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Exhibit 10.4    
    


OFFICE LEASE

  

601 GATEWAY BOULEVARD

  

GATEWAY CENTER, LLC,

a California limited liability company

   

as Landlord,

   

and

   

CABER CORPORATION,

a Delaware corporation

   

as Tenant.  





 
TABLE OF CONTENTS  



	 
	 	 
	 	PAGE

	ARTICLE 1	 	PREMISES, BUILDING, PROJECT, AND COMMON AREAS	 	3
	ARTICLE 2	 	LEASE TERM	 	4
	ARTICLE 3	 	BASE RENT	 	4
	ARTICLE 4	 	ADDITIONAL RENT	 	5
	ARTICLE 5	 	USE OF PREMISES	 	11
	ARTICLE 6	 	SERVICES AND UTILITIES	 	12
	ARTICLE 7	 	REPAIRS	 	13
	ARTICLE 8	 	ADDITIONS AND ALTERATIONS	 	14
	ARTICLE 9	 	COVENANT AGAINST LIENS	 	17
	ARTICLE 10	 	INSURANCE	 	18
	ARTICLE 11	 	DAMAGE AND DESTRUCTION	 	20
	ARTICLE 12	 	NONWAIVER	 	22
	ARTICLE 13	 	CONDEMNATION	 	22
	ARTICLE 14	 	ASSIGNMENT AND SUBLETTING	 	23
	ARTICLE 15	 	SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES	 	27
	ARTICLE 16	 	HOLDING OVER	 	28
	ARTICLE 17	 	ESTOPPEL CERTIFICATES	 	28
	ARTICLE 18	 	MORTGAGE OR GROUND LEASE	 	29
	ARTICLE 19	 	DEFAULTS; REMEDIES	 	30
	ARTICLE 20	 	COVENANT OF QUIET ENJOYMENT	 	32
	ARTICLE 21	 	SECURITY DEPOSIT—LETTER OF CREDIT	 	32
	ARTICLE 22	 	INTENTIONALLY DELETED	 	34
	ARTICLE 23	 	SIGNS	 	34
	ARTICLE 24	 	COMPLIANCE WITH LAW	 	35
	ARTICLE 25	 	LATE CHARGES	 	35
	ARTICLE 26	 	LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT	 	36
	ARTICLE 27	 	ENTRY BY LANDLORD	 	36
	ARTICLE 28	 	NOTICES	 	37
	ARTICLE 29	 	MISCELLANEOUS PROVISIONS	 	37




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   601 GATEWAY BOULEVARD  


OFFICE LEASE  


        This Office Lease (the "Lease"), dated as of the date set forth in Section 1 of the Summary of Basic Lease
Information (the "Summary"), below, is made by and between GATEWAY CENTER, LLC, a California limited liability company ("Landlord"), and CABER
CORPORATION, a Delaware corporation ("Tenant"). 


SUMMARY OF BASIC LEASE INFORMATION  



	TERMS OF LEASE
 
	 	DESCRIPTION

	1.	 	Date:	 	March 16, 2000.
	

2.	
 	

Premises(Article 1).	
 	

 
	

 	
 	

2.1	
 	

Building:	
 	

601 Gateway Boulevard
	

 	
 	

2.2	
 	

Premises:	
 	

Three thousand sixty (3,060) rentable square feet of space located on the fourth (4th) floor of the Building and commonly known as Suite 460, as further set forth in Exhibit A to the Office Lease.
	

3.	
 	

Lease Term(Article 2).	
 	

 
	

 	
 	

3.1	
 	

Length of Term:	
 	

Five (5) years.
	

 	
 	

3.2	
 	

Lease Commencement Date:	
 	

The later to occur of (i) April 1, 2000; and (ii) the date Landlord delivers the Premises to Tenant.
	

 	
 	

3.3	
 	

Lease Expiration Date:	
 	

March 31, 2005.
	

4.	
 	

Base Rent (Article 3):	
 	

 





	Period During Lease Term
	 	Annual Base Rent
	 	Monthly Installment of Base Rent
	 	Annual Base Rental Rate Per Rentable Square Foot

	1	 	$146,880.00	 	$12,240.00	 	$48.00
	2	 	$152,755.20	 	$12,729.60	 	$49.92
	3	 	$158,975.20	 	$13,239.60	 	$51.92
	4	 	$165,209.40	 	$13,767.45	 	$53.99
	5	 	$171,819.00	 	$14,318.25	 	$56.15






	5.	 	Base Year (Article 4):	 	Calendar year 2000.
	

6.	
 	

Tenant's Share (Article 4):	
 	

Approximately 1.42%.
	

7.	
 	

Permitted Use (Article 5):	
 	

General, office use.
	

8.	
 	

Security Deposit (Article 21):	
 	

$14,318.25.
	

 	
 	

Letter of Credit (Article 2 1):	
 	

$157,500.75.
	 	 	 	 	 	 	 





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9.	
 	

Address of Tenant (Article 28):	
 	

Caber Corporation

Occidental Avenue

San Mateo, California 94402

Attention: Mr. John McLaughlin

(Prior to Lease Commencement Date)

  

and

 

601 Gateway Boulevard

Suite 460

South San Francisco, California 94080

Attention: Mr. John McLaughlin

(After Lease Commencement Date)
	

10.	
 	

Address of Landlord (Article 28):	
 	

See Article 28 of the Lease.
	

11.	
 	

Broker(s) (Section 29.24):	
 	

CB Richard Ellis, Inc.

9050 Tower Lane, Suite 870

Foster City, California 94404

Attention: Mr. Timothy E. Grant

 

and

 

BT Commercial Real Estate

1350 Bayshore Highway

Burlingame, California 94010-1808

Attention: Mr. W. Clarke Funkhouser
	

12.	
 	

Guarantor (Section 29.34):	
 	

None.
	

13.	
 	

Tenant Improvement Allowance (Exhibit b):	
 	

$6.00 per rentable square foot.




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ARTICLE 1

   
  PREMISES, BUILDING, PROJECT, AND COMMON AREAS  


        1.1    Premises, Building, Project and Common Areas.    



        1.1.1    The Premises.    Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the premises set
forth in Section 2.2 of the Summary (the "Premises"). The outline of the Premises is set forth in Exhibit A attached hereto and each floor or floors of the Premises has the number of
rentable square feet as set forth in Section 2.2 of the Summary. The parties hereto agree that the lease of the Premises is upon and subject to the terms, covenants and conditions herein set
forth, and Tenant covenants as a material part of the consideration for this Lease to keep and perform each and all of such terms, covenants and conditions by it to be kept and performed and that this
Lease is made upon the condition of such performance. The parties hereto hereby acknowledge that the purpose of
Exhibit A is to show the approximate location of the Premises in the "Building," as that term is defined in Section 1.1.2, below, only, and such Exhibit is not meant to constitute an
agreement, representation or warranty as to the construction of the Premises, the precise area thereof or the specific location of the "Common Areas," as that term is defined in Section 1.1.3,
below, or the elements thereof or of the accessways to the Premises or the "Project," as that term is defined in Section 1.1.2, below. Except as specifically set forth in this Lease and in the
Tenant Work Letter attached hereto as Exhibit B (the "Tenant Work Letter"), Landlord shall not be obligated to provide or pay for any improvement work or services related to the improvement of
the Premises. Tenant also acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty regarding the condition of the Premises, the Building or the Project or
with respect to the suitability of any of the foregoing for the conduct of Tenant's business, except as specifically set forth in this Lease and the Tenant Work Letter. The taking of possession of the
Premises by Tenant shall conclusively establish that the Premises and the Building were at such time in good and sanitary order, condition and repair. 


        1.1.2    The Building and The Project.    The Premises are a part of the building set forth in Section 2.1 of
the Summary (the "Building"). The Building is part of an office project known as "Gateway Center." The term "Project," as used in this Lease, shall mean (i) the Building and the Common Areas,
(ii) the land (which is improved with landscaping, subterranean parking facilities and other improvements) upon which the Building and the Common Areas are located, (iii) those certain
other office buildings located in the vicinity of the Building and known as 651 Gateway Boulevard, respectively, and the land upon which such office buildings are located, and (iv) at
Landlord's discretion, any additional real property, areas, land, buildings or other improvements added thereto outside of the Project. 


        1.1.3    Common Areas.    Tenant shall have the non-exclusive right to use in common with other tenants in
the Project, and subject to the rules and regulations referred to in Article 5 of this Lease, those portions of the Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such other portions of the Project designated by Landlord, in its discretion, including certain areas designated for the
exclusive use of certain tenants, or to be shared by Landlord and certain tenants, are collectively referred to herein as the "Common Areas"). The Common Areas shall consist of the "Project Common
Areas" and the "Building Common Areas." The term "Project Common Areas," as used in this Lease, shall mean the portion of the Project designated as such by Landlord, which Project Common Areas may
include, from time to time, in Landlord's sole discretion, a conference center and other amenities. The term "Building Common Areas," as used in this Lease, shall mean the portions of the Common Areas
located within the Building designated as such by Landlord. The manner in which the Common Areas are maintained and operated shall be at the sole discretion of Landlord and the use thereof shall be
subject to such rules, regulations and restrictions as Landlord may make from time to time. Landlord reserves the 



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right
to close temporarily, make alterations or additions to, or change the location of elements of the Project and the Common Areas; provided that Landlord shall use commercially reasonable efforts
to minimize interference with Tenant's use of, and access to, the Premises. 




        1.2    Verification of Rentable Square Feet of Premises and Building.    For purposes of this Lease, "rentable square
feet" in the Premises and the Building, as the case may be, shall be calculated pursuant to Landlord's then current method for measuring rentable square footage. Landlord and Tenant hereby stipulate
and agree that the rentable area of the Premises is as set forth in Section 2.2 of the Summary. Notwithstanding the foregoing, if Landlord, at its option, re-measures the Premises
in connection with a re-measurement of the Building to determine the exact amount of rentable area contained therein pursuant to Landlord's then current method for measuring rentable
square footage, or if the rentable area of the Premises and/or the Building shall hereafter change due to subsequent alterations and/or other modifications to the Premises and/or the Building, then
the rentable area of the Premises and/or the Building, as the case may be, shall be appropriately adjusted as of the date of such re-measurement or such alteration and/or other
modification, based upon the written verification by Landlord's space planner of such revised rentable area. In the event of any such adjustment to the rentable area of the Premises and/or the
Building, all amounts, percentages and figures appearing or referred to in this Lease based upon such rentable area (including, without limitation, the amounts of the "Rent" and the "Security
Deposit," as those terms are defined in Article 4 and Article 21 of this Lease, respectively, and "Tenant's Share," as that term is defined in Section 4.2.9 of this Lease) shall
be modified in accordance with such determination; provided, however, if any such adjustment to the rentable area of the Premises and/or the Building results from a re-measurement thereof
conducted at Landlord's option, then, notwithstanding anything to the contrary contained in this Section 1.2, "Base Rent," as defined in Article 3 of this Lease, shall not be modified in
accordance with such determination. 


ARTICLE 2

   
  LEASE TERM  


        The terms and provisions of this Lease shall be effective as of the date of this Lease. The term of this Lease (the "Lease Term") shall be as set forth in
Section 3.1 of the Summary, shall commence on the date set forth in Section 3.2 of the Summary (the "Lease Commencement Date"), and shall terminate on the date set forth in
Section 3.3 of the Summary (the "Lease Expiration Date") unless this Lease is sooner terminated as hereinafter provided. For purposes of this Lease, the term "Lease Year" shall mean each
consecutive twelve (12) month period during the Lease Term. At any time during the Lease Term, Landlord may deliver to Tenant a notice in the form as set forth in Exhibit C, attached
hereto, as a confirmation only of the information set forth therein, which Tenant shall execute and return to Landlord within five (5) days of receipt thereof, provided, however, Tenant's
failure to execute and return such notice to Landlord within such time shall be conclusive upon Tenant that the information set forth in such notice is as specified therein. 


ARTICLE 3

   
  BASE RENT  


        3.1.1    Tenant
shall pay, without prior notice or demand, to Boston Properties Bank of America, c/o Gateway Center, File No. 73807, P.O. Box 60000, San
Francisco, California 94160-3669, or, at Landlord's option, to such other party or at such other place as Landlord may from time to time designate in writing, by a check for currency
which, at the time of payment, is legal tender for private or public debts in the United States of America, base rent ("Base Rent") as set forth in Section 4 of the Summary, payable in equal
monthly installments as set forth in Section 4 of the Summary in advance on or before the first day of each and every calendar month during the Lease Term, without any setoff or deduction
whatsoever. The Base Rent for the first full month of the Lease Term shall be 


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paid
at the time of Tenant's execution of this Lease. If any Rent payment date (including the Lease Commencement Date) falls on a day of the month other than the first day of such month or if any
payment of Rent is for a period which is shorter than one month, the Rent for any fractional month shall accrue on a daily basis for the period from the date such payment is due to the end of such
calendar month or to the end of the Lease Term at a rate per day which is equal to 1/365 of the applicable annual Rent. All other payments or adjustments required to be made under the terms of this
Lease that require proration on a time basis shall be prorated on the same basis. 


ARTICLE 4

   
  ADDITIONAL RENT  



        4.1    General Terms.    In addition to paying the Base Rent specified in Article 3 of this Lease, Tenant shall
pay "Tenant's Share" of the annual "Building Direct Expenses," as those terms are defined in Sections 4.2.9 and 4.2.2 of this Lease, respectively, which are in excess of the amount of Building Direct
Expenses applicable to the "Base Year," as that term is defined in Section 4.2.1, below; provided, however, that in no event shall any decrease in Building Direct Expenses for any "Expense
Year," as that term is defined in Section 4.2.6 below, below Building Direct Expenses for the Base Year entitle Tenant to any decrease in Base Rent or any credit against sums due under this
Lease. Such payments by Tenant, together with any and all other amounts payable by Tenant to Landlord pursuant to the terms of this Lease, are hereinafter collectively referred to as the "Additional
Rent", and the Base Rent and the Additional Rent are herein collectively referred to as "Rent." All amounts due under this Article 4 as Additional Rent shall be payable for the same periods and
in the same manner as the Base Rent. Without limitation on other obligations of Tenant which survive the expiration of the Lease Term, the obligations of Tenant to pay the Additional Rent provided for
in this Article 4 shall survive the expiration of the Lease Term. 



        4.2    Definitions of Key Terms Relating to Additional Rent.    As used in this Article 4, the following terms
shall have the meanings hereinafter set forth: 



        4.2.1    "Base Year"    shall mean the period set forth in Section 5 of the Summary. 


        4.2.2    "Building Direct Expenses"    shall mean "Building Operating Expenses" and "Building Tax Expenses", as those
terms are defined in Sections 4.2.3 and 4.2.4, below, respectively. 


        4.2.3    "Building Operating Expenses"    shall mean the portion of "Operating Expenses," as that term is defined in
Section 4.2.7 below, allocated to the tenants of the Building pursuant to the terms of Section 4.3.1 below. 


