exv10w9



 






EXHIBIT 10.9




STANDARD OFFICE LEASE FOR 88 KEARNY

BY AND BETWEEN




TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA,

for the benefit of its Separate Real Estate Account,




AS LANDLORD,




AND




THOMAS WEISEL PARTNERS GROUP, LLC,

a Delaware limited liability company




AS TENANT




SUITES 200, 300, 400 and 500




88 KEARNY STREET, SAN FRANCISCO, CALIFORNIA 94108





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1
	 	 	 	 
	 
	 	 	 	 
	BASIC LEASE PROVISIONS 
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 2
	 	 	 	 
	 
	 	 	 	 
	TERM/PREMISES 
	 	 	3	 
	 
	 	 	 	 
	ARTICLE 3
	 	 	 	 
	 
	 	 	 	 
	RENTAL 
	 	 	4	 
	(a) Basic Rental 
	 	 	4	 
	(b) Increase in Direct Costs 
	 	 	4	 
	(c) Definitions 
	 	 	4	 
	(d) Determination of Payment 
	 	 	7	 
	 
	 	 	 	 
	ARTICLE 4
	 	 	 	 
	 
	 	 	 	 
	SECURITY DEPOSIT AND LETTER OF CREDIT 
	 	 	10	 
	 
	 	 	 	 
	ARTICLE 5
	 	 	 	 
	 
	 	 	 	 
	HOLDING OVER 
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 6
	 	 	 	 
	 
	 	 	 	 
	PERSONAL PROPERTY TAXES 
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 7
	 	 	 	 
	 
	 	 	 	 
	USE 
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 8
	 	 	 	 
	 
	 	 	 	 
	CONDITION OF PREMISES 
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 9
	 	 	 	 
	 
	 	 	 	 
	REPAIRS AND ALTERATIONS 
	 	 	17	 






(i)









 






	 	 	 	 	 
	 	 	Page	 
	ARTICLE 10
	 	 	 	 
	 
	 	 	 	 
	LIENS 
	 	 	19	 
	 
	 	 	 	 
	ARTICLE 11
	 	 	 	 
	 
	 	 	 	 
	PROJECT SERVICES 
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 12
	 	 	 	 
	 
	 	 	 	 
	RIGHTS OF LANDLORD 
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 13
	 	 	 	 
	 
	 	 	 	 
	INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY 
	 	 	22	 
	(a) Indemnity 
	 	 	22	 
	 
	 	 	 	 
	(b) Exemption of Landlord from Liability 
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 14
	 	 	 	 
	 
	 	 	 	 
	INSURANCE 
	 	 	23	 
	(a) Tenant’s Insurance 
	 	 	23	 
	(b) Form of Policies 
	 	 	24	 
	(c) Landlord’s Insurance 
	 	 	24	 
	(d) Waiver of Subrogation 
	 	 	25	 
	(e) Compliance with Law 
	 	 	25	 
	 
	 	 	 	 
	ARTICLE 15
	 	 	 	 
	 
	 	 	 	 
	ASSIGNMENT AND SUBLETTING 
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 16
	 	 	 	 
	 
	 	 	 	 
	DAMAGE OR DESTRUCTION 
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 17
	 	 	 	 
	 
	 	 	 	 
	SUBORDINATION 
	 	 	30	 
	 
	 	 	 	 
	ARTICLE 18
	 	 	 	 
	 
	 	 	 	 
	EMINENT DOMAIN 
	 	 	31	 






(ii)









 






	 	 	 	 	 
	 	 	Page	 
	ARTICLE 19
	 	 	 	 
	 
	 	 	 	 
	DEFAULT 
	 	 	31	 
	 
	 	 	 	 
	ARTICLE 20
	 	 	 	 
	 
	 	 	 	 
	REMEDIES 
	 	 	33	 
	 
	 	 	 	 
	ARTICLE 21
	 	 	 	 
	 
	 	 	 	 
	TRANSFER OF LANDLORD’S INTEREST 
	 	 	35	 
	 
	 	 	 	 
	ARTICLE 22
	 	 	 	 
	 
	 	 	 	 
	BROKER 
	 	 	35	 
	 
	 	 	 	 
	ARTICLE 23
	 	 	 	 
	 
	 	 	 	 
	PARKING 
	 	 	36	 
	 
	 	 	 	 
	ARTICLE 24
	 	 	 	 
	 
	 	 	 	 
	WAIVER 
	 	 	36	 
	 
	 	 	 	 
	ARTICLE 25
	 	 	 	 
	 
	 	 	 	 
	ESTOPPEL CERTIFICATE 
	 	 	37	 
	 
	 	 	 	 
	ARTICLE 26
	 	 	 	 
	 
	 	 	 	 
	LIABILITY OF LANDLORD 
	 	 	38	 
	 
	 	 	 	 
	ARTICLE 27
	 	 	 	 
	 
	 	 	 	 
	INABILITY TO PERFORM 
	 	 	38	 
	 
	 	 	 	 
	ARTICLE 28
	 	 	 	 
	 
	 	 	 	 
	HAZARDOUS WASTE 
	 	 	39	 
	 
	 	 	 	 
	ARTICLE 29
	 	 	 	 
	 
	 	 	 	 
	SURRENDER OF PREMISES; REMOVAL OF PROPERTY 
	 	 	41	 






(iii)









 






	 	 	 	 	 
	 	 	Page	 
	ARTICLE 30
	 	 	 	 
	 
	 	 	 	 
	EXISTING OCCUPANCY 
	 	 	42	 
	(a) Delays in Delivery 
	 	 	42	 
	(b) Partial Tenders 
	 	 	43	 
	 
	 	 	 	 
	ARTICLE 31
	 	 	 	 
	 
	 	 	 	 
	OPTION TO RENEW 
	 	 	43	 
	 
	 	 	 	 
	ARTICLE 32
	 	 	 	 
	 
	 	 	 	 
	RIGHT OF FIRST OFFER
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	44	 
	ARTICLE 33
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS 
	 	 	45	 
	(a) Severability; Entire Agreement 
	 	 	46	 
	(b) Attorneys’ Fees; Waiver of Jury Trial 
	 	 	46	 
	(c) Time of Essence 
	 	 	47	 
	(d) Headings; Joint and Several 
	 	 	47	 
	(e) Reserved Area 
	 	 	47	 
	(f) NO OPTION 
	 	 	47	 
	(g) Use of Project Name; Improvements 
	 	 	47	 
	(h) Rules and Regulations
	 	 	48	 
	(i) Quiet Possession
	 	 	48	 
	(j) Rent
	 	 	48	 
	(k) Successors and Assigns
	 	 	48	 
	(l) Notices
	 	 	48	 
	(m) Right of Landlord to Perform
	 	 	49	 
	(n) Access, Changes in Project, Facilities, Name
	 	 	50	 
	(o) Signing Authority
	 	 	50	 
	(p) Identification of Tenant
	 	 	51	 
	(q) Survival of Obligations
	 	 	52	 
	(r) Confidentiality
	 	 	52	 
	(s) Governing Law
	 	 	53	 
	(u) Exhibits and Addendum
	 	 	53	 
	(v) Tenant Signage
	 	 	53	 






(iv)









 






	 	 	 
	Exhibit “A”

	 	Floor Plans
	Exhibit “B”

	 	Rules and Regulations
	Exhibit “C”

	 	Notice of Lease Term Dates and Tenant’s Proportionate Share
	Exhibit “D”

	 	Tenant Work Letter







(v)









 








INDEX OF DEFINED TERMS




	 	 	 	 	 
	DEFINED TERMS	 	PAGE	 
	Additional Rent 
	 	 	4	 
	Alterations
	 	 	18	 
	Approved Working Drawings
	 	Exhibit D
	Architect
	 	Exhibit D
	Base Year
	 	 	4	 
	Base, Shell and Core
	 	Exhibit D
	Basic Rental 
	 	 	2	 
	Brokers 
	 	 	2	 
	Code
	 	Exhibit D
	Commencement Date 
	 	 	1	 
	Construction Drawings 
	 	Exhibit D
	Contractor 
	 	Exhibit D
	Cost Proposal
	 	Exhibit D
	Cost Proposal Delivery Date
	 	Exhibit D
	Direct Costs
	 	 	4	 
	Engineers
	 	Exhibit D
	Estimate 
	 	 	8	 
	Estimate Statement 
	 	 	8	 
	Estimated Excess 
	 	 	8	 
	Event of Default
	 	 	31	 
	Excess 
	 	 	8	 
	Expiration Date 
	 	 	1	 
	Final Space Plan
	 	Exhibit D
	Final Working Drawings
	 	Exhibit D
	First Month’s Rent 
	 	 	3	 
	Force Majeure
	 	 	38	 
	Hazardous Material
	 	 	40	 
	Improvement Allowance
	 	Exhibit D
	Improvement Allowance Items
	 	Exhibit D
	Improvements
	 	Exhibit D
	Landlord 
	 	 	1	 
	Landlord Supervision Fee
	 	Exhibit D
	Laws
	 	 	41	 
	Lease 
	 	 	1	 
	Lease Year 
	 	 	3	 
	Operating Costs 
	 	 	5	 
	Over-Allowance Amount
	 	Exhibit D
	Partnership Tenant
	 	 	51	 
	Permits
	 	Exhibit D






(vi)









 






	 	 	 	 	 
	DEFINED TERMS	 	PAGE	 
	Permitted Use 
	 	 	2	 
	Premises 
	 	 	1	 
	Project 
	 	 	1	 
	Real Property 
	 	 	5	 
	Representative
	 	 	38	 
	Review Period 
	 	 	9	 
	Security Deposit 
	 	 	2	 
	Specifications
	 	Exhibit D
	Square Footage
	 	 	1	 
	Standard Improvement Package
	 	Exhibit D
	Statement
	 	 	8	 
	Substantial Completion
	 	Exhibit D
	Tax Costs 
	 	 	5	 
	Tenant 
	 	 	1	 
	Tenant Delays
	 	Exhibit D
	Tenant Improvements
	 	 	17	 
	Tenant’s Proportionate Share 
	 	 	2	 
	Term 
	 	 	1	 
	Time Deadlines
	 	Exhibit D
	Transfer 
	 	 	27	 
	Transfer Premium 
	 	 	27	 
	Transferee 
	 	 	27	 







(vii)









 








STANDARD OFFICE LEASE




          This Standard Office Lease (“Lease”) is made and entered into as of June 21, 2000, by and
between TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, for the benefit of its Separate Real
Estate Account (“Landlord”), and THOMAS WEISEL PARTNERS GROUP, LLC, a Delaware limited liability
company (“Tenant”).




          Landlord hereby leases to Tenant and Tenant hereby leases from Landlord (subject to the terms
of Article 30 of this Lease) the premises initially described as Suite Nos. 200, 300, 400
and 500, as designated on the plan attached hereto and incorporated herein as Exhibit “A” (each and
collectively, the “Premises”), of the project (“Project”) now known as 88 Kearny Street, San
Francisco, California 94108, for the Term and upon the terms and conditions hereinafter set forth,
and Landlord and Tenant hereby agree as follows:




ARTICLE 1




BASIC LEASE PROVISIONS




	 	 	 	 	 
	A.

	 	Term:
	 	The period of time beginning with Commencement Date (defined below) and ending 132 months
thereafter.
	 
	 	 	 	 
	 

	 	Commencement Date:
	 	The date which is ninety (90) days after the date on which Landlord tenders possession of any
portion of the Premises to Tenant, pursuant to Article 30, below.
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	The date immediately preceding the eleventh (11th) anniversary of the Commencement Date; provided,
however, that if the Commencement Date is a date other than the first day of a month, the
Expiration Date shall be the last day of the month which is One Hundred Thirty-Two (132) months
after the month in which the Commencement Date falls, unless extended or earlier terminated
pursuant to this Lease.
	 
	 	 	 	 
	B.

	 	Square Footage:
	 	53,954 rentable square feet






 









 






	 	 	 	 	 
	C.

	 	Basic Rental:	 	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Monthly
	 	 	 	 	 	 	 	 	 	 	Basic Rental
	 	 	Annual	 	Monthly	 	Per Rentable
	Lease Year	 	Basic Rental	 	Basic Rental	 	Square Foot
	Commencement Date
through the date which
is 5 years after the
Commencement Date (Lease
Years 1-5)
	 	$	4,046,550.00	 	 	$	337,212.50	 	 	$6.25/rsf
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	The date which is 5
years after the
Commencement Date
through the Expiration
Date (Lease Years 6-11)
	 	$	4,316,320.08	 	 	$	359,693.34	 	 	$6.66666/rsf






	 	 	 	 	 
	D.

	 	Base Year:
	 	 2001
	 
	 	 	 	 
	E.

	 	Tenant’s Proportionate Share:
	 	 23.63% (based on 228,302 rsf in the Project)
	 
	 	 	 	 
	F.

	 	Security Deposit:
	 	 $2,023,275.00, pursuant to Article 4. below.
	 
	 	 	 	 
	G.

	 	Permitted Use:
	 	General office use, and, subject to the terms of Article 7 of this Lease, Tenant shall be
permitted to use a portion of the Premises located on the second floor of the Project as a health
club.
	 
	 	 	 	 
	H.

	 	Broker(s):
	 	Insignia/ESG, Inc. and Montgomery Advisors






- 9 -









 






	 	 	 	 	 
	I.

	 	 	 	First Month’s Rent: The first full month’s rent of $337,212.50 shall be due and
payable by Tenant to Landlord upon Tenant’s execution of this Lease.
	 
	 	 	 	 
	J.

	 	Number of Parking Passes:
	 	Four (4).






ARTICLE 2 




TERM/PREMISES




          The Term of this Lease shall commence on the Commencement Date as set forth in Article
1.A. of the Basic Lease Provisions and shall end on the Expiration Date set forth in
Article l.A. of the Basic Lease Provisions. For purposes of this Lease, the term “Lease
Year” shall mean each consecutive twelve (12) month period during the Lease Term, with the first
Lease Year commencing on the Commencement Date; however, (a) if the Commencement Date falls on a
day other than the first day of a calendar month, the first Lease Year shall end on the last day of
the eleventh (11th) month after the Commencement Date and the second (2nd) and each succeeding
Lease Year shall commence on the first day of the next calendar month, and (b) the last Lease Year
(which may be less than a full calendar year) shall end on the Expiration Date. If Landlord is
unable to deliver possession of Premises to Tenant on or before the anticipated delivery date of
May 1, 2001, Landlord shall not be subject to any liability for its failure to do so, and such
failure shall not affect the validity of this Lease nor the obligations of Tenant hereunder.
Landlord and Tenant hereby stipulate that the Premises contain the number of square feet specified
in Article l.B. of the Basic Lease Provisions. At any time after the Commencement Date,
Landlord may deliver to Tenant a Commencement Letter in a form substantially similar to that
attached hereto as Exhibit “C”, which Tenant shall execute and return to Landlord within five (5)
days of receipt thereof. Failure of Tenant to timely execute and deliver the Commencement Letter
shall constitute an acknowledgment by Tenant that the statements included in such notice are true
and correct, without exception.




ARTICLE 3




 RENTAL





               (a) Basic Rental. Tenant agrees to pay to Landlord during the
Term hereof, at Landlord’s office or to such other person or at such other place
as directed from time to time by written notice to Tenant from Landlord, the
initial monthly and annual sums as set forth in Article l.C. of the Basic Lease
Provisions, payable in advance on the first day of each calendar month, without
demand, setoff or deduction, and in the event this Lease commences or the date



- 10 -









 






of expiration of this Lease occurs other than on the first day or last day of a
calendar month, the rent for such month shall be prorated. Notwithstanding the
foregoing, the first full month’s rent shall be paid to Landlord in accordance
with Article 1.1. of the Basic Lease Provisions.




               (b) Increase in Direct Costs. The term “Base Year” means the
calendar year set forth in Article l.D. of the Basic Lease Provisions. If, in
any
calendar year during the Term of this Lease, the “Direct Costs” (as hereinafter
defined) paid or incurred by Landlord shall be higher than the Direct Costs for
the Base Year, Tenant shall pay an additional sum for such and each subsequent
calendar year equal to the product of the amount set forth in Article I.E. of
the
Basic Lease Provisions multiplied by such increased amount of “Direct Costs.”
In the event either the Premises and/or the Project is expanded or reduced, then
Tenant’s Proportionate Share shall be appropriately adjusted, and as to the
calendar year in which such change occurs, Tenant’s Proportionate Share for
such year shall be determined on the basis of the number of days during that
particular calendar year that such Tenant’s Proportionate Share was in effect. In
the event this Lease shall terminate on any date other than the last day of a
calendar year, the additional sum payable hereunder by Tenant during the
calendar year in which this Lease terminates shall be prorated on the basis of
the relationship which the number of days which have elapsed from the
commencement of said calendar year to and including said date on which this
Lease terminates bears to three hundred sixty-five (365). Any and all amounts
due and payable by Tenant pursuant to Article 3(b), (c) and (d) hereof shall be
deemed “Additional Rent” and Landlord shall be entitled to exercise the same
rights and remedies upon default in these payments as Landlord is entitled to
exercise with respect to defaults in monthly Basic Rental payments.




               (c) Definitions. As used herein the term “Direct Costs” shall
mean the sum of the following:




               (i) “Tax Costs”, which shall mean any and all real estate taxes and other
similar charges on real property or improvements, assessments, water and sewer
charges, and all other charges assessed, reassessed or levied upon the Project and
appurtenances thereto and other facilities thereof, or the real property thereunder
(collectively the “Real Property”) or attributable thereto or on the rents, issues,
profits or income received or derived therefrom which are assessed, reassessed or
levied by the United States, the State of California or any local government
authority or agency or any political subdivision thereof, and shall include
Landlord’s reasonable legal fees, costs and disbursements incurred in connection
with proceedings for reduction of Tax Costs or any part thereof; provided, however,
if at any time after the date of this Lease the methods of taxation now prevailing
shall be altered so that in lieu of or as a supplement to or a substitute for the
whole or any part of



- 11 -









 







any Tax Costs, there shall be assessed, reassessed or levied (a) a tax,
assessment, reassessment, levy, imposition or charge wholly or partially as a net
income, capital or franchise levy or otherwise on the rents, issues, profits or
income derived therefrom, or (b) a tax, assessment, reassessment, levy (including
but not limited to any municipal, state or federal levy), imposition or charge
measured by or based in whole or in part upon the Real Property and imposed upon
Landlord, or (c) a license fee measured by the rent payable under this Lease, then
all such taxes, assessments, reassessments or levies or the part thereof so measured
or based, shall be deemed to be included in the term “Direct Costs.” In addition,
when calculating Tax Costs for the Base Year, special assessments shall only be
deemed included in Tax Costs for the Base Year to the extent that such special
assessments are included in Tax Costs for the applicable subsequent calendar year
during the Term.




