**Exhibit 10.32**

 

 

 

**OFFICE LEASE**

** **

**By And Between**

** **

**MARRIOTT PLAZA ASSOCIATES L.P.,**

**A CALIFORNIA LIMITED PARTNERSHIP**

**(“LANDLORD”)**

** **

** **

**And**

** **

** **

**COMMERCEBID.Com**

**A DELAWARE CORPORATION**

**(“TENANT”)**

** **

**2901 TASMAN DRIVE, SUITE 211**

**SANTA CLARA, CALIFORNIA 95054**

 

 

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**OFFICE LEASE**

 

**BASIC LEASE INFORMATION**

 
| Date:                                       |   | August    ,  1999                                                                                                                                                                                                                     |
|---------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                        |   |                                                                                                                                                                                                                                                      |
| Landlord:                                   |   | Marriott  Plaza Associates L.P., a California limited partnership                                                                                                                                                                                         |
|                                        |   |                                                                                                                                                                                                                                                      |
| Tenant:                                     |   | COMMERCEBID.Com,  a Delaware Corporation                                                                                                                                                                                                                  |
|                                        |   |                                                                                                                                                                                                                                                      |
| Premises:                                   |   | Suite 211,  located on the second floor of the building located at 2901 Tasman Drive,  Santa Clara, California.                                                                                                                                           |
|                                        |   |                                                                                                                                                                                                                                                      |
| Base Year:                                  |   | 1999                                                                                                                                                                                                                                                      |
|                                        |   |                                                                                                                                                                                                                                                      |
| Rentable  Area of Premises:                 |   | 10,029  square feet                                                                                                                                                                                                                                       |
|                                        |   |                                                                                                                                                                                                                                                      |
| Tenant’s  Percentage Share:            |   | 10.02%                                                                                                                                                                                                                                                    |
|                                        |   |                                                                                                                                                                                                                                                      |
| Term:                                       |   | Five (5)  years, beginning on the Term Commencement Date and expiring on the Term  Expiration Date unless properly extended or renewed pursuant to any right  granted in the Lease or any Addendum to the Lease.                                          |
|                                        |   |                                                                                                                                                                                                                                                      |
| Term  Commencement Date:                    |   | October 1,  1999, or as determined in accordance with Exhibit F.                                                                                                                                                                                          |
|                                        |   |                                                                                                                                                                                                                                                      |
| Term  Expiration Date:                      |   | September  30, 2004, or as determined in accordance with Exhibit F.                                                                                                                                                                                       |
|                                        |   |                                                                                                                                                                                                                                                      |
| Base Rent:                                  |   | $25,072.50/per  month, months 1-12  $26,075.40/per month, months 13-24  $27,078.30/per month, months 25-36  $28,081.40/per month, months 37-48  $29,084.10/per month, months 49-60                                                                        |
|                                        |   |                                                                                                                                                                                                                                                      |
| Security  Deposit:                          |   | $87,252.30                                                                                                                                                                                                                                                |
|                                        |   |                                                                                                                                                                                                                                                      |
| Tenant’s  Required Liability Coverage: |   | $2,000,000.00                                                                                                                                                                                                                                             |
|                                        |   |                                                                                                                                                                                                                                                      |
| Tenant’s  Address for Notices:         |   | 2901 Tasman  Drive, Suite 211 Santa Clara, CA 95054                                                                                                                                                                                                       |
|                                        |   |                                                                                                                                                                                                                                                      |
| Landlord’s  Address for Notices:       |   | c/o Menlo  Equities LLC 525 University Avenue, Suite 100 Palo Alto, California 94301                                                                                                                                                                      |
|                                        |   |                                                                                                                                                                                                                                                      |
| with a copy  to:                            |   | Menlo  Equities Management Company LLC 2901 Tasman Drive, Suite 220 Santa Clara,  California 95054                                                                                                                                                        |
|                                        |   |                                                                                                                                                                                                                                                      |
| Tenant’s/Procuring  Broker:            |   | Cabot  Templeton, Bristol Commercial Real Estate                                                                                                                                                                                                          |
|                                        |   |                                                                                                                                                                                                                                                      |
| Parking:                                    |   | Thirty-two  (32) non-exclusive spaces onsite                                                                                                                                                                                                              |
|                                        |   |                                                                                                                                                                                                                                                      |
| Exhibits and  Addenda:                      |   | Exhibit A —  Legal Description of the Property  Exhibit B — Floor Plan of Suite  Exhibit C — Rules and Regulations  Exhibit D —Tenant Improvements  Exhibit E — Form of Estoppel  Exhibit F — Commencement Date Certificate |

 

 

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Each reference in the Lease toparticular Basic Lease Information shall Incorporate the applicable Basic LeaseInformation.  In the event of anyconflict between any Basic Lease Information and the Lease, the latter shallcontrol.

 

Each reference in the Lease toparticular Basic Lease Information shall Incorporate the applicable Basic LeaseInformation.  In the event of anyconflict between any Basic Lease Information and the Lease, the latter shallcontrol.

 

**LANDLORD:**

 

**MARRIOTTPLAZA ASSOCIATES L.P.,**

a California limitedpartnership

 
| By:    | Menlo  Equities Associates IV LLC, a California Limited Liability Company, |                                                         |
|--------|----------------------------------------------------------------------------|--------------------------------------------------------------|
|   | Its General  Partner                                                       |                                                         |
|   |                                                                       |                                                         |   |
|   | By:                                                                        | Menlo  Equities LLC, a California Limited Liability Company, |   |
|   |                                                                       | Its Manager                                                  |   |
|   |                                                                       |                                                         |   |
|   |                                                                       |                                                         |   |   |
|   |                                                                       | By:                                                          | [ILLEGIBLE] |   |
|   |                                                                       | Its:                                                         |    Member |   |
|   |                                                                       |                                                         |   |   |
|   |                                                                       | Date:                                                        | 8/30/99 |   |
|   |                                                                       |                                                         |   |   |
|   |                                                                       |                                                         |   |   |
|        |                                                                            |                                                              |  |  |  |

 

**TENANT:**

 

**COMMERCEBID.Com,**

a Delaware corporation

 
| Signature: |  /s/ NAOMI PETRUSHKA |
|------------|---------------------------|
| Name:      | Naomi  Petrushka          |
| Its:       | CFO                       |
|       |                      |
| Signature: |  /s/ LIRON PETRUSHKA |
| Name:      | Liron  Petrushka          |
| Its:       | CEO                       |
|       |                      |
| Date:      | 8/27/99                   |

 

 

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**OFFICE LEASE**

 

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

 

**WITNESSETH**

 

                Landlord hereby leases to Tenant, and Tenanthereby leases from Landlord, the Premises described in Paragraph 1(b) below forthe term and subject to the terms, covenants, agreements and conditionshereinafter set forth, to each and all of which Landlord and Tenant herebymutually agree.

 

**                1.             DEFINITIONS.**

 

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

 

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

 

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

 

                                (c)           Theterm “Base Year” shall mean the calendar year specified in the Basic LeaseInformation as the Base Year.

 

                                (d)           Theterm “operating Expenses” shall mean:

 

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

 

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

 

                                                (iii)          Ifless than 95% of the total rentable area of the Building is occupied during theBase Year or any calendar year during the term of this Lease, then OperatingExpenses shall be adjusted to equal Landlord’s reasonable estimate of OperatingExpenses had such percentage of the total rentable area of the Building beenoccupied.

 

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

 

                                (f)            Theterm “Property Taxes” shall mean (i) all taxes, assessments, levies and othercharges of any kind or nature whatsoever, general and special, foreseen andunforeseen (including all instruments of principal and interest required to payany general or special assessments for public improvements and any increasesresulting from reassessments caused by any change in ownership or newconstruction), now or hereafter imposed by any governmental orquasi-governmental authority or special district having the direct or indirectpower to tax or levy assessments, which are levied or assessed for whateverreason against the Property or any portion thereof, or Landlord’s interestherein, or the fixtures, equipment and other property of Landlord that is anintegral part of the Property and located thereon, or Landlord’s business ofowning, leasing or managing the Property or the gross receipts, income orrentals from the Property, (ii) all charges, levied or fees imposed by any governmentalauthority against Landlord by reason of or based upon the use of or number ofparking spaces within the Property, the amount

 

 

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

 

                                (g)           Theterm “Base Property Taxes” shall mean the amount of Property Taxes paid oraccruing during the Base Year.

 

                                (h)           Theterm “Rentable Area” shall mean the net rentable area specified in the BasicLease Information.

 

                                (i)            Theterm “Common Areas” shall mean all areas in the Building and the Property (asdefined herein) not reserved for the exclusive use of Landlord, Tenant or anyother tenant, including without limitation, plazas, walkways, private roadways,loading docks, parking areas, landscaped areas, and the areas devoted tocorridors, fire vestibules, stairways, elevator foyers, lobbies, electric andtelephone closets, rest rooms, mechanical rooms and other similar facilitiesfor the benefit of all tenants (or invitees) or servicing the Buildings as awhole. Landlord reserves the right to make changes to the Common Area as itdeems necessary, provided Landlord shall not reduce the number of parkingspaces provided to Tenant pursuant to this Lease, Landlord reserves the rightto grant easements and access rights to others for use of the Common Areas andshall not be liable to Tenant for any diminution in Tenant’s right to use theCommon Areas as a result.

 

                                (j)            Theterm “Tenant’s Percentage Share” shall mean the percentage figure specified inthe Basic Lease Information. Landlord and Tenant acknowledge that Tenant’spercentage share has been obtained by dividing the Rentable Area of thePremises, as specified in the Basic Lease Information, by the total RentableArea of the Building, which Landlord and Tenant agree is 100,114 square feet,and multiplying such quotient by 100. In the event the Rentable Area of thePremises is increased or decreased, Tenant’s Percentage Share shall beappropriately adjusted, and as to the calendar year in which such changeoccurs, for the purposes of Paragraph 3 below Tenant’s Percentage Share shallbe determined on the basis of the number of days during such calendar year ateach such Percentage Share.

 

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

 

                                (j)            Theterm “Law” shall mean any judicial decisions and any statute, constitution,ordinance, resolution, regulation, rule, administrative order, or otherrequirements of any municipal, county, state, federal, or other governmentalagency or authority having jurisdiction over the parties to this Lease, thePremises, the Building or the Property, or any of them, in effect either at theTerm Commencement Date or at any time during the Lease Term, including, withoutlimitation, any regulation, order, or policy of any quasi-official entity orbody (e.g. a board of fire examiners or a public utility or special district).

 

**                2.             TERM.**

 

                                The term of this Lease shall commence and, unlesssooner terminated as hereinafter provided, shall end on the dates respectivelyspecified in the Basic Lease Information. If Landlord, for any reasonwhatsoever beyond Landlord’s reasonable control, cannot deliver possession ofthe Premises to Tenant at the commencement of the term, this Lease shall not bevoid or voidable, nor shall Landlord be liable to Tenant for any loss or damageresulting therefrom, but in that event, rental shall be waived for the periodbetween the commencement of the term and the time when Landlord can deliverpossession. In the event Tenant occupies any part of the Premises prior to theTerm Commencement Date, Tenant shall commence paying Base Rent as of such datefor the portion of the Premises occupied.

 

**                3.             RENTAL.**

 

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

 

 

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                                (b)           Rentalshall be paid to Landlord on or before the first day of the term hereof and onor before the first day of each and every successive calendar month thereafterduring the term hereof. In the event the term of this Lease commences on a dayother than the first day of a calendar month or ends on a day other than thelast day of a calendar month, the monthly rental for the first and lastfractional months of the term hereof shall be appropriately prorated.

