exv10w59






 
Exhibit 10.59

OFFICE LEASE




701 GATEWAY




BROADWAY
701 GATEWAY FEE LLC,




A DELAWARE LIMITED LIABILITY COMPANY,




as Landlord,




and




OXIGENE,
INC.




a Delaware corporation,




(NASDAQ Listing Symbol: OXGN)




as Tenant.




 









 







OFFICE LEASE




     This
Office Lease (the “Lease”), dated as of the date set forth in Section 1 of
the Summary of Basic Lease Information (the “Summary”), below, is made by and between
BROADWAY 701 GATEWAY FEE, a Delaware limited liability company (“Landlord”), and OXIGENE,
INC. a Delaware corporation (“Tenant”).



SUMMARY OF BASIC LEASE INFORMATION




	 	 	 	 	 
	 	 	TERMS OF LEASE	 	DESCRIPTION
	1.

	 	Date:
	 	October 10, 2008
	 
	 	 	 	 
	2.

	 	Building:
	 	That certain office building having an address
of 701 Gateway Boulevard, South San Francisco,
California, and as further set forth in
Section 1.1.2 of this Lease.
	 
	 	 	 	 
	3.

	 	Premises:
	 	The Premises shall consist of the “Initial
Premises” and, upon the satisfaction of the
conditions set forth in Section 2.3, below,
the Initial Premises and the “Must Take
Premises” (as such terms are defined below).
	 
	 	 	 	 
	 

	 	 	 	The “Initial Premises” shall mean
approximately 7,038 rentable square feet of
space located on the second (2nd)
floor of the Building and commonly known as
Suite 210 in the configuration depicted in
Exhibit A.
	 
	 	 	 	 
	 

	 	 	 	The “Must Take Premises” shall mean
approximately 5,275 rentable square feet of
space located on the second (2nd)
floor of the Building, adjacent to the Initial
Premises, and commonly known as Suite 270 in
the configuration depicted in Exhibit A.
	 
	 	 	 	 
	4.

	 	Project:
	 	The Building is part of an office project
currently known as “701 Gateway.”
	 
	 	 	 	 
	5.

	 	Lease Term:
	 	Approximately Fifty Two (52) months.
	 
	 	 	 	 
	6.

	 	Lease Commencement Date:
	 	The earlier to occur of (i) the date upon
which Tenant first commences to conduct
business in the Initial Premises, and (ii) the
date upon which “Landlord’s Work” in the
Initial Premises has been “Substantially
Completed” (defined in Exhibit C) and physical
possession of the Initial Premises have been
delivered to Tenant in accordance with the
Work Letter.
	 
	 	 	 	 
	7.

	 	Must Take Commencement Date:
	 	 The earlier to occur of (i) the date upon
which Tenant first commences to conduct
business in the Must Take Premises, and (ii)
the date upon which “Landlord’s Work” in the
Must Take Premises has been “Substantially
Completed” (defined in Exhibit C) and physical
possession of the Must Take Premises has been
delivered to Tenant in accordance with the
terms and conditions of the Work Letter;
provided that the Must Take Commencement Date
shall not occur prior to January 1, 2009
unless Tenant in its sole discretion, elects
to accept delivery of the Must Take Premises
from Landlord prior to such date.
	 
	 	 	 	 
	8.

	 	Expiration Date:
	 	The fourth (4th) anniversary of the
Must Take Commencement Date, but in no event
later than April 30,
2013.
	 
	 	 	 	 
	9.

	 	Options to Extend:
	 	None.






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10. Base Rent:




     10.1 Base Rent for the Initial Premises:



	 	 	 	 	 	 	 
	 	 	 	 	 	 	Approximate Annual
	Lease Year	 	Annual Base Rent	 	Monthly Base Rent	 	Rate per RSF
	1
(“First Lease Year”
	 	$274,482.00	 	$22,873.50	 	$39.00
	2
	 	$282,716.52	 	$23,559.71	 	$40.17
	3
	 	$291,198.00	 	$24,266.50	 	$41.38
	4
	 	$299,934.00	 	$24,994.50	 	$42.62
	Months 49
through
Expiration
Date
	 	$308,932.08	 	$25,744.34	 	$43.90






     10.2 Base Rent for the Must Take Premises:



	 	 	 	 	 	 	 
	 	 	 	 	 	 	Approximate Annual 
	Lease Year	 	Annual Base Rent	 	Monthly Base Rent	 	Rate per RSF
	Must Take
Commencement
Date through end of
First Lease Year
	 	$205,725.00*	 	$17,143.75	 	$39.00
	2
	 	$211,896.72	 	$17,658.06	 	$40.17
	3
	 	$218,253.60	 	$18,187.80	 	$41.38
	4
	 	$224,801.16	 	$18,733.43	 	$42.62
	Months 49 through
Expiration Date
	 	$231,545.16	 	$19,295.43	 	$43.90








 




			
	*	 	Annual Base Rent for the Must Take Premises from the Must Take Commencement Date
through the end of the First Lease Year shall be prorated.





	 	 	 	 	 
	11.

	 	Rent Payment Address:
	 	Broadway 701 Gateway Fee LLC

PO Box 934273

Atlanta, Georgia 31193-4273
	 
	 	 	 	 
	12.

	 	Base Year:
	 	Calendar year 2009.
	 
	 	 	 	 
	13.

	 	Permitted Use.
	 	General office use, so long as such use is
consistent with all applicable Laws and with
the character of a first class office
building (the “Permitted Use”).
	 
	 	 	 	 
	14.

	 	Letter of
Credit/Security Deposit
Amount:
	 	$86,079.54 
	 
	 	 	 	 
	15.

	 	Parking Passes:
	 	Twenty four (24) for the Initial Premises
and seventeen (17) for the Must Take
Premises.
	 
	 	 	 	 
	16.

	 	Address of Tenant:
	 	OXiGENE, Inc.

230 Third Avenue

Waltham, MA 02451

Attention: Chief Financial Officer
	 
	 	 	 	 
	17.

	 	Landlord’s Address:
	 	Broadway 701 Gateway Fee LLC

c/o Broadway Partners

375 Park Avenue, 29th Floor

New York, New York 10152

Attention: National Leasing Counsel






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	 	 	 	And
	 
	 	 	 	 
	 

	 	 	 	Broadway 701 Gateway Fee LLC
 c/o Broadway Partners
 375 Park Avenue, 29th Floor
 New York, New York 10152

Attention: Asset Manager
	 
	 	 	 	 
	 

	 	 	 	And
	 
	 	 	 	 
	 

	 	 	 	Friedman & Solomon LLP
 9665 Wilshire Boulevard, Suite 810

Beverly Hills, California 90212
 Attention: Robert E.
Solomon, Esq.
	 
	 	 	 	 
	18.

	 	Broker(s):	 	 
	 
	 	 	 	 
	 

	 	 	 	Landlord Broker:

NAI BT Commercial

1350 Bayshore Highway, Suite 900

Burlingame, California 94010
	 
	 	 	 	 
	 

	 	 	 	Tenant Broker:

Cornish and Carey

901 Mariners Island Boulevard, Suite 125

San Mateo, California 94404
	 
	 	 	 	 
	19.

	 	Improvement Allowance:
	 	Two Hundred Forty Four Thousand Two Hundred Eighty Seven
Dollars ($244,287.00).






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ARTICLE 1

PREMISES, BUILDING, PROJECT, AND COMMON AREAS




     1.1 The Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the premises (the “Premises”) which are set forth in Section 3 of the Summary of Basic Lease
Information above (the “Summary”). The outline of the Premises is set forth in Exhibit A
attached hereto. Landlord and Tenant hereby acknowledge and agree that the rentable square footage
of the Premises shall be deemed to be as set forth in Section 3 of the Summary and that
the same shall not be subject to re-measurement or modification. The parties hereto agree that the
lease of the Premises is upon and subject to the terms, covenants and conditions herein set forth,
and Tenant covenants as a material part of the consideration for this Lease to keep and perform
each and all of such terms, covenants and conditions by it to be kept and performed and that this
Lease is made upon the condition of such performance. The parties hereto hereby acknowledge that
the purpose of Exhibit A is to show the approximate location of the Premises in the
“Building,” as that term is defined in Section 1.2, below, only, and such Exhibit is not
meant to constitute an agreement, representation or warranty as to the precise area of the
Premises or the specific location of the “Common Areas,” as that term is defined in Section
1.3, below, or the elements thereof or of the accessways to the Premises or the “Project,” as
that term is defined in Section 1.2, below. Except as specifically set forth in this Lease
and in the Work Letter attached hereto as
Exhibit C, if applicable (the “Work Letter”),
Landlord shall not be obligated to provide or pay for any improvement work or services related to
the improvement of the Premises or occupancy thereof by Tenant. Tenant also acknowledges that
neither Landlord nor any agent of Landlord has made any representation or warranty regarding the
condition of the Premises, the Building or the Project or with respect to the suitability of any
of the foregoing for the conduct of Tenant’s business and Tenant shall accept the Premise in its
“as-is” condition, except as specifically set forth in this Lease and the Work Letter. Subject in
each case to the “Substantial Completion” of the “Tenant Improvements” (as those terms are defined
in Work Letter attached hereto as Exhibit C), and Landlord’s completion of any punch list items
arising out of Landlord’s and Tenant’s walk-through inspection of the Tenant Improvements (as
required under the Work Letter), (a) the taking of possession of the Initial Premises by Tenant
shall conclusively establish that the Initial Premises and the Building were at such time in good
and sanitary order, condition and repair; and (b) the taking of possession of the Must Take
Premises by Tenant, in the condition required for the Must Take Commencement Date, shall
conclusively establish that the Must Take Premises were at such time in good and sanitary order,
condition and repair.



     Notwithstanding anything to the contrary set forth herein: (i) Landlord hereby covenants to
use commercially reasonable efforts to deliver the Initial Premises to Tenant with the Tenant
Improvements thereto substantially completed in accordance with the Work Letter no later than
thirty (30) days after mutual execution of this Lease (the “Estimated Initial Premises Delivery
Date”), and if Landlord fails to substantially complete the Tenant Improvements for the Initial
Premises and deliver the Initial Premises to Tenant on or before sixty (60) days after the
Estimated Initial Premises Delivery Date (the “Initial Premises Rent Credit Date”) for any reason
other than force majeure or Tenant Delays (as defined in the Work Letter), Landlord shall not be in
default but the Commencement Date shall be delayed one (1) day for each day of such delay until
Landlord delivers possession of the Initial Premises to Tenant in accordance with the requirements
of this Lease; provided however, that if Landlord fails to substantially complete the Tenant
Improvements for the Initial Premises and deliver the Initial Premises to Tenant within sixty (60)
days after the Initial Premises Rent Credit Date for any reason other than force majeure or Tenant
Delays, Landlord shall not be in default but Tenant may as its sole and exclusive remedy, upon
written notice to Landlord prior to the date that Landlord delivers possession of the Initial
Premises to Tenant in accordance with the requirements of this Lease, elect to terminate this
Lease, and upon any such termination this Lease shall be deemed void and of no further force and
effect, any obligations of Landlord to Tenant or of Tenant to Landlord shall be deemed cancelled,
and Landlord shall promptly return to Tenant any prepaid Rent or Letter of Credit then held by
Landlord; and (ii) Landlord hereby covenants to use commercially reasonable efforts to deliver the
Must Take Premises to Tenant (including, without limitation, if reasonably necessary, timely
instituting unlawful detainer proceedings against the current tenant of the Must Take Premises)
with the Tenant Improvements thereto substantially completed in accordance with the Work Letter no
later than March 1, 2009 (the “Estimated Must Take Premises Delivery Date”), and in the event that
Landlord has not gained possession of the Must Take Premises, and substantially completed the
Tenant Improvements in the Must Take Premises and delivered the Must Take Premises to Tenant on or
before May 1, 2009, for any reason other than force majeure or Tenant Delays (as defined in the
Work Letter), Landlord shall not be in default but Tenant shall be entitled to a day-for-day Rent
credit with respect to the Must Take Premises from and after the May 1, 2009 until Landlord
delivers possession of the Must Take Premises to Tenant in accordance with the requirements of this
Lease; provided, however, that if Landlord has not gained possession of the Must Take Premises, and
substantially completed the Tenant Improvements in the Must Take Premises and delivered the Must
Take Premises to Tenant on or before July 1, 2009, for any reason other than force majeure or
Tenant Delays (as defined in the Work Letter), Landlord shall not be in default but Tenant may as
its sole and exclusive remedy, in Tenant’s sole discretion and upon written notice to Landlord
prior to the date that Landlord delivers possession of the Must Take Premises to Tenant in
accordance with the requirements of this Lease, elect to terminate this Lease either in its
entirety or with respect to the Must Take Premises only; and in the event Tenant elects to
terminate this Lease with respect to the Must Take Premises only, Tenant’s occupancy of the Initial
Premises shall not be affected by such termination, and this Lease shall be amended as soon as
reasonably possible by Landlord and Tenant to delete the Must Take Premises from the Premises. Upon
any termination of the entire Lease resulting from Landlord’s failure to deliver the Must Take
Premises by the outside date set forth above, this Lease shall be deemed void and of no further
force and effect, any obligations of Landlord to Tenant or of Tenant to Landlord shall be deemed
cancelled (other than such obligations



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which specifically survive the termination of this Lease), and Landlord shall promptly return to
Tenant any prepaid Rent or Letter of Credit then held by Landlord.




     1.2 The Building and The Project. The Premises are a part of the building set forth
in Section 2 of the Summary (the “Building”). The term “Project,” as used in this Lease,
shall mean (i) the Building and the Common Areas, (ii) the land (which is improved with
landscaping, parking facilities and other improvements) upon which the Building and the Common
Areas are located, and (iii) at Landlord’s discretion, any additional real property, areas, land,
buildings or other improvements added thereto outside of the Project. Landlord shall have the
right from time to time in Landlord’s sole discretion, to convert office space in the Project to
retail and/or residential space, or to convert retail and/or residential space in the Project to
office space; provided that no such conversion shall materially affect Tenant’s rights under this
Lease or materially increase the costs of Tenant’s occupancy of the Premises.



     1.3 Common Areas. Tenant shall have the non-exclusive right to use in common with
other tenants in the Project, and subject to the Rules and Regulations set forth in Exhibit
D. those portions of the Project which are provided, from time to time, for use in common by
Landlord, Tenant and any other tenants of the Project (such areas, together with such other
portions of the Project designated by Landlord, are collectively referred to herein as the “Common
Areas”). The manner in which the Common Areas are maintained and operated shall be at the
reasonable discretion of Landlord and shall be consistent with the standards of maintenance and
operations for the Project in effect as of the Effective Date and the use thereof shall be subject
to such rules, regulations and restrictions as Landlord may make from time to time. Landlord
reserves the right to close temporarily, make alterations or additions to, or change the location
of elements of the Project and the Common Areas (provided that Landlord shall use commercially
reasonable measures not to materially and adversely affect Tenant’s access to or parking for the
Premises by such actions) and may temporarily close the Building or the Project in the event of
casualty, governmental requirements, the threat of an emergency such as terrorism, natural
disasters or acts of God, or if Landlord reasonably deems it necessary in order to prevent damage
or injury to person or property.



ARTICLE 2

LEASE TERM/MUST TAKE PREMISES




     2.1 Lease Term. The terms and provisions of this Lease shall be effective as of the
date of this Lease. The term of this Lease (the “Lease Term”) shall be as set forth in Section
5 of the Summary, shall commence on the date set forth in Section 6 of the Summary (the
“Commencement Date”), and shall expire on the date set forth in Section 8 of the Summary
(the “Expiration Date”) unless this Lease is sooner terminated as hereinafter provided. For
purposes of this Lease, the term “Lease Year” shall mean each consecutive twelve (12) month period
during the Lease Term, provided that the last Lease Year shall end on the Expiration Date. If
Tenant, with Landlord’s prior written approval, takes possession of the Premises prior to the
Commencement Date for the sole purpose of performing any improvements therein or installing
furniture, fixtures, equipment or other personal property of Tenant, such possession shall be
subject to all of the terms and conditions of the Lease, except that Tenant shall not be required
to pay Base Rent only with respect to the period of time prior to the Commencement Date during
which Tenant performs such work.



     2.2 Delay in Commencement Date. It is estimated by the parties that the Lease Term
for the Initial Premises will commence on thirty (30) days after the mutual execution of this
Lease and that the Lease Term for the Must Take Premises will commence on March 1, 2009 (in either
event, the “Estimated Commencement Date”). The Estimated Commencement Date is merely an estimate
of the Commencement Date and, consequently, Tenant agrees that Landlord shall have no liability to
Tenant for any loss or damage, nor shall Tenant be entitled to terminate or cancel this Lease if
the Lease Term does not commence by the Estimated Commencement Date for any reason whatsoever, and
the validity of this Lease shall not be impaired under such circumstances; subject, however, to
Tenant’s rights set forth in Section 1.1 above. In addition, Tenant acknowledges and agrees that
nothing contained herein shall prohibit Landlord from delivering the Initial Premises and/or Must
Take Premises to Tenant in accordance with the requirements of this Lease prior to the applicable
Estimated Commencement Date; provided, however, that in the event Landlord elects, in its sole and
absolute discretion, to deliver the Must Take Premises prior to January 1, 2009, such early
deliver shall not result in the Must Take Commencement Date occurring prior to such date unless
Tenant, in its sole discretion, elects to accept delivery of the Must Take Premises for
commencement of Tenant’s business operations therein prior to such date.



     2.3 Must Take Premises. The Initial Premises shall be expanded to include the Must
Take Premises on the terms and conditions set forth in this Section 2.3. The term of
Tenant’s lease of the Must Take Premises shall commence on the date that Landlord delivers
possession of the Must Take Premises to Tenant with Landlord’s Work in the Must Take Premises
Substantially Completed (the “Must Take Commencement Date”). Tenant acknowledges and agrees that
the Must Take Premises is currently leased to a third party (the “Existing Tenant”) which lease
(the “Existing Lease”) does not expire until December 31, 2008 and Landlord shall not commence
construction of the Landlord’s Work until the Existing Lease terminates and the Existing Tenant
vacates the Must Take Premises. Except as provided in Section 1.1 above, Landlord shall
have no liability to Tenant for any loss or damage, nor shall Tenant be entitled to terminate or
cancel this Lease if the Existing Tenant does not timely vacate the Must Take Premises, and the
validity of this Lease shall not be impaired under such circumstances. The term of Tenant’s lease
of the Must Take Premises shall expire on the Expiration Date. From and after the Must Take
Commencement Date, (a) all references in this Lease to the term “Premises” shall be deemed to refer
to the Initial Premises together with the Must Take Premises, (b) except as provided in this
Section 2.3, all terms and conditions of the Lease shall apply to the Must Take Premises as
though the Must Take Premises was originally part of the



2









 







Initial Premises, (c) the Base Rent for the Must Take Premises shall be as set forth in
Section 10.2 of the Summary, and (d) Tenant’s Pro Rata Share with respect to the Must Take
Premises shall be as set forth in Section 1.6 of Exhibit B to this Lease.
Additionally, Tenant acknowledges that Landlord has not made any representation or warranty with
respect to the condition of the Must Take Premises, the Building or the Project with respect to
the suitability or fitness of any of the same for the conduct of Tenant’s permitted use, its
business or for any other purpose except as specifically set forth elsewhere in this Lease or the
Work Letter.




     2.4 Commencement Date Memoranda. Within thirty (30) days following each of the Lease
Commencement Date and the Must Take Commencement Date, Landlord shall deliver to Tenant a notice
in the form as set forth in Exhibit E attached hereto with respect to the Initial Premises and the
Must Take Premises, respectively, as a confirmation only of the information set forth therein,
which Tenant shall execute and return to Landlord within ten (10) business days of receipt
thereof; provided, however, Tenant’s failure to execute and return such notice to Landlord within
such time shall be conclusive upon Tenant that the information set forth in such notice is as
specified therein.



     2.5 Pre-Term Possession. As the Tenant Improvements are constructed in the Initial
Premises and in the Must Take Premises by Landlord, Landlord shall notify Tenant when the
applicable portion of the Premises is ready for installation of Tenant’s furniture, trade
fixtures, equipment and cabling to support Tenant’s intended use and occupancy thereof at least
ten (10) business days prior to the applicable Commencement Date (the “Tenant’s Work”). Tenant may
thereupon enter the Premises for such purposes at its own risk, to make such improvements as
Tenant shall have the right to make, to install fixtures, supplies, inventory and other property
without interfering with Landlord’s Work, and Landlord shall reasonably cooperate with Tenant in
the performance of Landlord’s Work. Such entry shall be subject to all of the terms and conditions
of the Lease, other than the obligation to pay Rent with respect to the period of time prior to
the applicable Commencement Date.



ARTICLE 3

BASE RENT




     Tenant shall pay, without prior notice, demand, setoff or deduction, to Landlord or
Landlord’s agent at the address set forth in Section 11 of the Summary, or, at Landlord’s
option, at such other place as Landlord may from time to time designate in writing, by a check for
currency which, at the time of payment, is legal tender for private or public debts in the United
States of America, base rent (“Base Rent”) as set forth in Section 10 of the Summary,
payable in equal monthly installments as set forth in Section 10 of the Summary in advance
on or before the first (1st) day of each and every calendar month during the Lease
Term, without any abatement, setoff or deduction whatsoever. In accordance with Section
29.25, this Article 3 shall be construed as though the covenants herein between
Landlord and Tenant are independent and Tenant shall not be entitled to any setoff of the Rent or
other amounts owing to Landlord under this Article 3. The Base Rent for the Initial
Premises for the first full month of the Lease Term which occurs after the expiration of any free
rent period shall be paid at the time of Tenant’s execution of this Lease. If any Rent payment
date (including either the Lease Commencement Date or the Must Take Commencement Date) falls on a
day of the month other than the first day of such month or if any payment of Rent is for a period
which is shorter than one month, the Rent for any fractional month shall be calculated on a daily
basis for the period from the date such payment is due to the end of such calendar month or to the
end of the Lease Term at a rate per day which is equal to
l/30th of the applicable
monthly Rent. All other payments or adjustments required to be made under the terms of this Lease
that require proration on a time basis shall be prorated on the same basis.



ARTICLE 4

ADDITIONAL RENT




     In addition to paying the Base Rent specified in Article 3 of this Lease, Tenant shall
pay “Tenant’s Share” (as defined in
Exhibit B) of (a) the annual “Operating Expenses” (as
defined in Exhibit B) which are in excess of the amount of Operating Expenses applicable to
the “Base Year” (as defined in
Exhibit B).  and (b) the annual “Tax Expenses” (as defined in
Exhibit B) which are in excess of the amount of Tax Expenses applicable to the Base Year;
provided, however, that in no event shall any decrease in “Direct Expenses” (as defined in
Exhibit B) for any Expense Year below Direct Expenses for the Base Year entitle Tenant to
any decrease in Base Rent or any credit against sums due under this Lease. Such payments by Tenant,
together with any and all other amounts payable by Tenant to Landlord pursuant to the terms of this
Lease (other than Base Rent), are hereinafter collectively referred
to as the “Additional Rent”,
and the Base Rent and the Additional Rent are herein collectively referred to as “Rent.” All
amounts due under this Article 4 as Additional Rent shall be payable for the same periods
and in the same manner as the Base Rent or as otherwise specifically set forth in this Lease. The
obligations of Tenant to pay the Additional Rent provided for in this Article 4 shall
survive the expiration of the Lease Term for a period not to exceed one (1) year; provided,
however, that the one (1) year period shall not apply to assessments for Tax Expenses received by
Landlord after such one (1) year period.



