Document:

exv10w6

EXHIBIT
10.6

Lease Agreement

Basic Lease Information

	 	 	 
	Lease Date:

	 	September 28, 1999
	 
	 	 
	Landlord:

	 	WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,
	 

	 	a Delaware limited partnership
	 
	 	 
	Landlord’s Address:

	 	c/o Legacy Partners Commercial, Inc.
	 

	 	101 Lincoln Centre Drive, Fourth Floor
	 

	 	Foster City, California 94404-1167
	 
	 	 
	Tenant:

	 	Foundry Networks, Inc.,
	 

	 	a California corporation
	 
	 	 
	Tenant’s Address:

	 	2100 Gold Street
	 

	 	San Jose, California 95002
	 
	 	 
	Premises:

	 	70,755 rentable square feet as shown on Exhibit A
	 
	 	 
	Premises Address:

	 	2100 Gold Street
	 

	 	San Jose, California 95002
	 
	 	 
	Building:

	 	Building A, consisting of 70,755 rentable square
feet
	 
	 	 
	(Park’s tax parcels):

	 	APN 015-34-27, 015-34-28, 015-34-77, 015-34-78
	 
	 	 
	Park: Legacy Tech Park@237:

	 	Approximately 302,186 rentable square feet
	 
	 	 
	Term((P)2):

	 	January 1, 2000 (“Commencement Date”), through
December 31, 2005 (“Expiration Date”)
	 
	 	 
	Base Rent ((P)3):

	 	No Dollars ($0.00) per month commencing January 1,
2000 through March 31, 2000.
	 
	 	 
	Advance Rent ((P)3):

	 	Seventy One Thousand and 00/100 Dollars ($71,000.00).
	 
	 	 
	Adjustments to Base Rent:

	 	Effective April 1, 2000, the Base Rent shall
increase to $71,000.00 per month ($1.003 per
rentable sf) Effective July 1, 2000, the Base Rent
shall increase to $127,359.00 per month ($1.80 per
rentable sf) Effective January 1, 2001, the Base
Rent shall increase to $131,816.57 per month
($1.863 per rentable sf) Effective January 1, 2002,
the Base Rent shall increase to $136,430.14 per
month ($1.928 per rentable sf) Effective January 1,
2003, the Base Rent shall increase to $141,205.20
per month ($1.996 per rentable sf) Effective
January 1, 2004, the Base Rent shall increase to
$146,147.38 per month ($2.065 per rentable sf)

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	 	Effective January 1, 2005, the Base Rent shall
increase to $151,274.19 per month ($2.138 per
rentable sf)
	 
	 	 
	 

	 	Notwithstanding the foregoing Annual Adjustment
Dates, the actual Annual Adjustments to Base Rent
shall occur on the annual anniversary of the
Commencement Date.
	 
	 	 
	Security Deposit ((P)4):

	 	One Hundred Sixty Nine Thousand One Hundred Four
and 00/100 Dollars ($169,104.00) subject to Section
4 herein.
	 
	 	 

	 	 	 
	*Tenant’s Share of Operating Expenses ((P)6.1):

	 	23.41% of the Park
	*Tenant’s Share of Tax Expenses ((P)6.2):

	 	23.41% of the Park
	*Tenant’s Share of Common Area Utility Costs ((P)7):

	 	23.41% of the Park
	*Tenant’s Share of Utility Expenses ((P)7):

	 	100% of the Building

 

			
	*	 	The amount of Tenant’s Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.

	 	 	 
	Permitted Uses ((P)9):

	 	The Premises shall be used solely for sales, marketing,
design, research and development, light manufacturing,
office and administration of networking equipment
products and for no other purposes without Landlord’s
prior written consent, but only to the extent permitted
by the City of San Jose and all agencies and
governmental authorities having jurisdiction thereof.
	 
	 	 
	Unreserved
Parking Spaces:

	 	Two hundred forty (240) non-exclusive and non-designated
spaces
	 
	 	 
	Broker ((P)38):

	 	Cornish & Carey Commercial for Tenant
	 

	 	BT Commercial for Landlord
	 
	 	 
	Exhibits:

	 	Exhibit A — Premises, Building and/or Park
	 

	 	Exhibit B — Tenant Improvements
	 

	 	Exhibit C — Rules and Regulations
	 

	 	Exhibit D — Covenants, Conditions and
Restrictions (Intentionally omitted)
	 

	 	Exhibit E — Hazardous Materials Disclosure
Certificate — Example
	 

	 	Exhibit F — Change of Commencement Date — Example
	 

	 	Exhibit G — Tenant’s Initial Hazardous Materials
Disclosure Certificate
	 

	 	Exhibit H — Sign Criteria
	 

	 	Exhibit I — Subordination, Non-Disturbance and
Attornment Agreement
	 
	 	 
	Addenda:

	 	Addendum 1: Option to Extend the Lease 

Addendum 2: Right of First Refusal

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Table of Contents

	 	 	 	 	 	 	 
	Section	 	Page	 
	 
	 	 	 	 	 	 
	1.
	 	Premises
	 	 	5	 
	 
	 	 	 	 	 	 
	2.
	 	Occupancy; Adjustment of Commencement Date
	 	 	5	 
	 
	 	 	 	 	 	 
	3.
	 	Rent
	 	 	7	 
	 
	 	 	 	 	 	 
	4.
	 	Security Deposit
	 	 	7	 
	 
	 	 	 	 	 	 
	5.
	 	Condition of Premises; Improvements
	 	 	8	 
	 
	 	 	 	 	 	 
	6.
	 	Additional Rent
	 	 	8	 
	 
	 	 	 	 	 	 
	7.
	 	Utilities and Services
	 	 	13	 
	 
	 	 	 	 	 	 
	8.
	 	Late Charges
	 	 	14	 
	 
	 	 	 	 	 	 
	9.
	 	Use of Premises
	 	 	15	 
	 
	 	 	 	 	 	 
	10.
	 	Alterations; Surrender of Premises
	 	 	17	 
	 
	 	 	 	 	 	 
	11.
	 	Repairs and Maintenance
	 	 	19	 
	 
	 	 	 	 	 	 
	12.
	 	Insurance
	 	 	20	 
	 
	 	 	 	 	 	 
	13.
	 	Waiver of Subrogation
	 	 	23	 
	 
	 	 	 	 	 	 
	14.
	 	Limitation of Liability and Indemnity
	 	 	23	 
	 
	 	 	 	 	 	 
	15.
	 	Assignment and Subleasing
	 	 	24	 
	 
	 	 	 	 	 	 
	16.
	 	Ad Valorem Taxes
	 	 	27	 
	 
	 	 	 	 	 	 
	17.
	 	Subordination
	 	 	27	 
	 
	 	 	 	 	 	 
	18.
	 	Right of Entry
	 	 	28	 
	 
	 	 	 	 	 	 
	19.
	 	Estoppel Certificate
	 	 	29	 
	 
	 	 	 	 	 	 
	20.
	 	Tenant’s Default
	 	 	 	 
	 
	 	 	 	 	 	 

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	Section	 	Page	 
	 
	 	 	 	 	 	 
	21.
	 	Remedies for Tenant’s Default
	 	 	 	 
	 
	 	 	 	 	 	 
	22.
	 	Holding Over
	 	 	 	 
	 
	 	 	 	 	 	 
	23.
	 	Landlord’s Default
	 	 	 	 
	 
	 	 	 	 	 	 
	24.
	 	Parking
	 	 	 	 
	 
	 	 	 	 	 	 
	25.
	 	Sale of Premises
	 	 	 	 
	 
	 	 	 	 	 	 
	26.
	 	Waiver
	 	 	 	 
	 
	 	 	 	 	 	 
	27.
	 	Casualty Damage
	 	 	29	 
	 
	 	 	 	 	 	 
	28.
	 	Condemnation
	 	 	30	 
	 
	 	 	 	 	 	 
	29.
	 	Environmental Matters/Hazardous Materials
	 	 	30	 
	 
	 	 	 	 	 	 
	30.
	 	Financial Statements
	 	 	35	 
	 
	 	 	 	 	 	 
	31.
	 	General Provisions
	 	 	35	 
	 
	 	 	 	 	 	 
	32.
	 	Signs
	 	 	37	 
	 
	 	 	 	 	 	 
	33.
	 	Mortgagee Protection
	 	 	38	 
	 
	 	 	 	 	 	 
	34.
	 	Quitclaim
	 	 	38	 
	 
	 	 	 	 	 	 
	35.
	 	Modifications for Lender (Intentionally omitted)
	 	 	38	 
	 
	 	 	 	 	 	 
	36.
	 	Warranties of Tenant
	 	 	38	 
	 
	 	 	 	 	 	 
	37.
	 	Compliance with Americans with Disabilities Act
	 	 	39	 
	 
	 	 	 	 	 	 
	38.
	 	Brokerage Commission
	 	 	40	 
	 
	 	 	 	 	 	 
	39.
	 	Confidentiality
	 	 	40	 
	 
	 	 	 	 	 	 
	40.
	 	Quiet Enjoyment
	 	 	40	 
	 
	 	 	 	 	 	 
	41.
	 	Landlord’s Ability to Perform Tenant’s Unperformed Obligations
	 	 	40	 
	 
	 	 	 	 	 	 
	42.
	 	Collateral for Performance of Lease Obligations
	 	 	41	 
	 
	 	 	 	 	 	 
	43.
	 	Satellite Dish
	 	 	43	 
	 
	 	 	 	 	 	 
	44.
	 	Tenant’s Ability to Perform Landlord’s  Unperformed Obligations
	 	 	44	 

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NNN R&D Development Landlord TI

Lease Agreement

Date: The Basic Lease Information set forth on Page 1 and this Lease are
and shall be construed as a single instrument.

1. Premises

Landlord hereby leases the Premises to Tenant upon the terms and conditions
contained herein. Tenant shall have the right to use, on a non-exclusive basis,
parking areas and ancillary facilities located within the Common Areas of the
Park, subject to the terms of this Lease. Tenant further agrees that the
number of rentable square feet of the Building and the Park may subsequently
change during the Term of this Lease commensurate with any physical
modifications by Landlord, and Tenant’s Share shall accordingly change. In
addition, Tenant shall have the exclusive use of the loading dock area located
between the Building and Building B, as outlined on Exhibit A attached hereto.

2. Occupancy; Adjustment of Commencement Date

     2.1 If on the Commencement Date, Landlord has not delivered possession
of the Premises with the Tenant Improvements Substantially Completed (as defined
in Exhibit B hereto), Landlord shall not be subject to any liability nor shall
the validity of the Lease be affected; provided, however, the Lease Term and the
obligation to pay Rent, except as set forth in the Basic Lease Information,
shall commence on the date on which Landlord has Substantially Completed the
Tenant Improvements in accordance with the provisions of Exhibit B hereto and
the annual Adjustments to Base Rent shall be adjusted accordingly.
Notwithstanding the foregoing, in the event Landlord cannot deliver to Tenant
possession of the Premises with all Tenant Improvements Substantially Complete
(as defined in Exhibit B) by February 1, 2000 (“Outside Date”) (subject to Force
Majeure Delays and Tenant Delays, as such terms are defined in Exhibit B, in
which event the Outside Date shall be extended commensurately by the period of
time attributable to such delays), Tenant shall receive a credit against Base
Rent equal to one (1) day’s Base Rent for each day beyond the Outside Date that
possession of the Premises is delivered to Tenant with the Tenant Improvements
Substantially Complete, but Landlord shall neither be subject to any other
liability nor shall the validity of the Lease be affected. In the event Landlord
is unable to obtain a building permit (“Permit”) for the Tenant Improvements on
or before December 31, 1999, then, following such date,

Landlord may terminate this Lease upon written notice delivered to Tenant by
January 10, 2000. Tenant acknowledges and agrees that Tenant’s sole and
exclusive remedy for Landlord’s failure to deliver possession of the Premises to
Tenant with the Tenant Improvements Substantially Complete on or before the
Outside Date (whether due to the failure of Landlord to Substantially Complete
the Tenant Improvements, to obtain the Permit or otherwise) shall be to accept a

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credit to Base Rent equal to one (1) day of Base Rent for each day beyond the
Outside Date that possession of the Premises is delivered to Tenant with the
Tenant Improvements Substantially Complete, provided however, the maximum credit
to Tenant for any delay due to not receiving the initial building permit from
the City of San Jose as scheduled, shall be thirty (30) days. Upon Landlord’s
delivery to Tenant of possession of the Premises with the Tenant Improvements
Substantially Complete, Tenant shall promptly deliver written notice to Landlord
confirming same (however, any failure by Tenant to deliver to Landlord such
written notice shall not affect the effectiveness of this Lease). If the
commencement date and/or the expiration date of this Lease is other than the
Commencement Date and/or Expiration Date specified herein, Landlord and Tenant
shall execute a written amendment to this Lease, substantially in the form of
Exhibit F hereto, wherein the parties shall specify the actual commencement
date, expiration date and the date on which Tenant is to commence paying Rent.
The word “Term” whenever used herein refers to the initial term of this Lease
and any extension thereof.

     2.2 Within three (3) business days after the Substantial Completion of
the Tenant Improvements, representatives of Landlord and Tenant shall make a
joint inspection of the Tenant Improvements and the results of such inspection
shall be set forth in a written list specifying the incomplete items as well as
those items for which corrections need to be made (the “Punchlist Items”).
Landlord and Tenant shall promptly (by no later than three (3) business days
thereafter) and in good faith approve the written list of Punchlist Items.
Landlord shall use commercially reasonable efforts to cause the Punchlist Items
to be promptly completed and/or corrected, as applicable. The performance of
the work associated with the Punchlist Items shall be performed in such a manner
so as not to preclude or substantially prevent Tenant’s ability to conduct its
operations in the Premises. Upon the completion of the Punchlist Items, to
Tenant’s reasonable satisfaction, Tenant shall immediately notify Landlord in
writing that such items have been completed to Tenant’s reasonable satisfaction.
In addition to the Punchlist Items, Landlord shall also use commercially
reasonable efforts to cause the general contractor to correct any other
deficiencies or defects in the Tenant Improvements during the thirty (30) day
period following Substantial Completion of the Tenant Improvements. Except as
set forth below, if Tenant fails to timely deliver to Landlord any such written
notice of the aforementioned deficiencies or defects within said 30-day period,
Landlord shall have no obligation to perform any such work thereafter. Landlord
and the General Contractor (as defined in Exhibit B) shall provide Tenant with a
customary warranty for the Tenant Improvements for a period of one (1) year
following Substantial Completion; provided, however, any claim by Tenant under
said warranty against General Contractor must be made by Tenant in writing
within said one (1) year period and must include the specific nature of the
problem. Tenant shall have the right , together with Landlord, to concurrently
enforce any warranties made by the General Contractor or material suppliers in
favor of Landlord with respect to the construction of the Tenant Improvements.
In addition, Tenant shall be subrogated to the rights of Landlord against the General
Contractor to the extend Tenant has paid amounts to Landlord to correct defects or
deficiencies in the construction of the Tenant Improvements.

6

 

     2.3 If, at any time, Tenant is in material default of any term,
condition or provision of this Lease beyond any applicable cure period, any such
waiver by Landlord of Tenant’s requirement to pay Rent shall be null and void
and Tenant shall immediately pay to Landlord all Rent so waived by Landlord.

3. Rent

     On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, the Advance Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Rent),
the Security Deposit, and all insurance certificates evidencing the insurance
required to be obtained by Tenant under Section 12 of this Lease. Tenant agrees
to pay Landlord the Base Rent, without prior notice or demand, abatement,
offset, deduction or claim, in advance at Landlord’s Address on the Commencement
Date and thereafter on the first (1st) day of each month throughout the balance
of the Term of the Lease. In addition to the Base Rent, Tenant shall pay
Landlord in advance on the Commencement Date and thereafter on the first (1st)
day of each month throughout the balance of the Term of this Lease, as
Additional Rent, Tenant’s Share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses. The term “Rent” whenever used herein
refers to the aggregate of all these amounts. The Rent for any fractional part
of a calendar month at the commencement or termination of the Lease Term shall
be a prorated amount of the Rent for a full calendar month based upon the
actual number of days in such month. The prorated Rent shall be paid on the
Commencement Date and the first day of the calendar month in which the date of
expiration or termination occurs, as the case may be.

4. Security Deposit

     Simultaneously with Tenant’s execution and delivery of this Lease, Tenant
shall deliver to Landlord, as a Security Deposit for the performance by Tenant
of its obligations under this Lease, the amount specified in the Basic Lease
Information. If Tenant is in material default, Landlord may, but without
obligation to do so, use the Security Deposit, or any portion thereof, to cure
the material default or to compensate Landlord for all damages sustained by
Landlord resulting from Tenant’s default. Tenant shall, immediately on demand,
pay to Landlord a sum equal to the portion of the Security Deposit so applied or
used so as to replenish the amount of the Security Deposit held to increase such
deposit to the amount initially deposited with Landlord. In the event Tenant
has materially defaulted more than three (3) times during the Term, Landlord
may require an increase in the amount of the Security Deposit required hereunder
for the then balance of the Lease Term to an amount equal to two (2) times the
amount of the Security Deposit set forth in the Basic Lease Information and
Tenant shall, immediately on demand, pay to Landlord additional sums in the
amount of such increase. Within thirty (30) days after the expiration or
earlier termination of this Lease, Landlord shall return the Security Deposit to
Tenant, less such amounts as are reasonably necessary to remedy Tenant’s
material default(s) hereunder or to otherwise restore and repair the Premises to
a clean and safe condition, reasonable wear and tear excepted. If the cost to
restore and repair the Premises exceeds the amount of the Security Deposit,
Tenant shall promptly deliver to Landlord any and all of such excess sums as
reasonably determined by Landlord. Landlord shall not be required to keep the

7

 

Security Deposit separate from other funds, and, unless otherwise required by
law, Tenant shall not be entitled to interest on the Security Deposit. In no
event or circumstance shall Tenant have the right to any use of the Security
Deposit and, specifically, Tenant may not use the Security Deposit as a credit
or to otherwise offset any payments required hereunder, including, but not
limited to, Rent or any portion thereof. In the event Landlord draws down the
Letter of Credit in an amount which exceeds the amounts required to cure
Tenant’s material defaults under this Lease, such excess amounts shall be
treated at Landlord’s option, either (i) as part of the Security Deposit for purposes of
this Lease or (ii) be returned to the Issuer of the Letter of Credit. The Letter
of Credit shall be amended to reflect the addition of such amounts to the Letter
of Credit and Tenant shall, as required by Section 42 of this Lease, provide
Landlord with a new or additional Letter of Credit such that Landlord shall hold
an original Letter of Credit in an amount equal to the Letter of Credit
originally delivered to Landlord.

5. Condition of Premises; Improvements

     Tenant hereby agrees to accept the Premises upon Landlord’s Substantial
Completion of the Tenant Improvements as suitable for Tenant’s intended use and
as then being in good operating order, condition and repair in its then “AS IS”
condition, except for the (i) correction of any Punchlist Items in accordance
with the provisions of Section 2.2 hereof, (ii) the thirty (30) day period
referenced in 2.2 above with respect to defects or deficiencies, and (iii) and
Landlord shall deliver the electrical, plumbing and HVAC systems in good working
conditions for a period of ninety (90) days. The Tenant Improvements (as such
term is defined in Exhibit B hereto) shall be installed by Landlord in
accordance with the terms, conditions, criteria and provisions set forth in
Exhibit B. Except as otherwise expressly set forth in this Lease, by taking
possession of the Premises with the Tenant Improvements Substantially Completed,
Tenant shall be deemed to have then accepted the Premises in good, clean and
completed condition and state of repair. Landlord and Tenant hereby agree to
and shall be bound by the terms, conditions and provisions of Exhibit B. Tenant
acknowledges and agrees that neither Landlord nor any of Landlord’s agents,
representatives or employees has made any representations as to the suitability,
fitness or condition of the Premises for the conduct of Tenant’s business or for
any other purpose, including without limitation, any storage incidental thereto.
Any exception to the foregoing provisions must be made by express written
agreement by both parties. In addition, Landlord shall provide one roll up door
at Landlord’s sole cost and expense in the location shown on Exhibit A.

6. Additional Rent

     It is intended by Landlord and Tenant that this Lease be a “triple net
lease.” The costs and expenses described in this Section 6 and all other sums,
charges, costs and expenses specified in this Lease other than Base Rent are to
be paid by Tenant to Landlord as additional rent (collectively, “Additional
Rent”).

     6.1 Operating Expenses: In addition to the Base Rent set forth in
Section 3, Tenant shall pay Tenant’s Share of all Operating Expenses as

8

 

Additional Rent. The term “Operating Expenses” as used herein shall mean the
amounts paid or payable by Landlord in connection with the management,
maintenance, repair and operation of the Premises and the Building , and where
applicable, of the Park. These Operating Expenses may include, but are not
limited to, Landlord’s cost of:

     6.1.1 repairs to, and maintenance of, the non-structural portions of the
roof, the roof membrane and the non-structural elements of the perimeter
exterior walls of the Building;

     6.1.2 maintaining the outside paved area, landscaping and other common
areas of the Park. The term “Common Areas” shall mean all areas and facilities
within the Park exclusive of the Premises and the other portions of the Park
leasable exclusively to other tenants. The Common Areas include, but are not
limited to, interior lobbies, mezzanines, parking areas, access and perimeter
roads, sidewalks, rail spurs, landscaped areas and similar areas and facilities;

     6.1.3 annual insurance premium(s) for insuring against fire and extended
coverage (including, if Landlord elects, “all risk” or “special purpose”
coverage) and all other insurance, including, but not limited to, earthquake,
flood and/or surface water endorsements for the Building and the Park (including
the Common Areas), rental value insurance against loss of Rent in an amount
equal to the amount of Rent for a period of at least nine (9) months commencing
on the date of loss, and subject to the provisions of Section 27 below, any
deductible;

     6.1.4 Landlord’s cost of: (i) modifications and/or new improvements to the
Building, the Common Areas and/or the Park occasioned by any rules, laws or
regulations effective subsequent to the Lease Date; (ii) reasonably necessary
replacement improvements to the Building, the Common Areas and the Park after
the Lease Date; and (iii) new improvements to the Building, the Common Areas
and/or the Park to the extent that they reduce operating costs or improve
life/safety conditions, all as reasonably determined by Landlord, in its sole
discretion; provided, however, if any of the foregoing are in the nature of
capital improvements, then the cost of such capital improvements shall be
amortized on a straight-line basis over a reasonable period, which shall be the
period of time specified under generally accepted accounting principles as the
estimated useful life of such modifications, new improvements or replacement
improvements in question (at an interest rate as reasonably determined by
Landlord), and Tenant shall pay Tenant’s Share of the monthly amortized portion
of such costs (including interest charges) as part of the Operating Expenses
herein;

     6.1.5 preventative maintenance and repair contracts including, but not
limited to, contracts for elevator systems and heating, ventilation and air
conditioning systems, lifts for disabled persons, and trash or refuse
collection, if Landlord elects to so procure;

     6.1.6 security and fire protection services for the Building and/or the
Park, as the case may be, if in Landlord’s sole but reasonable discretion such
services are provided;

9

 

     6.1.7 supplies, equipment, rental equipment and other similar items used
in the operation and/or maintenance of the Park;

     6.1.8 the repairs and maintenance items set forth in Section 11.2 below;

     6.1.9 any and all levies, charges, fees and/or assessments payable to any
applicable owner’s association or similar body; and

     6.1.10 the management and administration of all or any portion of the
Premises, the Building, and/or the Park, including without limitation, a
property management fee (based upon a percentage of all Rent, including Tax
Expenses), accounting, auditing, billing, postage, salaries and benefits for
clerical and supervisory employees, whether located on the Park or off-site,
payroll taxes and legal and accounting costs, and all fees, licenses and permits
related to the operation and management of the Park.

     Notwithstanding anything to the contrary contained hereon, for purposes of
this Lease, the term “Operating Expenses” shall not include the following:

     (a) Costs (including permit, license, and inspection fees) incurred in
renovating improving decorating, painting, or redecorating vacant space or space
for other tenants within the Park;

     (b) Costs incurred because Landlord or another tenant actually violated the
terms of any lease for premises within the Building and/or Park;

     (c) Legal and auditing fees (other than those fees reasonably incurred in
connection with the maintenance and operation of the Building and/or Park),
leasing commissions, advertising expenses, and other costs incurred in
connection with the original development or original leasing of the Building
and/or Park or future re-leasing of the Building and/or Park;

     (e) Any items for which Landlord is actually reimbursed or by direct
reimbursement by any other tenant of the Building or Park;

     (f) Costs of repair or other work necessitated by fire, windstorm or other
casualty (excluding any commercially reasonable deductibles) and/or costs of
repair or other work necessitated by the exercise of the right of eminent domain
to the extent insurance proceeds or a condemnation award, as applicable, is
actually received by Landlord for such purposes; provided such costs of repairs
or other work shall be paid by the parties in accordance with the provisions of
Sections 27 and 28 below;

     (g) Other than any interest charges for capital improvements referred to in
Section 6.1.4 hereinabove, any interest or payments on any financing for the
Building or the Park, interest and penalties incurred as a result of Landlord’s
late payment of any invoice (provided that Tenant pays Tenant’s Share of
Operating Expenses and Tax Expenses to Landlord when due as set forth herein),
and any bad debt loss, rent loss or reserves for same;

10

 

     (h) Costs associated with the investigation and/or remediation of Hazardous
Materials (hereafter defined) present in, on or about the Premises, the Building
or the Park, unless such costs and expenses are the responsibility of Tenant as
provided in Section 29 of this Lease, in which event such costs and expenses
shall be paid solely by Tenant in accordance with the provisions of Section 29
of this Lease;

     (i) Costs of correcting defects in the initial design or construction of
the Shell Improvements or the repair or replacement of any original materials
and equipment as a result of such defects (collectively, “Defect Costs”), as long as
such defects are covered by warranties from the contractors performing such work
and Landlord has actually received compensation therefor; provided, in the event such
Defect Costs and such Defect Costs constitute capital improvements, are not covered
by warranties and/or Landlord has not received compensation therefor, such Defect
Costs shall be included in Operating Expenses and amortized on the basis set forth in
Section 6.1 of the Lease.

     (j) Landlord’s cost for the repairs and maintenance items set forth in
Section 11.3 below;

     (k) Overhead, fee and profit paid to subsidiaries or affiliates of Landlord
for management services or materials to the extent that the cost of those items
would not have been paid had the services and materials been provided by
unaffiliated parties on a competitive basis; and

     (l) Depreciation of the Building or any improvements situated in the Park.

     6.2 Tax Expenses: In addition to the Base Rent set forth in Section 3,
Tenant shall pay Tenant’s Share of all real property taxes applicable to the
Park and one hundred percent (100%) of all personal property taxes now or
hereafter assessed or levied against the Premises or Tenant’s Property (defined
below). Tenant shall also reimburse and pay Landlord, as Additional Rent, within
ten (10) days after demand therefor, one hundred percent (100%) of (i) any
increase in real property taxes attributable to any and all Alterations (defined
below), Tenant Improvements, fixtures, equipment or other improvements of any
kind whatsoever placed in, on or about the Premises for the benefit of, at the
request of, or by Tenant, and (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, repair, use or
occupancy by Tenant of the Premises or any portion of the Building. The term
“Tax Expenses” shall mean and include, without limitation, any form of tax and
assessment (general, special, supplemental, ordinary or extraordinary),
entitlement fees, allocation fees, sewer use fees and/or similar fees or
charges, commercial rental tax, payments under any improvement bond or bonds,
license fees, license tax, business license fee, rental tax, transaction tax or
levy imposed by any authority having the direct or indirect power of tax
(including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement district thereof) as
against any legal or equitable interest of Landlord in the Premises, the
Building or the Park or any other tax, fee, or excise, however described,
including, but not limited to, any value added tax, or any tax imposed in
substitution (partially or totally) of any tax previously included within the

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definition of real property taxes, or any additional tax the nature of which was
previously included within the definition of real property taxes. The term “Tax
Expenses” shall not include any (i) franchise, estate, inheritance, net income,
or excess profits tax imposed upon Landlord, (ii) a penalty or fee imposed as a
result of Landlord’s failure to pay Tax Expenses when due or (iii) any item
included in Operating Expenses.

     6.3 Payment of Expenses: Landlord shall estimate Tenant’s Share of the
Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, and
thereafter on the first (1st) day of each month throughout the remaining months
of such calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year during the Term of this Lease and Tenant shall
pay one-twelfth (1/12th) of such estimated amount as Additional Rent hereunder
on the first (1st) day of each month during such calendar year and for each
ensuing calendar year throughout the Term of this Lease. Tenant’s obligation to
pay Tenant’s Share of Operating Expenses and Tax Expenses shall survive the
expiration or earlier termination of this Lease.

     6.4 Annual Reconciliation: By May 1st of each calendar year, or as soon
thereafter as reasonably possible, Landlord shall furnish Tenant with an
accounting of actual and accrued Operating Expenses and Tax Expenses. Within
thirty (30) days of Landlord’s delivery of such accounting, Tenant shall pay to
Landlord the amount of any underpayment. Notwithstanding the
foregoing, failure by Landlord to give such accounting by
such date shall not constitute a waiver by Landlord of its right to collect any
of Tenant’s underpayment at any time. Landlord shall credit the amount of any
overpayment by Tenant toward the next estimated monthly installment(s) falling
due, or where the Term of the Lease has expired, refund the amount of
overpayment to Tenant. If the Term of the Lease expires prior to the annual
reconciliation of expenses Landlord shall have the right to reasonably estimate
Tenant’s Share of such expenses, and if Landlord determines that an underpayment
is due, Tenant hereby agrees that Landlord shall be entitled to deduct such
underpayment from Tenant’s Security Deposit. If Landlord reasonably determines
that an overpayment has been made by Tenant, Landlord shall refund said
overpayment to Tenant as soon as practicable thereafter. Notwithstanding the
foregoing, failure of Landlord to accurately estimate Tenant’s Share of such
expenses or to otherwise perform such reconciliation of expenses, including
without limitation, Landlord’s failure to deduct any portion of any underpayment
from Tenant’s Security Deposit, shall not constitute a waiver of Landlord’s
right to collect any of Tenant’s underpayment at any time during the Term of the
Lease or at any time after the expiration or earlier termination of this Lease.

     6.5 Audit: After delivery to Landlord of at least thirty (30) days prior
written notice, Tenant, at its sole cost and expense through any accountant
designated by it, shall have the right to examine and/or audit the books and
records evidencing such costs and expenses for the previous one (1) calendar
year, during Landlord’s reasonable business hours and not more frequently than
once during any calendar year. Any such accounting firm designated by Tenant may
not be compensated on a contingency fee basis. The results of any such audit

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(and any negotiations between the parties related thereto) shall be maintained
strictly confidential by Tenant and its accounting firm and shall not be
disclosed, published or otherwise disseminated to any other party other than to
Landlord and its authorized agents. Landlord and Tenant shall use their best
efforts to cooperate and promptly resolve any discrepancies between Landlord and
Tenant in the accounting of such costs and expenses. If through such audit it is
determined that there is a discrepancy of more than six percent (6%), then
Landlord shall reimburse Tenant for the reasonable accounting costs and expenses
incurred by Tenant in performing such audit including Tenant’s in-house or
outside auditors or accountants. However, if through such audit it is determined
that there is a discrepancy of six percent (6%) or less, then Tenant shall
reimburse Landlord for the reasonable accounting costs and expenses associated
with Landlord’s in-house auditors or accounting personnel as well as those
reasonable costs and expenses incurred by Landlord for any outside accounting
firms or auditors in connection with such audit within ten (10) days after
receipt of written demand therefor. In the event that any other tenant audits or
reviews Operating Expenses and an adjustment is made such same adjustment shall
be made with respect to Tenant.

7. Utilities and Services

     In addition to the Base Rent set forth in Section 3 hereof, Tenant shall
pay the cost of all (i) water, sewer use, sewer discharge fees and sewer
connection fees, gas, electricity, telephone, telecommunications, cabling and
other utilities billed or metered separately to the Premises; and (ii) refuse
pickup and janitorial service to the Premises. Utility Expenses, Common Area
Utility Costs and all other sums or charges set forth in this Section 7 are
considered part of Additional Rent.

     7.1 Utility Expenses: For any utility fees, use charges or similar
services that are not billed or metered separately to Tenant, including without
limitation, water charges (“Utility Expenses”), (i) Tenant shall pay to Landlord
Tenant’s Share of Utility Expenses, as Additional Rent and (ii) if Landlord
reasonably determines that Tenant’s Share is not commensurate with Tenant’s use
of such services, Tenant shall pay to Landlord the amount which is attributable
to Tenant’s use of the utilities or similar services, as reasonably estimated
and determined by Landlord based upon factors such as size of the Premises and
intensity of use of such utilities by Tenant such that Tenant shall pay the
portion of such charges reasonably consistent with Tenant’s use of such
utilities and similar services. If Tenant disputes any such estimate or determination,
then Tenant shall either pay the estimated amount or cause the Premises to be separately
metered at Tenant’s sole expense.

     7.2 Common Area Utility Costs: Tenant shall pay to Landlord Tenant’s
Share of any Common Area utility costs, fees, charges or expenses (“Common Area
Utility Costs”). Tenant shall pay to Landlord one-twelfth (1/12th) of the
estimated amount of Tenant’s Share of the Common Area Utility Costs on the
Commencement Date and thereafter on the first (1st) day of each month throughout
the balance of the Term of this Lease. Any reconciliation thereof shall be
substantially in the same manner as set forth in Section 6.4 above.

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     7.3 Miscellaneous: Tenant acknowledges that the Premises may become
subject to the rationing of utility services or restrictions on utility use as
required by a public utility company, governmental agency or other similar
entity having jurisdiction thereof. Notwithstanding any such rationing or
restrictions on use of any such utility services, Tenant acknowledges and agrees
that its tenancy and occupancy hereunder shall be subject to such rationing
restrictions as may be imposed upon Landlord, Tenant, the Premises, the
Building, or the Park, and Tenant shall in no event be excused or relieved from
any covenant or obligation to be kept or performed by Tenant by reason of any
such rationing or restrictions. Tenant further agrees to timely and faithfully
pay, prior to delinquency, any amount, tax, charge, surcharge, assessment or
imposition levied, assessed or imposed upon the Premises, or Tenant’s use and
occupancy thereof. Notwithstanding anything to the contrary contained herein,
if permitted by applicable Laws, Landlord shall have the right at any time and
from time to time during the Term of this Lease to either contract for service
from a different company or companies (each such company shall be referred to
herein as an “Alternate Service Provider”) other than the company or companies
presently providing electricity service for the Building or the Park (the
“Electric Service Provider”) or continue to contract for service from the
Electric Service Provider, at Landlord’s reasonable discretion. Tenant hereby
agrees to cooperate with Landlord, the Electric Service Provider, and any
Alternate Service Provider at all times and, as reasonably necessary, shall
allow Landlord, the Electric Service Provider, and any Alternate Service
Provider reasonable access to the Building’s electric lines, feeders, risers,
wiring, and any other machinery within the Premises. Landlord shall use
Landlord’s commercially reasonable efforts to minimize any interruption to
Tenant’s business operations in connection with the discontinuation of any
Electric Service Provider and the commencement of service by an Alternative
Service Provider and Landlord shall give Tenant at least ten (10) days prior
written notice of the date of any such discontinuation and commencement.

8. Late Charges

     Any and all sums or charges set forth in this Section 8 are considered part
of Additional Rent. Tenant acknowledges that late payment (the fourth (4th)
day of each month or any time thereafter) by Tenant to Landlord of Base Rent,
Tenant’s Share of Operating Expenses, Tax Expenses, Common Area Utility Costs,
and Utility Expenses or other sums due hereunder, will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to fix. Such costs include, without
limitation, processing and accounting charges, and late charges that may be
imposed on Landlord by the terms of any note secured by any encumbrance against
the Premises, and late charges and penalties due to the late payment of taxes
and expenses with respect to the Premises. Therefore, if any installment of
Rent or any other sum due from Tenant is not received by Landlord within three
(3) days of the date when due, Tenant shall promptly pay to Landlord an
additional sum equal to seven percent (7%) of such delinquent amount plus
interest on such delinquent amount at the rate equal to the prime rate plus
three percent (3%) for the time period such payments are delinquent as a late
charge for every month or portion thereof that such sums remain unpaid. If
Tenant delivers to Landlord a check for which there are not sufficient funds, Landlord

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may, at its sole option, require Tenant to replace such check with a cashier’s
check for the amount of such check and all other charges payable hereunder. The
parties agree that this late charge and the other charges referenced above
represent a fair and reasonable estimate of the costs that Landlord will incur
by reason of late payment by Tenant. Acceptance of any late charge or other
charges shall not constitute a waiver by Landlord of Tenant’s default with
respect to the delinquent amount, nor prevent Landlord from exercising any of
the other rights and remedies available to Landlord for any other breach of
Tenant under this Lease. If a late charge or other charge becomes payable for
any three (3) installments of Rent within any twelve (12) month period, then
Landlord, at Landlord’s sole option, can either require the Rent be paid
quarterly in advance, or be paid monthly in advance by cashier’s check or by
electronic funds transfer. Notwithstanding anything to the contrary contained
herein, if Tenant is late in making any of the payments described in this
Section 8 to Landlord hereunder in any two (2) instances during the Term of this
Lease, then Landlord hereby waives the requirement that Tenant pay to Landlord a
late charge for such late payments.

9. Use of Premises

     9.1 Compliance with Laws, Recorded Matters, and Rules and Regulations:
The Premises are to be used solely for the purposes and uses specified in the
Basic Lease Information and for no other uses or purposes without Landlord’s
prior written consent, which consent shall not be unreasonably withheld or
delayed so long as the proposed use (i) does not involve the use of Hazardous
Materials other than as expressly permitted under the provisions of Section 29
below, (ii) does not require any additional parking in excess of the parking
spaces already allotted to Tenant pursuant to the provisions of Section 24 of
this Lease, and (iii) is compatible and consistent with the other uses then
being made in the Park and in other similar types of buildings in the vicinity
of the Park, as reasonably determined by Landlord. The use of the Premises by
Tenant and its employees, representatives, agents, invitees, licensees,
subtenants, customers or contractors (collectively, “Tenant’s Representatives”)
shall be subject to, and at all times in compliance with, (a) any and all
applicable laws, ordinances, statutes, orders and regulations as same exist from
time to time (collectively, the “Laws”), (b) any and all documents, easements,
covenants, conditions and restrictions, and similar instruments, each of which
has been or hereafter is recorded in any official or public records with respect
to the Premises, the Building and/or the Park, or any portion thereof
(collectively, the “Recorded Matters”), and (c) any and all rules and
regulations set forth in Exhibit C, attached to and made a part of this Lease,
any other reasonable rules and regulations promulgated by Landlord now or
hereafter enacted relating to parking and the operation of the Premises, the
Building, and the Park, and any and all rules, restrictions and/or regulations
imposed by any applicable owners association or similar entity or body
(collectively, the “Rules and Regulations”); provided, none of the Recorded
Matters which are subsequently recorded after the Lease Date shall materially
and adversely affect Tenant’s use and/or business operations at the Premises
(excluding any liens related to any mortgage, deed of trust or similar type of
security interest (but still subject to the terms of Section 17). Tenant agrees
to comply with the provisions of the Rules and Regulations adopted by the

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Landlord; provided, however, that such Rules and Regulations shall be enforced
equally as to all tenants located in the Building. Additionally, Landlord
agrees not to adopt any Rule or Regulation which adversely and materially
affects the use and/or business operations of the Tenant on the Premises.
Landlord shall use reasonable efforts to ensure other tenants comply with the
Rules and Regulations (provided, Landlord shall not be required to institute or
prosecute litigation or expend more than nominal amounts in connection with such
efforts. Tenant agrees to, and does hereby, assume full and complete responsibility
to ensure that the Premises, including without limitation, the Tenant Improvements, are
adequate to fully meet the needs and requirements of Tenant’s intended operations of its
business within the Premises, and Tenant’s use of the Premises is in compliance
with all applicable Laws throughout the Term of this Lease. Additionally, Tenant
shall be solely responsible for the payment of all costs, fees and expenses
associated with any modifications, improvements or alterations to the Premises,
Building, the Common Areas and/or the Park required by the enactment of, or
changes to, any Laws after the Lease Date and arising from Tenant’s particular
use of the Premises or alterations, improvements or additions made to the
Premises regardless of when such Laws became effective. Tenant shall not
initiate, submit an application for, or otherwise request, any land use
approvals or entitlements with respect to any portion of the Park, including
without limitation, any variance, conditional use permit or rezoning, without
first obtaining Landlord’s prior written consent thereto, which consent may be
given or withheld in Landlord’s sole discretion.

     9.2 Prohibition on Use: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way increase the existing rate of or affect any policy of
fire or other insurance upon the Building or any of its contents, or cause a
cancellation of any insurance policy. No auctions may be held or otherwise
conducted in, on or about the Premises, the Building, or the Park without
Landlord’s written consent thereto, which consent may be given or withheld in
Landlord’s sole discretion. Tenant shall not do or permit anything to be done
in or about the Premises which will in any way obstruct or interfere with the
rights of Landlord, other tenants or occupants of the Building and/or other
buildings in the Park. The Premises shall not be used for any unlawful
purpose; nor shall Tenant cause, maintain or permit any private or public
nuisance in, on or about the Premises, Building, Park and/or the Common Areas,
including, but not limited to, any offensive odors, noises, fumes or vibrations.
Tenant shall neither damage or deface or otherwise commit or suffer to be
committed any waste in, upon or about the Premises. Tenant shall not place or
store, nor permit any other person or entity to place or store, any property,
equipment, materials, supplies, personal property or any other items or goods
outside of the Premises nor park any motor vehicles for any period of time
greater than forty eight (48) hours, provided the parking of such motor vehicles
and/or the storage of such property, equipment, materials, supplies and personal
property shall neither violate any Laws, interfere with any other tenants’
operations, not disturb any neighboring properties, tenants or residents nor
interfere with ingress or egress to any portion of the Park. Tenant shall not
permit any animals, including, but not limited to, any household pets, to be
brought or kept in or about the Premises. Tenant shall not install any radio or
television antenna, satellite dish, microwave, loudspeaker or other device on

16

 

the roof or exterior walls of the Building. Tenant shall not interfere with
radio, telecommunication, or television broadcasting or reception from or in the
Building or elsewhere. Tenant shall place no loads upon the floors, walls, or
ceilings in excess of the maximum designed load permitted by the applicable
Uniform Building Code or which may damage the Building or outside areas; nor
place any harmful liquids in the drainage systems; nor dump or store waste
materials, refuse or other such materials, or allow such materials to remain
outside the Building area, except for any non-hazardous or non-harmful materials
which may be stored in refuse dumpsters. If Tenant fails to comply with such
Laws, Recorded Matters, Rules and Regulations or the provisions of this Lease,
Landlord shall have the right to collect from Tenant a reasonable sum as a
penalty, in addition to all rights and remedies of Landlord hereunder, including
without limitation, Landlord’s costs and expenses, if any, to cure any of such
failures of Tenant, if Landlord, at its sole option, elects to undertake such
cure and such costs and expenses shall be due and owing from Tenant to Landlord
within ten (10) days after Tenant’s receipt of written demand therefor.

10. Alterations; Surrender of Premises

     10.1 Alterations: Tenant shall not install any signs, fixtures,
improvements, nor make or permit any other alterations or additions
(individually, an “Alteration”, and collectively, the “Alterations”) to the
Premises without the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed. However, Tenant shall be permitted to hang
pictures and shelving and perform other similar minor decorating activities and
to perform non-structural alterations not exceeding an aggregate of $25,000
during any calendar year without securing Landlord’s prior consent (“Permitted
Improvements”), provided that Tenant (i) complies with all pertinent building
codes and fire, safety and other such governmental regulations, (ii) does not
take any action which could in any way impact the structural, mechanical,
electrical, maintenance, HVAC or plumbing systems of the Premises and/or
exterior appearance of the Building and (iii) submits its plans for such
Alterations to Landlord at least fifteen (15) business days prior to
commencement of such Alterations (except as to minor decorative items and
installations of furniture for which plans are not required). Within ten (10)
business days following Landlord’s receipt of Tenant’s written notice with
respect to Tenant’s performance of any Permitted Improvements and at such time
as Landlord may approve other Alterations, Landlord shall notify Tenant, in
writing, whether or not Landlord will require Tenant to remove such Permitted
Improvements and Alterations from the Premises upon the expiration or earlier
termination of this Lease. If any such Alteration is expressly permitted by
Landlord, Tenant shall deliver at least ten (10) days prior notice to Landlord,
from the date Tenant intends to commence construction, sufficient to enable
Landlord to post a Notice of Non-Responsibility. In all events, Tenant shall
obtain all permits or other governmental approvals prior to commencing any of
such work and deliver a copy of same to Landlord. All Alterations shall be at
Tenant’s sole cost and expense, and shall be installed by a licensed contractor
(approved by Landlord) in compliance with all applicable Laws (including, but
not limited to, the ADA as defined herein), Recorded Matters, and Rules and
Regulations. Tenant shall keep the Premises and the property on which the
Premises are situated free from any liens arising out of any work performed,

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materials furnished or obligations incurred by or on behalf of Tenant. Tenant
shall, prior to construction of any and all Alterations, provide additional
insurance as required, and also such assurances to Landlord, including without
limitation, waivers of lien, surety company performance bonds as Landlord shall
require to assure payment of the costs thereof to protect Landlord, the Building
and the Park from and against any loss from any mechanic’s, materialmen’s or
other liens.

