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EXHIBIT 10.12  


LEASE AGREEMENT  


BY AND BETWEEN 


HARBOR INVESTMENT PARTNERS,
  a California general partnership 


AS
LANDLORD 


and 


X.COM,

a Delaware corporation  


 AS TENANT  


 Dated March 10, 2000  





 
TABLE OF CONTENTS 



	 
	 	 
	 	PAGE

	1.	 	Demise	 	1
	

2.	
 	

Premises	
 	

1
	

3.	
 	

Term	
 	

2
	

4.	
 	

Rent	
 	

2
	

5.	
 	

Utility Expenses	
 	

7
	

6.	
 	

Late Charge	
 	

7
	

7.	
 	

Security Deposit	
 	

8
	

8.	
 	

Letter of Credit	
 	

8
	

9.	
 	

Possession	
 	

10
	

10.	
 	

Use Of Premises	
 	

10
	

11.	
 	

Acceptance of Premises	
 	

11
	

12.	
 	

Surrender	
 	

12
	

13.	
 	

Alterations and Additions	
 	

13
	

14.	
 	

Maintenance and Repairs of Premises	
 	

15
	

15.	
 	

Landlord's Insurance	
 	

16
	

16.	
 	

Tenant's Insurance	
 	

16
	

17.	
 	

Indemnification	
 	

17
	

18.	
 	

Subrogation	
 	

18
	

19.	
 	

Signs	
 	

18
	

20.	
 	

Free From Liens	
 	

19
	

21.	
 	

Entry By Landlord	
 	

19
	

22.	
 	

Destruction and Damage	
 	

19
	

23.	
 	

Condemnation	
 	

21
	

24.	
 	

Assignment And Subletting	
 	

22
	

25.	
 	

Tenant's Default	
 	

24
	

26.	
 	

Landlord's Remedies	
 	

26
	

27.	
 	

Landlord's Right To Perform Tenant's Obligations	
 	

28
	

28.	
 	

Attorneys' Fees	
 	

28
	

29.	
 	

Taxes	
 	

29
	

30.	
 	

Effect Of Conveyance	
 	

29
	

31.	
 	

Tenant's Estoppel Certificate	
 	

29
	

32.	
 	

Subordination	
 	

30



i





 

	

33.	
 	

Environmental Covenants	
 	

30
	

34.	
 	

Notices	
 	

34
	

35.	
 	

Waiver	
 	

34
	

36.	
 	

Holding Over	
 	

34
	

37.	
 	

Successors And Assigns	
 	

35
	

38.	
 	

Time	
 	

35
	

39.	
 	

Brokers	
 	

35
	

40.	
 	

Limitation Of Liability	
 	

35
	

41.	
 	

Financial Statements	
 	

35
	

42.	
 	

Rules And Regulations	
 	

35
	

43.	
 	

Mortgagee Protection	
 	

36
	

44.	
 	

Entire Agreement	
 	

36
	

45.	
 	

Interest	
 	

36
	

46.	
 	

Construction	
 	

36
	

47.	
 	

Representations And Warranties Of Tenant	
 	

37
	

48.	
 	

Security	
 	

37
	

49.	
 	

Jury Trial Waiver	
 	

37
	



 	

 	



 	

 	



 





	Exhibit	 	 
	

 	
 	

 
	A-1	 	Diagram of the Premises
	

A-2	
 	

Diagram of the Intuit Server Area
	

B-1	
 	

Initial Premises Commencement Date Memorandum
	

B-2	
 	

Subsequent Premises Commencement and Expiration Date Memorandum
	

C	
 	

Rules and Regulations
	

D	
 	

Hazardous Materials Disclosure Certificate





ii





 
LEASE AGREEMENT 


BASIC LEASE INFORMATION  



	Lease Date:	 	March 10, 2000
	

Landlord:	
 	

HARBOR INVESTMENT PARTNERS,

a California general partnership
	

Landlord's Address:	
 	

c/o UBS Brinson Realty Investors LLC

455 Market Street, Suite 1540

San Francisco, California 94105

Attention: Asset Manager

                 The Harbor Business Park





	 	 	All notices sent to Landlord under this Lease shall be sent to the above address, with copies to:





	 	 	Insignia/ESG of California, Inc.

160 West Santa Clara Street, Suite 1350

San Jose, California 95113

Attention: Property Manager,

                 The Harbor Business Park
	

Tenant:	
 	

X.Com,

a Delaware corporation
	

Tenant's Contact Person:	
 	

Steve Armstrong
	

Tenant's Address:	
 	

1840 Embarcadero Road

Palo Alto, California
	

Initial Premises Square Footage:	
 	

Approximately Eleven Thousand Two Hundred Twenty (11,220) rentable square feet
	

Subsequent Premises Square Footage:	
 	

Approximately Ten Thousand Six Hundred Fifty-Four (10,654) rentable square feet
	

Total Premises Square Footage:	
 	

Approximately twenty-one thousand eight hundred seventy-four (21,874) rentable square feet
	

Premises Address:	
 	

1840 Embarcadero Road

Palo Alto, California
	

Project:	
 	

The Harbor Business Park, 1800-1858 Embarcadero Road and 2445-2465 Faber Place, Palo Alto, California, together with the land on which the Project is situated and all Common Areas
	

Building (if not the same as the Project):	
 	

1840 Embarcadero Road

Palo Alto, California





	Tenant's Proportionate Share of Project:	 	Initial Premises:	 	4.33	%
	

 	
 	

Subsequent Premises:	
 	

4.11	
%
	

 	
 	

Total Premises:	
 	

100	
%



iii





 

	

Tenant's Proportionate Share of Building:	
 	

Initial Premises:	
 	

51.29	
%
	

 	
 	

Subsequent Premises:	
 	

48.71	
%
	

 	
 	

Total Premises:	
 	

100	
%





	Term:	 	Commencing on Initial Premises Commencement Date and expiring on day immediately preceding the seventh (7th) anniversary of the Subsequent Premises Commencement Date
	

Estimated Initial Premises Commencement Date:	
 	

March 15,2000
	

Estimated Subsequent Premises Commencement Date:	
 	

May 15,2000
	

Estimated Expiration Date:	
 	

May 14,2007
	

Monthly Base Rent:	
 	

See Paragraph 4(a)
	

Prepaid Rent:	
 	

One Hundred Two Thousand Eight Hundred Seven and 80/100 Dollars ($102,807.80)
	

Prepaid Additional Rent:	
 	

Ten Thousand Three Hundred Two and 00/100 Dollars ($10,302.00)
	

Month to which Prepaid Base Rent and Additional Rent will be Applied:	
 	

First (1st) month of the Term following the Subsequent Premises Commencement Date
	

Security Deposit:	
 	

One Hundred Twenty Thousand Two Hundred Seventy and 00/100 Dollars ($120,270.00)
	

Letter of Credit:	
 	

Nine Hundred Sixty-Two Thousand One Hundred Sixty and 00/100 Dollars ($962,160.00)
	

Permitted Use:	
 	

General office, sales/marketing and administration of online banking/financial services
	

Unreserved Parking Spaces:	
 	

Sixty-nine (69) nonexclusive and undesignated parking spaces
	

Brokers:	
 	

Steve Bouret of BT Commercial (Landlord's Broker) Randy Arrillaga of BT Commercial (Tenant's Broker)
	

Alterations Allowance:	
 	

Sixty Five Thousand Six Hundred Twenty-Two Dollars ($65,622.00) (viz. $3.00 per rentable square foot)




iv






  



 
 

LEASE AGREEMENT    
  


    THIS LEASE AGREEMENT is made and entered into by and between Landlord and Tenant on the Lease Date. The defined
terms used in this Lease which are defined in the Basic Lease Information attached to this Lease Agreement ("Basic Lease Information") shall have the
meaning and definition given them in the Basic Lease Information. The Basic Lease Information, the exhibits, the addendum or addenda described in the Basic Lease Information, and this Lease Agreement
are and shall be construed as a single instrument and are referred to herein as the "Lease". 


1.  DEMISE  


    In consideration for the rents and all other charges and payments payable by Tenant, and for the agreements, terms and conditions to be performed by Tenant in
this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES HEREBY HIRE AND TAKE FROM LANDLORD, the Premises described below, upon the agreements,
terms and conditions of this Lease for the Term hereinafter stated. 


2.  PREMISES  


    (a) The
premises demised by this Lease consists of the Initial Premises and the Subsequent Premises (collectively, the
"Premises") located in that certain building (the "Building") specified in the Basic Lease Information,
which Building is located in that certain real estate development (the "Project") specified in the Basic Lease Information. The Premises has the address
and contains the square footage specified in the Basic Lease Information. The location and dimensions of the Initial Premises and the Subsequent Premises are depicted on Exhibit A, which is
attached hereto and incorporated herein by this reference; provided, however, that any statement of square footage set forth in this Lease, or that may have been used in calculating any of the
economic terms hereof, is an approximation which Landlord and Tenant agree is reasonable and, except as expressly set forth in Paragraph 4(c)(iii) below, no economic terms based thereon
shall be subject to revision whether or not the actual square footage is more or less. Tenant shall have the non-exclusive right (in common with the other tenants, Landlord and any other
person granted use by Landlord) to use the-Common Areas (as hereinafter defined), except that, with respect to parking, Tenant shall have only a license to use-the number of
nonexclusive and undesignated parking spaces set forth in the Basic Lease Information in the Project's parking areas (the "Parking Areas"); provided,
however, that Landlord shall not be required to enforce Tenant's right
to use such parking spaces; and provided, further, that the number of parking spaces allocated to Tenant hereunder shall be reduced on a proportionate basis in the event any of the parking spaces in
the Parking Areas are taken or otherwise eliminated as a result of any Condemnation (as hereinafter defined) or casualty event affecting such Parking Areas. No easement for light or air is
incorporated in the Premises. For purposes of this Lease, the term "Common Areas" shall mean all areas and facilities outside the Premises and within
the exterior boundary line, of the Project that are provided and designated by Landlord for the non-exclusive use of Landlord, Tenant and other tenants of the Project and their respective
employees, guests and invitees. 


    (b) Landlord
has the right, in its sole discretion, from time to time, to: (i) make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces, parking areas, ingress, egress, direction of driveways, entrances, corridors and walkways; (ii) close temporarily any
of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available; (iii) add additional buildings and improvements to the Common Areas or remove
existing buildings or improvements therefrom; (iv) use the Common Areas while engaged in making and do additional improvements, repairs or alterations to the Project or any portion thereof; and
(v) and perform any other acts or make any other changes in, to or with respect to the Common Areas and the Project as Landlord may, in its sole discretion, deem 


1






 


to be appropriate; provided, however, that Landlord shall use reasonable efforts to minimize any disruption to Tenant's business during the making of any such modifications. 


    (c) Tenant
acknowledges and agrees that Intuit, Inc. ("Intuit"), the former tenant of the Premises, is permitted
to maintain equipment in the area of the Premises shown on Exhibit A-2 hereto (the "Intuit Server
Area") server room until May 1, 2000. Tenant agrees to allow Intuit access to the Premises during normal business hours for the purpose of maintaining and removing such
equipment. Tenant acknowledges and agrees that Landlord shall have no liability for any damages or losses suffered or incurred by Tenant resulting from or related to Intuit's maintenance or removal of
such equipment. 


3.  Term  


    (a) The
term of this Lease (the "Term") shall commence with respect to the Initial Premises on the date Landlord
delivers possession of the Initial Premises to Tenant (the "Initial Premises Commencement Date") and with respect to the Subsequent Premises on the date
Landlord delivers possession of the Subsequent Premises to Tenant (the "Subsequent Premises Commencement Date"), and shall expire with respect to the
entire Premises on the Expiration Date. In the event the actual Initial Premises Commencement Date is a date other than the Estimated Initial Premises Commencement Date specified in the Basic Lease
Information, or the actual Subsequent Premises
Commencement Date is a date other than the Estimated Subsequent Premises Commencement Date specified in the Basic Lease Information, then Landlord and Tenant shall promptly execute a Commencement and
Expiration Date Memorandum in the form attached hereto as Exhibit B-1 or  Exhibit B-2, as applicable, wherein the parties shall
specify the Initial Premises Commencement Date or the Subsequent Premises
Commencement Date, as applicable, and, in the case of a Commencement and Expiration Date Memorandum, executed to memorialize the actual Subsequent Premises Commencement Date, the Expiration Date. 


    (b) Tenant
acknowledges and agrees that Landlord shall be performing seismic upgrade work (the "Seismic Work") in the
Subsequent Premises prior to the Subsequent Premises Commencement Date and that Tenant shall have no right to occupy all or any portion of the Subsequent Premises prior to the Subsequent Premises
Commencement Date. In addition to the foregoing, Tenant acknowledges and agrees that Landlord shall be performing Seismic Work in the Initial Premises prior to and following the Subsequent Premises
Commencement Date. Tenant agrees to cooperate with Landlord and take all actions required by Landlord to facilitate the completion of the Seismic Work in the Initial Premises during the Term. Without
limiting the generality of the foregoing, Tenant understands and agrees that it might be required to remove cubicles and computers from portions of the Initial Premises or to vacate portions of the
Initial Premises altogether during the performance of such Seismic Work. Tenant further understands that Landlord may be required to turn off the electricity and other utilities and to disengage the
wiring in part or all of the Initial Premises during the performance of the Seismic Work. Landlord shall use reasonable efforts to provide Tenant with advance notice of Landlord's work in the Initial
Premises, but Landlord shall have no liability for the failure to so provide such notice. Landlord's performance of the Seismic Work and any disruption of Tenant's use or occupancy of or business
activities in the Premises shall not be deemed an eviction of Tenant or relieve Tenant from any of its obligations hereunder, including, without limitation, the obligation to pay Rent. Landlord and
Landlord's contractors shall have keys to the Premises and shall have the right to enter upon the Premises 24-hours a day, 7-days a week to complete the Seismic Work. 


4.  Rent  


    (a) Base Rent. Tenant shall pay to Landlord, in advance on the first day of each month, without further notice or demand
and without offset, rebate, credit or deduction for any reason whatsoever, the monthly installments of rent specified in the table below (the "Base
Rent"). 


2





 


	Period
 
	 	Sq. Ft.
	 	Monthly

Base Rate
	 	Monthly

Base Rent

	Period commencing on Initial Premises Commencement Date and expiring on day immediately preceding Subsequent Premises Commencement Date	 	 	 	$4.70	 	 
	Period commencing on Subsequent Premises Commencement Date and expiring on day immediately preceding first (1st) anniversary of Subsequent Premises Commencement Date	 	21,874	 	$4.70	 	=$102,807.80
	Period commencing on first (1st) anniversary of Subsequent Premises Commencement Date and expiring on day immediately preceding second (2nd) anniversary of Subsequent Premises Commencement Date	 	21,874	 	$4.89	 	=$106,963.86
	Period commencing on second (2nd) anniversary of Subsequent Premises Commencement Date and expiring on day immediately preceding third (3rd) anniversary of Subsequent Premises Commencement Date	 	21,874	 	$5.08	 	=$111,119.92
	Period commencing on third (3rd) anniversary of Subsequent Premises Commencement Date and expiring on day immediately preceding fourth (4th) anniversary of Subsequent Premises Commencement Date	 	21,874	 	$5.29	 	=$115,713.46
	Period commencing on fourth (4th) anniversary of Subsequent Premises Commencement Date and expiring on day immediately preceding fifth (5th) anniversary of Subsequent Premises Commencement Date	 	21,874	 	$5.50	 	=$120,307.00
	Period commencing on fifth (5th) anniversary of Subsequent Premises Commencement Date and expiring on day immediately preceding sixth (6th) anniversary of Subsequent Premises Commencement Date	 	21,874	 	$5.72	 	=$125,119.28
	Period commencing on sixth (6th) anniversary of Subsequent Premises Commencement Date and expiring on Expiration Date	 	21,874	 	$5.95	 	=$130,150.30





    Upon
execution of this Lease, Tenant shall pay to Landlord the Prepaid Rent and first monthly installment of estimated Additional Rent (as hereinafter defined) specified in the Basic
Lease Information to be applied toward Base Rent and Additional Rent for the month of the Term specified in the Basic Lease Information. 