        4.2.4    "Building Tax Expenses"    shall mean that portion of "Tax Expenses," as that term is defined in
Section 4.2.8 below, allocated to the tenants of the Building pursuant to the terms of Section 4.3.1 below. 


        4.2.5    "Direct Expenses"    shall mean "Operating Expenses" and "Tax Expenses." 


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


        4.2.7    "Operating Expenses"    shall mean all expenses, costs and amounts of every kind and nature which Landlord
pays or accrues during any Expense Year because of or in connection with the ownership, management, maintenance, security, repair, replacement, restoration or operation of the Project, or any portion
thereof. Without limiting the generality of the foregoing, Operating 



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Expenses
shall specifically include any and all of the following: (i) the cost of supplying all utilities, the cost of operating, maintaining, repairing, replacing, renovating and managing the
utility systems, mechanical systems, sanitary, storm drainage systems, communication systems and escalator and elevator systems, and the cost of supplies, tools, and equipment and maintenance and
service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections and the cost of contesting any governmental enactments which may affect Operating
Expenses, and the costs incurred in connection with a transportation system management program or similar program; (iii) the cost of all insurance carried by Landlord in connection with the
Project as reasonably determined by Landlord (including, without limitation, commercial general liability insurance, physical damage insurance covering damage or other loss caused by fire, earthquake,
flood and other water damage, explosion, vandalism and malicious mischief, theft or other casualty, rental interruption insurance and such insurance as may be required by any lessor under any present
or future ground or underlying lease of the Building or Project or any holder of a mortgage, trust deed or other encumbrance now or hereafter in force against the Building or Project or any portion
thereof); (iv) the cost of landscaping, decorative lighting, relamping, fountains, sculptures, bridges and all supplies, tools, equipment and materials used in the operation, repair and
maintenance of the Project, or any portion thereof; (v) the cost of parking area repair, restoration, and maintenance, including, without limitation, resurfacing, repainting, restriping and
cleaning; (vi) fees, charges and other costs, including management fees (or amounts in lieu thereof), consulting fees (including, without limitation, any consulting fees incurred in connection
with the procurement of insurance), legal fees and accounting fees, of all contractors, engineers, consultants and all other persons engaged by Landlord or otherwise incurred by or charged by Landlord
in connection with the management, operation, administration, maintenance and repair of the Building and the Project; (vii) payments under any equipment rental agreements or management
agreements (including the cost of any actual or charged management fee and the actual or charged rental of any management office space); (viii) wages, salaries and other compensation and
benefits, including taxes levied thereon, of all persons engaged in the operation, maintenance and security of the Project; (ix) costs under any instrument pertaining to the sharing of costs by
the Project; (x) operation, repair, maintenance and replacement of all systems and equipment and components thereof of the Project; (xi) the cost of janitorial, alarm, security and other
services, replacement of wall and floor coverings, ceiling tiles and fixtures in common areas, maintenance and replacement of curbs and walkways, repair to roofs and re roofing;
(xii) amortization (including interest on the unamortized cost) of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project,
or any portion thereof, (xiii) the cost of capital improvements or other costs incurred in connection with the Project (A) which are intended to effect economies in the operation,
cleaning or maintenance of the Project, or any portion thereof, (B) that are required to comply with present or anticipated conservation programs, (C) which are replacements or
modifications of nonstructural items located in the Common Areas required to keep the Common Areas in good order or condition, or (D) that are required under any governmental law or regulation;
provided, however, that any capital expenditure shall be amortized (including interest on the amortized cost) over its useful life as Landlord shall reasonably determine; (xiv) costs, fees,
charges or assessments imposed by, or resulting from any mandate imposed on Landlord by, any federal, state or local government for fire and police protection, trash removal, community services, or
other services which do not constitute "Tax Expenses" as that term is defined in Section 4.2.8, below; (xv) advertising, marketing and promotional expenditures incurred in connection
with the Project, including, without limitation, costs of signs in, on or about the Project identifying or promoting the Project; and (xvi) payments under any easement,
license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by the Project or related to the use or operation of the Project. 



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        Notwithstanding
the foregoing, Operating Expenses for purposes of this Lease shall not include (A) costs of leasing commissions, attorneys' fees and other costs and expenses
incurred in connection with negotiations or disputes with present or prospective tenants or other occupants of the Building; (B) costs (including permit, license and inspection costs) incurred
in renovating or otherwise improving, decorating or redecorating rentable space for other tenants or vacant rentable space; (C) except as otherwise specifically provided in this
Section 4.2.7, costs incurred by Landlord for capital repairs, improvements, equipment and alterations to the Building which are considered capital improvements and replacements under generally
accepted accounting principles, consistently applied; (D) costs of services or other benefits which are either not offered to Tenant or for which Tenant is charged directly, but which are
provided to other tenants of the Building without a separate charge; and (E) costs incurred to comply with laws relating to "Hazardous Substance," as that term is defined in Section 5.2,
below, which was in existence in the Building or the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it had then
had knowledge of the presence of such Hazardous Substance, in the state, and under the conditions that it then existed in the Building or the Project, would have then required the removal of such
Hazardous Substance or other remedial or containment action with respect thereto; and costs incurred to remove, remedy, contain, or treat Hazardous Substance, which Hazardous Substance is brought into
the Building or the Project after the date hereof by Landlord or any other tenant of the Building and is of such a nature, at that time, that a federal, State or municipal governmental authority, if
it had then had knowledge of the presence of such Hazardous Substance, in the state, and under the conditions, that it then existed in the Building or the Project, would have then required the removal
of such Hazardous Substance or other remedial or containment action with respect thereto. 


        If
Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to
perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least one hundred percent (100%)
occupied during all or a portion of the Base Year or any Expense Year, Landlord may elect to make an appropriate adjustment to the components of Operating Expenses for such year to determine the
amount of Operating Expenses that would have been incurred had the Project been one hundred percent (100%) occupied; and the amount so determined shall be deemed to have been the amount of Operating
Expenses for such year. Operating Expenses for the Base Year shall not include market-wide labor-rate increases due to extraordinary circumstances, including, but not limited
to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages, or amortized
costs relating to capital improvements. In no event shall the components of Direct Expenses for any Expense Year related to electrical costs be less than the components of Direct Expenses related to
electrical costs in the Base Year. 


        4.2.8    Taxes.    



   4.2.8.1    "Tax
Expenses" shall mean all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and
nature, whether general, special, ordinary or extraordinary (including, without limitation, real estate taxes, general and special assessments, transit taxes, business taxes, leasehold taxes or taxes
based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required to be paid by Tenant, personal property taxes imposed upon the fixtures,
machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Project, or any portion thereof), which shall be paid or 




7





 


accrued
during any Expense Year (without regard to any different fiscal year used by such governmental or municipal authority) because of or in connection with the ownership, leasing and operation of
the Project, or any portion thereof. 


   4.2.8.2    Tax
Expenses shall include, without limitation: (i) Any tax on the rent, right to rent or other income from the Project, or any portion thereof,
or as against the business of leasing the Project, or any portion thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any
assessment, tax, fee, levy or charge previously included within the definition of real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the
State of California in the June 1978 election ("Proposition 13") and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire
protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants, and, in further recognition of
the decrease in the level and quality of governmental services and amenities as a result of Proposition 13, Tax Expenses shall also include any governmental or private assessments or the Project's
contribution towards a governmental or private cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided by governmental
agencies; (iii) Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the Premises, the tenant improvements in the Premises, or the Rent payable hereunder,
including, without limitation, any business or gross income tax or excise tax with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof, (iv) Any assessment, tax, fee, levy or charge, upon this transaction or any document to
which Tenant is a party, creating or transferring an interest or an estate in the Premises; and (v) All of the real estate taxes and assessments imposed upon or with respect to the Building and
all of the real estate taxes and assessments imposed on the land and improvements comprising the Project. 


   4.2.8.3    If
Tax Expenses for any period during the Lease Term or any extension thereof are increased after payment thereof for any reason, including, without
limitation, error or reassessment by applicable governmental or municipal authorities, Tenant shall pay Landlord upon demand Tenant's Share of any such increased Tax Expenses included by Landlord as
Building Tax Expenses pursuant to the terms of this Lease. Notwithstanding anything to the contrary contained in this Section 4.2.8 (except as set forth
in Section 4.2.8.1, above), there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes,
estate taxes, federal and state income taxes, and other taxes to the extent applicable to Landlord's general or net income (as opposed to rents, receipts or income attributable to operations at the
Project), (ii) any items included as Operating Expenses, and (iii) any items paid by Tenant under Section 4.5 of this Lease. 


   4.2.8.4    Notwithstanding
anything to the contrary set forth in this Lease, the amount of Tax Expenses for the Base Year and any Expense Year shall be calculated
without taking into account any decreases in real estate taxes obtained in connection with Proposition 8, and, therefore, the Tax Expenses in the Base Year and/or an Expense Year may be greater than
those actually incurred by Landlord, but shall, nonetheless, be the Tax Expenses due under this Lease; provided that (i) any costs and expenses incurred by Landlord in securing any Proposition
8 reduction shall not be deducted from Tax Expenses nor included in Direct Expenses for purposes of this Lease, and (ii) tax refunds under Proposition 8 shall not be deducted from Tax Expenses
nor refunded to Tenant, but rather shall be the sole property of Landlord. Landlord and Tenant acknowledge that the preceding sentence is not intended to in 




8





 





any
way affect (A) the inclusion in Tax Expenses of the statutory two percent (2.0%) annual increase in Tax Expenses (as such statutory increase may be modified by subsequent legislation), or
(B) the inclusion or exclusion of Tax Expenses pursuant to the terms of Proposition 13. Notwithstanding the foregoing, upon a reassessment of the Building and/or the Project pursuant to the
terms of Proposition 13 (a "Reassessment") occurring after the Base Year which results in a decrease in Tax Expenses, the component of Tax Expenses for the Base Year which is attributable to the
assessed value of the Building and/or the Project under Proposition 13 prior to the Reassessment (without taking into account any Proposition 8 reductions) (the "Base Year Prop 13 Taxes") shall be
reduced, if at all, for the purposes of comparison to all subsequent Expense Years (commencing with the Expense Year in which the Reassessment takes place) to an amount equal to the real estate taxes
based upon such Reassessment, and if thereafter, in connection with a subsequent Reassessment, the assessed value of the Building and/or the Project under Proposition 13 shall increase, the current
Base Year Prop 13 Taxes shall be increased for purposes of comparison to all subsequent Expense Years (commencing with the Expense Year in which the Reassessment takes place) to an amount equal to the
lesser of the original Base Year Prop 13 Taxes and an amount equal to the real estate taxes based upon such Reassessment. 



      4.2.9    "Tenant's
Share" shall mean the percentage set forth in Section 6 of the Summary. Tenant's Share was calculated by multiplying the number of
rentable square feet of the Premises, as set forth in Section 2.2 of the Summary, by 100, and dividing the product by the total number of rentable square feet in the Building. If Tenant's Share
shall be adjusted in accordance with Section 1.2, above, at any time after the Base Year, then, as to the Expense Year in which such change occurs, Tenant's Share for such Expense Year shall be
determined on the basis of the number of days during such Expense Year that each such Tenant's Share was in effect. 





        4.3    Allocation of Direct Expenses.    



        4.3.1    Method of Allocation.    The parties acknowledge that the Building is a part of a multi-building project and
that the costs and expenses incurred in connection with the Project (i.e., the Direct Expenses) should be shared between the tenants of the Building and the tenants of the other buildings in the
Project. Accordingly, as set forth in Section 4.2 above, Direct Expenses (which consists of Operating Expenses and Tax Expenses) are determined annually for the Project as a whole, and a
portion of the Direct Expenses, which portion shall be determined by Landlord on an equitable basis, shall be allocated to the tenants of the Building (as opposed to the tenants of any other buildings
in the Project) and such portion shall be the Building Direct Expenses for purposes of this Lease. Such portion of Direct Expenses allocated to the tenants of the Building shall include all Direct
Expenses attributable solely to the Building and an equitable portion of the Direct Expenses attributable to the Project as a whole. 


        4.3.2    Cost Pools.    Landlord shall have the right, from time to time, to equitably allocate some or all of the
Direct Expenses for the Project among different portions or occupants of the Project (the "Cost Pools"), in Landlord's discretion. Such Cost Pools may include, but shall not be limited to, the office
space tenants of a building of the Project or of the Project, and the retail space tenants of a building of the Project or of the Project. The Direct Expenses allocable to each such Cost Pool shall be
allocated to such Cost Pool and charged to the tenants within such Cost Pool in an equitable manner. 




        4.4    Calculation and Payment of Additional Rent.    If for any Expense Year ending or commencing within the Lease
Term, Tenant's Share of Building Direct Expenses for such Expense Year exceeds Tenant's Share of Building Direct Expenses applicable to the Base Year, then Tenant shall pay to 


9





 

Landlord,
in the manner set forth in Section 4.4.1, below, and as Additional Rent, an amount equal to the excess (the "Excess"). 



        4.4.1    Statement of Actual Building Direct Expenses and Payment by Tenant.    Landlord shall endeavor to give to
Tenant following the end of each Expense Year, a statement (the "Statement") which shall state the Building Direct Expenses incurred or accrued for such preceding Expense Year, and which shall
indicate the amount of the Excess. Upon receipt of the Statement for each Expense Year commencing or ending during the Lease Term, if an Excess is present, Tenant shall pay, with its next installment
of Base Rent due or within thirty (30) days, whichever is earlier, the full amount of the Excess for such Expense Year, less the amounts, if any, paid during such Expense Year as "Estimated
Excess," as that term is defined in Section 4.4.2, below. If the amounts paid by Tenant during an Expense Year as Estimated Excess exceed the Excess for such Expense Year, then such difference
shall be reimbursed by Landlord to Tenant, provided that any such reimbursement, at Landlord's option, may be credited against the Additional Rent next coming due under this Lease unless the Lease
Term has expired, in which event Landlord shall refund the appropriate amount to Tenant. The failure of Landlord to timely furnish the Statement for any Expense Year shall not prejudice Landlord or
Tenant from enforcing its rights under this Article 4. Even though the Lease Term has expired and Tenant has vacated the Premises, when the final determination is made of Tenant's Share of
Building Direct Expenses for the Expense Year in which this Lease terminates, if an Excess is present, Tenant shall immediately pay to
Landlord such amount. The provisions of this Section 4.4.1 shall survive the expiration or earlier termination of the Lease Term. 