     10.2 Surrender of Premises: At the end of the Term or earlier termination
of this Lease, Tenant shall surrender the Premises to Landlord (a) in good
condition and repair (damage by acts of God, casualty, and normal wear and tear
excepted), but with all interior walls cleaned, any carpets cleaned, all floors
cleaned and waxed, all non-working light bulbs and ballasts replaced and all
roll-up doors and plumbing fixtures in good condition and working order, and (b)
otherwise in accordance with the provisions of Section 29 hereof. Normal wear
and tear shall not include any damage or deterioration to the floors of the
Premises arising from the use of forklifts in, on or about the Premises
(including, without limitation, any marks or stains on any portion of the
floors), and any damage or deterioration that would not have reasonably been
prevented by proper maintenance by Tenant, or Tenant otherwise performing all of
its obligations under this Lease. On or before the expiration or earlier
termination of this Lease, (i) Tenant shall remove all of Tenant’s Property (as
hereinafter defined) and Tenant’s signage from the Premises, the Building and
the Park and repair any damage caused by such removal, and (ii) Landlord may, by
notice to Tenant given not later than ninety (90) days prior to the Expiration
Date (except in the event of a termination of this Lease prior to the scheduled
Expiration Date, in which event no advance notice shall be required), require
Tenant, at Tenant’s expense, to remove any or all Alterations (except those
Permitted Improvements and Alterations of which Landlord has notified Tenant in
writing, at the time set forth in Section 10.1, that Landlord will not require
such removal) and to repair any damage caused by such removal. For purposes
hereof, the term “Tenant’s Property” shall mean and refer to all equipment,
trade fixtures, furnishings, goods and personal property of Tenant. Any of
Tenant’s Property not so removed by Tenant as required herein shall be deemed
abandoned and may be stored, removed, and disposed of by Landlord at Tenant’s
expense, and Tenant waives all claims against Landlord for any damages resulting
from Landlord’s retention and disposition of such property; provided, however,
that Tenant shall remain liable to Landlord for all costs incurred in storing
and disposing of such abandoned property of Tenant. All Tenant Improvements and
Alterations, except those which Tenant is required to remove, shall remain in
the Premises as the property of Landlord. If the Premises are not surrendered at
the end of the Term or earlier termination of this Lease, and in accordance with
the provisions of this Section 10 and Section 29 below, Tenant shall continue to
be responsible for the payment of Rent (as the same may be increased pursuant to
Section 22 below) until the Premises are so surrendered in accordance with said
provisions, and Tenant shall indemnify, defend and hold the Indemnitees
(hereafter defined) harmless from and against any and all damages, expenses,
costs, losses or liabilities arising from any delay by Tenant in so surrendering
the Premises including, without limitation, any damages, expenses, costs, losses
or liabilities arising from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses

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and damages suffered by Landlord due to lost opportunities to lease any portion
of the Premises to any such succeeding tenant or prospective tenant, together
with, in each case, actual attorneys’ fees and costs.

11. Repairs and Maintenance

     11.1 Tenant’s Repairs and Maintenance Obligations: Except for those
portions of the Building to be maintained by Landlord, as provided in Sections
11.2 and 11.3 below, Tenant shall, at its sole cost and expense, keep and
maintain all parts of the Premises and such portions of the Building and
improvements as are within the exclusive control of Tenant in good, clean and
safe condition and repair, promptly making all necessary repairs and
replacements, whether ordinary or extraordinary, with materials and workmanship
of the same character, kind and quality as the original thereof, all of the
foregoing to the reasonable satisfaction of Landlord including, but not limited
to, repairing any damage caused by Tenant or any of Tenant’s Representatives and
replacing any property so damaged by Tenant or any of Tenant’s Representatives.
Without limiting the generality of the foregoing, Tenant shall be solely
responsible for promptly maintaining, repairing and replacing (a) all plumbing
work and fixtures exclusively serving the Premises, (b) electrical wiring
systems, fixtures and equipment exclusively serving the Premises, (c) all
interior lighting (including, without limitation, light bulbs and/or ballasts)
and exterior lighting exclusively serving the Premises or adjacent to the
Premises, (d) all glass, windows, window frames, window casements, skylights,
interior and exterior doors, door frames and door closers, (e) all roll-up
doors, ramps and dock equipment, including without limitation, dock bumpers,
dock plates, dock seals, dock levelers and dock lights, (f) all tenant signage,
(g) lifts for disabled persons serving the Premises, (h) security systems,
except to the extent maintained by Landlord, and (i) all partitions, fixtures,
equipment, interior painting, interior walls and floors, and floor coverings of
the Premises and every part thereof (including, without limitation, any demising
walls contiguous to any portion of the Premises). Additionally, Tenant shall be
solely responsible for performance of the regular removal of trash and debris.

     11.2 Maintenance by Landlord: Subject to the provisions of Section 11.1,
and further subject to Tenant’s obligation under Section 6 to reimburse
Landlord, in the form of Additional Rent, for Tenant’s Share of the cost and
expense of the following described items, Landlord agrees to (i) repair,
maintain and replace the fire protection and sprinkler systems serving the
Premises and all mechanical and heating, ventilation and air conditioning
systems serving the Premises and (ii) repair and maintain the following items:
fire protection services; the roof and roof coverings (provided that Tenant
installs no additional air conditioning or other equipment on the roof that
damages the roof coverings, in which event Tenant shall pay all costs resulting
from the presence of such additional equipment); the plumbing and mechanical
systems serving the Building, excluding the plumbing, mechanical and electrical
systems exclusively serving the Premises; any rail spur and rail crossing;
exterior painting of the Building; and the parking areas, pavement, landscaping,
sprinkler systems, sidewalks, driveways, curbs, and lighting
systems in the Common Areas. Notwithstanding anything in this Section 11 to the
contrary, Landlord shall have the right to either repair or to require Tenant to

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repair any damage to any portion of the Premises, the Building, the Common Areas
and/or the Park caused by or created due to any act, omission, negligence or
willful misconduct of Tenant or any of Tenant Representatives and to restore the
Premises, the Building, the Common Areas and/or the Park, as applicable, to the
condition existing prior to the occurrence of such damage; provided, however,
that in the event Landlord elects to perform such repair and restoration work,
Tenant shall reimburse Landlord within ten (10) days after written demand
therefor for all costs and expenses incurred by Landlord in connection
therewith. Tenant shall promptly report in writing to Landlord any defective
condition known to it which Landlord is required to repair, and failure to so
report such defects shall make Tenant responsible to Landlord for any liability
proximately caused by Tenant’s failure to report such condition.

     11.3 Landlord’s Repairs and Maintenance Obligations: Subject to the
provisions of Sections 11.1, 27 and 28, and except for repairs rendered
necessary by the intentional or negligent acts or omissions of Tenant or any of
Tenant’s Representatives, Landlord agrees, at Landlord’s sole cost and expense,
to (a) keep in good repair the structural portions of the floors, foundations
and exterior perimeter walls of the Building (exclusive of glass and exterior
doors), and (b) replace the structural portions of the roof of the Building
(excluding the roof membrane). Tenant shall promptly report in writing to
Landlord any defective condition known to it which Landlord is required to
repair, and failure to so report such defects shall make Tenant responsible to
Landlord for any liability proximately caused by Tenant’s failure to report such
condition.

     11.4 Tenant’s Failure to Perform Repairs and Maintenance Obligations:
Tenant shall have no right of access to or right to install any device on the
roof of the Building nor make any penetrations of the roof of the Building
without the express prior written consent of Landlord. If Tenant refuses or
neglects to repair and maintain the Premises and the other areas properly as
required herein , Landlord may, but without obligation to do so, at any time
make such repairs and/or maintenance without Landlord having any liability to
Tenant for any loss or damage that may accrue to Tenant’s merchandise, fixtures
or other property, or to Tenant’s business by reason thereof, except to the
extent any damage is caused by the willful misconduct or gross negligence of
Landlord or its authorized agents and representatives. In the event Landlord
makes such repairs and/or maintenance, upon completion thereof Tenant shall pay
to Landlord, as Additional Rent, within ten (10) days after receipt of written
demand therefor, Landlord’s actual costs for making such repairs and/or
maintenance. The obligations of Tenant hereunder shall survive the expiration
of the Term of this Lease or the earlier termination thereof. Tenant hereby
waives any right to repair at the expense of Landlord under any applicable Laws
now or hereafter in effect respecting the Premises.

12. Insurance

     12.1 Types of Insurance: Tenant shall maintain in full force and effect
at all times during the Term of this Lease, at Tenant’s sole cost and expense,
for the protection of Tenant and Landlord, as their interests may appear,
policies of insurance issued by a carrier or carriers reasonably acceptable to

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Landlord and its lender(s) which afford the following coverages: (i) worker’s
compensation: statutory limits; (ii) employer’s liability, as required by law,
with a minimum limit of $100,000 per employee and $500,000 per occurrence; (iii)
commercial general liability insurance (occurrence form) providing coverage
against any and all claims for bodily injury and property damage occurring in,
on or about the Premises arising out of Tenant’s and Tenant’s Representatives’
use and/or occupancy of the Premises. Such insurance shall include coverage for
blanket contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising.

Such insurance shall have a combined single limit of not less than One Million
Dollars ($1,000,000) per occurrence with a Two Million Dollar ($2,000,000)
aggregate limit and excess/umbrella insurance in the amount of Two Million
Dollars ($2,000,000). If Tenant has other locations which it owns or leases, the
policy shall include an aggregate limit per location endorsement. If necessary,
as reasonably determined by Landlord, Tenant shall provide for restoration of
the aggregate limit; (iv) comprehensive automobile liability insurance: a
combined single limit of not less than $2,000,000 per occurrence and insuring
Tenant against liability for claims arising out of the ownership, maintenance,
or use of any owned, hired or non-owned automobiles; (v) “all risk” or “special
purpose” property insurance, including without limitation, sprinkler leakage,
boiler and machinery comprehensive form, if applicable, covering damage to or
loss of any of Tenant’s personal property, trade fixtures, inventory, fixtures
and equipment located in, on or about the Premises, and in addition, coverage
for flood, earthquake, and business interruption of Tenant, together with, if
the property of Tenant’s invitees is to be kept in the Premises, warehouser’s
legal liability or bailee customers insurance for the full replacement cost of
the property belonging to invitees and located in the Premises. Such insurance
shall be written on a replacement cost basis (without deduction for
depreciation) in an amount equal to one hundred percent (100%) of the full
replacement value of the aggregate of the items referred to in this subparagraph
(v); and (vi) such other insurance or higher limits of liability as is then
customarily required for similar types of buildings within the general vicinity
of the Park or as may be reasonably required by any of Landlord’s lenders,
members or partners.

     12.2 Insurance Policies: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
“General Policyholders Rating” of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of “A.M. Best’s Rating Guides.” Any deductible amounts under any
of the insurance policies required hereunder shall not exceed Five Thousand
Dollars ($5,000). Tenant shall deliver to Landlord certificates of insurance
and true and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant. Tenant shall, at least thirty (30) days prior to
expiration of each policy, furnish Landlord with certificates of renewal or
“binders” thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification of the amounts of
coverage except after thirty (30) days prior written notice to the parties named

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as additional insureds as required in this Lease (except for cancellation for
nonpayment of premium, in which event cancellation shall not take effect until
at least ten (10) days’ notice has been given to Landlord). Landlord and Tenant
shall have the right to provide insurance coverage which it is obligated to
carry pursuant to the terms of this Lease under a blanket insurance policy,
provided such blanket policy expressly affords coverage for the Premises and for
Landlord as required by this Lease.

     12.3 Additional Insureds and Coverage: Landlord, Landlord’s property
management company or agent, and any of Landlord’s lender(s) having a lien
against the Premises, the Building or the Park shall be named as additional
insureds under all of the policies required in Section 12.1(iii) above.
Additionally, such policies shall provide for severability of interest. All
insurance to be maintained by Tenant shall, except for workers’ compensation and
employer’s liability insurance, be primary, without right of contribution from
insurance maintained by Landlord. Any umbrella/excess liability policy (which
shall be in “following form”) shall provide that if the underlying aggregate is
exhausted, the excess coverage will drop down as primary insurance. The limits
of insurance maintained by Tenant shall not limit Tenant’s liability under this
Lease. It is contemplated by the parties that the risks of loss described in
Section 12.1 shall be borne by Tenant’s insurance carriers and not by Landlord’s
insurance carriers. Notwithstanding anything to the contrary contained herein, to
the extent Landlord’s cost of maintaining insurance with respect to the Building and/or
any other buildings within the Park is increased as a result of Tenant’s acts, omissions,
alterations,
improvements, use or occupancy of the Premises, Tenant shall pay one hundred
percent (100%) of, and for, such increase(s) as Additional Rent.

     12.4 Failure of Tenant to Purchase and Maintain Insurance: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the Term of this Lease, Landlord may, but
without obligation to do so, purchase the necessary insurance and pay the
premiums therefor. If Landlord so elects to purchase such insurance, Tenant
shall promptly pay to Landlord as Additional Rent, the amount so paid by
Landlord, upon Landlord’s demand therefor. In addition, Landlord may recover
from Tenant and Tenant agrees to pay, as Additional Rent, any and all losses,
damages and costs which Landlord may sustain by reason of Tenant’s failure to
obtain and maintain such insurance.

     12.5 Landlord’s Insurance: Landlord shall, during the Term of this Lease,
procure and keep in force the following insurance, the cost of which shall be
deemed an Operating Expense under Section 6.1 of this Lease: property insurance
insuring the Building (and Tenant Improvements) and improvements within the Park
and rental value insurance for perils covered by the causes of loss — special
form (all risk) and in addition coverage for flood, earthquake and boiler and
machinery (if applicable). Such coverage (except for flood and earthquake) shall
be written on a replacement cost basis equal to at least eighty percent (80%) of
the full insurable replacement value of the foregoing (excluding costs for
footings and excavation) and shall not cover any Alterations, Tenant’s
equipment, trade fixtures, inventory, fixtures or personal property located on
or in the Premises. Additionally, Landlord shall, during the Term of this Lease,
procure and keep in force the following insurance, the cost of which shall be

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deemed an Operating Expense under Section 6.1 of this Lease: commercial general
liability insurance (occurrence form) providing coverage against claims for
bodily injury, personal injury and property damage occurring in, on or about the
Common Areas, having a combined single limit of not less than Two Million
Dollars ($2,000,000) per occurrence and in the aggregate.

13. Waiver of Subrogation

     Landlord and Tenant hereby mutually waive their respective rights of
recovery against each other for any loss of, or damage to, either parties’
property to the extent that such loss or damage is insured by an insurance
policy required to be in effect at the time of such loss or damage. Each party
shall obtain any special endorsements, if required by its insurer whereby the
insurer waives its rights of subrogation against the other party. This
provision is intended to waive fully, and for the benefit of the parties hereto,
any rights and/or claims which might give rise to a right of subrogation in
favor of any insurance carrier. The coverage obtained by Tenant and Landlord
pursuant to Section 12 of this Lease shall include, without limitation, a waiver
of subrogation endorsement attached to the certificate of insurance. The
provisions of this Section 13 shall not apply in those instances in which such
waiver of subrogation would invalidate such insurance coverage or would cause
either party’s insurance coverage to be voided or otherwise uncollectible.

14. Limitation of Liability and Indemnity

     Except to the extent of damage resulting from the gross negligence or
willful misconduct of Landlord or its authorized representatives, Tenant agrees
to protect, defend (with counsel acceptable to Landlord) and hold Landlord and
Landlord’s lenders, partners, members, property management company (if other
than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns and each of their respective
partners, members, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns (collectively, the “Indemnitees”) harmless
and indemnify the Indemnitees from and against all liabilities, damages, claims,
losses, judgments, charges and expenses (including reasonable attorneys’ fees,
costs of court and expenses necessary in the prosecution or defense of any
litigation including the enforcement of this provision) arising from or in any
way related to, directly or indirectly, (i) Tenant’s or Tenant’s
Representatives’ use of the Premises, Building, and/or the Park, (ii) the
conduct of Tenant’s business, (iii) from any activity, work or thing done,
permitted or suffered by Tenant in or about the Premises, (iv) in any way
connected with the Premises, the Alterations or with the Tenant’s Property
therein, including, but not limited to, any liability for injury to person or
property of Tenant, Tenant’s Representatives or third party persons, and/or (v)
Tenant’s failure to perform any covenant or obligation of Tenant under this
Lease. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.

     Except to the extent of damage resulting from the gross negligence or
willful misconduct of Landlord or its authorized representatives, to the fullest
extent permitted by law, Tenant agrees that neither Landlord nor any of

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Landlord’s lender(s), partners, members, employees, representatives, legal
representatives, successors or assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building, or the Park,
including, but not limited to, any acts, errors or omissions by or on behalf of
any other tenants or occupants of the Building and/or the Park. Tenant shall
not, in any event or circumstance, be permitted to offset or otherwise credit
against any payments of Rent required herein for matters for which Landlord may
be liable hereunder. Landlord and its authorized representatives shall not be
liable for any interference with light or air, or for any latent defect (except
for the thirty (30) day period described in Section 2.2 of this Lease) in the
Premises or the Building.

15. Assignment and Subleasing

     15.1 Prohibition: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, “assignment”), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed sublessee or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) and/or Environmental Laws (defined below) beyond
those requirements which are applicable to Tenant, unless the proposed sublessee
or assignee shall (a) first deliver plans and specifications for complying with
such additional requirements and obtain Landlord’s written consent thereto, and
(b) comply with all Landlord’s conditions for or contained in such consent,
including without limitation, requirements for security to assure the lien-free
completion of such improvements. If Tenant seeks to sublet or assign all or any
portion of the Premises, Tenant shall deliver to Landlord at least fifteen (15)
days prior to the proposed commencement of the sublease or assignment (the
“Proposed Effective Date”) the following: (i) the name of the proposed assignee
or sublessee; (ii) such information as to such assignee’s or sublessee’s
financial responsibility and standing as Landlord may reasonably require; and
(iii) the aforementioned plans and specifications, if any. Within ten (10) days
after Landlord’s receipt of a written request from Tenant that Tenant seeks to
sublet or assign all or any portion of the Premises, Landlord shall deliver to
Tenant a copy of Landlord’s standard form of consent to sublease or assignment
agreement (as applicable), which instrument shall be utilized for each proposed
sublease or assignment (as applicable). Any assignment or sublet agreement shall
include a provision whereby the assignee or sublessee assumes all of Tenant’s
obligations hereunder and agrees to be bound by the terms hereof. As Additional
Rent hereunder, Tenant shall pay to Landlord a fee in the amount of
five hundred dollars ($500) plus Tenant shall reimburse Landlord for actual
legal and other expenses incurred by Landlord in connection with any actual or
proposed assignment or subletting. In the event the sublease or assignment (I)
by itself or taken together with prior sublease(s) or partial assignment(s)

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covers or totals, as the case may be, more than twenty-five percent (25%) of the
rentable square feet of the Premises or (2) is for a term which by itself or
taken together with prior or other subleases or partial assignments is greater
than fifty percent (50%) of the period remaining in the Term of this Lease as of
the time of the Proposed Effective Date, then Landlord shall have the right, to
be exercised by giving written notice to Tenant (“Recapture Notice”), to
recapture the space described in the sublease or assignment. If within fifteen
(15) days of Landlord’s delivery to Tenant of the Recapture Notice, Tenant does
not deliver to Landlord written notice (the “Tenant’s Recapture Rescission
Notice”) that Tenant has elected (I) not to consummate such proposed assignment
or sublease, and (II) to rescind the request to enter into such proposed
assignment or sublease, such Recapture Notice shall serve to terminate this
Lease with respect to the proposed sublease or assignment space, or, if the
proposed sublease or assignment space covers all the Premises, it shall serve to
terminate the entire balance of the term of this Lease, in either case, as of
the Proposed Effective Date. However, no termination of this Lease with respect
to part or all of the Premises shall become effective without the prior written
consent, where necessary, of the holder of each deed of trust encumbering the
Premises or any part thereof. If this Lease is terminated pursuant to the
foregoing with respect to less than the entire Premises, the Rent shall be
adjusted on the basis of the proportion of square feet retained by Tenant to the
square feet originally demised and this Lease as so amended shall continue
thereafter in full force and effect. Each permitted assignee or sublessee shall
assume and be deemed to assume this Lease and shall be and remain liable jointly
and severally with Tenant for payment of Rent and for the due performance of,
and compliance with all the terms, covenants, conditions and agreements herein
contained on Tenant’s part to be performed or complied with, for the term of
this Lease. No assignment or subletting shall affect the continuing primary
liability of Tenant (which, following assignment, shall be joint and several
with the assignee), and Tenant shall not be released from performing any of the
terms, covenants and conditions of this Lease. Tenant hereby acknowledges and
agrees that it understands that Landlord’s accounting department may process and
accept Rent payments without verifying that such payments are being made by
Tenant, a permitted sublessee or a permitted assignee in accordance with the
provisions of this Lease. Although such payments may be processed and accepted
by such accounting department personnel, any and all actions or omissions by the
personnel of Landlord’s accounting department shall not be considered as
acceptance by Landlord of any proposed assignee or sublessee nor shall such
actions or omissions be deemed to be a substitute for the requirement that
Tenant obtain Landlord’s prior written consent to any such subletting or
assignment, and any such actions or omissions by the personnel of Landlord’s
accounting department shall not be considered as a voluntary relinquishment by
Landlord of any of its rights hereunder nor shall any voluntary relinquishment
of such rights be inferred therefrom. Except with respect to a Related Entity,
for purposes hereof, in the event Tenant is a corporation, partnership, joint
venture, trust or other entity other than a natural person, any change in the
direct or indirect ownership of Tenant (whether pursuant to one or more
transfers other than the initial public offering of Tenant’s common stock or the
subsequent trading of tenant’s publicly traded common stock which does not
confer upon any party or parties control over Tenant) which results in a change
of more than fifty percent (50%) in the direct or indirect ownership of Tenant

25

 

shall be deemed to be an assignment within the meaning of this Section 15 and
shall be subject to all the provisions hereof. Any and all options, first rights
of refusal, tenant improvement allowances and other similar rights granted to
Tenant in this Lease, if any, shall not be assignable by Tenant unless expressly
authorized in writing by Landlord.

     15.2 Excess Sublease Rental or Assignment Consideration: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as Additional Rent, at the same
time as the monthly installments of Rent are payable hereunder, fifty percent
(50%) of the excess of each such payment of rent or other consideration in
excess of the Rent called for hereunder.

     15.3 Waiver: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant agrees that Landlord may, at its option, proceed against
Tenant without having taken action against or joined such assignee or sublessee,
except that Tenant shall have the benefit of any indulgences, waivers and
extensions of time granted to any such assignee or sublessee.

     15.4 Related Entities: Notwithstanding anything to the contrary contained
in this Section 15, so long as Tenant delivers to Landlord (1) at least fifteen
(15) business days prior written notice of its intention to assign or sublease
the Premises to any Related Entity, which notice shall set forth the name of the
Related Entity, (2) a copy of the proposed agreement pursuant to which such
assignment or sublease shall be effectuated, and (3) such other information
concerning the Related Entity as Landlord may reasonably require, including
without limitation, information regarding any change in the proposed use of any
portion of the Premises and any financial information with respect to such
Related Entity, and so long as (i) any change in the proposed use of the subject
portion of the Premises is in conformance with the uses permitted to be made
under this Lease and do not involve the use or storage of any Hazardous
Materials (other than normal amounts of ordinary household cleaners, office
supplies and janitorial supplies which are not regulated by any Environmental
Laws), and (ii) at the time of the proposed assignment or sublease, the net
profits and financial condition of the Related Entity is reasonably adequate and
sufficient in relation to the then remaining obligations of Tenant under this
Lease, then Tenant may assign this Lease or sublease any portion of the Premises
(X) to any Related Entity, or (Y) in connection with any merger, consolidation
or sale of substantially all of the assets of Tenant, without having to obtain
the prior written consent of Landlord thereto. For purposes of this Lease, the
term “Related Entity” shall mean and refer to any corporation or entity which
controls, is controlled by or is under common control with Tenant, as all of
such terms are customarily used in the industry.

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16. Ad Valorem Taxes

     Prior to delinquency, Tenant shall pay all taxes and assessments levied
upon trade fixtures, alterations, additions, improvements, inventories and
personal property located and/or installed on or in the Premises by, or on
behalf of, Tenant; and if requested by Landlord, Tenant shall promptly deliver
to Landlord copies of receipts for payment of all such taxes and assessments.
To the extent any such taxes are not separately assessed or billed to Tenant,
Tenant shall pay the amount thereof as invoiced by Landlord.

17. Subordination

     Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, and at the election of Landlord or
any bona fide mortgagee or deed of trust beneficiary with a lien on all or any
portion of the Premises or any ground lessor with respect to the land of which
the Premises are a part, the rights of Tenant under this Lease and this Lease
shall be subject and subordinate at all times to: (i) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Building or the land upon which the Building is situated or both, and (ii) the
lien of any mortgage or deed of trust which may now exist or hereafter be
executed in any amount for which the Building, ground leases or underlying
leases, or Landlord’s interest or estate in any of said items is specified as
security. Notwithstanding the foregoing, Landlord or any such ground lessor,
mortgagee, or any beneficiary shall have the right to subordinate or cause to be
subordinated any such ground leases or underlying leases or any such liens to
this Lease. If any ground lease or underlying lease terminates for any reason
or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor to Landlord, attorn to and
become the Tenant of the successor in interest to Landlord, provided such
successor in interest will not disturb Tenant’s use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of the terms and
provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) subject to any offsets
or defenses which Tenant might have against any prior lessor; (c) bound by
prepayment of more than one (1) month’s Rent, except in those instances when
Tenant pays Rent quarterly in advance pursuant to Section 8 hereof, then not
more than three months’ Rent; or (d) liable to Tenant for any Security Deposit
not actually received by such successor in interest to the extent any portion or
all of such Security Deposit has not already been forfeited by, or refunded to,
Tenant. Landlord shall be liable to Tenant for all or any portion of the
Security Deposit not forfeited by, or refunded to Tenant, until and unless
Landlord transfers such Security Deposit to the successor in interest. Tenant
covenants and agrees to execute (and acknowledge if required by Landlord, any
lender or ground lessor) and deliver, within five (5) days of a demand or
request by Landlord and in the form requested by Landlord, ground lessor,
mortgagee or beneficiary, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such mortgage or deed of trust. Tenant’s failure to
timely execute and deliver such additional documents shall, at Landlord’s

27

 

option, constitute a material default hereunder. Tenant hereby acknowledges that
as of the date on which Landlord and Tenant execute this Lease there is a deed
of trust encumbering, and in force against the Premises, the Building and the
Park in favor of Nationsbank, N.A. (the “Current Lender”). Simultaneously with
Tenant’s execution of this Lease, Tenant shall sign, notarize and deliver a
subordination, non-disturbance and attornment agreement substantially in the
form of Exhibit I attached hereto, entitled “Subordination, Non-Disturbance and
Attornment Agreement.” Landlord shall (i) execute and notarize such agreement
simultaneously with Landlord’s execution of this Lease and (ii) cause Current
Lender to execute and notarize such agreement promptly after Landlord’s and
Tenant’s execution and notarization of such non-disturbance agreement. If
Landlord at any time during the Term of the Lease causes the Premises, the
Building and the Park to be encumbered by a new deed of trust or mortgage
pursuant to which the beneficiary of such deed of trust or mortgage is a party
or entity other than the Current Lender, the parties acknowledge and agree that
the form of any non-disturbance and attornment agreement that may be requested
to be executed and delivered by Tenant in connection therewith will not be the
“Subordination, Non-Disturbance and Attornment Agreement” attached to the Lease
as Exhibit I. Tenant’s agreement to subordinate this Lease to any future ground
or underlying lease or any future deed of trust or mortgage pursuant to the
foregoing provisions o this Section 17 is conditioned upon Landlord delivering
to Tenant form the lessor under such future ground or underlying lease or the
holder of any such deed of trust, a non-disturbance agreement agreeing, among
other things, that Tenant’s right to possession of the Premises pursuant to the
terms and conditions of this Lease shall not be disturbed provided Tenant is not
in default under this Lease beyond the applicable notice and cure periods
hereunder.

18. Right of Entry

     Landlord and its agents shall have the right to enter the Premises at all
reasonable times upon reasonable notice, except in the event of emergency (in
which event no notice shall be required), for purposes of inspection,
exhibition, posting of notices, repair, maintenance and alteration. At
Landlord’s option, Landlord shall at all times have and retain a key with which
to unlock all the doors in, upon and about the Premises, excluding Tenant’s
vaults and safes. It is further agreed that Landlord shall have the right to
use any and all means Landlord deems necessary to enter the Premises in an
emergency. During the final nine (9) months of the Term, Landlord shall have
the right to place “for rent” or “for lease” signs on the outside of the
Premises, the Building and in the Common Areas. Landlord shall also have the
right to place “for sale” signs on the outside of the Building and in the Common
Areas. Tenant hereby waives any claim from damages or for any injury or
inconvenience to or interference with Tenant’s business, or any other loss
occasioned thereby except for any claim for any of the foregoing arising out of
the gross negligence or willful misconduct of Landlord or its authorized
representatives.

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19. Estoppel Certificate

waiver of such default, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord’s right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of
the Landlord in exercising any right, power or privilege hereunder shall operate
as a waiver thereof.

27. Casualty Damage

     If the Premises or any part thereof shall be damaged by fire or other
casualty, Tenant shall give prompt written notice thereof to Landlord. In case
the Building shall be so damaged by fire or other casualty such that the
Premises and/or the Building cannot, in Landlord’s reasonable opinion, be fully
repaired within one hundred eighty (180) days following the date of such damage
(subject to extension for Force Majeure Delays and Tenant Delays), Landlord or
Tenant may terminate this Lease by notifying the other in writing of such
termination within thirty (30) days after the date of Landlord’s determination
of the extent of such damage (which determination shall be made within ninety
(90) days after the date of such damage) in which event the Rent shall be abated
as of the date of such damage. If neither party elects to terminate this Lease,
and provided insurance proceeds and any contributions from Tenant, if necessary,
are available to fully repair the damage, Landlord shall within one hundred
twenty (120) days after the date of such damage commence to repair and restore
the Building and shall proceed with reasonable diligence to restore the Building
(except that Landlord shall not be responsible for delays outside its control)
to substantially the same condition in which it was immediately prior to the
happening of the casualty; provided, Landlord shall not be required to rebuild,
repair, or replace any part of the Tenant Improvements (in excess of any
insurance proceeds actually received by Landlord) of Tenant’s Property, any
Alterations . Landlord shall not in any event be required to spend for such work
an amount in excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by Tenant or loss of Tenant’s Property resulting
in any way from such damage or the repair thereof, except that, subject to the
provisions of the next sentence, Landlord shall allow Tenant a fair diminution
of Rent during the time and to the extent the Premises are unfit for occupancy.
Notwithstanding anything to the contrary contained herein, if the Premises or
any other portion of the Building be damaged by fire or other casualty resulting
from the intentional or negligent acts or omissions of Tenant or any of Tenant’s
Representatives, (i) the Rent shall not be diminished during the repair of such
damage to the extent any portion of the Rent is not actually reimbursed to
Landlord from the proceeds of any rental loss insurance procured by Landlord
hereunder, (ii) Tenant shall not have any right to terminate this Lease due to

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the occurrence of such casualty or damage, and (iii) Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of all or any
portion of the Building caused thereby (including, without limitation, any
deductible) to the extent such cost and expense is not covered by insurance
proceeds. If the holder of any indebtedness secured by the Premises requires
that the insurance proceeds be applied to such indebtedness, then Landlord shall
have the right to terminate this Lease by delivering written notice of
termination to Tenant within thirty (30) days after the date of notice to Tenant
of any such event, whereupon all rights and obligations shall cease and
terminate hereunder except for those obligations expressly intended to survive
any such termination of this Lease. Except as otherwise provided in this Section
27, Tenant hereby waives the provisions of Sections 1932(2.), 1933(4.), 1941 and
1942 of the California Civil Code.

28. Condemnation

     If twenty-five percent (25%) or more of the Premises is condemned by
eminent domain, inversely condemned or sold in lieu of condemnation for any
public or quasi-public use or purpose (“Condemned”), then Tenant or Landlord may
terminate this Lease as of the date when physical possession of the Premises is
taken and title vests in such condemning authority, and Rent shall be adjusted
to the date of termination. Tenant shall not because of such condemnation
assert any claim against Landlord or the condemning authority for any
compensation because of such condemnation, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate of
interest or other interest of Tenant; provided, however, the foregoing
provisions shall not preclude Tenant, at Tenant’s sole cost and expense, from
obtaining any separate award to Tenant for loss of or damage to Tenant’s trade
fixtures and removable personal property or for damages for cessation or
interruption of Tenant’s business provided such award is separate from
Landlord’s award and provided further such separate award does not diminish nor
impair the award otherwise payable to Landlord. In addition to the foregoing,
Tenant shall be entitled to seek compensation for the relocation costs
recoverable by Tenant pursuant to the provisions of California Government Code
Section 7262. If neither party elects to terminate this Lease, Landlord shall,
if necessary, promptly proceed to restore the Premises or the Building to
substantially its same condition prior to such partial condemnation, allowing
for the reasonable effects of such partial condemnation, and a proportionate
allowance shall be made to Tenant, as solely determined by Landlord, for the
Rent corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of such partial condemnation and
restoration. Landlord shall not be required to spend funds for restoration in
excess of the amount received by Landlord as compensation awarded.

29. Environmental Matters/Hazardous Materials

     29.1 Hazardous Materials Disclosure Certificate: Prior to executing
this Lease, Tenant has completed, executed and delivered to Landlord Tenant’s
initial Hazardous Materials Disclosure Certificate (the “Initial HazMat
Certificate”), a copy of which is attached hereto as Exhibit E and incorporated

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herein by this reference. Tenant covenants, represents and warrants to Landlord
that the information on the Initial HazMat Certificate is true and correct and
accurately describes the use(s) of Hazardous Materials which will be made and/or
used on the Premises by Tenant. Tenant shall commencing with the date which is
one year from the Commencement Date and continuing every year thereafter,
complete, execute, and deliver to Landlord, a Hazardous Materials Disclosure
Certificate (“the “HazMat Certificate”) describing Tenant’s present use of
Hazardous Materials on the Premises, and any other reasonably necessary
documents as requested by Landlord. The HazMat Certificate required hereunder
shall be in substantially the form as that which is attached hereto as Exhibit E.

     29.2 Definition of Hazardous Materials: As used in this Lease, the
term Hazardous Materials shall mean and include (a) any hazardous or toxic
wastes, materials or substances, and other pollutants or contaminants, which are
or become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and lead-
containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Park or any surrounding property; or poses or threatens to pose a hazard to
the health and safety of persons on the Premises or any surrounding property.

     29.3 Prohibition; Environmental Laws: Tenant shall not be entitled to
use nor store any Hazardous Materials on, in, or about the Premises, the
Building and the Park, or any portion of the foregoing, without, in each
instance, obtaining Landlord’s prior written consent thereto. If Landlord
consents to any such usage or storage, then Tenant shall be permitted to use
and/or store only those Hazardous Materials that are necessary for Tenant’s
business and to the extent disclosed in the HazMat Certificate and as expressly
approved by Landlord in writing, provided that such usage and storage is only to
the extent of the quantities of Hazardous Materials as specified in the then
applicable HazMat Certificate as expressly approved by Landlord and provided
further that such usage and storage is in full compliance with any and all
local, state and federal environmental, health and/or safety-related laws,
statutes, orders, standards, courts’ decisions, ordinances, rules and
regulations (as interpreted by judicial and administrative decisions), decrees,
directives, guidelines, permits or permit conditions, currently existing and as
amended, enacted, issued or adopted in the future which are or become applicable
to Tenant or all or any portion of the Premises (collectively, the
“Environmental Laws”). Tenant agrees that any changes to the type and/or
quantities of Hazardous Materials specified in the most recent HazMat
Certificate may be implemented only with the prior written consent of Landlord,
which consent may be given or withheld in Landlord’s sole discretion. Tenant

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shall not be entitled nor permitted to install any tanks under, on or about the
Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlord’s sole
discretion. Landlord shall have the right at all times during the Term of this
Lease to (i) inspect the Premises, (ii) conduct tests and investigations to
determine whether Tenant is in compliance with the provisions of this Section
29, and (iii) request lists of all Hazardous Materials used, stored or otherwise
located on, under or about any portion of the Premises and/or the Common Areas.
The cost of all such inspections, tests and investigations shall be borne solely
by Tenant, if Landlord reasonably determines that Tenant or any of Tenant’s
Representatives are directly or indirectly responsible in any manner for any
contamination revealed by such inspections, tests and investigations. The
aforementioned rights granted herein to Landlord and its representatives shall
not create (a) a duty on Landlord’s part to inspect, test, investigate, monitor
or otherwise observe the Premises or the activities of Tenant and Tenant’s
Representatives with respect to Hazardous Materials, including without
limitation, Tenant’s operation, use and any remediation related thereto, or (b)
liability on the part of Landlord and its representatives for Tenant’s use,
storage, disposal or remediation of Hazardous Materials, it being understood
that Tenant shall be solely responsible for all liability in connection
therewith.

     29.4 Tenant’s Environmental Obligations: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises or in any
Common Areas. Tenant, at its sole cost and expense, covenants and warrants to
promptly investigate, clean up, remove, restore and otherwise remediate
(including, without limitation, preparation of any feasibility studies or
reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous
Materials arising from or related to the intentional or negligent acts or
omissions of Tenant or Tenant’s Representatives such that the affected portions
of the Park and any adjacent property are returned to the condition existing
prior to the appearance of such Hazardous Materials. Any such investigation,
clean up, removal, restoration and other remediation shall only be performed
after Tenant has obtained Landlord’s prior written consent, which consent shall
not be unreasonably withheld so long as such actions would not potentially have
a material adverse long-term or short-term effect on any portion of the
Premises, the Building or the Park. Notwithstanding the foregoing, Tenant shall
be entitled to respond immediately to an emergency without first obtaining
Landlord’s prior written consent. Tenant, at its sole cost and expense, shall
conduct and perform, or cause to be conducted and performed, all closures as
required by any Environmental Laws or any agencies or other governmental
authorities having jurisdiction thereof with respect to any Hazardous Materials
used, stored, spilled, discharged, emitted, released, disposed of, removed
and/or transported by Tenant or Tenant’s Representatives. If Tenant fails to so
promptly investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, within ten
(10) days after receipt of written demand therefor, for all costs and expenses to Landlord of

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performing investigation, clean up, removal, restoration, closure and
remediation work. All such work undertaken by Tenant, as required herein, shall
be performed in such a manner so as to enable Landlord to make full economic use
of the Premises, the Building and the Park after the satisfactory completion of
such work.

     29.5 Tenant’s Environmental Indemnity: In addition to Tenant’s
obligations as set forth hereinabove, Tenant agrees to, and shall, protect,
indemnify, defend (with counsel acceptable to Landlord) and hold Landlord and
the other Indemnitees harmless from and against any and all claims, judgments,
damages, penalties, fines, liabilities, losses (including, without limitation,
diminution in value of any portion of the Premises, the Building or the Park,
damages for the loss of or restriction on the use of rentable or usable space,
and from any adverse impact of Landlord’s marketing of any space within the
Building and/or Park), suits, administrative proceedings and costs (including,
but not limited to, attorneys’ and consultant fees and court costs) arising at
any time during or after the Term of this Lease in connection with or related
to, directly or indirectly, the use, presence, transportation, storage,
disposal, migration, removal, spill, release or discharge of Hazardous Materials
on, in or about any portion of the Premises, the Common Areas, the Building or
the Park as a result of the intentional or negligent acts or omissions of
Tenant or any of Tenant’s Representatives. Neither the written consent of
Landlord to the presence, use or storage of Hazardous Materials in, on, under or
about any portion of the Premises, the Building and/or the Park, nor the strict
compliance by Tenant with all Environmental Laws shall excuse Tenant from its
obligations of indemnification pursuant hereto. Tenant shall not be relieved of
its indemnification obligations under the provisions of this Section 29.5 due to
Landlord’s status as either an “owner” or “operator” under any Environmental
Laws.

     29.6 Survival: Tenant’s obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises, the Building, and/or the Park is not in
compliance with the provisions of this Lease with respect to Hazardous
Materials, including without limitation all Environmental Laws at the expiration
or earlier termination of this Lease, then in Landlord’s sole discretion,
Landlord may require Tenant to hold over possession of the Premises until Tenant
can surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term “reasonable wear and tear” shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building and/or the Park in any manner whatsoever related to
directly, or indirectly, Hazardous Materials. Any such holdover by Tenant will
be with Landlord’s consent, will not be terminable by Tenant in any event or
circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease.

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     29.7 Exculpation of Tenant: Tenant shall not be liable to Landlord for
nor otherwise obligated to Landlord under any provision of the Lease with
respect to the following: (i) any claim, remediation, obligation, investigation,
obligation, liability, cause of action, attorney’s fees, consultants’ cost,
expense or damage resulting from any Hazardous Materials present in, on or about
the Premises , the Building or Park to the extent not caused or otherwise
permitted, directly or indirectly, by Tenant or Tenant’s Representatives; or
(ii) the removal, investigation, monitoring or remediation of any Hazardous
Material present in, on or about the Premises , the Building or Park caused by
any source, including third parties, other than Tenant or Tenant’s
Representatives, including but not limited to the conditions described in the
Environmental Report; provided, however, Tenant shall be fully liable for and
otherwise obligated to Landlord under the provisions of this Lease for all
liabilities, costs, damages, penalties, claims, judgments, expenses (including without limitation,
attorneys’ and experts’ fees and costs) and losses to the extent (a) Tenant or any of Tenant’s
Representatives contributes to the presence of such Hazardous Materials, or
Tenant and/or any of Tenant’s Representatives exacerbates the conditions caused
by such Hazardous Materials, or (b) Tenant and/or Tenant’s Representatives
allows or permits persons over which Tenant or any of Tenant’s Representatives
has control, and/or for which Tenant or any of Tenant’s Representatives are
legally responsible for, to cause such Hazardous Materials to be present in, on,
under, through or about any portion of the Premises, the Common Areas, the
Building or the Park, or (c) Tenant and/or any of Tenant’s Representatives does
not take all reasonably appropriate actions to prevent such persons over which
Tenant or any of Tenant’s Representatives has control and/or for which Tenant or
any of Tenant’s Representatives are legally responsible from causing the
presence of Hazardous Materials in, on, under, through or about any portion of
the Premises, the Common Areas, the Building or the Park.

     29.8 Disclosure: Pursuant to the provisions of California Health & Safety
Code Section 25359.7, Landlord hereby discloses to Tenant that as of the Lease
Date certain portions of the Park contain certain Hazardous Materials as such
Hazardous Materials are more particularly described and set forth in that
certain report prepared by CET Environmental Services, entitled Soil Management
Plan for Development and Ongoing Activities Route 237 Assemblage, dated August
27, 1997 (the “Environmental Report”). Landlord acknowledges and agrees that
none of the environmental conditions or presence of Hazardous Materials on, in
or under the Park as described in the Environmental Report have been in any way
caused by Tenant or any of Tenant’s Representatives. Tenant hereby acknowledges
and agrees that Landlord has delivered to Tenant a copy of the Environmental
Report prior to Tenant entering into this Lease.

     29.9 Landlord’s Environmental Indemnity: Landlord agrees to, and shall
protect, indemnify, defend and hold Tenant harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses, suits,
administrative proceedings, and costs arising at any time during or after the
Term of this Lease in connection with or related to the presence of the
Hazardous Materials disclosed in Section 29.8 above.

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30. Financial Statements

     Tenant, for the reliance of Landlord, any lender holding or anticipated to
acquire a lien upon any portion of the Premises, the Building, or the Park, or
any prospective purchaser of any portion of the Building, or the Park, within
ten (10) days after Landlord’s request therefor, but not more often than once
annually so long as Tenant is not in material default of this Lease, shall
deliver to Landlord the then current audited financial statements of Tenant
(including interim periods following the end of the last fiscal year for which
annual statements are available) which statements shall be prepared or compiled
by a certified public accountant and shall present fairly the financial
condition of Tenant at such dates and the result of its operations and changes
in its financial positions for the periods ended on such dates. If an audited
financial statement has not been prepared, Tenant shall provide Landlord with an
unaudited financial statement and/or such other information, the type and form
of which are acceptable to Landlord in Landlord’s reasonable discretion, which
reflects the financial condition of Tenant. If Landlord so requests, Tenant
shall deliver to Landlord an opinion of a certified public accountant, including
a balance sheet and profit and loss statement for the most recent prior year,
all prepared in accordance with generally accepted accounting principles
consistently applied. If Landlord releases or delivers a copy of such
financial statement or any such financial information to any lender of Landlord
or any prospective purchaser of the Building, Landlord shall use commercially
reasonable efforts to advise such parties and require of such parties that they
maintain such financial statements and any such financial information strictly
confidential and not further disseminate the financial statement(s) or any
such financial information to any other party without first obtaining Tenant’s
consent thereto, which consent shall not be unreasonably withheld or delayed;
provided (a) any of Landlord’s lenders or partners, (b) any prospective
purchaser of the Premises, and (c) such party(s) as may be required by any laws,
regulations, orders, decrees, court orders or subpoenas

31. General Provisions

     31.1 Time. Time is of the essence in this Lease and with respect to
each and all of its provisions in which performance is a factor.

     31.2 Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

     31.3 Recordation. Tenant shall not record this Lease or a short form
memorandum hereof.

     31.4 Landlord’s Personal Liability. The liability of Landlord to
Tenant for any default by Landlord under the terms of this Lease shall be
limited to the actual interest of Landlord and its present or future partners or
members in the Premises or the Building, and Tenant agrees to look solely to the
Premises for satisfaction of any liability and shall not look to other assets of
Landlord nor seek any recourse against the assets of the individual partners,
members, directors, officers, shareholders, agents or employees of Landlord
(including without limitation, any property management company of Landlord); it
being intended that Landlord and the individual partners, members, directors,

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officers, shareholders, agents and employees of Landlord (including without
limitation, any property management company of Landlord) shall not be personally
liable in any manner whatsoever for any judgment or deficiency. The liability
of Landlord under this Lease is limited to its actual period of ownership of
title to the Building.

     31.5 Separability. Any provisions of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provisions hereof and such other provision shall remain in full force and
effect.

     31.6 Choice of Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.

     31.7 Attorneys’ Fees. In the event any dispute between the parties
results in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys’ and experts’ fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding, and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.

     31.8 Entire Agreement. This Lease, including the Exhibits hereto,
supersedes any prior agreements, representations, negotiations or correspondence
between the parties, and contains the entire agreement of the parties on matters
covered. No other agreement, statement or promise made by any party, that is
not in writing and signed by all parties to this Lease, shall be binding.

     31.9 Warranty of Authority. On the date that Tenant executes this
Lease, Tenant shall deliver to Landlord an original certificate of status for
Tenant issued by the California Secretary of State or statement of partnership
for Tenant recorded in the county in which the Premises are located, as
applicable, and such other documents as Landlord may reasonably request with
regard to the lawful existence of Tenant. Each person executing this Lease on
behalf of a party represents and warrants that (1) such person is duly and
validly authorized to do so on behalf of the entity it purports to so bind, and
(2) if such party is a partnership, corporation or trustee, that such
partnership, corporation or trustee has full right and authority to enter into
this Lease and perform all of its obligations hereunder. Tenant hereby warrants
that this Lease is valid and binding upon Tenant and enforceable against Tenant
in accordance with its terms.