 

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

 

                                (d)           Tenanthereby acknowledges that late payment by Tenant to Landlord of rent and othersums due hereunder will cause Landlord to incur costs not contemplated by thisLease, the exact amount of which will be difficult to ascertain. Such costsinclude, but are not limited to, processing and accounting charges, and latecharges, which may be imposed on Landlord by the terms of any trust deedcovering the Premises. Accordingly, if any installment of rent or any othersums due from Tenant shall not be received by Landlord when due or in the timeperiod provided herein, Tenant shall pay to Landlord a late charge equal to 5%of such overdue amount. The parties hereby agree that such late chargerepresents a fair and reasonable estimate of the costs. Landlord will incur byreason of late payment by Tenant. Acceptance of such late charge by Landlordshall in no event constitute a waiver to Tenant’s default with respect to suchoverdue amount, nor prevent Landlord from exercising any of the other rightsand remedies granted hereunder.

 

                                (e)           Anyamount due to Landlord, if not paid when due, shall bear interest from the datedue until paid at the lower of (i) the rate of the Prime Rate plus 2% perannum, and (ii) the highest rate legally permitted; provided that interestshall not be payable on late charges incurred by Tenant nor on any amounts uponwhich late charges are paid by Tenant to the extent such interest would causethe total interest to be in excess of the then maximum rate of interest notprohibited or made usurious by law until paid. Payment of interest shall notexcuse or cure any default hereunder by Tenant.

 

                                (f)            Allpayments due from Tenant to Landlord shall be paid to Landlord, withoutdeduction or offset, in lawful money of the United States of America atLandlord’s address for notices hereunder, or to such other person or at suchother place as Landlord may from time to time designate by notice to Tenant.

 

**                4.             ESCALATIONRENT PAYMENTS.**

 

                                Escalation Rent shall be paid monthly on anestimated basis, with subsequent annual reconciliation, in accordance with thefollowing procedures.

 

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

 

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

 

                                (c)           Theamount of Escalation Rent for any fractional year in the term hereof shall beappropriately prorated. The termination of this Lease shall not affect theobligations of Landlord and Tenant pursuant to Paragraph 4(b) above to beperformed after such termination.

 

                                (d)           Tenantshall have the right to dispute Landlord’s Statement of Operating Expenses andProperty Taxes by so notifying Landlord no later than 30 days after receipt ofsame. If Tenant disputes such statement, Landlord shall provide Tenant withreasonable verification of the figures shown on the statement and the partiesshall negotiate in good faith to resolve any disputes. If Landlord and Tenantcannot agree, Tenant shall have the right to have a certified public accountantapproved by Landlord audit, at Tenant’s expense, at Landlord’s offices,Landlord’s accounts and records relating to Operating Expenses and Propertytaxes. If such audit reveals that landlord has overcharged Tenant, the amountovercharged shall, at Landlord’s option, be paid to Tenant within 20 days afterthe audit is concluded or be deducted from Tenant’s next payment(s) of rent. Inaddition, if the statement overstates actual Operating Expenses and Real PropertyTaxes by more than 10%, the cost of the audit shall be paid by Landlord. Anyobjection by Tenant to Landlord’s statement and resolution of any dispute shallnot postpone the time for payment of any amounts due Landlord based onLandlord’s statement or due under the Lease.

 

 

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                **5.**             **SECURITY DEPOSIT.**

 

                                Tenant has deposited with Landlord the amountset forth in the Basic Lease Information as the “Security Deposit” as securityfor the performance by Tenant of the terms of this Lease to be performed byTenant, and not as prepayment of rent. Landlord may apply such portion or portions of the Security Deposit asare reasonably necessary for the following purposes: (i) to remedy and defaultby Tenant in the payment of Base Rent or Escalation Rent or a late charge orinterest on defaulted rent, or any other monetary payment obligation of Tenantunder this Lease; (ii) to repair damage to the Premises, the Building or theCommon Areas caused or permitted to occur by Tenant; (iii) to clean and restoreand repair the Premises, the Building or the Common Areas following theirsurrender to Landlord if not surrendered in the condition required pursuant tothe provisions of Paragraph 7, and (iv) to remedy any other default of Tenantto the extent permitted by Law including, without limitation, paying in full onTenant’s behalf any sums claimed by materialman or contractors of Tenant to beowing to them by Tenant for work done or improvements made at Tenant’s requestto the Premises.  In this regard, Tenantherby waives any restriction on the uses to which the Security Deposit my beapplied as contained in Section 1950.7(c) of the California Civil Code and/orany successor statute. In the event the Security Deposit or any portion thereofis so used, Tenant shall pay to Landlord, promptly upon demand, an amount incash sufficient to restore the Security Deposit to the full original sum.  If Tenant fails to promptly restore theSecurity deposit and if Tenant shall have paid to Landlord any sums as “LastMonth’s Prepaid Rent.”  Landlord may, inaddition to any other remedy Landlord my have under this Lease, reduce theamount of Tenant’s Last Month’s Prepaid Rent by transferring all or portions ofsuch Last Month’s Prepaid Rent to Tenant’s Security Deposit until such SecurityDeposit is restored to the amount set forth in the Basic LeaseInformation.  Landlord shall not bedeemed a trustee of the Security Deposit. Landlord may use the Security Deposit in Landlord’s ordinary businessand shall not be required to segregate it form Landlord’s generalaccounts.  Tenant shall not be entitledto any interest on the Security Deposit. If Landlord transfers the Building or the Property during the LeaseTerm, Landlord my pay the Security Deposit to any subsequent owner inconformity with the provisions of Section 1950.7 of the California Civil Codeand/or any successor statute, in which event the transferring landlord shall bereleased from all liability for the return of the Security Deposit.  Tenant specifically grants to Landlord (andTenant hereby waives the provisions of California Civil Code Section 1950.7 tothe contrary) a period of ninety days following a surrender of the Premises byTenant to Landlord with in which to inspect the Premises, make requiredrestorations and repairs, receive and verify workmen’s billings therefore, andprepare a final accounting with respect to the Security Deposit.  In no event shall the Security Deposit orany portion thereof, be considered prepaid rent.

 

                **6.**             **USE.**

 

                                Tenant shall be entitled to use the Premisessolely for office/research and development, sales, marketing and other relateduses and for no other use whatsoever. Tenant shall continuously and without interruption use the Premises forsuch purpose for the entire Lease Term. Any discontinuance of such use for a period of sixty (60) consecutivecalendar days shall be, at Landlords election, a default by Tenant under theterms of this Lease.  Tenant shall havethe right to use the Common Areas in conjunction with its permitted use of thePremises solely for the purposes for which they were designed and intended andfor no other purposes whatsoever. Tenant shall not do or permit anything to be done in or about thePremises, the Building, the Common Areas or the Property which does or could(i) jeopardize the structural integrity of the Building or (ii) cause damage toany part of the Premises, the Building, the Common Areas or the Property.  Tenant shall not operate any equipmentwithin the Premises which does or could (i) injure, vibrate or shake thePremises or the Building, (ii) damage, overload or impair the efficientoperation of any electrical, plumbing, heating, ventilating or air conditioningsystems within or servicing the Premises or the Building, or (iii) damage orimpair the efficient operation of the sprinkler system (if any) within orservicing the Premises or the Building. Tenant shall not install any equipment on or antennas or make any penetrationsof the exterior walls or roof of the Building. Tenant shall not affix any equipment to or make any penetrations or cutsin the floor, ceiling, walls or roof of the Premises.  Tenant shall not place any loads upon the floors, walls, ceilingor roof systems which could endanger the structural integrity of the Buildingor damage its floors, foundations or supporting structural components.  Tenant shall not place any explosive,flammable or harmful fluids or other waste materials in the drainage systems ofthe Premises, the Building, the Common Areas or the Property.  Tenant shall not drain or discharge anyfluids in the landscaped areas or across the paved areas of the Property.  Tenant shall not use any of the Common Areasfor the storage of its materials, supplies, inventory or equipment and all suchmaterials, supplies, inventory or equipment shall at all times be stored withinthe Premises.  Tenant shall not commitnor permit to be committed any waste in or about the Premises, the Building,the Common Areas or the Property.

 

                **7.**             **SURRENDER OF POSSESSION.**

 

                                Immediately prior to the expiration or uponthe sooner termination of this Lease, Tenant shall remove all Tenant’s signsfrom the Building and shall remove all of Tenant’s equipment, trade fixtures,furniture, supplies, wall decorations and other personal property from withinthe Premises, the Building and the Common Areas, and shall vacate and surrenderthe Premises, the Building, the Common Areas and the Property to Landlord inthe same condition, broom clean, as existed at the Term Commencement Date,reasonable wear and tear excepted. Tenant shall repair all damage to the Premises, the exterior of theBuilding and the Common Areas caused by Tenant’s removal of Tenant’s property.  Tenant shall patch and refinish, toLandlord’s reasonable satisfaction, all penetrations made by Tenant or itsemployees to the floor, walls or ceiling of the Premises, whether suchpenetrations were made with Landlord’s approval or not.  Tenant shall repair or replace all stainedor damaged ceiling tiles, wall coverings and floor coverings to the reasonablesatisfaction of Landlord.  Tenant shallrepair all damage caused by Tenant to the exterior surface of the Building andthe paved surfaces of the Common Areas and where necessary, replace orresurface same.  Additionally, Tenantshall, upon the expiration or sooner termination of the Lease, remove anyimprovements constructed or installed by Tenant (or by Landlord at Tenant’srequest) and repair all damage caused by such removal.  If the Premises, the Building, the CommonAreas and the Property are not surrendered to Landlord in the conditionrequired by this Paragraph at the expiration or sooner termination of

 

 

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

 

                **8.             COMPLIANCEWITH LEGAL REQUIREMENTS.**

 

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

 

                **9.**             **ENVIRONMENTAL REGULATIONS.**

 

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

 

                                (b)           Notwithstandinganything to the contrary in this Lease, Tenant, at its sole cost, shall complywith all Laws relating to the storage, use and disposal of Hazardous Materialsin, on or under the Property; *provided,however* that Tenant shall not be responsible for contamination ofthe Premises by Hazardous Materials existing as of the date the Premises aredelivered to Tenant (whether before or after the Term Commencement Date) unlesscaused by Tenant.  Except for smallquantities of standard household or office products containing chemicals whichTenant may use in conducting its business at the Premises so long as such useis in compliance with all Laws, Tenant shall not store, use or dispose of anyHazardous Materials except for those Hazardous Materials listed in HazardousMaterials management plan (“HMMP’) which Tenant shall deliver to Landlord forapproval in advance of any such use, storage or disposal and update at leastannually with Landlord (once so approved by Landlord, the “PermittedMaterials”), which may be used, stored and disposed of provided (i) suchPermitted Materials are used, stored, transported, and disposed of in strictcompliance with applicable laws, (ii) such Permitted Materials shall be limitedto the materials listed on and may be used only in the quantities specified inthe HMMP, and (iii) Tenant shall provide Landlord with copies of all materialsafety data sheets and other documentation required under applicable Laws inconnection with Tenant’s use of Permitted Materials as and when suchdocumentation is provided to any regulatory authority having jurisdiction, in noevent shall Tenant cause or permit to be discharged into the plumbing or sewagesystem of the Building or onto the land underlying or adjacent to the Buildingany Hazardous Material.  Tenant shall besolely responsible for and shall defend, indemnify, and hold Landlord and itsagents harmless from and against all claims, costs and liabilities, includingattorneys’ fees and costs, arising our of or in connection with Tenant’sstorage, use and/or disposal of Hazardous Materials.  If the presence of Hazardous Materials on the Premises caused orpermitted by Tenant results in contamination or deterioration of water or soil,then Tenant shall promptly take any and all action necessary to clean up suchcontamination, but the foregoing shall in no event be deemed to constitutepermission by Landlord to allow the presence of such Hazardous Materials. Atany time prior to the expiration of the Lease Term if Tenant has a reasonablebasis to suspect that there has been any release or the presence of HazardousMaterials in the ground or ground water on the Premises which did not existupon commencement of the Lease Term, Tenant shall have the right to conductappropriate tests of water and soil and to deliver to Landlord the results ofsuch tests to demonstrate that no contamination in excess of permitted levelshas occurred as a result of Tenant’s use of the Premises.  Tenant shall further be solely responsiblefor, and shall

 

 

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defend, indemnify, and holdLandlord and its agents harmless from and against all claims, costs andliabilities, including attorneys’ fees and costs, arising out of or inconnection with any removal, cleanup and restoration work and materialsrequired hereunder to return the Premises and any other property of whatevernature to their condition existing prior to the appearance of the HazardousMaterials.  Tenant’s obligationhereunder shall survive the expiration or earlier termination of the Lease.