               (ii) “Operating Costs”, which shall mean all costs and expenses incurred
by Landlord in connection with the maintenance, operation, replacement, ownership
and repair of the Project, the equipment, the intrabuilding network cable, adjacent
walks, malls and landscaped and common areas and facilities of the Project,
including, but not limited to, salaries, wages, medical, surgical and general
welfare benefits and pension payments, payroll taxes, fringe benefits, employment
taxes, workers’ compensation, uniforms and dry cleaning thereof for all persons who
perform duties connected with the operation, maintenance and repair of the Project,
its equipment, the intrabuilding network cable and the adjacent walks and landscaped
areas, including janitorial, gardening, security, operating engineer, elevator,
painting, plumbing, electrical, carpentry, heating, ventilation, air conditioning,
window washing, hired services, a reasonable allowance for depreciation of the cost
of acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Project, accountant’s fees incurred in the preparation
of rent adjustment statements, real estate tax consulting fees, personal property
taxes on property used in the maintenance and operation of the Project, fees, costs,
expenses or dues payable pursuant to the terms of any covenants, conditions or
restrictions or owners’ association pertaining to the Project, capital expenditures
incurred to effect economies of operation of, or stability of services to, the
Project and capital expenditures required by government regulations, laws, or
ordinances (including the Americans with Disabilities Act of 1990 (the “ADA”)) which
were not in effect as of the Commencement Date; costs incurred (capital or
otherwise) on a regular recurring basis every three (3) or more years for certain
maintenance projects (e.g., parking lot slurry coat or replacement of lobby and
elevator cab carpeting), in each instance amortized over their useful life, together
with interest thereon at the rate often percent (10%) per annum; the cost of all



- 12 -









 







charges for electricity, gas, water and other utilities furnished to the
Project, including any taxes thereon; the cost of all charges for fire and extended
coverage, liability and all other insurance for the Project carried by Landlord; the
cost of all building and cleaning supplies and materials; the cost of all charges
for cleaning, maintenance and service contracts and other services with independent
contractors and administration fees; a commercially reasonable property management
fee (which fee may be imputed if Landlord has internalized management or otherwise
acts as its own property manager) and license, permit and inspection fees relating
to the Project. In the event, during any calendar year, the Project is less than
ninety-five percent (95%) occupied at all times, Operating Costs shall be adjusted
to reflect the Operating Costs of the Project as though ninety-five percent (95%)
were occupied at all times, and the increase or decrease in the sums owed hereunder
shall be based upon such Operating Costs as so adjusted. Notwithstanding anything to
the contrary set forth in this Article 3, when calculating Operating Costs
for the Base Year, Operating Costs shall exclude (a) market-wide labor-rate
increases due to extraordinary circumstances including, but not limited to, boycotts
and strikes, (b) utility rate increases due to extraordinary circumstances
including, but not limited to, conservation surcharges, boycotts, embargoes or other
shortages, and (c) amortization of any capital items including, but not limited to,
capital improvements, capital repairs and capital replacements (including such
amortized costs where the actual improvement, repair or replacement was made in
prior years). Notwithstanding the foregoing, Operating Costs do not include: (1)
legal fees, brokers’ commissions or other costs incurred in the negotiation,
termination, extension of leases, or expansion or contraction of premises under any
leases, or in proceedings involving a specific tenant, or in the creation of an
encumbrance, or in connection with a sale of the Project, including survey, legal
fees and disbursements, transfer stamps and appraisals, engineering and inspection
reports associated with the contemplated sale or encumbrance; (2) depreciation,
except as set forth above; (3) interest, except as set forth above; (4) capital
items, except as set forth above; (5) repairs or improvements paid for with the
proceeds of any insurance carried by Landlord (or which would have been paid had
Landlord carried the insurance required to be carried by Landlord under this Lease);
(6) advertising and promotional expenses incurred for the purpose of leasing space
in the Project or promoting patronage of the Project by invitees; (7) wages,
salaries, reimbursable expenses, benefit and other compensation of any personnel
above the grade of the general manager of the Project; (8) any expense for which
Landlord is entitled to be reimbursed by a tenant (including Tenant) as an
additional charge in excess of base rent and such tenant’s share of Operating Costs;
(9) the cost of any special services incurred for the benefit of one or more



- 13 -









 







tenants of the Project and not provided generally to all tenants of the
Project; (10) penalties or late fees incurred by Landlord; (11) the costs, expenses
and fees of any asset manager, investment or financial advisor, or investment
banker, representing Landlord or any partner or any other constituent member of
Landlord; and (12) Landlord’s internal overhead expenses, including the cost of
internal accounting and the cost of preparation of Landlord’s income tax or
information returns. Operating Costs shall be “net” so that they are reduced by the
amount of all recoupments, discounts, credits, reductions, allowances or the like
actually received by Landlord from third parties, on account of Operating Cost,
except that Landlord may include in Operating Costs the actual costs and expenses,
if any, incurred by Landlord in obtaining such recoupments, discounts, credits,
reductions, allowances or the like. Subject to the provisions of this definition,
the determination of Operating Costs shall be made by Landlord in accordance with
generally accepted accounting principles and practices, based on the operating
principles and practices of the Project, consistently applied.




     (d) Determination of Payment.




               (i) if for any calendar year ending or commencing within the Term,
Tenant’s Proportionate Share of Direct Costs for such calendar year exceeds Tenant’s
Proportionate Share of Direct Costs for the Base Year, then Tenant shall pay to
Landlord, in the manner set forth in Sections 3(d)(ii) and (iii),
below, and as additional rent, an amount equal to the excess (the “Excess”).




               (ii) Landlord shall 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 Direct Costs for the then-current calendar
year shall be and the estimated Excess (the “Estimated Excess”) as calculated by
comparing Tenant’s Proportionate Share of Direct Costs for such calendar year, which
shall be based upon the Estimate, to Tenant’s Proportionate Share of Direct Costs
for the Base Year. The failure of Landlord to timely furnish the Estimate Statement
for any calendar year shall not preclude Landlord from enforcing its rights to
collect any Estimated Excess under this Article 3. If pursuant to the
Estimate Statement an Estimated Excess is calculated for the then-current calendar
year, Tenant shall pay, with its next installment of Monthly Basic Rental due, a
fraction of the Estimated Excess for the then-current calendar year (reduced by any
amounts paid pursuant to the last sentence of this Section 3(d)(ii)). Such
fraction shall have as its numerator the number of months which have elapsed in such
current calendar year to the month of such payment, both months inclusive, and shall
have twelve (12) as its denominator. Until a new



- 14 -









 







Estimate Statement is furnished, Tenant shall pay monthly, with the Monthly
Basic Rental 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.




               (iii) In addition, Landlord shall endeavor to give to Tenant on or before
the first day of April following the end of each calendar year, a statement (the
“Statement”) which shall state the Direct Costs incurred or accrued for such
preceding calendar year, and which shall indicate the amount, if any, of the Excess.
Upon receipt of the Statement for each calendar year during the Term, if amounts
paid by Tenant as Estimated Excess are less than the actual Excess as specified on
the Statement, Tenant shall pay, with its next installment of Monthly Basic Rental
due, the full amount of the Excess for such calendar year, less the amounts, if any,
paid during such calendar year as Estimated Excess. If, however, the Statement
indicates that amounts paid by Tenant as Estimated Excess are greater than the
actual Excess as specified on the Statement, such overpayment shall be credited
against Tenant’s next installments of Estimated Excess. The failure of Landlord to
timely furnish the Statement for any calendar year shall not prejudice Landlord from
enforcing its rights under this Article 3. Even though the Term has expired
and Tenant has vacated the Premises, when the final determination is made of
Tenant’s Proportionate Share of the Direct Costs for the calendar year in which this
Lease terminates, if an Excess is present, Tenant shall immediately pay to Landlord
an amount as calculated pursuant to the provisions of this Article 3(d). The
provisions of this Section 3(d)(iii) shall survive the expiration or earlier
termination of the Term.




               (iv) Within one hundred twenty (120) days after receipt of a Statement by
Tenant (“Review Period”), if Tenant disputes the amount set forth in the Statement,
Tenant’s employees or an independent certified public accountant (which accountant
is a member of a nationally or regionally recognized accounting firm), designated by
Tenant, may, after reasonable notice to Landlord and at reasonable times, inspect
Landlord’s records at Landlord’s offices, provided that Tenant is not then in
default after expiration of all applicable cure periods and provided further that
Tenant and such accountant or representative shall, and each of them shall use their
commercially reasonable efforts to cause their respective agents and employees to,
maintain all information contained in Landlord’s records in strict confidence.
Notwithstanding the foregoing, Tenant shall only have the right to review Landlord’s
records one (1) time during any twelve (12) month period. Tenant’s failure to
dispute the amounts set forth in any Statement within the Review Period shall be
deemed to be Tenant’s approval of such Statement and Tenant,



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thereafter, waives the right or ability to dispute the amounts set forth in
such Statement. If after such inspection, but within thirty (30) days after the
Review Period, Tenant notifies Landlord in writing that Tenant still disputes such
amounts, a certification as to the proper amount shall be made, at Tenant’s expense,
by an independent certified public accountant selected by Landlord and who is a
member of a nationally or regionally recognized accounting firm. Landlord shall
cooperate in good faith with Tenant and the accountant to show Tenant and the
accountant the information upon which the certification is to be based. However, if
such certification by the accountant proves that the Direct Costs set forth in the
Statement were overstated by more than five percent (5%), then the cost of the
accountant and the cost of such certification shall be paid for by Landlord.
Promptly following the parties receipt of such certification, the parties shall make
such appropriate payments or reimbursements, as the case may be, to each other, as
are determined to be owing pursuant to such certification.




               (v) If the Project is a part of a multi-building development, those Direct
Costs attributable to such development as a whole (and not attributable solely to
any individual building therein) shall be allocated by Landlord to the Project and
to the other buildings within such development on an equitable basis.



ARTICLE 4 




SECURITY DEPOSIT AND LETTER OF CREDIT





               (a) Tenant has deposited with Landlord the sum set forth in Article l.F.
of the Basic Lease Provisions as security for the full and faithful performance of every
provision of this Lease to be performed by Tenant (the “Security Deposit”). If Tenant
breaches any provision of this Lease, including but not limited to the payment of rent,
Landlord may use all or any part of this Security Deposit for the payment of any rent or any
other sums in default, or to compensate Landlord for any other loss or damage which Landlord
may suffer by reason of Tenant’s default. If any portion of the Security Deposit is so used
or applied, Tenant shall, within five (5) days after written demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to the then required
amount (as determined below). On the first anniversary of the Commencement Date and each
subsequent anniversary thereafter, provided no events or conditions exist which, with the
passage of time or giving of notice or both, would constitute a default under this Lease,
the amount of the Security Deposit required hereunder shall be reduced according to the
following schedule:



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	 	 	Amount of
	Time Period	 	Security Deposit
	Commencement Date — End of Lease Year 1
	 	$	2,023,275.00	 
	Lease Year 2
	 	$	1,820,947.50	 
	Lease Year 3
	 	$	1,618,620.00	 
	Lease Year 4
	 	$	1,416,292.50	 
	Lease Year 5
	 	$	1,213,965.00	 
	Lease Year 6
	 	$	1,011,637.50	 
	Lease Year 7
	 	$	809,310.00	 
	Lease Year 8
	 	$	606,982.50	 
	Lease Year 9
	 	$	404,655.00	 
	Lease Year
10 — Expiration Date
	 	$	337,212.50	 







               Landlord and Tenant agree that Landlord shall maintain the Security Deposit in a money
market account with a financial institution reasonably acceptable to Landlord. Initially,
such account shall be opened with The Dreyfus Corporation. Said account shall be held solely
in Landlord’s name and shall be subject to only Landlord’s investment direction. In no event
shall Landlord be liable for any loss of interest or principal of the Security Deposit, nor
shall Landlord be liable for the performance of the investment or any costs, charges or fees
assessed to such account. Subject to Landlord’s reasonable approval, Tenant shall be
permitted from time to time during the Term (but not more than twice in any calendar year),
to direct Landlord to reinvest the Security Deposit in investment grade debt instruments
having a maturity of no more than 120 days.




               Within thirty (30) days after the end of each Lease Year, and provided that no events
of default or events or conditions exist which with the passage of time or giving of notice
or both would constitute a default under this Lease, Landlord shall cause a portion of the
Security Deposit to be refunded to Tenant in an amount equal to the difference of (a) the
amount of the Security Deposit then held by or for the account of Landlord, plus all
interest accrued thereon, less (b) the amount of the Security Deposit required to be held
for the then current Lease Year plus any fees, penalties or breakage costs payable in
connection with the withdrawal of said amount from Landlord’s investment account.




               At the expiration of the Lease Term, and provided there exists no default by Tenant
hereunder, the Security Deposit or any balance thereof shall be returned to Tenant (or, at
Landlord’s option, to Tenant’s assignee), provided that subsequent to the expiration of this
Lease, Landlord may retain from said Security Deposit (i) an amount reasonably estimated by
Landlord to cover potential Direct Cost reconciliation payments due with respect to the
calendar year in which this Lease terminates or expires (such amount so retained shall



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not, in any event, exceed ten percent (10%) of estimated Direct Cost payments due from
Tenant for such calendar year through the date of expiration or earlier termination of this
Lease and any amounts so retained and not applied to such reconciliation shall be returned
to Tenant within thirty (30) days after Landlord’s delivery of the Statement for such
calendar year), (ii) any and all amounts reasonably estimated by Landlord to cover the
anticipated costs to be incurred by Landlord to remove any signage provided to Tenant under
this Lease and to repair any damage caused by such removal (in which case any excess amount
so retained by Landlord shall be returned to Tenant within thirty (30) days after such
removal and repair), and (iii) any and all amounts permitted by law or this Article
4. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code
and all other provisions of law, now or hereafter in effect, which provide that Landlord may
claim from a security deposit only those sums reasonably necessary to remedy defaults in the
payment of rent, to repair damage caused by Tenant or to clean the Premises, it being agreed
that Landlord may, in addition, claim those sums specified in this Article 4 above
and/or those sums reasonably necessary to compensate Landlord for any other loss or damage,
foreseeable or unforeseeable, caused by the acts or omissions of Tenant or any officer,
employee, agent, contractor or invitee of Tenant.




               (b) Tenant shall have the option to deliver an irrevocable
standby letter of credit (“Letter of Credit”) to Landlord, in the initial face value
of the Security Deposit then required hereunder, issued by a money-center bank
(a bank which accepts deposits, maintains accounts and whose deposits are
insured by the FDIC) located in San Francisco, California and acceptable to
Landlord in Landlord’s sole discretion, in form and content and with terms and
conditions in all material respects acceptable to Landlord in Landlord’s sole
discretion.




               (c) Notwithstanding any provision to the contrary contained in
this Lease, in the event that Landlord sells or transfers at least fifty-one percent
(51%) of Landlord’s interest in the Project, the Security Deposit required under
this Lease shall be amended to be the lesser of: (i) the then required Security
Deposit pursuant to Article 4(a), above, or (ii) an amount equal to
$1,011,637.50. Within thirty (30) days after any such transfer, Landlord shall refund to
Tenant any portion of the Security Deposit held by or for the account of Landlord in excess
of the then required Security Deposit, if any, less any fees, penalties or breakage costs
payable in connection with the withdrawal of said amount from Landlord’s investment account.
Upon the expiration of the first whole Lease Year after any such transfer, and on each
subsequent anniversary thereof, and provided that no events or conditions exist which, with
the passage of time or giving of notice or both would constitute a default under this Lease,
the amount of the Security Deposit required hereunder shall be reduced by an amount equal to
$202,327.50 per Lease Year. Notwithstanding the foregoing, the amount of the Security
Deposit required under this Article 



- 18 -









 






               4(c) shall at no time be reduced to be an amount less than $337,212.50. Within
thirty (30) days after the end of each Lease Year after any such transfer, and provided that
no events of default or events or conditions exist which with the passage of time or giving
of notice or both would constitute a default under this Lease, Landlord shall cause a
portion of the Security Deposit to be refunded to Tenant in an amount equal to the
difference of (a) the amount of the Security Deposit then held by or for the account of
Landlord, plus all interest accrued thereon, less (b) the amount of the Security Deposit
required to be held for the then current Lease Year plus any fees, penalties or breakage
costs payable in connection with the withdrawal of said amount from Landlord’s investment
account.




               (d) From time to time, Tenant may request that Landlord
reconsider the amount of the Security Deposit required hereunder; Notwithstanding
the foregoing, Landlord shall have no obligation whatsoever to act reasonably in
considering any such request. Any decision to adjust the Security Deposit required
hereunder shall be made in the sole and absolute discretion of Landlord.



ARTICLE 5




HOLDING OVER




          Should Tenant, without Landlord’s written consent, hold over after termination of this Lease,
Tenant shall become a tenant from month to month (for that portion of the Premises in which Tenant
is holding over), only upon each and all of the terms herein provided as may be applicable to a
month to month tenancy and any such holding over shall not constitute an extension of this Lease.
During such holding over, Tenant shall pay in advance, monthly, rent at one hundred fifty percent
(150%) of the rate in effect for the last month of the Term of this Lease, in addition to, and not
in lieu of, all other payments required to be made by Tenant hereunder including but not limited to
Tenant’s Proportionate Share of any increase in Direct Costs. Nothing contained in this Article
5 shall be construed as consent by Landlord to any holding over of the Premises 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 earlier termination of the Term. If
Tenant fails to surrender the Premises upon the expiration or termination of this Lease, Tenant
agrees to indemnify, defend and hold Landlord harmless from all costs, loss, expense or liability,
including without limitation, claims made by any succeeding tenant and real estate brokers claims
and attorneys’ fees.