     31.10 Notices. Any and all notices and demands required or permitted
to be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over

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the age of eighteen (18) years of age; or (iii) by overnight courier, all of
which shall be addressed to Tenant at the Premises. Notice and/or demand shall
be deemed given upon the earlier of actual receipt or the third day following
deposit in the United States mail. Any notice or requirement of service
required by any statute or law now or hereafter in effect, including, but not
limited to, California Code of Civil Procedure Sections 1161, 1161.1, and 1162
(including any amendments, supplements or substitutions thereof), is hereby
waived by Tenant.

     31.11 Joint and Several. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.

     31.12 Covenants and Conditions. Each provision to be performed by
Tenant hereunder shall be deemed to be both a covenant and a condition.

     31.13 Waiver of Jury Trial. The parties hereto shall and they hereby
do waive trial by jury in any action, proceeding or counterclaim brought by
either of the parties hereto against the other on any matters whatsoever arising
out of or in any way related to this Lease, the relationship of Landlord and
Tenant, Tenant’s use or occupancy of the Premises, the Building, or the Park,
and/or any claim of injury, loss or damage.

     31.14 Merger. The voluntary or other surrender of this Lease by
Tenant, the mutual termination or cancellation hereof by Landlord and Tenant, or
a termination of this Lease by Landlord for a material default by Tenant
hereunder, shall not work a merger, and, at the sole option of Landlord, (i)
shall terminate all or any existing subleases or subtenancies, or (ii) may
operate as an assignment to Landlord of any or all of such subleases or
subtenancies. Landlord’s election of either or both of the foregoing options
shall be exercised by delivery by Landlord of written notice thereof to Tenant
and all known subtenants under any sublease.

32. Signs

     All signs and graphics of every kind visible from the exterior of the
Premises shall be subject to Landlord’s prior written approval and shall be
subject to and in compliance with any applicable Laws, Development Documents,
Recorded Matters, Rules and Regulations, and Landlord’s sign criteria as same
may exist from time to time or as set forth in Exhibit H hereto and made a part
hereof. Tenant shall remove all such signs and graphics prior to the
termination of this Lease. Such installations and removals shall be made in a
manner as to avoid damage or defacement of the Premises; and Tenant shall repair
any damage or defacement, including without limitation, discoloration caused by
such installation or removal. Landlord shall have the right, at its option, to
deduct from the Security Deposit such sums as are reasonably necessary to remove
such signs, including, but not limited to, the costs and expenses associated
with any repairs necessitated by such removal. Notwithstanding the foregoing,
in no event shall any: (a) neon, flashing or moving sign(s) or (b) sign(s) which
shall interfere with the visibility of any sign, awning, canopy, advertising
matter, or decoration of any kind of any other business or occupant of the Building, or the

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Park be permitted hereunder. Tenant further agrees to maintain any such sign,
awning, canopy, advertising matter, lettering, decoration or other thing as may
be approved in good condition and repair at all times.

33. Mortgagee Protection

     Upon any default on the part of Landlord, Tenant will give written notice
by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage covering the Premises who has provided Tenant with
notice of their interest together with an address for receiving notice, and
shall offer such beneficiary or mortgagee a reasonable opportunity to cure the
default (which, in no event shall be more than one hundred fifty (150) days),
including time to obtain possession of the Premises by power of sale or a
judicial foreclosure, if such should prove necessary to effect a cure. If such
default cannot be cured within such time period, then such additional time as
may be necessary will be given to such beneficiary or mortgagee to effect such
cure so long as such beneficiary or mortgagee has commenced the cure within the
original time period and thereafter diligently pursues such cure to completion,
in which event this Lease shall not be terminated while such cure is being
diligently pursued. Tenant agrees that each lender to whom this Lease has been
assigned by Landlord is an express third party beneficiary hereof. Tenant shall
not make any prepayment of Rent more than one (1) month in advance without the
prior written consent of each such lender, except if Tenant is required to make
quarterly payments of Rent in advance pursuant to the provisions of Section 8
above. Tenant waives the collection of any deposit from such lender(s) or any
purchaser at a foreclosure sale of such lender(s)’ deed of trust unless the
lender(s) or such purchaser shall have actually received and not refunded the
deposit. Tenant agrees to make all payments under this Lease to the lender with
the most senior encumbrance upon receiving a direction, in writing, to pay said
amounts to such lender. Tenant shall comply with such written direction to pay
without determining whether an event of default exists under such lender’s loan
to Landlord and Landlord waives and releases Tenant from any liability for
Tenant’s compliance with such written direction.

34. Quitclaim

     Upon any termination of this Lease, Tenant shall, at Landlord’s request,
execute, acknowledge and deliver to Landlord a quitclaim deed of Tenant’s
interest in and to the Premises.

35. Modifications for Lender (Intentionally omitted)

36. Warranties of Tenant

     Tenant hereby warrants and represents to Landlord, for the express benefit
of Landlord, that Tenant has undertaken a complete and independent evaluation of
the risks inherent in the execution of this Lease and the operation of the
Premises for the use permitted hereby, and that, based upon said independent
evaluation, Tenant has elected to enter into this Lease and hereby assumes all
risks with respect thereto. Tenant hereby further warrants and represents to
Landlord, for the express benefit of Landlord, that in entering into this Lease,

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Tenant has not relied upon any statement, fact, promise or representation
(whether express or implied, written or oral) not specifically set forth herein
in writing and that any statement, fact, promise or representation (whether
express or implied, written or oral) made at any time to Tenant, which is not
expressly incorporated herein in writing, is hereby waived by Tenant.

37. Compliance with Americans with Disabilities Act

     Landlord and Tenant hereby agree and acknowledge that the Premises, the
Building and/or the Park may be subject to the requirements of the Americans
with Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq,
including, but not limited to Title III thereof, all regulations and guidelines
related thereto, together with any and all laws, rules, regulations, ordinances,
codes and statutes now or hereafter enacted by local or state agencies having
jurisdiction thereof, including all requirements of Title 24 of the State of
California, as the same may be in effect on the date of this Lease and may be
hereafter modified, amended or supplemented (collectively, the “ADA”). Any
Tenant Improvements to be constructed hereunder shall be in compliance with the
requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Tenant
Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter. Subject to reimbursement pursuant to
Section 6 of the Lease, if any barrier removal work or other work is required to
the Building, the Common Areas or the Park under the ADA, then such work shall
be the responsibility of Landlord; provided, if such work is required under the
ADA as a result of Tenant’s use of the Premises or any work or alteration made
to the Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant’s business in or about the Premises, and
offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises, or the Building ; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises, or the Building. Tenant shall and
hereby agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and the other Indemnitees harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, penalties, judgments,
charges and expenses (including reasonable attorneys’ fees, costs of court and
expenses necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, Tenant’s or Tenant’s Representatives’ violation or alleged
violation of the ADA. Tenant agrees that the obligations of Tenant herein shall
survive the expiration or earlier termination of this Lease.

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38. Brokerage Commission

     Landlord and Tenant each represents and warrants for the benefit of the
other that it has had no dealings with any real estate broker, agent or finder
in connection with the Premises and/or the negotiation of this Lease, except for
the Broker(s) (as set forth on Page 1) (which Brokers shall be paid by Landlord
pursuant to a separate written agreement between Landlord and Brokers), and that
it knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder’s fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s) (which Brokers shall be paid by
Landlord pursuant to a separate written agreement between Landlord and Brokers),
if any, resulting from the actions of the indemnifying party. Any real estate
brokerage commission or finder’s fee payable to the Broker(s) in connection with
this Lease shall only be payable and applicable to the extent of the initial
Term of the Lease and to the extent of the Premises as same exist as of the date
on which Tenant executes this Lease. Unless expressly agreed to in writing by
Landlord and Broker(s), no real estate brokerage commission or finder’s fee
shall be owed to, or otherwise payable to, the Broker(s)
for any renewals or other extensions of the initial Term of this Lease or for
any additional space leased by Tenant other than the Premises as same exists as
of the date on which Tenant executes this Lease. Tenant further represents and
warrants to Landlord that Tenant will not receive (i) any portion of any
brokerage commission or finder’s fee payable to the Broker(s) in connection with
this Lease or (ii) any other form of compensation or incentive from the
Broker(s) with respect to this Lease.

39. Confidentiality

     Language to be provided.

40. Quiet Enjoyment

     Landlord covenants with Tenant, upon the paying of Rent and observing and
keeping the covenants, agreements and conditions of this Lease on its part to be
kept, and during the periods that Tenant is not otherwise in material default of
any of the terms or provisions of this Lease, and subject to the terms of
Section 17 of this Lease, (i) that Tenant shall and may peaceably and quietly
hold, occupy and enjoy the Premises and the Common Areas during the Term of this
Lease, and (ii) neither Landlord, nor any successor or assign of Landlord, shall
disturb Tenant’s occupancy or enjoyment of the Premises and the Common Areas.

41. Landlord’s Ability to Perform Tenant’s Unperformed Obligations

     Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord’s judgment reasonably

40

 

exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord’s option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant’s
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the highest rate permitted by applicable law.

42. Collateral for Performance of Lease Obligations

     Simultaneously with Tenant’s delivery to Landlord of this Lease and the
first month’s Base Rent in accordance with the provisions of Section 3 above,
Tenant shall deliver to Landlord, as collateral for the full and faithful
performance by Tenant of all of its obligations under this Lease and for all
losses and damages Landlord may suffer as a result of any default by Tenant
under this Lease, an irrevocable and unconditional negotiable letter of credit,
in the form and containing the terms required herein, payable in the City of
Foster City, California running in favor of Landlord issued by a solvent bank
under the supervision of the Superintendent of Banks of the State of California,
or a National Banking Association, in the amount of Four Hundred Thirty Five
Thousand Nine Hundred Forty-Six and 00/100 Dollars ($435,946.00) (the “Letter of
Credit”). The Letter of Credit shall be (a) at sight and irrevocable, (b)
maintained in effect, whether through replacement, renewal or extension, for the
entire Lease Term (the “Letter of Credit Expiration Date”) and Tenant shall
deliver a new Letter of Credit or certificate of renewal or extension to
Landlord at least thirty (30) days prior to the expiration of the Letter of
Credit, without any action whatsoever on the part of Landlord, (c) subject to
the Uniform Customs and Practices for Documentary Credits (1993-Rev)
International Chamber of Commerce Publication #400, (d) acceptable
to Landlord in its sole discretion, and (e) fully assignable by
Landlord and permit partial draws. In addition to the foregoing, the form and
terms of the Letter of Credit (and the bank issuing the same) shall be
acceptable to Landlord, in Landlord’s sole discretion, and shall provide, among
other things, in effect that: (1) Landlord, or its then managing agent, shall
have the right to draw down an amount up to the face amount of the Letter of
Credit upon the presentation to the issuing bank of Landlord’s (or Landlord’s
then managing agent’s) statement that Tenant is in material default and such
amount is due to Landlord under the terms and conditions of this Lease, it being
understood that if Landlord or its managing agent be a corporation, partnership
or other entity, then such statement shall be signed by an officer (if a
corporation), a general partner (if a partnership), or any authorized party (if
another entity); (2) the Letter of Credit will be honored by the issuing bank
without inquiry as to the accuracy thereof and regardless of whether the Tenant
disputes the content of such statement; and (3) in the event of a transfer of
Landlord’s interest in the Building, Landlord shall transfer the Letter of

41

 

Credit, in whole or in part (or cause a substitute letter of credit to be
delivered, as applicable), to the transferee and thereupon the Landlord shall,
without any further agreement between the parties, be released by Tenant from
all liability therefor, and it is agreed that the provisions hereof shall apply
to every transfer or assignment of the whole or any portion of said Letter of
Credit to a new Landlord. If, as a result of any such application of all or any
part of the Letter of Credit, the amount of the Letter of Credit shall be less
than Four Hundred Thirty Five Thousand Nine Hundred Forty-Six and 00/100 Dollars
($435,946.00), Tenant shall within five (5) days thereafter provide Landlord
with additional letter(s) of credit in an amount equal to the deficiency (or a
replacement letter of credit in the total amount of Four Hundred Thirty Five
Thousand Nine Hundred Forty-Six and 00/100 Dollars ($435,946.00) and each such
additional (or replacement) letter of credit shall comply with all of the
provisions of this Section 42, and if Tenant fails to do so, the same shall
constitute an incurable default by Tenant. Tenant further covenants and warrants
that it will neither assign nor encumber the Letter of Credit or any part
thereof and that neither Landlord nor its successors or assigns will be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance.
Without limiting the generality of the foregoing, if the Letter of Credit
expires earlier than the Letter of Credit Expiration Date, Landlord will accept
a renewal thereof or substitute letter of credit (such renewal or substitute
letter of credit to be in effect not later than thirty (30) days prior to the
expiration thereof), which shall be irrevocable and automatically renewable as
above provided through the Letter of Credit Expiration Date upon the same terms
as the expiring letter of credit or such other terms as may be acceptable to
Landlord in its sole discretion. However, if the Letter of Credit is not timely
renewed or a substitute letter of credit is not timely received, or if Tenant
fails to maintain the Letter of Credit in the amount and terms set forth in this
Section 42, Landlord shall have the right to present such Letter of Credit to
the bank in accordance with the terms of this Section 42, and the entire sum
evidenced thereby shall be paid to and held by Landlord as collateral for
performance of all of Tenant’s obligations under this Lease and for all losses
and damages Landlord may suffer as a result of any default by Tenant under this
Lease. If there shall occur a material default under this Lease as set forth in
Section 20 of this Lease, Landlord may, but without obligation to do so, draw
upon the Letter of Credit, in part or in whole, to cure any default of Tenant
and/or to compensate Landlord for any and all damages of any kind or nature
sustained or which may be sustained by Landlord resulting from Tenant’s default.
Tenant agrees not to interfere in any way with payment to Landlord of the
proceeds of the Letter of Credit, either prior to or following a “draw” by
Landlord of any portion of the Letter of Credit, regardless of whether any
dispute exists between Tenant and Landlord as to Landlord’s right to draw from
the Letter of Credit. No condition or term of this Lease shall be deemed to
render the Letter of Credit conditional to justify the issuer of the Letter of
Credit in failing to honor a drawing upon such Letter of Credit in a timely
manner. Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor be (i) deemed to be or treated as a “security deposit” within the
meaning of California Civil Code Section 1950.7, (ii) subject to the terms of
such Section 1950.7, or (iii) intended to serve as a “security deposit” within
the meaning of such Section 1950.7. The parties hereto (x) recite that the

42

 

Letter of Credit is not intended to serve as a security deposit and such Section
1950.7 and any and all other laws, rules and regulations applicable to security
deposits in the commercial context (“Security Deposit Laws”) shall have no
applicability or relevancy to the Letter of Credit and (y) waive any and all rights,
duties and obligations either party may now or, in the future, will have relating to or arising
from the Security Deposit Laws. Notwithstanding the above, upon Tenant completing
an initial public offering and achieving a market value of $400,000,000.00, such Letter of
Credit shall no longer be required. Tenant shall be required to provide written
documentation outlining Tenant’s market valuation for Landlord’s review and
acceptance prior to the release and termination of such Letter of Credit.

43. Satellite Dish

     Tenant shall have the right (but only to the extent permitted by the City
of San Jose and all agencies and governmental authorities having jurisdiction
thereof), at Tenant’s sole cost and expense, to install and operate a satellite
or microwave dish or dishes (“Satellite Dishes”) along with any necessary cables
(“Cables”) on a portion of the roof of the Building to be designated by Landlord
(“Roof Space”) for the Term of the Lease (the Satellite Dishes and Cables are
hereinafter collectively referred to as the “Equipment”). The location and size
of the Equipment shall be subject to Landlord’s approval, not to unreasonably
withheld and which best promotes the safety, aesthetics and efficiency of the
Equipment; provided, all of the Equipment and any modifications thereto or
placement thereof shall be (i) at Tenant’s sole cost and expense, (ii) contained
visually within the roof screen, (iii) installed and operated to Landlord’s
reasonable specifications, and (iv) installed, maintained, operated and removed
in accordance with all Recorded Matters and applicable Laws. Landlord shall
cooperate reasonably with Tenant to modify the roof screen placement (subject to
all applicable Laws and Recorded Matters) if required for signal quality,
reconfiguration due to the installation of any HVAC systems and other reasonable
considerations; provided, the cost of all such modifications shall be the
responsibility of Tenant. All modifications to the Building, including the Roof
Space, if any, shall be reasonably approved by Landlord prior to commencement of
any work with respect to the Equipment. No additional rent shall be paid by
Tenant for use of the Roof Space and operation of the Equipment. The Equipment
shall remain the property of Tenant and Tenant shall remove the Equipment upon
the expiration or earlier termination of the Lease. Tenant shall restore the
Roof Space and any other portion of the Buildings affected by the Equipment to
its original condition, excepting ordinary wear and tear and/or damage or
destruction due to fire or other casualty not caused directly or indirectly by
Tenant, its agents, employees, contractors or the Equipment or any part thereof.
Tenant may not assign, lease, rent, sublet or otherwise transfer any of its
interest in the Roof Space or the Equipment except together with the remainder
of all of the Premises as more particularly set forth in Section 15. Each of
the other provisions of this Lease shall be applicable to the Equipment and the
use of the Roof Space by Tenant, including without limitation, Sections 12 and
14 of this Lease. The Equipment shall comply with all-non-interference rules of
the Federal Communications Commission. If applicable, Tenant shall provide to
Landlord a copy of (i) the Federal Communications Commission (or other agency)
grant which has awarded frequencies to Tenant and (ii) a list of Tenant’s
frequencies. Anything to the contrary contained herein notwithstanding, if,

43

 

during the Lease Term, as such Term may be extended, Landlord, in its reasonable
judgment, believes that the Equipment poses a human health or environmental
hazard that cannot be remediated or has not been remediated within ten (10) days
after Tenant has been notified thereof, then Tenant shall immediately cease all
operations of the Equipment and Tenant shall remove all of the Equipment within
thirty (30) days thereafter. To the best of Tenant’s knowledge, Tenant
represents to Landlord that the Equipment shall not emit or project any electro-
magnetic fields which pose a human health or environmental hazard. In addition,
Tenant shall be responsible for insuring the Equipment and Landlord shall have
no responsibility therefor. Tenant shall indemnify, defend (by counsel
reasonably acceptable to Landlord) and hold harmless Landlord from any and all
claims, demands, liabilities, damages, judgments, costs and expenses (including
reasonable attorneys’ fees) Landlord may suffer or incur arising out of or
related to the installation, use, operation, maintenance, replacement and/or
removal of the Equipment or any portion thereof.

44. Tenant’s Ability to Perform Landlord’s Unperformed Obligations

     Notwithstanding anything to the contrary contained in this Lease, if
Landlord shall fail to perform any of the terms, provisions, covenants or
conditions to be performed or complied with by Landlord under Section 11.2 of
this Lease with respect only to the Premises (such terms, provisions, covenants
or conditions are referred to herein, collectively as “Landlord Repair
Obligations”) after expiration of all applicable notice and cure periods for
Landlord’s and any mortgagee’s benefit as set forth in Sections 23 and 33,
respectively, then Tenant may, at Tenant’s option and risk, but without any
obligation to do so, after delivery of an additional twenty (20) day prior
written notice to Landlord, perform such Landlord Repair Obligations on
Landlord’s behalf. If Tenant so performs any of such Landlord Repair
Obligations hereunder, then Tenant will perform such Landlord Repair Obligations
(1) in compliance with all applicable Laws, regulations and requirements to
which Landlord would be subject under this Lease (if Landlord were performing
such Landlord Repair Obligations), (2) in a good workmanlike manner using
materials of a quality and grade at least equal to that in place as of the date
of delivery of the Premises to Tenant, if applicable, (3) without interfering
with the rights of other tenants of the Park, and (4) in compliance with the
terms and provisions of Section 10.1 hereof, as applicable. Tenant will
promptly assign to Landlord any warranties or guaranties in respect of any
Landlord Repair Obligations. If Tenant so performs any of such Landlord Repair
Obligations hereunder, the full amount of the fair and reasonable costs and
expenses incurred by Tenant shall be owing by Landlord to Tenant, and Landlord
shall pay to Tenant the full undisputed amount thereof within sixty (60) days of
Landlord’s receipt of Tenant’s written demand therefor together with reasonable
evidence verifying the amount of such costs and expenses.

44

 

     IN WITNESS WHEREOF, this Lease is executed by the parties as of the Lease
Date referenced on Page 1 of this Lease.

	 	 	 	 	 
	Tenant:	 	 
	 
	 	 	 	 
	Foundry Networks, Inc.,

a California corporation
	 
	 	 	 	 
	By:

	 	/s/ Timothy D. Heffner
 
	 	 
	Its:

	 	CFO and Assistant Secretary
 
	 	 
	Date:

	 	September 30, 1999
 
	 	 
	By:

	 	/s/ Bobby R. Johnson
 
	 	 
	Its:

	 	President and CEO
 
	 	 
	Date:

	 	September 30, 1999
 
	 	 
	 
	 	 	 	 
	Landlord:	 	 
	 
	 	 	 	 
	WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,

a Delaware limited partnership
	 
	 	 	 	 
	By:	 	LEGACY PARTNERS COMMERCIAL, INC.,

as manager and agent for WIX/NSJ Real Estate Limited Partnership
	 
	 	 	 	 
	By:

	 	/s/ Barry DiRaimondo

 
	 	 
	 

	 	Senior Vice President	 	 
	 
	 	 	 	 
	Date:

	 	September 30, 1999
 
	 	 

If Tenant is a CORPORATION, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. The Lease must
be executed by the president or vice-president and the secretary or assistant
secretary, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.

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Exhibit A

Premises

This exhibit, entitled “Premises”, is and shall constitute EXHIBIT A to that
certain Lease Agreement dated September 15, 1999 (the “Lease”), by and between
WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
(“Landlord”) and Foundry Networks, Inc., a California corporation (“Tenant”) for
the leasing of certain premises located at 2100 Gold Street, San Jose,
California (the “Premises”).

The Premises consist of the rentable square footage of space specified in the
Basic Lease Information and has the address specified in the Basic Lease
Information. The Premises are a part of and are contained in the Building
specified in the Basic Lease Information. The cross-hatched area depicts the
Premises within the Park:

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Exhibit B to Lease Agreement

Tenant Improvements and Shell Improvements

This exhibit, entitled “Tenant Improvements and Shell Improvements”, is and
shall constitute Exhibit B to that certain Lease Agreement, dated for reference
purposes as of September 15, 1999 (the “Lease”), by and between WIX/NSJ REAL
ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and
Foundry Networks, Inc., a California corporation (“Tenant”) for the leasing of
certain premises located at 2100 Gold Street, San Jose, California (the
“Premises”). The terms, conditions and provisions of this Exhibit B are hereby
incorporated into and are made a part of the Lease. Any capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to such
terms as set forth in the Lease.

1. Tenant Improvements. Subject to the conditions set forth below, Landlord
agrees to construct and install certain improvements (“Tenant Improvements”) in
the Building of which the Premises are a part in accordance with the Approved
Final Drawings (defined below) and the terms of this Exhibit B.

2. Definition. “Tenant Improvements” as used in this Lease shall include only
those interior improvements to be made to the Premises as specified in the
Approved Final Drawings (defined below) and agreed to by Tenant and Landlord in
accordance with the provisions hereof. “Tenant Improvements” shall specifically
not include (i) any alterations, additions or improvements installed or
constructed by Tenant, (ii) any of Tenant’s trade fixtures, security equipment,
equipment, furniture, furnishings, telephone and/or data equipment, telephone
and/or data lines or other personal property, and (iii) any supplemental fire
protection improvements or equipment (collectively, “Tenant’s Installations”).
Landlord shall construct the Tenant Improvements in a good and workmanlike
manner in substantial accordance with the Approved Final Drawings, and in
compliance with the Americans with Disabilities Act as such Act is in effect as
of the Commencement Date.

3. Tenant’s Initial Plans; the Work. Tenant desires Landlord to perform
certain Tenant Improvements in the Premises. The Tenant Improvements shall be in
substantial accordance with the plan(s) and scope of work (collectively, the
“Initial Plans”) . The parties shall meet and confer to agree upon a scope of
work immediately after execution of this Lease and, within fifteen (15) business
days from the date Landlord and Tenant meet to discuss the scope of work,
Landlord’s Architect shall prepare and deliver to Tenant the Initial Plans. A
copy of the Initial Plans shall be attached hereto as Schedule 1, as soon as
practicable thereafter. Such work, as shown in the Initial Plans and as more
fully detailed in the Approved Final Drawings (as defined and described in
Section 4 below), shall be hereinafter referred to as the “Work”. Not later than
five (5) days after the Initial Plans are prepared and delivered to Tenant,
Tenant or Tenant’s Representatives shall furnish to Landlord such additional
plans, drawings, specifications and finish details as Landlord may reasonably
request to enable Landlord’s architects and engineers, as applicable, to prepare
mechanical, electrical and plumbing plans and to prepare the Final Drawings,

47

 

including, but not limited to, a final telephone layout and special electrical
connections, if any. All plans, drawings, specifications and other details
describing the Work which have been, or are hereafter, furnished by or on behalf
of Tenant shall be subject to Landlord’s approval, which approval shall not be
unreasonably withheld. Landlord shall not be deemed to have acted unreasonably
if it withholds its approval of any plans, specifications, drawings or other
details or of any Change Request (hereafter defined in Section 11 below)
because, in Landlord’s reasonable opinion, the work as described in any such
item or any Change Request, as the case may be: (a) is likely to adversely
affect Building systems, the structure of the Building or the safety of the
Building or its occupants; (b) is likely to impair Landlord’s ability to furnish
services to Tenant ; (c) would increase the cost of operating the Park; (d)
would violate any applicable governmental, administrative
body’s or agencies’ laws, rules, regulations, ordinances, codes or similar
requirements (or interpretations thereof); (e) contains or uses Hazardous
Materials; (f) would adversely affect the appearance of the Building or the
Park; (g) is likely to adversely affect another tenant’s premises or such other
tenant’s use and enjoyment of such premises; (h) is prohibited by any ground
lease affecting the Building and/or the Park, any Recorded Matters or any
mortgage, trust deed or other instrument encumbering the Building and/or the
Park; (i) is likely to be substantially delayed because of unavailability or
shortage of labor or materials necessary to perform such work or the
difficulties or unusual nature of such work; (j) is not, at a minimum, in
accordance with Landlord’s Building Standards (defined below); (k) would
increase the Tenant Improvement Costs (defined in Section 9 below) by more than
twenty percent (20%) from the cost originally estimated and anticipated by the
parties; or (l) would delay completion of the Final Drawings, the Approved Final
Drawings and/or the Tenant Improvements. The foregoing reasons, however, shall
not be the only reasons for which Landlord may reasonably withhold its approval,
whether or not such other reasons are similar or dissimilar to the foregoing.
Neither the approval by Landlord of the Work, the Initial Plans or any other
plans, specifications, drawings or other items associated with the Work or any
Change Request nor Landlord’s performance, supervision or monitoring of the Work
shall constitute any warranty or covenant by Landlord to Tenant of the adequacy
of the design for Tenant’s intended use of the Premises. Tenant agrees to, and
does hereby, assume full and complete responsibility to ensure that the design
of the Work and the Approved Final Drawings are adequate to fully meet the needs
and requirements of Tenant’s use and intended operations of its business within
the Premises.

4. Final Drawings and Approved Final Drawings. If necessary for the
performance of the Work, and to the extent not already included as part of the
Initial Plans to be attached hereto, Landlord shall prepare or cause to be
prepared final working drawings and specifications for the Work (the “Final
Drawings”) based on and consistent with the Initial Plans and the other plans,
specifications, drawings, finish details or other information furnished by
Tenant or Tenant’s Representatives to Landlord and approved by Landlord pursuant
to Section 3 above. Tenant shall cooperate diligently with Landlord and
Landlord’s architect, engineer and other representatives and Tenant shall
furnish within five (5) days after any request therefor, all information
required by Landlord or Landlord’s architect, engineer or other representatives

48

 

for completion of the Final Drawings. So long as the Final Drawings are
substantially consistent with the Initial Plans, Tenant shall approve the Final
Drawings within five (5) days after receipt of same from Landlord. Tenant’s
failure to approve or disapprove such Final Drawings within the foregoing five
(5) day time period, shall be conclusively deemed to be disapproval of same by
Tenant and deemed a “Tenant Delay” (as defined herein). If Tenant reasonably
disapproves of any matters included in the Final Drawings because such items are
not substantially consistent with the Initial Plans, Tenant shall, within the
aforementioned five (5) day period, deliver to Landlord written notice of its
disapproval and Tenant shall specify in such written notice, in reasonable
detail the matters disapproved, the reasons for such disapproval, and, if
possible, the specific changes or revisions necessary to be made to the Final
Drawings to cause such drawings to substantially conform to the Initial Plans
(and failure to deliver such notice within such time period shall be a Tenant
Delay). Any additional costs associated with such requested changes or revisions
shall be included as part of the Tenant Improvement Costs (defined below). The
foregoing procedure shall be followed by the parties until the Final Drawings
are acceptable to both Landlord and Tenant. Landlord and Tenant shall indicate
their approval of the Final Drawings by initialing each sheet of the Final
Drawings and delivering to one another a true and complete copy of such
initialed Final Drawings (the “Approved Final Drawings”). A true and complete
copy of the Approved Final Drawings shall be attached to the Lease as
Exhibit B-1 and shall be made a part hereof. Any changes or revisions to the
Approved Final Drawings requested by Tenant must first be approved by Landlord,
which approval shall not be unreasonably withheld, subject to the provisions of
Section 3 above. If Landlord approves such requested changes or revisions,
Landlord shall cause the Approved Final Drawings to be revised accordingly and
Landlord and Tenant shall initial each sheet of the Approved Final Drawings as
Revised and replace and attach a true and complete copy thereof to the Lease as
Exhibit B-1. Landlord and Tenant hereby covenant to each other to cooperate with
each other and to act reasonably in the preparation and approval of the Final
Drawings and the Approved Final Drawings.

5. Performance of Work. As soon as practicable after Tenant and Landlord
initial and attach to the Lease as Exhibit B-1 a true and complete copy of the
Approved Final Drawings, Landlord shall submit the Approved Final Drawings to
the governmental authorities having rights of approval over the Work and shall
apply for the necessary approvals and building permits. Subject to the
satisfaction of all conditions precedent and subsequent to its obligations under
this Exhibit B, and further subject to the provisions of Section 10 hereof, as
soon as practicable after Landlord or its representatives have received all
necessary approvals and building permits, Landlord will put the Approved Final
Drawings out for bid to several licensed and insured general contractors. The
Tenant Improvements shall be constructed by a general contractor selected by
Landlord and reasonably acceptable to Tenant (the “General Contractor”).
Landlord shall commence construction, or cause the commencement of construction
by the General Contractor, of the Tenant Improvements, as soon as practicable
after selection of the General Contractor. Except as hereinafter expressly
provided to the contrary, Landlord shall cause the performance of the Work using
the standard of materials shown in the Approved Final Drawings (“Building
Standards”). Landlord agrees that any such contract with the General Contractor

49

 

shall identify Tenant as a third-party beneficiary thereof and contain a
warranty of the Work of at least one (1) year from such General Contractor.
Prior to Landlord’s execution of any agreement with the General Contractor,
Landlord shall provide to Tenant a copy of such agreement. The terms of such
agreement shall be in Landlord’s sole and absolute discretion.

6. Substantial Completion. Landlord shall cause the General Contractor to
Substantially Complete (defined below) the Tenant Improvements in accordance
with the Approved Final Drawings by the Commencement Date of the Lease as set
forth in Section 2 of the Lease (the “Completion Date”), subject to delays due
to (a) acts or events beyond Landlord’s control including, but not limited to,
acts of God, earthquakes, strikes, lockouts, boycotts, casualties,
discontinuance of any utility or other service required for performance of the
Work, moratoriums, governmental agencies, delays on the part of governmental
agencies, delays in obtaining permits or approvals from governmental agencies
(exclusive of the initial building permit for the Premises) and inclement
weather (including rain delays), (b) the lack of availability or shortage of
specialized materials used in the construction of the Tenant Improvements, (c)
any matters beyond the control of Landlord, the General Contractor or any
subcontractors, (d) any changes required, after the issuance of the initial
building permit for the Premises by the fire department, building and/or
planning department, building inspectors or any other agency having jurisdiction
over the Building, the Work and/or the Tenant Improvements (except to the extent
such changes are directly attributable to Tenant’s use or Tenant’s particular
tenant improvements, in which event such delays are considered Tenant Delays)
(the events and matters set forth in Subsections (a), (b), (c) and (d) are
collectively referred to as “Force Majeure Delays”), or (e) any Tenant Delays
(defined in Section 7 below). The Tenant Improvements shall be deemed
substantially complete on the date that (i) the building officials of the
applicable governmental agency(s) issues its final approval of the construction
of the Tenant Improvements whether in the form of the issuance of a final
permit, certificate of occupancy or the written approval evidencing its final
inspection on the building permit(s), (ii) on which the General Contractor
delivers to both Landlord and Tenant a certificate of substantial completion
wherein the General Contractor shall certify to both Landlord and Tenant that
the Tenant Improvements have been substantially completed in accordance with the
Approved Final Drawings, or (iii) on which Tenant first takes occupancy of the
Premises and actually commences the conduct of its operations from the Premises,
whichever occurs first (“Substantial Completion”, or “Substantially Completed”,
or “Substantially Complete”). Tenant hereby acknowledges and agrees that the term
“Substantial Completion” of the Tenant Improvements as used herein will not include the
completion of any work associated with Tenant’s Installations, including without
limitation, Tenant’s storage requirements, Tenant’s data equipment and
telecommunication systems, and work related to any requirements of governmental
and regulatory agencies with respect to any of Tenant’s Installations. If the
Work is not deemed to be Substantially Completed on or before the scheduled
Completion Date, (i) Landlord agrees to use reasonable efforts to Substantially
Complete the Work as soon as practicable thereafter, (ii) the Lease shall remain
in full force and effect, (iii) Landlord shall not be deemed to be in breach or
default of the Lease or this Exhibit B as a result thereof and Landlord shall
have no liability to Tenant as a result of any delay in occupancy (whether for

50

 

damages, abatement of all or any portion of the Rent, or otherwise), and (iv)
except in the event of any Tenant Delays (which notwithstanding anything to the
contrary contained in the Lease will not affect the Commencement Date but will
extend the Completion Date without any penalty or liability to Landlord), the
Commencement Date and the Expiration Date of the Term of the Lease shall be
extended commensurately by the amount of time attributable to any Force Majeure
Delays. In such event, Landlord and Tenant shall execute a written amendment to
the Lease evidencing such extensions of time, substantially in the form of
Exhibit F to the Lease. Subject to the provisions of Section 10.2 of the Lease,
the Tenant Improvements shall belong to Landlord and shall be deemed to be
incorporated into the Premises for all purposes of the Lease, unless Landlord,
in writing, indicates otherwise to Tenant.

7. Tenant Delays. There shall be no extension of the scheduled Commencement
Date or Expiration Date of the Term of the Lease (as otherwise permissibly
extended in accordance with the provisions of Section 6 above) if the Work has
not been Substantially Completed by the scheduled Commencement Date due to any
delay attributable to Tenant and/or any of Tenant’s Representatives or Tenant’s
acts or omissions or otherwise relating to Tenant’s intended use of the Premises
(collectively, “Tenant Delays”), including, but not limited to, any of the
following described events or occurrences: (a) delays related to changes made or
requested by Tenant to the Work, the Final Drawings and/or the Approved Final
Drawings; (b) the failure of Tenant to furnish timely all or any plans,
drawings, specifications, finish details or other information required under
Sections 3 and 4 above; (c) the failure of Tenant to comply with the
requirements of Section 10 below; (d) Tenant’s requirements for special work or
materials, finishes, or installations other than the Building Standards or
Tenant’s requirements for special construction or phasing; (e) any changes
required by the fire department, building or planning department, building
inspectors or any other agency having jurisdiction over the Building, the Work
and/or the Tenant Improvements if such changes are directly attributable to
Tenant’s particular use or Tenant’s particular tenant improvements; (f) the
completion of any work associated with Tenant’s Installations, including without
limitation, Tenant’s storage requirements, Tenant’s data equipment and
telecommunication systems, and work related to any requirements of governmental
and regulatory agencies with respect to any of Tenant’s Installations; (g) the
performance of any additional work pursuant to a Change Request that is
initiated by Tenant; (h) the performance of work in or about the Premises by any
person, firm or corporation employed by or on behalf of Tenant during the period
prior to the Commencement Date, including, without limitation, any failure to
complete or any delay in the completion of such work; and/or (i) any and all
delays caused by or arising from the acts or omissions of Tenant and/or Tenant’s
Representatives, in any manner whatsoever, including, but not limited to, any
and all revisions to the Approved Final Drawings and Approved Final Drawings.
Notwithstanding anything to the contrary contained in the Lease, any delays in
the construction of the Tenant Improvements due to any Tenant Delays, shall in
no way extend or affect the date on which Tenant is required to commence paying
Rent under the terms of the Lease. It is the intention of the parties that all
of such delays will be considered Tenant Delays for which Tenant shall be wholly
and completely responsible for any and all consequences related to such delays,
including, without limitation, any costs and expenses attributable to increases in labor or materials.

51

 

8. Tenant Improvement Allowance. Subject to the provisions of this Exhibit B,
Landlord shall provide to Tenant an allowance for the planning and construction
of the Tenant Improvements including the Work to be performed in the Premises,
as described in the Initial Plans and the Approved Final Drawings, in the amount
of Two Million Four Hundred Seventy Six Thousand Four Hundred Twenty-Five and
00/100 Dollars ($2,476,425.00) (the “Tenant Improvement Allowance”) based upon
an allowance of Thirty-Five and 00/100 Dollars ($35.00) per rentable square foot
for approximately 70,755 rentable square feet of the Premises to be improved, as
described in the Initial Plans and the Approved Final Drawings. Tenant shall not
be entitled to any credit, abatement or payment from Landlord in the event that
the amount of the Tenant Improvement Allowance specified above exceeds the
actual Tenant Improvement Costs. The Tenant Improvement Allowance shall only be
used for tenant improvements typically installed by Landlord in research and
development buildings. The Tenant Improvement Allowance shall be the maximum
contribution by Landlord for the Tenant Improvement Costs and shall be subject
to the provisions of Section 10 below.

9. Tenant Improvement Costs. The Tenant Improvements’ cost (the “Tenant
Improvement Costs”) shall mean and include any and all costs and expenses of the
Work, including, without limitation, all of the following:

     (a) All costs of preliminary space planning and final architectural and
engineering plans and specifications (including, without limitation, the scope
of work, all plans and specifications, the Initial Plans, the Final Drawings and
the Approved Final Drawings) for the Tenant Improvements, and architectural
fees, engineering costs and fees, and other costs associated with completion of
said plans;

     (b) All engineering costs associated with completion of the State of
California energy utilization calculations under Title 24 legislation;

     (c) All costs of obtaining building permits and other necessary
authorizations and approvals from all local governmental authorities and all
other applicable agencies and entities having jurisdiction thereof;

     (d) All costs of interior design and finish schedule plans and
specifications including as-built drawings, if applicable;

     (e) All direct and indirect costs of procuring, constructing and installing
the Tenant Improvements in the Premises, including, but not limited to, the
construction fee for overhead and profit, the cost of all on-site supervisory
and administrative staff, office, equipment and temporary services rendered by
Landlord’s consultants (excluding the cost of any outside construction
management services employed by Landlord, if any, which costs shall be paid by
Landlord from Landlord’s management fee described in Section 9(j) below) and the
General Contractor in connection with construction of the Tenant Improvements,
and all labor (including overtime) and materials constituting the Work;

52

 

     (f) All fees payable to the General Contractor, architect and Landlord’s
engineering firm if they are required by Tenant to redesign any portion of the
Tenant Improvements following Tenant’s approval of the Approved Final Drawings;

     (g) Utility connection fees;

     (h) Inspection fees and filing fees payable to local governmental
authorities, if any;

     (i) All costs of all permanently affixed equipment and non-trade fixtures
provided for in the Approved Final Drawings, including the cost of installation;
and,

     (j) A construction management fee payable to Landlord in the amount of
three percent (3%) of all direct and indirect costs of procuring, constructing
and installing the Tenant Improvements in the Premises and the Building.

10. Change Requests. No changes or revisions to the Approved Final Drawings
shall be made by either Landlord or Tenant unless approved in writing by both
parties. Upon Tenant’s request and submission by Tenant (at Tenant’s sole cost
and expense) of the necessary information and/or plans and specifications for
any changes or revisions to the Approved Final Drawings and/or for any work
other than the Work described in the Approved Final Drawings (“Change Requests”)
and the approval by Landlord of such Change Request(s), which approval Landlord
agrees shall not be unreasonably withheld, Landlord shall perform the additional
work associated with the approved Change Request(s), at Tenant’s sole cost and
expense, subject, however, to the following provisions of this Section 11.
Prior to commencing any additional work related to the approved Change
Request(s), Landlord shall submit to Tenant a written statement of the cost of
such additional work and a proposed tenant change order therefor (“Change
Order”) in the standard form then in use by Landlord. Tenant shall execute and
deliver to Landlord such Change Order and shall pay the entire cost of such
additional work in the following described manner. Any costs related to such
approved Change Request(s) and Change Order shall be added to the Tenant
Improvement Costs and shall be paid for by Tenant as and with any Excess Tenant
Improvement Costs as set forth in Section 10 above. Any delays associated with
any Change Request or Change Order shall be considered a Tenant Delay. The
billing for such additional costs to Tenant shall be accompanied by evidence of
the amounts billed as is customarily used in the business. Costs related to
approved Change Requests and Change Orders shall include without limitation, any
architectural or design fees, Landlord’s construction fee for overhead and
profit, the cost of all on-site supervisory and administrative staff, office,
equipment and temporary services rendered by Landlord and/or Landlord’s
consultants, and the General Contractor’s price for effecting the change. If
Tenant fails to execute or deliver such Change Order, or to pay the costs
related thereto, then Landlord shall not be obligated to do any additional work
related to such approved Change Request(s) and/or Change Orders, and Landlord
may proceed to perform only the Work, as specified in the Approved Final
Drawings. Landlord shall equitably adjust the amount of the Tenant Improvement
Costs for any deletions in the scope of the Work.

53

 

11. Termination. If the Lease is terminated prior to the Completion Date, for
any reason due to the default of Tenant hereunder, in addition to any other
remedies available to Landlord under the Lease, Tenant shall pay to Landlord as
Additional Rent under the Lease, within five (5) days of receipt of a statement
therefor, any and all costs incurred by Landlord and not reimbursed or otherwise
paid by Tenant through the date of termination in connection with the Tenant
Improvements to the extent planned, installed and/or constructed as of such date
of termination, including, but not limited to, any costs related to the
demolition and/or removal of all or any portion of the Tenant Improvements and
restoration costs related thereto. Subject to the provisions of Section 10.2 of
the Lease, upon the expiration or earlier termination of the Lease, Tenant shall
not be required to remove the Tenant Improvements it being the intention of the
parties that the Tenant Improvements are to be considered incorporated into the
Building. Notwithstanding anything to the contrary contained herein, Landlord
shall have the right to terminate the Lease, as more particularly set forth in
Section 2.1 of the Lease, if Landlord is unable to obtain a building permit for
the Tenant Improvements , by December 31, 1999.

12. Tenant Access. Landlord, in Landlord’s reasonable discretion and upon
receipt of a written request from Tenant and written confirmation from the
General Contractor that such limited entry will be in harmony with the General
Contractor’s work schedule with respect to the Tenant Improvements, may
grant Tenant a license to have access to the Premises prior to the Completion
Date to allow Tenant to do other work required by Tenant to install the Tenant
Installations and to otherwise make the Premises ready for Tenant’s use and
occupancy (the “Tenant’s Pre-Occupancy Work”). It shall be a condition to the
grant by Landlord and continued effectiveness of such license that:

     (a) Tenant shall give to Landlord a written request to have such access not
less than ten (10) business days prior to the date on which such proposed access
will commence (the “Access Notice”). The Access Notice shall contain or be
accompanied by each of the following items, all in form and substance reasonably
acceptable to Landlord: (i) a detailed description of and schedule for Tenant’s
Pre-Occupancy Work; (ii) the names and addresses of all contractors,
subcontractors and material suppliers and all other representatives of Tenant
who or which will be entering the Premises on behalf of Tenant to perform
Tenant’s Pre-Occupancy Work or will be supplying materials for such work, and
the approximate number of individuals, itemized by trade, who will be present in
the Premises; (iii) copies of all contracts, subcontracts, material purchase
orders, plans and specifications pertaining to Tenant’s Pre-Occupancy Work; (iv)
copies of all licenses and permits required in connection with the performance
of Tenant’s Pre-Occupancy Work; and (v) certificates of insurance (in amounts
satisfactory to Landlord and with the parties identified in, or required by, the
Lease named as additional insureds).

     (b) Tenant shall indemnify, defend and hold the Indemnitees harmless from
and against any and all claims, liens, actions, costs, expenses (including
without limitation, attorneys’ fees and costs), penalties, fines, and damages
arising from or related to, in any manner whatsoever, the Tenant’s Pre-Occupancy
Work.

54

 

     (c) Such pre-term access by Tenant and Tenant’s employees, agents,
contractors, consultants, workmen, mechanics, suppliers and invitees shall be
subject to scheduling by Landlord.

     (d) Tenant’s employees, agents, contractors, consultants, workmen,
mechanics, suppliers and invitees shall fully cooperate, work in harmony and
not, in any manner, interfere with Landlord or Landlord’s agents or
representatives in performing the Work and any additional work pursuant to
approved Change Orders, Landlord’s work in other areas of the Building or the
Park, or the general operation of the Park. If at any time any such person
representing Tenant shall not be cooperative or shall otherwise cause or
threaten to cause any such disharmony or interference, including without
limitation, labor disharmony, and Tenant fails to immediately institute and
maintain corrective actions as directed by Landlord, then Landlord may revoke
such license upon twenty-four (24) hours’ prior written notice to Tenant.