        4.4.2    Statement of Estimated Building Direct Expenses.    In addition, Landlord shall endeavor to give Tenant a
yearly expense estimate statement (the "Estimate Statement") which shall set forth Landlord's reasonable estimate (the "Estimate") of what the total amount of Building Direct Expenses for the
then-current Expense Year shall be and the estimated excess (the "Estimated Excess") as calculated by comparing the Building Direct Expenses for such Expense Year, which shall be based
upon the Estimate, to the amount of Building Direct Expenses for the Base Year. The failure of Landlord to timely furnish the Estimate Statement for any Expense Year shall not preclude Landlord from
enforcing its rights to collect any Estimated Excess under this Article 4, nor shall Landlord be prohibited from revising any Estimate Statement or Estimated Excess theretofore delivered to the
extent necessary. Thereafter, Tenant shall pay, with its next installment of Base Rent due, a fraction of the Estimated Excess for the then-current Expense Year (reduced by any amounts
paid pursuant to the last sentence of this Section 4.4.2). Such fraction shall have as its numerator the number of months which have elapsed in such current Expense Year, including the month of
such payment, and twelve (12) as its denominator. Until a new Estimate Statement is furnished (which Landlord shall have the right to deliver to Tenant at any time), Tenant shall pay monthly,
with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated Excess set forth in the previous Estimate Statement delivered by
Landlord to Tenant. 




        4.5    Taxes and Other Charges for Which Tenant Is Directly Responsible.    



        4.5.1    Tenant
shall be liable for and shall pay thirty (30) days before delinquency, taxes levied against Tenant's equipment, furniture, fixtures and any other
personal property located in or about the Premises. If any such taxes on Tenant's equipment, furniture, fixtures and any other personal property are levied against Landlord or Landlord's property or
if the assessed value of Landlord's property is increased by the inclusion therein of a value placed upon such equipment, furniture, fixtures or any other personal property and if Landlord pays the
taxes based upon such increased assessment, which Landlord shall have the right to do regardless of the validity thereof but only under proper protest if requested by Tenant, Tenant shall upon demand
repay to Landlord the 



10





 

taxes
so levied against Landlord or the proportion of such taxes resulting from such increase in the assessment, as the case may be. 


        4.5.2    If
the tenant improvements in the Premises, whether installed and/or paid for by Landlord or Tenant and whether or not affixed to the real property so as to become a
part thereof, are assessed for real property tax purposes at a valuation higher than the valuation at which tenant improvements conforming to Landlord's "building standard" in other space in the
Building are assessed, then the Tax Expenses levied against Landlord or the property by reason of such excess assessed valuation shall be deemed to be taxes levied against personal property of Tenant
and shall be governed by the provisions of Section 4.5.1, above. 


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



ARTICLE 5

   
  USE OF PREMISES  


        5.1    Permitted Use.    Tenant shall use the Premises solely for the Permitted Use set forth in Section 7 of
the Summary and Tenant shall not use or permit the Premises or the Project to be used for any other purpose or purposes whatsoever without the prior written consent of Landlord, which may be withheld
in Landlord's sole discretion. 


        5.2    Prohibited Uses.    Tenant further covenants and agrees that Tenant shall not use, or suffer or permit any
person or persons to use, the Premises or any part thereof for any use or purpose contrary to the provisions of the Rules and Regulations set forth in Exhibit D, attached hereto, or in
violation of the laws of the United States of America, the State of California, or the ordinances, regulations or requirements of the local municipal or county governing body or other lawful
authorities having jurisdiction over the Project, including, without limitation, any such laws, ordinances, regulations or requirements relating to hazardous materials or substances, as those terms
are defined by applicable laws now or hereafter in effect. Tenant shall not do or permit anything to be done in or about the Premises which will in any way damage the reputation of the Project or
obstruct or interfere with the rights of other tenants or occupants of the Building, or injure or annoy them or use or allow the Premises to be used for any improper, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall comply with, and Tenant's rights and obligations under the Lease and Tenant's use of the
Premises shall be subject and subordinate to, all recorded easements, covenants, conditions, and restrictions now or hereafter affecting the Project. Tenant shall not cause or permit any "Hazardous
Substance," as that term is defined below, to be kept, maintained, used, stored, produced, generated or disposed of (into the sewage or waste disposal system or otherwise) on or in the Premises by
Tenant or Tenant's agents, employees, contractors, invitees, assignees or sublessees, without first obtaining Landlord's written consent. Tenant shall immediately notify, and shall direct Tenant's
agents, employees contractors, invitees, assignees and sublessees to immediately notify, Landlord of any incident in, on or about the Premises, the Building or the Project that would require the
filing of a notice under any federal, state, local or quasi-governmental law (whether under common law, statute or otherwise), ordinance, decree, code, ruling, award, rule, regulation or guidance
document now or hereafter enacted or promulgated, as amended from time to time, in any way relating to or regulating any Hazardous Substance. As used herein, "Hazardous Substance" means any substance
which is toxic, ignitable, reactive, or corrosive and which is regulated by any local government, the State of California, or the United States government. 


11





 



"Hazardous
Substance" includes any and all material or substances which are defined as "hazardous waste," "extremely hazardous waste" or a "hazardous substance" pursuant to state, federal or local
governmental law. "Hazardous Substance" also includes asbestos, polychlorobiphenyls (i.e., PCB's) and petroleum. Landlord acknowledges, however, that Tenant will maintain products in the Premises
which are incidental to the operation of its offices, such as photocopy supplies, secretarial supplies and limited janitorial supplies, which products contain chemicals which are categorized as
Hazardous Substances. Landlord agrees that the use of such products in the Premises in compliance with all applicable laws and in the manner in which such products are designed to be used shall not be
a violation by Tenant of this Section 5.2. 


ARTICLE 6

   
  SERVICES AND UTILITIES  


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



        6.1.1    Subject
to limitations imposed by all governmental rules, regulations and guidelines applicable thereto, Landlord shall provide heating, ventilation and air
conditioning ("HVAC") when necessary for normal comfort for normal office use in the Premises from 7:00 A.M. to 6:00 P.M. Monday through Friday, and on Saturdays from 8:00 A.M. to
1:00 P.M. (collectively, the "Building Hours"), except for the date of observation of New Year's Day, Independence Day, Labor Day, Memorial Day, Thanksgiving Day, Christmas Day and, at
Landlord's discretion, other locally or nationally recognized holidays (collectively, the "Holidays"). Tenant shall cooperate fully with Landlord at all times and abide by all regulations and
requirements that Landlord may reasonably prescribe for the proper functioning and protection of the HVAC, electrical, mechanical and plumbing systems. 


        6.1.2    Landlord
shall provide electricity to the Premises (including adequate electrical wiring and facilities for connection to Tenant's lighting fixtures and incidental use
equipment) for lighting and power suitable for the Permitted Use as determined by Landlord, provided that Tenant's electrical usage shall be subject to applicable laws and regulations. Tenant shall
bear the cost of replacement of lamps, starters and ballasts for non-Building standard lighting fixtures within the Premises. 



        6.1.3    Landlord
shall provide city water from the regular Building outlets for drinking, lavatory and toilet purposes in the Building Common Areas. 


        6.1.4    Landlord
shall provide nonexclusive, non-attended automatic passenger elevator service during the Building Hours, shall have one elevator available at all
other times, including on the Holidays, except in the event of emergency, and shall provide nonexclusive, non-attended automatic passenger escalator service during Building Hours only. 


        6.1.5    Landlord
shall provide nonexclusive freight elevator service subject to scheduling by Landlord. 



        6.1.6    Landlord
shall provide customary weekday janitorial services to the Premises, except the date of observation of the Holidays, in and about the Premises and customary
occasional window washing services, each in a manner consistent with other Class "A" office buildings located in the vicinity of the Project. 




        6.2    Overstandard Tenant Use.    Tenant shall not, without Landlord's prior written consent, use
heat-generating machines, machines other than normal fractional horsepower office machines, or equipment or lighting other than Building standard lights in the Premises, which may affect
the temperature otherwise maintained by the air conditioning system or increase the water normally furnished for the Premises by Landlord pursuant to the terms of Section 6.1 of this Lease. If
Tenant 


12





 

uses
water, electricity, heat or air conditioning in excess of that supplied by Landlord pursuant to Section 6.1 of this Lease, Tenant shall pay to Landlord, upon billing, the cost of such
excess consumption, the cost of the installation, operation, and maintenance of equipment which is installed in order to supply such excess consumption, and the cost of the increased wear and tear on
existing equipment caused by such excess consumption; and Landlord may install devices to separately meter any increased use and in such event Tenant shall pay the increased cost directly to Landlord,
on demand, at the rates charged by the public utility company furnishing the same, including the cost of such additional metering devices. Tenant's use of electricity shall never exceed the capacity
of the feeders to the Project or the risers or wiring installation, and subject to the terms of Section 29.32, below, Tenant shall not install or use or permit the installation or use of any
computer or electronic data processing equipment in the Premises, without the prior written consent of Landlord. If Tenant desires to use heat, ventilation or air conditioning during hours other than
those for which Landlord is obligated to supply such utilities pursuant to the terms of Section 6.1 of this Lease, Tenant shall give Landlord such prior notice, if any, as Landlord shall from
time to time establish as appropriate, of Tenant's desired use in order to supply such utilities, and Landlord shall supply such utilities to Tenant at such hourly cost to Tenant (which shall be
treated as Additional Rent) as Landlord shall from time to time establish. Landlord shall have the exclusive right, but not the obligation, to provide any additional services which may be required by
Tenant, including, without limitation, locksmithing, lamp replacement, additional janitorial service, and additional repairs and maintenance. If Tenant requests any such additional services, then
Tenant shall pay to Landlord the cost of such additional services, including Landlord's standard, reasonable fee for its involvement with such additional services, promptly upon being billed for same. 



        6.3    Interruption of Use.    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 Building 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 beyond Landlord's reasonable control; and such failures or delays or diminution shall never be deemed to constitute an eviction or disturbance of Tenant's use and
possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations under this Lease. Furthermore, Landlord shall not be liable under any circumstances for a loss of, or
injury to, property or for injury to, or interference with, Tenant's business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a
failure to furnish any of the services or utilities as set forth in this Article 6. 


ARTICLE 7

  
  REPAIRS  


        Tenant shall, at Tenant's own expense, keep the Premises, including all improvements, fixtures and furnishings therein, and the floor or floors of the Building on
which the Premises are located, in good order, repair and condition at all times during the Lease Term. In addition, Tenant shall, at Tenant's own expense, but under the supervision and subject to the
prior approval of Landlord, and within any reasonable period of time specified by Landlord, promptly and adequately repair all damage to the Premises and replace or repair all damaged, broken, or worn
fixtures and appurtenances, except for damage caused by ordinary wear and tear or beyond the reasonable control of Tenant; provided however, that, Landlord shall have the exclusive right, at
Landlord's option, but not the obligation, to make such repairs and replacements, and Tenant shall pay to Landlord the cost thereof, including Landlord's standard, reasonable fee for its involvement
with such repairs and replacements, promptly upon being billed for same. Landlord may, but shall not be required to, enter the Premises at all 


13





 



reasonable
times, upon reasonable prior notice to Tenant, except in the case of an emergency, to make such repairs, alterations, improvements or additions to the Premises or to the Project or to any
equipment located in the Project as Landlord shall desire or deem necessary or as Landlord may be required to do by governmental or quasi-governmental authority or court order or decree. Tenant hereby
waives any and all rights under and benefits of subsection I 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. 


ARTICLE 8

   
  ADDITIONS AND ALTERATIONS  


        8.1    Landlord's Consent to Alterations.    Tenant may not make or suffer to be made any improvements, alterations,
additions or changes to the Premises or any mechanical, plumbing or HVAC facilities or systems pertaining to the Premises (collectively, the "Alterations") without first procuring the prior written
consent of Landlord to such Alterations, which consent shall be requested by Tenant in accordance with the terms and conditions of this Article 8, and which consent shall not be unreasonably
withheld by Landlord, provided it shall be deemed reasonable for Landlord to withhold its consent to any Alteration which adversely affects the structural portions or the systems or equipment of the
Building or is visible from the exterior of the Building. Landlord may impose, as a condition of its consent to any and all Alterations or repairs of the Premises or about the Premises, such
requirements as Landlord in its sole discretion may deem desirable. The construction of the initial improvements to the Premises shall be governed by the terms of the Tenant Work Letter and not the
terms of this Article 8. 


        8.2    Manner of Construction.    Landlord shall have the exclusive right, at Landlord's option, but not the
obligation, to make the Alterations at Tenant's sole cost and expense. Prior to the commencement of construction of any Alterations or repairs, Tenant shall submit to Landlord, for Landlord's review
and approval in its reasonable discretion, all plans, specifications and working drawings relating thereto. Tenant, at its sole cost and expense, shall retain an architect/space planner selected by
Tenant, and reasonably approved by Landlord, to prepare such plans, specifications and working drawings; provided that, Tenant shall also retain the engineering consultants designated by Landlord to
prepare all plans and engineering working drawings, if any, relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety and sprinkler work of the Alterations. Tenant shall cause
each architect/space planner and engineer retained by Tenant to follow Landlord's standard construction administration procedures and to utilize the standard specifications and details for the
Building, all as promulgated by Landlord from time to time. Tenant and Tenant's architect/space planner shall verify, in the field, the dimensions and conditions as shown on the relevant portions of
the "Base Building" plans, and Tenant and Tenant's architect/space planner shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith. Landlord's
review of plans, specifications and working drawings as set forth in this Section 8.2, shall be for its sole purpose and shall not imply Landlord's review of the same, or obligate Landlord to
review the same, for quality, design, compliance with applicable building codes or other like matters. Accordingly, notwithstanding that any plans, specifications or working drawings are reviewed by
Landlord or its space planner, architect, engineers and consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord's space planner, architect,
engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith and shall not be responsible for any omissions or errors contained in the plans, specifications and
working drawings for the Alterations, and Tenant's waiver and indemnity set forth in Section 10.1 of this Lease, below, shall specifically apply to the plans, specifications and working
drawings for the Alterations. Following Landlord's approval in its reasonable discretion of all plans, specifications and working drawings for the Alterations, a contractor to construct the
Alterations shall be selected by Tenant from the list of contractors approved by Landlord or, at Tenant's option, exercisable by written notice to Landlord, pursuant to a competitive bidding process.
If Tenant shall 


14





 



select
a contractor from Landlord's list of approved contractors, then Landlord shall provide to Tenant an itemized statement of costs, as set forth in the proposed contract with such contractor. If
Tenant shall elect to have a contractor selected by a competitive bidding process, then (i) Landlord shall solicit bids for construction of the Alterations from three (3) qualified,
licensed and reputable contractors selected by Landlord (each of which contractors shall be notified in the bidding package of the requirement that, unless Landlord otherwise requires, the selected
contractor shall use the fire, lifesafety subcontractor designated by Landlord), (ii) Landlord shall perform a reconciliation of the submitted bids to adjust for inconsistent or incorrect
assumptions so that a like-kind comparison can be made and a low bid determined, and (iii) Landlord shall provide to Tenant an itemized statement of costs, as set forth in the
proposed contract with the contractor who submits the lowest bid. Tenant shall approve and deliver to Landlord the itemized statement of costs provided to Tenant in accordance with this
Section 8.2, and upon receipt of such itemized statement of costs by Landlord, Landlord shall be released by Tenant (i) to retain the contractor who submitted such itemized statement of
costs, and (ii) to purchase the items set forth in such itemized statement of costs and to commence the construction relating to such items. Landlord hereby assigns to Tenant all warranties and
guaranties by the contractor selected in accordance with this Section 8.2 to construct the Alterations, and Tenant hereby waives all claims against Landlord relating to, or arising out of the
construction of, the Alterations. In the event Tenant requests any Alterations in the Premises which require or give rise to governmentally required changes to the "Base Building," as that term is
defined below, then Landlord shall, at Tenant's expense, make such changes to the Base Building. As used in this Lease, the "Base Building" shall include the structural portions of the Building, and
the public restrooms,
elevators, exit stairwells and the systems and equipment located in the internal core of the Building on the floor or floors on which the Premises are located. The term "Base Building," as used in
this Lease, shall not be deemed to have the same meaning as the term "Base, Shell and Core," as the same is defined in Section 1 of the Tenant Work Letter. In addition to Tenant's obligations
under Article 9 of this Lease, upon completion of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded in the office of the Recorder of the County in which the Project
is located in accordance with Section 3093 of the Civil Code of the State of California or any successor statute, and Tenant shall deliver to the Project construction manager a reproducible
copy of the "as built" drawings of the Alterations as well as all permits, approvals and other documents issued by any governmental agency in connection with the Alterations. 


