##### 



EXHIBIT 10.9 *CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS` LEASE AGREEMENT BETWEEN PRENTISS PROPERTIES ACQUISITION PARTNERS, L.P.,  (Landlord) AND HYPERION SOLUTIONS CORPORATION,
a Delaware corporation (Tenant) 5450 and 5470 Great America Parkway
Santa Clara, California Dated: June 16, 2004




---



##### 



TABLE OF CONTENTS ARTICLE
    
    PAGEARTICLE 1BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS
    
    
    1ARTICLE 2PREMISES AND QUIET ENJOYMENT
    
    
    1ARTICLE 3TERM; COMMENCEMENT DATE; DELIVERY AND ACCEPTANCE OF PREMISES
    
    
    2ARTICLE 4RENT
    
    
    2ARTICLE 5TAXES
    
    
    3ARTICLE 6OPERATING COSTS
    
    
    5ARTICLE 7SERVICES
    
    
    8ARTICLE 8ASSIGNMENT AND SUBLETTING
    
    
    9ARTICLE 9REPAIRS
    
    
    11ARTICLE 10ALTERATIONS
    
    
    13ARTICLE 11LIENS
    
    
    15ARTICLE 12USE AND COMPLIANCE; HAZARDOUS SUBSTANCES
    
    
    16ARTICLE 13DEFAULT AND REMEDIES
    
    
    18ARTICLE 14INSURANCE
    
    
    20ARTICLE 15DAMAGE BY FIRE OR OTHER CAUSE
    
    
    23ARTICLE 16CONDEMNATION
    
    
    24ARTICLE 17INDEMNIFICATION
    
    
    25ARTICLE 18SUBORDINATION
    
    
    26ARTICLE 19SURRENDER OF THE PREMISES AND HOLDOVER
    
    
    27ARTICLE 20[INTENTIONALLY OMITTED.]
    
    
    28ARTICLE 21MISCELLANEOUS
    
    
    28




---



##### 



ARTICLE
    
    PAGEARTICLE 22RENEWAL OPTIONS
    
    
    33ARTICLE 23RIGHT OF FIRST OFFER TO LEASE BUILDING 10
    
    
    36ARTICLE 24RIGHT OF FIRST OFFER TO PURCHASE
    
    
    38ARTICLE 25RIGHT OF FIRST OFFER FOR NEW IMPROVEMENTS
    
    
    39ARTICLE 26CAFETERIA
    
    
    42ARTICLE 27PERSONAL PROPERTY
    
    
    43ARTICLE 28SIGNAGE
    
    
    44ARTICLE 29COMPETITION
    
    
    45ARTICLE 30SATELLITE DISH
    
    
    45
 EXHIBITS AND RIDERS The following Exhibits and Riders are attached hereto and by this reference
made a part of this Lease: SCHEDULE 1.1
    
    DEFINITIONSEXHIBIT A
    
    FLOOR PLAN OF THE PREMISESEXHIBIT B
    
    THE LANDEXHIBIT C
    
    RENT SCHEDULEEXHIBIT D
    
    WORK LETTEREXHIBIT E
    
    FORM OF COMMENCEMENT NOTICEEXHIBIT F
    
    INVENTORY LISTEXHIBIT G
    
    LAND COSTS, DEVELOPMENT FEES, RETURN RATE AND
TENANT CREDIT ADJUSTMENTEXHIBIT H
    
    BROKERAGE COMMISSION AGREEMENTRIDER NO. 1
    
    RULES AND REGULATIONS




---



##### 



BASIC LEASE INFORMATION (Basic Lease Information) A. Additional Rent:
    
    The Additional Rent shall be all sums, otherthan Base Rent, due and payable by Tenantunder the Lease, including, but not limitedto, Tenants Share of Operating Costs.B. Base Rent:
    
    The Base Rent shall be the amounts set forthon the Base Rent Schedule attached hereto asExhibit C.C. Brokers:
    
    Cornish & Carey Commercial and Cushman &Wakefield.D. Buildings:
    
    The buildings commonly known as 5450 and 5470Great America Parkway, Santa Clara,California.E. Commencement Date:
    
    July 1, 2004, subject to the provisions ofArticle 3 hereof.F. Expiration Date:
    
    December 31, 2014, unless sooner terminatedor extended pursuant to the terms hereof.G. Land:
    
    That certain parcel of real estate describedin Exhibit B attached hereto.H. Landlords Address for Notice:
    
    Prentiss Properties Acquisition Partners, L.P.3890 W. Northwest Highway, Suite 400Dallas, Texas  75220Attention:  PresidentWith a copy to:Prentiss Properties Trust1901 Harrison Street, Suite 100Oakland, California 94612Attention:  Managing DirectorI. Landlords Address for Payment:
    
    Prentiss Properties Acquisition Partners, L.P.P.O. Box 100435Pasadena, CA  91189-0435




---



##### 



J. Landlords Contribution:
    
    $****.K. Lease Year:
    
    The first Lease Year shall be the periodfrom the Commencement Date to the last day ofthe twelfth (12th) full calendar monthfollowing the calendar month in which theCommencement Date occurs.  Thereafter, eachconsecutive twelve (12) calendar month periodshall constitute one (1) Lease Year.Notwithstanding anything contained herein tothe contrary, if the Commencement Date occurson the first (1st) day of a calendar month,the first Lease Year shall be twelve (12)full calendar months.L. Premises:
    
    The Buildings other than the UndergroundParking Area marked on the floor plansattached hereto as Exhibit A and theCafeteria marked on the floor plans attachedhereto as Exhibit A.M. Project:
    
    The Land and all improvements now or in thefuture thereon, including the Buildings andall Common Areas, commonly known as 5450,5470 and 5480 Great America Parkway, SantaClara, California.N. Rent:
    
    The Base Rent and the Additional Rent.O. Rentable Area of the Project:
    
    Landlord and Tenant agree that for allpurposes of this Lease the Rentable Area ofthe Project shall be deemed to be 306,412square feet.P. Rentable Area of the Premises:
    
    Landlord and Tenant agree that for allpurposes of this Lease the Rentable Area ofthe Premises shall be deemed to be 219,721square feet.Q. Security Deposit:
    
    ****.




---



##### 



R. Tenants Address for Notice:
    
    Hyperion Solutions Corporation900 Long Ridge RoadStamford, Connecticut 06902Attn: Real Estate DirectorWith a copy to:Hyperion Solutions Corporation5450 Great American ParkwaySanta Clara, CA 95054Attn: General CounselWith a courtesy copy to:Hopkins & Carley,A Law Corporation70 S. First StreetSan Jose, CA  95113-2406Attn: Garth E. Pickett, Esq.Julie A. Frambach, Esq.S. Tenants Permitted Use:
    
    All aspects of a computer software company,including, but not limited to development,sales, marketing and general administrationand all other legally permitted uses, all ofwhich uses must be consistent with theoperation of a first-class office building.T. Tenants Share:
    
    71.71%U. Term:
    
    Ten (10) Lease Years and six (6) fullcalendar months.




---



##### 



LEASE AGREEMENT THIS LEASE AGREEMENT(this Lease) is made as of June    , 2004 (the
Effective Date) by and between Prentiss Properties Acquisition Partners,
L.P., a Delaware limited partnership (Landlord), and Hyperion Solutions
Corporation, a Delaware corporation (Tenant), upon all the terms set forth in
this Lease as follows: ARTICLE 1 BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS 1.1 The Basic Lease Information is made a part of this Lease, but the
provisions of this Lease addressing such matters in detail shall control over
any inconsistent provisions in the Basic Lease Information. All terms
capitalized but not otherwise defined herein shall have the respective meanings
given to them in the Basic Lease Information or Schedule 1.1 attached hereto. ARTICLE 2 PREMISES AND QUIET ENJOYMENT 2.1 Tenant hereby leases the Premises from Landlord upon the terms and
conditions set forth herein. The parties hereto agree that the interior walls
within the Buildings as shown on Exhibit A may not accurately reflect the
location or existence of the interior walls within the Buildings as of the
Effective Date. During the Term, Tenant shall have the non-exclusive right to
use the Common Areas in accordance with the rules and regulations set forth on
Rider No. 1 attached hereto (the Rules and Regulations). 2.2 Provided Tenant fully and timely performs all the terms of this Lease
on Tenants part to be performed, including payment by Tenant of all Rent,
Tenant shall have, hold and enjoy the Premises during the Term without
disturbance from or by Landlord or those claiming through Landlord, subject to
the terms of this Lease. 2.3 As of the Effective Date, Landlord represents and warrants that
Landlord has insurable title to the Premises and the Project in fee simple,
subject to only those matters set forth on Schedule B of that certain
Commitment prepared by First American Title Insurance Company as Order No.
NCS-67122-SC dated April 20, 2004, a copy of which Landlord has previously
delivered to Tenant and to the best of Landlords knowledge, no other
tenancies, covenants, conditions, restrictions, encumbrances or easements of
record. Landlord shall obtain a leasehold title insurance policy from First
American Title Insurance Company to be issued to Tenant simultaneous with
Landlords owners title insurance policy in the amount of ****, which shall be
the same amount as in Landlords policy, provided that Landlord shall pay any
cost in connection with the issuance of such policy in excess of $500, and
Tenant shall reimburse Landlord for any cost up to $500. 1




---



##### 



ARTICLE 3 TERM; COMMENCEMENT DATE; DELIVERY AND ACCEPTANCE OF PREMISES
 3.1 The Commencement Date shall be the later of (a) July 1, 2004 or (b)
the date Landlord delivers possession of the Premises to Tenant. The
Commencement Date shall be confirmed, along with other matters, by written
notice sent by Landlord substantially in the form of Exhibit E attached hereto
(the Commencement Notice). From and after the Effective Date and prior to
the Commencement Date, Tenant may have access to the Premises for the purpose
of performing the Leasehold Improvements, subject to all of the terms and
conditions of this Lease, including Exhibit D attached hereto, except that
Tenant shall have no obligation to pay Rent prior to the Commencement Date of
this Lease. In consideration of Tenant entering into this Lease and as an
inducement to lease the Premises for the Term, Landlord hereby represents,
warrants and covenants that to Landlords knowledge, there are no lawsuits or
proceedings currently pending against (i) Landlord or (ii) all or any portion
of the Project, whether involving eminent domain or otherwise, which would in
either (i) or (ii) above affect all or any portion of the Project or Tenants
use and enjoyment of thereof. Notwithstanding anything contained herein to the
contrary, in the event Landlord fails to deliver possession of the Premises to
Tenant, consisting of delivering keys and providing full access to the
Premises, on or before July 30, 2004, Tenant may thereafter at any time
terminate this Lease prior to the date Landlord does so deliver possession. 3.2 Subject to the terms of Article 9 hereof, Tenants occupancy of any
portion of the Premises shall be conclusive evidence that Tenant (a) has
accepted the Premises as suitable for Tenants purposes, in its as is, where
is condition without any representations or warranties except as specifically
set forth herein, and (b) without prejudicing any rights Tenant may have with
respect to any third parties, has waived any claims against Landlord with
respect to any defects in the Premises and the Project. ARTICLE 4 RENT 4.1 Tenant shall pay to Landlord, without notice, demand, offset or
deduction, in lawful money of the United States of America, at Landlords
Address for Payment, or at such other place or in such other manner as Landlord
shall designate in writing from time to time: (a) the Base Rent in equal
monthly installments, in advance, on the first day of each calendar month
during the Term commencing on the Commencement Date, and (b) the Additional
Rent, at the respective times required hereunder. The first monthly
installment of Base Rent shall be paid in advance on the date of Tenants
execution of this Lease and applied to the first installments of Base Rent
coming due under this Lease. If the Rent Commencement Date falls on a date
other than the first day of a calendar month or the Expiration Date occurs on a
date other than the last day of a calendar month, the Rent due for such
fractional month shall be prorated on a per diem basis for the portion of such
fractional month falling within the Term. 2




---



##### 



Notwithstanding the foregoing, Tenant shall not be liable for the payment
of Base Rent for the first **** of the Term. 4.2 Commencing with the third such installment in any twelve month period
that is not paid within five (5) days after its due date, all installments of
Rent not paid within five (5) days after their due date shall be subject to a
late charge of five percent (5%) of the amount of the late payment. In
addition, all installments of Rent not paid on their due date shall bear
interest from the 31st day after the date due until paid at a rate per annum
(the Interest Rate) equal to the greater of (i) ten percent (10%) or (ii)
four percent (4%) above the prime rate of interest (the Prime Rate) from time
to time publicly announced by Citibank, N.A., a national banking association,
or any successor thereof; provided, in no event shall the Interest Rate exceed
the maximum rate of interest then permitted by applicable law. As long as no
such failure to timely pay any installment of Rent matures into an Event of
Default, Landlord hereby waives Landlords right to collect any such late
charge or interest described herein if Landlord fails to deliver notice to
Tenant that such charge or interest has accrued within thirty (30) days
following the date such charge or interest is first due. ARTICLE 5 TAXES 5.1 Tenant shall pay before delinquency any and all taxes levied or
assessed upon or against trade fixtures, equipment, furniture, and other
personal property installed or located on the Premises (collectively the
personal property). If any personal property shall be assessed with the real
property comprising the Premises, Tenant shall pay to Landlord, as Additional
Rent, the amounts attributable to the personal property within thirty (30) days
after receipt of a written statement from Landlord setting forth the amount of
such taxes, assessments and public charges attributable to the personal
property. 5.2 Within thirty (30) days after receipt of the a copy of the bill
therefor issued by the applicable taxing body, Tenant shall pay to Landlord as
Additional Rent Tenants pro rata share of all Taxes which are assessed,
levied, confirmed, imposed or which become a lien upon the Project with respect
to any period of time within the Term, whether payable as a regular installment
of Taxes or as a result of a supplemental assessment or reassessment of Taxes.
Tenants pro rata share of Taxes shall be Tenants Share, subject to such
adjustment as Landlord may reasonably determine on an equitable basis taking
into account any extraordinary improvements on the Project. During the last
year of the Term, in addition to the payment of tax bills issued during such
year for the prior years Taxes, Tenant shall pay to Landlord monthly with each
of Tenants Operating Cost Payments a payment to cover Tenants pro rata share
of Taxes assessed against the Project that have accrued but not been paid. Any
such Taxes prorated on an estimated basis shall be reprorated by the parties
when the actual amount of such item becomes known. Any adjustment due to
reproration shall be effected not later than thirty (30) days following final
determination of the amount of such item and demand by the party to whom credit
is due. The provisions of this Section 5.2 shall survive the expiration or
termination of the Lease. 3




---



##### 



5.3 Tenant shall pay before delinquency any and all taxes levied or
assessed and which accrue during the Term (excluding, however, state and
federal personal or corporate income taxes measured by the net income of
Landlord from all sources, capital stock taxes, and estate and inheritance
taxes succession, transfer, gift or franchise taxes), whether or not now
customary or within the contemplation of the parties hereto, which are based
upon, measured by or otherwise calculated with respect to: (i) the gross or
net rental income of Landlord under this Lease, including, without limitation,
any gross receipts tax levied by any taxing authority, or any other gross
income tax or excise tax levied by any taxing authority with respect to the
receipt of the rental payable hereunder; (ii) the possession, lease, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises or any portion thereof; (iii) the value of any leasehold improvements,
alterations or additions made in or to the Premises, regardless of whether
title to such improvements, alterations or additions shall be in Tenant or
Landlord; or (iv) this transaction or any document to which Tenant is a party
creating or transferring an interest or an estate in the Premises. 5.4 Tenant acknowledges that Taxes for a given year are those Taxes that
accrue and are assessed for the Project in such year even if paid in a later
year. If at any time during the Lease Term the method of taxation prevailing
at the Commencement Date shall be altered so that any new or additional tax
assessment, levy, imposition, or charge, or any part thereof, shall be imposed
in place or partly in place of any Taxes or contemplated increase therein,
including without limitation any tax, assessment, levy, imposition or charge on
Rent, then all such taxes, assessments, levies, impositions or charges shall be
deemed to be Taxes for the purpose hereof, to the extent that such Taxes would
be payable if the Project was the only property of Landlord subject to such
tax. Taxes shall not include interest and penalties for late payment, except
to the extent that such penalty or interest is attributable to Tenants failure
to remit on a timely basis its payment of Taxes, in which case Tenant shall be
solely responsible for payment of such interest and/or penalty. If Taxes for
the Premises are not assessed separately from the Project and such interest or
penalty is attributable to such failure by Tenant and to other tenants failure
to pay their pro rata share of Taxes, Tenant shall pay its proportionate share
of the amount of such interest and/or penalty. Landlord may contest any
assessment of Taxes and the cost of such contest may be included as an
Operating Cost, up to the amount of any tax savings (unless Landlord conducted
such contest at Tenants request, in which case no such limitation shall
occur). Any net recovery realized by Landlord in a contest concerning the
imposition of Taxes shall be refunded to Tenant in proportion to the share paid
by Tenant for Taxes in the year in respect of which the refund is made. Tenant
may request that Landlord contest any assessment of Taxes. If Landlord refuses
to contest such Taxes, Tenant may do so on Landlords behalf. In such case,
Landlord agrees to reasonably cooperate with Tenant (at no expense to Landlord)
in any appeal of Taxes or assessments. Tenant will be entitled to its
proportionate share of any refund or reduction obtained through such appeal as
provided herein after first reimbursing Tenant for its costs reasonably
incurred in connection with such contest from such refund or reduction, and
shall be responsible for the full amount of any increase in Taxes or
assessments made as a result of such appeal. Promptly upon receiving the
initial assessed valuation of the Project from the County Tax Assessor of Santa
Clara, California, Landlord shall inform Tenant of such valuation. Landlord
agrees to consult with Tenant regarding any contest of such valuation. Any
contest of such valuation shall be made pursuant to the terms of this Section
5.4. Except as set forth herein, Tenant shall have no right to appeal Taxes or
assessments. 4




---



##### 



5.5 Notwithstanding anything contained in this Article 5 to the contrary,
Tenant shall not be required to pay any Taxes that are (1) fairly allocable to
any period of time prior to the Commencement Date or following the expiration
or sooner termination of this Lease (except for Tenants personal property
taxes as set forth in Section 5.1), (2) fairly allocable to any other tenants
personal property, (3) payable solely as a result of a default by Landlord
under this Lease or a default of any other tenant of the Project or (4) payable
solely as a result of any sale or transfer of the Land, Buildings or Premises,
or any part thereof, to a party that controls Landlord, is controlled by
Landlord or is under common control with Landlord, where control is defined
as set forth in Section 8.4 below (each, an Affiliate), provided in the event
that Landlord subsequently sells or transfers the Land, Buildings or Premises,
or any part thereof, to a party that is not an Affiliate, from and after such
sale or transfer on a going forward basis, Tenants obligation to pay Taxes
shall include any amount that previously had not been allocable to Tenant as a
result of the terms of this clause (4). ARTICLE 6 OPERATING COSTS 6.1 A. Beginning on the Commencement Date, Tenant shall pay to Landlord
at the same time as it is required to make payment of Base Rent, an
amount (the Operating Costs Payment) equal to one twelfth (1/12th) of
the estimated Tenants Share of Operating Costs attributable to the
Project for any full or partial year during the Term. Tenant
acknowledges that in connection with any particular Operating Cost,
notwithstanding the fixed percentage interest of Tenants Share set forth
in the Basic Lease Information, Landlord may fairly allocate such
Operating Cost among the users of the Project if using such users share
based on such users rentable square footage compared to the rentable
square footage of the Project results in an inequitable allocation of
such Operating Cost among the users of the Project. B. Prior to any year (or as soon thereafter as is reasonably
practicable) and from time to time during any year, Landlord shall notify
Tenant as to monthly installments of the Operating Costs Payment payable
by Tenant based on Landlords reasonable estimate of Operating Costs for
such year. Until such time as Landlord notifies Tenant of such estimate,
Tenant shall continue to make its Operating Costs Payment in the same
monthly amount as the prior year. On the first day of the calendar month
following thirty (30) days after Tenants receipt of Landlords notice of
any revised estimate in such installments, Tenant shall pay to Landlord
(in addition to the revised monthly estimate) a lump sum payment in an
amount so that Tenants total payments for the year will equal Landlords
revised estimate of Tenants aggregate Operating Costs Payment for such
year. If such lump sum payment amount exceeds the amount of Tenants
monthly payment for the immediately proceeding month, Tenant shall have
an additional thirty (30) days to pay such amount. The Operating Costs
Payment for the first calendar year in which the Term falls (if the
Commencement Date is other than January 1) and the last calendar year in
which the Term falls (if the Term ends on a date other than December 31)
shall be prorated based upon the number of days in the Term falling
within the year in question. 5




