OF PREMISES.



          5.1 General. Tenant will use the Premises solely for general office purposes
consistent with a first-class office building in the Dublin/Pleasanton area, and in accordance with
the use permitted under applicable zoning regulations. Tenant may not use the Premises for any
other purposes. Tenant may not use or occupy the Premises for any unlawful purpose. Tenant will,
at its sole cost, comply with, and make any Alterations to and within the Premises in the manner
allowed under Section 9 (Alterations and Mechanics’ Liens) as are necessary to comply with any
present and future laws, rules, regulations, ordinances, or orders of any governmental authority,
including the Americans with Disabilities Act (collectively, the “Applicable Laws”)




19









 







except Tenant
shall not be required to make any alterations to the Building core or Building systems in order to
comply with Applicable Laws (unless caused by Tenant’s use or Tenant’s construction of Alterations
or the initial Tenant Improvements). If Landlord alters any part of the Project to comply with the
requirements of any of the Applicable Laws and such requirements are a result of Tenant’s
particular business or use of the Premises, or as a result of Alterations or improvements performed
by Tenant, then Tenant will reimburse Landlord on demand for the cost thereof as Additional Rent.
Tenant warrants that it has entered into this Lease entirely for a business or commercial purpose
and that it will not use the Premises for any residential or retail purposes. Tenant may not do or
permit anything to be done in or about the Premises that will in any way obstruct or interfere with
the rights of other tenants of the Building, or injure or annoy them; use or allow the Premises to
be used for any improper or objectionable purposes; cause, maintain, or permit any nuisances in,
on, or about the Premises; or commit or allow to be committed any waste in, on, or about the
Premises. Tenant will keep closed all doors leading from the Premises to the rest of the Building
when the Premises are not in use. Landlord represents that it shall comply with any Applicable
Laws with respect to the Building, Land, Project and Property (provided however, Landlord will be
able to include such costs in Operating Costs as provided elsewhere in this Lease).




          5.2 Impermissible Uses. In addition to and not in limitation of the other
restrictions on use of the Premises set forth in this Section 5, the following uses of the Premises
are not considered to be “office use” and will not be permitted: (a) any use of the Premises by an
organization or person enjoying sovereign or diplomatic immunity; (b) any use of the Premises by or
for any medical, mental health, or dental practice; (c) any use of the Premises by or for an
employment agency or bureau; (d) any use of the Premises by or for any user that distributes
governmental or other payments, benefits, or information to persons that personally appear at the
Premises; and (e) any other use of the Premises or any portion of the Project by any user that will
attract a volume, frequency, or type of visitor or employee to the Premises or any portion of the
Project or the Buildings that is inconsistent with the standards of a high quality, first-class
office building in the Dublin/Pleasanton area or that will in any way impose an excessive demand or
use on the facilities or services of the Premises, Building, or Project.




     6. ASSIGNMENT OR SUBLETTING.



          6.1 Tenant shall not assign, mortgage, pledge, encumber, or hypothecate this Lease or any
interest herein (directly, indirectly, voluntarily or involuntarily, by operation of law, or
otherwise) or sublet the Premises or any part thereof, or permit the use of the Premises by anyone
other than Tenant without the prior written consent of Landlord first being obtained. If Tenant is
a corporation or a partnership, the transfer (as a consequence of a single transaction or any
number of separate transactions) of fifty-one percent (51%) or more of the beneficial ownership
interest of the voting stock of Tenant issued and outstanding as of the date hereof or partnership
interests in Tenant, as the case may be, shall constitute an assignment hereunder for which such
consent is required. Further, Tenant shall not assign this Lease or sublet the Premises or any
portion thereof to any corporation which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from merger or consolidation with Tenant, or to any person
or entity which acquires all the assets as a going concern of the business of Tenant that is being
conducted on the Premises, without the prior written consent of Landlord.




20









 







Any of the foregoing
acts without such consent shall be void and, at the sole option of Landlord, constitute an Event of
Default entitling Landlord to terminate this Lease and to exercise all other remedies available to
Landlord under this Lease and at law. The provisions of Section shall not apply to transactions
entered into by Tenant with (i) an “Affiliate” (as herein defined) or (ii) a corporation into or
with which Tenant is merged or consolidated or with an entity to which substantially all of
Tenant’s assets are transferred (whether directly or by virtue of the transfer of substantially all
of Tenant’s capital stock), (a “Permitted Transferee”) provided (a) such merger, consolidation or
transfer of assets is not principally for the purpose of transferring the leasehold estate created
hereby, and (b) such Permitted Transferee has net worth equal to Tenant as of the date of this
Lease For the purposes of this Section, an Affiliate means (i) a corporation controlled by,
controlling or under the common control with tenant (an “affiliated corporation”) or (ii) a
partnership or joint venture in which Tenant or an affiliated corporation owns at least 30% of the
general partnership or joint venture interests therein and Tenant or such affiliated corporation of
Tenant has actual control of such partnership or joint venture. Without limiting the generality of
the foregoing, a corporation shall not be deemed controlled by another entity unless at least 30%
of each class of its outstanding capital stock is owned, both beneficially and of record, by such
entity and such entity has actual control of such corporation. The provisions regarding the
transfer of the capital stock of a corporate tenant set forth in Section 6 shall not apply to any
corporation where all of its outstanding capital stock is listed on a national securities exchange
(as defined in the Securities Exchange Act of 1934, as amended) or is traded in the “over the
counter” market with quotations reported by the National Association of Securities Dealers.




          6.2 In the event that Tenant should desire to sublet the Premises or any part thereof, or assign this
Lease, Tenant shall provide Landlord with written notice of such desire at least sixty (60) days in
advance of the proposed effective date of such subletting or assignment. Such notice shall include:
(i) the name of the proposed sublessee or assignee, (ii) the nature of business to be conducted by
the proposed sublessee or assignee in the Premises, (iii) the terms and conditions of the proposed
assignment or sublease including but not limited to a detailed description of all compensation in
cash or otherwise which Tenant would be entitled to receive in connection with such assignment or
sublease, and (iv) the most recent financial statements or other financial information concerning the proposed sublessee or assignee as Landlord may require.
At any time within twenty (20) days following receipt of Tenant’s notice, Landlord may by written
notice to Tenant elect to: (i) terminate this Lease as to the space affected by the proposed
subletting or assignment, effective ninety (90) days from the date of Landlord’s notice, (ii)
consent to the proposed subletting of the Premises or assignment of this Lease or (iii) disapprove
of the proposed subletting or assignment. Landlord may elect to terminate this Lease as to the
space affected by the proposed assign or subletting in its sole and absolute discretion. If
Landlord does not elect to terminate this Lease, however, Landlord shall not unreasonably withhold
its consent to a proposed subletting or assignment. Without limiting other situations in which it
may be reasonable for Landlord to withhold its consent to any proposed assignment or sublease,
Landlord and Tenant agree that it shall be reasonable for Landlord to withhold its consent in any
one or more of the following situations: (i) in Landlord’s reasonable judgment, the proposed
subtenant or assignee or the proposed use of the Premises would detract from the status of the
Building as a first-class office building or would generate foot traffic or density materially in
excess of the amount generated by Tenant’s business or would otherwise be in





21









 







excess of that
customary for the Building or would impose a materially greater load upon elevator, janitorial,
security or other services than is generated by Tenant’s business or would otherwise in excess of
that be customary for the Building; (ii) in Landlord’s reasonable judgment, the financial worth of
the proposed subtenant or assignee does not meet the credit standards applied by Landlord in
considering other tenants under leases with comparable terms, or Tenant shall have failed to
provide Landlord with reasonable proof of the financial worth of the proposed subtenant or
assignee; (iii) in Landlord’s reasonable judgment, the business history and reputation in the
community of the proposed subtenant or assignee does not meet the standards applied by Landlord in
considering other tenants in the Building; or (iv) the proposed subtenant or assignee shall be a
then existing or prospective tenant of the Building, provided that in any event Landlord shall be
entitled to exercise its right of termination in lieu of consenting to a transfer, as set forth
above. Subject to obtaining Landlord’s consent in accordance with the requirements of this
Section, in order for any assignment or sublease to be binding on Landlord, Tenant must deliver to
Landlord, promptly after execution thereof, an executed copy of such sublease or assignment whereby
the sublessee or assignee shall expressly assume all obligations of Tenant under this Lease as to
the portion of the Premises subject to such assignment or sublease. Any purported sublease or
assignment will be of no legal force or effect unless and until the proposed sublease has been
consented to, in writing, by Landlord and a fully executed copy thereof has been received by
Landlord.




          6.3 Landlord and Tenant agree that fifty percent (50%) of any Rent or other consideration
received or to be received by or on behalf of or for the benefit of Tenant as a result of any
assignment or subletting, in excess of the Additional Rent, Base Rent and Operating Costs and Real
Estate Taxes which Tenant is obligated to pay Landlord under this Lease (prorated to reflect
obligations allocable to that portion of the Premises subject to such sublease or assignment), and
after deducting reasonable assignment or subletting fees, which will include, but are not limited
to marketing costs, legal fees, brokerage fees, construction costs and other leasing concessions,
shall be payable to Landlord as Additional Rent under this Lease without affecting or reducing any
other obligation of Tenant hereunder (“Excess Rent”). Landlord’s share of such Excess Rent or
other consideration shall be paid by the Tenant directly to Landlord at the same time as such rent or other consideration is paid to Tenant. Concurrently with the
payment of Excess Rent by Tenant to Landlord, Tenant shall furnish Landlord with a complete
statement, certified by an independent certified public accountant of Tenant’s choice, setting
forth in detail the computation of any and all Excess Rent.




          6.4 Regardless of Landlord’s consent, no subletting or assignment shall release Tenant or any
guarantor of Tenant, of its or their obligations, or alter the primary liability of Tenant and its
guarantor(s), if any, to pay Rent and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of payments by Landlord from any other person shall not be deemed to be
a waiver by Landlord of any provision hereof. Consent to one assignment or subletting shall not be
deemed consent to any subsequent or further assignment, subletting, hypothecation or third party
use or occupancy. In the event of default by any assignee or successor of Tenant in the
performance of any of the terms hereof, Landlord may proceed directly against Tenant and/or its
guarantor(s), if any, without the necessity of exhausting remedies against said assignee or
successor. Landlord may consent to subsequent assignments or subletting of this Lease or
amendments or modifications to this Lease with assignees of Tenant,





22









 







without notifying Tenant and/or
its guarantor(s), if any, or any successor of Tenant, and without obtaining its or their consent
thereto and such action shall not relieve Tenant and/or its guarantor(s), if any, or any successor
of Tenant of liability under this Lease.




          6.5 Tenant shall pay to Landlord, as Landlord’s cost of processing each proposed assignment or
subletting, whether or not Landlord consents to the proposed transfer, and whether or not an
assignment or sublease is eventually entered into, an amount equal to the sum of: (i) Landlord’s
attorneys’ and other professional fees up to the amount of $2,500.00; and (ii) the amount of all
actual costs and expenses incurred by Landlord arising from the assignee or sublessee taking
occupancy of the subject space (including, without limitation, costs of freight elevator operation
for moving and furnishings and trade fixtures, janitorial and cleaning service, additional security
services, and rubbish removal service).




          6.6 Subject to Section 23 of this Lease, Landlord shall have the unconditional right to sell,
encumber, pledge, convey, transfer, and/or assign any and all of its rights and obligations under
the Lease without the consent of or notice to Tenant or any guarantor(s) of Tenant’s obligations
hereunder.




     7. INTENTIONALLY OMITTED.



     8. MAINTENANCE OBLIGATIONS.



          8.1 By Tenant. Subject to Landlord’s obligation to provide certain janitorial
services to the Premises under Section 16.5 (Other Services), Tenant will, at its sole cost, keep
the Premises and the fixtures, improvements, equipment, and finishes and any Alterations therein in
clean, safe, and sanitary condition and in good order and repair, will take good care thereof
(collectively, the “Maintenance Activities” and, individually, the “Maintenance Activity”) and will
cause no waste or injury thereto. As part of the Maintenance Activities, Tenant shall be solely
responsible to maintain and repair such finishes and equipment, including kitchen appliances and fixtures, modular furniture, showers and bathroom fixtures, supplemental
air-conditioning equipment, computers, or any other type of equipment or improvements, together
with related plumbing, electrical, or other utility services in the Premises whether installed by
Tenant or by Landlord on Tenant’s behalf and whether installed at Tenant’s or Landlord’s cost, and
Landlord has no obligation in connection therewith.




          Tenant shall use Union Labor (as defined in Section 9.7 below) for all Maintenance Activities
(the “Maintenance Labor Covenant”), except that the Maintenance Labor Covenant shall not apply to
the services for the installation, operation, maintenance, and repair of personal property owned
exclusively by Tenant (e.g., computer systems, telephones, and furniture other than modular
furniture) or for any of Tenant’s specialized equipment. To the extent Union Labor is not
available in the market to perform a specific Maintenance Activity, Tenant shall not be in default
of the Maintenance Labor Covenant. Tenant shall (a) include the Maintenance Labor Covenant in each
of its service contracts, (b) provide such evidence as Landlord may reasonably require, from time
to time during the Term, that the Maintenance Labor Covenant is being fully and faithfully observed
and Tenant shall include the obligation to provide such evidence in each service contract entered
into by Tenant for such services, and (c) incorporate the foregoing requirements in any sublease,
license, or occupancy agreement relating to all or any part of the Premises.




23









 








          8.2 By Landlord. Landlord shall keep and maintain the exterior and demising walls,
foundations, roof, and common areas that form a part of the Building and the Project, and the
mechanical, electrical, HVAC, and plumbing systems, pipes, and conduits that are provided by
Landlord in the operation of the Building or, on a non-exclusive basis, the Premises in clean,
safe, sanitary, and operating condition in accordance with standards customarily maintained by
Comparable Buildings, and will make all required repairs thereto, the costs of all of which shall
be included as Operating Costs unless expressly excluded in Section 4.1.3 of this Lease. All
common or public areas of the Project (including, but not limited to, the lobby areas and the
exterior landscaping) shall be maintained by Landlord in accordance with standards customarily
maintained by Comparable Buildings. All costs associated with this Section 8.2 shall be included
in operating costs, unless expressly excluded in Section 4.1.3. Tenant shall promptly provide
Landlord with written notice of any defect or need for repairs in or about the Building of which
Tenant is aware; provided, however, Landlord’s obligation to repair hereunder shall not be limited
to matters of which it has been given notice by Tenant.




     9. ALTERATIONS AND MECHANICS’ LIENS.



          9.1 General. Tenant shall not make or permit any improvements, additions, alterations,
decorations, substitutions, replacements, or modifications, structural or otherwise, to the
Premises or to the Premises (the “Alterations”) without the prior written consent of Landlord in
each instance. Tenant shall not under any circumstances be permitted to make Alterations anywhere
on the Building. Alterations include, without limitation, the Tenant Improvements, pursuant to
the Work Agreement, the installation or modification of floor coverings, partitions, doors, air
conditioning ducts, plumbing, condenser water equipment, piping, lighting fixtures, wiring of any
kind, ceilings and wall coverings. If Landlord consents to any Alterations, Landlord will impose requirements listed in Section 9.7 (Performance of Work) and may impose any
other conditions it deems reasonably appropriate, including, but not limited to, the approval of
plans and specifications (which approval shall not be unreasonably withheld, conditioned, or
delayed), supervision of the work by Landlord’s architect or contractor, and satisfactory evidence
from Tenant of Tenant’s ability to pay for such Alterations. If any Alteration is made without the
prior written consent of Landlord, Landlord may correct or remove the Alteration at Tenant’s sole
cost and expense, and all costs and expenses incurred by Landlord in connection with such
correction or removal shall be payable as Additional Rent on demand by Landlord.




          9.2 Conditions to Consent. As a condition precedent to obtaining Landlord’s written
consent for any Alterations, (a) Landlord may require Tenant to pay Landlord a reasonable fee to
reimburse Landlord for overhead and administrative costs Landlord incurs in connection with its
supervision of Tenant’s Alterations (not to exceed five percent (5%) of the cost of such
Alterations), and (b) Tenant agrees to obtain and deliver to Landlord conditional and unconditional
waivers of mechanics’ liens on the Land and Building for all work, labor, and services to be
performed, and materials to be furnished, by Tenant’s contractors and suppliers for the
Alterations. All Alterations must conform to all Applicable Laws, must conform harmoniously with
the Building’s design and interior decoration, and, except as approved by





24









 







Landlord for a proposed
Alteration, must not require any changes to or modifications of any of the Building’s structural
components or mechanical, electrical, HVAC, plumbing, or other systems. Tenant shall keep the
Building and Project lien free in the construction of any Alterations.




          9.3 Inspection of Work. Tenant will allow Landlord or its designated agent to inspect
the work from time to time during the period of construction of all Alterations. Such inspections
shall be performed promptly without material interference with Tenant’s construction of its
Alterations. Landlord may stop work on any Alterations if Landlord or its designated agent
determines that the work is not being done: (a) in a good and workmanlike manner, (b) in compliance
with all Applicable Laws, (c) according to the plans and specifications provided to and approved by
Landlord, (d) using new materials and installations, at least equal in quality to the original
Building materials and installations, free from any defects or deficiencies, (e) in a way that
avoids interfering with, or disturbing the quiet enjoyment of, the other tenants, (f) with due
diligence, (g) in a manner to keep the Premises lien free. If Landlord stops such work, Tenant
will promptly correct the problem(s) that gave rise to the work stoppage. If Tenant fails to
correct such problem(s) within a time period Landlord determines to be reasonable, then Landlord
may, at its sole option, correct the problem(s), complete the Alterations, and Tenant will be
liable for the costs of such action as Additional Rent. On completion of any Alterations, Tenant
will (i) deliver to Landlord complete as-built mylar drawings or CAD drawings of the Alterations,
and (ii) furnish “as built” plans and specifications for all Alterations within a reasonable period
of time after completion of the Alterations, and pay to Landlord or its designated agent as
Additional Rent a reasonable fee for updating the master reproducible Building blueprint to show
the Alterations.




          9.4 Indemnification. Any Alterations will be made on Tenant’s behalf and not on
Landlord’s behalf. Tenant will indemnify, hold harmless, and defend Landlord from and against any loss, damage, lien or cost (including reasonable attorneys’ fees and all court costs)
Landlord incurs that may or might arise because of the making of or removal of any Alterations. If
any Alteration is made without Landlord’s prior written consent, Landlord may correct or remove the
same, and Tenant will be liable for any loss, damage, or cost (including reasonable attorneys’ fees
and all court costs) Landlord incurs to perform this work.




          9.5 Title to Alterations. All Alterations (including flooring, wall-to-wall carpet
and wall covering) will become, at Landlord’s election, immediately upon completion of their
installation Landlord’s property without payment therefore by Landlord and will remain on and be
surrendered with the Premises as a part thereof at the end of the Term; provided, however, that if
Tenant is not in default in the performance of any of its obligations under this Lease, then,
before the Term of this Lease ends, Tenant may remove, at Tenant’s sole cost, all movable
furniture, furnishings, or equipment not affixed to or in the Premises. To the extent Landlord
does not elect that any of the Alterations (including any vaults, safes, file systems, raised
floors, cabling, wiring, or interior staircases between floors) remain on and be surrendered with
the Premises at the end or termination of the Term, Tenant will, at its sole cost, remove the same,
restore the affected area to the condition existing before the construction or installation of any
such Alteration, and repair any damage caused by such removal. Landlord shall make its election
whether the Alterations are to be removed at the end of the Term, or remain in the





25









 







Premises, at the
time Landlord provides its written consent to such Alterations. If Tenant fails to remove any such
Alteration (which Tenant is required to remove), to restore and repair the affected area, or repair
any damage caused by any such removal, Landlord may undertake such removal, restoration, and repair
at Tenant’s sole cost and Tenant will reimburse Landlord for the cost thereof as Additional Rent,
together with any damages (including reasonable attorneys’ fees and all court costs) that Landlord
may sustain because of such default by Tenant.




          9.6 Contractors and Performance of Work. If Landlord consents to Alterations by
Tenant, Landlord must approve all contractors and subcontractors that Tenant proposes to use for
the Alterations, which approval may be granted or withheld in the sole and absolute subjective
discretion of Landlord. Tenant, or its contractors and subcontractors, as Landlord may direct,
will provide such insurance, bonding, and/or indemnifications of Landlord as Landlord may
reasonably require and will comply with any rules and regulations applicable to Alterations as
Landlord may promulgate from time to time including at a minimum the “Performance of Work” clause.
Before undertaking any Alterations, Tenant will furnish to Landlord duplicate original policies or
certificates thereof of worker’s compensation insurance (covering all persons to be employed by
Tenant and Tenant’s contractors and subcontractors in connection with such Alterations), builder’s
all-risk insurance, and commercial general liability insurance (including reasonable property
damage coverage) in such form, with such companies, for such periods, and in the amounts and
deductibles equal to that Tenant is required to maintain under Section 12 (Insurance), naming
Landlord, its management agent and any Mortgagee (as defined below) as additional insureds. Tenant
shall strictly comply with the Conditions for Construction attached hereto as Exhibit F,
and shall cause its contractor to strictly comply with the same.




          9.7 Performance of Work. In addition to any other conditions contained herein with
respect to Tenant making any Alterations, before making any Alterations, Tenant shall (a) deliver
to Landlord evidence satisfactory to Landlord that Tenant shall cause the Alterations
(“Construction Activities”) to be performed by contractors who shall employ craft workers who are
members of unions that are affiliated with The Building and Construction Trades Department, AFL-CIO
(“Union Labor”), and such work shall conform to traditional craft jurisdictions as established in
the area (the “Construction Labor Covenant”), (b) include the Construction Labor Covenant in each
of its contracts for the Construction Activities, (c) provide such evidence as Landlord may
reasonably require, from time to time during the course of the Construction Activities, that the
Construction Labor Covenant is being fully and faithfully observed and Tenant shall include the
obligation to provide such evidence in each contract entered into by Tenant for the Construction
Activities, and (d) incorporate the foregoing requirements in any sublease, license, or occupancy
agreement relating to all or any part of the Premises. Tenant shall require that all contractors
and subcontractors, of whatever tier, performing Construction Activities agree to submit all
construction jurisdictional disputes (i.e., disputes about which union is the appropriate union to
perform a given contract) to final and binding arbitration through the procedures of the jointly
administered “Plan for the Settlement of Jurisdictional Disputes in the Construction Industry,” a
dispute resolution plan established and administered by The Building and Construction Trades






26









 







Department, AFL-CIO, and various construction industry employer associations. If a resolution to a
construction-related jurisdictional dispute cannot be obtained through The Building and
Construction Trades Department, AFL-CIO, contractors and subcontractors, of whatever tier, shall
agree to submit all such disputes to final and binding arbitration procedures to be administered by
the American Arbitration Association (“AAA”) and in conformity with AAA’s Commercial Arbitration
Rules, Expedited Procedures, with an arbitrator who is an experienced labor arbitrator and is a
member of the National Academy of Arbitration.




          9.8 Mechanics’ Liens. Tenant shall keep the Premises, Buildings and Project free from
any liens arising out of any work performed, materials furnished or obligations incurred by Tenant,
including but not limited to mechanic liens, materialman liens, or other liens of any character,
type or nature whatsoever. Should Tenant fail to remove any such lien within five (5) business
days of notice to do so from Landlord, and without waiving its rights based on such breach,
Landlord may, in addition to any other remedies, record a bond pursuant to California Civil Code
Section 3143 and all amounts incurred by Landlord in so doing shall become immediately due and
payable by Tenant to Landlord as Additional Rent. Furthermore, without waiving any rights based on
such breach, Landlord may pay and satisfy any such liens, without inspection, and in such an event,
the sums so paid by Landlord shall be due and payable by Tenant immediately, with interest from the
date paid by Landlord, through the date Tenant pays Landlord, at the maximum interest rate
allowable by Applicable Law. All sums paid pursuant to the preceding sentence by Landlord shall be
due and payable as Additional Rent. Landlord shall have the right to post and keep posted on the
Premises any notices that may be provided by law or which Landlord may deem to be proper for the
protection of Landlord, the Premises and the Building from such liens. And any and all reasonable
attorneys’ fees incurred by Landlord in connection with any liens allowed to be taken against the
Premises on the Building by Tenant, shall be recoverable by Landlord as Additional Rent.




          Tenant agrees to indemnify, defend and hold Landlord harmless from and against any claims,
demands, causes of action, damages, judgments or liabilities for mechanics’, materialman’s or other
liens in connection with any Alterations, repairs or any work performed, materials furnished or
obligations incurred by or for Tenant.