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ARTICLE 6 




PERSONAL PROPERTY TAXES




          Tenant shall pay, prior to delinquency, all taxes assessed against or levied upon trade
fixtures, furnishings, equipment and all other personal property of Tenant located in the Premises.
In the event any or all of Tenant’s trade fixtures, furnishings, equipment and other personal
property shall be assessed and taxed with property of Landlord, or if the cost or value of any
leasehold improvements in the Premises exceeds the cost or value of a Project-standard buildout as
determined by Landlord and, as a result, real property taxes for the Project are increased, Tenant
shall pay to Landlord its share of such taxes within thirty (30) days after delivery to Tenant by
Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant’s
property or above-standard improvements. In no event shall Tenant be obligated to pay, as an
Operating Cost, the value of any other tenants’ improvements in the buildings that are separately
assessed to the extent the value or cost exceeds Project-standard buildout. Tenant shall assume and
pay to Landlord at the time of paying Basic Rental, any excise, sales, use, rent, occupancy,
garage, parking, gross receipts or other taxes (other than net income taxes) which may be imposed
on or on account of letting of the Premises or the payment of Basic Rental or any other sums due or
payable hereunder, and which Landlord may be required to pay or collect under any law now in effect
or hereafter enacted. Tenant shall pay directly to the party or entity entitled thereto all
business license fees, gross receipts taxes and similar taxes and impositions which may from time
to time be assessed against or levied upon Tenant, as and when the same become due and before
delinquency. Notwithstanding anything to the contrary contained herein, any sums payable by Tenant
under this Article 6 shall not be included in the computation of “Tax Costs.”




ARTICLE 7




USE





               (a) Tenant shall use and occupy the Premises only for the use
set forth in Article l.G. of the Basic Lease Provisions and shall not use or
occupy the Premises or permit the same to be used or occupied for any other
purpose without the prior written consent of Landlord, which consent may be
given or withheld in Landlord’s reasonable discretion, and Tenant agrees that it
will use the Premises in such a manner so as not to interfere with or infringe the
rights of other tenants in the Project. Tenant shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances and governmental
regulations or requirements now in force or which may hereafter be in force
relating to or affecting (i) the condition, use or occupancy of the Premises or the
Project, excluding structural changes to the Project not related to Tenant’s
particular use of the Premises, and (ii) improvements installed or constructed in



- 20 -









 






the Premises by or for the benefit of Tenant. Tenant shall not do or permit to be
done anything which would invalidate or increase the cost of any fire and
extended coverage insurance policy covering the Project and/or the property
located therein and Tenant shall comply with all rules, orders, regulations and
requirements of any organization which sets out standards, requirements or
recommendations commonly referred to by major fire insurance underwriters.
Tenant shall promptly, upon demand, reimburse Landlord for any additional
premium charges for any such insurance policy assessed or increased by reason
of Tenant’s failure to comply with the provisions of this Article.




               (b) Subject to the foregoing, Tenant shall be permitted to use
the Premises as follows:




               (i) Health Club. Tenant shall be permitted to construct a health
club on the second floor of the Premises (the “Health Club Space”), solely for the
use of Tenant’s employees, contractors, consultants and Tenant Licensees
(collectively, the “Health Club Users”) at Tenant’s sole cost and expense. Under no
circumstances shall Tenant be permitted to charge a fee for admittance or use of the
Health Club Space. All Alterations to the Health Club Space shall be governed by the
terms of Article 9. below. Tenant shall install separate meters for the
Health Club Space to register the usage of all of the utilities in the Health Club
Space and Tenant shall pay for the cost of all utility usage as metered to the
Health Club Space in excess of an amount which would have been used during the Base
Year had the Health Club Space been used as general office space during the Base
Year, as reasonably determined by Landlord. Tenant shall be responsible for the cost
of installation of such meters, and the maintenance and repair thereof. The term
“utility” for purposes hereof may refer to but is not limited to electricity, gas,
water, sewer, steam, fire protection system, telephone or other communication or
alarm service, as well as HVAC, and all taxes or other charges thereon. Prior to the
expiration of the Term of this Lease or any extension thereof, all Alterations made
to the Health Club Space shall be removed by Tenant and Tenant shall repair any
damages to the Health Club Space caused by such removal, all at Tenant’s sole cost
and expense pursuant to the terms of Article 29(b) hereof.




               (ii) Tenant Licensees. Landlord hereby acknowledges that Tenant
intends to utilize a portion of the Premises as office space for Tenant’s clients
(“Tenant Licensees”). Subject to the terms of Article 9 of this Lease,
Tenant may utilize space in the Premises for occupancy by multiple Tenant Licensees,
provided such occupancy density on any floor shall at no time exceed one (1) person
per 175 rentable square feet and shall not exceed three (3) suites with separate
corridors on any floor. The use of any portion of the Premises by any Tenant
Licensee shall be



- 21 -









 







compatible with general office use in the Project, shall be consistent with
uses in other Class-A office buildings in the immediate vicinity of the Project and
shall be approved by Landlord, in Landlord’s reasonable discretion. Prior to any
Tenant Licensee’s occupancy of the Premises, each Tenant Licensee shall execute a
written license agreement, pursuant to which Tenant Licensee shall agree to pay a
monthly license fee in an amount equal to the then prevailing market rent and with
other terms and conditions acceptable to Landlord in Landlord’s reasonable
discretion. Tenant shall pay to Landlord as Additional Rent, the amount by which the
then prevailing market rent for any such Tenant Licensee’s portion of the Premises
exceeds the then current Monthly Basic Rental due under this Lease for said portion
of the Premises. Landlord’s consent to the occupancy of the Premises by any Tenant
Licensee shall be deemed given if Landlord has not withheld such consent by written
notice to Tenant within thirty (30) days of Landlord’s receipt of a fully executed
license agreement for such Tenant Licensee. In the event of any disagreement
regarding either Landlord or Tenant’s determination of the rental rate to be paid by
a Tenant Licensee, the “then prevailing market rent” shall be determined pursuant to
the procedure set forth in Article 3 Kb), below and shall assume (solely for
purposes of determining the then prevailing market rent) a five (5) year term.
Tenant shall provide Landlord with no less than thirty (30) days’ prior written
notice of the proposed occupancy of any portion of the Premises by a Tenant
Licensee, together with a fully-executed copy of the written license agreement,
which license agreement shall be in a form reasonably acceptable to Landlord.
Tenant’s failure to deliver Landlord notice of any Tenant Licensee’s proposed
occupancy of any portion of the Premises shall be deemed an Event of Default. All
signage for Tenant Licensees shall be governed by the terms of Paragraph 5 of the
Rules and Regulations attached hereto and incorporated herein as Exhibit “B”.
Landlord shall not be entitled to any Transfer Premium in connection with the use of
the Premises by any Tenant Licensee in accordance with this Section 7(b).
Notwithstanding the occupancy of any portion of the Premises by Tenant’s Licensees,
Tenant shall remain fully liable for all obligations and liabilities of Tenant under
this Lease.



ARTICLE 8 




CONDITION OF PREMISES




          Tenant hereby agrees that the Premises shall be taken “as is”, “with all faults”, “without any
representations or warranties”, and Tenant hereby agrees and warrants that it has investigated and
inspected the condition of the Premises and the suitability of same for Tenant’s purposes, and
Tenant does hereby waive and disclaim any objection to, cause of action based upon, or claim that
its obligations hereunder




- 22 -









 







should be reduced or limited because of the condition of the Premises or the Project or the
suitability of same for Tenant’s purposes. Tenant acknowledges that neither Landlord nor any agent
nor any employee of Landlord has made any representation or warranty with respect to the Premises
or the Project or with respect to the suitability of either for the conduct of Tenant’s business
and Tenant expressly warrants and represents that Tenant has relied solely on its own investigation
and inspection of the Premises and the Project in its decision to enter into this Lease and let the
Premises in an “As Is” condition. The existing leasehold improvements in the Premises as of the
Commencement Date of this Lease, together with any improvements subsequently installed by Tenant
pursuant to Article 9 of this Lease may collectively be referred to herein as the “Tenant
Improvements.” The taking of possession of the Premises by Tenant shall conclusively establish that
the Premises and the Project were at such time in satisfactory condition. Tenant hereby waives
Sections 1941 and 1942 of the Civil Code of California or any successor provision of law.




          Landlord reserves the right from time to time, but subject to payment by and/or reimbursement
from Tenant as otherwise provided herein: (i) to install, use, maintain, repair, replace and
relocate for service to the Premises and/or other parts of the Project pipes, ducts, conduits,
wires, appurtenant fixtures, and mechanical systems, wherever located in the Premises or the
Project, (ii) to alter, close or relocate any facility in the Premises or the Common Areas or
otherwise conduct any of the above activities for the purpose of complying with a general plan for
fire/life safety for the Project or otherwise and (iii) to comply with any federal, state or local
law, rule or order with respect thereto or the regulation thereof not currently in effect. Landlord
shall attempt to perform any such work with the least inconvenience to Tenant as possible, but in
no event shall Tenant be permitted to withhold or reduce Basic Rental or other charges due
hereunder as a result of same or otherwise make claim against Landlord for interruption or
interference with Tenant’s business and/or operations.




ARTICLE 9 




REPAIRS AND ALTERATIONS




          Landlord shall maintain the structural portions of the Project including the foundation,
floor/ceiling slabs, roof, curtain wall, exterior glass, columns, beams, shafts, stairs,
stairwells, elevator cabs and common areas and shall also maintain and repair the basic mechanical,
electrical, life-safety, plumbing, sprinkler systems and heating, ventilating and air-conditioning
systems (provided, however, that Landlord’s obligation with respect to any such systems shall be to
repair and maintain those portions of the systems located in the core of the Project or in other
areas outside of the Premises, but Tenant shall be responsible to repair and maintain any
distribution of such systems throughout the Premises or which are required to be upgraded as a
result of Tenant’s Alterations or improvements to the Premises). Except as expressly provided as
Landlord’s obligation in this Article 9, Tenant shall keep the Premises in good condition
and repair. Subject to the provisions of Article 14, all damage or injury


- 23 -









 







to the Premises or the Project resulting from the act or negligence of Tenant, its employees,
agents or visitors, guests, invitees or licensees or by the use of the Premises shall be promptly
repaired by Tenant, at its sole cost and expense, to the satisfaction of Landlord; provided,
however, that for damage to the Project as a result of casualty or for any repairs that may impact
the mechanical, electrical, plumbing, heating, ventilation or air-conditioning systems of the
Project, Landlord shall have the right (but not the obligation) to select the contractor and
oversee all such repairs. Landlord may make any repairs which are not promptly made by Tenant
after Tenant’s receipt of written notice and the reasonable opportunity of Tenant to make said
repair within ten (10) business days from receipt of said written notice, and charge Tenant for the
cost thereof, which cost shall be paid by Tenant within thirty (30) days from invoice from
Landlord. Tenant shall be responsible for the design and function of all nonstandard improvements
of the Premises, whether or not installed by Landlord at Tenant’s request. Tenant waives all rights
to make repairs at the expense of Landlord, or to deduct the cost thereof from the rent. Tenant
shall make no alterations, changes or additions in or to the Premises (collectively, “Alterations”)
without Landlord’s prior written consent, and then only by contractors or mechanics approved by
Landlord in writing and upon the approval by Landlord in writing of fully detailed and dimensioned
plans and specifications pertaining to the Alterations in question, to be prepared and submitted by
Tenant at its sole cost and expense. Tenant shall at its sole cost and expense obtain all necessary
approvals and permits pertaining to any Alterations approved by Landlord. If Landlord, in approving
any Alterations, specifies a commencement date therefor, Tenant shall not commence any work with
respect to such Alterations prior to such date. Tenant hereby indemnifies, defends and agrees to
hold Landlord free and harmless from all liens and claims of lien, and all other liability, claims
and demands arising out of any work done or material supplied to the Premises by or at the request
of Tenant in connection with any Alterations. If permitted Alterations are made, they shall be made
at Tenant’s sole cost and expense and shall be and become the property of Landlord, except that
Landlord may, by written notice to Tenant given at the time the Alterations are approved, require
Tenant at Tenant’s expense to remove all partitions, counters, railings and other Alterations
installed by Tenant, and to repair any damages to the Premises caused by such removal. Any and all
costs attributable to or related to the applicable building codes of the city in which the Project
is located (or any other authority having jurisdiction over the Project) arising from Tenant’s
plans, specifications, improvements, alterations or otherwise shall be paid by Tenant at its sole
cost and expense. With regard to repairs, Alterations or any other work arising from or related to
this Article 9, Landlord shall be entitled to receive an administrative/supervision fee
(which fee shall vary depending upon whether or not Tenant orders the work directly from Landlord)
sufficient to compensate Landlord for all overhead, general conditions, fees and other costs and
expenses arising from Landlord’s involvement with such work. As a condition to Landlord’s approval
of any Alterations, Landlord may require Tenant to execute a Tenant Work Letter in the form
attached hereto as Exhibit “D.”




          Notwithstanding anything to the contrary contained in this Lease,


- 24 -









 







Landlord and Tenant agree that responsibility for compliance with the ADA shall be allocated
as follows: (i) Landlord shall be responsible for compliance with the provisions of Title III of
the ADA and all life safety codes or government regulations in effect as of the execution of this
Lease for all Common Areas, including exterior and interior areas of the Project not included
within the Premises or the premises of other tenants; (ii) Landlord shall be responsible for
compliance with the provisions of Title III of the ADA and all life safety codes or government
regulations in effect as of the execution of this Lease for any construction, renovations,
alterations and repairs made within the Premises, if such construction, renovations, alterations or
repairs are made by Landlord for the purpose of improving the Project generally; (iii) Tenant shall
be responsible for compliance with the provisions of Title III of the ADA and all life safety codes
or government regulations in effect as of the execution of this Lease for any construction,
renovations, alterations and repairs made within the Premises.




ARTICLE 10




LIENS




          Tenant shall keep the Premises and the Project free from any mechanics’ liens, vendors’ liens
or any other liens arising out of any work performed, materials furnished or obligations incurred
by Tenant, and agrees to defend, indemnify and hold harmless Landlord from and against any such
lien or claim or action thereon, together with costs of suit and reasonable attorneys’ fees
incurred by Landlord in connection with any such claim or action. Before commencing any work of
alteration, addition or improvement to the Premises, Tenant shall give Landlord at least ten (10)
business days’ written notice of the proposed commencement of such work (to afford Landlord an
opportunity to post appropriate notices of non-responsibility). In the event that there shall be
recorded against the Premises or the Project or the property of which the Premises is a part any
claim or lien arising out of any such work performed, materials furnished or obligations incurred
by Tenant and such claim or lien shall not be removed, discharged or bonded over within ten (10)
days of filing, Landlord shall have the right but not the obligation to pay and discharge said lien
without regard to whether such lien shall be lawful or correct or to require that Tenant deposit
with Landlord in cash, lawful money of the United States, one hundred fifty percent (150%) of the
amount of such claim, which sum may be retained by Landlord until such claim shall have been
removed of record or until judgment shall have been rendered on such claim and such judgment shall
have become final, at which time Landlord shall have the right to apply such deposit in discharge
of the judgment on said claim and any costs, including attorneys’ fees incurred by Landlord, and
shall remit the balance thereof to Tenant.




- 25 -









 








ARTICLE 11 PROJECT SERVICES





               (a) Landlord agrees to furnish to the Premises, at a cost to be
included in Operating Costs, from 7:00 a.m. to 6:00 p.m. Mondays through
Fridays, excepting local and national holidays, air conditioning and heat, all in
such reasonable quantities as in the judgment of Landlord is reasonably
necessary for the comfortable occupancy of the Premises. In addition, Landlord
shall provide electric current for normal lighting and normal office machines,
elevator service and water on the same floor as the Premises for lavatory and
drinking purposes in such reasonable quantities as in the judgment of Landlord
is reasonably necessary for general office use. Landlord shall endeavor to make
up to Tenant’s Proportionate Share of the Building’s electric, HVAC and riser
capacity available to the Premises, on an aggregate basis, during the Term of
this Lease. Notwithstanding the foregoing, Landlord shall not be liable for any
costs, expenses, losses or liabilities suffered or incurred by Tenant as a result of
Landlord’s failure to comply with the preceding sentence. Janitorial and
maintenance services shall be furnished five (5) days per week, excepting local
and national holidays. Tenant shall comply with all rules and regulations which
Landlord may reasonably establish for the proper functioning and protection of
the common area air conditioning, heating, elevator, electrical intrabuilding
network cable and plumbing systems. Landlord shall not be liable for, and
there shall be no rent abatement as a result of, any stoppage, reduction or
interruption of any such services caused by governmental rules, regulations or
ordinances, riot, strike, labor disputes, breakdowns, accidents, necessary repairs
or other cause unless such stoppage, reduction or interruption continues for
more than five (5) consecutive business days and Tenant’s use of the Premises is
materially interrupted, in which case all rent payable hereunder shall abate
thereafter in proportion to the portion of the Premises actually affected, until
such interruption is cured. Except as specifically provided in this Article 11,
Tenant agrees to pay for all utilities and other services utilized by Tenant and
additional building services furnished to Tenant not uniformly furnished to all
tenants of the Project at the rate generally charged by Landlord to tenants of the
Project.




               (b) Tenant will not, without the prior written consent of
Landlord, use any apparatus or device in the Premises which will in any way
increase the amount of electricity or water usually furnished or supplied for use
of the Premises as general office space; nor connect any apparatus, machine or
device with water pipes or electric current (except through existing electrical
outlets in the Premises), for the purpose of using electric current or water.



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               (c) If Tenant shall require electric current in excess of that
which Landlord is obligated to furnish under Article 11 (a) above, Tenant shall
first obtain the written consent of Landlord, which Landlord may refuse in its
sole and absolute discretion, to the use thereof and Landlord may cause an
electric current meter or submeter to be installed in the Premises to measure the
amount of such excess electric current consumed by Tenant in the Premises.
The cost of any such meter and of installation, maintenance and repair thereof
shall be paid for by Tenant and Tenant agrees to pay to Landlord, promptly
upon demand therefor by Landlord, for all such excess electric current
consumed by any such use as shown by said meter at the rates charged for such
service by the city in which the Project is located or the local public utility, as
the case may be, furnishing the same, plus any additional expense incurred by
Landlord in keeping account of the electric current so consumed.




               (d) If any lights, machines or equipment (including but not
limited to computers) are used by Tenant in the Premises which materially
affect the temperature otherwise maintained by the air conditioning system, or
generate substantially more heat in the Premises than would be generated by the
building standard lights and usual office equipment, Landlord shall have the
right to install any machinery and equipment which Landlord reasonably deems
necessary to restore temperature balance, including but not limited to
modifications to the standard air conditioning equipment, and the cost thereof,
including the cost of installation and any additional cost of operation and
maintenance occasioned thereby, shall be paid by Tenant to Landlord upon
demand by Landlord. Landlord shall not be liable under any circumstances for
loss of or injury to property, however occurring, through or in connection with
or incidental to failure to furnish any of the foregoing.




               (e) If Tenant requires heating, ventilation and/or air
conditioning during times other than the times provided in Article 11 (a)
above,
Tenant shall give Landlord such advance notice as Landlord shall reasonably
require and shall pay Landlord’s standard charge for such after-hours use, which
is currently $100.00 per hour per tenant for HVAC and $20.00 per hour per
tenant for fans only.