---



##### 



C. After Landlord shall have ascertained the actual amount of
Operating Costs for the prior year but in any case within one hundred
eighty (180) days of the end of such year (but subject to adjustment upon
receipt of additional information within twelve [12] months following the
end of any calendar year [an Amended Notice"]), Landlord shall notify
Tenant as to the amount of such Operating Costs and the Operating Costs
Payment resulting therefrom (an Annual Adjustment Notice). If the
Operating Costs Payment actually due exceeds total estimated payments
made by Tenant on account of Tenants Share of Operating Costs for such
year, then Tenant shall pay Landlord the full amount of any such
deficiency within thirty (30) days after receiving the Annual Adjustment
Notice. If the Operating Costs Payment actually due is less than the
total estimated payments made by Tenant on account of Tenants Share of
Operating Costs for such year, then Landlord shall, at its option, credit
any such excess to Rent next owing by Tenant or refund such excess to
Tenant, provided, at the end of the Term, Landlord shall refund such
excess to Tenant. The provisions of this Section 6.1 shall survive the expiration or termination
of this Lease. 6.2 If the Project is not fully occupied (meaning one-hundred percent
(100%) of the Rentable Area of the Project) during any full or partial year of
the Term, those Operating Costs which vary with the level of occupancy shall be
adjusted for such year to an amount which Landlord reasonably estimates would
have been incurred had the Project been the greater of ninety-five percent
(95%) occupied or the actual occupancy of the Project. In no event shall
Landlord collect from the tenants of the Project more than the actual Operating
Costs for such year. 6.3 The parties hereto agree that the measurements set forth in the Basic
Lease Information are, for the purposes of this Lease, correct and the parties
will not remeasure the Project or the Premises. If during the Term any change
occurs in either the number of square feet of the Rentable Area of the Premises
(by virtue of the addition of space to the Premises or the reduction in the
size of the Premises) or by addition to or subtraction from the Rentable Area
of the Project, effective as of the date of any such change, the addition or
subtraction of such Rentable Area of the Project or Rentable Area of the
Premises shall be measured using the same method of measurement as the parties
hereto used for the original measurement of the Premises as reasonably
determined by Landlord and reasonably approved by Tenant, and Tenants Share
shall be adjusted in accordance with such measurement. Landlord shall promptly
notify Tenant in writing of such change and the reason therefor. Any changes
made pursuant to this Section 6.3 shall not alter the computation of Operating
Costs as provided in this Article 6 or Taxes as provided in Article 5, but, on
and after the date of any such change, Tenants Share of Operating Costs and
Taxes shall be appropriately adjusted. If such estimated payments of Tenants
Share are so adjusted during a year, a reconciliation payment for Tenants
Share pursuant to this Article 6 for the calendar year in which such change
occurs shall be computed pursuant to the method set forth in Sections 6.1 and
6.2, such computation to take into account the daily weighted average of
Tenants Share of Operating Costs during such year. 6.4 Tenant shall have the right upon the delivery of written notice to
Landlord (Tenants Review Notice) and at reasonable times to review the books
and records of Landlord 6




---



##### 



relating to Tenants Operating Costs Payment. Such review shall take
place at the Project or the office of Landlords managing agent in the greater
San Francisco Bay Area and shall be at Tenants sole cost and expense. Tenant
must deliver Tenants Review Notice to Landlord within ninety (90) days after
Tenant has received its Annual Adjustment Notice for the prior year and must
complete its review with written notice to Landlord, specifying in detail the
reasons for any discrepancy as to a particular item within forty-five (45) days
after Landlord makes its books and records available to Tenant. Failure by
Tenant to deliver Tenants Review Notice to Landlord within such ninety (90)
day period or to perform its review and provide Landlord with such notice
within such subsequent forty-five (45) day period shall constitute a waiver of
Tenants rights to contest such Annual Adjustment Notice. Tenant shall pay the
full amount of Tenants Operating Costs Payment shown to be due on the Annual
Adjustment Notice without delay, but by doing so shall not, so long as it
timely complies with the time periods set forth above, waive its rights to
review Landlords books and records or to dispute the accuracy or
appropriateness of any such Annual Adjustment Notice or any items thereon as
provided in this Section 6.4. In the event Landlord provides an Amended
Notice, Tenant shall have the same rights with respect to the Amended Notice as
with the Annual Adjustment Notice as set forth in this Section 6.4. Tenant hereby agrees that all information disclosed in the books and
records shall be kept confidential and shall not be disclosed to any other
party, including, but not limited to, any other tenant in the Building. Tenant
further agrees to cause any third party engaged by Tenant to review said books
and records to execute and deliver a confidentiality agreement in a form
reasonably acceptable to Landlord prior to its performing any such review. In
addition, any accountants or other professional retained by Tenant to review
Landlords statement pursuant to this Section 6.4 shall be subject to
Landlords approval, not to be unreasonably withheld, conditioned or delayed.
Any accountant or professional retained by Tenant to perform such audit shall
be paid by Tenant on a fixed hourly basis and not on a contingency fee based
upon a percentage of the recovery of any discrepancy discovered. Tenant shall
pay all costs associated with such review, unless it is finally determined that
Landlords original determination of Tenants Operating Cost Payment was
overstated by more than three percent (3%), in which event the Landlord shall
pay the reasonable third party costs of such audit incurred by Tenant. If such
review discloses a discrepancy in Landlords calculation of Tenants Operating
Cost Payment, and Landlord agrees with such determination, Landlord shall
promptly pay to Tenant the amount of any overpayment by Tenant or Tenant shall
promptly pay to Landlord the amount of any underpayment by Tenant, as the case
may be. If Landlord delivers notice to Tenant that Landlord does not agree
with such determination of Operating Costs, Tenants accountant or other
professional retained by Tenant to perform such audit and Landlords regular
accountants shall select a third accounting firm from the Big 4 accounting
firms. If the two (2) accountants cannot agree on the selection of the third
accountant within ten (10) days of their selection, then either party may
request appointment of the third accountant by application to the JAMS. Once
the third accountant has been selected as provided for above, then, as soon
thereafter as practicable but in any case within fourteen (14) days, the third
accountant shall make his/her determination of the actual Operating Costs in
dispute and such determination shall be binding on both Landlord and Tenant.
The parties shall share equally in the costs of the third accountant. Subject
to Landlords obligations to pay Tenants third party costs as set forth
herein, any fees of any accountant or professional engaged directly by Landlord
or Tenant, however, shall be borne by the party retaining such accountant or
professional. 7




---



##### 



ARTICLE 7 SERVICES 7.1 During the Term and subject to the other terms of this Lease, Landlord
shall furnish Tenant with the following services: (a) cafeteria service in the
Cafeteria as set forth in Section 26.1 below; (b) exterior window washing at
least four (4) times each Lease Year; (c) electricity and gas for lighting,
incidental use and the heating, ventilation and air conditioning system
currently serving the Premises; and (d) water and sewer for restrooms and
breakrooms incidental to Tenants use. Other than electricity separately
metered to the Premises, all services referred to in this Section 7.1 shall be
provided by Landlord and paid for by Tenant on a prorata basis as part of the
Operating Costs Payment. With respect to electricity for the Premises,
Landlord shall, at Landlords expense, install submeters so as to separate the
use of electricity serving the Premises and electricity serving the remainder
of the Project. Tenant shall pay as Additional Rent to Landlord, within thirty
(30) days after receiving an invoice therefor, Landlords cost of electricity
serving the Premises based upon Tenants actual usage of such electricity.
Landlords billing of electricity to Tenant shall be without mark-up. 7.2 Except as expressly provided in this Lease, Landlord shall not be
obligated to furnish services to the Premises. Tenant shall cooperate with
Landlord at all times and, as reasonably necessary, allow Landlord reasonable
access to the Premises to provide such services, subject to the terms of
Section 21.24 below. 7.3 At all times during the Term, Tenant shall contract directly with
utility providers, at its sole expense, for all utilities other than
electricity, gas and water attributable to its use of the Premises. All such
utility payments shall be paid directly by Tenant on or prior to the date on
which the same are due to the utility provider. Tenant shall also obtain at
its expense any and all janitorial and security for the Premises as Tenant
desires. In addition, Tenant, at its cost, shall secure regular roof and
heating, ventilation and air conditioning system inspection and maintenance
services by professional maintenance services to the extent necessary to
maintain the Premises in a good condition comparable with the good condition
which the Premises are in as of the Effective Date, subject to ordinary wear
and tear and the provisions of Articles 15 and 16. Not more often than once
each calendar year upon advance written notice, Landlord may inspect at the
Premises Tenants maintenance, service and inspection plan for the heating,
ventilation and air conditioning, electrical, plumbing and mechanical systems
and the roof coverings. Tenant shall reasonably cooperate with such
inspection. Tenant shall cooperate fully with Landlord at all times and abide
by all reasonable regulations and requirements that Landlord may reasonably
prescribe for the proper functioning and protection of the heating, ventilation
and air conditioning, electrical, mechanical and plumbing systems and
maintenance and inspection of the roof coverings for the Premises. If Landlord
reasonably determines that Tenant has not fulfilled its obligations under this
Section 7.3, upon thirty (30) days prior written notice to Tenant (except in
the case of an emergency, when no such notice shall be required), Landlord may,
but need not, provide such services, and Tenant shall pay Landlord the cost
thereof within fifteen (15) days after Landlords written demand. 8




---



##### 



7.4 Except as set forth in Section 7.5 below, 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 and
telecommunication 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 Premises or Project after reasonable effort to do so, by
any riot or other dangerous condition, emergency, accident or casualty
whatsoever, by act or default of Tenant or other parties, or by any other
cause; and such failures or delays or diminution shall never be deemed to
relieve Tenant from paying Rent or performing any of its obligations under this
Lease. Furthermore, Landlord shall not be liable under any circumstances for a
loss of, or injury to, property or for injury to, or consequential damages to
Tenants business, through or in connection with or incidental to a failure to
furnish any of the services or utilities as set forth in this Article 7.
Tenant hereby waives any benefits of any applicable existing or future
Applicable Laws, including the provisions of California Civil Code Section
1932(1), permitting the termination of this Lease due to such interruption,
failure or inability to provide services for any limited duration. 7.5 Notwithstanding the foregoing, if (i) Landlord ceases to furnish any
service set forth in Section 7.1 above to the Premises, (ii) such cessation is
not caused by Force Majeure, (iii) such cessation has not arisen as a result of
an act or omission of Tenant or the Tenant Parties and (iv) as a result of such
cessation, the Premises (or a material portion thereof) is rendered unusable
for Tenants business purposes and Tenant in fact Ceases to Use such space,
then, as Tenants sole and exclusive remedy for such cessation (except as set
forth in Articles 15 and 16 below, which in the event of a casualty shall
govern), commencing on the sixth (6th) consecutive Business Day after Tenant
has informed Landlord of such cessation or Landlord otherwise has actual
knowledge of such cessation and all of the foregoing conditions have been met,
the Rent payable hereunder shall be equitably abated based on the percentage of
the Premises so rendered unusable for Tenants business purposes and that in
fact Tenant has Ceased to Use all or such portion of the Premises. Such
abatement shall continue until the earlier of (a) date the Premises become
usable again by the removal of such cessation of services or (b) date the
Tenant resumes use of the Premises. ARTICLE 8 ASSIGNMENT AND SUBLETTING 8.1 Tenant shall not, by operation of law or otherwise, (i) assign,
pledge, encumber or otherwise transfer this Lease or any part hereof, or the
interest of Tenant under this Lease, (ii) sublease all or any portion of the
Premises, or (iii) allow the Premises or any part thereof to be occupied or
used for any purpose by anyone other than Tenant, other than occupancy by
service providers and consultants to Tenant to the extent necessary to provide
such services and consultations (individually or collectively, a Transfer),
without first obtaining in each instance the prior written consent of Landlord.
Subject to the terms of Section 8.3 below, Landlords consent shall not be
unreasonably withheld or delayed. 9




---



##### 



8.2 A Transfer shall also be deemed to have occurred if (a) in a single
transaction or in a series of transactions more than 50% of the economic,
ownership or voting interests (whether stock, partnership interest, membership
interest or otherwise) in any of (i) Tenant, or any party directly or
indirectly owning or controlling Tenant, or (ii) any guarantor of this Lease,
or (b) Tenants obligations under this Lease are taken over or assumed in
consideration of Tenant leasing space in another office building. The transfer
of the publicly traded outstanding capital stock of any such parties through
the over-the-counter market or any recognized national securities exchange
shall not constitute a Transfer. 8.3 If Tenant desires to engage in a Transfer, Tenant shall give Landlord
written notice no later than fifteen (15) days in advance of the proposed
effective date of the Transfer specifying the name and business of the proposed
transferee or subtenant (the Transferee), the amount and location of the
space proposed to be subleased, the proposed Transferees financial statements,
the proposed terms of the Transfer and other information as Landlord may
reasonably request to evaluate the proposed Transfer. For Transfers that are
not Permitted Transfers (defined below), Landlord shall have fifteen (15) days
following receipt of such notice and other information requested by Landlord to
notify Tenant in writing that Landlord elects to: (i) permit Tenant to engage
in such Transfer which permission may be conditioned on Landlords receipt of
fifty percent (50%) of Bonus Rent (defined as rent received by Tenant from such
assignee or sublessee in excess of the rent paid by Tenant hereunder after
deducting reasonable attorneys fees, brokerage commissions, any tenant
improvement costs and other reasonably related costs) received by Tenant for
any Transfer of all or any portion of the Premises; (ii) in the event such
Transfer transfers more than 50,000 square feet of the Premises for
substantially all of then remaining Term, to recapture and terminate this Lease
with respect to any space that is the subject of the Transfer; or (iii)
reasonably withhold consent to such Transfer. If Landlord fails to timely
respond, Tenant may deliver a second notice to Landlord of Tenants desire to
so transfer the Premises or a portion thereof, which notice shall be captioned
in all capital letters FAILURE TO RESPOND SHALL CONSTITUTE DEEMED CONSENT.
If Landlord fails to consent or refuse consent within five (5) business days
following such second notice, Landlord shall be deemed to have elected the
option set forth in clause (i) of the immediately preceding sentence. Landlord may reasonably refuse to consent to a Transfer if (a) the
proposed Transferee is an assignee and not financially creditworthy or the
proposed Transferee is a governmental authority or agency, an organization or
person enjoying sovereign or diplomatic immunity, a medical or dental practice,
a so-called telecommunication service provider for housing equipment rather
than general office use, a current tenant or subtenant of the Project or a
prospective tenant to whom Landlord has made a written offer to lease space in
the Project and with whom Landlord is in active negotiations, unless Landlord
shall not have premises available to offer to such current or prospective
tenant at the time, (b) an Event of Default by Tenant then exists under this
Lease, (c) such assignment or subletting would cause a default under another
lease in the Project with respect to a ordinary and customary provision of such
lease, including, but not limited to, a restrictive use, exclusive or
non-competition provisions, or a violation of any Requirement, or (d) any
portion of the Project or Premises would likely become subject to additional or
different Requirements as a consequence of the proposed assignment or
subletting; provided, however, that the foregoing are merely examples of
reasons for which Landlord may 10




---



##### 



withhold its approval and shall not be deemed exclusive of any reasons for
reasonably withholding approval, whether similar or dissimilar to such
examples. In the event Tenant intends to offer the Premises or any portion
there of for sublease or to assign the Lease, upon Tenants written request
therefore, Landlord shall provide Tenant with a list of any restrictive use
provisions and/or exclusive or non-competition provisions contained in any then
existing leases for any portion of the Project. Tenant shall deliver to Landlord copies of all assignment or sublet
documents executed in connection with any Permitted Transfer that relate to
this Lease or other documents necessary to show the occurrence of such
Transfer. No Transfer shall relieve Tenant from any covenant, liability or
obligation hereunder (whether past, present or future) and Tenant shall remain
liable under this Lease as a principal and not as a surety. Landlords consent
to a Transfer shall not be deemed a consent to any subsequent Transfer. No
acceptance by Landlord of any Rent or any other sum of money from any
Transferee shall be deemed to constitute Landlords consent to any Transfer.
Any attempted Transfer by Tenant in violation of this Article 8 shall be void.
Tenant shall pay to Landlord, as Additional Rent, reasonable and customary
third party legal fees incurred by Landlord in connection with any proposed
Transfer (including a Permitted Transfer) requested or made. 8.4 Notwithstanding anything to the contrary in this Article 8, Tenant may
without the requirement of Landlords consent, without Landlords recapture
rights and without Landlords right to participate in any Bonus Rent, sublet
all or part of the Premises, or assign this Lease to: (a) any entity which
controls Tenant, is controlled by Tenant or is under common control with
Tenant; (b) a successor corporation or other entity into which or with which
Tenant is merged or consolidated; or (c) an entity which acquired substantially
all of Tenants assets (the activities described herein are referred to herein
as Permitted Transfers); provided that (i) such successor entity assumes all
of the obligations and liabilities of Tenant and, except in the case of a
Transfer made pursuant to subsection (a) above, has a tangible net worth at
least equal to the lesser of (1) the tangible net worth of Tenant as of the
date immediately prior to such Transfer or (2) the tangible net worth of Tenant
as of the Effective Date; and (ii) Tenant shall provide notice to Landlord of
the transfer within ten (10) days of the date of the Transfer. For purposes
hereof, control shall mean ownership of at least 51% of all the economic,
ownership and voting interests in such entity. ARTICLE 9 REPAIRS 9.1 Tenant shall keep the Premises (including the electrical, plumbing,
heating, life safety, ventilation and air conditioning systems, the roof
membrane, the elevator cabs and equipment (including shafts), the Leasehold
Improvements, the Premises Improvements and any Alterations whether or not
installed by or for Tenant) that are not the obligation of Landlord to maintain
hereunder in good order and in a safe, neat and clean condition.
Notwithstanding the foregoing, Landlord agrees, if requested by Tenant, to
assign to Tenant (without recourse or, if not assignable, to make good faith
diligent efforts to enforce on Tenants behalf, provided 11