 

                                (c)           Upontermination or expiration of the Lease, Tenant at its sole expense shall causeall Hazardous Materials placed in or about the Premises, the Building, theCommon Areas, the Property, and/or the Property by Tenant, its agents,contractors, or invitees, and all installations (whether interior or exterior)made by or on behalf of Tenant relating to the storage, use, disposal ortransportation of Hazardous Materials to be removed and transported for use,storage or disposal in accordance and compliance with all Laws and otherrequirements respecting Hazardous Materials used or permitted to be used byTenant.  Tenant shall apply for andshall obtain from all appropriate regulatory authorities (including anyapplicable fire department or regional water quality control board) allpermits, approvals and clearances necessary for the closure of the Building andthe Property, and shall take all other actions as may be required to completethe closure of the Building and the Property. In addition, prior to vacating the Premises, Tenant shall undertake andsubmit to Landlord an environmental site assessment from an environmentalconsulting company reasonably acceptable to Landlord which site assessmentshall evidence Tenant’s compliance with this Paragraph 9.

 

                                (d)           Atany time prior to expiration of the Lease term, subject to reasonable priornotice (not less than forty-eight (48) hours) and Tenant’s reasonable securityrequirements and provided such activities do not unreasonably interfere withthe conduct of Tenant’s business at the Premises, Landlord shall have the rightto enter in and upon the Premises, Building, Common Areas and Property in orderto conduct appropriate tests of water and soil to determine whether levels ofany Hazardous Materials in excess of legally permissible levels has occurred asa result of Tenant’s use thereof. Landlord shall furnish copies of all such test results and reports toTenant and, at Tenant’s option and cost, shall permit split sampling fortesting and analysis by Tenant.  Suchtesting shall be at Tenant’s expense if Landlord has a reasonable basis forsuspecting and confirms the presence of Hazardous Materials in the soil orsurface or ground water in, on, under, or about the Premises, the Building, theCommon Areas, or the Property, which has been caused by or resulted from theactivities of Tenant, its agents, contractors, or invitees.

 

                                (e)           Landlordmay voluntarily cooperate in a reasonable manner with the efforts of allgovernmental agencies in reducing actual or potential environmentaldamage.  Tenant shall not be entitled toterminate this Lease or to any reduction in or abatement of rent by reason ofsuch compliance or cooperation.  Tenantagrees at all times to cooperate fully with the requirements andrecommendations of governmental agencies regulating, or otherwise involved in,the protection of the environment.

 

**                10.          NOTICESAND CONSENTS.**

 

                Any notice required or permitted to be givenunder this Lease shall be in writing and (i) personally delivered, (ii) sent byUnited States mail, registered or certified mail, postage prepaid, returnreceipt requested, (iii) sent by Federal Express or similar nationallyrecognized overnight courier service, or (iv) transmitted by facsimile with ahard copy sent within one (1) business day by any of the foregoing means, andin all cases addressed as follows, and such notice shall be deemed to have beengiven upon the date of actual receipt or delivery (or refusal to acceptdelivery) at the address specified in the Basic Lease Information (or suchother addresses as may be specified by notice in the foregoing manner) asindicated on the return receipt or air bill. Tenant hereby appoints as its agent to receive the service of alldispossessory or distraint proceedings and notices thereunder the person incharge of or occupying the Premises at the time, and, if no person shall be incharge of or occupying the same, then such service may be made by attaching thesame in the main entrance of the Premises.

 

**                11.          BROKERAGECOMMISSIONS.**

 

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

 

**                12.          HOLDINGOVER.**

 

                This Lease shall terminate without furthernotice on the Lease Expiration Date (as set forth in the Basic LeaseInformation).  Any holding over byTenant after expiration of the Term shall neither constitute a renewal norextension of this Lease nor give Tenant any rights in or to the Premises exceptas expressly provided in this Paragraph. Any such holding over to which Landlord has consented shall be construedto be a tenancy from month to month, on the same terms and conditions hereinspecified insofar as applicable, except that the Base Rent shall be increasedto an amount equal to one hundred fifty percent (150%) of the Base Rent payableduring the last full month immediately preceding such holding over.  Tenant acknowledges that if Tenant holdsover without Landlord’s consent, such holding over may compromise or otherwiseaffect Landlord’s ability to enter into new leases with prospective tenantsregarding the Premises.  Therefore, ifTenant fails to surrender the Premises upon the expiration or termination ofthis lease, in addition to any other liabilities to Landlord accruingtherefrom, Tenant shall protect, defend, indemnify and hold Landlord harmlessfrom and against all claims resulting from such failure,

 

 

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

 

**                13.          ADDITIONALOBLIGATIONS PAYABLE BY TENANT.**

 

                                In addition to the monthly rental and othercharges to be paid by Tenant hereunder, Tenant shall pay or reimburse Landlordfor any and all of the following items when due (hereinafter collectivelyreferred to as “Additional Obligations”), whether or not now customary or inthe contemplation of the parties hereto: taxes other than local, state andfederal personal or corporate income taxes measured by the net income ofLandlord from all sources, assessments including, without limitation, allassessments for public improvements, services or benefits, irrespective of whencommenced or completed, excises, levies, business taxes, license, permit,inspection and other authorization fees, transit development fees, assessmentsor charges for housing funds, service payments in lieu of taxes and any otherfees or charges of any kind, which are levied, assessed, confirmed or imposedby any public authority.  In the eventthat it shall not be lawful for Tenant to reimburse Landlord for the AdditionalObligations but it is lawful to increase the monthly rental to take intoaccount Landlord’s payment of the Additional Obligations, the monthly rentalpayable to Landlord shall be revised to net Landlord the same net returnwithout reimbursement of the Additional Obligations as would have been receivedby Landlord with reimbursement of the Additional Obligations.

 

                **14.          ALTERATIONS.**

 

                                (a)           Tenantshall not make any alterations to or modifications of the Premises or constructany improvements within the Premises until Landlord shall have first approved,in writing, the plans and specifications therefor, which approval may be withheldin Landlord’s sole discretion.  All suchmodifications, alterations or improvements, once so approved, shall be made,constructed or installed by Tenant at Tenant’s expense (including all permitfees and governmental charges related thereto), using a licensed contractorfirst approved by Landlord, in substantial compliance with theLandlord-approved plans and specifications therefor.  All work undertaken by Tenant shall be done in accordance withall Laws and in a good and workmanlike manner using new or like-new materialsof good quality.  Tenant shall notcommence the making of any such modifications or alterations or theconstruction of any such improvements until (i) all required governmentalapprovals and permits shall have been obtained, (ii) all requirements regardinginsurance imposed by this Lease have been satisfied, (iii) Tenant shall havegiven Landlord at lease five business days prior written notice of itsintention to commence such work so that Landlord may post and file notices ofnon-responsibility, and (iv) if requested by Landlord, Tenant shall haveobtained contingent liability and broad form builder’s risk insurance in anamount satisfactory to Landlord in its reasonable discretion to cover anyperils relating to the proposed work not covered by insurance carried by Tenantpursuant to Paragraph 20.  In no eventshall Tenant make any modification, alterations or improvements whatsoever tothe Common Areas or the exterior or structural components of the Buildingincluding, without limitation, any cuts or penetrations in the floor, roof orexterior walls of the Premises.  As usedin this Paragraph, the term “modifications, alterations and/or improvements”shall include, without limitation, the installation of additional electricaloutlets, overhead lighting fixtures, drains, sinks, partitions, doorways, orthe like.

 

                                (b)           Allmodifications, alterations and improvements made or added to the Premises byTenant (other than Tenant’s inventory, equipment, movable furniture, walldecorations and trade fixtures) shall be deemed real property and a part of thePremises, but shall remain the property of Tenant during the Lease.  Any such modifications, alterations orimprovements, once completed shall not be altered or removed from the Premisesduring the Lease Term without Landlord’s written approval first obtained inaccordance with the provisions of Paragraph 14(a) above. At the expiration orsooner termination of this Lease, all such modifications, alterations andimprovements other than Tenant’s inventory, equipment, movable furniture, walldecorations and trade fixtures, shall automatically become the property ofLandlord and shall be surrendered to Landlord as part of the Premises asrequired pursuant to Paragraph 7, unless Landlord shall require Tenant toremove any of such modifications, alterations or improvements in accordancewith the provisions of Paragraph 7, in which case Tenant shall so removesame.  Landlord shall have noobligations to reimburse Tenant for all or any portion of the cost or value ofany such modifications, alterations, or improvements so surrendered toLandlord.  All modifications,alterations or improvements which are installed or constructed on or attachedto the Premises by Landlord and/or at Landlord’s expense shall be deemed realproperty and a part of the Premises and shall be property of Landlord.  All lighting, plumbing, electrical, heating,ventilating and air conditioning fixtures, partitioning, window coverings, wallcoverings and floor coverings installed by Tenant shall be deemed improvementsto the Premises and not trade fixtures of Tenant.

 

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

 

                                (d)           Solong as Tenant is in occupancy of the entire Premises, Tenant, at its sole costand expense, shall have the right to install a business identification sign onone-quarter of the available signage on the

 

 

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concrete monument sign for theBuilding.  Any such sign shall besubject to Landlord’s prior written consent as to design, location andmaterials.

 

**                15.          REPAIRS.**

 

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

 

**                16.          LIENS.**

 

                                Tenant shall keep the Premises and theBuilding free from any liens arising out of any work performed, materialsfurnished or obligations incurred by Tenant. Landlord shall have the right to post and keep posted on the Premisesany notices that may be provided by law or which Landlord may deem to be properfor the protection of Landlord, the Premises and the Building from suchliens.  In the event any such lienattaches to the Premises or the Property, and Tenant does not cause the same tobe released by payment, bonding or otherwise, within ten (10) days after theattachment thereof, Landlord shall have the right but not the obligation tocause the same to be release by such means as it shall deem proper, and anysums expended by Landlord in connection therewith shall be payable by Tenant ondemand with interest thereon from the date of expenditure by Landlord at therate specified in Paragraph 3(e). Landlord and Tenant each hereby warrant to use best efforts to notifythe other of the existence or attachment of any and all liens contemplatedunder this Paragraph 15 within five (5) business days of Landlord’s or Tenant’sactual knowledge of such lien(s).