     (e) Any such entry into and limited occupancy of the Premises or any
portion thereof by Tenant or any person or entity working for or on behalf of
Tenant shall be deemed to be subject to all of the terms, covenants, conditions
and provisions of the Lease, excluding only the covenant to pay Rent. Landlord
shall not be liable for any injury, loss or damage that may occur to any of
Tenant’s Pre-Occupancy Work made in or about the Premises or to any property
placed therein prior to the commencement of the Term of the Lease, the same
being at Tenant’s sole risk and liability. Tenant shall be liable to Landlord
for any damage to any portion of the Premises, the Work or the additional work
related to any approved Change Orders caused by Tenant or any of Tenant’s
employees, agents, contractors, consultants, workmen, mechanics, suppliers and
invitees. In the event that the performance of Tenant’s Pre-Occupancy Work
causes extra costs to be incurred by Landlord or requires the use of other
Building services, after delivery to Tenant of prior notice that such extra
costs are reasonably anticipated by Landlord to be incurred Tenant shall
promptly reimburse Landlord for such extra costs within ten (10) days after
receipt of written demand therefor and/or shall pay Landlord for such other
Building services at Landlord’s standard rates then in effect.

13. Lease Provisions; Conflict. The terms and provisions of the Lease, insofar
as they are applicable, in whole or in part, to this Exhibit B, are hereby
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this Exhibit B, the terms of this Exhibit B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.

55

 

Exhibit C to Lease Agreement

Rules & Regulations

This exhibit, entitled “Rules & Regulations”, is and shall constitute EXHIBIT C
to that certain Lease Agreement dated September 15, 1999 (the “Lease”), by and
between WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
(“Landlord”) and Foundry Networks, Inc., a California corporation (“Tenant”) for
the leasing of certain premises located at 2100 Gold Street, San Jose,
California (the “Premises”). The terms, conditions and provisions of this
EXHIBIT C are hereby incorporated into and are made a part of the Lease. Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease:

1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent of
Landlord. Landlord shall have the right to remove any such unapproved item
without notice and at Tenant’s expense.

2. Tenant shall not use any method of heating or air conditioning other than
that supplied by Landlord without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed.

3. All window coverings installed by Tenant and visible from the outside of
the Building require the prior written approval of Landlord.

4. Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance or any flammable or combustible materials on or around the
Premises, the Building or the Park that are not in compliance with the
provisions of the Lease.

5. Tenant shall not alter any lock or install any new locks or bolts on any
door at the Premises without the prior consent of Landlord.

6. Tenant shall park motor vehicles in those general parking areas as
designated by Landlord except for loading and unloading. During those periods
of loading and unloading, Tenant shall not unreasonably interfere with traffic
flow within the Park and loading and unloading areas of other Tenants.

7. Tenant shall not disturb, solicit or canvas any occupant of the Building or
Park and shall cooperate to prevent same.

8. No person shall go on the roof without Landlord’s permission.

9. Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building, to
such a degree as to be objectionable to Landlord or other Tenants, shall be placed
and maintained by Tenant, at Tenant’s expense, on vibration eliminators or
other devices sufficient to eliminate noise or vibration.

56

 

10. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in parking or receiving areas overnight.

11. Tractor trailers which must be unhooked or parked with dolly wheels beyond
the concrete loading areas must use steel plates or wood blocks under the dolly
wheels to prevent damage to the asphalt paving surfaces. No parking or storing
of such trailers will be permitted in the auto parking areas of the Park or on
streets adjacent thereto.

12. Forklifts which operate on asphalt paving areas shall not have solid rubber
tires and shall only use tires that do not damage the asphalt.

13. Tenant is responsible for the storage and removal of all trash and refuse.
All such trash and refuse shall be contained in suitable receptacles stored
behind screened enclosures at locations approved by Landlord.

14. Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort in or around the Premises, the
Building, the Park or any of the Common Areas of the foregoing. No displays or
sales of merchandise shall be allowed in the parking lots or other Common Areas.

15. Tenant shall not permit any animals, including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the Building,
the Park or any of the Common Areas of the foregoing.

16. Tenant shall not permit any motor vehicles to be washed on any portion of
the Premises or in the Common Areas of the Park, nor shall Tenant permit
mechanical work or maintenance of motor vehicles to be performed on any portion
of the Premises or in the Common Areas of the Park.

57

 

Exhibit E

Hazardous Materials Disclosure Certificate

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as Tenant. After a lease agreement is signed by you and the Landlord
(the “Lease Agreement”), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in confidence
by Landlord subject to release and disclosure as required by (i) any lenders and
owners and their respective environmental consultants, (ii) any prospective
purchaser(s) of all or any portion of the property on which the Premises are
located, (iii) Landlord to defend itself or its lenders, partners or
representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:

Landlord:

 

 

c/o Legacy Partners Commercial, Inc.

101 Lincoln Centre Drive, Fourth Floor

Foster City, California 94404

Attn:

 

Phone: (650) 571-2200

Name of (Prospective) Tenant:

 

Mailing Address:

 

 

Contact Person, Title and Telephone Number(s):

 

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):

 

58

 

 

Address of (Prospective) Premises:

 

Length of (Prospective) Initial Term:

 

 

1. General Information:

     Describe the initial proposed operations to take place in, on, or about the
Premises, including, without limitation, principal products processed,
manufactured or assembled services and activities to be provided or otherwise
conducted. Existing Tenants should describe any proposed changes to on-going
operations.

 

 

2. Use, Storage and Disposal of Hazardous Materials

     2.1 Will any Hazardous Materials be used, generated, stored or
disposed of in, on or about the Premises? Existing Tenants should describe any
Hazardous Materials which continue to be used, generated, stored or disposed of
in, on or about the Premises.

Wastes                                Yes o     No o

Chemical Products             Yes o     No o

Other                                  Yes o     No o

     If Yes is marked, please explain:

 

 

 

     2.2 If Yes is marked in Section 2.1, attach a list of any Hazardous
Materials to be used, generated, stored or disposed of in, on or about the
Premises, including the applicable hazard class and an estimate of the
quantities of such Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage (excluding nominal
amounts of ordinary household cleaners and janitorial supplies which are not
regulated by any Environmental Laws); and the proposed location(s) and method of
disposal for each Hazardous Material, including, the estimated frequency, and
the proposed contractors or subcontractors. Existing Tenants should attach a
list setting forth the information requested above and such list should include

59

 

actual data from on-going operations and the identification of any variations in
such information from the prior year’s certificate.

3. Storage Tanks and Sumps

     3.1 Is any above or below ground storage of gasoline, diesel,
petroleum, or other Hazardous Materials in tanks or sumps proposed in, on or
about the Premises? Existing Tenants should describe any such actual or
proposed activities.

Yes o     No o

If yes, please explain:

 

 

 

4. Waste Management

     4.1 Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing Tenants should describe any additional identification numbers
issued since the previous certificate.

Yes o     No o

     4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing Tenants should describe any new reports
filed.

Yes o     No o

If yes, attach a copy of the most recent report filed.

5. Wastewater Treatment and Discharge

     5.1 Will your company discharge wastewater or other wastes to:

storm drain?                    sewer?

                                                            

surface water?                 no wastewater or other wastes discharged.

                                                            

          Existing Tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).

 

 

60

 

     5.2 Will any such wastewater or waste be treated before discharge?

Yes o     No o

              If yes, describe the type of treatment proposed to be conducted.
Existing Tenants should describe the actual treatment conducted.

 

 

6. Air Discharges

     6.1 Do you plan for any air filtration systems or stacks to be used in
your company’s operations in, on or about the Premises that will discharge into
the air; and will such air emissions be monitored? Existing Tenants should
indicate whether or not there are any such air filtration systems or stacks in
use in, on or about the Premises which discharge into the air and whether such
air emissions are being monitored.

Yes o     No o

If yes, please describe:

 

 

 

     6.2 Do you propose to operate any of the following types of equipment,
or any other equipment requiring an air emissions permit? Existing Tenants
should specify any such equipment being operated in, on or about the Premises.

Spray booth(s)                 Incinerator(s)

                                                            

Dip tank(s)                      Other (Please describe)

                                                            

Drying oven(s)                No Equipment Requiring Air Permits

                                                            

If yes, please describe:

 

 

 

7. Hazardous Materials Disclosures

61

 

     7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan (“Management Plan”) pursuant to Fire
Department or other governmental or regulatory agencies’ requirements? Existing
Tenants should indicate whether or not a Management Plan is required and has
been prepared.

Yes o     No o

If yes, attach a copy of the Management Plan. Existing Tenants
should attach a copy of any required updates to the Management Plan.

     7.2 Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises regulated
under Proposition 65? Existing Tenants should indicate whether or not there are
any new Hazardous Materials being so used which are regulated under Proposition
65.

Yes o     No o

If yes, please explain:

 

 

 

8. Enforcement Actions and Complaints

     8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement actions, administrative
orders, or consent decrees or has your company received requests for
information, notice or demand letters, or any other inquiries regarding its
operations? Existing Tenants should indicate whether or not any such actions,
orders or decrees have been, or are in the process of being, undertaken or if
any such requests have been received.

Yes o     No o

     If yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders or decrees
and also describe any requests, notices or demands, and attach a copy of all
such documents. Existing Tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Section 29 of the signed Lease Agreement.

 

 

     8.2 Have there ever been, or are there now pending, any lawsuits

62

 

against your company regarding any environmental or health and safety concerns?

Yes o     No o

     If yes, describe any such lawsuits and attach copies of the complaint(s),
cross-complaint(s), pleadings and all other documents related thereto as
requested by Landlord. Existing Tenants should describe and attach a copy of
any new complaint(s), cross-complaint(s), pleadings and other related documents
not already delivered to Landlord pursuant to the provisions of Section 29 of
the signed Lease Agreement.

 

 

     8.3 Have there been any problems or complaints from adjacent Tenants,
owners or other neighbors at your company’s current facility with regard to
environmental or health and safety concerns? Existing Tenants should indicate
whether or not there have been any such problems or complaints from adjacent
Tenants, owners or other neighbors at, about or near the Premises.

Yes o     No o

     If yes, please describe. Existing Tenants should describe any such
problems or complaints not already disclosed to Landlord under the provisions of
the signed Lease Agreement.

 

 

9. Permits and Licenses

     9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company with respect to its
proposed operations in, on or about the Premises, including, without limitation,
any wastewater discharge permits, air emissions permits, and use permits or
approvals. Existing Tenants should attach copies of any new permits and
licenses as well as any renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord’s/Tenant’s receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or

63

 

otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant’s indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord’s acceptance of such
certificate, (ii) Landlord’s review and approval of such certificate, (iii)
Landlord’s failure to obtain such certificate from Tenant at any time, or (iv)
Landlord’s actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant’s Representatives. Notwithstanding
the foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness
thereof in entering into the Lease Agreement and the continuance thereof
throughout the term, and any renewals thereof, of the Lease Agreement.

I (print
name)                                         , acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.

(Prospective) Tenant:

By:

 

Title:

 

Date:

 

64

 

Exhibit F

First Amendment to Lease Agreement

Change of Commencement Date

This First Amendment to Lease Agreement (the “Amendment”) is made and entered
into to be effective as of ____________, by and between
__________________ (“Landlord”), and __________________
(“Tenant”), with reference to the following facts:

Recitals

A. Landlord and Tenant have entered into that certain Lease Agreement dated
____________ (the “Lease”), for the leasing of certain premises containing
approximately ____________ rentable square feet of space located at
__________________, California (the “Premises”) as such Premises are
more fully described in the Lease.

B. Landlord and Tenant wish to amend the Commencement Date of the Lease.

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

     1. Recitals: Landlord and Tenant agree that the above recitals are true
and correct.

     2. The Commencement Date of the Lease shall be _______________.

     3. The last day of the Term of the Lease (the “Expiration Date”) shall
be _______________.

     4. The dates on which the Base Rent will be adjusted are:

for the period ____ to ____ the monthly Base Rent shall be $___________;

for the period ____ to ____ the monthly Base Rent shall be $______; and

for the period ____ to ____ the monthly Base Rent shall be $__________.

     5. Effect of Amendment: Except as modified herein, the terms and conditions
of the Lease shall remain unmodified and continue in full force and effect. In
the event of any conflict between the terms and conditions of the Lease and this
Amendment, the terms and conditions of this Amendment shall prevail.

     6. Definitions: Unless otherwise defined in this Amendment, all terms not
defined in this Amendment shall have the meaning set forth in the Lease.

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     7. Authority: Subject to the provisions of the Lease, this Amendment shall
be binding upon and inure to the benefit of the parties hereto, their respective
heirs, legal representatives, successors and assigns. Each party hereto and the
persons signing below warrant that the person signing below on such party’s
behalf is authorized to do so and to bind such party to the terms of this
Amendment.

     8. The terms and provisions of the Lease are hereby incorporated in this
Amendment.

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

[PROPERTY MANAGER: Please provide Tenant information and Word Processing will
complete the signature block]

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EXHIBIT G

TENANT’S INITIAL HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as Tenant. After a lease agreement is signed by you and the Landlord
(the “Lease Agreement”), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:

Landlord: WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,

	 	 	a Delaware limited partnership

c/o Legacy Partners Commercial, Inc.

101 Lincoln Centre Drive, Fourth Floor

Foster City, California 94404

Attn: Portfolio Vice President

Phone: (650) 571-2200

Name of (Prospective) Tenant: Foundry Networks, Inc.

Mailing Address:

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 

Contact Person, Title and Telephone Number(s):

	 	 	 
	 

	 	 

Contact Person for Hazardous Waste Materials Management and Manifests and

Telephone Number(s):

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 

Address of (Prospective) Premises:

	 	 	 
	 

	 	 

Length of (Prospective) Initial Term:

	 	 	 
	 
	 	
 
	 
	 	 

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1. General Information:

     Describe the initial proposed operations to take place in, on, or about the
Premises, including, without limitation, principal products processed,
manufactured or assembled services and activities to be provided or otherwise
conducted. Existing Tenants should describe any proposed changes to on-going
operations.

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 

2. Use, Storage and Disposal of Hazardous Materials

     2.1 Will any Hazardous Materials be used, generated, stored or disposed of
in, on or about the Premises? Existing Tenants should describe any Hazardous
Materials which continue to be used, generated, stored or disposed of in, on or
about the Premises.

Wastes                               Yes o No o 

Chemical Products            Yes o No o 

Other                                   Yes o No o 

If Yes is marked, please explain:

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

     2.2 If Yes is marked in Section 2.1, attach a list of any Hazardous
Materials to be used, generated, stored or disposed of in, on or about the
Premises, including the applicable hazard class and an estimate of the
quantities of such Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage (excluding nominal
amounts of ordinary household cleaners and janitorial supplies which are not
regulated by any Environmental Laws); and the proposed location(s) and method of
disposal for each Hazardous Material, including, the estimated frequency, and
the proposed contractors or subcontractors. Existing Tenants should attach a
list setting forth the information requested above and such list should include
actual data from on-going operations and the identification of any variations in
such information from the prior year’s certificate.

3. Storage Tanks and Sumps

     3.1 Is any above or below ground storage of gasoline, diesel, petroleum,

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or other Hazardous Materials in tanks or sumps proposed in, on or about the
Premises? Existing Tenants should describe any such actual or proposed
activities.

Yes o No o 

If Yes is marked, please explain:

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

4. Waste Management

     4.1 Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing Tenants should describe any additional identification numbers

issued since the previous certificate.

Yes o No o 

     4.2 Has your company filed a biennial or quarterly reports as a hazardous
waste generator? Existing Tenants should describe any new reports filed.

Yes  o  No  o 

If yes, attach a copy of the most recent report filed.

5. Wastewater Treatment and Discharge

     5.1 Will your company discharge wastewater or other wastes to:

______ storm drain? _____ sewer?

______ surface water? _____ no wastewater or other wastes discharged.

     Existing Tenants should indicate any actual discharges. If so, describe
the nature of any proposed or actual discharge(s).

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 

5.2 Will any such wastewater or waste be treated before discharge?

Yes  o  No  o 

     If yes, describe the type of treatment proposed to be conducted. Existing
Tenants should describe the actual treatment conducted.

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 

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6. Air Discharges

     6.1 Do you plan for any air filtration systems or stacks to be used in
your company’s operations in, on or about the Premises that will discharge into
the air; and will such air emissions be monitored? Existing Tenants should
indicate whether or not there are any such air filtration systems or stacks in
use in, on or about the Premises which discharge into the air and whether such
air emissions are being monitored.

Yes  o  No  o 

If Yes is marked, please explain:

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

     6.2 Do you propose to operate any of the following types of equipment, or
any other equipment requiring an air emissions permit? Existing Tenants should
specify any such equipment being operated in, on or about the Premises.

______ Spray booth(s) ______ Incinerator(s)

______ Dip tank(s) ______ Other (Please describe)

______ Drying oven(s) ______ No Equipment Requiring Air Permits

If Yes is marked, please explain:

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

7. Hazardous Materials Disclosures

     7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan (“Management Plan”) pursuant to Fire
Department or other governmental or regulatory agencies’ requirements? Existing
Tenants should indicate whether or not a Management Plan is required and has
been prepared.

Yes  o  No  o 

     If yes, attach a copy of the Management Plan. Existing Tenants should
attach a copy of any required updates to the Management Plan.

     7.2 Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises regulated under Proposition 65? Existing Tenants should indicate whether or not there are

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any new Hazardous Materials being so used which are regulated under Proposition 65.

Yes  o  No  o 

     If Yes is marked, please explain:

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

8. Enforcement Actions and Complaints

     8.1 With respect to Hazardous Materials or Environmental Laws, has your
company ever been subject to any agency enforcement actions, administrative
orders, or consent decrees or has your company received requests for
information, notice or demand letters, or any other inquiries regarding its
operations? Existing Tenants should indicate whether or not any such actions,
orders or decrees have been, or are in the process of being, undertaken or if
any such requests have been received.

Yes  o  No  o 

     If yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders or decrees
and also describe any requests, notices or demands, and attach a copy of all
such documents. Existing Tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Section 29 of the signed Lease Agreement.

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 

     8.2 Have there ever been, or are there now pending, any lawsuits against
your company regarding any environmental or health and safety concerns?

Yes  o  No  o 

          If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other documents related
thereto as requested by Landlord. Existing Tenants should describe and attach a
copy of any new complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 

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     8.3 Have there been any problems or complaints from adjacent Tenants,
owners or other neighbors at your company’s current facility with regard to
environmental or health and safety concerns? Existing Tenants should indicate
whether or not there have been any such problems or complaints from adjacent
Tenants, owners or other neighbors at, about or near the Premises.

Yes  o  No  o 

     If yes, please describe. Existing Tenants should describe any such
problems or complaints not already disclosed to Landlord under the provisions of the signed Lease Agreement.

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 

9. Permits and Licenses

     9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company with respect to its
proposed operations in, on or about the Premises, including, without limitation,
any wastewater discharge permits, air emissions permits, and use permits or
approvals. Existing Tenants should attach copies of any new permits and
licenses as well as any renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord’s/Tenant’s receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant’s indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord’s acceptance of such
certificate, (ii) Landlord’s review and approval of such certificate, (iii)
Landlord’s failure to obtain such certificate from Tenant at any time, or (iv)
Landlord’s actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant’s Representatives. Notwithstanding
the foregoing or anything to the contrary contained herein, the undersigned

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acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness
thereof in entering into the Lease Agreement and the continuance thereof
throughout the term, and any renewals thereof, of the Lease Agreement.

I (print name)____________, acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.

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(Prospective) Tenant:

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 
	 	 
	 	Title: 
	 	 	 
	 

	 	 
	 	 
	 	Date:
	 	 	 
	 

	 	 
	 	 

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EXHIBIT H

SIGN CRITERIA

     TO BE ATTACHED

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Exhibit I

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

This Subordination, Non-Disturbance and Attornment Agreement (this “Agreement”)
dated _________, 19___, is made among________________________, (“Tenant”)
_________________________________________________________ (“Landlord”), and
_________________________________________________________ (“Mortgagee”).

     WHEREAS, Mortgagee is the owner of a promissory note (herein, as it may
have been or may be from time to time renewed, extended, amended or
supplemented, called the “Note”) dated ____________, 19___, executed by
Landlord, payable to the order of Mortgagee, in the principal face amount of
$____________, bearing interest and payable as therein provided, secured by,
among other things, a Deed of Trust (herein, as it may have been or may be from
time to time renewed, extended, amended or supplemented, called the “Deed of
Trust”), recorded in the office of the County Clerk of ____________ County,
California, covering, among other property, the land (the “Land”) described in
Exhibit “A” which is attached hereto and incorporated herein by reference, and
the improvements (the “Improvements”) thereon (such Land and Improvements being
herein together called the “Property”);

     WHEREAS, Tenant and Landlord executed a certain Lease Agreement dated
____________, 19___, (herein, as it may from time to time be renewed, extended,
amended or supplemented, called the “Lease”), covering a portion of the Property
(said portion being herein referred to as the “Premises”); and

     WHEREAS, the term “Landlord” as used herein means the present landlord
under the Lease or, if the landlord’s interest is transferred to any manner, the
successor(s) or assign(s) occupying the position of landlord under the Lease at
the time in question;

     THEREFORE, in consideration of the mutual agreements herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

     1. Subordination. Tenant agrees and covenants that the Lease and the
rights of Tenant thereunder, all of Tenant’s right, title and interest in and to
the property covered by the Lease, and any lease hereafter executed by Tenant
covering any part of the Property, are and shall be subordinate and inferior to
(a) the Deed of Trust and the rights of Mortgagee thereunder, and all right,
title and interest of Mortgagee in the Property, and (b) all other security
documents now or hereafter securing payment of any indebtedness of the Landlord
(or any prior Landlord) to Mortgagee which cover or affect the Property (the
“Security Documents”). This Agreement is not intended and shall not be construed
to subordinate the Lease to any mortgage, deed of trust or other security
document other than those referred to in the preceding sentence, securing the
indebtedness to Mortgagee. Without limitation of any other provision hereof,
Mortgagee may, at its option and without joinder or further consent of Tenant,
Landlord, or anyone else, at any time after the date hereof subordinate the lien
of the Deed of Trust (or any other lien or security interest held by Mortgagee

76

 

which covers or affects the Property) to the Lease by executing an instrument
which is intended for that purpose and which specifies such subordination; and,
in the event of any such election by Mortgagee to subordinate, Tenant will
execute any documents required to evidence such subordination; provided however,
notwithstanding that the Lease may be unilateral subordination by Mortgagee
hereafter be made superior to the lien of the Deed of Trust, the provisions of
the Deed of Trust relative to the rights of Mortgagee with respect to proceeds
arising from an eminent domain taking (including a voluntary conveyance by
Landlord) and/or insurance payable to reason of damage to or destruction of the
Premises shall be prior and superior to and shall control over any contrary
provisions in the Lease.

     2. Non-Disturbance. Mortgagee agrees that so long as the Lease is in full
force and effect and Tenant is not in default in the payment of rent, additional
rent or other payments or in the performance of any of the other terms,
covenants or conditions of the Lease on Tenant’s part to be performed (beyond
the period, if any, specified in the Lease within which Tenant may cure such
default),

     (a) Tenant’s possession of the Premises under the Lease shall not be
disturbed or interfered with by Mortgagee in the exercise of any of its rights
under the Mortgage, including any foreclosure or conveyance in lieu of
foreclosure, and

     (b) Mortgagee will not join Tenant as a party defendant for the purpose
of terminating Tenant’s interest and estate under the Lease in any proceeding
for foreclosure of the Mortgage.

     3. Attornment.

     (a) Tenant covenants and agrees that in the event of foreclosure of the
Mortgage, whether by power of sale or by court action, or upon a transfer of the
Property by conveyance in lieu of foreclosure (the purchaser at foreclosure or
the transferee in lieu of foreclosure, including Mortgagee if it is such
purchaser or transferee, being herein called “New Owner”), Tenant shall attorn
to the New Owner as Tenant’s new landlord, and agrees that the Lease shall
continue in full force and effect as a direct lease between Tenant and New Owner
upon all of the terms, covenants, conditions and agreements set forth in the
Lease and this Agreement, except for provisions which are impossible for
Mortgagee to perform; provided, however, that in no event shall the New Owner
be:

     (i) liable for any act, omission, default, misrepresentation, or
breach of warranty, of any previous landlord (including Landlord) or obligations
accruing prior to New Owner’s actual ownership of the property; (other than for
a default by Landlord arising from Landlord’s failure to perform any maintenance
or repair obligation required of Landlord under the Lease if, and only if, (i)
Tenant has provided New Owner with written notice of such default and an
opportunity to cure the same in accordance with the requirements of Section 5

77

 

hereof prior to exercising any of Tenant’s rights under the Lease, (ii) Tenant
duly exercises its rights under the Lease to cure such default by making such
repairs or performing such maintenance to the Premises or the Building on behalf
of Landlord (1) in compliance with all applicable laws (2) with materials of a
quality and grade at least as equal to that in place as of the date of delivery
of the Premises to Tenant, and (3) without interference with the rights of other
tenants of the Property, (iii) the total liability for such default shall not
exceed the fair and reasonable cost to Tenant to make such repairs or perform
such maintenance on Landlord’s behalf);

     (ii) subject to any offset, defense, claim or counterclaim which
Tenant might be entitled to assert against any previous landlord (including
Landlord); except with respect to offsets arising from Tenant’s repairs to or
maintenance of the Premises or the Building in accordance with subparagraph (i)
above;

     (iii) bound by any payment of rent, additional rent or other
payments, made by Tenant to any previous landlord (including Landlord) for more
than one (1) month in advance;

     (iv) bound by any amendment, or modification of the Lease
hereafter made, or consent by any previous landlord (including Landlord) under
the Lease to any assignment or sublease hereafter granted, without the written
consent of Mortgagee; or

     (v) liable for any deposit that Tenant may have given to any
previous landlord (including Tenant) which has not, as such, been transferred to
New Owner.

     (b) The provisions of this Agreement regarding attornment by Tenant
shall be self-operative and effective without the necessity of execution of any
new lease or other document on the part of any party hereto or the respective
heirs, legal representatives, successors or assigns of any such party. Tenant
agrees, however, to execute and deliver at any time and from time to time, upon
the request of Landlord or of any holder(s) of any of the indebtedness or other
obligations secured by the Mortgage, any instrument or certificate which, in the
reasonable judgement of Landlord or of such holder(s), may be necessary or
appropriate in any such foreclosure proceeding or otherwise to evidence such
attornment, including, if requested, a new lease of the Premises on the same
terms and conditions as the Lease for the then unexpired term of the Lease
including the Extended Term, if any.

     4. Estoppel Certificate. Tenant agrees to execute and deliver from time
to time, upon the request of Landlord or of any holder(s) of any of the
indebtedness or other obligations secured by the Mortgage, a certificate
regarding the status of the Lease in a form reasonably acceptable to Tenant,
consisting of statements, if true (or if not, specifying why not), (a) that the
Lease is in full force and effect, (b) the date through which rentals have been
paid, (c) the date of the commencement of the term of the Lease, (d) the nature
of any amendments or modifications of the Lease, (e) that no default, or state
of facts which with the passage of time or notice (or both) would constitute a

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default, exists under the Lease, and (f) such other matters as may be reasonable
requested.

     5. Acknowledgement and Agreement by Tenant. Tenant acknowledges and
agrees as follows:

     (a) Tenant acknowledges that Landlord will execute and deliver to
Mortgagee in connection with the financing of the Property the Deed of Trust
which assigns the rent and all other sums due under the Lease to Mortgagee.
Tenant hereby expressly consents to such [absolute assignment] [collateral
assignment] and agrees that such assignment shall, in all respects, be superior
to any interest Tenant has in the Lease of the Property, subject to the
provision of the Agreement. Tenant will not amend, alter, terminate, or waive
any provision of, or consent to the amendment, alteration, termination or waiver
of any provision of the Lease without the prior written consent of Mortgagee,
and no termination of the Lease, whether pursuant to the terms of the Lease or
otherwise, will be effective without prior written consent of Mortgagee. Tenant
shall not prepay any rents or other sums due under the lease for more than one
(1) month in advance of the due date therefor. Tenant acknowledges that
Mortgagee will rely upon this instrument in connection with such financing.

     (b) Mortgagee, in making any disbursements to Landlord, is under no
obligation or duty to oversee or direct the application of the proceeds of such
disbursements, and such proceeds may be used by Landlord for purposes other than
improvement of the Property.

     (c) From and after the date hereof, in the event of any act or omission
by Landlord which would give Tenant the right, either immediately or after the
lapse of time, to terminate the Lease or to claim a partial or total eviction,
Tenant will not exercise any such right (i) until it has given written notice of
such act or omission to the Mortgagee; and (ii) until the same period of time as
is given to Landlord under the Lease to cure such act or omission shall have
elapsed following such giving of notice to Mortgagee and following tile time
when Mortgagee shall have become entitled under the Mortgage to remedy the same,
but in any event 30 days after receipt of such notice or such longer period of
time as may be necessary to cure or remedy such default, act, or omission
including such period of time necessary to obtain possession of the Property and
thereafter cure such default, act, or omission, during which period of time
Mortgagee shall be permitted to cure or remedy such default; act or omission;
provided, however that Mortgagee shall have no duty or obligation to cure or remedy any
beach of default. It is specifically agreed that Tenant shall not, as to
Mortgagee, require cure of any such default which is personal to Landlord, and
therefore not susceptible to cure by Mortgagee.

     (d) In the event that Mortgagee notifies Tenant of a default under the
Mortgage, Note, or Security Documents and demands that Tenant pay its rent and
all other sums due under the Lease directly to Mortgagee, Tenant shall honor
such demand and pay the full amount of its rent and all other sums due under the
Lease directly to Mortgagee or as otherwise required pursuant to such notice
beginning with the payment next due after such notice of default, without
inquiry as to whether a default actually exists under the Mortgage, Security

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Documents or otherwise in connection with the Note, and notwithstanding any
contrary instructions of or demands from Landlord.

     (e) Tenant shall send a copy of any notice or statement under the Lease
to Mortgagee at the same time such notice or statement is sent to Landlord.

     (f) Tenant has no right or option of any nature whatsoever, whether
pursuant to the Lease or otherwise, to purchase the Premises or the Property, or
any portion thereof or any interest therein, and to the extent that Tenant has
had, or hereafter acquires, any such right or option, same is hereby
acknowledged to be subject and subordinate to the Mortgage and is hereby waived
and released as against Mortgagee.

     (g) This Agreement satisfies any condition or requirement in the Lease
relating to the granting of a non-disturbance agreement and Tenant waives any
requirement to the contrary in the Lease.

     (h) Mortgagee and any New Owner shall have no liability to Tenant or
any other party for any conflict between the provisions of the Lease and the
provisions of any other lease affecting the Property, including, but not limited
to, any provisions relating to exclusive or non-conforming uses or rights,
renewal options and options to expand, and in the event of such a conflict,
Tenant shall have no right to cancel the Lease or take any other remedial action
against Mortgagee or New Owner, or against any other party for which Mortgagee
or any New Owner would be liable.

     (i) Mortgagee and any New Owner shall have no obligation nor incur any
liability with respect to the erection or completion of the improvements in
which the Premises are located or for completion of the Premises or any
improvements for Tenant’s use and occupancy, either at the commencement of the
term of the Lease or upon any renewal or extension thereof or upon the addition
of additional space, pursuant to any expansion rights contained in the Lease.

     (j) Mortgagee and any New Owner shall have no obligation nor incur any
liability with respect to any warranties of any nature whatsoever, whether
pursuant to the Lease or otherwise, including, without limitation, any
warranties respecting use, compliance with zoning, Landlord’s title, Landlord’s
authority, habitability, fitness for purpose or possession.

     (k) In the event that Mortgagee or any New Owner shall acquire title to
the Premises or the Property, Mortgagee or such New Owner shall have no
obligation, nor incur any liability, beyond Mortgagee’s or New Owner’s then
equity interest, if any, in the Property or the Premises, and Tenant shall look
exclusively to such equity interest or Mortgagee or New Owner, if any, for the
payment and discharge of any obligations imposed upon Mortgagee or New Owner
hereunder or under the Lease or for recovery of any judgement from Mortgagee, or
New Owner, and in no event shall Mortgagee, New Owner, nor any of their
respective officers, directors, shareholders, agents, representatives, servants,
employees or partners ever by personally liable for such judgement.

     (l) Nothing herein contained is intended, nor shall it be construed, to

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abridge or adversely affect any right or remedy of Landlord under the Lease in
the event of any default by Tenant in the payment of rent and/or any other sums
due under the Lease or in the performance of any of the other terms, covenants
or conditions of the Lease on Tenant’s part to be performed.

     (m) Landlord has not agreed to any abatement of rent or other sums or
period of “free rent” for the Premises unless same is specifically provided in
the Lease, and Tenant agrees that in the event Mortgagee, or any New Owner
becomes the owner of the Property, no agreement for abatement of rent or any
other sum not specifically provided in the Lease will be binding on Mortgagee or
New Owner.

     (n) Tenant have never permitted, and will not permit, the generation,
treatment, storage or disposal of any hazardous substance as defined under
federal, state, or local law, on the Premises or Property except for such
substances of a type and only in a quantity normally used in connection with the
occupancy or operation of buildings (such a non-flammable cleaning fluids and
supplies normally used in the day to day operation of first class [office or
retail establishments]) which substances are being held, stored, and used in
strict compliance with federal, state, and local laws. Tenant shall be solely
responsible for and shall reimburse Landlord for any loss, liability, claim or
expense, including without limitation, cleanup and all other expenses, that
Landlord may incur by reason of Tenant’s violation of the requirements of this
Paragraph 5(n).

     6. Acknowledgement and Agreement by Landlord. Landlord, as landlord under
the Lease and grantor under the Mortgage, acknowledges and agrees for itself and
its heirs, representative, successors and assigns, that: (a) this Agreement does
not constitute a waiver by Mortgagee of any of its rights under the Mortgage,
Note, or Security Documents, or in any way release Landlord from its obligations
to comply with the terms, provisions, conditions, covenants, agreements and
clauses of the Mortgage, Note, or Security Documents; (b) the provisions of the
Mortgage, Note, or Security Documents remain in full force and effect and must
be complied with by Landlord; and (c) Tenant is hereby authorized to pay its
rent and all other sums due under the Lease directly to Mortgagee upon receipt
of a notice as set forth in paragraph 5(d) above from Mortgagee and that Tenant
is not obligated to inquire as to whether a default actually exists under the
Mortgage, Security Documents or otherwise is connection with the Note. Landlord
hereby releases and discharges Tenant of and from any liability to Landlord
resulting from Tenant’s payment to Mortgagee in accordance with this Agreement.
Landlord represents and warrants to Mortgagee that a true and complete copy of
the Lease has been delivered by Landlord to Mortgagee.

     7. Lease Status. Landlord and Tenant certify to Mortgagee that neither
Landlord nor Tenant has knowledge of any default on the part of the other under
the Lease, and the Lease is bona fide and contains all of the agreements of the
parties thereto with respect to the letting of the Premises and that all of the
agreements and provisions therein contained are in full force and effect.

     8. Notices. All notices, requests, consents, demands and other
communications required or which any parties desires to give hereunder shall be

81

 

in writing and shall be deemed sufficiently given or furnished if delivered by
personal delivery, by telegram, telex, or facsimile, by expedited delivery
service with proof of delivery, or by registered or certified United States
mail, postage prepaid, at the addresses specified at the end of this Agreement
(unless changed by similar notice in writing given by the particular party whose
address is to be changed). Any such notice or communication shall be deemed to
have been given either at the time of personal delivery or, in the case of
delivery service or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or, in the case of telegram, telex or
facsimile, upon receipt. Notwithstanding the foregoing, no notice of change of
address shall be effective except upon receipt. This Paragraph 8 shall not be
construed in any way to affect or impair any waiver of notice or demand provided
in this Agreement or in the lease or in any document evidencing, securing or
pertaining to the loan evidenced by the Note or to require giving of
notice or demand to or upon any person in any situation or for any reason.

     9. Miscellaneous.

     (a) This Agreement supersedes any inconsistent provision of the Lease.

     (b) Nothing contained in this Agreement shall be construed to derogate
from in any way impair, or affect the lien, security interest or provisions of
the Mortgage, Note, or Security Documents.

     (c) This Agreement shall inure to the benefit of the parties hereto,
their respective successors and permitted assigns, and any New Owner, and its
heirs, personal representatives, successors and assigns; provided, however, that
in the event of the assignment or transfer of the interest of Mortgagee, all
obligations and liabilities of the assigning Mortgagee under this Agreement
shall terminate, and thereupon all such obligations and liabilities shall be the
responsibility of the party to whom Mortgagee’s interest is assigned or
transferred; and provided further that the interest of Tenant under this
Agreement may not be assigned or transferred without the prior written consent
of Mortgagee.

     (d) THIS AGREEMENT AND, ITS VALIDITY, ENFORCEMENT AND INTERPRETATION
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, AND APPLICABLE UNITED
STATES FEDERAL LAW EXCEPT ONLY TO THE EXTENT, IF ANY, THAT THE LAWS OF THE STATE
IN WHICH THE PROPERTY IS LOCATED NECESSARILY CONTROL.

     (e) The words “herein”, “hereof”, hereunder” and other similar
compounds of the word “here” as used in this Agreement refer to this entire
Agreement and not to any particular section or provision.

     (f) This Agreement may not be modified orally or in any manner other
than by an agreement in writing signed by the parties hereto or their respective
successors in interest.

     (g) If any provision of the Agreement shall be held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not apply to or affect any other provision hereof, but

82

 

this Agreement shall be construed as if such invalidity, illegibility, or
unenforceability did not exist.

     (h) If any bankruptcy proceedings shall hereafter commence with respect
to Landlord, and if the Lease is rejected by the trustee pursuant to section 365
(L) of the United States Bankruptcy Code, Tenant agrees with Mortgagee (i) not
to treat such lease as terminated, and (ii) to remain in possession of the
Premises.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

83

 

	 	 	 	 	 	 	 	 	 
	Address or Mortgagee:	 	Mortgagee:	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address of Tenant:	 	Tenant:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address of Landlord:	 	Landlord:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	c/o Legacy Partners Commercial, Inc.	 	 	 	 	 	 
	101 Lincoln Centre Drive, Fourth Floor	 	 	 	 	 	 
	Foster City, California 94404	 	 	 	 	 	 
	Attention:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

84

 

Addendum 1

Option to Extend the Lease

This Addendum 1 (“Addendum”) is incorporated as a part of that certain Lease
Agreement dated September15, 1999 (the “Lease”), by and between Foundry
Networks, Inc., a California corporation (“Tenant”), and WIX/NSJ REAL ESTATE
LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”), for the
leasing of those certain premises located at 2100 Gold Street, San Jose,
California as more particularly described in Exhibit A to the Lease (the
“Premises”). Any capitalized terms used herein and not otherwise defined herein

shall have the meaning ascribed to such terms as set forth in the Lease.

1. Grant of Extension Option. Subject to the provisions, limitations and
conditions set forth in Paragraph 5 below, Tenant shall have an Option
(“Option”) to extend the term of the Lease for five (5) years (the “Extended
Term”).

2. Tenant’s Option Notice. If Landlord does not receive written notice from
Tenant of its exercise of this Option on a date which is not more than two
hundred seventy (270) days nor less than one hundred eighty (180) days prior to
the end of the initial term of the Lease (the “Option Notice”), all rights under
this Option shall automatically terminate and shall be of no further force or
effect.

3. Establishing the Initial Monthly Base Rent for the Extended Term. The
initial monthly Base Rent for the Extended Term shall be the then current market
rent for similar space within the competitive market area of the Premises (the
“Fair Rental Value”). “Fair Rental Value” of the Premises means the fair market
rental value of the Premises as of the commencement of the Extended Term, taking
into consideration all relevant factors, including length of term, the uses
permitted under the Lease, the quality, size, design and location of the
Premises, including the condition and value of existing tenant improvements,
free rent periods, tenant improvement allowances, brokerage commissions, and the
monthly base rental paid by tenants for premises comparable to the
Premises, and located within the competitive market area of the Premises as
reasonably determined by Landlord.

If Landlord and Tenant are unable to agree on the Fair Rental Value for either
the Extended Term, within ten (10) days of receipt by Landlord of the Option
Notice for the Extended Term, Landlord and Tenant each, at its cost and by
giving notice to the other party, shall appoint a competent and disinterested
commercial real estate broker (hereinafter “broker”) with at least five (5)
years’ full-time commercial real estate brokerage experience in the geographical
area of the Premises to set the Fair Rental Value for the Extended Term. If
either Landlord or Tenant does not appoint a broker within ten (10) days after
the other party has given notice of the name of its broker, the single broker

85

 

appointed shall be the sole broker and shall set the Fair Rental Value for the
Extended Term. If two (2) brokers are appointed by Landlord and Tenant as stated
in this paragraph, they shall meet promptly and attempt to set the Fair Rental
Value. If the two (2) brokers are unable to agree within ten (10) days after the
second broker has been appointed, they shall attempt to select a third broker,
meeting the qualifications stated in this paragraph within ten (10) days after
the last day the two (2) brokers are given to set the Fair Rental Value. If they
are unable to agree on the third broker, either Landlord or Tenant by giving ten
(10) days’ notice to the other party, can apply to the Presiding Judge of the
Superior Court of the county in which the Premises is located for the selection
of a third broker who meets the qualifications stated in this paragraph.
Landlord and Tenant each shall bear one-half (1/2) of the cost of appointing the
third broker and of paying the third broker’s fee. The third broker, however
selected, shall be a person who has not previously acted in any capacity for
either Landlord or Tenant. Within fifteen (15) days after the selection of the
third broker, the third broker shall select one of the two Fair Rental Values
submitted by the first two brokers as the Fair Rental Value for the Extended
Term. Such third broker determination shall be binding on Landlord and Tenant.
If either of the first two brokers fails to submit their opinion of the Fair
Rental Value, then the single Fair Rental Value submitted shall automatically be
the monthly Base Rent for the Extended Term.

Upon determination of the initial monthly Base Rent for the Extended Term in
accordance with the terms outlined above, Landlord and Tenant shall immediately
execute, an amendment to this Lease. Such amendment shall set forth among other
things, the initial monthly Base Rent for the Extended Term and the actual
commencement date and expiration date of the Extended Term. Tenant shall have no
other right to extend the term of the Lease under this Addendum unless Landlord
and Tenant otherwise agree in writing.

4. Condition of Premises and Brokerage Commissions for the Extended Term. If
Tenant timely and properly exercises this Option, in strict accordance with the
terms contained herein: (1) Tenant shall accept the Premises in its then “As-
Is” condition and, accordingly, Landlord shall not be required to perform any
additional improvements to the Premises; and (2) Tenant hereby agrees that it
will be solely responsible for any and all brokerage commissions and finder’s
fees payable to any broker now or hereafter procured or hired by Tenant or who
otherwise claims a commission based on any act or statement of Tenant (“Tenant’s
Broker”) in connection with the Option; and Tenant hereby further agrees that
Landlord shall in no event or circumstance be responsible for the payment of any
such commissions and fees to Tenant’s Broker.

5. Limitations On, and Conditions To, Extension Option. This Option is
personal to Tenant and may not be assigned, voluntarily or involuntarily,
separate from or as part of the Lease. At Landlord’s option, all rights of
Tenant under this Option shall terminate and be of no force or effect if any of
the following individual events occur or any combination thereof occur: (1)
Tenant has been in material default more than twice during the initial term of
the Lease, or is in material default of any provision of the Lease on the date

86

 

of the Option Notice; and/or (2) Tenant has assigned its rights and obligations
under all or part of the Lease or Tenant has subleased more than ten percent
(10%) of the Premises, except to a Related Entity; and/or (3) Between the Lease
Date and the time the Option Notice is delivered there has occurred a material
and adverse change in Tenant’s financial condition; and/or (4) Tenant has failed
to properly exercise this Option in a timely manner in strict accordance with
the provisions of this Addendum; and/or (5) Tenant no longer has possession of
all or any part of the Premises under the Lease (unless a Related Entity has
possession of the Premises), or if the Lease has been terminated earlier,
pursuant to the terms of the Lease.

6. Time is of the Essence. Time is of the essence with respect to each and
every time period described in this Addendum.

87

 

Addendum 2

Right of First Refusal

This Addendum 2 is incorporated as a part of that certain Lease Agreement dated
September 15, 1999, by and between Foundry Networks, Inc., a
California corporation (“Tenant”), and WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership corporation (“Landlord”), for the Premises
located at 2100 Gold Street, San Jose, California 95002 (the “Premises”).

During the initial term of the Lease only, Tenant shall have a one time First
Right to Lease (“Right of First Refusal”) the space within the Building commonly
known as 2130 Gold Street, San Jose, California, and containing approximately
26,000 square feet on the first (1st) floor of the Building, located at 2130
Gold Street, San Jose, California, as outlined on Exhibit A attached hereto and
made a part hereof (the “Expansion Space”). Tenant’s right, as granted herein,
is subject to the following conditions:

     i. Tenant’s Right of First Refusal shall be void if, at any time, Tenant
has been, more than two (2) times during the Term of this Lease in material
default or is currently in material default in the performance of any of its
obligations under the Lease;

     ii. Tenant’s Right of First Refusal shall be subject to Landlord’s review
and approval of Tenant’s then current financial condition; and

     iii. Tenant’s Right of First Refusal shall be subject to the rights of the
then existing tenant pursuant to its existing Lease, as such Lease may be
modified, amended or extended.

Provided the above conditions are satisfied, and upon Landlord’s receipt of a
bona fide third party offer to lease the Expansion Space which Landlord is
willing to accept (other than by the current occupant of the Expansion Space),
Landlord will notify Tenant in writing (i) that Landlord has received such third
party offer and (ii) of all material terms of such third party offer to lease
such Expansion Space to Tenant. Tenant shall have three (3) business days after
delivery of such notice to notify Landlord in writing (“Election Notice”) of
Tenant’s election to lease all the Expansion Space upon those terms. If Tenant
fails to notify Landlord of Tenant’s election to lease the Expansion Space
within the time specified herein, it shall be deemed that (i) Tenant has elected
not to lease said Expansion Space; (ii) Landlord may thereafter enter into a
Lease Agreement with a third party; and (iii) all rights under this Right of
First Refusal shall terminate and be of no further force and effect. Time is of
the essence herein.

In the event Tenant exercises this Right of First Refusal as herein provided,
Tenant shall provide Landlord a $25,000.00 nonrefundable deposit, and the
parties shall have ten (10) working days after Landlord receives the Election
Notice from Tenant in which to execute an amendment to the Lease setting forth
the agreed-upon terms. Upon full execution of an amendment for the Expansion

88

 

Space, the nonrefundable deposit shall be credited toward Rent or security
deposit for the Expansion Space, as agreed between the parties.

This Right of Refusal shall terminate and be of no force and effect if, at any
time, the Premises are being subleased at the time of this Right of First
Refusal is offered, except to a Related Entity.