        8.3    Payment for Improvements.    Tenant shall pay to Landlord, within ten (10) business days after being
billed for the same, all costs related to the construction of the Alterations, including, without limitation, the following items and costs: (i) all amounts actually paid by Landlord to any
architect/space planner, engineer, consultant, contractor, subcontractor, mechanic, materialman or other person, whether retained by Landlord or Tenant, in connection with the Alterations, and all
fees incurred by, and the actual cost of documents and materials supplied by, Landlord and Landlord's consultants in connection with the preparation and review of all plans, specifications and working
drawings for the Alterations; (ii) all plan check, permit and license fees relating to construction of the Alterations paid by Landlord; (iii) the cost of any changes in the Base
Building when such changes are required by any plans, specifications or working drawings for the Alterations (including if such changes are due to the fact that such work is prepared on an unoccupied
basis), such cost to include all direct architectural and/or engineering fees and expenses incurred by Landlord in connection therewith; (iv) the cost of any changes to the plans,
specifications and working drawings for the Alterations or to the Alterations themselves required by all applicable zoning and building codes and other laws and paid by Landlord; (v) sales and
use taxes and Title 24 fees imposed on, assessed against or paid by Landlord; (vi) Landlord's standard fee for its involvement with such Alterations; and (vii) all other
out-of-pocket costs incurred by Landlord in connection with the construction of the Alterations. Landlord, at its option, may render bills to Tenant in advance of, or during,
construction of the Alterations so as to enable Landlord to pay all costs and expenses incurred by Landlord in connection with the Alterations 


15





 



(including,
without limitation, costs of the contractor retained to construct the Alterations) without advancing Landlord's own funds. At Landlord's election in its sole and absolute discretion,
Tenant shall deliver to Landlord prior to commencement of construction of the Alterations cash in an amount equal to all estimated costs related to the construction of such Alterations, or such lesser
amount as Landlord shall specify, to be held by Landlord and disbursed by Landlord for costs related to the construction of the Alterations as such costs are incurred. In the event that, after
Tenant's approval of a cost proposal for the Alterations in accordance with Section 8.2, above, any revisions, changes or substitutions shall be made to the plans, specifications and working
drawings or the Alterations, any additional costs which arise in connection with such revisions, changes or substitutions or any other additional costs shall be paid by Tenant to Landlord immediately
upon Landlord's request. Any surplus funds delivered by Tenant and held by Landlord in connection with the Alterations shall be refunded to Tenant when the all costs related to the construction of the
Alterations have been paid in full. 


        8.4    Construction Insurance.    In addition to the requirements of Article 10 of this Lease, in the event
that any Alterations are made pursuant to this Article 8, prior to the commencement of such Alterations, Tenant shall provide Landlord with evidence that Tenant carries "Builder's All Risk"
insurance in an amount approved by Landlord covering the construction of such Alterations, and such other insurance as Landlord may require, it being understood and agreed that all of such Alterations
shall be insured by Tenant pursuant to Article 10 of this Lease immediately upon completion thereof. In addition, Landlord may, in its discretion, require Tenant to obtain a lien and completion
bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee. 


        8.5    Landlord's Property.    All Alterations, improvements, fixtures, equipment and/or appurtenances which may be
installed or placed in or about the Premises, from time to time, shall be at the sole cost of Tenant and shall be and become the property of Landlord; provided, however, Landlord may, by written
notice to Tenant prior to the end of the Lease Term, or given following any earlier termination of this Lease, require Tenant, at Tenant's expense, to remove any Alterations or improvements and to
repair any damage to the Premises and Building caused by such removal and return the affected portion of the Premises to their condition existing prior to the installment of such Alterations or
improvements or, at Landlord's election, to a building standard tenant improved condition as determined by Landlord. If Tenant fails to complete such removal and/or to repair any damage caused by the
removal of any Alterations or improvements in the Premises and return the affected portion of the Premises to their condition existing prior to the installment of such Alterations or improvements or,
if elected by Landlord, to a building standard tenant improved condition as determined by Landlord, prior to the expiration or earlier termination of this Lease, then Rent shall continue to accrue
under this Lease in accordance with Article 16, below, after the end of the Lease Term until such work shall be completed, and Landlord shall have the right, but not the obligation, to perform
such work and to charge the cost thereof to Tenant. Tenant hereby protects, defends, indemnifies and holds Landlord harmless from any liability, cost, obligation, expense or claim of lien in any
manner relating to the installation, placement, removal or financing of any such Alterations, improvements, fixtures and/or equipment in, on or about the Premises, which obligations of Tenant shall
survive the expiration or earlier termination of this Lease. 


        8.6    Improvement Allowance.    Tenant shall be entitled to a one-time allowance for the purchase and
installation of improvements which are permanently affixed to the Premises (the "Improvements") in the amount of up to $18,360.00 (i.e., $6.00 per rentable square foot of the Premises
multiplied by 3,060 rentable square feet) (the "Improvement Allowance"). The construction and installation of the Improvements shall be made in accordance with the terms of this Article 8, and
the Improvements shall be deemed Alterations for all purposes hereunder. The Improvement Allowance shall be disbursed by Landlord pursuant to Landlord's disbursement process for costs related to the
construction of the Improvements, including items (i) through (vii), inclusive, of Section 8.3, above. 


16





 



Landlord
and Tenant hereby agree that, pursuant to item (vi) of Section 8.3, above, Landlord shall be entitled to a construction supervision and management fee in connection with
construction of the Improvements in an amount equal to the product of (A) five percent (5%) and (B) an amount equal to the aggregate of all costs related to the construction of the
Improvements. All costs related to the construction of the Improvements in excess of the Improvement Allowance (as the same may be reduced by the application of the same as a credit against Base Rent
in accordance with the foregoing sentence) shall be paid by Tenant in accordance with Section 8.3, above. In the event that Improvement Allowance is not fully utilized by Tenant within one
(1) year following the Lease Commencement Date (either to pay for costs related to the construction of the Improvements or as a credit against Base Rent), then such unused amounts shall revert
to Landlord and Tenant shall have no further rights with respect thereto. 


ARTICLE 9

   
  COVENANT AGAINST LIENS  


        Tenant shall keep the Project and Premises free from any liens or encumbrances arising out of the work performed, materials furnished or obligations incurred by
or on behalf of Tenant, and shall protect, defend, indemnify and hold Landlord harmless from and against any claims, liabilities, judgments or costs (including, without limitation, reasonable
attorneys' fees and costs) arising out of same or in connection therewith. Tenant shall give Landlord notice at least twenty (20) days prior to the commencement of any such work on the Premises
(or such additional time as may be necessary under applicable laws) to afford Landlord the opportunity of posting and recording appropriate notices of non-responsibility. Tenant shall
remove any such lien or encumbrance by bond or otherwise within five (5) days after notice by Landlord, and if Tenant shall fail to do so, Landlord may pay the amount necessary to remove such
lien or encumbrance, without being responsible for investigating the validity thereof. The amount so paid shall be deemed Additional Rent under this Lease payable upon demand, without limitation as to
other remedies available to Landlord under this Lease. Nothing contained in this Lease shall authorize Tenant to do any act which shall subject Landlord's title to the Building or Premises to any
liens or encumbrances whether claimed by operation of law or express or implied contract. Any claim to a lien or encumbrance upon the Building or Premises arising in connection with any such work or
respecting the Premises not performed by or at the request of Landlord shall be null and void, or at Landlord's option shall attach only against Tenant's interest in the Premises and shall in all
respects be subordinate to Landlord's title to the Project, Building and Premises. 


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   ARTICLE 10

   
  INSURANCE  


        10.1    Indemnification and Waiver.    Tenant hereby assumes all risk of damage to property or injury to persons in,
upon or about the Premises from any cause whatsoever (including, but not limited to, any personal injuries resulting from a slip and fall in, upon or about the Premises) and agrees that Landlord, its
partners, subpartners and their respective officers, agents, servants, employees, and independent contractors (collectively, "Landlord Parties") shall not be liable for, and are hereby released from
any responsibility for, any damage either to person or property or resulting from the loss of use thereof, which damage is sustained by any person in, upon or about the Premises or by Tenant or by
other persons claiming through Tenant in, upon or about the Project, including, without limitation, the Project parking facility. Tenant promptly upon notice shall indemnify, defend, protect, and hold
harmless the Landlord Parties from any and all loss, cost, damage, expense and liability (including without limitation court costs and reasonable attorneys' fees) incurred in connection with or
arising from any cause in, on or about the Premises (including, but not limited to, a slip and fall), any acts, omissions or negligence of Tenant or of any person claiming by, through or under Tenant,
or of the contractors, agents, servants, employees, invitees, guests or licensees of Tenant or any such person, in, on or about the Project or any breach of the terms of this Lease, either prior to,
during, or after the expiration of the Lease Term, provided that the terms of the foregoing indemnity shall not apply to a breach of the Lease by Landlord or the negligence or willful misconduct of
Landlord. Should Landlord be named as a defendant in any suit brought against Tenant in connection with or arising out of Tenant's occupancy of the Premises, Tenant shall pay to Landlord its
reasonable costs and expenses incurred in such suit, including without limitation, its actual professional fees such as reasonable appraisers', accountants' and attorneys' fees. The provisions of this
Section 10.1 shall survive the expiration or sooner termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior to such expiration or
termination. 


        10.2    Tenant's Compliance With Landlord's Fire and Casualty Insurance.    Tenant shall, at Tenant's expense, comply
with all insurance company requirements pertaining to the use of the Premises. Tenant shall not cause or permit anything to be done in, upon or about the Premises which would in any way increase the
premium for, cause the cancellation of or otherwise affect any insurance carried by Landlord in connection with the Project or any part thereof, or cause a cancellation of any insurance policy
covering the Building or any part thereof. Without limiting Landlord's remedies for Tenant's breach of the foregoing covenant, if Tenant's conduct or use of the Premises causes any increase in the
premium for such insurance policies then Tenant shall reimburse Landlord for any such increase promptly upon being billed therefor. Tenant, at Tenant's expense, shall comply with all rules, orders,
regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and any similar body. 


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



        10.3.1    Commercial
General Liability Insurance covering the insured against claims of bodily injury, personal injury and property damage (including loss of use thereof)
arising out of Tenant's operations, and contractual liabilities (covering the performance by Tenant of its indemnity agreements) including a Broad Form endorsement covering the insuring provisions of
this Lease and the performance by Tenant of the indemnity agreements set forth in Section 10.1 of this Lease, for limits of liability not less than: 



	Bodily Injury and Property Damage Liability	 	$5,000,000 each occurrence

$5,000,000 annual aggregate
	Personal Injury Liability	 	$5,000,000 each occurrence

$5,000,000 annual aggregate

0% Insured's participation





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        10.3.2    Physical
Damage Insurance covering (i) all office furniture, business and trade fixtures, office equipment, free-standing cabinet work, movable
partitions, merchandise and all other items of Tenant's property on the Premises installed by, for, or at the expense of Tenant, (ii) the "Tenant Improvements," as that term is defined in the
Tenant Work Letter, and any other improvements which exist in the Premises as of the Lease Commencement Date (excluding the Base Building) (the "Original Improvements"), and (iii) all other
improvements, alterations and additions to the Premises. Such insurance shall be written on an "all risks" of physical loss or damage basis, for the full replacement cost value (subject to reasonable
deductible amounts) new without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include coverage
for damage or other loss caused by fire or other peril including, but not limited to, vandalism and malicious mischief, theft, water damage of any type, including sprinkler leakage, bursting or
stoppage of pipes, and explosion, and providing business interruption coverage for a period of one year. 



        10.3.3    Worker's
Compensation and Employer's Liability or other similar insurance pursuant to all applicable state and local statutes and regulations. 




        10.4    Form of Policies.    The minimum limits of policies of insurance required of Tenant under this Lease shall in
no event limit the liability of Tenant under this Lease. Such insurance shall (i) name Landlord, and any other party the Landlord so specifies, as an additional insured, including Landlord's
managing agent, if any; (ii) specifically cover the liability assumed by Tenant under this Lease, including, but not limited to, Tenant's obligations under Section 10. 1 of this Lease;
(iii) be issued by an insurance company having a rating of not less than A-VIII in Best's Insurance Guide or which is otherwise acceptable to Landlord and licensed to do business in
the State of California; (iv) be primary insurance as to all claims thereunder and provide that any insurance carried by Landlord is excess and is non-contributing with any
insurance requirement of Tenant; (v) be in form and content reasonably acceptable to Landlord; and (vi) provide that said insurance shall not be canceled or coverage changed unless
thirty (30) days' prior written notice shall have been given to Landlord and any mortgagee of Landlord. Tenant shall deliver said policy or policies or certificates thereof to Landlord on or
before the Lease Commencement Date and at least thirty (30) days before the expiration dates thereof. In the event Tenant shall fail to procure such insurance, or to deliver such policies or
certificates, within two (2) days following notice from Landlord of such failure, Landlord may, at its option, procure such policies for the account of Tenant, and the cost thereof shall be
paid to Landlord within five (5) days after delivery to Tenant of bills therefor. 


        10.5    Subrogation.    Landlord and Tenant intend that their respective property loss risks shall be borne by
reasonable insurance carriers to the extent above provided, and Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance carriers in the event of a
property loss to the extent that such coverage is agreed to be provided hereunder. The parties each hereby waive all rights and claims against each other for such losses, and waive all rights of
subrogation of their respective insurers, provided such waiver of subrogation shall not affect the right to the insured to recover thereunder. The parties agree that their respective insurance
policies are now, or shall be, endorsed such that the waiver of subrogation shall not affect the right of the insured to recover thereunder, so long as no material additional premium is charged
therefor. 