 

**                17.          ENTRYBY LANDLORD.**

 

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

 

**                18.          SERVICES.**

 

                                (a)           Landlordshall maintain the Common Areas and public areas of the Property, includinglobbies, stairs, elevators, corridors and restrooms, all exterior landscaping,the windows in the Building, the mechanical, plumbing and electrical equipmentserving the Building, and the structure itself in reasonably good order andcondition, except for damage occasioned by the act or omission of Tenant, itsemployees, contractors, agents or invitees which damage shall be repaired byLandlord at Tenant’s expense.

 

                                (b)           Landlordshall cause to be furnished (1) electricity for lighting and the operation ofoffice equipment, on a 24-hours basis, with power usage in excess of the timeallowance referred to in Paragraph 18(d) below to be at Tenant’s cost, (2) heatand air conditioning to the extent reasonably required for the comfortableoccupancy by Tenant in its use of the Premises during the period from 7:00 amto 6:00 pm on weekdays excluding holidays, or as set forth in the Rules andRegulations, which may be changed from time to time, or such shorter periods asmay be prescribed by any applicable policies or regulations adopted by anyutility or governmental agency, (3) elevator service, (4) lighting replacementfor building standard lights, (5) restroom supplies, (6) window washing withreasonable frequency, (7) water for lavatory and drinking purposes, and (8)security patrol services and janitor service during the times and in the mannerthat such services are customarily furnished in comparable office buildings inthe area; provided that in no event shall Landlord be obligated to furnishjanitor service on Saturdays, Sundays, or legal holidays.  Landlord may establish reasonable measuresto conserve energy, including but not limited to, automatic switching of lightsafter hours and more efficient forms of lighting, so long as such measures donot unreasonably interfere with Tenant’s use of the Premises.  Landlord shall not be in default hereunderor be liable for any damages directly or indirectly resulting from, nor shallthe rental herein reserved by abated by reason of (i) the installation, use orinterruption of use of any equipment in connection with the furnishing of anyof the foregoing services, (ii) failure to furnish or delay in furnishing anysuch services when such failure or delay is caused by accident or any conditionbeyond the control of Landlord or by the making of necessary repairs orimprovements to the Premises or to the Building, or (iii) the limitation,curtailment, rationing or restrictions on use of water, electricity, gas or anyother form of energy serving the Premises or the Building.  Tenant herby waives the provisions ofCalifornia Civil Code Section 1932 or any other applicable existing or futurelaw or ordinance or governmental regulation permitting the termination of thisLease due to any interruption, failure or inability to provide Landlordservices as provided for herein.

 

 

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                                (c)           Tenantshall reimburse Landlord, upon billing therefor, for the cost of all heat orair conditioning provided to the Premises during hours required by Tenant whensuch services are not otherwise furnished by Landlord pursuant to Paragraph18(b) above.  The cost of such afterhours heat or air conditioning shall be a per-hour charge reflecting theelectrical energy, labor and fixed plant costs of running the heating and airconditional system which per hour charge shall be fifteen dollars ($15.00).  In the event that Landlord has reasonablecause to believe that the cost of after hours heating, air conditioning andelectricity used by Tenant is exceeding the per hour charge, Landlord may atits option install separate meter(s) for the Premises, or portions thereof, atTenant’s sole expense, and Tenant thereafter shall pay all charges of theutility providing service.

 

                                (d)           Inthe event that Landlord, at Tenant’s request, provides services to Tenant thatare (i) in excess of those services required to maintain “Building StandardImprovements,” or (ii) are not otherwise provided for in this Lease, Tenantshall pay Landlord’s reasonable charges for such services upon billingtherefor.

 

**                19.          INDEMNIFICATIONAND LIMITATION OF LANDLORD’S LIABILITY.**

 

                (a)           Tenantshall defend with competent counsel satisfactory to Landlord any claims made orlegal actions filed or threatened against Landlord with respect to theviolation of any Law, or the death, bodily injury, personal injury, propertydamage, or interference with contractual or property rights suffered by anythird party occurring within the Premises or resulting from Tenant’s use oroccupancy of the Premises, the Building or the Common Areas, or resulting fromTenant’s activities in or about the Premises, the Building, the Common Areas orthe Property, and Tenant shall indemnify and hold Landlord, Landlord’spartners, principals, members, employees, agents and contractors harmless fromany loss liability, penalties or expense whatsoever (including any lossattributable to vacant space which otherwise would have been leased, but forsuch activities) resulting therefrom, except to the extent proximately causedby the active negligence or willful misconduct of Landlord.  This indemnity agreement shall survive theexpiration or sooner termination of this Lease.

 

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

 

“A general release does not extend to claims which the creditor doesnot 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 thedebtor.”

 

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

 

**                20.          INSURANCEAND SUBROGATION.**

 

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

 

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

 

                                (1)           Comprehensivegeneral liability insurance insuring Tenant against liability for personalinjury, bodily injury, death and damage to property occurring with thePremises, or resulting from Tenant’s use or occupancy of the Premises, theBuilding, the Common Areas or the Property, or resulting from Tenant’sactivities in or about the Premises or the Property, with coverage in an amountequal to Tenant’s Required Liability Coverage (as set forth in Basic LeaseInformation), which insurance shall contain “blanket contractual liability” and“broad form property damage” endorsements insuring Tenant’s performance ofTenant’s obligations to indemnify Landlord as contained in this Lease.

 

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

 

 

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

 

                                (4)           Plateglass insurance, at actual replacement cost;

 

                                (5)           Boilerand Machinery insurance, if applicable, in limits sufficient to restore theBuilding;

 

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

 

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

 

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

 

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

 

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

 

                                (b)           Withrespect to insurance maintained by Landlord.

 

                                (i)            Landlordshall maintain, as the minimum coverage required of it by this Lease, fire andproperty damage insurance in so-called “fire and extended coverage” forminsuring Landlord (and such others as Landlord may designate) against loss fromphysical damage to the Building with coverage of not less than one hundredpercent (100%) of the full actual replacement cost thereof and against loss ofrents for a period of not less than six months.  Such fire and property damage insurance, at Landlord’s electionbut without any requirements on Landlord’s behalf to do so, (i) may be writtenin so-called “all risk” form, excluding only those perils commonly excludedfrom such coverage by Landlord’s then property damage insurer; (ii) may providecoverage for physical damage to the improvements so insured for up to theentire full actual replacement cost thereof; (iii) may be endorsed to coverloss or damage caused by any additional perils against which Landlord may electto insure including earthquake and/or flood; and/or (iv) may provide coveragefor loss of rents for a period of up to twelve months.  Landlord shall not be required to cause suchinsurance to cover any of Tenant’s personal property, inventory, and tradefixtures, or any modifications, alterations or improvements made or constructedby Tenant to or within the Premises. Landlord shall use commercially reasonable efforts to obtain suchinsurance at competitive rates.

 

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

 

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

 

 

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                (c)           Landlordhereby releases Tenant, and Tenant hereby releases Landlord and its respectivepartners, principals, members, officers, agents, employees and servants, fromany and all liability for loss, damage or injury to the property of the otherin or about the Premises or the Property which is caused by or results from aperil or event or happening which is covered by insurance actually carried andin force at the time of the loss by the party sustaining such loss;*provided, however,* that such waiver shallbe effective only to the extent permitted by the insurance covering such lossand to the extent such insurance is not prejudiced thereby.

 

**                21.          DAMAGEOR DESTRUCTION.**

 

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

 

                (b)           Allinsurance proceeds available from the fire and property damage insurancecarried by Landlord shall be paid to and become the property of Landlord.  If this Lease is terminated pursuant toeither Paragraph 21(c) or 21(d), all insurance proceeds available frominsurance carried by Tenant which cover loss of property that is Landlord’sproperty or would become Landlord’s property on termination of this Lease shallbe paid to and become the property of Landlord, and the remainder of suchproceeds shall be paid to and become the property of Tenant.  If this Lease is not terminated pursuant toeither Paragraph 21(c) or 21(d), all insurance proceeds available frominsurance carried by Tenant which cover loss to property that is Landlord’sproperty shall be paid to and become the property of Landlord, and all proceedsavailable from such insurance which cover loss to property which would onlybecome the property of Landlord upon the termination of this Lease shall bepaid to and remain the property of Tenant. The determination of Landlord’s property and Tenant’s property shall bemade pursuant to Paragraph 14(b).

 

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

 

                                (i)            TheBuilding is damaged by any peril covered by valid and collectible insuranceactually carried by Landlord and in force at the time of such damage ordestruction (an “insured peril”) to such an extent that the estimated cost torestore the Building exceeds the lesser of (i) the insurance proceeds availablefrom insurance actually carried by Landlord, or (ii) fifty percent of the thenactual replacement cost thereof;

 

                                (ii)           TheBuilding is damaged by an uninsured peril, which peril Landlord was notrequired to insure against pursuant to the provisions of Paragraph 20 of thisLease.

 

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

 

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

 

                (i)            Ifthe time estimated to substantially complete the restoration exceeds twelvemonths from and after the date the architect’s or construction consultant’swritten opinion is delivered; or

 

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

 

                (e)           Landlordand Tenant agree that the provisions of Paragraph 21(d) above are intended tosupersede and replace the provisions contained in California Civil Code,Section 1932, Subdivision 2, and California Civil Code, Section 1934, andaccordingly, Tenant hereby waives the provisions of such Civil Code Sectionsand the provisions of any successor Civil Code Sections or similar lawshereinafter enacted.

 

                (f)            Inthe event of damage to the Premises which does not result in the termination ofthis Lease, the Base Rent (and any Escalation Rent) shall be temporarily abatedduring the period of restoration in proportion in the degree to which Tenant’suse of the Premises is impaired by such damage.

 

 

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**                22.          EMINENTDOMAIN.**

 

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

 

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

 

                (c)           Ifany part of the Premises or the Building is taken and this Lease is notterminated, then Landlord shall, to the extentnot prohibited by laws then in force, repair any damage occasionedthereby to the remainder thereof to a condition reasonably suitable forTenant’s continued operations and otherwise, to the extent practicable, in themanner and to the extent provided in Paragraph 21(a).

 

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

 

                (e)           Anyaward made for any taking of the Property, the Building, or the Premises, orany portion thereof, shall belong to and be paid to Landlord, and Tenant herebyassigns to Landlord all of its right, title and interest in any such award; *provided, however,* that Tenant shall beentitled to receive any portion of the award that is made specifically (i) forthe taking of personal property, inventory or trade fixtures belonging toTenant, (ii) for the interruption of Tenant’s business or its moving costs, or(iii) for the value of any leasehold improvements installed and paid for byTenant.  The rights of Landlord andTenant regarding any condemnation shall be determined as provided in thisParagraph, and each party hereby waives the provisions of Section 1265.130 ofthe California Code of Civil Procedure, and the provisions of any similar lawhereinafter enacted, allowing either party to petition the Supreme Court toterminate this Lease and/or otherwise allocate condemnation awards betweenLandlord and Tenant in the event of a taking of the Premises.

 

                (f)            Inthe event of a taking of the Premises which does not result in a termination ofthis Lease (other than a temporary taking), then, as of the date possession istaken by the condemning authority, the Base Rent shall be reduced in the sameproportion that the area of that part of the Premises so taken (less anyaddition to the area of the Premises by reason of any reconstruction) bears tothe area of the Premises immediately prior to such taking.

