Document:

Exhibit 10.29

 

MOSYS, INC.

CHANGE-IN-CONTROL AGREEMENT

 

THIS CHANGE-IN-CONTROL AGREEMENT (this “Agreement”),
made and entered into as of February 21, 2008, by and between MoSys Inc.,
a Delaware corporation (“MoSys”), and Didier Lacroix (the “Officer”).

 

WHEREAS, MoSys considers it essential to its best
interests to foster the continued employment of key management personnel and
recognizes the distraction and disruption that the possibility of a
Change-in-Control (as defined in Section 1(d) below) may raise to the
detriment of MoSys and its stockholders; and

 

WHEREAS, MoSys has determined to take appropriate
steps to reinforce and encourage the continued attention and dedication of key
management personnel to their assigned duties in the face of a possible Change-in-Control;

 

NOW, THEREFORE, in consideration of the
premises and the mutual covenants contained herein, MoSys and the Officer
hereby agree as follows:

 

1.             DEFINITIONS

 

(a)           “Base Salary” shall mean the annual salary of the
Officer at the time of termination of his employment within the application of
this Agreement.

 

(b)           “Beneficiary” shall mean (i) the person or
persons named by the Officer, by notice to MoSys, to receive any compensation
or benefit payable under this Agreement or (ii) in the event of his death,
if no such person is named and survives the Officer, his estate.

 

(c)           “Board” shall mean the Board of Directors of
MoSys.

 

(d)           “Change-in-Control” means the occurrence of any of the
following:

 

(i) an acquisition after the Effective Date by an
individual, an entity or a group in one or more related transactions (excluding
MoSys or an employee benefit plan of MoSys or a corporation controlled by MoSys’
stockholders) of 45 percent or more of MoSys’ common stock or voting
securities; or

 

(ii) consummation of a complete liquidation or
dissolution of MoSys or a merger, consolidation, reorganization or sale of all
or substantially all of MoSys’ assets (collectively, a “Business Combination”)
other than a Business Combination in which (A) the stockholders of MoSys
receive 50 percent or more of the stock of the corporation resulting from the
Business Combination and (B) at least a majority of the board of directors
of such resulting corporation were incumbent directors of MoSys immediately
prior to the consummation of the Business Combination, and (C) after which
no individual, entity or group (excluding any corporation or other entity
resulting from the Business Combination or any employee benefit plan of such
corporation or of MoSys) who did not own 45 percent or more of the stock of the
resulting 

 

 

corporation
or other entity immediately before the Business Combination owns 45 percent or
more of the stock of such resulting corporation or other entity.

 

(e)           “Good Reason” means, without the Officer’s prior
written consent or acquiescence:

 

(i)  assignment to the Officer of duties
incompatible with the Officer’s position, failure to maintain the Officer in
this position and its reporting relationship or a substantial diminution in the
nature of the Officer’s authority or responsibilities;

 

(ii)  reduction in the Officer’s then current
Base Salary or in the bonus or incentive compensation opportunities or benefits
coverage available during the term of this Agreement, except pursuant to an
across-the-board reduction similarly affecting all senior executives of MoSys;

 

(iii)  termination of the Officer’s employment,
for any reason other than death, disability, voluntary termination or
Misconduct (as defined below);

 

(iv)  relocation of the Officer’s principal place
of business to a location more than 30 miles from the location of such office
on the date of this Agreement;

 

(v)  MoSys’s failure to pay the Officer any
material amounts otherwise vested and due the Officer hereunder or under any
plan, program or policy of MoSys; or

 

(vi)  failure of a successor to MoSys following a
Change-in-Control to expressly assume or affirm MoSys’s obligations under this
Agreement as specified in Section 6.

 

(f)            “Misconduct” means the commission of any act of
fraud, embezzlement or dishonesty or other violation of MoSys’s Code of
Business Conduct and Ethics for Employees, Executive Officers and Directors by
the Officer, any unauthorized use or disclosure by the Officer of confidential
information or trade secrets of MoSys or other breach by the Officer of a
material agreement between the Company and the Officer, or any other
intentional misconduct by the Officer adversely affecting the business affairs
of MoSys in a material manner.

 

(g)           “MoSys” when used herein shall be deemed to
refer to MoSys and any entity or entities that succeed to the assets and
properties of MoSys following a Change-in-Control, or any other corporation or
other entity which is a subsidiary or parent of such successor entity or
entities for whom the Officer is employed at any time within two years
following the Change-in-Control.

 

2.             TERM OF AGREEMENT

 

This Agreement shall be effective immediately upon its
execution by MoSys and the Officer (the “Effective Date”) and shall remain in
effect until the earliest to occur of:  (a) termination
of the Officer’s employment with MoSys following a Change-in-Control (i) by
reason of death or disability, (ii) by the Officer other than for Good
Reason, or (iii) by MoSys for Misconduct, or (b) two years after the
date of a Change-in-Control.

 

2

 

3.             CHANGE IN CONTROL BENEFITS

 

In the event of termination
of the Officer’s employment by the Officer for Good Reason within two years
following a Change-in-Control, the Officer will be entitled to the following:

 

(a)           Salary
and Benefits:

 

(i)  his Base Salary through the date of
termination;

 

(ii)  payment in lieu of any unused vacation, in
accordance with MoSys’s vacation policy and applicable laws;

 

(iii)  any other compensation or benefits,
including without limitation any benefits under long-term incentive
compensation plans, any benefits under equity grants and awards and employee
benefits under plans that have vested through the date of termination or to
which the Officer may then be entitled in accordance with the applicable terms
of each grant, award or plan; and

 

(iv)  reimbursement of any business expenses
incurred by the Officer through the date of termination but not yet paid to the
Officer.

 

(b)           Stock Option
Acceleration:

 

(i)During the
first year of MoSys employment of Officer, immediate and unconditional
vesting of 50 percent of the then unvested stock options and stock awards
previously granted to the Officer and, for the one-year period following
termination, the right to exercise any stock options or other awards held by
him.

 

(ii)After the first year of MoSys employment of the
Officer, immediate and
unconditional vesting of one year of the remaining then unvested stock options
and stock awards previously granted to the Officer and, for the one-year period
following termination, the right to exercise any stock options or other awards
held by him.

 

(c)           Release. 
MoSys will require, as a condition of receiving the Change-in-Control
payments under subsection (b) above, that the Officer execute a
general release substantially in the form attached as Exhibit A, which
upon execution shall be deemed incorporated herein by reference as a material
part of this Agreement.

 

4.             NO MITIGATION

 

MoSys
agrees that if the Officer’s employment with MoSys terminates, the Officer will
not be obligated to seek other employment or to attempt to reduce any amount
payable to the Officer under this Agreement. Further, no amount of any payment
under this Agreement shall be reduced by any compensation earned by the Officer
as the result of employment by a subsequent employer or otherwise.

 

 

3

 

5.             NOTICES

 

Any
notice or other communication required or permitted under this Agreement shall
be in writing and shall be deemed to have been duly given when delivered by
hand, electronic transmission (with a copy following by hand, mail or overnight
courier), by registered or certified mail, postage prepaid, return receipt
requested or by overnight courier addressed to the other party. All notices
shall be addressed as follows, or to such other address or addresses as may be
substituted by notice in writing:

 

	
  To
  MoSys Inc.:

  	
   

  	
  To
  the Officer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  755
  N Mathilda Drive

  	
   

  	
   

  
	
  Suite 100

  	
   

  	
   

  
	
  Sunnyvale,
  CA 94085

  	
   

  	
   

  
	
  Attention:
  Chairman, Compensation

  Committee of the Board of Directors

  	
   

  	
  Fax:

  
	
  Fax:
  (408) 731-1893

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

6.             SUCCESSORS

 

(a)           MoSys’s Successors. 
Any successor to MoSys (whether direct or indirect and whether by
purchase, lease, merger, consolidation, liquidation or otherwise) or to all or
substantially all of MoSys’s business and/or assets shall assume MoSys’s
obligations under this Agreement in the same manner and to the same extent as
MoSys would be required to perform such obligations in the absence of a succession.

 

(b)           Officer’s Successors. 
Without the written consent of MoSys, the Officer can not assign or
transfer this Agreement or any right or obligation under this Agreement to any
other person or entity.  Notwithstanding
the foregoing, the terms of this Agreement and all rights of the Officer under
this Agreement shall inure to the benefit of, and be enforceable by, the
Officer’s personal or legal representatives, executors, administrators,
successors, heirs, distributes, devisees and legatees.

 

7.             GENERAL PROVISIONS

 

(a)           Amendments. 
No provision of this Agreement may be amended, modified or waived unless
such amendment, modification or waiver shall be agreed to in writing and signed
by the Officer and by a member of the Compensation Committee of the Board.

 

(b)           Severability. 
If any provision of this Agreement shall be determined to be invalid or
unenforceable by a court of competent jurisdiction, the remaining provisions of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law. 
If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
shall nevertheless continue in full force without being impaired or invalidated
in any way.

 

4

 

(c)           Governing Law. 
This Agreement shall be construed, interpreted and governed in
accordance with the laws of the state of California without regard to its
conflicts of laws rules.

 

(d)           Inconsistencies. 
The terms of this Agreement supersede any inconsistent prior promises,
policies, representations, understandings, arrangements or agreements between
the parties, whether by employment contract or otherwise.

 

(e)           Survival. 
Notwithstanding the termination of the term of this Agreement, the
duties and obligations of MoSys, if any, following the termination of the
Officer’s employment following a Change-in-Control shall survive indefinitely.

 

(f)            Withholding. 
MoSys may deduct and withhold from any payments hereunder the amount
that MoSys, in its reasonable judgment, is required to deduct and withhold for
any federal, state or local income or employment taxes.

 

(g)           No Other Compensation;
Employee at Will.  Except as provided in Section 3 above,
no amount or benefit shall be payable to the Officer under this Agreement in
respect of termination of the Officer’s employment within two years following a
Change-in-Control.  This Agreement shall
not be construed as creating an express or implied contract of employment and,
except as otherwise agreed in writing between the Officer and MoSys, the
Officer is and shall remain an “employee at will” and shall not have any right
to be retained in the employ of MoSys.

 

(h)           Counterparts. 
This Agreement may be executed in counterparts.

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

 

	
   

  	
  MOSYS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Len Perham

  
	
   

  	
  Len Perham

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Didier Lacroix

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Didier Lacroix

  
	
   

  	
  (Signature)

  

 

5

 

EXHIBIT A

RELEASE AGREEMENT

 

In consideration of the benefits I will receive under MoSys Inc.’s
Change-in-Control Agreement, I hereby release, acquit and forever discharge
MoSys Inc. (the “Company”), its parents, subsidiaries, predecessors, successors
and affiliates, and each of their respective officers, directors, agents,
servants, employees, attorneys shareholders, and assigns (the “Released Parties”),
of and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys’ fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, arising out of or in any way related to
agreements, events, acts or conduct at any time prior to and including the date
I sign this Release Agreement. This release of claims includes, but is not
limited to:

 

	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  any
  and all claims and demands directly or indirectly arising out of or in any
  way connected with my employment with the Company or the termination of that
  employment, including, but not limited to, claims, demands or agreements
  related to salary, bonuses, commissions, vacation pay, personal time off, fringe
  benefits, expense reimbursements, sabbatical benefits, severance benefits,
  stock, stock options, any other ownership or equity interest in the Company,
  or any other form of compensation or benefit;

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  claims
  pursuant to any federal, state or local law, statute, common law or cause of
  action including, but not limited to, Title VII of the federal Civil
  Rights Act of 1964, as amended, or any other statute, agreement or source of
  law, the federal Age Discrimination in Employment Act of 1967, as amended
  (“ADEA”), the federal Americans with Disabilities Act of 1990, the Family and
  Medical Leave Act, the Employee Retirement Income Security Act, the Equal Pay
  Act, the Worker Adjustment and Retraining Notification Act, the California
  Fair Employment and Housing Act, as amended, and the California Labor Code;

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  all
  tort law claims, including claims for fraud, misrepresentation, defamation,
  libel, emotional distress and breach of the implied covenant of good faith
  and fair dealing; and

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  all
  claims arising under contract law, or the law of wrongful discharge,
  discrimination or harassment.

  

 

I
represent that I have no lawsuits, claims or actions pending in my name, or on
behalf of any other person or entity, against any of the Released Parties. I
agree that in the event I bring a claim covered by this release in which I seek
damages against the Company or in the event I seek to recover against the
Company in any claims brought by a governmental agency on my behalf, this
Agreement shall serve as a complete defense to such claims.

 

ADEA
Waiver and Release:  I acknowledge
that I am knowingly and voluntarily waiving and releasing any rights I may have
under ADEA. I also acknowledge that the consideration given for the waiver and
release herein is in addition to anything of value to which I was already
entitled. I further acknowledge that I have been advised by this writing, as
required by the ADEA, that: (a) my waiver and release do not apply to any
rights or claims that may arise after 

 

6

 

the
execution date of this Agreement; (b) I have been advised hereby that I
have the right to consult with an attorney prior to executing this Agreement; (c) I
have 21 days from the date I receive this Agreement to consider this Agreement
(although I voluntarily may choose to execute this Agreement earlier); (d) I
have seven days following the execution of this Agreement to revoke the
Agreement; and (e) this Agreement shall not be effective until the later
of (i) the date upon which the revocation period has expired, which shall
be the eighth day after I execute this Agreement, or (ii) the date I
return this Agreement, fully executed, to the Company.

 

I acknowledge that for this Release Agreement to be effective, I must
sign and return it to the Company within 21 days after the date I receive it
and I must not revoke it at any time during the above-referenced seven-day
revocation period.

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “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.” I hereby expressly waive
and relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any unknown or
unsuspected claims I may have against any of the Released Parties.

 

I understand that this Release Agreement, together with the
Change-in-Control Agreement, constitutes the complete, final and exclusive
embodiment of the entire agreement between the Company and me with regard to
the subject matter hereof. I am not relying on any promise or representation by
the Company that is not expressly stated in this Release Agreement.

 

 

	
   

  	
  Didier
  Lacroix

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	 

	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	 

	
   

  	
  Date:

  	
   

  	 

	
   

  	 

	
  ACCEPTED AND AGREED:

  	 

	
   

  	 

	
   

  	 

	
  MOSYS INC.

  	 

	
   

  	 

	
   

  	 

	
  By:

  	
   

  	
   

  	 

	
   

  	 

	
  Its: CEO, Len Perham

  	 

	
   

  	 

	
  Date:

  	
   

  	
   

  	 

									

 

7Exhibit 10.47

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

COMMERCIAL
SUBLEASE AGREEMENT

 

This Sublease Agreement (“Sublease”)
is entered as of December 22, 2006 by and between Oncology Therapeutics
Network Joint Venture, L.P., a Delaware limited partnership (“Sublandlord”) and
Sunesis Pharmaceuticals, Inc., a Delaware corporation (“Subtenant”).  Sublandlord and Subtenant may individually be
referred to as a “Party” or collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Sublandlord entered into a lease
agreement dated June 1, 2003 and subsequently amended on December 15,
2004 and March 1, 2005, between the Sublandlord and Kashiwa Fudosan
America, Inc. (“Master Landlord”) for space located at 395 Oyster Point Blvd.,
South San Francisco, CA (the “Master Premises) and for a term ending on February 28,
2014 (the “Master Lease Agreement”); and

 

WHEREAS, Subject to the Master Landlord’s consent,
Sublandlord and Subtenant wish to enter into this Sublease for a portion of the
Master Premises.

 

NOW, THEREFORE, the Parties agree as follows:

 

1.             RECITALS: The Recitals are incorporated herein in
their entirety.

 

2.             PREMISES:  Subject
to the terms and conditions of the Master Lease Agreement, a true and complete
copy of which is attached hereto as Exhibit A and incorporated herein by
reference, Sublandlord hereby subleases to Subtenant the Premises located at:
395 Oyster Point Marina Plaza, 395 Oyster Point Blvd., South San Francisco,
California 94080.  The subleased premises
consist of those 15,378 rentable square feet of the Master Premises located on
the 4th floor (Suites 400, 401 and 402) as shown on
the floor plan attached hereto as Exhibit B (collectively, the “Premises”).
Subtenant hereby subleases the Premises from Sublandlord for the term and
rental and upon the other terms and conditions hereinafter set forth, to be used
and occupied by Subtenant solely for the purpose of office space and for no
other purpose. Terms which are capitalized in this Sublease and not defined
herein shall have the meanings set forth in the Master Lease.

 

3.             SUBLEASE TERM:  The
term of the Sublease will be for a period of seventy four (74) months, beginning on March 1,
2007 (begin date) and ending on April 30, 2013 (end date) (the “Sublease Term”).

 

4.             OPTION TO RENEW:  Provided
that Subtenant is not in default under this Sublease at the time of the notice,
Subtenant shall have one (1) option to renew this Sublease of the Premises for
the period (the “Option Period”) which is the balance of the Master Lease term
expiring February 28, 2014.  Subtenant
must exercise this option by providing written notice to Sublandlord at lease 9
(nine) months prior to the end of the Sublease Term (i.e., not later than
August 1, 2012).  The Base Rent for the
option period shall be fixed at $2.25 per rentable square foot, with the Base
Year of 2007.

 

5.             SUBLEASE COMMENCEMENT:  The Sublease
Commencement Date shall be March 1, 2007. 
Possession of the Premises shall be delivered to Subtenant two (2)
business days after the fulfillment of all the conditions described in Section
16, in order for Subtenant to complete its planned improvements (the “Early
Occupancy”).  Subtenant shall be subject
to all of the terms of this Sublease during the Early Occupancy, except for the

 

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

obligation to pay Base Rent.

 

6.             LEASE PAYMENT AMOUNTS:  Subtenant
agrees to pay to Sublandlord as Base Rent for the Premises the amounts shown on
the following Base Rent schedule:

 

	
  Months

  	
   

  	
  Base
  Rent/Square Foot/Month (Fully Serviced)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1 — 3

  	
   

  	
  Base Rent Abated

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4 — 12

  	
   

  	
  $             1.95 FS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13 — 24

  	
   

  	
  $             2.00 FS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  25 — 36

  	
   

  	
  $             2.05 FS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  37 — 48

  	
   

  	
  $             2.10 FS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  49 — 60

  	
   

  	
  $             2.15 FS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  61 — 74

  	
   

  	
  $             2.20 FS

  	
   

  

 

7.             PAYMENT: 
Upon Sublease execution, Subtenant will provide Sublandlord with (i) the
Base Rent payable for the fourth month of the Sublease Term, (ii) evidence of
the insurance coverage required of Subtenant under this Sublease, and (iii) the
security deposit, as described in Section 13.  Thereafter, Subtenant agrees to pay
Sublandlord each month in advance on the first day of each month at: 395 Oyster
Point Blvd. Suite [*], South San Francisco, CA
94080 (address for Base Rent payment), or at any other address designated by
Sublandlord.  All
payments due from Subtenant to Sublandlord hereunder shall be made to
Sublandlord without deduction or offset whatsoever, in lawful money of the
United States of America at 395 Oyster Point Boulevard, South San Francisco, CA,
94080, or to such other person or at such other place as Sublandlord may from
time to time designate by notice to Subtenant.

 

Sublandlord hereby
acknowledges that Sublandlord’s failure to pay the rent and other sums owing by
Sublandlord to Master Landlord under the Master Lease Agreement will cause
Subtenant to incur damages, costs and expenses not contemplated by this
Sublease, especially in those cases where Subtenant has paid sums to Sublandlord
hereunder which correspond in whole or in part to the amounts owing by
Sublandlord to Master Landlord under the Master Lease Agreement. 
Accordingly, Subtenant shall have the right to pay all rent and other sums
owing by

 

 

2

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Subtenant to Sublandlord hereunder for those items
which also are owed by Sublandlord to Master Landlord under the Master Lease
Agreement directly to Master Landlord on the following terms and conditions:

 

(a)           Either (i) Subtenant reasonably
believes that Sublandlord has failed to make any payment required to be made by
Sublandlord to Master Landlord under the Master Lease Agreement and Sublandlord
fails to provide adequate proof of payment within five (5) business
days after Subtenant’s written demand requesting such proof; or (ii) Subtenant
reasonably believes that Sublandlord shall fail to make any payment required to
be made by Sublandlord to Master Landlord under the Master Lease Agreement and
Sublandlord fails to provide assurance of future performance in form reasonably
satisfactory to Subtenant within five (5) business days after
Subtenant’s written demand requesting such assurance.

 

(b)           Subtenant shall not prepay any
amounts owing by Sublandlord without the consent of Sublandlord, which consent
Sublandlord shall have the right to withhold in Sublandlord’s sole discretion.

 

(c)           Subtenant shall provide to
Sublandlord concurrently with any payment to Master Landlord reasonable
evidence of such payment.

 

(d)           If Sublandlord notifies Subtenant
that it disputes any amount demanded by Master Landlord, Subtenant shall not
make any such payment to Master Landlord unless Master Landlord has provided a
three-day notice to pay such amount or forfeit the Master Lease Agreement.

 

Any sums paid directly by
Subtenant to Master Landlord in accordance with this Section 7 shall be
credited toward (i) the amounts payable by Subtenant to Sublandlord under this
Sublease.and (ii) the amounts payable by Sublandlord to Master Landlord under
the Master Lease Agreement.

 

8.             LATE FEE:  Subtenant
hereby acknowledges that late payment by Subtenant to Sublandlord of rent and
other amounts due hereunder will cause Sublandlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely difficult
to ascertain.  Such costs include, but
are not limited to, processing and accounting charges, and late charges which
may be imposed on Sublandlord by the terms of the Master Lease Agreement.  Accordingly, if any installment of rent or
any other sums due from Subtenant shall not be received by Sublandlord by the
due date, Subtenant shall pay to Sublandlord a late charge equal to three
percent (3%) of such overdue amount (with late charge to be payable if the sum
is not paid within ten (10) days following the due date).  The Parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Sublandlord will
incur by reason of late payment by Subtenant. 
Acceptance of  such late charge by
Sublandlord shall in no event constitute a waiver of Subtenant’s default with
respect to such overdue amount, nor prevent Sublandlord from exercising any of
the other rights and remedies granted hereunder.  Notwithstanding the foregoing, Subtenant
shall not be assessed a late charge for the first late payment within any
twelve (12) month period

 

3

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

9.             INSUFFICIENT FUNDS:  Subtenant agrees to pay the charge of $150
for each check that is returned for lack of sufficient funds.

 

10.          OPERATING EXPENSES AND PROPERTY TAXES: 
The Sublease shall be full service in nature.  Subtenant shall be responsible for its
Pro-Rata Share of Operating Expenses without mark-up, increases in Real Estate
Taxes over and above the 2007 Base Year, and charges for utilities, but only to
the extent that such amounts (i) apply to the Sublease Term; (ii) are
chargeable to Subtenant and the Premises pursuant to Section 4.2 of the Master
Lease Agreement, as incorporated herein; and (iii) are equitably allocable to
Subtenant (excluding, by way of example, charges caused solely by Sublandlord
or its employees, and including, by way of example, one hundred percent (100%)
of all charges caused solely by Subtenant or its employees).  Prior to Sublease execution, Sublandlord will
provide Subtenant with (i) a summary of Operating Expenses paid by Sublandlord
since January 1, 2005; and (ii) the summary of 2006 projected operating
expenses that Sublandlord received from Master Landlord.  For purposes of this Sublease, the Pro-Rata
Share of Subtenant shall mean 6.608% of the Building and 3.311% of the Complex.

 

11.          SUBTENANT IMPROVEMENTS:  In lieu of
providing Subtenant with a subtenant improvement allowance, Sublandlord has
agreed to abate the first three installments of monthly Base Rent due under this
Sublease (i.e., as stated in Section 6 above, there shall be no Base Rent due
for the first three (3) months of the Sublease Term). Any tenant improvements
made by Subtenant shall be subject to (i) the terms of this Sublease (including
the incorporation of the applicable terms of the Master Lease Agreement), and
(ii) the requirement that the proposed tenant improvements be generally as
shown on the plans for the tenant improvements to the Premises (“Proposed Plan
for Improvements”), attached hereto as Exhibit C.

 

12.          BUSINESS TAXES:  Subtenant
shall pay all business and other taxes (unrelated to Sublandlord’s or Master
Landlord’s income or revenue), if any, in respect of the business carried on in
or upon the Premises.

 

13.          SECURITY DEPOSIT:  At the signing
of this Sublease, Subtenant shall deposit with Sublandlord, in trust, a
security deposit of $59,974.20 as security for the performance by Subtenant of
the terms under this Sublease and for any damages caused by Subtenant, its
employees, agents or visitors to the Premises during the Sublease Term.  However, Subtenant’s liability under this
Sublease shall not be limited to the balance of the security deposit.  Subtenant shall not apply or deduct any
portion of any security deposit from the last or any month’s rent.  Subtenant shall not use or apply any such
security deposit at any time in lieu of payment of rent.  In the event of a default by Subtenant,
Sublandlord may use or apply, as is reasonably necessary, all or any portion of
the security deposit to cure such default of Subtenant.  In such event, Subtenant shall restore the
security deposit to its original amount, or one-half of its original amount, as
applicable, within 10 business days of Landlord’s written notice to do the
same.

 

Provided  Subtenant is not then in default of any of
its obligations under the Sublease beyond applicable notice and cure periods,
at the end of the 36th month of the Sublease Term, 1/2  (one-half) of
the security deposit in the amount of $29,987.10 shall be applied to Subtenant’s
payment of its rental obligation for the 37th month of the Sublease Term.

 

After the termination of
the Sublease or any earlier termination of the Sublease, any remaining portion
of the security deposit shall be returned to Subtenant in accordance with the
provisions of § 1950.7 of the California Civil Code.

 

4

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

14.          NON-DISTURBANCE; QUIET ENJOYMENT:  Sublandlord
agrees not to amend or modify the Master Lease Agreement in any way which
increases Subtenant’s obligations or adversely affects Subtenant’s rights.

 

Subtenant
shall be entitled to quiet enjoyment of the Premises during the Sublease Term,
and neither Sublandlord nor Master Landlord will interfere with that right, as
long as Subtenant pays the rent in a timely manner and performs all other
obligations under this Sublease.  In the
event, however, that Sublandlord defaults in the performance or observance of
any of Sublandlord’s remaining obligations under the Master Lease Agreement or
fails to perform Sublandlord’s stated obligations under this Sublease, then
Subtenant shall give Sublandlord notice specifying in what manner Sublandlord
has defaulted, and if such default shall not be cured by Sublandlord within
thirty (30) days thereafter (except that if such default cannot be cured within
said thirty (30) day period, this period shall be extended for an additional
reasonable time, provided that Sublandlord commences to cure such default
within such thirty (30) day period and proceeds diligently thereafter to effect
such cure as quickly as possible), then Subtenant shall be entitled to cure
such default and promptly collect from Sublandlord Subtenant’s reasonable
expenses in so doing (including, without limitation, reasonable attorneys’ fees
and court costs), or, at Subtenant’s option, to offset such reasonable expenses
against all future payments of rent due under this Sublease.  Subtenant shall not be required, however, to
wait the entire cure period described herein if earlier action is required to
comply with the Master Lease Agreement or with any applicable governmental law,
regulation or order.  Sublandlord shall
promptly send to Subtenant copies of all notices and other communications it
shall send to and receive from Master Landlord that relate to the Premises.

 

15.          USE:  Subtenant shall use the
Premises only for professional and administrative general office use and as
described in the Master Lease Agreement.

 

16.          POSSESSION AND
SURRENDER OF PREMISES:  Subtenant
shall be entitled to possession of the Premises two (2) days after all of the
following conditions are met: (i) Subtenant meeting the insurance requirements
outlined in Section 18 below, (ii) approval from Master Landlord of this
Sublease, and (iii) this Sublease is executed and delivered by each of the
Parties.  At the expiration of the
Sublease, Subtenant shall peaceably surrender the Premises to Sublandlord or
Sublandlord’s agent in the same condition it was in as of the Commencement
Date, reasonable wear and tear, condemnation, casualty, and Hazardous Materials
not released by Subtenant and items listed on Exhibit D, excepted.

 

17.          CONDITION OF PREMISES:  Sublandlord
shall disclose actual knowledge (i.e., the actual knowledge of Sublandlord’s
current operations personnel) of the existence of any underground storage
tanks, sumps, piping and any other factor indicating the possible presence of
Hazardous Materials in, on or around the Master Premises; any adverse present
or contemplated use restrictions of the Premises; material physical defects;
and any other material matter affecting its condition or value (collectively,
the “Disclosure List”).  A copy of the
Disclosure List is attached hereto as Exhibit D.

 

Subtenant
or Subtenant’s agent has inspected the Premises, the fixtures, the grounds, Building
and improvements (limited to the electrical, HVAC and fire sprinkler systems,
security and environmental aspects) and acknowledges that the Premises are in
good and acceptable condition and suitable for Subtenant’s intended use. If at
any time during the term of this Sublease, in

 

5

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Subtenant’s
opinion, the conditions change, Subtenant shall promptly provide reasonable
notice to Sublandlord.

 

Sublandlord shall
indemnify Subtenant for all Hazardous Materials on-site or within the Building
which are introduced by Sublandlord. 
Additionally, Subtenant shall not be liable for any charges incurred,
damage to the Premises, or any other fees or losses relating to any period
prior to the Commencement Date. 
Subtenant shall indemnify Master Landlord and Sublandlord for all
Hazardous Materials on-site or within the Building which are introduced by Subtenant.

 

18.          OBLIGATIONS UNDER MASTER LEASE
AGREEMENT:  Sublandlord represents and warrants
that:  (i) the Master Lease
Agreement is in full force and effect, (ii) Sublandlord is not in default
under the Master Lease Agreement and, to Sublandlord’s knowledge, Master
Landlord is not in default thereunder, (iii) Sublandlord has previously
furnished to Subtenant a true, accurate and complete copy of the Master Lease
Agreement and all amendments thereto, 
and (iv) as of the date of this Sublease, the Sublandlord’s
leasehold estate is not encumbered by any deed of trust or mortgage financing.

 

Sublandlord
shall fully perform all of its obligations under the Master Lease Agreement not
assumed by Subtenant hereunder, including, without limitation, the prompt
payment to Master Landlord paid by Subtenant to Sublandlord hereunder.

 

Sublandlord
shall do either of the following with respect to the obligations of the Master
Landlord under the Master Lease Agreement: 
(i) perform all such obligations, or (ii) use Sublandlord’s
diligent good faith efforts to cause Master Landlord to perform such
obligations for the benefit of Subtenant. 
Such diligent good faith efforts shall include, without limitation: upon
Subtenant’s written request, immediately notifying Master Landlord of its
nonperformance under the Master Lease Agreement and using commercially
reasonable efforts to cause Master Landlord perform Master Landlord’s
obligations under the Master Lease Agreement.

 

This Sublease and
all rights of Subtenant hereunder and with respect to the Premises are subject
to the terms, conditions and provisions of the Master Lease Agreement, except
as otherwise provided herein.  Except as
otherwise specifically provided in this Sublease, Subtenant shall be entitled
during the Sublease Term to receive from Master Landlord all services,
utilities, repairs and facilities which Master Landlord is required to provide
pursuant to the terms of the Master Lease Agreement insofar as such services,
utilities, repairs and facilities pertain to the Premises. Subtenant hereby

 

6

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

assumes and agrees
to perform faithfully and be bound by, with respect to the Premises, all of
Sublandlord’s obligations, covenants, agreements and liabilities under the
Master Lease Agreement, except for the covenant of the Sublandlord to pay
Master Landlord the Rent pursuant to Paragraph 1.6 of the Master Lease Agreement,
and except as such terms, covenants, conditions and agreements are modified
hereby, are not incorporated herein, or are inconsistent with the terms of this
Sublease.

 

Without limitation
of the foregoing:

 

(i) Subtenant shall not make any changes, alterations
or additions in or to the Premises, except as otherwise expressly provided
herein;

 

(ii) If Subtenant desires to take any other
action and the Master Lease Agreement would require that Sublandlord obtain the
consent of Landlord before undertaking any action of the same kind, Subtenant
shall not undertake the same without the prior written consent of Sublandlord.
Sublandlord may condition its consent on the consent of Master Landlord being
obtained;

 

(iii) All rights given to Master Landlord and
its agents and representatives by the Master Lease Agreement to enter the
premises covered by the Master Lease Agreement shall inure to the benefit of
Sublandlord and their respective agents and representatives with respect to the
Premises; provided that such right of entry shall also be subject to all
applicable restrictions found in the Master Lease Agreement, as incorporated
herein;

 

(iv) Sublandlord shall also have all other
rights, and all privileges, options, reservations and remedies, granted or
allowed to, or held by, Master Landlord under the Master Lease Agreement,
except as provided herein;

 

(v) Subtenant shall maintain insurance of the
kinds and in the amounts required to be maintained by Sublandlord under the
Master Lease Agreement.  All policies of
liability insurance shall name as additional insureds the Master Landlord and
Sublandlord and their respective officers, directors or partners, as the case
may be, and the respective agents and employees of each of them; and

 

(vi) Neither Sublandlord nor Subtenant shall do
anything or suffer or permit anything to be done which could result in a
default under the Master Lease Agreement or permit the Master Lease Agreement
to be cancelled or terminated. 
Furthermore, each party will comply with the terms therein and will
avoid actions or inactions that would constitute a breach or default of
Sublandlord’s obligations in the Master Lease Agreement.

 

Except as set forth below, the terms and conditions
of this Sublease shall include all of the terms of the Master Lease Agreement
and such terms are incorporated into this Sublease as if fully set forth
herein, except that: (a) each reference in such incorporated sections to “Lease”
shall be deemed a reference to “Sublease”; (b) each reference to “Landlord”
and “Tenant” shall be
deemed a reference to “Sublandlord” and “Subtenant”, respectively, except as
otherwise expressly set forth herein; (c) the following
provisions shall not be included: Sections 1.1-1.5,

 

7

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

1.6.2,
1.6.3, 3.2 (last sentence only), 3.2(i), 3.2(ii), 3.2.2, 3.2.3, 5.1 (but not
including 5.1.1-5.1.3), 21.1 (first sentence only), 21.2 (first sentence only),
23.1, 24, 28.1(l), 28.23, 28.26, Exhibit B-1, Exhibit E,
Exhibit F, the First Addendum to Lease, and the Second Addendum to
Lease; (d) references in the following provisions to “Landlord” shall mean
“Master Landlord”: Sections 1.7, 4.2(f)-(h), 4.2.1, 4.6-4.9, 8.1, 8.2, 8.4,
8.5, 8.6, 9.9, 12.2, 14.3, 15, 16, 17, 18.1, 18.2, 22, 25, and Exhibit D;
(e) wherever there is a reference to the Work Order Letter, the reference shall
be disregarded; (f) wherever there is a reference to Table 1.3 this reference
should be disregarded; and (g) wherever there is a requirement to pay the
costs and expenses of “Landlord,” Subtenant shall only be obligated to pay
Master Landlord’s costs and expenses and not both Sublandlord’s and Master
Landlord’s costs and expenses.  In the
event of a conflict between the provisions of this Sublease and the Master
Lease Agreement, as between Sublandlord and Subtenant, the provisions of this
Sublease shall control.

 

To the
extent that the Master Lease Agreement gives Sublandlord any right to terminate
the Master Lease Agreement, Sublandlord shall not voluntarily cancel or terminate
the Master Lease Agreement (with Sublandlord to have the right to terminate the
Master Lease upon damage or destruction of the Premises, but only to the extent
permitted by the Master Lease), nor shall Sublandlord or Master Landlord amend
or modify the Master Lease Agreement in any way which materially affects
Subtenant’s rights, without the prior written consent of Subtenant, which may
be withheld in Subtenant’s sole discretion.

 

If
Master Landlord seeks to terminate the Master Lease Agreement because of
default or alleged default by Sublandlord under the Master Lease Agreement,
Sublandlord shall use its reasonable good faith efforts to maintain the Master
Lease Agreement in full force and effect for the benefit of Subtenant and
Sublandlord, and Sublandlord shall take all action required to reinstate the
Master Lease Agreement and/or to claim and pursue any right of redemption or
relief from forfeiture of the Master Lease Agreement (and as a consequence
thereof any forfeiture of this Sublease) to which Sublandlord may be entitled
at law or in equity (including, without limitation, any such rights under
California Code of Civil Procedure Sections 1174 and 1179).