               (f) Landlord may impose a reasonable charge for any utilities
or services (other than electric current and heating, ventilation and/or air
conditioning which shall be governed by Articles 11(c) and (e) above) utilized
by Tenant in excess of the amount or type that Landlord reasonably determines
is typical for general office use.



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ARTICLE 12 




RIGHTS OF LANDLORD




          Landlord and its agents shall have the right to enter the Premises at all reasonable times for
the purpose of cleaning the Premises, examining or inspecting the same, serving or posting and
keeping posted thereon notices as provided by law, or which Landlord deems necessary for the
protection of Landlord or the Property, showing the same to prospective tenants, lenders or
purchasers of the Project, in the case of an emergency, and for making such alterations, repairs,
improvements or additions to the Premises or to the Project as Landlord may deem necessary or
desirable, in each case, other than emergencies, upon reasonable prior written notice. If Tenant
shall not be personally present to open and permit an entry into the Premises at any time when such
an entry by Landlord is necessary or permitted hereunder, Landlord may enter by means of a master
key or may enter forcibly, only in the case of an emergency, without liability to Tenant and
without affecting this Lease.




ARTICLE 13 




INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY





               (a) Indemnity. Tenant shall indemnify, defend and hold
Landlord harmless from any and all claims arising from Tenant’s use of the
Premises or the Project or from the conduct of its business or from any activity,
work or thing which may be permitted or suffered by Tenant in or about the
Premises or the Project (including, without limitation, any and all claims arising
from any Health Club User’s use of the Premises or the Project) and shall
further indemnify, defend and hold Landlord harmless from and against any and
all claims arising from any breach or default in the performance of any
obligation on Tenant’s part to be performed under this Lease or arising from any
negligence of Tenant or any of its agents, contractors, employees or invitees,
patrons, customers or members in or about the Project and from any and all
costs, attorneys’ fees, expenses and liabilities incurred in the defense of any
claim or any action or proceeding brought thereon, including negotiations in
connection therewith. Tenant hereby assumes all risk of damage to property or
injury to persons in or about the Premises from any cause, and Tenant hereby
waives all claims in respect thereof against Landlord, excepting where the
damage is caused solely by the gross negligence or willful misconduct of
Landlord.




               (b) Exemption of Landlord from Liability. Landlord shall not
be liable for injury to Tenant’s business, or loss of income therefrom, or, except in
connection with damage or injury resulting from the gross negligence or willful misconduct
of Landlord, or its authorized agents, for damage that may



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be sustained by the person, goods, wares, merchandise or property of Tenant, its
employees, invitees, customers, agents, or contractors, or any other person in, on or about
the Premises directly or indirectly caused by or resulting from fire, steam, electricity,
gas, water, or rain which may leak or flow from or into any part of the Premises, or from
the breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, light fixtures, or mechanical or electrical systems
or from intrabuilding network cable, whether such damage or injury results from conditions
arising upon the Premises or upon other portions of the Project or from other sources or
places and regardless of whether the cause of such damage or injury or the means or
repairing the same is inaccessible to Tenant. Landlord shall not be liable to Tenant for any
damages arising from any act or neglect of any other tenant of the building.




               Tenant acknowledges that Landlord’s election to provide mechanical surveillance or to
post security personnel in the Project is solely within Landlord’s discretion; Landlord
shall have no liability in connection with the decision whether or not to provide such
services and Tenant hereby waives all claims based thereon. Landlord shall not be liable for
losses due to theft, vandalism, or like causes. Tenant shall defend, indemnify, and hold
Landlord harmless from any such claims made by any employee, licensee, invitee, contractor,
agent or, other person whose presence in, on or about the Premises or the Project is
attendant to the business of Tenant.



ARTICLE 14




INSURANCE





               (a) Tenant’s Insurance. Tenant, shall at all times during the Term of this
Lease, and at its own cost and expense, procure and continue in force the following
insurance coverage: (i) Commercial General Liability Insurance with a combined single limit
for bodily injury and property damages of not less than Three Million Dollars ($3,000,000)
per occurrence and Five Million Dollars ($5,000,000) in the annual aggregate, including
products liability coverage if applicable, covering the insuring provisions of this Lease
and the performance of Tenant of the indemnity and exemption of Landlord from liability
agreements set forth in Article 13 hereof; (ii) a policy of standard fire, extended
coverage and special extended coverage insurance (all risks), including a vandalism and
malicious mischief endorsement, sprinkler leakage coverage and earthquake sprinkler leakage
where sprinklers are provided in an amount equal to the full replacement value new without
deduction for depreciation of all (A) Tenant Improvements, Alterations, fixtures and other
improvements in the Premises and (B) trade fixtures, furniture, equipment and other personal
property installed by or at the expense of Tenant; (iii) Worker’s Compensation coverage as
required by law; and (iv) business interruption, loss



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of income and extra expense insurance covering failure of Tenant’s telecommunications
equipment and covering all other perils, failures or interruptions, if commercially
available. Tenant shall carry and maintain during the entire Lease Term (including any
option periods, if applicable), at Tenant’s sole cost and expense, increased amounts of the
insurance required to be carried by Tenant pursuant to this Article 14 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 required by Landlord.




               (b) Form of Policies. The aforementioned minimum limits of
policies and Tenant’s procurement and maintenance thereof shall in no event
limit the liability of Tenant hereunder. The Commercial General Liability
Insurance policy shall name Landlord, Landlord’s property manager, Landlord’s
lender(s) and such other persons or firms as Landlord specifies from time to
time, as additional insureds with an appropriate endorsement to the policy(s).
All such insurance policies carried by Tenant shall be with companies having a
rating of not less than A-VIII in Best’s Insurance Guide. Tenant shall furnish to
Landlord, from the insurance companies, or cause the insurance companies to
furnish, certificates of coverage. No such policy shall be cancelable or subject
to reduction of coverage or other modification or cancellation except after thirty
(30) days prior written notice to Landlord by the insurer. All such policies shall
be endorsed to agree that Tenant’s policy is primary and that any insurance
covered by Landlord is excess and not contributing with any Tenant insurance
requirement hereunder. Tenant shall, at least twenty (20) days prior to the
expiration of such policies, furnish Landlord with renewals or binders. Tenant
agrees that if Tenant does not take out and maintain such insurance or furnish
Landlord with renewals or binders, Landlord may (but shall not be required to)
procure said insurance on Tenant’s behalf and charge Tenant the cost thereof,
which amount shall be payable by Tenant upon demand with interest (at the rate
set forth in Section 20(e) below) from the date such sums are extended. Tenant
shall have the right to provide such insurance coverage pursuant to blanket
policies obtained by Tenant, provided such blanket policies expressly afford
coverage to the Premises and to Tenant as required by this Lease.




               (c) Landlord’s Insurance. Landlord shall, as a cost to be
included in Operating Costs, procure and maintain at all times during the Term
of this Lease, a policy or policies of insurance covering loss or damage to the
Project in the amount of the full replacement cost without deduction for
depreciation thereof (exclusive of Tenant’s trade fixtures, inventory, personal
property and equipment), providing protection against all perils included within the
classification of fire and extended coverage, vandalism coverage and malicious mischief,
sprinkler leakage, water damage, and special extended coverage on building. Additionally,
Landlord may (but shall not be required to) carry: (i) Bodily Injury and Property Damage
Liability Insurance and/or Excess Liability Coverage Insurance; and (ii) Earthquake and/or
Flood Damage



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Insurance; and (iii) Rental Income Insurance at its election or if required by its
lender from time to time during the Term hereof, in such amounts and with such limits as
Landlord or its lender may deem appropriate. The costs of such insurance shall be included
in Operating Costs. In the event such insurance is not carried in the Base Year, then the
Base Year Operating Costs shall be adjusted upward at such time as Landlord elects to carry
such insurance by the cost of such insurance for the year in which it is obtained.




               (d) Waiver of Subrogation. Landlord and Tenant each agree to have their
respective insurers issuing the insurance described in
Sections 14(a)(ii), 14(a)(iv) and the first sentence of Section
14(c) waive any rights of subrogation that such companies may have against the other
party. Tenant hereby waives any right that Tenant may have against Landlord and Landlord
hereby waives any right that Landlord may have against Tenant as a result of any loss or
damage to the extent such loss or damage is insurable under such policies.




               (e) Compliance with Law. Tenant agrees that it will not, at
any time, during the Term of this Lease, carry any stock of goods or do
anything in or about the Premises that will in any way tend to increase the
insurance rates upon the Project. Tenant agrees to pay Landlord immediately
upon demand the amount of any increase in premiums for insurance against loss
by fire that may be charged during the Term of this Lease on the amount of
insurance to be carried by Landlord on the Project resulting from the foregoing,
or from Tenant doing any act in or about said Premises that does so increase the
insurance rates, whether or not Landlord shall have consented to such act on the
part of Tenant. If Tenant installs upon the Premises any electrical equipment
which constitutes an overload of electrical lines of the Premises, Tenant shall at
its own cost and expense in accordance with all other Lease provisions, and
subject to the provisions of Article 9, K) and 1_1, hereof, make whatever
changes
are necessary to comply with requirements of the insurance underwriters and
any governmental authority having jurisdiction thereover, but nothing herein
contained shall be deemed to constitute Landlord’s consent to such overloading.
Tenant shall, at its own expense, comply with all requirements of the insurance
authority having jurisdiction over the Project necessary for the maintenance of
reasonable fire and extended coverage insurance for the Premises, including
without limitation thereto, the installation of fire extinguishers or an automatic
dry chemical extinguishing system.



ARTICLE 15 




ASSIGNMENT AND SUBLETTING




          Tenant shall have no power to, either voluntarily, involuntarily, by operation of law or
otherwise, sell, assign, transfer or hypothecate this Lease, or sublet


- 31 -









 







the Premises or any part thereof, or permit the Premises or any part thereof to be used or
occupied by anyone other than Tenant or Tenant’s employees without the prior written consent of
Landlord which shall not be unreasonably withheld; provided, however, that Tenant may grant
licenses to occupy portions of the Premises to Tenant’s clients in accordance with the terms and
conditions of Article 7 of this Lease. If Tenant is a corporation, unincorporated
association, partnership or limited liability company, the sale, assignment, transfer or
hypothecation of any class of stock or other ownership interest in such corporation, association,
partnership or limited liability company in excess of twenty-five percent (25%) in the aggregate in
one transaction or series of related transactions shall be deemed an assignment within the meaning
and provisions of this Article 15. Tenant may transfer its interest pursuant to this Lease
only upon the following express conditions, which conditions are agreed by Landlord and Tenant to
be reasonable:





               (a) That the proposed transferee shall be subject to the prior written consent of
Landlord, which consent will not be unreasonably withheld but, without limiting the
generality of the foregoing, it shall be reasonable for Landlord to deny such consent if:




               (i) The use to be made of the Premises by the proposed transferee is (a)
not generally consistent with the character and nature of all other tenancies in the
Project, or (b) a use which conflicts with any so-called “exclusive” then in favor
of, or for any use which is the same as that stated in any percentage rent lease to,
another tenant of the Project or any other buildings which are in the same complex
as the Project, or (c) a use which would be prohibited by any other portion of this
Lease (including, but not limited to, any Rules and Regulations then in effect);




               (ii) The financial responsibility of the proposed transferee is not
reasonably satisfactory to Landlord; or




               (iii) The proposed transferee is either a governmental agency or
instrumentality thereof.




               (b) Whether or not Landlord consents to any such transfer,
Tenant shall pay to Landlord Landlord’s then standard processing fee and
reasonable attorneys’ fees incurred in connection with the proposed transfer up
to the aggregate sum of $1,500.00;




               (c) That the proposed transferee shall execute an agreement
pursuant to which it shall agree to perform faithfully and be bound by all of the
terms, covenants, conditions, provisions and agreements of this Lease
applicable to that portion of the Premises so transferred;



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               (d) That an executed duplicate original of said assignment and
assumption agreement or other transfer on a form reasonably approved by
Landlord, shall be delivered to Landlord within five (5) days after the execution
thereof, and that such transfer shall not be binding upon Landlord until the
delivery thereof to Landlord and the execution and delivery of Landlord’s
consent thereto. It shall be a condition to Landlord’s consent to any subleasing,
assignment or other transfer of part or all of Tenant’s interest in the Premises
(hereinafter referred to as a “Transfer”) that (i) upon Landlord’s consent to any
Transfer, Tenant shall pay and continue to pay fifty percent (50%) of any
“Transfer Premium” (defined below), received by Tenant from the transferee;
(ii) any sublessee of part or all of Tenant’s interest in the Premises shall agree
that in the event Landlord gives such sublessee notice that Tenant is in default
under this Lease, such sublessee shall thereafter make all sublease or other
payments directly to Landlord, which will be received by Landlord without any
liability whether to honor the sublease or otherwise (except to credit such
payments against sums due under this Lease), and any sublessee shall agree to
attorn to Landlord or its successors and assigns at their request should this
Lease be terminated for any reason, except that in no event shall Landlord or its
successors or assigns be obligated to accept such attornment; (iii) any such
Transfer and consent shall be effected on forms supplied by Landlord and/or its
legal counsel; (iv) Landlord may require that Tenant not then be in default
hereunder in any respect; and (v) Tenant or the proposed subtenant or assignee
(collectively, “Transferee”) shall agree to pay Landlord, upon demand, as
additional rent, a sum equal to the additional costs, if any, incurred by Landlord
for maintenance and repair as a result of any change in the nature of occupancy
caused by such subletting or assignment. “Transfer Premium” shall mean all
rent, additional rent or other consideration payable by a Transferee in
connection with a Transfer in excess of the rent and Additional Rent payable by
Tenant under this Lease during the term of the Transfer and if such Transfer is
less than all of the Premises, the Transfer Premium shall be calculated on a
rentable square foot basis. “Transfer Premium” shall also include, but not be
limited to, key money, bonus money or other cash consideration paid by a transferee to
Tenant in connection with such Transfer, and any payment in excess of fair market value for
services rendered by Tenant, to the Transferee and any payment in excess of fair market
value for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to the
Transferee in connection with such Transfer. Prior to calculating the Transfer Premium,
Landlord shall first deduct the actual out-of-pocket costs incurred by Tenant in reletting
the Premises, including brokerage fees and attorneys’ fees paid to third party unaffiliated
brokers and attorneys, and demising walls and new tenant improvements. Any sale assignment,
hypothecation, transfer or subletting of this Lease which is not in compliance with the
provisions of this Article 15 shall be void and shall, at the option of Landlord,
terminate this Lease. In no event shall the consent by Landlord to an assignment or
subletting be construed as relieving Tenant, any assignee, or sublessee from obtaining the
express written



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consent of Landlord to any further assignment or subletting, or as releasing Tenant
from any liability or obligation hereunder whether or not then accrued and Tenant shall
continue to be fully liable therefor. No collection or acceptance of rent by Landlord from
any person other than Tenant shall be deemed a waiver of any provision of this Article
15 or the acceptance of any assignee or subtenant hereunder, or a release of Tenant (or
of any successor of Tenant or any subtenant). 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 this Article 15 or otherwise has breached or
acted unreasonably under this Article 15, their sole remedies shall be a declaratory
judgment and an injunction for the relief sought without any monetary damages, and Tenant
hereby waives all other remedies, including, without limitation, any right at law or equity
to terminate this Lease, on its own behalf and, to the extent permitted under all applicable
laws, on behalf of the proposed Transferee.




               Notwithstanding anything to the contrary contained in this Article 15, Landlord
shall have the option, by giving written notice to Tenant within thirty (30) days after
Landlord’s receipt of a request for consent to a proposed Transfer, to terminate this Lease
as to the portion of the Premises that is the subject of the Transfer. If this Lease is so
terminated with respect to less than the entire Premises, the Basic Rental and Tenant’s
Proportionate Share shall be prorated based on the number of rentable square feet retained
by Tenant as compared to the total number of rentable square feet contained in the original
Premises, and this Lease as so amended shall continue thereafter in full force and effect,
and upon the request of either party, the parties shall execute written confirmation of the
same.




               (e) Notwithstanding anything to the contrary contained herein, Landlord’s consent
shall not be required in connection with any assignment in connection with a consolidation,
merger or purchase of substantially all of Tenant’s assets to a person or entity (A) whose
financial strength, both in terms of net worth and in terms of reasonably anticipated cash
flow over the Lease Term, is not materially less than Tenant’s financial strength at the
time of the execution of this Lease, or (B) who has provided such guaranties or other
security reasonably satisfactory to Landlord to guaranty the replacement tenant’s
performance under the Lease.



ARTICLE 16 




DAMAGE OR DESTRUCTION




          If the Project is damaged by fire or other insured casualty and the insurance proceeds have
been made available therefor by the holder or holders of any mortgages or deeds of trust covering
the Premises or the Project, the damage shall be


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repaired by Landlord to the extent such insurance proceeds are available therefor and provided
such repairs can, in Landlord’s sole opinion, be completed within two hundred seventy (270) days
after the necessity for repairs as a result of such damage becomes known to Landlord without the
payment of overtime or other premiums, and until such repairs are completed rent shall be abated in
proportion to the part of the Premises which is unusable by Tenant in the conduct of its business
(but there shall be no abatement of rent by reason of any portion of the Premises being unusable
for a period equal to one (1) day or less). Upon the occurrence of any damage to the Premises,
Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds
payable to Tenant under Section 14(a)(ii)(A) above; provided, however, that if the cost of
repair of improvements within the Premises by Landlord exceeds the amount of insurance proceeds
received by Landlord from Tenant’s insurance carrier, as so assigned by Tenant, such excess costs
shall be paid by Tenant to Landlord prior to Landlord’s repair of such damage. If repairs cannot,
in Landlord’s opinion, be completed within two hundred seventy (270) days after the necessity for
repairs as a result of such damage becomes known to Landlord without the payment of overtime or
other premiums, either party may, at its option, elect to terminate this Lease by written notice to
the other within thirty (30) days after Landlord’s determination of the anticipated time needed to
complete the repairs. In addition, Landlord may elect to terminate this Lease if the Project shall
be damaged by fire or other casualty or cause, whether or not the Premises are affected, and the
damage is not fully covered, except for deductible amounts, by Landlord’s insurance policies.
Finally, if the Premises or the Project is damaged to any substantial extent during the last twelve
(12) months of the Term, then notwithstanding anything contained in this Article 16 to the
contrary, either party shall have the option to terminate this Lease by giving written notice to
the other of the exercise of such option within sixty (60) days after such party learns of the
necessity for repairs as the result of such damage. A total destruction of the Project shall
automatically terminate this Lease. Except as provided in this Article 16, there shall be
no abatement of rent and no liability of Landlord by reason of any injury to or interference with
Tenant’s business or property arising from such damage or destruction or the making of any repairs,
alterations or improvements in or to any portion of the Project or the Premises or in or to
fixtures, appurtenances and equipment therein. Tenant understands that Landlord will not carry
insurance of any kind on Tenant’s furniture, furnishings, trade fixtures or equipment, and that
Landlord shall not be obligated to repair any damage thereto or replace the same. Except for
proceeds relating to Tenant’s furniture, furnishings, trade fixtures and equipment, Tenant
acknowledges that Tenant shall have no right to any proceeds of insurance relating to property
damage. With respect to any damage which Landlord is obligated to repair or elects to repair,
Tenant, as a material inducement to Landlord entering into this Lease, irrevocably waives and
releases its rights under the provisions of Sections 1932 and 1933 of the California Civil Code.