 

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

 

**                23.          EVENTSOF DEFAULT.**

 

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

 

                                (i)            Tenantshall have failed to pay Base Rent or any Escalation Rent within five (5) daysof when due; or

 

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

 

                                (iii)          Tenant shall havefailed to perform any term, covenant or condition of this Lease (except thoserequiring the payment of Base Rent or Escalation Rent, which failures shall begoverned by subparagraph (a) above) within thirty (30) days after written noticefrom Landlord to Tenant specifying the nature of such failure and requestingTenant to perform same; or

 

                                (iv)          Tenantshall have sublet the Premises or assigned or encumbered its interest in thisLease in violation of the provisions contained in Paragraph 24, whethervoluntarily or by operation of law; or

 

                                (v)           Tenantshall have abandoned the Premises; or

 

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

 

 

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

 

                                (viii)        Tenantor any guarantor of this Lease shall have allowed (or sought) to have enteredagainst it a decree or order which: (i) grants or constitutes an order ofrelief, appointment of a trustee, or condemnation or a reorganization planunder the bankruptcy laws of the United States; (ii) approves as properly fileda petition seeking liquidation or reorganization under said bankruptcy laws orany other debtor’s relief law or similar statute of the United States or anystate thereof; or (iii) otherwise directs the winding up or liquidation ofTenant; *provided, however*, if anydecree or order was entered without Tenant’s consent or over Tenant’sobjection, Landlord may not terminate this Lease pursuant to this subparagraphif such decree or order is rescinded or reversed within thirty (30) days afterits original entry; or

 

                                (ix)           Tenantor any guarantor of this Lease shall have availed itself of the protection ofany debtor’s relief law, moratorium law or other similar law which does notrequire the prior entry of a decree or order.

 

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

 

                                (i)            Landlordmay, at Landlord’s election, keep this Lease in effect and enforce, by anaction at law or in equity, all of its rights and remedies under this Leaseincluding, without limitations, (i) the right to recover the rent and other sumsas they become due by appropriate legal action, (ii) the right to make paymentsrequired by Tenant, or perform Tenant’s obligations and be reimbursed by Tenantfor the cost thereof with interest at the then maximum rate of interest notprohibited by law from the date the sum is paid by Landlord until Landlord isreimbursed by Tenant, and (iii) the remedies of injunctive relief and specificperformance to prevent Tenant from violating the terms of this Lease and/or tocompel Tenant to perform its obligations under this Lease, as the case may be.

 

                                (ii)           Landlordmay, at Landlord’s election, terminate this Lease by giving Tenant writtennotice of termination, in which event this Lease shall terminate on the dateset forth for termination in such notice, in which event Tenant shallimmediately surrender the Premises to Landlord, and if Tenant fails to do so,Landlord may, without prejudice to any other remedy which it may have forpossession or arrearages in rent, enter upon and take possession of the Premisesand expel or remove Tenant and any other person who may be occupying thePremises or any part thereof, without being liable for prosecution or any claimor damages therefore. Any termination under this subparagraph shall not relieveTenant from its obligation to pay to Landlord all Base Rent and Escalation Rentthen or thereafter due, or any other sums due or thereafter accruing toLandlord, or from any claim against Tenant for damages previously accrued orthen or thereafter accruing. In no event shall any one or more of the followingactions by Landlord, in the absence of a written election by Landlord toterminate this Lease constitute a termination of this Lease:

 

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

 

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

 

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

 

                                (iii)          Inthe event Tenant breaches this Lease and abandons the Premises, Landlord mayterminate this Lease, but this Lease shall not terminate unless Landlord givesTenant written notice of termination. If Landlord does not terminate this Leaseby giving written notice of termination, Landlord may enforce all its rightsand remedies under this Lease, including the right and remedies provided byCalifornia Civil Code Section 1951.4 (“lessor may continue lease in effectafter lessee’s breach and abandonment and recover rent as it becomes due, iflessee has right to sublet or assign, subject only to reasonable limitations”),as in effect on the Term Commencement Date.

 

                                (iv)          Inthe event Landlord terminates this Lease, Landlord shall be entitled, atLandlord’s election, to the rights and remedies provided in California CivilCode Section 1951.2, as in effect on the Term Commencement Date. For purposesof computing damages pursuant to Section 1951.2, an interest rate equal to themaximum rate of interest then not prohibited by law shall be used wherepermitted. Such

damages shall include, withoutlimitation:

 

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

 

                                                (2)           Theworth at the time of award of the amount by which the unpaid rent for thebalance of the term after the time of the award exceeds the amount of suchrental loss that Tenant proves could be reasonably avoided, computed bydiscounting such amount at the discount rate of the Federal Reserve Bank of SanFrancisco, at the time of award plus one percent; and

 

                                                (3)           Anyother amount necessary to compensate Landlord for all detriment proximatelycaused by Tenant’s failure to perform Tenant’s obligations under this lease, orwhich in the ordinary

 

 

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

 

                (c)           Inthe event Landlord fails to perform its obligations under this Lease, Landlordshall nevertheless not be in default under the terms of this Lease until suchtime as Tenant shall have first given Landlord written notice specifying thenature of such failure to perform its obligations, and then only after Landlordshall have had thirty (30) days following its receipt of such notice withinwhich to perform such obligations; *providedthat*, if longer than thirty (30) days is reasonably required inorder to perform such obligations, Landlord shall have such longer period. Inthe event of Landlord’s default as above set forth, then, and only then, Tenantmay then proceed in equity or at law to compel Landlord to perform itsobligations and/or to recover damages proximately caused by such failure toperform (except as and to the extent Tenant has waived its right to damages asprovided in this Lease).

 

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

 

                                (i)            Nopartner or member of Landlord shall be sued or named as a party in any suit oraction brought by Tenant with respect to any alleged breach of this Lease(except to the extent necessary to secure jurisdiction over the partnership andthen only for that sole purpose);

 

                                (ii)           Noservice of process shall be made against any partner or member of Landlordexcept for the sole purpose of securing jurisdiction over the partnership; and

 

                                (iii)          Nowrit of execution will ever be levied against the assets of any partner ormember of Landlord other than to the extent of his or her interest in theassets of the partnership or limited liability company constituting Landlord.

 

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

 

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

 

**                24.          ASSIGNMENTAND SUBLETTING**

 

                (a)           Tenantshall not sublet the Premises or any portion thereof or assign its interest inthis lease, whether voluntarily or by operation of Law, without Landlord’sprior written consent which shall not be unreasonably withheld. Any attemptedsubletting or assignment without Landlord’s prior written consent, atLandlord’s election, shall constitute a default by Tenant under the terms ofthis Lease. The acceptance of rent by Landlord from any person or entity otherthan Tenant, or the acceptance of rent by Landlord from Tenant with knowledgeof a violation of the provision of this Paragraph, shall not be deemed to be awaiver by Landlord of any provision of this Paragraph of this Lease or to be aconsent to any subletting by Tenant or any assignment of Tenant’s interest inthis Lease. Without limiting the circumstances in which it may be reasonablefor Landlord to withhold its consent to an assignment or subletting, Landlordand Tenant acknowledge that it shall be reasonable for Landlord to withhold itsconsent in the following instances:

 

                                (i)            theproposed assignee or sublessee is a governmental agency;

 

                                (ii)           inLandlord’s reasonable judgment, the use of the Premises by the proposedassignee or sublessee would involve occupancy by other than primarily generaloffice, would entail any alterations which would lessen the value of theleasehold improvements in the Premises, or would require increased services byLandlord;

 

                                (iii)          inLandlord’s reasonable judgment, the financial worth of the proposed assignee isless than that of Tenant or does not meet the credit standards applied byLandlord;

 

 

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                                (iv)          theproposed assignee or sublessee (or any of its affiliates) has been in materialdefault under a lease, has been in litigation with a previous landlord, or inthe ten years prior to the assignment or sublease has filed for bankruptcyprotection, has been the subject of an involuntary bankruptcy, or has beenadjudged insolvent;

 

                                (v)           Landlordhas experienced a previous default by or is in litigation with the proposedassignee or sublessee;

 

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

 

                                (vii)         theuse of the Premises by the proposed assignee or sublessee will violate anyapplicable law, ordinance or regulation;

 

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

 

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

 

                                (x)            Tenantis in default of any obligation of Tenant under this Lease, or Tenant hasdefaulted under this Lease on three or more occasions during the 12 monthspreceding the date that Tenant shall request consent; or

 

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

 

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

 

                (c)           IfTenant shall desire to assign its interest under the Lease or to sublet thePremises, Tenant must first notify Landlord, in writing, of its intent toassign or sublet, at least thirty (30) days in advance of the date it intendsto so assign its interest in this Lease or sublet the Premises but not soonerthan one hundred eighty (180) days in advance of such date, specifying indetail the terms of such proposed assignment or subletting, including the nameof the proposed assignee or sublessee, the property assignee’s or sublessee’sintended use of the Premises, current financial statements (including a balancesheet, income statement and statement of cash flow, all prepared in accordancewith generally accepted accounting principles) of such proposed assignee orsublessee, the form of documents to be used in effectuating such assignment orsubletting and such other information as Landlord may reasonably request.Landlord shall have a period of ten (10) business days following receipt ofsuch notice and the required information within which to do one of thefollowing: (i) consent to such requested assignment or subletting subject toTenant’s compliance with the conditions set forth in Paragraph 24(d) below, or(ii) refuse to so consent to such requested assignment or subletting, providedthat such consent shall not be unreasonably refused, or (iii) terminate thisLease as to the portion (including all) of the Premises that is the subject ofthe proposed assignment or subletting. During such ten (10) business dayperiod, Tenant covenants and agrees to supply to Landlord, upon request, allnecessary or relevant information which Landlord may reasonably requestrespecting such proposed assignment or subletting and/or the proposed assigneeor sublessee.

 

                (d)           IfLandlord elects to consent, or shall have been ordered to so consent by a courtof competent jurisdiction, to such requested assignment or subletting, suchconsent shall be expressly conditioned upon the occurrence of each of theconditions below set forth, and any purported assignment or subletting made orordered prior to the full and complete satisfaction of each of the followingconditions shall be void and, at the election of Landlord, which election maybe exercised at any time following such a purported assignment or sublettingbut prior to the satisfaction of each of the stated conditions, shallconstitute a material default by Tenant under this Lease until cured bysatisfying in full each such condition by the assignee or sublessee. Theconditions are as follows:

 

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

 

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

 

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

 

                                (iv)          Tenanthaving reimbursed to Landlord all reasonable attorneys’ fees incurred byLandlord in conjunction with the processing and documentation of any suchrequested subletting or assignment.

 

 

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                                (v)           Tenanthaving delivered to Landlord a complete and fully-executed duplicate originalof such sublease agreement or assignment agreement (as applicable) and allrelated agreements.

 

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

 

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

 

                                                (2)           IfTenant assigns its interest under this Lease and if Tenant is to receive all ora portion of the consideration for such assignment in future installments, thatTenant and Tenant’s assignee shall have entered into a written agreement withand for the benefit of Landlord satisfactory to Landlord and its counselwhereby Tenant and Tenant’s assignee jointly agree to pay to Landlord an amountequal to fifty percent (50%) of all such future assignment considerationinstallments to be paid by such assignee as and when such assignmentconsideration is so paid.