 

19.          MASTER LANDLORD CONSENT:  This
Sublease shall be of no force or effect unless and until Sublandlord shall have
obtained Master Landlord’s written consent to this Sublease.  Sublandlord shall not be obligated to take
any action to obtain such consent other than to request such consent from
Master Landlord in writing in the form attached hereto as Exhibit E
(it being acknowledged that in no event shall Sublandlord be obligated to
commence an action or proceeding to secure such consent).  Sublandlord and Subtenant agree to (a) reasonably
cooperate with the other Party and Master Landlord in connection with the
obtaining of such consent (including, without limitation, the furnishing of any
information reasonably requested by Sublandlord or Master Landlord), and (b) execute
any additional documents as reasonably requested by Master Landlord.  Sublandlord shall pay any charges imposed by
Master Landlord in connection with the furnishing of its consent hereto.  If the Sublandlord has not obtained the
written consent of Master Landlord in the form of Exhibit E, or
some other mutually acceptable form, on or before the date of the Early
Occupancy, then this Sublease shall terminate, whereupon any monies previously
paid by Subtenant to Sublandlord shall be reimbursed to Subtenant.

 

8

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

be
delayed by one (1) day after the Commencement Date for each day that the
Master Landlord’s consent is not obtained past the date of the Early Occupancy.

 

20.          PARKING; ACCESS; SIGNAGE:  Subtenant
shall have access to unreserved parking spaces equal to the prorata share of
the Premises to Master Premises (i.e., 6.608%). 
The parking ratio provided for in the Master Lease Agreement is
approximately 3.4/1,000.  Subtenant shall
have access to the Premises in accordance with the terms of the Master Lease. Subject
to the terms of the Master Lease, Subtenant shall have the right to utilize the
existing controlled access system (card key) to secure the Premises. Subtenant
shall be responsible for building standard lobby and suite entry signage.

 

21.          SUBLEASE ASSIGNMENT:  Subtenant
shall be permitted to assign or sublease any portion of the Premises, subject
to the approval of both Master Landlord and Sublandlord.  Master Landlord’s approval shall be in
accordance with the terms of the Master Lease. 
Sublandlord’s approval shall not be unreasonably withheld.  Subtenant and Sublandlord will share 50%/50%
in all profits associated with either a sublease or an assignment to an
unrelated entity, with said profits to be net of (i) any amount due to Master
Landlord pursuant to the Master Lease; and (ii) Subtenant’s reasonable marketing
expenses, including, but not limited to, attorney’s fees, leasing commissions,
allowances, incentives and rent credits.

 

22.          WAIVER OF CLAIMS AND INDEMNITY:

 

(a) Subtenant
hereby releases and waives any and all claims against Master Landlord and Sublandlord
and each of their respective officers, directors, partners, agents and
employees for injury or damage to person, property or business sustained in or
about the Building, the Master Premises, or the Premises by Subtenant other
than by reason of negligence or willful misconduct on the part of Master
Landlord or Sublandlord and except in any case which would render this release
and waiver void under law.

 

(b) Subtenant
agrees to indemnify, defend and hold harmless Master Landlord and its
beneficiaries, Sublandlord and the managing agent of the Building and each of
their respective officers, directors, partners, agents and employees, from and
against any and all claims, demands, costs and expenses of every kind and
nature, including attorneys’ fees and litigation expenses, arising from
Subtenant’s occupancy of the Premises, Subtenant’s construction of any
leasehold improvements in the Premises or from any breach or default on the
part of Subtenant in the performance of any agreement or covenant of Subtenant
to be performed or performed under this Sublease or pursuant to the terms of
this Sublease, or from any act or neglect of Subtenant or its agents, officers,
employees, guests, servants, invitees or customers in or about the Premises.  In case any such proceeding is brought
against any of said indemnified parties, Subtenant covenants, if requested by
Sublandlord, to defend such proceeding at its sole cost and expense by legal
counsel reasonably satisfactory to Sublandlord.

 

(c) 
Sublandlord agrees to indemnify, defend and hold harmless Subtenant and its
beneficiaries, and each of their respective officers, directors, partners,
agents and employees, from and against any and all claims, demands, costs and
expenses of every kind and nature, including attorneys’ fees and litigation
expenses, arising from Sublandlord’s prior occupancy of the Premises or from
any breach or default on the part of Sublandlord in the performance of any
agreement or covenant of Sublandlord to be performed or performed under this Sublease
or pursuant to the terms of this Sublease, or from any act or neglect of
Sublandlord or its agents,

 

9

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

officers, employees, guests, servants, invitees or
customers in or about the Premises.  In
case any such proceeding is brought against any of said indemnified parties,
Sublandlord covenants, if requested by Subtenant, to defend such proceeding at
its sole cost and expense by legal counsel reasonably satisfactory to
Subtenant.

 

23.          WAIVER OF SUBROGATION:

 

Notwithstanding
anything in this Sublease to the contrary, Sublandlord and Subtenant hereby
release each other and their respective agents, employees, successors,
assignees and sublessees from all liability for injury to any person or damage
to any property that is caused by or results from a risk which is actually
insured against, which is required to be insured against under the Master Lease
or this Sublease, or which would normally be covered by “all risk” property
insurance, without regard to the negligence or willful misconduct of the person
or entity so released.  All of
Sublandlord’s and Subtenant’s repair and indemnity obligations under this
Sublease shall be subject to the waiver and release contained in this
paragraph.  Each Party shall cause each
insurance policy it obtains to provide that the insurer thereunder waives all
recovery by way of subrogation as required herein in connection with any injury
or damage covered by such policy.

 

24.          DEFAULT BY SUBTENANT:

 

Default by
Subtenant shall be determined by Section 20.1 of the Master Lease (as
incorporated into this Sublease), with references to “Landlord” in Section 20.1
to be references to Sublandlord, and the references to “Tenant” in Section 20.1
to be references to Subtenant.

 

If after receiving
a notice of a defect Subtenant has failed to timely cure such defect, Subtenant
shall be deemed to be in default hereunder, and Sublandlord may exercise,
without limitation of any other rights and remedies available to it hereunder
or at law or in equity, any and all rights and remedies of Landlord set forth
in the Master Lease, as incorporated herein.

 

In the event
Subtenant fails or refuses to make any payment or perform any covenant or
agreement to be performed hereunder by Subtenant, Sublandlord may make such payment
or

 

10

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

undertake to
perform such covenant or agreement (but shall not have any obligation to
Subtenant to do so).  In such event,
amounts so paid and amounts expended in undertaking such performance, together
with all costs, expenses and attorneys’ fees incurred by Sublandlord in
connection therewith, shall be additional rent hereunder.

 

25.          DEFAULT BY MASTER LANDLORD:  Default
by Master Landlord shall be determined by Section 20.4 of the Master Lease (as
incorporated into this Sublease), with the references to “Landlord” in Section
20.4 to be references to Master Landlord, and references to “Tenant” in Section
20.4 to be references to Subtenant.

 

26.          BROKERAGE FEE:  NAI BT Commercial represents the Subtenant and
GVA Kidder Matthews represents the Sublandlord in this transaction.  Upon completion of a transaction between both
parties, Sublandlord shall pay NAI BT Commercial a full-market leasing
commission based on a separate written agreement.  Except as set forth herein, each party hereby
represents and warrants to the other that it has had no dealings with any real
estate broker or agent in connection with this Sublease, and that it knows of
no other real estate broker or agent who is or might be entitled to a commission
in connection with this Sublease.  Each
party agrees to protect, defend, indemnify and hold the other harmless from and
against any and all claims inconsistent with the foregoing representations and
warranties for any brokerage, finder’s or similar fee or commission in
connection with this Sublease, if such claims are based on or relate to any act
of the indemnifying party which is contrary to the foregoing representations
and warranties.

 

27.          SEVERABILITY:  If any part
or parts of this Sublease shall be held unenforceable for any reason, the
remainder of this Sublease shall continue in full force and effect. If any
provision of this Sublease is deemed invalid or unenforceable by any court of
competent jurisdiction, and if limiting such provision would make the provision
valid, then such provision shall be deemed to be construed as so limited.

 

28.          BINDING EFFECT:  The covenants
and conditions contained in the Sublease shall apply to and bind the Parties
and the heirs, legal representatives, successors and permitted assigns of the
Parties.

 

29.          ENTIRE AGREEMENT:  This Sublease,
including the Exhibits, constitutes the entire agreement between the Parties
and supersedes any prior understanding or representation of any kind preceding
the date of this Sublease.  There are no
other promises, conditions, understandings or other agreements, whether oral or
written, relating to the subject matter of this Sublease.  This Sublease may be modified in writing and
must be signed by both Parties.

 

30.          GOVERNING LAW:  This Sublease
shall be governed by and construed in accordance with the laws of the State of
California.

 

31.          NOTICE: Any notice required or otherwise given
pursuant to this Sublease shall be in writing and mailed certified return
receipt requested, postage prepaid, or delivered by overnight delivery service,
if to Subtenant, at 341 Oyster Point Boulevard, South San Francisco, CA  94080, Attention:  Legal Department, and if to Sublandlord, to Oncology
Therapeutics Network Joint Venture, L.P, Attn: General Counsel, 395 Oyster
Point Boulevard, South San Francisco, CA 94080. Either party may change such
addresses from time to time by providing notice as set forth above.

 

32.          WAIVER; AMENDMENT:  The failure of either Party to enforce any
provisions of this Sublease shall not be deemed a waiver or limitation of that
Party’s right to subsequently enforce and compel strict compliance with every
provision of this Sublease. The acceptance of rent by

 

11

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Sublandlord
or Master Landlord does not waive Sublandlord’s right to enforce any provisions
of this Sublease.

 

This Sublease may not be
amended or terminated, in whole or in part, nor may any of the provisions be
waived, except by a written instrument executed by the Party against whom
enforcement of such amendment, termination or waiver is sought and unless the
same is permitted under the terms and provisions of the Master Lease Agreement.

 

33.          LEGAL
FEES:  In the event of any legal
action by the Parties arising out of this Sublease, the losing Party shall pay
the prevailing Party reasonable attorneys’ fees and costs in addition to all
other relief.

 

34.          AUTHORITY: 
Sublandlord and Subtenant each hereby represents and warrants that it
has full right, power and authority to enter into this Sublease and that the
person executing this Sublease on behalf of Sublandlord and Subtenant,
respectively, is duly authorized to do so.

 

35.          FACSIMILE SIGNATURES: 
The Parties agree that signatures on this Sublease which are transmitted
by facsimile shall be binding on the Parties. Within ten (10) days after
delivery of signatures by facsimile, the Parties shall deliver originals of
their respective signatures to each other pursuant to the procedures for
notices set forth in Section 30 of this Sublease.

 

12

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

IN WITNESS WHEREOF, the
Parties have caused this Sublease to be executed the day and year first above
written.

 

	
  SUBLANDLORD:

  	
   

  	
  SUBTENANT:

  
	
  Oncology Therapeutics

  	
   

  	
   

  	
  SUNESIS PHARMACEUTICALS, INC.

  
	
  Network Joint Venture, L.P.,

  	
   

  	
   

  	
  a Delaware corporation

  
	
  a Delaware limited partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ CHUCK SLOAN

  	
   

  	
  /s/ ERIC BJERKHOLT

  
	
   

  	
   

  	
   

  
	
  Chuck Sloan

  	
   

  	
  Eric Bjerkholt

  
	
  (Name)

  	
   

  	
  (Name)

  
	
   

  	
   

  	
   

  
	
  VP, Operations

  	
   

  	
  Sr. VP, CFO

  
	
  (Position)

  	
   

  	
  (Position)

  

 

13

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT A

 

MASTER
LEASE AGREEMENTS

 

 

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Exhibit A
— Master Lease Agreement

 

O Y S T E R   P O I N T  
M A R I N A   P L A Z A

 

Office
Lease

 

of

 

SUITES [*] & 400

 

to

 

 

 

 

a
Delaware limited partnership

 

 

 

 

 

 

 

 

 

 

 

 

 

395 Oyster Point
Boulevard

South San
Francisco, CA  94080

 

 

 

[*] = CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

O Y S T E
R   P O I N T   M A R I N A  
P L A Z A

 

Office
Lease

 

THIS OFFICE LEASE (the “Lease”)
is entered into as of June 1, 2003, by and between KASHIWA
FUDOSAN AMERICA, INC., a California corporation (“Landlord”) and ONCOLOGY THERAPEUTICS NETWORK JOINT VENTURE, L.P., a
Delaware limited partnership (“Tenant”).

 

1       BASIC LEASE TERMS

 

1.1            LEASE OF PREMISES. 
Landlord leases to Tenant, and Tenant rents and hires from Landlord, the
premises described in § 1.4 below, in the building known by the street
address 395 Oyster Point Boulevard (the “Building”) in the City of
South San Francisco, County of San Mateo, State of California, on the
property described in § 1.7 below, in the business park commonly known as
Oyster Point Marina Plaza (the “Complex”), for the term stated in § 1.5
below, for the rents hereinafter reserved, and upon and subject to the terms,
conditions (including limitations, restrictions, and reservations), and
covenants hereinafter provided.  The
Building and the Complex are more particularly described and depicted in Exhibit A
which is attached hereto.  Each party
hereby expressly covenants and agrees to observe and perform all of the
conditions and covenants herein contained on its part to be observed and
performed.

 

1.2            Existing Tenancy  Acknowledged and Amended.  Landlord and Tenant acknowledge that Tenant
currently occupies approximately [*] rentable square feet of space on the
fourth (4th) floor of the Building and approximately
            
rentable square feet of space on the [*] floor of the Building (collectively
the “Existing Premises”) under the terms of that certain lease dated as of May 2,
1996, between Landlord and Tenant (the “Existing Lease”) as the same has been
heretofore modified and amended.  In the
absence of the parties’ execution and delivery of this Lease, the Existing
Lease would have expired on its terms on March 31, 2005.  Notwithstanding anything to the contrary in
the Existing Lease, Landlord and Tenant agree that the terms, conditions, and
covenants of this Lease shall supersede those of the Existing Lease for all
purposes from and after the Commencement Date hereof, that the Existing Lease
shall terminate for all purposes on the Commencement Date of this Lease with
the same effect as if the Term of the Existing Lease had expired on the
Commencement Date hereof, and that Tenant’s occupancy of the Premises shall be
governed solely by the terms, covenants, and conditions of this Lease from and
after the Commencement Date.  The
Existing Lease is hereby amended to reflect the provisions of this § 1.2 et seq.

 

 

2

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

1.2.1  Translation of Premises. 
Subject to the terms and conditions of the Work Letter Agreement
attached hereto as Exhibit F, Tenant shall have the right during the
performance of Landlord’s Work in Suite 500 to install Tenant’s telephone
and data lines in Suite 500 as soon as the walls are roughed out in
anticipation of Tenant’s move into Suite 500 on or after the Commencement
Date.  Tenant agrees to vacate the
Existing Premises and to complete its move into Suite 500 on or before the
date which is one (1) month (including four (4) weekends) after the
Commencement Date (as defined in § 1.5 below) of this Lease (the “Existing
Premises Termination Date”).

 

1.2.2  Existing Lease Base Rent
Abatement.  Notwithstanding anything to the contrary in
the Existing Lease, commencing with retroactive effect on April 1,
2003, and continuing through and including the Commencement Date of
this Lease (the “Existing Lease Abatement Period”), Tenant’s
Monthly Installment of Base Rent with respect to the Existing Premises under
the Existing Lease shall be reduced from its current level to Eight-Four Thousand Four Hundred Thirty-Five Dollars and Seventy-Five
Cents ($84,435.75) per month, prorated as appropriate; provided
that, if Tenant shall not have executed and delivered this Lease to Landlord on
or before the close of business on August 9, 2003, the commencement of the
Existing Lease Abatement Period shall be delayed by one (1) day for each
day of the interval between August 9, 2003, and the date upon which Tenant
shall actually execute and deliver this Lease to Landlord.  For example, if Tenant executes and delivers
this Lease to Landlord on August 19, 2003, the Base Rent for the period August 9,
2003, through August 19, 2003, will be $52,883.30 ($158,650/30 days x 10
days) rather than $28,145.25 ($84,435.75/30 days x 10 days).  If Tenant shall materially default under the
Existing Lease at any time prior to its termination as provided in § 1.2 above
and fail to cure within the time permitted for cure thereunder, while the
Existing Lease Abatement Period is still in effect, the Existing Lease
Abatement Period shall thereupon terminate, all amounts theretofore abated
shall become immediately due and payable to Landlord, and Tenant shall commence
paying the Base Rent under the Existing Lease as specified thereunder.  In addition, if Tenant shall default under
this Lease at any time and fail to cure within the time permitted for cure
hereunder, Tenant shall upon demand pay Landlord the amount of Existing Lease
Base Rent theretofore abated under the Existing Lease as amended pursuant to
the terms of this § 1.2.2 during the Existing Lease Abatement Period,
multiplied by a fraction, the numerator of which is the number of months then
remaining in the initial Term of this Lease at the time of the default, and the
denominator of which is the total number of months in the initial Term of this
Lease (without limiting Landlord’s other remedies).

 

1.3            SUMMARY TABLE. 
The parties agree that the following table (the “Table”) sets forth in
summary form the basic terms of this Lease, including the specific space
comprising the Premises and, with respect to such space, the Term of the Lease,
the usable and rentable square footage, the Base Rent, Base Year, and Tenant’s
Share, as all of such terms are defined below:

 

 

3

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

	
  PERIOD

  	
   

  	
  SUITE

  NO.

  	
   

  	
  RSF

  	
   

  	
  MONTHLY

  BASE

  RENT

  	
   

  	
  T’S

  SHARE

  BLDG

  	
   

  	
  T’S

  SHARE

  COMPLEX

  	
   

  	
  BASE

  YEAR

  	
   

  
	
  Commencement Date to January 31, 2005

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Suite 400 Commencement Date to

  January 31, 2005

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  14,784.00

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  February 1, 2005 to

  January 31, 2006

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  15,206.40

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  February 1, 2006 to

  January 31, 2007

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  15,628.80

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  February 1, 2007 to

  January 31, 2008

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  16,051.20

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  February 1, 2008 to

  January 31, 2009

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  16,473.60

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  February 1, 2009 to

  January 31, 2010

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  16,896.00

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  February 1, 2010 to

  January 31, 2011

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  17,318.40

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  February 1, 2011 to

  January 31, 2012

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  17,740.80

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  February 1, 2012 to

  January 31, 2013

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  18,163.20

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  February 1, 2013 to

  January 31, 2014

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  $

  	
  18,585.60

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  TOTALS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

In the event of any
conflict between the terms contained in the Table and the terms contained in
subsequent sections of the Lease, the terms of the Table shall control, except
that any dates stated in the Table are subject to adjustment as appropriate to
the extent any other provisions of the Lease provide for adjustments to the
Commencement Date and/or the Expiration Date and subject to the rental abatement
provided in § 1.6.3 below.

 

1.4            PREMISES. 
The premises leased to Tenant (the “Premises”) are (i) the entire [*]
floor and (ii) a portion of the fourth (4th) floor of the Building and are
commonly known as Suites [*]
and 400, as shown on the floor plans
annexed hereto as Exhibit B.  The Premises also include all fixtures and
equipment which are attached thereto, except items not deemed to be included
therein and which are removable by Tenant as provided in Article 10
below.  Landlord and Tenant agree that
the usable and rentable area of the Premises, and the respective rentable areas
of the Property (as defined in § 1.7 below) and Complex, for all purposes
under this Lease, are as follows and as specified in the Table:

 

Property’s Rentable Area:

Complex’s Rentable Area:

 

Tenant acknowledges that
it has caused its architect to verify the numbers stated in the Table and
herein relating to the measurements of such spaces prior to the Commencement
Date of this Lease or has had an opportunity to do so.

 

 

4

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

1.4.1  Expansion Rights. 
In consideration for Tenant’s execution and delivery of this Lease,
provided no material Event of Default remains outstanding and uncured beyond
all applicable notice and cure periods on the date Tenant exercises its rights
under this § 1.4.1 et seq.,
Landlord hereby grants to Tenant the following rights of first refusal with
respect to the following spaces (collectively the “RFR Space”):

 

(i)            a first right of refusal for any space on
Floors 4 and     in the Building for a period of five years from
August 1, 2005, through July 31, 2010 (the “4th-[*] RFR Space”),
subject to (a) the right of any existing tenant to exercise any option in
effect prior to the Commencement Date and (b) the right of Landlord to
negotiate a lease renewal with any existing tenant.  Tenant acknowledges that Coremark
International currently leases approximately [*] rentable square feet of space
on the fourth floor under a lease expiring on June 30, 2007, and
containing a five-year renewal option; and

 

(ii)   a
first right of refusal for the following spaces (the “Specific RFR Spaces”) in
the Building for a period of four years from August 1, 2005, through July 31,
2009:

 

·                  Suite [*] currently occupied by [*] under
a lease expiring on October 31, 2003;

 

·                  Suite [*] currently occupied by
Tenant;

 

·                  Suite [*] currently occupied by the [*]
with a lease expiration date of April 30, 2007, with a five-year lease
extension option;

 

·                  Suite [*] currently occupied by the [*] with
a lease expiration date of April 30, 2007, with a five-year lease
extension option;

 

·                  Suite [*] currently vacant but
adjacent to Suite 225.

 

(a)                 Notice of Bona Fide
Offer.   Landlord shall notify Tenant regarding the
availability of the RFR Space prior to putting the RFR Space on the market for
lease.  In addition, if at any time
during the periods specified in § 1.4.1 above Landlord receives a bona fide offer, agreement, or proposal (“Lease Proposal”)
which is acceptable to Landlord from any third party to lease any portion of
the RFR Space; or if Landlord makes a bona fide
offer, agreement, or proposal to a third party which the third party is willing
to accept, Landlord shall send Tenant a summary (the “RFR Summary”) of the
economic terms and conditions of the Lease Proposal, including a description of
the subject space, proposed term, and basic business terms and shall notify
Tenant of Landlord’s intention to conclude a lease on the terms of the Lease
Proposal.  Tenant shall have the right
for a period of five (5) full working days (concluding on 5:00 p.m.)
following Tenant’s receipt of the RFR Summary in which to exercise its right to
lease the space described in the RFR Summary (the “RFR Space”) on the terms and
conditions set forth in this § 1.4.1 et seq. by
giving Landlord written notice of such exercise.  If Tenant fails to notify Landlord of the
exercise of its rights hereunder within such five-business-day period, Landlord
may then lease the RFR Space to the third party tenant named as the tenant in
the RFR Summary or an affiliate of such third party tenant, provided that the
lease entered into pursuant to the Lease Proposal is (i) on the same terms
and conditions as set forth in the RFR Summary or (ii) on substantially
the same terms and conditions as set forth in the RFR Summary and Landlord is
not required to re-offer such First Refusal Space to Tenant pursuant to
§ 1.4.1(d) below.

 

 

5

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(b)                 Commencement and Duration. 
If Tenant exercises its right of first refusal, Landlord shall make the
RFR Space available for purposes of construction of improvements within ninety
(90) days following Tenant’s exercise of this right of first refusal (the “RFR
Space Delivery Date”); the lease for the RFR Space shall commence as provided
herein and shall continue for the duration of the Term of the Lease and expire
coterminously therewith.  The RFR Space
shall be provided “as is” for purposes of construction, with all existing
tenant improvements in place.  The
parties agree that Landlord shall improve the RFR Space within ninety (90) days
of the RFR Space Delivery Date, whether or not the RFR Space has been
previously improved, in accordance with the terms of the Work Letter Agreement,
with appropriate changes being made only to the Plans and Specifications,
Construction Schedule and the amount of the Improvement Allowance, which amount
shall be determined as provided below. 
Tenant shall deliver to Landlord for approval (which shall not to be
unreasonably withheld, conditioned, or delayed) Tenant’s proposed plans and
specifications no later than ninety (90) days following Tenant’s exercise of
this right of first refusal.  Landlord
shall, following selection of a contractor mutually agreed upon by Landlord and
Tenant (“Contractor”) and approval of construction costs by Tenant, construct
within the RFR Space the improvements specified in the final approved plans and
specifications for such construction. 
The commencement date of the lease of such RFR Space (upon which Base
Rent and Additional Rent shall begin to accrue, and Tenant’s Pro Rata Share
shall be adjusted to take into account the RFR Space) shall be the earlier of (i) the
date upon which Landlord’s construction of the improvements within the RFR
Space satisfies the Delivery Requirements (hereinafter defined) with respect to
the RFR Space or (ii) the date upon which Tenant occupies the RFR Space
(or any portion thereof) and commences conducting Tenant’s business operations
therein; provided, however, that in the event of any Tenant Delay (hereinafter
defined), Tenant’s obligation to pay Base Rent and Additional Rent with regard
to such RFR Space shall be advanced by one (1) day for each such day
substantial completion of such improvements was delayed by a Tenant Delay.  Following Landlord’s delivery of the RFR
Space in compliance with all Delivery Requirements, the RFR Space shall be
deemed to be a part of the Premises and shall be leased by Tenant upon and
subject to all of the terms, covenants, and conditions of this Lease.

 

(c)                  Terms and Conditions. 
If Tenant exercises its right of first refusal as to the RFR Space, all
terms and conditions for the lease of any such space shall be the same as those
then in effect under the Lease, except for the rental, tenant inducements, rent
abatements, and improvement allowances (“Third-Party Economics”).  Tenant shall have the right to a lease of the
RFR Space upon such Third-Party Economics as were contained in the Lease
Proposal in the same proportion as the number of months remaining in the Term
(including the term of any extension option then having been exercised) bears
to the number of months in the lease term contained in the RFR Summary.

 

(d)                 Continuing Right, Re-Offer, and
Priority.  If Tenant shall not timely exercise the right
of first refusal contained herein upon notification by Landlord, Tenant shall
again have the same rights as to such space each time Landlord receives or
makes a bona fide offer, from or to a third
party, which both Landlord and the third party are willing to accept, to lease
such space, whether or not Tenant has previously exercised or refused to
exercise the rights herein contained with respect to such space or other
space.  If Tenant rejects or is deemed to
have rejected a bona fide offer of which Tenant
is notified, and if (i) such third-party bona fide
offer is not consummated within five (5) months; (ii) the effective
rental rate to be paid pursuant to the bona fide offer
changes in any respect so as to become more than five percent (5%) more
favorable to the prospective tenant; (iii) there is any change in the
term, expansion rights, extension rights, or renewal rights proposed in the
Lease Proposal; or (iv) there is any other material change in the
nonmonetary terms of the bona fide
offer, then the RFR Space shall again become subject to the terms of this
§ 1.4.1 et seq. and shall again be
offered to Tenant as provided above.  As
used in the previous sentence, the term effective rental rate

 

 

6

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

means an amount
determined by taking the total base rental and deducting all abatements,
allowances, cost of non-monetary tenant inducements (e.g.,
health club memberships, etc.), tenant improvement costs in excess of
Building-standard, and any other monetary inducements.  Landlord represents and warrants that the
rights of first refusal granted to Tenant herein are and shall be paramount in
interest to the rights of Landlord to use the First Refusal Space for its own
purposes and that no other tenant of the Building has a right of first refusal
or other expansion right prior to or superior to the rights granted to Tenant
herein.  The foregoing right of first
refusal shall be subject to the existing tenants’ or occupants’ of the First
Refusal Space renewing their existing leases pursuant to options to extend or
renew which are in existence in their written lease agreements as of the date
of this Lease.

 

(e)                  Confirmatory Documentation. 
After Tenant validly exercises the right of first refusal provided
herein, the parties shall execute an amendment to the Lease adding the First
Refusal Space, or such other documentation as Landlord shall reasonably
require, promptly after Landlord shall prepare the same, in order to confirm
the leasing of such First Refusal Space to Tenant; but an otherwise valid
exercise of the rights of first refusal contained herein shall be fully
effective, whether or not such confirmatory documentation is executed.

 

(f)                   Failure to Exercise. 
If Tenant shall fail to exercise its right of first refusal after notice
by Landlord of the receipt of a bona fide
third-party offer to lease the RFR Space within the time specified herein, such
right shall be deemed to have lapsed and expired with respect to that
particular RFR Summary, and Landlord may, for a period of five (5) months,
enter into a lease pursuant to the terms of the RFR Summary with the
prospective tenant named therein.

 

(g)                 Default and Termination. 
Tenant’s exercise of such right of first refusal hereunder shall not
operate to cure any default by Tenant of any of the terms or provisions in the
Lease, nor to extinguish or impair any rights or remedies of Landlord arising
by virtue of such default.  The exercises
of the right of first refusal herein shall, at Landlord’s election, be null and
void if Tenant has committed a material Event of Default which remains
outstanding and uncured beyond all applicable notice and cure periods on the
date Tenant exercises its rights hereunder. 
Tenant agrees that time is of the essence of rights of first refusal
specified herein.

 

(h)                 Effect of Transfer. 
If Tenant subleases or assigns any portion of the Premises at any time
during the Term of this Lease except for a Transfer pursuant to § 17.12
below, the rights of first refusal hereunder with respect to the Specific RFR
Spaces shall be suspended with immediate effect until such time as Tenant
reoccupied the entirety of the Premises.

 

1.4.2 Generator License.  Landlord
hereby grants to Tenant, for the Term of the Lease and any extension thereof,
the right to maintain, and operate an above-ground, emergency, diesel-powered
electrical generator (the “Generator”) and an associated above ground diesel
storage tank (the “Tank”) on the terms and conditions specified herein.  Landlord and Tenant acknowledge that the
Generator was installed by Tenant prior to the Commencement Date of this Lease
pursuant to the terms of the Fourth Amendment, dated as of July 5, 2001,
to the Existing Lease.

 

(a)                 Scope of Right. 
Tenant’s right hereunder to maintain and operate the Generator and Tank
is granted solely for the purpose of providing emergency electrical supply to
the Premises, limited to the duration of any failure in the electrical power
supplied to the Building and for routine testing, and for no other
purpose.  Tenant shall not permit the
Generator and Tank to be utilized, directly or indirectly, by any person or
entity other than Tenant and its agents.

 

(b)                 Term of License. 
The term of the right granted hereunder to maintain and operate the Generator
shall be coëxtensive with the Term of the Lease.  Tenant may terminate the right

 

 

7

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

conferred
hereunder at any time upon not less than thirty (30) days’ written notice to
Landlord, provided that upon any such termination Tenant shall have no further
right thereafter to operate the Generator or utilize the Generator Area, and
Tenant shall upon such termination comply with the provisions of § 1.4.2(h) below.

 

(c)                  Location of Generator and Tank. 
The Generator and Tank shall occupy an area measuring approximately
twelve (12) feet by seventeen (17) feet (the “Generator Area”) in the parking
area of the Building where the Generator Area was located on the Commencement
Date of this Lease.  The Generator Area
shall be deemed a part of the Premises so long as the right to operate the
Generator granted herein remains in effect, and its use and operation shall be
subject to all the terms and conditions applicable to Tenant’s use of the
Premises under the Lease, except to extent specified to the contrary herein.

 

(d)                 Enclosure and Concealment. 
The Generator Area shall be entirely surrounded by a wall, tall enough
to conceal the Generator and Tank from view, constructed of either cinder block
or poured-in-place concrete, similar in appearance to the exterior of the
Building.  In addition, so long as the
operation of the Generator is not adversely affected thereby, Tenant shall
place a raised wooden trellis, in appearance reasonably satisfactory to
Landlord, over the Generator Area so as to conceal the Generator and Tank from
the view of occupants of the Building looking down on the Generator Area from
above.

 

(e)                  Landscaping. 
Tenant agrees to install (a) a planter on the south side of the
Generator Area which is designed to match the existing planter on the north
side of the Generator Area and (b) a planter or planter strip
approximately eighteen inches (18”) wide across the front of the Generator
area.  All planters will be planted with
agapanthus as a foundation planting and a climbing vine of a variety
appropriate for this application, as reasonably directed by Landlord, for the
enclosure itself.

 

(f)                   Cost of Operation. 
Tenant shall bear all costs associated with the construction,
installation, maintenance, repair, and operation of the Generator and Tank and
associated systems, and Landlord shall have no obligation under any
circumstances to pay any costs in connection with such activities.

 

(g)                 Electrical Connection and
Consumption.  Except as may be necessary to repair or
replace the electrical conduit running between the Generator and the Premises,
no trenching or boring of the parking area of any other area of the Property
shall be permitted.  Tenant shall bear
all costs, as reasonably estimated by Landlord, for electricity consumed in the
lighting and maintenance of the Generator and Generator Area; provided that
Tenant shall have the right to install an electrical submeter at its own
expense at the Generator, in which case Tenant’s obligation to reimburse
Landlord for the cost of electricity consumed at the Generator Area shall be
based upon Tenant’s actual consumption as shown on such submeter.  Notwithstanding any other provision of the
Lease to the contrary, except to the extent caused by Landlord’s negligence or
intentional acts, Tenant shall be fully liable for all costs incurred in
connection with damage to the Building or the Building’s electrical system by
virtue of Tenant’s operation of the Generator, and Tenant agrees to take all
appropriate precautions, as directed by a licensed electrician approved by
Landlord, to prevent any such damage. 
Tenant agrees to pay to Landlord promptly upon invoicing the costs of
repairing any such damage.

 

(h)                 Removal and Restoration. 
If directed by Landlord by written notice given at least twelve (12)
months prior to the Expiration Date as the same may be extended hereunder,
Tenant shall remove the Generator, Tank, Generator Area, and all associated
structures and systems upon

 

 

8

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

the expiration or
earlier termination of the Lease and shall restore the Generator Area to its
prior condition before installation of the Generator under the Fourth Amendment
to the Existing Lease; provided that Landlord may give contemporaneous notice
in the event the Lease terminates prior to the Expiration Date as the same may
be extended hereunder.

 

(i)                    Insurance and Indemnification. 
Tenant agrees to cover the location, maintenance, and operation of the
Generator and Tank under Tenant’s CGL insurance coverages under the Lease.  Notwithstanding anything to the contrary in
the Lease, Tenant shall indemnify, defend, protect, and hold Landlord harmless
from and against (a) any and all Claims relating to injury or damage
occurring in, on, or about any of the Common Areas, the Property, or the
Complex, when such injury or damage is caused in whole or in part by Tenant’s
installation, maintenance, or operation of the Generator or Tank and (b) all
costs, attorneys’ fees, expenses, and liabilities incurred in connection with
any such Claim or any action or proceeding brought thereon, except to the
extent any claim is due to the negligence or intentional acts of Landlord.  In case any action or proceeding be brought
against Landlord by reason of any such Claim, Tenant, upon notice from
Landlord, shall defend the same at Tenant’s expense by counsel reasonably
satisfactory to Landlord.

 

(j)                    Hazardous Waste. 
All the terms and provisions of the Lease regarding hazardous waste and
hazardous materials shall apply to Tenant’s use of the Generator and Generator
Area hereunder.

 

(k)                 Condition of Generator Area and
Surrounding Area.  Tenant shall keep the Generator Area and any
items as Tenant may have at the Generator Area in a neat and clean
condition.  No boxes, back-up stock, vent
pipes or personal items shall be visible at any time.  Tenant shall keep the area around the
Generator Area free of any refuse or other items originating from the Generator
Area or arising out of Tenant’s activities thereat.  Without limitation, Tenant shall not allow
any substance on the floor area at or around the Generator Area which may cause
the floor to be slippery or otherwise hazardous to persons walking on the
floor.  Tenant shall promptly repair any
damage to the Generator Area or the surrounding area caused by Tenant or
arising out of Tenant’s activities.

 

(l)                    Work at Generator Area. 
Except for any work under subsection (e) above, any type of
work Tenant shall wish to perform at the Generator Area, including any type of
construction work or painting, shall be subject to Landlord’s advance approval
and shall be performed only at such times as agreed upon by Landlord.  No such work shall be performed during
business hours (as defined in § 8.1.1 below), unless otherwise approved by
Landlord.

 

(m)             Noises, Odors and Other Matters. 
Other than as may be due to normal operation and maintenance of the
Generator, Tenant shall not permit any noises, music, odors, or other matters
to occur at or about the Generator Area so as to unreasonably interfere with
other Building occupants’ use and enjoyment of their respective premises.

 

1.4.3  Roof and Antenna License. 
Tenant shall have the right during the Term of this Lease, subject to
Landlord’s reasonable approval, to place up to a maximum of three (3) antennae
on the roof of the Building for Tenant’s own communications purposes.  Any such antennae shall not exceed eighteen
inches (18”) in height or diameter. 
Tenant agrees to execute a separate roof license agreement substantially
on Landlord’s Building-standard form in connection with any such utilization of
the Building roof space for placement of communications antennae.  In addition, Landlord hereby grants Tenant a
license for roof access for the purpose of maintaining its roof antennae and
for maintaining Tenant’s Supplemental HVAC System, as required under § 8.1
below.