ARTICLE 5

USE OF PREMISES




     5.1
Permitted Use.  Tenant shall use the Premises solely for the Permitted Use set
forth in Section 13 of the Summary and Tenant shall not use or permit the Premises or the Project
to be used for any other purpose or purposes whatsoever without the prior written consent of
Landlord, which may be withheld in Landlord’s sole discretion. Tenant shall, at its own cost and
expense, obtain and maintain any and all licenses,



3









 





permits, and approvals necessary or appropriate for its use, occupation and operation of the
Premises for the Permitted Use. Tenant’s inability to obtain or maintain any such license, permit
or approval necessary or appropriate for its use, occupation or operation of the Premises shall
not relieve it of its obligations under this Lease, including the obligation to pay Base Rent and
Additional Rent. Tenant further covenants and agrees that Tenant shall not use, or suffer or
permit any person or persons to use, the Premises or any part thereof for any use or purpose
contrary to provisions of the Rules and Regulations set forth in Exhibit D. attached
hereto (as the same may be modified or rescinded from time to time), or in violation of laws of
the United States of America, the state in which the Project is located, the ordinances, rules,
regulations or requirements of the local municipal or county governing body or other lawful
authorities having jurisdiction over the Project, or all recorded covenants, conditions, and
restrictions now or hereafter affecting the Project including, without limitation, any certificate
of occupancy, any such laws, ordinances, regulations or requirements relating to hazardous
materials or substances, as those terms are defined by applicable laws now or hereafter in effect
(collectively, the “Law(s)”). A violation of the Rules and Regulations by Tenant shall be deemed a
default under this Article 5 Tenant shall not do or permit anything to be done in or about
the Project which will in any way damage the reputation of the Project or obstruct or interfere
with the rights of other tenants or occupants of the Project, or injure or annoy them or use or
allow the Project to be used for any improper, unlawful or objectionable purpose, nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Premises.




     5.2 Hazardous Substances. Neither Tenant, any of the officers,
partners, contractors, subcontractors, consultants, licensees, agents, concessionaires, subtenants, servants, employees,
customers, guests, invitees or visitors of Tenant (collectively, the “Tenant’s Agents”) nor any
other person shall store, place, generate, manufacture, refine, handle, or locate on, in, under or
around the Premises, the Building or Project any “Hazardous Substance” (as defined below), except
for storage, handling and use of reasonable quantities and types of cleaning fluids and office
supplies in the Premises in the ordinary course and the prudent conduct of Tenant’s business in
the Premises. As used in this Lease, the term “Hazardous Substance” shall mean and include any
chemical, material, element, compound, solution, mixture, sub-stance or other matter of any kind
whatsoever which is now or later designated, classified, listed or regulated under any Law,
statute, ordinance, rule, regulation, order or ruling of any agency of the State, the United
States Government or any local governmental authority, including, without limitation, asbestos,
petroleum, petroleum hydrocarbons and petroleum based products, urea formaldehyde foam insulation,
polychlorinated biphenyls (“PCBs”) and freon and other chlorofluorocarbons.



ARTICLE 6

SERVICES AND UTILITIES




     6.1 Standard Tenant Services. Landlord shall provide the following services on all
days (unless otherwise stated below) during the Lease Term.



          (a) Subject to limitations imposed by all governmental rules, regulations, orders and
guidelines applicable thereto, Landlord shall provide heating, ventilation and air conditioning
(“HVAC”) for use in the Premises from 8:00 A.M. to 6:00 P.M. Monday through Friday (collectively,
the “Building Hours”), except for the date of observation of New Year’s Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and, at Landlord’s discretion, other
locally or nationally recognized holidays days recognized by unions as holidays (collectively, the
“Holidays”). If Tenant desires HVAC service outside the hours set forth above (“Overtime
Periods”), Tenant shall deliver written or electronic notice to the Building office during normal
Building office hours requesting such service at least four (4) hours prior to the time Tenant
requests such service to be provided. If Landlord furnishes HVAC service during Overtime Periods,
Tenant shall pay to Landlord the then established Building rates for such service during Overtime
Periods in the Building upon demand thereof.




          (b) Landlord shall redistribute or furnish electricity to or for the use of Tenant in the
Premises for the operation of Tenant’s ordinary and customary lighting and office equipment in the
Premises reasonably necessary for typical general office use and in compliance with applicable
codes. Tenant shall bear the cost of replacement of lamps, starters and ballasts for non-Building
standard lighting fixtures within the Premises.




          (c) Landlord shall provide potable water from the regular Building outlets for drinking,
lavatory and toilet purposes in the Building Common Areas.




          (d) Landlord shall provide janitorial services to the Premises five (5) days per week in a
manner consistent with other comparable buildings in the vicinity of the Building, except the date
of observation of the Holidays, in and about the Premises and window washing services in a manner
consistent with other comparable buildings in the vicinity of the Building. Tenant shall pay to
Landlord, as additional rent, the reasonable costs incurred by Landlord in removing from the
Building any of Tenant’s refuse and rubbish to the extent exceeding the amount of refuse and
rubbish usually generated by a tenant that uses the Premises for ordinary office purposes. Tenant,
at Tenant’s expense, shall exterminate the portions of the Premises that Tenant uses for the
storage, preparation, service or consumption of food against infestation by insects and vermin
regularly and, in addition, whenever there is evidence of infestation. Tenant shall engage persons
to perform such exterminating that are approved by Landlord, which approval Landlord shall not
unreasonably withhold, condition or delay. Tenant shall cause such persons to perform such
exterminating in a manner that is reasonably satisfactory to Landlord. Tenant shall comply with any
refuse disposal program (including, without limitation, any waste recycling program) that Landlord
imposes reasonably after having given Tenant reasonable advance notice of the effectiveness thereof
or that is required by applicable Laws.




          (e) Landlord shall provide nonexclusive, non-attended automatic passenger elevator service
during the Building Hours only (excluding Holidays and subject to Force Majeure), but shall have
one elevator




4









 








available at all other times for nonexclusive non-attended automatic passenger elevator service,
and if the Building include an escalator, Landlord also shall provide nonexclusive, non-attended
automatic passenger escalator service during Building Hours only.




          (f) Landlord shall provide nonexclusive freight elevator service subject to scheduling by
Landlord. Tenant shall pay to Landlord, as additional rent, an amount calculated at the hourly
rates that Landlord charges from time to time therefor, within ten (10) days after Landlord’s
giving to Tenant an invoice therefore.




     6.2 Overstandard Tenant Use. If Tenant uses water, electricity, heat or air
conditioning materially in excess of that supplied by Landlord pursuant to Section 6.1 of
this Lease, Tenant shall pay to Landlord, upon billing, the cost of such excess consumption, the
cost of the installation, operation, and maintenance of equipment which is installed in order to
supply such excess consumption, and the cost of the increased wear and tear on existing equipment
caused by such excess consumption; and Landlord may install devices to separately meter any such
material increased use and in such event Tenant shall pay the increased cost directly to Landlord,
on demand, at the rates charged by the public utility company furnishing the same, including the
cost of such additional metering devices. Tenant’s use of electricity shall never exceed the
capacity of the feeders to the Project or the risers or wiring installation.



     6.3 Interruption of Use. Except as otherwise provided in this Section 6.3 below, and
to the extent permitted by applicable Law, Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent or otherwise, for failure to furnish or delay in furnishing any
service (including telephone, telecommunication, water and sewer, HVAC, and electrical services),
or for any diminution in the quality or quantity thereof, when such failure or delay or diminution
is occasioned, in whole or in part, by breakage, repairs, replacements, or improvements, by any
strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other
fuel at the Building or Project after reasonable effort to do so, by any riot or other dangerous
condition, emergency, accident or casualty whatsoever, by act, omission or default of Landlord or
other parties, or by any other cause; and such failures or delays or diminution shall never be
deemed to constitute an eviction (constructive or otherwise) or disturbance of Tenant’s use and
possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations
under this Lease. Tenant hereby waives any existing or future Law, permitting the termination of
this Lease due to an interruption, failure or inability to provide any services. Furthermore,
Landlord shall not be liable under any circumstances for a loss of, or injury to, property or for
injury to, or interference with, Tenant’s business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a failure to furnish
any of the services or utilities as set forth in this Article 6. Landlord may comply with
voluntary controls or guidelines promulgated by any governmental entity relating to the use or
conservation of energy, water, gas, light or electricity or the reduction of automobile or other
emissions without creating any liability of Landlord to Tenant under this Lease. Notwithstanding
the foregoing, in the event that Tenant is prevented from using, and does not use, the Premises or
any portion thereof, as a result of (i) any repair, maintenance or alteration performed by
Landlord, or which Landlord failed to perform as required by this Lease, which materially and
adversely interferes with Tenant’s use of or ingress to or egress from the Premises; or (ii) any
failure by Landlord to provide the services or utilities specified to be provided by Landlord in
this Lease as a result of the negligence or willful misconduct of Landlord, its employees, agents
or contractors; or (iii) the presence of any Hazardous Substance brought on the Premises by
Landlord, its employee, agents or contractors, to the extent such presence materially and
adversely interferes with Tenant’s use of or ingress to or egress from the Premises (any such set
of circumstances as set forth in items (i) through (iii), above, to be known as an “Abatement
Event”), then Tenant shall give Landlord Notice of such Abatement Event, and if such Abatement
Event continues for ten (10) consecutive business days after Landlord’s receipt of any such Notice
(the “Eligibility Period”), then as Tenant’s
sole remedy vis-à-vis such Abatement Event, Tenant
may elect to abate or reduce, as the case may be, the Base Rent and Tenant’s Share of Direct
Expenses after expiration of the Eligibility Period for such time that Tenant continues to be so
prevented from using, and does not use, the Premises, or a portion thereof, in the proportion that
the rentable area of the portion of the Premises that Tenant is prevented from using, and does not
use (“Unusable Area”), bears to the total rentable area of the Premises. Such right to abate Base
Rent and Tenant’s Share of Direct Expenses shall be Tenant’s sole and exclusive remedy at law or
in equity for an Abatement Event. Landlord and Tenant hereby acknowledge that, in addition to the
abatement rights set forth in this Section 6.3, Tenant’s additional abatement rights following an
event of damage and destruction or condemnation are provided in Articles 11 and 13 of this Lease,
which are not affected by this Section 6.3.



ARTICLE 7

REPAIRS




     7.1 Tenant’s Obligations. Except as otherwise provided in this Lease, Landlord
shall have no maintenance obligation concerning the Premises and no obligation to make any repairs or
replacements, in, on, or to the Premises. Subject to Landlord’s obligations under Section
7.2 below, and Article 11 and Article 13 hereof, Tenant shall, at Tenant’s own
expense, pursuant to and in accordance with the terms of this Lease, including without limitation
Article 8 hereof, keep the non-structural components of the Premises, including all
improvements, fixtures and furnishings therein, and the floor or floors of the Building on which
the Premises are located, in good order, repair and condition at all times during the Lease Term
(including, electrical and mechanical systems not considered part of the “Building Systems” (as
defined below) that have been installed for the exclusive use and benefit of Tenant such as
additional HVAC equipment, hot water heaters, electronic, data, phone, and other telecommunications
cabling and related equipment, and security or telephone systems for the Premises). Tenant shall
not commit or allow to be committed any waste on any portion of the Premises. In addition, Tenant
shall, at Tenant’s own expense, but under the supervision and subject to the prior written approval
of Landlord, and within any reasonable period of time specified by Landlord, pursuant to the terms
of this Lease, including without




5











 





limitation Article 8 hereof, promptly and adequately repair all damage to the Premises and
replace or repair all damaged, broken, or worn fixtures and appurtenances, except for damage
caused by ordinary wear and tear; provided however, that, at Landlord’s option, or if Tenant fails
to make such repairs within the time and in the manner required by this Lease, Landlord may, but
need not, make such repairs and replacements, and Tenant shall pay Landlord upon demand the cost
thereof, including a percentage of the cost thereof sufficient to reimburse Landlord for all
overhead, general conditions, fees and other costs or expenses arising from Landlord’s involvement
with such repairs and replacements forthwith upon being billed for same. Landlord may, but shall
not be required to, enter the Premises at all reasonable times to make such repairs, alterations,
improvements or additions to the Premises or to the Project or to any equipment located in the
Project as Landlord shall desire or deem necessary or as Landlord may be required to do by
governmental or quasi-governmental authority or court order or decree.




     7.2
Landlord’s Obligations. Subject to
Article 11 and Article 13
hereof, and except for Tenant’s maintenance and repair obligations set forth in Section 7.1 above, Landlord shall maintain
and make all necessary repairs to and replacements of (a) the “Building Systems” that service the
Premises, (b) the structural portions of the Building, (c) the roof of the Building, and (d)
within a reasonable period following receipt of notice of the need for repair and replacement from
Tenant, the exterior walls and windows of the Premises. Landlord shall have sole responsibility
for the repair or replacement of any and all defects or defective components, patent or latent, of
the Landlord’s Work (for a period of one (1) year after the Lease Commencement Date with respect
to the Initial Premises and for a period of one (1) year after the Must Take Commencement Date
with respect to the Must Take Premises), the Building Systems and the structural portions of the
Building, and any and all defects, latent or patent, attributable to Landlord’s repairs to or
replacement of any Building System or any structural component of the Building. The term “Building
Systems” shall mean the service systems of the Building, including, without limitation, the
mechanical, gas, steam, electrical, sanitary, HVAC, elevator, plumbing, and life-safety systems of
the Building up to the point of connection of localized distribution to the Premises (it being
understood that the Building Systems shall not include any systems that Tenant installs in the
Premises). Nothing contained in this Section 7.2 shall require Landlord to maintain or
repair the systems within the Premises that distribute within the Premises electricity, HVAC or
water. Except as provided in Article 11, there shall be no abatement of Rent, nor shall
there be any liability of the “Landlord Parties” (as defined below), by reason of any injury to,
or damage suffered by Tenant, including without limitation, any inconvenience to, or interference
with, Tenant’s business or operations arising from the making of, or failure to make, any
maintenance or repairs, alterations or improvements in or to any portion of the Building and/or
the Project. Tenant hereby waives the benefit of any Laws granting it the right to make repairs at
Landlord’s expense, to place a lien upon the property of Landlord and/or upon Rent due Landlord,
or the right to terminate this Lease or withhold Rent on account of any Landlord default
(including without limitation, the failure of Landlord to make repairs). No provision of this
Lease shall be construed as obligating Landlord to perform any repairs, alterations or
improvements to the Premises or the Project except as otherwise expressly agreed to be performed
by Landlord pursuant to the provisions of this Lease.



ARTICLE 8

ADDITIONS AND ALTERATIONS




     8.1 Landlord’s Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes in or to the Premises or any mechanical, plumbing or HVAC
facilities or systems pertaining to the Premises (collectively, the “Alterations”) without first
procuring the prior written consent of Landlord to such Alterations. Landlord’s consent to
Alternations shall be requested by Tenant not less than thirty (30) days prior to the commencement
thereof, and which consent shall not be unreasonably withheld by Landlord, provided it shall be
deemed reasonable for Landlord to withhold its consent to any Alteration which affects the
structural portions or the Building Systems or is visible from the exterior of the Building or
Common Areas or requires access to areas outside the Premises. Notwithstanding the foregoing,
Tenant shall not be required to obtain Landlord’s consent for repainting, recarpeting, installing
systems, furniture or other alterations, tenant improvements, alterations or physical additions to
the Premises which are cosmetic in nature totaling less than Twenty Five Thousand Dollars ($25,000)
in any single instance or series of related alterations performed within a six-month period
(provided that Tenant shall not perform any improvements, alterations or additions to the Premises
in stages as a means to subvert this provision), in each case provided that (a) Tenant delivers to
Landlord written notice thereof, a list of contractors and subcontractors to perform the work (and
certificates of insurance for each such party) and any plans and specifications therefor prior to
commencing any such Alterations (for informational purposes only so long as no consent is required
by Landlord as required by this Lease), (b) the installation thereof does not require the issuance
of any certificate of occupancy, building permit or other governmental approval, or involve any
core drilling or the configuration or location of any exterior walls of the Building, and (c) such
Alterations will not affect the structural portions or the systems or equipment of the Building, or
be visible from the exterior of the Building or Common Areas or require access to the areas outside
the Premises. The construction of the initial improvements to the Premises shall be governed by the
terms of the Work Letter and not the terms of this Article 8.



     8.2 Manner of Construction. Landlord may impose, as a condition of its consent to any
and all Alterations or repairs of the Premises or about the Premises, such requirements as
Landlord in its sole discretion may deem desirable, including, but not limited to, the requirement
that (a) Tenant utilize for such purposes only contractors, subcontractors, materials, mechanics
and materialmen selected by Tenant from a list provided and approved by Landlord, (b) subject to
the following sentence, upon Landlord’s request, Tenant shall, at Tenant’s expense, remove such
Alterations upon the expiration or any early termination of the Lease Term, (c) Tenant secure,
prior to commencing any Alterations, at Tenant’s sole expense, a completion and lien indemnity
bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure
the lien-free completion of such Alterations and naming Landlord as a co-obligee, and (d) all
Alterations conform in terms of quality and



6









 




style to the Building’s standards established by Landlord from time to time. In the event that
Tenant desires to determine whether or not it shall be responsible for removing any Alteration it
proposes to construct or have constructed in the Premises, Tenant shall send a notice in writing
to Landlord, at the time it requests Landlord’s consent to any Alteration, requesting that
Landlord inform it whether or not Tenant will have the responsibility for removing the proposed
Alteration upon the expiration or earlier termination of the Lease Term and restoring the Premise
to the condition existing prior to the installation of the Alteration, normal wear and tear
excepted; and (y) in the event that Landlord responds to Tenant in writing in the affirmative,
Tenant shall have the obligation to remove the proposed Alteration upon the expiration or earlier
termination of the Lease Term and to restore the Premise to the condition existing prior to the
installation of the Alteration, normal wear and tear excepted, or (z) in the event that Landlord
fails to respond within fifteen (15) days after Tenant’s request for such determination, Tenant
shall not be obligated to remove the proposed Alteration upon the expiration or earlier
termination of this Lease. If such Alterations will involve the use of or disturb Hazardous
Substances existing in the Premises, Tenant shall comply with Landlord’s rules and regulations
concerning such Hazardous Substances. Tenant shall construct such Alterations and perform such
repairs in a good and workmanlike manner, in conformance with any and all applicable Laws and
pursuant to a valid building permit or other governmental approval issued by the city or county,
as applicable, in which the Project is located, all in conformance with Landlord’s construction
rules and regulations as established from time to time. In the event Tenant performs any
Alterations in the Premises which require or give rise to governmentally required changes to the
“Base Building,” as that term is defined below, then Landlord shall, at Tenant’s expense, make
such changes to the Base Building. The “Base Building” shall include the structural portions of
the Building, and the public restrooms, Building Systems and the systems and equipment located in
the internal core of the Building on the floor or floors on which the Premises are located. In
performing the work of any such Alterations, Tenant shall have the work performed in such manner
so as not to obstruct access to the Project or any portion thereof, by any other tenant of the
Project, and so as not to obstruct the business of Landlord or other tenants in the Project.
Tenant shall not use (and upon notice from Landlord shall cease using) contractors, services,
workmen, labor, materials or equipment that, in Landlord’s reasonable judgment, would disturb
labor harmony with the workforce or trades engaged in performing other work, labor or services in
or about the Building or the Common Areas. All portions of the work involving excessive noise or
inconvenience to other users of the Project shall be done after Building Hours. In addition to
Tenant’s obligations under Article 9 of this Lease, upon completion of any Alterations,
Tenant agrees to deliver to the Project management office a reproducible copy of the “as built”
drawings of the Alterations in CADD format as well as all permits, approvals and other documents
issued by any governmental agency in connection with the Alterations.




     8.3 Payment for Improvements. If payment is made directly to contractors, Tenant
shall comply with Landlord’s requirements for final lien releases and waivers in connection with
Tenant’s payment for work to contractors. Whether or not Tenant orders any work directly from
Landlord, Tenant shall pay to Landlord an amount equal to three percent (3%) of the cost of such
work to compensate Landlord for all overhead, general conditions, fees and other costs and
expenses arising from Landlord’s involvement with such work. Tenant shall pay promptly to
Landlord, upon demand, all out-of-pocket costs actually incurred by Landlord in connection with
Tenant’s Alterations, including costs incurred in connection with (a) Landlord’s review of the
Alterations (including review of requests for approval thereof) and (b) the provision of Building
personnel during the performance of any Alteration, to operate elevators or otherwise to
facilitate Tenant’s Alterations.



     8.4 Construction Insurance. In addition to the requirements of Article 10 of
this Lease, in the event that Tenant makes any Alterations, prior to the commencement of such
Alterations, Tenant shall provide Landlord (a) with evidence that Tenant carries “Builder’s All
Risk” insurance in an amount reasonably approved by Landlord covering the construction of such
Alterations, and (b) certificates of, (1) worker’s compensation insurance in amounts not less than
the statutory limits (covering all persons to be employed by Tenant, and Tenant’s contractors and
subcontractors, in connection with such Alterations), and (2) commercial general liability
insurance (including property damage and bodily injury coverage), in each case in customary form,
and in amounts that are not less than Three Million Dollars ($3,000,000) with respect to general
contractors and One Million Dollars ($1,000,000) with respect to subcontractors, naming the
Landlord, its lender, if any, and its property manager as additional insureds, it being understood
and agreed that all of such Alterations shall be insured by Tenant pursuant to Article 10
of this Lease immediately upon completion thereof.



     8.5 Supplemental HVAC Installations. Tenant shall not have the right to install a
supplementary HVAC system from the Premises without Landlord’s consent, which consent shall not be
unreasonably withheld or delayed. In no event shall any vents or louvers associated with any
supplementary HVAC system be installed on the exterior of the Building. Notwithstanding anything to
the contrary contained herein, Landlord hereby acknowledges and agrees that Tenant shall have the
right, at its sole cost and expense, to use the supplementary HVAC system currently located and
installed in the server closet in the Must-Take Premises during the Lease Term, provided, however,
that Tenant acknowledges and agrees that it is accepting such supplementary HVAC system in its
as-is, where-is condition and that Landlord has not made any representations or warranties of any
kind with respect to such supplementary HVAC system, and provided further, that, in the event that
either (a) there is no supplementary HVAC located in the server closet in the Must-Take Premises or
(b) the supplementary HVAC located in the server closet in the Must-Take Premises is insufficient,
in Tenant’s reasonable opinion, to satisfy Tenant’s needs, then Tenant shall have the right, at
Tenant’s sole cost and expense, to install a supplementary HVAC unit in either the Initial Premises
or the Must-Take Premises, subject to Landlord’s prior written approval of plans and specifications
for same.



     8.6 Federal Visual Artists’ Rights Act of 1990. Tenant agrees that Tenant will not
install, affix, add or paint in or on, nor permit, any work of visual art (as defined in the
Federal Visual Artists’ Rights Act of



7









 




1990 or any successor law of similar import) or other Alterations to be installed in or on, or
affixed, added to, or painted on, the interior or exterior of the Premises, or any part thereof,
which work of visual art or other Alterations would, under the provisions of the Federal Visual
Artists’ Rights Act of 1990, or any successor law of similar import, require the consent of the
author or artist of such work or Alterations before the same could be removed, modified, destroyed
or demolished.




ARTICLE 9

COVENANT AGAINST LIENS




     Tenant shall keep the Project and Premises free from any liens or encumbrances arising out of
the work performed, materials furnished or obligations incurred by or on behalf of Tenant, and
shall protect, defend, indemnify and hold the Landlord Parties harmless from and against any
Claims arising out of same or in connection therewith. Tenant shall give Landlord notice at least
ten (10) days prior to the commencement of any such work on the Premises (or such additional time
as may be necessary under applicable Laws) to afford Landlord the opportunity of posting and
recording appropriate notices of non-responsibility or other applicable notices. Tenant shall
discharge and release any such lien or encumbrance by bond or otherwise within twenty (20) days
after notice by Landlord, and if Tenant shall fail to do so, Landlord may pay the amount necessary
to discharge and release such lien or encumbrance, without being responsible for investigating the
validity thereof. The amount so paid shall be deemed Additional Rent under this Lease payable upon
demand, without limitation as to other remedies available to Landlord under this Lease. Nothing
contained in this Lease shall authorize Tenant to do any act which shall subject Landlord’s title
to the Project or Premises to any liens or encumbrances whether claimed by operation of Law or
express or implied contract. Any claim to a lien or encumbrance upon the Project or Premises
arising in connection with any such work or respecting the Premises not performed by or at the
request of Landlord shall be null and void, or at Landlord’s option shall attach only against
Tenant’s interest in the Premises and shall in all respects be subordinate to Landlord’s title to
the Project, Building and Premises. Landlord hereby acknowledges and agrees that any and all of
Tenant’s movable furniture, furnishings, equipment and trade fixtures at the Premises
(collectively, “Tenant’s Property”) may be financed by a third-party lender or lessor (an
“Equipment Lienor”), and to the extent so financed Landlord hereby (a) agrees to waive any rights
to Tenant’s Property, and (b) agrees to recognize the rights of any such Equipment Lienor, subject
to and in accordance with a commercially reasonable waiver agreement to be entered into by and
between Landlord and the Equipment Lienor following request by Tenant. Tenant shall pay Landlord’s
reasonable attorneys’ fees and costs in negotiating any such waiver agreement to be entered into
by and between Landlord and the Equipment Lienor.