Upon determination of the initial monthly Base Rent for the Extended Term in
accordance with the terms outlined above, Landlord and Tenant shall immediately
execute, an amendment to this Lease. Such amendment shall set forth among other
things, the initial monthly Base Rent for the Extended Term and the actual
commencement date and expiration date of the Extended Term. Tenant shall have no
other right to extend the term of the Lease under this Addendum unless Landlord
and Tenant otherwise agree in writing.

4. Condition of Premises and Brokerage Commissions for the Extended Term. If
Tenant timely and properly exercises this Option, in strict accordance with the
terms contained herein: (1) Tenant shall accept the Premises in its then “As-
Is” condition and, accordingly, Landlord shall not be required to perform any
additional improvements to the Premises; and (2) Tenant hereby agrees that it
will be solely responsible for any and all brokerage commissions and finder’s
fees payable to any broker now or hereafter procured or hired by Tenant or who
otherwise claims a commission based on any act or statement of Tenant (“Tenant’s
Broker”) in connection with the Option; and Tenant hereby further agrees that
Landlord shall in no event or circumstance be responsible for the payment of any
such commissions and fees to Tenant’s Broker.

5. Limitations On, and Conditions To, Extension Option. This Option is
personal to Tenant and may not be assigned, voluntarily or involuntarily,
separate from or as part of the Lease. At Landlord’s option, all rights of
Tenant under this Option shall terminate and be of no force or effect if any of
the following individual events occur or any combination thereof occur: (1)
Tenant has been in material default more than twice during the initial term of
the Lease, or is in material default of any provision of the Lease on the date
of the Option Notice; and/or (2) Tenant has assigned its rights and obligations
under all or part of the Lease or Tenant has subleased more than ten percent
(10%) of the Premises, except to a Related Entity; and/or (3) Between the Lease
Date and the time the Option Notice is delivered there has occurred a material
and adverse change in Tenant’s financial condition; and/or (4) Tenant has failed
to properly exercise this Option in a timely manner in strict accordance with
the provisions of this Addendum; and/or (5) Tenant no longer has possession of
all or any part of the Premises under the Lease (unless a Related Entity has
possession of the Premises), or if the Lease has been terminated earlier,
pursuant to the terms of the Lease.

6. Time is of the Essence. Time is of the essence with respect to each and
every time period described in this Addendum.

89

 

Addendum 2

Right of First Refusal

This Addendum 2 is incorporated as a part of that certain Lease Agreement dated
September 15, 1999, by and between Foundry Networks, Inc., a
California corporation (“Tenant”), and WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership corporation (“Landlord”), for the Premises
located at 2100 Gold Street, San Jose, California 95002 (the “Premises”).

During the initial term of the Lease only, Tenant shall have a one time First
Right to Lease (“Right of First Refusal”) the space within the Building commonly
known as 2130 Gold Street, San Jose, California, and containing approximately
26,000 square feet on the first (1st) floor of the Building, located at 2130
Gold Street, San Jose, California, as outlined on Exhibit A attached hereto and
made a part hereof (the “Expansion Space”). Tenant’s right, as granted herein,
is subject to the following conditions:

     i. Tenant’s Right of First Refusal shall be void if, at any time, Tenant
has been, more than two (2) times during the Term of this Lease in material
default or is currently in material default in the performance of any of its
obligations under the Lease;

     ii. Tenant’s Right of First Refusal shall be subject to Landlord’s review
and approval of Tenant’s then current financial condition; and

     iii. Tenant’s Right of First Refusal shall be subject to the rights of the
then existing tenant pursuant to its existing Lease, as such Lease may be
modified, amended or extended.

Provided the above conditions are satisfied, and upon Landlord’s receipt of a
bona fide third party offer to lease the Expansion Space which Landlord is
willing to accept (other than by the current occupant of the Expansion Space),
Landlord will notify Tenant in writing (i) that Landlord has received such third
party offer and (ii) of all material terms of such third party offer to lease
such Expansion Space to Tenant. Tenant shall have three (3) business days after
delivery of such notice to notify Landlord in writing (“Election Notice”) of
Tenant’s election to lease all the Expansion Space upon those terms. If Tenant
fails to notify Landlord of Tenant’s election to lease the Expansion Space
within the time specified herein, it shall be deemed that (i) Tenant has elected
not to lease said Expansion Space; (ii) Landlord may thereafter enter into a
Lease Agreement with a third party; and (iii) all rights under this Right of
First Refusal shall terminate and be of no further force and effect. Time is of
the essence herein.

In the event Tenant exercises this Right of First Refusal as herein provided,
Tenant shall provide Landlord a $25,000.00 nonrefundable deposit, and the
parties shall have ten (10) working days after Landlord receives the Election
Notice from Tenant in which to execute an amendment to the Lease setting forth
the agreed-upon terms. Upon full execution of an amendment for the Expansion

90

 

Space, the nonrefundable deposit shall be credited toward Rent or security
deposit for the Expansion Space, as agreed between the parties.

This Right of Refusal shall terminate and be of no force and effect if, at any
time, the Premises are being subleased at the time of this Right of First
Refusal is offered, except to a Related Entity.

This Right of First Refusal is personal to Tenant and may not be assigned,
voluntarily or involuntarily, separate from or as a part of the Lease, except to
a Related Entity.

Should Tenant exercise the Right herein, Landlord and Tenant shall execute an
amendment to this Lease, adding the Expansion Space to the Premises and
adjusting the Rent and Tenant’s proportionate share of the items set forth in
Paragraph 3 of this Lease. If Tenant does not elect to exercise the Right
herein, based upon the material terms proposed by Landlord, all Rights under
this Right of First Refusal shall terminate and be of no further force and
effect.

91exv10w7

Exhibit 10.7

(HYPERION LOGO)

900 LONG RIDGE ROAD STAMFORD, CONNECTICUT 06902

TEL
203.705.3000          WWW.HYPERION.COM          FAX
203.595.8900

 

March  30, 2005

 

Cliff Moore

General Counsel

Foundry Networks, Inc.,

4980 Great America Parkway

Santa Clara, CA 95054

Re. Commencement Date
of Sublease: 4980 Great America Parkway, Santa Clara, CA

Dear Cliff:

In regard to that certain Sublease
Agreement dated March 25, 2005 (“Sublease”), by and
between Hyperion Solutions Corporation, a Delaware corporation and
Foundry Networks, Inc., a Delaware corporation for the premises
consisting of an entire five (5) story building comprising
approximately 140,935 square feet of space known as 4980 Great
America Parkway, Santa Clara, California, this letter shall confirm
our understandings and agreements relative to the Sublease
Commencement Date.

Notwithstanding anything to the
contrary contained in the Sublease it is agreed that the Sublease
commenced on March 30, 2005, and shall terminate, unless sooner
terminated pursuant to the terms thereof on
June 5, 2010.

Please acknowledge receipt of this
letter and of the foregoing, by signing below and return one copy of
this letter to me via facsimile at 203-329-6767.

Very truly yours,

/s/ Vincent A. Laurentino

Vincent A. Laurentino

 

AGREED AND ACCEPTED:

 

FOUNDRY NETWORKS, INC.

a Delaware Corporation

 

/s/ Cliff Moore

By: Cliff Moore

Its: V.P. & General Counsel

CC:   Julie
A. Frambach, Esq.

         Paul J. Niewiadomski, Esq.

 

SUBLEASE AGREEMENT

     This Sublease Agreement (“Sublease”) is made effective as of the 25th day of March, 2005, (the
“Effective Date”) by and between Hyperion Solutions Corporation, a Delaware corporation
(“Sublessor”), and Foundry Networks, Inc., a Delaware corporation (“Sublessee”). Sublessor agrees
to sublease to Sublessee, and Sublessee agrees to sublease from Sublessor, those certain premises
situated in the City of Santa Clara, County of Santa Clara, State of California, consisting of an
entire five (5) story building comprising approximately 140,935 square feet of space known as 4980
Great America Parkway, Santa Clara, California, more particularly set forth in the Master Lease,
and in the “as built” condition as set forth on the plans attached hereto and incorporated herein
as Exhibit “A” (the “Subleased Premises”).

ARTICLE 1

MASTER LEASE AND OTHER AGREEMENTS

     1.1 Subordinate to Master Lease. Except as specifically set forth herein, this
Sublease is subject and subordinate to all of the terms and conditions of the lease (the “Original
Lease”) dated December 20, 1999, between Sobrato Development Companies #961, a California limited
partnership (“Master Lessor”) and Sublessor’s predecessor in interest, Brio Technology Inc., a
California corporation (as “Tenant”), as amended by that certain First Amendment to Lease dated
June 8, 2000 (“Amendment”) and as assigned to Sublessor pursuant to that Assignment and Assumption
of Tenants Interest in the Lease dated October 30, 2003 (“Assignment”). The Original Lease, the
Amendment and the Assignment shall hereinafter collectively be referred to as the “Master Lease”.
Sublessee hereby assumes and agrees to perform the obligations of Tenant under the Master Lease
following the Effective Date, as more particularly set forth hereafter. Unless otherwise defined,
all capitalized terms used herein shall have the same meanings as given them in the Master Lease.
A copy of the Master Lease is attached hereto as Exhibit “B” and incorporated herein by this
reference. Sublessor represents and warrants to Sublessee that: (i) the Master Lease attached
hereto is a full and complete copy; and (ii) to Sublessor’s knowledge, as of the Effective Date,
the Master Lease is in full force and effect and to Sublessor’s knowledge, no event has occurred
and is continuing which would constitute an event of default, but for the requirement of giving
notice and/or the expiration of the period of time to cure. As used herein, Sublessor’s knowledge
shall mean the actual present knowledge of Vince Laurentino, without inquiry. Neither Sublessee
nor Sublessor shall commit or permit to be committed any act or omission which would violate any
term or condition of the Master Lease. Sublessee shall neither do nor permit anything to be done
which would cause the Master Lease to be terminated or forfeited by reason of any right of
termination or forfeiture reserved or vested in Master Lessor under the Master Lease, and Sublessee
shall indemnify and hold Sublessor harmless from and against all claims, liabilities, judgments,
costs, demands, penalties, expenses, and damages of any kind whatsoever, including, without
limitation, reasonable attorneys’ fees, consultants’ fees and costs and court costs, (“Claims”) by
reason of any failure on the part of Sublessee to perform any of the obligations of Tenant under
the Master Lease which Sublessee has become obligated hereunder to perform. Sublessor shall
indemnify and hold Sublessee harmless from and against all Claims by reason of any failure on the
part of Sublessor to have performed any of the obligations of Tenant under the Master Lease prior
to the Commencement

-1-

 

Date. In the event of the termination of Sublessor’s interest as Tenant under the Master
Lease for any reason other than for Sublessor’s breach, then this Sublease shall terminate
automatically upon such termination without any liability of Master Lessor or Sublessor to
Sublessee. Sublessee represents and warrants to Sublessor that it has read and is familiar with
the Master Lease.

     1.2 Applicable Provisions. All of the terms and conditions contained in the Master
Lease as they may apply to the Subleased Premises are incorporated herein and shall be terms and
conditions of this Sublease (with each reference therein to “Landlord” or “Lessor”, “Tenant” or
“Lessee” and “Lease” to be deemed to refer to Sublessor, Sublessee, and Sublease, respectively, as
appropriate, except those directly contradicted by the terms and conditions contained in this
document, and specifically except for: paragraph 1; the fourth sentence in paragraph 2; 4.A; 4.D;
5, except the language regarding the assignment of warranties, to the extent any warranties
described therein are still in existence and Sublessor has the right to assign such warranties;
6.A; the reference to the rate of holdover rent in paragraph 6.C, to the extent inconsistent with
Section 12.5 below; the last sentence in 7.A; in paragraph 8.D, the reference to Exhibit “G” shall
be changed to Exhibit “E”; the reference in paragraph 8.G to reimbursement of the cost of capital
improvements or replacements, except to the extent such costs are reimbursed by Master Lessor;
paragraph 11 with respect to rent abatement, except to the extent rent is abated under the Master
Lease; the reference to “four or more times” in paragraph 13.G shall be reduced to “three or more
times”; in paragraph 17.A: (i) the reference to ten (10) days shall be increased to fifteen (15)
days, (ii) any reference to reimbursement of any amount of Tenant Improvement costs is hereby
deleted, and (iii) the last sentence in 17.A is hereby deleted; the first sentence in 17.B; 18; 19;
20.C; 20.M; the reference to “Base Monthly Rent” in paragraph 20.N shall mean and refer to the Base
Monthly Rent under the Master Lease; Exhibit “C” and Exhibit “D”. In addition: (i) with respect to
the following provisions that are incorporated herein, the reference to Landlord shall mean Master
Lessor only: paragraph 8.A; the requirement to obtain Master Lessor’s insurance in paragraph 9.B;
15; 16; and 17.G; and (ii) with respect to the following provisions that are incorporated herein,
the reference to Landlord shall mean Master Lessor and Sublessor: paragraph 3.B; 3.C; 7.B;12.A;
12.B; 12.D; 20.G; 20.H; and 20.T. In addition to the foregoing all of the following terms and
conditions set forth in this document, shall constitute the complete terms and conditions of this
Sublease.

     1.3 Obligations of Sublessor. Notwithstanding anything herein contained, the only
services or rights to which Sublessee is entitled hereunder are those to which Sublessor is
entitled under the Master Lease, and for all such services and rights Sublessee shall look solely
to the Master Lessor under the Master Lease, and the obligations of Sublessor hereunder shall be
limited to using its reasonable good faith efforts to obtain the performance by Master Lessor of
its obligations, provided Sublessee shall reimburse Sublessor for all reasonable costs incurred by
Sublessor in such efforts. Sublessor shall have no liability to Sublessee or any other person for
damage of any nature whatsoever as a result of the failure of Master Lessor to perform said
obligations except for Master Lessor’s termination of the Sublessor’s interest as Tenant under the
Master Lease in the event of Sublessor’s breach of the Master Lease, and Sublessee shall indemnify
and hold Sublessor harmless from any and all Claims whatsoever in defending against same.
Sublessor shall not agree to any voluntary amendment, modification or termination of the Master
Lease which will materially and adversely effect Sublessee’s occupancy of the Subleased Premises or
Sublessee’s use of the Subleased Premises for their intended purpose, unless

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Sublessor shall first obtain Sublessee’s prior written approval thereof, which consent shall
not be unreasonably withheld, conditioned or delayed. With respect to any obligation of Sublessee
to be performed under this Sublease, when the Master Lease grants Sublessor a specific number of
days to perform its obligations thereunder, Sublessee shall have two (2) fewer days to perform,
provided, however, in no event shall Sublessee have less than one (1) business day to perform its
obligations. With respect to approval required to be obtained by “Landlord” under the Master
Lease, such consent must be obtained from Master Lessor and Sublessor and the approval of Sublessor
may be withheld if Master Lessor’s consent is not obtained.

ARTICLE 2

TERM

     2.1 Term. The term of this Sublease shall commence on April 1, 2005. This shall be
referred to as the “Commencement Date.” The term of this Sublease shall end on June 5, 2010,
unless sooner terminated pursuant to any provision of the Master Lease applicable to the Subleased
Premises (the “Expiration Date”). Sublessor shall have no obligation to Sublessee to exercise any
of its options to extend under the Master Lease. At the time Sublessor delivers possession of the
Subleased Premises to Sublessee, Sublessor and Sublessee shall together execute a commencement date
memorandum. Sublessor shall have no obligation to deliver possession, nor shall Sublessee be
entitled to take occupancy of the Subleased Premises until such commencement date memorandum has
been executed and Sublessee’s obligation to pay Base Rent and additional rent shall not be excused
or delayed because of Sublessee’s failure to execute such commencement date memorandum.

     2.2 Option to Extend. Sublessee shall have no option to extend this Sublease. In
addition, provided Sublessee is not in default hereunder during the entire period of time within
which Sublessor has the right to exercise its right to extend the Master Lease, Sublessor agrees
that it shall not exercise such right under the Master Lease.

     2.3 Sublessor’s Inability to Deliver Subleased Premises. In the event Sublessor is
unable to deliver possession of the Subleased Premises on or before April 1, 2005, Sublessor shall
not be liable for any damage caused thereby, nor shall this Sublease be void or voidable.
Provided Sublessee is not in default hereunder or the cause of the delay: (i) Sublessee shall not
be liable for Rent until such time as Sublessor offers to deliver possession of the Subleased
Premises to Sublessee; and (ii) Sublessee’s six (6) month free rent period shall not be reduced as
a result of any such delay, but the term hereof shall not be extended by such delay. If Sublessee,
with Sublessor’s consent, takes possession prior to commencement of the term, Sublessee shall do so
subject to all the covenants and conditions hereof, including, without limitation, providing
evidence of all required insurance, payment of the deposit and prepaid rent, except for the
obligation to pay Base Rent (defined in Section 3.1 below).

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ARTICLE 3

RENT

     3.1 Rent. Sublessee shall pay to Sublessor each month as base rent (“Base Rent”) for
the Subleased Premises according to the following Schedule:

	 	 	 	 	 	 	 	 	 
	 	 	Rate per Rentable Square Foot	 	 	 	 
	 	 	(“RSF”) on a	 	 	 	 
	Month	 	Triple Net Basis (“NNN”)	 	 	Month Base Rent	 
	Months 1-6
	 	$0.00 per RSF, NNN	 	$	0	 
	Months 07-12
	 	$0.90 per RSF, NNN	 	$	126,841.50	 
	Months 13-24
	 	$0.95 per RSF, NNN	 	$	133,888.25	 
	Months 25-36
	 	$1.00 per RSF, NNN	 	$	140,935.00	 
	Months 37-48
	 	$1.05 per RSF, NNN	 	$	147,981.75	 
	Months 49-60
	 	$1.10 per RSF, NNN	 	$	155,028.50	 
	Months 61-end of term
	 	$1.15 per RSF, NNN	 	$	162,075.25	 

Base Rent shall be due in advance on or before the first of each month during the term of the
Sublease. All sums payable by Sublessee hereunder shall be in lawful money of the United States of
America, without offset or deduction and without prior demand and shall be paid to the Sublessor at
Hyperion Solutions Corporation, 900 Long Ridge Road, Stamford, Connecticut 06902, Attn: Real Estate
Director, or at any other place Sublessor may from time to time designate by written notice mailed
or delivered to Sublessee. Base Rent for partial months at the commencement or termination of this
Sublease shall be prorated. Upon execution hereof, Sublessee shall pay to Sublessor Base Rent in
the amount of One Hundred Twenty-Six Thousand Eight Hundred Forty-One and 50/100 Dollars
($126,841.50)1 to be applied to the seventh (7th) month of the Sublease term.

     3.2 Additional Rent. If Sublessor shall be charged for additional rent or other sums pursuant
to any of the provisions of the Master Lease (except to the extent such additional rent or sums
results from Sublessor’s failure to perform its obligations pursuant to this Sublease), including,
without limitation, Reimbursable Operating Costs, Taxes, and the Asset Management Fee pursuant to
paragraph 20.N of the Master Lease (and as set forth on Exhibit “D” attached hereto and
incorporated by this reference which for the first month of the term shall be Five Thousand Four
Hundred Sixty and 62/100 Dollars ($5,460.62)2, subject to proration for partial months), Sublessee
shall be liable for such additional rent or sums and Sublessee shall make such payment to Sublessor
or Master Lessor, as Sublessor shall direct. Upon execution hereof, Sublessee shall pay to
Sublessor, its proportionate share of the 2004-2005 Taxes, from the period from the Commencement
Date to June 30, 2005, estimated to be Forty-Eight Thousand Twenty-One and 45/100 Dollars
($48,021.45)3. If Sublessee shall procure any additional services from

	 	 	Due on execution: One Hundred Eighty Thousand Three Hundred Twenty-Three and 57/100 Dollars ($180,323.57):
	 
	1	 	$126,841.50
	 
	2	 	$ 5,460.62
	 
	3	 	$ 48,021.45

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Master Lessor, or if additional rent or other sums are incurred for Sublessee’s sole benefit,
Sublessee shall make such payment to Sublessor or Master Lessor, as Sublessor shall direct. Any
other rent or other sums payable by Sublessee under this Article 3 shall constitute and be due as
additional rent. Base Rent and additional rent shall herein be referred to as “Rent”.

     3.3 Under Protest. Sublessee may reasonably designate any payment required under the
Master Lease as being paid “under protest” and thereafter request that Sublessor exercise its
rights under the Master Lease with respect to such disputed payment, provided, however: (i)
Sublessor shall not be required to expend more than nominal sums, unless Sublessee provides
additional security, nor expend a significant amount of other resources; (ii) Sublessee shall be
responsible for all costs and expenses with respect to such exercise of Sublessor’s rights, which
shall be reimbursed by Sublessee within three (3) days of written demand therefore; (iii) Sublessee
shall indemnify and hold Sublessor harmless from any Claims that result from such exercise; (iv)
Sublessor may refuse Sublessee’s request if such refusal is commercially reasonable; and (v)
Sublessor may impose as a condition to its exercise of such rights such requirements as Sublessor
may deem reasonable and desirable, including, but not limited to the requirement that Sublessee
provide additional security for the performance of Sublessee’s obligations under this Section 3.3.

ARTICLE 4

SECURITY DEPOSIT

     4.1 Security Deposit. Upon execution hereof, Sublessee shall deposit with Sublessor
the sum of One Hundred Sixty-Two Thousand Seventy-Five and 25/100 Dollars ($162,075.25) as and for
a deposit to secure Sublessee’s full and timely performance of all of its obligations hereunder.
If Sublessee fails to pay Rent or any other sums as and when due hereunder, or otherwise defaults
and/or fails to perform with respect to any provision of this Sublease, Sublessor may (but shall
not be obligated to) use, apply, or retain all or any portion of said deposit for payment of any
sum for which Sublessee is obligated or which will compensate Sublessor for any foreseeable or
unforeseeable loss or damage which Sublessor may suffer thereby including, without limitation, any
damage that will result in the future through the term of the Sublease, to repair damage to the
Subleased Premises, to clean the Subleased Premises at the end of the term or for any loss or
damage caused by the act or omission of Sublessee or Sublessee’s officers, agents, employees,
independent contractors or invitees. Sublessee waives the provisions of California Civil Code
Section 1950.7 and all other provisions of law now in force or that become in force after the date
of execution of this Sublease that provide that Sublessor may claim from a security deposit only
those sums reasonably necessary to remedy defaults in the payment of Rent, to repair damage caused
by Sublessee or to clean the Subleased Premises. Any such use, application, or retention shall
not constitute a waiver by Sublessor of its right to enforce its other remedies hereunder, at law,
or in equity. Sublessor agrees to provide written notice to Sublessee of any use, application or
retention of the deposit by Sublessor. If any portion of said deposit is so used, applied, or
retained, Sublessee shall, within ten (10) days after delivery of written demand from Sublessor,
restore said deposit to its original amount. Sublessor shall not be a trustee of such deposit, and
shall not be required to keep this deposit separate from its accounts. Sublessor alone shall be
entitled to any interest or earnings thereon and Sublessor shall have the free use of same. If
Sublessee fully and faithfully performs all of its

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obligations hereunder, then so much of the deposit as remains shall be returned to Sublessee
(without payment of interest or earnings thereon) within 30 days after the later of (i) expiration
or sooner termination of the term hereof, or (ii) Sublessee’s surrender of possession of the
Subleased Premises to Sublessor.

ARTICLE 5

CONDITION OF SUBLEASED PREMISES

     5.1 Condition of the Subleased Premises. Sublessor shall deliver the Subleased
Premises with all mechanical systems in good working order. As used herein, the term “mechanical
systems”, to the extent applicable, shall mean the existing plumbing, heating, ventilating and air
conditioning, electrical, and fire sprinkler systems and the elevators. Sublessee shall have a
period of thirty (30) days from the date of possession in which to notify Sublessor, in writing,
and with specificity, the nature and extent to which such mechanical systems are not in good
working order, and Sublessor shall, with reasonable diligence rectify the same at its sole cost and
expense. If Sublessee does not give Sublessee the required notice with the appropriate time
period, any non-compliance shall be the obligation of Sublessee, at Sublessee’s sole cost and
expense. Except as set forth above in this Section 5.1, Sublessee acknowledges that as of the
Commencement Date, Sublessee shall have inspected the Subleased Premises, and every part thereof,
and by taking possession shall have acknowledged that the Subleased Premises is in good condition
and without need of repair, and Sublessee accepts the Subleased Premises “as is”, Sublessee having
made all investigations and tests it has deemed necessary or desirable in order to establish to its
own complete satisfaction the condition of the Subleased Premises. Sublessee accepts the Subleased
Premises in their condition existing as of the Commencement Date, subject to all applicable zoning,
municipal, county and state laws, ordinances, and regulations governing and regulating the use of
the Subleased Premises and any covenants or restrictions of record. Sublessee acknowledges that
neither Sublessor nor Master Lessor have made any representations or warranties as to the condition
of the Subleased Premises or its present or future suitability for Sublessee’s purposes.

     5.2 Surrender. Sublessee shall keep the Subleased Premises, and every part thereof in
good order and repair. In addition to Sublessee’s requirements under the Master Lease, Sublessee
shall surrender the Subleased Premises in the same condition as received, subject to the
requirement to remove the Furniture pursuant to Section 12.6 below, ordinary wear and tear, damage
by casualty covered by insurance pursuant to Paragraph 15 of the Master Lease and condemnation
pursuant to Paragraph 16 of the Master Lease excepted, provided Sublessee performs all necessary
maintenance, repair and cleaning to maintain the Subleased Premises in the condition it was
delivered at the earlier of the Commencement Date or such earlier date pursuant to Section 2.3
above. Sublessee shall have no obligation to restore any alterations made to the Subleased
Premises by Sublessor or Tenant that were constructed prior to the Commencement Date.

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ARTICLE 6

INSURANCE

     6.1 Sublessee’s Insurance With respect to the Tenant’s insurance under the Master
Lease, the same is to be provided by Sublessee as described in the Master Lease, and such policies
of insurance shall include as additional insureds Master Lessor, Sublessor and any lender as
required by Master Lessor.

     6.2 Waiver of Subrogation. With respect to the waiver of subrogation contained in the
Master Lease, such waiver shall be deemed to be modified to constitute an agreement by and among
Master Lessor, Sublessor and Sublessee (and Master Lessor’s consent to this Sublease shall be
deemed to constitute its approval of this modification).

ARTICLE 7

USE OF SUBLEASED PREMISES; PARKING; IMPROVEMENTS

     7.1 Use of Subleased Premises. Sublessee shall use the Subleased Premises only for
those purposes permitted in the Master Lease.

     7.2 Alterations; Improvements. Sublessee shall not make any alterations,
improvements, or modifications (“Alterations”) to the Subleased Premises without the express prior
written consent of Sublessor and of Master Lessor, which consent by Sublessor shall not be
unreasonably withheld provided, however, Sublessor’s withholding of approval shall in all events be
deemed reasonable if Master Lessor’s Consent is not obtained. Sublessee shall reimburse Master
Lessor (if required by Master Lessor) and Sublessor for all costs which Master Lessor and Sublessor
may incur in connection with Sublessee’s request for approval for any alterations and additions,
including, without limitation, Master Lessor’s and Sublessor’s reasonable attorneys’ fees and costs
whether or not approval is ultimately granted. All terms and conditions set forth in the Master
Lease with respect to Alterations shall apply. Sublessee shall provide Master Lessor and Sublessor
with a set of “as-built” drawings for any such work, as required under the Master Lease, together
with copies of all permits obtained by Sublessee in connection with performing any such work,
within fifteen (15) days after completing such work. Sublessor may impose as a condition of its
consent to such alterations, improvements, or modifications, such requirements as Sublessor may
deem reasonable and desirable, including, but not limited to, the requirement that Sublessee
utilize for such purposes only contractor(s), materials, mechanics and materialmen approved by
Sublessor, the requirement that Sublessee provide additional security, and that Sublessee, and/or
Sublessee’s contractor(s) post a payment and/or completion bond to guarantee the performance of its
construction obligations hereunder. On termination of this Sublease, Sublessee shall remove any or
all of such improvements and restore the Subleased Premises (or any part thereof) to the same
condition as of the Commencement Date of this Sublease, reasonable wear and tear excepted or as
otherwise instructed in writing by either Sublessor or Master Lessor. Should Sublessee fail to
remove such improvements and restore the Subleased Premises on termination of this Sublease unless
instruction otherwise in writing as set forth above, Sublessor shall have the right to do so, and

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charge Sublessee therefor, plus a service charge of ten percent (10%) of the costs incurred by
Sublessor.

     7.3 Parking. Subject to Paragraph 2 of the Master Lease and the rules and regulations
imposed from time to time by Master Lessor, from and after the Commencement Date, Sublessee shall
have all of Sublessor’s rights to and assume all of Sublessor’s responsibility for parking under
the Master Lease.

ARTICLE 8

ASSIGNMENT, SUBLETTING & ENCUMBRANCE

     8.1 Consent Required. Sublessee shall not assign this Sublease or any interest
therein nor shall Sublessee sublet, license, encumber or permit the Subleased Premises or any part
thereof to be used or occupied by others, without Sublessor’s and Master Lessor’s prior written
consent. Sublessor’s consent shall not be unreasonably withheld provided, however, Sublessor’s
withholding of consent shall in all events be deemed reasonable if for any reason Master Lessor’s
consent is not obtained. The consent by Sublessor and Master Lessor to any assignment or
subletting shall not waive the need for Sublessee (and Sublessee’s assignee or subtenant) to obtain
the consent of Sublessor and Master Lessor to any different or further assignment or subletting.
All terms and conditions set forth in the Master Lease regarding assignments and subletting shall
apply, and to the extent there is any Bonus Rent, (Rent paid by such assignee or sub-sublessee in
excess of Rent paid by Sublessee hereunder after deducting reasonable and actual brokerage fees and
reasonable and actual attorneys fees incurred by Sublessee with respect to the assignment or
sub-sublease, which such brokerage fees and attorneys fees shall be amortized over the term of the
sublease or assignment pursuant to generally accepted accounting principals), the Bonus Rent shall
first be split per the Master Lease and any Bonus Rent to go to Sublessee shall be split 25/75 with
Sublessor (twenty-five percent (25%) to Sublessee and seventy-five percent (75%) to Sublessor), to
be paid to Sublessor within five (5) days of receipt by Sublessee.

     8.2 Form of Document. Every assignment, agreement, or sublease shall (i) recite that
it is and shall be subject and subordinate to the provisions of this Sublease, that the assignee or
subtenant assumes Sublessee’s obligation hereunder, that the termination of this Sublease shall at
Sublessor’s sole election, constitute a termination of every such assignment or sublease, and (ii)
contain such other terms and conditions as shall be reasonably requested or provided by Sublessor’s
attorneys.

     8.3 Permitted Transfers. Sublessee shall have the right to sub-sublease or assign all
or any portion of its interest in the Subleased Premises to any parent, subsidiary, or affiliate of
Sublessee; or any party which results from a merger or consolidation of Sublessee; and/or any party
which acquires all or substantially all of the assets or stock of Sublessee, without Sublessor’s
consent, provided that (i) Sublessee shall comply with the terms of the Master Lease regarding
“Permitted Transfers,” and (ii) the net worth of the successor or reorganized entity after such
merger, sale or otherwise, has a net worth at least equal to the net worth of Sublessee immediately
prior to the date of such transfer. Sublessee shall provide Sublessor with no less than thirty
(30) days advance written notice of such sublease or assignment. No such sublease or

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assignment under this Section 8.3 shall provide relief from Sublessee’s obligation under the
Sublease and the provision of Section 8.4 below shall apply.

     8.4 No Release of Sublessee. Regardless of Sublessor’s consent, no subletting or
assignment shall release Sublessee of Sublessee’s obligation or alter the primary liability of
Sublessee to pay the Rent and to perform all other obligations to be performed by Sublessee
hereunder. The acceptance of Rent by Sublessor from any other person shall not be deemed to be a
waiver by Sublessor of any provision hereof. In the event of default by any assignee, subtenant or
any other successor of Sublessee, in the performance of any of the terms hereof, Sublessor may
proceed directly against Sublessee without the necessity of exhausting remedies against such
assignee, subtenant or successor.

     8.5 Default. An involuntary assignment shall constitute a default and Sublessor shall
have the right to elect to terminate this Sublease, in which case this Sublease shall not be
treated as an asset of Sublessee.

     8.6 Recapture. Notwithstanding the foregoing, in the event Sublessee requests
Sublessor’s consent to sublet all or any portion of the Subleased Premises, or to assign this
Sublease, Sublessor may in its sole discretion, elect to terminate this Sublease within fifteen
(15) days after receipt of Sublessee’s request by written notification to Sublessee of such
election, in which case the Sublease shall terminate effective thirty (30) days following such
election.

ARTICLE 9

DEFAULT

     9.1 Default Described. The occurrence of any of the following shall constitute a
material breach of this Sublease and a default by Sublessee: (i) failure to pay Rent or any other
amount within three (3) business days after written notice from Sublessor; (ii) all those items of
default set forth in the Master Lease which remain uncured after the cure period provided in the
Master Lease; or (iii) Sublessee’s failure to perform timely and subject to any cure periods any
other material provision of this Sublease or the Master Lease as incorporated herein.

     9.2 Sublessor’s Remedies. Sublessor shall have the remedies set forth in the Master
Lease as if Sublessor is Master Lessor. These remedies are not exclusive; they are cumulative and
in addition to any remedies now or later allowed by law.

     9.3 Sublessee’s Right to Possession Not Terminated. Sublessor has the remedy
described in California Civil Code Section 1951.4 (lessor may continue lease in effect after
lessee’s breach and abandonment and recover Rent as it becomes due, if lessee has right to sublet
or assign, subject only to reasonable limitations). Sublessor may continue this Sublease in full
force and effect, and Sublessor shall have the right to collect Rent and other sums when due.
During the period Sublessee is in default, Sublessor may enter the Subleased Premises and relet
them, or any part of them, to third parties for Sublessee’s account and alter or install locks and
other security devices at the Subleased Premises. Sublessee shall be liable immediately to
Sublessor for all costs Sublessor incurs in reletting the Subleased Premises, including, without
limitation, attorneys’ fees, brokers’ commissions, expenses of remodeling the Subleased

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Premises required by the reletting, and like costs. Reletting may be for a period equal to,
shorter or longer than the remaining term of this Sublease and Rent received by Sublessor shall be
applied to (i) first, any indebtedness from Sublessee to Sublessor other than Rent due from
Sublessee; (ii) second, all costs incurred by Sublessor in reletting, including, without
limitation, brokers’ fees or commissions and attorneys fees, the cost of removing and storing the
property of Sublessee or any other occupant, and the costs of repairing, altering, maintaining,
remodeling or otherwise putting the Subleased Premises into condition acceptable to a new Sublessee
or Sublessees; (iii) third, Rent due and unpaid under this Sublease. After deducting the payments
referred to in this subsection 9.3, any sum remaining from the Rent Sublessor receives from
reletting shall be held by Sublessor and applied in payment of future Rent and other amounts as
Rent and such amounts become due under this Sublease. In no event shall Sublessee be entitled to
any excess Rent received by Sublessor, provided any excess Rent, if any, will be used to mitigate
Sublessor’s damages. Sublessee’s consent to or approval of any act by Sublessor which requires
Sublessee’s consent or approval shall not be deemed to waive or render unnecessary Sublessee’s
consent to or approval of any subsequent act by Sublessor

     9.4 All Sums Due and Payable as Rent. Sublessee shall also pay without notice, or
where notice is required under this Sublease, immediately upon demand without any abatement,
deduction, or setoff, as additional rent all sums, impositions, costs, expenses, and other payments
which Sublessee in any of the provisions of this Sublease assumes or agrees to pay, and, in case of
any nonpayment thereof, Sublessor shall have, in addition to all other rights and remedies, all the
rights and remedies provided for in this Sublease or by law in the case of nonpayment of Rent.

     9.5 No Waiver. Sublessor may accept Sublessee’s payments without waiving any rights
under the Sublease, including rights under a previously served notice of default. No payment by
Sublessee or receipt by Sublessor of a lesser amount than any installment of Rent due or other sums
shall be deemed as other than a payment on account of the amount due, nor shall any endorsement or
statement on any check or accompanying any check or payment be deemed an accord and satisfaction;
and Sublessor may accept such check or payment without prejudice of Sublessor’s right to recover
the balance of such Rent or other sum or pursue any other remedy provided in this Sublease, at law
or in equity. If Sublessor accepts payments after serving a notice of default, Sublessor may
nevertheless commence and pursue an action to enforce rights and remedies under the previously
served notice of default without giving Sublessee any further notice or demand. Furthermore, the
Sublessor’s acceptance of Rent from Sublessee when the Sublessee is holding over without express
written consent does not convert Sublessee’s tenancy from a tenancy at sufferance to a
month-to-month tenancy. No waiver of any provision of this Sublease shall be implied by any
failure of Sublessor or Sublessee to enforce any remedy for the violation of that provision, even
if that violation continues or is repeated. Any waiver by Sublessor or Sublessee of any provision
of this Sublease must be in writing. Such waiver shall affect only the provisions specified and
only for the time and in the manner stated in the writing. No delay or omission in the exercise of
any right or remedy by Sublessor or Sublessee shall impair such right or remedy or be construed as
a waiver thereof by Sublessor or Sublessee, as applicable. No act or conduct of Sublessor,
including, without limitation the acceptance of keys to the Subleased Premises shall constitute
acceptance or the surrender of the Subleased Premises by Sublessee before the Expiration Date.
Only written notice from Sublessor to Sublessee of acceptance shall constitute such acceptance or
surrender of

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the Subleased Premises. Sublessor’s consent to or approval of any act by Sublessee which
requires Sublessor’s consent or approval shall not be deemed to waive or render unnecessary
Sublessor’s consent to or approval of any subsequent act by Sublessee.

     9.6 Sublessor Default. For purposes of this Sublease, Sublessor shall not be deemed
in default hereunder unless and until Sublessee shall first deliver to Sublessor thirty (30) days’
prior written notice, and Sublessor shall fail to cure said default within said thirty (30) day
period, or in the event Sublessor shall reasonably require in excess of thirty (30) days to cure
said default, shall fail to commence said cure with said thirty (30) day period, and thereafter
diligently to prosecute the same to completion.

     9.7 Notice of Event of Default under Master Lease. Sublessor shall notify Sublessee
of any Event of Default under the Master Lease, or of any other event of which Sublessor has actual
knowledge which will impair Sublessee’s ability to conduct its normal business at the Subleased
Premises, as soon as reasonably practicable following Sublessor’s receipt of notice from Master
Lessor of an Event of Default or Sublessor’s actual knowledge of such impairment.

ARTICLE 10

CONSENT OF MASTER LESSOR

     10.1 Precondition. The Master Lease requires that Sublessor obtain the consent of
Master Lessor to any subletting by Sublessor. This Sublease shall not be effective unless and
until Master Lessor signs a consent to this subletting satisfactory to Sublessor. Sublessor and
Sublessee agree that the form of consent provided by the Master Lessor, and attached hereto as
Exhibit “E”, is satisfactory and will execute such form of consent.

     10.2 Consent or Approval. If the consent or approval of the Master Lessor is required
pursuant to the Master Lease with respect to any matter relating to the Premises, Sublessor agrees
it will reasonably cooperate with Sublessee, in its reasonable efforts to obtain the Master
Lessor’s consent or approval, provided: (i) Sublessee shall be solely responsible for all costs and
expenses incurred by Sublessor in providing such cooperation; (ii) the matter for which or the
means thereby that Sublessee seeks such consent does not materially or adversely affect Sublessor’s
rights under the Master Lease; and (iii) Sublessee indemnifies and holds Sublessor harmless from
any and all Claims arising from or relating to such cooperation.

ARTICLE 11

HAZARDOUS MATERIALS

     11.1 Hazardous Materials . In addition to the requirements under the Master Lease,
Sublessee shall not store, use, or dispose of any Hazardous or Toxic Material on, under, or about
the Subleased Premises. As used herein, “Hazardous or Toxic Materials” shall include but not be
limited to the definition of Hazardous Materials contained in the Master Lease and any asbestos
containing materials (“ACM”), petroleum products, radioactive materials, polychlorinated biphenyls
(PCBs) and substances or compounds containing PCBs and all other

-11-

 

materials, substances, wastes, and chemicals classified, defined, listed, or regulated as, or
containing, a “hazardous substances,” “hazardous materials,” or “toxic substances,” “pollutant,”
“contaminant,” “solid waste” under any Environmental Law or which may become regulated by or under
the authority of any Environmental Law. As used herein, the term “Environmental Laws” shall
include any and all local, state or federal laws, statutes, rules, regulations, ordinances, orders,
permits, licenses or other applicable governmental restrictions, guidelines or legal requirements,
relating directly or indirectly to human health or safety or environment, or the presence,
handling, treatment, storage, disposal, recycling, reporting, remediation, investigation, or
monitoring of hazardous or toxic material including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601,
et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.

     11.2 Indemnity. In addition to the indemnities contained in the Master Lease,
Sublessee shall be solely responsible for and shall defend, indemnify and hold Sublessor and its
partners, officers, directors, employees and agents harmless from and against all Claims of any
kind whatsoever, arising out of or caused in whole or in part, directly or indirectly, by or in
connection with its storage, use, disposal or discharge of Hazardous Materials whether in violation
of this section or not, or Sublessee’s failure to comply with any Hazardous Materials law.
Sublessee shall further be solely responsible for and shall defend, indemnify and hold Sublessor
harmless from and against any and all Claims arising out of or in connection with the removal,
cleanup, detoxification, decontamination and restoration work and materials necessary to return the
Subleased Premises to their condition existing prior to Sublessee’s storage, use or disposal of the
Hazardous Materials on the Subleased Premises. For the purposes of the indemnity provisions
hereof, any acts or omissions of Sublessee or by employees, agents, assignees, contractors or
subcontractors of Sublessee (whether or not they are negligent, intentional or unlawful) shall be
strictly attributable to Sublessee. Sublessee’s obligations under this section shall survive the
termination of this Sublease.

ARTICLE 12

MISCELLANEOUS

     12.1 Conflict with Master Lease; Interpretation. In the event of any conflict between
the provisions of the Master Lease and this Sublease, the Master Lease shall govern and control
except to the extent directly contradicted by the terms of this Sublease. No presumption shall
apply in the interpretation or construction of this Sublease as a result of Sublessor having
drafted the whole or any part hereof.

     12.2 Remedies Cumulative. The rights, privileges, elections, and remedies of
Sublessor in this Sublease, at law, and in equity are cumulative and not alternative.

     12.3 Waiver of Redemption. Sublessee hereby expressly waives any and all rights of
redemption to which it may be entitled by or under any present or future laws in the event
Sublessor shall obtain a judgment for possession of the Subleased Premises.

-12-

 

     12.4 Damage and Destruction; Condemnation. In the event of any damage, destruction,
casualty, condemnation or threat of condemnation affecting the Subleased Premises, Rent payable
hereunder shall be abated but only to the extent that Rent is abated under the Master Lease with
respect to the Subleased Premises. Sublessee shall have no right to terminate this Sublease in
connection with any damage, destruction, casualty, condemnation or threat of condemnation except to
the extent the Master Lease is also terminated as to the Premises or any portion thereof.

     12.5 Holding Over. Sublessee shall have no right to Holdover. If Sublessee does not
surrender and vacate the Subleased Premises at Expiration Date of this Sublease as required
hereunder, Sublessee shall be a tenant at sufferance and the parties having agreed that the Rent
shall be the daily rate of one hundred and fifty percent (150%) of the Rent due to Master Lessor
from Sublessor under the Master Lease for the Subleased Premises divided by thirty (30) days,
together with any additional rent due and payable during such period of time. In connection with
the foregoing, Sublessor and Sublessee agree that the reasonable rental value of the Subleased
Premises following the Expiration Date of the Sublease shall be the amounts set forth above per
month. Sublessor and Sublessee acknowledge and agree that, under the circumstances existing as of
the Effective Date, it is impracticable and/or extremely difficult to ascertain the reasonable
rental value of the Subleased Premises on the Expiration Date and that the reasonable rental value
established herein is a reasonable estimate of the damage that Sublessor would suffer as the result
of the failure of Sublessee to timely surrender possession of the Subleased Premises. The parties
acknowledge that the liquidated damages established herein is not intended as a forfeiture or
penalty within the meaning of California Civil Code sections 3275 or 3369, but is intended to
constitute liquidated damages to Sublessor pursuant to California Civil Code sections 1671, 1676,
and 1677. Notwithstanding the foregoing, and in addition to all other rights and remedies on the
part of Sublessor if Sublessee fails to surrender the Subleased Premises upon the termination or
expiration of this Sublease, in addition to any other liabilities to Sublessor accruing therefrom,
Sublessee shall indemnify, defend and hold Sublessor harmless from all Claims resulting from such
failure, including, without limitation, any Claims by any third parties based on such failure to
surrender and any lost profits to Sublessor resulting therefrom.

     12.6 Furniture. Sublessee may use certain furniture, furnishings and equipment
located in the Subleased Premises as set forth on Exhibit C (“Furniture”). Except as set forth
herein, Sublessee may not remove the Furniture from the Subleased Premises. Sublessee accepts the
Furniture in its “as is” condition and Sublessor makes no warranty as to the condition of the
Furniture or its present or future suitability for Sublessee’s purposes, except that the Furniture
is free of encumbrances. Upon termination of this Sublease, Sublessee shall purchase the
Furniture from Sublessor for the sum of One Dollar ($1.00) in its condition as of the termination
of the Sublease Agreement without warranty except for warranty of title and free of encumbrances,
provided, if Sublessee is in default, Sublessor, at it’s option, may instead require Sublessee to
return the Furniture to Sublessor in substantially the same condition as received, ordinary wear
and tear excepted conditioned on the obligation of Sublessee to use the Furniture in a careful and
proper manner and to clean and repair the Furniture in the manner necessary to maintain the
Furniture in substantially the same condition it was initially provided to Sublessee. Sublessee
shall be liable for any damage to the Furniture and solely responsible for all costs associated
with the maintenance, cleaning and repair of the Furniture and shall insure the Furniture as part
of Sublessee’s property insurance required to be carried hereunder. Except in

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the event Sublessor elects not to sell the Furniture to Sublessee due to a Sublessee default,
Sublessee shall be solely responsible for the removal of the Furniture and the repair of any damage
to the Subleased Premises as a result of said removal. In the event that Sublessee desires to
dispose of any of the Furniture prior to the expiration or earlier termination of this Sublease,
Sublessee shall deliver written notice to Sublessor specifying the Furniture of which Sublessee
desires to dispose. Sublessor may deliver written notice to Sublessee within thirty (30) days of
receipt of Sublessee’s notice of Sublessor’s desire to retain such Furniture, in which case
Sublessor shall arrange with Sublessee to remove such Furniture from the Subleased Premises.
Unless Sublessor notifies Sublessee that Sublessor desires to retain such Furniture within the time
periods set forth herein, Sublessee may dispose of such Furniture at Sublessee’s sole cost and
expense as Sublessee sees fit.