        10.6    Additional Insurance Obligations.    Tenant shall carry and maintain during the entire Lease Term, at Tenant's
sole cost and expense, increased amounts of the insurance required to be carried by Tenant pursuant to this Article 10 and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may be reasonably requested by Landlord. 


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ARTICLE 11

   
  DAMAGE AND DESTRUCTION  



        11.1    Repair of Damage to Premises by Landlord.    Tenant shall promptly notify Landlord of any damage to the
Premises resulting from fire or any other casualty. If the Premises or any Common Areas necessary to Tenant's use of or access to the Premises shall be damaged by fire or other casualty, Landlord
shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord's reasonable control, and subject to all other terms of this Article 11,
restore the Base Building and such Common Areas. Such restoration shall be to substantially the same condition of the Base Building and the Common Areas prior to the casualty, except for modifications
required by zoning and building codes and other laws or by the holder of a mortgage on the Building or Project or any other modifications to the Common Areas deemed desirable by Landlord, provided
that access to the Premises and any common restrooms serving the Premises shall not be materially impaired. Upon the occurrence of any damage to the Premises, upon notice (the "Landlord Repair
Notice") to Tenant from Landlord, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant's insurance required under items
(ii) and (iii) of Section 10.3 of this Lease, and Landlord shall repair any injury or damage to the Tenant Improvements and the Original Improvements installed in the Premises and
shall return such Tenant Improvements and Original Improvements to their original condition; provided that if the cost of such repair by Landlord exceeds the amount of insurance proceeds received by
Landlord from Tenant's insurance carrier, as assigned by Tenant, the cost of such repairs shall be paid by Tenant to Landlord prior to Landlord's commencement of repair of the damage. In the event
that Landlord does not deliver the Landlord Repair Notice within sixty (60) days following the date the casualty becomes known to Landlord, Tenant shall, at its sole cost and expense, repair
any injury or damage to the Tenant Improvements and the Original Improvements installed in the Premises and shall return such Tenant Improvements and Original Improvements to their original condition.
Whether or not Landlord delivers a Landlord Repair Notice, prior to the commencement of construction, Tenant shall submit to Landlord, for Landlord's review and approval, all plans, specifications and
working drawings relating thereto, and Landlord shall select the contractors to perform such improvement work. Landlord shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant's business resulting in any way from such damage or the repair thereof, provided, however, if such fire or other casualty shall have damaged the Premises or a portion
thereof or Common Areas necessary to Tenant's occupancy, then Landlord shall allow Tenant a proportionate abatement of Rent during the time and to the extent and in the proportion that the Premises or
such portion thereof are unfit for occupancy for the purposes permitted under this Lease, and are not occupied by Tenant as a result thereof, provided that such abatement of Rent shall be allowed only
to the extent Landlord is reimbursed from the proceeds of rental interruption insurance purchased by Landlord as part of Operating Expenses; provided further, however, if the damage or destruction is
due to the negligence or willful misconduct of Tenant or any of its agents, employees, contractors, invitees or guests, then Tenant shall be responsible for any reasonable, applicable insurance
deductible (which shall be payable to Landlord upon demand) and there shall be no rent abatement. In the event that Landlord shall not deliver the Landlord Repair Notice, Tenant's right to rent
abatement pursuant to the preceding sentence shall terminate as of the date which is reasonably determined by Landlord to be the date Tenant should have completed repairs to the Premises assuming
Tenant used reasonable due diligence in connection therewith. 


        11.2    Landlord's Option to Repair.    Notwithstanding the terms of Section 11.1 of this Lease, Landlord may
elect not to rebuild and/or restore the Premises, Building and/or Project, and instead terminate this Lease, by notifying Tenant in writing of such termination within sixty (60) days after the
date of discovery of the damage, such notice to include a termination date giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect only if the Building or Project shall
be damaged by fire or other casualty or cause, whether or not the Premises are affected, and one or more of the 


20





 



following
conditions is present: (i) in Landlord's reasonable judgment, repairs cannot reasonably be completed within one hundred eighty (180) days after the date of discovery of the
damage (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the Building or Project or ground lessor with respect to the Building
or Project shall require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate the ground lease, as the case may be; (iii) the damage is not
fully covered by Landlord's insurance policies or that portion of the proceeds from Landlord's insurance policies allocable to the Building or the Project, as the case may be; (iv) Landlord
decides to rebuild the Building or Common Areas so that they will be substantially different structurally or architecturally; (v) the damage occurs during the last twelve (12) months of
the Lease Term; or (vi) any owner of any other portion of the Project, other than Landlord, does not intend to repair the damage to such portion of the Project. If Landlord does not elect to
terminate this Lease pursuant to Landlord's termination right as provided above, Landlord shall, within sixty (60) days of the date of damage, deliver written notice to Tenant specifying
Landlord's reasonable opinion of the date of completion of the repairs, and if the repairs to be made by Landlord cannot, in the reasonable opinion of Landlord, be completed within one hundred eighty
(180) days after being commenced (which one hundred eighty (180) day period shall not be subject to extension as a result of any Force Majeure), Tenant may elect, within thirty
(30) days after the date of Landlord's notice, to terminate this Lease by written notice to Landlord effective as of the date specified in the notice, which date shall not be less than thirty
(30) days nor more than sixty (60) days after the date such notice is given by Tenant. Furthermore, if neither Landlord nor Tenant has terminated this Lease, and the repairs to be made
by Landlord are not actually completed within such one hundred eighty (180) day period, Tenant shall have the right to terminate this Lease during the first five (5) business days of
each calendar month following the end of such period until such time as the repairs to be made by Landlord are complete, by notice to Landlord (the "Damage Termination Notice"), effective as of a date
set forth in the Damage Termination Notice (the "Damage Termination Date"), which Damage Termination Date shall not be less than ten (10) business days following the end of each such month.
Notwithstanding the foregoing, if Tenant delivers a Damage Termination Notice to Landlord, then Landlord shall have the right to suspend the occurrence of the Damage Termination Date for a period
ending thirty (30) days after the Damage Termination Date set forth in the Damage Termination Notice by delivering to Tenant, within five (5) business days of Landlord's receipt of the
Damage Termination Notice, a certificate of Landlord's contractor responsible for the repair of the damage certifying that it is such contractor's good faith judgment that the repairs to be made by
Landlord shall be substantially completed within thirty (30) days after the Damage Termination Date. If such repairs shall be substantially completed prior to the expiration of such
thirty-day period, then the Damage Termination Notice shall be of no force or effect, but if such repairs shall not be substantially completed within such thirty-day period,
then this Lease shall terminate upon the expiration of such thirty-day period. At any time, from time to time, after the date occurring sixty (60) days after the date of the damage,
Tenant may request that Landlord inform Tenant of Landlord's reasonable opinion of the date of completion of the repairs to be made by Landlord and Landlord shall respond to such request within five
(5) business days. In the event this Lease is terminated in accordance with the terms of this Section 11.2, Tenant shall assign to Landlord (or to any party designated by Landlord) all
insurance proceeds payable to Tenant under Tenant's insurance required under items (ii) and (iii) of Section 10.3 of this Lease. 


        11.3    Waiver of Statutory Provisions.    The provisions of this Lease, including this Article 11, constitute
an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building or the Project, and any statute or regulation
of the State of California, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the
absence of an express agreement between the parties, and any other statute or regulation, now or 


21





 



hereafter
in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or the Project. 


ARTICLE 12

   
  NONWAIVER  


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


ARTICLE 13

   
  CONDEMNATION  


        If the whole or any part of the Premises, Building or Project shall be taken by power of eminent domain or condemned by any competent authority for any public or
quasi-public use or purpose, or if any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such manner as to require the use, reconstruction or
remodeling of any part of the Premises, Building or Project, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, Landlord shall have the
option to terminate this Lease effective as of the date possession is required to be surrendered to the authority. If more than twenty-five percent (25%) of the rentable square feet of the
Premises is taken, or if all reasonable access to the Premises is substantially impaired, in each case for a period in excess of one hundred eighty (180) days, Tenant shall have the option to
terminate this Lease effective as of the date possession is required to be surrendered to the authority. Tenant shall not because of such taking assert any claim against Landlord or the authority for
any compensation because of such taking and Landlord shall be entitled to the entire award or payment in connection therewith, except that Tenant shall have the right to file any separate claim
available to Tenant for any taking of Tenant's personal property and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the terms of this Lease, and for
moving expenses, so long as such claims do not diminish the award available to Landlord, its ground lessor with respect to the Building or Project or its mortgagee, and such claim is payable
separately to Tenant. All Rent shall be apportioned as of the date of such termination. If any part of the Premises shall be taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of Civil Procedure. Notwithstanding anything to the
contrary contained in this Article 13, in the event of a temporary taking of all or any portion of the Premises for a period of one hundred and eighty (180) days or less, then this Lease
shall not terminate but the Base Rent and the Additional Rent shall be abated for the period of such taking in proportion 


22





 



to
the ratio that the amount of rentable square feet of the Premises taken bears to the total rentable square feet of the Premises. Landlord shall be entitled to receive the entire award made in
connection with any such temporary taking. 


ARTICLE 14

  
  ASSIGNMENT AND SUBLETTING  


        14.1    Transfers.    Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Premises or any part thereof by any
persons other than Tenant and its employees and contractors (all of the foregoing are hereinafter sometimes referred to individually as a "Transfer," and, collectively, as "Transfers" and any person
to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a "Transferee"). If Tenant desires Landlord's consent to any Transfer, Tenant shall notify Landlord in
writing, which notice (the "Transfer Notice") shall include (i) the proposed effective date of the Transfer, which shall not be less than thirty (30) days nor more than one hundred
eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the portion of the Premises to be transferred (the "Subject Space"), (iii) all of the
terms of the proposed Transfer and the consideration therefor, including calculation of the "Transfer Premium", as that term is defined in Section 14.3 below, in connection with such Transfer,
the name and address of the proposed Transferee, and a copy of all existing executed and/or proposed documentation pertaining to the proposed Transfer, including all existing operative documents to be
executed to evidence such Transfer or the agreements incidental or related to such Transfer, provided that Landlord shall have the right to require Tenant to utilize Landlord's standard Transfer
documents in connection with the documentation of such Transfer, (iv) current financial statements of the proposed Transferee certified by an officer, partner or owner thereof, business credit
and personal references and history of the proposed Transferee and any other information required by Landlord which will enable Landlord to determine the financial responsibility, character, and
reputation of the proposed Transferee, nature of such Transferee's business and proposed use of the Subject Space, and (v) an executed estoppel certificate from Tenant in the form attached
hereto as Exhibit E. Any Transfer made without Landlord's prior written consent shall, at Landlord's option, be null, void and of no effect, and shall, at Landlord's option, constitute a
default by Tenant under this Lease. Whether or not Landlord consents to any proposed Transfer, Tenant shall pay Landlord's review and processing fees, as well as any reasonable professional fees
(including, without limitation, attorneys', accountants', architects', engineers' and consultants' fees) incurred by Landlord, within thirty (30) days after written request by Landlord, in an
amount not to exceed One Thousand Five Hundred and No/100 Dollars ($1,500.00) for a Transfer involving an assignment in the ordinary course of business. 



        14.2    Landlord's Consent.    Landlord shall not unreasonably withhold its consent to any proposed Transfer of the
Subject Space to the Transferee on the terms specified in the Transfer Notice. Without limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be
reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer where one or more of the following apply: 



        14.2.1    The
Transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Building or the Project, or would be a
significantly less prestigious occupant of the Building than Tenant; 


        14.2.2    The
Transferee intends to use the Subject Space for purposes which are not permitted under this Lease; 



23






 




        14.2.3    The
Transferee is either a governmental agency or instrumentality thereof; 


        14.2.4    The
Transferee is not a party of reasonable financial worth and/or financial stability in light of the responsibilities to be undertaken in connection with the
Transfer on the date consent is requested; 


        14.2.5    The
proposed Transfer would cause a violation of another lease for space in the Project, or would give an occupant of the Project a right to cancel its lease; 



        14.2.6    Either
the proposed Transferee, or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed
Transferee, (i) occupies space in the Project at the time of the request for consent, or (ii) is negotiating or has negotiated with Landlord to lease space in the Project; 


        14.2.7    In
Landlord's reasonable judgment, the use of the Premises by the proposed Transferee would not be comparable to the types of office use by other tenants in the
Project, would entail any alterations which would lessen the value of the tenant improvements in the Premises, would result in more than a reasonable density of occupants per square foot of the
Premises, would increase the burden on elevators or other Building systems or equipment over the burden thereon prior to the proposed Transfer, or would require increased services by Landlord; or 


        14.2.8    The
proposed Transfer is of less than the entire Premises. 




        If
Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any recapture rights Landlord may have under Section 14.4 of this
Lease), Tenant may within six (6) months after Landlord's consent, but not later than the expiration of said six-month period, enter into such Transfer of the Premises or portion
thereof, upon substantially the same terms and conditions as are set forth in the Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that if there
are any changes in the terms and conditions from those specified in the Transfer Notice (i) such that Landlord would initially have been entitled to refuse its consent to such Transfer under
this Section 14.2, or (ii) which would cause the proposed Transfer to be more favorable to the Transferee than the terms set forth in Tenant's original Transfer Notice, Tenant shall
again submit the Transfer to Landlord for its approval and other action under this Article 14 (including Landlord's right of recapture, if any, under Section 14.4 of this Lease).
Notwithstanding anything to the contrary in this Lease, if Tenant or any proposed Transferee claims that Landlord has unreasonably withheld or delayed its consent under Section 14.2 or
otherwise has breached or acted unreasonably under this Article 14, their sole remedies shall be a declaratory judgment and an injunction for the relief sought, and Tenant hereby waives the
provisions of Section 1995.310 of the California Civil Code, or any successor statute, and all other remedies, including, without limitation, any right at law or equity to terminate this Lease,
on its own behalf and, to the extent permitted under all applicable laws, on behalf of the proposed Transferee. Tenant shall indemnify, defend and hold harmless Landlord from any and all liability,
losses, claims, damages, costs, expenses, causes of action and proceedings involving any third party or parties (including without
limitation Tenant's proposed subtenant or assignee) who claim they were damaged by Landlord's wrongful withholding or conditioning of Landlord's consent. 