    (b) Additional Rent. This Lease is intended to be a triple-net Lease with respect to Landlord; and subject
to Paragraph 14(b) below, the Base Rent owing hereunder is (i) to be paid by Tenant absolutely net of all costs and expenses relating to Landlord's ownership and operation of the Project
and the Building, and (ii) not to be reduced, offset or diminished, directly or indirectly, by any cost, charge or expense payable hereunder by Tenant or by others in connection with the
Premises, the Building and/or the Projector any part thereof. The provisions of this Paragraph 4(b) for the payment of Tenant's Proportionate Share(s) of Expenses (as hereinafter defined) are
intended to pass on to Tenant its share of all such costs and expenses. In addition to the Base Rent, Tenant shall pay to Landlord, in accordance with this Paragraph 4, Tenant's Proportionate
Share(s) of all costs and expenses paid or incurred by Landlord in connection with the ownership, operation, maintenance, management and repair of the Premises, the Building and/or the Project or any
part thereof (collectively, the "Expenses"), including, without limitation, all the following items (the "Additional
Rent"): 



     (i) Taxes and Assessments. All real estate taxes and assessments, which shall include any form of tax, assessment, fee,
license fee, business license fee, levy, penalty (if a result of Tenant's delinquency), or tax (other than net income, estate, succession, inheritance, transfer or franchise 



3





 


taxes), imposed by any authority having the direct or indirect power to tax, or by any city, county, state or federal government or any improvement or other district or division thereof, whether such
tax is: (A) determined by the area of the Premises, the Building and/or the Project or any part thereof, or the Rent and other sums payable hereunder by Tenant or by other tenants, including,
but not limited to, any gross income or excise tax levied by any of the foregoing authorities with respect to receipt of Rent and/or other sums due under this Lease; (B) upon any legal or
equitable interest of Landlord in the Premises, the Building and/or the Project or any part thereof, (C) upon this transaction or any document to which Tenant is a party creating or
transferring any interest in the Premises, the Building and/or the Project; (D) levied or assessed in lieu of, in substitution for, or in addition to, existing or additional taxes against the
Premises, the Building and/or the Project, whether or not now customary or within the contemplation of the parties; or (E) surcharged against the parking area. Tenant and Landlord acknowledge
that Proposition 13 was adopted by the voters of the State of California in the June, 1978 election and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for
such purposes as fire protection, street, sidewalk, road, utility construction and maintenance, refuse removal and for other governmental services which may formerly have been provided without charge
to property owners or occupants. It is the intention of the parties that all new and increased assessments, taxes, fees, levies and charges due to any cause whatsoever are to be included within the
definition of real property taxes for purposes of this Lease. "Taxes and assessments" shall also include legal and consultants' fees, costs and
disbursements incurred in connection with proceedings to contest, determine or reduce taxes, Landlord specifically reserving the right, but not the obligation, to contest by appropriate legal
proceedings the amount or validity of any taxes. 


    (ii) Insurance. All insurance premiums for the Building and/or the Project or any part thereof, including premiums for
"all risk" fire and extended coverage insurance, commercial general liability insurance, rent loss or abatement insurance, earthquake insurance, flood or surface water coverage, and other insurance as
Landlord deems necessary in its sole discretion, and any deductibles paid under policies of any such insurance. 


    (iii) Utilities. The cost of all Utilities (as hereinafter defined) serving the Premises, the Building and the Project
that are not separately metered to Tenant, any assessments or charges for Utilities or similar purposes included within any tax bill for the Building or the Project, including, without limitation,
entitlement fees, allocation unit fees, and/or any similar fees or charges and any penalties (if a result of Tenant's delinquency) related thereto, and any amounts, taxes, charges, surcharges,
assessments or impositions levied, assessed or imposed upon the Premises, the Building or the Project or any part thereof, or upon Tenant's use and occupancy thereof, as a result of any rationing of
Utility services or restriction on Utility use affecting the Premises, the Building and/or the Project, as contemplated in Paragraph 5 below (collectively, "Utility
Expenses"). 


    (iv) Common Area Expenses. All costs to operate, maintain, repair, replace, supervise, insure and administer the Common
Areas, including supplies, materials, labor and equipment used in or related to the operation and maintenance of the Common Areas, including parking areas (including, without limitation, all costs of
resurfacing and restriping parking areas), signs and directories on the Building and/or the Project, landscaping (including maintenance contracts and fees payable to landscaping consultants),
amenities, sprinkler systems, sidewalks, walkways, driveways, curbs, lighting systems and security services, if any, provided by Landlord for the Common Areas, and any charges, assessments, costs or
fees levied by any association or entity of which the Project or any part thereof is a member or to which the Project or any part thereof is subject. 


    (v) Parking Charges. Any parking charges or other costs levied, assessed or imposed by, or at the direction of, or
resulting from statutes or regulations, or interpretations thereof, promulgated 



4





 


by any governmental authority or insurer in connection with the use or occupancy of the Building or the Project. 


    (vi) Maintenance and Repair Costs. Except for costs which are the responsibility of Landlord pursuant to
Paragraph 14(b) below, all costs to maintain, repair, and replace the Premises, the Building and/or the Project or any part thereof, including, without limitation, (A) all costs paid
under maintenance, management and service agreements such as contracts for janitorial, security and refuse removal, (B) all costs to maintain, repair and replace the roof coverings of the
Building or the Project or any part thereof, (C) all costs to maintain, repair and replace the heating, ventilating, air conditioning, plumbing, sewer, drainage, electrical, fire protection,
life safety and security systems and other mechanical and electrical systems and equipment serving the Premises, the Building and/or the Project or any part thereof (collectively, the
"Systems"), and (D) all costs and expenses incurred in causing the Project to be Year 2000 Compliant (as defined below).
"Year 2000 Compliant" shall mean that all Systems containing or using computers or other information technology will function without material error or
interruption resulting from the date change from year 1999 to year 2000, to the extent that information technology of third parties properly communicates date/time data with the Systems. 



   (vii) Life Safety Costs. All costs to install, maintain, repair and replace all life safety systems, including, without
limitation, all fire alarm systems, serving the Premises, the Building and/or the Project or any part thereof (including all maintenance contracts and fees payable to life safety consultants) whether
such systems are or shall be required by Landlord's insurance carriers, Laws (as hereinafter defined) or otherwise. 


   (viii) Management and Administration. All costs for management and administration of the Premises, the Building and/or
the Project or any part thereof, including, without limitation, a property management fee, accounting, auditing, billing, postage, salaries and benefits for clerical and supervisory employees, whether
located on the Project or off-site, payroll taxes and legal and accounting costs and fees for licenses and permits related to the ownership and operation of the Project. 


    Notwithstanding
anything in this Paragraph 4(b) to the contrary, with respect to all sums payable by Tenant as Additional Rent under this Paragraph 4(b) for the
replacement of any item or the construction of any new item in connection with the physical operation of the Premises, the Building or the Project (i.e., HVAC, roof membrane or coverings and parking
area) which is a capital item the replacement of which would be capitalized under Landlord's commercial real estate accounting practices, Tenant shall be required to pay only the prorata share of the
cost of the item falling due within the Term (including any Renewal Term) based upon the amortization of the same over the useful life of such item, as reasonably determined by Landlord. 




    (c) Payment of Additional Rent.



     (i) Upon
commencement of this Lease, Landlord shall submit to Tenant an estimate of monthly Additional Rent for the period between the Commencement Date and the
following December 31 and Tenant shall pay such estimated Additional Rent on a monthly basis, in advance, on the first day of each month. Tenant shall continue to make said monthly payments
until notified by Landlord of a change therein. If at any time or times Landlord determines that the amounts payable under Paragraph 4(b) for the current year will vary from Landlord's estimate
given to Tenant, Landlord, by notice to Tenant, may revise the estimate for such year, and subsequent payments by Tenant for such year shall be based upon such revised estimate. By April 1 of
each calendar year, Landlord shall endeavor to provide to Tenant a statement ("Expense Statement") showing the actual Additional Rent due to Landlord
for the prior calendar year, to be prorated during the first year from the Commencement Date. If the total of the monthly payments of Additional Rent that Tenant has made for the prior calendar year
is less than the actual Additional 



5





 


Rent chargeable to Tenant for such prior calendar year, then Tenant shall pay the difference in a lump sum within thirty (30) days after receipt of such Expense Statement from Landlord. Any
overpayment by Tenant of Additional Rent for the prior calendar year shall be credited towards the Additional Rent next due. 


    (ii) Landlord's
then-current annual operating and capital budgets for the Building and the Project or the pertinent part thereof shall be used for purposes
of calculating Tenant's monthly payment of estimated Additional Rent for the current year, subject to adjustment as provided above. Landlord shall make the final determination of Additional Rent for
the year in which this Lease terminates as soon as possible after termination of such year. Even though the Term has expired and Tenant has vacated the Premises, Tenant shall remain liable for payment
of any amount due to Landlord in excess of the estimated Additional Rent previously paid by Tenant, and, conversely, Landlord shall promptly return to Tenant any overpayment. Failure of Landlord to
submit statements as called for herein shall not be deemed a waiver of Tenant's obligation to pay Additional Rent as herein provided. 


    (iii) With
respect to Expenses which Landlord allocates to the Building, Tenant's "Proportionate Share" shall be the
percentage set forth in the Basic Lease Information as Tenant's Proportionate Share of the Building, as adjusted by Landlord from time to time for a remeasurement of or changes in the physical size of
the Premises or the Building, whether such changes in size are due to an addition to or a sale or conveyance of a portion of the Building or otherwise. With respect to Expenses which Landlord
allocates to the Project as a whole or to only a portion of the Project, Tenant's "Proportionate Share" shall be, with respect to Expenses which
Landlord allocates to the Project as a whole, the percentage set forth in the Basic Lease Information as Tenant's Proportionate Share of the Project and, with respect to Expenses which Landlord
allocates to only a portion of the Project, a percentage calculated by Landlord from time to time in its sole discretion and furnished to Tenant in writing, in either case as adjusted by Landlord from
time to time for a remeasurement of or changes in the physical size of the Premises or the Project, whether such changes in size are due to an addition to or a sale or conveyance of a portion of the
Project or otherwise. Notwithstanding the foregoing, Landlord may equitably adjust Tenant's Proportionate Share(s) for all or part of any item of expense or cost reimbursable by Tenant that relates to
a repair, replacement, or service that benefits only the Premises or only a portion of the Building and/or the Project or that varies with the occupancy of the Building and/or the Project. Without
limiting the generality of the foregoing, Tenant understands and agrees that Landlord shall have the right to adjust Tenant's Proportionate Share(s) of any Utility Expenses based upon Tenant's use of
the Utilities or similar services as reasonably estimated and determined by Landlord based upon factors such as size of the Premises and intensity of use of such Utilities by Tenant such that Tenant
shall pay the portion of such charges reasonably consistent with Tenant's use of such Utilities and similar services. If Tenant disputes any such estimate or determination of Utility Expenses, then
Tenant shall either pay the estimated amount or cause the Premises to be separately metered at Tenant's sole expense. 




    (d) General Payment Terms. The Base Rent, Additional Rent and all other sums payable by Tenant to Landlord hereunder, if
any, any late charges assessed pursuant to Paragraph 6 below and any interest assessed pursuant to Paragraph 45 below, are referred to as the
"Rent". All Rent shall be paid, without deduction, offset or abatement in lawful money of the United States of America. Checks are to be made payable to
Harbor Investment Partners and shall be mailed to: Dept. No. 66218, El Monte, California 91735-6128 or to such other person or place as Landlord may, from time to time, designate to
Tenant in writing. The Rent for any fractional part of a calendar month at the commencement or termination of the Lease term shall be a prorated amount of the Rent for a full calendar month based upon
a thirty (30) day month. 


6





 


    (e) Tenant's Audit Rights. Provided Tenant is not then in Default under the terms of this Lease (nor is any event
occurring which with the giving of notice or the passage of time, or both, would constitute a Default hereunder), Tenant, at its sole expense, shall have the right within ninety (90) days after
the delivery of each Expense Statement to review and audit Landlord's books and records regarding such Expense Statement for the sole purpose of determining the accuracy thereof. Such review or audit
shall be performed by a nationally recognized accounting firm that calculates its fees with respect to hours actually worked and that does not discount its time or rate (as opposed to a calculation
based upon percentage of recoveries or other incentive arrangement), shall take place during normal business hours in the office of Landlord or Landlord's property manager and shall be completed
within three (3) business days after the commencement thereof. If Tenant does not so review or audit Landlord's books and records, Landlord's Expense Statement shall be final and binding upon
Tenant. In the event that Tenant determines on the basis of its review of Landlord's books and records that the amount of Expenses paid by Tenant pursuant to this Paragraph 4(e) for the period
covered by such Expense Statement is less than or greater than the actual amount properly payable by Tenant under the terms of this Lease, Tenant shall promptly pay any deficiency to Landlord or, if
Landlord concurs with the results of such audit, Landlord shall promptly refund any excess payment to Tenant, as the case may be. Tenant shall be solely responsible for the cost of such audit;
provided, however, that if the audit reveals that Landlord has overstated Expenses for the relevant annual period by more than seven percent (7%) of the actual Expenses for such period, then Landlord
shall pay the reasonable costs of the audit. 


5.  UTILITY EXPENSES  


    (a) Tenant
shall pay the cost of all water, sewer use, sewer discharge fees and permit costs and sewer connection fees, gas, heat, electricity, refuse
pick-up, janitorial service, telephone and all materials and services or other utilities (collectively, "Utilities") billed or metered
separately to the Premises and/or Tenant, together with all taxes, assessments, charges and penalties added to or included within such cost. Tenant acknowledges that the Premises, the Building and/or
the Project may become subject to the rationing of Utility services or restrictions on Utility use as required by a public utility company, governmental agency or other similar entity having
jurisdiction thereof. Tenant acknowledges and agrees that its tenancy and occupancy hereunder shall be subject to such rationing or restrictions as maybe imposed upon Landlord, Tenant, the Premises,
the Building and/or the Project, and Tenant shall in no event be excused or relieved from any covenant or obligation to be kept or performed by Tenant by reason of any such rationing or restrictions.
Tenant agrees to comply with energy conservation programs implemented by Landlord by reason of rationing, restrictions or Laws. 


    (b) Landlord
shall not be liable for any loss, injury or damage to property caused by or resulting from any variation, interruption, or failure of Utilities due to any
cause whatsoever, or from failure to make any repairs or perform any maintenance. No temporary interruption or failure of such services incident to the making of repairs, alterations, improvements, or
due to accident, strike, or conditions or other events shall be deemed an eviction of Tenant or relieve Tenant from any of its obligations hereunder.
In no event shall Landlord be liable to Tenant for any damage to the Premises or for any loss, damage or injury to any property therein or thereon occasioned by bursting, rupture, leakage or overflow
of any plumbing or other pipes (including, without limitation, water, steam, and/or refrigerant lines), sprinklers, tanks, drains, drinking fountains or washstands, or other similar cause in, above,
upon or about the Premises, the Building, or the Project. 


6.  LATE CHARGE  



    Notwithstanding any other provision of this Lease, Tenant hereby acknowledges that late payment to Landlord of Rent, or other amounts due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. If any 


7





 


Rent or other sums due from Tenant are not received by Landlord or by Landlord's designated agent within five (5) days after their due date, then Tenant shall pay to Landlord a late charge
equal to six percent (6%) of such overdue amount, plus any costs and attorneys' fees incurred by Landlord by reason of Tenant's failure to pay Rent and/or other charges when due hereunder. Landlord
and Tenant hereby agree that such late charges represent a fair and reasonable estimate of the cost that Landlord will incur by reason of Tenant's late payment and shall not be construed as a penalty.
Landlord's acceptance of such late charges shall not constitute a waiver of Tenant's default with respect to such overdue amount or estop Landlord from exercising any of the other rights and remedies
granted under this Lease. 