 

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

 

                (e)           Forpurposes of this Paragraph, including any amendments to this Paragraph by wayof addendum or other writing, the term “assignment consideration” shall meanall consideration to be paid by the assignee to Tenant or to any other party onTenant’s behalf or for Tenant’s benefit as consideration for such assignment, afterdeduction for reasonable market rate leasing commissions paid by Tenant andtenant improvements made by Tenant for any subtenant, but without deduction forany other costs or expenses (including, without limitation, building upgrades,permit fees, attorneys’ fees, and other consultants’ fees) incurred by Tenantin connection with such assignment, and the term “excess rentals” shall meanall consideration to be paid by the sublessee to Tenant or to any other partyon Tenant’s behalf or for Tenant’s benefit for the sublease of all or any partof the Premises in excess of the rent due to Landlord under the terms of thisLease for the portion subleased for the same period, after deduction forreasonable market rate leasing commissions paid by Tenant and tenantimprovements made by Tenant for any subtenant, but without deduction for anyother costs or expenses (including, without limitation, building upgrades,permit fees, attorneys’ fees, and other consultants’ fees) incurred by Tenantin connection with such sublease. Tenant agrees that the portion of anyassignment consideration and/or excess rentals arising form any assignment orsubletting by Tenant which is to be paid to Landlord pursuant to this Paragraphnow is and shall then be the property of Landlord and not the property ofTenant.

 

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

 

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

 

                (h)           Nosubletting or assignment, even with the consent of Landlord, shall relieveTenant of its personal and primary obligation to pay rent and to perform all ofthe other obligations to be performed by Tenant hereunder. Consent by Landlordto one of more assignments of Tenant’s interest in this Lease or to one or moresublettings of the Premises shall not be deemed to be consent to any subsequentassignment or subletting. If Landlord shall have been order by a court ofcompetent jurisdiction to consent to a requested assignment or subletting,shall have been ordered by a court of competent jurisdiction over the objectionof Landlord, such assignment of subletting shall not be binding between theassignee (or sublessee) and Landlord until such time as all conditions setforth in Paragraph 24(d) above have been fully satisfied (to the extent notthen satisfied) by the assignee or sublessee, including, without limitation,the payment to Landlord of all agreed assignment considerations and/or excessrentals then doc Landlord.

 

**                25.          SUBORDINATION.**

 

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

 

 

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ground leases, mortgages ordeeds of trust shall be subject to and subordinate to this Lease.  However, if any lessor under any such futureground lease or any lender holding such future mortgage or deed of trust shalldesire or require that this Lease be made subject to and subordinate to suchfuture ground lease, mortgage, or deed to trust, then Tenant agrees, within tendays after Landlord’s written request therefore, to execute, acknowledge anddeliver to necessary or proper to assure the subordination of this Lease tosuch future ground lease, mortgage, or deed of trust, but only if such lessoror lender agrees to recognize Tenant’s rights under this Lease and agrees notto disturb Tenant’s quiet possession of the Premises so long as Tenant is nottin default under this Lease.  IfLandlord assigns the Lease as security for a loan, Tenant agrees to executesuch documents as are reasonably requested by the lender and to providereasonable provisions in the Lease protecting such lender’s security interestwhich are customarily required by institutional lenders making loans secured bya deed of trust.

 

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

 

                **26.**          **ESTOPPEL CERTIFICATE.**  Tenant will, following any request byLandlord, promptly execute and deliver to Landlord an estoppel certificatesubstantially in the form attached as Exhibit E, (i) starting the date to whichthe rent and other charges are paid in advance, if any, (iii) acknowledgingthat therea re not, to Tenant’s knowledge, any uncured defaults on the part ofLandlord hereunder, or specifying such defaults if any are claimed and (iv)certifying such other information about this Lease as may be reasonablerequested by Landlord, its Lender or prospective lenders, investors orpurchasers of the Building or the Property. Tenant’s failure to execute and deliver such estoppel certificate withinten days after Landlord’s request therefore shall be a material default byTenant under this Lease, and Landlord shall have all of the rights and remediesavailable to Landlord as Landlord would otherwise have in the case of any othermaterial default by Tenant, including the right to terminate this Lease and suefor damages proximately caused thereby, it being agreed and understood by Tenantthat Tenant’s failure to so deliver such estoppel certificate in a timelymanner could result in Landlord being unable to perform committed obligationsto other third parties which were made by Landlord in reliance upon thiscovenant of Tenant.  Landlord and Tenantintend that any statement delivered pursuant to this Paragraph may be reliedupon by any Lender or purchaser or prospective Lender or purchaser of theBuilding, the Property, or any interest in them.

 

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

 

**                28.          RULES.**

 

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

 

**                29.          ATTORNEYS’FEES.**

 

**                               **Ifas a result of any breach or default in the performance of any of theprovisions of this Lease, Landlord or Tenant uses the services of an attorneyand brings an action in a local, state or federal court of law in order tosecure compliance with such provisions or to recover damages therefor, or toterminate this Lease or evict Tenant, the party against whom judgment has beenrendered shall reimburse the prevailing party upon demand for any and allreasonable attorneys’ fees and expenses so incurred by the prevailing party.

 

**                30.          WAIVER.**

 

**                               **Thewaiver by Landlord of any agreement, condition or provision herin containedshall not be deemed to be a waiver of any subsequent breach of the same or anyother agreement, condition or provision herin contained, nor shall any customor practice which may grow up between the parties in the administration of theterms hereof be construed to waive or to lessen the right of Landlord to insistupon the performance by Tenant in strict accordance with such terms.  The subsequent acceptance of rentalhereunder by Landlord shall not be deemed to be a wavier of any preceding breachby Tenant of any agreement, condition or provision of this Lease, other thanthe failure of Tenant to pay the particular rental so accepted, regardless ofLandlord’s knowledge of the preceding breach at the time of acceptance orpayment of the rental.

 

 

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**                31.          PARKINGAND TRANSPORTATION MANAGEMENT.**

 

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

 

                                (b)           Landlordmay assign any unserved and unassigned parking spaces and/or make all or aportion of such spaces reserved, if it determines in its sole discretion thatsuch action is necessary for orderly and efficient parking. Tenant shall notuse more parking spaces than the number of parking privileges specified herein.Landlord may, at its option, cause all parking to be valet parked or implementa regulated or monitored parking program with any associated costs deemed onOperating Expense. If Tenant permits or allows any of the prohibited activitiesdescribed in this Paragraph 31, then Landlord shall have the right, withoutnotice, an addition to such other rights and remedies that it may have, toremove or tow away the vehicle involved and charge file cost to Tenant, whichcost shall be immediately payable upon demand by Landlord. Landlord shall haveno responsibility for damage to automobiles incurred in the Lot.

 

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

 

                                (d)           Tenantagrees that it will use its best efforts to cooperate in programs which may beundertaken by Landlord independently, or in cooperation with localmunicipalities or governmental agencies or other property owners in thevicinity of the Building, to reduce peak levels of commuter traffic. Suchprograms may include, but shall not be limited to, carpools, vanpools and otherride sharing or transportation system management programs, public and privatetransit, and flexible work hours. Tenant agrees to cooperate with Landlord inLandlord’s administration of a transportation management program (if any)required by the City of Santa Clara. Tenant acknowledges that as a part of thisprogram, Tenant may be required to distribute employee transportationinformation at the Term Commencement Date, participate in annual employeetransportation surveys, allow employees to participate in commuter activities,designate a liaison for commuter transportation related activities, distributecommuter information to all employees prior to relocation and to new employeeswhen hired, and otherwise participate in other programs or services initiatedunder the transportation management program.

 

**                32.          COMPLETEAGREEMENT.**

 

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

 

**                33.          MODIFICATIONFOR LENDER.**

 

**                               **If,in connection with obtaining financing or refinancing for the Property or the Premisesor the Building or any portion thereof, Landlord’s lender shall requestreasonable modification of or to this Lease as a condition to such financing orrefinancing, Tenant shall not unreasonably withhold, delay or defer its consentthereto, provided such modifications do not materially affect Tenants rights orobligations hereunder.

 

**                34.          MERGER.**

 

**               **Thevoluntary or other surrender of this Lease by Tenant, or a mutual cancellationthereof, shall not work a merger, and shall at the option of Landlord,terminate all or any existing subleases or supremacies, or operate as anassignment to it of any or all such subleases or subtenancies.

 

**                35.          SALE.**

 

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

 

**                36.          NOLIGHT, AIR OR VIEW EASEMENT.**

 

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

 

**                37.          CORPORATEAUTHORITY.**

 

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

 

 

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**                38.          ABANDONMENT.**

 

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

 

**                39.          FUTUREDEVELOPMENT.**

 

                                Tenant agrees that any construction workperformed on the Building may result in minor inconveniences to Tenant butshall not entitle Tenant to any rebate of rent or subject Landlord to anyliability. Tenant further acknowledges that such construction work shall be inLandlord’s sole discretion. Tenant agrees to execute and deliver, upon demandby Landlord and in the form requested by Landlord, any additional documentsneeded to conform this Lease to circumstances resulting from such construction.Landlord reserves the right from time to time to grant, without the consent orjoiner of Tenant, such easements, rights of way and dedications that Landlorddeems necessary and to cause the recordation of parcel maps and restrictions,so long as such easements, rights of way and dedications not unreasonablyinterfere with the use of the Premises by Tenant. Tenant agrees to execute anydocuments reasonably requested by Landlord to effectuate any such easementrights, dedications, maps or restrictions.

 

**                40.          SECURITYMEASURES.**

 

                                Landlord may, but shall be under noobligation to, implement security measures for the Building or the Property,such as the registration or search of all persons entering or leaving theBuilding, requiring identification for access to the Building, evacuation ofthe Building for cause, suspected cause, or for drill purposes, the issuance ofmagnetic pass cards or keys for Building or elevator or access and otheractions that Landlord deems necessary or appropriate to prevent any threat ofproperty loss or damage, bodily injury or business interruption. Tenant shallcooperate and comply with, and cause its employees, representatives andvisitors to cooperate and comply with, such security measures. Landlord, itsagents and employees shall have no liability to Tenant, its employees, agentsand invitees for the implementation or exercise of, or the failure to implementor exercise, any such security measures or for any resulting disturbance ofTenant’s use or enjoyment of the Premises.

 

**                41.          FORCEMAJEURE.**

 

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

 

**                42.          RECORDING.**

 

**                               **NeitherLandlord not Tenant shall record this Lease, nor a short form memorandum ofthis Lease, without prior written consent of the other.

 

**                43.          MISCELLANEOUS.**

 

                                The words “Landlord” and “Tenant” as usedherein shall include the plural as well as the singular. If there be more thanone Tenant, the obligations hereunder imposed upon Tenant shall be joint andseveral. Time is of the essence of this Lease and each and all of itsprovisions. Submission of this instrument for examination or signature byTenant does not constitutive a reservation of or option for lease, and it isnot effective as a lease or otherwise until execution and delivery by bothLandlord and Tenant. The agreements, conditions and provisions herein containedshall, subject to the provisions as to assignment, apply to and bind the heirs,executors, administrators, successors and assigns of the parties hereto. Tenantshall not, without the consent of Landlord, use the words “Marriott Plaza” or“2901 Tasman Drive” for any purpose other than as the address of the businessto be conducted by Tenant in the Premises. If any provision of this Lease shallbe determined to be illegal or unenforceable, such determination shall notaffect any other provision of this Lease and all such other provisions shallremain in full force and effect. This Lease shall be governed by and construedpursuant to the Laws of the State of California. Exclusive jurisdiction andvenue for resolving any dispute between Tenant and Landlord shall be in theCounty of Santa Clara, State of California.

 

**                44.          EXHIBITS.**

 

**                               **Theexhibits and addendum, if any, specified in the Basic Lease Information areattached to this Lease and by this reference made a part hereof.