ARTICLE 10

INDEMNIFICATION AND INSURANCE




     10.1 Indemnification and Waiver. To the extent not prohibited by law and except as
otherwise specifically provided herein, Tenant hereby assumes all risk of damage to property or
injury to persons in, upon or about the Premises from any cause whatsoever and agrees that
Landlord, its property manager, managing agents, investors, officers, partners, subpartners,
members, managers, lenders (including, without limitation, any trustee, mortgagee or holder of any
trust indenture, deed of trust or mortgage which now or hereafter encumbers the Building and/or
Project), ground lessors and their respective officers, agents, servants, employees, and
independent contractors (collectively, “Landlord Parties”) shall not be liable for, and are hereby
released from any responsibility for, any damage either to person or property or resulting from
the loss of use thereof, which damage is sustained by Tenant or by other persons claiming through
Tenant. To the extent permitted under applicable Law, and subject to the waiver of subrogation set
forth in Section 10.5 below, Tenant shall indemnify, defend, protect, and hold harmless
the Landlord Parties from any and all losses, costs, damages, actions, causes of actions,
proceedings, liens, fines, penalties, expenses and liabilities (including without limitation court
costs and reasonable attorneys’ fees incurred in connection with the proceeding whether at trial
or on appeal) (collectively, “Claims’) incurred in connection with or arising from any cause in,
on or about the Premises during the Lease Term, any violation of any of Laws during the Lease
Term, including, without limitation, any environmental Laws, any negligent acts or omissions of
Tenant or of any person claiming by, through or under Tenant, or of the contractors, agents,
servants, employees, invitees, guests or licensees of Tenant or any such person, in, on or about
the Project or any breach of the terms of this Lease, either prior to, during, or after the
expiration of the Lease Term. However, notwithstanding the foregoing, Tenant shall not be required
to indemnify and/or hold any of the Landlord Parties harmless from any Claims to the extent
resulting from the negligence or willful misconduct of any of the Landlord Parties, except to the
extent Landlord is covered for any such Claims as an additional insured under Tenant’s liability
insurance required to be maintained under Section 10.3 below. Should Landlord be named as
a defendant in any suit brought against Tenant in connection with or arising out of Tenant’s
occupancy of the Premises, Tenant shall pay to Landlord its costs and expenses incurred in such
suit, including without limitation, its actual professional fees such as appraisers’, accountants’
and attorneys’ fees. The provisions of this Section 10.1 shall survive the expiration or
sooner termination of this Lease.



     10.2 Tenant’s Compliance With Landlord’s Fire and Casualty Insurance. Tenant shall, at
Tenant’s expense, comply with all insurance company requirements pertaining to the use of the
Premises; provided that such requirements shall not interfere with Tenant’s use of the Premises for
the Permitted Use and shall be consistent with insurance company requirements generally applicable
to the South San Francisco market. If Tenant’s conduct or use of the Premises for any use other
than the Permitted Use causes any increase in the premium for such insurance policies then Tenant
shall reimburse Landlord for any such increase as Additional Rent. Tenant, at Tenant’s expense,
shall comply with all rules, orders, regulations or requirements of the American Insurance
Association (formerly the National Board of Fire Underwriters) and with any similar body.



8









 





     10.3 Tenant’s Insurance. Tenant shall maintain the following coverages in the
following amounts:



          (a) Commercial General Liability Insurance payable on an “occurrence” rather than a “claims
made” basis covering the insured against claims of bodily injury, personal injury and property
damage (including loss of use thereof) arising out of Tenant’s operations, and contractual
liabilities (covering the performance by Tenant of its indemnity agreements, but subject to the
limitations on coverage set forth below) containing coverage at least as broad as that provided
under the then most current Insurance Services Office (ISO) commercial general liability insurance
form which provides the broadest coverage, including a Broad Form endorsement covering the
insuring provisions of this Lease, for limits of liability not less than:




	 	 	 	 	 	 	 
	Bodily Injury and

	 	$3,000,000 each occurrence
	 	Personal Injury
	 	$3,000,000 each occurrence
	Property Damage 

Liability

	 	$5,000,000 annual aggregate
	 	     Liability
	 	$5,000,000 annual aggregate

    0% Insured’s participation






          (b) Physical Damage Insurance covering (i) all office furniture, business and trade fixtures,
office equipment, free-standing cabinet work, movable partitions, merchandise and all other items
of Tenant’s property on the Premises installed by, for, or at the expense of Tenant, (ii) all
improvements made to the Premises by Landlord pursuant to the terms of the Work Letter, and (iv)
all other Alterations made to the Premises by or on behalf of Tenant. In no event shall Tenant be
obligated to insure the Base Building, the Building Systems or the leasehold improvements in and
to the Premises which existed in the Premises as of the Commencement Date (the “Original
Improvements”). As long as Tenant is not in Default under this Lease, Tenant may elect to
self-insure its personal property and trade fixtures located in the Premises. Such insurance shall
be written on an “all risks” of physical loss or damage basis, for the full replacement cost value
(subject to reasonable deductible amounts) new without deduction for depreciation of the covered
items and in amounts that meet any co-insurance clauses of the policies of insurance and shall
include coverage for damage or other loss caused by fire or other peril including, but not limited
to, vandalism and malicious mischief, terrorism, earthquake sprinkler leakage, theft, water damage
of any type, including sprinkler leakage, bursting or stoppage of pipes, and explosion, and
providing business interruption coverage sufficient to pay Base Rent and Tenant’s Share of Direct
Expenses for a period of one year, and having a deductible amount, if any, not in excess of
$25,000.




          (c) Employer’s Liability or other similar insurance pursuant to all applicable state and
local statutes and regulations with limits of no less than $1,000,000.00.




          (d) Worker’s Compensation as required by the Laws of the State where the Building is located
with the following minimum limits of liability: Coverage A — statutory benefits; Coverage B —
$1,000,000 per accident and disease.




          (e) Comprehensive Automobile Liability insuring bodily injury and property damage arising
from all owned, non-owned and hired vehicles, if any, with minimum limits of liability of
$1,000,000 per accident.




     10.4 Form of Policies. The minimum limits of policies of insurance required of Tenant
under this Lease shall in no event limit the liability of Tenant under this Lease. Such insurance
shall (i) name Landlord Parties, and any other party the Landlord so specifies who has a security
interest in the Project and/or Landlord’s direct or indirect interests therein, as an additional
insured; (ii) specifically cover the liability assumed by Tenant under this Lease, including, but
not limited to, Tenant’s obligations under Section 10.1 of this Lease; (iii) be issued by
an insurance company having a rating of not less than A-VIII in Best’s Insurance Guide or which is
otherwise acceptable to Landlord and authorized to do business in the State where the Building is
located; (iv) be primary insurance as to all claims thereunder and provide that any insurance
carried by Landlord is excess and is non-contributing with any insurance requirement of Tenant; (v)
be in form and content reasonably acceptable to Landlord, and (vi) provide that said insurance
shall not be canceled or coverage changed unless thirty (30) days’ prior written notice (10 days
for non-payment of premiums) shall have been given to Landlord and any mortgagee of Landlord
(provided that if Tenant’s insurance carrier is only willing to endeavor to provide such advance
notice, such requirement shall not be a Tenant default under this Lease). Tenant shall deliver
certificates thereof to Landlord on or before the Commencement Date and at least thirty (30) days
before the expiration dates thereof. In the event Tenant shall fail to procure such insurance, or
to deliver such certificate, Landlord may, at its option, procure such policies for the account of
Tenant, and the cost thereof shall be paid to Landlord within five (5) days after delivery to
Tenant of bills therefor. Tenant shall have the right to provide the casualty insurance required by
this Article 10 pursuant to blanket policies, but only if such blanket policies expressly
provides, on a per occurrence basis, that a loss that relates to any other location does not impair
or reduce the level of protection available for the Premises below the amount required by this
Lease. Tenant may not self-insure against any risks required to be covered by insurance provided by
Tenant hereunder without Landlord’s prior written consent. Tenant has the right to satisfy Tenant’s
obligation to carry liability insurance with an umbrella insurance policy if such umbrella
insurance policy contains an aggregate per location endorsement that provides the required level of
protection for the Premises.



     10.5 Subrogation. Landlord and Tenant intend that their respective property loss risks
shall be borne by reasonable insurance carriers to the extent above provided, and Landlord and
Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance
carriers in the event of a property loss to the extent that such coverage is agreed to be provided
hereunder. The parties each hereby waive all rights and claims against each other for such losses,
and waive all rights of subrogation of their respective insurers, for damage to its properties and
loss of business (specifically including loss of rent by Landlord and business interruption by
Tenant) as a result of the acts or omissions of the other party or the other party’s employees,
agents, or contractors (specifically



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including the negligence of either party or its employees, agents, or contractors and the
intentional misconduct of the employees, agents, or contractors of either party), to the extent
any such claims are covered by the workers’ compensation, employer’s liability, property, rental
income, business income, or extra expense insurance required to be maintained by Landlord and
Tenant pursuant to this Lease, or other property insurance that either party may carry at the time
of an occurrence, provided such waiver of subrogation shall not affect the right to the insured to
recover thereunder. The parties agree that their respective insurance policies are now, or shall
be, endorsed such that the waiver of subrogation shall not affect the right of the insured to
recover thereunder, so long as no material additional premium is charged therefor.




     10.6 Additional Insurance Obligations. Tenant shall carry and maintain during the
entire Lease Term, at Tenant’s sole cost and expense, increased amounts of the insurance required
to be carried by Tenant pursuant to this Article 10 and such other reasonable types of
insurance coverage and in such reasonable amounts covering the Premises and Tenant’s operations
therein, as may be reasonably requested by Landlord but in no event shall such increased amounts
of insurance or such other reasonable types of insurance be in excess of that generally required
by landlords of buildings of similar age and condition as the Building located in the vicinity of
the Project in South San Francisco; provided, further, however, that in no event may Landlord
increase the amounts of the insurance required to be carried by Tenant hereunder more than once in
any three (3) year period.



     10.7 Landlord’s Insurance. During the Lease Term, Landlord shall obtain and keep in
full force and effect insurance against loss or damage by fire and other casualty to the Building,
to the extent insurable on commercially reasonable terms under then available standard forms of
“all-risk” insurance policies, in an amount equal to the replacement value thereof or, at
Landlord’s option, in such lesser amount as will avoid co-insurance (such insurance being referred
to herein as “Landlord’s Property Policy”), and with deductible amounts reasonably selected by
Landlord, as well as such other insurance as reasonably deemed necessary by Landlord. Tenant
acknowledges that (i) Landlord’s Property Policy may encompass rent insurance, (ii) the risks that
Landlord’s Property Policy covers may include, without limitation, fire, war, terrorism,
environmental matters, and flood, and (iii) Landlord may also obtain a commercial general
liability insurance policy.



ARTICLE 11

DAMAGE AND DESTRUCTION




     11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify Landlord
of any damage to the Premises resulting from fire or any other casualty (“Casualty”). If the (a)
Premises, (b) any Common Areas serving or providing access to the Premises, or (c) Building
Systems servicing the Premises shall be damaged by Casualty, and Landlord or Tenant does not elect
to terminate this Lease in accordance with the terms below, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other matters beyond
Landlord’s reasonable control, and subject to all other terms of this Article 11 and all
applicable Laws, restore the damaged portions of the Base Building, such Common Areas and/or such
Building Systems. Such restoration shall be to substantially the same condition of the Base
Building and the Common Areas prior to the Casualty, except for modifications required by zoning
and building codes and other Laws or by the holder of a mortgage on the Building or Project or any
other modifications to the Common Areas deemed desirable by Landlord, provided that access to the
Premises and any common restrooms serving the Premises shall not be materially impaired. Upon the
occurrence of any Casualty to the Premises, and provided that this Lease is not terminated by
Landlord or Tenant pursuant to the express provisions of this Lease, upon notice (the “Landlord
Repair Notice”) to Tenant from Landlord, Tenant shall assign to Landlord (or to any party
designated by Landlord) all insurance proceeds payable to Tenant under Tenant’s insurance required
under Section 10.3 of this Lease, and Landlord shall also repair any injury or damage to
the Tenant Improvements and the Original Improvements installed in the Premises and shall return
such Tenant Improvements and Original Improvements to their original condition; provided that if
the cost of such repair by Landlord exceeds the amount of insurance proceeds received by Landlord
from Landlord’s insurance carrier and from Tenant’s insurance carrier, as assigned by Tenant, the
cost of such repairs shall be paid by Tenant to Landlord prior to Landlord’s commencement of
repair of the damage. In the event that Landlord does not deliver the Landlord Repair Notice
within thirty (30) days following the date the casualty becomes known to Landlord, Landlord shall
assign to Tenant all insurance proceeds payable to Landlord with respect to the Original
Improvements and Tenant shall, at its sole cost and expense, repair any injury or damage to the
Tenant Improvements and the Original Improvements installed in the Premises and shall return such
Tenant Improvements and Original Improvements to their original condition. In such case, Tenant
may use its insurance proceeds for such purpose. Whether or not Landlord delivers a Landlord
Repair Notice, prior to the commencement of construction, Tenant shall submit to Landlord, for
Landlord’s review and approval, all plans, specifications and working drawings relating thereto,
and Landlord shall select the contractors to perform such improvement work. Landlord shall not be
liable for any inconvenience to Tenant or its visitors, or injury to Tenant’s business resulting
in any way from such damage or the repair thereof; provided however, that if such Casualty shall
have damaged the Premises or Common Areas necessary to Tenant’s occupancy, Landlord shall allow
Tenant a proportionate abatement of Rent during the time and to the extent the Premises are unfit
for occupancy for the purposes permitted under this Lease, and not occupied by Tenant as a result
thereof; provided, further, however, that if the damage or destruction is due to the act or
omission of Tenant or any of its agents, employees, contractors, invitees or guests, Tenant shall
be responsible for any reasonable, applicable insurance deductible (which shall be payable to
Landlord upon demand).



     11.2 Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1 of
this Lease, Landlord may elect not to rebuild and/or restore the Premises, Building and/or Project,
and instead terminate this Lease, by notifying Tenant in writing of such termination within sixty
(60) days after the date of discovery of the



10









 





damage, such notice to include a termination date giving Tenant sixty (60) days to vacate the
Premises, but Landlord may so elect only if the Building or Project shall be damaged by Casualty
or cause, whether or not the Premises are affected, and one or more of the following conditions is
present: (i) in Landlord’s reasonable judgment, repairs cannot reasonably be completed within one
hundred eighty (180) days after the date of discovery of the damage (when such repairs are made
without the payment of overtime or other premiums); (ii) the holder of any mortgage on the
Building or Project or ground lessor with respect to the Building or Project shall require that
the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall
terminate the ground lease, as the case may be; (iii) the damage is not fully covered by
Landlord’s insurance policies; (iv) Landlord decides to rebuild the Building or Common Areas so
that they will be substantially different structurally or architecturally; (v) the damage occurs
during the last twenty four (24) months of the Lease Term; or (vi) the Project is substantially
damaged so that, in Landlord’s reasonable judgment, substantial reconstruction of the Project will
be required.




     11.3 Tenant’s Termination Right. If a portion of the Premises, Building Systems
servicing the Premises or Common Areas providing access to the Premises is damaged by Casualty
such that Tenant is prevented from conducting its business in the Premises in a manner reasonably
comparable to that conducted immediately before such Casualty and Landlord estimates that the
damage caused thereby cannot be repaired within twelve (12) months after the date of discovery of
such damage (the “Repair Period“), or if the repairs are not reasonably likely to be completed
until the last nine (9) months of the Lease Term have commenced, then Tenant may terminate this
Lease by delivering written notice to Landlord of its election to terminate within thirty (30)
days after Landlord delivers to Tenant a good faith estimate (the “Damage Notice”) of the time
needed to repair the damage caused by such Casualty. If neither party elects to terminate this
Lease following a Casualty pursuant to the terms of this Article 11, and if Landlord does
not complete the restoration of the Premises within the greater of (a) twelve (12) months
following the Casualty or (b) sixty (60) days after the time period estimated by Landlord to
repair the damage caused by such Casualty as specified in the Damage Notice, as the same may be
extended by delays caused by Tenant, its agents or employees, Tenant may terminate this Lease by
delivering written notice (“Damage Termination Notice”) to Landlord within ten (10) days following
the expiration of such twelve (12) month or 60-day period, as applicable (as the same may be
extended as set forth above) and prior to the date upon which Landlord substantially completes
such restoration. Such termination shall be effective as of the date specified in Tenant’s Damage
Termination Notice (but not earlier than thirty (30) days nor later than ninety (90) days after
the date of such notice) as if such date were the date fixed for the expiration of the Lease Term.
If Tenant fails to timely give such Damage Termination Notice, Tenant shall be deemed to have
waived its right to terminate this Lease, time being of the essence with respect thereto.



     11.4 Waiver of Statutory Provisions. The provisions of this Lease, including this
Article 11, constitute an express agreement between Landlord and Tenant with respect to
any and all damage to, or destruction of, all or any part of the Premises, the Building or the
Project, and any statute or regulation of the State where the Building is located with respect to
any rights or obligations concerning damage or destruction in the absence of an express agreement
between the parties, and any other statute or regulation, now or hereafter in effect, shall have
no application to this Lease or any damage or destruction to all or any part of the Premises, the
Building or the Project. The rights given Tenant under this Article 11 are in lieu of and
override any rights that Tenant may have by statute or under other applicable Laws.



ARTICLE 12

NONWAIVER




     No provision of this Lease shall be deemed waived by either party hereto unless expressly
waived in a writing signed thereby. The waiver by either party hereto of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach
of same or any other term, covenant or condition herein contained. The subsequent acceptance of
Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, regardless of Landlord’s knowledge of such preceding
breach at the time of acceptance of such Rent. No acceptance of a lesser amount than the Rent
herein stipulated shall be deemed a waiver of Landlord’s right to receive the full amount due, nor
shall any endorsement or statement on any check or payment or any letter accompanying such check or
payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord’s right to recover the full amount due. No receipt of monies by Landlord from
Tenant after an event of default shall in any way alter the length of the Lease Term or of Tenant’s
right of possession hereunder, or after the giving of any notice shall reinstate, continue or
extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it
being agreed that after the service of notice or the commencement of a suit, or after final
judgment for possession of the Premises, Landlord may receive and collect any Rent due, and the
payment of said Rent shall not waive or affect said notice, suit or judgment.



ARTICLE 13

CONDEMNATION




     If the whole or any part of the Project shall be taken by power of eminent domain or
condemned by any competent authority for any public or quasi-public use or purpose, or if any
adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such
authority in such manner as to require the use, reconstruction or remodeling of any part of the
Premises, Building or Project, or if Landlord shall grant a deed or other instrument in lieu of
such taking by eminent domain or condemnation, Landlord shall have the option to terminate this
Lease effective as of the date possession is required to be surrendered to the authority. If more
than



11









 




twenty-five percent (25%) of the rentable square feet of the Premises is taken, or if access to
the Premises is impaired to the extent that it substantially affects operation of Tenant’s
business in the Premises, in each case for a period in excess of one hundred eighty (180) days or
for a period which extends into the last nine (9) months of the Lease Term, Tenant shall have the
option to terminate this Lease effective as of the date possession is required to be surrendered
to the authority. Tenant shall not because of such taking assert any claim against Landlord or the
authority for any compensation because of such taking and Landlord shall be entitled to the entire
award or payment in connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for any taking of Tenant’s personal property and fixtures
belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the
terms of this Lease, and for moving expenses, so long as such claims do not diminish the award
available to Landlord, its ground lessor with respect to the Building or Project or its mortgagee,
and such claim is payable separately to Tenant. All Rent shall be apportioned as of the date of
such termination. If any part of the Premises shall be taken, and this Lease shall not be so
terminated, the Rent shall be proportionately abated. No rental abatement shall be granted Tenant
for a loss of parking spaces or for the loss of any other portion of the Common Areas, Tenant
recognizing that Tenant’s right to use parking spaces and the Common Areas in common with
Landlord’s other tenants does not vest in Tenant any leasehold or other ownership interest in any
of the parking spaces or Common Areas. Notwithstanding anything to the contrary contained in this
Article 13, in the event of a temporary taking of all or any portion of the Premises for a
period of one hundred eighty (180) days or less, then this Lease shall not terminate but the Base
Rent and the Additional Rent shall be abated for the period of such taking in proportion to the
ratio that the amount of rentable square feet of the Premises taken bears to the total rentable
square feet of the Premises. Landlord shall be entitled to receive the entire award made in
connection with any such temporary taking.




ARTICLE 14

ASSIGNMENT AND SUBLETTING




     14.1 Transfers. Tenant shall not (whether directly or indirectly or voluntarily or
involuntarily or by operation of Law or otherwise), without the prior written consent of Landlord,
assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise
transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this
Lease or any interest hereunder by operation of Law, sublet the Premises or any part thereof,
amend or modify any sublease that is consummated in accordance with the terms of this Article
14, permit a subtenant under a sublease that is consummated in accordance with the terms of
this Article 14 to further sublease the Premises or any part thereof or to assign the
subtenant’s interest under any such sublease in whole or in part by express assignment or by
operation of Law or by other means, permit the Premises, or any portion thereof to be use for desk
space, mailing privileges or otherwise, or enter into any license or concession agreements or
otherwise permit the occupancy or use of the Premises or any part thereof by any persons other
than Tenant and its employees and contractors (all of the foregoing are hereinafter sometimes
referred to collectively as “Transfers” and any person to whom any Transfer is made or sought to
be made is hereinafter sometimes referred to as a “Transferee”). If Tenant desires Landlord’s
consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the “Transfer
Notice”) shall include (i) the proposed effective date of the Transfer, which shall not be less
than thirty (30) days nor more than one hundred eighty (180) days after the date of delivery of
the Transfer Notice, (ii) a description of the portion of the Premises to be transferred (the
“Subject Space”), (iii) all of the terms of the proposed Transfer and the consideration therefor,
including calculation of the “Transfer Premium”, as that term is defined in Section 14.3
below, in connection with such Transfer, the name and address of the proposed Transferee, and an
executed copy of all documentation effectuating the proposed Transfer, and (iv) current financial
statements of the proposed Transferee certified by an officer, partner or owner thereof, business
credit and personal references and history of the proposed Transferee and any other information
required by Landlord. Any Transfer made without Landlord’s prior written consent shall, at
Landlord’s option, be null, void and of no effect, and shall, at Landlord’s option, constitute a
default by Tenant under this Lease. Whether or not Landlord consents to any proposed Transfer,
Tenant shall not be released from any liability or obligations under this Lease and Tenant shall
pay Landlord’s review and processing fees, as well as any reasonable professional fees (including,
without limitation, attorneys’, accountants’, architects’, engineers’ and consultants’ fees)
incurred by Landlord (collectively, the “Transfer Review Fees”), within thirty (30) days after
written request by Landlord not to exceed $2,500.00 per proposed Transfer. Concurrently with
delivering a Transfer Notice to Landlord, Tenant shall deliver to Landlord an amount equal to
$1,000.00, which amount constitutes an advance against the Transfer Review Fees. Tenant shall not
structure any proposed Transfer in such a way as to subvert Landlord’s consent rights, recapture
rights and/or rights to receive the “Transfer Premium” (as defined below).



     14.2 Landlord’s Consent. Landlord shall not unreasonably withhold its consent to any
proposed sublease or assignment constituting a Transfer of the Subject Space to the Transferee on
the terms specified in the Transfer Notice. Tenant shall indemnify, defend and hold harmless
Landlord from any and all Claims involving any third party or parties who claim they were damaged
by Landlord’s wrongful withholding or conditioning of Landlord’s consent.



     14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition thereto
which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of
any “Transfer Premium,” as that term is defined in this Section 14.3. as and when received
by Tenant from such Transferee. “Transfer Premium” shall mean all Rent, Additional Rent or other
consideration payable by such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the Transfer on a per
rentable square foot basis if less than all of the Premises is transferred, after deducting the
reasonable expenses incurred by Tenant for (i) any free base rent reasonably provided to the
Transferee, (ii) any brokerage commissions, legal fees and architectural fees in connection with
the Transfer, and (iii) in the case of any



12









 





sublease, any actual costs incurred by Tenant in separately demising the subleased space.
“Transfer Premium” shall also include, but not be limited to, key money, bonus money or other cash
consideration paid by Transferee to Tenant in connection with such Transfer, and any payment in
excess of fair market value for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such
Transfer. In the calculations of the Rent (as it relates to the Transfer Premium calculated under
this Section 14.3). and the rent charged by Tenant to the Transferee (the “Transferee’s
Rent”) the Rent paid during each annual period for the Subject Space and the Transferee’s Rent
shall be computed after adjusting such rent to the actual effective rent, taking into
consideration any and all leasehold concessions granted in connection therewith, including, but
not limited to, any rent credit and tenant improvement allowance. For purposes of calculating any
such effective rent all such concessions shall be amortized on a straight-line basis over the
relevant term.