	Initials:	 	/s/
 Landlord	 	/s/
 Tenant






7.  SECURITY DEPOSIT  


    Concurrently with Tenant's execution of the Lease, Tenant shall deposit with Landlord the Security Deposit specified in the Basic Lease Information as security
for the full and faithful performance of each and every term, covenant and condition of this Lease. Landlord may use, apply or retain the whole or any part of the Security Deposit as may be reasonably
necessary (a) to remedy Tenant's Default in the payment of any Rent, (b) to repair damage to the Premises caused by Tenant and not repaired by Tenant in accordance with the terms of this
Lease, (c) to clean the Premises upon
termination of this Lease if Tenant does not surrender the Premises to Landlord in accordance with the requirements of this Lease, (d) to reimburse Landlord for the payment of any amount which
Landlord may reasonably spend or be required to spend by reason of Tenant's Default, or (e) to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's
Default. Should Tenant faithfully and fully comply with all of the terms, covenants and conditions of this Lease, within thirty (30) days following the expiration of the Term, the Security
Deposit or any balance thereof shall be returned to Tenant or, at the option of Landlord, to the last assignee of Tenant's interest in this Lease. Landlord shall not be required to keep the Security
Deposit separate from its general funds and Tenant shall not be entitled to any interest on such deposit. If Landlord so uses or applies all or any portion of said deposit, within five (5) days
after written demand therefor Tenant shall deposit cash with Landlord in an amount sufficient to restore the Security Deposit to the full extent of the above amount, and Tenant's failure to do so
shall be a default under this Lease. In the event Landlord transfers its interest in this Lease, Landlord shall transfer the then remaining amount of the Security Deposit to Landlord's successor in
interest, and thereafter Landlord shall have no further liability to Tenant with respect to such Security Deposit. 



8.  LETTER OF CREDIT  


    Upon execution of this Lease, Tenant shall deliver to Landlord, at Tenant's sole cost and expense, the Letter of Credit described below in the amount of Nine
Hundred Sixty-Two Thousand One Hundred Sixty and 00/100 Dollars ($962,160.00) (the "LC Face Amount") as security for Tenant's performance of
all of Tenant's covenants and obligations under this Lease; provided, however, that neither the Letter of Credit nor any Letter of Credit Proceeds (as defined below) shall be deemed an advance rent
deposit or an advance payment of any other kind, or a measure of Landlord's damages upon Tenant's Default. The Letter of Credit shall be maintained in effect from the date hereof through the date that
is sixty (60) days after the Expiration Date (the "LC Termination Date"). On the LC Termination Date, Landlord shall return to Tenant the Letter
of Credit and any Letter of Credit Proceeds then held by Landlord (other than those Letter of Credit Proceeds Landlord is entitled to retain under the terms of this Paragraph 8(a)); provided,
however, that in no event shall any such return be construed as an admission by Landlord that Tenant has performed all of its obligations hereunder. Landlord shall not be required to segregate the
Letter of Credit Proceeds from its other 


8





 


funds and no interest shall accrue or be payable to Tenant with respect thereto. Landlord may (but shall not be required to) draw upon the Letter of Credit and use the proceeds therefrom (the
"Letter of Credit Proceeds") or any portion thereof as may be reasonably necessary (i) to cure any Default under this Lease and to compensate
Landlord for any loss or damage Landlord incurs as a result of such Default, (ii) to repair damage to the Premises caused by Tenant and not repaired by Tenant in accordance with the terms of
this Lease, (iii) to clean the Premises upon termination of this Lease if Tenant does not surrender the Premises to Landlord in accordance with the requirements of this Lease, (iv) to
reimburse Landlord for the payment of any amount which Landlord may for any other purpose spend or be required to spend by reason of Tenant's Default, and (v) for any other purpose for which
Landlord is entitled to use the Security Deposit, it being understood that any use of the Letter of Credit Proceeds shall not constitute a bar or defense to any of Landlord's remedies set forth in
Paragraph 26 below. In such event and upon written notice from Landlord to Tenant specifying the amount of the Letter of Credit Proceeds so utilized by Landlord and the particular purpose for
which
such amount was applied, Tenant shall immediately deliver to Landlord an amendment to the Letter of Credit or a replacement Letter of Credit in an amount equal to the full LC Face Amount. Tenant's
failure to deliver such replacement Letter of Credit to Landlord within ten (10) days of Landlord's notice shall constitute a Default hereunder. In the event Landlord transfers its interest in
this Lease, Landlord shall transfer the Letter of Credit and any Letter of Credit Proceeds then held by Landlord to Landlord's successor in interest, at Landlord's sole cost and expense, and
thereafter Landlord shall have no further liability to Tenant with respect to such Letter of Credit or Letter of Credit Proceeds. 


    (a) As
used herein, Letter of Credit shall mean an unconditional, stand-by irrevocable letter of credit (herein referred to as the
"Letter of Credit") issued by the San Francisco office of a major national bank insured by the Federal Deposit Insurance Corporation and otherwise
satisfactory to Landlord (the "Bank"), naming Landlord as beneficiary, in the amount of the LC Face Amount, and otherwise in form and substance
satisfactory to Landlord. The Letter of Credit shall be for a one-year term and shall provide: (i) that Landlord may make partial and multiple draws thereunder, up to the face
amount thereof, (ii) that Landlord may draw upon the Letter of Credit up to the full amount thereof and the Bank will pay to Landlord the amount of such draw upon receipt by the Bank of a sight
draft signed by Landlord and accompanied by a written certification from Landlord to the Bank stating either that: (A) a Default has occurred and is continuing under this Lease and any
applicable grace period has expired, or (B) Landlord has not received notice from the Bank at least thirty (30) days prior to the then current expiry date of the Letter of Credit that
the Letter of Credit will be renewed by the Bank for at least one (1) year beyond the relevant annual expiration date or, in the case of the last year of the Term, sixty (60) days after
the Expiration Date, together with a replacement Letter of Credit or a modification to the existing Letter of Credit effectuating such renewal, and Tenant has not otherwise furnished Landlord with a
replacement Letter of Credit as hereinafter provided; and (iii) that, in the event of Landlord's assignment or other transfer of its interest in this Lease, the Letter of Credit shall be freely
transferable by Landlord, without recourse and without the payment of any fee or consideration, to the assignee or transferee of such interest and the Bank shall confirm the same to Landlord and such
assignee or transferee. In the event that the Bank shall fail to (y) notify Landlord that the Letter of Credit will be renewed for at least one (1) year beyond the then applicable
expiration date, and (z) deliver to Landlord a replacement Letter of Credit or a modification to the existing Letter of Credit effectuating such renewal, and Tenant shall not have otherwise
delivered to Landlord, at least thirty (30) days prior to the relevant annual expiration date, a replacement Letter Of Credit in the amount required hereunder and otherwise meeting the
requirements set forth above, then Landlord shall be entitled to draw on the Letter of Credit as provided above, and shall hold the proceeds of such draw as Letter of Credit Proceeds pursuant to
Paragraph 8(a) above. 


9





 


9.  POSSESSION  


    (a) Tenant's Right of Possession. Subject to Paragraph 9(b), Tenant shall be entitled to
possession of the Premises upon commencement of the Term. 


    (b) Early Occupancy. Notwithstanding anything to the contrary contained herein, Tenant shall
have the right to enter upon the Initial Premises at times acceptable to Landlord following the execution of this Lease and the vacation of the Premises by Intuit for the sole purpose of installing
telephones and computer equipment, provided that Tenant shall not conduct its business in the Initial Premises during such period, and provided further, that such entry shall be subject to all of the
terms and conditions of this Lease, excluding only the obligation to pay Rent. 


    (c) Delay in Delivering Possession. If for any reason whatsoever, Landlord cannot deliver
possession of the Premises to Tenant on or before the Estimated Commencement Date, this Lease shall not be void or voidable, nor shall Landlord, or Landlord's agents, advisors, employees, partners,
shareholders, directors, invitees or independent contractors (collectively, "Landlord's Agents"), be liable to Tenant for any loss or damage resulting
therefrom. Tenant shall not be liable for Rent until Landlord delivers possession of the Premises to Tenant. The Expiration Date shall be extended by the same number of days that Tenant's possession
of the Premises was delayed beyond the Estimated Commencement Date. 


    (d) Tenant's Right to Terminate Lease. Notwithstanding anything to the contrary contained in
Paragraph 9(c) above, if Landlord fails to deliver possession of the Subsequent Premises to Tenant on or before September 30, 2000 for reasons other than Force Majeure Events and Tenant
Delays (as such terms are hereinafter defined), then Tenant shall have the right, as its sole and absolute remedy for such failure, to terminate this Lease by written notice to Landlord given not
later than October 5, 2000. If Tenant fails to deliver such notice to Landlord on or before such date, then this Lease shall remain in fall force and effect and Tenant's rights under this
Paragraph 9(d) shall terminate. As used herein, "Force Majeure Events" means strikes, embargoes, governmental regulations, acts of God, war,
civil commotion or other strife, and other events beyond the reasonable control of Landlord; and "Tenant Delays" means any delays caused by Tenant or
Tenant's Agents (as hereinafter defined). 



10. USE OF PREMISES  


    (a) Permitted Use. The use of the Premises by Tenant and Tenant's agents, advisors, employees,
partners, shareholders, directors, invitees and independent contractors (collectively, "Tenant's Agents") shall be solely for the Permitted Use
specified in the Basic Lease Information and for no other use. Tenant shall not permit any objectionable or unpleasant odor, smoke, dust, gas, noise or vibration to emanate from or near the Premises.
The Premises shall not be used to create any nuisance or trespass, for any illegal purpose, for any purpose not permitted by Laws, for any purpose that would invalidate the insurance or increase the
premiums for insurance on the Premises, the Building or the Project or for any purpose or in any manner that would interfere with other tenants' use or occupancy of the Project. If any of Tenant's
office machines or equipment disturb any other tenant in the Building, then Tenant shall provide adequate insulation or take such other action as may be necessary to eliminate the noise or
disturbance. Tenant agrees to pay to Landlord, as Additional Rent, any increases in premiums on policies resulting from Tenant's Permitted Use or any other use or action by Tenant or Tenant's Agents
which increases Landlord's premiums or requires additional coverage by Landlord to insure the Premises. Tenant agrees not to overload the floor(s) of the Building. 


    (b) Compliance with Governmental Regulations and Private Restrictions. Tenant and Tenant's
Agents shall, at Tenant's expense, faithfully observe and comply with (i) all municipal, state and federal laws, statutes, codes, rules, regulations, ordinances, requirements, and orders
(collectively, "Laws"), now in force or which may hereafter be in force pertaining to the Premises or Tenant's use of the Premises, the Building or the
Project, whether substantial in cost or otherwise; provided, however, that except as provided in Paragraph 10(c) below, Tenant shall not be required to make or, except as provided in 


10





 


Paragraph 4 above, pay for, structural changes to the Premises or the Building not related to Tenant's specific use of the Premises unless the requirement for such changes is imposed as a
result of any improvements or additions made or proposed to be made at Tenant's request; (ii) all recorded covenants, conditions and restrictions affecting the Project
("Private Restrictions") now in force or which may hereafter be in force; and (iii) any and all rules and regulations set forth in  Exhibit C and any other rules and regulations now Or hereafter promulgated by Landlord related to parking or the operation of the Premises, the
Building and/or the Project (collectively, the "Rules and Regulations"). The judgment of any court of competent jurisdiction, or the admission of Tenant
in any action or proceeding against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any such Laws or Private Restrictions, shall-be conclusive of that fact as
between Landlord and Tenant. 


    (c) Compliance with Americans with Disabilities Act. Landlord and Tenant hereby agree and acknowledge that the Premises,
the Building and/or the Project may be subject to, among other Laws, the requirements of the Americans with Disabilities Act, a federal law codified at 42 U.S.C. § 12101  et seq., including, but not
limited to, Title III thereof, and all regulations and guidelines related thereto, together with any and all laws, rules,
regulations, ordinances, codes and statutes now or hereafter enacted by local or state agencies having jurisdiction thereof, including all requirements of Title 24 of the State of California, as the
same may be in effect on the date of this Lease and may be hereafter modified, amended or supplemented (collectively, the "ADA"). Any Alterations to be
constructed hereunder shall be in compliance with the requirements of the ADA, and all costs incurred for purposes of compliance therewith shall be a part of and included in the costs of the
Alterations. Tenant shall be solely responsible for conducting its own independent investigation of this matter and for ensuring that the design of all Alterations strictly complies with all
requirements of the ADA. Subject to, reimbursement pursuant to Paragraph 4 above, if any barrier removal work or other work is required to the Building, the Common Areas or the Project under
the ADA, then such work shall be the responsibility of Landlord; provided, however, that if such work is required under the ADA as a result of Tenant's specific use of the Premises or any work or
Alteration (as hereinafter defined) made to the Premises by or on behalf of Tenant, then such work shall be performed by Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and expense for fully and faithfully complying with all applicable requirements of the ADA, including, without limitation, not
discriminating against any disabled persons in the operation of Tenant's business in or about the Premises, and offering or otherwise providing auxiliary aids and services as, and when, required by
the ADA. Within ten (10) days after receipt, Tenant shall advise Landlord in writing, and provide Landlord with copies of (as applicable), any notices alleging violation of the ADA relating to
any portion of the Premises, the Building or the
Project; any claims made or threatened orally or in writing regarding noncompliance with the ADA and relating to any portion of the Premises, the Building, or the Project; or any governmental or
regulatory actions or investigations instituted or threatened regarding noncompliance with the ADA and relating to any portion of the Premises, the Building or the Project. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold Landlord and Landlord's Agents harmless and indemnify Landlord and Landlord's Agents from and against all liabilities, damages,
claims, losses, penalties, judgments, charges and expenses (including attorneys' fees, costs of court and expenses necessary in the prosecution or defense of any litigation including the enforcement
of this provision) arising from or in any way related to, directly or indirectly, Tenant's or Tenant's Agents' violation or alleged violation of the ADA. Tenant agrees that the obligations of Tenant
herein shall survive the expiration or earlier termination of this Lease. 


11. ACCEPTANCE OF PREMISES  



    (a) By
entry hereunder, Tenant accepts the Premises as suitable for Tenant's intended use and as being in good and sanitary operating order, condition and repair, AS
IS, and without representation or 


11





 


warranty by Landlord as to the condition, use or occupancy which may be made thereof. Any exceptions to the foregoing must be by written agreement executed by Landlord and Tenant. 


    (b) Notwithstanding
the terms of Paragraph 11(a) above, Landlord shall cause the roof on the Building to be in good condition and the HVAC, electrical and
plumbing systems serving the Premises to be in good working order on the Commencement Date. Any claims by Tenant under the preceding, sentence shall be made in writing not later than the fifteenth
(15th) day after the Commencement Date. In the event Tenant fails to deliver a written claim to Landlord on or before such fifteenth (15th) day, then Landlord shall be conclusively deemed to have
satisfied its obligations under this Paragraph 11(b). 