---



##### 



Landlord shall not be required to incur out of pocket costs) any
warranties and other rights Landlord may have against any third party related
to elements of the Premises that Tenant is required to maintain hereunder while
reserving to itself the right to enforce such warranties and rights following
the termination of this Lease and with respect to those elements that Landlord
is required to maintain hereunder. Tenant hereby indemnifies and holds
Landlord harmless from any cost, damage or loss due to Tenants acts or
omissions with respect to such warranties and rights. Notwithstanding anything
to the contrary contained herein, in the event that any of the roof membrane,
window seals and glass systems, core building heating, ventilation and air
conditioning system, supplemental heating, ventilation and air conditioning
systems existing as of the Effective Date, core building electrical service
system, core building plumbing, back-up generators existing as of the Effective
Date (the Generators), UPS system and UPS batteries and the elevator systems
and the two approximately 5,000 gallon underground diesel storage tanks and any
other storage tanks (collectively, the Storage Tanks) servicing the Premises
or the Project (collectively, the Core Building Systems) require replacement,
rather than repair and maintenance (other than as a result of improper
maintenance, misuse or abuse by Tenant), upon Tenants request therefor,
Landlord shall replace such Core Building System and the cost of such
replacement shall be an Operating Cost, subject to the terms set forth in the
definition of Operating Costs with respect to such Core Building Systems. All
maintenance and repairs made by Tenant shall be performed in a good and
workmanlike manner and in accordance with the alteration provisions of Article
10. In addition, except as provided in Sections 9.2, 9.3 and 9.4, Tenant
shall, at, its expense and pursuant to the terms and conditions of this Lease,
promptly and adequately repair all damage to the Premises and replace or repair
all damaged, broken, or worn elements of the Premises that are not Landlords
obligation to maintain pursuant to Sections 9.2, 9.3 and 9.4 below, excepting
ordinary wear and tear and subject to the terms of Articles 15 and 16 below.
Notwithstanding anything to the contrary contained herein, at Landlords
option, if Tenant fails to commence to maintain the Premises or make repairs
and replacements as required under this Section 9.1 within thirty (30) days
following written notice to Tenant from Landlord (except in the case of an
emergency, when no such notice shall be required) and thereafter diligently and
continuously complete such maintenance, repairs or replacements, Landlord may
deliver a second notice to Tenant, which notice shall be captioned in all
capital letters FAILURE TO RESPOND MAY RESULT IN LANDLORD COMMENCING REPAIRS.
If Tenant fails to commence such repairs within five (5) business days
following such a second notice, Landlord may, but need not, perform such
maintenance or make such repairs and replacements, and Tenant shall pay
Landlord the cost Landlord incurred in connection therewith, within thirty (30)
days after Landlords written demand. 9.2 Subject to the provisions of Article 15 and Article 16, Landlord shall
maintain, repair and replace, at its sole cost and expense, and not as an
Operating Cost, the structural elements of the Project consisting of the
foundations, roof structures, column beams, load bearing and exterior walls and
structural elements of the Buildings and the foundations, column beams, load
bearing walls and structural elements of the Underground Parking Areas and any
future multi-floor parking structure on the Project. Except as set forth in
the immediately preceding sentence and subject to the limitations set forth in
the definitions concerning capital improvements and structural elements, in
addition to Landlords obligations with respect to Core Building Systems as set
forth in Section 9.1 above, Landlord shall maintain and repair the Common Areas
of the Project, Storage Tanks and Generators, the cost of which shall be 12




---



##### 



reimbursed as an Operating Cost. Upon written notice to Landlord, Tenant
may elect to maintain, at its own cost and expense, those Generators serving
solely the Premises. 9.3 Landlord agrees to deliver the Premises to Tenant on the Commencement
Date in a broom clean condition with the Core Building Systems in good
working order and repair and the Premises watertight (the Delivery
Condition). Tenant shall inform Landlord in writing of all failures of the
Delivery Conditions discovered by Tenant promptly following discovery thereof.
Any claim based on a failure of a Delivery Condition must be asserted in a
written notice by Tenant to Landlord given before the one hundred eightieth
(180th) day following the Commencement Date hereof (the Warranty Date), and,
if not asserted in writing before the Warranty Date, from and after the
Warranty Date such claim shall be void and of no force or effect.
Notwithstanding anything to the contrary contained herein, Tenant acknowledges
and agrees that Landlords sole liability with respect to any failure of a
Delivery Condition shall be (i) to cause the Premises to be placed in the
Delivery Condition, or (ii) for the cost thereof pursuant to the next
proceeding sentence. If Landlord fails to commence correcting any failure of a
Delivery Condition within thirty (30) days after receipt of notice from Tenant
given on or before the Warranty Date, Tenant shall have the right, but not the
obligation, to perform such work and charge Landlord the reasonable cost
therefore, which Landlord shall pay within thirty (30) days of receipt of the
invoice. Except as expressly set forth herein, 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. 9.4 Landlord represents and warrants to Tenant that if based upon current
interpretations of Requirements as of the Commencement Date, the Premises
(exclusive of furniture and equipment) fail to comply with Requirements,
including, without limitation, the Americans with Disabilities Act (the ADA),
Landlord will be solely responsible, at its cost, and not as an Operating Cost,
to correct such violation of the Requirements. Notwithstanding the foregoing,
Tenant shall be responsible for the cost of compliance with Requirements
triggered by Tenants particular use of the Premises, Tenants construction or
alteration thereof, Tenants breach of this Lease or future interpretations of
or changes to Requirements to the extent that such compliance would not
otherwise be Landlords obligation under the terms of Sections 9.2 or 9.3
above; provided, in no event shall Tenant be responsible for any alterations to
the Premises that are Landlords obligation to perform under the terms of
Section 9.2 above. Tenant shall inform Landlord in writing of all breaches of
Requirements that are Landlords obligation to correct that are discovered by
Tenant promptly following discovery thereof. Notwithstanding anything to the
contrary contained herein, Tenant acknowledges and agrees that Landlord shall
not be liable for any damages incurred by Tenant due to a failure of the
Premises to comply with Requirements as the Requirements are interpreted as of
the date of this Lease. ARTICLE 10 ALTERATIONS 10.1 The parties acknowledge that Tenant shall perform certain Leasehold
Improvements (as defined in Exhibit D hereto) as described in the Work Letter
attached hereto as 13




---



##### 



Exhibit D. Except for the Leasehold Improvements, which shall be governed
by the terms and conditions of the Work Letter and not this Article 10, Tenant
shall not make any alterations, improvements, additions or repairs (including
without limitation, Major Alterations, collectively Alterations) to the
Premises without first obtaining Landlords written consent thereto, which
consent shall not be unreasonably withheld, conditioned or delayed; provided,
however, (1) that Landlord may withhold its consent in its sole discretion to
any Alterations which (a) are visible from the exterior of the Buildings or the
Project, (b) may affect the Core Building Systems or any structural components
of the Buildings, or (c) are prohibited by any Requirements (individually and
collectively, a Major Alteration) and (2) Landlords consent is not required
for Permitted Alterations. As used herein, Permitted Alterations means
Alterations (a) that are not Major Alterations and (b) that cost less than one
hundred thousand and 00/100 dollars ($100,000.00) for each project. Tenant may
perform Permitted Alterations so long as Tenant informs Landlord in reasonable
detail of the nature of the Permitted Alteration and otherwise complies with
the provisions of this Article 10. Landlord may require that any alterations
that affect the Core Building Systems or the structural components of the
Buildings be performed by a contractor approved by Landlord, which approval
shall not be unreasonably withheld, conditioned or delayed. 10.2 Prior to commencing any Alteration other than a Permitted Alteration,
Tenant shall submit detailed plans and specifications for Landlords review and
approval. Landlord shall notify Tenant of its approval or disapproval of such
plans and specification and the work described therein within fifteen (15)
Business Days of receipt thereof. Landlord shall state in writing and in
reasonable detail any objection to such Alteration. Tenant may revise its
plans and specifications to incorporate such comments and, if Tenant does so,
it may again request Landlords consent pursuant to the process described
above. Neither approval of the plans and specifications nor supervision of the
Alteration by Landlord shall constitute a representation or warranty by
Landlord as to the accuracy, adequacy, sufficiency or propriety of such plans
and specifications or the quality of workmanship or the compliance of such
Alteration with Requirements. If Tenant desires to revise any plans and
specifications to any material extent after obtaining Landlords approval
thereof, Tenant shall re-submit such plans and specifications to Landlord for
its approval as provided above. 10.3 All Alterations shall (a) be performed in such a manner as to
maintain harmonious labor relations; (b) performed in compliance with good
construction safety practices; (c) comply with all applicable Requirements; (d)
be completed promptly and in a good and workmanlike manner and in accordance
with the plans and specifications reasonably approved by Landlord, if required;
(e) not unreasonably disturb Landlord or other tenants in the Project; (f) be
performed at Tenants sole cost and expense; (g) be performed pursuant to
validly issued building and construction permits; and (h) be performed by
contractors and subcontractors reasonably approved by Landlord prior to the
commencement of such work who possess the requisite experiences, personnel,
financial strength and other resources necessary to perform and complete the
proposed Alteration in a good and workmanlike lien free manner while preserving
all existing warranties related to the Premises of which Landlord has informed
Tenant in writing. After completion of any Alterations, Tenant will deliver to
Landlord (1) a copy of as built plans and specifications depicting and
describing such Alterations and (2) final sworn owners and contractors
statements and unconditional, full and final lien waivers covering all labor
and 14




---



##### 



materials included in such Alteration. During the performance of any
Alterations, Tenant shall maintain, and shall cause its contractors to
maintain, the insurance coverage described in Section 14.1A(v). 10.4 Each Alteration made by Tenant in or upon the Premises (excepting
only Tenants furniture, equipment and trade fixtures), whether temporary or
permanent in character, shall remain upon the Premises and shall become
Landlords property at the expiration or sooner termination of this Lease
without compensation to Tenant; provided, however, that Landlord shall have the
right to elect at the time Landlord gives its consent for such Alteration to
require Tenant to remove that Alteration immediately prior to the termination
of this Lease. To the extent specifically requested in writing by Tenant,
Landlord shall inform Tenant at the time Landlord consents to any Alteration
whether Landlord shall require removal of such Alteration at the expiration or
termination of this Lease. In addition, upon Tenants request regarding
specific existing or contemplated Permitted Alterations, Landlord shall inform
Tenant if Landlord will require Tenant to remove such Permitted Alterations at
the expiration or earlier termination of this Lease. Tenant shall, at its cost
and expense, effect such removal and restore the Premises to the condition
substantially similar to that existing immediately prior to the construction of
the Alteration on or before the expiration or termination of this Lease,
subject to normal wear and tear and the terms of Article 15 and 16 below. The
provisions of this Section 10.4 shall survive the expiration or any earlier
termination of this Lease. ARTICLE 11 LIENS Tenant shall keep the Project free from any liens arising from any work
performed, materials furnished, or obligations incurred by, or on behalf of
Tenant. If any lien is filed, such lien shall encumber only Tenants interest
in the Leasehold Improvements and Alterations on the Premises. Within twenty
(20) days after the filing of any such lien, Tenant shall notify Landlord of
such lien. Tenant shall, within twenty (20) days of the filing of such lien,
either (i) discharge and cancel such lien of record, (ii) contest the same with
diligence, in good faith and in accordance with applicable Requirements and
post a bond sufficient under the laws of the State of California to cover the
amount of the lien claim plus any penalties, interest, attorneys fees, court
costs, and other legal expenses in connection with such lien, or (iii) contest
the same with diligence, in good standing and in accordance with applicable
Requirements and obtain a title insurance endorsement for the Project insuring
over the lien (together with the costs of defense) in a form and from a title
insurance company reasonably acceptable to Landlord or its Secured Party. If
Tenant fails to timely satisfy its obligations set forth in the previous
sentence within the time periods set forth herein, Landlord may, but is not
required to, post a bond, and Tenant shall reimburse Landlord within three (3)
Business Days after notice to Tenant, as Additional Rent, for all amounts so
paid by Landlord, including expenses and attorneys fees, together with
interest thereon until paid at the Interest Rate. 15




---



##### 



ARTICLE 12 USE AND COMPLIANCE; HAZARDOUS SUBSTANCES 12.1 The Premises shall be used only for Tenants Permitted Use and for no
other purposes whatsoever. 12.2 Subject to the terms of Article 9 hereof, including Landlords
obligations set forth in Sections 9.2, 9.3 and 9.4, Tenant shall, at Tenants
sole expense, comply with all Requirements concerning Tenants particular use
of the Premises and indemnify and hold Landlord and the Landlord Parties
harmless from any losses, damages, costs, claims or expenses including all
reasonable attorneys fees and consultant fees (collectively, Claims) which
the Landlord Parties incur or suffer by reason of Tenants failure to comply
with such obligations. If Tenant receives notice of any violation of any
Requirements, Tenant shall promptly notify Landlord in writing of such alleged
violation and furnish Landlord with a copy of such notice. Except as set forth
in that certain ADA Due Diligence Review for 3Com Pal Site Buildings 8, 9 & 10
dated May 11, 2004 prepared by Studios Architecture, Property Condition
Evaluation dated April 30, 2004 prepared by EMG, Seismic Risk Assessment dated
April 30, 2004 prepared by EMG, Phase I Environmental Site Assessment dated
April 30, 2004 prepared by Arcadis G&M, Inc., Phase I Environmental Site
Assessment dated October 10, 2001 prepared by LFR (Levine Fricke) and
Environmental Impact Report PAL Site Expansion Project dated December 1996
prepared by Environ Corporation, Wetlands Research Associates and H.T. Harvey &
Associates, Barton-Aschman Associates, Inc., and Donald Ballanti, to Landlords
actual knowledge, as of the Effective Date, there are no Hazardous Substances
present in, on, under or about the Premises or the Project in violation of
Requirements, and no action, proceeding, or claim is pending concerning any
Hazardous Substances or pursuant to any Hazardous Substances Requirements.
Landlord shall defend, indemnify and hold Tenant harmless from and against all
reasonable investigation and remediation costs in connection with the presence
of any Hazardous Substances existing in, on, under or about the Premises or the
Project prior to the Effective Date. Further during the term of this Lease,
Landlord shall maintain (a) pollution legal liability insurance covering the
Project as a part of a blanket policy with liability limits of no less than
**** and (b) underground storage tank insurance with liability limits of not
less than the greater of **** or those limits which satisfy all applicable
Requirements, and each such policy shall name Tenant as an additional insured
thereunder, so long as such insurance policies are generally available and may
be purchased on commercially reasonable terms. Landlords obligations under
this Section 12.2 shall survive the termination or expiration of this Lease. 12.3 Except for (i) amounts of Hazardous Substances (as hereinafter
defined) which are a part of or contained in customary office and janitorial
and maintenance supplies and/or equipment and (ii) diesel fuel stored in the
Storage Tanks servicing the generators, and then with respect to both items (i)
and (ii) only if used, stored and disposed of in accordance with the
manufacturers instructions and all applicable Requirements, Tenant shall not,
nor shall Tenant permit the Tenant Parties to, use, store, generate, treat,
release or dispose any Hazardous Substance at, on or under the Project. Tenant
shall indemnify, defend and hold the Landlord Parties harmless from all Claims
arising from or attributable to any breach by Tenant of the covenants contained
in this Section 12.3, as well as the use of any Hazardous Substances as 16




---



##### 



permitted by this Section 12.3. Tenants indemnification obligations
hereunder shall survive the termination or expiration of this Lease. 12.4 The Tenant Parties shall comply with all reasonable Rules and
Regulations. Landlord shall at all times have the right to make reasonable
changes and additions to such Rules and Regulations. Any failure by Landlord
to enforce any of the Rules and Regulations now or hereafter in effect, either
against Tenant or any other tenant in the Building, shall not constitute a
waiver of any such Rules and Regulations. Landlord shall not be liable to
Tenant for the failure or refusal by any other tenant, guest, invitee, visitor,
or occupant of the Building to comply with any of the Rules and Regulations
provided Landlord shall use reasonable efforts to enforce the Rules and
Regulations. Landlord shall not enforce such Rules and Regulations against the
tenants of the Project on a discriminatory basis. 12.5 Tenant and Tenants invitees, employees and agents shall be entitled
to utilize, without charge, commencing on the Commencement Date, six hundred
seventy four (674) parking spaces in the Project parking areas, included within
such allotment, Tenant and the Tenant Parties and their successors shall be
entitled to use on an exclusive, reserved basis the parking spaces marked on
Exhibit A hereto as the Reserved Spaces. Landlords sole obligation with
respect to such Reserved Spaces shall be to mark such spaces as being for
Tenants use. Tenant shall cause its employees, invitees and agents to comply
with the Rules and Regulations which are prescribed from time to time by
Landlord for the orderly operation and use of the parking areas where the
parking is located, including any sticker or other identification system
established by Landlord, provided they are non-discriminatory. If Tenant fails
to observe the Rules and Regulations with respect to parking and such failure
continues for an additional five (5) days after written notice from Landlord to
Tenant, then Landlord, at its option, may remove particular vehicles of Tenant
and/or of its employees, licensees, contractors or invitees and all of Tenants
personal property from the parking areas to the extent that such vehicles or
property are in violation of such Rules and Regulations. Landlord shall not be
liable for any damage or loss to any automobile (or property therein) parking
in, on or about such parking areas, or for any injury sustained by any person
in or about such areas. Tenant shall not tow cars or otherwise enforce its
parking rights against third parties other than Tenant Parties and Tenants
assignees and sublessees. The parking provided to Tenant pursuant to this
Section 12.5 is provided to Tenant solely for use by Tenants own personnel,
visitors and Tenants occupants and such parking spaces may not be transferred,
assigned, subleased or otherwise alienated by Tenant, except on a pro-rata
basis in connection with a Permitted Transfer or an assignment or subletting or
use by contractors of the Premises made in accordance with the terms of this
Lease. Notwithstanding anything to the contrary contained herein, Landlord may
reserve specific parking areas for other tenants of the Project covering a
number of parking spaces which is approximately proportionate (based on square
footage of premises) with the number of reserved parking spaces Landlord has
granted Tenant hereunder. 17




---



##### 



ARTICLE 13 DEFAULT AND REMEDIES 13.1 The occurrence of any one or more of the following events shall
constitute an Event of Default under this Lease: (a) Tenant fails to pay any
Rent hereunder as and when such Rent becomes due and such failure shall
continue for more than five (5) days after written notice from Landlord that
the same is due; (b) the Premises become abandoned for more than fourteen (14)
consecutive days as such abandonment may be determined pursuant to the terms of
California Civil Code Section 1951.3; (c) Tenant permits to be done anything
which creates a lien upon the Premises and fails to satisfy its obligations as
required by Article 11; (d) Tenant violates the provisions of Article 8 by
making an unpermitted Transfer which is not cured within thirty (30) days of
notice thereof; (e) Tenant fails to maintain in force all policies of insurance
required by this Lease and such failure shall continue beyond the earlier to
occur of (i) the lapse of such policy and (ii) ten (10) days after Landlord
gives Tenant notice of such failure; (f) any petition is filed by or against
Tenant or any guarantor of this Lease under any present or future section or
chapter of the Bankruptcy Code, or under any similar law or statute of the
United States or any state thereof (which, in the case of an involuntary
proceeding, is not permanently discharged, dismissed, stayed, or vacated, as
the case may be, within sixty (60) days of commencement), or if any order for
relief shall be entered against Tenant or any guarantor of this Lease in any
such proceedings; (g) Tenant or any guarantor of this Lease becomes insolvent
or makes a transfer in fraud of creditors or makes an assignment for the
benefit of creditors; (h) a receiver, custodian, or trustee is appointed for
the Premises or for all or substantially all of the assets of Tenant or of any
guarantor of this Lease, which appointment is not vacated within sixty (60)
days following the date of such appointment; or (i) Tenant fails to perform or
observe any other terms of this Lease (other than those specified above in this
Section 13.1) and such failure continues for more than thirty (30) days after
Landlord gives Tenant written notice of such failure in the case of a
non-emergency, or immediately in the case of an emergency, or, if such
non-emergency failure cannot be corrected within such thirty (30) day period,
if Tenant does not commence to correct such failure within said thirty (30) day
period and thereafter diligently prosecute the correction of same to completion
within an additional period of time reasonably necessary to correct such
failure, but not to exceed an additional ninety (90) days. Any notice given by
Landlord pursuant to this Section 13.1 may be the notice required or permitted
pursuant to Section 1161 et seq. of the California Code of Civil Procedure or
successor statutes, provided the provisions of such statutes are followed, as
may be modified herein, and the provisions of this Lease shall not require the
giving of a notice in addition to such statutory notice to terminate this Lease
and Tenants right to possession of the Premises. 13.2 During the continuance of any Event of Default, Landlord may pursue
at its option any one or more of the following without further notice or demand
to Tenant, Tenant hereby expressly waiving the requirement of service of any
statutory notice or demand as a condition precedent to Landlords exercising
any of the following rights: A. Landlord may, at its option, terminate this Lease by written
notice to Tenant and recover possession of the Premises. Following such
termination, Landlord 18




---



##### 



may recover from Tenant damages arising from the Event of Default
and the termination of this Lease, including without limitation the
following:  (i)
    
    The Worth at the Time of Award of the unpaid Rent
which had been earned at the time of 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 Term after the
time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided; plus(iv)
    
    Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenants failure
to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom;
plus(v)
    