     14.4 Landlord’s Option as to Recapture Space. Notwithstanding anything to the
contrary contained in this Article 14, Landlord shall have the option, by giving written
notice to Tenant within thirty (30) days after receipt of any Transfer Notice, to recapture the
Subject Space. Such recapture notice shall cancel and terminate this Lease with respect to the
Subject Space as of the later of (i) the date stated in the Transfer Notice as the effective date
of the proposed Transfer, and (ii) ninety (90) days following the giving of the recapture notice,
until the last day of the term of the Transfer as set forth in the Transfer Notice (or at
Landlord’s option, shall cause the Transfer to be made to Landlord or its agent, in which case the
parties shall execute the Transfer documentation promptly thereafter). In the event of a recapture
by Landlord, if this Lease shall be canceled with respect to less than the entire Premises, the
Rent reserved herein shall be prorated on the basis of the number of rentable square feet retained
by Tenant in proportion to the number of rentable square feet contained in the Premises, and this
Lease as so amended shall continue thereafter in full force and effect, and upon request of either
party, the parties shall execute written confirmation of the same. Landlord shall be permitted, at
Landlord’s sole cost and expense, to construct or cause to be constructed a demising wall
separating that portion of the Premises recaptured by Landlord from that portion of the Premises
retained by Tenant; provided that Landlord shall endeavor to minimize the impact on Tenant’s
business in the Premises arising from any such construction performed during normal business
hours. If Landlord declines, or fails to elect in a timely manner, to recapture, sublease or take
an assignment of the Subject Space under this Section 14.4, then, Tenant shall be entitled to
proceed to transfer the Subject Space to the proposed Transferee, subject to provisions of this
Article 14.



     14.5 Effect of Transfer. No Transfer relating to this Lease or agreement entered into
with respect thereto, whether with or without Landlord’s consent, shall relieve Tenant or any
guarantor of the Lease from any liability or obligation under this Lease, including, without
limitation, in connection with the Subject Space. Landlord or its authorized representatives shall
have the right at all reasonable times to audit the books, records and papers of Tenant relating
to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium
respecting any Transfer shall be found understated, Tenant shall, within ten (10) days after
demand, pay the deficiency, and if understated by more than two percent (2%), Tenant shall pay
Landlord’s costs of such audit.



     14.6 Additional Transfers. For purposes of this Lease, the term “Transfer” shall also
include (a) any change, transfer, sale, pledge or hypothecation in twenty-five percent (25%) or
more of the equity or ownership interests in or assets of Tenant, (b) the dissolution, merger,
consolidation or reorganization of Tenant, or (c) the transfer of “Control” (as defined below),
however accomplished, whether in a single transaction or in a series of unrelated or related
transactions. The term “Control” shall mean the possession of power to direct or cause the
direction of the day-to-day operations and/or the management and policy of Tenant, whether through
the ownership of voting securities, by statute or by contract.



     14.7 Permitted Transfers. Notwithstanding anything to the contrary contained in this
Article 14, an assignment or subletting of all or a portion of the Premises (a “Permitted
Transfer”) to an affiliate of Tenant (an entity which is controlled by, controls, or is under
common control with, Tenant, an “Affiliate”), shall not require Landlord’s written consent under
this Article 14, provided that Tenant gives fifteen (15) days prior notice of any such
assignment or sublease and promptly supplies Landlord with any documents or information requested
by Landlord regarding such assignment or sublease or such affiliate, and further provided that
such assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this
Lease. “Control,” as used in this Section 14.7, shall mean the ownership, directly or
indirectly, of at least fifty-one percent (51%) of the voting securities of, or possession of the
right to vote, in the ordinary direction of its affairs, of at least fifty-one percent (51%) of
the voting interest in, any person or entity.



     14.8 Occurrence of Default. Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any Transfer,
Landlord shall have the right to: (i) treat such Transfer as cancelled and repossess the Subject
Space by any lawful means, or (ii) require that such Transferee attorn to and recognize Landlord as
its landlord under any such Transfer. If Tenant shall be in default under this Lease, Landlord is
hereby irrevocably authorized, as Tenant’s agent and attorney-in-fact, to direct any Transferee to
make all payments under or in connection with the Transfer directly to Landlord (which Landlord
shall apply towards Tenant’s obligations under this Lease) until such default is cured. Such
Transferee shall rely on any representation by Landlord that Tenant is in default hereunder,
without any need for confirmation thereof by Tenant. Upon any assignment, the assignee shall assume
in writing all obligations and covenants of Tenant thereafter to be performed or observed under
this Lease. No collection or acceptance of rent by Landlord from any Transferee or the posting or
listing of any name other than that of Tenant (whether on the door or exterior wall of the
Premises, lobby directory, elevator or elsewhere) shall be deemed a waiver of any provision of this
Article 14 or the approval of any Transferee or a release of Tenant from any obligation
under this



13









 





Lease, whether theretofore or thereafter accruing. In no event shall Landlord’s enforcement of any
provision of this Lease against any Transferee be deemed a waiver of Landlord’s right to enforce
any term of this Lease against Tenant or any other person. If Tenant’s obligations hereunder have
been guaranteed, Landlord’s consent to any Transfer shall not be effective unless the guarantor
also consents in writing to such Transfer.




     14.9 Transfer Taxes. Tenant shall pay any transfer taxes (and other similar charges
and fees) that any governmental authority imposes in connection with any Transfer (including,
without limitation, any such transfer taxes, charges or fees that a governmental authority imposes
in connection with Landlord’s exercising Landlord’s rights to recapture the Subject Space in
accordance with Section 14.4 above.



     14.10 Additional Occupants. Notwithstanding any contrary provision of this Lease,
Tenant may, upon written notice to Landlord, permit up to a total of ten percent (10%) of the
Premises to be occupied by (a) licensees and vendors providing “out-sourced” services to Tenant’s
business operation in the Premises, and (b) persons performing services pursuant to a joint
venture or other business alliance with Tenant (each, a “Permitted Occupant” and collectively, the
“Permitted Occupants”); provided, however, (i) such Permitted Occupant shall not occupy a
separately demised portion of the Premises which contains an entrance to such portion of the
Premises other than the primary entrance to the Premises; (ii) all Permitted Occupants shall be of
a character and reputation consistent with the first-class quality of the Building and the
Project; and (iii) such occupancy shall not be a subterfuge by Tenant to avoid its obligations
under this Lease, or the restrictions on Transfers pursuant to Article 14 of this Lease. Tenant
shall, within ten (10) days following the entry into the premises of any Permitted Occupant,
supply Landlord with the name of any such Permitted Occupant. Any occupancy of the Premises by a
Permitted Occupant shall not be deemed a Transfer of this Lease. Notwithstanding the foregoing, no
such occupancy shall relieve Tenant from any obligations or liability under this Lease.



ARTICLE 15

SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES




     15.1 Surrender of Premises. No act or thing done by Landlord or any agent or employee
of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a
surrender of the Premises unless such intent is specifically acknowledged in writing by Landlord.
The delivery of keys to the Premises to Landlord or any agent or employee of Landlord shall not
constitute a surrender of the Premises or effect a termination of this Lease, whether or not the
keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be
entitled to the return of such keys at any reasonable time upon request until this Lease shall have
been properly terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a merger, and at the
option of Landlord shall operate as an assignment to Landlord of all subleases or subtenancies
affecting the Premises or terminate any or all such sublessees or subtenancies.



     15.2 Removal of Tenant Property by Tenant. Subject to the terms and conditions of
Article 8 above, upon the expiration of the Lease Term, or upon any earlier termination of
this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender
possession of the Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear and tear and
repairs which are specifically made the responsibility of Landlord hereunder excepted. Upon such
expiration or termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, and such items of furniture, equipment, business
and trade fixtures, free-standing cabinet work, movable partitions and other articles of personal
property owned by Tenant or installed or placed by Tenant at its expense in the Premises, and such
similar articles of any other persons claiming under Tenant, as Landlord may, in its sole
discretion, require to be removed. Further, on or prior to the Expiration Date, Tenant shall,
unless otherwise directed by Landlord, at Tenant’s expense, close up any slab penetrations in the
Premises in excess of five (5) inches in diameter caused by Tenant. Tenant shall repair at its own
expense all damage to the Premises and Building resulting from such removal. Any of Tenant’s
Property not so removed shall be deemed abandoned and Landlord may remove and dispose of same, and
repair and restore any damage caused thereby, at Tenant’s cost and without accountability to
Tenant.



ARTICLE 16

HOLDING OVER




     If Tenant holds over after the expiration of the Lease Term or earlier termination thereof,
with or without the express or implied consent of Landlord, such tenancy shall be a tenancy at
sufferance, and shall not constitute a renewal hereof or an extension for any further term, and in
such case Base Rent shall be payable for the initial one (1) month of such holdover tenancy at a
monthly rate equal to one hundred fifty percent (150%) of the Base Rent applicable during the last
rental period of the Lease Term under this Lease, and if Tenant continues to hold over with or
without the express or implied consent of Landlord, Base Rent for the second month of such holdover
tenancy shall be payable at a monthly rate equal to one hundred seventy five percent (175%) of the
Base Rent applicable during the last rental period of the Lease Term under this Lease, and
thereafter if Tenant continues to hold over with or without the express or implied consent of
Landlord, Base Rent shall be payable at a monthly rate equal to two hundred percent (200%) of the
Base Rent applicable during the last rental period of the Lease Term under this Lease. Such tenancy
at sufferance shall be subject to every other applicable term, covenant and agreement contained
herein. For purposes of this Article 16, a holding over shall include (a) Tenant’s
remaining in the Premises after the expiration or earlier termination of the Lease Term, (b)
Tenant’s failure to remove any Alterations or personal property located within the Premises as
required pursuant to the terms of Sections 8.5 and




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15.2, above, and (c) if applicable, Tenant’s failure to remove any Tenant Improvements to
the extent required by Landlord as a condition to its consent thereto pursuant to the terms of the
Work Letter. Nothing contained in this Article 16 shall be construed as consent by
Landlord to any holding over by Tenant, and Landlord expressly reserves the right to require
Tenant to surrender possession of the Premises to Landlord as provided in this Lease upon the
expiration or other termination of this Lease. The provisions of this Article 16 shall not
be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided
herein or at Law. If Tenant fails to surrender the Premises upon the termination or expiration of
this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys’ fees) and liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to
surrender and any consequential damages, including lost profits to Landlord resulting therefrom.




ARTICLE 17

ESTOPPEL CERTIFICATES




     Within ten (10) days following a request in writing by Landlord, Tenant shall execute,
acknowledge and deliver to Landlord an estoppel certificate in the form as may be reasonably
required by Landlord, Lender or any prospective mortgagee or purchaser of the Project. Any such
certificate may be relied upon by any prospective mortgagee or purchaser of all or any portion of
the Project. Tenant shall execute and deliver whatever other instruments may be reasonably
required for such purposes, including reaffirmation of any guaranty. At any time during the Lease
Term in connection with any financing, re-financing or sale of the Project, Landlord may require
Tenant and any guarantor of this Lease to provide Landlord with a current financial statement and
financial statements of the two (2) years prior to the current financial statement year. Such
statements shall be prepared in accordance with generally accepted accounting principles and, if
such is the normal practice of Tenant, shall be audited by an independent certified public
accountant, otherwise, such statements shall be certified by the chief financial officer of
Tenant; provided, however, that if Tenant is a publicly-traded corporation, Tenant may satisfy its
obligations hereunder either by providing to Landlord Tenant’s most recent annual and quarterly
reports or by notice to Landlord that such reports are publicly available at the SEC’s EDGAR
website. Failure of Tenant to timely execute, acknowledge and deliver such estoppel certificate or
other instruments shall constitute an acceptance of the Premises and an acknowledgment by Tenant
that statements included in the estoppel certificate are true and correct, without exception.



ARTICLE 18

SUBORDINATION




     18.1 Subordination. This Lease, and all of the rights of Tenant hereunder, shall be
subject and subordinate to all present and future ground or underlying leases of the Building or
Project and to the lien of any mortgage, trust deed or other encumbrances now or hereafter in force
against the Building or Project or any part thereof, if any, and to all renewals, extensions,
modifications, consolidations and replacements thereof, and to all advances made or hereafter to be
made upon the security of such mortgages or trust deeds, unless the holders of such mortgages,
trust deeds or other encumbrances, or the lessors under such ground lease or underlying leases
(collectively, “Landlord Mortgagee”), require in writing that this Lease be superior thereto. Such
subordination shall be self-operative and effective without the necessity of the execution by
Tenant of any additional document for the purpose of evidencing or effecting such subordination.
Alternatively, Landlord’s Mortgagee may require Tenant’s interest under this Lease to be superior
to such mortgage or deed of trust. Tenant covenants and agrees in the event any proceedings are
brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is
terminated), to attorn, without any deductions or set-offs whatsoever, to the lienholder or
purchaser or any successors thereto upon any such foreclosure sale or deed in lieu thereof (or to
the ground lessor), if so requested to do so by such purchaser or lienholder or ground lessor, and
to recognize such purchaser or lienholder or ground lessor as the lessor under this Lease, provided
such lienholder or purchaser or ground lessor shall agree to accept this Lease and not disturb
Tenant’s occupancy, so long as Tenant timely pays the rent and observes and performs the terms,
covenants and conditions of this Lease to be observed and performed by Tenant. Landlord’s interest
herein may be assigned as security at any time to any lienholder. Tenant shall, within ten (10)
days of request by Landlord and/or Landlord’s Mortgagee, execute such further instruments or
assurances as Landlord and/or Landlord’s Mortgagee may reasonably deem necessary to evidence or
confirm the subordination or superiority of this Lease to any such mortgages, trust deeds, ground
leases or underlying leases. Tenant waives the provisions of any current or future statute, rule or
law which may give or purport to give Tenant any right or election to terminate or otherwise
adversely affect this Lease and the obligations of the Tenant hereunder in the event of any
foreclosure proceeding or sale.



     18.2 Notice to Landlord’s Mortgagee. Tenant shall not seek to enforce any remedy it
may have for any default on the part of Landlord without first giving Landlord’s Mortgagee written
notice by certified mail, return receipt requested, specifying the default in reasonable detail,
and affording such Landlord’s Mortgagee (i) a reasonable opportunity to perform Landlord’s
obligations hereunder (but not less than thirty (30) days), if such default can be cured without
such Landlord’s Mortgagee taking possession of the mortgaged or leased estate, or (ii) to obtain
possession of the mortgaged or leased estate and then to cure such default of Landlord, if such
default cannot be cured without such Landlord’s Mortgagee or taking possession of the mortgaged or
leased estate.



     18.3 Landlord’s Mortgagee’s Protection Provisions. If Landlord’s Mortgagee shall
succeed to the interest of Landlord under this Lease, Landlord’s Mortgagee shall not be: (a) liable
for any act or omission of any prior lessor (including Landlord), except to the extent that (i)
such act or omission continues after the date that the



15









 




Landlord’s Mortgagee succeeds to Landlord’s interest in the Building, and (ii) such act or
omission of such prior landlord is of a nature that the Landlord’s Mortgagee can cure by
performing a service or making a repair; (b) bound by any Rent or Additional Rent or advance rent
which Tenant might have paid for more than the current month to any prior lessor (including
Landlord), and all such rent shall remain due and owing, notwithstanding such advance payment; (c)
bound by any security or advance rental deposit made by Tenant which is not delivered or paid over
to Landlord’s Mortgagee and with respect to which Tenant shall look solely to Landlord for refund
or reimbursement; (d) bound by any termination, amendment or modification of this Lease made
without Landlord’s Mortgagee’s consent and written approval, except for those terminations,
amendments and modifications permitted to be made by Landlord without Landlord’s Mortgagee’s
consent pursuant to the terms of the loan documents between Landlord and Landlord’s Mortgagee; (e)
subject to the defenses which Tenant might have against any prior lessor (including Landlord); (f)
subject to the offsets which Tenant might have against any prior lessor (including Landlord)
except for those offset rights which (i) are expressly provided in this Lease, (ii) relate to
periods of time following the acquisition of the Building by Landlord’s Mortgagee, and (iii)
Tenant has provided written notice to Landlord’s Mortgagee and provided Landlord’s Mortgagee a
reasonable opportunity to cure the event giving rise to such offset event; and (g) bound by any
obligation to make any payment to or on behalf of Tenant to the extent that such obligation
accrues prior to the date that the Landlord’s Mortgagee succeeds to Landlord’s interest in the
Building. Landlord’s Mortgagee shall have no liability or responsibility under or pursuant to the
terms of this Lease or otherwise after it ceases to own an interest in the Project. Nothing in
this Lease shall be construed to require Landlord’s Mortgagee to apply the proceeds of any loan,
and Tenant’s agreements set forth herein shall not be impaired on account of any modification of
the documents evidencing and securing any loan.




ARTICLE 19

DEFAULTS; REMEDIES




     19.1 Defaults. The occurrence of any of the following shall constitute a default
(“Default”) of this Lease by Tenant:



     (a) Any failure by Tenant to pay any Rent or any other charge required to be paid under this
Lease, or any part thereof when due; provided that no more often than once each Lease Year,
Landlord shall provide Tenant with written notice that the Rent or other charge required to be
paid under this Lease, or any part thereof, has not been received when due, and provided that such
Rent or other charge required to be paid under this Lease, or any part thereof, is received within
five (5) days following such notice, Tenant shall not be deemed to be in default hereunder; or



     (b) Except where a specific time period is otherwise set forth for Tenant’s performance in
this Lease, in which event the failure to perform by Tenant within such time period shall be a
default by Tenant under this Section 19.1(b), any failure by Tenant to observe or perform
any other provision, covenant or condition of this Lease to be observed or performed by Tenant
where such failure continues for ten (10) days after written notice thereof from Landlord to
Tenant; provided that if the nature of such default is such that the same cannot reasonably be
cured within a ten (10) day period, Tenant shall not be deemed to be in default if it diligently
commences such cure within such period and thereafter diligently proceeds to rectify and cure such
default; or



     (c) To the extent permitted by Law, a general assignment by Tenant or any guarantor of this
Lease for the benefit of creditors, or the taking of any corporate action in furtherance of
bankruptcy or dissolution whether or not there exists any proceeding under an insolvency or
bankruptcy Law, or the filing by or against Tenant or any guarantor of any proceeding under an
insolvency or bankruptcy Law, unless in the case of a proceeding filed against Tenant or any
guarantor the same is dismissed within sixty (60) days, or the appointment of a trustee or
receiver to take possession of all or substantially all of the assets of Tenant or any guarantor,
unless possession is restored to Tenant or such guarantor within thirty (30) days, or any
execution or other judicially authorized seizure of all or substantially all of Tenant’s assets
located upon the Premises or of Tenant’s interest in this Lease, unless such seizure is discharged
within thirty (30) days; or



     (d) Abandonment of all or a substantial portion of the Premises by Tenant; or



     (e) The failure by Tenant to observe or perform according to the provisions of Articles
5, 14, 17 or 18 of this Lease where such failure continues for more than two (2)
Business Days (“Business Days” being defined as calendar days other than Saturdays, Sundays and
Holidays) after notice from Landlord; or



     (f) Any information furnished to Landlord by or in connection with the entry of this Lease on
behalf of Tenant or any guarantor of this Lease in connection with the entry of this Lease is
determined to have been materially false, misleading or incomplete when made.



     The notice periods provided herein are in lieu of, and not in addition to, any notice periods
provided by Law. To the extent permitted by Law, Tenant hereby waives service or notice of any
demand for payment of rent or possession or default prescribed by statute or ordinance.



     19.2 Remedies Upon Default. Upon or at any time after the occurrence of any Default
by Tenant, Landlord shall have, in addition to any other remedies available to Landlord at Law or in
equity (all of which remedies shall be distinct, separate and cumulative), the option to pursue any one or more of
the following remedies with or without written notice or demand to Tenant except as required hereunder, each and all
of which shall be cumulative and nonexclusive, without any notice or demand whatsoever:



16









 






     (a) Terminate this Lease, in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, to the extent permitted by applicable Law Landlord may, without
prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession
of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor; and Landlord may recover from
Tenant the following:



          (i) The worth at the time of award of any unpaid Rent which has been earned at the
time of such termination; plus




          (ii) The worth at the time of award of the amount by which the unpaid Rent which would have
been earned after termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus




          (iii) The worth at the time of award of the amount by which the unpaid Rent for the balance
of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided; plus




          (iv) Any other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, specifically including but not limited to,
brokerage commissions and advertising expenses incurred, expenses of remodeling the Premises or
any portion thereof for a new tenant, whether for the same or a different use, and any special
concessions made to obtain a new tenant; and




          (v) At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as
may be permitted from time to time by applicable Law.




     The term “rent” as used in this Section 19.2 shall be deemed to be and to mean all
sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to
Landlord or to others. As used in Paragraphs 19.2(a)(i) and (ii), above, the “worth at the time of
award” shall be computed by allowing interest at the rate set forth in Article 25 of this
Lease, but in no case greater than the maximum amount of such interest permitted by Law. As used
in Paragraph 19.2(a)(iii) above, the “worth at the time of award” shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank nearest the Project at the time of
award plus one percent (1%).



     (b) If Landlord does not elect to terminate this Lease on account of any Default by Tenant,
Landlord may, from time to time, without terminating this Lease, enforce all of its rights and
remedies under this Lease, including the right to recover all Rent as it becomes due.



     (c) Landlord shall at all times have the rights and remedies (which shall be cumulative with
each other and cumulative and in addition to those rights and remedies available under
Sections 19.2(a) and 19.2(b), above, or any Law or other provision of this Lease), without
prior demand or notice except as required by applicable Law, to seek any declaratory, injunctive
or other equitable relief, and specifically enforce this Lease, or restrain or enjoin a violation
or breach of any provision hereof.



     19.3 Subleases of Tenant. Whether or not Landlord elects to terminate this Lease on
account of any Default by Tenant, as set forth in this
Article 19, Landlord shall have the
right to terminate any and all subleases, licenses, concessions or other consensual arrangements
for possession entered into by Tenant and affecting the Premises or may, in Landlord’s sole
discretion, succeed to Tenant’s interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord’s election to succeed to Tenant’s interest in any such subleases,
licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such
election, have no further right to or interest in the rent or other consideration receivable
thereunder.



     19.4 Efforts to Relet. No re-entry or repossession, repairs, maintenance, changes,
alterations and additions, reletting, appointment of a receiver to protect Landlord’s interests
hereunder, or any other action or omission by Landlord shall be construed as an election by
Landlord to terminate this Lease or Tenant’s right to possession, or to accept a surrender of the
Premises, nor shall same operate to release Tenant in whole or in part from any of Tenant’s
obligations hereunder, unless express written notice of such intention is sent by Landlord to
Tenant. Tenant hereby irrevocably waives any right otherwise available under any Law to redeem or
reinstate this Lease.



     19.5 Landlord Default. Notwithstanding anything to the contrary set forth in this
Lease, Landlord shall be in default in the performance of any obligation required to be performed
by Landlord pursuant to this Lease if Landlord fails to perform such obligation within thirty (30)
days after the receipt of notice from Tenant specifying in detail the nature of Landlord’s alleged
failure to perform; provided, however, if the nature of Landlord’s obligation is such that more
than thirty (30) days are required for its performance, then Landlord shall not be in default under
this Lease if it shall commence such performance within such thirty (30) day period and thereafter
diligently pursues the same to completion. Notwithstanding anything to the contrary contained
herein, in no event shall Landlord be liable for lost profits or consequential damages as a result
of a default by Landlord in the performance of any obligation required to be performed by Landlord
pursuant to this Lease.