12. SURRENDER  


    Tenant agrees that on the last day of the Term, or on the sooner termination of this Lease, Tenant shall surrender the Premises to Landlord (a) in good
condition and repair (damage by acts of God, fire, and normal wear and tear excepted), but with all interior walls painted or cleaned so they appear painted, any carpets cleaned, all floors cleaned
and waxed, all non-working light bulbs and ballasts replaced and all roll-up doors and plumbing fixtures in good condition and working order, and (b) otherwise in
accordance with Paragraph 33(h). Normal wear and tear shall not include any damage or deterioration to the floors of the Premises arising from the use of forklifts in, on or about the Premises
(including,
without limitation, any marks or stains on any portion of the floors, other than marks arising in the ordinary course), and any damage or deterioration that would have been prevented by proper
maintenance by Tenant, or Tenant otherwise performing all of its obligations under this Lease. On or before the expiration or sooner termination of this Lease, (i) Tenant shall remove all of
Tenant's Property (as hereinafter defined) and Tenant's signage from the Premises, the Building and the Project and repair any damage caused by such removal, and (ii) Landlord may, by notice to
Tenant given not later than ninety (90) days prior to the Expiration Date (except in the event of a termination of this Lease prior to the scheduled Expiration Date, in which event no advance
notice shall be required), require Tenant at Tenant's expense to remove any or all Alterations and to repair any damage caused by such removal. Nothing contained in the foregoing sentence shall be
deemed to obligate Tenant to remove from the Premises any of the improvements located therein on the Initial Premises Commencement Date or the Subsequent Premises Commencement Date, as applicable. Any
of Tenant's Property not removed by Tenant as required herein shall be deemed abandoned and may be stored, removed, and disposed of by Landlord at Tenant's expense, and Tenant waives all claims
against Landlord for any damages resulting from Landlord's retention and disposition of such property; provided, however, that Tenant shall remain liable to Landlord for all costs incurred in storing
and disposing of such abandoned property of Tenant. All Alterations except those which Landlord requires Tenant to remove shall remain in the Premises as the property of Landlord. If the Premises are
not surrendered at the end of the Term or sooner termination of this Lease, and in accordance with the provisions of this Paragraph 12 and Paragraph 33(h) below. Tenant shall continue to
be responsible for the payment of Rent (as the same may be increased pursuant to Paragraph 36 below) until the Premises are so surrendered in accordance with said Paragraphs, and Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all loss or liability resulting, from delay by Tenant in so surrendering the Premises including, without limitation, any loss or
liability resulting from any claim against Landlord made by any succeeding tenant or prospective tenant founded on or resulting from such delay and losses to Landlord due to lost opportunities to
lease any portion of the Premises to any such succeeding tenant or prospective tenant, together with, in each case, actual attorneys' fees and costs. 


12





 

13. ALTERATIONS AND ADDITIONS  


    (a) Tenant
shall not make, or permit to be made, any alteration, addition or improvement (hereinafter referred to individually as an
"Alteration" and collectively as the "Alterations") to the Premises or any part thereof without the
prior written consent of Landlord, which consent shall not be unreasonably withheld; provided, however, that Landlord shall have the right in its sole and absolute discretion to consent or to withhold
its consent to any Alteration which affects the structural portions of the Premises, the Building or the Project or the Systems serving the Premises, the Building and/or the Project or any portion
thereof. 


13







 
    (b) Any Alteration to the Premises shall be at Tenant's sole cost and expense, in compliance with all applicable Laws and all requirements requested by Landlord,
including, without limitation, the requirements of any insurer providing coverage for the Premises or the Project or any part thereof, and in accordance with plans and specifications approved in
writing by Landlord, and shall be constructed and installed by a contractor approved in writing by Landlord. As a further condition to giving, consent, Landlord may require Tenant to provide Landlord,
at Tenant's sole cost and expense, with evidence satisfactory to Landlord of Tenant's financial ability to pay the costs and expenses of the proposed Tenant Improvements. Before Alterations may begin,
valid building, permits or other permits or licenses required must be furnished to Landlord, and, once the Alterations begin, Tenant will diligently and continuously pursue their completion. Landlord
may monitor construction of the Alterations and Tenant shall reimburse Landlord for its costs (including, without limitation, the costs of any construction manager retained by Landlord, provided that
the costs of such construction manager shall not exceed five percent (5%) of the total "hard" and "soft" costs of the applicable Alterations) in reviewing plans and documents and in monitoring
construction. Tenant shall maintain during the course of construction, at its sole cost and expense, builders' risk insurance for the amount of the completed value of the Alterations on an
all-risk non-reporting form covering all improvements under construction, including building materials, and other insurance in amounts and against such risks as Landlord shall
reasonably require in connection with the Alterations. In addition to and without limitation on the generality of the foregoing, Tenant shall ensure that its' contractor(s) procure and maintain in
full force and effect during the course of construction a "broad form" commercial general liability and property damage policy of insurance naming Landlord, Landlord's investment advisor and agent,
UBS Brinson Realty Investors LLC, Tenant and Landlord's lenders as additional insureds. The minimum limit of coverage of the aforesaid policy shall be in the amount of not less than Three Million
Dollars ($3,000,000.00) for injury or death of one person in any one accident or occurrence and in the amount of not less than Three Million Dollars ($3,000,000.00) for injury or death of more than
one person in any one accident or occurrence, and shall contain a severability of interest clause or a cross liability endorsement. Such insurance shall further insure Landlord and Tenant against
liability for property damage of at least One Million Dollars ($1,000,000.00). 


    (c) All
Alterations, including, but not limited to, heating, lighting, electrical, air conditioning, fixed partitioning, drapery, wall covering and paneling,
built-in cabinet work and carpeting installations made by Tenant, together with all property that has become an integral part of the Premises or the Building, shall, solely for federal and
state income tax purposes, be deemed the property of Tenant upon installation; provided, however, that such Alterations and property shall automatically be and become the property of Landlord for all
purposes upon the expiration or sooner termination of this Lease without the need for any further documentation from Tenant, and shall not be deemed trade fixtures or Tenant's Property. If requested
by Landlord, Tenant will pay, prior to the commencement of construction (excluding Alterations consisting solely of paint and carpeting), an amount determined by Landlord necessary to cover the costs
of demolishing such Alterations and/or the cost of returning the Premises and the Building to its condition prior to such Alterations. Landlord shall return such amount to Tenant promptly following
Tenant's demolition of such Alterations and restoration of the Premises and the Building. 


    (d) No
private telephone systems and/or other related computer or telecommunications equipment or lines may be installed without Landlord's prior written consent. If
Landlord gives such consent, all equipment must be installed within the Premises and, at the request of Landlord made at any time prior to the expiration of the Term, removed upon the expiration or
sooner termination of this Lease and the Premises restored to the same condition as before such installation. 


    (e) Notwithstanding
anything herein to the contrary, before installing any equipment or lights which generate an undue amount of heat in the Premises, or if Tenant
plans to use any high-power usage equipment in the Premises, Tenant shall obtain the written permission of Landlord. Landlord 


14





 


may refuse to grant such permission unless Tenant agrees to pay the costs to Landlord for installation of supplementary air conditioning capacity or electrical systems necessitated by such equipment. 


    (f)  Tenant
agrees not to proceed to make any Alterations, notwithstanding consent from Landlord to do so, until Tenant has provided Landlord with at least fifteen
(15) days prior written notice of the date Tenant desires to commence construction or installation of such Alterations, in order that Landlord may post appropriate notices to avoid any
liability to contractors or material suppliers for payment for Tenant's improvements. Tenant will at all times permit such notices to be posted and to remain posted until the completion of work. 



    (g) Landlord
shall provide an allowance to Tenant in the amount specified in the Basic Lease Information'("Alterations
Allowance") for the making of Alterations to the Premises following the Commencement Date, provided that such Alterations are made in full compliance with the terms of this
Paragraph 13. Landlord shall disburse the Alterations Allowance to Tenant following, the completion of the Alterations and the delivery to Landlord of invoices, lien waivers and other documents
requested by Landlord to evidence the lien-free completion of the Alterations; provided, however, that Landlord shall have no obligation to disburse all or any portion of the Alterations
Allowance to Tenant after the first anniversary of the Commencement Date, and any portion that is not disbursed after such anniversary shall no longer be available to Tenant hereunder. The Alterations
Allowance shall be the maximum contribution by Landlord for the Alterations. Should the actual cost of planning and constructing such Alterations be less than the Alterations Allowance, the
Alterations Allowance shall be reduced to an amount equal to said actual cost. 


14. MAINTENANCE AND REPAIRS OF PREMISES  


    (a) Maintenance by Tenant. Throughout the Term, Tenant shall, at its sole expense,
(i) keep and maintain in good order and condition the Premises, and repair and replace every part thereof, including glass, windows, window frames, window casements, skylights, interior and
exterior doors, door frames and door closers; interior lighting (including, without limitation, light bulbs and ballasts), the plumbing and electrical systems exclusively serving the Premises, all
communications systems serving the Premises, Tenant's signage, interior demising walls and partitions, equipment, interior painting and interior walls and floors, and the roll-up doors,
ramps and dock equipment, including, without limitation, dock bumpers, dock plates, dock seals, dock levelers and dock lights located in or on the Premises (excepting only those portions of the
Building or the Project to be maintained by Landlord, as provided in Paragraph 14(b) below), (ii) furnish all expendables, including light bulbs, paper goods and soaps, used in the
Premises, and (iii) keep and maintain in good order and condition, repair and replace all of Tenant's security systems in or about or serving the Premises and, except to the extent that
Landlord notifies Tenant in writing of its intention to arrange for such monitoring, cause the fire alarm systems serving the Premises to be monitored by a monitoring or protective services firm
approved by Landlord in writing. Tenant shall not do nor shall Tenant allow Tenant's Agents to do anything to cause any damage, deterioration or unsightliness to the Premises, the Building or the
Project. 


    (b) Maintenance by Landlord. Subject to the provisions of Paragraphs 14(a), 22 and 23, and
further subject to Tenant's obligation under Paragraph 4 to reimburse Landlord, in the form of Additional Rent, for Tenant's Proportionate Share(s) of the cost and expense of the following
items, Landlord agrees to repair and maintain the following items: the roof coverings (provided that Tenant installs no additional air conditioning or other equipment on the roof that damages the roof
coverings, in which event Tenant shall pay all costs resulting from the presence of such additional equipment); the Systems serving the Premises and the Building, excluding the plumbing and electrical
systems exclusively serving the Premises; and the Parking Areas, pavement, landscaping, sprinkler systems, sidewalks, driveways, curbs, and lighting systems in the Common Areas. Subject to the
provisions of Paragraphs 14(a), 22 and 23, Landlord, at its own cost and expense, agrees to repair and maintain the following items: the 


15





 


structural portions of the roof (specifically excluding the roof coverings), the foundation, the footings, the floor slab, and the load bearing walls and exterior walls of the Building (excluding any
glass and any routine maintenance, including, without limitation, any painting, sealing, patching and waterproofing of such walls). Notwithstanding anything in this Paragraph 14 to the
contrary, Landlord shall have the right to either repair or to require Tenant to repair any damage to any portion of the Premises, the Building and/or the Project caused by or created due to any act,
omission, negligence or willful misconduct of Tenant or Tenant's Agents and to restore the Premises, the Building and/or the Project, as applicable., to the condition existing prior to the occurrence
of such damage; provided, however, that in the event Landlord elects to perform such repair and restoration work, Tenant shall reimburse Landlord upon demand for all costs and expenses incurred by
Landlord in connection therewith. Landlord's obligation hereunder to repair and maintain is subject to the condition precedent that Landlord shall have received written notice of the need for such
repairs and maintenance and a reasonable time to perform such repair and maintenance. Tenant shall promptly report in writing to Landlord any defective condition known to it which Landlord is required
to repair, and failure to so report such defects shall make Tenant responsible to Landlord for any liability incurred by Landlord by reason of such condition. 



    (c) Tenant's Waiver of Rights. Tenant hereby expressly waives all rights to make repairs at the
expense of Landlord or to terminate this Lease, as provided for in California Civil Code Sections 1941 and 1942, and 1932(l), respectively, and any similar or successor statute or law in effect or any
amendment thereof during the Tenn. 


15. LANDLORD'S INSURANCE  


    Landlord shall purchase and keep in force fire, extended coverage and "all risk" insurance covering the Building and the Project. Tenant shall, at its sole
cost and expense, comply with any and all reasonable requirements pertaining to the Premises, the Building and the Project of any insurer necessary for the maintenance of reasonable fire and
commercial general liability insurance, covering the Building and the Project. Landlord, at Tenant's cost, may maintain "Loss of Rents" insurance, insuring that the Rent will be paid in a timely
manner to Landlord for a period of at least twelve (12) months if the Premises, the Building or the Project or any portion thereof are destroyed or rendered unusable or inaccessible by any
cause insured against under this Lease. 


16. TENANT'S INSURANCE  


    (a) Commercial General Liability Insurance. Tenant shall, at Tenant's expense, secure and keep
in force a "broad form" commercial general liability insurance and property damage policy covering the Premises, insuring Tenant, and naming Landlord, Landlord's investment advisors and agents from
time to time, including, without limitation, UBS Brinson Realty Investors LLC, and Landlord's lenders as additional insureds, against any liability arising out of the ownership, use, occupancy or
maintenance of the Premises. The minimum limit of coverage of such policy shall be in the amount of not less than Three Million Dollars ($3,000,000.00) for injury or death of one person in any one
accident or occurrence and in the amount of not less than Three Million Dollars ($3,000,000.00) for injury or death of more than one person in any one accident or occurrence, shall include an extended
liability endorsement providing contractual liability coverage (which shall include coverage for Tenant's indemnification obligations in this Lease), and shall contain a severability of interest
clause or a cross liability endorsement. Such insurance shall further insure Landlord and Tenant against liability for property damage of at least Three Million Dollars ($3,000,000.00). Landlord may
from time to time require reasonable increases in any such limits if Landlord believes that additional coverage is necessary or desirable. The limit of any insurance shall not limit the liability of
Tenant hereunder. No policy maintained by Tenant under this Paragraph 16(a) shall contain a deductible greater than Two Thousand Five Hundred Dollars ($2,500.00). No policy shall be cancelable
or subject to reduction of 


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coverage without thirty (30) days prior written notice to Landlord, and loss payable clauses shall be subject to Landlord's approval. Such policies of insurance shall be issued as primary
policies and not
contributing with or in excess of coverage that Landlord may carry, by an insurance company authorized to do business in the State of California for the issuance of such type of insurance coverage and
rated A:IX or better in Best's Key Rating Guide. 


    (b) Personal Property Insurance. Tenant shall maintain in full force and effect on all of its
personal property, furniture, furnishings, trade or business fixtures and equipment (collectively, "Tenant's Property") on the Premises, a policy or
policies of fire and extended coverage insurance with standard coverage endorsement to the extent of the full replacement cost thereof. No such policy shall contain a deductible greater than Two
Thousand Five Hundred Dollars ($2,500.00). During the term of this Lease the proceeds from any such policy or policies of insurance shall be used for the repair or replacement of the fixtures and
equipment so insured. Landlord shall have no interest in the insurance upon Tenant's equipment and fixtures and will sign all documents reasonably necessary in connection with the settlement of any
claim or loss by Tenant. Landlord will not carry insurance on Tenant's possessions. 


    (c) Worker's Compensation Insurance; Employer's Liability Insurance. Tenant shall, at Tenant's
expense, maintain in full force and effect worker's compensation insurance with not less than the minimum limits required by law, and employer's liability insurance with a minimum limit of coverage of
One Million Dollars ($ 1,000,000.00). 


    (d) Evidence of Coverage. Tenant shall deliver to Landlord certificates of insurance and true
and complete copies of any and all endorsements required herein for all insurance required to be maintained by Tenant hereunder at the time of execution of this Lease by Tenant. Tenant shall, at least
thirty (30) days prior to expiration of each policy, furnish Landlord with certificates of renewal or "binders" thereof. Each certificate shall expressly provide that such policies shall not be
cancellable or otherwise subject to modification except after thirty (30) days prior written notice to Landlord and the other parties named as additional insureds as required in this Lease
(except for cancellation for nonpayment of premium, in which event cancellation shall not take effect until at least ten (10) days notice has been given to Landlord). 