 

 

9

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

1.5       TERM.
 The term (the “Term”) for which the
Premises are hereby leased shall commence on the “Commencement Date,” which
shall be the earlier to occur of (i) the day on which Suite        
is ready for occupancy (as defined in Article 3) or (ii) the day on
which Tenant or anyone claiming under or through Tenant first occupies Suite      
for business, and shall end at noon on the “Expiration Date,” which shall be
the last day of the calendar month in which occurs the day preceding the tenth
(10th) anniversary of the Commencement Date (notwithstanding anything to the
contrary in the Table) or any earlier date upon which the Term may expire or be
cancelled or terminated pursuant to any of the conditions or covenants of this
Lease or pursuant to law.  Promptly
following the Commencement Date the parties hereto shall, if required by
Landlord, enter into a supplementary agreement fixing the dates of the
Commencement Date and the Expiration Date in the form which is attached hereto
as Exhibit E and incorporated herein
by reference.  The Term with respect to Suite 400
only shall commence shall on the earlier to occur of (i) the day on which Suite 400
is ready for occupancy (as defined in Article 3) or (ii) the day on
which Tenant or anyone claiming under or through Tenant first occupies Suite 400
for business (the “Suite 400 Commencement Date”).

 

1.5.1       Extension
Option.  Tenant is hereby granted one
(1) option to extend (the “Extension Option”) the Term of the Lease for an
additional period of five (5) consecutive Lease Years (the “Extension
Period”).  The Extension Period term
shall begin the first day following the Expiration Date of the Lease and shall
take effect on the same terms and conditions in effect under the Lease
immediately prior to the Extension Period, except that (i) Tenant shall
have no further right to extend and (ii) monthly Base Rent shall be the
rate which is ninety-eight percent (98%) of Fair Market Value (as defined
below).  The Fair Market Value shall be
the effective rent (face rate less free rent) being charged for comparable
space in comparable buildings in the vicinity of the Complex leased on
comparable terms, including annual escalations and such other terms.

 

(a)        Exercise
of Option.  The Extension Option may
be exercised only by (i) delivering written notice of Tenant’s irrevocable
election to exercise to Landlord in accordance with Article 23 below no
earlier than January 1, 2013, and no later
than April 1, 2013.  Tenant’s exercise of its Extension Option
shall not be effective or valid if there is any deviation in the timing or
manner of exercise prescribed herein.

 

(b)        Failure
to Exercise.  If Tenant shall fail
validly and timely to exercise the option herein granted, the Extension Option
shall terminate and shall be null and void and of no further force and effect.

 

(c)         Fair
Market Value.  Provided that Tenant
has validly exercised its option when and as required hereunder, Landlord
shall, on or before May 1, 2013,
provide written notice to Tenant of its determination of the Fair Market
Value.  Within ten (10) days after
receiving such determination (and in no event later than June 1,
2013) (“Tenant’s Review Period”), Tenant shall irrevocably elect, in
writing, to do one of the following: (i) accept Landlord’s determination;
or (ii) object to Landlord’s determination and with such objection set
forth in writing Tenant’s determination of the Fair Market Value.  If Tenant so objects, Landlord and Tenant
shall attempt in good faith to agree upon such Fair Market Value using their
best good-faith efforts.  If Landlord and
Tenant fail to reach agreement within fifteen (15) days following Tenant’s
Review Period (the “Outside Agreement Date”), then Landlord and Tenant shall
submit each party’s determination to arbitration in accordance with the
then-current rules and procedures of the American Arbitration
Association.  If Tenant objects to
Landlord’s determination of Fair Market Value, Tenant shall continue to pay
Base Rent as set forth in § 1.3 until the matter is resolved by binding
arbitration as provided below, subject to retroactive adjustment after the
matter is so resolved.  If Tenant fails
so to accept or object to Landlord’s

 

 

10

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

determination of Fair
Market Value in writing within Tenant’s Review Period, Tenant shall
conclusively be deemed to have approved of the Fair Market Value as determined
by Landlord.

 

(d)        Appointment
of Arbitrators.  Not later than
fifteen (15) days following the Outside Agreement Date, Landlord and Tenant
shall each appoint one arbitrator who shall by profession be a real estate
broker who shall have been active over at least the ten-year period ending on
the date of such appointment in the leasing of commercial properties within
northern San Mateo County.  The
determination of the arbitrators shall be limited solely to the issue of
whether Landlord’s or Tenant’s submitted Fair Market Value for the Premises is
the more accurate as determined by the arbitrators, taking into account the
requirements of this § 1.5.1 et seq.

 

(e)         Appointment
of Third Arbitrator.  The two (2) arbitrators
so appointed shall within fifteen (15) days of the date of the appointment of
the last-appointed arbitrator agree upon and appoint a third arbitrator, who
shall be qualified under the same criteria as set forth hereinabove for
qualification of the initial two arbitrators.

 

(f)          Arbitrators’
Decision.  The three (3) arbitrators
shall, within thirty (30) days of the appointment of the third arbitrator,
reach a decision as to whether the parties shall use Landlord’s or Tenant’s
submitted Fair Market Value, and shall notify Landlord and Tenant thereof.  The decision of the majority of the three (3) arbitrators
shall be binding upon Landlord and Tenant. 
The arbitrators shall not be permitted to set Fair Market Value to any
level other than either Landlord’s or Tenant’s submitted Fair Market Value.

 

(g)        Failure
to Appoint.  If either Landlord or
Tenant fails to appoint an arbitrator within fifteen (15) days after the
Outside Agreement Date, the arbitrator timely appointed by one of the parties
shall reach a decision, notify Landlord and Tenant thereof, and such arbitrator’s
decision shall be binding upon Landlord and Tenant.  If the two (2) arbitrators fail to agree
upon and appoint a third arbitrator, both arbitrators shall be dismissed and
the matter to be decided shall be forthwith submitted to arbitration under the
Commercial Arbitration Rules of the American Arbitration Association then
in effect, but subject to the instructions set forth in this § 1.5.1 et seq..

 

(h)        Cost
of Arbitration.  The cost of
arbitration shall be paid by Landlord and Tenant equally.

 

(i)           Default.  Tenant’s exercise of the Extension Option
shall, at Landlord’s election, be null and void if Tenant is in material
default of its obligations under this Lease beyond
all applicable notice and cure periods on the date of exercise or at any
time thereafter and prior to commencement of the Extension Period.  Tenant’s exercise of the Extension Option
shall not operate to cure any Default by Tenant nor to extinguish or impair any
rights or remedies of Landlord arising by virtue of such Default.  If the Lease or Tenant’s right to possession
of the Premises shall terminate before Tenant shall have exercised the
Extension Option, then immediately upon such termination the Extension Option
shall simultaneously terminate and become null and void.

 

(j)           Time.  Time is of the essence of this Extension
Option.

 

1.5.2       Suite 400 Termination
Right.  Notwithstanding anything to
the contrary herein, Tenant shall have the right to terminate the Lease with
respect to Suite 400 only effective on either September 30,
2008, or September 30, 2010,
upon written notice given to Landlord not less than six (6) months and not
more than nine (9) months prior to either such termination date that may
be selected by Tenant.  If Tenant
exercises such termination right, Tenant shall pay to Landlord a termination
fee on the

 

 

11

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

termination date of either Ninety-Six
Thousand Three Hundred Seven Dollars and Twenty Cents ($96,307.20),
if Tenant exercises its right to terminate the Lease with respect to Suite 400
on September 30, 2008, or Sixty-Nine Thousand Two
Hundred Seventy-Three Dollars and Sixty Cents ($69,273.60), if
Tenant exercises its right to terminate the Lease with respect to Suite 400
on September 30, 2010.

 

1.6       RENT.  The “Rent” reserved under this Lease, for the
Term thereof, shall consist of the following:

 

(a)                 “Base Rent”
of as set forth in the Table in § 1.3 for the various spaces and periods
described therein per month, which shall be payable in advance on the first day
of each and every calendar month during the Term of this Lease; and

 

(b)                 “Additional
Rent” consisting of any and all other sums of money as shall become payable by
Tenant to Landlord hereunder; and Landlord shall have the same remedies for
default in the payment of Additional Rent as for a default in payment of Base
Rent.

 

1.6.1       Payment of Rent.  Tenant shall pay the Base Rent and Additional
Rent promptly when due, without demand therefor and without any abatement,
deduction, or setoff whatsoever, except as may be expressly provided in this
Lease.  Tenant shall pay the Rent to
Landlord, in lawful money of the United States of America, at Landlord’s office
at the Complex or at such other place, or to such agent and at such place, as
Landlord may designate by notice to Tenant. 
If the Commencement Date or Expiration Date occurs on a day other than
the first or last day of a calendar month respectively, the Base Rent for such
calendar month shall be prorated based on a 30-day month, and the balance of
the first or last month’s Base Rent theretofore paid shall be credited against
the next monthly installment of Base Rent or refunded to Tenant within thirty
(30) days following the Expiration Date.

 

1.6.2       Interest and Late Charges.  Tenant acknowledges that the late payment of
any monthly Rent will cause Landlord to lose the use of that money and incur
costs and expenses not contemplated under this Lease, including administrative
and collection costs and processing and account expenses, the exact amount of
which it is difficult to ascertain. 
Therefore, if any such installment is not received by Landlord within
five (5) days from the date it is due, Tenant shall pay Landlord a
late charge equal to five percent (5%) of such installment.  Landlord and Tenant agree that this late
charge represents a reasonable estimate of such costs and expenses and is fair
compensation to Landlord for the loss suffered from such nonpayment by
Tenant.  In addition, any check returned
by the bank for any reason will be considered late and will be subject to all
late charges plus an additional returned check fee of Twenty Dollars
($20.00).  After two such occasions upon
which checks have been returned in any twelve-month period, Landlord will have
the right to require payment by a cashier’s check or money order.  Acceptance of any late charge shall not
constitute a waiver of Tenant’s default with respect to such nonpayment by
Tenant nor prevent Landlord from exercising any other rights or remedies
available to Landlord under this Lease or at law or in equity, unless the
payment of such late charges is accompanied by all rentals then due and owning
(notwithstanding anything to the contrary in § 20.2.1 below).

 

1.6.3       Suite 400 Base Rent
Abatement.  Notwithstanding anything
to the contrary in this § 1.6 or § 1.3 above, beginning with the
Commencement Date for Suite [*] (targeted for February 1,
2004), Tenant’s Monthly Installment of Base Rent with respect to Suite 400
only shall be abated for a period of eighteen (18) months after the Existing
Premises Termination Date (the “Abatement Period”).  If Tenant shall materially default under the
Lease and fail to cure within the time permitted for cure thereunder, while the
Abatement Period is still in effect, the Abatement Period shall thereupon

 

 

12

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

terminate, and Tenant shall commence paying the Base
Rent under the Lease as specified in the Table.

 

1.7       PROPERTY.  For the purposes of this Lease, the “Property”
shall mean the Building and any common or public areas or facilities,
easements, corridors, lobbies, sidewalks, loading areas, driveways, landscaped
areas, skywalk, parking garages and lots, and any and all other structures or
facilities operated or maintained in connection with or for the benefit of the
Building, and all parcels or tracts of land on which all or any portion of the
Building or any of the other foregoing items are located, and any fixtures,
machinery, equipment, apparatus, Systems and Equipment (as defined in
§ 1.7.5 below), furniture and other personal property located thereon or
therein and used in connection therewith, whether title is held by Landlord or
its affiliates.  The Property shall also
be deemed to include such other of the Complex’s buildings or structures (and
related facilities and parcels on which the same are located) as Landlord shall
have incorporated by reference to the total square footage of the Building
stated in § 1.4 above.

 

1.7.1       Common Areas.  Tenant and its agents, employees, and
invitees shall have the non-exclusive right with others designated by Landlord
to the free use of the common areas in the Property and the Complex for the
common areas’ intended and normal purpose. 
The term common areas shall include
(without limitation) elevators, sidewalks, parking areas, driveways, hallways,
stairways, public restrooms, common entrances, lobbies, and other similar
public areas and access ways.

 

1.7.2       Athletic Facility.  Notwithstanding the foregoing, the common
areas do not include the Building’s athletic facility (the “Athletic Facility”),
which is an unsupervised and unattended weight and exercise room and shower
facility.  Tenant acknowledges that
Landlord presently makes available (but is not obligated under this Lease to
make available) the Athletic Facility for the general use of all tenants and
their officers and employees, subject to such rules and regulations as
Landlord may impose from time to time in its sole and absolute discretion
regarding the use thereof.  Tenant shall
cause each of its officers and employees using the Athletic Facility to sign
and deliver to Landlord an “Athletic Facility Use Agreement” substantially in
the form attached hereto as Exhibit D.  Tenant understands and agrees that no
individual shall be permitted use of or access to the Athletic Facility unless
and until such individual shall have first signed and delivered the Athletic
Facility Use Agreement to Landlord.  Landlord
shall have the right to limit the use of the Athletic Facility in any manner it
may reasonably deem necessary, or to discontinue the Athletic Facility
altogether, at any time, in its sole and absolute discretion, and neither
Tenant nor its officers or employees shall be entitled to any compensation,
credit, allowance, or offset of expenses or Rent as a result of any such
limitation or discontinuance, so long as at least one (1) similar athletic
facility of no less than 3,000 square feet remains available for Tenant’s use
in the Complex.  If Landlord elects to
discontinue the Athletic Facility and does not provide a similar facility for
Tenant’s use in the Complex as provided in the foregoing sentence, (i) Landlord
shall give Tenant a credit of Two Thousand Five Hundred Dollars ($2,500.00) per
month against the Base Rent due hereunder for so long as no such facility is
available for Tenant’s use in the Complex and (ii) Landlord shall permit
Tenant upon request (and subject to the provisions of Article 9) to
construct a facility similar to the Athletic Facility in Tenant’s Premises, at
Tenant’s sole cost and expense.

 

1.7.3       Reservation to Landlord.  Notwithstanding anything to the contrary
herein, possession of areas necessary for utilities, services, safety, and
operation of the Property, including the Systems and Equipment, telephone
closets (whether located in the common areas or in the Premises), fire exits
and stairways, perimeter walls, space between the finished ceiling of the
Premises and the slab of the floor or roof of the Property thereabove, and the
use thereof, together with the right to install, maintain, operate, repair, and
replace any part of the Systems and Equipment in, through, under, or above the
Premises in locations that will not materially interfere with Tenant’s use of
the Premises,

 

 

13

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

are hereby excepted from both the Premises and the
common areas and are reserved by Landlord and not demised to Tenant.  Tenant’s access to the telephone closets on
each floor and the Building’s main telephone room shall be subject to the Rules (as
defined in § 13.1 below) and shall be permitted only with Landlord’s
written consent and under the supervision of Landlord’s Building Engineer on
each occasion that such access is sought.

 

1.7.4       Changes and Alterations of
the Property.  Landlord reserves the
right to and shall make repairs, alterations, additions, or improvements,
structural or otherwise, in or to the Property or Complex as deemed or are
necessary or desirable in Landlord’s reasonable discretion, so long as such
repairs or alterations do not materially and unreasonably interfere with Tenant’s
access to or beneficial use of the Premises for their intended purposes.  Notwithstanding anything to the contrary
herein, Landlord agrees that it will not do or permit any core drilling in the
Building without at least one (1) floor’s separation from any affected
portion of the Premises at any time during the business week (i.e., Monday through Friday excluding Holidays) between the
hours of 5:30 a.m. and 6:30 p.m. 
Landlord reserves the right hereunder to do the following: (i) install,
use, maintain, repair, and replace pipes, ducts, conduits, wires, and
appurtenant meters and equipment for service to the various parts of the
Property above the ceiling surfaces, below the floor surfaces, within the
walls, and in the central core areas; (ii) to relocate any pipes, ducts,
conduits, wires, and appurtenant meters and equipment which are located in the
Premises or located elsewhere outside the Premises; (iii) expand the
Building or the Complex; (iv) make changes to the Property or the Complex,
including changes, expansions, and reductions in the location, size, shape, and
number of driveways, entrances, loading and unloading areas, ingress, egress,
direction of traffic, landscaped areas, walkways, parking spaces, and parking
areas; (v) close any of the common areas, so long as reasonable access to
the Premises remains available; (vi) use the common areas while engaged in
making additional improvements, repairs, or alterations to the Property,
Complex, or any portion thereof; and (vii) do and perform such other acts
and make such other changes in, to, or with respect to the Property, Complex,
common areas, and Building as Landlord may deem appropriate.  The exercise of any of the foregoing rights
shall not subject Landlord to claims for constructive eviction, abatement of
Rent, damages, or other claims of any kind, except as otherwise expressly
provided in this Lease.  If Landlord
enters the Premises to exercise any of the foregoing rights, Landlord shall
provide at least two (2) business days’ advance written notice to Tenant’s
on-site manager, except (x) in cases of emergency and (y) for
purposes of access to the Building roof for Landlord, its agents, and
authorized licensees in cases where use of the stairs is either not possible or
not reasonably practicable.

 

1.7.5       Systems and Equipment.  As used in this Lease, “Systems and Equipment”
means collectively any existing plant, machinery, transformers, duct work,
intrabuilding network cables and wires that transmit voice, data, and other
telecommunications signals (“INC”), and other equipment, facilities, and
systems designed to supply water, heat, ventilation, air conditioning and
humidity or any other services or utilities, or comprising or serving as any
component or portion of the electrical, gas, steam, plumbing, sprinkler,
communications, alarm, security, or fire/life/safety systems or equipment, or
any other mechanical, electrical, electronic, computer or other systems or
equipment for the Property.

 

2       USE

 

2.1       USE AND ENJOYMENT OF
PREMISES.  Tenant shall use and
occupy the Premises for executive and general offices and for no other
purpose.  Notwithstanding anything
contained herein to the contrary, Tenant may use portions of the Premises as
shown on the approved Plans for the preparation and reheating of food and
beverages, including the use of refrigerators, ice makers, coffee machines, hot

 

 

14

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

plates, microwave ovens, or similar heating devices
(but not for the actual cooking of food) for service only to Tenant’s employees
and business invitees.

 

2.1.1       Suitability.  Tenant acknowledges that neither Landlord nor
any agent of Landlord has made any representation or warranty with respect to
the Premises, the Property, or the Complex, or with respect to the suitability
of same for the conduct of Tenant’s business, except as expressly provided in
this Lease.  Landlord makes no
representation to Tenant regarding the installation, ownership, location, or
suitability for Tenant’s purposes of the INC in the Building.

 

2.1.2       Insurance Rates.  Tenant shall not do or suffer anything to be
done in or about the Premises, nor shall Tenant bring or allow anything to be
brought into the Premises, which will in any way increase the rate of any fire
insurance or other insurance upon the Property or its contents, cause a
cancellation of said insurance, or otherwise affect said insurance in any
manner.

 

2.1.3       Use to Comply with Laws.  Tenant shall use the Premises in conformity
with all applicable Laws, as specified in Article 6 below.

 

2.1.4       Floor Loading.  Subject to and except as may be shown on
Tenant’s Plans, Tenant shall not place or permit to be placed on any floor a
load exceeding eighty (80) pounds per square foot or such lower floor load
as such floor was designed to carry.

 

2.2       NUISANCE AND WASTE.  Tenant also shall not do or suffer anything
to be done in or about the Premises which will in any way unreasonably obstruct
or interfere with the rights of other tenants or occupants of the Property or
injure said tenants or occupants, nor shall Tenant use or suffer the Premises
to be used for any unlawful purposes.  In
no event shall Tenant cause or permit any nuisance in or about the Premises, and
no loudspeakers or similar devices shall be used without the prior written
approval of Landlord, which approval may be withheld in Landlord’s reasonable
discretion.  Tenant shall not commit or
suffer to be committed any waste in or upon the Premises.  The provisions of this section are for the
benefit of Landlord only and shall not be construed to be for the benefit of
any tenant or occupant of the Building. 
If any governmental license or permit, other than a Certificate of
Occupancy, shall be required for the proper and lawful conduct of Tenant’s
business in the Premises, or any part thereof, and if failure to secure such
license or permit would in any way affect Landlord, Tenant, at its sole
expense, shall procure and thereafter maintain such license or permit and
submit the same for inspection by Landlord. 
Tenant shall at all times comply with the terms and conditions of each
such license or permit.

 

2.3       COMPLIANCE WITH CERTIFICATE
OF OCCUPANCY   Tenant shall not at
any time use or occupy the Premises, or suffer or permit anyone to use or
occupy, the Premises, or do or permit anything to be done in the Premises, in
violation of the Certificate of Occupancy for the Premises or for the Building.

 

3       PREPARATION OF THE PREMISES

 

3.1       CONDITION OF PREMISES.  Except as otherwise expressly provided in
§ 3.2 below and the “Work Letter Agreement” which shall be executed by
Landlord and Tenant concurrently with their execution of this Lease
substantially in the form attached hereto as Exhibit F,
Tenant shall accept the Premises, any existing Improvements in the Premises (as
defined in § 10.1 below), and the Systems and Equipment serving the same
in an “as is” condition on the date the Term commences, and Landlord shall
have no obligation to improve, alter, remodel, or otherwise modify the Premises
prior to Tenant’s occupancy.

 

 

15

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

3.2       LANDLORD’S PREPARATION.  Landlord shall use reasonable diligence in
completing and preparing the Premises for Tenant’s occupancy in the manner and
subject to the terms, conditions, and covenants set forth in the Work Letter
Agreement.  The facilities, materials,
and work to be furnished, installed, and performed in the Premises by Landlord
pursuant to the Work Letter Agreement are referred to as the “Work.”  Such other installations, materials, and work
which may be undertaken by or for the account of Tenant to prepare, equip,
decorate, and furnish the Premises for Tenant’s occupancy are referred to as
the “Tenant’s Work.”  Landlord and Tenant
agree that Landlord’s Work specified in the Work Letter Agreement shall include
the following items:

 

(i)                Moving Allowance.  In addition to the Improvement Allowance
specified in the Work Letter Agreement, Landlord shall pay to Tenant a moving
allowance of  [*]  to be applied to the cost of relocating and
installing Tenant’s furniture, cubicles, network, and telephone equipment,
which moving allowance Landlord shall pay to Tenant within thirty (30) days
following Tenant’s submittal of paid receipts, vouchers, and such other
documentation as Landlord may reasonably request; and

 

(ii)            Supplemental HVAC.  Landlord at its sole cost and expense shall
hire a mechanical engineer to design in cooperation with Tenant’s architects
and consultants the HVAC system proposed for Tenant to address the western
exposure of Tenant’s office space. 
Landlord shall install a supplemental HVAC system in accordance with the
Work Letter Agreement to cover one (1) entire wing of the three (3) wings
of the fifth floor space to accommodate Tenant’s extended hours business (the “Southeast
Wing HVAC”) and a portion of a second wing to accommodate after-hours operation
of Tenant’s data/server rooms (the “Data Rooms HVAC”) (collectively the “Supplemental
HVAC System”).  Landlord agrees that
CalAir shall be an approved vendor for Tenant’s Supplemental HVAC System
construction and one of the approved bidders for the overall HVAC work to be
completed as part of Landlord’s Work. 
Pricing, cost allocation, and scope of the 5th floor
Supplemental HVAC System are addressed in the Work Letter Agreement.

 

3.2.2       Readiness for Occupancy.  The Premises shall be deemed ready for
occupancy on the earliest date on which all of the following conditions (the “Occupancy
Conditions”) have first been met:

 

(a)         Substantial Completion of
Work.  The Work has been
substantially completed; and it shall be so deemed notwithstanding the fact
that minor or insubstantial details of construction, mechanical adjustment, or
decoration remain to be performed, the noncompletion of which does not
materially interfere with Tenant’s beneficial use of the Premises for their
intended purposes;

 

(b)         Access and Services.  Reasonable means of access and facilities
necessary to Tenant’s use and occupancy of the Premises, including corridors, elevators,
stairways, heating, ventilating, air-conditioning, sanitary, water, and
electrical facilities (but exclusive of parking facilities) have been installed
and are in reasonably good operating order and available to Tenant; and

 

(c)          Certificate of Occupancy
or Completion.  A certificate of
occupancy, certificate of completion, final inspection card, or similar
required governmental approval (temporary or final) has been issued by the City
of South San Francisco permitting use of the Premises for office purposes.

 

 

16

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

The parties anticipate that Substantial Completion of
Landlord’s Work in Suite [*] shall occur on or before February 1,
2004 (the “Target Date”) and that Substantial Completion of Landlord’s
Work in Suite 400 shall occur
on or before August 1, 2004 (the “Suite 400
Target Date”).

 

3.2.3       Tenant Delays.  If the occurrence of any of the Occupancy
Conditions and Landlord’s preparation of the Premises for occupancy shall be
delayed owing materially to either (a) any act, omission, or failure of
Tenant or any of its employees, agents, or contractors which shall continue
after Landlord shall have given Tenant reasonable notice that such act,
omission, or failure would result in delay, and such delay shall have been
unavoidable by Landlord in the exercise of reasonable diligence and prudence;
or (b) the nature of any items of additional work or change orders that
Landlord undertakes to perform for the account of Tenant (including any delays
incurred by Landlord, after making reasonable efforts, in procuring any
materials, equipment, or fixtures of a kind or nature not used by Landlord as
part of its standard construction) (collectively “Tenant Delays”), then the
Premises shall be deemed ready for occupancy on the date when they would have
been ready but for such Tenant Delays.

 

3.3       EARLY ENTRY.  During any period that Tenant shall be
permitted to enter the Premises prior to the Commencement Date other than to
occupy the same (e.g., to perform alterations or
improvements), Tenant shall comply with all terms and provisions of this Lease,
except those provisions requiring the payment of Rent.  If Tenant shall be permitted to enter the
Premises prior to the Commencement Date for the purpose of occupying the same,
Rent shall commence on the date Tenant commences business operations from the
Premises at the rate specified in the Table for the first period during which
Rent is payable after the Commencement Date; and if Tenant shall commence
occupying only a portion of the Premises prior to the Commencement Date, Rent
shall be prorated based on the number of rentable square feet occupied by
Tenant.  Landlord shall permit early
entry, provided the Premises are legally available and Landlord has completed
any Work required under this Lease.  In
no event shall Tenant’s early entry extend or shorten the Term of the Lease set
forth in § 1.2 above.  Landlord
agrees that, subject to the provisions of this Article 3, Tenant’s
telecommunication vendors shall have the right to install Tenant’s telephone
and data lines in Suite [*] as soon as the walls are roughed out in
anticipation of Tenant’s move into Suite [*] on or after the Commencement
Date, provided such vendors shall not delay or interfere in the construction of
the Work.

 

3.4       NOTICE OF DEFECTS.  It shall be conclusively presumed upon Tenant’s
taking actual possession of the Premises that the same were in satisfactory
condition (except for latent defects and punchlist items) as of the date of
such taking of possession, unless with respect to punchlist items within
thirty (30) days after the Commencement Date and within thirty (30) after
discovery with respect to latent defects Tenant shall give Landlord notice in
writing specifying the respects in which the Premises were not in satisfactory
condition.

 

4       ADJUSTMENTS OF RENT

 

4.1       TAXES, UTILITIES, AND
OPERATING EXPENSES.  In addition to
the Base Rent and all other payments due under this Lease, Tenant shall pay to
Landlord, in the manner set forth in this Article 4, as Additional Rent,
the following amounts:

 

(a)         Increased Operating
Expenses.  An amount equal to Tenant’s
Pro Rata Share of that portion of Operating Expenses paid by Landlord during
each Adjustment Period which exceeds the amount of Base Operating Expenses (as
all of such terms are defined in § 4.2 below).

 

 

17

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(b)         Increased Utilities.  An
amount equal to Tenant’s Pro Rata Share of that portion of Utilities paid by
Landlord during each Adjustment Period which exceeds the amount of Base
Utilities (as all of such terms are defined in § 4.2 below).

 

(c)          Increased Taxes.  An amount equal to Tenant’s Pro Rata Share of
that portion of Real Estate Taxes paid by Landlord during each Adjustment
Period which exceeds the amount of Base Real Estate Taxes (as all of such terms
are defined in § 4.2 below).

 

Tenant’s Pro Rata Share of (i) such increase in
Operating Expenses over the Base Operating Expenses, (ii) such increase in
Utilities over Base Utilities, and (iii) such increase in Real Estate Taxes
over the Base Real Estate Taxes is sometimes referred to collectively herein as
the “Rental Adjustment.”

 

4.2            DEFINITIONS.  For the purposes of this Lease, the following
definitions shall apply:

 

(a)         Base
Operating Expenses.  “Base
Operating Expenses” means the total of Operating Expenses paid by Landlord
during calendar year 2004 (the “Base Expense
Year”), as adjusted under § 4.6 below.

 

(b)         Base
Utilities.  “Base
Utilities” means the total of Utilities paid by Landlord during calendar year 2004 (the “Base Utilities Year”), as adjusted
under § 4.6 below.

 

(c)          Base Real
Estate Taxes.  “Base Real
Estate Taxes” means the total of Real Estate Taxes paid by Landlord during calendar year 2004 (the “Base Tax Year”).

 

(d)         Tenant’s Pro
Rata Share.  “Tenant’s Pro
Rata Share” as to the Building is the percentage labeled as such in the Table
in § 1.3 and is calculated by dividing the agreed rentable area of the
Premises (numerator) by the agreed rentable area of the Property (denominator)
and expressing the resulting quotient as a percentage. “Tenant’s Pro Rata Share”
as to the Complex is the percentage labeled as such in the Table in § 1.3
as is calculated by dividing the agreed rentable area of the Premises
(numerator) by the agreed rentable area of the Complex (denominator) and
expressing the resulting quotient as a percentage.  Tenant’s Pro Rata Share shall be adjusted
during the Term in proportion to any change in the area of the Premises,
Building, or Complex in accordance with the formula stated herein.

 

(e)          Adjustment
Period.  “Adjustment
Period” as to Operating Expenses, Utilities, and Real Estate Taxes means each
calendar year of which any portion occurs during the Term, excluding the Base
Year and beginning with the first calendar year immediately following the Base
Year.

 

(f)           Real Estate
Taxes.  “Real Estate Taxes”
means all of the following charges, whether or not now customary or in the
contemplation of the parties hereto, and whether or not general, special,
ordinary, or extraordinary, which Landlord shall pay during any Adjustment
Period because of or in connection with the ownership, leasing, or operation of
the Property:

 

(1)                 ad valorem real property taxes;

 

(2)                 any form of
assessment, license fee, license tax, business license fee, commercial rental tax,
levy, charge, fee, tax, or other imposition imposed by any authority, including
any city, county, state, or federal governmental

 

 

18

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

agency, or any school,
agricultural, lighting, transportation, housing, drainage, or other improvement
or special assessment district thereof;

 

(3)                 any tax on
Landlord’s ‘right’ to rent or ‘right’ to other income from the Building or as
against Landlord’s business of leasing the Building;

 

(4)                 any
assessment, tax, fee, levy, or charge in substitution, partially or totally, of
any assessment tax, fee, levy or charge previously included within the
definition of Real Estate Taxes, it being acknowledged by Tenant and Landlord
that Proposition 13 was adopted by the voters of the State of California in the
Election of June, 1978, and that assessments, taxes, fees, levies, and charges
may be imposed by governmental agencies for such services as fire protection,
street, sidewalk, and road maintenance, refuse removal, and for other
governmental services formerly provided without charge to property owners or
occupants, and it being the intention of Tenant and Landlord that all such new
and increased assessments, taxes, fees, levies, and charges be included within
the definition of Real Estate Taxes for the purposes of this Lease;

 

(5)                 any
assessment, tax, fee, levy, or charge allocable to or measured by the area of
the Building or Property or the Rent payable hereunder, including any gross
income tax or excise tax levied by any city, county, state, or federal
governmental agency or any political subdivision thereof with respect to the
receipt of such Rent, or upon or with respect to the possession, leasing,
operating, management, maintenance, alteration, repair, use, or occupancy by
Tenant of the Property or any portion thereof;

 

(6)                 any
assessment, tax, fee, levy, or charge upon this transaction or any document to
which Tenant is a party, creating or transferring an interest or an estate in
the Building or Property;

 

(7)                 any
assessment, tax, fee, levy, or charge by any governmental agency related to any
transportation plan, fund, or system instituted within the geographic area of
which the Building is a part; or

 

8)                     reasonable
legal and other professional fees, costs and disbursements incurred in connection
with proceedings to contest, determine or reduce Real Estate Taxes.

 

Exclusions.  Notwithstanding the foregoing, Real Estate
Taxes shall not include (A) federal, state, or local income taxes; (B) franchise,
gift, transfer, excise, capital stock, estate, succession, or inheritance
taxes; or (C) penalties or interest for late payment of Real Estate Taxes.

 

(g)         Operating
Expenses.  “Operating
Expenses” means all expenses, costs, and amounts (other than Real Estate Taxes
and Utilities) of every kind and nature which Landlord shall pay during any
Adjustment Period of which any portion occurs during the Term, because of or in
connection with the ownership, management, repair, maintenance, restoration,
and/or operation of the Property. 
Operating Expenses shall be calculated in accordance with
generally-accepted accounting principles, consistently applied, except to the
extent that any other method of

 

 

19

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

calculation or
characterization shall expressly be permitted hereunder, including costs of the
following:

 

(1)                 permits,
licenses, and certificates necessary to operate, manage, and lease the
Property;

 

(2)                 supplies,
tools, equipment, and materials used in the operation, repair, and maintenance
of the Property;

 

(3)                 all insurance
premiums for any insurance policies deemed necessary or desirable by Landlord
(including workers’ compensation, health, accident, group life, public
liability, property damage, earthquake, and fire and extended coverage
insurance for the full replacement cost of the Property as required by Landlord
or its lenders for the Property);

 

(4)                 the
deductible portion of any claim paid under any insurance policy other than any
earthquake policy maintained by Landlord in connection with its management and
operation of the Property;

 

(5)                 reasonable
accounting, legal, inspection, consulting, concièrge, and other similar
services;

 

(6)                 services of
independent contractors;

 

(7)                 compensation
(including employment taxes and fringe benefits) of all persons who perform
duties in connection with the operation, maintenance, repair, or overhaul of
the Building or Property, and equipment, improvements, and facilities located
within the Property, including engineers, janitors, painters, floor waxers,
window washers, security, parking personnel, and gardeners;

 

(8)                 operation and
maintenance of a room for delivery and distribution of mail to tenants of the
Building as required by the U.S. Postal Service (including an amount equal to
the fair market rental value of the mail room premises);

 

(9)                 management of
the Building or Property, whether managed by Landlord or an independent
contractor (including an amount equal to the fair market value of any on-site
manager’s office), provided that such amount shall not exceed the management
fee that would be charged by a third-party manager if the Property is managed
by Landlord or an affiliate of Landlord;

 

(10)          rental expenses for
(or a reasonable depreciation allowance on) personal property used in
maintenance, operation, or repair of the Property and installment equipment
purchase or equipment financing agreements for such personal property;

 

(11)          costs, expenditures,
or charges (whether capitalized or not) required by any governmental or
quasi-governmental authority after the Commencement Date;

 

(12)          payments to a third
party under any easement, operating agreement, declaration, restrictive
covenant, or instrument pertaining to the sharing of costs in any planned
development;

 

 

20

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(13)                    amortization
of capital expenses (including financing costs) incurred by Landlord after the
Commencement Date in order to (A) comply with Laws, (B) reduce
Property Operating Expenses or Utilities, or (C) upgrade the utility,
efficiency, or capacity of any utility or telecommunication systems serving
tenants of the Property, provided that, as to (B) and (C), such expenses
shall be included only to the extent of the savings generated thereby;

 

(14)                    operation,
repair, and maintenance of all Systems and Equipment and components thereof
(including replacement of components); janitorial service; alarm and security
service; window cleaning; trash removal; elevator maintenance; cleaning of
walks, parking facilities, and building walls; removal of ice and snow;
replacement of wall and floor coverings, ceiling tiles, and fixtures in
lobbies, corridors, restrooms and other common or public areas or facilities;
maintenance and repair of the roof and exterior fabric of the Building,
including replacement of glazing as needed; maintenance and replacement of
shrubs, trees, grass, sod, and other landscaped items, irrigation systems,
drainage facilities, fences, curbs, and walkways; repaving and restriping
parking facilities; and roof repairs;

 

(15)                    the
operation of any on-site maintenance shop(s) and the operation and
maintenance of the Athletic Facility, any other fitness center, conference
rooms, and all other common areas and amenities in the Property;

 

(16)                    provision
of shuttle busses, shuttle services, and drivers between the Complex and BART
and SFO airport, as required by the Bay Area Regional Transportation Act and
deed covenants and restrictions applicable to the Complex; and

 

(17)                    any
other costs or expenses reasonably incurred by Landlord which are reasonably
necessary to operate, repair, manage, and maintain the Building and Property in
a first-class manner and condition and which are not otherwise reimbursed by
tenants of the Building.

 

(h)                 Utilities.  “Utilities”
means all expenses, costs, and amounts of every kind and nature which Landlord
shall pay during any Adjustment Period of which any portion occurs during the
Term, because of or in connection with the electricity, power, gas, steam, oil
or other fuel, water, sewer, lighting, heating, air conditioning, and ventilating
delivered to or consumed or used in or on the Property.