    At Landlords election, such other amounts in
addition to or in lieu of the foregoing as may be permitted
from time to time by the laws of the State in which the
Project is located. As used in subsections (A)(i) and (ii) above, the Worth at the Time of
Award shall be computed by allowing interest at the Interest Rate. As
used in subsection (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 of San Francisco at the time of award plus one
percent (1%); or B. Exercise the remedy, described in California Civil Code 1951.4
(Landlord may continue the 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); or C. Apply against any amounts owed by Landlord to Tenant, any amounts
then due and payable by Tenant to Landlord; or D. At its option, but without any obligation, perform any obligation
of Tenant under this Lease and, if Landlord so elects, all costs and
expenses incurred by Landlord in performing such obligations, together
with interest thereon at the Interest Rate from the date incurred until
paid in full, shall be reimbursed by Tenant to Landlord on demand and
shall be considered Rent for purposes of this Lease. 13.3 No agreement to accept a surrender of the Premises and no act or
omission by Landlord or Landlords agents during the Term shall constitute an
acceptance or surrender of the Premises unless made in writing and signed by
Landlord. No re-entry or taking possession of the 19




---



##### 



Premises by Landlord shall constitute an election by Landlord to terminate
this Lease unless a written notice of such intention is given to Tenant. No
provision of this Lease shall be construed as an obligation upon Landlord to
mitigate Landlords damages under the Lease, except to the extent required by
applicable Requirements, including, but not limited to, California Civil Code
Section 1951.2. 13.4 No provision of this Lease shall be deemed to have been waived by
Landlord unless such waiver is in writing and signed by Landlord. Landlords
acceptance of Rent following an Event of Default hereunder shall not be
construed as a waiver of such Event of Default. No custom or practice between
the parties in connection with the terms of this Lease shall be construed to
waive or lessen Landlords right to insist upon strict performance of the terms
of this Lease, without a written notice thereof to Tenant from Landlord. 13.5 The rights granted to Landlord in this Article 13 shall be cumulative
of every other right or remedy provided in this Lease or which Landlord may
otherwise have at law or in equity or by statute, and the exercise of one or
more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies or constitute a forfeiture or
waiver of Rent or damages accruing to Landlord by reason of any Event of
Default under this Lease. Tenant agrees to pay to Landlord all costs and
expenses incurred by Landlord in connection with an Event of Default and the
enforcement of this Lease, including all attorneys fees incurred in connection
with the collection of any sums due hereunder or the enforcement of any right
or remedy of Landlord. 13.6 Tenant waives all rights of redemption or relief from forfeiture
under California Code of Civil Procedure Sections 1174 and 1179, and under any
other present or future law, in the event Tenant is evicted or Landlord
otherwise lawfully takes possession of the Premises by reason of any default by
Tenant. ARTICLE 14 INSURANCE 14.1 A. Tenant shall obtain and keep in force during the Term the
following insurance: (i) All Risk insurance insuring the Leasehold
Improvements and any other improvements existing in the Premises
(collectively, with the Leasehold Improvements the Premises
Improvements), Tenants interest in the Premises and all property
located in the Premises, including telephone and other equipment,
supplies, computer systems, trade fixtures, furniture, furnishings and
other items of personal property (Tenants Property) and all
Alterations, in an amount equal to the full replacement value; (ii)
Business Interruption insurance in an amount that will reimburse Tenant
for direct or indirect loss of earnings attributable to all perils
insured against under Section 14.1A(i); and sufficient to reimburse
Tenant for Rent in the event of a casualty to, or temporary taking of,
the Project, Buildings or the Premises; (iii) Commercial General Public
Liability insurance including personal injury, bodily injury, broad form
property damage, products and completed operations liability, contractual
liability, coverage to include contractors and subcontractors, with a
cross liability clause and a severability of interests 20




---



##### 



clause, in limits not less than $5,000,000.00, inclusive, per occurrence;
(iv) Workers Compensation, in form and amount as required by applicable
Requirements, including Employers Liability insurance of not less than
$1,000,000.00; (v) during the time Tenant, or its contractor, performs
any Alterations in the Premises (other than in connection with the
construction of Leasehold Improvements, in which case the provisions of
Exhibit D hereto shall apply), Builders Risk insurance on an All Risk
basis (including collapse) on a completed value (non-reporting) form for
full replacement value covering all work incorporated in the Project and
all materials and equipment in or about the Premises; (vi) Tenants All
Risk Legal Liability insurance with limits not less than $1,000,000;
(vii) Automobile Liability covering all owned, leased, non-owned, hired,
rented or borrowed vehicles and related equipment with limits of
$1,000,000.00 for bodily injury and property damage combined; and (viii)
any other form or forms of insurance or any changes or endorsements to
the insurance required herein as Landlord, or any mortgagee or lessor of
Landlord, may reasonably require, from time to time, in form or in amount
that are reasonable and customary in the Market Area for tenants in
buildings of this type. B. All such policies of insurance shall name Tenant as the insured
thereunder and (except for the insurance described in Section 14.1A(iv))
shall name Landlord, the Buildings property manager and other parties
identified by Landlord such as mortgagees and ground lessors (herein,
such mortgagees, secured lenders and ground lessors are collectively
referred to as Secured Parties), as additional insureds with respect to
the Commercial General Public Liability insurance described in Section
14.1(A)(iii) above, all as their respective interests may appear. The
insurers will have a Bests Rating of A-VI or better and the deductibles
shall be reasonable and customary for companies comparable to Tenant.
Tenant shall deliver to Landlord certificates and/or binders of such
insurance by the Commencement Date and, with respect to renewals of such
policies, not later than five (5) days prior to the end of the expiring
term of coverage. All policies of insurance shall be primary and Tenant
shall not carry any separate or additional insurance concurrent in form
or requiring contribution in the event of any loss or damage with any
insurance maintained by Landlord. All such policies and certificates
shall contain an agreement by the insurers (i) that the policies will not
be invalidated as they affect the interests of the additional insureds by
reason of any breach or violation of warranties, representations,
declarations or conditions contained in the policies by Tenant and (ii)
that the insurers shall provide Landlord with not less than thirty (30)
days prior written notice of any material reduction in coverage,
termination or cancellation (ten (10) days for non-payment of premium) of
such policies and (iii) waiving any rights of subrogation, except with
respect to the Commercial General Public Liability insurance described in
Section 14.1(A)(iii) above. 14.2 Landlord shall obtain All Risk property insurance on the Project
(other than Premises Improvements and Tenants Property), including for risk of
earthquake and flood if Landlord desires, against damages or loss in an amount
equal to the full replacement value, as well as commercial general public
liability insurance and such other insurance as is reasonably required by
Landlord or customarily maintained by prudent owners of Class A Buildings in
the Market Area, all in such amounts and with such insurers deductibles as
Landlord reasonably 21




---



##### 



deems appropriate. Each year at least eleven (11) days prior to
Landlords renewal of its insurance policies that relate to the Project,
Landlord will provide Tenant with information regarding the insurance coverage
for the Project, including the price, the Bests ratings of the insurer, the
amount of the deductibles, the coverage and term. In the event that Tenant
desires, Tenant may, upon delivering notice to Landlord not more than ten (10)
days after receiving Landlords insurance notice, purchase All-Risk property
insurance, including such coverages as Landlords policy may contain, and
Commercial General Public Liability insurance and/or such other insurance that
Landlord may carry with respect to the Premises, and provided that such
insurance, in all respects, is at least as favorable insurance as Landlord
intends to provide, including, but not limited to, at least the same coverage,
term and insurers Bests rating and the deductibles are no higher (except for
earthquake insurance which may be as high as ten percent (10%) of the
replacement cost of the Premises, but in the event that such deductible is
higher than the deductible offered by Landlord, Tenant shall be deemed to
self-insure for the difference between the deductible amount under the
insurance policy obtained by Tenant and the deductible offered by Landlord and
in the event of a casualty covered by such policy, Tenant shall pay over the
lesser of the actual cost of repairs or such difference in the deductible
amount to Landlord) as set forth in the information delivered to Tenant from
Landlord. In such case for the term of such insurance policy or policies, (1)
Tenant shall not be obligated to reimburse Landlord for such insurance through
Operating Costs, and (2) Landlord shall no longer be obligated to provide such
insurance under the terms of this Lease. Tenant may not modify or terminate
such policy without Landlords prior written consent, which may be granted or
withheld in Landlords sole discretion. If Tenant fails to deliver such
notice, Landlord may carry such insurance and charge Tenant its pro rata share
as an Operating Cost. All such policies of insurance carried by Tenant shall
comply with the terms set forth above in Section 14.1(B) for insurance policies
carried by Tenant. 14.3 Tenant shall not conduct or knowingly permit to be conducted in the
Premises any activity, or place any equipment in or about the Premises or the
Project, which will invalidate the insurance coverage in effect or increase the
rate of All Risk property insurance or other insurance on the Premises or the
Project, and Tenant shall comply with all requirements and regulations of
Landlords casualty and liability insurer. If any increase in the rate of
property insurance or other insurance carried by Landlord occurs due to any act
or omission by any Tenant Parties (as defined below), Tenant shall pay for such
increase as Additional Rent payable with the next monthly installment of Base
Rent due under this Lease. 14.4 Landlord and Tenant, in the exercise of their commercial business
judgment, acknowledge that the use of insurance is the best way to protect
against the risk of loss to their respective properties and economic interests
in the Project and the Premises. Accordingly, each agree that in the event of
loss or damage to their respective properties or interests, such loss will be
satisfied first by the insurance proceeds paid to the party suffering the loss,
next such loss will be deemed satisfied by the insurance proceeds that would
have been paid to the party suffering the loss had the insurance required
hereunder been carried by such party, and finally, such loss will be satisfied
by the party causing the loss or damage. Without limiting the waiver of
subrogation required in Section 14.1B, if and to the extent that applicable
Requirements permit a full waiver of claims between landlords and tenants in
leases such as this Lease, then Landlord and Tenant waive all claims against
the other and the Tenant Parties and the Landlord Parties, 22




---



##### 



respectively, for any loss, damage or injury, notwithstanding the
negligence of either party in causing a loss or the availability of insurance
proceeds. ARTICLE 15 DAMAGE BY FIRE OR OTHER CAUSE 15.1 Except as otherwise expressly provided in this Article 15, if the
Buildings (or any portion thereof) or the Premises is damaged or destroyed
during the Term, Landlord shall diligently repair or restore the Buildings or
the Premises (exclusive of the Premises Improvements, Tenants Property and
Alternations), as the case may be, as soon as reasonably possible to
substantially the condition in which the Buildings or the Premises, as the case
may be, existed immediately prior to such damage or destruction (exclusive of
the Premises Improvements, Tenants Property and Alterations). Except as
otherwise expressly provided in this Article 15, if the Premises (or any
portion thereof) is damaged or destroyed during the Term, Tenant shall
diligently repair or restore, in accordance with the provisions governing
Alterations as set forth in Section 10, the Premises Improvements, the Tenants
Property and the Alterations in the Premises as soon as reasonably possible to
substantially the condition in which such items existed immediately prior to
such damage or destruction. 15.2 Except as provided in this Section 15.2, Landlord shall have no
liability to Tenant for inconvenience, loss of business or annoyance arising
from any casualty or any restoration. If the Premises (or any portion thereof)
is not usable for Tenants business purposes pending and during reconstruction
as provided in Section 15.1, and in fact Tenant Ceases to Use the Premises (or
the affected portion thereof), Rent due and payable hereunder shall equitably
abate for the portion of the Premises which is unusable and which Tenant has
Ceased to Use for the period commencing with the date of such casualty until
the earlier of the date (i) that reconstruction of the Premises is
substantially completed by Landlord to the extent required to be completed by
Landlord as provided in Section 15.1 plus a reasonable time to restore the
Leasehold Improvements not to exceed one hundred eighty (180) days or (ii) that
Tenant resumes the conduct of its business from such portion of the Premises. 15.3 If there is damage or destruction to the Project (whether or not such
damage affects the Premises) or to the Premises, to the extent that Landlord
reasonably determines that the Project or the Premises (exclusive of the
Premises Improvements, Tenants Property and Alterations), as the case may be,
cannot be fully repaired or restored within (i) three hundred sixty five (365)
days from the date of the casualty and occurs at any time during the Term or
(ii) three (3) months from the date of the casualty and occurs during the last
Lease Year of the Term, as the same may have been extended pursuant to Article
22 hereof, then, Landlord and (solely in the event that the Premises is damaged
or destroyed) Tenant shall have the option, upon written notice delivered to
the other party within fifteen (15) days of Tenants receipt of Landlords
written notice of the length of such restoration (such notice to be provided
within sixty (60) days of such casualty), to terminate this Lease. If the
restoration to the Project is prohibited by any Requirements or the insurance
proceeds, including deductible amounts (subject to reimbursement pursuant to
the terms of Operating Costs), are insufficient or otherwise not available,
then Landlord may elect to terminate this Lease upon giving written notice of
such 23




---



##### 



election to Tenant within sixty (60) days after such casualty. In the
event that Landlord declines to repair the Premises as a result of a shortage
of insurance proceeds, Tenant may request from Landlord an estimate of the
shortage of insurance proceeds. Within thirty (30) days of receipt of
Landlords estimate, Tenant may deposit with Landlord the funds set forth in
such estimate, in which case, Landlords termination of the Lease shall be
voided and Landlord shall proceed with such restoration as if there were no
such shortage. After completion if the actual costs exceed such estimate,
Tenant shall pay Landlord such excess costs. In the event the restoration
costs less than such estimate, Landlord shall refund any excess funds deposited
by Tenant. 15.4 In the event of termination of this Lease pursuant to this Article
15, then (1) all Rent shall be apportioned and paid to the later of the date on
which possession is relinquished or the date of such damage (subject to
abatement as set forth in Section 15.2), (2) Tenant shall immediately vacate
the Premises as required herein and (3) Tenant shall pay to Landlord that
amount of Tenants insurance proceeds (or the amount which would have been
received by Tenant if Tenant was carrying the insurance required by this Lease)
which insures damage to the Premises Improvements and Alterations, provided
that Tenant make keep the unamortized value (amortized on a straight line basis
over the Term) of Premises Improvement and Alterations constructed and paid for
by Tenant. Tenants obligations under this Section 15.4 shall survive the
termination of this Lease. If neither Landlord nor Tenant timely elects to
terminate this Lease, this Lease shall remain in full force and effect and the
Project and Premises shall be diligently repaired and restored in accordance
with Section 15.1. 15.5 Tenant hereby waives California Civil Code Sections 1932(2) and
1933(4), providing for termination of hiring upon destruction of the thing
hired and Sections 1941 and 1942, providing for repairs to and of the Premises. ARTICLE 16 CONDEMNATION 16.1 If the whole or substantially the whole of the Buildings or the
Premises are permanently taken or condemned by eminent domain or by any
conveyance in lieu thereof (such taking, condemnation or conveyance in lieu
thereof being hereinafter referred to as condemnation), the Term shall cease
and this Lease shall terminate on the date the condemning authority takes
possession. 16.2 If as a result of any taking Landlord cannot within a reasonable time
period provide Tenant (i) at or in the vicinity of the Project (defined as
being within one-quarter [1/4] mile radius of the existing parking) with the
number of parking spaces required by local code for office space the size of
the Premises or (ii) reasonable access to the Premises, then Landlord or Tenant
shall have the right to terminate this Lease by written notice to the other
party given within thirty (30) days after the date the condemning authority
takes possession. If any portion of the Project other than the Premises is
permanently taken by condemnation, this Lease shall remain in full force and
effect unless terminated pursuant to the other provisions of this Article 16. 24




---



##### 



16.3 If a portion, but less than substantially the whole, of the Premises
shall be permanently taken by condemnation, then this Lease shall terminate as
of the date the condemning authority takes possession as to the portion of the
Premises so taken, and unless Landlord or Tenant exercises its option to
terminate this Lease pursuant to this Section 16.3, this Lease shall remain in
full force and effect as to the remainder of the Premises. In the event that
more than fifteen percent (15%) of the floor area of the Premises is
permanently taken by condemnation and Landlord does not provide Tenant with
comparable replacement space at the Project, Tenant may terminate this Lease by
written notice to Landlord given within thirty (30) days after the date the
condemning authority takes possession. If this Lease is not terminated
pursuant to the provisions of this Article 16, then the Rent due and payable
hereunder shall equitably abate for the portion of the Premises which is
permanently condemned and not occupied for the period commencing with the date
possession of such portion of the Premises is given to the condemning
authority. If all or any portion of the Premises shall be temporarily taken by
condemnation, then this Lease shall remain in full force and effect and Tenant
shall continue to pay in full the Rent payable hereunder. In the event of such
temporary condemnation, Tenant shall be entitled to appear in and claim any
portion of the condemnation award for such temporary taking that represents
compensation for Tenants loss of use and occupancy of the Premises during the
lesser of the period of the temporary taking or the Term of this Lease.
Landlord shall be entitled to appear in and claim that portion of the
condemnation award that represents the cost of restoration of the Premises and
the use or occupancy of the Premises after the end of the Term. 16.4 If this Lease terminates pursuant to the provisions of Article 16,
the Rent shall be apportioned as of such date of termination; provided,
however, that those provisions of this Lease which are designated to cover
matters of termination and the period thereafter shall survive the termination
hereof. 16.5 Except as specifically provided herein, all compensation awarded or
paid upon a condemnation of any portion of the Project shall belong to and be
the property of Landlord without participation by Tenant. Nothing herein shall
be construed, however, to preclude Tenant from prosecuting any claim directly
against the condemning authority the unamortized value (amortized on a straight
line basis over the Term) of any Leasehold Improvements or Alterations paid for
by Tenant, for loss of business, loss of good will, moving expenses, damage to,
and cost of removal of, trade fixtures, furniture and other personal property
belonging to Tenant. ARTICLE 17 INDEMNIFICATION 17.1 Tenant shall indemnify and save Landlord, the Secured Parties and the
Landlord Parties harmless from and against all Claims brought by third parties
and that arise from Tenants or its subtenants, assignees, agents,
licensees, contractors, subcontractors, officers, directors, shareholders
or employees (herein, Tenant and such other parties are collectively referred
to as the Tenant Parties) use and occupancy of the Premises and the Project
or from any other activity, omission, work or thing done, permitted or suffered
by Tenant or the Tenant Parties in or about the Premises and the Project. If
any such proceeding is filed by 25




---



##### 



a third party against Landlord or any such indemnified party, Tenant
agrees to defend Landlord or such party in such proceeding at Tenants sole
cost by legal counsel reasonably satisfactory to Landlord and such indemnified
party, if requested by Landlord. In no event shall Tenant be obligated to
indemnify Landlord or any of the other parties identified above for any willful
or negligent act or omission of Landlord or such other party. 17.2 Landlord shall indemnify and save Tenant and the Tenant Parties
harmless from and against all Claims brought by third parties and that arise
from Landlords or its agents, licensees, contractors, subcontractors,
officers, directors, partners or employees (herein, Landlord and such other
parties are collectively referred to as the Landlord Parties) use and
occupancy of the Premises and the Project or from any other activity, omission,
work, or thing done, permitted or suffered by Landlord or Landlord Parties in
or about the Premises and the Project. If any such proceeding is filed by a
third party against Tenant or any such indemnified party, Landlord agrees to
defend Tenant or such party in such proceeding at Landlords sole cost by legal
counsel reasonably satisfactory to Tenant and such indemnified party, if
requested by Tenant. In no event shall Landlord be obligated to indemnify
Tenant or any of the other parties identified above for any willful or
negligent act or omission of Tenant or such other party. 17.3 The provisions of this Article 17 shall survive the expiration or
termination of this Lease with respect to any Claims asserted against Landlord
or Tenant within any applicable statute of limitations. ARTICLE 18 SUBORDINATION 18.1 Unless elected otherwise by the ground lessee or Secured Party, as
the case may be, this Lease shall be subordinate to any present or future
ground lease or mortgage respecting the Project, and any amendments thereto;
provided the ground lessee or Secured Party recognizes the validity of this
Lease and the Secured Party agrees that, notwithstanding any default by
Landlord with respect to said ground lease or mortgage or any termination or
foreclosure thereof, Tenants possession and right of use under this Lease and
the rights of Tenant under this Lease in and to the Premises shall not be
disturbed by such Secured Party unless and until an Event of Default shall have
occurred hereunder. If any ground lease is terminated or mortgage foreclosed or deed in lieu
of foreclosure given, Tenant shall attorn to such Secured Party or purchaser at
such foreclosure sale and this Lease shall continue in effect as a direct lease
between Tenant and such Secured Party or purchaser. The ground lessee or
Secured Party or purchaser shall (i) be liable as Landlord only for the
obligations of Landlord accruing after such ground lessee or Secured Party or
purchaser has taken fee title to the Building or Project and (ii) not be liable
for (a) any Rent paid more than thirty (30) days in advance or (b) any offsets,
claims or defenses which Tenant may have against the previous Landlord. Tenant
shall within ten (10) business days of request by Landlord or ground lessee,
Secured Party or purchaser (in case of attornment), execute and deliver to the
requesting party a subordination, non-disturbance and attornment agreement in a
form reasonably satisfactory to the requesting party, Tenant and Landlord. 26