17. INDEMNIFICATION  


    (a) Of Landlord. Tenant shall indemnify and hold harmless Landlord and Landlord's Agents against
and from any and all claims, liabilities, judgments, costs, demands, causes of action and expenses (including, without limitation, reasonable attorneys' fees) arising from (i) the use of the
Premises, the Building or the Project by Tenant or Tenant's Agents, or from any activity done, permitted or suffered by Tenant or Tenant's Agents in or about the Premises, the Building or the Project,
and (ii) any act, neglect, fault, willful misconduct or omission of Tenant or Tenant's Agents, or from any breach or default in the terms of this Lease by Tenant or Tenant's Agents, and
(iii) any action or proceeding brought on account of any matter in items (i) or (ii). If any action or proceeding is brought against Landlord by reason of any such claim, upon notice
from Landlord, Tenant shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord. As a material part of the consideration to Landlord, Tenant hereby releases Landlord and Landlord's Agents from responsibility for, waives its entire claim of
recovery for and assumes all risk of (A) damage to property or injury to persons in or about the Premises, the Building or the Project from any cause whatsoever (except that which is caused by
the sole active gross negligence or willful misconduct of Landlord or Landlord's Agents or by the failure of Landlord to observe any of the terms and conditions of this Lease, if such failure has
persisted for an unreasonable period of time after written notice of such failure), or (B) loss resulting from business interruption or loss of income at the Premises. Without limiting the
generality of foregoing, in consideration of Landlord's willingness to permit Tenant to occupy the Initial Premises prior to the Subsequent Premises Commencement Date, Tenant expressly releases
Landlord and 


17





 


Landlord's Agents from responsibility for, waives its entire claim of recovery for and assumes all risk of damage to property or injury to persons in or about the Premises, the Building or the
Project, however caused, and loss resulting from business interruption or loss of income at the Premises resulting from or related to, directly or indirectly, the Seismic Work. Tenant acknowledges and
agrees that Landlord would not permit Tenant to occupy the Initial Premises during the performance of the Seismic Work but for the agreement by Tenant to the terms of the foregoing release, and that
by entering upon the Premises prior to the Subsequent Premises Commencement Date, Tenant expressly assumes all risk of damage to property or injury to persons resulting from or related to, directly or
indirectly, the Seismic Work. In furtherance of the foregoing terms contained in this Paragraph 17(a), Tenant expressly waives all rights under California Civil Code section 1542, which
provides that: 




"A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR." 




	Initials:	 	/s/
TENANT






    The
terms and provisions of this Paragraph 17 shall survive any termination of this Lease. 


    (b) No Impairment of Insurance. The foregoing indemnity shall not relieve any insurance carrier
of its obligations under any policies required to be carried by either party pursuant to this Lease, to the extent that such policies cover the peril or occurrence that results in the claim that is
subject to the foregoing indemnity. 


18. SUBROGATION  


    Landlord and Tenant hereby mutually waive any claim against the other and its Agents for any loss or damage to any of their property located on or about the
Premises, the Building or the Project that is caused by or results from perils covered by property insurance carried by the respective parties, to the extent of the proceeds of such insurance actually
received with respect to such loss or damage whether or not due to the negligence of the other party or its Agents. Because the foregoing waivers will preclude the assignment of any claim by way of
subrogation to an insurance company or any other person, each party now agrees to immediately give to its insurer written notice of the terms of these mutual waivers and shall have their insurance
policies endorsed to prevent the invalidation of the insurance coverage because of these waivers. Nothing in this Paragraph 18 shall relieve a party of liability to the other for failure to
carry insurance required by this Lease. 


19. SIGNS  


    Tenant shall not place or permit to be placed in, upon, or about the Premises, the Building or the Project any exterior lights, decorations, balloons, flags,
pennants, banners, advertisements or notices, or erect or install any signs, windows or door lettering, placards, decorations, or advertising media of any type which can be viewed from the exterior
the Premises without obtaining Landlord's prior written consent or without complying with Landlord's signage criteria, as the same may be modified by Landlord from time to time, and with all
applicable Laws, and will not conduct, or permit to be conducted, any sale by auction on the Premises or otherwise on the Project. Notwithstanding the foregoing, Tenant shall have the right to install
identification signage on the exterior of the Building, subject to compliance with Landlord's signage criteria and Landlord's approval of the size, design, style and location of such signage. Tenant
shall remove any sign, advertisement or notice placed on the Premises, the Building or the Project by Tenant upon the expiration of the Term or sooner termination of this Lease, and Tenant shall
repair any damage or injury to the Premises, the Building or the Project 


18





 


caused thereby, all at Tenant's expense. If any signs are not removed, or necessary repairs not made, Landlord shall have the right to remove the signs and repair any damage or injury to the Premises,
the Building or the Project at Tenant's sole cost and expense. 


20. FREE FROM LIENS  


    Tenant shall keep the Premises, the Building and the Project free from any liens arising out of any work performed, material furnished or obligations incurred
by or for Tenant. In the event that Tenant shall not, within twenty (20) days (or, if Landlord is then in the process of selling or financing the
Building or the Project, ten (10) days) following the imposition of any such lien, cause the lien to be released of record by payment or posting of a proper bond, Landlord shall have in
addition to all other remedies provided herein and by law the right but not the obligation to cause same to be released by such means as it shall deem proper, including payment of the claim giving
rise to such lien. All such sums paid by Landlord and all expenses incurred by it in connection therewith (including, without limitation, attorneys' fees) shall be payable to Landlord by Tenant upon
demand. Landlord shall have the right at all times to post and keep posted on the Premises any notices permitted or required by law or that Landlord shall deem proper for the protection of Landlord,
the Premises, the Building and the Project, from mechanics' and materialmen's liens. Tenant shall give to Landlord at least five (5) business days' prior written notice of commencement of any
repair or construction on the Premises. 


21. ENTRY BY LANDLORD  


    Tenant shall permit Landlord and Landlord's Agents to enter into and upon the Premises at all reasonable times, upon not less than twenty four
(24) hours prior written or telephonic notice (except in the case of an emergency, for which no notice shall be required), and subject to Tenant's reasonable security arrangements, for the
purpose of inspecting the same or showing the Premises to prospective purchasers, lenders or tenants or to alter (in accordance with the terms and provisions of this Lease), improve, maintain and
repair the Premises or the Building as required or permitted of Landlord under the terms hereof, or for any other business purpose, without any rebate of Rent and without any liability to Tenant for
any loss of occupation or quiet enjoyment of the Premises thereby occasioned (except for actual damages resulting from the sole active gross negligence or willful misconduct of Landlord); and Tenant
shall permit Landlord to post notices of non-responsibility and ordinary "for sale" or, during the last nine (9) months of the Term, "for lease," signs. No such entry shall be
construed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant from the Premises. Landlord may temporarily close entrances, doors, corridors, elevators or
other facilities without liability to Tenant by reason of such closure in the case of an emergency and when Landlord otherwise deems such closure necessary. 



22. DESTRUCTION AND DAMAGE  


    (a) If
the Premises are damaged by fire or other perils covered by extended coverage insurance, Landlord shall, at Landlord's option: 



     (i) In
the event of total destruction (which shall mean destruction or damage in excess of twenty-five percent (25%) of the full insurable value thereof) of
the Premises, elect either to commence promptly to repair and restore the Premises and prosecute the same diligently to completion, in which event this Lease shall remain in full force and effect; or
not to repair or restore the Premises, in which event this Lease shall terminate. Landlord shall give Tenant written notice of its intention within sixty (60) days after the date (the
"Casualty Discovery Date") Landlord obtains actual knowledge of such destruction.
If Landlord elects not to restore the Premises, this Lease shall be deemed to have terminated as of the date of such total destruction. 



19





 


    (ii) I n the event of a partial destruction (which shall mean destruction or damage to an extent not exceeding twenty-five percent (25%) of the full
insurable value thereof) of the Premises for which Landlord will receive insurance proceeds sufficient to cover the cost to repair and restore such partial destruction and, if the damage thereto is
such that the Premises may be substantially repaired or restored to its condition existing immediately prior to such damage or destruction within one hundred eighty (180) days from the Casualty
Discovery Date, Landlord shall commence and proceed diligently with the work of repair and restoration, in which event the Lease shall continue in full force and effect. If such repair and restoration
requires longer than one hundred eighty (180) days or if the insurance proceeds therefor (plus any amounts Tenant may elect or is obligated to contribute) are not sufficient to cover the cost
of such repair and restoration, Landlord may elect either to so repair and restore, in which event the Lease shall continue in full force and effect, or not to repair or restore, in which event the
Lease shall terminate. In either case, Landlord shall give written notice to Tenant of its intention within sixty (60) days after the Casualty Discovery Date. If Landlord elects not to restore
the Premises, this Lease shall be deemed to have terminated as of the date of such partial destruction. 


    (iii) Notwithstanding
anything to the contrary contained in this Paragraph, in the event of damage to the Premises occurring during the last twelve (12) months
of the Term, Landlord and Tenant shall each have the right to terminate this Lease by written notice of such election given to the other party within thirty (30) days after the Casualty
Discovery Date, provided, however, that Tenant shall have the right to terminate this Lease pursuant to this Paragraph 22(a)(iii) only if Tenant's use and occupancy of the Premises are
materially interfered with as a result of such damage. 




    (b) If
the Premises are damaged by any peril not covered by extended coverage insurance, and the cost to repair such damage exceeds any amount Tenant may agree to
contribute, Landlord may elect either to commence promptly to repair and restore the Premises and prosecute the same diligently to completion, in which event this Lease shall remain in full force and
effect; or not to repair or restore the Premises, in which event this Lease shall terminate. Landlord shall give Tenant written notice of its intention within sixty (60) days after the Casualty
Discovery Date. If Landlord elects not to restore the Premises, this Lease shall be deemed to have terminated as of the date on which Tenant surrenders possession of the Premises to Landlord, except
that if the damage to the Premises materially impairs Tenant's ability to continue its business operations in the Premises, then this Lease shall be deemed to have terminated as of the date such
damage occurred. 


    (c) Notwithstanding
anything to the contrary in this Paragraph 22, Landlord shall have the option to terminate this Lease, exercisable by notice to Tenant within
sixty (60) days after the Casualty Discovery Date in each of the following instances: 



     (i) If
more than twenty-five percent (25%) of the full insurable value of the Building or the Project is damaged or destroyed, regardless of whether or not
the Premises are destroyed. 


    (ii) If
the Building or the Projector any portion thereof is damaged or destroyed and the repair and restoration of such damage requires longer than one hundred eighty
(180) days from the Casualty Discovery Date. 


    (iii) If
the Building or the Project or any portion thereof is damaged or destroyed and the insurance proceeds therefor are not sufficient to cover the costs of repair
and restoration. 


    (iv) If
the Building or the Project or any portion thereof is damaged or destroyed during the last twelve (12) months of the Term. 




    (d) If
the Premises is damaged or destroyed to the extent that the Premises cannot be substantially repaired or restored by Landlord within two hundred seventy
(270) days after the Casualty Discovery Date, Tenant may terminate this Lease immediately upon notice thereof to Landlord, which 


20





 


notice shall be given, if at all, not later than fifteen (15) days after Landlord notifies Tenant of Landlord's estimate of the period of time required to repair such damage or destruction. 


    (e) In
the event of repair and restoration as herein provided, the monthly installments of Base Rent shall be abated proportionately in the ratio which Tenant's use of
the Premises is impaired during the period of such repair or restoration; provided, however, that Tenant shall not be entitled to such abatement to the extent that such damage or destruction resulted
from the acts or inaction of Tenant or Tenant's Agents. Except as expressly provided in the immediately preceding sentence with respect to abatement of Base Rent, Tenant shall have no claim against
Landlord for, and hereby releases Landlord and Landlord's Agents from responsibility for and waives its entire claim of recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any damage to or destruction of the Premises, the Building or the Project or the repair or restoration thereof, including, without limitation, any cost, loss or expense resulting from any
loss of use of the whole or any part of the Premises, the Building or the Project and/or any inconvenience or annoyance occasioned by such damage, repair or restoration. 


    (f)  Tenant
shall promptly repair and restore, at Tenant's expense, Tenant's Alterations which were not constructed by Landlord. 


    (g) Tenant
hereby waives the provisions of California Civil Code Section 1932(2) and Section 1933(4) which permit termination of a lease upon destruction
of the leased premises, and the provisions of any similar law now or hereinafter in effect, and the provisions of this Paragraph 22 shall govern exclusively in case of such destruction. 


23. CONDEMNATION  


    (a) If
twenty-five percent (25%) or more of either the Premises, the Building or the Project or the parking areas for the Building or the Project is taken
for any public or quasi-public purpose by any lawful governmental power or authority, by exercise of the right of appropriation, inverse condemnation, condemnation or eminent domain, or sold to
prevent such taking (each such event being referred to as a "Condemnation"), Landlord may, at its option, terminate this Lease as of the date title
vests in the condemning party. If twenty-five percent (25%) or more of the Premises is taken and if the Premises remaining after such Condemnation and any repairs by Landlord would be
untenantable for the conduct of Tenant's business operations, Tenant shall have the right to terminate this Lease as of the date title vests in the condemning party. If either party elects to
terminate this Lease as provided herein, such election shall be made by written notice to the other party given within thirty (30) days after the nature and extent of such Condemnation have
been finally determined. If neither Landlord nor Tenant elects to terminate this Lease to the extent permitted above, Landlord shall promptly proceed to restore the Premises, to the extent of any
Condemnation award received by Landlord, to substantially the same condition as existed prior to such Condemnation, allowing for the reasonable effects of such Condemnation, and a proportionate
abatement shall be made to the Base Rent corresponding to the time during which, and to the portion of the floor area of the Premises (adjusted for any increase thereto resulting from any
reconstruction) of which, Tenant is deprived on account of such Condemnation and restoration, as reasonably determined by Landlord. Except as expressly provided in the immediately preceding sentence
with respect to abatement of Base Rent, Tenant shall have no claim against Landlord for, and hereby releases Landlord and Landlord's Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a result of any Condemnation or the repair or restoration of the Premises, the Building or the Project or the parking areas for
the Building or the Project following such Condemnation, including, without limitation, any cost, loss or expense resulting from any loss of use of the whole or any part of the Premises, the Building,
the Project or the parking areas and/or any inconvenience or annoyance occasioned by such Condemnation, repair or restoration. The provisions of California Code of Civil Procedure
Section 1265.130, which allows either party to petition the Superior 


21





 


Court to terminate the Lease in the event of a partial taking of the Premises, the Building or the Project or the parking areas for the Building or the Project, and any other applicable law now or
hereafter enacted, are hereby waived by Tenant. 


    (b) Landlord
shall be entitled to any and all compensation, damages, income, rent, awards, or any interest therein whatsoever which may be paid or made in connection
with any Condemnation, and Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease or otherwise; provided, however, that Tenant shall be entitled to receive any
award separately allocated by the condemning authority to Tenant for Tenant's relocation expenses or the value of Tenant's Property (specifically excluding fixtures, Alterations and other components
of the Premises which under this Lease or by law are or at the expiration of the Term will become the property of Landlord), provided that such award does not reduce any award otherwise allocable or
payable to Landlord. 