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


24





 



(i) any
changes, alterations and improvements to the Premises in connection with the Transfer, (ii) any free base rent reasonably provided to the Transferee in connection with the
Transfer, and (iii) any brokerage commissions in connection with the Transfer (collectively, "Tenant's Subleasing Costs"). "Transfer Premium" shall also include, but not be limited to, key
money, bonus money or other cash consideration paid by Transferee to Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to
Transferee or for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such Transfer. Tenant shall make a determination of the amount of
Landlord's applicable share of the Transfer Premium on a monthly basis as rent or other consideration is paid by Transferee to Tenant under the Transfer. For purposes of calculating the Transfer
Premium on a monthly basis, (A) Tenant's Subleasing Costs shall be deemed to be expended by Tenant in equal monthly amounts over the entire term of the Transfer and (B) the Rent paid for
the Subject Space by Tenant shall be computed after adjusting such rent to the actual effective rent to be paid, taking into consideration any and all leasehold concessions granted in connection
therewith, including, but not limited to, any rent credit and tenant improvement allowance. For purposes of calculating any such effective rent all such concessions shall be amortized on a
straight-line basis over the relevant term. 


        14.4    Landlord's Option as to Subject Space.    Notwithstanding anything to the contrary contained in this
Article 14, Landlord shall have the option, by giving written notice to Tenant within thirty (30) days after receipt of any Transfer Notice, to recapture the Subject Space. Such
recapture shall cancel and terminate this Lease with respect to the Subject Space as of the date stated in the Transfer Notice as the effective date of the proposed Transfer. In the event of a
recapture by Landlord, if this Lease shall be canceled with respect to less than the entire Premises, then (i) the Rent reserved herein shall be prorated on the basis of the number of rentable
square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises; (ii) this Lease as so amended shall continue thereafter in full force and effect,
and upon request of either party, the parties shall execute written confirmation of the same; and (iii) Landlord shall construct or cause to be constructed a demising wall separating that
portion of the Premises recaptured by Landlord from that portion of the Premises retained by Tenant; provided that, Tenant hereby agrees that, notwithstanding Tenant's occupancy of its retained
portion of the Premises during the construction of such demising wall by Landlord, Landlord shall be permitted to construct such demising wall during normal business hours, without any obligation to
pay overtime other premiums, and the construction of such demising wall by Landlord shall in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent, and
Landlord shall have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to or interference with Tenant's business arising from the construction of such demising
wall, nor
shall Tenant be entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of its retained portion of the Premises or of Tenant's personal property or
improvements resulting from the construction of such demising wall, or for any inconvenience or annoyance occasioned by the construction of such demising wall; and provided further that, Tenant shall
be responsible for, and shall pay to Landlord promptly upon being billed therefor, fifty percent (50%) of all costs related to the construction of such demising wall, including Landlord's standard fee
for its involvement with such demising wall. If Landlord declines, or fails to elect in a timely manner, to recapture the Subject Space under this Section 14.4, then, provided Landlord has
consented to the proposed Transfer, Tenant shall be entitled to proceed to transfer the Subject Space to the proposed Transferee, subject to provisions of this Article 14. 


        14.5    Effect of Transfer.    If Landlord consents to a Transfer, then (i) the terms and conditions of this
Lease shall in no way be deemed to have been waived or modified; (ii) such consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee; (iii) Tenant
shall deliver to Landlord, promptly after execution, an original executed copy of all documentation pertaining to the Transfer in form and content reasonably acceptable to Landlord, including, without
limitation, at Landlord's option, a "Transfer Agreement," as that term is defined in this Section 14.5, below; 


25





 



(iv) Tenant
shall furnish upon Landlord's request a complete statement, certified by an independent certified public accountant, or Tenant's chief financial officer, setting forth in detail the
computation of any Transfer Premium Tenant has derived and shall derive from such Transfer; and (v) no Transfer relating to this Lease or agreement entered into with respect thereto, whether
with or without Landlord's consent, shall relieve Tenant or any guarantor of the Lease from any liability under this Lease, including, without limitation, in connection with the Subject Space, and, in
the event of a Transfer of Tenant's entire interest in this Lease, the liability of Tenant and such Transferee shall be joint and several. Landlord or its authorized representatives shall have the
right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any
Transfer shall be found understated, Tenant shall, within thirty (30) days after demand, pay the deficiency, and if understated by more than two percent (2%), Tenant shall pay Landlord's costs
of such audit. Notwithstanding anything to the contrary contained in this Article 14, Landlord, at its option in its sole and absolute discretion, may require, as a condition to the validity of
any Transfer, that both Tenant and such Transferee enter into a separate written agreement directly with Landlord (a "Transfer Agreement"), which Transfer Agreement, among other things, shall create
privity of contract between Landlord and such Transferee with respect to the provisions of this Article 14, and shall contain such terms and provisions as Landlord may reasonably require,
including, without limitation, the following: (A) such Transferee's agreement to be bound by all the obligations of Tenant under this Lease (including, but not limited to, Tenant's obligation
to pay Rent), provided that, in the event of a Transfer of less than the entire Premises, the obligations to which such Transferee shall agree to be so bound shall be prorated on a basis of the number
of rentable square feet of the Subject Space in proportion to the number of square feet in the Premises; (B) such Transferee's acknowledgment of, and agreement that such Transfer shall be
subordinate and subject to, Landlord's rights under Section 19.3 of this Lease; and (C) Tenant's and such Transferee's recognition of and agreement to be bound by all the terms and
provisions of this Article 14, including, but not limited to, any such terms and provisions which Landlord, at its option, requires to be expressly set forth in such Transfer Agreement. Upon
the occurrence of any default by Transferee under such Transfer, Landlord shall have the right, at its option, but not the obligation, on behalf of Tenant, to pursue any or all of the remedies
available to Tenant under such Transfer or at law or in equity (all of which remedies shall be distinct, separate and cumulative). 


        14.6    Occurrence of Default.    Any Transfer hereunder, whether or not such Transferee shall have executed a
Transferee Agreement, shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any Transfer, then Landlord shall have all of the
rights set forth in Section 19.3 of this Lease with respect to such Transfer. In addition, if Tenant shall be in default under this Lease, then Landlord is hereby irrevocably authorized, as
Tenant's agent and attorney-in-fact, to direct any Transferee to make all payments under or in connection with a Transfer directly to Landlord (which payments Landlord shall
apply towards Tenant's obligations under this Lease) until such default is cured. Such Transferee shall rely on any representation by Landlord that Tenant is in default hereunder, without any need for
confirmation thereof by Tenant. Upon any assignment, the assignee shall assume in writing all obligations and covenants of Tenant thereafter to be performed or observed under this Lease. No collection
or acceptance of rent by Landlord from any Transferee shall be deemed a waiver of any provision of this Article 14 or the approval of any Transferee or a release of Tenant from any obligation
under this Lease, whether theretofore or thereafter accruing. In no event shall Landlord's enforcement of any provision of this Lease against any Transferee be deemed a waiver of Landlord's right to
enforce any term of this Lease against Tenant or any other person. If Tenant's obligations hereunder have been guaranteed, Landlord's consent to any Transfer shall not be effective unless the
guarantor also consents to such Transfer. 


        14.7    Additional Transfers.    For purposes of this Lease, the term "Transfer" shall also include (i) if
Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by operation of law, of fifty percent (50%) or more of the partners, or transfer of fifty percent (50%) or more of
partnership 


26





 



interests,
within a twelve (12)-month period, or the dissolution of the partnership without immediate reconstitution thereof, and (ii) if Tenant is a closely held corporation (i.e., whose stock
is not publicly held and not traded through an exchange or over the counter), (A) the dissolution, merger, consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more of the voting shares of Tenant (other than to immediate family members by reason of gift or death), within a twelve (12)-month period, or
(C) the sale, mortgage, hypothecation or pledge of an aggregate of fifty percent (50%) or more of the value of the unencumbered assets of Tenant within a twelve (12)-month period. 


        14.8    Non-Transfers.    Notwithstanding anything to the contrary contained in this Article 14, an
assignment or subletting of all or a portion of the Premises to an affiliate of Tenant (an "Affiliate") (an entity which is controlled by, controls, or is under common control with, Tenant or an
entity with which, or into which, Tenant merges and is the surviving entity, to any entity which results from the reorganization, consolidation or re-incorporation of Tenant, or to an
entity which acquires substantially all of the stock or assets of Tenant as a going concern, with respect to the business that is being conducted in the Premises, shall not be deemed a Transfer under
this Article 14, provided that Tenant notifies Landlord of any such assignment or sublease and promptly supplies Landlord with any documents or information reasonably requested by Landlord
regarding such assignment or sublease or such affiliate, and further provided that such assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this Lease. In addition, a
sale or transfer of the capital stock of Tenant shall not be deemed a Transfer if (1) such sale or transfer occurs in connection
with any bona fide financing or capitalization for the benefit of Tenant, or (2) Tenant becomes a publicly traded corporation. Landlord shall have no right to terminate the Lease in connection
with, and shall have no right to any sums or other economic consideration resulting from a Transfer to an Affiliate or a Transfer described in (1) or (2) above. "Control," as used in
this Section 14.8, shall mean the ownership, directly or indirectly, of at least fifty-one percent (51%) of the voting securities of, or possession of the right to vote, in the
ordinary direction of its affairs, of at least fifty-one percent (51%) of the voting interest in, any person or entity. 


ARTICLE 15

  
  SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES  


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


        15.2    Removal of Tenant Property by Tenant.    Upon the expiration of the Lease Term, or upon any earlier
termination of this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender possession of the Premises to Landlord in as good order and condition as when Tenant
took possession and as thereafter improved by Landlord and/or Tenant, reasonable wear and tear and repairs which are specifically made the responsibility of Landlord hereunder excepted. Upon such
expiration or termination, Tenant shall, without expense to Landlord, remove or cause to be removed from the Premises all debris and rubbish, such items of furniture, equipment, business and trade
fixtures, free-standing cabinet work, movable partitions and other articles of personal property owned 


27





 



by
Tenant or installed or placed by Tenant at its expense in the Premises, and such similar articles of any other persons claiming under Tenant, as Landlord may, in its sole discretion, require to be
removed, and Tenant shall repair at its own expense all damage to the Premises and Building resulting from such removal. 


ARTICLE 16

   
  HOLDING OVER  


        If Tenant holds over after the expiration of the Lease Term or earlier termination thereof, with the express or implied consent of Landlord, such tenancy shall be
from month-to-month only, and shall not constitute a renewal hereof or an extension for any further term, and in such case Rent shall be payable at a monthly rate equal to two
(2) times the Rent applicable during the last rental period of the Lease Term under this Lease. Such month-to-month tenancy shall be subject to every other applicable
term, covenant and agreement contained herein. Nothing contained in this Article 16 shall be construed as consent by Landlord to any holding over by Tenant, and Landlord expressly reserves the
right to require Tenant to surrender possession of the Premises to Landlord as provided in this Lease upon the expiration or other termination of this Lease. The provisions of this Article 16
shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law. If Tenant fails to surrender the Premises upon the termination or expiration
of this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys' fees) and liability resulting from such failure, including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender
and any lost profits to Landlord resulting therefrom. 


ARTICLE 17

   
  ESTOPPEL CERTIFICATES  


        Within ten (10) days following a request in writing by Landlord, such requests to be made not more often than once per year, Tenant shall execute,
acknowledge and deliver to Landlord an estoppel certificate, which, as submitted by Landlord, shall be substantially in the form of Exhibit E, attached hereto (or such other form as may be
required by any prospective mortgagee or purchaser of the Project, or any portion thereof), indicating therein any exceptions thereto that may exist at that time, and shall also contain any other
information reasonably requested by Landlord or Landlord's mortgagee or prospective mortgagee. Any such certificate may be relied upon by any prospective mortgagee or purchaser of all or any portion
of the Project. Tenant shall execute and deliver whatever other instruments may be reasonably required for such purposes. At any time during the Lease Term, Landlord may require Tenant to provide
Landlord with a current financial statement and financial statements of the two (2) years prior to the current financial statement year. Such statements shall be prepared in accordance with
generally accepted accounting principles and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant. Failure of Tenant to timely execute, acknowledge
and deliver such estoppel certificate or other instruments shall constitute an acceptance of the Premises and an acknowledgment by Tenant that statements included in the estoppel certificate are true
and correct, without exception. All information received by Landlord pursuant to this Article 17 shall be kept strictly confidential and Landlord shall not disclose such confidential
information to any person or entity other than Landlord's financial, legal, and other professional consultants as reasonably necessary or as required by law. 


28





 


ARTICLE 18

  
  MORTGAGE OR GROUND LEASE  


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



        18.2    Notice to Lienholder or Ground Lessor.    Notwithstanding anything to the contrary contained in
Article 28, below, or elsewhere in this Lease, upon receipt by Tenant of notice from any holder of a mortgage, trust deed or other encumbrance in force against the Building or the Project or
any part thereof which includes the Premises or any lessor under a ground lease or underlying lease of the Building or the Project, or from Landlord, which notice sets forth the address of such
lienholder or ground lessor, no notice from Tenant to Landlord shall be effective unless and until a copy of the same is given to such lienholder or ground lessor at the appropriate address therefor
(as specified in the above-described notice or at such other places as may be designated from time to time in a notice to Tenant in accordance with Article 28, below), and the curing of any of
Landlord's defaults by such lienholder or ground lessor within a reasonable period of time after such notice from Tenant (including a reasonable period of time to obtain possession of the Building or
the Project, as the case may be, if such lienholder or ground lessor elects to do so) shall be treated as performance by Landlord. For the purposes of this Article 18, the term "mortgage" shall
include a mortgage on a leasehold interest of Landlord (but not a mortgage on Tenant's leasehold interest hereunder). 


        18.3    Assignment of Rents.    With reference to any assignment by Landlord of Landlord's interest in this Lease, or
the Rent payable to Landlord hereunder, conditional in nature or otherwise, which
assignment is made to any holder of a mortgage, trust deed or other encumbrance in force against the Building or the Project or any part thereof which includes the Premises or to any lessor under a
ground lease or underlying lease of the Building or the Project, Tenant agrees as follows: 



        18.3.1    The
execution of any such assignment by Landlord, and the acceptance thereof by such lienholder or ground lessor, shall never be treated as an assumption by such
lienholder or ground lessor of any of the obligations of Landlord under this Lease, unless such lienholder or ground lessor shall, by notice to Tenant, specifically otherwise elect. 



29





 

        18.3.2    Notwithstanding
delivery to Tenant of the notice required by Section 18.3.1, above, such lienholder or ground lessor, respectively, shall be treated as having
assumed Landlord's obligations under this Lease only upon such lienholder's foreclosure of any such mortgage, trust deed or other encumbrance, or acceptance of a deed in lieu thereof, and taking of
possession of the Building or the Project or applicable portion thereof, or such ground lessor's termination of any such ground lease or underlying leases and assumption of Landlord's position
hereunder, as the case may be. In no event shall such lienholder, ground lessor or any other successor to Landlord's interest in this Lease, as the case may be, be liable for any security deposit paid
by Tenant to Landlord, unless and until such lienholder, ground lessor or other such successor, respectively, actually has been credited with or has received for its own account as landlord the amount
of such security deposit or any portion thereof (in which event the liability of such lienholder, ground lessor or other such successor, as the case may be, shall be limited to the amount actually
credited or received). 