 

4.2.1     Exclusions from
Operating Expenses.  Notwithstanding
anything to the contrary herein, Operating Expenses shall not include (A) depreciation,
interest, and amortization on Superior Mortgages (as defined in § 18.1
below), and other debt costs or ground lease payments, if any; (B) legal
fees in connection with leasing, tenant disputes, or enforcement of leases; (C) real
estate brokers’ leasing commissions; (D) improvements or alterations to tenant
spaces; (E) the cost of providing any service directly to, and reimbursed
or paid directly by, any tenant; (F) any costs expressly excluded from
Operating Expenses elsewhere in this Lease; (G) costs of any items to the
extent Landlord receives reimbursement from insurance proceeds or from a third
party (such proceeds to be deducted from Operating Expenses in the year in
which received); (H) capital expenditures, except those expressly
permitted above; provided, all such permitted capital expenditures (together
with reasonable financing charges) shall be amortized for purposes of this

 

 

21

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Lease over the
shorter of (x) their useful lives or (y) the period during which the
reasonably estimated savings in Operating Expenses equals the
expenditures.  The following specific
categories of expenses are also excluded hereunder from the definition of
Operating Expenses:

 

(a)                  Real
Estate Taxes;

 

(b)                  leasing
commissions, costs, disbursements, and other expenses incurred for leasing,
renovating, or improving space for tenants;

 

(c)                  costs
(including permit, license, and inspection fees and tenant improvement
allowances) incurred in renovating, improving, decorating, painting, or
redecorating vacant space or space for tenants;

 

(d)                  Landlord’s
cost of electricity or other service sold to tenants for which Landlord is to
be reimbursed as a charge over the Rent and Additional Rent payable under the
lease with that tenant;

 

(e)                  except
as otherwise expressly permitted hereunder, costs incurred by Landlord for
alterations that are considered capital improvements and replacements under
generally-accepted accounting principles consistently applied;

 

(f)                    depreciation
and amortization on the Building except as expressly permitted elsewhere in the
Lease;

 

(g)                 except
as otherwise expressly permitted hereunder, costs of a capital nature including
capital improvements, capital repairs, capital equipment, and capital tools, as
determined under generally-accepted accounting principles consistently applied;

 

(h)                 costs
incurred because Landlord or another tenant violated the terms of any lease;

 

(i)                    overhead
and profit paid to subsidiaries or affiliates of Landlord for management or
other services on or to the Property or for supplies or other materials, to the
extent that the costs of the services, supplies, or materials exceed the amount
customarily charged by an independent entity for such services, supplies, or
materials;

 

(j)                    interest
on debt or amortization payments on mortgages or deeds of trust or any other
debt for borrowed money;

 

(k)                compensation
paid to clerks, attendants, or other persons in commercial concessions operated
by Landlord;

 

(l)                    rentals
and other related expenses incurred in leasing air conditioning systems,
elevators, or other equipment ordinarily considered to be of a capital nature,
except equipment used in providing janitorial services that is not affixed to
the Building;

 

(m)              items
and services for which Tenant reimburses Landlord or pays third parties or that
Landlord provides selectively to one or more tenants of the Building other than
Tenant without reimbursement;

 

 

22

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(n)                 advertising
and promotional expenditures;

 

(o)                  repairs
or other work needed because of fire, windstorm, or other casualty or cause
insured against by Landlord or to the extent Landlord’s insurance required
under the Lease would have provided insurance, whichever is the greater
coverage;

 

(p)                  costs
incurred in operating the parking facilities for the Building except to the
extent the cost of operating the parking facilities exceeds the revenues
generated from operating the parking facilities;

 

(q)                  nonrecurring
costs incurred to remedy structural defects in original construction materials
or installations;

 

(r)                  any
costs, fines, or penalties incurred because Landlord violated any governmental rule or
authority;

 

(s)                  costs
incurred to test, survey, cleanup, contain, abate, remove, or otherwise remedy
Hazardous Material in, on, or under the Property unless the Hazardous Material
were in, on, or under the Property because of Tenant’s negligence or
intentional acts;

 

(t)                    costs
incurred to comply with the Americans with Disabilities Act, except to the
extent compliance is required because of amendments to the ADA which amendment(s) became
effective after the date this Lease is signed;

 

(u)                 costs
for sculpture, paintings, or other art beyond what is customary and usual
commercial practice in the vicinity of the Building; and

 

(v)                   except
as otherwise expressly permitted hereunder, other expenses that under
generally-accepted accounting principles consistently applied would not be
considered normal maintenance, repair, management, or operation expenses.

 

4.3               MANNER
OF PAYMENT.  To provide for current
payments of the Rental Adjustment, Tenant shall pay as Additional Rent during
each Adjustment Period an amount equal to Landlord’s estimate of the Rental
Adjustment which will be payable by Tenant for such Adjustment Period.  Such payments shall be made in monthly
installments, commencing on the first day of the month following the month in
which Landlord notifies Tenant of the amount it is to pay hereunder and
continuing until the first day of the month following the month in which
Landlord gives Tenant a new notice of the estimated Rental Adjustment.  It is the intention hereunder to estimate
from time to time the amount of Tenant’s Rental Adjustment for each Adjustment
Period and then to effect a reconciliation in the following year based on the
actual expenses incurred for the preceding Adjustment Period, as provided in
4.4 below.

 

4.4               RECONCILIATION.  On or before the first day of April of
each year after the first Adjustment Period (or as soon thereafter as is
practical), Landlord shall deliver to Tenant a statement (the “Statement”)
setting forth the Rental Adjustment for the preceding year.  If the actual Rental Adjustment for the
preceding Adjustment Period exceeds the total of the estimated monthly payments
made by Tenant for such Adjustment Period, Tenant shall pay Landlord the amount
of the deficiency within ten (10) business days of the receipt of the
Statement.  If such total of estimated
payments made exceeds the actual Rental Adjustment for such Adjustment Period,
then Tenant shall receive a refund for the difference within ten (10) business
days.  If the credit is due from Landlord
on the Expiration Date, Landlord shall pay Tenant

 

 

23

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

the amount of the credit, less any Rent then due.  The obligations of Tenant and Landlord to
make payments required under this § 4.3 shall survive the expiration or
earlier termination of the Term of this Lease.

 

4.4.1     Changes in
Method.  So long as Tenant’s
obligations hereunder are not materially adversely affected thereby, Landlord
reserves the right reasonably to change the manner or timing of the foregoing
payments.  In lieu of providing one
Statement covering Real Estate Taxes, Utilities, and Operating Expenses,
Landlord may provide separate statements, at the same or different times.  No delay by Landlord in providing the
Statement (or separate statements) shall be deemed a default by Landlord or a
waiver of Landlord’s right to require payment of Tenant’s obligations for
actual or estimated Real Estate Taxes, Utilities, or Operating Expenses.  Subject to § 4.7 below, in no event
shall a decrease in Real Estate Taxes, Utilities, or Operating Expenses below
the Base Operating Expenses, Base Utilities, or Base Real Estate Taxes ever
decrease the monthly Base Rent or give rise to a credit in favor of Tenant.

 

4.4.2     Proration of
Rental Adjustment.  If the Term does
not commence on January 1 or does not end on December 31, Tenant’s
obligations to pay estimated and actual amounts towards Real Estate Taxes,
Utilities, and Operating Expenses for such first or final calendar year shall
be prorated to reflect the portion of such year(s) included in the
Term.  Such proration shall be made by
multiplying the total estimated or actual (as the case may be) Real Estate
Taxes, Utilities, and Operating Expenses for such calendar year(s), as well as
the Base Real Estate Taxes, Base Utilities, and Base Operating Expenses, by a
fraction, the numerator of which shall be the number of days of the Term during
such calendar year, and the denominator of which shall be three hundred
sixty-five (365).

 

4.5               GROSS-UP.
 If the Building or Complex is less
than ninety-five percent (95%) occupied during any Adjustment Period, then
Operating Expenses, Utilities, and Real Estate Taxes for such Adjustment Period
shall be “grossed up” to that amount of Operating Expenses, Utilities, and Real
Estate Taxes that, using reasonable projections, would normally have been
incurred during such Adjustment Period if the Building or Complex had been
ninety-five percent (95%) occupied during the Adjustment Period.  Only those component elements or items of
expense of Operating Expenses, Utilities, and Real Estate Taxes that are
affected by variations in occupancy levels shall be grossed up.

 

4.6               ADJUSTMENT
OF BASE OPERATING EXPENSES.  Notwithstanding anything to the contrary
contained in the Lease, the parties agree that Base Operating Expenses and
Operating Expenses for any subsequent Adjustment Period (herein called “Subsequent
Operating Expenses”) shall be subject to further adjustment by Landlord as
follows:

 

(a)                       Exclusion
of Capital Expenditures.  Landlord
may exclude from Base Operating Expenses capital expenditures otherwise
permitted, provided Landlord shall also exclude any amortization of such
expenditures from Subsequent Operating Expenses.

 

(b)                       Elimination
of Recurring Expenses.  If Landlord
eliminates from any Subsequent Operating Expenses a category of recurring
expenses previously included in Base Operating Expenses, Landlord may subtract
such category from Base Operating Expenses commencing with such subsequent
Adjustment Period.

 

(c)                       New
Recurring Expenses.  If Landlord
includes a new category of recurring Subsequent Operating Expenses not
previously included in Base Operating Expenses, Landlord shall also include an
amount (the “Assumed Base Amount”)

 

 

24

 

[*] =
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

for such category
in Base Operating Expenses commencing in such subsequent Adjustment Period.

 

(d)                  Assumed
Base Amount.  The “Assumed Base
Amount” under § 4.6(c) above shall be the annualized amount of expenses
for such new category in the first Adjustment Period it is included, reduced by
an amount determined in Landlord’s sole good faith discretion (but in no event
by an amount less than five percent (5%)) for each full or partial
Adjustment Period that has elapsed during the Term of the Lease before such
Adjustment Period.

 

4.7               ADJUSTMENT
OF REAL ESTATE TAXES.  If Base Real
Estate Taxes are reduced as the result of protest, by means of agreement, as
the result of legal proceedings, or otherwise, Landlord may adjust Tenant’s
obligations for Real Estate Taxes in all years affected by any refund of taxes
following the Base Tax Year; and Tenant shall pay Landlord within
thirty (30)days after notice any additional amount required by such
adjustment for any Adjustment Periods that have theretofore occurred.  Tenant shall be entitled to receive a share
of any refund or abatement of Real Estate Taxes received by Landlord to the
extent of and in proportion to Tenant’s actual contribution to the amount of
Real Estate Taxes paid by Landlord during the period to which such refund or
abatement relates; and in addition Landlord agrees to give Tenant an equitable
credit against the total amount of Additional Rent that would otherwise be due
hereunder to the extent that any reassessment (other than a reassessment
triggered by a sale of the Building or Property) reduces the annual amount of
Real Estate Taxes payable by Landlord with respect to the Building or Property
and such Real Estate Taxes were allocated to the computation of Tenant’s Base
Year Real Estate Taxes hereunder.  If
Real Estate Taxes for any Adjustment Period during the Term or any extension
thereof shall be increased after payment thereof by Landlord for any reason,
including error or reassessment by applicable governmental authorities, Tenant
shall pay Landlord upon demand Tenant’s Pro Rata Share of such increased Real
Estate Taxes.  Tenant shall pay increased
Real Estate Taxes whether Real Estate Taxes are increased as a result of
increases in the assessment or valuation of the Property (whether based on a
sale, change in ownership, refinancing of the Property, or otherwise),
increases in the tax rates, reduction or elimination of any rollbacks or other
deductions available under current law, scheduled reductions of any tax
abatement, as a result of the elimination, invalidity, or withdrawal of any tax
abatement, or for any other cause whatsoever. 
Notwithstanding the foregoing, if any Real Estate Taxes shall be paid
based on assessments or bills by a governmental authority using a fiscal year
other than a calendar year, Landlord may elect to average the assessments or
bills for the subject calendar year, based on the number of months of such
calendar year included in each such assessment or bill.

 

4.7.1     Tax Increases
after a Property Transfer. 
Notwithstanding anything to the contrary contained herein, in the event
the Property is sold or otherwise transferred during the initial term of this
Lease (the “Sale”), and the assessed value of the Property is increased as a
result of the Sale, only the following percentages of any increase in Real
Property Taxes above the Base Year Real Property Taxes resulting from such
increase in assessed valuation shall be included in Real Property Taxes for
purposes of determining Additional Rent:

 

	
  If the Sale Occurs

  	
   

  	
  Percentage of Increased Real

  Property Taxes Applicable For

  Remainder of the Lease Term

  	
   

  
	
  Prior to first anniversary of Commencement Date

  	
   

  	
  Zero

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after first anniversary of Commencement Date

  but prior to second anniversary of Commencement Date

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after second anniversary of Commencement Date

  but prior to third anniversary of Commencement Date

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after third anniversary of Commencement Date

  but prior to fourth anniversary of Commencement Date

  	
   

  	
  75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after fourth anniversary of Commencement Date

  	
   

  	
  100

  	
  %

  

 

 

25

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

In addition, following
any such Sale, the same restrictions specified in the above table shall again
apply with respect to any subsequent Sale in determining the allowable amount
of any increases in Real Property Taxes used to compute Tenant’s Additional
Rent under § 4.1 above, except that the time periods shall run from the
date of any such Sale instead of from the Commencement Date.

 

4.8               ALLOCATION WITHIN
COMPLEX.  So long as the Property
shall be part of the Complex collectively owned or managed by Landlord or its
affiliates or collectively managed by Landlord’s managing agent, Landlord shall
allocate Real Estate Taxes, Utilities, and Operating Expenses within the
Complex and between the buildings and structures comprising the Complex and the
parcels on which they are located.  In
the alternative, Landlord shall have the right to determine Tenant’s Pro Rata
Share of Real Estate Taxes, Utilities, and Operating Expenses based upon the
totals of each of the same for all such buildings and structures, the land
constituting parcels on which the same are located, and all related facilities,
including common areas and easements, corridors, lobbies, sidewalks, elevators,
loading areas, parking facilities, driveways, and other appurtenances and
public areas, in which event Tenant’s Pro Rata Share shall be based on the
ratio of the rentable area of the Premises to the rentable area of all buildings
in the Complex.

 

4.9               LANDLORD’S RECORDS.  Landlord shall maintain records with
respect to Real Estate Taxes, Utilities, and Operating Expenses and determine
the same.  Although this Lease
contemplates the computation of Real Estate Taxes, Utilities, and Operating
Expenses on a cash basis, Landlord shall make reasonable and appropriate
accrual adjustments (including adjustment of Base Year Real Estate Taxes,
Utilities, and Operating Expenses) to ensure that each Adjustment Period
includes substantially the same recurring items.  Landlord reserves the right to change to a
full accrual system of accounting so long as the same is consistently applied
and Tenant’s obligations are not materially adversely affected.  Tenant or its representative shall have the
right to examine such records, upon reasonable prior written notice specifying
such records Tenant desires to examine, during normal business hours at the
place or places where such records are normally kept, by sending such notice no
later than forty-five (45) days following the furnishing of the Statement.

 

4.9.1     Tenant’s
Audit Right.  Upon written notice to
Landlord delivered within forty-five (45) days following the furnishing of the
Statement, Tenant shall have the right to have Landlord’s records with respect
to Real Estate Taxes, Utilities, and Operating Expenses audited by an
accountant of Tenant’s choice.  Tenant
shall pay the cost of such audit, unless such audit determines that Tenant was
overbilled for Real Estate Taxes, Utilities, or Operating Expenses by more than
four percent (4%).  Pending resolution of
any such exceptions in the foregoing manner, Tenant shall continue paying
Tenant’s Pro Rata Share of Real Estate Taxes and Operating Expenses in the
amounts determined by Landlord, subject to adjustment after any such exceptions
are so resolved.  Any specific matter
that has formed the subject of an audit hereunder shall not be subject to
re-audit at any subsequent time.

 

 

26

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

4.10        OTHER TAXES PAYABLE BY TENANT.
 In addition to the Base Rent and any
other charges to be paid by Tenant hereunder, Tenant shall, as an element of
Rent, reimburse Landlord upon demand for any and all taxes payable by Landlord
(other than net income taxes) which are not otherwise reimbursable under this
Lease, whether or not now customary or within the contemplation of the parties,
where such taxes are upon, measured by, or reasonably attributable to (A) the
cost or value of Tenant’s equipment, furniture, fixtures, and other personal property
located at the Premises, or the cost or value of any improvements made in or to
the Premises by or for Tenant, regardless of whether title to such improvements
is held by Tenant or Landlord; (B) the gross or net Rent payable under
this Lease, including any rental or gross receipts tax levied by any taxing
authority with respect to the receipt of the Rent hereunder; (C) the
possession, leasing, operation, management, maintenance, alteration, repair,
use, or occupancy by Tenant of the Premises or any portion thereof; or (D) this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises. 
Tenant shall pay any rent tax, sales tax, service tax, transfer tax,
value-added tax, or any other applicable tax on the Rent or services herein or
otherwise respecting this Lease.

 

5       SECURITY DEPOSIT

 

5.1               DEPOSIT FOR
SECURITY.  Tenant shall deposit with
Landlord the amount of One Hundred Thousand
Dollars ($100,000) in cash or by irrevocable standby letter of
credit in form reasonably satisfactory to Landlord (the “Security Deposit”)
upon Tenant’s execution and submission of this Lease.  The Security Deposit shall serve as security
for the prompt, full, and faithful performance by Tenant of the terms and provisions
of this Lease.  Landlord shall not be
required to keep the Security Deposit separate from Landlord’s general funds or
pay interest on the Security Deposit.

 

5.1.1     Application
of Deposit.  In the event that Tenant
is in Default hereunder and fails to cure within any applicable time permitted
under this Lease, or in the event that Tenant owes any amounts to Landlord upon
the expiration of this Lease, Landlord may use or apply the whole or any part
of the Security Deposit for the payment of Tenant’s obligations hereunder.  The use or application of the Security
Deposit or any portion thereof shall not prevent Landlord from exercising any
other right or remedy provided hereunder or under any Law and shall not be construed
as liquidated damages.

 

5.1.2     Restoration
of Full Deposit.  In the event the
Security Deposit is reduced by such use or application, Tenant shall deposit
with Landlord, within ten (10) business days after written notice, an
amount sufficient to restore the full amount of the Security Deposit.

 

5.1.3     Disposition
of Security Deposit.  After the
Expiration Date or any earlier termination of the Lease, any remaining portion
of the Security Deposit shall be returned to Tenant in accordance with the
provisions of § 1950.7 of the California Civil Code.

 

6       COMPLIANCE WITH LAWS

 

6.1               TENANT’S COMPLIANCE
WITH LAWS.  Tenant shall use the
Premises in compliance with all applicable federal, state, county, and local
governmental and municipal laws, statutes, ordinances, rules, regulations,
codes, decrees, orders, and other such requirements, and decisions by courts in
cases where such decisions are considered binding precedents in the State of
California (the “State”), and decisions of federal courts applying the laws of
the State applicable to Tenant’s use of the Premises (collectively “Laws”).  Tenant shall, at its sole cost and expense,
promptly comply with each and all of such Laws, and also with the requirements
of any board of fire underwriters or other similar body now or hereafter
constituted to deal with the condition, use, or occupancy of the Premises,
except in the case of required

 

 

27

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

structural changes not triggered by Tenant’s change in
use of the Premises or Tenant’s alterations, additions, or improvements
therein.  Tenant shall comply with all
applicable Laws regarding the physical condition of the Premises, but only to
the extent that the applicable Laws pertain to the particular manner in which
Tenant uses the Premises or the particular use to which Tenant puts the
Premises, if different from that permitted under Article 2 of this
Lease.  Tenant shall also comply with all
applicable Laws which do not relate to the physical condition of the Premises
and with which only the occupant can comply, such as laws governing maximum
occupancy, workplace smoking, VDT regulations, and illegal business operations,
such as gambling.  The judgement of any
court of competent jurisdiction or the admission of Tenant in any judicial action,
regardless of whether Landlord is a party thereto, that Tenant has violated any
of such Laws shall be conclusive of that fact as between Landlord and Tenant.

 

6.1.1     Code
Costs.  Notwithstanding anything to
the contrary in this Article 6, if the requirement of any public authority
obligates either Landlord or Tenant to expend money in order to bring the
Premises and/or any area of the Property into compliance with Laws as a result
of (a) Tenant’s particular use or alteration of the Premises; (b) Tenant’s
change in the use of the Premises; (c) the manner of conduct of Tenant’s
business or operation of its installations, equipment, or other property
therein; (d) any cause or condition created by or at the instance of
Tenant, other than by Landlord’s performance of any work for or on behalf of
Tenant; or (e) breach of any of Tenant’s obligations hereunder, then
Tenant shall bear all costs (“Code Costs”) of bringing the Premises and/or
Property into compliance with Laws, whether such Code Costs are related to
structural or nonstructural elements of the Premises or Property.

 

6.2               LANDLORD’S
COMPLIANCE WITH LAWS.  Landlord
represents that on the Commencement Date Landlord has no actual knowledge of
any violation of any applicable Laws respecting the Premises.  During the Term Landlord shall comply with
all applicable Laws regarding the Premises, Building, Property, or Complex,
except to the extent Tenant must comply under § 6.1 above.

 

7       HAZARDOUS MATERIALS

 

7.1               REGULATION OF
HAZARDOUS MATERIALS.  Tenant shall
not transport, use, store, maintain, generate, manufacture, handle, dispose,
release, or discharge any “Hazardous Material” (as defined below) upon or about
the Property, nor permit Tenant’s employees, agents, contractors, and other
occupants of the Premises to engage in such activities upon or about the
Property.  However, the foregoing
provisions shall not prohibit the transportation to and from, and use, storage,
maintenance, and handling within, the Premises of substances customarily used
in offices, provided all of the following conditions are met:

 

(a)                       such
substances shall be used and maintained only in such quantities as are
reasonably necessary for such permitted use of the Premises, strictly in
accordance with applicable Laws and the manufacturers’ instructions therefor;

 

(b)                      such
substances shall not be disposed of, released, or discharged on the Property
and shall be transported to and from the Premises in compliance with all
applicable Laws, and as Landlord shall reasonably require;

 

(c)                       if
any applicable Laws or Landlord’s trash removal contractor requires that any
such substances be disposed of separately from ordinary trash, Tenant shall
make arrangements at Tenant’s expense for such disposal directly with a
qualified and licensed disposal company at a lawful disposal site (subject to
scheduling and approval by Landlord), and shall ensure that disposal occurs
frequently enough to prevent unnecessary storage of such substances in the
Premises; and

 

 

28

 

[*] =
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

(d)                      any
remaining such substances shall be completely, properly, and lawfully removed
from the Property upon expiration or earlier termination of this Lease.

 

7.1.1     DEFINITION
OF HAZARDOUS MATERIAL.  The term “Hazardous
Material” for purposes hereof shall mean any chemical, substance, material, or
waste or component thereof which is now or hereafter listed, defined, or
regulated as a hazardous or toxic chemical, substance, material, or waste or
component thereof by any federal, state, or local governing or regulatory body
having jurisdiction, or which would trigger any employee or community “right-to-know”
requirements adopted by any such body, or for which any such body has adopted
any requirements for the preparation or distribution of an MSDS.

 

7.2               NOTIFICATIONS.  Tenant and Landlord each shall promptly
notify the other of  (A) any
enforcement, cleanup, or other regulatory action taken or threatened by any
governmental or regulatory authority with respect to the presence of any
Hazardous Material on the Premises or in the Complex or the migration thereof
from or to other property; (B) any demands or claims made or threatened by
any party against Tenant or Landlord, as the case may be, or the Premises or
Complex relating to any loss or injury resulting from any Hazardous Material on
or from the Premises or Complex; and (C) any matters where Tenant or
Landlord is required by law to give a notice to any governmental or regulatory
authority respecting any Hazardous Material on the Premises or in the Complex,
as the case may be.  Landlord shall have
the right (but not the obligation) to join and participate, as a party, in any
legal proceedings or actions affecting the Premises initiated in connection
with any environmental, health, or safety law.

 

7.3               LIST OF HAZARDOUS
MATERIALS.  At such times as Landlord
may reasonably request, Tenant shall provide Landlord with a written list
identifying any Hazardous Material then used, stored, or maintained upon the
Premises, the use and approximate quantity of each such material, a copy of any
material safety data sheet (“MSDS”) issued by the manufacturer thereof, written
information concerning the removal, transportation, and disposal of the same,
and such other information as Landlord may reasonably require or as may be
required by law.

 

7.4               CLEANUP.  If any Hazardous Material is released,
discharged or disposed of by Tenant or any other occupant of the Premises, or
their employees, agents, or contractors, on or about the Property in violation
of the foregoing provisions, Tenant shall immediately, properly, and in compliance
with applicable Laws clean up and remove the Hazardous Material from the
Property and any other affected property and clean or replace any affected
personal property (whether or not owned by Landlord), at Tenant’s expense.  Such clean up and removal work shall be
subject to Landlord’s prior written approval (except in emergencies), and shall
include any testing, investigation, and the preparation and implementation of
any remedial action plan required by any governmental body having jurisdiction
or reasonably required by Landlord.  If
Tenant shall fail to comply with the provisions of this § 7.2 within such
time as may be required by Laws or in order to minimize any hazard to persons
or property, Landlord may (but shall not be obligated to) arrange for such
compliance directly or as Tenant’s agent through contractors or other parties
selected by Landlord, at Tenant’s expense (without limiting Landlord’s other
remedies under this Lease or applicable Laws).

 

7.5               CASUALTY DAMAGE.  If any Hazardous Material is released,
discharged, or disposed of on or about the Property and such release,
discharge, or disposal is not caused by Tenant or other occupants of the
Premises, or their employees, agents, or contractors, such release, discharge,
or disposal shall be deemed casualty damage under Article 15 to the extent
that the Premises or common areas serving the Premises are affected thereby; in
such case, Landlord and Tenant shall have the obligations and rights respecting
such casualty damage provided under Article 15 of this Lease.

 

 

29

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

7.6               REFRIGERANT.  Except as specified in Tenant’s Plans, Tenant
shall not install any refrigerant-containing systems or equipment, including
refrigerators, freezers, supplemental HVAC systems or self-contained air
conditioners, without Landlord’s prior approval, which Landlord may withhold in
its reasonable discretion.  Unless Tenant
shall have obtained Landlord’s prior written approval to install existing
equipment after an inspection, at Tenant’s sole cost and expense, by Landlord’s
engineer for defects and proper proposed installation in the Premises, all
refrigerant-containing equipment and/or systems which Tenant installs in the
Premises shall be new.  Whether Tenant’s
refrigerant-containing equipment or systems are defective and are properly
installed shall be determined at the sole discretion of Landlord’s
engineer.  If Tenant wishes to install
any refrigerant-containing equipment or systems, Tenant shall obtain and
provide Landlord with copies of all required permits associated with such
equipment or systems.

 

7.6.1     Removal
of Refrigerant.  Notwithstanding
anything to the contrary in this Lease and the Work pursuant to Exhibit F,
Tenant shall remove all refrigerant and refrigerant-containing equipment and/or
systems installed in the Premises by or on behalf of Tenant prior to the
Expiration Date of this Lease.  Prior to
the removal of any such refrigerant or refrigerant-containing equipment and/or
systems, Tenant shall submit to Landlord for Landlord’s approval, the names of
Tenant’s contractors and all plans and specifications for such removal.  Tenant and Tenant’s contractors shall comply
with all legal requirements, industry practices and reasonable rules established
by Landlord in performing such removal work. 
Tenant shall repair any damage to the Property or the Systems and
Equipment associated with such removal, and Tenant shall be responsible for the
costs associated with restoring the Property to the condition which existed
immediately prior to any modification undertaken by Landlord in order to
accommodate Tenant’s refrigerant-containing equipment or systems.

 

8       SERVICES AND UTILITIES

 

8.1               LANDLORD’S
SERVICES. Landlord agrees to provide, on the terms and conditions specified
herein, the following services and utilities for Tenant’s use and consumption
in the Premises, the cost of which shall be included in Operating Expenses
and/or Utilities and reimbursed to Landlord in accordance with § 4.1
above:

 

(a)             Electricity.  Electricity for standard office lighting
fixtures and for equipment and accessories customary for offices, provided (i) the
connected electrical load of all the same does not exceed an average of seven
point eight (7.8) watts per usable square foot of the Premises (or such
lesser amount as may be available, based on the safe and lawful capacity of the
existing electrical circuit(s) and facilities serving the Premises); (ii) the
electricity will be at nominal 120 volts, single phase (or 110 volts, depending
on available service in the Building); and (iii) the safe and lawful
capacity of the existing electrical circuit(s) serving the Premises is not
exceeded.  Landlord will permit its
electric feeders, risers, and wiring servicing the Premises to be used by
Tenant to the extent available and safely capable of being used for such purpose.

 

(b)             Telecommunications
Interface.  Interface with the
telephone network at the demarcation point or minimum point of entry (“MPOE”)
supplied by the local regulated public utility by means of Landlord’s INC
consisting of cable pairs with a capacity consistent with the engineering
standards to which the Building was designed.

 

(c)             HVAC.  Heat, ventilation, and air-conditioning (“HVAC”)
to provide a temperature required, under the specifications stated in the Plans
and in accordance with applicable Laws, for the comfortable occupancy of the
Premises during business hours (as defined in

 

 

30

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

§ 8.1.1 below).  Landlord shall not be responsible for
inadequate air-conditioning or ventilation to the extent the same occurs
because Tenant uses any item of equipment consuming more than 500 watts at
rated capacity without providing adequate air-conditioning and ventilation
therefor.  Notwithstanding anything to
the contrary herein, Landlord agrees to engineer and calibrate, at its sole cost
and expense, the 4th Floor portion of the Premises to address the
special conditions associated with the Building’s western exposure, and Tenant’s
architect or consultants shall be involved in the design and engineering of
Tenant’s HVAC systems.  Landlord agrees
that CalAir shall be an approved vendor for Tenant’s Supplemental HVAC System
and one of the approved bidders for the HVAC work to be completed as part of
Landlord’s Work under the Work Letter Agreement and as specified in § 3.2(ii) above.   Notwithstanding anything to the contrary
herein, Tenant shall maintain the Supplemental HVAC System to be installed in
the 5th Floor of the Premises as specified in
§ 3.2(ii) above at Tenant’s cost and expense.  The cost to maintain the Supplemental HVAC
System shall not be included within Operating Expenses.  Tenant’s Supplemental HVAC System shall be
separately metered and separately controlled by Tenant, and the cost for Tenant’s
use of the Supplemental HVAC System shall be allocated as follows: (a) the
cost of the Data Rooms HVAC during normal business hours shall be included in
the services to be provided by Landlord hereunder, but Tenant shall be billed
for after-hours use of its Data Rooms HVAC as provided in §§ 8.6.1 and
8.6.2 below; and (b) the cost of the Southeast Wing HVAC shall not be
included in the services to be provided by Landlord hereunder, and Tenant shall
be billed for all use of its Southeast Wing HVAC at all times (including normal
business hours) as provided in §§ 8.6.1 and 8.6.2 below.

 

(d)             Water.  Water for drinking, lavatory and toilet
purposes at those points of supply provided for nonexclusive general use of
other tenants at the Property.

 

(e)             Janitorial
Services.  Customary office cleaning
and trash removal service Monday through Friday or Sunday through Thursday in
and about the Premises.

 

(f)               Elevator
Services.  Operatorless passenger
elevator service and freight elevator service (if the Property has such
equipment serving the Premises, and subject to scheduling by Landlord) in
common with Landlord and other tenants and their contractors, agents, and
visitors.

 

8.1.1     Business
Hours.  The term business
hours in this Lease shall mean the hours from 8:00 a.m. until
6:00 p.m. on Monday through Friday and from 9:00 a.m. until 1:00 p.m.
on Saturday throughout the year, except for New Year’s Day, Presidents’ Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and
any other federally-observed holiday which may be created during the Term (“Holidays”).

 

8.1.2     Separate
Janitorial Services.  Notwithstanding
anything to the contrary herein, Tenant shall have the right, upon written
notice to Landlord, to provide its own janitorial services to the Premises
under a separate direct contract with a janitorial services provider subject to
Landlord’s reasonable approval, which shall not be unreasonably withheld,
conditioned, or delayed.  If Tenant
elects to utilize any such separate janitorial services, Landlord shall give
Tenant a credit against the Additional Rent due hereunder in the amount of any
saving realized by Landlord in the cost of janitorial services provided by
Landlord to the Building by virtue of Tenant’s provision of such separate
services; and any such separate janitorial services shall be excluded from
Tenant’s Base

 

 

31

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

                                Operating
Expenses and each Adjustment Period during which Tenant separately contracts
for its own janitorial services.

 

8.2               ADDITIONAL
ELECTRICAL CAPACITY.  Subject to Exhibit F,
any additional risers, feeders, or other equipment or service proper or
necessary to supply Tenant’s electrical requirements will be installed by
Landlord, upon written request of Tenant, at the sole cost and expense of
Tenant, if, in Landlord’s sole judgement, the same are necessary and will not
cause permanent damage or injury to the Property, the Premises, or the Systems
and Equipment or cause or create a dangerous or hazardous condition or entail
excessive or unreasonable alterations, repairs, or expense or interfere with or
disturb other tenants or occupants. 
Rigid conduit only will be allowed.

 

8.2.1     Approved
Electrical Load.  Tenant agrees not
to connect any additional electrical equipment of any type to the building
electric distribution system, beyond that on Tenant’s approved plans for
initial occupancy, other than lamps, typewriters, PCs, copy machines, and other
office machines which consume comparable amounts of electricity or other
electrical equipment which in the aggregate consumes the same amount of
electricity as those approved for initial occupancy and will not result in any
overload of electrical circuits, lines, or wiring, without Landlord’s prior
written consent.  In no event shall
Tenant use or install any fixtures, equipment, or machines the use of which in
conjunction with other fixtures, equipment, and machines in the Premises would
result in an overload or the electrical circuits servicing the Premises.  Tenant covenants and agrees that at all times
its use of electric current shall never exceed the capacity of the feeders to
the Building or the risers or wiring installation existing at the time in
question.

 

8.3               ADDITIONAL
TELECOMMUNICATIONS CAPACITY.  If
Tenant desires any telecommunications capacity in excess of that available as
of the Commencement Date in the form of the INC between the MPOE and the
telephone closet nearest the Premises and provided pursuant to § 8.1
above, Tenant shall bear the cost of installing additional risers or INC or
replacing existing INC serving the Premises pursuant to Article 9 below.

 

8.4               REPLACEMENT BULBS
AND TUBES.  Tenant shall furnish,
install, and replace, as required, all non-Building-standard lighting tubes,
lamps, bulbs, and ballasts required in the Premises, at Tenant’s sole cost and
expense.  All lighting tubes, lamps,
bulbs, and ballasts so installed become Landlord’s property upon the expiration
or sooner termination of this Lease. 
Landlord shall provide and install all Building-standard tubes, lamps,
bulbs, and ballasts.

 

8.5               TWENTY-FOUR HOURS
ACCESS.  Subject to the provisions of
§ 8.8, Tenant, its employees, agents, and invitees shall have access to
the Premises twenty-four (24) hours a day, seven (7) days a
week.  Landlord may restrict access
outside of business hours by requiring persons to show a badge or identification
card issued by Landlord.  Landlord shall
not be liable for denying entry to any person unable to show the proper
identification.  Landlord may without
liability temporarily close the Building if required because of a
life-threatening or Building-threatening situation; provided, however, that
loss of power shall not be a Building-threatening or life-threatening
situation.  Landlord shall also provide
Tenant with one (1) access card that will allow Tenant to gain entry
through the front door of the Building, should the Building ever be locked for
whatever reason.

 

8.6               EXTRA SERVICES.  Landlord shall, subject to all applicable
Laws, seek to provide such utilities or services in excess of those Landlord is
required to provide under § 8.1 above as Tenant may from time to time
request, if the same are reasonable and feasible for Landlord to provide and do
not involve modifications or additions to the Property or the Systems and
Equipment and if Landlord shall receive

 

 

32

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Tenant’s request within a reasonable period prior to
the time such extra utilities or services are required.  Landlord may comply with written or oral
requests by any officer or employee of Tenant, unless Tenant shall notify
Landlord of, or Landlord shall request, the names of authorized individuals (up
to three (3) for each floor on which the Premises are located) and
procedures for written requests.  Tenant
shall, for such extra utilities or services, pay such reasonable charges as
Landlord shall from time to time establish.

 

8.6.1     Extraordinary
Service Usage.  If Tenant shall
utilize Building services for the Premises at any time other than during
business hours, Landlord shall furnish such extraordinary services (excluding
air-conditioning, except as provided below) at Landlord’s then-current
prevailing rate for such services.  In
addition to the foregoing services, if Tenant shall require air-conditioning
service for the Premises at any time other than during business hours, Landlord
shall, upon reasonable advance notice from Tenant, furnish such after-hours
air-conditioning service at Landlord’s then-current prevailing rate for such
services as a separate charge; provided, however, in the event Tenant requests
such after-hours air-conditioning service at a time not immediately preceding
or immediately succeeding times when “regular hours” service is being furnished
hereunder, then, except for Tenant’s use of the Supplemental HVAC System,
Tenant must request not less than five (5) hours of after-hours air-conditioning
service.  Notwithstanding anything
contained herein to the contrary, Landlord’s prevailing rate for the
extraordinary services described herein shall be subject to increase from time
to time as Landlord may reasonably determine.