24. ASSIGNMENT AND SUBLETTING  


    (a) Tenant
shall not voluntarily or by operation of law, (i) mortgage, pledge, hypothecate or encumber this Lease or any interest herein, (ii) assign or
transfer this Lease or any interest herein, sublease the Premises or any part thereof, or any right or privilege appurtenant thereto, or allow any other person (the employees and invitees of Tenant
excepted) to occupy or use the Premises, or any portion thereof, without first obtaining the written consent of Landlord, which consent shall not be unreasonably withheld; provided, however, that
(A) Tenant is not then in Default under this Lease nor is any event then occurring which with the giving of notice or the passage of time, or both, would constitute a Default hereunder, and
(B) the proposed transfer is not an assignment or a sublease under a previous assignment or an existing sublease. When Tenant requests Landlord's consent to such assignment or subletting, it
shall notify Landlord in writing of the name and address of the proposed assignee or subtenant and the nature and character of the business of the proposed assignee or subtenant and shall provide
(1) a fully completed Hazardous Materials Disclosure Certificate for such assignee or subtenant in the form of Exhibit D hereto, and (2) current and prior financial statements for
the proposed assignee or subtenant, which financial statements shall be audited to the extent available and shall in any event be prepared in accordance with generally accepted accounting principles.
Tenant shall also provide Landlord with a copy of the proposed sublease or assignment agreement, including all material terms and conditions thereof. Landlord shall have the option, to be exercised
within twenty (20) days of receipt of the foregoing, to (1) terminate this Lease as of the commencement date stated in the proposed sublease or assignment, (2) sublease or take an
assignment, as the case may be, from Tenant of the interest, or any portion thereof, in this Lease and/or the Premises that Tenant proposes to assign or sublease, on the same terms and conditions as
stated in the proposed sublet or assignment agreement, (3) consent to the proposed assignment or sublease, or (4) refuse its consent to the proposed assignment or sublease, provided that
such consent shall not be unreasonably withheld so long as Tenant is not then in Default under this Lease nor is any event then occurring which with the giving of notice or tile passage of time, or
both, would constitute a Default hereunder. In the event Landlord elects to terminate this Lease or recapture the Premises, Tenant may, if it so elects, by written notice to Landlord within ten
(10) days after receipt of Landlord's termination or recapture notice, revoke its request for Landlord's consent and, in such event, this Lease shall continue in full force and effect as if
Tenant had not requested Landlord's consent. In the event Landlord elects to terminate this Lease or sublease or take an assignment from Tenant of the interest, or portion thereof, in the Lease and/or
the Premises that Tenant proposes to assign or sublease as provided in the foregoing clauses (1) and (2), respectively, then Landlord shall have the additional right to negotiate directly with
Tenant's proposed assignee or subtenant and to enter into a direct lease or occupancy agreement with such party on such terms as shall be acceptable to Landlord in its sole and absolute discretion,
and Tenant hereby waives
any claims against Landlord related thereto, including, without limitation, any claims for any compensation or profit related to such lease or occupancy agreement. 


22





 


    (b) Without otherwise limiting the criteria upon which Landlord may withhold its consent, Landlord shall be entitled to consider all reasonable criteria including, but
not limited to, the following: (i) whether or not the proposed subtenant or assignee is engaged in a business which, and the use of the Premises will be in an manner which, is in keeping with
the then character and nature of all other tenancies in the Project; (ii) whether the use to be made of the Premises by the proposed subtenant or assignee will conflict with any
so-called "exclusive" use then in favor of any other tenant of the Building or the Project, and whether such use would be prohibited by any other portion of this Lease, including, but not
limited to, any rules and regulations then in effect, or under applicable Laws, and whether such use imposes a greater load upon the Premises and the Building and Project services then imposed by
Tenant; (iii) the business reputation of the proposed individuals who will be managing and operating the business operations of the assignee or subtenant, and the long-term
financial and competitive business prospects of the proposed assignee or subtenant; and (iv) the creditworthiness and financial stability of the proposed assignee or subtenant in light of the
responsibilities involved. In any event, Landlord may withhold its consent to any assignment or sublease, if (A) the actual use proposed to be conducted in the Premises or portion thereof
conflicts with the provisions of Paragraph 10(a) or (b) above or with any other lease which restricts the use to which any space in the Building or the Project may be put, or
(B) the proposed assignment or sublease requires Alterations to the Premises or portions thereof other than Alterations approved by Landlord in accordance with Paragraph 13 above. 


    (c) If
Landlord approves an assignment or subletting as herein provided, Tenant shall pay to Landlord, as Additional Rent, the difference, if any, between
(i) the Base Rent plus Additional Rent allocable to that part of the Premises affected by such assignment or sublease pursuant to the provisions of this Lease, and (ii) the rent and any
additional rent payable by the assignee or sublessee to Tenant, less reasonable and customary market-based leasing commissions and reasonable legal fees, if any, incurred by Tenant in connection with
such assignment or sublease, which commissions and fees shall, for purposes of the aforesaid calculation, be amortized on a straight-line basis over the term of such assignment or
sublease. The assignment or sublease agreement, as the case may be, after approval by Landlord, shall not be amended without Landlord's prior written consent, and shall contain a provision directing
the assignee or subtenant to pay the rent and other sums due thereunder directly to Landlord upon receiving written notice from Landlord that Tenant is in default under this Lease with respect to the
payment of Rent. In the event that, notwithstanding the giving of such notice, Tenant collects any rent or other sums from the assignee or subtenant, then Tenant shall hold such sums in trust for the
benefit of Landlord and shall immediately forward the same to Landlord. Landlord's collection of such rent and other sums shall not constitute an acceptance by Landlord of attornment by such assignee
or subtenant. A consent to one assignment, subletting, occupation or use shall not be deemed to be a consent to any other or subsequent assignment, subletting, occupation or use and consent to any
assignment or subletting shall in no way relieve Tenant of any liability under this Lease. Any assignment or subletting, or without Landlord's consent shall be void, and shall, at the option of
Landlord, constitute a Default under this Lease. 


23







 
    (d) Notwithstanding any assignment or subletting, Tenant and any guarantor or surety of Tenant's obligations under this Lease shall at all times remain fully
responsible and liable for the payment of the Rent and for compliance with all of Tenant's other obligations under this Lease (regardless of whether Landlord's approval has been obtained for any such
assignment or subletting). 



    (e) Tenant
shall pay Landlord's reasonable fees (including, without limitation, the fees of Landlord's counsel), actually incurred in connection with Landlord's review
and processing of documents regarding any proposed assignment or sublease. 


    (f)  Notwithstanding
anything in this Lease to the contrary, in the event Landlord consents to an assignment or subletting by Tenant in accordance with the terms of
this Paragraph 24, Tenant's assignee or subtenant shall have no right to further assign this Lease or any interest therein or thereunder or to further sublease all or any portion of the
Premises. In furtherance of the foregoing, Tenant acknowledges and agrees on behalf of itself and any assignee or subtenant claiming under it (and any such assignee or subtenant by accepting such
assignment or sublease shall be deemed to acknowledge and agree) that no sub-subleases or further assignments of this lease shall be permitted at any time, 


    (g) Tenant
acknowledges and agrees that the restrictions, conditions and limitations imposed by this Paragraph 24 on Tenant's ability to assign or transfer this
Lease or any interest herein, to sublet the Premises or any part thereof, to transfer or assign any right or privilege appurtenant to the Premises, or to allow any other person to occupy or use the
Premises or any portion thereof, are, for the purposes of California Civil Code Section 1951.4, as amended from time to time, and for all other purposes, reasonable at the time that the Lease
was entered into, and shall be deemed to be reasonable at the time that Tenant seeks to assign or transfer this Lease or any interest herein, to sublet the Premises or any part thereof, to transfer or
assign any right or privilege appurtenant to the Premises, or to allow any other person to occupy or use the Premises or any portion thereof. 


25. TENANT'S DEFAULT  


    The occurrence of any one of the following events shall constitute an event of default on the part of Tenant
("Default"): 


    (a) The
vacation or abandonment of the Premises by Tenant for a period of ten (10) consecutive days or any vacation or abandonment of the Premises by Tenant
which would cause any insurance policy to be invalidated or otherwise lapse, or the failure of Tenant to continuously operate Tenant's business in the
Premises, in each of the foregoing cases irrespective of whether or not Tenant is then in monetary default under this Lease. Notwithstanding the foregoing, in the event Tenant seeks to assign its
interest under this Lease or to sublease the Premises in accordance with Paragraph 24 above, Tenant shall have tile right to vacate the Premises and to cease operating its business therein for
a period of not exceeding ninety (90) days in the aggregate, provided that (i) throughout such period, Tenant diligently attempts to procure a suitable assignee or subtenant and to
complete an assignment or sublease transaction, (ii) Tenant takes all actions required by Landlord to secure and safeguard the Premises during such period, and (iii) Tenant reimburses
Landlord upon demand for any additional costs and expenses incurred by Landlord (including, without limitation, insurance expenses and costs of security) as a result of Tenant's vacation of the
Premises. Tenant agrees to notice and service of notice as provided for in this Lease and waives any right to any other or further notice or service of notice which Tenant may have under any statute
or law now or hereafter in effect; 


    (b) Failure
to pay any installment of Rent or any other monies due and payable hereunder, said failure continuing for a period of three (3) days after notice of
such default (which notice may be telephonic); provided, however, that Landlord shall only be required to give such notice one (1) time per calendar year and, thereafter, Tenant shall be in
Default hereunder if it fails to pay any installment of Rent or any other monies due and payable hereunder within three (3) days after the date the same is due; 


24





 


    (c) A general assignment by Tenant or any guarantor or surety of Tenant's obligations hereunder (collectively,
"Guarantor") for the benefit of creditors; 


    (d) The
filing of a voluntary petition in bankruptcy by Tenant or any Guarantor, the filing by Tenant or any Guarantor of a voluntary petition for an arrangement, the
filing by or against Tenant or any Guarantor of a petition, voluntary or involuntary, for reorganization, or the filing of an involuntary petition by the creditors of Tenant or any Guarantor, said
involuntary petition remaining undischarged for a period of sixty (60) days; 


    (e) Receivership,
attachment, or other judicial seizure of substantially all of Tenant's assets on the Premises, such attachment or other seizure remaining undismissed
or undischarged for a period of sixty (60) days after the levy thereof; 


    (f)  Death
or disability of Tenant or any Guarantor, if Tenant or such Guarantor is a natural person, or the failure by Tenant or any Guarantor to maintain its legal
existence, if Tenant or such Guarantor is a corporation, partnership, limited liability company, trust or other legal entity; 



    (g) Failure
of Tenant to execute and deliver to Landlord any estoppel certificate, subordination agreement, or lease amendment within the time periods and in the manner
required by Paragraphs 31, 32 or 43, and/or failure by Tenant to deliver to Landlord any financial statement within the time period and in the manner required by Paragraph 41; 


    (h) An
assignment or sublease of this Lease or the Premises by Tenant contrary to the provision of Paragraph 24, unless such assignment or sublease is expressly
conditioned upon Tenant having received Landlord's consent thereto; 


    (i)  Failure
of Tenant to restore the Security Deposit and/or the Letter of Credit to the amounts and within the time periods provided in Paragraphs 7 and 8 above; 



    (j)  Failure
in the performance of any of Tenant's covenants, agreements or obligations hereunder (except those failures specified as events of Default in any other
subparagraphs of this Paragraph 25, which shall be governed by such other Paragraphs), which failure continues for ten, (10) days after written notice thereof from Landlord to Tenant,
provided that, if Tenant has exercised reasonable diligence to cure such failure and such failure cannot be cured within such ten (10) day period despite reasonable diligence, Tenant shall not
be in default under this subparagraph so long as Tenant thereafter diligently and continuously prosecutes the cure to completion and actually completes such cure within thirty (30) days after
the giving of the aforesaid written notice; 


    (k) Chronic
delinquency by Tenant in the payment of Rent, or any other periodic payments required to be paid by Tenant under this Lease.
"Chronic delinquency" shall mean failure by Tenant to pay Rent, or any other payments required to be paid by Tenant under this Lease within three
(3) days after written notice thereof for any three (3) months (consecutive or nonconsecutive) during any period of twelve (12) months. In the event of a Chronic delinquency, in
addition to Landlord's other remedies for Default provided in this Lease, at Landlord's option, Landlord shall have the right to require that Rent be paid by Tenant quarterly, in advance; 



    (l)  Chronic
overuse by Tenant or Tenant's Agents of the number of undesignated parking spaces set forth in the Basic Lease Information.
"Chronic overuse" shall mean use by Tenant or Tenant's Agents of a number of parking spaces greater than the number of parking spaces set forth in the
Basic Lease Information more than three (3) times during the Term after written notice by Landlord; 


    (m) Any
insurance required to be maintained by Tenant pursuant to this Lease shall be canceled or terminated or shall expire or be reduced or materially changed, except
as permitted in this Lease; and 


25





 


    (n) Any failure by Tenant to discharge any lien or encumbrance placed on the Project or any part thereof in violation of this Lease within the applicable time period
provided in Paragraph 20 above. 


    Tenant
agrees that any notice given by Landlord pursuant to Paragraph 25(j), (k) or (l) above shall satisfy the requirements for notice under California Code of
Civil Procedure Section 1161, and Landlord shall not be required to give any additional notice in order to be entitled to commence an unlawful detainer proceeding. 


26. LANDLORD'S REMEDIES  


    (a) Termination. In the event of any Default by Tenant, then in addition to any other remedies available to Landlord at
law or in equity and under this Lease, Landlord shall have the immediate option to terminate this Lease and all rights of Tenant hereunder by giving written notice of such intention to terminate. In
the event that Landlord shall elect to so terminate this Lease then Landlord may recover from Tenant: 



     (i) the
worth at the time of award of any unpaid Rent and any other sums due and payable which have 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 and any other sums due and payable which would have been earned after termination until the
time of award exceeds the amount of such rental 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 and any other sums due and payable for the balance of the term of this Lease after the time
of award exceeds the amount of such rental less that Tenant proves could be 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 would be likely to result therefrom, including, without limitation: (A) any costs or expenses incurred by Landlord: (1) in retaking possession of the Premises;
(2) in maintaining, repairing, preserving, restoring, replacing, cleaning, altering, remodeling or rehabilitating the Premises or any affected portions of the Building or the Project, including
such actions undertaken in connection with the reletting or attempted reletting of the Premises to a new tenant or tenants; (3) for leasing commissions, advertising costs and other expenses of
reletting the Premises; or (4) in carrying the Premises, including taxes, insurance premiums, utilities and security precautions; (B) any unearned brokerage commissions paid in
connection with this
Lease; (C) reimbursement of any previously waived or abated Base Rent or Additional Rent or any free rent or reduced rental rate granted hereunder; and (D) any concession made or paid by
Landlord to the benefit of Tenant in consideration of this Lease, if any, or assumptions by Landlord of any of Tenant's previous lease obligations; plus 



    (v) such
reasonable attorneys' fees incurred by Landlord as a result of a Default, and costs in the event suit is filed by Landlord to enforce such remedy; and plus 


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




As
used in subparagraphs (i) and (ii) above, the "worth at the time of award" is computed by allowing interest at an annual rate equal to
twelve percent (12%) per annum or the maximum rate permitted by law, whichever is less. As used in subparagraph (iii) above, the "worth at the time of
award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award, plus one percent (1%). Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or under any other 


26





 


pertinent present or future Law, in the event Tenant is evicted or Landlord takes possession of the Premises by reason of any Default of Tenant hereunder. 



    (b) Continuation of Lease. In the event of any Default by Tenant, then in addition to any other
remedies available to Landlord at law or in equity and under this Lease, Landlord shall have the remedy described in California Civil Code Section 1951.4 (Landlord may continue this Lease in
effect after Tenant's Default and abandonment and recover Rent as it becomes due, provided that Tenant has the right to sublet or assign, subject only to reasonable limitations). In addition, Landlord
shall not be liable in any way whatsoever for its failure or refusal to relet the Premises. For purposes of this Paragraph 26(b), the following acts by Landlord will not constitute the
termination of Tenant's right to possession of the Premises: 



     (i) Acts
of maintenance or preservation or efforts to relet the Premises, including, but not limited to, alterations, remodeling, redecorating, repairs, replacements
and/or painting as Landlord shall consider advisable for the purpose of reletting the Premises or any part thereof, or 


    (ii) The
appointment of a receiver upon the initiative of Landlord to protect Landlord's interest under this Lease or in the Premises. 




    (c) Re-entry. In the event of any Default by Tenant, Landlord shall also have the
right, with or without terminating this Lease, in compliance with applicable law, to re-enter the Premises and remove all persons and property from the Premises; such property may be
removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant. 