        18.3.3    In
no event shall the acquisition of title to the Building and the land upon which the Building is located or the Project or any part thereof which includes the
Premises by a purchaser which, simultaneously therewith, leases back to the seller thereof the entire Building or the land upon which the Building is located or the Project or the entirety of that
part thereof acquired by such purchaser, as the case may be, be treated as an assumption, by operation of law or otherwise, of Landlord's obligations under this Lease, but Tenant shall look solely to
such seller-lessee, or to the successors to or assigns of such seller-lessee's estate, for performance of Landlord's obligations under this Lease. In any such event, this Lease shall be subject and
subordinate to the lease to such seller-lessee, and Tenant covenants and agrees in the event the lease to such seller-lessee is terminated to attorn, without any deductions or set-offs
whatsoever, to such purchaser-lessor, if so requested to do so by such purchaser-lessor, and to recognize such purchaser-lessor as the lessor under this Lease, provided such purchaser-lessor shall
agree to accept this Lease and not disturb Tenant's occupancy, so long as Tenant timely pays the rent and observes and performs the terms, covenants and conditions of this Lease to be observed and
performed by Tenant. For all purposes, such seller-lessee, or the successors to or assigns of such seller-lessee's estate, shall be the lessor under this Lease unless and until such seller-lessee's
position shall have been assumed by such purchaser-lessor. 



ARTICLE 19

  
  DEFAULTS; REMEDIES  


        19.1    Events of Default.    The occurrence of any of the following shall constitute a default of this Lease by
Tenant: 



        19.1.1    Any
failure by Tenant to pay any Rent or any other charge required to be paid under this Lease, or any part thereof, when due; provided, however, notwithstanding
anything to the contrary set forth in this Section 19.1.1, Tenant's failure to pay any Rent or any other charge required to be paid under this Lease, or any part thereof, when due shall
constitute a default of this Lease by Tenant only if such failure is not cured within five (5) days after said amount is due, provided that Tenant theretofore shall not have so failed to pay
any Rent or any other charge within five (5) days after said amount is due on two (2) occasions during any given Lease Year, in which event Tenant thereafter shall not be entitled to
such five (5) day period; or 


        19.1.2    Except
where a specific time period is otherwise set forth for Tenant's performance in this Lease, in which event the failure to perform by Tenant within such time
period shall be a default by Tenant under this Section 19.1.2, any failure by Tenant to observe or perform any other provision, covenant or condition of this Lease to be observed or performed
by Tenant where such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant; provided that if the nature of such default is such that the same cannot
reasonably be cured within 



30





 




a
thirty (30) day period, Tenant shall not be deemed to be in default if it diligently commences such cure within such period and thereafter diligently proceeds to rectify and cure such
default; or 


        19.1.3    Abandonment
of all or a substantial portion of the Premises by Tenant; or 


        19.1.4    The
failure by Tenant to observe or perform according to the provisions of Articles 5, 10, 14, 17 or 18 of this Lease or the failure by Tenant to observe or perform
any other provision, covenant or condition of this Lease which failure, because of the character of such provision, covenant or condition, would immediately jeopardize Landlord's interest, where such
failure continues for more than two (2) business days after notice from Landlord; or 



        19.1.5    Tenant's
failure to occupy the Premises within thirty (30) business days after the Lease Commencement Date. 




        The
notice periods provided in this Section 19.1 are in lieu of, and not in addition to, any notice periods provided by law. 


        19.2    Remedies Upon Default.    Upon the occurrence of any event of default by Tenant, Landlord shall have, in
addition to any other remedies available to Landlord at law or in equity (all of which remedies shall be distinct, separate and cumulative), the option to pursue any one or more of the following
remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever. 



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



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


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



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


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



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




        The
term "rent" as used in this Section 19.2 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether
to Landlord or to others. As used in Paragraphs 19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by allowing interest at the rate set forth in Article 25 of
this Lease, but in no case greater than the maximum amount of such interest permitted by law. As used in Paragraph 19.2.1(iii) above, the "worth at the time of award" shall be computed by
discounting 



31





 

such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). 


        19.2.2    Landlord
shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's breach and abandonment and
recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any
default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due. 


        19.2.3    Landlord
shall at all times have the rights and remedies (which shall be cumulative with each other and cumulative and in addition to those rights and remedies
available under Sections 19.2.1 and 19.2.2, above, or any law or other provision of this Lease), without prior demand or notice except as required by applicable law, to seek any declaratory,
injunctive or other equitable relief, and specifically enforce this Lease, or restrain or enjoin a violation or breach of any provision hereof. 




        19.3    Subleases of Tenant.    If Landlord elects to terminate this Lease on account of any default by Tenant, as set
forth in this Article 19, then Landlord shall have the right, at Landlord's option in its sole discretion, (i) to terminate any and all assignments, subleases, licenses, concessions or
other consensual arrangements for possession entered into by Tenant and affecting the Premises, in which event Landlord shall have the right to repossess such affected portions of the Premises by any
lawful means, or (ii) to succeed to Tenant's interest in any or all such assignments, subleases, licenses, concessions or arrangements, in which event Landlord may require any assignees,
sublessees, licensees or other parties thereunder to attorn to and recognize Landlord as its assignor, sublessor, licensor, concessionaire or transferor thereunder. In the event of Landlord's election
to succeed to Tenant's interest in any such assignments, subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right to
or interest in the rent or other consideration receivable thereunder. 


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


ARTICLE 20

  
  COVENANT OF QUIET ENJOYMENT  


        Landlord covenants that Tenant, on paying the Rent, charges for services and other payments herein reserved and on keeping, observing and performing all the other
terms, covenants, conditions, provisions and agreements herein contained on the part of Tenant to be kept, observed and performed, shall, during the Lease Term, peaceably and quietly have, hold and
enjoy the Premises subject to the terms, covenants, conditions, provisions and agreements hereof without interference by any persons lawfully claiming by or through Landlord. The foregoing covenant is
in lieu of any other covenant express or implied. 


ARTICLE 21

  
  SECURITY DEPOSIT—LETTER OF CREDIT  


        21.1    Security Deposit.    Concurrent with Tenant's execution of this Lease, Tenant shall deposit with Landlord a
security deposit (the "Security Deposit") in the amount set forth in Section 8 of the 


32





 

Summary,
as security for the faithful performance by Tenant of all of its obligations under this Lease. If Tenant defaults with respect to any provisions of this Lease, including, but not limited to,
the provisions relating to the payment of Rent, the removal of property and the repair of resultant damage, Landlord may, without notice to Tenant, but shall not be required to apply all or any part
of the Security Deposit for the payment of any Rent or any other sum in default and Tenant shall, upon demand therefor, restore the Security Deposit to its original amount. Any unapplied portion of
the Security Deposit shall be returned to Tenant, or, at Landlord's option, to the last assignee of Tenant's interest hereunder, within sixty (60) days following the expiration of the Lease
Term. Tenant shall not be entitled to any interest on the Security Deposit and Landlord shall have the right to commingle the Security Deposit with Landlord's other funds. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, or any successor statute. 


        21.2    Letter of Credit.    



        21.2.1    Delivery of Letter of Credit.    Tenant shall deliver to Landlord concurrent with Tenant's execution of this
Lease, an unconditional, clean, irrevocable letter of credit (the "L-C") in the initial amount of $157,500.75, which L-C shall be issued by a money-center bank (a bank which
accepts deposits, maintains accounts, has a local San Francisco office which will negotiate a letter of credit, and whose deposits are insured by the FDIC) reasonably acceptable to Landlord, and which
L-C shall be in a form and content as set forth on Exhibit G, or otherwise reasonably acceptable to Landlord. Tenant shall pay all expenses, points and/or fees incurred by Tenant in
obtaining the L-C. 


        21.2.2    Conditional Reduction of L-C Amount.    In the event Tenant maintains the "Minimum Financial
Requirements," as that term is defined below, for four (4) consecutive financial quarters, the L-C Amount shall be reduced by an amount equal to the product of
(i) Thirty-One Thousand Five Hundred and No/100 Dollars ($31,500.00); and (ii) the number of Lease Years which have elapsed during the Lease Term. For the purposes of this
Lease, the "Minimum Financial Requirements" means (A) Tenant maintains a net worth, as defined by applicable law, of no less than Ten Million Dollars ($10,000,000.00), and (B) Tenant
provides to Landlord financial statements and an opinion of a reputable certified public accounting firm, reasonably satisfactory to Landlord, evidencing that Tenant maintains a positive "EBITDA". 


        21.2.3    Application of Letter of Credit.    The L-C shall be held by Landlord as security for the
faithful performance by Tenant of all the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the Lease Term. The L-C shall not be mortgaged, assigned
or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant defaults with respect to any provisions of this Lease, including, but not limited to, the
provisions relating to the payment of Rent, or if Tenant fails to renew the L-C at least thirty (30) days before its expiration, Landlord may, but shall not be required to, draw
upon all or any portion of the L-C for payment of any Rent or any other sum in default, or for the payment of any amount that Landlord may reasonably spend or may become obligated to spend
by reason of Tenant's default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant's default. The use, application or retention of the L-C,
or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by law, it being intended that Landlord shall not first be required
to proceed against the L-C and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Any amount of the L-C which is drawn upon by
Landlord, but is not used or applied by Landlord, shall be held by Landlord and deemed a security deposit (the "L-C Security Deposit"). If any portion of the L-C is drawn upon,
Tenant shall, within ten (10) business days after written demand therefor, either (i) deposit cash with Landlord (which cash shall be applied by Landlord to the L-C Security
Deposit) in an amount sufficient to cause the sum of the L-C Security Deposit and the amount of the remaining L-C to be equivalent to the amount of the 



33





 




L-C
then required under this Lease or (ii) reinstate the L-C to the amount then required under this Lease, and if any portion of the L-C Security Deposit is
used or applied, Tenant shall, within ten (10) business days after written demand therefor, deposit cash with Landlord (which cash shall be applied by Landlord to the L-C Security
Deposit) in an amount sufficient to restore the L-C Security Deposit to the amount then required under this Lease, and Tenant's failure to do so shall be a default under this Lease. Tenant
acknowledges that Landlord has the right to transfer or mortgage its interest in the Real Property and the Building and in this Lease and Tenant agrees that in the event of any such transfer or
mortgage, Landlord shall have the right to transfer or assign the L-C Security Deposit and/or the L-C to the transferee or mortgagee, and in the event of such transfer, Tenant
shall look solely to such transferee or mortgagee for the return of the L-C Security Deposit and/or the L-C. Tenant shall, within ten (10) business days of request by
Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm Landlord's transfer or assignment of the L-C Security Deposit
and/or the L-C to such transferee or mortgagee. 



ARTICLE 22

  
  INTENTIONALLY DELETED  


ARTICLE 23

   
  SIGNS  


        23.1    Full Floors.    Subject to Landlord's prior written approval, in its sole discretion, and provided all signs
are in keeping with the quality, design and style of the Building and Project, Tenant, if the Premises comprise an entire floor of the Building, at its sole cost and expense, may install
identification signage anywhere in the Premises including in the elevator lobby of the Premises, provided that such signs must not be visible from the exterior of the Building. 


        23.2    Multi-Tenant Floors.    If other tenants occupy space on the floor on which the Premises is located, Tenant's
identifying signage shall be provided by Landlord, at Tenant's cost, and such signage shall be comparable to that used by Landlord for other similar floors in the Building and shall comply with
Landlord's then-current Building standard signage program. 



        23.3    Prohibited Signage and Other Items.    Any signs, notices, logos, pictures, names or advertisements which are
installed and that have not been separately approved by Landlord may be removed without notice by Landlord at the sole expense of Tenant. Tenant may not install any signs on the exterior or roof of
the Project or the Common Areas. Any signs, window coverings, or blinds (even if the same are located behind the Landlord-approved window coverings for the Building), or other items visible from the
exterior of the Premises or Building, shall be subject to the prior approval of Landlord, in its sole discretion. 



        23.4    Building Directory.    Tenant shall be entitled to space on the directory located in the Building for the
display of Tenant's name and employees. 


34








   ARTICLE 24

   
  COMPLIANCE WITH LAW  


        Tenant shall not do anything or suffer anything to be done in or about the Premises or the Project which will in any way conflict with any law, statute, ordinance
or other governmental rule, regulation or requirement now in force or which may hereafter be enacted or promulgated (collectively, "Applicable Laws"). At its sole cost and expense, Tenant shall
promptly comply with all such Applicable Laws which relate to (i) Tenant's use of the Premises for non-general office use, (ii) the Alterations or Tenant Improvements in the
Premises, or (iii) the "Base Building," as that term is defined in Section 1.1 of the Tenant Work Letter, but, as to the Base Building, only to the extent such obligations are triggered
by Tenant's Alterations, the Tenant Improvements, or Tenant's use of the Premises for non-general office use. Should any standard or regulation now or hereafter be imposed on Landlord or
Tenant by a state, federal or local governmental body charged with the establishment, regulation and enforcement of occupational, health or safety standards for employers, employees, landlords or
tenants, then Tenant agrees, at its sole cost and expense, to comply promptly with such standards or regulations and to cooperate with Landlord, including, without limitation, by taking such actions
as Landlord may reasonably require, in Landlord's efforts to comply with such standards or regulations. Tenant shall be responsible, at its sole cost and expense, to make all alterations to the
Premises as are required to comply with the governmental rules, regulations, requirements or standards described in this Article 24. The judgment of any court of competent jurisdiction or the
admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of said governmental measures, shall be conclusive of that fact as between
Landlord and Tenant. Tenant shall promptly pay all fines, penalties and damages that may arise out of or be imposed because of its failure to comply with the provisions of this Article 24.
Landlord shall comply with all Applicable Laws relating to the Base Building, provided that compliance with such Applicable Laws is not the responsibility of Tenant under this Lease, and provided
further that Landlord's failure to comply therewith would prohibit Tenant from obtaining or maintaining a certificate of occupancy for the Premises, or would unreasonably and materially affect the
safety of Tenant's employees or create a significant health hazard for Tenant's employees. Landlord shall be permitted to include in Operating Expenses any costs or expenses incurred by Landlord under
this Article 24, but only to the extent consistent with the terms of Section 4.2.7 above. 