17









 





ARTICLE 20

COVENANT OF QUIET ENJOYMENT




     Landlord covenants that Tenant, on paying the Rent, charges for services and other payments
herein reserved and on keeping, observing and performing all the other terms, covenants,
conditions, provisions and agreements herein contained on the part of Tenant to be kept, observed
and performed, so long as Tenant is not in default of this Lease (beyond any applicable notice and
cure period) Tenant shall, for the duration of the Lease Term, peaceably and quietly have, hold
and enjoy the Premises subject to the terms, covenants, conditions, provisions and agreements
hereof without interference by any persons lawfully claiming by or through Landlord. The foregoing
covenant is in lieu of any other covenant express or implied.



ARTICLE 21

LETTER OF CREDIT; SECURITY DEPOSIT




     Except as otherwise set forth below, concurrent with Tenant’s execution of this Lease, Tenant
shall deposit with Landlord an unconditional, irrevocable letter of credit in the amount of Eighty
Six Thousand Seventy Nine and 54/100 Dollars ($86,079.54) in a form reasonably acceptable to
Landlord and issued by a bank satisfactory to Landlord (the “Letter of Credit”). The Letter of
Credit shall provide that it is assignable by Landlord shall permit partial draws, and shall
either (i) expire on the date which is sixty (60) days after the expiration or termination of this
Lease (the “LC Date”) or (ii) be automatically self-renewing until the LC Date. If any Letter of
Credit is not renewed at least thirty (30) days prior to the expiration thereof or if Tenant holds
over in the Premises without the consent of Landlord after the expiration or termination of this
Lease, Landlord may draw upon the Letter of Credit and hold the proceeds thereof as security for
the performance of Tenant’s obligations under this Lease. Landlord may draw on the Letter of
Credit (or the proceeds thereof) to remedy defaults by Tenant in the payment or performance of any
of Tenant’s obligations under this Lease. If Landlord shall have so drawn upon the Letter of
Credit (or the proceeds thereof), Tenant shall upon demand deposit with Landlord a sum equal to
the amount so drawn by Landlord. Provided Tenant is not in Default under this Lease and Tenant has
surrendered the Premises to Landlord in accordance with all of the terms and conditions of this
Lease, on or before the LC Date: (a) Landlord shall promptly return to Tenant the Letter of Credit
(or the proceeds thereof) then held by Landlord or (b) if Landlord shall have drawn upon such
Letter of Credit (or the proceeds thereof) to remedy events of default by Tenant in the payment or
performance of any of Tenant’s obligations under this Lease, Landlord shall return to Tenant the
proceeds of the Letter of Credit remaining in Landlord’s possession.



     Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material
reliance upon the ability of Landlord to draw upon the Letter of Credit upon the occurrence of any
event of default on the part of Tenant under this Lease. If there shall occur an event of default
under this Lease Landlord may, but without obligation to do so, and without notice, draw upon the
Letter of Credit, in part or in whole, to cure any default of Tenant and/or to compensate Landlord
for any and all damages of any kind or nature sustained or which Landlord reasonably estimates
that it will sustain resulting from Tenant’s default. Tenant agrees not to interfere in any way
with payment to Landlord of the proceeds of the Letter of Credit, either prior to or following a
“draw” by Landlord of any portion of the Letter of Credit, regardless of whether any dispute
exists between Tenant and Landlord as to Landlord’s right to draw from the Letter of Credit. No
condition or term of this Lease shall be deemed to render the Letter of Credit conditional to
justify the issuer of the Letter of Credit in failing to honor a drawing upon such Letter of
Credit in a timely manner. Additionally, Landlord’s draw and application of all or any portion of
the proceeds of the Letter of Credit shall not impair any other rights or remedies provided under
this Lease or under applicable Law and shall not be construed as a payment of liquidated damages.
Tenant agrees and acknowledges that Tenant has no property interest whatsoever in the Letter of
Credit or the proceeds thereof and that, in the event Tenant becomes a debtor under any chapter of
the Federal Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate shall
have any right to restrict or limit Landlord’s claim and/or rights to the Letter of Credit and/or
the proceeds thereof by application of Section 502(b)(6) of the Federal Bankruptcy Code.



     The Letter of Credit shall also provide that Landlord may, at any time and without notice to
Tenant and without first obtaining Tenant’s consent thereto, transfer all or any portion of its
interest in and to the Letter of Credit to another party, person or entity holding an ownership or
security interest in the Project (or the direct or indirect ownership interests in Landlord); as a
part of the assignment by Landlord of its rights and interests in and to this Lease. In the event
of a transfer of Landlord’s interest in the Building, Landlord shall transfer the Letter of Credit,
in whole or in part, to the transferee and thereupon Landlord shall, without any further agreement
between the parties, be released by Tenant from all liability therefor, and it is agreed that the
provisions hereof shall apply to every transfer or assignment of the whole or any portion of said
Letter of Credit to a new landlord. In connection with any such transfer of the Letter of Credit by
Landlord, Tenant shall, at Tenant’s sole cost and expense, execute and submit to the issuing bank
such applications, documents and instruments as may be necessary to effectuate such transfer;
provided, however, that Landlord shall be responsible for paying the issuing bank’s transfer and
processing fees in connection therewith.



     Landlord and Tenant acknowledge and agree that in no event or circumstance shall the Letter
of Credit or any renewal thereof or any proceeds thereof be (i) deemed to be an asset or property
of the Tenant, (ii) deemed to be or treated as a “security deposit” within the meaning of
California Civil Code Section 1950.7, (iii) subject to the terms of such Section 1950.7, or (iv)
intended to serve as a “security deposit” within the meaning of such Section 1950.7. The parties
hereto (A) recite that the Letter of Credit is not intended to serve as a security deposit and
such Section 1950.7 and any and all other laws, rules and regulations applicable to security
deposits in the commercial context (“Security Deposit Laws”) shall have no applicability or
relevancy thereto and (B) waive any



18









 







and all rights, duties and obligations either party may now or, in the future, will have relating
to or arising from the Security Deposit Laws.




     In lieu of providing the Letter of Credit, concurrently with Tenant’s execution of this
Lease, Tenant shall deposit with Landlord a security deposit (the “Security Deposit”) in the
amount of Eighty Six Thousand Seventy Nine and 54/100 Dollars ($86,079.54), as security for the
faithful performance by Tenant of all of its obligations under this Lease. If Tenant defaults with
respect to any provisions of this Lease, including, but not limited to, the provisions relating to
the payment of Rent, the removal of property and the repair of resultant damage, Landlord may,
without notice to Tenant, but shall not be required to apply all or any part of the Security
Deposit for the payment of any Rent or any other sum in default and Tenant shall, upon demand
therefor, restore the Security Deposit to its original amount. Any unapplied portion of the
Security Deposit shall be returned to Tenant, or, at Landlord’s option, to the last assignee of
Tenant’s interest hereunder, within sixty (60) days following the expiration of the Lease Term.
Tenant shall not be entitled to any interest on the Security Deposit. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, or any successor statute, and all other
provisions of law, now or hereafter in effect, which (i) establish the time frame by which a
landlord must refund a security deposit under a lease, and/or (ii) provide that a landlord may
claim from a security deposit only those sums reasonably necessary to remedy defaults in the
payment of rent, to repair damage caused by a tenant or to clean the premises, it being agreed
that Lessor may, in addition, claim those sums specified in this Section above and/or those sums
reasonably necessary to compensate Lessor for any loss or damage caused by Lessee’s default of the
Lease, as amended hereby, including, but not limited to, all damages or rent due upon termination
of Lease pursuant to Section 1951.2 of the California Civil Code.



     If Tenant initially delivers the Letter of Credit, Tenant shall have the right to replace
such Letter of Credit with the Security Deposit at any time thereafter by delivering the Security
Deposit to Landlord (in which event Landlord shall promptly return the Letter of Credit to
Tenant). In addition, if Tenant initially delivers the Security Deposit, Tenant shall have the
right to replace such Security Deposit with the Letter of Credit at any time thereafter by
delivering the Letter of Credit to Landlord (in which event Landlord shall promptly return the
Security Deposit to Tenant).



ARTICLE 22

SUBSTITUTION OF OTHER PREMISES




     Landlord shall have the right, in its sole discretion, upon not less than thirty (30) days
prior written notice to Tenant, but not more than once during the Lease Term and not prior to the
Must Take Commencement Date, to move Tenant to other space in the Building reasonably comparable
in size, layout and finish to the Premises (the “Substitute Premises”), and all terms hereof shall
apply to the new space with equal force. In such event, Landlord shall give Tenant prior notice
and shall provide Tenant, at Landlord’s sole cost and expense, with tenant improvements reasonably
comparable in quality to those in the Premises. In addition, Landlord shall be obligated to pay to
Tenant an allowance (the “Relocation Allowance”) equal to the reasonable out-of-pocket moving,
re-cabling and re-fixturing expenses actually incurred by Tenant to move from the Premises to the
Substitute Premises (including, but not limited to, the physical move from the Premises to the
Substitute Premises, the relocation of Tenant’s cabling and telephone and computer systems, and
the costs for Tenant’s signage relocation, stationery, business cards, invoices, brochures and the
like if the address, facsimile or telephone numbers of Tenant or any of its licensees are changed
in any manner due to the relocation); provided that, Tenant shall submit to Landlord a
detailed description of the type and estimated amount of such moving expenses prior to the move
and Landlord shall have consented to such expenses, which consent shall not be unreasonably
withheld. In the event Tenant is relocated in accordance with this Article 22, and the rentable
area of the new space is not equal to or greater the rentable area of the Premises at the time of
such relocation, all amounts, percentages and figures appearing or referred to in this Lease based
upon such rentable area (including, without limitation, the amounts of the “Rent” payable under
this Lease, and “Tenant’s Share”) shall be modified accordingly. In the event Tenant is relocated
in accordance with this Article 22, and the rentable area of the new space is greater the rentable
area of the Premises at the time of such relocation, all amounts, percentages and figures
appearing or referred to in this Lease based upon such rentable area shall not be increased.
Simultaneously with such relocation to the Substitute Premises, the parties shall immediately
execute an amendment to this Lease stating the relocation of the Premises.



ARTICLE 23

SIGNS




     Subject to Landlord’s prior written approval, in its sole discretion, and provided all signs
are in keeping with the quality, design and style of the Building and Project, Tenant, if the
Premises comprise an entire floor of the Building, at its sole cost and expense, may install
identification signage anywhere in the Premises including in the elevator lobby of the Premises,
provided that such signs must not be visible from the exterior of the Building. If other tenants
occupy space on the floor on which the Premises is located, Tenant’s identifying signage shall be
provided by Landlord, at Tenant’s cost, and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with Landlord’s Building
standard signage program. Any signs, notices, logos, pictures, names or advertisements which are
installed and that have not been separately approved by Landlord may be removed without notice by
Landlord at the sole expense of Tenant. Landlord shall provide a directory listing for Tenant’s
Premises in the lobby of the Building. Tenant may not install any signs on the exterior or roof of
the Project or the Common Areas. Any signs, window coverings, or blinds (even if the same are
located behind the Landlord-approved window coverings for the Building), or other items visible
from the exterior of the Premises or Building, shall be subject to the prior written approval of
Landlord, in its sole discretion.



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ARTICLE 24

COMPLIANCE WITH LAW




     Tenant shall not do anything or suffer anything to be done in or about the Premises or the
Project which will in any way conflict with any applicable Laws. At its sole cost and expense,
Tenant shall promptly comply with all such Laws; provided that Tenant shall have no obligation to
make any alterations to the Premises in complying with any Laws except as specifically set forth
below. Should any standard or regulation now or hereafter be imposed on Landlord or Tenant by a
state, federal or local governmental body charged with the establishment, regulation and
enforcement of occupational, health or safety standards for employers, employees, landlords or
tenants, then Tenant agrees, at its sole cost and expense, to comply promptly with such standards
or regulations and to cooperate with Landlord, including, without limitation, by taking such
actions as Landlord may reasonably require, in Landlord’s efforts to comply with such standards or
regulations. Except as set forth in the Work Letter, Tenant shall be responsible, at its sole cost
and expense, to make all alterations to the Premises as are required to comply with applicable
Laws which relate to (i) Tenant’s use or manner of use of the Premises, (ii) any Alterations
(including all Tenant Alterations) made by or on behalf of Tenant in the Premises, (iii) the Base
Building, but, as to the Base Building, only to the extent such obligations are triggered by
Alterations or Tenant’s Alterations to the Premises, or its use or manner of use of the Premises,
and (iv) any employees of Tenant, occupants (including, without limitation, any Permitted
Occupant) of the Premises, or any vendors, visitors or other invitees of Tenant.. The judgment of
any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless
of whether Landlord is a party thereto, that Tenant has violated any of said governmental
measures, shall be conclusive of that fact as between Landlord and Tenant. Tenant shall promptly
pay all fines, penalties and damages that may arise out of or be imposed because of its failure to
comply with the provisions of this Article 24. Landlord, as part of Operating Costs, shall comply
with all Laws relating to the Building and the Project Common Areas, provided that compliance with
such Laws is not the responsibility of Tenant under this Lease, or other tenants in the Project.



ARTICLE 25

LATE CHARGES




     If any installment of Rent or any other sum due from Tenant shall not be received by Landlord
or Landlord’s designee within five (5) days after said amount is due, then Tenant shall pay to
Landlord a late charge equal to five percent (5%) of the overdue amount plus any attorneys’ fees
incurred by Landlord by reason of Tenant’s failure to pay Rent and/or other charges when due
hereunder. The late charge shall be deemed Additional Rent and the right to require it shall be in
addition to all of Landlord’s other rights and remedies hereunder or at Law and shall not be
construed as liquidated damages or as limiting Landlord’s remedies in any manner. In addition to
the late charge described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) days after the date they are due shall bear interest from the date when due until
paid at a rate per annum (the “Default Rate”) equal to the lesser of (i) twelve percent (12%) per
annum, and (ii) the highest rate permitted by applicable Law.



ARTICLE 26

LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT




     26.1 Landlord’s Cure. All covenants and agreements to be kept or performed by Tenant
under this Lease shall be performed by Tenant at Tenant’s sole cost and expense and without any
reduction of Rent, except to the extent, if any, otherwise expressly provided herein. If Tenant
shall fail to perform any obligation under this Lease, and such failure shall continue in excess
of the time allowed under Section 19.1(b), above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to, make any such payment
or perform any such act on Tenant’s part without waiving its rights based upon any default of
Tenant and without releasing Tenant from any obligations hereunder. Notwithstanding the foregoing,
Landlord may, but shall not be obligated to, make any such payment or perform any such act on
Tenant’s part without waiving its rights based upon any default of Tenant and without releasing
Tenant from any obligations hereunder, immediately, and without notice, in the case of emergency
or if the default (i) materially interferes with the use by any other tenant of the Building, (ii)
materially interferes with the efficient operation of the Building, (iii) results in a violation
of any legal requirement, or (iv) results or will result in a cancellation of any insurance policy
maintained by Landlord.



     26.2 Tenant’s Reimbursement. Except as may be specifically provided to the contrary
in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord to Tenant of statements
therefor: (i) sums equal to expenditures reasonably made and obligations incurred by Landlord in
connection with the remedying by Landlord of Tenant’s defaults pursuant to the provisions of
Section 26.1; (ii) sums equal to all losses, costs, liabilities, damages and expenses
referred to in Article 10 of this Lease; and (iii) sums equal to all expenditures made and
obligations incurred by Landlord in collecting or attempting to collect the Rent or in enforcing
or attempting to enforce any rights of Landlord under this Lease or pursuant to Law, including,
without limitation, all legal fees and other amounts so expended. Tenant’s obligations under this
Section 26.2 shall survive the expiration or sooner termination of the Lease Term.



ARTICLE 27

ENTRY BY LANDLORD; CONFIDENTIALITY




     27.1 Entry Rights. Landlord reserves the right at all reasonable times and upon
reasonable notice (which notice may be telephonic) to Tenant (except in the case of an emergency, in which event no
notice shall be



20









 




required) to enter the Premises to (i) inspect them; (ii) show the Premises to prospective
purchasers, mortgagees, brokers, investors or tenants, or to current or prospective mortgagees,
ground or underlying lessors or insurers; (iii) post notices of nonresponsibility; or (iv) alter,
improve or repair the Premises or the Building, or for structural alterations, repairs or
improvements to the Building or the Building Systems. Landlord shall have the right to install,
use and maintain ducts, cabling, pipes and conduits in and through the Premises, provided that (a)
such ducts, cabling, pipes and conduits are concealed within or above partitioning columns, walls
or ceilings, except that if such ducts, cabling, pipes or conduits are installed in areas that are
utility areas (such as storage areas, mailrooms or mud rooms), then such ducts, cabling, pipes or
conduits may also be installed on partitioning walls, columns or ceilings, (b) such ducts,
cabling, pipes and conduits do not reduce the usable area of the Premises by more than a deminimis amount, and (c) Landlord installs such ducts, cabling, pipes and conduits in a manner that
minimizes, to the extent reasonably practicable, any adverse effect on an Alteration theretofore
performed in the Premises. Notwithstanding anything to the contrary contained in this Article
27, Landlord may enter the Premises at any time to (A) perform services required of Landlord,
including janitorial service; (B) to the extent permitted by applicable Law, take possession due
to any breach of this Lease in the manner provided herein; or (C) perform any covenants of Tenant
which Tenant fails to perform. Landlord may make any such entries without the abatement of Rent
and may take such reasonable steps as required to accomplish the stated purposes. Tenant hereby
waives any claims for damages or for any injuries or inconvenience to or interference with
Tenant’s business, lost profits, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby. For each of the above purposes, Landlord shall at all times have a
key with which to unlock all the doors in the Premises, excluding Tenant’s vaults, safes and
special security areas designated in advance by Tenant to Landlord. In an emergency, Landlord
shall have the right to use any means that Landlord may deem proper to open the doors in and to
the Premises. Any entry into the Premises by Landlord in the manner hereinbefore described shall
not be deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an
actual or constructive eviction of Tenant from any portion of the Premises.




     27.2 Confidentiality. Except as specifically set forth herein to the contrary,
Landlord and Landlord Parties shall use commercially reasonable efforts to keep confidential all
information that Tenant provides to Landlord in writing and which Tenant informs Landlord in
writing is confidential (the “Confidential
Information”). Landlord shall use commercially
reasonable efforts to prevent any Confidential Information from being disclosed to third parties
by Landlord, unless (a) such information is or becomes publicly available through means other than
disclosure by Landlord, or anyone under Landlord’s control, (b) the disclosure of such information
is reasonably necessary for Landlord or anyone under Landlord’s control to carry out Landlord’s
obligations under this Lease, (c) the disclosure of such information is reasonably necessary for
Landlord to assert a claim against Tenant for a breach of this Lease, or (d) the disclosure of
such information is required to be disclosed by law or by court order; provided, however, that if
Landlord receives a request, pursuant to the terms of a subpoena, order, civil investigative
demand or similar process issued by a court of competent jurisdiction or by governmental body, to
disclose such Confidential Information, Landlord agrees, within a reasonable time, to notify
Tenant of such request so that Tenant may seek, at no cost or expense to Landlord, a protective
order prohibiting or limiting such disclosure as Tenant shall deem reasonably appropriate.
Notwithstanding the foregoing, Landlord shall have the right to disclose such Confidential
Information to (x) prospective buyers of the Building or Project, (y) prospective mortgagees of
the Building or Project, and to (z) its employees, members, managers, advisors, agents, attorneys,
accountants, representatives and existing lenders so long as Landlord obtains reasonable
assurances from such parties that the Confidential Information will be held confidential in
accordance with the provisions of this Section 27.2. The parties agree that damages would be an
inadequate remedy for the breach of this provision, and Tenant shall have the right to seek
specific performance of the foregoing confidentiality covenant and to seek injunctive relief to
prevent its breach.



ARTICLE 28

TENANT PARKING




     28.1 Tenant Parking. Tenant shall be entitled to the non-preferential and
non-exclusive use of the number of undesignated parking spaces set forth in Section 15 of the Summary from
Landlord, commencing on the Commencement Date. The use of such spaces during the Lease Term shall
be without additional charge, except to the extent that Landlord is required to impose a parking
fee by any governmental regulation now or hereafter applicable to any part or all of the Project,
or to Landlord or Tenant. Tenant’s continued right to use the parking spaces is conditioned upon
Tenant abiding by all reasonable rules and regulations which are prescribed from time to time for
the orderly operation and use of the parking facility where the parking passes are located,
including any sticker or other identification system established by Landlord, and Tenant’s
cooperation in seeing that Tenant’s employees and visitors also comply with such rules and
regulations.



     28.2 Other Terms. Landlord specifically reserves the right to change the size,
configuration, design, layout and all other aspects of the Project parking facility at any time and Tenant
acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without any abatement of Rent
under this Lease, from time to time, close-off or restrict access to the Project parking facility for purposes of
permitting or facilitating any such construction, alteration or improvements. Landlord may delegate its responsibilities
hereunder to a parking operator in which case such parking operator shall have all the rights of control attributed
hereby to the Landlord. The parking spaces provided to Tenant pursuant to this Article 28 are provided to Tenant
solely for use by Tenant’s own personnel and such spaces may not be transferred, assigned, subleased or otherwise
alienated by Tenant without Landlord’s prior approval, except in connection with any Permitted Transfer.



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     28.3 Parking Procedures. The parking spaces initially will not be separately
identified; however Landlord reserves the right in its sole and absolute discretion to separately
identify by signs or other markings the area to which Tenant’s parking rights relate. Landlord
shall have no obligation to monitor the use of such parking facility, nor shall Landlord be
responsible for any loss or damage to any vehicle or other property or for any injury to any
person. Tenant’s parking spaces shall be used only for parking of automobiles no larger than full
size passenger automobiles, sport utility vehicles or pick-up trucks. Tenant shall comply with all
rules and regulations which may be adopted by Landlord from time to time with respect to parking
and/or the parking facilities servicing the Project. Tenant shall not have the exclusive right to
use any specific parking space. If Landlord grants to any other tenant the exclusive right to use
any particular parking space(s), Tenant shall not use such spaces. All trucks (other than pick-up
trucks) and delivery vehicles shall be (i) parked at the loading dock of the Building, (ii) loaded
and unloaded in a manner which does not interfere with the businesses of other occupants of the
Project, and (iii) permitted to remain on the Project only so long as is reasonably necessary to
complete loading and unloading. In the event Landlord elects in its sole and absolute discretion
or is required by any Law to limit or control parking, whether by validation of parking tickets or
any other method of assessment, Tenant agrees to participate in such validation or assessment
program under such reasonable rules and regulations as are from time to time established by
Landlord.



ARTICLE 29

MISCELLANEOUS PROVISIONS




     29.1 Terms; Captions. The words “Landlord” and “Tenant” as used herein shall include
the plural as well as the singular. The necessary grammatical changes required to make the
provisions hereof apply either to corporations or partnerships or individuals, men or women, as
the case may require, shall in all cases be assumed as though in each case fully expressed. The
captions of Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.



     29.2 Binding Effect. Subject to all other provisions of this Lease, each of the
covenants, conditions and provisions of this Lease shall extend to and shall, as the case may
require, bind or inure to the benefit not only of Landlord and of Tenant, but also of their
respective heirs, personal representatives, successors or assigns, provided this clause shall not
permit any assignment by Tenant contrary to the provisions of Article 14 of this Lease.



     29.3 No Air Rights. No rights to any view or to light or air over any property,
whether belonging to Landlord or any other person, are granted to Tenant by this Lease. If at any
time any windows of the Premises are temporarily darkened or the light or view therefrom is
obstructed by reason of any repairs, improvements, maintenance or cleaning in or about the
Project, the same shall be without liability to Landlord and without any reduction or diminution
of Tenant’s obligations under this Lease.



     29.4 Modification of Lease. Should any current or prospective mortgagee or ground
lessor for the Building or Project require a modification of this Lease, which modification will
not cause an increased cost or expense to Tenant or in any other way materially and adversely
change the rights and obligations of Tenant hereunder, then and in such event, Tenant agrees that
this Lease may be so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) days following a request therefor.



     29.5 Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has the right
to transfer all or any portion of its interest in the Project or Building and in this Lease.
Tenant agrees that in the event of any such transfer, Landlord shall automatically be released
from all liability under this Lease, and Tenant agrees to look solely to such transferee for the
performance of Landlord’s obligations hereunder accruing after the date of transfer. Such
transferee shall be deemed to have fully assumed and be liable for all obligations of this Lease
to be performed by Landlord, including the return of any Security Deposit, and Tenant shall attorn
to such transferee. Tenant further acknowledges that Landlord may assign its interest in this
Lease to Landlord’s Mortgagee as additional security. Tenant agrees that such an assignment shall
not release Landlord from its obligations hereunder and that Tenant shall continue to look to
Landlord for the performance of its obligations hereunder unless and until such Landlord’s
Mortgagee succeeds to Landlord’s interest under this Lease.