          9.9 Government Health and Safety Requirements. If (a) the insurance services office
or any other similar body or any governmental authority requires that any specific system,
equipment, or other health or safety item or procedure, including a sprinkler system, be installed
in or implemented for the Building or the Premises, or that any changes, modifications, alterations
(including sprinkler heads or other equipment) be made or supplied because of Tenant’s business or
its use of the Premises, or that the location of partitions, trade fixtures, or other contents of
the Premises be changed or modified, or (b) any such installations, changes, modifications,
alterations, additional sprinkler heads, or other equipment become necessary to prevent the
imposition of a penalty or charge against the full allowance for such a system in the fire
insurance or other insurance rates as fixed by such office, or by any fire or other insurance
company, Tenant will at Tenant’s sole cost (provided such requirements are not the result of
Landlord’s acts or omissions), promptly make and supply such installation, changes, modifications,
alterations, additional sprinkler heads, or other equipment at its sole cost and at the direction
and under the supervision of Landlord.




27









 








          9.10 Telecommunications Carrier’s Access. Tenant’s right to select and use a
telecommunications and data carrier (the “Carrier”) shall be conditioned on the execution by the
Carrier a license agreement, in the form used by Landlord from time to time, pursuant to which
Landlord shall grant to the Carrier a license (which license shall be coextensive with the rights
and privileges granted to Tenant under this Lease) to install, operate, maintain, repair, replace,
and remove cable and related equipment within the Premises and specified vertical and horizontal
pathways within the Building but outside of the Premises that are necessary to provide
telecommunications and data services to Tenant at the Premises.




               9.10.1 No Exclusive Rights. The license contemplated herein to be granted to the
Carrier shall permit the Carrier to provide services only to Tenant and not to any other tenants or
occupants of the Building and shall require all of the Carrier’s equipment (other than connecting
wiring) to be located in the Premises. The license shall not grant an exclusive right to Tenant or
to the Carrier. Landlord reserves the right, at its sole and absolute subjective discretion, to
grant, renew, or extend licenses to other telecommunications and data carriers for the purposes of
locating telecommunications equipment in the Building that may serve Tenant or other tenants or
occupants in the Building.



               9.10.2 No Greater Rights. Except to the extent expressly set forth in this Lease,
nothing in this Lease shall grant to the Carrier any greater rights or privileges than Tenant is
granted pursuant to the terms of this Lease or diminish Tenant’s obligations or Landlord’s rights
hereunder.



               9.10.3 Tenant Ensures Carrier’s Compliance. Tenant shall be responsible for ensuring
that the Carrier complies with the terms and conditions of the license agreement relating to the
use of the Premises or the making of any physical Alterations imposed on Tenant under this Lease to
the extent the Carrier operates or maintains any equipment or delivers any services in or to the
Premises. Any failure by the Carrier to observe and comply with such terms, conditions,
agreements, and covenants on behalf of Tenant, to the extent the Carrier operates or maintains any
equipment or delivers any services in the Premises or other portions of the Building, shall be an
Event of Default under this Lease.



     10. SIGNS; FURNISHINGS.



          10.1 Signs; Directory. Tenant may not inscribe, paint, affix, or display any sign,
advertisement, or notice on any part of the outside or the inside of the Building or within the
Premises if the same is visible from outside of the Premises, except as otherwise provided herein.
If any such sign, advertisement, or notice is nevertheless exhibited by Tenant, Landlord may remove
the same and Tenant will be liable for any costs (including reasonable attorneys’ fees and all
court costs) as Additional Rent Landlord incurs in such connection. Landlord will post nameplates
identifying Tenant on the Building directory (or displayed electronically) and on the suite entry
door(s) of the Premises (or adjacent to the suite door), in such places, number, size, color, and
style as Landlord determines. Such nameplates and letters will conform harmoniously with the
Building’s design and interior decoration, and shall be standardized for all tenants. After the
Lease Commencement Date Landlord will make, in its sole and absolute discretion and at Tenant’s
sole cost, any additions or changes for Tenant either to the Building




28









 







directory listing or the
nameplate on or adjacent to the suite entry door(s) of the Premises. Landlord may prohibit any
advertisement of Tenant in, on, or about the Building or naming the Building or its address that in
Landlord’s opinion tends to impair the reputation of the Building or its desirability as a
high-quality building for offices for financial, professional services, insurance, and other
institutions of similar kind, and, on written notice from Landlord, Tenant will immediately refrain
from and discontinue any such advertisement. Directory listing and/or signs for approved assignees
or approved subtenants will be at Landlord’s sole and absolute subjective discretion based on the
availability of space. Tenant acknowledges that it has been provided with the Dublin Corporate
Center Signage Program (the “Signage Program”) prior to execution of the Lease.




          10.2 Monument Signage. Tenant shall have the right provided it occupies one hundred
(100%) percent of the Premises, to install, at its sole cost and expense, and subject to Landlord’s
reasonable consent, a monument sign on the existing Building monument. Tenant’s monument signage
will be consistent and harmonious with other Tenants monument signage and the general design and
theme of the monument sign itself. The location of tenant’s sign panel on the monument and general
design shall be as depicted on Exhibit J to this Lease, to be approved by Landlord, such
approval not to be unreasonably withheld (subject to compliance with the Signage Program and all
applicable laws). Tenant shall be responsible for its pro-rata share of the lighting, operation
and maintenance, which is hereby approved by Landlord of the monument. For purposes of this
provision, Tenant’s pro-rata share shall be a ratio, the numerator of which is the area of Tenant’s
sign panel, and the denominator of which is the area of all tenant’s sign panels located on the monument. All such signage shall comply with all applicable
laws, the Signage Program, and Tenant shall obtain any and all approvals or permits required at its
sole cost and expense. Tenant shall remove its signage on such monument at its sole cost and
expense upon expiration or earlier termination of this Lease and repair any damage resulting
therefrom. Within fifteen (15) days of mutual execution of this Lease, Tenant shall present to
Landlord monument sign drawings for Landlord’s approval, not to be unreasonably withheld.
Landlord and Tenant agree that Landlord may withhold its consent if the proposed monument signage
does not comply with the Sign Program, or does not comply with all applicable laws.




          10.3 Building Signage. Tenant shall have the right, provided it occupies one hundred
(100%) percent of the Premises, to install at its sole cost and expense, and subject to Landlord’s
reasonable consent, Building signage on one (1) side of the Building; and in the size, color,
location and design depicted on Exhibit K to this Lease which is to be approved by
Landlord, such approval not to be unreasonably withheld (subject to compliance with the Signage
Program and all applicable laws). Tenant shall maintain and repair such sign at its sole cost and
expense, and will maintain the sign in a first class manner consistent with the standards of the
Building. Tenant shall remove such signage at its sole cost and expense upon expiration or earlier
termination of this Lease, and repair and damage resulting therefrom. All such signage shall
comply with all applicable laws, the Signage Program, and Tenant shall obtain any and all approvals
or permits required at its sole cost and expense. Within fifteen (15) days of mutual execution of
this Lease, Tenant shall present to Landlord Building sign drawings for Landlord’s approval, not to
be unreasonably withheld. Landlord and Tenant agree that Landlord may withhold its consent if the
proposed Building signage does not comply with the Sign Program, or does not comply with all
applicable laws.




29









 








          10.4 Moving of Furnishings. Landlord may prescribe the weight and position of safes
and other heavy equipment or fixtures. Tenant will repair, at its sole cost and under Landlord’s
direction, any damage or injury to the Premises or the rest of the Building caused by moving
Tenant’s property into, in, or out of the Premises, or due to the same being on the Premises. All
moving of furniture, equipment, and other material within any public area of the Building will be
at such times and conducted in such manner as Landlord may reasonably require in the interest of
all tenants within the Building and any restrictions on access to the loading dock area of the
Building.




     11. INSPECTION. Tenant will permit Landlord, or its representative, on reasonable
prior written notice (except in the case of an emergency when no such notice will be required), to
enter the Premises or the Premises, Building and Project at any reasonable time, without charge to
Landlord and without diminution of Rent payable by Tenant, to (a) examine, inspect, or protect the
Premises; (b) prevent damage to the Premises and/or to any other portion of the Building; (c)
alter, add to, improve, and repair the Building or the Premises as Landlord deems necessary or
desirable, or as any governmental authority may require, provided Landlord uses reasonable methods;
or (d) exhibit the Premises to prospective tenants, purchasers of the Building, or lenders (as to
prospective tenants only during the last year of the Term or Extension Period, as applicable).
None of the above will be construed as an actual or constructive eviction of Tenant. Landlord will
use commercially reasonable efforts to minimize disruption to Tenant’s business because of such activities, and unless doing so is impractical or unreasonable because of
an emergency, will notify Tenant that Landlord intends to enter the Premises.



     12. INSURANCE.



          12.1 General. Tenant may not conduct or permit to be conducted any activity nor place
any equipment in or about the Premises or the Project that will, in any way, increase the rate of,
or cause the cancellation of, any policy of insurance of any kind covering any or all of the
Project or any liability of Landlord in connection therewith. If any insurance company or the
applicable insurance rating bureau states that any increase in the rate of insurance is due to any
Tenant’s activity or equipment in or about the Premises or the Project, such statements will be
conclusive evidence that the increase in such rate is due to such activity or equipment and, as a
result thereof, Tenant will be liable for such increase and will reimburse Landlord therefore on
demand. Any such sum due Landlord will be Additional Rent payable hereunder. If any activity,
equipment, or improvement done, installed, or constructed by Tenant in or to the Premises violates
any requirements of Landlord’s insurer(s), Tenant will take prompt action to comply with such
requirements at Tenant’s sole cost.




          12.2 Coverages Tenant Required to Maintain. Tenant will maintain at its sole cost
throughout the Term the following:




               12.2.1 Liability. Commercial general liability insurance covering bodily injury,
property damage, and personal and advertising injury occurring within the Premises or arising out
of the use thereof by Tenant or its agents, employees, officers, or invitees, visitors, and guests
with limits of not less than Two Million Dollars ($2,000,000) per occurrence and Two



30









 




Million
Dollars ($2,000,000) general aggregate, Two Million Dollars ($2,000,000) products and completed
operations aggregate, and Two Million Dollars ($2,000,000) personal injury and advertising
liability aggregate. If this insurance applies to more than one location of the insured, then a
per location endorsement must be attached to the policy.




               12.2.2 Property. All risk property coverage or its equivalent form for the full
insurable replacement value of (a) all Tenant’s furniture, fixtures, equipment, personal property,
or other removable property or any Alterations made by Tenant under the provisions of this Lease,
and (b) all Non-Building Standard Improvements Landlord or Tenant installs in the Premises.



               12.2.3 Business Income. Business Income insurance of not less four and half million
dollars ($4,500,000.00). The term “Business Income” means (a) net income, net profit, or loss
before income taxes that would have been earned or incurred; and (b) continuing normal operating
costs, including payroll, incurred.



               12.2.4 Worker’s Compensation. Worker’s compensation insurance in accordance with the
Applicable Laws, and employer’s liability insurance with a limit of at least Five Hundred Thousand
Dollars ($500,000) for bodily injury by accident (per accident), Five Hundred Thousand Dollars ($500,000) for bodily injury by disease (policy limit), and Five Hundred
Thousand Dollars ($500,000) for bodily injury by disease (each person).



               12.2.5 Excess Liability. Excess Liability insurance in an amount of not less than
Five Million Dollars ($5,000,000).



          12.3 Requirements. Tenant’s insurance will be underwritten by a company or companies
licensed to do business in the state in which the Premises are located and rated not lower than
“Class A-VIF,” as rated in the most recent edition of the Alfred M. Best Company, Inc.’s Key Rating
Guide for insurance companies, and will be in minimum amounts as set forth in Section 12.2
(Coverages Tenant Required to Maintain). Such liability insurance policy will name Landlord and
Landlord’s designated management agency (and, at Landlord’s request, the Mortgagee) as additional
insureds, and will contain an endorsement that such insurance will remain in full force and effect
notwithstanding that the insured has waived its right of action against any party before the
occurrence of a loss. A current certificate of insurance and endorsements (in form and substance
acceptable to Landlord) from such insurer will be delivered to Landlord’s agent not less than
thirty (30) days before the Lease Commencement Date and renewals thereof will be delivered to
Landlord’s agent not less than thirty (30) days before the expiration of any such policy. Each
policy will contain an endorsement prohibiting its cancellation before the expiration of thirty
(30) days after written notice to Landlord or its Mortgagee of such proposed cancellation and will
include an endorsement stating that such insurance will remain in full force and effect
notwithstanding the fact that the insurer has waived its right of subrogation before the occurrence
of a loss.




          12.4 Increase in Insurance. The amounts of insurance coverage Tenant is required to
maintain under this Lease are subject to review at the end of each two (2) year period after the
Lease Commencement Date. At each review, if necessary to maintain the same level of




31









 







coverage that
existed on the Lease Commencement Date, the amounts of coverage shall be increased to the amounts
of coverage carried by prudent landlords and tenants of Comparable Buildings.




          12.5 Mutual Waiver of Subrogation. Whenever (a) any loss, damage, or cost resulting
from fire, explosion, or any other casualty or occurrence is incurred by either of the parties to
this Lease, or anyone claiming by, through, or under it in connection with the Premises, and (b)
such party is then covered in whole or in part by insurance against such loss, damage, or cost and
is required under this Lease to be so insured, then the party so insured (or so required) releases
the other party from any liability such other party may have because of such loss, damage, or cost
the extent of any amount recovered because of such insurance (or that could have been recovered had
such insurance been carried as so required) and waives any right of subrogation that might
otherwise exist in or accrue to any person on account thereof.




          12.6 Landlord’s Insurance. Landlord will, as part of Operating Costs, keep the
Building (but not any of Tenant’s furniture, fixtures, equipment, personal property, or other
removable property or any Alterations, Non-Building Standard Improvements, or any other leasehold
improvements made in the Premises) insured against loss or damage caused by fire or other casualty (a “Casualty”), as any Mortgagee may from time to time require (or provide such
greater insurance coverage as Landlord may determine in its sole and absolute subjective
discretion). Landlord will, as part of Operating Costs, maintain rental interruption insurance in
commercially reasonable amounts.




     13. INDEMNITY. Except as may be the direct result of Landlord’s gross negligence or
willful misconduct, and regardless of Landlord’s insurance coverage, Tenant will indemnify, hold
harmless, and defend (with counsel satisfactory to Landlord) Landlord, its members (and the members
of its members), and their respective officers, directors, agents, employees, and invitees
(collectively, the “Indemnified Parties”) from any loss, damage, liability, or cost (including
reasonable attorneys’ fees and all court costs) incurred by the Indemnified Parties and occasioned
by or in any way related to or based on (a) the use and occupancy of the Premises or the Project by
Tenant, its agents, employees, invitees, and any other persons who gain access to the Premises,
including any violation of the Americans with Disabilities Act and any zoning, health,
environmental or other Applicable Laws of any governmental authority, (b) the negligence or the
intentionally wrongful acts or omissions of Tenant, its agents, employees and invitees, (c) any
default, breach or violation of this Lease by Tenant, its agents, employees and invitees, (d)
injury or death to individuals or damage to property sustained in or about the Premises, Building
or Project, or (e) injury or death to individuals or damage to property sustained in or about the
Premises, Building or Project and incurred in connection with Tenant and/or its agent’s
construction of the Tenant Improvements.



     14. LIABILITY OF LANDLORD.



          14.1 General. Except for damages directly caused by Landlord’s gross negligence or
willful misconduct, Landlord will not be liable to Tenant, its employees, agents, business
invitees, licensees, customers, clients, family members, guests, or trespassers for any damage,
compensation, or claim arising from (a) the repairing of any portion of the Building or





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Project,
(b) any interruption in the use of the Premises, Building or Project, (c) accident or damage
resulting from the use or operation (by Landlord, Tenant, or any other person or persons
whatsoever) of elevators, escalators, or heating, cooling, electrical, or plumbing equipment or
apparatus, (d) the termination of this Lease because of the destruction of the Premises or
Building, or a taking or sale in lieu thereof by eminent domain, (e) any Casualty, robbery, theft,
criminal act, or unexplained disappearance, (f) any leakage in any part of the Premises or the rest
of the Building (including areas occupied by other tenants and occupants of the Building), or from
water, rain, or snow that may leak into, or flow from, any part of the Premises or the rest of the
Building, or from drains, pipes or plumbing work in or about the Building, or (g) any other cause
whatsoever. Notwithstanding anything contained in this Lease to the contrary, in no event will
Landlord have any liability to Tenant for any claims for the interruption of or loss to Tenant’s
business or for any indirect damages or consequential losses.




          14.2 No Reduction. Except as provided in Section 17 (Damage by Fire or Casualty),
Tenant may not abate or reduce Base Rent or Additional Rent as a result of any of the occurrences
set forth in Section 14.1 (General), nor will any of such occurrences release Tenant from its
obligations hereunder or constitute an eviction. Notwithstanding any provisions in this Lease to the contrary, any goods, property, or personal effects stored or placed by Tenant in or
about the Premises or the rest of the Building or the Project will be at the sole risk of Tenant,
and Landlord will not be liable to Tenant for any loss or damage thereto.




          14.3 Package Deliveries. Landlord’s employees are prohibited from receiving any
packages or other articles delivered to the Building for Tenant, and if any such employee receives
any such package or articles, such employee will be the agent of Tenant and not of Landlord.
Landlord will not be obligated to provide or maintain any security patrol or lobby host. However,
if Landlord elects to provide either of the foregoing, Tenant agrees that Landlord will not be
responsible for the quality of such of the foregoing that may be provided hereunder or for damage
or injury to Tenant, its employees, invitees or others due to the failure, action or inaction of
either of same.




     15. TENANT’S EQUIPMENT.



          15.1 General. Tenant may not install or operate in the Premises any electrically
operated equipment or other machinery, other than standard desk top office equipment ordinarily
found in the Comparable Buildings, without first obtaining Landlord’s prior written consent, which
consent shall not be unreasonably withheld, delayed, or conditioned.




          15.2 Excessive Electricity Consumption. Tenant shall have electricity consumption of
three and a half (3.5) watts per square foot of the Premises (exclusive of electrical power for
HVAC and lights in the Premises) during the Building Hours at no additional charge. Landlord may
charge Tenant for the cost of Tenant’s electricity consumption in excess of three and a half (3.5)
watts per square foot of the Premises (based on reasonable evidence that Tenant is exceeding the
3.5 watt per square foot limitation)(exclusive of electrical power for HVAC and lights in the
Premises) during Business Hours and for any electrical consumption not during Business Hours, and
for the cost of any additional wiring or other improvements to the Building as may be occasioned by
or required as a result of any such excess





33









 







use, but Landlord does not represent or warrant that
electricity capacity in excess of three and a half (3.5) watts per square foot of the Premises
(exclusive of electrical power for HVAC and lights in the Premises) will be available.




          15.3 Excessive Water Consumption. Tenant may not use or consume water other than for
drinking, lavatory, and toilet purposes, or in unusual quantities (of which fact Landlord will
reasonably judge), without first obtaining Landlord’s prior written consent, which consent shall
not be unreasonably withheld, delayed, or conditioned.




          15.4 Excessive Utilities Consumption. Tenant may not install any equipment of any
kind or nature whatsoever (including electric space heaters and supplementary air-conditioning
units) that will or may necessitate any changes, replacements, or additions to, or in the use of,
the water system, heating system, plumbing system, HVAC system, or electrical system of the
Premises or the rest of the Building. Landlord may condition its consent to Tenant’s request to
install or use any equipment or machinery or to consume excess utilities on Tenant’s agreement to
pay Additional Rent to compensate Landlord for any excess consumption of utilities and for the cost of additional wiring, piping, or other improvements to the Building
as may be occasioned by the operation of such equipment or machinery or by such excess use of
utilities. If any excessive consumption of any utilities occurs (including any consumption beyond
Building Hours), Landlord may require Tenant to install in the Premises (at Tenant’s sole cost and
in a location Landlord approves) meters or submeters to measure Tenant’s utility consumption for
the Premises or for any specific equipment causing excess consumption, as Landlord may require; in
which case, Tenant will maintain in good order and repair (and replace, if necessary) such meters
or submeters. If separate meters are installed to measure Tenant’s use of any utilities, then
Tenant will pay directly to the appropriate utility company the charges for such utilities. If
submeters are installed to measure Tenant’s consumption of any utilities, Tenant will pay to
Landlord as Additional Rent the costs of the same as well as a reasonable administrative processing
fee to defray the expenses incurred by Landlord in reading such submeters and in processing the
requisite invoices, within fifteen (15) days of its receipt of a bill therefore based on such
submeter readings.




          15.5 No Vibration. Tenant’s business machines and mechanical equipment that cause
noise or vibration that may be transmitted to the structure of the Building or to any space therein
to such a degree as to be objectionable to Landlord or to any tenant in the Building will be
installed and maintained by Tenant, at Tenant’s sole cost, on vibration eliminators or other
devices sufficient to eliminate such noise and vibration, which fact Landlord will reasonably
judge. Whenever heat generating machines or equipment are used in the Premises, Landlord may
require Tenant to install supplementary air conditioning units in the Premises and Tenant will pay
any cost associated therewith, including any cost to install, operate, and maintain them.




          15.6 Lien on Personal Property. Tenant hereby expressly grants to Landlord a security
interest in and an express contractual lien upon Tenant’s or any other party’s furniture,
furnishings, equipment, and articles of personal property of every kind and nature whatsoever
(“Personalty”), situated in or on the Premises, including all after-acquired Personalty (“Secured
Property”) to secure the performance by Tenant of its obligations under this Lease, if an Event of
Default occurs after all applicable notice and cure periods. The Secured Property will not be





34









 







removed from the Premises by Tenant without the prior written consent of Landlord until all Rents
then due to Landlord have first been paid, except for the sale of inventory in the ordinary course
of Tenant’s business so long as such inventory is replaced by Tenant. Tenant hereby appoints
Landlord as Tenant’s attorney-in-fact, and authorized Landlord to execute and to file financing
statements signed only by Landlord (as attorney-in-fact) covering such security or to otherwise
take such action as may be necessary to perfect such security interest and/or contractual lien..
Upon termination of this Lease, Landlord may, in addition to any other remedies, enter upon the
Premises and take possession of the Secured Property situated on the Premises without liability for
trespass or conversion, and sell the same with notice at public or private sale, with or without
having such property at the sale, at which Landlord or its assigns may purchase, and may apply the
proceeds thereof less any and all expenses connected with the taking of possession and sale of the
Secured Property, as a credit against any sums due by Tenant to Landlord. Any surplus will be paid
to Tenant provided Landlord has been paid in full, and Tenant agrees to pay any deficiency
forthwith, after demand. Landlord, at its option may foreclose the security interest and/or
contractual lien in the manner provided by Applicable Law. The security interest and contractual lien granted to Landlord is in addition to Landlord’s lien
that may now or at any time hereafter be provided by Applicable Law.




     16. SERVICES AND UTILITIES.



          16.1 Electricity. Landlord will furnish electricity to the Premises, subject to the
restrictions contained at Section 15.2 of this Lease.




          16.2 HVAC Service; Hours of Operation. Landlord will furnish air-conditioning or heat
(during those respective seasons of the year in which they are necessary) to or for the benefit of
the Premises during the Building Hours as, in Landlord’s reasonable judgment, is required for the
comfortable use and occupancy of the Premises. During Building Hours Landlord will provide
air-conditioning and heat based on standard electrical energy requirements of not more than an
average of three and a half (3.5) watts per square foot of the Premises (exclusive of electricity
for general power uses and lights in the Premises) and a human occupancy of not more than one
person for each 120 square feet of Gross Rentable Area of the Premises. Landlord reserves the
right to charge Tenant for air-conditioning or heat consumption in excess of such levels during
Building Hours. Landlord will operate the heating, ventilating, and air-conditioning (“HVAC”)
system in the most energy-efficient manner possible within the limits established in the Building
design, and according to any directive, policy, or request of a governmental authority. To control
electrical demand and energy consumption, Landlord may install a computerized energy-management
system that operates the HVAC system in on-off cycles. Extra hours of heating, ventilating, and
air-conditioning (i.e., all times other than during Building Hours) will be provided to Tenant on
Tenant’s request with at least 24 hours’ advance notice on a previous Business Day. Landlord will
charge Tenant for Landlord’s cost of such service based on Landlord’s estimate of additional
utility consumption and any other costs associated with such extra service, and Tenant will pay
such amount as Additional Rent within fifteen (15) days of its receipt of a bill therefore. As of
the date hereof, the estimated hourly cost per floor for HVAC service is an amount equal to Seventy
Five Dollars ($75.00), with a two (2) hour minimum charge. Such amount shall be subject to
periodic change based on actual costs incurred by Landlord from time to time.