---



##### 



18.2 Any ground lessee, Secured Party or purchaser shall be responsible
for the return of any security deposit and Rent voluntarily paid in advance by
Tenant only to the extent the security deposit or Rent is received by or
credited to such ground lessee, Secured Party or purchaser. 18.3 No act or failure to act on the part of Landlord which would entitle
Tenant under the terms of this Lease, or by law, to be relieved of Tenants
obligations hereunder or to terminate this Lease, shall result in a release of
such obligations or a termination of this Lease unless (a) Tenant has given
notice by registered or certified mail to any Secured Party whose address shall
have been furnished to Tenant, and (b) Tenant offers such Secured Party a
reasonable opportunity to cure the default. 18.4 Landlord represents that on the Commencement Date, there shall be no
indebtedness secured by a mortgage or deed of trust on Landlords interest in
the Project and that there is no other Secured Party with respect to the
Project. 18.5 Tenant acknowledges that Landlord may in its sole discretion make the
Project subject to reasonable and non-discriminatory restrictive covenants,
conditions, easements and other encumbrances (Restrictive Covenants).
Subject to the provisions of Section 21.15 below, such Restrictive Covenants
may not have a material adverse impact upon Tenants use and enjoyment of the
Premises or Common Areas or access to the Premises or reduce the number of
parking spaces Tenant is entitled to use hereunder. This Lease shall be
subordinate to any such Restrictive Covenants. Such subordination shall
automatically be effective without any action or notice to Tenant. ARTICLE 19 SURRENDER OF THE PREMISES AND HOLDOVER Upon the Expiration Date or earlier termination of this Lease, or upon any
re-entry of the Premises by Landlord without terminating this Lease pursuant to
Section 13.2(B), Tenant, at Tenants sole cost and expense, shall peacefully
vacate and surrender the Premises to Landlord in good order, broom clean and in
the same condition as at the beginning of the Term or as the Premises may
thereafter have been improved by Landlord or Tenant (provided such Alterations
were made with Landlords consent and not required to be removed pursuant to
Section 10.4 or Exhibit D hereof), reasonable use and wear thereof and repairs
which are Landlords obligations under Articles 9, 15 and 16 only excepted, and
Tenant shall comply with Section 10.4 relating to removal and restoration as
well as remove all Tenants Property and Alterations that Landlord requires
Tenant to remove (other than those Alterations that Landlord agreed could
remain pursuant to the terms of Section 10.4 above) and turn over all keys for
the Premises to Landlord. Should Tenant continue to hold the Premises after
the Expiration Date or earlier termination of this Lease or Tenants right to
possession without Landlords prior written consent, such holding over shall
constitute and be construed as a tenancy at sufferance on the same terms hereof
except monthly installments of Base Rent shall be equal to (i) for the first
thirty (30) days of any such holdover, one hundred fifty percent (150%) of the
Base Rent in effect as of the date of termination, and (ii) after the first
thirty (30) days of such holdover, one hundred fifty percent 27




---



##### 



(150%) of the greater of the Base Rent in effect as of the date of
termination and the fair market rent as of the date of termination, and (B)
Tenant shall have no right to renew this Lease or to expand the Premises or any
right to additional services. Tenant shall also be liable to Landlord for any
and all damages which Landlord suffers because of any holding over by Tenant.
Upon Tenants request therefor, Landlord shall give Tenant written notice of
whether Landlord has prospective tenants or purchasers for the Premises. Any
of Tenants Property not removed that Landlords requires to be removed or that
is required to be removed pursuant to terms of this Lease, may be removed by
Landlord and stored, discarded, retained or sold by Landlord and the cost of
such storage, discarding, removal and disposition as well as the cost of
repairing any damage caused by such removal, shall be paid by Tenant within
thirty (30) days of demand and such sum shall accrue interest at the Interest
Rate from the date incurred until paid in full. No acceptance of Rent payable
pursuant to this Section 19 by Landlord shall operate as waiver of Landlords
right to gain possession of the Premises or any other remedy set forth herein.
The provisions of this Article 19 shall survive the expiration or earlier
termination of this Lease. ARTICLE 20 [INTENTIONALLY OMITTED.] ARTICLE 21 MISCELLANEOUS 21.1 Professional Fees. In any action or proceeding brought by either
party against the other under this Lease, the prevailing party shall be
entitled to recover from the other party its professional fees for attorneys,
appraisers and accountants, its investigation costs, and any other legal
expenses and court costs incurred by the prevailing party in such action or
proceeding. 21.2 Reimbursements. Wherever this Lease requires Tenant to reimburse or
pay Landlord for the cost of any item or service (including the overseeing of
Alterations performed by Landlord or Tenant other than Leasehold Improvements)
except as a part of ordinary payments of Operating Costs, Taxes or utility
reimbursements, such costs will be the actual, reasonable costs of Landlord for
such item or service plus an administrative fee not to exceed five (5%) of the
cost of such item or service. All such charges shall be payable upon demand as
Additional Rent. 21.3 Severability. Every provision in this Lease is, and shall be
construed as, a separate and independent covenant. If any term of this Lease
or the application thereof to any person or circumstances shall be invalid or
unenforceable, the remaining provisions shall not be affected. 21.4 Non-Merger. There shall be no merger of this Lease with any ground
leasehold interest or the fee estate in the Project or any part thereof by
reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or any interest in this Lease as well as any ground
leasehold interest or fee estate in the Project or any interest in such fee
estate. 28




---



##### 



21.5 Landlords Liability. Notwithstanding anything to the contrary
contained in this Lease, Landlords liability under this Lease is limited
solely to Landlords equity in the Project, and in no event shall recourse be
had to any other property or assets of Landlord or against any member, partner,
shareholder, trustee, officer or director of Landlord or any assets of such
parties. If Landlord shall at any time transfer its interest in the Project or
this Lease, and to the extent the transferee assumes Landlords obligations and
liabilities hereunder, Landlord shall be released of any obligations occurring
after such transfer, and Tenant shall look solely to Landlords successors for
performance of such obligations. 21.6 Force Majeure. Whenever the period of time is herein prescribed for
action to be taken by Landlord or Tenant, Landlord or Tenant shall not be
liable or responsible for, and there shall be excluded from the computation for
any such period of time, any delays due to Force Majeure. Force majeure shall
not excuse or delay Tenants obligation to pay Rent or any other amount due
under this Lease. As used herein, Force Majeure shall mean strikes, riots,
acts of God, shortages of labor or materials, weather, war, governmental
approvals, laws, regulations, or restrictions, or any other cause of any kind
whatsoever which is beyond the reasonable control of, as applicable, Landlord
or Tenant. 21.7 Headings. The article headings contained in this Lease are for
convenience only and shall not enlarge or limit the scope or meaning of the
various and several articles hereof. Words in the singular number shall be
held to include the plural, unless the context otherwise requires. 21.8 Successors and Assigns. All agreements and covenants herein
contained shall be binding upon the respective heirs, personal representatives,
successors and assigns of the parties hereto. If there is more than one
Tenant, the obligations hereunder imposed upon Tenant shall be joint and
several. If there is a guarantor of Tenants obligations hereunder, Tenants
obligations shall be joint and several obligations of Tenant and such
guarantor, and Landlord need not first proceed against Tenant hereunder before
proceeding against such guarantor, and any such guarantor shall not be released
from its guarantee for any reason, including any amendment of this Lease, any
forbearance by Landlord or waiver of any of Landlords rights, the failure to
give Tenant or such guarantor any notices, or the release of any party liable
for the payment or performance of Tenants obligations hereunder.
Notwithstanding the foregoing, nothing contained in this Section 21.8 shall be
deemed to override Article 8. 21.9 Landlords Representations. Neither Landlord nor Landlords agents
or brokers have made any representations or promises with respect to the
Premises or the use thereof, the Building, the Land, or any other portions of
the Project except as herein expressly set forth and all reliance with respect
to any representations or promises is based solely on those contained herein.
No rights, easements, or licenses are acquired by Tenant under this Lease by
implication or otherwise except as, and unless, expressly set forth in this
Lease. 21.10 Entire Agreement; Amendments. This Lease and the Exhibits and
Riders attached hereto set forth the entire agreement between the parties and
cancel all prior negotiations, arrangements, brochures, agreements, and
understandings, if any, between Landlord and Tenant regarding the subject
matter of this Lease. No amendment or modification 29




---



##### 



of this Lease shall be binding or valid unless expressed in writing
executed by both parties hereto. 21.11 Tenants Authority. Tenant hereby covenants, warrants and
represents that: (1) the individual executing this Lease on its behalf is duly
authorized to execute and deliver this Lease in accordance with the
organizational documents of Tenant; (2) this Lease is binding upon Tenant; (3)
Tenant is duly organized and existing in the state of its formation and is
qualified to do business in the state where the Project is located and (4) the
execution and delivery of this Lease will not result in any breach of, or
constitute a default under any mortgage, deed of trust, lease, loan, credit
agreement, partnership agreement or other contract or instrument to which it is
a party or by which it may be bound. 21.12 Governing Law. This Lease shall be governed by and construed under
the laws of the State of California, without regard to conflicts of laws
principals. Any action brought to enforce or interpret this Lease shall be
brought in the court of appropriate jurisdiction in Santa Clara County,
California. Should any provision of this Lease require judicial
interpretation, the court interpreting or considering same shall not apply the
presumption that the terms hereof shall be more strictly construed against the
party who itself or through its agents prepared the same, it being agreed that
all parties hereto have participated in the preparation of this Lease and that
each party had full opportunity to consult legal counsel of its choice before
the execution of this Lease. 21.13 Tenants Use of Name of the Project. Tenant shall not, without the
prior written consent of Landlord, use the name of the Project for any purpose
other than as the address of the business to be conducted by Tenant in the
Premises, and Tenant shall not do or permit the doing of anything which in the
reasonable judgment of Landlord may reflect unfavorably on Landlord or the
Project or confuse or mislead the public as to any apparent connection or
relationship between Tenant and Landlord, the Project, or the Land. 21.14 Ancient Lights. Any elimination or shutting off of light, air, or
view by any structure which may be erected on lands adjacent to the Premises
shall not affect this Lease and Landlord shall have no liability to Tenant with
respect thereto. 21.15 Changes to Project by Landlord. Landlord shall have the right to
make changes to all portions of the Project in Landlords reasonable discretion
for the purpose of improving access or security to the Project or the flow of
pedestrian and vehicular traffic therein. Landlord may at any time, without
the same constituting an actual or constructive eviction and without incurring
any liability to Tenant therefor (a) rearrange, change, expand or contract
portions of the Project constituting Common Areas, (b) use Common Areas while
engaged in making improvements, repairs or alterations to the Project, or any
portion thereof, and (c) do and perform such other acts and make such other
changes in to or with respect to the Project, or any portion thereof, as
Landlord may, in the exercise of sound business judgment, deem to be
appropriate, including without limitation the reasonable closure of any portion
of the Project or the Common Areas for such time in order to construct
additional buildings or other improvements or prevent any adverse possession or
public dedication claim, provided Tenant continues to have access to the
Project and Premises, full use of the Cafeteria and subject to the provisions
set forth below, 30




---



##### 



parking as required under this Lease. In particular, without limiting the
foregoing Tenant hereby acknowledges that (a) Landlord reserves the right to
further subdivide all or a portion of the Project; (b) if portions of the
Project or property adjacent to the Project (collectively, the Other
Improvements) are at any time owned by an entity other than Landlord,
Landlord, at its option, may enter into an agreement with the owner or owners
of any or all of the Other Improvements to provide (i) for reciprocal rights of
access and/or use of the Project and the Other Improvements, except for the
Cafeteria, which may only be used as provided in Section 26.1 below, (ii) for
the common management, operation, maintenance, improvement and/or repair of all
or any portion of the Project and the Other Improvements, (iii) for the
allocation of a portion of the Operating Costs to the Other Improvements and
the operating expenses and taxes for the Other Improvements to the Project, and
(iv) for the use or improvement of the Other Improvements and/or the Project in
connection with the improvement, construction, and/or excavation of the Other
Improvements and/or the Project and at Landlords request, Tenant shall
subordinate this Lease to any such agreement pursuant to the terms of Section
18.5; and (c) nothing contained herein shall be deemed or construed to limit or
otherwise affect Landlords right to convey all or any portion of the Project
or any other of Landlords rights described in this Lease. Tenant acknowledges
that Landlord may take various actions with respect to the Project, including,
but not limited to, performing construction on portions of the Project
following Tenants occupancy of the Premises, and that such actions may result
in levels of noise, dust, obstruction of access, etc. which are in excess of
that present in a fully constructed project. Except as expressly set forth in
this Lease, Tenant hereby waives any and all rent offsets that may arise in
connection with such actions, including any offsets that may arise in
connection with such actions. Notwithstanding anything to the contrary
contained herein, the parties hereto contemplate that during construction at
the Project Landlord will require alternative parking arrangements for the
Project. The type and terms of such alternative parking arrangement will be
subject to Tenants consent not to be unreasonably withheld, conditioned or
delayed, but such arrangements may include valet parking on the Project. 21.16 Time of Essence. Time is of the essence of this Lease. 21.17 Landlords Acceptance of Lease. The submission of this Lease to
Tenant shall not be construed as an offer and Tenant shall not have any rights
with respect thereto unless this Lease is consented to by any Secured Party,
and any lessor of Landlord, to the extent such consent is required, and
Landlord executes a copy of this Lease and delivers the same to Tenant. 21.18 Estoppel Certificates. Within ten (10) business days after request
by either party, the other party shall execute and deliver to the requesting
party a written certificate as to the status of this Lease, any existing
defaults, the status of the payments and performance of the parties required
hereunder and such other information that may be reasonably requested. Any
such certificate may be relied upon by Landlord, any successor landlord, any
Secured Party, any lessor of Landlord, Tenant or any Tenant Parties. 21.19 Financial Statements. At any time during the Term that Tenants
stock is not publicly traded, Tenant shall, but not more than once per year,
except in the event of a transfer or financing of the Project, upon ten (10)
days prior written notice from Landlord, provide Landlord with a current
financial statement and financial statements of the two (2) years prior to the 31




---



##### 



current financial statement year. Such statement 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. 21.20 WAIVER OF JURY TRIAL. EACH PARTY WAIVES TRIAL BY JURY IN THE EVENT
OF ANY LEGAL PROCEEDING BROUGHT BY THE OTHER IN CONNECTION WITH THIS LEASE.
EACH PARTY SHALL BRING ANY ACTION AGAINST THE OTHER IN CONNECTION WITH THIS
LEASE IN A FEDERAL OR STATE COURTS LOCATED IN THE DISTRICT WHERE THE PROJECT IS
LOCATED, CONSENTS TO THE JURISDICTION OF SUCH COURTS, AND WAIVES ANY RIGHT TO
HAVE ANY PROCEEDING TRANSFERRED FROM SUCH COURTS ON THE GROUND OF IMPROPER
VENUE OR INCONVENIENT FORUM. 21.21 Accord and Satisfaction. No payment by Tenant or receipt by
Landlord of a lesser amount than the Rent stipulated herein shall be deemed to
be other than on account of the earliest stipulated Rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment of Rent be deemed an accord and satisfaction. Landlord shall accept
such check or payment without prejudice to Landlords right to recover the
balance of such Rent or to pursue any other remedy in this Lease. 21.22 Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which,
when taken together, shall constitute one and the same agreement. 21.23 Waiver. No failure by either party to exercise, or delay in
exercising, any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege. Any consent or approval given
by Landlord in any one instance shall not constitute consent or approval for
any subsequent matter, even if similar to the matter for which such consent or
approval was originally given. 21.24 Landlords Right to Inspect. Landlord shall retain duplicate keys,
cards, access codes or other access means to all doors of the Premises.
Landlord shall have the right to enter the Premises during normal business
hours upon no less than twenty-four (24) hours prior oral notice to Tenants
designated representative (or, in the event of an emergency, at any hour
without notice) (a) to exhibit the same to present or prospective Secured
Parties or purchasers during the Term and to prospective tenants during the
last twelve (12) months of the term, (b) to inspect the Premises, (c) to
confirm that Tenant is complying with all of Tenants covenants and obligations
under this Lease, (d) to make repairs required of Landlord under the terms of
this Lease, (e) to make repairs to areas adjoining the Premises, (f) to repair
and service utility lines or other components of the Project and (g) in
connection with Landlords rights under Articles 7 and 9 of this Lease;
provided, however, Landlord shall use reasonable efforts to minimize
interference with Tenants business. Except to the extent of Landlords or any
Landlord Parties negligence or willful misconduct, Landlord shall not be
liable to Tenant for the exercise of Landlords rights under this Section
21.24. Landlord shall use reasonable and good faith efforts 32




---



##### 



to inspect the Premises in a manner that will minimize to the extent
practicable the disruption of Tenants business in the Premises. 21.25 Brokerage. Tenant and Landlord each represent and warrant to the
other that it has not entered into any agreement with, or otherwise had any
dealings with, any broker or agent in connection with the negotiation or
execution of this Lease which could form the basis of any claim by any such
broker or agent for a brokerage fee or commission, finders fee, or any other
compensation of any kind or nature in connection herewith, other than with
Brokers, and each party shall indemnify and hold the other harmless from all
Claims by any broker or agent with respect to this Lease which arise out of any
agreement or dealings, or alleged agreement or dealings, between the
indemnifying party and any such agent or broker, other than with Brokers.
Landlord shall pay the Brokers as required pursuant to the Commission Agreement
between Landlord and the Brokers, attached hereto and incorporated by this
reference as Exhibit H relating to this Lease. This provision shall survive
the expiration or earlier termination of this Lease. 21.26 Notices. All notices, consents, demands, requests, documents, or
other communications (other than payment of Rent) required or permitted
hereunder (collectively, notices) shall be in writing and be deemed given,
whether actually received or not, when dispatched for hand delivery (with
signed receipts) to the other party, or on the first Business Day after
dispatched for delivery by nationally-recognized air express courier (with
signed receipts) to the other party, or on the third Business Day after deposit
in the United States mail, postage prepaid, certified, return receipt
requested, except for notice of change of address which shall be deemed given
only upon actual receipt. The addresses of the parties for notices are set
forth in the Basic Lease Information, or any such other addresses subsequently
specified by each party in notices given pursuant to this Section 21.26. ARTICLE 22 RENEWAL OPTIONS 22.1 Subject to the provisions hereinafter set forth, Landlord hereby
grants to Tenant an option to extend the Term of this Lease, for a period of
**** years, subject to variation pursuant to the terms of Section 23.4 and 25.4
below (the First Renewal Period) after the expiration of the initial Term,
which First Renewal Period shall commence on the day after the Expiration Date
(the First Renewal Period Commencement Date) and end on the day before the
**** anniversary of the First Renewal Period Commencement Date and an option to
extend the Term of this Lease, for a period of ****, subject to variation
pursuant to the terms of Section 23.4 and 25.4 below (the Second Renewal
Period) after the expiration of the First Renewal Period, which Second Renewal
Period shall commence on the day after the expiration of the First Renewal
Period (the Second Renewal Period Commencement Date) and end on the day
before the **** anniversary of the Second Renewal Period Commencement Date. 22.2 Each such option shall be exercisable by written notice (each, a
Renewal Notice) from Tenant to Landlord of Tenants election to exercise said
option given not later than twelve (12) months prior to the First Renewal
Period Commencement Date or Second 33