     29.6 Prohibition Against Recording. Neither this Lease, nor any memorandum, affidavit
or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant.



     29.7 Landlord’s Title. Landlord’s title is and always shall be paramount to the title
of Tenant. Nothing herein contained shall empower Tenant to do any act which can, shall or may
encumber the title of Landlord.



     29.8 Relationship of Parties. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship of principal and
agent, partnership, joint venturer or any association between Landlord and Tenant.



     29.9 Application of Payments. Landlord shall have the right to apply payments received
from Tenant pursuant to this Lease, regardless of Tenant’s designation of such payments, to satisfy
any obligations of Tenant hereunder, in such order and amounts as Landlord, in its sole discretion,
may elect.



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     29.10 Time of Essence. Whether or not so specified in any particular provision of
this Lease, time is of the essence with respect to the performance by Tenant of every provision of
this Lease in which time of performance by Tenant is a factor.



     29.11 Partial Invalidity. If any term, provision or condition contained in this Lease
shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application
of such term, provision or condition to persons or circumstances other than those with respect to
which it is invalid or unenforceable, shall not be affected thereby, and each and every other
term, provision and condition of this Lease shall be valid and enforceable to the fullest extent
possible permitted by Law.



     29.12 No Warranty. In executing and delivering this Lease, Tenant has not relied on
any representations, including, but not limited to, any representation as to the amount of any
item comprising Additional Rent or the amount of the Additional Rent in the aggregate or that
Landlord is furnishing the same services to other tenants, at all, on the same level or on the
same basis, or any warranty or any statement of Landlord or any employee, broker or agent of
Landlord, which is not set forth herein or in one or more of the exhibits attached hereto.



     29.13 Landlord Exculpation. The liability of Landlord or the Landlord Parties to
Tenant for any default by Landlord under this Lease or arising in connection herewith or with
Landlord’s operation, management, leasing, repair, renovation, alteration or any other matter
relating to the Project or the Premises shall be limited solely and exclusively to an amount which
is equal to the lesser of (a) the interest of Landlord in the Building or (b) the equity interest
Landlord would have in the Building if the Building were encumbered by third-party debt in an
amount equal to eighty percent (80%) of the value of the Building (as such value is reasonably
determined by Landlord). Neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such personal liability on
behalf of itself and all persons claiming by, through or under Tenant. The limitations of
liability contained in this Section 29.13 shall inure to the benefit of Landlord’s and the
Landlord Parties’ present and future partners, beneficiaries, officers, directors, trustees,
shareholders, agents and employees, and their respective partners, heirs, successors and assigns.
Under no circumstances shall any present or future partner of Landlord (if Landlord is a
partnership), or trustee or beneficiary (if Landlord or any partner of Landlord is a trust), have
any liability for the performance of Landlord’s obligations under this Lease. Notwithstanding any
contrary provision herein, neither Landlord nor the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with, Tenant’s business, including but not
limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss
of goodwill or loss of use, in each case, however occurring.



     29.14 Entire Agreement. It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease constitutes the parties’
entire agreement with respect to the leasing of the Premises and supersedes and cancels any and
all previous negotiations, arrangements, brochures, agreements and understandings, if any, between
the parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof,
and none thereof shall be used to interpret or construe this Lease. None of the terms, covenants,
conditions or provisions of this Lease can be modified, deleted or added to except in writing
signed by the parties hereto.



     29.15 Right to Lease. Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in the exercise of its sole business judgment shall determine
to best promote the interests of the Building or Project. Tenant does not rely on the fact, nor
does Landlord represent, that any specific tenant or type or number of tenants shall, during the
Lease Term, occupy any space in the Building or Project.



     29.16 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God and adverse weather, inability to obtain services, labor, or materials
or reasonable substitutes therefor, governmental actions, civil commotions, terrorism, fire or
other casualty, and other causes beyond the reasonable control of the party obligated to perform,
except with respect to the obligations imposed with regard to Rent and other charges to be paid by
Tenant pursuant to this Lease and except as to Tenant’s obligations under Articles 5 and
24 of this Lease (collectively, a “Force Majeure”), notwithstanding anything to the
contrary contained in this Lease, shall excuse the performance of such party for a period equal to
any such prevention, delay or stoppage and, therefore, if this Lease specifies a time period for
performance of an obligation of either party, that time period shall be extended by the period of
any delay in such parry’s performance caused by a Force Majeure.



     29.17 Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and for all
those claiming under Tenant, any and all rights now or hereafter existing to redeem by order or
judgment of any court or by any legal process or writ, Tenant’s right of occupancy of the Premises
after any termination of this Lease.



     29.18 Notices. All notices, demands, statements, designations, approvals or other
communications (collectively, “Notices”) given or required to be given by either party to the other
hereunder or by Law shall be in writing, shall be (A) sent by United States certified or registered
mail, postage prepaid, return receipt requested
(“Mail”), (B) transmitted by telecopy, if such
telecopy is promptly followed by a Notice sent by Mail, by nationally recognized overnight courier
or delivered personally, (C) delivered by a nationally recognized overnight courier, or (D)
delivered personally. Any Notice shall be sent, transmitted, or delivered, as the case may be, to
Tenant at the appropriate address set forth in Section 16 of the Summary, or to such other place as
Tenant may from time to time designate in a Notice to Landlord, or to Landlord at the addresses set
forth below, or to such other places as Landlord may from time to time designate in a Notice to
Tenant. Any Notice will be deemed given (i) three




23












 




(3) days after the date it is posted if sent by Mail, (ii) the date the telecopy is transmitted,
(iii) the date the overnight courier delivery is made or attempted to be made, or (iv) the date
personal delivery is made or attempted to be made. If Tenant is notified of the identity and
address of Landlord’s Mortgagee (by assignment of rents or otherwise), Tenant shall give to such
Landlord’s mortgagee written notice of any default by Landlord. As of the date of this Lease, any
Notices to Landlord must be sent, transmitted, or delivered, as the case may be, to the addresses
listed in Section 17 of the Summary.




     29.19 Joint and Several. If there is more than one Tenant, the obligations imposed
upon Tenant under this Lease shall be joint and several.



     29.20 Authority. Tenant hereby represents and warrants to Landlord that (i) Tenant is
duly organized and validly existing in good standing under the Laws of the State of Delaware, and
possesses all licenses and authorizations necessary to carry on its business, (ii) Tenant has full
power and authority to carry on its business, enter into this Lease and consummate the transaction
contemplated by this Lease, (iii) the individual executing and delivering this Lease on Tenant’s
behalf has been duly authorized to do so, (iv) this Lease has been duly executed and delivered by
Tenant, (v) this Lease constitutes a valid, legal, binding and enforceable obligation of Tenant
(subject to bankruptcy, insolvency or creditor rights laws generally, and principles of equity
generally), (vi) the execution, delivery and performance of this Lease by Tenant will not cause or
constitute a default under, or conflict with, the organizational documents of Tenant or any
agreement to which Tenant is a party, (vii) the execution, delivery and performance of this Lease
by Tenant will not violate any applicable Law, and (viii) all consents, approvals, authorizations,
orders or filings of or with any court or governmental agency or body, if any, required on the
part of Tenant for the execution, delivery and performance of this Lease have been obtained or
made.



     29.21 Attorneys’ Fees. In the event that either Landlord or Tenant should bring suit
for the possession of the Premises, for the recovery of any sum due under this Lease, or because
of the breach of any provision of this Lease or for any other relief against the other, then all
costs and expenses, including reasonable attorneys’ fees, incurred by the prevailing party therein
shall be paid by the other party, which obligation on the part of the other party shall be deemed
to have accrued on the date of the commencement of such action and shall be enforceable whether or
not the action is prosecuted to judgment.



     29.22
Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed and
enforced in accordance with the Laws of the State where the Building is located. IN ANY ACTION OR
PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I) THE JURISDICTION OF ANY
COMPETENT COURT WITHIN THE STATE WHERE THE BUILDING IS LOCATED, (II) SERVICE OF PROCESS BY ANY
MEANS AUTHORIZED BY THE LAW OF THE STATE WHERE THE BUILDING IS LOCATED, AND (III) IN THE INTEREST
OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S
USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR
STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT
OF BASE RENT OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR
DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT
SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.



     29.23 Submission of Lease. Submission of this instrument for examination or signature
by Tenant does not constitute an offer to lease the Premises to Tenant or reservation of, option
for or option to lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.



     29.24 Brokers. Landlord and Tenant hereby warrant to each other that they have had no
dealings with any real estate broker or agent in connection with the negotiation of this Lease,
excepting only the real estate brokers or agents specified in Section 18 of the Summary (the
“Brokers”), and that they know of no other real estate broker or agent who is entitled to a
commission in connection with this Lease. Tenant agrees to indemnify and defend Landlord against
and hold Landlord harmless from any and all Claims with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any real estate broker
or agent, other than the Brokers, occurring by, through, or under Tenant.



     29.25 Independent Covenants. This Lease shall be construed as though the covenants
herein (including, without limitation, Tenant’s obligation to pay Rent) between Landlord and Tenant
are independent and not dependent and Tenant hereby expressly waives the benefit of any statute to
the contrary and agrees that if Landlord fails to perform its obligations set forth herein, Tenant
shall not be entitled to make any repairs or perform any acts hereunder at Landlord’s expense or to
any setoff of the Rent or other amounts owing hereunder against Landlord.



     29.26 Project or Building Name and Signage. Landlord shall have the right at any time
to change the name of the Project or Building and to install, affix and maintain any and all signs
on the exterior and on the interior of the Project or Building as Landlord may, in Landlord’s sole
discretion, desire. Tenant shall not use the name of the Project or Building or use pictures or
illustrations of the Project or Building in advertising or other publicity or for any purpose
other than as the address of the business to be conducted by Tenant in the Premises,




24









 








without the prior written consent of Landlord, which consent may be granted or withheld in
Landlord’s sole discretion.




     29.27 Counterparts. This Lease may be executed in counterparts with the same effect
as if both parties hereto had executed the same document. Both counterparts shall be construed
together and shall constitute a single lease.



     29.28 Confidentiality. Tenant acknowledges that the content of this Lease and any
related documents are confidential information. Tenant shall keep such confidential information
strictly confidential and shall not disclose such confidential information to any person or entity
other than Tenant’s financial, legal, and space planning consultants, and except as required by
law.



     29.29 Transportation Management. Tenant shall fully comply with all present or future
programs intended to manage parking, transportation or traffic in and around the Building, and in
connection therewith, Tenant shall take responsible action for the transportation planning and
management of all employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other transportation-related committees
or entities.



     29.30 No Violation. Tenant hereby warrants and represents that neither its execution
of nor performance under this Lease shall cause Tenant to be in violation of any agreement,
instrument, contract, Law, rule or regulation by which Tenant is bound, and Tenant shall protect,
defend, indemnify and hold Landlord harmless against any Claims arising from Tenant’s breach of
this warranty and representation.



     29.31 Communications and Computer Lines. Tenant may install, maintain, replace,
remove or use any communications or computer wires and cables (collectively, the “Lines”) at the
Project in or serving the Premises, provided that (i) Tenant shall obtain Landlord’s prior written
consent, use an experienced and licensed contractor approved in writing by Landlord, and comply
with all of the other provisions of Articles 7 and 8 of this Lease, (ii) an acceptable
number of spare Lines and space for additional Lines shall be maintained for existing and future
occupants of the Project, as determined in Landlord’s reasonable opinion, (iii) the Lines therefor
(including riser cables) shall be appropriately insulated to prevent excessive electromagnetic
fields or radiation, and shall be surrounded by a protective conduit reasonably acceptable to
Landlord, (iv) any new or existing Lines servicing the Premises shall comply with all applicable
governmental Laws, (v) Tenant shall pay all costs in connection therewith. Landlord reserves the
right to require that Tenant remove any Lines located in or serving the Premises which are
installed in violation of these provisions, or which are at any time in violation of any Laws or
represent a dangerous or potentially dangerous condition, and Landlord further reserves the right
upon the expiration or earlier termination of the Lease Term to require that Tenant remove any
Lines installed by or on behalf of Tenant and repair any damage in connection with such removal,
all at Tenant’s cost.



     29.32 Construction of Project and Other Improvements. It is specifically understood
and agreed that Landlord has made no representation or warranty to Tenant and has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or decorate the Premises,
Building or any part thereof and that no representations respecting the condition of the Premises
or the Building have been made by Landlord to Tenant except as specifically set forth herein or in
the Work Letter, if applicable. Tenant acknowledges that Landlord may renovate, improve, alter, or
modify (collectively, the “Renovations”) portions of the Project, the Building and/or the Premises
including without limitation the parking structure, if any, Common Areas, systems and equipment,
roof, and structural portions of the same following Tenant’s occupancy of the Premises, and that
such Renovations may result in excess levels of noise, dust, obstruction of access, etc. which are
in excess of that present in a fully constructed project Tenant hereby agrees that such
Renovations and Landlord’s actions in connection with such Renovations shall in no way constitute
a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent. Tenant hereby
waives any and all rent offsets or claims of constructive eviction which may arise in connection
with such construction. Landlord shall have no responsibility or for any reason be liable to
Tenant for any direct or indirect injury to or interference with Tenant’s business arising from
the Renovations, nor shall Tenant be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises or of Tenant’s personal property or
improvements resulting from the Renovations or Landlord’s actions in connection with such
Renovations, or for any inconvenience or annoyance occasioned by such Renovations or Landlord’s
actions.



     29.33 Prohibited Persons and Transactions. Tenant represents and warrants that neither
Tenant nor any of its affiliates, nor any of their respective partners, members, shareholders or
other equity owners, and none of their respective employees, officers, directors, representatives
or agents is, nor will they become, a person or entity with whom U.S. persons or entities are
restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of
the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked
Persons List) or under any statute, executive order (including the September 24, 2001, Executive
Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit,
or Support Terrorism), or other governmental action and is not and will not Transfer this Lease to,
contract with or otherwise engage in any dealings or transactions or be otherwise associated with
such persons or entities.



     29.34 Limitation on Remedies. Notwithstanding anything to the contrary in this Lease,
if (i) this Lease obligates Landlord to not unreasonably withhold, condition or delay Landlord’s
consent or approval for a particular matter, (ii) Landlord withholds, delays or conditions its
consent or approval for such matter, and (iii) Tenant believes that Landlord did so unreasonably,
then Tenant’s sole remedies shall be a declaratory judgment and



25









 







an injunction for the relief sought without any monetary damages, and Tenant hereby waives all
other remedies, including, without limitation, any right at law or equity to terminate this Lease.



     29.35 Reasonable Efforts. For purposes of this Lease, “reasonable efforts” by
Landlord shall not include an obligation to employ contractors or labor at overtime or other
premium pay rates or to incur any other overtime costs or additional expenses whatsoever.



     29.36 Roof Mounted Communication Devices. Tenant shall have the right, subject to the
limitations set forth herein, at its sole cost and expense, to construct, install, maintain and
operate one approximately eighteen inch (18”) round satellite dish (“Satellite Device”) on the
roof of the Building, expressly conditioned upon and limited by the following:



          (a) The precise location of the Satellite Device on the roof of the Building shall be subject
to the approval of Landlord not unreasonably withheld.




          (b) Landlord shall reasonably specify the method of shielding the Satellite Device from view,
or other decorative architectural features required to make the Satellite Device aesthetically
pleasing in Landlord’s reasonable discretion.




          (c) The installation, use, operation and maintenance of the Satellite Device by Tenant shall
be in compliance with all applicable Laws. In addition, Tenant shall maintain all permits
necessary for the maintenance and operation of the Satellite Device while it is on the Building
and operate and maintain the Satellite Device in such a manner so as not to unreasonably interfere
with any other satellite, antennae, or other transmission facility on the Building’s roof or in
the Building or the Project.




          (d) Before installing the Satellite Device, Tenant shall submit to Landlord for its approval
(which approval shall not be unreasonably withheld) plans and specifications which (1) specify in
detail the design, location, size, and frequency of the Satellite Device and (2) are sufficiently
detailed to allow for the installation of the Satellite Device in a good and workmanlike manner
and in accordance with all Laws affecting the Project. If Landlord approves of such plans, Tenant
shall install (in a good and workmanlike manner), maintain and use the Satellite Device in
accordance with all Laws and shall obtain all permits required for the installation and operation
thereof; copies of all such permits must be submitted to Landlord before Tenant begins to install
the Satellite Device.




          (e) Tenant’s access to the roof of the Building for purposes of installing and maintaining
the Satellite Device and related facilities shall be subject to such procedures, regulations and
limitations as Landlord may reasonably impose. To the extent any cost to operate the Satellite
Device is not separately metered to Tenant, Tenant shall reimburse Landlord for any cost incurred
in connection therewith, which payment shall be made within thirty (30) days after request
therefore.




          (f) In the event Landlord elects to perform repairs, maintenance or replacement of the roof
(“Roof Repairs”), Tenant will be responsible for relocation or removal of the Satellite Device in
order for Landlord to complete the Roof Repairs in a commercially reasonable manner. In the event
the Satellite Device is not removed or relocated in a timely fashion, Landlord shall have the right
to remove or relocate the Satellite Device. All costs related to the removal or relocation of the
Satellite Device pursuant to this Subparagraph (i) shall be the sole responsibility of the Tenant.
Landlord shall not be held liable for any interruptions or damage to the Satellite Device resulting
from the relocation or removal of the Satellite Device.




          (g) In the event the Satellite Device causes interference to Landlord or existing tenants of
the Project, Tenant will change the frequency on which it transmits and/or receives and take any
other steps necessary to eliminate the interference. If said interference cannot be eliminated
within a reasonable period of time, in the judgment of Landlord, then Tenant agrees to remove the
Satellite Device from roof of the Building.




          (h) Tenant specifically acknowledges and agrees that the terms and conditions of Section 10.1
of this Lease (Indemnity and Waiver) shall apply with full force and effect to the Satellite
Device and any portions of the roof accessed or utilized by Tenant, its representatives, agents,
employees or contractors




          (i) At the expiration or earlier termination of the Lease, Tenant must remove or
cause the removal of the Satellite Device and its related facilities from the Building at Tenant’s sole cost
and expense. Such removal shall be done in a good and workmanlike manner, and Tenant at its sole
cost and expense shall repair and restore any resulting injury or damage to the Building and
Common Areas. If Tenant fails to complete the removal by the expiration or earlier termination of
this Lease, then at Landlord’s election, the Satellite Device and its related facilities shall be
deemed abandoned and at Landlord’s option in its sole and absolute discretion, shall thereupon
become the property of Landlord, in which case Landlord may possess, use, dispose of and otherwise
enjoy the beneficial incidents of the ownership thereof as Landlord deems appropriate. Tenant
hereby irrevocably waives any rights it has to the contrary under applicable Laws.





26









 








ARTICLE 30

STATE LAW PROVISIONS




     30.1 Taxes



          30.1.1 Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially
or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real
property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the
State of California in the June 1978 election (“Proposition 13”) and that assessments, taxes, fees, levies and
charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road
maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or
occupants, and, in further recognition of the decrease in the level and quality of governmental services and
amenities as a result of Proposition 13, Tax Expenses shall also include any governmental or private assessments or
the Project’s contribution towards a governmental or private cost-sharing agreement for the purpose of
augmenting or improving the quality of services and amenities normally provided by governmental agencies.




          30.1.2 Notwithstanding anything to the contrary set forth in this Lease, the amount of Tax
Expenses for any Expense Year (other than the Base Year) shall be calculated without taking
into account any decreases in real estate taxes obtained in connection with Proposition 8, and, therefore, the
Tax Expenses in an Expense Year (other than the Base Year) may be greater than those actually incurred by
Landlord, but shall, nonetheless, be the Tax Expenses due under this Lease; provided that (i) any costs and
expenses incurred by Landlord in securing any Proposition 8 reduction shall not be included in Direct Expenses for
purposes of this Lease, and (ii) tax refunds under Proposition 8 shall not be deducted from Tax Expenses, but
rather shall be the sole property of Landlord. Landlord and Tenant acknowledge that this Section is not intended to in
any way affect (A) the inclusion in Tax Expenses of the statutory two percent (2.0%) annual increase in Tax
Expenses (as such statutory increase may be modified by subsequent legislation), or (B) the inclusion or
exclusion of Tax Expenses pursuant to the terms of Proposition 13, which shall be governed pursuant to the terms of
Section 1.5 of Exhibit B of this Lease. Any capitalized terms in this Section 30.1 not defined in this Lease
shall have the definitions ascribed to them in Exhibit B attached hereto.




     30.2
Waiver of Statutory Provisions.



          30.2.1 In addition to the waivers set forth in Section 6.3 of the Lease, Tenant, hereby
waives the provisions of California Civil Code Section 1932(1) due to an interruption, failure or
inability to provide any services.




          30.2.2 In connection with the waivers set forth in Section 7.2 of this Lease, (a) Tenant
hereby waives any and all rights under and benefits of subsection 1 of Section 1932 and Sections
1941 and 1942 of the California Civil Code or under any similar law, statute, or ordinance now or
hereafter in effect, and (b) Tenant waives the right to make repairs at Landlord’s expense under
Sections 1941 and 1942 of the California Civil Code, and under all other similar laws, statutes or
ordinances now or hereafter in effect.




          30.2.3 The provisions of this Lease, including Article 11, constitute an express agreement
between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any
part of the Premises, the Building or the Project, and any statute or regulation of the State
where the Building is located, including, without limitation, Sections 1932(2) and 1933(4) of the
California Civil Code, with respect to any rights or obligations concerning damage or destruction
in the absence of an express agreement between the parties, and any other statute or regulation,
now or hereafter in effect, shall have no application to this Lease or any damage or destruction
to all or any part of the Premises, the Building or the Project.




          30.2.4 In connection with the parties’ respective rights and obligations under Article 13 of
this Lease, Tenant hereby waives any and all rights it might otherwise have pursuant to Sections
1265.130 and 1265.150 of The California Code of Civil Procedure.




          30.2.5 The notice periods provided in Section 19.1 of this Lease are in lieu of, and not in
addition to, any notice periods provided by law, including, without limitation, under California
Code of Civil Procedure Section 1161 or any similar or successor law.




     30.3 Alterations. In addition to Tenant’s obligations under Article 9 of this Lease,
upon completion of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded
in the office of the Recorder of the County of in which the Project is located in accordance with
Section 3093 of the Civil Code of the State of California or any successor statute.



     30.4 Remedies. In addition to any other remedies set forth in Section 19.2 of this
Lease, Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor
may continue lease in effect after lessee’s breach and abandonment and recover rent as it becomes
due, if lessee has the right to sublet or assign, subject only to reasonable limitations).



     30.5 Conflicts. To the extent of any conflicts or inconsistencies between the terms
and provisions of this Article 30 and the terms and provisions of the remainder of this Lease, the
terms and provisions of this Article 30 shall control.




27









 







IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date
first above written.




	 	 	 	 	 	 	 
	 	 	“LANDLORD”	 	 
	 
	 	 	 	 	 	 
	 	 	BROADWAY 701 GATEWAY FEE LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:

Its:
	 	/s/ JASON P. SEMMEL
 

JASON P. SEMMEL
 

AUTHORIZED SIGNATORY
 

	 	   
	 
	 	 	 	 	 	 
	 	 	“TENANT”	 	 
	 
	 	 	 	 	 	 
	 	 	OXIGENE, INC., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ JAMES MURPHY	 	 
	 

	 	Name:
	 	 

JAMES MURPHY
	 	 
	 

	 	Its:
	 	 

VP + CFO
	 	 
	 

	 	 	 	 

	 	 






28









 











A-1









 











EXHIBIT
B

ADDITIONAL RENT DEFINED




1.
Definitions of Key Terms Relating to Additional
Rent. As used in this Exhibit B,
the following terms shall have the meanings hereinafter set forth:




     1.1 “Base Year” shall mean the period set forth in Section 12 of the Summary of the Lease.



     1.2 “Direct Expenses” shall mean “Operating Expenses” and “Tax Expenses.”



     1.3 “Expense Year” shall mean each calendar year in which any portion of the Lease
Term falls, through and including the calendar year in which the Lease Term expires, provided that
Landlord, upon notice to Tenant, may change the Expense Year from time to time to any other twelve
(12) month consecutive period, and, in the event of any such change, Tenant’s Share of Direct
Expenses shall be equitably adjusted for any Expense Year involved in any such change.