35









 








          16.3 Lighting. Landlord will provide reasonably adequate electricity (not to exceed
three 3 watts per square foot of the Premises exclusive of electrical power for HVAC and general
power uses in the Premises) as is normal and customary in the Comparable Buildings. Landlord will
provide and install all original fluorescent tubes for those lighting fixtures within the Premises
that are building standard improvement lighting fixtures. Landlord will provide and install all
replacement tubes for the Building Standard Improvement lighting fixtures as part of the Operating
Costs. Tenant is required to provide and install, at Tenant’s sole cost, all bulbs and tubes for
other than Building Standard Improvement lighting fixtures.




          16.4 Elevator Service. Landlord will provide elevator service by automatically
operated elevators. Landlord may remove elevators from service as the same are required to move
freight, or to service or maintain the elevators and/or the Building; provided, however, that at
least one elevator will remain in service 24 hours per day, 7 days a week.




          16.5 Other Services. Landlord will (a) furnish cold water from public water mains for
normal drinking, lavatory, and toilet purposes drawn through fixtures Landlord installs, and hot
water for lavatory purposes from the regular Building supply, (b) provide reasonably adequate
lavatory supplies for public restrooms, (c) provide exterior window cleaning service and char and
janitorial service as is normal and customary in Comparable Buildings; provided, however, that char
and janitorial service required for any Non-Building Standard Improvements in the Premises, such as
glass partitions, wood flooring, kitchens, and private showers and restrooms, will be subject to
additional charges, and (d) provide char and janitorial services after 6:00 p.m. Monday through
Friday only, except Holidays.




          16.6 Interruptions. Landlord does not warrant that any utilities or services Landlord
supplies may not be interrupted or delayed. Landlord and its agents will not be liable for a
failure to furnish, or for delay or suspension in furnishing or providing, any of the utilities or
services Landlord is required to furnish or provide whether such failure is caused by breakdown,
maintenance, repairs, strikes, scarcity of labor and/or materials, acts of God, or any other cause
or reason whatsoever. If the Building equipment should cease to function properly, Landlord will
use commercially reasonable efforts to repair the same promptly. Landlord’s failure or inability
to furnish the utilities or services required under this Lease will not be construed as an
eviction, actual or constructive, of Tenant from the Premises and will not entitle Tenant to
terminate this Lease or to abate any Rent payable under this Lease, except as provided in the
following sentence. If, as a result of Landlord’s gross negligence or willful misconduct
(excluding a Force Majeure event), any utilities are not furnished to the Premises, rendering the
Premises, or any part thereof, unusable for a period of five (5) consecutive days, and the
interruption of such utilities is specific to the Project only, then Base Rent and Additional Rent
payable for such portion of the Premises which Tenant does not so use shall abate for the period
starting on the commencement of the sixth (6th) day and expiring on the date the
utilities are restored or Tenant is able to resume use of the Premises or such part thereof, as the
case may be.




          16.7 24/7 Access. Tenant will have access to the Premises 24 hours per day, 7 days
per week. Landlord will provide an electronic access system with computerized card





36









 







access at the
lobby entrance of the Building and controlled access to each floor of the Building through elevator
card access controls. Tenant shall be entitled to three (3) access cards per one thousand (1,000)
square feet of Gross Rentable Area of the Premises. Any additional or replacement cards shall be
at the then prevailing rate charged by Landlord. The current rate for access cards is ten dollars
($10.00) per card. On weekdays (excluding Holidays) after regular office hours, at approximately
6:00 p.m., access to the office space in the Building is intended to be electronically sealed until
7:00 a.m. the following weekday morning. During weekends and Holidays, the electronic security
system is intended to be in operation 24 hours a day. Landlord will provide Tenant, at Tenant’s
sole cost and as Additional Rent, any additional access control system or equipment Tenant desires
for the Premises. Landlord will not be liable for the functionality, quality, action, or inaction
of the Building access system or for any damage or injury to Tenant, its employees, invitees, or
others, or their property, resulting from any failure, action, or inaction of the Building access
system.




          16.8 Landlord’s Rights to Building Maintenance and Renovations. Landlord will have
the following rights to maintain, repair, and renovate the Building and Project:




               16.8.1 Routine Maintenance. To enter the Premises at any time, on reasonable prior
notice if possible, to perform routine maintenance and repairs.



               16.8.2 Alterations. To change or alter from time to time the arrangement and/or
location of public entrances, passageways, doors, common areas, Parking Areas, doorways, corridors,
elevators, stairs, toilets, and all other parts of the Building and Project, to add to the Building
and Project or areas of the Building and Project, and to change the name, street number, or
designation by which the Building and Project may be known.



               16.8.3 Renovation Program. To carry out a renovation program for the Building and
Project. In the performance of a renovation program in the Building, Project or Premises,
Landlord, its agents, contractors, and all persons retained in connection therewith, may enter the
Premises to perform renovation work after Building hours, on at least one (1) day’s notice. Tenant
will cooperate with Landlord in temporarily relocating furniture, fixtures, personal property, and
personnel as required to complete the renovation work in the Building. Any work Landlord performs
under this Section 16.8 will be with the minimum disruption practicable to Tenant’s occupancy, but
such work will not entitle Tenant to abate Rent or otherwise fail to perform its obligations
hereunder.



          16.9 Energy Conservation and Governmental Policies. Landlord will be deemed to have
observed and performed the terms and conditions to be performed by Landlord under this Lease,
including those relating to the provisions of utilities and services, if in so doing it acts
according to an Applicable Law, directive, policy, or request of a governmental authority in
respect of energy conservation or security.




     17. DAMAGE BY FIRE OR CASUALTY.



          17.1 General. If a Casualty partially damages or destroys the Premises, Landlord will
diligently proceed to fully repair and restore, at its own cost, the Building Standard






37









 







Improvements
(Exhibit I) located in the Premises substantially to their condition before the Casualty, subject
to the provisions of this Section 17 and if adequate insurance proceeds are available to Landlord.
Due allowance, however, will be given for the time required to adjust and settle insurance claims,
and for such other delays as may result from government restrictions, any controls on construction,
and for strikes, emergencies, and other conditions beyond Landlord’s reasonable control. Tenant
will diligently proceed to fully repair and restore, at Tenant’s sole cost, all Tenant Improvements
(except the Building Standard Improvements) and Alterations in the Premises to their condition
existing before their damage or destruction. If a Casualty partially damages or destroys the
Premises, this Lease will continue in full force and effect, but if the damage or destruction is
such so as to make the Premises or any substantial part thereof untenantable for ten (10)
consecutive Business Days after the Casualty and Tenant ceases to use such untenantable area, then
the Rent that Tenant is obligated to pay under this Lease will abate proportionately (based on the number of square feet made untenantable) as of the first Business Day
after the Casualty until the earlier of the date that Tenant again uses such space or the date that
the repair and/or restoration work that Landlord is obligated to perform hereunder has been
Substantially Completed. If Tenant, its agents, servants, or invitees cause such damage or
destruction, Tenant may not abate or reduce Base Rent.




          17.2 Casualty — Building. If a Casualty makes untenantable more than one-half (1/2)
of the Gross Office Rentable Area of the Building, then within sixty (60) days from the date of
such Casualty Landlord may terminate this Lease by notice to Tenant, specifying an effective date,
not less than twenty (20) days nor more than forty (40) days after the giving of such notice, on
which the Term will expire as fully and completely as if such date were the date herein originally
fixed for the expiration of the Term. If Landlord terminates this Lease pursuant to this Section
17.2, Base Rent will be apportioned as of the date of such termination.




          17.3 Casualty—Premises. If (a) a Casualty damages the Premises, (b) the damage to the
Premises is so extensive that the Premises are substantially untenantable, and (c) Landlord
determines in the exercise of its reasonable judgment that the repair and/or restoration work that
Landlord is obligated to perform hereunder cannot be substantially completed within one hundred
eighty (180) days from the date such work starts, then either Landlord or Tenant within sixty (60)
days from the date of such Casualty may terminate this Lease by notice to the other, specifying an
effective date, not less than twenty (20) days nor more than forty (40) days after the giving of
such notice, on which the Term will end as fully and completely as if such date were the date
originally fixed for the end of the Term. If either Landlord or Tenant terminates this Lease
pursuant to this Section 17.3, Rent will be apportioned as of the date of such Casualty.




          17.4 Casualty Near End of Term. If a Casualty makes eighty percent (80%) or more of
the Premises untenantable during the last six (6) months of the Term, Landlord or Tenant may
terminate this Lease if it notifies the other party within ninety (90) days after such Casualty and
specifies an effective date, not less than twenty (20) days nor more than forty (40) days after it
notifies the other party, on which date the Term will expire as fully and completely as if such
date were the date originally fixed for the Term to end. If either Landlord or Tenant terminates
this Lease pursuant to this Section 17.4, Base Rent will be apportioned as of the date of such
Casualty.





38









 








          17.5 Proceeds. The proceeds payable under all fire and other hazard insurance
policies Landlord maintains on the Building will belong to and are Landlord’s property, and Tenant
has no right to such proceeds. Tenant will look only to its own fire and hazard insurance policies
if Tenant’s personal property or any Non-Building Standard Improvements in the Premises (including
such portions of Tenant Improvements that constitute Non-Building Standard Improvements) are
damaged.




          17.6 Limitations. No compensation, claim or diminution of Base Rent and Additional
Rent will be allowed or paid by Landlord because of inconvenience, annoyance, or injury to business
arising from the necessity of repairing the Premises or any portion of the Building, however the necessity may occur. Notwithstanding the provisions of this Section 17, if
Landlord becomes obligated to repair the Premises, such repairs will be to only the Building
Standard Improvements located in the Premises, and not to any Alterations, Non-Building Standard
Improvements, or any other improvements in the Premises or Tenant’s furniture, fixtures, and
equipment, or Tenant’s other personal property. At Landlord’s sole option, Landlord may repair and
restore, on Tenant’s behalf, all (or any portion) of the Non-Building Standard Improvements and
Alterations in the Premises that Tenant is required to repair and restore pursuant to Section 17.1
(General), in which case, Tenant will remit to Landlord for such use all of its insurance proceeds;
provided, however, that Landlord will not be required to spend more on any such repair or
restoration than the amount of insurance proceeds Landlord actually receives from Tenant. Landlord
may require Tenant to pay Landlord a reasonable fee as Additional Rent to reimburse Landlord for
overhead and administrative costs Landlord incurs for any such repair or restoration Landlord
undertakes or supervises. Any Non-Building Standard Improvements, Alterations, or other
improvements Tenant replaces in the Premises will be of at least comparable quality to the items
damaged or destroyed.




     18. CONDEMNATION.



          18.1 General. If all or substantially all of the Premises are taken or condemned by
any governmental authority for any public or quasi-public use or purpose (including sale under
threat of such a taking) (a “Taking”), then the Term will end as of the date of the Taking, and all
Rent will be abated as of such date. If less than substantially all of the Premises is the subject
of a Taking, the Rent will be equitably adjusted as of the date of the Taking and this Lease will
otherwise continue in full force and effect. Notwithstanding the foregoing, if a Taking occurs of
so substantial a part of the Building that Landlord concludes, in its reasonable discretion, that
it is impracticable to continue to operate the Building, then Landlord, at its option, may end this
Lease by notifying Tenant and specifying a date not earlier than thirty (30) days after the date of
such notice as of which date this Lease will end.




          18.2 Proceeds. Tenant may not assert a claim against Landlord (or otherwise) for any
portion of the amount that may be awarded as damages as a result of any Taking or for the value of
any unexpired Term; provided, however, that Tenant may assert any claim that it may have against
the condemning authority for compensation for any fixtures owned by Tenant and for any relocation
costs compensable by Applicable Law, and receive such award therefor as may be allowed in the
condemnation proceedings, if such award is in addition to and stated separately from the award made
to Landlord for the Land and the Building or the part thereof so taken.





39









 








     19. DAMAGE CAUSED BY TENANT. Tenant will promptly notify Landlord of any injury or
damage to the Premises, Building or Project. Tenant will repair, at its sole cost at Landlord’s
direction and under Landlord’s supervision, all injury or damage Tenant or its agents, employees,
contractors, invitees, visitors, or licensees cause to the Premises, Building or Project; provided,
however, that if any such injury or damage is to any of the Building systems or structures,
including the mechanical, electrical, structural, HVAC, plumbing, elevator, sprinkler and/or
life/safety systems, Tenant may not make any repairs thereto, but Landlord may in its sole and absolute subjective discretion make any such repairs at Tenant’s sole cost. Tenant will pay to
Landlord any such cost Landlord incurs (in which event such cost will become Additional Rent
payable with the installment of Base Rent next becoming due under the terms of this Lease). If
Tenant fails to make any repairs it is required to make under this Lease, Landlord may, in its sole
and absolute subjective discretion, make such repairs or replacements. Tenant will pay to Landlord
any such cost Landlord incurs (in which event such cost will become Additional Rent payable with
the installment of Base Rent next becoming due under the terms of this Lease). The Additional Rent
referenced in this Section 19 will bear interest from the date Landlord incurs the costs to the
date paid by Tenant at the Default Rate. This provision will be construed as an additional remedy
granted to Landlord and not in limitation of any other rights and remedies that Landlord may have
in such circumstances.



     20. DEFAULT OF TENANT.



          20.1 Events of Default. Each of the following constitute an “Event of Default” and
breach of this Lease by Tenant:




               20.1.1 Monetary Default. If Tenant fails to pay by the due date the Base Rent or
Additional Rent, and Tenant fails to cure such nonpayment within three (3) days after receipt of
written notice from Landlord.



               20.1.2 Abandonment. If Tenant abandons or vacates the Premises.



               20.1.3 Failure to Take Possession. If Tenant falls to take possession of the Premises
within thirty (30) days after the date Landlord tenders possession of the Premises to Tenant.



               20.1.4 Other Defaults. If Tenant fails to observe or perform any of its other
obligations under the provisions of this Lease to be observed or performed by Tenant (except a
term, agreement, or condition, the observation or performance of which is otherwise dealt with in
this Section 20.1), and, such failure continues for a period of thirty (30) days after Landlord
gives Tenant written notice thereof.



               20.1.5 Bankruptcy. If Tenant makes any general assignment or general arrangement for
the benefit of creditors; if there is filed by or against Tenant a petition to have Tenant adjudged
a bankrupt or if a petition for reorganization or arrangement is filed under any



40









 




Applicable Law
relating to bankruptcy (unless, in the case of a petition filed against Tenant, the petition is
dismissed within sixty (60) days); if a trustee or receiver is appointed to take possession of all
or substantially all of Tenant’s interest in this Lease; if all or substantially all of Tenant’s
assets located at the Premises or Tenant’s interest in this Lease are attached, executed on, or
otherwise subjected to other judicial seizure, where such seizure is not discharged within thirty
(30) days; or if Tenant is generally not paying its debts as they become due; provided, however,
that in no event may this Lease be assigned or assignable by operation of law or by voluntary or
involuntary bankruptcy proceedings or otherwise, and in no event may this Lease or any rights or privileges hereunder be an asset of Tenant under any bankruptcy, insolvency,
reorganization, or other debtor relief proceedings.




               20.1.6 Chronic Default. If Tenant fails to pay the Base Rent or any Additional Rent
by the due date thereof more than two (2) times during any calendar year (even if Tenant cures each
such failure within the time provided in Section 20.1.1 [Monetary Default]).



               20.1.7 Assignment. If an assignment or sublease occurs in violation of any provision
contained in this Lease.



          20.2 Remedies. In addition to any other remedies available at Applicable Law or in
equity, Landlord will have the following rights: (a) to terminate this Lease and Tenant’s right to
possession of the Premises; or (b) to continue this Lease in full force and effect even though
Tenant may have defaulted in its obligations and abandoned the Premises.




               20.2.1 Lease Termination. In the event that Landlord elects to terminate the Lease
and Tenant’s right of possession of the Premises, then Landlord may recover from Tenant the
following: (i) the worth at the time of award of any unpaid Rent which had been earned at the time
of such termination; plus (ii) the worth at the time of award of the amount by which the unpaid
Rent which would have been earned after termination until the time of award exceeds the amount of
such Rent loss Tenant proves could have been reasonably avoided; plus (iii) the worth at the time
of award of the amount by which the unpaid Rent for the balance of the Term after the time of award
exceeds the amount of such Rent loss that Tenant proves could have been reasonably avoided; plus
(iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by
Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of
events would be likely to result therefrom including, without limitation, the unamortized portion
of the Tenant Work Allowance amortized over the Term together with Default Interest and the costs
or expenses as Landlord may incur or anticipate in connection with re-entering, ejecting, removing,
dispossessing, cleaning, reletting, altering, repairing, marketing, redecorating, subdividing, or
otherwise preparing the Premises for reletting, including brokerage and attorneys’ fees and court
costs; and (v) at Landlord’s election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by the Applicable Law.



               20.2.2 Lease Continuation. In the event Landlord elects to continue the Lease in full
force and effect even though Tenant may have defaulted in its obligations and abandoned the
Premises, then Landlord shall have the remedy available in Section 1951.4 of the California Civil
Code, including the right to collect rent each month as it becomes due, and may



41









 




recover from Tenant
all damages Landlord may sustain by reason of Tenant’s default, including the amount of damages set
forth in (i) and (ii) of Section 20.2.1 of this Lease and may enforce all other rights and remedies
under this Lease. In such event Tenant will have the right, unless Landlord elects to terminate
this Lease and Tenant’s right to possession of the Premises under Section 20.2.1 of this Lease to
transfer its interest in this Lease or the Premises as provided in Article 6 of this Lease. If
Landlord elects to terminate this Lease and Tenant’s possession of the Premises, Landlord at any
time thereafter may relet the Premises, or any part or parts thereof for a term or terms which may, at Landlord’s option, be less than, exceed or equal the period of the
remainder of the Term of this Lease. Landlord will receive the Rent from such reletting and will
apply the Rent during the term of this Lease as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant; second, to the payment of such expenses as Landlord may
have incurred in connection with re-entering, ejecting, removing, dispossessing, reletting,
altering, repairing, redecorating, subdividing, or otherwise preparing the Premises for reletting,
including brokerage and reasonable attorneys’ fees; and third, to the fulfillment of the terms,
covenants and conditions of this Lease to be performed by Tenant hereunder. Tenant hereby waives
all claims to the surplus, if any. Any deficiency will be calculated and paid monthly by Tenant.
Landlord will in no event be liable in any way whatsoever for the failure to relet the Premises or
in the event of such reletting for failure to collect the Rents reserved thereunder and any such
efforts to mitigate damages caused by Tenant’s default will not waive Landlord’s rights to recover
damages. Landlord is hereby authorized and empowered to make such repairs, alterations,
decorations, subdivisions, or other preparations for the reletting of the Premises as Landlord
deems fit, advisable or necessary, without in any way releasing Tenant from any liability under
this Lease.




               No re-entry, taking possession, acts of maintenance or preservation or effects to relet the
Premises by Landlord will be construed as an election on its part to terminate this Lease and
Tenant hereby specifically waives any Applicable Law, statute, rule, decree or judgment of any
court to the contrary. Notwithstanding any such re-entry without termination, Landlord reserves
the right to elect to terminate this Lease for such previous breach. If Landlord elects to
terminate this Lease and Tenant’s possession of the Premises, Landlord and Tenant covenant and
agree that Landlord will have the right to immediately re-enter the Premises by summary
proceedings, if necessary, and to dispossess Tenant and all other Occupants thereof and to remove
and dispose of all property therein or to store such property in a public warehouse or elsewhere at
the cost and for the account of Tenant without Landlord being deemed guilty of trespass or becoming
liable for any loss or damage which may arise out of such action. Landlord will also have the
right, at its election, to pursue any and all of such rights together with any other right to
remedy which may be available to Landlord under any Applicable Law then in effect.



               20.2.3 Other Remedies. In the event of any breach or threatened breach by Landlord or
Tenant of any of the terms and provisions of this Lease, Landlord and Tenant will have the right to
injunctive relief and declaratory relief as if no other remedies were provided for such breach.
The rights and remedies herein reserved by or granted to Landlord and Tenant are distinct, separate
and cumulative, and the exercise of any one of them will not be deemed to preclude, waive or
prejudice their right to exercise any or all others. Additionally, any two (2) failures by Tenant
to observe and perform any provision of this Lease for which a notice of



42









 




default has been delivered
by Landlord to Tenant (without regard to the subsequent cure) during any twelve (12) month period
of Term of this Lease will constitute a separate non-curable Event of Default that will entitle
Landlord to cancel the Lease and take immediate possession of the Premises. In the alternative
Landlord may require that Rent be paid quarterly in advance by certified check or cash. It is the
intention of this provision to protect Landlord against habitual breaches of the Lease by Tenant.




     21. LANDLORD’S RIGHT TO CURE TENANT’S DEFAULT; LANDLORD’S CONSENT.



          21.1 Landlord’s Right to Cure. If Tenant fails to pay any amount or to do any act
Tenant is required to perform under this Lease (other than to pay Base Rent), Landlord may, but
will not be required to, pay such amount or do such act, and Tenant will reimburse Landlord for the
total cost thereof, if paid or done by Landlord, with interest on such amount at the Default Rate
from the date paid by Landlord, and such amount will constitute Additional Rent hereunder due and
payable with the next monthly installment of Base Rent. Landlord’s paying such amount or doing
such act will not operate to cure such default or to estop Landlord from pursuing any remedy to
which Landlord would otherwise be entitled.




          21.2 Landlord’s Consent. Where provision is made in this Lease for Landlord’s consent
and Landlord shall fail or refuse to give such consent, except to the extent expressly provided
herein to the contrary Tenant shall not be entitled to any damages for any withholding by Landlord
of its consent, it being intended that Tenant’s sole and exclusive remedy shall be an action for
specific performance or injunction and that such remedy shall be available only in those cases
where Landlord has expressly agreed in writing not unreasonably to withhold its consent. Whenever
in this Lease the consent or approval of Landlord or Tenant is required, such consent or approval
shall (except to the extent that such consent or approval is specifically designated as being
“within the sole and absolute subjective discretion” of a party, or words to that effect, in the
applicable provision) not be unreasonably withheld, conditioned or delayed, shall be in writing,
and shall be executed by a duly authorized officer or agent of the party granting such consent or
approval; provided, however, that Landlord shall be deemed to have reasonably withheld its consent
if any Mortgagee withholds its consent or otherwise objects to any proposed consent or approval.




     22. ESTOPPEL CERTIFICATES. Tenant will, (a) within five (5) days after Tenant
receives written notice from Landlord, from time to time, and (b) on the Lease Commencement Date
simultaneous with the execution of the Lease Commencement Agreement, execute, acknowledge, and
deliver to Landlord, at no cost to Landlord, a statement in writing (i) certifying that this Lease
is unmodified and in full force and effect (or if there have been modifications, that this Lease is
in full force and effect as modified and stating the modifications), (ii) stating the dates to
which the Rent has been paid by Tenant, (iii) stating whether to the best knowledge of Tenant,
Landlord has failed to fulfill any of its obligations under this Lease, and, if so, specifying each
such failure of which Tenant has knowledge, (iv) stating that Tenant will give written notice to
Landlord’s tender of any failure by Landlord to fulfill any of its obligations under this Lease,
(v) stating the address to which notices to Tenant should be sent, (vi) for the estoppel
certificate delivered on the Lease Commencement Date,



43









 




stating that Tenant accepts the Premises and
the improvements therein, and (vii) providing any other such information Landlord reasonably
requests relating to this Lease. Any owner of the Building, any prospective purchaser of the
Building, any Mortgagee or prospective Mortgagee of the Building or of Landlord’s interest, or any
prospective assignee of any such mortgage may be rely on any such statement delivered pursuant
hereto. Tenant irrevocably appoints Landlord, as Tenant’s attorney-in-fact, to execute and deliver on Tenant’s behalf any estoppel certificate to
which Tenant does not object with specificity in writing within five (5) days of Tenant’s receipt
thereof. Tenant acknowledges and agrees that Tenant’s compliance with the requirements of this
Section is necessary for Landlord to manage efficiently the financial and other aspects of owning
and operating the Project (including facilitating the financing, refinancing, and/or sale of the
Building or Project, any part thereof or any interest therein) and that any breach or other
violation of the provisions of this Section will result in material damages to Landlord (including
any damages to Landlord in connection with its financing, refinancing, or sale of the Project, any
part thereof, or any interest therein that results from any such breach or violation). Any breach
or other violation of any requirement of this Section will be a default hereunder, entitling
Landlord to undertake immediately an action for the damages resulting therefrom (including any
consequential, direct, and/or indirect damages) and pursue any other remedies available to Landlord
on account of such default, including any remedies available under this Lease or at law or equity.