     12.7 Signage. Pursuant to Paragraph 3.C of the Master Lease, Sublessee shall have all
rights and assume all responsibility for Sublessor’s signage rights under the Master Lease, subject
to Master Lessor’s and Sublessor’s prior written consent, which consent, as to Sublessor, shall not
be unreasonably withheld, provided, however, Sublessor’s withholding of consent shall in all events
be deemed reasonable if Master Lessor’s consent is not obtained. In the event Master Lessor’s
consent is obtained, Sublessor agrees to also consent, provided, however, Sublessor may reasonably
condition its consent with respect to Sublessee’s removal obligations of such signage. All signs
shall be at Sublessee’s sole cost and shall comply with the terms of the Master Lease and with all
local, federal and state rules, regulations, statutes, and ordinances at all times during the term
hereof. Sublessee, at Sublessee’s cost, shall remove all such signs and graphics prior to the
termination of this Sublease and repair any damage caused by such removal.

     12.8 Dispute Resolution. The parties specifically agree to abide by the provisions of
paragraph 20.E of the Master Lease. WE HAVE READ AND UNDERSTAND THE PROVISIONS OF PARAGRAPH 20.E
OF THE MASTER LEASE AND AGREE TO ABIDE BY THE TERMS AND CONDITIONS CONTAINED IN PARAGRAPH 20.E OF
THE MASTER LEASE AS INCORPORATED HEREIN.

SUBLESSOR:
/s/  CG     FD                                            SUBLESSEE:
/s/  TDH     BRJ

     12.9 Generator. Notwithstanding paragraph 2 of the Master Lease, in the event
Sublessee desires to install a generator at the Subleased Premises, the consent of Sublessor shall
be required, not to be unreasonably withheld.

     12.10 Offer. Preparation of this Sublease by either Sublessor or Sublessee or either
parties’ agent and submission of same to Sublessor or Sublessee shall not be deemed an offer to
Sublease. This Sublease is not intended to be binding until executed and delivered by all Parties
hereto.

     12.11 Due Authority. If Sublessee signs as a corporation, each of the persons
executing this Sublease on behalf of Sublessee represent and warrant that they have the authority
to bind Sublessee, Sublessee has been and is qualified to do business in the State of California,
that the corporation has full right and authority to enter into this Sublease, and that all persons
signing on behalf of the corporation were authorized to do so by appropriate corporate actions. If
Sublessee

-14-

 

signs as a partnership, trust or other legal entity, each of the persons executing this
Sublease on behalf of Sublessee represent and warrant that they have the authority to bind
Sublessee, Sublessee has complied with all applicable laws, rules and governmental regulations
relative to its right to do business in the State of California and that such entity on behalf of
the Sublessee was authorized to do so by any and all appropriate partnership, trust or other
actions. Sublessee agrees to furnish promptly upon request a corporate resolution, proof of due
authorization by partners, or other appropriate documentation evidencing the authorization of
Sublessee to enter into this Sublease.

     12.12 Multiple Counterparts. This Sublease may be executed in two or more
counterparts, which when taken together shall constitute one and the same instrument. The parties
contemplate that they may be executing counterparts of this Sublease transmitted by facsimile and
agree and intend that a signature by facsimile machine shall bind the party so signing with the
same effect as though the signature were an original signature.

     12.13 Building Contaminants. To prevent the contamination, growth, or deposit of any
mold, mildew, bacillus, virus, pollen, or other micro-organism (collectively, “Biologicals”) and
the deposit, release or circulation of any indoor contaminants including emissions from paint,
carpet and drapery treatments, cleaning, maintenance and construction materials and supplies,
pesticides, pressed wood products, insulation, and other materials and products (collectively with
Biologicals, “Contaminants”) that could adversely affect the health, safety or welfare of any
tenant, employee, or other occupant of the Building or their invitees (each, an “Occupant”),
Sublessee shall, at Sublessee’s sole cost and expense, at all times during the term hereof (1)
operate the Subleased Premises in such a manner to reasonably prevent or minimize the accumulation
of stagnant water and moisture in planters, kitchen appliances and vessels, carpeting, insulation,
water coolers, and any other locations where stagnant water or moisture could accumulate, and (2)
otherwise operate the Subleased Premises to prevent the generation, growth, deposit, release or
circulation of any Contaminants.

ARTICLE 13

BROKER’S COMMISSIONS

     13.1 Commission. Sublessor and Sublessee represent and warrant to each other that
each has dealt with the following brokers: CB Richard Ellis (Sublessor’s Broker); and Cornish &
Carey Commercial (Sublessee’s Broker) and with no other agent, finder, or other such person with
respect to this Sublease and each agrees to indemnify and hold the other harmless from any Claims
asserted against the other by any broker, agent, finder, or other such person not identified above
as Sublessor’s Broker or Sublessee’s Broker. The commission to the Brokers is pursuant to separate
agreement. Sublessor shall be responsible for the commission to Sublessor’s Broker who shall pay
the commission to Sublessee’s Broker pursuant to a separate agreement between Sublessor’s Broker
and Sublessee’s Broker.

-15-

 

ARTICLE 14

NOTICES AND PAYMENTS

     14.1 Certified Mail. Any notice, demand, request, consent, approval, submittal or
communication that either party desires or is required to give to the other party or any other
person shall be in writing and either served personally or sent by prepaid, first-class certified
mail or commercial overnight delivery service. Such Notice shall be effective on the date of
actual receipt (in the case of personal service or commercial overnight delivery service) or two
days after deposit in the United States mail, to the following addresses:

	 	 	 	 	 
	

	 	To the Sublessor:
	 	Hyperion Solutions Corporation
	

	 	 	 	900 Long Ridge Road
	

	 	 	 	Stamford, Connecticut 06902
	

	 	 	 	Attn: Real Estate Director
	 
	 	 	 	 
	

	 	with a copy to:
	 	Hyperion Solutions Corporation
	

	 	 	 	5450 Great American Parkway
	

	 	 	 	Santa Clara, CA 95054
	

	 	 	 	Attn: General Counsel
	 
	 	 	 	 
	

	 	and a copy to:
	 	Hopkins & Carley
	

	 	 	 	70 S First Street
	

	 	 	 	San Jose, California 95113
	

	 	 	 	Attention: Julie A. Frambach
	 
	 	 	 	 
	

	 	To the Sublessee:
	 	At the Subleased Premises, whether or not
Sublessee has abandoned or vacated the Subleased Premises or notified the
Sublessor of any other address
	 
	 	 	 	 
	

	 	with a copy to:
	 	Stein & Lubin
	

	 	 	 	600 Montgomery Street, Suite 1400
	

	 	 	 	San Francisco, CA 94111
	

	 	 	 	Attn: Paul J. Niewiadomski

     14.2 When this Sublease requires service of a notice, that notice shall replace rather than
supplement any equivalent or similar statutory notice, including any notices required by Code of
Civil Procedure Section 1161 or any similar or successor statute. When a statute requires service
of a notice in a particular manner, service of that notice (or a similar notice required by this
Sublease) shall replace and satisfy the statutory service-of-notice procedures, including those
required by Code of Civil Procedure Section 1162 or any similar or successor statute

-16-

 

ARTICLE 15

ATTORNEYS’ FEES AND COSTS

     15.1 Sublessor Made Party to Litigation. If Sublessor becomes a party to any
litigation brought by someone other than Sublessee and concerning this Sublease, the Subleased
Premises, or Sublessee’s use and occupancy of the Subleased Premises, to the extent allegations are
based upon, arise from or are related to any real or alleged act or omission of Sublessee or its
authorized representatives, Sublessee shall be liable to Sublessor for reasonable attorneys’ fees
and court costs incurred by Sublessor in the litigation.

     15.2 Certain Litigation Between the Parties. In the event any action or proceeding at
law or in equity or any arbitration proceeding be instituted by either party, for an alleged breach
of any obligation of Sublessee under this Sublease, to recover Rent, to terminate the tenancy of
Sublessee at the Subleased Premises, or to enforce, protect, or establish any right or remedy of a
party to this Sublease Agreement, the prevailing party (by judgment or settlement) in such action
or proceeding shall be entitled to recover as part of such action or proceeding such reasonable
attorneys’ fees, expert witness fees, and court costs as may be fixed by the court or jury, but
this provision shall not apply to any cross-complaint filed by anyone other than Sublessor in such
action or proceeding.

     15.3 Sublessor’s Costs. In any case where Sublessee requests permission from
Sublessor to assign, sublet, make alterations, or receive any other consent or obtain any waiver
from or modification to the terms of this Sublease, Sublessee shall pay to Sublessor a reasonable
administrative charge and Sublessor’s reasonable attorney’s fees incurred by Sublessor in reviewing
such request.

ARTICLE 16

EXHIBITS

     16.1 Exhibits and Attachments. All exhibits and attachments to this Sublease are a
part hereof.

-17-

 

     IN WITNESS WHEREOF, Sublessor and Sublessee have executed and delivered this Sublease on the
date first set forth above.

	 	 	 	 	 	 	 
	SUBLESSOR	 	SUBLESSEE
	 
	 	 	 	 	 	 
	HYPERION SOLUTIONS CORPORATION,	 	FOUNDRY NETWORKS, INC.,
	a Delaware corporation	 	a Delaware corporation
	
	 	/s/ Claire Goldbloom	 	 	 	/s/ Timothy Heffner
	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	Claire Goldbloom	 	By:	 	Timothy Heffner
	

	 	 
	 	 	 	 
	Its:

	 	VP Corporate Counsel	 	Its:	 	CFO
	

	 	 
	 	 	 	 
	 
	 
	 	/s/ Francois Delepine	 	 	 	/s/ Bobby R. Johnson, Jr.
	 	 	 
	By:

	 	Francois Delepine	 	By:	 	Bobby R. Johnson, Jr.
	

	 	 
	 	 	 	 
	Its:

	 	VP Corp. Finance	 	Its:	 	CEO
	

	 	 
	 	 	 	 

-18-

 

EXHIBIT A

SULEASED PREMISES

[Maps of Subleased Premises]

 

EXHIBIT B

MASTER LEASE

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	 	 
	1.	 	PARTIES	 	 	1	 
	2.	 	PREMISES	 	 	1	 
	3.	 	USE	 	 	2	 
	 
	 	A.	 	Permitted Uses	 	 	2	 
	 
	 	B.	 	Uses Prohibited	 	 	2	 
	 
	 	C.	 	Advertisements and Signs	 	 	2	 
	 
	 	D.	 	Covenants, Conditions and Restrictions	 	 	2	 
	4.	 	TERM AND RENTAL	 	 	3	 
	 
	 	A.	 	Base Monthly Rent	 	 	3	 
	 
	 	B.	 	Late Charges	 	 	3	 
	 
	 	C.	 	Security Deposit	 	 	4	 
	5.	 	CONSTRUCTION	 	 	4	 
	 
	 	A.	 	Building Shell Construction	 	 	4	 
	 
	 	B.	 	Tenant Improvement Plans	 	 	5	 
	 
	 	C.	 	Pricing	 	 	6	 
	 
	 	D.	 	Change Orders	 	 	6	 
	 
	 	E.	 	Letter of Credit to Secure Tenant Improvement Construction	 	 	6	 
	 
	 	F.	 	Tenant Improvement Costs	 	 	7	 
	 
	 	G.	 	Force Majeure	 	 	7	 
	 
	 	H.	 	General Contractor Overhead & Profit	 	 	8	 
	 
	 	I.	 	Tenant Delays	 	 	8	 
	 
	 	J.	 	Insurance	 	 	9	 
	 
	 	K.	 	Punch List & Warranty	 	 	9	 
	 
	 	L.	 	Other Work by Tenant	 	 	9	 
	6.	 	ACCEPTANCE OF POSSESSION AND COVENANTS TO SURRENDER	 	 	9	 
	 
	 	A.	 	Delivery and Acceptance	 	 	9	 
	 
	 	B.	 	Condition Upon Surrender	 	 	10	 
	 
	 	C.	 	Failure to Surrender	 	 	11	 
	7.	 	ALTERATIONS AND ADDITIONS	 	 	11	 
	 
	 	A.	 	Tenant’s Alterations	 	 	11	 

Page i

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	 	 
	 
	 	B.	 	Free From Liens	 	 	12	 
	 
	 	C.	 	Compliance With Governmental Regulations	 	 	12	 
	8.	 	MAINTENANCE OF PREMISES	 	 	13	 
	 
	 	A.	 	Landlord’s Obligations	 	 	13	 
	 
	 	B.	 	Tenant’s Obligations	 	 	13	 
	 
	 	C.	 	Landlord and Tenant’s Obligations Regarding Reimbursable Operating Costs	 	 	13	 
	 
	 	D.	 	Reimbursable Operating Costs	 	 	13	 
	 
	 	E.	 	Tenant’s Allocable Share	 	 	14	 
	 
	 	F.	 	Waiver of Liability	 	 	14	 
	 
	 	G.	 	Replacements	 	 	15	 
	9.	 	HAZARD INSURANCE	 	 	15	 
	 
	 	A.	 	Tenant’s Use	 	 	15	 
	 
	 	B.	 	Landlord’s Insurance	 	 	15	 
	 
	 	C.	 	Tenant’s Insurance	 	 	16	 
	 
	 	D.	 	Waiver	 	 	16	 
	10.	 	TAXES	 	 	16	 
	11.	 	UTILITIES	 	 	17	 
	12.	 	TOXIC WASTE AND ENVIRONMENTAL DAMAGE	 	 	17	 
	 
	 	A.	 	Tenant’s Responsibility	 	 	17	 
	 
	 	B.	 	Tenant’s Indemnity Regarding Hazardous Materials	 	 	18	 
	 
	 	C.	 	Actual Release by Tenant	 	 	18	 
	 
	 	D.	 	Environmental Monitoring	 	 	19	 
	13.	 	TENANT’S DEFAULT	 	 	19	 
	 
	 	A.	 	Remedies	 	 	20	 
	 
	 	B.	 	Right to Re-enter	 	 	20	 
	 
	 	C.	 	Abandonment	 	 	21	 
	 
	 	D.	 	No Termination	 	 	21	 
	 
	 	E.	 	Non-Waiver	 	 	21	 
	 
	 	F.	 	Performance by Landlord	 	 	22	 
	 
	 	G.	 	Habitual Default	 	 	22	 

Page ii

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	 	 
	14.	 	LANDLORD’S LIABILITY	 	 	22	 
	 
	 	A.	 	Limitation on Landlord’s Liability	 	 	22	 
	 
	 	B.	 	Limitation on Tenant’s Recourse	 	 	23	 
	 
	 	C.	 	Indemnification of Landlord	 	 	23	 
	15.	 	DESTRUCTION OF PREMISES:	 	 	23	 
	 
	 	A.	 	Landlord’s Obligation to Restore	 	 	23	 
	 
	 	B.	 	Limitations on Landlord’s Restoration Obligation	 	 	23	 
	16.	 	CONDEMNATION:	 	 	24	 
	17.	 	ASSIGNMENT OR SUBLEASE	 	 	24	 
	 
	 	A.	 	Consent by Landlord	 	 	24	 
	 
	 	B.	 	Assignment or Subletting Consideration	 	 	25	 
	 
	 	C.	 	No Release	 	 	26	 
	 
	 	D.	 	Reorganization of Tenant	 	 	26	 
	 
	 	E.	 	Permitted Transfers	 	 	26	 
	 
	 	F.	 	Effect of Default	 	 	27	 
	 
	 	G.	 	Conveyance by Landlord	 	 	27	 
	 
	 	H.	 	Successors and Assigns	 	 	27	 
	18.	 	OPTION TO EXTEND THE LEASE TERM	 	 	27	 
	 
	 	A.	 	Grant and Exercise of Option	 	 	27	 
	 
	 	B.	 	Determination of Fair Market Rental	 	 	28	 
	 
	 	C.	 	Resolution of a Disagreement over the Fair Market Rental	 	 	28	 
	 
	 	D.	 	Personal to Tenant	 	 	29	 
	 
	 	E.	 	Right to Rescind.	 	 	29	 
	19.	 	RIGHT OF FIRST OFFERING TO LEASE	 	 	29	 
	 
	 	A.	 	Grant	 	 	29	 
	 
	 	B.	 	Exclusions	 	 	30	 
	20.	 	GENERAL PROVISIONS	 	 	30	 
	 
	 	A.	 	Attorney’s Fees	 	 	30	 
	 
	 	B.	 	Authority of Parties	 	 	30	 
	 
	 	C.	 	Brokers	 	 	30	 

Page iii

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	 	 
	 
	 	D.	 	Choice of Law	 	 	31	 
	 
	 	E.	 	Dispute Resolution	 	 	31	 
	 
	 	F.	 	Entire Agreement	 	 	32	 
	 
	 	G.	 	Entry by Landlord	 	 	32	 
	 
	 	H.	 	Estoppel Certificates	 	 	33	 
	 
	 	I.	 	Exhibits.	 	 	33	 
	 
	 	J.	 	Interest	 	 	33	 
	 
	 	K.	 	Modifications Required by Lender	 	 	33	 
	 
	 	L.	 	No Presumption Against Drafter	 	 	33	 
	 
	 	M.	 	Notices	 	 	34	 
	 
	 	N.	 	Asset Management	 	 	34	 
	 
	 	O.	 	Rent	 	 	34	 
	 
	 	P.	 	Representations	 	 	34	 
	 
	 	Q.	 	Rights and Remedies	 	 	34	 
	 
	 	R.	 	Severability	 	 	34	 
	 
	 	S.	 	Submission of Lease	 	 	34	 
	 
	 	T.	 	Subordination	 	 	34	 
	 
	 	U.	 	Survival of Indemnities	 	 	35	 
	 
	 	V.	 	Time	 	 	35	 
	 
	 	W.	 	Transportation Demand Management Programs	 	 	35	 
	 
	 	X.	 	Waiver of Right to Jury Trial	 	 	35	 

Page iv

 

[EXCLUDED EXHIBITS

     The following exhibits to the Lease dated December 20, 1999 by and between Sobrato Development
Companies #961 and Brio Technology, Inc. have been omitted from this filing.

     Brocade
Communications Systems, Inc. hereby agrees to furnish supplementally to the Commission any omitted
exhibit upon request.

EXHIBIT A – Premises, Building & Project

EXHIBIT B – Declaration of Reciprocal Easement, Easements and Covenants

EXHIBIT C – Office Shell Plans and Specifications

EXHIBIT D – Tenant Improvement Plans and Specifications]

Page v

 

	 	 	 
	10600 North De Anza Blvd.
	 	408.446.0700
	Suite 200
	 	Fascsimile: 408.448.0583
	Cupertino, CA 95014-2075
	 	www.sobrato.com

SOBRATO

DEVELOPMENT COMPANIES

1. PARTIES: THIS LEASE, is entered into on this 20th day of December, 1999, (“Effective
Date”) between SOBRATO DEVELOPMENT COMPANIES #961, a California Limited Partnership, whose address
is 10600 North De Anza Boulevard, Suite 200, Cupertino, CA 95014 and BRIO TECHNOLOGY, INC., a
California Corporation, whose address is 3460 W. Bayshore, Palo Alto, CA 94303, hereinafter called
respectively Landlord and Tenant.

2. PREMISES: Landlord hereby leases to Tenant, and Tenant hires from Landlord those certain
Premises with the appurtenances, situated in the City of Santa Clara, County of Santa Clara, State
of California, consisting of a 5-story steel frame building commonly known and designated as 4980
Great America Parkway consisting of 140,935 rentable square feet (“Building”). Unless otherwise
provided herein, Tenant shall have the non-exclusive right to use the real property surrounding the
Building and the building commonly known as 4988 Great America Parkway (“4988 Building”), as shown
on Exhibit “A” attached hereto (“Common Area”) and in accordance with the Declaration of
Reciprocal Easement, Easements and Covenants and First Amendment (“Reciprocal Easement”) attached
hereto as Exhibit “B”. The Building, the 4988 Building and the Common Area are
collectively referred to herein as the “Project”. Unless expressly provided otherwise, the term
Premises as used herein shall include the Tenant Improvements (defined in Section 5.B) constructed
by Landlord and Tenant pursuant to Section 5.B. With regard to the parking stalls within the
Common Area, Tenant shall have the exclusive right to use the parking garage of approximately 488
parking spaces, except for 38 spaces which shall be available for exclusive use by the tenant of
the 4988 Building. Tenant shall have the right to install security measures for the garage, such
as card key access, provided (i) the tenant of the 4988 Building is given controlled access to the
parking spaces to be designated for such tenant at all times as determined by Tenant and Landlord
jointly and (ii) there are no restrictions on access to the garage during normal business hours
(unless otherwise agreed by all parties including the tenant in the 4988 Building). Tenant shall
also have the right to use 27 parking spaces on the on-grade parking lot to be designated for
exclusive use by Tenant as shown in the Reciprocal Easement. Tenant shall have the obligation to
keep the parking garage in good condition and repair, at Tenant’s sole cost, except for the
structural portions thereof which shall be maintained by Landlord at its sole cost. The tenant of
the 4988 Building shall have the obligation to maintain the on-grade parking area at its sole cost.
All other Common Area expenses shall be prorated pursuant to Section 8 of this Lease. Tenant
shall also have the non-exclusive right to use all other portions of the Common Area as set forth
in the Reciprocal Easement attached hereto as Exhibit B.” Tenant shall have the right to install a
generator (properly screened from view) benches, tables, chairs, umbrellas and other outdoor
amenities, security cameras, and other similar removable equipment and furnishings in the Common
Area provided: (i) all such items are installed by Tenant in a manner reasonably compatible with
the design and quality of the Project; and (ii) such items do not adversely affect

 

 

or interfere with other tenants in the Project, as reasonably determined by Landlord. In addition,
Tenant shall have the right, at its sole cost, to install lighting and security devices, including
card key access, in the parking garage. Landlord shall not materially modify the Common Area
without prior written notice to Tenant, and no modifications shall be made to the Common Area which
would materially interfere with Tenant’s business or use of the Premises or decrease the amount of
parking available for the Project. Any modification to the Common Areas shall be done in a manner
which minimizes disruption to Tenant.

3. USE:

     A. Permitted Uses: Tenant shall use the Premises only for the following purposes and shall
not change the use of the Premises without the prior written consent of Landlord: Office, research
and development, marketing, light manufacturing, ancillary storage and other incidental uses.
Tenant shall use only the number of parking spaces allocated to Tenant under this Lease. All
commercial trucks and delivery vehicles shall (i) be parked at the rear of the Building, (ii)
loaded and unloaded in a manner which does not interfere with the businesses of other occupants of
the Project, and (iii) permitted to remain within the Project only so long as is reasonably
necessary to complete the loading and unloading. Landlord makes no representation or warranty that
any specific use of the Premises desired by Tenant is permitted pursuant to any Laws.

     B. Uses Prohibited: Tenant shall not commit or suffer to be committed on the Premises any
waste, nuisance, or other act or thing which may disturb the quiet enjoyment of any other tenant in
or around the Premises, nor allow any sale by auction or any other use of the Premises for an
unlawful purpose. Tenant shall not (i) damage or overload the electrical, mechanical or plumbing
systems of the Premises, (ii) attach, hang or suspend anything from the ceiling or columns of the
building or set any load on the floor in excess of the load limits for which such items are
designed, or (iii) generate dust, fumes or waste products which create a fire or health hazard or
damage the Premises or any portion of the Project, including without limitation the soils or ground
water in or around the Project. No materials, supplies, equipment, finished products or
semi-finished products, raw materials or articles of any nature, or any waste materials, refuse,
scrap or debris, shall be stored upon or permitted to remain on any portion of the Premises outside
of the Building (excluding items stored in permitted storage enclosures designed for such purpose)
without Landlord’s prior approval, which approval may be withheld in its sole discretion.

     C. Advertisements and Signs: Tenant will not place or permit to be placed, in, upon or about
the Premises any signs not approved by the city and other governing authority having jurisdiction.
Subject to the foregoing requirement, Tenant shall have the right to place two (2) signs mounted on
the Building and one (1) ground mounted monument sign within the Project. The design and placement
of the monument sign shall be subject to the reasonable approval of Landlord. Any sign placed on
the Premises shall be removed by Tenant, at its sole cost, prior to the Expiration Date or promptly
following the earlier termination of the Lease, and Tenant shall repair, at its sole cost, any
damage or injury to the Premises caused thereby, and if not so removed, then Landlord may have same
so removed at Tenant’s expense.

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     D. Covenants, Conditions and Restrictions: This Lease is subject to the effect of (i) any
easements, mortgages or deeds of trust, ground leases, rights of way of record and any other
matters or documents of record; and (ii) any zoning laws of the city, county and state where the
Building is situated (collectively referred to herein as “Restrictions”) and Tenant and Landlord
will conform to and will not violate the terms of any such Restrictions.

4. TERM AND RENTAL:

     A. Base Monthly Rent: The term (“Lease Term”) shall be for one hundred twenty (120) months,
commencing on substantial completion of construction as determined pursuant to Section 5.G (the
“Commencement Date”) estimated to occur on June 1, 2000, and ending one hundred twenty (120) months
thereafter, (“Expiration Date”). In addition to all other sums payable by Tenant under this Lease,
Tenant shall pay as base monthly rent (“Base Monthly Rent”) for the Premises in an amount
determined pursuant to the following schedule:

	 	 	 	 	 
	Months 01 — 12:

	 	$	323,445.83	 
	Months 13 — 24:

	 	$	333,149.20	 
	Months 25 — 36:

	 	$	343,143.68	 
	Months 37 — 48:

	 	$	353,437.99	 
	Months 49 — 60:

	 	$	364,041.13	 
	Months 61 — 72:

	 	$	374,962.36	 
	Months 73 — 84:

	 	$	386,211.23	 
	Months 85 — 96:

	 	$	397,797.57	 
	Months 97 -108:

	 	$	409,731.49	 
	Months 109 — 120:

	 	$	422,023.44	 

Base Monthly Rent shall be due in advance on or before the first day of each calendar month during
the Lease Term. All sums payable by Tenant under this Lease shall be paid to Landlord in lawful
money of the United States of America, without offset or deduction and without prior notice or
demand, at the address specified in Section 1 of this Lease or at such place or places as may be
designated in writing by Landlord during the Lease Term. Base Monthly Rent for any period less
than a calendar month shall be a pro rata portion of the monthly installment. Concurrently with
Tenant’s execution of this Lease, Tenant shall pay to Landlord the sum of Three Hundred Twenty
Three Thousand Four Hundred Forty Five and 83/100 ($323,445.83) as prepaid rent for the first month
of the Lease.

     B. Late Charges: Tenant hereby acknowledges that late payment by Tenant to Landlord of Base
Monthly Rent and other sums due hereunder will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of which is extremely difficult to ascertain. Such costs include but
are not limited to: administrative, processing, accounting, and late charges which may be imposed
on Landlord by the terms of any contract, revolving credit, mortgage, or trust deed covering the
Premises. Accordingly, if any installment of Base Monthly Rent or other sum due from Tenant shall
not be received by Landlord or its designee within five (5) days after the rent is due, Tenant
shall pay to Landlord a late charge equal to five (5%) percent of such overdue amount, which late
charge shall be due and payable on the same date

3

 

that the overdue amount was due. The foregoing notwithstanding, Landlord agrees to provide
written notice and a 3-day cure period to Tenant no more than once every 18 months of the Lease
Term prior to assessing such late charge. The parties agree that such late charge represents a
fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant,
excluding interest and attorneys fees and costs. If any rent or other sum due from Tenant remains
delinquent for a period in excess of thirty (30) days then, in addition to such late charge, Tenant
shall pay to Landlord interest on any rent that is not paid when due at the Agreed Interest Rate
specified in Section 19.J following the date such amount became due until paid. Acceptance by
Landlord of such late charge shall not constitute a waiver of Tenant’s default with respect to such
overdue amount nor prevent Landlord from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not collected, for
three (3) consecutive installments of Base Monthly Rent, then the Base Monthly Rent shall
automatically become due and payable quarterly in advance, rather than monthly, notwithstanding any
provision of this Lease to the contrary.

     C. Security Deposit: Concurrently with Tenant’s execution of this Lease, Tenant has deposited
with Landlord the sum of Three Hundred Twenty Five Thousand Dollars ($325,000.00) (“Security
“Deposit”). Landlord shall not be deemed a trustee of the Security Deposit, may use the Security
Deposit in business, and shall not be required to segregate it from its general accounts. Tenant
shall not be entitled to interest on the Security Deposit. If Tenant defaults with respect to any
provisions of the Lease, including but not limited to the provisions relating to payment of Base
Monthly Rent or other charges, Landlord may, to the extent reasonably necessary to remedy Tenant’s
default, use any or all of the Security Deposit towards payment of the following: (i) Base Monthly
Rent or other charges in default; (ii) any other amount which Landlord may spend or become
obligated to spend by reason of Tenant’s default including, but not limited to Tenant’s failure to
restore or clean the Premises following vacation thereof. If any portion of the Security Deposit
is so used or applied, Tenant shall, within ten (10) days after written demand from Landlord,
deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its full
original amount, and shall pay to Landlord such other sums as necessary to reimburse Landlord for
any sums paid by Landlord. If Tenant shall monetarily default after expiration of any applicable
cure period more than three (3) times in any twelve (12) month period, then the Security Deposit
shall, within ten (10) days after demand by Landlord, be increased by Tenant to an amount equal to
three (3) times the Base Monthly Rent. Tenant may not assign or encumber the Security Deposit
without the consent of Landlord. Any attempt to do so shall be void and shall not be binding on
Landlord. The Security Deposit shall be returned to Tenant within thirty (30) days after the
Expiration Date and surrender of the Premises to Landlord, less any amount deducted in accordance
with this Section, together with Landlord’s written notice itemizing the amounts and purposes for
such deduction. In the event of termination of Landlord’s interest in this Lease, Landlord may
deliver or credit the Security Deposit to Landlord’s successor in interest in the Premises and
thereupon be relieved of further responsibility with respect to the Security Deposit.

5. CONSTRUCTION:

4

 

     A. Building Shell Construction: Prior to the Commencement Date, Landlord shall complete
construction of shell of the Building and interior core improvements (“Office Building Shell”) the
scope of which improvements are outlined in the plans and specifications attached as Exhibit
“C” (“Office Shell Plans and Specifications”). Landlord shall be responsible and pay for all
costs and expenses associated with the Office Building Shell. Tenant shall retain the right to
substitute material finishes in the lobby and core areas of the Building provided (i) Tenant shall
be responsible for any cost increases due to such substitution, and (ii) any delay in Substantial
Completion of the Premises resulting from such substitution shall be deemed a Tenant Delay pursuant
to Section 5.I of this Lease. The Office Building Shell shall be constructed in a good and
workmanlike fashion and in compliance with all codes, laws, rules and regulations of applicable
governmental authority. Landlord shall assign to Tenant any warranties related to the Office
Building Shell which would reduce Tenant’s maintenance obligations hereunder and shall cooperate
with Tenant to enforce all such warranties. Such warranties shall include the warranty on the roof
membrane Landlord has received from the roofing contractor.

     B. Tenant Improvement Plans: Tenant, at Tenant’s sole cost and expense, shall retain an
interior architect (“Architect”) to prepare plans and outline specifications to be attached as
Exhibit “D” (“Tenant Improvement Plans and Specifications”) with respect to the
construction of the balance of the improvements to the interior of the premises (“Tenant
Improvements”) necessary for Tenant’s use and occupancy of the Building. Landlord shall cause
Tenant Improvements to be constructed by the Devcon Construction (“General Contractor”), in
accordance with Tenant Improvement Plans and Specifications. The Tenant Improvement Plans and
Specifications shall be completed for all aspects of the work by (i) February 14, 2000 with all
detail necessary for submittal to the city for issuance of building permits, and (ii) March 6, 2000
with all detail necessary for construction and shall include any information required by the
relevant agencies regarding Tenant’s use of Hazardous Materials if applicable. The Tenant
Improvements shall consist of all items not included within the scope of the Office Building Shell.
All Tenant Improvements shall be subject to Landlord’s approval, which approval which shall not be
unreasonably withheld, conditioned or delayed. The Tenant Improvement Plans and Specifications
shall provide for a minimum build-out in all areas of the Premises consisting of: (i) fire
sprinklers, (ii) floor coverings, (iii) t-bar suspended ceiling (iv) distribution of the HVAC
system, (v) 2’ x 4’ drop-in florescent lighting, and (vi) any other work required by the City of
Santa Clara necessary to obtain a Certificate of Occupancy. Tenant shall not have the right to
delay the completion of the foregoing minimum Tenant Improvement build-out. The Tenant Improvement
Plans and Specifications shall be prepared in sufficient detail to allow the General Contractor to
construct the Tenant Improvements. The Tenant Improvements shall not be removed or altered by
Tenant without the prior written consent of Landlord as provided in Section 7. Tenant shall have
the right to depreciate and claim and collect any investment tax credits in the Tenant Improvements
paid for Tenant. Upon expiration of the Lease Term or any earlier termination of the Lease, the
Tenant Improvements shall become the property of Landlord and shall remain upon and be surrendered
with the Premises, and title thereto shall automatically vest in Landlord without any payment
therefore.

     Landlord shall use its reasonable best efforts to obtain a building permit from the City of
Santa Clara for the Tenant Improvements as soon as possible after submittal of the Tenant

5

 

Improvement Plans and Specifications, and thereafter to cause the General Contractor to
Substantially Complete the Tenant Improvements. The Tenant Improvements shall be deemed
substantially complete when: (i) Tenant Improvements have both been substantially completed in
accordance with the Tenant Improvement Plans and Specifications, as evidenced by the issuance of a
certificate of occupancy or its equivalent by the appropriate governmental authority, (ii) Tenant’s
Architect has certified that the Tenant Improvements have been completed in accordance with the
Tenant Improvement Plans and Specifications, and Landlord’s Architect has certified to Tenant that
the Office Building Shell and Project have been completed in accordance with the Office Building
Shell Plans and Specifications; and (iii) the Building systems including, but not limited to,
mechanical, electrical and plumbing, are operational to the extent necessary to service the
Premises, and Tenant has use of substantially all parking spaces called for under this Lease.
Installation of (i) Tenant’s data and phone cabling, (ii) Tenant’s furniture, or (iii) the exterior
landscaping shall not be required in order to deem the Tenant Improvements Substantially Complete.
Landlord agrees to provide Tenant a Certificate of Occupancy from the City of Santa Clara (or its
equivalent) within sixty (60) days following the Commencement Date.

     C. Pricing: Within ten (10) days after completion of the Tenant Improvements Plans and
Specifications, Landlord shall cause the General Contractor to submit to Tenant copies of
competitive bids (including a schedule of values for each bid) from at least three (3)
subcontractors (at least one of which such subcontractors may be specified by Tenant, subject to
Landlord’s reasonable approval) for each aspect of the work in excess of Five Thousand and No/100
Dollars ($5,000.00) related to the Tenant Improvements. The foregoing notwithstanding, Tenant
shall have the right to sole-source to designated subcontractors (subject to Landlord’s reasonable
approval) for specialty rooms, including the IDF/Server rooms. General Contractor shall not do any
self-performed work over $10,000.00 without first providing Tenant with 3 bids for comparison
purposes. Landlord shall cause the General Contractor to utilize the low bid in each case unless
Tenant approves General Contractor’s use of another subcontractor, and the cost of the Tenant
Improvements shall be based upon construction expenses equal to (i) the bid amounts as approved by
Tenant, and (ii) the general contractor fee specified in Section 5.H below (“Tenant Improvement
Budget”). Upon Tenant’s written approval of the Tenant Improvement Budget, which approval shall
not be unreasonably withheld or delayed, Landlord and Tenant shall be deemed to have given their
respective approvals of the final Tenant Improvement Plans and Specifications on which the cost
estimate was made, and Tenant shall cause the General Contractor shall proceed with the
construction of the Tenant Improvements in accordance with the terms of Section 5.G below. If
Tenant does not specifically approve or disapprove the bids within seven (7) days, Tenant shall be
deemed to have approved the bids.

     D. Change Orders: Tenant shall have the right to order changes in the manner and type of
construction of the Tenant Improvements. Upon request and prior to Tenant’s submitting any binding
change order, Landlord shall cause the General Contractor to promptly provide Tenant with written
statements of the cost to implement, cost breakdown, and the time delay and increased construction
costs associated with any proposed change order, which statements shall be binding on General
Contractor. If no time delay or increased construction cost amount is

6

 

noted on the written statement, the parties agree that there shall be no adjustment to the
construction cost or the Commencement Date associated with such change order. If ordered by
Tenant, Landlord shall cause the General Contractor shall implement such change order and the cost
of constructing the Tenant Improvements shall be increased or decreased in accordance with the cost
statement previously delivered by General Contractor to Tenant for any such change order. The fee
charged by General Contractor in addition to any such change order shall be consistent with Section
5.H below.

     E. Letter of Credit to Secure Tenant Improvement Construction: Within five (5) days following
the Effective Date, Tenant shall deposit with Landlord a letter of credit (“Letter of Credit”) in
an amount of Three Million Five Hundred Thousand Dollars ($3,500,000.00), to secure Tenant’s
obligation to complete Tenant Improvements pursuant to this Lease. The Letter of Credit shall
thereafter be promptly reduced upon presentation to Landlord of evidence reasonably satisfactory to
Landlord that a percentage of the Tenant Improvements equal to the requested reduction has been
satisfactorily completed and paid for including partial lien waivers and architects’ certificates.
Upon Landlord’s receipt of reasonably satisfactory evidence that the Tenant Improvements have been
completed free of liens and that Tenant has fully paid for the cost of all of Tenant Improvements,
the Letter of Credit shall be cancelled and returned to Tenant by Landlord. Landlord shall be
entitled to draw against the full amount of the Letter of Credit at any time provided only that
Landlord certifies to the issuer of the Letter of Credit that Tenant has failed to make a payment
for Tenant Improvement costs as provided in 5.D (unless Tenant disputes an amount due in which
event Tenant shall be entitled to withhold the amount so disputed), that Tenant has failed to
timely renew or extend the Letter of Credit as required by this paragraph, or that Tenant has
failed to amend the Letter of Credit or obtain a new Letter of Credit as required by this
paragraph. Tenant shall keep the Letter of Credit in effect at all times prior to payment in full
for the Tenant Improvements. At least sixty (60) days prior to expiration of any Letter of Credit,
the term thereof shall be renewed or extended for a period that extends until Tenant has paid in
full for the Tenant Improvements. Tenant’s failure to so renew or extend the Letter of Credit
shall be a material default of this Lease by Tenant entitling Landlord to draw down on the entire
amount of the Letter of Credit. Any amounts drawn on the Letter of Credit shall be used to pay for
the cost of the Tenant Improvements. In the event the Letter of Credit is drawn by Landlord, and
the proceeds used to pay for the completion of the Tenant Improvements, then promptly following
Landlord’s completion of the Tenant Improvements Landlord shall refund to Tenant any excess
proceeds from the Letter of Credit.

     F. Tenant Improvement Costs: The cost of Tenant Improvements shall consist of only the
following to the extent actually incurred by General Contractor in connection with the construction
of Tenant Improvements: construction costs, all permit fees, all fees associated with Tenant’s
Architect, engineers and consultants, construction taxes or other costs imposed by governmental
authorities related to the Tenant Improvements, and the General Contractor overhead as described in
Section 5.H below. During the course of construction of Tenant Improvements, Landlord shall cause
the General Contractor to deliver to Tenant not more than once each calendar month a written
request for payment (“Progress Invoice”) which shall include and be accompanied by General
Contractor’s certified statements setting forth the amount

7

 

requested, certifying the percentage of completion of each item for which reimbursement is
requested. Tenant shall have a right of reasonable review and approval of the Progress Invoice.
Tenant shall pay directly to the General Contractor the amount due pursuant to the Progress
Invoice, within fifteen (15) days after Tenant’s receipt of the above items. All costs for Tenant
Improvements shall be fully documented to and verified by Tenant.

     G. Force Majeure: Any prevention, delay or stoppage due to strikes, lockouts, inclement
weather, labor disputes, inability to obtain labor, materials, fuel or reasonable substitutes
therefor, governmental restrictions, regulations, controls, civil commotion, fire or other act of
God, and another causes beyond the reasonable control of Landlord (except financial inability)
shall extend the dates contained in this Section 5 by a period equal to the period of any said
prevention, delay or stoppage; provided, however, that in the event of any such prevention, delay
or stoppage, Landlord shall notify Tenant in writing within five (5) business days of Landlord’s
discovery of such. If Landlord fails to do so, Landlord may not claim that any such delay extends
the date for Substantial Completion. If Landlord cannot obtain building permits or Substantially
Complete construction by the dates set forth herein, this Lease shall not be void or voidable nor
shall Landlord be liable for any loss or damage resulting therefrom.

     In the event Landlord has failed to achieve Substantial Completion of the Premises by August
1, 2000 (as such date is extended by Tenant Delays), Tenant shall have the right to terminate the
involvement of Landlord and the General Contractor in the construction process by providing
Landlord written notice of such election. Tenant shall thereafter be entitled to complete
construction using a general contractor and/or construction manager of selected by Tenant. In such
event, Tenant shall be entitled to deduct from the Base Monthly Rent initially payable hereunder
any Tenant Improvement costs incurred by Tenant in excess of the Tenant Improvement Budget approved
by Tenant pursuant to Section 5.C as a result of Landlord’s failure to achieve Substantial
Completion.

     H. General Contractor Overhead & Profit: As compensation to General Contractor for its
services related to construction of the Building Shell and Tenant Improvements, General Contractor
shall receive a fee of six percent (6.0%) of the cost of construction to cover all of the
following: construction supervision and administration, temporary on-site facilities, home office
administration, supervision, project executive, general superintendent, general overhead, office
supplies, accounting services, computer charges, telephone expenses, fax office/job site, data
processing, secretarial services, mail, express mail, insurance, City licenses, project manager,
estimator, project engineer, scheduling, reconstruction services, superintendent, general labor,
daily clean-up and final clean-up, protection of work, petty cash, safety enforcement and safety
signage, small tools, first aid facilities, general field coordination, project field office,
Tenant vendor coordination, blueprinting, job trailer, temporary structures, utilities, and
coordination and construction profit. Except as provided therein, Landlord or General Contractor
shall not receive any other fee or payment from Tenant in connection with General Contractor’s
services.

     I. Tenant Delays: A “Tenant Delay” shall mean any delay in Substantial Completion of the
Building as a result of any of the following: (i) Tenant’s failure to complete or

8

 

approve the Tenant Improvement Plans by the dates set forth in Section 5.B, (ii) Tenant’s
failure to approve the bids for construction by the dates set forth in Section 5.C, (iii) changes
to the plans requested by Tenant which delay the progress of the work, (iv) Tenant’s request for
materials components, or finishes which are not available in a commercially reasonable time given
the target Commencement Date, (v) Tenant’s failure to make a progress payment for Tenant
Improvement costs as provided in Section 5.F, (vi) Tenant’s request for more than one (1) rebidding
of the cost of all or a portion of the work, and (vii) any errors or omissions in the Tenant
Improvement Plans provided by Tenant’s architect. In the event Landlord believes Tenant is causing
a Tenant Delay, Landlord shall notify Tenant in writing, state the action or inaction that it
believes is causing the Tenant Delay, and state the date from which a Tenant Delay is being
calculated. Claim of Tenant Delay shall be made within five (5) days after Landlord’s discovery of
the occurrence of the event giving rise to such claim. Tenant shall have the right to expedite
work, at its sole cost, to minimize the effect of any Tenant Delays, to the extent it is
practicable to do so. No Tenant Delay shall advance the Commencement Date to a date before the
estimated Commencement Date of June 1, 2000. Notwithstanding anything to the contrary set forth in
this Lease, and regardless of the actual date the Premises are Substantially Complete, the
Commencement Date shall be deemed to be the date the Commencement Date would have occurred if no
Tenant Delay had occurred as reasonable determined by Landlord. In addition, if a Tenant Delay
results in an increase in the cost of the labor or materials, Tenant shall pay the cost of such
increases.

     J. Insurance: Landlord shall cause the General Contractor to procure (as a cost of the
Building Shell) a “Broad Form” liability insurance policy in the amount of Three Million Dollars
($3,000,000.00). Landlord shall also procure (as a cost of the Building Shell) builder’s risk
insurance for the full replacement cost of the Building Shell and Tenant Improvements while the
Building and Tenant Improvements are under construction, up until the date that the casualty
insurance policy described in Section 9 is in full force and effect.

     K. Punch List & Warranty: After the Building Shell and Tenant Improvements are Substantially
Complete, Landlord shall cause the General Contractor to immediately correct any construction
defect or other “punch list” item which Tenant brings to General Contractor’s attention. All such
work shall be performed so as to reasonably minimize the interruption to Tenant and its activities
on the Premises. General Contractor shall provide a standard contractor’s warranty with respect to
the Building Shell and the Tenant Improvements for one (1) year from the Commencement Date. Such
warranty shall exclude routine maintenance, damage caused by Tenant’s negligence or misuse, and
acts of God.

     Landlord shall warrant the Office Building Shell and Tenant Improvements against defects in
workmanship or materials, including, but not limited to, HVAC systems, electrical system and
devices, plumbing system and devices (but excluding Tenant Improvements performed by subcontractors
sole-sourced pursuant to Section 5.C above), for one (1) year from the Commencement Date. Such
warranty shall exclude (i) routine maintenance, (ii) damage caused by the negligence or misuse by
Tenant, and (iii) acts of God.

9

 

     L. Other Work by Tenant: All work not described in the Shell Plans and Specifications or
Tenant Improvement Plans and Specifications, such as furniture, telephone equipment, telephone
wiring and office equipment work, shall be furnished and installed by Tenant at Tenant’s cost.
Prior to Substantial Completion, Tenant shall be obligated to (i) provide active phone lines to any
elevators, and (ii) contract with a firm to monitor the fire system. When the construction of the
Tenant Improvements has proceeded to the point where Tenant’s work of installing its fixtures and
equipment in the Premises can be commenced, General Contractor shall notify Tenant and shall permit
Tenant and its authorized representatives and contractors access to the Premises before the
Commencement Date for the purpose of installing Tenant’s trade fixtures and equipment. Any such
installation work by Tenant or its authorized representatives and contractor shall be undertaken
upon the following conditions: (i) the entry into the Premises by Tenant or its representatives or
contractors shall not interfere with or delay General Contractor’s work, (ii) the entry into the
Premises by Tenant or its representatives or contractors shall be under all the terms and
conditions of the Lease except for payment of Base Monthly Rent and other expenses due under the
Lease, and (iii) any contractor used by Tenant in connection with such entry shall not interfere
with the ability of the General Contractor to complete construction using union labor.