---



##### 



Renewal Period Commencement Date, as applicable. If Tenants then
applicable option is not so exercised, said option and all future options shall
thereupon expire. 22.3 Tenant may only exercise either such option, and an exercise thereof
shall only be effective, if (i) at the time of Tenants exercise of said option
and on the First Renewal Period Commencement Date or Second Renewal Period
Commencement Date, as applicable, this Lease is in full force and effect and no
Event of Default by Tenant exists, and (ii) inasmuch as said option is intended
only for the benefit of the original Tenant named in this Lease and said Tenant
has not assigned this Lease or sublet more than fifty percent (50%) of the
Premises for substantially all of the remaining term other than through a
Permitted Transfer. Without limitation of the foregoing, no sublessee or
assignee other than an assignee through a Permitted Transfer shall be entitled
to exercise said option. 22.4 Base Rent payable during each Renewal Period with respect to all
space included in the Premises as of the First Renewal Period Commencement Date
or Second Renewal Period Commencement Date, as applicable shall be equal to
**** of the Market Rent (as hereinafter defined). Landlord shall give Tenant
written notice of the Market Rent, including yearly escalations, within thirty
(30) days following written request by Tenant but not earlier than fourteen
(14) months prior to the First Renewal Period Commencement Date or Second
Renewal Period Commencement Date, as applicable. If Tenant disagrees with Landlords determination of the Market Rent,
Tenant shall notify Landlord of such disagreement within twenty (20) days after
receipt of Landlords determination of the Market Rent, which notice shall set
forth Tenants determination of the Market Rent. If Tenant fails to so notify
Landlord of Tenants disagreement and Tenants determination of Market Rent
within the required time period, Landlords determination of the Market Rent
shall be binding on Tenant. If Tenant so notifies Landlord that Landlords
determination of the Market Rent is not acceptable to Tenant together with
Tenants determination of Market Rent, Landlord and Tenant shall, during the
fifteen (15) day period after Tenants notice (the Negotiation Period),
attempt to agree on the Market Rent. If Landlord and Tenant are unable to
agree, Tenant shall within ten (10) days after the Negotiation Period, either
(i) accept Landlords determination of the Market Rent, (ii) if Tenant has not
already exercised its then current option, reject Landlords determination and
decline to exercise such option, or (iii) reject such determination, exercise
such option, if Tenant has not already done so, and submit the determination to
binding arbitration as provided below. If Tenant fails to so notify Landlord
of Tenants election under the preceding sentence within said ten (10) day
period after the Negotiation Period, Tenant shall be deemed to have rejected
Landlords determination and to have declined to exercise its current option,
if Tenant had not already exercised such option. In the event Tenant timely elects arbitration to determine the Market
Rent, Landlord and Tenant shall, within ten (10) days after such election to
arbitrate, each select an independent leasing broker who shall have at least
ten (10) years experience in leasing office space in the Market Area, with
working knowledge of current rental rates and practices and shall not be an
employee of Landlord or Tenant or a broker retained by Landlord or Tenant in
the previous twelve (12) month period. If either Landlord or Tenant fails to
appoint a leasing broker within 34




---



##### 



the ten (10) day period referred to above, the leasing broker appointed by
the other party shall be the sole leasing broker for the purposes hereof. Upon
selection, Landlords and Tenants leasing broker shall select a third leasing
broker meeting the aforementioned criteria. If the two (2) leasing brokers
cannot agree on the selection of the third leasing broker within ten (10) days
of their selection, then either party may request appointment of the third
leasing broker by application to the JAMS. Once the third leasing broker has
been selected as provided for above (or, if a party has failed to timely select
any leasing broker, then once that party has failed to make that selection),
then, as soon thereafter as practicable but in any case within fourteen (14)
days, the third leasing broker (or the sole leasing broker, as applicable)
shall make his/her determination of which of Landlords estimate of the Market
Rent or Tenants estimate of the Market Rent (collectively, the Estimates)
most closely reflects the Market Rent and such Estimate shall be binding on
both Landlord and Tenant as the Market Rent for the Premises for such Renewal
Period. Such leasing broker shall only be permitted to select either
Landlords or Tenants Estimate and shall not be permitted to determine a
different rate. The parties shall share equally in the costs of the third
leasing broker (or the sole leasing broker, as applicable). Any fees of any
leasing broker, counsel or experts engaged directly by Landlord or Tenant,
however, shall be borne by the party retaining such leasing broker, counsel or
expert. 22.5 If Tenant has validly exercised one of such options, within thirty
(30) days after the parties hereto agree upon the Market Rent, Landlord and
Tenant shall enter into a written amendment to this Lease confirming the terms,
conditions and provisions applicable to the First Renewal Period or Second
Renewal Period, as applicable, as determined in accordance herewith, with such
revisions to the rental provisions of this Lease as may be necessary to conform
such provisions to the Market Rent. Tenants failure to timely execute such
amendment shall not negate the irrevocable nature of Tenants election. 22.6 The term Market Rent per square foot of Rentable Area of the
Premises shall mean the base rent for comparable space within the sub-markets
of Sunnyvale, Santa Clara, North San Jose and Milpitas, roughly outlined by the
freeways 101, 237, and 280/680, in Santa Clara County, California (Market
Area). Comparable space shall consist of multi-story office buildings of
similar age, size, condition and quality of construction as the Buildings.
Market Rent shall be determined taking into consideration other relevant
factors such as term, broker involvement, rental abatement, tenant
improvements, and other concessions then being offered to renewal tenants with
comparable creditworthiness as Tenant at such time and may include annual
rental escalations. 22.7 Tenant shall not have any option to extend the terms of this Lease
beyond the expiration of the Second Renewal Period. Both the First Renewal
Period and the Second Renewal Period shall be on the same terms and conditions
set forth herein, except that (i) no concessions, abatements or allowances
granted with respect to the initial Term hereof shall be applicable to each of
the First Renewal Period and the Second Renewal Period, (ii) Base Rent shall be
adjusted as set forth in this Article 22 and (iii) First and Second Renewal
Periods, once exercised, cannot be exercised again. 35




---



##### 



ARTICLE 23 RIGHT OF FIRST OFFER TO LEASE BUILDING 10 23.1 Landlord hereby grants to Tenant the right to lease, on the terms and
conditions hereinafter set forth (the Building 10 Right of First Offer), the
building within the Project known as Building 10 or 5480 Great America Parkway,
Santa Clara, California (Building 10), pursuant to the terms set forth in
this Article 23 (the Building 10 First Offer Space). On or before the first
day of each calendar quarter in which Landlord intends to offer any part of
Building 10 for lease, Landlord shall give Tenant written notice (the Building
10 Lease Offer Notice) of (i) the floor as well as the location within
Building 10 of the Building 10 First Offer Space; (ii) the rentable area of the
Building 10 First Offer Space; (iii) Landlords estimate of the commencement
date for the Building 10 First Offer Space (the Building 10 First Offer Space
Commencement Date) and (iv) the initial rent, annual escalations of rent, any
tenant inducements and the term (Basic Terms) for such Building 10 First
Offer Space. Tenants right to lease all, but not less than all, of the
Building 10 First Offer Space described in the Offer Notice from Landlord shall
be exercisable by written notice from Tenant to Landlord (Building 10 Tenants
First Offer Notice) given not later than five (5) business days after such
Building 10 Lease Offer Notice is given, time being of the essence. In
addition, if Landlord has submitted a Building 10 Lease Offer Notice in
response to a proposal from a third party for the lease of premises which
includes both Building 10 First Offer Space and other space in the Project,
Landlord may condition Tenants exercise of its Building 10 Right of First
Offer with respect thereto on Tenants agreement to take all the space which is
the subject of such proposal, Building 10 First Offer Space and otherwise.
Once given, notice of exercise of such right shall be irrevocable, subject to
the terms of Section 24.3 below. If such right is not so exercised the first
time it is available to Tenant or if the conditions set forth in Section 23.4
are not satisfied, Tenants Building 10 Right of First Offer shall thereupon
terminate as to the Building 10 First Offer Space, and Landlord may thereafter
lease the Building 10 First Offer Space without notice to Tenant and free of
any right of Tenant (conditioned on Landlord entering into a lease on no more
favorable terms as to the term, base rent or tenant inducements offered
Tenant); provided that Tenants Building 10 Right of First Offer to Lease
hereunder shall be reinstated, (a) as to any of such portion of the Building 10
First Offer Space which Landlord does not lease or enter into a letter of
intent to lease within three (3) months after the Building 10 Offer Notice or
at such time as such letter of intent does not result in an executed lease, (b)
as to any portion of the Building 10 First Offer Space which is leased within
three (3) months after the Building 10 Offer Notice (or pursuant to a letter of
intent signed within three (3) months of the Building 10 Offer Notice), at the
expiration of such lease, as the same may be renewed or extended by the
existing tenant, whether or not pursuant to any existing renewal or extension
rights; and (c) if the rent at which Landlord will actually lease the Building
10 First Offer Space to a prospective tenant is less than ninety-five percent
(95%) of the rent contained in Landlords Building 10 Lease Offer Notice,
taking into account the Tenant Credit Adjustment, or the Basic Terms other than
rent in the lease to such prospective tenant are materially more favorable than
those offered to Tenant in Landlords Building 10 Lease Offer Notice.
Landlords Building 10 Lease Offer Notice may, at Landlords option, be sent
simultaneously with notices to other parties having rights in the applicable
Building 10 First Offer Space. 36




---



##### 



23.2 If Tenant has validly exercised its right to lease the Building 10
First Offer Space in accordance with the terms hereof, Landlord and Tenant
shall enter into a written lease confirming the terms, conditions and
provisions applicable to the Building 10 First Offer Space. If Landlord is
unable to deliver to Tenant possession of the Building 10 First Offer Space on
or before the estimated Building 10 First Offer Space Commencement Date for any
reason whatsoever, Landlord shall not be subject to any liability for such
failure to deliver possession. Except as set forth herein, such failure to
deliver possession shall not affect either the validity of this Lease, or the
obligations of either Landlord or Tenant under this Lease, or be construed to
extend the expiration of the Term of this Lease either as to the Building 10
First Offer Space or the balance of the Premises. Notwithstanding anything to
the contrary contained herein, Landlord represents that it shall use
commercially reasonable efforts to recover possession of the Premises following
the natural expiration of the third party lease. If Landlord is unable to
deliver possession of the Building 10 Offer Space within one hundred twenty
(120) days after the estimated Building 10 Offer Space Commencement Date,
Tenant may revoke its notice of exercise with respect to the Building 10 Offer
Space by written notice to Landlord given at any time prior to Landlord
delivering possession of the Building 10 Offer Space. If simultaneously with
or after Tenant gave its Building 10 Tenants First Offer Notice, Tenant also
exercised an option to extend the term of the Lease and Tenant revokes its
notice of exercise pursuant to the preceding sentence, Tenant may also revoke
its offer to extend at the time Tenant revokes with respect to Building 10. 23.3 Notwithstanding anything contained herein to the contrary, Tenant
acknowledges and agrees that (i) if Tenant does not properly exercise its right
to lease any portion of Building 10, its rights under this Article 23 are
expressly subordinate to the expansion rights, renewal rights and rights of
first offer or refusal of any tenant that actually leases premises within
Building 10 prior to Tenant, as such rights are contained in such tenants
lease; and (ii) its Building 10 Right of First Offer to Lease shall not apply
to any space which is being renewed or extended by the existing tenant of the
applicable Building 10 First Offer Space, whether or not pursuant to any
existing renewal or extension rights. 23.4 Tenant may only exercise its Building 10 Right of First Offer to
Lease and an exercise thereof shall only be effective if, (i) at the time of
Tenants exercise of said right and on the Building 10 First Offer Space
Commencement Date this Lease is in full force and effect and no Event of
Default by Tenant exists, (ii) inasmuch as said option is intended only for the
benefit of the original Tenant named in this Lease or a Permitted Transferee,
said Tenant has not assigned this Lease or sublet more than 50,000 square feet
of floor area of the Premises for substantially all of the remaining term,
other than through Permitted Transfers, (iii) at least five years remain in the
Term, as the same may have been extended pursuant to Article 22 hereof (If
Tenant must exercise a renewal option under Article 22 early in order to
achieve the required remaining Term, Base Rent during the First Renewal Period
or Second Renewal Period, as applicable, shall be set six (6) months prior to
the First Renewal Period Commencement Date or Second Renewal Period
Commencement Date, as applicable. In addition, if upon exercising a renewal
option the First Renewal Period or Second Renewal Period, as applicable, would
have a term that extends beyond the expiration of the term of the Lease for the
Building 10 First Offer Space, at the time Tenant exercises the renewal option,
Tenant may elect to shorten the First Renewal Period or Second Renewal Period,
as applicable, to be coterminous with the term of the 37




---



##### 



Lease for the Building 10 First Offer Space; and (iv) at the time of
Tenants exercise of said right Tenant delivers to Landlord, simultaneously
with the delivery of the Tenants First Offer Notice, a certified copy of
Tenants then current financial statements demonstrating a tangible net worth
of at least One Hundred Million Dollars ($100,000,000.00) and a net profit for
at least three (3) of the immediately preceding six (6) fiscal quarters of
Tenant. Without limitation of the foregoing, no sublessee or assignee other
than an assignee through a Permitted Transfer shall be entitled to exercise
said right. ARTICLE 24 RIGHT OF FIRST OFFER TO PURCHASE 24.1 At least forty-five (45) days prior to offering the Project or any
portion thereof (the Offered Property) for sale, Landlord shall by written
notice to Tenant advise Tenant that Landlord desires to offer the Offered
Property for sale along with a copy of a current title report for the Project
and a copy of all exceptions to title (the Right of First Offer to Sell).
Tenant shall have a period of thirty (30) days to inform Landlord that Tenant
desires to negotiate with Landlord to acquire the Offered Property and the
price at which Tenant would be willing to purchase the Offered Property
(Tenants Offer). If Tenant fails to provide Landlord with a Tenant Notice
within the thirty (30) day time period described above or if the parties do not
enter into a Purchase Contract and Landlord sells the Offered Property, then
except as expressly set forth herein, Tenant shall be deemed to have
permanently waived any rights Tenant may have under this Section 24.1 to
acquire the Offered Property. If Landlord informs Tenant that Landlord is
interested in negotiating a purchase agreement for the Offered Property based
on the terms set forth in Tenants Offer, Landlord shall refrain from actively
marketing the Offered Property for sale for a forty-five (45) day period, and
Landlord and Tenant shall in good faith endeavor to negotiate and execute a
formal purchase and sale agreement within such time period pursuant to which
Tenant shall purchase and Landlord shall sell the Offered Property upon the
price set forth in Tenants Offer and such other terms acceptable to both
parties each acting in good faith (Purchase Contract). If Landlord rejects
Tenants Offer or Landlord and Tenant are unable to negotiate and execute a
Purchase Contract on or before the expiration of the forty-fifth (45) day after
Tenant delivers Tenants Offer, Landlord may offer the Offered Property for
sale and contract for and consummate a sale of the Offered Property at any
price greater than the price set forth in Tenants Offer. In the event that
Landlord subsequently desires to sell the Offered Property for less than the
price set forth in Tenants Offer, Landlord shall offer the Offered Property to
Tenant at the new price that Landlord is willing to take from a third party
(the Revised Offer). Tenant may accept the Revised Offer within three (3)
business days by written notice. If Tenant so accepts such Revised Offer,
Landlord shall sell the Offered Property to Tenant upon the terms of the
Revised Offer as set forth in this Section 24.1. If Tenant does not accept the
Revised Offer within such three (3) business day period, Landlord shall be free
to sell the Offered Property at a price equal to or greater than the price set
forth in the Revised Offer. 24.2 Notwithstanding anything to the contrary contained herein, Tenant
shall have no rights under this Article 24 or otherwise to acquire any portion
of the Project in connection with any (i) Affiliate Transaction, (ii) a sale of
a portion of the Project that does not include the 38




---



##### 



Premises to a then current tenant of such portion of the Project, (iii)
transfer upon or in lieu of foreclosure or sale under the power of sale in
connection with any lien on the Project or any part thereof or (iv) the
property Landlord intends to offer for sale includes the entire Project and at
least two (2) additional properties. For the purposes hereof, an Affiliate
Transaction shall be a transaction wherein the purchaser or transferee of the
Premises is any person(s) or entity(ies) directly or indirectly, through one or
more intermediaries, controlled by, or under common control with Landlord, by
which control means the power to direct or approve substantial transactions.
Subject to the terms of Article 18 above, Tenant acknowledges that Landlord
shall have all rights necessary to finance the Project, including rights to
encumber the property with deeds of trust, mortgages or otherwise, and that no
such financing arrangements shall be deemed to be a sale of the Project or any
part thereof pursuant to this Article 24. 24.3 If at any time Landlord receives an unsolicited offer to purchase all
or a portion of the Project that does not include an offer to purchase property
in addition to the Project from a third party that Landlord is willing to
accept, Landlord shall notify Tenant of the terms and conditions of the offer
and allow Tenant to match the offer within fifteen (15) business days of
notification by Landlord. If Tenant accepts such offer, Landlord and Tenant
shall proceed in good faith to enter into a purchase and sale agreement within
the following thirty (30) days. If Tenant fails to accept such offer or the
parties cannot agree within such thirty (30) day period, then Landlord may sell
the Project or portion thereof at the price set forth in such offer. 24.4 Notwithstanding anything to the contrary contained herein (a) Tenant
shall have no right to assign, transfer or otherwise dispose of any of its
rights under this Article 24 except to a Permitted Transferee, (b) no owner of
the Project or any portion thereof, other than the original Landlord under this
Lease or any successor owner resulting from an Affiliate Transaction, shall
have any liability under this Article 24, (c) if Tenant shall purchase the
Premises or a portion thereof pursuant to this Article 24 or otherwise, all
obligations of Tenant under this Lease shall continue in full force and effect
as to the entire Premises until such sale is closed and if such sale is not
closed, shall continue in full force and effect as to the entire Premises; and
(d) if the rights of Tenant to purchase the Project or any specific portion of
this Project pursuant to this Article 24 are terminated for any reason, Tenant
hereby agrees to execute and deliver to Landlord any reasonable documents or
instruments confirming such termination within ten (10) business days following
Landlords request therefore. Without limitation of the foregoing, no
sublessee or assignee other than an assignee through a Permitted Transfer shall
be entitled to exercise said right. 24.5 Tenant may only exercise its Right of First Offer to Sell and an
exercise thereof shall only be effective if at the time of Tenants Offer and
on the closing date of such sale this Lease is in full force and effect and no
Event of Default by Tenant exists. ARTICLE 25 RIGHT OF FIRST OFFER FOR NEW IMPROVEMENTS 25.1 Landlord currently has the ability to construct additional office
improvements (the New Improvements) on the Northern portion of the Land.
Landlord has not settled on design 39