     23. SUBORDINATION AND ATTORNMENT.



          23.1 General. This Lease is subject and subordinate to the lien, operation, and
effect of any mortgages (which term “mortgages” includes deeds of trust and similar security
instruments; and the term “Mortgagee” means the holder of any such mortgage) that may now or
hereafter encumber or otherwise affect the Land and/or Building, or Landlord’s interest therein,
and to any renewals, extensions, modifications, or refinancings thereof, and to any current or
future ground lease of the Land. To confirm such subordination, Tenant will, at Landlord’s
request, promptly execute any requisite or appropriate subordination or other document. This
clause is self-operative and no further act by Tenant is required to effectuate the foregoing
subordination or the attornment specified herein. If any proceedings are brought to foreclose any
mortgage, Tenant will attorn to the purchaser at such foreclosure sale, and recognize such
purchaser as Landlord under this Lease. Tenant waives the provision of any statute or rule of law,
now or hereafter in effect, that permits or purports to permit Tenant to end or otherwise adversely
affect this Lease and the obligations of Tenant hereunder if any such foreclosure proceeding is
prosecuted or completed. Notwithstanding the foregoing, Tenant agrees that the holders of any such
mortgages may make this Lease superior to the lien, operation, and effect of such mortgage, by the
filing of subordination statements or otherwise, and Tenant consents to any such filing. Landlord
represents and warrants that currently the Project is not encumbered by any financing, and
furthermore to the extent Tenant is requested to subordinate to a future loan or mortgage (whether
Landlord puts debt on the Project, or a purchaser acquires the Project or Building using debt),
Tenant’s obligation to subordinate to such future loan or mortgage (and the deed of trust) will be
subject to Tenant entering into a commercially reasonable subordination, non-disturbance and
attornment agreement in a form reasonably acceptable to such future lender and Tenant.





44









 








          23.2 Mortgagee Protection. Tenant agrees to give any Mortgagee, by certified mail,
postage prepaid, return receipt requested, a copy of any notice of any failure by Landlord to
fulfill any of Landlord’s obligations under this Lease served on Landlord by Tenant, provided that
before such notice Tenant has been notified in writing (by way of notice of assignment of rents and leases, or otherwise) of the addresses of such Mortgagee. Tenant agrees that the
Mortgagee will have such time as may be necessary to cure such failure as long as any Mortgagee has
started and is diligently pursuing the remedies necessary to cure such failure (including time to
take possession and/or start foreclosure proceedings, if necessary to effect such cure).




          23.3 Lender Requested Changes. If any lender providing construction or permanent
financing or any refinancing for all or any portion of the Building requires, as a condition of
such financing, that modifications to this Lease be obtained, and provided that such modifications
(a) are reasonable, (b) do not adversely affect in a material manner Tenant’s use and occupancy of
the Premises as herein permitted, (c) do not increase the Rent and other sums to be paid by Tenant
under this Lease, (d) do not reduce the services provided to Tenant under this Lease, (e) do not
materially decrease Landlord’s obligations under this Lease, and (f) do not materially affect the
rights and obligations of Tenant under this Lease, Landlord may submit to Tenant a written
amendment to this Lease incorporating such required changes, and Tenant hereby covenants and agrees
to execute, acknowledge, and deliver such amendment to Landlord within ten (10) days of Tenant’s
receipt thereof.




          23.4 Mortgagee Approval. [Intentionally Omitted]




     24. BROKERS. Landlord will pay the commission payable to the Broker identified in the
Basic Lease Information pursuant to a separate agreement between the Broker and Landlord. Landlord
and Tenant each represent and warrant one to the other that if either has engaged any broker or
agent (other than the Broker) in carrying on the negotiations relating to this Lease, it will pay
any brokerage commission payable to such broker or agent. Tenant will indemnify, hold harmless,
and defend Landlord from and against any claims, losses, damages, or costs (including reasonable
attorneys’ fees and all court costs) arising out of any breach of the foregoing representation and
warranty by Tenant or any purported or actual dealings by Tenant and any broker or agent other than
the Broker. Any representation or statement by a leasing company or other third party (or employee
thereof engaged by Landlord as an independent contractor) that is made about the Premises or to the
rest of the Building or the Project will not bind Landlord nor modify this Lease and Landlord will
have no liability therefor, except to the extent such representation is also contained herein.



     25. FINANCIAL STATEMENTS. At any time during the Term that Tenant is not a “publicly
traded company” (i.e., ownership interests are listed on a public securities exchange), then within
one hundred and twenty (120) days after the end of each fiscal year of Tenant, Tenant shall furnish
to Landlord a financial statement, in form and substance satisfactory to Landlord, showing the
complete results of Tenant’s operations for its immediately preceding fiscal year. Such financial
statements must be either certified by a certified public accountant or sworn to as to their
accuracy by Tenant’s chief financial officer. Landlord will retain such statements in confidence,
but may provide copies to Mortgagees and potential Mortgagees and



45









 




purchasers as required. If at
anytime Tenant is in monetary default of this Lease, Landlord shall have the right to request and
Tenant shall provide within (15) fifteen days of such request, the current financial statements as
of the most recent month end in form and substance satisfactory to Landlord certified by a certified public accountant or sworn to as to their accuracy by Tenant’s
(or the guarantor’s, if applicable) chief financial officer.




     26. SURRENDER; HOLDING OVER.



          26.1 Surrender. After the Term ends, (a) Tenant will surrender the Premises and all
keys, locks, and fixtures and improvements thereto (except only Tenant’s personal property) in good
order, repair, and condition, as the same are now or will be at the Lease Commencement Date, except
for ordinary wear and tear, and (b) Tenant will remove from the Premises the personal property of
Tenant, any of its subtenants, and any other persons or entities claiming by, through, or under
Tenant and repair any damage to the Premises caused by the removal. Any personal property
belonging to Tenant or any other person that is left in the Premises after the Term ends will be
deemed to have been abandoned and will become Landlord’s property. In case of such deemed
abandonment, Landlord may retain such personal property or may dispose of same at Tenant’s sole
cost (including the cost of selling such property or storing same in a warehouse or elsewhere in
accordance with Applicable Law), and promptly on demand Tenant will reimburse Landlord as
Additional Rent for any costs Landlord incurs in connection therewith, including reasonable
attorney’s fees and all court costs. Landlord will not be liable for trespass, conversion,
negligence, or in an other way liable in connection with such property.




          26.2 Holding Over. Without Landlord’s prior written consent, Tenant may not occupy or
retain, or allow any subtenant to occupy or retain, possession of the Premises at any time after
the Term ends. If without Landlord’s prior written consent Tenant holds over after the Term ends,
Landlord may regain possession of the Premises by any legal process in force at such time. It will
be conclusively presumed that the value to Tenant of remaining in possession of the Premises after
the Term ends, and the loss or damage that Landlord may suffer as a result thereof, far exceed the
Rent Tenant would have paid had the Term continued during the holdover period. If Tenant continues
to occupy the Premises after the Term ends, then Tenant will be liable to pay to Landlord an amount
equal to One Hundred Fifty Percent (150%) of the monthly installments of Base Rent being paid
immediately before the Lease Expiration Date, plus escalations, Additional Rent, and any other
charges paid on an installment basis, for each month or part of a month that Tenant occupies the
Premises after the date the Term ends, plus any other Additional Rent or charges due, reasonable
attorneys’ fees, and all court costs Landlord incurs in regaining possession of the Premises and/or
to recover the foregoing amounts. Such damages for the first calendar month (or part thereof)
during the holdover period will be due and payable on the day immediately following the end of the
Term, and for each calendar month thereafter during the holdover period, such damages will be due
and payable on the first day of such calendar month. If the holdover period ends on a date other
than the last day of a calendar month, such damages for the entire calendar month in which the
holdover period ends will be deemed earned by Landlord as of the first day of such month, and
Tenant will not be entitled to a refund or reduction of Rent for any such partial month. Any
security deposit provided to Landlord pursuant to the terms of this Lease will be forfeited.
Holdover occupancy by Tenant





46









 







will be subject to all of the terms, agreements, and conditions of
this Lease. Tenant acknowledges and agrees that Landlord intends to lease the Premises (in whole,
in part, or as a part of a larger portion of the Building) to another tenant immediately after the Term ends and
that any breach or other violation of the provisions of this Section 26.2 may result in material
damages to Landlord (including any damages to Landlord in connection with its reletting of the
Premises and/or other portions of the Building). Tenant will indemnify, hold harmless, and defend
Landlord from all damages, losses, and costs (including reasonable attorneys’ fees and all court
costs) that Landlord suffers as a result of Tenant’s holdover use and occupancy of the Premises.




     27. WAIVER; NO ACCORD AND SATISFACTION. If Landlord waives Tenant’s breach of any
condition or agreement contained in this Lease, such waiver will not operate as a waiver of such
condition or agreement itself nor of any subsequent breach thereof. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly installment of Base Rent or any Additional
Rent will be other than on account of the earliest stipulated Base Rent and Additional Rent, nor
will any endorsement or statement on any check or letter accompanying a check for payment of any
Base Rent or Additional Rent be an accord and satisfaction. Landlord may accept such check or
payment without prejudice to Landlord’s right to recover the balance of such Rent or to pursue any
other remedy provided in this Lease. No reentry by Landlord, and no acceptance by Landlord of keys
from Tenant, will be considered an acceptance of a surrender of this Lease. Tenant waives any
right of redemption granted by or under any present or future Applicable Laws if Tenant is evicted
or dispossessed for any cause, or if Landlord obtains possession of the Premises because Tenant
violates any of the agreements and conditions of this Lease, or otherwise.



     28. RULES AND REGULATIONS. Tenant, its agents, employees, contractors, and invitees
will observe the rules and regulations contained in Exhibit D, and such other rules or
regulations as Landlord may promulgate from time to time for the operation and maintenance of the
Building and Project, with a copy sent to Tenant. Landlord shall have no duty or obligation to
enforce such rules and regulations, or the terms, conditions, or agreements contained in any other
lease, as against any other tenant. Landlord will not be liable to Tenant for violation of the
same by any other tenant, its employees, agents, business invitees, licensees, customers, family
members, or guests.



     29. AGREEMENT OF QUIET ENJOYMENT. If Tenant pays the Rent and performs all of the
agreements, terms, and conditions of this Lease to be performed by Tenant, then during the Term
Tenant may, except as otherwise provided in this Lease, freely, peaceably, and quietly occupy and
enjoy the full possession of the Premises without molestation or hindrance by Landlord or any party
claiming by, through, or under Landlord.



     30. NOTICES. All notices or other communications under this Lease will be in writing
and will be deemed duly given if delivered by hand, or by a nationally recognized delivery service
providing receipt evidencing such delivery, or by facsimile transmission the receipt of which is
confirmed, or by certified mail, return receipt requested, first-class, postage prepaid, to the
Address for Notices set forth in the Basic Lease Information unless notice of a change of address
is given in writing pursuant to this Section. Notice will be deemed to have been given on receipt
or at the time delivery is refused.



47









 





     31. ENVIRONMENTAL MATTERS.



          31.1 General. Tenant, its agents and employees, will not violate or cause to be
violated any Applicable Laws relating to the environmental conditions on, under or about the
Premises, Building, Project, or the Land, including soil and ground water conditions. Tenant, its
agents and employees will not introduce, use, release, generate, store, accept, or dispose of on,
under, or about the Premises, the Building, Project, or the Land or transport to or from the
Premises, the Building, Project, or the Land any hazardous wastes, toxic substances, pollutants, or
related materials (“Hazardous Materials”), except Landlord will permit Tenant to use and store
office and cleaning supplies and other Hazardous Materials in such quantities as are necessary for
and are typically found in normal office use, so long as the presence of such items does not
violate any Environmental Laws governing the use, storage, transportation, or disposal of such
items. The term Hazardous Materials includes substances defined as “hazardous substances” or
“toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. §§ 9061 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
§§ 1802 et seq., and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq.,
and any other substances considered hazardous, toxic, or the equivalent pursuant to any other
Applicable Laws and in the regulations adopted and publications promulgated pursuant to such laws
or any future laws or regulations (collectively, the “Environmental Laws”).




          31.2 Remediation. Tenant will, at its sole cost, clean up, remediate, and remove or
cause to be cleaned up and removed from, under, or about the Premises, the Building, Project, or
the Land any Hazardous Materials it or its agents or employees have or have caused to be released
or introduced, and will ensure that such removal is conducted in compliance with all applicable
Environmental Laws.




          31.3 Indemnification. Tenant will indemnify, defend, and hold Landlord, its
successors and assigns harmless from any losses (including reasonable attorneys’ fees and all court
costs) that Landlord, its successors and assigns may sustain or that may arise because of Tenant’s
failure to comply with the requirements of this Section. This Section will survive the expiration
or earlier termination of this Lease.




          31.4 Mold.




          (i) Tenant acknowledges the necessity of adopting and enforcing good housekeeping practices,
ventilation and vigilant moisture control within the Premises (particularly in kitchen areas,
janitorial closets, bathrooms, in and around water fountains and other plumbing facilities and
fixtures, break rooms, in and around outside walls, and in and around HVAC systems and associated
drains) for the prevention of mold (such measures, “Mold Prevention Practices”). Tenant will, at
its sole cost and expense keep and maintain the Premises in good order and condition in accordance
with the Mold Prevention Practices.





48









 








          (ii) Tenant, at its sole cost and expense, shall:




               (1) Regularly monitor the Premises for the presence of mold and any conditions that reasonably
can be expected to give rise or be attributed to mold or fungus including, but not limited to,
observed or suspected instances of water damage, condensation, seepage, leaks or any other water
penetration (from any source, internal or external), mold growth, mildew, repeated complaints of
respiratory ailments or eye irritation by Tenant’s employees or any other occupants of the
Premises, or any notice from a governmental agency of complaints regarding the indoor air quality
at the Premises (the “Mold Conditions”); and



               (2) Promptly notify Landlord in writing if it observes, suspects, has reason to believe mold
or Mold Conditions at the Premises.



          (iii) In the event of suspected mold or Mold Conditions at the Premises, Landlord may cause an
inspection of the Premises to be conducted, during such time as Landlord may designate, to
determine if mold or Mold Conditions are present at the Premises.




          (iv) Tenant hereby releases and relieves Landlord from any and all liability for bodily injury
or damage to property and hereby waives any and all claims against Landlord related to or allegedly
caused by or associated with any mold and Mold Conditions in or on the Premises, except to the
extent such Mold Conditions were caused by Landlord.




          (v) Tenant shall indemnify, defend and hold harmless Landlord from and against any and all
Mold Conditions caused or contributed to by Tenant. Landlord shall indemnify, defend and hold
harmless Tenant from and any and all Mold Conditions caused or contributed to by Landlord.




          (vi) The provisions of this Paragraph 31 shall survive the expiration or earlier termination
of this Lease.




          31.5 Environmental Warranty. With regard to the Building and Project including
without limitation the Premises, Landlord represents and warrants to Tenant that:




          a.) No Hazard. To Landlord’s actual knowledge, with no duty of investigation, as of
the Lease Commencement Date, no Hazardous Materials (as defined in Section 31.1 hereof) have been
manufactured, refined, stored, disposed or, produced, or processed on or in any part of the
Premises, Building or Project (except for customary construction products, and cleaning and
maintenance products).




          b.) Compliance. To Landlord’s actual knowledge with no duty of inquiry, Landlord is
in compliance with all federal, state, county, or municipal environmental, pollution, health,
safety, fire, or building code laws and has no knowledge and has received no notice of any federal,
state, county, or municipal environmental, pollution, health, safety, fire, or building code
violations.




49









 








          c.) No Lawsuits. To Landlord’s actual knowledge, with no duty of inquiry, neither the
Landlord nor any tenants in the Building or Project have been named as a party in any proceeding or
lawsuit for violation of federal, state, county, or municipal environmental laws regarding the
Total Premises.




          d.) No Investigations. To Landlord’s actual knowledge, with no duty of inquiry, the
Premises, Building and Project are not currently under investigation for alleged federal, state,
county, or municipal environmental pollution, health, safety, fire, or building code violations.




          e.) Remediation by Landlord. In the event any Hazardous Materials located, in, on, or
upon the Premises and such Hazardous Materials was not introduced by Tenant or Tenant’s agents,
employees, or invitees, Landlord shall, at its own expense, promptly remove and/or remediate such
Hazardous Materials to the full extent required by applicable law. In the event Landlord is
unable or unwilling to remediate such Hazardous Materials, Landlord may terminate this Lease
effective upon sixty (60) days prior written notice to Tenant.




          f.) Indemnity. Landlord will defend, indemnify, and hold harmless Tenant, its
directors, officers, members, shareholders, partners, lenders, employees, agents, and any
assignees, subtenants, or successors, from and against any and all demands, claims, causes of
action, fines, penalties, damages (including, without limitation, consequential damages), losses,
liabilities, judgments, and expenses (including, without limitation, attorney’s fees and court
costs) resulting from any Hazardous Materials introduced into the Premises or Project by Landlord,
or its agents, employees or representatives.




          g.) Abatement and Termination. If any cleanup, repair, or similar actions is required by any
governmental or quasi-governmental agency as a result of the storage, release, or disposal of
hazardous substances materials by Landlord, and such action requires that the Tenant be completely
or partially closed for business or that access to all or part of the Premises be denied for longer
than a five (5) day period, then the Rent will be abated entirely during the period beyond five (5)
days. If the closure or denial of access persists in excess of one hundred and twenty (120) days,
then, at Tenant’s election by written notice to Landlord given within ten (10) days after the one
hundred and twenty (120) day period, this Lease will terminate effective as of the date of
Landlord’s receipt of said notice.




          h.) Warranty Survives Expiration of Lease. The provisions of this Clause shall
survive the expiration or sooner termination of this Lease.




     32. Intentionally Omitted.



     33. Relocation of Tenant. Upon prior written notice to Tenant, Landlord shall have
the right to relocate Tenant to new space (the “Relocation Space”) within the Project that is
comparable in size, utility, and condition to the Premises, including similar Tenant Improvements.
Such relocation will be effective on a date specified by Landlord in its relocation notice, which
date will not be less than ninety (90) days after the date of such notice. If Landlord relocates Tenant, Landlord will reimburse Tenant for Tenant’s reasonable out-of-pocket



50









 




expenses for
moving Tenant’s furniture, equipment, and supplies from the Premises to the Relocation Space, and
other reasonable relocation costs. Tenant shall be entitled to concurrently occupy both the
Premises and Relocation Space for a period not to exceed twenty (20) days in order to effectuate
its relocation in a minimally non-disruptive manner. Upon such relocation, the Relocation Space
will be deemed to be the Premises and the terms of this Lease will remain in full force and effect
and apply to the Relocation Space. No amendment or other instrument shall be necessary to
effectuate the relocation contemplated by this Section; however, if requested by Landlord, Tenant
shall execute and deliver to Landlord an appropriate amendment document within twenty (20) days
after Landlord’s request therefor. If Tenant fails to execute and deliver such relocation
amendment within such time period, or if Tenant fails to relocate within the time period stated in
Landlord’s relocation notice to Tenant (or, if the Relocation Space is not available on the date
specified in Landlord’s relocation notice, as soon thereafter as the Relocation Space becomes
available and is tendered to Tenant in the condition required by this Lease), then, in addition to
Landlord’s other remedies set forth in this Lease, at law and/or in equity, Landlord may terminate
this Lease by notifying Tenant in writing thereof at least sixty (60) days prior to the termination
date contained in Landlord’s termination notice. Landlord’s exercise of its rights as permitted by
this Section shall not (a) constitute a constructive eviction, an interference with Tenant’s right
of quiet enjoyment, or a disturbance of Tenant’s right to use the Premises; and (b) subject
Landlord to damages, including, but not limited to, damages for loss of goodwill, business, or
profits. Time is of the essence with respect to Tenant’s obligations under this Section.




     34. MISCELLANEOUS.



          34.1 Agreements Running With the Land. This Lease is subject to any agreements now or
hereafter recorded among the land records of the jurisdiction in which the Premises are located, as
such agreements may be amended by Landlord from time to time.




          34.2 Terms. In this Lease, unless otherwise indicated, (a) defined terms may be used
in the singular or the plural and the use of any gender includes all genders, (b) the terms “agree”
and “agreements” contained herein are intended to include and mean “covenant” and “covenants”, (c)
the term “including” means “including, but not limited to”, (d) the term “day” means “calendar day”
unless expressly stated otherwise, and (e) the term “Business Day” means Monday through Friday
inclusive, excluding Holidays.




          34.3 Benefit and Burden. Subject to the provisions of Sections 6 (Assignment) and 7
(Subletting) hereof, the provisions of this Lease will be binding on, and will inure to the benefit
of, the parties hereto and each of their respective successors and assigns. Landlord may freely
and fully transfer, assign, and convey its interest hereunder.




          34.4 Landlord as Individual or Partnership. If Landlord or any successor in interest
to Landlord is an individual, corporation, limited liability company, joint venture, tenancy in
common, firm, or partnership, general or limited, no partner, successor, or affiliate of Landlord (regardless of whether an individual, corporation, or other entity) nor any employee,
member, officer, director, or other individual of Landlord or of its successor, partner, or
affiliate,





51









 







will have any personal liability for any of the provisions of this Lease or any
obligation arising therefrom or in connection therewith. In such event, Tenant will look solely to
the equity of the then owner of the Building in the Building for the satisfaction of any remedies
of Tenant if Landlord or its successors breach any of their obligations hereunder.




          34.5 Joint and Several Liability. If two or more individuals, corporations,
partnerships, or other business associations (or any combination of two or more thereof) sign this
Lease for Tenant, the liability of each such individual, corporation, partnership, or other
business association to pay the Rent due under this Lease and to perform all other obligations
hereunder will be deemed to be joint and several. All notices, payments, and agreements given or
made by, with or to any one of such individuals, corporations, partnerships, or other business
associations will be deemed to have been given or made by, with, or to all of them. In like
manner, if Tenant is a partnership or other business association, the members of which are, by
virtue or statute or federal law, subject to personal liability, the liability of each such member
is joint and several.




          34.6 No Partnership. Nothing contained in this Lease may be deemed or construed to
create a partnership or joint venture of or between Landlord and Tenant, or to create any other
relationship between the parties hereto other than that of landlord and tenant.




          34.7 Modifications; Time of Essence; Counterparts. This Lease may not be modified,
changed, amended, altered, or terminated in whole or in part in any manner other than by an
agreement in writing duly executed by both parties hereto. Time is of the essence as to each
provision of this Lease. Exhibits attached hereto are incorporated herein by reference. No person
or entity purporting to represent Landlord (or otherwise have the authority to bind Landlord) will
have any power or authority (apparent or otherwise) to execute this Lease or any amendment to this
Lease or make any representation or warranty on behalf of Landlord or otherwise bind Landlord in
any respect, except the individual or entity expressly and duly authorized to do so by Landlord.
This Lease may be executed in multiple counterparts, each of which constitute an original and all
of which taken together constitute one and the same agreement.




          34.8 No Representations by Landlord. Neither Landlord nor any agent or employee of
Landlord has made any representations or promises about the Premises or the rest of the Project
except as herein expressly set forth, and no rights, privileges, easements, or licenses are
acquired by Tenant except as herein expressly set forth. This Lease will not be binding on the
parties until and unless this Lease is fully executed and delivered by the parties hereto.




          34.9 Authority to Execute. Before or on execution of this Lease, Tenant (unless
Tenant is an individual) will deliver to Landlord, in a form reasonably satisfactory to Landlord,
incumbency certificates and organizational status certificates and resolutions of the governing
body of Tenant (and of any non-individual executing this Lease on behalf of Tenant) authorizing the
execution of this Lease by the individual so executing.




          34.10 Governing Law; Severability. This Lease will be construed under the internal
laws of the State in which the Building is located and any action or proceeding arising under this
Lease will be brought in the courts of the State (including both federal and state





52









 







courts) in which
the Building is located. If a court of competent jurisdiction holds any provision of this Lease or
the application thereof to any person or circumstances invalid or unenforceable, the remainder of
this Lease, or the application of such provision to persons or circumstances other than those as to
which it is invalid or unenforceable, will not be affected thereby, and each provision of this
Lease will be valid and be enforced to the fullest extent permitted by Applicable Law.




          34.11 Captions. The captions and underlining of specific words herein are for
convenience of reference only and do not define, limit, or expand the meaning of the provisions of
this Lease. The deletion of any printed, typed, or other portion of this Lease compared to a draft
hereof does not evidence an intent to contradict such deleted portion. Such deleted portion will
be deemed not to have been inserted in this Lease.




          34.12 Recordation. This Lease may not be recorded without Landlord’s prior written
consent. If this Lease is recorded by either party hereto, such party will bear the full cost of
any transfer and recordation tax and any recording fee assessed in connection with such
recordation. If, after the date of this Lease, it becomes necessary under the internal laws of the
State in which the Building is located to record this Lease for the Lease to remain effective,
Tenant will bear the full cost of any such taxes and fees incurred in connection therewith, all as
Additional Rent.