    (d) Reletting. In the event of the abandonment of the Premises by Tenant or in the event that
Landlord shall elect to re-enter as provided in Paragraph 26(c) or shall take possession of the Premises pursuant to legal proceeding or pursuant to any notice provided by law, then
if Landlord does not elect to terminate this Lease as provided in Paragraph 26(a), Landlord may from time to time, without terminating this Lease, relet the Premises or any part thereof for
such term or terms and at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may deem advisable with the right to make alterations and repairs to the
Premises in Landlord's sole discretion. In the event that Landlord shall elect to so relet, then rentals received by Landlord from such reletting shall be applied in the following order: (i) to
reasonable attorneys' fees incurred by Landlord as a result of a Default and costs in the event suit is filed by Landlord to enforce such remedies; (ii) to the payment of any indebtedness other
than Rent due hereunder from Tenant to Landlord; (iii) to the payment of any costs of such reletting; (iv) to the payment of the costs of any alterations and repairs to the Premises;
(v) to the payment of Rent due and unpaid hereunder; and (vi) the residue, if any, shall be held by Landlord and applied in payment of future Rent and other sums payable by Tenant
hereunder as the same may become due and payable hereunder. Should that portion of such rentals received from such reletting during any month, which is applied to the payment of Rent hereunder, be
less than the Rent payable during the month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in such reletting or in making such alterations and repairs not covered by the rentals received from such reletting. 


    (e) Termination. No re-entry or taking of possession of the Premises by Landlord
pursuant to this Paragraph 26 shall be construed as an election to terminate this Lease unless a written notice of such intention is given to Tenant or unless the termination thereof is decreed
by a court of competent jurisdiction. Notwithstanding any reletting without termination by Landlord because of any Default by Tenant, Landlord may at any time after such reletting elect to terminate
this Lease for any such Default. 


    (f)  Cumulative Remedies. The remedies herein provided are not exclusive and Landlord shall have
any and all other remedies provided herein or by law or in equity. 


27





 


    (g) No Surrender. No act or conduct of Landlord, whether consisting of the acceptance of the
keys to the Premises, or otherwise, shall be deemed to be or constitute an acceptance of the surrender of the Premises by Tenant prior to the expiration of the Term, and such acceptance by Landlord of
surrender
by Tenant shall only flow from and must be evidenced by a written acknowledgment of acceptance of surrender signed by Landlord. The surrender of this Lease by Tenant, voluntarily or otherwise, shall
not work a merger unless Landlord elects in writing that such merger take place, but shall operate as an assignment to Landlord of any and all existing subleases, or Landlord may, at its option, elect
in writing to treat such surrender as a merger terminating Tenant's estate under this Lease, and thereupon Landlord may terminate any or all such subleases by notifying the sublessee of its election
so to do within five (5) days after such surrender. 


27. LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS  


    (a) Without
limiting the rights and remedies of Landlord contained in Paragraph 26 above, if Tenant shall be in Default in the performance of any of the terms,
provisions, covenants or conditions to be performed or complied with by Tenant pursuant to this Lease, then Landlord may at Landlord's option, without any obligation to do so, and without notice to
Tenant perform any such term, provision, covenant, or condition, or make any such payment and Landlord by reason of so doing shall not be liable or responsible for any loss or damage thereby sustained
by Tenant or anyone holding under or through Tenant or any of Tenant's Agents. 


    (b) Without
limiting the rights of Landlord under Paragraph 27(a) above, Landlord shall have the right at Landlord's option, without any obligation to do so, to
perform any of Tenant's covenants or obligations under this Lease (i) without notice to Tenant in the case of an emergency, as determined by Landlord in its sole and absolute judgment, or if
Landlord otherwise determines in its sole discretion that such performance is necessary or desirable for the preservation of the rights and interests or safety of other tenants of the Building or the
Project, and (ii) with five (5) days prior written or telephonic notice to Tenant if Landlord otherwise determines in its sole discretion that such performance is necessary or desirable
for the proper management and operation of the Building or the Project. 


    (c) If
Landlord performs any of Tenant's obligations hereunder in accordance with this Paragraph 27, the full amount of the cost and expense incurred or the
payment so made or the amount of the loss so sustained shall immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon demand, as Additional Rent, the full amount
thereof with interest thereon from the date of payment by Landlord at the lower of (i) ten percent (10%) per annum, or (ii) the highest rate permitted by applicable law. 


28. ATTORNEYS' FEES  


    (a) If
either party hereto fails to perform any of its obligations under this Lease or if any dispute arises between the parties hereto concerning the meaning or
interpretation of any provision of this Lease, then the defaulting party or the party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by the other
party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements. Any such
attorneys' fees and other expenses incurred by either party in enforcing a judgment in its favor under this Lease shall be recoverable separately from and in addition to any other amount included in
such judgment, and such attorneys' fees obligation is intended to be severable from the other provisions of this Lease and to survive and not be merged into any such judgment. 


    (b) Without
limiting the generality of Paragraph 28(a) above, if Landlord utilizes the services of an attorney for the purpose of collecting any Rent due and
unpaid by Tenant or in connection with any 


28





 


other breach of this Lease by Tenant, Tenant agrees to pay Landlord's actual attorneys' fees for such services, regardless of the fact that no legal action may be commenced filed by Landlord. 


29. TAXES  


    Tenant shall be liable for and shall pay, prior to delinquency, all taxes levied against Tenant's Property. If any Alteration installed by Tenant or any of
Tenant's Property is assessed and taxed with the Project or Building, Tenant shall pay such taxes to Landlord within ten (10) days after delivery to Tenant of a statement therefor. 



30. EFFECT OF CONVEYANCE  


    The term "Landlord" as used in this Lease means, from time to time, the then current owner of the Building or
the Project containing the Premises, so that, in the event of any sale of the Building or the Project and the transfer to the purchaser of any remaining portion of the Security Deposit and Letter of
Credit then held by Landlord hereunder, Landlord shall be and hereby is entirely freed and relieved of all covenants and obligations of Landlord hereunder, and it shall be deemed and construed,
without further agreement between the parties and the purchaser at any such sale, that the purchaser of the Building or the Project has assumed and agreed to carry out any and all covenants and
obligations of Landlord hereunder. 


31. TENANT'S ESTOPPEL CERTIFICATE  


    From time to time, upon written request of Landlord, Tenant shall execute, acknowledge and deliver to Landlord or its designee, a written certificate stating:
(a) the date this Lease was executed, the Commencement Date of the Term and the date the Term expires; (b) the date Tenant entered into occupancy of the Premises; (c) the amount
of Rent and the date to which such Rent has been paid; (d) that this Lease is in full force and effect and has not been assigned, modified, supplemented or amended in any way (or, if assigned,
modified, supplemented or amended, specifying the date and terms of any agreement so affecting this Lease); (e) that this Lease represents the entire agreement between the parties with respect
to Tenant's right to use and occupy the Premises (or specifying such other agreements, if any); (f) that all obligations under this Lease to be performed by Landlord as of the date of such
certificate have been satisfied (or specifying those as to which Tenant claims that Landlord has yet to perform); (g) that all required contributions by Landlord to Tenant on account of
Tenant's improvements have been received (or stating exceptions thereto); (h) that on such date there exist no defenses or offsets that Tenant has against the enforcement of this Lease by
Landlord (or stating exceptions thereto); (i) that no Rent or other sum payable by Tenant hereunder has been paid more than one (1) month in advance (or stating exceptions thereto);
(j) that security has been deposited with Landlord, stating the original amount thereof and any increases thereto; and (k) any other matters evidencing the status of this Lease that may
be required either by a lender making a loan to Landlord to be secured by a deed of trust covering the Building or the Project or by a purchaser of the Building or the Project. Any such certificate
delivered pursuant to this Paragraph 31 may be relied upon by a prospective purchaser of Landlord's interest or a mortgagee of Landlord's interest or assignee of any mortgage upon Landlord's
interest in the Premises. If Tenant shall fail to provide such certificate within fifteen (15) days of receipt by Tenant of a written request by Landlord as herein provided, such failure shall,
at Landlord's election, constitute a Default under this Lease, and Tenant shall be deemed to have given such certificate as provided above without modification and shall be deemed to have admitted the
accuracy of any information supplied by Landlord to a prospective purchaser or mortgagee. 


29





 

32. SUBORDINATION  


    Landlord shall have the right to cause this Lease to be and remain subject and subordinate to any and all mortgages, deeds of trust and ground leases, if any
("Encumbrances") that are now or may hereafter be executed covering the Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made thereunder and without regard to the time or character of such advances, together with interest thereon and subject to all
the terms and provisions thereof, provided only, that in the event of termination of any such ground lease or upon the foreclosure of any such mortgage or deed of trust, so long as Tenant is not in
default, the holder thereof ("Holder") shall agree to recognize Tenant's rights under this Lease and to not disturb Tenant's possession of the Premises
as long as Tenant shall pay the Rent and observe and perform all the provisions of this Lease to be observed and performed by Tenant. Within fifteen (15) days after Landlord's written request,
Tenant shall execute, acknowledge and deliver any and all reasonable documents required by Landlord or the Holder to effectuate such subordination. If Tenant fails to do so, such failure shall
constitute a Default by Tenant under this Lease. Notwithstanding
anything to the contrary set forth in this Paragraph 32, Tenant hereby attorns and agrees to attorn to any person or entity purchasing or otherwise acquiring the Premises at any sale or other
proceeding or pursuant to the exercise of any other rights, powers or remedies under such Encumbrance. 


33. ENVIRONMENTAL COVENANTS  


    (a) Prior
to executing this Lease, Tenant has completed, executed and delivered to Landlord a Hazardous Materials Disclosure Certificate
("Initial Disclosure Certificate"), a fully completed copy of which is attached hereto as Exhibit D and incorporated herein by this reference.
Tenant covenants, represents and warrants to Landlord that the information on the Initial Disclosure Certificate is true and correct and accurately describes the Hazardous Materials which will be
manufactured, treated, used or stored on or about the Premises by Tenant or Tenant's Agents. Tenant shall, on each anniversary of the Commencement Date and at such other times as Tenant desires to
manufacture, treat, use or store on or about the Premises new or additional Hazardous Materials which were not listed on the Initial Disclosure Certificate, complete, execute and deliver to Landlord
an updated Disclosure Certificate (each, an "Updated Disclosure Certificate") describing Tenant's then current and proposed future uses of Hazardous
Materials on or about the Premises, which Updated Disclosure Certificates shall be in the same format as that which is set forth in Exhibit D or
in such updated format as Landlord may require from time to time. Tenant shall deliver an Updated Disclosure Certificate to Landlord not less than thirty (30) days prior to the date Tenant
intends to commence the manufacture, treatment, use or storage of new or additional Hazardous Materials on or about the Premises, and Landlord shall have the right to approve or disapprove such new or
additional Hazardous Materials in its sole and absolute discretion. Tenant shall make no use of Hazardous Materials on or about the Premises except as described in the Initial Disclosure Certificate
or as otherwise approved by Landlord in writing in accordance with this Paragraph 33 (a). 


    (b) As
used in this Lease, the term "Hazardous Materials" shall mean and include any substance that is or contains:
(i) any "hazardous substance" as now or hereafter defined in § 101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended
("CERCLA") (42 U.S.C. § 9601 et seq.) or any regulations promulgated under CERCLA; (ii) any "hazardous waste" as now or hereafter
defined in the Resource Conservation and Recovery Act, as amended ("RCRA") (42 U.S.C. § 6901 et
seq.) or any regulations promulgated under RCRA; (iii) any substance now or hereafter regulated by the Toxic Substances Control Act, as amended
("TSCA") (15 U.S.C. § 2601 et seq.) or any regulations promulgated under TSCA;
(iv) petroleum, petroleum by-products, gasoline, diesel fuel, or other petroleum hydrocarbons; (v) asbestos and asbestos-containing material, in any form, whether friable or
non-friable; (vi) polychlorinated biphenyls; (vii) lead and lead-containing materials; or (viii) any additional substance, material or waste (A) the 


30





 


presence of which on or about the Premises (1) requires reporting, investigation or remediation under any Environmental Laws (as hereinafter defined), (2) causes or threatens to cause a
nuisance on the
Premises or any adjacent area or property or poses or threatens to pose a hazard to the health or safety of persons on the Premises or any adjacent area or property, or (3) which, if it
emanated or migrated from the Premises, could constitute a trespass, or (B) which is now or is hereafter classified or considered to be hazardous or toxic under any Environmental Laws. 


    (c) As
used in this Lease, the term "Environmental Laws" shall mean and include: (i) CERCLA, RCRA and TSCA; and
(ii) any other federal, state or local laws, ordinances, statutes, codes, rules, regulations, orders or decrees now or hereinafter in effect relating to (A) pollution, (B) the
protection or regulation of human health, natural resources or the environment, (C) the treatment, storage or disposal of Hazardous Materials, or (D) the emission, discharge, release or
threatened release of Hazardous Materials into the environment. 


    (d) Tenant
agrees that during its use and occupancy of the Premises it will: (i) not (A) permit Hazardous Materials to be present on or about the Premises
except in a manner and quantity necessary for the ordinary performance of Tenant's business or (B) release, discharge or dispose of any Hazardous Materials on, in, at, under, or emanating from,
the Premises, the Building or the Project; (ii) comply with all Environmental Laws relating to the Premises and the use of Hazardous Materials on or about the Premises and not engage in or
permit others to engage in any activity at the Premises in violation of any Environmental Laws; and (iii) immediately notify Landlord of (A) any inquiry, test, investigation or
enforcement proceeding by any governmental agency or authority against Tenant, Landlord or the Premises, Building or Project relating to any Hazardous Materials or under any Environmental Laws or
(B) the occurrence of any event or existence of any condition that would cause a breach of any of the covenants set forth in this Paragraph 33. 


    (e) If
Tenant's use of Hazardous Materials on or about the Premises results in a release, discharge or disposal of Hazardous Materials on, in, at, under, or emanating
from, the Premises, the Building or the Project, Tenant agrees to investigate, clean up, remove or remediate such Hazardous Materials in full compliance with: (i) the requirements of
(A) all Environmental Laws and (B) any governmental agency or authority responsible for the enforcement of any Environmental Laws; and (ii) any additional requirements of Landlord
that are reasonably necessary to protect the value of the Premises, the Building or the Project. 


    (f)  Upon
reasonable notice to Tenant, Landlord may at its sole expense (except as otherwise provided herein) inspect the Premises and surrounding areas for the purpose
of determining whether there exists on or about the Premises any Hazardous Material or other condition or activity that is in violation of the requirements of this Lease or of any Environmental Laws.
Such inspections may include, but are not limited to, entering the Premises or adjacent property with drill rigs or other machinery for the purpose of obtaining laboratory samples. Landlord shall not
be limited in the number of such inspections during the Term of this Lease, but shall use reasonable efforts to minimize any disruption to Tenant's business operations in the Premises. In the event
(i) such inspections reveal the presence of any such Hazardous Material or other condition or activity in violation of the requirements of this Lease or, to the extent such violation results
from the acts or actions of Tenant or Tenant's Agents, of any Environmental Laws, or (ii) Tenant or its Agents contribute or knowingly consent to the presence of any Hazardous Materials in, on,
under, through or about the Premises, the Building or the Project or exacerbate the condition of or the conditions caused by any Hazardous Materials in, on, under, through or about the Premises, the
Building or the Project, Tenant shall reimburse Landlord for the cost of
such inspections within ten (10) days of receipt of a written statement therefor. Tenant will supply to Landlord such historical and operational information regarding the Premises and
surrounding areas as may be reasonably requested to facilitate any such inspection and will make available for meetings appropriate personnel having knowledge of such matters. Tenant agrees to give
Landlord at least sixty (60) days' prior notice of its intention to vacate 


31





 


the Premises so that Landlord will have an opportunity to perform such an inspection prior to such vacation. The right granted to Landlord herein to perform inspections shall not create a duty on
Landlord's part to inspect the Premises, or liability on the part of Landlord for Tenant's use, storage, treatment or disposal of Hazardous Materials, it being understood that Tenant shall be solely
responsible for all liability in connection therewith. 