6. ACCEPTANCE OF POSSESSION AND COVENANTS TO SURRENDER:

     A. Delivery and Acceptance: On the Commencement Date, Landlord shall deliver and Tenant shall
accept possession of the Premises and enter into occupancy of the Premises on the Commencement
Date. Tenant acknowledges that it has had an opportunity to conduct, and has conducted, such
inspections of the Premises as it deems necessary to evaluate its condition. Except as otherwise
specifically provided herein, Tenant agrees to accept possession of the Premises in its then
existing condition, subject to all Restrictions and without representation or warranty by Landlord
except as provided in this Lease. Tenant’s taking possession of any part of the Premises shall be
deemed to be an acceptance of any work of improvement done by Landlord in such part as complete and
in accordance with the terms of this Lease except for “Punch List” type items of which Tenant has
given Landlord written notice prior to the time Tenant takes possession, subject to: (i) any claims
with respect to latent defects, (ii) the warranties from Landlord contained in this Lease, (iii)
Landlord’s obligations to correct construction defects, and (iv) any failure of the Premises to
comply with laws in effect as of the date of completion. At the time Landlord delivers possession
of the Premises to Tenant, Landlord and Tenant shall together execute an acceptance agreement.
Landlord shall have no obligation to deliver possession, nor shall Tenant be entitled to take
occupancy, of the Premises until such acceptance agreement has been executed, and Tenant’s
obligation to pay Base Monthly Rent and Additional Rent shall not be excused or delayed because of
Tenant’s failure to execute such acceptance agreement. Within sixty (60) days after the
Commencement Date, Tenant agrees to be in occupancy of at least fifty percent (50%) of the rentable
square footage of the Premises.

     B. Condition Upon Surrender: Tenant further agrees on the Expiration Date or on the sooner
termination of this Lease, to surrender the Premises to Landlord in good condition and repair,
normal wear and tear, casualty damage and maintenance otherwise the responsibility of Landlord
pursuant to this Lease excepted. In this regard, “normal wear and tear” shall be

10

 

construed to mean wear and tear caused to the Premises by the natural aging process which
occurs in spite of prudent application of the best commercially reasonable standards for
maintenance, repair replacement, and janitorial practices, and does not include items of neglected
or deferred maintenance. In any event, Tenant shall cause the following to be done prior to the
Expiration Date or sooner termination of this Lease: (i) all interior walls shall be cleaned,
patched, and otherwise made paint-ready, (ii) all tiled floors shall .be cleaned and
waxed, (iii) all carpets shall be cleaned and shampooed, (iv) all broken, marred, stained or
nonconforming acoustical ceiling tiles shall be replaced, (v) all cabling placed above the ceiling
by Tenant or Tenant’s contractors shall be removed, (vi) all windows shall be washed; (vii) the
HVAC system shall be serviced by a reputable and licensed service firm and left in “good operating
condition and repair” as so certified by such firm, (viii) the plumbing and electrical systems and
lighting shall be placed in good order and repair (including replacement of any burned out,
discolored or broken light bulbs, ballasts, or lenses. On or before the Expiration Date or sooner
termination of this Lease, Tenant shall remove all its personal property and trade fixtures from
the Premises. All property and fixtures not so removed shall be deemed as abandoned by Tenant. At
the expiration of the Lease Term, Landlord shall not have the right to require that Tenant remove
from the Premises any of the Tenant Improvements or any Alterations made with Landlord’s consent
unless Landlord, at the time of granting such consent, indicates that the subject Alteration must
be removed upon the expiration of the Lease Term. With respect to Permitted Alterations as defined
in Section 7A. below, Tenant shall ascertain from Landlord within ninety (90) days before the
Expiration Date whether Landlord desires to have any such Permitted Alterations removed. If
Landlord shall so desire, Tenant shall, at Tenant’s sole cost and expense, remove such Alterations
and Permitted Alterations as Landlord requires and shall repair any damage to the Building which
results from Tenant’s removal of any Alterations, Permitted Alterations and any improvements and/or
Tenant’s equipment, fixtures, and component and shall repair and restore said Premises or such
parts thereof before the Expiration Date. Such repair and restoration shall include causing the
Premises to be brought into compliance with all applicable building codes and laws in effect at the
time of the removal to the extent such compliance is necessitated by the repair and restoration
work.

     C. Failure to Surrender: If the Premises are not surrendered at the Expiration Date or sooner
termination of this Lease in the condition required by this Section 6, Tenant shall be deemed in a
holdover tenancy pursuant to this Section 6.C and Tenant shall indemnify, defend, and hold Landlord
harmless against loss or liability resulting from delay by Tenant in so surrendering the Premises
including, without limitation, any claims made by any succeeding tenant founded on such delay and
costs incurred by Landlord in returning the Premises to the required condition, plus interest at
the Agreed Interest Rate provided, however, that Landlord shall be required to give Tenant at least
thirty (30) days’ advance notice of any potential loss or liability resulting from such delay. Any
holding over after the termination or Expiration Date with Landlord’s express written consent,
shall be construed as month-to-month tenancy, terminable on thirty (30) days written notice from
either party, and Tenant shall pay as Base Monthly Rent to Landlord a rate equal to one hundred
twenty five percent (125%) of the Base Monthly Rent due in the month preceding the termination or
Expiration Date, plus all other amounts payable by Tenant under this Lease. Any holding over shall
otherwise be on the terms

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and conditions herein specified, except those provisions relating to the Lease Term and any
options to extend or renew, which provisions shall be of no further force and effect following the
expiration of the applicable exercise period. If Tenant remains in possession of the Premises
after the Expiration Date or sooner termination of this Lease without Landlord’s consent, Tenant’s
continued possession shall be on the basis of a tenancy at sufferance and Tenant shall pay as rent
during the holdover period an amount equal to one hundred fifty percent (150%) of the Base Monthly
Rent due in the month preceding the termination or Expiration Date, plus all other amounts payable
by Tenant under this Lease. This provision shall survive the termination or expiration of the
Lease.

7. ALTERATIONS AND ADDITIONS:

     A. Tenant’s Alterations: Tenant shall not make, or suffer to be made, any alteration or
addition to the Premises (“Alterations”), or any part thereof, without obtaining Landlord’s prior
written consent, which consent shall not be unreasonably withheld, and delivering to Landlord the
proposed architectural and structural plans for all such Alterations at least fifteen (15) days
prior to the start of construction. If such Alterations affect the structure of the Building,
Tenant additionally agrees to reimburse Landlord its reasonable out-of-pocket costs incurred in
reviewing Tenant’s plans. After obtaining Landlord’s consent, which consent shall state whether or
not Landlord will require Tenant to remove such Alteration at the expiration or earlier termination
of this Lease, Tenant shall not proceed to make such Alterations until Tenant has obtained all
required governmental approvals and permits, and provides Landlord reasonable security, in form
reasonably approved by Landlord, to protect Landlord against mechanics’ lien claims. Tenant agrees
to provide Landlord (i) written notice of the anticipated and actual start-date of the work, (ii) a
complete set of half-size (15” X 21”) vellum as-built drawings, and (iii) a certificate of
occupancy for the work upon completion of the Alterations. All Alterations shall be constructed in
compliance with all applicable building codes and laws including, without limitation, the Americans
with Disabilities Act of 1990 as amended from time to time. During the Lease Term, the Alterations
shall be the property of the Tenant and Tenant shall be entitled to all tax benefits associated
therewith. Upon the Expiration Date, all Alterations, except movable furniture and trade fixtures,
shall become a part of the realty and belong to Landlord but shall nevertheless be subject to
removal by Tenant as provided in Section 6 above. Alterations which are not deemed as trade
fixtures include heating, lighting, electrical systems, air conditioning, walls, carpeting, or any
other installation which has become an integral part of the Premises. All Alterations shall be
maintained, replaced or repaired by Tenant at its sole cost and expense. Notwithstanding the
foregoing, Tenant shall be entitled without obtaining Landlord’s consent, to make Alterations which
do not affect the structure of the Building or which do not cost more than Fifty Thousand Dollars
($50,000.00) per Alteration (“Permitted Alterations”); provided, however, that Tenant shall still
be required to comply with all other provisions of this paragraph.

     B. Free From Liens: Tenant shall keep the Premises free from all liens arising out of work
performed, materials furnished, or obligations incurred by Tenant or claimed to have been performed
for Tenant. In the event Tenant fails to discharge any such lien within twenty (20) days after
receiving notice of the filing, Landlord shall be entitled to discharge the lien at

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Tenant’s expense and all resulting costs incurred by Landlord, including reasonable attorney’s
fees shall be due from Tenant as additional rent.

     C. Compliance With Governmental Regulations: The term Laws or Governmental Regulations shall
include all federal, state, county, city or governmental agency laws, statutes, ordinances,
standards, rules, requirements, or orders now in force or hereafter enacted, promulgated, or
issued. The term also includes government measures regulating or enforcing public access, traffic
mitigation, occupational, health, or safety standards for employers, employees, landlords, or
tenants. Tenant, at Tenant’s sole expense shall make all repairs, replacements, alterations, or
improvements needed to comply with all Governmental Regulations, except as specifically provided
otherwise in this Lease.

All costs associated with compliance shall be borne by Tenant if the requirement for compliance is
triggered by: (i) Tenant’s specific use or change of use of the Premises; or (ii) Tenant’s
construction or installation of any Alterations or trade fixtures. If a capital improvement or
replacement to the Premises is required pursuant to this Section 7.C. for any other reason, then
within fifteen (15) business days after Tenant delivers evidence reasonably satisfactory to
Landlord substantiating Tenant’s payment of such capital improvement, Landlord shall reimburse
Tenant for the cost of the improvement or replacement less that portion of the cost equal to the
product of such total cost multiplied by a fraction, the numerator of which is the number of years
remaining in the Lease Term, the denominator of which is the useful life (in years) of the capital
improvement, as reasonably determined by Landlord in accordance with generally accepted accounting
principles. If the capital improvement is made during the initial Lease Term, Tenant’s share shall
initially be based on the initial Lease Term and if Tenant thereafter exercises its Option pursuant
to Section 18 below, then upon the commencement of the Option Term, an adjustment shall be made so
that during the Option Term Tenant shall pay its share determined by multiplying the cost of the
capital improvement by a fraction, the numerator of which is the sum of the Lease Term remaining at
the time the capital expenditure was made and the Option Term and the denominator of which is the
useful life of the capital improvement. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action or proceeding against Tenant (whether Landlord be a party thereto
or not) that Tenant has violated any such law, regulation or other requirement in its use of the
Premises shall be conclusive of that fact as between Landlord and Tenant.

8. MAINTENANCE OF PREMISES:

     A. Landlord’s Obligations: Landlord at its sole cost and expense, shall maintain in good
condition, order, and repair, and replace as and when necessary, all structural portions of the
Building, including, without limitation, the foundation, floor slabs, load bearing walls,
below-ground plumbing and sewage facilities, columns and roof structure of the Building Shell, and
the structural elements of the adjacent parking structure.

     B. Tenant’s Obligations: Tenant shall clean, maintain, repair and replace when necessary the
Premises and every part thereof through regular inspections and servicing, including but not
limited to: (i) all above-the-foundation plumbing and sewage facilities, (ii) all

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heating ventilating and air conditioning facilities and equipment, (iii) all fixtures,
interior walls floors, carpets and ceilings, (iv) all windows, door entrances, plate glass and
glazing systems including caulking, and skylights, (v) all electrical facilities and equipment,
(vi) all automatic fire extinguisher equipment, (vii) the parking lot and all underground utility
facilities servicing the Premises, (viii) all elevator equipment, (ix) the roof membrane system
(subject to the provisions of Section 8.G. below), and (x) all waterscape, landscaping and
shrubbery. All wall surfaces and floor tile are to be maintained in an as good a condition as when
Tenant took possession free of holes, gouges, or defacements. With respect to items (ii), (viii)
and (ix) above, Tenant shall provide Landlord a copy of a service contract between Tenant and a
licensed service contractor providing for periodic maintenance of all such systems or equipment in
conformance with the manufacturer’s recommendations. Tenant shall provide Landlord a copy of such
preventive maintenance contracts and paid invoices for the recommended work if requested by
Landlord. The foregoing notwithstanding, Tenant shall have no responsibility to perform any
repair, maintenance or improvement: (i) occasioned by fire, acts of God or other casualty, whether
or not covered by insurance, or by the exercise of the power of eminent domain, (ii) required as a
consequence of any violation of laws or construction defect in the Premises existing as of the
Commencement Date, or (iii) for which Landlord has a right of reimbursement from others.

     C. Landlord and Tenant’s Obligations Regarding Reimbursable Operating Costs: In addition to
the direct payment by Tenant of expenses as provided in Sections 8.B, 9, 10 and 11 of this Lease,
Tenant agrees to reimburse Landlord for Tenant’s Allocable Share (as defined in Section 8.E below)
of Reimbursable Operating Costs (as defined in Section 8.D below) resulting from Landlord payment
of expenses related to the Building or Project which are not otherwise paid by Tenant directly.
Tenant agrees to pay its Allocable Share of the Reimbursable Operating Costs as additional rental
within thirty (30) days of written invoice from Landlord.

     D. Reimbursable Operating Costs: For purposes of calculating Tenant’s Allocable Share of
Building and Project Costs, the term “Reimbursable Operating Costs” is defined as all costs and
expenses of the nature hereinafter described which are incurred by Landlord in connection with
ownership and operation of the Building or the Project in which the Premises are located, together
with such additional facilities as may be determined by Landlord to be reasonably desirable or
necessary to the ownership and operation of the Building and/or Project. All costs and expenses
shall be determined in accordance with generally accepted accounting principles which shall be
consistently applied (with accruals appropriate to Landlord’s business), including but not limited
to the following: (i) common area utilities, including water, power, telephone, heating, lighting,
air conditioning, ventilating, and Building utilities to the extent not separately metered; (ii)
common area maintenance and service agreements for the Building and/or Project and the equipment
therein, including without limitation, common area janitorial services, alarm and security
services, exterior window cleaning, and maintenance of the sidewalks, landscaping, waterscape, roof
membrane, parking areas, driveways, service areas, mechanical rooms, elevators, and the building
exterior; (iii) insurance premiums and costs, including without limitation, the premiums and cost
of fire, casualty and liability coverage and rental abatement and earthquake (as limited in Section
9.B below) insurance applicable to the Building or Project; (iv) repairs, replacements and general
maintenance (excluding repairs and

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general maintenance paid by proceeds of insurance or by Tenant or other third parties, and
repairs or alterations attributable solely to tenants of the Building or Project other than
Tenant); and (v) all real estate taxes and assessment installments or other impositions or charges
which may be levied on the Building or Project, upon the occupancy of the Building or Project and
including any substitute or additional charges which may be imposed during, or applicable to the
Lease Term including real estate tax increases due to a sale, transfer or other change of ownership
of the Building or Project, as such taxes are levied or appear on the City and County tax bills and
assessment rolls. Landlord shall have no obligation to provide guard services or other security
measures for the benefit of the Project. Tenant assumes all responsibility for the protection of
Tenant and Tenant’s Agents from acts of third parties; provided, however, that nothing contained
herein shall prevent Landlord, at its sole option, from providing security measures for the
Project. This is a “Net” Lease, meaning that Base Monthly Rent is paid to Landlord absolutely net
of all costs and expenses except as otherwise specifically set forth in this Lease. The provision
for payment of Reimbursable Operating Costs by means of periodic payment of Tenant’s Allocable
Share of Building and/or Project Costs is intended to pass on to Tenant and reimburse Landlord for
all costs of operating and managing the Building and/or Project. Notwithstanding anything to the
contrary contained in this Lease, Reimbursable Operating Costs shall not include any of the items
set forth in Exhibit “G” attached hereto.

     E. Tenant’s Allocable Share: For purposes of prorating Reimbursable Operating Costs which
Tenant shall pay, Tenant’s Allocable Share of Reimbursable Operating Costs shall be computed by
multiplying the Reimbursable Operating Costs by a fraction, the numerator of which is the rentable
square footage of the Premises and the denominator of which is either the total rentable square
footage of the Building if the service or cost is allocable only to the Building, or the total
square footage of the Project if the service or cost is allocable to the entire Project. Tenant’s
obligation to share in Reimbursable Operating Costs shall be adjusted to reflect the Lease
Commencement and Expiration dates and is subject to recalculation in the event of expansion of the
Building or Project.

     F. Waiver of Liability: Failure by Landlord to perform any defined services, or any cessation
thereof, when such failure is caused by accident, breakage, repairs, strikes, lockout or other
labor disturbances or labor disputes of any character or by any other cause, similar or dissimilar,
unless due to the gross negligence or willful misconduct of Landlord, shall not render Landlord
liable to Tenant in any respect, including damages to either person or property, nor be construed
as an eviction of Tenant, nor cause an abatement of rent, nor relieve Tenant from fulfillment of
any covenant or agreement hereof. Should any equipment or machinery utilized in supplying the
services listed herein break down or for any cause cease to function properly, upon receipt of
written notice from Tenant of any deficiency or failure of any services, Landlord shall use
reasonable diligence to repair the same promptly, but Tenant shall have no right to terminate this
Lease and shall have no claim for rebate of rent or damages on account of any interruptions in
service occasioned thereby or resulting therefrom. Tenant waives the provisions of California
Civil Code Sections 1941 and 1942 concerning the Landlord’s obligation of tenantability and
Tenant’s right to make repairs and deduct the cost of such repairs from the rent. Landlord shall
not be liable for a loss of or injury to person or property, however occurring, through or in
connection with or incidental to furnishing, or its failure to furnish, any of the foregoing.

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     G. Replacements: If as a part of Tenant’s fulfillment of its obligations under Section 8.B
above, Tenant is required to (i) replace the roof membrane on the Building, or (ii) replace any
portion of the Office Building Shell or Common Area which costs in excess of Fifty Thousand Dollars
($50,000.00) and such replacement occurs in the last two (2) years of the Lease Term, then Landlord
shall, within ten (10) days following receipt of written invoices and supporting documentation
evidencing the reasonable costs incurred by Tenant in making such replacement, reimburse Tenant for
the entire cost of the replacement less that portion of the cost equal to the product of such total
cost multiplied by a fraction, the numerator of which is the number of years remaining in the Lease
Term, and the denominator of which is the useful life (in years) of the replacement. If the
replacement occurs during the initial Lease Term, Tenant’s share shall initially be based on the
initial Lease Term and if Tenant thereafter exercises its Option pursuant to Section 18 below, then
upon the commencement of the Option Term, an adjustment shall be made so that during the Option
Term Tenant shall pay its additional share determined by multiplying the cost of the replacement by
a fraction, the numerator of which is the sum of the Lease Term remaining at the time of the
replacement and the Option Term and the denominator of which is the useful life of the replacement.

9. HAZARD INSURANCE:

     A. Tenant’s Use: Tenant shall not use or permit the Premises, or any part thereof, to be used
for any purpose other than that for which the Premises are hereby leased; and no use of the
Premises shall be made or permitted, nor acts done, which will cause an increase in premiums or a
cancellation of any insurance policy covering the Premises or any part thereof, nor shall Tenant
sell or permit to be sold, kept, or used in or about the Premises, any article prohibited by the
standard form of fire insurance policies. Tenant shall, at its sole cost, comply with all
requirements of any insurance company or organization necessary for the maintenance of reasonable
fire and public liability insurance covering the Premises and appurtenances.

     B. Landlord’s Insurance: Landlord agrees to purchase and keep in force fire, extended
coverage and rental loss (such rental loss covering a 12 month period) insurance in an amount equal
to the replacement cost of the Building (not including any Tenant Improvements or Alterations paid
for by Tenant) as determined by Landlord’s insurance company’s appraisers. Landlord agrees to
obtain earthquake insurance subject to the terms hereof if available, but only to the extent the
cost thereof does not exceed five cents ($.05) per square foot of the Premises per month,
compounded each year during the Lease term at three percent (3%). If the premium due for such
insurance exceeds the foregoing amount, Landlord can elect to continue such insurance and pay the
excess portion of the premium or to terminate earthquake coverage upon ten (10) days’ prior written
notice to Tenant, unless Tenant notifies Landlord in writing within such ten (10) day period that
Tenant will pay the entire cost of the insurance premium due for that year. The parties shall
review the earthquake coverage and premiums due annually during the Lease term in accordance with
the foregoing. Landlord shall be responsible for paying the deductible under the earthquake
insurance carried by Landlord pursuant to the terms hereof and the deductible payable in the event
of an earthquake shall not be subject to reimbursement by Tenant. Additionally, Landlord may
maintain a policy of commercial general liability insurance insuring Landlord (and such others
designated by Landlord) against liability for personal injury,

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bodily injury, death and damage to property occurring or resulting from an occurrence in, on
or about the Premises or Project in an amount as Landlord determines is reasonably necessary for
its protection. Tenant agrees to pay Landlord as additional rent, on demand, the full cost of said
insurance as evidenced by insurance billings to Landlord, and in the event of damage covered by
said insurance, the amount of any deductible under such policy. Payment shall be due to Landlord
within thirty (30) days after written invoice to Tenant. It is understood and agreed that Tenant’s
obligation under this Section will be prorated to reflect the Lease Commencement and Expiration
Dates.

     C. Tenant’s Insurance: Tenant agrees, at its sole cost, to insure its personal property,
Tenant Improvements (for which it has paid from sources other than the Work Allowance), and
Alterations for their full replacement value (without depreciation) and to obtain worker’s
compensation and public liability and property damage insurance for occurrences within the Premises
with a combined single limit of not less than Five Million Dollars ($5,000,000.00). Tenant’s
liability insurance shall be primary insurance containing a cross-liability endorsement, and shall
provide coverage on an “occurrence” rather than on a “claims made” basis. Tenant shall
name Landlord and Landlord’s lender as an additional insured and shall deliver a copy of the
policies and renewal certificates to Landlord. All such policies shall provide for thirty (30)
days’ prior written notice to Landlord of any cancellation, termination, or reduction in coverage.

     D. Waiver: Landlord and Tenant hereby waive all rights each may have against the other on
account of any loss or damage sustained by Landlord or Tenant, as the case may be, or to the
Premises or its contents, which may arise from any risk covered by their respective insurance
policies (or which would have been covered had such insurance policies been maintained in
accordance with this Lease) as set forth above. The Parties shall use their reasonable efforts to
obtain from their respective insurance companies a waiver of any right of subrogation which said
insurance company may have against Landlord or Tenant, as the case may be.

10. TAXES: Tenant shall be liable for and shall pay as additional rental, prior to delinquency,
the following: (i) all taxes and assessments levied against Tenant’s personal property and trade or
business fixtures; (ii) all real estate taxes and assessment installments or other impositions or
charges which may be levied on the Premises or upon the occupancy of the Premises, including any
substitute or additional charges which may be imposed applicable to the Lease Term; and (iii) real
estate tax increases due to an increase in assessed value resulting from a sale, transfer or other
change of ownership of the Premises as it appears on the City and County tax bills during the Lease
Term. Tenant’s obligation under this Section shall be prorated to reflect the Lease Commencement
and Expiration Dates. If, at any time during the Lease Term a tax, excise on rents, business
license tax or any other tax, however described, is levied or assessed against Landlord as a
substitute or addition, in whole or in part, for taxes assessed or imposed on land or Buildings,
Tenant shall pay and discharge its pro rata share of such tax or excise on rents or other tax
before it becomes delinquent; except that this provision is not intended to cover net income taxes,
inheritance, gift or estate tax imposed upon Landlord. In the event that a tax is placed, levied,
or assessed against Landlord and the taxing authority takes the

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position that Tenant cannot pay and discharge its pro rata share of such tax on behalf of Landlord,
then at Landlord’s sole election, Landlord may increase the Base Monthly Rent by the exact amount
of such tax and Tenant shall pay such increase. If by virtue of any application or
proceeding brought by Landlord, there results a reduction in the assessed value of the Premises
during the Lease Term, Tenant agrees to pay Landlord a fee consistent with the fees charged by a
third party appeal firm for such services. Tenant at its cost shall have the right, at any time,
to seek a reduction in the assessed valuation of the Premises or to contest any real property taxes
that are to be paid by Tenant. Landlord shall not be required to join in any such proceeding or
contest unless the provisions of any law require that the proceeding or contest be brought by or in
the name of the owner of the Premises. In such event, Landlord shall join in the proceeding or
contest or permit it to be brought in Landlord’s name, provided that Landlord is not required to
bear any cost in connection therewith.

11. UTILITIES: Tenant shall pay directly to the providing utility all water, gas, electric,
telephone, and other utilities supplied to the Premises. Landlord shall not be liable for loss of
or injury to person or property, however occurring (unless due to the gross negligence or willful
misconduct of Landlord), through or in connection with or incidental to furnishing or the utility
company’s failure to furnish utilities to the Premises, and in such event Tenant shall not be
entitled to abatement or reduction of any portion of Base Monthly Rent or any other amount payable
under this Lease. Notwithstanding the foregoing, if utility services to the Premises are
interrupted for a period of thirty (30) continuous business days through no fault of Tenant, then
Tenant shall be entitled to an abatement of rent to the extent of the interference with Tenant’s
use of the Premises occasioned thereby beginning on the expiration of such thirty (30) day period.

12. TOXIC WASTE AND ENVIRONMENTAL DAMAGE:

     A. Tenant’s Responsibility: Without the prior written consent of Landlord, Tenant or Tenant’s
agents, employees, contractors and invitees (“Tenant’s Agents”) shall not bring, use, or permit
upon the Premises, or generate, create, release, emit, or dispose (nor permit any of the same) from
the Premises any chemicals, toxic or hazardous gaseous, liquid or solid materials or waste,
including without limitation, material or substance having characteristics of ignitability,
corrosivity, reactivity, or toxicity or substances or materials which are listed on any of the
Environmental Protection Agency’s lists of hazardous wastes or which are identified in Division 22
Title 26 of the California Code of Regulations as the same may be amended from time to time or any
wastes, materials or substances which are or may become regulated by or under the authority of any
applicable local, state or federal laws, judgments, ordinances, orders, rules, regulations, codes
or other governmental restrictions, guidelines or requirements (“Hazardous Materials”) except for
those substances customary in typical office uses for which no consent shall be required. In order
to obtain consent, Tenant shall deliver to Landlord its written proposal describing the toxic
material to be brought onto the Premises, measures to be taken for storage and disposal thereof,
safety measures to be employed to prevent pollution of the air, ground, surface and ground water.
Landlord’s approval may be withheld in its reasonable judgment. In the event Landlord consents to
Tenant’s use of Hazardous Materials on the Premises or such consent is not required, Tenant
represents and warrants that it shall comply with all Governmental Regulations applicable to
Hazardous Materials including doing the

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following: (i) adhere to all reporting and inspection requirements imposed by Federal, State,
County or Municipal laws, ordinances or regulations and will provide Landlord a copy of any such
reports or agency inspections; (ii) obtain and provide Landlord copies of all necessary permits
required for the use and handling of Hazardous Materials on the Premises; (iii) enforce Hazardous
Materials handling and disposal practices consistent with industry standards; (iv) surrender the
Premises free from any Hazardous Materials arising from Tenant’s bringing, using, permitting,
generating, creating, releasing, emitting or disposing of Hazardous Materials; and (v) properly
close the facility with regard to Hazardous Materials including the removal or decontamination of
any process piping, mechanical ducting, storage tanks, containers, or trenches which have come into
contact with Hazardous Materials and obtain a closure certificate from the local administering
agency prior to the Expiration Date.

     B. Tenant’s Indemnity Regarding Hazardous Materials: Tenant shall, at its sole cost and
expense, comply with all laws pertaining to, and shall with counsel reasonably acceptable to
Landlord, indemnify, defend and hold harmless Landlord and Landlord’s trustees, shareholders,
directors, officers, employees, partners, affiliates, and agents from, any claims, liabilities,
costs or expenses incurred or suffered arising from the bringing, using, permitting, generating,
emitting or disposing of Hazardous Materials by Tenant, Tenant’s Agents or third party invitees
through the surface soils of the Premises during the Lease Term or the violation of any
Governmental Regulation or environmental law, by Tenant or Tenant’s Agents. Tenant’s
indemnification, defense, and hold harmless obligations include, without limitation, the following:
(i) claims, liability, costs or expenses resulting from or based upon administrative, judicial
(civil or criminal) or other action, legal or equitable, brought by any private or public person
under common law or under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 as amended (“CERCLA”), the Resource Conservation and Recovery Act of 1980 (“RCRA”) or any
other Federal, State, County or Municipal law, ordinance or regulation now or hereafter in effect;
(ii) claims, liabilities, costs or expenses pertaining to the identification, monitoring, cleanup,
containment, or removal of Hazardous Materials from soils, riverbeds or aquifers including the
provision of an alternative public drinking water source; (iii) all costs of defending such claims;
(iv) losses attributable to diminution in the value of the Premises or the Building; (v) loss or
restriction of use of rentable space in the Building; (vi) Adverse effect on the marketing of any
space in the Building; and (vi) all other liabilities, obligations, penalties, fines, claims,
actions (including remedial or enforcement actions of any kind and administrative or judicial
proceedings, orders or judgments), damages (including consequential and punitive damages), and
costs (including attorney, consultant, and expert fees and expenses) resulting from the release or
violation caused by Tenant or Tenant’s Agents. This Section 12.B shall survive the expiration or
termination of this Lease.

     C. Actual Release by Tenant: Tenant and Landlord agrees to notify each other of any known
lawsuits or orders which relate to the remedying of or actual release of Hazardous Materials on or
into the soils or ground water at or under the Premises.

Tenant shall also provide Landlord all notices required by Section 25359.7(b) of the Health and
Safety Code and all other notices required by law to be given to Landlord in connection with
Hazardous Materials. Without limiting the foregoing, Tenant shall also deliver to Landlord,

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within twenty (20) days after receipt thereof, any written notices from any governmental agency
alleging a material violation of, or material failure to comply with, any federal, state or local
laws, regulations, ordinances or orders, the violation of which or failure to comply with poses a
foreseeable and material risk of contamination of the ground water or injury to humans (other than
injury solely to Tenant or Tenant’s Agents).

In the event of any release on or into the Premises or into the soil or ground water under the
Premises, the Building or the Project of any Hazardous Materials caused by Tenant or Tenant’s
agents or third party invitees, Tenant agrees to comply, at its sole cost, with all laws,
regulations, ordinances and orders of any federal, state or local agency relating to the monitoring
or remediation of such Hazardous Materials. In the event of any such release of Hazardous
Materials Tenant shall immediately give verbal and follow-up written notice of the release to
Landlord, and Tenant agrees to meet and confer with Landlord and its Lender to attempt to eliminate
and mitigate any financial exposure to such Lender and resultant exposure to Landlord under
California Code of Civil Procedure Section 736(b) as a result of such release, and promptly to take
reasonable monitoring, cleanup and remedial steps given, inter alia, the historical uses to which
the Property has and continues to be used, the risks to public health posed by the release, the
then available technology and the costs of remediation, cleanup and monitoring, consistent with
acceptable customary practices for the type and severity of such contamination and all applicable
laws. Nothing in the preceding sentence shall eliminate, modify or reduce the obligation of Tenant
under 12.B of this Lease to indemnify, defend and hold Landlord harmless from any claims
liabilities, costs or expenses incurred or suffered by Landlord. Tenant shall provide Landlord
prompt written notice of Tenant’s monitoring, cleanup and remedial steps.

In the absence of an order of any federal, state or local governmental or quasi-governmental agency
relating to the cleanup, remediation or other response action required by applicable law, any
dispute arising between Landlord and Tenant concerning Tenant’s obligation to Landlord under this
Section 12.C concerning the level, method, and manner of cleanup, remediation or response action
required in connection with such a release of Hazardous Materials shall be resolved by mediation
and/or arbitration pursuant to this Lease.

     D. Environmental Monitoring: Landlord and its agents shall have the right to inspect,
investigate, sample and monitor the Premises including any air, soil, water, ground water or other
sampling or any other testing, digging, drilling or analysis to determine whether Tenant is
complying with the terms of this Section 12. If Landlord discovers that Tenant is not in
compliance with the terms of this Section 12, any such costs incurred by Landlord, including
attorneys’ and consultants’ fees, shall be due and payable by Tenant to Landlord within five (5)
days following Landlord’s written demand therefore.

13. TENANT’S DEFAULT: The occurrence of any of the following shall constitute a material default
and breach of this Lease by Tenant: (i) Tenant’s failure to pay the Base Monthly Rent including
additional rent or any other payment due under this Lease by the date such amount is due, where
such failure continues for three (3) business days after written notice from Landlord; (ii) the
abandonment of the Premises by Tenant; (iii) Tenant’s failure to observe and

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perform any other required provision of this Lease, where such failure continues for thirty (30)
days after written notice from Landlord, provided however that if the nature of the default is such
that it cannot reasonably be cured within the 30-day period, Tenant shall not be deemed in default
if it commences within such period to cure, and thereafter diligently prosecutes the same to
completion; (iv) Tenant’s making of any general assignment for the benefit of creditors; (v) the
filing by or against Tenant of a petition to have Tenant adjudged a bankrupt or of a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed after the filing); (vi) the appointment of a
trustee or receiver to take possession of substantially all of Tenant’s assets located at the
Premises or of Tenant’s interest in this Lease, where possession is not restored to Tenant within
thirty (30) days; or (vii) the attachment, execution or other judicial seizure of substantially all
of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where such
seizure is not discharged within thirty (30) days.

     A. Remedies: In the event of any such default by Tenant, then in addition to other remedies
available to Landlord at law or in equity, Landlord shall have the immediate option to terminate
this Lease and all rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event Landlord elects to so terminate this Lease, Landlord may recover from
Tenant all the following: (i) the worth at time of award of any unpaid rent which had been earned
at the time of such termination; (ii) the worth at time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of award exceeds the amount of
such rental loss for the same period that Tenant proves could have been reasonably avoided; (iii)
the worth at time of award of the amount by which the unpaid rent for the balance of the Lease Term
after the time of award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; (iv) 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 the following: (x)
expenses for repairing, altering or remodeling the Premises for purposes of reletting, (y) broker’s
fees, advertising costs or other expenses of reletting the Premises, and (z) costs of carrying the
Premises such as taxes, insurance premiums, utilities and security precautions; and (v) at
Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be
permitted by applicable California law. The term “rent”, as used herein, is defined as the minimum
monthly installments of Base Monthly Rent and all other sums required to be paid by Tenant pursuant
to this Lease, all such other sums being deemed as additional rent due hereunder. As used in (i)
and (ii) above, “worth at the time of award” shall be computed by allowing interest at a rate equal
to the discount rate of the Federal Reserve Bank of San Francisco plus five (5%) percent per annum.
As used in (iii) above, “worth at the time of award” shall be computed by discounting such amount
at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one
(1%) percent.

     B. Right to Re-enter: In the event of any such default by Tenant, Landlord shall have the
right, after terminating this Lease, to re-enter the Premises and remove all persons and property.
Such property may be removed and stored in a public warehouse or elsewhere at the cost of and for
the account of Tenant, and disposed of by Landlord in any manner permitted by law.

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     C. Abandonment: If Landlord does not elect to terminate this Lease as provided in Section 13.A
or 13.B above, then the provisions of California Civil Code Section 1951.4, (Landlord may continue
the lease in effect after Tenant’s breach and abandonment and recover rent as it becomes due if
Tenant has a right to sublet and assign, subject only to reasonable limitations) as amended from
time to time, shall apply and Landlord may from time to time, without terminating this Lease,
either recover all rental as it becomes due or relet the Premises or any part thereof for such term
or terms and at such rental or rentals and upon such other terms and conditions as Landlord in its
sole discretion may deem advisable, with the right to make alterations and repairs to the Premises.
In the event that Landlord elects to so relet, rentals received by Landlord from such reletting
shall be applied in the following order to: (i) the payment of any indebtedness other than Base
Monthly Rent due hereunder from Tenant to Landlord; (ii) the payment of any cost of such reletting;
(iii) the payment of the cost of any alterations and repairs to the Premises; and (iv) the payment
of Base Monthly Rent due and unpaid hereunder. The residual rentals, if any, shall be held by
Landlord and applied in payment of future Base Monthly Rent as the same may become due and payable
hereunder. Landlord shall the obligation to market the space but shall have no obligation to relet
the Premises following a default if Landlord has other comparable available space within the
Building or Project. In the event the portion of rentals received from such reletting which is
applied to the payment of rent hereunder during any month be less than the rent payable during that
month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord immediately upon
demand. Such deficiency shall be calculated and paid monthly. Tenant shall also pay to Landlord,
as soon as ascertained, any costs and expenses incurred by Landlord in such reletting or in making
such alterations and repairs not covered by the rentals received from such reletting.

     D. No Termination: Landlord’s re-entry or taking possession of the Premises pursuant to 13.B
or 13.C shall not be construed as an election to terminate this Lease unless written notice of such
intention is given to Tenant or unless the termination is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord because of any default
by Tenant, Landlord may at any time after such reletting elect to terminate this Lease for any such
default.

     E. Non-Waiver. The waiver by Landlord or Tenant of any breach of any term, covenant or
condition, herein contained shall not be deemed to be a waiver of such term, covenant or condition
or any subsequent breach of the same or any other term, covenant or condition herein contained.
Landlord may accept Tenant’s payments without waiving any rights under this Lease, including rights
under a previously served notice of default. No payment by Tenant or receipt by Landlord of a
lesser amount than any installment of rent due shall be deemed as other than payment on account of
the amount due. If Landlord accepts payments after serving a notice of default, Landlord may
nevertheless commence and pursue an action to enforce rights and remedies under the previously
served notice of default without giving Tenant any further notice or demand. Furthermore, the
Landlord’s acceptance of rent from the Tenant when the Tenant is holding over without express
written consent does not convert Tenant’s Tenancy from a tenancy at sufferance to a month to month
tenancy. No waiver of any provision of this Lease shall be implied by any failure of Landlord to
enforce any remedy for the violation of that provision, even if that violation continues or is
repeated. Any waiver by Landlord of any

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provision of this Lease must be in writing. Such waiver shall affect only the provision
specified and only for the time and in the manner stated in the writing. No delay or omission in
the exercise of any right or remedy by Landlord shall impair such right or remedy or be construed
as a waiver thereof by Landlord. No act or conduct of Landlord, including, without limitation, the
acceptance of keys to the Premises, shall constitute acceptance of the surrender of the Premises by
Tenant before the Expiration Date. Only written notice from Landlord to Tenant of acceptance shall
constitute such acceptance of surrender of the Premises. Landlord’s consent to or approval of any
act by Tenant which requires Landlord’s consent or approvals shall not be deemed to waive or render
unnecessary Landlord’s consent to or approval of any subsequent act by Tenant.

     F. Performance by Landlord: If Tenant fails to perform any obligation required under this
Lease or by law or governmental. regulation, Landlord in its sole discretion may, with thirty (30)
days’ written notice and without waiving any rights or remedies and without releasing Tenant from
its obligations hereunder, perform such obligation, in which event Tenant shall pay Landlord as
additional rent all sums paid by Landlord in connection with such substitute performance, including
interest at the Agreed Interest Rate (as defined in Section 19.J) within ten (10) days of
Landlord’s written notice for such payment.

     G. Habitual Default: The provisions of Section 13 notwithstanding, the Parties agree that if
Tenant shall have defaulted (beyond any applicable cure period) in the performance of any (but not
necessarily the same) term or condition of this Lease for four or more times during any twelve (12)
month period during the Lease Term, then such conduct shall, at the election of the Landlord,
represent a separate event of default which cannot be cured by Tenant. Tenant acknowledges that
the purpose of this provision is to prevent repetitive defaults by Tenant, which work a hardship
upon Landlord and deprive Landlord of Tenant’s timely performance under this Lease.

14. LANDLORD’S LIABILITY:

     A. Limitation on Landlord’s Liability: In the event of Landlord’s failure to perform any of
its covenants or agreements under this Lease, Tenant shall give Landlord written notice of such
failure and shall give Landlord thirty (30) days to cure or commence to cure such failure prior to
any claim for breach or resultant damages, provided, however, that if the nature of the default is
such that it cannot reasonably be cured within the 30-day period, Landlord shall not be deemed in
default if it commences within such period to cure, and thereafter diligently prosecutes the same
to completion. In addition, upon any such failure by Landlord, Tenant shall give notice by
registered or certified mail to any person or entity with a security interest in the Premises
(“Mortgagee”) that has provided Tenant with notice of ‘its interest in the Premises, and shall
provide Mortgagee a reasonable opportunity to cure such failure. Tenant agrees that each of the
Mortgagees to whom this Lease has been assigned is an expressed third-party beneficiary hereof.
Tenant waives any right under California Civil Code Section 1950.7 or any other present or future
law to the collection of any payment or deposit from Mortgagee or any purchaser at a foreclosure
sale of Mortgagee’s interest unless Mortgagee or such purchaser shall have actually received and
not refunded the applicable payment or deposit. Tenant Further waives any right to

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terminate this Lease and to vacate the Premises on Landlord’s default under this Lease.
Tenant’s sole remedy on Landlord’s default is an action for damages or injunctive or declaratory
relief.

     B. Limitation on Tenant’s Recourse: If Landlord is a corporation, trust, partnership, joint
venture, unincorporated association or other form of business entity, then (i) the obligations of
Landlord shall not constitute personal obligations of the officers, directors, trustees, partners,
joint venturers, members, owners, stockholders, or other principals or representatives except to
the extent of their interest in the Premises. Tenant shall have recourse only to the interest of
Landlord in the Premises or for the satisfaction of the obligations of Landlord and shall not have
recourse to any other assets of Landlord for the satisfaction of such obligations.

     C. Indemnification of Landlord: As a material part of the consideration rendered to Landlord,
Tenant hereby waives all claims against Landlord for damages to goods, wares and merchandise, and
all other personal property in, upon or about said Premises and for injuries to persons in or about
said Premises, from any cause arising at any time to the fullest extent permitted by law, and
Tenant shall indemnify, defend with counsel reasonably acceptable to Landlord and hold Landlord,
and their shareholders, directors, officers, trustees, employees, partners, affiliates and agents
from any claims, liabilities, costs or expenses incurred or suffered arising from the use of
occupancy of the Premises or any part of the Project by Tenant or Tenant’s Agents, the acts or
omissions of Tenant or Tenant’s Agents, Tenant’s breach of this Lease, or any damage or injury to
person or property from any cause, except to the extent caused by the willful misconduct or active
negligence of Landlord or from the failure of Tenant to keep the Premises in good condition and
repair as herein provided, except to the extent due to the gross negligence or willful misconduct
of Landlord. Further, in the event Landlord is made party to any litigation due to the acts or
omission of Tenant and Tenant’s Agents, Tenant will indemnify, defend (with counsel reasonably
acceptable to Landlord) and hold Landlord harmless from any such claim or liability including
Landlord’s costs and expenses and reasonable attorney’s fees incurred in defending such claims.

15. DESTRUCTION OF PREMISES:

     A. Landlord’s Obligation to Restore: In the event of a destruction of the Premises during the
Lease Term Landlord shall use due diligence to as promptly as practicable repair, at Landlord’s
cost (subject to Tenant reimbursement for applicable insurance deductibles to the extent Tenant is
responsible for such deductibles), the Premises to substantially the same condition to that which
existed prior to such destruction. Such destruction shall not annul or void this Lease; however,
Tenant shall be entitled to a proportionate reduction of Base Monthly Rent commencing from the date
of destruction, such proportionate reduction to be based upon the extent to which the repairs
interfere with Tenant’s business in the Premises, as reasonably determined by Landlord. In no
event shall Landlord be required to replace or restore Alterations, Tenant Improvements paid for by
Tenant from sources other than the Work Allowance or Tenant’s fixtures or personal property. With
respect to a destruction which Landlord is obligated to repair or may elect to repair under the
terms of this Section, Tenant waives the provisions of Section 1932, and Section 1933, Subdivision
4, of the Civil Code of the State of California, and

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any other similarly enacted statute, and the provisions of this Section 15 shall govern in the
case of such destruction.

     B. Limitations on Landlord’s Restoration Obligation: Notwithstanding the provisions of Section
15.A, Landlord shall have no obligation to repair, or restore the Premises if any of the following
occur: (i) if the repairs cannot be made in one (1) year from the date of receipt of all
governmental approvals necessary under the laws and regulations of State, Federal, County or
Municipal authorities, as reasonably determined by Landlord, (ii) if the holder of the first deed
of trust or mortgage encumbering the Building elects not to permit the insurance proceeds payable
upon damage or destruction to be used for such repair or restoration, (iii) the damage or
destruction is not fully covered by the insurance maintained by Landlord (excluding deductible
amounts) and any amounts Tenant elects, in its sole discretion, to pay towards the cost of repair
or restoration, (iv) the damage or destruction occurs in the last six (6) months of the Lease Term
(unless Tenant elects to exercise any available option to extend the Lease Term, (v) Tenant is in
default pursuant to the provisions of Section 13, or (vi) Tenant has vacated the Premises for more
than ninety (90) days. In any such event Landlord may elect either to (i) complete the repair or
restoration, or (ii) terminate this Lease by providing Tenant written notice of its election within
sixty (60) days following the damage or destruction. If (i) the repairs cannot be made within one
(1) year from the date of the damage or destruction or (ii) the damage or destruction occurs in the
last six (6) months of the Lease Term, Tenant may elect to terminate this Lease by providing
Landlord written notice of its election within sixty (60) days following the date of the damage or
destruction.

16. CONDEMNATION:

     If any part of the Premises shall be taken for any public or quasi-public use, under any
statute or by right of eminent domain or private purchase in lieu thereof, and only a part thereof
remains which is susceptible of occupation hereunder, this Lease shall, as to the part so taken,
terminate as of the day before title vests in the condemnor or purchaser (“Vesting Date”) and Base
Monthly Rent payable hereunder shall be adjusted so that Tenant is required to pay for the
remainder of the Lease Term only such portion of Base Monthly Rent as the value of the part
remaining after such taking bears to the value of the entire Premises prior to such taking. If all
of the Premises or such part thereof be taken so that there does not remain a portion susceptible
for occupation hereunder, this Lease shall terminate on the Vesting Date. If part or all of the
Premises be taken, all compensation awarded upon such taking shall go to Landlord, and Tenant shall
have no claim thereto; except Landlord shall cooperate with Tenant, without cost to Landlord, to
recover compensation for damage to or taking of any Alterations, Tenant Improvements paid for by
Tenant from sources other than the Work Allowance, or for Tenant’s moving costs. Tenant hereby
waives the provisions of California Code of Civil Procedures Section 1265.130 and any other
similarly enacted statue, and the provisions of this Section 16 shall govern in the case of a
taking. Notwithstanding anything to the contrary in this Lease, if as a result of any taking or
sale in lieu thereof under this Section 16, the Premises are no longer reasonably suitable for
Tenant’s intended use, Tenant, upon written notice to Landlord, shall be entitled to terminate this
Lease as of the Vesting Date.