          34.13 Status of Tenant. If Tenant is a corporation, the persons executing this Lease
on Tenant’s behalf agree and warrant that: Tenant is a duly constituted corporation qualified to
do business in California; all of Tenant’s franchisee and corporate taxes have been paid to date;
all future forms, reports, fees, and other documents necessary for Tenant to comply with Applicable
Laws will be filed by Tenant when due; and such persons are duly authorized by the board of
directors of such corporation to execute and deliver this Lease on behalf of the corporation.
Tenant certifies that if it is operating under a fictitious name that such name has been duly
recorded according to California law and has attached hereto a copy of such registration form.




          34.14 Waiver of California Code Sections. Tenant waives the provisions of the
following provisions of the Applicable Law: (i) California Code of Civil Procedure Section 1932(1)
with respect to the termination of the Lease due to failure, interruption or inability of Landlord
to provide the services set forth in Section 16 of this Lease; (ii) California Civil Code Sections
1932(2) and 1933(4) with respect to the destruction of the Premises; (iii) California Civil Code
Sections 1941 and 1942 with respect to Landlord’s repair duties and Tenant’s right to repair; (iv)
California Civil Code Section 1654 that provides that ambiguities are to be continued against the
drafter of this Lease; and (v) California Code of Civil Procedure Section 1265.130, allowing either
party to petition the Superior Court to terminate this Lease in the event of a partial taking of
the Premises by condemnation. This waiver applies to amendments or modifications to the cited sections and any future statutes enacted in addition or in substitution
to the statutes specified herein.




          34.15 Confidentiality. Tenant agrees that the terms of this Lease are confidential
and constitute proprietary information of Landlord, and that disclosure of the terms hereof could





53









 







adversely affect the ability of Landlord to negotiate with other tenants. Tenant and its partners,
officers, directors, employees, agents, real estate brokers, and sales persons and attorneys shall
not disclose the terms of this Lease to any other person without Landlord’s prior written consent
(which consent may be denied in Landlord’s sole and absolute subjective discretion), except to (a)
any accountants of Tenant in connection with the preparation of Tenant’s financial statements or
tax returns, (b) to an assignee of this Lease or sublessee of the Premises, (c) to an entity or
person to whom disclosure is required by Applicable Law or in connection with any action brought to
enforce this Lease, (d) Tenant’s consultants, agents, architects, or attorneys representing Tenant
in connection with this Lease, or (e) any governmental authority involved in any investigation into
the compliance of the Premises or the Project with the Applicable Laws.




          34.16 ERISA. Tenant represents and warrants to Landlord that neither Tenant nor any
guarantor of Tenant’s obligations under this Lease is (a) a party in interest, as defined in
Section 3(14) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), to the
AFL-CIO Building Investment Trust (“Trust”), or any of the plans participating therein, a list of
which plans has previously been delivered to Tenant, or (b) a disqualified person under Section
4975(e)(2) of the Internal Revenue Code of 1986, as amended (“Code”), with respect to the Trust or
the plans participating therein. Neither Tenant nor any guarantor of Tenant’s obligations under
this Lease shall take any action that would cause this Lease or the exercise by Landlord or the
Trust of any rights hereunder, to be a non-exempt prohibited transaction under ERISA.
Notwithstanding any contrary provision of this Lease, Tenant shall not assign this Lease or
sublease all or any portion of the Premises unless (i) such assignee or subtenant delivers to
Landlord a certification (in form and content satisfactory to Landlord) with respect to the status
of such assignee or subtenant (and any guarantor of such assignee’s or subtenant’s obligations) as
a party in interest and a disqualified person, as provided above; and (ii) such assignee or
subtenant undertakes not to take any action that would cause this Lease or the exercise by Landlord
or the Trust of any rights hereunder, to constitute a non-exempt prohibited transaction under
ERISA.




          34.17 UBIT. Notwithstanding any contrary provision of this Lease, Tenant shall not
(a) sublease all or any portion of the Premises under a sublease in which the rent is based on the
net income or net profits of any person, or (b) take any other action such that the revenues to be
received by Landlord or the Trust from time to time in connection with this Lease would, as a
result of such action, be subject to the Unrelated Business Income Tax under Sections 511 through
514 of the Code.




          34.18 Incorporation. Tenant agrees that it shall incorporate the requirements of
Sections 33.16 (ERISA) and 33.17 (UBIT) in any sublease of the Premises.




          34.19 Prohibited Persons and Transactions. Tenant represents and warrants to Landlord
that Tenant is currently in compliance with and shall at all times during the Term (including any
extension thereof) remain in compliance with the regulations of the Office of Foreign Assets
Control (“OFAC”) of the U.S. Department of Treasury (including those named on OFAC’s Specially
Designated Nationals and Blocked Persons List) and any statute, executive order (including
Executive Order 13224, dated September 24, 2001 and entitled “Blocking





54









 







Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”), or other
governmental action relating thereto.




          34.20 Patriot Act.




               (1) Tenant is not in violation of any Anti-Terrorism Law;



               (2) Tenant is not, as of the date hereof:



                         (A) conducting any business or engaging in any transaction or dealing with any Prohibited
Person, including the making or receiving of any contribution of funds, goods or services to or for
the benefit of any Prohibited Person;



                         (B) dealing in, or otherwise engaging in any transaction relating to, any property or
interests in property blocked pursuant to Executive Order No. 13224; or



                         (C) engaging in or conspiring to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in, any
Anti-Terrorism Law; and



               (3) neither Tenant nor any of its affiliates, officers, directors, shareholders, members or
lease guarantor, as applicable, is a Prohibited Person.


As used herein, “Anti-Terrorism Law” is defined as any law relating to terrorism, anti-terrorism,
money-laundering or anti-money laundering activities, including without limitation the United
States Bank Secrecy Act, the United States Money Laundering Control Act of 1986, Executive Order
No. 13224, and Title 3 of the USA Patriot Act, and any regulations promulgated under any of them.
As used herein “Executive Order No. 13224” is defined as Executive Order No. 13224 on Terrorist
Financing effective September 24, 2001, and relating to “Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism”, as may be amended
from time to time. “Prohibited Person” is defined as (1) a person or entity that is listed in the
Annex to Executive Order No. 13224, or a person or entity owned or controlled by an entity that is
listed in the Annex to Executive Order No. 13224; (2) a person or entity with whom Landlord is
prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; or (3)
a person or entity that is named as a “specially designated national and blocked person” on the
most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its
official website, http://www.treas.gov/ofac/t11sdn.pdf or at any replacement website or other
official publication of such list. “USA Patriot Act” is defined as the “Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001” (Public Law
107-56), as may be amended from time to time.




          34.21 Attorney’s Fees. Should either party bring an action against the other party,
by reason of or alleging the failure of the other party to comply with any or all of its
obligations hereunder, whether for declaratory or other relief, then the party which prevails in
such action shall be entitled to its reasonable attorneys’ fees and expenses related to such
action,





55









 







in addition to all other recovery or relief. A party shall be deemed to have prevailed in
any such action (without limiting the generality of the foregoing) if such action is dismissed upon
the payment by the other party of the sums allegedly due or the performance of obligations
allegedly not complied with, or if such party obtains substantially the relief sought by it in the
action, irrespective of whether such action is prosecuted to judgment.




          34.22 WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO WHICH THEY OR ANY OF THEM MAY BE A PARTY ARISING OUT OF OR IN ANY WAY
RELATED TO THIS LEASE. IT IS UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF
ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS. THIS WAIVER IS KNOWINGLY,
WILLINGLY, AND VOLUNTARILY MADE BY LANDLORD AND TENANT, AND EACH PARTY REPRESENTS THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. LANDLORD AND TENANT ACKNOWLEDGE AND AGREE
THAT THIS PROVISION IS A SPECIFIC AND MATERIAL ASPECT OF THIS LEASE. LANDLORD AND TENANT EACH
REPRESENT THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE
SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, AND THAT IT
HAS HAD AN OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.




	 	 	/s/ DS 	 	/s/ DS 	 
	 

	 	 
	 	 
	 

	 	Landlord’s Initials
	 	Tenant’s Initials






          34.23. Force Majeure. The term “Force Majeure” shall mean actual delay in the
performance of any obligations contained in this Lease (whether a Landlord or Tenant obligation)
attributable to terrorist act, lightening, earthquakes, fire, storm, hurricane, tornado, flood,
washout, explosion, act of god, or any other similar cause beyond the reasonable control of the
party. If Landlord or Tenant, as a direct result of Force Majeure, fails to timely perform any
obligation on its part to be performed, then such failure will be excused and not a breach of this
Lease by the party in question, but only to the extent and for the time occasioned by such event,
and only to the extent a Force Majeure event is specifically referenced in the applicable portions
of the Lease. The provisions of this Section 34.23 of the Lease and Force Majeure do not apply to
Tenant’s obligation to pay when due, the Rent or any Additional Rent or to adjust the Commencement
Date or Expiration Date. In addition, lack of funds and inability to procure financing will not be deemed to be an event beyond the reasonable control of Tenant. In the event
of such Force Majeure, and as a condition precedent to either party claiming or relying upon such
delay, such party must give notice in writing describing such event to the other party within ten
(10) days after the occurrence of such event.




          34.24 ENTIRE AGREEMENT. THIS INSTRUMENT ALONG WITH ANY EXHIBITS AND ATTACHMENTS
HERETO CONSTITUTES THE ENTIRE AGREEMENT





56









 







BETWEEN LANDLORD AND TENANT RELATIVE TO THE PREMISES AND
THIS AGREEMENT, AND THE EXHIBITS AND ATTACHMENTS MAY BE ALTERED, AMENDED, OR REVOKED ONLY BY AN
INSTRUMENT IN WRITING SIGNED BY BOTH LANDLORD AND TENANT. IT IS UNDERSTOOD THAT THIS LEASE
SUPERSEDES AND CANCELS ANY AND ALL PREVIOUS NEGOTIATIONS, ARRANGEMENTS, BROCHURES, AGREEMENTS, OR
REPRESENTATIONS, AND UNDERSTANDINGS, IF ANY, BETWEEN THE PARTIES HERETO.




     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first
above written.



	 	 	 	 
	LANDLORD:
	 
	 	 
	BIT HOLDINGS FIFTY-SIX, INC.,
	a Maryland corporation
	 
	 	 
	By: 
	 	/s/ David C. Schenning
	 

	 
	Name:
	 	David C. Schenning
	 

	 
	Title:
	 	VP
	 

	 
	 
	 	 
	TENANT:
	 	 
	 
	 	 
	TALEO CORPORATION,
	a Delaware corporation
	 
	 	 
	By:
	 	/s/ Divesh Sisodraker
	 

	 
	Name:
	 	Divesh Sisodraker
	 

	 
	Title:
	 	CFO
	 

	 
	 
	By:
	 	/s/ Jonathan Faddis
	 

	 
	Name:
	 	Jonathan Faddis
	 

	 
	Title:
	 	Vice President and Corporate Counsel
	 

	 





57









 






EXHIBIT A




FLOOR PLAN SHOWING PREMISES









 









 





EXHIBIT B




     THIS WORK AGREEMENT (“Work Agreement”) supplements the Lease executed concurrently herewith by
and between BIT Holdings Fifty-Six, Inc., a Maryland corporation, as Landlord, and Taleo
Corporation, a Delaware corporation, as Tenant. All capitalized terms not defined herein shall
have the same meanings as set forth in the Lease.



     1. Landlord’s Work. Landlord shall deliver the Premises to Tenant on the Effective
Date in their current “AS-IS” and “WHEREAS” condition with “ALL FAULTS subject to Sections 1.4 and
5.1 of this Lease.” Landlord shall not be required to construct any of the Tenant Improvements in
the Premises.



     2. Improvements. All improvements necessary to prepare the Premises for Tenant’s
occupancy and use (the “Tenant Improvements”) shall be performed by Tenant, and Tenant shall be
solely responsible for all costs of constructing the Tenant Improvements of every nature (the
“Tenant Improvement Costs”) (subject to the Tenant Improvement Allowance), with Tenant’s own
contractor. The term “Tenant Improvement Costs” shall include each and every cost of designing,
constructing, engineering and approving the Tenant Improvements which shall include, but not be
limited to, the following: (i) all payments to the Contractor for materials, labor, overhead,
etc., for the construction of the Tenant Improvements; (ii) all payments to the Engineers and
Architects to design the Tenant Improvements; (iii) all construction management and supervision
fees; (iii) permitting and approval costs; (iv) taxes, fees, charges, and levies by any
governmental agency for permits, inspections or approvals of the Tenant Improvements; (v) utilities
incurred in the course of the construction of the Tenant Improvements; (vi) premiums for all
insurance to be carried by Tenant under this Work Agreement; (vii) the Coordination Fee; (viii) any
and all costs incurred to comply with laws interior to the Premises; (ix) costs of sprinkler and
HVAC compliance with laws and distribution to meet the Tenant’s Approved Working Drawings; and (x)
all costs incurred interior to the Premises for life-safety compliance. All matters which are not
Tenant Improvement Costs may not be paid for, or used from the Tenant Improvement Allowance, which
shall include, but not be limited to furniture, fixtures and equipment.



     3. Plans and Specifications.



          3.1 Final Space Plan. Landlord and Tenant, prior to the execution of this Lease, have
approved the space plans attached to this Lease as Exhibit C (the “Final Space Plan”). The
Final Space Plan includes a layout and designation of all offices, rooms and other partitioning,
their intended use, and equipment to be contained therein. Landlord may request clarification or
more specific drawings for special use items not included in the Final Space Plan. Landlord’s
review and approval of the Final Space Plan is not a representation that such proposed Tenant
Improvements: (i) can be accommodated by the Premises; (ii) comply with laws; or (iii) can be
constructed for any certain price, and specifically, Landlord makes no representation or warranty
that the proposed Tenant Improvements can be constructed within the Tenant Improvement Allowance.
Landlord shall pay for the actual costs incurred, not to exceed Two Thousand Dollars ($2,000.00)
upon demand from Tenant, towards drafting of path by travel documents by Tenant’s Architect.




 









 








          3.2 Final Working Drawings. Tenant shall supply the Engineers with a complete listing
of standard and non-standard equipment and specifications, including, without limitation, B.T.U.
calculations, electrical requirements and special electrical receptacle requirements for the
Premises, to enable the Engineers and the Architect to complete the “Final Working Drawings” (as
that term is defined below) in the manner as set forth below. Tenant shall cause the approved
Final Space Plan to be converted by the Architect and the Engineers to complete architectural and
engineering drawings for the Premises, and Architect shall compile a fully coordinated set of
architectural, structural, mechanical, electrical and plumbing working drawings in a form which is
complete to allow subcontractors to bid on the work and to obtain all applicable permits
(collectively, the “Final Working Drawings”) and shall submit the same to Landlord for Landlord’s
approval. Tenant shall supply Landlord with four (4) copies signed by Tenant of such Final Working
Drawings. Landlord shall advise Tenant within five (5) business days after Landlord’s receipt of
the Final Working Drawings for the Premises if the same is unsatisfactory or incomplete in any
respect. If Tenant is so advised, Tenant shall immediately revise the Final Working Drawings in
accordance with such review and any disapproval of Landlord in connection therewith.




     Landlord and Tenant acknowledge that the Final Space Plans may not depict certain structural
elements of the Building and/or various elements of the Building systems which may result in
material modifications to the Final Working Drawings (“Space Plan Modifications”) Furthermore, the
Final Space Plans for the construction of the Tenant Improvements may require modification to
account for the requirements of building codes and other legal requirements of applicable
governmental entities, including, but not limited to, Title 24 and the Americans with
Disabilities Act (collectively the “Building Codes”). The Final Working Drawings shall
materially conform to the Final Space Plans, taking into account (i) Space Plan Modifications, (ii)
the requirements of the Building Codes, (iii) other modifications resulting from physical
constraints of the Premises and (iv) modifications requested by Tenant and consented to by
Landlord, which consent shall not be unreasonably withheld. Tenant agrees that, in addition to
other factors and considerations Landlord may take into account, it shall not be unreasonable for
Landlord to withhold its consent to any matters set forth in the Final Working Drawings and not
contained in the Final Space Plans, (i) if such requested modifications would not comply with the
Building Codes or any laws, (ii) subject to Section 7 if such requested modifications would cause
the anticipated cost of the Tenant Improvements to exceed the Tenant Improvement Allowance (unless
Tenant agrees to be responsible for all such costs, and provide evidence satisfactory to Landlord
of Tenant’s ability to pay such amounts, including escrow the funds if required by Landlord), (iii)
if such requested modifications would not increase the value of the Tenant Improvements, (iv) if
such requested modifications would increase the burden on the Building systems, either during
construction or after completion of same.



     3.3 Approved Working Drawings. The Final Working Drawings shall be submitted for
approval to Landlord prior to the commencement of construction of the Premises by Tenant. Tenant
may simultaneously submit the same to the City of Dublin for all applicable building permits. The
term “Approved Working Drawings” shall mean Final Working Drawings that have been approved in
writing by Landlord. Notwithstanding anything to the contrary in this Lease, Tenant shall not
commence work on the Tenant Improvements until Tenant has obtained



 









 




Landlord’s written approval of the Final Working Drawings. Tenant hereby agrees that neither
Landlord nor Landlord’s consultants shall be responsible for obtaining any building permit or
certificate of occupancy for the Premises and that obtaining the same shall be Tenant’s
responsibility; provided, however, that Landlord shall cooperate with Tenant in executing permit
applications and performing other ministerial acts reasonably necessary to enable Tenant to obtain
any such permit or certificate of occupancy. No changes, modifications or alterations in the
Approved Working Drawings may be made without the prior written consent of Landlord, which consent
may not be unreasonably withheld, except that Landlord and Tenant agree that it shall be reasonable
for Landlord to withhold its consent if the any of the items set forth in Sections (i) through (iv)
of the preceding paragraph are applicable.




     4. Contractors.



          (a) The general contractor selected by Tenant (the “Contractor”) shall be subject to the
approval of Landlord, which approval shall not be unreasonably withheld. Tenant’s Contractor shall
employ engineers and subcontractors that are licensed and insured to perform all structural,
mechanical, electrical, life-safety and plumbing work in the Premises, all of whom shall be
reasonably acceptable to Landlord. Tenant shall pay all costs incurred directly or indirectly by
reason of Tenant’s selecting a Contractor other than Landlord’s general contractor, including,
without limitation, Landlord’s reasonable costs for supervision and inspection of the construction
of the Tenant Improvements such costs are included in the Coordination Fee (as defined in Section 6
below). The form of construction contract entered into by Tenant with its general contractor
shall be subject to the reasonable approval of Landlord, and shall be no less favorable than an AIA
form of construction contract. Furthermore, all architects and engineers selected by Tenant (the
“Engineers” and “Architects”, respectively) shall be subject to the approval of Landlord, which
approval shall not be unreasonably withheld. With respect to the construction of any Tenant
Improvements which tie into Building systems: (i) Tenant shall provide Landlord with written notice
of all such work, and afford the Landlord a reasonable opportunity to inspection such work
(provided such inspections are done promptly and do not materially delay Tenant’s construction of
Tenant’s Improvements; (ii) Landlord shall be entitled to reasonably approve of the Contractor, and
recommend contractors which the Landlord is familiar with, and who are familiar with the Building;
and (iii) Tenant shall be liable and responsible for any Building system damage, and interruptions
of any Building services or utilities to all tenants who are adversely impacted.




          (b) All persons employed by Tenant shall be subject to Landlord’s policies, rules,
regulations, schedules and administrative control and shall conduct their work in such a way as not
to hinder, cause any disharmony with or delay any work or other improvements in the Building.
Tenant shall cause its suppliers and contractors to engage only labor that is harmonious and
compatible with other labor working in the Building. In the event of any labor disturbance caused
by persons employed by Tenant or Tenant’s contractor, Tenant shall immediately take all actions
necessary to eliminate such disturbance. If at any time any supplier, contractor, workman or
mechanic performing Tenant’s work hinders or delays any other work of improvement in the Building
or performs any work which may or does impair the quality, integrity or performance of any portion
of the Building, Tenant shall cause any such supplier, contractor, workman or




 









 







mechanic to leave the Building and remove all tools, equipment and materials immediately upon
written notice delivered to Tenant, and Tenant shall reimburse Landlord for any repairs or
corrections resulting from the work of any supplier, contractor, workman or mechanic performing any work in the Premises.
Tenant and its contractors shall strictly comply with the Conditions for Construction attached
hereto as Exhibit F.




          (c) In addition to any other conditions contained herein with respect to Tenant making any
Tenant Improvements, before constructing any Tenant Improvements, Tenant shall (a) deliver to
Landlord evidence satisfactory to Landlord that Tenant shall cause the Tenant Improvements
(“Construction Activities”) to be performed by contractors who shall employ craft workers who are
members of unions that are affiliated with The Building and Construction Trades Department, AFL-CIO
(“Union Labor”), and such work shall conform to traditional craft jurisdictions as established in
the area (the “Construction Labor Covenant”), (b) include the Construction Labor Covenant in each
of its contracts for the Construction Activities, (c) provide such evidence as Landlord may
reasonably require, from time to time during the course of the Construction Activities, that the
Construction Labor Covenant is being fully and faithfully observed and Tenant shall include the
obligation to provide such evidence in each contract entered into by Tenant for the Construction
Activities, and (d) incorporate the foregoing requirements in any sublease, license, or occupancy
agreement relating to all or any part of the Premises. Tenant shall require that all contractors
and subcontractors, of whatever tier, performing Construction Activities agree to submit all
construction jurisdictional disputes (i.e., disputes about which union is the appropriate union to
perform a given contract) to final and binding arbitration through the procedures of the jointly
administered “Plan for the Settlement of Jurisdictional Disputes in the Construction Industry,” a
dispute resolution plan established and administered by The Building and Construction Trades
Department, AFL-CIO, and various construction industry employer associations. If a resolution to a
construction-related jurisdictional dispute cannot be obtained through The Building and
Construction Trades Department, AFL-CIO, contractors and subcontractors, of whatever tier, shall
agree to submit all such disputes to final and binding arbitration procedures to be administered by
the American Arbitration Association (“AAA”) and in conformity with AAA’s Commercial Arbitration
Rules, Expedited Procedures, with an arbitrator who is an experienced labor arbitrator and is a
member of the National Academy of Arbitration.




     5. Prior to Commencement of Construction. Prior to the commencement of construction
of the Tenant Improvements, Tenant shall submit to Landlord the following:



          (a) All Permits and governmental approvals required to commence construction of the Tenant
Improvements, including but not limited to approved building permits. Notwithstanding the
proceeding sentence, provided Tenant has submitted Final Working Drawings to the City of Dublin
prior to construction (and obtained Landlord’s approval of such Final Working Drawings), Tenant may
commence construction strictly to the City of Dublin permit application conditions. Tenant shall
be responsible for any and all modifications or changes to work performed while its permit
application is pending if the City of Dublin requires changes to the Final Working Drawings in
order to issue approved building permits.




 









 







Tenant shall indemnify, defend and hold harmless Landlord from and against any and all claims,
liabilities, causes of actions, fines or judgments in any way related to Tenant commencing
construction of the Tenant Improvements prior to receiving formal unconditional approval and
building permits from the City of Dublin.




          (b) Certification of the date on which construction of the Tenant Improvements will commence,
the estimated date of completion of the Tenant Improvements and the construction schedule provided
by the general contractor.




          (c) Evidence of the insurance, in a form acceptable to Landlord, required pursuant to the
Conditions for Construction, and this Work Agreement.




          (d) Funding commitments or evidence of other satisfactory financial arrangements to pay for
construction of the Tenant Improvements, to the extent any bid is in excess of the Tenant
Improvement Allowance.