 

**                45.          TELEPHONESERVICE.**

 

**                               **(a)           Notwithstanding any other provisionof this Lease to the contrary:

 

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

 

                                                (ii)           Landlordmake no warranty as to the quality, continuity or availability of thetelecommunitions services in the Building, and Tenant hereby waives any claimagainst Landlord for any actual or

 

 

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consequential damages(including damage for loss of business) in the event Tenant’stelecommunications services in any way are interrupted, damaged or renderedless effective, except to the extent caused by the grossly negligent or willfulact or omission by Landlord, its agent or employees.  Tenant accepts the telephone equipment (including, withoutlimitations, the INC, as defended below) in its “AS-IS” condition, and Tenantshall be solely responsible for contracting with a reliable third party vendorto inspect the INC periodically (the frequency of such inspections to bedetermined by such vendor based on this experience and professional judgment),and requiring such vendor to meet local and federal requirements fortelecommunications material and workmanship). Landlord shall not be liable to Tenant and Tenant waives all claimsagainst Landlord whatsoever, whether for personal injury, property damage, lossof use of the Premises, or otherwise, due to interruptions or failure oftelephone services to the Premises. Tenant hereby holds Landlord harmless and agrees to indemnify, protectand defend Landlord from and against any liability for any damage, loss orexpense due to any failure or interruption of telephone service to the Premisesfor any damage, loss or expense due to any failure or interruption of telephoneservice to the Premises for any reason. Tenant agrees to obtain loss of rental insurance adequate to cover anydamage, loss or expense occasioned by the interruption of telephone service.

 

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

 

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

 

                                                (ii)           Tenantshall not alter, modify, add to or disturb any telephone wiring in the Premisesor elsewhere in the Building without the Landlord’s prior written consent.  Tenant shall be liable to Landlord for anydamage to the telephone wiring in the Building due to the act, negligent orotherwise, of Tenant or any employee, contractor or other agent of Tenant.  Tenant shall have no access to the telephoneclosets within the Building, except in the manner and under proceduresestablished by Landlord.  Tenant shallpromptly notify Landlord of any actual or suspected failure of telephoneservice to the Premises.

 

                                                (iii)          Allcosts incurred by Landlord for the installation, maintenance, repair andreplacement of telephone wiring in the Building shall be included in OperatingExpenses.

 

                                                (iv)          Landlordmakes no warranty as to the quality, continuity or availability of thetelecommunications services in the Building, and Tenant hereby waives any claimagainst Landlord for any actual or consequential damages (including damages forloss of business) in the event Tenet’s telecommunications services in any wayare interrupted, damaged or rendered less effective, except to the extentcaused by the grossly negligent or willful act or omission by Landlord, itsagent or employees.  Tenant acknowledgesthat Landlord meets its duty of care to Tenant with respect to the Building INCby contracting with reliable third party vendor to assume responsibility forthe maintenance and repair thereof (which contract shall contain provisionsrequiring such vendor to inspect the INC periodically (the frequency of suchinspection sot be determined by such vendor based on its experience andprofessional judgment), and requiring such vendor to meet local and federalrequirements for telecommunications material and workmanship).  Subject to the foregoing, Landlord shall notbe liable to Tenant and Tenant waives all claims against Landlord whatsoever,whether for personal injury, property damage, loss of use of the Premises, orotherwise, due to (the interruption or failure of telephone services to thePremises.  Tenant hereby holds Landlordharmless and agrees to indemnify, protect and defend Landlord from and againstany liability for any damage, loss or expense due to any failure orinterruption of telephone service to the Premises for any reason.  Tenant agrees to obtain loss of rentalinsurance adequate to cover any damage, loss or expense occasioned by theinterruption of telephone service.

 

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

 
| **LANDLORD:**                                                        |                                                                                             |
|----------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|
|                                                                 |                                                                                             |   |
| **MARRIOT PLAZA ASSOCIATES L.P.,**  A California Limited Partnership |                                                                                             |
|                                                                 |                                                                                             |   |
| By:                                                                  | Menlo  Equities Associates IV LLC,  a California limited liability company,  Its General Partner |   |
|                                                                 |                                                                                             |   |
|                                                                 | By                                                                                               | Menlo  Equities LLC, a California Limited Liability Company  It’s Manager |   |
|                                                                 |                                                                                             |   |
|                                                                 |                                                                                             | By: | Diamant  Investments LLC |   |
|                                                                 |                                                                                             |   |   |   |
|                                                                 |                                                                                             |   | By: | Illegible |   |
|                                                                 |                                                                                             |   |   |   |   |
|                                                                 |                                                                                             |   | Its: | Member |   |
|                                                                 |                                                                                             |   |   |   |   |
|                                                                 |                                                                                             |   | Date: | 8/30/99 |   |

 

 

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**TENANT:**

** **

**COMMERCEBID.COM**

a Delaware corporation

 
| Signature: | /s/ Naomi  Golden Petrushka |
|------------|-----------------------------|
|       |                        |
| Name:      | Naomi Golden  Petrushka     |
|       |                        |
| Its:       | CFO                         |
|       |                        |
| Signature: | /s/ Liron  Petrushka        |
|       |                        |
| Name:      | Liron  Petrushka            |
|       |                        |
| Its:       | CEO                         |
|       |                        |
| Date:      | 8/26/99                     |

 

 

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**Exhibit A**

** **

**LEGAL DESCRIPTION OF THE PROPERTY**

 

Situated in the City of SantaClara

 

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

 

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

 

 

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**Exhibit B**

** **

**FLOOR PLANS**

 

 

 

[FLOORPLAN]

 

 

 

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**Exhibit C**

** **

**RULES AND REGULATIONS**

 

                1.             Thesidewalk, halls, passages, exits, entrances, elevators, and stairways of theBuilding shall not be obstructed by any of the tenants or used by them for anypurpose other than for ingress to and egress from their respective Premises.  The halls, passages, exits, entrances,elevators, and stairways are not for the general public, and Landlord shall inall cases retain the right to control and prevent access thereto of all personswhose presence in the judgment of Landlord would be Prejudicial to the safety,character, reputation and interests of the Building its tenants, provided thatnothing herein contained shall be construed to prevent ingress to and egressfrom Tenant’s Premises to persons with whom any tenant normally deals in theordinary course of its business, unless such persons are engaged in illegalactivities.  No tenant and no employeeor invitee of any tenant shall go upon the roof of the Building.

 

                2.             Nosign, placard, picture, name, advertisement or notice visible from the exteriorof any tenant’s Premises shall be inscribed, painted, affixed or otherwisedisplayed by any tenant on any part of the Building without the prior writtenconsent of Landlord.  Landlord willadopt and furnish to tenants general guidelines relating to signs inside theBuilding on the office floors.  Eachtenant shall conform to such guidelines, but may request approval of Landlordfor modifications, which approval will not be unreasonably withheld.  All approved signs or lettering on doorsshall be printed, painted, affixed or inscribed at the expense of the Tenant bya person approved by Landlord, which approval will not be unreasonablywithheld.  Material visible from outsidethe Building will not be permitted.

 

                3.             ThePremises shall not be used for the storage of merchandise held for sale to thegeneral public or for lodging.  Nocooking shall be done or permitted on the Premises, except that use by anytenant of food and beverage vending machines and Underwriters’ Laboratoryapproved microwave and toaster ovens and equipment for brewing coffee, tea, hotchocolate and similar beverages shall be permitted; provided that such use isin accordance with all applicable federal, state and city laws, codes,ordinances, rules and regulations.

 

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

 

                5.             Landlordwill furnish each tenant free of charge with two keys to each door lock in itsPremises.  Landlord may make areasonable charge for any additional keys. Tenants shall have the right to make keys.  No tenant shall change any lock without the express writtenconsent of the Lanlord.  The tenantsshall in each case furnish Landlord with a key for any such lock.  Each tenant, upon the termination of itstenancy, shall deliver to Landlord all keys to doors in the Building whichshall have been furnished to or made by the tenant.

 

                6.             Theelevator shall be available for use by all tenants in the Building.  The persons employed to move equipment in orout of the Building must be acceptable to Landlord.  Landlord shall have the right to prescribe the weight, size andposition of all equipment, materials, furniture or other property, brought intothe Building.  Heavy objects shall, ifconsidered necessary by Landlord, stand on wood strips of such thickness as isnecessary properly to distribute the weight. Landlord will not be responsible for loss of or damage to any suchproperty from any cause, and all damage done to the Building by moving ormaintaining such property shall be repaired at the expense of the tenant.

 

                7.             Notenant shall use or keep in the Premises or the Building any kerosene, gasolineor inflammable or combustible fluid or material other than limited quantitiesthereof reasonably necessary for the operation or maintenance of officeequipment, or, without Landlord’s prior approval, use any method of heating orair conditioning other than that supplied by Landlord.  No tenant shall use or keep or permit to beused or kept any foul or noxious gas or substance in the Premises, or permit orsuffer the Premises to be occupied or used in a manner offensive orobjectionable to Landlord or other occupants of the Building by reason ofnoise, odors or vibrations, or interfere in any way with other tenants or thosehaving business therein.

 

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

name and street address of theBuilding.

 

                9.             Landlordreserves the right to exclude from the Building between the hours of 6:00 P.M.and 8:00 A.M. and at all hours on Saturdays, Sundays and legal holidays allpersons who do not present a proper access card or other identification as anemployee of Tenant or who do not otherwise present proper authorization byTenant for access to the Premises. Tenant shall be responsible for all persons for whom it authorizesaccess and shall be liable to Landlord for all acts of such persons.  Landlord shall in no case be liable fordamages for any error with regard to the admission to or exclusion from theBuilding of any person.  In the case ofinvasion, mob, riot, public excitement or other circumstances rendering suchactions advisable in Landlord’s opinion. Landlord reserves the right to prevent access to the Building during thecontinuance of the same by such action as Landlord may deem appropriate.

 

                10.           Thedirectory of the Building will be provided for the display of the name andlocation of tenants.  Any additionalname which Tenant desires to have added to the directory shall be subject toLandlord’s approval and may be subject to a change therefor.

 

 

1

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                11.           Nocurtains, draperies, blinds, shutters, shades, screens or other coverings,hangings or decorations shall be attached to, hung or placed in, or used inconnection with any exterior window in the Building without the prior consentof Landlord.  If consented to byLandlord, such items shall be installed on the office side of the standardwindow covering and shall in no way be visible from the exterior of theBuilding.

 

                12.           Messengerservice and suppliers of bottled water, food, beverages and other products orservices shall be subjected to such reasonable regulations as may be adopted byLandlord.  So long as the time forpick-up and delivery of packages from and to the Premises is not materiallyincreased, Landlord may establish a central receiving station in the Building fordelivery and pick-up by all messenger services, and may limit delivery andpick-up at tenant Premises to Building personnel.

 

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

 

                14.           Thetoilets, urinals, wash bowls and other restroom facilities shall not be usedfor any purpose other than that for which they were constructed, no foreignsubstance of any kind whatsoever shall be thrown therein and the expense of anybreakage, stoppage or damage resulting from the violation of this rule shall beborne by the tenant who, or whose employees or invitees, shall have caused it.

 

                15.           Exceptwith the prior consent of the Landlord, no tenant shall sell, or permit thesale at retail, of newspapers, magazines, periodicals, theater tickets or anyother goods or merchandise to the general public in or on the Premises, in orfrom the Premises for the service or accommodation of occupants of any otherportion of the Building, nor shall the Premises of any tenant be used formanufacturing of any kind, or any business or activity other than thatspecifically provided for in such tenant’s lease.