     1.4 “Operating Expenses” shall mean all expenses, costs and amounts of every kind and
nature which Landlord pays or accrues during the Base Year or any Expense Year, as applicable,
because of or in connection with the ownership, management, maintenance, security, repair,
replacement, restoration or operation of the Project, or any portion thereof (including allocations
to the Project from Costs Pools, as provided below). Without limiting the generality of the
foregoing, Operating Expenses shall specifically include any and all of the following: (i) the cost
of supplying all utilities, the cost of operating, repairing, maintaining, and renovating the
utility, telephone, mechanical, sanitary, storm drainage, and elevator systems, and the cost of
maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates,
permits and inspections and the cost of contesting any governmental enactments which may affect
Operating Expenses, and the costs incurred in connection with a transportation system management
program or similar program; (iii) the cost of all insurance carried by Landlord in connection with
the Project and any deductible amounts; (iv) the cost of landscaping, relamping, and all supplies,
tools, equipment and materials used in the operation, repair and maintenance of the Project, or any
portion thereof; (v) costs incurred in connection with the parking areas servicing the Project;
(vi) fees and other costs, including management fees, consulting fees, legal fees and accounting
fees, in connection with the management, operation, maintenance and repair of the Project; (vii)
payments under any equipment rental agreements and the fair rental value of any management office
space; (viii) wages, salaries and other compensation and benefits, including taxes levied thereon,
of all persons engaged in the operation, maintenance and security of the Project; (ix) payments,
fees or charges under any easement, license, operating agreement, declaration, restrictive
covenant, or any instrument pertaining to the sharing of costs by the Building or Project, or any
portion thereof; (x) operation, repair, maintenance and replacement of all systems and equipment
and components thereof of the Building (other than capital replacements, which are limited as set
forth in clause (xiii) below); (xi) the cost of janitorial, alarm, security and other services,
replacement of wall and floor coverings, ceiling tiles and fixtures in common areas, maintenance
and replacement of curbs and walkways, non-structural repair to roofs and re-roofing (provided that
any cost of re-roofing shall be treated as a capital cost in accordance with clause (xiii) below);
(xii) amortization (including interest on the unamortized cost) of the cost of acquiring or the
rental expense of personal property used in the maintenance, operation and repair of the Project,
or any portion thereof; (xiii) amortization in accordance with generally accepted accounting
principles, applied consistently to the Base Year and all subsequent Expense Years, of the costs of
capital expenditures and reasonable financing charges for (A) items that are primarily for the
purpose of (1) reducing or avoiding increases in Operating Expenses in Landlord’s good faith
estimate, or (2) promoting the health, safety or wellbeing of the Building and/or its occupants,
and/or their contractors, agents, invitees and guests, (B) replacing, modifying and/or adding
improvements or equipment mandated by any Governmental Requirement enacted or which take effect
after the date of this Lease and any repairs, disposals or removals necessitated thereby
(including, but not limited to, the cost of complying with Applicable Laws), or (C) any other cost
or expense necessary to carry out Landlord’s maintenance, repair, replacement and other obligations
under this Lease; provided, however, that any capital expenditure shall be amortized with interest
over its useful life as Landlord shall reasonably determine; (xiv) snow removal cost; and (xv)
costs, fees, charges or assessments imposed by, or resulting from any mandate imposed on Landlord
by, any federal, state or local government for fire and police protection, trash removal, community
services, or other services which do not constitute “Tax Expenses” as that term is defined in
Section 1.5, below. The following costs and expenses shall be excluded from Operating Expenses: (a)
expenses relating to leasing space in the Building (including tenant improvements, leasing and
brokerage commissions and advertising expenses); (b) legal fees and disbursements incurred for
collection of tenant accounts or negotiation of leases, or relating to disputes between Landlord
and other tenants and occupants of the Building; (c) capital items not specifically permitted by
this Section 1.4; (d) Tax Expenses; (e) costs of restoring any portion of the Project following a
casualty, but only to the extent of any amounts Landlord is entitled to receive on account of
proceeds of insurance; (f) except to the extent specifically provided in this Section 1.4,
depreciation or payments of principal and interest on any mortgages upon the Building; (g) payments
of ground rent pursuant to any ground lease covering the Building; (h) the costs of any service or
facility provided to any other tenant or occupant in the Building which either (I) Landlord is not
obligated to supply or furnish to Tenant or (II) is supplied or furnished to Tenant pursuant to the
terms of this Lease with separate or additional charge; (i) the cost of any work performed for any
other tenant or occupant in the Building which either (I) is not performed for Tenant or (II) is
performed for Tenant pursuant to the terms of this Lease with separate or additional charge (but
Landlord shall have the right to “gross-up” as if the floor was vacant); (j) payments made by
Landlord to a company or other entity affiliated with Landlord for goods and services to the extent
that such payments exceed the amounts that would have been paid to independent third parties for
goods and services of like kind in connection with the operation, repair, cleaning, maintenance,
management and security of the Building; (k) the cost of correcting any defects in the construction
of any portion of the Project to the extent actually covered by any warranty rights of Landlord;
(1) costs associated with the operation of the business of the



B-1









 







partnership or entity which constitutes the Landlord (hereinafter, the “Operational Entity”), as
the same are distinguished from the costs of operation of the Project (which shall specifically
include, but not be limited to, accounting costs associated with the operation of the Project),
including, but not limited to, costs of the Operational Entity accounting and legal matters, costs
of defending any lawsuits with any mortgagee or ground lessor (except as the actions of the Tenant
may be in issue), costs and fees incurred in the selling, syndicating, financing, mortgaging or
hypothecating any of the Landlord’s interest in the Project, and costs and fees incurred in
connection with any disputes between Landlord and its employees, between Landlord and Project
management, or between Landlord and other tenants, occupants or brokers, and Landlord’s general
corporate overhead and general and administrative expenses; (m) the wages and benefits of any
employee who does not devote substantially all of his or her employed time to the Project unless
such wages and benefits are prorated to reflect time spent on operating and managing the Project
vis-a-vis time spent on matters unrelated to operating and managing the Project; (n) the amount
paid as ground rental for the Project (or any portion thereof) by the Landlord, and attorneys,
fees’, transfer taxes and any other transactional costs or expenses associated with any ground
lease of the Project (or any portion thereof); (o) overhead and profit increment paid to the
Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the
extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated
third parties providing similar services in the San Francisco Bay Area on a competitive basis,
save and except for Landlord’s management fee which shall not be subject to this limitation, but
which in no event shall exceed three percent (3%) of the revenue generated by the Project during
the Lease Term; (p) any compensation paid to clerks, attendants or other persons in commercial
concessions operated by the Landlord; (q) costs arising from the gross negligence or willful
misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials
or services, and any interest and tax penalties incurred as a result of Landlord’s negligence,
inability or unwillingness to make payments or file returns when due; (r) operating reserves or
contingency amounts in excess of the amount allocated thereto in the Base Year; and (s) costs of
capital improvements and other capital costs incurred in connection with the Project that are not
included in clause (xiii) above; (t) costs of Landlord’s political or charitable contributions;
(u) costs incurred to comply with laws relating to the removal of any hazardous material (as
defined under applicable law) which was in existence in the Building or on the Project prior to
the Lease Commencement Date, and was of such a nature that a federal, State or municipal
governmental authority, if it had then had knowledge of the presence of such hazardous material,
in the state, and under the conditions that it then existed in the Building or on the Project,
would have then required the removal of such hazardous material or other remedial or containment
action with respect thereto; and costs incurred to remove, remedy, contain, or treat hazardous
material, which hazardous material is brought into the Building or onto the Project after the date
hereof by Landlord or any of its agents, employees, vendors, contractors or providers or materials
or services; and (V) any cost expressly excluded from Operating Expenses elsewhere in this Lease.



     If during any or all of a portion of the Base Year or any subsequent Expense Year, Landlord
is not furnishing any particular work or service (the cost of which, if performed by Landlord,
would be included in Operating Expenses) to a tenant who has undertaken to perform such work or
service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would reasonably have been
incurred during such period by Landlord if it had furnished such work or service to such tenant.
If the Project is not fully occupied during all or a portion of the Base Year or any Expense Year,
Landlord may elect to make an appropriate adjustment to the components of Operating Expenses for
such year to determine the amount of Operating Expenses that would have been incurred had the
Project been ninety five percent (95%) occupied; and the amount so determined shall be deemed to
have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year
shall not include market-wide labor-rate increases due to extraordinary circumstances, including,
but not limited to, boycotts and strikes, and utility rate increases due to extraordinary
circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other
shortages, or amortized costs relating to capital improvements. In no event shall the component of
Operating Expenses relating to electrical costs in any Expense Year be deemed to be less than the
component of Operating Expenses relating to electrical costs which is included in the Base Year.
Landlord shall not (i) make a profit by charging items to Operating Expenses that are otherwise
also charged separately to others and (ii) subject to Landlord’s right to adjust the components of
Operating Expenses described above in this paragraph, collect Operating Expenses from Tenant and
all other tenants in the Building in an amount in excess of what Landlord incurs for the items
included in Operating Expenses.



     If Landlord, in any Expense Year following the Base Year, begins providing any new category of
services which was not provided for in the Base Year (e.g., security) (the “New Services”), and as
a result of such New Services there is in an increase in Operating Expenses by more than five
percent (5%) in any Expense Year over the prior Expense Year, then for such period of time in which
such New Services apply, Operating Expenses for the Base Year shall be increased by the amount that
Landlord reasonably determines it would have incurred had Landlord provided such New Services
during the same period of time during the Base Year as such New Services were provided during such
subsequent Expense Year. If Landlord, in any Expense Year after the Base Year, discontinues any
type or category of service (including, without limitation, New Services), then for such period of
time in which such services are discontinued, Operating Expenses for the Base Year shall be
decreased by the amount that Landlord reasonably incurred for such type or category of service.



     l.5 Taxes. “Tax Expenses” shall mean all federal, state, county, or local governmental or
municipal taxes, fees, charges or other impositions of every kind and nature, whether general,
special, ordinary or extraordinary, (including, without limitation, real estate taxes, general and
special assessments, transit taxes, occupancy tax, leasehold taxes or taxes based upon the receipt
of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless
required to be paid by Tenant, ad valorem taxes, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and
other personal property used in connection with the Project, or any portion thereof), which shall
be paid or accrued during any Expense Year (without regard to any different fiscal year used by
such governmental or municipal



B-2









 







authority) because of or in connection with the ownership, leasing and operation of the Project,
or any portion thereof, including any allocation from Cost Pools. All assessments shall be paid by
Landlord in the maximum number of installments permitted by law.



     Tax Expenses shall include, without limitation: (i) any tax on the rent, right to rent or
other income from the Project, or any portion thereof, or as against the business of leasing the
Project, or any portion thereof; (ii) any assessment, tax, fee, levy or charge in addition to, or
in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax for any services as fire protection, street,
sidewalk and road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants all whether charged or assessed by the
United States of America, the state in which the Project is located, any county, city, district,
municipality or other governmental subdivision, court or agency or quasi-governmental agency and
any board, agency or authority associated with any such governmental entity, including the fire
department having jurisdiction over the Project; (iii) any increase in assessment, tax, fee, levy
or charge resulting from any sale, refinancing or other change in ownership of the Building, the
Project or any portion thereof; (iv) any assessment, tax, fee, levy, or charge allocable to or
measured by the area of the Premises or the Rent payable hereunder, including, without limitation,
any business or gross income tax or excise tax with respect to the receipt of such rent, or upon
or with respect to the possession, leasing, operating, management, maintenance, alteration,
repair, use or occupancy by Tenant of the Premises, or any portion thereof; and (v) any
assessment, tax, fee, levy or charge, upon this transaction or any document to which Tenant is a
party, creating or transferring an interest or an estate in the Premises.



     Any costs and expenses (including, without limitation, reasonable attorneys’ fees) incurred
in attempting to protest, reduce or minimize Tax Expenses shall be included in Tax Expenses in the
Expense Year such expenses are paid. If Tax Expenses for any period during the Lease Term or any
extension thereof are increased after payment thereof for any reason, including, without
limitation, error or reassessment by applicable governmental or municipal authorities, Tenant
shall pay Landlord upon demand Tenant’s Share of any such increased Tax Expenses included by
Landlord as Tax Expenses pursuant to the terms of this Lease. Notwithstanding anything to the
contrary contained in this Section 1.5 (except as set forth in Section 1.5(i), above), there shall
be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital
stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and
other taxes to the extent applicable to Landlord’s general or net income (as opposed to rents,
receipts or income attributable to operations at the Project), (ii) any items included as
Operating Expenses, and (iii) any fines, default interest and penalties accruing due to Landlord’s
failure to timely make payment of the amount due to the applicable taxing authority, and (iv) any
new assessments or bonds issued at Landlord’s written request for the Project, to the extent the
payments associated with such encumbrances are not intended to reduce Operating Expenses otherwise
payable under Section 1.4 above.



     1.6 “Tenant’s Share” shall for the Initial Premises is 4.134% and for the Must
Take Premises is 3.098%. Tenant’s Share was calculated by dividing the number of square feet of rentable area in
the Premises by the number of square feet of rentable area in the Building, and expressing such
quotient in the form of a percentage.


2. Allocation of Direct Expenses. Landlord shall have the right, from time to time, to
equitably allocate some or all of the Direct Expenses for the Project among different portions or
occupants of the Project (the “Cost Pools”), in Landlord’s discretion. Such Cost Pools may include,
but shall not be limited to, the office space tenants of a building of the Project or of the
Project, the residential space of a building of the Project or of the Project, and the retail space
tenants of a building of the Project or of the Project. The Direct Expenses within each such Cost
Pool shall be allocated and charged to the tenants and/or owners within such Cost Pool in a
reasonable manner (if not provided for pursuant to separate agreement).



3. Calculation and Payment of Additional Rent. If for any Expense Year ending or
commencing within the Lease Term, (a) Tenant’s Share of Operating Expenses for such Expense Year
exceeds Tenant’s Share of Operating Expenses applicable to the Base Year, then Tenant shall pay to
Landlord, in the manner set forth in Section 4, below, as Additional Rent, an amount equal to the
excess (the “Operating Expense Excess”), and (b) Tenant’s Share of Tax Expenses for such Expense
Year exceeds Tenant’s Share of Tax Expenses applicable to the Base Year, then Tenant shall pay to
Landlord, in the manner set forth in Section 4, below, as Additional Rent, an amount equal to the
excess (the “Tax Expense Excess,” together with Operating Expense Excess, the “Excess”).



4. Statement of Actual Direct Expenses and Payment by Tenant. Landlord shall endeavor to
deliver to Tenant no later than May 31st following the end of each Expense Year, a statement (the
“Statement”) which shall state in reasonable detail the Direct Expenses incurred or accrued for
such preceding Expense Year, and which shall indicate the amount of the Operating Expense Excess
and/or the Tax Expense Excess, as applicable. Upon receipt of the Statement for each Expense Year
commencing or ending during the Lease Term, if an Excess is present, Tenant shall pay, with its
next installment of Base Rent due, the full amount of the Excess for such Expense Year, less the
amounts, if any, paid during such Expense Year as “Estimated Excess,” as that term is defined in
Section 5, below. The failure of Landlord to timely furnish the Statement for any Expense Year
shall not prejudice Landlord or Tenant from enforcing its rights under this Exhibit B. Even
though the Lease Term has expired and Tenant has vacated the Premises, when the final determination
is made of Tenant’s Share of Direct Expenses for the Expense Year in which this Lease terminates,
if an Excess if present, Tenant shall immediately pay to Landlord such amount. The provisions of
this Section 4 shall survive the expiration or earlier termination of the Lease Term. Tenant waives
and releases any and all objections or claims relating to Direct Expenses for any calendar year
unless, within sixty (60) days after Landlord provides Tenant with the annual Statement for the
calendar year, Tenant provides Landlord written notice that it disputes the Statement (which notice
shall specify in detail the reasons for such dispute as to a particular item or items). If Tenant
disputes the Statement then, pending resolution of the dispute, Tenant shall pay the rent in
question to Landlord in the amounts provided in the disputed Statement.





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5. Statement of Estimated Direct Expenses. In addition, Landlord shall endeavor to deliver
Tenant a yearly
expense estimate statement (the “Estimate Statement”) which shall set forth Landlord’s reasonable
estimate (the
“Estimate”) of what the total amount of Direct Expenses for the then-current Expense Year shall be
and the
estimated excess (the “Estimated Excess”) as calculated by comparing the Operating Expenses and Tax
Expenses
for such Expense Year, which shall be based upon the Estimate, to the amount of Operating Expenses
and Tax
Expenses for the Base Year. The failure of Landlord to timely furnish the Estimate Statement for
any Expense
Year shall not preclude Landlord from enforcing its rights to collect any Estimated Excess under
this Exhibit B,
nor shall Landlord be prohibited from revising any Estimate Statement or Estimated Excess
theretofore delivered to
the extent necessary. Thereafter, Tenant shall pay, with its next installment of Base Rent due, a
fraction of the
Estimated Excess for the then-current Expense Year (reduced by any amounts paid pursuant to the
next to last
sentence of this Section 5). Such fraction shall have as its numerator the number of months which
have elapsed in
such current Expense Year, including the month of such payment, and twelve (12) as its denominator.
Until a new
Estimate Statement is furnished (which Landlord shall have the right to deliver to Tenant at any
time), Tenant shall
pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the
total Estimated
Excess set forth in the previous Estimate Statement delivered by Landlord to Tenant.



6. Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant shall be liable
for and
shall pay ten (10) days before delinquency, taxes levied against Tenant’s furniture, fixtures,
equipment and any
other personal property located in or about the Premises. If any such taxes on Tenant’s furniture,
fixtures,
equipment and any other personal property are levied against Landlord or Landlord’s property or if
the assessed
value of Landlord’s property is increased by the inclusion therein of a value placed upon such
equipment, furniture,
fixtures or any other personal property and if Landlord pays the taxes based upon such increased
assessment, which
Landlord shall have the right to do regardless of the validity thereof but only under proper
protest if requested by
Tenant, Tenant shall upon demand repay to Landlord the taxes so levied against Landlord or the
proportion of such
taxes resulting from such increase in the assessment, as the case may be.




     If the tenant improvements in the Premises, whether installed and/or paid for by Landlord or
Tenant and whether or not affixed to the real property so as to become a part thereof, are
assessed for real property tax purposes at a valuation higher than the valuation at which tenant
improvements conforming to Landlord’s “building standard” in other space in the Building are
assessed, then the Tax Expenses levied against Landlord or the property by reason of such excess
assessed valuation shall be deemed to be taxes levied against personal property of Tenant and
shall be governed by the provisions of Section 5, above.



     Notwithstanding any contrary provision herein, Tenant shall pay prior to delinquency any (i)
rent tax or sales tax, service tax, transfer tax or value added tax, or any other applicable tax
on the rent or services herein or otherwise respecting this Lease, (ii) taxes assessed upon or
with respect to the possession, leasing, operation, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Premises or any portion of the Project, including the Project
parking facility; or (iii) taxes assessed upon this transaction or any document to which Tenant is
a party creating or transferring an interest or an estate in the Premises.


7. Tenant’s Audit Rights. Within ninety (90) days after receipt of a Statement by Tenant
(the “Review
Period”), if Tenant disputes the amount set forth in the Statement, Tenant’s employees or an
independent certified
public accountant who is not compensated on a contingency fee or similar basis relating to the
results of such
review (which accountant is a member of a regionally recognized accounting firm), designated by
Tenant, may,
after reasonable notice to Landlord and at reasonable times, inspect Landlord’s records at
Landlord’s offices, at
Tenant’s sole cost and expense, provided that Tenant is not then in default after expiration of all
applicable cure
periods of any obligation under this Lease (including, but not limited to, the payment of the
amount in dispute) and
provided further that Tenant and such accountant or representative shall, and each of them shall
use their
commercially reasonable efforts to cause their respective agents and employees to, maintain all
information
contained in Landlord’s records in strict confidence. Tenant’s failure to dispute the amounts set
forth in any
Statement within the Review Period shall be deemed to be Tenant’s approval of such Statement and
Tenant,
thereafter, waives the right or ability to dispute the amounts set forth in such Statement. If
after such inspection,
but within thirty (30) days after the Review Period, Tenant notifies Landlord in writing that
Tenant still disputes
such amounts, a certification as to the proper amount shall be made, at Tenant’s expense, by an
independent
certified public accountant (the “Independent Accountant”) selected by Landlord and reasonable
acceptable to
Tenant, which certification shall be binding upon Landlord and Tenant. Landlord shall cooperate in
good faith with
Tenant and the accountant to show Tenant and the accountant the information upon which the
certification is to be
based. However, if such certification by the Independent Accountant proves that the Building Direct
Expenses set
forth in the Statement were (i) overstated by more than four percent (4%), then the cost of the
Independent
Accountant and the cost of such certification shall be paid for by Landlord, or (ii) overstated by
more than two
percent (2%) but less than four percent (4%), then the cost of the Independent Accountant and the
cost of such
certification shall be shared equally (i.e., each party shall pay for one-half of such costs) by
Landlord and Tenant.
Promptly following the parties receipt of such certification, the parties shall make such
appropriate payments or
reimbursements, as the case may be, to each other, as are determined to be owing pursuant to such
certification.





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EXHIBIT C 




WORK LETTER



1. TENANT IMPROVEMENTS. Landlord shall construct and, except as provided below to the
contrary,
pay for the entire cost of constructing (i) the tenant improvements to the Initial Premises
(“Initial Tenant
Improvements”) described in Schedule “1” attached hereto (the “Phase 1 Plans”), and (ii)
the tenant
improvements to the Must Take Premises (“Must Take Tenant Improvements”) generally described in
Schedule
“2” attached hereto, with the design and specifications therefore to be completed by
Landlord and approved by
Tenant (which approval shall not be unreasonably withheld, conditioned or delayed) within sixty
(60) days after the
effective date of this Lease (the “Phase 2 Plans”). Each of the Initial Tenant Improvements and the
Must Take
Tenant Improvements are sometimes referred to herein generally as “Tenant Improvements,” and
collectively as
the “Landlord’s Work”. Each of the Phase 1 Plans and the Phase 2 Plans are sometimes referred to
herein
generally as the “Plans,” and collectively as the
“Design Package”. The Design Package and the
Landlord’s Work
may be conducted in phases, and Tenant may request changes to any of the Plans after they have been
approved by
Landlord, provided that (a) the changes shall not be of a lesser quality than Landlord’s standard
specifications for
tenant improvements for the Building, as the same may be changed from time to time by Landlord (the
“Standards”); (b) the changes conform to applicable governmental regulations and necessary
governmental
permits and approvals can be secured; (c) the changes do not require building service beyond the
levels normally
provided to other tenants in the Building; (d) the changes do not have any adverse affect on the
structural integrity
or systems of the Building; (e) the changes will not, in Landlord’s opinion, unreasonably delay
construction of the
Landlord’s Work; and (f) Landlord has determined in its reasonable discretion that the changes are
of a nature and
quality consistent with the overall objectives of Landlord for the Building. If Landlord approves a
change
requested by Tenant to any of the Plans after such Plans have been approved by Landlord, then, as a
condition to
the effectiveness of Landlord’s approval, Tenant shall pay to Landlord upon demand by Landlord the
increased cost
attributable to such change, as reasonably determined by Landlord, but only to the extent that the
“Tenant
Improvements Costs” (as defined below) exceed the “Improvement Allowance” (as defined below). To
the extent
any such change results in a delay of completion of construction of either of the Tenant
Improvements, then such
delay shall constitute a delay caused by Tenant as described below. For purposes hereof, “Tenant
Improvement
Costs” means all costs and expenses incurred by Landlord to design, permit and construct the Tenant
Improvements, including any costs incurred by Landlord as a result of a change requested by Tenant
to any of the
Plans hereunder, and including, without limitation, any changes to the Base Building or Building
Systems, or both,
required as a result of the Tenant Improvements.