     6. Construction of Improvements. All work performed by Tenant’s contractor shall
comply with all applicable ordinances, codes and regulations and shall be performed in a good and
workmanlike manner. Tenant shall deliver copies of all permits and all periodic governmental
inspection reports with respect to the Tenant Improvements promptly after receipt thereof by Tenant
or Tenant’s contractor. Landlord should be notified in advance of requested inspections and may
attend inspections to observe on behalf of the Building. At all times during construction of the
Tenant Improvements, Landlord and Landlord’s employees and agents shall have the right to enter the
Premises to inspect the work. Tenant shall not close-up any work affecting the life safety,
heating, ventilation and air conditioning, plumbing or electrical systems in the Premises until the
same have been inspected and approved by Landlord’s agents. Tenant shall provide Landlord
reasonable notice of the date it intends to close up work affecting life safety, heating,
ventilation and air conditioning, plumbing and electrical systems in the Premises. Landlord shall
inspect the work to be closed up within three (3) business days of such notice. If Landlord does
not inspect the work to be closed up within three (3) business days, Landlord shall be deemed to
have waived its right to inspect. No inspection or approval by Landlord of any such work shall
constitute an endorsement thereof with any governmental ordinances, codes or regulations, and
Tenant shall be fully responsible and liable therefor. Tenant shall reimburse Landlord for any
repairs or corrections of any portion of the Building caused by any contractor, subcontractor,
supplier, workman or mechanic performing any work in the Premises. Upon completion of the
construction of the Tenant Improvements, Tenant shall provide Landlord with marked copies of the
construction drawings indicating to the extent possible the actual Tenant Improvements in the
Premises, a certificate of occupancy and the results of any inspections and/or approvals given or
required by any governmental agency. Tenant’s and Tenant’s agent’s construction of the Tenant
Improvements shall comply with the following: (i) the Tenant Improvements shall be constructed in
strict accordance with the Approved Working Drawings; (ii) Tenant’s Agents shall submit schedules
of all work relating to the Tenant’s Improvements to the general contractor and the general
contractor shall, within five (5) business days of receipt thereof, inform Tenant’s agents of any
changes which are necessary thereto, and Tenant’s agents shall adhere to such corrected schedule;
(iii) Tenant shall abide by all rules made by Landlord’s



 









 




Building manager with respect to the use of freight, loading dock and service elevators, storage of
materials, coordination of work with the contractors of other tenants, and any other matter in
connection with this Tenant Work Agreement, including, without limitation, the construction of the
Tenant Improvements; and (iv) Tenant and its agents and contractors shall strictly comply with the
Conditions for Construction attached hereto as Exhibit F. Tenant shall pay a logistical
coordination fee (the “Coordination Fee”) to Landlord in an amount equal to the product of (i) five
percent (5%) multiplied by (ii) the sum of the Tenant Improvement Allowance, the Cost Overage, as
such amount may be increased hereunder, and any other amounts expended by Tenant in connection with
the design and construction of the Tenant Improvements, which Coordination Fee shall be for
services relating to the coordination of the construction of the Tenant Improvements.




     7. Tenant Improvement Allowance. Landlord shall pay cost associated with the Tenant
Improvements depicted on the Approved Final Plans, an amount which is the lesser of: (i) One
Million Sixty Two Thousand Seven Hundred Twenty Dollars and No Cents ($1,062,720.00); or (ii) the
Tenant Improvement Costs of constructing the Tenant Improvements (the “Tenant Improvement
Allowance”). Landlord and Tenant agree and acknowledge that the Tenant Improvement Allowance will
be used only for the purpose of the work depicted in the Approved Working Drawings and that the
Tenant Improvement Allowance, and all of it, shall be utilized only for the benefit of the
Premises. The Tenant Improvement Allowance may only be utilized for hard costs of construction of
the Tenant Improvements and may not be used for furniture, fixtures, equipment, or otherwise. Any
used or unfunded portion of the Tenant Improvement Allowance shall be retained by Landlord, and
without payment to Tenant, offset, deduction or otherwise. To the extent that: (i) the bid
obtained based on the Approved Working Drawings exceeds the Tenant Improvement Allowance (exclusive
of the Cabling Installation); or (ii) at any time the cost of construction of the Tenant
Improvements is expected to exceed the Tenant Improvement Allowance (regardless of whether due to
changes in the Approved Working Drawings, change orders, increases in costs, or otherwise)
(collectively a “Cost Overage”); then Tenant shall immediately deposit into a third party escrow
acceptable to Landlord a sum equal to one hundred and five percent (105%) of the Cost Overage. In
such event, the parties shall enter into an escrow agreement substantially in the form of Exhibit L
to this Lease.



     8. Payment of the Tenant Improvement Allowance. Tenant shall pay directly and in full
the cost of constructing the Tenant Improvements, including the costs of labor and materials
supplied by the general contractor or subcontractors, and shall be responsible for removing any
mechanics’ liens and obtaining mechanics’ lien waivers from the general contractor and any
subcontractor or supplier of any tier. Tenant shall provide Landlord with conditional lien
releases for current progress payments and unconditional lien releases for all prior progress
payments to its Contractor for each person who has served the Landlord with a California 20 day
preliminary notice (and the Contractor). Tenant shall provide Landlord a copy of final
unconditional lien releases from the Contractor and any subcontractor or supplier that performed
work or supplied materials for construction of the Tenant Improvements. Tenant shall promptly
record a Notice of Completion and provide a copy to the Landlord. Tenant shall provide Landlord
with a Certificate of Occupancy for the Premises. Tenant shall keep the Premises and the Building
free from any liens arising out of the work performed, materials furnished or obligations incurred
by Tenant. Should a mechanic’s lien be recorded, and Tenant fail to remove



 









 




any such lien within five (5) days after notice to do so from Landlord, Landlord may, in
addition to any other remedies; (i) post a release of mechanic’s lien bond and all amounts incurred
by Landlord in so doing shall immediately become due and payable by Tenant to Landlord as
additional rent; and (ii) satisfy the amount of the mechanic’s lien and withhold from the Tenant
Improvement Allowance an amount necessary to satisfy the lien, including attorneys fees. Landlord
shall have the right to post and keep posted on the Premises any notices that may be provided by
law, or which Landlord may deem to be proper for the protection of Landlord, the Premises and the
Building from such liens, including but not limited to a Notice of Non-Responsibility. Landlord
shall pay Tenant the Tenant Improvement Allowance on a percentage completion basis as follows.
Within fifteen (15) days of Tenant’s delivery of (i) conditional lien releases for current progress
payments from the Contractor and subcontractors or suppliers that performed work or supplied
materials for construction of Tenant Improvements; (ii) unconditional lien releases for all prior
progress payments from Contractor and subcontractors or suppliers that performed work or supplied
materials for construction of Tenant Improvements; (iii) approval of progress payments by Tenant’s
Architect and Landlord’s construction manager; (iv) Landlord’s inspection of work performed that is
associated with the progress payments to ensure that the percentage completion is accurate and that
the work is performed in a satisfactory manner in compliance with the Approved Working Drawings
(provided Landlord conducts such inspections reasonably promptly); (v) evidence satisfactory to
Landlord of payment by Tenant of the applicable draw request from the Contractor; (vi) other
reasonable evidence required by Landlord to ensure Premises and Building are lien free and the
applicable portion of the Tenant Improvements have been paid for by Tenant, Landlord shall pay
eighty-five (85%) percent of each progress payment submitted by Tenant. If Landlord does not pay
the applicable progress payment on account of the Tenant Improvement Allowance in accordance with
the terms of this Section: (i) after a ten (10) day notice to cure from Tenant to Landlord; (ii)
Landlord being in possession of all documents required hereunder; and (iii) items (i) through (vi)
above have been complied with; Tenant shall be entitled to deduct unpaid progress payments from
Base Rent for the next month’s rent payment. Tenant shall provide Landlord with notice of the
actual amount of Base Rent deducted and a reference to the unpaid progress payment. Within thirty
(30) days of Tenant’s completion of the Tenant Improvements and delivery of: (i) a recorded notice
of completion; (ii) final unconditional lien releases from all persons who might have mechanic’s
lien rights; (iii) a affidavit from the Tenant’s general contractor that all debts have been paid
with respect to the Tenant Improvements in a form equivalent to AIA G706; (iv) as built drawings of
the Tenant Improvements; (v) Landlord has inspected the Tenant Improvements and confirmed that the
work is first class in nature, and the work is in compliance with the Approved Working Drawings;
(vi) evidence that Tenant has paid for the entire cost of constructing the Tenant Improvements,
including labor and materials; and (vii) any other evidence reasonably required by Landlord to
ensure the Premises and the Building are lien free; Landlord shall pay Tenant the remaining
balance of Tenant Improvement Allowance (except to the extent the cost of the Tenant Improvements
in less than the Tenant Improvement Allowance). If Landlord does not pay the remaining balance of
the Tenant Improvement Allowance in accordance with the terms of this Section: (i) after a ten (10)
day notice
 to cure from Tenant to Landlord; (ii) Landlord being in possession of all documents
required hereunder; and (iii) items (i) through (vii) above have been complied with; Tenant shall
be entitled to deduct the remaining balance of the Tenant Improvement Allowance from Base Rent for
the next month’s rent payment. Tenant shall provide Landlord with notice of the actual amount of Base Rent deducted and a reference to the
unpaid progress payment.




 









 








     9. Indemnity/Insurance. Tenant’s indemnity of Landlord as set forth in Section 13 of
this Lease shall also apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to any act or omission of Tenant or Tenant’s agents, or anyone
directly or indirectly employed by any of them in the construction or design of the Tenant
Improvements, or in connection with Tenant’s non-payment of any amount arising out of the Tenant
Improvements and/or Tenant’s disapproval of all or any portion of any request for payment.
Contractor(s) shall maintain all insurance specified in the Conditions for Construction attached
hereto as Exhibit F. Tenant shall maintain builders risk insurance on the Tenant
Improvements, with coverage in the amount of the replacement cost of the Tenant Improvements, and
shall be in a form and with deductibles reasonably acceptable to Landlord. In the event the
Building or Premises are damaged or destroyed, Tenant shall use all available insurance proceeds to
rebuild the Tenant Improvements, unless either of the parties terminates this Lease pursuant to the
express termination provisions of Section 17 of the Lease.



     10. Contractor Warranties. Each of Tenant’s Agents shall guarantee to Tenant and for
the benefit of Landlord that the portion of the Tenant Improvements for which it is responsible
shall be free from any defects in workmanship and materials for a period of not less than one (1)
year from the date of completion thereof. Each of Tenant’s Agents shall be responsible for the
replacement or repair, without additional charge, of all work done or furnished in accordance with
its contract that shall become defective within one (1) year after the later to occur of (i)
completion of the work performed by such contractor or subcontractors and (ii) the Lease
Commencement Date. The correction of such work shall include, without additional charge, all
additional expenses and damages incurred in connection with such removal or replacement of all or
any part of the Tenant Improvements, and/or the Building and/or common areas that may be damaged or
disturbed thereby. All such warranties or guarantees as to materials or workmanship of or with
respect to the Tenant Improvements shall be contained in the Contract or subcontract and shall be
written such that such guarantees or warranties shall inure to the benefit of both Landlord and
Tenant, as their respective interests may appear, and can be directly enforced by either. Tenant
covenants to give to Landlord any assignment or other assurances which may be necessary to effect
such right of direct enforcement.



     11. Miscellaneous.



     11.1 Tenant’s Representative. Tenant has designated Cole Construction Management,
Attention: Nan Reed as its sole representative with respect to the matters set forth in this
Tenant Work Agreement, who shall have full authority and responsibility to act on behalf of the
Tenant as required in this Tenant Work Agreement.



     11.2 Landlord’s Representative. Landlord has designated Scott Kirkpatrick, Colliers
Parrish, as its sole representative with respect to the matters set forth in this Tenant Work
Agreement, who, until further notice to Tenant, shall have full authority and responsibility to act
on behalf of the Landlord as required in this Tenant Work Agreement.



 









 





     11.3 Time of the Essence in This Tenant Work Agreement. Unless otherwise indicated,
all references herein to a “number of days” shall mean and refer to calendar days. If any item
requiring approval is timely disapproved by Landlord, the procedure for preparation of the document
and approval thereof shall be repeated until the document is approved by Landlord.



     11.4 Tenant’s Lease Default. Notwithstanding any provision to the contrary contained
in this Lease, if an event of default as described in Article 20 of the Lease or this Tenant Work
Agreement has occurred at any time on or before the substantial completion of the Premises, then
(i) in addition to all other rights and remedies granted to Landlord pursuant to this Lease,
Landlord shall have the right to withhold payment of all or any portion of the Tenant Improvement
Allowance, and (ii) all other obligations of Landlord under the terms of this Tenant Work Agreement
shall be forgiven until such time as such default is cured pursuant to the terms of this Lease.



     11.5 Landlord Inspections. Landlord shall have the right to inspect the Tenant
Improvements at all times, provided however, that except as otherwise set forth in this Lease,
Landlord’s failure to inspect the Tenant Improvements shall in no event constitute a waiver of any
of Landlord’s rights hereunder nor shall Landlord’s inspection of the Tenant Improvements
constitute Landlord’s approval of the same. Should Landlord disapprove any portion of the Tenant
Improvements, Landlord shall notify Tenant in writing of such disapproval and shall specify the
items disapproved in accordance with Section 6 of this Lease. Any defects or deviations in, and/or
disapproval by Landlord of, the Tenant Improvements shall be rectified by Tenant at no expense to
Landlord, provided however, that in the event Landlord determines that a defect or deviation exists
or disapproves of any matter in connection with any portion of the Tenant Improvements and such
defect, deviation or matter might adversely affect the mechanical, electrical, plumbing, heating,
ventilating and air conditioning or life-safety systems of the Building, the structure or exterior
appearance of the Building or any other tenant’s use of such other tenant’s leased premises,
Landlord may, take such action as Landlord deems necessary, at Tenant’s expense and without
incurring any liability on Landlord’s part, to correct any such defect, deviation and/or matter,
including, without limitation, causing the cessation of performance of the construction of the
Tenant Improvements until such time as the defect, deviation and/or matter is corrected to
Landlord’s satisfaction.



     11.6 Meetings. Commencing upon the Effective Date of this Lease, Tenant shall hold
weekly meetings at a reasonable time, with the Architect and the Contractor regarding the progress
of the preparation of construction drawings and the construction of the Tenant Improvements, which
meetings shall be held at the Project, and Landlord and/or its agents shall receive reasonable
prior notice of, and shall have the right to attend, all such meetings, and, upon Landlord’s
request, certain of Tenant’s agents shall attend such meetings or at Tenant’s discretion attend by
telephone call in. In addition, minutes shall be taken at all such meetings, a copy of which
minutes shall be promptly delivered to Landlord. One such meeting each month shall include the
review of Contractor’s current request for payment.



     11.7. Force Majuere. This Work Letter and the obligations and rights of the parties hereunder
is expressly subject to Section 34.23 of the Lease.



 









 





EXHIBIT C




PLANS




[attached on immediately following page]




 









 











 









 








EXHIBIT D




RULES AND REGULATIONS



A. General Rules and Regulations. The following rules and regulations govern the use of
the Building, Project and common areas. Tenant will be bound by such rules and regulations and
agrees to cause Tenant’s Authorized Users, its employees, subtenants, assignees, contractors,
suppliers, customers and invitees to observe the same.



1. Except as specifically provided in the Lease to which these Rules and Regulations are attached,
no sign, placard, picture, advertisement, name or notice may be installed or displayed on any part
of the outside or inside of the Building or the Development without the prior written consent of
Landlord. Landlord will have the right to remove, at Tenant’s expense and without notice, any sign
installed or displayed in violation of this rule. All approved signs or lettering on doors and
walls are to be printed, painted, affixed or inscribed at the expense of Tenant and under the
direction of Landlord by a person or company designated or approved by Landlord.



2. If Landlord objects in writing to any curtains, blinds, shades, screens or hanging plants or
other similar objects attached to or used in connection with any window or door of the Premises, or
placed on any windowsill, which is visible from the exterior of the Premises, Tenant will
immediately discontinue such use. Tenant agrees not to place anything against or near glass
partitions or doors or windows which may appear unsightly from outside the Premises including from
within any interior common areas.



3. Tenant will not obstruct any sidewalks, halls, passages, exits, entrances, elevators,
escalators, or stairways of the Development. The halls, passages, exits, entrances, elevators and
stairways are not open to the general public, but are open, subject to reasonable regulations, to
Tenant’s business invitees. Landlord will in all cases retain the right to control and prevent
access thereto of all persons whose presence in the reasonable judgment of Landlord would be
prejudicial to the safety, character, reputation and interest of the Development and its tenants,
provided that nothing herein contained will be construed to prevent such access to persons with
whom any tenant normally deals in the ordinary course of its business, unless such persons are
engaged in illegal or unlawful activities. No tenant and no employee or invitee of any tenant will
go upon the roof of the Building.



4. Tenant will not obtain for use on the Premises ice, drinking water, food, food vendors,
beverage, towel or other similar services or accept barbering or bootblacking service upon the
Premises, except at such reasonable hours and under such reasonable regulations as may be fixed by
Landlord. Landlord expressly reserves the right to absolutely prohibit solicitation, canvassing,
distribution of handbills or any other written material, peddling, sales and displays of products,
goods and wares in all portions of the Development except as may be expressly permitted under the
Lease. Landlord reserves the right to restrict and regulate the use of the common areas of the
Development and Building by invitees of tenants providing services to tenants on a periodic or
daily basis including food and beverage vendors. Such restrictions may include limitations on
time, place, manner and duration of access to a tenant’s premises for such purposes. Without
limiting the foregoing, Landlord may require that such parties use service elevators, halls, passageways and stairways for such purposes to preserve access within the
Building for tenants and the general public.




 









 







5. Landlord reserves the right to require tenants to periodically provide Landlord with a written
list of any and all business invitees which periodically or regularly provide goods and services to
such tenants at the premises. Landlord reserves the right to preclude all vendors from entering or
conducting business within the Building and the Development if such vendors are not listed on a
tenant’s list of requested vendors.



6. Landlord reserves the right to exclude from the Building between the hours of 6 p.m. and 7 a.m.
the following business day, or such other hours as may be established from time to time by
Landlord, and on Sundays and legal holidays, any person unless that person is known to the person
or employee in charge of the Building or has a pass or is properly identified. Tenant will be
responsible for all persons for whom it requests passes and will be liable to Landlord for all acts
of such persons. Landlord will not be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. Landlord reserves the right to prevent
access to the Building in case of invasion, mob, riot, public excitement or other commotion by
closing the doors or by other appropriate action.



7. The directory of the Building or the Development will be provided exclusively for the display of
the name and location of tenants only and Landlord reserves the right to exclude any other names
therefrom.



8. All cleaning and janitorial services for the Development and the Premises will be provided
exclusively through Landlord, and except with the written consent of Landlord, no person or persons
other than those approved by Landlord will be employed by Tenant or permitted to enter the
Development for the purpose of cleaning the same. Tenant will not cause any unnecessary labor by
carelessness or indifference to the good order and cleanliness of the Premises.



9. Landlord will furnish Tenant, free of charge, with two keys to each entry door lock in the
Premises. Landlord may make a reasonable charge for any additional keys. Tenant shall not make or
have made additional keys, and Tenant shall not alter any lock or install any new additional lock
or bolt on any door of the Premises. Tenant, upon the termination of its tenancy, will deliver to
Landlord the keys to all doors which have been furnished to Tenant, and in the event of loss of any
keys so furnished, will pay Landlord therefore.



10. If Tenant requires telegraphic, telephonic, burglar alarm, satellite dishes, antennae or
similar services, it will first obtain Landlord’s approval, and comply with, Landlord’s reasonable
rules and requirements applicable to such services, which may include separate licensing by, and
fees paid to, Landlord.



11. Freight elevator(s) will be available for use by all tenants in the Building, subject to such
reasonable scheduling as Landlord, in its discretion, deems appropriate. No equipment, materials,
furniture, packages, supplies, merchandise or other property will be received in the Building or
carried in the elevators except between such hours and in such elevators as may be designated by
Landlord. Tenant’s initial move in and subsequent deliveries of bulky items, such




 









 







as furniture, safes and similar items will, unless otherwise agreed in writing by Landlord, be made
during the hours of 6:00 p.m. to 6:00 a.m. or on Saturday or Sunday. Deliveries during normal
office hours shall be limited to normal office supplies and other small items. No deliveries will
be made which impede or interfere with other tenants or the operation of the Building.



12. Tenant will not place a load upon any floor of the Premises which exceeds the load per square
foot which such floor was designed to carry and which is allowed by law. Landlord will have the
right to reasonably prescribe the weight, size and position of all safes, heavy equipment, files,
materials, furniture or other property brought into the Building. Heavy objects will, if
considered necessary by Landlord, stand on such platforms as determined by Landlord to be necessary
to properly distribute the weight, which platforms will be provided at Tenant’s expense. Business
machines and mechanical equipment belonging to Tenant, which cause noise or vibration that may be
transmitted to the structure of the Building or to any space therein to such a degree as to be
objectionable to any tenants in the Building or Landlord, are to be placed and maintained by
Tenant, at Tenant’s expense, on vibration eliminators or other devises sufficient to eliminate
noise or vibration. Tenant will be responsible for all structural engineering required to
determine structural load, as well as the expense thereof. The persons employed to move such
equipment in or out of the Building must be reasonably acceptable to Landlord. Landlord will not
be responsible for loss of, or damage to, any such equipment or other property from any cause, and
all damage done to the Building by maintaining or moving such equipment or other property will be
repaired at the expense of Tenant.



13. Tenant will not use or keep in the Premises any kerosene, gasoline or inflammable or
combustible fluid or material other than those limited quantities necessary for the operation or
maintenance of office equipment. Tenant will not use or permit to be used in the Premises any foul
or noxious gas or substance, or permit or allow the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by reason of noise, odors
or vibrations, nor will Tenant bring into or keep in or about the Premises any birds or animals.



14. Tenant will not use any method of heating or air conditioning other than that supplied by
Landlord without Landlord’s prior written consent.



15. Tenant will not waste electricity, water or air conditioning and agrees to cooperate fully with
Landlord to assure the most effective operation of the Building’s heating and air conditioning and
to comply with any governmental energy-saving rules, laws or regulations of which Tenant has actual
notice, and will refrain from attempting to adjust controls. Tenant will keep corridor doors
closed, and shall keep all window coverings pulled down.



16. Landlord reserves the right, exercisable without notice and without liability to Tenant, to
change the name and street address of the Building. Without the prior written consent of Landlord,
which Landlord may deny with or without cause, Tenant will not use the name, photograph or likeness
of the Building or the Development in connection with or in promoting or advertising the business
of Tenant except as Tenant’s address.




 









 







17. Tenant will close and lock the doors of its Premises and entirely shut off all water faucets or
other water apparatus, and lighting or gas before Tenant and its employees leave the Premises.
Tenant will be responsible for any damage or injuries sustained by other tenants or occupants of
the Building or by Landlord for noncompliance with this rule.



18. The toilet rooms, toilets, urinals, wash bowls and other apparatus will not be used for any
purpose other than that for which they were constructed and no foreign substance of any kind
whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from
any violation of this rule will be borne by the tenant who, or whose employees or invitees, break
this rule. Cleaning of equipment of any type is prohibited. Shaving is prohibited.



19. Tenant will not sell, or permit the sale at retail of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise to the general public in or on the Premises.
Tenant will not use the Premises for any business or activity other than that specifically provided
for in this Lease. Tenant will not conduct, nor permit to be conducted, either voluntarily or
involuntarily, any auction upon the Premises without first having obtained Landlord’s prior written
consent, which consent Landlord may withhold in its sole and absolute discretion.



20. Tenant will not install any radio or television antenna, loudspeaker, satellite dishes or other
devices on the roof(s) or exterior walls of the Building or the Development. Tenant will not
interfere with radio or television broadcasting or reception from or in the Development or
elsewhere.



21. Except for the ordinary hanging of pictures and wall decorations, Tenant will not mark, drive
nails, screw or drill into the partitions, woodwork or plaster or in any way deface the Premises or
any part thereof, except in accordance with the provisions of the Lease pertaining to alterations.
Landlord reserves the right to direct electricians as to where and how telephone and telegraph
wires are to be introduced to the Premises. Tenant will not cut or bore holes for wires. Tenant
will not affix any floor covering to the floor of the Premises in any manner except as approved by
Landlord. Tenant shall repair any damage resulting from noncompliance with this rule.



22. Tenant will not install, maintain or operate upon the Premises any vending machines without the
written consent of Landlord.



23. Landlord reserves the right to exclude or expel from the Development any person who, in
Landlord’s judgment, is intoxicated or under the influence of liquor or drugs or who is in
violation of any of the Rules and Regulations of the Building.



24. Tenant will store all its trash and garbage within its Premises or in other facilities provided
by Landlord. Tenant will not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and
refuse disposal is to be made in accordance with directions issued from time to time by Landlord.



25. The Premises will not be used for lodging or for the storage of merchandise held for sale to
the general public, or for lodging or for manufacturing of any kind, nor shall the Premises be used
for any improper, immoral or objectionable purpose. No cooking will be done or permitted




 









 







on the Premises without Landlord’s consent, except the use by Tenant of Underwriters’ Laboratory
approved equipment for brewing coffee, tea, hot chocolate and similar beverages shall be permitted,
and the use of a microwave oven for employees use will be permitted, provided that such equipment
and use is in accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.



26. Neither Tenant nor any of its employees, agents, customers and invitees may use in any space or
in the public halls of the Building or the Development any hand truck except those equipped with
rubber tires and side guards or such other material-handling equipment as Landlord may approve.
Tenant will not bring any other vehicles of any kind into the Building.



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



28. Tenant assumes any and all responsibility for protecting its Premises from theft, robbery and
pilferage, which includes keeping doors locked and other means of entry to the Premises closed.