---



##### 



for the New Improvements, but contemplates that the New Improvements will
contain at least 150,000 rentable square feet of office space. Landlord hereby
grants to Tenant a right of first offer to lease the New Improvements (the New
Improvements Right of First Offer) pursuant to the terms set forth in this
Article 25. If Tenant elects to lease the New Improvements, Landlord will work
with Tenant to design the New Improvements to Tenants reasonable
specifications, provided that such design shall be subject to Landlords
approval and must (i) comply with all Requirements, (ii) include a minimum of
150,000 rentable square feet, and (iii) be for a first class office building
compatible with the rest of the Project and suitable for general office use by
other tenants upon vacancy by Tenant. If Tenant leases the New Improvements,
the annual base rent for the New Improvements (New Improvements Base Rent)
for the first year of leasing the New Improvements shall be the product of (i)
the New Improvement Costs and (ii) the rate of return that Landlord desires for
such transaction (the Return Rate). The New Improvement Costs shall be all
costs of any nature incurred by Landlord with respect to construction of the
New Improvements, which are all hard costs, all soft costs, land costs (the
Land Costs) and a development fee (the Development Fee). On or before the
first anniversary of the Commencement Date and on each anniversary of the
Commencement Date thereafter until the New Improvements have been leased,
Landlord shall give Tenant written notice (the New Improvement Offer Notice)
of (i) the Land Costs (which will vary based on density); (ii) the Development
Fee (which will vary based on cost); and (iii) the Return Rate that Landlord
will use to determine the first years base rent for a lease of the New
Improvements to Tenant, as well as any escalations of such base rent in ensuing
years of the lease. Tenant shall have the option to lease all, but not less
than all, of the New Improvements from Landlord. Such option shall be
exercisable by written notice from Tenant to Landlord (New Improvements
Tenants First Offer Notice) given not later than ten (10) business days after
such New Improvement Lease Offer Notice is given, time being of the essence.
In order to be effective the New Improvements Tenants First Offer Notice must
be accompanied by a deposit (the Plan Deposit) to reimburse Landlord for the
costs of designing and planning the New Improvements if Tenant does not
ultimately lease the New Improvements from Landlord. In addition, if Landlord
has submitted a New Improvement Offer Notice in response to a proposal from a
third party for the lease of premises which includes both the New Improvements
and other space in the Project, Landlord may condition Tenants exercise of its
New Improvements Right of First Offer with respect thereto on Tenants
agreement to take all the space which is the subject of such proposal, New
Improvements and otherwise. If such right is not so exercised the first time
it is available to Tenant or if the conditions set forth in Section 25.4 are
not satisfied, Tenants New Improvements Right of First Offer shall thereupon
terminate as to the New Improvements, and Landlord may thereafter lease the New
Improvements without notice to Tenant and free of any right in Tenant; provided
that Tenants New Improvements Right of First Offer hereunder shall be
reinstated, (i) if Landlord does not lease or enter into a letter of intent to
lease (unless such letter of intent does not lead to a lease) the New
Improvements within one year after the New Improvements Offer Notice, (ii) if
the Land Costs or Development Fee used to derive the rent at which Landlord
will actually lease the New Improvements to a prospective
 tenant are less than
ninety-five percent (95%) of the amounts contained in Landlords New
Improvements Offer Notice, and (iii) if the Return Rate used to derive the rent
at which Landlord will actually lease the New Improvements to a prospective
tenant is less than ninety-five percent (95%) of the Return Rate contained in
Landlords New Improvements Offer Notice, taking into account the 40




---



##### 



Tenant Credit Adjustment. The Land Costs, Development Fee and Return Rate
applicable through the first anniversary of the Commencement Date are specified
on Exhibit G hereto. As used herein, the term Tenant Credit Adjustment means
a percentage increase or decrease in rent to account for the risks associated
with leasing to tenants with different credit ratings. Included on Exhibit G
is a grid depicting the Tenant Credit Adjustment in the form of the basis point
spreads between the various credit ratings for prospective tenants and examples
of how such spreads change Landlords Return Rate for prospective tenants with
different credit ratings. Landlords New Improvements Offer Notice may, at
Landlords option, be sent simultaneously with notices to other parties having
rights in the New Improvements. 25.2 If Tenant has validly exercised its right to lease the New
Improvements in accordance with the terms hereof, Landlord and Tenant shall
exercise good faith diligent efforts to agree upon a preliminary design for the
New Improvements and enter into a written amendment to this Lease confirming
the terms, conditions and provisions applicable to the New Improvements within
forty-five (45) days after Landlords receipt of the New Improvements Tenants
First Offer Notice. The amendment to this Lease for the New Improvements shall
(i) include customary build to suit construction provisions for the New
Improvements, (ii) adjust the Rentable Area of the Project, Rentable Area of
the Premises and Tenants Share to reflect the addition of the New
Improvements, and (iii) provide for a minimum Term of this Lease with respect
to the New Improvements of ten (10) years. If Landlord and Tenant do enter
into such amendment, Landlord shall return the Plan Deposit to Tenant. If
after exercising good faith diligent efforts Landlord and Tenant are unable to
agree upon a preliminary design for the New Improvements and enter into a
written amendment to this Lease confirming the terms, conditions and provisions
applicable to the New Improvements within forty-five (45) days after Landlords
receipt of the New Improvements Tenants First Offer Notice, such failure shall
not affect either the validity of this Lease, or the obligations of either
Landlord or Tenant under this Lease, and Landlord shall be free to lease the
New Improvements to a third party free and clear of Tenants rights under this
Lease. In such event Landlord shall apply the Plan Deposit to the costs
incurred by Landlord negotiating with Tenant and designing the New Improvements
and return any remaining portion of Plan Deposit to Tenant. 25.3 Notwithstanding anything contained herein to the contrary, Tenant
acknowledges and agrees that if Tenant exercises its rights under this Article
25 but desires a building with less square footage than is permitted by the
Regulations, Tenant shall work with Landlord to design and build the New
Improvements to the full square footage permitted by the Regulations and
Landlord shall be permitted to lease the space not desired by Tenant to others.
In such event the New Improvements Costs shall be equitably allocated for the
purpose of calculating rent. In addition, if Landlord builds the New
Improvements on a speculative basis rather than as a build to suit for a
specific tenant, Tenants rights under this Article 25 shall terminate, and
Tenant shall have the same rights with respect to such New Improvements that
Tenant has under Article 23 with respect to Building 10; provided, that (i)
Landlord shall provide Tenant with annual (on each anniversary of the
Commencement Date) rather than quarterly notices in the nature of the Building
10 Lease Offer Notice; (ii) all references to three (3) months in Section
23.1 shall be changed one (1) year and (iii) and the provisions of Section
25.4 below shall apply with respect to such New Improvements in lieu of Section
23.4. Finally, if Landlord builds the New Improvements in phases, Tenant shall
have the rights under this Article 25 with respect to each 41




---



##### 



phase; provided that Tenants rights with respect to any subsequent phase
shall be subordinate to the rights of any other tenant of a prior phase. 25.4 Tenant may only exercise its New Improvements Right of First Offer to
Lease and, at Landlords option, an exercise thereof shall only be effective
if, (i) at the time of Tenants exercise of said right and on the commencement
date for the New Improvements this Lease is in full force and effect and no
Event of Default exists, (ii) inasmuch as said option is intended only for the
benefit of the original Tenant named in this Lease, the entire Premises are
occupied by the original Tenant named herein and said Tenant has not assigned
this Lease or sublet more than 50,000 square feet of floor area of the Premises
for substantially all of the remaining term, other than to Permitted
Transferees, (iii) at least ten (10) years remain in the Term, as the same may
have been extended pursuant to Article 22 hereof (if Tenant must exercise a
renewal option under Article 22 early in order to achieve the required
remaining Term, Base Rent during the First Renewal Period or Second Renewal
Period, as applicable, shall be set six (6) months prior to the First Renewal
Period Commencement Date or Second Renewal Period Commencement Date, as
applicable. In addition, if upon exercising a renewal option in order to
achieve the minimum required remaining Term the First Renewal Period or Second
Renewal Period, as applicable, would have a term that extends beyond the
expiration of the term of the Lease for the New Improvements, at the time
Tenant exercises the renewal option, Tenant may elect to shorten the First
Renewal Period or Second Renewal Period, as applicable, to be coterminous with
the term of the Lease for the New Improvements.), and (iv) at the time of
Tenants exercise of said right Tenant delivers to Landlord, simultaneously
with the delivery of the Tenants First Offer Notice, a certified copy of
Tenants then current financial statements demonstrating that Tenant has a
Standard & Poors rating of BBB- or better. ARTICLE 26 CAFETERIA 26.1 Landlord, by itself, or through a contractor (the Cafeteria
Operator) shall use good faith, reasonable efforts to operate a restaurant in
the Cafeteria for the use of Tenant, its employees and invitees, and the users
of Building 10 and their employees and invitees. Tenant hereby approves Café
Royale as the initial Cafeteria Operator. Landlord and Tenant agree to consult
and reasonably agree as to the type and scope of services to be provided by the
Cafeteria Operator, including the type and selection of menu items, hours of
operation and whether catering services will be provided. Landlord agrees that
any service contract with a Cafeteria Operator will include a right to
terminate such contract upon thirty (30) days notice. If Tenant is not
satisfied with the services provided by the Cafeteria Operator, Landlord and
Tenant will cooperate to change the services provided by the Cafeteria Operator
to such services reasonably approved by Landlord and Tenant. If Tenant remains
dissatisfied, on a reasonable, but subjective basis, Landlord will find a
replacement Cafeteria Operator. The replacement Cafeteria Operator and the
scope of services such operator provides shall be approved by Tenant in
advance, which approval shall not be unreasonably withheld. Once Tenant
approves such replacement Cafeteria Operator and scope of services, Landlord
shall enter into a service contract with such Cafeteria Operator and replace
the then current Cafeteria Operator. If notwithstanding Landlords reasonable,
good faith efforts, Landlord cannot secure an operator for the Cafeteria 42




---



##### 



satisfactory to Tenant, Landlord shall offer such operation to Tenant. In
such event, Tenant may, at Tenants sole cost and expense, but with no
adjustment to Base Rent or Rentable Area of the Project or Rentable Area of the
Premises, operate the Cafeteria for the use of: (i) Tenant, its employees and
invitees; (ii) the occupants of Building 10 and their employees and invitees;
and (iii) at Tenants election, any other users of the Project and their
employees and invitees. Landlord shall perform all necessary maintenance and
repairs to the Cafeteria. The cost to operate the Cafeteria, after deducting
sums collected in connection with the operation thereof, shall be Operating
Costs. Any user other than Tenant, its employees and invitees shall enter the
Cafeteria from the Common Areas. Tenant shall be solely responsible to secure
any entrance to the Cafeteria from the Premises. ARTICLE 27 PERSONAL PROPERTY Landlord hereby grants to Tenant the right to use the existing furniture,
telephone and other personal property (collectively, the Personal Property)
located in the Premises during the Term and any extensions thereof at no
additional cost on an as-is basis. The Personal Property is more particularly
listed on Exhibit F attached hereto (Inventory List). Within thirty (30)
days after the Commencement Date, Landlord and Tenant shall conduct a
walk-through inspection of the Premises to confirm the completeness and
accuracy of the Personal Property shown on the Inventory List. If as a result
of the walk-through inspection, the parties determine that changes to the
Inventory List are warranted, such list shall be updated and the parties agree
to execute an amendment to this Lease reflecting such changes to the Inventory
List. Tenant shall have a period of ninety (90) days from the Commencement
Date within which to inform Landlord of whether it desires to utilize the
telephone system currently within the Premises. In the event Tenant notifies
Landlord within such ninety (90) day period that it will not use the existing
telephone system, Landlord shall, within thirty (30) days thereafter remove the
PBX cabinet of the telephone system and restore any damage to the Premises
caused thereby at its sole cost and expense. Landlord makes no representation
or warranty as to the condition of such Personal Property or its usefulness to
Tenant. Tenant shall be responsible for the maintenance and repair of the
Personal Property during the Lease Term at its sole cost and expense and shall
insure the Personal Property as part of Tenants property insurance required to
be carried hereunder. Upon the expiration or earlier termination of this
Lease, but subject to the terms of Articles 15 and 16 hereof, Tenant shall
return the Personal Property to Landlord in its condition existing as of the
Commencement Date, reasonable wear and tear, obsolence and/or any item or items
of Personal Property reaching the end of its serviceable or useful life
excepted. In the event that Tenant desires to dispose of any of the Personal
Property prior to the expiration or earlier termination of this Lease, Tenant
shall deliver written notice to Landlord specifying the Personal Property of
which Tenant desires to dispose. Landlord may deliver written notice to Tenant
within fifteen (15) days of receipt of Tenants notice of Landlords desire to
retain such Personal Property, in which case Landlord shall arrange with Tenant
to remove such Personal Property from the Premises at Landlords sole cost and
expense. Unless Landlord notifies Tenant that Landlord desires to retain such
Personal Property within the time periods set forth herein, Tenant may dispose
of such Personal Property at Tenants sole cost and expense as Tenant sees fit. 43




---



##### 



ARTICLE 28 SIGNAGE 28.1 Subject to the provisions of this Article 28, Tenant shall be
entitled to install the directional signage and signs identifying Tenants name
and logo in the Premises, on the Buildings, and on monuments provided by
Landlord (collectively, the Tenants Signage). 28.2 The graphics, materials, color, design, lettering, lighting, size,
illumination, specifications and exact location of Tenants Signage
(collectively, the Sign Specifications) shall be subject to the prior written
approval of Landlord, which approval shall not be unreasonably withheld,
condition or delayed, and shall be consistent and compatible with the quality
and nature of the Project. In addition, without limiting the foregoing,
Landlord may reasonably disapprove proposed Tenants Signage if such signage
constitutes more than a reasonable allocation of the total signage allocation
available to the Project under Requirements. Tenants Signage shall be subject
to Tenants receipt of all required governmental permits and approvals and
shall be subject to all Requirements and to any covenants, conditions and
restrictions affecting the Project. Landlord shall use reasonable efforts to
assist Tenant in obtaining all necessary governmental permits and approvals for
Tenants Signage. Tenant acknowledges that Landlord may install such monument
signs on the Project as Landlord deems desirable acting in Landlords
reasonable discretion. In the event that such monument signs identify tenants
or occupants of the Project, Tenant shall, at Tenants sole cost and expense,
have the right to include Tenants name and logo on such monument signs in a
manner determined by Landlord so as to reasonably allocate the use of such
signage among the occupants of the Project (which may differ from sign to sign,
but which shall be reasonable taking all of the signs together), using such
materials and colors as Landlord shall determine in its reasonable discretion. 28.3 The costs of the actual signs comprising Tenants Signage and the
installation, design, construction, and any and all other costs associated with
Tenants Signage, including, without limitation, utility charges and hook-up
fees, permits, and maintenance and repairs shall be the sole responsibility of
Tenant; provided that Tenant shall be responsible for the cost of Tenants sign
panel on the Monument Sign, but Landlord shall maintain all monument signs set
forth in this Article 28 in good condition and repair, the cost of which shall
be included in Operating Costs. Should Tenants Signage require repairs, as
determined in Landlords reasonable judgment, Landlord shall have the right to
provide notice thereof to Tenant and Tenant (except as set forth above) shall
cause such repairs to be performed within thirty (30) days after receipt of
such notice from Landlord at Tenants sole cost and expense; provided, however,
if such repairs are reasonably expected to require longer than thirty (30) days
to perform, Tenant shall commence such repairs and/or maintenance within such
thirty (30) day period and shall diligently prosecute such repairs and
maintenance to completion. Should Tenant fail to perform such repairs within
the periods described in the immediately preceding sentence, Landlord shall
have the right to cause such work to be performed and to charge Tenant as
Additional Rent for the actual cost of such work. Upon the expiration or
earlier termination of this Lease, Tenant shall, at Tenants sole cost and
expense, cause Tenants Signage to be removed and shall cause the areas in
which such Tenants Signage was located to be restored to 44




---



##### 



the condition existing immediately prior to the placement of such Tenants
Signage. If Tenant fails to timely remove such Tenants Signage or to restore
the areas in which such Tenants Signage was located, as provided in the
immediately preceding sentence, then Landlord may perform such work, and all
actual costs incurred by Landlord in so performing shall be reimbursed by
Tenant to Landlord within thirty (30) days after Tenants receipt of an invoice
therefor. The terms and conditions of this Section 28.3 shall survive the
expiration or earlier termination of this Lease. ARTICLE 29 COMPETITION 29.1 Landlord hereby agrees that Landlord shall not lease, sublease,
license or enter into any other similar agreement for occupancy of any portion
of the Project to any of the companies or any entity that at the time of lease
execution for such premises is a department, division, wholly owned subsidiary,
affiliate under common control (as defined in Section 8.4 above) or successor
entity of the companies listed below in this Section 29.1 (Prohibited
Companies). Landlord further covenants and agrees that all other leases for
premises in the Project shall contain provisions similar to those set forth in
Sections 8.3(c) which provide that Landlord may refuse consent to a Transfer if
such transfer would cause a default under any other lease in the Project,
including a default under this Lease and Landlord shall refuse consent to a
Transfer under any lease for a portion of the Project that would cause a
default under this Lease. Notwithstanding the foregoing, if Landlord grants to
any other tenant in the Project the right to assign its lease or sublet all or
any portion of its premises to a permitted transferee (the definition of
which in such lease for premises within the Project will be substantially
similar to the definition of Permitted Transferee set forth in Section 8.4
above), and such permitted transferee is a Prohibited Company, then, and only
then, will Landlord allow such Prohibited Company to occupy any space at the
Project. Such companies are (1) Cognos Corporation, a Delaware corporation, (2)
SAP America, Inc., a Delaware corporation, (3) Microsoft Corporation, a
Washington corporation, (4) Oracle Corporation, a Delaware corporation, (5) SAS
Institute, Inc., a North Carolina corporation, (6) Peoplesoft, Inc., a Delaware
corporation, and (7) Business Objects Americas, a Delaware corporation. ARTICLE 30 SATELLITE DISH 30.1 Tenant shall have the right to install, at Tenants sole cost and
expense, on the roof of the Buildings at a location reasonably acceptable to
Landlord satellite dishes and antenna or smaller and related accessories,
including without limitation the conduit described below (collectively,
Satellite Equipment) as Tenant may reasonably request, provided that such
Satellite Equipment is properly screened, does not damage the structural
integrity of the Premises, shall not involve the making of any roof
penetrations or any other actions which would result in a breach of Landlords
roof warranty, shall comply with applicable laws and further provided that
Tenant provides Landlord, at least twenty (20) days prior to any such
installation: (i) plans and specifications for the installation of the
Satellite Equipment, which shall be subject 45




---



##### 



to Landlords prior written approval, which approval shall not be
unreasonably withheld or delayed; and (ii) copies of all required governmental
and quasi-governmental permits, licenses and authorizations which Tenant shall
obtain at its own expense. Once installed, Landlord shall be entitled, at
Landlords cost, to require tenant to relocate its Satellite Equipment to a
different location on the roof of the Buildings as reasonably determined by
Landlord. Tenant acknowledges that, upon the expiration or termination of this
Lease, Tenant shall be responsible, at its sole cost and expense, to remove the
Satellite Equipment and repair any and all damage as a result thereof. In
addition, Tenant acknowledges that Tenant shall be responsible for all
additional roof costs incurred by Landlord in the maintenance or replacement of
the roof of applicable Building due to the presence of the Satellite Equipment. 30.2 Tenant shall not use the roof or the Satellite Equipment in any way
that interferes with the use of the Project by: (a) Landlord or (b) tenants or
licensees of Landlord now or hereafter leasing or licensing space in, on or at
the Project (the Project Tenants). The operation of the Satellite Equipment
shall not interfere with the Project Tenants or with the maintenance or
operation of the Project, including but not limited to the roof, MATV, CATV or
other video systems, HVAC systems, electronically controlled elevator systems,
computers, telephone systems, or any other system serving the Project and/or
its occupants, or the operation of any radio or telecommunication equipment
installed at the Project. Tenant agrees to immediately cease all operations
(except for testing as approved by Landlord) until the interference has been
corrected to the sole satisfaction of the Landlord. Tenant shall be
responsible for all costs associated with any tests deemed necessary to resolve
any and all interference as set forth in this Lease. If such interference has
not been corrected within thirty (30) days, Landlord may require Tenant to
remove the Satellite Equipment. All operations by Tenant shall be lawful and
in compliance with all FCC rules and regulations. Tenant shall be responsible
for all costs associated with any tests deemed necessary to resolve any and all
interference which Landlord determines or reasonably believes is being caused
by the Satellite Equipment or Tenants use of the Satellite Equipment. 30.3 Tenant hereby agrees to indemnify and hold Landlord, its partners,
agents, and employees harmless from and against any and all costs, claims,
damages, cause of action, and liability (including reasonable attorneys fees
and court costs) which may arise by reason of (a) any interference as
hereinabove described, and/or (b) any occurrence attributable to or arising out
of the installation, maintenance, repair, operation, or removal of any of the
Satellite Equipment, including, without limitation, any claim or cause of
action for injury to or death of any person or damage to any property, and
Tenant agrees to defend any claim, cause of action, or demand against Landlord,
its partners, agents, and employees, arising out of any such interference
and/or occurrence. 46