 

8.6.2     Payment
for Excess Usage.  All charges for
extra utilities or services or those requested outside business hours shall be
due at the same time as the installment of Base Rent with which the same are
billed, or if billed separately, shall be due within twenty (20) days
after such billing.

 

8.6.3     Changes
in HVAC System.  Use of the Premises,
or any part thereof, in a manner exceeding the design conditions (including
occupancy and connected electrical load) for the heating or cooling units in
the Premises, or rearrangement of partitioning which interferes with normal
operation of the HVAC system in the Premises, may require changes in the HVAC
system servicing the Premises.  Such
changes shall be made by Tenant, at its expense, as Tenant’s Changes pursuant
to Article 9.  Except for
thermostats fitted with externally accessible adjustments, Tenant shall not
change or adjust any closed or sealed thermostat or other element of the HVAC
system without Landlord’s express prior written consent.

 

8.6.4     Separate
Metering.  Landlord may install and
operate meters or any other reasonable system for monitoring or estimating any
services or utilities used by Tenant in excess of those required to be provided
by Landlord under this Article 8 (including a system for Landlord’s engineer
reasonably to estimate any such excess usage). 
If such system indicates such excess services or utilities, Tenant shall
pay Landlord’s reasonable charges for installing and operating such system and
any supplementary air-conditioning, ventilation, heat, electrical, or other
systems or equipment (or adjustments or modifications to the existing Systems
and Equipment), and Landlord’s reasonable charges for such amount of excess
services or utilities used by Tenant.  If
Tenant’s use of extra utilities or services causes Landlord’s regulated
baseline quantities of water, gas, electricity, or any other utility or service
to be exceeded, Tenant shall pay for such excess quantities of such utilities
or services at the rate which is imposed upon Landlord for quantities in excess
of the regulated baseline.  In addition,
Tenant shall pay prior to delinquency any fine or penalty which may be imposed
upon or assessed against Landlord or the Building or the Property by virtue of
Tenant’s excess usage of any services or utilities, including water, gas, and
electricity.

 

8.7               INTERRUPTION OF
SERVICES.  Landlord does not warrant
that any services or utilities provided hereunder for Tenant’s use in the
Premises will be free from shortages, failures, variations, or

 

 

33

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

interruptions caused by repairs, maintenance,
replacements, improvements, alterations, changes of service, strikes, lockouts,
labor controversies, accidents, inability to obtain services, fuel, steam,
water or supplies, governmental requirements or requests, or other causes
beyond Landlord’s reasonable control, including interference with light or
other incorporeal hereditaments and any interruption in services or any failure
to provide services to Landlord by a designated utility company at the
demarcation point at which Landlord accepts responsibility for such service or
at any point prior thereto, which interference impedes Landlord in furnishing
plumbing, HVAC, electrical, sanitary, life safety, elevator, telecommunications,
or other Building services, utilities, or the Systems and Equipment.  None of the same shall be deemed an eviction
or disturbance of Tenant’s use and possession of the Premises or any part
thereof, shall render Landlord liable to Tenant for abatement of Rent, or shall
relieve Tenant from performance of Tenant’s obligations under this Lease.  Landlord in no event shall be liable for
damages by reason of loss of profits, business interruption, or other
compensatory or consequential damages.

 

8.8               SAFETY AND SECURITY
DEVICES, SERVICES, AND PROGRAMS.  The
parties acknowledge that safety and security devices, services, and programs
provided by Landlord, if any, while intended to deter crime and ensure safety,
may not in given instances prevent theft or other criminal acts or ensure
safety of persons or property, and such devices, services and programs shall
not under any circumstances be deemed to be a guaranty, representation, or
warranty by Landlord to Tenant or any third parties as to the safety or protection
of person or property.  The risk that any
safety or security device, service, or program may not be effective, or may
malfunction, or be circumvented by a criminal, is assumed by Tenant with
respect to Tenant’s property and interests; and Tenant shall obtain insurance
coverage to the extent Tenant desires protection against such criminal acts and
other losses, as further described in Article 14.  Tenant agrees to coöperate in any reasonable
safety or security program developed by Landlord or required by Law.

 

9       TENANT’S CHANGES

 

9.1               TENANT’S REQUESTED
CHANGES.  Tenant may, subject to
§ 9.2 below, from time to time during the Term of this Lease, at its
expense, make such alterations, additions, installations, substitutions,
improvements, and decorations (collectively “Tenant’s Changes”) in and to the
Premises as Tenant may reasonably consider necessary for the conduct of its
business in the Premises (except for changes which would require modification
of the Property outside the Premises), on the following conditions:

 

(a)               the
outside appearance or the strength of the Building or of any of its structural
parts shall not be affected, and Tenant shall cause no penetration of the roof
or the exterior fabric of the Building;

 

(b)               no
part of the Building outside of the Premises shall be physically affected;

 

(c)               the
proper functioning of any of the Systems and Equipment shall not be adversely
affected, and the usage of such systems by Tenant shall not be increased;

 

(d)               no
such change shall require the addition of new INC riser cable or expand the
number of telephone pairs dedicated to the Premises by the Buildings’
telecommunications engineering design;

 

(e)               in
performing the work involved in making such changes, Tenant shall be bound by
and observe all of the conditions and covenants contained in the following
sections of this Article 9; and

 

 

34

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(f)                 with
respect to Tenant’s Changes, Tenant shall make all arrangements for use of the
freight elevators servicing the Premises.

 

9.2               PLANS
AND APPROVAL.  Before proceeding with
any Tenant’s Changes, Tenant shall advise Landlord thereof.  All work to be performed in the Building
shall be performed by the Contractor on the basis of plans and drawings
prepared by the Landlord’s Architect (as defined in and in the manner stated in
the Work Letter Agreement).  If Landlord
grants permission for Tenant to utilize another architect for its Changes,
before proceeding with any Tenant’s Changes, Tenant shall submit to Landlord
plans and specifications and all changes and revisions thereto for the work to
be done for Landlord’s reasonable approval; and Tenant shall, upon demand of
Landlord, pay to Landlord the reasonable costs incurred and paid to third
parties by Landlord for the review of such plans and specifications and all
changes and revisions thereto by its architect, engineer, and other
consultants.  Landlord may as a condition
of its approval require Tenant to make reasonable revisions in and to the plans
and specifications.  Landlord may require
Tenant to post a bond or other security reasonably satisfactory to Landlord to
insure the completion of such change.  If
Landlord consents to any Tenant’s Changes or supervises the work of
constructing any Tenant’s Changes, such consent or supervision shall not be
deemed a warranty as to the adequacy of the design, workmanship, or quality of
materials, and Landlord hereby expressly disclaims any responsibility or
liability for the same.  Landlord shall
under no circumstances have any obligation to repair, maintain, or replace any
portion of such work.  Notwithstanding
anything to the contrary herein, 
Landlord shall not unreasonably withhold its consent to any request of Tenant
at its own expense and subject to § 8.6.3 above at any time during the Term
to install additional supplemental HVAC in the Premises to the same
specifications as applied to the installation of Tenant’s Supplemental HVAC
under § 3.2(ii) above.

 

9.2.1     As-Built Plans.  Within thirty (30) days after completion
of Tenant’s Changes requiring the submission of plans to Landlord, Tenant shall
furnish to Landlord a complete set of “as-built” plans and specifications.

 

9.3               PERMITS
AND PERFORMANCE.  Tenant, at its
expense, shall obtain all necessary governmental permits and certificates for
the commencement and prosecution of Tenant’s Changes and for final approval
thereof upon completion and shall furnish copies thereof to Landlord.  Tenant shall cause Tenant’s Changes to be
performed in compliance therewith and with all applicable Laws and requirements
of public authorities and with all applicable requirements of insurance bodies,
and in good and workmanlike manner, using new materials and equipment at least
equal in quality and class to the original installations in the Premises.  Tenant’s Changes shall be performed in such
manner as not unreasonably to interfere with, delay, or impose any additional
expense upon Landlord in the renovation, maintenance, or operation of the
Property or any portion thereof, unless Tenant shall indemnify Landlord
therefor to the latter’s reasonable satisfaction.

 

9.4               CONTRACTORS.
 All electrical, mechanical, and
plumbing work in connection with Tenant’s Changes shall be performed by
Contractors at Tenant’s expense.  If
Tenant shall request any electrical, mechanical, or plumbing work in connection
with Tenant’s Changes, Landlord shall request the Contractors to furnish Tenant
with prices to perform the same prior to prosecuting same.  In addition to the foregoing, and
notwithstanding anything to the contrary in this Article 9, Landlord may,
at Landlord’s option, require that the work of constructing any Tenant’s
Changes be performed by the Contractor.

 

9.5               SUPERVISION
AND FEE.  Landlord may require that
all work of constructing Tenant’s Changes be performed under Landlord’s
supervision.  Tenant shall pay to
Landlord upon completion of any such work by the Contractor an administrative
fee of five percent (5%) of the cost of the work, to cover

 

 

35

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Landlord’s overhead in reviewing Tenant’s plans and
specifications and performing any supervision of the work of Tenant’s Changes.

 

9.6               RESTORATION
OF FIXTURES.  If any of Tenant’s
Changes shall involve the removal of any fixtures, equipment, or other property
in the Premises which are not Tenant’s Property (as defined in Article 10),
such fixtures, equipment, or other property shall be promptly replaced, at
Tenant’s expense, with new fixtures, equipment, or other property (as the case
may be) of like utility and at least equal value, unless Landlord shall
otherwise expressly consent in writing; and Tenant shall, upon Landlord’s
request made at the time of Tenant’s submittal of Tenant’s plans for Tenant’s
Changes, store and preserve, at Tenant’s sole cost and expense, any such
fixtures, equipment or property so removed and shall return same to Landlord
upon the expiration or sooner termination of this Lease.

 

9.7               MECHANIC’S
LIENS.  Tenant shall keep the
Property and Premises free from any mechanic’s, materialman’s, or similar liens
or other such encumbrances, including the liens of any security interest in,
conditional sales of, or chattel mortgages upon, any materials, fixtures, or
articles so installed in and constituting part of the Premises, in connection
with any Tenant’s Changes on or respecting the Premises not performed by or at
the request of Landlord and shall indemnify, defend, protect, and hold Landlord
harmless from and against any claims, liabilities, judgements, or costs
(including reasonable attorneys’ fees) arising out of the same or in connection
with any such lien, security interest, conditional sale or chattel mortgage or
any action or proceeding brought thereon. 
Tenant shall give Landlord written notice at least twenty (20) days
prior to the commencement of work on any Tenant’s Change in the Premises (or
such additional time as may be necessary under applicable Laws), in order to
afford Landlord the opportunity of posting and recording appropriate notices of
nonresponsibility.  Tenant shall remove
any such lien or encumbrance by bond or otherwise within thirty (30) days
after written notice by Landlord or at the conclusion of any contested matter
not resolved in Tenant’s favor; and if Tenant shall fail to do so, Landlord may
pay the amount necessary to remove such lien or encumbrance, without being
responsible for investigating the validity thereof.  The amount so paid shall be deemed Additional
Rent under this Lease payable upon demand, without limitation as to other
remedies available to Landlord under this Lease.  Nothing contained in this Lease shall
authorize Tenant to do any act which shall subject Landlord’s title to the
Property or Premises to any liens or encumbrances, whether claimed by operation
of law or express or implied contract. 
Any claim to a lien or encumbrance upon the Property or Premises arising
in connection with any Work on or respecting the Premises not performed by or
at the request of Landlord shall be null and void, or, at Landlord’s option,
shall attach only against Tenant’s interest in the Premises and shall in all
respects be subordinate to Landlord’s title to the Property and Premises.

 

9.8               NOTICES
OF VIOLATION.  Tenant, at its
expense, and with diligence and dispatch, shall procure the cancellation or
discharge of all notices of violation arising from or otherwise connected with
Tenant’s Changes which shall be issued by any governmental, public, or
quasi-public authority having or asserting jurisdiction.  However, nothing herein contained shall
prevent Tenant from contesting, in good faith and at its own expense, any such
notice of violation, provided that Landlord’s rights hereunder are in no way
compromised or diminished thereby.

 

9.9               INDUSTRIAL
RELATIONS.  Tenant agrees that the
exercise of its rights pursuant to the provisions of this Article 9 or any
other provision of this Lease shall not be done in a manner which would create
any work stoppage, picketing, labor disruption, or dispute or violate Landlord’s
union contracts affecting the Property and/or Complex or unreasonably interfere
with the business of Landlord or any Tenant or occupant of the Building.  Tenant shall, immediately upon notice from
Landlord, cease any activity, whether or not permitted by this Lease, giving
rise to such condition.  If Tenant fails
to do so, Landlord,

 

 

36

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

in addition to any rights available to it under this
Lease and pursuant to Law, shall have the right to an ex parte
injunction without notice.

 

10     TENANT’S PROPERTY

 

10.1        FIXTURES
AND IMPROVEMENTS.  All fixtures, equipment,
improvements, alterations, and appurtenances attached to or built into the
Premises at the commencement of or during the Term of this Lease, including
cabinets, sinks, faucets, appliances, hot water heaters, etc. (collectively “Improvements”),
whether or not by or at the expense of Tenant, shall be and remain a part of
the Premises, shall be deemed the property of Landlord, and shall not be
removed by Tenant, except as expressly provided in Article 11 below.

 

10.2        TENANT’S
PROPERTY AND TRADE FIXTURES.  All
movable partitions, trade fixtures, office machinery and equipment,
communications equipment, and computer equipment (whether or not attached to or
built into the Premises) which are installed in the Premises by or for the
account of Tenant, without expense to Landlord and which can be removed without
structural damage to the Property, and all furniture, furnishings, and other
articles of movable personal property owned by Tenant and located in the
Premises (collectively “Tenant’s Property”) shall be and shall remain the
property of Tenant and may be removed by it at any time during the Term of this
Lease; provided that if any of Tenant’s Property is removed, Tenant or any
party or person entitled to remove same shall repair or pay the cost of repairing
any damage to the Premises or to the Property resulting from such removal.  Any equipment or other property for which
Landlord shall have granted any allowance or credit to Tenant or which has
replaced such items originally provided by Landlord at Landlord’s expense shall
not be deemed to have been installed by or for the account of Tenant, without
expense to Landlord, and shall not be considered Tenant’s Property.

 

11     CONDITION UPON SURRENDER

 

11.1        CONDITION
AND RESTORATION.  At or before the
Expiration Date or the date of any earlier termination of this Lease, or as
promptly as practicable after such an earlier termination date, Tenant, at its
expense, shall do all of the following:

 

(a)               surrender
possession of the Premises in the condition required under § 12.1 below,
ordinary wear and tear  and damage from
casualty or condemnation excepted;

 

(b)               surrender
all keys, any key cards, and any parking stickers or cards to Landlord and give
Landlord in writing the combinations of any locks or vaults then remaining in
the Premises;

 

(c)               remove
from the Premises all of Tenant’s Property, except such items thereof as Tenant
shall have expressly agreed in writing with Landlord were to remain and to
become the property of Landlord; and

 

(d)               fully
repair any damage to the Premises or the Property resulting from such removal.

 

Tenant’s obligations herein shall survive the
expiration or earlier termination of the Lease, unless expressly provided to
the contrary herein.  All Improvements
and other items in or upon the Premises (except Tenant’s Property), whether
installed by Tenant or Landlord, shall be Landlord’s property and shall remain
upon the Premises, all without compensation, setoff, allowance, or credit to
Tenant;

 

 

37

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

provided, however, that if, when consent for the
installation of the Improvements is requested, Landlord so directs by notice,
Tenant shall promptly remove such of the Improvements in the Premises as are
designated in such notice and shall restore the Premises to their condition
prior to the installation of such Improvements. 
Notwithstanding the foregoing, Landlord shall not require removal of
customary office improvements and server rooms installed pursuant to the Work Letter
Agreement, if any (except as expressly provided to the contrary therein), or
installed by Tenant with Landlord’s written approval (except as expressly
required by Landlord in connection with granting such approval).

 

11.2        TENANT’S
FAILURE TO REMOVE OR RESTORE.  If
Tenant shall fail to perform any repairs or restoration or fail to remove any
items from the Premises as required under this Article 11, Landlord may do
so, and Tenant shall pay Landlord the cost thereof upon demand.  All property removed from the Premises by
Landlord pursuant to any provisions of this Lease or any Law may be handled or
stored by Landlord at Tenant’s expense, and Landlord shall in no event be
responsible for the value, preservation, or safekeeping thereof.  All property not removed from the Premises or
retaken from storage by Tenant within thirty (30) days after expiration or
earlier termination of this Lease or Tenant’s right to possession shall at
Landlord’s option be conclusively deemed to have been conveyed by Tenant to
Landlord as if by bill of sale without payment by Landlord.  Unless prohibited by applicable Laws,
Landlord shall have a lien against such property for the costs incurred in
removing and storing the same.

 

12     REPAIRS AND MAINTENANCE

 

12.1        TENANT’S
CARE OF PREMISES.  Except for
customary cleaning and trash removal provided by Landlord under § 8.1
above and damage covered under Article 15, Tenant shall keep the interior
of the Premises in good and sanitary condition, working order, and repair,
including carpet, wall-covering, doors pertinent to and within the Premises,
plumbing, all telecommunications cables and wiring within Tenant’s Premises (“IW”)
from the interface of such IW with the INC, and other fixtures, equipment,
alterations, and improvements, whether installed by Landlord or Tenant.  In addition, Tenant, at its expense, shall
promptly make all repairs, ordinary or extraordinary, interior or exterior,
structural or otherwise, in and about the Premises and the Property, as shall
be required by reason of (a) the performance or existence of Tenant’s Work
or Tenant’s Changes; (b) the installation, use, or operation of Tenant’s
Property in the Premises; (c) the moving of Tenant’s Property in or out of
the Building; or (d) the misuse or neglect of Tenant or any of its
employees, agents, or contractors. 
Tenant, at its expense, shall replace all scratched, damaged, or broken
doors or other glass in or about the Premises and shall be responsible for all
repairs, maintenance, and replacement of wall and floor coverings in the
Premises and for the repair and maintenance of all non-Building-standard
lighting fixtures therein.  All repairs
except for emergency repairs made by Tenant as provided herein shall be
performed by Contractors.  If Tenant does
not promptly make such arrangements, Landlord may, but need not, make such
repairs, maintenance, and replacements, and the costs paid or incurred by
Landlord therefor shall be reimbursed by Tenant promptly after request by
Landlord.  Notwithstanding anything to
the contrary herein,  Tenant shall be
responsible for cleaning the bottom surface of the interior roof skylight in
the Premises and the top surface of the associated lantern at least once every
two (2) calendars year during the Term.

 

12.2        LANDLORD’S
CARE OF COMPLEX.  Landlord, at its
expense, shall keep and maintain the common areas of the Complex and the
Systems and Equipment serving the Premises in good working order, condition,
and repair and shall make all repairs, structural and otherwise, interior and
exterior, as and when needed in or about the Complex and the Premises, except
for those repairs for which Tenant is responsible pursuant to § 12.1 above
or any other provisions of this Lease. 
Landlord shall maintain and repair all INC in the Building, and Tenant
shall have no right to make repairs to INC. 
The cost of Landlord’s maintenance and repairs pursuant to this Article 12
shall be reimbursed to Landlord to the

 

 

38

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

extent provided in Article 4 above.  Landlord, at its sole cost and expense, which
expense shall not be passed through to Tenant as an Operating Expense, shall
repair all exterior walls of the Building to prevent wind and water
infiltration no later than three (3) months after the Commencement
Date.  Landlord shall provide notice to
Tenant when any work is being done to the electrical system of the Building
that might affect the Premises.

 

12.3        WAIVER
BY TENANT.  Tenant waives the
benefits of any statute now or hereafter in effect which would otherwise afford
Tenant the right to make repairs at Landlord’s expense or to terminate this
Lease because of Landlord’s failure to keep the Premises in good order,
condition, and repair.

 

13     RULES AND REGULATIONS

 

13.1        OBSERVANCE
AND MODIFICATION.  Tenant and its
employees and agents shall faithfully observe and comply with the Rules and
Regulations attached hereto as Exhibit C
(the “Rules”) and such reasonable changes therein (whether by modification,
elimination, or addition) as Landlord at any time or times hereafter may make
and communicate in writing to Tenant, so long as such changes do not
unreasonably affect the conduct of Tenant’s business in the Premises, except as
required by any applicable Law and are consistently applied to all occupants;
provided, however, that in case of any conflict or inconsistency between the
provisions of this Lease and any of the Rules as originally promulgated or
as changed, the provisions of this Lease shall control.

 

13.2        APPLICATION
TO TENANT.  Nothing in this Lease
shall be construed to impose upon Landlord any obligation to Tenant to enforce
the Rules or the terms, covenants, or conditions in any other lease, as
against any other tenant, and Landlord shall not be liable to Tenant for
violation of the same by any other tenant or its employees, agents, or
visitors.

 

14     INSURANCE AND INDEMNIFICATION

 

14.1        TENANT’S
INSURANCE.  Tenant shall obtain and
maintain in effect at all times during Tenant’s possession of the Premises the
following insurance coverages and policies:

 

14.1.1                     Liability
Insurance.  Tenant shall maintain a policy
of commercial general liability insurance, which shall include coverages for (a) personal
injury; (b) broad-form contractual liability; (c) owner’s (i.e., Tenant’s) & contractor’s protective; (d) automobile
liability; and (e) broad-form property damage liability.  The minimum limits of liability shall be a
combined single limit with respect to each occurrence of not less than Two
Million Dollars ($2,000,000) and an aggregate limit of not less than Three
Million Dollars ($3,000,000).  The policy
shall contain a cross-liability endorsement and a severability of interest
clause.  Tenant shall increase the
insurance coverage as reasonably required by Landlord’s lender.

 

14.1.2                     Tenant’s
Business Personal Property Insurance. 
Tenant shall maintain on all of its business personal property,
including valuable business papers and accounts receivable; operating supplies;
inventory; and furniture, fixtures, and equipment (whether owned, leased, or
rented) (collectively “Business Personal Property”) an “all risk” property
damage insurance policy including coverages for earthquake damage and sprinkler
leakage and containing an agreed amount endorsement (or, if applicable, a
business owner’s policy with a no-coinsurance provision) in an amount not less
than one hundred percent (100%) of the full replacement cost valuation of
such Business Personal Property.  The
proceeds from any such policy shall be used by Tenant for the replacement of
such Business Personal property.

 

 

39

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

14.1.3                              Workers’
Compensation Insurance.  Tenant shall
maintain workers’ compensation insurance as required by law and employer’s
liability insurance in an amount not less than Five Hundred Thousand Dollars
($500,000).

 

14.1.4                              Business
Interruption/Extra Expense Insurance. 
Tenant shall maintain business interruption or (if applicable)
contingent business interruption and extra expense insurance in such amounts as
will reimburse Tenant for direct or indirect loss of earnings and incurred
costs attributable to the perils commonly covered by Tenant’s property
insurance described in § 14.1.2 above but in no event less than the
average total of Tenant’s annual gross receipts from the Premises during the
three-year period immediately preceding such interruption or loss.

 

14.2        TENANT’S INSURANCE
CRITERIA.  All insurance required to
be maintained by Tenant under this Lease shall conform to the following
criteria:

 

(i)                                    Tenant’s
insurance shall be issued by insurance companies authorized to do business in
the State of California with a financial rating of at least A:XIII for any
property insurance and at least A-:IX for any liability insurance, as rated in
the most recent edition of Best’s Insurance Reports;

 

(ii)                                Tenant’s
insurance shall be issued as primary and noncontributory;

 

(iii)                            Tenant’s
liability and property insurance policies shall name Tenant as the insured and
Landlord, Landlord’s agents, and any Lessors and Holders (as such terms are
defined in § 18.1 below) whose names shall have been furnished to Tenant
as additional insureds;

 

(iv)                               Tenant’s
insurance shall contain an endorsement requiring at least thirty (30) days’
written notice from the insurance company to each insured and additional
insured before cancellation or any material change in the coverage, scope, or amount
of any policy; and

 

(v)                                   with
respect to damage to or loss of Tenant’s Business Personal Property, a waiver
of subrogation must be obtained, as required under § 14.4 below.

 

14.2.1                              Blanket
Coverage.  All of the insurance
requirements set forth herein on the part of Tenant to be observed shall be
deemed satisfied if the Premises are covered by a blanket insurance policy
complying with the limits, requirements, and criteria contained in this Article 14
insuring all or most of Tenant’s facilities in California.

 

14.2.2                              Evidence
of Coverage.  A duplicate original
policy or a certificate of insurance shall be deposited with Landlord at the
commencement of the Term or, if earlier, upon Tenant’s taking possession of the
Premises; and on renewal of the policy a certificate of insurance listing the
insurance coverages required hereunder and naming the appropriate additional
insureds shall be deposited with Landlord not less than seven (7) days
before expiration of the policy.

 

14.3        LANDLORD’S
INSURANCE.  Landlord shall maintain “all
risk” property damage insurance containing an agreed amount endorsement
covering not less than one hundred percent (100%) of the full insurable
replacement cost valuation of (y) the Building and the tenant
improvements, betterments, and the alterations thereto; and (z) Landlord’s
personal property, business papers, furniture, fixtures, and equipment
(collectively “Landlord’s Property”), exclusive of the costs of excavation,
foundations and footings, and risks required to be covered by Tenant’s
insurance, and subject to commercially reasonable deductibles.  Landlord shall also obtain and keep in full
force the following policies of insurance: (a) commercial general
liability insurance with limits at lease equal to those applicable to Tenant
under

 

 

40

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

§ 14.1.1 above; (b) loss of rent insurance
(also known as rent continuation insurance); (c) workers’ compensation
insurance, if required by applicable Law; and (d) such other insurance as
Landlord deems appropriate or as may be required by any Holder or Lessor.  Landlord agrees to cause Tenant to be named
as an additional insured under its commercial general liability insurance
policy, provided that Tenant’s additional insured status shall be limited to
apply only to occurrences of bodily injury and property damage caused solely by
Landlord in areas of the Complex under Landlord’s exclusive control (including
the common areas).

 

14.4        RELEASES
AND WAIVERS OF SUBROGATION.  The
purpose of this provision is to allow Landlord and Tenant to allocate and
assume certain risks to coincide with insurance coverages required to be
maintained pursuant to the terms to this Lease. 
Landlord and Tenant recognize the benefit that each will receive from
the waivers of subrogation each is required to obtain pursuant to this
§ 14.4 and that there are significant advantages to each in connection
with minimizing duplication of insurance coverages.  Accordingly, Landlord and Tenant agree to
accept and place the limitations which follow on each other’s respective
liabilities and responsibility for damages in order to coincide with required
insurance coverages.

 

14.4.1                              Tenant’s
Property Agreement.  In light of
Tenant’s agreement to insure Tenant’s Business Personal Property in accordance
with § 14.1.2 above, Tenant agrees that Landlord will have no liability to
Tenant in the event Landlord damages or destroys, negligently or otherwise, all
or any part of Tenant’s Business Personal Property.  Tenant will cause to be placed in its insurance
policies covering Tenant’s Business Personal Property a waiver of subrogation
so that its insurance company will not become subrogated to Tenant’s rights and
will not be able to proceed against Landlord in connection with any such damage
or destruction.

 

14.4.2                              Landlord’s
Property Agreement.  In light of
Landlord’s agreement to insure Landlord’s Property in accordance with
§ 14.3 above, Landlord agrees that Tenant will have no liability to
Landlord in the event that Tenant damages or destroys, negligently or
otherwise, all or any part of Landlord’s Property.  Landlord will cause to be placed in its
insurance policies covering Landlord’s Property a waiver of subrogation so that
its insurance company will not become subrogated to Landlord’s rights and will
not be able to proceed against Tenant in connection with any such damage or
destruction.

 

14.4.3                              Tenant’s
Release.  Landlord shall not be
responsible or liable to Tenant for any damages or destruction to Tenant’s
Business Personal Property caused by Landlord’s employees, agents, visitors,
invitees, guests, or independent contractors (collectively “Landlord’s
Associates”), and Tenant hereby releases Landlord from any claims, liabilities,
demands, losses, damages, consequential damages, and the like, including
reasonable attorneys’ fees and court costs (collectively “Claims”) resulting
from damage or destruction to Tenant’s Business Personal Property caused
directly or indirectly by Landlord and/or Landlord’s Associates; provided,
however, that nothing herein shall be deemed to release Landlord’s independent
contractors from any such Claims Tenant may have against Landlord’s independent
contractors.

 

14.4.4                              Landlord’s
Release.  Tenant shall not be
responsible or liable to Landlord for any damages or destruction to Landlord’s
Property caused by Tenant’s employees, agents, visitors, invitees, guests, or
independent contractors (collectively “Tenant’s Associates”), and Landlord
hereby releases Tenant from any Claims resulting from damage or destruction to
Landlord’s Property caused directly or indirectly by Tenant and/or Tenant’s
Associates; provided, however, that nothing herein shall be deemed to release
Tenant’s independent contractors from any such Claims Landlord may have against
Tenant’s independent contractors.

 

 

41

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

14.4.5                              Damage
to Business and Loss of Rents.  In
light of Landlord’s agreement to carry continuation of rent insurance pursuant
to § 14.3 above and Tenant’s agreement to carry business interruption
insurance (extra expense insurance) in accordance with § 14.1.4 above, in
the event that Landlord’s Property is damaged or destroyed because of any act
or conduct, negligent or otherwise, by Tenant and/or by Tenant’s Associates,
Landlord shall have no rights against Tenant by virtue of such damage or
destruction, and Landlord hereby releases Tenant from all Claims, including
claims for loss of rent or profits, by Landlord directly or indirectly
resulting from the damage or destruction of Landlord’s Property by conduct by
Tenant and/or by Tenant’s Associates. 
Likewise, in the event that Tenant’s Business Personal Property is
damaged or destroyed because of any act or conduct, negligent or otherwise, by
Landlord and/or by Landlord’s Associates, Tenant shall have no rights against
Landlord by virtue of such damage or destruction, and Tenant hereby releases
Landlord from all Claims by Tenant directly or indirectly resulting from the
damage or destruction to Tenant’s Business Personal Property by the conduct of
Landlord and/or Landlord’s Associates, including Claims for loss of business or
loss of profits.  Notwithstanding the
foregoing, nothing herein shall be deemed to release Tenant’s or Landlord’s
independent contractors from any liability to Tenant and/or Landlord.

 

14.4.6                              Injury
and Death to Individuals.  Landlord
and Tenant understand that waivers of subrogation do not apply to injury to and
death of individuals.  Landlord and
Tenant shall each carry insurance, as provided by this Article 14, in
connection with injury and death to individuals.  Landlord hereby agrees to indemnify and hold
Tenant harmless from any Claims which Tenant may otherwise have with respect to
injury or death to individuals occurring within the Property but outside the
Premises, except to the extent that such injury or death is caused by Tenant
and/or Tenant’s Associates, through negligence or otherwise, and is not covered
by the insurance Landlord is required to carry under this Lease.  Likewise, Tenant agrees to indemnify, defend,
protect, and hold Landlord harmless from any Claims for injury or death to
persons occurring within the Premises or caused, directly or indirectly, by
Tenant or Tenant’s Associates outside the Premises, except to the extent such
injuries or death are caused by Landlord and/or Landlord’s Associates, through
negligence or otherwise, and are not covered by the insurance Tenant is
required to carry under this Lease.

 

14.4.7                              Abatement
of Rent.  Except as may be expressly
provided elsewhere in this Lease, Tenant shall not be entitled to Rent
abatement and shall not otherwise have, and hereby releases Landlord from, any
Claims resulting from Tenant’s inability to utilize all or any part of the
Premises, except to the extent that Tenant is unable to use all or any part of
the Premises and does not use all or any part of the Premises as a result of
Landlord’s intentional decision to refuse to provide access to the Building
and/or the Premises and/or to provide services and/or utilities to Tenant as
required to be provided by Landlord to Tenant pursuant to this Lease, where
such refusal is not caused by a Force Majeure occurrence.

 

14.4.8                              Availability
of Waiver of Subrogation.  If an
insurance policy cannot be obtained with a waiver of subrogation or is
obtainable only by the payment of an additional premium charge above that
charged by insurance companies issuing policies without waiver of subrogation,
the party undertaking to obtain the insurance shall notify the other party of
this fact.  The other party shall have a
period of ten (10) days after receiving the notice either to place
the insurance with a company that is reasonably satisfactory to the other party
and that will carry the insurance with a waiver of subrogation at no additional
cost or to agree to pay the additional premium if such a policy is obtainable
at additional cost.  If the insurance
cannot be obtained or the party in whose favor a waiver of subrogation is
desired refuses to pay the additional premium charged, the other party is
relieved of the obligation to obtain a waiver of subrogation with respect to
the particular insurance involved.

 

 

42

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

14.5        OTHER
CASES OF DAMAGE OR INJURY.  In all
cases not covered by the foregoing provisions of this Article 14, Tenant
hereby assumes all risk of damage to property or injury to persons in, upon, or
about the Premises from any cause other than the negligence or intentional
misconduct of Landlord and its agent or employees.  Without limiting the generality of the
foregoing, Landlord shall not be liable for injury or damage which may be
sustained by the person, goods, wares, merchandise, or property of Tenant or
Tenant’s Associates or any other person in or about the Premises 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 Systems and Equipment, pipes, sprinklers,
wires, INC, appliances, plumbing, heating, air-conditioning, or lighting fixtures
of the same, whether the damage or injury results from conditions arising upon
the Premises or upon other portions of the Property, the Complex, or from other
sources.  Landlord shall not be liable
for any damages arising from any act or omission of any other tenant or
occupant of the Property or Complex.  In
all cases not covered by the foregoing provisions of this Article 14,
Tenant shall indemnify, defend, protect, and hold Landlord harmless against (a) any
and all Claims arising from any death or injury to any person or damage to any
property whatsoever occurring in, on, or about the Premises or any part
thereof, and (b) any and all Claims occurring in, on or about any of the
Common Areas, the Property, or the Complex, when such death, injury or damage
is caused in whole or in part by the act, negligence, fault, or omission of any
duty with respect to the same by Tenant or Tenant’s Associates.  In all cases not covered by the foregoing
provisions of this Article 14, Tenant shall further indemnify, defend,
protect, 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 act or negligence of
Tenant or Tenant’s Associates, and from and against all reasonable costs,
attorneys’ fees, expenses, and liabilities incurred in connection with any such
Claim or any action or proceeding brought thereon.  In case any action or proceeding be brought
against Landlord by reason of any such Claim, Tenant, upon notice from
Landlord, shall defend the same at Tenant’s expense by counsel reasonably
satisfactory to Landlord; provided, however, that Tenant shall not be liable in
any case for damage to property or death or injury to person(s) occasioned
by the negligence or intentional misconduct of Landlord or Landlord’s
Associates, unless covered by insurance Tenant is required to provide.

 

15     DAMAGE OR DESTRUCTION

 

15.1        LOSSES.
 If at any time prior to the
expiration or termination of this Lease the Premises or the Property is wholly
or partially damaged or destroyed by any casualty which renders the Premises
totally or partially inaccessible or unusable by Tenant in the ordinary conduct
of Tenant’s business, the parties agree that the following provisions shall
modify their obligations under this Lease after such damage or destruction.

 

15.1.1                              Repairs
Which Can Be Completed Within Six (6) Months.  Within thirty (30) days after Tenant’s
written notice to Landlord of such damage or destruction, Landlord shall
provide Tenant with notice of its determination of whether the damage or
destruction can be repaired within six (6) months after the
commencement of the work of repairing such damage or destruction without the
payment of overtime or other premiums. 
If all repairs to Premises or Property can, in Landlord’s reasonable
judgement, be completed within six (6) months following the date of
the commencement of the work of repairing such damage or destruction without
the payment of overtime or other premiums, Landlord shall, at Landlord’s
expense, expeditiously repair the same; and this Lease shall remain in full
force and effect, except that a proportionate reduction of the Base Rent shall
be allowed Tenant to the extent that the Premises shall be rendered
inaccessible or unusable by Tenant and are not used by Tenant during the period
of time that such portion is unusable or inaccessible and not used by Tenant.