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ARTICLE 17




SUBORDINATION




          This Lease is subject and subordinate to all ground or underlying leases, mortgages and deeds
of trust which affect the property or the Project, including all renewals, modifications,
consolidations, replacements and extensions thereof; provided, however, if the lessor under any
such lease or the holder or holders of any such mortgage or deed of trust shall advise Landlord
that they desire or require this Lease to be prior and superior thereto, upon written request of
Landlord to Tenant, Tenant agrees to promptly execute, acknowledge and deliver any and all
documents or instruments which Landlord or such lessor, holder or holders deem necessary or
desirable for purposes thereof. Landlord shall have the right to cause this Lease to be and become
and remain subject and subordinate to any and all ground or underlying leases, mortgages or deeds
of trust which may hereafter be executed covering the Premises, the Project or the property or any
renewals, modifications, consolidations, replacements or extensions thereof, for the full amount of
all advances made or to be made thereunder and without regard to the time or character of such
advances, together with interest thereon and subject to all the terms and provisions thereof;
provided, however, that Landlord obtains from the lender or other party in question a written
undertaking in favor of Tenant to the effect that such lender or other party will not disturb
Tenant’s right of possession under this Lease if Tenant is not then or thereafter in breach of any
covenant or provision of this Lease. Tenant agrees, within ten (10) days after Landlord’s written
request therefor, to execute, acknowledge and deliver upon request any and all documents or
instruments requested by Landlord or necessary or proper to assure the subordination of this Lease
to any such mortgages, deeds of trust, or leasehold estates. Tenant agrees that in the event any
proceedings are brought for the foreclosure of any mortgage or deed of trust or any deed in lieu
thereof, to attorn to the purchaser or any successors thereto upon any such foreclosure sale or
deed in lieu thereof as so requested to do so by such purchaser and to recognize such purchaser as
the lessor under this Lease; Tenant shall, within five (5) days after request execute such further
instruments or assurances as such purchaser may reasonably deem necessary to evidence or confirm
such attornment. Tenant agrees to provide copies of any notices of Landlord’s default under this
Lease to any mortgagee or deed of trust beneficiary whose address has been provided to Tenant and
Tenant shall provide such mortgagee or deed of trust beneficiary a commercially reasonable time
after receipt of such notice within which to cure any such default. 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.




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ARTICLE 18




EMINENT DOMAIN




          If the whole of the Premises or the Project or so much thereof as to render the balance
unusable by Tenant shall be taken under power of eminent domain, or is sold, transferred or
conveyed in lieu thereof, this Lease shall automatically terminate as of the date of such
condemnation, or as of the date possession is taken by the condemning authority, at Landlord’s
option. No award for any partial or entire taking shall be apportioned, and Tenant hereby assigns
to Landlord any award which may be made in such taking or condemnation, together with any and all
rights of Tenant now or hereafter arising in or to the same or any part thereof; provided, however,
that nothing contained herein shall be deemed to give Landlord any interest in or to require Tenant
to assign to Landlord any award made to Tenant for the taking of personal property and trade
fixtures belonging to Tenant and removable by Tenant at the expiration of the Term hereof as
provided hereunder or for the interruption of, or damage to, Tenant’s business. In the event of a
partial taking described in this Article 18, or a sale, transfer or conveyance in lieu
thereof, which does not result in a termination of this Lease, the rent shall be apportioned
according to the ratio that the part of the Premises remaining useable by Tenant bears to the total
area of the Premises. Tenant hereby waives any and all rights it might otherwise have pursuant to
Section 1265.130 of the California Code of Civil Procedure.




ARTICLE 19




DEFAULT




          Each of the following acts or omissions of Tenant or of any guarantor of Tenant’s performance
hereunder, or occurrences, shall constitute an “Event of Default”:





          (a) Failure or refusal to pay Basic Rental, Additional Rent or
any other amount to be paid by Tenant to Landlord hereunder within three (3)
calendar days after notice that the same is due or payable hereunder; said three
(3) day period shall be in lieu of, and not in addition to, the notice requirements
of Section 1161 of the California Code of Civil Procedure or any similar or
successor law;




               (b) Except as set forth in items (a) above and (c) through and
including (g) below, failure to perform or observe any other covenant or
condition of this Lease to be performed or observed within thirty (30) days
following written notice to Tenant of such failure. Such thirty (30) day notice
shall be in lieu of, and not in addition to, any required under Section 1161 of
the California Code of Civil Procedure or any similar or successor law;



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               (c) Abandonment or vacating or failure to accept tender of
possession of the Premises or any significant portion thereof;




               (d) The taking in execution or by similar process or law (other
than by eminent domain) of the estate hereby created;




               (e) The filing by Tenant or any guarantor hereunder in any
court pursuant to any statute of a petition in bankruptcy or insolvency or for
reorganization or arrangement for the appointment of a receiver of all or a
portion of Tenant’s property; the filing against Tenant or any guarantor
hereunder of any such petition, or the commencement of a proceeding for the
appointment of a trustee, receiver or liquidator for Tenant, or for any guarantor
hereunder, or of any of the property of either, or a proceeding by any
governmental authority for the dissolution or liquidation of Tenant or any
guarantor hereunder, if such proceeding shall not be dismissed or trusteeship
discontinued within thirty (30) days after commencement of such proceeding or
the appointment of such trustee or receiver; or the making by Tenant or any
guarantor hereunder of an assignment for the benefit of creditors. Tenant
hereby stipulates to the lifting of the automatic stay in effect and relief from
such stay for Landlord in the event Tenant files a petition under the United
States Bankruptcy laws, for the purpose of Landlord pursuing its rights and
remedies against Tenant and/or a guarantor of this Lease;




               (f) Tenant’s failure to cause to be released any mechanics liens
filed against the Premises or the Project within twenty (20) days after the date
the same shall have been filed or recorded; or




               (g) Tenant’s failure to observe or perform according to the provisions of
Articles 17 or 25 within ten (10) business days after written notice from
Landlord.



          All defaults by either party of any covenant or condition of this Lease shall be deemed by the
parties hereto to be material.




ARTICLE 20




REMEDIES





               (a) Upon the occurrence of an Event of Default under this Lease as provided in
Article 19 hereof, Landlord may exercise all of its remedies as may be permitted by
law, including but not limited to the remedy provided by Section 1951.4 of the California
Civil Code, and including without limitation, terminating this Lease, reentering the
Premises and removing all persons and property therefrom, which property may be stored by
Landlord at a warehouse or elsewhere at the risk, expense and for the account of Tenant. If



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Landlord elects to terminate this Lease, Landlord shall be entitled to recover from
Tenant the aggregate of all amounts permitted by law, including but not limited to (i) the
worth at the time of award of the amount of any unpaid rent which had 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 Article 20(a) 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 items (i) and (ii), above, the
“worth at the time of award” shall be computed by allowing interest at the rate set forth in
item (e), below, but in no case greater than the maximum amount of such interest permitted
by law. As used in item (iii), above, the “worth at the time of award” shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%).




               (b) Nothing in this Article 20 shall be deemed to affect Landlord’s right to
indemnification for liability or liabilities arising prior to the termination of this Lease
for personal injuries or property damage under the indemnification clause or clauses
contained in this Lease.




               (c) Notwithstanding anything to the contrary set forth herein, Landlord’s re-entry to
perform acts of maintenance or preservation of or in connection with efforts to relet the
Premises or any portion thereof, or the appointment of a receiver upon Landlord’s initiative
to protect Landlord’s interest under this Lease shall not terminate Tenant’s right to
possession of the Premises or any portion thereof and, until Landlord does elect to
terminate this Lease, this Lease shall continue in full force and effect and Landlord
may enforce all of Landlord’s rights and remedies hereunder including, without limitation,
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




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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.




          (d) All rights, powers and remedies of Landlord hereunder and
under any other agreement now or hereafter in force between Landlord and
Tenant shall be cumulative and not alternative and shall be in addition to all
rights, powers and remedies given to Landlord by law, and the exercise of one
or more rights or remedies shall not impair Landlord’s right to exercise any
other right or remedy.




          (e) Any amount due from Tenant to Landlord hereunder which
is not paid when due shall bear interest at the lower of eighteen percent (18%)
per annum or the maximum lawful rate of interest from the due date until paid,
unless otherwise specifically provided herein, but the payment of such interest
shall not excuse or cure any default by Tenant under this Lease. In addition to
such interest: (i) if Basic Rental is not paid within ten (10) days after receipt of
written notice that the same is due, a late charge equal to ten percent (10%) of
the amount overdue or $100, whichever is greater, shall be assessed and shall
accrue for each calendar month or part thereof until such rental, including the
late charge, is paid in full, which late charge Tenant hereby agrees is a reasonable estimate of the damages Landlord shall suffer as a result of Tenant’s late
payment and (ii) an additional charge of $25 shall be assessed for any check given to
Landlord by or on behalf of Tenant which is not honored by the drawee thereof; which damages
include Landlord’s additional administrative and other costs associated with such late
payment and unsatisfied checks and the parties agree that it would be impracticable or
extremely difficult to fix Landlord’s actual damage in such event. Such charges for interest
and late payments and unsatisfied checks are separate and cumulative and are in addition to
and shall not diminish or represent a substitute for any or all of Landlord’s rights or
remedies under any other provision of this Lease.



ARTICLE 21 




TRANSFER OF LANDLORD’S INTEREST




          In the event of any transfer or termination of Landlord’s interest in the Premises or the
Project by sale, assignment, transfer, foreclosure, deed-in-lieu of foreclosure or otherwise,
whether voluntary or involuntary, Landlord shall be automatically relieved of any and all
obligations and liabilities on the part of Landlord from and after the date of such transfer or
termination, including furthermore without limitation, the obligation of Landlord under Article
4 and California Civil Code 1950.7, above, to return the security deposit, provided said
security deposit is transferred to said transferee. Tenant agrees to attorn to the transferee upon
any such




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transfer and to recognize such transferee as the lessor under this Lease and Tenant shall,
within five (5) days after request, execute such further instruments or assurances as such
transferee may reasonably deem necessary to evidence or confirm such attornment.




ARTICLE 22




BROKER




          In connection with this Lease, each party warrants and represents that it has had dealings
only with firm(s) set forth in Article l.H. of the Basic Lease Provisions and that it knows
of no other person or entity who is or might be entitled to a commission, finder’s fee or other
like payment in connection herewith and does hereby indemnify and agree to hold the other, its
agents, members, partners, representatives, officers, affiliates, shareholders, employees,
successors and assigns harmless from and against any and all loss, liability and expenses that it
may incur should such warranty and representation prove incorrect, inaccurate or false.




ARTICLE 23




PARKING




          If provided for in Article 1 of this Lease, Tenant shall rent from Landlord,
commencing on the Commencement Date, the number of unreserved parking passes set forth in
Article l.J. of this Lease, which parking passes shall pertain to the Project parking
facility. Tenant shall pay to Landlord for automobile parking passes 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’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 or a lessee of the parking
facility in which case such parking operator or lessee shall have all the rights of control
attributed hereby to the Landlord. The parking passes rented by Tenant pursuant to this Article
23 are provided to Tenant solely for




 - 41 -









 







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.




ARTICLE 24




WAIVER




          No waiver by Landlord of any provision of this Lease shall be deemed to be a waiver of any
other provision hereof or of any subsequent breach by Tenant of the same or any other provision. No
provision of this Lease may be waived by Landlord, except by an instrument in writing executed by
Landlord. Landlord’s consent to or approval of any act by Tenant requiring Landlord’s consent or
approval shall not be deemed to render unnecessary the obtaining of Landlord’s consent to or
approval of any subsequent act of Tenant, whether or not similar to the act so consented to or
approved. No act or thing done by Landlord or Landlord’s agents during the Term of this Lease shall
be deemed an acceptance of a surrender of the Premises, and no agreement to accept such surrender
shall be valid unless in writing and signed by Landlord. Any payment by Tenant or receipt by
Landlord of an amount less than the total amount then due hereunder shall be deemed to be in
partial payment only thereof and not a waiver of the balance due or an accord and satisfaction,
notwithstanding any statement or endorsement to the contrary on any check or any other instrument
delivered concurrently therewith or in reference thereto. Accordingly, Landlord may accept any such
amount and negotiate any such check without prejudice to Landlord’s right to recover all balances
due and owing and to pursue its other rights against Tenant under this Lease, regardless of whether
Landlord makes any notation on such instrument of payment or otherwise notifies Tenant that such
acceptance or negotiation is without prejudice to Landlord’s rights.




ARTICLE 25




ESTOPPEL CERTIFICATE




          Tenant shall, at any time and from time to time, upon not less than ten business (10) days’
prior written notice from Landlord, execute, acknowledge and deliver to Landlord a statement in
writing certifying the following information, (but not limited to the following information in the
event further information is requested by Landlord): (i) that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and certifying that this
Lease, as modified, is in full force and effect); (ii) the dates to which the rental and other
charges are paid in advance, if any; (iii) the amount of Tenant’s security deposit, if any; and
(iv) acknowledging that there are not, to Tenant’s knowledge, any uncured defaults on the part of
Landlord hereunder, and no events or conditions then in existence which, with the passage of time
or notice or both, would constitute a default on the part of




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Landlord hereunder, or specifying such defaults, events or conditions, if any are claimed. It
is expressly understood and agreed that any such statement may be relied upon by any prospective
purchaser or encumbrancer of all or any portion of the Real Property. Tenant’s failure to deliver
such statement within such time shall constitute an admission by Tenant that all statements
contained therein are true and correct. Tenant agrees to execute all documents required in
accordance with this Article 25 within ten (10) business days after delivery of said
documents.




ARTICLE 26




LIABILITY OF LANDLORD




          Notwithstanding anything in this Lease to the contrary, any remedy of Tenant for the
collection of a judgment (or other judicial process) requiring the payment of money by Landlord in
the event of any default by Landlord hereunder or any claim, cause of action or obligation,
contractual, statutory or otherwise by Tenant against Landlord concerning, arising out of or
relating to any matter relating to this Lease and all of the covenants and conditions or any
obligations, contractual, statutory, or otherwise set forth herein, shall be limited solely and
exclusively to an amount which is equal to the lesser of (i) the interest of Landlord in and to the
Project, and (ii) the interest Landlord would have in the Project if the Project were encumbered by
third party debt in an amount equal to eighty percent (80%) of the then current value of the
Project (as such value is reasonably determined by Landlord). No other property or assets of
Landlord, or any member, officer, director, shareholder, partner, trustee, agent, servant or
employee of Landlord (the “Representative”) shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant’s remedies under or with respect to this
Lease, Landlord’s obligations to Tenant, whether contractual, statutory or otherwise, the
relationship of Landlord and Tenant hereunder, or Tenant’s use or occupancy of the Premises. Tenant
further understands that any liability, duty or obligation of Landlord to Tenant, shall
automatically cease and terminate as of the date that Landlord or any of Landlord’s Representatives
no longer have any right, title or interest in or to the Project.




ARTICLE 27




INABILITY TO PERFORM




          This Lease and the obligations of Landlord and Tenant hereunder shall not be affected or
impaired because Landlord or Tenant is unable to fulfill any of its obligations hereunder or is
delayed in doing so, if such inability or delay is caused by reason of any prevention, delay,
stoppage due to strikes, lockouts, acts of God, or any other cause previously, or at such time,
beyond the reasonable control or anticipation of Landlord or Tenant, as applicable (collectively, a
“Force Majeure”) and such party’s obligations under this Lease shall be forgiven and suspended by
any such Force Majeure. Notwithstanding the foregoing, Tenant’s obligations to pay Basic Rent,




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Additional Rent or any other amount to be paid by Tenant to Landlord shall not be forgiven or
suspended as a result of any such Force Majeure.




ARTICLE 28




HAZARDOUS WASTE





          (a) Tenant shall not cause or permit any Hazardous Material
(as defined in Article 28(d), below) to be brought, kept or used in or about the
Project by Tenant, its agents, employees, contractors, or invitees, except as
typically associated with general office use. Tenant indemnifies Landlord from
and against any breach by Tenant of the obligations stated in the preceding
sentence, and agrees to defend and hold Landlord harmless from and against
any and all claims, judgments, damages, penalties, fines, costs, liabilities, or
losses (including, without limitation, diminution in value of the Project,
damages for the loss or restriction or use of rentable or usable space or of any
amenity of the Project, damages arising from any adverse impact or marketing
of space in the Project, and sums paid in settlement of claims, attorneys’ fees,
consultant fees, and expert fees) which arise during or after the Term of this
Lease as a result of such breach. This indemnification of Landlord by Tenant
includes, without limitation, costs incurred in connection with any investigation
of site conditions or any cleanup, remedial, removal, or restoration work
required by any federal, state, or local governmental agency or political
subdivision because of Hazardous Material present in the soil or ground water
on or under the Project. Without limiting the foregoing, if the presence of any
Hazardous Material on the Project caused or permitted by Tenant results in any
contamination of the Project and subject to the provisions of Articles 9,
10 and
11, hereof, Tenant shall promptly take all actions at its sole expense as are
necessary to return the Project to the condition existing prior to the introduction
of any such Hazardous Material and the contractors to be used by Tenant for
such work must be approved by Landlord, which approval shall not be
unreasonably withheld so long as such actions would not potentially have any
material adverse long-term or short-term effect on the Project and so long as
such actions do not materially interfere with the use and enjoyment of the
Project by the other tenants thereof.