29. To the extent Landlord reasonably deems it necessary to exercise exclusive control over any
portions of the common areas for the mutual benefit of the tenants in the Building or the
Development, Landlord may do so subject to reasonable, non-discriminatory additional rules and
regulations.



30. Landlord may prohibit smoking in the Building and may require Tenant and any of its employees,
agents, clients, customers, invitees and guests who desire to smoke, to smoke within designated
smoking areas within the Development.



31. Tenant’s requirements will be attended to only upon appropriate application to Landlord’s asset
management office for the Development by an authorized individual of Tenant. Employees of Landlord
will not perform any work or do anything outside of their regular duties unless under special
instructions from Landlord, and no employee of Landlord will admit any person (Tenant or otherwise)
to any office without specific instructions from Landlord.



32. These Rules and Regulations are in addition to, and will not be construed to in any way modify
or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease.
Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or any
other tenant, but no such waiver by Landlord will be construed as a waiver of such Rules and
Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing
any such Rules and Regulations against any or all of the tenants of the Development.



33. Landlord reserves the right to make such other and reasonable and non-discriminatory Rules and
Regulations as, in its judgment, may from time to time be needed for safety and security, for care
and cleanliness of the Development and for the preservation of good order therein. Tenant agrees
to abide by all such Rules and Regulations herein above stated and any additional reasonable and
non-discriminatory rules and regulations which are adopted. Tenant is responsible for the
observance of all of the foregoing rules by Tenant’s employees, agents, clients, customers,
invitees and guests.




 









 







B. Parking Rules and Regulations. The following rules and regulations govern the use of
the parking facilities which serve the Building. Tenant will be bound by such rules and
regulations and agrees to cause its employees, subtenants, assignees, contractors, suppliers,
customers and invitees to observe the same:



1. Tenant will not permit or allow any vehicles that belong to or are controlled by Tenant or
Tenant’s employees, subtenants, customers or invitees to be loaded, unloaded or parked in areas
other than those designated by Landlord for such activities. No vehicles are to be left in the
parking areas overnight and no vehicles are to be parked in the parking areas other than normally
sized passenger automobiles, motorcycles and pick-up trucks. No extended term storage of vehicles
is permitted.



2. Vehicles must be parked entirely within painted stall lines of a single parking stall.



3. All directional signs and arrows must be observed.



4. The speed limit within all parking areas shall be five (5) miles per hour.



5. Parking is prohibited: (a) in areas not striped for parking; (b) in aisles or on ramps; (c)
where “no parking” signs are posted; (d) in cross-hatched areas; and (e) in such other areas as may
be designated from time to time by Landlord or Landlord’s parking operator.



6. Landlord reserves the right, without cost or liability to Landlord, to tow any vehicle if such
vehicle’s audio theft alarm system remains engaged for an unreasonable period of time.



7. Washing, waxing, cleaning or servicing of any vehicle in any area not specifically reserved for
such purpose is prohibited.



8. Landlord may refuse to permit any person to park in the parking facilities who violates these
rules with unreasonable frequency, and any violation of these rules shall subject the violator’s
car to removal, at such car owner’s expense. Tenant agrees to use its best efforts to acquaint its
employees, subtenants, assignees, contractors, suppliers, customers and invitees with these parking
provisions, rules and regulations.



9. Parking stickers, access cards, or any other device or form of identification supplied by
Landlord as a condition of use of the parking facilities shall remain the property of Landlord.
Parking identification devices, if utilized by Landlord, must be displayed as requested and may not
be mutilated in any manner. The serial number of the parking identification device may not be
obliterated. Parking identification devices, if any, are not transferable and any device in the
possession of an unauthorized holder will be void. Landlord reserves the right to refuse the sale
of monthly stickers or other parking identification devices to Tenant or any of its agents,
employees or representatives who willfully refuse to comply with these rules and regulations and
all unposted city, state or federal ordinances, laws or agreements.



10. Loss or theft of parking identification devices or access cards must be reported to the
management office in the Development immediately, and a lost or stolen report must be filed by the
Tenant or user of such parking identification device or access card at the time. Landlord has the
right to exclude any vehicle from the parking facilities that does not have a parking




 









 







identification device or valid access card. Any parking identification device or access card which
is reported lost or stolen and which is subsequently found in the possession of an unauthorized
person will be confiscated and the illegal holder will be subject to prosecution.



11. All damage or loss claimed to be the responsibility of Landlord must be reported, itemized in
writing and delivered to the management office located within the Development within ten (10)
business days after any claimed damage or loss occurs. Any claim not so made is waived. Landlord
is not responsible for damage by water or fire, or for the acts or omissions of others, or for
articles left in vehicles. In any event, the total liability of Landlord, if any, is limited to
Two Hundred Fifty Dollars ($250.00) for all damages or loss to any car. Landlord is not
responsible for loss of use.



12. The parking operators, managers or attendants are not authorized to make or allow any
exceptions to these rules and regulations, without the express written consent of Landlord. Any
exceptions to these rules and regulations made by the parking operators, managers or attendants
without the express written consent of Landlord will not be deemed to have been approved by
Landlord.



13. Landlord reserves the right, without cost or liability to Landlord, to tow any vehicles which
are used or parked in violation of these rules and regulations.



14. Landlord reserves the right from time to time to modify and/or adopt such other reasonable and
non-discriminatory rules and regulations for the parking facilities as it deems reasonably
necessary for the operation of the parking facilities.




 









 








EXHIBIT E




FORM OF LEASE COMMENCEMENT AGREEMENT



THIS LEASE COMMENCEMENT AGREEMENT (“this Agreement”) is entered into this ___day of 200___, by and
between BIT HOLDINGS FIFTY-SIX, INC., a Maryland corporation (“Landlord”), and TALEO CORPORATION, a
___(“Tenant”).




EXPLANATORY STATEMENT



A. On                     , 200___, Landlord and Tenant entered into a lease (the “Lease”) covering certain
premises located on the fourth (4th) floor(s), commonly known as Suite 400 (the
“Premises”) of the office building located at 4140 Dublin Boulevard, as outlined on Exhibit
A to the Lease.



B. Section 2.2 of the Lease requires Landlord and Tenant to execute an amendment to the Lease
setting forth the Lease Commencement Date, the Lease Expiration Date, and facsimile number at the
Premises.



NOW, THEREFORE, in consideration of the foregoing, of the mutual promises of the parties hereto
contained herein, and of other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties hereto agree to amend the Lease as follows:




     1. Pursuant to the provisions of Section 2.2 of the Lease, Landlord and Tenant confirm that
                     is the Lease Commencement Date, that                      is the Lease Expiration Date, that
                     is the facsimile number of Tenant at the Premises, and that the number of Tenant’s
Parking Spaces for the first (1st) year after the Lease Commencement Date is                     .



     2. Terms not defined herein will have the meaning provided therefore in the Lease. Except as
provided herein, all other terms and conditions of the Lease remain in full force and effect.


This Agreement is agreed to by Landlord and Tenant who have executed this Agreement as of the date
first above written.




	 	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:
	 
	 	 	 	 	 	 
	BIT HOLDINGS FIFTY-SIX, INC.,	 	TALEO CORPORATION,
	a Maryland corporation	 	a Delaware corporation
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 





 









 






EXHIBIT F




CONDITIONS FOR CONSTRUCTION




     The following rules and regulations are hereby made a part of any and all agreements entered
into between the building owner, BIT Holdings Fifty-Six, Inc., a Maryland corporation (“Owner”),
the tenant identified at the end of these Conditions for Construction (“Tenant”) and the
undersigned general contractor or contractor responsible for the project (“Contractor”), or any of
them.



     These rules for construction pertain to any and all alterations, renovations, retrofits and
construction projects in or upon 4120 Dublin Boulevard, 4140 Dublin Boulevard and 4160 Dublin
Boulevard in the City of Dublin, Alameda County, California.



DOCUMENTS REQUIRED




     1. Prior to beginning any work, the contractor is to supply the following to Owner for review
and approval:



     a. Evidence of a current valid California General Building Contractor’s license.



     b. Evidence of the Contractor’s ability to obtain performance and payment bonds for the
project.



     c. Contractor must submit a copy of all applicable permits required by the city, county, state
or federal agencies to Owner. Procurement and payment for all permits are to be included as
Contractor’s cost of the construction project. At the completion of the construction, a copy of
all approved permit inspections and plans must be delivered to building management.



     d. A list of all Subcontractors, including 24-hour contact numbers for key personnel.



     2. Prior to commencement of work, Contractor must provide to Owner an accurate and
comprehensive schedule of all work, including phasing, if applicable, from project start through
completion. Prior to commencing work, a pre-work conference will be held with representatives of
building management and Contractor to discuss the project scope and schedule.



     3. A signed copy of these Conditions for Construction by Contractor will be delivered prior to
commencement of any work.



INSURANCE




     4. Prior to the commencement of work, Contractor shall furnish Owner with insurance
certificates certifying that the insurance coverage specified herein are in force at Contractor’s
sole cost and expense, and that Owner will be given 60-day prior notice of cancellation or material
change.



 









 





     a. Worker’s Compensation Insurance with statutory benefits and Employer’s Liability insurance
with limits of not less than $1,000,000 per occurrence of bodily injury by accident; $1,000,000 per
each employee and aggregate per policy year for bodily injury by disease. This policy shall
include a waiver of subrogation in favor of Contractor and Owner.



     b. Comprehensive Commercial General Liability Insurance providing not less than $2,000,000 per
occurrence, with a $2,000,000 general aggregate per project. The General Liability insurance
policy shall include a $1,000,000 Products and Completed Operations aggregate. For insurance that
is on a claims-made basis, the Completed Operations coverage shall remain in effect for not less
than 5 years following completion of a project. The policy shall also include contractual
liability and severability of interest clauses.



     c. Comprehensive Automobile Liability providing not less than $1,000,000 combined single limit
per occurrence of bodily injury and property damage.



     d. Umbrella Liability Insurance with limits of not less than $3,000,000 per occurrence and
$3,000,000 general aggregate per policy, with $3,000,000 Products and Completed Operations
aggregate. If the insurance is on a claims-made basis, the Completed Operations coverage is to
remain in place for 5 years after completion of project.



     Insurance coverage is to be from companies with an A.M. Best rating of not less than A+ or
better in amount and affording levels of coverage equal to those required by the Tenant or the
Owner in which the work site is located or as set forth above, whichever is greater.



     Insurance certificates must be prepared on Acord forms, must reflect that the insurance
policies name Owner as an additional insured, and must reflect that the coverage afforded to the
additional insured by the liability policies is primary and that any insurance carried by Owner is
strictly excess and secondary and shall not contribute with Contractor’s liability insurance.



WORK RULES AND REGULATIONS




     5. Building and Construction Hours are as follows:



	 	 	 	 	 
	 

	 	Monday thru Friday:
	 	 8:00 a.m. – 6:00 p.m. (Building Hours)
	 

	 	Saturdays & Sundays:
	 	 With notice to Building Management






     Work performed at a time other than during Building Hours requires advance prior written
notice by Contractor. Building Management approval must be obtained before work may commence.



     6. Additional Security, Elevator and Building Engineer charges may be incurred as solely
determined by building management and will be included as a cost of the Construction to the
Contractor.



 









 





     7. Any and all work performed by Contractor must be performed in a first-class manner.
Materials and workmanship must be equal to or of better quality and grade than that used for
existing improvements.



     8. At Owner sole discretion, any work that does not meet building standards may be ordered
removed and redone at Contractor’s cost.



     9. Owner approval of, or requirements concerning, all or any portion of the work or any plans,
specifications, or contractors or subcontractors for the design or installation thereof shall not
be deemed a warranty as to the adequacy of the design, workmanship or quality of materials or
installation or their compliance with applicable laws, codes, regulations or requirements of any
city, state or federal agency and Owner shall have no responsibility or liability for the same.



     10. All work performed must not interrupt or disturb building operations, or prevent any
tenant’s quiet enjoyment of their premises. All core drilling, roto-hammering, installation of
tack strips or other construction that may cause excessive noise shall be done before or after
Building Hours unless special arrangements are made through building management.



     11. Owner, at its sole discretion, reserves the right to refuse entrance to employees of any
Contractor or Subcontractor who cannot meet and maintain the requisite standard of workmanship
and/or who violate any or all of the terms enumerated herein.



     12. Contractor is required to maintain cleanliness throughout. Do not clutter or block
hallways, exits, service elevators lobbies and electrical closets. Provide walk-off mats at the
entrance to the construction areas, as well as the entrance to the service elevator. If clean-up
is not performed daily, Owner will clean up at Contractor’s cost.



     13. Contractor must not secure any fire protection system or fill any fire protection system
without prior approval of building management or building engineer.



     14. Contractor must not secure or start any mechanical or electrical system without prior
approval of building management or building engineer.



     15. Contractor must not secure or open any domestic water, condenser water, chilled water, hot
water heating, and domestic hot water or steam system without prior approval of building management
or building engineer.



     16. Requests to shutdown any system must be approved in advance and coordinated with building
engineer.



     17. Contractor must take special measures to prevent false alarms when performing the
following:



     a. Welding



     b. Soldering



     c. Cutting carpet with a hot knife



     d. Painting with lacquers



 









 





     18. Contractor must ensure that fire extinguishers and all other safety measures are employed
to prevent fire. Contractor can request that the smoke detectors in the area of work be temporary
disabled.



     19. No CD or cassette players, radios or similar pieces of equipment are allowed on the
premises at any time.



     20. Construction personnel, unless otherwise designated, shall use only the freight elevator.
Roof hatches in freight elevators will not be opened without the presence of the elevator
maintenance company and all costs associated with the need for elevator maintenance personnel shall
be included in the Construction cost. Any damage to any elevator caused by the construction shall
be borne by the Contractor.



     21. Contractor must not secure any life safety system, enable any life safety system or test
any life safety system without prior approval of building management or building engineer. Life
safety system must be operational 24 hours per day.



     22. Contractor shall ensure that the following procedures are followed with respect to the
life safety systems:



     a. All life safety devices and systems installed in the premises must be tested, including
alarms, smoke detectors, speakers, manual pull stations, water flow, trouble alarms and strobe
lights. All other systems must be tested for proper operation. All testing is to be coordinated
with building management or building engineer before or after Building Hours.



     b. Copies of all warranties and guarantees must be provided to Owner along with operating and
maintenance manuals upon completion of the construction.



     c. Contractor shall instruct the building engineer in the operation and maintenance of the
equipment and systems installed.



     23. At the completion of the job, Contractor must provide Owner a complete and accurate set
of as-built drawings. These must include but not be limited to:



     a. Floor plans at 1/8” – 1’0” scale showing all partitions, location of glass, doors,
built-ins, millwork and cabinets, sinks and plumbing locations and any other generally applicable
information.



     b. Electrical plans at 1/8” = 1’0” scale showing all electrical outlets, telephone outlets,
panel schedules and special outlets (CRT’s dedicated circuits, etc.).



     c. Life Safety plans at 1/8” = 1’0” scale showing all Life Safety devices (duct runs,
detectors, strobes, pull stations, etc.).



     d. Reflected ceiling plans at 1/8” = 1’0” scale showing the HVAC system (duct runs,
troffers, mixing boxes, special units, etc.) and sprinkler locations.



     All as-builts must show all new work as well as all previous conditions that remain. Notation
of any unique or special circumstances pertaining to construction must be made.



 









 





     HVAC testing and balancing is to be performed by an independent contractor. Upon satisfactory
completion of balance and operation test, one set of tenant AC drawings and an air balance report,
according to the AABC standards, shall be submitted to building management.



     Throughout the area of alterations, Contractor shall ensure reasonable access to all HVAC
equipment (for example, fire dampers, control devices, valves) and other items that may require
inspection, service or maintenance.



     24. At the completion of construction Contractor must submit to Owner a signed waiver and
release of mechanic’s lien rights from each subcontractor, material supplier and laborer,
containing the appropriate provisions as reasonably determined by Owner.



     25. Owner shall not be liable to Contractor, and Contractor hereby waives all claims against
such parties for, and releases such parties from liability for, any loss, injury or other damage to
person or property on or about the work site, the building at which the work site is located, the
Building’s garage, the parcel(s) of land on which the building and garage are located or the other
improvements on the Land. Contractor shall hold Owner, and the constituent shareholders, partners
or other owners thereof, and all of their agents, contractors, servants, officers, directors,
employees and licensees (collectively, the “Indemnitees”) harmless from and indemnify and defend
the Indemnitees against any and all claims, liabilities, damages, costs and expenses including
reasonable attorneys’ fees and costs incurred in defending against the same, whether arising before
or after completion of the work and in any manner directly or indirectly caused, occasioned by or
contributed to by (a) the acts or omissions of Contractor or any agents, employees, subcontractors,
licensees, material suppliers, guests or invitees of Contractor (collectively with Contractor,
“Contractor Party”) in, on or about the Project or (b) any construction or other work undertaken by
or on behalf of any Contractor Party, or (c) any breach of these Conditions of Construction by any
of the Contractor Parties, or (d) any accident, injury or damage, howsoever and by whomsoever
caused, to any person or property, occurring in, on or about the work site. The foregoing release,
waiver, and covenant to indemnify, defend and hold harmless shall apply even in the event of the
fault or negligence, whether active or passive, or strict liability of Owner, to the fullest extent
permitted by law, except to the extent such claims are caused directly by the willful misconduct
Owner or their respective authorized representatives.



 









 





	 	 	 
	Owner:

	 	BIT HOLDINGS FIFTY-SIX, INC.
	 
	 	 
	Work Site:

	 	4140 Dublin Boulevard, Dublin, California 94568, Suite 400
	 
	 	 
	Tenant:

	 	Taleo Corporation, a Delaware corporation





The undersigned understands and agrees to all the provisions stated herein.



Contractor: Novo Construction, a                                          Date: March ___, 2006




	 	 	 	 
	By:
	 	 
	 

	 	 
	 

	 	(Signature)






Printed Name:                                         




Title:                                         




License No.                                          License Type:                    




 









 





EXHIBIT G




[Intentionally Omitted]




 









 





EXHIBIT H




AFL-CIO Building Investment Trust Participants

(Listed Alphabetically)




AFL-CIO Building Investment Trust — List of Investors 7/1/05




National Football League Players Association Defined Benefit Plan




Bricklayers and Trowel Trades International Pension Fund




AFL-CIO Staff Retirement Plan




Laborers International Union of North America Staff Pension Plan




Bridge and Iron Workers Staff Retirement Plan




Service Employees International Union Master Pension Trust




I.B.E.W. District Ten N. E. C. A. Individual Equity Retirement Plan




Plumbers and Pipefitters National Pension Fund




Stationary Engineers Local No. 39 Pension Plan




Eighth District Electrical Pension Fund




Upper Peninsula Plumbers and Pipefitters Pension Fund




National Roofing Industry Pension Fund




IBEW Local 673 Pension Fund




Bricklayers Local Union #19 of Indiana Retirement Plan




Electrical Workers Union Local No. 591 Retirement Trust




National Automatic Sprinkler Industry Pension Fund




Iron Worker Local Number 498 Pension Plan




Omaha Construction Industry Pension Plan




Asbestos Workers Local No. 23 Pension Fund




Will County Local 174 Carpenters Supplemental Pension Plan




Bakery and Confectionery Union and Industry International Pension Fund




UFCW International Union Pension Plan for Employees




International Association Of Full-Time Salaried Officers and Employees of Outside Local Unions and District Councils Pension Plan




Central Pension Fund of the International Union of Operating Engineers and Participating Employers




 









 





Ohio Local No. 1 Operating Plasterers and Cement Masons Pension Fund and Plan




Indiana State Council of Carpenters Pension Fund




California Public Employees Retirement System




Roofers Union Local 33 Pension Fund




Sheet Metal Workers’ Pension Fund of Local Union #19




Pension Hospitalization Benefit Plan of the Electrical Industry — Pension Trust Fund




NECA-IBEW Local 176 Pension Fund




NECA-IBEW Pension Trust Fund




Carpenters Pension Fund of Illinois




IBEW Local #380 Pension Plan




Plumbers Local #8 Pension Plan




Cascade Pension Trust Fund




International Brotherhood of Painters and Allied Trades Union & Industry Pension Fund




Local 68 Engineers Annuity Fund




Electrical Workers Pension Fund, Local 103, IBEW




Pacific Coast Roofers Pension Plan




Carpenters Local #496 Pension Trust Fund




Operating Engineers Construction Industry and Miscellaneous Pension Fund




San Francisco Culinary, Bartenders & Service Employees Pension Fund




Puget Sound Electrical Workers Pension Trust




Painters & Allied Trades District Council #35 Pension Fund




Tile, Terrazzo & Marble Industry Pension Trust Fund




Rodman Local Union 201 Pension Fund




Operating Engineers Pension Trust




Minneapolis Painting Industry Pension Plan




Cement Masons Locals 886 & 404 Pension Fund




Carpenters’ Pension Trust Fund of St. Louis




Kansas Construction Trades Open End Pension Trust Fund




Twin City Carpenters & Joiners Pension Fund




Hawaii Laborers Pension Trust Fund




CWA-ITU Negotiated Pension Plan




HEREIU Pension Fund




Southwest Ohio District Council of Carpenters — Dayton — Pension Plan




San Diego Hotel and Restaurant Employees Pension Fund




 









 





IBEW #481 Money Purchase Pension Plan & Trust




Roofers’ Pension Plan (United Union of Roofers, Waterproofers & Allied Workers Local 11)




IUE AFL-CIO Pension Fund




Southern Nevada Culinary & Bartenders Pension Trust




Plumbers’ Pension Fund, Local 130, U.A.




New York City District Council of Carpenters Pension Fund




Local 705 IBT Pension Trust Fund




Sheet Metal Workers’ Local Union No.100 Washington DC Area Pension Fund




Local 68 IUOE Pension Fund




NECA-IBEW Local 364 Defined Contribution Pension Fund




Central/North Florida Carpenters Regional Council Pension Fund




Bricklayers Local 21 Pension Fund




Laborers’ Pension Fund




Pension Fund of Bricklayers and Allied Crafts, Local No. 74 of DuPage County, Illinois




United Mine Workers of America, International Pension Trust




IBEW Local Union No. 99 Retirement Plan




IBEW Local Union No. 99 Annuity Plan




Annuity Plan of the Electrical Industry




Maryland Electrical Industry Pension Fund




Milwaukee Drivers Pension Trust Fund




Atlanta Plumbers and Steamfitters Pension Fund




Carpenters Labor Management Pension Fund




West Michigan Plumbers, Fitters and Service Trades Local Union No. 174 Pension Plan and Trust




IBEW Local #141 Pension Fund




Motion Picture Industry Individual Account Plan




Twin City Pipe Trades Pension Trust




Jacksonville Plumbers and Pipefitters Pension Fund




IBEW Local 117 Pension Fund




Electrical Workers Local No. 292 Annuity Plan




Bricklayers Union Local No. 6 of Indiana Pension Fund




IBEW Local 43 and Electrical Contractors Pension Fund




Iron Workers’ Mid-America Pension Fund




Laborers’ District Council, Pension and Disability Trust Fund No. 3




 









 





International Foundation of Employee Benefit Plans Pension Plan for Hourly Employees




International Foundation of Employee Benefit Plans Pension Plan for Salaried Employees




IBEW Local 131 Pension Plan




Kenosha Carpenters Local No. 161 Pension Fund




Kalamazoo County Sheriff’s Deputies Association Money Purchase Pension Plan




Operating Engineers Local 57 Pension Fund




UNITE Staff Retirement Plan




Hotel and Restaurant Employees Local 25 and Hotel Association of Washington, D.C. Pension Fund




Municipal Employees’ Annuity & Benefit Fund of Chicago




Laborers’ District Council Construction Industry Pension Fund




Fox Valley & Vicinity Laborers Pension Fund




Worcester Plumbers and Pipefitters Local Union #4




Rhode Island Carpenters Pension Fund




Ironworkers District Council of New England Pension Fund




BAC Local No. 4 Pension Fund




Electrical Workers Local No. 292 Pension Plan




Construction Workers Pension Trust Fund — Lake County & Vicinity




Twin City Bricklayers Pension Fund




Chicago Painters & Decorators Pension Fund




Massachusetts Service Employees Pension Fund




Southern Electrical Retirement Fund




Motion Picture Laboratory Technicians and Film Editors Local 780 IATSE Pension Fund




Toledo Roofers Local No. 134 Pension Plan




IBEW Local Union #226 Open End Pension Trust Fund




Plumbers & Steamfitters Local 43 Pension Fund Trust




Teamsters Local 469 Pension Fund




Painters District Council #2 Pension Trust




Plasterers’ & Cement Masons’ Local 40 Pension Fund




IUOE Local 825 Pension Fund




International Longshoremen’s Association (AFL-CIO) Employers Pension Fund, SE Florida Ports




Rockford Area Dairy Industry, Local 754 IBT Retirement Pension Plan




 









 





Centennial State Carpenters’ Pension Trust Fund




Northern Illinois Pension Fund




LIUNA Local Union and District Council Pension Fund




LIUNA National (Industrial) Pension Fund




Cement Masons Union Local No. 502 Pension Fund




Bi-State Development Agency / Division 788 Amalgamated Transit Union Master Trust




IBEW Local No. 38 Pension Fund




Deferred Salary Plan of the Electrical Industry




Tile, Terrazzo & Marble Defined Contribution Pension Plan




IUPAT Industry Annuity Plan




Carolinas Electrical Workers Retirement Fund




CSX Hotels, Inc. Pension Plan for Union Employees




Local 138 IUOE Annuity Fund




Glaziers Local No. 27 Pension Fund




SEIU Local No. 4 Pension Fund




Truck Drivers & Helpers Local Union No. 355 Retirement Pension Plan




IBEW Local 508/Eastern Division, Georgia Chapter NECA Pension Fund




Sheet Metal Workers Local 36 Pension Fund




International Brotherhood of Firemen and Oilers National Pension Fund




Waterfront Employers — ILA Pension Fund




Plumbers and Steamfitters Local 102 Pension Fund




Automotive Machinists Pension Trust




New Jersey Education Association Employees Retirement Plan




UA Locals 63/353 Joint Pension Trust Fund




Nursing Home and Healthcare Employees of Philadelphia and Vicinity Pension Plan




Greenville Plumbers and Pipefitters Pension Fund




IUPAT General Officers, Staff and Employees Retirement & Pension Trust Fund




Detroit Free Press Inc. Newspaper Guild of Detroit Pension Plan




Plumbers & Pipefitters Local No. 333 Pension Fund




Carpenter’s Pension Fund of Northern California




Carpenter’s Annuity Trust Fund of Northern California




International Brotherhood of Firemen & Oilers, Local No. 7 Pension Trust Fund




Central Laborers’ Annuity Fund




 









 





Alaska Hotel & Restaurant Employees Pension Trust




Building Trades United Pension Trust Fund — Milwaukee & Vicinity




Teamsters Local Union No. 727 Pension Fund




Plumbers And Steamfitters Local #118 Kenosha Unit Pension Plan




GCIU Benevolent Trust Fund




IBEW Local Union 1579 Pension Plan




 









 





EXHIBIT I




BUILDING STANDARD IMPROVEMENTS




     For purposes of this Lease, “Tenant Standard Improvements” shall mean the following items in the
quantities stated:



     PARTITIONS:


1. Standard Interior Partition: Floor to ceiling partition with 5/8” gypsum board on both sides of
metal studs at 24” on center with rubber base.