2. CONSTRUCTION OF TENANT IMPROVEMENTS. Landlord’s contractor shall commence and
diligently proceed (using commercially reasonable efforts) with the construction of the Initial
Tenant Improvements
promptly following mutual execution and delivery of this Lease and receipt of permits, and shall
endeavor (using
commercially reasonable efforts) to substantially complete the Initial Tenant Improvements by the
Estimated Initial
Premises Delivery Date, subject to Tenant Delays (as described in Section 4 below) and Force
Majeure Delays (as
described in Section 5 below). Landlord’s contractor shall commence and diligently proceed (using
commercially
reasonable efforts) with the construction of the Must Take Tenant Improvements, and shall endeavor
(using
commercially reasonably efforts) to substantially complete the Must Take Tenant Improvements by the
Estimated
Must Take Premises Delivery Date, subject to Tenant Delays (as described in Section 4 below) and
Force Majeure
Delays (as described in Section 5 below); provided, however, that in no event shall Landlord be
obligated to
commence construction for the Must Take Premises prior to the date upon which the current tenant of
the Must
Take Premises fully vacates the Must Take Premises, but subject to Tenant’s rights set forth in
Section 1.1 of the
Lease arising from Landlord’s failure to complete construction of the Must Take Tenant Improvements
by the
outside delivery date set forth therein. Promptly upon the commencement of the applicable Tenant
Improvements,
Landlord shall furnish Tenant with a construction schedule letter setting forth the projected
completion dates
therefor and showing the deadlines for any actions required to be taken by Tenant during such
construction, and
Landlord may from time to time during construction of such Tenant Improvements modify such
schedule.




3. SUBSTANTIAL COMPLETION; DELIVERY OF POSSESSION.




     (a) Substantial Completion; Punch-List. The Initial Tenant Improvements shall be deemed to be
“substantially completed” when Landlord: (a) is able to provide Tenant reasonable access to the
Initial Premises; (b) has substantially completed the Initial Tenant Improvements in accordance
with the Phase 1 Plans, other than decoration and minor “punch-list” type items and adjustments
which do not materially interfere with Tenant’s access to or use of the Initial Premises; and (c)
has obtained a temporary certificate of occupancy or other required equivalent approval from the
local governmental authority permitting occupancy of the Initial Premises; provided, however, that
if substantial completion of the Initial Tenant Improvements is delayed as a result of any Tenant
Delays described in Section 4 below, then substantial completion shall be the date that the Initial
Tenant Improvements would have been completed but for such Tenant Delays. The Must Take Tenant
Improvements shall be deemed to be substantially completed when Landlord: (a) is able to provide
Tenant reasonable access to the Must Take Premises; (b) has substantially completed the Must Take
Tenant Improvements in accordance with the Phase 2 Plans, other than decoration and minor
punch-list items and adjustments which do not materially interfere with Tenant’s access to or use
of the Must Take Premises; and (c) has obtained a temporary certificate of occupancy or other
required equivalent approval from the local governmental authority permitting occupancy of the Must
Take Premises; provided, however, that if substantial completion of the Must Take Tenant
Improvements is delayed as a result of any Tenant Delays described in Section 4 below, then
substantial completion shall be the date that the Must Take Tenant Improvements would have been
completed but for such Tenant Delays. Within ten (10) days after substantial completion of the
applicable Tenant Improvements, Tenant shall conduct a walk-through inspection of the applicable
portion of the Premises with Landlord and provide to Landlord a written punch-list




C-1









 







specifying those decoration and other punch-list items which require completion, which items
Landlord shall thereafter diligently complete; provided, however, that Tenant shall be
responsible, at Tenant’s sole cost and expense, for the remediation of any items on the punch-list
caused by Tenant’s acts or omissions. If the parties disagree on the applicable punch-list scope
of work (for instance, if Landlord alleges it is not responsible for an item requested to be
included in the applicable punch list), then any such dispute shall be resolved by binding
arbitration with the San Mateo, California office of the American Arbitration Association,
pursuant to the commercial rules of the American Arbitration Association; provided, however, that
Landlord shall perform the work subject to resolution of any such dispute, and arbitration shall
be used to determine the parties’ respective liability for the cost thereof, either as a cost of
the Landlord’s Work or as a cost payable by Tenant for alterations to the applicable portion of
the Premises.




     (b) Delivery of Possession. Landlord agrees to deliver possession of the Initial Premises to
Tenant when the Initial Tenant Improvements have been substantially completed in accordance with
Section (a) above; and Landlord agrees to deliver possession of the Must Take Premises to Tenant
when the Must Take Tenant Improvements have been substantially completed in accordance with
Section (a) above; subject in each case to Tenant’s early access rights to perform Tenant’s Work
prior to the applicable Commencement Date as provided in Section 2.5 of the Lease. Tenant
agrees that if Landlord is unable to deliver possession of the Premises to Tenant by the Estimated
Initial Premises Delivery Date and the Estimated Must Take Premises Delivery Date, the Lease shall
not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting
therefrom, nor shall the expiration date of the Term be in any way extended, but Tenant shall have
the rent credit rights and the termination rights set forth in Section 1.1 of the Lease if
delivery of the applicable portion of the Premises is delayed beyond the applicable outside date
set forth in Section 1.1 pursuant to any delays other than Tenant Delays or Force Majeure
Delays.


4. TENANT DELAYS. For purposes of this Work Letter Agreement, “Tenant Delays” shall mean
any
delay in the completion of either phase of the Tenant Improvements resulting from any or all of the
following: (a)
Tenant’s failure to timely perform any of its obligations pursuant to this Work Letter Agreement,
including any
failure to complete, on or before the due date therefor, any action item which is Tenant’s
responsibility pursuant to
the applicable Work Schedule or any schedule delivered by Landlord to Tenant pursuant to this Work
Letter
Agreement; (b) Tenant’s changes to the applicable Plans; (c) Tenant’s request for materials,
finishes, or
installations which are not readily available or which are incompatible with the Standards,
following notice from
Landlord that such situation exists; (d) any delay of Tenant in making payment to Landlord for
Tenant’s share of
any costs in excess of the cost of the applicable Tenant Improvements as described in the
applicable Plans; or (e)
any other act or failure to act by Tenant, Tenant’s employees, agents, architects, independent
contractors,
consultants and/or any other person performing or required to perform services on behalf of Tenant;
provided that
Tenant shall have received advanced written notice from Landlord of such act or failure and a
reasonable
opportunity to cure such act or failure.



5. FORCE MAJEURE DELAYS. For purposes of this Work Letter, “Force Majeure Delays” shall
mean
any actual delay beyond the reasonable control of Landlord in the construction of the Tenant
Improvements, which
is not a Tenant Delay and which is caused by any of the causes described in Section 29.16 of the
Lease; provided,
however, that the failure of the current tenant of the Must Take Premises to vacate the Must Take
Premises shall not
be deemed a Force Majeure Delay since the Estimated Commencement Date for the Must Take Premises
and the
outside delivery date set forth in Section 1.1 of the Lease incorporates a reasonable
period for Landlord to exercise
its legal remedies to cause such tenant to vacate the Must Take Premises upon the expiration of its
lease.



6.
ALLOCATION OF COSTS; IMPROVEMENT ALLOWANCE. Notwithstanding anything to the
contrary contained in this Work Letter, Landlord shall bear all Tenant Improvements costs to the
extent the total
Tenant Improvement Costs do not exceed Two Hundred Forty Four Thousand Two Hundred Eighty Seven
Dollars
($244,287.00) (the “Improvement Allowance”). Tenant shall bear all Tenant Improvement Costs (and
all other
costs or expenses incurred in connection with the design and construction of the Tenant
Improvements) in excess of
the Improvement Allowance (“Excess Tenant Improvement Costs”) in accordance with the provisions of
this
Work Letter. Notwithstanding any provision of this Work Letter to the contrary, Landlord shall have
no obligation
hereunder to make any payments or disbursements, or incur any obligation to make any payment or
disbursement,
in a total amount which exceeds the Improvement Allowance. Prior to the commencement of
construction of the
applicable Tenant Improvements, Landlord will submit to Tenant a written estimate of the cost (the
“Work Cost”)
to complete the applicable Tenant Improvement (the “Work Cost Estimate”). Within three (3) business
days after
receipt of the Work Cost Estimate, Tenant will either approve the Work Cost Estimate or disapprove
specific items
and submit to Landlord revisions to the applicable Plans to reflect deletions of and/or
substitutions for such
disapproved items. Upon Tenant’s approval of the Work Cost Estimate (such approved Work Cost
Estimate to be
hereinafter known as the “Work Cost Statement”), Landlord will have the right to purchase materials
and to
commence the construction of the items included in the Work Cost Statement. If the total costs
reflected in the
Work Cost Statement for the Initial Tenant Improvements and the Must-Take Tenant Improvements
exceed the
Improvement Allowance, Tenant agrees to pay such excess, as additional rent, within ten (10)
business days after
Tenant’s approval of the applicable Work Cost Estimate. Throughout the course of construction, any
differences
between the estimated Work Cost in the Work Cost Statement and the actual Work Cost will be
determined by
Landlord and appropriate adjustments and payments by Landlord or Tenant, as the case may be, will
be made
within ten (10) business days thereafter. Any unused portion of the Improvement Allowance upon
completion of
the Tenant Improvements will not be refunded to Tenant or be available to Tenant as a credit
against any
obligations of Tenant under the Lease. A summary of the final and actual costs and expenses
incurred by Landlord
for the Initial Tenant Improvements and for the Must-Take Tenant Improvements shall be promptly
provided by
Landlord to Tenant following completion of the Tenant Improvements, for Tenant’s insurance and
compliance
purposes.





C-2









 








SCHEDULE “1”

to

EXHIBIT C




PLANS AND SPECIFICATIONS FOR INITIAL TENANT IMPROVEMENTS





	1.	 	Paint all interior walls of Initial Premises which are currently painted with one-coat of building standard paint.
	 
	2.	 	Upgrade the existing walls of the copyroom/storage area to a fire-rated condition, including one (1) door/frame.
	 
	3.	 	Provide Building standard lock sets and keys on all new office doors.
	 
	4.	 	Provide Building standard fire extinguishers per building code.








C-3









 








SCHEDULE “2”

to

EXHIBIT C




GENERAL DESCRIPTION OF MUST TAKE TENANT IMPROVEMENTS





	1.	 	Demise the Must Take Premises and construct eight (8) interior offices, network wiring
cutouts/pull strings, receptacles, lighting in all the constructed offices to match existing offices in the premise
therein as well as in accordance with the plan attached as Exhibit 1 to this Schedule 2.
	 
	2.	 	Construct a wall in the open area along the windows, install door/frame and sidelight, and
relocate the electrical switches therein as well as in accordance with the plan attached as Exhibit 1 to this Schedule 2.
	 
	3.	 	Upgrade the existing walls of the server room to a fire-rated condition, including one (1) 20
minute rated Maple door and aluminum frame.
	 
	4.	 	Furnish and Install Herculite style door from lobby to the Must Take Premises therein as well
as in accordance with the plan attached as Exhibit 1 to this Schedule 2.
	 
	5.	 	Concurrently cap the sprinkler systems in (a) the server closet located in the Must Take
Premises and (b) the document control/audit room located in the Initial Premises, and add portable FM200 Fire
Suppression Systems (or reasonably acceptable alternatives thereto) within such areas.
	 
	6.	 	Install building standard carpet with coloring that matches the Initial Premises throughout
the Must Take Premises, other than where the existing VCT flooring is located on the break-room, copy-room and
storage-room (which existing VCT Flooring shall remain in place).
	 
	7.	 	Patch and paint all interior walls of the Must Take Premises with two coats of one color of
building standard paint to match Initial Premise, other than in the reception area.
	 
	8.	 	Patch and repair demo scars and walls throughout the Must Take Premises.
	 
	9.	 	All millwork to remain in-place, except for area within Must Take Premises to be demolished
as part of the Tenant Improvements.
	 
	10.	 	Install standard 24” sidelights in all new offices and conference rooms within Must Take Premises.
	 
	11.	 	Provide Building standard lock sets and keys on all new office doors.
	 
	12.	 	Provide Building standard fire extinguishers per building code.
	 
	13.	 	Remove all trash and debris.




C-1









 


















C-1









 








EXHIBIT D

RULES AND REGULATIONS




     Tenant shall faithfully observe and comply with the following Rules and Regulations. Landlord
shall not be responsible to Tenant for the nonperformance of any of said Rules and Regulations by
or otherwise with respect to the acts or omissions of any other tenants or occupants of the
Project. In the event of any conflict between the Rules and Regulations and the other provisions
of this Lease, the latter shall control.



     1. Tenant shall not alter any lock or install any new or additional locks or bolts on any
doors or windows of the Premises without obtaining Landlord’s prior written consent. Tenant shall bear
the cost of any lock changes or repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises, and any additional keys required by Tenant must be obtained from Landlord at a reasonable cost to be
established by Landlord. Upon the termination of this Lease, Tenant shall restore to Landlord all keys of
stores, offices, and toilet rooms, either furnished to, or otherwise procured by, Tenant and in the event of the loss of
keys so furnished, Tenant shall pay to Landlord the cost of replacing same or of changing the lock or locks
opened by such lost key if Landlord shall deem it necessary to make such changes.



     2. All doors opening to public corridors shall be kept closed at all times except for normal
ingress and egress to the Premises.



     3. Landlord reserves the right to close and keep locked all entrance and exit doors of the
Building during such hours as are customary for comparable buildings in the county where the Project is
located. Tenant, its employees and agents must be sure that the doors to the Building are securely closed and
locked when leaving the Premises if it is after the normal hours of business for the Building. Any tenant, its
employees, agents or any other persons entering or leaving the Building at any time when it is so locked, or any time when it
is considered to be after normal business hours for the Building, may be required to sign the Building register.
Access to the Building may be refused unless the person seeking access has proper identification or has a previously
arranged pass for access to the Building. Landlord will furnish passes to persons for whom Tenant requests same
in writing. Tenant shall be responsible for all persons for whom Tenant requests passes and shall be liable to
Landlord for all acts of such persons. The Landlord and his agents shall in no case be liable for damages for any error
with regard to the admission to or exclusion from the Building of any person. In case of invasion, mob, riot,
public excitement, or other commotion, Landlord reserves the right to prevent access to the Building or the Project
during the continuance thereof by any means it deems appropriate for the safety and protection of life
and property.



     4. No furniture, freight or equipment of any kind shall be brought into the Building without
prior notice to Landlord. All moving activity into or out of the Building shall be scheduled with
Landlord and done only at such time and in such manner as Landlord designates. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy property brought into the Building and also the
times and manner of moving the same in and out of the Building. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute the
weight. Landlord will not be responsible for loss of or damage to any such safe or property in any case. Any damage to
any part of the Building, its contents, occupants or visitors by moving or maintaining any such safe or other
property shall be the sole responsibility and expense of Tenant.



     5. No furniture, packages, supplies, equipment or merchandise will be received in the Building
or carried up or down in the elevators, except between such hours, in such specific elevator and
by such personnel as shall be designated by Landlord.



     6. The requirements of Tenant will be attended to only upon application at the management
office for the Project or at such office location designated by Landlord. Employees of Landlord shall not
perform any work or do anything outside their regular duties unless under special instructions from Landlord.



     7. No sign, advertisement, notice or handbill shall be exhibited, distributed, painted or
affixed by Tenant on any part of the Premises or the Building without the prior written consent of the
Landlord. Tenant shall not disturb, solicit, peddle, or canvass any occupant of the Project and shall cooperate with
Landlord and its agents of Landlord to prevent same.



     8. The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any purpose
other than that for which they were constructed, and no foreign substance of any kind whatsoever
shall be thrown therein. The expense of any breakage, stoppage or damage resulting from the violation of this rule
shall be borne by the tenant who, or whose servants, employees, agents, visitors or licensees shall have caused
same.



     9. Tenant shall not overload the floor of the Premises, nor mark, drive nails or screws, or
drill into the partitions, woodwork or drywall or in any way deface the Premises or any part thereof without
Landlord’s prior written consent.



     10. Except for vending machines intended for the sole use of Tenant’s employees and invitees,
no vending machine or machines other than fractional horsepower office machines shall be
installed, maintained or operated upon the Premises without the written consent of Landlord.



     11. Tenant shall not use or keep in or on the Premises, the Building, or the Project any
kerosene, gasoline, explosive material, corrosive material, material capable of emitting toxic fumes, or
other inflammable or combustible fluid chemical, substitute or material. Tenant shall provide material safety data
sheets for any Hazardous Substance used or kept on the Premises.



     12. Tenant shall not without the prior written consent of Landlord use any method of heating
or air conditioning other than that supplied by Landlord.



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     13. Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas or
substance in or on the Premises, or permit or allow the Premises to be occupied or used in a manner offensive
or objectionable to Landlord or other occupants of the Project by reason of noise, odors, or vibrations, or
interfere with other tenants or those having business therein, whether by the use of any musical instrument, radio,
phonograph, or in any other way. Tenant shall not throw anything out of doors, windows or skylights or down passageways.



     14. Tenant shall not bring into or keep within the Project, the Building or the Premises any
animals, birds, aquariums, or, except in areas designated by Landlord, bicycles or other vehicles.



     15. No cooking shall be done or permitted on the Premises, nor shall the Premises be used for
the storage of merchandise, for lodging or for any improper, objectionable or immoral purposes.
Notwithstanding the foregoing, Underwriters’ laboratory-approved equipment and microwave ovens may be used in the
Premises for heating food and brewing coffee, tea, hot chocolate and similar beverages for employees and
visitors, provided that such use is in accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.



     16. The Premises shall not be used for manufacturing or for the storage of merchandise except
as such storage may be incidental to the use of the Premises provided for in Section 5.1 of the Lease.
Tenant shall not occupy or permit any portion of the Premises to be occupied as an office for a messenger-type
operation or dispatch office, public stenographer or typist, or for the manufacture or sale of liquor, narcotics, or
tobacco in any form, or as a medical office, or as a barber or manicure shop, or as an employment bureau without the
express prior written consent of Landlord.



     17. Landlord reserves the right to exclude or expel from the Project any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner
do any act in violation of any of these Rules and Regulations.



     18. Tenant shall use its reasonable efforts to ensure that its employees and agents shall not
loiter in or on the entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators,
vestibules or any Common Areas for the purpose of smoking tobacco products or for any other purpose, nor in any way obstruct
such areas, and shall use them only as a means of ingress and egress for the Premises.



     19. Tenant shall not waste electricity, water or air conditioning and agrees to cooperate
fully with Landlord to ensure the most effective operation of the Building’s heating and air conditioning
system, and shall refrain from attempting to adjust any controls. Tenant shall participate in recycling programs
undertaken by Landlord.



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



     21. Any persons employed by Tenant to do janitorial work shall be subject to the prior written
approval of Landlord, and while in the Building and outside of the Premises, shall be subject to and
under the control and direction of the Building manager (but not as an agent or servant of such manager or of
Landlord), and Tenant shall be responsible for all acts of such persons.



     22. No awnings or other projection shall be attached to the outside walls of the Building
without the prior written consent of Landlord, and no curtains, blinds, shades or screens shall be
attached to or hung in, or used in connection with, any window or door of the Premises other than Landlord standard window
covering. All electrical ceiling fixtures hung in the Premises or spaces along the perimeter of the Building
must be fluorescent and/or of a quality, type, design and a warm white bulb color approved in advance in writing
by Landlord. Neither the interior nor exterior of any windows shall be coated or otherwise sunscreened without the
prior written consent of Landlord. Tenant shall be responsible for any damage to the window film on the exterior
windows of the Premises and shall promptly repair any such damage at Tenant’s sole cost and expense. Tenant
shall keep its window coverings closed during any period of the day when the sun is shining directly on the
windows of the Premises. Prior to leaving the Premises for the day, Tenant shall draw or lower window
coverings and extinguish all lights. Tenant shall abide by Landlord’s regulations concerning the opening and closing of
window coverings which are attached to the windows in the Premises, if any, which have a view of any interior
portion of the Building or Building Common Areas.



     23. The sashes, sash doors, skylights, windows, and doors that reflect or admit light and air
into the halls, passageways or other public places in the Building shall not be covered or obstructed
by Tenant, nor shall any bottles, parcels or other articles be placed on the windowsills.



     24. Tenant must comply with requests by the Landlord concerning the informing of their
employees of items of importance to the Landlord.



     25. Tenant must comply with all applicable “NO-SMOKING” and sorting of recyclable waste or
similar ordinances. If Tenant is required under the ordinance to adopt a written smoking
policy, a copy of said policy shall be on file in the office of the Building.



     26. Tenant hereby acknowledges that Landlord shall have no obligation to provide guard service
or other security measures for the benefit of the Premises, the
Building or the Project. Tenant
hereby assumes all responsibility for the protection of Tenant and its officers, partners, contractors,
subcontractors, consultants, licensees, agents, concessionaires, subtenants, servants, employees, customers, guests,
invitees or visitors, and the property thereof, from acts of third parties, including keeping doors locked and other means
of entry to the Premises closed, whether or not Landlord, at its option, elects to provide security protection
for the Project or any portion thereof. Tenant further assumes the risk that any safety and security devices,
services and programs which Landlord elects, in its sole discretion, to provide may not be effective, or may malfunction
or be circumvented by



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an unauthorized third party, and Tenant shall, in addition to its other insurance obligations
under this Lease, obtain its own insurance coverage to the extent Tenant desires protection
against losses related to such occurrences. Tenant shall cooperate in any reasonable safety or
security program developed by Landlord or required by law.




     27. All office equipment of any electrical or mechanical nature shall be placed by Tenant in
the Premises in settings approved by Landlord, to absorb or prevent any vibration, noise and
annoyance.



     28. Tenant shall not use in any space or in the public halls of the Building, any hand trucks
except those equipped with rubber tires and rubber side guards.



     29. No auction, liquidation, fire sale, going-out-of-business or bankruptcy sale shall be
conducted in the Premises without the prior written consent of Landlord.



     30. No tenant shall use or permit the use of any portion of the Premises for living quarters,
sleeping apartments or lodging rooms.



     31. Tenant shall not purchase spring water, ice, towels, janitorial or maintenance or other
similar services from any company or persons not approved by Landlord. Landlord shall approve a
sufficient number of sources of such services to provide Tenant with a reasonable selection, but only in such
instances and to such extent as Landlord in its judgment shall consider consistent with the security and proper operation
of the Building.



     32. Tenant shall install and maintain, at Tenant’s sole cost and expense, an adequate, visibly
marked and properly operational fire extinguisher next to any duplicating or photocopying machines or
similar heat producing equipment, which may or may not contain combustible material, in the Premises.



     Landlord reserves the right at any time to change or rescind any one or more of these Rules
and Regulations, or to make such other and further reasonable Rules and Regulations as in
Landlord’s judgment may from time to time be necessary for the management, safety, care and
cleanliness of the Premises, Building, the Common Areas and the Project, and for the preservation
of good order therein, as well as for the convenience of other occupants and tenants therein.
Landlord may waive any one or more of these Rules and Regulations for the benefit of any particular
tenants, but no such waiver by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of any other tenant, nor prevent Landlord from thereafter enforcing any such
Rules or Regulations against any or all tenants of the Project. Landlord shall not have any
obligation to enforce the Rules and Regulations or the terms of any other lease against any other
tenant, and Landlord shall not be liable to Tenant for violation thereof by any other tenant.
Tenant shall be deemed to have read these Rules and Regulations and to have agreed to abide by them
as a condition of its occupancy of the Premises.




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EXHIBIT E




701 GATEWAY BOULEVARD




NOTICE OF LEASE TERM DATES




	 	 	 	 	 	 	 	 	 	 	 
	DATE:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	To:

	 	 	 	 	 	Copy to:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Re:

	 	Office Lease	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 





Between:
Broadway 701 Gateway Fee LLC, a Delaware limited liability company, Lessor or Landlord, and




                    , a                    , Lessee or Tenant



In
accordance with the subject document we wish to advise you and/or confirm your tenancy of Suite      
on the       floor of 701 Gateway Boulevard, South San Francisco, CA 94080, and that the following terms
and conditions are accurate and in full force and effect:




	 	 	 	 	 
	Lease [or Must Take] Commencement Date

	 	Lease expiration date	 	 
	 
	 	 	 	 
	 


	 	 

	 	 





If the Lease Commencement Date is other than the first day of the month, the first billing will
contain a pro rata adjustment. Each billing thereafter, with the exception of the final billing,
shall be for the full amount of the monthly installment as provided for in the Lease.



We request that you sign this letter where indicated below, confirming the information provided
above, and return it to our representative below within five business days of receipt. A return
envelope is provided. Our failure to receive your executed Notice within such time period will
indicate your acceptance that the information set forth is correct. A second letter is enclosed
for your files.




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	Lease Administrator’s name
	 	Date	 	 	 	 	 	 	 	 
	 

	 	Lease Administration	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Agreed to and Accepted:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	By:
	 	 	 	Date
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 







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