          (b) Landlord and Tenant acknowledge that Landlord may
become legally liable for the costs of complying with Laws (as defined in
Article 28(e), below) relating to Hazardous Material which are not the
responsibility of Landlord or the responsibility of Tenant, including the
following: (i) Hazardous Material present in the soil or ground water on the
Project of which Landlord has no knowledge as of the effective date of this
Lease; (ii) a change in Laws which relate to Hazardous Material which make
that Hazardous Material which is present on the Real Property as of the
effective date of this Lease, whether known or unknown to Landlord, a



 - 44 -









 






violation of such new Laws; (iii) Hazardous Material that migrates, flows, percolates,
diffuses, or in any way moves on to, or under, the Project after the effective date of this
Lease; or Hazardous Material present on or under the Project as a result of any discharge,
dumping or spilling (whether accidental or otherwise) on the Project by other lessees of the
Project or their agents, employees, contractors, or invitees, or by others. Accordingly,
Landlord and Tenant agree that the cost of complying with Laws relating to Hazardous
Material on the Project for which Landlord is legally liable and which are paid or incurred
by Landlord shall be an Operating Cost (and Tenant shall pay Tenant’s Proportionate Share
thereof in accordance with Article 3) unless the cost of such compliance as between
Landlord and Tenant, is made the responsibility of Tenant pursuant to Article 28(a),
above. To the extent any such Operating Cost relating to Hazardous Material is subsequently
recovered or reimbursed through insurance, or recovery from responsible third parties or
other action, Tenant shall be entitled to a proportionate reimbursement to the extent it has
paid its share of such Operating Cost to which such recovery or reimbursement relates.




          (c) It shall not be unreasonable for Landlord to withhold its
consent to any proposed Transfer if (i) the proposed transferee’s anticipated use
of the Premises involves the generation, storage, use, treatment, or disposal of
Hazardous Material; (ii) the proposed Transferee has been required by any prior
landlord, lender, or governmental authority to take remedial action in
connection with Hazardous Material contaminating a property if the
contamination resulted from such Transferee’s actions or use of the property in
question; or (iii) the proposed Transferee is subject to an enforcement order
issued by any governmental authority in connection with the use, disposal, or
storage of a Hazardous Material.




          (d) As used herein, the term “Hazardous Material” means
any hazardous or toxic substance, material, or waste which is or becomes
regulated by any local governmental authority, the State of California or the
United States Government. The term “Hazardous Material” includes, without
limitation, any material or substance which is (i) defined as “Hazardous Waste,”
“Extremely Hazardous Waste,” or “Restricted Hazardous Waste” under Sections
25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the California
Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control
Law), (ii) defined as a “Hazardous Substance” under Section 25316 of the
California Health and Safety Code, Division 20, Chapter 6.8
(Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as
a “Hazardous Material,” “Hazardous Substance,” or “Hazardous Waste” under Section 25501 of
the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials
Release Response Plans and Inventory), (iv) defined as a “Hazardous Substance” under Section
25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground
Storage of Hazardous



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Substances), (v) petroleum, (vi) asbestos, (vii) listed under Article 9 or defined as
Hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the California
Administrative Code, Division 4, Chapter 20, (viii) designated as a “Hazardous Substance”
pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. § 1317), (ix)
defined as a “Hazardous Waste” pursuant to Section 1004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903), or (x) defined as a
“Hazardous Substance” pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601).




          (e) As used herein, the term “Laws” mean any applicable federal, state or local
laws, ordinances, or regulations relating to any Hazardous Material affecting the Project,
including, without limitation, the laws, ordinances, and regulations referred to in
Article 28(d), above.



ARTICLE 29 




SURRENDER OF PREMISES; REMOVAL OF PROPERTY





          (a) The voluntary or other surrender of this Lease by Tenant to
Landlord, or a mutual termination hereof, shall not work a merger, and shall at
the option of Landlord, operate as an assignment to it of any or all subleases or
subtenancies affecting the Premises.




          (b) Upon the expiration of the Term of this Lease, or upon any
earlier termination of this Lease, Tenant shall quit and surrender possession of
the Premises to Landlord in as good order and condition as the same are now
and hereafter may be improved by Landlord or Tenant, reasonable wear and
tear, damage caused by casualty, and repairs which are Landlord’s obligation
excepted, and shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, all furniture, equipment,
business and trade fixtures, free-standing cabinet work, moveable partitioning
and other articles of personal property owned by Tenant or installed or placed
by Tenant at its own expense in the Premises, and all similar articles of any
other persons claiming under Tenant (including Tenant Licensees) unless
Landlord exercises its option to have any subleases or subtenancies assigned to
it, and Tenant shall repair all damage to the Premises resulting from the
installation and removal of such items to be removed.




          (c) Whenever Landlord shall reenter the Premises as provided
in Article 12 hereof, or as otherwise provided in this Lease, any property of
Tenant not removed by Tenant upon the expiration of the Term of this Lease (or within
forty-eight (48) hours after a termination by reason of Tenant’s default), as provided in
this Lease, shall be considered abandoned and Landlord may



 - 46 -









 






remove any or all of such items and dispose of the same in any manner or store the same
in a public warehouse or elsewhere for the account and at the expense and risk of Tenant,
and if Tenant shall fail to pay the cost of storing any such property after it has been
stored for a period of ninety (90) days or more, Landlord may sell any or all of such
property at public or private sale, in such manner and at such times and places as Landlord,
in its sole discretion, may deem proper, without notice or to demand upon Tenant, for the
payment of all or any part of such charges or the removal of any such property, and shall
apply the proceeds of such sale as follows: first, to the cost and expense of such sale,
including reasonable attorneys’ fees for services rendered; second, to the payment of the
cost of or charges for storing any such property; third, to the payment of any other sums of
money which may then or thereafter be due to Landlord from Tenant under any of the terms
hereof; and fourth, the balance, if any, to Tenant.




          (d) All fixtures, equipment, Alterations and/or appurtenances attached to or built
into the Premises prior to or during the Term, whether by Landlord or Tenant and whether at
the expense of Landlord or Tenant, or of both, shall be and remain part of the Premises and
shall not be removed by Tenant at the end of the Term unless otherwise expressly provided
for in this Lease or unless such removal is required by Landlord pursuant to the provisions
of Article 9, above. Such fixtures, equipment, Alterations, additions, improvements
and/or appurtenances shall include but not be limited to: all floor coverings, drapes,
paneling, built-in cabinetry, molding, doors, vaults (including vault doors), plumbing
systems, electrical systems, lighting systems, silencing equipment, communication systems,
all fixtures and outlets for the systems mentioned above and for all telephone, radio,
telegraph and television purposes, and any special flooring or ceiling installations.



ARTICLE 30 




EXISTING OCCUPANCY





          (a) Delays in Delivery. Notwithstanding anything to the contrary
contained herein, Tenant hereby acknowledges that the Premises are currently occupied by
another tenant pursuant to a lease agreement with Landlord. As a result of the failure of
the existing tenant to vacate the Premises in a timely manner, the Commencement Date may be
substantially delayed. Tenant hereby acknowledges and agrees that Landlord shall not be
liable for any damages, losses, liabilities, costs or expenses suffered or incurred by
Tenant as a result of Landlord’s inability or delay in delivering the Premises to Tenant
caused by the failure of the existing tenant to vacate the Premises upon the expiration of
the existing lease and as and when requested by Landlord. Landlord hereby agrees to
undertake commercially reasonable efforts to recover possession of the Premises after the
expiration of the existing lease; provided,



 - 47 -









 






however, that Landlord shall have no obligation to commence an action for unlawful
detainer and any decision to commence such an action shall be made in Landlord’s sole and
absolute discretion. Upon the existing tenant’s vacating of the Premises, Landlord shall
tender the Premises to Tenant. The Commencement Date shall be delayed in the event that
Landlord, for any reason other than Tenant’s unreasonable acts or omissions, fails to
deliver possession of the Premises to Tenant, including without limitation, due to the
failure of the existing tenant to vacate the Premises in a timely manner.




          (b) Partial Tenders. In the event that Landlord recovers less than all of
the Premises at one time, Landlord may tender such portion(s) of the Premises to Tenant and
Tenant shall accept the portion(s) of the Premises, as, and when, they are tendered, so long
as Landlord tenders the Premises in increments no smaller than a full floor of the Project
at a time. In such case, the Lease shall commence as to the portion(s) of the Premises, as,
and when, they are tendered; provided, however, that the Expiration Date for the Premises
shall be the date that is the eleventh anniversary of the Commencement Date. Landlord and
Tenant shall execute such amendments to this Lease as Landlord determines are reasonably
necessary to identify the portion(s) of the Premises then tendered and the proportionate
amount of Basic Rent and Tenant’s Proportionate Share applicable to the tendered portion(s)
of the Premises.



ARTICLE 31




OPTION TO RENEW





          (a) Provided that Tenant is not then in default, Tenant shall have the option
(“Option”) to renew this Lease for one (1) additional term of five (5) years (the “Option
Term”). The rent during such Option Term shall be at the then prevailing market rate for
comparable space (with respect to size, location and quality) and comparable term in Class-A
office buildings located within a three-mile radius of the Project which is not subleased or
subject to another tenant’s expansion rights. Tenant shall notify Landlord of its intention
to exercise such Option at least six (6) months prior to the Expiration Date for the initial
Term. Notwithstanding any provision to the contrary contained in this Lease, the foregoing
Option is personal to Tenant, and may not be exercised by or on behalf of any assignee,
subtenant or Tenant Licensees, except for an assignee who purchases all or substantially all
of the assets of Tenant and (A) whose financial strength, both in terms of net worth and in
terms of reasonably anticipated cash flow over the Lease Term, is not materially less than
Tenant’s financial strength at the time of the execution of this Lease, or (B) who has
provided such guaranties or other security reasonably satisfactory to Landlord to guaranty
the assignee’s performance under this Lease (“Qualified Successor”).



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          (b) Within thirty (30) days of such notification, Landlord shall submit Landlord’s
determination of the then prevailing market rent to Tenant, together with the comparable
rent information on which Landlord has relied in making its determination. In the event that
Tenant notifies Landlord in writing, on or before the thirtieth (30th) business day
following Tenant’s receipt of notice of Landlord’s determination of the then market rent
under this Section of this Lease, that Tenant reasonably disagrees with any such
determination, Landlord and Tenant shall negotiate in good faith to resolve such dispute
within ten (10) business days thereafter. If not resolved within such period, the issue
shall be referred to an individual (the “Expert”) agreed upon by Landlord and Tenant or
(failing such agreement) appointed by two individuals, one of which shall be chosen by
Landlord and one of which shall be chosen by Tenant. The Expert shall in any event have at
least five (5) years experience in leasing office space in San Francisco, California, and
shall not have been employed by either party within the immediately preceding twelve (12)
calendar months. The Expert shall be deemed to be acting as an expert and not as an
arbitrator, and shall determine the applicable market rent within thirty (30) days after his
appointment. The “then prevailing market rent” which shall apply for purposes of the
applicable provision of this Lease shall be the rent determined by either Landlord or Tenant
which is closest to the Expert’s determination, and the party that is not closest shall pay
all of the costs and expenses incurred in connection with the appointment of, and services
of, the Expert. Until any such dispute is resolved, any applicable payments due under this
Lease shall correspond to Landlord’s determination and, if applicable, Landlord shall refund
any overpayments made to Tenant within three (3) business days following the final
resolution of the dispute. Notwithstanding anything to the contrary contained above, in no
event shall rent for the Option Term be less than the rental rate in effect as of the
initially scheduled Expiration Date.



ARTICLE 32




RIGHT OF FIRST OFFER




          Provided that no default by Tenant has occurred and remained uncured beyond any applicable
cure period under any term or provision contained in this Lease and no condition exists which with
the passage of time or the giving of notice or both would constitute a default pursuant to this
Lease, Tenant (but not any assignee, subtenant or licensee, except for a Qualified
Successor) shall have the right, subject to the terms and conditions set forth below, to lease
any space contiguous to space then leased by Tenant in the Project or any space on the ninth floor
of the Project (each, a “First Offer Space”), if, and when, the First Offer Space becomes
“available” (as defined below) for leasing, before it is leased to any third party.




          If at any time during the Term of this Lease, First Offer Space becomes available for leasing,
Landlord shall endeavor to give Tenant notice (the “Landlord




 - 49 -









 







Notice”) of the availability of such First Offer Space no later than the later of (i) two (2)
months prior to the date on which such First Offer Space shall become available, or (ii) promptly
after Landlord learns that such First Offer Space will become available, and in either event, prior
to offering the First Offer Space for lease to any third party; provided, however, that Landlord’s
failure to deliver Landlord Notice for any First Offer Space shall not be deemed a default by
Landlord under this Lease. As used herein, “available” means the existing occupant has declined to
enter into a new lease for the First Offer Space, and no third party has an option or other right
to lease the First Offer Space granted prior to the time of the grant contained herein. If Tenant
does not give Landlord written notice (the “Tenant Notice”), within five (5) business days after
Tenant’s receipt of the Landlord Notice, that Tenant is interested in leasing all of the available
First Offer Space, or Landlord and Tenant have not, within ten (10) days after Landlord’s receipt
of the Tenant Notice, agreed on the basic lease terms for the First Offer Space, including the
rental rate, the term, the operating expense allowance, if any, and which party bears the cost of
constructing leasehold improvements, then, in either such event, Landlord may offer such First
Offer Space for lease to third parties, including offering to third parties lease terms more
favorable than the lease terms offered by Landlord to Tenant. Notwithstanding the foregoing, in no
event shall the Monthly Basic Rental per rentable square foot for any First Offer Space be less
than the Monthly Basic Rental per rentable square foot for the Premises set forth in Article
l.C, above, at the time of the commencement date for said First Offer Space. If Landlord and
Tenant agree on the basic lease terms, the First Offer Space shall be added to this Lease by
amendment. This right of first offer is a one-time right for each portion of the Project
constituting First Offer Space from time to time and shall not apply to said portion of the Project
constituting First Offer Space if it becomes available at any time after that portion of First
Offer Space is initially offered to Tenant pursuant to this provision. Upon the occurrence of any
Event of Default by Tenant under this Lease beyond any applicable notice and cure periods, the
Right of First Offer contained in this Article 32 shall be deemed to have been permanently waived
by Tenant and shall be of no further force or effect.




ARTICLE 33




MISCELLANEOUS





     (a) Severability; Entire Agreement. Any provision of this
Lease which shall prove to be invalid, void, or illegal shall in no way affect,
impair or invalidate any other provision hereof and such other provisions shall
remain in full force and effect. This Lease and the Exhibits and any Addendum
attached hereto constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, and no prior agreement or understanding
pertaining to any such matter shall be effective for any purpose. No provision
of this Lease may be amended or supplemented except by an agreement in
writing signed by the parties hereto or their successor in interest.



 - 50 -









 






     (b) Attorneys’ Fees; Waiver of Jury Trial.




          (i) In any action to enforce the terms of this Lease, including any suit
by Landlord for the recovery of rent or possession of the Premises, the losing party
shall pay the successful party a reasonable sum for attorneys’ fees in such suit and
such attorneys’ fees shall be deemed to have accrued prior to the commencement of
such action and shall be paid whether or not such action is prosecuted to judgment.




          (ii) Should Landlord, without fault on Landlord’s part, be made a party to
any litigation instituted by Tenant or by any third party against Tenant, or by or
against any person holding under or using the Premises by license of Tenant, or for
the foreclosure of any lien for labor or material furnished to or for Tenant or any
such other person or otherwise arising out of or resulting from any act or
transaction of Tenant or of any such other person, Tenant covenants to save and hold
Landlord harmless from any judgment rendered against Landlord or the Premises or any
part thereof and from all costs and expenses, including reasonable attorneys’ fees
incurred by Landlord in connection with such litigation.




          (iii) When legal services are rendered by an attorney at law who is an
employee of a party, attorneys’ fees incurred by that party shall be deemed to
include an amount based upon the number of hours spent by such employee on such
matters multiplied by an appropriate billing rate determined by taking into
consideration the same factors, including but not limited by, the importance of the
matter, time applied, difficulty and results, as are considered when an attorney not
in the employ of a party is engaged to render such service.




          (iv) EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR
DAMAGES FOR ANY BREACH UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY
RIGHT OR REMEDY HEREUNDER.



     (c) Time of Essence. Each of Tenant’s covenants herein is a
condition and time is of the essence with respect to the performance of every
provision of this Lease.



     (d) Headings; Joint and Several. The article headings
contained in this Lease are for convenience only and do not in any way limit or
amplify any term or provision hereof. The terms “Landlord” and “Tenant” as
used herein shall include the plural as well as the singular, the neuter shall



 - 51 -









 






include the masculine and feminine genders and the obligations herein imposed
upon Tenant shall be joint and several as to each of the persons, firms or
corporations of which Tenant may be composed.




          (e) Reserved Area. Tenant hereby acknowledges and agrees
that the exterior walls of the Premises and the area between the finished ceiling
of the Premises and the slab of the floor of the project thereabove have not been
demised hereby and the use thereof together with the right to install, maintain,
use, repair and replace pipes, ducts, conduits and wires leading through, under
or above the Premises in locations which will not materially interfere with
Tenant’s use of the Premises and serving other parts of the Project are hereby
excepted and reserved unto Landlord.




          (f) NO OPTION. THE SUBMISSION OF THIS LEASE
BY LANDLORD, ITS AGENT OR REPRESENTATIVE FOR
EXAMINATION OR EXECUTION BY TENANT DOES NOT
CONSTITUTE AN OPTION OR OFFER TO LEASE THE PREMISES
UPON THE TERMS AND CONDITIONS CONTAINED HEREIN OR A
RESERVATION OF THE PREMISES IN FAVOR OF TENANT, IT
BEING INTENDED HEREBY THAT THIS LEASE SHALL ONLY
BECOME EFFECTIVE UPON THE EXECUTION HEREOF BY
LANDLORD AND DELIVERY OF A FULLY EXECUTED LEASE TO
TENANT.




          (g) Use of Project Name; Improvements. Tenant shall not be
allowed to use the name, picture or representation of the Project, or words to
that effect, in connection with any business carried on in the Premises or
otherwise (except as Tenant’s address) without the prior written consent of
Landlord. In the event that Landlord undertakes any additional improvements
on the Real Property including, but not limited to, new construction or renovation or
additions to the existing improvements, Landlord shall not be liable to Tenant for any
noise, dust, vibration or interference with access to the Premises or disruption in Tenant’s
business caused thereby.




          (h) Rules and Regulations. Tenant shall observe faithfully and comply
strictly with the Rules and Regulations attached to this Lease as Exhibit “B” and made a
part hereof, and such other Rules and Regulations as Landlord may from time to time
reasonably adopt for the safety, care and cleanliness of the Project, the facilities
thereof, or the preservation of good order therein. Landlord shall not be liable to Tenant
for violation of any such Rules and Regulations, or for the breach of any covenant or
condition in any lease by any other tenant in the Project. A waiver by Landlord of any Rule
or Regulation for any other tenant shall not constitute nor be deemed a waiver of the Rule
or Regulation for this Tenant.