 

 

43

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

15.1.2                              Repairs
Which Cannot Be Completed Within Six (6) Months.  If all such repairs to the Property and
Premises cannot, in Landlord’s reasonable judgement, be completed within
six (6) months following the commencement of the work of repairing
such damage or destruction without the payment of overtime or other premiums,
Landlord shall notify Tenant of such determination; and in such an event,
either Landlord or Tenant may, at its option, upon written notice to the other
party given within sixty (60) days after the occurrence of such damage or
destruction, elect to terminate this Lease as of the date of the occurrence of
such damage or destruction.  In the event
that neither Landlord nor Tenant elects to terminate the Lease in accordance
with the foregoing provisions, then Landlord shall, at Landlord’s expense,
repair such damage or destruction; and in such event, this Lease shall continue
in full force and effect, except that the Base Rent shall be proportionately
reduced as provided in § 15.1.1 above; provided, however, that if any such
repair is not commenced by Landlord within ninety (90) days after the
occurrence of such damage or destruction or is not substantially completed by
Landlord within nine (9) months after the occurrence of such damage
or destruction, then in either such event Tenant may, at its option, upon
written notice to Landlord, elect to terminate this Lease as of the date of
Landlord’s receipt of such notice. 
Notwithstanding the foregoing, Tenant shall have no right to terminate
this Lease in the situation just described if all of the following conditions
are met: (x) Landlord shall have informed Tenant in its notice of
determination that the repair of such damage or destruction could not be
substantially completed by Landlord within nine (9) months after the
occurrence of such damage or destruction; (y) Tenant shall not have
elected to terminate the Lease by written notice delivered to Landlord within
sixty (60) days after the occurrence of such damage or destruction; and (z) Landlord
shall have commenced the work of repairing such damage or destruction and
diligently prosecuted the same thereafter.

 

15.2        DESTRUCTION
DURING FINAL YEAR.  Notwithstanding
anything to the contrary contained in § 15.1, if the Premises or the
Building are wholly or materially damaged or destroyed within the final
twelve (12) months of the Term of this Lease or, if an applicable renewal
option has been exercised, during the last year of any renewal term, in such a
way that Tenant shall be prevented from using the Premises for at least thirty (30)
consecutive days as a result of such damage or destruction, then either
Landlord or Tenant may, at the option of either, by written notice to the other
party delivered within sixty (60) days after the occurrence of such damage
or destruction, elect to terminate the Lease as of the date of such notice.

 

15.3        DESTRUCTION
OF TENANT’S PROPERTY.  Under no
circumstances shall Landlord be required to repair any injury or damage to, or
make any repairs to or replacements of, Tenant’s Property.  However, as part of Operating Expenses,
Landlord shall cause to be insured the Improvements in the Premises which do
not consist of Tenant’s Property and shall cause such Improvements to be
repaired and restored at Landlord’s sole expense, except that Tenant shall pay
any applicable deductible.  Landlord
shall have no responsibility for any contents placed or kept in or on the
Premises or the Property by Tenant or Tenant’s employees or invitees or any
other person claiming through Tenant.

 

15.4        EXCLUSIVE
REMEDY.  Landlord and Tenant agree
that their respective rights and obligations in the event of any damage or
destruction of the Premises, Property, or Complex shall be governed exclusively
by this Lease.  Tenant, as a material
inducement to Landlord entering into this Lease, irrevocably waives and
releases Tenant’s rights under California Civil Code §§ 1932(2), 1933(4),
and 1942, as the same may be modified or replaced hereafter.  No damages, compensation, setoff, allowance,
or claim shall be payable by Landlord for any inconvenience, interruption, or
cessation of Tenant’s business or any annoyance arising from any damage to or
destruction of all or any portion of the Premises, Property, or Complex.

 

 

44

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

16     EMINENT DOMAIN

 

16.1        CONDEMNATION.
 If the whole or any material part of
the Premises or Property shall be taken by power of eminent domain or condemned
by any competent authority for any public or quasi-public use or purpose; or if
any adjacent property or street shall be so taken, condemned, reconfigured, or
vacated by such authority in such manner as to require the use, reconstruction,
or remodeling of any part of the Premises or Property; or if Landlord shall
grant a deed or other instrument in lieu of such taking by eminent domain or
condemnation (collectively “Takings”), either party shall have the option to
terminate this Lease upon ninety (90) days’ notice, provided such notice
is given no later than one hundred and eighty (180) days after the date of
such Taking.  Tenant shall have
reciprocal termination rights, on the same terms and conditions and to be
exercised in the same manner as the foregoing sentence provides, if the whole
or any material part of the Premises is permanently taken, or if access to the
Premises is permanently materially impaired.

 

16.2        RENTAL
APPORTIONMENT.  All Rent shall be
apportioned as of the date of such termination or the date of such Taking,
whichever shall first occur.  If any part
of the Premises shall be taken, and this Lease shall not be so terminated, the
Rent shall be proportionately abated.

 

16.3        AWARDS
AND DAMAGES.  Landlord shall be
entitled to receive the entire award or payment in connection with any Taking,
except that Tenant shall have the right to file any separate claim available to
Tenant for any taking of Tenant’s personal property and fixtures belonging to
Tenant and removable by Tenant upon expiration of the Term, and for moving
expenses, so long as such claim does not diminish the award available to
Landlord and such claim is payable separately to Tenant.

 

16.4        TEMPORARY
CONDEMNATION.  If part or all of the
Premises are condemned for a limited period of time (“Temporary Condemnation”),
this Lease shall remain in effect.  The
Rent and Tenant’s obligations for the part of the Premises taken shall abate
during the Temporary Condemnation in proportion to the part of the Premises
that Tenant is unable to use in its business operations as a result of the
Temporary Condemnation.  Landlord shall
receive the entire award for any Temporary Condemnation.

 

17     ASSIGNMENT AND SUBLETTING

 

17.1        CONSENT
REQUIRED FOR TRANSFER.  Except as
otherwise provided herein, Tenant agrees that it shall not assign, sublet,
mortgage, hypothecate, or encumber this Lease, nor permit or allow the Premises
or any part thereof to be used or occupied by others, without the prior written
consent of Landlord in each instance, which consent shall not be unreasonably
withheld, conditioned, or delayed in accordance with the criteria herein
established.  The actions described in
the foregoing sentence are referred to collectively herein as “Transfers” and
individually as a “Transfer.”  If the
Premises or any part thereof be sublet or occupied by anybody other than
Tenant, Landlord may, after default by Tenant, collect rent from the subtenant
or occupant and apply the net amount collected to the Rent herein reserved; but
no Transfer, occupancy, or collection shall be deemed a waiver of the
provisions hereof, the acceptance of the subtenant or occupant as tenant, or a
release of Tenant from the further performance hereunder by Tenant.  The consent by Landlord to a Transfer shall
not relieve Tenant from obtaining the Landlord’s express written consent to any
further Transfer.  In no event shall any
permitted sublessee assign or encumber its sublease or further sublet all or
any portion of its sublet space, or otherwise suffer or permit the sublet space
or any part thereof to be used or occupied by others, without Landlord’s prior
written consent in each instance.

 

 

45

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

17.1.1                              Corporate
Transferor.  If Tenant is a
corporation, the provisions of § 17.1 shall apply to a transfer (by one or
more transfers) of a majority of the stock of Tenant as if such transfer of a
majority of the stock of Tenant were an assignment of this Lease.

 

17.2        NOTICE
OF INTENT TO TRANSFER.  If Tenant
shall at any time or times during the Term of this Lease desire to assign this
Lease or sublet all or part of the Premises, Tenant shall give notice thereof
(the “Transfer Notice”) to Landlord, which notice shall set forth all of the
following:

 

(a)                                  the
proposed terms of the assignment or subletting, including (i) the
effective or commencement date thereof, which shall be not less than
thirty (30) nor more than one hundred eighty (180) days after the
giving of such notice; (ii) in the case of a proposed assignment, the
consideration therefor; and (iii) in the case of a proposed subletting,
the rental rate to be paid by the proposed subtenant (including any escalation
or Additional Rent payable), the term of the proposed sublease (including any
renewal options), any work to be performed or paid for by Tenant, the amount of
any security deposit, the cost and extent of any so-called “take-over”
obligations to be assumed by Tenant on behalf of such subtenant, the amount of
any rent concessions to be granted by Tenant, and any other additional monetary
or so-called “business” terms or conditions;

 

(b)                                 a
statement setting forth in reasonable detail the identity of the proposed
assignee or subtenant, the nature of its business, and its proposed use of the
Premises; and

 

(c)                                  current
financial information with respect to the proposed assignee or subtenant,
including its most recent financial report, and any other information which may
reasonably be required by Landlord.

 

17.3        CONDITIONS
OF CONSENT.  Providing that Tenant is
not in default of any of Tenant’s material obligations under this Lease after
notice and the expiration of any applicable grace period, Landlord’s consent
(which must be in writing and in form reasonably satisfactory to Landlord) to
the proposed assignment or sublease shall not be unreasonably withheld or
delayed, provided the following conditions are met:

 

(a)                                  Tenant
shall have complied with the provisions of § 17.2 above;

 

(b)                                 In
Landlord’s reasonable judgement the proposed assignee or subtenant is engaged
in a business which would use the Premises, or the relevant part thereof, in a
manner which is in keeping with the then-current standards of the Building, is
limited to the use expressly permitted under this Lease, and will not violate
any negative covenant or other restriction or agreement as to use contained in
any other lease of space in the Complex;

 

(c)                                  The
proposed assignee or subtenant has not been convicted of fraud or illegality
and has reasonably sufficient financial worth considering the responsibility
involved (and in no event of less financial standing than Tenant, if the
proposed Transfer is for the entirety of the Premises), is not subject to any
toxic or hazardous materials cleanup order with respect to any other property,
and Landlord has been furnished with reasonable proof thereof;

 

(d)                                 Neither
the proposed assignee or sublessee nor any person which, directly or
indirectly, controls, is controlled by, or is under common control with, the
proposed

 

 

46

 

[*] =
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

assignee or sublessee or any person who controls the
proposed assignee or sublessee, is then an occupant of any part of the Complex,
provided Landlord then has suitable space in the Complex available for
leasing.  For purposes of this Lease control shall be deemed to mean ownership of more than fifty
percent (50%) of all the voting stock of a corporation or more than fifty
percent (50%) of all the legal and equitable interest in any other
business entity;

 

(e)                                  The
proposed assignee or sublessee is not a person or entity with whom Landlord is
then negotiating to lease space in the Building;

 

(f)                                    The
form of the proposed lease shall be in form reasonably satisfactory to Landlord
and shall comply with the applicable provisions of this Article 17;

 

(g)                                 There
shall not be more than three (3) subtenants (not including the Permitted
Occupant (as defined in § 17.13 below) of the Premises);

 

(h)                                 Tenant
shall reimburse Landlord on demand for any reasonable costs that may be
incurred or paid by Landlord to third persons in connection with said
assignment or sublease, including costs of making investigations as to the
acceptability of the proposed assignee or subtenant and legal costs incurred in
connection with the granting of any requested consent; and

 

(i)                                     Tenant
shall not have advertised or publicized in any way the availability of the
Premises without prior notice to and approval by Landlord, nor shall any
advertisement state the name (as distinguished from the address) of the Complex
or the rental rate;

 

(j)                                     The
sublease shall not allow the use of the Premises or any part thereof for (i) the
sale of food for on or off-premises consumption or (ii) use by a foreign
or domestic governmental agency.

 

17.4        CONTINUATION
OF LEASE TERMS.  Each subletting
pursuant to this Article 17 shall be subject to all of the covenants,
agreements, terms, provisions, and conditions contained in this Lease.  Notwithstanding any such subletting to any
other subtenant and/or acceptance of Rent by Landlord from any subtenant,
Tenant shall remain liable for the payment of the Base Rent and Additional Rent
due and to become due hereunder and for the performance of all the covenants,
agreements, terms, provisions, and conditions contained in this Lease on the
part of Tenant to be performed and all acts and omissions of any licensee or
subtenant or anyone claiming under or through any subtenant which shall be in
violation of any of the obligations of this Lease; and any such violation shall
be deemed to be a violation by Tenant. 
Tenant further agrees that notwithstanding any such subletting, no other
and further subletting of the Premises by Tenant or any person or entity
claiming through or under Tenant shall or will be made except upon compliance
with and subject to the provisions of this Article 17.

 

17.5        LAPSE
OF CONSENT.  In the event that
Landlord consents to a proposed Transfer described in the Transfer Notice and
Tenant fails to execute and deliver the assignment or sublease described in the
Transfer Notice to which Landlord consented within one hundred
twenty (120) days after the giving of such consent, then Tenant shall
again comply with all of the provisions and conditions of § 17.2 above
before assigning this Lease or subletting all or part of the Premises.

 

17.6        TRANSFER
DOCUMENTATION.  With respect to each
and every Transfer authorized by Landlord under the provisions of this Lease,
it is further agreed as follows:

 

 

47

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(a)                                  no
subletting shall be for a term ending later than one day prior to the
Expiration Date of this Lease;

 

(b)                                 no
sublease shall be valid, and no subtenant shall take possession of the Premises
or any part thereof, until an executed counterpart of such sublease has been
delivered to Landlord;

 

(c)                                  each
sublease shall provide that it is subject and subordinate to this Lease and to
the matters to which this Lease is or shall be subordinate, and that in the
event of termination (whether by voluntary surrender or otherwise), re-entry,
or dispossession by Landlord under this Lease, Landlord may, at its option,
take over all of the right, title, and interest of Tenant, as sublessor, under
such sublease, and such subtenant shall, at Landlord’s option, attorn to Landlord
pursuant to the then-executory provisions of such sublease, except that
Landlord shall not be (i) liable for any previous act or omission of
Tenant under such sublease; (ii) subject to any offset, credit, or
allowance not expressly provided in such sublease which theretofore accrued to
such subtenant against Tenant or (iii) bound by any previous modification
of such sublease or by any previous prepayment of more than one month’s
rentals; and

 

(d)                                 each
assignment or sublease document must provide that the assignee or subtenant
expressly assumes all obligations of the Tenant under the Lease as joint and
several obligations without any release of Tenant.

 

17.7        TRANSFER
PREMIUM.  If Landlord shall give its
consent to any assignment of this Lease or to any sublease, Tenant shall in
consideration therefor pay to Landlord, as Additional Rent, the following
amounts (collectively the “Transfer Premium”):

 

(a)                                  in
the case of an assignment, an amount equal to fifty percent (50%) of all sums
and other considerations paid to Tenant by the assignee for or by reason of
such assignment, including sums paid for the sale of Tenant’s Property, but
excluding the following: (i) in the case of a sale of Tenant’s Property,
the then-current net unamortized or undepreciated cost thereof determined on
the basis of Tenant’s federal income tax returns; (ii) then-customary
brokerage commissions being paid by Landlord for leasing of space in the
Building or, if less, the brokerage commission paid by Tenant in connection
with the assignment; (iii) reasonable legal fees and disbursements; and (iv) reasonable
amounts paid by Tenant for tenant improvements constructed for the assignee;
and

 

(b)                                 in
the case of a sublease, fifty percent (50%) of any rents, additional charge, or
other consideration payable under the sublease to Tenant by the subtenant which
is in excess of the Base Rent and Additional Rent accruing during the term of
the sublease in respect of the subleased space (at the rate per square foot
payable by Tenant hereunder) pursuant to the terms hereof, including sums paid
for the sale or rental of Tenant’s Property, but excluding the following: (i) in
the case of the sale or lease of Tenant’s Property, the then-current net
unamortized or undepreciated cost thereof determined on the basis of Tenant’s
federal income tax returns; (ii) then-customary brokerage commissions
being paid by Landlord for leasing of space in the Building or, if less, the
brokerage commission paid by Tenant in connection with the sublease; (iii) reasonable
legal fees and disbursements; and

 

 

48

 

[*] =
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

(iv) reasonable amounts paid by Tenant for tenant
improvements constructed for the subtenant.

 

The sums payable as the Transfer Premium under this
§ 17.7 shall be paid to Landlord as and when payable by the subtenant or
assignee to Tenant.

 

17.8        ASSUMPTION
BY TRANSFEREE   Any Transfer, whether
made with Landlord’s consent pursuant to § 17.1 or without Landlord’s
consent pursuant to § 17.1.1, shall be made only if, and shall not be effective
until, the assignee or subtenant shall execute, acknowledge, and deliver to
Landlord an agreement in form and substance satisfactory to Landlord under
which the assignee or transferee shall assume the obligations of this Lease on
the part of Tenant to be performed or observed, from and after the date of
Transfer, and whereby the assignee or transferee shall agree that the
provisions in § 17.1 shall, notwithstanding such Transfer, continue to be
binding upon it in respect of all future Transfers.  The original named Tenant covenants that,
notwithstanding any Transfer, whether or not in violation of the provisions of
this Lease, and notwithstanding the acceptance of Base Rent and/or Additional
Rent by Landlord from an assignee, transferee, or any other party, the original
named Tenant shall remain fully liable for the payment of the Base Rent and
Additional Rent and for the other obligations of this Lease on the part of
Tenant to be performed or observed.

 

17.9        WAIVER
OR DISCHARGE.  The parties agree that
it shall be reasonable for Landlord to refuse its consent to any proposed
Transfer in connection with which Tenant also seeks a release.

 

17.10                           LISTING
OF NAME.  The listing of any name
other than that of Tenant, whether on the doors of the Premises or the Building
directory, or otherwise, shall not operate to vest any right or interest in
this Lease or in the Premises, nor shall it be deemed to be the consent of
Landlord to any Transfer of this Lease or to any sublease of the Premises or to
the use or occupancy of the Premises by others.

 

17.11                           NET
PROFITS AGREEMENT.  Anything
contained in the foregoing provisions of this Article 17 to the contrary
notwithstanding, neither Tenant nor any other person or entity having an
interest in the possession, use, occupancy, or utilization of the Premises
shall enter into any lease, sublease, license, concession, or other agreement
for use, occupancy, or utilization of space in the Premises which provides for
rental or other payment for such use, occupancy, or utilization based, in whole
or in part, on the net income or profits derived by any person from the
premises leased, used, occupied, or utilized (other than an amount based on a
fixed percentage or percentages of receipts or sales); and any such purported
lease, sublease, license, concession, or other agreement shall be absolutely
void and ineffective as a conveyance of any right or interest in the
possession, use, occupancy, or utilization of any part of the Premises.

 

17.12                           AFFILIATES.
 Notwithstanding anything to the
contrary in this Article 17, Landlord’s consent shall not be required in
the event Tenant desires to assign this Lease or sublet the Premises or any
portion thereof to any corporation or entity which controls, is controlled by,
or is under common control with Tenant, provided and subject to the following
conditions:

 

(a)                                  Tenant
shall not be in default of any of the material terms, covenants, or conditions
on Tenant’s part to observe or perform hereunder beyond all applicable notice and cure periods;

 

(b)                                 such
sublet or assignment shall be subject to all of the terms, covenants, and
conditions of this Lease;

 

 

49

 

[*] =
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

(c)                                  Tenant
shall notify Landlord of such sublet or assignment in accordance with
§ 17.2 hereof and furnish Landlord with reasonably satisfactory evidence
that such sublessee or assignee controls, is controlled by, or is under common
control with Tenant; and

 

(d)                                 in
the event of such merger, consolidation, or transfer of substantially all of
Tenant’s assets, the successor to Tenant has a net worth, computed in
accordance with generally-accepted accounting principles, at least equal to the
greater of (i) the net worth of Tenant immediately prior to such merger,
consolidation, or transfer or (ii) the net worth of Tenant herein named on
the date of this Lease; and proof satisfactory to Landlord of such net worth
shall have been delivered to Landlord at least ten (10) days prior to
the effective date of any such transaction.

 

As used herein, the terms control
and common control shall be deemed to mean
that the ownership of fifty percent (50%) or more of all of the issued and
outstanding voting shares of such corporation, or fifty percent (50%) or more
of all the legal and equitable interest in any such business entities.

 

17.13                           PERMITTED
OCCUPANTS.  Landlord hereby agrees
that the provisions of this Article 17 shall not apply to the shared
occupancy of individual offices in the Premises with Tenant by individuals
renting not more than one (1) such office (the “Permitted Occupant”),
provided that the space occupied by the Permitted Occupant shall not be
separately demised or contain separate entrances, demarcations, or reception
areas and the occupancy by the Permitted Occupant shall be upon and subject to
all of the terms and conditions of this Lease.

 

18     SUBORDINATION AND ATTORNMENT

 

18.1        SUBORDINATION
OF LEASE.  This Lease and all rights
of Tenant hereunder are and shall be subject and subordinate in all respects to
(a) all ground leases, overriding leases, and underlying leases of the
Building, Property, and/or the Complex now or hereafter existing; (b) all
mortgages which may now or hereafter affect the Building, Property, or Complex
and any of such leases, whether or not such mortgages shall also cover other
lands and/or buildings; (c) each and every advance made or hereafter to be
made under such mortgages; and (d) to all renewals, modifications,
replacements, and extensions of such leases and such mortgages and spreaders
and consolidations of such mortgages.  This
§ 18.1 shall be self-operative, and no further instrument of subordination
shall be required.  In confirmation of
such subordination, Tenant shall promptly execute and deliver any instrument
that Landlord, the lessor of any such lease or the holder (“Holder”) of any
such mortgage or any of their respective successors in interest may reasonably
request to evidence such subordination, so long as such instrument provides
that Tenant’s use and occupancy of the Premises shall not be disturbed in the
absence of a material default.  The
leases to which this Lease is, at the time referred to, subject and subordinate
pursuant to this Article 18 are hereinafter sometimes referred to as “Superior
Leases”; the mortgages to which this Lease is, at the time referred to, subject
and subordinate are hereinafter sometimes referred to as “Superior Mortgages”;
and the lessor of a superior lease or its successor in interest at the time
referred to is sometimes hereinafter referred to as a “Lessor.”  Notwithstanding the foregoing, Tenant agrees,
upon written request from Landlord or any Holder or Lessor, to reorder the
relative priority of the Lease with respect to any particular Superior Mortgage
or Superior Lease so as to subordinate the lien of any such Superior Mortgage or
Superior Lease to the Lease.  Tenant
agrees to execute any instrument which Landlord or any Holder or Lessor may
present in order to effect such prioritization of the Lease, provided that such
instrument does not modify any material term of the Lease or increase Tenant’s
obligations thereunder.

 

 

50

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

18.1.1              Nondisturbance
Agreement.  Landlord agrees that it
will use reasonable efforts to obtain a nondisturbance agreement for the
benefit of Tenant from the Holder(s) of any Superior Lease(s) or
Superior Mortgage(s) now existing or hereafter created during the Term of
this Lease.  Such nondisturbance
agreement shall provide, in effect, that so long as there exists no Event of
Default, and provided Tenant attorns as herein specified, the following terms
shall govern such attornment, subject to the terms of § 18.3 below:

 

(a)          Tenant’s
rights as set forth in the Lease shall not be affected or terminated;

 

(b)          Tenant’s
possession of the Premises shall not be disturbed;

 

(c)          no
action or proceeding shall be commenced to remove or evict Tenant solely by
virtue of such Successor Landlord’s succession to the rights of Landlord under
the Lease;

 

(d)          this
Lease shall at all times continue in full force and effect notwithstanding the
foreclosure of the Superior Mortgage prior to the expiration or termination of
this Lease;

 

(e)          Tenant
shall pay Rent to said Holder or Lessor from the date of said attornment; and

 

(f)            such
Holder or Lessor shall not be responsible to Tenant under this Lease, except as
to obligations accruing subsequent to the date of such attornment.

 

The inability of Landlord
to obtain such a nondisturbance agreement as referred to in the preceding
sentence shall not be deemed a default on Landlord’s part of its obligations
under the Lease or affect the validity thereof or create any claim in favor of
Tenant against Landlord by reason thereof.

 

18.2                        NOTICE AND
CURE RIGHT.  In the event of any
action or omission of Landlord which would give Tenant the right, immediately
or after lapse of a period of time, to cancel or terminate this Lease, or to
claim a partial or total eviction, Tenant shall not exercise such right unless
and until (i) Tenant shall have given written notice of such act or
omission to the Holder of each Superior Mortgage and the Lessor of each
Superior Lease whose name and address shall previously have been furnished to
Tenant in writing; and (ii) unless such act or omission shall be one which
is not capable of being remedied by Landlord or such mortgage Holder or Lessor
within a reasonable period of time, a reasonable period for remedying such act
or omission shall have elapsed following the giving of such notice and
following the time when such Holder or Lessor shall have become entitled under
such Superior Mortgage or Superior Lease, as the case may be, to remedy the
same (which reasonable period shall in no event be less than the period to
which Landlord would be entitled under this Lease or otherwise, after similar
notice, to effect such remedy), provided such Holder or Lessor shall with due
diligence give Tenant written notice of intention to remedy such act or
omission and shall thereafter diligently and continuously prosecute such cure
to completion.

 

18.3                        ATTORNMENT.
 If the Lessor of a Superior Lease or
the Holder of a Superior Mortgage shall succeed to the rights of Landlord under
this Lease, whether through possession or foreclosure action or delivery of a
new lease or deed, then at the request of such party so succeeding to Landlord’s
rights or other person having or acquiring title by virtue of such foreclosure
or termination (herein sometimes referred to as “Successor Landlord”) and upon
such Successor Landlord’s written agreement to accept Tenant’s attornment,
Tenant shall attorn to and recognize such Successor Landlord as Tenant’s
landlord under this Lease and shall promptly execute and deliver any instrument
that such Successor Landlord may reasonably request to evidence such
attornment, so long as such instrument provides for nondisturbance

 

 

51

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

of Tenant’s use and occupancy of the Premises in the absence
of material default. Upon such attornment this Lease shall continue in full
force and effect as a direct lease between the Successor Landlord and Tenant
upon all of the terms, conditions, and covenants in this Lease, except as
follows:

 

(a)                  the Successor
Landlord shall not be liable for any previous act or omission of Landlord under
this Lease;

 

(b)                 the Successor
Landlord shall not be subject to any offset (unless expressly provided for in
this Lease) which shall have theretofore accrued to Tenant against Landlord;

 

(c)                  the
Successor Landlord shall not be bound by any previous modification of this
Lease, unless expressly provided for in this Lease, or by any previous
prepayment of more than one month’s Base Rent, unless such modification or
prepayment shall have been expressly approved in writing by the Lessor of the
Superior Lease or the Holder of the Superior Mortgage through or by reason of
which the Successor Landlord shall have succeeded to the rights of Landlord
under this Lease.

 

19     FINANCING REQUIREMENTS

 

19.1                        LENDER-REQUESTED
MODIFICATIONS.  If, in connection
with obtaining financing or refinancing for the Property or Complex a
prospective lender shall request reasonable modifications to this Lease as a
condition to such financing or refinancing, Tenant shall not withhold, delay,
or unreasonably condition its consent thereto, so long as such modifications do
not materially increase Tenant’s obligations under the Lease or materially
adversely affect any of Tenant’s rights. 
It is agreed that, among the modifications which shall be deemed
reasonable, are modifications to the subordination and attornment provisions of
this Lease, modifications to the notice provisions of this Lease, modifications
to the provisions of this Lease which permit the lender to cure any defaults by
Landlord, and modifications to the provisions which grant additional time to
cure as may be reasonably required by the lender.

 

20     DEFAULT

 

20.1                        TENANT’S
DEFAULT.  Tenant’s failure to perform
any of its obligations under this Lease when due and in the manner required
shall constitute a breach and default (“Event of Default”) of this Lease by
Tenant, subject to any cure period(s) permitted or available under
applicable laws or statutes.  In
addition, the following shall also be deemed Events of Default hereunder:

 

(a)                  Tenant’s
failure to pay any Rent or any other charges required to be paid by Tenant
under this Lease, where such failure continues for five (5) days after
notice from Landlord that such payment is overdue and payable, provided that
Landlord shall not be required to give any such notice more often than one (1) time
during each calendar year of the Term;

 

(b)                 Tenant’s
failure promptly and fully to perform any other covenant, condition, or
agreement contained in this Lease, where such failure continues for thirty (30)
days after written notice thereof from Landlord to Tenant;

 

(c)                  Tenant’s
failure to take possession of the Premises for a period of sixty (60) days
or longer after the Commencement Date;

 

(d)                 Tenant’s
abandonment of the Premises;

 

 

52

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(e)                  any material
misrepresentation or omission herein or in any financial statements or other
materials provided by Tenant or any Guarantor in connection with negotiating or
entering this Lease or in connection with any Transfer under Article 17;

 

(f)                    failure by
Tenant to cure within any applicable times permitted thereunder any default
under any other lease for space in the Complex or any other buildings owned or
managed by Landlord or its affiliates now or hereafter entered by Tenant; and
any Default hereunder not cured within the times permitted for cure herein
shall, at Landlord’s election, constitute a default under any other such lease
or leases;

 

(g)                 The levy of a
writ of attachment or execution on this Lease or on any of Tenant’s property;

 

(h)                 Tenant’s or
any Guarantor’s general assignment for the benefit of creditors or arrangement,
composition, extension, or adjustment with its creditors;

 

(i)                     Tenant’s
or any Guarantor’s filing of a voluntary petition for relief, or the filing of
a petition against Tenant or any Guarantor in a proceeding under the Federal
Bankruptcy laws or other insolvency laws which is not withdrawn or dismissed
within forty-five (45) days thereafter; or, under the provisions of any
law providing for reorganization or winding up of corporations, the assumption
by any court of competent jurisdiction of jurisdiction, custody, or control of
Tenant or any substantial part of its property, or of any Guarantor, where such
jurisdiction, custody, or control remains in force unrelinquished, unstayed, or
unterminated for a period of forty five (45) days;

 

(j)                     In any
proceeding or action in which Tenant is a party, the appointment of a trustee,
receiver, agent, or custodian to take charge of the Premises or Tenant’s
Property for the purpose of enforcing a lien against the Premises or Tenant’s
Property; or

 

(k)                  If Tenant or
any Guarantor is a partnership or consists of more than one (1) person
or entity, the involvement of any partner of the partnership or other person or
entity in any of the acts or events described in subsections (i) through (l) above.

 

20.2                        LANDLORD’S
REMEDIES.  Upon the occurrence of an
Event of Default hereunder, Landlord shall have the right, in addition to any
other rights or remedies Landlord may have under Laws, at Landlord’s option,
without further notice or demand of any kind, to elect to do one of the
following alternatives:

 

(i)                     Terminate
this Lease and Tenant’s right to possession of the Premises, re-enter the
Premises upon receipt of a judgement for possession, and take possession
thereof; and Tenant shall have no further claim to the Premises or under this
Lease; or

 

(ii)                  Continue
this Lease in effect and collect any unpaid Rent or other charges which have
theretofore accrued or which thereafter become due and payable.  It is intended hereunder that Landlord have
the remedy described in California Civil Code § 1951.4, which provides
that a landlord may continue a lease in effect after a tenant’s breach and
abandonment and recover rent as it becomes due, if tenant has the right to
sublease or assign, subject only to reasonable limitations.

 

 

53

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

In the event of any
re-entry or retaking of possession by Landlord, Landlord shall have the right,
but not the obligation, to remove all or any part of Tenant’s Property from the
Premises and to place such property in storage at a public warehouse at the
expense and risk of Tenant.

 

20.2.1              No
Waiver of Default.  The waiver by Landlord
of any Event of Default or of any other breach of any term, covenant, or
condition of this Lease shall not be deemed a waiver of such term, covenant, or
condition or of any subsequent breach of the same or any other term, covenant,
or condition.  Acceptance of Rent by
Landlord subsequent to any Event of Default or breach hereof shall not be
deemed a waiver of any preceding Event of Default or breach other than the
failure to pay the particular Rent so accepted, regardless of Landlord’s
knowledge of any breach at the time of such acceptance of Rent.  Landlord shall not be deemed to have waived
any term, covenant, or condition of this Lease, unless Landlord gives Tenant
written notice of such waiver.  Tenant
should not rely upon Landlord’s failure or delay in enforcing any right or
remedy hereunder.

 

20.2.2              Landlord’s
Right to Cure.  If Tenant defaults in
the performance of any of its obligations under this Lease, Landlord may (but
shall not be obligated to), without waiving such default, after the expiration
of all applicable notice and cure periods, perform the same for the account and
at the expense of Tenant.  Tenant shall
pay Landlord all reasonable costs of such performance promptly upon receipt of
a bill therefor.

 

20.3                        DAMAGES.  Should Landlord elect to terminate this Lease
under the provisions of § 20.2 (i) above, Landlord may recover as
damages from Tenant the following:

 

(a)                  Past Rent:  The
worth at the time of the award of any unpaid Rent which had been earned at the
time of termination; plus

 

(b)                  Rent Prior to Award: 
The worth at the time of the 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

 

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

 

(d)                  Proximately Caused Damages:  Any other amount necessary to compensate
Landlord for all 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, including, but not limited to, any costs
or expenses (including attorneys’ fees), incurred by Landlord in (i) retaking
possession of the Premises; (ii) maintaining the Premises after Tenant’s
default; (iii) preparing the Premises for reletting to a new tenant,
including any repairs or alterations; and (iv) reletting the Premises,
including brokers’ commissions.

 

“The worth at the time of
the award” as used in subsections (a), (b), and (c) above is to be
computed at the discount rate of the Federal Reserve Bank situated nearest to
the Premises at the time of the award plus one percent (1%).

 

20.4                        LANDLORD’S
DEFAULT.  If Landlord fails to
perform any covenant, condition, or agreement contained in this Lease within
thirty (30) days after receipt of written notice from Tenant specifying a
default and the relevant Lease provision, or if Landlord fails within that
thirty-day period after notice to

 

 

54

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

commence
to cure any such default which cannot reasonably be cured within
thirty (30) days, then, subject to § 21.1 below, Landlord shall be
liable to Tenant for any damages sustained by Tenant as a result of Landlord’s
breach.  Tenant shall not have the right
to terminate this Lease or to withhold, reduce, or offset any amount against
any payments of Rent or any other charges due and payable under this Lease,
except to the extent that a specific Lease provision permits such termination
or withholding, reduction, or offset of Rent.

 

20.4.1              Tenant’s
Right to Cure.  If Landlord defaults
in the performance of any of its obligations under this Lease, Tenant may (but
shall not be obligated to), without waiving such default, after the expiration
of all applicable notice and cure periods, perform the same for the account and
at the expense of Landlord.  Landlord
shall pay Tenant all reasonable costs of such performance promptly upon receipt
of a bill therefor.

 

20.4.2              Holder’s
Right to Cure.  Tenant shall give any
Holder a copy, by certified mail with return receipt requested, of any notice
of default served upon Landlord, provided that Tenant previously has been
notified in writing of the address of such Holder.  If Landlord fails to cure such default within
the time provided in this Lease, any such Holder shall have an additional
thirty (30) days within which to cure such default by Landlord or, if such
default cannot reasonably be cured within that time, such additional time as
may be necessary, provided that within such thirty-day period the Holder has
commenced and is pursuing the remedies necessary to cure such default
(including commencement of foreclosure proceedings, if necessary to effect such
cure), in which event this Lease shall not be terminated while such remedies
are being so pursued.

 

20.5                        SURVIVAL
OF REMEDIES.  The remedies permitted
under this Article 20, the parties’ indemnities under §§ 14.4.3,
14.4.4, and14.4.5, and § 28.5 below shall survive the termination of this
Lease.

 

21     LIMITATIONS ON LANDLORD’S LIABILITY

 

21.1                        PERSONAL
LIABILITY.  The liability of Landlord
to Tenant for any default by Landlord under this Lease or arising in connection
herewith or with Landlord’s operation, management, leasing, repair, renovation,
alteration, or any other matter relating to the Property or the Premises shall
be limited to the interest of Landlord in the Property (and the rental proceeds
thereof).  Under no circumstances shall
Landlord ever be liable for consequential or punitive damages, including
damages for lost profits or for business interruption.  Tenant agrees to look solely to Landlord’s
interest in the Property (and the rental proceeds thereof) for the recovery of
any judgement against Landlord, and Landlord shall not be personally liable for
any such judgement or deficiency after execution thereon.  The limitations of liability contained in
this Article 21 shall apply equally and inure to the benefit of Landlord’s
present and future partners, beneficiaries, officers, directors, trustees,
shareholders, agents, and employees, and their respective partners, heirs, successors,
and assigns.  Under no circumstances
shall any present or future general or limited partner of Landlord (if Landlord
is a partnership), or trustee or beneficiary (if Landlord or any partner of
Landlord is a trust) or corporate officer, director, or shareholder (if
Landlord or any partner of Landlord is a corporation or company) or member (if
Landlord is a limited liability company) have any liability for the performance
of Landlord’s obligations under this Lease.