 

                16.           Notenant shall install any antenna, loudspeaker, or any other device on the roofor exterior walls of the Building.

 

                17.           Thereshall not be used in any portion of the Building, by any tenant or itsinvitees, any hand trucks or other material handling equipment except thoseequipped with rubber tires and side guards unless otherwise approved byLandlord.

 

                18.           Eachtenant shall store its refuse within its Premises.  No material shall be placed in the refuse boxes or receptacles ifsuch material is of such nature that it may not be disposed of in the ordinaryand customary manner of removing and disposing of refuse in the City of SantaClara without being in violation of any law or ordinance governing suchdisposal.  All refuse disposals hall bemade only through entryways and elevators provided for such purposes and atsuch times as Landlord shall designate.

 

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

 

                20.           Smokingin all portions of the Building is prohibited, and each tenant shall cooperateto prevent the same.

 

                21.           Noobjects of any kind (including, without limitation, picture frames and cups)shall be placed on the interior window sills, chair rails, or mullions whichadjoin the exterior windows of the Building.

 

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

 

                23.           Therequirements of the tenants will be attended to only upon application bytelephone or in person at the office of the Landlord or Landlord’s designatedrepresentative.  Employees of Landlordshall not perform any work or do anything outside of their regular dutiesunless under special instructions from Landlord.

 

                24.           Subjectto the terms of the leases, Landlord may waive any one or more of the theseRules and Regulations for the benefit of any particular tenant or tenants, butno such waiver by Landlord shall be constructed as a waiver of such Rules andRegulations in favor of any other tenant or tenants, nor prevent Landlord fromthereafter enforcing any such Rules and Regulations against any or all of thetenants of the Building.

 

                25.           TheseRules and Regulations are in addition to, and shall not be construed to in anyway modify or amend, in whole or in part, the terms, covenants, agreements andconditions of any lease of Premises in the Building.

 

                26.           Subjectto the terms of the leases, Landlord reserves the right to make such other andreasonable rules and regulations as in its judgment may from time to time beneeded for the safety, care and cleanliness of the Building, and for thepreservation of good order therein.

 

 

2

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**EXHIBIT D**

** **

**WORK LETTER**

 

**(Tenant Improvements)**

 

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

 

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

 

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

 

**3.             Completion;Tenant Delay.**

 

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

 

“SubstantialCompletion” shall mean the earlier to occur of (i) Landlord’s delivery toTenant of a certificate of occupancy issued by the City of Santa Clara for thePremises, (ii) Tenant’s occupancy of all or part of the Premises, (iii) thedate that Landlord’s architect furnishes a certificate of substantialcompletion confirming that the Tenant improvements have been substantiallycompleted, subject to minor details of construction, decoration or mechanicaladjustment which do not unreasonably affect Tenant’s ability to do business inthe Premises, or (iv) the date upon which Tenant takes occupancy of thePremises.  Upon Substantial Completion,the Improvement Work shall be deemed “Substantially Complete” and possession ofthe Premises shall be deemed delivered to Tenant for all purposes under theLease.

 

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

 

                                (i)            Anyinterruption or interference in Landlord’s construction of the Improvement Workcaused by Tenant, its contractors or its vendors; or

 

                                (ii)           Tenant’sfailure to timely pay any amounts which Tenant is obligated to pay under thisWork Letter; or

 

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

 

then the date upon which the paymentof rental under the Lease shall commence shall be advanced by the cumulativeduration of such Tenant Delays.

 

 

1

----

 

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

 

|   | **LANDLORD:**                                                       |
|--------|---------------------------------------------------------------------|
|   |                                                                |
|   | **MARRIOT PLAZA ASSOCIATES L.P.,**A California  Limited Partnership |
|   |                                                                |
|   | By:                                                                 | Menlo  Equities Associates IV LLC,  a California limited liability company,  Its General Partner |
| Dated: | 8/30/99                                                             |   |   |
|   |                                                                | By | Menlo  Equities LLC, a California Limited Liability Company  It’s Manager |
|   |                                                                |
|   |                                                                | By: | Diamant  Investments LLC |
|   |                                                                |   |   |
|   |                                                                |   | By: | /s/ Richard  J. Holmstrom |
|   |                                                                |   |   | Richard J.  Holmstrom,  Member |
|        |                                                                     |  |  |  |  |  |

 

 
|   |   | **TENANT:**                |
|--------|--------|----------------------------|
|   |   |                       |
|   |   | **COMMERCEBID.com,  INC.** |
|   |   |                       |
| Dated: |   |                       | By:/s/ | [ILLEGIBLE] |
|   |   | Title:                     | CEO |
| Dated: |   |                       | By:/s/ | [ILLEGIBLE] |
|   |   | Title:                     | CEO |

 

 

2

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**SCHEDULE 1**

** **

**Premises Layout**

 

 

[FLOOR PLAN]

 

 

3

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| **Rusciano**     |   | **2020 Alello Ave, Suite B** |
|------------------|--------|------------------------------|
|             |   | **San Jose, CA 96111**       |
| **Construction** |   | **CA Lic. 715872**           |
|             |   | **408-360-8500**             |
| **Inc.**         |   | **Fax: 406-360-8612**        |

 

 

**SCHEDULE 2**

August 25, 1999

**CONTRACTOR’S BID**

 

Alan Webber

Menlo Equities Management Co,

2901 Tasman Dr. Suite 220

Santa Clara, CA 95054

 
| Project: | Suite 211  Reconfiguration |
|----------|----------------------------|
|     | 2901 Tasman  Dr.           |
|     | Santa Clara,  CA           |
| Quote #: | 203.02.03                  |

 

Dear Mr. Webber:

 

Rusciano Construction proposesto provide all materials, labor and equipment necessary to complete theabove-mentioned project as per the scope, clarifications, and exclusions listedbelow.  All work is to be done onstraight time.  Progress paymentbillings will be made on the first of each month and are due and payable within30 days of date of invoice.

 

Base Bid:               #32,005

 

# **Allowances: Included in Base Bid**

| City Permits  and Fees     | $2178 |
|----------------------------|-------|
| Architect and  Engineering | $1452 |

 

Alternate Add;Not Included in Base Bid

Demo and removal of approx.4000 SF of existing carpet and 850 if base on East Side of firewall of Suite211.                                                                                   $2080

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

SF.

$3,130

Scope:

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

•                    Demo approx. 20 if of 9’ partitionwall.

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

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

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

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

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

•                    Install 4 ea. Door and sidelightopenings in existing wall.

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

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

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

•                    Provide and install 5 ea. transferair registers and ductwork.

 

 

----

 
| **EAST BAY FLOORCOVERING, INC.** |   | **JOB ESTIMATE**   |   |   |
|----------------------------------|--------|--------------------|--------|--------|
| **221 F. Lewelling Blvd.**       |   |               |   |   |
| **SAN LORENZO, CA 94580**        |   | PHONE              |   | DATE   | 8/5/99 |
|                             |   |               |   |   |
| **(510)481-8444**                |   |               |
| **FAX(510)276-3631**             |   | JOB  NAME/LOCATION |
|                             |   |               |
| MENLO  EQUITIES                  |   | SUITE 211          |
|                             |   | 2901 TASMAN DR     |
| ALCAN                            |   | SANTA CLARA        |
|                             |   |               |

 

JOB DESCRIPTION:                                    Carpet — DesignWeave “windswept”DEMO EPT & BASE, PREP FLOORBASE-BURKE 4=

 

 

REVISED

425 x13.00 =5525

425 x 2.00 =$850

4=BASE = $1417

$7792.00

NEW TOTAL

8/26/99

CPTDESIGNWEAVE “WINDSWEPT”

COLOR —WEDGEWOOD 976-776

BASE 321-PINDIGO

 

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

 
| Customer: |   |   | Date: |   |
|-----------|--------|--------|-------|--------|

**NOTE:**The proposal may be withdrawn by us if not acceptedwithin 90 days.

 

 

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**EXHIBIT E**

 

**SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE**

 

                    ,19   

 
|   |   |
|--------|--------|
|   |   |
|   |   |
|   |   |

 

Re           2901 Tasman Drive

                Santa Clara, California

 

Ladies and Gentlemen:

 

Reference is made to thatcertain Lease, dated as of                                 ,19    , between                                 ,a California Limited partnership (“Landlord”), and the undersigned (hereinreferred to as the “Lease”).  A copy ofthe Lease [and all amendment thereto] is[are] attached hereto as ExhibitA.  At the request of Landlord inconnection with [State reasons for request for estoppel certificate          ], the undersigned herebycertifies to Landlord and to [State names of other parties requiringcertification    ] and each of yourrespective successors and assigns as follows:

 

                1. The undersigned is the tenant under the Lease.

 

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

 

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

 

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

 

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

 

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

 

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

 

                8. The undersigned has deposited the sum of $___ with Landlord as securityfor the performance of its obligations as tenant under the Lease, and noportion of such deposit has been applied by Landlord to any obligation underthe Lease.

 

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

 

The above certifications aremade to Landlord and Lender knowing that Landlord and Lender will rely thereonin accepting an assignment of the Lease.

 

Very truly yours,

 
|   |
|--------|
|   |
| By:    |   |
| Name:  |   |
| Title: |   |

 

 

----

 

**EXHIBIT F**

 

**COMMENCEMENT DATE CERTIFICATE**

 

This Commencement DateCertificate is entered into by Landlord and Tenant pursuant to Exhibit D of theLease.

 
| 1.     |   | (a) |   | Landlord:          |   | Marriott  Plaza Associates L.P., a California limited partnership |
|--------|--------|-----|--------|--------------------|--------|-------------------------------------------------------------------|
|   |   | (b) |   | Tenant:            |   | Commercebid.Com,  Inc.                                            |
|   |   | (c) |   | Lease:             |   | Office Lease  dated August 30, 1999 between Landlord and Tenant   |
|   |   | (d) |   | Premises:          |   | Suite 211                                                         |
|   |   | (e) |   | Building  Address: |   | 2901 Tasman  Drive, Santa Clara, California                       |

 

2.             **CONFIRMATION OF LEASECOMMENCEMENT.**

 

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

 

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

 

**LANDLORD:**

 

**MARRIOTTPLAZA ASSOCIATES L.P.,**

a California limitedpartnership

 
| By:    | Menlo  Equities Associates IV LLC, a California Limited Liability Company, |                                                         |
|--------|----------------------------------------------------------------------------|--------------------------------------------------------------|
|   | Its General  Partner                                                       |                                                         |
|   |                                                                       |                                                         |   |
|   | By:                                                                        | Menlo  Equities LLC, a California Limited Liability Company, |   |
|   |                                                                       | Its Manager                                                  |   |
|   |                                                                       |                                                         |   |
|   |                                                                       | By: Diamant  Investments LLC                                 |   |
|   |                                                                       |                                                         |   |   |
|   |                                                                       | By:                                                          | /s/ Richard  J. Holmstrom |   |
|   |                                                                       |                                                         | Richard J.  Holmstrom  Member |   |
|        |                                                                            |                                                              |  |  |  |

 

**TENANT:**

 

**COMMERCEBID.Com,**

a Delaware corporation

 
| Signature: |  /s/ LIRON PETRUSHKA |
|------------|---------------------------|
| Name:      | Liron  Petrushka          |
| Its:       | CEO                       |
|       |                      |
| Signature: |  /s/ NAOMI PETRUSHKA |
| Name:      | Naomi  Petrushka          |
| Its:       | CFO                       |
|       |                      |
| Date:      | 10/15/99                  |

 

 

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