 - 52 -









 






          (i) Quiet Possession. Upon Tenant’s paying the Basic Rent, Additional
Rent and other sums provided hereunder and observing and performing all of the covenants,
conditions and provisions on Tenant’s part to be observed and performed hereunder, Tenant
shall have quiet possession of the Premises for the entire Term hereof, subject to the
provisions of Article 1 and Article 30 and of all other provisions of this
Lease.




          (j) Rent. All payments required to be made hereunder to Landlord
shall be deemed to be rent, whether or not described as such.




          (k) Successors and Assigns. Subject to the provisions of Article
15 hereof, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns.




          (1) Notices. Any notice required or permitted to be given hereunder shall
be in writing and may be given by personal service evidenced by a signed receipt or sent by
registered or certified mail, return receipt requested, addressed to Tenant at:


Thomas Weisel Partners Group, LLC One

Montgomery Street, 38th Floor San

Francisco, California 94104 Attention:

Corporate Facilities




     or to Landlord at:


TIAA-CREF Mortgage and Real Estate Division

730 3rd Avenue, 7th Floor New York, New York

10017 Attention: TIAA Real Estate Account





which shall be effective upon proof of delivery. The address for the payment of rent shall
be:


Department 00036

P.O. Box 39000

San Francisco, California 94139-0036





Either party may by notice to the other specify a different address for notice purposes
except that, upon Tenant’s taking possession of the Premises, the Premises shall constitute
Tenant’s address for notice purposes. A copy of all notices to be given to Landlord
hereunder shall be concurrently transmitted by Tenant to such party hereafter designated by
notice from Landlord to Tenant. Any notices sent by Landlord regarding or relating to
eviction procedures, including without limitation three day notices, may be sent by regular
mail.



 - 53 -









 






          (m) Right of Landlord to Perform. All covenants and




          agreements to be performed by Tenant under any of the terms of this Lease shall be performed
by Tenant at Tenant’s sole cost and expense and without any abatement of rent. If Tenant
shall fail to pay any sum of money, other than rent, required to be paid by it hereunder or
shall fail to perform any other act on its part to be performed hereunder, and such failure
shall continue beyond any applicable cure period set forth in this Lease, Landlord may, but
shall not be obligated to, without waiving or releasing Tenant from any obligations of
Tenant, make any such payment or perform any such other act on Tenant’s part to be made or
performed as is in this Lease provided. All sums so paid by Landlord and all reasonable
incidental costs, together with interest thereon at the rate often percent (10%) per annum
from the date of such payment by Landlord, shall be payable to Landlord on demand and Tenant
covenants to pay any such sums, and Landlord shall have (in addition to any other right or
remedy of Landlord) the same rights and remedies in the event of the nonpayment thereof by
Tenant as in the case of default by Tenant in the payment of the rent.




          (n) Access, Changes in Project Facilities, Name.




          (i) Every part of the Project except the inside surfaces of all walls,
windows and doors bounding the Premises (including exterior building walls, core
corridor walls and doors and any core corridor entrance), and any space in or
adjacent to the Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts,
electric or other utilities, sinks or other building facilities, and the use
thereof, as well as access thereto through the Premises for the purposes of
operation, maintenance, decoration and repair, are reserved to Landlord.




          (ii) Tenant shall permit Landlord to install, use and maintain pipes,
ducts and conduits within the walls, columns and ceilings of the Premises.




          (iii) Landlord reserves the right, without incurring any liability to
Tenant therefor, to make such changes in or to the Project and the fixtures and
equipment thereof, as well as in or to the street entrances, halls, passages,
elevators, stairways and other improvements thereof, as it may deem necessary or
desirable.




          (iv) Landlord may adopt any name for the Project and Landlord reserves the
right to change the name or address of the Project at any time. Notwithstanding the
foregoing, so long as Tenant (excluding assignees, subtenants and Tenant Licensees)
occupies more rentable square feet in the Project than any other tenant, Landlord
shall not adopt a name for the Project that is the name of a direct competitor of



 - 54 -









 






Tenant, nor shall Landlord grant monument signage rights to a direct competitor
of Tenant.




          (o) Signing Authority. If Tenant is a corporation, partnership or limited
liability company, each individual executing this Lease on behalf of said entity represents
and warrants that he or she is duly authorized to execute and deliver this Lease on behalf
of said entity in accordance with: (i) if Tenant is a corporation, a duly adopted resolution
of the Board of Directors of said corporation or in accordance with the by-laws of said
corporation, (ii) if Tenant is a partnership, the terms of the partnership agreement, and
(iii) if Tenant is a limited liability company, the terms of its operating agreement, and
that this Lease is binding upon said entity in accordance with its terms. Concurrently with
Tenant’s execution of this Lease, Tenant shall provide to Landlord a copy of: (i) if Tenant
is a corporation, such resolution of the Board of Directors authorizing the execution of
this Lease on behalf of such corporation, which copy of resolution shall be duly certified
by the secretary or an assistant secretary of the corporation to be a true copy of a
resolution duly adopted by the Board of Directors of said corporation and shall be in a form
reasonably acceptable to Landlord, (ii) if Tenant is a partnership, a copy of the provisions
of the partnership agreement granting the requisite authority to each individual executing
this Lease on behalf of said partnership, and (iii) if Tenant is a limited liability
company, a copy of the provisions of its operating agreement granting the requisite
authority to each individual executing this Lease on behalf of said limited liability
company. In the event Tenant fails to comply with the requirements set forth in this
subparagraph (o), then each individual executing this Lease shall be personally liable for
all of Tenant’s obligations in this Lease.




          (p) Identification of Tenant.




          (i) If Tenant constitutes more than one person or entity,
(A) each of them shall be jointly and severally liable for the keeping,
observing and performing of all of the terms, covenants, conditions and
provisions of this Lease to be kept, observed and performed by Tenant,
(B) the term “Tenant” as used in this Lease shall mean and include each
of them jointly and severally, and (C) the act of or notice from, or notice
or refund to, or the signature of, any one or more of them, with respect to
the tenancy of this Lease, including, but not limited to, any renewal,
extension, expiration, termination or modification, of this Lease, shall be
binding upon each and all of the persons or entities executing this Lease
as Tenant with the same force and effect as if each and all of them had so
acted or so given or received such notice or refund or so signed.




          (ii) If Tenant is a partnership (or is comprised of two or more persons,
individually and as co-partners of a partnership) or if Tenant’s interest in this
Lease shall be assigned to a partnership (or to



 - 55 -









 






two or more persons, individually and as co-partners of a partnership) pursuant
to Article 15 hereof (any such partnership and such persons hereinafter
referred to in this Article 33(p)(ii> as “Partnership Tenant”), the
following provisions of this Lease shall apply to such Partnership Tenant:




          (A) The liability of each of the parties comprising Partnership
Tenant shall be joint and several.




          (B) Each of the parties comprising Partnership
Tenant hereby consents in advance to, and agrees to be bound by,
any written instrument which may hereafter be executed,
changing, modifying or discharging this Lease, in whole or in
part, or surrendering all or any part of the Premises to the
Landlord, and by notices, demands, requests or other
communication which may hereafter be given, by the individual or
individuals authorized to execute this Lease on behalf of
Partnership Tenant under Subparagraph (o) above.




          (C) Any bills, statements, notices, demands,
requests or other communications given or rendered to Partnership
Tenant or to any of the parties comprising Partnership Tenant
shall be deemed given or rendered to Partnership Tenant and to all
such parties and shall be binding upon Partnership Tenant and all
such parties.




          (D) If Partnership Tenant admits new partners, all
of such new partners shall, by their admission to Partnership
Tenant, be deemed to have assumed performance of all of the
terms, covenants and conditions of this Lease on Tenant’s part to
be observed and performed.




          (E) Partnership Tenant shall give prompt notice
to Landlord of the admission of any such new partners, and, upon
demand of Landlord, shall cause each such new partner to execute
and deliver to Landlord an agreement in form satisfactory to
Landlord, wherein each such new partner shall assume
performance of all of the terms, covenants and conditions of this
Lease on Partnership Tenant’s part to be observed and performed
(but neither Landlord’s failure to request any such agreement nor
the failure of any such new partner to execute or deliver any such
agreement to Landlord shall terminate the provisions of
clause (D) of this Article 33(p)(ii) or relieve any such new partner
of its obligations thereunder).



 - 56 -









 






          (q) Survival of Obligations. Any obligations of Tenant occurring
prior to the expiration or earlier termination of this Lease shall survive such
expiration or earlier termination.




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




          (s) Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State of California. No conflicts of law rules of any state
or country (including, without limitation, California conflicts of law rules) shall be
applied to result in the application of any substantive or procedural laws of any state or
country other than California. All controversies, claims, actions or causes of action
arising between the parties hereto and/or their respective successors and assigns, shall be
brought, heard and adjudicated by the courts of the State of California, with venue in the
County of San Francisco. Each of the parties hereto hereby consents to personal jurisdiction
by the courts of the State of California in connection with any such controversy, claim,
action or cause of action, and each of the parties hereto consents to service of process by
any means authorized by California law and consent to the enforcement of any judgment so
obtained in the courts of the State of California on the same terms and conditions as if
such controversy, claim, action or cause of action had been originally heard and adjudicated
to a final judgment in such courts. Each of the parties hereto further acknowledges that the
laws and courts of California were freely and voluntarily chosen to govern this Lease and to
adjudicate any claims or disputes hereunder.




          (t) Consent. Whenever a party’s approval or consent is required
hereunder, then, unless another standard is stated hereunder, the party’s whose consent or
approval is required shall not unreasonably withhold or delay such consent or approval.




          (u) Exhibits and Addendum. The Exhibits and Addendum, if applicable, attached
hereto are incorporated herein by this reference as if fully set forth herein.




          (v) Tenant Signage. So long as Tenant occupies more rentable square feet
in the Project than any other tenant, Tenant shall be permitted to install and maintain,
at Tenant’s sole cost and expense, signage in the lobby of the Project. Notwithstanding
the foregoing, the location, size and design of said signage shall be subject to
Landlord’s reasonable approval. On or before the Expiration Date (or such date as Landlord
informs Tenant in



 - 57 -









 






writing that Tenant is no longer occupying more rentable square feet in the Project
than any other tenant), Tenant shall remove any such lobby signage at Tenant’s sole cost
and expense and Tenant shall return the lobby area to its original condition.



 - 58 -









 





          IN WITNESS WHEREOF, the parties have executed this Lease, consisting of the foregoing
provisions and Articles, including all exhibits and other attachments referenced therein, as of the
date first above written.




	 	 	 	 	 
	 	 	“LANDLORD”
	 	 	TEACHERS INSURANCE AND ANNUITY
	 	 	ASSOCIATION OF AMERICA, for the benefit of
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David F. Morrison
	 

	 	 	 	 
	 

	 	 	 	David F. Morrison, Associate Director
	 
	 	 	 	 
	 	 	“TENANT”
	 
	 	 	 	 
	 	 	THOMAS WEISEL PARTNERS GROUP, LLC, a
	 	 	Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Shaugn Stanley
	 

	 	 	 	 
	 

	 	 	 	Shaugn Stanley                CFO/Partner
	 

	 	 	 	[Printed Name and Title]


















 






FIRST AMENDMENT TO LEASE




          This First Amendment to Lease (“Amendment”) is entered into as of April 20, 2001 by and
between TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, for the benefit of its
Separate Real Estate Account (-Landlord”), and THOMAS WEISEL PARTNERS GROUP, LLC, a Delaware
limited liability company (“Tenant’’), with respect to the following facts and circumstances:




          A. Landlord and Tenant have previously entered into a Standard
Office Lease dated as of June 21, 2000 (the “Lease”) with respect to Suites 200, 300,
400 and 500 (the. “Premises”) of the Project commonly known as 88 Kearny Street,
San Francisco, California.




          B. Landlord and Tenant desire to amend the Lease on the terms and
conditions contained herein.




          NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and
Tenant hereby agree as follows:




     1. Definitions. Capitalized terms used and not otherwise defined in this
Amendment shall have the meanings set forth for them in the Lease.



     2. Amendments to Lease, The following amendments to the Lease shall be
effective as of the date of this Amendment:



          2.1 The definition of “Term” as set forth in Article 1(A) of the Lease
shall be amended in its entirety as follows:





“The period of time beginning with the Commencement Date (defined below) and
ending on the Expiration Date (defined below),”



          2.2 The definition of “Commencement Date” as set forth in Article
1(A) of the Lease shall be amended in its entirety as follows:





 









 








          “May 1,2001.”




          2.3 The definition of “Expiration Date” as set forth in Article 1(A) of
the Lease shall be amended in its entirety as follows:




          “April 30, 2012.”




          2.4 Article 1(C) of the Lease is hereby amended in its entirety as follows:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Monthly	 
	 	 	 	 	 	 	 	 	 	 	Basic	 
	 	 	 	 	 	 	 	 	 	 	Rental	 
	 	 	Annual	 	 	Monthly	 	 	per rentable	 
	“Lease Period	 	Basic Rental	 	 	Basic Rental	 	 	square foot	 
	 
	Commencement
Date through
April 30,2006
	 	$	4,046,550.00	 	 	$	337,212.50	 	 	$      6.25/rsf
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	May 1,2006 through
Expiration Date
	 	$	4,316,319.96	 	 	$	359,693.33	 	 	$6.66666/rsf





Notwithstanding the foregoing, provided that Tenant is not then in monetary default beyond
any applicable notice and cure period set forth in the Lease, Monthly Basic Rental for the
Premises shall be abated for the months of January, February and March-2002 (the “Abatement
Months”). Should Landlord deny abatement of Monthly Basic; Rental during any Abatement Month
due to Tenant’s monetary default, Monthly Basic Rental shall be abated for the next fiill
calendar month after Tenant has fully cured all monetary defaults under the Lease, so long as
such abatement is fully applied no later than June 30, 2002. Any abatement of Monthly Basic
Rent not utilized by Tenant in full compliance with this paragraph on or before June 30,
2002, shall be deemed waived by Tenant.”




     3. Delivery and Access. Tenant acknowledges and agrees that Landlord’s
delivery of the Premises to Tenant is subject to the existing occupancy of Charles



- 2 -









 




Schwab & Co., Inc. (“Schwab”). Notwithstanding Schwab’s occupancy of the
Premises, Tenant acknowledges and agrees that Tenant shall accept delivery of the
Premises on the Commencement Date subject to Schwab’s occupancy, and that,
concurrently herewith, Tenant and Schwab shall enter into a sublease agreement to
address Schwab’s continuing occupancy of the Premises. Any such sublease shall be
subject to Landlord’s review and approval.




     4. Miscellaneous. As additional consideration for this Amendment,
Landlord and Tenant hereby certify that:



          4.1 The Lease is in full force and effect.




          4.2 To the best of each party’s knowledge, there are no uncured
defaults on the part of Landlord or Tenant under the Lease.




     5. Commissions. Tenant represents and warrants that it has not had any
dealings with any realtors, brokers or agents in connection with the negotiation of this
Amendment, excepting only Insignia/ESG, Inc. and Montgomery Advisors. Tenant and
Landlord represent and warrant that there are no finder’s fees or brokerage fees arising
out of the transactions contemplated by this Amendment. Each party agrees to pay, and
hold the other harmless from, any cost, expense or liability for any compensation,
commission or charges claimed by any realtors, brokers or agents claiming by, through or
on behalf of it with respect to this Amendment and/or the negotiation hereof.



     6. Miscellaneous. Except as specifically provided herein, the terms and
provisions of the Lease are reaffirmed and continue in fill force and effect. All
references to the term “Lease” contained in the Lease shall mean the Lease, as amended
by this Amendment and any future amendments. This Amendment shall be binding upon the
heirs, administrators, successors and assigns (as the case may be) of the parties
hereto. The laws of the State of California shall govern the interpretation and
enforcement of this Amendment. The headings contained in this Amendment are for
reference purposes only and shall not in any way affect the meaning or interpretation of
this Amendment or any provision hereof. This Amendment may be executed in one or more
counterparts, all of which will be considered one and the same agreement, and each of
which will be deemed an original.



- 3 -









 





          IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be duly
executed as of the date first above written.




	 	 	 	 	 	 	 
	“Tenant”

	 	 	 	 	 	“Landlord”
	 
	 	 	 	 	 	 
	THOMAS WEISEL PARTNERS	 	 	 	TEACHERS INSURANCE AND
	GROUP, LLC,	 	 	 	ANNUITY ASSOCIATION OF
	a Delaware limited liability company	 	 	 	AMERICA, for the benefit of its
	 

	 	 	 	 	 	Separate Real Estate Account
	 
	 	 	 	 	 	 
	By:

	 	/s/ Shaugn Stanley
	 	By:
	 	/s/ David F. Morrison
	 	 	 	 	 	 	 
	 

	 	Shaugn Stanley CFO/Partner
	 	 	 	David F. Morrison,
	 

	 	[Printed Name and Title]
	 	 	 	Director







- 4 -









 








SECOND AMENDMENT TO LEASE




     THIS SECOND AMENDMENT TO LEASE (“Amendment”), dated as of the 8th day of October, 2003, is
made by and between THOMAS WEISEL PARTNERS GROUP LLC, a Delaware limited liability company
(“Tenant”), and TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, for the benefit of its
Separate Real Estate Account (“Landlord”).



RECITALS




          A. Tenant and Landlord are parties to that certain Standard Office Lease dated June 21, 2000,
amended by that certain First Amendment to Lease dated April 20, 2001 by and between Landlord and
Tenant (as amended, the “Lease”) with respect to Suites 200, 300,400 and 500 of the Project
commonly known as 88 Kearny Street, San Francisco, California (the “Project”).




          B. Tenant has notified Landlord that Tenant’s financial position has made it difficult for
Tenant to continue to pay rent as it accrues under the Lease.




          C. Tenant has requested that Landlord forbear from collecting a portion of the rent accruing
under the Lease until the Forbearance Outside Date (defined below) or until the occurrence of a
Termination Event (defined below). Landlord is willing to accede to such request on the terms and
conditions hereinafter set forth.




          D. Capitalized terms used and not otherwise defined in this Amendment shall have the
meanings set forth for them in the Lease.