 

21.2                        LIABILITY
UPON TRANSFER.  The term Landlord as used in this Lease, so far as covenants or
obligations on the part of the Landlord are concerned, shall be limited to mean
and include only the owner or owners, at the time in question, of the fee title
to, or a lessee’s interest in a ground lease or master lease of the
Property.  In the event of any transfer,
assignment, or other conveyance or transfer of any such title or interest,
Landlord herein named (and in case of subsequent transfers or conveyances, the
current grantor) shall be automatically freed and relieved from and after the
date of such transfer,

 

 

55

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

assignment, or conveyance of all liability with
respect to the performance of any covenants or obligations on the part of
Landlord contained in this Lease thereafter to be performed, except for return
of the Security Deposit, unless transferred to the successor Landlord; and,
without further agreement, the transferee of such title or interest shall be
deemed to have assumed and agreed to observe and perform any and all
obligations of Landlord hereunder, during its ownership of the Premises.  Landlord may transfer its interest in the
Premises without the consent of Tenant, and such transfer or subsequent transfer
shall not be deemed a violation on Landlord’s part of any of the terms and
conditions of this Lease.

 

22     ESTOPPEL CERTIFICATES

 

22.1                        REQUEST
AND DELIVERY.  Within ten (10) business
days following any written request either party may make from time to time, the
other party without any charge therefor, shall execute, acknowledge, and
deliver a statement certifying the following: (a) the Commencement Date of
this Lease; (b) the fact that this Lease is unmodified and in full force
and effect or, if there have been modifications hereto, that this Lease is in
full force and effect, as modified, and stating the date and nature of such
modifications; (c) the date to which the Rent and other sums payable under
this Lease have been paid; (d) the fact that there are no current defaults
under this Lease by either Landlord or Tenant except as specified in the
statement; and (e) such other matters as may be reasonably requested by
such party.  Landlord and Tenant intend
that any statement delivered pursuant to this Article 22 may be relied
upon by any Holder, Lessor, beneficiary, purchaser, or prospective purchaser of
the Building, the Complex, or any interest therein.  A party’s failure to deliver any such
statement within the specified ten-day period shall constitute a material
default hereunder, and a party shall indemnify, defend, protect, and hold the
other party harmless from and against any and all Claims which the other party
may sustain or incur as a result of or in connection with a party’s failure or
delay in delivering such statement.

 

22.2                        ELECTION
TO SELL BUILDING.  If Landlord elects
to sell the Building or to obtain loans secured by a lien on the Building,
Tenant, promptly after demand, shall include with the estoppel certificate(s) provided
to any prospective purchaser or lender as required under this Article 22
any financial statements of Tenant reasonably required by the purchaser or
lender.  The financial statements so
provided shall be kept confidential as to any parties other than the purchaser
or lender.

 

23     NOTICES

 

23.1                        MANNER OF
DELIVERY.  Any notice required or
permitted under this Lease shall be in writing and shall be delivered in at
least one of the following ways: (a) personally or by private
hand-delivery messenger service; (b) by depositing the same in the United
States mail, postage prepaid, registered or certified, return receipt
requested; or (c) by depositing such notice, postage prepaid, with Federal
Express or another nationally-recognized private overnight delivery
service.  Each such notice shall be
addressed to the intended recipient at such party’s address set forth as
follows, or at such other address as such party has theretofore specified by
written notice delivered in accordance with this § 23.1:

 

 

56

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

if
to Landlord:

 

KASHIWA FUDOSAN AMERICA, INC.

c/o Cushman &
Wakefield of California, Inc.

Attn: Property Manager

400 Oyster Point
Boulevard

South San Francisco, CA
94080

 

 

copy to:

 

LaSalle Investment
Management, Agent

Attn: Oyster Point Asset
Manager

770 “L” Street, Suite
1200

Sacramento, CA 95814

 

 

if to Tenant:

 

ONCOLOGY THERAPEUTICS NETWORK
JOINT VENTURE, L.P.

Attn: Real Property
Contracts Administrator

395 Oyster Point
Boulevard

South San Francisco, CA
94080

 

 

copies
to:

 

Bristol-Myers Squibb
Company

Attn: Corporate Real Estate
Department

P.O. Box 4000

Princeton, NJ 08543

 

 

and

 

Smith, Stratton, Wise,
Heher & Brennan, LLP

Attn: Christopher S.
Tarr, Esp.

600 College Road East

Princeton, NJ 08540

 

 

23.2                        REQUIRED
CONTENTS.  Every notice (other than
the giving or withholding of consent or approval under the provisions of the
Lease) given to a party shall state the section of the Lease pursuant to which
the notice is given; the period of time within which the recipient of the
notice must respond (or, if no response is required, a statement to that
effect); and if applicable, that the failure to object to the notice within the
stated time period will be deemed to be the equivalent of the recipient’s
approval, consent to, or satisfaction with the subject matter of the notice.

 

23.3                        PRESUMPTION
OF RECEIPT.  Any notice delivered
personally or by private messenger service during normal business hours shall
be deemed delivered on the day delivered to the recipient’s address.  Any notice delivered by Federal Express or
another nationally-recognized private overnight delivery service shall be
deemed delivered on the earlier of (y) the second day following deposit
thereof with the carrier or (z) the delivery date shown on the carrier’s
record of delivery.  Any notice delivered
by mail in the manner specified in § 23.1 shall be deemed delivered on the
earlier of (a) the third day following deposit thereof in the United
States Mail or (b) the delivery date shown on the return receipt prepared
in connection therewith.  Refusal by
Tenant or Landlord to accept notice delivered in accordance with any of the
foregoing means shall constitute a waiver of such notice by the refusing party.

 

24     BROKERS

 

24.1                        TENANT’S
REPRESENTATION.  Tenant represents
and warrants to Landlord that Tenant has dealt with no broker in connection
with this Lease other than GVA Whitney Cressman (Tenant’s broker) and Cushman
& Wakefield of California, Inc. (Landlord’s broker).  Each party shall be responsible for all
foreseeable consequences of damages (including attorneys’ fees and costs)
resulting from any claims that may be asserted against the other party by any
other broker, finder, or other person with whom a party has or purportedly has
dealt in connection with this Lease, and each party agrees to indemnify,
defend, protect, and hold the other party harmless in connection with any such
Claims which may be asserted.  Payment of
brokers’ commissions and fees is the subject of separate agreement by and among
the parties hereto and the named brokers.

 

 

57

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

25     RIGHTS RESERVED TO LANDLORD

 

25.1                        ACCESS TO
PROPERTY.  All of the Property 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 purpose of operation, maintenance,
decoration, and repair, are reserved to Landlord.  Tenant shall permit Landlord to install, use,
replace, and maintain pipes, ducts, and conduits within the demising walls, bearing
columns, and ceilings of the Premises, so long as Landlord’s exercise of such
rights is done in such a manner as to minimize all unreasonable disruption to
the conduct of Tenant’s business in the Premises.

 

25.2                        CONTROL OF
PROPERTY.  Except to the extent
expressly limited herein, Landlord reserves full rights to control the Property
(which rights may be exercised without subjecting Landlord to claims for
constructive eviction, abatement of Rent, damages, or other claims of any
kind), including more particularly the following rights:

 

(a)                  Name,
Address, Access.  To change the name
or street address of the Property; install and maintain signs on the exterior
and interior of the Property; retain at all times, and use in appropriate
instances, keys to all doors within and into the Premises; grant to any Person
the right to conduct any business or render any service at the Property,
whether or not it is the same or similar to the use permitted Tenant by this
Lease; and have access for Landlord and other tenants of the Property to any
mail chutes located on the Premises according to the rules of the United
States Postal Service.

 

(b)                  Entry
into Premises.  To enter the Premises
at reasonable hours for reasonable purposes upon not less than two (2) days’
prior written notice, except in the case of an emergency or to provide
janitorial services and subject to §§ 1.7.3 and 1.7.4 above, including
inspection and supplying cleaning service or other services to be provided
Tenant hereunder, to show the Premises to current and prospective lenders, ground
lessors, insurers, and prospective purchasers, tenants and brokers, at
reasonable hours; and if Tenant shall abandon the Premises at any time, or
shall vacate the same during the last three (3) months of the Term,
to decorate, remodel, repair, or alter the Premises.

 

(c)                  Safety
Measures.  To limit or prevent access
to the Property, shut down elevator service, activate elevator emergency
controls, or otherwise take such action or preventative measures deemed
necessary by Landlord for the safety of tenants or other occupants of the
Property or the protection of the Property and other property located thereon
or therein, in case of fire, invasion, insurrection, riot, civil disorder,
public excitement or other dangerous condition, or threat thereof.

 

(d)                  Improvements.  To decorate and to make alterations,
additions and improvements, structural or otherwise, in or to the Property or
any part thereof, and any adjacent building, structure, parking facility, land,
street or alley (including changes and reductions in corridors, lobbies,
parking facilities and other public areas and the installation of kiosks,
planters, sculptures, displays, escalators, mezzanines, and other structures,
facilities, amenities and features therein, and changes for the purpose of
connection with or entrance into or use of the Property in conjunction with any
adjoining or adjacent building or buildings, now existing or hereafter

 

 

58

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

constructed).  In connection with such matters, or with any
other repairs, maintenance, improvements or alterations, in or about the
Property, Landlord may erect scaffolding and other structures reasonably
required, and during such operations may enter upon the Premises and take into
and upon or through the Premises, all materials required to make such repairs,
maintenance, alterations or improvements, so long as Landlord’s exercise of
such rights is done in such a manner as to minimize all unreasonable disruption
to the conduct of Tenant’s business in the Premises, and may close public entry
ways, other public areas, restrooms, stairways or corridors.

 

25.3                        LANDLORD’S
RIGHT TO MAINTAIN.  Except as
expressly otherwise provided in this Lease, Landlord shall have no liability to
Tenant by reason of any inconvenience, annoyance, interruption, or injury to
business arising from Landlord’s making any repairs or changes which Landlord
is required or permitted to make by this Lease, by any other lease or agreement
affecting the Property, or by Law, in or to any portion of the Property, Complex,
or the Premises, including the Systems and Equipment and appurtenances of the
Property or the Premises, provided that Landlord shall use due diligence with
respect thereto and shall perform such work, except in case of emergency, at
times reasonably convenient to Tenant and otherwise in such manner as will not
materially diminish Tenant’s beneficial enjoyment of the Premises for their
intended use.  Landlord shall provide not
less that two (2) days’ prior written notice to Tenant whenever any work is
to be performed on the electrical system of the Building that could affect the
Premises, with such notice to specify the contractor that will perform such
work, the work to be done, and the location.

 

25.4                        REASONABLE
NOTICE.  In connection with entering the
Premises to exercise any of the foregoing rights, Landlord shall: (a) provide
reasonable advance written or oral notice to Tenant’s on-site manager or other
appropriate person (except in emergencies, or for routine cleaning or other
routine matters), and (b) take reasonable steps to avoid any unreasonable
interference with Tenant’s business.

 

26     HOLDING OVER

 

26.1                        HOLDOVER.  Unless Landlord expressly agrees otherwise in
writing, Tenant shall pay Landlord one hundred fifty percent (150%) of the
amount of Rent then applicable prorated on per diem basis for each day Tenant
shall retain possession of the Premises or any part thereof after expiration of
the Term or earlier termination of this Lease, together with all damages
sustained by Landlord on account thereof. 
The foregoing provisions shall not serve as permission for Tenant to
hold over, nor serve to extend the Term, although Tenant shall remain bound to
comply with all provisions of this Lease until Tenant vacates the Premises and
shall be subject to the provisions of § 11.1 above.

 

26.2                        PERMISSIVE
MONTH-TO-MONTH TENANCY.  Notwithstanding the foregoing to the contrary,
at any time before or after expiration or earlier termination of the Term of
the Lease, Landlord may serve notice advising Tenant of the amount of Rent and
other terms required, should Tenant desire to enter a month-to-month
tenancy.  If Tenant shall hold over more
than one full calendar month after such notice, Tenant shall thereafter be
deemed a month-to-month tenant, on the terms and provisions of this Lease then
in effect, as modified by Landlord’s notice, except that Tenant shall not be
entitled to any renewal or expansion rights contained in this Lease or any
amendments hereto.

 

 

59

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

27     PARKING

 

27.1        AVAILABLE PARKING.  Subject to the terms and conditions contained
in the balance of this Article 27, Landlord agrees to make available free
of charge to Tenant during the Term of this Lease and any renewal term up to a
maximum of one hundred ninety-three (193) parking spaces on a non-exclusive
basis in the area(s) designated by Landlord for parking in the Building’s
parking lots and/or facility (the “Parking Facility”); provided, that if Tenant
exercises its termination right with respect to Suite 400 pursuant to
§ 1.5.2 above, Tenant’s parking allocation shall be reduced to a maximum
of one hundred sixty-four (164) parking spaces. 
Said parking spaces shall be in locations designated by Landlord, and
parking shall be on a first-come-first-served, unassigned, nonreserved
basis.  Landlord reserves the right
reasonably to designate different locations or different parking areas for
Tenant’s use without any liability to Tenant and Tenant agrees that any change
shall not give rise to any claims or offset against Landlord hereunder.  Tenant shall abide by any and all reasonable
parking regulations and rules established from time to time by Landlord or
Landlord’s parking operator.  Landlord
reserves the right in its sole and absolute discretion to restrict or prohibit
the use of the Parking Facility for any vehicles other than passenger
automobiles, such as full-sized vans or trucks. 
Tenant shall not permit any vehicles belonging to Tenant or Tenant’s
employees, agents, customers, contractors, or invitees to be loaded, unloaded,
or parked in areas other than those designated by Landlord for such
activities.  A failure to comply with the
foregoing provisions shall afford Landlord the right without notice to remove
any vehicles involved and to charge the cost to Tenant, which cost shall be
immediately due and payable upon demand by Landlord.

 

27.2        USE AT TENANT’S OWN RISK.  Landlord shall have no obligation to monitor
the use of the Parking Facility.  Tenant’s
and its employees’ use of the Parking Facility shall be at the sole risk of
Tenant and its employees.  Unless caused
by the willful harmful act of Landlord, Landlord shall have no responsibility
or liability for any injury or damage to any person or property by or as a
result of the use of the Parking Facility (or substitute parking) by Tenant and
its employees, whether by theft, collision, criminal activity, or otherwise,
and Tenant hereby assumes, for itself and its employees, all risks associated
with any such occurrences in or about the Parking Facility.  Landlord agrees to instruct its security
service to use reasonable efforts to provide escort service to Tenant’s
employees if requested as an accommodation, subject to the availability of
security personnel to accommodate such requests in light of their primary
security duties.

 

28     MISCELLANEOUS PROVISIONS.

 

28.1        GENERAL DEFINITIONS.  The definitions which follow shall apply
generally to the provisions of this Lease.

 

(a)                      The term business
days means Monday through Friday inclusive, excluding Holidays
as defined in § 8.1.1 above. 
Throughout this Lease, wherever days is used
the term shall refer to calendar days. 
Wherever the term business days
is used the term shall refer to business days as defined hereunder.

 

(b)                      The term mortgage
shall include any mortgage or deed of trust, and the term mortgagee
shall include a trustee.

 

(c)                       The terms include,
including, and such
as shall each be construed as if followed by the phrase “without
limitation.”  The rule of eiusdem generis shall not be applicable to limit a general
statement following or referrable to an enumeration of specific matters to
matters similar to the matters specifically mentioned.

 

60

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(d)                      The term obligations
under this Lease and words of like import shall mean the
covenants to pay Rent and Additional Rent under this Lease and all of the other
covenants and conditions contained in this Lease.  Any provision in this Lease that one party or
the other or both shall do or not do or shall cause or permit or not cause or
permit a particular act, condition, or circumstance shall be deemed to mean
that such party so covenants or both parties so covenant, as the case may be.

 

(e)                       The term Tenant’s
obligations hereunder and words of like import and the term Landlord’s obligations hereunder and
words of like import shall mean the obligations under this Lease which are to
be performed or observed by Tenant, or by Landlord, as the case may be.  Reference to performance
of either party’s obligations under this Lease shall be construed as “performance
and observance.”

 

(f)                        Reference to Tenant being or not being in default hereunder or words like
import shall mean that Tenant is in default in the performance of one or more
of Tenant’s obligations hereunder, or that Tenant is not in default in the
performance of any of Tenant’s obligations hereunder, or that a condition of
the character described in § 20.1 above has occurred and continues or has
not occurred or does not continue, as the case may be.

 

(g)                       References to Landlord as having no liability to Tenant or being without liability to Tenant shall
mean that Tenant is not entitled to terminate this Lease or to claim actual or
constructive eviction, partial or total, or to receive any credit, allowance,
setoff, abatement, or diminution of Rent, or to be relieved in any manner of
any of its other obligations hereunder, or to be compensated for loss or injury
suffered or to enforce any other kind of liability whatsoever against Landlord
under or with respect to this Lease or with respect to Tenant’s use or
occupancy of the Premises.

 

(h)                      The term requirements
of insurance bodies and words of like import shall mean rules,
regulations, orders, and other requirements of the California Board of Fire
Underwriters and/or the California Fire Insurance Rating Organization and/or
any other similar body performing the same or similar functions and having
jurisdiction or cognizance of the Property and/or the Premises.

 

(i)                          The term repair
shall be deemed to include restoration and replacement as may be necessary to
achieve and/or maintain good working order and condition.

 

(j)                         Reference to termination
of this Lease includes expiration or earlier termination of the
Term of this Lease or cancellation of this Lease pursuant to any of the provisions
of this Lease or to Law.  Upon a
termination of this Lease, the Term and estate granted by this Lease shall end
at noon local time of the date of termination as if such date were the date of
expiration of the Term of this Lease, and neither party shall have any further
obligation or liability to the other after such termination, except as shall be
expressly provided for in this Lease and except for any such obligation as by
its nature or under the circumstances can only be, or by the provisions of this
Lease may be, performed after such termination; and in any event, unless
expressly provided to the contrary in this Lease, any liability for a payment
or obligation which shall have accrued to or with respect to any period ending
at the time of termination shall survive the termination of this Lease.

 

(k)                      The term in
full force and effect when herein used in reference to this
Lease as a condition to the existence or exercise of a right on the part of
Tenant shall be

 

61

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

construed in each
instance as including the further condition that at the time in question no
default on the part of Tenant exists, and no event has occurred which has
continued to exist for such period of time (after the notice, if any, required
by this Lease), as would entitle Landlord to terminate this Lease or to
dispossess Tenant.

 

(l)                          The term Tenant
shall mean Tenant herein named or any assignee, heir, distributee, executor,
administrator, legal representative, or other successor in interest (immediate
or remote) of Tenant herein named, while such Tenant or such assignee or other
successor in interest, as the case may be, is in possession of the Premises as
owner of the Tenant’s estate and interest granted by this Lease and also, if
Tenant is not a single individual or a corporation, all of the persons, firms,
and corporations then comprising Tenant; and their liability hereunder shall be
joint and several.

 

28.2        LIGHT AND AIR.  No diminution of light, air or view by any
structure which may hereafter be erected (whether or not by Landlord) shall
entitle Tenant to any reduction of Rent under this Lease, result in any
liability of Landlord to Tenant, or in any other way affect this Lease.

 

28.3        WAIVER OF TERMS.  If either Landlord or Tenant waives the performance
of any term, covenant, or condition contained in this Lease, such waiver shall
not be deemed to be a waiver of the term, covenant, or condition itself or a
waiver of any subsequent breach of the same or any other term, covenant, or
condition contained herein.  Furthermore,
the acceptance of Rent by Landlord shall not constitute a waiver of any
preceding breach by Tenant of any term, covenant, or condition of this Lease,
regardless of Landlord’s knowledge of such preceding breach at the time Landlord
accepts such Rent.  Failure by Landlord
to enforce any of the terms, covenants, or conditions of this Lease for any
length of time shall not be deemed to waive or to decrease the right of
Landlord to insist thereafter upon strict performance by Tenant.  Waiver by Landlord of any term, covenant, or
condition contained in this Lease may only be made by a written document signed
by Landlord.

 

28.4        FAILURE TO DELIVER STATEMENTS.  Landlord’s failure during the Term of this
Lease to prepare and deliver any of the Statements, estimates, notices, or
bills contemplated or required under this Lease, or Landlord’s failure to make
a demand, shall not in any way cause Landlord to forfeit or surrender its
rights to collect any of the foregoing items of Rent which may have become due
during the Term of this Lease.

 

28.5        ATTORNEY’S FEES.  In the event that any action or proceeding
(including arbitration) is brought to enforce or interpret any term, covenant,
or condition of this Lease on the part of Landlord or Tenant, the prevailing
party in such action or proceeding (whether after trial or upon appeal) shall
be entitled to recover from the party not prevailing its expenses therein,
including reasonable attorneys’ fees and all allowable costs as fixed by the
court.

 

28.6        JURY TRIAL. 
Tenant and Landlord each hereby waive their respective rights to a trial
by jury under applicable Laws in the event of any litigation or dispute between
Landlord and Tenant arising out of or in connection with this Lease and the
parties’ performance thereunder.

 

28.7        MERGER.  Notwithstanding the acquisition (if same
should occur) by the same party of the title and interests of both Landlord and
Tenant under this Lease, there shall never be a merger of the estates of
Landlord and Tenant under this Lease, but instead the separate estates, rights,
duties, and obligations of Landlord and Tenant, as existing hereunder, shall
remain unextinguished and continue, separately, in full

 

62

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

force
and effect until this Lease expires or otherwise terminates in accordance with
the express provisions herein contained.

 

28.8           NO MERGER ON VOLUNTARY SURRENDER.
 A voluntary or other surrender of this Lease
by Tenant or the mutual cancellation of this Lease shall not work a merger and
shall, at the option of Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to it
of any or all such subleases or subtenancies.

 

28.9           CONSENT.  Notwithstanding anything contained in this
Lease to the contrary, Tenant shall have no claim and hereby waives the right
to any claim against Landlord for money damages by reason of any refusal,
withholding, or delaying by Landlord of any consent, approval, statement, or
satisfaction; and in such event, Tenant’s only remedies therefor shall be an
action for specific performance, injunction, or declaratory judgement to
enforce any right to such consent, approval, statement, or satisfaction.

 

28.10         COUNTERPARTS.  This Lease may be
executed in multiple counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same instrument.

 

28.11         FINANCIAL STATEMENTS.  In order to induce Landlord to enter into
this Lease, Tenant agrees that it shall promptly furnish Landlord, from time to
time, upon Landlord’s written request, with financial statements reflecting
Tenant’s current financial condition. 
Tenant represents and warrants that all financial statements, records,
and information furnished by Tenant to Landlord in connection with this Lease
are and shall be true, correct, and complete in all respects.

 

28.12         GENDER AND NUMBER.  Words used in neuter gender include the
feminine and masculine, where applicable, and words used in the singular or
plural shall include the opposite number if appropriate.

 

28.13         JOINT AND SEVERAL OBLIGATION.  If more than one person executes this Lease as
Tenant, each of them is jointly and severally liable for the keeping,
observing, and performing of all of the terms, covenants, conditions,
provisions, and agreements of this Lease to be kept, observed, and performed by
Tenant.  The term Tenant
as used in this Lease shall mean and include each of such signatories jointly
and severally.  The act of or notice
from, or notice or refund to, or the signature of, any one or more of such
signatories with respect to the tenancy or this Lease, including any renewal,
extension, expiration, termination, or modification of this Lease, shall be
binding upon each and all of the persons 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.

 

28.14         HEADINGS AND SECTION NUMBERS.  The headings and titles of the articles and
sections of this Lease are used for convenience only and shall have no effect
upon the construction or interpretation of this Lease.  Wherever a reference is made in this Lease to
a particular article or section, such reference shall be deemed to include all
subsections following such section reference, unless the contrary is expressly
provided in connection with such reference. 
All references in this Lease to numbered articles, numbered sections,
and lettered exhibits are references to articles and sections of this Lease and
exhibits annexed to (and thereby made part of) this Lease, as the case may be,
unless expressly otherwise designated in the context.

 

28.15         APPLICABLE LAW.  This Lease shall in
all respects be governed by and interpreted in accordance with the laws of the
State of California.

 

63

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

28.16         SEVERABILITY.  If any provision of
this Lease or the application thereof to any person or circumstance shall be
invalid or unenforceable to any extent, the remainder of this Lease and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.

 

28.17         SIGNS.  Tenant shall not
place or permit to be placed in or upon the Premises where visible from outside
the Premises or any part of the Building, any signs, notices, drapes, shutters,
blinds or window coatings, or displays of any type without the prior written
consent of Landlord.  Landlord shall consent
to the location at the cost of Tenant of a building standard sign on or near
the entrance of the Premises and shall include Tenant in the Building and
Complex directories located in the Building. 
Landlord reserves the right in Landlord’s sole discretion to place and
locate on the roof and exterior of the Building and Complex and in any area of
the Building and the Complex not leased to Tenant, such signs, notices,
displays and similar items as Landlord deems appropriate in the proper
operation of the Building and the Complex. 
Notwithstanding the foregoing, Tenant shall have the right, at Tenant’s
sole cost and expense, to install a prominent exterior monument sign, subject
to applicable Laws and Landlord’s reasonable approval.

 

28.18         EXECUTION BY LANDLORD.  The submission of this document for
examination and negotiation does not constitute an offer to lease, or a
reservation of, or option for, the Premises. 
This document becomes effective and binding only upon execution and
delivery hereof by Tenant and by Landlord. 
No act or omission of any employee or agent of Landlord or of Landlord’s
broker shall alter, change or modify any of the provisions hereof.

 

28.19         USE OF NAME.  Tenant shall not use
the name of the Building or Complex for any purpose other than the address of
the business to be conducted by Tenant in the Premises.  Tenant shall not use any picture of the
Building or Complex in its advertising, stationery or in any other manner so as
to imply that the entire Building or Complex is leased by Tenant.  Landlord expressly reserves the right at any
time to change the name or street address of the Building and/or Complex
without in any manner being liable to Tenant therefor.

 

28.20         NONRECORDABILITY OF LEASE.  Tenant agrees that in no event shall this
Lease or a memorandum hereof be recorded without Landlord’s express prior
written consent, which consent Landlord may withhold in its sole discretion.

 

28.21         CONSTRUCTION.  All provisions
hereof, whether covenants or conditions, shall be deemed to be both covenants
and conditions.  The definitions
contained in this Lease, shall be used to interpret the Lease.  All rights and remedies of Landlord and
Tenant shall, except as otherwise expressly provided, be cumulative and
non-exclusive of any other remedy at law or in equity.

 

28.22         FORCE MAJEURE DELAYS.  This Lease and the obligations (other than
monetary obligations) of either party hereunder shall not be affected or
impaired because a party is unable to fulfill any of its obligations (other
than monetary obligations) hereunder or is delayed in doing so, if such
inability or delay is caused by reason of force majeure, strike, labor
troubles, acts of God, acts of government, unavailability of materials or
labor, or any other cause beyond the reasonable control of such party
(collectively “Force Majeure Delays”).

 

28.23         AUTHORITY.  If either party is a
corporation, each individual executing this Lease on behalf of each such party
represents and warrants that such party is qualified to do business in
California and that he is duly authorized to execute and deliver this Lease on
behalf of such party and shall deliver

 

64

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

appropriate
certification to that effect if requested. 
If either party is a limited liability company, partnership, joint
venture, or other unincorporated association, each individual executing this
Lease on behalf of such party represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of such party and that
this Lease is binding on such party. 
Furthermore, each party agrees that the execution of any written consent
hereunder, or any written modification or termination of this Lease, by any
general partner or member of such party or any other authorized agent of such
party shall be binding on such party.

 

28.24         NONDISCLOSURE.  Tenant agrees that
it shall not disclose any of the matters set forth in this Lease or disseminate
or distribute any information concerning the terms, covenants, or conditions
thereof to any person, firm, or entity, other than a prospective assignee or
subtenant of the Premises, without first obtaining the express written approval
of Landlord; provided, however, that Tenant may disclose the contents of this
Lease to any director, officer, or employee of Tenant, to Tenant’s lawyers,
accountants, or other third party consultants or professionals, to any lenders,
investors, or others to whom Tenant provides financial statements, or in
response to any legally effective demand for disclosure pursuant to court order
or from any other properly constituted legal authority.

 

28.25         QUIET ENJOYMENT.  So long as Tenant is not in default under this
Lease, Tenant shall have quiet enjoyment of the Premises for the Term, subject
to all the terms and conditions of this Lease and all liens and encumbrances prior
to this Lease.

 

28.26         EXHIBITS AND ATTACHMENTS.  All exhibits and attachments referred to in
the body of this Lease are deemed attached hereto and incorporated herein by
reference.  The parties have attached the
following exhibits to the Lease prior to execution:

 

	
  Exhibit A

  	
   

  	
  Site Plan

  
	
  Exhibit B

  	
   

  	
  Floor Plans of Premises

  
	
  Exhibit C

  	
   

  	
  Rules and Regulations

  
	
  Exhibit D

  	
   

  	
  Athletic Facility Use Agreement

  
	
  Exhibit E

  	
   

  	
  Commencement Date Agreement

  
	
  Exhibit F

  	
   

  	
  Work Letter Agreement

  

 

28.27         ENTIRE AGREEMENT.  This Lease, together with its exhibits,
contains all the agreements of the parties hereto and supersedes any previous
negotiations.  There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its exhibits.  This Lease may not be modified except by a
written instrument duly executed by the parties hereto.

 

IN
WITNESS WHEREOF,
the parties have executed this Lease as of the date first above written.

 

	
  Landlord:

  	
  KASHIWA FUDOSAN AMERICA, INC., a California corporation

  
	
   

  	
  By:

  	
  /s/ HARU TAKEHANA

  
	
   

  	
   

  	
  Haru Takehana, Director

  
				

 

65

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

	
  Tenant:

  	
  ONCOLOGY THERAEUTICS NETWORK JOINT VENTURE,
  L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
  By:

  	
   Oncology
  Therapeutics Network Corp., a Delaware corporation

  
	
   

  	
  Its:

  	
   General
  Partner

  
	
   

  	
  By:

  	
  /s/ FAHEEM HASNAIN

  
	
   

  	
   

  	
  Faheem Hasnain, President

  
				

 

 

66

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

TABLE OF
CONTENTS

 

	
  1

  	
  BASIC LEASE
  TERMS

  	
  1

  
	
  2

  	
  USE

  	
  13

  
	
  3

  	
  PREPARATION OF
  THE PREMISES

  	
  14

  
	
  4

  	
  ADJUSTMENTS OF
  RENT

  	
  16

  
	
  5

  	
  SECURITY DEPOSIT

  	
  26

  
	
  6

  	
  COMPLIANCE WITH
  LAWS

  	
  26

  
	
  7

  	
  HAZARDOUS
  MATERIALS

  	
  27

  
	
  8

  	
  SERVICES AND
  UTILITIES

  	
  29

  
	
  9

  	
  TENANT’S CHANGES

  	
  33

  
	
  10

  	
  TENANT’S
  PROPERTY

  	
  36

  
	
  11

  	
  CONDITION UPON
  SURRENDER

  	
  36

  
	
  12

  	
  REPAIRS AND
  MAINTENANCE

  	
  37

  
	
  13

  	
  RULES AND
  REGULATIONS

  	
  38

  
	
  14

  	
  INSURANCE AND
  INDEMNIFICATION

  	
  38

  
	
  15

  	
  DAMAGE OR
  DESTRUCTION

  	
  42

  
	
  16

  	
  EMINENT DOMAIN

  	
  44

  
	
  17

  	
  ASSIGNMENT AND
  SUBLETTING

  	
  44

  
	
  18

  	
  SUBORDINATION
  AND ATTORNMENT

  	
  49

  
	
  19

  	
  FINANCING
  REQUIREMENTS

  	
  51

  
	
  20

  	
  DEFAULT

  	
  51

  
	
  21

  	
  LIMITATIONS ON
  LANDLORD’S LIABILITY

  	
  54

  
	
  22

  	
  ESTOPPEL
  CERTIFICATES

  	
  55

  
	
  23

  	
  NOTICES

  	
  55

  
	
  24

  	
  BROKERS

  	
  56

  
	
  25

  	
  RIGHTS RESERVED
  TO LANDLORD

  	
  57

  
	
  27

  	
  HOLDING OVER

  	
  58

  
	
  28

  	
  PARKING

  	
  59

  
	
  29

  	
  MISCELLANEOUS
  PROVISIONS

  	
  59

  

 

 

i

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

INDEX OF
DEFINED TERMS

 

	
  A

  	
   

  
	
  Additional Rent

  	
  11, 16, 22, 35, 44, 46,
  47, 59

  
	
  Adjustment Period

  	
  16, 17, 18, 20, 22, 23,
  24, 25

  
	
  Assumed Base Amount

  	
  23, 24

  
	
  Athletic Facility

  	
  12, 20, 64

  
	
  B

  	
   

  
	
  Base Expense Year

  	
  17

  
	
  Base Operating Expenses

  	
  16, 17, 23

  
	
  Base Real Estate Taxes

  	
  17, 23, 24

  
	
  Base Rent

  	
  2, 3, 11, 16, 23, 26,
  32, 42, 46, 47, 50

  
	
  Base Tax Year

  	
  17, 24

  
	
  Base Utilities

  	
  16, 17, 23

  
	
  Building

  	
  3, 12, 13, 14, 17, 18,
  19, 20, 23, 29, 31, 32, 33, 35, 37, 39, 41, 43, 45, 47, 48, 49, 55, 56, 58,
  62,

  63

  
	
  Business Hours

  	
  30

  
	
  Business Personal Property

  	
  38, 39, 40

  
	
  C

  	
   

  
	
  Claims

  	
  40, 41, 55, 56

  
	
  Code Costs

  	
  27

  
	
  Commencement Date

  	
  3, 9, 11, 16, 19, 27,
  31, 51, 54, 64

  
	
  Complex

  	
  1, 3, 11, 12, 13, 14,
  17, 20, 25, 35, 41, 43, 45, 46, 49, 51, 55, 58, 62, 63

  
	
  E

  	
   

  
	
  Event of Default

  	
  51, 52

  
	
  Expiration Date

  	
  3, 9, 22, 26, 29, 36,
  46

  
	
  F

  	
   

  
	
  Force Majeure Delays

  	
  63

  
	
  H

  	
   

  
	
  Hazardous Material

  	
  27, 28

  
	
  Holder

  	
  39, 49, 50, 53, 55

  
	
  Holidays

  	
  30, 59

  
	
  HVAC

  	
  29, 32, 33

  
	
  I

  	
   

  
	
  Improvements

  	
  14, 35, 36, 43, 57

  
	
  INC

  	
  1, 13, 14, 29, 31, 33, 37,
  41, 64

  
	
  IW

  	
  37

  
	
  L

  	
   

  
	
  Landlord

  	
  1, 3, 9, 11, 12, 13,
  14, 15, 16, 17, 18, 19, 20, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33,
  34, 35,

  36, 37,

  
	
   

  	
  38, 39, 40, 41, 42, 43,
  44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62,
  63,

  64

  
	
  Laws

  	
  14, 19, 26, 27, 28, 29,
  31, 34, 35, 37

  
	
  Lease

  	
  i, 2, 3, 9, 11, 12, 13,
  14, 16, 17, 18, 20, 23, 24, 25, 26, 27, 28, 29, 30, 31, 33, 34, 35, 36, 37,
  38,

  39, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58,
  59, 60, 61, 62, 63, 64

  
	
  Lessor

  	
  39, 49, 50, 55

  

 

 

ii

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

	
  M

  	
   

  
	
  MPOE

  	
  29, 31

  
	
  MSDS

  	
  28

  
	
  O

  	
   

  
	
  Occupancy Conditions

  	
  15, 16

  
	
  Operating Expenses

  	
  16, 17, 18, 19, 20, 23,
  24, 25, 29, 43

  
	
  P

  	
   

  
	
  Parking Facility

  	
  58, 59

  
	
  Permitted Occupant

  	
  45, 49

  
	
  Premises

  	
  1, 2, 3, 9, 12, 13, 14,
  15, 16, 17, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 41,
  42,

  43, 44, 45, 46, 48, 49, 51, 52, 53, 54, 56, 57, 58, 60, 62, 63, 64

  
	
  Property

  	
  3, 12, 13, 14, 17, 18,
  19, 20, 24, 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41,
  42,

  43, 47, 49, 51, 52, 54, 55, 56, 57, 58, 60

  
	
  R

  	
   

  
	
  Real Estate Taxes

  	
  17, 18, 23, 24, 25

  
	
  Rent

  	
  2, 3, 11, 12, 13, 16,
  18, 22, 23, 26, 32, 33, 35, 41, 42, 44, 46, 47, 48, 50, 52, 53, 55, 57, 58,
  59,

  60, 61

  
	
  Rental Adjustment

  	
  17, 22, 23

  
	
  Rules

  	
  13, 37, 38, 64

  
	
  S

  	
   

  
	
  Security Deposit

  	
  26

  
	
  State

  	
  1, 18, 26, 38, 62

  
	
  Statement

  	
  22, 23, 25

  
	
  Subsequent Operating Expenses

  	
  23

  
	
  Successor Landlord

  	
  50

  
	
  Superior Leases

  	
  49

  
	
  Superior Mortgages

  	
  20, 49

  
	
  Systems and Equipment

  	
  12, 13, 14, 20, 29, 31,
  32, 33, 37, 41, 58

  
	
  T

  	
   

  
	
  Table

  	
  2, 3, 11, 16, 17

  
	
  Takings

  	
  43

  
	
  Temporary Condemnation

  	
  44

  
	
  Tenant

  	
  1, 2, 3, 9, 11, 12, 13,
  14, 15, 16, 17, 18, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35,
  36,

  
	
   

  	
  37, 38, 39, 40, 41, 42,
  43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61,
  62,

  
	
   

  	
  63, 64

  
	
  Tenant Delays

  	
  16

  
	
  Term

  	
  2, 9, 11, 14, 16, 17,
  18, 20, 23, 24, 27, 30, 33, 35, 36, 39, 43, 44, 53, 57, 58, 60, 61, 64

  
	
  Transfer

  	
  44, 46, 47, 48, 51, 54

  
	
  Transfer Notice

  	
  44, 46

  
	
  Transfer Premium

  	
  47

  
	
  U

  	
   

  
	
  Utilities

  	
  16, 17, 18, 20, 23, 25,
  29

  
	
  W

  	
   

  
	
  Work

  	
  14, 15, 16, 35, 36, 37,
  64

  

 

 

iii

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

OYSTER POINT
MARINA PLAZA

 

First
Addendum to Office Lease

 

THIS FIRST ADDENDUM TO
OFFICE LEASE (the “First Addendum”) is made and entered into as of December 15,
2004, by and between KASHIWA FUDOSAN AMERICA,
INC., a California corporation (“Landlord”) and ONCOLOGY THERAPEUTICS
NETWORK JOINT VENTURE, L.P., a Delaware limited partnership (“Tenant”).