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17. ASSIGNMENT OR SUBLEASE:

     A. Consent by Landlord: Except as specifically provided in this Section 17.E, Tenant may not
assign, sublet, hypothecate, or allow a third party to use the Premises without the express written
consent of Landlord. In the event Tenant desires to assign this Lease or any interest herein or
sublet the Premises or any part thereof, Tenant shall deliver to Landlord (i) the proposed
agreements and all ancillary agreements with the proposed assignee/subtenant, (ii) current
financial statements of the transferee covering the preceding three years (if available), (iii) the
nature of the proposed transferee’s business to be carried on in the Premises, (iv) a statement
outlining all consideration to be given on account of the Transfer, and (v) a current financial
statement of Tenant. Landlord may condition its approval of any Transfer on receipt of a
certification from both Tenant and the proposed transferee of all consideration to be paid to
Tenant in connection with such Transfer. At Landlord’s request, Tenant shall also provide
additional information reasonably required by Landlord to determine whether it will consent to the
proposed assignment or sublease. Landlord shall have a ten (10) business day period following
receipt of all the foregoing within which to notify Tenant in writing that Landlord elects to: (1)
terminate this Lease in the event the proposed sublease or assignment is for more than three (3)
full floors within the Premises; (ii) permit Tenant to assign or sublet such space to the named
assignee/subtenant on the terms and conditions set forth in the notice; or (iii) refuse consent.
If Landlord should fail to notify Tenant in writing of such election within the 10 business-day
period, Landlord shall be deemed to have elected option (iii) above. In the event Landlord elects
option (i) above, Landlord shall reimburse Tenant for any unamortized Tenant Improvement costs paid
by Tenant and this Lease shall expire with respect to such part of the Premises on the date upon
which the proposed sublease or transfer was to commence, and from such date forward, Base Monthly
Rent and Tenant’s Allocable Share of all other costs and charges shall be adjusted based upon the
proportion that the rentable area of the Premises remaining bears to the total rentable area of the
Building. In the event Landlord elects option (ii) above, Landlord’s written consent to the
proposed assignment or sublease shall not be unreasonably withheld, provided and upon the condition
that: (i) the proposed assignee or subtenant is engaged in a business that is limited to the use
expressly permitted under this Lease; (ii) the proposed assignee or subtenant is a company with
sufficient financial worth and management ability to undertake the financial obligation of this
Lease and Landlord has been furnished with reasonable proof thereof; (iii) the proposed assignment
or sublease is in form reasonably satisfactory to Landlord; (iv) Tenant reimburses Landlord on
demand for any reasonable costs that may be incurred by Landlord in connection with said assignment
or sublease, including the costs of making investigations as to the acceptability of the proposed
assignee or subtenant, and legal costs not to exceed $2,000.00 incurred in connection with the
granting of any requested consent; and (v) Tenant shall not have advertised or publicized in any
way the availability of the Premises without prior notice to Landlord. In the event all or any one
of the foregoing conditions are not satisfied, Landlord shall be considered to have acted
reasonably if it withholds its consent. Notwithstanding the foregoing, Landlord agrees that it
will not exercise its right to terminate this Lease for either: (i) an assignment or sublease
during the first thirty six (36) months of the Lease Term; or (ii) any assignment or sublease
affecting less than three (3) full floors of the Premises.

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     B. Assignment or Subletting Consideration: Beginning thirty six (36) months after the
Commencement Date, any rent or other economic consideration realized by Tenant under any sublease
and assignment, in excess of the Base Monthly Rent payable hereunder and reasonable subletting and
assignment costs (including but not limited to legal fees, real estate commissions, advertising
fees, and unamortized Tenant Improvements paid for by Tenant, provided further that such Tenant
Improvements have value to the incoming subtenant), shall be divided and paid fifty percent (50%)
to Landlord and fifty percent (50%) to Tenant. Tenant’s obligation to pay over Landlord’s portion
of the consideration constitutes an obligation for additional rent hereunder. The above provisions
relating to Landlord’s right to terminate the Lease and relating to the allocation of excess rent
are independently negotiated terms of the Lease which constitute a material inducement for the
Landlord to enter into the Lease, and are agreed by the Parties to be commercially reasonable. No
assignment or subletting by Tenant shall relieve it of any obligation under this Lease. Any
assignment or subletting which conflicts with the provisions hereof shall be void.

     C. No Release: Any assignment or sublease 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, whereby the assignee or subtenant shall assume all
the obligations of this Lease on the part of Tenant to be performed or observed under the sublease
and shall be subject to all the covenants, agreements, terms, provisions and conditions in this
Lease. Notwithstanding any such sublease or assignment and the acceptance of rent by Landlord from
any subtenant or assignee, Tenant and any guarantor shall remain fully liable for the payment of
Base Monthly Rent and additional rent due, and to become due hereunder, 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 for all acts and omissions of any licensee, subtenant, assignee or any
other person claiming under or through any subtenant or assignee that shall be in violation of any
of the terms and conditions of this Lease, and any such violation shall be deemed a violation by
Tenant. Tenant shall indemnify, defend and hold Landlord harmless from and against all losses,
liabilities, damages, costs and expenses (including reasonable attorney fees) resulting from any
claims that may be made against Landlord by the proposed assignee or subtenant or by any real
estate brokers or other persons claiming compensation in connection with the proposed assignment or
sublease.

     D. Reorganization of Tenant: The provisions of this Section 17.D shall apply if Tenant is a
corporation and: (i) there is a dissolution, merger, consolidation, or other reorganization of or
affecting Tenant, where Tenant is not the surviving corporation, or (ii) there is a sale or
transfer to one person or entity (or to any group of related persons or entities) of stock
possessing more than 50% of the total combined voting power of all classes of Tenant’s capital
stock issued, outstanding and entitled to vote for the election of directors, and after such sale
or transfer of stock Tenant’s stock is no longer publicly traded. In a transaction under clause
(i) the surviving corporation shall promptly execute and deliver to Landlord an agreement in form
reasonably satisfactory to Landlord under which such surviving corporation assumes the obligations
of Tenant hereunder, and in a transaction under clause (ii) the transferee or buyer shall promptly
execute and deliver to Landlord an agreement in form reasonably satisfactory to

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Landlord under which such transferee or buyer assumes the obligations of Tenant under the
Lease.

     E. Permitted Transfers: Notwithstanding anything contained in this Section 17, so long as
Tenant otherwise complies with the provisions of this Article, Tenant may enter into any of the
following transfers (a “Permitted Transfer”) without Landlord’s prior consent, and Landlord shall
not be entitled to terminate the Lease or to receive any part of any subrent resulting therefrom
that would otherwise be due pursuant to Sections 17.A and 17.B. Tenant may sublease all or part of
the Premises or assign its interest in this Lease to (i) any corporation which controls, is
controlled by, or is under common control with the original Tenant to this Lease by means of an
ownership interest of more than 50%; (ii) a corporation which results from a merger, consolidation
or other reorganization in which Tenant is not the surviving corporation, so long as the surviving
corporation has a net worth at the time of such assignment that is equal to or greater than the net
worth of Tenant immediately prior to such transaction; and (iii) a corporation which purchases or
otherwise acquires all or substantially all of the assets of Tenant so long as such acquiring
corporation has a net worth at the time of such assignment that is equal to or greater than the net
worth of Tenant immediately prior to such transaction.

     F. Effect of Default: In the event of Tenant’s default beyond any applicable cure period,
Tenant hereby assigns all rents due from any assignment or subletting to Landlord as security for
performance of its obligations under this Lease, and Landlord may collect such rents as Tenant’s
Attorney-in-Fact, except that Tenant may collect such rents unless a default occurs as described in
Section 13 above. A termination if the Lease due to Tenant’s default shall not automatically
terminate an assignment or sublease then in existence; rather at Landlord’s election, such
assignment or sublease shall survive the Lease termination, the assignee or subtenant shall attorn
to Landlord, and Landlord shall undertake the obligations of Tenant under the sublease or
assignment; except that Landlord shall not be liable for prepaid rent, security deposits or other
defaults of Tenant to the subtenant or assignee, or for any acts or omissions of Tenant and
Tenant’s Agents.

     G. Conveyance by Landlord: As used in this Lease, the term “Landlord” is defined only as the
owner for the time being of the Premises, so that in the event of any sale or other conveyance of
the Premises or in the event of a master lease of the Premises, Landlord shall be entirely freed
and relieved of all its covenants and obligations hereunder, and it shall be deemed and construed,
without further agreement between the Parties and the purchaser at any such sale or the master
tenant of the Premises, that the purchaser or master tenant of the Premises has assumed and agreed
to carry out any and all covenants and obligations of Landlord hereunder. Such transferor shall
transfer and deliver Tenant’s security deposit to the purchaser at any such sale or the master
tenant of the Premises, and thereupon the transferor shall be discharged from any further liability
in reference thereto.

     H. Successors and Assigns: Subject to the provisions this Section 17, the covenants and
conditions of this Lease shall apply to and bind the heirs, successors, executors, administrators
and assigns of all Parties hereto; and all Parties hereto comprising Tenant shall be jointly and
severally liable hereunder.

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18. OPTION TO EXTEND THE LEASE TERM:

     A. Grant and Exercise of Option: Landlord grants to Tenant, subject to the terms and
conditions set forth in this Section 18.A, one (1) option (the “Option”) to extend the Lease Term
for an additional term (the “Option Term”). The Option Term shall be for a period of sixty (60)
months and shall be exercised, if at all, by written notice to Landlord no earlier than twelve (12)
months prior to the date the Lease Term would expire but for such exercise but no later than nine
(9) months prior to the date the Lease Term would expire but for such exercise, time being of the
essence for the giving of such notice. If Tenant exercises the Option, all of the terms, covenants
and conditions of this Lease shall apply except for the grant of additional Options pursuant to
this Section, provided that Base Monthly Rent for the Premises payable by Tenant during the Option
Term shall be the greater of (i) the average amount of Base Monthly Rent paid during the initial
Lease Term (“Floor Rent”), and (ii) the Fair Market Rental as hereinafter defined. Notwithstanding
anything herein to the contrary, if Tenant is in monetary or material non-monetary default under
any of the terms, covenants or conditions of this Lease beyond applicable cure periods either at
the time Tenant exercises the Option or at any time thereafter prior to the commencement date of
the Option Term, Landlord shall have, in addition to all of Landlord’s other rights and remedies
provided in this Lease, the right to terminate the Option upon notice to Tenant, in which event the
Lease Term shall not be extended pursuant to this Section 18.A. As used herein, the term “Fair
Market Rental” is defined as the rental and all other monetary payments, including any escalations
and adjustments thereto (including without limitation Consumer Price Indexing) that Landlord could
obtain during the Option Term from a third party desiring to lease the Premises, based upon the
current use and other potential uses of the Premises, as determined by the rents then being
obtained for new leases of space comparable in age and quality to the Premises in the same real
estate submarket as the Building. Fair Market Rental shall further take into account that (i)
Tenant is in occupancy and making functional use of the Premises in its then existing condition,
and (ii) no additional work allowance, tenant improvement investment, or leasing commission shall
be required by Landlord.

     B. Determination of Fair Market Rental: If Tenant exercises the Option, Landlord shall send
Tenant a notice setting forth the Fair Market Rental for the Option Term within thirty (30) days
following the Exercise Date. If Tenant disputes Landlord’s determination of Fair Market Rental for
the Option Term, Tenant shall, within thirty (30) days after the date of Landlord’s notice setting
forth Fair Market Rental for the Option Term, send to Landlord a notice stating that Tenant either
elects to terminate its exercise of the Option, in which event the Option shall lapse and this
Lease shall terminate on the Expiration Date, or that Tenant disagrees with Landlord’s
determination of Fair Market Rental for the Option Term and elects to resolve the disagreement as
provided in Section 18.C below. If Tenant does not send Landlord a notice as provided in the
previous sentence, Landlord’s determination of Fair Market Rental shall be the Base Monthly Rent
payable by Tenant during the Option Term. If Tenant elects to resolve the disagreement as provided
in Section 18.C and such procedures are not concluded prior to the commencement date of the Option
Term, Tenant shall pay to Landlord as Base Monthly Rent the Fair Market Rental as determined by
Landlord in the manner provided above. If the Fair Market Rental as finally determined pursuant to
Section 18.C is greater than Landlord’s determination, Tenant shall pay Landlord the difference
between the amount paid by Tenant and the Fair

29

 

Market Rental as so determined in Section 18.C within thirty (30) days after such
determination. If the Fair Market Rental as finally determined in Section 18.C is less than
Landlord’s determination, the difference between the amount paid by Tenant and the Fair Market
Rental as so determined in Section 18.C shall be credited against the next installments of Base
Monthly Rent due from Tenant to Landlord hereunder.

     C. Resolution of a Disagreement over the Fair Market Rental: Any disagreement regarding Fair
Market Rental shall be resolved as follows:

     1. Within thirty (30) days after Tenant’s response to Landlord’s notice setting forth the Fair
Market Rental, Landlord and Tenant shall meet at a mutually agreeable time and place, in an attempt
to resolve the disagreement.

     2. If within the 30-day period referred to above, Landlord and Tenant cannot reach agreement
as to Fair Market Rental, each party shall select one appraiser to determine Fair Market Rental.
Each such appraiser shall arrive at a determination of Fair Market Rental and submit their
conclusions to Landlord and Tenant within thirty (30) days after the expiration of the 30-day
consultation period described above.

     3. If only one appraisal is submitted within the requisite time period, it shall be deemed as
Fair Market Rental. If both appraisals are submitted within such time period and the two
appraisals so submitted differ by less than ten percent (10%), the average of the two shall be
deemed as Fair Market Rental. If the two appraisals differ by more than 10%, the appraisers shall
immediately select a third appraiser who shall, within thirty (30) days after his selection, make
and submit to Landlord and Tenant a determination of Fair Market Rental. This third appraisal will
then be averaged with the closer of the two previous appraisals and the result shall be Fair Market
Rental.

     4. All appraisers specified pursuant to this Section shall be members of the American
Institute of Real Estate Appraisers with not less than ten (10) years experience appraising office
and industrial properties in the Santa Clara Valley. Each party shall pay the cost of the
appraiser selected by such party and one-half of the cost of the third appraiser.

     D. Personal to Tenant: All Options provided to Tenant in this Lease are personal and granted
to Brio Technology, Inc. (and any transferee under a Permitted Transfer) and are not exercisable by
any third party should Tenant assign or sublet all or a portion of its rights under this Lease,
unless Landlord consents to permit exercise of any option by any assignee or subtenant, in
Landlord’s sole and absolute discretion. In the event Tenant has multiple options to extend this
Lease, a later option to extend the Lease cannot be exercised unless the prior option has been
properly exercised.

     E. Right to Rescind: If the determination of Fair Market Rental pursuant to the foregoing
provision results in a Fair Market Rental which is in excess of the Floor Rent, Tenant shall be
entitled to rescind its exercise of the Option within ten (10) days after the date on which Tenant
is notified of the determination of Fair Market Rental, in which event the Lease Term

30

 

shall be extended from the date on which the Lease would have expired if the Option were never
exercised plus an additional period of three (3) months at a rate equal to 110% of the rent payable
during the last month of the original Lease Term.

19. RIGHT OF FIRST OFFERING TO LEASE:

     A. Grant: Landlord hereby grants Tenant a right of first offering to lease the 4988 Building.
Prior to Landlord offering to lease the 4988 Building to a third party (other than the third
parties with existing rights as of the Effective Date), Landlord shall give Tenant written notice
of such desire and the terms and other information under which Landlord intends to lease the 4988
Building. Provided at the time of exercise, (i) Tenant is not in default beyond any applicable
cure period, and (ii) Tenant’s then current net worth (as evidenced by its most recent financial
statements) is at least equal to its net worth at the time of execution of this Lease, Tenant shall
have the option, which must be exercised, if at all, by written notice to Landlord within seven (7)
business days after Tenant’s receipt of Landlord’s notice, to lease the 4988 Building at the rent
and terms of lease specified in the notice. In the event Tenant timely exercises such option to
lease the 4988 Building, Landlord shall lease the 4988 Building to Tenant, and Tenant shall lease
the 4988 Building from Landlord in accordance with the rent and terms specified in Landlord’s
notice. Landlord and Tenant shall, in good faith, attempt to reach agreement on the terms of a
mutually acceptable lease agreement consistent with the terms set forth in Landlord’s notice within
thirty (30) days of Landlord’s notice. In the event (i) Landlord and Tenant are unable to reach
agreement on a mutually acceptable lease within such thirty (30) day period or (ii) Tenant fails to
exercise Tenant’s option within said ten (10) day period, Landlord shall have one hundred eighty
(180) days thereafter to lease the 4988 Building at no less than ninety percent (90%) of the rental
rate and upon the same or substantially the same other terms of lease as specified in the notice to
Tenant. In the event Landlord fails to lease the 4988 Building within said one hundred eighty
(180) day period or in the event Landlord proposes to lease the 4988 Building at less than ninety
percent (90%) of the rental rate or on other material terms which are more favorable to the
prospective tenant than that proposed to Tenant, Landlord shall be required to resubmit such offer
to Tenant in accordance with this Right of First Offering.

     B. Exclusions: Notwithstanding the foregoing, this Right of First Offering shall automatically
terminate, (i) upon the expiration or sooner termination of the Lease, or (ii) in the event that
Landlord transfers its interest in the Premises or in the 4988 Building, unless such transfer by
Landlord is to a related entity.

20. GENERAL PROVISIONS:

     A. Attorney’s Fees: In the event a suit or alternative form of dispute resolution is brought
for the possession of the Premises, for the recovery of any sum due hereunder, to interpret the
Lease, or because of the breach of any other covenant herein; then the losing party shall pay to
the prevailing party reasonable attorney’s fees including the expense of expert witnesses,
depositions and court testimony as part of its costs which shall be deemed to have accrued on the
commencement of such action. The prevailing party shall also be entitled to

31

 

recover all costs and expenses including reasonable attorney’s fees incurred in enforcing any
judgment or award against the other party. The foregoing provision relating to post judgment costs
is severable from all other provisions of this Lease.

     B. Authority of Parties: Tenant represents and warrants that it is duly formed and in good
standing, and is duly authorized to execute and deliver this Lease on behalf of said corporation,
in accordance with a duly adopted resolution of the Board of Directors of said corporation or in
accordance with the by-laws of said corporation, and that this Lease is binding upon said
corporation in accordance with its terms. At Landlord’s request, Tenant shall provide Landlord
with corporate resolutions or other proof in a form acceptable to Landlord, authorizing the
execution of the Lease.

     C. Brokers: Tenant and Landlord represent it has not utilized or contacted a real estate
broker or finder with respect to this Lease other than CB Richard Ellis, Inc. and Tenant and
Landlord agree to indemnify, defend and hold each other harmless against any claim, cost, liability
or cause of action asserted by any other broker or finder claiming through the indemnifying party.

     D. Choice of Law: This Lease shall be governed by and construed in accordance with California
law. Except as provided in Section 19.E, venue shall be Santa Clara County.

     E. Dispute Resolution: Landlord and Tenant and any other party that may become a party to this
Lease or be deemed a party to this Lease including any subtenants agree that, except for any claim
by Landlord for unlawful detainer or any claim within the jurisdiction of the small claims court
(which small claims court shall be the sole court of competent jurisdiction), any controversy,
dispute, or claim of whatever nature arising out of, in connection with or in relation to the
interpretation, performance or breach of this Lease, including any claim based on contract, tort,
or statute, shall be resolved at the request of any party to this agreement through a two-step
dispute resolution process administered by J.A.M.S. or another judicial mediation service mutually
acceptable to the parties located in Santa Clara County, California. The dispute resolution
process shall involve first, mediation, followed, if necessary, by final and binding arbitration
administered by and in accordance with the then existing rules and practices of J.A.M.S. or other
judicial mediation service selected. In the event of any dispute subject to this provision, either
party may initiate a request for mediation and the parties shall use reasonable efforts to promptly
select a J.A.M.S. mediator and commence the mediation. In the event the parties are not able to
agree on a mediator within thirty (30) days, J.A.M.S. or another judicial mediation service
mutually acceptable to the parties shall appoint a mediator. The mediation shall be confidential
and in accordance with California Evidence Code § 1119 et. seq. The mediation shall be held in
Santa Clara County, California and in accordance with the existing rules and practice of J.A.M.S.
(or other judicial and mediation service selected). The parties shall use reasonable efforts to
conclude the mediation within sixty (60) days of the date of either party’s request for mediation.
The mediation shall be held prior to any arbitration or court action (other than a claim by
Landlord for unlawful detainer or any claim within the jurisdiction of the small claims court which
are not subject to this mediation/arbitration provision and may be filed directly with a court of
competent jurisdiction). Should the prevailing party in any dispute

32

 

subject to this Section 19.E attempt an arbitration or a court action before attempting to
mediate, the prevailing party shall not be entitled to attorney’s fees that might otherwise be
available to them in a court action or arbitration and in addition thereto, the party who is
determined by the arbitrator to have resisted mediation, shall be sanctioned by the arbitrator or
judge.

IF A MEDIATION IS CONDUCTED BUT IS UNSUCCESSFUL, IT SHALL BE FOLLOWED BY FINAL AND BINDING
ARBITRATION ADMINISTERED BY AND IN ACCORDANCE WITH THE THEN EXISTING RULES AND PRACTICES OF
J.A.M.S. OR THE OTHER JUDICIAL AND MEDIATION SERVICE SELECTED, AND JUDGMENT UPON ANY AWARD RENDERED
BY THE ARBITRATOR(S) MAY BE ENTERED BY ANY STATE OR FEDERAL COURT HAVING JURISDICTION THEREOF AS
PROVIDED BY CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280 ET. SEQ AS SAID STATUTES THEN APPEAR,
INCLUDING ANY AMENDMENTS TO SAID STATUTES OR SUCCESSORS TO SAID STATUTES OR AMENDED STATUTES,
EXCEPT THAT IN NO EVENT SHALL THE PARTIES BE ENTITLED TO PROPOUND INTERROGATORIES OR REQUEST FOR
ADMISSIONS DURING THE ARBITRATION PROCESS. THE ARBITRATOR SHALL BE A RETIRED JUDGE OR A LICENSED
CALIFORNIA ATTORNEY. THE VENUE FOR ANY SUCH ARBITRATION OR MEDIATION SHALL BE IN SANTA CLARA
COUNTY, CALIFORNIA.

NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE
MATTERS INCLUDED IN THE “MEDIATION AND ARBITRATION OF DISPUTES” PROVISION DECIDED BY NEUTRAL
ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO
HAVE THE DISPUTE LITIGATED IN A COURT OR FURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE
GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE “MEDIATION AND ARBITRATION OF DISPUTES” PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY
OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS
INCLUDED IN THE “MEDIATION AND ARBITRATION OF DISPUTES” PROVISION TO NEUTRAL ARBITRATION.

	 	 	 	 	 	 	 
	LANDLORD:

	 	     /s/ JMS
	 	TENANT:	 	     /s/ KJW

     F. Entire Agreement: This Lease and the exhibits attached hereto contains all of the
agreements and conditions made between the Parties hereto and may not be modified orally or in any
other manner other than by written agreement signed by all parties hereto or their respective
successors in interest. This Lease supersedes and revokes all previous negotiations, letters of
intent, lease proposals, brochures, agreements, representations, promises, warranties, and
understandings, whether oral or in writing, between the parties or their respective representatives
or any other person purporting to represent Landlord or Tenant.

33

 

     G. Entry by Landlord: Upon prior notice to Tenant and subject to Tenant’s reasonable security
regulations, Tenant shall permit Landlord and his agents to enter into and upon the Premises at all
reasonable times, and without any rent abatement or reduction or any liability to Tenant for any
loss of occupation or quiet enjoyment of the Premises thereby occasioned, for the following
purposes: (i) inspecting and maintaining the Premises; (ii) making repairs, alterations or
additions to the Premises; (iii) erecting additional building(s) and improvements on the land where
the Premises are situated or on adjacent land owned by Landlord; (iv) performing any obligations of
Landlord under the Lease including remediation of Hazardous Materials if determined to be the
responsibility of Landlord, (v) posting and keeping posted thereon notices of non-responsibility
for any construction, alteration or repair thereof, as required or permitted by any law, and (vi)
showing the Premises to Landlord’s or the Master Landlord’s existing or potential successors,
purchaser, and lenders. Tenant shall permit Landlord and his agents, at any time within two
hundred seventy (270) days prior to the Expiration Date (or at any time during the Lease if Tenant
is in default hereunder beyond any applicable cure period), to place upon the Premises “For Lease”
signs and exhibit the Premises to real estate brokers and prospective tenants at reasonable hours.
The foregoing notwithstanding, Landlord and its agents: (i) shall not enter the Premises without
first giving twenty-four (24) hours notice to Tenant of such entry except in the case of emergency,
(ii) shall be accompanied by an employee of Tenant at all times while in the Premises, (iii) shall
comply with Tenant’s security procedures applicable to the Premises, and (iv) shall not
unreasonably interfere with Tenant’s use of the Premises.

     H. Estoppel Certificates: At any time during the Lease Term, Tenant shall, within ten (10)
business days following written notice from Landlord, execute and deliver to Landlord a written
statement certifying, if true, the following: (i) that this Lease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification); (ii) the date to which rent
and other charges are paid in advance, if any; (iii) acknowledging that there are not, to Tenant’s
knowledge, any uncured defaults on Landlord’s part hereunder (or specifying such defaults if they
are claimed); and (iv) such other information as Landlord may reasonably request. Any such
statement may be conclusively relied upon by any prospective purchaser or encumbrancer of
Landlord’s interest in the Premises. Tenant’s failure to deliver such statement within such time
shall be conclusive upon the Tenant that this Lease is in full force and effect without
modification, except as may be represented by Landlord, and that there are no uncured defaults in
Landlord’s performance. If Tenant is not a public company, Tenant agrees to provide, within five
(5) days of Landlord’s request, Tenant’s most recent three (3) years of audited financial
statements for Landlord’s use in financing or sale of the Premises or Landlord’s interest therein.

     I. Exhibits: All exhibits referred to are attached to this Lease and incorporated by
reference.

     J. Interest: All rent due hereunder, if not paid when due, shall bear interest at the rate of
the Reference Rate published by Bank of America, San Francisco Branch, plus two percent (2%) per
annum from that date until paid in full (“Agreed Interest Rate”). This provision shall survive the
expiration or sooner termination of the Lease. Despite any other provision of

34

 

this Lease, the total liability for interest payments shall not exceed the limits, if any,
imposed by the usury laws of the State of California. Any interest paid in excess of those limits
shall be refunded to Tenant by application of the amount of excess interest paid against any sums
outstanding in any order that Landlord requires. If the amount of excess interest paid exceeds the
sums outstanding, the portion exceeding those sums shall be refunded in cash to Tenant by Landlord.
To ascertain whether any interest payable exceeds the limits imposed, any non-principal payment
(including late charges) shall be considered to the extent permitted by law to be an expense or a
fee, premium, or penalty rather than interest.

     K. Modifications Required by Lender: If any lender of Landlord or ground lessor of the
Premises requires a modification of this Lease that will not increase Tenant’s cost or expense or
materially or adversely change Tenant’s rights and obligations, this Lease shall be so modified and
Tenant shall execute whatever documents are required and deliver them to Landlord within ten (10)
days after the request.

     L. No Presumption Against Drafter. Landlord and Tenant understand, agree and acknowledge that
this Lease has been freely negotiated by both Parties; and that in any controversy, dispute, or
contest over the meaning, interpretation, validity, or enforceability of this Lease or any of its
terms or conditions, there shall be no inference, presumption, or conclusion drawn whatsoever
against either party by virtue of that party having drafted this Lease or any portion thereof.

     M. Notices: All notices, demands, requests, or consents required to be given under this Lease
shall be sent in writing by U.S. certified mail, return receipt requested, nationally recognized
overnight carrier, or by personal delivery addressed to the party to be notified at the address for
such party specified in Section 1 of this Lease, or to such other place as the party to be notified
may from time to time designate by at least fifteen (15) days prior notice to the notifying party.
When this Lease requires service of a notice, that notice shall replace rather than supplement any
equivalent or similar statutory notice, including any notices required by Code of Civil Procedure
Section 1161 or any similar or successor statute. When a statute requires service of a notice in a
particular manner, service of that notice (or a similar notice required by this Lease) shall
replace and satisfy the statutory service-of-notice procedures, including those required by Code of
Civil Procedure Section 1162 or any similar or successor statute.

     N. Asset Management: In addition, Tenant agrees to pay Landlord along with the expenses to be
reimbursed by Tenant a monthly fee for asset management services rendered by either Landlord or a
third party manager engaged by Landlord (which may be a party affiliated with Landlord), in the
amount of one and 50/100 percent (1.5%) of the Base Monthly Rent.

     O. Rent: All monetary sums due from Tenant to Landlord under this Lease, including, without
limitation those referred to as “additional rent”, shall be deemed as rent.

     P. Representations. Tenant acknowledges that neither Landlord nor any of its employees or
agents have made any agreements, representations, warranties or promises with respect to the
Premises or with respect to present or future rents, expenses, operations, tenancies

35

 

or any other matter. Except as herein expressly set forth herein, Tenant relied on no
statement of Landlord or its employees or agents for that purpose.

     Q. Rights and Remedies: Subject to Section 14 above, All rights and remedies hereunder are
cumulative and not alternative to the extent permitted by law, and are in addition to all other
rights and remedies in law and in equity.

     R. Severability: If any term or provision of this Lease is held unenforceable or invalid by a
court of competent jurisdiction, the remainder of the Lease shall not be invalidated thereby but
shall be enforceable in accordance with its terms, omitting the invalid or unenforceable term.

     S. Submission of Lease: Submission of this document for examination or signature by the
parties does not constitute an option or offer to lease the Premises on the terms in this document
or a reservation of the Premises in favor of Tenant. This document is not effective as a lease or
otherwise until executed and delivered by both Landlord and Tenant.

     T. Subordination: This Lease is subject and subordinate to ground and underlying leases,
mortgages and deeds of trust (collectively “Encumbrances”) which may now affect the Premises, to
any covenants, conditions or restrictions of record, and to all renewals, modifications,
consolidations, replacements and extensions thereof; provided, however, if the holder or holders of
any such Encumbrance (“Holder”) require that this Lease be prior and superior thereto, within seven
(7) days after written request of Landlord to Tenant, Tenant shall execute, have acknowledged and
deliver all documents or instruments, in the form presented to Tenant, which Landlord or Holder
deems necessary or desirable for such purposes. Landlord shall have the right to cause this Lease
to be and become and remain subject and subordinate to any and all Encumbrances which are now or
may hereafter be executed covering the Premises or any renewals, modifications, consolidations,
replacements or extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances, together with interest
thereon and subject to all the terms and provisions thereof; provided only, that in the event of
termination of any such lease or upon the foreclosure of any such mortgage or deed of trust, Holder
agrees to recognize Tenant’s rights under this Lease as long as Tenant is not then in default and
continues to pay Base Monthly Rent and additional rent and observes and performs all required
provisions of this Lease. Within ten (10) days after Landlord’s written request, Tenant shall
execute any documents required by Landlord or the Holder to make this Lease subordinate to any lien
of the Encumbrance. If Tenant fails to do so, then in addition to such failure constituting a
default by Tenant, it shall be deemed that this Lease is so subordinated to such Encumbrance.
Notwithstanding anything to the contrary in this Section, Tenant hereby attorns and agrees to
attorn to any entity purchasing or otherwise acquiring the Premises at any sale or other proceeding
or pursuant to the exercise of any other rights, powers or remedies under such encumbrance.

     U. Survival of Indemnities: All indemnification, defense, and hold harmless obligations of
Landlord and Tenant under this Lease shall survive the expiration or sooner termination of the
Lease.

36

 

     V. Time: Time is of the essence hereunder.

     W. Transportation Demand Management Programs: Should a government agency or municipality
require Landlord to institute TDM (Transportation Demand Management) facilities and/or programs,
Tenant agrees that the cost of TDM imposed facilities and programs required on the Premises,
including but not limited to employee showers, lockers, cafeteria, or lunchroorn facilities, shall
be paid by Tenant. Further, any ongoing costs or expenses associated with a TDM program which are
required for the Premises and not provided by Tenant, such as an on-site TDM coordinator, shall be
provided by Landlord with such costs being included as additional rent and reimbursed to Landlord
by Tenant within thirty (30) days after demand. If TDM facilities and programs are instituted on a
Project wide basis, Tenant shall pay its proportionate share of such costs in accordance with
Section 8 above.

     X. Waiver of Right to Jury Trial: Landlord and Tenant waive their respective rights to trial
by jury of any contract or tort claim, counterclaim, cross-complaint, or cause of action in any
action, proceeding, or hearing brought by either party against the other on any matter arising out
of or in any way connected with this Lease, the relationship of Landlord and Tenant, or Tenant’s
use or occupancy of the Premises, including any claim of injury or damage or the enforcement of any
remedy under any current or future law, statute, regulation, code, or ordinance.

37

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the day and year first above
written.

	 	 	 	 	 	 	 
	Landlord: SOBRATO INTERESTS #961

a California Limited Partnership	 	Tenant: BRIO TECHNOLOGY, INC.

a California Corporation
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	     /s/ JMS

 

	 	* By:
	 	     /s/ Yorgen Edholm

 

	 
	 	 	 	 	 	 
	Its:

	 	General Partner
	 	Its:
	 	President & CEO

 

	 
	 	 	 	 	 	 
	

	 	 	 	* By:
	 	     /s/ Karen Willem

 

	 
	 	 	 	 	 	 
	

	 	 	 	Its:
	 	EVP/CFO
 

*NOTE: This lease must be signed by two (2) officers of such corporation: one being the chairman of
the board, the president, or a vice president, and the other being the secretary, an assistant
secretary, the chief financial officer or an assistant treasurer. If one (1) individual is signing
in two (2) of the foregoing capacities, that individual must sign twice; once as one officer and
again as the other officer and in such event, Tenant must deliver to Landlord a certified copy of a
corporate resolution authorizing the signatory to execute this Lease.

38

 

EXHIBIT C

FURNITURE

Building cube/office furniture, art work and miscellaneous items

	 	 	 	 	 
	1st FLOOR
	 	 	 	 
	Total cubes

	 	43
	 	 
	Furnished Manager Office

	 	16	 	 
	Furnished V.P. Office

	 	1	 	 
	Small Conf. Rooms

	 	1	 	 
	Medium Conf. Rooms

	 	2	 	 
	Large Conf. Room

	 	1	 	 
	Training Rooms

	 	3	 	 
	Executive Briefing Center

	 	1	 	 
	Kitchenette

	 	1	 	 
	Lobby

	 	1	 	 
	Art Work

	 	18 pieces	 	 
	 
	 	 	 	 
	2nd FLOOR
	 	 	 	 
	Total cubes

	 	65	 	 
	Furnished Manager Office

	 	20	 	 
	V.P. Office

	 	0	 	 
	Furnished Executive Office

	 	1	 	 
	Small Conf. Rooms

	 	3	 	 
	Medium Conf. Rooms

	 	0	 	 
	Large Conf. Room

	 	2	 	 
	AN Conf. Room

	 	0	 	 
	Break out Area

	 	1	 	 
	Art Work

	 	4 pieces	 	 
	 
	 	 	 	 
	3rd FLOOR
	 	 	 	 
	Total cubes

	 	96	 	 
	Furnished Manager Office

	 	30	 	 
	Furnished V.P. Office

	 	1	 	 
	Small Conf. Rooms

	 	1	 	 
	Medium Conf. Rooms

	 	2	 	 
	Large Conf. Room

	 	2	 	 
	AN Conf. Room

	 	0	 	 
	Break out Area

	 	1	 	 
	Art Work

	 	None	 	 

 

 

	 	 	 	 	 
	4th FLOOR
	 	 	 	 
	Total cubes

	 	94
	 	 
	Furnished Manager Office

	 	36	 	 
	Furnished V.P. Office

	 	2	 	 
	Small Conf. Rooms

	 	1	 	 
	Medium Conf. Rooms

	 	1	 	 
	Large Conf. Room

	 	2	 	 
	A/V Conf. Room

	 	0	 	 
	Break out Area

	 	1	 	 
	Game Room

	 	1 foosball table, 1 ping pong table	 	 
	Art work

	 	5 pieces	 	 
	 
	 	 	 	 
	5th FLOOR
	 	 	 	 
	Total cubes

	 	83	 	 
	Furnished Manager Office

	 	30	 	 
	Furnished V.P. Office

	 	1	 	 
	Small Conf. Rooms

	 	2	 	 
	Medium Conf. Rooms

	 	0	 	 
	Large Conf. Room

	 	3	 	 
	A/V Conf. Room

	 	1	 	 
	Break out Area

	 	1	 	 
	Art Work

	 	9 pieces	 	 

 

 

	 	 	 
	Type of Room	 	Inventory
	Cube

	 	8x8 station with 1 corner and 2 rectangular work
surfaces, 1 overhead unit, 1 bookshelf, 1 B/B/F
pedestal and 1 F/F pedestal, 1 guest chair and 1
task chair
	 

	 	 
	Managers Office

	 	“L” Shaped Haworth office inc. 1 corner and 2
rectangular work surfaces, 1 overhead unit, 1
bookshelf, 1 B/B/F pedestal and 1 F/F pedestal, 1
round table, 1 desk chair and 1 side chair
	 

	 	 
	V.P. Office

	 	“U” Shaped Wood office set up to include, overhead,
pedestals, table, 4 chairs and 1 desk chair
	 

	 	 
	Executive Office

	 	1 glass desk w/peninsula, 1 leather Executive
chair, 1 sofa, 1 cabinet with television. (all
unassembled in a 2nd floor office).
	 

	 	 
	Training Room

	 	No furnishings
	 

	 	 
	Executive Briefing Center

	 	1 horseshoe conf. Table, 15 chairs
	 

	 	 
	Small Conf. Room

	 	48” Round Conf. Table, 4 chairs
	 

	 	 
	Medium Conf. Room

	 	72” Racetrack Table with 6 chairs
	 

	 	 
	Large Conf. Room

	 	96” table, 10 chairs, credenza, electric projection

screen
	 

	 	 
	Boardroom

	 	1 20 ft. Wood table, 12 chairs
	 

	 	 
	Kitchenette

	 	4 tables, chairs, refrigerator
	 

	 	 
	Lobby

	 	1 Receptionist station, 6 lounge chairs, 3 end

tables
	 

	 	 
	Break Areas

	 	3 tall tables, 9 stools

 

 

	 	 	 	 	 
	EQUIPMENT
	 	 	 	 
	1st
	 	 	 	 
	FLOOR
	 	 	 	 
	Room #

	 	Room Description
	 	Equipment
	 
	 	 	 	 
	     133

	 	ITS Research Lab
	 	3 Racks
	 
	 	 	 	 
	     100

	 	Lobby
	 	4 – Light Canons and glass screens
	 
	 	 	 	 
	     115

	 	Data Center
	 	Racks, ladder racking and patch panels
2 – 15 ton Data Air HVAC Units
	 
	 	 	 	 
	     118

	 	Security Room
	 	CCTV System
	 
	 	 	 	 
	     117

	 	Open Office Area
	 	Sound System
	 
	 	 	 	 
	     n/a

	 	Support Lab
	 	All racks
	 
	 	 	 	 
	     112

	 	UPS Room
	 	Comet MGE UPS
	 
	 	 	 	 
	2nd FLOOR
	 	 	 	 
	 
	 	 	 	 
	     222

	 	IDF Closet
	 	All Racks and patch panels
	 
	 	 	 	 
	3rd FLOOR
	 	 	 	 
	 
	 	 	 	 
	     322

	 	IDF Closet
	 	All Racks and patch panels
	 
	 	 	 	 
	4th FLOOR
	 	 	 	 
	 
	 	 	 	 
	     421

	 	IDF Closet
	 	All Racks and patch panels
	 
	 	 	 	 
	     462

 
5th FLOOR

	 	Computer Lab
	 	All Racks

 
15 ton Data Air HVAC Units
	 
	 	 	 	 
	     522

	 	IDF Closet
	 	All Racks and patch panels

 

 

EXHIBIT D

ASSET MANAGEMENT FEE

	 	 	 	 	 
	Months	 	Monthly Asset Management Fee	 
	 	 	 	 	 
	4/1/05-5/31/05
	 	$	5,460.62	 
	 	 	 	 	 
	6/1/05-5/31/06
	 	$	5,624.44	 
	 	 	 	 	 
	6/1/06-5/31/07
	 	$	5,793.17	 
	 	 	 	 	 
	6/1/07-5/31/08
	 	$	5,966.96	 
	 	 	 	 	 
	6/1/08-5/31/09
	 	$	6,145.97	 
	 	 	 	 	 
	6/1/09-6/05/10
	 	$	6,330.35	 

 

 

EXHIBIT E

MASTER LESSOR’S FORM OF CONSENT

LANDLORD’S CONSENT TO SUBLEASE

                (“Landlord”), as Landlord under that certain Lease (the “Lease”) dated
                by and between Landlord and                 (“Tenant”), as Tenant, subject to and
specifically conditioned upon the following terms and conditions hereby grants its consent to the
Sublease dated                 made by and between the Tenant, as sublandlord, and
                (“Subtenant”), as subtenant., a copy of which is attached as Exhibit A (“the
Sublease”), covering that certain premises (the “Premises”) commonly known as
                .

As conditions to the consent of Landlord to the Sublease, it is understood and agreed as follows:

1.     No Release. This Consent to Sublease shall in no way release the Tenant or any person or entity
claiming by, through or under Tenant, including Subtenant, from any of its covenants, agreements,
liabilities and duties under the Lease, as the same may be amended from time to time, without
respect to any provision to the contrary in the Sublease.

2.     Specific Provisions of Lease and Sublease. This Consent to Sublease consenting to a sublease to
Subtenant does not constitute approval by Landlord of any of the provisions of the Sublease
document or agreement thereto or therewith; nor shall the same be construed to amend the Lease in
any respect, any purported modifications being solely for the purpose of setting forth the rights
and obligations as between Tenant and Subtenant, but not binding Landlord. The Sublease is, in all
respects, subject and subordinate to the Lease, as the same may be amended. Furthermore, in the
case of any conflict between the provisions of this Consent to Sublease or the Lease and the
provisions of the Sublease, the provisions of this Consent to Sublease or the Lease, as the case
may be, shall prevail unaffected by the Sublease.

3.     Limited Consent. This Consent to Sublease does not and shall not be construed or implied to be
a consent to any other matter for which Landlord’s consent is required under the Lease, including,
without limitation, any Alterations under the Lease.

4.     Tenant’s Continuing Liability. Tenant shall be liable to Landlord for any default under the
Lease, whether such default is caused by Tenant or Subtenant or anyone claiming by or through
either Tenant or Subtenant, but the foregoing shall not be deemed to restrict or diminish any right
which Landlord may have against Subtenant pursuant to the Lease, in law or in equity for violation
of the Lease or otherwise, including, without limitation, the right to enjoin or otherwise restrain
any violation of the Lease by Subtenant.

5.     Default by Tenant under the Lease. If Tenant defaults under the Lease, Landlord may elect to
receive directly from Subtenant all sums due or payable to Tenant by Subtenant pursuant to the
Sublease. Upon written notice from Landlord, Subtenant shall thereafter pay to Landlord any and
all sums due or payable under the Sublease. In such event, Tenant shall receive from

 

 

Landlord a corresponding credit for such sums against any payments then due or thereafter becoming
due from Tenant.

6.     Termination of Lease. If at any time prior to the expiration of the term of the Sublease the
Lease shall terminate or be terminated for any reason, the Sublease shall simultaneously terminate.
However, Subtenant agrees, at the election and upon written demand of Landlord, and not otherwise,
to attorn to Landlord for the remainder of the term of the Sublease, such attornment to be upon all
of the terms and conditions of the Lease, except that the Base Rent set forth in the Sublease shall
be substituted for the Base Rent set forth in the Lease and the computation of Additional Rent as
provided in the Lease shall be modified as set forth in the Sublease. The foregoing provisions of
this paragraph shall apply notwithstanding that, as a matter of law, the Sublease may otherwise
terminate upon the termination of the Lease and shall be self-operative upon such written demand of
the Landlord, and no further instrument shall be required to give effect to said provisions. Upon
the demand of Landlord, however, Subtenant agrees to execute, from time to time, documents in
confirmation of the foregoing provisions of this paragraph satisfactory to Landlord in which
Subtenant shall acknowledge such attornment and shall set forth the terms and conditions of its
tenancy.

7.     Sublease Profits. Pursuant to Section ___of the Lease [Assignment and Sublease Section],
provided the Sublease remains in full force and effect, Tenant agrees to pay to Landlord each month
along with the base monthly rent due under the Lease, the sum of $                representing
Landlord’s fifty percent (50%) share of the amount by which the consideration received pursuant to
the Sublease exceeds the amount due to Landlord under the Lease less the reasonable subletting
costs.

8.     No Waiver; No Privity. Nothing herein contained shall be deemed a waiver of any of the
Landlord’s rights under the Lease. In no event, however, shall Landlord be deemed to be in privity
of contract with Subtenant or owe any obligation or duty to Subtenant under the Lease or otherwise,
any duties of Landlord under the Lease being in favor of, for the benefit of and enforceable solely
by Tenant.

9.     Notices. Subtenant agrees to promptly deliver a copy to Landlord of all notices of default and
all other notices sent to Tenant under the Sublease, and Tenant agrees to promptly deliver a copy
to Landlord of all such notices sent to Subtenant under the Sublease. All copies of any such
notices shall be delivered personally or sent by United States registered or certified mail,
postage prepaid, return receipt requested, to Landlord.

10.     Required Sublease Provisions. In consideration for Landlord’s consent to the Sublease, Tenant
and Subtenant represent and warrant that the Sublease contains all provisions required by Section
___[Assignment and Sublease Section] of the Lease and agree that the Sublease shall be deemed to
include all of the provisions required by Section ___of the Lease. In the case of a conflict
between the other provisions of the Sublease and the provisions required by Section ___of the
Lease, the provisions required by Section ___of the Lease shall prevail.

 

 

Landlord

by

its

Tenant

by

its

Subtenant

by

its

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