          NOW, THEREFORE, in consideration of the Premises and the mutual covenants herein contained and
intending to be legally bound, the parties hereto (“Parties”) hereby agree as follows:




     1. Amendments to Lease. The following amendments to the Lease shall be
effective as of the Forbearance Effective Date (defined below):



          1.1 Article 1 (F) of the Lease is hereby deleted in its entirety and the following is
substituted in its place:




          “Security Deposit: $1,964,266.90 (the ‘Original Amount’), subject to adjustment, pursuant to
Article 4. below.”




          1.2 Article 4 of the Lease is hereby deleted in its entirety and the following is
substituted in its place:




ARTICLE 4




SECURITY DEPOSIT AND LETTER OF CREDIT




          (a) Tenant has deposited with Landlord the sum set forth in Article 1(F) of the Basic
Lease Provisions in the form of the Letter of Credit (defined below) as security for the full and
faithful performance of every provision of this Lease to be performed by Tenant (the ‘Security
Deposit’). If Tenant breaches any provision of this Lease, including but not limited to the payment




 









 







of rent or upon the occurrence of an Event of Default, Landlord may use all or any part of
this Security Deposit for the payment of any rent or any other sums in default, or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default. If
any portion of the Security Deposit is so used or applied, Tenant shall, within five (5) days after
written demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to the amount set forth in Article 1 (F). Tenant agrees that Landlord shall not be required
to keep the Security Deposit in trust, segregate it or keep it separate from Landlord’s general
funds, but Landlord may commingle the Security Deposit with its general funds and Tenant shall not
be entitled to interest on such deposit. At the expiration of the Term, and provided there exists
no default by Tenant hereunder, the Security Deposit or any balance thereof shall be returned to
Tenant (or, at Landlord’s option, to Tenant’s assignee), provided that subsequent to the expiration
of this Lease, Landlord may retain from said Security Deposit (i) an amount reasonably estimated by
Landlord to cover potential Direct Cost reconciliation payments due with respect to the calendar
year in which this Lease terminates or expires (such amount so retained shall not, in any event,
exceed ten percent (10%) of estimated Direct Cost payments due from Tenant for such calendar year
through the date of expiration or earlier termination of this Lease and any amounts so retained and
not applied to such reconciliation shall be returned to Tenant within thirty (30) days after
Landlord’s delivery of the Statement for such calendar year), (ii) any and all amounts reasonably
estimated by Landlord to cover the anticipated costs to be incurred by Landlord to remove any
signage provided to Tenant under this Lease and to repair any damage caused by such removal (in
which case any excess amount so retained by Landlord shall be returned to Tenant within thirty (30)
days after such removal and repair), and (iii) any and all amounts permitted by law or this Article
4. Tenant hereby waives any and all provisions of law, now or hereafter in effect in the State in
which the Project is located or any local government authority or agency or any political
subdivision thereof, that limit the types of defaults for which a landlord may claim sums from a
Security Deposit, it being agreed that Landlord, in addition, may claim those sums specified in
this Article 4 above and/or those sums reasonably necessary to compensate Landlord for any other
loss or damage, foreseeable or unforeseeable, caused by the acts or omissions of Tenant or any
officer, employee, agent, contractor or invitee of Tenant




          (b) Tenant shall provide the Security Deposit in the form of an irrevocable standby
letter of credit (‘Letter of Credit’) delivered to Landlord, in the face amount of $1,964,266.90,
with an expiration date no earlier than the date which is three hundred sixty-five (365) days after
the date of issuance, issued by JP Morgan Chase in form, content and conforming in all material
respects with the form attached hereto as Exhibit ‘E.’ Tenant shall have the right to
substitute a new letter of credit issuer from time to time provided such issuer is a money-center
bank (a bank which accepts deposits, maintains accounts and whose deposits are insured by the FDIC)
located in New York, New York and acceptable to Landlord in Landlord’s reasonable discretion, in
form and content conforming in all material respects with the form attached hereto as Exhibit
‘E’. The final Letter of Credit required under this Article 4 shall have an expiration date no
earlier than the date which is thirty (30) days after the Expiration Date of the Lease, provided
such Letter of Credit may provide that it may be terminated annually on not less than sixty (60)
days prior written notice to Landlord (a so-called ‘evergreen provision’). Tenant shall pay all
expenses, points and/or fees incurred by Tenant in obtaining or renewing the Letter of Credit. The
Letter of Credit shall be held by Landlord as security for the full and faithful performance by
Tenant of all terms, covenants and conditions of this Lease to be kept and performed by Tenant
during the Term of the Lease as such Term may be extended in accordance with the terms hereof,
including, without limitation, any obligation to repay the Forbearance Amount. If an Event of
Default has occurred, or if at any time during the Term (or any extension thereof) Tenant fails to
renew the Letter of Credit at least sixty




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(60) days before its expiration, Landlord may, but shall not be required to, make a full or
partial drawing upon the Letter of Credit for payment of any and all amounts to which Landlord is
entitled under the terms of this Lease (or Landlord may draw on the entire Letter of Credit if
Tenant fails to timely renew the same). Landlord may make multiple drawings under the Letter of
Credit if, and to the extent that, additional payments of Basic Rental or Additional Rent become
past due. Tenant shall, within five (5) days after written demand therefor, replenish the Letter of
Credit up to the original face amount of $1,964,266.90, or such reduced amount required under
Article 4(c), below. The use, application or retention of the Letter of Credit, 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 {he Letter of Credit, and shall not operate as a limitation on any recovery to which
Landlord may otherwise be entitled. Tenant acknowledges that Landlord has the right to transfer or
mortgage its interest in the Project 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 Letter of Credit
to the transferee or mortgagee, and in the event of such transfer, and provided such transferee or
mortgagee agrees in writing to recognize the Letter of Credit, Tenant shall look solely to such
transferee or mortgagee for the return of the Letter of Credit. The Letter of Credit, or any
balance thereof, shall be returned to Tenant within sixty (60) days following the Expiration Date
of the Term, or such later date of expiration of this Lease Term in the event extended in
accordance with the terms hereof.




          (c) Upon the first anniversary following the Final Payment Date (the ‘First Anniversary’),
provided (i) no Event of Default has occurred beyond any applicable notice and cure period and no
events or conditions exist which, with the passage of time or giving of notice or both, would
constitute an Event of Default under this Lease, and (ii) Tenant has demonstrated to Landlord, in
Landlord’s reasonable discretion, that Tenant has maintained an aggregate positive pre-tax net
income of at least $10,000,000.00 for at least one (1) year, the Original Amount of the Letter of
Credit required hereunder shall be reduced annually on a straight-line basis by an amount equal
to a fraction whose numerator is one (1) and whose denominator is the number of full calendar
years from the First Anniversary through the Expiration Date (the ‘Reduction Amount’). Upon each
anniversary of the First Anniversary, unless Landlord has notified Tenant on or before the date
which is ten (10) days prior to the end of said anniversary that an Event of Default exists or that
an event or condition exists which with the passage of time or giving of notice or both would
constitute an Event of Default under this Lease, Tenant shall be permitted to replace the Letter of
Credit then held by Landlord with a Letter of Credit reduced by the Reduction Amount in accordance
with the foregoing sentence. Notwithstanding anything to the contrary contained herein, if at any
point from and after the First Anniversary, Landlord determines that Tenant has failed to maintain
an aggregate positive pre-tax income of at least $10,000,000.00 at any time, Tenant shall no longer
be entitled to reduce the Letter of Credit in accordance with this Article 4(c), and Tenant shall
maintain the Letter of Credit in the face amount then required hereunder through the date which is
thirty (30) days after the Expiration Date.




          (d) On December 31, 2005 and again on December 31, 2006, Tenant shall be required to deliver
to Landlord an additional letter of credit or amendment to the existing Letter of Credit, each in
the face amount of $250,000.00 (each, an ‘Additional Letter of Credit’ and collectively, the
‘Additional Letters of Credit’). The Additional Letters of Credit shall comply in all respects with
the terms and conditions set forth for the Letter of Credit in this Article 4, including without
limitation, the obligation to annually renew the Additional Letters of Credit and Landlord’s
ability to draw on the Additional Letters of Credit for any reason permitted under this Lease, as





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amended from time to time; provided, however that the Additional Letters of Credit shall not
be subject to reduction under Article 4(c).”




          1.3 The following new Articles 19(h), 19(i) and 19(j) are hereby added to the Lease after
Article 19(g) thereof:




          "(h) Tenant’s failure to post a substitute letter of credit meeting the requirements of
Article 4 hereof within fifteen (15) days after the letter of credit issuer notifies Landlord that
it will not renew the Letter of Credit.




          (i) The occurrence of any ‘Event of Default’ under that certain Standard Office Lease by and
between Landlord and Tenant with respect to Suites 1310 and 2100 of the Project dated January 10,
2000, as amended.




          (j) Tenant’s failure to pay any Forbearance Amount as and when due and payable.”




          2. Forbearance. Subject to the conditions set forth in Section 2.1 below and
the termination provisions of Section 2.2 below, Landlord shall forbear from requiring Tenant to
pay a portion of the Monthly Basic Rental in a monthly amount equal to $112,404.16 (each, a
“Monthly Forbearance Amount” and collectively, the “Forbearance Amounts”) during the period from
the Forbearance Effective Date through and including the date which is twenty-four (24) months
after the Forbearance Effective Date (the “Forbearance Outside Date”), prorated for any partial
months, without in any way prejudicing Landlord’s right to collect accrued rent in accordance with
this Amendment and the Lease.




          2.1 Conditions. Landlord’s agreement to forbear shall not be effective until the date
(the “Forbearance Effective Date”) on which the last of the following conditions is satisfied:




               2.1.1 All representations and warranties set forth in this Amendment shall be true and
correct;



               2.1.2 Concurrently with the execution of this Amendment, Tenant shall have paid to Landlord
the amount of $25,000.00 to reimburse a portion of Landlord’s costs and expenses in connection with
the preparation, negotiation, and execution and delivery of this Amendment; and



               2.1.3 Tenant shall have delivered to Landlord a Letter of Credit conforming in all
respects with Article 4 of the Lease, as herein amended.



          2.2 Termination. Landlord’s agreement to forbear shall automatically terminate and all
then-accrued Forbearance Amounts shall be immediately due and payable to Landlord, without further
act or instrument, upon the occurrence of any of the following events (a “Termination Event”):




               2.2.1 Tenant repudiates, or asserts a defense to, any obligation or liability under the Lease
or this Amendment or makes or pursues a claim against Landlord which has previously been released
pursuant to Section 5 of this Amendment; or



               2.2.2 A petition for relief under any federal or state bankruptcy,



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reorganization or insolvency statute or law is filed by or against Tenant or any member of
Tenant; or




               2.2.3 Tenant fails to timely perform and observe any of the covenants, agreements and
obligations contained in the Lease or this Amendment that constitutes an Event of Default under the
Lease which would permit Landlord to exercise its right to terminate the Lease and seek to recover
possession of the Premises; or



               2.2.4 Tenant has met its Financial Threshold. For the purposes of this Amendment,
Tenant shall be deemed to have met its “Financial Threshold” upon the occurrence of any of
the following:



                    (a) Audited financial statements demonstrate that Tenant’s positive pre-tax net income in any
calendar year after 2002 is equal to or in excess of thirty-five percent (35%) of the positive
pre-tax net income of Tenant for calendar year 2000; or



                    (b) Tenant merges into or with another entity or Tenant is acquired by another entity, whether
or not deemed a Transfer under the Lease; or



                    (c) Tenant is required to begin accruing its obligation to repay the Forbearance Amounts in
its financial statements in accordance with generally accepted accounting principles, consistently
applied; or



                    (d) Tenant has achieved total annual revenue in any calendar year after 2002 of at least
sixty-five percent (65%) of Tenant’s total annual revenue for calendar year 2000.



          2.3 Covenants. Tenant shall keep true and correct financial books and records,
using generally accepted accounting principles. Tenant shall provide to Landlord the following:




               2.3.1 Within one hundred twenty (120) days after Tenant’s fiscal year end, Tenant’s annual
financial statements. These financial statements shall be audited by a certified public accountant
acceptable to Landlord;



               2.3.2 Within five (5) months after Tenant’s fiscal year end, signed copies of Tenant’s federal
tax return and all supporting schedules (excluding schedules listing individual partner
distributions);



               2.3.3 Within forty-five (45) days of the end of each quarter of Tenant’s fiscal year,
quarterly balance sheets and income statements for Tenant; and



               2.3.4 Promptly upon the request of Landlord, such other


information as Landlord may reasonably request concerning the affairs and properties of Tenant
relating to the Financial Thresholds of Tenant.




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          2.4 Repayment of Forbearance Amounts.




               2.4.1 Termination Event. Within five (5) business days after receipt of written notice
from Landlord that any Termination Event set forth in Sections 2.2.1 through 2.2.4 of this
Amendment has occurred, Tenant shall remit all accrued Forbearance Amounts to Landlord.



               2.4.2 Financial Threshold. Within five (5) business days after receipt of written
notice from Landlord that Tenant’s Financial Threshold has been met (a “Payment Event”), fifty
percent (50%) of all accrued Forbearance Amounts shall be remitted to Landlord by Tenant. The
remaining fifty percent (50%) of any accrued Forbearance Amounts shall be payable to Landlord
within five (5) business days after receipt of written notice from Landlord that Tenant’s Financial
Threshold has again been met at any time during the Lease Term and which is at least nine (9)
months after the occurrence of the first Payment Event (the “Final Payment Date”), whether or not
the Final Payment Date occurs before or after the Expiration Date. Tenant’s failure to timely remit
any Forbearance Amounts to Landlord when due shall be deemed an Event of Default under the Lease.



          2.5 Payments. All payments to be made by Tenant pursuant to this Amendment shall be
made by wire transfer, cashier’s check or other immediately available funds.




     3. No Waiver of Rights Under Lease. Neither the failure nor delay by Landlord to
exercise its rights or remedies nor the acceptance of any partial payments or any other partial
performance (whether any of the foregoing is before or after die date of this Amendment) nor any
provision of this Amendment shall amend, modify, supplement, extend, delay, renew, terminate,
waive, release or otherwise limit or prejudice Landlord’s rights and remedies or Tenant’s
obligations under the Lease (including, but not limited to, Landlord’s right to receive full
payment of rent as well as all payments set forth in this Amendment) except as specifically
provided in a written agreement between the Parties that is fully executed and delivered (and
except that, without modifying or amending the Lease, Landlord agrees to forbear to the extent
specifically provided in Section 2 hereof). In particular, Tenant understands that nothing referred
to above, including, without limitation, the acceptance by Landlord of any partial payments, shall
operate to prohibit, restrict or otherwise inhibit Landlord from exercising any right or remedy it
may have under the Lease (except that Landlord agrees to forbear to the extent specifically
provided in Section 2 hereof) or constitute a cure of any existing default, and, without
limitation, shall not extend any applicable forbearance or redemption period.



     4. Confirmation. Tenant will not seek or obtain any injunction or other contest
or hindrance of any remedies by Landlord, whether in state court, bankruptcy court or
otherwise, either before or after the Forbearance Outside Date.



     5. Release. Tenant hereby discharges and forever releases Landlord, its partners,
agents, employees, subcontractors and assigns from all obligations under the Lease arising prior to
the Forbearance Effective Date whether currently known or unknown, including all actions, claims or
demands that now exist or may hereafter accrue or be alleged against Landlord in any way relating
to the Lease and Tenant’s occupancy of the Premises, and Landlord shall not have any further
liability to Tenant except for any obligations arising after the date of this Amendment with
respect to the Lease. Tenant acknowledges that effective upon the date of this Amendment it has
waived the provisions of Section 1542 of the Civil Code of the State of California, which provides
as follows:



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




Tenant’s Initials: /s/ SS



     6. Intentionally Omitted.



     7. Voluntary Amendment. Each Party represents and warrants to each other Party that it
is represented by legal counsel of its choice, that it has consulted with counsel regarding this
Amendment, that it is fully aware of the terms contained herein and that it has voluntarily and
without coercion or duress of any kind entered into this Amendment.



     8. Tenant Representations and Warranties. As additional consideration for this
Amendment, Tenant hereby represents and warrants to Landlord that:



          8.1 The Lease is in full force and effect.




          8.2 Tenant is in possession of the Premises.




          8.3 Monthly Basic Rent has been paid through October 31, 2003.




          8.4 Tenant’s financial statements and supporting documentation delivered to Landlord as
evidence of Tenant’s need for the forbearance contemplated herein are true and correct in all
material respects.




          8.5 To the best of Tenant’s knowledge, there are no uncured defaults on the part of Landlord
or Tenant under the Lease.




     9. Brokers. Landlord and Tenant represent and warrant to one another that it
has not had any dealings with any realtors, brokers or agents in connection with the negotiation of
this Amendment, other than Insignia/ESG, Inc. (now CB Richard Ellis, Inc.), JRT Realty Group and
Montgomery Advisors. Landlord and Tenant shall hold one another harmless from and against any and
all liability, loss, damage, expense, claim, action, demand, suit or obligation arising out of or
relating to a breach by the indemnifying party of such representation or for any compensation,
commission or charges claimed by any realtors, brokers or agents claiming by, through or on behalf
of it with respect to this Amendment.



     10. Exhibits. Exhibit “E” as attached hereto is hereby incorporated into and made part
of the Lease and this Amendment.



     11. Miscellaneous. The laws of the State of California shall govern the interpretation
and enforcement of this Amendment. The headings contained in this Amendment are for reference
purposes only and shall not in any way affect the meaning or interpretation of this Amendment or
any provision hereof. Except as modified herein, all other terms and conditions of the Lease shall
remain unmodified and in full force and effect. Any conflict of terms and conditions between this



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Amendment, the Lease or previous amendments, the provisions of this Amendment shall prevail.
This Amendment may not be altered except by an agreement in writing signed by Landlord and Tenant.
This Amendment may be executed in one or more counterparts, all of which will be considered one and
the same agreement, and each of which will be deemed an original. Except as specifically provided
herein, the terms and provisions of the Lease are reaffirmed and continue in full force and effect.
This Amendment shall be binding upon the heirs, administrators, successors and assigns (as the case
may be) of the parties hereto.




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     IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be duly executed as of
the date first above written.



	 	 	 
	“Tenant”

	 	“Landlord”
	 
	 	 
	THOMAS WEISEL PARTNERS GROUP

	 	TEACHERS INSURANCE AND
	LLC, a Delaware limited liability company

	 	ANNUITY ASSOCIATION OF
	 

	 	AMERICA, for the benefit of its
	 

	 	Separate Real Estate Account
	 
	 	 
	/s/ Shaugn Stanley

	 	/s/ Denise Maxwell
	 	 	 
	Shaugn Stanley – CFO/Partner

	 	Associate Director
	[Printed Name and Title]

	 	[Printed Name and Title]







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