2. Demising Partition Between Leases Premises: Same as standard interior partitions, with acoustic
treatment.



3. Demising Corridor Partitions: Same as standard interior partitions with fire rating as required
by Code.



Quantity: One linear foot of partition per 15 square feet of Allowance Area (as hereinafter
defined).




     DOORS, FRAMES AND HARDWARE:


1. Office Doors: Full height, solid core, wood veneer doors, stained and sealed in a painted, white
aluminum frame with latch set, hinges and door stops.



2. Entry Door: Same as office doors, except with lockset and closer.
Quantity: One door per 350 square feet of Allowance Area which quantity includes the number of
entry doors required to conform to Building Codes.




     CEILING:



          Building standard suspended acoustical tile system.




     Quantity: As required for premises.



     FINISHES:


1. Interior Walls: 2 coats of flat latex paint, not to exceed 2 colors per room.



2. Base: 2-1/2: resilient.



Quantity: As required on interior columns and perimeter and core walls, and on the quantity of
partitions.




     LIGHTING:


Fluorescent fixtures, 2’ x 4’ with lenses and lamps in standard pattern.



Quantity: One fixture per 100 square feet of Allowance Area; one light switch per 300 square feet of Allowance Area.




     ELECTRICAL:



          Wall mounted 110 volt duplex outlet; 6 outlets per 20 ampere circuit.




     Quantity: One outlet per 150 square feet of Allowance Area.



     TELEPHONE:



     Wall box located in standard interior partition.



     Quantity: One outlet per 200 square feet of Allowance Area.



 









 





     WINDOW COVERING:



          1” standard blinds shall be installed on all exterior windows.




     FIRE AND SAFETY SYSTEMS:


One alarm and speaker per 1275 square feet of Allowance Area; one exit sign per 2000 square feet of
Allowance Area.




     HEATING, VENTILATING, AIR-CONDITIONING:


Duct work, supply and return grilles, and thermostats in standard pattern served by a central air
system with fan coil units on each floor with distribution at the rate of one zone per 1277 square
feet of Allowance Area.




     FLOOR COVERING ALLOWANCE:



          Floor covering allowance of $1.25 per square foot of Allowance Area.




          For the purpose of computing the allowances specified herein the “Allowance Area” shall be the
rentable square footage of the Premises as specified in the Lease Summary.




          All portions of the Building not specifically set forth in this Exhibit I shall be deemed
“Non-Building Standard Improvements”.




 









 








EXHIBIT J




TENANT’S MONUMENT SIGNAGE




[To be attached within fifteen (15) days of the mutual execution of this Lease]




 









 





EXHIBIT K




TENANT’S BUILDING SIGNAGE




[To be attached within fifteen (15) days of the mutual execution of this Lease]




 









 





EXHIBIT L




JOINT ESCROW AGREEMENT




     This JOINT ESCROW AGREEMENT (this “Escrow Agreement”) is made and entered into as of March 10,
2006, by and between BIT Holdings Fifty-Six, Inc., a Maryland corporation, as Landlord, and Taleo
Corporation, a Delaware corporation, as Tenant. with reference to the following facts and
circumstances. All capitalized terms not otherwise defined in this Escrow Agreement are as defined
the Lease.



RECITALS 




          A. Landlord and Tenant entered into that certain Lease dated March 10, 2006 (the “Lease”)
whereby Landlord leased to Tenant those certain premises consisting of approximately thirty five
thousand four hundred twenty four (35,424) square feet at 4140 Dublin Boulevard, Dublin,
California.




          B. Pursuant to the Work Agreement, Tenant is to deposit with an escrow holder designated by
Landlord: (i) for payment of the supply and installation of cabling at the Premises (the “Cable
Installation”) and (ii) the difference between the Tenant Improvement Allowance and the bid of the
Contract (exclusive of the cost of Cable Installation) (and in the event at any time during
construction costs increase, Tenant is to deposit such sums in escrow pursuant to the Work
Agreement).




          C. The parties desire to enter into this Escrow Agreement to, among other things, provide: (i)
for the establishment of an escrow account requiring the mutual approval of Landlord and Tenant
with respect to any distribution to the Contractor; and (ii) that certain documents, including but
not limited to lien releases be obtained prior to any distribution to the Contractor, all as more
particularly set forth herein.




AGREEMENT




     NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Landlord and Tenant agree as follows:



     1. Establishment of Escrow Account/Replenishment. Within three (3) days of obtaining
the final bid for the construction of the Tenant Improvements (the “Bid”), and prior to the
commencement of construction, Tenant shall deposit with an escrow (“Escrow”) (i) the cost of Cable
Installation in the amount set forth in the Bid; and (ii) if the Bid for Tenant Improvements exceed
the Tenant Improvement Allowance (exclusive of the cost for Cable Installation) one hundred and
five percent (105%) of the difference between the Tenant Improvement Allowance and the Bid (the
“Escrow Amount”). The current amount to be deposited for the Cable Installation is One Hundred
Forty Five Thousand Dollars exactly ($145,000.00). The Escrow Amount may be increased based on
increases in costs in constructing the Tenant Improvements for any reason, pursuant to the terms of
the Work Agreement. Any interest on the Escrow Account shall accrue to the sole benefit of and
shall be payable to Tenant. Tenant shall immediately deliver to Landlord copies of any change
orders or



 









 




other documents evidencing any increase in the cost of constructing the Tenant Improvements
above the Bid amount. Escrow shall be opened with a escrow holder reasonable designated by
Landlord (the “Escrow Holder”). The term “Contractor” shall mean Novo Construction, or any
successor contractor approved by Landlord.




     2. Payments to Contractor.



          2.1 Conditions for Payment. Subject to the terms of the Lease and this Escrow
Agreement, payments due and owing to Contractor from Tenant for the construction of Tenant
Improvements (including both progress payments and final payment) shall be drawn from the Escrow
Account only with the prior and mutual written consent of Landlord and Tenant (their respective
and designated agents and/or representatives), which consent shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding the foregoing, the parties agree that no payment shall be
made to the Contractor from the Escrow Account unless and until the parties are in possession of
all documents required under the Work Agreement for payment to the Contractor.




          2.2 Basis for Withholding Payment. Notwithstanding anything contained in Section
2.1, Landlord shall be entitled to withhold payment to the Contractor in the event: (i) the
Landlord reasonably determines that the work does not conform to the plans and specifications; (ii)
the Landlord reasonably determines that the work is defective or deficient; (iii) the Contractor
does not present adequate documentation as required in the Work Agreement; (iv) a mechanic’s lien
is placed against the work or the Building or Project, or a lien is threatened by any party for the
Cable Installation or the Cost Overage (as defined in the Work Agreement); (v) the Landlord has
obtained evidence that any party has not been timely paid, (vi) the Tenant or its Contractor fails
to strictly comply with each and every requirement of “Landlord’s Construction Rules” (Exhibit
F to the Lease); or (vii) the Landlord reasonably determines that the percentage completion in
the applicable draw request is inaccurate. Furthermore, in the event Tenant is at any time during
construction of the Tenant Improvements in material default of the Lease, Landlord shall so notify
Tenant and Contractor in writing (the “Default Notice”), and Landlord may withhold future payments
to Contractor from the Escrow Account.




          2.3 Percentage Completion Payment/Retention. All payments to the Contractor from
the Escrow Account for any Cost Overage shall be made on a percentage completion basis, and
payments from the Escrow Account for the Cabling Installation shall be made once the installation
is complete, and Landlord and Tenant have all documents required under this Escrow Agreement. With
respect to any Cost Overage, Landlord shall reasonably confirm the percentage completion of the
Tenant Improvements. All payments to the Contractor (both from the Tenant Improvement Allowance
and any Cost Overage – but not the Cabling Installation) are subject to retention of fifteen
percent (15%) pursuant to the Work Agreement.




          2.4. Payment from Escrow Account and Tenant Improvement Allowance. The parties
acknowledge that the funds to be paid to the Contractor shall be sourced from two different
accounts: (i) direct payment from the Landlord of the Tenant Improvement Allowance; and (ii)
payments from the Escrow (for both the Cabling Installation and the Cost Overage, if any).
Payments shall be made based on each draw request on a pro-rata basis (not including the




 









 







Cabling Installation). For example purposes only (and rounding numbers) if the Tenant
Improvement Allowance is $1,000,000.00, and the Escrow Account contains $200,000.00, the if the
first draw request were for $100,000.00, then $20,000.00 would be paid from the Escrow Account,
and $80,000.00 would be paid by Landlord upon satisfaction of all conditions in this Joint Escrow
Agreement and this Work Agreement, but subject to fifteen percent (15%) reduction based on the
retention contained herein and in the Work Agreement (This example would not apply to Cable
Installation – which is not being paid on a percentage completion basis, but instead upon
completion of all work and adequate documents pursuant to this Escrow Agreement). To the extent
the construction of the Tenant Improvements costs less than the Tenant Improvement Allowance, the
Landlord shall retain the benefit pursuant to the Work Agreement. To the extent the entire Tenant
Improvement Allowance is used, but the amount in Escrow is not, the amount in Escrow shall be
refunded to Tenant pursuant to the terms of this Joint Escrow Agreement.




          2.5 Retention of Replacement Contractor. In the event Tenant desires to terminate the
services of the Contractor pursuant to the Construction Contract, Tenant shall be entitled to do so
as long as the Contractor is in material default of the Construction Contract. Following such
termination, the Escrow Amount will be distributed, if at all, from the Escrow Account to a
replacement Contractor chosen by Tenant and approved by Landlord pursuant to the terms of the
Lease. In the event of a dispute with the Contractor and Tenant desires to retain a replacement
Contractor, Tenant shall ensure the Escrow Account contains an amount sufficient to satisfy the
amount of the dispute (including increasing the Escrow Account if necessary), and an amount
sufficient to pay one hundred and five percent (105%) of the bid amount from the new contractor
(again including increasing the Escrow Account if necessary). During any dispute with the
Contractor, Tenant will immediately bond any mechanic’s lien at Tenant’s sole cost and expense.




     3. Remainder of Escrow Amount. Only upon satisfaction of all conditions for final
payment in the Work Agreement, Tenant may withdraw any balance remaining in the Escrow Account.



     4. Escrow Holder; Escrow Instructions. Upon establishment of the Escrow Account, the
parties shall submit to Escrow Holder a fully executed copy of this Escrow Agreement. This Escrow
Agreement shall constitute full and complete instructions to the Escrow Holder, and this Escrow
Agreement shall not be modified by except by a written agreement executed by Landlord and Tenant.
Escrow Holder acknowledges by its signature below that in no event shall Escrow Holder disburse any
of the Escrow Amount except in strict accordance with this Escrow Agreement or a modification or
supplement of this Escrow Agreement executed by Landlord and Tenant, and only upon mutual written
authorization by Landlord and Tenant to do so.



     5. Arbitration. In the event of any dispute between Landlord and Tenant arising out
of this Escrow Agreement, the parties agree to participate in binding arbitration as expeditiously
as possible, but in no event more than forty-five (45) from written notice by one party to the
other of its election to arbitrate, at the American Arbitration Association, Walnut Creek office,
and in accordance with its commercial dispute rules and regulations. The arbitrator shall be
chosen by AAA, and shall award attorneys’ fees to the prevailing party. California law shall apply, as supplemented by the AAA commercial dispute rules. Limited discovery may be allowed
by the arbitrator.



 









 





     6. Conflict. In the event of a conflict between the provisions of this Exhibit L and
the Lease, this Exhibit L shall prevail. In the event of a conflict between this Exhibit L and the
Work Agreement, the Work Agreement shall prevail.



     7. Governing Law. This Escrow Agreement shall be governed by and construed in
accordance with California law.



     8. Incorporation of Recitals. The Recitals are incorporated by this reference as
though set forth in full.



     9. Relationship of Landlord and Contractor. Nothing contained herein shall create or
imply any contractual relationship between Landlord and Contractor, and specifically, Landlord is
not agreeing to make any payments to the Contractor, and shall have no financial obligations or
responsibilities to Contractor of any kind whatsoever. All payments to the Contractor are to be
made solely by Tenant (or from the Escrow), and shall be solely the responsibility of Tenant.
Contractor shall at all times remain an independent contractor. Contractor acknowledges and agrees
to be bound by this Escrow Agreement.



 









 





     The parties have executed this Escrow Agreement as of the date first above written.



	 	 	 	 
	BIT HOLDINGS FIFTY-SIX, INC.,
	a Maryland corporation
	 
	 	 
	By:
	 	 
	 

	 	 
	Name:
	 	 
	 

	 	 
	Title:
	 	 
	 

	 	 
	 
	 	 
	TENANT:
	 
	 	 
	TALEO CORPORATION,
	a Delaware corporation
	 
	 	 
	By:
	 	 
	 

	 	 
	Name:
	 	 
	 

	 	 
	Title:
	 	 
	 

	 	 
	 
	 	 
	By:
	 	 
	 

	 	 
	Name:
	 	 
	 

	 	 
	Title:
	 	 
	 

	 	 
	 
	 	 
	NOVO CONSTRUCTION,
	a California corporation
	 
	 	 
	By:
	 	 
	 

	 	 
	Name:
	 	 
	 

	 	 
	its:
	 	 
	 

	 	 
	 
	 	 
	By:
	 	 
	 

	 	 
	Name:
	 	 
	 

	 	 
	its:
	 	 
	 

	 	 





 









 





ADDENDUM #1 TO LEASE BETWEEN BIT HOLDINGS FIFTY-SIX, INC. (“LANDLORD”) AND THE
TENANT DESIGNATED IN THE LEASE TO WHICH THIS ADDENDUM IS ATTACHED




LETTER OF CREDIT = $1,000,000




     1. Letter of Credit. In lieu of providing a cash Security Deposit, simultaneously
with the execution of this Lease, Tenant may deliver to Landlord an irrevocable and transferable
letter of credit (“Letter of Credit”) running in favor of Landlord, with the Letter of Credit
securing Tenant’s obligations hereunder subject to the terms and conditions set forth in the Lease.
The terms of the Letter of Credit, which are subject to Landlord’s reasonable consent, shall
strictly comply with the provisions of this Addendum #1. The Letter of Credit shall be issued by a
bank acceptable to Landlord in Landlord’s reasonable discretion and under the supervision of the
banking commission of the State of California or the Federal Deposit Insurance Corporation. If the
credit of the bank that originally issues the Letter of Credit becomes unacceptable to Landlord in
Landlord’s reasonable discretion, Tenant shall at its cost substitute another Letter of Credit from
a bank that is acceptable to Landlord in Landlord’s sole reasonable discretion. The Letter of
Credit shall be irrevocable for the period ending no less than one (1) year after the date of
issuance. Tenant shall renew the Letter of Credit and maintain it for the period ending one
hundred twenty (120) days after the end of the calendar year in which the Term expires, and shall
provide that it is automatically renewable for the Term, unless released pursuant to the provisions
of this Section or unless the issuing bank delivers a notice of non-renewal no later than thirty
(30) days before expiration. If Tenant fails to renew the Letter of Credit within ten (10)
Business Days of its expiration, Landlord may draw on the existing Letter of Credit and maintain
the funds as a non-interest-bearing deposit to be returned to Tenant on receipt by Landlord of a
substitute Letter of Credit from Tenant meeting all requirements of this Addendum #1. The form and
terms of the Letter of Credit shall be reasonably acceptable to Landlord and shall provide, among
other things, in effect that:



          A. Draws. Landlord (“Beneficiary”) shall have the right to draw down an amount up to
the then current face amount of the Letter of Credit after an Event of Default by Tenant under the
Lease and expiration of the applicable notice and cure period on presentation to the issuing bank
of Landlord’s own declaration signed or purportedly signed by or on its behalf reading as follows:
(a) that the declarant is an officer (or general partner or sole proprietor in the case of a
general partnership or sole proprietorship, respectively, or member in the case of a limited
liability company) of the Beneficiary on behalf of the Beneficiary; (b) that the declarant has
authority to make the declaration on behalf of the Beneficiary; (c) that the declaration is made
pursuant to the terms of the Letter of Credit and declarant shall provide the specific Letter of
Credit reference number; (d) that an Event of Default has occurred under the terms of a lease made
between Beneficiary and Tenant; and (e) that the amount of the Event of Default is [Landlord to
provide at time of demand]. Partial draws and multiple draws are expressly permitted, and shall
be contained in the Letter of Credit.




          B. No Inquiry. The Letter of Credit will be honored by the issuing bank without
inquiry as to the accuracy thereof and regardless of whether Tenant disputes the content of such
statement.




 









 








          C. Transfer. In the event of a transfer of Landlord’s interest in the Building,
Landlord shall have the right to transfer the Letter of Credit to the transferee, and it is agreed
that the provisions hereof shall apply to every transfer or assignment of the Letter of Credit to a
new landlord. In the event of such a transfer, the provider of the Letter of Credit must be
ratified by landlord by return of a transfer agreement.




          D. Restoration. If, as a result of any such application of all or any part of the
Letter of Credit, the amount secured by the Letter of Credit shall be less than One Million Dollars
($1,000,000), Tenant shall immediately provide Landlord with cash or other immediately available
funds, or an additional Letter of Credit that meets the requirements of this Section, to cover the
deficiency, or restore the amount available to be drawn under the Letter of Credit to the full One
Million Dollars ($1,000,000.00) required herein on written notice from Landlord to Tenant. In the
event the Letter of Credit is less than One Million Dollars ($1,000,000) due to a permissible
reduction pursuant to Section G of this Addendum #1, and upon any application of all or any part of
the Letter of Credit, Tenant shall immediately provide Landlord with cash or other immediately
available funds, or an additional Letter of Credit that meets the requirements of this Addendum #1,
and restore the amount of the Security Deposit (or replacement Letter of Credit) to One Million
Dollars ($1,000,000.00).




          E. No Encumbrance. Tenant shall not assign or encumber the Letter of Credit or any
part thereof and that neither Landlord nor its successors or assigns will be bound by any such
assignment, encumbrance, attempted assignment, or attempted encumbrance.




          F. Renewal. Without limiting the generality of the foregoing, if the Letter of Credit
expires earlier than as provided for herein, or the issuing bank notifies Landlord that it shall
not renew the Letter of Credit, Landlord will accept a renewal thereof or substitute Letter of
Credit (such renewal or substitute Letter of Credit to be in effect not later than thirty (30) days
before the expiration thereof), which renewal or substitute Letter of Credit shall be irrevocable
and automatically renewable, and issued by a bank meeting the requirements of this Section, for the
entire period provided for in this Section, on substantially the same terms as the expiring Letter
of Credit or such other terms as may be acceptable to Landlord. However, (a) if the Letter of
Credit is not timely renewed or a substitute Letter of Credit is not timely received, or (b) if
Tenant fails to maintain the Letter of Credit in the amount and terms set forth in this Section,
then, at least thirty (30) days before the expiration of the Letter of Credit, or immediately on
Tenant’s failure to comply with every term of this Section, Tenant shall deposit with Landlord cash
security in the amounts required by, and to be held subject to the terms of this Section, failing
which Landlord may present such Letter of Credit to the bank, in accordance with the terms of this
Section, and the entire sum secured thereby shall be paid to Landlord as a substitute security
deposit, to be held by Landlord in the manner provided for in this Addendum.




          G. Reduction in Letter of Credit. On the first (1st) anniversary of the
Lease Commencement Date, provided no Event of Default has occurred, Landlord shall return to Tenant
Two Hundred Thousand Dollars ($200,000.00), of the original One Million Dollar ($1,000,000.00),
original Security Deposit (or, if the Security Deposit is in the form of a Letter of Credit, to
permit Tenant to supply a substitute Letter of Credit in amount equal to Eight Hundred Thousand
Dollars ($800,000.00). On the second (2nd) anniversary of the Lease




 









 







Commencement Date, provided no Event of Default has occurred, Landlord shall return to Tenant an
additional Two Hundred Thousand Dollars ($200,000.00) of the original One Million Dollar
($1,000,000.00), original Security Deposit (or, if the Security Deposit is in the form of a Letter
of Credit, to permit Tenant to supply a substitute Letter of Credit in amount equal to Six Hundred
Thousand Dollars ($600,000.00). On the third (3rd) anniversary of the Lease
Commencement Date, provided no Event of Default has occurred, Landlord shall return to Tenant an
additional Two Hundred Thousand Dollars ($200,000.00) of the original One Million Dollar
($1,000,000.00), original Security Deposit (or, if the Security Deposit is in the form of a Letter
of Credit, to permit Tenant to supply a substitute Letter of Credit in amount equal to Four Hundred
Thousand Dollars ($400,000.00). On the fourth (4th) anniversary of the Lease
Commencement Date, provided no Event of Default has occurred, Landlord shall return to Tenant an
additional Two Hundred Thousand Dollars ($200,000.00) of the original One Million Dollar
($1,000,000.00), original Security Deposit (or, if the Security Deposit is in the form of a Letter
of Credit, to permit Tenant to supply a substitute Letter of Credit in amount equal to Two Hundred
Thousand Dollars ($200,000.00). If the Letter of Credit is allowed to be reduced down to Two
Hundred Thousand Dollars ($200,000) pursuant to this Section G, the Letter of Credit will be
maintained in the full amount of Two Hundred Thousand Dollars ($200,000) for the remainder of the
Term, and subject to all of the provisions of this Addendum #1. Upon any draw of the Letter of
Credit, regardless of the then required amount of the Letter of Credit, Landlord and Tenant agree
that the reduction contemplated herein shall be null and void, and Tenant shall immediately restore
the Letter of Credit, or provide a new Letter of Credit, or provide cash or immediately available
funds in the full amount of the original Security Deposit and Letter of Credit requirement of One
Million Dollars ($1,000,000.00).




          H. Return of Security Deposit/Letter of Credit. If no default then exists, then
Landlord, within twenty (20) Business Days after the end of the Term, will return the Security
Deposit to Tenant, less such portion thereof as Landlord will have retained to cure any default by
Tenant for any of Tenant’s obligations, conditions, or agreements under this Lease. Landlord may,
at its discretion, hold the Security Deposit until a final determination is made of all Tenant’s
obligations under this Lease; provided, however, that such determination will be made no later than
one hundred twenty (120) days after the end of the calendar year in which the Term expires.