---



##### 



IN WITNESS WHEREOF, Landlord and Tenant have duly executed and delivered
this Lease, as of the day and year set forth on the cover page hereof. LANDLORD:PRENTISS PROPERTIES ACQUISITIONPARTNERS, L.P., a Delaware limited partnershipBy:
    
    Prentiss Properties, Inc., a Delaware
corporation, general partnerBy:Name:Title:By:Name:Title:TENANT:HYPERION SOLUTIONS CORPORATION,a Delaware corporationBy:Name:Title:By:Name:Title:
 47




---



##### 



SCHEDULE 1.1 DEFINITIONS When used in this Lease, the terms set forth below shall have the
following meanings: Access Date shall have the meaning given to it in Exhibit D hereof. ADA shall have the meaning given to it in Section 9.4 hereof. Additional Rent shall have the meaning given to it in the Basic Lease
Information Section hereof. Affiliate shall have the meaning given to it in Section 5.5 hereof. Affiliate Transaction shall have the meaning given to it in Section 24.2
hereof. Alterations shall have the meaning given to it in Section 10.1 hereof. Amended Notice shall have the meaning given to it in Section 6.1(C)
hereof. Annual Adjustment Notice shall have the meaning given to it in Section
6.1(C) hereof. Bankruptcy Code shall mean the United State Bankruptcy Code relating to
Bankruptcy, as amended. Base Rent shall have the meaning given to it in the Basic Lease
Information Section hereof. Basic Lease Information shall have the meaning given to it in the Basic
Lease Information Section hereof. Bonus Rent shall have the meaning given to it in Section 8.3 hereof. Brokers shall have the meaning given to it in the Basic Lease
Information Section hereof. Building 10 shall have the meaning given to it in Section 23.1 hereof. Building 10 First Offer Space shall have the meaning given to it in
Section 23.1 hereof. Building 10 First Offer Space Commencement Date shall have the meaning
given to it in Section 23.1 hereof. Building 10 Lease Offer Notice shall have the meaning given to it in
Section 23.1 hereof. 1




---



##### 



Building 10 Right of First Offer shall have the meaning given to it in
Section 23.1 hereof. Buildings shall have the meaning given to it in the Basic Lease
Information Section hereof. Business days shall mean Monday through Friday (except for Holidays). Cafeteria shall have the meaning given to it in the Basic Lease
Information Section hereof. Cafeteria Operator shall have the meaning given to it in Section 26.1. Cease to Use, Ceases to Use or Ceased to Use shall mean ceasing use
for business purposes, but Tenant shall not be deemed to be using the Premises
or portion thereof for business purposes solely because of the presence of
Tenants furniture, fixtures, equipment and personal property within the
Premises or the presence of personnel for the purpose of securing or protecting
Tenants property such as security guards or information technology personnel. Claims shall have the meaning given to it in Section 12.2 hereof. Class A Buildings shall mean Class A office buildings of similar age,
quality of construction and size in the Market Area. Commencement Date shall have the meaning given to it in Section 3.1
hereof. Commencement Notice shall have the meaning given to it in Section 3.1
hereof. Common Areas shall mean those certain areas and facilities of the
Project and those certain improvements to the Land which are from time to time
provided by Landlord for the use of tenants of the Project and their employees,
clients, customers, licensees and invitees or for use by the public, which
facilities and improvements may include without limitation the Underground
Parking Area, the Cafeteria, all parking fields, any and all corridors,
elevator foyers, vending areas, cafeterias, bathrooms, electrical and telephone
rooms, mechanical rooms, janitorial areas, conference centers, fitness centers
and other similar facilities of buildings other than the Buildings of the
Premises and any and all grounds, parks, landscaped areas, outside sitting
areas, sidewalks, walkways, tunnels, pedestrianways, skybridges, and generally
all other improvements located on the Land, or which connect the Land to other
buildings. Core Building Systems shall have the meaning given to it in Section 9.1
hereof. The words day or days shall refer to calendar days, except where
Business Days are specified. Delivery Condition shall have the meaning given to it in Section 9.3
hereof. Development Fee shall have the meaning given to it in Section 25.1
hereof. 2




---



##### 



Estimates shall have the meaning given to in Section 22.4 hereof. Event of Default shall have the meaning given to it in Section 13.1
hereof. Expiration Date shall have the meaning given to it in the Basic Lease
Information Section hereof. First Renewal Period shall have the meaning given to it in Section 22.1
hereof. First Renewal Period Commencement Date shall have the meaning given to
it in Section 22.1 hereof. Force Majeure shall have the meaning given to it in Section 21.6 hereof. Generators shall have the meaning given to it in Section 9.1 hereof. Hazardous Substance shall mean any substance, material, waste, gas or
particulate matter which is regulated by any local governmental authority, the
State of California, or the United States Government, including, but not
limited to (i) any material or substance which is defined or designated as a
hazardous waste, hazardous material, hazardous substance, extremely
hazardous waste, infectious waste, medical waste, toxic substance,
toxic pollutant or restricted hazardous waste under any provision of local,
state or federal law; (ii) oil or petroleum; (iii) asbestos and
asbestos-containing materials; (iv) polychlorinated biphenyls, urea
formaldehyde, radon gas; (v) radioactive material; (vi) any Infectious Waste;
and (vii) any product that is flammable, combustible, corrosive, caustic
poisonous, explosive or hazardous. Tenant shall not be deemed to be the operator of Tenants facility and
the owner of all Hazardous Substances or Infectious Wastes brought on the
Premises by Tenant, or the Tenant Parties and the wastes, byproducts or
residues generated, resulting or produced therefrom. Holidays shall mean those holidays designated by Landlord, which
holidays shall be consistent with those holidays designated by landlords of
other first-class office buildings in the greater San Jose area. The words herein, hereof, hereby, hereunder and words of similar
import shall be construed to refer to this Lease as a whole and not to any
particular Article or Section thereof unless expressly so stated. The words include and including shall be construed as if followed by
the phrase without being limited to. Infectious Wastes shall mean: any solid waste capable of producing an
infectious disease, including all bulk blood, blood products; cultures of
specimens from medical, pathological, pharmaceutical, research, commercial and
industrial laboratories; human tissues; organs, body parts, secretions, blood
and body fluids removed during surgery and autopsies; the carcasses and body
parts of all animals exposed to pathogens in research, used in the vivo testing 3




---



##### 



of pharmaceuticals or that died of known or suspected infectious diseases;
needles, syringes and scalpel blades. Interest Rate shall have the meaning given to it in Section 4.2 hereof. Land shall have the meaning given to it in the Basic Lease Information
Section hereof. Land Costs shall have the meaning given to it in Section 25.1 hereof. Landlord shall have the meaning given to it in the first paragraph of
this Lease. Landlords Address for Payment shall have the meaning given to it in the
Basic Lease Information Section hereof. Landlords Address for Notice shall have the meaning given to it in the
Basic Lease Information Section hereof. Landlords Contribution shall have the meaning given to it in the Basic
Lease Information Section hereof. Landlord Parties shall have the meaning given to it in Section 17.2
hereof. Lease shall have the meaning given to it in the first paragraph of this
Lease. Leasehold Improvements shall have the meaning given to it in Exhibit D
hereof. Lease Year shall have the meaning given to it in the Basic Lease
Information Section hereof. Major Alteration shall have the meaning given to it in Section 10.1
hereof. Market Area shall have the meaning given to it is Section 22.6 hereof. Market Rent shall have the meaning given to it is Section 22.6 hereof. Negotiation Period shall have the meaning given to it in Section 22.4
hereof. New Improvements shall have the meaning given to it in Section 25.1
hereof. New Improvements Base Rent shall have the meaning given to it in Section
25.1 hereof. New Improvements Costs shall have the meaning given to it in Section
25.1 hereof. New Improvements Offer Notice shall have the meaning given to it in
Section 25.1 hereof. 4




---



##### 



New Improvements Right of First Offer shall have the meaning given to it
in Section 25.1 hereof. New Improvements Tenants First Offer Notice shall have the meaning
given to it in Section 25.1 hereof. notices shall have the meaning given to it in Section 21.26 hereof. Offered Property shall have the meaning given to it in Section 24.1
hereof. Operating Costs shall mean any and all expenses, costs and disbursements
of every kind which Landlord pays or incurs or becomes obligated to pay in
connection with the operation, management, repair and maintenance of the
Project, including, without limitation, the cost to operate the Cafeteria, less
receipts therefrom, the costs of lighting the Common Areas; the cost of
delivering gas, water and sewer services to the Project, snow and ice and trash
removal; painting; cleaning; landscaping and grounds maintenance; window
cleaning; elevator maintenance in the Common Areas; repair and maintenance of
the Project (including, but not limited to, Landlords repair, maintenance and
service obligations set forth in Article 7 and Article 9 hereof except as
otherwise expressly set forth herein); the rental value of the Projects
management office reasonable in size for the Project; maintenance and repair of
all personal property of Landlord used in connection with the Project, the cost
of renting personal property and equipment used in the repair and maintenance
of the Project; loading docks and truck docks; fuel, gas, water, sewer, steam,
electricity and other utility charges (other than utilities metered directly to
and paid by tenants); insurance and insurance deductibles (other than
earthquake insurance deductibles which shall be treated in the same manner as
Core Building Systems); security or traffic control forces or equipment (not to
be construed to require Landlord to provide such services or equipment);
uniforms, supplies; holiday decorations; sales and use taxes on purchased
goods; and other labor costs, payroll taxes, insurance, training and wages,
salaries and fringe benefits of persons engaged in the accounting, operation,
management, maintenance or repair of the Project; a management fee of three
percent (3%) of Base Rent and Additional Rent (whether or not Landlord engages
a property manager or uses its own personnel); Taxes (defined below); legal and
accounting costs incurred by Landlord or paid by Landlord to third parties,
reasonable appraisal fees for appraisals made in connection with obtaining
insurance for the Project, reasonable consulting fees and all other
professional fees and disbursements to the extent of services performed for the
Project, all association dues incurred in connection with the operation,
management, maintenance of the Project, any and all amounts payable pursuant to
any declaration of covenants, reciprocal easement agreement or other
encumbrance of record which may now or in the future affect the Project,
excluding legal fees with respect to disputes with individual tenants,
negotiation of tenant leases or with respect to the ownership rather than the
operation, management or repair of the Project and excluding appraisal
consulting and other professional fees incurred in connection with the
financing or disposition of the Project; and any other expense or charge which,
in accordance with generally accepted accounting or management principles,
would be considered an expense of operating, maintaining upgrading, replacing,
managing, or repairing the Project. 5




---



##### 



Operating Costs shall exclude (a) specific costs for any capital repairs,
replacements, equipment or improvements, except as provided below; (b) expenses
for which Landlord is reimbursed or indemnified (either by an insurer,
condemner, tenant, warrantor or otherwise) to the extent of funds received by
Landlord; (c) expenses incurred in leasing or procuring tenants (including
lease commissions, advertising expenses and expenses of renovating space for
tenants); (d) except as provided below, payments for rented equipment if such
payments would constitute a capital expenditure not permitted pursuant to the
foregoing if the equipment were purchased; (e) interest or amortization
payments on any mortgages; (f) net basic rents under ground leases; (g) costs
representing an amount paid to an affiliate of Landlord which is in excess of
the amount which would have been paid in the absence of such relationship; (h)
costs specially billed to and paid by specific tenants; (i) salaries and
benefits of employees of Landlord and its affiliates above the grade of group
manager; (j) depreciation on the Premises, Buildings or equipment therein; (k)
amortization of cost of tenant improvements in the Project; (l) third party
accountants fees, other professional fees and costs incurred in connection
with disputes or lease negotiations with tenants or other occupants or
prospective tenants or occupants of all or any portion of the Project, the
enforcement of any leases (including unlawful detainer proceedings and the
collection of rents), (m) overhead and profit paid to subsidiaries or
affiliates of the Landlord for services (other than management) on or to the
Project for supplies or other materials, to the extent that the overall cost of
the services, supplies or materials provided by Landlord materially exceeds the
competitive cost of the services, supplies, or materials if obtained from an
unrelated third party on an arms length basis; (n) compensation paid to
clerks, attendants, or other persons in commercial concessions operated by the
Landlord, other than in connection with the operation of the Cafeteria; (o)
rentals and other related expenses incurred in leasing air conditioning
systems, elevators, or other equipment ordinarily considered to be of a capital
nature, except that if Landlord incurs such rentals as an alternative to
financing such capital expenditure, the annual installments of such rentals may
be passed through to the extent that such item would have been passed through
as a capital expense as set forth below; (p) items and services for which
Tenant reimburses the Landlord or pays third parties or that the Landlord
provides selectively to one or more tenants of all or any portion of the
Project other than Tenant without reimbursement; (q) maintenance costs incurred
in connection with repairs or other work needed because of fire, windstorm, or
other casualty or cause insured against by Landlord or to the extent Landlords
insurance required under the terms of the Lease would have provided insurance,
whichever is greater; (r) all voluntary contributions to any political,
charitable-organizations or other industry related associations (e.g., BOMA);
(s) capital costs for the acquisition of sculpture, paintings or other art
objects; (t) advertising, marketing and promotion costs; (u) costs associated
with the operation of the corporation or other entity which constitutes the
Landlord, as distinguished from costs of operation of the Project, including
accounting and legal costs, costs of defending lawsuits with any mortgagee, and
the costs of selling, syndicating, financing, mortgaging or hypothecating any
ownership interest in Landlord, or any of the Landlords interests in the
Project; (v) reserves for bad debts or rental losses; (w) the costs incurred to
investigate the presence of any Hazardous Material (as defined above), costs to
respond to any claim of Hazardous Material contamination or damage, costs to
remove any Hazardous Material from the Premises, Buildings or Project or to
remediate any Hazardous Material contamination, any judgments or other costs
incurred in connection with any Hazardous Material exposure or release, except
to the extent that the cost is caused by the storage, use, 6




---



##### 



release or disposal of the subject Hazardous Material by Tenant; (x) fines
and penalties incurred due to Landlords operation of the Project in violation
of any Requirements or due to Landlords failure to timely pay real property
taxes; and (y) any costs incurred by Landlord in connection with the
maintenance or repair of any new improvement on the Project that Tenant does
not use and from which Tenant does not benefit to the extent that such costs
increase the cost to operate the Project on a per square foot basis.
Notwithstanding anything to the contrary contained in this Lease, Operating
Costs shall not include any charge that would duplicate or otherwise result in
double reimbursement to Landlord for a single expenditure made by Landlord. Operating Costs shall include the cost to replace any Core Building
Systems, earthquake insurance deductibles and with respect to the replacement
or addition of capital improvements, the following: (i) replacements of
existing capital improvements; (ii) capital improvements made to increase
efficiencies at the Project; or (iii) capital improvements required by
Requirements made on or after the Commencement Date, in each case amortized
over the useful life of such Core Building System, earthquake insurance
deductible or capital improvement (as determined in accordance with generally
accepted accounting principles), together with interest at two percent (2%)
above the Prime Rate per annum on the unamortized cost of such improvement or
deductible. To the extent that Operating Costs include the costs of capital
improvements as provided in this paragraph, Landlord shall be permitted to do
the same with respect to the costs of leasing (rather than purchasing) such
capital item. In no event shall Landlord include in Operating Costs Landlords
cost to build or replace any structural elements of the Project. The useful
life of an earthquake insurance deductible shall be deemed to be ten (10) years
for the purpose of this paragraph. Operating Costs Payment shall have the meaning given to it in Section
6.1 hereof. Other Improvements shall have the meaning given to it in Section 21.15
hereof. Permitted Alterations shall have the meaning given to it in Section 10.1
hereof. Permitted Transfers shall have the meaning given to it in Section 8.4. Plan Deposit shall have the meaning given to it in Section 25.1 hereof. Plans shall have the meaning given to it in Exhibit D hereof. Premises shall have the meaning given to it in the Basic Lease
Information Section hereof. Premises Improvements shall have the meaning given to it in Section
14.1(A) hereof. Prime Rate shall have the meaning given to it in Section 4.2 hereof. Prohibited Companies shall have the meaning given to it Section 29.1
hereof. Project shall have the meaning given to it in the Basic Lease
Information Section hereof. 7




---



##### 



Project Tenants shall have the meaning given to it Section 30.2 hereof. Purchase Contract shall have the meaning given to it Section 24.1
hereof. Renewal Notice shall have the meaning given to it in Section 22.2
hereof. Rent shall have the meaning given to it in the Basic Lease Information
Section hereof. Rentable Area of the Project shall have the meaning given to it in the
Basic Lease Information Section hereof. Rentable Area of the Premises shall have the meaning given to it in the
Basic Lease Information Section hereof. Requirements shall mean all requirements, rules, orders, codes and
regulations of the federal, state and municipal governments or other duly
constituted public authority, and of any board of insurance regulators or
underwriters, health officer, fire marshall, and/or building inspector and the
terms and provisions of any ground lease, mortgage, deed to secure debt and any
other matter of record, in each case affecting or relating to the Project, the
Premises, the business conducted in the Premises or Tenants use of the
Premises. Revised Offer shall have the meaning given to it in Section 24.1. Rules and Regulations shall have the meaning given to it in Section 2.1
hereof. Return Rate shall have the meaning given to it in Section 25.1 hereof. Reserved Spaces shall mean those parking spaces in the area marked on
Exhibit A hereto as Reserved Spaces as such parking spaces may be configured
from time to time. Right of First Offer to Sell shall have the meaning given to it in
Section 24.1 hereof. Satellite Equipment shall have the meaning given to it in Section 30.1
hereof. Second Renewal Period shall have the meaning given to it in Section 22.1
hereof. Second Renewal Period Commencement Date shall have the meaning given to
it in Section 22.1 hereof. Secured Parties shall have the meaning given to it in Section 14.1(B)
hereof. Security Deposit shall have the meaning given to it in the Basic Lease
Information Section hereof. Sign Specifications shall have the meaning given to it in Section 28.2
hereof. Storage Tanks shall have the meaning given to it in Section 9.1 hereof. 8




---



##### 



Taxes shall mean, all taxes, assessments, and other governmental
charges, applicable to or assessed against the Project or any portion thereof,
or applicable to or assessed against Landlords personal property used in
connection therewith, whether federal, state, county, or municipal and whether
assessed by taxing districts or authorities presently taxing the Project or the
operation thereof or by other taxing authorities subsequently created, or
otherwise, and any other taxes and assessments attributable to or assessed
against all or any part of the Project or its operation; including any
reasonable expenses, including fees and disbursements of attorneys, tax
consultants, arbitrators, appraisers, experts and other witnesses, incurred by
Landlord in contesting any taxes or the assessed valuation of all or any part
of the Project. Tenant shall be deemed to include Tenants successors and assigns (to
the extent permitted by Landlord) and any and all occupants of the Premises
permitted by Landlord and claiming by, through or under Tenant. Tenants Address for Notice shall have the meaning given to it in the
Basic Lease Information Section hereof. Tenants Architect shall have the meaning given to it in Exhibit D
hereof. Tenants Contractors shall have the meaning given to it in Exhibit D
hereof. Tenant Credit Adjustment shall have the meaning given to it in Section
25.1 hereof. Tenants Offer shall have the meaning given to it in Section 24.1
hereof. Tenant Parties shall have the meaning given to it in Section 17.1
hereof. Tenants Property shall have the meaning given to it in Section 14.1(A)
hereof. Tenants Permitted Use shall have the meaning given to it in the Basic
Lease Information Section hereof. Tenants Review Notice shall have the meaning given to it in Section 6.4
hereof. Tenants Share shall have the meaning given to it in the Basic Lease
Information Section hereof. Tenants Signage shall have the meaning given to it in Section 28.1
hereof. Term shall have the meaning given to it in the Basic Lease Information
Section hereof. The terms of this Lease shall be deemed to include all terms, covenants,
conditions, provisions, obligations, limitations, restrictions, reservations
and agreements contained in this Lease. Transfer shall have the meaning given to it in Section 8.1 hereof. Transferee shall have the meaning given to it in Section 8.3 hereof. Underground Parking Area shall have the meaning given to it in the Basic
Lease Information Section hereof. Warranty Date shall have the meaning given to it in Section 9.3 hereof. A year shall mean a calendar year. 9