ARTICLE 25

   
  LATE CHARGES  


        If any installment of Rent or any other sum due from Tenant shall not be received by Landlord or Landlord's designee (i) within five (5) days after
said amount is due, or (ii) upon the date said amount is due if any installment of Rent or other sum due from Tenant has not been received by Landlord or Landlord's designee within five
(5) days after the date due on two (2) or more occasions during any given Lease Year, then Tenant shall pay to Landlord a late charge equal to six percent (6%) of the overdue amount plus
any attorneys' fees incurred by Landlord by reason of Tenant's failure to pay Rent and/or other charges when due hereunder. The late charge shall be deemed Additional Rent and the right to require it
shall be in addition to all of Landlord's other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord's remedies in any manner. In addition
to the late charge described above, any Rent or other amounts owing hereunder which are not paid (i) within five (5) days after the date they are due, or (ii) upon the date they
are due if any Rent or other amounts owing hereunder have not been received by Landlord or Landlord's designee within five (5) days after the date due on two (2) or more occasions during
any given Lease Year, shall bear interest from the date when due until paid at a rate per annum equal to the lesser of (i) the annual "Bank Prime Loan" rate cited in the Federal Reserve
Statistical Release Publication G.13(415), published on the first Tuesday of each calendar month (or such other comparable index as 


35





 



Landlord
and Tenant shall reasonably agree upon if such rate ceases to be published) plus four (4) percentage points, and (ii) the highest rate permitted by applicable law. 


ARTICLE 26

   
  LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT  


        26.1    Landlord's Cure.    All covenants and agreements to be kept or performed by Tenant under this Lease shall be
performed by Tenant at Tenant's sole cost and expense and without any reduction of Rent, except to the extent, if any, otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the time allowed under Section 19.1.2, above, unless a specific time period is otherwise stated in this Lease, Landlord
may, but shall not be obligated to, make any such payment or perform any such act on Tenant's part without waiving its rights based upon any default of Tenant and without releasing Tenant from any
obligations hereunder. 


        26.2    Tenant's Reimbursement.    Except as may be specifically provided to the contrary in this Lease, Tenant shall
pay to Landlord the following sums (which sums shall bear interest from the date accrued by Landlord until paid by Tenant at a rate per annum, equal to interest at the rate set forth in
Article 25
of this Lease, but in no case greater than the maximum amount of such interest permitted by law), upon delivery by Landlord to Tenant of statements therefor: (i) sums equal to expenditures
reasonably made and obligations incurred by Landlord in connection with the remedying by Landlord of Tenant's defaults pursuant to the provisions of Section 26.1; (ii) sums equal to all
losses, costs, liabilities, damages and expenses referred to in Article 10 of this Lease, for which Tenant is responsible; and (iii) sums equal to all expenditures made and obligations
incurred by Landlord in collecting or attempting to collect the Rent or in enforcing or attempting to enforce any rights of Landlord under this Lease or pursuant to law, including, without limitation,
all legal fees and other amounts so expended. Tenant's obligations under this Section 26.2 shall survive the expiration or sooner termination of the Lease Term. 


ARTICLE 27

   
  ENTRY BY LANDLORD  


        Landlord reserves the right at all reasonable times and upon reasonable notice to Tenant (which notice, notwithstanding anything to the contrary contained in
Article 28 of this Lease, may be oral, and which notice shall not be required in the case of an emergency) to enter the Premises to (i) inspect them; (ii) show the Premises to
prospective purchasers or tenants, or to current or prospective mortgagees, ground or underlying lessors or insurers; (iii) post notices of nonresponsibility; or (iv) alter, improve or
repair the Premises or the Building, or for structural alterations, repairs or improvements to the Building or the Building's systems and equipment. Notwithstanding anything to the contrary contained
in this Article 27, Landlord may enter the Premises at any time to (A) perform services required of Landlord, including janitorial service; (B) take possession due to any breach
of this lease in the manner provided herein; and (C) perform any covenants of the Tenant which Tenant fails to perform. Landlord may make any such entries without the abatement of Rent and may
take such reasonable steps as required to accomplish the stated purposes. Tenant hereby waives any claims for damages or for any injuries or inconvenience to or interference with Tenant's business,
lost profits, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. For each of the above purposes, Landlord shall at all times have a key with which to
unlock all the doors in the Premises, excluding Tenant's vaults, safes and special security areas designated in advance by Tenant. In an emergency, Landlord shall have the right to use any means that
Landlord may deem proper to open the doors in and to the Premises. Any entry into the Premises by Landlord in the manner hereinbefore described shall not be deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from any portion of the Premises. No provision of this 


36





 



Lease
shall be construed as obligating Landlord to perform any repairs, alterations or decorations except as otherwise expressly agreed to be performed by Landlord herein. Landlord shall use
commercially reasonable efforts to minimize interference with Tenant's use of, and access to, the Premises in connection with any entry made pursuant to this Article 27. 


ARTICLE 28

   
  NOTICES  


        All notices, demands, statements, designations, approvals or other communications (collectively, "Notices") given or required to be given by either party to the
other hereunder or by law shall be in writing, shall be (A) sent by United States certified or registered mail, postage prepaid, return receipt requested ("Mail"), (B) transmitted by
telecopy, if such telecopy is promptly followed by a Notice sent by Mail, (C) delivered by a nationally recognized overnight courier, or (D) delivered personally. Any Notice shall be
sent, transmitted, or delivered, as the case may be, to Tenant at the appropriate address set forth in Section 9 of the Summary, or to such other place as Tenant may from time to time designate
in a Notice to Landlord, or to Landlord at the addresses set forth below, or to such other places as Landlord may from time to time designate in a Notice to Tenant. Any Notice will be deemed given
(i) three (3) days after the date it is posted if sent by Mail, (ii) the date the telecopy is transmitted, (iii) the date the overnight courier delivery is made, or
(iv) the date personal delivery is made. Any Notice given by an attorney on behalf of Landlord or by Landlord's managing agent shall be considered as given by Landlord and shall be fully
effective. As of the date of this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as the case may be, to the following addresses: 



Boston
Properties Limited Partnership

Four Embarcadero Center

Lobby Level, Suite One

San Francisco, California 94111

Attention: Mr. Robert Pester 


and



Boston
Properties, Inc.

Prudential Center

800 Boylston Street

Boston, Massachusetts 02199-8001

Attention: General Counsel 



and 


Allen,
Matkins, Leck, Gamble & Mallory

1999 Avenue of the Stars

Suite 1800

Los Angeles, California 90067

Attention: Anton N. Natsis, Esq. 



ARTICLE 29

  
  MISCELLANEOUS PROVISIONS  


        29.1    Terms; Captions.    The words "Landlord" and "Tenant" as used herein shall include the plural as well as the
singular. The necessary grammatical changes required to make the provisions hereof apply either to corporations or partnerships or individuals, men or women, as the case may require, shall in all
cases be assumed as though in each case fully expressed. The captions of Articles 


37





 

and
Sections are for convenience only and shall not be deemed to limit, construe, affect or alter the meaning of such Articles and Sections. 


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


        29.3    No Light, Air or View Rights.    No rights to any view or to light or air over any property, whether belonging
to Landlord or any other person, are granted to Tenant by this Lease. Under no circumstances whatsoever at any time during the Lease Term shall any temporary darkening of any windows of the Premises
or any temporary obstruction of the light or view therefrom by reason of any repairs, improvements, maintenance or cleaning in or about the Project, or any diminution, impairment or obstruction
(whether partial or total) of light, air or view by any structure which may be erected on any land comprising a part of, or located adjacent to or otherwise in the path of light, air or view to, the
Project, in any way impose any liability upon Landlord or in any way reduce or diminish Tenant's obligations under this Lease. 


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


        29.5    Transfer of Landlord's Interest.    Tenant acknowledges that Landlord has the right to transfer all or any
portion of its interest in the Project or Building and in this Lease, and Tenant agrees that in the event of any such transfer, Landlord shall automatically be released from all liability under this
Lease accruing thereafter and Tenant agrees to look solely to such transferee for the performance of Landlord's obligations hereunder after the date of transfer and such transferee shall be deemed to
have fully assumed and be liable for all obligations of this Lease to be performed by Landlord, including the return of any Security Deposit, provided Landlord has transferred the Security Deposit to
the transferee, and Tenant shall attorn to such transferee. 


        29.6    Prohibition Against Recording.    Except as provided in Section 29.4 of this Lease, neither this Lease,
nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant. 



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


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



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


38





 



        29.10    Time of Essence.    Time is of the essence with respect to the performance of every provision of this Lease
in which time of performance is a factor, including, without limitation, the giving of any Notice required to be given under this Lease or by law, the time periods for giving any such Notice and the
taking of any action with respect to any such Notice. 


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


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


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


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


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


39





 



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



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


        29.18    Tenant Parking.    Subject to availability, Tenant may rent, on a month-to-month
basis, non-transferable parking passes for unreserved parking spaces in the Project parking facility directly from the Project parking facility operator. Tenant shall pay to the parking
facility operator or, at Landlord's option, directly to Landlord for automobile parking passes on a monthly basis the prevailing rate charged from time to time at the location of such parking passes.
In addition, Tenant shall be responsible for the full amount of any taxes imposed by any governmental authority in connection with the renting of such parking passes by Tenant or the use of the
parking facility by Tenant. Tenant shall supply Landlord with an identification roster listing, for each parking pass, the name of the employee and the make, color and registration number of the
vehicle to which such parking pass has been assigned, and shall provide a revised roster to Landlord monthly indicating changes thereto. Tenant's continued right to use the parking passes is
conditioned upon Tenant abiding by all rules and regulations which are prescribed from time to time for the orderly operation and use of the parking facility where the parking passes are located,
including any sticker or other identification system established by Landlord, Tenant's cooperation in seeing that Tenant's employees and visitors also comply with such rules and regulations and Tenant
not being in default under this Lease. Landlord specifically reserves the right to change the size, configuration, design, layout and all other aspects of the Project parking facility at any time and
Tenant acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without any abatement of Rent under this Lease, from time to time, close-off or restrict
access to the Project parking facility for purposes of permitting or facilitating any such construction, alteration or improvements. 


        Landlord
may delegate its responsibilities hereunder to a parking operator in which case such parking operator shall have all the rights of control attributed hereby to the Landlord. The
parking passes rented by Tenant pursuant to this Section 29.18 are provided to Tenant solely for use by Tenant's own personnel and such passes may not be transferred, assigned, subleased or
otherwise alienated by Tenant without Landlord's prior approval. Tenant may validate visitor parking by such method or methods as the Landlord may establish, at the validation rate from time to time
generally applicable to visitor parking. 


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


        29.20    Authority.    If Tenant is a corporation, trust or partnership, each individual executing this Lease on
behalf of Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in California and that Tenant has full right and authority to execute and
deliver this Lease and that each person signing on behalf of Tenant is authorized to do so. In such event, Tenant shall, within ten (10) days after execution of this Lease, deliver to Landlord
satisfactory evidence of such authority and, if a corporation, upon demand by Landlord, also deliver to Landlord 


40





 



satisfactory
evidence of (i) good standing in Tenant's state of incorporation and (ii) qualification to do business in California. 


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


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


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


        29.24    Brokers.    Landlord and Tenant hereby warrant to each other that they have had no dealings with any real
estate broker or agent in connection with the negotiation of this Lease, excepting only the real estate brokers or agents specified in Section 11 of the Summary (the "Brokers"), and that they
know of no other real estate broker or agent who is entitled to a commission in connection with this Lease. Each party agrees to indemnify and defend the other party against and hold the other party
harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable attorneys' fees) with respect to any leasing commission
or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than the Brokers, occurring by, through, or under the indemnifying party. 


        29.25    Independent Covenants.    This Lease shall be construed as though the covenants herein between Landlord and
Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute to the contrary and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder at Landlord's expense or to any setoff of the Rent or other amounts owing hereunder against Landlord. 


        29.26    Project or Building Name and Signage.    Landlord shall have the right at any time to change the name of the
Project or Building and to install, affix and maintain any and all signs on the exterior and on the interior of the Project or Building as Landlord may, in Landlord's sole discretion, desire. Tenant
shall not use the words "Gateway Center" or the name of the Project or Building or use pictures or illustrations of the Project or Building in advertising or other publicity or for any purpose 


41





 



other
than as the address of the business to be conducted by Tenant in the Premises, without the prior written consent of Landlord. 


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



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


        29.29    Development of the Project.    



        29.29.1    Subdivision.    Landlord reserves the right to further subdivide all or a portion of the Project. Tenant
agrees to execute and deliver, upon demand by Landlord and in the form requested by
Landlord, any additional documents needed to conform this Lease to the circumstances resulting from such subdivision. 


        29.29.2    The Other Improvements.    If portions of the Project or property adjacent to the Project (collectively,
the "Other Improvements") are 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, (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 Direct Expenses 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. 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. 


        29.29.3    Construction of Project and Other Improvements.    Tenant acknowledges that portions of the Project and/or
the Other Improvements may be under construction following Tenant's occupancy of the Premises, and that such construction may result in levels of noise, dust, odor, obstruction of access, etc. which
are in excess of that present in a fully constructed project. Tenant hereby waives any and all rent offsets or claims of constructive eviction which may arise in connection with such construction. 




        29.30    Building Renovations.    It is specifically understood and agreed that Landlord has no obligation and has
made no promises to alter, remodel, improve, renovate, repair or decorate the Premises, Building, or any part thereof and that no representations respecting the condition of the Premises or the
Building have been made by Landlord to Tenant except as specifically set forth herein or in the Tenant Work Letter. However, Tenant hereby acknowledges that Landlord is currently renovating or may
during the Lease Term renovate, improve, alter, or modify (collectively, the "Renovations") the Project, the Building and/or the Premises. Tenant hereby agrees that such Renovations shall in no way
constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall have no responsibility and shall not be liable to Tenant for any injury to or interference with
Tenant's business arising from the Renovations, nor shall Tenant be entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of the Premises or of Tenant's
personal property or improvements resulting from the Renovations, or for any inconvenience or annoyance occasioned by such Renovations. 


        29.31    No Violation.    Tenant hereby warrants and represents that neither its execution of nor performance under
this Lease shall cause Tenant to be in violation of any agreement, instrument, 


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contract,
law, rule or regulation by which Tenant is bound, and Tenant shall protect, defend, indemnify and hold Landlord harmless against any claims, demands, losses, damages, liabilities, costs and
expenses, including, without limitation, reasonable attorneys' fees and costs, arising from Tenant's breach of this warranty and representation. 


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


        29.33    No Discrimination.    There shall be no discrimination against, or segregation of, any person or persons on
account of sex, marital status, race, color, religion, creed, national origin or ancestry in the Transfer of the Premises, or any portion thereof, nor shall the Tenant itself, or any person claiming
under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees of the Premises, or any portion thereof. 


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



	 	 	"Landlord"
	

 	
 	

GATEWAY CENTER, LLC

a California limited liability company
	

 	
 	

By:	
 	

/s/  BOB PESTER      

	 	 	 	 	Its:	 	Senior Vice President and Regional Manager

	

 	
 	

"Tenant"
	

 	
 	

CABER CORPORATION

a Delaware corporation
	

 	
 	

By:	
 	

/s/  JOHN P. MCLAUGHLIN      

	 	 	Name:	 	John P. McLaughlin

	 	 	Title:	 	President and Chief Executive Officer

	 	 	Date:	 	3/17/00





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Exhibit 10.4