 

Recitals

 

A.                           Landlord
and Tenant have heretofore entered into that certain lease dated June 1,
2003 (the “Lease”) for premises described as Suites [*] & 400
(the “Premises”), initially containing approximately [*] rentable square
feet, in the building located at 395 Oyster Point Boulevard, South San
Francisco, California (the “Building”), which forms part of the office building
complex commonly known as Oyster Point Marina Plaza (the “Complex”).

 

B.                           The
parties mutually desire to amend the terms of the Lease so as to expand the
Premises by the addition of Suite 401 containing approximately 1,250
rentable square feet of space and in certain other respects, all on and subject
to the terms and conditions hereof.

 

Agreement

 

Now, therefore, in consideration of the mutual terms and
conditions herein contained and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

 

1                                         EFFECT
OF ADDENDUM.  Landlord and Tenant
agree that, notwithstanding anything contained in the Lease to the contrary,
the provisions set forth below will be deemed to be part of the Lease and shall
supersede, to the extent they differ, any contrary provisions in the
Lease.  Terms defined in the Lease shall
have the same meanings in this First Addendum, unless a different definition is
set forth in this First Addendum.

 

2                                         EFFECTIVE
DATE.  The amendments and changes
specified in this First Addendum shall become effective on January 1,
2005 (the “Effective Date”). 
Notwithstanding the foregoing, this First Addendum shall constitute the
fully-binding agreement and contract of the parties from and after the date of
the parties’ execution and delivery to each other of this First Addendum.

 

3                                         EXPANSION
OF PREMISES.  Upon the Effective
Date, the Premises shall be expanded by the addition of Suite 401
containing approximately 1,250 rentable square feet of space in the Building (“Suite 401”)
for all purposes under the Lease; and all references in the Lease to the “Premises”
shall refer to the combination of both the existing Premises under the Lease
and Suite 401 from and after the Effective Date.  The floor plan and location of Suite 401
is shown on Exhibit A which is attached
hereto and incorporated herein by reference. 
The parties agree that, upon the Effective Date, Suite 401 shall
become part of the Premises pursuant to the basic terms specified in the Table
below (as hereby amended) regarding Term, Base Rent, Tenant’s Share of
increases in Operating Expenses and Taxes, and the Base Year for the purposes
of calculating Additional Rentable payable with respect to Suite 401.

 

3.1                               Early
Occupancy.  Notwithstanding anything
to the contrary herein, Tenant shall be permitted early entry to Suite 401
from and after the date of the parties’ execution and delivery to each other of
this First Addendum for the purpose of installing Tenant’s telephone and data
network cables and wiring, provided that Tenant does not interfere with the
performance of Landlord’s Work Suite 401 (if any); but

 

 

1

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

shall not be obligated to
begin paying Base Rent therefore until the Effective Date, as specified in the
Table below.

 

4                                         TABLE.  The Table set forth in § 1.3 of the
Lease is hereby superseded and replaced in its entirety by the following table,
which shall constitute the Table under § 1.3 of the Lease for all purposes
from and after the Effective Date of this First Addendum:

 

	
  PERIOD

  	
   

  	
  SUITE

  NO.

  	
   

  	
  RSF

  	
   

  	
  USF

  	
   

  	
  MONTHLY

  BASE RENT

  	
   

  	
  T’S

  SHARE

  BLDG

  	
   

  	
  T’S SHARE

  COMPLEX

  	
   

  	
  BASE

  YEAR

  	
   

  
	
  March 1, 2004, to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  84,435.75

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
  2004

  	
   

  
	
  February 28,
  2005

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  14,784.00

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  January 1,
  2005, to

  February 28, 2005

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,000.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
  2004

  	
   

  
	
  March 1, 2005 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  86,848.20

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28,
  2006

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  15,206.40

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,000.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
  March 1, 2006 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  89,260.65

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28,
  2007

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  15,628.80

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,062.50

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
  March 1, 2007 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  91,673.10

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 29,
  2008

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  16,051.20

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,125.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
  March 1, 2008 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  94,085.55

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28,
  2009

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  16,473.60

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,187.50

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
  March 1, 2009 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  96,498.00

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28,
  2010

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  16,896.00

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,250.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
  March 1, 2010 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  98,910.45

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28,
  2011

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  17,318.40

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,312.50

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
  March 1, 2011 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  101,322.90

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 29,
  2012

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  17,740.80

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,375.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
  March 1, 2012 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  103,735.35

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28,
  2013

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  18,163.20

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,437.50

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
  March 1, 2013 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  106,147.80

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28,
  2014

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  18,585.60

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,500.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
  2004

  	
   

  
	
  TOTALS:

  	
   

  	
   

  	
   

  	
  57,947

  	
   

  	
  53,865

  	
   

  	
   

  	
   

  	
  24.898

  	
  %

  	
  12.475

  	
  %

  	
   

  	
   

  

 

5                                         AMENDMENT OF RENT. 
From and after the Effective Date, the Base Rent reserved in § 1.6(a) of
the Lease is hereby amended to that specified in the Table in ¶ 4 above with
respect to the various spaces and time periods referenced therein.  Tenant shall pay to Landlord the first
month’s Base Rent with respect to Suite 401 upon Tenant’s execution and
delivery of this First Addendum to Landlord.

 

 

2

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

5.1                               Suite 400
Base Rent Abatement.  Notwithstanding
anything to the contrary in this First Addendum (including the Table above)
Tenant’s Abatement Period with respect to Suite 400 provided under
§ 1.6.3 of the Lease remains in effect, provided that said § 1.6.3 of
the Lease is hereby amended and restated as follows:

 

Notwithstanding
anything to the contrary in this § 1.6 or § 1.3 above, beginning on March 1, 2004, Tenant’s Monthly Installment of Base
Rent with respect to Suite 400 only shall be abated for a period of
eighteen (18) months (the “Abatement Period”). 
The parties agree that the Abatement Period shall terminate on  September 1, 2005.  If Tenant shall materially default under the
Lease and fail to cure within the time permitted for cure thereunder, while the
Abatement Period is still in effect, the Abatement Period shall thereupon
terminate, and Tenant shall commence paying the Base Rent under the Lease as
specified in the Table.

 

6                                         BASE
YEAR AND ADDITIONAL RENT.  As
specified in the Table below, the Base Year for the purposes of Article 4
of the Lease from and after the Effective Date shall be calendar year 2004 with respect to Suite 401.

 

7              CONDITION
OF PREMISES.  Tenant shall
accept Suite 401, any existing Improvements in Suite 401, and the
Systems and Equipment serving the same in an “as is” condition on the
Effective Date, and Landlord shall have no obligation to improve, alter,
remodel, or otherwise modify the Suite 401 in connection with Tenant’s
occupancy of the Premises from and after the Effective Date.

 

7.1                               Landlord’s
Work; Improvement Allowance. 
Notwithstanding anything to the contrary in ¶ 4 above, Landlord
agrees to provide an improvement allowance in the amount of Four Thousand Nine Hundred Fifteen Dollars ($4,915.00)
toward the cost of any work or improvements that Tenant may elect to install in
Suite 401, subject to Article 9 of the Lease, after the Effective
Date hereof.  If Tenant elects to
implement any such Changes in Suite 401, Landlord shall use reasonable
diligence in completing the approved work in Suite 401 for Tenant.  The facilities, materials, and work to be
furnished, installed, and performed in Suite 401 by Landlord are referred
to as the “Work.”  Any other
installations, materials, and work which may be undertaken by or for the
account of Tenant to prepare, equip, decorate, and furnish Suite 401 are
referred to as the “Tenant’s Work.”  If
required by Landlord, Tenant agrees to enter into an appropriate work letter
agreement to reflect the parties’ agreement with respect to any such Changes in
Suite 401 and the expenditure of the improvement allowance granted under
this ¶ 7.1.

 

7.1.1                     Occupancy
during Work.  The parties acknowledge
that Tenant shall be in possession of the Premises and shall conduct its
business in the Premises during the Work contemplated under ¶ 7.1
above.  Landlord shall have no liability
to Tenant, nor shall Tenant’s obligations under the Lease be reduced or abated
in any manner whatsoever, by reason of any inconvenience, annoyance,
interruption, or injury to business arising from Landlord’s performance of the
Work or from Landlord’s making any repairs or changes which Landlord is
required or permitted to perform by the Lease. 
Landlord shall nevertheless use reasonable efforts to minimize any
interference with Tenant’s business in the Premises.  Landlord agrees to use reasonable efforts to
avoid interference with Tenant’s use and occupancy of the Premises during the
performance of the Work and agrees to cause the application of paint and any
work generating unreasonable noise outside of normal business hours.  The parties agree that Landlord shall not be
liable for any damages which Tenant may incur during the performance of the
Work, except to the extent that Tenant’s actual damages are the result of
Landlord’s negligence or wilfull misconduct. 
In no circumstances shall Landlord be liable to Tenant for business
interruption, lost profits, or compensatory or consequential damages of any
kind by virtue of Landlord’s Work. 
Tenant specifically agrees that any interference with Tenant’s use or
occupancy of the Premises caused by the performance of the Work shall not
constitute a constructive eviction.

 

 

3

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

7.2                               Notice
of Defects.  It shall be conclusively
presumed upon Tenant’s taking actual possession of Suite 401 that the same
were in satisfactory condition (except for latent defects) as of the date of
such taking of possession, unless within thirty (30) days after the Effective
Date Tenant shall give Landlord notice in writing specifying the respects in
which Suite 401 was not in satisfactory condition.

 

8                                         TENANT’S
SUPPLEMENTARY IMPROVEMENT ALLOWANCE. 
Notwithstanding anything to the contrary n ¶ 3 of the Work Letter
Agreement, the parties agree that, during the performance of Landlord’s Work
under the Work Letter Agreement, Tenant elected to apply of sum of Sixty
Thousand Dollars ($60,000) referenced in said ¶ 3 to improvements other
than the Southeast Wing HVAC portion of the Supplemental HVAC system in the 5th Floor of the Premises as required under
§ 3.2 of the Lease and that Landlord’s entire obligation under the Work
Letter Agreement with respect to the Southeast Wing HVAC portion of the
Supplemental HVAC system in the 5th Floor of the Premises as required under
§ 3.2 of the Lease has been fully and completely discharged.

 

9                                         Tenant’s
Termination Right.  From and after
the Effective Date the parties agree that Suite 401 shall be deemed part
of Suite 400 for the purpose of exercising Tenant’s Suite 400
termination right under § 1.5.2 of the Lease; provided, that said
§ 1.5.2 is hereby amended in its entirety to read as follows:

 

Suite 400 Termination Right.  Notwithstanding anything to the contrary
herein, Tenant shall have the right to terminate the Lease with respect to
Suites 400 and 401 only effective on either September 30,
2008, or September 30, 2010,
upon written notice given to Landlord not less than six (6) months and not
more than nine (9) months prior to either such termination date that may
be selected by Tenant.  If Tenant
exercises such termination right, Tenant shall pay to Landlord a termination
fee on the termination date of either One Hundred Seven Thousand
Five Hundred Thirteen Dollars and Forty Cents ($107,513.40), if
Tenant exercises its right to terminate the Lease with respect to
Suites 400 and 401 on September 30, 2008, or Seventy-Seven
Thousand Three Hundred Thirty-Four Dollars and Twenty Cents ($77,334.20),
if Tenant exercises its right to terminate the Lease with respect to
Suites 400 and 401 on September 30, 2010.

 

10                                  PARKING.  The number of parking spaces designated for
Tenant’s use under § 27.1 of the Lease shall be increased from and after
the Effective Date from the number stated in the Lease to up to a maximum of
One Hundred Ninety-Seven (197) parking spaces on a non-exclusive basis in the
area(s) designated by Landlord for parking in the Building’s parking lots.

 

11                                  NO
DISCLOSURE.  Tenant agrees that it
shall not disclose any of the matters set forth in this First Addendum or
disseminate or distribute any information concerning the terms, details, or
conditions hereof to any person, firm, or entity without obtaining the express
written approval of Landlord.

 

12                                  SURVIVAL.  Warranties, representations, agreements, and
obligations contained in this First Addendum shall survive the execution and
delivery of this First Addendum and shall survive any and all performances in
accordance with this First Addendum.

 

13                                  COUNTERPARTS.  This First Addendum may be executed in any
number of counterparts, which each severally and all together shall constitute
one and the same First Addendum.

 

14                                  ATTORNEYS’
FEES.  If any party obtains a
judgement against any other party or parties by reason of breach of this First
Addendum, reasonable attorneys’ fees and costs as fixed by the court shall be
included in such judgement against the losing party or parties.

 

15                                  SUCCESSORS.  This First Addendum and the terms and
provisions hereof shall inure to the benefit of and be binding upon the heirs,
successors, and assigns of the parties.

 

16                                  AUTHORITY.  Each of the individuals executing this First
Addendum represents and warrants that he or she is authorized to execute this
First Addendum on behalf of the party for whom he or she is

 

 

4

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

executing this First
Addendum and that by his or her signature such party is legally bound by the
terms, covenants, and conditions of this First Addendum.

 

17                                  GOVERNING
LAW.  This First Addendum shall be
construed and enforced in accordance with the laws of the State of California.

 

18                                  CONTINUING
VALIDITY OF LEASE.  Except as
expressly modified herein, the Lease remains in full force and effect, and its
provisions shall apply equally to the Expansion Space as to the remainder of
the Premises, including (i) Tenant’s termination right under § 1.5.2
of the Lease with respect to Suite 400, of which the Expansion Space shall
be deemed a part of the purposes of exercising Tenant termination right
thereunder; (ii) the exercise of Tenant’s Extension Option under
§ 1.5.1 of the Lease; and (iii) Tenant’s Security Deposit stated
under § 5.1 of the Lease, which shall remain unchanged by this First
Addendum.

 

19                                  CONFLICTS.  In the event of any conflict between the
provisions of the Lease and those of this First Addendum, the terms and
provisions of this First Addendum shall control.

 

20                                  WHOLE
AGREEMENT.  The mutual obligations of
the parties as provided herein are the sole consideration for this First
Addendum, and no representations, promises, or inducements have been made by
the parties other than as appear in this First Addendum, which supersedes any
previous negotiations.  There have been
no representations made by the Landlord or understandings made between the
parties other than those set forth in this First Addendum.  This First Addendum may not be amended except
in writing signed by all the parties.

 

In
witness whereof, the parties have executed this First Addendum as of the
date first above written.

 

 

	
  Landlord:

  	
   

  	
  Tenant:

  
	
  KASHIWA FUDOSAN AMERICA, INC.,

  	
   

  	
  ONCOLOGY THERAPEUTICS NETWORK JOINT VENTURE,
  L.P.,

  
	
  a California Corporation

  	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ HARU TAKEHANA

  	
   

  	
  By:

  	
  Oncology Therapeutics Network Corp., a Delaware
  corporation

  
	
   

  	
  Haru Takehana, Director

  	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ FAHEEM HASNAIN

  
	
   

  	
   

  	
   

  	
   

  	
  Faheem Hasnain, President

  

 

 

5

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

OYSTER POINT
MARINA PLAZA

 

Second Addendum to Office Lease

 

THIS SECOND
ADDENDUM TO OFFICE LEASE (the “Second Addendum”) is made and entered into as of
March 1, 2005, by and between KASHIWA FUDOSAN AMERICA,
INC., a California corporation (“Landlord”) and ONCOLOGY THERAPEUTICS
NETWORK JOINT VENTURE, L.P., a Delaware limited partnership (“Tenant”).

 

Recitals

 

A.         Landlord and Tenant have heretofore
entered into that certain lease dated June 1, 2003 (the “Lease”) for
premises described as Suites [*] & 400 (the “Premises”), initially
containing approximately [*] rentable square feet, in the building located at
395 Oyster Point Boulevard, South San Francisco, California (the “Building”),
which forms part of the office building complex commonly known as Oyster Point
Marina Plaza (the “Complex”).

 

B.         The Lease has heretofore been amended
by that certain First Addendum to Office Lease dated as of December 15,
2004 (“the “First Addendum”), under which the parties agreed to expand the
Premises by the addition of Suite 401 containing approximately 1,250
rentable square feet of space and in certain other respects, all as set forth
in the First Addendum.

 

C.         The parties mutually desire to amend
the terms of the Lease so as to expand the Premises by the addition of Suite 402
containing approximately 5,680 rentable square feet of space and in certain
other respects, all on and subject to the terms and conditions hereof.

 

Agreement

 

Now,
therefore, in
consideration of the mutual terms and conditions herein contained and of other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

1      EFFECT OF ADDENDUM. 
Landlord and Tenant agree that, notwithstanding anything contained in
the Lease to the contrary, the provisions set forth below will be deemed to be
part of the Lease and shall supersede, to the extent they differ, any contrary
provisions in the Lease.  Terms defined
in the Lease shall have the same meanings in this Second Addendum, unless a
different definition is set forth in this Second Addendum.

 

2      EFFECTIVE DATE. 
The amendments and changes specified in this Second Addendum shall
become effective on April 1, 2005
(the “Effective Date”).  Notwithstanding
the foregoing, this Second Addendum shall constitute the fully-binding
agreement and contract of the parties from and after the date of the parties’
execution and delivery to each other of this Second Addendum.

 

3      TABLE. 
The Table set forth in § 1.3 of the Lease (as heretofore modified
in the First Addendum) is hereby superseded and replaced in its entirety by the
following table, which shall constitute the Table under § 1.3 of the Lease
for all purposes from and after the Effective Date of this Second Addendum:

 

7

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

	
  PERIOD

  	
   

  	
  SUITE

  NO.

  	
   

  	
  RSF

  	
   

  	
  USF

  	
   

  	
  MONTHLY

  BASE RENT

  	
   

  	
  SHARE

  BLDG

  	
   

  	
  SHARE

  COMPLEX

  	
   

  	
  BASE

  YEAR

  	
   

  
	
  March 1, 2004, to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  84,435.75

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
  2004

  	
   

  
	
  February 28, 2005

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  14,784.00

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
  January 1, 2005, to February 28, 2005

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,000.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
  2004

  	
   

  
	
  March 1, 2005 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  86,848.20

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28, 2006

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  15,206.40

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,000.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
  April 1, 2005, to February 28, 2006

  	
   

  	
  402

  	
   

  	
  5,680

  	
   

  	
  4,939

  	
   

  	
  $

  	
  9,088.00

  	
   

  	
  2.441

  	
  %

  	
  1.223

  	
  %

  	
  2004

  	
   

  
	
  March 1, 2006 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  89,260.65

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28, 2007

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  15,628.80

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,062.50

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  402

  	
   

  	
  5,680

  	
   

  	
  4,939

  	
   

  	
  $

  	
  9,372.00

  	
   

  	
  2.441

  	
  %

  	
  1.223

  	
  %

  	
   

  	
   

  
	
  March 1, 2007 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  91,673.10

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 29, 2008

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  16,051.20

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,125.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  402

  	
   

  	
  5,680

  	
   

  	
  4,939

  	
   

  	
  $

  	
  9,656.00

  	
   

  	
  2.441

  	
  %

  	
  1.223

  	
  %

  	
   

  	
   

  
	
  March 1, 2008 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  94,085.55

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28, 2009

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  16,473.60

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,187.50

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  402

  	
   

  	
  5,680

  	
   

  	
  4,939

  	
   

  	
  $

  	
  9,940.00

  	
   

  	
  2.441

  	
  %

  	
  1.223

  	
  %

  	
   

  	
   

  
	
  March 1, 2009 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  96,498.00

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28, 2010

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  16,896.00

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,250.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  402

  	
   

  	
  5,680

  	
   

  	
  4,939

  	
   

  	
  $

  	
  10,224.00

  	
   

  	
  2.441

  	
  %

  	
  1.223

  	
  %

  	
   

  	
   

  
	
  March 1, 2010 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  98,910.45

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28, 2011

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  17,318.40

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,312.50

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  402

  	
   

  	
  5,680

  	
   

  	
  4,939

  	
   

  	
  $

  	
  10,508.00

  	
   

  	
  2.441

  	
  %

  	
  1.223

  	
  %

  	
   

  	
   

  
	
  March 1, 2011 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  101,322.90

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 29, 2012

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  17,740.80

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,375.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  402

  	
   

  	
  5,680

  	
   

  	
  4,939

  	
   

  	
  $

  	
  10,792.00

  	
   

  	
  2.441

  	
  %

  	
  1.223

  	
  %

  	
   

  	
   

  
	
  March 1, 2012 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  103,735.35

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28, 2013

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  18,163.20

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,437.50

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  402

  	
   

  	
  5,680

  	
   

  	
  4,939

  	
   

  	
  $

  	
  11,076.00

  	
   

  	
  2.441

  	
  %

  	
  1.223

  	
  %

  	
   

  	
   

  
	
  March 1, 2013 to

  	
   

  	
  500

  	
   

  	
  48,249

  	
   

  	
  45,432

  	
   

  	
  $

  	
  106,147.80

  	
   

  	
  20.731

  	
  %

  	
  10.387

  	
  %

  	
   

  	
   

  
	
  February 28, 2014

  	
   

  	
  400

  	
   

  	
  8,448

  	
   

  	
  7,346

  	
   

  	
  $

  	
  18,585.60

  	
   

  	
  3.630

  	
  %

  	
  1.819

  	
  %

  	
  2004

  	
   

  
	
   

  	
   

  	
  401

  	
   

  	
  1,250

  	
   

  	
  1,087

  	
   

  	
  $

  	
  2,500.00

  	
   

  	
  0.537

  	
  %

  	
  0.269

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  402

  	
   

  	
  5,680

  	
   

  	
  4,939

  	
   

  	
  $

  	
  11,360.00

  	
   

  	
  2.441

  	
  %

  	
  1.223

  	
  %

  	
   

  	
   

  
	
  TOTALS:

  	
   

  	
   

  	
   

  	
  63,627

  	
   

  	
  58,804

  	
   

  	
   

  	
   

  	
  27.339

  	
  %

  	
  13.698

  	
  %

  	
   

  	
   

  

 

8

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

4      EXPANSION OF PREMISES. 
Upon the Effective Date, the Premises shall be expanded by the addition of
Suite 402 containing approximately 5,680 rentable square feet of space in
the Building (“Suite 402”) for all purposes under the Lease; and all
references in the Lease to the “Premises” shall refer to the combination of
both the existing Premises under the Lease as heretofore amended and Suite 402
from and after the Effective Date.  The
floor plan and location of Suite 402 is shown on Exhibit A
which is attached hereto and incorporated herein by reference.  The parties agree that, upon the Effective
Date, Suite 402 shall become part of the Premises pursuant to the basic
terms specified in the Table below (as hereby amended) regarding Term, Base
Rent, Tenant’s Share of increases in Operating Expenses and Taxes, and the Base
Year for the purposes of calculating Additional Rentable payable with respect
to Suite 402.

 

4.1    Early
Occupancy. 
Notwithstanding anything to the contrary herein, Tenant shall be
permitted early entry to Suite 402 from and after the date of the parties’
execution and delivery to each other of this Second Addendum for the purpose of
installing Tenant’s telephone and data network cables and wiring, provided that
Tenant does not interfere with the performance of Landlord’s Work Suite 402
(if any); but shall not be obligated to begin paying Base Rent therefore until
the Effective Date, as specified in the Table below.

 

5      AMENDMENT OF RENT. 
From and after the Effective Date, the Base Rent reserved in § 1.6(a) of
the Lease is hereby amended to that specified in the Table in ¶ 3 above
with respect to the various spaces and time periods referenced therein.  Tenant shall pay to Landlord the first month’s
Base Rent with respect to Suite 402 upon Tenant’s execution and delivery
of this Second Addendum to Landlord.

 

6      BASE YEAR AND ADDITIONAL RENT.  As
specified in the Table above, the Base Year for the purposes of Article 4
of the Lease from and after the Effective Date shall be calendar year 2004 with respect to Suite 402.

 

7       CONDITION OF PREMISES. 
Except as provided in ¶ 7.1 below, Tenant shall accept Suite 402,
any existing Improvements in Suite 402, and the Systems and Equipment
serving the same in an “as is” condition on the Effective Date, and
Landlord shall have no obligation to improve, alter, remodel, or otherwise
modify the Suite 402 in connection with Tenant’s occupancy of the Premises
from and after the Effective Date.

 

7.1    Landlord’s
Work.  Landlord shall use reasonable
diligence in completing and preparing the Suite 402 for Tenant’s occupancy
on or before the Effective Date; provided, however, that the commencement date
for the lease of Suite 402 shall be the Effective Date, and Tenant shall
begin paying Rent therefore on the Effective Date, regardless of whether
Landlord’s Work (as defined below) is substantially completed on or before the
Effective Date or not.  The facilities,
materials, and work to be furnished, installed, and performed in Suite 402
by Landlord are referred to as the “Work.” 
Any other installations, materials, and work which may be undertaken by
or for the account of Tenant to prepare, equip, decorate, and furnish Suite 402
are referred to as the “Tenant’s Work,” which shall include the connection
and/or rewiring of Tenant’s telephone and data lines.  The parties agree that Landlord’s Work shall
consist of the following items only, to be completed at Landlord’s sole cost
and expense:

 

(i)                                     Landlord shall
re-activate the corridor in the Suite 402 wing and install
Building-standard carpet, wall covering, and light fixtures in Suite 402
wing corridor; and

 

(ii)                                  Landlord shall construct a demising wall
for Suite 402.

 

7.1.1    Occupancy
during Work.  The parties
acknowledge that Tenant may be in possession of the Premises and shall conduct
its business in the Premises during the Work contemplated under ¶ 7.1

 

9

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

above. 
Landlord shall have no liability to Tenant, nor shall Tenant’s
obligations under the Lease be reduced or abated in any manner whatsoever, by
reason of any inconvenience, annoyance, interruption, or injury to business
arising from Landlord’s performance of the Work or from Landlord’s making any
repairs or changes which Landlord is required or permitted to perform by the
Lease.  Landlord shall nevertheless use
reasonable efforts to minimize any interference with Tenant’s business in the
Premises.  Landlord agrees to use
reasonable efforts to avoid interference with Tenant’s use and occupancy of the
Premises during the performance of the Work and agrees to cause the application
of paint and any work generating unreasonable noise outside of normal business
hours.  The parties agree that Landlord
shall not be liable for any damages which Tenant may incur during the
performance of the Work, except to the extent that Tenant’s actual damages are
the result of Landlord’s negligence or wilfull misconduct.  In no circumstances shall Landlord be liable
to Tenant for business interruption, lost profits, or compensatory or
consequential damages of any kind by virtue of Landlord’s Work.  Tenant specifically agrees that any
interference with Tenant’s use or occupancy of the Premises caused by the
performance of the Work shall not constitute a constructive eviction.

 

7.1.2    Notice of
Defects.  It shall be
conclusively presumed upon Tenant’s taking actual possession of Suite 402
that the same were in satisfactory condition (except for latent defects) as of
the date of such taking of possession, unless within thirty (30) days
after the Effective Date Tenant shall give Landlord notice in writing
specifying the respects in which Suite 402 was not in satisfactory
condition.

 

7.2    Improvement
Allowance.  In addition
to bearing the cost of the Work specified in ¶ 7.1 above, Landlord agrees
to provide to Tenant an improvement allowance in the amount of Twenty-Eight Thousand Four Hundred Dollars
($28,400.00) toward the cost of any work or improvements that Tenant
may elect to install in Suite 402, subject to Article 9 of the Lease,
after the Effective Date hereof.  If
Tenant elects to implement any such Changes in Suite 402, Landlord shall
use reasonable diligence in completing the approved work in Suite 402 for
Tenant.  If required by Landlord, Tenant
agrees to enter into an appropriate work letter agreement to reflect the
parties’ agreement with respect to any such Changes in Suite 402 and the
expenditure of the improvement allowance granted under this ¶ 7.2.

 

8      Suite 402  Termination Right.  Notwithstanding anything to the contrary in
the Lease as herein amended, Tenant shall have the right to terminate the Lease
with respect to Suite 402 only effective on September 30,
2009, upon written notice given to Landlord not less than six (6) months
and not more than nine (9) months prior to such termination date.  If Tenant exercises such termination right,
Tenant shall pay to Landlord upon exercise of its termination right, together
with Tenant’s written notice of exercise, a termination fee in the amount of Fifty-Five Thousand Two Hundred Thirteen Dollars and Twenty Cents
($55,213.20).  If Tenant
exercises its termination right as herein provided, the Lease with respect to Suite 402
only shall terminate on the effective date of such termination with the same
effect as if the Term of the Lease had expired with respect to Suite 402
only.  In addition to paying the
termination fee to Landlord, Tenant agrees to pay to Landlord upon receipt of
Landlord’s bill therefor the reasonable cost to Landlord of constructing a new
demising wall to separate Suite 402 from Suite 401 following the
effective date of the termination provided for herein, if Tenant exercises its
termination right with respect to Suite 402 only.

 

9      SECURITY DEPOSIT. 
Tenant’s Security Deposit required under § 5.1 of the Lease shall
remain unchanged in consequence of the parties’ execution and delivery of this
Second Addendum.

 

10   EXTENSION OPTIONS.  The Extension
Option granted to Tenant under § 1.5.1 of the Lease shall apply to Suite 402
equally with the rest of the Premises, as herein and heretofore amended,
provided that

 

10

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Tenant has not exercised its termination right under ¶ 8 above
with respect to Suite 402 only prior to Tenant’s exercise of such
Extension Option.

 

11   PARKING.  The number of parking spaces designated for
Tenant’s use under § 27.1 of the Lease shall be increased from and after
the Effective Date from the number stated in the Lease to up to a maximum of
Two Hundred Sixteen (216) parking spaces on a non-exclusive basis in the area(s) designated
by Landlord for parking in the Building’s parking lots.

 

12   NO DISCLOSURE.  Tenant agrees that it shall not
disclose any of the matters set forth in this Second Addendum or disseminate or
distribute any information concerning the terms, details, or conditions hereof
to any person, firm, or entity without obtaining the express written approval
of Landlord.

 

13   SURVIVAL.  Warranties, representations, agreements, and
obligations contained in this Second Addendum shall survive the execution and
delivery of this Second Addendum and shall survive any and all performances in
accordance with this Second Addendum.

 

14   COUNTERPARTS.  This Second Addendum may be
executed in any number of counterparts, which each severally and all together
shall constitute one and the same Second Addendum.

 

15   ATTORNEYS’ FEES.  If any party obtains a
judgement against any other party or parties by reason of breach of this Second
Addendum, reasonable attorneys’ fees and costs as fixed by the court shall be
included in such judgement against the losing party or parties.

 

16   SUCCESSORS.  This Second Addendum and the terms and
provisions hereof shall inure to the benefit of and be binding upon the heirs,
successors, and assigns of the parties.

 

17   AUTHORITY.  Each of the individuals executing this Second
Addendum represents and warrants that he or she is authorized to execute this
Second Addendum on behalf of the party for whom he or she is executing this
Second Addendum and that by his or her signature such party is legally bound by
the terms, covenants, and conditions of this Second Addendum.

 

18   GOVERNING LAW.  This Second Addendum shall be
construed and enforced in accordance with the laws of the State of California.

 

19   CONTINUING VALIDITY OF LEASE.  Except as
expressly modified herein, the Lease remains in full force and effect, and its
provisions shall apply equally to the Expansion Space as to the remainder of
the Premises, including (i) Tenant’s termination right under § 1.5.2
of the Lease with respect to Suite 400, of which the Expansion Space shall
be deemed a part of the purposes of exercising Tenant termination right
thereunder; (ii) the exercise of Tenant’s Extension Option under
§ 1.5.1 of the Lease; and (iii) Tenant’s Security Deposit stated
under § 5.1 of the Lease, which shall remain unchanged by this Second
Addendum.

 

20   CONFLICTS.  In the event of any conflict between the
provisions of the Lease and those of this Second Addendum, the terms and
provisions of this Second Addendum shall control.

 

21   WHOLE AGREEMENT.  The mutual obligations of the
parties as provided herein are the sole consideration for this Second Addendum,
and no representations, promises, or inducements have been made by the parties
other than as appear in this Second Addendum, which supersedes any previous
negotiations.  There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Second Addendum.  This Second Addendum may not be amended
except in writing signed by all the parties.

 

11

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

In
witness whereof, the
parties have executed this Second Addendum as of the date first above written.

 

	
  Landlord:

  	
   

  	
  Tenant:

  
	
   

  	
   

  	
   

  
	
  KASHIWA FUDOSAN AMERICA, INC.,

  	
   

  	
  ONCOLOGY THERAPEUTICS NETWORK JOINT VENTURE,
  L.P.,

  
	
  a California corporation

  	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ HARU TAKEHANA

  	
   

  	
  By:

  	
  Oncology Therapeutics Network Joint  venture, L.P.,

  
	
   

  	
  Haru Takehana, Director

  	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ CHUCK SLOAN

  
	
   

  	
   

  	
   

  	
  Chuck Sloan, President

  

 

12

 

 

 

 

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT B

 

FLOOR
PLANS

 

[Graphic
of Floor Plan]

 

 

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT C

 

PROPOSED
PLAN FOR IMPROVEMENTS

 

[Graphic
of Floor Plan]

 

 

 

[*] =
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

EXHIBIT D

 

DISCLOSURE LIST

 

Hazardous
Materials:  To
Sublandlord’s actual knowledge, there are no Hazardous Materials on the
Property (other than Hazardous Materials incidental to general office uses).

 

Material
Physical Defects:  There is a
leak along the windows in the north-east wing of the building (“A Wing”).
Building Management is aware of it and is working to repair the problem.

 

 

 

 

 

[*] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT E

 

MASTER
LANDLORD CONSENT

 

Master Landlord hereby
acknowledges receipt of a copy of this Sublease, and consents to the terms and
conditions of this Sublease.  By this
consent, Master Landlord shall not be deemed in any way to have entered the Sublease
or to have consented to any further assignment or sublease. Master Landlord
further agrees that, notwithstanding anything to the contrary in the Master
Lease Agreement:

 

(a)                                  Master Landlord shall deliver to
Subtenant at the address set forth in the Sublease notices of any defaults
under the Master Lease Agreement at the same time such notices are sent to
Sublandlord as set forth in the Master Lease Agreement and shall permit
Subtenant to cure such defaults.

 

(b)                                 Master Landlord agrees that the release
and waiver of subrogation in Section 24 of the Sublease shall apply as
between Master Landlord and Subtenant.

 

(c)                                  In the event that the Master Lease
Agreement terminates prior to the expiration of the term thereof, the Sublease
shall continue in full force and effect as a direct lease between Master
Landlord and Subtenant upon all of the terms, covenants and conditions of the
Sublease.

 

(d)                                 Subtenant may, without Master Landlord’s
prior written consent, sublet the Premises or assign the Sublease as described
in Section 17.12 of the Master Lease Agreement.

 

	
  MASTER LANDLORD:

  	
   

  
	
  KASHIWA FUDOSAN AMERICA, INC.,

  	
   

  
	
  a California corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
  TAK Development Inc., a California corporation

  	
   

  
	
  Name:

  	
  Tory Iwai, Vice President

  	
   

  
	
  Its:

  	
  Attorney-in-Fact

  	
   

  
	
  Signed:

  	
  /s/ TORY IWAI

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