    (g) Landlord
shall have the right, but not the obligation, prior or subsequent to a Default, without in any way limiting Landlord's other rights and remedies under this
Lease, to enter upon the Premises, or to take such other actions as it deems necessary or advisable, to investigate, clean up, remove or remediate any Hazardous Materials or contamination by Hazardous
Materials present on, in, at, under, or emanating from, the Premises, the Building or the Project in violation of Tenant's obligations under this Lease or under any Environmental Laws. Notwithstanding
any other provision of this Lease, Landlord shall also have the right, at its election, in its own name or as Tenant's agent, to negotiate, defend, approve and appeal, at Tenant's expense, any action
taken or order issued by any governmental agency or authority with regard to any such Hazardous Materials or contamination by Hazardous Materials. All costs and expenses paid or incurred by Landlord
in the exercise of the rights set forth in this Paragraph 33 shall be payable by Tenant upon demand. 


    (h) Tenant
shall surrender the Premises to Landlord upon the expiration or earlier termination of this Lease free of debris, waste or Hazardous Materials placed on,
about or near the Premises by Tenant or Tenant's Agents, and in a condition which complies with all Environmental Laws and any additional requirements of Landlord that are reasonably necessary to
protect the value of the Premises, the Building or the Project, including, without limitation, the obtaining of any closure permits or other governmental permits or approvals related to Tenant's use
of Hazardous Materials in or about the Premises. Tenant's obligations and liabilities pursuant to the provisions of this Paragraph 33 shall survive the expiration or earlier termination of this
Lease. If it is determined by Landlord that the condition of all or any portion of the Premises, the Building, and/or the Project is not in compliance with the provisions of this Lease with respect to
Hazardous Materials, including, without limitation, all Environmental Laws, at the expiration or earlier termination of this Lease, then at Landlord's sole option, Landlord may require Tenant to hold
over possession of the Premises until Tenant can surrender the Premises to Landlord in the condition in which the Premises existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for normal wear and tear, including, without limitation, the conduct or performance of any closures as required by any Environmental Laws. For purposes hereof, the term
"normal wear and tear" shall not include any deterioration in the condition or diminution of the value of any portion of the Premises, the Building,
and/or the Project in any manner whatsoever related to directly, or indirectly, Hazardous Materials. Any such holdover by Tenant will be with Landlord's consent, will not be terminable by Tenant in
any event or circumstance and will otherwise be subject to the provisions of Paragraph 36 of this Lease. 



    (i)  Tenant
agrees to indemnify and hold harmless Landlord from and against any and all claims, losses (including, without limitation, loss in value of the Premises,
the Building or the Project, liabilities and expenses (including attorneys' fees)) sustained by Landlord attributable to (i) any Hazardous Materials placed on or about the Premises, the
Building or the Project by Tenant or Tenant's Agents, or (ii) Tenant's breach of any provision of this Paragraph 33. 


    (j)  Notwithstanding
anything in this Paragraph 33 to the contrary, Tenant shall not be responsible for the clean up or remediation of, and shall not be required
to indemnify Landlord against any costs or liabilities attributable to, any Hazardous Materials placed on or about the Premises (i) by third parties not related to Tenant or Tenant's Agents,
including, without limitation, any Hazardous Materials existing on the Premises prior to the Commencement Date, or (ii) by Landlord at anytime, except in either case to the extent that Tenant
or Tenant's Agents have contributed to or exacerbated the presence of such Hazardous Materials or have failed to take reasonable actions to prevent such Hazardous Material from becoming placed on or
about the Premises. 


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    (k) The provisions of this Paragraph 33 shall survive the expiration or earlier termination of this Lease. 


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   34. NOTICES  


    All notices and demands which are required or may be permitted to be given to either party by the other hereunder shall be in writing and shall be sent by
United States mail, postage prepaid, certified, or by personal delivery or overnight courier, addressed to the addressee at Tenant's Address or Landlord's Address as specified in the Basic Lease
Information, or to such other place as either party may from time to time designate in a notice to the other party given as provided herein. Copies of all notices and demands given to Landlord shall
additionally be sent to Landlord's property manager at the address specified in the Basic Lease Information or at such other address as Landlord may specify in writing from time to time. Notice shall
be deemed given upon actual receipt (or attempted delivery if delivery is refused), if personally delivered, or one (1) business day following deposit with a reputable overnight courier that
provides a receipt, or on the third (3rd) day following deposit in the United States mail in the manner described above. 



35. WAIVER  


    The waiver of any breach of any term, covenant or condition of this Lease shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of Rent by Landlord shall not be deemed to be a waiver of any preceding breach by
Tenant, other than the failure of Tenant to pay the particular rental so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such Rent. No delay or
omission in the exercise of any right or remedy of Landlord in regard to any Default by Tenant shall impair such a right or remedy or be construed as a waiver. Any waiver by Landlord of any Default
must be in writing and shall not be a waiver of any other Default concerning the same or any other provisions of this Lease. 


36. HOLDING OVER  


    (a) Any
holding over after the expiration of the Term, without the express written consent of Landlord, shall constitute a Default and, without limiting Landlord's
remedies provided in this Lease, such holding over shall be construed to be a tenancy at sufferance, at a rental rate equal to the greater of one hundred fifty percent (150%) of (i) the fair
market rental value for the Premises as determined by Landlord or (ii) the Base Rent last due in this Lease, plus Additional Rent, and shall otherwise be on the terms and conditions herein
specified, so far as applicable; provided, however, in no event shall any
renewal or expansion option or other similar right or option contained in this Lease be deemed applicable to any such tenancy at sufferance. Subject to Paragraph 36(b) below, if the Premises
are not surrendered at the end of the Term or sooner termination of this Lease, and in accordance with the provisions of Paragraphs 12 and 33(h), Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all loss or liability resulting from delay by Tenant in so surrendering the Premises including, without limitation any loss or liability resulting from any claim
against Landlord made by any succeeding tenant or prospective tenant founded on or resulting from such delay and losses to Landlord due to lost opportunities to lease any portion of the Premises to
any such succeeding tenant or prospective tenant, together with, in each case, actual attorneys' fees and costs. 


    (b) Notwithstanding
the terms of Paragraph 36(a) above, in the event Tenant desires to remain in possession of the Premises after the Expiration Date, Tenant
shall provide Landlord with not less than thirty (30) days written notice prior to the Expiration Date requesting the right to so hold-over possession for a specified period of
time. In the event Landlord consents in writing to such hold-over, then Tenant shall pay to Landlord the hold-over rental rate set forth in Paragraph 36(a), but Tenant
shall have no liability to Landlord under the indemnity set forth in the last sentence of Paragraph 36(a). If Landlord does not so consent to such hold-over, or if Landlord permits
Tenant to hold-over for a specified period and if Tenant has not vacated the Premises by the end of the period so specified by Landlord, then Tenant shall remain fully liable to Landlord
under the aforesaid indemnity. 


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37. SUCCESSORS AND ASSIGNS  


    The terms, covenants and conditions of this Lease shall, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto. If Tenant shall consist of more than one entity or person, the obligations of Tenant under this Lease shall be joint and several. 


38. TIME  


    Time is of the essence of this Lease and each and every term, condition and provision herein. 


39. BROKERS  


    Landlord and Tenant each represents and warrants to the other that neither it nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate broker except the Broker(s) specified in
the Basic Lease Information in the negotiating or making of this Lease, and each party agrees to indemnify and hold harmless the other from any claim or claims, and costs and expenses, including
attorneys' fees, incurred by the indemnified party in conjunction with any such claim or claims of any other broker or brokers to a commission in connection with this Lease as a result of the actions
of the indemnifying party. 


40. LIMITATION OF LIABILITY  


    Tenant agrees that, in the event of any default or breach by Landlord with respect to any of the terms of the Lease to be observed and performed by Landlord:
(a) Tenant shall look solely to the then-current landlord's interest in the Building for the satisfaction of Tenant's remedies for the collection of a judgment (or other judicial
process) requiring the payment of money by Landlord; (b) no other property or assets of Landlord, its partners, shareholders, officers, directors, employees, investment advisors, or any
successor in interest of any of them (collectively, the "Landlord Parties") shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies; (c) no personal liability shall at any time be asserted or enforceable against the Landlord Parties; and (d) no judgment will be taken against the
Landlord Parties. The provisions of this section shall apply only to the Landlord and the parties herein described, and shall not be for the benefit of any insurer nor any other third party. 



41. FINANCIAL STATEMENTS  


    Within fifteen (15) days after Landlord's request, Tenant shall deliver to Landlord the then current financial statements of Tenant (including interim
periods following the end of the last fiscal year for which annual statements are available), prepared or compiled by a certified public accountant, including a balance sheet and profit and loss
statement for the most recent prior year, all prepared in accordance with generally accepted accounting principles consistently applied. Landlord shall not request Tenant's financial statements more
than one (1) time per calendar year, except to the extent that Landlord is involved in a sale or financing of the Project. 



42. RULES AND REGULATIONS  


    Tenant agrees to comply with such reasonable rules and regulations as Landlord may adopt from time to time for the orderly and proper operation of the Building
and the Project. Such rules may include but shall not be limited to the following: (a) restriction of employee parking to a limited, designated area or areas; and (b) regulation of the
removal, storage and disposal of Tenant's refuse and other rubbish at the sole cost and expense of Tenant. The then current rules and regulations shall be binding upon Tenant upon delivery of a copy
of them to Tenant. Landlord shall not be responsible to 


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Tenant for the failure of any other person to observe and abide by any of said rules and regulations. Landlord's current rules and regulations are attached to this Lease as Exhibit C. 


43. MORTGAGEE PROTECTION  


    (a) Modifications for Lender. If, in connection with obtaining financing for the Project or any
portion thereof, Landlord's lender shall request reasonable modifications to this Lease as a condition to such financing, Tenant shall not unreasonably withhold, delay or defer its consent to such
modifications, provided that such modifications do not materially adversely affect Tenant's rights or increase Tenant's obligations under this Lease. 


    (b) Rights to Cure. Tenant agrees to give to any trust deed or mortgage holder
("Holder"), by registered mail, at the same time as it is given to Landlord, a copy of any notice of default given to Landlord, provided that, prior to
such notice, Tenant has been notified, in writing (by way of notice of assignment of rents and leases, or otherwise) of the address of such Holder. Tenant further agrees that if Landlord shall have
failed to cure such default within the time provided for in this Lease, then the Holder shall have an additional twenty (20) days after expiration of such period, or after receipt of such
notice from Tenant (if such notice to the Holder is required by this Paragraph 43(b)), whichever shall last occur within which to cure such default or if such default cannot be cured within
that time, then such additional time as may be necessary if within such twenty (20) days, any Holder has commenced and is diligently pursuing the remedies necessary to cure such default
(including, but not limited to, commencement of foreclosure proceedings, if necessary to effect such cure), in which event this Lease shall not be terminated. 



44. ENTIRE AGREEMENT  


    This Lease, including, the Exhibits and any Addenda attached hereto, which are hereby incorporated herein by this reference, contains the entire agreement of
the parties hereto, and no representations, inducements, promises or agreements, oral or otherwise, between the parties, not embodied herein or therein, shall be of any force and effect. 


45. INTEREST  


    Any installment of Rent and any other sum due from Tenant under this Lease which is not received by Landlord within ten (10) days from when the same is
due shall bear interest from the date such payment was originally due under this Lease until paid at an annual rate equal to the maximum rate of interest permitted by law. Payment of such interest
shall not excuse or cure any Default by Tenant. In addition, Tenant shall pay all costs and attorneys' fees incurred by Landlord in collection of such amounts. 


46. CONSTRUCTION  


    This Lease shall be construed and interpreted in accordance with the laws of the State of California. The parties acknowledge and agree that no rule of
construction to the effect that any ambiguities are to be resolved against the drafting party shall be employed in the interpretation of this Lease, including the Exhibits and any Addenda attached
hereto. All captions in this Lease are for reference only and shall not be used in the interpretation of this Lease. Whenever required by the context of this Lease, the singular shall include the
plural, the masculine shall include the feminine, and vice versa. If any provision of this Lease shall be determined to be illegal or unenforceable, such determination shall not affect any other
provision of this Lease and all such other provisions shall remain in full force and effect. 


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47. REPRESENTATIONS AND WARRANTIES OF TENANT  



    Tenant hereby makes the following representations and warranties, each of which is material and being relied upon by Landlord, is true in all respects as of
the date of this Lease, and shall survive the expiration or termination of the Lease. 


    (a) If
Tenant is an entity, Tenant is duly organized, validly existing and in good standing under the laws of the state of its organization and the persons executing
this Lease on behalf of Tenant have the full right and authority to execute this Lease on behalf of Tenant and to bind Tenant without the consent or approval of any other person or entity. Tenant has
full power, capacity, authority and legal right to execute and deliver this Lease and to perform all of its obligations hereunder. This Lease is a legal, valid and binding obligation of Tenant,
enforceable in accordance with its terms. 


    (b) Tenant
has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the f ling of
an involuntary petition by any creditors, (iii) suffered the appointment of a receiver to take possession of all or substantially all of its assets, (iv) suffered the attachment or other
judicial seizure of all or substantially all of its assets, (v) admitted in writing its
inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally. 



48. SECURITY  


    (a) Tenant
acknowledges and agrees that, while Landlord may engage security personnel to patrol the Building or the Project, Landlord is not providing any security
services with respect to the Premises, the Building or the Project and that Landlord shall not be liable to Tenant for, and Tenant waives any claim against Landlord with respect to, any loss by theft
or any other damage suffered or incurred by Tenant in connection with any unauthorized entry into the Premises or any other breach of security with respect to the Premises, the Building, or the
Project. 


    (b) Tenant
hereby agrees to the exercise by Landlord and Landlord's Agents, within their sole discretion, of such security measures as, but not limited to, the
evacuation of the Premises, the Building or the Project for cause, suspected cause or for drill purposes, the denial of any access to the Premises, the Building or the Project and other similarly
related actions that it deems necessary to prevent any threat of property damage or bodily injury. The exercise of such security measures by Landlord and Landlord's Agents, and the resulting
interruption of service and cessation of Tenant's business, if any, shall not be deemed an eviction or disturbance of Tenant's use and possession of the Premises, or any part thereof, or render
Landlord or Landlord's Agents liable to Tenant for any resulting damages or relieve Tenant from Tenant's obligations under this Lease. 



49. JURY TRIAL WAIVER  


    Tenant hereby waives any right to trial by jury with respect to any action or proceeding (a) brought by Landlord, Tenant or any other party, relating to
(i) this Lease and/or any understandings or prior dealings between the parties hereto, or (ii) the Premises, the Building or the Project or any part thereof, or (b) to which
Landlord is a party. Tenant hereby agrees that this Lease constitutes a written consent to waiver of trial by jury pursuant to the provisions of California Code of Civil Procedure Section 631,
and Tenant does hereby constitute and appoint Landlord its true and lawful attorney-in-fact, which appointment is coupled with an interest, and Tenant does hereby authorize and
empower Landlord, in the name, place and stead of Tenant, to file this Lease with the clerk or judge of any court of competent jurisdiction as a statutory written consent to waiver of trial by jury. 


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    Landlord and Tenant have executed and delivered this Lease as of the Lease Date specified in the Basic Lease Information. 



	 	 	LANDLORD:
	

 	
 	

HARBOR INVESTMENT PARTNERS,

a California general partnership
	

 	
 	

By:	
 	

UBS Brinson Realty Investors LLC

Its Investment Advisor and Agent
	

 	
 	

By:	
 	

/s/
 Cynthia Stevenin

Vice President
	

 	
 	

TENANT:
	

 	
 	

X.COM,

a Delaware corporation
	

 	
 	

By:	
 	

/s/

	 	 	Name:	 	William Harris

	 	 	Title:	 	President





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